Bank Exec Turnover Joins Lower Lending

MORE FORECLOSURES, GREATER loan loss reserves and hammered earnings aren’t the only signs the Northwest Arkansas banking scene remains in flux.

Accompanying the lawsuits and balance sheet adjustments is a shake-up in the hierarchy at a number of lenders in the Benton-Washington county market.

During the past two years, the pace of career moves among banking executives has accelerated noticeably. The coming and going of market presidents and CEOs is propelled by a mix of performance-related turnover and opportunities elsewhere.

A survey of bank rosters indicates at least 21 execs are associated with change at 12 different lenders.

Some of the departures fall under the heading of amicable while others were anything but.

Some positions were essentially phased out because loan volume fell to unsupportable levels. Others vaporized from regulatory intervention. More were shaken because of loan quality issues, operational concerns or corporate reorganizations.

Doug Lynch, former community bank president in Fayetteville for Jonesboro’s Liberty Bank of Arkansas, made his career move in October 2008. His take on the banking turmoil in Northwest Arkansas is simple: too many lenders with the same aggressive business model.

“It became unrealistic for the market to sustain,” said Lynch, now Northwest Arkansas regional president in Fayetteville for Little Rock’s Delta Trust & Bank.

The move reconnected him with a Little Rock banker he worked for at his first job more than 20 years ago: Carroll Penick, now chief operating officer and chief lending officer with Delta Trust & Bank.

Preceding Lynch’s move, Mark Mizelle left as president of the Rogers-Bentonville market for Liberty Bank in 2007 to become president of the Benton County operations for Community First Bank of Harrison Lynch’s position at Liberty wasn’t filled after he left, a scaling-back decision repeated at other lenders. His former employer described the parting of the ways as friendly.

“We’re probably being a little more gun-shy and tougher now on loans,” said Wallace Fowler, chairman and CEO of Liberty Bank. “When that market started turning, it was a lesson for all the loan officers who had had long-time relationships with customers. There were adjustments that loan officers and customers had to make. Good customers sometimes found that hard to take.”

How is business these days?

“Profits are not what we’d like to have,” Fowler said. “We have had our share of opportunities in Northwest Arkansas. We’ve only had two or three major problems. I guess anything over $1 million is major to me.”

Going Beyond ‘Major’
Financial losses and changing market conditions spurred two rounds of executive turnover at Parkway Bank of Rogers.

The bank, which relocated its charter from Portland (Ashley County) in 2004, lost $1.59 million in 2008 after losing $490,000 at the end of 2007. An executive cadre of former Arvest bankers who helped establish Parkway in Northwest Arkansas began leaving two years ago. That changeover, which began with bank president Jerry Carmichael and included the departure of his successor, Brad Collier, concluded this year with the exodus of Jerry Sadler as chairman and CEO.

End result: Bob Taylor becomes president and CEO of Parkway Bank after leaving as CEO of what was Chambers Bank of North Arkansas in Fayetteville.

Behind Taylor’s move, Bill Donnell became president and CEO of the Northwest Arkansas operations in Fayetteville for Chambers Bank. Donnell was president of Chambers Bank in Danville.

The previous Northwest Arkansas president for Chambers Bank was Justin Salter, one-time son-in-law of John Chambers, CEO of Chambers Bancshares Inc.

Shannon White, Northwest Arkansas division president for Bank of the Ozarks, became a casualty this year when a loan dispute with developer Gary Combs turned nasty and went to court in May.

Combs leveled accusations that White “had his wife contracting employment” with him at his Waterford Estates development in violation of the bank’s published code of ethics.

By June, a settlement was reached, the bank took a $10.5 million write-down and White was gone. Bank of the Ozarks agreed to forgo any attempt to secure a deficiency judgment against Combs and collect $400,000 of outstanding interest he owed on his financial package with the bank. In exchange, Combs transferred ownership of the Waterford Estates property to the bank without further delay and dropped a May lawsuit seeking $108 million in alleged damages from Bank of the Ozarks.

Harvey Williams, an executive vice president in the bank’s Bentonville office since August 2006, was tapped to replace White. Williams started his commercial banking career in 1985 with Simmons First National Bank in Pine Bluff.

He was senior vice president of loan operations and correspondent banking when he left in 2004 to join Bradley Lumber Co. Williams, chief financial officer with the Warren lumber company for 18 months, got back into banking with First Security Bank in Fayetteville in 2005.

Change Trickles to LR
Change at Little Rock’s Metropolitan National Bank was not unexpected as losses from real estate-related lending in Northwest Arkansas mounted.

James Stobaugh, a veteran banker with the Worthen organization and its predecessors, was recruited in March to oversee Metropolitan’s Northwest Arkansas operations. Wyley Elliott, who held that post, retained the position of Benton County president for a few weeks before leaving. Elliott was president of Summit Bank in Hot Springs before joining Metropolitan in 2005.

Stobaugh also was named president of the Washington County market. That was a post held by Larry Olson, who came to Metropolitan from Bank of Fayetteville where he was chief credit officer. These days Olson is senior vice president and loan review manager for Metropolitan in Little Rock.

The bank reported a second-quarter loss of $32.5 million, which executives attributed to commercial real estate troubles in Northwest Arkansas. That performance followed a loss of $8.6 million in the first quarter and a restated loss of $5.7 million in the fourth quarter of 2008.

Joe Mills left his post as president and CEO of Simmons First Bank of Northwest Arkansas in March 2004 to open Pinnacle Bank of Rogers. Mills left Pinnacle in August 2007 and was replaced by Scott Franklin.

Franklin was to stay aboard as president of Northwest Arkansas operations after the merger with Little Rock’s Central Bank was announced earlier this year. But he left recently, and his duties were taken on by Wade Ruckle, chief financial officer of Lonoke Bancshares Inc., who will be CEO of the merged operations.

Rounding out bank executive moves in Northwest Arkansas is the arrival of John Scott as president United Bank of Springdale. He took over the duties of Jeff Lynch, who left the bank earlier this year to become executive vice president and chief financial officer at Heber Springs State Bank with plans to succeed his father as CEO in 2010.

Executive Moves
METROPOLITAN NATIONAL BANK

In: James Stobaugh, president of northwest Arkansas region for Metropolitan National Bank

Out: Wyley Elliott, president of northwest Arkansas region for Metropolitan National Bank

Now: Larry Olson, senior vice president and loan review manager for Metropolitan National Bank in Little Rock

Was: Washington County president for Metropolitan National Bank in Fayetteville

BANK OF THE OZARKS

In: Harvey Williams, president of northwest division of Bank of the Ozarks
Out: Shannon White, president of northwest division of Bank of the Ozarks

PINNACLE BANK

In: Wade Ruckle, president and CEO at Pinnacle Bank in Rogers
Was: chief financial officer of Lonoke Bancshares Inc.

In & Recently Out: Scott Franklin, president and CEO at Pinnacle Bank in Rogers
Out: Joe Mills, president and CEO at Pinnacle Bank in Rogers

PARKWAY BANK

In: Bob Taylor, president and CEO of Parkway Bank in Rogers

Was: CEO at Chambers Bank of North Arkansas in Fayetteville
Out: Jerry Sadler, chairman and CEO of Parkway Bank
In, Then Out: Brad Collier, was president of Parkway Bank

Out: Jerry Carmichael, was president at Parkway Bank
Now: senior vice president for commercial lending at Rogers loan production office for InTrust Bank of Wichita, Kan.

CHAMBERS BANK

In: Bill Donnell, president and CEO of northwest Arkansas operations in Fayetteville for Chambers Bank

Was: president of Chambers Bank in Danville

Out: Justin Salter, president of Chambers Bank of North Arkansas

UNITED BANK

In: John Scott, president adn CEO of United Bank of Springdale

Out: Jeff Lynch, president and CEO, left to become executive vice president and chief financial officer at Heber Springs State Bank and to succeed his father as CEO in 2010

DELTA TRUST & BANK

Now: Doug Lynch, Northwest Arkansas regional president in Fayetteville for Little Rock’s Delta Trust & Bank

Was: Community bank president for Liberty Bank in Fayetteville

COMMUNITY FIRST BANK

Now: Mark Mizelle, president of the Benton County operations for Community First Bank of Harrison.

Was: president of the Rogers-Bentonville market for Jonesboro’s Liberty Bank of Arkansas