When a company needs to move a few people around, for brief trips, and it has the resources, nothing beats a small airplane and general aviation airports to service them.

For nearly 15 years, the Northwest Arkansas Regional Airport (XNA) has provided commercial airline service in the region. The general aviation (GA) airports affiliated with the region's five biggest cities stay comparatively busy themselves with corporate, cargo, charter and personal or recreational flights.

Each has advantages.

Two, Fayetteville's and Rogers', have particular attributes. Until XNA opened in fall 1998, Fayetteville Executive Airport, previously known as Drake Field, hosted airline traffic. Its facilities mean it still can host most sizes of passenger jets, now as charters. That's handy for large groups flying to and from the University of Arkansas, said Ray Boudreaux, airport manager. The UA has two aircraft hangared there.

A feature of Rogers Municipal Airport (Carter Field) – besides its longstanding ties to Wal-Mart Stores Inc. – is that it's one of Arkansas' two U.S. Customs flight points. The other is Bill and Hillary Clinton National Airport in Little Rock.

Yes, says Manager David Krutsch, it's the Wal-Mart business needs that drove the need for port-of-entry status, complete with staffing by U.S. Customs and Border Protection. Flights coming from other countries have to land at a port of entry before their final destination for passenger and cargo clearance. As small as the Rogers airport is, "there's no line for customs," Krutsch said.

Still, what is the appeal for the business traveler of avoiding commercial airline travel?

‘CONTROL THE SCHEDULE’
Corporations see a "need to control the schedule, we hear that over and over again, and be able to return to the office at the end of the day to take care of business," Krutsch said. "It has been true for the whole history of general aviation. It's the nature of transportation, including ground transportation."

GA airports – not commercial passenger facilities – also support important community services such as air ambulances, "angel flights" (donated, usually medically related air travel), law enforcement and occasionally transient military use, he said.

Another key to GA airports is how they serve flight crews, chiefly in fuel sales and sometimes amenities. This generally is handled as a private enterprise, called a fixed-base operator. The Rogers FBO is Beaver Lake Aviation, founded in 1986 and owned by Wal-Mart. It sells fuel but also offers conference rooms for meetings and lounge space for crews.

The need to control a schedule is helping to boost area general aviation traffic.

"We estimate our total operations for FY 2012 were approximately 17,500 ... an increase of approximately 11.7 percent versus 2011," said Krutsch of the Rogers airport.

At Fayetteville Executive, there were 36,112 operations in 2012, up 19.3% compared to 2011 traffic. In FAA terminology, either a take off or a landing is an "operation."

Krutsch cautioned that a GA airport's nighttime operations are estimates and that flight school training for obvious reasons can skew the numbers.

VENDOR SUPPORT
Dave Powell, manager of Bentonville Municipal Airport (Thaden Field) said its operation, along with its fixed-base operator Summit Aviation is enhanced by having many smaller businesses and occasional users, who could be crowded out by a facility emphasizing one large corporate customer.

For Wal-Mart vendors, "we are the place to go to if you have a one-day commitment at Wal-Mart. We are two stoplights away from the home office," he said.

The Bentonville airport also serves Crystal Bridges Museum of American Art and Benton County businesses not affiliated with Wal-Mart. Powell noted that his FBO, Summit, also operates in Springdale, one of the busiest GA airports in the state.

The cities of Siloam Springs and Fayetteville serve as their own FBOs. For Fayetteville, this was a recent change when the FBO chain Million Air left in March, Boudreaux said, adding that airport staff, which already handled all other amenities, now handles fuel dispensing.

Having been a commercial airport, Drake Field had essentially no hangars and had to build them after XNA opened, Boudreaux said. Fayetteville operators of small craft had patronized the Springdale airport until then. Drake Field now has several dozen hangars of varying sizes, he said.

Fayetteville's airport hosts the Arkansas Air & Military Museum. Boudreaux said it's had six cafes since 2002, the year he was hired. While the dining room is now closed, the kitchen has been leased to chef GW Chew and his catering company, Something Better Foods.

CONVENIENCE, SERVICE
The area's GA airports can be a bit of a drive for us with vehicles, but for planes they're barely minutes apart. What distinguishes one from another?

Boudreaux cited convenience for the businesses that fly people in and out from one over another. His finance coordinator James Nicholson called Drake Field the region's longtime "front door."

Krutsch in Rogers had a more detailed outlook with four overlapping features of GA airports: efficiency, safety, security and level of service. Efficiency for fliers refers to geographic convenience, he said, which "may not be distance but it could be time"– the time to drive or be driven to your destination after landing, the cost of refueling for the aircraft.

Safety from an airport refers to the number and skills of its ground crew, the field's track record, lighting, and animals on the runway, he said. Security is handled by a GA airport or its FBO. The federal Transportation Security Administration inspections are only at commercial airline facilities, Krutsch said. "Our security is provided as part of our partnership with Beaver Lake Aviation and their operations here."

Level of service includes the availability of office space and conference rooms, rental cars and other ground transportation, catering, and similar amenities. Some have showers, exercise equipment and napping rooms for flight crews.

The Rogers and Fayetteville managers cited a summer slowdown in business, partly due to the seasonal nature of these smaller airports but also due to the national recession.

Boudreaux noted the continuing impact of "sequestration," the ongoing hold on federal spending set by Congress and the Obama administration. The Federal Aviation Administration has a major role in airports, and it is affected by the limits.

Over the next five weeks, 20 finalists in Wal-Mart’s “Get on the Shelf” campaign will promote their product on the retailer’s website, a page borrowed from the popular reality television format. Consumers are asked to watch each Tuesday and vote for their favorite product.

Marketing experts agree crowdsourcing is a creative way for retailers to get valuable input on which product consumers most want to see on the shelf.

The finalists were called to San Bruno, Calif., last week and asked to present live before a panel of three Wal-Mart judges who also work as senior merchandisers. Those presentations were taped and produced into five different episodes based on product category.

The first episode which aired Tuesday (Sept. 24) featured products in the “Live Better” category. Each Tuesday through Oct. 22, a new episode will air and consumers are given 72 hours to cast their vote for the product they most want to see at Wal-Mart. Each category winner will get their product sold at Walmart.com. But one grand prize winner will also be selected based on the number of pre-orders of the product, and will receive additional support marketing from Walmart.com plus an introduction to the retailer's merchandising team.

Last year's three winning products are sold in select Wal-Mart stores and on Walmart.com.

"Get on the Shelf celebrates the resilient and tenacious spirit of American entrepreneurs, many of whom have been working hard for a big break like this," said Kelly Thompson, senior vice president of merchandising for Walmart.com.

"The web series creates more exposure for finalists to share their inspiring stories, which makes for captivating reality TV that's also interactive since American consumers can vote for the next great product at Walmart.com."

In Tuesday’s “Live Better” episode, consumers heard from four product inventors.
• Chris Cote of Santee, Calif. who invented Smanimals, a gourmet scented stuffed animal collectable that hold their scents for two years. His company gives 5 cents toward endangered animal preservation for each item sold.

• Mark Robinson of Amherst, N.H., is the inventor of “Walkin’ Wheels” which is an adjustable dog wheelchair that helps elderly and disabled dogs stay active.

• Angelle Albright of Covington, La., invented “Chemo Beanies” for her sister who was battling breast cancer. Allbright said the comfortable and fashionable head covers for sought out by chemotherapy patients or anyone experiencing sudden hair loss.

• Vincent Rush of Milford, Ohio, invented the “Lynxsafe Teen Driving Monitor”, a device that he created to help concerned parents monitor their teenager's vehicle in real time.

The five-week series is being produced by VIMBY, the digital studio of Mark Burnett Productions, the company behind shows like “The Voice,” “Survivor” and “Shark Tank.”

Tyson Foods Inc. announced a partnership World Vision that aims to educate thousands of small family farmers in northern Tanzania about best agricultural practices.

The joint initiative dubbed “Tyson Foods Fellows” was outlined today (Sept. 25) during the Clinton Global Initiative Annual Meeting in New York.

Tyson said it will send selected employees to Tanzania to teach local farmers how to raise chickens sustainably for food and income. Those teachings will include such basics as best breed selection, keeping water clean, best feed choices, housing and disease management as well as processing, transportation and marketing.

"I've been to Tanzania and know it’s a beautiful country with hard-working people, but I’ve also seen the devastating hunger there and need for agricultural improvements," said Donnie Smith, president and CEO of Tyson Foods. "Our initiative isn’t about just giving the people of Tanzania money or food, it’s about sharing our knowledge and helping them create for themselves a sustainable source of food so they can lift themselves out of the cycle of poverty. We believe it’s the best way to help give them a hunger-free world and to provide well for their children."

World Vision estimates that the project will help educate 2,700 farmers about sustainable chicken production and directly benefit the lives of more than 10,000 Tanzanians.  

"Nearly 40% of the people in Tanzania don't have enough to eat and face food shortages and malnutrition. Yet, the country is full of hardworking small-holder farmers who simply need information and expertise to turn their fields into a rich harvest," said Richard Stearns, president of World Vision U.S.

The education initiative in Tanzania is not Tyson's first relief project in Africa. In 2009, the company helped people in northern Rwanda to build and operate an egg farm.

When customers wheel their carts through Wal-Mart, checking their lists and making sure they have everything they need, the average customer is probably not aware of display design or neatness.

However, anecdotal marketing research indicates that visually appealing marketing displays help increase sales for the brand and the store overall. The inverse is also true in that shoddy or boring displays can damage sales because it leaves a negative impression of the brand in the customer’s mind.
 
For Imperial Graphics & Displays, solving problems for the Wal-Mart supplier community and other retail clients is their business. Based in Illinois, IGD opened a sales office in Bentonville about two years ago with Mark Kreymborg, senior sales executive, working from a home office and a second employee also working in the area.

Using various solutions, the company is able to solve brands’ problems, Kreymborg said. This includes digital inventory management, better campaigns that provide a consistent message, more creative signs and promotional items or simply taking a relatively mundane display and making it more attractive.


ATTRACTIVE DISPLAYS
The company created a patented product called the SnappDown Merchandising System, which is the only pallet cover used in Wal-Mart stores. This system covers wooden pallets safely to create a more visually appealing display.

“It’s a significant product from a vendor perspective because if you cover the wooden pallet on the display, you’re likely to have your display on longer. The wooden ones are usually taken off first.” 


Approved by Wal-Mart last December, the SnappDown Merchandising System is already showing early promising results. There is one in Walmart Supercenter in Bentonville that has been on the sales floor for 18 weeks, the normal time on the floor for any corrugate is two to four weeks, Kreymborg said.  

Determining if there is a cost savings for suppliers compared to when they use other corrugate systems is tricky because so many factors are involved.

“Most corrugate displays are custom, one of a kind. In order to determine cost savings, you must have an existing display, then do a new one utilizing the Snapp Down Merchandising system,” Kreymborg said. “And it will not apply to 100% of corrugate displays, some products are just not appropriate.”

Kreymborg said the main advantage to suppliers is that SnappDown will hide a pallet for the time the display is on the floor.

“It works, it has worked in Wal-Mart tests, and it is working today. The advantage to the supplier is that your display will stay on the floor longer, meaning you will likely sell more of the item you are featuring. The advantage for a retailer is that the ugly and sometimes dangerous wood pallet becomes invisible and much safer,” Kreymborg said.
 
He adds there is also a marketing advantage to using SnappDown when corner wraps are added as they allow for marketing messages to be seen by the consumer.

Analysts with Kantar Retail said earlier this year that as retailers like Wal-Mart continue to shrink their in-store labor counts, floor modulars such as the SnappDown will likely become more prevalent in the stores because the items do not have to be moved off the pallet.

Kantar also said using these types of floor modulars allow Wal-Mart to merchandise various products together as problem solutions, like they do in the holiday baking products or spring cleaning supply displays.

Pallet displays have always been a staple in warehouse clubs like Sam’s and Costco, but they are now being used more in traditional retail space, the analysts said.
 
GROWTH & ANALYSIS
IDG is fairly new to Bentonville and Kreymborg said, that he is growing the business year-over-year at a decent rate. He declined sharing specific revenue information.

He said the company decided to open the Bentonville office because they believed there was a market for a different level of creativity within the Wal-Mart community.

“It’s not just about putting something on a wooden pallet,” he said. But the company felt like there was room in Bentonville for their product and their creative solutions relating to merchandise displays.

Kreymborg said the biggest challenge he’s faced in growing IGD locally is marketing awareness for their products.

“We’re just not known here yet,” he said. “We’re gaining on it, but that is our biggest weakness. Getting companies that have done something at one cost for years to change is the challenge we have taken on.”

He said IGD is tackling those challenges the old-fashion way, earning an audience and having the products and services speak for themselves. This includes promoting the SnappDown Merchandising system and another new product that is coming online soon.

Van Buren-based USA Truck faces a second takeover attempt in less than two years, with Knight Transportation on Thursday morning going public with a $9 per share bid as part of a $242 million deal. USA Truck officials accused Knight of misleading the public about recent communications between the two companies.

Phoenix, Ariz.-based Knight employs more than 5,000 and operates more than 4,000 trucks and is one of the nation’s largest truckload companies. By comparison, USA Truck has under 3,000 employees and operates around 2,200 trucks.

Knight also owns 8% of USA Truck shares.

The per share bid is a 39% premium from USA Truck’s share price (NASDAQ: USAK) on Sept. 25, and a 58% premium compared to the Aug. 27 closing price – the day before Knight sent its first proposal letter to the USA Truck Board of Directors.

UPDATED INFO: USA Truck shares opened strong Thursday following the Knight bid news. The opening bell bid was $9, with the shares trading at $9.10, or up almost 41% over Wednesday’s closing price of $6.46. By early afternoon, the share price had moderated back to $8.75, which was a more than 35% increase from the previous closing price.The price closed the day at $8.80, up $2.34.

“We are confident that USA Truck shareholders will share our strong belief that Knight's $9.00 per share all-cash, premium proposal would provide significant and immediate cash value that is significantly more attractive than USA Truck's standalone prospects,” Kevin Knight, Board chairman and CEO of Knight, said in Thursday’s statement. “For Knight's shareholders, we are confident that a combination with USA Truck would create value by further enhancing our position as a leading provider of multiple truckload transportation services in North America.”

At risk in a deal with Knight would be the more than 400 jobs at USA Truck’s corporate headquarters in Van Buren.

Brad Delco, a transportation industry research analyst with Stephens Inc., said the Knight bid was a substantial premium over the USA Truck stock price, but is below the $10.25 per share book value.

UPDATED INFO: In a statement released late Thursday, USA Truck said the Knight offer of $9 per share "substantially undervalues" the company. On Sept. 6 USA Truck sent a letter say it rejected the offer and was willing to meet with Knight to explain why the $9 per share was not enough.

"Surprisingly, on September 13, 2013, Knight rejected the Company’s offer to meet and informed USA Truck that it saw no point in engaging in further transaction discussions with USA Truck at that time," USA Truck noted in its statement. (See the complete USA Truck statement at the end of this article.)

The Thursday statement from Knight and the Aug. 28 letter from Knight to the USA Truck Board included several reasons the move is good for shareholders of both companies.
• “Our proposal would provide your shareholders with immediate liquidity for their shares at an attractive price, without being subject to the significant execution risk associated with your current turnaround plan. We would note that although the Company's operational performance has improved, the Company's operating ratio remains above 100%, its book value continues to fall, and the share volume remains quite limited, making it difficult for your shareholders to achieve liquidity.”

• “We believe there would be no impediment to completing a transaction on an expedited basis. Based on discussions we have had with our potential financing sources, we are confident that we would be able to readily obtain the financing necessary to complete a transaction. As such, our proposal is not subject to any financing contingency. Moreover, based on our knowledge of the trucking industry, we do not believe there would be any antitrust impediment to completing a transaction.”

• “Knight and USA Truck operate in complementary service lines, both with young tractor fleets with similar average lengths of haul.”

• “Knight believes that it can improve operational efficiencies at USA Truck – and do so more quickly than the USA Truck management team can alone.”

• “Knight can finance USA Truck's capital needs on a lower cost basis.”

The Aug. 28 letter also leaves the door open for a higher price if the USA Truck Board allows Knight to look closer at company operations.

“Although we believe our proposal would provide full and fair value to your shareholders, we would be prepared to modestly increase our proposed purchase price if we were allowed to conduct due diligence and the Company were to demonstrate to us value that we have not already identified,” Kevin Knight noted in his letter.

Knight in his letter requested a Sept. 6 response from USA Truck.

“Absent a satisfactory response, we will consider all options available to us, including making your shareholders aware of our offer,” Knight wrote.

TAKEOVER HISTORY
Indianapolis-based Celadon, which operates Celadon Trucking, purchased $4.66 million in USA Truck shares in early October 2011. Company officials also asked to meet with the USA Truck management to “discuss a possible association” between the two companies.

USA Truck officials rejected the request, and Celadon moved to an easier target. Celadon officials sold the shares of USA Truck on Feb. 28, 2012, and on Feb. 29 announced it had “purchased a significant portion of the operating equipment of Teton Transportation, Inc.”

In November 2012 the USA Truck Board adopted a “poison pill” provision to buffer the company from future unsolicited offers.

The plan caps ownership acquisition at 15% and leaves the cap in place for two years “to afford the Company time to implement its turnaround strategy.” The plan also puts in place a 10-day “redemption period” that gives USA Truck officials “the opportunity to negotiate” with anyone who seeks to buy shares beyond the 15% cap.

In addition to the poison pill, the USA Truck Board hired in February veteran trucking exec John Simone to replace Cliff Beckham as CEO. Simone has more than 30 years of operational and management experience in the transportation industry with leading companies that include UPS, Ryder, and Greatwide Logistics. He was the CEO of LinkAmerica where he led a successful operational turnaround.

TROUBLED FINANCIALS
USA Truck reported July 24 a first half 2013 loss of $3.5 million, better than the $8.4 million for the same period of 2012.

A second quarter loss of $1 million was booked, but was an improvement over a $3.5 million loss during the second quarter of 2012. The per share loss of 10 cents, however, missed the consensus analyst estimate of a 6 cent per share loss.

Total revenue for the first six months of 2013 reached $271.766 million, up 7.3% compared to the 2012 period. Second quarter total revenue was $139.738 million, up 7.84% over the second quarter of 2012.

Significant financial gains will be required in the second half of 2013 if the company is to avoid five consecutive years of losses. The company reported a $17.54 million loss for 2012, a 2011 net income loss of $10.77 million, a 2010 loss of $3.308 million, and a $7.177 million loss in 2009.

During the third quarter of 2012, the company was forced to negotiate for a new credit line. The new agreement, made with Wells Fargo Capital Finance and PNC Bank, placed all assets of the company up as collateral for a new $125 million revolving credit agreement. Of that, USA Truck had initial access to $28.3 million, with $75.9 million repaying the obligation of the previous credit agreement.

STATEMENT FROM USA TRUCK
USA Truck, Inc. (NASDAQ: USAK), a leading truckload transportation company, today said its Board of Directors had previously reviewed Knight Transportation’s unsolicited proposal with USA Truck’s management team and financial and legal advisors, and unanimously concluded that the proposal substantially undervalues USA Truck and is not in the best interests of USA Truck and its shareholders.

In light of our previous discussions with Knight, we are disappointed not only that Knight decided to make its proposal public this morning, but did so in a misleading manner. In fact, on September 6, 2013, the Company responded to Knight’s letter dated August 28, 2013 informing Knight that the Board of Directors unanimously viewed Knight’s $9.00 per share proposal as inadequate, as it substantially undervalued USA Truck in light of the initiatives undertaken by our new management team. However, the Company offered to meet with Knight to discuss the reasons why the Company viewed Knight’s proposal as inadequate. Surprisingly, on September 13, 2013, Knight rejected the Company’s offer to meet and informed USA Truck that it saw no point in engaging in further transaction discussions with USA Truck at that time.

While the Company remains open to all strategic options, including further discussions with Knight, we believe that executing our strategic plan will offer superior value to our shareholders.

State business, education and policy leaders are meeting at the Marriott Hotel in Little Rock to discuss strategies for deploying more broadband throughout Arkansas. The Connecting Arkansas Internet Conference, spearheaded by Connect Arkansas, was held Thursday.

While the room during the opening presentation was full of experts in the field, Gov. Mike Beebe (D) made no pretense that he should be included on the list.

“I’m not going to come in here and talk about broadband to you because I don’t know squat about it,” Beebe told the conference attendees. “What I do know is its significance and importance.”

Education officials are focused on finding ways to boost broadband access to nearly 460,000 Arkansas K-12 students. Beebe has pushed two working groups – Fast Access for Students, Teachers and Economic Results (FASTER) and the Quality Digital Learning Study (QDLS) committee – to formulate public-private solutions to a need to upgrade high-speed offerings for schools and communities across the state. The groups have been meeting since earlier this summer.

According to the Arkansas Department of Information Services (DIS), only a handful of the state’s public schools may have a nationally recommended broadband capability of 100 Mbps per 1,000 students and staff. The average Arkansas school district with 1,800 students has 40 Mbps of bandwidth and needs at least 140 Mbps more, the department concluded. Business leaders with leading Internet Service Providers (ISPs) contend the situation is not nearly as negative as the DIS report projected.

Without necessary bandwidth, however, Arkansas public schools could be in jeopardy of failing to meet forthcoming Common Core testing standards and perhaps, more importantly, students and teachers could miss out on new digital academic opportunities that are redefining the education delivery system.

State lawmakers are expected to tackle the issue in next year’s fiscal legislative session.

Beebe told the group that his role was not to find the solution, but to create an environment for solutions to unfold.

“It’s my job as a traffic cop to get the cars going in the right direction,” he said. “I don’t have the solution. I can’t figure out the best way to get this done, but you people can turn Arkansas into the place to make it happen in broadband.”

Beebe encouraged policy makers and business leaders at the conference to push for out-of-the-box solutions similar to how he has promoted new goals for prison sentencing and health care reforms in Arkansas. He said that other state and national leaders have called his office asking about those initiatives.

“I want them to do that on broadband,” Beebe said.

Dianne Smith, founder and CEO of AmericanRural.org, is a former Little Rock Alltel executive now living in Montana. Her company promotes entrepreneurship through technology in rural communities across the country. Internet access is a crucial component of that environment, she said.

“Broadband is a journey, not a destination,” Smith said. “We get so far, but then we wake up and there’s something new in the broadband world.”

She said she hopes the state looks beyond traditional delivery of Internet service, which is dominated by hard-wired cable and fiber optic services.

“Broadband is mobile, too. There’s a big wireless component to it and some of the discussion I’ve heard here is about wired. I’m anxious to see that conversation get expanded to wireless,” Smith added.

As for Arkansas’ ranking for its broadband accessibility and infrastructure, Smith said the state is not alone in the conversation that is the centerpiece of this conference.

“I think Arkansas is where a lot of other states are right now,” she said.

In a world that has never been more connected through technology and the internet, there is still roughly 15% of American adults who are not plugged into the World Wide Web, according to a study by Pew Research that was conducted in May and released this week.

Researchers from Pew asked adults why they didn’t use the internet in a controlled survey with a 2.3% margin of error.

Non-Internet Users
• 34% of non-internet users think it is not relevant to them, citing they are not interested, do not want to use it, or have no need for it, according to the study.

• 32% of non-internet users cite reasons tied to their sense that the internet is not very easy to use. These non-users say it is difficult or frustrating to go online, they are physically unable, or they are worried about other issues such as spam, spyware and hackers.

• 19% of non-internet users cite the expense of owning a computer or paying for an internet connection.

• 7% of non-users cited a physical lack of availability or access to the internet.

Non-user demographics
• 44% of non-users were age 65 or older
• 41% of non-users lacked a high school diploma
• 24% of the non-users earned below $30,000 annually
• 20% of the non-users lived in rural areas.

AT HOME USE
Even among the 85% of adults who do go online, experiences connecting to the internet may vary widely.

For instance, even though 76% of adults use the internet at home, 9% of adults use the internet but lack home access.

These internet users cite many reasons for not having internet connections at home, most often relating to issues of affordability.

Roughly 44% mention financial issues such as not having a computer, or having a cheaper option outside the home.

MOBILE ACCESS
As the use of smart phones continues to escalate in the U.S. researchers believe more of that 15% of non-users will be converted. That reasoning is based on the fact that 44% of non-users said they often ask others to look up information for them online.

“A majority of the public now owns a smartphone, and mobile devices are playing an increasingly central role in the way that Americans access online services and information,” said Aaron Smith, a senior researcher at the Pew Research Center’s Internet Project.

“For many, such as younger adults or lower-income Americans, cell phones are often a primary device for accessing online content — a development that has particular relevance to companies and organizations seeking to reach these groups.”

A thousand motorcycles rumbling down Fort Smith’s Garrison Avenue and delivering millions of dollars in economic impact is not unreasonable, says one motorcycle enthusiast – and city officials say they are willing to foster such an event.

Dennis Snow has worked for several years to convince Fort Smith officials to support a large rally, and more than two years ago coordinated a meeting between officials with Bikes, Blues & BBQ (BBBQ), Fort Smith Mayor Sandy Sanders and Claude Legris, executive director of the Fort Smith Convention and Visitors Bureau.

Snow is the owner and producer of Thunder TV, a Sunday morning show on Fox 24 about riding motorcycles in the region. Thunder TV also is the official TV show of Bikes, Blues & BBQ.

BBBQ is a motorcycle rally based in Fayetteville that just completed – held Sept. 18-21 – its 14th annual event. The event is nationally known, and draws more than 400,000 visitors to various cities in Benton, Washington and Carroll counties in Northwest Arkansas. Some of the visitors also stay at hotels in Van Buren, Fort Smith and other counties adjacent to Northwest Arkansas.

A 2005 study by the University of Arkansas’ Center for Business and Economic Research indicated that the 2004 event had an economic impact of between $34.725 million and $52.088 million.

“There is an obvious evidence of increases in taxes received by the city from hotels, motels, and restaurants during the period of the festival,” noted the study.

POSSIBLE BBBQ CONNECTION
Snow has support from Northwest Arkansas in his effort to piggyback off the BBBQ and develop a rally in Fort Smith.

Coleson Burns, assistant event director with BBBQ, was one of the event officials to visit with Mayor Sanders and Legris. A leadership change at BBBQ interrupted the process, but Burns said BBBQ officials “would be happy to talk about 2014” as soon as they get the 2013 event behind them.

“We looked at the (downtown Fort Smith) area. .. Everything is very nice. The facilities there are great. It’s just a matter of growth and marketing it the right way,” Burns told The City Wire.

Continuing, Burns said the expected growth of BBBQ will need to involve new partners.

“As it grows, as this event grows, we feel that it will have to expand, you know, geographically. I mean, we want to spread the wealth as much as we can within our capabilities,” Burns explained. “So, yes, should an opportunity arise, we are interested in expanding, both North and South.”

Burns said Fort Smith being 45 minutes away from Fayetteville is not a problem. The issue will be in organizing and managing an event.

“It’s not like I can just hire someone for a Fort Smith venue. There would an immense amount of coordination that would have to happen to make it the right fit for the right time,” Burns explained.

‘HAVE TO START NOW’
It’s the manpower support that Snow says he and others in Fort Smith can make happen. But Snow, who has been involved in various aspects of motorcycle rallies and events since 1977,  said city officials have to work close with he and others who know who to create a successful and “sustainable” event.

“We’re losing millions of dollars because we have the venues and the avenue and it’s just a great geographic location for an event like this. We can make this work here. ... We should have made it work here a long time ago,” Snow said.

When could the first event happen?

“We can do it next year, but we have to start now,” he said without hesitation.

Snow also said a rally coordinated with BBBQ could result in a standalone event unique to Fort Smith.

“That street (Garrison Avenue) is so perfect for a motorcycle rally. ... We hold something with that (Bikes, Blues & BBQ), and then it will springboard into a rally of our own in the Spring. I’m telling you man, we can do this. We can start our own rally here in downtown Fort Smith,” Snow said.

Legris said he has been in contact with BBBQ officials and hopes to meet with them “in the next couple of weeks.” Legris also said working with BBBQ could result in an event that is not just an extension of what happens in Fayetteville.

“Of course I would support this. ... Of course I would talk the thing up, because it can mean nothing but dollar signs for Fort Smith,” Legris said.

Mayor Sanders said Thursday that he might be willing to provide some money from his discretionary budget to get an event started.

“Absolutely. If it’s something of a significant size that would benefit the economy ... I would certainly consider it,” Sanders said.

STATE TOURISM PUSH
Legris also has another reason to be supportive of a motorcycle rally. The Arkansas Department of Parks and Tourism is working to promote motorcycle tourism in Arkansas. Parks and Tourism employee Grady Spann toured Arkansas by motorcycle in the fall of 2012 to promote the “Let’s Ride” campaign.

In an Oct. 5 address to members of the Fort Smith Regional Chamber of Commerce, Spann said the impact of motorcycle tourism is positive for events large and small. While everyone is aware of BBBQ, Spann said an August 2012 event – Mountains, Music and Motorcycles – in Mountain View, Ark., brought in an economic impact of $1.3 million in spite of its small-town venue.

Part of what makes motorcycle tourism such a lucrative field for business owners is that the biker demographic has changed.

"The clientele we see today is different. From 1985 to 2003, the median age for bikers increased from 27 to 41. Bikers from ages 40 to 49 increased from 13% to 27%. Fifty-plus-year-olds, and I'm in that age group now, went from 8% to 25%. That's because bikers are getting older, I guess," Spann said.

As if on cue, more than 250 motorcyclists rumbled through Fort Smith on Wednesday (Sept. 25) and stayed overnight before traveling up to Eureka Springs. The group was part of an “Ozark Hellbender” tour on a a 1,340-mile loop on mostly two-lane roads through Arkansas and Missouri and other mid-American states. Fort Smith was the fifth of seven stops during the Sept. 22-27 trip for the Harley Owners Group. Other stops included Hot Springs and the tour ends in Cuba, Mo.

“We had 250+ riders through today from all over the country, France and England,” noted a statement sent Thursday from the Fort Smith Convention and Visitors Bureau. “Most planned to spend the day today and they had to come by Miss Laura’s Visitors Center to get their travel books stamped this morning by ‘Miss Laura’ herself. We staffed up with 7 volunteers and opened the doors at 8:30. We had bikers waiting at 7:15 this morning. Not sure exactly how many stayed the night but I know the Marriott Courtyard was sold out last night. Today was a perfect example of how our River Valley area can play a major role in this type of tourism.”

Builders across Benton and Washington counties have been slinging their hammers to a steady pace through eight months of this year with new construction permits rising 49% in August when compared to the year-ago period.

The region’s four largest cities issued 165 permits for new homes during August. Those projects were valued at $40.986 million, versus 121 permits worth $27.471 million last year. The construction pace has risen 89% since August 2011 when these same cities issued 87 permits valued at $17.773 million.

Residential Permit Values (August)
Fayetteville: 43 units, $10.828 million, up 59%
Bentonville: 78 units, $20.191 million, up 55%
Rogers: 35 units, $6.847 million, up 41%
Springdale: 9 units, $3.130 million, 10.6%

Sean Morris, general contractor for ARC - Walker Brothers Construction, said he has seen a lot of new crews working in the area in recent months.

“Some of those who got out of the business have started building again and we also see new and outside area firms at work in this region,” Morris said.

The local metro area added 700 construction jobs since August 2012, according to the Bureau of Labor Statistics. That 8% increase was strong enough to push the metro area ranking into the top 50 out of 339 regions tracked by the Association of General Contractors of America.

“It has been a tough decade for much of the construction industry, considering that many areas experienced peak employment levels in the middle of the last decade,” said Stephen Sandherr, CEO of the contractor association. “More troubling, it will take a lot more growth before significantly more metro areas get back to peak employment levels in construction.”

Morris voiced some slight concern that there is a great deal of building going on right now.

“We have been building at a nice, steady pace, and don’t have much done product sitting around, but I have been in some subdivisions where just one or two houses are sold with 20 or more finished or nearly completed,” he said.

MountData.com reported there were 340 new homes listed for sale at the end of August. New homes comprised 9.12% of the overall listings last month. The percentage of new home inventory has risen from 7.76% two years ago.

Nationwide, new homes made up just 6% of total home sales last month, that is down from historical levels of 12%, according to the National Association of Home Builders.

Through June, new home sales in Northwest Arkansas totaled $109 million, up 28% from the same period in 2012, according to Paul Bynum, statistician with MountData.com. Bynum said builders sold 431 units in the first half of this year, up 15% from the prior-year period. The mean home price for new construction was $231,300 in the first half of 2013. Prices rose 9% from a year ago.

Morris said his firm on pace to close roughly 15% more home sales this year over last.

COMMERCIAL SECTOR
It’s been a few years since the building crane, once the official bird of Northwest Arkansas, has heavily decorated the regional skyline. But commercial jobs have been quite steady for the past 12 months with multifamily projects going up around the University of Arkansas and retail for restaurants and shopping continues to come online in Benton County.

In August, the four cities in this report issued a handful of new commercial jobs totaling $6.232 million in value. Commercial permit values declined from $13.918 million in the same month last year.

Springdale issued a permit for another Kum & Go located at 500 S. Thompson Ave.

In Rogers the city issued permits for the new Chewy’s Mexican restaurant at 4889 W. Pauline Whitaker Pkwy., and the Mommy & Me Nail Salon.

Bentonville issued a permit for the new Dunkin Donuts that will be located at 2349 S.E. 14th Street, as well as another strip shopping center along Walton Boulevard.

There were no new commercial permits issued in Fayetteville last month.

Other large scale commercial projects on tap Benton County over the next 30 to 60 days include construction of the AMP entertainment venue, a Wal-Mart Supercenter in Springdale, two Wal-Mart Neighborhood Markets — Centerton and Siloam Springs.

CVS Pharmacy has pegged two locations in the region, Bella Vista and Fayetteville and while those cities have approved building projects the land deals have not yet been closed. Tim Harrell, owner of the proposed site in Bella Vista, said he expects a deal will be reached in the next 30 days.

Permit Comparisons (January through August)
Fayetteville
2013: $221.519 million
2012: $218.246 million
1.49%


Bentonville
2013: $124.865 million
2012: $122.234 million
2.15%


Springdale
2013: $51.857 million
2012: $47.634 million
8.86%


Rogers
2013: $60.834 million
2012: $65.988 million
-7.81%

(Permits are for new construction, additions and remodels are not included.)

Sparks Health System in Fort Smith and Summit Medical Center in Van Buren is on track to have a Tennessee-based owner in early 2014.

The relatively new Board of Directors of Health Management Associates – the parent company of Sparks and Summit – announced early Wednesday (Nov. 13) that it supports the $7.6 billion acquisition offer from Community Health Systems. Barring any regulatory checks, the deal is expected to close in the first quarter of 2014.

Naples, Fla.-based HMA – the parent company of Sparks Health System in Fort Smith and Summit Medical Center in Van Buren – also reported Wednesday a more than $96.6 million loss in the third quarter thanks to more than $120 million in one-time accounting charges.

The quarterly financials were below the consensus estimate of analysts who watch the company. The consensus per share earnings were 15 cents per share rather than the loss of 37 cents per share. Also, the analysts projected quarterly revenue to hit $1.7 billion. The company reported revenue of $1.676 billion.

Accounting charges tied to interest rate swap and adjustments related to the swap was a hit of $18.9 million. Costs related to change of control, severance agreements and merger review totaled $102.9 million. Without the costs, the company would have posted earnings per share of 1 cent.

The company is also paying back to the federal government $31 million for Medicare and Medicaid payments erroneously received between July 1, 2011 and June 30, 2013.

THE BUYOUT DEAL
The $7.6 billion deal from Franklin, Tenn.-based Community Health was approved by an HMA Board that was ousted in a proxy fight pushed by New York City-based Glenview Management.

On Sept. 25, the newly installed HMA Board announced a review of the offer. Glenview had previously said the $13.78 per share offer was too low. The HMA Board now believes the deal is good for HMA shareholders.

"After conducting an extensive review in conjunction with our legal and financial advisors, we are confident that this transaction provides maximum value to HMA stockholders and represents the best path forward for the Company," Steve Shulman, Chairman of the Board, said in a statement.

Between Aug. 16 and Wednesday, the new Board met 11 times and held 18 committee meetings to review HMA operations and the acquisition offer. According to the statement, the acquisition study by several third-party firms determined “that a large initial investment would be necessary to build out HMA's information and clinical capabilities, among other things, and a successive long road to incremental value would not outweigh the benefits of accepting CHS's offer.”

HMA operates 71 hospitals in 15 states with approximately 11,000 licensed beds.

Community Health Systems is almost double the size of HMA, and its hospital portfolio includes eight facilities in Arkansas. Those include four in Northwest Arkansas – Northwest Medical Center-Bentonville, Northwest Medical Center-Springdale, Siloam Springs Regional Hospital and Willow Creek Women’s Hospital.

"This transaction will broaden our footprint into new geographic markets, allow us to form stronger networks and improve access to care, and strengthen our position for greater benefit and success under health care reform,” said Wayne Smith, chairman, president and CEO of Community Health. “All of which, when combined with expected meaningful synergies available to us through our infrastructure and systems, will enhance value for our shareholders, employees, physicians and the communities we serve. We look forward to continuing our work with HMA's associates and physicians to ensure a smooth and effective transition."

Shares of HMA (NYSE: HMA) closed Tuesday at $12.53. During the past 52 weeks the share price has ranged from a $17.28 high to a $7.25 low.

A myriad of factors are converging upon and within Arkansas’ banking sector and it is spurring renewed interests in mergers and acquisitions on the heels of a lengthy economic recovery and heightened regulatory oversight.

“The bigger banks are growing larger, swallowing up smaller institutions and there are several factors at play here,” said Gaines Dittrich, a banking consultant and CEO of Joplin, Mo.-based Dittrich & Associates. “Compressed margins and higher operating costs have some banks stretching into new markets in hopes of growing overall sales, while finding some synergies that help to reduce overall cost of operations.”

He said there are also a number of veteran bank owners who are ready to exit the business, and mergers and acquisitions make that possible. Analysts said that has been the case in Arkansas, with four high-profile mergers announced in the previous six months.

Garland Binns, banking attorney with Dover Dixon and Horne, said most of the bank acquisitions in Arkansas are a result of the pursuer wanting to increase market share in an existing community or to expand into new markets. By spreading their wings, acquiring banks can disperse their operating cost and overhead expenses over a wider area, while also finding savings in areas like compliance personnel and information technology.

Binns and Dittrich said recent consolidation activity in Arkansas and the U.S. has been “strategic” with the expanding banks targeting specific markets where they want to operate and often paying slight premiums in those deals. Dittrich said this is a departure from the FDIC-assisted takeovers in recent years that came with shared-loss agreements when the main targets were failing banks – mostly out of state.

Bank consolidation is nothing new, according to John Dominick, consultant and banking professor at the University of Arkansas. He said in the 1970s with the relaxing of regulation it became easy to obtain a charter and start a new bank. A plethora of institutions popped up across the country. The trend since 2000 has been consolidation, although much of the acquisition activity in 2010 and 2011 was related to bank closures.

He said community banks are starting to show profits and most have weathered the worst of the financial storm and that makes them more attractive to buyers and raises the selling price for the owners.

All three analysts expect to see more bank mergers in the next few years as the cost of doing business rises amid looming regulatory oversight.

THE DEALS
• June 2013: Home Bancshares acquires Liberty Bank, a deal valued at $280 million that creates the second largest bank in Arkansas with assets of $7.1 billion in assets.

The Home Bancshares-Liberty deal is seen by Dittrich as a “brilliant play” by Home Bancshares Chairman Johnny Allison and his Centennial Bank brand. He said the purchase was “textbook ideal” in that it gives Centennial Bank a broader footprint across the state – a market Allison knows very well. The pro forma bank will have 92 branches in Arkansas, more than double that of Centennial Bank prior to the merger, with almost no branch overlap.

“This deal creates a lot of value in Home Bancshares and at the same time provides an exit strategy for the closely-held Liberty Bank,” Dittrich said.

Wallace Fowler, Liberty Chairman and CEO, will walk away with roughly 1.2 million shares of Home Bancshares with a street value of roughly $35.7 million when the deal is done. Liberty Bank also announced cash severance of $1.88 million paid to each of three departing executives, Lloyd McCracken, Mark Fowler and John Freeman.

Binns said when a publicly traded company buys out a private owner in shares, in lieu of cash, there can be favorable tax advantages as the transaction is deemed a tax-free exchange. Those shares can then be redeemed in the open market at the owner’s discretion or passed through to an estate.

• July 2013: First Federal Bancshares acquires First National Security Co. in a deal valued at $124 million.

First Federal Bancshares’ recent buying spree included two institutions, First National Bank in Hot Springs and Heritage Bank of Jonesboro for a total cost of $124 million, slightly over book value, analysts said. Harrison-based First Federal said the banks would retain separate charters and the combined assets for the holding company would be roughly $1.4 billion, nearly three times higher than pre-merger. Like the Home Bancshares deal, First Federal’s expansion gave the thrift a much broader footprint into two of the state’s growing markets, Hot Springs and Jonesboro.

First Federal is not only buying, but also selling some of its branches as it continues to rationalize its branch network. The bank recently sold its branch in Farmington to First Security Bank. The Farmington branch opened in 1997, and is located just four miles west of Fayetteville, and grew assets to $10.7 million.

Chris Wewers, president and CEO of First Federal Bank, recently said after careful evaluation of the branch, the firm felt it best to sell the asset. He said First Federal likes to obtain a critical mass and deposits of $20 million in a branch to justify its existence. First Security, on the other hand uses $15 million as its minimum threshold for branch deposits.

September 2013: Simmons First National acquires Metropolitan National Bank with a bid of $53.6 million paid to the federal court for the ongoing bankruptcy proceedings of Rogers Bancshares, the holding company for Little Rock-based Metropolitan National Bank.

The recent Simmons First National bid to purchase Metropolitan National Bank, was a little different, as Metropolitan was deemed a “troubled institution” – out of compliance with its regulatory enforcement actions. But, the $53.6 million purchase price for Metropolitan Bank, was seen as a “good deal” by analysts given the marketshare gains for Simmons First in Little Rock.

“Simmons First National has always catered to farm communities, being headquartered in Pine Bluff. Even some of the branches in Northwest Arkansas, like in Lincoln and Siloam Springs, cater to farmers. This deal gives Simmons a substantial marketshare gain in Little Rock, that’s great for diversity and puts them in the most populated area of the state,” Dominick said.

Simmons CEO George Makris said he does expect “significant branch consolidations to occur” once the deal is completed. Analysts predict much of that consolidation will take place in Northwest Arkansas where Metropolitan is heavily invested in underperforming branches (under $15 million in assets). There is considerable overlap in branch locations in Little Rock as well for the two banks.

Makris said this deal was financially attractive on several levels. Bank officials expect 25% earnings per share accretion in fiscal 2014 and 35% by 2015 after the first full year of conversion. The internal rate of return for this deal is a projected 27% with a three-year payback.

Simmons projects a cost savings of $15 million when the merger is completed. Makris said FDIC insurance cost savings will be roughly $1.6 million, while reduced legal fees and IT expenses will save $2.4 million. Those savings will be phased in at 60% the first year and 100% thereafter. He expects Simmons will see the full benefit in the third quarter of 2014.

• October 2013: Arvest Bank acquired Little Rock-based National Bank of Arkansas for an undisclosed amount.

Arvest, the state’s largest bank, just got a little bigger adding key marketshare in the Little Rock metro area with the pending purchase of National Bank of Arkansas.

“This acquisition of NBA will certainly help improve our marketshare in central Arkansas. We are looking forward to getting acquainted with NBA’s associates and customers. We like their locations in North Little Rock, west Little Rock and Conway, particularly,” said John Womack, chairman and CEO of Arvest Bank in Little Rock.

Bob Osborne, National Bank of Arkansas’ majority shareholder and chairman, recently said the time to sell the bank was “now” and after careful consideration bank ownership believed Arvest was the right fit. NBA has assets of $187 million, and posted net losses of $44,000 through the first half of this year, pocketing just $8,000 in all of 2012, according to the FDIC reports.

With the combined deposits of Arvest and NBA, the pro forma bank will command 7.64% of the Little Rock marketshare, leaping over the pro-forma Simmons-Metropolitan bank market share of 7.13%, based on the June 30, deposit report by the FDIC.

Phil Knight, a banking consultant in Rogers, said on the surface the deal looks like a good play for Arvest in terms of buying deposit market share, but without knowing how much was paid it’s hard to know how good. He said with NBA’s book value somewhere around $15.5 million, this deal is likely quite a bit cheaper than the $56 million offer Simmons made for the larger Metropolitan National Bank.

Banks have been selling somewhere around 1.5 times book value, if the bank is not under stress, according to Knight.

SMALL BANK CONCERNS
Three of the four mergers previously mentioned involved closely-held banks, with long-term family ties, a characteristic that roughly half of the nation’s community banks share.

Dittrich said the smaller, closely-held banks are the most vulnerable to acquisition in what he predicts will be the next wave of consolidations. He said smaller, family-owned banks face major headwinds with heightened regulatory costs related to Dodd-Frank legislation and Basal III capital requirements, which raise the cost of operations and compress bank earnings in an effort to decrease the potential instability resulting from large national and global financial companies that are highly leveraged.

“Banks with less than $200 million assets are going to have a hard time generating profits in light of the regulatory costs that are coming over the next three years, Dittrich said.

There are 147 banks doing business in Arkansas, conducting business in 1,442 branches, as of June 30. There were 96 banks chartered in Arkansas, and 63 of these had less than $200 million in assets. There were 30 banks in Arkansas operating with federal charters, 13 of these reported less than $200 million in assets as of June 30.

“Many small banks in Arkansas write a large number of commercial real estate loans, which carry a higher capital requirement under the new Basal III rules. Banks have maintained 100% risk weight for most CRE loans, but the new regulation creates a 150% risk weight for commercial real estate. That means banks will have to raise capital or make fewer loans,” he said.

The latter is the most likely scenario, Dittrich said, given that capital is hard to come by for many community banks still carrying a hefty pile of real estate on their balance sheets from the 2008 recession and the subsequent real estate bust. He said Basal III also creates a 150% risk weight for almost all past due exposures (excluding residential mortgages).

Dominick agreed that Basal III and Dodd-Frank regulation will sting small banks harder than their larger competitors. He said there are two things likely keeping small community bankers up at night.

First, he said the overhang of real estate on the books is a concern, particularly for banks that invested in Northwest Arkansas during the building boom. Next, he said the compliance issues they face with Basal III and Dodd-Frank, which are still being written. These weigh heavy on their minds because of the impact the new rules will have on bank capital, which is still very hard to raise for many banks, especially those with $500 million in assets and less, he said.

There were 546 households in the Natural State facing possible foreclosure last month, but new filings declined in Northwest Arkansas and remained flat in the Fort Smith market, according to Calif.-based RealtyTrac.

The Arkansas tally was up 4.5%, with the U.S. rate down 28%. Nationally, the marketing firm reported 133,919 properties, or one in 978 households, were seriously delinquent on their mortgages in October. Some states like Maryland, Delaware and New York saw triple digit increases in the number of judicial foreclosures filed last month.

Arkansas is a non-judicial state meaning that the foreclosure process does not require a court hearing or judges signature to complete.

In Northwest Arkansas there were 84 new filings in October - 59 of those were in Benton County where there were 31 properties slated for auction and 28 already making their back to the lender. The total filings in Benton County were down 37% from a year ago.

RealtyTrac reported 25 new filings in Washington County, and 21 of those were slated for auction as four properties were recovered by lenders. Total filings are down 34% from a year ago.

In the Fort Smith market there were 12 new filings last month, compared to 11 a year ago. This market had 4 properties listed for auction and 8 going back to lenders.

Crawford County reported 13 filings, down from 17 in October 2012. In Crawford County the all 13 of the new filings were for properties slated for auction.

The backlog of homes that clogged up the pipeline in recent years is thinning out in Arkansas, but defaults among amended mortgages from two and three years ago have started to escalate, according to local notices published in recent weeks.

It has taken two and three years to move some properties through the pipeline, but lenders are seeing better demand from institutional investors seeking rental properties and pushing these deals through at a faster pace today, according to Daren Blomquist, vice president of RealtyTrac.

Prudential Alliance Realty in Tulsa notes that banks have let homeowners stay in the defaulted homes as renters as long as prices were moving downward. But now that prices are moving up again and there is investor demand lenders are starting the foreclosure process.

There are 368 foreclosed home listed for sale at this time in the local multiple listing service with includes all four counties in this report, according to Jim Long, agent with Crye-Leike Real Estate in Benton County.

The number of foreclosure listings rose from 354 last month and are down from 373 in August.

Foreclosure listings peaked at 393 in July, rising from 222 in March of this year. The listings have slowed a bit, according to Long, who adds the clean, well-kept properties are still selling fast, as more investors are back in the market.

Wal-Mart Stores Inc. execs have decked the halls in hopes of ample holiday cheer, despite negative comp sales in the U.S. for the 13-week period ending Oct. 25.

The mass merchant discounter reported steady net income of $3.738 billion in the third quarter, up 2.8% from a year ago. On a per-share basis that’s $1.14, up 6.5% from last year and one penny better than analysts expected.

That said, Wal-Mart missed guidance for top line revenue with consolidated net sales of $114.9 billion, up 1.6%. Wall Street analysts expected $116.8 billion, but the retailer said with currency fluctuations and acquisitions aside, its total net sales were $116.2 billion in the quarter.

Wal-Mart shares slid backward in early trading on Thursday (Nov. 14) following the announcement. But by mid-morning, when analysts had digested all the numbers, the shares turned positive — trading around $79, up 10 cents at the noon hour.

Mike Duke, CEO of Wal-Mart Stores Inc., considered the quarterly performance “solid” based on operating income across all segments, as the retailer was able to curtail its expenses to help offset sluggish sales, weaker traffic and lack of grocery inflation.

"Our most important priority is growing top line sales, including comp sales," Duke noted in the statement. "The retail environment, both in stores and online, remains competitive. Wal-Mart has aggressive plans to help our customers enjoy the holiday season, and there is no doubt that we plan to win for our customers and shareholders throughout the holidays."

U.S. COMPETITION

Duke said consumers remain wary about the economic outlook and concerned about their job. Wal-Mart results are typically seen a barometer for the overall national economy given the retailer’s size and geographic reach across the U.S.

But analysts have said the caution that Wal-Mart touts quarter to quarter is not exactly what other retailers are reporting at this time.


Wal-Mart comp stores sales in the U.S. – a closely watched metric – were down 0.3% in the quarter. Neighborhood Market, Wal-Mart’s smaller grocery format, saw comp sales rise 3.4%. Sam’s Club reported comp sales of 1.1% without fuel.

CNBC contributor Jim Cramer said that perhaps Wal-Mart is getting squeezed by other discounters like Costco, who just reported same-store comps of 6% in the same economy.

“When Costco reported 6% comp store sales last week, the street paused, but you can’t tell me that Wal-Mart wouldn’t kill for 6% comps,” Cramer said.

U.S. net sales grew to $67.7 billion, up 2.4% in the quarter damped by a 0.4% decline in store traffic. Operating income increased 5.8% to over $5.1 billion as the retailer did a better job of managing expenses.

Despite negative same-store comp sales, Wal-Mart said its investment in price is helping to drive market share gain in numerous categories such as food and consumables, health & wellness, produce, home, apparel and wireless.

Walmart U.S. CEO Bill Simon said overall the quarter started slower than they would have liked.

“Sales began to pick up in September and October as we featured ‘stock up and save’ and ‘October rollbacks,’" Simon said during a media call. “We have robust plans for the holiday season, some 2 million layaway transactions have been recorded as of last week.”

The entertainment category has been challenging, but Simon said as the quarter progressed and exclusive offers for gaming devices were offered through layaway, he expects to see better results in this lackluster category during the fourth quarter.

He said inventory is up 5.1%, partly due to aggressive holiday buys. This is down from the 6.9% increase at the end of the second quarter.

Wal-Mart said it’s too early to know any impact they may feel from the SNAP reductions that took place Nov. 1 and while they can’t say for sure the 16-day government shutdown hurt their business, they can’t imagine that it helped.

Simon said traffic in stores did pick up following the resolution to the government shutdown.

FCPA COMPLIANCE
Wal-Mart said it spent $69 million in the recent quarter on compliance issues regarding the Foreign Corrupt Practice Act, which was below its $78 million estimate.

About $43 million went to expenses incurred for the ongoing inquiries and investigations in Mexico, China, Brazil and India. Roughly $26 million is related to Wal-Mart’s internal global compliance program.

Core corporate expenses rose 15.1% year over year. The company said roughly 5% of that increase is related to the FCPA matter. The rest has to do with the timing of charitable giving.

This year Wal-Mart has spent $224 million on its compliance issues, more than half of that related to FCPA investigations ongoing for the past 18 months.

SAM’S CLUB
Sam’s Club posted net sales, including fuel of $14.1 billion, up 1.1% over last year. Fuel prices decreased 7.7% and gallons sold were up 2%, creating a burden to overall sales of 1%.

Operating income increased 9.2% to $474 million in the quarter.

Sam’s Club generated a comp of 1.1%, without fuel, for the 13-week retail sales period. Comp traffic grew 2.4% and comp ticket declined by 1.3%, driven by softness in tobacco business.

Both Business and Savings members posted positive traffic this quarter, with growth primarily coming from Savings members.

Membership income grew 8.1%, up from 4% last quarter, as the benefit of the fee increase implemented earlier this year accelerates. The benefit will continue to be a tailwind in the upcoming quarter and throughout the next fiscal year.

In Q3, members received one Instant Savings book, valid from Aug. 28 through Sept. 22, that included more than $4,500 in savings. These savings are automatically loaded onto every member’s card. The books are bringing members into categories previously not shopped, and some of these members have continued shopping these categories after the event.

“Inventory, including fuel, grew 6.3% during the third quarter, significantly less than this time last year. New club growth, strategic builds for our Instant Savings events, and holiday merchandise inflated our inventory position, while sell-through of summer inventory was in line with expectations,” said Rosalind Brewer, CEO of Sam’s Club.

WALMART INTERNATIONAL
The international divisional had a 0.2% increase in net sales, achieving $33.1 billion.

On a constant currency basis, net sales were $34.4 billion, up 4.1%, according to Walmart International CEO Doug McMillion.

“Currency negatively impacted sales by approximately $1.6 billion, and our Yihaodian acquisition in China added $314 million in sales,” he added.

The international division is in the midst of major changes as the retailer recently abandoned its venture with Bharti in India, sold the VIPS restaurant chain in Mexico, plans to close 50 underperforming stores in Brazil and China and plans to increase its ownership of Walmart Chile to 97%. Outside of challenging economic metrics in Japan and Mexico, McMillion said most of the other markets are growing market share and total sales ever so slightly.

He said the fourth quarter is well under way for our markets. The slow- growth macroeconomic environment is persisting through the first month of this quarter, and the markets continue to be competitive.

“We will manage our cost dollars well and stay focused on growing sales to give ourselves the opportunity to leverage. We also remain committed to growing our e-commerce business aggressively,” McMillion said.

LOWER GUIDANCE
Even with the aggressive plans, the company is not confident that consumers will spend more during the holidays. Wal-Mart has lowered its fourth quarter earnings per share guidance to between $1.50 and $1.60. The actual earnings may be 10 cents per share higher.

The company reported a 10 cents per share cost is likely during the fourth quarter in a move to close 50 underperforming stores in Brazil and China (6 cents), and the ending of a franchise agreement in India (4 cents).

Full year guidance was lowered to range between $5.11 and $5.21. The previous guidance was a range between $5.10 and $5.30. Wal-Mart guidance earlier in the fiscal year had per share earnings in the $5.20-$5.40 range.

Wal-Mart has posted net income of $11.591 billion for the first three fiscal quarters of the year, up 1.7% compared to the same period in 2012. Total revenue for the first three fiscal quarters is $346.588 billion, also up 1.7% compared to the 2012 period.

Tyson Foods in conjunction with its joint venture partner, Godrej recently announced a new chicken product inside its India operations.

The partnership introduced its “Real Good Chicken” brand priced at 76 cents (US) for a 400 gram package, according to a press release out of India earlier this week.

White-meat products such as this have been a rarity for many Indian households as inflationary pressures forced homemakers to reduce the quantity of protein in their diets, according to
Arabind Das, chief operating officer of Godrej Tyson Food Ltd.

“The range of products under the brand will not just provide consumers affordable and safe quality chicken but enable them to make protein an integral part of the diet, he said.

It will cost a little extra to ship that package to the family during the holidays next year if the United States Postal Service gets its way.

The USPS announced Thursday (Nov. 14) that it would increase prices on Postal Service Shipping Services by 2.4% effective Jan. 26, 2014, should the Postal Regulatory Commission (PRC) approve the rate hike.

Some of the new prices for shipping are as follows:
• $19.99 for retail flat rate, padded flat rate and legal flat rate envelopes priority express;
• $44.95 for flat rate boxes priority express; and
• Prices starting at $5.60 for domestic priority flat rate products.

Postal Service customers will also have a new choice for shipping domestic Priority Mail Express next year, according to a press release from the USPS.

"The new delivery service option will allow customers to send domestic Priority Mail Express packages to most locations in the U.S. by 10:30 a.m. for an extra $5.00 feet," it said. "Domestic Priority Mail Express is a fast, reliable service which offers day-specific delivery information, up to $100 free insurance and free package tracking."

The impact will not only be felt by individuals using the Postal Service, but also business owners.

Jerry Walrod, owner of Walrod's Hardware in Fort Smith, said he does not expect a large impact though he has to compensate for any increases for getting merchandise into the store and on the shelves.

"Yes, it does affect the price that I put on the merchandise. And yes, I have raised it over the years," he said. "But not necessarily enough (to compensate for the higher freight costs)."

Walrod said he often uses UPS for his shipping needs or uses True Value Hardware's private trucking line to receive merchandise as a way to save on costs instead of using the Postal Service. Using True Value's line, he is charged a 6.93% up charge on merchandise.

And even though many shoppers think hardware stores are overpriced, he said he always tries to keep his prices low and not always pass on the full cost of freight to his customers.

"I'm not going to gouge my customers," he said. "But when things get tight, I do know that some of my competitors (will raise) their prices big time."

Even with the impacts his business could feel should he have to rely on the Postal Service for any shipping next he, he said customers should not expect any increases on Jan. 26.

"I don't raise my price until I have to re-buy it," he said, adding that he would still be unlikely to raise the prices to compensate for the full amount he his family-owned business is set back due to the rise in shipping prices.

Nagisa Manabe, chief marketing and sales officer at the Postal Service, said even with the increase USPS has proposed, she believes the Postal Service is one of the lowest priced shippers in the nation.

"The Postal Service remains the best in value in the shipping business," she said. "We continue to offer excellent domestic Flat Rate shipping with a price that doesn't vary by destination."

The Postal Service last proposed a price increase in September, asking that the cost of first-class stamps rise to 49 cents in 2014. The planned increase announced in September and this month are an attempt by the Postal Service to plug a $20 billion budget gap, the service said at the time.

A water park project over budget, a ‘pipeline’ for females to be elected governor, and the continued fight over Obamacare are part of the Fort Smith area Friday Wire for Nov. 15.

NOTES & ANALYSIS
• The worried consumer
Wal-Mart Stores on Thursday reported quarterly income of $3.738 billion, up 2.8% overall, but same store comps in the U.S. were down 0.3%.

Wal-Mart President and CEO Mike Duke said consumers remain wary about the economic outlook and concerned about their job. Wal-Mart results are typically seen a barometer for the overall national economy given the retailer’s size and geographic reach across the U.S.

Duke’s not an economist, but it’s not unreasonable to think he has as good a grasp on economic conditions a a gathering of Federal Reserve governors. If he says consumers are worried, they are.

• Service center uncertainty
The relatively new Board of Directors of Health Management Associates – the parent company of Sparks and Summit – announced Nov. 13 that it supports the $7.6 billion acquisition offer from Community Health Systems. Barring any regulatory checks, the deal is expected to close in the first quarter of 2014.

The deal, like it or not, does inject some measure of uncertainty into the future of a newly opened HMA regional service center in Fort Smith. HMA officials announced in April that the center would be housed in what was once a portion of Phoenix Village Mall. HMA said at least 500 will be employed at the center, and estimated the annual payroll at $21.5 million, with the center at full employment within 12 months. The facility began operations in mid September.

• Water money
Construction of a long discussed, voter-approved water park in Sebastian County is now uncertain.

Concerns raised earlier this year by members of the Sebastian County Quorum Court that the planned Ben Geren Aquatics Center could come in over budget have been realized after County Judge David Hudson revealed during a Nov. 12 Quorum Court meeting that designers have estimated the water park to cost almost $11 million should all features requested in public meetings be in included in the design.

The county and city of Fort Smith were to share costs on the project. It will be interesting to watch elected officials with both governments wrestle with this dilemma. Stay tuned.

ICYMI
Following are a few stories posted this week on The City Wire that we hope you didn’t miss. But in case you missed it ...

• 'Pipeline' needed for female Arkansas Governor
Having a female name on the door of the Arkansas Governor’s office in the State Capitol is just a matter of finding the right candidate, says Gov. Mike Beebe. But two women who watch Arkansas politics say women face culture obstacles and a “pipeline problem” with respect to being elected to the state’s top office.

• Changing retail trends
Retail’s landscape over the next five years, powered by such trends as smart phones, sweeping demographic shifts, and radically transformed consumer expectation, could be Kryptonite for brick-and-mortar stores, creating more painful change than in the last century.

• Here we go again
The fight over the Affordable Care Act is not over. At least according to U.S. Rep. Tom Cotton, R-Dardanelle.

NUMBERS ON THE WIRE
$11 million: The estimated cost of building Ben Geren Aquatics Center up to conceptual designs previously shown to the public.

$162,000: Amount approved by the Fort Smith Board of Directors for funding of outside agencies.

20,000+: Number of veterans hired by Wal-Mart Stores following a Memorial Day announcement that the company would hire at least 100,000 veterans in the next five years.

564: Number of homes in Arkansas in a foreclosure process during October. The number was up 4.5% compared to October 2012.

OUTSIDE THE WIRE
• Small Business and ObamaCare
One of President Obama's proudest boasts about the Affordable Care Act is that it helps small business. The White House website says the health law "makes it easier for businesses to find better coverage options" and "stops insurance companies from taking advantage of you, giving the consumer and business owner more control and making health-care coverage more affordable." Small businesses aren't buying it.

• The Wal-Mart fight in Kenya
In Africa, foreign investors beware: business is often a family affair. Just ask Wal-Mart, the world's largest retailer. When it sought a foothold in east Africa, it sparked a family feud in one of its acquisition targets, Kenya's Naivas supermarket chain.

• Good growth in Arkansas?
Meredith Whitney, the Wall Street analyst who forecast a flood of U.S. municipal-bond defaults in 2010 that hasn’t materialized, predicts that growth in states such as Arkansas and South Dakota will be twice the national average, according to the presentation. Those states have one-third less consumer leverage, lower taxes, right-to-work laws and high commodity exposure, the presentation shows.

WORD ON THE WIRE
"It's typically a longer term process. It's a frustrating process. I can tell you I do these for sites all across the state and it typically takes a significant among of time to get to this point to select an ultimate remedy. Because what you want to do is when you select your ultimate remedy, you want to know that you have all the information."
– Ryan Benefield, deputy director of the Arkansas Department of Environmental Quality, responding to a question about why it has taken so long for the agency to clean up TCE pollution caused by a chemical spill at the former Whirlpool manufacturing facility in south Fort Smith.

“The best we’ve been able to determine looking at this program and similar programs across the country, somewhere between 25% and 30% of the value of the tax credits make it to the end-project company. That means 70% of the value of the tax credit is going someplace else. Where? I’m not sure anyone is completely sure."
– Grant Tennille, executive director of the Arkansas Economic Development Commission, addressing concerns about the New Markets Tax Credits passed by the Arkansas General Assembly during the 2013 legislative session

“Arkansas has never elected a female to hold a Constitutional office that the office is not considered a traditional female role, such as Attorney General or Lieutenant Governor. Such an office could vault them into the office of Governor during a non-incumbent year. Such was the case in Texas, Oklahoma and Louisiana.”
– Megan Tollett, executive director of the Republican Party of Arkansas, when asked why Arkansas has not yet had a woman elected governor

“I received a note from a fifth-grade student from Fort Smith, (Ark.), named Stephanie, who wrote after her visit to the Museum, ‘Before, I looked at art as just something someone painted on a canvas. But now I look at it as something someone put their feelings into and made it from their heart,’ I want everyone to see contemporary art through the eyes of the artists. That’s why we’re doing this.” 
– Alice Walton, about a new exhibit planned for the Crystal Bridges Museum of American Art

Notes of success at Crystal Bridges Museum, a ‘pipeline’ for females to be elected governor, and a retail fight in Kenya are part of the Northwest Arkansas Friday Wire for Nov. 15.

NOTES & ANALYSIS
• The worried consumer
Wal-Mart Stores on Thursday reported quarterly income of $3.738 billion, up 2.8% overall, but same store comps in the U.S. were down 0.3%.

Wal-Mart President and CEO Mike Duke said consumers remain wary about the economic outlook and concerned about their job. Wal-Mart results are typically seen a barometer for the overall national economy given the retailer’s size and geographic reach across the U.S.

Duke’s not an economist, but it’s not unreasonable to think he has as good a grasp on economic conditions a a gathering of Federal Reserve governors. If he says consumers are worried, they are.

• Crystal clear
More than one million visits have been logged at Crystal Bridges Museum of American Art in Bentonville, and the complex has had a remarkable string of successes and accomplishments in its first two years.

The museum, opened on Nov. 11, 2011 (11-11-11), had 560,165 visits in 2012 for an average of 1,530 a day. Between Jan. 1, 2013 and Nov. 4, the museum had 443,665 visits for an average of 1,440.

To mark the second anniversary of the museum, Crystal Bridges President Don Bacigalupi announced a “State of the Art” initiative that will debut at the museum on Sept. 13, 2014, and be on display until Jan. 5, 2015.

One doesn’t need a crystal ball to know that Crystal Bridges will continue to be a unique, educational and economically valuable asset to all of Arkansas. Kudos to all those who make the place work.

ICYMI
Following are a few stories posted this week on The City Wire that we hope you didn’t miss. But in case you missed it ...

• 'Pipeline' needed for female Arkansas Governor
Having a female name on the door of the Arkansas Governor’s office in the State Capitol is just a matter of finding the right candidate, says Gov. Mike Beebe. But two women who watch Arkansas politics say women face culture obstacles and a “pipeline problem” with respect to being elected to the state’s top office.

• Changing retail trends
Retail’s landscape over the next five years, powered by such trends as smart phones, sweeping demographic shifts, and radically transformed consumer expectation, could be Kryptonite for brick-and-mortar stores, creating more painful change than in the last century.

• Here we go again
The fight over the Affordable Care Act is not over. At least according to U.S. Rep. Tom Cotton, R-Dardanelle.

NUMBERS ON THE WIRE
20,000+: Number of veterans hired by Wal-Mart Stores following a Memorial Day announcement that the company would hire at least 100,000 veterans in the next five years.

564: Number of homes in Arkansas in a foreclosure process during October. The number was up 4.5% compared to October 2012.

8%: Estimated amount of total e-commerce retail sales in the U.S.

121,000: Number of visitors to the Norman Rockwell exhibit at Crystal Bridges Museum of American Art.

OUTSIDE THE WIRE
• Small Business and ObamaCare
One of President Obama's proudest boasts about the Affordable Care Act is that it helps small business. The White House website says the health law "makes it easier for businesses to find better coverage options" and "stops insurance companies from taking advantage of you, giving the consumer and business owner more control and making health-care coverage more affordable." Small businesses aren't buying it.

• The Wal-Mart fight in Kenya
In Africa, foreign investors beware: business is often a family affair. Just ask Wal-Mart, the world's largest retailer. When it sought a foothold in east Africa, it sparked a family feud in one of its acquisition targets, Kenya's Naivas supermarket chain.

• Good growth in Arkansas?
Meredith Whitney, the Wall Street analyst who forecast a flood of U.S. municipal-bond defaults in 2010 that hasn’t materialized, predicts that growth in states such as Arkansas and South Dakota will be twice the national average, according to the presentation. Those states have one-third less consumer leverage, lower taxes, right-to-work laws and high commodity exposure, the presentation shows.

WORD ON THE WIRE
“The best we’ve been able to determine looking at this program and similar programs across the country, somewhere between 25% and 30% of the value of the tax credits make it to the end-project company. That means 70% of the value of the tax credit is going someplace else. Where? I’m not sure anyone is completely sure."
– Grant Tennille, executive director of the Arkansas Economic Development Commission, addressing concerns about the New Markets Tax Credits passed by the Arkansas General Assembly during the 2013 legislative session

“Arkansas has never elected a female to hold a Constitutional office that the office is not considered a traditional female role, such as Attorney General or Lieutenant Governor. Such an office could vault them into the office of Governor during a non-incumbent year. Such was the case in Texas, Oklahoma and Louisiana.”
– Megan Tollett, executive director of the Republican Party of Arkansas, when asked why Arkansas has not yet had a woman elected governor

“I received a note from a fifth-grade student from Fort Smith, (Ark.), named Stephanie, who wrote after her visit to the Museum, ‘Before, I looked at art as just something someone painted on a canvas. But now I look at it as something someone put their feelings into and made it from their heart,’ I want everyone to see contemporary art through the eyes of the artists. That’s why we’re doing this.” 
– Alice Walton, about a new exhibit planned for the Crystal Bridges Museum of American Art

Arvest Bank, with the help of customers and communities, the bank announced today it exceeded the campaign goal by raising a total of 1.8 million meals in the fight against hunger with its 1 Million Meals effort.

The campaign total of 1,813,384.95 million meals was made possible with donations from the bank, Arvest associates, customers and local residents through fundraisers, events and nonperishable food drives in all Arvest branches from Sept. 4 through Nov. 2. The success of the campaign comes just in time to help local food banks and hunger organizations meet their increased needs during the holiday season.

“We are thrilled that, through the efforts of our customers and associates, Arvest was able to provide meals to our neighbors in need,” said Lisa Ray, Arvest Bank president in Springdale. “We hope the increased awareness about hunger in Northwest Arkansas and the River Valley will continue to help feed our neighbors long after we’ve completed this year’s campaign. One Million Meals is a great example of the impact that can be made when many people come together.”

In Northwest Arkansas and the River Valley, Arvest partnered with 18 food partners for the campaign. The organizations will receive all donations from their local area, and this year 706,623 total meals were provided in overall in Northwest Arkansas and the River Valley.

The organizations in Northwest Arkansas and the Fort Smith area are:
• Helping Hands, Bentonville
• Oasis Food Pantry at Free Will Evangelical Church, Bella Vista
• Farmington Senior Center, Farmington
• 7Hills Homeless Center, Fayetteville
• Life Source International, Fayetteville
• Arkansas Rice Depot Food for Kids Backpack Program, Fort Smith
• Community Services Clearinghouse Meals for Kids Backpack Program, Fort Smith
• Gravette Gardens, Gravette
• Madison County Senior Activity Center Meals On Wheels, Huntsville
• The Grace Place, Lincoln
• First Baptist Church of Lowell Food Pantry, Lowell
• NWA Food Bank, Lowell
• West Fork Elementary Backpack Program, West Fork
• Life Ministries, Prairie Grove
• Pea Ridge Ministerial Alliance, Pea Ridge
• Samaritan Community Center, Rogers
• Manna Center, Siloam Springs
• Springdale Public Schools Health Services, Springdale

All money and nonperishable food items raised through this campaign directly benefitted 53 different organizations feeding local communities in four states – Arkansas, Kansas Missouri and Oklahoma.

The bank decided to provide one million meals because hunger is an issue in every community it serves. In 2012, one in six American households reported food hardship, or not having adequate funds to provide enough food for their family.

For more information about 1 Million Meals, visit arvest.com/millionmeals.

Wal-Mart and the Wal-Mart Foundation are committing $1 million to the Red Cross and Save the Children for emergency relief efforts in response to needs created by Typhoon Haiyan in the Philippines. 

The donation includes funds given by the Wal-Mart Foundation and Wal-Mart's international operations.

In addition to the $1 million donation, Wal-Mart is making it easy for U.S. customers and associates to make personal contributions to relief efforts by setting up online sites for donations to the Philippines through the Red Cross at the following website link.
 Wal-Mart

"Giving back to our communities, especially in a time of need, is part of our culture at Wal-Mart," said Doug McMillon, president and CEO of Walmart International. "A crisis only reinforces that commitment, and our thoughts are with the people affected by this disaster. We're proud to help the Red Cross and Save the Children get vital assistance to the Philippines as quickly as possible."

Funds donated will focus on addressing immediate needs. Both organizations are providing relief for immediate needs such as nutritious food, medical supplies and health care. Additionally, Save the Children will set up child friendly spaces to help children cope with trauma and fear in the wake of this devastating storm.

"Thanks to the generosity of Wal-Mart, the Red Cross is able to provide critical support to Typhoon Haiyan survivors in the Philippines now and as they rebuild and recover," said Neal Litvack, chief development officer at the American Red Cross.

Home sales across Northwest Arkansas were strong in October with 206 unit sales in Washington County and 361 in Benton County. Unit sales rallied 21.17% and 8.4%, respectively, when compared to the month last year, according to MountData.com.

The two counties recorded more than $99.781 million in total sales volume last month rising 32% in Washington County ($36.62 million) and 9.36% higher in Benton County ($63.15 million).

While the number of sales continue to improve year-over-year, the price-per-square-foot has tapered a bit as the foreclosure market has been more brisk in the last quarter or so, according to George Faucette, CEO of the local Coldwell Banker franchise.

Median home prices in Benton County dipped to $143, 649 during October. On a per-foot basis prices receded from $82.6 to $79.6 in the year-over-year period, according to MountData.com. In Washington County, the median price totaled $146,550 in October. On a per-square-foot basis the price rose to $84.10, up from $81.2 in the same month last year.

“Every month this year has been better than every month last year, but our sales volume for October was flat compared to the same month last year,” Faucette said.

Through the first 10 months of this year he said his firm has posted a 22% increase in sales volume and closed 19% more units than in the same period of 2012.

“The average price is up 3% over 2012. As our closed foreclosure business has picked up in September and October, prices have moderated some,” he said. “But, an increase of 3% is still good and healthy for this market."
 
Agents agreed that it takes much more than one month to make or break a year and they remain bullish on a strong finish to 2013.

YEAR-TO-DATE
There are many good, visible signs in the local real estate market through 10 months of this year. Agents have sold 6,172 homes through October for a total value of $1.13 billion, up 25% from the same period in 2012.

Paul Bynum, analyst with MountData.com, said the average market time from listing to contract this year has been roughly 50 days, an indication that demand is strong relative to the supply of homes on the market.

The median price-per-square-foot is $84 through October, up from $78 a year ago. The median sales price of $149,900 in the combined two-counties is up 7% from a year ago, Bynum reports.

There was a 6-month supply of homes listed for sell at the end of October, which Bynum deems a balanced market for buyers and sellers.

MORTGAGE FINANCE
Multiple reports in recent days outline lower down payment programs for qualified homebuyers looking for cheaper loans. Since 2009, buyers have needed to come to the table with as much as 20% down or they had to turn to the Federal Housing Administration for a low 3% to 5% down-payment loan.

But recently, Bank of America, Wells Fargo and TD Bank have loosened the strings, offering loans with down payments that are as low as 5%.

TD Bank's "Right Step" mortgage, for example, allows borrowers to secure a loan with a 5% down payment. It also allows buyers to receive as much as 2% of the sale price as a gift from a relative or other third party, so they would really only need 3% down.

Mortgage bankers said this is huge marketing opportunity that could take some of the wind out of the sales of what has been largely been an FHA dominated market place. The FHA loans are typically more expensive than conventional products because of the required private mortgage insurance feature that can add thousands to the borrowing cost over the life of a loan.

While the private lenders that are offering the 5%-down loans are also requiring borrowers to buy private mortgage insurance, they are only requiring them to do so until they build up 20% equity in the home. FHA recently made the requirement mandatory for the life of the loan.

The difference is worth noting. For instance, an FHA loan for $100,000 at a 30-year fixed rate of 4.4%, would incur nearly $30,000 in added costs with the 1.35% mandatory private insurance premium.

Agents said access to low down payment loans are crucial to a healthy real estate market because many first time buyers turn to these lower down payment loans to help them get into that starter home.