The more things change, the more they stay the same. For The First National Bank of Fort Smith, those are reliable words to live by.
The Fort Smith market leader’s approach to loans during its 146 years of existence has been “finding ways to say yes” to small-business owners, said Rob Husong, president of the bank’s Northwest Arkansas division, First National Bank of NWA (FNBNWA). The 22-year banking veteran joined the company in 2013 from Signature Bank of Arkansas, and embraced what he called the “community-first” banking model.
“That’s our heritage as First National Bank of Fort Smith,” Husong said. “You go back and look at the main centers of business in Fort Smith. We were there at the very beginning helping them, and that’s what we want to be in Bentonville.”
FNBNWA has been in the market for 14 years and claims a little more than 12% of the 52,176 checking accounts under holding company First Bank Corp’s banner. The corporation also holds 32,000 accounts in Fort Smith; 10,000 through its Citizens Bank charter; and 3,676 in Sallisaw, Okla. It owns Fort Smith-based BHC Insurance as well.
THE MOVE TO NWA
The First National Bank of Fort Smith made its first play in the Northwest Arkansas market in 2004, acquiring Bank of Rogers and its holding company, BOR Bancshares Inc., for $26.5 million. The sale added four branches to the brand — two in Rogers, and one each in Centerton and Lowell. One year ago, the bank opened its central branch location in downtown Bentonville’s Arts District.
“To be honest with you, we had a lot of people who weren’t really happy we bought this site,” Husong said of the Southwest A Street location. “For one, we were one of the first in the Arts District to buy, and we had a lot of people that were really excited about Bentonville making this the Arts District and what it could be.”
Feigning disappointment, Husong added: “It was like, ‘Oh, a bank just bought it.’”
“Their initial thought was we were going to build some little cookie-cutter bank. In the past, banks used their buildings as branding [opportunities], and I’m not saying there’s anything wrong with that. But as somebody who lives in that community, I don’t know if that provides value back to that community. So what we did was build something we knew the residents of downtown Bentonville would be proud to know is here.”
Husong noted, like the Fort Smith location, the Bentonville branch “is in line with what the community is trying to do.” The interior lobby features open offices and glass walls. To keep with the personality of the city, it features interior and exterior art exhibits. Eureka Springs-based artist Zeek Taylor curates the collection. Taylor has had art featured in the governor’s mansion as well as in Crystal Bridges Museum of American Art.
The “community-centric” tactic is one FNBNWA will soon replicate with its planned Fayetteville branch. The bank now operates a small office on Joyce Boulevard, but there are plans for what Husong calls a “banking center” similar in scope and size to the Bentonville location. And like Bentonville, the branch will be unique to the “design and personality” of Fayetteville. Husong did not disclose details, but said a property was under contract and an announcement would be forthcoming in the “next 30 to 60 days.” Sam T. Sicard, the bank’s president and CEO, said he hoped construction would begin “before the end of 2018.”
A GROWTH-HEAVY MARKET
During Husong’s five years with the bank, loans in the Northwest Arkansas market have tripled from $89 million to around $270 million. Sicard said the trend line is “out-pacing deposit growth, but we’re still OK. We’re still liquid. We’ve still got cash reserves.”
Sicard said most banks loan back 70% to 90% of their deposits.
“We’re right around 80%,” he explained. “With the downturn after 2008, deposit growth exceeded loan growth, and our loans kind of flattened out. But our deposits kept increasing.
“But now, with the economic recovery of the last few years and the growth of Northwest Arkansas, we’re coming back to that 80% range, which is right in line with industry averages. Our loan-deposit ratio is much higher in Northwest Arkansas — over 100%. But we’ve got a lot of core funding deposits in Fort Smith, and I want to add that I don’t think it’s extremely soft in Fort Smith. I just think Northwest Arkansas is more the exception to the norm.”
Husong said the loan pacing issue is typical among banks in Northwest Arkansas, which he called a “growth-heavy market.” A key to making the FNBNWA brand stand out in the competitive environment has been thinking outside the box. That goes for both presentation and bank-to-customer interaction, Husong said.
In October 2017, the bank partnered with Children’s Advocacy Center of Benton County in Little Flock. With support of local businesses, they were able to raise $26,000 in sponsorships for a handmade Christmas card program. Each card features the drawing of a child helped by the center, along with their story. Husong said since the bank launched the effort, he’s already had 13 new businesses express interest in the 2018 program.
Other efforts have included a $150,000 donation to Bentonville West High School in Centerton, which resulted in the field at the school’s football stadium being named First National Bank of NWA Field.
A personal favorite of Husong’s is a partnership with Bentonville Brewing Co. to develop the 1872 Old Fort Lager. The beer gets its name from the year the bank was chartered. Around that same time, American brewers were maturing. The decade also welcomed Coors Brewing Co. and Anheuser-Busch.
“It was an awesome tie-in to our origins,” Husong said. “So I approached them about doing something, and they told me they’d always wanted to do a lager. But the issue there is that lagers take two weeks longer to produce [than ales]. So I told them, ‘I’ll make up the difference and commit to buying half the beer.’”
“It was just a fun project working together that helped them do something different that they normally wouldn’t be able to do,” Husong said, adding the bank used its share of the inventory as a giveaway. The Bentonville banking center also keeps it on tap in the lobby, along with brews from Bentonville-based Bike Rack Brewing Co.
Attend a special event at the bank’s Bentonville branch, and you’ll likely be offered a complimentary brew. And if beer’s not your thing, Husong notes you can stop by for a free cup of coffee anytime from locally owned Kennedy Coffee Roasting Co.
“Those are my marketing dollars,” Husong said, adding it “changes the image of who we are.”
“Banking may never be cool, but why not have a little fun?” he said.