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Jefferson Bancshares, the Pine Bluff bank holding company that owns Pine Bluff National Bank, plans to invest $5.1 million in a new “community bank” to be chartered in Hot Springs, CEO John Garrison said.

“It would really be driven by Hot Springs businesspeople but would be supported by Jefferson Bancshares,” Garrison said.

Jefferson will seek to raise an additional $4.9 million in startup capital for a bank to be called Hot Springs Bank & Trust, he said. Stock subscription should start by late October, and the ambitious goal date for opening the bank is Nov. 7, thanks to a tentative deal, brokered by DD&F Consulting Group of Little Rock, to purchase a leftover charter from First Security Bancorp of Searcy.

First Security has asked state and federal regulators for permission to collapse First Security Bank of Clarksville into the Searcy-based charter of First Security Bank. The Clarksville bank’s president, Cole Martin, said the charter collapse would benefit First Security Bank’s balance sheet but would otherwise be transparent. “You won’t notice anything different in our operation,” Martin said.

The president and CEO of Hot Springs Bank & Trust will be Terry Kent, a 20-year veteran of Arkansas Bank & Trust in Hot Springs and its successor, Regions Bank. Kent left Regions to join Jefferson Bancshares on June 1, Garrison said. “We hired him specifically for the effort in Hot Springs,” he said.
Garrison and Kent are joined on the organizing board by Dan Hamby, owner of Sigma Supply of Hot Springs; Mike Ellis, a real estate and insurance agent; and Richard Metcalf, executive vice president of Pine Bluff National Bank.

The Hot Springs bank is the first venture outside Jefferson County for Jefferson Bancshares. In addition to Pine Bluff National Bank, Jefferson owns a title company and an insurance agency in Pine Bluff. No other expansions are currently being considered, Garrison said.

Hot Springs Charters

Why didn’t Pine Bluff National Bank simply choose to branch into Hot Springs?

“Well, we could,” Garrison said, “but we feel like Hot Springs wants a community bank.”

That was news to Daniel C. Horton, president and CEO of First National Bank of Hot Springs.

“I don’t know what the definition of a community bank is, but I know of two banks that have Hot Springs charters,” Horton said. “But he’s got to do what he needs to do.”

First National Bank was chartered in 1977. Its holding company also was headquartered in Hot Springs until April, when First Community Banking Corp. and its three subsidiary banks were acquired by First National Security Co. of De Queen.

The separately chartered First National Banks of Mena and Mount Ida were collapsed into the Hot Springs charter and joined four other charters in the First National Security family: First National Bank of De Queen, First National Bank of Waldron, First National Bank of Ashdown and First State Bank of Idabel, Okla. (First National Security also owns more than 25 percent of First National Bancshares of Hempstead County, parent of First National Bank of Hope, First National Bank of Lewisville and the Bank of Blevins.)

The other Hot Springs charter is that of Simmons First Bank of Hot Springs, owned by Simmons First National Corp. of Pine Bluff. The Simmons charter is the newest in the Spa City, having started as Alliance Bank with $4.1 million in capital in the busy charter year of 1997. Alliance was sold to Simmons for $25.7 million in March 2004 and renamed a month later.

David Bartlett, a founder of Alliance Bank who continues as president and CEO of Simmons in Hot Springs, extended words of welcome to Garrison and Jefferson Bancshares. “We’re certainly pleased that they are planning to invest in Hot Springs,” he said. “We know that Pine Bluff National Bank has been a good corporate citizen in Pine Bluff and we fully expect that they will be in Hot Springs.”

Crowded Market

Horton said last week that he had heard of the impending arrival of a yet another new competitor.
“Bankers, if they can’t grow in their own market, they go to someone else’s market,” he said.
Hot Springs is a nice city and a nice place to do business, Horton said, but it is already crowded with banks. In Hot Springs and Hot Springs Village, 11 banks currently operate 51 branches — and Jefferson Bancshares’ plans mean that at least four more are in the works.

Ross Whipple’s Summit Bank of Arkadelphia has received regulatory permission for a new branch — its sixth in Garland County — at 3650 N. Highway 7 in Hot Springs Village. President Marc McCain said that branch is scheduled to open in December.

Elk Horn Bank & Trust of Arkadelphia in May received permission from the Arkansas State Bank Department to convert its loan production office at 3832-A Central Ave. to a full-service branch. That storefront branch will be moved to the corner of Central and Files Road, where Elk Horn is planning a 5,700-SF building to open in the first quarter of 2006, President Bill Wright said.

And Elk Horn isn’t finished in Hot Springs, although Wright wouldn’t reveal specific plans.

“Everyone agrees you have to have multiple branches to do retail banking over there,” he said.

Bank of the Ozarks of Little Rock, which had previously ventured as near as the back gate of Hot Springs Village in Saline County, has started site work on its first Hot Springs branch, which is scheduled to open on Central Avenue before the end of 2005. And last week BOZ submitted an application for a second Hot Springs branch at 1410 Albert Pike. That one should open in late 2006, according to Susan Blair, executive vice president.

“We don’t have any other property purchased. We do have an interest in a third Hot Springs office if and when we can acquire a suitable site,” Blair said.

Horton was philosophical about the influx of new banks.

“I don’t know of a banking market in Arkansas that’s not saturated with banks,” he said. “I don’t know if there’s room here or not. Time will tell, though.”

Wright said Hot Springs is just catching up with other markets, including Elk Horn’s home of Clark County and Hot Spring County, where it operates two branches.

Clark County has 14 bank offices and about $360 million in deposits, and Hot Spring County has about $385 million in deposits among its 14 branches. Meanwhile, Garland County’s 52 branches, all but two in Hot Springs and Hot Springs Village, are dividing up $1.3 billion in deposits

“So who’s overbanked, me or them?” Wright asked.