The Arkansas Banker Winter 2024

NEW ADMINISTRATION, NEW AGENDA

How Trump Will Change Regulation

MR. CHAIRMAN

U.S. Rep. French Hill Readies for the Gavel

Session Starts

ARKANSAS BANKERS ASSOCIATION STAFF

President/CEO

Lorrie Trogden

VP/Controller

Carla Brinkley

VP/Professional Development

Kami T. Coleman

Office Manager

Peggy Hooper

Fundraising and Member

Services Associate

Whitney Horton

Administrative

Support Specialist Abi Johnson

EDITORIAL STAFF

Editor Roby Brock

Creative Director / Designer

Ashlee Nobel Lee Lee Arts + Design

Contributing Writers

Ian Bryan, Brad Chambless, Jacob Fair, Susannah Marshall, Rob Nichols, Tim Schenk, and Carl White

The Arkansas Banker (ISSN 004-1726) is published quarterly by the Arkansas Bankers Association, 1220 West Third Street, Little Rock, AR 72201. Phone: 501.376.3741. Periodical postage paid at Little Rock, AR. Postmaster: Send address changes to Arkansas Bankers Association, 1220 West Third Street, Little Rock, AR 72201. Subscription to The Arkansas Banker magazine is included in the membership fees to the Arkansas Bankers Association. Cover price is $5.95 each. Annual subscription rates are $40.00 for members and $60.00 for non-members.

Federal tax law prohibits the deduction of lobbying expenses for federal incomes tax purposes. Organizations like ABA, which assess member dues, are required by law to notify their members of the portion of their dues attributable to lobbing/and therefore non-deductible on your federal tax return. For the year 2023, it is estimated that 9.32% of your dues will be attributable to lobbing as defined by the IRS. Contributions to ABA are not charitable contributions, however, they may be deductible as a legitimate business expense.

A new CFPB study shows strengths and weaknesses.

Challenges for Bankers Costs and security concern community banks.

Overdrafts or Overreach?

A new standard for overdraft opt-ins. An Update on Lawsuits Court cases impacting banks.

ELS Leadership Conference Bankers convened in Little Rock to focus on leadership, trends and networking.

LPRESIDENT’S MESSAGE

Lorrie Trogden | President & CEO | Arkansas Bankers Association

et me start with a resounding THANK YOU for an amazing 2024! All of you have shown tremendous strength, support and resilience during a very trying year. (or four..) Agency overreach with burdensome and customer harming regulation was at an all-time high, but you persevered and showed up in every way to do what’s right for the country’s financial system, your customers, and your communities. Give yourself a hand, because your actions helped us to continue marching forward.

Looking ahead to 2025, we will continue moving the needle in Washington and at home. A massive congratulations to Congressman French Hill for his outstanding victory in winning the gavel for the House Financial Services Committee. The “honorable Chairman from Arkansas” certainly has a nice ring to it! Arkansas continues to punch above its weight with three committee chairmen in Congress. There are also several new members of the House Financial Services Committee: Rep. Maria Salazar (R-FL), Rep. Lisa McClain (R-MI), Rep. Marlin Stutzman (R-IN), Rep.-Elect Mike Haridopolos (R-FL), Rep.-Elect Tim Moore (R-NC), and Rep.-Elect Troy Downing (R-MT).

2025 will also bring new regulatory agency heads for the OCC, FDIC and CFPB. This is welcome news and cannot happen quickly enough. While these new people will influence recent rules we know are terrible, they cannot unilaterally roll them back. We should temper our expectations, as there are processes in place that agencies and Congress must follow to unwind rules like 1071 (We are advocating for a full congressional repeal of 1071). It can happen; it will just take time to make it happen. The multiple court cases also do not go away, but agencies can decide to go in a different direction with appeals and responses. You will see an update in this issue about all of the pending court cases, but there is a new lawsuit that was filed in the last couple of days in Mississippi over the CFPB’s brand new overdraft fee rule.

The state legislative session starts the second week of January, and it will be busy! The Association will be putting together a package of legislation that enhances criminal penalties for: Repeat offenders for skimming crimes; ATM impairment or interruption; non-verbal bank robbery; bank employee assault; and making mail theft a state crime so it can be prosecuted at the local level. We also have bills on trigger leads, repealing SSN on credit denial letters, and medical surrogacy related to financial documents. These will be on our website once they are finalized and filed. We also fully expect to defend a state-level bill on interchange fees (There is a lawsuit in IL over its new interchange law). Retailers did not pass savings on

to consumers when the Durbin amendment limited debit card interchange, and we have no reason to believe that retailers won’t pocket that money again if the state passes an interchange law. We also strongly believe that preemption applies here as interchange is regulated at the federal level. The worst part of a law like this is the harm to the consumer. As you all know, those interchange fees pay for network anti-fraud and security costs as well as making customers whole when fraud does happen. Retailers are not the ones keeping payment networks secure or reimbursing customers in these instances. They are also guaranteed immediate payment while the credit card issuers take on the risk of non-payment. If a bill is filed, we will put out a call to action for all of you to contact your local legislators to help them understand why this is BAD legislation. It is vitally important that you speak with them on banking issues when Legislative Action Alerts are sent.

Again, I want to thank you for a wonderful year. I have thoroughly enjoyed visiting with you at ABA events, making bank visits, and meeting with your Board for 13th board meetings. YOU are the lifeblood of this association, and I look forward to what 2025 has in store! Happy Holidays to you and your family, and I’ll see you in the new year!

“A new year is on the way and the possibilities are endless.”

Lorrie Trogden, President & CEO

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

Ian Bryan, Russellville

Ben Buergler, Bentonville

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

AFTER 5,110 DAYS, THE IMPACT OF Section 1033 of Dodd-Frank

It seems hard to believe, but it has been more than 14 years (5,110 days) since the DoddFrank Wall Street Reform and Consumer Protection Act of 2010 was passed by Congress and signed into law by President Obama. At more than 2,300 pages, Dodd-Frank was arguably the largest and most complex piece of financial industry legislation ever passed. And the rules and regulations that spawned from the act over the past decade have been burdensome to say the least.

But of all the rules and regulations promulgated to date, the one most likely to fundamentally disrupt our industry the most is Section 1033. Commonly referred to as “Open Banking,” Section 1033 contains several requirements for banks with more than $850 million in total assets that will increase our operational and compliance burden, not to mention the potential liability and reputational risk of managing our customer’s financial information in an open environment.

What is “Open Banking” under Section 1033? Essentially, the regulation requires “data providers” including financial depository institutions to make personal financial data available to customers and authorized third parties. Further, the information must be in a standardized electronic format. It should be noted that there has been no guidance on what the standard format must be. From a community banker’s perspective, this seems to be contrary to the longstanding model of relationship banking, where our customers trust us with their financial information and rely on us to provide it to them upon request.

While there are still many issues to be resolved with implementing an open banking concept, I wanted to briefly discuss the three that appear to have an immediate impact on banks.

First, Section 1033 requires the disclosure of personal financial information to

authorized third parties. While it is true the authorization comes from the customer, the concern lies in how secure the customer information is once in the custody of the third party. As cyber threats continue to be a focus within our institutions, it is impossible for us to analyze or perform a risk assessment on outside third parties. As a result, we are left to answer to our customers in the event of a breach of their data even if it is not our fault. What’s worse, Section 1033 does not specifically address or define who bears the liability for a breach.

The second concern revolves around the technology necessary to enable an open banking environment. Initially, banks will have to create a digital interface allowing customers to access their most recent transactional activity and data. This is not only a novel concept for most banks, but also a complex and expensive endeavor. Additionally, policies and procedures will have to be developed to ensure that banks accurately monitor and document all requests by customers, verify the accuracy and content for outbound data transfers, and document all third parties who receive customer information.

Third, the implementation and operational expense to banks will be significant, especially to smaller institutions. As mentioned hereinabove, the development and integration of a digital interface that allows customers direct access will be unique to each core provider and bank. Aside from the development and implementation expense is the continuing operational costs. Section 1033 prohibits any charge or fee related to operations or request for data. Our institutions are simply supposed to create, implement and operate a digital environment to promote the trafficking of customer data without regard to the financial impact.

For an industry built and regulated upon the highest standards of protecting

the personal financial information of our customers, Section 1033 will certainly pose significant challenges. But because DoddFrank was a “quick solution” drafted in haste, Section 1033 will likely have many unintended consequences, as we have seen with other sections of the act. Those unintended consequences will challenge not only our industry but our customers as well. It is incumbent upon each of us as bankers to collaborate and engage with our state and federal delegation in order to push back on excessive regulation. Even after 5,110 days, the effects of Dodd-Frank will continue to materialize through regulatory rule-making and provide us the opportunity to challenge harmful legislation.

In closing, 2025 will be a very busy year from a legislative perspective. The state Legislature will be back in session, and we are already tracking several bills that affect banking in Arkansas. I encourage you to consider attending any of our Government Relation Committee meetings. You do not have to commit to being a “technical” member, but we would love for you to attend so that we have a better understanding of your institution and insight on upcoming legislative issues. Likewise, we expect a very busy year in Washington with the new administration. Although there are still a lot of moving parts, the Arkansas congressional delegation looks to be the most powerful of my banking career. It should be a fun time, especially when U.S. Rep. French Hill becomes the chair of the House Financial Services Committee.

I wish each of you a very happy and prosperous new year, and I sincerely appreciate your engagement, support and membership in the Arkansas Bankers Association.

(Please note this article is drafted from the perspective of the author and is not intended as a legal opinion. Please reference the final rule promulgated by the CFPB found at 12 U.S.C. 5533.)

Brad Chambless | Chairman | Arkansas Bankers Association

Calendar of Events

JANUARY - MARCH 2025

Jan

WEDNESDAY 10 A.M. – 12 P.M.

UNDERSTANDING BANK PERFORMANCE: A SERIES

The ABA, in partnership with other bank associations around the country, is proud to offer this exciting training opportunity! Participants will learn how to assess and analyze a bank’s financial performance by working with data from real institutions... and much more! In the final session of this course, participants will put what they have learned into practice. Participants will analyze a new data set, rate the bank’s performance and suggest strategic adjustments that might benefit the bank. Secure your spot today!

INSTRUCTOR: Duncan Taylor

LOCATION: Virtual

14

16

TUESDAY 9 A.M. –THURSDAY 4 P.M. ADVANCED COMMERCIAL

LENDING SCHOOL

So, you’ve conquered Commercial Lending School and you’re now looking for the next step. Join us for this intensive program as we dive into a variety of case studies, that not only will sharpen your decisionmaking, but will build upon your previous lending education. Working together in small groups, participants will have the opportunity to review each case and apply the most appropriate decision-making analytical tools. We’ll wrap up with a discussion around best practices, trends, portfolio development, and more.

INSTRUCTORS: Ron Rushing and Mike Wasson

LOCATION: ABA Professional Development Center

1220 W. 3rd St. Little Rock, AR

28

TUESDAY 9 A.M. – 12 P.M.

SARS FOR THE FRONTLINE

What are the key red flags today’s frontline needs to know? What are the steps for alerting the BSA Officer? How can the frontline assist the Suspicious Activity Reporting process? Throughout this training session, we will cover the essential elements of Suspicious Activity Reports (SARs), including recognizing red flags and indicators of suspicious activities, conducting thorough investigations, and ensuring compliance with regulatory requirements. You will engage with real-world case studies, practical scenarios, and handson exercises to refine your SAR drafting and reporting skills.

LOCATION: Virtual

30

THURSDAY 9 A.M. – 12 P.M.

RISK ASSESSMENT & ERM WORKSHOP

Unlock the power to master risk management and drive your organization’s success with cutting-edge skills and insights into Risk Management. In the dynamic world of banking, managing risk is crucial to safeguarding assets, maintaining regulatory compliance, and ensuring long-term success. This virtual workshop on Risk Assessments and Enterprise Risk Management (ERM) is designed to equip you with the essential knowledge and skills to effectively identify, assess, and manage risks within your organization.

LOCATION: Virtual

Feb

06

THURSDAY 9 A.M. – 4 P.M. IRAS: ADVANCED ISSUES

On July 18, 2024, the Treasury Department and IRS issued final required minimum distribution (RMD) regulations. They also published new proposed RMD regulations related to various law changes in SECURE 2.0. IRA providers are scrambling to adjust policies, procedures, forms, and communications to comply with the ongoing substantive changes to the laws governing IRAs. These changes affect virtually every facet of IRA administration and servicing. It is imperative that IRA providers stay abreast of these developments. This program can help!

INSTRUCTOR: Jonathan Yahn

LOCATION: ABA Professional Development Center 1220 W. 3rd St. Little Rock, AR

11

TUESDAY 9 A.M. – 12 P.M. CTR ESSENTIALS FOR THE FRONTLINE

Some aspects of currency transaction reports (CTRs) are straightforward, while others can be complex depending on the situation. This virtual program is designed to guide you through various scenarios, demonstrate best practices, help you navigate common pitfalls, and offer a range of practical tools. This detailed training session is the solution for mastering CTR reporting.

LOCATION: Virtual

TUESDAY 9 A.M. – 3:30 P.M.

SCHOOL Details coming soon!

LOCATION: Virtual

WEDNESDAY 9 A.M. – 4 P.M.

ABA AGRICULTURAL BANKING CONFERENCE

Ag lending requires highly specialized lending skills as well as an understanding of the markets available to Arkansas farmers. Ag lenders need to stay current on the latest issues in agricultural markets, economics, and risk management. This conference will provide both state and national perspectives to give you practical knowledge, growth strategies, and networking opportunities with Ag Bankers from across the state.

LOCATION: ABA, 1220 W. 3rd St. Little Rock, AR

WEDNESDAY 5:30 P.M. –THURSDAY 4 P.M. 2025 WOMEN IN BANKING CONFERENCE

This conference is designed to bring together Arkansas bankers for both networking and fellowship. Gain insights on visionary leadership and strategic thinking. Collaborate, discuss, and network with your industry colleagues. Get fresh ideas to better serve your bank, community, you, and your family, and create lasting friendships -- all in a fun and dynamic environment.

LOCATION: Little Rock Marriott 3 Statehouse Plaza, Little Rock, AR

March

19 27 26 27 03 26 18 19

THURSDAY 10 A.M. – 3 P.M. EDUCATION

AND TRAINERS FORUM

The ABA is proud to offer this three-part Forum providing an opportunity for bank educators, directors, and trainers to exchange ideas freely and examine pressing challenges in today’s ever evolving regulatory, cost-conscience, and results-driven environment.

LOCATION: Virtual

MONDAY 8 A.M. – 5 P.M.

GSB DIGITAL BANKING SCHOOL

As consumer preferences have moved from lobby to service multichannel, multi-touch interactions, the demand for digital banking services has grown exponentially. GSB’s Digital Banking School is the first school of its kind to help community banks move into and/ or grow in the digital banking space. This immersive experience will showcase the key elements of a bank’s effective digital strategy and will be led by industry thought leaders who are experts in digital banking and innovation.

LOCATION: Virtual

TUESDAY 9 A.M. –WEDNESDAY 3:30 P.M.

ADVANCED BSA/AML COMPLIANCE SCHOOL

This two-day comprehensive program focuses on the latest changing BSA/AML/CFT Compliance arena and offers tips and tools to develop and manage an “adequate” and “an effective and reasonably designed” BSA program. This program also assists financial institutions in meeting the annual training requirements.

LOCATION: Virtual

WEDNESDAY 8:30 A.M. – 4 P.M.

BREAKING INTO BANKING 201: ANALYZING REPAYMENT SOURCES

This nine-module online course is a sequel to the Breaking into Banking 101 course (offered Feb 26, 2025) and is best taken after completion of that course, though it is not a prerequisite. The 201 course includes a case study and dives deeper into topics including: analyzing a borrower’s balance sheet, income statement, collateral, and risk ratings.

LOCATION: Virtual

AT A GLANCE

FEBRUARY

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.

IT’S TIME FOR A REGULATORY RESET

Rob Nichols | President and CEO | American Bankers Association

Over the last four years, the banking industry has battled an onslaught of new rules and regulatory changes that have threatened to fundamentally alter how financial institutions in this country operate.

Regulators have taken a de facto “one-size-fits-all” approach to rulemaking — ignoring the diversity of bank sizes, charters and business models within the banking sector, as well as the undeniable trickle-down effects of regulations that are, on paper, only targeted toward larger institutions. For whatever reason, they have also chosen to pursue rulemakings more tied to the past than the present. It’s time to stop fighting the last war and stay focused on the present and the future.

ABA and the state associations have stepped up on behalf of our members, challenging misguided final rules in court wherever warranted and pushing back with facts and data to stop faulty assumptions from underpinning major regulatory changes and bogus claims about our industry from spreading. We’ve had some notable successes over the last four years, but it hasn’t been easy.

As we welcome 2025, a new presidential administration and a new Congress, it’s time to reset the conversation around banking regulation.

That effort began right after the election during the transition, as ABA worked to communicate our priorities to the incoming Trump administration. With leadership changeovers anticipated at the regulatory agencies following the inauguration — including at the FDIC, OCC and CFPB — we expect to have the opportunity to

share our perspective with the new players and help refocus the conversation around rightsizing the supervision and regulation of the banking sector.

But while we can expect some of the new regulators to pause some proposed rulemakings altogether, and Congress could use the Congressional Review Act to undo some of the most recent regulatory proposals, it’s important to remember that the new administration and new Congress will not wield a magic wand.

Undoing policy changes in a durable way can take just as long as putting new regulations into place, since the Administrative Procedure Act and its notice and comment procedures apply. As we have noted in our many active lawsuits, regulators have frequently flouted the APA in recent years, and partisan agendas have too often driven a rulemaking process that is supposed to be even-handed and fact-based.

We have the opportunity now to get it right — by following a transparent process and by working constructively to engage policymakers of both parties in crafting commonsense regulations that ensure our banking sector remains safe, sound and well-capitalized. That’s how we bring about meaningful, long-lasting change.

At ABA, we are ready to roll up our sleeves and get to work, together with our state alliance partners — and we need your help.

We need every banker in this country to stay engaged on the issues that matter. Reach out to your members of Congress, particularly in states where freshmen lawmakers are taking office. Get to know your representatives, invite them to your bank and introduce them to your customers and your employees. Help them to understand not just the important work banks do each day, but the ripple effect that the provision of credit can have in our cities, towns and neighborhoods.

Finally, I invite every banker in this country to join us in Washington, D.C. April 7-9 for the 2025 ABA Washington Summit. This year’s annual gathering of bank leaders will be critically important in making sure we have a policy environment that will unleash economic growth and allow banks to serve their customers and communities. We need all of you there to make sure our industry’s voice is heard loud and clear.

Email Rob at nichols@aba.com.

“Reach out to your members of Congress... Get to know your representatives, invite them to your bank and introduce them to your customers and your employees.”

REFLECTION AND PROJECTION

As we close out 2024 and forge ahead into 2025, it is appropriate to reflect on how the industry has fared over the past twelve months and how industry participants feel about the upcoming year. 2024 brought with it a leveling of the interest rate challenges we encountered in 2023. I believe the stability in the interest rate environment throughout most of the year allowed institutions to appropriately adjust on both sides of the balance sheet and that stability has allowed for some improvement in profitability of our Arkansas banks. However, the earnings component remains the area in which most downgrades have occurred during the examination process. Although the FOMC initiated rate decreases in the latter part of the year, it will take time for those actions to flow through the system and impact borrowers and depositors.

Despite national commentary about increasing performance issues and pressure on the office sector within Commercial Real Estate portfolios and certain consumer portfolios like credit card and automobiles, we have not yet identified holistic Asset Quality issues in our Arkansas banks. Capital levels remain strong with 85 percent of our state-chartered banks posting a Tier One Leverage ratio in excess of 9.00 percent. The Liquidity pressures of 2023 and early 2024 have subsided overall and banks have been successful in stabilizing, and to some degree enhancing, their on-balance sheet funding. Arkansas banks are beginning to see the results of their patience in relation to their investment portfolios and how the portfolios were impacted from the dramatic rate increases in recent years.

Projections are always a challenge in this industry. I do believe we will see additional rate cuts in the short term, albeit smaller adjustments and in my opinion, we are entering a time where on average, the rate environment will be higher overall compared to the historically low levels we experienced for many years. I believe we will still witness a true decline in Asset Quality and its related performance metrics, but I remain optimistic that our banks will not experience widespread loan portfolio issues as we experienced during the Great Financial Crisis. As I referenced above, capital levels are strong across the industry both locally and nationally; however, it is always appropriate to be forward-looking and conservative when evaluating your bank’s capital position. I project that the attraction of new capital will remain a commodity throughout 2025.

I am very cautious about discussions at the federal level regarding the future of the FHLB system, specifically FHLB advances, and treatment and structure of brokered deposits. Both are tools that banks have utilized for many years in order to enhance their funding base. In today’s extremely competitive marketplace, deposits and funding are under more pressure than ever before and any actions or change at the federal level must be very thoughtfully

implemented in order to not result in harm to our community banks.

The non-financial concerns I have expressed throughout 2024 remain as we focus our attention on 2025. The increasing cyber threat environment will remain and likely continue to escalate as consumers become more reliant on and expectant of technology to conduct their financial activities. In 2025, I project we will also begin to evaluate how artificial intelligence will bring change to our industry in the next year and beyond. This change will be impactful and a potentially seismic shift in how our industry operates. As banks adopt more technology-focused tools to meet consumer demand and address rising costs and availability for talent, the use of third-party applications and tools will also become more prevalent. Thus, third-party risk management will continue to receive regulatory attention with expectations increasing for board and management oversight.

At year-end 2024, the vast majority of Arkansas state-chartered banks are operating in safe and sound condition, and I am hopeful that we will experience continuing strong performance in 2025. I am also hopeful that changes at the federal level within the regulatory sphere may bring much needed relief in relation to regulatory burden and the avalanche of new regulatory guidance and rule-making that has been present in recent years. Here’s to projecting a strong banking sector in 2025!

“Capital levels remain strong with 85 percent of our state-chartered banks posting a Tier One Leverage ratio in excess of 9.00 percent.”

Susannah Marshall | Commissioner | Arkansas State Bank Department

minutes with...

VE

FIVE Bill Yee

City President | Citizens Bank | Little Rock

Q. TELL ME ABOUT YOURSELF. WHERE DID YOU GROW UP? WHAT WERE YOU DOING EARLY IN YOUR CAREER?

A. I was born and raised in Lake Village, Arkansas. I am the youngest of six children. My oldest sibling is 90 years old. My father passed away at 90 (while driving to work), and my mother passed away at 102. My grandfather immigrated to the U.S. in 1921, and in 1926, he went back to China to bring my father and uncle to the U.S.

In the late 1800s, Chinese immigrants were recruited to work in gold mines, cotton fields, and textile industries. Most were paid wages far below what their U.S. counterparts received and were required to furnish their own supplies and meals. The work was hard. As a result, many Chinese decided to go into business for themselves, often running grocery stores, liquor stores, restaurants, or laundromats. Discrimination and prejudice were very prominent then. Chinese were neither white nor black and were not really accepted.

My father and a business partner, who also immigrated from China, eventually ended up in Lake Village, where they started a grocery store in 1950. The store was open seven days a week, and back in the 60s, they operated from sunup to midnight. The store was expanded in 1977 and eventually closed in 2012 after 62 years. My siblings and I, like most Asian families, grew up working and living in the store from a very early age. The store taught us valuable lessons on how to take care of, communicate with, and manage people, as well as the value of hard work and relationships. It was instrumental in teaching me how to check out customers, count money, and make change, which probably served as a catalyst for my future banking career. Even while I was working in banking at Regions/Delta and my wife was in medical school, we would often go down to Lake Village to help out at the store.

Q. WHAT ATTRACTED YOU TO JOIN CITIZENS BANK IN 2022?

A. After working for 20 years and retiring from a larger bank, I had the honor and privilege of being recruited to Citizens Bank to serve as their Little Rock City President. The attraction was the opportunity to go back and work at a strong, community-focused bank, be involved in management again, and work with a group of very talented professionals who I had previously worked with at another institution. Growing up in Lake Village allowed me to understand the value of developing strong relationships with customers and business people.

Q. WHAT GETS YOU UP IN THE MORNING? WHAT ENERGIZES YOU ABOUT THE CULTURE AND MISSION OF CITIZENS BANK?

A. Medical school tuition and boarding—ha! The need to take care of my family obligations and be productive.

Citizens Bank’s mission statement is “People First.” The Board of Directors, management, and all associates truly embrace this mission. We understand that banking is a commodity, and to differentiate ourselves, we truly have to take care of people first! Our customer service motto is GREAT: G-greet everyone with a smile; R-respond with urgency; E-empower our associates to take care of customers; A-always go the extra mile; T-thank everyone for their business. The standards set by the bank allow us to be a strong and competitive bank, providing us the opportunity to serve our clients well.

Citizens Bank was formed in 1953. Today, we have assets totaling around $1.4 billion and loans totaling $1.3 billion. We have excellent asset quality and are very strong.

“ The overall state of banking in Arkansas is very safe. We are very fortunate to have some of the best banks in the country in Arkansas.”

Q. WHAT ARE THE MAJOR TRENDS OR MOVEMENTS IN YOUR INDUSTRY, AND WHAT IS THEIR POTENTIAL IMPACT ON THE ARKANSAS BUSINESS COMMUNITY? WHAT CAN WE LOOK FORWARD TO?

A.

2023 was a challenging year for banking as a whole. We faced high inflation, high interest rates, and the collapse of three major regional banks.

Trends:

1. Deposit Growth, Regulations, and Customer Loyalty: Deposit growth is one of the top priorities for most banks. In 2024, deposit growth remains a challenge, as higher interest rates have led consumers to move funds from their standard deposit accounts to higher-yielding CDs or money market accounts, putting stress on banks’ Net Interest Margins (NIM). Moreover, middle-class consumers are struggling to make ends meet amid the inflationary pressures of the last two years, depleting much of their savings accumulated during the early years of the pandemic. Lenders are coping with higher costs of funds and dampened loan demand. Many banks have maxed out on Commercial Real Estate (CRE). Regulatory concerns with CRE, tighter credit decisions, and lower occupancy rates have resulted in higher delinquencies and default rates. With many CRE loans maturing in 2024 and 2025, banks must ensure they have the liquidity and deposit base to accommodate these maturities.

2. Customer Options and Competition: Customers have more options today for accessing banking services, and traditional banks now confront competition from all sides, including companies partnering with fintech firms to offer banking services. Banks need to avoid pitting branch services against digital experiences or in-person services against remote ones. Both are vital. Regardless of the venue, make sure you are dealing with a reliable source.

3. Cybersecurity and Fraud: Banks are navigating more complex and costlier cybersecurity and bank fraud issues. Fraud is more rampant than ever, thus the need for strong logins and passwords.

4. Integration of Technology: Banks’ number one priority is technology integration and platforms, prioritizing the transition from complex legacy systems to sophisticated cloud-based platforms.

5. Taking Advantage of AI Opportunities: AI could open the door to a range of applications that drive measurable improvements in customer experience, operational efficiency, security, and compliance.

Q. WHAT DO YOU KNOW THAT MIGHT BE SURPRISING TO PEOPLE WHO AREN’T IN BANKING?

A.

Despite the fact that most of the younger generation is increasingly unaware of traditional banking tasks, like writing a check, it is very important for everyone to have a banking relationship. As individuals advance in their careers, their finances become more complex, and a trusted advisor is recommended. I have been fortunate to provide banking advice for my wife, who runs a successful cosmetic surgery practice, as well as advice to both of my daughters in the medical field. Don’t be intimidated by the idea of establishing a banking relationship.

Q. IS THERE ANYTHING YOU WISH I’D ASK YOU ABOUT, OR ANYTHING YOU’D LIKE TO SAY TO THE READERS OF ABA?

A. The overall state of banking in Arkansas is very safe. We are very fortunate to have some of the best banks in the country in Arkansas. The state has been wonderful to me and my family. We are blessed to have the ABA, which supports our banking community.

BIO: Graduated from UA Fayetteville in 1980 with a BS degree in Marketing and a minor in Finance. (With the exception of my oldest sister, all of my siblings and I are graduates of the University of Arkansas at Fayetteville.) I worked at the family store until 1990 while my wife was in school. From 1990-1997, I worked as a State Bank Examiner (Commissioned Senior Bank Examiner) and graduated from the Southwest School of Banking at SMU. From 1998-2002, I worked at First Commercial/Regions (Lender, VP). From 2002-2014, I was at Delta Trust & Bank (EVP, manager of the lending department). In 2014, Simmons acquired Delta Trust, and I worked at Simmons Bank (SVP) from 2014-2022. Since 2022, I have been the Little Rock City President at Citizens Bank. I have served on the Board of Directors of UCP of Arkansas since 2006 and as treasurer. UCP of Arkansas celebrated its 65th year this year.

PERSONAL: Married to Suzane Yee (Cosmetic Surgeon) for 38 years. We have two daughters: Addison, who graduated in May from UAMS and is doing an anesthesiology residency at Vanderbilt, and Peyton, a graduate of Georgetown University who is attending medical school at UVA in Charlottesville, VA. My wife and family have been valuable support systems throughout my working career.

EMERGING LEADERS DEVELOPING A LEADERSHIP MINDSET EARLY:

HABITS OF SUCCESSFUL YOUNG PROFESSIONALS

Ian Bryan | Chairman | Emerging Leaders Section

In the competitive world of banking, young professionals often focus on technical skills. However, developing a leadership mindset early can differentiate emerging leaders. Cultivating specific habits and adopting the right strategies will help pave the way for longterm success. Here are key practices young professionals can embrace to build a strong leadership foundation.

1. MASTER TIME MANAGEMENT

Effective time management is crucial for leadership. As a young professional, learning how to prioritize tasks and meet deadlines is essential. Poor time management leads to burnout, while managing time well fosters productivity, trust, and accountability—key traits of leadership.

Use tools like to-do lists or time-blocking to stay organized. Delegate when appropriate and focus on tasks that align with your priorities. These practices will improve efficiency and help you develop discipline for a leadership role.

2. COMMIT TO CONTINUAL LEARNING

Great leaders never stop learning. Emerging professionals should adopt a growth mindset, constantly seeking opportunities to expand their skills. This includes formal education, such as certifications, and informal learning, such as reading industry books or attending conferences.

In banking, staying informed about trends in fintech, regulatory changes, and emerging technologies helps you remain relevant and adaptable. Continual learning is key to leadership success in an ever-changing industry.

3. SEEK FEEDBACK AND ACT ON IT

Successful leaders value feedback and use it to grow. Constructive criticism reveals areas for improvement, helping young professionals advance. Rather than fearing feedback, view it as a chance to improve. Make it a habit to regularly ask for feedback from colleagues or mentors and act on it. This shows you are committed to growth and development and demonstrates humility—a vital leadership trait.

4. TAKE INITIATIVE AND OWN YOUR PROJECTS

A key habit that distinguishes great leaders is the ability to take initiative. Young professionals should actively seek opportunities to go beyond their duties and take ownership of projects. This shows you are invested in the organization’s success and capable of leadership.

Don’t wait for instructions—look for ways to improve processes, contribute to team goals, and identify areas for growth. Taking initiative demonstrates problem-solving skills and positions you for leadership roles.

5. BUILD STRONG RELATIONSHIPS AND NETWORK

Leadership goes beyond technical skills; it’s also about building relationships. Start early by cultivating a network of mentors, colleagues, and industry professionals. Strong relationships provide support, advice, and new opportunities.

Engage in industry events, connect on LinkedIn, and collaborate with people outside your immediate team. A broad network enhances your professional reputation and opens doors for career growth.

6. STAY RESILIENT IN THE FACE OF CHALLENGES

Resilience is a hallmark of great leaders. In banking, setbacks are inevitable, but how you handle them defines your leadership potential. Developing resilience means staying optimistic, adapting, and learning from mistakes.

When faced with challenges, reflect on the lessons they offer and use them for growth. Resilience will help you persevere through difficult times and emerge stronger both personally and professionally.

CONCLUSION

Developing a leadership mindset early is about more than just aiming for a leadership position; it’s about adopting habits and strategies that shape you into an effective leader. By mastering time management, committing to learning, seeking feedback, taking initiative, building relationships, and staying resilient, young professionals can set themselves up for long-term leadership success. Start cultivating these habits now, and leadership opportunities will follow.

ELS EXECUTIVE COMMITTEE

IAN BRYAN CHAIRMAN

FIRST STATE BANK

Russellville

Group 2

AMBER MURPHY CHAIRMAN-ELECT

FIRST FINANCIAL BANK

El Dorado

Group 3

ELS COUNCIL MEMBERS

BRITT BURRIS

CONNECT BANK

Star City

Group 3

BAILEY EADS

FARMERS BANK & TRUST COMPANY

Magnolia

Group 3

JAKE EARNEY

CHAMBERS BANK

Fayetteville

Group 2

WILL EDWARDS

FIRST SECURITY BANK

Jonesboro

Group 1

GABE ROBERTS SECRETARY/TREASURER

FIRST COMMUNITY BANK

Jonesboro

Group 1

BRITTANY HELMS

SIMMONS BANK

Little Rock

Group 1

BRANDON KNOWLTON

SOUTHERN BANCORP

Helena-West Helena

Group 3

MICKEY BELLE SHIELDS MANLEY

CS BANK

Eureka Springs

Group 2

SARAH TEFTELLER

GENERATIONS BANK

Fayetteville

Group 2

EMERGING LEADERS

REP. BRIAN EVANS

REP. RANDY TORRES

SEN. BLAKE JOHNSON

BANKERS Belief IN A

by Roby Brock

THE 95TH ARKANSAS GENERAL ASSEMBLY BEGINS ON JANUARY 13, 2025, AND ALL EYES WILL BE ON THE CAPITOL CORRIDORS IN LITTLE ROCK FOR THE NEXT FOUR MONTHS. This year’s state legislature will focus on a variety of issues from a blend of new faces and reliable veterans. Arkansas bankers will be greeting them in the hallways and committee rooms.

photos courtesy of Arkansas Secretary of State and Arkansas House of Representatives

NEW SPEAKER OF THE HOUSE Credits His Success to Banking

REP. BRIAN EVANS, R-Cabot, the incoming Speaker of the Arkansas House of Representatives, believes in bankers. He wouldn’t be in business or politics today if it weren’t for a local banker who believed in him at a critical juncture early in his career.

“A hometown banker took a chance on a young guy who had a big dream living the American dream. And without that relationship and that trust that banker put into me, I definitely have no doubt I would not be where I am today,” said Evans. “He really stepped out there when he didn’t have to, but believed in me and took a chance on me when there were probably others that wouldn’t and really helped me overcome a lot of obstacles in building a business.

The man who will lead the Arkansas House in the 95th Arkansas General Assembly that starts in January 2025 has made a career in the logistics business. He serves as President of L&L Freight Services, Inc. in Cabot and is the former chairman of the board of the Transportation Intermediaries Association. He’s married with two children.

Evans, 56, said his banker is his business sounding board and a mentor still, and the experience is one he won’t forget as he leads his chamber in setting policy.

“Understanding the vital relationship that there is in our communities all across the state with our bankers is vital to the future of Arkansas. And I have the greatest respect for our bankers across the state. The work that they do, the opportunities that they provide through the operations of their institutions, they are definitely an economic driver in our state, and I appreciate so much the work they do to help the common man live the dream,” he said.

Evans is serving his fourth term in the House having been first elected in 2019. He represents District 68, which includes the city of Cabot, as well as portions of Lonoke County.

Last session, Evans, who served 10 years on the Cabot School Board, chaired the House Education Committee, which tackled a host of important legislation including Gov. Sarah Sanders’ LEARNS Act. He’s also a veteran of the House Insurance and Commerce Committee and the Joint Budget Committee. This session, Evans will serve on the State Agencies and Governmental Affairs and the Judiciary committees, and he’ll appoint all of the chairs of the House committees.

“Understanding the vital relationship that there is in our communities all across the state with our bankers is vital to the future of Arkansas.”

With the state’s finances on solid footing, Evans expects a lot of activity this session on K-12 education, higher education, mental and maternal health, military and veterans’ issues, drinking water and wastewater concerns. He’s also looking forward to leading the House and its diverse membership, which includes one banker, State Rep. Randy Torres of Siloam Springs.

“I look forward to working with an outstanding group of House members, including the 13 new members that are coming in,” said Evans. “We’ve got a really solid group on our end of the building, folks that are very gifted and talented, experienced content-based experts that can help us drive great policy that is going to benefit all Arkansans. Yes, it is a time of transition. There’s a lot of new people in the House as we prepare for the 95th, but we have an outstanding staff that is helping me daily as we transition and plan for that and I’m looking forward to a great session.”

Rep. Brian Evans

FRESHMAN REPRESENTATIVE TO BRING BANKING, Varied Background to House

FRESHMAN STATE REP. RANDY TORRES, R-Siloam Springs, will bring a wealth of banking experience to the House of Representatives, but his diversified background also includes manufacturing, ranching, real estate, hospitality, teaching and the ministry.

Torres, Market President for Generations Bank in Siloam Springs, has done a lot in his banking career with stints in commercial lending, treasury management and private banking. He’s owned and operated businesses as well as worked in the aforementioned industry sectors.

Torres obtained a B.S. degree in Animal Science from Texas A&M University in 1993, a Master’s degree in Ministry in 2003 followed by a Master’s in Business Administration in 2012, both from John Brown University.

“I think the best legislators are the ones that can identify and relate to the people that you’re representing,” said Torres. “I never dreamed I’d be here, but when you look backwards and you realize all the different experiences that I’ve had, there’s hardly anyone in my district that I can’t identify with, that I can’t relate to, that I’ve not been in their shoes except for maybe a doctor or a veterinarian. So I think being able to understand how legislation could impact the people in my district, I think I’ve got a pretty good setup to be able to do that.”

Torres and his wife of 30 years, Molly, have two children and one grandchild. He has served back home on the Siloam Springs Public School Foundation, the Illinois River Watershed Partnership, Hope Cancer Resources, Western Benton County Partnership, and is the 2024 Board Chair for the Siloam Springs Chamber of Commerce.

He will serve on the Public Transportation and Aging, Children & Youth, Legislative & Military Affairs committees this session, but Torres thinks his banking expertise will be a strong suit for him.

“I feel like we spend a lot of our time understanding budgeting, and we do financial analysis and forecasting for a lot of our public and private sector organizations. So I feel like that’s going to be helpful. I can apply that experience to our budget for the state as far as allocation of resources and addressing deficits and so forth. So that’s my hope,” said Torres.

When banking issues come up for debate at the state capitol, Torres expects to offer useful insight and to be on guard against legislation that could harm the state’s banking sector.

“Access to capital is extremely important for a lot of our small businesses in our communities. Any legislation that’s going to make that more difficult is something I’m going to be mindful of and watchful.”

“This opportunity is to not just represent the people in my district, but to represent the banking community of the state. I’m looking to really help. Access to capital is extremely important for a lot of our small businesses in our communities. Any legislation that’s going to make that more difficult is something I’m going to be mindful of and watchful,” he said.

“I think the other thing that’s happening quite a bit in our state is a lot of bank fraud. It’s just crazy what it’s costing banks and the threat there and the exposure that we have. Anything that we can do to help mitigate that is something that I’ll also be looking to try to help with,” added Torres.

Rep. Randy Torres

photo courtesy of Torres

SENATE INSURANCE & COMMERCE CHAIR Wants Bankers ‘At The Table’

SEN. BLAKE JOHNSON, R-Corning, will be chairing the Senate Insurance & Commerce committee and his agricultural background and common-sense attitude is likely to drive his oversight.

Johnson, a farmer, represents Senate District 21, which includes all of Clay, Greene and Randolph counties and the northeast part of Lawrence County. He has been a State Senator for a decade and will not only chair Insurance and Commerce this session, but also serve on Judiciary, Joint Energy, Efficiency and the Joint Budget committees in the 95th General Assembly. He’ll also be serving as Senate Majority Leader.

Despite that hectic schedule, Insurance & Commerce will be a priority.

“I think with everything there is involved with Insurance and Commerce, it’s a pretty important committee,” said Johnson. “I know there’s some challenges coming up with the insurance market. I’m also kind of hopeful for the banking side of things where interest rates hopefully can start to go back down a little bit and optimism in the economy will pick back up after the [new] administration takes place.”

Johnson believes that rising insurance costs due to years of calamities, and a crisis brewing between pharmacists and PBMs [pharmacy benefit managers] will be a major debate in the committee he will chair.

He’s not expecting any major clashes dealing with banking issues this session. Johnson feels most of that action will be at the federal level and deal with regulation and Fed interest rate activity.

“As for banking, I don’t know how the regulatory issues will play out with the new administration. Hopefully lending and some of the restrictions will be relaxed on the regulatory side to where lenders will be able to get our economy started again,” he said.

What’s good for banking will likely be good for farmers, and that’s a key focus for him.

“The more involved and more opportunistic and more optimistic individuals in Arkansas are who want to start a business or grow their business, bankers give them a better chance. Not everybody has

“ ... bankers are our community. They need to come speak to us and let us know what their issues are. It’s vital for them to be engaged with the legislature with what they do at the state and local level.”

the capital to do it by themselves, and it’s a necessity for the banking industry to be strong. Not just for people depositing money, but banks being able to lend the money at a rate that’s agreeable to the business owner,” said Johnson.

“Hey look, bankers are our community. They need to come speak to us and let us know what their issues are. It’s vital for them to be engaged with the legislature with what they do at the state and local level. Lorrie and her team at the ABA do a good job of that. The more engaged they are, the better off their industry is if they’re engaged with the legislature,” he added. “If you’re not at the table, somebody’s gonna eat your food.”

Sen. Blake Johnson

U.S. REP.

FRENCH HILL SELECTED TO CHAIR HOUSE FINANCIAL SERVICES COMMITTEE

by Roby Brock

U.S. Rep. French Hill, R-Little Rock, received the endorsement of the House GOP steering panel on December 12 to lead the House Financial Services Committee, an influential panel that guides domestic and international monetary, financial and regulatory policy.

photos courtesy of U.S. Rep. French Hill

Hill, a former banker, has been a member of the committee for several years. He earned the endorsement over three other longtime committee members, including Reps. Andy Barr of Kentucky, Bill Huizenga of Michigan, and Frank Lucas of Oklahoma.

The full House conference must still agree to the steering panel endorsement, but it is unlikely to change the recommendation.

Hill has been championing a plan in Congress to “Make Community Banking Great Again,” a play on President-elect Donald Trump’s “Make America Great Again” theme.

The Little Rock Republican has been a leader on curtailing perceived overregulation of the financial services industry and has guided cryptocurrency policy as Congress enters new territory in its regulation. According to the House of Representatives website, the House Financial Services Committee “has jurisdiction over issues pertaining to the economy, the banking system, housing, insurance, and securities and exchanges.”

ON HIS OFFICIAL TWITTER ACCOUNT, HILL SAID:

“I am humbled that my colleagues have placed their trust in me to lead @FinancialCmte as their next Chairman. It was a privilege to join my exceptional colleagues, @RepAndyBarr, @RepHuizenga, and @RepFrankLucas in sharing our visions for this committee.”

U.S. Rep. French Hill

THE MAKE COMMUNITY BANKING GREAT AGAIN PLAN

HILL’S PLAN HAS THREE MAJOR AREAS OF REFORM with a plethora of enumerated details about the trio of common-sense changes. They include:

REGULATORY FAIRNESS, TRANSPARENCY, AND RIGHT-SIZING

The Federal prudential regulators should not be able to order institutions to terminate a customer’s account without a material reason for doing so in order to reverse the weaponization of the government as demonstrated by Operation Choke Point. This political targeting has continued under the Biden-Harris Administration to go after industries like firearms and digital assets; Congress should fully investigate the conduct of agency personnel to find if their actions and policies were consistent with applicable laws, regulations, and policy, while the Trump Administration should officially halt and reverse this policy.

Climate stress testing should be optional for financial institutions and prohibited from being used in connection with the setting of prudential capital requirements. Instead of creating separate and unique climate-specific regulatory mandates, climate should be considered within existing frameworks such as credit and operational risk assessments, which prevents the need for overlapping and prescriptive regulatory measures.

The concept of tailoring should be re-established in prudential regulation and supervision by requiring federal prudential regulators to (1) tailor their actions based on the capital structure, risk profile, complexity, financial activities, business model, and size of the institution; and (2) conduct a comprehensive review of their compliance with the statutory mandate for regulatory tailoring under S. 2155, and to remedy any noncompliance.

The Federal prudential regulators should be open to innovation in a way that is consistent with safety and soundness and provide clear supervisory expectations to financial institutions about their third-party relationships including with financial technology companies. This requires the agencies to be equipped with the necessary technical skills and expertise in order to understand and work with their supervised entities.

The Federal prudential regulators should conduct a review periodically on the cumulative impact of their regulations.

U.S. engagement with intergovernmental regulatory bodies like the Basel Committee and the Financial Stability Board should be reformed to reconsider who represents the United States at those meetings and require notice and comment on any future proposals being considered by the U.S. financial regulators.

There should be more fairness, accountability, and transparency in the bank examination process, including a new process for institutions to appeal supervisory

determinations, similar to the approach taken by the Fair Audits and Inspections for Regulators’ (FAIR) Exams Act, which was introduced as H.R. 8071 in the 118th Congress.

The timing of supervisory examinations should be coordinated between federal and state regulators, including the Consumer Financial Protection Bureau (CFPB), to streamline the exam cycle for individual institutions and reduce the compliance burden on smaller institutions.

The $10 billion threshold for financial institutions subject to the CFPB supervisory authority under the Dodd-Frank Act should be raised and indexed to inflation.

The consolidated asset threshold, below which well-managed and well-capitalized banks qualify for an 18-month examination cycle instead of a 12-month cycle, should be raised.

The community bank representative on the Federal Reserve Board of Governors should play a more active role in the supervision and regulation of community banks, and work with interagency coordinating bodies like the Federal Financial Institutions Examination Council (FFIEC).

The federal prudential regulators should amend the Capital Adequacy, Asset Quality, Management, Earnings, Liquidity, and Sensitivity to Market Risk (CAMELS) rating system, including the relative weight of each category and the establishment of objective measures to determine the evaluation of each CAMELS component and how they make up the composite rating.

The Federal Deposit Insurance Corporation (FDIC) should modernize Call Report data for banks based on deposit type, size, mean, median, and duration, and the inclusion of disaggregated fraud losses.

The Federal prudential regulators and other appropriate agencies should jointly submit a plan to Congress to address the surge in mail theft-related check fraud and debit card fraud at the point of sale, which poses a threat to public safety and often targets America’s elderly and most vulnerable citizens.

PROMOTING A HEALTHY BANKING INDUSTRY FOR INSTITUTIONS OF ALL SIZES

Any application for a bank merger or acquisition should be deemed approved unless expressly denied by the federal banking regulator within 120 days of filing. Regulators cannot be allowed to unfairly and indefinitely hold up mergers.

The Federal Reserve Board should defer to the regional Federal Reserve bank on the decision to approve or deny a bank merger between small and/or mid-sized institutions, if both institutions received (1) a ‘1’ or ‘2’ in their most recent composite CAMELS rating under the Uniform Financial Institutions Rating System, and; (2) a ‘Satisfactory’ or better in their most recent Community Reinvestment Act (CRA) examination.

There should be more flexibility in approving bank mergers and acquisitions by a variety of potential capital or financed partners in counties without a physical bank or credit union branch.

The prudential regulators should jointly examine and report to Congress on ways to improve the growth, capital adequacy, and profitability of U.S. banks. Further, the regulators should identify government policies or regulations that limit these measures, and address the lack of de novo bank charters, particularly in underserved areas.

Nonbank capital sources should be allowed to partner with qualified banks or bank executive management teams to be pre-approved for a “shelf charter” with the FDIC as candidates for mergers and acquisitions transactions, such as the purchase of a failing bank or a required divestment.

The FDIC should be allowed to waive the Least Cost Resolution (LCR) in the event of a bank failure if the agency finds that the accepted transaction would increase competition and facilitate economic growth in the U.S., provided that (1) the buyer agrees to a purchase agreement commitment whereby they pay a Net Present Value catch-up contribution to the Federal Deposit Insurance Fund and (2) the FDIC submits a report to Congress for each transaction with an analysis of the economic difference between the accepted transaction and the so-called ‘lowest cost’ over a 10-year period.

It should be harder for the FDIC to waive the national deposit cap rule for the acquisition of a failing or failed bank, which prohibits a bank from acquiring another if the combined entity would hold more than 10 percent of deposits nationwide. The FDIC should be required to provide Congress with a detailed justification in writing for each waiver and demonstrate that other outcomes were considered and encouraged.

The methodology to evaluate bank mergers and competition for proposed transactions should be revisited, including by proposing (1) alternatives and reforms to the Herfindahl-Hirschman Index (HHI) used by the Department of Justice, such as objective standards for competitive factors based on HHI thresholds; and (2) ways to expand the consideration of deposit market share and other financial services in this evaluation.

IMPROVING ACCESS TO FUNDING AND CAPITAL

The FDIC should uphold its 2020 brokered deposits rule and withdraw its poorly crafted 2024 proposal on brokered deposits, so financial institutions can access diverse funding sources and consumers can have more choice and control over their financial decisions.

The consolidated asset threshold under the Small Bank Holding Company Policy Statement should be raised to allow more community banks to grow using certain debt financing.

In order to assist in the growth capital and transfer of ownership for closely held institutions, the maximum number of shareholders allowed to qualify for a Subchapter S bank should be increased and who can count as one individual shareholder should be revisited.

WHAT ARKANSAS BANKERS ARE SAYING ABOUT HILL’S PLAN:

“We believe reducing regulatory burdens can help consumers by lowering costs, increasing access to financial services and fostering innovation. With Rep. Hill’s background as a community banker, we appreciate the fresh ideas and expertise he offers to help reduce inefficiencies that can ultimately harm consumers.”

- Arvest Bank Chairman and CEO Kevin Sabin

“I am honored to support Congressman’s Hill’s deep understanding of financial services and commitment to championing polices that will continue to strengthen community banking. His first-hand knowledge and experience is evident in these principles to strengthen community banks, which are vital to our small businesses, families, and local communities.”

- Eagle Bank Executive Chairman Cathy Owen

“I have known and worked with Congressman Hill for many years both as banker in Arkansas and as a congressman. He has always been knowledgeable of the issues affecting community banking and been help in finding solutions to our problems. During COVID, Congressman Hill was the go-to between the bankers and the SBA in designing a system to help small businesses and when processes needed tweaking, he got it done. The issues laid out in these principles should all be considered in the upcoming Congress.”

- First Security Bank Chairman Reynie Rutledge

STRENGTHS AND WEAKNESSES IN FAIR LENDING CFPB REPORT:

by Compliance Alliance

The Consumer Financial Protection Bureau’s November “MatchedPair Testing in Small Business Lending Markets” report gives some hints as to how the new 1071 small business lending data could be used. The Bureau did 100 ‘secret shopper’ tests on different lenders to assess racial discrimination and disparate treatment. The tests included subjective and objective criteria measuring each of four domains:

• The level of encouragement or discouragement to apply for financing;

• Information provided about products and steering to specific products;

• Overall customer service; and

• Business and credit information requested from the applicant.

While the results demonstrate that customers were treated similarly in terms of objective criteria for customer service (e.g., being greeted, thanked for coming in, etc.) and the information requested from the applicant, differences were identified in terms of both the level of encouragement to apply and the extent to which lenders discussed non-requested products.

BLACK TESTERS WERE ENCOURAGED TO APPLY FOR PRODUCTS ABOUT WHICH THEY HAD NOT INQUIRED, SUCH AS CREDIT CARDS OR HOME EQUITY LOANS, AT A HIGHER RATE THAN WHITE TESTERS WITH SIMILAR PROFILES.

THE CFPB REPORT SHOWED THAT TESTERS WERE TREATED SIMILARLY IN AREAS THAT ARE OFTEN ADDRESSED DIRECTLY IN TRAINING AND PROCEDURES ... BUT THAT RACE-BASED DIFFERENCES EXISTED IN AREAS WHERE STAFF EXERCISE MORE DISCRETION.

Black testers were encouraged to apply for products about which they had not inquired, such as credit cards or home equity loans, at a higher rate than White testers with similar profiles. The report also found that although testers were encouraged to apply for loans regardless of race, the objective and subjective measures of the level of encouragement were higher for White testers. Perhaps most concerningly, the report recounts instances in which Black testers were told they would not qualify for products, although the same bank representative encouraged White testers with similar profiles to apply.

The Bureau’s conclusion encourages financial institutions to ensure lending staff adhere to fair lending requirements. It does not specifically require banks to engage in secret shopper testing. It would not be surprising, however, if regulators did focus on the identified areas of disparate impact.

The overall results may present additional insights about the effectiveness of banks’ fair lending programs. The CFPB report showed that testers were treated similarly in areas that are often addressed directly in training and procedures (information required for an application and standard customer service procedures), but that race-based differences existed in areas where staff exercise more discretion, such as the degree of encouragement to apply and the types of products discussed.

This may indicate that discriminatory bias is not originating at the institutional or management level, but rather that disparate

treatment emerges in areas where bank representatives exercise more discretion. Because aspects that are more closely managed showed less evidence of discrimination, there is reason to conclude that training and documented procedures are effective in mitigating fair lending risk and, accordingly, that banks can likely reduce risk by augmenting their training and procedures based on the report’s findings. Banks may therefore want to consider whether to add training and procedures on less structured aspects of customer engagement.

Based on the report, it appears that a particular emphasis on product recommendations is appropriate. The Bureau expressed concern that the credit card or HELOC products recommended disproportionately to Black testers may present more risk to a small business owner than a business loan. Steering an applicant who may qualify for a small business loan into a product that is riskier for the applicant may raise UDAAP as well as fair lending concerns. Steering a customer toward a product in which they have not expressed interest may, of course, also result in a loss of business for the bank if it gives the impression that the desired product is not available.

Banks looking to improve fair lending training and procedures may find our Fair Lending Toolkit helpful and, as always, our Hotline team is available to assist with any questions you may have.

TRAINING AND DOCUMENTED PROCEDURES ARE EFFECTIVE IN MITIGATING FAIR LENDING RISK AND, ACCORDINGLY, THAT BANKS CAN LIKELY REDUCE RISK BY AUGMENTING THEIR TRAINING AND PROCEDURES BASED ON THE REPORT’S FINDINGS.

AMONG BANKERS’ TOP CHALLENGES CYBERSECURITY, REGULATION

by Carl White

Cybersecurity, regulation, and technology and funding costs are community bankers’ most pressing current concerns, according to an annual survey that covers the economic, regulatory, competitive and operational challenges they face.

The findings are part of the 2024 Conference of State Bank Supervisors (CSBS) Annual Survey of Community Banks. The survey, conducted by CSBS and state bank regulators, aims to take the pulse of the nation’s community banks—institutions with less than $10 billion in assets. This year, nearly 370 community bankers from 38 states participated; about two-thirds of participants represented banks with assets between $100 million and $1 billion. The report also contains wide-ranging comments on survey topics from five selected community bankers.

KEY CHALLENGES FOR BANKS

As in last year’s survey, cybersecurity was the top challenge for surveyed community bankers, with 96% of respondents naming it as an “extremely important” or “very important” risk; that share was

up slightly from 93% in the 2023 survey. Funding costs and regulation followed with 89% of respondents reporting them “extremely important” or “very important.” The funding costs percentage was similar to last year’s total, but regulation rose from 81% in the previous year’s survey. Net interest margins and core deposit growth were other top risks linked to the high-interest rate environment of the last two years.

Technology implementation and costs were cited as high risks by 80% of bankers. Liquidity still ranked as a top risk with 78% of respondents indicating that it was either an “extremely important” or “very important” risk, but that was down from 84% in 2023. Still, liquidity was considered a top risk by just 35% of respondents in 2022, evidence that the economic environment weighs prominently in perceptions of risk.

TRENDS IN TECHNOLOGY, COMPETITION AND FUNDING

The 2024 survey revealed that community banks are more frequently partnering with fintech firms to provide services to their customers. In 2023, 59% of respondents reported they had no relationship with a fintech firm, but in 2024, that proportion had declined by nearly half, to 32%. Bank-fintech partnerships are most common for services such as mobile banking support, loan origination and underwriting, and other process improvements, including fintech hubs.

Although community banks were largely able to keep deposit balances stable in 2024 after a turbulent 2023, stiff competition meant the costs of those deposits—both transaction and nontransaction— spiked. Bankers reported that other community banks are still their primary competitors for transaction (e.g., checking accounts) and nontransaction accounts, but regional and national banks and credit unions have made inroads in competing for transaction accounts.

Bankers have relied more on wholesale funding, such as brokered deposits, Federal Home Loan Bank advances, other borrowings and reciprocal deposits as deposit competition has accelerated and its associated costs have risen over the past 18 months. Stimulusrelated deposits from the COVID-19 era are long depleted, and the historical balance between core (mostly deposits) and noncore (largely funding from external sources) has resumed for the community banking industry.

In the survey, bankers were asked about the stigma associated with using various external sources of funding. While 40% of respondents said that use of the Federal Reserve’s emergency facilities, such as last year’s Bank Term Funding Program, carried “high” or “very high” stigma, that percentage dropped to 25% for the Fed’s discount window advances. The Fed has made a number of changes to discount window operations over the past 20 years to lessen stigma, and the federal financial institution regulatory agencies have updated guidance encouraging depository institutions to incorporate the window as part of their contingency plans.

WHAT’S AHEAD

The CSBS Annual Survey of Community Banks provides valuable insights into the opportunities and challenges facing the nation’s community banks—insights that are valuable to bankers, their regulators, and the business and academic communities. In addition to the survey, CSBS produces the quarterly Community Bank Sentiment Index, which tracks community bankers’ outlook on the economy. While the results for the third quarter of 2024 marked the first positive reading since the fourth quarter of 2021, the industry faces several headwinds that will keep regulators closely monitoring credit quality, liquidity and overall profitability in the months to come.

ABOUT THE AUTHOR

Carl White has more than 35 years of experience in the Supervision Division of the Federal Reserve Bank of St. Louis. He is currently senior vice president of the Supervision, Credit and Learning Division. He has served in various other roles within Safety and Soundness, beginning his career as an examiner.

TOP RISKS NAMED BY NEARLY 370 COMMUNITY BANKERS FROM 38 STATES.

96% OF COMMUNITY BANKERS NAMED CYBERSECURITY

89% OF COMMUNITY BANKERS NAMED FUNDING COSTS & REGULATION

80% OF COMMUNITY BANKERS NAMED TECHNOLOGY IMPLEMENTATION AND COSTS

Overdrafts or Overreach? THE NEW STANDARD FOR OVERDRAFT OPT-INS

by Tim Schenk KBA General Counsel

On September 17, 2024, the Consumer Financial Protection Bureau issued its Circular on “Improper Overdraft Opt-In Practices.” The question presented in the Circular: “Can a financial institution violate the law if there is no proof that it has obtained consumers’ affirmative consent before levying overdraft fees for ATM and one-time debit card transactions?”

The answer to the question presented: “Yes. A bank or credit union can be in violation of the Electronic Fund Transfer Act (EFTA) and Regulation E if there is no proof that it obtained affirmative consent to enrollment in covered overdraft services. The form of the records that demonstrate consumer consent to enrollment may vary according to the channel through which the consumer opts into covered overdraft services.”

“Regulation E’s overdraft provisions establish an opt-in regime, not an opt-out regime, where the default condition is that consumers are not enrolled in covered overdraft services. Financial institutions are prohibited from charging fees for such services until consumers affirmatively consent to enrollment. Violations of 12 CFR 1005.17(b)(1) can be proven in part by showing evidence that a consumer was charged an overdraft fee on a covered transaction where the available evidence does not adequately validate that the consumer opted in.”

“Consistent with this opt-in design, when determining compliance with Regulation E’s opt-in provisions, regulators and enforcers should inspect the financial institutions’ records to determine whether there is evidence of affirmative consent to enrollment in covered overdraft services.”

Reading the Circular reminds me of my first year of law school. In those days, it was “the best evidence rule” rather than banking... but here we are talking about overdrafts again.

The Circular then confirms the acceptable form of records (evidence, in other words) to “demonstrate consumer consent.”

Approved examples include:

For consumers who opt into covered overdraft services in person or by postal mail, a copy of a form signed or initialed by the consumer indicating the consumer’s affirmative consent to opting into covered overdraft services would constitute evidence of consumer consent to enrollment.

For consumers who opt into covered overdraft services over the phone, a phone call recording in which the consumer elected to opt into covered overdraft services would constitute evidence of consumer consent to enrollment.

For consumers who opt into covered overdraft services online or through a mobile app, a securely stored and unalterable “electronic signature” as defined in the E-Sign Act (15 USC 7006(5)) conclusively demonstrating the specific consumer’s action to opt in affirmatively and the date that the consumer opted in would constitute evidence of consumer consent to enrollment.

In short, you are now in law school and must ensure you have the “best evidence” to prove your customer agreed to overdraft. I always thought bankers were in the business of finance and serving their communities. Apparently, they should also be able to take to the courts and prove “beyond a reasonable doubt” that your consumer opted-in to overdraft protection. I’ve heard of having to wear many hats in business, but this is ridiculous.

Before further addressing the details of the Circular, I think it’s important to remember that at its core, overdraft is a service viewed positively by consumers. More importantly, it is a service that consumers rely on.

A recent American Bankers Association poll conducted by Morning Consult (unlike the CFPB, who models theirs solely on consumer complaints) showed:

Seven in 10 consumers (69%) find their bank’s overdraft protection valuable, compared with only 13% who do not.

Eight in 10 consumers (80%) who have paid an overdraft fee in the past year were glad their bank covered their overdraft rather than returning or declining payment.

Sixty-five percent of consumers think it’s reasonable for banks to charge a fee for an overdraft, as opposed to only 23% who think it’s unreasonable.

The vast majority of consumers (88%) said it is easy for them to check their account balance so that they can avoid overdrawing their account.

Seven in 10 respondents (68%) know that customers can opt out of receiving overdraft protection at any time after they’ve accepted the service, compared with only 5% who incorrectly believe that customers are required to stay in the program once they accept the service.

Of those respondents who are currently enrolled in overdraft protection, 8 in 10 consumers (8v1%) have never seriously considered stopping or getting out of the service.

A strong majority (69%), said they prefer that their bank offer overdraft protection as an option to customers whether there is a fee or not, as opposed to only 11% who prefer that their bank not offer overdraft protection at all.

“Yes. A bank or credit union can be in violation of the Electronic Fund Transfer Act (EFTA) and Regulation E if there is no proof that it obtained affirmative consent to enrollment in covered overdraft services.”

IN SHORT, YOU ARE NOW IN LAW SCHOOL AND MUST ENSURE YOU HAVE THE “BEST EVIDENCE” TO PROVE YOUR CUSTOMER AGREED TO OVERDRAFT.

Statistics prove that the overwhelming majority of consumers appreciate their overdraft protection. They use it, need it, and don’t want it to go away. The CFPB’s continuing attack on overdrafts defies any legal or logical argument. It means more work for the bankers, more confusion for the customers, and more ways for overreaching regulators to meddle in the business we know better than anyone - banking!

The truth is that banks want their customers to understand how overdraft protection works. Every bank is happy to help their customers understand this process and disclose all the terms. As noted above, it is a service, not a problem. The problem is the new rule!

The Circular says one form of approved evidence of consent will be via video or audio recording. I am certainly not an expert in every state’s laws, but some states require dual consent to record a phone conversation (yet another legal issue of what constitutes consent, but that’s a second-year law school class). While customers might be used to that kind of thing for services like paying bills over the phone, Cable & Internet providers, or water bills, it’s just one more step for a banker who simply wants to help their customer and build that relationship.

So now that you’ve captured your audio or video recording, where do you put it? Is your bank prepared to purchase the bandwidth needed to store this kind of information? My phone charges $10 every time I run out of space for additional cloud storage. What will your cost be, and how can you pay for it? According to the CFPB, all fees are bad, right? So don’t think about tacking on an extra “service charge.” Where is the money going to come from? The CFPB can whip up a “study” that shows a minimal cost to the institution, but we all know it is another absorption for the bank’s bottom line.

Let’s look at the other opt-in method proposed by the CFPB. A signed consent form. It seems standard enough at first, but with a closer look, consider the impedance to how you do business. Will customers be confused about why they must sign a new agreement when they visit the bank to withdraw cash? More importantly, how are you going to get every customer into the bank? What about more seasoned customers who have travel limitations? What about more rural customers with limited internet access who rarely visit the bank?

Presumably, if banks are unable to secure their customers’ expressed opt-in, that customer’s overdraft protection will be turned off. What happens when their electric bill bounces in the winter and the customer blames the bank? Are you ready to face that conversation? It sounds to me that bankers may now have to sign up for the additional first-year law classes of torts and contracts.

The bottom line with this and nearly everything coming out of the CFPB is that bankers are forced to do everything but banking. Their time, effort, and resources can no longer be focused on serving their communities because they have to spend nearly all of their energy complying with new regulations that do not benefit their customers. Enough is enough!

Overdraft protection is a service that consumers rely on and clearly appreciate. What if the weight of regulation becomes too much, forcing banks like yours to simply discontinue the service altogether? Perhaps consumers will have a claim against the very Bureau that is supposed to be protecting them. Maybe the CFPB will enroll its enormous staff in torts.

AN UPDATE ON LAWSUITS AROUND THE COUNTRY

by Jacob Fair Wright Lindsey Jennings

There are a number of lawsuits working their way through the legal system that will impact banking and financial regulation. The following summary is a partial list of some of the most pertinent and impactful cases that could affect community banks.

CORPORATE TRANSPARENCY ACT (CTA) – TX

Texas Top Cop Shop, Inc. v. Garland, No. 4:24-CV-478, 2024 WL 4953814 (E.D. Tex. Dec. 3, 2024)

Judge Mazzant enjoined enforcement of the CTA and its implementing regulations finding they are “likely unconstitutional.” This preliminary injunction arguably temporarily halts enforcement of the CTA with respect to the pending compliance deadlines pending any further determinations to the contrary.

COMMUNITY REINVESTMENT ACT (CRA) - TX

Texas Bankers Ass’n v. Off. of the Comptroller, 728 F.Supp.3d 412 (N.D. Tex 2024).

In 2023, the Federal Reserve, Federal Deposit Insurance Corporation, and Office of the Comptroller of Currency updated their rules enforcing the 1977 fair lending law, which seeks to ensure banks lend to their local communities. The new rules, among other things, broadened the geographic areas in which lenders would be required to extend loans and other services to low-income Americans. In February of 2024, a coalition of trade groups sued to block the overhaul, claiming it would discourage lending.

In March of 2024, a federal judge in Texas granted a requested for a preliminary junction A preliminary injunction was entered enjoining the law for several reasons. In July of 2024, the agencies

filed an appeal of the preliminary injunction to the Fifth Circuit. The appeal remains pending.

CONSUMER FINANCIAL PROTECTION BUREAU (CFPB) 1071 RULE – TX & KY

Texas Bankers Association v. CFPB, No. 7:23-CV-00144 (S.D. Tex.)

Monticello Banking Co. v. CFPB, No. 6:23-CV-00148-KKC (E.D. Ky.)

CFPB Section 1071 requires financial institutions to determine if a business is woman-owned, minority-owned, or a small business. In Texas, a bank and two trade associations filed a complaint against the CFPB asserting that the rule was invalid because the funds used to promulgate the rule were drawn from the CFPB’s unconstitutional funding structure, which was being challenged and pending in the United States Supreme Court. The Supreme court held that the CFPB’s funding mechanism comported with the Appropriations Clause. The remaining arguments before the Texas federal court include that the CFPB exceeded its authority in adding data points for collection, the CFPB acted arbitrarily and capriciously, and the costs and benefits analysis was unreasonable.

Following the lead of their Texas counterparts, a group in Kentucky filed a similar lawsuit. The Kentucky Court granted a stay of the case pending a decision in the Texas case.

CONSUMER FINANCIAL PROTECTION BUREAU (CFPB) 1033 RULE – KY

Forcht Bank, N.A., et al v. CFPB and Rohit Chopra, No. 5:24-cv00304-DCR (E.D. Ky.)

On October 22, 2024, the CFPB issued its final rule implementing Section 1033 of the Dodd-Frank Act (the “Open Banking Rule”). The Rule requires financial institutions to provide a right of electronic access to the most recently covered data to authenticated consumers and authenticated third parties. Industry groups in Kentucky filed a lawsuit against the CFPB on the day the Rule was issued seeking injunctive relief, alleging that the CFPB exceeded its statutory authority. The federal court has not issued a ruling.

FDIC RE-PRESENTMENT – MN

Minnesota Bankers Ass’n v. Fed. Deposit Ins. Corp., No. CV 232177(PAM/ECW) (D. Minn. Apr. 8, 2024)

A Minnesota federal district court dismissed without prejudice the complaint filed by the Minnesota Bankers Association against the FDIC challenging the FDIC’s guidance on non-sufficient funds. The complaint sought declaratory and injunctive relief under the Administrative Procedures Act regarding FIL 40 (FDIC Financial Institutions Letter 40-2022: Supervisory Guidance on Multiple RePresentment NSF Fees) which prohibits FDIC supervised banks from charging multiple NSF fees for the same item. The complaint

alleged that FIL 40 is a legislative rule promulgated without adherence to the APA’s notice and comment rulemaking procedures, resulting in arbitrary and capricious agency action, and that the FDIC exceeded its statutory authority. On June 5, 2024 the Minnesota Bankers Association filed a notice of appeal to the United States Court of Appeals for the Eighth Circuit. The appeal has been briefed and the parties are awaiting a date for oral argument.

INTERCHANGE – IL

Illinois Bankers Ass’n v. Kwame Raoul, No. 1:24-cv-07307 (N.D. Il.)

The Illinois Fee Prohibition Act (IFPA) was signed into law won June 7. The IFPA would ban banks, payment networks, and other entities from charging or receiving interchange fees in Illinois on the portion of a debit or credit card transaction attributable to tax or gratuity. The Illinois Bankers Association, American Bankers Association, America’s Credit Unions, and Illinois Credit Union League filed a complaint seeking a preliminary injunction of the new law. Plaintiffs argue that the IFPA would undermine the benefits that credit and debit cards provide to consumers and businesses. The complaint outlines how the new law violates the National Bank Act and the Federal Credit Union Act and cannot be enforced against national or state-chartered banks, federal or state savings institutions, federal or state-chartered credit unions, nor their servicers. Oral arguments were held on October 30, 2024. The Court has not issued a decision.

EMERGING LEADERS LEADERSHIP CONFERENCE

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.

LITTLE ROCK • OCTOBER 29 TH -30 TH

photos courtesy of ABA

PHOTOS: Left to Right from Top: Group with Mitch Holthus; Jason Tennant; Chance Robbins, Rachel Graham, Leah Thompson, Mickey Belle Shields Manley, and Jason Tennant; Amber Murphy, Brennan Abbey, 2024 winner of the Bill Holmes Award, and Lorrie Trogden.

PHOTOS: Left to Right from Top: ELS Opening Night Reception at Dust Bowl; Amber Murphy; Anna Norris and Mitch Holthus; Jason Tennant; employees from FNBEA

NEWS & MOVES

Warren Stephens Chair, President and CEO, Stephens Inc.

WARREN STEPHENS TO BE NOMINATED AS U.S. AMBASSADOR TO UNITED KINGDOM

President-elect Donald Trump announced Monday (Dec. 2) that he will nominate Warren Stephens, chair, president and CEO of Little Rock-based Stephens Inc., as the U.S. Ambassador to the United Kingdom.

Stephens Inc. is a privately held, independent financial services firm headquartered in Little Rock. Stephens has 28 offices worldwide and employs more than 1,200 people. It has offices in London, England and Frankfurt, Germany, two of the largest financial centers in Europe.

“I am pleased to announce that Warren A. Stephens, one of the most successful businessmen in the Country, has been nominated to serve as the United States Ambassador to the Court of St. James’s, a role in which he will act as our Representative to the United Kingdom. Over the last 38 years, while serving as the President, Chairman, and CEO of his company, Stephens Inc., Warren has built a wonderful financial services firm, while selflessly giving back to his community as a philanthropist,” said Trump.

“It is my honor to be nominated by President Trump as Ambassador of the United States to the Court of St James’s. I have expressed to President Trump that I would be extremely proud to serve our country and his administration, working to implement the President’s agenda and further strengthen the long-standing alliance between the United States and the United Kingdom. Service to country has been a guiding principle throughout my life, and I am humbled and thankful for this opportunity,” said Stephens.

“OVER THE LAST 38 YEARS, WHILE SERVING AS THE PRESIDENT, CHAIRMAN, AND CEO OF HIS COMPANY, STEPHENS INC., WARREN HAS BUILT A WONDERFUL FINANCIAL SERVICES FIRM, WHILE SELFLESSLY GIVING BACK TO HIS COMMUNITY AS A PHILANTHROPIST,”

GEORGE MAKRIS TO RETURN AS CEO OF SIMMONS BANK, NEW COO NAMED

Simmons First National Corp. announced that Robert “Bob” Fehlman will step down as CEO and former CEO George Makris, the current executive chairman, will assume CEO duties effective Jan. 1, 2025. Fehlman cited a focus on personal interest and family medical issues for his planned departure. Makris previously served as chairman and CEO from 2014 through 2022.

“I want to express my deep appreciation to Bob for his decades of service to our organization,” said Makris. “Bob has been a tremendous asset to the bank for many years, and we wish him all the best in his well-deserved retirement. Bob has played a significant role in the expansion of the bank and has been a leader of our better bank initiative as CEO.”

Fehlman began his banking career with Simmons in 1988, serving in a variety of leadership roles including controller, chief financial officer, treasurer, chief operating officer, president, and most recently as chief executive officer.

Simmons also announced that veteran banker Christopher “Chris” Van Steenberg has joined Simmons as chief operating officer (COO) effective Nov. 12. He will report to Simmons’ president Jay Brogdon.

Van Steenberg brings more than 25 years of experience in the financial services industry. He most recently was executive vice president, chief digital and product officer for a Mid-South bank with more than $80 billion in assets. Prior to this role, he was executive vice president, head of regional banking strategy and delivery where he led engagements with business partners to deliver strategic objectives.

CATHY OWEN ELECTED AS VICE-CHAIR OF AMERICAN BANKERS ASSOCIATION BOARD

In October, Cathy Owen of Arkansas was elected as Vice-chair of the American Bankers Association’s Board.

Owen is currently Chair, President & CEO of State Holding Company, which is the holding company for Eagle Bank & Trust Company in Little Rock. She is also Executive Chair of the bank, which is a 105 year old, $490 million state bank, with 13 branches in central Arkansas, and Mortgage Loan Offices in Arkansas, Idaho, Louisiana, and Mississippi.

A past chair of the Arkansas Bankers Association (2018-2019) and the only female to serve as chair, she held several past roles on ABA’s Board and Executive Committee. This year, Owen celebrated her 50th year in banking, having started to work at the bank when she was a teenager, as the shred clerk. She has served in nearly every capacity within the bank, up to and including president and CEO.

THIS YEAR, OWEN CELEBRATED HER 50TH YEAR IN BANKING. SHE HAS SERVED IN NEARLY EVERY CAPACITY WITHIN THE BANK, UP TO AND INCLUDING PRESIDENT AND CEO.

FARMERS & MERCHANTS HIRES SIMONE SINGH

AS COMMERCIAL LOAN, COMMUNITY DEVELOPMENT OFFICER

Farmers & Merchants Bank and The Bank of Fayetteville have hired Simone Singh as Commercial Loan and Community Development Officer. Singh, who began her role in August, brings more than 10 years of experience in lending and relationship management to the position.

Singh will be responsible for managing the commercial loan portfolio and developing new business for the bank. She will be based at The Bank of Fayetteville branch at 1 S. Block Ave. in Fayetteville.

“We are thrilled to welcome Simone Singh to our team,” Farmers and Merchants Bank CEO Brad Chambless said. “Her extensive experience and passion for supporting business owners align perfectly with our commitment to providing tailored financial solutions to our community.”

Singh’s journey in banking began as a means to fund her film school education, but quickly evolved

into a fulfilling career. She previously worked for 11 years at Arvest Bank, most recently as a commercial banker.

“What started as a practical decision turned into a deep passion for helping entrepreneurs achieve their financial goals,” Singh said. “I’m excited to bring this passion to Farmers and Merchants Bank and The Bank of Fayetteville.”

With a degree in mass communications from the University of Arkansas at Little Rock and additional training from the Arkansas Bankers Association Commercial Lending School, Singh brings communication skills and financial expertise to her role. She also serves as the president of the Junior League of Northwest Arkansas, is a founding member of CREW Northwest Arkansas, and serves on the young leaders committee of the Urban Land Institute’s Northwest Arkansas chapter.

“HER EXTENSIVE EXPERIENCE AND PASSION FOR SUPPORTING BUSINESS OWNERS ALIGN PERFECTLY WITH OUR COMMITMENT TO PROVIDING TAILORED FINANCIAL SOLUTIONS TO OUR COMMUNITY.”

Cathy Owen Vice-chair, American Bankers Association’s Board

Simone Singh Commercial Loan and Community Development Officer

NEWS & MOVES

Senior Vice President, Communications Director

ANGELA CONNELL PROMOTED TO

SVP, COMMUNICATIONS DIRECTOR AT FIRST COMMUNITY BANK

First Community Bank named Angela Connell as senior vice president, communications director for the financial institution. Connell is located at the bank’s headquarters in Batesville and has been with First Community Bank since July of 2019.

She graduated from Batesville High School in 2002 and earned a bachelor’s degree in communications from Arkansas State University, majoring in journalism with an emphasis on public relations and minoring in interdisciplinary family studies. With nearly 20 years of experience in public relations, she has developed expertise in media buying, public relations strategy, copywriting, and speechwriting.

“I’m excited to continue my work in this new capacity,” Connell said. “First Community Bank is dedicated to fostering genuine relationships and supporting our

community, and I look forward to furthering these efforts in my expanded role.”

“Angela’s knowledge and expertise have significantly strengthened First Community Bank’s relationships with our media partners and valued customers. Since I joined this remarkable team, she has consistently exceeded my expectations and inspired us all to reach new heights. Angela is a tremendous asset to our team, a dedicated employee, and a phenomenal communications director. It is truly a privilege to work alongside her every day. I am thrilled for this well-deserved promotion and eager to see how her vision will continue to shape our future,” said Carrie Price, senior vice president, chief marketing officer.

Connell is also an active member of her community, serving on the board of Family Violence Prevention.

ARVEST BANK EXECUTIVE

DON WALKER DIES

Longtime Arvest Bank executive Don Walker died in late November. He was regional executive when he retired from the Fayetteville-chartered bank in January 2020. Walker was first hired into banking by Sam Walton.

He completed a 42-year career with Arvest, which included helping to form the Arvest name and create its mission statement. He also was president and CEO for its Bentonville, Siloam Springs and Tulsa, Okla., markets.

Walmart founder Sam Walton hired Walker in February 1978 as a loan officer at The Bank of Bentonville. It was the largest

bank in a holding company that’s still controlled by the Waltons and known today as Arvest Bank Group Inc.

During Walker’s tenure, Arvest grew from 100 employees and eight Arkansas branches to about 6,400 employees and 280 offices in Arkansas, Kansas, Missouri and Oklahoma.

“Don Walker exemplified the values that define Arvest Bank. His unwavering commitment to his colleagues, customers and community left a lasting mark on all who had the privilege of working with him. He was a great friend to so many of us, and he will be deeply missed,” said Kevin Sabin, chairman and CEO of Arvest Bank.

WALMART FOUNDER SAM WALTON HIRED WALKER IN FEBRUARY 1978 AS A LOAN OFFICER AT THE BANK OF BENTONVILLE. HE COMPLETED A 42-YEAR CAREER WITH ARVEST, WHICH INCLUDED HELPING TO FORM THE ARVEST NAME AND CREATE ITS MISSION STATEMENT.

Angela Connell

Regional President and Chief Lending Officer for Northwest Arkansas

JARED GABRIELE NAMED REGIONAL PRESIDENT FOR CHAMBERS BANK

Jared Gabriele has joined Chambers Bank as its Regional President and Chief Lending Officer for Northwest Arkansas. Gabriele will oversee the bank’s lending teams in Elkins, Fayetteville, Rogers and Springdale.

“We are excited to have Jared join the Chambers Bank family,” Greg Rotter, Corporate Chief Lending Officer, said. “As a lifelong resident of Northwest Arkansas, his leadership and energy will help Chambers Bank reach our continued growth goals in the NWA market.”

“AS

Gabriele has over 18 years of experience in the financial services industry, serving as a branch manager, mortgage closer and commercial loan officer before becoming market president for a community bank.

“I’m excited to join Chambers Bank and lead an incredible team in our mission to serve our community,” Gabriele said. “By building strong relationships with our customers, we will help them drive success while making a lasting difference and creating growth and opportunity for everyone.”

A LIFELONG RESIDENT OF NORTHWEST ARKANSAS, HIS LEADERSHIP AND ENERGY WILL HELP CHAMBERS BANK REACH OUR CONTINUED GROWTH GOALS IN THE NWA MARKET.”

Eileen Jennings Director of Community Lending and Investment for Arvest Opportunity Fund

EILEEN

JENNINGS

HONORED WITH EMERGING LEADER AWARD

Arvest Bank is pleased to announce Eileen Jennings, director of Community Lending and Investment for Arvest Opportunity Fund, has been named a recipient of the American Bankers Association 2024 Emerging Leader Awards.

The award recognizes the next generation of bank leaders who are committed to the highest standards of achievement and service to both their industry and local communities. The judging criteria included dedication to the profession, inventiveness, leadership skills, mentoring ability, personal integrity, tenure at the bank and broader commitment to a career in banking, sustained career progress, and academic training including advanced degrees and certificates/certifications.

The winners were selected by a diverse steering committee of industry professionals after a review of nominations from banks across the country. Jennings was one of 12 bankers selected to receive the award.

“It’s truly an honor to be recognized in this way and hopefully shine a light on the Arvest Opportunity Fund’s mission of investing in people through finance and education,” said Jennings. “Helping move people from underbanked to a fully bankable status not only helps them but strengthens the economic health and stability of the communities we serve.”

Jennings, who has more than 20 years’ experience working in business lending, helped launch the Arvest Opportunity Fund in 2022 as a wholly owned, non-bank subsidiary of Arvest Bank to provide loans, lines of credit and lending-related financial education to applicants who fall just below the bank’s credit requirements and thus unable to access traditional banking products and services. In her role, Jennings oversees direction and administration of the lending functions, programs, products and services.

Jared Gabriele

NEWS & MOVES

STONE BANK ANNOUNCES NEW HIRES, PROMOTIONS

Deana Dukes has joined Stone Bank in Little Rock as an SBA Loan Assistant. She was most recently associated with Rabo Agri Finance in Little Rock. She holds an undergraduate degree from the University of Tennessee at Chattanooga and a Master of Business Administration from the University of Arkansas at Little Rock.

Kathy Horelica has joined the bank’s SBA Division as a Vice President and Business Development Officer, according to Vinny Muratore, president of the division. Horelica is a 25-year veteran of the financial services industry and most recently was a Vice President and Government-Guaranteed Lending

Dan Broyles Senior Vice President and Loan Officer

Officer for Summit Bank. She has also worked with Integro Bank and Lincoln Savings Bank. She is a graduate of Capella University with a degree in Business and Finance.

Steve Brown joined Stone Bank in Little Rock as a Lending Officer. He was formerly a fleet manager with Pinnacle Express and a mortgage loan officer with Arkansas Federal Credit Union. He is a graduate of Thornton Community College.

Stone Bank has also hired William Hogg, Jr., in Little Rock as a Portfolio Manager. He was formerly affiliated with U.S. Bank and Bank OZK. He earned an undergraduate degree from Southern Arkansas University and a graduate degree from Webster University. He serves on the board of directors of ACANSA Arts Festival of the South.

Stone Bank has locations in Little Rock, White Hall, Harrison, Mountain View, DeWitt and Gillett.

DAN BROYLES RETIRES FROM CHAMBERS BANK

Chambers Bank announced that Senior Vice President and Loan Officer Dan Broyles will retire from the bank on December 31, 2024.

“It’s been my honor to work for the Chambers family for the past 24 years,” Broyles said. “I have so much respect for the way that we treat customers with integrity, and I have proudly represented the bank and the Chambers family to the best of my ability throughout my time here.”

Broyles began working for Chambers Bank on October 1, 2000, as a business development officer.

He was promoted to SVP/Loan Officer in 2002, a position he’s held for over 22 years.

“It’s been a privilege to work with Dan,” said John Ed Chambers, III, CEO and Chairman of the Board. “He has been instrumental in our growth in the Northwest Arkansas market and is well respected by his customers and in the community. The Chambers family and the Broyles family have enjoyed a close relationship for many years, and Dan will continue to be special to all of us, even after his retirement from the bank.”

Deana Dukes SBA Loan Assistant

Kathy Horelica Vice President and Business Development Officer

Steve Brown Lending Officer

William Hogg, Jr. Portfolio Manager

CONGRATULATIONS TO THE RECENT GRADUATES OF THE 2024 ABA COMMERCIAL LENDING SCHOOL!

ARVEST BANK: VICTOR BARRIENTOS

FARMERS & MERCHANTS BANK: TAYLOR PRICE

FIRST NATIONAL BANK: NICHOLAS PILLOW

FIRST SECURITY BANCORP: EVER CUELLAR

FIRST SECURITY BANK: COLTON KINCADE

FIRST SECURITY BANK - FARMINGTON: NATE SCHULTZ

STERLING BANK: CHARLES JOHNSON

STONE BANK: STEVE BROWN

UNICO BANK - JONESBORO: CHAD CHADWICK