Arlo Bank opens its new Springfield banking center

Last edited 3:27 p.m., Dec. 22. [Editor's note: Arlo Bank growth and profit projections, as well as OakStar Bank's growth, have been corrected.] 

Arlo Bank’s newly opened 8,500-square-foot building at 4109 S. National Ave., just south of U.S. Route 60, doesn’t look like a former Mexican restaurant, but that’s what it is.

The former Los Cabos Mexican Grill & Cantina, once sporting tropical pink and blue exterior accent colors, closed in late 2022. Now clad in natural stonework and wood trim, Arlo Bank aims for a vibe that’s almost as comfortable.

In an interview on-site this morning, President and CEO Mark Bybee gestured to the walls of his office. “This was a dining room,” he said.

He said he is satisfied with the renovation. The facility, which has 20 employees, was finished in August and opened to customers Nov. 24.

“It just feels open and nice. You’ve got music coming in, a scent when you come in,” he said.

An added touch: A sand table in the lobby offers a chance to give a personal welcome to a customer by writing their name on the surface.

This is now the sole location for Arlo Bank, which formed through the Oct. 1, 2024, acquisition of the century-old Systematic Savings Bank for $14 million following a $40 million capital raise. Bybee confirmed that the downtown location at 318 South Ave. is open solely by customer appointment and would close by March 1, 2026.

Bybee said Arlo Bank officials knew the location was great, and so they approached architectural and design firm Buxton Kubik Dodd Design Collective, which performed the renovation.

“They said they could absolutely work with the building,” he said.

He declined to disclose the cost of the building purchase or the cost of the renovation and infill.

The front wall of Bybee’s office is all glass, while the back wall has a large window letting in natural light. The side walls are painted a deep gray color, identified by Director of Client Services Jessie Tindall as ironwood.

The CEO’s office reflects the design principles at work throughout the building: a high-ceilinged, open-concept layout that nevertheless offers spaces for client privacy.

According to Bybee, Arlo Bank has an eye solidly fixed on expansion – of its customer base and holdings, and maybe in the future its building as well.

He said the bank has raised enough capital to handle its growth projections for its first four to five years, adding, "We’re looking to grow just as much as we can safely."

According to Bybee, Springfield needs local banking options. More and more local banks are being bought out by big banks, which don’t know the Queen City as well as people who are from here, he said.

Bybee said not starting from the ground up but through an acquisition gave Arlo an advantage.

“It really was either do that or start from zero. We paid a relatively small fee to purchase Systematic and kind of start with a baseline. We’re going to make money this first year, which is pretty amazing for a small bank.”

Profit projections for this year are about $500,000, Bybee estimated, adding that the normal expectation would be for a small bank to lose money for its first two or three years.

As for customers, while he isn’t sure of the exact number, he figures some 80%-85% of Systematic customers switched over to Arlo. Downtown is a very specific location, he said, and not every customer was willing to move to a different banking location.

Bybee said the team has grown the bank from $60 million in assets at the time of acquisition to almost $200 million as of this morning.

“It’s just the kind of relationships and customers we have,” he said.

And the team has experience with promoting growth, he added. He himself came from OakStar Bank, and during his 15 years there – the last two as president – that institution grew from $80 million when he started to $2.4 billion when he left.

“It’s just taking care of customers,” he said. “You’ve just got to do the right thing over and over again, and if you make a mistake, you own it and move on.”

Bybee said Arlo had made a significant investment – he declined to disclose specific figures – in new banking solutions with Arkansas-based Smiley Technologies Inc., finalizing last month.

“It was a large investment, but it was the smart thing to do,” he said.

Arlo officials do not plan to build branches. Maddie Walker, chief operating officer, said more customers are bypassing in-person banking for online transactions.

Bybee added that Arlo is not investing in a series of ATMs, instead choosing to reimburse customers the fees they are charged if they use those owned by other banks.

An open house was held for about 150 shareholders and guests last week.

“It was fun to show off the space,” said Walker.

Bybee said growth is the goal for Arlo Bank. From his office computer, he showed a rendering of a possible multistory expansion – Phase 2 of the physical growth plan, though there is no set date for it, he said. He verified that the bank could grow as much as another 30,000 square feet on its present site.

“As we grow and make money, put ourselves on a nice sound footing, we’ll look into that,” he said.