This week on the podcast Matt wraps up the Arkansas Business Hall of Fame series with Ross M. Whipple, 2023 Arkansas Business Hall of Fame Inductee, President and CEO - Horizon Capital Partners, LLLP, President - Horizon Timber Services, Inc. and Chairman of the Board - The Ross Foundation. During the episode Ross dives into how he got his start in the banking and timber industry and highlights the importance of his early mentor, Jane Ross, on his career. Ross further discusses how he was able to turn around struggling banks to a positive ROA and they finish the discussion with Ross highlighting one of his favorite business books.

In sharing these stories, and I just, you know,

hope that someone can take a little piece of this and put

toward their career and making them a better not only a better

business person to woman, but just maybe a better person as a

whole.

Excellence, professionalism, innovation and

collegiality. These are the values the Sam M. Walton College

of Business explores in education, business, and the

lives of people we meet every day. I'm Matt Waller, Dean of

the Walton College and welcome to the be epic podcast. I have

with me today, Ross Whipple, who is being inducted into the

Arkansas Business Hall of Fame in February. For those of you

most people are aware of Arkansas Business Hall of Fame,

but it includes pretty amazing people. We started doing this

back in 1999, every year for people are inducted. And if you

look at the list, if you Google Arkansas Business Hall of Fame

inductees, you'll see the list we have the list of all the

inductees plus movies about each of them if you want to learn

more about any person on there, but people like you know, Sam

Walton, Don Tyson, Murphy, JB Hunt, JB and Johnelle Hunt,

Warren Stephens. There's a long list, Bill Dillard, there's a

long list of people and the purpose of the Arkansas Business

Hall of Fame is to celebrate the business achievements of

business people, the achievements of business people

who have done business with high ethics, who have contributed to

society, and in various ways, and we're really proud to have

Ross Whipple in the group now, and Ross got his undergraduate

degree from Henderson State and his MBA from the University of

Arkansas, we're proud to have another inductee into the

Arkansas Business Hall of Fame who's an alum of ours. He has

extensive experience. He is president of Horizon Timbers,

Inc, and many other things. He's also a member of the executive

committee, and chair of the risk committee for Bank OZK. We'll be

talking a little bit more about that. But Ross, thank you so

much for joining me.

Well, Matt, thank you for having me. And, as you

said, when when you look back at the roster of the inductees over

the last 22, three years, I am so honored and so humbled to be

included with these people. I mean, these are folks that I

have admired. And to a great degree strive to be like for

years. I'm not sure I've gotten there yet, but I keep working at

it. But I've just was so surprised at this honor and so

humbled. The list is phenomenal. And

It is

and to be included in that is probably the high

mark of my business background and business achievement really

is.

So, Ross, you've had over 35 years of experience

in banking. Is that did you start your career in banking?

No, sir, I did not. You know, I kind of fell

into banking through the back door. I had a cousin name was

Jane Ross. She was 35 years, my senior. I started to work with

her when I came to college at Henderson and her family was

primarily engaged in the land and timber business. Now there

were some banking interests here than there but not anything that

would lead to a majority control or anything like that. So like I

say, I went to Henderson. After that I spent a little time in

the military, which I'm very proud of, and then came to

Fayetteville for my MBA.

What year did you get your MBA?

1976

76 And during the bicentennial year?

Oh, what? Yes.

And what did you do in the military?

Well, I was I was commissioned as a Second

Lieutenant right out of college, assigned to the First Cavalry

Division in Fort Hood, Texas, which had just gotten back from

Vietnam, I did miss that and I don't regret missing that. But

were certainly prepared to go if need be, but and I spent you

know a year, year and a half there, and then got out a little

early so I could go to graduate school.

What made you decide to go to get your MBA?

Well, I didn't think I was quite through,

didn't think by education was quite where, you know, I would

like for it to be. And I thought it offered me a great

opportunity to grow and expand my knowledge and to field, you

know, basically finance and economics for me.

So you were working with Jane Ross? And then did you

continue to work with her even up to that point?

Somewhat, I'll be you know, I mean, we stayed in

touch, of course you know during my four years of college, I went

to school with what I call the Jane Ross work study. And, I

mean, she did, she was a great lady, a great mentor to me. But

she pushed hard. I mean, she wanted to make sure that I had

seen every thing there was to do in the timber business first. I

mean, from chainsaws to skidding to, you know, working in the

sawmill to marking timber to painting lines, the whole bit,

just so I would get a fairly basic understanding of what that

business took. And we still haven't gotten around to

answering your question about the banking business yet. But

after I had been back for about three years about, she went down

and purchased a controlling interest in what was merchants

and planters bank in Arkadelphia. She had some

interest in the bank. Well, I mean, probably the second

largest shareholder. You know, I was acquiring some stock, but

that like that, yeah, I didn't have much. So anyway, she went

down and made the, there wasn't anyone who had absolute control,

but made the largest shareholder an offer to buy the stock,

basically, because he would not put me on the board. And she

said, well, if you're not going to put the boy on the board,

sell me the bank. And he did. And I had no idea of this. I

mean, she came back as a surprise to me, said, you won't

believe what I have just done. And I said, Oh, my gosh, you

just did what? And you paid what? And I'm thinking, Oh, I

don't know how we're gonna work our way out of this. But we did.

I mean, it was a sleepy little bank in a free bank town in

Arkadelphia back in the late 70s. You know, not only that she

had given up, basically control through a voting trust. She had

given the guy who was going to run the bank, a 10 year

contract, and I said, I just can't believe you've done this.

Well, to make a long story fit a page, we worked through some of

those issues, and dissolved the voting trust, we didn't dissolve

it, changed the trustee, and she made me the trustee. And anyway,

we started working to try and improve the bank. In 1985, you

know, I grew up in Malvern. So I had a couple of guys from

Malvern, come down and pay us a visit about a potential merger,

which sounded good to me cause I'm just trying to get Jane out

of this bad investment that I think she's made, and just

trying to figure out how we're going to do this. So we did

affect a merger with the Bank of Malvern and formed Central

Arkansas Bank Shares, it was a pretty creative transaction for

her. And to some degree me. You know, the break even on the

transaction. You know, I did learn something in graduate

school, but the breakeven on the transaction for her given

capital performance all ratios was like point five, two. And,

you know, so the suggestion was, well, how do we do it? And I

said, well, you know, well, I think book to book works very

fine, they said whoa, we can't do that. And I said, well, how

about point nine five a book. And they agree. So it was a

relatively accretive transaction off the bat for her. Now, we

went into that merger with equal ownership with another family.

And they were again, they were kind of scared of Jane's money.

I don't think they were too scared of me at the time.

Although, funny story. The gentleman who was the attorney

for the bank up there, went into the bank one day, and they were

all talking about how they had just acquired merchants and

planters bank and they were going to do this and they were

going to do that. The attorney for the bank said, you don't

know this yet but the guppy has just swallowed the whale. And in

the end, that's what it turned out to be, you know, I mean it,

it took a lot of maneuvering, I got a lot of scars on my back.

But we did the right thing. We finally got control of the bank

in the early 90s. I went to merchants and planters bank in

1989 as the president CEO, probably the best year of my

life professionally. You know, we fixed a lot of things, we

changed a lot of things. And I'll never forget, you know,

after we decided, well, what do we, what are we going to do? So

well, you know, we need to fix this probably time for the other

bank president to leave and who's going to do that? And I

said, well, you know, if need be, I'll do it. And then the

next question was, who in the hell is gonna run it? Okay, get

rid of him? And I said, I don't know. They said, well, will you

do it? I said, well, you know, I'll do it for 90 days. You

know, I got plenty to do. I got lots of things. And I got a lot

of balls in the air, but I'll do it for 90 days. So we did. And

then they came back and said, hey, we didn't talk about your

salary. And I said, well, that's fine. And he said, what do you

think you should be paid. And I said well here's what I'll do. I

will work I will work for half of what you repay in the former

bank president. But I want everything over a 1% return on

assets. And they were saying, I can't believe this guy's stupid

I mean this bank's never made a 1% return on assets. And he said

he was so anyway, to make a long story fit a page. They at the

end of the year, they paid me about another $150,000 because

we fight we owe we made over 1% return on assets. Now I did

split a lot of that with with my senior staff at the time, which

I've always felt very important to do. But no they did. The bank

never made over a point six ROA and they didn't you know, and

when I inherited the bank at the end of February, you know, the

bank had lost $30,000 year to date. So they didn't see how we

could do that. But we did. And there were just a lot of things

that were easy to do. You know when you're running to a bank

that's not making any money. Matt, you really don't need a

large, tax exempt bond portfolio. And, you know, and

the bank was carried about a million dollars in vault cash.

Well, it's a $35 million bank at the time that we need about

maybe $300,000 in vault cash maybe. And fed funds were like

11% I mean you know, so I probably shouldn't have done

this. But I got with my executive vice president on a

Friday afternoon over a three, three day bank holiday. And we

put $750,000 in the back of my car and drove it to the fed. So

we could get credit for it over a three day weekend. You know,

and those are there's the kinds of things you you have to do and

it also shows your staff that you care and that you know you

can do it and you know how to do it and they really stepped up

stepped in line. And it was everything went very well. After

that. We acquired we have acquired control. And I had a

few people that were giving me problems. I was spending more

time managing a certain group of directors, which was really

pulling me back from, I think, doing what we should for the

bank. And we solved that problem and really got to you know the

bank was doing well. We had four charters, and they were in

Malvern, Hot Springs, Arkadelphia and Sheridan, it's

like driving across Dallas. So I'm thinking, you know, why do

we need to operate four separate charters? Well, in Arkansas

state bank department regulations only were, you know,

the, you could only branch into a contiguous county. So, okay, I

started looking at the map. And Hot Spring County was contiguous

to Grant County, Clark County, and Garland County. So then we

were able to consolidate the four charters into one I think

we were the first to do it not because no one else wanted to,

but because we had a geographic situation to be able to pull

that off. And, and we did, it was, it was probably the hardest

year of my life, you know, from a working relationship and get

What year was that?

Still waste started in July of 1994, and

completed the process. And late June, early July of 95. went

from four charters to one. And that's interesting, because when

you're having your meeting with your senior staff, and you're

you're kind of outlining this for them, and they're going

yeah, that's a pretty good idea. That makes a lot of sense. And

then we had a little barbecue at my lake house at night, and you

can see them all potting up. So we didn't have CFOs, back then

that we had cashiers, and we had bank presidents, and we had for

note departments and four of this and four of that, and you

can see them kind of popping up. And they've got to figure it

out. There are four of us now, there's only going to be one of

us in the end, you know, but it worked out great. We, we kept

everybody we needed to keep yeah, they may have had a new

job alignment or whatever else. But yes, we did. We did sever

about 30 people out of this. But it cost a million four to do all

this between signage, excetera, you know, stationary the whole

bit. And I was really concerned about FDIC insurance. Because

see, previously, each bank had turned $50,000 worth of tension.

And now we're just going to one 250,000 Not four. But anyway to

make to finish this. It cost 1,000,004 We made $2.2 million

in next year. You know, it doesn't sound like a very big

bank, but back in the mid-90s, a $550 million bank is a pretty

good sized bank. And all of a sudden, I got these people

coming to visit me, you know, because I have not really

thought about selling the bank. And, you know, they come and

they go and I don't talk to them very seriously, then, you know,

we've got a group but our St. Louis, Mercantile Bank came and

talked to us on pretty serious level. We ended up selling the

bank in February of 98. For bout right at 3.25 times book value

and a 24 times earnings. Well, you know, I was beginning to get

a reputation as a flipper. And I'm really not a flipper. And in

my retort to these people was this. You know, if you have a

house worth $100,000, and somebody offers you $325,000 for

it, and you can build a new house for 100,000. What would

you do? And the answer very quickly was we'll have sell it.

So that's exactly what we did. You know, we sold horizon bank

in February of 98. I had a one year mandatory with Mercantile

and their board, I resigned at the year. Then I had a one year

covenant not to compete. And we started back with Summit Bank in

February of 2000. You know, we I don't know if you've ever seen

the movie The Blues Brothers.

Yeah.

Well, we just brought the band back together

just kind of what we did, you know, just like and it worked

out extremely well. I mean, we were a de novo bank. We never

made an acquisition, which I can support because every time we

went to a new market, we hired people who wanted to come to

work for us, you know, we had just had not been acquired. And

when you get acquired, it sometimes doesn't feel good. So

anyway, all the people that we went, sought us we saw them and

it was it really worked out well. And we had had a good bank

performed well, did well. And, and that bank, which was summit

by was sold to bank of the Ozarks now BankOZK in May of

2014.

So Ross, has there been a book in your career that

you've really enjoyed and gone to frequently throughout your

career?

Oh, yes, sir. You know, and I bought it in

Fayetteville, Arkansas in 1974. And I used it in our Raymond

Rebsamen portfolio class, and it's Security Analysis by

Benjamin Graham. I have read it cover to cover a number of

times, I still to this day, pull it out. And you know what, I get

the feeling, you know, why I don't like preferred stocks or

whatever else. I'll pull that book out and read about what

Benjamin Graham Warren wrote. And, you know, as we all know,

he is a man of value. And I've got the sentiment, the education

from Bob Kennedy and Harold Doolin. When I was in

Fayetteville, and I still use it today, you can ask my kids, you

know, because they know where that book is.

On behalf of the Sam M Walton College of

Business, I want to thank everyone for spending time with

us for another engaging conversation. You can subscribe

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