Arkansas Bankers' Bank*

City: Little Rock
Category: Category II (26-75 Employees)
Year: 2001

Back in 1989, Bill May was an experienced banker looking for a job. He had an idea that Arkansas might be ripe for an independent "bankers' bank," a correspondent bank owned by its customer banks that could save them money by operating on a break-even basis.

He talked four investors into giving him $2,500 each, "and that's the only money we ever put into this thing," he said. He called on bankers across the state, sold $2 million worth of stock, and got a charter in April 1990.

Last year, Arkansas Bankers' Bank cleared $1.63 million after taxes, more than double its net income in 2000. But it hasn't raised the rates it charges the 150 banks that use ABB to process checks, invest excess funds and keep safe their securities investments - all of which is done electronically.

"We grossed just short of 10 million last year, but we run several billion dollars a day through these little computers," May said. "We don't have a cent of cash in our bank. We can't even put 'bank' on our front door because if we ever got robbed, we wouldn't have any money to give them."

Arkansas Bankers' Bank operates with 25 employees (the 26th who put the bank in Category II retired last month) and counts 150 of the state's 180 eligible banks as

customers.

While ABB does not compete with its bank customers for loans and deposits, a few other banks in the state compete with ABB on correspondent banking services. First Commercial Bank, performed correspondent banking for 32 banks, but 27 of them are now using ABB since Regions Bank, which bought First Commercial, got out of the correspondent banking business.

ABB recently moved its operations to the former Bank of Mulberry building in Little Rock. May is retiring at the end of the year and he is being succeeded by Jimmy Thomason.

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