Arvest-Fayetteville Tops its Record ROE

You can call it Arvest or you can still call it McIlroy, whatever the choice, just call it a success.

Arvest Bank in Fayetteville, formerly McIlroy Bank & Trust, enjoyed its best return on equity (22.23 percent) in the bank’s rich 131-year history.

The actual name was changed in November, something many — including friends and foes — felt would hurt the bank with the ever-familiar hometown name vanishing. On the contrary. The bank has enjoyed growth in each of the 16 years since being purchased by Jim Walton’s Arvest Bank Group Inc. in 1986.

“Even though we’ve merged, we’re still managed separately,” said Gary Head, president and CEO of Arvest Bank-Fayetteville. “Jim holds each bank accountable to a budget of its own. There is a local board at each bank that is still making local decisions. We are a $4.6 billion bank [group] that can still be local. We’re big enough to handle the largest loan customer in Northwest Arkansas but still local enough to make the type decisions we’ve made before.”

McIlroy led Washington County with a 17.79 percent market share in the most recent public FDIC reports from last summer. That figure will certainly rise in 2002 with the mergers of Springdale Bank & Trust and Farmers and Merchants Bank of Prairie Grove. In fact, those two banks had a combined 14.16 Washington County market share in 2001. First National Bank of Springdale was second with a 14.81 percent market share.

Head believes the name change has made things less confusing for customers.

“What the merger meant for our customers was more services and conveniences but no change in the way they were treated before,” Head said. “When customers drive to Tulsa or Little Rock maybe to shop for something they can’t get around Northwest Arkansas there’s going to be an Arvest Bank there. When it was the State Bank a lot of people did not realize that was an Arvest Bank. If you drive to Oklahoma City or Norman to watch Arkansas play basketball you can now use our ATM. It’s all about the convenience factor for our customers. We want to have the best of both worlds.

“I go to my doctor because I trust that doctor. If he moves his office, chances are I will still go to him. I think people handle their financial service the same way. People are used to dealing with someone they’re comfortable with.”

On May 15, Head will be over 10 branches of Arvest with the opening of the Wedington Drive facility. There will be nine Arvest branches in Fayetteville and Head will also be the local president of the Elkins branch.

The area’s economy went against the book for most of the country in 2001. Head said the answer is quite simple.

“We’ve done well because our customers have done well,” Head said. “Our economy continues to amaze a lot of people across the country. People forget that the largest retailer in the world is just right up the road, one of the most profitable trucking companies in the world is, too. And we now have the largest meat company in the world.”

The Arvest Bank Group is a $4.6 billion company, including $3.7 billion in investment and trust assets.

While many banks have merged with insurance companies, investment firms or bond houses, Arvest has moved forward by keeping things in house with Arvest Asset Management, a division that Head said makes Arvest a “one stop shop.”

“If a customer comes in and the bank product fits his or her needs, great,” said Mel Parks, CEO of Arvest Asset Management. “But if they need more, well, guess what, we walk them to the end of the hall. We want a seamless delivery to our client. You know that we’re gonna take care of you, from doing the 401k for your employees on down.”

Arvest recently brought Brian Cole on board as senior vice president of business development for both the Fayetteville and Springdale Arvest locations. He had been with First National Bank in Springdale.

ROE Recovery

10-year return on equity for Arvest- Fayetteville (formerly McIlroy Bank):

YeartROE (%)

1992 — 19.23

1993 — 17.60

1994 — 14.70

1995 — 14.94

1996 — 15.58

1997 — 17.65

1998 — 17.96

1999 — 15.27

2000 — 20.96

2001 — 22.23