Leaving a Legacy

A city that’s rich in tradition has many individuals responsible for its makeup. From Fulbright to Futrall, Fayetteville has been molded into the unique community it is today.

But ever since the son of a North Carolina shoemaker decided to head west about 165 years ago, there has been one name — McIlroy — that’s most synonymous with the town.

The first family of Fayetteville played a major role in bringing the University of Arkansas to the Ozark Mountain foothills, keeping the residents calm when the town’s top banker fled the county, and later revitalizing the downtown square by taking a gamble with a new building there when it seemed the area’s infrastructure was collapsing.

Today, the McIlroy name is diminishing somewhat in power in Fayetteville. But it will forever outline the town’s history.

Hayden McIlroy, a fourth generation of Arkansas McIlroys, runs his private investment business out of Dallas. But he has maintained a Fayetteville presence through his elaborate penthouse on the north side of the square and several business dealings. He is also a UA Alumni Association board member and has a daughter, lawyer Melinda McIlroy, in Fayetteville. He also has two other daughters — Melissa and Michelle — and will soon celebrate his 30th anniversary with his wife Mary Joe.

McIlroy Bank, born the same year as the UA in 1871, is the oldest bank in Arkansas. The bank had assets of $140 million in 1986 when it sold to Jim Walton’s Arvest Bank Group Inc.

The McIlroy family’s name will be eliminated from the bank by Arvest on Nov. 15, a move even some of the chain’s competitors don’t understand.

The bank’s charter, the oldest in Arkansas, will still be used as the shell into which all of Arvest’s banks are being consolidated.

“That’s Arvest’s choice,” said John Lewis, president of the Bank of Fayetteville. “As a personal matter, I hate to see [the McIlroy name] go. It’s such a rich and deep part of history in Fayetteville. It’s been a presence here for about 150 years.”

Recently, McIlroy Plaza at the Crossover Road and Mission Boulevard intersection changed to Crossover Court.

Hayden McIlroy deliberated for years before selling to Walton. When the banking climate was changing, the two businessmen often discussed trends in the industry.

“In the ’70s in the United States, there were probably thousands of individual banks,” McIlroy said. “But by the ’80s, that number had shrunk in half or more.

“It was a really difficult decision to make. It was just a personal desire to do something different. I had never had the opportunity to do anything but work in a bank. I was more or less burned out and just wanted to try some different things.”

Hayden McIlroy began as a teller at the bank at the age of 21 shortly after his father died. He worked his way through various departments before becoming chairman and CEO.

Arvest has grown the institution’s assets to $485 million today. Gary Head, Arvest McIlroy’s president, said the bank is even having it’s best year ever with a 21.5 percent return on equity and a 1.40 return on its assets.

Customers know the Arvest and Walton names are as solid as the McIlroys. But local loyalties still run deep.

“I hate to see the McIlroy name taken off,” said longtime Fayetteville businessman Bob McKinney. “It put in the first drive-in window, maybe in the state, in the early ’60s. And from a standpoint of the image, we’ve all grown up seeing that name.”

Smokeys to Ozarks

William McIlroy set out from his North Carolina home with his brothers in 1835. After a stopover in Chattanooga, Tenn., they made their way into Arkansas, settling near the small towns of Cass (Franklin County) and St. Paul (Madison County). William ran a dry goods business, making most of his money selling hides and furs in Madison County before finally moving to Fayetteville. In 1855, he opened a similar business with a $7,500 investment, buying the store from James Sutton on the corner of East and Center.

On Jan. 2, 1871, Fayetteville banker and former Union soldier Denton D. Stark brought in William McIlroy as a 20 percent partner with a $5,000 investment.

Also in 1871, the state settled on Fayetteville as the site for a new university. A handful of towns — including Prairie Grove and Batesville — bid for the university. Rumor was that Little Rock felt it should have been the only choice and did not put in a bid. The state needed the university so it could receive federal funds.

William McIlroy had purchased a 106-acre farm in west Fayetteville from the Freyschlag family, a group of Bavarian émigrés who left Arkansas in search of gold in California. McIlroy had purchased a 65-acre tract from the Freyschlags for $500 in 1857. That tract would eventually become home to the university’s main campus. A 40-acre tract that is now home to Reynolds Razorback Stadium, was purchased by McIlroy from Presley Smith in 1851 for $100. The recent renovation of Razorback Stadium cost the UA about $106 million.

McIlroy’s farm totaled 160 acres when he agreed to sell it to the state for $12,000 for the site of Arkansas Industrial College, which would later become the UA. The school opened on Jan. 22, 1872, with eight students attending class in William’s former farmhouse.

McIlroy Bank helped finance the construction of University Hall — known today as Old Main — in 1875.

McIlroy Bank, which remained private until it became chartered in 1892, helped the local economy through trying times following the Civil War. There were times when the state couldn’t pay salaries at the UA, so the bank would advance the money to employees.

As for William McIlroy, legend has it that when the threat of Civil War was on the horizon, he hauled $30,000 of gold in small containers to his brother’s land near Mulberry. During the war, circa 1862, Confederate soldiers torched his business, McIlroy and Van Hoose Dry Goods, and it went up in flames along with almost every other business in Fayetteville, including the Van Horn Female Seminary, Arkansas Industrial College and St. Paul’s Episcopal Church.

The 3rd Louisiana Brigade, which had brought the terror to Fayetteville, was taken down two weeks later at Pea Ridge.

Banker Flees Country

William McIlroy assumed control of the bank in 1874 at age 64 when Stark fled to Canada, defrauding McIlroy of about $45,000. Stark was eventually captured and returned. Although he was indicted, he was released because state laws didn’t bind a partnership into individual responsibility.

Meanwhile, William McIlroy personally chiseled away the name D.D. Stark & Co. off the bank’s door. Today, Hayden McIlroy still has the original safe from the bank with Stark’s name on it.

William McIlroy kept much of the news concerning Stark’s antics a secret so customers would remain calm and continue doing business with the bank.

William McIlroy was certainly one the town could trust. He was said to be good to the point of boring, particularly compared to some of the other powerful people in Fayetteville during that era. Joseph Dickson, the man for whom Dickson Street is named, was fittingly enough a very strong personality. So was Lafayette Gregg, a Union colonel and Arkansas Supreme Court justice, and David Walker, another former state Supreme Court justice but one who had favored the Confederate cause.

William McIlroy was never in the military, never gambled and his only public office experience was being the road overseer in the Boston Mountains. Jim Van Hoose observed in his diaries that McIlroy’s biggest vice was attending country dances. Nevertheless, he earned the nickname “Uncle Billy” for his Billy Goat Gruff personality.

The second generation of Arkansas McIlroys would soon take control of the bank.

William McIlroy died in 1868, at which time his son Robert McIlroy and Robert’s mother took over and changed the name of the bank to The Banking House of McIlroy & Co. It would become the McIlroy Banking Co. in 1892. Jim McIlroy, another son of William, was later in charge of the bank, as was his son, W. Hayden.

On Sept. 15, 1934, three bandits took advantage of unsuspecting employees at the bank and made off with $5,671. They hopped into a getaway car and were never found. It was the only robbery — Stark’s exploits aside — the bank ever suffered.

McKinney gave the bank a false alarm years later while he was playing on the bank’s back staircase, reenacting a scene from a movie he’d watched earlier that day at the Palace Theater. His father’s insurance agency was in the McIlroy building. He was playing a cowboy shouting as he ran up and down the stairs at a saloon.

“People in the bank heard the noise and they called the police,” McKinney said. “I was 10 years old and here came Fayetteville’s finest. My father looked at me and my mother and said, ‘He’ll never make it.'”

McKinney recalled W. Hayden McIlroy being a stern, yet very noble businessman. A band had come through the town for a gig, but the local hotel would not cash their paycheck as they were trying to leave town for another performance.

He met the band at the bank, opened up and cashed their check so they could be on their way.

Staying on the Square

Finally, Hayden McIlroy, the great grandson of William, led the bank into the modern era by tearing down its building and totally rebuilding it in 1972, 101 years after the bank’s birth.

“I was trying to salvage the identity of Fayetteville,” Hayden McIlroy said. “Otherwise, Fayetteville was starting to move up toward Springdale. There would not have been a central district. There would have been the Northwest Arkansas Mall and the highway. But when we built our new building, First National Bank decided to stay on the square, too. At that time, the square had become a disaster.”

Lewis, who grew up close friends with Hayden McIlroy, was president of First National before founding the Bank of Fayetteville in 1987.

“I consider Hayden to be one of my best personal friends,” Lewis said. “I always respected his integrity and his judgment. When we were competitors, we fought like tigers during the day, but at night we would get together for things that benefitted our community.”

The admiration is mutual.

“John is providing a great service for Fayetteville with [Bank of Fayetteville],” McIlroy said. “I’d hate to think what would happen to the economy in Fayetteville if it had to depend on someone like Bank of America. Its headquarters probably doesn’t even know where Fayetteville is.”

Head was hired fresh out of college by McIlroy Bank in 1983. He became president during its changeover to Arvest.

“I was a credit clerk,” head recalled. “I made about $700 a month and was tickled to death to have a job.

“Hayden inherited the bank at a very young age. Considering the big shoes he had to fill, along with the large responsibilities, it’s pretty amazing. Anything that lasted through four generations is pretty awesome. That’s pretty rare these days.”

The McIlroys also played a key role in the first cable television coming to Fayetteville, which was one of the first cities in the country to get the service. And Fayetteville’s first water system was made possible through McIlroy Bank’s investment.

The name of the bank may be changing, but McIlroy’s presence will last for quite a while. McKinney, whose father opened an office in the McIlroy building in 1939, said the family business has kept its checking account at the same bank for the last 62 years.

“The bank’s one of your best friends,” McKinney said. “You always want to keep good relations with your bank. You’re only as good as your credit.”

With McIlroy Bank, it was only as good as its word, which was very good for 115 years.