How have rising interest rates impacted banking in the Conway market?

Rising interest rates have certainly slowed down development and loan growth in Conway and across the state. We are seeing fewer housing starts in 2024 than in previous years and investment real estate projects have taken a pause in many cases to digest the higher cost of borrowed funds, building costs, and increasing insurance rates.

For depositors, we are happy to finally see some higher rates over 5% which makes retirement and the benefits of saving money much better. We’ve had a long period of low savings rates which does not help these customers.

What are the most common lending needs for First Security Bank customers

We see many lending requests but the most common are usually connected to real estate. Residential developments, new residential construction, mortgage loans, and home equity lines of credit. We also can help customers with new and existing business financing needs including Small Business Administration lending and lines of credit for expansion.

Last year, First Security Bank’s Conway market crossed $1 billion in assets. How has that growth been accomplished over the last 5-10 years?

First Security is blessed with a great team of experienced Conway bankers who see making Banking Better for our customers as a passion. We are proud to be a bank large enough to help with a company like Westrock Coffee and small enough to still answer the phone locally every time you call us here in Conway. We pride ourselves in putting the customer first in each transaction and doing the right thing to help our customers and community to be Better!

What trends are you seeing in the Conway housing market? What should buyers and sellers expect for the rest of 2024?

The Conway area has a great housing market with beautiful neighborhoods, downtown, and proximity to transportation and available jobs. Also, housing in Conway is relatively affordable compared to other areas of the nation and a great investment because we are growing, and the demand is high.

Trends I see, unfortunately, have been for the lower numbers of available homes on the market. Especially those under $300,000, or affordable homes for many families. I expect this shortage will continue for the rest of 2024 as higher rates have kept many families from moving up and housing starts still being low for construction. I do expect that mortgage rates may ease some in late 2024, however, I would not recommend waiting on that 3% mortgage. I am not sure those days are coming back. The sooner you can buy a home, the more equity you will be building for your future.

What are interesting banking trends, advancements, or changes you see coming in the next 3-5 years?

The exponential pace of new technologies is influencing how banks can operate and serve the customer. So many changes have brought banking forward as partners with FinTech companies delivering amazing services at the customers’ fingertips.

The impact of AI on this industry is yet to be fully seen. It will be amazing where all of this will lead. I expect banking to become even more digital, convenient, and controlled by your phone as younger generations age and embrace these technologies and become our primary customer base. Hopefully, many will still see the benefits of community style banking that we also provide face-to-face help across many products that can impact their daily lives.

Banks are generally on a sound financial footing, but the revenue models are being tested. Negative impacts on the commercial real estate sector from less office space demand have not fully been felt. Banking regulations are heavy and continue to strain the industry’s ability to innovate. Changes in these two areas will no doubt affect the next 3 to 5 years as well.