Banking Board Minutes - October 30, 2002

Arkansas
State Bank Department

State Banking Board

Meeting Minutes for October 30, 2002

(updated August 28, 2003)

A special 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 Wednesday, October 30, 2002. All Board Members were present: Chairman Judy Loving, Vice Chairman Ted C. Skokos, David Bartlett, Bob Douglas, Charles Mazander, and Gus Rusher. Representing the State Bank Department were Commissioner Frank White, Deputy Commissioners Don R. Clark and Candace Franks, Administrative Assistants II Barbara Mahoney and Marilyn Myers, ^-Administrative Assistant I Hilary Mabry, and Bank Senior Examiner Richard Plotkin. Assistant Attorney General Tom Gay was present representing the Attorney General's Office. Lynn Perkins from Bushman Court Reporting was the recording reporter for the applicants. No representatives from the media were present.

State Bank Commissioner, Frank White, called this special meeting of the State Banking Board. Notice of the special meeting was sent by regular mail to each member of the State Banking Board on September 25, 2002, revised copy being sent on October 16, 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 all members in attendance. 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 July 18, 2002, regular meeting. A motion was made by David Bartlett, seconded by Charles Mazander, 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 Bob Douglas, seconded by Gus Rusher, to approve the Board's expenses. The motion carried and the Commissioner concurred.

Next on the agenda was consideration of a proposed regulation for application requirements for industrial development corporations. Candace Franks, Department Counsel, explained the regulation to the Board. Gus Rusher questioned the limitation of using "at least three potential economic developments or community developments". After discussion, a motion was made by David Bartlett, seconded by Gus Rusher, to table the proposed regulation for the language to be changed to clarify the meaning of the regulation. The corrected regulation is to be considered at the next Board Meeting. Motion carried and the Commissioner concurred.

Next was consideration of a proposed application by Farmers Bank and Trust Company, Blytheville, Arkansas, for the merger of First State Bank, Kenton, Tennessee, with and into Farmers Bank and Trust Company, Blytheville, Arkansas. The application was represented by Bo Huffman, III, Chairman and Chief Executive Officer of Farmers bank and Trust Company, Blytheville, and Randy Dennis of DD & F Consulting Group of Little Rock. Mr. Dennis explained the complicated application. He states this has been approved by the Tennessee Bank Department. They are now waiting on approval from the Federal Reserve before contacting the Federal Deposit Insurance Corporation. Mr. Huffman spoke for the application stating First State Bank, Kenton, will be operated as a branch of Farmers Bank and Trust Company, Blytheville. They will continue to serve the Blytheville area. He noted the Blytheville area has a depressed economy and they need some place to expand their market. He stated the Kenton branch would maintain their own records and files; they plan on hiring people who know that market. Steve Bell, President and Chief Operating Officer of Farmers Bank and Trust Company, Blytheville, will be the main officer to oversee the activities of the branch bank. A motion was made by

Ted C. Skokos, seconded by David Bartlett, to approve the application. Motion carried and the Commissioner concurred.

Next was consideration of an application for the organization of Arkansas Valley Regional Industrial Development Company, Little Rock, Arkansas. Attorney Robert Jones represented and spoke for the application. Mr. Jones explained he is back for the final approval after amending the original application. Mr. Rusher questioned the overlapping counties with other applications. It was explained 'and this is permissible. There was general discussion about the various projects currently being considered. Mr. Skokos asked Mr. Jones why box fifteen [15] on the application was not checked. Mr. Jones explained there was an open-ended answer to this question, that his credit report had not been cleared up yet and he did not want to check. the box. Mr. Rusher noted there is a conflict of information between the original application and the one being considered today about the management committees. Mr. Jones explained they have gone back and reorganized. The management committee is now being reduced to five [5] members. Mr. Skokos noted that you could interpret that it still includes those in the original application. Candace Franks, Department Counsel, explained the prior organizers are not part of the amended application. Seven [7] have been eliminated, leaving five [5]. Mr. White commented the Department has had trouble with prior organizations of this nature; they pay big salaries and do not do projects for economic development. We are going to monitor this application very closely. Mr. Skokos said he wanted to see a final clearing of the credit report information. Also, this will be under a six [6]-months review regarding their action to enhance economic growth. A motion was made by Mr. Mazander, seconded David Bartlett, to approve the application subject to clearing up the credit report problem. Mr. Jones asked how do you comply, Mr. Skokos responded you need to check "no" on the application - Item #15. Mr. Douglas stated there was a lot of consultation on how the application was filled out. He stated he would not vote for something that is not in the application. The motion to approve the application carried with Mr. Douglas voting "no", and the Commissioner concurred.

Next on the agenda was an application for the organization of Arkansas Regional Industrial Development Company, LLC, Little Rock, Arkansas. C. Sam Walls, Chairman and Chief Executive Officer of Arkansas Regional Industrial Development Companies represented and spoke for the application. He gave a brief history of the Arkansas Capital Group, noting it is very difficult to raise private capital in Arkansas, their companies are being established in weaker capital areas of the` state. Commissioner White explained the application; they have been involved in several venture capital companies. He noted the tax credits involved would expire in two months unless changed by the Legislature; that we need to tighten up on these various projects as the tax credits will expire at the end of the year. Mr. Walls explained that the counties in the Arkansas Capital Group do not overlap. A motion was made by Gus Rusher, seconded by Ted C. Skokos, to approve the application. The Commissioner concurred.

Next was a charter amendment by the Bank of Trumann, Trumann, Arkansas, to amend Paragraphs 5^thand 6^t", Articles of Agreement and Incorporation of said bank to be amended as follows:

5^th: The amount of capital stock of said corporation shall be equivalent in value to $600.00 to be subscribed and issued as the Board of Directors may from time-to-time order and direct.

6^th: The said capital stock shall be divided into 60,000 shares of the par value of $.01 for each share..

Department Counsel Candace Franks explained the charter amendment. A motion was made by David Bartlett, seconded by Gus Rusher, to approve the charter amendment. The Commissioner concurred. Mr. Douglas questioned who owns the Bank of Trumann. Ms. Franks, Legal Counsel, stated they are owned by the First National Bank's holding company in Blytheville.

At this point Commissioner White gave a report to the Banking Board stating the Department's budget for 2004 and 2005 had been approved - the total budget is a little over $7 Million and the budget is on a biennium basis. He said he was thankful we are a special revenue agency. He noted we have approval for six new positions and we just hired a new person for the IT Department. He stated we have a carryover of a little over $1 Million, which would allow us to operate for approximately three months, that the June 30, 2002, assessment was $2,846,000.00. Mr. Rusher commented the only form of income is assessment plus fees from various applications. Mr. Skokos complimented the Commissioner and staff on keeping the Department in a sound financial status. The Commissioner noted 29 banks and bank holding companies were under some kind of regulatory letter, there is a possibility there will be more fall out over the David Howell problem. He commented he had a very positive response on the bank directors' training, Don and Candy attended directors' training in Hot Springs and there will be another class in North Little Rock. The Arkansas Banker's Association reported over 150 are already registered to attend. He handed out information that directors should cover in a Bank Board Meeting. Also, he handed out information from CSBS about what should be covered in Board Meetings. He explained why we are promoting directors' training at this time. With economic conditions as they are now, a bank can be in trouble overnight - the state banks currently have over $45 Million in catfish farming exposure.