First Security Building Statewide Presence

by George Waldon  on Monday, Oct. 14, 2002 12:00 am  

First Security Bancorp of Searcy and its chief executive officer and leading investor, Reynie Rutledge, are popular topics of conversation in Arkansas financial circles these days. The list of subjects includes:

• First Security developing a new office building in Little Rock: Maybe, but not right now.

• First Security entering the Little Rock banking market through acquisition: Not yet, though deals have been scrutinized.

• Rutledge moving from Searcy to Little Rock and bringing the banking headquarters with him: No, but he's often in town on business.

• Rutledge moving to northwest Arkansas, where the company has built a banking network from the ground up: No, but he does spend extra time there these days with business, and his oldest son works there while his two other sons attend his alma mater — the University of Arkansas at Fayetteville.

A catalyst for all the talk is First Security's decision to shed its historically low profile with a marketing campaign. It's no secret that Rutledge has aspirations of building a statewide financial services franchise.

The billboards and television spots merely serve up for public consumption what many already know — that First Security is a top tier player in Arkansas banking.

First Security broke the $1 billion mark for total deposits in 2000, and total assets this year are on track to double 1998's figure of $756 million. Topping $20 million in profits for 2002 is a definite possibility heading into the final quarter.

First Security is second only to Jim Walton's Arvest Bank Group of Bentonville among the largest privately held bank holding companies in Arkansas. It ranks as the fourth largest Arkansas-based bank holding company. The top three are Arvest and publicly traded Simmons First National Corp. of Pine Bluff and Superior Financial Corp. of Little Rock

Overall, First Security is the eighth largest bank holding company in Arkansas when factoring in out-of-state concerns such as Regions Financial Corp. of Birmingham, Ala., Bank of America Corp. in Charlotte, N.C., BancorpSouth Inc. of Tupelo, Miss., and U.S. Bancorp of Minneapolis.

Though absent from the banking market in Pulaski County, First Security does own the Little Rock investment banking firm of Crews & Associates Inc.

It also has a joint venture deal with The Vanadis Group, the Little Rock real estate firm that specializes in the redevelopment of historical properties.

These relationships have brought Rutledge to Little Rock more during the past couple years, helping fuel talk of First Security entering the banking market.

"It's something we have to continue considering," Rutledge said. "But we haven't done anything to get that going. There's a substantial quantity in competition and a substantial quality in the competition. Central Arkansas is intriguing."

He confirms that First Security has examined some would-be deals to buy its way into the market. Rutledge declines to name names, citing contractual prohibitions.

"We don't have anything in the works, but we're always looking for good opportunities," he said. "We like the option of buying, but sometimes that's not possible. So really, with the success we've had in northwest Arkansas, I wouldn't rule out starting a branch from scratch.

"Our rathers would be to acquire a bank in the market. A good bank with good management is the way we like to go, and let them keep on doing a good job."

As far as the Little Rock office building development goes, that would-be project is predicated on relocating Crews & Associates from leased space and perhaps First Security entering the banking market in some form or fashion.

"That's kind of an on-again, off-again situation," Rutledge said. "Right now, it's kind of off again. We thought we were going to do that. It might possibly get revived."

After two years of stagnant earnings, First Security is poised to set a new record for net income in 2002. As of Sept. 30, net income stood at nearly $15.5 million.

That nine-month total already has surpassed the net income total for all of 2000 ($15.1 million). The 2000-2001 profit "slump" coincided with First Security's entry into the northwest Arkansas banking market. Building a branch network isn't cheap.

First Security Bank of Northwest Arkansas, which is actually a branch of the Searcy flagship bank, now numbers six locations. Rogers and Fayetteville each have two branches with one each in Springdale and Bella Vista.

After nearly doubling between 1996 and 1999, net income dipped from more than $16.3 million in 1999 to $14.6 million in 2000. A year later, earnings increased slightly to more than $15.1 million.

Also coinciding with the profit dip is the May 2000 acquisition of Crews & Associates.

Rutledge isn't looking back on either investment as profits have bounced back to characteristic First Security levels.

"We want to continue growing and be considered one of the leading financial services ventures," he said. "We want to have more of a statewide presence and remain an Arkansas-owned concern."

First Security Highlights

2001: — Establishes partnership with The Vanadis Group real estate development firm in Little Rock.
2000: — Buys Crews & Associates Inc. securities firm in Little Rock.
1999: — Establishes First Security Bank of Northwest Arkansas. Buys the remainder of Peoples Bank & Trust of Mountain Home in a transaction valued at more than $16.4 million.
1997: — Buys First Community Bank of Conway for $13 million.
1995: — Buys Farmers Bank & Trust of Clarksville for $8.88 million cash.
1991: — Buys Citizens Bank of Beebe for $5.44 million. Changes name of bank holding company to First Security Bancorp.
1989: — Buys 24.1 percent of Peoples Bank & Trust of Mountain Home for $1.05 million.
1981: — Forms First of Searcy Inc. holding company.
1979: — Establishes First Security Mortgage.
1977: — Buys First Security Bank of Searcy.

First Security Bancorp, Searcy

All dollars in thousands

Year — Total Assets — Net Income
2002* — $1,447,177 — $15,480
2001 — $1,331,904 — $15,187
2000 — $1,209,788 — $14,633
1999 — $1,077,875 — $16,367
1998 — $756,156 — $12,107
1997 — $643,018 — $10,345
1996 — $479,928 — $8,457
1995 — $445,722 — $6,905
1994 — $308,753 — $6,189
1993 — $284,116 — $5,936
1992 — $272,434 — $5,641
*As of Sept. 30

Subsidiaries

First Security Bank, Searcy

Year — Total Assets — Net Income
2001 — $711,273 — $7,091
2000 — $636,898 — $7,527
1999 — $535,137 — $9,269

Peoples Bank & Trust, Mountain Home

Year — Total Assets — Net Income
2001 — $251,552 — $4,311
2000 — $240,665 — $4,044
1999 — $243,785 — $3,932

First Community Bank, Conway

Year — Total Assets — Net Income
2001 — $236,915 — $2,538
2000 — $205,790 — $2,050
1999 — $179,016 — $1,791

Farmers Bank & Trust, Clarksville

Year — Total Assets — Net Income
2001 — $132,194 — $1,247
2000 — $126,435 — $1,012
1999 — $119,937 — $1,375

Source: First Security Bancorp, Federal Insurance Deposit Corp.

 

 

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