NEW YORK (CNN) -- CNN Money's Maribel Aber has your top business and financial news on this Wednesday, June 26.
Update: Home BancShares to buy Liberty Bank for $280 million
Home BancShares Inc. of Conway on Tuesday announced the signing of a definitive agreement worth $280 million to acquire Liberty Bancshares Inc. of Jonesboro, the largest in-state bank transaction in Arkansas history. Under the terms of the agreement, approximately 400 shareholders of Liberty will receive $250 million of Home BancShares common stock plus $30 million in cash. Wallace Fowler, chairman and CEO of Liberty Bancshares, said his family owned slightly less than 30 percent of the stock. The price represents a multiple of 1.06 times actual shareholder equity and about 1.6 times book value when intangibles like goodwill are included. John Allison, chairman of Home BancShares, called the deal "extremely accretive" for Home BancShares shareholders, and he told stock analysts in a webcast conference call that the deal should pay for itself in 18 months or less.
Pinky Punky store to close after almost 40 years
Pinky Punky, the women's clothing store known for its fanciful apparel, is closing its doors after almost 40 years in Little Rock and its owners are retiring. Caroline Cossey, who owns the store with partner Lou New, said the store would shut down on Saturday, June 29. Until then, all merchandise is 50 percent off. Cossey and New, both of Little Rock, opened the Arrangement in Colony West in about 1973 with partner Nell Cossey, Caroline Cossey's mother and New's sister. Nell Cossey died in 2007. The Arrangement featured upscale women's sportswear. After Breckenridge Village was developed, the partners opened Pinky Punky there in about 1975 but kept the Arrangement open for 18 months or so until their lease in Colony West expired. Pinky Punky stayed in Breckenridge Village until 2010, when the partners moved the store to Pleasant Ridge.
Home prices jump 12%, new home sales hit a five year high
The housing recovery continues to pick up steam, as home prices jumped in April, and new home sales hit a five year high in May. But a recent increase in mortgage rates could soon put the brakes on housing. The S&P/Case-Shiller home price index was up 12.1% in April, compared to a year ago, in the 20 top real estate markets across the nation. That was the biggest annual jump in prices in seven years. Prices climbed 2.5% from March, posting the biggest one-month rise in the 12-year history of the index. New homes sold at an annual pace of 476,000 in May, according to a separate government report. That's the best reading since July 2008, just before the global financial meltdown slashed homebuyers' access to credit. The pace of sales was up 2.1% from April, and up 29% from a year ago.
Bad at math? You're more likely to lose your home
Borrowers with poor math skills made up a higher percentage of homeowners in foreclosure during the housing bust than those who were skilled at arithmetic. According to a study released Monday, math-challenged borrowers were five times more likely to default on their loans. "Whether you're good with numbers predicts how likely you are to default," said Stephan Meier, an associate professor of business at Columbia Business School, who authored the report along with economists from the Federal Reserve of Atlanta and the University of Zurich. The study examined several hundred borrowers who held mortgages issued in 2006 and 2007 -- right before the mortgage meltdown. Of the study subjects, 25% of the borrowers who scored in the lowest bracket for math skills had defaulted on mortgage payments within five years of getting the loans. Meanwhile, only 5% of those in the top tier for math skills defaulted.