Arkansas
State Bank Department
State Banking Board
Meeting Minutes for
March 31, 2005
(updated October 11, 2005)
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 Thursday, March 31, 2005. The following Board
Members were present: Chairman Gus Rusher, Vice
Chairman Charles Mazander, David Short, Margie Russ, Richard Mays, and Marcus McCain. Representing the State Bank Department
were Commissioner Bunny Adcock, Deputy Commissioners
Luther Guinn and Candace Franks, Assistant Chief
Examiner Baker Moseley, Bank Senior Examiner Susannah Marshall, Management Project Analyst Supervisor Cynthia Nixon, Administrative
Assistants II Barbara Mahoney and Marilyn Myers.
Lynn Perkins from Bushman Court
Reporting was the recording reporter for the
applicant. No representatives from the media were present.
Bank Commissioner Bunny Adcock 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 February 23, 2005. The notice was also given to the news
media in accordance with state law.
New Board Member Marcus McCain
was introduced and welcomed by Commissioner Adcock and Board Chairman Gus
Rusher.
Commissioner Bunny Adcock opened the meeting. Secretary Luther Guinn declared a quorum was present.
Commissioner Adcock then asked the visitors and guest to stand and introduce themselves and state who they represent. He then
turned the meeting over to Chairman Gus
Rusher.
First on the agenda was
consideration of the Minutes of the January 20, 2005, Regular
Board Meeting. A motion was made by Charles Mazander, seconded by Margie Russ, 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
Short, seconded by Margie Russ, to approve
the Board's expenses. Motion carried and the Commissioner concurred.
Next on the agenda was consideration of an application by Liberty Bank of Arkansas, Jonesboro, Arkansas, for
the merger of TrustBanc, Mountain Home, Arkansas, with and into Liberty Bank of Arkansas. Bob Fegtly
with DD&F Consulting Group, Little
Rock, Arkansas, represented and spoke for the application. He explained to the Board that this was kind of a second phase of a two-phase transaction that Liberty
Bancshares entered into.
The first transaction was consummated on March 15, 2005, with the
purchase of TrustBanc Financial Group by Liberty Bancshares, resulting in a
newly-formed holding company called Newco II, with Newco II the resulting
entity. He also said that with the transaction, TrustBanc became a second-tier
subsidiary of Liberty
Bancshares and the two-stage process was due mainly because of making
sure that the data processing systems were put together in a manner
which would be hopefully seamless to the customers. Gus Rusher asked if protests
were filed and, after being informed no, complimented the Department on
the thorough and complete analysis of the application. Chairman Rusher asked about the
status of the weak credits after having merged Mid-South Bank and Peoples Bank of Paragould. Wallace Fowler stated 97 to 98
percent of the weak credits have been cleaned up. He further stated that
classified assets and past due loans were low and the results of a recently started state-lead examination would be
extremely favorable. Lloyd McCracken
said they were obviously aware of the tremendous amount of past due problem loans and nonaccruals at both of the
merged banks. He further said they blended the organization with
enhanced credit administration and had capital to allow sufficient time and
opportunity to work through the credits and get them resolved. Vice Chairman
Mazander stated it would probably be a positive for Liberty if TrustBanc was healthy and strong when merged. Lloyd McCracken stated that
TrustBanc would certainly further lower
the percentage of nonaccruals and past dues. He complimented TrustBanc for doing a good job of monitoring the loan portfolio.
Mark Fowler stated that 30 days-and-over
past dues are right at 1 percent and other real estate is down from $4 Million
to $300,000 at Liberty Bank. Chairman
Rusher asked about comments in the last report of examination of Liberty Bank regarding Regulation 0
and the Bank Secrecy Act. Lloyd McCracken
stated the bank takes any violation of Regulation 0 and the Bank Secrecy Act
seriously. Wallace Fowler stated that
the bank had initiated four procedures for complying with Regulation 0. David Short asked if the Department could
confirm the new procedures and it was
determined that it was too early into the examination. Chairman Rusher stated the information was made
from previous examinations and a lot of
things can change during the course of time. Comments were also made about some
risk management programs in regard to
liquidity. Wallace Fowler said that risk management had been discussed and everyone was happy with what the bank
was doing. Chairman Rusher asked if
the conversion had been completed. Lloyd McCracken stated the computer conversion is scheduled for the night
of April 7th. Marc McCain asked the reasoning behind forming of the Tier-2 holding
company. Bob Fegtly stated that it was more
from a tax standpoint. David Short asked if Phillip Young would be the only director from Mountain Home. Wallace Fowler stated
yes.
A motion was made by Charles
Mazander, seconded by David Short, to approve the application. Motion carried and the Commissioner concurred.
No further business, the meeting was adjourned.
