Up To 19 Banks May Seek Funds From Former Arvest Head Smiley

Division Of Stock Options in Question

Smiley
Smiley

Arvest Bank is asking Benton County Circuit Court to decide the fate of $551,755 in stock options it is holding for a former executive.

The stock options belonged to H. Dennis Smiley Jr., who resigned March 13 as president and chief executive officer of Arvest Bank of Benton County.

Bank List

Arvest Bank listed 19 banks in an April 2 filing that may have a claim to nearly $552,000 in stock options for H. Dennis Smiley. The bank claims Smiley improperly used the stock as collateral for loans with some or all of the listed banks.

• BOFK, National Association

• The Bank of Fayetteville

• Bank of the Ozarks, Little Rock

• Benefit Bank, Fort Smith

• Chambers Bank, Danville

• Centennial Bank, Conway

• Delta Bank & Trust, Parkdale

• First Bank, Hampton

• First Federal Bank, Harrison

• First National Bank of Fort Smith

• Integrity First Bank, National Association

• First Security Bank, Searcy

• First State Bank, Lonoke

• First State Bank of De Queen

• First State Bank of Northwest Arkansas, Huntsville

• First State Bank, Russellville

• First Western Bank, Booneville

• Legacy National Bank, Springdale

• Summit Bank, Arkadelphia

Source: Court Filing

Jason Kincy, Arvest spokesman, said Smiley's reasons for resigning are "personal in nature, and we are not going to comment on his personal situation."

Arvest claims in an April 2 filing in Benton County Circuit Court that Smiley used his Arvest stock options as collateral on loans from as many as 19 banks, something Arvest prohibited him from doing.

The filing said Arvest should not be required to decide who gets the money because the other banks may claim more of the money than is available.

Delta Trust & Bank is one of the banks listed in the Arvest filing. It is the first bank to sue Smiley for default on what appears to be the last loan Smiley took out.

Delta Trust & Bank filed suit against Smiley on March 25 claiming he defaulted on the initial payment of a $245,126 loan taken out Feb. 20. The Delta Trust & Bank suit also names HDS Holdings LLC and Smiley's father, Henry Dennis Smiley Sr., as co-defendants.

The elder Smiley is chairman of First State Bank of De Queen, another bank listed in the Arvest court filing.

The Delta Trust & Bank default filing states the defendants "acquired the loan proceeds from lender under such circumstances that they knew or should have known that such funds could not and would not be repaid."

The filing also shows Smiley used his Arvest Bank common stock shares as collateral.

Local banking observers anticipate more civil suits to follow with so many banks involved.

Neither the Federal Bureau of Investigation or the U.S Attorney's Western District of Arkansas would comment on whether they were investigating the matter.

John Dominick, a banking professor at the University of Arkansas, said it will be interesting to see how Smiley was able to secure so many loans with the same collateral.

"When a bank knows someone real well and believes they are upstanding folks, they are less likely to do everything they should do," he said. "Apparently these people were not checking things out."

Don Gibson, president and chief executive officer of Legacy National Bank, said he was surprised when he learned of the situation. Legacy is another bank listed in the Arvest filing. Gibson confirmed Smiley has a loan with the bank, but declined additional comment.

Smiley started his Arvest career in 1989 as a commercial loan officer at McIlroy Bank in Fayetteville. He served as president of Arvest Bank of Springdale from 2001 until April 2012 when he was named to the top Benton County post.

Arvest is searching for a replacement.

"We are in the process of selecting a replacement president for Arvest Bank Benton County, and will make an announcement sometime in April," Kincy said in an email.

NW News on 04/08/2014

Upcoming Events