The Arkansas Banker Fall 2019

Fall 2019

Salute to Veterans Volume CII, No. 7

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Fall 2019 COLUMNS

Volume CII, No. 7 President’s Message

4

Lorrie Trogden

Chairman’s Column

6

Rob Robinson

Washington Update

8

SALUTE TO VETERANS ISSUE

Rob Nichols

Five Minutes

23

10

DEPARTMENTS

with Christie Patterson

Professional Development 7 9 11

Live Events Webinars AmBA Training

Member News

53

Banker News & Moves

56

22 14

SPOTLIGHT

20 35

By Cole Ponto

The CECL Model: Accounting Changes Coming for Banks

41

CRA Partners

44

42

The Arkansas Banker Online

Join us at www.arkbankers.org to read and share statewide banking news!

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

38

Welcome to Pepto Bismol Bank!

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2019 MEGA

CONFERENCE

52

ces ren , e f n o nt ight c eve With e ed into one thing me . pack got so ker we’ve ry ban eve for

October 8-9, 2019 Little Rock Marriott

Register online at www.arkbankers.org/mega.aspx or by phone at 501.376.3741.

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PRESIDENT’S MESSAGE It’s hard to believe fall is right around the corner. Here at the ABA, fall brings our Mega Conference, our Emerging Leaders Leadership Conference, and our celebration of Veterans Day. I also have updates on state and federal government relations issues for you, as well as the Great Arkansas Road Tour of 2019.

We have a dynamic line up of speakers booked for the Mega Conference, and you will find several articles in this issue written by those speakers. The Mega Conference provides multiple registration options, including a “lunch only” option for an all-star panel on the 8th about the subject of hemp. Since the 2018 Farm Bill, many issues and questions are surfacing around the financing of hemp and understanding the difference between state and federal laws regarding hemp and cannabis.

Have your emerging leaders save the date for the October 22-23 Emerging Leaders Leadership Conference. In tribute to our former President & CEO Bill Holmes, this year will include the debut of the Bill Holmes Leadership Award. This will be an annual award, and we are excited to roll out this prestigious new program.

There are multiple topics to discuss on the federal front. In June, Congressman French Hill held a bankers’ roundtable in Little Rock with topics on CECL, cannabis banking, and audience contributed hot topics. He also spoke about several bills he is involved with: Financial Reporting Threshold Modernization Act, TAILOR Act, CECL stop and study bill, and the SAFE Act. We commend his support for the banking industry and his service on the House Committee for Financial Services and as a ranking member of the Task Forces on Financial Technology (FinTech), and the Task Force on Artificial Intelligence.

In July, Senator Tom Cotton participated in a bankers’ roundtable meeting in Fort Smith.

We had good discussions about the CECL stop and study bill that he is co-sponsoring in the Senate, his ILLICIT CASH draft legislation, the CLAW Act, cannabis banking, and credit unions. We are appreciative of his support for the banking industry and his service on the Senate Committee on Banking, Housing, and Urban Affairs Committee.

CECL - While FASB postponed CECL implementation for banks of certain size until 2023, we will continue to advocate for the House and Senate stop and study bills. A quantitative impact study still needs to be completed to determine the impact on bank lending and regulatory capital and further considerations of changes to CECL to better reflect a financial institution’s exposure to credit risk. CECL is likely to prove highly procyclical and further study needs to be done to understand its effects on the economy. When you talk with any of our congressional delegation, please continue to press the importance of getting these bills passed. All of our House members and both of our Senators have signed on as cosponsors of the House and Senate CECL stop and study bills.

Credit Unions – We continue to battle the unfair federal advantages and mission overreach of credit unions. Most recently at the AmBA Summer Leadership Meeting, my counterpart from the Utah Bankers Association referred to “fake” credit unions – those large credit unions that are acting like banks vs. the small credit unions staying within their mission.

While we still assert that billion-dollar credit unions are cheating the American tax payer by paying less taxes than a family of four, we also want to include messaging that takes smaller bites of the whale. Issues such as lax enforcement

Lorrie Trogden | President & CEO Arkansas Bankers Association

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ABA OFFICERS Rob Robinson, IV, Chairman Simmons Bank, El Dorado

Jonathan Harrell, Chairman-Elect Generations Bank, Rogers

Jim Cargill, Vice Chairman Arvest Bank, Little Rock

Tom Grumbles, Treasurer First Service Bank, Greenbrier

Cathy Owen, Past Chairman Eagle Bank & Trust, Little Rock

Lorrie Trogden, President & CEO

Arkansas Bankers Association, Little Rock

BOARD OF DIRECTORS Johnny Adams, Conway Craig Attwood, Pine Bluff Jeff Brecklein, Jonesboro Nathan Gairhan, Springdale David Jessup, DeWitt Lance Lanier, Van Buren Barry Ledbetter, Little Rock Wilson Moore, Little Rock Marnie Oldner, Little Rock George Purvis, Eureka Springs Mark Roberts, Malvern Lori Ross, Arkadelphia Randy Scott, Blytheville Todd Smith, Magnolia Jason Tennant, Eureka Springs Lynn Wright, Little Rock

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by federal regulator judges of meaningful membership restrictions, the lack of federal 990 form requirements that other not-for-profits have to comply with, and a lack of providing financial services to people of small means. We joined the AmBA in a letter to the National Credit Union Administration (NCUA) calling for a top-tobottom assessment of whether credit unions are meeting their mission as well as asking the NCUA Inspector General to review the regulator’s role in allowing credit unions to lose sight of their mission. If you missed it in our Tuesday eNews emails, be sure and take a look on our Advocacy webpage at the Federal Financial Analytics’ research and conclusions from a study on credit unions meeting their mission and how their federal regulator enforces it.

Switching gears (pun intended), the Great Arkansas Road Tour of 2019 continued with trips to Jonesboro, Fort Smith, Paragould, Rogers, a visit with the Mississippi Treasurer in Jefferson City (more about that later!), and others in the works. I’m still looking to hit the road for more visits, so please let me know what’s happening in your part of the state and let’s get a visit scheduled!

In closing, I encourage you to take a moment to look over our Veterans in banking feature and reflect on their service to our country. While we may not know them all, we certainly owe them all. “One Flag, One Land, One Heart, One Hand, One Nation Evermore!” ~Oliver Wendell Holmes Sr.

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CHAIRMAN’S COLUMN America’s Heroes: Past, Present and Future This month’s issue of The Arkansas Banker rightly recognizes our Nation’s Veterans. It is an honor to highlight the brave men and women in our industry along with those we call our friends and neighbors. While the official holiday is not until November, we should always take the opportunity to recognize the brave men and women who have unselfishly and bravely served in our Armed Services to protect our Freedoms. Please join me in honoring these brave Americans, today and every day.

For those who might be curious about the history behind Veterans Day, the holiday was originally known as Armistice Day when President Woodrow Wilson declared November 11, 1919 a day to recognize the first anniversary of the signing of the armistice that ended The Great War. President Wilson set aside this day to recognize and thank our American Soldiers for their service. In 1938, the day was declared a National Holiday and in 1954, the name was changed to Veterans Day to honor all American Veterans.

“How important it is for us to recognize and celebrate our heroes and she-roes!” – Maya Angelou “Freedom is never free.” – Author Unknown “As we express our gratitude, we must never forget that the highest appreciation is not to utter words, but to live by them.” – John F. Kennedy “A hero is someone who has given his or her life to something bigger than oneself.” – Joseph Campbell “Honor the soldier and sailor everywhere, who bravely bears his country’s cause.” – Abraham Lincoln The quotes above only begin to shape the lens of how Americans can view and honor our Nation’s Veterans. Hopefully, these will help as you contemplate the significance of our veterans contributions and sacrifices to this great Nation.

Brief Association Updates It has been a busy and productive Summer at your Association. Lorrie Trogden, Jon Harrell and I have attended the meetings of Central States Bankers Association and the ABA Summer Leadership Forum – both help as we prepare for the upcoming trip to D.C. and provided us with a great framework for the Advocacy Efforts we employ locally and nationally.

Meetings with the State Treasurer’s Office to voice our concerns with its Investment Policy and the CD Online Auction appear fruitful.

Lorrie has provided updates on the former and we should see some positive movement on the latter from them soon.

The Washington D.C. Fall Fly-In is scheduled for September 30 through October 2. You can register on the Arkansas Bankers Association website. We will meet with each of the Regulatory Agencies, FinCEN and the CFPB on October 1, and the following day visit with our Arkansas Delegation on Capitol Hill. This will be a great chance to express concerns, push regulatory reform and advocate for our industry. Please consider joining us on this trip.

Credit Unions, the absolute bane of our industry: We will continue to press our concerns with Credit Unions during our upcoming visit to D.C. The simple fact that an Arkansas family of four pays more in federal taxes than the Arkansas Federal Credit Union is appalling. We need to educate our communities about Credit Unions: they don’t pay Federal Taxes and they are not subject to CRA regulations. Spread the word – if we are ever going to see a change it will come about when the politicians hear from the voters, we can’t do it alone.

As always, please feel free to reach out to me if there is something on your mind that the ABA can help you or your institution with; we are here to serve your needs.

In closing, to our men and women in uniform, past, present, and future, God bless you and thank you for your service.

Rob Robinson | Chairman Arkansas Bankers Association

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ABA PROFESSIONAL DEVELOPMENT

LIVE EVENTS Providing you with face-to-face interaction with expert instructors!

OCTOBER 2019 IRA School

Mega Conference

October 2-3, 2019

October 8-9, 2019

Training the Credit Analyst

Emerging Leaders Leadership Conference

October 16-17, 2019

October 22-23, 2019

NOVEMBER

6 – 7 Supervisor Boot Camp

DECEMBER

2-3 Women in Banking Conference

13 Lending Compliance Update 14 Hot Topics in Human Resources 19

Loan Assistants & Processors Workshop

JANUARY 22 – 23

Foundations of Commercial Lending

28

Bank Directors Training

29

Key Ratio Analysis: Calculating the Numbers Correctly!

30

Basic Personal & Business Tax Return Analysis For more information about ABA Live Events, log on to www.arkbankers.org or call 501.376.3741.

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WASHINGTON UPDATE Redefining ‘Banker’ What does it mean to be a banker today?

Those of you reading this column have a good idea of the variety of jobs held by the 2 million women and men who work for America’s banks. But many would-be bankers don’t. That lack of awareness can be an obstacle to recruiting talent in an increasingly tight job market, particularly among younger generations whose “bank” is their smart phone and who therefore may have less personal exposure to actual bank employees.

To address that, ABA’s Emerging Leaders Council recommended a series of profiles of real-life bankers in a range of roles and at various stages in their careers. They believed that no one can be a better ambassador for careers in banking than those who are currently finding success and fulfillment in banking roles.

They were so right. Visit aba.com/CareersInBanking and you’ll see what I mean.

There you will find video profiles of several talented individuals who are proud to be bankers and who will make you proud, too.

They work in functions ranging from digital strategist to agribusiness lender and from head of retail banking to communications director.

They also work at banks of all sizes, some in big cities, others in small towns. And no matter what role they serve in, these bankers believe the opportunity, impact and rewards associated with their jobs are hard to beat.

“It’s a satisfying feeling at the end of the day to be driving down the road and see a new building or a new business or someone out with a new farm machine and know they came to you to help with that,” says Tyler Stevenson, commercial and agribusiness lender with First National Bank of Omaha.

“There’s so much opportunity here. This is where I want to be. I want to be part of this change in making things better for customers in giving broader access, and developing tools that can help people save, small businesses grow and communities develop,” says Ashley Nagle Eknaian, chief digital strategist and head of Eastern Labs at Eastern Bank.

“Banking is wonderful because you get to see the impact that you have on the community around you.... That gratification is enough to just say, wow — I’m doing something important,” says Julio Figueroa, who within five years advanced from teller to security officer at Windsor Federal Savings.

These individuals and the others profiled came to banking by different paths. Two transitioned into banking after serving in the military.

One started as an intern and quickly found he had tremendous professional growth potential. Yet another spent time in the fashion business.

Their backgrounds, roles and testimonials shatter banker stereotypes and show what it really means to be a banker in today’s modern world. And they are a wonderful complement to ABA’s America’s Banks website (aba.com/AmericasBanks) that tells the story of banking today and the industry’s economic impact.

We couldn’t have asked for more compelling spokespeople for our industry. When we asked these banking leaders to describe their careers in one word, they answered with adjectives like, “life-changing,”“impactful,”“fulfilling,”“incredible” and “entrepreneurial.”

Our job now is to let the world hear their stories, and we’re counting on you, the state associations and social media to help. Please consider showing the collective or individual videos to job applicants at your bank and at local job fairs. Share them with local colleges and career placement offices, and encourage your employees to do the same.

These videos, combined with all that banks individually and collectively have to offer—including training, professional development and community involvement—make a compelling case for banking as a career choice. And the more we can help talented individuals find their future in banking, the more we, too, will be rewarded.

Rob Nichols

President & CEO, American Bankers Association

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ABA PROFESSIONAL DEVELOPMENT

OCTOBER 2019 October 1, 2019 Communicating with Executives 1:30 p.m. – 3:30 p.m.

October 2, 2019 Excel: Filtering and Slicing Data 10:00 a.m. – 12:00 p.m.

Business Models Involving Convertible Virtual Currencies 1:30 p.m. – 3:30 p.m.

October 3, 2019 Managing a Successful Call Center 10:00 a.m. – 12:00 p.m.

20 Tasks of the New Account Interview 1:30 p.m. – 3:30 p.m.

October 7, 2019 Agricultural Loan Documentation & Administration 1:30 p.m. – 3:30 p.m.

October 8, 2019 FFIEC Cyber Compliance Update 10:00 a.m. – 12:00 p.m.

Violence in Your Workplace: Prevention & Response 1:30 p.m. – 3:30 p.m.

October 9, 2019 Right of Rescission: Review and Update 10:00 a.m. – 12:00 p.m.

WEBINARS

Train multiple employees for one price, from the convenient location of your bank!

October 10, 2019 Understanding Regulation CC and the New Amendments 1:30 p.m. – 3:30 p.m.

October 15, 2019 Opening Business Accounts 10:00 a.m. – 12:00 p.m.

October 17, 2019 Loan Underwriting Mistakes 10:00 a.m. – 12:00 p.m.

October 25, 2019 e-OSCAR and Metro 2 Reporting 10:00 a.m. – 12:00 p.m.

Spotting Opportunities and Making Referrals 10:00 a.m. – 12:00 p.m.

October 28, 2019 Commercial & Business Lending Basics for Support Personnel 1:30 p.m. – 3:30 p.m.

Annual BSA Training for the Frontline 1:30 p.m. – 3:30 p.m.

October 29, 2019

October 18, 2019

Countdown to Nonresident Alien Changes!

1:30 p.m. – 3:30 p.m.

Excel Explained: Utilizing Dashboards 10:00 a.m. – 12:00 a.m.

Mortgage Servicing Compliance 10:00 a.m. – 12:00 a.m.

Poor Box Drilling Creates Lawsuits 10:00 a.m. – 12:00 p.m.

October 30, 2019 10 Check Legal Issues to Save You Thousands

October 22, 2019

10:00 a.m. – 12:00 p.m.

E-Sign for Lending and Critical E-Sign Implementation Issues 10:00 a.m. – 12:00 p.m.

ACH Origination Risk Management 1:30 p.m. – 3:30 p.m.

October 23, 2019 BSA/AML & OFAC Compliance: Part I 10:00 a.m. – 12:00 p.m.

October 24, 2019

October 31, 2019 IRAs: Auditing and Compliance 10:00 a.m. – 12:00 p.m.

Loan Structuring Basics 1:30 p.m. – 3:30 p.m.

Loan Denials & Other Adverse Action Notices 10:00 a.m. – 12:00 p.m.

For more information about ABA Webinars, log on to www.arkbankers.org or call 501.376.3741.

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5 MINUTES WITH

CHRISTIE PATTERSON

Market President of Southern Bancorp Blytheville, AR

What’s some of your background?

I have lived in the Gosnell area all my life.

Gosnell is just outside of Blytheville. All of my primary education was in the Gosnell school system and I graduated in 1993.

Then I attend Arkansas Northeastern College and completed my Bachelor in corporate finance at Arkansas State University. I began my professional career with Wells Fargo in Memphis and was then afforded the opportunity to return home and start my career with Southern Bancorp (formally First National Bank). I have worked in banking for 18 years and my husband and I have been married for 15 years.

What made you decide to stay at Southern Bancorp for nearly twenty years?

We’ve always been a part of the community. As wealth builders, we help build the wealth of our customers and potential customers. I’ve always liked helping people, and finance has been my connection. I felt like I could personally help people because they are more than just a number. Accomplishment is seeing your friends and neighbors succeed.

People often feel that if they’re not a business owner, an executive or steel worker, that they can’t have a positive net worth. I get to help more than just one demographic. It’s helping everyone.

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What’s the most valuable lesson you’ve learned over the years?

Everyday a lesson is provided. It’s up to each of us to listen and pay attention.

If you weren’t in banking, what would you be doing?

My greatest joy is helping others succeed.

Helping our customers and teammates achieve their goals is the greatest reward.

My family and I enjoy working during the holidays in our community. So I believe that I would be volunteering and working with mission groups.

What leadership skill has helped you the most as market president?

Listening. We were all given two ears and one mouth for a reason. We should listen twice as much as we talk. You need to listen to what our customers and team are asking and seeing. You’ve got to pay attention to both sides of the equation.

When you’re not at work, what do you like to do?

I like to work in the yard and go shopping.

My husband and I like to travel as often as possible.

What surprises other people the most about you?

Often, when I tell people that I’m the market president, they’re like, “Really?”

Because I am level headed, willing to listen, down to earth and willing to get my hands dirty to accomplish the tasked goal.

For those looking to move up in their career, do you have any advice?

Work hard. Pay attention. Don’t be nervous to step outside of the box. Try something new. If you see an opportunity to cross train in an area, don’t just discount it because it’s not the area you’re in now. It could give you more support for later and give you progression for moving forward to moving into a higher leadership level.

Work hard and keep your nose to the grindstone. But also have a mentor and seek guidance regularly. I think everybody should have a mentor. It’s always good to ask someone else’s view on something.

Don’t get discouraged and don’t give up.

We all have those days where it’s not going to go our way and quitting solves nothing.

ABA PROFESSIONAL DEVELOPMENT

AmBA TRAINING

AmBA Training includes extensive learning opportunities suited to specific job roles, in both facilitated and self-paced online formats, as well as in person. Flexible and cost-effective, AmBA’s online training opportunities are continually updated to provide a superior learning experience that can be accessed from anywhere, at any time.

UPCOMING COURSES Introduction to Trust Products and Services

Analyzing Financial Statements

September 23, 2019 – October 25, 2019

December 9, 2019 – April 3, 2020

Introduction to Agricultural Lending

The Banking Industry

September 30, 2019 – November 22, 2019

January 6, 2020 – January 31, 2020

Basic Administrative Duties of a Trustee

Analyzing Bank Performance

November 4, 2019 – December 13, 2019

January 27, 2020 – March 13, 2020

Marketing in Banking

Managing Funding, Liquidity and Capital

November 4, 2019 – December 6, 2019

January 27, 2020 – February 28, 2020

Consumer Lending

Marketing Planning

November 4, 2019 – March 6, 2020

February 17, 2020 – September 11, 2020

Money and Banking

Legal Foundations in Banking

November 4, 2019 – March 6, 2020

March 23, 2020 – June 5, 2020

Building Customer Relationships

Managing the Bank’s Investment Portfolio

November 11, 2019 – December 13, 2019

March 23, 2020 – April 24, 2020

General Accounting November 11, 2019 – March 13, 2020

For more information about AmBA Training, log on to www.arkbankers.org or call 501.376.3741.

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COMMUNITIES SUFFER WHEN CREDIT UNIONS BUY BANKS

by Laurie Stewart

For the first time a credit union in our state bought a community bank. While I was aware of this type of transaction, it really hit home when our bank lost the bid on this bank – not to another bank, but to a credit union. This is both harmful and unfair to every community and business previously served by a tax paying bank. In my view, this is an indefensible development and another illustration of how indistinguishable parts of the credit union industry are from mainstream banks.

Credit unions are exempt from federal income taxes and, in Washington, they are also exempt from our state’s business taxes (which are assessed on gross revenues in Washington State with a few exceptions). While this is likely not new information to readers, what is noteworthy is that when a non-tax paying entity acquires a tax-paying one, it removes the latter from the tax rolls forever. That means all of us – business of all sizes and types including a bank like ours – must make up the shortfall. Who suffers? Communities with fewer dollars for schools, public safety and public services. Who benefits? Credit Unions –generating higher profits. Perhaps the biggest irony is those same credit union executives will still call 911 in the case of an emergency, still enjoy public services, and, in many cases, still send their children to public schools.

Credit unions were created to serve people of modest means who shared a common bond. The tax exemption was put in place during the Great Depression in hopes of ensuring access to financial services

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for these underserved individuals. When Associated Grocer’s Federal Credit Union – our predecessor - was formed it was born in the payroll department, run by volunteers with a little help from Human Resources, and supported by payroll deductions. It consisted of those closely aligned grocery warehouse workers willing to pool savings – called shares – to lend to other co-workers for cars and personal needs. As the Credit Union grew, it added paid staff and a single location but it was still closely aligned with the grocery industry. Compare that to a mega credit union like BECU – now more than a $20 billion dollar credit union operating with an open field of membership and marketing traditional banking services to everyone in the State and beyond.

Credit unions claim they are still in the business of serving people of modest means. This is an argument that does not hold up in light of the fact credit unions offer banking services to more middle and upper income customers than those of modest means. And, though they claim that their ownership structure inures to the benefit of their members, a cooperative form of ownership does not justify a tax exemption.

Compare BECU’s more than $250 Million dollars of tax free income last year with the tax paying mutual savings banks and insurance companies. Even our venerated REI – a true co-operative – pays taxes. And REI members still earn dividends! This just shows that cooperative forms of business structure can survive paying taxes and supporting the public good.

A recent study by Federal Financial Analytics, Inc. reported credit unions are indistinguishable from for-profit financial institutions. So, if they operate like banks, offer bank services, and use the police, fire fighters, roads, parks and other public services supported by public revenue, I ask again, who suffers? The community and every other business that must make up the shortfall.

Credit unions in our State do billions of dollars of business. I welcome the competition.

Often rates we offer beat those offered by our purported not-for-profit credit union competitors. But I think the policy needs to change. The citizens and communities and businesses of Washington – or any other state – should not subsidize the extremely profitable and aggressively growing credit union industry.

It is terrible public policy to allow a credit union to reduce our tax revenues by acquiring a tax-paying bank. It is time for a change.

The tax exemptions at the Federal and state level should be abolished. The aggressive elimination of tax-paying banks by acquisitive credit unions should not be a burden born by businesses and communities.

Laurie Stewart is President/CEO of Sound Community Bank which converted from a credit Union in 2003. She is Chair – elect of the American Bankers Association.

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MEMBER SPOTLIGHT

BRUCE MALOCH: FARMER, LAWYER, BANKER, SENATOR afternoon. This is where the “political bug” bit him, working on the hill curated his interest in both politics and law. He thought law was something he could bring back to help people in his hometown community, and possibly lead into politics. So, he did just that, practicing with Anderson, Crumpler, Bell, and Maloch after earning a Juris Doctor with honors in 1980 from the University of Arkansas at Little Rock School of Law. After practicing estate, business, and oil and gas law for three years in Magnolia, Bruce moved into his “real job” with Farmers Bank and Trust Co. He started out doing legal work for the bank as part of his practice, and while he was not looking to leave private practice, the bank was growing and wanted to add a lawyer on staff. He made the leap in 1986 and has remained on staff with the bank as the Vice-Chairman and General Counsel. When he started with the bank, “it had less than $100 million in assets and today ranks around 7th in the state with over $1.6 billion in assets.”

Bruce and Martha Maloch

With over a century in the business, farming runs deep in Bruce Maloch’s family heritage. His great grandfather started farming in 1887, and the family tradition continued when Bruce bought back his family farm plus 40 additional acres in Emerson, Arkansas in 1980. The Maloch farm produces cattle, hay, and timber. He says its not meant to be a primary source of income, rather an enjoyment, “I’ve always told people we were more interested in raising kids than cows. Now grandkids. Teaching them how to work and teaching them some responsibility, the farm helped do that.”

Bruce is affiliated with many farming organizations, starting in his youth with the 4-H and FFA. He has served as an FFA state president, a national officer, and a chairman of the Arkansas FFA Foundation, as well as hosting the state 4-H Livestock Leadership Academy Program at the state Capitol. His involvement doesn’t stop there, he served as a Chairman of the Arkansas Cattleman’s Foundation and has long been active with the Arkansas Farm Bureau, Arkansas State Fair and Livestock Association, Columbia County Cattlemen’s Association, the Magnolia Rotary Club, and the South Arkansas Development Council.

From farming to law school and banking Maloch earned a degree in Agricultural Business from Southern Arkansas University, including a course at Georgetown University on comparative political and economic systems. He would go to class in the morning and then intern for Senator Pryor in the

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Maloch confirms the bank is an active Arkansas Bankers Association member, sending bankers to seminars, banking schools, annual convention, and participating in other Association programs. Bruce himself has made several trips to Washington, D.C. with the ABA to talk with delegates about the Dodd-Frank Act, which he views as Congress’ overreaction to the 2008 banking and mortgage crisis. He believes this overreaching one-size-fits-all federal regulation hurts community banks the most, even though they did not cause the problem. “[Washington needs to] focus on consumers instead of focusing on strict compliance that serves little purpose to help consumers.” He thinks continued ABA Washington trips are essential as work continues on S. 2155 implementation. “The Association does a good job, it’s important to maintain contacts at both the federal and state level.”

Bridging banking and politics The Senator’s political foray started with his local quorum court, where he served for 10 years (1998-2008).

“Then we were sitting at the bank one day with our CEO talking about the representation we had, not any particular person, but the legislature and local bodies. We are a community bank, and banks are central to communities they serve – we make donations and our people commit their time to serve all sorts of community projects. That’s not just our bank, it’s all banks. We saw a need for our community at the legislative level and just decided

After he termed out, there was a two-year gap, then in 2012 he ran for an open Senate seat. He is now in his second Senate term, answering bank emails at 6 a.m. and preparing for the legislative day.

During the regular session the Senator is in Little Rock the first three months of the year, mostly during the week, but then the rest of the year is intermittent committee meetings. “I’m not up there as much as some legislators are, but I can keep up with what’s going on from down here. The committees I actually serve on, I attend.”

Columbia County Citizen of the Year - 2019

as a bank that they would allow me to serve in the legislature while continuing to work at the bank.”

Bruce is able to do this, in part, because technology is getting better and better, allowing him to manage the bank’s portfolio remotely from anywhere and keep communication up through email. “Technology allows me to have my real job at the bank and serve in the legislature, which to me is a nice balance. The commitment from the bank has allowed me to do that.”

Maloch served in the House of Representatives from 2005 until 2010, which includes serving as the Chairman of the Budget Committee.

Throughout his tenure, he’s been recognized as Legislator of the Year by the Arkansas Realtors Association, Person of the Year by the Arkansas Municipal League, and was named one of the top 10 legislators by Talk Business magazine.

Maloch isn’t all politics though, he loves helping people invest in their futures.

Any financial tips?

As far as financial tips, Maloch advises to start saving early. “For young people who work for any company with a savings plan or matching plan (our bank has that for our employees), put in as much as you can. The time and compounding effect of money really makes a difference for retirement.” When saving, he recommends diversifying between CDs, stocks and mutual funds. “Don’t try to hit

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bkd.com/fs • @BKDFS Fall 2019

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The Senator has five grandchildren, two of which live near he and his wife, and advocates teaching responsibility and work ethic. “If you have some of those character values, sometimes we call them soft skills, then they can end up doing anything they want to do. Even at the bank, it’s more important for us to hire someone with a work ethic and the right attitude. We can often teach them technical skills, it’s more important that someone knows how to show up on time and show up every day.”

Bruce Maloch auctioning the Columbia County Jr. Livestock Sale

a homerun, a solid steady plan will produce financial security in the long run. It’s also important to have money that is secure that you can get to in the event of an emergency, generally bank CD money. If something happens, you can get to it and don’t have to worry about dipping into your retirement investment.”

In addition to saving, he also warns to be careful with debt, relaying that home buyers should be sensible with a mortgage and only buy what they can afford. He sees consumer debt as another big issue, and warns that people should be careful not to become saddled with high interest consumer debt.

Looking toward the future When asked what his hopes are for the future of legislation, banking, and farming, Bruce points to community banking and creating opportunities for decent jobs, good health care, and good education. When it comes to community banking, “Community banks have challenges and some of those challenges are regulatory and compliance issues that consume too much of our time and energy.

Banks that are in the lower $100 to $200 million range are going to have issues meeting all of that. Community banks will continue to be the lifeblood of our communities, particularly our rural communities.”

Maloch feels having local bank ownership that is invested in the state, especially in rural Arkansas, is very important. “My heart and passion are creating opportunities in these towns and markets. If a young person wants to come back or stay home and have a family, I want them to be able to do that. I’ve been blessed to be able to do that, [I’ve] raised three children in Emerson.” He has a son Ryan in Russellville who is the general manager of a John Deere dealership, a daughter Lauren who is a pharmacist in Stamps, Arkansas and lives on family land near the farm, and his youngest daughter Victoria “is a political animal, maybe more so than me. While going to college, she interned for Mike Ross one summer, interned at USDA for two summers and interned at the White House for one summer. She earned the Truman scholarship and also served as a Truman Albright Fellow at the U.S. Department of Health and Human Services. She is currently a Marshall Scholar, having earned a Master’s degree in Public Policy from Cambridge University this past year and will pursue a Masters in Comparative Social Policy at Oxford University this year.

Granddaughters, Reese and Landry in Senate Chamber

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He also tries to pass on to future generations the values that have driven him throughout his career. “Part of it is faith based in that I think that I’m called to serve others and to serve the community in which I live. That’s also the philosophy that our bank has in all of the communities we serve, our culture is serving our communities, not just providing financial solutions. Financial solutions are a core part of the bank, but it’s always included serving on chamber boards, serving on the hospital board, and helping with school activities and local festivals.” He lives those values by volunteering around 20 times a year as an auctioneer at festivals and other community events, estimating that if you add them all up over the years, the events have probably raised between $10 to $20 million dollars. He also gives back through legislative service.

“I like the policy side and I like the legislative side, but one of the real joys is when a person is having an issue with a state agency or government and I can help them cut through the red tape to get answers. Being able to help people is a joy and a blessing.”

MILLENNIAL MINUTE

HUNTER STUCKEY

What do you enjoy the most about working as a lender?

This is my first role in banking, and I’ve had a fun transition. I was a city event director previously. The common thread between these roles for me is the reliability of being the Headshot: go-to person. I am fueled by hearing, “Oh, call Hunter, he’s the guy,” for any connection, and it’s what I’ve been aiming for in my move to banking. I want my customers of any age or background to know they should call me because I can help –not just with a loan, but if they want to call and ask about anything. That sort of relationship with my customers is what I’ve been striving for and will continue to grow over time.

Why is that sort of connection important?

Bank

Signature Bank of Arkansas Bentonville

For me, that’s my personality. I’m the kind of person who wants to enter a room, talk to everybody, and be in the know. From a banking perspective, that’s how we stay relevant.

With so many online options for the tech-savvy and younger generations, there’s a real Candid Photo: mentality of “Oh, I don’t have to talk to anybody, great!” That’s why relationships and connections are so important, because they keep us front of people and top of mind in general.

Why did you move from city event director to lender?

For many millennials, we watched our parents’ and grandparents’ generations pick a job, work with a single company for decades regardless of their evolving interests, and it was Lender just the job you kept forever -the end. In this day and age, especially with progressive technologies, interests are changing all the time. My college degree is in history. I thought I was going to be a teacher, and that was going to be it. Since then, I’ve had three unique jobs that were never related to the one before. Millennials are more willing to take a risk, to do something fresh and new and that’s exciting to us.

It’s becoming more common, not just in banking but at any company. Someone could be selling toilet paper one day and beer the next. Our generation is just more adaptable to whatever the challenge is that day.

Position

What keeps the younger generations anchored when it’s so easy to jump ship?

What keeps you anchored is the work around you. Many companies have done a really good job of making work desirable. It’s not just 8-5, you’re here and you go home.

Employers are doing a lot more to get people involved in the company. People understand if you need to go out during the day and take care of something. That’s becoming much less of an issue than in times past, when leaving during the day was a scandal. Modern companies are embracing the millennial desire for work-life balance, and are understanding and accepting of it. You see more PTO, allowing people to go out and manage other interests, while enabling them to come back and be ready to work.

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EMERGING LEADERS UPDATE In today’s era of technology tweets, emails, IMs, DMs, snaps, comments, and texts, can be sent to millions of “followers” around the world in seconds.

But what are these followers really following?

Family? Friends? Celebrities? A cause? This week’s news story? Cats chasing lasers? This just goes to show that there can be followers without a leader.

However, the one thing that all leaders have in common is that they have followers. Followers by choice, not merely people following out of fear, force, deception, or those solely in it for monetary gain but those that genuinely believe in someone and the path which they are taking them down.

There are many kinds of leaders that lead in endless ways. Leaders can be anything from a 5 Star General with the following of an entire army to a high school basketball team captain with their team behind them or an older sibling with only their younger brother and sister following them or even a young banker full of energy, fresh ideas, and the drive to make their company better.

General Douglas MacArthur said, “A true leader has the confidence to stand alone, the courage to make tough decisions, and the compassion to listen to the needs of others. He does not set out to be a leader but becomes one by the equality of his actions and the integrity of his intent.”.

So, what do I think makes a good leader?

A good leader is someone that has a strong moral compass. There are a lot of leaders whose motives are evil and self-serving and will do anything to advance their own personal interest. Good leaders are those who are working towards goal with a positive outcome for something other than themselves. They are not only guided by but also driven by their morals. Their values and ideals may evolve along their journey but always remain in focus of a greater good. They also will not put followers in a position that compromises their own values and morals.

A good leader knows their limitations and when to ask for help. They surround themselves with the best and brightest using their knowledge and skills. There is a reason that presidents, coaches, military leaders, even kings and queens have advisors and councils… no one knows everything.

Good leaders are someone that is willing to listen. They are willing to make time

to hear from their people and to get to know them on a personal basis. A good leader should be laying the ground work for their followers to become leaders. Without two-way communication and input followers will never learn how to do anything other than follow.

A good leader admits when they are wrong, takes credit for their failures, and gives credit for success.

Most of us have probably worked under someone who takes all the praise for accomplishments and points the finger of blame another direction when things do not go as planned. I don’t know if there is a quicker way to lose the faith of your following than blaming your team for mistakes that were your fault.

A good leader knows when it is their time to step down. Every leaders time comes to an end and the most effective transitions to those ends are made when it is the leader’s decision to step down and has been part of the succession planning.

A good leader is always watching for talent and encourages and helps to grow new leaders.

A good leader is someone who can make tough decisions and stand behind them. Leading is not about being popular. Some of the choices leaders are faced with will not make them friends but standing behind those choices and not flip flopping will keep the respect of their following.

A good leader has a vison, a plan, and the ability to adapt that plan. There must be a clear picture of the end goal and how it is going to be obtained.

However, there are almost always unforeseen obstacles along the way and the ability to adapt and continue towards the goal without falling apart or losing stride separates good leaders from the rest.

Ultimately leaders are measured by their followers and the lasting impact that is made on them. Long after they are gone, when their vision, values, and purpose are still alive and impacting new leaders and followers the greatest of leaders are defined.

Most all our organizations have young leaders just waiting for the opportunity to help their bank continue to grow and succeed. I hope you acknowledge them, let them know their value to your organization, and give them the opportunity to be great. The 2019 ELS Annual Leadership Conference is a great way to sharpen those leadership skills. I hope you will send your up and coming leaders to join peers from across the state at the Leadership Conference on October 22nd.

George Purvis | ELS President Cornerstone Bank, Eureka Springs

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ELS OFFICERS George Purvis, President

Cornerstone Bank, Eureka Springs

Evelyn Morris, Vice President First Financial Bank, El Dorado

Brandon Gentry, Secretary/Treasurer Cross County Bank, Wynne

ELS COUNCIL Brent Atkins, Hot Springs Ralph Bradbury, Little Rock Shawn Dunham, Rogers Derek Eckelhoff, Rogers Brock Ferguson, Jonesboro David Johnson, Trumann Bryce Larry, Rogers Lance Nutt, Fordyce Christopher Pledger, Little Rock Kyle Schlenker, Cherry Valley Sandy Starnes, Batesville

What is the Emerging Leaders Section?

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

Call Kami at 501.978.3614 to get involved!

Join #ARHometownBankers in Little Rock October 22-23 Be ready to connect, engage, and develop at the 2019 Arkansas Bankers Association Emerging Leaders Leadership Conference, October 22-23 at the Clinton Presidential Center in downtown Little Rock.

Beyond a slate of speakers, the event offers networking opportunities and the chance for young bankers to meet with peers, including an evening of bowling at Dust Bowl.

During the Leadership Conference, the ABA will be hosting a food drive for the Arkansas Foodbank to help them gear up for the holiday season in Arkansas. The winner of the Bill Holmes Leadership Award will also be announced.

DEVELOP CONNECT ENGAGE www.arkbankers.org/ABA/Leadership.aspx

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The Arkansas Banker Salute to Veterans tion, participated in air strikes against Libya (Operation El Dorado Canyon).

Patricia Walker Years of Service: 1977-1990 Countries / Wars Served in: U.S., Japan, United Kingdom Branch / Rank: United States Navy, Lieutenant Commander

What compelled you to serve your country?

Love of country, opportunities to live and travel in different places, career advancement opportunities.

What was the most rewarding experience of being in the military?

Making life long friends that shared my experience. Also, and most importantly, a feeling of accomplishment in service to my country.

Share one of your most memorable military experiences…

As an intelligence officer on staff of the Commander of US Naval Forces, Europe, I was a briefing officer to a flag officer (Navy 3- star, Vice Admiral) and as such gave intelligence briefings to visiting dignitaries including US Senators and members of the President’s cabinet. During this time, the US Navy’s 6th fleet, under the Admiral’s direc-

Following a previous military operation in the Mediterranean, I was a command center intelligence watch officer and as such, was able to listen in on a secure telephone call from President Reagan to the 6th fleet task force commander, Rear Admiral David Jeremiah, congratulating the Navy on their successful operation against PLO terrorists (Achille Lauro incident and intercept of Egypt Air flight).

How has your military experience shaped your career in banking?

I believe my military experience gave me a good work ethic, self-discipline, time management and public speaking skills, and the feeling that I can do anything if I put my mind to it. I had no prior banking experience and no finance courses in college. I started out as a commercial loan assistant, took every AIB course I could in spare time, and within a couple of years, I was promoted to loan officer.

What does patriotism mean to you?

As a child, my father’s job took our family overseas to live for several years. I don’t think I really thought about patriotism until I didn’t live here. I was fortunate that I had an opportunity to see a lot of the world at a young age. It made me realize that this is the greatest country in the world where opportunity exists for anyone seeking it. My father served in the Navy during World War II and although he never really talked about it very much, I knew that his service was important to him. At the age of 27 and even though I was a college graduate, I was in a dead -end job, and was restless and feeling unfulfilled.

I decided to apply for Navy Officer Candidate School and seek a career in the military. My service in the Navy gave me so much more insight into our country and how the U.S. truly is, as the Navy motto used to say, “a global force for good”. I really believe most Americans take our freedom for granted; those who have served in the military, know that this freedom sometime comes at a cost.

Simmons Bank Veterans Benefits At Simmons, we value those serving in the military and their entire families. To show our gratitude, we have benefits that help ease the transition of deployment and offer support during the care of a servicemember.

Our own Chairman and CEO Marty Casteel is a veteran who credits his four years of service in the U.S. Army for valuable life lessons. “The military teaches self-discipline, personal accountability and teamwork – important attributes for success in any career,” says Marty. “And Simmons has a long history of hiring veterans. In fact, some of the bank’s most successful leaders have been veterans.”

We are thankful for all who serve our country and honor them for their tremendous examples of dedication and sacrifice.

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Chasa Crockett Years of Service: 1992-2005 Countries / Wars Served in: Persian Gulf, Bosnian War, Operation Enduring Freedom and Operation Iraqi Freedom

John T. Hampton Years of Service: 1970 -1975 Countries / Wars Served in: USA Branch / Rank: Air Defense Artillery

What compelled you to serve your country? Please explain…

Three reasons I was compelled to serve my country were: My dad was in the military.

Branch / Rank: United States Army, E-5 Sergeant, Military Police Corp.

What compelled you to serve your country?

Please explain…

I wanted to do my part for my country and repay my debt for the freedoms I had growing up. I didn’t just want to exist, I wanted to make a difference. I wanted to live a life with trials and tribulations, experiences good and bad. My grandfather retired from the Navy in 1975. He was also a determining factor for my enlistment.

What was the most rewarding experience of being in the military?

I was in Army ROTC at Ouachita Baptist University.

I love my country.

What was the most rewarding experience of being in the military?

The most rewarding experience was learning how to shoot and maintain different types of weapons from guns to chemical weapons. I gained advance knowledge of each and enjoy going to gun ranges to stay proficient. Shooting is one of my favorite past times.

The most rewarding experience of being in the military was the leadership principles it taught me that I have carried with me and utilized throughout my life.

Share one of your most memorable military experiences…

The two most memorable military experiences were: The two years I served as Aide de Camp to a Major General. This man became a dear friend and mentor to me throughout my life. I experienced a great deal with him and learned many leadership skills from him.

I was able to travel a great deal and was fortunate to acquire a number of experiences and opportunities I may never have received otherwise.

How has your military experience shaped your career in banking?

The military shaped my career in banking by giving me leadership and organizational skills that I continue to use on a daily basis to run our company.

What does patriotism mean to you?

To me, patriotism is supporting and defending my country.

Personally, I consider it one of the most important things in my life behind God and my family.

Share one of your most memorable military experiences…

I would have to say the most memorable experience was trying out for a position with S.O.R.T (Special Operations Reaction Team). It was some of the most extensive training mentally, physically and emotionally that I have ever endured to this day but being accepted to the team was so worth the challenge.

How has your military experience shaped your career in banking?

I hold myself to a higher standard of conduct now than I did before serving in the Army. I learned professionalism, respect, discipline, punctuality, attention to detail and responsibility.

I use each of these attributes daily and am almost 14 years strong as a banker today.

What does patriotism mean to you?

Patriotism to me means to assist, protect and defend my country against all enemies foreign and domestic whether you are in the service or a civilian. Standing for our flag as it stands for us and for our freedom. I feel it is a responsibility of each individual to remember why the flag is our symbol of freedom.

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Simmons Bank Wraps Downtown Little Rock River Market Location in 3,000 Feet of LED Lights Stone Bank Honors Veteran of the Month Since 2012, Stone Bank in Mountain View has held a Veteran of the Month ceremony recognizing a U.S. Military Veteran. In that time more than 90 Vets have been recognized. The ceremony features the Stone County Honor Guard, a commemorative plaque, a customized blanket, other gifts and a meal prepared by bank employees. An ad is run in the local newspaper with the Veteran’s biography and photograph. Photos from the event are featured on the bank’s social media outlets.

Over the past seven years, 60 Veterans of World War Two and 32 from the Korean Conflict have been recognized at the monthly events. In January of each year Stone Bank publishes a calendar with a photo and biography of the previous year’s Veterans of the Month featured on every page.

On or about Veterans Day each November the bank hosts a Veterans Appreciation Day at the Stone Bank Pavilion. The 12 Veterans of the Month from that year are invited as special guests. Featured speakers have included U.S. Senator John Boozman, Congressman Rick Crawford and Supreme Court Justice Josephine Hart. In addition, the Mayor of Mountain View, the Stone County Judge, local members of the State Legislature, the State Coordinator for the Office of Veterans Affairs and other dignitaries are also invited to speak. In 2018 a representative of the French Consulate thanked American Veterans for coming to fight at France’s side in a commemoration of the Centennial of the World War One Armistice. Each of the honored Veterans is presented with an American Flag which was flown over the U.S. Capitol building by Congressman Crawford.

Simmons Bank’s new River Market location, formerly home to Acxiom, has been wrapped with more than 3,000 feet of LED lights. Now that approximately 350 associates are working in the building on a daily basis, these lights are one of the final phases of the company’s renovations to the space.

“Little Rock’s downtown is vibrant and alive, and we are thrilled to not only bring fresh jobs to central Arkansas, but also a bit of fun to the city’s nighttime skyline,” said Steve Massanelli, executive vice president and chief administrative officer for Simmons Bank. “Giving back to the communities we serve has been a cornerstone of our philosophy, and as we’ve grown and seen success, we want to help those communities become even more enjoyable places to live and work.”

The lights will be a reflection of what is going on in central Arkansas, changing throughout the seasons and celebrating various holidays – starting with our nation’s birthday with red, white and blue.

The lights can be individually controlled every five inches, making dynamic color-changing effects possible.

There are more than 16 million possible colors.

The lights are environmentally friendly and energy efficient.

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Thank You Veterans for Your Service Arkadelphia Brian Coston, Commercial Loan Officer, Southern Bancorp Bank Served 1984-2004 Haiti Mary Colleen Mason, Accounting Support, Southern Bancorp Bank Served 2013-Present United Kingdom, Stateside

Augusta Bill Patton, President, River Wind Bank Served 1971-1973 Thailand, Vietnam War

Batesville Dan Hart, National Sales Representative, First Community Bank Served 1985-1998 Gulf War (Stateside) J. Clint Howard, CRA Specialist, First Community Bank Served 1998-2018 Afghanistan, Iraq, Qatar, England, Crete, Kaneda, Curacao, Cuba, Canada, & across the U.S. Craig Jarvis, VP of Information Technology, First Community Bank Dr. Lackey Moody, Board of Directors, The Citizens Bank Served 1968-1970 Vietnam Helen Shaw, Corporate Security Officer/Facilities Manager, The Citizens Bank Served 1988-1992 Italy, Saudi Arabia, Gulf War Justin Teague, Credit Analyst, The Citizens Bank Served 2010-2014 Afghanistan, Operation Enduring Freedom Jennifer Wyatt, IT Administrative Supervisor, First Community Bank Served 2001-2005 Operation Iraq Freedom, Operation Enduring Freedom (Stateside)

Beebe Stephanie Weithman, CSR, First Security Bank Served 1989-2000 Operation Desert Shield & Desert Storm

Bentonville Bob Craig, LMS Database Administrator, Arvest Bank Served 2005-2010 United States, Afghanistan Sonny Delgado, Community President, Integrity First Bank Served 1992-1998 Bermuda & Stateside Chris Jones, Senior Vice President of Commercial Lending, First National Bank of Fort Smith Arkansas Air National Guard Mike Kemper, Mortgage Production Assistant, Arvest Bank Served 1995-2009 Korea (two tours), Iraq, Afghanistan Cory Merchant, Information Security Analyst, Arvest Bank Served 2008-present United States Charles Patterson, Training Specialist, Arvest Bank Served 2008-2015 United States Dollie Stewart, Skip Tracing Specialist, Arvest Bank Served 1986-1994 United States Matthew Wright, Systems Operator 1, Arvest Bank Served 2002-2012 England, Iraq

Blytheville Monte Hodges, Commercial Loan Officer Served 1990-1999 Stateside

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Bryant

El Dorado

Humberto Zalles, Teller/CSR, First Security Bank Served 2003-2009 Afghanistan, Operation Enduring Freedom

Cabot Jami Boan, Teller Supervisor, Centennial Bank Served 2002-2006; 2008-2009 Operation Iraqi Freedom

Conway William Barbour, Tech Support Technician, Centennial Bank Served 2011-2016 Sheppard Air Force Base, Little Rock Air Force Base Brad Beck, Facilities Manager, First Security Bank Served 1982-2002 Stateside, Army National Guard Sharon Bushong, Credit Operations Manager Served 1996- 2004 US Army, Stateside Bobby Cole, Maintenance Supervisor Served 1971 US Army, Vietnam Jerry Cooper, Courier, First Security Bank Served 1969-1971 Vietnam Dustin Jones, Information Technology Director Served 1990-1997 US Navy, Persian Gulf War Kaleb Keller, Teller, First Security Bank Served 20014-2018 Marine Corps, Okinawa, Japan Jon Surginer, Mortgage Quality Control Manager Served 1996- 2017 US Air Force, Saudi Arabia, Iraq, Afghanistan Bret Taylor, Loan Servicing Specialist Served 1988- 1992 US Army, South Korea Lisa Whitt, Personnel Associate Served 1984-1990 US Army, Gulf War

Wayne Goode, Physical Security Officer, First Financial Bank Served 1987- 2010 Gulf War Michael Goodin, Loan Review Analyst, First Financial Bank Served 2008- Present Operation Enduring Freedom Ardella Lee, Loan Operations Officer, Southern Bancorp Bank Served 1984-1992 Germany Don Sherman, Director of Internal Audit, First Financial Bank Served 1987- 1991 Operation Desert Storm

Fayetteville Roy Brinkley, IT Systems Administrator, Signature Bank of Arkansas Served 1989-1991 Saudi Arabia, Iraq, Kuwait, Desert Shield, Desert Storm Richard “Dick� Kehoe, VP of Account Managers, Priority Bank Served 1966-1970 Vietnam Dr. H.D. McCarty, Director Emeritus, Priority Bank Served 1955-1988 Cold War Nick Wahlquist, VP Consumer Market Leader, Bank of America Served 2012- 2017 Afghanistan, Korea Joshua Wheatley, IT Director / Information Security Officer, Signature Bank of Arkansas Served 2001-Present Operation Iraqi Freedom

Fort Smith David Burton, AVP/Commercial Lending, First National Bank of Fort Smith Served 1989-1993 Desert Storm Mont Echols, Executive Vice President & Chairman of the Board, First National Bank of Fort Smith

Danville Robin Allen, AVP/Executive Assistant, Chambers Bank Served 1981-1989 US Marine Corp

Malea Hendrickson, Branch Manager, First National Bank of Fort Smith Served 2007-2012 Stateside

Michael Brannon, SVP, Chambers Bank Served 1977-1981 USS Pyro / U.S. 7th Fleet

Cindy Horine, Teller, First National Bank of Fort Smith Served 1979-1982 Stateside

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Thank You Veterans for Your Service Sam Jordan, VP/IT Support Systems, First National Bank of Fort Smith Served 1972-1976 Vietnam Era Bailey Julian, Purchasing/Mail Room Coordinator, First National Bank of Fort Smith Served 2004-2008 Germany, Operation Iraqi Freedom Matt Liebal, Branch Manager, First National Bank of Fort Smith Served 2007-Present Iraqi Campaign, Operation New Dawn, Currently Serving in Arkansas National Guard Brian Reed, Statement Mail Clerk, First National Bank of Fort Smith Served 1992-1996 Israel, Italy, France, Greece, Bahamas, Malta, Spain, Ukraine Ron Singleterry, Server IT Officer, First National Bank of Fort Smith Served 1979-1989 U.S. Navy, Multiple Countries

Greenwood Ed Wilkinson, President, Farmers Bank Served 1991-2010 Bahrain, Guam, Japan

Heber Springs Patrick Brandimore, Teller, First State Bank Served 1968- 1970 US Army, Germany

Helena Joe Tom Cunningham, Chairman, Partners Bank Served 1961- 1967 Stateside T. Larry Delk, Director, Helena National Bank Served 1959-1962 Stateside June Johnson, Administrative Specialist, Helena National Bank Served 1987-1991 Stateside Benton Pittman, Collateral Risk Management Officer, Partners Bank Served 1985-2005 Stateside, USS Inchon Charles Roscopf, Director, Helena National Bank (Deceased) Served 1946-1948 WWII Jeffrey Steele, Vice President, Helena National Bank Served 1977-1995 Germany, Turkey, United States

Hot Springs Rafael Martinez, AVP/Commercial Lending, Relyance Bank Served 2000-2007 Operation Iraqi Freedom, Purple Heart Recipient

Jacksonville Jimmie DeLoach, City President, Southern Bancorp Served 1989- 2017 US Airforce Reserves, Stateside Ernest LaPaglia, LAN Computer Operator, First Arkansas Bank & Trust Served 1993-2013 Operation Iraqi Freedom, Operation Enduring Freedom David Wilson, Senior Network Administrator, First Arkansas Bank & Trust Served 1985-2005 Desert Shield, Desert Storm, Operation Iraqi Freedom, Global War on Terror

Jonesboro Wayne F. Bond, SVP/Lending Manager, Simmons Bank Served 1971-1978 Arkansas Army National Guard, 875th Engineering Battalion Jay Clevenger, Regional Retail Leader, Centennial Bank Served 1982- 1987 US Navy, USS Cleveland, Pacific Fleet Scott Kiesling, Credit Administration Specialist, Simmons Bank Served 1969-1972 Vietnam Era Ronald McDaniel, SVP/Financial Advisor I, Simmons Bank Served 1972-1974 Vietnam Era/Stateside

Little Rock Robert Boardman, Simmons Bank Larry Brown, EVP/CCO, One Bank & Trust Served 1971-1972 Brent Dugas, Mortgage Loan Officer, First Financial Mortgage Served 2001- 2006 US Airforce, Stateside Curtis Fowler, CSR/Teller, First Security Bank Served 2001-2007 Operation Enduring Freedom, Operation Iraqi Freedom, Italy, Stateside ShaRhonda Fox, Customer Support Specialist I, Simmons Bank Served 2010-Present Stateside Marcus Guinn, EVP, Arvest Bank Served 1981-2003 First Sergeant, Stateside

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Little Rock

Magnolia

Harry Hastings, Jr., Emeritus Chairman of the Board, Eagle Bank Served in World War II Germany

Bob Burns, Chairman, Farmers Bank & Trust Served 1966-1988 4th Infantry Division, Vietnam; awarded Bronze Star, Presidential Citation, Cross of Gallantry & Distinguished Service Medal

Quintessa D. Jackson, Teller, Simmons Bank Served 2013-Present Stateside

Charles Fowler, Sr., Facilities Administration, Peoples Bank Served 1960-1985 Vietnam, Korea, Germany, Italy, Korea

Paul Kanneman, Simmons Bank

Bobby Heinze, Information Security Officer, Peoples Bank Served 2000-2008 Operation Iraqi Freedom

Chris Klein, Trust & Wealth Management Assistant, First Security Bank Served 2006-2010 Stateside Raymond Long, Simmons Bank Linda McDaniel, Consumer Loan Underwriter, Simmons Bank Served Served 1972-1975 Vietnam Era/Stateside Scott Rawls, IT Analyst IV, Simmons Bank Served 1981-2011 Gulf War, Operation Iraqi Freedom, Egypt, Germany Devin Redding, Teller, Eagle Bank Served 2013-Present Specialist, Army National Guard Kaylea Riddick, Teller, Centennial Bank Served 2013- 2017 US Army, Stateside Boyd Rothwell, SVP, First National Bankers Bank Served 1968-1970 Vietnam Bruce Upton, EVP/Chief Operations & Technology Officer, Stone Bank Served 1979-1999 Saudi Arabia, Kuwait, Iraq, Kosovo, Bosnia, Panama, Honduras, El Salvador, Nicaragua, Germany, Italy, Japan, Korea, Australia, Philippines, England, Turkey, Greece, Egypt Will Yarbrough, Customer Service Rep., Stone Bank Served 2014-Present Stateside

Lonoke Angie Gorbet, SVP Lending/Human Resources, First State Bank Served 1981-1987 Stateside Jacob Ward, Data Processing Clerk, First State Bank Served 2012-Present Afghanistan, Operation Enduring Freedom Rick Worrell, AVP/CTO, First State Bank Served 1992-2013 Germany, Turkey, Qatar, Afghanistan and Iraq Wars

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Justin Moody, Customer Service Specialist, Peoples Bank Served 2015-Present

Mammoth Spring Edward L. Stahlman, VP/Commercial Loan Officer I, Simmons Bank Served 1968-1969, 1972-1985 Southeast Asia, Stateside

McGehee Charles Lloyd, Loan Officer, McGehee Bank Served 1964-1995 Panama, Operation Just Cause James Lyle, Network Administrator/ISO, McGehee Bank Served 2000-2008 Iraq, Operation Iraqi Freedom

Mena JaneĂŠ Sweeney, CIO/SVP, Union Bank of Mena Served 1987-1992 Japan, Korea, Philippines, Australia, Bahrain, Desert Shield, Desert Storm, Persian Gulf War

Mountain Home Chester Kowalksi, Network Administrator, Integrity First Bank Served 1984-1988 Japan, South Korea Stephen Yates, VP Loan Officer, First Community Bank

Piggott Josh Hicks, Loan Officer, Piggott State Bank Served 2006-2014 Afghanistan and Iraq: Operation Enduring Freedom, Operation Iraqi Freedom

Thank You Veterans for Your Service Pine Bluff James P. Allen, Jr., Computer Operator II, Simmons Bank Served 1981-1984 Greg T. Berry, Trust Specialist III and Officer, Simmons Bank Served 1974-1980 Heather J. Berry, Assistant Branch Manager, Simmons Bank Served 1995-1997 Stateside Deborah F. Brown, Computer Operator I, Simmons Bank Served 1977-1981 Japan, Stateside Bennie J. Butler, Facilities Maintenance Technician, Simmons Bank Served 1950-1956 Korea Aaron Cagle, Simmons Bank Marty D. Casteel, EVP, Chairman & CEO, Simmons Bank Served 1974-1978 Vietnam Era/Stateside Dennis Fernandez, Simmons Bank Janice Fuller, Switchboard Operator, Relyance Bank Served 1983-1993 Linda Howell, Bank Operations Specialist I, Simmons Bank Served 1974-1977 Vietnam Era Christopher Huntley, VP and Portfolio Manager, Simmons Bank Served 2000-2006 Operation Iraqi Freedom: Iraq, Kuwait, Italy; Operation Joint Forge (NATO): Former Yugoslavia James E. Jackson, Sr., Mail Services Clerk II, Simmons Bank Served 1968-1970 South Asia Richard Metcalf, EVP/Wealth Management, Relyance Bank Charles “Tony” Ogles, IT Support Specialist III, Simmons Bank Served 1996-2000 East Timor Gekisha L. Shaw, Customer Call Center Specialist I, Simmons Bank Served 2003-2005 Arkansas National Guard, Stateside Phillip Smith, VP/Consumer Lending, Relyance Bank Terry M. Smith, Facilities Maintenance Technician, Simmons Bank Served 1957-1962 Stateside

Wilbert T. Thornton, Facilities Maintenance Technician I, Simmons Bank Served 1960-1966 Turkey Charlie Whorton, Risk Management Specialist I, Simmons Bank Served 2005-2011 Japan, South Korean Territorial Waters, Singapore, Thailand, Cambodia, Philippines, Australia, Libyan Territorial Waters, Italy

Pocahontas Bryan Dalton, Loan Officer, River Bank Served 2007-2011 Operation Enduring Freedom, Operation Iraqi Freedom, Operation New Dawn

Rogers Sheldon Duncan, Teller, First National Bank of Fort Smith Served 2010-2015 Operation Enduring Freedom Mike Fair, Vice President/IT, First Western Bank Robert Frierson, Teller/CSR, First Security Bank Served 2009-2012 Operation Enduring Freedom John T. Hampton, Chairman/CEO, First Western Bank Served 1970 -1975 Air Defense Artillery USA Patricia Walker, SBA Specialist, United Bank Served 1977- 1990 US Navy, Stateside, Japan, United Kingdom

Russellville Johnny Morgan, Director & Former President, First State Bank Served 1972-1974 Vietnam Robert Taylor, Retired Served 1969-1972 Vietnam

Searcy Terry “Butch” Boyette, IT System Engineer, First Security Bank Served 1989- 1993 US Army Melvin Brown, Statewide Supplies, First Security Bank Served 1962-1966, 1977-2003 Vietnam James Dixon, Systems Engineer, First Security Bank Served 1988-1994

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Searcy Sam Dorton, IT Help Desk, First Security Bank Served 2008-2009 Operation Iraqi Freedom Paul Ording, II, Fed Line Processor, First Security Bank Served 1990- 2013 US Air Force, Kuwait, Germany, Saudi Arabi, Oman, Operation Desert Storm, Allied Force, Iraqi Freedom, Enduring Freedom, Global War on Terrorism Henry Pool, Technology Center Bookkeeping Department, First Security Bank Served 1962-1965 Vietnam Daniel Selby, Teller, First Security Bank Served 2012- 2019 Army National Guard, Honduras, Guatemala, El Salvador Mike Vinson, Human Resources Generalist, First Security Bank Served 1992-2017 Italy, Cuba, Japan; Operation Enduring Freedom, Operation Iraqi Freedom, Operation New Dawn

Sherwood Darryl Goodman, Branch Manager, First Arkansas Bank & Trust Served 1993-2016 Iraq, Afghanistan, Bosnia

Springdale Chasa Crockett, Head Teller, First Security Bank Served 1992-2005 US Army, Persian Gulf, Operation Iraqi Freedom, Bosnian War Tim Hargis, Vice President, First Security Bank Served 1971-1973 Vietnam Don Gibson, CEO, Legacy National Bank Served 1970-1971, followed by six years of Reserve Service Glen Plumlee, SVP/General Lending, Legacy National Bank Served 1972 Mike P. Taylor, Facilities Manager, First Security Bank Served 1966-1988 Taiwan, Thailand, Vietnam, Greece, Germany, Turkey, Zaire, Senegal & others

Tontitown Cody Gollott, Branch Manager, Centennial Bank Served 2005- 2019 US Army Reserves, Operation Ulchi, Freedom Guardian, South Korea

Warren Gerald Dean Burton, Director, Warren Bank & Trust Served 1945-1946 WWII, South Pacific

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Carlton Davis, Director, Warren Bank & Trust Served 1964-1984 RUN 1969, Germany

West Helena Janice Williams, Branch Manager, Southern Bancorp Bank Served 1997-Present Guantanamo Bay, Afghanistan

West Memphis Murphy Smith, SVP/Marketing, Fidelity National Bank Served 1970-1972 Stateside

Out of State Locations Jon Campbell, VP Encompass Administrator, Mortgage, Eagle Bank & Trust, Florida Served 1990-1995 Stateside, USS Enterprise & Desert Shield Jason Hammons, Market President, Simmons Bank, Dallas, TX Served 1992-2001 Mediterranean, European, Atlantic Theatres Joseph Herrera, AVP/Compliance Specialist III, Simmons Bank, Stillwater, OK Served 2006-2010 Afghanistan, Operation Enduring Freedom Christopher Huntley, VP and Portfolio Manager, Simmons Bank, Springfield, MO Served 2000-2006 Operation Iraqi Freedom: Iraq, Kuwait, Italy; Operation Joint Forge (NATO): Former Yugoslavia Tarae Phelps, Call Center Specialist, Simmons Bank, Martin, TN Served 2005-2008 Joe Renner, SVP, Simmons Bank, Springfield, MO Served 1981-2011 Gulf War, Operation Iraqi Freedom, Egypt, Germany Charles Stanton, VP/Commercial Banker, Simmons Bank, Tulsa, OK Served 1991-1997 US Army Chris Stephens, VP/Treasury Management, Simmons Bank, Dallas, TX Served 1991-1994 Desert Storm Christopher A. Wallace, VP/Regional SBA Banker, Simmons Bank, Franklin TN Served 1998-Current Duty Stateside David York, Vice Chairman, Tulsa Market, Simmons Bank, Tulsa, OK Served 1966-1971 Vietnam

Supporting our military, their spouses and families America’s military veterans, service members and families are a pivotal part of our communities. At Bank of America, we have a longstanding commitment to these brave men and women as they transition from military service to civilian life. We demonstrate this through financial education, volunteerism and partnering with military nonprofits across the country to help veterans face the unique challenges they might experience at home.

We also do this through dedicated hiring and learning resources to help ensure those we hire have stable, longlasting careers.

Supporting Our Military, Their Spouses and Families

America’s military veterans, service members and families are a pivotal part of our communities. At Bank of America, we have a longstanding commitment to these brave men and women as they transition from military service to civilian life. We demonstrate this • Our dedicated Acquisition through financial education, volunteerism and partnering with military nonprofits across the Military country toTalent help veterans face theteam unique partners with key strategic organizations andwe hire challenges they might experience at home.We also do this through dedicated hiring and learning resources to help ensure those conferences, including but not limited to: Academy have stable, long-lasting careers.

Women, Service Academy Career Conference, RecruitMilitary, the Military Spouse Employment • Our dedicated Military Talent Acquisition team partners with Partnership, MBA Veterans Conference, Military keyOfficers strategic organizations and conferences, including Job Opportunities Conference andbut thenot limited Academy Women, Academy Conference, U.S. to: Chamber’s Hiring Service Our Heroes, toCareer identify RecruitMilitary, Military Spouse Employment Partnership, and recruitthe veterans.

As part of a comprehensive MBA Veterans Conference, Military Job Opportunities veteran hiring strategy we Officers participate in more than 50 military-specific career Hiring eventsOur every year.

Conference and the U.S. Chamber’s Heroes, to identify and recruit veterans.

As part of and a comprehensive veteran hiring • Our Military Transition Career website, strategy we participate in more than 50 military-specific career militarytransition.bankofamerica.com, is designed events every year. and their spouses as they look for veterans

Recruiting, development, support and engagement • In 2012, we created our Military Affairs team to coordinate efforts across the company — from hiring to financial products, philanthropy and public policy — to help veterans reintegrate into the Recruiting, development, support and engagement civilian workforce.

• •InWe 2012, we created our Military teamand to coordinate employ thousands of Affairs veterans military spouses.

Building on that, since 2014, we’veproducts, efforts across the company — from hiring to financial hired 8,000+ members toward hitting our into philanthropy andservice public policy — to help veterans reintegrate commitment of hiring an additional 10,000 veterans, the civilian workforce.

to make the transition to civilian life. The site

• Our Military Transition and Career website, militarytransition. includes ongoing learning created in partnership bankofamerica.com, is designed foraction veteranstimeline and their to spouses with Degreed.com, and an help as they look to make the transition to civilian life.

The site includes veterans track priorities and objectives starting ongoing learningbefore createdthey in partnership Degreed.com, and 18 months plan to with separate from the whether it’sveterans for school, entrepreneurship anmilitary, action timeline to help track priorities and objectives or employment.

Ourthey military efforts for starting 18 months before plan toeducation separate from the military, employees and transitioning service membersOur have whether it’s for school, entrepreneurship or employment. received external recognition including the 2016 military education efforts for employees and transitioning service Brandon Hall Gold Award for Excellence in Talent members have received external recognition including the 2016 Acquisition.

Brandon Hall Gold Award for Excellence in Talent Acquisition.

guard and reservists. We have a number of programs

• We employ thousands of veterans and military spouses. Building and resources in place to help them transition to corporate and grow their career with us. toward on that, sincelife 2014, we’ve hired 8,000+ service members our commitment of spouses hiring an additional • hitting Veterans and military can face10,000 toughveterans, guard and reservists.

We have a number of programs and resources challenges during extended deployments and in place to help them transition to corporate life and grow their Permanent Change of Station moves. Our Life Event Services helps veteran employees navigate career with team us.

significant life events by helping them connect

• Veterans and military spouses canconfidential face tough challenges during to community resources, counseling, extended Permanent Changeand of Station moves. childcaredeployments and otherand referral programs services.

Our Life Event Services team helps veteran employees navigate • Our Military Support & Assistance Group (MSAG) significant life events by helping them connect to community employee network provides development resources, confidential counseling, childcare and other referral opportunities for military employees, their families programs and services. and friends through networking, mentoring,

volunteer events and information forums. MSAG has

• Our Military Support & Assistance Group (MSAG) employee network 40 chapters and more than 10,000 members. provides development opportunities for military employees, their families and friends through networking, mentoring, volunteer events and information forums. MSAG has 40 chapters and more than 10,000 members.

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provided financial services to the U.S. We’ve We’ve provided financial services to the U.S. military military since since 19201920

Community outreach outreach and partnerships .

Community andnational national partnerships.

• Since 2009, we’ve provided more than $21 million

• We operate military banking facilities overseas in • We operate banking facilities overseas in 10 countries, 10 military countries, including 62 financial centers and including 62 financial centers and 275 ATMs, managed 275 ATMs, managed through a contract withthrough the a Department of Defense. contract with the Department of Defense.

• Our Enterprise Military Benefits Unit (877.345.0693) • Our Enterprise Military Benefits Unit (877.345.0693) provides provides dedicated assistance on all Servicemembers dedicated assistance on(SCRA) all Servicemembers Civilservicing Relief Actof(SCRA) Civil Relief Act questions and questions and servicing of SCRA-qualified products benefits SCRA-qualified products and benefits forand customers on active duty. duty. for customers on active • We waive the monthly maintenance fee and overdraft

• We waive the monthly maintenance fee and overdraft fees for fees for deposit accounts. We also offer militarydepositthemed accounts.

We alsocredit offer militarythemed affinity credit and affinity and debit cards.

Additionally, debit cards.

Additionally, all SCRA-eligible cards, consumer vehicle all SCRA-eligible cards, consumer vehicle and deposit accounts receive special rates extended for six and deposit accounts receive special rates extended for six months months after a customer’s SCRA-eligible period ends. after a customer’s SCRA-eligible period ends.

• We’re intent on supporting people who have helped

• We’re intent on supporting peopleInwho have maintain maintain our freedom.

2018, wehelped announced a $20 millionInVeteran Lending Program our freedom.

2018, weEntrepreneur announced a $20 million Veteranthat connects U.S. Program military veteran business ownersveteran with Entrepreneur Lending that connects U.S. military affordable capital to help kick-start and grow their business owners with affordable capital to help kick-start and grow businesses. their businesses.

One of Military Times Best for Vets: Employers 2018

Named Euromoney’s 2018 World’s Best Bank for Diversity and Inclusion

Learn more: www.bankofamerica.com/militarysupport

November 14, 2019 10:00 a.m. – 12:00 p.m.

• We’ve donated residential • We’ve donated moremore thanthan 2,3002,300 residential properties to military properties to military and veteran support and veteran support organizations since 2012. organizations since 2012.

• We partner withwith national nonprofit organizations like Student • We partner national nonprofit organizations like Student Veterans America, USO,Partnership, America’s Institute Veterans of America, USO,of America’s Warrior Partnership, for Veterans forWarrior Veterans and MilitaryInstitute Families, Team Rubicon,and and Team Red, Military Families, Team Rubicon, and Team Red, White & Blue and more, as well as local veteran service White & Blue and more, as well as local veteran nonprofits across the nonprofits nation to address of to military families. service acrossthe theneeds nation address the

needs of military families.

• We’ve included content on BetterMoneyHabits.com specifically • We’ve included content on BetterMoneyHabits. to help military service members and their families make the com specifically to help military service members transition tofamilies civilian life.

Modules include: “Understanding civilian and their make the transition to civilian retirement plans,include: ” “How to“Understanding get the most from the GI Bill,” a financial life. Modules civilian retirement plans,” “How to getmembers, the mostand from themore.

GI checklist for transitioning military much

Bill,” a financial checklist for transitioning military members, and much more.

Learn more: www.bankofamerica.com/militarysupport

MSAG recognized by the Association of ERGs & Councils as a Top 25 U.S. Employee Resource Group in 2017

ABA PROFESSIONAL DEVELOPMENT WEBINAR

Lending to Active Duty Servicemembers

• Since 2009, we’ve provided more than $21 million in financial in financial support to military nonprofits. Our support to military nonprofits.

Ourthan employees employees contributed more 50,000contributed volunteer more hours at military events than 50,000 volunteer hoursin at2018. military events in 2018.

Recognized by Student Veterans of America in 2017 as one of their programmatic partners of the year

Covered Topics The maximum rate of interest that may be assessed against an existing extension of credit under the SCRA; Other protections available to active duty Servicemembers under the SCRA including prohibitions against default judgment, repossession and foreclosure; A look at what’s included in and the proper way to calculate the military annual percentage rate (MAPR) under the MLA; Additional disclosure requirements associated with the MLA; and Product limitations and restrictions imposed by the MLA.

Call Kami at 501.978.3614 to register!

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2013 Secretary of Defense Employer Support Freedom Award winner

Vets Denied VA Home Loans if They Work with Cannabis Military.com | By Patricia Kime The Department of Veterans Affairs is denying home loans to veterans if they work in the cannabis industry, according to a letter sent May 23 to VA Secretary Robert Wilkie from Rep. Katherine Clark, D-Massachusetts, and 20 other members of Congress.

The lawmakers want answers as to why one of Clark’s constituents and other veterans were rejected for VA home loans after citing their income sources as marijuana cultivation, sales or related services in states where it is legal.

In an article first reported by Roll Call, Clark said she became aware of an unpublished VA policy that considers work in the industry as not “stable and reliable” enough to be considered as home loan-qualifying income.

In a statement provided to Military.com, Clark said the VA needs to “catch up with the times and recognize the growing role of the cannabis economy that employs over 200,000 Americans.”

“Our veterans should not be penalized or denied the benefits they have earned because they are working in a budding industry,” she said.

Thirty-four states, the District of Columbia, Guam, Puerto Rico and the U.S. Virgin Islands now have some variation of medical marijuana programs, while a dozen other states allow cannabidiol that is low in tetrahydrocannabinol -- or THC, the psychoactive component of pot that makes a user high — for medicinal purposes.

Under the Servicemen’s Readjustment Act of 1944, also known as the GI Bill, eligible veterans can apply for home loans from private lenders with a guarantee from the VA that usually garners more favorable interest

rates and terms than can be found on the market.

But according to Clark, the VA denied a veteran’s application because “approving it would risk prosecution by U.S. Department of Justice under anti-money laundering statutes.”

Marijuana remains a Schedule 1 drug, illegal under federal law.

“The ambiguity under which the cannabis industry operates is unique, and we fully understand the VA’s resulting aversion to legal and financial risk,” lawmakers wrote in their letter. However, they added, “in recent years, the Department of Justice has substantially narrowed its prosecutorial priorities in this area, and Congress has taken action to prevent federal interference with the implementation of state cannabis laws.”

The lawmakers asked the VA to provide details on its loan guarantee programs and include information about policies regarding veterans’ eligibility for loans or other benefits if they are employed by the cannabis industry.

They gave the VA a 30-day deadline, with the response due June 22.

“A substantial number of veterans earn their livelihoods in this industry and, in coming years, that number is likely to further rise.

The VA must acknowledge this reality and ensure veterans who work in this sector are able to clearly understand and can equitably access the benefits they’ve earned,” the letter states.

Twenty Democrats and one Republican, Rep. Don Young of Alaska, signed the correspondence. Zack Brown, Young’s press secretary, said the congressman signed the

Morris Denton looks over marijuana plants in a flowering room at Compassionate Cultivation, a licensed medical cannabis cultivator and dispensary, in Manchaca, Texas. (AP Photo/Eric Gay) letter “because of his strong support for veterans as well as his belief that cannabis policy is a states’ rights issue.”

“No veteran should be denied the benefits they’ve earned solely based on their participation in their state’s legal cannabis programs, and Congressman Young wants details and clarification from the VA on how they plan to move forward,” Brown said.

The VA did not respond to a request for policy clarification or comment.

Patricia Kime can be reached at Patricia.

Kime@Military.com. Follow her on Twitter at @patriciakime.

This article was reprinted with permission from the author.

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QUARTERLY FIREWALL AUDITS: WHAT DO I NEED TO DO? Meeting The Baseline Requirement

by Jeff Dice Information Security Consultant- SBS CyberSecurity, LLC When financial institutions are working on their FFIEC Cybersecurity Assessment, there are a few Baseline declarative statements that everyone seems to struggle with. One of the most common controls that causes confusion is “Firewall Rules are audited or verified at least quarterly.” What does this control mean, and what should you do to meet this baseline requirement?

FFIEC CAT: Firewall Rules Audited or Verified At Least Quarterly The FFIEC Cybersecurity Assessment Tool (CAT) was originally released in June of 2015 and updated in May of 2017. It establishes a single process for banks to identify their Cybersecurity Risk and Maturity level. The Quarterly Firewall Audit control is a Detective control that falls under Domain 3: Cybersecurity Controls. It is considered a Baseline standard, meaning that if you aren’t able to answer “Yes,” you will not meet the Baseline requirements for Domain 3. Additionally, the Quarterly Firewall Audit control ties back to the FFIEC Information Security Booklet, Page 46.

Unfortunately, the Information Security Booklet doesn’t give us much detail. It simply states, “Security operations activities can include the following: Security Software and Device Management (e.g., maintaining the signatures on signature-based devices and firewall rules).” There is no other guidance or direction in the booklet, which furthers the confusion around this control.

Where to Start To better understand how to assess our firewalls, let’s start by asking a few basic questions. If you are unsure how to answer any of these questions, please make finding the answer a top priority. Work with your vendor(s) or IT department to answer these questions:

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Do you have any idea what is happening on your firewall?

Do you receive reports on a regular basis from the firewall?

Who is administering your firewall, and do you have any control over this process?

What logs does your firewall generate, and how can you review those logs?

3. Look for rules that seem out of place or odd.

We’re talking about rules that are clearly out of place, like a rule allowing all traffic from a Russian IP address. If you don’t know enough about firewall rules to identify outof-place rules, talk with a vendor or your IT department.

4. Ensure you know why specific external IPs are being allowed by firewall rules. Resolve those specific IPs to be sure they are appropriate if they are being allowed.

5. Look for hard coded passwords in rules. If there are passwords hard coded into firewalls rules, is there a need for such a rule?

Could hard coding passwords be avoided? If not, has the password ever changed?

Things to Look for in Firewall Rules Next, how do we audit firewall rules? If you only take one message from this article, let it be this: “Do something.” Start with some basic ideas and work forward from there. Below are six ideas to get you started: 1. Evaluate your existing firewall change management procedures, ensuring all rule changes are logged, and procedures for making changes to the firewall rules or settings are adequate. Firewall change management procedures are especially important if your firewall is managed by a third party.

2. Look for changes in current firewall rules vs. previous firewall rules. Has anything changed? If so, why? Were these changes tracked (see above)?

6. Evaluate open ports and ensure there is a business need for those ports. Sometimes, certain communications require the use of specific ports in firewall rules. Is the need for these communications still applicable and current? Has the organization documented the need for these open ports and accepted the risk? If the open port is no longer needed, can the rule be removed?

You don’t have to have a complete knowledge of firewall configurations and reports to meet this Baseline CAT control, but you must develop a process for reviewing your firewall rules and/or having them tested. It’s nearly impossible to understand what is abnormal if you aren’t aware of what is normal. Once you’ve established normal, the key is to ensure you act on any deviations within the reports.

For more information, contact David Edwards at 913-225-6382 or david.edwards@sbscyber.com.

SBS delivers unique, turnkey solutions tailored to each client’s needs, including risk management solutions, consulting, auditing, and education.

Learn more at www.sbscyber.com.

Operational Assessments: Spring Cleaning Your Bank

by Jacque Wills Marie Kondo, the Netflix queen of “Tidying Up with Marie Kondo” and the author of The New York Times best-seller “The Life-Changing Magic of Tidying Up,” has made a killing selling a simpler, de-cluttered way of life. Her organizational strategies impact practically everyone: women, men, corporations… references to her method pop up everywhere.

She asserts that tidying up is life-changing. She may be right, but how does a tidy sock drawer affect you? You’re trying to compete in the everchallenging banking industry, and your bank has a cash drawer, not a sock drawer!

The competitive nature of banking forces community banks to seek every opportunity to perform better. Stripping down to essentials to become more efficient is just as applicable in banking as anywhere else. A bank’s job is to maximize shareholder return by building and serving a customer base while staying within the framework set up by the regulators.

Those are three tough masters. The regulators keep changing the rules and requirements.

Customer needs morph and expand, requiring continual adjustments in strategy and technology. And shareholder expectations certainly aren’t dropping.

Community banks thrive when they are operationally efficient. Which means it’s time to purge the clutter and tidy up the bank.

The technical term for this is Operational Assessment, and it addresses all operational areas of the bank: lending, deposits and retail. It may not sound sexy, but the practice leads to a more focused business model, a strong infrastructure, streamlined processes, and maximized utilization of your people and technology, resulting in happier, stickier customers, empowered employees, readiness for growth and expansion, an improved efficiency ratio, reduced expenses and increased income.

When your bank is inefficient, it impacts everything. And it happens organically in the life cycle of a bank. Numerous factors play into it, but it boils down to infrastructure: people, processes and technology.

People: Community banks are aging along with their staff, and legacy employees may

be clinging to slow, manual, high-touch processes. Does this mean purging staff?

No. It means fully utilizing existing staff by means of re-allocation or job role expansion.

For example, train employees to become “universal bankers” with diverse skills sets which fully address increased customer expectations.

Plan the fix based on consultant recommendations, devise an implementation plan, establish priorities and form an action team.

Processes: Not all existing processes are bad, but with technology and automation potential, many manual steps can be eliminated. Automate compliance and documentation as much as possible. Reduce paperwork. Utilize imaging. Reduce touches.

Take a hard look at each step in every area and simplify.

Operationally, the assessment clarifies why your bank was struggling, and you know the problem is being addressed through the implementation plan. Strategic plans can be implemented without the interference of inefficiencies. Technology benefits are realized as systems are fully utilized. Employee performance is optimized, customers better served, and profitability maximized.

Technology: Technology really does make everything easier, faster and more efficient.

It doesn’t blink at high volumes, and rather than making staff obsolete, technology frees them up to assume more valuable, potentially profitable roles, thereby enhancing their true value to your bank. Inefficiencies occur when technology is outdated or under-utilized.

Perspective is key to operational assessment, and realistically, Operations Officers aren’t the best person for this task. They’re too busy to interview employees, analyze processes, assess technology needs and compare to benchmarks. They can’t see the forest for the trees. Which is why our recommendation is to get outside help.

Starting at the beginning, work with your consultant to take a holistic look at your organization. Big picture thinking means starting with strategic planning for the bank. Are there holes in your infrastructure and services? Organizational weaknesses?

Systemic issues impeding your success?

Tackle the messy closets by identifying problem areas and pain points. Detailed onsite reviews should include employee interviews, observation of workflow processes, and evaluations of current procedures, risk-based processes, and adequacy and utilization of technology. Review all of your operations: lending, deposit and retail.

It’s important to remember that tidying up your bank takes time. Even with prioritization, it might take up to 2 years to see the full impact of the operational and strategic benefits.

Strategically, with efficiencies (now) built in to your infrastructure, your bank is ready to seek growth opportunities whether in footprint, assets or technology on a solid and efficient operational foundation.

Overall, achieving efficiency requires intentionality. Just as our houses re-clutter, we tend to hang on to our old ways if we’re not careful. Maintain a holistic perspective of your bank’s health and look closely for the clutter of inefficiencies. Set priorities and tackle them systematically. Maximize technology with simple, complementary processes, and optimize your people to be your greatest assets.

An efficient operational platform allows you to maximize your success all around - which will definitely benefit your stockholders, the regulators, your employees and most importantly, your customers.

Jacque Wills is Principal of Operations and Information Technology at DD&F Consulting Group, a full service bank consulting firm in Little Rock, Arkansas. Whether your goal is growth, performance or security, DD&F is here to help. Learn more about us at ddfconsulting.com.

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Federal Banking Regulator Focuses on Modernized Rules, Expanded Small Dollar Installment Lending

by Rosalyn Anthony

The Office of the Comptroller of the Currency (OCC) has a number of initiatives underway to modernize key banking regulations. Among these efforts are regulatory rules to improve Community Reinvestment Act (CRA) regulations, make Bank Secrecy Act/Anti-money Laundering (BSA/AML) compliance more effective, and promote short-term small-dollar installment lending.

The effort to modernize CRA regulations is one of the most discussed in our industry.

The OCC began the initiative by seeking comment from stakeholders on how to better achieve the statute’s original purpose, encourage increased lending and investment where it is needed most, and reduce the burden of reporting and evaluating CRA performance.

Stakeholders submitted nearly 1,500 comments. Most supported changing CRA to make the process more objective and transparent and to preserve CRA activity that helps meet the needs of low- and moderateincome people and geographies.

The CRA remains an important tool that promotes community development and reinvestment and fosters economic activity.

Over 40 years, the regulation has become dated and overly complex, and in some cases hinders banks’ ability to fulfill the statute’s goals.

The OCC has four goals to improve the CRA regulation: Create a more objective way to assess bank CRA performance.

Establish a list of eligible activities and clear standards for those activities.

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Adapt assessment areas to fit how banking is done today and where qualifying activities are considered.

Improve the tracking and reporting of CRA activity across the banking industry.

The agency is working with other the Board of Governors of the Federal Reserve System (FRB) and Federal Deposit Insurance Corporation (FDIC) and expects to issue a proposed rule for comment on an interagency basis later this year.

Additionally, the OCC sees an opportunity to enhance the nearly 50-year-old BSA/AML regulatory framework to take advantage of modern tools and technology. In 2018, the OCC coordinated discussions with the FDIC, FRB, National Credit Union Administration, the U.S. Department of the Treasury, and the Financial Crimes Enforcement Network (FinCEN). These agencies formed a working group to promote innovative and proactive approaches to identify, detect, and report financial crime, and meet BSA/ AML regulatory obligations. The working group expects to focus on a risk-based approach to examinations, supervision, and enforcement. Bankers are already seeing results from this effort.

In September 2018, FinCEN, with the coordination of other agencies, issued an order granting an exemption from the requirements of the customer identification program rules. The affected loans are those extended by banks and their subsidiaries to commercial customers to facilitate purchases of property and casualty insurance policies.

Then in October, the agencies jointly issued Interagency Statement on Sharing Bank Secrecy Act Resources, which describes the benefits of resource sharing. It provides examples of how sharing human, technological, and other BSA resources can reduce costs, increase operational efficiency, and leverage specialized BSA expertise.

The OCC is also assisting banks with meeting the credit needs of their customers. In May 2018, the OCC issued a bulletin encouraging banks to offer responsible short-term small-dollar installment loans. The bulletin reminds banks of the core lending principles for prudently managing the risks associated with this type of lending and is consistent with the OCC’s support for responsible innovation by banks and meeting the needs of underserved consumers.

Encouraging banks to offer these products will improve customers’ access to additional mainstream financial products that benefit these borrowers and the economy.

Taken together, regulatory modernization of the CRA and the BSA, and the opportunity to expand short-term smalldollar installment lending, the OCC is promoting a sound, sound, and fair federal banking system that is a source of economic strength and opportunity for Arkansas’ communities.

Rosalyn Anthony Assistant Deputy Comptroller Office of the Comptroller of the Currency Little Rock Field Office

BEYOND BITCOIN: A Look at Distributed Ledger Technology

by Julie Stackhouse Executive Vice President Federal Reserve Bank of St. Louis

This blog post is the fifth and final in a series about fintech and how it is affecting the banking industry. Last month, we looked at how digital, or mobile, wallets work. This month, we examine distributed ledger technology.

ed participants. Traditional financial institutions would gravitate toward this type of ledger.

It has been a decade since the digital currency called Bitcoin was introduced. At the time, the concept of a virtual medium of exchange was largely unknown—and even frightening—to many in the general public.

DLT offers a number of promising applications for financial institutions, including foreign exchange transactions, international money transfers, securities clearing and settlement, collateral management, derivatives, and data management. Proponents of DLT in financial services and other industries tout numerous benefits of the technology, including:

Today, CoinMarketCap1 tracks more than 1,600 digital currencies. And common to all of the currencies is the use of a digital accounting system: a shared, consensus-based system called distributed ledger technology(DLT).2

DLT in Financial Services

• Efficiency: The costs associated with duplicated records and account reconciliations are reduced or eliminated with DLT.

• Transparency: The tamper-proof nature of DLT makes au-

DLT Defined

diting and governance easier. In a blockchain, for example, no participant can attempt to change any data in the ledger without all other participants being notified.

Over the past decade, numerous types of distributed ledgers have been introduced, all offering a secure way to transfer assets. To qualify as a distributed ledger, three key elements must be present:

• Speed: Settlement times for securities transactions, for example, may be reduced as digital assets are exchanged while a trade is being executed.

• Peer-to-peer networking and distributed data storage: Each network participant hasa copy of a single ledger that contains a shared history of alltransactions.

• Cryptography: The use of encryption provides security prior to a transaction, allowing participants to verify ownership and the availability of an asset totransfer.

• Consensus mechanisms: Participants mutually agree on what is added to the ledger, and a chronological, unchangeable history of previous transactions is created.

Not all ledgers have the same access rights. Access to a ledger may be unpermissioned or permissioned. An unpermissioned public shared ledger has no single owner and is open to all to view and participate. Bitcoin’s blockchain ledger is an example of an unpermissioned public shared ledger. Participants both initiate and validate transactions.

Alternatively, a permissioned public shared ledger can have one or many owners, who limit participation to trusted users. Anyone can view this type of ledger, but only trusted users caninitiate or validate transactions. Permissioned private shared ledgers also have one or many owners, who limit visibility and participation to trust-

Inherent Challenges with Technology While distributed ledgers hold promise, their potential for clearing and settlement of financial transactions presently faces challenges. Importantly, both real and perceived security concerns must be overcome.

Moreover, interest in adopting the technology must become far more widespread than it is today. In addition, the technology must be proven to “scale” for high-volume transactions, especially with permissioned private shared ledgers. And finally, global legal and regulatory minefields must be traversed.

Notes and References 1

CoinMarketCap tracks most of the alternative coin systems that have hit the market, including Bitcoin. It shows users the current value in dollars and bitcoins for each coin.

2

Bitcoin uses a particular type of DLT called blockchain. Every blockchain is a distributed ledger, but not every distributed ledger is a blockchain.

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More Banks in Arkansas Form Captive Insurance Companies and look to Arkansas as the Preferred Domicile

by Josh Miller, CEO, KeyState Captive Management & Zach Stedman, Member, Mitchell, Williams, Selig, Gates Woodyard PLLC

The Growth of Bank Captives There is no avoiding it. Cyber security and reputation protection are among today’s significant, emerging risks, thus creating exposures for banks of all sizes. At the same time, commercial insurance carriers are pushing banks to higher deductibles, so there remain significant gaps in coverage and exclusions in commercial insurance policies. This creates unfunded risks, which must be evaluated as a part of any bank’s enterprise risk management process.

To address the concerns, banks throughout the country are forming captive insurance companies to cover these unfunded risks. A captive is a legally licensed, limited purpose, property and casualty insurance company, which can write customized policies for related entities.

While larger institutions (typically $10bn in assets and larger) with specific organizational structures (i.e., holding companies with numerous charters and subsidiaries) have been utilizing these types of captives since 2006, captives did were not an option for mid-size community banks ($1bn - $10bn) until an updated structure was designed and vetted with regulators in 2012.

“Since late 2012, we have seen the number of banks with captives explode. The majority of our banks that are good candidates for owning a captive either have one in place or are in process of putting one in place.

Over 85% of Indiana banks with over $1bn in assets have formed captive insurance

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companies” said CEO of Indiana Bankers Association, Amber VanTil. “We have been discussing bank captives with other state banking associations throughout the country and there’s been tremendous interest.”

“Arkansas banks are increasingly looking to captive insurance companies as a tool for identifying and funding for risks that are not covered by their commercial insurance program,” notes Lorrie Trogden, CEO of the Arkansas Bankers Association. “We are also very pleased that Arkansas Insurance Department Commissioner Allen Kerr has developed a robust and business friendly approach to regulating captives. It allows Arkansas banks to keep their captives instate rather than looking to other popular domiciles like Vermont, Delaware or Nevada.”

Commissioner Allen Kerr of the Arkansas Insurance Department was asked about the Insurance Department’s commitment to growing captive insurance in Arkansas.

Commissioner Kerr stated, “We have made captive insurance a priority in Arkansas through changing our laws to become more business friendly and traveling around the country to show business leaders how locating their captive business in our state makes good financial sense. We are working on returning Arkansas companies’ captive business back home while showing outside businesses that Arkansas is a Natural State for captive business opportunities.”

Identifying and Addressing Your Bank’s Unfunded Risks It is important to recognize that the captive structure does not typically replace a bank’s primary commercial insurance program.

However, it does allow a bank to more formally self-insure risks that are currently unfunded or that the bank has considered retaining (i.e., increased deductible layers).

Typically, the captive augments commercial policies in the following ways: Covers the bank’s commercial deductible layers, including specific deductibles for more catastrophic losses like windstorm and hail damage Provides “difference in conditions” coverage for existing commercial policies like cyber risk, which primarily relate to sublimits and exclusions on the commercial policy form Increases coverage levels on existing policies (excess layers) Identifies other currently unfunded risks to insure where commercial insurance is not available to the bank like reputation risk

Federal and State Statutes and Regulatory Framework Along with benefits received from enhancing a bank’s risk management process, Congress approved a small business incentive for mid-size companies that form their own insurance companies to insure these currently unfunded risks. Through

the incentive, banks can form their own captive insurance companies and then make an election under Section 831(b) of the Internal Revenue Code. This “small captive” provision allows companies to pre-fund for potential future risks on a tax advantaged basis, provide an incentive to set money aside for future potential claims and create a mechanism for companies to formalize their current self-insurance program.

Recent legislation demonstrated Congress’ renewed intent to support mid-size businesses utilizing captive insurance companies to create a contingency plan for unfunded risks. In the December 2015 Appropriation Bill, Congress increased the annual allowable premium limit for small captives from $1.2 million to $2.3 million in 2019 (which now adjusts annually with CPI). This increase in the allowable premium limit has spurred additional interest for larger institutions that have more significant unfunded risk. They can increase their captive insurance coverage as they grow.

The potential savings related to this small business subsidy (Section 831b) for captives varies from bank to bank, but they can be significant. In some cases, holding companies can see an increase to consolidated earnings per share of 1-3% prior to adjusting for claims made to the captive. Of course, a bank does not expect a significant claim each year. The captive is designed to cover risks that typically have high potential loss severity but low likely frequency. The captive becomes a way to put reserves away, literally for a rainy day.

Arkansas continues to update its captive framework to respond to businesses investigating the benefits of owning a captive insurance company. For instance, in 2017, Arkansas updated its laws addressing the formation and operation of captive insurance companies, adding provisions for formation of “incorporated protected cells” and broadening the organizational requirements to include limited liability companies. Additionally, the 2017 law created a mechanism for captives to enter

“dormant status.” The dormant status establishes a solution for a captive insurance company that has ceased insurance operations but does not want to relinquish its license should it determine that it wants to resume operations in the future. In 2019, the Arkansas legislature continued to improve the captive laws, decreasing the capital and surplus requirements for sponsored captives and adding greater flexibility for mergers.

Forming a captive insurance company is not a good fit for every financial institution.

In most cases, the Federal Reserve has determined that this solution can only be implemented by institutions that are well managed and well capitalized. Holding companies that want to form a captive should typically have over $1bn in assets.

There are exceptions but institutions of this size normally have a risk profile that justifies the formation of captive and the associated operating expenses.

Arkansas Based Family Owned CREDIT LIFE & DISABILITY INSURANCE

Live Life.

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Josh Miller, CEO of KeyState Captive Management, launched the Bank Captive Program in 2012. He has worked with over 100 financial institutions across the country that have formed captive insurance companies. 28 state banking associations, including the Arkansas Bankers Association, have endorsed KeyState’s Bank Captive Program for their members.

Banks with an interest in exploring whether a captive insurance company is a good fit for their institution should contact Josh Miller at jmiller@key-state.com.

Zach Steadman, Member, Mitchell, Williams, Selig, Gates Woodyard PLLC, has been instrumental in the development and ongoing revisions to Arkansas law addressing captive insurance companies and has been in the formation of the majority of the captive insurance companies in Arkansas. Contact Zach Stedman at zsteadman@mwlaw.com to discuss whether forming a captive is a good strategy for your institution.

Donna Spakes donna@flicar.com 501.519.0555 | 800.446.2214 flicar.com

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How to Change the World as a Stock Market Game Volunteer

by Claudia Utley, Communications Director Economics Arkansas, August 2019

All volunteer training and resources are provided for free use and distribution. As an added bonus, bankers may insert their company logo and information on slides and hand-outs with no additional costs.

You can become a Market Game volunteer through the Invest It Forward initiative in a few simple steps: 1. Set up a volunteer account and find a school match at https:// investitforward.sifma.org/enroll/volunteer.

All those grim stats and stories about Americans lacking money skills: Americans have trouble budgeting monthly expenses; Americans take on too much debt; Americans don’t save for retirement; Americans don’t know a stock from a mutual fund; Americans are afraid of investing. And so on.

2. Check out the volunteer resources at https://investitforward. sifma.org/resources. All have been reviewed by FINRA (Financial Industry Regulatory Authority). Pick your favorite topic.

Capital Markets; What is a Stock? Buy, Sell or Hold—what’s your preference? Each section contains a turn-key presentation, complete with slides, a script and discussion starters. If you like, you can complement it with your bank’s financial education materials.

As a banker, you are in a prime position to change that picture. You know the financial industry and you know smart money behavior.

3. Show up, present, have fun. Your service may even qualify for CRA credit hours.

Consider becoming a Stock Market Game volunteer in your community! Participate in personal finance education that could trigger five life-changing developments to improve the world. (And possibly earn CRA credit hours in the process.)

4. Repeat as often as you like. You can even invite the class on a field trip to your office.

The Stock Market Game is an investment simulation owned by the SIFMA (Securities Industry and Financial Markets Association) Foundation and hosted each school year by Economics Arkansas, a non-profit educational organization. Student teams in grades 4–12 compete to invest a hypothetical $100,000 portfolio in real time in the U.S. securities markets. The teams with the highest returns at the end of each session (12 weeks each fall and spring semester or a year-long session) win cash prizes and public recognition at a gala luncheon in Little Rock.

Teachers serve as advisors and receive all necessary training from Economics Arkansas, but their instructions will be greatly enhanced by volunteers like you. Bankers can add further insights, investment tips and words of wisdom, although—fair warning—you may learn something from the students as well.

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How might your volunteer services change the world?

You can help stabilize the financial health and selfreliance of individuals Your investment presentation will be a key part of personal finance education. Financially literate students tend to make better financial decisions about budgeting, spending, borrowing and saving throughout adulthood than their peers without money management education. As a result, they are likely to experience greater financial stability and economic independence.

You could decrease the likelihood of excessive student loan debt Student loans account for the second-highest household liability, after mortgages, and the most common form of delinquent consumer loans. But students who benefit from financial education in school are less likely to underestimate the burden of college debt and

choose less costly alternatives instead, such as working while still in high school to build up savings, selecting lower-price universities and work-study programs, and borrowing as little as possible. Graduating debt-free or almost debt-free places them in an excellent position to concentrate on their jobs, purchase assets such as cars and first homes and start families—all behaviors that add stability and build community.

You will help decrease the likelihood of consumer credit card debt The average household balance is almost $8,400 according to WalletHub, with slowing paydown trends, indicating deteriorating financial health of many consumers, (https:// wallethub.com/edu/credit-card-debt-study/24400/). In contrast, money-savvy students are more likely to control their spending habits and avoid crushing credit card debt as adults.

You will encourage short-term and long-term wealth building Nowadays, building assets through savings alone is practically impossible. Consumers also need to invest their money to generate

income. Through the Stock Market Game, students acquire the saving and investment skills that help prepare them purchase actual securities. Once they enter the workforce, they are more likely to participate in investment programs such as 401(k) retirement and 529 college savings plans.

These growing assets will allow them to pay for household emergencies, fund their children’s education and afford a comfortable retirement. (And if they enroll in your bank’s financial offerings, you’ve gained new clients!)

You could improve the overall vibrancy and stability of your community Citizens who feel confident about their ability to provide for themselves and their families tend to increase their productivity at work and their community engagement as citizens. These important building blocks to a good quality of life contribute an overall decrease of poverty, crime, homelessness and other social ills—to the benefit of us all.

A lot of good things start with personal finance education in schools.

Be part of it. Become a Stock Market Game volunteer.

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New Research Shows Credit Unions are Failing – CU Leadership Continues to Point the Finger Elsewhere by: ExploreCreditUnions.com

Federal Financial Analytics and acclaimed researcher Karen Shaw Petrou earlier this month released a new report titled “The Credit-Union Equality Commitment: An Analytical Assessment.” This report analyzes the current state of affairs in the credit union industry by focusing on to what extent credit unions are fulfilling their original mission outlined in the 1934 Federal Credit Union Act. The results of the report? Mostly what we already knew – and then some.

FedFin’s report confirmed that credit unions are no longer sticking to their mission of serving persons of “small means.” Their members are disproportionally middle- to upper- income households. Based on recent reports about “toy” loans and $11 million executive compensations, this was not surprising. Citing the lack of “meaningful common bond,” the report also found that credit unions continuously “focus on provident and productive lending, instead converting business objectives to profit maximization.” In layman’s terms, credit unions are choosing their loans based on what they can get out of it – money.

All in all, the report makes one point very clear: credit unions aren’t living up to their mission of serving the underserved, and in many cases, have abandoned that pursuit altogether.

The report also concluded that not only are credit unions failing their purpose, but that they are actually putting vulnerable populations at risk when doing so. By focusing on increasing their own profits, credit unions today often make risky loans in the hopes for greater returns. When these loans fail however, as we saw with the taxi medallion epidemic, credit union members and taxpayers as a whole are forced to make

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up for these losses. This report raises a key question for policymakers: why is the US government giving a major tax exemption to institutions that are not only neglecting to use said tax exemption for the right reasons, but are also harming American taxpayers in the process by pursuing self-serving lending practices?

And don’t worry – the credit unions’ regulator NCUA did not walk away unscathed from this research. The report holds them responsible for credit unions skirting their mission, citing major “regulatory arbitrary advantages” and “less stringent safety-and-soundness regulations.” After analyzing NCUA’s practices, FedFin found that the agency maintains no system for measuring mission fulfillment.

More importantly, the report found that NCUA’s definition of “low-income” reaches a much wider demographic than the established norm in other methodologies, therefore opening the doors for further charter arbitrage.

And of course, instead of taking ownership of these problems, credit union leadership has chosen to divert attention away from

these findings by questioning the credibility of the report, continuously emphasizing the sourcing and funding. This, however, doesn’t answer our questions. It’s simply a way to point the blame elsewhere. Recent headlines support everything found in this report – from taxi medallion failures, to embezzlement cases, to an incompetent regulator. The industry can no longer hide from these harsh realities. And even so, if they claim the findings in this report are “nonsense,” why not disprove them with their own research? They won’t, because they can’t.

According to the report, credit union assets now exceed $1.5 trillion and account for 9.2 percent of U.S. insured deposits. At the same time, wealth inequality is one of the most difficult issues in this country to resolve.

Policymakers can no longer turn a blind eye to these institutions that were established to combat this major problem, but instead blatantly refuse to do so. This report shows it’s time for a serious review of the credit union industry’s behavior and whether it is truly worthy of the advantages, both regulatory and financial, it continues to receive.

The CECL Model: Accounting Changes Coming for Banks

by Julie Stackhouse Executive Vice President Federal Reserve Bank of St. Louis

We are more than a decade removed from the financial crisis—a time when many factors converged to threaten the viability of our financial system. Since then, numerous reforms have been implemented. Today, our banking system is substantially stronger and more resilient.1 Financial regulators have introduced many of those reforms. But other groups have acted as well, including the accounting community through the Financial Accounting Standards Board(FASB). The FASB has recognized the need for change in how firms account for losses in assets held at amortized cost on the balance sheet. The result is a new accounting standard: the current expected credit loss (CECL)model.

What Went Wrong At the time of the financial crisis (and even today), accounting standards called for losses on many assets to be recognized when it became “probable” that the loss would occur. The accounting community called this method the “incurred loss” model.

Importantly, this model relied heavily on historical trends and performance to predict potential asset losses.

If financial and economic conditions are good and do not change, this model works adequately. Unfortunately, going into the financial crisis, this was not the case. Reserves for asset losses—in particular, assets in the loan portfolio—were too low relative to the quality of loans being extended and the probability that economic conditions could change.

As the financial crisis unfolded, loans on the balance sheets of many banks performed so poorly that investors and analysts began questioning the accuracy of balance sheets—balance sheets that had been prepared in accordance with Generally Accepted Accounting Principles (GAAP).

Moreover, inadequate reserves for losses meant massive charges to earnings in a short period of time to reflect the pending

losses in loans. This left many banks with inadequate capital to sustain normal operations. The U.S. faced emergency mergers, government intervention and more than 500 bank failures.

Why CECL? The FASB set out to address those weaknesses by introducing a more flexible accounting standard: CECL. Importantly, CECL calls for measuring expected losses over the life of an asset, not just when the loss becomes probable. Those expected losses are recognized the day the asset is booked.

Institutions will rely on historical experience, current conditions and “reasonable and supportable forecasts” in their assessment.2 In other words, they will now use forwardlooking information to better inform their credit lossestimates.

Finally—and significantly for many firms—CECL can be implemented in a way appropriate to the size and complexity of the firm.

What’s Next?

The FASB issued the accounting standard in 2016 with a delayed start date to allow companies time to adjust. Larger public firms will implement the standard in 2020, with smaller firms switching over at a later date.

Despite the extended rollout, implementation has proven difficult for some banking organizations because of data and personnel limitations. Next month, I’ll describe some of those challenges and the steps being taken by regulators to promote a smooth transition.

Notes and References

1 For an overview, see “Did the Dodd-Frank Act Make the Financial System Safer?”

2 For additional information, see “FASB Issues New Guidance on Accounting for Credit Losses,” FASB news release, June 16, 2016.

December 2-3, 2019 Robinson Center Get ready to laugh, learn, and hear incredible women share incredible insights at the 2019 Women in Banking Conference. Join the ABA for this event, designed to bring together the unsung majority of Arkansas bankers for both networking and fellowship! Get fresh ideas to better serve your bank, community, and family; network with other women in the banking profession; and create lasting friendships — all in a fun and dynamic environment!

More information coming soon!

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Welcome to Pepto Bismol Bank!

Six strategies to consider when selecting a bank name

by Debi Barnes Principal, DD&F Consulting, Inc.

Now that I have your attention, let’s talk about the power of branding. Would you consider naming your bank “Pepto Bismol?” Based on what you know now, of course not, but consider this – until 1919, “Pepto Bismol” wasn’t even a word. It had no meaning, positive or negative! Today, the name is unmistakably linked to what it represents.

Proctor and Gamble created the name in the full understanding that the most powerful communication doesn’t have to be literal.

How do you feel when you hear the word “Snickers?” What about “Haagen-Dazs?” If you’re starting to feel hungry, then you understand that a brand name can be an important trigger in communicating meaning. Does your bank name do the same for you? When people hear it, do they know who you are and what you stand for? As you consider whether re-branding your bank is a good strategic move, or as you consider what to name a new bank, there are lessons that can be learned from a bottle of pink over-the-counter stomach medicine -- the issue is not having a familiar name, but rather a memorable and recognizable brand.

Why is this important to bankers? De novos are beginning to pop up again, and existing banks are finding reasons to rethink their current name. Perhaps they have a geographical name like Colorado Bank, but they are expanding into Arizona. Perhaps they are changing from a national to state charter, or the new market they are expanding into already has a competitor with the same (or similar) name which can be confusing to customers.

Rebranding your bank is very personal and it’s a hard decision for many reasons: fear of losing customers or brand equity, director resistance to change, sentimental feelings about the old name, and trademark issues, to name a

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few. And, my favorite reason, “All of the good names are taken!”

Here are a few things to consider when naming or renaming your bank: 1. Can you use the name and/or protect the name? It might be obvious that a new name is necessary if you enter a market where another bank has the same (or similar) name. Federal trademarks make it even more difficult. In our digitally connected world, a bank in California can claim rights to a trademarked name in South Carolina because they can argue that with internet banking, they could have customers in South Carolina, and it would create confusion. If you think you can ignore a trademark just because it is across the country, think again. It could be a very costly mistake.

Before you design your new logo, do your due diligence. Hire an intellectual property attorney to advise you. There are circumstances where trademarks may not prevent you from using a name, but you need to know what the risks are. If you choose to use a trademarked name - which we don’t recommend - do it with your eyes open.

2. Avoid customer confusion and a brand identity crisis. Re-branding without a clear strategy can create confusion or even worse, customer apathy. Here’s a practical example: A “First National Bank” switches from a national to a state charter so they decide to rename to “FNB.” That’s allowable. What’s to stop another bank from coming into your market using your old name? Not a thing.

And think about this: If you run an ad using interchangeable wording like “First National Bank” and “FNB,” you need to be

aware that customers don’t pay as much attention to the nuances of our marketing as we bankers do. It’s far more important to us than it is to them. As a result, your switch campaign may have just helped someone open a new account with your competitor, and you didn’t even know it!

This scenario can and does occur when names are similar or interchangeable. Familiarity and similarity of brand names in a market means that you and your competitor end up sharing ownership of the brand in prospective customers’ eyes which ultimately dilutes the equity of your brand. Is that what you want?

3. Think outside the box with rebranding.

The brain is wired to remember things that are DIFFERENT. When a bank finds a “real” word with positive attributes (like “integrity” or “prosper”) not already in use or trademarked, that is good news...and good luck! It is becoming increasingly difficult to find existing words that convey attributes that bankers identify with that aren’t already taken.

One banker had to consider a new name for their family-owned 100+ year old “First National Bank” because they had acquired a bank in a nearby market with the same name. Ultimately, a new name was coined using the two last names of the original founders, creating a unique and memorable new name. There isn’t another bank in the nation that can use their name because they were able to easily trademark it. The bank’s customers, employees and directors embraced the new name even though the word didn’t previously exist!

4. A new name is only part of the story.

What is your story? A successful name change involves many steps and details.

One of the most important steps is to

thoughtfully construct a strategic message: a story defining the meaning of your new name and what you want people to believe about your bank. Positioning statements are short, concise words or phrases that – when dropped into advertising and other collateral materials – reinforce your new brand’s identity.

But also, creating a short story about the name and what it stands for is critical to give it meaning, facilitate early customer acceptance and employee ownership of the new name.

The previously referenced client who coined a new bank name out of the founders’ names took the opportunity to build a back story – sharing the founders’ original vision for the bank’s future, the bank’s long history, and the name’s development. The story gave substance to an idea, and suddenly, a non-word became a meaningful word that the employees, customers and the entire community could embrace. Not only was this a powerful way to convey meaning to their name, but it allowed them to grow strategically in new markets without concerns about the name. They even received national coverage in American Banker for their unique rebranding strategy.

5. Never underestimate the positive power of change. I have never known of a bank losing customers because of a name change (when nothing else is changing). In fact, the opposite usually happens. Employees become energized, and customers buy in to that excitement, especially if you’ve communicated your story well. Everyone likes to be a part of something better, and a new name symbolizes a vibrant and bright future certainly what most people want from their bank, right? Sure, sometimes there may be short-lived sentimental sadness among long-time employees when the old name goes away, but by the time the new signs go up, it is a reason for celebration and a fresh new beginning! And the younger and future banking generation…the ones we scratch our heads about? They will LOVE it!

6. The bottom line: A new name can facilitate growth. Several of our clients

have made the decision to rebrand with a unique and memorable name in order to grow organically in their existing markets and penetrate new markets. During the first year following the name changes, these banks experienced on average a 14.8% increase in deposits and an 18.6% increase in loans, excluding any growth through acquisition. As they continue to prosper, each has found that even operating as a small community bank in large and highly competitive markets, their unique brand helps them grab attention and market share. Despite initial apprehension about changing their bank names (many of them were family-owned and decades old) - without exception, the decision was a game changer for them, and they are happy they did it.

Change is inevitable these days, especially in banking. If you are contemplating a change in your bank name, repurposing a bank charter, or are considering a de novo, understand that your name will embody the spirit and vision of your bank. If you think made-up names must be strange, think again. In the 1950s, a Japanese electronics company had plans to expand to western markets and needed a name that English-speakers could pronounce. “Sony” was chosen because it was simple and sounded friendly. It’s up to you to make certain the brand delivers on the promise implied by the name.

As you consider a new name for your bank, don’t shy away from something unique and memorable. Consider the way a name sounds and any positive associations you can take advantage of. Make sure you have a compelling story to tell and plan your strategy for a seamless implementation. If you do those things, you’ll be pleased with the bottom line.

Debi Barnes is Principal of Marketing and Communications at DD&F Consulting Group, a full service bank consulting firm in Little Rock, Arkansas. Whether your goal is growth, performance or security, DD&F is here to help. Learn more about us at ddfconsulting.com.

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VENDOR SPOTLIGHT

CRA Partners With ten thousand seniors turning 65 years old every day, one in 10 experiences some form of elder abuse every year.

CRA Partners offers a way to do something about it—and help banks meet their Community Reinvestment Act (CRA) requirements along the way.

Since 2000, CRA Partners has grown to include Medicaid-certified nursing homes, HUD-subsidized elderly apartment communities and state veterans’ homes.

In fact, with a renewed focus, the organization is looking to get the word out that locations like the Arkansas State Veterans’ Home at North Little Rock are available for sponsorship.

“We’re revamping this year,” Shea Gabrielleschi said. “It’s a great opportunity for a bank that wants to make a difference in their community and protect veterans.”

Gabrielleschi, the AVP of marketing and sales, has been with CRA Partners since August of 2015. He worked in sales management previously.

“I was born and raised in Memphis,” Gabrielleschi shared. “I was looking for jobs in Memphis. I liked the fact that it was mission-based, and it had an opportunity for me to grow within the organization and get involved with something that had a national reach, yet was a local company.

Our headquarters are here in Memphis and it gave me the opportunity to stay in Memphis but also make an impact on a larger scale.”

And when he first joined the team, CRA Partners was known as the Senior Housing Crime Prevention Foundation.

“CRA Partners did not exist at that time,” Gabrielleschi said. “It was the foundation and Senior Crimestoppers. The Senior Housing Crime Prevention Foundation

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was a mouthful, and it needed a refresh and a rebranding, along with a better name to take to market with banks. We’re a CRA-qualified organization, and we needed a name to match.”

Part of the continual success has been due to partnerships with state bankers associations, like the Arkansas Bankers Association. CRA Partners became an Endorsed Vendor in 2015.

CRA Partners has roots reaching back twenty-five years to a large regional bank headquartered in Memphis. “A gentleman at the bank experienced the impact of elder abuse when his grandmother became a victim at a local nursing home in Memphis,” Gabrielleschi explained. “He came up with the idea and developed Senior Crimestoppers as a community outreach program at the bank.”

“Our main focus in terms of building relationships and getting the word out about our mission is working with state associations, like the Arkansas Bankers Association,” Gabrielleschi explained. “We rely heavily on support from other state banking associations to spread awareness of our program and our mission. Right now, we have partnerships with 30 state banker associations.”

It all began simply by installing Senior Crimestoppers at several Memphis nursing homes. Around the same time, the bank had some issues on a CRA exam.

There are over 200 banks in the program nationally, with 37 of them just in the 11-state region that Gabrielleschi oversees.

“It was timely in that they said, ‘We’re doing all of this good in the community with seniors, this should count toward our CRA efforts’,” Gabrielleschi said. “They got it approved and got credit on their next exam. Then they said, ‘If we can get credit, other banks should be able to as well.’”

In 2000, Senior Crimestoppers became its own entity under the Senior Housing Crime Prevention Foundation.

And as a local idea that has since spread from coast to coast, the Senior Crimestoppers program has reduced crime against the elderly within its member facilities by 95 percent.

As for how it works, CRA Partners keeps things as simple as possible.

“A bank can join through a community development loan, a qualified investment, or a grant to sponsor a home in their assessment area for CRA credit,” Gabrielleschi said. “That, in a nutshell, is how a bank partners with us.”

CRA Partners administers all aspects of the program from there and provides detailed documentation for the bank’s CRA exam.

There’s no requirement, but the bank can choose to be involved with the facility and engage with the residents they are protecting.

“We really take pride in the fact that our program is completely turnkey,” Gabrielleschi said. “All the bank really needs to do, if they like, is develop the relationship with the facilities that they sponsor. We do everything we can to make that possible.”

For more information, contact Samatha Browning at 501.376.3741.

2019 MEGA Conference

With eight conferences packed into one event, we’ve got something for every banker.

October 8-9, 2019 Little Rock Marriott

Register online at www.arkbankers.org/mega.aspx or by phone at 501.376.3741.

Go big or go home—that’s the Megasaurus motto.

And that’s what we do every year with our ABA Mega Conference, which combines eight of our annual conferences into one incredible experience that includes professional development, networking, and an on-site trade show.

Connect with peers from across the state and hear from qualified speakers to bolster your banking knowledge.

Each day can be customized to your needs, whether you need to know more about agriculture banking, bank management, compliance, lending, marketing, security, technology, and trust.

We’ve also got some mega lunch time opportunities. Tuesday’s lunch includes a hemp banking panel, while Wednesday’s lunch features Rob Nichols, CEO & president of the American Bankers Association.

Join us for one or both days, or even just for our Tuesday lunch panel discussion.

As you sign up at www.arkbankers.org/mega.aspx, select your preferred track(s). Your selection gives us a head count for each track, but you are welcome to attend any of the sessions offered.

All tracks combine for keynote, networking breaks, and lunch sessions.

Reserve your spot now—and join over 300 bankers from across the state!

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2019 MEGA CONFERENCE

How Artificial Intelligence Provides a Personalized & Profitable Banking Experience Money is personal and, for most consumers, banks have been their go-to financial service provider for generations.

Customer expectations, though, are no longer what they used to be, and banking can’t be either. Technology delivers efficiency, speed, and personalization in retail, entertainment, hospitality, and more, and customers now demand the same experience with financial institutions.

Companies like Amazon, Netflix, and Facebook are using artificial intelligence (AI) to personalize the customer experience using their data, all while generating billions of dollars in revenue.

Banking is lagging behind, with 94% of financial institutions unable to provide that same personalized experience.

But banks have something that tech companies don’t: the most powerful consumer data on the planet. Stuck in legacy systems, this data is not being used to its full capacity. AI allows banks to leverage that data to benefit not only their customers but also their bottom line.

There are several areas in which AI can drive profit while increasing customer loyalty, including the contact center, retail banking, the mobile app experience, and marketing.

Reducing Contact Center Costs Perhaps the easiest way for banks to see the impact of AI is by automating the contact center. Banks spend an average of $10 per call to answer customers’ basic questions, but most customers report low satisfaction.

With a cloud-based contact center, customers are able to self-service for

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simple queries through your bank’s bot via voice or text. The bot facilitates a human hand-off for more complex needs. What’s even more important, though, is that your bank’s bot carries over context from the customer’s interaction with the bot to the agent, allowing him or her to be more efficient while increasing customer satisfaction.

A cloud-based contact center enables agents to serve customers from one user interface regardless of channel. By implementing the bot on top of your bank’s existing contact center, there is no need to re-train agents.

By automating the contact center with the use of conversational AI, banks can reduce costs up to 90%.

Increasing Revenue through a Personalized Customer Experience Amazon is sitting on far less sophisticated consumer data than banks; yet, 35% of its revenue is being driven by personalization from purchase data (because you bought X, you may be interested in Y).

Personalization is the key to conversions, and banks will have to rely on new ways of thinking about how to reach customers.

Financial institutions can no longer rely on transactional data alone to offer products or services to consumers.

Context is paramount, and conversational AI allows banks to capture intangible data points that contribute to a complete understanding of each customer, including his aspirations, limitations, interests, and goals.

With BOND.AI’s conversational intelligence, the bot learns about each customer holistically, calibrating transactional and

non-financial data. All of these factors and context are taken into consideration as the bot guides customers toward optimizing, saving, and investing, leading to increased financial wellness. Here’s an example: User: Alexa, ask BOND, do I have any upcoming bills?

BOND: Yes, your credit card bill is due on the 28th & a Geico payment is due on July 30th.

User: What’s the current due on my credit card?

BOND: The current due is $1348.60, and the minimum payment due is $25.

User: Ok, can you transfer $25 from my checking?

BOND: Guess what, you can pay up to $350 this month without affecting any of your regular spending. Do you want to do that?

User: Hmm…sure!

BOND: How much should I transfer?

User: $300 BOND: Done, you’ve reduced your debt by X%. Way to go, buddy!

For every user, at every interaction, a unique behavioral insight is communicated to the user in his or her style, resulting in one-to-one personalization at scale. This is done automatically, contextually, and continually, while increasing customer engagement, lifetime customer value (LCV), and loan-to-deposit ratio (LDR).

Re-Imagining the Mobile App Most banking apps, even the seemingly well-designed and sleek, remain product-

By automating the contact center with the use of conversational AI, banks can reduce costs up to 90%. centric. As consumers continue to do more of their banking from their phones, banks can differentiate themselves by providing a mobile app that puts the customer at the center of the experience.

Customers need an easy-to-navigate app where they can see the impact of their transactions in real-time and in a social context, informed by insights gathered from their financial history and nonfinancial information.

For example, take BOND.AI’s mobile app, which can be integrated into a bank’s existing mobile app and customized with its branding. The app unifies a customer’s whole financial life on one screen, allowing him to see what he has been doing, what he should be doing, and what others are doing.

Through the app, your bank can push out real-time notifications to customers. These notifications can be both proactive and reactive. As the customer engages with and completes transactions in the mobile app, their bank can notify them with offers that meet their immediate needs.

AI allows banks to provide a best-in-class mobile experience with an intuitive mobile app for each unique customer at scale that increases not only mobile adoption and customer loyalty, but also LCV.

Increasing Marketing Efficiency Today’s consumer is savvy, and traditional marketing is mostly ineffective. Eightyfour percent of consumers say that being

treated as a unique individual is key to winning their business. For banks to see an ROI in their marketing efforts, they are going to have to personalize their communications and offerings.

AI allows banks to leverage their treasure trove of transactional data, coupled with intangible data points, to create a holistic understanding of each customer. These insights into customers’ lives and finances allows banks to create highly effective campaigns that address customers’ unique needs.

BOND.AI’s bank-facing dashboard, for example, groups your customers into clusters according to behavioral and financial stability and needs, allowing you to target communications to specific clusters and increase conversions.

Interest and influence graphs also enable marketing team to target clusters of customers that are motivated by the same interests and influences. These insights from the dashboard can be integrated seamlessly with various CRMs. Banks using BOND’s marketing dashboard have increased marketing efficiency up to 60%, reduced user acquisition costs by up to 70%, and increased conversions up to 40%.

What Does the Future of Banking Look Like?

There’s talk of branches becoming nonexistent and banking as strictly digital, but that’s not going to happen, at least not anytime soon. With the conveniences of digital challengers, though, banks will have to bridge the gap between the physical and digital banking experiences.

Even in the branch, the tellers will need to have context on each customer available at their fingertips. That’s the power of AI. When it comes to successfully deploying AI strategies, banks have the power of data on their side, but they will have to unlearn most of what they’ve always

known about engaging consumers, who won’t wait for banks to figure this all out for themselves. Partnering with fintechs enables banks to act now, implementing secure, compliant technology that offers speed and efficiency while retaining and building market share.

Stephanie Matthews, vice president of communications at BOND.AI, a Little Rockbased fintech company.

Stephanie Matthews For the last 10 years, Stephanie has directed communications efforts within various industries. At BOND. AI, Stephanie leads the multimedia marketing strategy, manages content, and oversees partnerships.

Previously, Stephanie worked with the Asset Funders Network as director of the Bank On AR+ initiative.

Stephanie is a former small business owner, served as the communications manager for a national trade association in Washington, D.C., and lived in Mumbai, India, as part of a research fellowship.

Outside of work, Stephanie is the campaign director and co-founder of Save10, a movement to empower and equip Arkansas women to save for retirement. She also volunteers with several organizations in Little Rock.

Jared Landrum Vice President of Business Development for BOND.AI, has been helping companies increase market share and grow revenue for over 8 years, 4 of which have been in technology. A problem solver, Jared is able to understand business needs and initiatives to ensure value is realized. Jared’s background allows him to connect the dots and help navigate opportunities. He is actively involved in civic/charity organizations, sitting on the board of Make-a-Wish Young Professionals, Easterseals Guardians, and Create Little Rock.

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Strategies for Success Here are some ideas for improving your bank that don’t necessarily require new investment in hardware or software. I trust you will find some of them applicable.

Innovation It’s hard to read any of the banking trade publications these days without seeing this word.

It remains in my top 5 overused words. For most community banks, innovation can be a challenging word. You won’t typically develop your own mobile applications or write software to improve loan operations. Let me interpret innovation differently then: think of it as improving the way you already use your information technology, like parsing data for a marketing campaign, or creating a new checking account product that appeals to a section of your current (or desired) customer base. For example, use your report writing capabilities to parse your customers’ payment habits, and learn where they shop most often in your community. If the businesses you identify aren’t currently customers of your bank, perhaps there is an opportunity to engage them regarding the value of doing business with you. Again, looking at payment habits, can you identify a group of customers who almost exclusively use their debit card rather than writing checks? If so, they may be candidates for a streamlined checking account that better reflects their payment habits, and lifestyle.

Finally, when thinking about innovation, be sure that you are pushing your software vendors for new products and services in a timely fashion, and for operating parameters (later cut off times for remote deposit or longer operating hours for your non-traditional branches) that allow you to compete effectively in your markets. Allowing vendors to dictate your operating hours or other business practices is not an ideal situation.

Fee Income Opportunities One failing in our industry has been our consistent approach of giving away virtually everything, to the point that our customers have come to expect it. As I told one banker a few years ago, “you already have free business checking . . . you just call it ‘we don’t charge for that’” There are two areas to consider here. First, improved collection of fees you are already due . . . NSF, OD, loan late charges, research charges. There’s no reason not to impose such fees unless the bank is at fault for the

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problem. Typically you are not. For fees that are already published, start with your employees. Help them to understand why we need to collect these fees and give them training on how to approach customers. In my experience, employees are often reluctant to impose such fees because of customer reaction. These employees need guidance, and to be reminded that fee income is part of the bank’s revenue, driving salaries and helping offset overhead costs. New services present a tremendous opportunity for educating customers that they should expect to pay for value when it is delivered. “app stores” from Apple and Google have taught consumers to expect to pay in small increments for products that they want. Leverage this mindset and impose such fees when you begin to offer new products, including mobile capture, person to person payments, or other enhancements to your electronic delivery channels.

Staffing Like many of you, I’ve been doing this banking thing for a while. I’m in my fourth decade. I always try to look for common concerns and considerations. One of those remains staffing issues. I know that I’ve written about this fairly recently, but I believe it is valuable to talk about it again. Many community banks are overstaffed. (the numbers back me up - banks under 1 billion in assets tend to have 2 times the employees per million in assets that banks over 1 billion have.) Often, they aren’t staffed with the right people, which makes things worse.

A good bit of this issue is a result of poor HR practices that contribute to a tolerance of mediocre performance. While I am not an HR expert, I know this for sure: it is impossible to fairly evaluate an employee’s performance if you have not established clear expectations for them. Write that down.

Most managers dread annual performance reviews. As a result, such reviews are often late, done poorly, and contribute to an employee morale issue. But if the manager builds a good job description, clearly communicates it to each employee, and uses that document as a means of

continually evaluating employee performance, the task becomes easier. Coaching events - positive and negative - are dealt with in a timely fashion, properly documented, and when annual review times comes around, both the manager and the employee will have a good idea of what to expect. A much better situation than a hastily done performance review that leaves both parties with a bad taste in their mouth.

Improving your managers engagement with their employees as it relates to performance reviews is a key first step in better management. I believe just implementing these basic steps will go a long way toward improving both employee productivity and morale.

Parting Thoughts There are a lot of things vying for your attention.

Some worthwhile, some not. Stay focused, stay grounded: doing the fundamentals well, focusing on your core competencies, and managing your people for the valuable asset that they are will pay huge dividends going forward.

Trent Fleming serves as a trusted advisor to financial institutions on matters of technology, strategy, and management. Trent looks forward to meeting old and new friends at the ABA’s Mega Conference in October. More about Trent at www. trentfleming.com

Trent Fleming has served as a trusted adviser to financial institutions for more than three decades, on matters of technology, strategy, and management. As a speaker, Fleming’s presentations consistently get the highest marks from his audiences. He serves on the faculty of the Graduate School of Banking at the University of Wisconsin and the Advanced Banking School at Penn State University. He regularly contributes articles to industry publications, and publishes a very popular banking newsletter. Trent holds a Bachelor of Science in Economics and Finance from Christian Brothers University.

Recent Amendment to Chapter 12 Bankruptcy Debt Limits Under the Family Farmer Relief Act of 2019 By: Mary-Tipton Thalheimer & R. Seth Hampton Quattlebaum, Grooms & Tull PLLC In the late 1980s, Congress enacted Chapter 12 of the United States Bankruptcy Code (the “Bankruptcy Code”) to give hope to “family farmers who are facing the brink of disaster where they would have to be thrown off their farms” by giving them the ability to reorganize.

For farmers that wanted to keep their farms, prior to enactment of Chapter 12, their only options were to file for relief under Chapter 11 or Chapter 13. However, for many family farmers, Chapter 11 proved too complicated and expensive, whereas the Chapter 13 debt limits disqualified many family farmers.

Thus, the goal of Chapter 12 is to allow the debtor to avoid liquidation and foreclosure by reorganizing and restructuring its finances, while continuing its farming/commercial fishing operations, without having to incur the complexities and costs of Chapter 11.

Under Chapter 12, only a family farmer or family fisherman with regular annual income, as defined by the Bankruptcy Code, may file for Chapter 12 relief. The Bankruptcy Code defines an individual family farmer as: (1) an individual or an individual and spouse; (2) engaged in a farming operation; (3) with aggregate debts that do not exceed $4,411,400; (4) with at least 50.0% of the aggregate, non-contingent, liquidated debts, excluding debt for the principal residence, arise out of the individual’s farming operation; and (5) who received more than 50.0% of income from the tax year preceding the petition year (or each of the second and third years preceding the tax year of the petition

date) from the farming operation. The Bankruptcy Code defines a corporation or partnership family farmer as an entity: (1) in which more than 50.0% of its outstanding stock or equity held by one family or one family and the relatives of members of the family (which includes an individual related by marriage or blood within the third degree, as well as individuals in a step or adoptive relationship within the third degree) and such family or relatives conduct the farming operation; (2) in which more than 80.0% of the value of its assets are related to the farming operations; (3) with aggregate debts that do not exceed $4,411,400; (4) with at least 50.0% of the aggregate, non-contingent, liquidated debts, excluding debt for the principal residence, arise out of the entity’s farming operation; and (5) whose stock, if any, is not publicly traded.

In recent years, there has been an increase in Chapter 12 filings nationwide resulting from the continued downturn in the U.S. farm economy. According to a Forbes article written by Marua Webber Sadovi, Chapter 12 filings nationwide have increased in recent years, from 317 in 2014, to 458 in 2017, to 474 in 2018. The combination of tariffs and record rainfall in many agricultural states has increased the likelihood that Chapter 12 filings will continue to increase in the near future.

In order to make it possible for more family farmers to avail themselves of the protections of Chapter 12, President Trump signed into law the bipartisan Family Farmer Relief Act of 2019

on August 23, 2019, which increases the debt cap for those seeking relief under Chapter 12 from just over $4.2 million to $10 million.

According to the Family Farmer Relief Act cosponsor Representative Antonio Delgado of New York, the “farm economy is exacerbated by an outdated bankruptcy filing cap that leaves farmers without option to restructure or repay their debt.” The Family Farmer Relief Act is meant to align with today’s land values, the increased in the average size of family farm operations, and the current cost of doing business for today’s farmers.

While the Family Farmer Relief Act increases the debt limit for family farmers, the remainder of the requirements for qualification as a Chapter 12 debtor remain the same. Thus, although it appears that fewer family farmers will be disqualified from filing under Chapter 12 due to the amount of their debts, other noted issues with Chapter 12’s eligibility requirements, such as disqualifications based on the types of debts, may still prove problematic.

Seth Hampton Associate Quattlebaum, Grooms & Tull PLLC R. Seth Hampton joined Quattlebaum, Grooms & Tull PLLC in 2014. His practice primarily focuses on real estate, agriculture, commercial finance, and environmental compliance.

See 132 Cong. Rec. H9001 (daily ed. October 2, 1986). 2See 11 U.S.C. §§ 1201 et seq.3See 11 U.S.C. § 101(18). 4See 11 U.S.C. § 101(18)

1

See National Association of Farm Broadcasters, Trump Signs Family Farmer Relief Act (Aug. 27, 2019) (available at http://southeastagnet.com/2019/08/27/trump-signs-family-farmer-relief-act/); see also The National Agricultural Law Center, Raising the debt limit: How Chapter 12 bankruptcy saves family farms (Aug. 26, 2019) (available at https://nationalaglawcenter.org/raising-the-debt-limit-how-chapter-12-bankruptcy-saves-family-farms/).

5

Maura Webber Sadovi, Bitter Harvest: Debt And The Bankrupting Of The American Family Farm (Mar. 27, 2019) (available at https://www.forbes.com/sites/debtwire/2019/03/27/bitter-harvest-debt-and-the-bankrupting-of-theamerican-family-farm/#1056ce4b7e7a).

6

See House Passes Delgado’s Bipartisan Legislation to Ease Chapter 12 Bankruptcy Rules for Family Farmers (July 26, 2019) (available at https://delgado.house.gov/media/press-releases/house-passes-delgado-s-bipartisanlegislation-ease-chapter-12-bankruptcy-rules).

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2019 MEGA CONFERENCE

What Is Design Thinking and Why Bankers Should Care Design thinking is a paradigm for creating solutions to a human need. When you solve a human need, you deliver a business value. Design thinking puts people first and incorporates what is feasible and financially viable. Ultimately, a design thinking approach leads to better products, improved services and efficient processes – all of which have a direct impact on your customer’s experience with your bank. Before you think that you don’t have the people to participate in design thinking activities, know that properly led design thinking sessions allow anyone to effectively participate from customers to cross-functional teams.

5 Phases of Design Thinking There are many different schools of thought on the design thinking process, anywhere from three to seven phases. Although all variants are similar, we focus on the fivephase model by the Hasso-Plattner Institute of Design at Stanford, which is also known as d.school. The cornerstone phase of design thinking is Empathy. There are many ways to gain empathy with the humans you design for including interviewing, storytelling, fieldwork observations and bodystorming (or experiencing activities with someone).

Until you’re able to understand the needs of those you are designing for, you will miss the mark nearly every time.

The next phase is to Define the problem statement by identifying the person we’re solving for, the needs they have and insight on their desired outcome. With a welldefined problem statement you can then move into the third phase which is Ideation.

You might be thinking that ideation is the equivalent of brainstorming and while that is one way to ideate there are many, many others. You may undertake a mind mapping exercise or co-create a customer

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journey map. The sum of it is, there are many different tools and approaches to ideation and a particular design thinking project may need several to uncover evolutionary and revolutionary solutions.

The last two phases are where you start to see the rubber meet the road. The fourth phase is Prototyping. You can prototype many things from processes to conversations to forms to actual software.

Perhaps the problem facing your bank is your loan application process. By prototyping options based on the previous phases, you can gain greater insight into what works and what doesn’t work before spending a great deal of time or money developing a final solution. Which brings us to the fifth, and final, phase which is testing.

Testing a prototype is invaluable to gaining real world feedback on the solution or solutions your team is creating. Tests should be planned and managed so that structured feedback can be gathered and analyzed in an efficient way to inform the next iteration of the prototype, or redefining the problem statement. Yes, design thinking processes are not linear, and learnings may lead the team all the way back to what feels like the beginning. Better to be solving for the right problem, though, than creating an elegant solution or product that doesn’t meet anyone’s needs.

Design Thinking in a Bank Setting Design thinking can be applied nearly anywhere within a bank including product design, service design and organizational change. If design thinking is done well it can provide early buy-in to change, build collaboration among individuals who might otherwise never cross paths, describe opportunities that otherwise might be missed and position you to innovate quickly

and more safely through small successes and helpful feedback.

According a study by Gartner, 89% of companies will compete mainly on the customer experience they provide. Design thinking is useful in safely innovating the bank customer’s experience. In a study called dmi:Design Value Index, funded

by Microsoft, it showed that design-led organizations maintained a significant market advantage. Finally, Deloitte shares in their research paper Reshaping the retail banking experience for the customer of tomorrow, “The likely implication for financial services organizations is clear – if they want to maintain loyalty among their current client bases, financial institutions must build an improved customer experience and use it as a competitive differentiator.”

During the ABA Marketing Conference in October, I’ll be sharing more about design thinking and for those brave enough, we will have some interactive activities to demonstrate some of the principles we’ve covered in this article.

Amy Baker Chief Innovation Officer | Strategy Lead SPRY Brands Amy is an energetic, results-driven marketing and UX leader with B2B2C expertise seeing possibilities others can’t, defining actionable solutions and articulating opportunities to diverse business stakeholders. She has a unique ability to quickly see connections between disparate things, mentally filter options through formal strategic approaches and hone in on actionable steps that produce profitable results. Clients served include Fifth Third, Ethicon Endo-Surgery, P&G, Roche Diagnostics, Batesville Casket, SpendBridge, Humarian and SEP. You might find Amy on the roller derby track as Lay ‘Em Out Lydia.

Three Ways We’re Fighting Fraud Fighting fraud requires a multi-faceted effort and it takes everyone working together to protect users from fraud and the theft of personal information.

When talking to financial institutions the one issue that always comes up as a huge pain point is fraud. Fraud is a multi-billion industry in the United States. I say industry because that’s what it is. For the most part, people perpetrating these crimes aren’t operating alone. Many times the fraud is carried out by organized criminal groups.

The size and scale of the organizations behind fraud demand a response that is comprehensive. While the technologies to fight fraud continue to improve, so do the tactics fraudsters use. It’s an ongoing battle — that’s why at SHAZAM we’ve taken a more holistic, broader approach to fighting fraud.

Advocating for stronger penalties Fraudsters don’t operate in just one community or one state. Many times, a type of fraud will move from one region of the country to another, like a malignant wave. For that reason, we’ve engaged policymakers at both the state and federal levels to develop an overarching set of security standards. We believe mutually agreed upon, third party standards will lead to stronger user authentication and increased innovation in security technology. We’ve also helped our state association partners craft stronger penalties for crimes like skimming and card cloning so criminals know there will be consequences if they’re caught.

Building communities against fraud Penalties and policies are only good if the communities they protect are educated.

Across the country SHAZAM is partnering with financial institutions, prosecutors and law enforcement to share information and educate. We’ve developed curriculum

to teach law enforcement how to spot fraud, what kind of evidence they need to convict and how to partner with our financial institutions to share compromised card information. SHAZAM financial institutions are leading the way in their own communities by inviting SHAZAM experts to educate local businesses on how to keep cardholder information safe.

Educating cardholders Finally, we know one of the best tools in the fight against fraud is educated and aware cardholders. That’s why we’re providing our institutions with simple information on what to look for when using a card at an ATM, inside a business or at an automated fuel pump. This effort multiplies the number of eyes looking for signs of compromise.

prevention help community institutions enhance their security measures and ensure regulatory compliance. As a member of the Midwest Financial Fraud Investigators, Mike partners with law enforcement and other financial institutions to share information about fraud.

SHAZAM is a national member-owned debit network, processor and core provider delivering choice and flexibility to community financial institutions throughout the U.S. since 1976. SHAZAM is a single-source provider of the following services: credit card, debit card, core, fraud, marketing, merchant and more. Learn more at shazam.net.

Mike Burk Senior Robbery and Crisis Management Consultant

The fight against fraud requires collaboration. No one party is responsible for securing a transaction. All the players, from merchants to card-issuing financial institutions, are paying a high a price for fraud. By engaging everyone, including cardholders and elected officials, SHAZAM is working to take the fight to the fraudsters.

SHAZAM

From teaching criminal justice classes, investigating bank robberies and embezzlement as a sergeant detective, and serving as the founding director of the Iowa 9 201 , Central Homeland Security 9 r 8 ine at e b Training Center, Mike Burke l o Oct ster on mega.aspx is an invaluable resource i / Reg bankers.org e at for organizations looking n ark www. pho 741. y to improve their underb or 376.3 standing and training in .

501 robbery and crisis management.

From teaching criminal justice classes, investigating bank robberies and embezzlement as a sergeant detective, and serving as the founding director of the Iowa Central Homeland Security Training Center, Mike Burke is an invaluable resource for organizations looking to improve their understanding and training in robbery and crisis management. His timely, comprehensive and thoughtful presentations regarding robberies, active-shooter scenarios and loss

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Arvest Bank One Million Meal Initiative Continues Growth It was important that all our markets saw the importance of this and got behind it as well,” said Tiffany Watkins, Vice President/ Marketing Manager for the North Central Arkansas region.

Arvest Bank is on a mission to reduce food insecurity in Arkansas through the bank’s Million Meals campaign. The bank’s decision to provide one million meals was based on the fact hunger is an issue in every community it serves. In 2017, 11.8 percent of American households were food-insecure, meaning they had difficulty at some time during the year providing enough food for all their members due to a lack of resources.

“Arkansas is ranked second in the most insecure state in the nation. That’s not a good ranking. We also reach into Oklahoma and they are ranked sixth. It’s a huge need in our communities that people need food and that’s what Million Meals provides,” says Beth Presley, Vice President/ Marketing Manager for the Fort Smith River Valley Region.

Arvest Bank’s Million Meals initiative challenges bank associates, customers and community members to participate in fundraising efforts and nonperishable food drives to fight hunger in the more than 135 communities the bank serves.

“It wasn’t just ‘hey we’re collecting the food and money at our bank’, it was doing a lot of foot work to really help grow Million Meals into what it is today.

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Each branch has its own goal for providing a certain number of meals. The food partners that Arvest works with use food buying partners that can take one dollar and turn it into five meals because of their food buying power and connections. The campaign used to be called 1 Million Meals but underwent a name change because of how large the program had become.

“Our branches all like to be a little competitive and raise the most, but we want to do it for the right reasons. We know the more we raise, the more our communities benefit,” says Presley. “I’m just very proud of our branches and our community.”

This year’s campaign total of 2,468,873 meals was made possible through donations from the bank, Arvest associates, customers and community members through fundraisers, events and nonperishable food drives in all Arvest branches throughout April and May 2019.

“It’s actually been pretty incredible. I remember the first few years, we were happy if we got the million meals from our bank groups. It was a struggle. The most inspiring thing that I have witnessed over the years is seeing how all the communities have gotten behind the campaign. They lock arms with Arvest because they know it’s their neighbor or someone at work, or somebody they know who could use those food services and agencies,” remarks Tiffany Watkins, Marketing Manager for North Central Arkansas.

All money and food items raised through this campaign directly benefited 70-plus organizations feeding local communities in Arkansas, Kansas, Missouri and Oklahoma.

Arvest Bank won the Silver Anvil Award for the 2018 Million Meals campaign. The Silver Anvils, presented annually by the Public Relations Society of America, are touted as the Oscars of the communications industry.

They are designed to recognize the best public relations campaigns of the year and the highest standards of performance for the profession. Arvest won in the category of Most Effective Corporate Social Responsibility Campaign.

Since its launch in 2011, Arvest Bank’s Million Meals has raised a nine-year total of 16,068,971 meals, which includes more than $2.8 million in funds given directly to dozens of food partners. The bank is already gearing up for its 10th anniversary in 2020.

MEMBER NEWS Arkansas Financial Professionals Receive Prestigious Banking Diploma The Graduate School of Banking at Colorado (GSBC) is proud to honor three Arkansas financial professionals for their graduation from its 25-month program.

The graduates pictured (L to R) include: • Levi K. Price, Arvest Bank, Siloam Springs • Kyle Kerwin, First National Bank of NWA, Rogers • John W. Ahlen, Arkansas State Bank Department, Little Rock Graduates receive a diploma upon successfully completing six weeks of classroom training–two weeks for three consecutive years–which focus on general management and technology, leadership and human resource management, financial management and lending. The students also completed intersession projects and ended their curriculum at GSBC with an extensive bank management simulation course.

GSBC awarded 156 total graduates from across the nation with its prestigious diploma in banking July 25 during a ceremony at the University of Colorado in Boulder, Colo.

Thank you to the ABA BankPAC donors Alan AlanClark Clark Armor ArmorBank Bank Arvest ArvestBank Bank Bruce BruceWiley Wiley Cathy CathyOwen Owen Cecil CecilAlexander Alexander Connie ConnieFeatherstone Featherstone Danny DannyR.R.Criner Criner Deretha Walker Deretha Walker Donnita Gerster Donnita Gerster Eagle Bank & Trust Company Eagle Bank & Trust Company Elizabeth Kelley Elizabeth Kelley Farmer’s Bank & Trust First Arkansas Bank & Trust First Arkansas Bank & Trust First National Bankers Bank First National Bankers Bank

Generations Generations BankBank Harry Melhorn Harry Melhorn E. Peacock JamesJames E. Peacock James Huffman James Huffman Jay Ertel Jay Ertel Jeff Lynch Jeff Lynch Jim Cargill Jim Cargill Newberry KarleaKarlea Newberry Katherine Mullis Katherine Mullis Larry T. Wilson Larry T. Wilson Lorrie P. Trogden Lorrie P. Trogden Mike Wilson Mike Wilson Kathryn Roberts Kathryn Roberts Patrick Hagge Patrick Hagge Peoples Bank

Piggott State Bank Peoples Bank Randy Piggott State BankScott Rita Rita Herrmann Herrmann Robert Hopkins Robert Hopkins Robert L. Robinson, IV Robert L. Robinson, IV Sara E. Cobb Sara E. Cobb Sara Holmes Sara Holmes SBS CyberSecurity SBS CyberSecurity Shannon Snow Shannon Snow Simmons Bank Simmons Bank Stone Bank Stone Bank Terry L. Toney Terry L. Toney Todd Smith Thomas Bond Thomas Bond

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

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MEMBER NEWS Miles Earns Legendary Status Integrity First Bank, a division of The Farmers & Merchants Bank of Stuttgart, Ark., recently celebrated I. Joe Miles and his retirement from 43 years in banking. A Newport native and avid lover of community, music, and baseball, Miles is a stranger to few across the state. During his banking career, Miles has served in either a regulatory role or executive position for financial institutions in Little Rock, Newport, Arkadelphia, Russellville, and most recently, Mountain Home.

In 2002, Miles was hired as Executive Vice President, Loan Division Manager, for Integrity First Bank. He then served 13 years in his most recent position as Integrity First Bank President which included the role of Chief Lending Officer. His experience with mergers and acquisitions was vital in the expansion of Integrity First Bank’s footprint from 2004 to the present.

When he wasn’t on the field, he was volunteering time and energy for numerous local community and state-wide organizations. As Chairman of the Arkansas Bankers Association from 2008-2009, Miles was a leading team player during a time of economic precedence. He has also served as past chairman the for Newport Parks & Recreation Commission, Arkansas State Police Retirement System, Focus Mountain Home, Twin Lakes Community Foundation, Arkansas State University System Foundation, and the Barret School of Banking Board of Regents.

Miles’ career journey has taken him through four decades of market ups and downs, introduced him to an all-star network of colleagues, and crossed his path with countless community members—all of whom he can, undoubtedly, recall player profiles with utmost accuracy and precision.

We celebrate his achievements and congratulate him as he enters into retirement.

El Dorado-Based First Financial Bank to Acquire The First National Bank of Wynne First Financial Bank, headquartered in El Dorado, Arkansas, announced that it has entered into a definitive agreement to acquire The First National Bank of Wynne, headquartered in Wynne, Arkansas with branches in Cherry Valley, Forrest City, Harrisburg, McCrory, and Wynne.

The purchase is contingent on the approval of regulatory agencies and the satisfaction of other conditions set forth in the definitive agreement.

The closing of the transaction is expected to occur in the fourth quarter of 2019, following the filing of regulatory applications and approval of federal and state banking authorities.

Customers of First National Bank of Wynne should continue to conduct business as normal and will receive notifications regarding the progress of the transaction well in advance of any changes. They’ll also be able to use their same checks, debit cards, and online banking services at the usual convenient locations. If customers have questions, they should contact their local office.

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Sean Williams, President and CEO of First National Bank of Wynne stated, “I couldn’t ask for a better partner for the First National Bank family than First Financial Bank.

We share the same values and vision of community banking, and I believe this is a win for our customers and the communities we serve. I look forward to working with Chris and his team to make this a positive experience for our customers and employees.”

“Since 1934, First Financial has provided community bank services and local leadership across Arkansas and Mississippi. We’re excited to expand our retail footprint into Cross County and northeast Arkansas,” stated Chris Hegi, President and CEO of First Financial Bank. “Finding the right partner in growing our bank was very important to us. It’s going to be a good fit and we look forward to investing in the people and businesses in the northeast Arkansas market.

We expect a very smooth transition for employees and customers alike, and we’re excited to bring our award-winning hometown service to customers at this location”, he continued.

Cathy Owen Receives Award

Hosted at the Clinton Presidential Center, the Sandra Wilson Cherry Award dinner celebrated honoree Cathy Owen for her commitment to the community. Cathy is chairman of Eagle Bank and Trust and is the first woman to serve as chairman of the Arkansas Bankers Association.

Proceeds from the evening support The Gaines House.

Established in 1967, the Gaines House provides residents with transitional programs that empower individuals from homelessness to independent living.

View more pictures online at: http://www.invitingarkansas. com/event-gallery/gaineshouse-dinner/?fbclid=IwAR 0gBsrkbvSg4zBDKOVtsnsac q61vnP2dYfU0BE7cQItjaaNgK2PoX3o-8

MEMBER NEWS Batesville Bank Awards Construction Grant for Historic Downtown The Batesville Downtown Foundation has authorized two $5,000 Citizens Bank Impact Grants to Sloan Construction to renovate two buildings along Central Avenue near Historic Downtown Batesville.

The buildings, which are located at 151 North Central Avenue and 171 North Central Avenue, are believed to date back to the mid-1800s, according to Nick Sloan, owner of Sloan Construction, which is handling the renovation work.

The grants to Sloan are part of the Citizens Bank Impact Loan & Grant Program, a unique, nationally program recognized by the American Bankers Association for community development. The Citizens Bank program began in 2016, creating a $10 million redevelopment fund for low interest rate loans and a grant pool exceeding $100,000 to benefit the historic district.

“The Citizens Bank downtown revitalization effort has generated more than two dozen commercial loans that have funded over $4.5 million in projects, and another two dozen grants that have provided nearly $124,000 toward renovations,” said Phil Baldwin, Citizens Bank Chief Executive Officer. “Demand for the loans and grants remains strong.”

Citizens Bank Impact Grants have helped numerous downtown property and business owners with such needs as painting, restoring exterior finishes and materials, exterior lighting, awnings, sidewalk renovation, and landscaping. Recipients of the grants are determined by the Batesville Downtown Foundation.

Sloan said he intends to renovate the two buildings, with current plans to develop a pair of two-bedroom apartments on the second story of the building at 171 North Central Avenue.

Considerable work has already been done to shore up the integrity of both of the long vacant structures. A long list of other needs to be addressed includes replicating the architectural style of the building’s windows, fortifying the rock and brick walls, and general painting. Definitive plans about the future uses of the remainder of the space will be made some time in the future.

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BANKER NEWS & MOVES Meadows, Morgan join First Financial Bank in Lending Division

sumer Lender at our Main Street location in El Dorado. Jeremy will report to Scott Walker, Market President. A 2013 graduate of Southern Arkansas University, Morgan was previously employed as a teacher and coach at West Side Christian School and most recently as a team member with State Farm insurance. He and his wife, Lacey, have been married for 5 years. She is the Volunteer Coordinator at CASA and they have a 4 year old son named Judah. Jeremy volunteers as a mentor at Yocum Elementary and works with the youth group at Wyatt Baptist Church.

First Financial Bank recently announced the addition of Alan Meadows and Jeremy Morgan to the lending division at their Main Street location in El Dorado, Arkansas.

Alan Meadows joins FFB as a Commercial Loan Officer at their MainStreet location and will report to Scott Walker, Market President. He received his BBA in Accounting from Southern Arkansas University and his Master of Science in Education degree from Harding University.

Jerry Named to First Financial Bank Board of Directors First Financial Bank is proud to announce the addition of Melissa Jerry as a member of their Board of Directors, effective July 17, 2019. Ms. Jerry began her banking career in 1989 as an internal auditor for the National Bank of Commerce in El Dorado (now Simmons Bank of El Dorado) and was later promoted to CFO. She joined First Financial Bank in 1999 as Chief Financial Officer, and was promoted to Assistant Secretary in 2002. Most recently, she was promoted to Executive Vice President in 2015 and has assumed responsibilities for oversight of Operations, Loan Servicing, and IT departments.

Meadows worked as a Partner/ Producer at United Insurance in El Dorado from 2004 to 2013 and has most recently managed the Corporate Insurance Department at Murphy USA since 2016.

Meadows and his wife Cynthia have two children, Caroline and Caden, who both attend El Dorado Public Schools. Cynthia works as a realtor for Coldwell Banker Dumas & Associates in El Dorado. Alan is currently serving as a commissioner for both the Ouachita River Commissionand the El Dorado Advertising and Promotion Commission, a board member for the El Dorado Boys’ and Girls’ Club, andt reasurer/ board member for Camp Kurios youth camp.

“Melissa has been an integral part of our success and growth over the past 20 years”, stated Jeff Nolan, chairman of the board at First Financial Bank. “Her leadership and work ethic will be

Jeremy Morgan will be serving customers in his role as a Con-

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a great asset to both our board and the bank as we continue to execute our strategic plan and provide greater value to our shareholders, our employees, and the communities where we do business.”

Melissa and her husband, Randy, have been married for 32 years and have three children and nine grandchildren. She is a member of the AICPA, Arkansas State Society of CPAs and the South Arkansas Chapter of CPAs. In 2011, she was a finalist for Arkansas Business’ CFO of the Year in the “Large Banks” category and currently serves on the board of the Arkansas Community Bankers Association.

A leader in her local community, she has previously served as a Commissioner for the El Dorado Water Utilities, and as a board member for both the SouthArk Community College Foundation and the Union County Community Foundation. She currently serves on the SouthArk Community College Board of Trustees. Melissa was recognized as “Outstanding Alumna” of SouthArk Community College in April, 2016.

She attends First United Methodist Church of El Dorado, where she serves on the Finance Committee. Her hobbies include fishing, golf, and spending time at the lake.

Arvest Bank Hires David Michael Arvest Bank is pleased to announce it has hired David Michael as a commercial banker in North Little Rock.

Michael, who has more than 18 years of industry experience, is joining Arvest after previously serving Bank of the Ozarks as vice president of training, Windstream Communications as a claims recovery manager and CSI/Reliance Financial Services as a vice president. In his new role, Michael will be tasked with advising commercial clients on all their business finance needs.

“We are thrilled to add David to our team,” said Marcus Guinn, loan manager for Arvest Bank in central, northeast, and southwest Arkansas. “His experience and expertise will be a big benefit not just to the bank but, more importantly, to our clients and our community.”

Michael is originally from Pine Bluff, Arkansas. He now lives in Little Rock with his wife, Kay. Michael is a volunteer for multiple community organizations, including GIG and Young Life. He also previously taught banking classes for the Arkansas Institute of Banking.

Simmons Bank Names Chief Digital Officer Simmons Bank has named Alejandro “Alex” Carriles executive vice president and chief digital officer. Carriles’ responsibilities include direct oversight of Simmons’ digital banking strategy, customer experience through digital channels and customer acquisition through digital tools.

Carriles joins Simmons from BBVA Compass, where he most

BANKER NEWS & MOVES recently served as executive vice president and director of Retail Customer Solutions Development. In this role, he led mobile and online banking channels, as well as digital account origination for all consumer and small business products. Carriles also spearheaded the development of digital sales platforms for deposit accounts, personal loans, credit cards and insurance products.

“Alex is an industry leader whose innovation, management skills and track record for digital banking success are truly extraordinary,” said George Makris, chairman andCEO of Simmons First National Corporation. “We are eager for our customers to experience the impact of his talent through our digitalofferings.”

Carriles brings more than 25 years of experience to his role at Simmons, having overseen technology projects for international and domestic financial institutions,private sector corporations and government agencies. He has served as a keynote speaker for numerous banking conferences across the United States and in countries such as France, Sweden, Malaysia and the United Kingdom.

In 2012, Carriles was recognized as an honoree in American Banker’s “Mobile Banker of the Year” awards. The following year, Bank Innovation named him to their list of “2013 Innovators to Watch: 44 Executives Shaping the Future of Banking.”

A founding member of the American Banker’s Digital Banking Leadership Council, Carriles has also served as a member of the Digital Committee of the Consumer Bankers Association since 2016.

Carriles holds a bachelor’s degree and summa cum laude distinction from the Monterrey Institute of Technology in Monterrey, Mexico

and a master’s degree from IPADE Business School in Mexico City.

He has also completed executive education and corporate management programs from institutions ranging from the University of Texas at Austin and Wharton Executive Education to the IESE Business School in Spain.

Citizens Bank Promotes Michael Hoggard Citizens Bank has promoted Michael Hoggard to the position of Vice President - Controller and Information Security Officer, according to Karen E. Shaw, Executive Vice President and Chief Financial Officer.

In addition to his continuing responsibilities for management and supervision of all financial-related activities of the bank, Hoggard is assuming the new responsibilities of Information Security Officer.

“As Information Security Officer, Michael will be responsible for overseeing the bank’s Information Security Program,” Ms. Shaw said. “Michael has proven himself to be a very effective leader within our bank, and we look forward to his continual dedication to excellence as he takes on these new duties.”

Prior to joining Citizens Bank in 2017, Hoggard spent ten years with the public accounting firm of Erwin and Company in Little Rock, managing a diverse range of clients, including banking institutions throughout Arkansas.

Hoggard is a graduate of Harding University where he earned a Bachelor’s degree in Business Administration. He is a May 2019 graduate of Leadership Arkansas, is a member of the American Institute of Certified Public Accountants, and attends Fellowship Bible Church.

He and his wife, Ashley, live in Batesville with their children, Caden and Sloane.

Stone Bank Adds Two in Operations Alicia Anaya has joined Stone Bank as Operations Officer and Cody Thomas as Operations Assistant.

Anaya is a 34-year banking veteran and has held positions at several Arkansas banks including One Bank and Trust and Metropolitan Bank and Trust.

She is an Accredited ACH professional (AAP).

Thomas, a graduate of Wilmington University, received an associate degree in computer information systems and a bachelor’s degree in computer network security.

Stone Bank has full-service facilities in Little Rock, Mountain View, White Hall, and Harrison and a loan production office in Cave City.

Fall 2019

Lexi Lane Joins Grand Savings Bank as Community Bank Trainee Grand Savings Bank is pleased to announce the addition of Lexi Lane as Community Bank Trainee. A longtime resident of Grove, OK, Lexi is rooted in Grove’s growth and development.

Having worked most of her life on her family’s local cattle ranch, Lexi learned early on that a strong work ethic and a love of community are precious commodities. Fascinated by workings of finance and commerce from childhood, an interest she attributes to her father, Lexi earned her degree in Economics and International Business from the University of Oklahoma in 2017 . She then went on to complete her Master’s of Science in Finance from Regent’s University in London.

In order to best serve our communities, it is important to remain current and relevant in today’s financial climate, and GSB is pleased to attract new and passionate talent like Lexi, and we are committed to providing a grand experience as she begins her career with GSB. “Lexi is bright, enthusiastic, and very committed to the future of Northeast Oklahoma, Northwest Arkansas and Grand Savings Bank. She brings a very unique and valuable perspective to the table, and we are happy to welcome her to the GSB family,” Natalie Bartholomew, CAO, Grand Savings Bank.

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BANKER NEWS & MOVES First National Bank at Paris Announces Staff Addition for its Clarksville Branch Jarrod Yarnell, President, First National Bank at Paris, has announced that Chona Archer has been hired as Loan Assistant for the bank’s branch in Clarksville, First National Bank at Clarksville. Archer, who was previously employed by an area financial institution as a Financial Sales Representative and Consumer Loan Advisor, attained a bachelor’s degree in Business Management at the University of Cebu in the Philippines. In her previous position she was Teller of the Year two times, and in 2017 was Financial Sales Representative of the Year, Licensed Banker of the Year, and Consumer Loan Advisor of the Year.

Today in Texarkana, Texas, where she worked as a reporter and in advertising sales. She also worked as an editorial assistant for Four States Living Magazine.

Jeff Whitener has been promoted to Commercial Loan Officer, Sr & Regional Credit Officer.

Whitener has 5 years of service with Farmers Bank & Trust in Magnolia, AR.

“We are excited to add Jayme to our team here in Siloam Springs and believe she will be a great fit with both the bank and the community,” said Lori Winesburg, sales manager for Arvest in Siloam Springs.

Janet Choate has been promoted to Commercial Loan Officer. Choate has 18 years of service with Farmers Bank & Trust in Hope, AR. Cynthia Ortiz has been promoted to Loan Assistant. Ortiz has 4 years of service with Farmers Bank & Trust in Hope, AR.

Steven Sosebee, Senior Vice President, Clarksville Branch said, “We are very pleased and excited to have Chona join our team. With her experience and achievements in the financial industry, we know she is going to be an excellent addition to an already great team of local banking professionals”.

Melissa Winters has been promoted to Lead Teller at Farmers Bank & Trust in Magnolia, AR.

Farmers Bank Announces Promotions

Arvest Bank Hires Vaughan in Siloam Springs

Laura Drake has been promoted to AVP Internal Audit Officer.

Drake has 20 years of service with Farmers Bank & Trust in Magnolia, AR.

Arvest Bank is pleased to announce it has hired Jayme Vaughan as marketing manager in Siloam Springs.

Heather Baxley has been promoted to Officer Card Services & ATM Operations Manager. Baxley has 6 years of service Farmers Bank & Trust in Magnolia, AR.

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Brenda Holley has been promoted to Vice President and Retail Loan Officer, Sr. Holley has 20 years of service with Farmers Bank & Trust in Magnolia, AR.

Vaughan joins Arvest from TXK

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At Arvest, Vaughan provides leadership for the Siloam Springs’ advertising, public relations and marketing efforts, among other responsibilities.

Vaughan earned a bachelor’s degree in mass communications, with a minor in marketing, at Texas A&M-Texarkana.

First Service Bank expands its Little Rock team First Service Bank announced that Chris Pledger has been hired as Loan Officer & Business Development in our Little Rock market.

“We are excited to be expanding our lending team and feel Chris will be a great addition and will help enhance our customer experience,” said Bill Puddephatt, President of our Little Rock market.

Chris Pledger was raised in Sheridan, AR and is a 2013 graduate of Arkansas State University, where he majored in Business Administration and Marketing.

Chris and his wife Libby call Little Rock home, where he enjoys playing golf. Chris is active in BNI of America and the Travis Wood Foundation which raises money for Safe Haven. Chris is located at our newly renovated, Little Rock office at 500 Hardin Road on the corner of Financial Centre Parkway and Hardin Road.

“Our Little Rock team is proud to have Chris join us, and we feel that his strong banking background will be an asset to our Little Rock team and most importantly to our customers,” said Tom Grumbles, CEO and President of First Service Bank.

First Community Bank Welcomes Brandon Brewer to the Trust Department First Community Bank has hired Brandon Brewer as senior vice president and regional trust manager to the Jonesboro region.

With over 20 years of trust experience, Brandon will be a valuable asset in providing knowledgeable care for all of First Community Bank’s customers and assisting them with their trust needs.

Brewer, who grew up in Lake City, has come home to Arkansas after managing a successful and highly active trust department in Dyersburg, TN. Brewer obtained a bachelor’s degree in business from Arkansas State University and has earned his Certified Trust and Financial Analyst (CTFA) designation from the American Bankers Association (ABA).

“I can’t think of a better person to entrust with something as important as the trust funds and documentation of our customers,” said Allen Williams, market president for the Jonesboro region. “Brandon is both personable and knowledgeable; he takes the time to explain things to customers so they feel both informed and empowered in making these long-reaching decisions.”

INFORMATION = POWER Get in shape for your next exam!

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First Security Bank @fsbank

Shout out to @FSBank of Conway for your donation of over 750 cereal boxes for the #thv11summercereal drive! #unitedtofighthunger @ATT @HilandDairy @THV11

Simmons Bank

because #BankersGiveBack!

MNB @MalvernNationalBank

June 24 at 1:289 PM MNB joined THV11 and the Arkansas Foodbank to celebrate the 19th year of the Summer Cereal Drive!

527 likes Our Pine Bluff team raised $1,675 for storm and flood victims through a jean fee fundraiser. Read more on pg. 12!

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Email photos + stories of your bank giving back to be highlighted in The Arkansas Banker and through ABA Social Media channels to jessica.sahene@arkbankers.org.