guest commentary by John Allison
John Allison is the chairman of the board of Conway-based Home Bancshares, Inc., parent company of Centennial Bank which has banking locations throughout Arkansas, Florida and Alabama. His commentary appears on The City Wire courtesy of Talk Business Arkansas.
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The movers, shakers, entrepreneurs, job creators and individual Americans have become the pawns of the federal government.
Washington is displaying the most inept leadership, anti-business environment and confusion that I have experienced in my business career.
How do I plan for my company? How do I plan for my family? Should I increase dividends? Should I keep my capital? Should I buy more banks? Should I hire more people? Should I do a special dividend? Should I shrink the bank? Should I sell it? Should I just quit and let the Washington inmates go ahead and take over the asylum?
I take the responsibility of my employees, shareholders and customers very seriously and sometimes there are lonely decisions to make because the impact is to thousands of people and their individual futures. People that have never created a job, run a business or felt the responsibility of employees do not have a clue what is required. We need to require anyone running for political office to have at least 15 years of hardcore business experience. With a few rare exceptions, most politicians are business-idiots.
Obama Care… Dodd-Frank… Basel III… the “fiscal cliff”… massive tax increases… high unemployment… uncontrolled spending… a deadlocked Congress… not one job creator in the White House… record numbers of delinquent student loans… Europe going broke… the Middle East blowing up… Iran building nuclear weapons… thousands of new regulations on businesses… what appears to be a Socialist agenda… Benghazi… low CD rates with an increasing dividend tax: God bless our seniors for that… Are you worried yet?
The uncertainty in this country is so thick you could cut it with a knife.
Entrepreneurs and businessmen are so unsure of the future they have halted investments. A survey of investors two weeks after the election found that skepticism runs deep. Among those surveyed, 40.8% expressed bearish sentiment, while 35.8% were bullish.
What a contrast from 1998 when Home BancShares started. We were all full of entrepreneurial spirit and excitement with lots of investment opportunities and a free flow of capital. In the past 14 years, Centennial Bank (Home BancShares’ flagship brand) has grown to a $4 billion bank – one of the top 20 ranked community banks in the U.S. for performance and strong capital.
While we have weathered the economic storm of the last 4 years very well, it’s getting increasingly difficult to maintain those high levels of enthusiasm during these uncertain times while learning to operate under higher levels of regulations.
Centennial Bank believes in sharing. When we started, our beliefs were corner-stoned in our employees, our communities and our shareholders. We raised $130 million from Arkansans who believed in our dream. For those who have stayed with us, that $130 million is now approximately $650 million in today’s dollars. Through our stock, we have seen our shareholders educate their children, build homes and save for retirement.
We have invested in soccer parks, football fields, local law enforcement and served thousands of hot dogs and hamburgers in our communities. Through our acquisition growth, we now employ 1,000 people. Community banks are vital members of their communities.
Businesses are moving out of California at an alarming rate due to increasing state tax rates. If we aren’t careful, they will eventually be moving out of the United States because corporate tax rates are so much higher in the U.S.
What does the Obama re-election mean for Home BancShares? We were of the position that we could benefit either way.
With a Romney win, we felt like the job growth, asset quality and economy would vastly improve within about two years, driving substantial loan growth. With an Obama win, the uncertainty and the continued regulations on banks – which drive operation costs up – will most definitely lead to more bank closures and Home BancShares will be poised and ready to act.
An immediate response to the election has come in the form of an accelerated dividend payout for our shareholders before the end of the year. This rewards our shareholders with the ability to pay at a lower tax rate.
As a businessman in today’s world, knowing what direction to take is a tough question. My present goal under this administration is to grow the company to about $6.5 billion and then stop. We will then see how efficient we can get. If we can run as efficiently there as we are now, well I’ll let you do the math.
Even though my spirit is not the same as it was in 1998, I think we are on the right path to a $6.5 billion goal. I believe where there is something bad, there is something good. We’ll continue to look for opportunities, listen to others, and work hard.
I don’t feel like the present administration has the tools to create jobs. Nothing personal, but it’s like me performing brain surgery. I have no skills for that either.
Not just to pick on the Democrats, the GOP wants ‘Big Brother’ out of their business, but they want to tell you whether you have the right to an abortion or who you can marry.
Where did the GOP find the candidate from Missouri for Senate? The nut house?
I’m a big picture guy, a businessman, and not a typical banker. This uncontrolled insanity in Washington has even led me to sell a small portion of stock to help prepare for what the future might bring.
Many bank CEOs are tired and the current state of the industry might cause some to ask me why I don’t just throw in the towel. My business philosophy is that of Kemmons Wilson: “Good judgment comes from experience and experience comes from bad judgment. You should always remember where you came from, how you got here and who helped you. If not, you will lose.”
My judgment and experience tells me both parties have their own issues. We need more politicians like Governor Mike Beebe (D) and Rep. Davy Carter (R), who aren’t afraid to cross party lines to get things done for the good of the state.
As a businessman I say: To hell with political parties, let’s just save the country.