Signature Signs On for Success

There’s a paperweight on Gary Head’s desk that reads: Success is the best revenge.

Only time will tell for sure, but success may be in the cards for his Signature Bank of Arkansas.

The bank’s holding company, White River Bancshares Inc., made Arkansas history in January by collecting more than $44 million in start-up capital. The business opened as a legal bank on May 9, and its officials are already considering another stock offering of up to $10 million. On June 10, the group inked a deal with Raymond James Financial Inc. to provide investment services at all of its planned offices.

Raymond James of St. Petersburg, Fla., manages $25 billion nationwide under its investment management subsidiary and $136 billion companywide. The financial services provider already has six locations in Northwest Arkansas — four of those within Arvest Asset Management offices.

Head, Signature’s chairman and CEO, said the agreement adds an additional layer of services for customers.

Another area start-up, Legacy National Bank in Springdale, has signed Smith Barney of New York as its financial service partner.

Officials said Signature already has more than $10 million in deposits and about $52 million in assets, numbers that have been in constant flux during the bank’s heady infancy.

The company has closed on more than $120 million in loans since its beginnings a year ago as a Community First Bank loan-production office. It had $70 million more in the pipeline as of mid-June, said Dan Hendricks, Signature’s chief credit officer. The bank is in the process of buying back the loans it made as Community First, Head said.

Signature’s loan cap is about $9 million, he said, so Signature has relationships with several banks in southern Arkansas that are willing to participate or purchase loans above that value.

Officials are considering another stock subscription because would-be investors keep calling and offering to write checks, Head said.

“There’s a waiting list,” he said.

Hendricks said the bank would like to keep fewer than 500 shareholders, so it won’t have to go public, but it would like to have more from Benton County.

Far from egomaniacal about people throwing money at him, Head said he is “humbled” by the entire experience. He works for the more than 320 shareholders who bought into the Signature concept and the customers the bank hopes to capture from the ever-tightening Northwest Arkansas banking market, he said.

Signature Strategy

Of the start-up banks in the two-county area announced last summer, Signature was the last to open but will be the first to move into permanent facilities.

Head hopes to move White River Bancshares and the first Signature office at the end of July into the headquarters at Joyce Boulevard and Crossover Road in Fayetteville.

On a recent tour through the Signature Plaza building, Head pointed out employees’ offices, dodged construction equipment, showed off the unfinished vault and told a contractor what a good job he was doing.

Signature will initially have four offices with one each planned for Fayetteville, Bentonville, Springdale and Rogers. The Bentonville office will be in Fountain Plaza and is slated to open in the fall. Springdale’s location in Har-Ber Meadows will open in the spring. Rogers will follow soon after. There will eventually be an office in Siloam Springs as well, and that’s as far of an extension as the bank has planned.

The strategy is a stark contrast to some new and the new-to-the-market banks.

Both Bank of the Ozarks and Metropolitan National Bank plan on significant investments in infrastructure with at least 12 offices each. MNB said it will spend about $30 million in its market move.

Other new banks are initially opening only one or two offices in prominent locations.

Head said shareholders invested in a bank, and he didn’t think they wanted to be in the real estate business, so Signature is leasing space at all of its locations, though there are people “willing to build” to suit for the venture.

“We’re not going to be as convenient. We have to be convenient people,” he said.

Since the bank raised something like four times the capital it set out to raise and is looking at another offering, some wonder if Signature is already poised to acquire another bank with a base infrastructure.

Head said the bank will definitely consider it, but there’s no acquisition in the works and he would never participate in a hostile takeover bid.

Signature Culture

Signature’s temporary office sounds like a trading room with a constant buzz of activity. Employees clad in golf shirts and khakis take private meetings or cell calls outside, and there’s a charge of excitement in the air.

Marilyn Hendricks, chief operating officer, said the bank will be more laid-back than most of its competitors.

In fact, most of its capital was raised with the principals still wearing blue jeans, she said.

Dan Hendricks said the approach is to dress like the majority of customers who come into the bank and “level the playing field” so everyone feels comfortable.

Marilyn Hendricks followed Head from Arvest Bank-Fayetteville just days after he resigned in May of 2004. Her husband, Dan Hendricks, came out of a 14-year retirement from First State Bank of Springdale to work for the start-up.

Her decision to follow Head was easy, because the two complement each other so well, Marilyn Hendricks said.

She said the office opened on May 17, 2004, with four employees, and it had six more by May 20.

There are almost 50 full-timers working for the bank and holding company now, with eight more employees who are “hired,” but are either fulfilling other obligations or waiting for the move to permanent facilities.

The group has only had to recruit for a few positions, Dan Hendricks said.

“He’s the best business developer I’ve known,” Marilyn Hendricks said of Head.

Signature Board

“Gary’s pulled together a very experienced team up there,” said Arkansas State Banking Commissioner, Robert “Bunny” Adcock.

Adcock is a principal in Home Bancshares Inc. of Conway, a company that now owns a 20 percent stake in Signature Bank. But Adcock said his interest in Home Bancshares is tied up in a blind trust, so he can’t play favoritism to any one bank in the state.

He isn’t worried about the number of banks in Northwest Arkansas. Statewide there are fewer banks under regulatory scrutiny, and earnings are better than ever, he said. The more banks there are, the better it is for the consumer, Adcock said.

“Gary better get up early and stay late at night to be competitive,” he said.

The bank has assembled an ace board of directors that Head said is as good as any Fortune 500 board, and they’ve already met once.

On the building tour, Head pointed out the bank’s boardroom, noting that it will be dedicated in memory of William King Gladden, the late chairman and CEO of Harrison-based Community First Bank.

Gladden inspired Head to start Signature Bank, Head said. The two had been friends for years, and Head watched Gladden build Community First from scratch.

A portrait of Gladden sits on Head’s desk. He told the story of how Gladden said, “‘If anything happens to you, I’ll take care of your family, and if anything happens to me, you take care of mine.'”

That was the turning point in his decision to leave his longtime job at Arvest Bank-Fayetteville, Head said.

Gladden’s daughter, Crystal Wing, now works at Signature Bank.

Head supervised more than 300 people at Arvest, and he said it was becoming more difficult to look at people’s faces and remember their names. He likes the more intimate setting of Signature, he said.

He said occasionally people ask him why he doesn’t look at changing careers.

“I love this business,” he said. “That’s why I’m in it.”