Banks Sprout Branches Throughout Region

Northwest Arkansas banks have been building branches throughout the area to make banking more convenient for customers, who have responded by increased usage of the branch locations.

“It certainly is a trend in banking to put banks where they are convenient for customers,” says Doug Kittrell, president of Commercial Bank of Springdale.

Besides having main banks in Fayetteville and Springdale, Commercial Bank, which has assets of about $40 million, has partnered with Harps Food Stores to put full-service branch banks in some of Harps’ supermarkets.

Commercial Bank already had branches in two of Harps stores in Springdale: the Harps at 2894 W. Sunset Ave. and the Price Cutter Food Warehouse at the intersection of Thompson Street (U.S. Highway 71B) and Sunset Avenue.

Commercial Bank opened a branch May 5 in the newly renovated Harps in Plaza Shopping Center in Springdale, and a branch is scheduled to be open by late June in the Harps store currently under renovation in Fayetteville’s Fiesta Square shopping center.

Kittrell says he will wait to see how popular the new branch banks are before opening more branches.

Branching south

Dan Dykema, CEO of the holding company of Arkansas National Bank in Bentonville, says that bank opened two branches in Fayetteville last year and will open two more there this year.

“We’re going strong,” he says, adding that expansion plans for the next two years have already been made.

A branch of the bank on Front Street in Fayetteville will be closed when a 6,000-SF branch in the city’s Spring Creek Centre opens this summer, Dykema says.

Arkansas National also plans to open a branch at Wedington Drive and Salem Road in Fayetteville. The site is apparently a hot spot, with McIlroy Bank and the Bank of Fayetteville also planning branches in the vicinity.

Arkansas National already had a branch at the corner of Mission Boulevard and Crossover Road in Fayetteville.

The bank plans to install automated teller machines this summer on lots it owns in Springdale and Rogers and to build branch banks on those lots next year.

Dykema says the bank, which has $209 million in assets and refers to branches as “independent community banks,” studies traffic patterns before deciding where to build branch banks.

Doubling branches

The Bank of Fayetteville is doubling the number of branches it operates with three new locations that are scheduled to be open in Fayetteville within the next year.

John Lewis, president of the bank, which had $180 million in assets as of May 7, says the branch banks are expensive to build (between $500,000 and $1 million each), but customer convenience comes first.

“You’ve got to do it all,” he says, referring to branches, Internet banking and telephone banking.

Two new branches will be built: one at the corner of Crossover Road and Mission Boulevard and one on Wedington Drive near U.S. 71. The other new branch will be located in a former McIlroy Bank branch at 15th Street and School Avenue.

Although the new branches won’t be as unique as the bank’s train branch on Dickson Street, Lewis says, they will vary in appearance.

“We need to serve existing customers and reach out to new ones,” says Lewis.

The bank’s 10-year plan calls for two more branch banks to be constructed after the three new ones open next year.

Elkins expansion

Besides a main bank in Fayetteville, McIlroy Bank & Trust has six branches in Fayetteville, two of which are located in the city’s Wal-Mart Supercenters.

Two new branches are in the works: One should open in September at the corner of Arkansas Highways 16 and 74 in Elkins, and the other is planned for next year at the corner of Wedington Drive and Salem Road in Fayetteville.

“We continue to think they’re important to our customers,” says Jim Glenn, president of McIlroy Bank. “They’re the most expensive delivery channel we’ve got. But most of our customers continue to like the convenience. … If they want the full-service branch, then that’s what we’re going to provide.”

McIlroy Bank, which had $442 million in assets as of April 1, has 16 ATM machines located around Fayetteville and plans to implement Internet banking by summer, says Glenn.

For McIlroy, ATM banking has been increasing by about 30 percent per year, and branch banking has increased by 20 percent a year, Glenn says.

Holding steady

NationsBank, which is based in Charlotte, N.C., has a main bank in Fayetteville and nine branch banks in Northwest Arkansas — four in Fayetteville, three in Springdale, one in Rogers and one in Bentonville.

No more branches are planned for the area, says David Russell, regional consumer executive for NationsBank in Fayetteville.

“I think 10 is probably the appropriate number for these two counties,” he says. “It’s a science with NationsBank. They are all viewed as being in the locations where they best serve the customers.”

The branch banks are also located in potential growth areas, Russell says.

Because of expense, NationsBank is investigating other banking options, such as Internet banking from home and a new ATM strategy.

“There are a lot of delivery options out there besides brick and mortar,” says Russell.

NationsBank is merging with BankAmerica of California later this year. NationsBank’s new name has yet to be determined.

NationsBank closed nine branches across the state — including two in Fayetteville — last year.

Awaiting merger

Besides a main bank in Rogers, First Commercial Bank has five branches — four in Rogers in one in Bentonville.

The bank is being acquired by Regions Bank of Birmingham, Ala. The sale should be final in September.

“We probably will not do anything in the near future,” says Tom Wray, CEO of First Commercial. “We won’t address the branch banks until after the merger.”