Chambers Chairman Faces Fine

The Federal Deposit Insurance Corp. announced last week that it had popped fines totaling $432,000 against John Ed Chambers III of Danville and five compatriots described as “institution-affiliated parties” of First Community Bank of Crawford County, the bank newly chartered in Van Buren back in 2000.
The six orders were curious for several reasons:
First, their sizes. Chambers was fined $150,000, Jacob Perryman “Perry” Mikles III of Booneville was hit for $165,000. Even the $60,000 penalty against Everett Emmett “J.R.” Young Jr. was larger than any other FDIC penalty imposed in Arkansas in at least 15 years. Rick Leon Millsap, CEO of Petit Jean Poultry in Danville, and Danville businessman Thomas Roy Akin were fined $22,500 each, while Bobby W. Stephens got a comparative slap on the wrist of $12,000.
Second, the orders give not a single hint as to what they did to draw such stiff penalties. Each man apparently entered a “consent agreement” in which he agreed to the fine without admitting or denying any wrongdoing. (The agreements are not available online and it may be several weeks before a Freedom of Information Act request scares them up.)
Most curious of all, these men were not officers or directors of First Community Bank. Nor are they associated with Ashley Bancstock Co. of Crossett, the holding company that acquired First Community Bank in November.
Chambers has his own banks — Chambers Bank of Danville and Chambers Bank of North Arkansas at Fayetteville — and Akin is a director of the former.
So why were six men punished as affiliates of a bank over which they exercised no control?
Excellent question. Ultimately we had to turn to unofficial sources but here’s what we think happened:
Back in 2004, Chambers and the others attempted to gain control over First Community Bank by buying small blocks of stock.
At the time, First Community was less than five years old, the minimum age for a startup bank to be acquired by a bank holding company. And it appears the FDIC really didn’t appreciate a stealth takeover by the owner of a bank holding company.
Chambers didn’t return our call; we did reach Perry Mikles and Tom Akin. Both acknowledged that they had purchased stock in First Community Bank.
“The amount of the penalty was because I had purchased more stock than anyone else,” Mikles (pronounced “Michaels”) said before suggesting that we talk to his Little Rock lawyer, Pete Hoover.
Hoover wouldn’t comment at all.
Akin wouldn’t say what the FDIC order was about, other than “it was a ruling they made and we had to abide by the ruling.”
Why Chambers et al would want First Community Bank is another question. Its assets were less than $57 million as of Dec. 31, and its profit last year was only $136,000 for an anemic ROA of 0.26 percent. But even those figures are robust compared to 2004, when this attempt to buy the bank apparently happened. Back then, First Community had a net loss of $195,000 after charging off $519,000.
Maybe the price was right. Neither of Chambers’ banks has an office in Van Buren, which is less than 10 miles from Fort Smith, where Chambers Bank has two branches.
Buying a Northwest Arkansas base of operation makes much more sense for Ashley Bancstock, whose $145 million First National Bank of Crossett is consistently earning ROA of 1.15 percent to 1.2 percent even in the slow-growth market of southeast Arkansas.