Family-owned Generations Bank begins next chapter in 112-year history

There are 20 banks doing business in Rogers. Among Arkansas cities, only Little Rock (30) and Fayetteville (27) have more.

But just one of those lenders calls Rogers home.

Just a few weeks ago, after nearly 112 years, one of the oldest family-owned banks in Arkansas officially relocated its Harrell Bancshares Inc. charter from the tiny south Arkansas town of Hampton, some 300 miles away.

Generations Bank, the sole subsidiary of the financial holding company, began the next chapter in its long history on March 1, the first day its charter resided in Northwest Arkansas.

Despite the change, the bank is hardly a stranger to the area. The company entered the regional banking market in 2010 when it acquired two branches in Rogers and Siloam Springs from Fayetteville-based Signature Bank of Arkansas. That same year, the company changed its long-standing name from Calhoun County Bank to First Bank. The bank rebranded as Generations Bank in 2016, a reflection of its long history under the leadership of the Harrell family.

Riding the wave of the region’s booming economy and population growth, the bank’s assets have grown 110% to $521.3 million since establishing a Northwest Arkansas division. Deposits have increased by 88% to $419.5 million in the same eight years. Net loans and leases held by the bank totaled $410.1 million as of Dec. 31. That’s up 157% since the end of 2010.

The company now has nine brick-and-mortar locations in Arkansas, including four in Northwest Arkansas and the Fort Smith metro. The bank expanded two years ago when it opened a full-service branch on Van Asche Drive in Fayetteville. That office replaced the bank’s previous Fayetteville location in leased space at the corner of Zion Road and Vantage Drive. It opened as a loan production office (LPO) in January 2014.

Chairman Jon Harrell, the fifth generation of Harrell family bankers to lead the company since its founding in October 1907, said the bank’s financial progression has been somewhat surprising.

“We’re two years ahead of schedule,” he said during a recent interview at the bank’s Rogers headquarters just off Pleasant Grove Road. “I projected we’d be $500 million [in assets] by the end of 2020. I did not foresee the growth in the Fayetteville market taking off the way it did. That would be the big piece that got us over that quickly. We got the right people at the right time.”

A FAMILY BUSINESS
Harrell, 52, took a familiar path to become an Arkansas community banker — earn a banking and finance degree from the University of Arkansas, followed by a stint in Little Rock working as an examiner for the state bank department.

While recalling that time in his life, Harrell said he did not envision his career leading back to south Arkansas. But in 1993, Calhoun County Bank and nearby First Bank of South of Arkansas in Camden became sister banks under the newly formed holding company, Harrell Bancshares.

Harrell’s family persuaded him to join the family business as head of the bank in Camden, the same city where he graduated high school. He remained there until 2005 when he returned to Northwest Arkansas as Rogers market president for Signature Bank of Arkansas, a startup company established that year by a group of area bankers, led by Gary Head.

“It was the toughest decision I ever made, and the hardest conversation I ever had was telling my father [Searcy Harrell Jr.] that I was going to leave our family-owned bank and move up here,” Harrell recalled. “My wife Sheila and I wanted to move to Northwest Arkansas to raise our family. And, quite frankly, I was very excited about the prospects of Signature Bank. And I’m still a big fan of Signature Bank. I tell Gary all the time they’re my second favorite bank in Northwest Arkansas.”

When Signature Bank sold its two branches in Rogers and Siloam Springs to Generations Bank in 2010, Harrell immediately rejoined the family business, this time as Northwest Arkansas market president.

Recalling the bank’s success in the market, however, has a bit of a sting for Harrell. On Nov. 1, 2013, Searcy Harrell Jr. — Harrell Bancshares’ board chairman for 20 years and a prominent civic leader in Camden — died when the twin-engine Beechcraft King Air he was piloting crashed near Springdale. He was 72.

Harrell Jr. was traveling to Northwest Arkansas to watch his grandson, Max Harrell, play in a football game for the Rogers Mounties.

Following his father’s sudden death, Jon Harrell assumed the role of board chairman. He said developing the family-owned bank in Northwest Arkansas “happened differently than I projected,” but the bank is in a strong position for continued expansion.

“If we can grow 7% to 8% a year, we’ll be over $820 million [in assets] by 2024,” he said. “And that would be organic growth. We’d always look for opportunities to grow banks if it were a fit. But to be honest, the market is pretty tough for that right now. All the banks are doing well. There’s got to be a downturn at some point. We all hope it’s nothing like what we lived through several years ago, but I do think opportunities will arise for some more consolidation and bringing in some banks that would fit our niche.”

BENTONVILLE EXPANSION
Generations Bank’s next target for growth is a logical one — Bentonville.

Harrell said he anticipates construction to start July 1 on a new branch on Southwest I Street in Bentonville, near the entrance to the Bentonville Community Center. The bank completed a $657,500 land purchase last summer for the 2.13-acre site, which equals $7.86 per square foot.

The bank will occupy roughly a third of an approximately 12,000-square-foot building. The remainder will be available for lease.

The Generations Bank site is in a rapidly developing part of the city. It sits between a $25 million luxury apartment community recently opened by developers from Missouri and a $7.7 million primary care clinic owned by Mercy Northwest Arkansas. It opened its doors in March 2018.

Harrell said since the bank bought the property, he’s turned down one offer to sell it — to another bank.

“We are excited about the property and the location,” he said. “Geographically, it’s just about in the center of Bentonville. And the development will continue in that part of the city. We’re going to put the right people there and do it the right way.”

According to the FDIC, Generations Bank will be the 18th lender to operate a full-service branch in Bentonville.

THE NEXT GENERATION
Harrell is quick to share the credit for the bank’s success in Northwest Arkansas, where about 50 of the company’s 120 employees work.

Joe Ruddell was hired as market president in Washington County in 2014 when the bank opened its LPO. He was promoted to regional president in 2016.

“When we hired Joe in Fayetteville, that market went gangbusters,” Harrell said. “He ended up being a rainmaker we didn’t think we had.”

Also in 2016, Bryn Bagwell was hired as the bank’s market president in Fayetteville.

Harrell also said the bank has made a concerted effort to hire young professionals for key positions as part of its overall growth strategy. Charlotte Banister, 25, was hired as the company’s marketing director in December.

Another example is Max Harrell, 23, who was hired as a commercial lender last summer after earning a finance degree from the UA.

“I’ll brag on him. He is an exceptional young man,” Jon Harrell said of his son. “He did very well in school and could have followed several different career paths, but he chose to go into banking.”

Max Harrell said it wasn’t inevitable he would go to work for Generations Bank after college, but adding to the family lineage did carry a certain appeal. Even at a young age, following in the steps of his father and grandfather is already one of the proudest achievements of his professional career.

“[My grandfather] is a large reason why I have such pride in working for this bank,” he said. “We had a pretty tight bond and spent a lot of time together.”

Jon Harrell said his son is very personable — an effective trait of any good community banker — and he is on the path to leadership at Generations Bank, “once he gets his legs under him and understands the business and gets the respect of the staff.”

“Earning that right is something he can be proud of,” Harrell said. “It’s a great business to be able to hand off to talented young people, to continue to develop and grow. I love our brand. We’ve got some really cool things in place to continue to grow and expand.”