Money Talk: Kansas bank expands into Arkansas with acquisition of Harrison’s Community First Bank

Editor’s note: Each Monday, Talk Business & Politics provides “Money Talk,” a wrap-up of banking and financial news.
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KANSAS COMMUNITY BANK EXPANDS FOOTPRINT INTO ARKANSAS WITH ACQUISITION OF HARRISON’S COMMUNITY FIRST BANK
Wichita, Kan.-based Equity Bancshares Inc. announced on Thursday (Nov. 10) that it has expanded its footprint into Arkansas with the acquisition of Community First Bancshares Inc. (CFBI) of Harrison. The CFBI merger, first announced in July, is Equity’s tenth strategic transaction in the past 14 years. Community First has five branch locations in Harrison (2), Berryville, Eureka Springs and Pea Ridge. At the end of the first quarter, the Arkansas bank had total assets of $475 million.

Publicly-traded Equity now has $2 billion in assets, including $1.3 billion in loans, $1.6 billion in deposits, and 34 locations throughout its footprint spanning Kansas, Missouri and Arkansas. As part of the agreement, CFBI’s Jerry Maland and Dan Bowers will join Equity’s board of directors. Locally in Arkansas, Ann Main will serve as market leader of Equity’s Ozark Mountain region, David Morton will serve as Arkansas CEO, and Danny Criner as Chief Credit Officer.

LOW INTEREST RATES THE NORM, ST. LOUIS FED’S BULLARD SAYS
Federal Reserve Bank of St. Louis President James Bullard on Thursday (Nov. 10) discussed how a single equation can describe much of the state of the current monetary policy debate. In his “Safe Real Interest Rates and Fed Policy” speech at St. Louis-based Commerce Bank’s annual economic breakfast, Bullard said the regional Fed’s new regime-based approach to near-term U.S. macroeconomic and monetary policy projections, which was adopted in June, fits within this one-equation format.

“The bottom line: Low interest rates are likely to continue to be the norm over the next two to three years,” Bullard said. Bullard noted that the Federal Open Market Committee (FOMC) operates by setting a short-term nominal interest rate which is also referred to as the policy rate. It influences all other nominal interest rates. The policy rate setting is currently 38 basis points, which is extraordinarily low by postwar historical standards.

“The FOMC is considering raising the policy rate to a somewhat higher level,” he said, adding, “the St. Louis Fed’s rate path projection is much flatter than those of the rest of the Committee.” For a copy of Bullard’s recent monetary policy speech, click here.

U.S. CYBER INSURANCE MARKET GROWS AMID DATA BREACH CONCERNS
U.S. insurers are becoming more skilled at underwriting and pricing stand-alone cyber insurance policies as businesses show a greater interest in protecting themselves from data breaches and attacks, according to the Insurance Information Institute.

More than 60 carriers now offer stand-alone cyber insurance policies, and it is estimated the U.S. market is worth over $3.25 billion in gross written premiums in 2016, with some estimates saying it has the potential to grow to $7.5 billion, according write Dr. Robert Hartwig, author of newly released white paper, “Cyber Risk: Threat and Opportunity.”

According to the report, some experts believe that exposure is greater than the insurance industry’s ability to adequately underwrite the risk. Attacks have the potential to be massive and wide-ranging due to the interconnected nature of this risk, which can make it difficult for insurers to assess their likely severity. The underreporting of attacks means that accurately evaluating exposures is challenging. Several insurers have warned that the scope of the exposures is too broad to be covered by the private sector alone, and a few observers see a need for government cover akin to the terrorism risk insurance programs in place in several countries.

To view the report, click here.