The Arkansas Banker Spring 2023

SPRING 2023

Bank Commissioner MONITORING NATIONAL TURMOIL pg 26

Appraiser Shortage

HURTING RURAL COMMUNITIES pg 40

Legislative Leaders A MIX OF OLD AND NEW pg 28

An Eye Economy ON THE

HUGH MCDONALD IS ARKANSAS’ NEW SECRETARY OF COMMERCE

THE ARKANSAS BANKER

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2 • SPRING 2023

A PUBLICATION OF THE ARKANSAS BANKERS ASSOCIATION

CONTENTS

SPRING 2023 VOLUME CVI, NO. 1

42 40

ARKANSAS BANKERS ASSOCIATION STAFF

President/CEO Lorrie Trogden VP/Controller Carla Brinkley VP/Professional Development Kami T. Coleman

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Office Manager Peggy Cecere Administrative Support Specialist Abi Johnson

02 President’s Message 06 Professional Development

EDITORIAL STAFF

Editor Roby Brock Creative Director Ashlee Nobel

Lee Lee Arts + Design

Contributing Writers

Duncan Bellingrath, George Jared, Susannah Marshall, Rob Nichols, and Randy Scott

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

Periodical postage paid at Little Rock, AR. Postmaster: Send address changes to Arkansas Bankers Association, 1220 West Third Street, Little Rock, AR 72201. Subscription to The Arkansas Banker magazine is included in the membership fees to the Arkansas Bankers Association. Cover price is $5.95 each. Annual subscription rates are $40.00 for members and $60.00 for non-members.

Federal tax law prohibits the deduction of lobbying expenses for federal incomes tax purposes. Organizations like ABA, which assess member dues, are required by law to notify their members of the portion of their dues attributable to lobbing/and therefore non-deductible on your federal tax return. For the year 2022, it is estimated that 9.08% of your dues will be attributable to lobbing as defined by the IRS. Contributions to ABA are not charitable contributions, however, they may be deductible as a legitimate business expense.

Columns

04 Chairman’s Column 08 Washington Update 10 Commissioner's Column

Features 28 The 94th

General Assembly Leaders and legislation on display at the state capitol.

COVER STORY

22 Unretired!

Arkansas Commerce Secretary Hugh McDonald takes new role.

Departments BANKER Q&As

12 The Millennial Minute: Chance Robbins

16 Five Minutes With ...

Chris Johnson

INDUSTRY UPDATES

14 HB 1307 - ESG Measure

After several amendments the controversial bill has been signed.

18 Small Business Credit Initiative Arkansas receives funding from U.S. Treasury to expand small business.

20 Committee Assignments

Assignments for U.S. House and U.S. Senate for Arkansas delegates.

26 National Bank Stress

State Commissioner looks at national vs. Arkansas banking system stress.

40 Appraiser Shortage

A problem for rural communities.

42 Women in ON THE COVER

Hugh McDonald, Arkansas’ Secretary of Commerce Photo courtesy of Arkansas Economic Development Commission

Banking Conference

In March women from around the state gathered in Little Rock.

44 NEWS & MOVES THE ARKANSAS BANKER

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PRESIDENT’S MESSAGE

Lorrie Trogden | President & CEO | Arkansas Bankers Association

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ast week we heard the two words that bring dread to all of our hearts – bank failure. You hopefully saw the communications the ABA put out after it hit

the news. That information has been compiled in one place on our website. Click on the “Fed Facility & Customer Resources” box on our Homepage to find it. We will continue to update the page as any new information becomes available.

These events certainly led to calamity and confusion, but the banking community, as always, pulled together to help your customers and your community understand what happened and that their money is safe and sound in our Arkansas banks!

“Times of great calamity and confusion have been productive for the greatest minds.

The purest ore is produced from the hottest furnace. The brightest thunderbolt is elicited from the darkest storm.”

- Charles Colton

As I’ve told every news outlet that I spoke with, those failures were not representative of our banking system and we are not in a crisis. One thunder-bolt does not a storm make.

We know the answer to the problems those two banks had is not rolling back S2155 and tailored regulation, or adding other onerous regulation that hurts the customer more than it helps them. I’m writing this from my hotel room on our spring Washington D.C. trip, and as you can imagine, the tone changed from what was on our agenda to discuss two weeks ago. However, we will still be discussing the issues that affect banking and over-reaching regulators that need to be addressed by Congress. The state General Assembly is also still in session and we are working hard on several issues. You will see a summary of that in our Q2 issue and we will offer any education needed about new Arkansas laws that will affect you.

Speaking of education, let’s talk about the world class professional development that ABA provides. We set a record number with our Women in Banking conference – 200 attendees! It was exhilarating to be with everyone and I know the event will continue to grow. At our Annual Convention, the ABA membership will elect new Officers, Board Directors, Emerging Leaders Council, and a Group Vice-Chairman. The incoming ABA Chairman of the Board is also “pinned.”

We have a fantastic speaker line-up as well as fun dueling pianos entertainment paired with the Chairman’s dinner. (jeans night!) I truly appreciate all of you investing your training dollars with us so that we can in turn invest in you with our advocacy efforts and other member benefits.

We will weather this storm together and I have faith that the purest ore will be what is produced once we get to the other side. Never hesitate to reach out if there is anything you need, we are here for you and because of you.

Lorrie Trogden, President & CEO

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C O N G R AT U L AT I O N S

COMMERCIAL LENDING SCHOOL

Graduates

ABA

OFFICERS Randy Scott, Chairman

Farmers Bank and Trust, Blytheville

Jim Taylor, Chairman-Elect First Security Bancorp, Rogers

Brad Chambless, Vice Chairman

Farmers and Merchants Bank, Fayetteville

Lori Ross, Treasurer

Citizens Bank, Arkadelphia

Jim Cargill, Past Chairman Arvest Bank, Little Rock

Lorrie Trogden, President & CEO

Arkansas Bankers Association, Little Rock

BOARD OF DIRECTORS Plan for our next Commercial Lending School

OCTOBER 16-20!

Duncan Bellingrath, Hot Springs Kenya Davenport, Little Rock Joe Dunn, Little Rock

Andy Sharpe

BODCAW BANK - MAGNOLIA

Madison Alexis Short

CHAMBERS BANK - DANVILLE

Brett Lee Wilkins

CHAMBERS BANK - RUSSELLVILLE

Jeana Tacker

Sarah Salsbury

SIGNATURE BANK OF ARKANSAS FAYETTEVILLE

Melanie Moore Cam Coleman

Scott Saffold, Monticello

SOUTHERN BANCORP - LITTLE ROCK

Clara E. Weatherley

Parker Cole

SIGNATURE BANK OF ARKANSAS - HARRISON

Cody Knight, Piggott Wilson Moore, Little Rock

Ravan Wagner

Buster Burns

Gary Kleck, Springdale

SIMMONS BANK - CONWAY

FIRST ARKANSAS BANK & TRUST - CABOT

FIRST ARKANSAS BANK & TRUST - GREENBRIER

Robert Husong, Rogers

THE UNION BANK OF MENA - MENA

UNITED BANK - ROGERS

Colten Vaught

UNITED BANK - SPRINGDALE

Loren Shackelford, Fayetteville Rob S. Tiffee, Little Rock Jamie Waller, Magnolia Scott Walker, El Dorado Jay Wisener, Little Rock

THE ARKANSAS BANKER

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CHAIRMAN’S C O LU M N

The Work of the ABA Continues Randy Scott | Chairman | Arkansas Bankers Association

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epresenting the banks of Arkansas over the last 12 months has been a humbling experience for me. I

have participated in exciting conferences, conventions, meetings, and zoom calls, but best of all, I have had the opportunity to meet many excellent bankers along the way. This is my last article as your Arkansas Bankers Association chair, and I am using it as a clarion call for your help and participation.

As the number of banks continues to decline in our state and across the country through mergers and acquisitions, we need to capitalize on the potential of the ABA. Our annual convention, the MEGA conference, group meetings, DC fly-ins, Emerging Leaders, Women in Banking—all these options allow you to be a voice in our industry.

At the recent ABA Washington Summit, Arkansas was represented by only 16 bankers, although 1,500 people attended from 50 states. Farm Credit and credit unions are always well represented, and not coincidentally, our Congressional delegates do listen to them! It has never been more critical that we are heard. Although we are fortunate to live in a small state where we know our legislators personally and can pick up the phone and talk to them, visiting them in D.C. as an industry is essential, especially now, with the impact of Silicon Valley and Signature Bank failures—our delegation is asking Arkansas bankers for constructive suggestions to prevent this from happening again. We have great opportunities to give us the influence we need, and I urge each of you to get more involved in the Arkansas Bankers Association to affect the changes important to us.

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Several current hot topics are vital to our industry, and we have talked about some of them for years. Undoubtedly, new regulations will emerge as part of the fallout from SVB. The cannabis industry is another issue: The SAFE Act would give banks a safe harbor for banking with cannabis-related businesses. Thirty-seven states have legalized cannabis for medical use, and while we are not officially supporting the legalization of marijuana, an unbanked cannabis industry is not a viable option.

Equal Credit Opportunity for Rural America (ECORA) has become the Access to Credit for our Rural Economy (ACRE) Act. ACRE excludes from gross income the interest received by qualified lenders on loans secured by farm real estate and home mortgage loans in rural communities of no more than 2,500 people. The passage of ACRE would enable us to lower interest rates by 1.5-2.0%, which would benefit the agricultural business in a time of rising interest rates and input costs.

This is important in the Arkansas agricultural economy, so we also have introduced a similar bill at the state level.

Speaking of the agricultural industry, a draft of the new farm bill is in the works, and this crucial piece of legislation needs input from Arkansas banks and farmers.

We have requested that the FSA guaranty crop production loan amount be increased from $1.75 million to $3.5 million because with increased land prices and input costs, the guaranty amount must increase. Also, we have asked to expand programs available for first-time farmers.

Other federal issues include CFPB’s proposal to change credit card late fees from a maximum of $30 for first-time violations to $8; small business data collection requirements from CFPB (Section 1071 of the Dodd-Frank Act); the introduction of ESG legislation; and the list goes on and on.

In closing and on a personal note, I would be remiss if I did not recognize a board member from my bank who recently received the 60 Years in Banking Milestone Award. Paula Blackwell has served on the Farmers Bank and Trust board since 1987 and was the President and CEO of Piggott State Bank from 1990 to 2015, where she still serves on the Board of Directors.

Over the years, she has been a great role model for many bankers, including me.

Congratulations to Paula for reaching this significant milestone!

Thank you for allowing me to serve you as your chair this past year. The honor has been mine.

“Our annual convention, the MEGA conference, group meetings, DC fly-ins, Emerging Leaders, Women in Banking—all these options allow you to be a voice in our industry.”

THE ARKANSAS BANKER

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PROFESSIONAL D E V E LO P M E N T

Calendar of Events A P R I L - M AY 2 0 2 3

April 04

T UES DAY 5 P.M.­– T H URS DAY 1 1 :30 A .M.

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2023 ABA A N N UA L CONVENTION

The Arkansas Bankers Association’s 133rd Annual Convention will be held downtown in our state’s capital city. Along with longstanding events such as the Day with the Commissioner and the Simmons Bank Strawberry Breakfast, we will witness the installation of our ABA officers and more!

LOCATION: Little Rock Marriott, Little Rock, AR

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THU RS DAY 8 : 30 A. M. – 3: 30 P. M.

BANK DIRECTORS WORKSHOP

Demands on a Bank’s Board of Directors have never been higher. Both inside and outside directors will gain a better understanding of the duties, responsibilities, and liabilities involved in this leadership role.

INSTRUCTOR: David Kemp LOCATION: Little Rock Marriott, Little Rock, AR

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WEDNESDAY 9 A. M. ­– 4 P. M.

LOAN AS S I STAN TS & P RO CE S S O RS WO RKS HO P

Designed to provide lending knowledge and administrative effectiveness of one of the most import positions. The objectives of this program are directed at increasing the performance effectiveness of these individuals.

LOCATION: Arkansas Bankers Association

THU RS DAY 9 A. M .­– 4 P.M.

FOUNDATIONS FOR COMMERCIAL LENDING

This will provide an overview of commercial lending through an assessment, type and structure of a commercial loan, as well as building relationships with new and existing clients. You will learn the necessary skills to analyze, and if required, approve a business loan. Participants will have exposure to assessing loan suitability, structuring a loan and developing a sound lending understanding upon which to build comprehensive commercial and business relationships.

LOCATION: Virtual Learning

INSTRUCTOR: Ron Rushing

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INSTRUCTOR: Christie Drexler

THE FUTURE OF BANKING

LOCATION: Walton College, 2nd & Main Streets, Little Rock

RE TAI L LE N DI N G S E RI E S : PA RT I

This program will prepare retail lenders to have more effective conversations with credit partners and build stronger relationships with customers. This series meets the needs of retail lenders who serve customers, small real estate investors, and/or small business clients in a branch environment.

WEDNES DAY 1 :30 P.M.– 4 : 3 0 P. M .

This is the third event in the “Future of Business” series with the purpose to identify key trends affecting Arkansas industries and make meaningful predictions for those industries. At the conclusion of this session, the Walton College will produce and distribute a white paper summarizing and expounding upon the group’s discussion.

WEDNESDAY 9 A.M.­– 4 P.M.

INSTRUCTOR: Ron Rushing LOCATION: Arkansas Bankers Association

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TU E S DAY 10 A. M .­– 11 A.M.

MEDICAL MARIJUANA IN THE WORKPLACE

This virtual session will provide an overview f the failed ballot initiative in Arkansas and the future of recreational marijuana use in Arkansas, which will then shift into medical marijuana in the workplace.

The inevitable issues and challenges that face employers, and the need to adopt and implement appropriate policies related to medical marijuana in the workplace.

INSTRUCTOR: Brett W. Taylor LOCATION: Virtual Learning

FOR MORE INFORMATION ABOUT ABA TRAINING & EVENTS, AND TO REGISTER, LOG ON TO WWW.ARKBANKERS.ORG.

May 01

MO NDAY 9 A .M.­– WEDNES DAY 5 P.M.

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2023 AMERICAN MORTGAGE CONFERENCE

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This conference brings together leading experts in the financial services industry, mortgage practitioners of every kind, policy makers, and investors to discuss important issues in the mortgage field and to analyze what progress is being made in Washington.

This program will qualify for CRCM credits.

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T UES DAY 9 A .M.­– T H URS DAY 4 P.M.

INSTRUCTOR: Christie Drexler

2023 CONSUMER LENDING SCHOOL This three-day school is designed to educate and prepare consumer lenders.

Bank lenders require a high degree of perception and skill. This educational program provides essential knowledge and skills and establishes a network of lenders for continued support by sharing experiences with fellow lending professionals.

This school is targeted towards community bankers who participate in their bank’s consumer loan origination process.

THE EMERGING CUSTOMER EXPERIENCE

Banking has change dramatically in a few short years. A new baking workforce, a new generation of clients, new technology, and new methods of communicating and transacting banking business require an updated approach to providing exceptional client service. This workshop focuses on the essentials of today’s banker needs to consistently deliver exceptional and referralworthy client experiences, with the goal of building loyal, long-term, and profitable client banking relationships.

LOCATION: Isle of Palms, South Carolina

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THU RS DAY 9 A. M.­– 4 P.M.

LOCATION: Virtual Learning

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ABA COMPLIANCE SCHOOL

INSTRUCTOR: David Kemp

This school provides an up-todate overview covering a wide range of compliance and hot topics. Now is the time to brush up on the fundamentals, increase your expertise on all aspects of bank regulatory compliance, and to begin that deep dive into your own programs. This fourday virtual school will provide a well-rounded view of regulatory compliance expectations and what to look for in the future.

LOCATION: Arkansas Bankers Association

Alliance

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Live events are subject to a virtual learning environment. For more information, contact the ABA at (501) 376-3741 or Kami Coleman at kami.coleman@arkbankers.org.

THE ARKANSAS BANKER

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WASHINGTON U P DAT E

Meeting in the

MIDDLE(WARE) Rob Nichols | President and CEO | American Bankers Association

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or community banks seeking to remain competitive in today’s crowded financial services marketplace, innovation is imperative. A relation-

ship with a core provider can make or break an institution’s innovation goals, and for too many community banks, legacy core technologies are holding them back.

This is a critical challenge that ABA set out to solve through its Core Platforms Committee, which was founded in 2018 to engage the top players in core processing and help break down the barriers that impede banks’ ability to offer customers the products and services they want. Since the committee was founded, we have improved the lines of communication with the core providers, and we remain optimistic about the commitments we’ve received from many of these firms to improve in this area.

But for many banks, innovation remains a struggle. In fact, it’s estimated that more than two in five U.S. banks are still running core banking processes on legacy systems that were designed nearly four decades ago.

In a recent ABA survey, 42% of bankers expressed dissatisfaction with the service they receive from their core provider, identifying several pain points including a limited ability

“It’s estimated that more than two in five U.S. banks are still running core banking processes on legacy systems that were designed nearly four decades ago.” to customize offerings and subpar integration capabilities with other technologies.

However, undergoing a complete core conversion is a massive undertaking that comes with significant costs, complexities and risks, and many banks are understandably hesitant to abandon their longtime core provider. So how can community banks bridge the gap?

One possible alternative to a “rip and replace” strategy is to employ the use of middleware—a solution that leaves existing core systems in place, while wrapping the core with a new layer of technology, typically an API architecture. This architecture enables banks to reduce reliance on their legacy core to deliver products faster; collect, maintain and use customer data more effectively; and foster partnerships with fintech companies.

It’s a strategy that can considerably reduce the timeline for bringing new products and

“One possible alternative to a “rip and replace” strategy is to employ the use of middleware—a solution that leaves existing core systems in place, while wrapping the core with a new layer of technology, typically an API architecture.”

8 • SPRING 2023

services to the market while reducing reliance on a legacy core system.

ABA’s Office of Innovation highlights the case for middleware in a newly released whitepaper, “Exploring Banking Middleware Solutions.” The paper provides an in-depth look at how banks can benefit from incorporating a middleware layer into their core systems and gives a snapshot of the middleware vendor landscape in the U.S., as well as considerations banks should take into account when engaging with a middleware vendor.

I urge you to read the white paper, which you can access at aba.com/Middleware, and check out the other resources the Core Platforms Committee has made available at aba.com/core.

ABA is deeply committed to helping its member banks succeed—regardless of where they are in their innovation journey. Our Office of Innovation works exhaustively to stay on top of the latest trends, connect banks with strategic partners and pave the way for responsible innovation policy in Congress and at the regulatory agencies.

Successful innovation is key to the preservation of the broad and diverse community banking sector that makes our nation’s financial services industry the envy of the world.

Email Rob at nichols@aba.com.

THE ARKANSAS BANKER

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COMMISSIONER'S C O LU M N

The Liquidity

Spectrum 2.0 Susannah Marshall | Commissioner | Arkansas State Bank Department

Y

ou may recall last quarter; my article was titled: “The Liquidity Spectrum”. Given

the notable events in early March of this year, I felt it was appropriate to continue the conversation about Liquidity and the current state of the banking industry. In the previous column, I didn’t know how timely or significant the discussion on Liquidity would become and now it seems that Liquidity will continue to dominate the headlines for our industry in the foreseeable future. There has been a series of significant responses to the current Liquidity environment. Most institutions were able to maintain ample levels of on-balance sheet Liquidity in the months following the height of the pandemic and today we are seeing Liquidity positions negatively impact some institutions. However, the need for real-time Liquidity, not just available, or contingent sources of Liquidity, can occur in an instant and it seems

certainly true of the two recent bank failures as reported by the media. Thankfully, it has been many years since our country has witnessed a true “run on deposits at an institution”. Although it appears there is some uneasiness within the system, I am optimistic that we will continue to see stability return across the sector.

Bank failures are unfortunate, and the two recent Liquidity failures have been extremely alarming, particularly because of the timing of these failures occurring either mid-day or not associated with a planned regulatory closure. The responsive actions taken by the federal regulators to the events give some indication that we are in a different environment than in previous periods of banking history. I have also continued to see and hear the comments about a “banking crisis” but I do not believe that is an accurate description or appropriate language to use at this point. However, we may continue to see a period of decline, some economic

uncertainty, and the potential for further impacts to customers and our industry.

The influx of money into the economy and specifically to individuals and businesses over the past two years was unique.

This occurred during a prolonged period of record low interest rates and was coupled with lower levels of loan demand across the banking sector. Some banks sought alternatives other than loans to bolster income and deploy the excess funds. Although yields in the bond markets were often not the most desirable, increasing securities portfolios seemed to be the best option for many institutions. However, monetary policy changes led to rapid increases in interest rates which immediately and significantly impacted bonds prices and valuations of banks investment portfolios; thus, diminishing the value or ability to use the investments for normal liquidity needs. These negative events when coupled with certain business sectors’ need to access funds and

“The need for real-time Liquidity, not just available, or contingent sources of Liquidity, can occur in an instant and it seems certainly true of the two recent bank failures as reported by the media.”

10 • SPRING 2023

“Concentration Risk should be identified, measured, monitored, and controlled for all institutions. Concentration Risk can occur on both sides of the balance sheet.” exercise their lending commitments led to the worst outcome for some institutions.

In the coming weeks and months, we will continue to see and hear more commentary around the circumstances and causes that led to these recent events. I will share my belief that diversification is key to sound banking practices and can be a contributing factor to managing risk. My annual list of “Hot Topics” this year, includes Concentration Risk as one of the topics for 2023. Concentration Risk should be identified, measured, monitored, and controlled for all institutions. Concentration Risk can occur on both sides of the balance sheet and that is especially true based on shared

comments and observations of the bank failures this year. In the Post 2008 banking crisis, we have spent much time focused on Commercial Real Estate concentrations.

While we witnessed the impact that can occur with deterioration of that business sector, we must continue to closely monitor the trends and market indicators that incorporates enhanced oversight of any balance sheet concentrations including funding sources and demands. We should also assess the potential for loss and exposure if there is weakening within a customer base or category. This is especially true for new or emerging markets or lines of business.

Second, rapid growth can be an indicator of

increased risk within a balance sheet. Many times, rapid growth can occur without well developed or enhanced risk management practices in place. Furthermore, the absence of strong risk management practices or risk mitigants, can often result in exposure and loss for an institution.

As I noted in the previous column, diversification of funding sources, robust Contingency Funding Plans that are tested, and appropriate internal stress testing of asset and liability classes are all examples of strong risk management practices. Today, more than ever, we see how necessary it is that we are prepared for that one day when Liquidity matters the most!

THE ARKANSAS BANKER

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BANKER Q&A

THE

MILLENNIAL MINUTE with Chance Robbins Vice President/Innovative Technology Officer CS Bank, Eureka Springs

WHAT MOVIE CHARACTER ARE YOU MOST SIMILAR TO? Over the years, I have been told by countless customers that my personality and humor remind them of Chris Farley. Although I don’t live in a van down by the river, I’ve done my fair share of motivational speaking at employee events!

HOW DO YOU CONTINUE TO DEVELOP AS A BANKER AND LEADER? Investing in myself and setting clear goals to strive toward. The best way to continue working on yourself is looking forward. Everyone makes mistakes in life but one main key point is to not dwell in the past but look to the future. I try to not see my role in the bank as “just a job”.

Finding the right motivation in your life will drive you to keep reaching forward. Although this cannot be easy at times, you have to be open to criticism. The day a person stops trying to make improvements, is the day they stop being a leader. Lead by example and set the bar high.

WHY IS IT IMPORTANT FOR THE YOUNGER GENERATION OF BANKERS TO GET INVOLVED IN THE GOINGS-ON IN OUR INDUSTRY? They are the future of banking. Period. As a seasoned banker, it is my job to encourage them to provide their insights. A lot of newer bankers have great out of the box ideas. It is our job to help bring the newer generations up.

WHAT’S YOUR FAVORITE THING ABOUT WORKING AT A BANK IN A SMALL TOWN? The people. I have the privilege to work in the same community I grew up in. Shopping in a local grocery store can sometimes go from being a shopper to becoming a banker quickly if the need arises. I love the fact that we live in a community where people know you as that guy from the bank. Community banking is truly about helping people out regardless of where you are at!

“Finding the right motivation in your life will drive you to keep reaching forward. Although this cannot be easy at times, you have to be open to criticism. ” 12 • SPRING 2023

WHAT DO YOU LISTEN TO ON YOUR MORNING COMMUTE? This is a moving target for sure! My morning tunes could vary from Baby Shark to AC/ DC Thunderstruck depending on which of my kids I’ve got with me. My 8-year-old might or might not request Thunderstruck be played on his way to school. Whether it be morning or evening, classic rock is most likely being played if I’m driving!

WHAT IS YOUR FAVORITE PAIR OF SHOES? Hey Dudes! My wife will gladly tell you I have far too many pairs of Hey Dudes. I have house dudes, yard dudes, work dudes…

You get the drift!

WHAT SUBJECT COULD YOU GIVE A ONE-HOUR IMPROMPTU LECTURE ON? Although I have going on 18 years of banking experience, the art of smoking meat would definitely get the nod here.

I’ve been mastering this art for several years now. Seeing the faces people make after taking their first bite makes all the hours of preparation worth it. My backyard hobby turned into a business a few years ago. We will soon start our fourth year and are beyond blessed to run a successful small business. To be successful, you have to be passionate about what you do. It doesn’t hurt that I enjoy BBQ!

THE ARKANSAS BANKER

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INDUSTRY U P DAT E S

ESG Measure

AMENDED SEVERAL TIMES

Before Becoming Law

G

by Roby Brock

ov. Sarah Sanders signed into law HB 1307, a measure that restricts state and local investments in financial firms that use Environmental, Social Justice or Governance (ESG) policies to manage money.

The bill has been controversial for weeks as many critics complained that it was an anti-free market government regulation and would cost state retirement systems millions of dollars. Supporters emphasized the legislation was intended to protect investments in companies threatened by ESG efforts.

The measure was amended several times to mollify concerns, but it still faced a number of challenges to reach the governor’s desk.

In short, the bill creates an ESG oversight committee to guard against financial service providers discriminating against companies in the energy, fossil fuel, firearms or ammunition industries. The oversight committee would have a representative from the governor, attorney general, Speaker of the House and President of the Senate.

The state Treasurer, Mark Lowery, who was supportive of the proposal, would also serve on the committee and would provide a list of financial services providers who do not qualify for investment services based on their ESG policies.

The state Treasurer would also be required to divest any direct or indirect holdings of the state with a financial services provider on the list.

In short, the bill creates an ESG oversight committee to guard against financial service providers discriminating against companies in the energy, fossil fuel, firearms or ammunition industries.

14 • SPRING 2023

SIMMONS BANK Hot Springs Group 3

LATRECIA BRANCH VICE PRESIDENT STONE BANK Little Rock Group 1

IAN BRYAN SECRETARY/ TREASURER SIMMONS BANK Russellville Group 2

ELS COUNCIL MEMBERS AARON BELL AT LARGE

FIRST SECURITY BANK Jonesboro Group 1

TAMMY ENGLE

CHANCE ROBBINS CS BANK Eureka Springs Group 2

RHETT SHEPARD

ARVEST BANK Siloam Springs Group 2

CENTENNIAL BANK Little Rock Group 1

STEVE HOLMES

LAUREN STATON

ARVEST BANK Little Rock Group 1

RELYANCE BANK White Hall Group 3

AMBER MURPHY AT LARGE

ALLISON WILLIAMSON AT LARGE

FIRST FINANCIAL BANK El Dorado Group 3

SIMMONS BANK Marshall Group 2

BRANDI RAY FARMERS BANKS AND TRUST COMPANY Malvern Group 3

S E C T I O N

DUNCAN BELLINGRATH PRESIDENT

EMERGING LEADER

ELS EXECUTIVE COMMITTEE

THE ARKANSAS BANKER

• 15

BANKER Q&A

FIVE VE minutes with...

Chris Johnson Regional Market President – AR First Financial Bank, Little Rock

Q. HOW DID YOU GET STARTED IN BANKING?

A.

I was honestly at cross-roads in my young, professional career.

I had graduated college and moved back to Little Rock to work for my family. My older brother was running a few retail golf stores, so I helped him out for a year. My father and other brother were in the beginning stages of redevelopment of a warehouse in downtown Little Rock in a newly created entertainment district, the River Market. Having recently graduated college, my dad thought who better to run the day-to-day operations…my brothers and I owned/operated The Pour House Bar & Grill for about 4 years. I met my soon to be fiancé there, and well, let’s just say being a bar owner wasn’t in her long-term plans for her husband. My father’s private banker at the time offered me a role as a management trainee and off I went to start my banking career.

Q. TELL US ABOUT YOUR EARLY CAREER...

LOOKING BACK, HOW WOULD YOU DESCRIBE YOURSELF?

A.

Inquisitive- when I started as a teller, I wanted to know everything there was to know about banking. What is deposit insurance? When do I get to count all the money in the vault? How do I know when the drive through teller drawer is all the way out?

Why can’t I hear the customer in the drive through lane talking to me? When do I get to present something to the Board of Directors?

Fortunately, I had some understanding and great mentors as bosses: Chris Roberts, John Olaimey, John O. Moore, Blake Miller, and David Straessle really took the time to invest in me personally and professionally. To this day, I can reach out to them via phone and ask their guidance, or more importantly, I can ask them for their help, and they will always deliver.

“There is something special about knowing that you helped someone start their own business, change their professional career, give honest advice about whether an idea will work.

Selfishly, I enjoy being involved in the most minute level of something that is incredibly successful.”

16 • SPRING 2023

A leader knows that empathy is “ his/her greatest attribute – he or she understands each of their team members’ best attributes, and how best to put them in a place to be successful.

”

Q. WHAT’S THE DIFFERENCE BETWEEN A BOSS AND A LEADER?

A.

A boss is simply the individual you strive to placate every day. You are merely checking the box to make sure something is completed, and you move on with your day. A leader inspires. A leader invests in his/her people both personally and professionally. A leader appreciates every individual’s time, effort, and energy that they put forth daily and is vocal about it. A leader surrounds himself/herself with people they trust to get the job done. A leader knows that empathy is his/her greatest attribute – he or she understands each of their team members’ best attributes, and how best to put them in a place to be successful.

Q. WHAT IS THE BEST

PART OF BEING A HOMETOWN BANKER?

A.

I get to do business with many friends and peers that I have grown up with my entire life. There is something special about knowing that you helped someone start their own business, change their professional career, give honest advice about whether an idea will work. Selfishly, I enjoy being involved in the most minute level of something that is incredibly successful.

Whether that be on the forefront of a new fast-casual restaurant concept launching in Little Rock, or a long-time corporate executive leaping off into his own small-business ownership role, or just helping a lifelong friend navigate the stress of moving back to town, starting kids in a new school, and starting over in his professional careerI just love being a part of the little things in my friends and peers’ lives. It just means a little bit more when you leave your office every day knowing that you listened, you engaged, you cared.

Q. WHAT IS YOUR BEST KEPT SECRET?

A.

I love to sing and dance. Specifically, I love to do the centipede/caterpillar (depends on how old you are on what you call it). I busted my chin wide open in high school during Prom in a dance off with one of the co-owners of now famous Nativ apparel company. After graduating college, I made a pact with each of my college roommates that I would perform the centipede at their wedding ceremony- I am glad to say that I accomplished that feat, and I believe have now done it twice for one of my roommates. As for the singing, I have also sung “You’ve Lost the Loving Feeling” (think Top Gun scene, but worse), at all my college roommates’ weddings.

THE ARKANSAS BANKER

• 17

INDUSTRY U P DAT E S

U.S. Treasury Expands Small Business Support Program In Arkansas

by Roby Brock

T

he U.S. Treasury Department announced approval of five additional state and territory plans for up to $339 million in funding under the State Small Business Credit Initiative (SSBCI), a part of President Joe Biden’s American Rescue Plan.

Arkansas was approved for up to $81.6 million under the plan. Guam, Rhode Island, the U.S. Virgin Islands, and Wisconsin were the other states and territories with approved plans. In total, the U.S. Treasury has approved $6.6 billion under the program. The funds will 18 • SPRING 2023

reportedly be targeted at minority and women business owners.

“This is an historic investment in entrepreneurship, small business growth, and innovation through the American Rescue Plan that will help reduce barriers to capital access for traditionally underserved

communities,” said Treasury Secretary Janet Yellen. “These SSBCI funds will promote equitable economic growth across the country.”

The funds in Arkansas will be used to operate seven SSBCI programs. Those programs include a capital access program, two loan participation programs, two loan guarantee programs, and two equity/venture capital (VC) programs.

Arkansas allocated $15 million to a loan guarantee program and $7.5 million to a loan participation program that are each designed to reach underserved businesses,

the Treasury reported. The equity/venture capital programs, allocated a combined $46 million, will target investments of $1 million in Arkansas-based, high-growth companies raising venture capital and will capitalize seed and early-stage venture funds focused primarily on investing in Arkansas-based companies.

The American Rescue Plan reauthorized and expanded SSBCI, which was originally established in 2010 to increase access to capital for small businesses and entrepreneurs. The new SSBCI has provided $10 billion to states, the District of Columbia,

territories, and Tribal governments to increase access to capital and promote entrepreneurship, especially in traditionally underserved communities as they emerge from the pandemic.

In January, the Census Bureau released data which showed that over the last two years Americans have applied to start 10.5 million new businesses, making 2021 and 2022 the strongest two years on record for new business applications.

“This is an historic investment in entrepreneurship, small business growth, and innovation through the American Rescue Plan that will help reduce barriers to capital access for traditionally underserved communities.”

THE ARKANSAS BANKER

• 19

INDUSTRY U P DAT E S

Committee

Assignments F O R U. S . H O U S E A N D U. S . S E N AT E

SENATE Sen. John Boozman

Sen. Tom Cotton

Committee on Agriculture, Nutrition, and Forestry

Senate Committee on Armed Services

R -A R K A N S A S --------

RANKING MEMBER

Committee on Appropriations MEMBER

Committee on Environment and Public Works MEMBER

Committee on Veterans' Affairs MEMBER

20 • SPRING 2023

R -A R K A N S A S -------MEMBER

Senate Committee on the Judiciary MEMBER

Senate Select Committee on Intelligence MEMBER

Senate Joint Economic Committee MEMBER

HOUSE DISTRICT 1

DISTRICT 3

U.S. Rep. Rick Crawford

U.S. Rep. Steve Womack

House Committee on Agriculture

House Committee on Appropriations

House Committee on Transportation and Infrastructure

Subcommittee on Financial Services and General Government

R -J O N E S B O R O --------

VICE REPUBLICAN CHAIR

RANKING MEMBER Subcommittee on Railroads, Pipelines, and Hazardous Materials

House Permanent Select Committee on Intelligence

R-ROGERS -------MEMBER

CHAIRMAN

Subcommittee on Defense MEMBER

RANKING MEMBER Subcommittee on Counterterrorism, Counterintelligence, and Counterproliferation

Subcommittee on Transportation, Housing and Urban Development, and Related Agencies

DISTRICT 2

DISTRICT 4

MEMBER

U.S. Rep. French Hill

U.S. Rep. Bruce Westerman

House Financial Services Committee

House Committee on Natural Resources

R-LITTLE ROCK -------VICE-CHAIRMAN

Subcommittee on Digital Assets, Financial Technology and Inclusion CHAIRMAN

Subcommittee on Capital Markets MEMBER

Foreign Affairs Committee MEMBER

Subcommittee on Global Health, Global Human Rights, and International Organizations MEMBER

Subcommittee on Oversight & Accountability MEMBER

House Permanent Select Committee On Intelligence MEMBER

R-HOT SPRINGS --------

CHAIRMAN

House Transportation and Infrastructure Committee MEMBER

Unretired!

A R K A N S AS C O M M E R C E S EC R E TA RY

HUGH MCDONALD TAKES NEW ROLE

by Roby Brock

S

even years ago, Hugh McDonald retired after a longstanding career at Entergy.

He was the CEO of Entergy Arkansas for 16 years and was actively involved in Arkansas’ business landscape.

He is past board chair of the Arkansas State Chamber of Commerce, the Little Rock Regional Chamber of Commerce, Fifty for the Future, the Arkansas Research Alliance, the Arkansas Career Education and Workforce Development Board, and the University of Arkansas Medical Sciences Board of Advisors.

McDonald joined Entergy in 1982 as an engineer at Waterford 3 nuclear generating plant in Louisiana.

He held various management positions in the distribution, transmission, customer service, retail marketing, and regulatory business functions in Louisiana, Mississippi, Texas, and Arkansas. Prior to working for Entergy, McDonald was employed by Black and Veatch Consulting Engineers in Overland Park, Kansas.

He holds a Bachelor of Science degree in Construction Management from North Dakota State University and earned an MBA from the University of New Orleans.

Lured out of retirement by Governor Sarah Sanders, McDonald now serves as the Secretary of Commerce for the state of Arkansas. The agency, which was reorganized in 2018, encompasses 10 different divisions and commissions. McDonald sat down for a conversation with The Arkansas Banker magazine to discuss his new role.

Q:

You are the former Entergy Arkansas CEO, former chairman of the Arkansas State Chamber of Commerce. What lured you out of retirement?

Hugh McDonald: I got a call one night out of the blue and had an offer that I really couldn't refuse. The governor is a good negotiator and I think I still have a little bit to contribute and it's in sort of the wheelhouse that I worked a lot in in my previous life in economic development and workforce development and running a large organization. So I felt, let's do this. Let's have fun.

photo courtesy of Arkansas Economic Development Commission

22 • SPRING 2023

I got “a call one

night out of the blue and had an offer that I really couldn't refuse.

”

THE ARKANSAS BANKER

• 23

There are various ESO [entrepreneur support “ organizations] across the state. I want to find out how s

can the state and economic development support that network on a more holistic fashion than we have in the past.

”

Q:

You've had a few weeks to get settled into this new role as Secretary of Commerce. What are you learning?

McDonald: I'm learning a lot. I think the state as a whole does a good job at traditional economic development, recruiting new businesses, expanding existing businesses with the incentives we have in place. Clint O'Neill is the new executive director [of AEDC], solid guy, I really like Clint.

What we don't do enough focus on, in my opinion, is for example entrepreneurship, helping the organizations, these entrepreneur support organizations. They call them ESOs. There are various ESOs across the state. I want to find out how can the state and economic development support that network on a more holistic fashion than we have in the past, because you've got so many. I mean 99% of the companies are small business. How do we support that network?

You've got kind of two groups of small business. You've got the innovation type, the tech type, that venture capital go in at various stages and those companies scale up, but you also have the momand-pop retail small businesses. There are different types of small business, different types of entrepreneurs, but they're both important in terms of nurturing, supporting from a state economic development perspective. They grow in different ways and they should be supported more to be able to do that. And they both affect quality of life. They both affect talent recruitment in different ways, which is also very important for us to do as a state.

Q:

Do you see directing more resources into those areas or do you see, just knowing that you've got the endorsement of the state of Arkansas behind you to do this? What do you think that you can additionally push to help those businesses?

McDonald: My plans aren't full yet. In fact, we're planning a summit with some of the best entrepreneur support groups in the state and venture capital because I think we have to do both. We've got to support it with the state backing. That is going to require some additional focus on resources within AEDC. We've got to relook at our incentives. Our incentives have worked well for the traditional economic development. I want to continue that, I want to get better at that. But how do we have to change our incentives going forward to support the new economy, entrepreneurship, as well?

Q:

You have worn the hat as the Entergy Arkansas CEO. You were involved in a lot of economic development deals, mostly big ones because the big ones require electricity, a lot of work, a lot of power. There's a lot that you did at Entergy that probably prepped you for this role, would you say?

24 • SPRING 2023

McDonald: Yes. Entergy did a lot of the big economic development, but it also does a lot of the community development as well supporting rural Arkansas. A Big River Steel project is not going to happen in every county. That's just unrealistic to assume. But how can we support the small towns in rural Arkansas from growing their leadership capacity, which then they can start their own economic development efforts, as well? And starting from a small business perspective, that's where we can really, I think, help in terms of rural Arkansas.

Q:

Assess where you see the Arkansas economy right now.

Are we at some sort of tipping point that concerns you? I think you would be a guy that looks at strengths, weaknesses, opportunities and threats. I'm not asking for the full-blown analysis on that, but where do you see opportunity areas. Where do you see potential threats?

McDonald: I think our biggest challenge is workforce and workforce development. Our unemployment rate is low. I mean, we're almost at the full employment perspective. We've got more job openings than we have applicants at this time. So, the question - I'm not an economist - but the question about are we going to go into a recession? Who knows? Smarter people than I can advise you on that, but I think the economy is strong. It's a diversified economy in Arkansas. That's one advantage we do have. So, I'm bullish on the economy in Arkansas.

Q:

You mentioned Clint O'Neill earlier, head of the Arkansas Economic Development Commission. That was a position your predecessor, Mike Preston, held that post and Secretary of Commerce. You're dividing that out a little bit. Tell me why that particular strategy.

McDonald: Frankly, I think it's a better fit for me and I think it's a better structure. I don't think I could, if I'm wearing both hats, I don't think I can do as good a job as I need to be doing on the other eight or nine divisions within the Commerce Department.

Q:

Let’s talk about the other divisions under the Commerce umbrella. What’s your learning curve for agencies like Banking and Securities. How will you approach managing them?

McDonald: I don't think with those two individual divisions that you spoke of, Securities and Banking, I don't think there's going to be significant changes in there. It was just an opportunity to streamline two divisions that those industries are continuing to work closer

Hugh McDonald speaking to the Rotary Club of Little Rock (Club 99) on Tuesday March 7.

Photo courtesy of The Peacock Group.

The Arkansas Department of Commerce oversees 10 different agencies and commissions. // Arkansas Development Finance Authority

// Arkansas Securities Department

// Arkansas Division of Aeronautics

// Arkansas State Bank Department

// Arkansas Division of Workforce Services

// Arkansas Waterways Commission

// Arkansas Economic Development Commission

// Arkansas Wine Producers Council

// Arkansas Insurance Department

// Office of Skills Development

and closer together. And it made sense. Frankly, it made sense to the securities CEOs that I talked to, and it made sense to the banking CEOs that I talked to. So it's an opportunity to do things more efficiently, streamlined. They all said, "Looks good to me. Makes sense. So let's do it."

Q:

What's been your learning curve on the things outside of your bailiwick prior to taking this job? You knew a lot about economic development, which is a huge part of the job, but you get to wear some hats for aeronautics and waterways and all those things, too.

What's been your learning curve on those new divisions?

McDonald: It's obviously steep. I was in a Waterways Commission Meeting today, my first one. So learning about the terminology and the funding mechanisms that our ports have on our navigable rivers

and the importance of working with the federal government, which is critical on these core of engineer projects and moving commerce more effectively and efficiently in our waterway system. Both Aeronautics and Waterways are small organizations. Aeronautics is five employees run by a very capable leader, Jerry Chism.

Cassandra Caldwell runs the Waterways Commission. Right now, it's a department of one. So not huge, but that does not mean it's not important, and it doesn't mean it doesn't take some of my time because I'm learning and getting up to speed. But principles that one uses in a large organization in a Fortune 500 company can and should apply to state government. And where they do, I want to apply those concepts to state government. You can't do that immediately, but we will look for opportunities for efficiencies. That's what the governor expects, and frankly, I think that's what three million Arkansas citizens expect.

THE ARKANSAS BANKER

• 25

INDUSTRY U P DAT E S

Susannah Marshall, Arkansas State Bank Commissioner 26 • SPRING 2023

State Commissioner

MONITORING NATIONAL BANK STRESS,

Confident In Arkansas Banking System

by Roby Brock photography by McCullough Expressions

A

rkansas State Bank Commissioner Susannah Marshall is keeping an eye on the national banking turmoil of the last few weeks surrounding Silicon Valley Bank of California, Signature Bank of New York, and others.

With a run on deposits at SVB and questionable loan stability at Signature, the nation’s financial system was rattled. Simply put, a lack of diversification in loans and deposits spelled trouble for these banks with “too many eggs in one basket.” After their worries became public, several one-off stories emerged with other banks on shaky footing.

None of these instances signal a national banking crisis like ones seen before, Marshall said.

“I think the industry as a whole, the danger of those two failures on the industry as a whole and at the national level puts out a sense and feel of panic, concern, instability, anxiety within our business sector, within the banking sector,” she noted. “But quite frankly, we are at one of the strongest business cycles for the banking industry that we've had in many, many years. So those failures certainly are going to create angst or concern. I think it's very important for us at the local level and at the national level to ensure the public that we have a strong and stable banking sector, a strong and stable financial system. Our job is to ensure the safety and soundness of that financial system.”

Marshall said the turmoil of the last few weeks is compounded with the Federal Reserve Bank’s moves to tame inflation by

raising interest rates. That said, Arkansas banks are overall on sound footing.

“What we want to focus on specifically is that community banks, by and large, stick to very traditional business models. They stick to serving their communities, serving their customers in those communities, and have very core types of deposit and lending activities,” she said.

That doesn’t mean Arkansas couldn’t be susceptible to national trends, but Marshall isn’t seeing any warning signs yet, if they present themselves at all.

“In Arkansas, as we're monitoring our institutions over the last couple of weeks, we are not seeing where there's been any impact from the national events to what's happening here at our state. We are talking with our bankers, they're reaching out to us, we're evaluating closely the industry as a whole, as are my counterparts at the state and federal level. I feel like we have reached a little bit more of a period of stabilization, and I believe that that trend's going to continue,” she said.

Marshall said the tumultuous national banking scene won’t change her agency’s core functions of oversight and soundness, but examiners may sharpen their vision for potential problem areas.

“We may ask more probing questions and enhance our review in certain areas, but that is not in relation to our banks, but more in relation to the industry as a whole and what we've seen, just to ensure that there is nothing that was, again, an unintended consequence impacting our institutions,” she said. “I don't believe we have to change our overall approach because it's been strong and sound and has provided good results within the Arkansas banking industry.”

Should depositors in Arkansas banks be concerned about liquidity or the availability of funds? Marshall said it would take a seismic, historic shift to undermine her confidence.

“You should absolutely have confidence in your deposits at your local institution.

In the history of the FDIC dating back to 1933, no single insured depositor in an insured depository institution or bank that offers FDIC insurance, no one has ever lost a penny,” she said.

“I think that is a very strong message to ensure that the public as a whole has confidence in and is familiar with that understanding and that knowledge that they will be protected through FDIC insurance at their insured limits,” Marshall added. “I hope that certainly it is part of a positive message that we can send to Arkansans, to Arkansas banks, and Arkansas communities, that our industry here in Arkansas is safe and sound, FDIC deposits are insured, and we're in an overall strong position.”

“Quite frankly, we are at one of the strongest business cycles for the banking industry that we've had in many, many years.”

THE ARKANSAS BANKER

• 27

28 • SPRING 2023

94th General Assembly The

→←

ARKANSAS LAWMAKERS OPENED THE 94TH GENERAL ASSEMBLY ON JANUARY 9, 2023 AND ARE LIKELY TO STAY IN SESSION WELL INTO APRIL. With the new chief executive, Gov. Sarah Sanders, and more than a third of each chamber encompassing new members, the State Senate and State House of Representatives are tackling a host of substantive issues. They include an overhaul of the state’s education system, reforms to prison sentencing and the construction of new detention facilities, potential tax cuts or credits, and a variety of social issues dealing with transgender rights to affirmative action.

The Arkansas Bankers Association has been engaged on many fronts, as always, and is using the strength of its members’ knowledge, relationships with local elected officials, and a veteran governmental affairs staff to engage on issues that have a direct impact on the state’s banks.

photos courtesy of the Arkansas House of Representatives

THE ARKANSAS BANKER

• 29

30 • SPRING 2023

THE 94TH GENERAL ASSEMBLY

Gov. Sarah �uckabee Sanders Arkansas Governor Sarah Huckabee Sanders was sworn into office on January 10, 2023 in a historic ceremony that saw her become the first female governor of the state, the first child of a former governor elected to the office, and the youngest governor in the nation at age 40.

Secretary for Former President Donald Trump. She worked as a political operative in many campaigns including for U.S. Senator John Boozman, U.S. Representative French Hill, and the two Presidential campaigns of her father, former Arkansas Gov. Mike Huckabee.

Sanders was well-known for her previous role as White House Press

Sanders started the session with a “bold, conservative” agenda that

focused on education, prison and sentencing reform, and tax cuts.

Early in the session, she was tabbed to deliver the national GOP response to President Joe Biden’s State of the Union Address.

With overwhelming Republican supermajorities in the state legislature, passage of her agenda is meeting with little resistance.

→← “THE PEOPLE OF ARKANSAS, IN THEIR VAST WISDOM, HAVE ENTRUSTED A NEW GENERATION TO LEAD. THIS IS OUR MOMENT. THIS IS OUR OPPORTUNITY. AND YOU AND I ARE THE LEADERS WHO THE PEOPLE HAVE CHOSEN TO GET THE JOB DONE.” – Gov. Sarah Huckabee Sanders, R-Arkansas

photography by Randall Lee

THE ARKANSAS BANKER

• 31

32 • SPRING 2023

THE 94TH GENERAL ASSEMBLY

Speaker of the House

Matthew Shepherd Rep. Matthew Shepherd, R-El Dorado is the current and longest-serving Speaker of the Arkansas House of Representatives serving his third full term as Speaker. It’s a pretty unprecedented perch. There have been two-term speakers before, but never a three-term speaker.

Shepherd, an attorney, represents House District 97, which includes El Dorado and portions of

Union County. He is serving his seventh term in the House.

Born and raised in El Dorado, he graduated from El Dorado High School in 1994, then went on to graduate Magna Cum Laude with a B.A. in History and Political Science from Ouachita Baptist University in 1998 and received his J.D. from the University of Arkansas School of Law in 2001.

→← “A NEW GENERATION IS TAKING ON NEW LEADERSHIP… BRINGING NEW IDEAS. THE SPAN OF GENERATIONS AND EXPERIENCE IN THIS BODY CAN SERVE ARKANSAS WELL. I THINK IN THE END WE WILL COME TOGETHER TO DO THE BEST FOR THE PEOPLE OF ARKANSAS. I HAVE A BELIEF IN OURSELVES, AND OUR COUNTRY, INCLUDING OUR STATE, AND TOMORROW.” – Speaker of the House Matthew Shepherd, R-El Dorado

top photo courtesy of the Arkansas House of Representatives middle and bottom photos courtesy of Secretary of State

THE ARKANSAS BANKER

• 33

34 • SPRING 2023

THE 94TH GENERAL ASSEMBLY

Senate President Bart Hester Senate President Bart Hester, R-Cave Springs, has spent the last decade roaming the halls of the state capitol. As the leader of the Arkansas State Senate, he gets to manage the 35-member body on a daily basis. That involves making sure the atmosphere is conducive for collaboration, collegiality, and on occasion, conflict resolution.

Hester, who is active in real estate in construction in booming Northwest Arkansas, touts himself as a small government conservative and has been a consistent sponsor of legislation to lower taxes

and reduce regulatory burdens on business. Also, his legislative priorities include bills to improve foster care and adoption services.

Representing Senate District 33, he is a 2001 graduate of the Sam Walton College of Business at the University of Arkansas with a bachelor's degree in Business Management. And, there is a little known fact about Hester: he lettered for three years for the Razorbacks’ varsity baseball team and often notes that he was “the best bullpen catcher in the SEC.”

→← “NEVER ALLOW YOURSELF TO FEEL LIKE YOU’RE NOT IN THE LOOP… BE QUICK TO FORGIVE, DO YOUR BEST TO ASSUME POSITIVE INTENT FROM YOUR COLLEAGUES.” – Senate President Bart Hester, R-Cave Springs

photos courtesy of the Arkansas State Senate

THE ARKANSAS BANKER

• 35

THE 94TH GENERAL ASSEMBLY

Bank On It →←

OUT OF 135 ARKANSAS LEGISLATORS IN THE HOUSE AND THE SENATE, THE NUMBER OF BANKERS (OR THOSE WITH SIGNIFICANT BANKING EXPERIENCE) IS SMALL BUT INFLUENTIAL. THESE THREE MEMBERS ARE OFTEN LOOKED TO FOR EXPERTISE ON A VARIETY OF BANKING-RELATED, FINANCIAL AND FISCAL ISSUES.

SEN. JIMMY HICKEY R-Texarkana State Senator Jimmy Hickey is actually a retired banker, having served for over 25 years with Commercial National Bank in Texarkana, where he retired a senior vice president. He now oversees business interests that include rental and real estate investments.

Hickey served as the Senate President Pro Tempore in the last regular session and currently chairs the influential Senate Revenue and Tax Committee. Known as a budget hawk, he frequently dives deep into the details of budgeting and the fiscal impact of legislation.

He is also a member of the Senate Insurance and Commerce Committee, the Joint Retirement and Social Security Committee, the Senate Efficiency Committee, the Arkansas Legislative Council and the Joint Budget Committee.

36 • SPRING 2023

THE 94TH GENERAL ASSEMBLY

SEN. RICKY HILL R-Cabot State Senator Ricky Hill is an Executive Vice President with Bank OZK. He also operates a family farm and owns residential rental property. His previous work experience may be the most interesting of any member of the legislature.

As a young man, Hill joined the Professional Rodeo Cowboys Association and competed on the professional rodeo circuit as a professional bull rider for four years. During that time he married his wife, Cynthia, who was a professional barrel racer. After a professional rodeo career, he returned to Cabot. He was hired by SF Services and was the company’s youngest general manager. For 10 years he managed three stores in central Arkansas before transferring into banking.

Hill is co-chair of the powerful Joint Budget Committee and chairman of the Senate Insurance and Commerce Committee.

Additionally, he is a member of the Senate Transportation, Technology and Legislative Affairs Committee, the Joint Energy Committee, the Senate Rules, Resolutions and Memorials Committee and the Arkansas Legislative Council.

He is also the Majority Whip of the 94th General Assembly.

REP. HOWARD BEATY, JR. R-Monticello State Representative Howard Beaty, Jr. is the President of the Crossett Economic Development Foundation and has more than 30 years of experience in banking and economic development.

Beaty is the Vice-chair of the House Revenue and Tax Committee and a member of the House Agriculture, Forestry and Economic Development Committee.

In his hometown of Crossett, he is a board member of the Friends of the Crossett Public Library and the Crossett Rotary Club and has been called upon to serve in a variety of community leadership and servant roles over the years. He's active in his church, First Baptist Church of Crossett, where he serves a trustee, chair of the facilities use committee, and a member of the budget committee. He holds a bachelor’s degree in Accounting from Louisiana Tech University.

THE ARKANSAS BANKER

• 37

THE 94TH GENERAL ASSEMBLY

Legislation

Affecting Banks →←

SENATE BILL 418

This bill would put the Arkansas Securities Department under the supervision of the Arkansas Bank Department.

The biggest aspect of this measure deals with loan officers who leave their organizations and their rights to engage in mortgage loan activity. The bill states that “if the employment of a loan officer or transitional loan officer is surrendered or canceled, then the sponsor [a mortgage broker or mortgage banker] shall terminate the sponsorship of the loan officer or transitional loan officer with the [bank] commissioner within thirty (30) days from the date that the loan officer or transitional loan officer ceased to be employed or ceased activities for the sponsor. The termination of a sponsorship extinguishes the right of the loan officer or transitional loan officer to engage in any mortgage loan activity.”

HOUSE BILL 1431

HB 1484

Sponsor: Sen. Jonathan Dismang, Rep. John Maddox AN ACT TO TRANSFER THE ADMINISTRATIVE FUNCTIONS OF THE STATE SECURITIES DEPARTMENT TO THE STATE BANK DEPARTMENT; TO AMEND THE LAW CONCERNING THE ORGANIZATION OF THE STATE SECURITIES DEPARTMENT; AND FOR OTHER PURPOSES.

Sponsors: Rep. Robin Lundstrum, Rep. John Maddox, Sen. Clint Penzo

Sponsors: Rep. John Maddox, Sen. Jonathan Dismang

AN ACT TO AMEND DEFINITIONS UNDER THE ARKANSAS TRUST CODE; TO AMEND THE ARKANSAS TRUST CODE TO ALLOW FOR THE DECANTING OF TRUSTS; AND FOR OTHER PURPOSES.

AN ACT TO AMEND THE LAW CONCERNING THE OPERATION OF BANK FACILITIES; AND FOR OTHER PURPOSES.

This bill redefines a number of areas of the Arkansas trust code. Specifically, it offers new definitions and requirements for a pooled trust, second trust, special needs trust, third-party trust and unitrust.

If an Arkansas bank is required to temporarily close a branch office in another state due to an event beyond a bank's control (such as an emergency), then upon written permission by the Bank Commissioner, the bank may close a branch office temporarily if the services at the site are expected to be restored in a timely manner.

HOUSE BILL 1439 Sponsors: Rep. John Maddox, Sen. Jonathan Dismang AN ACT TO MODIFY THE FAIR MORTGAGE LENDING ACT; TO CLARIFY THE PROCESS OF SPONSORSHIP UNDER THE FAIR MORTGAGE LENDING ACT; AND TO AMEND THE REQUIREMENTS FOR A LICENSE UNDER THE FAIR MORTGAGE LENDING ACT. 38 • SPRING 2023

A branch office shall not be closed for more than three consecutive business days due to a temporary interruption in service.

The commissioner may grant an extension for a bank to close a branch office temporarily for an additional two business days if the bank submits a written request that demonstrates the necessity for a longer closure period.

"Business day" means Monday through Saturday, except for a state or federal holiday.

INDUSTRY U P DAT E S

PROPERTY APPRAISER SHORTAGE

A Problem in Rural Arkansas

by George Jared

W

hen banks make loans for property typically an appraisal is needed. If the transac-

tion is $500,000 or less, the loaning institution can do it in-house. For transactions that exceed that amount, an independent appraiser has to be hired.

In urban areas it’s not a significant issue, Arkansas Bankers Association Chairman Randy Scott, president and CEO of Farmers Bank & Trust in Blytheville, said. But in rural areas there are fewer licensed appraisers and it is leading to serious problems, he said.

“Cities like Little Rock and Fayetteville have plenty of appraisers,” he said. “There’s no shortage of them in Northwest Arkansas.

Where we are seeing a major problem is in rural areas.”

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A home or other property appraisal is a licensed or certified appraiser's opinion of a home's value, according to Nerdwallet. The appraisal is based on research of recent sales of comparable homes in the area, an analysis of the property and the appraiser's judgment.

The mortgage lender requires an appraisal to help gauge risk of making a loan. The property serves as collateral in case the borrower defaults, so the lender wants to make sure the loan isn't too big compared with the property's value, Nerdwallet reported.

Appraisal fees can vary from state to state based on several factors, including what type of loan is being sought. Most residential appraisals in Arkansas fall in the $300-$700 range, while commercial appraisals can be higher.

“There are several appraisers in Jonesboro, but they have so much work there that they don’t want to drive an hour away to do an appraisal in Blytheville. Banks have to bring in appraisers from larger cities such as Atlanta and Detroit.”

Mississippi County, where Scott lives, has one appraiser, he said. There are several appraisers in Jonesboro, but they have so much work there that they don’t want to drive an hour away to do an appraisal in Blytheville, he said. Banks have to bring in appraisers from larger cities such as Atlanta and Detroit. This drives up costs, but more importantly it takes a lot of time.

“It can take months to get one done.

When it takes months, deals can fall through,” he said.

Arkansas has various classifications for different appraisers, according to the Arkansas Appraiser Licensing and Certification Board (AALCB). To become certified, one must have a college degree and complete a specific number of hours in core training classes. The classes include basic appraisal practices and procedures, market analysis, residential sales, statistics, finance, and others. To become a certified

residential appraiser, or CRA, many hours of apprenticeship are required.

“One thousand five hundred (1,500) hours of experience obtained during no fewer than twelve (12) months is required.

While the hours may be cumulative, the required number of months must accrue before an individual can be certified,” the AALCB reported.

The qualifications to become a certified general appraiser require a 3,000-hour apprenticeship during at least 18 months.

More core training classes are required, too.

The apprenticeship requirement is the problem, Scott said. For many years certified appraisers didn’t want to take on apprentices. The reasoning was simple, Scott said.

“Well, they didn’t want to train their competition,” he said.

The Baby Boomer generation retirement has had a significant impact on the appraiser industry in rural Arkansas, Scott said. One way to combat the problem would be to eliminate the apprenticeship requirement, he said. But, it’s a federal regulation, meaning it will be difficult to change.

“There are a lot of occupations that only require you to get the education and take an exam to become certified. I don’t see why this should be any different,” he said.

The appraiser shortage extends far beyond the Natural State. Fannie Mae reported that in 2013 there were 44,000 certified appraisers nationwide. By 2021, the number had dropped to 40,000.

One way large lenders such as Fannie Mae and Freddie Mac are combating the problem is to allow for more “desktop

appraisals,” according to Bankrate. Instead of physically touring properties for sale, appraisers will inspect listing information and other data from their work stations, said Sandra Thompson, acting director of the Federal Housing Finance Agency.

“This can help each appraiser complete more loans in a day, and it can also help rural communities more readily obtain a necessary appraisal when the borrower is purchasing a property,” Thompson told mortgage bankers at a conference last week.

A desktop appraisal is an assessment of a property’s value by a professionally trained and licensed or certified appraiser that takes place remotely, according to Orchard, a service company that helps clients sell and buy homes. Instead of conducting an in-person inspection of the property, appraisers use a variety of digital data sources to complete their valuation, such as photos, floor plans, tax records, and information obtained through the Multiple Listing Service (MLS).

Desktop appraisals cost less and can remove some bias from the process, Orchard reported.

“There is growing evidence that desktop appraisals are just as accurate, or even more accurate, than the traditional version,” according to Orchard. “The real estate industry has begun to contend with its long history of discrimination in recent years.

Appraisal bias – or the undervaluation of homes of people of color due to ethnic or racial bias – is one example of the many obstacles homeowners of color can face when buying or selling their homes.”

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WOMEN IN BANKING C O N F E R E N C E

PHOTOS: (From left to right) Patty Romero; (L-R) Adrienne L. Baker, Lorrie Trogden, and Melissa Casey; State Bank Commissioner Susannah Marshall; panel speakers (L-R) Lorrie Trogden, Rosalind Mouser, Anna Beth Gorman, and Adrienne L. Baker; Abby Truhart; Erica Montenegro and Dima Ghawi; attendees listened to speakers, interacted with the panel, and enjoyed conversations with their peers at this year’s conference.

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MARCH 16, 2023

C L IN TON P RE S ID E NTIAL CE NTE R • LITTLE RO C K

PHOTOS: (From left to right) Latrecia Branch; Becky Hutchins (left) and Ivette McClain breaking glass vases; Jakee Weast; around 200 attendees gathered at the Clinton Presidential Center; Diana Strong demonstrates self-defense; Dima Ghawi.

photography by Michael Pirnique THE ARKANSAS BANKER

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NEWS & MOVES SBA NAMES PENNINGTON NEW LENDER LEADER

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Christian Pennington

Lender Relations Specialist

he U.S. Small Business Administration (SBA) Arkansas District Office added Christian Pennington as a new Lender Relations Specialist. He served for six years as the Lender Relations Specialist and Public Information Officer in the SBA Boise District Office. He has also worked in the SBA Office of Disaster Assistance as a disaster loan analyst for Hurricane Harvey and Hurricane Irma.

Prior to joining the SBA, Pennington worked at Louisiana Economic Development Corporation as a Loan & Investment Officer. He worked on various Louisiana state programs to aid financing to small business and lending programs to recruit business to the state.

In his role of Lender Relations Specialist at the SBA Arkansas District Office, Pennington will conduct training and familiarize potential new and existing banks with SBA loan programs and offerings to ensure small businesses are able to access the money they need to start, grow, and expand.

PENNINGTON WILL CONDUCT TRAINING AND FAMILIARIZE POTENTIAL NEW AND EXISTING BANKS WITH SBA LOAN PROGRAMS AND OFFERINGS.

FARMERS & MERCHANTS BANK APPOINTS THREE COMMUNITY BANK PRESIDENTS

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he Board of Directors of Farmers & Merchants Bank and The Bank of Fayetteville announced the promotion of three employees to the role of community president, where they will oversee retail and lending operations in growing markets across the state.

Kyle Pattillo is the community president for Farmers and Merchants Bank’s Northwest Arkansas market and will oversee operations in Bentonville and Rogers. With more than 20 years of experience in the Northwest Arkansas real estate market as a

lender, broker and appraiser, Pattillo specializes in commercial real estate, development and construction loans.

Marlin Boyle will lead operations as community president for Morrilton and Perryville in Farmers and Merchants Bank’s Western market and specializes in commercial lending. He is a graduate of Morrilton High School and Arkansas Tech University, where he earned a bachelor of science in business.

Tyler Cox has been named the Prairie County community president for the bank’s Southeast Arkansas market, where he also focuses on commercial, agriculture and mortgage lending. Cox, a Des Arc native, earned a bachelor’s in agricultural business from Arkansas State University.

SIGNATURE BANK ANNOUNCES

NEW MORTGAGE DIVISION PRESIDENT

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ayetteville-based Signature Bank of Arkansas has promoted Kim Whedbee to president of its mortgage division.

According to the bank, her predecessor, Christine Morrison, has retired from the mortgage industry

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but not from Signature Bank. She has accepted a new role within the human resources department.

Whedbee has worked for the bank since 2014. She’d previously been a mortgage underwriter and a mortgage lender. She’s worked for multiple banks in her 26-year career.

SOUTHERN BANCORP COMMUNITY PARTNERS

NAMES WONDA LONDON COMMUNITY INCLUSION LENDER

S Wonda London Community Inclusion Lender

outhern Bancorp Community Partners (SBCP) announced Wonda London as its newest Community Inclusion Lender. SBCP is the nonprofit arm of Southern Bancorp, a community development financial institution. London will be based out of Southern Bancorp’s new 12th Street branch in Little Rock, primarily serving that market and surrounding areas.

“We’re excited to bring Wonda’s skillset and experience to Southern Bancorp Community Partners, as well as her heart and passion for helping to provide financial tools and resources to best serve the needs of the underserved and unbanked, which directly aligns with the mission of Southern,” said Ralph Brown, SBCP’s Chief Lending Officer. “I couldn’t be more excited to have Wonda as an integral part of my team and look forward to seeing her thrive in this new role and the positive impact she will make in the Little Rock community.”

London, a native of DeWitt, brings more than two decades of combined experience in business

development, relationship management, banking, lending, and credit analysis. Most recently, London served as a Claims Analyst for Priority1, and before this worked as a Consumer Underwriter for Simmons Bank, a Contact Center Consultant for Arkansas Federal Credit Union, an Acquisition Analyst for Ally Financial, Inc., and a Student Loan Assistant for Regions Bank.

In the Community Inclusion Lender position, London will work to increase the awareness of SBCP’s loan products and financial development services within her market, with a targeted emphasis on low- and moderate-income borrowers and communities with less access to responsible financial resources.

Additionally, she will assist the institution with recruitment efforts, provide financial development services such as credit counseling, and facilitate financial literacy programs such as economic skills classes and financial education training sessions.

FORMER COMMERCE SECRETARY MIKE PRESTON JOINS STEPHENS INC.

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ormer Arkansas Secretary of Commerce and Arkansas Economic Development Commission director Mike Preston joined Stephens Inc. to start a new Site & Incentive Advisory (SIA) practice.

Preston served eight years as AEDC director for former Gov. Asa Hutchinson. After government reorganization in 2019, Preston served as Commerce Secretary. He will be based in Little Rock.

The new Stephens SIA group will advise businesses on their growth strategies by helping them understand the opportunities and challenges with site selection. This will include navigating complex incentive plans and assistance with negotiations in

order to produce optimal solutions for their shareholders, the company said.

“Mike has built considerable expertise in understanding what is important to a company seeking to expand geographically,” said Brad Eichler, executive vice president and head of Investment Banking. “This expertise includes not only site selection but a thorough understanding of the workforce and incentive programs. We believe this expertise will be beneficial to clients throughout the country. We are excited to have someone of Mike’s caliber and reputation join our team, and to offer his skillset for the benefit of our corporate clients.”

“MIKE HAS BUILT CONSIDERABLE EXPERTISE IN UNDERSTANDING WHAT IS IMPORTANT TO A COMPANY SEEKING TO EXPAND GEOGRAPHICALLY.”

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NEWS & MOVES ARVEST BANK PROMOTES

YANCY IN JONESBORO

A

Chad Yancy

Vice President, Mortgage Lending Supervisor

Destiny DeClerk Mortgage Lender

rvest Bank promoted Chad Yancy to vice president, mortgage lending supervisor. Yancy has 10 years of industry experience and most recently served as a mortgage lending supervisor. In his new role, Yancy will be responsible for supervising the mortgage lending team in the northeast Arkansas region. He holds a bachelor’s degree in business administration from Arkansas State University.

Destiny DeClerk was hired as a mortgage lender in Jonesboro. DeClerk has nearly three years of industry experience and will be responsible for building relationships with customers to help them purchase homes. She holds an associate degree in general studies from Black River Technical College and is expected to receive a bachelor’s degree in business administration from Arkansas State University in May 2023.

STATE BANK DEPARTMENT

ANNOUNCES ADDITIONS, PROMOTIONS

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he Arkansas State Bank Department has promoted Kendal Williams to Bank Senior Examiner. The department has also promoted Tanner Ballard, Lane Hardee, Reed Middleton, and Patrick Seung to Assistant Bank Examiner positions.

Williams earned a Bachelor of Finance with emphasis in banking from Arkansas State and serves as a Bank Senior Examiner in the Little Rock office.

Ballard earned a Bachelor of Science in Finance with a concentration in Financial Management from Arkansas State University and serves as an

Assistant Bank Examiner in the Jonesboro office. Hardee earned a Business Administration Degree in Innovation and Entrepreneurship from the University of Central Arkansas and serves as an Assistant Bank Examiner in the Little Rock office.

Middleton earned a Bachelor of Science in Finance with an emphasis in Financial Management, along with a triple minor in Business Management, History, and Political Science from Arkansas State University and serves as an Assistant Bank Examiner in the Jonesboro office. Seung earned a Bachelor of Business Administration in Management Information Systems and a Master’s in Information Systems from the University of Central Arkansas He will serve as an Assistant Bank Examiner in the Springdale office.

RENEE WALTERS NAMED CHIEF RETAIL OFFICER FOR CHAMBERS BANK

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hambers Bank promoted Renee Walters to Chief Retail Officer, a newly-created position that will oversee the retail banking operations of the bank’s 24 branches. Walters will now serve on the bank’s executive committee as a member of senior management.

Walters has been at Chambers Bank since 2004, serving as a loan assistant, executive assistant, regional

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retail manager and SVP/director of retail banking prior to her recent promotion.

“Renee has long been an important member of our management team,” President Mike Donnell said. “She is an exemplary leader, and her dedication to maximizing our team to provide the best customer service is unmatched. I know that she will continue to serve Chambers Bank and our customers well in her new role.”

Chambers Bank is a community-focused financial services company headquartered in Danville.

Matt Mason

Northwest Arkansas Market President

Jennifer Hardin

Chief Operations Officer

Tyler Morgan

Chief Risk Officer

MATT MASON RETURNS TO BANK OF FAYETTEVILLE AS NWA MARKET PRESIDENT

S

tuttgart-based Farmers and Merchants Bank (F&M) announced the hiring of former commercial lender Matt Mason as Northwest Arkansas market president. He succeeds Jennifer Hardin, who has been promoted to the company’s chief operations officer. F&M also announced Tyler Morgan’s promotion to chief risk officer.

Mason will oversee the bank’s retail and lending operations at nine locations in Northwest Arkansas.

F&M acquired The Bank of Fayetteville (BOF) in November 2015 but BOF maintained its trade name doing business in eight branches — five in Fayetteville and one each in Farmington, Prairie Grove and West Fork. F&M also has a full-service branch on Walton Boulevard in Bentonville.

Mason has 27 years of banking experience in Arkansas and Oklahoma. He previously worked at BOF as the senior vice president for commercial loans before leaving for Claremore, Okla., where he has worked as the executive vice president and market president for RCB Bank for the past 13 years. His work experience also includes Arkansas’ agricultural industry, with stints as an economist for the University of Arkansas Cooperative Extension Service and a grain merchandiser.

Hardin brings over 25 years of experience to her new role as COO. Since starting her career with The Bank of Fayetteville as a part-time teller after high school, Hardin has worked as a loan processor, lender, branch manager and as vice president and retail operations officer. She had been market president for the past two years.

Morgan joined F&M in 2018 and, most recently, was the bank’s chief security officer. He comes to his new role with eight years of experience in the financial industry and 12 years of history in the risk and security fields.

FEDERAL RESERVE PROMOTES

MATUSCHKA BRIGGS TO SVP IN LITTLE ROCK

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atuschka Lindo Briggs has been promoted to Senior Vice President, Regional Executive for the Little Rock Branch of the Federal Reserve Bank of St. Louis.

In a note from the Fed, the promotion was made in recognition of her outstanding performance since taking on her new role in June 2022.

Briggs’ responsibilities include representing the St. Louis Fed with business leaders, bankers, local government officials, and other

key stakeholders, and through public speeches and local events. She also supports the Little Rock Branch’s Board of Directors.

Briggs joined the Federal Reserve Bank in 2015 as a relationship manager and became Director of Community Development, Special Projects, and Strategic Support in April 2020. Prior to coming to the St. Louis Fed, Briggs was a television and radio reporter in Des Moines and St. Louis.

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NEWS & MOVES

Joe Dunn

Blake Fletcher

Chief Lending Officer

Little Rock Market President

Sandy Straessle

Chief Retail Banking Officer

STONE BANK ANNOUNCES

3 SENIOR STAFF PROMOTIONS, NEW HIRES

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tone Bank announced that three senior officers have been promoted to new positions. Joe Dunn, a SVP and Senior Lender, has been elevated to the position of Chief Lending Officer. Blake Fletcher, SVP and Senior Lender at the bank’s Little Rock location, will now serve as Little Rock Market President. Sandy Straessle, SVP of Retail Banking, assumes the position of Chief Retail Banking Officer.

Chad Daniel was named a Senior Vice President and Guaranteed Loan Officer covering South Arkansas specializing in ag lending and FSA guaranteed loans. He was formerly a senior vice president with First Western Bank in Rogers and is a graduate of Southern Arkansas University with a bachelor’s degree in agriculture business.

Matthew Stewart, Sr., joined the Stone Bank SBA lending team as Senior Relationship Manager and

Michael Oppel is joining the bank as a vice president and loan officer in the USDA Government Guaranteed Loan Division.

Stewart has an undergraduate degree from Baylor University and holds an MBA from Tarleton State University. He was formerly with Bank of the West.

Oppel holds undergraduate and graduate degrees from Valdosta State University and was formerly associated with Colony Bank.

Trey Scallion has joined Stone Bank as a loan officer at the bank’s White Hall location. He was most recently affiliated with Sanders Farm in Altheimer.

Scallion is a graduate of Arkansas State University and received a Bachelor of Science degree in Agriculture Finance.

Stone Bank is a $670 million bank with locations in Mountain View, White Hall, Harrison, Little Rock, DeWitt and Gillett.

STONE BANK IS A $670 MILLION BANK WITH LOCATIONS IN MOUNTAIN VIEW, WHITE HALL, HARRISON, LITTLE ROCK, DEWITT AND GILLETT.

COLTEN NIX JOINS

FIRST COMMUNITY BANK

F Colten Nix

Assistant Vice President / Treasury Management Sales

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irst Community Bank announced that Colten Nix has joined the bank as assistant vice president, treasury management sales for the financial institution’s full-service branch location at 17820 Chenal Parkway in Little Rock. Nix will also serve the Conway area.

In his role, he will introduce customers to the organization’s product offerings included in the treasury management suite. Nix joins First Community Bank

with previous banking experience as well as a background in real estate sales. He earned his bachelor’s degree from Arkansas State University.

“Colten shares a passion for our vision of offering our customers big bank expertise with community bank service,” said René Julian, community president in Little Rock for First Community Bank. “Because of that, he’s been a great addition to our family of professional community bankers.”

ST. LOUIS FED NAMES CHANGES TO LITTLE ROCK BRANCH BOARD

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he Federal Reserve Bank of St. Louis has announced the following changes to its Little Rock Branch board of directors: Vickie D. Judy, chief financial officer and vice president at America’s Car-Mart Inc. in Rogers, has been elected board chair for 2023 by the Branch board of directors. She has served on the board since 2018.

Christopher B. Hegi, president and CEO of First Financial Bank in El Dorado, has been reappointed by the St. Louis Fed board of directors to a three-year term.

Allison J. H. Thompson, CEO of the Economic Development Alliance for Jefferson County, Arkansas in Pine Bluff, has been appointed by the Federal

Reserve Board of Governors to a three-year term.

Also serving on the board are: Jamie J. Henry, vice president of finance, Emerging Payments at Walmart Inc. in Bentonville; Jeff Lynch, president and CEO of Eagle Bank & Trust Co. in Little Rock; Denise Thomas, CEO of World Trade Center Arkansas, University of Arkansas, in Fayetteville.; and Darrin Williams, CEO of Southern Bancorp Inc. in Little Rock.

U.S. TREASURY EXPANDS

SMALL BUSINESS SUPPORT PROGRAM IN ARKANSAS

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he U.S. Treasury Department announced Thursday (Feb. 23) approval of five additional state and territory plans for up to $339 million in funding under the State Small Business Credit Initiative (SSBCI), a part of President Joe Biden’s American Rescue Plan.

Arkansas was approved for up to $81.6 million under the plan. Guam, Rhode Island, the U.S. Virgin Islands, and Wisconsin were the other states and territories with approved plans. In total, the U.S. Treasury has approved $6.6 billion under the program.

The funds will reportedly be targeted at minority and women business owners.

The funds in Arkansas will be used to operate seven SSBCI programs. Those programs include a capital access program, two loan participation programs, two loan guarantee programs, and two equity/venture capital (VC) programs.

Arkansas allocated $15 million to a loan guarantee program and $7.5 million to a loan participation program that are each designed to reach underserved businesses, the Treasury reported. The equity/venture capital programs, allocated a

combined $46 million, will target investments of $1 million in Arkansas-based, high-growth companies raising venture capital and will capitalize seed and early-stage venture funds focused primarily on investing in Arkansas-based companies.

The American Rescue Plan reauthorized and expanded SSBCI, which was originally established in 2010 to increase access to capital for small businesses and entrepreneurs. The new SSBCI has provided $10 billion to states, the District of Columbia, territories, and Tribal governments to increase access to capital and promote entrepreneurship, especially in traditionally underserved communities as they emerge from the pandemic.

ARKANSAS TO RECEIVE $424,000 IN CRYPTOCURRENCY SETTLEMENT

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he Arkansas Securities Department (ASD) recently issued a consent order against the cryptocurrency platform Nexo Capital Inc. (Nexo), regarding unregistered offers and sales of securities in the form of digital asset investments.

Nexo, a Cayman Islands corporation established in 2018, provided crypto-asset-related financial services including investing, trading, borrowing, and lending, to retail and institutional customers in the U.S. Nexo was alleged to have failed to comply with state registration requirements and, as a result, Arkansas investors were sold unregistered securities in violation of Arkansas law and additionally were deprived of critical information and disclosures

necessary to understand the potential risks of an Earn Interest Product (EIP) program.

Nexo agreed to pay $22.5 million to settle the allegations with the 53 U.S. NASAA-member jurisdictions and will pay a fine of $424,528.30 to the Arkansas Securities Department. Further, Nexo will cease offering and selling the EIP or accepting further investments in the EIP until such activities are compliant with applicable state and federal securities laws.

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50 • SPRING 2023