FNB Paragould seeks diversification with Northwest Arkansas investment

The bank concentration in Benton and Washington counties is one of the highest in the nation, with 180 branches operated by 31 different banks in the growing region of 500,000 residents. Contrast that with 35 banks running 180 branches in the Little Rock metro area with a population of around 902,000.

Thick concentration and hyper competition in the local financial sector has not deterred bankers like Donald Guinn, president of First National Bank Paragould, from making an estimated $15 million investment in the region.

Guinn and his team on the ground in Northwest Arkansas have already opened two of the five branches purchased last year from Simmons First for an estimated $12 million — Rogers and Bentonville. Simmons had acquired in a bankruptcy sale the assets of Metropolitan National Bank. The next branch opening will in Fayetteville and is slated by June 1. Guinn told The City Wire he has hired four lenders, two loan assistants, four customer service reps and five tellers for the two branches that are now open. He said the Springdale and Johnson locations would open later in 2015.

“When we get the five locations open by the year end, we will likely have a team of about 30 or so initially, adding more as the bank grows over time,” Guinn said.

For now the veteran banker is commuting to and from Rogers each week from his home in Paragould. He said the family plans to relocate to Northwest Arkansas in the next three months or so after his daughter graduates from Greene County Tech High School in Paragould. Guinn said he works in the two NWA branches Monday through Thursday and then goes home on Friday to be with his family, a routine he’s carried out for the past seven months since the bank first launched it’s NWA expansion.

When asked why the conservative hometown bank of Paragould would venture out across the state, Guinn said First National Bank Paragould was ready for expansion with a strong balance sheet, flush with capital and one of the highest performance ratings in the country for banks of its size — $800 million in assets.

“Northwest Arkansas is the third fastest growing metro area in the nation, it’s no secret why we would want to be here. Opportunity came knocking last year with Simmons First and this gave us a chance to get five branches across the region, equipped and strategically placed in the right areas. It’s a good solid start for us,” Guinn said.

With just a few months under his belt in this competitive region, Guinn said he’s happy with the transition. He said the conservative bank will grow its business organically, not specializing in any one type of niche lending market.

“I’d just as soon talk to a customer about a car loan or small business loan as I would about a larger construction project. We make loans of all kinds — large and small — and because of our size we can do some bigger loans  — up to $21 million,” he said.

While the bank does a fair amount of agriculture loans in its home base of northeast Arkansas, he expects there will be more consumer and business loans made on this side of the state.

First National Bank Paragould grew its loan to $648.5 million as of Dec. 31, 2014, up 18% from 2013. Over the past three years when many of the banks in Northwest Arkansas were shoring up balance sheets and shedding assets to tweak capital requirements, FNB Paragould grew its loans by 26%, according to filings with the Federal Deposit Insurance Corp.

Guinn expects that growth will continue with the NWA expansion over the next few years. He said the bank has the infrastructure in place to support additional growth without compromising asset quality and capital reserves.

SNL Financial recently released its top 100 performance list for community banks with between $500 million and $5 billion in assets. FNB Paragould was one of only two banks in the state to make this list. Six key metrics including capital, loan growth and charge-offs, were considered for the list. FNB Bank ranked No. 79 out of the top 100 peer banks, and Magnolia Bank in southern Arkansas was only other Arkansas bank to crack the top 100. FNB Paragould has garnered a 5-star rating from Bauer Financial for 25 consecutive years, which puts it in an elite group of just 5% of all banks in the country, according to Bauer Financial. Of the31  banks doing business in Northwest Arkansas, eight also carry a 5-star Bauer rating as Dec. 31, 2014.