Arkansas Banks stronger than COVID-29

April 6-12, 2020

By Dwain Hebda

The global pandemic may be accelerating and uncertainty running high, but officials with the Arkansas Bankers Association (ABA) are firm in their assertion that the state’s financial institutions are well-positioned to weather the health crisis.

“I can tell you right off the bat, banks are here right now and we’re going to continue to be here,” said Rob Robinson, market president and senior credit officer for Simmons Bank in El Dorado and chairman of the ABA. “COVID-19 is not going to interrupt the traditional bank environment.”

“I can speak for our fellow bankers: We’re in ready preparedness every step of the way – facing all of the questions and challenges … how are we going to do this or that, how are we going to protect our associates, how can we continue to service our customers. We’re all here to try to find the best way we can present a face to our communities and customers that we’re open and we’re going to be here to help you.”

According to Lorrie Trogden, ABA president and CEO, banks are required by law to have contingency plans in place, outlining how operations would continue in the wake of a natural disaster, terrorist attack and even an outbreak.

“Every single bank has a pandemic plan,” she said. “Banks are regularly audited during examinations with their regulators, so every single bank has a plan and we’re on the front line going through things that will flex with what’s needed at the moment. They are financially strong and well-capitalized and well-planned.”

Individual banks weren’t the only ones implementing a disaster mitigation plan, the ABA itself quickly formed an internal task force made up of the executive committee to the board of directors. Trogden reported the task force has been meeting every day via conference call to discuss operational issues, track national trends and form cohesive strategies. Other calls are scheduled to inform the rank and file of relevant developments straight from the mouths of experts, national and state lawmakers and others.

“I come to work every day and ask what the pain points for my members are that I can solve today and how quickly can I get that out to them,” she said. “That’s the impetus for the daily conference calls that we’ve started. We’re averaging about 100 bankers on those calls and they last about an hour.”

“We are also actively gathering things and updating our resource toolkit for coronavirus daily, sometimes hourly. I’m putting information out as fast as I can. As long as our banks are open and they are servicing their customers, the ABA is going to do the same for them.”

Trogden also said the association is networking with peer groups across the country to help determine best practices that can be implemented among Arkansas’s banks.

“I’m on daily calls with our state alliances which are my peers across the country,” she said. “We discuss resources that we’ve found, what’s happening in other states. You’ve seen governors doing different things in other states and how that’s impacted banks and what the association is doing to help those things. So, having those peer-to-peer conference calls, for me, is also very important and helpful.”

Both Trogden and Robinson praised the state’s chief executive and its congressional delegation for responsiveness and leadership on behalf of the banking industry.

“It does takes declarations and it does take some paperwork, but it also takes a delegation like we have in Washington, D.C., to support us at the federal level,” he said. “They are in tune with what’s happening in Arkansas. They are receptive to what recommendations our industry can make to help things move along faster, maybe even identify issues that they have not. They’re involved. I applaud them.” 

“Also, Governor Asa Hutchinson has been fantastic during this time. He’s been available, he’s been quick to act. Because of his actions and the actions in D.C. we’re going to be able to take care of our customers, whether business or consumer, and we’ve done it at light speed.”

The Arkansas contingent, like other bankers’ association across the country, said there are still moves the federal government can make to help soothe the general public’s nerves, particularly as the pandemic wears on. 

“Addressing the FDIC insurance, I think, sends a very strong message of calm, hopefully to Main Street and maybe even Wall Street,” Robinson said. “The Small Business Administration is moving hyper-fast for them and we expect them to be able to provide necessary capital for small businesses that have been impacted. I would think most businesses are going to be eligible for funds through the SBA and they’re doing all they can to get those programs up and running.” 

For the most part, however, addressing the situations clients face in the here and now falls to Main Street institutions. Robinson said on this count, Arkansas’s banks get high marks.

“Before this phone call, I approved two loans to a small business owner in El Dorado. She has a restaurant,” he said. “Since restaurants are closed, and catering is not going to be enough to support a couple of loans she has with us, she’s been approved for six months of interest-only loans.”

“This isn’t a huge business, but it does employ five people and she’s going to be able to operate without worrying about that monthly principal interest payment for the next six months. That literally took me 10 minutes to do. That’s how quick our bank is responding and I’m sure banks across Arkansas have something very similar in place and are doing the same thing for their customers right now as we speak.”

The cumulative effect of these efforts has been relative calm and stability in the state’s banking industry. Customers aren’t making a run on banks in the same manner as toilet paper and hand sanitizer, something Robinson credits to the proactive effort banks are making to stay in touch with customers and continuing to operate, if not as normal, at least as the new normal.

“We’re going to do things in the interim to try to protect both our customers and our employees like distancing ourselves as the CDC has recommended. So, we might be drive-thru only for a while or face-to-face by appointment only in the lobby. There will probably be some growing pains with that, but we’re going to be here for our customers.”   

(PHOTOS PROVIDED)