In a time of big banking, the residents of some small towns in Arkansas are still doing business with their local bank.
Five Arkansas towns with fewer than 13,000 residents are home to two chartered banks. McGehee, a small town in southeast Arkansas, boasts McGehee Bank and First NaturalState Bank, whose main bank offices are within two blocks of each other.
Finding business in a town with a few more souls than 3,500 can be hard work, but both McGehee banks are thriving because of their hometown-bank status, their leaders said.
“Absolutely, we’re blessed to have two charters here,” said Jim Youngblood, president and CEO of McGehee Bank. “Both banks here care greatly about the people in this community. Now, both banks have been able to foster some business outside of McGehee as well, but both are really good about giving back to the community, and in turn, the community has been good to both banks.
“I don’t know of any other town in Arkansas that’s got less than 4,000 people with two bank charters.”
There is none. McGehee’s closest competitor is Monticello, 30 miles west of McGehee on Highway 278 and home to 8,175 people.
Other towns in Arkansas with two chartered banks and fewer than 13,000 residents: Forrest City, population 12,490; Batesville, population 11,575; and Magnolia, population 10,769.
Both Batesville-chartered banks have more than $1 billion in assets, but McGehee’s two banks are among the state’s smallest by assets. First NaturalState had $95.2 million in assets by the end of 2024 while McGehee Bank had $163.6 million.
How do such little fish compete in a little pond against the billion-dollar banks? The personal touch, the bankers said, that often dates back generations.
“People that bank at our respective institutions, luckily, are mostly loyal to the service we give them,” said Jim Daniels, First NaturalState Bank president and CEO. “The only other way we compete with them, it sounds simple, but we just try to outwork them.
“Us and McGehee Bank prove you don’t have to be a $10 billion bank in order to thrive. You just have to know who your customer base is and how to effectively reach those customers.”
‘A Dying Breed’
It used to be common for locally owned banks to flourish in small-town Arkansas, said Todd D. Smith, the president and COO of Commercial Bank & Trust, a $360.1 million-asset bank in Monticello. Then came the bank mergers and branch networking trend of the 1990s.
“It’s a rarity,” Smith said. “We used to have every town across the state used to be loaded up with locally owned banks chartered in their local community and serving the local clientele.”
Daniels said locally owned banks are “a dying breed” in small towns, but they offer many advantages that larger, remote banks cannot. Almost a decade ago, Daniels and the bank’s board of directors decided to be aggressive about growth with a goal of reaching $150 million in assets.
Arkansas Bank Charter Locations
City |
Number of Charters |
| Arkadelphia | 1 |
| Ash Flat | 1 |
| Augusta | 1 |
| Batesville | 2 |
| Bearden | 1 |
| Berryville | 1 |
| Blythville | 1 |
| Booneville | 1 |
| Bradley | 1 |
| Calico Rock | 1 |
| Cave City | 1 |
| Clarendon | 1 |
| Conway | 1 |
| Danville | 1 |
| De Queen | 1 |
| Delight | 1 |
| Dumas | 1 |
| El Dorado | 1 |
| England | 1 |
| Eureka Springs | 1 |
| Fayetteville | 3 |
| Fordyce | 1 |
| Forrest City | 2 |
| Fort Smith | 1 |
| Green Forest | 1 |
| Greenbrier | 1 |
| Greenwood | 1 |
| Helena | 1 |
| Horatio | 1 |
| Huntsville | 1 |
| Jacksonville | 1 |
| Lake Village | 1 |
| Little Rock | 5 |
| Lonoke | 1 |
| Magnolia | 2 |
| Malvern | 1 |
| McGehee | 2 |
| Mena | 1 |
| Monticello | 2 |
| Morrilton | 1 |
| Mountain View | 1 |
| Murfreesboro | 1 |
| Newport | 1 |
| Paragould | 1 |
| Pine Bluff | 1 |
| Pocahontas | 1 |
| Rison | 1 |
| Rogers | 1 |
| Russellville | 1 |
| Salem | 1 |
| Scranton | 1 |
| Searcy | 1 |
| Sheridan | 1 |
| Smackover | 1 |
| Sparkman | 1 |
| Springdale | 1 |
| Stamps | 1 |
| Star City | 1 |
| Stuttgart | 1 |
| Van Buren | 1 |
| Walton Ridge | 1 |
| Warren | 1 |
| West Memphis | 2 |
| White Hall | 1 |
| Wynne | 1 |
| Total | 78 |
(Source: Federal Deposit Insurance Corp.)
“We still think we’re competitive, even though I know we’re still probably one of the smallest 10 banks in the state; we still can be competitive,” Daniels said. “There’s very few smaller banks than us, so our growth has to be more organic than buying a bank.”
In 2016, to stress its local focus, the bank changed its name from First National Bank of McGehee while converting from a national to a state charter.
“I think it changed the perception of who we were, that we were a local, truly a locally owned, bank,” Daniels said.
Local Touch
A bank of any size will fail, of course, if it doesn’t provide advantages that make it attractive to customers.
The presidents of small-town small banks said local control helps them do business faster and better and often with people the big banks overlook.
Smith said Commercial Bank & Trust has expanded its footprint outside of Drew County, while the McGehee banks have done the same outside of Desha. The regions are still small and the focus and decisions are still local.
“When your banks are no longer headquartered here, the local control and local decisions often go to wherever the headquarters is,” Smith said. “Having local stockholders, local management, and money made here, staying here, that’s huge for us. I think the public understands with us that the money we make here is reinvested here.
“It’s local philanthropy, local support to groups and it’s local jobs. It’s local purchases of goods and services. We do just about everything we can locally and regionally too.”
Youngblood said McGehee Bank and other banks in the Delta obviously do a lot of agriculture-related business, and still do a lot of banking with former Delta residents.
“We are friendly competitors,” he said. “We compete on deposits. We compete on a little bit of loan business every now and then.
“When you’re in a small community like this, you’re basically just competing for the same business. You’re trading it back and forth on the same customers. But if that’s what we have to do, that’s what we have to do to make sure that the community is taken care of.”
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