The Arkansas Banker February 2016

Becoming a Leader that You Would Follow

Security & Fraud Outreach

The Arkansas

Banker

Banks Do Have Tangible Inventory Volume XCX, No. 2 | February 2016 February 2016 | The Arkansas Banker

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APR IL 9 TH , 10:24 A .M .

GET TING A POSITIVE RETURN ON TRUST IN AN INS TANT,

LU CI A M A R T I N E Z ACH I E V E D T H E R E WA R D O F A R EL AT I O N S H I P B U S I N E S S

A simple handshake wasn’t enough when Lucia Martinez’s client walked in to hand-deliver her final loan payment.

Lucia’s community bank had backed the city’s only woman-run auto-body shop for more than 10 years. Supported by CNA’s deep understanding of business risk, the bank had the confidence to invest in good ideas from uncommon sources. Now Lucia was ready to hug her friend, a thriving small business owner ready to talk expansion. Great job, Lucia.

To learn more about our broad portfolio of insurance products and services for community banks visit, www.cna.com/communitybanks.

CNA is proud to be the endorsed carrier of the Arkansas Bankers Association.

Please remember that only the relevant insurance policy can provide the actual terms, coverages, amounts, conditions and exclusions for an insured. All products and services may not be available in all states and may be subject to change without notice. The examples provided in this material are for illustrative purposes only and any similarity to actual individuals, entities, or places is coincidental. CNA is a registered trademark of CNA Financial Corporation. Copyright © 2014 CNA. All rights reserved.

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The Arkansas Banker | February 2016

The Arkansas

Banker Volume XCX, No. 2 | February 2016

The Arkansas Banker is the official publication of the Arkansas Bankers Association.

CONTENTS

EDITORIAL OFFICE

1220 West Third Street Little Rock, AR 72201 Phone 501.376.3741 | Fax 501.376.9243 www.arkbankers.org

President’s Column

6

Emerging Leaders Update

Kevin Thompson

8

Washington Update

COLUMNS

EDITORIAL

The Arkansas Banker seeks to reflect the banking news of Arkansas and other news of direct interest to the Arkansas Bankers Association. Statement of fact and opinion are made on the responsibility of the authors alone and do not represent the opinion or endorsement of the Arkansas Bankers Association. Articles may be reproduced with written permission only.

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Bill Holmes

Rob Nichols

20 Industry News

DEPARTMENTS

22 Professional Development 24 Member News 25 Banker News & Moves 27 Index of Advertisements

ADVERTISEMENT

The publication of advertisement does not necessarily represent endorsement of those products or services by the Arkansas Bankers Association. The Editor reserves the right to refuse any advertisement.

SUBSCRIPTION

10 Arkansas Bank Security &

Fraud Outreach

FEATURES

Subscription to The Arkansas Banker magazine, which began monthly publication in April 1917, is included in the membership fees to the Arkansas Bankers Association.

16 125 Years of the ABA:

National Defense Yes, Banks Have Tangible Inventory

MAGAZINE RATES

Cover price is $5.95 each. Annual subscription rates are $40.00 for members and $60.00 for non-members.

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.

14 Becoming a Leader That

You Would Follow

by Honey Shelton

COVER STORY

BKD’s Brian Gordon shares true stories of internal cash theft, and how your bank can prevent it.

See page 12

POSTMASTER: Send address changes to Arkansas Bankers Association, 1220 West Third Street, Little Rock, AR 72201.

February 2016 | The Arkansas Banker

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PRESIDENT’S COLUMN AmBA Government Relations Summit The American Bankers Association Government Relations Summit will take place next month, March 14-16, in Washington, D.C. The Summit presents a great opportunity for bankers to meet with our Congressional Delegation and representatives from regulatory agencies to ensure that they understand the principles that guide our industry and to incorporate them into policy. The Summit is open to all bankers, directors and trustees, and state associations. We encourage your participation and support.

The Government Relations Summit brings together 1,000+ bankers from across the country to speak to Congress and our regulators with a unified voice regarding the vital role our banks play, and the many challenges we face created by an ever growing regulatory burden. The most powerful testimony our legislators and regulators hear is your personal stories about the unintended consequences that have negatively impacted your customers.

Monday, March 14, is the Emerging Leaders Forum, from 12:30 p.m. – 4:00 p.m. This year, the forum has been expanded and will begin with a networking lunch leading into the program. This event will center on leadership development and the importance of advocacy. Attendees will also have the opportunity to share their leadership challenges and network with peers from across the country at a reception following the Forum.

After lunch 1,000+ bankers will head to Capitol Hill to call on our respective delegations, to lay out our most pressing needs. This is when we get to explain to our Congressional Delegation how regulation and legislation affects our customers when they are buying a home, financing a new car, or trying to expand their small business.

Wednesday morning, we will hear from: Senator Richard Shelby, Chairman of the Senate Committee on Banking, Housing and Urban Affairs; Ben White, columnist for Politico, who will give us a look at ‘behind-the-scenes” political intelligence; and Political analysts Charlie Cook and Stuart Rothenberg, sharing their election forecasts and analysis.

Please encourage your female CEOs and senior executives to participate in the Women’s Leadership Forum following the Government Relations Summit on March 16, 2016. The program will feature a panel of a women bank CEOs discussing how to develop, engage and retain women leaders, roundtable discussions and a networking lunch that will encourage an exchange of ideas and solutions sure to result in valuable takeaways.

Registration for the Summit is free. We encourage you to attend, and bring a lender, a director and for sure an emerging leader.

We are pleased to provide two $750 AmBA scholarships for our Emerging Leaders.

The scholarships can be redeemed through reimbursement for travel-related expenses.

Tuesday, March 15, will start with the general session, including presentations from: Dan Blanton, AmBA Chairman; Dana Perino, co-host of Fox’s The Five; and Blanton, Rob Nichols, AmBA President & CEO, and Congressman Jeb Hensarling, Chairman of the House Financial Services Committee, discussing AmBA’s Agenda for America’s Hometown Banks.

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The Arkansas Banker | February 2016

Arkansas Bankers with Congressman French Hill at the 2015 GR Summit

PRESIDENT & CEO BILL HOLMES

ABA EXECUTIVE COMMITTEE

Milestones in Banking to be Honored at 2016 Convention The ABA is proud of the 19,000+ men and women who serve the Arkansas banking industry and the connections they forge to make our hometown banks successful. We would like to recognize those individuals who are celebrating their 40-year and 50-year anniversaries of service to our banks with “Milestones in Banking” awards sponsored

by BKD, at a luncheon rated during the Mary Nell Jameson celeb Annual 40+ years at the 2015 ards Convention Milestones in Banking Aw on Thursday, May 12, and with a feature in The Arkansas Banker magazine. This is the second year that the ABA has offered this award.

Nominations are currently being sought for “Milestone Bankers.” All nominees should be actively employed in an Arkansas bank, and are eligible to receive specific milestone awards at 40+ and 50+ years of service, as long as they have not previously been recognized for that milestone.

Nomination forms can be accessed online at www.arkbankers.org: 50 Year Banker 40 Year Banker Milestone Bank

Parkway Bank, Rogers

ROBERT Y. TAYLOR | CHAIRMAN

SEAN WILLIAMS | CHAIRMAN-ELECT First National Bank of Wynne, Wynne

DAVE DICKSON | VICE CHAIRMAN Union Bank & Trust Co., Monticello

JUDY LAWTON | TREASURER Heartland Bank, Little Rock

CHUCK MORGAN | PAST CHAIRMAN Relyance Bank, Pine Bluff

BILL HOLMES | PRESIDENT/CEO Arkansas Bankers Association, Little Rock

ABA BOARD OF DIRECTORS PHIL BALDWIN | GROUP 2 Citizens Bank, Batesville

J. MICHAEL JONES | GROUP 5 Merchants & Farmers Bank, Dumas

GREG CONNELL | GROUP 2 The Farmers & Merchants Bank, Perryville

CRAIG MOBLEY | GROUP 4 First Financial Bank of El Dorado, El Dorado

TROY DUKE | GROUP 5 Gateway Bank, Rison

WILSON MOORE | GROUP 2 Bank of America, Little Rock

Regions Bank, Hot Springs

ELIZABETH FARRIS | GROUP 4

JERRY MORGAN | GROUP 1 Focus Bank, Jonesboro

GARY GOLDEN | GROUP 4 First State Bank of DeQueen, DeQueen

Eagle Bank, Little Rock

SCOTT HANCOCK | GROUP 3 Centennial Bank, Fayetteville

RANDY SCOTT | GROUP 1 Farmers Bank & Trust Co., Blytheville

DREW HARPER | GROUP 2 Bank of the Ozarks, Little Rock

MIKE SMITH | GROUP 5 McGehee Bank, McGehee

JON HARRELL | GROUP 3

JIM TAYLOR | GROUP 3 First Security Bancorp, Fayetteville

DARWIN HENDRIX | GROUP 4

STANHOPE WILKINSON | GROUP 3 Farmers Bank & Trust, Greenwood

CATHERINE OWEN | GROUP 2

First Bank, Rogers

Bank of Delight, Delight

CHARLES HORTON | GROUP 1 Fidelity Bank, West Memphis

ABA STAFF BILL HOLMES

KAMI TAYLOR COLEMAN

PRESIDENT/CEO 501.978.3602 | bill.holmes@arkbankers.org

VP/PROFESSIONAL DEVELOPMENT 501.978.3614 | kami.coleman@arkbankers.org

CARLA BRINKLEY

VP/CONTROLLER 501.978.3608 | carla.brinkley@arkbankers.org

AVA FRANKS

VP/DIRECTOR OF GOVERNMENT RELATIONS 501.978.3606 | ava.franks@arkbankers.org

TRACI LOGSDON

DIRECTOR OF COMMUNICATIONS 501.978.3603 | traci.logsdon@arkbankers.org

STUART THALHEIMER

EXECUTIVE ASSISTANT 501.978.3605 | stuart.thalheimer@arkbankers.org

JESSICA SAHENE

MARKETING COORDINATOR 501.978.3609 | jessica.sahene@arkbankers.org

BRENDA SCARBROUGH

ADMINISTRATIVE ASSISTANT 501.978.3600 | brenda.scarbrough@arkbankers.org February 2016 | The Arkansas Banker

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EMERGING LEADERS UPDATE Out with the Strip, In with the Chip We have all been there...standing in the check out line waiting to pay and it happens. The merchant machine has the chip activated terminal, but does it work? Can I swipe it anyway? It never fails; it is the opposite of what we do. If I swipe, I should have inserted the card. If I insert the card, the terminal is not activated for chips yet. But what should we do? Is there one option better than the other? Which option is best? With the pace we live these days, any delay frustrates us (and the people behind us).

I’m here to tell you more about the chip based payment cards and how we can help promote their use as well as protect our customer’s identity. We hear of data breaches, it seems, on a daily basis. Data breaches have affected tens of millions of consumers, and I would make a wild guess that each of your banks has a customer that has been a victim, large or small. These breaches are very well known by the names of the retailers whose security was compromised — Target, Neiman Marcus, Living Social, and the list goes on. So, it is up to bankers to instill continued confidence in paying with cards.

A chip card, also known as a EMV card (Europay MasterCard, Visa), has been around for nearly two decades with over 1.5 billion issued around the world. However, it has just recently been implemented in the United States. The EMV card is a new payment solution card that adds another layer of security when you pay. The plastic card has an embedded microprocessor chip that stores and protects the card holder’s data. You ask — How is it more secure? The chip generates

a unique, one-time code each time you insert the card, your purchase can only be approved with the chip generated code. And, the chip in the card is virtually impossible to duplicate, so no using the raised credit card numbers or copying the magnetic strip — it becomes the unique “fingerprint” of the card.

The implementation of the chip card in October of 2015 began with Visa & Mastercard issuing rules and guidelines for processors and merchants to support the EMV chip card technology. Once in effect, merchants who have not made their equipment EMV compatible may be held financially liable for card-present fraud that could have been prevented with the use of Chip-Enabled terminal. ATM owners who accept MasterCard have until October 2016 to upgrade their machines and Visa has given ATM owners until October 2017.

ELS PRESIDENT KEVIN THOMPSON

Vice President - Lending Centennial Bank Fayetteville

Banks are the leaders in preserving the security of data while adhering to strict regulatory and network requirements. But there’s more to it than that. When a data breach occurs, and it affects a customer’s bank card, we’re the ones that make them “whole.” We’re the ones that reimburse the customer for fraud. And, if the retailer doesn’t reimburse the bank — which in most cases they don’t — it’s the bank that takes the hit. We pay the price. We’re the ones who take the loss. Not the customer, not the retailer, just the bank. Thus, we as bankers must help usher the new changes and educate our consumers of the added benefits the security Chip Card provides the consumer, while helping the bank from fraud loss.

ABA EMERGING LEADERS SECTION COUNCIL

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KEVIN THOMPSON | PRESIDENT Centennial Bank, Fayetteville

Stone Bank, Little Rock

BLAKE FLETCHER | VICE PRESIDENT

Relyance Bank, Pine Bluff

EDUARDO ABRIL | GROUP 4 First State Bank of DeQueen, DeQueen

ROBERT HARGIS | GROUP 5 Parkway Bank, Monticello

GREG MCCARROLL | GROUP 2 Centennial Bank, Little Rock

JOHN BOLLINGER | GROUP 3 The Bank of Fayetteville, Fayetteville

BURT HICKS | GROUP 5 Simmons Bank, Pine Bluff

HUNTER NORTON | GROUP 3 First Security Bank, Fayetteville

JACOB BOX | GROUP 5 Simmons Bank, Dumas

ANDY HORTON | GROUP 1 Fidelity National Bank, Marion

GEORGE PURVIS | GROUP 3 Cornerstone Bank, Eureka Springs

TYLER DAVIS | GROUP 4 Diamond Bank, Ashdown

BLAKE JOHNSON | GROUP 1 Evolve Bank, Jonesboro

BEN RIDINGS | GROUP 2 Bank of the Ozarks, Little Rock

BRANDON GENTRY | GROUP 1 Cross County Bank, Wynne

MATT LAFORCE | GROUP 2 First Security Bank, Searcy

HUNTER WINDLE | GROUP 4 The Malvern National Bank, Malvern

The Arkansas Banker | February 2016

JOHN ANDERSON | SEC./TREAS.

ABA Live Events ABA Professional Development

Live Events...

Provide you with face-to-face interaction with an expert instructor!

MARCH 2016 8

| TRID Essentials (Integrated Disclosures) Holiday Inn Presidential, Little Rock Who Should Attend: Compliance Officers

29 | Writing Compliant Real Estate Evaluations Internally

The Chancellor Hotel, Fayetteville Who Should Attend: Credit Officers, Loan Officers, Credit Analysts, Loan Review Officers

8–11 | Trust School

Crowne Plaza, Little Rock Who Should Attend: New and experienced trust department personnel

16

30 | Writing Compliant Real Estate Evaluations Internally

Holiday Inn Presidential, Little Rock Who Should Attend: Credit Officers, Loan Officers, Credit Analysts, Loan Review Officers

| Introduction to Commercial Lending

Holiday Inn Presidential, Little Rock Who Should Attend: Commercial Lenders, Credit Officers, Branch Managers, Credit Analysts, Consumer Lenders, Loan Review Officers, Compliance Officers

APRIL 2016 4 – 8 | Commercial Lending School

Embassy Suites, Little Rock Who Should Attend: Commercial Lenders, Credit Officers, Branch Managers, Consumer Lenders, Loan Review Officers, Compliance Officers, Bankers with a minimum of one year experience in commercial lending or credit administration in a bank, or five years of banking experience. Bankers who have successfully completed courses in commercial lending, analyzing financial statements, economics, or equivalent coursework, or demonstrated knowledge

12–13 | Supervisor Boot Camp

Crowne Plaza, Little Rock Who Should Attend: Bank Supervisors, Branch Managers

19

| Credit Conference

20

| Bank Directors Workshop II

Crowne Plaza, Little Rock Who Should Attend: Credit Officers, Executive and Senior Management, Commercial Loan Officers, Loan Support Personnel

21

| BSA/AML Hot Topics

26

| Bank Internal Audit Fundamentals

27

| Risk-Based Internal Auditing

Crowne Plaza, Little Rock Who Should Attend: BSA Officers, Internal Auditors, Compliance Officers, Anyone involved in maintaining or auditing BSA compliance efforts Holiday Inn Presidential, Little Rock Who Should Attend: Internal Auditors, Executive Management, Board of Directors Holiday Inn Presidential, Little Rock Who Should Attend: Internal Auditors, Managers, Supervisors, Board of Directors

28–29 | Security Workshop

Crowne Plaza, Little Rock Who Should Attend: Security Officers, Cash Management Officers, Bank Legal Counsel, Operations Managers, Chief Information Officers, Branch Managers

Crowne Plaza, Little Rock Who Should Attend: Bank Directors, Executive Management, Shareholders, Senior Bank Officers

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

February 2016 | The Arkansas Banker

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WASHINGTON UPDATE Educating Consumers Helps Demonstrate Banking’s Value When I was a kid, my first hands-on experience with a bank was when I opened a junior savers account at a Seattle-based institution that is now part of Bank of America. I was flush with cash earned from a newspaper route and mowing lawns, and my father rightly advised me that I needed a safe place to deposit my money so it could earn interest and grow.

This was a big deal. Opening a first bank account was a valuable, confidence-inspiring right of passage in terms of my taking on greater realworld personal financial responsibilities. It also instilled in me respect for banking.

Looking back, I was taught valuable lessons during my regular visits with my father to my bank. I’m sure all of you continue to impart these lessons today to your new generations of customers walking through your doors.

And many of you go even further, delivering lessons on savings and credit in classrooms and community centers, lecture halls and student forums. It’s an important service to provide your customers and community that has the added benefit of reminding today’s youth of the banking industry’s value.

It’s imperative that tomorrow’s customers see the need for banks in their lives today. Our industry’s future literally depends on that.

This message about the need to preserve banking’s relevance is one that I’ve been spreading everywhere I’ve traveled since being named ABA’s CEO. Demographic changes make the message both urgent and compelling.

Consider that, according to one survey, one-third of millennials — the 84 million Americans born between 1981 and 2000 who now comprise onethird of the U.S. population — don’t think they need a bank at all. And a disturbing 71 percent say they would rather go to a dentist than listen to what banks have to say. The same survey, dubbed the Millennial Disruption Index, also found that nearly half of millennials are counting on tech start-ups to overhaul the way banks work.

A recent study by PwC and the Global Financial Literacy Excellence Center on young adults’ financial capability found that U.S. millennials are lacking in their understanding of financial concepts, with only 24 percent demonstrating basic financial knowledge. Thirty-four percent reported that they were “very unsatisfied” with their current financial situation, and 50 percent said they lacked the ability to cope with even a moderate financial shock.

ROB NICHOLS

President & CEO American Bankers Association

The study, which surveyed Americans aged 2335, also found that debt obligations, particularly from student loans, are a main point of concern.

Two-thirds said they carry at least one source of outstanding long-term debt, and 54 percent are concerned about their ability to repay. More than half reported carrying over a credit card balance in the last 12 months, and many reported turning to alternative financial services, such as payday lenders or pawnshops.

They should be turning to banks. That’s where they can find help with managing debt and building savings. That’s where they can find both “fintech” innovations and the commitment to security that comes with doing business with an FDIC-insured and regulated institution.

Banks have a good story to tell, and it’s up to us to tell it. Community outreach and financial education programs — like the ABA Foundation’s Teach Children to Save and Get Smart About Credit programs, and our newest Safe Banking for Seniors initiative — can help. These programs and others like it demonstrate your commitment to the people and communities you serve.

They help create more informed, financially capable and confident customers. And they help safeguard customers’ money by making people wise to poor money management habits as well as fraud.

They are a win for both banks and customers. If you already participate in such programs, thank you. If not, I strongly encourage you to enroll today. Learn more at aba.com/Engagement.

That’s tough to hear. But at the same time, other surveys show tremendous opportunity for banks to appeal to millennials and showcase their expertise. © 2016 2015 American Bankers Association. All rights reserved. Reprinted with permission.

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The Arkansas Banker | February 2016

ABA Webinars ABA Professional Development

Webinars...

Provide the option of training as many employees as you wish for one price, all from the convenient location of your home institution!

BSA Series: BSA Emerging Issues for 2016 3/3/2016 10:00 a.m. – 12:00 p.m.

Analyzing Business Financial Statements Part I 3/7/2016 1:30 p.m. – 3:30 p.m.

Regulation E Demystified 3/8/2016 1:30 p.m. – 3:30 p.m.

Health Savings Accounts 3/8/2016 1:30 p.m. – 3:30 p.m.

Lending Compliance 101 3/9/2016 1:30 p.m. – 3:30 p.m.

Patch the People: Security Awareness Programs for Customers & Employees 3/10/2016 1:30 p.m. – 3:30 p.m.

Building and Improving Your Compliance Culture 3/10/2016 1:30 p.m. – 3:30 p.m.

Analyzing Business Financial Statements Part II 3/11/ 2016 1:30 p.m. – 3:30 p.m.

Understanding ESOPs Part I 3/14/2016 1:30 p.m. – 3:30 p.m.

Eight Keys to Teller Excellence 3/15/2016 1:30 p.m. – 3:30 p.m.

Best Ever Compliance Checklists for Commercial Loans 3/16/2016 1:30 p.m. – 3:30 p.m.

Conquer Your Inbox 3/16/2016 1:30 p.m. – 3:30 p.m.

Understanding ESOPs Part II 3/17/2016 1:30 p.m. – 3:30 p.m.

W – 9, W – 8BEN, & W – 8BENE 3/18/2016 1:30 p.m. – 3:30 p.m.

Analyzing Business Cash Flow Part I 3/21/2016 1:30 p.m. – 3:30 p.m.

Hot Technology & Concerns: Overview of Current Topics 3/24/2016 1:30 p.m. – 3:30 p.m.

Analyzing Business Cash Flow Part II 3/25/2016 1:30 p.m. – 3:30 p.m.

Signature Card Danger Zones: Account Titling, Ownership & Access 3/28/2016 1:30 p.m. – 3:30 p.m.

Limited Liability Companies: Do’s and Don’ts 3/29/2016 10:00 a.m. – 12:00 p.m.

Record Retention & Destruction Policies 3/29/2016 1:30 p.m. – 3:30 p.m.

Online Deposit Account Opening: CIP, CDD, & Other Compliance Issues 3/30/2016 10:00 a.m. – 12:00 p.m.

UDAPP Review and Update 3/30/2016 1:30 p.m. – 3:30 p.m.

Opening New Accounts I: Legal Ownership of Consuming Accounts 3/30/2016 10:00 a.m. – 12:00 p.m.

Baby Boomers to Millennials: Managing Generations Successfully 3/31/2016 1:30 p.m. – 3:30 p.m.

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

February 2016 | The Arkansas Banker

9

Arkansas

Bank Security & Fraud Outreach

Building a Local Network to Reduce Fraud The Arkansas Bank Security & Fraud Outreach service is an investigative and fraud sharing information network designed to help Arkansas Bank Security Officers detect, discuss, and hopefully prevent, financial fraud. This service is a free networking opportunity for Arkansas bankers who would like to connect with colleagues within the industry in an effort to identify, prosecute and reduce fraud losses.

The Arkansas Bank Security & Fraud Outreach service is part of 3VR CrimeDex, which is used by over 2,500 members including law enforcement agencies, banks, and retailers. The service provides a platform to share information and collaborate to reduce crime and fraud in our communities and industry.

If you would like to be part of this group, please follow the instructions below: 1. Go to www.crimedex.com 2. Click the “Join Now” button 3. Complete the sign-up form: Click the radio button for “Group” Type “Arkansas” in the “Tybe to begin search” box Highlight “Arkansas Bank Security & Fraud Outreach” Click “Select Group,” and then click “Next” 4. After your application is approved, a confirmation will be sent to you via email. This may take a day or two as all members are individually verified.

If you are already a CrimeDex member, but not in the Arkansas Bank Security & Fraud Outreach group, send an email to matthew.gill@legacyar.com and you will be invited into the group portal.

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The Arkansas Banker | February 2016

AmBA Training ABA Professional Development

AmBA Training...

Provides valuable curriculum in a virtual classroom setting, with the leadership of industry professionals. All assignments and exams are completed online.

CRCM Online Review Course

Marketing Financial Services

Commercial Lending

3/14/2016 - 5/22/2016

4/18/2016 - 8/7/2016

5/16/2016 - 8/7/2016

Economics for Bankers

Law and Banking: Applications

General Accounting

3/14/2016 - 7/3/2016

Principles of Banking

4/25/2016 - 8/14/2016

6/6/2016 - 9/25/2016

Money and Banking

Managing Funding, Liquidity, and Capital

Managing the Bank’s Investment Portfolio

4/25/2016 - 8/14/2016

6/6/2016 - 7/17/2016

Principles of Banking

Principles of Banking

3/28/2016 - 5/1/2016

4/25/2016 - 8/14/2016

6/6/2016 - 9/25/2016

Principles of Banking

Supervisor Certificate

CTFA Online Review Course

3/28/2016 - 7/17/2016

4/25/2016 - 8/14/2016

6/20/2016 - 9/11/2016

Analyzing Financial Statements

Analyzing Financial Statements

Introduction to Trust Products & Services

4/4/2016 - 7/24/2016

5/2/2016 - 8/21/2016

6/20/2016 - 7/24/2016

Managing Interest Rate Risk

General Accounting

Consumer Lending

4/4/2016 - 5/29/2016

5/2/2016 - 8/21/2016

7/11/2016 - 10/30/2016

General Accounting

Consumer Lending

Economics for Bankers

4/11/2016 - 7/31/2016

5/9/2016 - 8/28/2016

7/11/2016 - 10/30/2016

Consumer Lending

Economics for Bankers

4/11/2016 - 7/31/2016

5/9/2016 - 8/28/2016

Introduction to Mortgage Lending

3/14/2016 - 7/3/2016

Principles of Banking

Law and Banking: Principles

4/11/2016 - 7/31/2016

5/9/2016 - 8/28/2016

Basic Administrative Duties of a Trustee

Principles of Banking

7/11/2016 - 10/30/2016

Introduction to Ag Lending 7/18/2016 - 9/11/2016

5/9/2016 - 8/28/2016

4/18/2016 - 5/22/2016

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

February 2016 | The Arkansas Banker

11

Yes, Banks Have Tangible Inventory ABOUT THE AUTHOR

Brian Gordon is a member of BKD’s Forensics & Valuation Services division and specializes in providing fraud investigation and forensic accounting services.

He is a Certified Fraud Examiner (CFE) and member of the American Institute of CPAs and Association of Certified Fraud Examiners.

BKD is an ABA Gold Associate Member.

There are plenty of regulations and risk areas for banks. However, banks often overlook the fact that they do have tangible inventory: vault cash. Since this can be a lower-risk area, some banks have few internal controls over the cash process or don’t enforce the controls already in place. The following examples show how having and enforcing internal controls can reduce opportunities for embezzlement.

EXAMPLE 1: THEFT OF $400,000 BY HEAD TELLER

At one bank, the head teller capitalized on the trust she had earned with other employees and lack of due diligence by the internal audit function, in addition to lack of oversight regarding composition of currency and coin in daily vault sheets. She also was the primary person responsible for the vault cash counts. The head teller also had sole access to the vault at several points throughout the day.

Over several years, the head teller obtained more than $400,000. Even though another teller would accompany the head teller into the vault for currency counts, the head teller

12

The Arkansas Banker | February 2016

would conduct the actual “count” while the other teller checked amounts against a printed Excel spreadsheet—without doing a second count and without counting coin.

In addition, the internal auditor conducted counts of currency in the vault but didn’t compare those counts to daily vault count sheets, which didn’t match the internal auditor’s count. Had another teller or the internal auditor noted the amount of coin listed on the daily vault count sheets, he or she likely would have questioned the amount of quarters reported, compared to that in the vault. At one point, the daily vault count sheet showed more than $220,000 in quarters, which equated to more than 22,000 rolls of quarters—more than 5 tons—in the vault. According to bank management, this amount was unreasonable for a bank of this size.

The full count of the vault revealed a shortage of approximately $400,000.

Subsequent investigation determined denominations of hundreds and twenties were taken from the vault; the coin amounts were significantly inflated to conceal the scheme.

weren’t enforced. In many other cases, internal controls weren’t in place at all.

Here are some options to implement and mitigate potential embezzlement: Dual control procedures over the vault—two tellers access the vault each time activity must be conducted in the vault Access log for those accessing the vault Surveillance cameras around the vault entrance and inside the vault Unannounced cash counts by bank personnel other than those typically accessing the vault Bank bags opened and cash unbundled for each count Including coin in vault cash counts Comparing surprise or audit counts with daily vault records Periodic review of daily vault cash count sheets, looking for unusual items such as large amounts of particular coin Involving more than one person in flow of currency in and through the bank Compliance checks to ensure policies are being followed

EXAMPLE 2: THEFT OF NEARLY $2 MILLION BY HEAD TELLER

At another bank, the head teller again was able to capitalize on other employees’ trust and lax vault controls. Again, she was the primary person responsible for vault cash counts and had sole access many times throughout the course of business, even though policy dictated dual entry.

Over 17 years, the head teller stole nearly $2 million. As in the previous example, when conducting a vault cash count, the head teller would read the amounts from the tags on large currency bags and another teller would record the amounts.

When the bank had a profitability audit performed, it determined there was too much cash in the vault and scheduled a full count of the vault by management.

On the day of the count, the head teller did not show up, and the bank conducted a true count of vault cash. The bank subsequently found the money bags had amounts written on the tags but were stuffed only with other empty money bags, containing no currency or coin.

would access the vault for large amounts of cash (as much as $90,000 at a time) and put it in her teller drawer area, which was right above where she kept her purse.

As in Example 1, her teller tape/journal showed significant amounts of coin recorded, such as more than $100,000 in quarters or half-dollars, on numerous occasions. In addition, she indicated the cash bags were, to her knowledge, never opened or counted by any regulator or bank employee.

INVENTORY SECURITY

In both examples, some controls and measures were in place—at least on paper—to prevent the schemes, but they

For more information on how your institution can prepare for these situations or others, contact your accounting advisor.

This article is for general information purposes only and is not to be considered as legal advice.

This information was written by qualified, experienced BKD professionals, but applying this information to your particular situation requires careful consideration of your specific facts and circumstances. Consult your BKD advisor or legal counsel before acting on any matter covered in this update.

Article reprinted with permission from BKD, LLP, bkd.com. All rights reserved.

The head teller subsequently admitted to taking the cash. To accomplish this, she February 2016 | The Arkansas Banker

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Becoming a Leader That You Would Follow ABOUT THE AUTHOR

Honey Shelton has 25 years of experience as a training and quality improvement consultant for banks and banking associations across the country.

Her banking background includes spending three years as Executive Vice President/Chief Retail Banking Officer with First Victoria National Bank.

Shelton is a member of the American Society of Training and Development, has obtained certification in Reality Therapy from the William Glasser Institute, and certification from the Training and Development Program at Texas A & M.

Join Honey Shelton for ABA Supervisor Boot Camp April 12-13, 2016

Click here for details on the ABA Supervisor Boot Camp!

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Everyone is born with a desire to be well thought of, and with the drive to make a difference. How those innate traits are encouraged — and how we develop through experience and education — will ultimately result in what we pursue. In fact, leadership is so strongly tied to character that all aspects of your life will realize payoffs when you strive to become a highly effective leader. Intensity, ability and self-awareness all have a major impact on our self-confidence and risk taking as we pursue developing a reputation as a great leader.

Great leaders seek self-mastery in professional expertise, character building, and personal effectiveness, often due to an unwavering resolve to do what must be done, and an incurable need to produce results.

The history behind authentic, enduring leadership success includes a story chockfull of learning, mistakes, endless practice, self-evaluation, and humility. And, it doesn’t include going solo!

Training, mentoring, support, coaching, role models, and shedding defensiveness for a thirst of constructive feedback and positive confrontation all play major roles in pursuing success as a leader.

It is easier to be a judge of others’ leadership than it is to lead. All of us have a critic that lives and thrives within us.

The Arkansas Banker | February 2016

Most of us never question that critic when the target of criticism is someone else and especially, when we are up close and personal with someone we view as a poor excuse for a manager or a lousy leader.

This situation often intensifies when that someone is our boss or a leader in our midst.

No question that a lack of management skills or inadequate leadership ability can create a ripple effect resulting in confusion, frustration, dissatisfaction, and even disaster. Perception can come crashing into reality when something similar to an Enron or Bear Stearns debacle surfaces.

Responsible, dynamic leadership calls for you to become a master at self-evaluation.

Examine the common characteristics of

great leaders and ask yourself, “where am I with that?” Keep a watch out for people who exhibit great leadership and ask them about their journey.

Leadership isn’t better than management nor is it a replacement for it. Not all leaders have responsibility for managing others but, more often than not they do.

Leadership is circuitous; what you give is what you need to get. A classic example at the bank is the role of the branch manager. Here the leader is given a set of objectives and is expected to work with a team to produce meaningful results. The branch manager will need a dynamic role model to encourage and coach the branch manager to success.

Prepare to make your move to become the leader you want to follow.

Practice forgiveness. Leaders need it.

And, as a leader, it’s a job requirement to give it.

Find your passion, elevate your skill sets, and explore the benefits

Leadership

Conveys the vision Sets direction Provides inspiration and motivation Prepares people for change Strives to be reliable without being predictable Asks questions – lots of questions Emphasizes honor in all things Stresses personal accountability to becoming a torchbearer on a meaningful mission.

Develop your Emotional IQ and remember that charisma is the result of dynamic leadership, not the goal.

You may never make anyone’s list as a

Management

Conveys expectations Devises a collaborative plan Sets the tone for consistency and order Provides control and solves problems Removes obstacles that impede excellence Asks questions – lots of questions Teaches good sportsmanship Holds people accountable charismatic leader but keep your focus on helping others reach their potential.

Work hard on your character, never quit learning and give more than you get as you drudge the road to becoming the leader you want to follow.

February 2016 | The Arkansas Banker

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125 Years of the Arkansas Bankers Association:

National Defense The following is an excerpt of President of the Federal Reserve Bank of St. Louis Chester C. Davis’s address to the 51st Annual Arkansas Bankers Association Convention in Hot Springs, May 15, 1941.

This convention closes under conditions vastly different from those we conceived to exist even as late as one year ago. To an increasing extent during the last 12 months, the pattern of our lives has been shaped by happenings abroad. You have assembled here for your 51st annual gathering with the old world falling into pieces around you. Even from our comparatively safe vantage point 4,000 miles away from the actual scene where so-called civilization is tearing itself to shreds, the outlook is unspeakably grim.

The United States is not escaping and cannot hope to escape the profound consequences in our way of life which must follow chaos abroad. Not in our time will the old habits of thought and action return to serve us.

When the Arkansas Bankers Association held its convention here in Hot Springs in 1940, not one of you who attended would have believed a prophet if he had appeared before you then and foretold the events of the year that have elapsed.

European news was ominous then. On the day your convention opened last year, the Germans passed Sedan, and Paris was placed under martial law with the enemy only 130 miles away. On the day your convention closed, the Belgian Government moved to Ostend and news reached this country that the north Maginot Line had been breached for over sixty miles.

Even then we had not grasped the swift tempo of events. Few would have believed that the surrender of France would occur

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B-24 Liberator bombers nearing completion on the assembly line at the Consolidated Aircraft Corporation plant, Fort Worth, Texas. 1942.

with little more than a month. No one dreamed that within three weeks, without opposition, German troops could occupy Paris.

“Certainties” Are Smashed One year ago we were certain of many things. In fact, we knew too many things that weren’t true. Since then the keystone of our thinking on international affairs has dissolved. That was our conviction that a nation which minded its own business and respected the rights of its neighbors would be left free to develop its way of life in its own sphere.

That rule hasn’t worked in Europe and Asia. Few can be found today who are certain that it will continue to work here. On the contrary, another rule is proclaimed and is being demonstrated. In it force and power are all that count —and the demonstration hasn’t been ended yet.

There is now limit to it except the limit imposed by fear of another and great force.

We can honestly disagree over the likelihood of serious military war being launched against the United States at home from either Europe or Ashia; but we cannot disagree with the proposition that the likelihood recedes our armament advances.

The Arkansas Banker | February 2016

This is a new concept for many of us. At home we common every-day men and women are confused and baffled. Many of us are gripped by a growing pessimism as to man’s ability to run the machine he has created. Our individual troubles are coming to seem petty to us, compared with the colossal horror that is astride the world. Its swift growth inevitably has changed the pattern of our own life now and for the future.

Modern War is Incredible As a nation we are an important part of a world at war and it isn’t the old kind of war which the world has always known, either. Modern war as dictators have shaped it is incredible in its speed, range, destructivity, malignancy and totality. That last work is the one I want to fix in your minds. In this country we haven’t yet even glimpsed what total organization for war means. But we will be compelled to understand it and to match it if democracies are to compete at war with dictatorships, and if we are to perform successfully the role of arsenal for democracies we are assuming.

Total war as dictators wage it subordinates or eliminates every other aim, interest, and consideration than the one goal of complete victory over present and

potential enemies of their regime.

There is much in that concept which democracy unconditionally rejects. But it grows increasingly apparent that we now face a grim challenge, not of our own choosing. Can we mobilize our vast potential industrial strength promptly and on sufficient scale, and at the same time preserve the essentials of a democratic way of life?

Obviously, we cannot do it while preserving unimpaired all the privileges and immunities we have prized so highly.

The best we can hope to do while joining forces in the task at hand is hold fast the democratic idea of individual freedom, and in yielding from its form that which is necessary to single-minded action, do so in the determination to regain it all when the crisis passes.

Defense Production from Three Sources Production for the purposes and on the scale to which we are committed can be had only from three sources: from the slack of unused capacity and unemployed men and materials which has existed in our economy; from new factories and expanded facilities and newly-trained labor recruits which have been or will be provided; and by diverting from peacetime production to the arms program a portion of the plants, materials and men that normally supply our consumer needs.

One simple statement will illustrate the enormity of the job we have undertaken.

Scarcely one year ago the sum total of our government’s appropriated commitments for armaments was two and one-half billion dollars. Today the total for our armed services and to supply the opponents of aggression abroad has reached the staggering figure of fortyfour billion. And this expenditure is to be forced into the economy at the swiftest practicable rate and in the shortest possible time. Only an incurable and unrealistic optimism can imagine that this will be done without profoundly changing our mode of life, our ways of business, and the inter-relationships between the government and both.

Long-Time War on Many Fronts My departure from Washington has been recent enough to leave me a clear current picture of the Capitol as the nerve center of a nation that is gearing itself for war.

Whether war on our part will continue to be merely economic and financial; whether our Navy will become engaged and if so, when and where; and whether our participation will go beyond those fields are questions I can no more answer dogmatically than you can. I merely set forth as my opinion that the world, and we with it, are engaged in a conflict which will go forward for a long time and on many fronts — economic as well as naval and military. We had better get over the idea that some bright morning we are going to wake up and find that something has clicked to throw us back again in the old comfortable grooves of the twenties.

Decentralization of Defense Industries When the National Defense Advisory Commission was organized last summer, I expressed the view that new industries required under the defense program should not be located in areas where existing industries essential to defense are now concentrated when there was possibility of placing them elsewhere.

It was clear that this was the only way in which new reservoirs of unemployed labor and resources would be tapped without uprooting families and shifting them thousands of miles in communities where ebbing of the armament effort would leave them stranded.

The plans for war production which had been made prior to the emergency were not based on such a principle. In carrying out the program up to date some progress

toward decentralization has been made, but I am afraid that on the whole we have followed the same pattern of regional concentration that was followed in 1917 and 1918. Then we handicapped our effort by shortages of labor and transport and left an aftermath of over-concentrated industry. I am afraid that we will again reap some of the same harvest of economic and social consequences.

New facilities and new production are now being authorized for the United States and for aid to England. I am hopeful that the armed services and the defense authorities will do a better job with these than has been done heretofore. By a “better job” I mean that the additional unites yet to come will be located where they can tap resources of materials, facilities and men heretofore untouched. The importance of such an effort to the Midwest will be apparent to all of you. It is of equal importance, I believe, to the agricultural regions of the South and Southwest. In these areas are the great reserves of manpower and materials which are not now being tapped for the defense programs and which must be brought into use.

On the human side, and to minimize the aftermath, it is important that we avoid so far as possible drawing men from the mountains and the prairie from farms and the interior cities and towns to crowd them into the industrial centers hundreds of miles away. It is far better to

M-10 tanks in production on General Motors assembly line. American passenger cars were produced in very small numbers during World War 2.

February 2016 | The Arkansas Banker

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leave as many as possible on farms and in the villages but give those with low incomes opportunities for employment.

This would lessen the immediate need for housing and provide a measure of security when the emergency has passed.

Wealth of Eighth Federal Reserve District Finally, it is time to bring these matters home to the great agricultural empire of which Arkansas is a part. All of us who are cooperating in that phase of the nation’s efforts have been gratified by the spirit and promptness with which the banks of Arkansas, and of the other states in this Federal Reserve District, have taken hold of the distribution of the new series of Savings Bonds. The banks and the citizens of this area will do their part in the days ahead as they always have done in the past.

But in other ways the contribution which this section will make to the future of our country is great almost without limit.

I am proud to have been asked to become a part of this Eighth Federal Reserve District.

Within its boundaries almost any product can be grown. Its climate ranges from the northern temperate to the sub-tropical.

Its soil types encompass everything from the richest alluvial soil in the world in the Mississippi Delta and the blue-grass region of Kentucky to the red clay hills of Tennessee and Mississippi and the rocky ridges of the Ozarks. Almost every agricultural problem facing the nation

A female war worker checks 1,000 lb. bomb cases loaded with explosives at Firestone Tire and Rubber Co., near Omaha, Nebraska, in May 1943.

today can be found within its bounds.

Despite the many economic difficulties now confronting this District, some of which will continue during the next decade, I firmly believe it has the most promising future of any section of our nation. Its fertile soil, its growing climate, vast mineral resources and splendid people combine to make its future bright and its prospects unlimited.

Hub of the Wheel of Progress If, for a moment, I may be permitted to assume the role of a prophet, I would prophesy that this area is destined to become the hub of the wheel of progress of the richest and greatest industrial

A war worker finishing airplane parts in a hand mill at Consolidated Aircraft Corporation in Fort Worth, Texas. October 1942.

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The Arkansas Banker | February 2016

nation in the world. Since the days of our pioneer ancestors, the trails of our covered wagon have crossed and crisscrossed this region bound for the West and Southwest. Today the highways and railroads for a similar pattern. Tomorrow as our hemispheric relationships become closer and distances become meaningless before the progress of our great aviation industry, our airports will become the hub and center of air transportation.

The Mississippi and its tributaries form virtually a private waterway for this area.

The cities on its banks should logically be the fabrication centers for domestic products going to the Americans and by the same token this area is ideally situated to use its mineral, agricultural and industrial resources for the conversion of the hemisphere’s raw materials into manufactured articles. Geographically, this territory possesses unsurpassed opportunities for industrial development.

What is most needed is the spirit of exploration of the early settlers and the hardihood of our pioneering forebears.

Although I can visualize the development of a promised land in this area, I must emphasize that it will not come to us of its own accord. It will require the wisdom, foresight, energy, ambition and leadership of all of us to so strengthen the economic fabric of our nation that no set of circumstances can disturb it, save temporarily, and that we may go forward into an era of prosperity, the like of which the world has never before witnessed.

Office Depot is an ABA Endorsed Vendor.

February 2016 | The Arkansas Banker

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INDUSTRY NEWS

Seven Tips to Prevent Tax ID Fraud

As Americans begin the process of filing tax returns, identity thieves are scheming to get their hands on that money. Tax identity theft has been the most common form of identity theft reported to the Federal Trade Commission for the past five years.

Tax identity fraud takes place when a criminal files a false tax return using a stolen Social Security number in order to fraudulently claim the refund. Identity thieves generally file false claims early in the year and victims are unaware until they file a return and learn one has already been filed in their name.

Follow these tips to help prevent tax ID fraud: File early. File your tax return as soon as you’re able, giving criminals less time to use your information to file a false return.

File on a protected wi-fi network. If you’re using an online service to file your return, be sure you’re connected to a password-protected personal network.

Avoid using public networks like a wi-fi hotspot at a coffee shop.

Use a secure mailbox. If you’re filing by mail, drop your tax return at the post office or an official postal box instead of your mailbox at home. Some criminals look for completed tax return forms in home mailboxes during tax season.

Find a tax preparer you trust. If you’re planning to hire someone to do your taxes, get recommendations and research a tax preparer thoroughly before handing over all of your financial information.

Shred what you don’t need. Once you’ve completed your tax return, shred the sensitive documents that you no longer

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need and safely file away the ones you do.

1-800-908-4490. In addition, you should:

Beware of phishing scams by email, text or phone. Scammers may try to solicit sensitive information by impersonating the IRS. Know that the IRS will not contact you by email, text or social media. If the IRS needs information, they will contact you by mail first.

Respond immediately to any IRS notice and complete IRS Form 14039, Identity Theft Affidavit.

Keep an eye out for missing mail.

Fraudsters look for W-2s, tax refunds or other mail containing your financial information. If you don’t receive your W-2s, and your employer indicates they’ve been mailed, or it looks like it has been previously opened upon delivery, contact the IRS immediately.

If you believe you’re a victim of tax identity theft or if the IRS denies your tax return because one has previously been filed under your name, alert the IRS Identity Protection Specialized Unit at

The Arkansas Banker | February 2016

Contact your bank immediately, and close any accounts opened without your permission or tampered with.

Contact the three major credit bureaus to place a ‘fraud alert’ on your credit records: Equifax, 1-800-525-6285 Experian, 1-888-397-3742 TransUnion, 1-800-680-7289 Continue to pay your taxes and file your tax return, even if you must do so by paper.

More information about tax identity theft is available from the FTC at ftc.gov/taxidtheft and the IRS at irs.gov/identitytheft.

Yeager’s Stress Test Available to Community Bankers Tim Yeager, finance professor at the University of Arkansas and former economist at the Federal Reserve, has created Tim Yeager a macro stress test that community banks can use to assess their capital adequacy in times of financial crisis and recession.

The test, a macro-enabled Excel file, and supporting materials are free and available to all U.S. community banks. They can be downloaded at http://finance-dev2.uark.edu/ community-bank-stress-test.php.

“Any U.S. community bank can utilize the resources I developed to build a customized macro stresstesting model,” said Yeager, associate professor in the Sam M. Walton College of Business. “The purpose of the model is to assess the bank’s ability to withstand a severe and prolonged period of high credit losses.”

with assets less than $10 billion, although most have much less than this amount. Since 2009, the Federal Reserve has used macro stress testing – putting a bank through an adverse macroeconomic and financial shock – as its standard method for assessing capital adequacy at large banks. Although U.S. community banks are not specifically required by regulators to run macro stress tests, those with high levels of commercial real estate lending are required to stress-test their portfolios. Additionally, said Yeager, the banking industry has evolved since 2009 and incorporated stress testing as a routine part of risk management.

“My stress test model is a customizable Excel spreadsheet that provides realistic, worst-case, five-year forecasts,” Yeager said.

“It imposes a surge in loan losses based on community banks’ actual charge-offs over 2008 to 2012, the five year horizon that captured the deterioration and recovery of bank balance sheets from the Great Recession.”

America, recently published a story written

by Yeager about his stress test and assessing capital adequacy.

Independent Banker, a publication of Independent Community Bankers of

Yeager holds the Arkansas Bankers Association Chair in Banking.

Community banks are locally owned and operated financial institutions

ARKANSAS BANK DEPARTMENT

APPLICATIONS & APPROVALS

Branch Bank Application An application filed by Centennial Bank, Conway, Faulkner County, Arkansas, to establish a branch banking facility at 12 East 49th Street, 28th Floor, New York, New York County, New York, has been approved. January 6, 2016.

Charter Conversion Application An application filed by The First National Bank of McGehee, McGehee, Arkansas, a national bank, for conversion to a statechartered bank to be known as First NaturalState Bank, McGehee, Arkansas, has been approved.

January 21, 2016.

February 2016 | The Arkansas Banker

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PROFESSIONAL DEVELOPMENT IRA Advanced Workshop Arkansas bankers took an in-depth look at IRA operations at this month’s IRA Advanced Update and Review Workshop, held February 9 in Little Rock. The seminar, taught by Patrice Konarik of Sunwest Training Corp., was structured as an annual update and review for IRA personnel.

Some of the day’s featured topics were Legislative updates for 2016, Qualified Charitable Distributions, Health Savings Accounts, IRS reporting, and the new definition of the “once-per-12-month” IRA rollover rule.

Seventeen bankers, representing nine financial institutions, took part in the workshop.

Save the date: The 2016 ABA IRA School is scheduled for October 25-26, 2016.

ABA Trust School Scheduled for March 8-11 The 2016 ABA Trust School is slated for Tuesday, March 8, through Friday, March 11, at the Crowne Plaza in Little Rock.

The Trust School is recommended for both new trust department personnel and specialized trust personnel seeking to broaden their knowledge in the field of trust. This four-day program will provide a solid foundation and overview of trust skills and topics.

Featured Topics will include: Estates & Probate Revocable Trusts, Irrevocable Trusts, Agencies, and Custodial-type Accounts Discretionary Distribution Administration Trust Marketing, Fees & Trends in Development Employee Benefits Arkansas Trust Code and Uniform Prudent Investor Act Trust Investments Corporate Trusts Charitable Trusts The speaker line-up includes: Dee Davenport, Simmons Bank; Christ Treat, First Community Bank; Rex Kyle, First

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Security Bank; Coleman Westbrook, Friday, Eldredge & Clark; Minnie Mills, Bank of the Ozarks; Glenda Dean, Simmons First Trust Company; and Kim Evans, Arkansas Community Foundation.

For more information, or to register for this event, log on to www.arkbankers.org,

The Arkansas Banker | February 2016

or contact Kami Coleman at kami.coleman@arkbankers.org.

Click here for details on the ABA Trust School!

GSB Scholarships Now Available To promote and encourage excellence in the fields of banking and finance, the Arkansas Bankers Association, along with some of the top graduate banking schools in the U.S., provides an array of scholarships annually to deserving bankers. Below is a list of scholarships currently available through the ABA:

AMERICAN BANKERS ASSOCIATION & ARKANSAS BANKERS ASSOCIATION SCHOLARSHIP

Stonier Graduate School of Banking - Philadelphia, Pa. 2016 Session to be held June 2-9 Deadline: February 29, 2016 Amount: $1,265 (member) per year, for three

years or $1,598 (non-member) per year,

for three years Eligibility: Must be a first year student

SWGSB MILLENNIUM SCHOLARSHIP

SW Graduate School of Banking Foundation Southern Methodist University - Dallas, Texas 2016 Session to be held May 30 - June 10 Deadline: February 29, 2016 Amount: $1,500 per year, for up to three years Eligibility: Must be a first year student

GSBC FUTURE LEADERS SCHOLARSHIP

Graduate School of Banking at Colorado - Boulder, Colo.

2016 Session to be held July 17-29 Deadline: March 1, 2016 Amount: $1,325 per year, for three years Eligibility: Must be a first year student

GRADUATE SCHOOL OF BANKING AT LOUISIANA STATE UNIVERSITY SCHOLARSHIP

Graduate School of Banking at LSU - Baton Rouge, La. 2016 Session to be held May 22 - June 3 Deadline: April 1, 2016 Amount: $3,995, first year only Eligibility: Must be a first year student

PROCHNOW EDUCATIONAL FOUNDATION & ARKANSAS BANKERS ASSOCIATION SCHOLARSHIP

Graduate School of Banking at Wisconsin - Madison, Wis. 2016 Session to be held July 31 - August 12 Deadline: April 15, 2016 Amount: $1,300 per year for three years Eligibility: Must be a first year student

GSB-LSU, GSB-WI Offering New IT Programs

Recognizing the need to provide timely, high-quality educational opportunities for bankers in the critical areas of technology management and information security, the Graduate School of Banking at Louisiana State University (GSB-LSU) is encouraging its alumni to either attend themselves or send their IT staff to the Bank Technology Management School and the Bank Technology Security School, each developed and offered by the Graduate School of Banking at the University of Wisconsin – Madison (GSB-WI).

The schools, held in April and October, respectfully, provide a solid foundation in the business of banking for IT professionals as well as management or security-specific curriculums that include lecture, small group interaction and hands-on lab exercises.

“Information assurance and proactive technology and vendor management are critical to a bank’s success. These schools provide the industry’s best training in these very important areas; that’s why we endorse these schools for our graduates, and encourage friends of GSBLSU to consider these exceptional programs for training bank staff,” said Don Woodland, executive vice president and director, GSB-LSU. “This is about what’s best for the industry,” added Woodland, noting “we’re very pleased to share information about these opportunities with our network of alumni and supporters, because the industry as a whole is stronger when we share knowledge.”

Kirby Davidson, president and CEO, GSB-WI, welcomes the participation of GSB-LSU alumni and their staff.

“Both of our graduate banking schools have long, proud histories of educating bankers and well-deserved reputations for academic excellence,” said Davidson, adding, “When an organization with GSBLSU’s outstanding reputation recognizes the quality of our specialty schools, it means a lot. We’re very pleased and proud to work with them and their esteemed alumni. It’s our hope to welcome a number of GSB-LSU alumni and their technology staff to our beautiful hometown of Madison, Wis., in 2016, and to potentially host these schools in Southern locations in future years.”

For information and online enrollment please visit the GSB-WI website. Details, including online enrollment, are available for the Bank Technology Management School (April 17-22, 2016) and the Bank Technology Security School (October 23-28, 2016); or call 800-7556440 with any questions about these outstanding programs.

February 2016 | The Arkansas Banker

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MEMBER NEWS Arvest Bank Recognized Among Best Banks in Nation The January 2016 issue of Consumer Reports magazine lists the best banks in the nation and Arvest Bank is the only bank operating in Arkansas to make the prestigious magazine’s top 10 list of traditional banks in the U.S. – coming in at No. 8. The magazine polled more than 49,000 of its readers to gauge their satisfaction level with their bank, and Arvest received a score of 87, only four points behind top-ranked Frost Bank.

“Customer Service” was the primary attribute noted by Arvest customers leading to their high satisfaction.

Among the benefits of the traditional banks noted by the publication, the ability to offer in-person service, build relationships, know customers personally and be perceived as a contributing member of the community were among the ‘pros’ for customers who chose the smaller regional banks rather than the handful of banks with nationwide locations.

Also in January, GOBankingRates, a consumer-focused website on personal finance, listed Arvest as offering one of the 10 Best Checking Accounts of 2016 nationwide. GOBankingRates based their measurement criteria on annual percentage yield, minimum deposit, monthly maintenance fee, nonsufficient funds (NSF) fee and minimum balance required to avoid fees.

Arvest’s Free Blue™ is grouped among the top 10 checking accounts because of its minimum deposit of $50 to open an account, no monthly maintenance fee, free online and mobile banking, and no minimum balance, among other features.

“Every customer places a different priority on their banking experience, so we work to identify what they need and bring expectations and needs together for a great result,” Arvest Bank in Fayetteville President and CEO Donny Story said. “To

be recognized as one of the best banks in the nation based on customer feedback of their satisfaction level while also getting high marks for one of our checking accounts is a great honor. We believe it also demonstrates that our retail banking model of great service from highly trained and motivated associates, convenient hours and locations, superior products and cutting-edge technologies is wellreceived by customers.”

These early 2016 accolades come on the heels of recognition in the J.D. Power 2015 U.S. Retail Banking Satisfaction Study that focused on the overall satisfaction customers had with their financial institution. Arvest has had the highest customer satisfaction score in J.D. Power’s retail banking survey for at least one region in seven consecutive years. The 2015 survey results mention Arvest’s high performance in product offerings, facilities and fees.

Bankers Needed to Increase Financial Capability in Schools The American Bankers Association Foundation is calling for banker volunteers to register for its annual Teach Children to Save campaign and other 2016 financial education initiatives.

Now in its 20th year, the Teach Children to Save program is a national campaign that encourages banker volunteers to visit schools or youth groups in their local communities and present savings lessons. Teach Children to Save Day will be celebrated on April 29, but bankers can hold their lessons throughout the year.

“Early introduction to money concepts and financial discipline is key,” said Rob Nichols, AmBA’s president and CEO. “By presenting students with these financial education fundamentals, bankers set them on a path toward a financially fit future.”

“Equipping the next generation with the money skills they need to be successful is an important job and there is no one better suited to take it on than bankers,” said Corey Carlisle, AmBA Foundation executive director. “This program provides them with the resources they

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need to get students engaged around smart savings habits.”

Registered bankers will receive realtime customer support, program and communication materials, and will be featured in a list of participating banks on the AmBA Foundation’s website and in press materials.

AmBA will host a Teach Children to Save Banker to Banker Twitter Chat on March 16 from 2:00 – 3:00 p.m. ET for bankers across the country to share with one another their best practices, new ideas and insight into reaching young students through this campaign.

When registering for Teach Children to Save bankers can also register for the AmBA Foundation’s other 2016 financial education initiatives: Get Smart About Credit program.

This is a national campaign of volunteer bankers who help teens and young adults learn how to use credit wisely, protect their identity, and pay for higher education. Although

The Arkansas Banker | February 2016

celebrated in October, bankers can give their lessons throughout the year.

AmBA Foundation Book Award Program. The ABA Foundation and First Book have joined forces to put the “literacy” in financial literacy and provide 20,000 books to students in 2016. Through the book award program, banks will have an avenue to provide books as part of money skills presentations at schools across America.

Lights, Camera, Save! video contest.

Through this nation-wide video contest, teens create short YouTube videos to communicate the value of saving and using money wisely. Banks host competitions from October through November and select a winner, or winners if contests are held in multiple states, to compete on the national level for a grand prize of $5,000.

Interested banks should register at aba.com/FinEd or call 1-800-BANKERS for more information.

BANKER NEWS & MOVES SOUTHERN BANCORP COMMUNITY PARTNERS NAMES POLICY DIRECTOR Southern Bancorp Community Partners (SBCP), a 501(c) (3) financial development and lending partner of Southern Bancorp, has announced the hiring of Jennifer Johnson as the organization’s new Director of Public Policy. Johnson will lead Southern’s efforts to create economic opportunities in underserved communities by advocating for public policies that encourage low-income families to build net worth and develop strong financial foundations.

“On behalf of the entire Southern Bancorp organization, it is my pleasure to welcome Jennifer Johnson to the team,”

said Darrin Williams, CEO of Southern Bancorp, Inc. “Her extensive legal and policy experience at the state and federal level makes her an excellent choice for leading Southern’s policy efforts both in the Mid-South and nationally.”

A Mississippi native, Johnson has spent her career fighting for consumers in both the courtroom and the capitol. As a practicing attorney, Johnson spent many years managing complex criminal litigation on behalf of the state in the South Carolina Office of the Solicitor.

She later joined the renowned Center for Responsible Lending (CRL) in North Carolina and Washington, DC as the organization’s Senior Legislative Counsel, where she advanced policies related to consumer banking, mortgage reform, and consumer finance issues.

During her time with CRL, Johnson was an outspoken advocate for consumers across

the country, spearheading several state legislative and advocacy campaigns aimed at halting the creation and continuation of predatory payday lending, car-title lending, and other abusive lending practices. More recently, Johnson returned home to Mississippi where she founded the government relations firm Bridgetown Strategies LLC, which has been politically active in statewide education initiatives.

“Southern Bancorp is a true community development financial institution in every sense of the word,” said Johnson. “Their commitment to providing sustainable housing opportunities, access to capital for small businesses and financial development solutions in economically distressed communities is what I admire most about the organization as these are the things that help communities thrive. I look forward to continuing my

consumer protection efforts by fighting predatory lending practices, educating lawmakers on the need to improve financial and business practices that support working families, and advocating for public policies that support responsible and sustainable financial growth in the Mid-South.”

As Southern’s Policy Director, Johnson will work closely with both national lawmakers and those in Arkansas and Mississippi to advance policies that promote economic wellbeing in America’s distressed communities. Issues on the horizon for Southern include promoting Individual Development Account legislation in Mississippi, Asset Limit reform in Arkansas and national laws and regulatory policies that increase financial access and reduce community reliance on alternative financial services such as payday lenders.

Educating Professionals, Creating Leaders

More than $225,000 in Scholarships Available Annually The Arkansas Bankers Association is pleased to offer scholarship opportunities to its member bankers through the Herbert V. Prochnow Educational Foundation, a supporting organization to the Graduate School of Banking at the University of Wisconsin – Madison. The GSB Prochnow Foundation offers nearly one quarter million dollars in scholarships every year to bankers who want to improve their careers and organizations through education.

Scholarships are distributed through the ABA for the Graduate School of Banking and the GSB Human Resource Management School.

Apply today for a scholarship to attend a program at the nation’s leading and most progressive banking school. For details, contact Kami Coleman at the Arkansas Bankers Association at kami.coleman@arkbankers.org.

Sponsored by: Arkansas Bankers Association

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February 2016 | The Arkansas Banker

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BANKER NEWS & MOVES OSBORNE PROMOTED AT BANCORPSOUTH BancorpSouth has announced the promotion of Amanda Osborne to Branch Officer and Manager at the South Branch.

Osborne began her career at BancorpSouth in 2002 as a teller. She has also served as a Customer Service Representative and has worked at the East, Alma and Van Buren locations.

In 2013, she became Branch Supervisor at Alma, and in 2015 moved to Riley Farm as Branch Manager. She is a 1996 graduate of Southside High School in Fort Smith and attended the University of Arkansas-Fort Smith. She was a member of Leadership Crawford County in 2013.

“Amanda has served our customers well in several branch managerial roles and it is our pleasure to promote her to Branch Officer and Manager of one of our largest branches,” said Jim Patridge, President of BancorpSouth’s West/South Arkansas Division.

LEMING JOINS ARVEST BANK IN PRAIRIE GROVE, NAMED COMMERCIAL BANKER FOR LINCOLN Arvest Bank is pleased to announce that Dakota Leming has joined the bank as Commercial Banker for Lincoln.

Leming has worked for Arvest Bank for the past four years, starting as a part-time teller in Alma. He was most recently a commercial banker in Gentry in 2015.

“Dakota has demonstrated the positive attitude and genuine

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drive to help customers for which Arvest Bank is known,” said Dax Moreton, Arvest Bank Loan Manager in Prairie Grove.

“His focus on helping customers identify and reach their financial goals makes him a great fit with our team.”

A native of Lincoln, Leming graduated from Lincoln High School in 2011 and from the University of Arkansas at Fort Smith in 2015 with a Bachelor of Science in business administration.

Leming is an active member of the Lincoln Volunteer Fire Department.

He and his wife, Courtney Leming, live in Lincoln. The couple attends Summers Missionary Baptist Church.

ARVEST BANK IN PRAIRIE GROVE NAMES HOLMAN TO BOARD

“His 39 years’ experience as an educational administrator provides the oversight experience and local knowledge we treasure as a communitybased bank.”

A native of Danville, Holman earned a Bachelor of Science and Bachelor of Arts from Arkansas Tech University in 1971 and 1972, a Educational Specialist degree in 1989 and Master of educational administration in 1987 from the University of Central Arkansas in Conway, and his Educational Doctorate in 1995 from the University of Arkansas at Fayetteville.

He has served on numerous educational boards, including the Association of Supervision and Curriculum Development, Arkansas Association of Education Administration, Arkansas Association of Superintendents and Administrators, and the Arkansas Center for Executive Leadership.

Arvest Bank is pleased to announce that Frank Holman has accepted a position on the Arvest Bank in Prairie Grove’s board of directors.

His wife, Joyce Holman, is a retired elementary school teacher and the couple shares 72 years’ experience in Arkansas education. They have two daughters, Jasa of Lincoln and Kelly of Maumelle, and three grandchildren.

Before becoming an assistant professor of educational leadership and administration for Arkansas Tech University in Russellville, Holman most recently served as the superintendent of Lincoln Public Schools from 2007 to 2012.

He has previously served in that capacity for Cabot Public Schools, Arkadelphia Public Schools, Lincoln Public Schools as also a teacher, coach and high school principal and as a teacher and coach in Clinton Public Schools and Belleville Public Schools.

ARVEST WEALTH MANAGEMENT NAMES BILL JEFFS REGIONAL INVESTMENT OFFICER

“Frank Holman is an educational leader and community spirited individual, exactly the kind of person we like to have on our local directorial board,” said Mike Willard, Arvest Bank CEO and President in Prairie Grove.

The Arkansas Banker | February 2016

Arvest Wealth Management announces that Bill Jeffs has joined Arvest as a Wealth Management Regional Investment Officer. Jeffs will develop investment, insurance, and trust and estate planning solutions to support the strategies and objectives of wealth management clients. He brings 40 years of experience in the banking, investment and financial services industry. Jeffs served in Executive Management

in several large, multi-national financial service firms.

“Bill brings broad and valuable experience to Arvest and he will be a great asset to our wealth management clients in planning and managing their financial strategies.” said Asa Cottrell, Arvest Wealth Management central Arkansas location manager. “We are excited that Bill has joined the Arvest team and we look forward to the great work he will do in our community.”

Jeffs has degrees in banking, insurance, and business and advanced lending education from New York State. He holds both securities and insurance licenses.

ARVEST BANK HIRES KIM LEOPARD IN TRUST DEPARTMENT Arvest Bank announced that Kim Leopard has been hired to fill a new position in the bank’s Trust department. In her role as a trust administrative assistant III, Leopard will assist the department’s trust specialists and provide administrative support for large accounts.

She previously worked as a trust investment assistant and commercial loan assistant at Bank of the Ozarks prior to joining Arvest.

“Kim has a great deal of experience in working with trust investments and other areas of the industry and she will certainly be a great asset to our team,” said Asa Cottrell, Arvest Wealth Management location manager for central Arkansas “Her knowledge will benefit our clients and we’re excited to have her.”

Leopard earned a bachelor’s degree in history from Henderson State University and is a graduate of Little Rock Central High School.

BANKER NEWS & MOVES

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PITTMAN JOINS SIMMONS AS VP WEALTH MANAGEMENT – EMPLOYEE BENEFITS Christi McGeorge Pittman of Little Rock has joined Simmons First National Bank as vice president of wealth management/employee benefits.

Pittman had worked since October 2006 as the sales director for Delta Dental of Arkansas.

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Simmons has expanded the number of states in which it offers group-sponsored employee benefit plans. Simmons First Insurance Services offers group insurance products to mid- and largemarket employer groups in Arkansas.

Pittman’s responsibilities will include marketing and sales to Arkansas companies.

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“We’re excited to have Christi on board,” said Philip Tappan, the executive vice president of financial services for

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Simmons. “We expect her background of working with companies across Arkansas for more than 20 years will give greater visibility to our group insurance programs.”

Pittman, a certified public accountant, entered the insurance business in 2001 with Transamerica Worksite Marketing, where she was a member of the senior management team. Prior to that, she was the president of McGeorge Consulting Inc., the chief financial officer for Technetics Corp. and a senior auditor for Baird Kurtz & Dobson.

“Christi’s expertise in finance and group insurance products will prove invaluable as Simmons strives to implement new products and services throughout its footprint,” Tappan said.

The wealth management group at Simmons offers insurance, trust, investment and private banking services.

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WHO SHOULD ATTEND Members of the bank who are involved with the valuation program, members that will rely on evaluations, any appraisal department member, credit officers, loan officers, credit analysts, loan review officers, credit administration supervisors, and loan assistants.

Log on to www.arkbankers.org for more information!

February 2016 | The Arkansas Banker

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ABA Government Relations Summit 2016

March 14-16, 2016

Washington, DC

Join ABA and bankers from across the U.S. for the 2016 ABA Government Relations Summit, in Washington, DC. Be a voice of influence during this critical election year, and unite with more than a thousand industry colleagues to help bring your hometown perspective to Capitol Hill.

register at

aba.com/Summit Open to ABA members and non-members.

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The Arkansas Banker | February 2016