Buddy Harding joined Carty & Co. of Memphis in February 2022 as a senior vice president, stockholder, director and manager of the Little Rock office. Before that, he was a senior vice president at Crews & Associates Inc. of Little Rock, where he worked 14 years.
Harding played basketball on scholarship at the University of Arkansas at Little Rock under Steve Shields and received his Bachelor of Science degree in health sciences.
What has the experience of bringing Carty & Co. to Little Rock been like?
Being an owner and opening a branch for Carty & Co. in Little Rock has been one of the most rewarding experiences of my life. The Carty family are incredible partners, and every day I am grateful for their partnership, support and trust. Our entire team in Memphis and here in Little Rock are what have made the experience so great. Beginning with Edmond Hurst, who is a partner in the firm and is head of public finance, which is based in Little Rock, it has been amazing to see his work ethic and how quickly he has been able to get business going. Brent Whisnant, who is head of our underwriting desk, consistently outperforms and outworks the competition. Everyone at Carty from the brokers, assistants, back office and bankers — they are what has made the experience so incredible and inspire me to get better every day.
What goes into setting up an office for a company in a new market? What have been the challenges?
Truthfully, one of the first challenges was getting furniture delivered to our new office. Due to the supply chain issues, there were delays for desks, chairs, etc. Senior Vice President Glenn Smith (co-head of institutional sales) and I wanted to get into the office as soon as possible. During our first week working in the office, we used packing boxes as chairs and a fold-out table as our desk! We have great pictures and better memories I will cherish forever.
Generally, who are your clients and how do you find them?
The majority of my clients are individuals in Arkansas and across the country. Next would be banks, trust departments, registered investment advisers, bond funds, hedge funds, family offices, corporations and insurance companies. Some business comes in now as a referral, but most of my clients are from cold calling. I still make cold calls every day and have come to really enjoy it.
You played basketball for Steve Shields in college. Now he works in your office. What’s that been like?
It has been great working with Coach Shields. We are like-minded in that we both love hard work and love to compete. He truly brings so many things to the table, but that is one quality that I admire most. He puts everything he has into everything he does. He is going to compete and keep going until he gets the job done. It is funny how things work out, but I told him that he believed in me 20 years ago when he offered me a scholarship at UALR and I believe in him now. I think he is going to do very well in this industry.
Generally, what kinds of investments are your clients seeking in today’s economy?
I trade all sorts of products based off the type of client. But with the move higher in rates, many of my clients are taking advantage of the yields currently available and locking in about 5% tax free on AA-rated bonds. I have also built a niche in a sector I believe has the most value in the market, single-family housing bonds. The underlying collateral is government-backed mortgages (Government National Mortgage Association, Federal National Mortgage Association, Federal Housing Administration, Veteran Affairs). Being government-backed, there is not much, if any, credit risk, and the way these bonds are structured, they have the potential to vastly outperform the market.
What has the Federal Reserve’s interest rate hikes meant to the bond market?
The past three years have been one of the most volatile and challenging periods in the history of the fixed-income markets. The 10-year Treasury has moved from 0.528% on July 31, 2020, to 4.80% on Oct. 6, a level we have not seen since 2007. The rise in rates has diminished bond values on existing holdings. But investors typically buy municipal bonds for the income. The account is not leveraged and is not forced to sell into the market. The income is fixed and will receive 100% of your principal investment at each specific call date or maturity (assuming good credit decisions). With the move higher in rates, it is a great buying opportunity for municipal bonds, and you can lock in 8% or greater taxable equivalent yields (using a 40% tax rate) with high-grade bonds — a return that is greater than most expect to earn on equity portfolios.
Is there a leadership lesson that guides your work today?
My hero and greatest influence in my life is my dad, Rush Harding III. The leadership lessons he has taught me guide me not only in work but throughout my daily life. One of the lessons I use in work today is to never shy away from adversity. If you have a problem, do not run from it or put it off. Embrace it and view it as an opportunity to get better.