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HomeMy WebLinkAbout159-06 RESOLUTIONRESOLUTION NO. 159-06 A RESOLUTION APPROVING A FIVE-YEAR CONTRACT WITH FIRST SECURITY BANCORP AND ITS WHOLLY-OWNED SUBSIDIARY, CREWS AND ASSOCIATES, INC. TO PROVIDE INVESTMENT MANAGEMENT SERVICES TO THE CITY OF FAYETTEVILLE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That the City Council of the City of Fayetteville, Arkansas hereby approves the annual contract renewal with a five-year contract with First Security Bancorp and its wholly-owned subsidiary, Crews and Associates, Inc. to provide investment management services to the City of Fayetteville. A copy of the contract for services marked Exhibit "A" is attached hereto, and made a part hereof. PASSED and APPROVED this 19th day of September, 2006. APPROVED: By: ATTEST: By-*% DAN COODY, Mayor U SONDRA SMITH City Clerk �.`.�m,WTRc4 V.••Aa ;FAY ETTEVILLE: y RKANSP�VJ i .'�� ;NGT O •• INVESTMENT MANAGEMENT AGENCY AGREEMENT THIS INVESTMENT MANAGEMENT AGENCY AGREEMENT ("Agreement") is made and entered into by and between the CITY OF FAYETTEVILLE, ARKANSAS, an Arkansas municipal corporation, by its Mayor and City Clerk, duly authorized by action of its City Council (the "City") and FIRST SECURITY BANK, an Arkansas banking corporation, by its Sr. Vice President and Trust Officer, duly authorized by its Board of Directors ("FSB"). WHEREAS, the City solicited Requests for Proposals for Investment Management Services pursuant to its RFP No. 06-07; and WHEREAS, FSB submitted a response to the Request for Proposal which was, after examination of responses received from other qualified persons, accepted by proper action of the City Council of the City. Now THEREFORE, in consideration of the mutual promises and obligations of the parties hereto, for other good and valuable consideration, and Intending to be bound, the parties agree as follows: 1. Appointment of Investment Manager. The City hereby appoints FSB to act as investment manager with respect to those financial assets of the City (the "Account Assets") which will hereafter be transferred to the custody of FSB, to be held as custodian pursuant hereto. The Account Assets shall include the financial assets initially transferred to FSB, financial assets hereafter transferred to FSB by the City, and income, increment, proceeds and accretions to all of the foregoing. FSB will furnish an investment program to maximize the financial returns on the Account Assets while adhering to the City's Investment Policy (as hereinafter defined). 2. Custody of Account Assets. FSB will act as custodian for all of the Account Assets acting through its Trust Division. All Account Assets shall remain in the physical possession of FSB as custodian. FSB shall, during the effectiveness hereof, maintain fiduciary liability insurance with limits of liability not less than $2,000,000. 3. Management Authority. The City hereby authorizes FSB to place orders or otherwise give instructions for the purchase, sale, or exchange of securities on behalf of the City which are included in the Account Assets without prior consultation or ratification by the City, givingand granting to FSB, complete discretion as to the nature, amount and timing of all securities transactions, subject only to those restrictions, limitations and guidelines which are set out in the City of Fayetteville, Arkansas, Investment Management Policy which is attached hereto as Exhibit A and made a part hereof by this reference, which is incorporated in Resolution No. 169-99, duly adopted by the City Council of the City on December 21, 1999 (the "Investment Policy"). The City reserves the right to revise or modify the Investment Policy at any time, and from time to time, provided that, no such revision or modification shall be binding upon FSB until written notice thereof is received by FSB. All purchases of securities which will become a part of the Account Assets shall be on a delivery versus payment basis. 4. Fees. As compensation for its services pursuant hereto, FSB will be paid a fee equal to 14 basis points of the average Account Assets if the average market value of the Account Assets are less than $25 million during a calendar month; and a fee equal to 10 basis points of the average market value of the Account Assets if the average market value of the Account Assets are greater than $25 million during a calendar month. The foregoing fees of FSB do not include fees for brokerage services in connection with the purchase or sale of any security which is or is to become a part of the Account Assets. All fees of FSB and all brokerage fees payable with respect to the Account Assets shall be paid from the Account Assets and shall be separately accounted for in all reports provided to the City. 5. Brokerage. 5.1. Selection of Broker. The City authorizes FSB to place orders for purchases and sales of securities and financial assets through any broker or dealer it chooses, including a broker or dealer which is affiliated with or under common control with FSB. In selecting a broker or dealer for any transaction or series of transactions, FSB will consider such factors as net price, execution, availability of research, and other factors which FSB reasonably believes to be appropriate for purposes of making that decision. The fact that the fees paid for brokerage services for the broker or dealer selected by FSB are greater than fees for which similar services could be obtained, shall not be a basis for liability to FSB. 5.2. Aggregation of Purchases. The City agrees that FSB may aggregate sale and purchase orders of securities with similar orders being made simultaneously for other accounts managed by FSB, or for accounts of affiliates of FSB if, in the judgment of FSB, aggregation of such orders will result in a net savings to the City with respect to the purchase or sale order for the particular security. 6. Monthly Reports. The Custodian shall provide the City with monthly reports of the Account Assets in a format consistent with the reporting requirements of the Governmental Accounting Standards Board, and otherwise reasonably acceptable to the City. The Custodian and FSB shall provide such other and further information as the City may reasonably require in connection with the Account Assets. 7. Voting of Equity Securities. Unless otherwise directed by the City, FSB is authorized, in its discretion, to take such action as it deems appropriate with respect to any proxy received with respect to any equity securities which may be or become a part of the Account Assets from time to time. 8. Investment Risks. The City acknowledges that there are risks inherent in all investments, and that some investments will result in profits and some investments will result in loss. FSB shall not be liable to the City for any error of judgment or mistake of law in the execution of its responsibilities hereunder, or for any loss suffered with respect to the Account Assets, or any other matter arising out of this Agreement, excepting only losses suffered `Ls a result of the negligence, bad faith or willful misconduct of FSB. • 9. Term and Termination. This Agreement shall be effective upon execution by both parties and shall continue in force until modified by mutual agreement of the parties in writing, or until terminated on thirty (30) days prior written notice by either party to the other. Upon notice to the Custodian of any such termination, the Custodian shall deliver the Account Assets to, or as directed in writing by, the City. 10. Miscellaneous Provisions. 10.1. Other Activities of FSB. Nothing in this Agreement shall be deemed to restrict FSB or its affiliates from engaging in any other business or in rendering any other investment agency services to any other person. 10.2. No Assignment. FSB shall not assign this Agreement, or delegate its duties hereunder to any non-affiliated third party without the prior written consent of the City. 10.3 Notices. All notices required or permitted hereunder shall be in writing, and shall be delivered by U.S. Mail, retum receipt requested, or via confirmed facsimile, and addressed as follows: If to the City: " City of Fayetteville, Arkansas 113 W. Mountain St. Fayetteville, Arkansas 72701 Attn: Mayor If to FSB: Facsimile: 479-575-8257 First Security Bank 314 N. Spring Searcy, AR 72145-1006 Attn: Frank Faust Sr. Vice President & Trust Officer Facsimile: 501-278-2175 With copy to: First Security Bank 1219 E Joyce Blvd Fayetteville, Arkansas 72703 Attn: John Rutledge Facsimile: 479-527-7001 All notices shall be deemed delivered when received, or the first day that delivery is refused. 10.4. Entire Agreement. This Agreement, together with the Exhibit hereto, is the entire agreement of the parties and may be modified only by a writing executed by all parties, except that the City may modify the Investment Policy at any time, from time to time, without the consent of FSB. 10.5. Governing Law. This Agreement has been executed in and shall be construed under the laws of the state of Arkansas. 10.6. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall be one and the same instrument. 10.7. Severability. If any one or more of the provisions hereof are determined to be invalid, illegal or otherwise unenforceable, such determination shall have no effect upon the remaining provisions hereof, which shall remain valid and enforceable in accordance with their terms. DATED AND EFFECTIVE this ��wilI11 MIilli ' `��G`cRK/TR� ll ;U •� 'AS i - :FAYETTEVILLE• 11 By: day of Se .0411 kyr , 2006. CITY OF FAYETTEVILLE, ARKANSAS Attest:9sy :QNANS: \?, #idt YG TONiiiiIICP0 ity Clerk Mayor M.tA.t t FIRST SECURITY BANK By: ank Faust dm Sr. Vice President & Trust Officer siert \\ Served \ shared \tjd\Cliems\Crcws\Investmmnt Management Agreement - Fayetteville S-16-06 dic AC -02 Page 1 of 6 CITY OF FAYETTEVILLE, ARKANSAS POLICY AND PROCEDURE Subject: City Investments Policy Number: AC -02 Original Policy Date: December 21, 1999 Effective Date of New/Revised Policy: December 21, 1999 Revision Dates: Replaces ACCT -2 issued July 2, 1996 Custodian: (Division) Accounting Mayor's Signature and Date AC -2.0 PURPOSE: The purpose of this policy is to provide guidelines for investment of City of Fayetteville operating funds to preserve the safety of principal, to maintain adequate cash flow, and to maximize interest earnings. AC -2.1 SCOPE: This policy applies to the investment of City of Fayetteville operating funds not needed for immediate expenditures. This policy does not govern the investment of employee retirement or pension funds or proceeds of bond issues. AC -2.2 STANDARDS/OBJECTIVES: Investments will be made within the constraints of applicable State laws and this policy, taking into consideration liquidity needs of the City. Investment decisions will be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and •intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived. Investment of the funds of the City of Fayetteville shall be directed to the primary objective of safety of principal; the secondary objective shall be maintaining adequate cash flow; and the final objective shall be maximizing investment yield. AC -02 Page 2of6 Except for cash in certain restricted and special funds, the City may consolidate moneys from individual funds to maximize interest earnings Investment income will be allocated to the various funds based on each fund's participation. AC -2.3 DELEGATION OF AUTHORITY/RESPONSIBILITY: Management of the investment of City funds regulated by this policy shall be the responsibility of the Mayor and the Finance & Internal Services Director. The Mayor and the Finance & Internal Services Director may delegate authority for investment transactions. The Mayor and the Finance & Internal Services Director may, by proper procurement procedures, contract for the services of an asset manager, an investment advisor, or other expert advisor(s) to invest all or a portion of City funds regulated by this policy. Selection of an independent asset manager or investment advisor will be limited to those candidates who have an office within the City of Fayetteville. The Mayor and the Finance & Internal Services Director and their designees are authorized to: open and close accounts with financial institutions in the name of the City; make wire transfers of funds for the City; make deposits of funds for the City; execute collateral, depository and investment agreements for the City; and take any other such actions needed to carry out their responsibilities for the depositing and investing of the City's funds as authorized by State Statues and this policy. The Mayor, the Finance & Internal Services Director, and other City employees assigned to manage the investment portfolio, acting within the intent and scope of this Investment Policy, shall be relieved of personal responsibility for an individual security's credit risk or market risk Officers and employees involved in the investment process shall refrain from personal business activities that conflict with proper execution of the investment program or impair their ability to make impartial investment decisions. The Mayor and the Finance & Internal Services Director shall establish operating procedures to implement this investment policy. AC -2.4 AUTHORIZED INVESTMENTS: A. The City will invest only in book entry securities. B. The City may, without limitation, invest in the following instruments, provided, • however, that at no time shall assets of the City be invested in any instrument or security not authorized for investment by Arkansas Code Annotated §§ 14-58-309 (Act 1341 of 1999), and further defined in Section 23-47-401 (Investment Powers and Limitations), or by the Local Government Joint Investment Trust Act, Arkansas Code Annotated §§ 19-8-301 et seq., (Local Government Trusts) as they may from time to time be amended: 1. Direct obligations of the United States Government; AC -02 Page 3 of 6 2. Obligations of agencies and instrumentalities created by act of the United States Congress and authorized thereby to issue securities or evidences of indebtedness, regardless of guarantee of repayment by the United States Government; 3. Obligations the principal and interest of which are fully guaranteed by the United States Government or an agency or an instrumentality created by an act of the United States Congress and authorized thereby to issue such guarantee. 4. Obligations the principal and interest of which are fully secured, insured, or covered by commitments or agreements to purchase by the United States Government or an agency or instrumentality created by an act of the United States Congress and authorized thereby to issue such commitments or agreements. 5. General obligations of the states of the United States and of the political subdivisions, municipalities, commonwealths, territories or insular possessions thereof (general obligation bonds); 6. Obligations issued by the Arkansas State Board of Education under authority of the State Constitution or applicable statues; 7. Prerefunded municipal bonds, the principal and interest of which are fully secured by the principal and interest of a direct obligation of the United States Government; 8. Certificates of deposit with banks authorized by State law to receive deposits of public funds, that have branches or main offices within the Fayetteville City limits, with which the City has both a depository agreement and a collateral agreement. 9. Repurchase agreements that are fully collateralized by direct obligations of the United States Government, provided that any such repurchase agreement shall provide for the taking of delivery of such collateral directly or through an authorized custodian; 10. Securities of, or other interest in, any open-end type investment company or investment trust registered under the Investment Company Act of 1940, and which is defined as a "money market fund" under 17 CFR § 270.2a-7, provided that the portfolio of such investment company or investment trust is limited principally to United States Government obligations and to repurchase agreements fully collateralized by United States Government obligations, and, provided further that any such investment company or investment trust shall take delivery of such collateral either directly or through an authorized custodian. 11. Local Government Trusts. AC -02 Page 4 of 6 C. The City may invest no more than twenty percent (20%) of the pooled investments in the following investment types and in accord with certain limitations described in Section VII Investing Parameters: 1. Corporate debt obligations (including commercial paper) of any corporation, with the following credit ratings: investment of City funds in Corporate Bonds will be limited to those rated as Single A minus or better by both Moody's Investor Service and Standard and Poor's; investment of City funds in Commercial Paper will be rated A -1/P-1, 2. Securities of, or other interests in, an open-end or closed-end management type investment company or investment trust registered under the Investment Company Act of 1940, provided that the portfolio of such investment company or investment trust is limited to United States Government obligations and to repurchase agreements collateralized by the same type of collateral used to collateralize other City deposits, and provided further that any such investment company or investment trust shall take the delivery of such collateral either directly or through an authorized custodian; D. Other Provisions 1. The Finance & Internal Services Director may establish an account with the Federal Reserve Bank to purchase U.S. Government Securities directly from the U.S. Treasury. 2. Any Arkansas state legislative action that provides for additional investment vehicles or further restricts investment vehicles will be incorporated into the City's investment policy and will supersede any previous language. 3. The City will be allowed to hold to matunty any investments existing at the time of enactment of this policy. Reinvestment of such funds will be in accordance with this policy. 4. The Mayor and the Finance & Internal Services Director may set additional limitations on the parameters for various types and concentration of investments. Operating procedures will define requirements to implement this policy. AC -2.5 INVESTMENTS NOT AUTHORIZED: The following investmeht vehicles, authorized by Act 1341 of 1999, are not considered suitable investments for City of Fayetteville funds: A. Warrants of political subdivision of the State of Arkansas and municipalities thereof having maturities not exceeding one (1) year. B. The sale of federal funds with a maturity of not more than one (1) business day. C. Industrial development bonds for corporate obligors issued through any state of the United States or any political subdivision thereof. • AC -02 Page 5 of 6 D. Revenue bond issues of any state of the United States or any municipality or any political subdivision thereof. E. Securities or other interests issued, assumed or guaranteed by the International Bank for Reconstruction and Development, the Inter -American Development Bank, the European Bank for Reconstruction and Development, the Asian Development Bank, or the African Development Bank. F. Uninsured demand, savings, or time deposits or accounts of any depository institution chartered by the United States, any state of the United States, or the District of Columbia. AC -2.6 INVESTING PARAMETERS: A. Diversification The City investments regulated by this policy shall be diversified by: • limiting investments to avoid over concentration in securities from a specific issuer to five percent (5%) of the cost basis of the City's portfolio at the time of purchase, a limit of fifteen percent (15%) of the cost basis of the City's portfolio will apply to each business sector as defined by any recognized rating agency (excluding U.S. Treasury securities and collateralized certificates of deposit), • investing in securities with varying maturities, and • continuously investing a portion of the portfolio in readily available funds to ensure that appropriate liquidity is maintained. B. Maximum Maturities The City will attempt to match investment maturities with cash flow requirements and will utilize investments in readily available funds, when needed, to meet ongoing obligations. The City anticipates a range of maturities of ninety (90) days to five (5) years The City will invest in securities maturing more than five (5) years from the date of purchase only when the funds are easily defined to be used after five (5) years. AC -2.7 ALLOWED INSTITUTIONS: Security transactions on behalf of the City by an asset manager, or the City itself, will be conducted only with financial institutions and broker/dealers who have offices within Washington County unless otherwise authorized in writing by the Mayor and Finance & Internal Services Director. A list of authorized financial institutions and broker/dealers to be used by an asset manager, an investment advisor, or the City itself, will be maintained by the City and provided to such asset manager or investment advisor on a mutually agreed upon basis. Security broker/dealers on the list will meet or exceed the capital adequacy standards set AC -02 Page 6 of 6 by the Federal Reserve Bank of New York and may include dealers designated as primary dealers by the Federal Reserve Bank of New York or regional dealers that qualify under Securities and Exchange Commission (SEC) Rule 15C3-1 (Uniform Net Capital Rule). AC -2.8 SAFEKEEPING/COLLATERALIZATION: A. Investment of City funds, including cash held for investment, managed under contract of services by an asset manager, investment advisor, or other expert advisor(s) will be placed with a third party custodian approved by the City. All trades, where applicable, will be executed by Delivery vs. Payment (DVP) to ensure that securities are deposited in an eligible financial institution prior to the release of funds. B. The custodian will make reports as requested by the City or advisor(s) and will be accountable for the assets held by the custodian for the City's account. The custodian will be required to maintain an office in Washington County, Arkansas. C. Collateralization will be maintained as required by State law and procedures established by the City. Demand deposits, time deposits, repurchase agreements, and any other investments requiring collateralization shall be collateralized at a level of 102 percent of the market value of principal and accrued interest, less the amount insured by the FDIC. Marsha Farthing Submitted By City of Fayetteville Staff Review Form City Council Agenda Items or Contracts 9/5/2006 City Council Meeting Date Accounting and Audit Division Action Required: FISD 2.&5 4/1/i(0‘ /59 tore Department Approval of a five year contract with First Security Bancorp and its wholly-owned subsidiary Crews and Associates, Inc. for investment management services. 10 basis points for $25 million or more of assets. (approx. $69,000) Cost of this request Allocated to all funds with investments Account Number Project Number Budgeted Item Category / Project Budget Funds Used to Date Remaining Balance Budget Adjustment Attached Program Category / Project Name Program / Project Category Name Fund Name Department Director City Attorney -V CJS Ct - Finance and Internal Service Director Mayor Comments: Date Date g - 2t-6 Date Date Previous Ordinance or Resolution # Original Contract Date: Original Contract Number: T h/cd 4 34e-/,' /91 a' *4e or& 9 /54o4 THE CITY OF FAYETTEVILLE, ARKANSAS To: Mayor and City Council Thru: Paul Becker, Finance Director From: Marsha Farthing, Accounting Manager Date: August 16, 2006 Recommendation Staff recommends approval of a five year contract with First Security Bancorp and its wholly-owned investment banking subsidiary Crews & Associates, Inc for investment management services. Background In 1999 the State approved Act 1341 which provided for expanded investment opportunities for local municipalities. At that time the City's Investment Policy was amended to reflect these changes. Because of the restrictive nature of the state law prior to that time, the City managed the investments internally. After the changes, City staff felt it was prudent to solicit investment management services and in 2000 a five year contract was awarded to Garner Asset Management Company, LLC. Garner Asset was acquired by Garrison Financial Corporation in 2005. The investment of the City's funds is governed by the City's Investment Policy and City staff works closely with the investment manager to ensure prudent care over the City's assets. The City currently has approximately 69 million dollars in the investment portfolio with Garrison Financial. Discussion In April 2006 the City formed a selection committee and solicited proposals for investment services. Following the applicable rules and regulations of the procurement process, First Security Bancorp was selected by the committee to provide these services and a contract is being presented at this time for investment management services. 113 WEST MOUNTAIN 72701 479-521-7700 FAX 479-575-8257 RESOLUTION NO. A RESOLUTION APPROVING A FIVE-YEAR CONTRACT WITH FIRST SECURITY BANCORP AND ITS WHOLLY-OWNED SUBSIDIARY, CREWS AND ASSOCIATES, INC. TO PROVIDE INVESTMENT MANAGEMENT SERVICES TO THE CITY OF FAYETTEVILLE. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1. That the City Council of the City of Fayetteville, Arkansas hereby approves the annual contract renewal with a five-year contract withrF4t Security Bancorp and its wholly-owned subsidiary, Crews and As�c *lnc.►b provide investment management services to the City of Fayetl�. A1eopy of the contract for services marked Exhibit "A" is attached htev leeretoSd made a part hereof. A By PASSED and APPROVED this 5w • a of Septembi-r,(20Q6. hYDRA SMITH, City Clerk AN COODY, Mayor I f i • • Respectfully submitted by: Crews&Associates Member First Security Bancorp City of Fayetteville, Arkansas RFP 06-07 Investment Management Services May 18, 2006 Proposal for Investment Management i ( is I: 1 Ir t o I ArstSecurity Bank I1 T 1 (1 T i I1 (1 1 P.O. Box 17770 Little Rock, AR 72222 (501) 217-4500 FAX (501) 217-4502 fsbank.com Member FDIC May 18, 2006 Ms: Andrea Foren City of Fayetteville, Arkansas 113 West Mountain Street Fayetteville, Alt 72701 RE: Request for Proposal RFP 06-07, Investment Management Services Dear Ms. Foren: First Security Bancorp and its wholly-owned investment banking subsidiary, Crews & Associates, Inc. are pleased to present our qualifications in response to the City of Fayetteville's Request for Proposals for investment management services. Our proposal is designed to be concise, informative and demonstrative of our broad range of experience and expertise, our specific experience in the management, trading and underwriting of fixed income securities, and our service to similar governmental entities in the State of Arkansas. As described in our Joint proposal, First Security Bancorp is a $2.0 billion financial services holding company with a substantial presence in the City of Fayetteville and throughout Northwest Arkansas. First Security serves the communities of Arkansas with more than 850 employees and over 50 locations. Crews & Associates is a full service investment banking fimi with more than 170 professionals specializing in the area of fixed income securities. Crews & Associates has over 125 registered representatives operating from nine offices around the State including the City of Fayetteville. As described in our proposal, our local presence provides many relevant benefits in our service to the City of Fayetteville. We appreciate the opportunity to submit our qualifications. If we can provide additional information, please contact us at (800) 766-2000. Sincerely, Bill Scholl President• First Security Bancorp Rush F. Harding, III Chief Executive Officer Crews & Associates, Inc. 1 s r F t. Crews reside In the First Security Center Located In Little Rocks River Market District, Contents e Crews & Associates, Inc. Response to Request for Proposal RFP# 06-07 Investment Management Services for City of Fayetteville, Arkansas 113 W. Mountain Street Fayetteville, AR 72701 QUALIFICATIONS PAGE Organization 2 Professional Staff 3 Experience 5 Client Base 6 Procedures 6 Resources 7 Performance 7 REQUIREMENTS PAGE Litigation Proposed Fee Crews&Associates Member First Security Bancorp 8 9 City of Fayetteville —I l Organization Overview 11-11 Provide a general description of your organization including the ownership, subsidiaries and any affiliations relevant to the city. OUR ORGANIZATION Crews & Associates, Inc. is an Arkansas -based, full-service investment banking firm headquartered in Little Rock, Arkansas. The firm operates additional offices in Fayetteville, Searcy, Cabot, Clarksville, Conway, Heber Springs, Mountain Home and Springdale. Crews & Associates is a wholly-owned subsidiary of First Security Bancorp, an Arkansas -based financial services holding company with more than $2 billion in assets. Our affiliation with First Security Bancorp and its management team, led by Chairman Reynie Rutledge, enhances our company's management team, our access to capital, and our access to the most advanced technology. This alliance provides Crews with the resources to be an even more valuable partner to our Arkansas -based clients. Stockholders Reynie Rutledge, J. Lindsey First Security Bancorp has affiliate offices in Fayetteville, Springdale, Rogers, Searcy, Little Rock and several other Arkansas communities. It is a privately -owned firm with a limited number of shareholders; two of its majority stockholders — Reynie Rutledge and Jim Lindsey — have strong ties to Northwest Arkansas. Crews & Associates is headquartered in Little Rock with approximately 170 employees working from this location. The day-to-day business activities are managed by Rush Harding, chief executive officer, and Jim Jones, president. In addition to our investment management services, Crews is also an active underwriter of municipal securities in Arkansas and around the nation. Our firm maintains underwriting offices in Little Rock, Arkansas, Fayetteville, Arkansas; Searcy, Arkansas; Baton Rouge, Louisiana; Montgomery, Alabama; Jackson, Mississippi; Charleston, West Virginia; Morgantown, West Virginia; and Columbia, Maryland. In 2005, Crews & Associates ranked second in the State of Arkansas in terms of new municipal securities issues and in the top 50 for new issues around the nation. s Crews has recently underwritten bond issues that included a variety of improvements for the Fayetteville area including: l r ;$109,380,000 R ional Medical Center rovem'tiittr&-Re k ding testtt005 A'and'.2005s Crews&Associates Member First Security Bancorp City of Fayetteville 2 1 r r • Investment Management Team 11-2. Provide information identifying the number and type of Investment professionals employed by your organization and indicate the average number and type of accounts handles by a portfolio manager. Please provide resumes of the principals who will be responsible for the management of the City's investments. First Security Bancorp, through investment affiliate Crews & Associates, employs more than 125 registered investment professionals in Arkansas. Our typical investment professionals manage a multitude of fixed income accounts of varying sizes. Large institutional accounts, such as the City of Fayetteville's account, will be assigned to a seasoned, proven manager whose skills and expertise have been proven over decades. We anticipate that activity related to this account will be managed by the following team of experienced professionals (resumes follow): Investment Management Team Mr. Frank Faust Trust Department Manager, First Security Bancorp Mr. Rush Harding Chief Executive Officer, Crews & Associates Mr. John Rutledge Vice President, First Security Bancorp Mr. Jim Jones President, Crews & Associates r Frank Faust (501)279-3408 ffaust@fsbancorp.com Frank Faust is Senior Vice President and Trust Officer at First Security Bank. Mr. Faust has been with the Trust Division for more than 10 years and has extensive experience in managing fixed- income securities. After practicing law in Little Rock, Arkansas, for six years, Mr. Faust joined First Security as head of its Trust Department. He received his Bachelors in Finance Degree from the University of Arkansas at Fayetteville in 1987. He received his Juris Doctor degree, with honors, from the University of Arkansas, Fayetteville, in 1990. Resumes continued on page 4... Crews&Associates Member First Security Bancorp City of Fayetteville —3 7 1 He currently lives and works in Northwest Arkansas. He is an active member of Central United Methodist Church in Fayetteville and Springdale's Rotary club. He also serves on the board of Arkansas Sports Hall of Fame, the Advisory Committee for Soaring Wings Ranch, and the Business Alumni Advisory Council for the Walton College of Business at the University of Arkansas. Investment Management Team Rush Harding (501) 978-7903 rharding@crewsfs.com Rush Harding, with six other business professionals, founded Crews & Associates in 1979. Rush is now the chief executive officer and oversees the affairs of the company, directly managing all of its sales and marketing efforts. Rush has been active in the sale and trading of bonds since 1976. The municipal bond industry recognizes him as a leading authority on municipal bonds. Rush has been the key individual in determining the structure of every financing that Crews has brought to the market. Rush attended West Point and graduated with honors from the University of Central Arkansas. He continues to serve the University of Central Arkansas as a member of its Board of Trustees. Rush participates in the activities of various local organizations. He also serves on the boards of Pulaski Academy and the Arkansas Sports Hall of Fame. John Rutledge (479) 750-7060 jrutledge@fsbancorp.com John Rutledge has worked for First Security Bancorp and its affiliates since 2001. He now serves as a Vice President of First Security while also continuing his investment banking career with Crews & Associates, Inc. John was born and raised in Searcy, Arkansas. He attended the University of Arkansas where he lettered in football and eamed his BSBA in Finance Management from the Walton College. After graduating in May 2001, he joined Crews & Associates, Inc. Following two years of investment banking for Crews' Public Finance Group, John returned to the University and earned his Masters of Business Administration. Upon graduating in 2004, he Joined First Security and continues his service to Crews and Associates. • r 1. Jim Jones (501) 978-7907 bones@crewsfs.com Jim Jones is president and chief compliance officer of Crews & Associates, Inc. In addition, he is a prominent salesman for the firm. Jim directed the general market underwriting department until May 1996, when he was elected chief executive officer. Jim served in that capacity until the firm's merger with First Security Bancorp. Jim is recognized in the municipal finance industry for his commitment to ethics and maintenance of high standards of conduct. He has served on the NASD Small Firm Advisory Committee and has held the position of Chairman of the NASD District 115 Business Conduct Committee and the National Advisory Council. Jim has a B.A. degree in Communications from the University of Arkansas and a Masters degree in Communications from the University of Oklahoma. • Crews&Associates Member First Socudty Bancorp City of Fayetteville — 4