Armor Bank Moves Back Into the Black

A change in ownership has led to an improved bottom line at the former Forrest City Bank, now named Armor Bank in a nod to the Waldrip family’s Armor Seed LLC.

His first year and a half as a bank owner couldn’t have gone better for Nathan Waldrip.

Waldrip, 31, and his family bought the Forrest City Bank in early 2017 from Forrest City Financial Corp. The bank was soon renamed Armor Bank, a nod to the family’s Armor Seed LLC of Jonesboro, which was bought by Land O’ Lakes last fall.

The bank was one of the state’s smallest at the time of the acquisition with just two branches and less than $50 million in assets, and it hadn’t posted a profitable year since 2008.

Under the Waldrips’ ownership — President Dwight Rutland remained with the bank — the bank has clawed its way back into the black. After posting net income of $442,000 last year, Armor earned another $112,000 in the first quarter — return on equity of 6.58 percent — on assets that had grown to $65.7 million.

Piece of cake, right?

“I’ve been with the bank a little over 18 months, and I learn something new every day,” Waldrip said. “There’s always a challenge when I get to work to work on. It’s exciting to me; I’m enjoying it. So far it is going as well as we could hope.”

Waldrip has a finance degree from the University of Arkansas at Fayetteville and has leaned heavily on mentors such as Rutland for a crash course in banking. He spent the first year at the bank using his business training to improve profitability through management and efficiencies.

Waldrip, who was director of financing for Armor Seeds, hired Chad May to be the bank’s CEO in April. May has 19 years of experience in the industry and came from Regions Bank in Little Rock, where he was a commercial banker for nine years. His whole life has been spent around the industry: May’s father, Tommy, was a longtime CEO of Simmons First National Corp. of Pine Bluff.

“It’s definitely different; I dealt with some financing programs [at Armor Seed], but banking is quite a bit different from that,” Nathan Waldrip said. “Dwight has been very generous in helping bring me along. I’m really blessed to have the teachers I have to learn from in the industry.

“It is a fairly humbling experience coming into banking. I’m just trying to learn everything that I can from the people I’m working with.”

‘A Change of Pace’
Mark Waldrip, Nathan’s father and a member of the University of Arkansas’ board of trustees, is the majority owner of the bank and its holding company, Big Creek Bancshares Inc. of Moro (Lee County). Mark, chairman of the bank’s seven-man board of directors, owns slightly more than 75 percent of the bank.

Nathan Waldrip and Stephen Edwards, CEO of GES Inc. of Marianna, parent company of the Edwards Food Giant chain of stores, each own 9.5 percent. The remaining shares are owned by Nathan’s sisters and their husbands, who include the state’s agriculture secretary, Wes Ward. Ward is married to Lauren Waldrip Ward.

“It is a little change of pace from what we were doing,” Nathan Waldrip said. “Dad taught me from a young age [that] there’s always opportunities around; you just have to be aware of them. This is just one of those opportunities. We saw the bank, although it was small, had — has — a lot of potential and had a solid base to work it.”

May said he researched the Waldrips and their plan for the bank before he agreed to become Armor’s CEO. He said he was impressed by the Waldrips’ long-term goals for the bank.

“First, I had to vet the ownership group and second was ‘What are their strategic objectives? What were they trying to accomplish?’” May said. “I grew up in the industry. I’ve seen — or at least paid attention to — merger and acquisition and bank activity and growth over the years. For me what was intriguing — and they validated this to me — is that this is a long-term play.

“By long-term, I mean in excess of 10 or 15 years. If it would have been short term in nature, it wouldn’t have been something I would have been willing to [do].”

May said the Waldrips have proved how vested they are in the bank by making a “meaningful capital injection” investment in early May to help the bank expand into central Arkansas. It was the latest of several investments made by the ownership group that took the equity capital from $4.5 million at the end of 2016 to $7 million as of March 31.

“It was a true cash investment in the bank to give us more horsepower, for lack of a better term, to expand our franchise into the central Arkansas market,” May said. “It takes a certain amount of capital to meet certain regulatory thresholds but also to allow us to bank on a larger scale from a legal lending limit perspective as we move into the Little Rock market.”

In April, Armor Bank opened a loan production office in Little Rock with a plan to convert it to a full-service branch by the first quarter of 2019.

“It is definitely not a come-in-and-quick-flip deal,” Waldrip said. “It’s something that we are interested in. I’ve enjoyed learning so far in the industry and working with the people at the bank and our customers. It’s something we want to grow into a strong entity.”

Slow and Steady
May and Waldrip said the Little Rock loan office was phase one of the bank’s strategic growth plan. The move has gone well, and May, Waldrip and new Chief Lending Officer Courtney Menefee are working out of the Little Rock location.

The fact that early returns have exceeded expectations does not mean the ownership or executives are going to deviate from the plan. Nathan Waldrip said the strategic plan has already been tweaked twice because of changing circumstances, and the bank is certain to investigate any unexpected expansion opportunity that arises.

“We’re going to stick to the game plan,” May said. “That sounds conservative and it is, but we’re going to be opportunistic in that. Because we’re small and we’re going to be on a fast growth clip from a percentage standpoint, we could take a misstep if we were to make quick decisions. There are multiple components of that game plan that if things were to come about, we’ll maybe speed up in one direction or another.”

May said the bank’s healthier balance sheet allows it to make commercial loans in central Arkansas, with the expectation of more profits that will allow the bank to grow according to plan.

“We have a strategic plan we have in place,” Waldrip said. “It looks a few years out in the future, and it’s hard to predict everything that will come about or the opportunities that will present themselves. Right now we are just now getting into the central Arkansas market and establishing ourselves there.

“We’ll definitely, especially as time progresses, be looking at the different opportunities around the state. We’ll see what makes sense and what’s best for the bank.”