Services have grown after bank's purchase

CEO says new reviews help amid crisis

By David Smith

Posted: July 29, 2009 at 2:54 a.m.

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LITTLE ROCK — Eight months after First National Bankers Bankshares of Baton Rouge, La., acquired Arkansas Bankers' Bancorporation, the sale has allowed the Arkansas institution to offer services that are helping banks during the recession.

Among the new services are loan reviews and compliance reviews, said Jimmy Thomason, chief executive officer for Arkansas Bankers' Bank. Banks need outside compliance and loan reviews to be certain they are meeting state and federal regulations, Thomason said.

"I think the reviews will certainly help banks through the economic crisis," Thomason said.

With the likelihood that Congress will place additional regulations over banks, banks will need more reviews to be sure they are observing possible new regulations, Thomason said.

A bankers' bank supplies various services to other banks, but does no banking for individuals.

The Arkansas Bankers' Bank also offers insurance and investment services, which it didn't provide before the acquisition.

"We're really just getting started on [offering] most of these services," Thomason said.

There are 72 Arkansas banks that are stockholders in the Louisiana bankers bank, Thomason said. Arkansas Bankers' Bank offers services to more than 120 Arkansas banks, Thomason said. First National Bankers Bankshares in Baton Rouge also owns bankers banks in Mississippi and Alabama.

John Manatt, chief executive officer of Peoples Bank in Sheridan, said some of the bankers' bank services are less expensive than what he used to pay.

"There are other products out there at other places," Manatt said. "But it's good to be able to trust someone you already have a relationship with."

One product Peoples Bank uses is a software program that allows the Sheridan bank to track its bond portfolio, Manatt said.

"It handles the accrued interest and payments of bonds on computer, which makes it very accessible to us," Manatt said.

More than a year ago, Thomason was worried about the foray into Arkansas by Silverton Bank of Atlanta, one of the largest bankers banks in the country. Silverton was aggressively seeking business in Arkansas. That was one reason Arkansas Bankers' Bank decided to sell.

But Silverton was closed by federal regulators in May, in part because of a rise in nonperforming loans it made to banks.

"Fortunately, we didn't lose alot of customers [to Silverton]," Thomason said.

About a month ago, Arkansas Bankers' Bank acquired the third floor of the former Little Rock branch of the Federal Reserve Bank from Bank of the Ozarks for almost $1.4 million. Arkansas Bankers' Bank will more than double its space when it moves into the building on Capitol Avenue later this year, from about 6,000 square feet to more than 12,000 square feet.

Bank of the Ozarks and Mainstream Technologies bought the building for $4.3 million in March last year. Mainstream Technologies moved into the building last year, and Bank of the Ozarks plans to open a branch in the building later this year.

Business, Pages 23, 28 on 07/29/2009

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