Refinancing Spurred Area Mortgage Market in 1998

Bank of Bentonville, First Federal Bank of Arkansas top list of Northwest Arkansas’ leading lenders

Bank of Bentonville once again leads the region in number of mortgages originated, but several other banks showed robust growth in either mortgages issued or the amount of money they loaned out in 1998.

Home owners who took advantage of low-interest rates to refinance their mortgages fueled much of that growth, bankers say.

The Northwest Arkansas Business Journal list ranks mortgage brokers by the number of loans they issued in 1998. For the second consecutive year, Arvest-owned Bank of Bentonville tops that list. The 2,191 loans Bank of Bentonville made in 1998 totaled more than $147.8 million.

That’s 31 percent more loans than the bank made in 1997 and a 65 percent in the amount of money loaned out.

Jennie Hill, senior vice president for Bank of Bentonville’s mortgage department, says much of that growth came from refinancing activity.

“Everyone’s business was up last year because of all the refinancing,” Hill says.

Interest rates have begun to creep back up this year, and Hill says the refinancing business has dwindled.

First Federal Bank of Arkansas ranked second among Northwest Arkansas lenders in number of loans (1,621) but first in number of dollars loaned out ($152.9 million).

Ross Mallioux, senior vice president, says low interest rates, refinancing and the strong economy in First Federal’s market area, all contributed to his bank’s strong performance.

Like Hill, Mallioux says the refinancing market has dropped “significantly” this year.

“Construction is still good but refinancing is about over,” Mallioux says. Commercial lending has picked up, however, he adds.

Larry Daniel, senior vice president of First National Bank and Trust of Rogers, attributed his bank’s robust performance (1,185 loans — a 50 percent increase over 1997 — for a total of $112 million, a 54 percent increase) to two things: the refinancing market and new construction.

Now, the refinancing business has ended, Daniel says, but “the construction business continues to be good. People continue to buy houses.”

First National Bank of Springdale is still a relatively small player in the Northwest Arkansas market, but the institution’s lending department reported the heftiest growth of any lender on the list. First National made 55 percent more loans (162) than it did in 1997. Those loans totaled $20.5 million, a 201 percent increase over 1997’s figures.

Robert Markovics, vice president of lending, says that performance “surprised a lot of people.” Some of it was due to refinancing, but most of the growth was the result of the more aggressive approach the mortgage department has adopted, he says.

“There was just a real concerted effort to grow,” Markovics says.