Whipple and Company Begin New Adventures in Banking

Two years after selling his Arkadelphia-based Horizon Bancorp Inc. to Mercantile Bancorporation Inc. for more than twice its book value, Ross Whipple is rapidly rebuilding a community bank system.

Whipple's new Summit Bancorp, also based in Arkadelphia, already boasts $128 million in assets, surpassing the bank chairman's optimistic predictions. Whipple previously said he expected Summit to rake in $100 million in assets by June, with an eye on banking $150 million by the end of 2000.

"We're tracking budget pretty closely right now," Whipple said last week from his Arkadelphia office. "I would say at $130 million now we ought to make [$150 million by the end of the year] pretty easily."

Whipple himself said he anted up more than half the money to start the bank. And Summit is also rounding up shareholders to kick in an additional $16.1 million for the new system. As of last week, Summit had 17 shareholders. But Whipple said he's not looking for investors.

"If we wanted to sell this thing out, we could sell it out pretty quickly," Whipple said. "But I'm looking for partners. I'm looking for people who want to be a part of Summit Bank and be a supporter of Summit Bank."

Whipple formed Summit on the foundation of Horizon, which St. Louis-based Mercantile bought in a $120 million stock swap in February 1998. Mercantile received Horizon's $551 million in assets and operations in Arkadelphia, Sheridan, Malvern and Hot Springs. Whipple and his family made about $63 million.

Mercantile has since been acquired by Wisconsin-based Firstar Bank, which continues to operate the former Horizon branches.

Whipple said he hadn't been looking to sell Horizon, but Mercantile's offer was something he knew he should take to the shareholders.

"I think once you've got something like that, you've got to take it to your board; you've got to take it to your shareholders," he said. "And it was something that, really, we thought we should do."

But Whipple didn't sell all Horizon properties. He retained the bank's Magnolia operation, Horizon Bank of Columbia County. State law prevented Whipple from selling the bank, chartered in 1996, because it was less than five years old.

On Feb. 14, after a non-compete clause with Mercantile expired, Whipple moved the bank to Arkadelphia and renamed it Summit. It was the first bank of the new system, which then had about $75 million in total assets.

The other branches quickly followed — Summit's Hot Springs and Malvern branches opened on the same day, March 13 — as Whipple and other executives from Horizon re-entered familiar markets.

"Those are markets that we're familiar with, which is always good. You know the good and the bad," he said. "And we went back with pretty much the same folks that we had before, you know, who wanted to leave the big bank atmosphere and get back with a community bank.

"So it looks a lot like the old Horizon footprint."

Many of the Horizon's gang has returned to Whipple's fold. Allan Kimball, president, oversees the Hot Springs bank at 401 Section Line Road. John Sanders and Steve Moore serve as senior vice presidents for lending. Tom French works as senior vice president for marketing.

At Summit's Malvern office at 608 E. Page Ave., Don Tackett serves as president. Dale Jenkins and Marcy Tanner are senior vice presidents for lending. Mary Beth Roseberry is senior vice president for loan operations and customer service. In all, 12 former Horizon/Mercantile/Firstar employees work at Summit's Malvern branch office, Tackett said.

Tom Calhoun, who used to oversee Horizon's Arkadelphia office, now owns a title company there but also serves on Summit's board of directors, Whipple said.

Whipple said Summit is considering entering other markets, but he first wants the company to finish building its infrastructure, which includes an Internet banking channel and additional branches in Summit's present markets.

"... [T]hen we'll take a look and see where else we think we need to be," he said. "It's kind of early right now. We did an awful lot awfully quick, to be honest with you. And we need to digest that somewhat first. But we will be hoping to build out these markets pretty quickly."

Whipple denies that he planned to rebuild a community bank system after closing the lucrative deal with Mercantile.

"But it just kept coming up with folks that I know. They just kept saying, 'Ross, you know, we need a go-to person. We don't have that anywhere anymore,'" he said. "Well, I knew I had a lot of folks that used to work for us who were really go-to people, who could solve your problem."

That desire for a community bank is driving Summit's growth, Whipple said. He admits that the idea of people wanting a community bank rather than a corporate giant might be cliché. But he rejects the idea that the community bank will die at the hands of larger, nationwide powerhouses.

"All banks must manage all kinds of infrastructure," Whipple said. "They must meet the needs for both high-tech users and those who want more personal service.

"What I think you'll have ... is a few great big banks ... and a lot of niche banks — a lot of Summit banks — a lot of community based banks."

Whipple believes the "mid-level" banks, which he defined as banks with assets of $10 billion to $50 billion, that are at the most risk, "simply because, 'Am I big enough to play with the big guys?' And they're too big to be a community bank."

"Now I don't know that I'm right, but I will tell you that five years ago I thought the big banks were going to take it over," he continued. "But ... it hasn't happened."