Citizens Bank Earns Arkansas - Arkansas Bankers Association

Recruiting Community Bank Directors

2015 Leadership Conference

The Arkansas

Banker

The

Leadership Issue

Volume XCIX, No. 5 | May 2015 May 2015 | The Arkansas Banker

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September/October 2014

A 16 year multi-media news organization reporting on business Blackwell developments and politics in Arkansas.

July/August 2014

Story Topic Story Topic Story Topic Story Topic Story Topic Story Topic

Marlon

ON ARCHITECTURE & LIFE

Gov. Mike Beebe Takes Flight Energy In-depth

The EPA Impacts Arkansas

Turning 10

The Fayetteville Shale

Gene’s BBQ Always Open

Hot Springs Re-imagined Motorcycle Tourism Get Your Motor Runnin’

Heavyweight Fight Sen. Mark Pryor vs. Cong. Tom Cotton

TELEVISION

Host Roby Brock interviews influential business and political leaders at 9 a.m. Sundays on KATV Channel 7. The show also features Channel 7 News Anchor Scott Inman and Lead Capitol Reporter Janelle Lilley.

RADIO

Monday nights at 6 on KUAR 89.1 FM in Central Arkansas; weekdays at noon on KUAF 91.3 FM in Northwest Arkansas; and Saturdays at noon on KASU 91.9 FM in Northeast Arkansas and ED-88 in Southwest Arkansas.

MAGAZINE

Talk Business & Politics is produced six times a year and features a mix of profiles, commentaries, in-depth coverage of statewide business and politics and top regional stories of interest. Of the 16,000 copies published, 15,000-plus are directly mailed to influential business and political decision-makers in Arkansas and the remaining copies are distributed in niche locations and at conferences across the state.

ONLINE

Talkbusiness.net offers statewide coverage of top business and political news with leading contributors with opinion columnists. Supplemental micro-sites covering key industries provide more in-depth reporting in fields of entrepreneurship, manufacturing, energy, finance, health care, education and more.

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Sundays, watch or listen to our weekly TV program. Tuesdays at 4 p.m., Roby Brock and Wes Brown “Talk Business” and provide interviews, analysis and deeper coverage of big stories in the business arena. Available on talkbusiness.net, iTunes and Stitcher. Thursdays at 4 p.m., Roby Brock and Jessica DeLoach Sabin “Talk Politics,” interview major political figures, providing analysis of key policy debates and offering deeper coverage of issues in the legislative realm. Available on talkbusiness.net, iTunes and Stitcher.

SOCIAL MEDIA

Led by Roby Brock , the Talk Business & Politics brand is a trusted resource for fair and balanced reporting on the news that’s driving politics and commerce across the state and is the most respected media in the industry. With the relationships that have been cultivated over the years, the TB&P staff, contributors and content partners represents the most knowledgeable and experienced in their fields.

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The Arkansas Banker | May 2015

The Arkansas

Banker Volume XCIX, No. 5 | May 2015

The Arkansas Banker is the official publication of the Arkansas Bankers Association.

CONTENTS

COLUMNS

DEPARTMENTS

Emerging Leaders Update



Daniel Robinson

10

Washington Report

11

Political Perspective

25

Professional Development

26

Community News

28

Member News

29

Banker News & Moves

Bill Holmes

Chuck Morgan

Gov. Frank Keating Roby Brock

31 Classifieds

SUBSCRIPTION

FEATURES

MAGAZINE RATES

Cover price is $5.95 each. Annual subscription rates are $40.00 for members and $60.00 for non-members.

POSTMASTER: Send address changes to Arkansas Bankers Association, 1220 West Third Street, Little Rock, AR 72201.

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The publication of advertisement does not necessarily represent endorsement of those products or services by the Arkansas Bankers Association. The Editor reserves the right to refuse any advertisement. 

The Arkansas Banker (ISSN 004-1726) is published monthly by the Arkansas Bankers Association, 1220 West Third Street, Little Rock, AR 72201. Phone: 501.376.3741. Periodical postage paid at Little Rock, AR.

Chairman’s Column



The Arkansas Banker seeks to reflect the banking news of Arkansas and other news of direct interest to the Arkansas Bankers Association. Statement of fact and opinion are made on the responsibility of the authors alone and do not represent the opinion or endorsement of the Arkansas Bankers Association. Articles may be reproduced with written permission only.

Subscription to The Arkansas Banker magazine, which began monthly publication in April 1917, is included in the membership fees to the Arkansas Bankers Association.

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EDITORIAL

ADVERTISEMENT

President’s Column



EDITORIAL OFFICE

1220 West Third Street Little Rock, AR 72201 Phone 501.376.3741 | Fax 501.376.9243 www.arkbankers.org

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THE LEADERSHIP ISSUE: FEATURES

31

Index of Advertisements

22

Construction Management: Making Sure You Stay ‘Right-Side Up’

24

Agricultural Lending Conference Wrap-up

12

2015 Leadership Conference

14

Leadership Round-Table: Q&A with Arkansas Execs

18

Recruiting and Retaining Community Bank Directors





By Joe Ehrhardt & Camille Phillips

By Cynthia L. Course, CPA

May 2015 | The Arkansas Banker

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PRESIDENT’S COLUMN Celebrating Our 125th Year Our Convention this month served as the official kickoff of the Arkansas Bankers Association’s 125th year. We will be building on that theme throughout the coming year. And that spurred me to think about — and talk about — where our future lies. But first let’s talk about how we began, and why. The ABA’s first Constitution and By-Laws were adopted October 20 & 21, 1891. They declared, “That the prosperity and success of the banks of our state may be aided and their usefulness to the public promoted; that the renewal of personal acquaintance from year to year and the discussion of subjects of importance beget unity of thought and uniformity of action; and particularly to consider with deliberate care the financial and commercial usages and customs and laws which affect the banking interests of the State, and protection against loss by crime, the following constitution and By-Laws are submitted for the “Arkansas Bankers Association.” The need for banks, and then for the ABA, can be appreciated when you hear that in 1830 there were only 20 banks in the Mississippi Valley, from Canada to the Gulf, and from the Alleghany Mountains to the Rockies.

When Arkansas was admitted to the Union on June 16, 1836, one of the provisions of the Constitution was to establish a state bank. That was The Real Estate Bank of the State of Arkansas. It ultimately did not fare well, a second State Bank was started and then private banks began to open. In 1866, The First National Bank of Little Rock opened, failed, and became George Brodie & Son. Then German Savings Bank and Exchange National Bank formed; and in 1888 W.B. Worthen and Company was started. W.B. Worthen was capitalized at $100,000.

PRESIDENT & CEO BILL HOLMES

Three years later, in 1891, 21 banks founded the Arkansas Bankers Association. Actually, from October 1891 — when we were formed — to today, our mission has changed very little. We have grown from three or four mandates to six main reasons we exist. Advocacy. It is important to remember why the ABA was organized in 1891 — to serve as a legislative liaison for the banking industry in the Arkansas General Assembly and in the U.S. Congress. This continues to be our top priority. We do it well and will continue to look for ways to enhance the effectiveness of our advocacy efforts on behalf of our members.

ABA STAFF BILL HOLMES

President/CEO 501.978.3602 | [email protected]

CARLA BRINKLEY

VP/Controller 501.978.3608 | [email protected]

AVA FRANKS

VP/Director of Government Relations 501.978.3606 | [email protected]

JESSICA SAHENE

Marketing Coordinator 501.978.3609 | [email protected]

STUART THALHEIMER

Executive Assistant 501.978.3605 | [email protected]

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The TheArkansas ArkansasBanker Banker || May May2015 2015

AARON GAMEWELL

EVP/COO 501.978.3613 | [email protected]

KAMI TAYLOR COLEMAN

VP/Professional Development 501.978.3614 | [email protected]

TRACI LOGSDON

Director of Communications 501.978.3603 | [email protected]

TERRI KELLY

Professional Development Coordinator 501.978.3607 | [email protected]

BRENDA SCARBROUGH

Administrative Assistant 501.978.3600 | [email protected]

Professional Development. Our rapidly changing and fast-paced industry demands that professionals stay abreast of laws, regulations, trends and shared best practices. ABA conferences, schools and seminars provide the essential training and education our members need to stay informed. From the C-Suite to the newest teller, ABA offers levels of financial education designed to fit your bank’s needs. We constantly strive to ensure all ABA programs serve the changing needs of our industry. Products. The services offered to Arkansas banks by ABA Services are as relevant and diverse as any state bankers association in the nation. The Arkansas Bankers Association provides its members with the resources they need to succeed in Arkansas’s dynamic and innovative marketplace. From D&O bonds to compliance software to office supplies, your association is constantly identifying new and needed resources for its members. Inclusion. The ABA represents 98 percent of the assets in Arkansas. Our membership ranges from some of the nation’s largest banks and trust companies to our smaller hometown banks. We are committed to listening and learning about the distinctive needs of all of our members, and equally important, we want to promote an environment

where all of our members feel welcomed and included in the work of the association. Engagement. As talented and capable as the ABA staff is, there is no substitute for member engagement. Engagement is attendance at our Annual Convention or meetings, participation in group meetings, offering feedback on proposed legislation, responding to surveys, sending in your individual stories on the effects of regulations on our customers, or traveling to Little Rock or Washington, D.C., to meet with elected officials. Grassroots will be our emphasis for more years to come. Service. The ABA staff is an exceptional group of people. They all share a common attribute — a deep desire to serve. They take great pleasure in helping our members solve problems and find answers. A great deal of my time is spent visiting with our members across the state. Not only do I get to make new friends and build relationships, but the conversations I have with bankers guide and help to shape our future direction. With that, I encourage you to stay engaged, and help us celebrate our 125th year.

ABA EXECUTIVE COMMITTEE CHUCK MORGAN | CHAIRMAN

ROBERT Y. TAYLOR | CHAIRMAN-ELECT

Relyance Bank, Pine Bluff

Parkway Bank, Rogers

SEAN WILLIAMS | VICE CHAIRMAN First National Bank of Wynne, Wynne

MARK FERGUSON | TREASURER First Security Bancorp, Little Rock

DAVID BARTLETT | PAST CHAIRMAN Simmons First National Corp., Little Rock

BILL HOLMES | PRESIDENT/CEO Arkansas Bankers Association, Little Rock

ABA BOARD OF DIRECTORS MARY BETH BROOKS | GROUP 3 The Bank of Fayetteville, Fayetteville

DREW HARPER | GROUP 2 Bank of the Ozarks, Little Rock

DAVY CARTER | GROUP 1 Centennial Bank, Jonesboro

First Bank, Rogers

RANDY SCOTT | GROUP 1 Farmers Bank & Trust Co., Blytheville

DAVE DICKSON | GROUP 5 Union Bank & Trust Co., Monticello

CHARLES HORTON | GROUP 1 Fidelity Bank, West Memphis

MIKE SMITH | GROUP 5 McGehee Bank, McGehee

ELIZABETH FARRIS | GROUP 4 Regions Bank, Hot Springs

J. MICHAEL JONES | GROUP 5 Merchants & Farmers Bank, Dumas

SUSIE SMITH | GROUP 2 Simmons Bank, Little Rock

CURTIS GENTRY | GROUP 1 First National Bank of Eastern AR, Forrest City

CRAIG MOBLEY | GROUP 4 First Financial Bank of El Dorado, El Dorado

JIM TAYLOR | GROUP 3 First Security Bancorp, Fayetteville

GARY GOLDEN | GROUP 4 First State Bank of DeQueen, DeQueen

WILSON MOORE | GROUP 2 Bank of America, Little Rock

STANHOPE WILKINSON | GROUP 3 Farmers Bank & Trust, Greenwood

JON HARRELL | GROUP 3

CATHERINE OWEN | GROUP 2 Eagle Bank, Little Rock

May 2015 | The Arkansas Banker

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CHAIRMAN’S COLUMN Reflecting on the Past Year As I write this, I am one week away from turning over my gavel as chairman to Robert Taylor. Reflecting on this past year, I can’t help but feel like I’m just now catching on to what this job is all about: It’s about advocacy and education. Our industry, as much as any, needs that strong advocacy. I’m not sure that we will ever be successful in completely undoing the burdens created by Dodd-Frank, but I do feel that the seeds have been planted to change some things for the better. The new Senate is more open to bi-partisan legislation to address this one size fits all regulatory environment. We are very fortunate to have strong support from our entire congressional delegation. But, to make serious changes, we need to send a message to congress that will tell how our customers (and their voters) are being effected. That seems to be much more effective than telling them how it effects our profits. I’d like to encourage all of you to consider participation in our ABA Washington visits. It does make a difference. The legislative session was an eye opener for me. Ava, Aaron and Bill did a great job during the session in keeping up with the avalanche of proposed bills and protecting Arkansas banks. Ava was very proactive in her efforts to make sure our voice was heard. My thanks to the Government Relations Committee for your help. The ABA is also about education and cooperation. Although winter weather hindered

some attendance, our educational events were a success. The ABA has done a very good job in keeping our topics current and making sure that they add value to our membership. Changes have also been made to enhance the ELS experience and attract more participation. Your ABA staff is outstanding. They are prepared, they are professional, and they are motivated. This staff gave me tremendous support and made sure that I was always prepared. It has been my pleasure and honor to work with them this past year. Thank you Bill Holmes, Aaron Gamewell, Carla Brinkley, Kami Taylor Coleman, Ava Franks, Traci Logsdon, Stuart Thalheimer, Jessica Sahene, Terri Kelly, and Brenda Scrabrough. I appreciate each of you.

CHAIRMAN CHUCK MORGAN President & CEO Relyance Bank

I’d also like to thank all of you for electing me to serve as chairman of this great association. It has truly been an honor to represent Arkansas banks. As I end my year, I turn this responsibility over to a very good man and a very good leader in Robert Taylor. I’ve known Robert for many years. With his knowledge, skills and experience, he will be a strong advocate and leader for Arkansas banks. I look forward to seeing you at our 125th Annual Convention and at the Bank Management Seminar in August. Thank you again for this great experience.

125 TH ANNUAL CONVENTION & TRADE SHOW

Look for full coverage of the 125th Annual ABA Convention and Trade Show in the June issue of The Arkansas Banker.

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The Arkansas Banker | May 2015

Provide you with face-to-face interaction with an expert instructor!

JUNE 2015

22 | Marketing and Business Development for the Banker

Holiday Inn Presidential, Little Rock Who Should Attend: Commercial Lenders, Relationship Managers, Branch Managers, Private Bankers, Business Development Officers

23 | Commercial Real Estate Lending in Today’s Economy

25 | Introduction to Commercial Lending

Hilton Memphis, Memphis Who Should Attend: Commercial Lenders, Credit Officers, Branch Managers, Credit Analysts, Consumer Lenders, Loan Review Officers, Compliance Officers

25-26 | Leadership Conference

The Chancellor Hotel, Fayetteville Who Should Attend: Anyone who would like a chance to further their leadership skills, listen to motivating speakers, and network with colleagues from across the state

Holiday Inn Presidential, Little Rock Who Should Attend: Commercial Lenders, Credit Analysts, Loan Documentation Specialists, Branch Managers, Private Bankers, Business Development Officers

JULY 2015

9 | Integrated Disclosures: How To Prepare & What Is Required

27-30 | Bank Compliance School

Crowne Plaza, Little Rock Who Should Attend: Those who manage the entire compliance program for their institution, Compliance Officers from community banks, Compliance Officers who are involved in the compliance monitoring, audit, review, or training process in their institutions.

Holiday Inn Presidential, Little Rock Who Should Attend: Compliance Officers, Loan Operations Personnel, Internal Auditors, Loan Officers, Title Companies

15 | Customer Acquisition & Retention Conference

Crowne Plaza, Little Rock Who Should Attend: Directors, CEOs, Chief Marketing Officers, and Senior Management

AUGUST 2015

6-8 | Bank Management Seminar

Embassy Suites, Rogers Who Should Attend: Bank Directors, CEOs, Presidents and Senior Management

25 | Legal Issues of New Account Documentation

24-28 | Consumer Lending School

Crowne Plaza, Little Rock Who Should Attend: This course is appropriate for any level of bank personnel who would like a better understanding of consumer lending; however, those who are new to banking will especially benefit.

Crowne Plaza, Little Rock Who Should Attend: Customer contact personnel, supervisors & officers whose responsibilities include opening or managing new accounts and certificates of deposit, internal auditors and compliance officers

PROFESSIONAL DEVELOPMENT | LIVE EVENTS

ABA Live Events...

For more information about ABA Live Events, log on to www.arkbankers.org or call 501.376.3741 May 2015 | The Arkansas Banker

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EMERGING LEADERS UPDATE 2015 Leadership Conference The 2015 ABA Leadership Conference will be held next month, June 25-26, at the Chancellor Hotel in Fayetteville. We are very excited about the conference this year and look forward to hearing from leaders such as Jeff Long, University of Arkansas Athletic Director, with special guest emcee Tommy May, former Chairman of Simmons First National Corporation, Sidney Moncrief, and many more. Details of this year’s conference can be found on page 12 of this magazine, or online at www.arkbankers.org.

It is hard for me to believe my time as a council member will come to an end at the conference. I have been fortunate to serve on the council for the last several years. I would like to thank Simmons Bank for allowing me to serve. I would also like to thank the ABA for giving me the opportunity. The ABA staff works very hard on a daily basis to help make banking in Arkansas better. I encourage everyone to take advantage of the educational courses and conferences — like the Leadership Conference — they offer every year.

ELS PRESIDENT DANIEL ROBINSON

Community President of Northeast Arkansas Simmons Bank Jonesboro

ABA EMERGING LEADERS SECTION COUNCIL Simmons Bank, Jonesboro

DANIEL ROBINSON | PRESIDENT

KEVIN THOMPSON | VICE PRESIDENT Centennial Bank, Fayetteville

EDUARDO ABRIL | GROUP 4 First State Bank of DeQueen, DeQueen

Heartland Bank, Little Rock

Today’s Bank, Fayetteville

JOHN ANDERSON | GROUP 5 Relyance Bank, Pine Bluff

CAMRON HAMES | GROUP 2 First Community Bank, Batesville

Firstar Bank, Fort Smith

TRENT BROWN | GROUP 1 Simmons Bank, Jonesboro

ANDY HORTON | GROUP 1 Fidelity National Bank, Marion

HUNTER NORTON | GROUP 3 First Security Bank, Fayetteville

TREY CLARK | GROUP 4 First Financial Bank, El Dorado

MATT LAFORCE | GROUP 2 First Security Bank, Searcy

ASHLEY O’BRIEN EAST | GROUP 2

BLAKE FLETCHER | SEC./TREAS.

Arvest Bank, Little Rock

BRITTANY THOMPSON LITTLE | GROUP 3

BROOKE MORETON | GROUP 3

WHAT IS THE EMERGING LEADERS SECTION? The Emerging Leaders Section (ELS) was organized by the Arkansas Bankers Association Board of Directors to provide information concerning educational opportunities available for its members. The ELS was established to provide leadership training for young bankers, to enhance banking careers, offer its members the opportunity to learn, network, and be productive members of the banking profession. 8

The Arkansas Banker | May 2015 2015

Provide the option of training as many employees as you wish for one price, all from the convenient location of your home institution!

Mortgage Loan Originator Required Training: Part I May 20, 2015 1:30 p.m. - 3:30 p.m.

The 4 C’s of Exceptional Supervision June 11, 2015 1:30 p.m. - 3:30 p.m.

Regulation CC: Checks and Holds July 7, 2015 10:00 a.m. - 12:00 p.m.

Seven Habits of Effective Credit Administration in Commercial Banks June 2, 2015 10:00 a.m. - 12:00 p.m.

How to Analyze a Start-up Business June 16, 2015 10:00 a.m. - 12:00 p.m.

Call Center Representative Training July 7, 2015 1:30 p.m. - 3:30 p.m.

Mortgage Foreclosure and Loan Collection June 17, 2015 10:00 a.m. - 12:00 p.m.

Best-Ever Compliance Checklists for Consumer Loans July 8, 2015 1:30 p.m. - 3:30 p.m.

CRA Nuts & Bolts - Five Steps to Pass the Exam June 2, 2015 1:30 p.m. - 3:30 p.m. Advanced Business Account Issues: Multi-tiered Businesses, Agents, Escrows and More June 3, 2015 1:30 p.m. - 3:30 p.m. Excel Explained: Minimize Spreadsheet Errors June 9, 2015 10:00 a.m. - 12:00 p.m. Employment Records and How to Keep Them June 10, 2015 10:00 a.m. - 12:00 p.m. Vital Check and Deposit Issues June 10, 2015 1:30 p.m. - 3:30 p.m. Ten Things to Look for When Analyzing Balance Sheets June 11, 2015 10:00 a.m. - 12:00 p.m.

Dealing with Appraisals: Regulations and Requirements June 18, 2015 10:00 a.m. - 12:00 p.m. Cyber Security and FFIEC Expectations June 23, 2015 1:30 p.m. - 3:30 p.m. W-8, W-9 and Account Opening Issues June 24, 2015 1:30 p.m. - 3:30 p.m. Dealing with Subpoenas, Summonses, Garnishments, Tax Levies, Etc. June 25, 2015 10:00 a.m. - 12:00 p.m. 10 Key Compliance Issues on Overdraft Privilege Programs June 25, 2015 1:30 p.m. - 3:30 p.m.

Federal Benefit Payments Garnishment Requirements July 9, 2015 10:00 a.m. - 12:00 p.m. 25 Lessons Learned from Nationwide Safe Deposit Box Litigations July 14, 2015 11:00 a.m. - 1:00 p.m. Entering the World of Consumer Lending: Part 1 July 14, 2015 2:30 p.m. - 3:30 p.m. Entering the World of Consumer Lending: Part 2 July 21, 2015 2:30 p.m. - 4:30 p.m. Entering the World of Consumer Lending: Part 3 August 4, 2015 2:30 p.m. - 4:30 p.m.

PROFESSIONAL DEVELOPMENT | WEBINARS

ABA Webinars...

For more information about ABA Webinars, log on to www.arkbankers.org or call 501.376.3741 May 2015 | The Arkansas Banker

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WASHINGTON UPDATE Telling Stories

A stay-at-home mom in Massachusetts goes through the pain of a divorce resolved to provide as much stability for her kids as possible. She sets out to re-enter the work force and applies for a loan to purchase the family home so her kids can remain in the same schools. The bank wants to help, but because the woman cannot meet the ability to repay/qualified mortgage rule requirements, the loan is declined. An experienced doctor in Oklahoma with a substantial income wants to move his family to a neighborhood with better schools. Though he has been practicing for several years, he just purchased his own practice. Now, without a two-year history of self-employment income, he can’t qualify for long term mortgage financing. Another homeownership dream dashed by inflexible regulation. There are plenty more stories where those came from. In fact, when AmBA recently asked bankers to share examples of the most troublesome regulations, with an emphasis on how the rules’ affected their customers, bankers did not disappoint. A bank in New Mexico has stopped offering mobile home secured loans because its customers would not observe the home ownership counseling requirement. An Idaho banker reported the frustration of ag customers who are being told they must purchase flood insurance on low-value sheds and barns located on their property. A Colorado banker noted how his bank worked with a recently retired engineer with substantial liquidity and a generous, albeit timelimited pension. A good credit risk yet, thanks to overly prescriptive rules, the man had to ask his 75-year-old father to cosign the loan. These are powerful stories. In fact, most stories are powerful. That’s because, despite the tremendous advancements in communications technologies, storytelling remains the most effective way to make a point. Members of Congress believe it, too. In fact, three VIPs speaking at ABA’s Government Relations Summit in March — Rep. Jeb

Hensarling (R-Texas), who chairs the House Financial Services Committee, Sen. Sherrod Brown (D-Ohio), ranking member of the Senate Banking Committee, and Rep. Kevin McCarthy (R-Calif.), who holds the second most powerful post in the House — all advised bankers seeking regulatory relief to “tell their stories” to their lawmakers. Hensarling and McCarthy also stressed the importance of talking with members of both parties. The legislative solutions we seek require bipartisan support to be enacted. Rather than telling your story to an official who already knows you and appreciates what you do, tell it to the freshman representative or the Democrat who fears one or two practical legislative fixes could lead to the unraveling of the Dodd-Frank Act.

GOV. FRANK KEATING President & CEO American Bankers Association

Our first instinct when asked to talk about our industry’s regulatory burden might be to talk about how much time and money compliance is costing banks. That’s a legitimate grievance that reveals an essential economic truth: Money spent on paperwork is money that can’t be spent in loans that bring growth and prosperity. But dry economic arguments don’t pack nearly as much punch as stories about how a customer couldn’t buy a home or expand her business. Analogies help, too. I have tried to explain banks’ regulatory burden to reporters by telling them if restaurants had to expend as much human and financial resources on compliance as banks do, the food you eat wouldn’t taste very good. Colorful analogies and anecdotes resonate more than just plain facts. Narratives are more memorable than PowerPoint slides. If you’ve heard me speak, you know that I believe this. I practice what this column is preaching. If you want to see meaningful regulatory relief — or a level playing field with credit unions and the Farm Credit System, or more accountability for retailers involved in data breaches — share your stories with your lawmakers when you write or meet with them. Communicating effectively and memorably about our policy priorities will help us achieve them.

© 2015 American Bankers Association. All rights reserved. Reprinted with permission.

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The Arkansas Banker | May 2015

POLITICAL PERSPECTIVE Liking Congressmen, Hating Congress... Does it Work for Banks? GUEST COLUMNIST ROBY BROCK

You’ve heard the phrase that “people love their congressmen, but hate Congress.”

average, everyday citizen is unlikely to feel very sympathetic.

It comes from years’ worth of polling that shows that while people hate the institution of Congress, by and large, they are satisfied with the person that represents them in Congress.

Banks make money.

Does a similar effect work in the banking world and is there a lesson to be applied? Not all large banks are bad, nor are all small banks good. However, the public perception does lead to the generalizations that big banks are evil and small town banks represent all that is right in the world. With big banks, decision and policy makers are states away and when we’ve seen big mergers in Arkansas that result in unpopular decisions — such as fees or minimum deposit amounts — it is easy to demonize the big institutions. The same banker that worked with you before the buyout may not have changed, but his bank’s rules have. Thus, customers may love their banker and not love their bank. I hear from many bankers who have transferred to smaller banks after a merger for the very reason I just outlined: they felt like they weren’t serving the long-time customers they had developed. The business often follows.

Roby Brock is the Editor-in-Chief of Talk Business & Politics, an Arkansas-based multimedia news organization. Read news or sign up for daily newsletters at TalkBusiness.net.

Small banks have shortcomings, however, in that there may be a dearth of products they can’t offer or there could be limitations on the size of loans they can conduct. Still, the friendliness and personal relationships of a small town bank make for easy business. Of all of these scenarios, there is a lesson to be heeded by bankers with banks of any size in Arkansas. As we read stories of the impact of banking regulations on banks — large and small — the

They see the stories of the billion-dollar profits from nationwide banks and Wall Street excesses. They also read the local bank earnings reports and see the millions in net income achieved every quarter. If there is going to be a shift in public perception that banking regulations are strangling the banking business and harming consumers, it is incumbent for those in banking to communicate how the changes are impacting your ability to provide a service to your local customer. For example, have mortgages become so cumbersome with new paperwork guidelines and static equations that there is no flexibility in certain situations? Just like your local Congressman comes back home during recess and communicates his frustration at the institution of Congress for the backwards policies adopted, bankers must adopt a similar tactic. Your customers need to hear the messages from you — their local, personal banker whom they know and trust — not from a rejection letter from the bank. Banking remains a service industry and this is a service you have to provide to make sure the industry remains relevant and human to your customers. If that doesn’t work, you can always blame Congress as they are likely responsible for the bad news. But be careful not to blame your Congressman. He’s popular.

May 2015 | The Arkansas Banker

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The Leadership Issue...

Register now for the 2015 Leadership Conference!

2015 LEADERSHIP CONFERENCE:

Let Your Leadership Potential Soar to New Heights The 2015 ABA Leadership Conference is slated to take place Thursday and Friday, June 25-26, at the Chancellor Hotel in Fayetteville. This year’s event has an agenda tooled to help your leadership potential soar to new heights with a line-up of speakers and topics sure to enrich your banking career. Featured on the agenda are University of Arkansas Athletic Director Jeff Long and Razorback basketball legend Sidney Moncrief. Both men will share their stories of success and

what it takes to achieve greatness both personally and professionally. Other sessions will touch on marketing, recent legislation, Community Reinvestment Act, QM and ATR, and real estate valuations. If you would like to further your leadership skills, listen to motivating speakers, and network with colleagues from across the state, this is your chance. Log on to www.arkbankers.org for details and registration information.

Featured Speakers

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Roby Brock

Aaron Dunn

Jeff Long

Sidney Moncrief

Talk Business & Politics

Collateral Valuation Consultants

University of Arkansas

Milwaukee Bucks

The Arkansas Banker | May 2015

Leadership Conference Agenda Thursday, June 25 10:00 a.m. 5:30 p.m. 6:00 p.m.

Past Presidents Golf Tournament Registration Opening Reception

Past Presidents Golf Tournament

Friday, June 26

8:30 a.m. Registration 9:00 a.m. Opening Comments Daniel Robinson, ELS President 9:05 a.m. ABA Welcome & Update Aaron Gamewell, ABA 9:25 a.m. Legislative Update Ava Franks, ABA 9:45 a.m. Stepping Up Your GAME for Peak Performance Sidney Moncrief 10:45 a.m. Networking Break 11:00 a.m. Impact of the 2015 Arkansas Legislative Session Roby Brock, Talk Business & Politics 11:45 a.m. Lunch 12:50 p.m. Leading with Integrity at the University of Arkansas, the SEC, and in Life Jeff Long, University of Arkansas with Special Guest Tommy May 1:50 p.m. Breakout Session I 2:50 p.m. Breakout Session II 3:50 p.m. Networking Break 4:00 p.m. Marketing to Millennials in Today’s Digital Landscape Ryan Swift, Everfi 5:00 p.m. Business Session 5:15 p.m. Adjourn

Join us for a 4-Man Scramble at the Fayetteville Country Club on Thursday, June 25, at 10:00 a.m. This event is open to all bankers and guests. Invite your co-workers and customers to play in the tournament with you! Be sure to indicate that you would like to register for the tournament on the Conference Registration Form. Registration includes range balls, greens fee, golf cart & lunch. Note: Past Emerging Leaders Section presidents golf for free.

Thank You to our Sponsors! Celerit ƒƒ Lanyards

Equias Alliance ƒƒ Mobile App Banner Ad Friday, Eldredge & Clark ƒƒ Golf Tournament S.F. Fiser & Company ƒƒ Golf Tournament Drink Carts

Martie North

Curtis Smith

Ryan Swift

Jim Taylor

Simmons First National Bank

Collateral Valuation Consultants

EverFi

First Security Bancorp May 2015 | The Arkansas Banker

13

The Leadership Issue...

LEADERSHIP ROUND-TABLE:

Four Arkansas Executives Share Their Perspectives on Leadership

Kelly Ashcraft D. Scott Hancock Debbie Knight President/COO/CLO Warren Bank & Trust Company Warren

Division President, NW Ark. Centennial Bank Fayetteville

How would you describe your leadership style? What experiences have you had to cultivate that style? KA I’m not sure that I have one definitive leadership style but rather a combination of styles. I think at

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The Arkansas Banker | May 2015

Senior Vice President One Bank & Trust, N.A. Little Rock

times your style must be tailored to fit the situation at hand. I believe in the importance of teamwork. It is important to draw on people’s knowledge and skills which creates a group commitment. My personal experience is that I have

Randy Scott President & COO Farmers Bank & Trust Blytheville

grown up in banking. I have been with Warren Bank for twenty-two years, starting out as a loan secretary. I have had the privilege to work with some extraordinary people who have served as mentors. You learn through experience what works and what does not work.

SH Energetic, intense and lead by

example. I love life and I love work, so I do not mind the extra time taken to work with my team, whether that be over a weekend to complete a loan package, meeting a customer after hours for a deposit, or preparing for the next community event. It takes a team to succeed, and we all have to be willing to play different roles and be flexible. I give authority to other leaders in the bank, but expect accountability. Delegation is touchy for me. One can delegate and move on — I like to be involved and support details. With a strong team, I am fortunate that we accomplish a lot together. Sometimes I need to be the QB and other times just block.

DK I would definitely define my leadership style as “inclusive.” I have always been a person that interacts well with all different types of people and I am naturally curious about what makes other people react the way they do. I have my graduate degree in Interpersonal and Organizational Communication so that has helped me pull together the best teams and the personalities that will bring out the best in everyone vs. those personalities that will ultimately clash.

There is no job in the bank that I wouldn’t do. In return, there is no job in the bank that I wouldn’t hesitate to ask my co-workers to do.

When I interview people, I want to know them — not what college they went to, not what degree they walked away from college holding. I want to know them, and that normally starts with where were you

born? Tell me about your family, your siblings, your friends, and your favorite mentors. I want to connect to their story. I promise you will remember more from that interview because you know the person you interviewed now. I’ve also found that the applicant is more relaxed as a result of this and you will be able to ascertain if they will be a strong fit for your organization. The connection that is established in the interview helps to create a collaborative supervisor-employee relationship. I want them to know me and I want to know them. I also encourage my applicants and existing employees to voice their opinions and concerns about matters that they are passionate about, this is opportunity for a great collaboration and alternate points of views. People know I am going to coach them. I let them know that from the get go. I will tell them “you know how that paper looked when your English teacher graded it, and returned it with red ink?” Well, expect that kind of coaching because I want you to grow, as did your English Teacher. I will say I have a silly sense of humor that allows me to get away with some coaching that sounds like: “Really? Really, you just did that?” but at the end of the day they got my message and received it in the positive manner in which it was intended. I’ve had the privilege of having amazing mentors in my life. Yes, they would tell me that I said “umm” too much in my presentation, or that I misused a past participle. However, what I found was they weren’t “getting on to me,” instead they were making an investment in me. If I have impacted just one from the hundreds that I have had the wonderful opportunity to lead and manage, then I would say to myself “job well done.” I would love to be thought of as a person that has a positive impact on someone’s career!

RS My leadership style is more of a “hands-on” approach. There is no job in the bank that I wouldn’t do, and in return,

there is no job in the bank that I wouldn’t hesitate to ask my coworkers to do.

Take every opportunity to learn as much as you can about every aspect of banking...

Our number one priority is to take care of the customer. Then, second, is to have fun. I like a work environment where the employees are happy. This flows out to our customers. A customer can tell by talking on the phone if you have a smile on your face and enjoy working for Farmers Bank and Trust, or if you are just there for a paycheck. We have some excellent employees that have spent their entire adult career at Farmers Bank and their passion for their job and our bank shows.

Strive to be the best you can be, no matter what your job entails.

And thirdly, I want the employees to take care of their families. Let’s be honest, that is the reason that most of them are working here. So, if they need to take off a couple of hours to go to their son’s baseball game or their daughter’s school play, we let them. In return, those employees would not hesitate to stay until 10 p.m. to get a job done the next day.

What advice would you offer a new employee for a successful banking career? KA Take every opportunity to learn as much as you can about every aspect of banking. Enroll in banking classes, learn from your peers, and volunteer for committees within the bank. Strive to

May 2015 | The Arkansas Banker

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The Leadership Issue... be the best you can be, no matter what your job entails. An enthusiastic attitude always helps.

SH Three words: Respect, patience, and work. Work is not a “four letter word.” In fact, it is still admirable. The old cliché — luck is where hard work and opportunity meet — is still relevant today. With technological advances, we have a great deal of information literally at our fingertips. That can make us much more efficient in many ways, but it cannot replace the need of a strong base of knowledge. In the question, you use the word “career,” and I truly believe understanding from your peers the “why’s and how’s” of the job are very critical to build upon each day. DK I would say that you should really be aware of the growing competition in the marketplace. Everyone feels like they can be your banker: from Apple, PayPal, Google, Wal-Mart, American Express, insurance companies, Quicken, and other financial institutions. It is crazy how many companies are diversifying into offering some financial product or service. So, banks are going to have to evolve too and definitely the people running them. If

If you look around and your bank doesn’t look like the community they serve, they don’t get it.

Banks — and the people running them — have to evolve with the marketplace.

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The Arkansas Banker | May 2015

you look around and your bank doesn’t look like the community they serve, they don’t get it yet. We need young, fresh, out of school college graduates to help us not miss the next opportunity to keep banks on the cutting edge. What would happen if we hired someone say from Apple or Google? How might they change our banking paradigm? I’d also advise the employee to not be afraid to make suggestions on how they think that the bank can make things better for their customers: internally and externally.

RS Don’t be afraid to work and be

willing to do any job and every job in the bank. A strong work ethic and willingness to learn will get you far in any career that you go into. Also, be patient. You will not become bank president in one year. Set your goals high, but realize it may take years to reach your ultimate goal.

How do you develop promising leaders in your bank? KA Education is key. Experience and

involvement internally help develop leaders. We also utilize external programs such as the Southwestern Graduate School of Banking at SMU in Dallas, Texas to further develop leadership skills.

SH Personally, I think leaders have the

innate ability to develop themselves, but they still need guidance and encouragement (and sometimes some strong reminders). While there are many different leadership styles, a common thread throughout all of them is trust. As a young leader develops, I feel it is my responsibility to help them understand his/her co-workers’ need for reciprocal trust. With this, you will find that you have mentors helping you become a leader at the same time that teammates are seeking your leadership – a great recipe for successful leadership for years!

DK During my career, I have actually

had leadership groups that people applied for and were selected to participate in. I modeled this internal leadership program after the Leadership Greater Little Rock Program that I participated in 10 years ago! First, we get to know their strengths and weaknesses and everyone has to own them so we understand how to mitigate those weaknesses and enhance those strengths. I am not a patient person and I certainly recognize that, so I have learned to employ others around me that help keep me grounded. I then challenge these future leaders to be the best that they can be. I run retail for a bank and I want retail to be thought of as a vibrant, important and necessary division for the bank because it is all of those things. As a team, we must also believe that and in doing so, equip ourselves with the knowledge it takes to run a successful retail program. “If not now, then when?” I quote that a lot from Dr. Seuss’, “Oh the Places You Can Go.” There is no greater book to ask your staff to read.

RS In our Officer’s Strategic Planning

meeting each year, we identify “Rising Stars” within the bank. Those employees are cross-trained in other departments of the bank. As promotions become available, they are the first ones considered. They are also the first employees considered for Graduate School of Banking or ABA-sponsored training seminars. Also, all employees are reimbursed for up to 6 hours each semester for college courses. We have had several employees obtain a college degree or a two-year degree while working full-time with the bank.

What do you perceive as the challenges facing your community today, and what is your bank’s role in contending with these challenges? KA Warren is faced with typical

small town challenges such as attracting industry, job growth, and housing. Community banks are the lifeblood of the community. Banks fund home purchases, lend to small businesses, and play key roles in civic organizations. Warren Bank is very community minded.

SH Throughout Northwest Arkansas,

employment growth is strong, leading to expansion and further development and construction, both in the residential and commercial arenas. While economic factors are incredibly positive, we must balance our appetite for aggressive loan growth with smart underwriting. It is okay to get really excited about the advancements, but we have to stay true to the core foundations of sound banking.

DK I definitely see that our community is facing challenges in regards to the education that we are providing for our children. We know our community will only be great if we are educating and growing our future leaders and equipping them with what it takes to be successful. Obviously, Onebanc can’t fix some of the political issues, but we can be great ambassadors and supporters of our schools. One of our Board of Directors, Dr. Melissa Hawkins, is passionate about education and has presented us with opportunities to get involved whether it be the Arkansas Scholars Program, VIPS, or Teach Children to Save. We want children to understand that they can be anything that they want to be. Our contribution in their success is providing them not only with the necessary tools to do so, but with positive encouragement and support as well. We want them to take their education seriously, and to be the best them that they can be.

I have also been on the board of Big Brothers/Big Sisters since 1998 and feel that more men and women should get involved in mentoring a child. There are many options and opportunities for mentors in the program. For instance, a school based mentor’s involvement with their “little” is completely on the school campus. The mentor can help the student with their homework and help them appreciate and understand why the teachers are asking more of them. Regardless of how much or how little time you think you give to the program, every moment helps…Mentorship programs work!

While current economic factors are incredibly positive, we must balance our appetite for aggressive loan growth with smart underwriting. We have to stay true to the core foundations of sound banking.

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RS Our biggest challenge in Northeast

Arkansas is our declining population and increased poverty. It is a problem facing the entire Mississippi Delta. Our bank officers are encouraged to be leaders in the community to help develop job growth. We have officers that serve on various economic development boards. Also, our officers are involved in various public school programs to encourage students to stay in our area. We have some of the richest natural resources in the country available to us, we need to find a way to use those assets to our advantage.

501.519.0555 | 800.446.2214 foundationlifeinsurance.com

May 2015 | The Arkansas Banker

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Recruiting and Retaining

Community Bank Directors

Reprinted with permission of Community Banking Connections ©. Copyright 2014 Federal Reserve System.

by Cynthia L. Course, CPA, Director Federal Reserve Bank of San Francisco

As community banks move beyond the Great Recession and explore new opportunities for growth and profitability, their outside directors will play an increasingly important role in guiding the banks through both familiar and uncharted territories. Though it may not be as easy to recruit and retain new external community bank directors today as it has been in the past, the challenges are not insurmountable. This article is not intended to establish or describe supervisory expectations for boards of directors. Rather, it suggests some ways that community banks can think about recruiting and retaining

qualified, effective directors and potentially evaluating the effectiveness of the board through self-assessments. Many of the suggestions for ways to recruit and retain qualified directors come from a panel survey of community bankers in the western United States.

Is There an “Ideal” Director Profile?

Given the pace and scope of change in the banking environment, the board of directors collectively and each member individually play a critical role in the overall success of a community bank. This does not mean that each board candidate has to be an expert in banking to be considered for board membership.1 To the contrary, the diversity of experiences,

education, views, and opinions can make the strength of a community bank board greater than the sum of its parts. Given the importance of bank directors in overseeing the successful operation of the bank, is there an “ideal” director profile? In a word — no. As noted previously, a community bank’s board of directors can be strengthened by diversity. The Federal Reserve recently issued supervisory guidance that discusses certain personal or business experience characteristics that have proven problematic when reviewing applications for directors at de novo and troubled institutions.2 In short, individuals whose backgrounds raise questions regarding their integrity, financial responsibility,

Legal Disclaimer: The analyses and conclusions set forth in this publication are those of the authors and do not necessarily indicate concurrence by the Board of Governors, the Federal Reserve Banks, or the members of their staffs. Although we strive to make the information in this publication as accurate as possible, it is made available for educational and informational purposes only. Accordingly, for purposes of determining compliance with any legal requirement, the statements and views expressed in this publication do not constitute an interpretation of any law, rule, or regulation by the Board or by the officials or employees of the Federal Reserve System.

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Qualities of an Ideal Director or competence, or otherwise raise doubt about their ability to fulfill the responsibilities of a bank director, have been viewed unfavorably. However, for the purposes of this article, it may be more informative to consider the combination of characteristics that could indicate the likelihood that a director will be a good fit for the bank. Most likely, this combination will be a mix of personal attributes, experience and education, and a willingness and ability to dedicate the necessary time to this important role. The Qualities of an Ideal Director box illustrates some of the personal attributes, experience, education, and other qualities that are generally found in capable community bank directors. While there will likely be quite a bit of similarity in the attributes of a capable director across different community banks, the fit of each individual director should be considered within the context of the institution’s strategic direction and culture as well as the attributes, experience, and education of the directors already on or being considered for the board.

Recruiting Community Bank Directors

Given an understanding of the desired characteristics of a director, how can a community bank recruit capable directors? To ensure the best fit between a director candidate and the bank, the board’s nominating committee or similar subset of the board should assess the skills and demographic profile of its current directors, compare the skills and profiles with the bank’s strategic direction and risk profile, and identify any collective gaps. This exercise will increase the likelihood that the board will find an individual with the skills, abilities, talent, and commitment to make a difference. Importantly, it will become the “bottom line” in the discussion with the candidate about how he or she

Personal Attributes Honesty and Integrity ƒƒ Puts bank interests ahead of personal interests ƒƒ Avoids actual and perceived conflicts of interest in life, at work, and while serving on the board ƒƒ Thinks independently, rather than simply following the pack

Engagement ƒƒ Is inquisitive ƒƒ Provides constructive guidance and opinions ƒƒ Asks tough questions and expects satisfactory answers ƒƒ Voices constructive dissent when appropriate

Analytical Skills

Experience & Education Business ƒƒ Possesses financial, business, and managerial acumen ƒƒ Actively engages in the field of employment ƒƒ Has connections with other businesses and industries

Community ƒƒ Has knowledge of the communities served ƒƒ Actively engages in and with community groups

Banking

ƒƒ Draws analogies between past experiences and current challenges ƒƒ Is willing to learn and develop new skills ƒƒ Is strategically engaged, but operationally distant

ƒƒ Has a basic understanding of banking, regulatory systems, laws, and regulations ƒƒ Is willing to fill knowledge gaps

Other Qualities Has Time to... ƒƒ Learn the business ƒƒ Commit to board activities àà Prepare for and attend meetings àà Review examination and audit reports and ensure responsiveness àà Keep up with the affairs of the bank ƒƒ Pursue professional development opportunities

will be able to make a direct impact on the bank’s success. Admittedly, recruiting new bank directors may have been easier to do in the past than it is today. Historically, many business and community leaders considered it an honor to be asked to serve on their community bank’s board of directors. These candidates viewed membership on the board as evidence of their business expertise and prominence in the community, and they

Complementary Attributes ƒƒ Is independent of bank management ƒƒ Possesses a skill set that complements those of the other directors ƒƒ Has skills that support the bank’s long-range vision ƒƒ Enhances board member diversity (e.g., gender, ethnicity, industry, socioeconomic profile)

appreciated the shareholders’ vote of confidence in their skills. While serving on a board of directors is indeed an honor, many may now also weigh the benefits against the potential burden or legal liability. Today, recruiting new directors often requires the members of the nominating committee to “sell” potential director candidates on board membership. This includes having frank discussions with May 2015 | The Arkansas Banker

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Discussion Points for Director Candidates the candidate about the institution3 and how he or she can contribute to the bank’s future. This also includes discussing the benefits of serving as a bank director and giving reasonable assurances to the candidate about the board’s expectations of and commitment to each member. Community banker nominating committees can consider the points that are detailed in the Discussion Points for Director Candidates box when preparing discussion topics to use when approaching director candidates. When done effectively, the process of recruiting qualified directors will be very similar to recruiting qualified executives, but with the shareholders having the final say on the nominee.

Retaining Strong Bank Directors

Once the bank’s shareholders have elected a director to the board, the board’s focus should shift from recruiting to engagement and retention. To be most effective, efforts to engage and retain capable directors should begin the moment they are appointed and should continue throughout their tenure. Orientation. Effective community banks will develop an orientation program that is tailored to the size and complexity of the bank and the experience and knowledge of each new director. Elements of a comprehensive orientation program could include: ƒƒ Meetings with the heads of each business line to gain an understanding of the challenges and opportunities in each area ƒƒ Meetings with other board members ƒƒ Introductions to key external parties, such as bank counsel, bank auditors, and bank examiners ƒƒ Access to materials not made available during the recruitment process, such as bank examinations and audit reports ƒƒ Demonstrations of access to virtual private networks or other informationsharing tools used by the board of directors ƒƒ Access to director training materials commensurate with the director’s

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Institution Profile ƒƒ Publicly available information ƒƒ Nonpublic information, subject to constraints of federal and state law ƒƒ How the institution is providing value to its shareholders, employees, and the community

Director Profile ƒƒ How personal knowledge and talents align with the bank’s needs, today and in the future ƒƒ How candidates’ knowledge and talents will add value to the board

Benefits of Service ƒƒ ƒƒ ƒƒ ƒƒ ƒƒ

Give back to the community Meet new people in the industry and the community Continually build upon existing skills and knowledge Stay abreast of local and national issues Receive a competitive compensation package

Assurances ƒƒ Transparency in all aspects of the bank’s operations ƒƒ Timely and sufficient information ƒƒ Opportunities to use their knowledge and skills for the benefit of the bank and the board ƒƒ Respect for their opinions, encouraging constructive discussion and dissent ƒƒ Appropriate training and educational opportunities ƒƒ Respect for their time ƒƒ Appropriate compensation and benefits, including liability insurance

experience, such as the Federal Reserve System’s Bank Director’s Desktop4

directors’ input and shows appreciation for the board’s contributions.

Culture and Atmosphere. A professional and inclusive culture and atmosphere within the board and between the board members and management should enhance director retention. Directors are more likely to remain on the board when:

ƒƒ There is a clear linkage between the board’s activities and the organization’s success.

ƒƒ Management is transparent about all aspects of the bank’s operations. ƒƒ The board receives timely and sufficient information to make sound decisions. ƒƒ The board is empowered to make decisions. ƒƒ The board members are treated with respect. ƒƒ Management is respectful of the board’s time. ƒƒ Management

sincerely

seeks

the

Education and Training. Ongoing education and training are as important for community bank directors as they are for the bank’s staff and management. However, there is a delicate balance between maintaining respect for the directors’ time commitment and ensuring that they have the knowledge necessary to make informed decisions. While directors are expected to bring to the boardroom the views and perspectives gained from their personal and professional experiences, they must also be able to put those views in the context of the bank and the environment in which it operates.

Each director should possess knowledge of the bank and the banking industry that is appropriate for his or her tenure. In addition, each board member should be expected to complete continuing education and training to build upon and maintain the skills necessary to be an effective community bank director. Board members may find that choosing from a variety of educational opportunities, such as the following, helps them balance time constraints against information needs: ƒƒ Targeted training or education sessions as a part of board meetings ƒƒ Annual director retreats that focus on training as well as strategic planning and bank operations ƒƒ Subscriptions to print or electronic periodicals and newsletters that discuss current and emerging community bank issues ƒƒ Attendance at banker association, trade group, or regulatory conferences and seminars, with formal debriefings to the other directors at board meetings Recognition. Recognizing director contributions, whether through words and actions or through monetary compensation, is also a significant element in director retention. Recognition and compensation can be tailored to each director’s contributions; however, they generally will not be sufficient to retain capable directors without an atmosphere and culture that is conducive to effective board operations and sufficient education and training to ensure that each director is well informed.

Evaluating Board Performance

To remain strong and independent, community bank boards of directors may find value in periodically evaluating their effectiveness and identifying opportunities for improvement and growth. Community bank boards may find that self-assessments are effective at highlighting emerging governance issues.5 For example, a board self-assessment at the highest level could ask focused questions about the board’s primary responsibilities. Subsequent questions could drill down into the board members’ perceptions around the bank’s mission and purpose,

the effectiveness of strategic planning, the sufficiency of succession planning, the appropriateness of the board’s monitoring and control activities, and the involvement of the bank in its community. Selfassessments can also provide valuable insight into the functioning of the board through questions that address ethics, the interpersonal relationships among board members, the selection and training of directors, the effectiveness of dialogue at board meetings, the engagement and contribution of individual directors, and the organization of the board and its committees. Completing the circle, the periodic use of self-assessments may also help a community bank’s nominating committee recruit new directors. Candidates likely

will be more interested in joining a company that seeks out and acts upon holistic director feedback than a company in which director feedback is sought only on very narrow and specific decisions.

Concluding Thoughts

Banks play an important role in the economic lives of their communities, and community bank directors have a great opportunity to influence and help shape their local economies. For a community bank, recruiting and retaining qualified and effective directors is as important as recruiting and training an effective management team. In the words of a former board chairman and member, “At the end of the day there’s nothing like a strong board that operates independently, asks good questions, and does its homework.”6

Although board candidates are not required to have expertise in banking when they are appointed to the board, they are expected to quickly become familiar with the basics of banking in order to provide effective oversight of management and to make informed decisions. In addition, a bank that is a public company subject to Securities and Exchange Commission oversight is required to have an audit committee financial expert on its board of directors and audit committee. 1

See Supervision and Regulation (SR) letter 14-2/Consumer Affairs (CA) letter 14-1, “Enhancing Transparency in the Federal Reserve’s Applications Process,” available at www.federalreserve.gov/bankinforeg/srletters/ sr1402.htm. 2

Federal and/or state laws may limit the nature of information that can be shared with director candidates. For example, banks are prohibited by law from disclosing their bank and holding company supervisory ratings and other nonpublic supervisory information to nonrelated third parties without written permission from the appropriate federal banking agency. See “Confidential Supervisory Information Disclosure Rules” in the First Quarter 2013 issue of Community Banking Connections, available at www. cbcfrs.org/articles/2013/Q1/Confidential-Supervisory-Information-Disclosure-Rules. 3

4

See www.bankdirectorsdesktop.org/.

Recommending a specific self-assessment process is beyond the scope of this article, and the Federal Reserve does not endorse any specific self-assessment tools or templates. However, a variety of resources for community bank boards of directors interested in developing self-assessments is available through trade groups such as the Bank Director website and magazine at www.bankdirector.com/. 5

Comment by Lew Platt, former chairman, board member, and chief executive of Hewlett-Packard, while serving as a Boeing board member, as referenced in Knowledge@Wharton, “Re-Examining the Role of the Chairman of the Board,” December 18, 2002, available at http://ow.ly/Cghop. 6

May 2015 | The Arkansas Banker

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Construction Management:

Making Sure You Stay ‘Right-Side Up’

by Joe Ehrhardt & Camille Phillips 3E Software, Inc., Fayetteville

Construction activity is certainly picking up after the economic malaise that most of the country has experienced over the last several years. It is a welcome sight to see homes being built, to spy construction booms reaching into the sky in the busy business hubs in Arkansas, and to read about new businesses finding their foothold in our cities and towns around the state. While a welcome sight, these monuments of creation and innovation that are testaments to the endurance of our state and our citizens should also stand as reminders for us to heed the past.

What Dreams May Come

While being part of a construction project that provides a new home for a family or a new retail center for a community is a truly rewarding experience, the degree of due diligence necessary to ensure that the project is viable and remains ‘right-side up’ through each phase of construction is a huge undertaking. From analyzing market conditions to evaluating the capacity of the borrower — from determining the feasibility of the project to knowing construction pitfalls — there is much that precedes the actual construction draw and construction

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The Arkansas Banker | May 2015

project management activities. Bank policies that provide clear direction in the underwriting phase, combined with regulatory guidance on the subject matter, will provide a good roadmap to successfully navigate the construction draw process. Market Conditions There are few lending activities that have the level of sensitivity to market conditions that construction lending does. A comprehensive analysis of the market is a critical part of underwriting construction loans. The market analysis should consider: ƒƒ The demand for the project, ƒƒ The supply of competing properties and, ƒƒ The trend in rental rates. If actual rental rates are lower than those projected, the performance of the project from both an incomegenerating perspective and a collateral valuation perspective could be at risk. Evaluating the Borrower Recognizing that the value of the construction project is not fully realized until the project is complete, assessing the borrower’s ability to finish the project in full – on time, within budget, according to the plans approved – is fundamental. Determining the borrower’s capacity for

the project should include: ƒƒ Analyzing the borrower’s financial condition, ƒƒ Analyzing the borrower’s reputation and experience and, ƒƒ Analyzing the ability and capacity of the contractors and key subcontractors to be used on the job. Project Feasibility Determining the feasibility of a project — ultimately will it be economically successful — requires a range of analysis and documentation review. A feasibility analysis should generally be included in an appraisal of the project. The bank can also perform its own assessment. ƒƒ The most important documents needed to assess project feasibility include a detailed construction budget and the project pro forma. ƒƒ The bank’s policies should address the different types of construction and development opportunities that the bank will undertake and establish lending and management guidelines governing those types. Construction Issues Repayment of construction loans is primarily dependent upon the project’s successful completion. That said there

are issues that can come up and that can weaken the bank’s position if the project is not closely managed. They can include: ƒƒ Construction draws diverted from the project, ƒƒ Material men lien filings, ƒƒ Supplier failures, ƒƒ Contractor/subcontractor inexperience, negligence or financial failure, ƒƒ Unexpected cost overruns and, ƒƒ Errors or oversights made during the administration of the loan. Ongoing construction monitoring that includes tracking disbursement requests and ensuring that those requests are supported by the progress of the project is critical for project evaluation. By following sound underwriting guidelines and understanding the natural pitfalls of funding construction opportunities, the bank can know that the project is viable, the borrower is sound, and that they are prepared to start the draw request/inspection/disbursement process.

Ready, Set, Draw

Effective construction management will be influenced by ƒƒ How a bank identifies projects subject to the draw request/funding process, ƒƒ How a bank ensures timely inspection of construction projects and, ƒƒ How a bank manages the progress of the project from the first draw request through project completion. Effective construction management can and does require much time and effort regardless of the number of projects under management. Having and leveraging effective management information systems that address the “how to’s” is a critical first step. By their nature, construction loans are typically disbursed over a defined period of time with the “draw” process driving the funding of the project. The funding activities generally occur at either preset stages of completion or in accordance with approval protocols that may be set forth in a construction loan agreement. Once one of the construction stages is completed and the specified draw time comes, the contractor will submit a request to the lender to draw down funds on the construction line of credit. Because the draw requests generally come with a need for immediate approval, the request for

funds spurs all kinds of activities at the bank; this is where the bank’s procedures and internal controls kick into high gear. The draw request is submitted — now what? Time to initiate the bank’s draw procedures and gather information on the project ƒƒ Is there a current 3rd party inspection of the subject property/project? The currency of an inspection is up to the bank to determine, but, as an example, most routine residential construction loans are generally subject to an inspection process every two weeks or once a month. Further, the bank will have informed their borrower of this review schedule and tied the draw process to this timeline. ƒƒ If there is a current inspection, will funding the request align with the percentage of completion of the project? ƒƒ If funding the request creates an imbalance in the % complete to % drawn, is there an internal bank process in place to seek approval of the overfunded position? ƒƒ If there is not a current inspection or if funding the request will create an over-funded position, is a new inspection warranted? àà If a new inspection is warranted, then the draw request will be delayed until the bank can (quickly) arrange to have the property reinspected. Being able to quickly know the status of a project and respond appropriately to each of these draw-related component parts is important in not only being able to effectively manage the inherent risks in construction lending but also in demonstrating a bank’s clear expertise in this area. A well-thought out process, coupled with clean execution of that process, makes for good lending and good customer service.

The Sum of the Parts

With little effort, a bank should be able to see the vital metrics of its construction portfolio laid out in an easily digestible way. At-a-glance, the bank should be able to see ƒƒ Bank, Region, Market, Branch and Officer totals under management, ƒƒ The type and committed amount of each construction project, ƒƒ The status of each project including

the calculated percent complete to percent funded and the last inspection date, ƒƒ All pending draw requests, ƒƒ The amount of each project left to fund, ƒƒ Whether the project has closed or remains open, ƒƒ The location of the construction project. The bank should also be able to easily ƒƒ Engage its 3rd party inspector, ƒƒ Receive digital delivery of inspection reports, ƒƒ Tie inspection reports to projects and, ƒƒ Move all documentation to the banks filing system (whether maintained in hard copy or in imaging systems) While all lending activities have an embedded degree of risk, construction lending is an activity that requires the bank to be almost hyper-vigilant in its due diligence and risk management efforts. Good project underwriting and good management practices coupled with effective systems that can identify the bank’s construction projects, track performance, monitor compliance, maintain data integrity, ensure accountability to established protocols throughout the funding process, and report on individual or total portfolio performance provide the pillars of a good construction lending program.

About the Author

Joe Ehrhardt and Camille Phillips are with Fayetteville-based 3E Software, Inc., a company specializing lending and credit management solutions, through its solution Teslar. May 2015 | The Arkansas Banker

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Agri Lending Conference The 2015 Agricultural Lending Conference was held in Little Rock April 8-9 with 50+ bankers from across the state in attendance. The event kicked off on Wednesday with commentary from Arkansas Secretary of Agriculture Wes Ward. Dr. David Kohl, Professor Emeritus at Virginia Tech University, continued the day with sessions on emerging trends in agriculture and new insights on credit analysis. Thursday’s sessions opened with Farmer Mac Economist Jackson Takach, who spoke on the changing landscape in today’s ag real estate secondary market. New to this year’s event was a round-table discussion on the best practices in agricultural lending. The group held a successful show-and-tell of current operational challenges, loan processes and procedures, and documentation within their respective banks. “The wrap up session was great just to see how other lenders operate,” commented Gail Broadway of Farmers & Merchants Bank, Stuttgart.

“ ”

Bill Elliott, The First National Bank of Wynne, Harrisburg; and Randy Scott, Farmers Bank & Trust Company, Blytheville, at the Agricultural Lending Conference in Little Rock.

Next year’s Agricultural Lending Conference is tentatively scheduled for March 2016.

I enjoyed the conference and felt it was pertinent... I seem to gain something each year I attend.

Hank Pearce First Community Bank Batesville

Russell Altom, Relyance Bank, Pine Bluff, moderated the roundtable discussion regarding best practices in ag lending.

Click here to see more photos from the 2015 Agricultural Lending Conference!

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The Arkansas Banker | May 2015

Dr. David Kohl, Professor Emeritus New Arkansas Secretary of at Virginia Tech, gave an update on Agriculture Wes Ward addressed emerging trends in agriculture. conference attendees.

Jackson Takach, Economist, Farmer Mac gave a detailed analysis of the ag real estate secondary market.

Aaron Gamewell, ABA EVP/COO, made announcements at the beginning of the Agri Lending Conference.

PROFESSIONAL DEVELOPMENT Supervisor Bootcamp 2015

Bank Directors Workshop Bank Directors gathered in Little Rock on April 28 for “Managing for Technology: Directors & the Bank of the Future,” taught by Trent Fleming. The seminar focused on the need to educate bank directors on current technologies, and the role directors should play in strategic planning where technology is concerned.

Back by popular demand, Honey Shelton was in Little Rock April 21-22 to lead Supervisor Bootcamp 2015. This event honed in on the attributes of a successful supervisor, and gave attendees two days of hands-on training through dynamic case studies. Curriculum included exploring coaching and leadership skills, planning for success, and discovering best practices for supervisors.

ABA Commercial Lending School

Click here to see more photos from our April Professional Development Events! The 2015 Commercial Lending School was held April 13-17 in Little Rock with instructors John Cochran and Ron Rushing. Graduates of the school include: Marshall Butler, Centennial Bank, Cabot; Brock Ferguson, Centennial Bank, Jonesboro; Jon Allen, Chambers Bank, Fayetteville; Joyce Cummins, First National Bank of Crossett; Kelley Solomon, First National Bank of Crossett; Jeremy Collins, First Security Bank, Little Rock; Randy Livingston, First Security Bank, Mountain Home; John McPike, First Security Bank, Jonesboro; Chad Merriman, First Security Bank, Mountain Home; Gordon Sasser, Legacy National Bank, Springdale; Jeremy Orman, Peoples Bank, Sheridan; Shane Hampton, Signature Bank of Arkansas, Fayetteville; Sarah Johnson, Signature Bank of Arkansas, Fayetteville; Amber Nunnelee, Signature Bank of Arkansas, Bentonville; Leslie Carroll, Simmons Bank, El Dorado; David Johnson, Southern Bancorp, Trumann; Victoria Cansler, The Bank of Augusta; Gail Broadway, The Farmers & Merchants Bank, Stuttgart; Erik Hawkins, The Farmers & Merchants Bank, Stuttgart; and Krista Brown, The Malvern National Bank, Sheridan.

May 2015 | The Arkansas Banker

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COMMUNITY NEWS Arvest Bank, Naturals Renew Stadium Naming Rights Deal Extends ‘Arvest Ballpark’ Name Through 2027 The Northwest Arkansas Naturals and Arvest Bank have reached an agreement to extend the bank’s naming rights to the Springdale-based Arvest Ballpark through 2027. The agreement extends the naming rights for a second 10-year period. The first naming rights agreement was established in 2007, the construction date for the stadium and the year the Northwest Arkansas Naturals were established. “Arvest Ballpark is a magnificent home for the Northwest Arkansas Naturals and our partnership with Arvest Bank has been beneficial for our organization and for the community as a whole,” said Justin Cole, General Manager for the Northwest Arkansas Naturals. “Given Arvest’s longstanding dedication to the community, we believed it was a perfect partner in 2007. We believe that even more now.” “Between the area’s outstanding support of our team and the numerous special events and fundraising activities hosted at the stadium, almost 2.5 million people have enjoyed the hospitality of Arvest Ballpark since it opened to the public for our first season in 2008,” he said. “Arvest Bank has always been communityfocused and we couldn’t be happier with our role in supporting the Northwest Arkansas Naturals because of the important role they now play in the communities of Northwest Arkansas,” said Lisa Ray, President for Arvest Bank in Springdale. “We have been proud to have our name on this beautiful stadium since it opened and we are thrilled to know that this partnership will continue far into the future. Arvest Ballpark has become a community gathering place for our friends and family to enjoy baseball,

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The Arkansas Banker | May 2015

Lisa Ray, President and CEO for Arvest Bank in Springdale, and Justin Cole, General Manager for the Northwest Arkansas Naturals, (center) display custom Northwest Arkansas Naturals jerseys that reflect the extended date of the Arvest Ballpark naming rights announced April 13 at the ballpark in Springdale

concerts, activities and events — exactly what we envisioned in 2007.” “The support of the Northwest Arkansas community and the partnership with Arvest Bank has been crucial to the overall success of the ballpark,” Bob Rich, chairman of Rich Products Corporation and Rich Baseball Operations. “We’re proud of what the ballpark has been able to provide the community and are thrilled to be extending our tremendous partnership with Arvest Bank into the future.” The charitable events hosted at Arvest Ballpark have included the American Diabetes Association Tour de Cure, American Heart Association Heartwalk, Walk to Cure Alzheimers, St. Jude Give Thanks Event and the March of Dimes’ March for Babies.

The Northwest Arkansas Naturals have recorded 242 home wins at Arvest Ballpark through 2014 and won the 2010 Texas League Championship. The club was named the Texas League Organization of the Year and the Double-A Freitas Award winner in 2012. Arvest Ballpark hosted the Texas League All-Star Game in 2013. Arvest Ballpark was named the 2008 Ballpark of the Year by baseballparks.com. The Northwest Arkansas Naturals are the Double-A Texas League Affiliate of the Kansas City Royals. The Naturals play at state-of-the-art Arvest Ballpark in Springdale, Ark. For more information including statistics, ticket options, and more, please visit NWANaturals.com, and follow us on Twitter @NWANaturals and Facebook.com/Naturals.

Arkansas Banks ‘Teach Children to Save’

ry School

Avondale Elementa Marion

More than 40 Arkansas banks and branches partnered with local schools to celebrate Teach Children To Save Day with savings education in April. As part of the program, Arkansas youths explored a number of financial subjects

Thank You to these Arkansas Banks for Teaching Children to Save!

Batesville

ƒƒ Merchants & Planters Bank ƒƒ Southern Bank

Brinkley

ƒƒ BancorpSouth Bank

Cherry Valley

ƒƒ Bear State Bank, NA

Des Arc

ƒƒ Farmers & Merchants Bank ƒƒ Merchants & Planters Bank

Little Rock

ƒƒ First Federal Bank ƒƒ One Bank & Trust NA ƒƒ Simmons Bank

Marianna

ƒƒ Farmers & Merchants Bank

Marion

ƒƒ Fidelity National Bank

McCrory

ƒƒ Merchants & Planters Bank

DeWitt

Morrilton

Earle

Mountain Home

Forrest City

Newark

Fort Smith

Newport

Greenwood

Osceola

Hacket

Paragould

Harrisburg

Perryville

Harrison

Pocahontas

Hazen

Searcy

ƒƒ Farmers & Merchants Bank ƒƒ Fidelity National Bank ƒƒ Bear State Bank, NA ƒƒ Arvest Bank ƒƒ Arvest Bank ƒƒ Arvest Bank ƒƒ Bear State Bank, NA ƒƒ First Federal Bank ƒƒ BancorpSouth Bank ƒƒ Farmers & Merchants Bank

Horseshoe Bend

ƒƒ BancorpSouth Bank

Hot Springs

ƒƒ BancorpSouth Bank

Jonesboro

ƒƒ BancorpSouth Bank ƒƒ Southern Bank

ƒƒ Farmers & Merchants Bank ƒƒ Integrity First Bank, NA ƒƒ Merchants & Planters Bank ƒƒ Merchants & Planters Bank ƒƒ BancorpSouth Bank

including the difference between needs and wants, how to identify expenses, and ways to cut spending. Established by the American Bankers Association in 1997, Teach Children to Save has reached 7.2 million young people through the commitment of 210,000 banker volunteers. Murphy Smith of Fidelity National Bank says that financial education programs go beyond just “teaching children to save.” Over the years, Fidelity National Bank’s programming has included an array of career and financial planning information for students from kindergarten to college. The American Bankers Association provides financial education initiatives and resources that help bankers make their communities better. The association’s signature initiatives, Teach Children to Save and Get Smart About Credit, bring bankers and students together to increase financial education.

L.R. Jackson Elemen tary School West Memphis

How will your compliance and BSA program measure up at the next exam?

ƒƒ Southern Bank ƒƒ Farmers & Merchants Bank ƒƒ Integrity First Bank, NA ƒƒ Southern Bank

Stuttgart

ƒƒ Farmers & Merchants Bank

Tuckerman

Bankers Assurance assists banks all across Arkansas with their compliance and BSA programs. Regulators want banks to be proactive and identify potential weaknesses before they arrive. Our staff knows your area and your regulators. We are committed and support the Arkansas bankers. We are here to help and we are only a call away!

ƒƒ Merchants & Planters Bank

West Memphis

ƒƒ Fidelity National Bank

Wilson

ƒƒ BancorpSouth Bank

Wynne

ƒƒ Bear State Bank, NA

Lending/Deposit Compliance | Fair Lending | BSA CRA | HMDA | Compliance Training

www.bankersassurance.net

(501) 410-3198

May 2015 | The Arkansas Banker

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MEMBER NEWS

Citizens Bank Earns Arkansas ‘HR Best Practice Award’ Citizens Bank was named recipient of the “Human Resources Best Practice Award” at the 2015 Arkansas SHRM HR Conference & Expo, held April 10 at the Hot Springs Convention Center. The HR Best Practice Award is awarded each year to a company that demonstrates the importance and positive impact that strong HR practices can have within an organization. The purpose of the award is to recognize an organization that aligns successful HR programs and practices with the company’s business objectives. Citizens Bank was recognized for a series of programs that advance the professionalism and effectiveness of employees and also support the overall mission of Citizens Bank. Those programs included an organizational leadership development campaign called EDGE (Education, Development, Guidance and Experience); a new employee recognition program known as Team Citizens; and a comprehensive plan for the bank’s observance of Employee Appreciation Week. “The Citizens Bank HR team deserves this acknowledgment for their creativity in the development of meaningful Human

Resources policies and programs,” said Phil Baldwin, Bank President and Chief Executive Officer. “We appreciate how they consistently demonstrate ‘Best Practice’ principles that elevate both our employees and our bank.” The Citizens Bank Human Resources Department is composed of Charla Foster, Senior Vice President, Human Resources Director; Tracy McClurg, HR Administrator; and Sandy Starnes, Training Officer. “In the past two years, Citizens Bank has strategically developed and expanded its Human Resource functions,” Foster said. “While process changes in the areas of benefits and payroll have occurred, our efforts have centered on the implementation of processes directly related to our employees. From the implementation of an online application to the development of a training program, we are intently creating a bank culture that encourages employee growth, development, and recognition.”

Showing off the 2015 Arkansas HR Best Practice Award are Citizens Bank employees Sandy Starnes (seated), Tracy McClurg (standing left) and Charla Foster.

The Arkansas SHRM State Council is dedicated to promoting and serving the Human Resource profession in Arkansas. It is affiliated with the Society for Human

Resource Management (SHRM), which has more than 250,000 members and is the global voice for the human resources profession.

Simmons First National Corp. to Acquire Ozark Trust & Investment Corp. Simmons First National Corporation has announced that it has entered into a definitive agreement and plan of merger with Ozark Trust and Investment Corporation, headquartered in Springfield, Mo., including its wholly-owned nondepository trust subsidiary Trust Company of the Ozarks.

trust services, IRA rollovers or transfers, successor trustee services, personal representatives and custodial services. As Simmons’ first acquisition of a feeonly financial firm, TCO provides a new wealth management capability that can be leveraged across the Company’s entire geographic footprint.

According to the terms of the Agreement, Simmons First National Corporation will acquire all of the outstanding common stock of OTIC in a cash and stock transaction valued at approximately $20.7 million, subject to potential adjustments. The transaction is expected to be immediately accretive to the Company’s diluted core earnings per common share.

“Wealth management is an important growth business for us, and we are excited about this strategic opportunity,” said George A. Makris, Jr., Chairman and Chief Executive Officer of Simmons. “This acquisition increases our total assets under management by more than $1 billion, enhances our existing wealth management product offering, provides us with a talented and creative team of wealth management professionals who have built and grown a successful business and expands our presence in the important Southwest

Founded in 1998, TCO provides a wide range of financial services for its clients including investment management,

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The Arkansas Banker | May 2015

Missouri market. In addition, we view this transaction as a mutually beneficial one, as the talented team at TCO now has the entire portfolio of Simmons’ products and services to provide to its more than 1,300 clients.” “We are proud to welcome the associates of TCO to the Simmons Family,” said Marty D. Casteel, Chairman, President and Chief Executive Officer of Simmons First National Bank. “TCO is one of the region’s strongest and soundest trust and investment management firms. The skilled TCO staff has more than 200 combined years of experience in trust and investment planning, administration and portfolio management. Together, we expect to continue the exceptional growth and quality customer service for which TCO is known and further establish Simmons as a premier community banking organization.”

BANKER NEWS & MOVES Citizens Bank Expands Market in Hot Springs Longtime Hot Springs resident David Wooldridge leads a team of local banking professionals who have helped open the first Citizens Bank branch near the Hot Springs Mall and are already opening a second branch on Airport Road. “We have had a great relationship with our customers in Hot Springs for several years and now we have two new addresses – 4429 Central Avenue and 150 Woolridge Airport Road,” Wooldridge said. “Citizens Bank has helped build Arkansas for more than 60 years since it was founded in Batesville in 1953 to serve the financial needs of middle income families and small businesses.” “We intend to grow Citizens Bank into Hot Springs’ leading community bank,” said Phil Baldwin, Bank President and Chief Executive Officer. “We plan to take banking back to where it used to be before all the mergers and acquisitions. These mergers may have grown shareholder value for the major banks, but it has come at the expense of customer service.” “As Citizens Bank expands into Hot Springs, much of our focus will be on providing the level of service that our customers want and deserve,” Wooldridge said. “From mortgage lending to trust services, our goal is for Citizens Bank to be the area’s first choice when it comes to anyone’s financial needs.” Wooldridge, who serves as Hot Springs Market President for Citizens Bank, has an extensive Arkansas banking and financial background, holding executive positions at such industry leaders as Merrill Lynch and Stephens Inc. For the past six years, he worked with Southern Bancorp in the Hot Springs area. Wooldridge is supported by a highly qualified staff of Hot Springs professionals, including Senior Vice President Brad Taylor; Vice Presidents Blake Cansler and Kristi Powal; Airport Road Retail Manager Mickey Miller; Loan Assistants Andrea Murry, Annette Shepherd and Lalainya Shipp; Customer Service Representatives / Tellers Whitney Graham and Ashley Yancey; and Teller Jess Milam. A native of Magnet Cove, Wooldridge earned a bachelor’s degree in Business Administration from Henderson State University in Arkadelphia. A lifelong resident of the Hot Springs area, he has been married for 24 years to Dawn Wooldridge, who is a speech therapist for Arkansas Therapy Group. The couple has two children, daughter Bailey and son Blake, both of whom attend Lakeside High School. Wooldridge has served as President of the Board of the Hot Springs Country Club. He and his family are members of the First United Methodist Church.

REX NELSON JOINS SIMMONS FIRST NATIONAL CORPORATION AS DIRECTOR OF CORPORATE COMMUNICATIONS

Previous president of Arkansas’ Independent Colleges and Universities, Rex Nelson, has joined Simmons First National Corporation in the new role of Director of Corporate Communications. “Simmons is a vital and growing company; and with that growth comes an added challenge and responsibility to communicate well to our customers, associates, communities, and investors. Rex’s experiences in government, journalism, and public affairs give him a unique skill set that will create a great foundation for taking our communications to the next level,” stated George A. Makris, Jr., Chairman and Chief Executive Officer of Simmons First National Corporation. Nelson’s opportunities, as Simmons’ Director of Corporate Communications, include leadership and collaboration in the areas of external communications, corporate communications, public relations, and employee and executive communications. Nelson will also serve as the company’s liaison with the Simmons First Foundation, whose purpose is to identify and financially support taxexempt, non-profit entities within Simmons Bank’s geographic footprint

that are developing or expanding initiatives benefiting youth in the areas of education or healthcare. “Within every growing corporation, effective and cohesive communications is an area deserving of great attention,” stated Makris. “As Simmons continues to expand its footprint, Rex’s relevant expertise will prove invaluable in effectively telling our Simmons story.” Nelson has served as president of AICU since January of 2011. He previously served as the senior vice president for government relations and public outreach at The Communications Group, a Little Rock, Arkansas based marketing, advertising and public relations firm. Prior to joining the firm, Nelson served at senior levels of state and federal governments. Nelson is the board chairman of Connect Arkansas, the chairman of the Political Animals Club of Little Rock, the vice president of the board of the Arkansas Travelers Baseball Club Inc., the vice president of the Little Rock Touchdown Club and a member of the Arkansas Humanities Council, the Arkansas Natural and Cultural Resources Council and the advisory board of the Pryor Center for Arkansas Oral and Visual History. In 2005, Nelson was named as one of two appointees of President George W. Bush to the Delta Regional Authority, a regional planning and economic development agency. Nelson is a summa cum laude graduate of Ouachita Baptist University. He and his wife, Melissa, have two sons.

May 2015 | The Arkansas Banker

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BANKER NEWS & MOVES CRAWFORD PROMOTED TO CEO OF FIRST NATIONAL BANK OF CROSSETT

The First National Bank of Crossett and Ashley Bancstock Company Board of Directors announce the promotion of G. Gene Crawford II, to President and Chief Executive Officer of First National Bank of Crossett. In 2012, Mr. Crawford was promoted to President and Chief Financial Officer. Crawford, who has thirty years of banking experience, served as the Executive Vice President and Chief Financial Officer after joining First National Bank of Crossett in

2003. Crawford graduated from Batesville High School and was an honor graduate of Lyon College in Batesville. He completed the National Trust School and National Graduate Trust School at Northwestern University and the Certified Employee Benefit Specialist Program of the Wharton School of Business at the University of Pennsylvania. Additionally, he has completed the Arkansas Bankers Association Lending School and other training programs in financial accounting and asset-liability management. Crawford is a member and past president of the Crossett Rotary Club where he was named “2007 Rotarian of the Year.” He serves as commissioner for the Crossett Water

Commission. He has been a volunteer with the Crossett Food Pantry and has served as past president. He is a past board member for the United Fund of Ashley County, Ashley County Skilled Workforce, Crossett Education Alliance and the Hamburg Chamber of Commerce. He is a past recipient of the Hamburg Chamber of Commerce “Man of the Year” award. Crawford and his wife Terri have two sons, Will and Sam. They attend St. Mark’s Episcopal Church, and Crawford is an ordained deacon serving Episcopal Churches in Lake Village and McGehee. Max Pope, Chairman of the Board of First National Bank of Crossett commented: “Gene’s experience as Chief Financial Officer is invaluable in dealing with the complexities of today’s banking. Gene brings a wealth of knowledge encompassing all facets of banking. The Board is confident in Gene’s ability and we are pleased to expand his position to Chief Executive Officer of the bank. We are excited about the future of First National Bank under his leadership.”

BRANNON PROMOTED AT FIRST NATIONAL BANK OF CROSSETT

Choose the right referral partner, and create positive growth for your bank and your community. Call us today. 800.216.7237

*May 20-Year Rate Arkansas Capital Corporation Group is an equal opportunity provider.

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The Arkansas Banker | May 2015

Gene Crawford, President & CEO of First National Bank of Crossett, announces the promotion of W. Gary Brannon to serve as the

bank’s Executive Vice President and Chief Lending Officer. In addition to his promotion, Mr. Brannon was elected to serve on the FNBC Board of Directors. “Gary has thirty years of banking experience in Northeast Louisiana. His knowledge and expertise in commercial, real estate, and consumer lending will be greatly appreciated in our market area. He understands what our customers are looking for in a bank and a loan officer.“ Gary joined FNBC in August 2013 as a Lending Consultant. A native of Lynn, Arkansas, he attended college at Williams Baptist College, Arkansas State University, and the Graduate School of Banking at Louisiana State University. He has previously served as president of three banks in Northeast Louisiana. Gary is an avid outdoorsman and tells a great story. Gary and his wife, Judy have four children, ten grandchildren and four great-grandchildren and are proud to be part of FNBC.

MATT SMITH NAMED ARVEST BANK PRESIDENT IN MADISON COUNTY

Arvest Bank is proud to announce that Matt Smith has been named Community Bank President of Arvest Bank in Madison County. Smith joined Arvest Bank while attending college

Continued on page 31

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Foundation Life Insurance Company

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Office Depot

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CLASSIFIEDS MODULAR BANK BUILDINGS - Looking to branch? Disaster planning? Need a temporary while remodeling? Immediately available, 14’x66’ or 24’x66’ with bank equipment and drive thru. North American Buildings - 888-800-8866. www.NorthAmericanBuildings.com. FT COMPLIANCE OFFICER: Eagle Bank and Trust Company in Little Rock, AR, is seeking a FT Compliance Officer. Competitive Pay and Benefits Package, FDIC Insured. This is a full time position responsible for the compliance of the Bank. Develops, administers and monitors programs for compliance with laws, regulations and rules governing operations and product offerings. Informs

and educates appropriate personnel and Senior Management. Maintains and updates appropriate risk assessments, policies and procedures throughout the bank. Acts as a Bank’s CRA Officer and BSA Officer Eagle Bank and Trust is an equal opportunity employer. All qualified applicants will receive consideration for employment without regard to race, religion, color, national origin, sex (including sexual orientation and gender identity), age, status as a protected veteran, among other things, or status as a qualified individual with a disability. To find out more about the job description and complete an application please go to: www.eaglebank.com.

BANKER NEWS & MOVES ADVERTISEMENTS For more information on advertising in The Arkansas Banker, please contact Traci Logsdon, Director of Communications, via email at [email protected], or by phone at 501.978.3603.

The Arkansas

Banker 1220 West Third Street Little Rock, AR 72201 Phone 501.376.3741 Fax 501.376.9243 www.arkbankers.org

Continued from page 30

in 2005, and has since gained a broad range of banking experience, including teller, senior teller, deposit counselor, financial services representative, assistant branch manager, and most recently, commercial and agriculture lender in Madison County. “I am delighted that Matt Smith was selected by our local board and executives to serve as Arvest’s president in Madison County,” said Lisa Ray, Arvest Bank President and CEO in Springdale. “Matt’s leadership skills, work ethic, personal integrity, broad knowledge of banking, and experience working with lumber, poultry and cattle make him an ideal fit for president of Arvest Bank in Madison County.” Smith said, “Madison County has always been my home, and finding ways to help this community to grow and prosper is what I enjoy doing most. I am proud and happy to work with so many friendly and helpful Arvest bankers. With

our newly remodeled branch downtown and the branch we are building on the highway by Wal-Mart, not only do we have the most helpful bankers, but we will have the longest hours, the most convenient locations and the widest variety of personal and business services to meet the needs of the people who live and work in Madison County.” He is an honors graduate of Huntsville High School and studied business marketing at Northwest Arkansas Community College in Bentonville. Smith is active in the Lions Club and the Huntsville Chamber of Commerce. He is also a frequent volunteer at bank community cookouts, the annual teacher appreciation events and the annual Madison County Relay for Life. Smith and his wife, Cassie, live in Huntsville and have two sons, Braxton and Beckett. The family attends Mossville United Baptist Church.

May 2015 | The Arkansas Banker

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The Arkansas Banker | May 2015