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State of the State 2024: Arkansas banks navigate uncertain interest rate landscape – Talk Business & Politics

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State of the State 2024: Arkansas banks navigate uncertain interest rate landscape – Talk Business & Politics


Editor’s note: The State of the State series provides reports twice a year on Arkansas’ key economic sectors. The series publishes stories to begin a year and stories in July/August to provide a broad mid-year update on the state’s economy. Link here for the State of the State page and previous stories.

According to the state’s top banking official, the uncertain interest rate environment is the most significant conversation topic entering the year.

“The rate environment is posing headwinds for many institutions, but tailwinds for others,” said Susannah Marshall, Arkansas State Bank Department commissioner. “Especially those that have structured their balance sheets to be in an asset sensitive position and to take advantage of repricing assets at higher interest rates.”

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Marshall said banks with strong mortgage divisions bore the brunt of the interest rate volatility in 2023 and will remain impacted until a downward movement emerges.

“I don’t want to attempt to predict what will happen with interest rates in 2024 or the timeframe of any potential rate decreases,” she said. “Regardless of whether we will see any additional increases or rates remain flat for the foreseeable future, I believe any potential declines could be further out in 2024.”

Marshall and other Arkansas banking leaders offered various thoughts on the industry entering 2024. According to the latest data from the Federal Deposit Insurance Corp. (FDIC), 82 federally insured lenders doing business in Arkansas had a cumulative net income of $1.49 billion through the third quarter of 2023, up 4.1% from the previous year. The banks grew their combined assets robustly to $165.6 billion, up 7.3% year-over-year. Loan growth was even stronger at 13.8%. Construction loans accounted for a third of that growth, reflecting the vibrant economy.

Tim Yeager expects banks to remain strong — Arkansas’ average return on assets (ROA) of 1.23% is well above the benchmark ratio of 1% — but they are unlikely to match their 2023 performance.

“The lagged effect from high interest rates will lead to slower loan growth, an increase in problem loans, and a shortage of core [stable] deposits,” said Yeager, a finance professor who holds the Arkansas Bankers Association Chair in Banking at the University of Arkansas. His responsibilities include teaching, research and outreach to Arkansas bankers. “Loan demand will slow as businesses and consumers adjust to higher interest rates. In addition, borrowers will struggle to repay the higher interest payments on their debts, leading to more problem loans.”

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Like many analysts, Yeager said he expects the Federal Reserve to lower interest rates in the coming months, which will somewhat reduce the pressure on loan demand and funding costs. He said Arkansas bankers are most concerned about a longer-term issue: the ability to hire and maintain qualified workers. He noted that many top students in finance want careers in investment banking, primarily because they think they can make more money on Wall Street.

That might be true, but he tries to explain that there are other advantages of working for a bank.

“We need to get the message across that this is a soul-fulfilling career,” Yeager said. “You’re going to do well, but will you be a millionaire or a billionaire? It’s less likely. But you will have a much more balanced, satisfactory life by doing this.”

According to the American Bankers Association, Arkansas banks employ around 16,000 people at over 1,000 offices and branch locations and have around 5 million customers.

‘ARTIFICIAL’ ECONOMY
Simmons First National Corp. (Simmons Bank) of Pine Bluff is one of the state’s largest banks, with $27.5 billion in assets. It’s one of four Arkansas-based lenders with assets greater than $21 billion at the end of last year’s third quarter. Bank OZK of Little Rock ($32.7 billion), Arvest Bank of Fayetteville ($27.3 billion) and Centennial Bank of Conway ($21.8 billion) were the others.

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George Makris Jr. is the bank’s president and CEO. He said that after a decade marked by growth through acquisition, Simmons Bank is focused on organic growth and efficiency in 2024.

“We acquired 13 banks [in five states] in the past 10 years, which has given us access to some of the best markets,” he said. “We are improving our delivery channels and standardizing many internal functions. That combination should produce favorable financial results leading to capital growth and additional capacity to offer to our customers.”

Makris said the uncertainty around interest rates coupled with government spending and its upward pressure on inflation makes for an “artificial” economy, and that environment will trickle down to consumers.

“Banks are in the risk management business and will shift as much of the risk to the borrower as possible under uncertain times, which will restrict credit access,” he said. “That is more severe for the least credit-worthy borrowers. Loan funding costs and the cost of capital are also negative drivers of access to credit. That said, access to credit is still there for solid projects. Speculative projects will sit on the sidelines.”

Makris joked that his crystal ball has a crack in it, but he predicted that if inflation remains steady for the first half of the year – the current U.S. inflation rate is 3.4% for the 12-month period leading up to December 2023, according to the Bureau of Labor Statistics – a modest rate reduction could come in late 2024.

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“However, this is an election year, and whether we like it or not, politics plays a role in many governmental decisions,” he said.

Makris also offered an opinion on artificial intelligence (AI) in banking.

“Banks are certainly aware of the proliferation of AI discussion,” he said. “That has driven much of the buzz for tech stocks. However, I believe we need to be very cautious and deliberate in advancing AI. It will be used for nefarious purposes well before we have maturity and risk protocols to mitigate bad actors.

“The other element not discussed much is who is teaching AI to deploy its logic. Banks have been using variations of AI to determine probability, relationships and other integrated data sets.”

Marshall also alluded to the increasing threat landscape regarding cyber risks and their impact on the industry.

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“This increasing risk also translates into increased costs and pressure on resources,” she said. “Unfortunately, many comments I have received lately center around bankers’ concerns about the increases in fraud attacks on their customers and the impact it is having on the industry.”



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Arkansas

Arkansas’ U.S. senators talk with farmers, map out timeline for assistance | Arkansas Democrat Gazette

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Arkansas’ U.S. senators talk with farmers, map out timeline for assistance | Arkansas Democrat Gazette


Cristina LaRue

clarue@adgnewsroom.com

Cristina LaRue covers agriculture for the Arkansas Democrat-Gazette. She started her career as a journalist in 2017, covering business and education for the Northeast Mississippi Daily Journal, later covering the crime and courts beats near the U.S.-Mexico border for the USA Today network, and education for the El Paso Times. She is a graduate of Texas State University.

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Arkansas PBS to drop PBS, rebrand as Arkansas TV

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Arkansas PBS to drop PBS, rebrand as Arkansas TV


Arkansas PBS, the statewide network operated by the Arkansas Educational Television Commission, announced Thursday that it will drop PBS programming and change its name to Arkansas TV.

The current PBS contract ends June 30, 2026, and local viewers will start seeing the branding change across platforms over the next several months. Starting next summer, the organization plans to deliver “several new local shows, as well as favorites from the last 60 years,” according to a news release.

For the time being, the broadcast lineup will change little, according to the release. Arkansas TV will be the third public television station or network to formally cut ties with PBS, following WEIU-TV in Charleston, Ill., and WSRE in Pensacola, Fla.

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The decision follows the organization’s loss of approximately $2.5 million to its annual budget due to the rescission of federal funding by Congress. In the release, Arkansas TV said continuing to pay its annual PBS membership dues of nearly $2.5 million was “simply not feasible for the network or our Foundation.”

The eight-member AETC voted 6-2 at a meeting Thursday not to renew the PBS contract. Arkansas’ governor appoints AETC members to eight-year terms.

Wing

The discussion was led by new Arkansas TV CEO Carlton Wing, who was appointed to the role in September and replaced Courtney Pledger, who resigned in May. Wing said the network has been able to survive fiscal year 2026 “by dipping into reserves and by some unprecedented fundraising from our foundation. That’s not a long-term business strategy.”

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Wing is a former Republican state representative and is also co-founder of the Wing Media Group, which produces lifestyle content about outdoor activities such as fishing and hunting. He said Arkansas TV plans to produce about 70% of its programs locally, with the remaining 30% coming from American Public Television and the National Educational Telecommunications Association.

“I have already had multiple meetings with people who have never even thought about doing business with public television before that are now very interested with an Arkansas-centric focus, because most of our programming has not been Arkansas,” Wing said. “In fact, 5.5% of our programming is locally-produced.”

Before the vote, commission member Annette Herrington said the foundation could cover PBS dues for at least another year. “I think this decision doesn’t have to be made today,” she said.

“We come back a year later and end up potentially making the same decision, however, with far less of a financial cushion to make that decision,” replied Wing, who said waiting could drain the foundation’s coffers.

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Harrington and commission member Cynthia Nance voted no to cutting PBS.

Arkansas PBS signed on in 1966 and became a PBS station in 1970. In its release, the network said PBS content will continue to be accessible in “a number of ways.”

In an FAQ on its website, Arkansas TV directs viewers seeking to continue their PBS Passport member benefits to WKNO-TV in Memphis, Tenn.; Ozarks Public Television in Springfield, Mo.; Mississippi Public Broadcasting; Louisiana Public Broadcasting; and the Oklahoma Educational Television Authority.

Arkansas TV will also drop PBS Kids programming and the Create and World channels. The network will have “award-winning children’s programming that’s been created locally over the last several years, and we’re planning even more for the future,” it says on its website.

The new branding for Arkansas TV drops the blue color associated with PBS.

“We’ve got a great lineup coming in 2026 with two children’s series, two food-related series, two history series, and even more that are in the initial phases of development and fundraising,” it adds.

During the meeting, Arkansas TV CFO James Downs said he estimates an annual cost of $969,000 for programming going forward, comprising $500,000 for new local productions and $469,000 for acquisitions.

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The FAQ page says the Arkansas PBS Foundation will be renamed and that there are no plans to close it. The network says it is hoping that current donors and members will continue to support it.

The change was met with criticism online. In one Facebook post, multiple viewers said they would transfer their monthly donations to other PBS stations to maintain access to their favorite programs. “I cannot believe that the Arkansas educational TV organization would vote to walk away from DECADES of quality programming!” viewer Ken Howard wrote. “My family will be transferring our donations and our support to PBS.org. Very shortsighted decision!”

At least two viewers called the move a “bait and switch,” pointing out that the state network had asked for donations in the months following the rescission yet dropped PBS.

“I bet this comment section isn’t going the way you wanted it to,” wrote viewer Amy Bradley-Hole.

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Arkansas’ 2026 schedule unveiled

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Arkansas’ 2026 schedule unveiled



FAYETTEVILLE, Ark. – Arkansas will open the Ryan Silverfield era at home on Sept. 5 against North Alabama as part of a home schedule that features seven home games, including five Southeastern Conference games as part of the league’s first-ever, nine-game conference slate.

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The Razorbacks open the season inside Donald W. Reynolds Razorback Stadium against North Alabama on Sept. 5. Coach Silverfield will coach his first game as the Head Hog in the program’s first-ever meeting with Lions. Another program first awaits the following week with a trip to Utah (Sept. 12) for the first football game between the two schools. The road game at Utah will be the Hogs’ third at a Big 12 opponent in five seasons following trips to BYU in 2022 and Oklahoma State in 2024.

Arkansas returns home to Fayetteville for back-to-back games with its first Southeastern Conference game of the season against Georgia on Sept. 19. The Bulldogs’ visit to Razorback Stadium will be the team’s first since 2020 when the two teams squared off in the season opener. Arkansas’ final non-conference game of the season is set for Sept. 26 vs. Tulsa. The matchup will be the 74th in a series that dates back to 1899.

A three-game stretch to start October features games at Texas A&M (Oct. 3) and at Vanderbilt (Oct. 17) with a home game against Tennessee (Oct. 10) in between. The trip to Texas A&M will be Arkansas’ first since 2020 and the trip to Vanderbilt will be the first for the Razorbacks since 2011 and mark just the 11th meeting all time between the two programs. Despite joining the SEC in 1992, the Hogs and the Commodores have played just seven times with only three coming in Nashville.

Arkansas’ bye week is set for Oct. 24 before wrapping up the month with a home game against Missouri (Oct. 31). The Battle Line Rivalry moves up the schedule from its traditional final game slot for the first time since Mizzou joined the league. The Razorbacks and Tigers have closed every regular season – except the pandemic-shortened schedule in 2020 – against each other since 2014.

November begins with a trip to Auburn (Nov. 7) before closing the season at home in two of the final three regular season games. South Carolina makes the trip to Fayetteville on Nov. 14 for the first time since 2022. A return trip to Texas (Nov. 21) serves as the final road game on the slate. The Battle for the Golden Boot returns to its regular season finale position on the schedule on Nov. 28. Arkansas and LSU battled on the final weekend of the regular season from 1992 when the Hogs joined the SEC through the 2013 season.

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Football season ticket renewals will take place from January 20 through March 31. New season tickets can be purchased by clicking here. All new season ticket purchasers will have the opportunity to relocate their season ticket locations during Razorback Seat Selection in April. Additional season ticket inventory will be made available following the seat selection process.

2026 Arkansas Football Schedule
Date – Opponent
Sept. 5 North Alabama
Sept. 12 at Utah
Sept. 19 Georgia*
Sept. 26 Tulsa
Oct. 3 at Texas A&M*
Oct. 10 Tennessee*
Oct. 17 at Vanderbilt*
Oct. 24 Bye
Oct. 31 Missouri*
Nov. 7 at Auburn*
Nov. 14 South Carolina*
Nov. 21 at Texas*
Nov. 28 LSU*
*Southeastern Conference game



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