The Arkansas Banker February 2015

Agri Lending Conference

2015 Group Meetings

Teach Children to Save

The Arkansas

Banker

2015 Security Workshop

Finding the Weak Links in Your Institution’s Security The Reid Technique of Interviewing and Interrogation

Volume XCIX, No. 2 | February 2015 February 2015 | 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 2015

CNA-FI-038_2014ABAInsertions_FullPage_FINAL.indd 1

6/27/14 11:28 AM

The Arkansas

Banker

Volume XCIX, No. 2 | February 2015

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

COLUMNS

DEPARTMENTS

ADVERTISEMENT

FEATURES

MAGAZINE RATES

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

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

Chairman’s Column

8

Washington Report

10

Legislation & Regulation

Ava Franks

24

Banker News & Moves

COVER STORY

Bill Holmes

Chuck Morgan

Gov. Frank Keating

27 Classifieds 27

Index of Advertisements

11

ABA Group Meetings

14

Developing an Interview Strategy

17

Yield Curve Changes and Management of the Investment Portfolio

By Jeffrey F. Caughron

SUBSCRIPTION

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.

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

President’s Column

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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By John Reid & Associates

18 Performance-Driven

Retirement Plans: Are They

Right for Your Bank?

By David Schoemaker & Ken Derks

20

Agri Lending Conference

22

Teach Children to Save 2015 Security Workshop See the speaker and topic line-up for our premier security event!

See page 12

February 2015 | The Arkansas Banker

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PRESIDENT’S COLUMN 2015 AmBA Government Relations Summit Now is the time to be planning for that first spring trip. The American Bankers Association will host the 2015 Government Relations Summit March 23-25 in Washington, D.C. The 2015 Summit is the opportunity for you and your peers to advocate for the changes hometown banks need to better serve our customers. A collective voice is critical as we educate our policymakers on the vital role banks play in their hometowns and the many policy challenges that affect this role. More than a thousand bankers come together each year to speak to Congress and regulators in a unified voice, so that together our industry can be heard.

Monday, March 23 is the Emerging Leaders Forum. Leadership development and effective advocacy go hand in hand, and this is a great opportunity for our young leaders to connect with other voices in banking. The Emerging Leaders Forum will focus on the best practices and experiences of state emerging leader programs, and explore banker engagement opportunities available through AmBA and state association membership. They will share challenges and strategies, network with peers from across the country, and return to your bank

with new perspectives on leadership.

On Tuesday, March 24, Congressional leaders will speak on important banking legislation that will be introduced in the 114th Congress. House Majority Leader Kevin McCarthy (R-Calif.) has been added as a keynote speaker at the Summit.

McCarthy joins House Financial Services Committee Chairman Jeb Hensarling (R-Texas) and “Meet the Press” host Chuck Todd on the speaker roster.

PRESIDENT & CEO BILL HOLMES

That afternoon we will meet with our Congressional delegation and explain how regulations and legislation impact our customers and their constituents. Banker visits to Capitol Hill are a core component of the Government Relations Summit. We have made appointments in advance of these meetings, which help show the industry’s strength, conviction, and unity. You and your banker peers are using this opportunity to meet with lawmakers on Capitol Hill to discuss concerns about our communities, our industry and our country.

The most powerful testimony we can give is specific instances where we have not been able to serve our customers because of unintended

ABA STAFF BILL HOLMES

President/CEO 501.978.3602 | bill.holmes@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

JESSICA SAHENE

Marketing Coordinator 501.978.3609 | jessica.sahene@arkbankers.org

STUART THALHEIMER

Executive Assistant 501.978.3605 | stuart.thalheimer@arkbankers.org

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The TheArkansas ArkansasBanker Banker ||February February2015 2015

AARON GAMEWELL

EVP/COO 501.978.3613 | aaron.gamewell@arkbankers.org

KAMI TAYLOR COLEMAN

VP/Professional Development 501.978.3614 | kami.coleman@arkbankers.org

TRACI LOGSDON

Director of Communications 501.978.3603 | traci.logsdon@arkbankers.org

TERRI KELLY

Professional Development Coordinator 501.978.3607 | terri.kelly@arkbankers.org

BRENDA SCARBROUGH

Administrative Assistant 501.978.3600 | brenda.scarbrough@arkbankers.org

consequences of rules and regs; to attest to this, we encourage you to bring one of your lenders to the meeting. Bring a director to speak on what these burdens have done in the local community and economy. Prepare written handouts of your unique stories that we can distribute as support material for our delegation to work on creating more fair and tailored regulations.

Continue Our Tradition of ENGAGEMENT Continue Our Tradition of

ENGAGEMENT

If you, your lender, or your director are new to Capitol Hill, not to worry. Whether this is your first trip, or you need a refresher, there is an opening orientation on March 23 to prepare you to have a highly productive meeting with the representatives from your congressional district when you join us on the Hill.

Registration for the AmBA Government Relations Summit is free. We encourage you to attend, and bring an Emerging Leader and a lender or director. Directors are especially encouraged to attend, as their roles in their hometowns position them well to explain the value banks bring to local economies to lawmakers. Bankers, Congress, and regulators have a shared, vested interest in the health and success of America’s hometown banks. We look forward to working with you to ensure a vibrant banking industry and a prosperous economy.

ABA Government Relations Summit MARCH 23-25, 2015 WASHINGTON DC ABA Government Relations Summit •

• WASHINGTON Join us in Washington and show your continued MARCH 23-25, 2015 DC

commitment to driving the banking industry forward.

Join us in Washington and show your continued Do your part to educate policymakers on the commitment to driving the banking industry forward. vital role banks play in their communities.

Do your part to educate policymakers on the vital role banks play in their communities.

Register at aba.com/Summit Register at aba.com/Summit

ABA EXECUTIVE COMMITTEE CHUCK MORGAN | CHAIRMAN

ROBERT Y. TAYLOR | CHAIRMAN-ELECT

Relyance Bank, Pine Bluff

Parkway Bank, Rogers

SEAN WILLIAMS | VICE CHAIRMAN First National Bank of Wynne, Wynne

MARK FERGUSON | TREASURER First Security Bancorp, Little Rock

DAVID BARTLETT | PAST CHAIRMAN Simmons First National Corp., Little Rock

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

ABA BOARD OF DIRECTORS MARY BETH BROOKS | GROUP 3 The Bank of Fayetteville, Fayetteville

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

DAVY CARTER | GROUP 1 Centennial Bank, Jonesboro

First Bank, Rogers

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

DAVE DICKSON | GROUP 5 Union Bank & Trust Co., Monticello

CHARLES HORTON | GROUP 1 Fidelity Bank, West Memphis

MIKE SMITH | GROUP 5 McGehee Bank, McGehee

ELIZABETH FARRIS | GROUP 4 Regions Bank, Hot Springs

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

SUSIE SMITH | GROUP 2 Simmons Bank, Little Rock

CURTIS GENTRY | GROUP 1 First National Bank of Eastern AR, Forrest City

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

JIM TAYLOR | GROUP 3 First Security Bancorp, Fayetteville

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

WILSON MOORE | GROUP 2 Bank of America, Little Rock

STANHOPE WILKINSON | GROUP 3 Farmers Bank & Trust, Greenwood

JON HARRELL | GROUP 3

CATHERINE OWEN | GROUP 2 Eagle Bank, Little Rock

February 2015 | The Arkansas Banker

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CHAIRMAN’S COLUMN Delivering Our Message...

The Arkansas legislative session is upon us and, as of press time, there has only been one bill filed that is of minor interest to the ABA. I have to mention just how much I have been impressed with Ava Franks, our Vice President of Government Relations. She is extremely organized and proactive. Ava recently organized an event called “ABA Coffee and Committee,” which will give bankers a chance to attend Insurance and Commerce committee meetings, and an opportunity to see and be seen by our lawmakers.

The American Bankers Association has published its 2015 key banking issues, titled “How Congress Can Help America’s Hometown Banks.” It mentions a statistic that 58% of banks have canceled or are holding off the launch of new products due to regulatory costs or risks.

Additionally, 44% of the banks surveyed have reduced existing consumer financial products or services due to compliance or regulatory burden. These survey results are what Congress needs to hear. Instead of complaining about how Dodd-Frank has affected us as banks, they need to hear how it has negatively affected the consumer. The consumer is more likely to receive sympathy than we are as bankers.

One of the key issues mentioned by the AmBA is to ask Congress to require the SEC and the CFPB to perform a cost-benefit analysis before issuing new rules. Other items on the list include continuing to ask for a level playing field in competing with Credit Unions and the Farm Credit System, and allowing mortgage loans held in portfolio to be automatically considered Qualified Mortgages. These are a few of the issues that will be advocated when we visit the Hill in March.

CHAIRMAN CHUCK MORGAN President & CEO Relyance Bank

I have to remind myself that the situation which created an atmosphere to enable Dodd-Frank to pass didn’t occur overnight, so we can’t expect the fix to occur quickly. Despite what many believe, Dodd-Frank is not written in stone.

As the old saying goes, “the best way to eat an elephant is one bite at a time.” So we have to be diligent in delivering our message.

I invite each of you to join us for the ABA Government Relations Summit, March 23-25 in Washington, D.C. Also, I’d like to remind you to mark your calendars for ABA’s 125th Annual Convention to be held May 6-8 in Little Rock.

ABA EMERGING LEADERS SECTION COUNCIL Simmons Bank, Jonesboro

DANIEL ROBINSON | PRESIDENT

KEVIN THOMPSON | VICE PRESIDENT Centennial Bank, Fayetteville

BLAKE FLETCHER | SEC./TREAS.

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

ASHLEY O’BRIEN EAST | GROUP 2

BRITTANY THOMPSON LITTLE | GROUP 3

Heartland Bank, Little Rock

Today’s Bank, Fayetteville

JOHN ANDERSON | GROUP 5 Relyance Bank, Pine Bluff

CAMRON HAMES | GROUP 2 First Community Bank, Batesville

Firstar Bank, Fort Smith

TRENT BROWN | GROUP 1 Simmons Bank, Jonesboro

ANDY HORTON | GROUP 1 Fidelity National Bank, Marion

HUNTER NORTON | GROUP 3 First Security Bank, Fayetteville

TREY CLARK | GROUP 4 First Financial Bank, El Dorado

MATT LAFORCE | GROUP 2 First Security Bank, Searcy

Arvest Bank, Little Rock

BROOKE MORETON | GROUP 3

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.

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The Arkansas Banker | February February2015 2015

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

MARCH 2015

3–4 | Training the Bank Trainer

Holiday Inn Presidential, Little Rock Who Should Attend: Bank Supervisors, Branch Managers, Trainers, and Those responsible for the bank’s training efforts

24 | Retail Banking Conference

Crowne Plaza, Little Rock Who Should Attend: CEOs, CFOs, Presidents, Senior Executives & Management responsible for retail banking growth and profitability related to innovative product solutions

APRIL 2015

13-17 | Commercial Lending School

Crowne Plaza, Little Rock Who Should Attend: 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.

26–27 | Security Workshop

Hot Springs Convention Center Who Should Attend: Security Officers, Cash Management Officers, Bank Legal Counsel, Operations Managers, Chief Information Officers, and Branch Managers

8–9 | Agri Lending Conference

Holiday Inn Presidential, Little Rock Who Should Attend: Agri Lending Officers

21–22 | Supervisor Boot Camp

Crowne Plaza, Little Rock Who Should Attend: Supervisors and Managers

28 | Bank Directors

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

21 | BSA/AML Hot Topics

Crowne Plaza, Little Rock Who Should Attend: BSA Officers

MAY 2015

6 – 8 | 125th Annual Convention

Little Rock Marriott /Statehouse Convention Center Who Should Attend: CEOs, Presidents, Chairmen, Board of Directors, Senior Executives and Management.

13 | ALLL: What Works and What Does Not

Crowne Plaza, Little Rock Who Should Attend: Chief Financial Officers, Senior Loan Officers, Loan Officers, Chief Credit Officers, Loan Review Officers and anyone who is responsible for their institution’s ALLL

12 | The Risk Rating Process & Problem

Asset Administration

Crowne Plaza, Little Rock Who Should Attend: Chief Credit Officers, Senior Loan Officers, Loan Officers, Credit Analysts, Loan Administrators, Loan Review Officers, Special Asset Officers and Loan Workout Professional

JUNE 2015

TBA | Leadership Conference

Fayetteville Who Should Attend: Anyone who would like a chance to further their leadership skills, listen to motivating speakers, and network with colleagues from across the state!

25 | Introduction to Commercial Lending

Hilton Memphis, Memphis Who Should Attend: Commercial Lenders, Credit Officers, Branch Managers, Credit Analysts, Consumer Lenders, Loan Review Officers, Compliance Officers

PROFESSIONAL DEVELOPMENT | LIVE EVENTS

ABA Live Events...

For more information about ABA Live Events, log on to www.arkbankers.org or call 501.376.3741 February 2015 | The Arkansas Banker

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WASHINGTON UPDATE Saluting America’s Hometown Bankers When we asked five bankers from five states across the country to come to Dallas last November for a film shoot, we didn’t know what to expect. The bankers were invited to Dallas — a central location — to join members of a film crew and a cast of extras to produce a series of three television ads spotlighting “America’s Hometown Bankers.”

underscored the strength of their convictions and credibility.

Filming television ads means long days of multiple takes at multiple locations. The weather — for outdoor segments — is another variable. For our banker-spokespersons, it was unseasonably cold during the two days of filming.

We unveiled our new ad campaign during Sunday morning talk shows on ABC, CBS, CNN, Fox and NBC — and on business and policy programs— in December and January.

Yet through it all, our “talent” was patient, positive and proud to help promote the industry’s image. Representing Colorado, New Mexico, Oklahoma, South Dakota and Virginia, they showcased the ways bankers help their customers achieve their dreams, from buying a first home to growing a small business.

They spoke from their hearts about the values they share as bankers with their customers and communities every day. This aspect was not lost on members of the production company, who were amazed at the bankers’ naturalness that

Our ads also highlight bank technology that makes customers’ lives more convenient and secure, from 24-hour fraud monitoring to mobile check deposits. These are messages that we know from research will resonate with consumers.

GOV. FRANK KEATING President & CEO American Bankers Association

The ad campaign’s three spots — “America’s Hometown Bankers,” “First Home” and “Small Business Dreams” — tell your story. How banking is “more than a job.” How it’s “a people business.” How you want to help a customer “realize your dreams.”

You can watch the ads on aba.com.

The ads’ tagline is, “We’re America’s hometown bankers, and we’re here to help you realize your dreams.” It’s a message made more powerful because our bankers believe it when they say it.

I’m sure you do as well.

© 2015 American Bankers Association. All rights reserved. Reprinted with permission.

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The Arkansas Banker | February 2015

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

Analyzing Business Financial Statements: Part I March 2, 2015 1:30 p.m. – 3:30 p.m.

IT Examination Hot Spots March 2, 2015 2:00 p.m. – 3:45 p.m.

Integrating Technology into Your Bank’s Strategic Plan March 3, 2015 10:00 a.m. – 11:45 a.m.

Keys to Understanding Personal and Global Cash Flow: Part III March 3, 2015 1:00 p.m. – 2:45 p.m.

Understanding the New Integrated Disclosure Rules: Estimate March 3, 2015 1:30 p.m. – 3:30 p.m.

Developing Your Incident Response Plan March 3, 2015 2:00 p.m. – 3:45 p.m.

Commercial Real Estate Appraisals: Part III March 3, 2015 10:30 a.m. – 12:15 p.m.

Commercial Real Estate Cash Flow: Part III March 3, 2015 8:30 a.m. – 9:15 a.m.

Cybersecurity and Regulatory Expectations March 4, 2015 2:00 p.m. – 3:45 p.m.

Analyzing the Company’s Liquidity Position March 4, 2015 10:00 a.m. – 11:45 a.m.

Is Your ATM An Oversized Slot Machine?

March 4, 2015 2:00 p.m. – 3:45 p.m.

Completing the SAR: Line by Line March 4, 2015 10:00 a.m. – 12:00 p.m.

New 2015 Employment Compliance Obligations for Institutions March 4, 2015 1:30 p.m. – 3:30 p.m.

ACH Risk Management & Compliance: Part I March 5, 2015 1:30 p.m. – 3:30 p.m.

Analyzing Business Financial Statements: Part II March 9, 2015 1:30 p.m. – 3:30 p.m.

For Salespeople: Grow Your Business with Introductions!

March 9, 2015 12:00 p.m. – 1:00 p.m.

Interest Rate Risk Basics: Part I March 9, 2015 2:00 p.m. – 3:40 p.m.

Keys to Understanding Personal and Global Cash Flow: Part IV March 10, 2015 1:00 p.m. – 2:45 p.m.

Commercial Real Estate Cash Flow: Part IV March 10, 2015 8:30 a.m. – 10:15 a.m.

Commercial Real Estate Appraisals: Part IV March 10, 2015 10:30 a.m. – 12:15 p.m.

Fundamentals of Interest Rate Swaps and Caps: Part I March 10, 2015 1:00 p.m. – 2:45 p.m.

Interest Rate Risk Basics: Part II March 11, 2015 2:00 p.m.-3:40 p.m.

POS Fraud Fallout: What Steps You Can Take With Merchants March 11, 2015 2:00 p.m. – 3:45 p.m.

Notary Public March 12, 2015 10:00 a.m. – 12:00 p.m.

Information Security: Risk Assessments: Part I March 12, 2015 1:30 p.m. – 3:30 p.m.

Fundamentals of Interest Rate Swaps and Caps: Part II March 12, 2015 1:00 p.m. – 2:45 p.m.

Turn the 5 Cs of Credit Into An Objective Risk Scoring Model March 12, 2015 2:00 p.m. – 3:00 p.m.

Advanced Tax Return Analysis March 12, 2015 10:00 a.m. – 11:45 a.m.

Analyzing Business Cash Flow: Part I March 16, 2015 1:30 p.m. – 3:30 p.m.

Improving and Delivering Credit Scores To Your Customers March 17, 2015 1:30 p.m. – 3:30 p.m.

Successful Workout Strategies for Problem Loans: Part I March 17, 2015 8:30 a.m. – 9:55 a.m.

Core Deposit Analytics: Part I March 17, 2015 2:00 p.m. – 3:40 p.m.

ACH Risk Management & Compliance: Part II March 18, 2015 1:30 p.m. – 3:30 p.m.

Building a Compliance Scorecard March 19, 2015 10:00 a.m. – 11:25 a.m.

Understanding Revocable and Irrevocable Trust Documents March 19, 2015 1:30 p.m. – 3:30 p.m.

Information Security: Risk Assessments: Part II March 19, 2015 1:30 p.m. – 3:30 p.m.

Best Practices in Retaining, Attracting & Pricing Deposits March 20, 2015 1:30 p.m. - 3:30 p.m.

PROFESSIONAL DEVELOPMENT | WEBINARS

ABA Webinars...

For more information about ABA Webinars, log on to www.arkbankers.org or call 501.376.3741 February 2015 | The Arkansas Banker

9

GOVERNMENT RELATIONS The 90th General Assembly and The Importance of Grassroots Activity One month of the 90th General Assembly down, and a lot of major issues have gotten or are quickly getting wrapped up. A few issues that affect us have crept into the fray, but not too many as of yet. We intend to play defense as we closely monitor the filed bills and discuss banking interests with our fellow lobbyists and legislators.

visit with his or her representative, should they be members of the Insurance and Commerce Committee, and really engage in legislative activities first hand. The idea for this event series is to give as many bankers the opportunity to experience a day of session at the Capitol and to increase the visibility of bankers in our political system.

This month, ABA introduces a new event series, Coffee and Committee. There are four sessions, February 10, 11, 18, and 19. Four to five bankers will meet at ABA in the morning to have coffee and discuss the Insurance and Commerce Committee agenda for the committee meeting that day, and then we will head over to the Capitol for the committee meeting.

One of my primary functions at the ABA is to provide a source of information and open line of communication between elected officials and our members. Should you become aware of an issue or hear a rumor you want verified, give me a call.

If there is something you think I should look at, let me know. The next time you are in Little Rock and wish to meet your legislator, let me know and I will do my absolute best to ensure that meeting occurs. A legislator is always happy to visit with his or her constituent, even if it is simply a brief introduction rather than an appeal for help. We all know it is good to build those relationships prior to a time of need.

This event gives bankers an opportunity to attend a committee meeting in casual terms rather than to attend a meeting when he or she may be called to testify.

Here, bankers will also have an opportunity to

VP / DIRECTOR OF GOVERNMENT RELATIONS AVA FRANKS

ABA’s Silent Auction is coming up in May. Let’s get those donations in and have some really neat and interesting items to auction this year. All auction proceeds benefit ABA’s political activity, which directly supports the Arkansas banking industry.

In my January article, I mentioned that corporations could no longer give to PACs as of the passage of the Constitutional Amendment also known as Issue 3. This statement was incorrect. Corporations may give to PACs. Corporations may no longer contribute to candidates.

Wesley Samson Joins BOSC, Inc. Wesley Samson VP, Institutional Sales Officer 913.234.6693 wsamson@bokf.com www.boscinc.com

© 2015 BOSC, Inc. Securities offered through BOSC, Inc., a registered broker/dealer, member FINRA/SIPC and a subsidiary of BOK Financial Corporation. Advisory services offered through BOSC, Inc. dba BOK Financial Advisors, an SEC registered investment adviser. Investments and insurance are not insured by the FDIC; are not deposits or other obligations of, and are not guaranteed by, any bank or bank affiliate. All investments are subject to risk, including possible loss of principal.

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The Arkansas Banker | February 2015

ABA Group Divisions In June of 2014, ABA’s group structure was re-worked to realign the four original groups and create a Group 5.

Below is a listing of groups by county.

2015 Group Meetings Scheduled The 2015 Group Meetings will be held around the state in February and March. These meetings encourage banker participation in activities ranging from grassroots advocacy to professional development. Please make plans to attend your respective group meeting!

There will be a nominal registration fee, which will include a meal. For more information, and to RSVP, please contact Stuart Thalheimer at stuart.thalheimer@arkbankers.org.

Group 1 Clay Craighead Crittenden Cross Greene Jackson Lawrence

Lee Mississippi Poinsett Randolph St. Francis Sharp Woodruff

Group 2 Baxter Cleburne Conway Faulkner Fulton Independence Izard Marion Perry

Pope Pulaski Saline Searcy Stone Van Buren White Yell

Group 3 Benton Boone Carroll Crawford Franklin Johnson

Logan Madison Newton Scott Sebastian Washington

Group 4 Clark Columbia Garland Hempstead Hot Spring Howard Lafayette Little River

Miller Montgomery Nevada Ouchita Pike Polk Sevier Union

Group 5 Arkansas Ashley Bradley Calhoun Chicot Cleveland Dallas Desha

Drew Grant Jefferson Lincoln Lonoke Monroe Phillips Prairie

Group 2

Friday, March 6, 2015 | 11:30 a.m.

Little Rock Country Club | Little Rock

Group 1 Group 3

Thursday, March 19, 2015 | 5:30 p.m.

Pinnacle Country Club | Rogers

Friday, February 27, 2015 | 11:30 a.m.

Jonesboro Country Club | Jonesboro

3 2 1 5 4 Group 5 Group 4

Friday, March 13, 2015 | 11:30 a.m.

Monticello Country Club | Monticello

Wednesday, March 11, 2015 | 11:30 a.m.

Hot Springs Country Club | Hot Springs

February 2015 | The Arkansas Banker

11

Security Workshop

Security Workshop Set for March 26-27 The 2015 ABA Security Workshop is scheduled for March 26-27, 2015, at the Hot Springs Convention Center in Hot Springs. This two-day event provides topics to address the issues and concerns that challenge security officers and personnel on a daily basis, the constantly evolving environment in which our industry operates.

what questions to ask, and what reactions to watch for — not just during investigative interviews, but in day-to-day operations.

The Reid Technique of Interviewing and Interrogation program will include behavior symptom analysis, the nine steps of interrogation, setting interview goals, and more.

Day one of the workshop will feature “The Fraud Educator,” Barry Thompson, who will discuss finding the weak links in your institution’s security. From emerging security issues to reporting requirements, Thompson will cover standing threats and how to be proactive about maintaining your bank’s security. Thompson has been a top-rated speaker at ABA events in the past, including the 2011 IT Security Workshop, and the 2013 BSA Conference.

Who should attend the Security Workshop: Security Officers Cash Management Officers Bank Legal Counsel Operations Managers Chief Information Officers Branch Managers

Day two features The Reid Technique of Interviewing and Interrogation with Joseph P. Buckley. The Reid Technique, which is widely used by law-enforcement agencies across the country, is a method of questioning subjects that attempt to assess their credibility while working toward an end-goal of extracting pertinent information. Beyond investigative interviewing, this technique gives security personnel a better understanding of

Security Workshop attendees qualify for 10 Continuing Professional Education (CPE) credits in Specialized Knowledge & Applications in group-live training. Attendees also qualify for 9.5 general Continuing Legal Education (CLE) credits; and 10 CFSSP and 5.5 CRCM credits through the Institute of Certified Bankers.

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The Arkansas Banker | February 2015

Early registration for this event ends Wednesday, February 25. For more details, and to register, log on to www.arkbankers.org.

Security Workshop Agenda Thursday, March 26, 2015

2:15 p.m.

9:00 a.m.

Introductions and National Security Update New issues have arisen in the last six months — like jugging and “Open Carry Texas” — that could cause problems for banks in Arkansas. This segment contains briefs about new and emerging events that will likely affect the security function at your financial institution.

2:30 p.m.

Board Reporting: The Security Perspective Banking regulations specify that the Security Officer must report to the board annually. The regulations require that a report be made addressing the implementation, administration and effectiveness of the security program. What exactly the Security Officer should report to the board is not clearly identified in the regulations. This interactive session will review best practices relating to training, inspections and foreseeable events that should be reported to your board.

8:00 a.m.

Registration & Continental Breakfast

9:15 a.m.

Call Center Security: Dialing for Dollars Criminals view “Call Centers,” as the weakest link in the security armor of financial institutions! It is easy for the social engineer because they don’t have to enter your bank they can e-mail, chat or call you on the phone. We will review actual case histories that educate everyone to the intricacies of this evolving wave of call center attacks.

10:15 a.m.

Networking Break

10:30 a.m.

Security Blunders: Show and Tell Is your financial institution facility safe and secure? Assessing the risks involved with the operation of a financial institution is a major concern of every CEO, operations staff, and security officer. Financial institutions often unwittingly make themselves targets for criminals and robbers, and in this program we’ll use actual pictures that demonstrate precisely how this can happen.

12:00 p.m.

4:00 p.m.

Networking Break

Wrap-up

Friday, March 27, 2015 7:30 a.m.

Continental Breakfast

8:00 a.m.

The Reid Technique of

Interviewing and Interrogation John E. Reid and Associates began developing interview and interrogation techniques in 1947. The Reid Technique of Interviewing and Interrogation is now the most widely used approach to question subjects in the world.

12:00 p.m.

Wrap-up

Lunch

1:00 p.m.

You’re Doing What?

The Future is Now, So How do You Survive?

This interactive session reviews problems financial institutions are facing with new technologies, operational changes and working with law enforcement. We will familiarize you with technology like teller pods, cash recyclers, cash dispensing devices and automated interactive tellers. These new devices provide the security officer, management and staff with new problems to resolve… among them how to design your lobby, operational changes and security procedures that must be reviewed.

Featured Speakers Joseph P. Buckley III John E. Reid & Associates

Mr. Buckley is a forensic interviewer, detection of deception examiner, lecturer and consultant. Mr. Buckley is President of John E. Reid and Associates in Chicago, and has been with the firm since 1971. He is a member of the International Association of Chiefs of Police, the American Society for Industrial Security, and many other professional organizations.

Barry Thompson

Thompson Consulting Group Mr. Thompson has worked in the financial services industry for over three decades, holding the positions ranging from security officer to executive vice president. He is the only fraud educator in his industry that has worked in senior management positions, which affords him unique insight into financial institutions. Thompson also holds the designation of Certified Regulatory Compliance Manager.

February 2015 | The Arkansas Banker

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Security Workshop Developing an

Interview Strategy

An investigative interview should be carefully planned out and structured to achieve the desired goals. These tips from John Reid and Associates will get you on the path toward a more effective interview.

While some suspects make incriminating admissions or even confess during an interview, obtaining a confession should not be the primary goal of an interview.

Rather, an interview is conducted to elicit information. This information can be divided into two broad areas. The first is investigative information such as the person’s opportunity, access, motives and propensity to commit the crime. Second, the investigator should ask questions specifically designed to elicit indications of the suspect’s possible guilt or innocence.

The principal benefit of preparing an interview strategy is to make certain that all of the necessary questions are asked during the interview. An investigator often only has one opportunity to ask the suspect questions, and careful thought should go into covering all the important areas. By preparing an interview strategy, the investigator can focus his efforts on asking the necessary follow-up questions and observing the suspect’s verbal and nonverbal behavior.

While the questions asked during any interview will be unique to the particular suspect and issue under investigation, the following guidelines can be used to help organize those questions in a logical flow.

Starting the Interview

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eh Take part in th Technique of id e R r e ft a th soug terrogation In d n a g in w Intervie e training at th Workshop.

ABA Security e iss this Don’t me -in-a-lifetim onc nity! opportu

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At the outset of the interview the investigator should provide the suspect with an overview of the interview coupled with a statement emphasizing the importance of being completely truthful. The following is a possible opening statement in an employee theft investigation:

The Arkansas Banker | February 2015

“Mark, let me explain the interview process. I’m going to start off this afternoon by getting some background information from you and then we will talk in detail about the missing deposits.

It is important for you to understand my role in this whole investigation. I don’t get paid to judge people as being good

or bad and I don’t have any authority over what happens to the people I talk to.

My job is to simply collect and analyze evidence and a big part of that involves talking to people. During our interview this afternoon, I want to make certain you understand each of my questions so if there is anything you do not understand, please ask me to clarify it. It is also important for you to be completely truthful with me before you leave today.

Does that all sound agreeable?”

This introduction establishes the nonaccusatory tone of the interview, and also the non-judgmental position of the investigator. The emphasis on being truthful, as opposed to a threatening statement (such as, “If you lie to me today I will prove that and you will be sorry!”) will work to the investigator’s advantage later if it becomes necessary to interrogate the suspect.

The first couple minutes of the interview should consist of non-threatening questions such as the spelling of the suspect’s name, his address, marital status, or job duties. These questions allow the investigator to establish the suspect’s behavioral norms within the areas of eye contact, communication style and general nervous tension.

The issue under investigation may be introduced by asking the suspect, “Tell me everything you know about [the issue under investigation].” Once the subject has related his knowledge of the events or his version of the incident, the investigator should ask a series of investigative questions to develop all of the details with respect to the who, what, when, where, how and why of the incident under investigation.

At some point during the interview it is very important for the investigator to ask the subject if he committed the behavior in question: “Jerry, as we have discussed, last Thursday three deposits came up missing

from the night depository. If you had anything to do with taking those missing deposits you should tell me that now.”

Developing Attitudinal Information

Truthful and deceptive suspects form very different and predictable attitudes toward the interview as well as the issue under investigation. At some point the investigator will want to ask specific questions to draw out these attitudes.

Examples of questions designed to do this include: “How do you feel being interviewed concerning [the crime]?”

“Who would have had the best opportunity to [commit the crime] if they wanted to?”

“Do you really think [the crime was committed]?”

“What do you think should happen to the person who [committed the crime]?”

Developing Information Concerning Motives and Propensity

One block of interview questions should explore the suspect’s motives and propensity. If the crime is financially motivated, it would be appropriate to discuss the suspect’s current financial status. If the circumstances of the crime appeared to be linked to substance abuse, it would be appropriate to ask the suspect about his use of alcohol and illegal drugs. To evaluate propensity to commit the crime, the following questions may provide insight:

investigator may want to bring this up during the interview. On the other hand, if the investigator knows that the suspect will be eventually interrogated, often it is beneficial to wait until the interrogation to bring up evidence of the suspect’s guilt.

Developing Information About the Suspect’s Confidence

During a non-accusatory interview innocent suspects are confident they will be believed whereas guilty suspects are worried about getting away with their crime. The following questions are designed to assess the suspect’s confidence: “Can you think of any reason why someone would name you as the person they suspect?”

“Once we complete our investigation how will it come out on you?”

“Can you think of any reason why the surveillance video would show you inside the vault last Friday afternoon?”

Concluding the Interview

Once all of the relevant information from the suspect has been elicited, the investigator should step out of the interview room, review his interview notes and other evidence collected in the case and make one of three decisions. The first is that the suspect is telling the truth and can be eliminated from further suspicion.

Under this circumstance, the investigator should return to the interview room and say something like the following, “Tom I’ve covered everything I need to cover with you. Thank you for coming in. If

I need to talk to you further I’ll let you know.” A second possibility is that the investigator decides, based on the suspect’s behavior and the evidence, that the suspect is probably guilty of the crime. Under this circumstance, the investigator would return to the interview room and start the interrogation.

In some situations, following the initial interview the investigator may not be able to make a determination of the suspect’s probable guilt or innocence. In other cases, even though the investigator is quite certain of the suspect’s guilt, he may not want to interrogate the suspect at that time. Under these circumstances the investigator would return to the interview room and tell the suspect something similar to the following, “Bill, thank you for coming in today. We are in the process of talking to other people and waiting to get results back on some forensic evidence and it may be necessary for me to talk to you again. You’d be willing to come back and talk to me, wouldn’t you?”

In conclusion, an investigator often has only one opportunity to conduct a formal interview of a suspect. To maximize the amount and quality of information learned during the interview, a specific structure should be used. The issue under investigation should be clearly defined and a series of prepared questions should be asked to develop investigative information and behavior symptoms of truth or deception.

“What is the closest thing to [issue under investigation] that you’ve ever done?”

“Have you every thought about [committing the crime]?”

“Tell me why you wouldn’t [commit crime]?”

“Have you ever been approached by anyone asking you to [commit crime]?”

“Have you ever been questioned before about [issue under investigation]?”

Developing the Suspect’s Explanation for any Evidence

If there is physical or testimonial evidence pointing to the suspect’s possible involvement in the crime, the February 2015 | The Arkansas Banker

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The Arkansas Banker | February 2015

Yield Curve Changes and Management of the

Investment Portfolio In Praise of the “Modified” Barbell ABOUT THE AUTHOR Jeffrey F. Caughron, Chief Operating Officer/ Managing Director of The Baker Group LP, has worked banking, investments, and interest-rate risk management since 1985 and currently serves as a market analyst and portfolio strategist.

Contact: 800-937-2257, jcaughron@GoBaker.com.

Bank investment strategies must be developed within a framework that considers multiple dimensions of risk and reward. We begin with a “big picture” view of the bank and its balance sheet. The asset/liability posture, liquidity position, tax considerations, and expectations for loan demand and deposit growth must all be taken into account. Along with these factors, management must also consider the shape of the yield curve and the cash flow profile of the investment portfolio. This is important since there are distinct strategies that make sense for a steepening yield curve, and different strategies that are optimal for one that is flattening.

Textbook portfolio management tells us that when the slope of the yield curve flattens,

U.S. Treasury Yield Curves: December 31, 2013 vs. June 30, 2014

a duration-weighted combination of short and long maturities will generally perform better than continuous cash flows across the time horizon. On the other hand, if the curve steepens a laddered cash flow of maturities is preferred.

As a simple example, we can examine the effects of a change in yield curve slope on positions in three Treasury Notes: a twoyear maturity, a ten-year maturity, and a 3.5year maturity, which has a duration that is roughly the average of the two- and ten-year combination. We can focus on the relative price changes for the three different bonds.

What we want to study is the change in price or market value for a combination of 2-year and 10-year bonds versus the 3.5-year bond.

When we look at the actual behavior of Treasury yields from year-end 2013 through the second quarter of 2014, we can see that the curve flattened noticeably. For the three bonds in our example, the 2-year yield rose by 5 bps, while the 10-year fell by 50 bps. Meanwhile, the 3.5-year maturity was virtually unchanged.

So when we do the math, we can see that the duration-weighted barbell combination of 2s and 10s outperformed the single 3.5year maturity. This is because the price appreciation of the 10-year more than offset the depreciation of the 2-year, so the net effect was an unrealized gain on the combination. All the while, the middling 3.5-year maturity sat quietly and ended the period at precisely the Continued on page 19

February 2015 | The Arkansas Banker

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Performance-Driven Retirement Plans:

Are They Right for Your Bank?

Bank boards do not like to lose executive talent to competing banking organizations.

Developing a compensation plan that is aligned with shareholder interests and retains key executives continues to be an important objective for compensation committees.

Equias Alliance’s David Shoemaker and Ken Derks share their insights on performancedriven retirement plans in “Performance-Driven Retirement Plans: Are They Right for Your Bank?” This article was published on BankDirector.com on January 5, 2015.

Compensation committees need to evaluate a variety of compensation strategies to determine which will be the most effective at retaining and recruiting key high performing lenders and executives. While offering competitive salary and performance-based annual bonus amounts are a given, providing additional long-term incentives and/or retirement benefits can be the missing component. Equity plans provide an element of longer-term compensation, but are not available in many privately-held banks and, even where offered, can be complemented by other types of long-term incentive plans.

compensation plan for top management (CEO, C-level, executive vice president).

(See our article, “Is Your Compensation Plan Generous Enough?”) Choosing the right retirement plan must incorporate the compensation committee’s overall compensation philosophy and bank objectives.

According to the American Bankers Association 2013 Compensation and Benefits Survey, 64 percent of respondents offered some kind of nonqualified deferred

As an example, let’s assume the bank desires to implement a performancedriven retirement plan for a key lender who is 35 years old. Let’s also assume that

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This article will focus on performancedriven retirement plans, a type of defined contribution nonqualified plan. Longterm incentive plans that are performance driven are generally well-received by shareholders. When such plans are properly designed, if the bank’s shareholders do well, so will the executives.

The Arkansas Banker | February 2015

if the lender meets both department and individual target goals along with the bank-wide net income goal, the lender will receive an annual grant of 10 percent of salary. The bank will cap the grant at 20 percent of salary if maximum performance goals are attained. For this individual, assume the annual contribution is based on a combination of loan growth, deposit growth and bank-wide net income. The goals and the weighting of each goal will vary by officer.

Assuming normal retirement age of 65, and 10 percent of salary contributions each year, the executive is projected to be credited with almost $400,000 in bank contributions. With interest added to the account, the retirement benefit is expected to be almost $80,000 per year for 15 years, a total benefit of $1.2 million. The payments are contingent on the executive not taking a job where he or she competes with the bank after retirement.

This type of arrangement is documented in a legal agreement between the bank and the executive. The agreement must comply

with IRC Section 409A and should address various agreement terms and conditions including: Early voluntary termination Disability Change in control Pre-retirement death Death during payout Non-compete and non-solicitation of customers and employees Holdbacks Qualifiers such as satisfactory performance evaluations and credit quality Form (number of years) and timing (age or date) of benefit distributions It is critical that bank-wide goals along with department and individual goals be linked to the bank’s budget and overall strategic plan. The goal setting process is typically the most challenging step in designing the plan. Some banks use moving averages (such as the bank’s three-year average net income) and other longer-term measures to determine executive performance and bank contributions.

Rewarding executives with a meaningful compensation package tied to long-term shareholder return is a balancing act.

While there is not a one-size-fits-all approach for designing and implementing this type of plan, the facts and circumstances of each bank will dictate the best design after taking into account the bank’s culture and compensation philosophy.

“Modified” Barbell

There is much more to the “modified barbell” structure that we generally recommend for bank portfolios. The short end of the barbell provides a source of re-investable liquidity that allows us to maintain a smooth moving average of yield as we add newly purchased securities. The longer end of the barbell should be populated with high-grade bank-qualified municipal bonds (assuming the bank is fully taxable) where the portfolio can achieve high tax-equivalent yield to meld with the liquidity ladder. In combination, this “modified barbell” provides the optimal mix of liquidity and yield.

The structure of cash flows has always been a key consideration for portfolio managers. As conditions change, the precise distribution of cash flows can be stretched out or pulled in depending on specific needs. This, among other reasons discussed, is what gives the “modified barbell” its power and makes it a high-performance strategy.

RIGHT RATE – RIGHT PARTNER

Equias Alliance offers securities through ProEquities, Inc. member FINRA & SIPC. Equias Alliance is independent of ProEquities, Inc. For more information about Equias Alliance contact Trey Deupree at 469.252.1038.

Community banks have always been where small businesses look for capital to start-up, grow or restructure existing debt. Sometimes, due to regulatory or policy constraints, you must deny the requests. By partnering with Arkansas Capital and Six Bridges Capital Corporations, you can serve these businesses with innovative financing solutions that allow businesses to grow and mature into long-term, high revenue bank customers.

ABOUT THE AUTHORS David Shoemaker, CPA/PFS, CFP®, is a principal of Equias Alliance, which through consultants has assisted over 800 banks in the design of nonqualified benefit plans, performance based compensation and (BOLI). To learn more, contact David Shoemaker at 901-754-4924 or dshoemaker@equiasalliance.com.

Ken Derks is a principal of Equias Alliance, which through consultants has assisted over 800 banks in the design of nonqualified benefit plans, performance based compensation and (BOLI). To learn more, contact Ken Derks at 469-252-1037 or kderks@equiasalliance.com.

Continued from page 17

same yield with no change in price. Even if the duration weighting requires a four-to-one ratio of 2 years vs. 10 years, the combined position wins. It confirms what portfolio managers have always known: a barbell structure (all else being equal) will outperform sequentially laddered cash flows when the yield curve flattens.

Choose the right referral partner, and create positive growth for your bank and your community.

Call us today. 800.216.7237

*January 20-Year Rate Arkansas Capital Corporation Group is an equal opportunity provider.

arcapital.com

February 2015 | The Arkansas Banker

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Agricultural Lending Conference April 8-9, 2015 Holiday Inn Presidential | Little Rock Agriculture plays a large role in the Arkansas economy, and it is undeniable that the ag industry comes with a unique set of challenges. The Agri Lending Conference provides high-quality, timely, and practical financial tools and economic information to both lenders and producers.

We encourage anyone involved in the ag lending process to attend this event, be sure to invite your directors and producers as well!

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The Arkansas Banker | February 2015

2015 Agricultural Lending Conference Agenda Wednesday, April 8 8:00 a.m.

Registration/Continental Breakfast

8:45 a.m.

Announcements

9:00 a.m.

New Trends in Agriculture & Ag Lending

Dr. David Kohl, Ph.D., AgriVisions, LLC The agricultural economy and ag lending field are in a state of transition. The days of easy money in the grain industry are gone. Now the prosperity has shifted to the livestock industry that is going gangbusters.

How long will the cycle last? What are the variables that lenders should watch in an industry with unlimited opportunity to prosper or fail? What are the potential practices that will allow your producers to stay in control of their business during extreme cycles? Find out answers to the questions most frequently asked by producers and ag lenders including changes in interest rates, land values, and rent.

12:00 p.m.

Lunch

1:00 p.m.

New Insights on Credit Analysis

Dr. David Kohl, Ph.D., AgriVisions, LLC This talk will focus on the latest credit analysis topics and benchmarks that determine credit risk and marketing opportunities. Find out the lender and business dashboard economic indicators and how they will influence the economy, as well as ratios and financial metrics that are imperative in sound underwriting and ag lending analysis. Dr. Kohl will list his top ten credit risks/issues looming on the horizon for commercial, traditional, emerging enterprises/vertically integrated operations, and lifestyle farmers.

3:00 p.m.

Adjourn

Thursday, April 9 8:00 a.m.

Continental Breakfast

8:30 a.m.

Analysis and Trends Affecting the Ag Real Estate Secondary Market

Jackson Takach, Farmer Mac Today’s changing landscape and volatile economic environment require bankers to be ready for all kinds of challenges. Learn how Farmer Mac helps lenders bring competitive, long-term financing options to their rural borrowers. Additionally, learn how the secondary market has been helping ag bankers improve their capital position as well as reduce and even eliminate some of their credit and interest-rate risk.

9:30 a.m.

Networking Break

9:45 a.m.

Ag Banking Round Table Discussion Be prepared to network during this session led by your agri lending peers from across the state. We will explore best practices regarding operational challenges, loan processes and procedures, documentation, and regulatory concerns. This will be a great opportunity to learn from each other’s experiences and challenges.

12:00 pm

Adjourn

Featured Speakers Dr. David Kohl, PhD. AgriVisions, LLC

Dr. Kohl, president of AgriVisions, LLC, is a business coach and part owner of Homestead Creamery, a value added dairy business in the Blue Ridge Mountains.

For 25 years, Kohl was Professor of Agricultural Finance and Small Business Management and Entrepreneurship in the Department of Agricultural and Applied Economics at Virginia Tech, Blacksburg, Virginia.

Jackson Takach Farmer Mac

Mr. Takach, a Kentucky native, is an Economist for Washington, DC-based Farmer Mac. His focus at Farmer Mac includes quantitative analysis of credit, interest rate, and other market-based risks as well as monitoring conditions of the agricultural economy, operational information systems analysis, and statistical programming.

February 2015 | The Arkansas Banker

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It’s Time to Teach Children to Save! th

April 24 Marks 19 Annual Teach Children to Save Day

It takes a village. As a hometown banker, you know that it truly does take a village to raise a child... and that local schools, businesses, and community organizations all have a stake in not only raising good kids, but also in creating good consumers.

April 24 is Teach Children to Save Day — take this opportunity to lead your community in its commitment to growing a moneysavvy generation!

Established by the American Bankers Association in 1997, Teach Children to Save is a national campaign of banker volunteers to educate young people about the importance of developing a lifelong savings habit. Each year, Arkansas bankers join over 13,000 bankers from across the country taking part in this nationwide effort to improve financial literacy. Entering its nineteenth year, the program has reached 7.2 million young people through the time and commitment of local bankers.

Banks can register to participate with the AmBA’s Teach Children

to Save program, which gives them access to free resources, including presentation planning tools, lesson plans, media guides, and online training.

Once your bank is registered, volunteer bankers schedule classroom visits to help students explore the world of saving through hands-on lessons and activities. Lesson plans are available for a wide range of ages, and cover a variety of topics including the difference between needs and wants; identifying expenses, tradeoffs and ways to cut spending; returns on investments; and saving for unexpected problems.

Don’t stop at the classroom! There are Teach Children to Save resources that can be sent home to parents, or through local media outlets.

If you would like more information on Teach Children to Save Day, or would like to register your bank for the program, log on to www.aba.com/Teach.

Thanks to these Arkansas banks for participating in Teach Children To Save 2014!

Alma BancorpSouth Brinkley BancorpSouth Bank Cabot Centennial Bank Calico Rock BancorpSouth Bank Carlisle BancorpSouth Bank Conway First Security Bank Des Arc Farmers & Merchants Bank Fayetteville BancorpSouth Fort Smith Arvest Bank BancorpSouth Bank

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Greenwood BancorpSouth Bank Farmers Bank

Little Rock BancorpSouth Bank Eagle Bank & Trust

Harrison First Federal Bank

Marianna Farmers & Merchants Bank

Pocahontas BancorpSouth Bank Integrity First Bank

Hazen BancorpSouth Bank Farmers and Merchants

Melbourne BancorpSouth Bank

Quitman US Bank

Morrilton Farmers & Merchants Bank

Russellville First State Bank

Mountain Home First National Bank & Trust Company

Searcy Simmons Bank

Hope BancorpSouth Bank Horseshoe Bend BancorpSouth Bank Hot Springs BancorpSouth Bank First National Bank Jonesboro BancorpSouth Bank Heritage Bank Simmons Bank

The Arkansas Banker | February 2015

Osceola BancorpSouth Bank Perryville Farmers and Merchants Bank Piggott Piggott State Bank

Pine Bluff Simmons Bank

Stuttgart Arkansas County Bank Farmers & Merchants Bank Warren Warren Bank & Trust Co. Wynne First National Bank

PROFESSIONAL DEVELOPMENT Arkansas State Bank Dept.

Applications Approved BRANCH BANK APPLICATION

Mountain Home High School Students Complete Principles of Banking Course

An application filed by Heartland Bank, Little Rock, Pulaski County, Arkansas, to establish a branch banking facility at One Information Way, Suite 300, Little Rock, Pulaski County, Arkansas, has been approved. January 6, 2015.

MERGER APPLICATION

An application to merge 1st Bank, NA, Texarkana, Texas, with and into Farmers Bank & Trust Company, Magnolia, Arkansas, has been approved. January 15, 2015.

CHARTER CONVERSION APPLICATION

An application filed by RiverBank Savings and Loan Association, Corning, Arkansas, a statechartered savings and loan association, to a state-chartered bank to be known as RiverBank, to be located in Pocahontas, Arkansas, has been approved.

January 15, 2015.

Sixteen students from Mountain Home High School recently completed the Principles of Banking course through the ABA as part of the Arkansas Career and Technical Education Finance Pathway for Banking Program of Study. Jerry Don Cunningham, CEO of Twin Lakes Community Bank, presented the students with their certificates of completion on January 29. Along with their coursework, the class heard from local bankers from Integrity First Bank and Twin Lakes Community Bank — guest speakers focused on opening bank accounts, the importance of credit history, lending, and other topics.

Pictured are, back row, Mountain Home High School Business Education instructor Sheri Smith, Colby Collins, Cordell Hogan, Justin Pattie, Zane Walker, Matt Zipper, Caleb Kruse, Hannah Plumlee, and Jerry Don Cunningham; front row, Genevea Milholland, Kodie Paul, Jayden Phillips, Haley Hunter, and Alex Hart. Not pictured: Vincent Cimino, Maysa Fouts, Taylor Hasselwander, and Jaden McClellan.

GSB Scholarships: All You Have to Do is Apply Each year, the ABA teams up with some of the top graduate schools of banking across the country to provide scholarships to deserving Arkansas bankers to encourage and promote excellence in the fields of banking and finance.

Below is a list of GSB scholarships still available for the 2015 session. For more information and application instructions, log on to our website, www.arkbankers.org.

GSBC Future Leaders Scholarship

SWGSB Millenium Scholarship

Prochnow Educational Foundation & Arkansas Bankers Association Scholarship

Graduate School of Banking at Louisiana State University Scholarship

Graduate School of Banking at Colorado - Boulder, Colorado Application Deadline: March 1, 2015 2015 Session: July 12 – 24, 2015 Total Value: $1,325 per year, up to three consecutive years

Graduate School of Banking at Wisconsin - Madison, WI Application Deadline: April 17, 2015 2015 Session: August 2 – 14, 2015 Total Value: $1,300 for three years

! ** ** 2 Available

SW Graduate School of Banking Foundation - Dallas, Texas Application Deadline: March 31, 2015 2015 Session: May 25 – June 5, 2015 Total Value: $1,500 per year for up to three years

Graduate School of Banking at LSU - Baton Rouge, Louisiana Application Deadline: March 31, 2015 2015 Session: May 24 – June 5, 2015 Total Value: $3,845 for first year only February 2015 | The Arkansas Banker

23

BANKER NEWS & MOVES SIMMONS FIRST NATIONAL CORPORATION ANNOUNCES OFFICER PROMOTIONS

Simmons First National Corporation has announced the recent promotion of Tina Groves to Executive Vice President and Chief Risk Officer, Kevin Pletcher to Senior Vice President and Assistant Controller and Burt Hicks to Chief of Staff and Vice President of Mergers and Acquisitions Tina Groves draws on over 23 years of professional experience in internal audit and accounting, including eight years with Simmons, for her new role as Executive Vice President and Chief Risk Officer. She was previously Senior Vice President and Manager of Corporate Audit and Compliance.

Groves is a Certified Public Accountant and holds a Bachelor of Science in Accounting from the University of Arkansas at Monticello. She has completed numerous industry training courses offered through the American Bankers Association, Crowe Horwath and the Arkansas Chapter of the Association of Certified Fraud Examiners. In addition, she is a member of the Institute of Internal Auditors, the Arkansas Society of CPAs (ASCPA) where she previously served as President of the Southeast Chapter, the Arkansas Chapter of Certified Fraud Examiners and the Information Systems Audit and Control Association (ISACA). Groves is an active volunteer with the Junior

24

Achievement of Arkansas financial literacy and career readiness programs within Jefferson County schools.

Kevin Pletcher brings more than 25 years of corporate accounting and reporting experience in the financial industry to his new role of Senior Vice President and Assistant Controller. He first joined Simmons in 2005 as Assistant Vice President and Corporate Accounting Manager.

Pletcher received his Bachelor’s Degree in Accounting from Southern Arkansas University in Magnolia where he graduated with cum laude honors. He is a Certified Public Accountant and a member of the American Institute of CPAs (AICPA), the Arkansas Society of CPAs (ASCPA) Central Arkansas Chapter.

He has completed numerous U.S. Securities and Exchange Commission (SEC) reporting and compliance courses along with various financial industry accounting and tax training courses offered through BKD, Crowe Horwath and other national CPA firms. Pletcher is an active volunteer with the American Cancer Society.

Burt Hicks was named Chief of Staff and Vice President of Mergers and Acquisitions.

He returned to work at Simmons in April 2014 as Manager of Corporate Responsibility and Special Projects after graduating with honors from the University of Arkansas at Little Rock Bowen School of Law. He previously worked at Simmons as a

The Arkansas Banker | February 2015

Corporate Rotational Analyst.

Hicks also serves as Assistant Secretary to the Simmons First National Corporation Board of Directors, Secretary to the Simmons First National Bank Board of Directors and is a member of the Simmons First Foundation Board of Directors.

In addition to his law degree, Hicks has a Bachelor’s Degree in Finance and Investment Management from the University of Arkansas Walton College of Business and a Masters in Public Service from the Clinton School of Public Service. While in law school, Hicks served as a Business Commercialization Associate at Innovate Arkansas, a joint program of Winrock International and the Arkansas Economic Development Commission.

He is a member of the Arkansas Bar Association and a Registered Representative holding both Series 7 and 63 licenses. Additionally, Hicks is a member of the University of Arkansas Walton College of Business Dean’s Alumni Advisory Council, the Arkansas Fellowship Board of Directors, the Arkansas Independent Colleges and Universities Board of Trustees and the Jefferson County Industrial Foundation Board of Directors.

SIMMONS BANK ANNOUNCES RUSSELLVILLE MARKET MANAGEMENT TRANSITION

Simmons Bank has announced the decision by Ronald “Ron” B. Jackson, Russellville Community Bank Chairman and CEO, to begin the transition of his leadership role to R. Scott Hill, Russellville Community President and Denton E. Tumbleson, Clarksville Community

President. The transition will begin on April 1, 2015.

Jackson will remain an active member of the bank and continue to serve as a member of the Loan Review Committee and the Russellville Community Bank Board of Directors. Additionally, Jackson will continue to serve Simmons Bank with a focused effort on business development and active representation of the bank through his involvement in community, civic and charitable events in the greater Russellville area.

“We are very fortunate and grateful to have Ron as a member of the Simmons Bank family for the past 30 years and look forward to his continued involvement. Ron is one of the most highly respected bankers that I have had the pleasure to work with, and I have a deep regard for his service to this organization. Ron joined the Simmons family in 1984 when we acquired First Bank and Trust of Jonesboro, and ultimately became President and CEO of that bank. Thirteen years later Ron accepted the challenge and made the decision to relocate his family to Russellville to become Chairman and CEO of our newly acquired Russellville market where he has served for the past 17 years,” stated David L. Bartlett, President and Chief Banking Officer of Simmons Bank.

Bartlett added, “We respect Ron’s decision and are excited about the continuity of leadership from these two individuals of the executive leadership team that Ron has in place. Mr. Hill and Mr. Tumbleson have nearly 30 years of dedicated service to Simmons and a combined 50 years of financial experience.

They are tremendous assets

BANKER NEWS & MOVES to the market and our organization.”

Hill joined Simmons Bank in 2002 as Russellville Community President, bringing with him 17 years of financial experience. Hill also serves as Senior Lending Officer in this market. Hill is a graduate of the University of Arkansas where he obtained his Bachelor of Science in Business Administration degree in Finance and has completed the Louisiana State University Graduate School of Banking and the American Bankers Association National School of Compliance at the University of Oklahoma.

Hill currently serves as a member of the Board of Directors for the Russellville Chamber of Commerce, the River Valley Boys and Girls Club and the Russellville High School Renaissance Board.

Additionally, he is a past board member of the Russellville Kiwanis Club.

Tumbleson began his financial career in Russellville in 1994 and became a part of the Simmons Bank family in 1997 as Executive Vice President. He has served as the Clarksville Community President since 2002. Tumbleson holds a Bachelor of Science degree in Business Administration from the College of the Ozarks and has also completed the Louisiana State University Graduate School of Banking and the American Bankers Association National School of Compliance at the University of Oklahoma.

Tumbleson currently serves on the Clarksville Rotary Club Board of Directors and is the organization’s past President.

Tumbleson has served as a member of the Board of Trustees for the University of the Ozarks and was President

of the Alumni Association.

Additionally, he has served as Board Chairman of both the Clarksville Housing Authority and Child Development, Inc., as well as a Board member of the Johnson County Community Foundation and the West Central Planning & Development Workforce Investment Board.

SIMMONS BANK NAMES PATTERSON PARAGOULD COMMUNITY EXECUTIVE

Simmons Bank recently announced the addition of E. Anthony Patterson as Paragould Community Executive according to Daniel Robinson, Northeast Arkansas Community President.

Patterson brings 11 years of financial services experience in northeast Arkansas to Simmons Bank, including commercial and agricultural lending experience. He has previously held positions as Branch Manager, Loan Officer, Assistant Vice President and most recently Senior Vice President.

“We are extremely pleased to have Anthony Patterson as our Paragould Community Executive and a member of our management team. Anthony has strong leadership skills, character, integrity and a great reputation with his customers.

He is committed to providing the highest level of personal service,” stated Robinson.

Patterson holds a Bachelor of Science in Finance from Arkansas State University and has successfully completed the Barret School of Banking from Christian Brothers University in

Memphis, Tennessee and the Arkansas Bankers Association Commercial Lending School.

Patterson is active in the community and serves as President and past Secretary of the Trumann School District Board of Directors. He has previously served as Chaplain for the Trumann Police Department, Chairman for the Poinsett County Education and Economic Development Committee and served on the Trumann Chamber of Commerce Board of Directors where he is past Chairman of the Board.

DONNA PARTON NAMED RETAIL BANKING MANAGER

Jason F. Tennant, Cornerstone Bank Executive Vice President, is pleased to announce the appointment of Donna Parton to VicePresident, Retail Banking Manager.

Ms. Parton will oversee the local bank’s sales team and be responsible for the bank’s marketing efforts and product development. She brings 28 years of experience within the banking industry having worked for Arvest Bank and First National Bank of North Arkansas prior to joining Cornerstone Bank’s Management Team.

Tennant stated, “We are excited to add someone of Donna’s caliber to this new position within our bank family. This is another positive step for enhancing the level of service to our client base.

Donna brings a strong retail banking background that will allow our bank to grow in relationship banking in both

Carroll & Madison Counties.

Her leadership to an already capable and strong team of professional bankers will be invaluable.”

Ms. Parton is a resident of Berryville and graduated from Flippin High School and has resided in Carroll County since 1986. Donna’s associations and memberships include Kiwanis Club, Carroll County Recreation Association Secretary (Carroll County Country Club), current member and Past President of the Berryville Chamber of Commerce and a member of the Towering Oaks Church in Berryville.

Ms. Parton and her husband Marty Parton reside in Berryville. They have three children Lynsey Griffith, Garrett Griffith and Cole Parton.

MCKINNON EARNS U.S. BANK HOME MORTGAGE’S PRESIDENT’S CLUB AND PRESIDENT’S CIRCLE HONORS

U.S. Bank Home Mortgage has named Keith McKinnon, NMLS #502525, a President’s Club honoree for the fourth year in a row.

He has also received the Elite Award of Presidents Circle for 2014. McKinnon’s mortgage sales production ranks him as one of the Top 25 loan officers for U.S. Bank Home Mortgage in the United States.

McKinnon is a mortgage loan originator at the U.S. Bank office located at 1122 Van Ronkle St. in Conway.

He earned a Business Administration degree from the University of Central Arkansas in Conway.

February 2015 | The Arkansas Banker

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BANKER NEWS & MOVES BARTON NAMED CENTENNIAL BANK MARKET PRESIDENT

Chris Barton has joined Centennial Bank as Rogers/ Bentonville Market President according to Scott Hancock, Northwest Arkansas Division President.

“Chris brings a strong network and financial background that will take our Rogers/Bentonville markets to the next level,” said Hancock. “Our customer and bankers will appreciate the strong leadership that he brings to our organization.”

Barton has over 14 years of financial experience and most recently served as a vice president of commercial lending.

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He is an alumnus of the University of Arkansas where he earned a Bachelor of Science in marketing management. Barton is a graduate of the Commercial Lending School at Southern Methodist University and will complete the Graduate School of Banking at Louisiana State University in June 2015.

Barton is a Community Leadership Council member for the Single Parent Scholarship Fund of Northwest Arkansas, a non-profit organization that provides financial assistance to low-income single parents pursuing career-related education.

He and his wife, Courtney, have two children, Bishop, 6, and Whit, 4. Barton will be located in Centennial Bank’s 4000 West Walnut Street banking center in Rogers.

The Arkansas Banker | February 2015

STEPHEN COX JOINS CENTENNIAL BANK

Stephen Cox recently joined Centennial Bank as a commercial loan officer, according to Sonny Campbell, Northeast Arkansas Chief Lending Officer.

“Over the past year, we’ve built our Northeast Arkansas lending team with outstanding individuals from around the region, and Stephen Cox is no exception,” said Campbell.

“Stephen’s outstanding intellect, knowledge of the community and dynamic personality are great assets to Centennial Bank and our customers,” he added.

Cox previously served as Integrated Solutions

Manager for a full service farm equipment dealership.

His responsibilities included managing technology solutions to increase productivity and efficiency for farmers in Northeast Arkansas and Southeast Missouri.

“The most intriguing aspect of the banking industry is the ability you have to help companies reach their financial goals by lending funds to help them establish a solid and sound business foundation.

Whether you are helping a startup company or a long time established business, it is always very rewarding to know you have made a difference,” said Cox. “The banking business offered me an exciting new set of challenges that will enable me to grow and stay motivated,” he added An alumnus of the University Continued on page 27

INDEX OF ADVERTISEMENTS Arkansas Capital Corporation

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CNA Insurance www.cna.com

Graduate School of Banking at LSU

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Cox is a member of the Jonesboro Regional Chamber of Commerce. He served as co-chair of Triple Swing golf tournament for two years.

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www.gsblsu.org

The Baker Group www.gobaker.com

Continued from page 26

of Arkansas, Cox holds a Bachelor of Science in agricultural business marketing management and a Master of Science in agricultural economics.

www.website.com

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BANKER NEWS & MOVES

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ADVERTISEMENTS For more information on advertising in The Arkansas Banker, please contact Traci Logsdon, Director of Communications, via email at traci.logsdon@arkbankers.org, or by phone at 501.978.3603.

Cox and his wife, Madeline, live in Jonesboro and attend First United Methodist Church. His office is located in Centennial Bank’s Northeast Arkansas headquarters at 2901 East Highland Drive in Jonesboro.

POTTER ELECTED DIRECTOR OF BANK OF LAKE VILLAGE

Charles Weissinger, Chairman of the Board of the Bank of Lake Village and Southeast Arkansas Bank Corporation, announced that John T. (Todd) Potter was elected as a director of the Bank of Lake Village and Southeast Arkansas Bank Corporation at their annual stockholders meeting in January.

Todd began his banking career with the Bank of Lake Village on July 8, 1998, as Vice President and Agricultural Loan Officer. He also serves as Secretary to the Board of Directors.

Todd graduated from the University of Arkansas at Monticello with a degree in Business Management. He also graduated from the Graduate School of Banking at LSU in Baton Rouge, LA. in 2003.

Todd is currently serves as a director of Chicot Memorial Hospital. He has served as Chairman of the Hospital Board, a board member of Lake Village Chamber of Commerce and a member of the Lake Village Economic Development Commission.

The Arkansas

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

Todd and his wife Laura attend the Lake Village Baptist Church. They have two children, Madalynn and Henry.

PLAISANCE ASSUMES CEO ROLE AT ARVEST MORTGAGE CO. AND CENTRAL MORTGAGE CO.

Steven Plaisance has taken over the role of CEO for both Arvest Mortgage Co. and Central Mortgage Co., a wholly owned subsidiary of Arvest Bank.

Plaisance became President and COO for Arvest Mortgage Co. (AMC) and Central Mortgage Company (CMC) in March 2012, and will retain the role of president for both.

Plaisance began his career with Arvest as a part-time teller in Rogers in 1989.

He joined AMC in 1991 and has held a variety of leadership positions since 1996.

Plaisance is an active member of the Mortgage Bankers Association, and other industry associations. He is a two-time president of the Oklahoma Mortgage Bankers Association.

AMC and CMC, which have locations in Arkansas and Oklahoma, regularly originate $1 billion-plus in mortgage loans annually, and currently service a combined $38 billion in mortgage loans.

“I am excited about the opportunity to lead our talented mortgage team into the future,” said Plaisance, who will report to Arvest Bank COO Phil Porter. “Arvest is dedicated to serving mortgage customers through originations and servicing, and I look forward to continuing the many good things we have done in these areas.”

Plaisance earned a bachelor’s degree in business administration from the University of Arkansas. He’s also a 1998 graduate of the Mortgage Bankers Association Future Leaders Program.

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ARKANSAS BANK DIRECTORIES are still available. Call 501.376.3741 for pricing and details.

EMAIL YOUR CLASSIFIED AD to traci.logsdon@arkbankers.org.

February 2015 | The Arkansas Banker

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save the date!

125th Annual Arkansas Bankers Association

Convention & Trade Show

May 6-8, 2015 | Little Rock Marriott & Statehouse Convention Center

Bridging the Past

with the Future

be watching your mailbox and your inbox for details!

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The Arkansas Banker | February 2015