Arkansas
State Bank Department
State Banking Board
Meeting Minutes for
July 18, 2002
(updated August 28, 2003)
A regular meeting of the State Banking Board was held in
the conference room of the Arkansas State Bank Department, 400 Hardin Road, Suite 100, Little
Rock, Arkansas, at 10:00 a.m. on Thursday,
July 18, 2002. The following Board Members were present: Chairman Judy Loving, Vice Chairman Ted C. Skokos
[by phone], David Bartlett [by phone],
Charles Mazander, and Gus Rusher. Bob Douglas was absent. Representing the
State Bank Department were Commissioner Frank White, Deputy Commissioners Don
R. Clark and Candace Franks, Management Project Analyst Cynthia Nixon,
Administrative Assistants II Barbara Mahoney and Marilyn Myers, and
Administrative Assistant I Hilary Mabry. Assistant Attorney General Warren Readnour was
present representing the Attorney
General's Office. Lynn Perkins from
Bushman Court Reporting was the recording
reporter for the applicants. Mark Freeman, reporter for Arkansas
Business was present representing the news media.
This was a regularly scheduled meeting of the State
Banking Board. Notice of the regular meeting was sent by
regular mail to each member of the State Banking Board on June
11, 2002. The notices were also given to the news media in accordance with
state law.
Commissioner Frank White opened the meeting. Secretary Don
R. Clark declared a quorum was present with three members in attendance and two
by phone. Commissioner White asked the visitors and guest to stand and
introduce themselves and whom they represent. He then turned the meeting over to
Chairman Judy Loving.
Chairman Loving announced the first order of business was
consideration of the minutes of the March 21, 2002, special meeting. A
motion was made by Gus Rusher, seconded by Ted C. Skokos, to
approve the minutes as presented. Motion carried and the Commissioner
concurred.
Next was approval of expenses for the Board. A motion was
made by David Bartlett, seconded by Gus Rusher, to approve the Board's
expenses. The motion carried and the Commissioner concurred.
Next on the agenda was consideration of an application by
Bank of Lockesburg, Lockesburg, Arkansas, to relocate its main office
from Lockesburg, Arkansas, to Stuttgart, Arkansas. Warren Jennings, President and
Chief Executive Officer of First National Bank of DeWitt, represented and spoke for the application. He explained their
plans to move the bank to Stuttgart
and convert the bank to a national charter. He also stated the financial facility
in Lockesburg would be maintained as a branch of First National Bank of DeWitt.
A motion was made by David Bartlett,
seconded by Charles Mazander, to approve the application. The motion
carried and the Commissioner concurred.
Next was consideration of an application for
incorporation of Arkansas Valley Regional Industrial Development
Company I, LLC, Little Rock, Arkansas, by Arkansas Capital Corporation, Little
Rock. C. Sam Walls, Executive Vice President of Arkansas Capital Corporation,
Little Rock, Arkansas, represented and spoke for the application. Chairman
Judy Loving recused from participation in discussion or voting on this application, as her bank in Yellville
is located in one of the counties being considered in the application. The meeting was then turned over to Gus Rusher who became Acting Chairman. Mr. Walls explained the development
company would have an emphasis on technology,
looking to benefit the State of Arkansas.
Mr. Rusher asked for an explanation of different projects
being planned by the applicant. Mr. Bartlett commented on the problems with
past industrial development companies. Commissioner White
commented Mr. Walls is trying to develop risk capital, noting
we may come forward with legislation in the next session to address risk
capital and non-bankable investments. Mr. Walls stated there is
a real need for risk capital to benefit the economy of the State
of Arkansas. A motion was made by David Bartlett, seconded by Ted C.
Skokos, to approve the application. The motion carried and the Commissioner concurred.
Chairman Judy Loving refrained from voting.
Acting Chairman Gus Rusher then turned the meeting back to
Chairman Judy Loving.
Next was consideration of an application for
incorporation of Arkansas Valley Regional Industrial Development Company, Ltd.,
Little Rock, Arkansas. Carl Bird and Attorney
Robert Jones represented and spoke for the application. Mr. Jones stated he concurred with Mr. Walls' comments, to provide
equity financing to develop and stimulate the Arkansas economy. They
have several projects numbering in excess of fifty; however, they are weighing
the projects to ensure the state receives the most benefits. Mr. Skokos asked the reason behind eleven counties instead of
fifteen. Mr. Jones replied it is easier to do eleven; however, they want to be flexible to be able to come back and
amend the charter. Mr. Skokos asked
the Commissioner if he had any recommendations. He replied he had given
tentative approval. Mr. Skokos asked if there had been any investigation into
the track records of the organizers. Commissioner White stated as a normal rule
we do not do background or credit checks. Mr. Skokos stated he did not have
enough information to make a reasonable
decision. Based on lack of information he did not feel comfortable voting on
this application. He then made a motion to defer the application. Chairman Loving raised the question, in view of public
interest, that there should be more information
available about the organizers. Mr. Jones stated the investors are small investors, approximately twenty that do not wish to
be in the limelight. Mr. Mazander noted
they have not hired or formed a management team. Mr. Rusher asked if they have
a time frame. Mr. Jones stated, yes,
they do have several projects to service; they will be handling the accounting process and bookkeeping in
standard form and will have outside committees.
Mr. Bartlett asked the Commissioner, if tabled, could this issue be addressed by mid-August, would this affect the projects? Mr. Jones stated it would cost them interest on their money and they have represented
to several projects they would be funded in thirty days. Mr. Bartlett explained they are not a rubber stamp
Board. Mr. Jones commented he was not under the impression they had a
problem based on the history of applications.
Mr. Bartlett stated he would not be rushed into a decision and there is no time limit. He would like to
see, and have the Commissioner review, several of the projects. Mr. Jones said this would be no problem.
David Bartlett made a motion, seconded by Ted C. Skokos,
to defer the application. Commissioner White added, in the form of a
stipulation, that the following information be
sent to the Department: 1) a description and supporting information on at
least three projects, 2) a letter outlining and describing the management team,
3) each incorporator to submit a biography to the Commissioner stating
any felony in their background and 4) there will be no time limit on approval of the
application. Motion carried and the Commissioner
concurred. The Commissioner noted he would move on the application as soon
as the requested information was received, reviewed, and found to be in order.
At this point the Commissioner gave an overview of
state-chartered banks in Arkansas stating overall the banks completed their
fiscal year in good shape, noting modest improvement in the
economy, but there are still problems out there. Mr. Mazander
expressed his appreciation to Mr. White for his letter of July 5,
2002, in reference to "Board of Directors' responsibilities and
liability" that was sent to all state-chartered banks. Mr. White stated he
may join with Kenneth Hammonds, President of the Arkansas Bankers Association,
and develop a training seminar for Directors. In
the problem banks we now have, the Boards of Directors were not
adequately kept informed by management. Mr.
Rusher stated he appreciated the letter and what it means to the bankers in Arkansas.
Mr. Mazander asked Commissioner White to explain a Cease
and Desist Order. Mr. White went on to explain
that overall, banks are doing a good job; the Department is trying to help banks
maintain a good staff. He noted we are down
to 129 state-chartered banks and
expect to lose a couple more by merger and conversion in the near future. He
commented the staff is working hard; the
field examiners have gone to a four, ten-hour workday.
Chairman Loving complimented the Commissioner on being
pro-aggressive.
A motion was made by Charles Mazander, seconded by Gus
Rusher, to adjourn. Motion carried.
