Steve Brawner, Latrecia Carroll, Brad Chambless, Jake Fair, Susannah Marshall, Rob Nichols, John T. Olaimey, Tim Schenk, and Barry Thompson
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.
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Chairman’s Column Washington Update Commissioner's Column Emerging Leaders
The CFPB is eyeing changes.
Serving Veterans
Banks in Arkansas and across the nation are finding new ways to serve veterans.
Compliance
The FDIC offers guidance on ITMs. CDFI Banks
Leveraging nonprofits to meet customer needs.
Non-Competes
Litigation continues on a complicated issue.
St. Louis Fed President Alberto Musalem visits Little Rock.
Attacking the ITMs
A new security threat is emerging.
Bank Management Seminar
A recap of the annual event in Bentonville.
44 NEWS & MOVES
PRESIDENT’S MESSAGE
Lorrie Trogden | President & CEO | Arkansas Bankers Association
has seen a record number of credit unions purchasing banks.
Per S&P Global, credit unions had acquired $7.2 billion of bank assets. Credit unions are utilizing their tax-free status and exploiting government loopholes to outbid other interested parties. Each time a credit union buys a bank, those tax dollars are gone; eroding state and federal tax bases and weakening remaining community banks who are the backbones of the communities they service.
However, this issue goes beyond just tax dollars. According to the National Credit Union Administration, as of the first quarter of 2024, credit unions are holding $160 billion in commercial loans, which is more than double what they held in 2019. According to a study published in the Journal of Financial Stability, buying banks strengthens credit unions’ abilities to grow commercial lending, however, it may also weaken the system as a whole by weakening credit unions’ net worth. Commercial loans are typically riskier than real estate or credit card loans. The study indicates “business loans could be indicators correlated with more likely subsequent decreases in net worth through the larger increases in loan loss provisions related to underperforming and non-preforming loans, and through the reduction of interest income associated to non-preforming loans...business loans have an effect on future delinquency rates between two and three times higher than that of the other loans of the credit union.” Standards continue to relax and fields of membership continue to grow, which will continue to exacerbate this issue as credit unions persist in increasing commercial lending.
Another very large concern is that credit unions are not required to adhere to the Community Reinvestment Act (CRA), which requires lending and investing in low- to moderate-income neighborhoods and communities of underserved individuals.
The recent Navy Federal Credit Union scandal drives this point home. It reportedly approved 75% of white borrowers while rejecting more than half of black applicants and turning down Latino applicants at a rate approaching 50%. Navy Federal CU should absolutely be called before Congress to explain why our service men and women, including veterans, were harmed by these lending practices. Had it been subject to the Community Reinvestment Act, which it and other credit unions oppose, this may have never happened.
In my home state of Arkansas, there are still many small rural towns that have bank branches but no credit union presence, directly speaking to banks’ commitment to serve all local communities and not just the most profitable areas of the state. Because of instances like this and other problems, some states are enacting state CRA laws for state-chartered credit unions.
According to polling conducted by Morning Consult, 68% of adults said credit union customers should have the same CRA protections that banks provide, while 54% said Congress should investigate whether the credit union tax exemption is still warranted.
Lastly, credit unions are hurting their own members by denying them dividends. Instead of returning profits to members, which is one of the “benefits” of being a credit union member, they
are spending those profits on lavish buildings, executive compensation and marketing.
Northwest Federal Credit Union recently used tax-payer subsidized profits to ink a deal to secure the naming rights to the Washington Commanders stadium. It will pay $7.5 million a year for the naming rights to an NFL stadium, raising the question again of how a tax-exempt entity that is supposed to be serving low and modest means customers can afford such a whopping price tag. (Northwest CU was founded in 1947 to serve CIA employees)
Unlike other non-profit organizations, such as mine, some credit unions are also paying their board members and taking them on extravagant trips and retreats. These practices are again being subsidized by tax-paying citizens.
Unlike other non-profits, credit unions do not have to answer for these sorts of practices or prove to the IRS that they are staying on mission because they are exempt from filing a form 990. My small association with a budget of $1.6 million has to file a form 990 with the IRS that is over 40 pages long, but the $8 billion-dollar Northwest Federal CU submits nothing.
For these and a myriad of other reasons, credit unions should not be able to manipulate their tax-free status to buy banks. This harming of the financial system, their members, and the communities they live in can all be avoided. If credit unions are going to operate like banks in their product offerings, such as high-dollar commercial real estate loans, and acquisition strategies, they should be taxed and regulated like banks.
Lorrie Trogden, President & CEO
CONGRATULATIONS Graduates!
The Arkansas Bankers Association proudly congratulates Zane Ludwick and Brad Martin on their graduation from the esteemed GRADUATE SCHOOL OF BANKING AT COLORADO.
ZANE LUDWICK
ARVEST BANK Fayetteville
BRAD MARTIN
CITIZENS BANK & TRUST Van Buren
The Arkansas Bankers Association proudly congratulates Levon Ogden on his graduation from the esteemed GRADUATE SCHOOL OF BANKING AT THE UNIVERSITY OF WISCONSIN-MADISON.
LEVON OGDEN
ARVEST BANK Springdale
CONGRATULATIONS TO THE GSB SCHOLARSHIP WINNER
LYNDSAY CARTER
Chief of Staff
FARMERS & MERCHANTS BANK / THE BANK OF FAYETTEVILLE Stuttgart
2024 SCHOLARSHIP to the Graduate School of Banking at the University of Wisconsin-Madison
ABA OFFICERS
Brad Chambless, Chairman Farmers and Merchants Bank, Stuttgart
Chris Gosnell, Chairman-Elect Farmers Bank & Trust Company, Magnolia
Jason Tennant, Vice Chairman CS Bank, Eureka Springs
Scott Saffold, Treasurer Union Bank & Trust Co., Monticello
Jim Taylor, Past Chairman First Security Bancorp, Rogers
Lorrie Trogden, President & CEO
Arkansas Bankers Association, Little Rock
BOARD OF DIRECTORS
Johnny Adams, Conway
Ben Buergler, Bentonville
Latrecia Carroll, Little Rock
Asa Cottrell, Little Rock
Joe Dunn, Little Rock
Robin Hackett, Greenbrier
Heather Jones, Little Rock
Jeff Lynch, Little Rock
Katherine Mitchell, White Hall
John Olaimey, Little Rock
Calvin Puryear, Dumas
Randy Rawls, Warren
Lori Ross, Arkadelphia
Loren Shackelford, Fayetteville
Rob S. Tiffee, Little Rock
Ron Witherspoon, Little Rock
The Good, The Bad, and The Ugly
Brad Chambless | Chairman | Arkansas Bankers Association
Recently, I was addressing a group of new employees during an orientation meeting and drew looks of amazement when I said the smartphone had not been developed when I began my banking career. My point was simply that such a common piece of technology has only been in the market for about 20 years, yet it is so much more powerful than its predecessor, the telephone.
The same advances in technology apply to the world of banking and finance. Many of us have experienced the shift from the green ledger paper and calculators of yesteryear to integrated computers and software that process our work at the click of a button. Massive investments in technology have fueled the velocity of research and development at an amazing pace.
All of this new technology has brought incredible benefits and efficiencies to our industry, but it has also created a plethora of issues that cause concern. While I lack the space to discuss all these issues in depth, I do want to address some of them and how the Arkansas Bankers Association is working to provide solutions for members.
THE GOOD
Some of the great things that technological advancements have brought us include robotic process automation, Integrated Teller Machines, electronic signature capability, remote work and virtual meeting capabilities. In fact, just since the pandemic, virtual meetings have become common. I am confident that there are far more solutions being developed that will enhance customer experience, increase efficiency in product delivery, and help monitor and reduce the risk to the bank.
THE BAD
Arguably, the most prolific technology threat to banks lies in cybersecurity risk. In fact, cybersecurity risk has remained at the top of the Conference of State Bank Supervisors (CSBS) Community Bank Sentiment Survey for the past two quarters. While this threat is not limited only to banks and financial institutions, I would argue
that it is much more impactful to our industry. Banking is and always has been founded on the premise that our customers place their trust in us to keep their assets safe. As an existential threat to our industry, it is imperative that we all vigorously defend to protect our customers’ trust.
Further, while check theft, washing and altering have always plagued banks, now the ability to apply for accounts and wire money online has elevated the threat of fraud. When coupled with ATM thefts using malware and physical removal of the machines, banks are facing more risk daily. Navigating the balance between convenient products and services and the economic and reputational risk to our institutions has never been more difficult.
Two of the newest technological threats that we must deal with quickly are quantum computing and artificial intelligence (AI). As mentioned above, both technologies are rapidly developing and will affect our industry. As bankers, most of us are not equipped nor adequately staffed to have in-house technologists develop adequate mitigation tools. As a result, it is imperative that we become more proactive in our efforts to prepare for these new threats.
THE UGLY
The truth is that technology is expensive. With respect to the economic impact to our institutions, our daily technology costs have increased substantially. This led me to ask, “Are we getting the necessary solutions that we need from these companies?” After considerable discussion, I was simply not convinced. Essentially, the vast majority of our technology platforms are standard or “canned” products developed by a software engineer. Every community bank is somewhat unique, and a one-size-fits-all approach is not logical. Even assuming that we can have a custom solution created, it would involve additional expense, as you know.
The ever-changing landscape of technology and software that affects banks will continue to evolve, and we must be prepared for the rapid changes ahead. I want you to know that the Arkansas Bankers Association is committed to all member banks, and our team is working tirelessly to protect and support our industry.
REGULATIONS & LEGISLATION
We just returned from Washington, D.C., where we discussed technology and fraud with our regulators. Specifically, we addressed the disconnect between our technology vendors and some of the new banking regulations. Section 1071 of the Dodd Frank Act was again at the forefront of this discussion. But the difficulty in using technology to identify represented debit items for purposes of UDAP was a great example of our regulators assuming that our core operating systems can readily be compliant with just the flip of a switch. We all know that is simply not the case. Advocacy is the only way to ensure that our regulators understand the true impact of theory versus practice.
Likewise, the ABA team has begun strategizing to effectuate beneficial legislation in anticipation of the 2025 Arkansas legislative session. In particular, we will be seeking to strengthen criminal penalties for a variety of acts involving banks that we think are currently far too lenient and fall short of being an effective deterrent to bad actors. Alternatively, we will be prepared to defend proposed legislation that is not in the best interest of our member banks and industry. With three full months until the session begins, we are already monitoring more than a dozen potential pieces of state legislation. This looks to be a very busy year at the state level, and I want to assure you the ABA team will represent all member banks each day of the session.
Finally, one of the association’s core values is our commitment to innovation and to be visionaries of positive change. With respect to technology development and innovation, I am very excited about our collaboration with The Venture Center of Little Rock. This is an opportunity for Arkansas banks to communicate our challenges directly with technology companies so they know what solutions we’re seeking. This partnership is expected to provide member banks effective, efficient and economical solutions using technology, and I encourage each of you to reach out to myself or ABA President and CEO Lorrie Trogden to become involved with the Arkansas Banking Solutions Accelerator. As always, I encourage each of you to make your voices heard for our industry — both now and for the future.
Calendar of Events
- DECEMBER 2024
Oct
06 07
SUNDAY 8 A.M. –MONDAY 5 P.M.
ABA BANK MARKETING CONFERENCE
Explore the ever-changing terrain of bank marketing in Chicago, IL, and experience resultsoriented educational sessions you won’t soon forget. Meet like-minded leaders from across the country, have some fun, get the deep dish on hot marketing trends – and leave with rare souvenirs: actionable takeaways and inspiration to power your performance.
LOCATION: Chicago, IL
07 11
MONDAY 8 A.M. –FRIDAY 5 P.M.
GSB BANK TECHNOLOGY SECURITY SCHOOL
This state-of-the-art program will broaden your understanding of the business of banking including key drivers of bank profitability, along with an in depth, interactive and hands-on study of the latest IT security techniques and strategies. The school uses a mix of lecture, small group discussions and interactive computer labs. The hands-on, computer-based simulation labs will allow you to explore penetration and vulnerability testing, security attacks, early detection of data breaches and more.
LOCATION: Fluno Center, University of Wisconsin, Madison, Wisconsin
08
TUESDAY 9 A.M. – 4 P.M. NEW
ACCOUNT DOCUMENTATION & COMPLIANCE
This full-day program is one of the country’s most comprehensive seminars on opening deposit accounts. The session answers many of the complicated questions customers and employees ask. The 200+ page detailed manual, included in the registration and customized to your state law, has become an invaluable resource for banks across the state.
INSTRUCTOR: Matt Dickinson
LOCATION: Arkansas Bankers Association, Little Rock
17
THURSDAY 9 A.M. – 4:30 P.M.
APPRAISAL & EVALUATION COMPLIANCE
This seminar lays the foundation for risk management and is important to anyone involved in the appraisal and/or evaluation function at a bank, whether they are actively ordering/managing/ reviewing appraisals, performing/ ordering evaluations or involved in real estate lending risk management. This session will update you on current regulations and Agency Guidance including your state laws on evaluations and AMCs. It will focus on the major topics of today including Reconsideration of Value and Bias in the Appraisal Process in addition to discussing hot topics with examiners.
INSTRUCTOR: Cheryl Bonnaffons Bella LOCATION: Arkansas Bankers Association, Little Rock
22
TUESDAY 9 A.M. – 3 P.M.
2024 FDIC BANKER OUTREACH
The Arkansas Bankers Association has partnered with the FDIC to bring you these important sessions that will be tailored to directors, risk management, and consumer compliance staff to bring participants up to date on current economic trends and regulatory issues. Resource materials will be provided for future reference.
LOCATION: ABA, Little Rock
23
WEDNESDAY 9 A.M. – 4 P.M.
LENDING CASH FLOW & FINANCIAL STATEMENT ANALYSIS
During this course we’ll discuss some of the key elements in the underwriting process for Commercial Lending. Through analyzing the customer’s data we can learn to assess their capacity to repay the loan.
INSTRUCTOR: Adam Trower
LOCATION: ABA, Little Rock
24
THURSDAY 9 A.M. – 4 P.M.
INTRODUCTION TO BANK MANAGEMENT
This course will give attendees a broad knowledge of the components involved in managing a bank. It will cover Liquidity, Capital Planning, Asset Liability, Sales, Loans, and Deposits from a high level. This session is ideal for new and potential bank management, lenders, personal bankers, and operations personnel.
This conference offers a unique educational experience focused on banking industry trends, leadership development skills, and peer networking opportunities. The Emerging Leaders Section works to engage, connect, and empower banking professionals from around Arkansas to shape and lead the future of the financial industry. Get access to top industry thought leaders and grow your network. Share ideas with your peers and get strategies for solving your challenges.
LOCATION: Clinton Presidential Center, 1200 President Clinton Avenue Little Rock, AR
TUESDAY 9 A.M. – 4 P.M. ABA
SECURITY CONFERENCE
Bank security officers are challenged each day to be aware of the perils affecting their banks, while also modifying the policies, procedures, and practices to prevent losses. As we confront increasing threats worldwide, it has become more essential than ever for you and your security team to ensure your bank’s security program can address today’s wide range of physical and virtual threats. This conference will provide you with an opportunity to learn from industry experts, network with colleagues, and visit with exhibitors to see and experience the latest in products and services.
LOCATION: TBA
20
WEDNESDAY 9 A.M. – 4 P.M. ABA TECHNOLOGY
CONFERENCE
MONDAY 9 A.M. –FRIDAY 4 P.M.
COMMERCIAL LENDING SCHOOL
This school is an intensive, one-week school that exposes students to the major issues commercial lenders face. Eleven different instructional modules throughout the week along with group case study work will address multiple topics and are taught and led by top-notch banking veterans who will give you plenty of opportunity to ask questions and share concerns.
INSTRUCTOR: Mike Rushing & Ron Wasson
LOCATION: ABA, Little Rock
Stay on top of technology trends and sustain your bank’s technology strategy! Technology and innovation have been transforming financial services since long before artificial intelligence and iPhones, and your role as an IT professional is ever-changing, especially in today’s environment. This event is designed to provide support as you keep on top of technology trends, navigate the business of banking, and build your bank’s technology strategy—all to improve access and better serve your customers. This conference will provide you with an opportunity to learn from industry experts, network with IT colleagues, and visit with exhibitors to see and experience the latest in products and services.
LOCATION: TBA
AT A GLANCE
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.
DEFEND THE DUAL BANKING SYSTEM
Rob Nichols | President and CEO | American Bankers Association
Since the time of President Lincoln, American consumers have benefited from a dual banking system, made up of both state-chartered institutions and federally chartered national banks.
This system—which can trace its roots back to the U.S. Constitution—allows consumers to have more choices. It offers them a robust marketplace of banks of different sizes and business models to meet their needs. And it enables the nation’s more than 750 national banks to operate safely, soundly and efficiently across multiple jurisdictions under the supervision of the OCC, while at the same time allowing state banks to serve their communities with local supervision.
But this system, which has served our country well for more than 150 years, is now coming under threat, as lawmakers in both red states and blue states have begun to pass laws that will interfere with national bank operations, violate federal preemption and tread squarely on the OCC’s turf.
Just look at the situation currently unfolding in Illinois, with the Interchange Fee Prohibition Act that was signed into law this summer as part of the state’s budget legislation. This misguided law bans banks, credit unions, payments networks and other entities from charging or receiving interchange fees in Illinois on taxes and tips charged as part of a credit or debit card transaction.
This law—which will create unprecedented chaos and confusion for consumers and businesses if allowed to take effect—violates
multiple federal statutes, including the National Bank Act and the Federal Credit Union Act, and cannot be enforced against national banks, federal savings institutions or state-chartered banks, as well as federally and state-chartered credit unions. It also runs afoul of the Electronic Fund Transfer Act, which directly addresses the permissible amount of interchange fees for debit card transactions and does not carve out taxes and gratuities.
This law, a gift to corporate mega-retailers as part of a last-minute budget deal, is the first of its kind to pass in the nation. We can’t let it stand and run the risk other states follow, which is why ABA is fighting back.
Together with the Illinois Bankers Association, America’s Credit Unions and the Illinois Credit Union League, we filed a lawsuit challenging the law, and we are
“Banks are being asked by states to pick a side in service of performative politics rather than deliberative policy.”
seeking a preliminary injunction pausing implementation until the court can rule on the merits of our case. With top outside lawyers assisting us, we have confidence we will prevail in this case, sending a strong message to other states looking to follow Illinois’ lead.
We’ve seen a different kind of challenge to the dual banking system in other states. Florida and Tennessee have put in place their own safety and soundness tests, encroaching on the OCC’s federal overnight of national banks.
Like ABA, the OCC has taken notice.
“Just look
at the situation currently unfolding
in
Illinois
...
This misguided law bans banks, credit unions, payments networks and other entities from charging or receiving interchange fees in Illinois on taxes and tips charged as part of a credit or debit card transaction.”
We’ve been encouraged by comments from Acting Comptroller Michael Hsu noting that his agency will continue to defend the dual banking system. The acting comptroller pointed out in recent remarks that “increasingly, banks are being asked by states to pick a side in service of performative politics rather than deliberative policy.” This simply shouldn’t be the case, and we will continue to urge the OCC to exercise its authority when states cross the line.
Our dual banking system has served Americans well for decades. ABA will continue to push back against efforts to undermine that system, and we’ll keep pressure on regulators to do the same.
Email Rob at nichols@aba.com.
MAINTAINING VIGILANCE IS KEY to Cyber Security Threats
Susannah Marshall | Commissioner | Arkansas State Bank Department
Cyber security risk and the overall threat landscape continue to evolve, becoming more sophisticated with each passing day. This statement has been true for quite some time, and it is clear that cyber risk will be a significant topic for our industry for the foreseeable future. In fact, cyber risk continually ranks as one of, if not the top, risk reported by bankers in most industry surveys. Not surprising, it also ranks very high from a regulatory standpoint as well as a significant concern of the general public.
One of the primary reasons cyber risk is so impactful is because it permeates every aspect of our professional and personal lives, but of grave concern is how it impacts us in the financial services sector. Banks are trusted by their customers to protect their money, privacy and financial data. That trust is supported by a regulatory environment that requires banks to implement strong oversight and controls and operate within the bounds of laws and regulations that are in place to protect the consumer and help to ensure a safe and sound banking system.
Our society is very much “connected”, and we are becoming increasingly more dependent and reliant on technology to perform many functions in our lives, including our banking activities. Banks are heavily focused on adopting technology to improve efficiencies in operations, enhance customer experiences and meet their requests and provide innovative products and services to remain competitive. The adoption and utilization of technology provides many benefits to businesses and individuals such as easier and more timely access to banking services, personalized financial recommendations through data-driven insights, convenience, enhanced security, and faster payment processing. As a result, both banks and their customers benefit from more seamless, user-friendly experiences that are accessible anytime and anywhere.
These all represent positive advances in our industry. However, the downside of cyber risk is considerable. A cyber attack can pose significant financial, reputational and operational risk. The increased speed that enables us to more efficiently conduct our banking business also comes with risk that cyber threats are spreading just as rapidly which can impact a bank or a customer without proper cyber security controls. The vast amount of financial data within a bank that is exposed to potential cyber breaches or attacks is staggering.
The frequency of cyber attacks has reached alarming levels in recent years leading me to worry if we might become somewhat “de-sensitized” to the impacts of cyber breach notifications in the future? While customers may grow weary of these incidents, banks cannot afford the luxury of becoming complacent. Banks must remain hyper-vigilant and consistently focused on addressing cyber risk at all times and continually enhancing and elevating their cyber security posture and implementing risk mitigation tools as promptly as possible. I also
“ Banks must remain hyper-vigilant and consistently focused on addressing cyber risk at all times and continually enhancing and elevating their cyber security posture and implementing risk mitigation tools as promptly as possible.”
want to remind all banks that a proper cyber security culture is most impactful when the institution approaches it in a holistic manner. Strong cyber security programs penetrate every segment of a financial institution, from the front-line customer service staff up to the board of directors.
Overall, I am very proud of the results I’ve seen from our Information Systems examinations of your institutions and how banks are actively managing their cyber risk management processes. I want to take this opportunity to remind all institutions of the notification requirements to report computer-security incidents requirements to your federal regulatory authority and our specific requirement to also notify the Bank Department of a cyber breach. In most of the instances where we have been notified, the bank has responded swiftly and effectively, implementing their incident response plans to remediate the situation in a timely manner. We are pleased with the overall responsiveness by our Arkansas banks as it relates to cyber related events and preparedness.
With the recent announcement by the FFIEC to sunset the Cybersecurity Assessment Tool (CAT) by August 2025, community banks should begin evaluating and preparing to adopt a suitable cybersecurity framework to effectively continue to demonstrate their cyber security preparedness.
I recognize that our industry faces a multitude of operational challenges every day, and the growing risks that exist within our society’s increasing reliance and dependence on technology will continue to place significant pressure on each institution. While I am encouraged by our current position, I am fully aware that cyber security risk will remain a top priority for the industry, and maintaining constant vigilance is essential.
THE FACES OF ARKANSAS BANKING
with David Tolentino
Branch Manager
First State Bank, Ola
YOUR BANK IS A FAMILY-OWNED BANK, HOW IMPORTANT ARE FAMILY-RUN BUSINESSES TO THE SUCCESS OF OUR STATE?
Very important! As a family-owned business, it is easier to take care of our customers directly. We are able to make every encounter personable while enhancing our ability to better serve the community. All decisions are made locally.
WHAT IS THE BEST PART OF BEING A HOMETOWN BANKER?
The relationships that I am able to build and cultivate with the community. I am able to assist different generations with their banking needs. There is no better feeling than being able to help families accomplish their dreams.
WHAT ADVICE DO YOU HAVE FOR YOUNG BANKERS STARTING THEIR CAREERS?
To always be Teachable and Engaging.
WHAT DO YOU LISTEN TO ON YOUR MORNING COMMUTE?
The Dave Ramsey show. My favorite quote from him is “Quit Spending like you are in Congress.”
I ALWAYS START MY DAY WITH… Prayer because when we put God in the center of our lives everything falls into place.
WHAT GAME DO YOU ALWAYS WIN AT...AND WHAT GAME DO YOU ALWAYS LOSE AT?
I always win at Mexican Train Dominoes and Bible Quiz games, but always lose at Jenga.
“ALWAYS BE TEACHABLE AND ENGAGING.”
“I
am able to assist different generations with their banking needs. There is no better feeling than being able to help families accomplish their dreams.”
TEAMWORK AND WORKPLACE Collaboration
Latrecia Carroll | President | Emerging Leaders Section
Teamwork is one of the cornerstones of success in any organization, group, or project. It extends far beyond just working together; it’s the art of blending diverse talents, experiences, and perspectives to reach a shared goal.
Teamwork happens when individuals come together, contributing their unique strengths to a collective task. It’s not just about working on the same project but understanding that each member has a role that complements the others. Whether in a large group or a small partnership, teamwork involves clear communication, mutual respect, trust and accountability and a shared vision of success. It’s a fluid dynamic that relies on collaboration, where everyone’s contribution— big or small—counts towards the final outcome.
The power of teamwork lies in its ability to amplify the strengths of each member while compensating for individual weaknesses. Teamwork has so many benefits including Increased Creativity and Innovation, Enhanced Efficiency, Shared Responsibility and Support and Motivation.
Diverse perspectives fuel creativity. Different minds approaching the same problem can lead to unexpected, innovative solutions. Dividing tasks among team members allows for specialization, enabling people to focus on what they do best, making the process more efficient. Working together spreads the load, so no one person carries the entire burden. It builds resilience as teams can handle challenges better than individuals can. A dedicated team provides support when challenges arise and offers encouragement, which can increase motivation and job satisfaction.
As an introvert, it is natural to prefer working in solitary environments, and that is completely valid. However, being an introvert does not mean you can’t thrive in a team setting. It’s about finding your role within that team. There are ways in which introverts can adapt.
Choose Roles that Suit Your Strengths. As an introvert, you may excel in tasks requiring deep thinking, planning, and analysis. These are vital contributions to any team.
Leverage Your Listening Skills. Introverts often listen more than they speak, which can make you the most attentive person in the room. Use this to your advantage in understanding team dynamics and identifying areas of improvement.
Set Boundaries. Find ways to carve out moments of solitude to recharge while still being engaged in the team.
Fostering teamwork starts with creating a culture of inclusivity and open communication. You can encourage teamwork, even if you do not naturally gravitate towards collaborative settings.
Lead by Example. Demonstrate that teamwork does not mean constantly being in meetings. Show that working together can happen through clear communication and trust.
Create Opportunities for Collaboration. Organize structured times for team members to work together, but balance that with periods for independent work. This way, both extroverts and introverts can thrive.
Encourage Team Building. Invest time in helping team members get to know each other on a personal level. Building trust strengthens the bonds that make teamwork more natural and enjoyable.
Celebrate Collaborative Success. Acknowledge and reward when teams work well together. Highlight the strengths of individuals in the team so everyone feels valued for their contribution.
While introverts may prefer solitary work, they also have a vital role in team settings. By understanding the dynamics of teamwork, embracing your strengths, and encouraging an environment of respect and collaboration, you can help foster successful teamwork, even if it is outside your comfort zone.
“Teamwork has so many benefits including Increased Creativity and Innovation, Enhanced Efficiency, Shared Responsibility and Support and Motivation.”
ELS EXECUTIVE COMMITTEE
LATRECIA CARROLL PRESIDENT
STONE BANK
Little Rock
Group 1
AMBER MURPHY
SECRETARY/ TREASURER
FIRST FINANCIAL BANK
El Dorado
Group 3
ELS COUNCIL MEMBERS
IAN BRYAN VICE PRESIDENT
SIMMONS BANK
Russellville
Group 2
BRITT BURRIS
CONNECT BANK
Star City
Group 3
CHANCE ROBBINS
CS BANK
Eureka Springs
Group 2
JAKE EARNEY
CHAMBERS BANK
Fayetteville
Group 2
GABE ROBERTS
FIRST COMMUNITY BANK
Jonesboro
Group 1
BRITTANY HELMS
SIMMONS BANK
Little Rock
Group 1
LAUREN STATON
RELYANCE BANK
White Hall
Group 3
BRANDON KNOWLTON
SOUTHERN BANCORP
Arkadelphia
Group 3
SARAH TEFTELLER
GENERATIONS BANK
Fayetteville
Group 2
EMERGING LEADERS
Guidance on ITMs: THE FDIC’S USE ONLY AS DIRECTED
On August 9, 2024, the FDIC released a Financial Institution Letter (“FIL”) offering limited guidance on the use of interactive teller machines or ITMs. Specifically, the FDIC addressed the question of whether an ITM would be considered a remote service unit (“RSU”), which a bank may establish without approval, or a branch, which requires approval under Section 18(d) of the FDI Act.
The guidance states that an ITM would require approval as a branch unless:
• The ITM is an automated, unstaffed banking facility owned or operated by, or operated exclusively for, the bank, which is equipped to enable existing customers to initiate an interactive session with remotely located bank personnel; and
• To the extent that bank personnel have the ability to remotely assist the customer with the operation of the ITM to perform core banking functions, customers must also be able to perform such transactions without the involvement of bank personnel and must have the sole discretion to initiate and terminate interactive sessions with bank personnel
It seems, essentially, that an ITM will require a branch application unless it functions primarily as an ATM, with any interactive assistance from bank personnel being 1) unnecessary for core banking functions, 2) provided by remotely-located bank employees, and 3) initiated and terminated by the customer.
The guidance further states “This FIL relates exclusively to the applicability of section 18(d)’s branch establishment requirements to state nonmember banks.” This is an important part of the guidance, because it places substantial limits on how it can be used and clarifies that ITMs and branches are not fully interchangeable for all purposes. It also leaves several questions unanswered, so banks should be careful not to read too much into this FIL.
First, of course, this guidance can only be used by state nonmember banks. Because this is not interagency guidance, banks regulated by agencies other than the FDIC should probably consult their regulators directly.
“Although an ITM may be a ‘branch’ for purposes of whether an application is required, it may not be considered a branch for other purposes, such as the Community Reinvestment Act.”
Additionally, the FDIC does not discuss how the rules about branch closings would apply to ITMs, which leaves open questions like:
• Would closing an ITM be considered a branch closure?
• What would be the appropriate process if a bank wants to place a brickand-mortar branch at a location that currently has an ITM, or within 1,000 feet of an ITM? Would the brick-andmortar branch require an application for a new branch?
• What would be the process for a bank that wants to close a brick-andmortar branch and replace it with an ITM? Would this be considered a branch closure?
Similarly, for signage purposes, it’s probably clear that FDIC signage will be required if the ITM is taking insured deposits. It seems like an ITM would likely be in the category of “ATMs and like devices” that are considered “digital deposit taking channels” requiring the new digital sign, but clarifying guidance would be useful in this area as well.
Finally, although an ITM may be a ‘branch’ for purposes of whether an application is required, it may not be considered a branch for other purposes, such as the Community Reinvestment Act (“CRA”). Because branch locations are the basis for determining a bank’s CRA assessment areas, treating ITMs as branches for CRA purposes could have significant consequences for banks. The CRA defines a branch as “a staffed banking facility approved as a branch.” The FDIC guidance indicates that ITMs may need to be “approved as a branch,” but it is unclear whether ITMs would be considered “staffed” because of the interactive features available. Until we have further guidance on this question, it may be worthwhile for banks to include a review of potential CRA consequences when determining whether and where to place ITMs.
Because the guidance is explicitly limited only to whether a branch application is required to establish a new ITM, banks should avoid extrapolating too much from this guidance, continue to be cautious about using ITMs and, when in doubt, contact regulators for additional guidance. As always, Compliance Alliance will continue to monitor developments in this area, and provide updates as they come available. If you have any further questions, do not hesitate to let us know.
“Because the guidance is explicitly limited only to whether a branch application is required to establish a new ITM, banks should avoid extrapolating too much from this guidance, continue to be cautious.”
SERVING
VETERANS
FREEDOM ACCOUNTS FOR THOSE WHO’VE KEPT US FREE
by Steve Brawner
THERE’S A REASON FARMERS AND MERCHANTS BANK IS LOOKING FOR WAYS TO SERVE ACTIVE DUTY MILITARY PERSONNEL AND VETERANS.
“Freedom isn’t free,” said Brad Chambless, the bank’s president and CEO and the chairman of the Arkansas Bankers Association. “We want to make sure that all of our service members, active and veteran’s status, know how much we appreciate what they’ve done for our country and our ability to do what we do with our families.”
Association of Military Banks of America (AMBA)
was formed in 1959 to help banks that serve military bases and communities.
BRAD CHAMBLESS
PRESIDENT / CEO
FARMERS AND MERCHANTS BANK
CHAIRMAN
ARKANSAS BANKERS ASSOCIATION
The Freedom Checking Account is the first of what he hopes will be a suite of products and services. There are also ongoing efforts to provide general financial counseling as well as help in restoring credit.
Chambless’ bank, which has 25 branches, has partnered with the Association of Military Banks of America’s (AMBA) Veterans Benefits Banking Program (VBBP) to create a Freedom Checking Account limited to active-duty service members and veterans.
AMBA was formed in 1959 to help banks that serve military bases and communities. It and the Department of Veterans Affairs created the VBBP in 2019 to provide a marketplace of banks and credit unions serving veterans, beneficiaries, survivors and caregivers. VA monetary benefits can be directly deposited into accounts offered by participating banks and credit unions. The accounts offer debit cards so veterans can use them at ATMs or at points of sale around the world.
Last year, the American Bankers Association announced that the ABA Foundation had signed a formal agreement with the AMBA. It will serve as AMBA’s fiscal sponsor for managing the donations that fund the VBBP. The foundation also will encourage banks to participate in the program and provide access for unbanked veterans. Banks must provide free checking accounts to any veteran using direct deposit for their VA benefits and must commit to help veterans overcome obstacles to opening an account.
Farmers and Merchants Bank’s Freedom Checking Account bears interest on a monthly basis with a current annual rate of 1.78%. The bank provides free paper statements to those who want them and will refund up to $20 a month in ATM fees. Customers receive a patriotic-themed debit card. Account owners also qualify for a onetime rate bump of 75 basis points above the stated rate on any of the bank’s CD products.
Chambless said the account is the first of what he hopes will be a suite of products and services. There are also ongoing efforts to provide general financial counseling as well as help in restoring credit. The bank is trying to implement the Federal Home Loan Bank of Dallas’ Housing Assistance for Veterans (HAVEN) program. It provides grants for home modifications such as wheelchair ramps, new construction and down payment assistance. The program serves veterans, service members with a service-related disability, and families who lost a loved one between Aug. 2, 1990, and now.
Farmers and Merchants Bank is reaching out to service members to inform them about its offerings. On Nov. 5, it will launch the Freedom Checking Account at an open house for invited active and veteran service member guests in Arkansas and Prairie Counties. A speaker from Fields of Honor will do a presentation. That organization provides scholarships to families of fallen or disabled military personnel and first responders. Chambless also will be talking to veterans at the local Veterans of Foreign Wars headquarters.
Both AMBA and AFFN have programs providing $1,500 grants to military banks if the banks will match them and donate the money to worthy organizations on military installations.
Larry Wilson, chairman and CEO of Jacksonville-based First Arkansas Bank and Trust, knows from long experience that military personnel face challenges. His bank, formed in 1948, opened a branch location on the Little Rock Air Force Base in 1956, one year after the base opened.
Wilson said military spouses often must work to make ends meet. Living far away from one’s roots can create additional financial challenges. Service members often have to move, which creates expenses.
“The government pays for most of it, but still there are incidentals and a lot of expenses that the government doesn’t cover,” Wilson said.
Now with a main bank location and 20 branches, First Arkansas Bank and Trust offers veterans-specific bank accounts through AMBA’s Veterans Benefit Banking Program. Its charter, in order to have a branch on the base, requires it to offer financial counseling. Bank employees attend monthly meetings at the base to educate airmen about budgeting and saving.
Like many Arkansas banks, First Arkansas Bank and Trust also hires veterans and military spouses. The American Bankers Association has partnered with the U.S. Chamber of Commerce Foundation’s Hiring Our Heroes program to provide banking jobs to veterans, service members transitioning into civilian life, and military spouses.
Wilson serves as a board member for AMBA and also for the Armed Forces Financial Network, an electronic transfer network that provides active-duty military veterans access to ATM services and point of sale terminals located on or near overseas U.S. bases.
Both AMBA and AFFN have programs providing $1,500 grants to military banks if the banks will match them and donate the money to worthy organizations on military installations. Wilson estimated that First Arkansas Bank and Trust has donated $50,000 over 20 years. One recipient, Operation Warm Heart, helps airmen and families with emergency situations such as funerals.
Chambless wants the Arkansas Bankers Association to help the state’s banks serve veterans and current personnel. Retired Air Force Maj. Gen. Steve Lepper, president and chief executive officer of the Association of Military Banks of America, spoke at the most recent ABA Bank Management Seminar in Bentonville to give bankers a wider vision of what they can offer.
Chambless said several bankers since that presentation have asked for more information.
“We may be competitors as banks, but I’m more than willing to share my data with another bank if they’re going to reach out and try to lift a program that supports, helps and pays respect and tribute to our veterans,” he said.
LARRY WILSON
CHAIRMAN / CEO
First Arkansas Bank and Trust offers veterans-specific bank accounts ... and bank employees attend monthly meetings at the base to educate airmen about budgeting and saving.
CREDIT REWARDS CARD UNDER FIRE!
by Tim Schenk KBA General Counsel
Seven in ten people say they have a rewards, points, or cashback credit card. Folks across America use these rewards for travel, discounts at retail stores, or just to bank a few extra dollars at the end of the year. Needless to say, these unique perks are wildly popular. So why have these benefits recently come under fire from the CFPB? As usual, Rohit Chopra leads the charge of regulatory overreach under the false pretense of consumer protection.
On May 9th, the Consumer Financial Protection Bureau issued a report highlighting consumer frustration with credit card rewards programs. In its press release, the CFPB said, “Consumers tell the CFPB that rewards are often devalued or denied even after program terms are met. Credit card companies focus marketing efforts on rewards, like cash back and travel, instead of low interest rates and fees. Consumers who carry revolving balances often pay far more interest and fees than they get back on rewards. Credit card companies often use rewards programs as a ‘bait and switch’ by burying terms in vague language or fine print and changing the value of rewards after people sign up and earn them. New problems have been created by the growth of co-brand credit cards and rewards programs where consumers can transfer miles or points to merchants.”
90% OF AMERICANS MAKE PAYMENTS WITH A CREDIT OR DEBIT CARD
75% OF THOSE OPTING TO USE A REWARD CARD WITH NEARLY
“If you tell people those things are worthless, it seems easier to take them away.”
CFPB Director Rohit Chopra said, “Credit card companies promise upfront benefits for signing up and using their rewards card, but often bury complex terms in the fine print for using the rewards. The CFPB will be looking for ways to protect people’s points, stop bait-and-switch scams, and promote a fair and competitive market for credit card rewards.”
The CFPB comes to wholesale conclusions that: “Credit card issuers impose vague or hidden conditions that keep consumers from receiving rewards; Companies devalue rewards; Consumers encounter redemption issues with earned benefits; and Companies revoke previously earned rewards. If true, these conclusions are concerning and worthy of a Congressional hearing.”
So, who are these consumers being misled and having their reward points stolen? On the first page of the CFPB’s Credit Card Rewards
Issue Spotlight, the basis for the conclusions above states, “We analyzed several hundred consumer complaints relating to the administration of credit card rewards programs and identified four recurring themes that resulted in consumers not receiving the rewards.” Several hundred? Will the CFPB determine the validity of credit card rewards programs based on several hundred complaints?! I’m sure those several hundred consumers adequately represent the roughly one hundred and ninety-one million Americans with credit cards. I’m sure they represent these one hundred and ninety-one million Americans with credit cards so well that we should forego all statistical analyses such as standard deviation or a survey not based solely on complaints. I hope you can feel the sarcasm here dripping off the page.
The day before the CFPB released its “Spotlight,” the Electronic Payments Coalition (EPC) released its study, which showed that
“credit card rewards are a lifeline for working-class Americans.” Now wait. How can that be true? The CFPB just said that credit card rewards are a problem. The EPC study was conducted in the first quarter of 2024 and “represents more than half of the credit card market measured by purchase volume.” Half of the credit card market? There is no way that can be more statistically accurate than a few hundred complaints. Again, excuse my sarcasm, but this is ridiculous.
Unsurprisingly, the EPC study reached drastically different conclusions than the CFPB “Spotlight.” The EPC study found that:
• REWARDS ARE FOR EVERYONE. Since 2020, rewards card ownership has grown the fastest among the low-to-moderate (LMI) income segment. Currently, more than two-thirds of LMI cardholders own a rewards card. This result illustrates that reward cards are popular among low-income households, and reward programs do not exclusively serve upper-income customers.
• REWARDS SUPPLEMENT CONSUMER INCOME. All cardholders receive a boost to income from their rewards. Many cardholders save up rewards over months to supplement holiday and back-to-school shopping. Total rewards savings in 2023 accounted for 23% to 32% of planned holiday purchasing.
• THERE IS NO CROSS-SUBSIDY OR SO-CALLED “REVERSE ROBIN HOOD.” Rewards redemption rates are similar across income groups, suggesting that each income group is taking advantage of their rewards at the same level.
• REWARDS ARE ESSENTIAL TO LOWER-INCOME CONSUMERS. LMI accounts are most likely to redeem cash rewards, implying that this income segment uses rewards for everyday spending needs.
In short, the EPC study found that credit card rewards are valuable to customers of all demographics. This makes sense when ninety percent (90%) of Americans make payments with a credit or debit card, with nearly seventy-five percent (75%) of those opting to use a reward card.
Director Chopra expressed deep concern during his testimony in his joint hearing with the Department of Transportation that consumers were storing points that could become unusable. EPC explained that “reward cardholders often carry a balance of unredeemed rewards. This represents an important safety net for these cardholders.”
So, who is right? I tend to believe a study with a larger group of consumers whose sole identification was not a complaint. But there is a larger question: Why is this happening now?
In my personal opinion, federal agencies want to create the impression that points are worthless. If something is worthless, it is easier to take it away. As regulations such as Reg II and the Durbin Amendment loom, pressure on the card market will increase, and points, miles, and benefits will suffer. If you tell people those things are worthless, it seems easier to take them away.
Regardless of my thoughts, the reality is that if you value your points, miles and card services, let your elected officials know it before those benefits, and this argument, becomes a thing of the past.
A NONPROFIT
ALONGSIDE A CDFI MAXIMUM IMPACT FOR LEVERAGING
by John T. Olaimey President & CEO, Southern Bancorp Bank
Not long ago, a small business customer in West Memphis walked inside one of our Southern Bancorp Bank branches looking for help. Struggling through a post-pandemic economy and a slow season of the year left him short on cash and with a subpar credit history. To stay afloat, he borrowed from an online “merchant advance” company – lenders that, in many cases, function essentially as modern-day payday lenders for businesses.
Fortunately for this auto shop owner, our bank lending team has an in-house collaborator that specializes in helping people access flexible capital when a traditional bank loan may not be in the cards – Southern Bancorp Community Partners (SBCP), our nonprofit CDFI loan fund and financial development organization. SBCP’s lending team put together a responsive and responsible debt consolidation loan that was within reach of this business owner’s financial position, which allowed him to get out from under this predatory debt and put his business back on the right track.
There are countless examples like this throughout Southern Bancorp’s nearly 40-year history, from first-time homeowners to second-chance savers and small business startups to family farms. As a CDFI bank, we can support many of these customers entirely on the bank side of our operations; but plenty can still benefit from the additional support of our nonprofit CDFI, SBCP, to find their path to opportunity.
WE HAVE GROWN TO $2.6 BILLION IN ASSETS AND ORIGINATE MORE THAN 8,000 LOANS ANNUALLY, 96 PERCENT OF WHICH ARE IN CDFI TARGET MARKETS. OUR NONPROFIT HAS REACHED MORE THAN $44 MILLION IN ASSET SIZE , ORIGINATED MORE THAN 100 LOANS IN 2023, AND LED THE PREPARATION OF 4,403 FREE TAX RETURNS.
We believe the collaboration between Southern Bancorp Bank and SBCP offers a unique model for community development, blending financial services with mission-driven programs that address the broader challenges faced by our communities. This synergy allows us to make a more profound and lasting impact – one that benefits both our customers and the communities in which we operate.
One of the primary advantages of this partnership is our ability to address a wide range of community needs that extend beyond traditional banking. While Southern Bancorp Bank focuses on providing accessible financial services to underserved communities – such as affordable home loans, small business loans, checking and savings accounts, and community development – SBCP complements these efforts by providing the flexible lending of a nonprofit alongside educational programs, financial counseling, credit building, and specialized services for low-to-moderate income (LMI) families.
For example, SBCP’s financial counseling and literacy workshops equip individuals with the knowledge and skills they need to manage their finances effectively. Whether it’s our HUD-certified homebuyer counseling or credit counseling, these programs are especially critical in underserved areas, where financial education is often limited. By providing these services, SBCP helps individuals and families build a strong financial foundation, making them more likely to benefit from the slate of traditional banking services we offer.
Such benefits include building generational wealth through affordable homeownership, which frequently transpires through collaboration. Programs and services provided by SBCP, such as forgivable and repayable down payment assistance, matched savings Individual Development Accounts (IDAs), and HUD-certified homebuyer counseling,
pair hand-in-hand with our bank’s mortgage division to help folks along every step of their homeownership journey – from eliminating the barriers to entry many families face all the way to signing the mortgage documents at the finish line.
Moreover, the nonprofit status of SBCP allows it to access grant funding and philanthropic support that would otherwise be unavailable to a for-profit financial institution, even, in some cases, a CDFI. These additional resources enable SBCP to expand its programs and our overall reach to more people throughout our communities, thereby amplifying the impact of our community development efforts. The down payment assistance and IDA programs, as well as our Minority Business Empowerment Program, are made possible with the support of these grants and investments into our nonprofit.
In the banking world, many of us are sensitive to the distrust that some communities have toward banks. When the FDIC studied households that were un- or under-banked throughout the United States a few years ago, “Don’t trust banks” was the second most common reason for not having a bank account, behind only, “Don’t have enough money to meet minimum balance requirements.” There’s not one silver bullet to solve this systemic problem overnight, but from our vantage point, one of our operating arms being a nonprofit does help break down some of these perceptions.
Be it a financial workshop at a local church, free tax assistance for customers and non-customers alike, one-on-one counseling, or otherwise, our SBCP programs are often a positive first impression leading to a warm handoff to our bank side, or a lasting impression that builds a bridge over previous presumptions about banks in general. Put simply, it helps us foster more long-term relationships in the places we serve with people who view us as more than just a bank, but a true partner in their financial journey.
Our unique structure is also one of the main components to the growth we have achieved over the past decade, as well as the lofty goals we have set course toward over the next. On the bank side, we have grown to $2.6 billion in assets and originate more than 8,000 loans annually, 96 percent of which are in CDFI target markets. Our nonprofit has reached more than $44 million in asset size, originated more than 100 loans in 2023, and led the preparation of 4,403 free tax returns throughout our markets, the most we’ve ever done. Not bad for a scrappy CDFI serving primarily underserved communities.
The collaborative partnership with which we, and other banks like us, operate should serve as a successful example of how financial institutions can go beyond traditional banking to make a real difference in their communities – for the whole of their communities. By combining the strengths and mission-driven nature of a CDFI bank with the agility and flexibility of a nonprofit, we are able to better meet people where they are and address the complex and interconnected challenges that our communities face.
As we look to the future, this model of collaboration offers a path forward for other banks and financial institutions that are as committed to community development as we are at Southern Bancorp. In doing so, we can build stronger, more vibrant communities that benefit everyone.
ABOUT THE AUTHOR
John T. Olaimey, President and Chief Executive Officer of Southern Bancorp Bank, has over 20 years of experience in banking, finance, corporate law and executive management.
TO COMPETE OR NOT TO COMPETE THAT IS THE QUESTION
by Jake Fair Wright Lindsey Jennings
There has been a great deal of press and some understandable confusion about the developments surrounding non-compete agreements. So, let’s explore how this all started.
Earlier this year, the Federal Trade Commission (FTC) published a rule that would eliminate non-compete agreements. The result of the proposed rule meant that employers would no longer be able to enter into non-compete agreements with most workers and many existing non-compete agreements were invalidated (with the exception of existing non-competes for “senior management” as defined by the FTC, among other exceptions).
A number of legal challenges ensued. Specifically, the first lawsuit was filed by a tax-service firm in the Northern District of Texas, mere hours after the vote approving the rule for publication. The U.S. Chamber of Commerce and several other business organizations also filed a lawsuit in the Eastern District of Texas seeking, among other things, a declaratory judgment finding the rule to be unlawful and an order prohibiting the FTC from enforcing the rule. This second case was stayed while the first one proceeded.
Before we review the FTC rule and the recent decision by Judge Ada Brown of the U.S. District Court for the Northern District of Texas, it is important to understand the differences between
a non-compete agreement, a non-solicitation agreement, and a non-disclosure agreement.
WHAT IS A NON-COMPETE AGREEMENT?
A non-compete agreement is used to prevent a bank employee from leaving the bank for a competitor or engaging in activities that would compete with the employee’s former bank. These agreements typically prevent the employee from competing with the former bank for a specified period of time and within a certain geographic area after the employee leaves.
Courts have generally held that non-compete agreements are enforceable so long as the clause contains reasonable limitations as to the geographical area, type of subsequent employment, and the time period in which the employee may not compete.
WHAT IS A NON-SOLICITATION AGREEMENT?
A non-solicitation agreement is less constraining than a non-compete agreement, and serves to protect an employer’s existing
“The first lawsuit was filed by a tax-service firm in the Northern District of Texas, mere hours after the vote approving the rule for publication.”
customer relationships and employees. The non-solicitation agreement is a contractual obligation by a bank employee that prevents the individual from soliciting the bank’s customers, prospects, clients, or employees to conduct business with the employee or competitor. This agreement takes effect when the individual’s employment with the bank ends, and is usually for a limited duration.
WHAT IS A NON-DISCLOSURE AGREEMENT?
A non-disclosure agreement prevents bank employees from disclosing any confidential information received during their employment with the bank. This type of agreement is primarily used to prevent banks’ proprietary information from getting into the hands of competitors who often seek to gain an advantage. Additionally, non-disclosure agreements can be used outside of the employment context when interacting with third parties and seeking to protect confidential and proprietary information.
DOES THE FTC RULE APPLY TO BANKS?
Now, back to the FTC rule. The FTC describes the rule as a comprehensive rule; however, it also acknowledges that the rule does not apply to regulated financial institutions. That is because the non-compete ban applies only to entities covered by the FTC Act and banks and credit unions are excluded from FTC jurisdiction. Notably, non-solicitation agreements are also still permitted and likely not impacted by the rule.
In some other contexts, however, federal regulators are
authorized to enforce certain FTC actions against banks. In the rule, the FTC acknowledges that whether the federal bank regulators apply the rule to entities under their own jurisdiction is a question for those agencies.
It is important to note that the FTC declined to exclude bank holding companies, subsidiaries, and other affiliates of excluded financial institutions from the rule if those entities otherwise fall within the FTC’s jurisdiction. What does this mean? While banks are currently excluded from the rule, their parent companies and affiliates are subject to the non-compete ban and the FTC’s enforcement. This is an important consideration for banks – especially those with shared or dual employees involving holding companies or affiliates.
WHAT HAPPENED WITH THE TEXAS CASE?
Judge Brown initially enjoined the implementation and enforcement of the rule as to only the named plaintiffs. However, on August 20, Judge Brown entered her final ruling finding that the FTC exceeded its statutory authority and that the rule was arbitrary and capricious. Judge Brown noted the FTC’s lack of evidence as to why it chose to impose such a sweeping prohibition—one that prohibits essentially all non-competes—instead of targeting specific and harmful non-competes.
What’s next? At the moment, Judge Brown’s ruling will prevent the rule from going into effect in September as originally scheduled. It is expected that the FTC will appeal the ruling to the Fifth Circuit. There is also ongoing litigation in other federal courts. Stay tuned!
ST. LOUIS FED PRESIDENT DISCUSSES ECONOMY IN LITTLE ROCK
by Roby Brock
photos courtesy St. Louis Federal Reserve Bank
In July, St. Louis Fed President Alberto Musalem shared his views on various aspects of the U.S. economy and monetary policy during a fireside chat at the Little Rock Regional Chamber’s Power Up Little Rock event. Jay Chesshir, CEO of the Little Rock Chamber of Commerce, interviewed Musalem. The following is a partial transcript, slightly edited for grammatical consistency.
JAY CHESSHIR: One of the things that we really appreciate from you is the fact that you’re here and you want to engage with businesses in Little Rock, in central Arkansas, in Arkansas, obviously across the district. Can you give us just your thoughts as to how you envision that relationship to grow?
ALBERTO MUSALEM: I derive tremendous value from engagement. When we go to the FOMC [Federal Open Market Committee] meetings to talk about interest rates, all the presidents spend a fair
amount of time sharing at the table with each other, what we are seeing in our different districts, what we’re seeing in labor markets, what we’re seeing in inflation, what we’re seeing in wages, and a whole host of impressions. It’s really valuable data.
So just zooming out, Congress created a Federal Reserve which has the board of governors in Washington, which oversee 12 reserve banks, which are 12 reserve bank districts that span the country. The intent there was for monetary policy to reflect economic conditions in all 12 districts. So we only have one monetary policy. We can’t make monetary policy for different districts or states. It’s one monetary policy, but it’s informed by what happens in different districts and we at the Fed are accountable to the public through Congress to be transparent about what we’re doing, how we’re doing it, and why we’re doing it.
And I view the relationship with my district, which is the Eighth District, Little Rock is a part of that, as a two-way street where I come and I benefit and my team also benefits from having conversations
“I’m hearing that the turnover rate of employees has declined and .... that wage growth is returning to normal levels, pre-pandemic normal levels, which are all very encouraging things from an inflation and labor market perspective.”
with business leaders, community leaders about what’s happening on the ground, but also to explain what we’re thinking, why we’re doing what we’re doing and how we’re doing it.
CHESSHIR: As you’ve started your tenure here, and when you talk to businesses as you’re going through this learning period about this district, are you hearing any common themes or concerns from businesses that are starting to create a common thread?
MUSALEM: I’ve been to two FOMC meetings and one thing that of course I can’t say what happens in the meetings, but I think I can share this across the 12 districts, you do hear a lot of common themes. Surprisingly, you would expect to hear very different stories depending on which part of the country. But there are very some common themes. Some themes that I’ve learned about in my district are as follows.
Companies are still facing cost pressures in their inputs and also labor insurance costs are a big part of it, particularly for smaller businesses. That’s very clear. I’m also hearing that labor conditions are improving. Companies seem to be having a less difficult time in filling vacancies than they had six months, 12 months, 24 months ago when the labor market was extremely out of balance.
I’m hearing that the turnover rate of employees has declined and that’s consistent with the hard macro data that we look at. I’m hearing that wage growth is returning to normal levels, pre-pandemic normal levels, which are all very encouraging things from an inflation and labor market perspective. We, of course, are hearing that interest rates at the level that they are at is straining some balance sheets. They’re straining low- and moderate-income household balance sheets, they are straining small business balance sheets. Home builders clearly are being affected by high interest rates and they’re clearly having
a restraining impact on housing and real estate markets. These are common themes.
CHESSHIR: From our perspective in talking with not only our existing companies, but those companies that are looking at this area, this region, from the standpoint of location, it seems like people are trying to find that equilibrium as to what will this look like going forward? Recognizing something else is going to change… We’ve seen some encouraging data that what you’re doing continues to work. Based upon that, what’s your outlook for the rest of this year?
MUSALEM: I’ll talk about activity first and then inflation second. So on activity, I see the economy as continuing to grow consistent with its long-term growth rate. I see an economy this year that probably will grow between one point and a half and two percent. I don’t want to pin it to the 10th decimal point, but it’s around there. I don’t think anybody has that kind of level of precision. I don’t think the probability of a recession is very high right now. I see a labor market that is still strong. I see employment levels as high. I see monetary policy as restrictive, but not overly restrictive. I see financial conditions which are tight for some parts of the economy, but I see broader financial conditions that are either neutral or maybe even accommodative for other parts of the economy.
If you look at firms that have access to capital markets, capital markets are very buoyant right now. Firms are taking advantage of a low cost of equity or debt financing to issue meaningful amounts of debt and equity at a pace higher than the last two years. I see credit as generally available for households, businesses, and municipalities. I think putting all those things together, I don’t see a recession as highly likely. There’s a rule of thumb out there, at least when I was in the markets, it was a rule of thumb that just counting years not based
PHOTO: Jay Chesshir (left), CEO of the Little Rock Chamber of Commerce, interviews St. Louis Fed President Alberto Musalem.
on anything else, just one on average, every one in five years you get a recession, right? So what we call the unconditional probability of recession, meaning if nothing else happens, it’s like one in five, right? Twenty percent. I kind of believe that’s an appropriate number right now, a twenty percent chance of recession, eighty percent chance of no recession. I don’t see anything that would suggest it is higher probably than that in terms of inflation.
With inflation, the data has been very encouraging. The way I like to think about inflation is I try not to focus on the last data point. It’s just one data point. I try to think of what is the overall environment and what does that tell me about what inflation is likely to be twelve months from now, eighteen months from now, what we call the forecast horizon. I try to be as forward looking as I can now. Of course, the last data point does give you a lot of information about that potential path and the data has been encouraging, although I would say from my perspective, I’ll speak for myself of course, I’m not sure I would call the first four months of the year a bump in the road or an anomaly. I think we had a good six months at the latter half of last year. We had an unfavorable four months in the beginning of this year. We had two months of favorable inflation data. I think when you add it all together, we have continued progress to where we want to be, but I think it’ll be prudent to look forward to the next twelve months and think of what that environment is going to look like and what inflation may look like going forward.
CHESSHIR: There are those out there that talk about the two percent inflation target and its potential needing to be increased to three or four percent. What are your thoughts on that?
MUSALEM: I think right now we are trying to bring inflation back to two percent. I think it would be a bad idea to change the inflation target... The job is not done, but it was successful. A reason for that was because inflation expectations remain anchored, right? We never lost the general public, never lost confidence that inflation would be brought back down to target. I believe that if we begin to change the
“Every time there’s innovation like this, there’ll be a change in the match between skills of people and jobs available for people. I’m confident that over time people will re-skill and I’m confident that over time it’s going to not negatively impact employment.”
inflation target from two to three, then the next question is going to be, ‘well, why not four? Why not three and a half?’ And then it would muddy the waters in terms of the formation of inflation expectations for the general public, and people would start having difficulty entering into long-term investment project decisions or buying homes because they wouldn’t be sure what the target actually is. So I think it would be counterproductive at this stage.
CHESSHIR: I can only imagine from an economist perspective how the world has changed not only in trying to manage an economy in an effective way, but also the different tools that are used in that work. Generative AI [artificial intelligence] is something on everyone’s mind today. It’s impacting all of our lives. How do you see that impact, especially from the labor market perspective? Do you see that as a way to overcome the lack of population growth as it has slowed or do you see it as creating problems in the labor market from the standpoint of people’s jobs being lost?
MUSALEM: Let me focus on the labor market. Part of the question, I view generally AI as just another wave of innovation. In humankind’s history travel through time, there’ve been a lot of innovations that we now benefit from the wheel and then other innovations. And every time there’s been an innovation like that, I don’t see it as being negative for employment. So if the question was ‘will this negatively affect the level of employment in the economy,’ I don’t think that’s the case. I think there will be, every time there’s innovation like this, there’ll be a change in the match between skills of people and jobs available for people. I’m confident that over time people will re-skill and I’m confident that over time it’s going to not negatively impact employment.
I think AI holds tremendous promise. Like many of you, I’ve been trying to inform myself as much as I can about this development and my understanding is the combination of AI, which is the thinking - the information processing part with the robotics part - with the biotechnology part, combining all those things together holds good promise for us in terms of productivity.
PHOTO: Scott Ford (left), Westrock Coffee CEO, and St. Louis Fed President Alberto Musalem.
ATTACKING THE INTERACTIVE TELLER MACHINE
A NEW SECURITY CONCERN EMERGING IN THE PACIFIC NORTHWEST
by Barry Thompson Thompson Consulting Group
Financial institutions utilizing Interactive Teller Machines (ITMs) or Virtual Teller Machines (VTM) in thePacific Northwest are facing a pressing security challenge that demands immediate attention. Criminals have devised a simple yet effective method of robbing individuals by exploiting vulnerabilities in these systems. By merely approaching the machine and initiating a call, they are able to coerce staff into dispensing funds.
Traditionally, staff have been trained to prioritize accountholder safety and comply with demands to prevent potential harm. However, this approach has inadvertently emboldened criminals, who are now exploiting ITMs located outside of branches or at remote locations, such as drive-thru windows. It’s imperative to retrain staff to exercise caution and refrain from dispensing
funds to individuals at drive-thru windows or locations distant from the branch. The safety of tellers is not compromised in such scenarios, as the perpetrator remains miles away from the ITM Call Center. We recommend that your staff simply turn off the monitor at the ITM if anyone states this is a robbery. The robber now must determine what went wrong. Meanwhile your call
center can connect with 911 to relay details of the event. If your ITM or VTM is set up properly, you have perimeter security cameras at the location. These cameras allow your staff to describe the robber and the method they used to escape the area. At drive-thru windows you should have license plate readers to obtain the license plate number and color of the vehicle.
This method of robbery presents an attractive option for criminals due to its minimal risk and simplicity. They can execute the crime without physically entering a branch, often relying on disguises to evade identification. Concerns among staff monitoring these locations extend to the potential
A STANDARD RECOMMENDATION IS TO OFFER A LESSER SUM THAN TYPICALLY AVAILABLE AT LOCAL CONVENIENCE STORES, USUALLY CAPPED AT $500.00.
for hostage situations, where the robber may point a gun at a customer or other person who happens to be near the VTM, thus prompting a willingness to comply with demands for fear of escalating the situation. It’s crucial for financial institutions to adopt
CONCERNS AMONG STAFF MONITORING THESE LOCATIONS EXTEND TO THE POTENTIAL FOR HOSTAGE SITUATIONS... THUS PROMPTING A WILLINGNESS TO COMPLY WITH DEMANDS FOR FEAR OF ESCALATING THE SITUATION. IT’S CRUCIAL FOR FINANCIAL INSTITUTIONS TO ADOPT A PROACTIVE APPROACH TO MITIGATE SUCH RISKS.
a proactive approach to mitigate such risks. While providing a nominal amount of cash may be necessary within branches or in close proximity to account holders, it’s essential to adhere to strict guidelines. A standard recommendation is to offer a lesser sum than typically available at local convenience stores, usually capped at $500.00.
Nevertheless, every financial institution must carefully evaluate its response strategy, considering the implications of acquiescing to demands for cash. Succumbing to such demands may inadvertently incentivize further attacks on ITMs, perpetuating a cycle of vulnerability.
In conclusion, the emergence of ITM-related robberies underscores the importance of adapting security protocols to evolving threats. By prioritizing staff training, implementing stricter dispensing protocols, and fostering collaboration with law enforcement, financial institutions can effectively safeguard their assets and uphold accountholder trust in the face of emerging challenges.
ABOUT THE AUTHOR
Barry Thompson is a nationally recognized speaker, consultant, and former banker, with nearly 40 years of service to the financial institution industry. Barry’s financial services career spanned 22 years before he “retired” to establish Thompson Consulting Group, LLC, his consulting firm that assists financial institutions in competing more effectively by providing services specifically targeted to risk management and security.
2024 BANK MANAGEMENT SEMINAR
THE 81 ST BANK MANAGEMENT SEMINAR WAS HELD IN BENTONVILLE AUGUST 7 TH -9 TH
photography by Michael Pirnique
PHOTOS: Left to Right from Top: Chuck Hurt checking in at opening reception; Scott Saffold, Jay Wisener, Susannah Marshall, Cathy Owen and Dharmin Patel; ABA CEO & President, Lorrie Trogden; Chuck Morgan and Reynie Rutledge
2024 BANK MANAGEMENT SEMINAR
PHOTOS: Left to Right from Top: Davy Carter, Chuck Hurt, and Jackson Carter; ABA Chairman, Brad Chambless; Jay Wisener, Chip Blanchard, Cathy Owen, and Jim Taylor; Don Patillo and Herbert Thomas; Wilcox Marshall, Rob Robinson, Leigh Anne Robinson, and John Womack; Tim Holt, Angie Summers, Tim Nickens, and Scott Saffold.
PHOTOS: Left to Right from Top: Jessie Hogue, Darla McJunkins, and Justin Zimmerman; John Womack, Rob Husong, Tim Hunt, Steve Lepper, Larry Wilson, and Wendy Wilson; Drew Chandler and Christie Turner; Landi Mkhize and Herbert Thomas; Adam Rutledge, Susannah Marshall, and Chip Blanchard.
NEWS & MOVES
CATHY OWEN IS VICE-CHAIR NOMINEE FOR AMERICAN BANKERS POST
The American Bankers Association’s Nominating Committee has finalized the official slate of candidates to be presented for election at the association’s annual meeting scheduled for Oct. 29 in New York City.
The committee, chaired by Daniel D. Robb, president and CEO, Jonesburg State Bank, Jonesburg, Mo., nominated these candidates for ABA officer positions:
CHAIR: John C. Asbury, chief executive officer, Atlantic Union Bancshares Corp., Richmond, Va.;
CHAIR-ELECT: Kenneth Kelly, chairman and CEO, First Independence Bank, Detroit, Mich.;
VICE CHAIR: Catherine Owen, executive chair, Eagle Bank & Trust Company, and chair and CEO, State Holding Company, Little Rock, Ark.; and
TREASURER: K. Wayne Wicker, chairman and CEO, South Atlantic Bank, Myrtle Beach, S.C.
Blake Rutherford Vice President, Professional Business Development Officer
FAbby Adkins Treasury Management Sales Officer
BLAKE RUTHERFORD JOINS FIRST COMMUNITY BANK IN NWA; ABBY ADKINS PROMOTED
irst Community Bank named Blake Rutherford as vice president, professional business development officer. Based in the bank’s Northwest Arkansas market, Rutherford will help expand the bank’s business development initiatives.
Rutherford brings a diverse and accomplished background to this position. His educational credentials include an LLM, or Master of Laws, in International Law from the University of Michigan Law School, where he served as associate editor of the Michigan Journal of International Law. He earned his Juris Doctor degree from the University of Arkansas School of Law. Rutherford’s undergraduate degree, a Bachelor of Arts degree in political science, is from Middlebury College.
Professionally, Rutherford has held several high-impact positions. Most recently, he was a faculty member at the Thaden School in Bentonville, where he designed and taught courses on U.S. government, international trade, and human rights. Before that, he co-founded SourceStream, LLC, a pioneering bipartisan political live streaming network. His career also includes notable roles with Cozen O’Connor, a full-service law firm in Philadelphia and Washington, D.C., and as chief of staff for the offices of the attorney general in both Arkansas and Pennsylvania.
“We are pleased to welcome Blake to the First Community Bank family,” said Laura Brissey, executive vice president, general counsel for First Community Bank.
“His background in law, public relations, and education, combined with his commitment to community service, makes him a valuable addition to our team.”
First Community Bank also announced the promotion of Abby Adkins to treasury management sales officer. Adkins has been a member of the team, known for her outstanding customer service and commitment to community involvement. Adkins attended the University of Arkansas, where she studied in the Fulbright College of Arts & Sciences Communication department.
“Abby has shown remarkable dedication and a true passion for both her work and the community. Her energy and commitment to providing exceptional service make her an excellent fit for this role. We are excited to see her grow and continue her positive impact at First Community Bank,” said Skylar Sitton, vice president, treasury management sales manager.
Cathy Owen Executive Chair, Eagle Bank & Trust Company/ Chair and CEO, State Holding Company
RACHEL GRAHAM PROMOTED TO SALES MANAGER AT CS BANK
Rachel Graham was promoted to Sales Manager for CS Bank. In this new role, Graham will be responsible for the management and oversight of all branch sales related efforts, with a focus on matching the banks client base with the best possible products to assist with the enhancement of their financial well-being.
Graham began her banking career seven years ago at CS Bank’s Huntsville location. Since that time, she has worked in the bank’s Madison, Boone, and Carroll County markets.
“Rachel has continually shown her dedication to providing CS Bank’s customers, communities and
coworkers with the absolute best service and support. We are so pleased to announce her well-deserved advancement within our company and I look forward to her continued professional growth in this position,” said Jason Tennant, President & Chief Lending Officer for CS Bank.
She and her husband, Jacob, reside in Berryville with their daughter, Harper. She is a graduate of Berryville High School and has her Associates Degree from North Arkansas College. Graham is a member of the Arkansas Bankers Association Membership and Engagement Committee, which advocates for the banking industry at both a state and national level.
DAVID WOOD AND ALLEN WILLIAMS
PROMOTED AT FIRST COMMUNITY BANK
First Community Bank is pleased to announce the promotions of both David Wood and Allen Williams to the position of executive vice president, regional president, in their respective regions. These promotions reflect their exemplary leadership and commitment to the continued growth and success of the organization.
Wood, who joined First Community Bank in 2001, has been a cornerstone of the bank’s growth. In his expanded role, he will continue to oversee the Searcy and Cabot regions, which include Searcy, Bald Knob, Cabot, and Beebe, while now also supporting the Little Rock, Conway, and Northwest Arkansas regions, working closely with each of the community presidents under his oversight.
“I am deeply honored to take on this new role,” said Wood. “Having been with First Community Bank for nearly 25 years, I am proud of what we have accomplished and excited about the opportunities ahead.”
Williams will also expand his responsibilities, continuing to oversee the Jonesboro region, which includes Jonesboro, Bay, Lepanto, and Brookland, and now also supporting the Harrison, Mountain Home, and Missouri regions, working closely with each of the community presidents under his oversight.
“I am thrilled to step into this expanded role,” said Williams. “I look forward to continuing to work with our talented team to drive growth and success across our regions.”
Dale Cole, chairman and chief executive officer, expressed confidence in Wood’s and Williams’s abilities to lead in their new roles. “David and Allen have demonstrated exceptional dedication and leadership throughout their careers with First community Bank. Their promotions are well-deserved, and I am confident they will continue to contribute significantly to our organization’s success,” said Cole.
Rachel Graham Sales Manager
David Wood Executive Vice President
Allen Williams Regional President
NEWS & MOVES
STONE BANK ADDS THREE TO STAFF DURING QUARTER
Ben Wilburn of Lead Hill has joined Stone Bank in Harrison as a vice president and loan officer. He was formerly associated with Equity Bank as a commercial and agricultural lender and served in a similar position with Arvest Bank. Wilburn is a graduate of North Arkansas College and the University of Arkansas at Fayetteville earning both an undergraduate degree in Agriculture Business and a master’s degree in Agriculture Economics.
“We are thrilled to have someone of Ben’s caliber to join our loan team,” said Nick Roach, president
and CEO of Stone Bank. “His advanced experience in commercial and agricultural lending will be a great asset to our customers.”
Kayla Sheppard has joined Stone Bank in Little Rock as a GovernmentGuaranteed Loan Assistant. She was most recently associated with Legacy National Bank and is a graduate of the University of Arkansas with a Bachelor of Science degree in agriculture business.
Blake Dunn has joined Stone Bank in Little Rock as a teller and customer service representative. He was most recently employed as a landscaper. He is attending the University of Arkansas Pulaski Tech and is a graduate of Baptist Preparatory School. Stone Bank has locations in Little Rock, White Hall, Harrison, Mountain View, DeWitt and Gillett.
HAYLEY TRIPOD PROMOTED TO BRANCH ASSISTANT AT FNBC-JONESBORO
Hayley Tripod has been promoted to Branch Assistant at FNBC’s Jonesboro office, located at 2631 Race St.
Tripod began her career with FNBC in 2021 as a Consumer Relationship Manager II. In her new role, she will assist with general planning, oversight, product delivery and operational efficiency of the branch. She will also serve as a highly visible point of contact for potential and existing customers, working closely with FNBC-Jonesboro Community President Trent Brown.
“We are thrilled to announce Hayley’s promotion to Branch Assistant,” said Brian Emison, Senior Vice President, Operations and Chief Deposit Officer. “She has consistently demonstrated dedication, strong leadership skills, and a genuine commitment to our customers. We are confident Hayley will continue to be an invaluable asset in her new role and we look forward to seeing her continued growth and success.”
A native of Jonesboro, she is a graduate of Jonesboro High School and holds a Bachelor of Science in Business Finance from Arkansas State University.
Blake Dunn Teller and Customer Service Representative
Hayley Tripod Branch Assistant
ERICA PRESTON NAMED CHIEF
BANKING OFFICER FOR CHAMBERS BANK
Erica Preston has rejoined Chambers Bank as its chief banking officer. The newly created position will supervise the retail banking, marketing and communications, learning and development, digital banking, and business banking teams in addition to overseeing the bank’s strategic planning process.
“We are excited to have Erica back to provide guidance, vision and support for the areas that she will lead,” Chambers Bank President Mike Donnell said. “Erica and her team will play a vital role in our future growth, and I look forward to seeing them help us move forward and achieve the strategic goals of Chambers Bank.”
Preston has more than 25 years of experience in the financial services industry, starting as a part-time teller during college and working her way up through the retail banking ranks before serving as Chambers’ chief operating officer from 2015 until 2022.
She has held numerous positions with Simmons Bank in Northwest Arkansas during her career, most recently as SVP Director of Market Development.
She holds a bachelor’s degree from the University of Arkansas and is a graduate of the Graduate School of Banking at Colorado.
NIKKI HUGHES PROMOTED AT
FIRST COMMUNITY BANK
First Community Bank is pleased to announce the promotion of Nikki Hughes to senior vice president, loan administration. Hughes, who has nearly 40 years of banking experience, has been an integral part of the First Community Bank team since April 2001.
“Nikki has been a tremendous asset to our team,” said David Wood, executive vice president, regional president for the Searcy, Cabot, Little Rock, Conway, and Northwest Arkansas regions. “Her commitment to excellence and her understanding of our customers’ needs have made her an invaluable part of our organization. We look forward to the continued positive impact that she has on our bank and our community.”
Hughes graduated from the Barret School of Banking in 2005 and has demonstrated exceptional dedication and leadership throughout her career.
Born in Searcy, she has lived in the area for most of her life, surrounded by family and friends. Hughes is located at the bank’s branch at 2401 West Beebe Capps Expressway in Searcy, Arkansas.
“I appreciate that First Community Bank and David Wood have allowed me to grow with the bank,” said Hughes. “David, Keith Riley, and I transitioned together from another bank, and we were thrilled to watch the Searcy locations explode with new business. Our customers have truly supported us through the years, and we are very grateful for them. This bank consistently shows appreciation for their employees and is ever-changing to provide the latest technology and services for our customers. This has provided me with the opportunity to express to our customers how important they are to the bank and offer them the best products available in banking.”
“HER COMMITMENT TO EXCELLENCE AND HER UNDERSTANDING OF OUR CUSTOMERS’ NEEDS HAVE MADE HER AN INVALUABLE PART OF OUR ORGANIZATION. WE LOOK FORWARD TO THE CONTINUED POSITIVE IMPACT THAT SHE HAS ON OUR BANK AND OUR COMMUNITY.”
CENTER FOR TEACHING AND LEARNING WITH FIRST NATIONAL BANK DONATION
The University of Arkansas at Fort Smith (UAFS) is using a $500,000 contribution from First National Bank of Fort Smith to support strategic development that will result in better engagement between UAFS professors and students.
UAFS announced the creation of a Center for Teaching and Learning, strategic development aimed at advancing faculty expertise and student engagement through innovative educational strategies. First National Bank of Fort Smith contributed $500,000 to endow the center.
“We at First National Bank believe in the capacity of education to advance our region in ways few other initiatives can,” Bank President Sam Sicard said in a statement. “When Chancellor Riley explained the vision for the Center for Teaching and Learning at UAFS, I knew it was a way First National could invest in the future of our community, ensuring that we continue to develop knowledgeable and skilled individuals who want to live, work, and serve our region after graduation.”
“WE AT FIRST NATIONAL BANK BELIEVE IN THE CAPACITY OF EDUCATION TO ADVANCE OUR REGION IN WAYS FEW OTHER INITIATIVES CAN.”
TWO NEA BANKS WITH COMMON OWNERSHIP TO SHARE COMMON CHARTER
The holding companies of Piggott State Bank in Piggott and Farmers Bank and Trust in Blytheville announced plans to share a common charter on Tuesday (Aug. 20). The combined bank will operate under the charter of Farmers Bank and Trust, established in 1908.
Farmers Bank and Trust has seven offices in Blytheville, Gosnell, Manila and Wilson. Piggott State Bank was established in 1930 and has offices in Piggott and Rector. The two banks have shared common ownership for more than 37 years.
The consolidation, subject to standard regulatory approvals, is expected to be completed by December 31, 2024. After the charter consolidation, Piggott State Bank will operate as a division of Farmers Bank and Trust.
“We look forward to providing even greater impact on the economic vitality of Northeast Arkansas by joining forces with our sister organization,” said Cody Knight, President and CEO of Piggott State Bank. “Our ownership, operations and management will remain just as they are today.”
“Farmers Bank and Trust and Piggott State Bank have shared common ownership for 37 years and over the years we’ve shared resources, expertise, and common banking practices, benefitting customers throughout Northeast Arkansas. Operating under one charter will allow us to continue operating independently, with increased synergies of common operating systems. Our combined strength will provide an even stronger foundation of financial strength and security to our customers and communities,” said Randy Scott, President and CEO of Farmers Bank and Trust.
Both banks will continue to operate as a Community Development Financial Institution (CDFI).
An anticipated future consolidation of banking systems is expected to occur in the third quarter of 2025, when customers of both banks will be able to transact business at any of the 10 offices in Mississippi County and Clay County.
DD&F Consulting Group served as financial advisor for the transaction and McAfee & Tate served as legal counsel.
“FARMERS BANK AND TRUST AND PIGGOTT STATE BANK HAVE SHARED COMMON OWNERSHIP FOR 37 YEARS AND OVER THE YEARS WE’VE SHARED RESOURCES, EXPERTISE, AND COMMON BANKING PRACTICES, BENEFITTING CUSTOMERS THROUGHOUT NORTHEAST ARKANSAS.”
FEDERAL HOME LOAN BANK AWARDS
MONEY TO THREE ARKANSAS BANKS
Almost $3.4 million in funding was awarded to 14 non-depository community development financial institutions (CDFIs) through the Federal Home Loan Bank of Dallas (FHLB Dallas) Capacity Building and Growth Grant (CBGG) program. Three Arkansas financial institutions received over $600,000 with a half-million awarded to Southern Bancorp.
The funding is designed to help increase CDFIs’ ability to fulfill their role in supporting affordable housing, small businesses and economic development in underserved communities. These awards were made either to FHLB Dallas member institutions or through them to non-member institutions.
The 2024 award recipients are:
Fayetteville
Member: Woodforest National Bank
Awardee: Communities Unlimited Inc.
Monetary Grant: $92,500
Little Rock
Member: Simmons Bank
Awardee: Arkansas Capital Corporation
Monetary Grant: $41,000
Member: Southern Bancorp Capital Partners
Awardee: Southern Bancorp Capital Partners
Monetary Grant: $500,000
“This is a unique way for the Bank to support non-depository CDFIs in our five state District. We believe these grants will strengthen these non-depository CDFIs for the critical work they do,” said Greg Hettrick, senior vice president and director of Community Investment at FHLB Dallas.
The maximum monetary grant for non-depository member CDFIs is $500,000 and $100,000 for non-depository non-member CDFIs. Non-depository CDFIs are often nonprofit loan funds and depository CDFIs consist of federally regulated institutions such as banks and credit unions.
GRAND SAVINGS BANK TO OPEN IN
CENTERTON
Oklahoma-chartered Grand Savings Bank will open a new location this fall in Centerton. The full-service branch will be at 192 E. Centerton Boulevard. The location, formerly a Legacy National Bank branch, will serve consumer and commercial customers.
The new Grand Savings Bank branch will be led by a team that includes vice chairman Tyler Steele and market president Tommy Coughlin. Additional team members and grand opening dates will be announced soon.
THE FUNDING IS DESIGNED TO HELP INCREASE CDFIS’ ABILITY TO FULFILL THEIR ROLE IN SUPPORTING AFFORDABLE HOUSING, SMALL BUSINESSES AND ECONOMIC DEVELOPMENT IN UNDERSERVED COMMUNITIES.
“As a community bank, we’re always looking for ways to invest in our communities,” said Guy Cable, CEO of Grand Savings Bank. “We understand the importance of having a trusted and accessible banking partner, and we are excited to provide great, personalized service to the Centerton community at this new branch of GSB.”
The new location will mark the bank’s 15th opening in its expansion into Northwest Arkansas, northeast Oklahoma, and the Fort Smith metro area. Currently, Grand Savings Bank has 13 locations and 13 ATMs in these areas. When it opens this fall, the new branch will have a staff of 12.
