Benefit Bank Breaks Tradition, Centers On ?Homey? Branches

Instead of a grandiose entrance with marbled portico, pillars and a tall ceiling — traditionally used to inspire confidence in a bank’s stability — Benefit Bank of Fort Smith has a covered front porch complete with white wicker furniture for people watchin’. Inside, the décor is a homey combination of wood and wallpaper, highlighted by a living area fit for a Sunday afternoon social.

“It’s meant to make the customer more relaxed,” said Joe Edwards, the federally chartered thrift’s president and CEO. “It is all about setting them at ease.”

Edwards said rather than form a focus group and zero in on marketing tactics, he and his wife of 36 years, Judy, discussed what would make them comfortable as customers. The other officers in the 1999 start-up venture agreed, and the concept has been a trademark ever since.

The homespun, no-frills approach is an apparent hit with a certain demographic of the Fort Smith market. After first opening its doors with one location and $6 million in capital, Benefit as of March 31 had $110 million in assets, up 26.6 percent from $86.9 million on Dec. 31 of 2002.

Benefit, based at 8300 Phoenix Ave., opened its third and fourth locations earlier this year.

Even as of Dec. 31, when the concern still just had two branches, it ranked No. 11 out of 27 privately held banks and thrifts in the six-county area with a 1.25 percent return on assets. It had the sixth best ROA in the two-county Arkansas River Valley area at the same time.

Benefit was also the fourth-best low charge-off ratio performer in the region with a 0.05 percent rate.

Edwards said the credit for the success belongs to his 52 coworkers who make up the rest of Benefit’s staff.

“You don’t have to worry about a lot of other issues when you work with a great team,” he said.

The thrift’s loan portfolio is about a 50-50 split of home mortgages and consumer-commercial loans, said James Wiggins, Benefit’s senior vice president and chief commercial lender.

“Our portfolio is representative of the community,” he said.

Wiggins spent several years in banking before leaving the industry to be an entrepreneur. But the pull of banking was too great, he said. After three years, Edwards’ group called looking for experienced lenders.

“They wanted me to be an entrepreneur in banking,” he said.

Wiggins said some of his lending practices today are based on what he learned trying to get loans for his development company.

“It’s relationship banking,” Wiggins said. “We have people who say this is the way banking used to be.”

The principals have their eyes on the Van Buren market and “conservatively aggressive growth,” Wiggins said.

Edwards, a Fort Smith native, graduated from the University of Arkansas then worked for a CPA firm for a while. Later, he got a job with the former Superior Federal Bank in Fort Smith and stayed there for nearly 20 years. Eighteen of those years he was the bank’s chief financial officer and he spent one as its president. During the same time, he saw Superior’s assets grow from $125 million to 1.3 billion.

Edwards did consulting work before his wife convinced him there was a need for more banking options in Fort Smith. So he and a few others wrote up a prospectus and collected the startup capital from 40 local families.