Arkansas
State Bank Department
State Banking Board
Meeting Minutes for
December 1, 2005
(updated January 31, 2006)
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 December 1, 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, Chief Examiner Wilks Marshall and Financial Analyst Supervisor Susannah
Marshall. Shane Khoury from the
Governor’s office was also in attendance.
Linda Parker was the recording reporter for the applicants. David Smith from the Arkansas Democrat Gazette represented the
media.
State 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 October 26, 2005.
The notice was also given to the news media in accordance with state
law.
Commissioner
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 October 20, 2005, Special Board
Meeting. A motion was made by Charles
Mazander, seconded by David Short, to approve the Minutes as presented. Motion carried and the Commissioner
concurred.
Next was the approval of
expenses for the Board. A motion was
made by David Short, seconded by Marcus McCain, to approve the Board’s
expenses. Motion carried and the
Commissioner concurred.
Next on the Agenda was an
application by the Bank of Fayetteville,
National Association, Fayetteville, Arkansas, to convert to a state-chartered bank to be
known as The Bank of Fayetteville. Randy Dennis with DD&F Consulting Group,
Little Rock, Arkansas, represented the application. Mr. Dennis stated that the Bank of Fayetteville as of
September was about $387,000,000, with equity of $26,000,000, seven branches
and a home office. He also stated that
the Federal Reserve had approved the application as of November 14th. Ms. Mary Beth Brooks of Bank of Fayetteville
stated that the bank had been in existence for 18 years and one of the goals of
the bank was to become more profitable while maintaining the community
feel. She stated they have tremendous
activity within the community but support shareholders and give them a good
return on their investment. She also
stated that the bank looked forward to changing charters and that she had
worked here some time ago but maintained relationships with department
personnel. Chairman Gus Rusher asked if
the bank was still able to maintain a strong loan growth. Ms. Brooks stated that the bank had a lot of
loan growth but their biggest challenge was with deposits with all of the new
banks moving into the area. Chairman Rusher asked about a $43,000,000 leverage
program initiated by prior management and what impact it would have on the
bank. Ms. Brooks stated that when she
started at the bank she questioned the rationale of the transaction. She stated that the transaction was based on
certain assumptions, is now looking pretty good, and is not having a negative
impact on the bank. Vice Chairman
Mazander asked if the department would issue a new charter. Deputy Commissioner Candace Franks stated
that a new charter would be issued.
Vice Chairman Charles Mazander asked about the advantages of becoming a
state chartered bank. Ms. Brooks stated
that is was easy to do business with and have dialogue with the department. Mr. David McClinton stated that the positive
helpful attitude of state bank department personnel was a determining
factor. Mr. David Short asked about
credit risk and more concern expressed by the state examiners than OCC. Deputy Commissioner Luther Guinn stated there
was concern for credit risk regarding real estate lending not only at this
institution but all institutions in Northwest Arkansas. A motion was made by Vice Chairman Mazander
seconded by Mr. Short to approve the application, the motion carried and the
Commissioner concurred.
Next on the
agenda was an application by the Bank of Harrisburg, Harrisburg, Arkansas, for
the reorganization and relocation of bank charter to Flippin, Arkansas, to be
known as Twin Lakes Community Bank. Mr. Randy
Dennis of DD&F Consulting Group, Little Rock, Arkansas represented the applicant. Mr. Dennis stated that First National Bank in
Wynne acquired the Bank of Harrisburg and the Bank of Harrisburg opened a loan production office in
Flippin. He also stated that First
National will take the deposits and loans out of the Bank of Harrisburg and the equity will be relocated
into Flippin. Mr. Harold Hardwick stated
that after their purchase of the Bank of Harrisburg
a desire to relocate the charter. He also
stated that after visiting Marion
County he decided the
area might be good for a charter
relocation. He further stated plans for
First National Bank to retain interest in the bank, have a couple of directors
on the board of directors and provide assistance. Ms. Judy Loving stated that she and Harold
share the same banking philosophy and that the community of Flippin wanted a
community bank. She also stated that
response to the stock offering has been overwhelming and the loan production
office has generated loans in both Marion and Baxter County. She further stated that plans are to raise
$10,000,000 in capital and $8,5000,000 has been committed. Mr. Chad
Hudson stated
that the Loan Production office had $2,500,000 in loans that are pending and
they are looking at building a competitive bank of deposit products. Vice Chairman Mazander asked if a national
bank could own a state chartered bank.
Mr. Dennis stated that the holding company for First National Bank is
the actual owner but that a bank, national or state could not own another
bank. Vice Chairman Mazander asked how
many other banks or branches were located in Flippin or the immediate
area. Ms. Loving stated there were two branches
of other banks. Chairman Rusher asked
questions regarding the facility and capitalization. Ms. Loving stated their plan was to build a
3500 to 4500 square feet building to be completed by August. Ms. Loving also stated that they feel
comfortable with $10,000,000 in capital.
Mr. Hardwick stated there was a conscious decision by First National
Corporation to own 30% to 40% of something that the community owns. A motion was made by Mr. Marcus McCain
seconded by Mr. Short to approve the application, the motion carried and the
Commissioner concurred.
Chairman Rusher
addressed his term expiration and the wonderful experience being a member of
the banking board had provided.
No further
business the meeting adjourned.
.
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