The Arkansas Banker Spring 2021

THE ARKANSAS BANKER

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SPRING 2021

CONTENTS A PUBLICATION OF THE ARKANSAS BANKERS ASSOCIATION

SPRING 2021

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VOLUME CIV, NO. 1

ARKANSAS BANKERS ASSOCIATION STAFF

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President/CEO Lorrie Trogden VP/Controller Carla Brinkley VP/Professional Development Kami T. Coleman Technology & Marketing Director Jessica Sahene Business Development Director Anna Squire Executive Administrative Assistant Peggy Cecere

EDITORIAL STAFF Editor Roby Brock Creative Director Ashlee Nobel

Lee Lee Arts + Design

Contributing Writers Duncan Bellingrath, Michelle W. Bowman, Amalia Estenssoro, Nathan Gairhan, Jon Harrell, Kathleen Lawson, Wayne Miller, Neal Reynolds, Rob Nichols

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

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President’s Message Professional Development Emerging Leaders Council

Columns 04 08 10 12 20

Departments BANKER Q&As

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Chairman’s Column Washington Update Guest Commentary - Wayne Miller Guest Commentary - Ron Shevlin Guest Commentary - Michelle Bowman

Features 22

Sen. Jimmy Hickey, Jr.

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One Year In

Former Banker Now Leading State Senate The Banker’s Guide to the Post-COVID galaxy

The Millennial Minute: Duncan Bellingrath Five Minutes With ...

Nathan Gairhan

INDUSTRY UPDATES

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Banks’ Economic Impact

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Economics Arkansas

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French Hill Quizzes Fed

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By The Numbers

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NEWS & MOVES

How Arkansas Banks Support the Economy

Financial Courses For Students On Coronavirus Response

How the $2.2 trillion Coronavirus Aid Was Allocated To Be Spent

COVER STORY

32 Digital Dollars

The Federal Reserve Explores a Central Bank Digital Currency

THE ARKANSAS BANKER

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PRESIDENT’S MESSAGE Lorrie Trogden

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“The most successful people see adversity not as a stumbling block, but as a stepping stone to greatness.”

- Shawn Anchor

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President & CEO

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Arkansas Bankers Association

ur industry has certainly had its share of adversity recently, and as always, you made it into stepping stones to greatness. From PPP rounds one

through three, COVID-19, a federal administration change, and 2021 coming in like a lion with a snowpocalypse, Arkansas banks have held steady and supported your employees and your customers. The ABA appreciates all you have done and all that you continue to do to ensure that our industry has a positive economic impact on our state and communities.

Federal – ABA virtual DC Fly-ins began the first week of March with each of our Arkansas delegation. We had good discussion with each of them about the Enhancing Credit Opportunities in Rural America (ECORA) Act, PPP, Cannabis Banking, FedAccounts (Post Office banking), and Credit Unions. Our next round of fly-ins are typically scheduled for September/October and I hope that we are once again able to visit with our delegation in person. Should you want to know more about those topics for your conversations with government officials, the Association can provide that for you.

State – I bring you great news, the ABA sponsored bill HB1255 on cross-collateralization clauses has been signed into law by the Governor and is now Act 313! A big thank you to lead sponsor Representative Brian Evans, Senate primary sponsor Senator Jonathan Dismang, and co-sponsor Representative Howard Beaty, Jr. Bankers Brad Chambless and Marcus Guinn did a fantastic job testifying about the bill in committee. The ABA Government Relations Advisory Committee has been hard at work reading bills, making suggested amendments, and assisting in contacting legislators about bad bills. We could not make the impact that we do without them. As of this writing, the session is scheduled to wrap up somewhere around April 9th.

Bank/Pharmacy Vaccine Clinics – Yet another stepping stone. Many of you reached out to your local pharmacy about providing a location for a COVID-19 vaccine shot clinic, which was especially needed in rural areas. You saw a need in your community and met it. We are thankful to have partnered on this project with the Governor’s office and the Arkansas Pharmacists Association.

Bank On AR+ - The federal House and Senate banking committees are making getting the unbanked and underbanked into the financial system a priority. According to the FDIC’s data, 7.1 million Americans are entirely unbanked. Notably, approximately 14% of Black households and 12% of Hispanic households did not have bank accounts in 2019, compared to white households, whose unbanked rate has dropped to below 3%. In Arkansas, the percentage of underbanked and unbanked households falls above the national average, with 9.7 percent of households in Arkansas unbanked and 22.6 are underbanked. Bank On AR+ helps solve this problem by connecting consumers to high-quality, low fee accounts. Banks are well equipped to address this issue without congressional intervention. I encourage you to take a look at Bank On AR+ and see if it is a good fit for your bank.

In closing, I want to express my deep gratitude to all of you for your dedication and support of the Association. Your investment in us with your membership dues and making us your preferred professional development provider enables the ABA to continue providing relevant value to all of you. I look forward to seeing you in-person at some point in 2021!

Lorrie Trogden, President & CEO

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OUR Thank You TO

2020 ABA BankPAC Members PRESIDENT’S CLUB

Bank of America Farmers Bank & Trust Company First Community Bank Horatio State Bank James Waller Lorrie Trogden Magnolia Banking Corp MNB Bacshares, Inc Petit Jean State Bank Tom Grumbles Works24 Corporation

GOLD

BKD, LLP Boris Dover Brad Chambless Eagle Bank Hall M. Calhoun James Peacock Jon Harrell Kathryn Roberts Larry Wilson Mark Wilson Mike Wilson Paul Church Randy Scott Rob Robinson Sandra Ferguson Sara Cobb Stanton C. Willis

SILVER

Ali King Sugg Brad Harrison Carl Harrell Charles Penick Dan Byars Dr. Chevron Ergle Dyke Johnson

SILVER (continued) Gina Bennett James Beavers James Hawks James Morgan Jason F. Tennant Jerry Kimbrough John Langston John Maus, III John Rose Justin Bell Katherine Foust Kyle Hensley Larry Oaks Melton Cotton Michael Koone Nicholas Nabholz Otto Lienhart, II Paul Lindsey Paula Blackwell Richard Mosley Richard Smith Ronny Goff Steve Bell Steven Bone Stuart Todd Haynes Tommy Bond Tommy Wagner

BRONZE

Angela Ergle Betty Harris Clark Fincher Cornerstone Bank Gary Bowman Joe Sugg Pat Bond Rachel King Randy McCaslin

ABA

OFFICERS Jon Harrell, Chairman Generations Bank, Rogers

Jim Cargill, Chairman-Elect Arvest Bank, Little Rock

Randy Scott, Vice Chairman Farmers Bank & Trust, Blytheville

Tom Grumbles, Treasurer First Service Bank, Greenbrier

Rob Robinson, IV, Past Chairman Simmons Bank, El Dorado

Lorrie Trogden, President & CEO Arkansas Bankers Association, Little Rock

BOARD OF DIRECTORS

Craig Attwood, Pine Bluff Nathan Gairhan, Springdale Brandon Gentry, Wynne Robert Husong, Rogers Gary Kleck, Springdale Cody Knight, Piggott Lance Lanier, Van Buren Barry Ledbetter, Little Rock Wilson Moore, Little Rock Marnie Oldner, Little Rock Mark Roberts, Malvern Todd Smith, Magnolia Rob S. Tiffee, Little Rock Jamie Waller, Magnolia

Your Arkansas Bankers ABA BankPAC contribution is one of the most important investments you can make to protect the future of the banking industry.

THE ARKANSAS BANKER

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CHAIRMAN’S C O LU M N

Sleeping Better Jon Harrell

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Chairman

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Arkansas Bankers Association

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s bankers, I am confident that we are all sleeping better than we were one year ago as the COVID -19 pandemic was launched into our lives. We all started having flashbacks of

a decade ago and the angst of the recession and the impact it had that lasted several years. At this point, this current crisis has been much different in how it impacted us compared to the previous one. The initial phases of the pandemic caused great concern as we harkened back 10 years ago and as banks we all immediately anticipated the worst. The first six months of 2020 saw a dramatic increase in loan loss provisions as we prepared to absorb potential losses brought on by the tremendous fear of the unknown. Provisions lightened up slightly in the last half of the year as we started to get a feel for the impact and the government stimulus programs kicked into gear.

Overall, the banking industry’s net income decreased approximately 36% in 2020 compared to 2019. This is primarily due to additional provisions and I am confident that the new CECL guidelines also played its part in this.

Asset quality concerns were at the forefront of our minds a year ago and thus far have predominately remained at bay. Industry 2020 year end non-current ratio of 1.18% was a far cry from the FYE 2009 ratio of approximately 5%. Obviously, we continue to work with affected industries such as travel and retail and CRE monitoring will continue as no one knows what the future holds for commercial office space.

Industry net interest margins (NIMs) are at an historic low and may be there for a while. The dramatic Fed drop last March plunged us into this low rate environment

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“Combine the low rates, the influx of deposits into the banking system and slowing loan demand and we are all sitting on cash. Loan to asset ratios are declining and it is difficult, if not impossible, to find yield in the bond market and fed funds are the new non-accrual.” and the Fed has consistently indicated that no rate hikes are on the horizon. Combine the low rates, the influx of deposits into the banking system and slowing loan demand and we are all sitting on cash. Loan to asset ratios are declining and it is difficult, if not impossible, to find yield in the bond market and fed funds are the new non-accrual. Basically, our balance sheet mix has changed and thus the impact on the NIM. Overall banking industry loans declined in the 4th quarter of 2020. Banks have tightened their underwriting standards and commercial and consumer demand has decreased. How grateful we are for a strong residential real estate market. The influx of stimulus and PPP funds to the economy has allowed businesses and consumers the chance to reduce overall debt and spending is obviously down due to lockdowns and overall anxiety in regard to the pandemic.

Industry wide bank deposits dramatically increased during 2020. The aforementioned PPP program (round 2 is upon us) and round one and two of stimulus checks (round 3 is coming) primarily ended up on our balance sheets. Additional proposed

government programs to combat the virus will also more than likely end up there also.

The major challenge over the next several quarters will be to estimate out-flow of these deposits and the impact that will have on our liquidity, earnings and capital ratios.

Factor all of these changes and challenges with remote working, COVID quarantines, figuring out PPP originations and forgiveness applications, not to mention off-site regulatory examinations and we can reflect on a most unusual year.

Hopefully, reflecting back on what we have been through will help us in whatever is coming our way. We have to assume we will operate in an increased regulatory environment, competitors are not just the ones across the street anymore and technology is advancing at a rapid pace. The banking industry will continue to change; fewer banks will remain as regulatory and technology frustrations prevail. Also, succession issues continue to be a challenge for some of our rural markets. Those that remain will continue to serve our state well. We have proven over history that the banking system is resilient and that bankers are resilient also.

THE ARKANSAS BANKER

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PROFESSIONAL D E V E LO P M E N T

Calendar of Events APRIL - JUNE 2021

April 06

T UES DAY 5 :00 PM T H URS DAY 1 1 :1 5 A M

A B A A N N UA L CONVENTION

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Along with longstanding events such as the Day with the Commissioner and the Simmons Bank Strawberry Breakfast, we will witness the installation of our ABA officers and more!

LOCATION: Little Rock Marriott, LR

INSTRUCTOR: David Osburn

WEDNES DAY 1 0:00 A M

IRA BENEFICIARY PAYO U T S

In 2020 we had some of the most comprehensive changes to IRAs as we have had in over 15 years. This program will focus on which options are available to which beneficiaries depending on the IRA owner’s date of death.

LOCATION: Virtual Learning

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FA I R L E N D I N G

This webinar will dissect the regulatory requirements and examiner expectations related to Fair Lending in plain English.

Fair Lending is one of those compliance topics that continues to be on examiners “hot” list.

INSTRUCTOR: Jerod Moyer LOCATION: Virtual Learning

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T H URS DAY 2 :00 PM

TU E S DAY 10 : 30 AM

L OA N AG R E E M E N T S AND COVENANTS

M A N AG I N G YO U R AG L OA N PORTFOLIO 2021 A N D B E YO N D

LOCATION: Virtual Learning

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W E D N E S DAY 9: 0 0 AM THU RS DAY 3: 30 PM

TRAINING THE C R E D I T A N A LY S T

This two-day virtual program led is designed to provide lenders and analyst the tools required to understand and use financial information provided by borrowers.

TU E S DAY 10 : 0 0 A M

P R O B L E M L OA N W O R KO U T I N T O DAY ’ S M A R K E T

Attend this seminar to learn how to better manage problem loans and protect the rights of the bank in today’s market!

This will include a brief review of correct business structure, the six elements of proper loan structure, and the four aspects of adequate loan support.

INSTRUCTOR: David Osburn LOCATION: Virtual Learning

INSTRUCTOR: Richard Hamm

In this session, we will look at what is happening with economic conditions that are impacting credit risk to ag lenders. We will also discuss the most common ratios and metrics being used to assign credit risk and techniques you can implement to stress test your ag loan portfolio.

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TU E S DAY 10 : 0 0 A M

This program covers the basics of loan agreements, starting with the typical structure of the document and the roles of financial and non-financial covenants.

INSTRUCTOR: Patrice Konarik

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K E Y R AT I O A N A LY S I S

Learn how to better negotiate with your business clients as well as other financial professionals using the “five-step” analysis plan including liquidity, activity, leverage, operating performance, and cash flow analysis. The session will also include a review of “spreading” a financial statement using Moody’s Lending Cloud software in order to better analyze the key ratios.

INSTRUCTOR: ABA

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MO N DAY 1: 30 PM

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TU E S DAY 9: 0 0 A M W E D N E S DAY 4 : 0 0 P M

R E A L E S TAT E LENDING COMPLIANCE

The program provides an overview of the real estate lending requirements from ten regulations, along with comprehensive coverage of selected topics, policy suggestions, employee training tips, audit techniques and steps to eliminate past problems.

INSTRUCTOR: Rob Newberry

INSTRUCTOR: David Kemp

INSTRUCTOR: Jack Holzknecht

LOCATION: Virtual Learning

LOCATION: Virtual Learning

LOCATION: Virtual Learning

SPRING 2021

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

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T H URS DAY 9:00 A M

CRA REVIEW & U P DAT E

June 09

W E D N E S DAY 9: 0 0 AM

A D VA N C E D FINANCIAL S TAT E M E N T & C A S H F L O W A N A LY S I S

This program provides a review of the existing CRA rules, the FDIC’s proposed rule, the OCC’s final rule, and an explanation of the Federal Reserve Board’s Advanced Notice of Proposed Rulemaking.

Attend this proactive seminar and learn a comprehensive approach to financial statement analysis. Two case studies will be used to illustrate the “five-part” analysis model and the correct interpretation of the financial statements.

INSTRUCTOR: Jack Holzknecht LOCATION: Virtual Learning

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This workshop will provide current, updated tools, techniques, and “real world” practice and examples for learning the critical components of a BSA/AML program.

LOCATION: Virtual Learning

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THU RS DAY 9: 0 0 AM

A D VA N C E D TA X R E T U R N A N A LY S I S This seminar will provide the banker with several advanced tax return concepts and related analyses to help them more effectively work with their business customers.

INSTRUCTOR: Dianne Barton LOCATION: Virtual Learning

ABA Annual Convention April 6th - 8th

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MO N DAY 9: 0 0 AM TU E S DAY 12 : 0 0 PM

CALL REPORT P R E PA R AT I O N : A N U P DAT E

hear the latest information on new, proposed, and revised changes to the Call Report. Recent challenges related to the economic crisis under COVID-19 have added to the reporting burden with changes impacting all financial institutions that will continue into 2021.

INSTRUCTOR: Cynthia Dopjera

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INSTRUCTOR: David Osburn LOCATION: Virtual Learning

Don’t Forget!

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T H URS DAY 9:00 A M F R I DAY 3 : 3 0 PM

BSA/AML F U N DA M E N TA L S BOOTCAMP

AT A GLANCE

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

LOCATION: Virtual Learning THE ARKANSAS BANKER

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WASHINGTON U P DAT E

A Robust Recovery Requires Consistent ‘Rules of the Road’ Rob Nichols

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President and CEO

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ver the course of the pandemic, the U.S. economy has been tested like never before and has more than proven its resilience. That’s

thanks in no small part to our large and diverse financial system: a network of financial institutions of all sizes, charters and business models that are dedicated to providing the products and services that consumers and businesses need to thrive.

The diversity of our financial system is something that is uniquely American. It is important that we preserve that diversity—but we must do so in a manner that ensures a level playing field between providers of financial services and protects all consumers equally.

In ABA’s recently released Blueprint for Growth—a banker-driven document that will serve as our advocacy north star in the year ahead—we identified the need to promote innovation and ensure consistent regulation as one of the top priorities for the industry in 2021.

This is not a new goal, but it remains important at this moment in time as we confront the challenges of modern life—from emerging technologies to a changing climate to recovering from a global pandemic.

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American Bankers Association

Banks have always embraced innovation. Indeed, innovation has a vital role to play in increasing economic competitiveness, promoting financial inclusion and expanding access to banking services. But financial innovation only provides these benefits when undertaken in a safe, responsible manner.

This means that a consistent set of regulatory standards must be applied to providers of financial services—be they credit unions, banks or fintech firms. Un-

fortunately, we’ve seen several instances in recent months of firms attempting to circumvent these regulatory standards by seeking charters that would allow them to access the banking system without being subject to the same rigorous regulatory standards that apply to the nation’s banks.

A prime example of this is Figure Bank, which recently filed an application for a national banking charter through the OCC that, among other things, would allow it to operate without deposit insur-

“Should policymakers accelerate attempts to push the Federal Reserve or the U.S. Postal Service into retail banking, we’ll continue making the case that this kind of involvement is unnecessary, because consumers are already being well-served by a broad and diverse financial services sector. ”

ance. If approved, this charter would enable Figure Bank to apply for membership in the Federal Reserve system while avoiding compliance with regulations like the Community Reinvestment Act. We’ll continue to oppose the approval of charters like these, and we’ll continue to push back against any efforts that would enable new entrants into the financial services marketplace to cherry-pick which rules of the road apply to them.

We’ll also continue our efforts to advocate against further tilting the field for tax-advantaged entities like credit unions and the Farm Credit System. For example, we are pushing strongly against a recent National Credit Union Administration effort to further loosen field of membership restrictions—a move that even the agency’s former chairman blasted as “abandon[ing] rigorous and introspective analysis and its congressional mandate to stay clearly within the four corners of the Federal Credit Union Act.” And, should policymakers accelerate attempts to push the Federal Reserve or the U.S. Postal Service into retail banking, we’ll continue making the case that this kind of involvement is unnecessary, because consumers are already being wellserved by a broad and diverse financial services sector. In 2019, the share of unbanked U.S. households reached a record low of 5.4 percent, according to the FDIC, and banks are working to close that gap through the Bank On movement. With a fast-growing number of banks signed on, Bank On-certified accounts are now offered in 28,000 branches nationwide, in 99 out of the 100 largest metropolitan markets and in all 50 states.

In order for us to be able to convey this message, however, we must ensure that community banks have the capacity and ability to keep innovating. That’s why we’ve been working diligently through ABA’s Core Platforms Committee to smooth over some of the bumps in the road that have historically held banks back from rolling out new digital products and services that their customers want and that they need to remain competitive.

By supporting the digital transition— an effort that was well underway before the pandemic, but is now accelerating at even faster pace—America’s banks can continue to their work to support an economic recovery that is robust and inclusive.

THE ARKANSAS BANKER

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GUEST

C O M M E N TA R Y

Fintech Accelerators and the Future of Financial Innovation Wayne Miller

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Executive Director

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lmost every conversation we have these days includes some aspect of Covid-19, from checking on each other’s safety to marveling at how much we can accomplish from home. The

great news is that today, the conversation is shifting to how to return to “normal” - particularly as currently sparse offices start filling in with co-workers and customers. The world has changed immensely since March of 2020, which means everyday life has evolved for our current and future customers and colleagues. Add in the emergence of 5G, and there is a wealth of opportunity for those who take the time for innovation. Forward thinkers will harness these changes’ potential, and one smart way to get started is through financial technology, or fintech, accelerator programs.

Fintech accelerators take the most promising emerging technologies created by tech visionaries and puts them at bankers’ fingertips, allowing bankers to

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The Venture Center

“Fintech accelerators take the most promising emerging technologies created by tech visionaries and puts them at bankers’ fingertips, allowing bankers to play a significant role in shaping the future of banking. ”

play a significant role in shaping the future of banking. Gone are the days when a bank team needed to wade through a sea of thousands of fintech companies or spend exorbitant fees developing technology to address a particular challenge.

Banking-fintech partnerships are becoming the norm, and fintech accelerator programs speed efforts to advance banking.

Simply put, these programs spark cultural shifts that help banks and financial institutions survive economic downturns and

“Simply put, these programs spark cultural shifts that help banks and financial institutions survive economic downturns and tech disruptions, build engaged and happy teams and implement growth strategies for the next generation of consumers.”

tech disruptions, build engaged and happy teams and implement growth strategies for the next generation of consumers.

Warp-speed digitization can create an uncertain landscape, but attending a fintech accelerator program is an easy way for bankers to find their bearings. Diving into the fintech innovation culture and seeing emerging technologies that reveal trends, opportunities, and potential areas of weakness in your bank clarifies the way forward for bankers. The Venture Center team in Little Rock meets with hundreds of fintech entrepreneurs with market-validated solutions every year but brings only the top ten companies to each program. This approach means any bank attending the accelerator knows that the companies they’ll explore are relevant to today’s challenges.

Seeing what’s available and possible with innovative technologies is critical as customer expectations and needs continue to shift rapidly. Banks must meet those needs to survive.

In addition to meeting the needs of customers, banks are facing changing needs and expectations of employees. Building a thriving team culture focused on the future is more urgent today than ever before. The upheaval of the last year has brought permanent changes to the workplace. While some of these changes are inevitable, like

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rethinking remote work, a culture of innovation remains critical to building strong teams. Accelerators cater to this need by providing a path for engagement in the innovation process.

Today’s accelerators incorporate virtual visits, so there isn’t a limit to the number of people who could attend. The Venture Center has hosted groups of two, ten, and up to 60 people at its programs.

The conversations created by the process have been invaluable to attendees, with thoughts and ideas brought to the forefront by all participants. They have the opportunity to add to the conversation, share their experiences, and challenge their thinking, effectively driving both employee engagement and satisfaction.

With an eye on the future and a successful team in place, preparing for the next generation of customers is a top priority. Take Gen Z, for example. The Financial Brand shared recently that “As Gen Z ages into the key 25-to-40year-old sweet spot for borrowing, they will combine with Generation Y (a.k.a. the Millennials, ages 22 to 37) and could reshape the financial industry in their tech-savvy, mobile-first image.”1 Gen Z has access to fintech tools that are already helping them develop financial awareness and skills to participate at a whole new scale. Also known as tech na-

tives, Gen Z makes up around 40% of the nation’s consumer purchasing power. 2 Fintech tools explicitly geared to Gen Z are growing in number and scope, and failure to consider this population segment could mean substantial financial consequences.

Innovation strategies are essential for financial institutions to serve the next generation of customers, build strong teams, and survive the digital transformation. There’s no question that the future of banking lies in harnessing financial technology’s power in a meaningful way.

Fintech accelerator programs provide a great place to start exploring these emerging technologies and build a culture of innovation today. The Venture Center’s ICBA ThinkTECH Accelerator, which is dedicated to community banking, and FIS Fintech Accelerator programs have track records of proven results due to our unique methodology. In June, The Venture Center will host ten impactful fintech companies and hundreds of financial institutions for the FIS Fintech Accelerator’s sixth year. The fintech companies selected for this year’s cohort will provide a look into the future that can fuel innovation for years to come.

We encourage you to come for a visit.

We’re right here in your backyard at the Little Rock Tech Park, and you are always welcome.

Learn more at www.venturecenter.co/fisfintech.

https://thefinancialbrand.com/90873/generation-z-millennials-social-media-branch-youtube-marketing/ https://thefinancialbrand.com/90873/generation-z-millennials-social-media-branch-youtube-marketing/ THE ARKANSAS BANKER

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GUEST

C O M M E N TA R Y

Top 5 Banking and Fintech Trends For 2021 and Beyond Ron Shevlin

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Director of Research

2021: THE YEAR OF VALUE CHAIN DISRUPTION Claims of “disruption” in financial services have centered on changes at the customer interaction level—i.e., digital account applications, user interfaces, etc.

That hasn’t really resulted in much true disruption because there is a whole value chain of activities that occur leading up to the point of customer interaction—and little of that has changed to date.

Changes (or disruptions) to the value chain have certainly been in the works for awhile now, but 2021 is going to shine a much brighter spotlight on those activities— making 2021 (and beyond) the year of value chain disruption in banking and fintech.

#1 THE BAT TLE FOR SMALL BUSINESS MOVES UP (AND DOWN) THE VALUE CHAIN

2020 saw three important developments in the battle for small business relationships:

A.

PPP loans. The Paycheck Protection Program was important because it enabled many mid-size and small banks and credit unions to lend to small businesses overlooked or turned away by the

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Cornerstone Advisors

bigger banks where those small businesses hold their deposit accounts.

B. Goldman Sachs/Amazon

partnership. Amazon finally cracked open the door to third parties to directly lend to the platform’s merchants. It’s an important move because Amazon issued $1 billion in merchant cash advances to its merchants a couple of years ago.

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Stripe’s announcement of Stripe Treasury. According to

Stripe’s press release: “Stripe Treasury will enable platforms like Shopify to offer merchants access to financial products. Platforms can offer users interest-earning accounts eligible for FDIC insurance and enable customers to have near-instant access to revenue earned through Stripe, and then: 1) spend it directly from their balance with a dedicated card, 2) transfer it via ACH or wire transfer, or 3) pay bills.”

The first development was important for many mid-sized banks because it gave them direct access to a new set of potential customers. But to the extent that the small businesses involved are Amazon merchants or Stripe customers, that direct connection is meaningless.

Amazon’s and Stripe’s ability to embed banking services (deposit accounts and loans) into their existing services gives those firms (and their partners) a major advantage because they have ongoing access to data about those merchants and a near-zero cost of acquisition for those products.

Game over? Not quite.

From a small business value chain perspective, Amazon, Stripe, and even Square are involved at the point of sale or payment activity—which are at the middle of the value chain.

Activities at the beginning of the value chain—production, inventory management, payroll, etc.—and after payments in the value chain like invoicing, accounts receivable, etc., are often invisible to Amazon, Stripe, and Square.

In addition, according to a study of small businesses by Cornerstone Advisors, small businesses accept, on average, 11 forms of payment—most of which are not supplied by Stripe or Square.

According to Cornerstone’s study, small businesses spend more than $500 billion on accounting/bookkeeping, invoicing, bill payment and payment acceptance services from third-party providers.

Figure 1: Small Business Spending on Accounting and Payment Services ($ in billions) $500.00

$108.43

$400.00 $142.03 $531.20

$300.00 $144.85

$200.00 $100.00 $0.00

$135.89 Accounting/ Bookkeeping

Invoicing

Bill Payment

Payment Acceptance

Total

“Advocates of payroll fintech often talk about these services from a financial wellness perspective, but, analogous to the small business battle, payroll fintech is really a battle to move up the deposits and payments value chain.”

Source: Cornerstone Advisors survey of 1,265 small business owners and executives, Q1 2020

Many of these small businesses would consider obtaining accounting and payments services from a bank—as would many that don’t currently use third-party services and, instead, incur internal expenses for their accounting and payments functions.

To compete with Amazon, Stripe, and Square, financial institutions must be embedded into small businesses’ value chains.

Two fintech firms provide ways to do that:

A.

Autobooks provides a turnkey service for financial institutions to white-label small accounting, invoicing, bill payment, and payment acceptance systems for small businesses.

B . Nav partners with retail POS (e.g., Fiserv’s Clover) and accounting systems that enable its partners to identify lending opportunities and access data about small businesses to make lending decisions.

#2 PAYROLL FINTECH (FINALLY) GETS SOME ATTENTION

To date, the battle for consumers’ money has centered on payments—either in the form of the spending account (e.g., challenger banks) or the payment itself (e.g., P2P, mobile payments).

This battle, too, is going to move up the value chain to the point of payroll.

WhiteSight defines four categories in the payroll fintech space:

A. Salary On-demand. Fintechs in this category partner with corporations, HR software providers, and payroll systems to enable flexible access to earned wages.

B. Salary Advance. Fintechs in this category provide short-term credit to employees based on their salary and avoid the exorbitant rates charged by payday lenders.

C. Early Direct Deposit. This feature, largely provided by challenger banks, enables account holders to receive paychecks up to two days in advance from standard payday.

D. Crypto Payroll. This is the newest category which enables firms to make wage payments through multiple crypto-currencies.

Advocates of payroll fintech often talk about these services from a financial wellness perspective, but, analogous to the small business battle, payroll fintech is really a battle to move up the deposits and payments value chain.

Payroll fintech firms offer the banks and fintechs an ability to redirect paychecks away from incumbents’ checking accounts (i.e., deposit displacement) and provide payment and lending services.

Large payroll providers like ADP have been struggling for years to broaden their relationships with the consumers who receive paychecks from them. I’m surprised that the Big Tech firms haven’t acquired one of the payroll providers yet.

Expect payroll fintech to get more attention in 2021—although a lot of the discussion will be couched in wellness terms.

Don’t let that fool you.

As Anish Acharya, Seema Amble, and Rex Salisbury write in a blog post titled The Promise of Payroll APIs, the promises include: 1) Income and employment verification; 2) Direct deposit switching; 3) Payroll-attached lending; and 4) B2B HR and payroll access.

Payroll is the new battleground in 2021.

THE ARKANSAS BANKER

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13

GUEST

C O M M E N TA R Y

#3 FINANCIAL HEALTH GETS POLITICAL

Each year, financial health advocates exhort the industry to focus on consumers’ financial health, relying, however, on nonsense like “half of Americans can’t cover a $400 emergency expense.”

Financial health is going to take center stage in 2021 for a few reasons that have nothing to do with what the advocates talk about: • Banks (and credit unions) will

up their virtue signaling to unbearable decibel levels. Fintechs

have been telling us (inaccurately, in many cases) about how much they’re concerned about consumers’ financial health. Incumbents have paid lip service to it, but with a new administration occupying the White House, demonstrating their social con-

analyze and measure changes in customer financial health.”

#4 FINTECH-AS-A-SERVICE PLATFORMS EMERGE

There’s a supply and demand imbalance in the market today. Lots of fintechs want to partner with banks— but few banks are equipped to partner with the fintechs.

Enter fintech-as-a-service platforms.

Fintech-as-a-service isn’t a new term, but when it’s used, it’s usually by a fintech talking about how they can use an API to integrate their service into incumbents or other fintechs.

But that’s not a fintech-as-a-service platform.

Banking-as-a-service has become a popular term (and service) and refers to enabling a company—usually a platform—to

A lot of bank and credit union CEOs think the biggest barrier to innovation is their core system. Hardly any, however, are planning to replace their core—too painful, slow, and expensive.

Finding core systems workarounds isn’t new. According to Cornerstone Advisors partner Quintin Sykes: “There are banks and credit unions comfortable with integration with bestof-breed solutions that pursue this strategy. I call it ‘turning the core into a glorified adding machine.’ It’s a viable approach for institutions good at—and comfortable with— integration and managing a lot of vendors.”

What about those that aren’t? While a number of fintechs have emerged over the past few years to help financial institutions execute on this strategy, expect 2021 to see strong demand for three types of fintech providers in particular: • Core integration providers.

“Companies like Moov, Unit, and Synctera will enable banks to provide a range of services —e.g., ACH processing, transaction processing— to fintechs in a more modular way.”

Companies like Constellation, Sherpa Technologies, and Sandbox Banking have been offering core integration platforms for the past few years enabling banks and credit unions to better integrate with—but potentially migrate away from—their core systems.

science and contribution—to more than just low-income consumers—will be a top priority for incumbents.

Payrailz and Finzly not only enable financial institutions to intelligently route payments to the optimal payment mechanism but allow them to offload transactions from core processing.

• Financial health scores are emerging. The topic of financial health

is often dominated by discussions of financial literacy—which is virtually useless (not enough room here to explain why).

Quantifying financial health has been a challenge because self-reported measures are unreliable. But some companies—like Financial Health Network and MX—have developed robust financial health scores that rely on actual account data.

• Financial health will be regulated. Look for the new administration

to require banks to monitor and improve their customers’ level of financial health.

What could this look like? Todd Baker and Corey Stone recently proposed some ideas. The first of their three-stage proposal would require providers to “make available to regulators data that regulators can use to 14

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SPRING 2021

embed banking services into their offerings.

But what about the hundreds of midsized banks and credit unions who want to partner with fintechs?

The path is difficult—resources to develop partnerships are limited, integrating into the core is a massive job, and developing other approaches from scrap is time-consuming.

Companies like Moov, Unit, and Synctera will enable banks to provide a range of services—e.g., ACH processing, transaction processing—to fintechs in a more modular way.

The result: Banks will find it easier and—more importantly—faster to partner with fintechs.

#5 BANKS STEP UP FINTECH-POWERED CORE WORKAROUNDS

And speaking of the hassles of core integration...

• Payment hubs. Fintechs like

• Digital cores. Companies like

Finxact, Q2, and NYMBUS have been helping financial institutions deploy digital banks. For some of these institutions, these are weak attempts to recreate the success of some of the challenger banks.

The smart ones, however, recognize that the digital cores are good ways to create and deploy new products and services that would take years if they tried to do it with their existing core system.

Core workarounds may not be new, but in some respects, they are—like the first two trends—disruption of the value chain. In this case, banks’ and credit unions’ technology value chains.

Overall, however, this is going to be the banking and fintech story for 2021 and beyond: The disruption of the value chain.

THE ARKANSAS BANKER

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15

BANKER Q&A

THE

MILLENNIAL MINUTE with Duncan Bellingrath Community Banker Simmons Bank, Pine Bluff, AR

WHY ARE YOU INVOLVED IN THE EMERGING LEADERS SECTION? I first attended the Emerging Leaders Conference three years ago and had a great experience. The Emerging Leaders Section is a great resource for young bankers to network and learn more about the different areas in the banking industry. I have been able to connect with other banking professionals and have developed great friendships through Emerging Leaders. I would encourage all young bankers to join.

HOW DO YOU CONTINUE TO DEVELOP AS A BANKER AND LEADER? My Simmons Bank family and customers deserve the credit for my continued development as a banker. I believe the ability to work as a team has been the primary driver of my development as a banker.

There is always room for improvement and asking the people you report to and work with to help identify your strengths and weaknesses ensures strong development as a banker, as a potential future leader, and as a person.

WHAT CIVIC PROJECT HAS YOUR BANK PARTICIPATED IN THAT TOUCHED YOU THE MOST? I am proud to work for such a philanthropic institution like Simmons Bank. Simmons Bank is involved in its communities and donates to countless philanthropic efforts and organizations.

Recently Simmons Bank associates raised more than $13,000 to support the fight against Alzhimer’s disease. As a result of this, Simmons Bank pledged an additional $25,000 to the cause.

Having lost my grandfather to this disease, this particular project hit home for me.

IF YOU COULD INVITE ANYONE OVER FOR DINNER, WHO WOULD YOU INVITE? WHAT WOULD YOU COOK? I would grill a steak with my dad. My dad and I have always had a close relationship but have grown closer since I began my career at Simmons Bank. My dad serves as a role model, a great business mentor, and friend.

“There is always room for improvement and asking the people you report to and work with to help identify your strengths and weaknesses ensures strong development as a banker, as a potential future leader, and as a person.”

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INDUSTRY

ARKANSAS BANKS’

ECONOMIC IMPACT

U P DAT E S

Banks support Arkansas’s economy with consumer, business and other loans, and by providing more than 23,000 people with a rewarding place to work.

23,378

EMPLOYEES

JOBS

$2 BILLION

TOTAL ANNUAL COMPENSATION & BENEFITS

$6.7 B

NEW HOME LOANS BOOKED IN 2018

42,094

87

BANKS HEADQUARTERED IN STATE

$85,149

AVERAGE TOTAL COMPENSATION & BENEFITS

4.5 M

NUMBER OF NEW HOME LOANS IN 2018

TOTAL CUSTOMERS

LENDING

CUSTOMERS

$3.1 B

MEDIAN NEW HOME LOAN SIZE IN 2018

CONSUMER

$1.6 B

SMALL FARM LOANS OUTSTANDING

117

DEPOSITS

3.8 M

SMALL BUSINESS LOANS OUTSTANDING

$125,000

$71 B

BANKS

48 K

494.1 K SMALL BUSINESS

SMALL FARM

GIVING BACK

BANKS OPERATING BRANCHES

139.7 K

VOLUNTEER HOURS

$28.2 M

1,332

COMMUNITY DONATIONS

BRANCHES & OFFICES Source: Estimates based on ABA 2019/2020 survey data

THE ARKANSAS BANKER

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INDUSTRY U P DAT E S

Economics Arkansas, First Security Bank

Partner On Financial Courses For Students

by Kathleen Lawson Economics Arkansas executive director

F

irst Security Bank is serving as a lead program sponsor in two programs offered by Economics Arkansas this year. The first is the Arkansas Personal Fi-

nance Challenge for high school students on April 14. This event is hosted in partnership with the Federal Reserve Bank of St. Louis – Little Rock branch.

No advance qualification or test is required. On the day of the challenge, the student teams will be given a case study about a US family’s fictitious financial situation to develop recommendations to address financial topics such as decreasing debts, reaching a savings goal, minimizing taxes or other related subjects. They will have 90 minutes to draft a six-minute PowerPoint presentation, which they will present in up to three rounds to a panel of judges. Teams will be scored in content knowledge, teamwork and communication skills/overall effect. Winning teams receive a cash prize and advance to the National Personal Finance Challenge to be held in May. “It is vitally important that today’s business owners invest in the personal finance education of tomorrow’s workforce,” said Reynie Rutledge, President and CEO of First Security. “As a banker, I am so pleased to make this commitment to Economics Arkansas to host the 2021 Arkansas Personal Finance Challenge for the state’s high school students.

Learning early in life how to budget money and how to set financial goals helps every Arkansan build better futures for themselves and their families.”

In addition to serving as the presenting sponsor for the Arkansas Personal Finance Challenge, First Security Bank is also supporting the statewide REAL Econ for All Conference. This two-day Relevant, Engaging, Activity-based Learning Econ for ALL Conference takes place in the summer and offers more than 80 concurrent, outstanding sessions for PreK-12 educators. Premier experts from academia, business and industry lead a wide variety of

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economic and personal finance sessions. Upon successful completion, participants earn up to 12 hours of staff development and receive grade-level curriculum choices, standards-based instruction and networking opportunities. While the conference typically takes place in Little Rock, the summer of 2020 had record-breaking attendance in its virtual setting.

Plans are underway now for 2021, which may be a hybrid of in-person and virtual training sessions.

“Bankers have been some of our best supporters since our inception 59 years ago,” said Kathleen Lawson, Executive Director of Economics Arkansas. “First Security Bank is a true partner and a great champion for financial literacy. We are so grateful for their support of these two signature programs.”

PHOTO: (left to right) Andrea Lewis, Kathleen Lawson, and Maria Weyrens.

Photo courtesy of First Security Bank.

“Learning early in life how to budget money and how to set financial goals helps every Arkansan build better futures for themselves and their families.”

Economics Arkansas (through the Arkansas Council on Economic Education) is a private, non-profit, non-partisan, educational organization founded in 1962 by Dr. Arch Ford and led by Dr. Bessie B. Moore to promote economic literacy in Arkansas. Its mission is to equip PreK-12 schools with standards-based resources and professional development to teach economics, personal finance and the free-enterprise system using practical, innovative and inspiring methods so that Arkansas students may master an understanding of economics and personal finance and apply that knowledge for success in the free-enterprise system. It is affiliated with the Council on Economic Education.

THE ARKANSAS BANKER

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GUEST

C O M M E N TA R Y

My Perspective on Bank Regulation and Supervision Michelle W. Bowman

|

Governor

|

Federal Reserve System

The following partial remarks were delivered by Michelle Bowman, a member of the board of governors of the Federal Reserve System. Bowman was speaking to a conference for community bankers sponsored by the American Bankers Association in mid-February 2021.

G

ood morning. I want to thank the American Bankers Association for inviting me to speak to you today.

Two years ago, I gave my first speech as a Federal Reserve governor at this conference in San Diego, and it is always great to be with you—even if remotely from our recording studio at the Board.

It’s fair to say that a lot has happened over the past two years. It is an understatement to say that the COVID-19 pandemic has created significant challenges inside and outside the banking sector. Bankers significantly adapted operations to continue serving their communities and customers.

You overcame staffing challenges and other hurdles, kept the virtual doors open, worked with your customers, and provided assistance to workers and businesses through the Paycheck Protection Program. Those efforts have made, and continue to make, a huge difference in the lives of many people affected by the pandemic, and I thank you.

Since becoming a member of the Federal Reserve Board, I have made it a priority to enhance the Federal Reserve’s dialogue with community bankers.

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*** Today, I would like to share my approach to supervision and regulation, which has helped guide the Fed’s efforts to improve oversight of community banks over the past few years and shaped our priorities for 2021 and beyond. In most cases, my points about banking regulation also apply to supervision. I will then focus on several Federal Reserve initiatives that are underway to support community banks during the pandemic and into the future.

The first principle is fundamental to regulation but sometimes bears repeating—regulation should always strike the right balance. For banking regulation, that means a balance between actions that promote safety and soundness and actions that promote an acceptable and manageable level of risk-taking. The challenge is doing neither too little to be effective to achieve the public benefit of government oversight, nor too much to prevent the regulated businesses from meeting their customers’ needs.

Some regulation is appropriate and necessary but striking the right balance means that at some point regulation can

go too far and end up reducing the public’s welfare. In recent years, the Federal Reserve and other agencies have made oversight more effective by better differentiating prudential regulation and supervision based on the asset size of banks, the complexity of their activities, and the related risks they pose to the financial system.

This is especially important for community banks, most of which managed risks well before and during the 2008 financial crisis and have managed their risks well since. Achieving these principles also requires following consumer protection laws and regulations, including fair lending laws, to ensure fairness and broad access to credit and financial services that enable economic opportunity for individuals and communities.

The second principle is that the regulatory framework should be effective, but also efficient, and that means assessing the impact of the requirements. For the Federal Reserve, it means that we consider both a rule’s benefit to safety and soundness and any potential negative effect, including limiting the availability of credit and services to the public, and the implications of compliance costs on banks.

The wisdom in this approach is evident when considering the effect of a regulation on community banks and their role in providing financial services to their communities. Community banks

have often been one of the few or only sources of credit and financial services to their customers. Their smaller operational scale relies on fewer staff to reach a more disbursed customer base with limited resources for compliance activities. Regulations should consider the potential impact on the availability of services in a community, as well as the costs to the bank of implementing a rule, particularly in more rural locations. It is necessary that a full and careful practical analysis of costs and benefits be a part of every rulemaking.

The third principle is that regulation and supervision should be consistent, transparent, and fair. Regulators are obligated by law to act in this manner, and it also makes good practical sense. These principles enhance safety and soundness and consumer compliance by making sure supervisory expectations are clear and that banks understand and respect the regulatory requirements. Supervisors should not and cannot be everywhere at every moment. But they should be available to provide clarification or answer questions when needed.

A clear understanding of the rules and our expectations and a respect for the reasonable application of them is an effective approach to ensure effective compliance.

By promoting respect and trust between regulators and the supervised institution, banks are more likely to communicate throughout the examination cycle to inform supervisors of changes they may be considering or challenges they may be facing and how best to resolve or approach them from a regulatory perspective.

A final principle that flows from consistency, transparency, and fairness is that rules and supervisory judgments must have a legitimate prudential purpose, and in the majority of cases must not be solely punitive. The goal should be to encourage sound business practices and activities by supervised institutions. By clearly communicating our objectives, we build respect for the rules and make it more likely that any remedial actions against an institution will not be necessary because we encourage compliance through our supervisory approach. When a supervisory action or formal enforcement action is required to address violations at an institution, those actions should be framed in a way that

seeks to promote safe, sound, and fair practices and not simply as punishment. *** Many of the most important improvements to the Federal Reserve’s regulatory framework involve tailoring rules to fitto-the-size, business model, and risk profiles of community banks. For example, we raised the asset threshold for small banks to qualify for an 18-month exam cycle and similarly raised the threshold for small bank holding companies to be exempted from consolidated risk-based capital rules.

The concept of tailoring is also expressed in our community bank supervisory framework, which has been updated to implement the Bank Exams Tailored to Risk (BETR) program. The BETR program allows examiners to identify higher and lower risk activities and, in turn, streamline the examination process for lower risk community banks, thereby reducing burden. In fact, Federal Reserve examiners have tailored examinations by spending approximately 65 percent less time on low/moderate risk state member bank exams than they do on high-risk exams.

We also implemented the community bank leverage ratio that allows institutions to opt out of risk-based capital requirements. The Federal Reserve and the other agencies also raised the threshold for when an appraisal is required for residential real estate loans and tailored safety-and-soundness examinations of community and regional state member banks to reflect the levels of risk present and minimize regulatory burden for banks. *** I’d like to expand on one important area of focus, which is essential to the future success of the community banking sector: accessible innovation and technology integration. This subject is one that I speak about frequently with stakeholders and our staff at the Board. We are committed to developing a range of tools that will create pathways for banks to develop and pursue potential partnerships with fintech companies. This includes clearer guidance on third-party risk management, a guide on sound due diligence practices, and a paper on fintech-community bank partnerships and related considerations. These tools will

serve as a resource for banks looking to innovate through fintech partnerships.

Technological developments and financial market evolution are quickly escalating competition in the banking industry, and our approach to analyzing the competitive effects of mergers and acquisitions needs to keep pace. The Board’s framework for banking antitrust analysis hasn’t changed substantially over the past couple of decades. I believe we should consider revisions to that framework that would better reflect the competition that smaller banks face in an industry quickly being transformed by technology and non-bank financial companies. As part of this effort, we have engaged in conversations and received feedback from community banks about the Board’s competitive analysis framework and its impact on their business strategies and long-term growth plans. We are in the process of reviewing our approach, and we are specifically considering the unique market dynamics faced by small community banks in rural and underserved areas.

Soon after the pandemic began early last year, the Federal Reserve took several actions to support community banks and their ability to help affected customers. We paused examinations and issued supervisory guidance that made it clear that we would not criticize or take public enforcement actions against a bank that was taking prudent steps to help customers and making good faith efforts to comply with regulations. This certainty of regulatory treatment created an environment that built trust between regulators and bankers. It enabled banks to continue to meet the needs of their customers who were struggling with circumstances through no fault of their own.

Let me conclude by again commending the important role that community banks have played in providing financial services during these challenging times.

Editor’s note: Michelle W. Bowman, former state bank commissioner of Kansas, took office as a member of the Board of Governors of the Federal Reserve System in November 2018, to fill an unexpired term ending January 31, 2020. She was reappointed to the Board in January 2020 for a term ending January 31, 2034.

THE ARKANSAS BANKER

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21

FORMER BANKER

Sen. Jimmy Hickey, Jr. Leading State Senate

22

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SPRING 2021

F

rom a Texarkana bank’s mail room to leading the Arkansas State Senate, President Pro Tempore Jimmy Hickey, Jr. has climbed his way up the proverbial ladder to a pinnacle of political and business success.

Hickey, a Republican from Texarkana, was first elected to the State Senate in 2012. This year, he’s the upper chamber’s leader. Curiously, he never had an itch for politics and used to joke with his family about his disinterest.

His father, Jimmy Hickey, Sr., was on the Miller County Quorum Court. One election cycle, Hickey, Jr. told him he ought to put “Sr.” on his yard signs “because I didn’t want anyone thinking I was running for anything.”

Eventually, Hickey did serve on the Texarkana School Board during a portion of his only son’s school years. “I thought it was kind of my duty to step forward on that,” he said.

Hickey, 54, devoted his professional career to banking. From his humble high school start in the mail room at Commercial National Bank in Texarkana, he stayed with the bank after graduating from college at East Texas State University, where he received a Bachelor of Business Administration. He was moved to collections, promoted to small consumer loans, and retired as senior vice president in 2010.

He planned to develop residential housing and manage rental properties in retirement, but in 2012 while deer hunting, Hickey said he felt a calling to enter legislative politics.

“I was up in my deer stand and it was just laid on me that I was supposed to run for the Arkansas State Senate,” he said. Hickey struggled with the decision for over a week and didn’t even tell his wife, Denise, that he was considering it.

He was so far removed from politics that when he finally gave into the urge, he had to put the state capitol into his GPS in order to come to Little Rock and discuss running with Republican party officials.

“I literally had never been to the capitol before I decided to run,” Hickey said.

He won that 2012 race and won re-election to his third four-year term this past November. His Senate peers elected him to lead them as Senate President Pro Tempore in the 93rd General Assembly, which kicked off in January 2021.

The discipline of banking has served Hickey well in all aspects of his life, especially politics. He says 75% of legislating has to do with banking issues like cars, mortgages, real estate, title business, securities,

PHOTOS: (Opposite page) Sen. Jimmy Hickey, Jr. being sworn in during the 93rd Arkansas General Assembly.

(This Page) Hickey asking a question during the Legislative Joint Auditing Committee on State Agenices in January 2020.

Photos courtesy of Arkansas State Senate

budgetary items, taxes, cash flow, and contracts. He’s a stickler for the details.

“Bankers like to joke that you better read the fine print. Well, I read the fine print. That came from being in banking,” Hickey said.

He also considers his time in “relationship banking” as important to helping him navigate tricky political situations.

“Banking gave me a good feel for things. Sometimes, I get a gut feeling if something might work or if there’s a red flag,” he said. “I was able to deal with people from blue collar laborers to the CEO of a corporation in banking. I’ve dealt with them from all walks of life. It’s helped me communicate with those people, understand those type of people whatever level they may be at.”

Hickey’s Senate District 11 covers a large swath of southwest Arkansas including Lafayette, Little River, and Miller counties and parts of Hempstead and Sevier counties. He serves on the Senate Revenue & Tax committee, Senate Insurance & Commerce committee, Joint Performance Review, and Joint Retirement and Social Security committees. Hickey is also a member of the Joint Budget committee, Arkansas Legislative Council and Legislative Joint Auditing committee.

The discipline of banking has served Hickey well in all aspects of his life, especially politics. He says 75% of legislating has to do with banking issues like cars, mortgages, real estate, title business, securities, budgetary items, taxes, cash flow and contracts.

He’s a stickler for the details.

THE ARKANSAS BANKER

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23

BANKER Q&A

FIVE VE minutes with...

Nathan Gairhan

President & CEO United Bank, Springdale, AR

Q. WHAT IS THE BEST PART OF BEING A HOMETOWN BANKER?

A.

Being a hometown banker is very rewarding. We care about the people we serve because they are our neighbors and friends. My desire is to provide customers with the best financial solutions to help them achieve their dreams, enrich their lives, and to experience peace of mind. It could be a young couple purchasing their first home or when we help a new business start up or expand in our community.

Hometown banking truly embodies the essence of “relationship banking”. Customers are always treated with respect, and the focus is always on their individual needs. Decisions are local, human, and timely! United Bank is vested in the local community and we give back and invest in the communities we serve in Northwest Arkansas. We take great pride in supporting our hometowns whether that is the local schools, community events or non-profit entities.

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SPRING 2021

Q. WHAT CIVIC PROJECT

Q. HOW HAS YOUR LIFE

A.

A.

HAS YOUR BANK PARTICIPATED IN THAT TOUCHED YOU THE MOST?

United Bank celebrated our 40th anniversary in 2018 and we came up with a special way to celebrate with our team. Each employee was given $40 in cash and teams were formed to determine how best to distribute the funds. Forty dollars is not a great amount of money but our team experienced personally how a small contribution can really impact a person in need. My team chose the Samaritan Community Center in Springdale and gave our funds to shoppers to help pay for their merchandise. An elderly woman struggling to find a book that she could afford broke down in tears when the donation bought her several books. The team’s experience was great exposure to the community and helped everyone see that there are a lot of things that we take for granted living in Northwest Arkansas. It was very humbling that our team impacted a lot of people of need in our community.

EXPERIENCE MADE YOU THE LEADER YOU ARE TODAY?

Banking has been in my blood as my father worked in banking in Jonesboro for 43 years. I learned from him the traits of doing the right thing and valuable life lessons from his incredible work ethic. I have been blessed to be a community banker for 35 years, and I strive each day to lead with integrity. I have learned throughout the years from others that great leaders make the hard choice and self-sacrifice in order to enhance the lives of others around them.

I was fortunate upon completion of graduate school at Arkansas State University to be mentored by Frank Oldham, who was my undergraduate advisor before he himself became a banker. I had an interest in banking and he encouraged me to become a bank regulator with the Arkansas State Bank Department. It was a great learning experience and provided life-long contacts and friends who I still contact today for their sage advice.

I have been blessed to be a “ community banker for 35 years,

and I strive each day to lead with integrity. I have learned throughout the years from others that great leaders make the hard choice and self-sacrifice in order to enhance the lives of others around them.

”

Q. YOU HAVE SERVED

ON THE ABA BOARD OF DIRECTORS A COUPLE OF DIFFERENT TERMS. WHY DO YOU FEEL SERVICE TO THIS ORGANIZATION IS IMPORTANT?

A.

I am honored to serve on the board as the association has a long, successful history of representing Arkansas bankers through education, leadership training, and advocacy at the state and federal level.

Our association is an important voice for community bankers, especially as our member banks deal today with Covid-19, PPP

loan programs, technology advancements, and cyber security risks. For 130 years, our association has been a stable, well managed, and financially sound organization that is poised to continue to serve as a source of strength for Arkansas banks.

Q. WHAT DO YOU LIKE TO DO AFTER WORK?

A.

I plant a garden every year with about 50 plants and enjoy providing fresh vegetables to my bank team and neighbors. I also love to play golf and trout fishing on the Norfork and Beaver Tailwaters as often as I can.

“Hometown banking truly embodies the essence of “relationship banking”. Customers are always treated with respect, and the focus is always on their individual needs.”

THE ARKANSAS BANKER

•

25

ONE YEAR

IN

26

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SPRING 2021

THE BANKER’S GUIDE TO THE POST-COVID GALAXY ECONOMISTS, ANALYSTS PREDICT 2021’S EMERGENCE FROM THE PANDEMIC.

THE ARKANSAS BANKER

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27

IT WAS ONE YEAR AGO IN MARCH THAT ARKANSAS IDENTIFIED ITS FIRST CASE OF COVID-19. A PINE BLUFF HOSPITAL PATIENT ON MARCH 11, 2020 WAS DECLARED THE FIRST “PRESUMPTIVE” CASE IN THE STATE. IT QUICKLY LED TO A PUBLIC HEALTH EMERGENCY DECLARATION BY GOV. ASA HUTCHINSON, WHO SHUT DOWN SCHOOLS, RESTRICTED TRAVEL, AND ASKED MANY BUSINESSES TO OPERATE REMOTELY IF POSSIBLE.

W

ithin a week, banks across Arkansas were closing or limiting facilities for walk-in traffic while keeping services available. Customers were asked to use drive-thru and ATM’s as a precaution against the spread of COVID-19.

Banks became central figures in the survival of many individuals and businesses during the pandemic. They began work to pause loans and mortgages, and in short order, became the navigators for people to figure out what assistance might be forthcoming.

Within months, financial institutions were the clearinghouse for Congress’ Paycheck Protection Program (PPP) loans, and they helped with other options, such as Economic Injury Disaster Loans (EIDL).

FAST FORWARDING TO THE PRESENT One year later, Arkansas’ banks are still thriving. Despite the requirement to boost loan loss reserves, financial institutions are in a healthy profit situation.

According to the latest data from the Federal Deposit Insurance Corp.

(FDIC), Arkansas’ 86 federally insured lenders reported a cumulative net income of $999 million in the third quarter of 2020, down 18% from a year ago. However, state banks grew their combined assets to $131.14 billion, up 17% year-over-year.

Deposits rose to $105.82 billion.

But there’s a lot of economic change to sift through for how the clients and customers of those banks survived the year of the coronavirus. For many in the hospitality and retail sectors, it was perhaps the most difficult financial year of their lives. For some in manufacturing and essential business services, the year was described as a boon.

Two large stimulus packages of a combined $3.1 trillion filtered through the 28

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SPRING 2021

economy. $2.2 trillion was passed in May 2020 as part of the Coronavirus Aid, Relief and Economic Security Act, or CARES Act. The remaining $900 billion cleared Congress in December 2020 as part of a second pandemic relief package. It put money directly in the hands of consumers through onetime checks and a boost in unemployment benefits.

Businesses were provided options through PPP and EIDL as well as through targeted tax breaks. Local governments, schools and safety net programs spent billions to keep relief at hand.

For many, it still wasn’t enough. Unemployment spiked to over 10% in Arkansas before falling back to under 5% by year-end. Arkansas was in the midst of some of the lowest jobless rates in state history heading into 2020 at well under 4%. Nationally, 22 million jobs fell out of the American labor force during the peak of the pandemic. By the end of December about 12 million jobs were restored, still leaving an estimated 10 million workers without jobs.

U.S. gross domestic product plummeted in the second quarter when the pandemic and ensuing social distancing measures were in full effect. GDP contracted nearly 32% on an annualized basis. Many businesses closed, while others clung by a thread limping to the end of the year.

Despite the massive federal debt racked up by the stimulus, it did have a positive impact on staunching the bleeding. Consumer spending kept the Amer-

TWO LARGE STIMULUS PACKAGES OF A COMBINED

$3.1 TRILLION FILTERED THROUGH

THE ECONOMY

$2.2 TRILLION NATIONALLY, 22 MILLION JOBS FELL OUT OF THE AMERICAN LABOR FORCE DURING THE PEAK OF THE PANDEMIC. BY THE END OF DECEMBER ABOUT 12 MILLION JOBS WERE RESTORED, STILL LEAVING AN ESTIMATED 10 MILLION WORKERS WITHOUT JOBS.

WAS PASSED IN MAY 2020 AS

PART OF THE CORONAVIRUS AID, RELIEF AND ECONOMIC

SECURITY ACT, OR CARES

ACT. THE REMAINING

$900 BILLION CLEARED CONGRESS IN DECEMBER 2020

ican and Arkansas economy afloat. State sales tax collections, a sign of consumer spending, were down 2.5% for the fiscal year ending June 30, 2020 despite the worst month, April, when tax revenue was down 28%. In the last six months of 2020, sales taxes across the state rose more than 10% over the previous year.

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TYLER MONDRES

MATT OLNEY

MONDRES NOTED THERE ARE FEWER INQUIRIES RIGHT NOW FOR CANDIDATES WITH EXTENSIVE EDUCATION. HE WORRIES THAT IF THAT TREND CONTINUES, IT COULD BE PROBLEMATIC FOR AN OVERALL JOBS RECOVERY.

“I THINK YOU’RE GOING TO SEE A NUMBER OF ACQUISITIONS – MERGERS OF EQUALS. I THINK THAT WILL REBOUND VERY STRONG IN 2021, AND THAT MAKES IT EXCITING FROM AN INVESTOR STANDPOINT.”

WHAT’S TO COME

“Economists expect that the labor market will heal more slowly than the overall economy due to some labor market scarring that we’ve experienced,” Mondres said. “While the committee members forecast nearly 5 million additional jobs this year, our return to full employment remains about two or three years away, according to their projections. The committee expects the U.S. unemployment rate to decline to about 5.4% by the end of this year.”

Mondres said the discrepancies in whose jobs were impacted during the pandemic also play a role in how quickly certain jobs return versus don’t return at all.

“While the economy as a whole is recovering, many have noted that the true shape of their recovery has been somewhat K shaped.

While homeowners, college grads, prime borrowers, have done pretty well, and have had the flexibility to work from home, for example, throughout this pandemic, renters, non-college grads and workers in face-to-face service sectors have fared much worse,” he said.

Mondres noted there are fewer inquiries right now, however, for candidates with extensive education. He worries that if that trend

While analysts are watching a number of economic indicators, the biggest variable is getting the coronavirus under control. Numbers have been coming down since the first of the year. Promising vaccines and an improving distribution of them are making a difference. Health experts warn that we’re not out of the woods yet, but progress is being made.

Tyler Mondres, senior manager of the policy and economic research team at the American Bankers Association, gave a late January presentation to Arkansas bankers and chamber of commerce leaders. He said vaccines are key to stronger employment.

“The promise of the vaccine rollout provides optimism that these losses will be temporary and we’ll go back to job growth in 2021,” he said.

He referenced the American Banking Association’s Economic Advisory Committee, a group of 20 banking economists who analyze national and global trends.

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continues, it could be problematic for an overall jobs recovery.

“This is something that’s going to be important to track as the labor market recovers because high-wage spending helps support lower-wage, or non-salary jobs, in the services sector, restaurants, hair salons, personal trainers at gyms. So any layoffs and wage cuts for higher-wage earners would exacerbate the impacts that we see for lower-wage households.”

Matt Olney, CFA, research analyst for financial institutions at Stephens Inc., said there is a lot to digest. He is particularly impressed with how strong the banking industry, which primarily oversaw PPP loan distribution, performed in 2020 despite the difficult conditions.

“The balance sheets, which is what we focus on when it comes to the strength of the banks, the balance sheets are tremendous,” he said. “Capital is strong, the allowance of the loan loss reserves going into 2020 was just okay, but they were built up very strong throughout the last year. I’d say at this point, we have very strong reserves… I think that the local banks here in Arkansas, and even in the region, are all very strong.”

While banks look relatively good on paper, they face daunting challenges headed into 2021, particularly for growth. Olney said various factors would influence this year’s performance.

“I think the expectations of additional stimulus, additional support from the government, I think that’s one thing that we’re looking for that the new administration continues to support the economy and the parts of the economy that need it the most. I believe there are expectations set for additional inflationary pressure with that stimulus. And with that, we’ve seen some yield curve steepening over the last few weeks. With the yield curve steepening, I think that is a positive for the banking industry,” Olney said.

Low interest rates will put pressure on banks to generate interest income.

President Joe Biden’s agency directors in the financial sector will also influence financial institutions’ regulatory obstacles, he said.

Olney also thinks 2021 could lead to a round of mergers and acquisitions (M&A) in the banking industry.

“I think one of the more exciting things that we think we’ll see in 2021 is M&A,” Olney said. “We took a slight pause in 2020 just to make sure the banks’ balance sheets were in good shape, but now that we’ve confirmed bank balance sheets are indeed strong, I think you’re going to see a number of acquisitions – mergers of equals. I think that will rebound very strong in 2021, and that makes it exciting from an investor standpoint.”

Don’t look for this activity in early 2021, Olney says, but expect some M&A activity in the industry in the back half of the year.

“I think there are some interesting bank combinations that we could see as a result, and I think six months from now, we’ll be talking even more about this,” he said.

Lastly, Mondres said the ABA’s Economic Advisory Committee had pretty diverse views of when to expect a robust recovery. He said the committee expects the U.S. economy to grow at a robust pace over the four quarters of 2021.

“But, there was a divergence in views among members on the speed and timing of our recovery. This actually manifested in an unusually wide distribution of real GDP forecasts for both 2021 and 2022. So for this year, for example, the projections ranged from about 2.7% GDP growth all the way up to 6.3% with the median centered at about nearly 4%,” he said.

He also said the committee anticipates the Fed won’t change its target range for the federal funds rate in the foreseeable future, leaving it near 0%.

“As a result, they forecast little change for short-term interest rates this year, and projected that rates on longer-term U.S. treasury securities and mortgage rates will rise only modestly,” he said.

And, as usual, all of these prognostications come back to the beginning of the story: COVID-19.

Can we vaccinate enough people to get to herd immunity?

“Any slowdown of the vaccine rollout can materially impact the timing of our recovery. This is especially true as the virus continues to mutate,” Mondres said.

Key Takeaways

from the American Banking Association’s Economic Advisory Committee, a panel of 20 banking economists who analyze national and global trends.

GDP • THE U.S ECONOMY WILL GROW AT A ROBUST PACE of about 4% over the four quarters of 2021, the strongest growth in nearly two decades after the deepest recession since the Great Depression.

• AFTER A SLOW START TO THE YEAR, GROWTH WILL ACCELERATE into the second quarter and beyond, according to the group.

JOBS

• COMMITTEE MEMBERS FORECAST CLOSE TO 5 MILLION ADDITIONAL JOBS this year, but a return to full employment remains two or three years away.

• THE COMMITTEE EXPECTS THE UNEMPLOYMENT RATE TO DECLINE from 6.7% (Dec. 2020) to 5.4% by the end of 2021.

• MANY JOBS WILL REMAIN LOST TO BUSINESS SHUTDOWNS AND FAILURES, and that many surviving firms have learned to be more efficient and operate with fewer workers.

F E D AC T I O N

• THE COMMITTEE FORECASTS PRICE GAINS to pick up this year as the economy recovers, but barely meet the Federal Reserve’s inflation goal of somewhat above 2%.

• THE COMMITTEE ANTICIPATES THE FEDERAL RESERVE WILL NOT CHANGE THE TARGET RANGE for the federal funds rate in the foreseeable future.

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Such concerted digital technology awareness from major central banks only dates back to June 2019, when Facebook published its first white paper on its “Libra”4 project that took monetary authorities by surprise. Though modified, a Libra stablecoin retains strong network medium of exchange capabilities given its 1.8 billion global Facebook users.5 Central banks have taken notice and are assessing the risks. They have also committed to be at the forefront of technological and monetary innovation to ensure efficient payments and safeguarding financial stability. Ultimately, central banks will have to decide if the new technology will be launched by the private sector, as was the case in China6, or by central banks via technological innovation in the form of digital “public money” (i.e. CBDCs).

The issuance of a CBDC is a sovereign decision, as it introduces a third “central bank money” or “public liability” into an economy; besides cash that is used by the public at large, and reserves that are exclusively used by banks. A “retail” CBDC will compete with cash and regulated private money

(bank deposits), and will be used by the public as a medium of exchange with legal tender properties in a sovereign jurisdiction. Any commitment to launch a CBDC will depend on country-specific circumstances, such as: the demand for cash in the economy; the development of its banking and payment systems; and, the desirability, or willingness, to increase access to central bank liabilities beyond just banks, to non-banks, or the public at large.

CBDCs, as an equivalent of cash, will become a new digital option to hold money. In the absence of a CBDC for transactional purposes, digital transactions almost always settle in the two-tier (bank) payment rails that deliver “finality” of payment and credible convertibility into cash.7 The usefulness of the regulated two-tier payment system rests on the necessity to minimize fraud, crime, and financial instability in the economy. CBDCs, on the other hand, have the potential to lower the cost of transactions, especially cross-border transactions, and reach unbanked populations, likely unleashing important global economic gains. Therefore, the pace of inno-

“THE ISSUANCE OF A CBDC IS A SOVEREIGN DECISION, AS IT INTRODUCES A THIRD “CENTRAL BANK MONEY” OR “PUBLIC LIABILITY” INTO AN ECONOMY...”

1 In the Federal Reserve System, the Boston Fed has partnered with the MIT to develop templates for a potential US CBDC, in case the Fed decides to launch one, or Congress legislates one should be launched.

2 Since late 2019, the BIS Innovation Hub project has formed, or is about to form, multidisciplinary teams located in Hong Kong, Singapore, Switzerland, Toronto, London, Frankfurt/Paris, Stockholm, and New York, with different jurisdictions’ central banks.

3 Stablecoins are private, non-bank, digital liabilities, 100% backed by high quality liquid assets, and convertible 1:1 into cash.

4 Libra first proposal was as a multi-currency “floating coin.” It was later modified into separate (reserve currencies) “stable coins.” A dollar stablecoin could be launched as soon as in 2021 (Financial Times), and it will be convertible 1:1 on demand. Libra is operating under a new name (Diem white paper introduction).

5 Tech giants have obtained very fast, large economies of scale when entering other sectors in the economy. By entering the financial sector, these companies could very rapidly concentrate systemic risk as non-regulated financial firms.

6 In China, Alipay and Tenpay benefited from light regulation from 2004-2017 to grow their digital liabilities exponentially. Authorities have just introduced heavy regulation, including future market share caps, ahead of its own CBDC launch. Alipay (54% market share) and Tenpay (39% share, combining WeChat Pay and QQWallet) dominate the largest global mobile payment market.

7 Even if a transaction is done electronically, the settlement has to go through banks and central bank balance sheets to finally clear and settle irrevocably. Prudential bank supervision and regulation, as well as deposit insurance, were put in place to maintain the public confidence that bank deposits will always be convertible to cash 1:1 on demand, up to a statutory limit. In the US, the Federal Depository Insurance Corporation guarantees up to $250,000 per account.

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vation is a contentious issue since it depends on the pace of “adaptability” of the existing legacy systems to compete in the digital space. In this context, a CBDC could be an innovation catalyst.

Nonetheless, digital progress is gradually being introduced into the payment system, as non-bank digital companies acquire bank charters, or partner with existing banks to provide digital payments. Simultaneously, in the US, the Fed is developing the FedNow Service with a target release date of 2023 or 2024. FedNow is a retail instant payment system that will allow for more aggressive digital competition in the marketplace, while updating the existing two-tier payment system for retail immediacy (24x7x365) in clearing and settlement. Updated “real-time payment” systems could be an intermediary stage before a CBDC, while unintended monetary and credit implications of launching a new type of public money is better researched and understood.

In the US, global demand for dollar notes and coins continues to increase, reaching $2 trillion in circulation at the end of 2020, of which half is held outside of the country. Moreover, the dollar remains the major global reserve currency. The dollar retains this status as a key mechanism to store value due to the US’ transparent, open, and deep financial markets, which makes it even more important to fully understand the “trade-offs” that digital technology can provide when designing a CBDC. To summarize, Chairman Powell stated, “it is more important to get it right, than get it first.” More generally, the BIS has highlighted the “public good” aspect of

central bank services, which include the provision of sound money and safe payments. In this context, CBDCs might turn out to be the most effective way to use new technology to attain such goals.

That is why, the BIS, in late 2020, published its first report stating central banks’ “common motivation” for exploring CBDCs, while remaining fully

committed to providing cash. The BIS and global central banks generally agree that, at a minimum, CBDCs should promote innovation and efficiency, without compromising monetary or financial stability, as well as offer future “interoperability” in cross-border transactions. Nonetheless, CBDCs have the potential to disturb the demand for cash, the demand for bank deposits, and the equilibrium of credit provisioning in the economy, leading to important trade-offs. Central banks will need to fully understand these trade-offs before deciding to launch a CDBC in their respective jurisdictions.

Designing Central Bank Digital Currency, I. Agur, A. Ari, G. Dell’Arriccia, IMF WP/19/252 In October 2020, the first “live” retail CBDC, the Sand Dollar, was launched in the Bahamas. Besides, only China has firmly committed to launch a CBDC as soon as in 2021, and the Chinese authorities are not part of the BIS Innovation Hub. Since 2020, Chinese authorities have been live-testing, in four mainland cities, Digital Currency/Electronic Payments (DC/EP), a retail “hybridCBDC,” which is a CBDC-managed through the banking system that deals with customer accounts, but is a central bank liability, instead of a bank liability.

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INDUSTRY U P DAT E S

U.S. Rep. Hill Quizzes Federal Reserve Chair On Coronavirus Response PHOTO: French Hill (far left) sits with the House Committee on Financial Services and addresses Jerome Powell, Federal Reserve Chair.

Photo courtesy of the Congressman’s office.

U

.S. Rep. French Hill, R-Little Rock, was re-elected to a fourth term to Congress in November 2020. The former

banker serves on a variety of important committees related to financial services and institutions.

Specifically, Hill is on the influential House Committee on Financial Services and sits on two of its subcommittees: the Investor Protection, Entrepreneurship & Capital Markets subcommittee and the National Security, International Development & Monetary Policy subcommittee. Hill serves on the Congressional Oversight Commission established by the CARES Act alongside Senator Pat Toomey, R-Pa., and Congresswoman Donna Shalala D-Fla. In the month of February, Hill’s duties involved quizzing Federal Reserve Bank chairman Jerome Powell. Below is an abbreviated and slightly edited overview of their Feb. 24th exchange.

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INDUSTRY U P DAT E S

REP. HILL: We thank you Chairman Powell for

the extraordinary actions of the Board of Governors during 2020 in monetary policy, in extraordinary facilities in using 13 3, and we also commend the Congress and the Executive branch in 2020 for their fiscal response, which gave us the resources we needed to fight the pandemic and get our economy to the point it is today to open… it’s time to look on the other side of this pandemic as we vaccinate America, as we get our businesses open, as we see state and local governments having far in excess of the tax revenues that they anticipated and people getting back to work.

Since last March, the Fed has purchased more than $1.8 trillion of U.S. Treasury securities and last week you reiterated as you did yesterday in the Senate that the Fed remains patiently accommodated in its monetary policy position. But this extraordinary amount of accommodation is now coupled with the decision that the Treasury has recently announced, Chair [ Janet] Yellen, that they’re planning on drawing down their cash account they ordered by almost a trillion dollars, which would inject that directly into the economy. Has Secretary Yellen discussed with you drawing down the Treasury account?

JEROME POWELL: As a matter of long practice, I don’t discuss my private conversations with elected representatives or with the Treasury secretary, but of course we’re well aware there’s an ongoing staff level dialogue between Treasury and the Fed and the New York Fed about the Treasury general account and what the plans are for that, so we’re well aware of it.

REP. HILL: If a trillion dollars was drawn out of

that account and injected, do you think that could cause short-term interest rates to go negative?

POWELL: It could put downward pressure on short

term rates. Of course, our principal concern is that the federal funds rate be within the range that the FOMC has ordered it to be and we have the tools to make sure that that’s the case. If that is the case, then it will be the case that will be within our range of where we need to be. That’s going to tend to work against the other, you know, short-term money market rates going too low.

REP. HILL: So, it’s a key, key point – that’s why I’m concerned about that impact and the market understanding it. For example, I assume the Board of Governors’ monetary policy reaction to that – if short term rates went negative – is you could raise the rates on the IOER [Interest Rate on Excess Reserves] range that you have. Would that be a tool that you could take into effect?

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POWELL: Yes, we haven’t made any decisions about

this at all, but of course that and also that the rate on the reverse repo facility are the two things that we can move, and those are our two administered rates.

So those would be the tools that we can use among others, frankly, but there’s other things that we can do.

REP. HILL: Chairman Himes raised a really inter-

esting question and Mr. Barr did as well about the indicators you look at when you’re evaluating this inflation move. We mentioned the raw commodity index, like other members have mentioned, that it’s up 18% year-over-year, gold is up 15% year-over-year, but the one I always watch and the one we saw come into play in the run up to the last financial crisis, is residential real estate. As you know 24% of the CPI is an imputed rent that the Bureau of Labor statistics uses. I’ve never bought it. I don’t know if you’ve ever bought it, but it’s up about 3% right now. If you look at the prices of existing homes, I think they’re up 12%. New home prices are up 8%. Is there one that you particularly focus on that imputed residential rents since it is about 25% of the CPI, and how do you look at that issue?

“Since last March, the Fed has purchased more than $1.8 trillion of U.S. Treasury securities and last week you [ Jerome Powell] reiterated ... that the Fed remains patiently accommodated in its monetary policy position. ” POWELL: We do follow a broad range of prices, you know, half our mandate is price stability so we have a lot of attention paid to many different things.

The most important thing really is inflation expectations. Are they anchored? And we have great tools for looking at them, including a new common index of inflation expectations.

You ask about real estate housing, residential real estate prices and the very high levels of increases at the high levels of increases we saw this year. There are a bunch of one-time factors. There was a suppression of demand at the beginning of the increase in demand as the industry reopened, brakes are low, people are working at home… but people won’t be working at home forever. All those things tend to push up demand. Our best estimate is that we will see these increases, but they will be at much lower levels.

CROSS COUNTY BANK Wynne Group 1

DEREK ECKELHOFF VICE PRESIDENT

FIRST SECURITY BANK Rogers Group 2

DUNCAN BELLINGRATH SECRETARY/TREASURER SIMMONS BANK Pine Bluff Group 3

ELS COUNCIL MEMBERS IAN BRYAN

REGGIE ENGLISH

SIMMONS BANK Russellville Group 2

MNB BANK Malvern Group 3

BROCK FERGUSON

AMBER MURPHY

CENTENNIAL BANK Jonesboro Group 1

FIRST FINANCIAL BANK El Dorado Group 3

BETH PRESLEY

CARRIE PRICE

ARVEST BANK Fort Smith Group 2

FIRST COMMUNITY BANK Batesville Group 1

ZAC PRICE

TY TEAGUE

FIRST FINANCIAL BANK Harrisburg Group 1

FIRST NATIONAL BANK Little Rock Group 1

CHRISTIE TURNER FIRST STATE BANK Fayetteville Group 2

S E C T I O N

BRANDON GENTRY PRESIDENT

EMERGING LEADER

ELS EXECUTIVE COMMITTEE

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INDUSTRY U P DAT E S

BY

T H E

N U MBERS

The original $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act of 2020 was passed by the 116th U.S. Congress and signed into law by President Donald Trump on March 27, 2020 in response to the economic fallout of the COVID-19 pandemic. Here’s a breakdown of how the money was allocated to be spent.

U NEM PLOY M E N T BE N E F ITS

O NE -TIM E C H E C KS

$268 BILLION

$293 BILLION

$600 PER WEEK

$1,200/ADULT & $500/CHILD

BOOSTED ALL UNEMPLOYMENT BENEFITS BY

PROVIDED TAX REBATES OF

SMAL L B U S I NE S S AS S I STANC E

$377 BILLION FOR SMALL BUSINESS LOANS AND GRANTS

LAR G E BUS IN E S S E S & G OVE R NME N T AS S ISTA N C E

$510 BILLION FOR AIRLINES, NATIONAL SECURITY & GOVERNMENT ENTITIES

E DUCATIO N S P E NDIN G

$40 BILLION FOR SCHOOL DISTRICTS, HIGHER EDUCATION AND STUDENT AID

I NC REASE HE ALT H-RE LAT E D S P E NDI NG

$153 BILLION 40

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FOR HOSPITALS AND PUBLIC HEALTH

TA X C U T S

$241 BILLION FOR PAYROLL TAX CUTS, BUSINESS INTEREST DEDUCTIBILITY & OPERATING LOSSES

SAFETY NET PROGRAMS

$42 BILLION FOR FOOD STAMPS, H OUSIN G, CHILD SERVICES

DISASTER SPENDING

$45 BILLION F O R F E M A D I S A S T E R A S S I S TA N C E

T R A N S P O R TAT I O N F U N D I N G

$71 BILLION FOR AIRLINES, AIRPORTS AND CARGO CARRIERS

*The second round of coronavirus relief spending has not been fully spent.

The most recent third round has just begun to be distributed.

Statistics: Committee for a Responsible Federal Budget

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NEWS & MOVES

FIRST COMMUNITY BANK

EXPANDS IN CONWAY

B

atesville-based First Community Bank has received regulatory approval and finalized the purchase of property at 766 Harkrider Street in Conway, Arkansas, the bank announced Thursday ( Jan. 28).

The property, located in the downtown district at the corner of Harkrider and Polk streets, is a highly visible corridor that will become a focal point once a new structure is erected.

“Our search for the perfect piece of property was a challenge to say the least, as our first couple of purchase attempts didn’t work out,” said Grant Gordy, community president for Conway. “We were determined to stay in the downtown district to help preserve this beautiful historical area. With each setback, a new opportunity presented itself, and we ended up finding, what we believe to be, the perfect location in the heart of our community.”

First Community Bank currently operates at 1089 Front Street. The bank offers traditional banking services as well as insurance, home mortgage, brokerage and trust services.

“After a year of steady growth in the Conway market, we want to further establish our roots in an area that has proved ready to embrace our spirit of community banking,” said Dale Cole, chairman and CEO of First Community Bank. “We are thrilled to make a significant investment in Conway and look forward to increasing our presence in this dynamic community.”

GRAND SAVINGS BANK

PLANS NEW FAYETTEVILLE, GENTRY LOCATIONS, HIRES FORT SMITH BUSINESS DEVELOPMENT LEADER

G

Gary Hamm

Business Development Officer

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rand Savings Bank has announced the opening of a new bank location at 1925 N. College Avenue in Fayetteville. The full-service branch location will offer a drive-thru and ATM. “As a community bank, we’re always looking for ways to invest in our communities,” said Guy Cable, President and CEO for Grand Savings Bank. “We were excited to renovate an old, historic building to bring additional value to the community around our new Fayetteville branch.”

Grand Savings Bank has also purchased a new property at 104 N. Gentry Blvd. in Gentry. The location will replace the existing bank branch located at 101 S. Gentry Blvd. The new six-acre location will provide more parking and wider drive-thru lanes for all of bank customers.

The Gentry Grand Savings Bank branch is the second oldest location in the bank’s network. It opened in May of 1980 as Decatur State Bank, which later

merged with Grand Savings Bank in December 2014.

The bank also recently hired Gary Hamm as its new business development officer in Fort Smith location.

Hamm has 20 years of experience in the food service and consumer packaged goods industries.

His professional areas of expertise include sales, management, marketing, acquisitions, and government relations.

“We’re proud to have Gary join the GSB family,” Cable said. “People bank with people, which is why we value team members like Gary who bring a customer-focused approach to work every day.”

Hamm, who lives in Bentonville, is a graduate of the Sam M. Walton College of Business Administration at the University of Arkansas where he received a Bachelor of Science in Administrative Management.

Grand Savings Bank has 12 locations and 11 ATMs in Northwest Arkansas, Northeast Oklahoma, and the River Valley.

SIMMONS BANK

APPOINTS SHELLY ARNOLD TO HEAD PRIVATE CLIENT DEPARTMENT

S

Shelly Arnold

Private Client Group

immons Bank has named Shelly Arnold to direct and lead its Private Client Group. The focus of the Private Client Group is the delivery of customized banking solutions to clients with complex financial needs.

In addition to overseeing the existing teams in Simmons’ Dallas-Fort Worth and Columbia, Missouri markets, Arnold will be responsible for building Private Client teams throughout the bank’s seven-state footprint, starting with central Arkansas in early 2021.

“We feel it is a very important priority for our clients to know we appreciate their business and that we are here to help and grow with them, whatever they might need. We want them to think of us first when they have life changes and need additional services,” said Freddie Black, chief business development officer for Simmons Bank.

“Shelly’s deep knowledge and strong track record for results are combined with exceptional leadership

skills and relational warmth,” said Sabrina McDonnell, business development group executive. “These qualities, backed by more than 30 years of experience, make Shelly an ideal fit to spearhead the refresh of this exciting, highly consultative area of our bank.”

Arnold joins Simmons Bank from Commerce Bank Trust Company in St. Louis, Missouri, where she served as senior vice president for Private Banking, overseeing a team of private bankers and numerous client relationships.

“As a company that combines its community banking heritage with scale, Simmons Bank has a more than 100-year history of bringing a highly personal touch to its clients and communities,” said Arnold. “The opportunity to join a relationship-oriented company that is equally focused on innovation and growth is incredibly exciting.”

Arnold will transition to Little Rock for her new role and will office out of the bank’s River Market building downtown.

PARTNERS BANK ADDS

MICHAEL BYNUM, DAWN JOHNSON; PROMOTES HALEY JACKSON

P

Haley Jackson

Consumer Lender

artners Bank, headquartered in historic downtown Helena, announced the opening of a new Loan Production Office (LPO) at the Village at Hendrix in Conway.

Michael Bynum, Executive Vice President and Central Arkansas Regional President, leads the team in this LPO. Bynum joined Partners Bank in January 2020 with over 25 years of banking experience in the central Arkansas market.

Dawn Johnson has recently been hired to serve as Vice President & Loan Officer. Johnson brings 15 years of retail and lending experience to the team.

She currently serves as the Chairman of the Pipe-

line Networking Group for Business Builders with the Conway Area Chamber of Commerce.

The bank also announced the promotion of Haley Jackson of Helena as a new consumer lender.

Jackson has served in several roles over the past six years and now works at the West Branch on Highway 49 in West Helena.

Partners Bank operates seven full-service branches in Phillips, Cross, Crittenden, and Washington Counties. The bank also serves customers in Northeast Arkansas, Tennessee, and North Mississippi. As of today, Partners Bank reports total assets of over $325 million.

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NEWS & MOVES FIRST COMMUNITY BANK

HIRES MINDY HINDMARSH, SAM CARRASQUILLO

F Mindy Hindmarsh Secondary Mortgage Originator

Sam Carrasquillo

Community Development Officer

irst Community Bank announced that Mindy Hindmarsh has joined the bank as secondary mortgage originator for the Cabot region and will work from the branch located at 11 Prospect Court in Cabot. With 21 years of combined experience in property law, real property title examination and mortgage lending, she will be responsible for educating, advising, and guiding potential borrowers through the loan application process.

“I am honored to be a part of the First Community family and excited to contribute to the growth of such an established bank,” said Hindmarsh. “I consider this to be a tremendous opportunity, and I am thrilled to join the team.”

Hindmarsh is a graduate of Northside Christian Academy in Fort Smith, Arkansas, and a native to the Little Rock area. She earned her bachelor’s degree in applied communication and legal studies from the University of Arkansas at Little Rock and is currently attending University of Oklahoma School of Law in pursuit of her master’s in legal studies.

“We’re pleased to have Mindy on board with our mortgage lending team to help us build upon

our existing presence,” said David Wood, market president of the Searcy and Cabot regions. “Her experience along with her knowledge in the real estate industry is a valued benefit to customers.”

First Community Bank also announced that Sam Carrasquillo has joined the bank as community development officer for the Little Rock region and will work out of the Saddle Creek location at 8201 Ranch Blvd. With 20 years of experience in the construction and real estate industries, Carrasquillo will be responsible for developing and nurturing relationships within the community by offering financial education programs and resources to enrich the financial health of the community.

Originally from Puerto Rico, Carrasquillo moved to Little Rock 20 years ago where he currently resides.

“First Community Bank is very fortunate to add Sam to our team,” said Rene Julian, community president in Little Rock. “He will bring the experience and knowledge base that will make him a tremendous asset to First Community Bank and the customers we serve.”

FORMER FED EVP JULIE STACKHOUSE

JOINS SIMMONS BOARD OF DIRECTORS

S Julie Stackhouse Board of Directors

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immons First National Corp. announced Wednesday (March 3) that Julie Stackhouse has been added to the company’s board of directors. She has also been added to the board of directors of the company’s wholly-owned subsidiary bank, Simmons Bank.

Stackhouse is a former executive vice president at the Federal Reserve Bank of St. Louis, where she was responsible for bank regulation, including supervision of bank holding companies and state member banks.

“We are thrilled to welcome Julie to our organization,” said George A. Makris, Jr., Simmons’ chair-

man and CEO. “Julie brings incredible insight and a tremendous understanding of our industry from her many years of working with financial institutions, and I am confident that she will be a valuable contributor as a member of our board.”

Simmons is a financial holding company headquartered in Pine Bluff, Arkansas, with total consolidated assets of approximately $22.4 billion as of December 31, 2020. The bank has operations in Arkansas, Illinois, Kansas, Missouri, Oklahoma, Tennessee, and Texas.

Tim Rodgers

Chief Lending Officer

Ravan Wagner

Tony Robbins

Assistant Vice President Lending

Assistant Vice President Lending

UNION BANK OF MENA

ANNOUNCES STAFF PROMOTIONS

K

evin Williams, President, Union Bank of Mena has announced that three of the bank’s staff members have been promoted.

Tim Rodgers has been promoted to Chief Lending Officer. Rodgers, who was previously Senior Vice President Lending, holds a Bachelor of Business Administration Degree and Masters of Business Administration from the University of Central Arkansas in Conway.

He is very active in the community and lends support as a Board Member of the Polk County Developmental Center and is Trustee, Secretary and Treasurer of Abundant Life United Pentecostal Church. He is also a committee member of the Single Parent Scholarship Fund and a member of the Mena Lions Club.

Ravan Wagner, previously Loan Officer, has been promoted to Assistant Vice President Lending. Wagner attained a Bachelor of Science Degree from Southern Arkansas University in Magnolia. Wagner is a committee member of the Single Parent Scholarship Fund and a member of the Mena Lioness Club and is a volunteer for the Polk County Backpack Program.

Tony Robbins has been promoted to Assistant Vice President Lending. Robbins previously held the title of Loan Officer. Robbins attended Southern Arkansas University in Magnolia where he attained a Bachelor of Science Degree in Ag Business. Robbins is a member and Treasurer of the Mena Lions Club.

“We are extremely proud of Tim, Ravan and Tony.

The relationships they have established, along with the lending expertise each has, makes them an invaluable resource for our customers. We couldn’t be more excited to see them progress in their financial services careers and congratulate them on their success”.

Union Bank of Mena was established in 1934 and has branches in Mena, Hatfield and Wickes.

SIMMONS BANK

PURCHASES LAND TO ESTABLISH SECOND BRANCH IN WHITE HALL

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immons Bank announced plans to construct a second bank branch in White Hall on the recently acquired 2.24 acres of land located at the northeast corner of Robin Road and Sheridan Road.

The future location at 1308 Robin Road will complement the bank’s current White Hall branch located at 8107 Dollarway Road.

Subject to regulatory approval, Simmons Bank will begin construction on the new branch in 2021

with plans to open in early 2022.

“The support and growth of our customer base in White Hall has been outstanding and we’re proud to meet that growing demand for our services by adding a second location. We have called Jefferson County home for over a century and it is an honor to be a part of our continued growth here,” said Daniel Robinson, regional community president for Simmons Bank in Pine Bluff.

“WE HAVE CALLED JEFFERSON COUNTY HOME FOR OVER A CENTURY AND IT IS AN HONOR TO BE A PART OF OUR CONTINUED GROWTH HERE”

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NEWS & MOVES

Steve Holmes

Private Banking Advisor

Philip Shell

Mortgage Lender Supervisor

Deysi Santos

Business Development Officer Vice President

ARVEST BANK

ADDS HOLMES AND SHELL; PROMOTES SANTOS

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rvest Bank in Little Rock announced the hiring of Steve Holmes who will serve customers as a private banking advisor. Holmes has 10 years of experience in the financial services industry, all in management.

“Steve is a leader in business and in our community and we are delighted to welcome him to Arvest,” said Jim Cargill, president and CEO of Arvest Bank in Central, Northeast and Southwest Arkansas. “He has a reputation for ensuring great service and solutions for his customers, and he will be a great addition to our team.”

Holmes holds a bachelor’s degree in sociology from the University of Arkansas at Little Rock and a Master of Business Administration from Strayer University.

He currently serves as a board member for the Little Rock Diamond Foundation and Sowing Seeds of Joy, a foreign mission ministry. In 2016, Holmes was appointed by Governor Asa Hutchinson to serve as a commissioner for the Arkansas Economic Development Commission’s Division of Science and Technology.

Philip Shell has joined the bank as mortgage lender supervisor in Conway. Shell has 16 years of experience in mortgage lending and will lead the team at Arvest’s new mortgage lending office at 2885 Prince Street that opened in December.

“Philip’s experience and leadership will be invaluable as we expand our mortgage services area to an independent location on Prince Street,” said Skip Colvin, community bank president of Arvest Bank in 46

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Conway and Morrilton. “The fact that Philip is a native of Conway, was educated here and has chosen to excel in his career in his hometown is a testament to his dedication and knowledge of our community. He is an asset for us, and our customers.”

Shell holds a bachelor’s degree in political science from Hendrix College and an MBA from the University of Arkansas. He is a member of the Conway Chamber of Commerce, a past-president and former treasurer of the Conway Kiwanis Club and has served as a board member for numerous nonprofit organizations during the past 28 years.

Arvest Bank promoted Deysi Santos to business development officer in Little Rock. She also is a vice president and has been with Arvest for 11 years. Santos most recently served as a branch sales manager.

In her new role, Santos will build upon existing relationships with customers and pursue new business opportunities for the bank.

“Deysi excels at ensuring that our customers receive the financial solutions they need, accompanied by great customer service,” said Jim Cargill, president and CEO of Arvest Bank in Central, Northeast and Southwest Arkansas. “She has served our customers well and we look forward to the great work she will achieve for them in this role of increased responsibility.”

Santos’ community involvement involves volunteer work with El Zocalo, the Mexican/Guatemalan Consulate, City Connections, the Little Rock Compassion Center and the Arkansas Food Bank.

“THE FACT THAT PHILIP IS A NATIVE OF CONWAY, WAS EDUCATED HERE AND HAS CHOSEN TO EXCEL IN HIS CAREER IN HIS HOMETOWN IS A TESTAMENT TO HIS DEDICATION AND KNOWLEDGE OF OUR COMMUNITY. HE IS AN ASSET FOR US, AND OUR CUSTOMERS.”

ARMOR BANK

HIRES SUE COLINGER, KAYLA JONES

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Sue Colinger

Market President

Kayla Jones

Personal Banking Specialist

rmor Bank has hired Sue Colinger as Marianna market president.

This comes after the bank’s announcement last fall regarding its acquisition of the Marianna branch of Farmers and Merchants Bank. That transaction is scheduled to close on February 19.

“Armor Bank started in east Arkansas. This region has cultivated a strong foundation for us and has always been home for Sue. This is a perfect illustration of our grassroots, relationship based approach as we expand the roots we have in east Arkansas,” said Chad May, Armor Bank CEO. “Sue brings an unparalleled amount of experience to our team that will add substantial value to our customers and the service we provide them.”

Colinger, a Lee County native, joins Armor with over 40 years of banking experience in Marianna. Sue and her husband Jerry also reside in the county seat.

“I have always chosen to stay here because I love

this community,” Colinger said. “This opportunity is a blessing that allows me to serve people by providing help and assistance they are often unaware of. I look forward to helping our customers through the transition while providing easily accessible service. I’m always on call and most of my customers have my cell phone number. That, to me, is community banking.”

Armor Bank has also expanded the Marianna team by hiring Kayla Jones as a personal banking specialist. Prior to joining Armor Bank, Kayla spent seven years in banking, also in Lee County.

Kayla and her husband, Eric, reside in Marianna with their two children.

“Joining Armor Bank gives me the chance to grow professionally while investing in my hometown community,” said Jones. “This role at Armor Bank enables me to develop personal relationships and help ensure a positive experience for each individual customer.”

SOUTHERN BANCORP’S GLENWOOD TEAM

GROWS BY THREE

From Left:

Colby Brock, Consumer Lender; Marliz Murguia, Consumer Lender; Ki Hartsfield, Executive Vice President

of Commercial Lending

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outhern Bancorp’s Glenwood team has grown by three with the recent additions of Executive Vice President of Commercial Lending Ki Hartsfield and consumer lenders Colby Brock and Marliz Murguia.

The new team members have already begun focusing their efforts on growing Southern’s lending footprint in the Glenwood area.

“We’re excited to welcome this group of highly talented individuals to the Southern team,” said Dar-

rin Williams, Southern Bancorp CEO. “Each come to us with a passion for serving their community and an eagerness to go beyond the efforts of a traditional bank by providing access to responsive and responsible lending products and services designed to help families and individuals build wealth.”

A Glenwood native and Centerpoint alum, Hartsfield joins the Southern Bancorp team with 12 years of banking experience. He graduated Cum Laude from Henderson State University in 2008 with a Bachelor of Business Administration in finance and again in 2012 with a Bachelor of Business Administration in accounting. He is also a 2014 graduate of the Paul W. Barret Graduate School of Banking at Christian Brothers University in Memphis, Tenn. Hartsfield currently serves as the President of the Glenwood Chamber of Commerce.

Brock graduated from Kirby High School in 2014. He then went on to graduate Cum Laude from Henderson State University in the fall of 2017, earning a Bachelor of Business Administration in marketing. Brock is currently a member of the Caddo River Lions Club.

Also a Glenwood native and Centerpoint alum, Murguia graduated from Henderson State University in May 2019 with a Bachelor of Business Administration in accounting. After graduating, she immediately started her banking career. She serves as Secretary of the Glenwood Chamber of Commerce.

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NEWS & MOVES BRANT WARD

PROMOTED TO CHIEF OPERATING OFFICER AT SIGNATURE BANK

S

Brant Ward

Chief Operating Officer

ignature Bank of Arkansas promoted Brant Ward to Chief Operating Officer. Ward has previously served as Chief Administrative Officer and Assistant Treasurer of the company and has been employed with Signature Bank of Arkansas since August 2005.

“Brant’s vision and leadership have been key to the bank’s growth and success,” said CEO Gary Head. “He rose to the challenge of managing operations during the COVID-19 pandemic and surpassed my expectations for keeping us running smoothly. As we look to the future, I know we have the right man in the right position to continue that trajectory of success.”

As COO, Ward will play an integral role in the overall management of Signature Bank of Arkansas. He manages the bank rates, liquidity and asset/

liabilities of the bank along with management of the bank’s bond portfolio. He also serves on the Executive Management Committee which develops strategic business planning, policy development, and problem solving. Ward also initiates the development of deposit products, pricing, delivery systems, and provides support for the retail department.

Ward supervises the Deposit Operations, Retail Operations, Mortgage Operations, Information Technology, and Vendor Management departments.

He received a BAA in Business Management from Henderson State University and an MBA in Business Entrepreneurship and Finance from the University of Arkansas. He also completed International Studies in the British Studies Program and Italy Study Abroad.

His banking education was completed at the Graduate School of Banking at Colorado in 2018.

GENERATIONS BANK

ANNOUNCES NEW MARKET PRESIDENTS IN FAYETTEVILLE, BENTONVILLE/ROGERS

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ogers-based Generations Bank has promoted August Rusher to president of its Bentonville/ Rogers market and Ed Love to president of its Fayetteville market.

Rusher, a community banker in Northwest Arkansas for 15 years, has worked for Generations Bank since 2010. He replaces Luke Colley, who’s now the bank’s chief lending officer.

“August’s lineage and experience in community banking and his strong commercial lending background are a perfect fit for the opening of our latest branch in Bentonville and will help us continue to grow and increase our Benton County market share.” said Joe Ruddell, President of Generations Bank, said in a statement.

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Love started with Generations Bank in April 2020 after serving community banks in the Northwest Arkansas market since 2005. He replaces Bryn Bagwell, who left the bank in December.

“Ed’s commitment to Generations and his longterm investment in the Fayetteville community make him a perfect fit for the growing needs of the market,” Ruddell said.

Generations Bank relocated its charter from south Arkansas to Rogers in the spring of 2019.

The company now has 10 brick-and-mortar locations in Arkansas, including five in Northwest Arkansas and the Fort Smith metro —Bentonville, Fayetteville, Rogers, Siloam Springs and Van Buren.

“AUGUST’S LINEAGE AND EXPERIENCE IN COMMUNITY BANKING AND HIS STRONG COMMERCIAL LENDING BACKGROUND ARE A PERFECT FIT FOR THE OPENING OF OUR LATEST BRANCH IN BENTONVILLE”

Meredith Miller Deposit Services/ Branch Manager

Tina Scott

Branch Manager

Rachel Graham Deposit Services/ Branch Manager

Nate Wilson

Market President/ Local Advisory Board Of Directors

FOUR NEW MOVES

FOR CS BANK

C

S Bank promoted Meredith Miller to Deposit Services/Branch Manager of the bank’s Eureka Springs – Financial Center location. Miller will oversee the deposit services staff and daily operation of the Financial Center.

Miller, who has been with CS Bank since 2015, has most recently been the Branch Manager at Huntsville since the grand opening of the location.

Previous to joining the bank, Miller served 12 years in the Huntsville School system at Watson Primary.

Prior to her tenure at the school, she was in the banking industry for a number of years with both Heritage Bank in Jonesboro and Arvest Bank in Huntsville.

Miller received a degree in Educational Leadership from Arkansas State University in 2011 and a degree in Elementary Education from the University of Arkansas in 2003.

Tina Scott was named Branch Manager for the bank’s entry into Cassville, Missouri. She will oversee CS Bank’s deposit services staff for the entire market. Scott has 15 years of banking experience and has served in numerous roles at CS Bank, ranging from Deposit Services, Data Processing, and most recently Loan Operations. Prior to joining the bank, Scott was employed by the State of Missouri as a Court Clerk at the Barry County Judicial Center.

Rachel Graham was appointed Deposit Services/ Branch Manager at CS Bank in Huntsville. Graham

will be responsible for the oversight of the deposit services staff and daily operations of the Huntsville facility. She began her banking career three years ago at the Huntsville branch. Since that time, she has worked in both Harrison and Berryville.

Nate Wilson has been appointed to CS Bank’s local advisory board of directors.

Wilson serves as Market President of the institution’s Boone County operations and began his tenure with CS Bank in December 2016.

“Since Nate’s arrival at our company he has been a fantastic addition to our bank family here at CSB. His leadership has helped facilitate our bank’s steady growth in Boone County, as we continually introduce new clients to our special brand of true community banking. We have developed an unbelievable team of professionals in Harrison and have become one of the fastest growing banks in the State of Arkansas with the stewardship of great bankers such as Nate. He is certainly deserving of this appointment to our Advisory Board and I look forward to his continued representation of our company moving forward,” said Charles T. Cross, CS Bank CEO. Wilson began his banking career in 2007 and has served numerous roles within the industry since that time. He was appointed Market President in Boone County in May 2019.

“WE HAVE DEVELOPED AN UNBELIEVABLE TEAM OF PROFESSIONALS IN HARRISON AND HAVE BECOME ONE OF THE FASTEST GROWING BANKS IN THE STATE OF ARKANSAS.”

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