Bashful Bankers Near $1B

FORT SMITH — Four acquisitions since 1991 have let one of the softest spoken, and apparently softest hearted, men in the Arkansas River Valley turn a bank holding company into a near $1 billion diversified financial services firm.

With $958.8 million in assets through the first quarter, First Bank Corp. is positioned to make some noise as the third-biggest banking, insurance and investments power in western Arkansas. Only regional dynamos Arvest Bank Group Inc. — the Walton family owned, $4.9 billion Bentonville chain — and publicly traded Superior Bank ($1.7 billion) in Fort Smith are larger.

But no one in Fort Smith expects to hear much about the success. They say FBC Chairman Sam M. Sicard, 62, is as quiet as he is generous. The company’s bell cow, First National Bank of Fort Smith, is a major financial supporter of every cause from the University of Arkansas at Fort Smith to the Boys and Girls Club.

“Sam leads not only with his head but with his heart, and that’s a rare combination in the banking business,” said Richard Griffin, an owner of Griffin Construction Co. and Griffin Properties in Fort Smith.

“I owe my very business existence and what prosperity I have to First National Bank,” Griffin said. “Any bank will loan you money when you’re up, but you have ups and downs when you’re in business for 40 years, and First National is there when a customer or the city needs them. I dealt with Sam’s daddy and [FNB board member] Mont Echols. I expect they’ll be the last of the family owned banks.”

Samuel T. Sicard, 26, an assistant vice president at First National, represents the fifth generation of family leadership at the bank. The heritage dates back to the turn of the century and reached its heyday from the 1940s to the 1960s when Sam M. said his father, McLoud Sicard, was always scrambling to find money because the bank had “loaned up all it had.”

Thanks to its aggressive post-Depression lending strategies, neither First National or FBC has to scramble anymore. First National grew as Fort Smith’s economy did, and it now has more than $632.7 million in assets.

During 2002 it posted a 1.34 percent return on assets and an 8.38 percent return on equity. It had $8.596 million in net income last year, a 25 percent increase over $6.889 million in 2001.

Giant in the Making

The holding company, formed in 1989 when it had $401.3 million in assets (see chart), started a series of acquisitions in 1991 that have more than doubled the group’s size.

That year FBC bought Sequoyah County Bancshares and National Bank of Sallisaw in Oklahoma at the behest of Donald Armstrong, their former chairman. Sam M. said there was no plan to grow the operation to a billion-dollar business, it just occurred by happenstance and growth in the Arkansas River Valley.

The Oklahoma subsidiary has assets of $76.8 million today.

“We didn’t sit down and form a plan,” Sam M. said. “Donald just called and said, ‘I’m ready to retire, and you’re going to buy my bank.’ Their local community philosophy fit with ours, and it was a good opportunity.

“We are comfortable at the size we are now. It’s unlikely that you’d see us acquire something from the other side of the state, but if it’s in our territory and it would be profitable then we’d always be interested in looking at it.”

Vista Bancorporation and Citizens Bank & Trust Co., which has $227.4 million in assets today, was acquired by FBC in 1994. Then in 1999, FBC bought out River Valley Bank of Lavaca and merged the assets of its Barling, Lavaca and Charleston branches into First National and those of its Van Buren branch into Citizens.

In 2002, FBC acquired the Brown-Hiller-Clark & Associates insurance agency, which operates autonomous Arkansas ($10.5 million) and Oklahoma ($694,087) offices. FBC also owns a small, fee-based real estate appraisal business.

Throughout Sequoyah (Oklahoma), Crawford, Franklin and Sebastian counties, FBC now has 21 bank locations, 25 ATMs and two insurance offices. The group has about 50,000 customers over a 50-mile radius.

First National employs about 300 people, down 10 percent in recent years through attrition and retirements.

“We have never laid off anyone, and we’re never going to,” Sam M. said. “But with interest margins being what they are, we’ve been tightening the belt and finding the places where we’re wasting money. Because of the technology we have today, we can just handle more capacity with fewer people.”

Through the first quarter of 2003, FBC had net income of $3.594 million, a 29 percent increase over $2.791 million during 2002’s first period.

During 2002, FBC made $13.17 million, an 18 percent increase over $11.127 million for 2001. And the company is on pace to break $14.5 million this year. Loans for FBC overall are up 9 percent, from $586.37 million during the first quarter of 2002 to $636.7 million through March 31 of this year.

“That’s real solid,” Sam T. said. “To grow 9 percent considering the status of the economy and the average growth economy we have in our area, that’s pretty good.”

Sam T. also said much of FBC’s profitability of late can be attributed to Citizen’s mortgage department — a component the primarily commercial First National didn’t have before. The recent addition of B-H-C, the insurance component, is another contributor to earnings growth.

Loyalty and humility

Joel Stubblefield, chancellor of UAFS, said Sam M. has been on the school’s board for 24 years and that in 1989 the banker led then Westark College’s first major money-raising campaign to supplement state funding. Within nine months, Stubblefield said, Sicard had helped raise $5 million. Since then, Sicard has helped the school raise $50 million.

“We’re one of the top schools of our kind nationally in terms of endowment per student, and Sam has been a big part of that,” Stubblefield said. “In terms of philanthropy, there is no worthy cause in Fort Smith that First National or Sam personally doesn’t support. He is a class act and probably the most respected businessman in our community.

“When there is a hot issue in a board meeting, he will let everyone make their remarks first. But when he speaks, he’s truly the E.F. Hutton of Fort Smith. He doesn’t speak loudly or really that often, but when he does he gives wise counsel.”

Sam T. said his father’s “loyalty to the community” and “humbleness as a man” are the two things he admires most. Commercial customers of First National say those attributes trickle down through the organization, and that’s part of the reason why they do business with FBC.

Warren Thompson is controller of J&B Supply Inc. in Fort Smith, a wholesale plumbing, HVAC and electrical supplier with eight locations including Bentonville and Springdale. In particular, he’s a fan of FBC’s responsiveness and accountability.

“They don’t blame someone else from somewhere else for anything,” he said.

Ron D. Wright owns Action Inc. of Barling, a mechanical contractor that employs 200 people and has an office in Maumelle. His company has banked with First National for 23 years, and he’s banked there all his life.

“It just didn’t seem right to go anywhere else,” Wright said. “Come to think of it, we’ve never even had anyone else come out here with a true honest effort to try to come get our business. They wouldn’t get it though, so maybe they know that and that’s why they haven’t.”

A Perfect Match

Jim Williamson, chairman and CEO of Citizens, and Luther “Luke” F. Gordy III, Citizens’ senior vice president, said the union with FBC has made both institutions stronger. Citizens has always been a highly profitable bank and in 2002 was among Northwest Arkansas’ best performers with a 1.57 percent return on assets.

But Williamson said after being pursued by several big banks, it became clear that the best way to grow and remain viable was to partner with their longtime friends from Sebastian County. The acquisition happened through a stock swap.

“We’d always had respect for each other, and in the time since the consolidation that respect has not gone away,” Williamson said. “It’s only probably deepened.”

Gordy said there’s a lot of similarity between the two organizations such as First National being the oldest nationally chartered (1872) bank in Arkansas and Citizens is the second-oldest state chartered bank (1886). Both banks put a premium on community involvement, and their complimentary foci and synergies such as being able to entertain larger credits with consolidated capital enable them to compete with the big boys.

“We figured out we were too big of a financial player in too small of a market to just be a niche bank in one area,” Sam T. said. “Now that we’ve done a lot of expanding during the last decade, we’re focused on integrating a lot of services and doing them well.”

To read read Jeffrey Woods’ sidebar about FNB’s legacy, click here.