Venture Center, partner recommit to foster community banking

Three years of success was enough to persuade a national banking organization to extend its partnership with the Little Rock Venture Center, which is poised to continue developing global financial technology startups focused on community lenders.

Last week, the center’s financial-technology accelerator program announced a multiyear commitment from the Independent Community Banker of America, extending a partnership that began in 2018. The agreement will last through 2024 and continue the ThinkTech Accelerator program, which is a 12-week boot camp focused on mentoring startups that develop products and services for community banks nationwide.

In the ThinkTech Accelerator program, community banks and financial-technology companies work together to develop new services specifically for the lenders and their customers.

The initiative “has developed a reputation within the fintech community as one of the best for entrepreneurs looking to enter the community banking industry,” said Kevin Tweddle, senior executive vice president of the banking organization.

The national banking group has contributed $1 million annually to the accelerator, including $75,000 in seed capital to each participant.

Banking regulators applaud the program for its innovative efforts to revitalize the financial services landscape.

“Forums like the ICBA ThinkTech Accelerator program are pivotal in fostering a creative and thoughtful approach to innovation,” said Beth Knickerbocker, chief innovation officer at the Office of the Comptroller of the Currency.

The state has committed financial and technical resources to support the community banking program.

“Congratulations to the ICBA and The Venture Center on their long-term partnership through the ICBA ThinkTech Accelerator, bringing the most innovative technologies to community banks across America,” Gov. Asa Hutchinson said in a news release.

Most recently, two ThinkTech cohort alumni achieved national recognition for their work in supporting the federal Paycheck Protection Program, which provides forgivable loans to help small businesses stay afloat during the coronavirus pandemic.

Springdale-based Teslar Software worked with entrepreneur and Dallas Mavericks owner Mark Cuban and Citizens Bank of Edmond, Okla., to create a website for the loan program.

And Lendsmart, which won the top prize at this year’s ThinkTech accelerator, has developed software that makes it easier for business owners to apply for the loans provided through the U.S. Small Business Administration.

BANKING UPDATE

The banking team at Stephens Inc. reports that two of Arkansas’ largest banks remain in the top 10 in the firm’s coverage area for deferring customer loans during

the pandemic.

Home BancShares Inc. of Conway was ranked fourth with 25% of its total loans deferred for 90 days, while Simmons First National Corp. of Pine Bluff ranked eighth, providing payment relief on 22% of its loan portfolio.

Little Rock’s Bank OZK had deferred 3% of its loans, among the lowest in the region.

The report also noted that “specific sectors maintain increased risk to the ongoing economic downturn,” including energy, senior living, airlines, transportation, hospitality, restaurant, gaming/casino and retail.

Of the 121 banks covered by Stephens’ analysts, the median exposure to the higherrisk loan categories was nearly 15% of loan balances.

Simmons has 28.5% of deferments in the high-risk sectors, Home BancShares has 16.7% in those categories, and Bank OZK reached 11.8%. The highest exposure rate was BOK Financial Corp. of Tulsa at 40.7% of loans.

Overall, the median level of all loan deferments increased from 11.6% in April to 12.6% in the review released June 5.

The information is based on public filings or presentation from the banks, though only about one in every four banks provided updated deferment details.

“On the upcoming July bank earnings calls, we believe a key data point will be how many borrowers on the original 90-day deferments (since March/April) will require an additional deferment in June/July,” the Stephens report said.

KEEP YOUR DISTANCE

The Federal Reserve conducted a study in May to learn more about whether folks are staying home to help quash the spread of the coronavirus. The Pine Bluff area was included in the research effort.

Pine Bluff residents, the study said, “showed some of the lowest levels of social distancing during the weekdays, with weekends returning to pre-crisis levels of activity.”

The federal bank used geolocation data at the county, metropolitan statistical area, state and national levels to build a Social Distancing Index. Social distancing, in this context, refers to staying home — not putting 6 feet between you and other people in social settings.

It used seven mobility variables to capture the length of time devices are at home or away as well as the distance devices travel from home.

Nationally, the largest increase in the index occurred during the week of March 15, and has loosened up over time. Predictably, more folks are out of the house on weekends and stay home during the week.

HEALTH WOES TO PERSIST

The coronavirus pandemic will push the nation’s economy into its worst downturn this year in more than seven decades, according to business economists. The group said last week that it expects growth to pick up again in 2021.

Overhanging that forecast, though, is the risk that a second wave of the coronavirus could threaten the economy once again.

A survey by the National Association for Business Economics predicts that gross domestic product will fall nearly 6% this year. That would be the greatest annual decline since a drop of 11.6% in 1946, shortly after the end of World War II.

The association also is forecasting a rebound beginning in the second half of this year, but that revival won’t make up for coronavirus-induced economic devastation.

In 2021, the panel predicts domestic product growth of 3.6%. However, that would be interrupted if a second round of viral infections occurs.

The updated forecast is a sharp downgrade from the panel’s December 2019 survey results, which predicted the economy would grow 1.8% this year.