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State Bank Department

State Banking Board

Meeting Minutes for October 20, 2005

(updated January 31, 2006)

A regular meeting of the State Banking Board was held in the conference room of the Arkansas State Bank Department, 400 Hardin Road, Suite lOO, Little Rock, Arkansas, at 10:00 a.m. on October 20, 2005. The following Board Members were present: Chairman Gus Rusher,Vice-Chairman Charles Mazander, David Short, Margie Russ, and Marcus McCain.Representing the State Bank Department were Commissioner Bunny Adcock, Deputy Commissioners Luther Guinn and Candace Franks, Financial Analysts Susannah Marshall and John Ashby, Management Project Analyst Supervisor Cynthia Nixon, and Administrative Assistants II Barbara Mahoney and Marilyn Myers. Tom Gay was present from the Attorney General's Office. Lynn Perkins from Bushman Court Reporting was the recording reporter for the applicants.

Commissioner Adcock opened the meeting. Secretary Luther Guinn declared a quorum was present. Commissioner Adcock then asked the visitors and guests 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 July 21,2005, Regular Board Meeting. A motion was made by David Short, 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 Charles Mazander, seconded by Margie Russ, to approve the Board's expenses.  Motion carried and the Commissioner concurred.

Next on the agenda was an application by First Arkansas Bank & Trust, Jacksonville, Arkansas, to merge First Team Bank, Heber Springs, Arkansas, with and into First Arkansas Bank & Trust. Larry Wilson, Chairman of First Arkansas Bank & Trust, represented and spoke for the application. He stated they purchased First Team Bank in September from the Butler family. He stated First Team Bank is close to Jacksonville geographically and was a solid bank.  He also stated the merger would result in a $500 million dollar bank with 24 branches. He also stated additional services regarding trust and investment, as well as a mortgage company, would be available. He further stated they plan to form an advisory board of 10 to 12 people. Vice Chairman Mazander asked how many home-office banks will be left in Heber Springs. Mr. Wilson stated there would be two.

A motion was made by David Short, seconded by Marcus McCain, to approve the application. Motion carried and the Commissioner concurred.

Next on the agenda was an application by First Security Bank, Searcy, Arkansas, to purchase and assume the assets and liabilities of First Security Bank of Clarksville, Clarksville, Arkansas. Randy Dennis with DD&F Consulting Group, Little Rock, Arkansas, represented the application. Mr. Dennis stated First Security Bank decided to consolidate their operations and wanted to consolidate their Clarksville charter into Searcy. Mr. Mike Hutsell of First Security Bank stated both banks have common ownership and there will be no changes in personnel, services, or products, and the current Board will become an advisory board. He also stated the reason for the consolidation was economics and reduction of duplicated expenses. Chairman Rusher asked Mr. Hutsell the long term plans of the banks in Mountain Home and Conway. Mr. Hutsell stated they have no plans at this time for the banks, and that Clarksville was considerably smaller. Mr. Short asked what the annual cost savings would be. Mr. Hutsell said a dollar amount had not been put on it, but went on to say that the independent audit expense cost savings would be significant. He further stated they already have common data processing.

A motion was made by Charles Mazander, seconded by Margie Russ, to approve the application. Motion carried and the Commissioner concurred.

Next on the agenda was an application by First Security Bank of Clarksville, Clarksville, Arkansas, for the reorganization and relocation of bank charter to Hot Springs, Arkansas, to be known as Hot Springs Bank & Trust Company. Randy Dennis with DD&F Consulting Group, Little Rock, Arkansas, represented the application. Mr. Dennis explained that technically this is a First Security application because they own the charter, the proponent of the application is the new Hot Springs Bank & Trust Company. He also stated about $6 million is on deposit with plans to continue selling stock up to $10 million, and when all is said and done, Jefferson Bancshares will own 51 %, and the local community will own 49%. Mr. John Garrison of Jefferson Bancshares stated Pine Bluff National is about a $280 billion bank with $230 million in deposits and they had looked to expand in several other markets and decided on Hot Springs.  Mr. Garrison also discussed formation of a Board of Directors, which included local business people and the selection of CEO Terry Kent, who has 20 years of banking experience and was most recently employed with Regions Bank. Vice-Chairman Mazander asked about principal owners of Pine Bluff Bancshares. Mr. Garrison named about eight families or individuals that owned no more than nine percent, with the remaining being broadly owned. Mr. McCain disclosed that as an officer of Summit Bank that has an office in Hot Springs, he is in favor of the application, but does not plan to participate in the discussion so as to avoid any appearance of conflict. Chairman Rusher stated most of the time growth projections are too high, but the five year projection of $100 million seemed very feasible. Mr. Rusher asked if an opening date had been scheduled. Mr. Garrison stated November 7, 2005, pending FDIC approval. Mr. Short asked if the proposed bank would have similarities of Pine Bluff National, three or four years from now, in terms of overall philosophies. Mr. Garrison indicated there would be similarities and Mr. Dennis stated except asset mix would be different, rather than just farm loans. Mr. Kent indicated they have a game plan to make the stock available as widely as possible in the community. Mr. Kent also stated that $7,670,000 has been sold at this point. He further stated two things sold him, one was the strength of Pine Bluff National, and the other was spreading the stock as widely as possible. Chairman Rusher asked about protests. Deputy Commissioner Franks stated the Department had not received any protests.

A motion was made by David Short, seconded by Marcus McCain, to approve the application. Motion carried and the Commissioner concurred.

The next item on the agenda was a proposed regulation to establish a fee to designate an agent for service of process of $25.00 pursuant to A.C.A. § 23-48-327. After general discussion, a motion was made by Vice-Chairman Charles Mazander, seconded by Margie Russ, to approve the regulation. Motion carried and the Commissioner concurred.

The next item on the agenda was a proposed regulation for notice procedures for the relocation of a branch bank in the immediate area, and to establish a fee of $250.00 pursuant to A.C.A. § 23-48-702(d)(5)(A). After general discussion, a motion was made by David Short, seconded by Margie Russ, to approve the regulation. Motion carried and the Commissioner concurred.

Chairman Rusher asked if the Commissioner had any comments to share.  The Commissioner stated his concerns for the delta area hit by hard rain as a result of the hurricane.

No further business, the meeting was adjourned.

 

           

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