The Arkansas Banker June 2017

Scams Targeting Bank Customers

Landscape of the Banking Industry

The Arkansas

Banker

Bank Management Seminar returns to Branson Volume C, No. 6 | June 2017 June 2017 | The Arkansas Banker

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The Banker | June ©2017 Arkansas First Tennessee Bank National Association. Member FDIC. 2017

The Arkansas

Banker Volume C, No. 6 | June 2017

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

CONTENTS

EDITORIAL OFFICE

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

COLUMNS

4

President’s Column

6

Emerging Leaders Update

Bill Holmes

Blake Fletcher

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.

DEPARTMENTS

20 Member News 21 Banker News & Moves 23 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.

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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.

MAGAZINE RATES

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

By David M. Graf

10 Bank Management Seminar

FEATURES

12 The Landscape of

the Banking Industry

By Jonathan Hightower

16 Safe Deposit Burglary

Mirrors “The Bank Job” Movie

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.

ESOP Can Be a “Win-Win-Win” Situation for Closely Held Banks

By David P. McGuinn

18 FDIC Highlights 10 Scams

Targeting Bank Customers

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

June 2015 2017 | The Arkansas Banker

3

PRESIDENT’S COLUMN It’s About Time...

Finally, some movement. Ten years after the financial crisis we are getting some traction on the reg reforms we have been begging for.

Pardon my French, but it is about damn time.

On June 12, the Treasury Department issued a 150-page report making dozens of recommendations for how Congress and regulatory agencies can streamline bank regulation in a way that will promote small business lending, mortgage lending and economic growth. Coupled with the passage in the House of the CHOICE ACT recently, and the start of hearings in the Senate Banking Committee, we actually have some momentum.

Christmas in July!

The report was in response to President Trump’s executive order outlining core principles of financial regulation and calling for a comprehensive review of the regulatory structure.

As ABA has long urged, the report called for significant tailoring of regulatory requirements.

The report noted that economic growth and loan growth have been historically depressed during the current recovery, which Treasury attributed in part to the volume and structure of current regulations. When you read the Treasury’s report

you should notice that the word “tailoring” appears on every page of the report. Tailoring is finally getting everyone’s attention and support.

We need to speed up economic recovery, and banks are a key player.

While some of Treasury’s recommendations require congressional action, Sec. Mnuchin estimated that 70 to 80 percent can be put into motion by regulators immediately through their independent rulemaking authority.

The report also highlighted numerous mortgage rules that the CFPB could address on its own. We all know that it will probably be more like a year before we see concrete results. A senior member of the Administration has supposedly tossed out a probable timeline for reg relief as follows: 2017, get the changes written and the implementation plans established; 2018, review and test the new rules for unintended consequences and actual fixes; 2019, rules and relief take effect.

In the report the Treasury detailed the following conclusions:

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

Appraisal relief for banks in rural areas Community banks are critical to serving local communities and small businesses

BARRY JACKSON

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

KAMI T. 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

4

PRESIDENT & CEO BILL HOLMES

The TheArkansas ArkansasBanker Banker || June June2017 2017

ADMINISTRATIVE ASSISTANT 501.978.3607 | brenda.scarbrough@arkbankers.org

Regulatory burden relief for community banks is critical Improving our market liquidity is critical for a growing U.S. economy The CFPB must be reformed, (“A significant restructuring in the authority and execution of regulatory responsibilities by the CFPB is necessary. The CFPB was created to pursue an important mission, but its unaccountable structure and unduly broad regulatory powers have led to predictable regulatory abuses and excesses.”)

GET SOCIAL WITH THE ABA.

and my favorite, Bank regulations need to be tailored, more efficient and more effective The report goes into much more depth on issues close to all of our banks. It details the tailoring of bank capital and liquidity rules, regulatory structure, leveraged lending, the Volker Rule and small business lending. There is a lot to read and review. You may review a full report at https://www.treasury.gov/press-center/ press-releases/Pages/sm0106.aspx There will be a need to fill the open positions in the various regulatory bodies before we can see the beginnings of implementations of these long-awaited, and long-needed changes and enhancements. What is clear, we have finally begun to rethink the terribly burdensome reaction to the financial crisis. Now, wouldn’t it be fantastic to see all of our regulators and Congress work in unison to set up the same policies and procedures, tailored to the size and scope of the banks they serve? I can almost hear the sleigh bells.

ABA EXECUTIVE COMMITTEE

Follow the ABA on Twitter @ArkBankers Like us on Facebook

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

CATHY OWEN | CHAIRMAN-ELECT Eagle Bank, Little Rock

Simmons Bank, El Dorado

JUDY LAWTON | TREASURER

SEAN WILLIAMS | PAST CHAIRMAN

BILL HOLMES | PRESIDENT/CEO

Heartland Bank, Little Rock

First National Bank of Wynne, Wynne

ABA BOARD OF DIRECTORS

JOHNNY ADAMS | GROUP 2

DAVID DOWD | GROUP 1

ROB ROBINSON IV | VICE CHAIRMAN

Arkansas Bankers Association, Little Rock

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 Citizens Bank, Batesville

TROY DUKE | GROUP 5 Gateway Bank, Rison

SCOTT HANCOCK | GROUP 3 Centennial Bank, Fayetteville

LORI ROSS | GROUP 4 Citizens Bank, Arkadelphia

JEFF BRECKLEIN | GROUP 1

NATHAN GAIRHAN | GROUP 3

DARWIN HENDRIX | GROUP 4

JASON TENNANT | GROUP 3

Integrity First Bank, Jonesboro

United Bank, Springdale

Bank of Delight, Delight

Cornerstone Bank, Eureka Springs

JIM CARGILL | GROUP 2

DON GIBSON | GROUP 3

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

First National Bank of Crossett, Crossett

Farmers Bank & Trust Co., Magnolia

Regions Bank, Little Rock

Bank of America, Little Rock

June 2017 | The Arkansas Banker

5

EMERGING LEADERS UPDATE The Power of Education I always think about my time at the Southwest Graduate School of Banking at SMU during this time of year. While I was there, a group text message started between myself and several classmates. We started talking about all of the incredible experiences we had both in and out of the classroom. The bankers on this group text were from all over the place, including Scottsdale, AZ; Dallas, TX; College Station, TX, and Jonesboro, AR. After not having seen some of these classmates since we graduated back in 2006, I realized again just the power of education.

I hope it goes without saying that the education that is available at a graduate school of banking is second to none. The exceptional quality of bankers, speakers, educators, and leaders the schools provide extends every opportunity for bankers to expand their mind in a wide range of topics. Participating in a Bank Simulation (BankSim) for me was a highlight of the educational process, and was a great tool to help truly understand asset/liability management.

Over the course of the three years of school, we also heard some incredible speakers including Coach Herman Boone (the coach actor Denzel Washington portrayed in the movie Remember the Titans), Jimmy Morris (the Major League Baseball pitcher actor Dennis Quaid portrayed in the movie The Rookie), and Frank Abagnale, Jr. (portrayed by actor Leonardo DiCaprio in

the movie Catch Me If You Can). All of these speakers provided amazing and inspirational lessons for all of us to take home.

But, there is so much more to graduate banking school than just the educational and academic aspect. As that group text with my former classmates taught me, the schools also provide an enormous networking opportunity that will last throughout our professional careers. As I look back over the ten years since I have graduated from SWGSB, I realized how many times I have reached out to different members of my class in many other states to pick their brains on different banking situations. The relationships developed at the graduate banking school could be even more powerful than the academic portion.

The Arkansas Bankers Association offers some amazing scholarship opportunities to help financial institutions and bankers with the cost of these graduate schools. You can visit the Arkansas Bankers Association website (www. arkbankers.org) to view the different schools and scholarships that are available each year. The schools include the Graduate Banking School of Banking at the University of Wisconsin-Madison, ABA Stonier Graduate School of Banking at Pennsylvania, Graduate School of Banking at Colorado-Boulder, Graduate School of Banking at Louisiana State University, and Southwest Graduate School of Banking Foundation at SMU.

ELS PRESIDENT BLAKE FLETCHER SVP / Senior Lending Officer Stone Bank Little Rock

Most of these schools take place in the early summer or in the spring, so the time is now to start planning with your bank management and families to attend one of these in 2018. The opportunity to grow in banking through the power of education will last through your entire career‌ and you might have a lot of fun in the process!

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 | June 2017 2017

ABA Live Events ABA Professional Development

Live Events...

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

JULY 2017 25

| Implementing the Revised HDMA Rules

Crowne Plaza, Little Rock Who Should Attend: Loan Officers, Compliance Officers, Loan Processors and Clerks, and Auditors

26-27 | Real Estate Lending Compliance

Crowne Plaza, Little Rock Who Should Attend: Compliance Officers, Loan Officers, Loan Processors, and Auditors

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

| Loan Review

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

17-18 | IRA School

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

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

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

June 2017 | The Arkansas Banker

7

ESOP Can Be a “Win-Win-Win” Situation for Closely Held Banks An employee stock ownership plan (“ESOP”) is a powerful and effective tool that can be used by a closely held bank to address many different issues within the bank. An ESOP when used in the right circumstances can provide the following advantages:

ABOUT THE AUTHOR

David M. Graf is a partner at Friday Eldredge & Clark, LLP. Dave concentrates his practice on the design, implementation, maintenance and administration of tax-qualified retirement plans (including defined benefit pension plans, profit sharing plans, 401(k) plans and ESOPs), nonqualified deferred compensation plans, and welfare benefit plans for financial institutions, regular business organizations, professional corporations, and governmental and non-profit organizations.

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1. Shareholder Succession. An ESOP can be used as a tool for shareholder succession planning and liquidity. One of the benefits under such a scenario is being able to utilize the ESOP as part of a “Section 1042 transaction.” A 1042 transaction allows a selling shareholder (or group of selling shareholders) to completely defer (and possibly eliminate) income taxes on the sale of bank stock to the ESOP. For Section 1042 treatment to apply, the bank must among other requirements be a “C-Corporation” and the ESOP after the sale must own 30 percent or more of the bank’s Stock.

2. Employee Benefit. Banks often times utilize an ESOP as part of an employee’s overall benefits package. Typically, the ESOP supplements an existing retirement plan such as a 401(k) plan to provide a generous retirement plan package for employees. Employees own shares of stock in the bank as held through the ESOP which gives them an “ownership interest” and sense of pride in the bank.

3. Tax Benefits to the Bank. Generally, an ESOP is structured as a “leveraged

The Arkansas Banker | June 2017

transaction” in which a loan is obtained by the ESOP (and guaranteed by the bank) to purchase bank stock. To pay off the loan, the bank makes payments (typically on an annual basis) to the ESOP to pay down the loan of which said payments are tax deductible at the corporate level. Ordinarily payments of principal on a note by a corporation are not tax deductible. Said tax deduction would not be available if a loan is utilized as to the sale of the stock with a nonESOP buyer or as part of a stand-alone corporate redemption. There are also additional tax benefits at the corporate level if the bank is an S corporation.

Banks that are good ESOP candidates generally have: 1.

2.

3.

4.

A solid earnings performance.

Stable cash flow.

Good senior management.

Payroll sufficient to support the contributions to the ESOP as to a leveraged transaction.

To see if an ESOP is right for your bank, a feasibility study should be performed to confirm that the bank is in fact a good ESOP candidate.

For more information on ESOPs or to discuss how an ESOP might be beneficial for your bank, please contact Dave Graf at Friday, Eldredge & Clark, LLP.

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!

MONDAY, JULY 10

TUESDAY, JULY 18

WEDNESDAY, JULY 26

Loan Structure, Documentation and Compliance 1:30 p.m. – 3:30 p.m.

Flood Insurance for Canceled Communities 10:00 a.m. – 12:00 p.m.

Advanced Commercial Loan Documentation 1:30 p.m. – 3:30 p.m.

TUESDAY, JULY 11

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

Lending to Municipalities 10:00 a.m. – 12:00 p.m.

WEDNESDAY, JULY 19

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

New 2018 Residential Loan Application 1:30 p.m. – 3:30 p.m.

Dealing with Subpoenas, Summonses, Garnishments, Tax Levies, Etc. 10:00 a.m. – 12:00 p.m.

WEDNESDAY, JULY 12

Opening Minor Accounts 1:30 p.m. – 3:30 p.m.

Annual Compliance Training for Commercial Lenders 10:00 a.m. – 12:00 p.m.

THURSDAY, JULY 13

Corporate Account Takeover: Latest Cases 1:30 p.m. – 3:30 p.m.

Small Creditor Revisions, ATR & QM Requirements 10:00 a.m. – 12:00 p.m.

FRIDAY, JULY 14

Vital Check and Deposit Issues: A Deeper Dive 10:00 a.m. – 12:00 p.m.

SSN, EINs, and ITINs: Understanding our Job as a Withholding Agent 1:30 p.m. – 3:30 p.m.

Introduction to Compliance Risk Assessments 10:00 a.m. – 12:00 p.m.

THURSDAY, JULY 20

ATM Cashout Scam 10:00 a.m. – 12:00 p.m.

BSA Series : 7 Core Components of an AML Program 1:30 p.m. – 3:30 p.m.

FRIDAY, JULY 21

ACH Origination 10:00 a.m. – 12:00 p.m.

MONDAY, JULY 24

CECL: How to Calculate and Maintain a Proper Allowance 1:30 p.m. – 3:30 p.m.

TUESDAY, JULY 25

TRID Checkup: Areas of Concern and Uncertainty 10:00 a.m. – 12:00 p.m.

THURSDAY, JULY 27

Audit Report Writing 10:00 a.m. – 12:00 p.m.

FRIDAY, JULY 28

Increasing Fee Income Without Raising Fees 10:00 a.m. – 11:00 a.m.

WEDNESDAY, AUGUST 2

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

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

MONDAY, AUGUST 7

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

WEDNESDAY, AUGUST 9

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

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

June 2017 | The Arkansas Banker

9

BANK MANAGEMENT

Click here to learn more about Bank Management Seminar!

SEMINAR

AUGUST 10-12, 2017

Hilton Branson Convention Center Branson, Missouri #BMS2017

Standing at 150 feet tall, the Branson Ferris Wheel was formerly Chicago’s iconic Navy Pier Ferris Wheel, ridden by nearly 17 million people from 1995 to 2015.

The structure was moved to Branson in 2016.

10

The Arkansas Banker | June 2017

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.

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!

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 reformed-convict Chuck Gallagher and M&A strategist Jonathan Hightower.

CAPTAIN BRIAN UDELL

SPEAKERS

MIX BUSINESS & PLEASURE AT BMS 2017

Captain Brian Udell holds the record for surviving the highest speed ejection from a U.S. Fighter Aircraft at nearly 800 miles per hour. His determination, perseverance, faith, and sheer will to survive is unparalleled.

CHUCK GALLAGHER

Every choice has a consequence.

In 1987, Chuck Gallagher made some bad choices at the height of his career and went from wearing a business suit to an orange jump suit some years later.

GOLF

Chuck has experienced firsthand how easy it is to move from ethical to unethical. Having rebuilt his life, the lessons he learned allow him to share a unique perspective.

JONATHAN HIGHTOWER

BUFFALO RIDGE GOLF CLUB FRIDAY, AUGUST 11, 2017 | 1:00 P.M. Join in a Four Man Scramble with bankers from around the state at Buffalo Ridge Golf Club.

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

• Tee time is 1:00 p.m.

• 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 or at registration on Wednesday, two for $30! All proceeds benefit the ABA Political Action Committees.

Jonathan Hightower’s legal practice focuses on representing banks in a wide range of strategic matters, including merger and acquisition transactions, capital raising, and significant regulatory and governance matters. His experience includes representation of banks of all sizes across the country, including several matters involving Arkansas banks.

June 2017 | The Arkansas Banker

11

the Landscape of the Banking Industry

ABOUT THE AUTHOR

Jonathan Hightower is a partner in the national financial services practice at the law firm Bryan Cave LLP. His experience includes representation of banks of all sizes across the country, including several matters involving Arkansas banks.

Jonathan also co-hosts The Bank Account, a podcast series focusing on issues of interest to the banking industry.

Hear more from Jonathan Hightower at BMS 2017 in Branson!

From 2006 through 2016, the number of insured depository institutions in the United States has fallen from 8,691 charters to 5,922, a decline of 2,769 charters or a 32% loss.

This headline loss number is worth talking about, but is neither news nor new. The loss of charters is a frequent source of discussions around bank board rooms, stories from trade press, and chatter at banking conferences.

The number of insured charters has also been in steady decline, with at least 33 years of declining numbers.

However, a deeper dive into the numbers reveals some unexpected trends below the headline 32% loss of charters.

STATE OF BANKING LANDSCAPE AS OF DECEMBER 31, 2016

As of December 31, 2016, we had 5,922 institutions with $16.9 trillion in total assets.

The four largest depository institutions by asset size (JPMorgan, Wells Fargo, Bank of America and Citi) hold $6.84 trillion in assets, or 40.5% of the industry’s assets.

There are 111 additional banks that have assets greater than $10 billion, holding $6.98 trillion. That’s 1.9% of the total charters, holding 81.9% of the aggregate assets.

We then have 627 institutions with between $1 and $10 billion in assets. This group, which represents 10.6% of the charters, holds $1.79 trillion, or 10.6% of the industry’s assets.

87.5% of the bank charters in the United States are institutions with less than $1 billion

12

The Arkansas Banker | June 2017

in assets, with 663 institutions between $500 million and $1 billion and 4,517 institutions with less than $500 million in assets. The 663 institutions hold $470 billion in assets, while the smallest 4,517 banks hold an aggregate of 800 billion in assets, collectively representing less than 7.5% of the industry’s assets.

COMPARING WITH 2006

At December 31, 2006, we had 8,691 insured institutions, with $11.9 trillion in assets.

That’s a loss of approximately 2,800 charters in 10 years, or about 280 per year (and pretty close to one per work day). This is a 32% decline in the number of charters nationwide.

That matches almost exactly the 32% decline we previously identified as having left Georgia between 2005 and 2015 and the 30% decline in banks with branches in metropolitan Atlanta.

The overall allocations are similar, although slightly less concentrated. The four largest banks, with Wachovia preceding Wells Fargo, held $3.91 trillion, or 23.2% of the industry’s $11.9 trillion in assets. An additional 115 institutions with assets over $10 billion contributed another $5.07 trillion in assets.

As such, institutions over $10 billion in assets held 53.2% of the industry’s assets (compared to 81.9% in 2016).

Smaller banks still dominated with the landscape, with 92.5% of the institutions holding less than $1 billion in assets, and 84.8% holding less than $500 million.

As a whole, the industry grew by almost $5 trillion in total assets, with banks over $10 billion representing $4.8 trillion of that increase.

A LOSS OF SMALLER BANKS

The overall 32% decline in number of charters was definitely not evenly distributed amongst all banks.

This group is probably the most affected by the dearth of de novo charters since 2010.

Mathematically, the group cannot maintain this rate of loss; with 1,542 charters remaining, it can’t lose another 2,091 charters in the next ten year period.

However, asset size shouldn’t be the The number of banks larger than $1 only factor in predicting whether an billion increased slightly from 2006 individual charter disappeared in the though 2015, growing from 652 to 742, a last ten years. The FDIC also separately 14% increase! published the number of charters that have elected Subchapter S tax treatment.

Similarly, the number of banks between Given the limitations on shareholders $500 million and $1 billion remained for Subchapter S institutions, these virtually unchanged. institutions are generally 2006 2016 Change (#) Change (%) smaller > $250 Billion 6 9 3 50% community $50-$250 Billion 26 32 6 23% banks.

Subchapter S $10-$50 Billion 87 74 (13) -15% institutions did $5-$10 Billion 69 96 27 39% decline, from $1-$5 Billion 464 531 67 14% 2,357 to 2,006, $500 Million -$1 Billion 666 663 (3) 0% but that’s only a 15% decline. $250-$500 Million 1,226 1,141 (85) -7% $100-$250 Million

2,514

1,834

(680)

-27%

<$100 Million

3,633

1,542

(2,091)

-58%

Total

8,691

5,922

(2,769)

Accordingly, the entire 32% loss in overall charters, or nearly 2,800 charters, were lost in banks with less than $500 million in assets. Even amongst this group, the losses in charters were strongly correlated with asset size, with the smallest banks experiencing the sharpest declines.

Banks with between $250 million and $500 million in total assets declined by 85 charters, representing a 7% decline.

Banks with between $100 million and $250 million in total assets declined by 680 charters, representing a 27% decline.

Banks with less than $100 million declined by 2,091 charters, representing a 58% decline. A few further notes on this: There are still 1,542 banks in the United States with total assets of less than $100 million. That alone is a fairly amazing fact.

Banks smaller than $100 million represented over 75% of the charters lost between 2006 and 2016.

STRUCTURAL CHANGES

One cause of the overall decline in number of charters that doesn’t get much attention, and shouldn’t necessarily be viewed as problematic, is the decline in organizations with multiple charters (or the consolidation of charters into a smaller number).

-32%

If one looks solely at the number of independent banking organizations (so counting a multi-bank holding company as one organization), the number of banking organizations fell from 7,528 organizations in 2006 to 5,522 in 2016. That represents a loss of 2,000 organizations, or a decline of 20%; still a large number, but not nearly as great as the 2,800 charters identified above.

In 2016, 632 charters were held by 241 multi-bank holding companies (representing 2.6 charters each).

In 2006, 1,670 charters were held by 518 multi-bank holding companies (representing 3.2 charters each).

That’s a 62% decline in the number of banking charters in a multi-bank holding

company structure. That means internal reorganizations appear to have potentially accounted for the loss of almost 1,000 charters, potentially representing 37% of the decline over the last 10 years.

WHAT HAS HAPPENED TO OUR SMALL BANKS?

Given the disproportionate losses to the numbers of the smallest banks over the last ten years, we immediately wondered the cause for all of the losses.

Members of our group threw out differing opinions of the dominant factor: the most skeptical cited failures, while others cited merger activity and intra-company consolidations. The most optimistic opinion was that many of the companies were growing out of their size category.

Seeing the large numbers of banks that were lost among banks with less than $100 million in assets and those with between $100 million and $250 million, we realized that time would not allow us to research what happened to each institution that no longer exists.

Therefore, we randomly selected samples (of at least 30, thanks to our statistics professors) of lost institutions from each of these two size categories.

Here’s what we found:

Sample Banks Under $100MM 13% 47% 40% Failed Grew Merged/Consolidated

Sample Banks $100MM to $250MM 18% 59% 23%

Failed Grew Merged/Consolidated

June 2017 | The Arkansas Banker

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As set forth in the chart on Page 15, merger and consolidation activity certainly accounted for a large number of the losses in our sample groups, but it was far from the only contributor, accounting for 50%-60% of the reductions in each category. Growth was the next strongest factor, accounting for 42% of the number of banks leaving the under $100 million category. Given the financial crisis, failures accounted for 18% of the loss of banks in the $100-$250 million category and about 13% in the under $100 million category.

Both the merger/consolidation rate and the failure rate in each sample group were ahead of the merger/consolidation rate and the failure rate for the industry.

merger rate in the $100 million to $250 million size category suggests that some of those banks chose to merge rather than continue to pursue independent growth.

Even with that said, we found the growth of these microbanks to be impressive against the overall growth in the industry.

That conclusion, however, was not enough for our curious minds. Knowing that industry growth is disproportionately influenced by the largest banks in the country, we thought we would compare the growth of our microbanks against a sector that is considered to be a bit more flat in terms of size: the credit union industry.

During the measurement period, credit unions grew at an average rate of 6.2% per year (we’ll save the disparity Sample Banks Sample Banks Under $100 $100-$250 between bank Million Million Industry growth and credit union growth for Ten-Year Merger Rates 47% 59% 29% another day). If Ten-Year Failure Rates 13% 18% 7% we apply that rate of growth as the standard for our microbanks, about 44% HOW GOOD WAS THE GROWTH? of the banks in that category as of the While the table above shows the pace of end of 2006 should have grown out of the mergers and failures compared to the category, meaning that our sample group industry, what should we make of the generally tracked the growth rate of credit growth rate of these small banks? FDICunions. insured institutions grew at an average rate of 3.5% per year from the end of 2006 DOES IT MATTER WHERE YOU ARE? to the end of 2016. We asked ourselves, We next asked each other whether the if these small banks grew at the average location of the bank makes a difference growth rate of the industry, how many in how it was likely to exit its size should have grown out of their size range? category over the last ten years. Our To estimate that number, we applied anecdotal understanding had been that this average industry growth rate to the banks headquartered in Metropolitan entire population of banks in each size Statistical Areas (MSAs) are more likely category as of December 31, 2016. We to have growth opportunities available then calculated the percentage, based to them, while banks in rural areas upon asset size of that date, that would appear to be drying up through mergers, have grown out of its size category with consolidations and failures. The results “normal” ten-year growth; i.e., the average were interesting. growth of the industry.

First, in our sample, 90% of the banks The under $100 million group fared between $100 million and $250 million better growing independently than the in assets were headquartered in MSAs. $100 million to $250 million group With so few rural banks in the sample, did. A part of that can be attributed to further analysis would not have been the larger size range in the larger group helpful. However, in our sample of banks ($150 million versus $100 million), and with assets below $100 million, 49% were we acknowledge that many more banks headquartered in an MSA, a near perfect in the smallest category start closer to balance. These results support the general the top end of the range given that no assumption that the smallest banks are banks have $0 in assets. Finally, the larger more likely to be located in rural areas.

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The Arkansas Banker | June 2017

For our microbanks, MSA-headquartered banks were slightly under-represented in the merged/consolidated and growth categories, which again together constituted 87% or our sample. For the relatively small percentage of failures in the group, however, MSA-headquartered banks constituted 83% of the category, a large over-representation. This made some sense to us. During the crisis we saw a number of failures of very small banks in metro areas. These banks were not, in our view, true community banks but tended to be real estate-concentrated and brokered deposit funded small banks with no true community. In some cases, these were de novo banks that never had a chance to hit their stride, but the lesson remains: it is not a good idea to be a very small bank in a very large market unless you have a true niche to rely on as your community.

WHAT DO WE MAKE OF THIS?

While many conclusions can be drawn from the data presented above, we believe most of them back conventional wisdom. The industry is “consolidating up,” meaning that the smallest of banks are shrinking as a portion of overall bank population. The smallest banks behave much like other microbusinesses throughout the U.S. economy – they are dynamic, constantly changing through growth, merger activity, and sometimes failure. We view these changes as a part of the natural life cycle of all small businesses, and none of these outcomes should be viewed as particularly problematic. Even in the case of failures, this undesired outcome can be viewed as the failure of experimental and entrepreneurial business models, a natural part of capitalism, and the losses to the deposit insurance fund from these failures are so minimal that they do not outweigh the benefit to the industry of allowing banks to try new approaches.

Dealing with banks of all sizes as we do, we see the unique benefits that various bank business models provide to the overall economy. Our largest bank clients are a source of sophisticated global financial solutions to some of the largest and most complicated businesses in the country while also providing widespread banking access to small businesses and consumers. Our smallest clients, on the

other hand, tend to provide financial opportunities to small businesses and consumers that might not otherwise be able to access funding and financial advice from other providers. This benefit is particularly profound in rural communities that do not provide in-person access to a great number of bankers.

Given that we see a unique benefit to the overall economy from these small banks situated in rural communities, we should ask what our policymakers can do to encourage a reversal of the troubling trend toward their extinction. This effort, of course, would necessarily be focused on encouraging new market entrants; i.e., de novo banks, to be established in these communities.

The first step in that process is of course to understand the specific reasons behind the sharp decline in applications for de novo charters over in the recent past. We were encouraged by the House Financial Services Committee’s recent hearing to try to understand the root of that issue. As one might expect, opinions ranged from focusing on the impact of

excessive regulation to the interest rate environment to the overall economy. We view all of those as being contributing factors and acknowledge that only some of them can be effectively influenced by regulators and policymakers. Many would agree, however, that this trend is a problem in need of a solution.

Depending on one’s political leanings, one might view the solution as decreasing regulation, particularly on new or small banks located in rural areas. Others might suggest the opposite approach of

implementing strong and meaningful regulatory assistance for these institutions to ensure that they can afford the heavy burden of compliance and receive assistance rather than enforcement when they make a mistake. No matter the final approach, we hope to see an embrace of the value of a vibrant and diverse banking system that is able to serve the financial needs of all forms of businesses and consumers wherever located and with the delivery channels they desire.

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June 2017 | The Arkansas Banker

15

Safe Deposit Burglary Mirrors “The Bank Job” Movie

On Easter weekend, burglars went on an Easter egg hunt of their own. Four hundred thousand dollars in cash and other valuables were stolen from Sovereign Bank’s Howard Beach branch in Queens, New York. The thieves breeched the heavily fortified safe deposit vault and the bank’s currency lockers and safe deposit boxes within.

WHEN AND HOW IT STARTED

ABOUT THE AUTHOR

David P. McGuinn, President of Safe Deposit Specialists in Houston, is a former banker and often referred to nationwide as the safe deposit GURU. In all 50 states he has trained over 350,000 safe deposit personnel since 1969. For over 40 years, McGuinn’s seminars, manuals, forms and other resources have been considered the accepted standard for the financial industry.

Hear more from David McGuinn at our Safe Deposit Box Issues seminar on September 28!

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The Arkansas Banker | June 2017

Investigating authorities believe that preparations for the burglary began on March 17, St Patrick’s Day. They can pinpoint this date because a window was broken in a store adjoining the bank building. At the time, police attributed the damage to vandalism. In retrospect, they now believe our band of burglars stole a door key and duplicated it. Using this key for easy store access, all outside windows were subsequently covered with heavy shower curtains to conceal the activities that were going on inside.

During the weekend, using a jackhammer, the thieves labored to fashion a large hole in the common cinder block wall between the bank and the store. Once inside the bank lobby, the security system was short circuited and compromised, then they bored through the steel-and-concrete reinforced vault. Using sledgehammers, heavy-duty drills and crowbars, the bank’s currency lockers and safe deposit boxes were accessed.

The burglars left no stone unturned. To destroy forensic evidence, all walls were sprayed with fire extinguisher foam. A sink drain was also plugged and a water faucet was left running, flooding both buildings.

The safe deposit vault contained a total of 400 boxes, but only 100 of these were rented. Ironically, only 50 of these 100 were opened. The other 350 were left untouched. Could this have been an “inside job”? The strong possibility greatly concerned the 50 unfortunate box renters who had many questions about vault security and insurance coverage on their missing box contents.

The scenario you have just read could have been any innovative vault burglary.

However, shortly before this particular robbery, a documentary film entitled “The Bank Job” had been released and widely viewed. It chronicles a very famous London vault robbery. The events in the film closely parallel the modus operandi of our Easter bunny bandits. A coincidence? Probably not.

Sovereign Bank’s security department, the FBI, and the New York Police Department’s Joint Bank Robbery Task Force are all focused on solving this crime.

TEN IMPORTANT PREPARATIONS

Box renters take for granted that the name “safe deposit box” implies that this is a safe place to deposit their valuables. They pay for and expect to have peace of mind, and when their “safe place” proves to be not so safe, they feel deceived, angry, and violated. Usually all of this negativity is directed toward the financial institution.

To avoid damaging publicity, class action lawsuits, hostile consumers, disgruntled box renters, and unlimited potential liability, some specific guidelines must be in place. In addition to an adequate vault security system, there are ten basic disclosure and training practices that should be implemented.

Take the following ten-question test and see if you’re ready for a vault burglary and the embarrassing accusations it will bring.

If you answer “Yes” to these questions, your procedures are adequate and you can avoid this risk. If you answer “No” you may have some hidden liability and exposure that you are not aware of.

Are employees continuously trained to correctly answer questions about vault security and insurance coverage relating to your safe deposit service?

Do you provide your renters with a specific “Questions and Answers” brochure that correctly addresses their concerns about insurance coverage, vault security and other important safe deposit details that must be disclosed?

Is a separate “No Insurance Disclosure” form, printed in at least eight-point bold type, provided to all new box renters and mailed annually when the box rent is due?

Do you display a carefully worded 8-inch x 10-inch, “No Insurance”

sign inside or near the vault area that clearly states that obtaining insurance protection is the renter’s responsibility?

Does your lease agreement have a very clear statement that says: “No insurance coverage is provided by the financial institution to cover a renter’s box contents,” and is a copy of your rules and regulations given to each new renter?

Do you avoid using misleading words, statements or guarantees, such as “burglarproof, bombproof, fireproof or waterproof ” in your safe deposit marketing brochures, statement stuffers, or other promotional items?

If you disclose annual box rental rates and fees in a “Service Fee” brochure or mention that you offer safe deposit services on your web site, do you have a bold disclaimer under this section that says: “No insurance coverage is provided on box contents by FDIC, NCUA or this financial institution”?

Do you avoid displaying FDIC or NCUA signs or logos on or near your vault door, inside the vault, on safe deposit marketing brochures, or on key storage wallets provided to your renters?

If you experience a burglary, are employees trained to be very careful when issuing statements to consumers or the news media about what was stolen, any recovery efforts, or the safety or security of your safe deposit vault operation?

After a burglary, could you prove that the same degree of care, security and recovery efforts were provided to protect and recover your box renter’s valuables, as you would provide for your own financial assets?

IN CONCLUSION

How did you do on the test? If you had any “No” answers and would like to find out how to improve your security, operations and reduce your liability, assistance is available. Simply visit www.sdspec.com to obtain valuable information. You must test your security, marketing, and disclosure procedures now . . .not after a vault burglary or other disaster.

June 2017 | The Arkansas Banker

17

FDIC Highlights 10 Scams Targeting Bank Customers The FDIC often hears from bank customers who believe they may be the victims of financial fraud or theft, and our staff members provide information on where and how to report suspicious activity. To help further, FDIC Consumer News has released the following list of 10 scams that banks and their customers should be aware of, plus key defenses to remember.

GOVERNMENT “IMPOSTER” FRAUDS

These schemes often start with a phone call, a letter, an email, a text message or a fax supposedly from a government agency, requiring an upfront payment or personal financial information, such as Social Security or bank account numbers.

“They might tell you that you owe taxes or fines or that you have an unpaid debt.

They might even threaten you with a lawsuit or arrest if you don’t pay,” said Michael Benardo, manager of the FDIC’s Cyber Fraud and Financial Crimes Section. “Remember that if you provide personal information it can be used to commit fraud or be sold to identity thieves. Also, federal government agencies won’t ask you to send money for prizes or unpaid loans, and they won’t ask you to wire money to pay for anything.”

DEBT COLLECTION SCAMS

Be on the lookout for fraudsters posing as debt collectors or law enforcement officials attempting to collect a debt that you don’t really owe. Red flags include a caller who won’t provide written proof of the debt you supposedly owe or who threatens you with arrest or violence for not paying.

FRAUDULENT JOB OFFERS

Criminals pose online or in classified advertisements as employers or recruiters offering enticing opportunities, such as working from home. But if you’re required to pay money in advance to “help secure the job” or you must provide a great deal of personal financial information for a “background check,” those are red flags of a potential fraud.

Another variation on this scam involves fake offers of part-time jobs as “mystery shoppers,” who are people paid to visit retail locations and then submit confidential reports about the experience.

In an example of the fraudulent version, your job might be to receive a $500 check, go “undercover” to your bank, deposit the check into your account there, and then report back about the service provided.

But you also would be instructed to immediately wire your new “employer” $500 out of your bank account to cover the check you just deposited. Days later, the bank will inform you that the check you deposited is counterfeit and you just lost $500 to thieves. One warning sign of this scam is that the potential employer requires you to have a bank account.

“PHISHING” EMAILS

Scam artists send emails pretending to be from banks, popular merchants or other known entities, and they ask for personal information such as bank account numbers, Social Security numbers, dates of birth and other valuable details. The emails usually look legitimate because they include graphics copied from authentic websites and messages that appear valid.

“We have also seen emails with links to fake websites that are exact copies of real websites for FDIC-insured banks, except the web addresses are slightly different than the real ones,” said Doreen Eberley, director of the FDIC’s Division of Risk Management Supervision, which is in charge of the agency’s policies and programs related to financial crimes.

“These sites are used to trick people into giving up valuable personal information that can be used to commit identity theft.”

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The Arkansas Banker | June 2017

MORTGAGE FORECLOSURE RESCUE

Today, many homeowners who are struggling financially and risk losing their homes may be vulnerable to false promises to refinance a mortgage under better terms or rates. But borrowers should always be on the lookout for scammers who falsely claim to be lenders, loan servicers, financial counselors, mortgage consultants, loan brokers or representatives of government agencies who can help avoid a mortgage foreclosure and offer a great deal at the same time. These criminals will present homeowners with what sounds like the life-saving offer they need. Instead, the homeowner is required to pay significant upfront fees or, even worse, tricked into signing documents that, in the fine print, transfer the ownership of the property to the criminal involved. Common warning signs of fraudulent mortgage assistance offers include a “guarantee” that foreclosure will be avoided and pressure to act fast.

LOTTERY SCAMS

You might be told you won a lottery (typically one that you never entered) and asked to first send money to the “lottery company” to cover certain taxes and fees. Similar examples involve bogus prize winnings and sweepstakes. “In one example, a scammer sent a letter to people using falsified FBI and FDIC letterhead telling them they won a popular, wellknown lottery but that they needed to send money by wire transfer to a lottery ‘official’ in order to secure the winnings,” Benardo said. “The ‘official’ was really a crook hoping to trick people into sending money.”

a ransom is paid. The most common way ransomware and other malicious software spreads is when someone clicks on an infected email attachment or a link in an email that leads to a contaminated file or website. Malware also can spread across a network of linked computers or be passed around on a contaminated storage device, such as a thumb drive.

JURY DUTY SCAMS

ELDER FRAUD

Thieves sometimes target older adults to try to cheat them out of some of their life savings. For example, telemarketing scams may involve sales of bogus products and services that will never be delivered.

Warning signs include unsolicited phone calls asking for a large amount of money before receiving the goods or services, and special offers for senior citizens that seem too good to be true, like an investment “guaranteeing” a very high return. To help seniors and their caregivers avoid financial exploitation, the FDIC and the Consumer Financial Protection Bureau have developed Money Smart for Older Adults, a curriculum with information and resources (see our News Briefs).

OVERPAYMENT SCAMS

This popular scam starts when a stranger sends a consumer or a business a check for something, such as an item being sold on the internet, but the check is for far more than the agreed-upon sales price.

The scammer then tells the consumer to deposit the check and wire the difference to someone else who is supposedly owed money by the same check writer. In a few days, the check is discovered to be a counterfeit, and the depositor may be held responsible for any money wired out of the bank account. Victims may end up owing thousands of dollars to the financial institution that wired the money, and sometimes they’ve also sent the merchandise to the fraud artists, too.

A thief makes phone calls pretending to be a law enforcement official warning innocent people that they failed to appear for jury duty and threating an arrest unless a “fine” is paid immediately.

And to pay up, the caller asks for debit account and PIN numbers, allowing the perpetrator to create a fake debit card and drain the account.

WHAT YOU CAN DO

While there are many forms of financial scams, the red flags to look out for are often similar. And so are the things your customers can do to help protect themselves. Here are some basic precautions to consider, especially when engaging in financial transactions through email, over the phone or on the internet.

Avoid offers that seem “too good to be true.” As Eberley noted: “If someone promises ‘opportunities’ that are free or with surprisingly low costs or high returns, it is probably a scam. Be especially suspicious if someone pressures you into making a quick decision or to keep a transaction a secret.”

No matter how legitimate an offer or request may look or sound, don’t give your personal information, such as bank account information, credit and debit card numbers, Social Security numbers and

passwords, to anyone unless you initiate the contact.

Remember that financial institutions will not send you an email or call to ask you to put account numbers, passwords or other sensitive information in your response because they already have this information. To verify the authenticity of an email, independently contact the supposed source by using an email address or telephone number that you know is valid.

Be cautious of unsolicited emails or text messages asking you to open an attachment or click on a link. This is a common way for cybercriminals to distribute malicious software, such as ransomware. Be especially cautious of emails that have typos or other obvious mistakes.

Use reputable anti-virus software that periodically runs on your computer to search for and remove malicious software.

Be careful if anyone (even a friend) gives you a thumb drive because it could have undetected malware, such as ransomware, on it.

Don’t cash or deposit any checks, cashier’s checks or money orders from strangers who ask you to wire any of that money back to them or an associate. If the check or money order proves to be a fake, the money you wired out of your account will be difficult to recover.

Be wary of unsolicited offers “guaranteeing” to rescue your home from foreclosure. If you need assistance, contact your loan servicer to find out if you qualify for programs to prevent foreclosure or to modify your loan without having to pay a fee.

Please turn to page 20

RANSOMWARE

This term refers to malicious software that holds a computer, smartphone or other device hostage by restricting access until June 2017 | The Arkansas Banker

19

MEMBER NEWS

Arvest Among ‘Best Employers’ Arvest Bank has been recognized by Forbes magazine as one of “America’s Best Large Employers” for 2017.

The results were determined by a survey conducted by research firm Statista that included almost 30,000 employees from 25 industries. Every employee was asked to anonymously rate their current employer – on a scale of zero to 10 – on how likely they would be to recommend their employer to family or friends. That rating was the biggest determining factor in the assessment.

The bank ranked 208th out of the 500 businesses nationwide – with 5,000 or more full- or part-time associates – that scored highest in an independent survey of employees regarding satisfaction with their company. Additionally, Arvest is the highest-ranking community bank among all companies in the banking/financial services category and the only Arkansasbased company on the large employer list.

The second-most significant factor in the scoring was based on participants’ responses to identify good or bad employers in industries other than their own. Results of these two key elements produced scores for more than 1,800 employers nationwide. The remainder of the survey consisted of 35 other workrelated topics.

“We have our associates to thank for this recognition that sets us apart from other retail banking institutions across Arkansas and nationally,” said Jim Cargill, president and CEO of Arvest Bank in central Arkansas. “We take pride in the positive culture we have developed and consistently work to improve, and we are honored that our associates recognize that support within their work environment.”

YOUR

This is the second year Forbes has compiled its list of America’s Best Employers, and the first time Arvest has been included.

Scams Targeting Bank Customers

Continued from page 19

Monitor credit card bills and bank statements for unauthorized purchases, withdrawals or anything else suspicious, and report them to your bank right away.

Periodically review credit reports for signs of identity theft. If you spot a potential problem, call the fraud department at the credit bureau that produced that credit report. If the account turns out to be fraudulent, ask for a “fraud alert” to be placed in your file at all three of the major credit bureaus. The alert tells lenders and other users of credit reports that you have been a victim of fraud and that they should verify any new accounts or changes to accounts in your name.

Contact the FDIC’s Consumer Response Center (CRC) at 1-877-ASK-FDIC if you have questions about possible scams or you are the victim of a scam experiencing difficulty resolving the issue with a financial institution.

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Commercial Lending, Tax Credit Financing & New Markets Tax Credits (501) 370-1485

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MICHAEL S. MOORE Labor & Employment (501) 370-1526

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Little Rock I Rogers I Fayetteville 20

The Arkansas Banker | June 2017

Little Rock I Fayetteville I Rogers www.FridayFirm.com

BANKER NEWS & MOVES FIRST SECURITY BANK - CONWAY ADDS JONATHAN BULL TO LENDING STAFF First Security Bank of Conway proudly announces the addition of Jonathan Bull, Vice President and Commercial Lender.

Jonathan graduated from the University of Central of Arkansas with a Bachelor of Business Administration degree and brings over nine years of banking experience to his position with the bank.

In addition to his lending experience, Jonathan served as a Senior Bank Examiner with the Arkansas State Bank Department. Jonathan is a life-long Conway resident and serves as a board member of Glenhaven Ministers, on The Summit Church Men’s Ministry Leadership Team and Point Team Member and is a 2016 graduate of the Faulkner County Leadership Institute.

Jonathan and his wife Leah, have a daughter, Ellison, and reside in Conway.

Jonathan’s office is located at the First Security Bank, Downtown Banking Center, 1001 Front Street, Conway, AR.

RELYANCE BANK ANNOUNCES PROMOTIONS OF BROWN, HALL Chuck Morgan, President and CEO of Relyance Bank, N.A., has announced the promotions of Allison Brown and Karen Hall.

Allison Brown, promoted to Vice President and Corporate Branch Administrator, began her banking career

in 1999. Brown graduated with a Bachelor of Science Degree from the University of Arkansas.

Previously serving as Account Services Manager, she has held various positions within the bank with a focus in operations.

Her new role will include performance, administration and efficient operation of the branches and banking locations in all regions, including product sales, operations, customer service and security, and safety.

Southern Arkansas University.

She is also a Certified Trust & Financial Advisor, (CTFA).

Karen Hall, promoted to Assistant Vice President of Operations, started her banking career over 12 years ago as a teller with Relyance Bank. Hall, a Watson Chapel graduate, attended Southeast Arkansas College in Pine Bluff.

She is a volunteer with the Pine Bluff Festival Association, CASA Half Marathon, Neighbor-toNeighbor as well as other local organizations.

GRAND SAVINGS BANK PROMOTES WAGNER AND NUTTER

BARGER NAMED VICE PRESIDENT AND SENIOR TRUST OFFICER Chuck Morgan, President and CEO of Relyance Bank, N.A., has announced that Kristi Barger was named a Vice President and Senior Trust Officer of Wealth Management in the Hot Springs and Hot Springs Village Markets.

Barger has 30 years of experience in personal trust and probate administration, investment management, forensic accounting and estate/ financial planning for high net worth clients and their families.

She received a Bachelor of Business Administration, Double major: Accounting and Finance,

Barger is a past member of the Hot Springs Downtown Rotary Club, chairing both Scholarship and Program Committees, past Board Member of Downtown Merchants Association, Women’s Chamber, and Garland County CASA. She currently volunteers her time with Habitat for Humanity and Garland County United Way.

Grand Savings Bank is pleased to announce the promotion of Heather Wagner to Assistant Vice President and Margie Nutter to Vice President.

Heather Wagner has been with Grand Savings Bank for 11 years serving as a teller, Customer Service Representative, Loan Assistant with her most recent role being Loan Assistant Supervisor. She is a Northeast Oklahoma native and volunteers as a cheer coach for the Jay Bulldog 2nd grade cheer squad.

“Heather brings enthusiasm in developing GSB teammates,” said Guy Cable, Grand Savings Bank CEO. “We appreciate her commitment, loyalty and leadership skills.”

Margie Nutter joined Grand Savings Bank in 1997 and serves as Network Administrator.

She earned her Bachelor of Science degree from Northeastern State University and is an Accredited ACH Professional.

“Margie has been committed to the bank and improving

IT Operations over the past 20 years,” said Cable. “We are thankful for her leadership and ingenuity in this area of the bank.”

FIRST NATIONAL BANK OF CROSSETT HIRES NEW ASSISTANT VP Sarah Cantley has joined First National Bank of Crossett as Assistant Vice President, Mortgage and General Lender, according to an announcement from Gene Crawford, President and CEO. Crawford stated, “We are excited about Sarah joining our bank family. She has proven lending experience and skills, which we feel will be a great asset to FNBC.” Sarah came to First National Bank from Timberline Federal Credit Union where she was Lending Manager.

Cantley serves on the Board of Directors for the Crossett Area Chamber of Commerce and is a member of the Crossett Lions Club and First Baptist Church.

She and her husband Matt reside in Crossett. They have a two sons, Aiden and Logan and a daughter, Sarah Grace.

BOYD JOINS SIGNATURE BANK IN FAYETTEVILLE Signature Bank has announced that Emily Boyd has joined the bank’s Fayetteville team as a Private Banker.

With over 11 years of banking experience, Boyd is dedicated to helping her customers reach their financial goals while providing exceptional customer service.

She loves spending time outdoors and traveling with her husband Brock.

June 2017 | The Arkansas Banker

21

BANKER NEWS & MOVES STATE BANK DEPARTMENT PROMOTES THREE The Arkansas State Bank Department has promoted Stacey Leder to Certified Bank Examiner Manager, and Jordan Patterson and Raychel Pendergist to Certified Bank Senior Examiner.

Stacey Leder will continue to manage a three-person team that examines the trust departments of Arkansas state-chartered banks. The team also examines Arkansas state-chartered trust companies, of which there currently is one.

Leder assumed this leadership position in July 2016.

Leder has been at the Bank Department for more than 22 years. She initially was a

commercial examiner but has been a Trust examiner for most of her career at the Department. Leder graduated in 1991 from the University of Central Arkansas, from which she received a Bachelor of Business Administration in General Business.

Patterson and Pendergist are assigned to commercial examination groups based in Little Rock.

Jordan Patterson was hired by the Bank Department in August 2010.

Prior to his hiring, Patterson served for more than two years as a loan assistant/processor at First Community Bank of Eastern Arkansas, Marion. He received a Bachelor of Science in Finance from Arkansas State University in 2009.

Raychel Pendergist joined the Bank Department in March 2011 after working for almost two years as a credit analyst at First State Bank, Lonoke. She received a Bachelor of Science in Business Administration from the University of Arkansas in May 2009. Her major was Finance with a concentration in commercial banking.

HARRIMAN JOINS SIGNATURE BANK IN SPRINGDALE Signature Bank has announced that Randall Harriman has joined the bank’s Springdale team as a Vice President - Business Developer.

Harriman is a lifetime Springdale resident and graduate of the University of Arkansas. Randall is on the NTI Foundation Board, Springdale Mayor’s Prayer Breakfast Board and a Deacon at the Johnson Church of Christ.

He has been in banking for over 16 years and enjoys spending his free time with his family.

MARTIN AMONG GRADUATES AT THE GRADUATE SCHOOL OF BANKING AT LOUISIANA STATE UNIVERSITY Russell W. Martin Jr., Senior Vice President, Relyance Bank, Little Rock, Arkansas is among the 164 bankers receiving graduation diplomas on June 2, 2017 from

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The Arkansas Banker | June 2017

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

The Arkansas

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

the Graduate School of Banking at Louisiana State University. This threeyear program provides courses covering all aspects of banking, economics and related subjects. Students traveled from eighteen states and Mexico to participate in this Session.

Martin, a Little Rock native, earned with his Bachelor of Science in Agribusiness and Master of Science in Agricultural Economics from the University of Arkansas and the prestigious CCIM designation from the CCIM Institute.

With more than 14 years in the banking industry, Martin serves as a Senior Vice President of Commercial Lending for the Little Rock Market. Martin has served as a Board Member and Chairman for the city of Little Rock’s Housing Advisory Board, Board of Director for Big Brother and Big Sisters of Central Arkansas and Treasurer for the Little Rock Branch of Quality Deer Management Association. He is a current member of the Little Rock Downtown Kiwanis club; serving as President, Treasurer and Board Member. He also serves on the Board of Directors and the Finance Committee of the Pleasant Valley Country Club and a member of the FourBall Tournament Committee.

Sponsored by 15 southern state bankers associations in cooperation with the Division of Continuing Education at LSU, the banking school requires attendance on campus for three years, with extensive bank study assignments between sessions. The faculty consists of bankers, business and professional leaders, and educators from all parts of the U.S. During their three years at the Graduate School of Banking, students receive 180 hours of classroom instruction, thirty hours of reviews, planned evening study, and written final examinations at the end of each session.

SUSAN LANIGAN JOINS SIMMONS FIRST NATIONAL CORPORATION BOARD OF DIRECTORS Susan S. Lanigan of Nashville, Tenn., has been added to the Simmons First National Corp. board of directors, it was announced today

by George Makris Jr., Simmons’ chairman and chief executive officer.

Lanigan has been executive vice president and general counsel of Chico’s FAS Inc. since 2016. She served as general counsel of Dollar General Corp. from 2002-13 and was executive vice president of the company from 2005-13. At Dollar General, Lanigan gained experience overseeing major corporate transactions.

She helped guide Dollar General through a $7 billion leveraged buyout, a subsequent initial public offering and Dollar General’s return to public company status. During her time there, the company grew from about 5,000 to more than 10,000 stores and grew annual revenue from $11 billion to $18 billion.

“Susan brings strong retail and legal experience to our board,” Makris said.

“She will play a key role for us as we continue to build one of the nation’s top regional banks.”

Lanigan worked extensively with the Dollar General board to identify and recruit qualified independent directors.

She was responsible for Dollar General’s global import compliance program as well as the compliance models used when introducing stores into new states and introducing new products in stores.

She also led government relations and media relations at Dollar General as well as the company’s internal audit, risk management, insurance, corporate compliance and community initiatives departments.

Lanigan graduated cum laude from the University of Georgia and magna cum laude from the University of Georgia School of Law. She began her career as a litigation associate at the Troutman Sanders law firm. She later served as in-house counsel for Turner Broadcasting System Inc. and as senior vice president, general counsel and secretary of Zale Corp. At Zale, Lanigan was involved in strategic planning along with identifying and cultivating new business opportunities.

Lanigan has been an independent director of Kirkland’s Inc. since June 2016. She has been the chairman of the Tennessee Education Lottery Corp. since 2014.

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

June 2017 | The Arkansas Banker

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The Arkansas Banker | June 2017