VOL. 124 | NO. 120 | Monday, June 22, 2009
Fidelity Touts Conservative Values As Saving Grace
By Eric Smith
LOOKING GOOD: From left, William Carlson, Ralph Carlson, Mike Murphy and tellers at Fidelity National Bank in West Memphis enjoyed their most profitable year in bank history in 2008. The outlook is equally bright for the community bank in 2009. -- PHOTO BY ERIC SMITH
A few years ago, in the midst of sweeping bank consolidations that brought institutions such as Regions Bank and SunTrust Inc. to the area, the owners and directors of Fidelity National Bank in West Memphis let everyone know they wanted no part of a merger or acquisition.
They hung a banner outside their main office at 330 W. Broadway St. that read, “This bank is not for sale.”
That fiercely independent attitude has prevailed at Fidelity National for more than 40 years. As smaller banks are consumed by larger ones, as institutions change their names to tap into the latest branding fads and as the government offers bailouts to failing companies, Fidelity National has not only survived in these shaky financial times, it has thrived.
Staying true to its roots as a locally owned bank and even keeping the original name helped it stand firm amid the turbulence.
“We just always have been Fidelity,” said bank president Mike Murphy. “Just say ‘Fidelity’ and immediately people know who you’re talking about. We think that’s real important. We don’t want to change our name and make it appear that part of the bank was sold. We’re just going to keep the same name and do what we’ve been doing.”
Tried and true
Whatever Fidelity has been doing, it’s working. The bank in 2008 had its most profitable year in history, with the first few months of 2009 on pace to eclipse the previous year. Fidelity National has assets totaling $285.1 million and deposits of $250.1 million, according to the Federal Deposit Insurance Corp.’s most recent figures, dated March 31.
Murphy said the secret to the bank’s success is simple: It avoided subprime lending and the 120 percent home equity loans that came back to haunt other banks over the past couple of years.
“We just stuck to basic, conservative banking, took care of our customers in the process,” Murphy said. “Consequently, to this point, we’re having a better year than last year. We’ve got a good, loyal customer base and took care of those folks. We took care of them within the guidelines of traditional banking.”
The banking tradition at Fidelity National dates back to its founding in 1966, but today’s incarnation of the company is the result of a 1988 acquisition by the Carlson family. Back then, Fidelity had $38 million in assets, meaning the bank has seen a 650 percent increase since the Carlsons and Murphy took over.
The bank, whose holding company is Carlson Bancshares Inc., now has five branches. In addition to its main office/branch on West Broadway Street, Fidelity has a second branch in West Memphis, two locations in Marion and one in Hughes. Fidelity employs 65 people, with a fifth of the staff having been at the bank for 20 years or more and half of the staff having been at the bank for 10 years or more.
Bank owner William Carlson credited the success of Fidelity to the bank’s staff, particularly the senior directors, all of whom have been with the company since he took over 21 years ago.
“We’re real fortunate to have a tremendous team of management, employees, directors,” Carlson said. “They work together as a team, and it’s a good situation to work with that many good people.”
One for liquidity
Another good situation for Fidelity has been its ability to adapt to a changing market while holding onto its core beliefs of relationship-based community banking. Nowhere is that more evident, Murphy said, than in the bank’s ability to be nimble with lending decisions.
That approach is diametrically opposed to many larger banks, which can be a little slower about personal or commercial lending decisions. Instead of calling another city, Fidelity’s officers will meet in the conference room, discuss the situation and make a decision in an hour.
“Here, we can give people the quickest ‘yes’ or ‘no’ much better than they can,” Murphy said. “If a guy has a question, all he’s got to do is walk in here and ask me ‘yes’ or ‘no,’ and I’ll say ‘yes’ or ‘no’ or ‘we’ve got to talk to the board about it.’ Most times, the answer can come in one day.”
Murphy said Fidelity’s officers and directors discussed applying for TARP (Troubled Asset Relief Program) money, but they quickly decided against it because “we’re so liquid we didn’t need it,” he said.
Though the bank doesn’t have a large customer base across the river in Memphis, Fidelity’s financial health clearly mirrors the economy of the entire Mid-South.
“We don’t have the peaks and valleys that a lot of other areas of the state have,” Murphy said. “For example, in Northwest Arkansas, they’ve got such an inventory built up here that it’s going to be a couple of years before things get back to normal. And I think there are other areas like that. Fortunately, we’ve stayed pretty steady here.”
Murphy said expansion is possible, but “there’s nothing specific planned except continuing to take care of our customers and to get new customers.”
As for Carlson, who has no intention of selling the bank, the Fidelity he owns today in some ways resembles the company he bought 21 years ago. But in many ways, it doesn’t.
“It’s gone beyond our expectations,” he said. “We’ve had tremendous growth, we’ve been doing real good and we’re real proud of the organization that we have here.”