The Arkansas Banker June 2016

Convention Wrap-Up

Bank Management Seminar

Armed Guards

The Arkansas

Banker

2016-17 Chairman of the Arkansas Bankers Association

Sean Williams and His Wife Leslie Volume C, No. 6 | June 2016 June 2016 | The Arkansas Banker

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ABA Live Events ABA Professional Development

Live Events...

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

JULY 2016

14–15 | Consumer & Real Estate Lending Compliance

Embassy Suites, Little Rock Who Should Attend: Compliance Officers, Loan Officers, Loan Processors and Auditors

AUGUST 2016

3–5

| Bank Management Seminar

Hilton Sandestin, Destin, Florida Who Should Attend: Bank Directors, CEOs, Presidents, and Senior Management

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8–12 | Consumer Lending School

Crowne Plaza, Little Rock Who Should Attend: Bank personnel who would like a better understanding of consumer lending, particularly those who are new to banking

| Real Estate Loan Documentation

Crowne Plaza, Little Rock Who Should Attend: Commercial Lenders, Credit Analysts, Loan Documentation Specialists, Branch Managers, Private Bankers, and Business Development Officers

25 | Banking the Medical, Legal and Accounting Professional

Crowne Plaza, Little Rock Who Should Attend: Commercial Lenders, Business Development Officers, Private Bankers, Branch Managers, Assistant Branch Managers, and Credit Analysts

18 | BSA/AML Compliance Management

Crowne Plaza, Little Rock Who Should Attend: Personnel who have responsibility for maintaining or auditing BSA compliance efforts

23 | Legal Issues of New Account Documentation Crowne Plaza, Little Rock Who Should Attend: Customer contact personnel, Internal Auditors, Compliance Officers, Supervisors & Officers whose responsibilities include opening or managing new accounts and CDs

SEPTEMBER 2016

7–8

| Call Report Preparation

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| 2016 TRID Essentials (Integrated Disclosures)

Crowne Plaza, Little Rock Who Should Attend: Anyone responsible for preparing, auditing, or signing the call report Holiday Inn Presidential, Little Rock Who Should Attend: Mortgage Loan Department Managers, Compliance Officers, Loan Officers, Auditors, and others with responsibilities for preparing, delivering, or auditing new disclosures

21

| Credit Conference

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| Regulatory Hot Buttons Conference

Crowne Plaza, Little Rock Who Should Attend: CEOs, Chief Credit Officers, Senior Lenders, Commercial Loan Officers, Credit Administrators, and Credit Support Staff Crowne Plaza, Little Rock Who Should Attend: Bank Directors, CEOs, and Executive Management

For more For more information information about about ABA ABA Live Events, Live Events, log on logtoon www.arkbankers.org to www.arkbankers.org or call or501.376.3741 call 501.376.3741

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The Arkansas Banker | June 2016

The Arkansas

Banker Volume C, No. 6 | June 2016

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

EDITORIAL OFFICE

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

CONTENTS COLUMNS

4

President’s Column

6

Chairman’s Column

Bill Holmes

Sean Williams

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.

37 Member News

DEPARTMENTS

SUBSCRIPTION

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

FEATURES

Same Day ACH...Is Your Financial Institution Ready?

10

Assessing Your Examination Process: The Good, Bad & Ugly

12

By Hugh Patterson

By Scott Polakoff & Stephen Brown Klinger

Armed Guards: Weighing the Benefits Against the Liability Risks and Costs

By Tom Pecoraro

32 Bank Management Seminar 34 Five Strategies for

Spotting Trends First

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.

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MAGAZINE RATES

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.

39 Classifieds 39 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.

38 Banker News & Moves

2016 ANNUAL CONVENTION

By Robert Tucker

14 Annual Convention Wrap-Up 22 Faces of the ABA:

2016-17 Board of Directors 24 Faces of the ABA:

2016-17 Slate of Officers 26 Milestones in Banking Awards

June 2016 | The Arkansas Banker

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PRESIDENT’S COLUMN Strategic Planning 2016-17 Each summer, the ABA holds a Board Planning Retreat to chart our course for the coming years.

For our upcoming retreat, we set five items as our preliminary agenda. They are: Mapping Professional Development transformation; how do we innovate to better educate?

Should we develop a “Leadership Academy” to fill a perceived lack of talent for banking?

Should we combine some of our conferences and meetings to shorten time out of the banks?

How can we build a bigger and better Emerging Leaders program?

How do we engage more banks and bankers in our local and national GR efforts?

Our directors and our staff will be presenting these ideas as we start to develop them in the very near future.

All of this planning and researching reminded me of a story that one of my counterparts sent out before their annual planning retreat. It was good to read it prior to the planning session to

add a little humor, and a little folklore to the event. It went like this: Ever wonder why some people are resistant to change? The U.S. standard railroad gauge (width between the two rails) is 4 feet, 8.5 inches. That’s an exceedingly odd number. Why was that gauge used? Because that’s the way they built them in England, and the U.S. railroads were built by English expatriates. Why did the English build them like that? Because the first rail lines were built by the same people who built the prerailroad tramways, and that’s the gauge they used.

Why did “they” use that gauge then? Because the people who built the tramways used the same jigs and tools that they used for building wagons which used that wheel spacing. Okay!

Why did the wagons have that particular odd wheel spacing? Well, if they tried to use any other spacing, the wagon wheels would break on some of the old, long distance roads in England, because that’s the spacing of the wheel ruts.

So who built those old rutted roads? The first long distance roads in Europe (and England) were built by Imperial Rome for their legions.

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 F. ROBERTS

BARRY JACKSON

SVP/COO 501.978.3613 | barry.jackson@arkbankers.org

KAMI TAYLOR COLEMAN

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

TRACI LOGSDON

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

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

JESSICA SAHENE

BRENDA SCARBROUGH

MARKETING COORDINATOR 501.978.3609 | jessica.sahene@arkbankers.org

STUART THALHEIMER

EXECUTIVE ASSISTANT 501.978.3605 | stuart.thalheimer@arkbankers.org

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PRESIDENT & CEO BILL HOLMES

The TheArkansas ArkansasBanker Banker || June June2016 2016

PROFESSIONAL DEVELOPMENT COORDINATOR 501.978.3607 | brenda.scarbrough@arkbankers.org

CAROL ALLEN

ADMINISTRATIVE ASSISTANT 501.978.3600 | carol.allen@arkbankers.org

The roads have been used ever since. And the ruts in the roads? Roman war chariots first formed the initial ruts, which everyone else had to match for fear of destroying their wagon wheels. Since the chariots were made for (or by) Imperial Rome, they were all alike in the matter of wheel spacing. The United States standard railroad gauge of 4 feet, 8.5 inches derives from the original specification for an Imperial Roman war chariot. Specifications and bureaucracies live forever.

So the next time you are handed a specification and wonder what horse’s ass came up with it, you may be exactly right, because the Imperial Roman war chariots were made just wide enough to accommodate the back ends of two war horses. Thus, we have the answer to the original question.

Now the twist to the story…

There’s an interesting extension to the story about railroad gauges and horses’ behinds. When we see a space shuttle sitting on its launch pad, there are two big booster rockets attached to the sides of the main fuel tank. These are solid rocket boosters, or SRBs. The SRBs are made by Thiokol at their factory in Utah. The engineers who designed the SRBs might have preferred to make them a bit fatter, but the SRBs had to be shipped by train from the factory to the launch site. The railroad line from the factory had to

ABA EXECUTIVE COMMITTEE

run through a tunnel in the mountains. The SRBs had to fit through that tunnel. The tunnel is slightly wider than the railroad track, and the railroad track is about as wide as two horses’ behinds. So, the major design feature of what is arguably the world’s most advanced transportation system was determined over two thousand years ago by the width of a horse’s ass!

According to Snopes, “this story is one that, although wrong in many of its details, isn’t completely false in an overall sense and is perhaps more fairly labeled as partly true, but for trivial and unremarkable reasons.”

Even though it is more tale than truth, the story does remind us that we bankers can be remarkably inventive, and, we are also often resistant to change and can be persistently stubborn (or perhaps practical) in trying to apply old solutions to new conditions. Our focus as your association is to find the best ways to make our banks more nimble and more responsive to changes in our industry. Especially in times like now when change is picking up its pace every day.

Please feel free to share your focuses and feedback on any innovations you think we need to be aware of.

Thank you again for your commitment to our communities and to our industry.

SEAN WILLIAMS | CHAIRMAN First National Bank of Wynne, Wynne

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

Eagle Bank, Little Rock

JUDY LAWTON | TREASURER

ROBERT Y. TAYLOR | PAST CHAIRMAN

BILL HOLMES | PRESIDENT/CEO

Heartland Bank, Little Rock

The Citizens Bank, Rogers

ABA BOARD OF DIRECTORS

PAT ANDERSON | GROUP 5

DAVID DOWD | GROUP 1

CATHERINE OWEN | VICE CHAIRMAN

Arkansas Bankers Association, Little Rock

JON HARRELL | GROUP 3

JERRY MORGAN | GROUP 1

Simmons Bank, Pine Bluff

Cross County Bank, Wynne

Generations Bank, Rogers

Focus Bank, Jonesboro

PHIL BALDWIN | GROUP 2 Citizens Bank, Batesville

TROY DUKE | GROUP 5 Gateway Bank, Rison

Bank of Delight, Delight

DARWIN HENDRIX | GROUP 4

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

JIM CARGILL | GROUP 2

DON GIBSON | GROUP 3

J. MICHAEL JONES | GROUP 5

JIM TAYLOR | GROUP 3

Arvest Bank, Little Rock

Legacy National Bank, Springdale

Merchants & Farmers Bank, Dumas

First Security Bancorp, Fayetteville

GENE CRAWFORD | GROUP 5

CHRIS GOSNELL | GROUP 4

CRAIG MOBLEY | GROUP 4

LYNN WRIGHT | GROUP 2

First National Bank of Crossett, Crossett

Farmers Bank & Trust Co., Magnolia

First Financial Bank, El Dorado

SCOTT HANCOCK | GROUP 3

WILSON MOORE | GROUP 2

Centennial Bank, Fayetteville

Regions Bank, Little Rock

Bank of America, Little Rock

June 2016 | The Arkansas Banker

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CHAIRMAN’S COLUMN I am very humbled by the opportunity to serve as your chairman in the coming year, and to work with the exceptional team here at the ABA. The Association celebrated its 125th Anniversary at this year’s Convention; this is a tremendous milestone for the Arkansas Bankers Association.

The ABA has been a driving force in the banking industry for 125 years, with a rich and storied history. The respected traditions, performance, and contributions of this organization are unquestionable. And when I think of the people who have served on the board and served as Chairman — tremendous leaders, that I have the utmost respect for — it’s a little overwhelming for me. And I have this opportunity because I’ve been blessed to work with a lot of excellent people.

with them….and the investment they made in raising me, and my two red headed sisters, which I can assure you wasn’t always easy, but was done with love and Godly guidance, expectations, support, and….sometimes, correction! I also appreciate the support of my two red headed sisters, Dionne Thompson and Julie Dailey, along with Julie’s husband, and my long-time friend and brother-in-law, Tony Dailey.

I want to begin by saying thank you to Robert and Judy Taylor. It’s truly been a pleasure for Leslie and me, over the past year, to spend time and get to know them personally. Robert is a terrific banker, and leader, and I have tremendous respect for him professionally. But even more than that, and more importantly, he and Judy are both as fine of human beings as you’ll ever know — they’re both great people, they’re a delight to spend time with, and really have become family to Leslie and I both. My thanks to you Bob and Judy. I also want to thank Bill and Rita Holmes for their leadership and taking excellent care of us as we’ve attended various meetings. I appreciate them both. I also want to say thank you to the other executive committee members and their spouses for their willingness to serve. Leslie and I look forward to continuing to work with Dave and Memorie Dickson, as well as Cathy and Steve Owen, and Judy Lawton and Nathan Austin. And I want to recognize Chuck and Cappi Morgan, who are also tremendous people and have been a pleasure for us to serve with and get to know personally. I’m looking forward to working alongside the entire ABA Board of Directors, and the ABA staff in the coming year. These folks do an exceptional job of both advocating and educating on our behalf.

Preparing for my installation as Chairman gave me the opportunity to reflect on my career in this industry. It made me feel a little old….but the thing that kept coming back to me over and over again, was how tremendously blessed I have been. God has truly blessed me. For over 23 years, I have always enjoyed going to work.

I love what I do, I love this business and the many aspects of and things we do in banking. I enjoy the numbers and analysis, the strategy, the challenges, the interaction with people…and the very unique and special relationships that you establish in our business! Many people have taught, influenced, and mentored me through the years, and I continue to learn every day. And those memories are so special — they’re not all positive — some are pretty difficult, but they are all important…and that’s how we learn, at least I do. I grew up in a family farming rice and soybeans… and there are a lot of lessons to be learned from the farm. One is just about working….and Dad taught me how to work.

Another thing that he and Mom taught me is that I should always respect others — to treat people like you want to be treated. That’s not really complicated, but it is difficult sometimes.

And I think it works today with my girls, just like it works in our banks. I got into the financial world when my college advisor talked me into going to a job interview at Arkansas State just for the experience….that’s how I got started on the dark side….at Farm Credit. But there were people there that took the time and energy to invest in teaching me during my time there.

My first role in a bank began toward the end of 1999 in my hometown of McCrory where I spent about 11 years. A place I enjoyed so much, and had the opportunity to work with some

I want to recognize my family. Leslie… sweetheart, thank you, for your love and constant support. We have two beautiful daughters, Kendal and Kelby, and I couldn’t be more proud of the two of them…thank goodness they take after their Mom! I would like to thank my parents, James and Janice Williams. I have lots of room for improvement, but the ethic and values that I do have, as well as the opportunities that have been afforded me in life, have a lot to do

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The Arkansas Banker | June 2016

I want to recognize my Bank family and say thank you to them for their hard work and constant commitment to our organization, and for also making me look better than I am…. which can sometimes be pretty challenging!

Thank you to each of you for doing a great job of running our bank….I truly appreciate my bank family…And it really is just that, family.

CHAIRMAN SEAN WILLIAMS President & CEO First National Bank of Wynne

tremendous people…and a time when I learned a lot. And you really do learn a lot as a banker in your hometown. And then for nearly six years now, at First National Bank in Wynne, a very special place….where, for most part, I just don’t feel like I’m working. Primarily because the people I work with are outstanding.

And people are always the key….in our industry and in others. In my career, there have been board members, coworkers, sometimes even examiners, even a few attorneys and consultants come to mind, but people, people have taken the time to share, to listen, and to work with me…to have a relationship with me. I know what I’m sharing is exactly what you all do each and every day. Our banks across this state are the backbone of our economy and our communities, serving and giving in many ways. You invest in communities with money and time, and you invest in relationships.

And in the community bank world, relationships are really how we live, it’s how we do business….and it’s who we are in Arkansas. Because of that, banks are as relevant today as they were 125 years ago when Colonel Logan Roots stood

before the ABA’s first convention. Much has changed since that first convention… regulations, people, technology. But the power of a relationship has not changed. Several years ago, Joe Miles called me and asked me to serve a one year term on the ABA Board. That call got me involved in the ABA, opened my eyes, and it helped me understand why our Association is so important. That call really started my relationship with the ABA, and was the beginning of an educational process for me. I saw and learned that we must advocate for our industry. Today, maybe more than ever, I believe our future success depends on our ability to engage more of our bankers in carrying our message….and leveraging the strong relationships that already exist within our organizations, by allowing, and encouraging individuals all across our banks…to tell our stories to those who make decisions…both in Arkansas and Washington, DC. The roles our banks play in this state are important... and they’re worth fighting for. And I’m going to make it a priority to invest the time and the effort to grow my bank’s circle of engagement this year…so that

our organizational voice grows stronger, and I hope you’ll consider doing the same. Numbers matter, and we need more voices telling our stories and helping people understand why what we do matters….not just to us, but to the people we serve, and to our economy as a whole.

For 125 years, the Arkansas Bankers Association has stood strongly, hand in hand with Arkansas banks through good times and bad. That’s a tribute to the staff of the ABA, both past and present, and to bankers who have served our industry over those many years, and I appreciate so much those who came before us. I am, again, incredibly humbled and honored by the opportunity to serve as your Chairman. I strongly believe in the mission of the ABA: to promote our industry, to be a liaison for government relations, and to offer educational opportunities and services to our banks. And I look forward to doing my best, in working with the executive committee, board of directors, and staff, over the coming year, in both furthering our industry, and serving our member banks. Thank you to each of you….I look forward to a great year!

ABA EMERGING LEADERS SECTION COUNCIL KEVIN THOMPSON | PRESIDENT Centennial Bank, Fayetteville

Arvest Bank, Little Rock

BLAKE FLETCHER | VICE PRESIDENT

Relyance Bank, Pine Bluff

JOHN ANDERSON | SEC./TREAS.

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 Oarks, 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

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.

June 2016 | The Arkansas Banker

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Coming Soon to a Bank Near You:

Same Day ACH

Is Your Financial Institution Ready?

Effective September 23, 2016, NACHA will begin phasing in new rules that will allow for the processing of Same-Day ACH payments. If you are currently a Receiving Depository Financial Institution (RDFI) you must be prepared to make these funds available no later than the end of the processing day.

ABOUT THE AUTHOR

Hugh Patterson provides guidance to DD&F clients in the areas of strategic technology planning, project management, vendor management, technology solution selection, implementation and utilization. As a seasoned banking operations and technology professional, he draws from his 34 years in community banking and technology vendor sales and service to ensure effective implementation of solutions to support sales growth, increase revenue and mitigate operational and compliance risk exposure.

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Under Phase One of the Same-Day ACH initiative, RDFIs are required to provide end of processing day funds availability for all Same-Day ACH credit entries received (with transaction limit of no more than $25,000 and excluding international ACH transactions (IATs)). Same-Day ACH will build upon the existing next-day ACH Network capabilities and establish a new option for same-day clearing and settlement.

Under the Rule, two new same-day settlement windows will be added to the ACH Network, increasing the number of settlements between financial institutions from once each day to three times each day.

The morning submission deadline of 10:30 am ET with settlement at 1:00pm ET will be followed by the afternoon submission deadline of 2:45 pm ET with settlement at 5:00pm ET. Same-Day ACH Entries will be identified based on the effective entry date and the time submitted to the Operator.

Files with a current day, stale date or invalid effective entry date, submitted prior to the Same-Day ACH deadline, will be considered Same-Day ACH transmissions. The new Rules also allow for Same-Day processing of returns and NOCs through the new processing windows.

Phase Two of the Same-Day ACH initiative is scheduled to go into effect on September 15, 2017 and will add debits to the expedited

The Arkansas Banker | June 2016

ACH files. Phase Three of this mandate will require that all ACH credits be made available by 5:00 pm and is scheduled to go into effect on March 16, 2018.

As a Receiving Depository Financial Institution (RDFI) what should you be doing now?

Review the requirements of the new Same-Day ACH rules; Review current operational processes and identify the changes that will be required; Contact all related vendors to ensure that they will be able to support the requirements of Same-Day ACH; Begin the process of educating consumers and corporations that receive ACH payments; and, Educate internal staff concerning the requirements of the new Same-Day ACH Rules.

As an Originating Depository Financial Institution (ODFI) what should you be doing now?

Educate internal decision makers relating to the requirements of Same-Day ACH;.

Contact ACH Originators, ACH Processors and Third Party Service Providers to make them aware of the new processing deadlines; Review and revise current processing procedures; Contact all related vendors to ensure that they will be able to support the requirements of Same-Day ACH, and, Educate internal staff concerning the requirements of the new Same-Day ACH Rules.

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!

TUESDAY, JULY 5

MONDAY, JULY 18

FRIDAY, JULY 22

Best Ever Consumer Compliance Checklists 1:30 p.m. – 3:30 p.m.

Liquidity Monitoring & Management 1:30 p.m. – 3:30 p.m.

Customer Identification Programs & Due Diligence Final Rules 1:30 p.m. – 3:30 p.m.

WEDNESDAY, JULY 6

TUESDAY, JULY 19

MONDAY, JULY 25

Federal Benefit Payments Garnishment Requirements 1:30 p.m. – 3:30 p.m.

Financial Forecasting on Long-Term Loans 10:00 a.m. – 12:00 p.m.

Government Compliance Issues: Accounts, Checks & More 1:30 p.m. – 3:30 p.m.

THURSDAY, JULY 7

Regulations D, E, CC and DD: Training for the Front Line 1:30 p.m. – 3:30 p.m.

TUESDAY, JULY 26

Entering the World of Consumer Lending – Part 1 10:00 a.m. – 12:00 p.m.

THURSDAY, JULY 12 Alert! Implementing New Customer Due Diligence Rules – Part 1 10:00 a.m. – 12:00 p.m.

Flood Insurance Revisions: Completing the Journey 1:30 p.m. – 3:30 p.m.

Call Center Representative Training 1:30 p.m. – 3:30 p.m.

WEDNESDAY, JULY 13 Email Security – Oops, You Clicked: Now What?

10:00 a.m. – 12:00 p.m.

Developing a Star Teller 1:30 p.m. – 3:30 p.m.

THURSDAY, JULY 14 Entering the World of Consumer Lending 10:00 a.m. – 12:00 p.m.

Best Ever Commercial Compliance Checklists 1:30 p.m. – 3:30 p.m.

WEDNESDAY, JULY 20 Creating a Customer Service Experience That Will Sell 10:00 a.m. – 12:00 p.m.

Best Ever Compliance Checklists for Consumer Loans 1:30 p.m. – 3:30 p.m.

Alert! Implementing New Customer Due Diligence Rules – Part 1 10:00 a.m. – 12:00 p.m.

NEW! Small Creditor Revisions, ATR & QM Requirements 1:30 p.m. – 3:30 p.m.

WEDNESDAY, JULY 27 Flood Insurance: Compliance Issues and Enforcement Topics 1:30 p.m. – 3:30 p.m.

Equipment Lease Financing 1:30 p.m. – 3:30 p.m.

How Ordinary People Become Exceptional Leaders 1:30 p.m. – 3:30 p.m.

THURSDAY, JULY 21

THURSDAY, JULY 28

Entering the World of Consumer Lending – Part 3 10:00 a.m. – 12:00 p.m.

Sales for the Frontier: Raising the Bar 10:00 a.m. – 12:00 p.m.

Compliance Perspectives: A Monthly Update 1:00 p.m. – 2:00 p.m.

Get Value from Each SSAE16 1:30 p.m. – 3:30 p.m.

Using Credit Risk Ratings to Determine Asset Quality 1:30 p.m. – 3:30 p.m.

Is Your ATM an Oversized Slot Machine?

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

June 2016 | The Arkansas Banker

9

Assessing Your Examination Process: The Good, Bad & Ugly

Bankers operate in a highly regulated environment, and regulatory examinations are a necessary ingredient for maintaining a safe and sound financial system. As we all know, though, examinations can often go awry for myriad reasons, and recent observations suggest that we are at risk of veering away from the collaborative approach to much more of a regulatory “gotcha” mentality.

As you may be aware, the Regulatory Feedback Initiative (RFI) consists of an anonymous electronic survey for bankers to provide an assessment of their most recent examination or visitation. The information is aggregated and analyzed on a national level to improve the regulatory examination process for banks through two fronts: 1. Survey results are communicated to bank regulators on a routine basis when unique examination trends are discovered and 2.

Custom bank reports are available to banks to aid them in preparing for an upcoming exam by identifying trending areas of focus or criticism.

Created by The Coalition of Bankers Associations in 2011, banks have provided feedback on over 3,000 examinations. In 2015 FinPro joined this important effort to assist with analyzing the data generated by RFI and provide suggestions for improving the survey. The Coalition’s leadership, working closely with FinPro’s advanced analytic group and staff of former senior regulators, has streamlined the survey process and improved the relevance of questions. The enhanced survey that rolled out in May 2016 has cut the number of questions by almost 50%, which is projected to reduce the average survey completion time from 27 minutes to less than 15 minutes.

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The Arkansas Banker | June 2016

While this new platform is very exciting, its usefulness is determined by banker involvement. The survey results truly make a difference, and we wanted to share with you some examples of how the RFI survey provides actionable feedback.

Below are three items that, based on the responses generated by banks in the survey, the regulatory agencies should Start, Stop, and Continue: Start: Create an appeals process that eliminates any concerns of regulatory retaliation. The Riegle Community Development and Regulatory Improvement Act of 1994 required that all regulatory agencies construct an appeals process that attempts to remedy contested filings. RFI data shows a high correlation where banks reported being “unsatisfied” or “extremely unsatisfied” with their examination to whether or not the “examination resolved issues and recommended corrective action in a fair and reasonable manner.” Bankers’ comments yearn for a healthy appeals process that is standardized across agencies and void of regulatory retaliation. From an article published in the American Banker on April 8, 2015 titled Fear of Retaliation Stifles Banks’ Appeals to Regulators, FinPro’s suggestions for improvement are simple and easy to implement. First, examination standards and findings should be the same regardless of an FDIC, OCC, or FRB examination team. Second, appeals should be reviewed and resolved by an interagency group of senior executives. Third, appeals should have all names and identifiable information redacted before submission to the interagency group. Decisions should be made based on the facts of the case.

confusing. Changes in staffing must be combined with a more clear communication of expectations from the agencies to banks.

Continue: The most bi-polar results from the current RFI survey data surround exam preparation. Overall, institutions had positive feedback pertaining to the examination staff being “knowledgeable about important issues and regulatory requirements” and “knowledgeable about your institution.” This indicates an adequate level of preparation by staff prior to the examination. However, there have been a significant number of comments pertaining to banks being given short-notice to prepare themselves for the examination. Examiners should continue to be vigilant in preparing for the examination and be just as pro-active in communicating information about the schedule and timing of the examination as early as possible In combination with providing examiners feedback, the improved survey and greater bank participation allows for better reports to aid bankers in upcoming examinations. Past comments from the survey included the desires to know such items as

Stop: Only 25% of the banks responding to the RFI agreed that “examiners applied ‘guidance’, as opposed to enforceable regulation, appropriately” during their examination. The most common divergences in expectations historically surrounded the application of Appraisal and Evaluation Guidelines (FIL-822010), but most recently disagreements regarding the Guidance for Managing Third-Party Risk (FIL-44-2008) have emerged as a trend. Not surprisingly, 51% of the bankers who disagreed with the above statement reported their examiner-in-charge had been supervising bank examinations for less than 5 years.

Augmenting the experience of examiners is only one part of the solution though. Some FILs, such as 44-2008, contain language stating the guidance “should not be considered as a set of required procedures.” However, others contain language that is more ambiguous. For example, 82-2010 states that “the Guidelines enhance the requirements for collateral valuation methods…” The mention of requirements is understandably

“that BSA and IT were growing hot topics,” “there is a new focus on detailed policies,” “the examiner was going to spend 75% of their time on interest rate risk,” “application of UDAAP specifically to their bank,” or generally “when the goal posts moved.”

We hear you, and the reports from the new survey will greatly improve your bank’s ability to stay aware of hot topics in preparation for examinations. While it is always incumbent on senior managers and directors to stay educated on current industry issues and regulations, the charts below show the areas of greatest criticism in examinations conducted over the last two years.

Bank participation is paramount to the success of the RFI. We encourage all institutions to visit http://www.allbankers.org to share anonymous information about their last examination.

This article was written by Scott Polakoff, Executive Vice President, and Stephen Brown Klinger Director, of FinPro Inc. For more information on FinPro’s strategic planning, capital planning, regulatory advisory, new director orientation, and board retreat facilitation services, contact them at 908-234-9398 or by emailing finpro@finpro.us.

Safety and Soundness Examination Exam Area

% of Institutions Receiving Criticism

Compliance Examination % of Institutions Receiving Criticism

Exam Area

Interest rate risk management approaches

24%

Real Estate Settlement Procedures Act

24%

Credit administration practices

23%

Regulation Z (Truth in Lending Act)

23%

Adversely classified asset levels

21%

Re HMDA/Regulation C

23%

Real estate appraisal and evaluation processes

20%

Flood Disaster Protection Act

18%

Business Continually Planning

17%

Regulation B (Equal Credit Opportunity Act)

16%

June 2016 | The Arkansas Banker

11

ARMED GUARDS

Weighing the Benefits Against the Liability Risks and Costs Every bank is at risk of a robbery and must determine how to address this significant and ongoing threat. Many banks utilize unarmed, uniformed guards for purposes of deterrence. They typically “observe and report” and may not be trained to act in high-risk situations.

ABOUT THE AUTHOR

Tom Pecoraro is a risk control consultant for CNA Financial Institutions customer segment, as well as management liability insurance business partners, nationwide. Prior to his insurance career, Tom was an attorney with the national law firm Epstein, Becker and Green. He graduated from Fordham University and Cardozo Law School, Yeshiva University.

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Armed guards may amplify the deterrent effect, potentially convincing criminals to leave the premises in search of an easier target. However, the presence of a firearm also may escalate a situation. Studies show that the likelihood of a violent event occurring during a bank robbery triples when an armed guard is present.1 This added risk of violence is a threat not only to the bank’s employees and customers, but also to its finances, as the bank may be held liable if anyone is injured or killed. In addition, armed guards are typically more expensive, as they require a higher level of training and may result in increased insurance costs for the bank.

In light of the risks and costs, the decision to employ armed vs. unarmed guards should not be made lightly. This article briefly examines some of the issues to consider

The Arkansas Banker | June 2016

when determining whether to hire armed or unarmed guards and also offers related risk management suggestions.

ASSESSING THE RISKS

The following factors, among others, should be taken into consideration when assessing security needs: Line of Business Certain business operations conducted within a bank branch may make it a more attractive target for robbery and/or a violent attack. For example, if the bank routinely processes large sums of cash, as opposed to paper transactions, it may be more vulnerable to criminal activity.

Location The general crime rate in the area should be examined, as well as the number of bank robberies nearby, local economic conditions, ease of highway access, level of drug usage and trafficking, and other illegal activity.

Past Incidents Take into account the number of robberies and other violent crimes, the circumstances surrounding the incidents and the effectiveness of the bank’s responses.

Practices of Neighboring Banks and Businesses If most nearby banks and other businesses employ armed security guards, failure to do so may make one’s own bank a target for criminals.

When analyzing crime risks, you may wish to consider consulting the online Bank Capture System of the American Bankers Association.2 The system, which has been adopted by many U.S. banking facilities, reports to the FBI and other law enforcement agencies. It also provides real-time information to member banks about critical security issues, such as: In what areas is crime increasing or decreasing?

What are the most frequent days and times for robberies?

What criminal methods are most commonly used (e.g., notes passed to tellers, verbal demands, and bank takeovers)?

The FBI also offers a searchable website that provides regular updates on bank robberies.

HIRING ARMED GUARDS

Without adequate background screening and training, armed guards may increase liability and cause more problems than they solve.3 For this reason, once the decision is made to use armed guards, it is necessary to establish hiring criteria that

comply with applicable state and local laws. Factors to consider include: • Desirability of police or military experience.

• Background checks, including education, criminal history and references.

• Licensing, especially in terms of firearmrelated permits.

• Training, including proper use of force.

• Any state or local law and/or regulation that may apply Armed guards are often hired through a security guard agency. It is a good business practice to confirm that the agency is licensed and bonded, which ensures some consistency with respect to training, pre-employment screening and insurance coverage. Do not risk assuming that an agency is licensed or certified, as this is not required in all states. Armed security guards who work independently may lack liability insurance, making it imperative to review the bank’s insurance coverage pertaining to guard-related incidents.

The decision to use armed guards is one that requires serious consideration and research. The information in this bulletin can serve as a starting point to assess the risks, benefits and costs associated with armed guards.

1. See Gabrielson, R. and Walter, S. “FBI Bank Robbery Data Shows Armed Guards Increase Risk of Violence.” Revealnews.org, posted December 9, 2014. https://www.revealnews.org/article/fbi-bank-robberydata-showsarmed-guards-increase-risk-of-violence/ According to the article, 64 guards were hurt for every 1,000 incidents when armed, compared with less than one injury per 1,000 incidents when they were unarmed.

2. See Ross, A. “Bank Robberies Down in Most Regions.” Bankrate.com, posted September 10, 2014. http:// www.bankrate.com/financing/banking/bank-robberies-down-in-most-regions/ 3. Duncan, B. “Five Ways the Armed Guard Industry Is out of Control.” Revealnews.org, posted May 4, 2015. https://www.revealnews.org/article/heres-whats-wrong-with-the-us-armed-security-industry/ The purpose of this article is to provide information, rather than advice or opinion. It is accurate to the best of the author’s knowledge as of the date of the article. Accordingly, this article should not be viewed as a substitute for the guidance and recommendations of a retained professional. In addition, CNA does not endorse any coverages, systems, processes or protocols addressed herein unless they are produced or created by CNA. Any references to non-CNA websites are provided solely for convenience, and CNA disclaims any responsibility with respect to such websites. To the extent this presentation contains any examples, please note that they are for illustrative purposes only and any similarity to actual individuals, entities, places or situations is unintentional and purely coincidental. In addition, any examples are not intended to establish any standards of care, to serve as legal advice appropriate for any particular factual situations, or to provide an acknowledgement that any given factual situation is covered under any CNA insurance policy. Please remember that only the relevant insurance policy can provide the actual terms, coverages, amounts, conditions and exclusions for an insured. All CNA products and services may not be available in all states and may be subject to change without notice. “CNA” is a service mark registered by CNA Financial Corporation with the United States Patent and Trademark Office. Certain CNA Financial Corporation subsidiaries use the “CNA” service mark in connection with insurance underwriting and claims activities. Copyright © 2016 CNA. All rights reserved.

June 2016 | The Arkansas Banker

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Annual Convention Celebrates 125 Years of Service to Arkansas Banks The 2016 Arkansas Bankers Association Annual Convention was held May 11-13 in downtown Little Rock.

The event culminated the Association’s 125th anniversary celebration, and built on the theme “Celebrating 125 Years of Service to the Arkansas Banking Industry.” Historical photos of ABA events, and banks from across the state were on display throughout the event, paying tribute to the organization’s rich history.

The event opened on Wednesday evening with comments from Lieutenant Governor Tim Griffin prior to the opening reception in the trade show.

For the 20th year, the ABA teamed up with the Arkansas State Bank Department to present the annual Day with the Commissioner on Thursday, featuring a line-up of regulatory speakers. Candace Franks, Commissioner of the Arkansas State Bank Department, served as host and speakers included Arkansas Governor Asa Hutchinson; Margaret Liu, Conference of State Bank Supervisors; Benjamin McMahan, Federal Reserve Bank of Kansas City; Williams R. Emmons, Federal Reserve Bank of St. Louis; and Doreen Eberley, FDIC Division of Risk Management Supervision.

Thursday afternoon began with the second annual BKD Milestones in Banking Awards, honoring industry veterans for their service to both their banks and communities. Awards were followed by the annual ABA business session and a conversation with Dan Blanton, incoming Chairman of the American Bankers Association.

The day rounded out with the CNA Chairman’s Reception and the DD&F Legacy of Leadership ABA Annual Banquet and Officer Installation, featuring the changing of the guard from outgoing Chairman Robert Taylor to incoming Chairman Sean Williams.

Friday kicked off with a delicious Strawberry Breakfast hosted by Simmons Bank, followed by a morning of speakers including political analyst Steffen Schmidt; Jim Burson, Cornerstone Advisors, and Karl Nelson, KPN Consulting.

Opening Reception (Near Right) Lieutenant Governor Tim Griffin addressed attendees on Wednesday evening just prior to the open of the annual Trade Show. He spoke to the bankers about the difference in his roles in federal and state government, and his recent activities on the local level.

(Upper Right) Country Club Bank Capital Markets Group played host to the opening reception. Pictured are Aaron Stoffer, Scott Carrithers, and Chris Morgan (Lower Right) Sun Trust Robinson Humphrey sponsored a shoe shine station throughout the opening reception. The booth brought in quite a following of bankers looking to spiff up their soles.

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The Arkansas Banker | June 2016

ABA Annual Convention Past Chairman’s Dinner The 2016 Past Chairman’s Dinner was held on Wednesday, May 10, at the Capital Hotel with 32 in attendance. This annual tradition, which began in 1921, brings together a select group of bankers who have served the association in a leadership capacity.

During this year’s dinner, the group participated in a trivia competition about the association, and had a few good laughs along the way.

(Top) Past ABA Chairmen Eddie Holt (2010) and I. Joe Miles (2008).

(Right) Past ABA Chairmen John Womack (2007) and Bill Brandon (1983).

(Far Right) Past ABA Chairmen Larry Kircher (2002) and Rob Brothers (2003).

June 2016 | The Arkansas Banker

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Annual Day with the Commissioner Arkansas State Bank Commissioner Candace Franks gave her annual state of banking address during the Day with the Commissioner on Thursday, May 12. In addition, she encouraged Arkansas banks to complete a survey to contribute their perspectives to the dialogue at the Community Banking Research and Policy Conference.

Margaret Liu, SVP and Deputy General Counsel at the Conference of State Bank Supervisors, spoke about

Governor Asa Hutchinson kicked off the Day with the Commissioner on a high note with a discussion on Arkansas Works, education, and the upcoming special session of the Arkansas Legislature. He encouraged bankers to help “create a climate that’s pro-business.”

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The Arkansas Banker | June 2016

ABA Annual Convention ABA Business Session

Outgoing ABA Chairman Robert Taylor, Citizens Bank, gave the nominating committee report.

Doreen Eberley, Director of the FDIC’s Division of Risk Management, spoke about

Benjamin McMahan, Examiner at the Federal Reserve Bank of Kansas City, gave his perspective on ag banking for the coming year, including market conditions and supervisory expectations for risk management of ag credit.

William Emmons, AVP and Economist at the Federal Reserve Bank of St. Louis, discussed emerging markets in the global economy and their impact on the U.S. economy.

(Top Left) Treasurer Judy Lawton, Heartland Bank, gave the annual Treasurer’s report.

(Top Right) Emerging Leaders Section Council President Kevin Thompson elaborated on the upcoming ABA Leadership Conference.

(Lower Left) ABA Director of Government Relations Ava F. Roberts spoke about ongoing advocacy efforts.

(Lower Right) ABA President & CEO Bill Holmes gave an update from the association.

June 2016 | The Arkansas Banker

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Conversation with AmBA Chairman Dan Blanton Arkansas bankers got an introduction to new American Bankers Association Chairman Dan Blanton on Thursday afternoon as he and Bill Holmes took the stage for a conversation on banking. The two covered a range of topics, from how Blanton got his start in banking to business models, to advocacy efforts and banking Millennials.

Blanton is the CEO of Southeastern Bank Financial Corporation and Georgia Bank & Trust in Augusta, Ga.

James Burson, Senior Director of Cornerstone Advisors, spoke to attendees about engineering revenue growth with the new bank earnings model.

Dr. Steffen Schmidt of the University of Iowa, discussed the science behind the U.S. election system.

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Karl Nelson, Founder and CEO of KPN Consulting talked to the group about ERM and the role Directors play.

The Arkansas Banker | June 2016

ABA Annual Convention CNA Chairman’s Reception & DD&F Legacy of Leadership ABA Annual Banquet and Officer Installation Thursday evening’s events included the annual CNA Chairman’s Reception and the DD&F Legacy of Leadership ABA Annual Banquet and Officer Installation.

DD&F was accompanied by a special guest for the evening...Colonel Logan Roots (portrayed by actor James Maynard), the first chairman of the ABA surprised guests by hob-nobbing throughout the reception and delivering a monologue at the beginning of the dinner. Col. Roots spoke about banking during his time (1891), and applauded the changes and improvements that Arkansas bankers had made through the years.

Dinner was followed by the installation of a new slate of officers: Chairman Sean Williams, First National Bank of Wynne; Chairman-Elect Dave Dickson, Union Bank & Trust, Monticello; Vice Chairman Cathy Owen, Eagle Bank, Little Rock; and Treasurer Judy Lawton, Heartland Bank, Little Rock.

Outgoing Chairman Robert Taylor welcomes Incoming Chairman Sean Williams during the Officer Installation ceremony.

Incoming Chairman Sean Williams and his family at the Officer Installation Banquet.

Also taking place at that time was the ABA Silent Auction, which raised funds for the ABA State Political Action Committee to support pro-banking candidates for elected state offices.

Colonel Logan Roots as portrayed by actor James Maynard (center) with Bob Fegtly and Randy Dennis of DD&F Consulting Group.

June 2016 | The Arkansas Banker

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Spouse Event: Touring Marlsgate Plantation The 2016 Annual Convention Spouse and Guest Event took place at the historic Marlsgate Plantation on Thursday, May 12, 2016.

Marlagate is a stately columned Greek Revival Mansion shaded by ancient oaks and a pecan grove overlooking the waters of Bearskin Lake.

Majestically rising amid acres of rice, cotton and soybeans, Marlsgate is a reflection of the opulent plantation era when cotton grew tall and there was a privileged class of wealth in the Arkansas Delta. The mansion was constructed with 32 rooms and contains 11,000 square feet of living space.

The guests were treated to a detailed tour of the home, led by the homeowner himself, the very candid and entertaining Mr. David Garner. After the tour concluded, Mr. Garner and the plantation home’s private chef prepared a delicious, true southern, “noon-day dinner” luncheon for our spouses.

The event was rounded out with door prizes, won

by Beverly Adams, Patty Clark, and Rebel Wilson.

Pictured touring the Marlsgate Plantation are, in front, Holly Ruddell, Patty Clark, Sheila Harrell, Susanne Gentry, Leslie Williams, plantation owner David Garner; in back, Beverly Adams, Rebel Wilson, Rita Holmes, Judy Taylor, and Cynthia Blanchard.

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The Arkansas Banker | June 2016

ABA Annual Convention Thank You to our Sponsors American Bankers Association Mobile App Banner Ad

BKD, LLP

Milestones in Banking Awards

Representing Simmons Bank at the annual Strawberry Breakfast were, from left, Pat Burrow, Tabitha Doddridge, Chris White, Marty Casteel, Pat Anderson, Freddie Black, Barry Ledbetter, George Makris, Rasalind Mouser, Bob Fehlman, Matt Reddin, Rex Nelson, Steve Massanelli, and Adam Mitchell.

58th Annual Simmons Strawberry Breakfast Simmons Bank hosted a longstanding Convention tradition again this year with the Friday morning Simmons Strawberry Breakfast.

This event, which began in 1957, gives bankers the opportunity to catch up with old friends and colleagues over fresh seasonal Arkansas strawberries.

Tables were decorated with photos of the event throughout the years and, of course, strawberries.

Blackmon Auctions Tote Bags

Card Assets

Mobile App Banner Ad

Celerit

Lanyards

CNA Insurance

CNA Chairman’s Reception

Country Club Bank Capital Markets Group Opening Reception

DD&F Consulting Group

Legacy of Leadership Annual Banquet & Officer Installation Mobile App Banner Ad

Equias Alliance

Hotel Keycards Mobile App Banner Ad

Federal Home Loan Bank of Dallas Thursday Meet & Greet Breakfast

FPS Gold

Mobile App Banner Ad

S.F. Fiser & Company (Above) Matt Reddin, Freddie Black, and Chris White.

(Right) Table decor featured photos of past Strawberry Breakfasts.

Thursday Networking Break

Secure Banking Solutions Mobile App

Simmons Bank

Simmons Strawberry Breakfast

SunTrust Robinson Humphrey Shoe Shine Station

Talk Business & Politics

Registration Refreshments

June 2016 | The Arkansas Banker

21

Faces of the Arkansas Bankers Association Phil Baldwin Batesville

Jon Harrell Rogers Scott Hancock Fayetteville Don Gibson Springdale

David Dowd Wynne Past Chairman Robert Taylor Rogers

Jim Taylor Fayetteville

Chairman Sean Williams Wynne

Wilson Moore Little Rock President & CEO Bill Holmes Little Rock

Treasurer Judy Lawton Little Rock

Vice Chairman Cathy Owen Little Rock

Lynn Wright Little Rock Jim Cargill Little Rock

Darwin Hendrix Prescott

Pat Anderson Pine Bluff J. Michael Jones Dumas Troy Duke Rison

Chairman-Elect Dave Dickson Monticello

Chris Gosnell Magnolia Craig Mobley El Dorado

Executive Committee Member

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The Arkansas Banker | June 2016

Board Member Since 2014 and Prior

Board Member Since 2015

Gene Crawford Crossett

Board Member Since 2016

2016-17 Board of Directors Group 1 David Dowd

Randy Scott

Board Member Since 2016

Board Member Since 2014

President & CEO Cross County Bank, Wynne

Jerry Morgan Jonesboro Randy Scott Blytheville

President & COO Farmers Bank & Trust Co., Blytheville

Jerry Morgan

Community President Focus Bank, Jonesboro Board Member Since 2015

Phil Baldwin

Group 2

President & CEO Citizens Bank, Batesville

Wilson Moore

Regional President Bank of America, Little Rock

Board Member Since 2015

Board Member Since 2013

Jim Cargill

Lynn Wright

Board Member Since 2016

Board Member Since 2016

President Arvest Bank, Little Rock

Don Gibson

President - Arkansas Area Regions Bank, Little Rock

Group 3

President & CEO Legacy National Bank, Springdale

Jon Harrell

Chairman of the Board Generations Bank, Rogers

Board Member Since 2016

Board Member Since 2014

Scott Hancock

Jim Taylor

Board Member Since 2015

Board Member Since 2012

Division President, NWA Centennial Bank, Fayetteville

Chris Gosnell

Senior Vice President First Security Bancorp, Fayetteville

Group 4

Chief Banking Officer Farmers Bank & Trust Co., Magnolia Board Member Since 2016

Craig Mobley

Executive Vice President First Financial Bank, El Dorado Board Member Since 2014

Darwin Hendrix

CEO Bank of Delight, Prescott Board Member Since 2015

Pat Anderson

Group 5

Community President Simmons Bank, Pine Bluff

Troy Duke

President & CEO Gateway Bank, Rison

Board Member Since 2016

Board Member Since 2015

Gene Crawford

J. Michael Jones

Board Member Since 2016

Board Member Since 2014

President & CEO First National Bank of Crossett, Crossett

President & CEO Merchants & Farmers Bank, Dumas

June 2016 | The Arkansas Banker

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Faces of the Arkansas Bankers Association 2016-17 Executive Committee Chairman

Sean Williams President & CEO First National Bank of Wynne Wynne

Chairman-Elect

Dave Dickson President & CEO Union Bank & Trust Company Monticello

Vice Chairman

Cathy Owen Chairman Eagle Bank & Trust Little Rock

Treasurer

Sean Williams Installed as Chairman Mr. Sean Williams was installed as the 2016-17 Chairman of the Arkansas Bankers Association at the 126th Annual ABA Convention on Thursday, May 12, 2016 at the Little Rock Marriott and Statehouse Convention Center in Little Rock, Arkansas.

Sean Williams is President and CEO of First National Bank in Wynne. He is also a member of First National Bank of Wynne’s Board of Directors.

Williams is a lifelong resident of Woodruff County and received his Bachelors and Masters degrees in agricultural business and economics from Arkansas State University. He is also a graduate of the Graduate School of Banking at Louisiana State University.

Williams was appointed by Governor Mike Beebe to a second four-year term on the Arkansas Fair Housing Commission, where he currently serves as Chairman.

Judy Lawton President & COO Heartland Bank Little Rock

In addition to service on his ABA Chairman Sean Williams and his wife Leslie. company’s boards, he is a member of the Wynne Rotary Club, the McCrory Lion’s Club, and serves as President of the McCrory School District Board of Education, where he is serving in his ninth year. Williams is a member of the First Baptist Church in McCrory, where he serves as a deacon, and is actively involved in various youth programs within the community.

Past Chairman

Sean and his wife Leslie are the parents of two daughters, Kendal and Kelby.

Robert Taylor Chief Credit Officer Citizens Bank Rogers

President & CEO

Bill Holmes Arkansas Bankers Association Little Rock

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The Arkansas Banker | June 2016

Chairman-Elect Dave Dickson

Dave Dickson is President & CEO of Union Bank & Trust Company in Monticello. He is also a member of Union Bank’s and First Union Financial Corporation’s Board of Directors.

Dickson is a native of Crystal Springs, Mississippi. He holds a bachelor’s degree in Banking and Finance from Mississippi State University and is also a graduate of the Mississippi School of Banking at the University of Mississippi and the Graduate School of Banking at Louisiana State University in Baton Rouge, Louisiana.

Dickson has been a member of the Board of Directors of the Arkansas Bankers Association for the past five years; he is also a member of the American Bankers Association’s Membership Committee.

ABA Chairman-Elect Dave Dickson and his wife Memorie.

Vice Chairman Cathy Owen

Cathy Owen is the Chairman of Eagle Bank & Trust, and the Chairman, President and CEO of State Holding Company in Little Rock. She is also the Managing Partner of One Financial Centre, Partner in H&M Realty & Hastings Holdings, and President of Your Global Source Partner.

Owen holds a BSBA degree in Finance & Banking from the University of Arkansas at Fayetteville. She is also a graduate of the Southwest Graduate School of Banking at Southern Methodist University, and has been an active member of the Board of Directors of the Arkansas Bankers Association.

ABA Vice Chairman Cathy Owen and her husband Steve.

Owen serves on the Baptist Hospital Foundation Board, the North Little Rock Chamber of Commerce Executive Committee and Board, the Arkansas Inland Maritime Museum Board, and the Save the USS Hoga Committee.

Treasurer Judy Lawton

Judy Lawton is the President and Chief Operations Officer of Heartland Bank in Little Rock. She is also the President and CEO of Rock Service Company, LLC, a subsidiary of Rock Bancshares, Inc., a company which provides management consulting and advice in the areas of Accounting, Asset Liability Management, Information Technology, and Compliance.

Lawton’s banking career spans 30+ years, having held executive positions at banks across Arkansas. In 2004, Lawton joined Heartland Bank, where she has played key roles in the acquisition of the bank, the changing of the charter from a Savings and Thrift to a State Chartered Bank, and the bank’s growth from an asset size of $80 million to $240 million.

ABA Treasurer Judy Lawton with Dr. Nathan Austin.

Past Chairman Robert Taylor

Robert Taylor currently serves as Executive Credit Officer for The Citizens Bank in Batesville.

Bob is a native of Dardanelle and received his bachelor’s degree from Arkansas Tech University at Russellville in 1969. He is also a graduate of the National Commercial Lending School at the University of Oklahoma and the Graduate School of Banking at Louisiana State University.

He currently serves as Chairman of the Tri-County Regional Water Board serving Pope, Logan, and Yell counties; and on the Arkansas Tech University Foundation Board. He is also active in the First United Methodist Church of Russellville.

ABA Past Chairman Robert Taylor and his wife Judy.

June 2016 | The Arkansas Banker

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Arkansas Bankers Celebrate Milestones

Thirty bankers from across the state were recognized at the 2016 ABA Annual Convention for having reached “Milestones in Banking” — achieving 50 and 40 years of service to their communities and the banking industry.

The Milestones in Banking Awards were sponsored by BKD, LLP; Gary Edwards, Partner, and Michael Neathery, Managing Director, presented the awards following a luncheon on May 12.

Five banks were also recognized at the event, commemorating their 25th, 50th, 100th, and 125th anniversaries.

Flora Sisemore, Arkansas County Bank, DeWitt, celebrated 55 years in banking.

ARKANSAS COUNTY BANK, DEWITT

Flora Sisemore, Senior Vice President

BANK OF LITTLE ROCK

Pete Maris, Chairman & CEO

Troy Henley, First Community Bank, Batesville, celebrated 54 years in banking.

FARMERS BANK, GREENWOOD

Elizabeth Wilkinson, Chairman

FIRST COMMUNITY BANK, BATESVILLE Troy Henley, SVP of Operations & Security Manager & Cashier

SOUTHERN BANCORP, BLYTHEVILLE Joan Jones, Branch Manager

Joan Jones, Southern Bancorp, Blytheville, celebrated 50 years in banking.

Since I began working at the bank in 1961, I have worked under five Chief Executive Officers and have received promotions from Assistant Cashier to Senior Vice President.

Right now, I have no plans to retire. The Bank is 104 years old, and I have been fortunate to have been a part of it for 55 of those years. ~ Flora Sisemore, Arkansas County Bank

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The Arkansas Banker | June 2016

Milestones in Banking

Virginia Annette Pate, Bancorp South, Magnolia, celebrated 44 years in banking.

BANCORP SOUTH, MAGNOLIA

Sherry London, SVP

Virginia Annette Pate, First Vice President

EAGLE BANK, LITTLE ROCK

Tommy Ramer, EVP/Credit

Cathy Owen, Chairman

Administrator

FARMERS BANK, GREENWOOD

FIRST NATIONAL BANK OF WYNNE

Tresa Lowe, SVP

FIDELITY NATIONAL BANK, WEST MEMPHIS Cathy Owen, Eagle Bank, Little Rock, celebrated 42 years in banking.

Katie Johnson, AVP/ Bookkeeping

Marlene Keenan, EVP/CFO

Anita Callahan, Receptionist

Shelby Mitchell, SVP/ Financial Services Manager Carolyn Rushing, AVP, Note Department Supervisor

FIRST STATE BANK OF DEQUEEN Mary Broyles, Teller

Barbara Kitchens, COO & Human Resources Officer Tommy Ramer, Fidelity National Bank, West Memphis celebrated 45 years in banking. Other Fidelity National Bank employees recognized were Katie Johnson, Marlene Keenan, and Sherry London.

Shelby Mitchell, Anita Callahan, and Carolyn Rushing, First National Bank of Wynne, each celebrated 40 years in banking.

I love being a loan officer because you can help people, work with them. I like the people contact. ~ Virginia Annette Pate, Bancorp South

Mary Broyles, First State Bank of DeQueen, celebrated 44 years in banking. Also recognized from First State Bank of DeQueen was Barbara Kitchens.

June 2016 | The Arkansas Banker

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FIRST STATE BANK OF WARREN

Janet Morehead, Blytheville, VP

Freddie Mobley, President & COO

MERCHANTS & FARMERS BANK, DUMAS Julia Ward Speegle, VP/ Systems Administration

Don Tacket, Malvern, Market President

Bruce Timmons, Eudora, Market President

SIMMONS BANK, PINE BLUFF

UNION BANK & TRUST, MONTICELLO

Al Lowery, VP/Commercial Loans David W. Rushing, SVP/Operations Director

SOUTHERN BANCORP

Hayward “Andy” Farish, West Helena, SVP Connie Hatch, Blytheville, Loan Assistant Judy Hogan, Trumann, Teller Supervisor Beth Marshall, Arkadelphia, VP/Accounting Manager/ Cashier

Freddie Mobley, First State Bank of Warren, celebrated 42 years in banking.

Zach McClendon, Chairman Emeritus

UNITED BANK, ROGERS Judy Bell, VP, Senior Underwriter/ Secondary Market Operations Manager

Banking is the only industry I have ever worked in.

My mother and step-mom both worked at Elk Horn Bank. I became a banker while in college, and can’t think of anything else that I would rather do. Now my daughter-in-law is a banker at Southern Bancorp and works as a Commercial Loan Assistant. My new 10-month-old grandson, Logan has a bib that says ‘4th Generation Southern Employee’ ...who knows!

Julia Ward Speegle, Merchants & Farmers Bank, Dumas, celebrated 40 years in banking.

David Rushing and Al Lowery, Simmons Bank, Pine Bluff, celebrated 40+ years in banking.

~ Beth Marshall, Southern Bancorp Beth Marshall, Hayward Farish, Connie Hatch, and Janet Morehead, all of Southern Bancorp, celebrated 40+ years in banking. Other Southern Bancorp employees recognized were Judy Hogan, Don Tacket, and Bruce Timmons.

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The Arkansas Banker | June 2016

Milestones in Banking Milestone Banks Recognized CROSS COUNTY BANK

Celebrating 125 Years

Wynne

The roots of Cross County Bank began back in 1891 in Wynne, Arkansas. A group of the area’s most influential businessmen gathered together daily at the old Commercial Hotel to discuss the day’s events. It was here that these men, sitting together in a small room filled with cigar and cigarette smoke, discussed the need for a bank in their small town.

It was under the leadership of Issac Block, a planter who owned a large amount of valuable land just outside Wynne, that this discussion amongst businessmen was transformed into an actionable plan to create a bank. He persuaded 31 individuals to David Dowd accepts the Milestone Bank award on behalf of Cross commit to investing $30,000, and made an application to the State County Bank. of Arkansas to charter Cross County Bank. The application was promptly approved and the charter was granted on June 5, 1891. This was only the second bank to be established in eastern Arkansas.

After receiving their charter, the men purchased some land and began construction of what would become the first Cross County Bank. The $5,042.63 price tag of the original bank building, located at the corner of Front and Union, was expensive for 1891. It was a tremendous investment, especially considering that the bank only profited $156.57 in its first year of business. It was not long before the need for a bank in that area became clearly evident. In its second year, Cross County Bank went from under $200 profit to $52,666!

Today the bank continues steady growth, under the leadership of Chairman Dr. Willard G. Burks and President/CEO David Dowd. It operates two offices in Wynne, and branches in Hickory Ridge, Cherry Valley, and operates as First Commercial Bank in Jonesboro, Brinkley, Manila, Osceola, and Blythevelle.

FIRST NATIONAL BANK OF PARIS

Celebrating 125 Years

Paris

Like the Arkansas Bankers Association, this year also marks the 125th Anniversary for First National Bank at Paris. Established as The Bank of Paris in 1891 by a group of local businessmen who had a deep commitment to Logan County, the bank began with a rich history in the coal-mining era of Logan County with J.B. Cox as its first president. The bank became a National Bank in 1920 and was reorganized in 1934 as the First National Bank at Paris.

In 1964, the bank moved into its current location in Michael Meyers accepts the Milestone Bank award on behalf of Paris, just off the First National Bank of Paris. downtown square, and within the shadow of the highest peak in Arkansas, Mount Magazine.

Today the bank is lead by Jarrod Yarnell, President and Chief Executive Officer, and has branches in Paris and Caulksville, and as Community National Bank in Booneville and Waldron. With assets of $131 million, the bank continues to put community and people first by meeting the credit needs of Logan and Scott Counties and providing tech-savvy solutions to its employees and customers.

June 2016 | The Arkansas Banker

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RIVERSIDE BANK Sparkman Celebrating 100 Years Riverside Bank, formerly known as Merchants & Planters Bank, was chartered in Sparkman, Dallas County, Arkansas in 1916.

The bank officers in 1917 were John Stuart, John Taylor, John and George Delaughter, and John M Key. The bank was often referred to as the “John Bank.” The bank had total assets of $64,000 in 1918, $4.4M by 1970, and to $60M by 2016.

The owners and officers of the bank for many decades included some members of the most prominent family names in Sparkman, including Sturgis, Gaston, Hayes, Stephen Davis and Robert Dudley accept the Milestone Bank Stuart, Delaughter, award on behalf of Riverside Bank.

White, Taylor, and Carson. In 1967, a majority interest of the Bank ownership was purchased by Mr. Bill Ford, formerly the Commissioner of the Arkansas State Bank Department.

In 1985, a group of Little Rock investors purchased the Bank from T.Q. “Kit” Carson, and renamed it Riverside Bank as it branched out to downtown Little Rock adjacent to the Arkansas River. The remaining members of that group, Stephen C. Davis and David T. Matchet, currently own the bank through their holding company, Riverside Bancshares, Inc.

FIDELITY NATIONAL BANK

Celebrating 50 Years

West Memphis

Founded in West Memphis in 1966, Fidelity National Bank is now celebrating 50 years as a locally owned and operated bank, serving primarily Crittenden and St. Francis Counties. A branch and main office are in West Memphis, there are two offices in Marion, and one in Hughes.

In 50 years, Fidelity National Bank has never changed its name, but the bank’s real growth began with the 1988 acquisition by the Carlson family.

Beginning with $38 million in assets, the bank has seen Ralph Carlson, William Carlson, Charles Horton, and Mike Carlson accept the Milestone Bank award on behalf of Fidelity National almost a 1,000 Bank. percent increase since the Carlsons took over. Fidelity now has 70 staff members with a fifth of them having been at the bank over 20 years, and half of the staff being there for 10 years or more. In addition to staff longevity, the senior directors have been ,with Fidelity since the Carlsons took over 23 years ago. All these experienced people make for a very successful team, and a profitable bank.

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The Arkansas Banker | June 2016

Milestones in Banking TODAY’S BANK Fayetteville Celebrating 25 Years Today’s Bank has been proudly serving the community banking needs of Northwest Arkansas for almost 25 years. The bank was founded as a state-chartered bank in 1991 by local community leaders including Sam Mathias, who is now sole owner. The origins of this community bank began when a single 1,738 square foot building, along with deposits and assets of the Huntsville Branch of First Savings of Arkansas, was purchased from the Resolution Trust Corporation. The bank opened its door on July 29, 1991, with five employees, assets of $10,704,000 and was known as First State Bank.

Larry Olson accepts the Milestone Bank award on behalf of Today, there are 43 Today’s Bank. employees and approximately $110,507,000 in assets. The bank’s name has also transitioned to First State Bank of Northwest Arkansas, and most recently to Today’s Bank.

Today’s Bank currently operates five branch offices in Huntsville, Fayetteville, and Springdale. President and CEO Larry Olson stated a motto used to describe Today’s Bank is, “Large enough to serve you, but small enough to know your name.”

June 2016 | The Arkansas Banker

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! n i t s e D n i u o Y See

79th Annual Arkansas Bankers Association

Bank Management Seminar August 3-5, 2016 | Destin, Florida

This year’s Bank Management Seminar will be held August 3-5 in a special destination location, Destin, Florida.

This annual event offers many opportunities for you to participate in networking and educational sessions, including an opening reception, the BMS Golf Classic, nationally known keynote presenters, and more!

Featured Speakers

Rob Nichols

President & CEO American Bankers Association

Dr. Kevin Streff

Founder & Managing Partner Secure Banking Solutions

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Cullen Speckhart

Co-Chair, Business Bankruptcy & Restructuring Wolcott Rivers Gates

Robert B. Tucker

President & Founder The Innovation Resource

The Arkansas Banker | June 2016

BMS Golf Classic

Thursday, August 4, 2016 at 1:00 p.m.

Raven Golf Course $135 Join in a Four Man Scramble at Raven Golf Course.

• Lunch will be served at the course at 12:00 p.m.

• Tee time is 1:00 p.m.

• All golfers must be registered for the Bank Management Seminar.

• Registration includes range balls, greens fee, golf cart, and lunch.

• Teams will be selected by the Golf Committee.

• Buy your mulligans at the golf course, two for $30! All proceeds benefit the ABA Political Action Committees.

Mulligans will be available for purchase prior to tee-off.

Hotel Accommodations Due to the busy travel season, please make your reservations at the Hilton Sandestin Beach Golf Resort & Spa as soon as possible.

Phone: 1.850.367.1271 Group Name: Arkansas Bankers Association Group Code: ARB Room Block Ends July 6, 2016

2016 Agenda

#BMS2016

WEDNESDAY, AUGUST 3, 2016

FRIDAY, AUGUST 5, 2016

3:00 p.m. – 6:00 p.m.

Registration Open

8:00 a.m. – 9:00 a.m.

Breakfast

4:30 p.m. – 5:30 p.m.

ABA Board of Directors Meeting

9:00 a.m. – 11:30 a.m.

Business Session

6:00 p.m. – 8:00 p.m.

Opening Reception First National Bankers Bank & Southern Pioneer Insurance Company

THURSDAY, AUGUST 4, 2016 7:30 a.m. – 9:30 a.m.

Registration Open

7:30 a.m. – 8:30 a.m.

CNA Breakfast

8:30 a.m. – 11:00 a.m.

Business Session

ABA Chairman’s Welcome & Remarks Sean Williams, President & CEO, The First National Bank of Wynne Welcome & Association Update Bill Holmes, President & CEO, Arkansas Bankers Association 2016 Banking Industry Issues & Opportunities Rob Nichols, President & CEO, American Bankers Association

AmBA President and CEO Rob Nichols will review the most critical challenges and opportunities facing banks, from dramatic demographic shifts to changes in the way business is done in Washington.

Mitigating the Risk of Ransomware through an Information Security Program Dr. Kevin Streff, Founder, Secure Banking Solutions

During this session, Dr. Streff will provide real world cybercrime cases and discuss how your bank can mitigate the risk and develop a strategy to be proactive in creating a plan for when your bank is attacked.

ABA Chairman’s Closing Remarks Sean Williams, President & CEO, The First National Bank of Wynne 1:00 p.m.

Annual BMS Golf Classic

ABA Chairman-Elect’s Welcome & Remarks Dave Dickson, President & CEO, Union Bank & Trust, Monticello Leading Ahead of the Curve Robert Tucker, President, The Innovation Resource Consulting Group All too often, we are too busy running today’s business to capitalize upon the emerging technological, demographic and social trends, and use them as accelerators of revenue growth, profit and competitive advantage. This powerpacked keynote, by global innovation speaker and futurist Robert B. Tucker, explores the themes in his bestselling book, Managing the Future: 10 Driving Forces of Change.

Bitcoin, Blockchain, and Bankers Cullen Speckhart, Co-Chair, Business Bankruptcy and Restructuring, Wolcott, Rivers, Gates This informative session will explore the basics of digital currencies. It will also cover blockchain technology (a distributed database that maintains a continuously-growing list of data records hardened against tampering and revision) and its effect on the banking world today.

ABA Chairman-Elect’s Closing Remarks Grand Prize Giveaways (Must be present to win) Fly Away for Two Razorback Tickets (drawings held throughout the seminar)

Click here for details on the 2016 Bank Management Seminar!

June 2016 | The Arkansas Banker

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Bank Management Seminar Feature Five Strategies

for Spotting Trends

ABOUT THE AUTHOR

President and founder of The Innovation Resource, Robert Tucker is an internationally recognized pioneer in the field of innovation. Tucker is a frequent contributor to publications such as The Futurist, Strategy & Leadership, BusinessWeek, Los Angeles Times and many others.

A multi-year winner of the Top Five Speaker hall of fame, Tucker was recently awarded the prestigious Brand Personality Award, by the Asia Pacific Brands Foundation for outstanding contributions to the field of innovation.

Hear more from Robert Tucker at the 2016 Bank Management Seminar!

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First

Economists, the late Paul Samuelson once quipped, predicted nine out of the last five recessions. Yet they failed to warn about the big one: the Crash of 2008. Unbowed, they keep at it. Last year, they predicted interest rates would go up. They went down instead.

They predicted oil prices would rebound: they sunk to below $35 a barrel instead.

And what about those media prognosticators, how well did they do?

U Penn researchers checked up on the predictions of pundits like CNBC’s Jim Cramer, New York Times’ columnist Thomas Friedman, Wall Street Journal columnist Peggy Noonan and many others and concluded they had the accuracy of “dart throwing chimpanzees.” And don’t get me started on futurists who boast about trends they accurately predicted but fail to mention the many they missed.

Although prediction algorithms might be about to change the forecasting game (see below), for now at least, prediction is still more art than science. For leaders, the need to make prediction-based decisions has never been greater. Missing market shifts and misreading important trends can be career-limiting. Blackberry’s co-CEOs misread the iPhone, dismissing it as a niche product. Kodak invented the digital camera

The Arkansas Banker | June 2016

but stood by as it unraveled the company’s business model. Radio Shack ignored consumer trends that rendered it irrelevant.

Some cable companies dismiss the “cordcutting” trend that is beginning to roil their industry.

As a futurist and innovation coach, I don’t try to predict trends so much as to alert my clients to changes that could spell opportunity, if action is taken. I’m convinced we all need to become better trend-watchers to avoid being blindsided. Communications technologies make it easy than ever to connect to the wider world, yet tempting to drown in information overload. It’s easy to misread the signals of change because there are simply so many of them.

Here’s the good news: with a bit of focused attention, you can build skills in this area such that they become a strength rather than a vulnerability. Not only will it lead to better responsive moves, but at times, your improved capability will enable and empower you to pounce on emerging opportunities. Here are five strategies to guide you in this important arena: 1. Audit your information diet. Start by doing a simple assessment of the various information sources – periodicals, books, reports, newspapers,

email newsletters, etc. that you’re accessing. Think of this as your “information diet.” Just as when we diet, we carefully monitor our caloric intake, become more aware of your “information intake.” For the next week, monitor how much time are you spending on trivial items like Donald Trump’s latest outburst, versus how much you’re taking in that’s substantive, deeply researched and well written. Ask other leaders in your network what they’re reading, and share articles of interest. Suggestion: Make it a point to subscribe to publications rather than only grazing the web. Let them build up– the important analysis and survey results that keep you abreast.

2. Develop new antenna. It’s been said that “leaders are readers” and I’m continually amazed at how well informed the innovative leaders I meet each year are on a broad range of topics. I first noticed this trait when interviewing 50 leading innovators back in the mid-80s. I’d go out to interview them and they’d start interviewing me! They are, as I noted in Winning the Innovation Game, like vacuum cleaners sucking in the latest trends. They avail themselves to opposing points of view and alternate perspectives. They ingest a wide-ranging number of surveys and reports. But they also get out there to see for themselves, to experience, to press the flesh. They travel extensively and actively question customers, suppliers, industry luminaries, and experts. They are alert to change at all times and notice small details that might easily be overlooked.

Suggestion: Do more aggressive “front line observational” research, and ask questions wherever you go.

3. Use social media as an early warning system. The field of prediction is ripe for reinvention, and that’s exactly what’s going on these days behind the scenes.

According to the Wall Street Journal, predicting the future is about to become “embarrassingly easy,” as prediction algorithms– the fruits of the big data revolution– become

so widespread that conventional forecasting methods come off as oh so 20th century. Dataminr is a six year old startup that applies advanced analytics to the entire Twitter “fire hose” to detect events likely to move the market. Already, 75 financial clients, including big investment banks and hedge funds, are subscribers. More and more companies are paying attention to Twitter, and to potential wisdom of the crowd forecasting techniques that are possible from this data set. “It’s pretty hard to come up with industries that would be happy knowing later, less and not everything,” said Ted Bailey, Dataminr’s CEO. According to Fortune, Dataminr revealed preliminary reports of Volkswagen’s emissions scandal three days before its stock price plummeted 30 percent.

The Twitterverse erupted 45 minutes before the Associated Press tweeted about the Paris attacks. Question: how can you and your organization tap social media as an adjunct to your early warning system?

4. Recalibrate your forecasting skills. University of Pennsylvania professor Philip Tetlock wants to know what makes some people better than others at seeing into the future. With funding from DARPA, Tetlock and his team have been hosting forecasting tournaments in order to identify what separates good forecasters from the rest. In these competitions, thousands of everyman prognosticators volunteer to answer roughly 500 questions on various national security topics, from the probably movement of Syrian refugees to the near term stability or instability of the Eurozone. In his book Superforecasting: The Art and Science of Prediction, co-authored

by Peter Scoblic, Tetlock reports that the tournaments identified a small group of people who generated forecasts that, when averaged, beat the crowd by well over 50 percent in each of the tournament’s four years.

How did they do it and whence are their powers? Turns out these adept

forecasters buried among us are: philosophically cautious and humble, comfortable with numbers but not always math whizzes; pragmatic and capable of considering diverse points of view, and open minded. They are intellectually curious and enjoy puzzles and mental challenges. Key takeaways: if people feel they will be held accountable for their views they tend to avoid cognitive pitfalls such as overconfidence and a common failure to update beliefs in response to new evidence. Lesson: with effort, we can all improve our forecasting abilities. Tetlock’s research suggests basing forecasts on facts and logic, and being alert to personal bias and guessing. His research stresses the need to think in terms of probabilities and recognize that everything is uncertain except history.

5. Take action on trends. Although Blackberry’s co-CEOs watched Apple announce the iPhone in 2007, they dismissed it as a niche product. They didn’t consider it again for another six months, losing valuable time.

Even a cursory look at disrupted companies shows that their leaders were vaguely aware of the threat to their business model. They waited too long, then mounted halfhearted responses to the threat. It’s natural human tendency to want to delay action till others have gone ahead and paved the way. But the advantage that comes to those that spot trends early is that we take early action. We alter our processes, we change our business model. We diversify. We enter new markets, whether adjacent or in new territories.

If you’re an executive or manager, it’s easy to want to delegate trend-watching. It’s easy to think we have more time than we do to mount a response. In response to an ever-increasing degree of technological, social and economic change, I invite you to redouble your trend-watching capabilities and prepare for the VUCA world (volatility, uncertainty, complexity and ambiguity). In 2016, it’s going to be vital to pay attention to how we pay attention.

June 2016 | The Arkansas Banker

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

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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 | June 2016

MEMBER NEWS ARKANSAS BANK DEPARTMENT

APPLICATIONS & APPROVALS

Branch Bank Application

An application filed by Merchants & Planters Bank, Newport, Jackson County, Arkansas, to establish a branch banking facility at 3801 Harrison Street, Batesville, Independence County, Arkansas, has been approved.

April 27, 2016.

An application filed by Stone Bank, Mountain View, Stone County, Arkansas, to establish a branch banking facility at 900 South Shackleford, Suite 210, Little Rock, Pulaski County, Arkansas, has been approved. May 11, 2016.

An application filed by the Farmers Bank and Trust Company, Blytheville, Mississippi County, Arkansas, to establish a branch banking facility at 22 Park Street, Wilson, Mississippi County, Arkansas, has been approved.

May 31, 2016.

An application filed by The Citizens Bank, Batesville, Independence County, Arkansas, to establish a branch banking facility at 2710 Pine Street, Arkadelphia, Clark County, Arkansas, has been approved. June 6, 2016.

FNBC Bank Receives Community Development Financial Institution Designation FNBC Bank has received designation as a Community Development Financial Institution (CDFI), according to CEO and President Marty Sellars. FNBC Bank is one of only three CDFIs in Arkansas.

“We are pleased to have received designation as a CDFI,” said Sellars. “We have served our communities well for over 100 years, and truly believe that we will now be able to take even greater care of our clients in the years to come.

We now have a unique opportunity to receive grants that will better equip our institution to fund more loans that help grow and improve the place we love to call home.”

CDFIs are certified through a rigorous process by the CDFI Fund, part of the U.S. Department of Treasury, which indicates that the bank has devoted at least 60 percent of its total lending, services and other activities to benefit low income communities.

According to the Community Development Bankers Association, CDFIs are mission-driven, privatesector financial institutions dedicated to community development, and provide a wide range of products and services targeted to economically distressed communities. Products and services include mortgage financing for lowincome and first time homebuyers, flexible underwriting for nonprofit organizations, and commercial loans to expanding businesses in low-income areas.

This designation allows FNBC Bank to be eligible for grant opportunities to ensure fair access to financial resources for underserved people and communities. There are over 1,000 CDFIs throughout the United States providing credit, capital and financial services to economically distressed communities that may otherwise be unavailable through mainstream financial institutions.

St. Louis Fed Launches Data Visualization Tool The Federal Reserve Bank of St. Louis has released a new data visualization tool that tracks Arkansas and U.S. banking performance measures.

The interactive charting feature can be found in the Banking Supervision and Regulation section of the St. Louis Fed’s website and complements the department’s periodic Banking Insights publication.

Users can select asset size, geography, performance category and performance ratio combinations to generate charts that visually depict the performance of commercial banks and thrifts headquartered in the Little Rock Metropolitan Statistical Area (MSA) and the state of Arkansas, as well as the six other states that comprise the St. Louis

Fed’s Eighth District: Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee.

Community bank performance can be separated out from all bank and thrift performance as well. (Community banks are categorized as having less than $10 billion in total assets.) All categories can be tracked against the U.S. as a whole.

In addition, a mouse-over feature allows users to view the specific data points for each quarter back to the year 2000.

The key performance categories and measures now available to chart include: Asset Quality Ratios Loan loss reserve/non-performing loans Nonperforming loans/total loans Nonperforming loans + Other Real

Estate Owned (OREO) / Total loans + OREO Texas ratio Balance Sheet Performance Indicators Commercial real estate (CRE) loans/ total loans Tier 1 leverage ratio Total loans/total assets Earning Performance Indicators Efficiency ratio Net interest margin Return on average assets Return on average equity Noninterest expense/average assets Noninterest income/average assets For more information about the banking performance charts or the Banking Insights publication, please contact bankinginsights@stls.frb.org.

June 2016 | The Arkansas Banker

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BANKER NEWS & MOVES CITIZENS BANK BOLSTERS LENDING TEAM IN HOT SPRINGS

University of Arkansas at Little Rock. He is a past member of the Lions Club and the Hot Springs Village Rotary Club.

Citizens Bank has strengthened its lending operations in the Hot Springs market with the addition of Barry Owens as Senior Vice President and Senior Loan Officer, and Nancy Schnaufer as Loan Assistant.

Schnaufer has a son, Baron, who attends Magnet Cove Elementary School. She graduated from Lake Hamilton High School, and earned two Associates Degrees from National Park Community College in Hot Springs and a Bachelor’s of Business Administration Degree from the University of Arkansas at Little Rock.

Barry Owens, a native of Garland County, was voted last year as “Best Banker” in the annual Hot Springs Sentinel-Record’s “Readers Choice” survey. He has 38 years of banking experience, and holds Basic, General and Advanced Certificates of Banking from the American Institute of Banking. He is a graduate of the National School of Real Estate Finance held at the University of Wisconsin-Madison.

Nancy Schnaufer, who also is a lifetime resident of Garland County, has worked in banking for 17 years – 15 years of which have been spent in lending.

“The expertise of the Citizens Bank lending team has been greatly elevated by our addition of Barry and Nancy,” said David Wooldridge, Market President. “These two lending professionals have an incredible base of experience that will help individuals and businesses reach and surpass their financial goals.”

Owens and his wife, Patty, have two grown children, Derick and Pam, who both live in Hot Springs. Owens is a graduate of Fountain Lake School, and attended Garland County Community College and the

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AL DRUSO JOINS SIMMONS BANK AS BANK CARD MANAGER Al Druso has been named senior vice president and bank card manager for Simmons Bank.

Druso, a graduate of Ashland College in Ohio, began his banking career with Society Bank in Cleveland. From 2000-03, Druso was the general manager of a credit card and merchant center for Marshall & Ilsley Corp -- Metavante. He was responsible for more than 225 employees servicing almost 350 financial institutions across the country.

The center managed customer service, accounting, collections, credit, security, client relations, account management and sales.

The center was responsible for more than two million credit cards and almost 30,000 merchants.

In 2003, Druso became the first vice president of card services for First Financial Bank of Cincinnati. He managed debit card products, credit card products, ATMs and merchant services. He worked for First Financial until joining Simmons earlier this month.

“Bank card is one of the most dynamic industries in which we compete,” said Larry Bates, Simmons’ executive vice

The Arkansas Banker | June 2016

president for specialty lending.

“Al brings a unique set of skills to Simmons. He’s committed to excellent service and will ensure that we offer the best product benefits and features.”

BANK DEPARTMENT HIRES FOUR The Arkansas State Bank Department has hired four examiners, including three for the safety-and-soundness area and one for Information Systems.

Samuel “Tanner” McKnight, Seth Parsley and John David Sonnier will be commercial Bank Examiner Trainees, while Ashish V. Patel will be a Bank Examiner Trainee in the Bank Department’s Information Systems group. McKnight will be assigned to the Jonesboro field office and Sonnier will join one of two groups based out of Little Rock. Parsley will be assigned to the Jonesboro office until December 31, 2016, after which he will join a Little Rock group.

Tanner McKnight was a management trainee at The First National Bank of Wynne from May 2015 until his hiring at the Bank Department. His training at the bank was primarily in the credit area.

McKnight received a Bachelor of Science in Finance, with an emphasis in banking, at Arkansas State University in May 2015. His minor was in Accounting.

Prior to being hired at the Bank Department, Seth Parsley served as a teller and customer service representative at First National Bank, Paragould. He had been employed at the bank since April 2012 and assisted

in the establishment of a new branch in northwest Arkansas.

He trained customer service representatives at the new branch. Parsley received a Bachelor of Science in Finance, with an emphasis in banking, at Arkansas State University in May 2014. His minor was in Accounting.

John David Sonnier joined the Bank Department after being employed at Merchants & Planters Bank, Newport, since May 2014. At the bank, Sonnier served as an intern in credit compliance, a position in which he monitored and developed lending policies.

In addition, he reviewed commercial and consumer loans. In May 2015, Sonnier was promoted to credit analyst, reviewing larger commercial loans and evaluating the Allowance for Loan and Lease Losses. Sonnier was an intern at Richardson Accounting and Consulting in Batesville from February 2013 to May 2014.

Sonnier received a Bachelor of Arts in Economics and Bachelor of Science in Accounting at Lyon College in May 2015.

Ashish Patel received a Bachelor of Science in Electronics and Computer Engineering Technology at the University of Arkansas at Little Rock in December 2015. In May 2013, he was hired by Electric Cooperatives of Arkansas, for which he served as a workstation support technician and network technician. His responsibilities included configuring and installing network equipment for substations, and generating network maps to represent physical topology of equipment.

Continued on page 39

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Office Depot

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Strategic Companies

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www.cna.com/communitybanks www.DataScoutPro.com www.officedepot.com www.StrategicCompanies.com

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.

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BANKER NEWS & MOVES Continued from page 38 A commercial Bank Examiner Trainee typically is given routine tasks during the first weeks of employment. A considerable amount of time is allocated for the study of examination manuals, rules and regulations, and other resources. After this initial stage of exposure to the examination process, more concentrated training in bank operations commences. For a commercial examiner, this primarily involves reviewing bank records to determine an institution’s financial condition and compliance with laws and regulations. During this oneyear period, the examiner is expected ultimately to be able to complete assignments without direct supervision.

The training process for an Information Systems examiner is comparable, but with a focus on evaluating a bank’s management of technology. In addition, a trainee in this area is expected to eventually prepare an examination report evaluating information systems operations and controls. This requires an ability to identify problem areas, assign appropriate ratings and recommend procedures for correcting deficiencies.

RELYANCE BANK ANNOUNCES A RECENT PROMOTION Chuck Morgan, President and CEO of Relyance Bank, N.A. is pleased to announce the following promotion: Heather Bankhead was recently promoted to Assistant Vice President of Human Resources. She graduated from Henderson State University in Arkadelphia, Arkansas, where she earned a Bachelor of Arts Degree in English with minors in Spanish and Psychology. Mrs. Bankhead is a 2015 Leadership Pine Bluff graduate. She has a strong background in staff development and management and has completed several industry related courses. She also has a strong background in community service; serving as Secretary of the Jefferson County Young Professionals, Secretary of the Pine Bluff Downtown Rotary Club, Account Solicitor for the United Way of Southeast Arkansas, Co-Director of the Southeast Arkansas District Fair Queen & Talent Show, and a member of the Acquisitions Committee for the Southeast Arkansas Arts and Science Center Potpourri Parties.

The Arkansas

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

June 2016 | The Arkansas Banker

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Office Depot is an ABA Endorsed Vendor

The Arkansas Banker | June 2016