BRANSON, Mo. -- Over pancakes and syrup at the Bob Evans restaurant here, banker Smith W. Brookhart 3d can barely contain his excitement.

"We are making a bunch of millionaires in Branson," said Mr. Brookhart, as a country music singer belted out a song in the background. "We are seeing a lot more Lexuses in the driveways then we used to. it used to be all pickups and jeeps."

Ever since Branson was dubbed the nation's new country music capital two years ago, it has become boomtown USA.

And Mr. Brookhart, President and chief executive of Ozark Mountain Bank, is right in the thick of it, helping to finance the burgeoning supply of theaters, motels, and restaurants.

Surging Assets

Ozark Mountain, the largest bank in this city Of 3,700, saw its assets surge to $162 million the first half of the year, up 40% from a year ago. The bank expects to grow by another 40% this year. And by 1997, it projects assets to nearly triple from their present size.

Profits have clipped along, too, despite expenditures for more staff and a new main office. For the first six months of the year, Ozark Mountain earned $ 1.1 million, up 17% from a year ago. The bank posted a return on average assets of 1.49%, and a return on average equity of 24.60%.

Not surprisingly, other banks are expanding their operations in Branson. Boatmen's Bank of Southern Missouri opened a branch in Branson last summer, and Commerce Bank, Springfield, opened a branch two months ago.

Meantime, Great Southern Savings Bank, a $510-million asset bank in Springfield, has seen assets at two branches jump to $ 100 million, up about 50% in the past two years.

But boomtowns can bust, and there is concern that the area is becoming overbuilt. New hotels, condominiums, and apartments are springing up all around the main two-lane drag known as Country Boulevard 76, which at night is lit up like Las Vegas, without the casinos.

For now, though, it's full steam ahead.

What's driving Branson's boom?

Country music stars like Mickey Gilley, Mel Tillis, and Roy Clark have grown tired of the road and have opened their own theaters in Branson. The response: fans from across the nation have poured into the city by the millions.

In 1992, the number of visitors swelled to 5 million, up from 3.1 million in 1986. Branson's chamber of commerce expects the number to increase by another 500,000 this year.

The town is so popular the American Automobile Association ranks Branson as its No. 2 driving destination behind Walt Disney World in Florida. This month, Branson Airlines been offering flights to music city from several cities, including St. Louis and Kansas City.

Thirty-two theaters have been built with 42,729 seats, two more are on the drawing board, and there are rumors of more to come. The number of lodging rooms reached 14,004 in the first four months of 1993, up 26% from 1992. Another 1,800 rooms are under construction.

Fear of a Shakeout

"I'm worried about some kind of shakeout," said Vern Lewis, senior vice president of Capital Bank's Branson offices. "Branson is a for-real situation, but it is just going to have it growth cycles."

The banks are feeding off a huge demand for commercial construction. The total value of construction projects for 1991 and 1992 combined hit $134 million in 1991, up from $18 million in 1989-1990.

Ozark Mountain Bank has been an aggressive player in the market. Its loan portfolio shot up by 50% in the first six months of the year to $126.7 million compared to a year ago.

It has $73.8 million in motel, resort, restaurant, and theater loans on its books, which make up 58% of total loans.

About $10 million is in the theater after loans to five groups that include Boxcar Willie Theater, with 901 seats, the 1,700-seat Baldknobbers, Moe Bandy's Americana Theater, 950 seats, Bobby Vinton's Blue Velvet Theater, with 2,000 seats, and Mickey Gilley's Family Theater, 970 seats.

This month, the bank signed a deal with the Welk Group Inc. to finance a 2,300-seat theater, a 160-room hotel, and a restaurant. The bank, which is owned by the $2.7-billion-asset Central Bancompany, Jefferson City, Mo., will lend more than $10 million to the $14-million-plus project, which is slated to open next May.

The Welk Group will feature music made famous by the late band leader Lawrence Welk.

"We have cherry-picked the loans," said the 58-year-old Mr. Brookhart, who has been a banker in Branson for 26 years. "We've got people who are strong enough to play in the market and to withstand a decrease in ticket sales. I can guarantee the five are going to survive the shakeout very well."

So far, so good. Ozark Mountain's nonperformers stood at zero for the first half of the year.

Boxcar

One customer is country music star Boxcar Willie. He and Mr. Brookhart shoot the breeze as fans mill about the singer's museum and gift shop. The visitors pull Boxcar Willie T-shirts off hangers, eye train conductor caps, and finger mugs. The cash register hums.

"We've got a gold rush going on in here," says the potbellied singer to his banker.

Boxcar Willie, who off stage goes by Lecil T. Martin, started banking with Ozark Mountain in 1986 when he bought a failed theater taken over by the bank. Since then he's opened a museum and gift shop and is building a motel.

"I've had one other bank come in and try to get our business," Boxcar Willie said. "I've just always been satisfied with this bank. I've borrowed a lot of money from them. I walk in and they say, "Hi Box," and that means a lot to me."

Thus far, the only problem the bank has run into is controlling its growth. Fifteen months ago, it built a two-story main office, hired 21 employees, and acquired new equipment. The bank has since grown out of the space.

Checking the Balance Sheets

Ozark Mountain has turned away country music stars who have weak balance sheets or demand 150% financing on a loan, Mr. Brookhart said. The bank typically lends up to 70% of the loan on a theater if the borrower has a net worth of 50% of the loan, and has historically done well at the box office.

"They (some stars) have a very exaggerated opinion," Mr. Brookhart said. "Some people will ... overstate assets. The minute you say you want a copy of their personal tax returns they get green around the gills. The thing we are primarily after is their character. I still want to look people in the eye and see how they talk and act."

What may give Branson's building boom another kick is the housing market. Mr. Brookhart projects 1,500 new homes will be built in 1994 and 2,000 in 1995. The bank is aiming for 20% of the business.

But bankers, investors, and local proprietors expect a shake-out as the area becomes over-built with theaters, motels and restaurants.

"There's going to be a bump 12 to 18 months from now," said an investor in the Branson market.

"We are watching the market real hard," added Mr. Lewis of Capital Bank. "The truth of the matter is ... bad loans are made in good times. We are trying to guard against that."

Christopher Dixon, an entertainment analyst with PainWebber Inc., said the city will likely go through a downturn, but it can be weathered if the local government plow funds into the infrastructure.

"The biggest problem with facilities like Branson is they get caught in their own hubris," he said. "They forget to take some of the monies and reinvest them back into the community. What was idyllic can become over crowded and turn into a honky-tonk."

$1 Billion from Tourists

There is plenty of money to go around in Branson. Last year, tourists spent nearly $1 billion. Sales tax collections soared 35% to $21.8 million in 1992 from the prior year, and have tripled since 1985.

Banks like Ozark Mountain are flooded with deposits. It maintains deposit relationships with heavy hitters like Silver Dollar City, a popular amusement park that last year packed in 1.7 million people; as well as with scores of restaurants and entertainers who include Ray Stevens and Andy Williams, as well as Mr. Tillis, and Mr. Clark, Mr. Brookhart said.

Deposits at the bank shot up 37% in the first half of the year to $141.1 million, compared to a year ago. One of the bank's three branches is open seven days a week.

Its busiest day is Saturday, and $800,000 in deposits can pour through the drive-up window on a typical weekend. The bank also processes MasterCard deposits from local merchants, which have reached $19.8 million for the first half of the year, up 55% from a year ago.

But life in Branson is much more complicated since it has become one of the hottest tourists spots in the nation. One day Mr. Brookhart had to divert a tour bus out of his neighborhood. Curious tourists were trying to find Mel Tillis' house, which is near Mr. Brookhart's.

"That's the Hollywood junk," Mr. Brookhart said. "That's not Branson."

Then there's the traffic problem, which is enough to make a New Yorker blanch. In July, the peak tourists month, more than 31,000 cars inch along the main drag.

Mr. Brookhart dodges the mess, zipping along backroads and cutting through shopping center parking lots in his white Buick Park Avenue.

"We are going to drive five miles to get one," said the banker, who has his radio dialed to an easy listening music station. "Fortunately, the tourists don't know about this."

But even a seasoned Branson traffic dodger can't escape the mess.

"Damnation," he said staring at a snaking line of red lights. "We've got gridlock. (Wayne) Newton just let out. It's a bloody zoo."

Mr. Brookhart takes the annoyance in stride.

"Other bankers would kill to be in Branson," he said. "Both coasts are dead on their butts, but we've never had it so great." about 50% in the past two years.

But boomtowns can bust, and there is concern that the area is becoming overbuilt. New hotels, condominiums, and apartments are springing up all around the main two-lane drag known as Country Boulevard 76, which at night is lit up like Las Vegas, without the casinos.

For now, though, it's full steam ahead.

What's driving Branson's boom?

Country music stars like Mickey Gilley, Mel Tillis, and Roy Clark have grown tired of the road and have opened their own theaters in Branson. The response: fans from across the nation have poured into the city by the millions.

In 1992, the number of visitors swelled to 5 million, up from 3.1 million in 1986. Branson's chamber of commerce expects the number to increase by another 500,000 this year.

The town is so popular the American Automobile Association ranks Branson as its No. 2 driving destination behind Walt Disney World in Florida. This month, Branson Airlines been offering flights to music city from several cities, including St. Louis and Kansas City.

Thirty-two theaters have been built with 42,729 seats, two more are on the drawing board, and there are rumors of more to come. The number of lodging rooms reached 14,004 in the first four months of 1993, up 26% from 1992. Another 1,800 rooms are under construction.

Fear of a Shakeout

"I'm worried about some kind of shakeout," said Vern Lewis, senior vice president of Capital Bank's Branson offices. "Branson is a for-real situation, but it is just going to have it growth cycles."

The banks are feeding off a huge demand for commercial construction. The total value of construction projects for 1991 and 1992 combined hit $134 million in 1991, up from $18 million in 1989-1990.

Ozark Mountain Bank has been an aggressive player in the market. Its loan portfolio shot up by 50% in the first six months of the year to $126.7 million compared to a year ago.

It has $73.8 million in motel, resort, restaurant, and theater loans on its books, which make up 58% of total loans.

About $10 million is in the theater after loans to five groups that include Boxcar Willie Theater, with 901 seats, the 1,700-seat Baldknobbers, Moe Bandy's Americana Theater, 950 seats, Bobby Vinton's Blue Velvet Theater, with 2,000 seats, and Mickey Gilley's Family Theater, 970 seats.

This month, the bank signed a deal with the Welk Group Inc. to finance a 2,300-seat theater, a 160-room hotel, and a restaurant. The bank, which is owned by the $2.7-billion-asset Central Bancompany, Jefferson City, Mo., will lend more than $10 million to the $14-million-plus project, which is slated to open next May.

The Welk Group will feature music made famous by the late band leader Lawrence Welk.

"We have cherry-picked the loans," said the 58-year-old Mr. Brookhart, who has been a banker in Branson for 26 years. "We've got people who are strong enough to play in the market and to withstand a decrease in ticket sales. I can guarantee the five are going to survive the shakeout very well."

So far, so good. Ozark Mountain's nonperformers stood at zero for the first half of the year.

Boxcar

One customer is country music star Boxcar Willie. He and Mr. Brookhart shoot the breeze as fans mill about the singer's museum and gift shop. The visitors pull Boxcar Willie T-shirts off hangers, eye train conductor caps, and finger mugs. The cash register hums.

"We've got a gold rush going on in here," says the potbellied

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