Bank Holding Companies

Arkansas
State Bank Department

Bank Holding Companies

(updated March 3, 2004)

The Arkansas State Bank Department has performed examinations of bank holding companies since 1987. Record keeping and regulatory reporting deficiencies are the most criticized areas of holding company operations. The majority of holding companies within Arkansas own one bank and operate with minimal or no debt. Activity is generally limited to an annual shareholders’ meeting, annual or quarterly Board of Directors’ meetings, and filing of Federal Reserve System reports. As a result of this limited activity, familiarity with holding company operations has not been of prime importance to directors and executive officers of the holding company.

The holding company must be thought of as a business entity with the purpose of serving as a source of financial and managerial strength to its subsidiaries. The parent company’s board of directors is responsible for formulation of applicable policies and contracts, as well as initiation of procedures for proper record keeping that will ensure the correct preparation of all Federal Reserve System reports.

The links below contain recommendations for the development and improvement of holding company records.

Shareholders’ and Directors’ Meetings