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Despite Individual Victories, Progress Slow For Women in Arkansas Banking

7 min read

(A correction has been made in this article. See end for details.)

For women in Arkansas’ banking industry, every encouraging development seems to be matched by discouraging reality.

Last week, for instance, Lisa Ray succeeded retiring Cliff Gibbs as one of Arvest Bank’s three regional executives — a direct report to CEO Kevin Sabin and one of four women on the board of directors of the largest bank chartered in Arkansas. Her five submarkets in northwest Arkansas and southwest Missouri represent some $4.5 billion in assets, $4 billion in deposits and 1,061 employees.

Meanwhile, half as many women (three) have the title of CEO at Arkansas banks as they did a dozen years ago, primarily because the small banks that women were more likely to run are being consolidated out of existence.

Arkansas banks employ three times as many women as men, a survey conducted last fall by the State Bank Department found. But at the vice president level and above, only 44 percent are women, and only one in eight directors is a woman.

Bank of the Ozarks Inc., the largest of the state’s publicly traded bank holding companies, is expected to add a third woman to its 15-member board of directors at next Monday’s shareholders meeting.

But the other three public banks — Simmons First National Corp., Home BancShares Inc. and Bear State Financial Inc. — have no women directors out of a total of 34 seats.

Currently, three of the Arkansas Bankers Association’s 25 officers and directors are women: Treasurer Judy Lawton, who was recently promoted to president at Heartland Bank of Little Rock; Elizabeth Farris, who will be leaving the board because she recently retired as Hot Springs market president for Regions Bank; and Cathy Owen, chairman of Eagle Bank & Trust of Little Rock.

The ABA is “working on diversifying our board and our leadership,” President and CEO Bill Holmes said last week, but so far no woman has occupied the 126-year-old association’s top elected position. (This fall, Dorothy A. Savarese, chairman and CEO of a $3 billion thrift in Massachusetts, will become the American Bankers Association’s second female board chair.)

The Arkansas banking workforce is even more overwhelmingly female (76 percent at the 88 banks that responded to the Bank Department’s survey) than the industry nationally (about 58 percent, according to a 2013 report by the Equal Employment Opportunity Commission). But most of those women work in the public-facing retail side of the business or in the back offices.

The commercial lending side, where the salaries are bigger and executives tend to be groomed, is still dominated by men. And that can be a self-perpetuating handicap, especially in a rural state, said Susie Smith, the former COO of Metropolitan National Bank of Little Rock, who left Metropolitan’s acquirer, Simmons Bank, at the end of 2015.

“I don’t think that as many women are entering the commercial lending side of the bank out of college because they have not seen the development of a fully diverse staff,” Smith said. “I don’t think it looks like an attractive place to go unless it’s in a larger metropolitan area.”

Other industries — insurance, health care, accounting — have embraced diversity, of gender and race, in ways the banking industry has not, Smith said. As a result, she said, talented young women see those as “fields they can be more successful in.”

Holmes said banking has had trouble attracting new talent of either sex in the years since the economic crash of 2008, but the industry has been sensitized to the need to recruit, train, retain and reward more women.

That message was underscored by State Bank Commissioner Candace Franks — who became the first woman to head the Arkansas State Bank Department when she was appointed by Gov. Mike Beebe in 2007 — in a speech at the ABA’s first Women in Banking conference in November 2015.

The ABA will hold its second Women in Banking conference in Little Rock in November.

The Ladder

Women have been involved in the banking industry in Arkansas for more than a century, including in top management positions. The Arkansas Banker, the ABA magazine, reported in 1935 that “there are 42 lady banker presidents, vice president, cashiers, and assistant cashiers” plus “scores of girls working in the banks as stenographers, file clerks, etc.”

At that time, there were three women bank presidents in the state: Roberta Waugh Fulbright, a one-woman business conglomerate who was president of Citizens Bank of Fayetteville and mother of U.S. Sen. J. William Fulbright; Agnes Bass of Security Bank at Harrison; and Mattie Edwards of Citizens Bank at Booneville.

Fulbright and Bass succeeded their late husbands as president of the banks in which they were major owners, and family ownership is still an entree into the industry for women.

Cathy Owen, for instance, is the daughter of Harry Hastings Jr., an original investor in what is now Eagle Bank, which was founded as First State Bank in Sherwood in 1967. A few years later, 16-year-old Cathy Hastings took a summer job shredding paper for the bank and fell in love with banking.

But Owen, whose family still owns almost all of the stock in the $390 million-asset bank, says that path does not mean the job is easier. She is generally at the holding company office in west Little Rock by 7 a.m. and rarely leaves before 7 p.m., and that time commitment may be one reason that women — especially those with younger families — have not embraced management-level banking.

Lisa Ray, newly promoted at Arvest, also suggests that women who do enter banking can be holding themselves back from higher level banking careers. Referring to Facebook COO Sheryl Sandberg’s 2013 bestseller “Lean In,” Ray said, “I feel like I could have written some of that book. Women are making choices that limit their careers more than their bosses ever did.”

At Arvest, which Ray joined 27 years ago, “I’ve never really had a reason to think about my gender.” But she still had to be “pulled kicking and screaming” into leadership opportunities by mentors who helped her overcome self-doubt and other objections.

“Women don’t apply for a job until they feel like they have mastered everything, where men will take a leap three levels up,” she said.

Ray came up through the deposit side of the bank, but as a management trainee she was encouraged to attend loan committee meetings.

In the Springdale market, which Ray ran until her promotion, two of five commercial lenders are women. Others could be if they wanted, she said.

“I have had so many conversations with women over the years who just don’t want to be a commercial banker,” Ray said.

Kevin Sabin, CEO of Arvest, is personally concerned with diversity, Ray said. “He asks about it — ‘Why don’t we have more diversity in this area?’” It is no accident, then, that half of his direct reports are women — including the chief fiancial officer, Karla Payne, whom Ray described as a “very down-to-earth, low-key, brilliant, brilliant person.”

While Ray raves about the management training and encouragement she has received — “I’m in love with Arvest because of all these things.” — the ABA’s Holmes concedes that most banks in Arkansas have not grown their own leaders. Instead, they have hired talent away from each other.

“We haven’t had management training programs and we haven’t had in-house training,” he said. “We just bought the best available talent and brought them in and ran with it.”

Almost needless to say, the best available bank management talent has been overwhelmingly male. When women do take charge, Holmes also conceded, it is sometimes because men have messed things up.

Marnie Oldner was hired as CEO of Ozark Heritage Bank of Mountain View in 2011, when the bank was under strict orders from the Office of the Comptroller of the Currency. In the first quarter of 2015, the bank — now renamed Stone Bank — reported the highest return on assets of any bank chartered in Arkansas at 2.73 percent.

And Judy Lawton, the ABA treasurer, was named president of Heartland Bank in March as the $231 million bank was about to report a $633,000 quarterly loss after losing almost $4.7 million in the fourth quarter of 2015.

(Some in the industry would count Susie Smith in this company for her work in keeping Metropolitan National Bank afloat until it could be acquired by Simmons in 2013.)

Women run banks differently than men do, Holmes said, with a more personal, less rigid decision-making process.

Bankers “do become more human and we don’t make silly errors like when the man’s in charge,” he said.

(Correction, May 9, 2016: Karla Payne is Arvest’s chief financial officer. Her title was incorrect in the original story.)

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