Local bankers: Not facing the 'big boy' risks, it should be business as usual

Tuesday, October 7, 2008
Banking officials across Carroll County say their depositor's money is safe because they stayed clear of "creative financing," they invested locally, and they are well capitalized. This bank sign in Berryville seems to echo what many local bankers have been saying, that their banks are "safe and sound." (Anna Mathews / Carroll County News)

By E. Alan Long

and Anna Mathews

CCN writers

CARROLL COUNTY -- The $700 billion bailout of Wall Street and "big boy" banks has some people worried, saying the stash of cash under the mattress might be a good idea.

While that may be tempting, bankers here say their depositors can rest easy knowing their money is safe and sound.

"I know people have fears because of the problems in some investment houses," said Arvest's Richard Kimberlin, who is chairman of the Eastern Region of Arvest Bank - Rogers, which includes Berryville, Eureka Springs and Shell Knob, Mo., bank locations.

"Thirteen banks failed," he said. "There are 8,500 others and 95 percent of those are sound with $1.2 trillion in holdings. The banking industry is in good shape.

"Banking in general is in good shape," he continued, "and community banks should be able to lend as usual."

Arvest is a $10 billion bank in a four state area, which includes Kansas, Missouri, Arkansas and Oklahoma, he said, and it has $950 million in capitol.

"Anyone can go to Arvest.com and look at our bank's financial report," he commented. "And, anyone can go to www.fdic.gov to check on any bank."

In addition, Kimberlin said, the amount insured by the FDIC was recently raised from $100,000 to $250,000 per account.

"Those premiums are paid by the banks," he said, "at no cost to the taxpayer.

"Nothing has changed in the seven years I've been here at Arvest," he continued. "Policy and procedure have not changed in that time. We are willing to lend money. In Carroll County and in Arkansas -- it is business as usual. We are strong and sound."

Deretha Walker, of Community First Bank in Berryville, agrees that local banks are not in danger, "though that's not to say that some will (not) fall through depending on their income source. If a borrower is in a line of work that is affected, we may see some past-due problems, but not in massive numbers."

There is still money to be borrowed for quality loans, she said. "We've tried to stick with the tried and true and not get in to" what she termed "creative financing," she said.

With 22 years experience in the banking industry, she said " I think if I've learned anything, we just have to stay the course, go straight in the stream and not jerk from one side to the other. With normal lending procedures, we'll do just fine."

Charlie Cross at Bank of Eureka Springs said he "couldn't agree more."

"It think that what some did was get caught up in euphoria," he commented. "When you do that you have to watch yourself as a banker or you'll do things you normally wouldn't do."

Cross points with pride to the late September award of a five-star rating from Bauer Financial for performance, safety and soundness, the only bank in Northwest Arkansas to be so recognized.

"Our business is strong, with double-digit percentage growth this year -- one of the best performance years in 97 or 98 years," he said. "And we're going to continue as we've done, providing loans and capital to the local community and tourist economy. We have plenty of money to loan and don't plan to stop."

Bill Hudspeth, president of First National Bank of Berryville had this to say: "Due to our conservative approach, which was derived from being one of the few banks to survive the Great Depression, we are as financially sound as we've ever been.

"We have almost two times the required capital and no investments in the products plaguing other institutions," he continued. "Having been in business since 1889 we've proven time and time again we can weather a storm."

Larry Brandt, with First Federal Bank, said FFB "is healthy and we are classified as 'well capitalized' by exceeding all the capital amounts required by our banking regulators.

"Like all banks," he continued, "we have some bad loans but are continuing to make loans in all of our market areas.

"I might also add that bank deposits at all banks in our market area are insured by the FDIC at a minimum of $100,000 per qualified account and no one has ever lost a penny in an FDIC insured account."

First National Bank of Green Forest President Steve Stafford said FNB is not experiencing the problems that are occurring in the financial industry today.

"We invest our deposits locally and do not invest in the types of products that are causing today's problems," he said. "We have served the local area for over 75 years and we want our customers to know their deposits are safe and secure."

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