The Arkansas Banker July 2017

Marijuana Banking

Bank Improves Senior Living

Bank Takes Customer-centric Approach

The Arkansas

Banker

The Human Side of Ethics: Why Good People Make Bad Choices

Volume C, No. 7 | July 2017

July 2017 | The Arkansas Banker

1

BANK MANAGEMENT

SEMINAR

AUGUST 10-12, 2017

Hilton Branson Convention Center Branson, Missouri #BMS2017

r and e t s i g e R Your e v r e s e R Now! s m o o R

Join the Arkansas Bankers Association for a laid-back, family friendly event: the 80th Annual Bank Management Seminar, August 10-12 in Branson, Missouri. We encourage you to bring members of your family, and your bank family, to this annual retreat both for some R&R, and to gain insight into their increasingly important role within the financial organization.

Log on to www.arkbankers.org/ABA/2017_BMS.aspx for details & to register!

Network. The ABA’s casual executive event, the Bank Management Seminar, offers the perfect atmosphere for re-connecting with your industry peers away from the board room. Chat at the opening reception, shoot the breeze on the golf course, or grab a bite to eat!

2 The Arkansas Banker | July 2017

Recharge. Our agenda focuses on strategy, how to position your bank in the future marketplace, and how to lead and motivate those around you. These topics + the vacation atmosphere are sure to give you a fresh outlook as you return to the bank!

Grow. This year’s keynote speaker, Captain Brian Udell, will share his harrowing story of survival, and the essential role that inner strength and determination played for him.

Attendees will also hear from reformedconvict Chuck Gallagher and M&A strategist Jonathan Hightower.

The Arkansas

Banker Volume C, No. X | 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

SUBSCRIPTION

DEPARTMENTS

8

Washington Update

Dave Dickson Rob Nichols

25 Member News 26 Banker News & Moves 27 Index of Advertisements 10 Past Chairmen Gather 12 Baby Boomers, Gen Xers and

the “T” Word

By Bret Anderson

14 How to Bank Marijuana

Related Businesses

FEATURES

By Daniel J. Beck

16 Customer-centric Branch

Embodies Bank’s Flexible Approach 20 Arkansas Bank Makes

Community a Better Place

to Live for Seniors 22 2017 HR Conference

MAGAZINE RATES

23 What You Need to Know

About the Grandparent Scam

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

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

Chairman’s Column

Bill Holmes

24 Industry News

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

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.

6

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.

President’s Column

EDITORIAL

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

4

COVER STORY

The Human Side of Ethics: Why Good People Make Bad Choices Bank Management Seminar speaker Chuck Gallagher discusses how to pro-actively spot the risk of “good people making bad choices.”

See page 18

July 2017 | The Arkansas Banker

3

PRESIDENT’S COLUMN How Do You Say ‘Thank You’ With your indulgence, I would like to use this space to ask a personal question. How do you say “thank you” to so many, for so much?

clear. No more chemo or radiation is necessary.

Rita and I want to say thank you to the hundreds of bankers and friends who have sent cards, emails, scripture and personal wishes for my recovery. It is an amazing family of friends that spans our state, and every corner of this country.

The staff here at ABA, who early on presented me with signed boxing gloves (to keep up the fight), my counterparts that head up the alliance of the state banking associations, the American Bankers Association staff members and all of the folks that service our industry as partners were a steadfast team of supporters.

The support and prayers we received was overwhelming.

Now for regular business...

The best news is the prayers and wishes worked. My PETscan last Wednesday was

ABA EXECUTIVE COMMITTEE

DAVE DICKSON | CHAIRMAN

Thank you, each of you, for all you did, but most of all for being there!!!

Banks in several of our surrounding states have received letters from USAA in San Antonio asking the bank to contact their law firm regarding licensing fees for patented technology that allows that bank’s customer to deposit checks electronically.

USAA has sent out hundreds of these letters to banks and credit unions asking them to contact Epicenter Law, USAA’s law firm, to discuss the various levels of fees. Some banks are reaching out to Epicenter, some are referring the letters to their core providers who operate the RDC program. If you have received one of these letters please let me know.

We recently sent a letter to Director Cordray at CFPB concerning the new HMDA data capture requirements. It is important that we have time to set up our systems and train our people.

Please feel free to join in with a letter from your bank. For a copy of our letter, log on to https://tinyurl.com/y8b2zxbd.

CATHY OWEN | CHAIRMAN-ELECT

ROB ROBINSON IV | VICE CHAIRMAN

Union Bank & Trust Co., Monticello

Eagle Bank, Little Rock

Simmons Bank, El Dorado

JUDY LAWTON | TREASURER Heartland Bank, Little Rock

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

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

ABA BOARD OF DIRECTORS

JOHNNY ADAMS | GROUP 2

DAVID DOWD | GROUP 1

TOM GRUMBLES | GROUP 2

JERRY MORGAN | GROUP 1

First Security Bank, Conway

Cross County Bank, Wynne

First Service Bank, Greenbrier

Focus Bank, Jonesboro

PHIL BALDWIN | GROUP 2

TROY DUKE | GROUP 5

SCOTT HANCOCK | GROUP 3

LORI ROSS | GROUP 4

Citizens Bank, Batesville

Gateway Bank, Rison

JEFF BRECKLEIN | GROUP 1 Integrity First Bank, Jonesboro

United Bank, Springdale

JIM CARGILL | GROUP 2

DON GIBSON | GROUP 3

NATHAN GAIRHAN | GROUP 3

Centennial Bank, Fayetteville

Citizens Bank, Arkadelphia

Bank of Delight, Delight

DARWIN HENDRIX | GROUP 4

JASON TENNANT | GROUP 3 Cornerstone Bank, Eureka Springs

DAVID JESSUP | GROUP 5

LYNN WRIGHT | GROUP 2

Arvest Bank, Little Rock

Legacy National Bank, Springdale

DeWitt Bank & Trust, DeWitt

GENE CRAWFORD | GROUP 5

CHRIS GOSNELL | GROUP 4

WILSON MOORE | GROUP 2

Citizens Bank, Batesville 4

PRESIDENT & CEO BILL HOLMES

Farmers Bank & Trust Co., Magnolia

The TheArkansas ArkansasBanker Banker || July July2017 2017

Bank of America, Little Rock

Regions Bank, Little Rock

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AUGUST 2017 10-12 | Bank Management Seminar

Hilton Branson Convention Center, Branson, MO Who Should Attend: Bank Directors, CEOs, Presidents, and Senior Management

22

| New Account Documentation and Compliance

28

| Safe Deposit Box Issues

Crowne Plaza, Little Rock Who Should Attend: Customer Contact Personnel, Internal Auditors, and New Accounts Officers

SEPTEMBER 2017 13-14 | Call Report Preparation

Crowne Plaza, Little Rock Who Should Attend: Bank Operations Personnel, and anyone responsible for preparing, auditing, or signing the call report

19

Arkansas Bankers Association, Little Rock Who Should Attend: Safe Deposit Supervisors, Security & Compliance Officers, and Vault Attendants

| BSA/AML Hot Topics

Holiday Inn Presidential, Little Rock Who Should Attend: Experienced personnel who maintain or audit Bank Secrecy Act or Anti-Money Laundering compliance efforts

OCTOBER 2017 10

11

| Loan Review

Arkansas Bankers Association, Little Rock Who Should Attend: Loan Review Officers, Internal Auditors, Credit Administrators, Loan Officers, and Senior Credit Officers

| Bank Directors Workshop I

Arkansas Bankers Association, Little Rock Who Should Attend: Bank Directors, Executive Management, Senior Bank Officers, and Shareholders

17-18 | IRA School

19 | Writing Compliant Real Estate Evaluations Internally

Arkansas Bankers Association, Little Rock Who Should Attend: Appraisal Department, Credit and Loan Officers, Loan Review Officers

23-25 | ABA Mega Conference

Little Rock Marriott, Little Rock Who Should Attend: Ag Lending Personnel, Bank Directors, Marketing Personnel, Security Personnel, Technology Personnel, Trust Officers, and Personal Bankers

Holiday Inn Presidential, Little Rock Who Should Attend: New Accounts Representatives, CD Personnel, Savings Counselors, Investment and Trust Personnel, and IRA Personnel

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

July 2017 | The Arkansas Banker

5

CHAIRMAN’S COLUMN Planning for Our Association

With so much going on in the banking industry and beyond, I have many topics I could share with you this month. However, I will have ample time going forward to discuss the wonderful job that Rob Nichols and the American Bankers Association are doing on our behalf, promoting and fighting for our industry.

This month I want to stay closer to home and discuss our Arkansas Bankers Association. First, I want to thank Bill and the entire staff for what they do every day to promote and support all of our Arkansas banks. As I reflect on our recent Convention, in my opinion the best ever, it could not have happened without our staff at the ABA. We had an excellent venue and a wonderful lineup of speakers, along with each day’s opening with fantastic music. While I am on the topic of Convention, go ahead and mark your calendars for next year. Our annual Convention will be held April 2 – 4, 2018 at the Robinson Center in downtown Little Rock. You will not want to miss the installation of Cathy Owen, who will be the first female chairman of our association in its 128-year history.

CHAIRMAN DAVE DICKSON

President & CEO Union Bank & Trust Co. Monticello

The ABA Board of Directors also recently completed our annual planning session; the positive changes you saw this past year were in large part due to the sharing of ideas from our 2016 retreat. For example, moving the time of the Convention in order to not conflict with year-end school activities, and working to attract better speakers, both of which were accomplished. I want to thank the Board for their participation, willingness to share, and for being open and honest.

Preferences and expectations are always evolving. This presents challenges to any organization in continuing to meet its membership’s needs and your Association is adapting to meet them. I think that you will continue to see positive changes in many different ways that your Association serves its member banks.

In closing, I hope all of you have a wonderful and safe summer with your families.

I look forward to seeing you next month in Branson for our annual Bank Management Seminar which will be held August 10 – 12 at the Hilton Branson Convention Center.

ABA EMERGING LEADERS SECTION COUNCIL Stone Bank, Little Rock

BLAKE FLETCHER | PRESIDENT

JOHN ANDERSON | VICE PRESIDENT The Malvern National Bank, Little Rock

GEORGE PURVIS | SEC./TREAS. Cornerstone Bank, Eureka Springs

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

BURT HICKS | GROUP 5 Simmons Bank, Pine Bluff

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

Grand Savings Bank, Rogers

NATALIE BARTHOLOMEW | GROUP 3

BLAKE JOHNSON | GROUP 1 Evolve Bank, Jonesboro

RACHEL SCHWARTZ | GROUP 4 Farmers Bank & Trust, Texarkana

JOHN BOLLINGER | GROUP 3 Simmons Bank, Fayetteville

JAMES LYLE | GROUP 5 McGehee Bank, McGehee

SANDY STARNES | GROUP 2 The Citizens Bank, Batesville

BRANDON GENTRY | GROUP 1 Cross County Bank, Wynne

RYAN MOORE | GROUP 1 Centennial Bank, Jonesboro

HUNTER WINDLE | GROUP 4 The Malvern National Bank, Malvern

ROBERT HARGIS | GROUP 5 The Citizens Bank, Monticello

HUNTER NORTON | GROUP 3 First Security Bank, Fayetteville

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.

6

The Arkansas Banker | July 2016 2017

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Basic Administrative Duties of a Trustee 8/7/17 - 9/8/17

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Building Customer Relationships 10/2/17 - 10/27/17

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Basic Administrative Duties of a Trustee 11/13/17 - 12/29/17

CRCM Exam Online Prep 11/13/17 - 1/19/18

General Accounting 11/13/17 - 3/16/18

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

July 2017 | The Arkansas Banker

7

WASHINGTON UPDATE Treasury’s Roadmap to Reg Relief There’s a saying in Washington that “personnel is policy.” The truth of that statement is illustrated well by the Treasury Department’s recent report on ways financial regulation can be reformed to promote economic growth.

The long-awaited report, issued in response to the president’s executive order and informed by outreach meetings with community bankers and 10 different AmBA white papers, includes more than 100 recommendations for improving banking rules.

While many of the recommendations align with those that AmBA and the state associations have long endorsed, perhaps what is most exciting is the fact that 70 to 80 percent of them, by Treasury Secretary Steven Mnuchin’s estimate, can be put into motion by regulators through their independent rulemaking authority. That assumes the regulators agree with the recommendations, of course — and that’s where the “personnel is policy” part comes in.

President Trump is in the process of appointing new leaders at the bank regulatory agencies.

While these agencies are and will remain independent, the president will do what all presidents do and nominate qualified, experienced individuals who share his philosophy about regulatory oversight. What’s more, the president has shown no hesitancy in nominating individuals who have actual experience in the field they would be overseeing — like former bank CEO Joe Otting to be the next Comptroller of the Currency. This is a welcome change, in my view. It is simply good public policy to have those with real-world banking expertise at the table when critical regulatory policy is being decided.

Otting, along with Jim Clinger, the president’s nominee to replace FDIC Chairman Marty Gruenberg, and other new leaders to be installed over the next several months, can be expected to embrace and, over time, implement many of the recommendations in Treasury’s report. That makes it a living roadmap with lasting impact — not a pro forma government report that is issued and forgotten.

problematic treatment of mortgage servicing assets and commercial real estate loans; ease appraisal requirements in rural areas; increase the threshold for small creditor Qualified Mortgage loans; revisit the volume and nature of supervisory Matters Requiring Attention; more clearly define the Consumer Financial Protection Bureau’s UDAAP standard; streamline the FDIC de novo application process; and revisit the 2013 interagency leveraged lending guidance.

The report also highlights numerous mortgage rules that the CFPB could address on its own, including aligning the QM standard with GSE eligibility requirements, eliminating underwriting requirements that deny mortgages to qualified borrowers, modifying the abilityto-repay calculation to help banks meet the needs of self-employed and non-traditional borrowers, clarifying ongoing problems with the TILA-RESPA integrated disclosures, improving flexibility in the loan originator compensation rule and delaying the Home Mortgage Disclosure Act data expansion.

ROB NICHOLS

President & CEO American Bankers Association

Other action items, including those requiring legislation, would exempt community banks with less than $10 billion from the Volcker Rule, streamline the stress test process and raise the stress test asset threshold from $10 billion to $50 billion. (For a complete summary of the report, visit aba.com/ExecutiveOrders.)

While some are heavier lifts than others, these are all sensible, doable reforms, and that is key.

Despite spanning 150 pages, Treasury’s report does not overreach. The recommendations are grounded in common sense, adding to their credibility and enact-ability. That give us hope that community banks, which helped shape this roadmap for relief, will see tangible results in the coming months and years.

Among the roadmap’s many recommendations that have the potential to deliver much-needed relief to banks are suggestions to: Exempt community banks from Basel III; address

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The Arkansas Banker | July 2017

© 2016 American Bankers Association. All rights reserved. Reprinted with permission.

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!

WEDNESDAY, AUGUST 2

Reg E Compliance – Five Best Practices for Handling Disputes 1:30 p.m. – 3:30 p.m.

Regulation by Enforcement 10:00 a.m. – 12:00 p.m.

THURSDAY, AUGUST 3 Phishing Trip 10:00 a.m. – 12:00 p.m.

Residential Construction Lending 1:30 p.m. – 3:30 p.m.

FRIDAY, AUGUST 4

Introduction to ACH – Part 1 10:00 a.m. – 12:00 p.m.

TUESDAY, AUGUST 8

Home Equity Lines of Credit 10:00 a.m. – 12:00 p.m.

Advanced Cash Flow Analysis 1:30 p.m. – 3:30 p.m.

WEDNESDAY, AUGUST 9

FRIDAY, AUGUST 11

Introduction to ACH – Part 2 10:00 a.m. – 12:00 p.m.

MONDAY, AUGUST 14

CRE Appraisals: Regulations and the Review Process 1:30 p.m. – 3:30 p.m.

TUESDAY, AUGUST 15

New Business Accounts: The Interview, CIP, New CDD Rules and Authority 10:00 a.m. – 12:00 p.m.

Regulation O – Lending to Insiders 1:30 p.m. – 3:30 p.m.

WEDNESDAY, AUGUST 16

Same Day ACH: Round Two 1:30 p.m. – 3:30 p.m.

THURSDAY, AUGUST 17

Applicants and Applications 10:00 a.m. – 12:00 p.m.

TUESDAY, AUGUST 22

Flood Insurance: Compliance Issues and Enforcement Topics that Continue to Plague Lenders 10:00 a.m. – 12:00 p.m.

WEDNESDAY, AUGUST 23

Opening Trust Accounts: Documenting Authority & Liability 10:00 a.m. – 12:00 p.m.

THURSDAY, AUGUST 24

New BSA Officer Training 10:00 a.m. – 12:00 p.m.

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

FRIDAY, AUGUST 25

Dealing with Casual Days, Dress Codes and Work Appearance 10:00 a.m. – 12:00 p.m.

TUESDAY, AUGUST 29

Excel Explained: Budget Spreadsheets 10:00 a.m. – 12:00 p.m.

Do’s and Don’ts on Signatures Cards 1:30 p.m. – 3:30 p.m.

BSA Risk Assessments 10:00 a.m. – 12:00 p.m.

FRIDAY, AUGUST 18

WEDNESDAY, SEPTEMBER 6

THURSDAY, AUGUST 10

Introduction to ACH – Part 3 10:00 a.m. – 12:00 p.m.

Annual Deposit Regulation Training for the Branch 10:00 a.m. – 12:00 p.m.

The Professional Credit Analyst – Part 2 1:30 p.m. – 3:30 p.m.

MONDAY, AUGUST 21

CRE Appraisals: Appraisal Components, Approaches to Value and Cap Rates 1:30 p.m. – 3:30 p.m.

BSA/AML for Lenders 10:00 a.m. – 12:00 p.m.

New Currency Transaction Report and SAR Update 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

July 2017 | The Arkansas Banker

9

Past Chairmen Gather for Annual Event It was a true meeting of the minds as thirteen of the ABA’s past banker leaders came together for the annual Past Chairman’s Reception and Dinner on May 11 at The Capital Hotel in downtown Little Rock.

The event, which has been in place for 96 years, brings together a select group of bankers who have served the Association in a leadership capacity. John Freeman, 2012 ABA Chairman, served as host for the dinner.

The group always enjoys lively conversation and camaraderie.

The tenure of attendees spanned from James Kelley, 1991 ABA Chairman, to Chairman-Elect Cathy Owen, who will serve in 2018.

Past chairmen attending the annual Past Chairman’s Dinner were, from left, Gus Rusher (2004), Don Pattillo (2000), Joe Miles (2008), Barnett Grace (1997), John Womack (2007), Larry Kircher (2002), John Freeman (2012), James Kelley (1991), Charlie Blanchard (2011), Eddie Holt (2010), David Bartlett (2013), Sean Williams (2016), and Robert Taylor (2015).

(Top Left) Joe Miles (2008), Kathryn Miles, John Womack (2007), and Becky Womack.

(Top Right) Robert Taylor (2015) and David Bartlett (2013).

(Left) Dixie Holt and Eddie Holt (2010).

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The Arkansas Banker | July 2017

(Top Left) Judy Taylor, Sean Williams (2016), Joe Miles (2008) and Don Pattillo (2000).

(Top Right) Bill Holmes and Sean Williams (2016).

(Left) Memorie Dickson, Dave Dickson (2017), Cathy Owen (2018), Steve Owen, and Sean Williams (2016).

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July 2017 | The Arkansas Banker

11

Baby Boomers, Gen Xers and the “T” Word Many Baby Boomers and early Gen Xers hope they can avoid the “T” word long enough to exit the workforce gracefully before having to adopt any more new technology. The owner of a single proprietor doctor’s practice I spoke to recently is a great example. He said he is willing to pay fines and increased insurance fees, and even face poor Google ratings, in order to avoid the pain of “modernizing” his systems. This, despite having another 10-plus years before his anticipated retirement.

Baby Boomers (aged 53 to 71 this year) and early Gen Xers (the older half of the generational group turning 37 to 52 years old in 2017) have at least two things in common:

Births Underlying Each Generation

Number of U.S. births by year and generation

1. They did not grow up tethered to technology 2. They represent the majority of leaders in most industries today That’s right (and reasonably predictable): People aged 51 to 58 are leading most companies today. A 2017 study by Korn Ferry analyzed the top 1,000 companies in the U.S. by revenue. The research firm compiled the age and tenure of executives with similar titles—CEO, CFO, CIO—and determined the averages.

Source: U.S. Department of Health and Human Services National Center for Health Statistics PEW Research Center

The average CEO is 58 years old.

The average CFO is 53 years old.

The combined average of all the C-suite executives is 54 years old.

Ages vary by industry and region.

Community bank directors are 70 on average, and the typical bank executive tops 60, according to Tim Melvin in his January 2017 The Street article “Golden Age for Community Banks?”

The flip side of the coin? Vivek Wadhwa looks at leaders of technology businesses in a recent TechCrunch article. The Harvard Law School senior research associate and Duke University executive in residence said his research shows

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The Arkansas Banker | July 2017

the average high-growth tech company founder is 40 years old. (Though that might be surprisingly “old” considering the stereotypical launcher of a tech startup.)

Okay, so conservative industries have older leaders—why is this significant?

It has become quite the paradox: Despite not being born into a relationship with technology like your typical Millennial, Baby Boomers and Gen Xers have found themselves in the driver’s seat at the inception of their company’s digital future. Is this a case of wrong place, wrong time for the I.T. laggard?

Probably….

THE NEXT 20 YEARS

DaVinci Institute founder and Google’s top rated futurist Thomas Frey said “humanity will change more in the next 20 years than in all of human history.”

And that was a few years ago. We’re in the midst of the sea change. At the time, he offered these gut-checking 2030 predictions:

A MIT Sloan School of Management study shows companies with leadership promoting innovative technology were 26 percent more profitable than their peers and had nine percent higher revenue.

The last Baby Boomer will turn 65 in 2029. That’s just 12 years from now. Just twelve years until the final “Boomers” reach retirement age! But it’s even more pressing than that: Unless you plan to retire before the first post-Millennials reach drinking age (that’s 2019, about a year and a half from now), you won’t be able to avoid the digital tsunami in the workplace. Make no mistake, it is coming and it will engulf all of us.

80% of all doctors’ visits will have been replaced by automated exams 90% of all restaurants will use some form of 3D food printer in their meal preparations The world’s largest Internet company will be in the education business, and it will be a company we have not heard of yet 2 billion jobs will disappear, freeing up talent for many new fledgling industries And just in case you were not scared enough by those imminent transformations, consider Frey’s more recent predictions for “cultured meat.” If you’re not familiar with the product, it refers to real meat grown in cell cultures, independent of the rest of the animals we currently associate with meat production.

Earlier this year, Frey forecasted that by 2030, more than 50 percent of the general public won’t just consume it, they’ll give favorable ratings to cultured meats.

Cultured meat. It’s what’s for dinner.

Average Age

by Industry

CEO

CFO

CIO

CMO

CHRO C-Suite

Consumer

58

53

47

50

55

53

Energy

57

53

52

53

56

54

Financial Services

60

54

52

53

56

54

Industrials

58

53

54

53

55

55

Life Sciences

59

54

51

54

56

55

Professional Services

57

53

49

54

54

53

Technology

55

53

48

53

55

53

Overall average age

58

53

51

52

55

54

Okay, I digress.

Needless to say, things are changing.

Are you ready?

STOP? GO STRAIGHT? TURN LEFT OR RIGHT?

So, as a business leader, how do you end up on the correct side of the digital revolution? Embrace it!

First rule: Stop thinking of technology as the domain of the next generation. Baby Boomers and Gen Xers need to get used to learning new things all the time. It’s not just pre-Millennials, everybody will have to be a continual learner.

But that isn’t new, is it? Committing to a life of learning keeps our minds sharp.

It doesn’t matter if you have a few years left in your “professional life” or you are like me with 20 years until “retirement”: Keeping current is good for you.

And it’s good for your company.

Successful companies don’t simply use technology to do the same things more efficiently; rather, they use technology to conduct business in entirely new ways.

The world is your proverbial cultured oyster.

By the way, the conversation I had with that doctor intent on not adopting technology was in the reception area at a local, forward-thinking barber shop.

Despite the doctor’s arrival there before me, my online check-in allowed me to be ushered past him when the next barber was ready. How’s that for foreshadowing?

ABOUT THE AUTHOR

Bret Anderson is the Vice President of Marketing & Development at NetGain Technologies.

Utilizing his creative, forward-thinking, dynamic business approach, Bret helped lead NetGain Technologies through a challenging and competitive I.T. services and solutions marketplace.

July 2017 | The Arkansas Banker

13

How to Bank Marijuana Related Businesses ABOUT THE AUTHOR

Daniel J. Beck is an attorney with Quattlebaum, Grooms & Tull PLLC, where he primarily practices in the areas of banking law and real estate.

Daniel can be reached at dbeck@QGTlaw.com.

After the passage of “The Arkansas Medical Marijuana Amendment of 2016,” I wrote an article in The Arkansas Banker that addressed the risks associated with providing banking services to marijuana related businesses (“MRBs”). Because of such risks, a majority of financial institutions will refuse to offer banking services to MRBs and their vendors when MRBs begin to operate in Arkansas. Some may choose, however, to take the risk. Several financial institutions across the country are currently banking MRBs and sharing their practices with others. Regulators also have experience with financial institutions banking MRBs and have provided additional guidance to help those who are willing to provide services to the industry.

GUIDANCE FROM THE REGULATORS

Providing banking services to MRBs place financial institutions in a very unusual situation. The use and distribution of marijuana in some form has been legalized in 29 states and Washington D.C., but it is still prohibited under federal law. However, as discussed in my last article, the Department of Justice set priorities for enforcement against the use and distribution of marijuana in the Cole Memo, and the Treasury, through

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The Arkansas Banker | July 2017

FinCEN, provided additional guidance for financial institutions banking to MRBs – including a system for filing different categories of Suspicious Activity Reports (“SARs”).

Recently the Arkansas Bank Department, Federal Reserve Bank of St. Louis, Banking Division of the Colorado Department of Regulatory Agencies, and Federal Reserve Bank of Kansas City, hosted a webinar to discuss some of the issues financial institutions face on a

the financial institution and their MRB customers fully comply with state law and federal guidance. Executives of financial institutions should oversee the development of the compliance program and include their BSA officers in creating the program.

LESSONS FROM OTHER FINANCIAL INSTITUTIONS

daily basis – even though no regulator would comment on whether it endorses financial institutions banking MRBs. In that webinar, the representatives for the Banking Division of the Colorado Department of Regulatory Agencies and the Federal Reserve Bank of Kansas City stressed the importance of financial institutions maintaining a strong compliance policy where MRBs serve as partners in tracking every dollar that comes in and out of the business. If money can’t be tracked, it can’t be banked.

Before moving forward with banking MRBs, financial institutions should have full buy-in from their board of directors and keep its regulators fully informed of their decision to move forward with banking MRBs. Once this occurs, the next step is to create a full written compliance program to ensure

In addition to guidance from regulators, financial institutions have gained extensive experience banking MRBs and some are sharing that experience with others. Sundie Seefried is the CEO of Partners Colorado Credit Union and has written a book which has some of the same advice provided by regulators in the webinar. Seefried stressed that financial institutions should start banking MRBs slowly to ensure they can handle deposit growth. It is a good practice to segregate the MRB business from the rest of the financial institution. For example, Partners Colorado Credit Union created a subsidiary to deal exclusively with MRB activity, which was staffed

by BSA certified employees who would perform on-site examination of MRBs on a quarterly basis. It is typical for compliance officers to spend 60% of their time strictly dealing with compliance issues. Because FinCEN requires Marijuana Limited SARs for legitimate MRB transactions, it is estimated that each financial institution in Colorado providing banking services to MRBs may be filing, on average, 54 SARs a month.

The MRBs financial institutions provide banking services to should be professional and willing to deal with compliance standards imposed by the institutions. If not, their account should be terminated.

Any financial institution banking MRBs must to have a strong understanding of the medical marijuana industry, and should spend a significant amount of time learning their clients’ businesses.

Interviews should be conducted with prospective MRB clients. Financial institutions should determine whether a prospective MRB customer has the ability to sustain future success, has sufficient internal compliance programs, whether its employees are properly trained, and whether the financial institution feels comfortable with the MRB. Typical due diligence of an MRB client could take up to two weeks. Due to the sensitivity of

the business, each MRB and the core staff handling MRB accounts should sign nondisclosure agreements and staff should have appropriate security clearance and training before handling such accounts.

It may take over a month to develop a proper compliance program, and another month testing the program with a limited number of clients. Segregating the MRB line of business from the rest of the financial institution should help evaluate costs, asset & liability value, income, and other accounting and compliance procedures. The process may become streamlined if the financial institutions develop proper code and transaction types to identify incoming information and red flags for reporting purposes.

It is estimated that 12 to 18 banks in Colorado are currently providing banking services to MRBs. Colorado has allowed medical marijuana since 2000 and legalized recreational use of marijuana in 2012. Currently it is a multi-billion dollar industry with over 23,000 fulltime jobs created just in Colorado and is being banked by a handful of financial institutions. Fees for deposit accounts are priced differently ranging from flat fees to percentages of overall deposits.

The goal is not to gouge customers, but to recognize that there is an elevated cost and risk associated with banking MRBs.

CONCLUSION

While Arkansas will not have near the volume of business as states with legalized recreational marijuana, such as Colorado or California, any financial institution banking MRBs will need to hire additional staff to oversee compliance. A large amount of revenue will be generated from the 5 cultivators and 32 dispensaries authorized to provide medical marijuana in Arkansas, as well as the ancillary services that will develop around the industry. MRBs need banking services to provide legitimacy and safety for their employees and the communities where MRBs are located. With a majority of the states having legalized some form of marijuana use, it is likely that the drug will be decriminalized at the federal level sometime in the future. Until that time comes, financial institutions providing banking services to MRBs will remain in a precarious situation and will need to maintain diligent compliance with state law and federal guidelines.

July 2017 | The Arkansas Banker

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Customer-centric Branch in White Hall Embodies Stone Bank’s Flexible Approach Stone Bank’s new facility in White Hall is an embodiment of the bank’s approach to providing their customers with control and flexibility. The change is clear, from the building’s unique exterior, to the open floorplan. It’s something the organization’s management team has been working on for quite some time, according to Chief Retail Banking Officer Kirby Williams.

see what we do and how we treat people,” said Chief Technology Officer Bruce Upton. “We think that once they do that then they’ll want to bank with us because it’s not just a traditional bank, it’s a place where you go and have an experience. We want this to be a relationship; we want to be the people that help you do what you need to do.”

“Bruce and Marnie and I had all been carrying around this file in our heads and on our computers that was, if I ever really get to build my branch – If I ever get to build my bank – what will it be like?”

Williams said. “So we’ve stolen ideas from Umpqua bank and Waffle House, and AT&T, and a lot of different places to come up with this concept.”

Longtime banker Sheila Cannon is the branch’s Customer Service Manager, and notes that the open concept is something that both the bankers and White Hall community members have embraced.

That concept centers on providing high-level customer service in a relaxed atmosphere. Gone is the standard teller line, and in its place is a concierge desk where customers can go to complete transactions. Or, if they choose, they can wait on one of the couches as a CSR handles the transaction solo.

“Whether they’re banking with us now or later, we want them to come out here and

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The Arkansas Banker | July 2017

“They like it, they say it’s more inviting, and it feels like home. You don’t have the glass between you and the customer, and they just think it seems more personable,” she said. “There’s just more interaction with the customers. We like it and the customers seem to love it.”

“It’s just completely different banking than people have seen before. It really has changed the idea of going in and standing in line to do your thing,” agreed White Hall Market Manager Kelly Williams.

“I’ve heard them say more than one time ‘I appreciate you taking time with me.’ It’s

that community-style banking – that feel, that interaction between two people in this fast-paced world.”

The open concept lobby is flanked by two counters. The first is stocked with a staple for bankers and customers alike – coffee.

“If you’re in here around 9 o’clock in the morning, there are folks that come in – they may or may not do any banking

business – but they’ll come in and get a cup of coffee, sit out here and catch up with the news on CNN, interact with our folks,” Kirby Williams explained.

“It’s like in the old days when people used to sit down at a breakfast counter and know what’s going on in the town. Now, they’re coming in here and sitting in our place and talking about what’s going on in White Hall,” Upton added. “There’s so much information that our loan guys get from that.”

The second counter is a testament to another piece of Stone Bank’s commitment to customer service – technology. Equipped with a charging station and mobile devices, bankers utilize this area to show customers how to use the bank’s mobile products.

In the drive-thru, you can find the first of six Interactive Teller Machines (ITMs) that the bank has purchased to install system-wide.

“We’ve got a great start on the ITMs, good enough that we’ve ordered five more, and you’ll see five more very quickly in and around Little Rock and Harrison and in some of our other areas, so people are starting to adapt to that,” Upton said.

“From an efficiency standpoint, and a technological advantage standpoint, I can go to that ITM and I can do everything myself, but if I get to the point of ‘oh, I don’t know how to do that,’ I can push the button and now I’ve got somebody to help me. It allows me to take my time and do it the way that I would like to do it, and be in control of my situation instead of having to wait. It gives the customer

control of the transaction, instead of somebody else controlling your time.”

Upton went on to explain that one universal banker could staff eight to ten ITMs. Once the bank has several of the machines in place, they will have a “call center” to which all of the machines will be linked. For now, the bank is studying the area and their customers – looking at shift changes at local plants, when customers get off work, and when they need to do their banking.

“We’re trying to get our arms around that so we can know, what are the hours we need to offer with this ITM technology?

Ultimately, we will have a call center where we’ll have people working to man all of them and we’ll have more uniformity in our hours,” Kirby Williams said.

Upton noted that with the new machines came a learning curve, and that initially staff had been stationed near the machine to assist customers interested in using the technology.

Another technology-based service is the bank’s “Take the Bank to the Customer” program. Upton explains that Stone Bank employees have a mobile banking kit that allows them to perform whatever services a customer needs from a remote location.

“They can come to you and open an account; they can come to you and do a loan modification – we scan it all right there and it’s connected back to our core system through a secure transmission,” he said. “It’s really starting to catch on. It’s not only a competitive advantage, but it makes a big difference to our customers.”

(Top) Bruce Upton demonstrates Stone Bank’s Interactive Teller Machine (ITM) at the institution’s branch in White Hall.

(Above) Sheena Ziegler assists Upton from inside the branch.

The bank has keyed in on providing services to agricultural and small business customers, not just through technology, but also by servicing Small Business Administration (SBA) and Farm Service Agency (FSA) loans.

“We’re not going to have 50 branches, so we need to differentiate somewhere. If we’re only going to have 10 branches, they need to be the 10 very best branches. We need to do things for our customers and for our services that other banks can’t or won’t do,” Upton said.

He and Kirby Williams credit Stone Bank’s CEO Marnie Oldner, and the bank’s owners, the Compton family, for the organization’s willingness to adapt to changing technology, and allowing employees to think outside the box.

“At this bank, they want to be on the forefront, they want to be the trendsetter and not the follower,” Kelly Williams said. “They want to be in the middle of what’s going on instead of waiting until everybody else is there and then starting…and that’s been exciting.”

July 2017 | The Arkansas Banker

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The Human Side of Ethics: Why Good People Make Bad Choices Far too often, the process of making bad choices — unethical choices — begins with a simple almost thoughtless decision. How do I know? Well, I am living proof that good people can make some really bad choices and the consequences, well, profound doesn’t come close to describing the experience.

ABOUT THE AUTHOR

Chuck Gallagher is the President of the Ethics Resource Group and an international expert in business ethics. Chuck provides training, presentations and consultation with associations and companies on ethics and creating ethical cultures where people do the right thing, not because they have to, but because they want to!

“Never in my wildest dreams did I see this coming. When I first started “borrowing” from my client I intended to pay back what I took. Heck, I did pay some of it back… at least at the beginning!” Those were the words I shared as I openly confessed that the life I was living was, for the most part, an illusion. The truth is for all my legitimate successes; I had over time become no more than a liar and a thief. My choices created consequences that he never dreamed were possible.

Some people have advised that I should not be so transparent, especially when writing an article for such a prestigious organization. By my recantation of my ethical fall is all too common. People who fold their arms stating “I would never do something illegal much less unethical!” find that what triggers inappropriate behavior is a basic part of human nature. We are all subject to temptation and therefore can and do make bad choices. I am but an example.

If bad choices lead to tough consequences, what can we do to identify bad behavior before it starts? What can we do, as managers or leaders, to prevent unethical choices from being made in the first place? Those are two very profound questions, both of which are at the heart of why it is critical to talk about the Human Side of Ethics in your organization.

THE THREE COMPONENTS OF BAD BEHAVIOR

Hear more from Chuck Gallagher at BMS 2017 in Branson!

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The Arkansas Banker | July 2017

Research has shown that three behaviors are at the core of what would cause or allow an otherwise ethical person to make unethical and potentially illegal choices. These behaviors are well documented and for those who are charged with detecting fraud (Statement of Auditing Standards #99) are called “the fraud triangle”: Need. Described as perceived pressure that a person is experiencing, is the first and critical component of what motives a person to stray from ethical to unethical. Need may come in a variety of forms. The person who is in too much debt likely experiences financial strain — which was the root of my need. Alice, a church secretary, found her need triggered by her granddaughter’s diagnosis of cancer. Infamous Bernie Madoff ’s

need was certainly not money; likely, he was triggered by the need to be infallible. Whatever the pressure, need is the core emotional state that starts the ball rolling from a choice that is ethical to unethical.

to an unethical activity. I blame no one, but I also have to acknowledge that if those close to me (my partners in business, for example) had noticed my changing patterns of behavior their attention might have thwarted my actions.

Opportunity. It makes no difference what your need may be if you don’t have the opportunity to satisfy it then the unethical and potentially illegal choice fails. Without Opportunity there is no fuel for the potential unethical fire. I was a trusted employee, and with that trust came opportunity. Alice was trusted, and had been for so many years that no one could comprehend she was capable of any unethical activity. Madoff took opportunity founded in trust to a new level.

When subconscious need is brought to light or becomes conscious, then often the outcome is reduced inclination toward unethical behavior. So, signs to look indicating increased need are: (1) calls from creditors or personal calls intensifying at work; (2) abnormal purchases without apparent new sources of funding; (3) lifestyle changes and/or (4) marital issues or challenges with aging parents.

Rationalization. Need combined with opportunity provides a firm foundation, but the glue that holds unethical activity together is the ability to rationalize that what is wrong, is right.

If you ask most people found guilty of unethical/illegal behavior, they will tell you they felt their actions were legitimate. Mark, for example, rationalized that he was not “stealing” money as long as his intent was to pay it back. Further, he solidified this mental game by paying some of the money back. “Surely, I wasn’t guilty of stealing money as long as I was paying it back,” he stated.

The mind can be tricky and when you combine need with opportunity, and can rationalize bad behavior as good, you have the perfect storm to move from ethical to unethical, and potential illegal, behavior.

WHAT CAN BE DONE TO PREVENT UNETHICAL ACTIVITIES?

As business managers, HR Directors and those connected with Compliance, there are clear actions we can take that can help keep folks between the ethical lines.

Look for Need! While we can’t control what needs our employees have, we can be aware of any changes or activities that would suggest an increase in need and the stress that need brings.

I was the one responsible for my unethical actions. I was in too much debt and succumbed to the pressure of my need by turning

Need is the fuel that supports the possibility of unethical behavior. The challenge most managers face with thinking about “Need” is to be open minded enough to consider the potential sources of “Need” so that what might fuel unethical behavior can be suppressed.

Minimize Opportunities. The most effective course of action to keep our employees and associates between ethical lines is to remove opportunities to conduct unethical activities. For example, I embezzled money from a client’s trust fund. While I am not proud of that action (now some 25+ years ago), had the bank account that I used required two signatures, the embezzlement would have been far more difficult. Think about it, with that minor change what would I do, ask the co-signer to help me steal money from the trust? The answer is simple, of course not. So, less opportunity equals less chance for unethical activity.

A practical question is how do we reduce opportunity? Some of the answers are obvious. Minimize opportunities by: (1) requiring multiple signatures on checks; (2) require people to rotate job responsibilities from time to time; (3) strongly encourage employees to take vacations or time off; and/or (4) ask employees from different positions within the company to identify how people can or do act unethically. When a person is aware that their actions are being watched or subject to being Please turn to page 21

July 2017 | The Arkansas Banker

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Arkansas Bank Makes Community a Better Place to Live for Seniors One bank in south central Arkansas has been utilizing special funding to ensure that its customers are able to maintain a comfortable lifestyle this summer. FBT Bank and Mortgage has been working in conjunction with the Federal Home Loan Bank of Dallas to assist income-qualified, special-needs homeowners with necessary home repairs and modifications through the Special Needs Assistance Program (SNAP).

With this program, grants are awarded

by FHLB Dallas through participating member institutions. FBT Bank and Mortgage has utilized SNAP in partnership with FHLB Dallas since the program’s inception in 2009. In total, they have assisted 57 local families by awarding $355,455 in SNAP grants.

“Many of our seniors are on fixed incomes and thanks to programs such as SNAP, they are able to make repairs to their homes they otherwise could not Isolea Cranford

afford,” said Scott Smith, FBT Bank and Mortgage Vice President, who has worked with many applicants on their SNAP applications.

“The purpose of community investment programs such as SNAP is to make life easier for our members’ customers,” said Greg Hettrick, first vice president and director of Community Investment at FHLB Dallas. “We’re proud to partner with FBT Bank and Mortgage as they commit to making their community a better place to live for seniors.”

The following are just a few stories of residents FBT Bank has helped through SNAP.

PRAYERS ANSWERED

Isolea Cranford used to fill up pans with warm water every day, which she would use to wash dishes and make food. Rusted pipes and leaks prevented the retired 63-year-old from using her bathroom and kitchen for an entire year.

When she learned about SNAP from a family member who had received it, she felt her prayers had been answered.

Living on disability, Ms. Cranford’s fixed income wasn’t enough to cover the repairs that her home desperately needed. She received $3,935 from FHLB Dallas and FBT Bank and Mortgage to repair the rusted pipes in her home, as well as a new sink and toilet in her restroom, which had been damaged by the leaking water.

“I had to get it done because I couldn’t live like that anymore,” said Ms. Cranford.

“I’m able to enjoy my house now.”

Three years ago, Ms. Cranford was hospitalized for nine days after being hit by a van while walking. She broke her pelvis in three places and now suffers from chronic pain.

“Ms. Cranford has been through a lot and no one should have to live the way she did,” said FBT Bank and Mortgage Vice President Scott Smith, who worked with

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The Arkansas Banker | July 2017

Darlene Harper

Ms. Cranford on the SNAP application.

“Thanks to our partnership with FHLB Dallas, we’re able to help Ms. Cranford live more comfortably in her home.”

PROBLEMS SOLVED

When retired seamstress Darlene Harper learned about the Special Needs Assistance Program (SNAP) from a friend, it seemed like the answer to a number of problems with her home that she could not afford to repair.

Nearly $6,000 in SNAP funds repaired the back door of her home, which was built in the 1970s, the front porch, as well as replaced the floor in her bathroom.

“The floor was about to fall in!” said Ms. Harper. “The grant was a blessing because now I can be comfortable in my house again.”

“Thanks to SNAP and our partnership with FHLB Dallas, we’re able to help Ms. Harper live more comfortably,” said Mr. Smith. “That’s what being a community bank is all about.”

Ms. Harper said that her life is better now.

“I couldn’t live comfortably with the problems I was having in my house,” said Ms. Harper. “Now, life is much better and I’m so glad of that.”

LEVELED OUT

Dangerous soft spots in the floors, particularly in the bedroom, of 65-yearold Sherrie Styles’ 45-year-old home were making it difficult to get comfortable or have guests over. Income from her part-time job as a housekeeper and Social

Earlier this year, Ms. Strickland applied and was awarded a $6,000 SNAP grant.

The funding covered the cost of replacing countertops and several interior doors that were peeling, as well as repainting the home’s exterior.

“If I hadn’t gotten the grant, there was nothing I could have done,” Ms. Strickland said. “The repairs have helped a whole lot. I have lived here 30 years, and I am just very thankful for the work.”

Sherrie Styles

Security was not enough to cover the cost of repairs.

Ms. Styles received nearly $6,000 in SNAP grant funds, which funded the replacement of the floor in her bedroom, leveled her home and replaced her windows.

“I was having a lot of problems with the house,” said Ms. Styles. “Now I can sit back and relax, just like God intended.”

FIXED THE NECESSITIES

Living on a fixed disability income, Rejoyce Strickland, 61, does her best to cover her expenses. But for much of her 30 years as a homeowner, she has not been able to afford necessary repairs to her home.

“We see a great demand in our area for this type of financial support,” Mr. Smith said. “Being able to help some of our community residents to stay in their homes gives us tremendous peace of mind.”

ABOUT SNAP

“Each year, SNAP is our most soughtafter program because the grants target an underserved population,” Hettrick noted.

In the past eight years, more than $11.6 million in SNAP grants have been awarded through FHLB Dallas member institutions to assist more than 2,300 families across FHLB Dallas’ fivestate District of Arkansas, Louisiana, Mississippi, New Mexico and Texas. In 2016, FHLB Dallas awarded nearly $1 million in SNAP grants that assisted 205 families. The 2017 SNAP funding, made available in January on a first-come, firstserved basis, has been exhausted.

To learn more about SNAP, visit fhlb.com/ snap.

Rejoyce Strickland

Ethics

Continued from page 19

watched, the “Opportunity” factor decreases substantially. As worn out as the line might be, people really do respect what management inspects. Of course, management must be subject to inspection as well.

Train Rationalization. Depending on one’s internal ethical compass, what one person can easily rationalize may be a problem for another. Therefore, as managers our role (just as important as the more analytical “Opportunity” role) is to educate our people on the significance of “Rationalization” identifying what it sounds like and when it might appear.

When employees hear what “rationalization” sounds like, it becomes far easier to support each other in our ethical choices. At a recent ethics seminar an attendee commented, “But everybody does it.” As those words were spoken, another participant yelled out, “Rationalization!” The crowd erupted in laughter as people began to see just how simple and easy it is to rationalize the “little things.” And, when we rationalize the little, the larger unethical choices become easier to swallow.

YOUR ETHICAL CULTURE

Every business or organization needs to remember that the creation of an ethical culture is exemplified in the actual behavior and attitudes of all team members. The question is not so much whether you talk the talk (in policy documents, training materials or video or webinars), but rather whether you walk the walk.

Want to create a culture of ethical behavior in your organization? It’s easy if you think about it. When you start by understanding how good people make bad choices, and follow it with an effective ethics-training program that reinforces ethical choices and accountability, you have a recipe for success. Every choice has a consequence. What choices do you make for your organization to help keep your most valuable assets between the ethical lines?

July 2017 | The Arkansas Banker

21

2017 Human Resources Conference The ABA Human Resources Conference was held June 27 in Little Rock, with representatives from 22 banks in attendance.

This event, geared toward HR professionals, bank personnel directors, and branch managers, highlighted generations in the workforce, cybersecurity, and insights on the injunction against the DOL’s new overtime rules.

In addition to speakers covering those key issues, attendees had the opportunity to network with their peers in a “speed networking session,” moderated by speaker Diane Barton.

During this session, the group split into small groups and were given specific discussion topics, including recruiting, onboarding, and challenges.

Here’s what attendees had to say about the event: •

“The sessions were informative and very engaging.”

•

“Location was perfect, excellent conference. Enjoyed the networking time, too.” -Kim Linn, First Service Bank

•

The attorneys were awesome, great information! The networking with other HR personnel is always the best.”

-Elizabeth Rogers, The First National Bank of Wynne

-Connie Allmond, Farmers & Merchants Bank

•

“Brian had very interesting information about legislative changes. This is something I can share with my supervisor and plan accordingly... Thank you for the conference. It was valuable to me and our office.”

-Cynthia Wheeler, First Arkansas Bank & Trust

(Top) Speaker Dianne Barton engages with attendees during the speed networking session.

(Above) The group discusses day-to-day HR challenges within their respective banks.

(Left) Bankers discuss the various methods they use to recruit new talent to their institutions.

Click here to see more photos from the HR Conference!

Speaker Becky McCrary interacts with attendees during the speed networking session.

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The Arkansas Banker | July 2017

Quinten Whiteside and Rodney Moore tell attendees about cybersecurity threats in the workplace.

Abtin Mehdizadegan speaks on the injunction against the DOL’s new overtime rules.

What You Need to Know About the Grandparent Scam According to the Federal Trade Commission, the agency received more than 400,000 complaints in 2016 from consumers reporting they were victims of impersonation scams. One of the most common is called the “Grandparent Scam,” which uses impersonation tactics to deliberately target and exploit older Americans.

To commit this crime, fraudsters call claiming to be a family member in serious trouble and in need of money immediately. The scammer might say he is stranded or has been mugged and call in the middle of the night to add to the urgency and confusion. Once the money is sent, the victim later finds out that it wasn’t their grandchild they were helping, it was a criminal.

“Fraudsters are preying on seniors at an alarming rate,” said Corey Carlisle,

executive director of the American Bankers Association Foundation. “Before you make a move that might cost you thousands, it’s extremely important that you confirm who you’re actually speaking with before you act, because chances are it’s not your grandson Johnny you’re on the phone with, it’s a scammer.”

The AmBA Foundation is offering four tips to help seniors avoid being victims of the grandparent scam: Confirm the caller. Fraudsters are using social networking sites to gain the personal information of friends and relatives to carry out their crimes. Verify the caller by calling them back on a known number or consult a trusted family member before acting on any request.

Don’t be afraid to ask questions.

Fraudsters want to execute their crimes quickly. In this type of scam, they count

on fear and your concern for your loved one to make you act before you think. The more questions you ask the more inclined they will be to ditch the scam if they suspect you’re on to them.

Never give personal information to anyone over the phone unless you initiated the call and the other party is trusted.

Please turn to page 24

experience perspective

BKD National Financial Services Group

What are you reflecting on? Improved financial reporting? Regulatory compliance? BKD conducts compliance audits for banks across the country and can help you identify areas that need additional attention. Experience how our expertise can give your institution a better vantage point.

Gary Edwards // Partner // gedwards@bkd.com Ryan Underwood // Managing Partner // runderwood@bkd.com 501.372.1040 // bkd.com

July 2017 | The Arkansas Banker

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INDUSTRY NEWS Stock Transfer Requirement Amended

By Richard S. Plotkin Editor, The Bankers Advocate

State-chartered banks and bank holding companies whose shares are traded on a securities exchange no longer are required to report transfers of stock to the bank commissioner, under a law passed in the General Assembly.

Act 548 amends Arkansas Code § 23-48-316 (b) (3). The amendment exempts Arkansas state-chartered banks or Arkansas bank holding companies that file reports under sections 13 or 15 (d) of the Securities Exchange Act of 1934 from a requirement to report transfers of shares annually.

Also exempted from this requirement, under the amendment, are Arkansas state-chartered banks and holding companies that have a class of equity securities registered under sections 12 (b) or 12 (g) of the 1934 securities act.

All other Arkansas state-chartered banks and holding companies are required to promptly report transfers of shares to the commissioner, under Arkansas Code § 23-48-316 (b) (1).

Act 548 was introduced as Senate Bill 422 by Jason Rapert, who represents District 35, which includes parts of Faulkner and Perry counties.

Rapert

The law amends several other sections of the Arkansas Banking Code of 1997, including:

§ 23-47-102 (c). A provision has been added that permits an Arkansas statechartered bank to repurchase shares of its capital stock if the bank is required to file reports under sections 13 or 15 (d) of the Securities Exchange Act of 1934 or has a class of equity securities registered under sections 12 (b) or 12 (g) of the 1934 securities act. The terms of such a repurchase or repurchase program must be approved by the bank commissioner. § 23-48-307 (c). While an amendment to the articles of incorporation of an Arkansas state-chartered bank continues to require an affirmative vote of a simple majority of shareholders, the statute now qualifies, “unless a greater percentage of votes is required in the articles of incorporation.”

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§ 23-48-308. A subsection has been added that specifies that approval by the commissioner of a proposed amendment to a bank’s articles of incorporation does not apply to the issuance of preferred stock that is authorized by the articles and approved by the commissioner. § 23-48-315. The amendment adds “other subordinated indebtedness” to capital notes, both of which can be issued by an Arkansas state-chartered bank with the written consent of the commissioner. Under the Act, other subordinated indebtedness may be retired no later than 30 years after being issued. Capital notes may be retired no later than 20 years after issuance. In addition, the amendment permits a bank – subject to commissioner approval – to extend the period for retirement or redemption of other subordinated indebtedness that is callable in a period less than 30 years after issuance.

The Senate passed the bill on March 1, 2017, by a vote of 33 to 0, with one member not voting and another excused. The bill passed the House on March 14, 2017, by a vote of 86 to 0.

Fourteen representatives did not vote.

Act 548 contains an emergency clause, making it effective upon being signed by Governor Asa Hutchinson on March 21, 2017.

Grandparent Scam

Continued from page 23

Never rush into a financial decision and trust your instincts. Don’t be fooled—if something doesn’t feel right, it may not be right. Feel free to say no and get more information before you send money to someone.

The Consumer Financial Protection Bureau reports that elder financial exploitation is the most popular form of abuse perpetuated against older Americans, with annual losses ranging from $2.9 billion to $36.48 billion. AmBA has joined the fight against elder financial abuse with its Safe Banking for Seniors initiative, which empowers older Americans and communities with tools and resources to help them guard against such offenses.

For more information on elder financial abuse visit aba.com/seniors.

Separately, the General Assembly approved a bill to authorize corporations – including banks – to provide annual financial statements to shareholders by electronic mail under certain circumstances.

ARKANSAS BANK DEPARTMENT

Act 553 was introduced by Rapert as Senate Bill 421. The legislation adds a subsection, § 4-27-1620 (d) (1), to the Business Corporation Act of 1987 permitting a corporation to furnish a shareholder annual financial statements by electronic mail or facsimile transmission if the shareholder has provided the corporation an “appropriate address.”

Branch Bank Application An application filed by First Community Bank, Batesville, Independence County, Arkansas, to establish a branch banking facility at 11 Prospect Court, Cabot, Lonoke County, Arkansas, has been approved. May 30, 2017.

The Senate passed the bill on March 1, 2017, by a vote of 34 to 0, with one member excused.

The bill passed the House on March 14, 2017, by a vote of 87 to 0. Thirteen representatives did not vote.

Senate Bill 421 was signed by Governor Hutchinson on March 21, 2017.

APPLICATIONS & APPROVALS

MEMBER NEWS

Centennial Bank Teams Up with A-State on Welcome Center In late June, Deana Osment, Centennial Bank’s NEA Division President, announced the collaboration between Arkansas State University and Centennial Bank on the construction of a new Welcome Center and bank branch on the Arkansas State University-Jonesboro campus.

“Arkansas State University is vitally important to our community and region.

We are excited to further our support of Arkansas State by expanding our presence on the A-State Jonesboro campus,” she said.

The 3,833 square foot Welcome Center will house a visitor’s center as well as a Centennial Bank branch and will become the new entrance to campus.

Osment continued, “This partnership with Arkansas State University will allow Centennial Bank to provide convenient and innovative banking services to the students, faculty and staff at A-State, and will allow first-time visitors to experience the essence of Arkansas State in a friendly, modern space.”

“We are so appreciative of Centennial Bank for their continued support of Arkansas State University”, said Arkansas State University System President Dr. Charles L. Welch. “This public-private

A large crowd gathers before the A-State Welcome Center Groundbreaking Ceremony, held Tuesday, June 27.

partnership is another example of our commitment to a strong working relationship with the communities we serve. This Welcome Center will benefit thousands of future students and their families, and we are so thankful for Centennial Bank’s contribution to this exciting new facility on our beautiful campus.”

Dr. Rick Stripling, Vice Chancellor for Student Affairs stated, “We average over

6,000 scheduled campus visits per year, and the Welcome Center will serve as our launching pad for touring our beautiful campus. The Office of Recruitment will have a full-time person coordinating the campus experience from this center. We will have a new front door to Arkansas State. This will allow visitors to drive through the heart of campus life to ultimately reach the easily accessed Welcome Center.”

Rick Terry, Baldwin-Shell; Stacy Green, NEA Board of Director; Bobby McDaniel, NEA Board of Director; Mike Langford, NEA Board of Director; Stacy Crawford, A-State Board of Trustee; Charles Luter, NEA Board of Director; Dr. Doug Whitlock, Interim Chancellor, A-State-Jonesboro Campus; Niel Crowson, A-State Board of Trustee; Deana Osment, Division President-NEA; and Davy Carter, Regional President-North Arkansas.

Members of the Board of Directors and Board of Trustees throw their Wolves Up!

July 2017 | The Arkansas Banker

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BANKER NEWS & MOVES ATTWOOD NAMED EVP, DIRECTOR OF BANKING FBT Bank & Mortgage President and CEO Jim Hulse announced that Craig Attwood has been named Executive Vice President and Director of Banking for Jefferson County. Attwood now leads strategic development and banking center operations of both the Watson Chapel and White Hall locations.

“As a veteran of more than thirty years in Pine Bluff’s banking industry and a respected member of this community, Craig will be a strong asset to the FBT team,” Hulse said. “He is the right choice to lead this division as we build upon our efforts to expand market share in Jefferson County.”

“I am thrilled to join FBT and look forward to adding value for my clients and the bank in the years to come,” Attwood said.

Jefferson County is home. I love the people and culture. And because FBT is a committed partner to the greater Jefferson County community, it was a natural fit.”

AHLEN NAMED CHIEF COUNSEL, HENRY & PATEL PROMOTED John W. Ahlen IV, the bank chief counsel of the Arkansas State Bank Department, has been named Deputy Bank Commissioner.

Ahlen will assume the position effective July 2, 2017, upon the retirement effective June 30 of Luther Guinn.

As deputy bank commissioner, Ahlen will oversee one of

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two commercial examination groups based in Little Rock; the commercial examination group in Jonesboro; and the trust examination group. In addition, Ahlen will be responsible for the training and information technology areas of the Bank Department.

Ahlen will retain the position as bank chief counsel. Ahlen joined the Bank Department in that position in August 2016. He had served as general counsel for the Arkansas Auditor of State, joining that office in February 2015. Prior to that, beginning in 2002, Ahlen was assistant parliamentarian and legislative analyst for the Arkansas House of Representatives.

Ahlen received his Juris Doctor from the William H. Bowen School of Law at the University of Arkansas at Little Rock in 2014. He received a Bachelor of Arts in history, with an emphasis on politics, from Hendrix College in 1998.

In other staff moves, the Bank Department has: Assigned Bob M. Henry as manager of the Department’s newly formed “large bank” examination group. Henry was hired by the Department as a commercial examiner in May 1992 and advanced to become a certified bank senior examiner. Henry was promoted to bank examiner manager in February 2013, at which time he concentrated on special projects, including assisting commercial groups on examinations of large and “problem” banks. In January 2015, Henry was assigned as manager of one of the commercial examination groups based in Little Rock. Henry received a bachelor’s degree in business administration in 1991 at Southern Arkansas University

The Arkansas Banker | July 2017

in Magnolia. His emphasis was in finance and accounting.

In 2012, Henry earned his credential as a Certified Fraud Examiner from the Association of Certified Fraud Examiners.

Promoted Dharmin H. Patel to Henry’s position as manager of one of the commercial examination groups in Little Rock. Patel was hired as a commercial examiner in June 2005 and has advanced through increasing areas of responsibility to become a certified bank senior examiner.

He received a bachelor’s degree in finance and banking, with an emphasis on investments, from the University of Arkansas in June 2005. Patel is a Certified Fraud Examiner.

The “large bank” examination group has been developed in response to the growth of several state-chartered banks.

As of March 31, 2017, five of these banks reported assets in excess of $5 billion.

LANCE CLARK JOINS SIGNATURE BANK Signature Bank of Arkansas has announced the addition of Lance D. Clark to its Bentonville team as a VP Private Banking Officer.

Clark has over 25 years of banking experience and has graduated from multiple lending schools throughout his career. He is also a graduate of Missouri State University.

He likes to hunt, fish, play golf and hit the bike trails in his free time. Lance has been married to his wife for 25 years and they have three boys.

FIRST FINANCIAL BANK EXPANDS TO LITTLE ROCK, JOHNSON NAMED MARKET PRESIDENT First Financial Bank of El Dorado announced the expansion of its retail banking footprint, with the introduction of its first full-service bank branch in the Little Rock market. The branch is located on the first floor of the Prospect Building at 1501 N. University.

First Financial Bank has operated a mortgage division in Little Rock since 1983. A grand opening celebration for the new location will be held soon.

Chris Johnson has been named Market President in Little Rock. He is a Little Rock native who has more than 13 years of experience in the banking industry, nine of which were in executive leadership roles. Johnson previously was a Senior Vice President of Lending for Relyance Bank in Little Rock and has served as Vice President of Commercial Lending and the private client group for First Security Bank and Centennial Bank, respectively.

Johnson earned a bachelor’s degree in international relations/ political science from Rhodes College and completed the Graduate School of Banking at Louisiana State University.

He is a graduate of Leadership of Greater Little Rock, Class XXXI, a program of the Little Rock Regional Chamber of Commerce; board member of ACCESS Group, Inc. and chairman of the Monsignor Tribou Foundation.

Johnson and his wife Annabel are the proud parents of Elliott and Charlie, who attend Forest Park Elementary. They attend Second Presbyterian Church, where Chris is a Deacon and Annabel teaches Sunday school.

INDEX OF ADVERTISEMENTS BKD, LLP

www.bkd.com

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Graduate School of Banking 11 www.gsb.org

FIRST COMMUNITY BANK LENDING CENTER OPENS IN LITTLE ROCK First Community Bank has opened a lending center at 4900 Kavanaugh Boulevard in Little Rock according to Dale Cole, Chairman and chief executive officer of the organization.

“We purchased the building at the corner of Kavanaugh and Cantrell which was previously an Allied Bank branch,” said Cole. “We have anxiously awaited an opportunity to enter the Little Rock market.”

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.

René Julian, former senior vice president for First National Bankers Bank in Little Rock, is serving in the capacity of community president for the Little Rock region. Julian brings a wealth of experience to our organization as he has worked in the banking and investments field for more than 36 years. He has developed relationships statewide as a result of his work with the financial industry.

Julian graduated from Batesville High School in 1974. He attended college in Conway at Hendrix College where he earned a degree in Business and Economics. He is also a graduate of Southwestern Graduate School of Banking.

Julian is passionate about continuing his career at a community bank. “I have always respected and admired First Community Bank from afar. In my opinion, they exemplify community banking. I have seen how they live up to their motto to put community first in every community they serve. It gives me great pleasure to become a part of such a dynamic organization.”

The Arkansas

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

Wendy Halpin will serve as a home loan originator. Halpin will work with home loan borrowers to secure secondary market fixed rate loans for home purchases and refinances. First Community offers FHA, VA, conventional and rural housing loans in addition to other mortgage products.

“Halpin’s 20 years of experience and comprehensive knowledge in the mortgage industry and her friendly, customer-focused attitude make her an excellent choice for our lending team,” Julian said.

Veteran banker Eddie Ramsey rounds out the lending team and brings 25 years of banking experience to the table. Ramsey graduated in 1992 from Ouachita Baptist University with a double major in Business Administration and Economics.

He is a former board member of the Saline County Habitat for Humanity, Kiwanis and Benton Optimist Club.

“We have our lending team in place, and we are ready to start making a difference in Little Rock. We all believe in what we are doing and have a passion for making good things happen in the communities we serve. I’m honored to have the opportunity to serve as community president, and I can’t wait to see what the future holds for this market,” Julian added.

“I feel like we have found three rainmakers who will represent our bank well and hit the ground running in the Little Rock market,” said Cole. “Our philosophy is about staying true to who we are and doing the right thing for our customers and the communities we serve. If we continue do these things, new doors will continue to open.”

Give your employees the recognition they deserve!

Submit Banker News & Moves to traci.logsdon@arkbankers.org.

July 2017 | The Arkansas Banker

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Marketing + Top-Notch Trade ad Show. u k + Motivational & Industry Speakers.

E O OM ME Conference. = One AWESOME

Be watching for details on the 2017 Mega Conference, October 23-25. www.arkbankers.org/Mega.aspx

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The Arkansas Banker | July 2017