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Join Caleb Moore as he sits down with Jared Wood, President of First Security Bank, for an in-depth discussion on the banking industry, Federal Reserve policy, and what the new Fed Chair appointment means for business owners. They explore interest...
The Principled Entrepreneur is where real entrepreneurs share the principles, values, and grit that carried them through the toughest seasons to their greatest successes. Hosted by husband-and-wife team Caleb and Jodi Moore, we uncover authentic, relatable stories that prove you’re not stuck and you’re not alone. Whether you’re in a body shop, behind a desk, or chasing a dream, each episode will fuel your hope, strengthen your grit, and remind you to keep going — no matter what.
You are listening to the Principled Entrepreneur, where Caleb and Jody Moore explore the journeys of leaders and business owners and the principles that carry them through real challenge and success while unpacking the market trends and economic forces shaping today's world. Let's dive in. Jared Wood. Hey, thanks for joining us today, man. You bet. Thanks for having me. Proud to be here. I'm excited about this. We've been doing business for a long time and been friends for a long time and we've talked, I feel like once or twice a week we get together and on the phone and we just chit chat about what's happening, the banks, the market and all this other stuff. And I said, yep, I just got to have you come on the podcast so that we can have these conversations out in the open because they're so good, man. Yeah, I appreciate that. I'm excited to be here with you. So you've done a great job with the podcast. Well, we've had fun. Yeah, we've had fun with it. We've learned a lot. I've learned a ton. I'm going to learn some more today, I'm sure, from you, Jared. You are the president of First Security bank here in Russellville. Right. And how long you been there? So we started First Security here in Russellville. It was not been, well, nine years last month. So we've, yeah, been in the market nine years. And then of course, our team here, we've all been in banking in Russellville 30 plus years, all of us at different places and so got a really good, good team behind me. So. And First Security, I mean it's pretty big. It is a regional bank. How much statewide? So statewide, I think at the end of, and don't quote me down to the penny on it, but around 8.3 billion in total assets. Yeah, around 78, 88 locations. Yeah. Around the state. So fifth largest bank in the state. But yeah, yeah, I knew, I knew y' all were one of, one of the top, probably four or five in the states. And, and it just so happens that I'm, I'm advertising this today. Look, I've got. Hey, you can't beat that First Security water with me today. I'm not, I like it. I'm not trying to get any advertising bonuses or anything like that. I would never do that. Not at all. Okay. So, Jared, I want to talk to you today about several different things that we've been talking about. This is kind of a market update section that we, I'm going to start, start incorporating and the Big thing that's been on everybody's front of everybody's mind is the new Fed chair. Yeah. Okay, so that his name or his new. Appointed. He's going to be appointed Kevin Wash. Wash. Can't pronounce that. Right, right, right. But interesting guy. And all we've heard about Powell in the last months to year is he's got to go. He's not doing interest rates low enough, he's keeping it too high, all these things. And, and you know, for me and you, it's not, it's not about the politics of it, but this filters down into what you do and what I do in real estate. So. Absolutely. So really the discussion is, hey, this, this new Fed chair that's coming in potentially in May, probably longer. Let's kind of, let's kind of dissect that a little bit and say, all right, what do we know about him? Is this a good move for us as business people that are running, running big businesses, or is this kind of like we could be in for a struggle moving forward? So here's what I know about him. 2006 to 2011, he was a, he was a Fed governor. That's right. And there's only 12 of those, if I'm not mistaken. And so he was the youngest governor appointed in history at 35 years old. 35, I read that. 35 years old. What were you doing at 35 years old? I was in banking, I was in real estate, but I wasn't running, I wouldn't run the show. I wasn't a Fed governor at that for sure. So 35 years old, he's the Fed governor. And I think from everybody that I've read and or listened to, they seem pretty high on him as far as he's not too hawkish in getting interest rates down. But you would think that the President probably wouldn't appoint him unless there is some kind of indication that he is going to reduce interest rates. So from your perspective, how are you seeing this appointment and you think it's going to have an effect for us in a positive or negative way, moving down 20, 26. Yeah, yeah. Well, and so let me just be clear too. These are my personal opinions on this. Absolutely not. It's not coming from Social Security bank, but you know, I a little different approach too, I think. I've read his resume and I've heard his name before, but really didn't know him, but impressive resume. I mean, so in President Trump appointing him. So you know, obviously he thinks he's going to be Pro business. I would take that as a positive. Yeah. But two, you know, I think this is a big picture, but I think too, the Fed chair almost gets too much credit and too much blame. Okay. Because at the end of the day he's just one vote, you know, so it's not a dictator. So it's almost that, you know, I think that. And I'm not getting into whether pals done a good job or not does that. But yeah, he's had a lot of pressure. Sure. Coming to him. And it's almost, you know, he kind of. I can see the Fed chair sets the tone, I would think, for the other Fed governors. And depending on their relationships, I'm sure he will have a lot of influence. So I think that would be for me is the unknown is how does he. But he's been a Fed governor. So has he, you know, is that circle. I don't know how big that circle is. Like, know the folks on there now. Right. So will they accept him? I think that's almost the question is I'd love to see. And that's probably never, it's never going to be made public. But what do they think? Because if they're bringing in someone that, that they accept, I would think there's some, you know, they're going to work better and they're going to have. He's going to have more influence on them. But if, but if he's not well liked and with the current president, it seems like very controversial on a lot of things. So if people don't even try to get to know who it is or what the issue is, it's just if president's for it, we're against it, which is not right. You know, right or wrong. Yeah. So I think as a Fed Chair that sometimes we think they have way more power. What they have. Right. At the end of the day, they're one vote. Yeah, they're one vote. And they have. So you have 12 governors, but there's also presidents of these different regions. Of the regions. That's right. And then. And they have a vote as well. So it's not. Right, right, right. It. So there's actually broader than what even I thought. I thought, okay, well, it's just the governors. No, there's way more votes even in that. But what I've understood is that most of the time, whenever the Fed chair says, hey, we're moving in this direction, or I want to move in this direction and vote very rarely, very rarely, as a matter of fact, I don't know if they've ever voted against him in a direction they want to go, they've. I wouldn't say they're not unanimous because we've seen, oh yeah, people vote against it, but I would say majority of the time they're unanimous and. Or heavily one sided one way or the other. I would think so. Because they're supposed to be just looking at numbers. They are supposed to be independent. Yeah. And I think they need to stay independent. Absolutely. That needs to. There's no. Yeah, they need to. They just need to look at the data. Yeah. Make sure they're getting good information. Yeah. And make an educated decision. Yeah. You know, and so because the one thing that banks and Wall street and everyone else is the uncertainty is what kills things. People don't like uncertainty. Market doesn't like it jittery when they're not sure exactly what's going on. You know, and so they may, and it may not be the right. They may not be correct what they think, but if they can just kind of read the tea leaves and see that here's what we assume is going to happen or expectation is positive, then we're okay. But if it's that uncertainty is what I think that really hurts people. And there's an equation, and I cannot remember what the title of that equation is that the Fed looks at and they say, okay, we're going to put all this data into this equation and then it's going to pop out whatever we should be going in what direction. But I do remember that a third of this is based off of rents and rent incomes and how they are supposed to project going up or down in certain different areas. So they send out these surveys and so, so you would get a survey from the Fed, Federal Reserve and they would say, Jared, what is the value of your home? Fully furnished. Yeah. Okay. Now you're an educated guy, you could probably get pretty close to what that might be. But the average person has no idea what their house would rent for and would have no idea what it would be fully furnished. So they don't get very good data back, number one. Number two is because of that they have to look for another third party source to give them information. You know where they go and look on most of the stuff. Zillow, they go on. Know how accurate that. Oh, it's. Oh yeah. Oh my gosh, yes. You ever received one of the, the surveys? No, I haven't. I wonder, being in real estate, property management, you think that I, I'm guessing that they do probably bigger population areas Would be, would be my guess. But I couldn't believe when I heard that, like one third of this equation is made up of something that is totally fictitious. Yeah. That's like, what difference does that make? Right, Right. But. So I think they need to really relook at this equation that they're trying in the data that they're coming in because I think it's just off. I think, I don't think that should be part of the equation at all. But job reports came out today. Yeah. Positive. So that's going to be something for them to consider moving forward. And job reports is good. Had a pretty good spike, I think. 130,000 new jobs. Yeah, 130 plus. So that's, that was a big, that was a big spike. So we'll see if that positive trend continues. Yeah, yeah. But the markets are kind of fluctuate. One minute we're hitting record highs, next minute we're tanking. So I know it's all over the place. But, but the other thing too on this that nobody's really talking about is that the, this guy that Kevin was, he has to get confirmed by the Senate. And that's going to be tougher to do than I think a lot of people give credit for. Yes, the, the Senate's controlled by the Republicans, but even Senate, I think it was a Senator Tillis from North Carolina says he's not confirming anyone until the DOJ drops a lawsuit over the Fed, which I think. Okay, well, I mean, that's, that's his, that's his decision. But I mean, it's not going to be as easy as people think. And so people are thinking May 1st. That's when, that's when, that's when a new feature. Yeah, he gets done. But realistically, this is more like July, August, maybe even September. So my question to you is, okay, project forward for me, because all we hear about, you and me both, interest rates, that's all we hear about. So let's just talk about that. How does this affect interest rate and what do you project moving forward for the year as far as cuts in interest rates? Yeah, you know, I think. So the latest, and this may have changed since I've read anything about it, but the latest was they're still looking at at least two more cuts in 26. At least two. And I think that's probably already kind of figured in there. What are we at right now? So prime today is at six, seven, five. Six, seven, five. So two cuts would put you at six and a quarter. Be your prime and that's basically what your loans are priced off of, you know, either. So I would almost think even. And I think he's come out, the Mr. Warsh has come out and saying he's in favor of cuts right now. So. Yeah, I don't, I don't think, I think we're still going to see that. I don't think he's going to come in and rock the boat unless he gets some, some data changes, you know, and they have to change course. But I still think that we're going to, even with even a delay there, I think that's still going to happen. Yeah. And I think they know that, like I said earlier, uncertainty is bad. Yeah. So I think they're going to work hard not to have that prolonged. But you know, politics today, just like we said earlier, if the president's for it, seems like people are just automatically against it. So they're going to probably try to bring up some other demands and other things to try to get done when they think they have some leverage, which just drives more uncertainty into the market. And so everything could be at a standstill. That's right. As we move forward. So. That's right. Your guess as good as mine. That's exactly. We're all trying to figure this thing out together. So I think we're going to have some rate cuts. Is those, are those rate cuts? The question is, is, are those rate cuts enough to get people off the sideline? You know, I think it's, it's hard in, in the past. Okay. Just historically, if you, if rates on the commercial side, if you had rates in the fives, low fives, mid fives even really home loans, for that matter, that's a pretty fair rate. Yeah. That's not, you know, people kind of would say, okay, we're, that's good, we're going to move forward. That. But then during COVID and different when we had the, you know, we talked earlier about having the low rates, had the 3% and the, you know, just really unheard of. Right, right. That, you know, younger generations, that's all they really were exposed to. Yeah. So you talk to someone and it's an older person, older generation. Then you talk about having a 5% rate. They're like, that's a great rate. I can remember when we paid 12% for my first, you know, so it just depends on your perspective, who you talk to. Yeah. So. But I just over my career, it seems like it. That's kind of the sweet spot. Yeah. That is something there. So I Think if you get rates and we've already been able to see a little bit of the movement when people can kind of sense that the rates are coming down, I think that, that, that has already moved some folks to go ahead and if they may have a project on hold, they're going to move forward with it now. But I think if you see two more rate drops, and especially if you can. The fives. Yeah. And then just from a mass standpoint, cash flow. Standpoint. Cash flow. Right. I mean, that is going to make deals work that were not working a year ago or two years ago, you know, when you're talking about a 9% rate, as you, you will know. Yeah, absolutely. Yeah. You're not cash flowing. Cash flow. Yeah. Taxes and insurance and payments. Yeah. So I do think that, Yeah, I think if we can get a couple more drops, that's going to get people more, generate some more activity. I think so. And one of the messages out there that we're probably not going back to those 3%. Right. Yeah. I mean, if people can just, just, just believe us. Well, I mean, I don't know how many times I've had the conversation, like anytime you go up by 40% in a two year time span that it's unhealthy. Absolutely. And so I'm even going through that. I'm like, hey, listen, we're gonna live in the good times, but just know that the bad times are coming. Absolutely. You know, so you can't expect 40% appreciation. That's right. Every single time. And 2%'s great. I refinanced the 2%. I mean, a lot of people did, you know, and that's, that's okay. You should. Right. But what's killing us is that nobody wants to move. Right. Even though they need to. Right. Even though they're like, hey, we've got a growing family, we've got all this other stuff, but I got a 2 or 3% interest rate. I don't, I've heard it one time, I've heard it hundreds of times and I can't give up my. Right, yeah. So you can't get them to move. Trump's been trying to figure out how to get them motivated, you know, in different areas. But the one, you know, the, I think if America had a word for 2026, the word would be affordability. I mean, it's just, it's a hundred, it's 100%. What's affordable? Can we afford it? Can we afford it? And I think Trump's trying to figure out by throwing stuff on the wall and see if it sticks. Sure is. Are these things affordable? Will this help? Like the 40 or 50 year mortgage. Right. He threw that out real quick and I know the head of the FHA looked at it as well. The markets didn't react very well to it. So he kind of took it back, said, okay, we're not going to do that. The capping on the credit cards. Yeah. You know, trying to figure out where can we find avenues to make this thing more affordable for, for people. Because ultimately he, and he said it the other day, I don't want housing. I don't want the, your house to go down in appreciation, which I can respect. He's a real estate guy. He's a real estate guy. And that's not necessarily what we want, but we do want to make something more affordable for these home buyers when they first come in the market. Right, right. So how do we, how many times. Let me, let me just put to you this way. All right, I'm coming into, I'm coming into your office and we're going to sit down and we're going to talk about a loan that you're going to do for me, a commercial loan or whatever. Right. I'm going to try to do, try to do something. And as you look through my stuff, what are some of the things that you're going to look at that you say, you know, Caleb, this over here is a problem for us, or this over here is a problem for us, or did you look at it this way? So when people come to your desk, what are some of the things that you're seeing over and over and over again from, from your perspective that maybe buyers aren't understanding when they're going for a commercial loan or something? I mean, is it, is it debt, is it income, is it, you know, credit, credit reports? I mean, what's the thing that you're seeing over and over again that has been an issue. Yeah. You know, traditionally, you know, when you're looking at, when you're looking at credit, you know, you're, you're obviously looking at credit score and then the character of the person and then do they have the ability to pay? Because, you know, years ago you may have some bank, they were just collateral based lenders. You know, if you had the collateral, you had a house, it had tons of equity. We're making the loan, you know, it's not an issue. But that's really not, Banks kind of got away from that. And we're cash flow lenders, not Collateral lenders. So collateral is really the last thing we look at. You know, you got to, it's got to be there. You got to have. We got to be in a good position on the collateral. Yeah. But we're not looking at the collateral to pay it back. We don't want to take your house back. Right. And have to pay, you know, and sell it to get it back. So we want to make sure you got the income to pay for it. So, so that's, that's really the main thing. We don't see if it cash flows. So in that. That's different. Depends on the type of loan you're looking at. So on a commercial loan, you know, Sam, I'm a new startup. All right. So, yeah, I'm a, I'm a new startup business. I don't really have cash flow numbers to show you. I have a great idea. I have a great idea. I'm going to rent a place for a little bit, but I need some capital to get started with. So what, so what are you looking at to. To get those people going? And you know, here's the thing, and there needs to be some discussion on this. Those are the hardest loans to make. Okay. Yeah. By far. Yep. Because you're going off pro forma numbers, you know, because you're coming to me and, you know, it depends on, you know, I've known you a long time. So if you bring me numbers, I'm going to say those are, those are legit. Sure. But if it's someone that, that, I don't know. Person known for a long time that I'm still trying to get another person. Well, I'm looking at these numbers and, you know, we've got some pretty good experience depending on the industry. You know, we've got some peers, we probably bank some customers that are in that industry. So we would have an idea if the, if their pro forma looks like it's legit or you're. No, that's never. You're never going to get that, you know. Right. And so we can have some discussion around that. So when everyone gets comfortable that these numbers look real, then. Then you're saying, okay, how do we. Do you have any liquidity? Because at the end of the day, you know, when you do a startup, you know, we don't want to be 100% back in that business because the borrower has to have some skin in the game. And where does that come from? You know, and that's, that's the tricky part. So then do you bring in sba. Okay, got it. We've got a great SBA department that they could, they do a great job. And so those are the ones that true startup is really, unless you have some support from family, from other, other resources that you have to put up to give you that liquidity until the business starts rolling, it's really hard to do those types of loans without an SBA backing it. So because that SBA then kind of fills in some of that gap far as from, if you're, if you're lacking from a cash flow standpoint, you know, it'll fill in some of that gap there. But, but still, at the end of the day, you really have to have a plan is whether that person has saved six months of operating money or a year or they, they've had some plan, but just coming in, you have no money in the bank and you've got a great idea. Those are really hard for a bank to bank, if that makes sense. So I'm going to throw out some numbers your way and you tell me, you tell me, hey, Caleb, that's what I want you to do is tell me if that's Wall street or if that's Main Street. Okay, so this is stats from the US Small Business association reported record breaking 2025 guaranteeing $45 billion across 85,000 loans. Now on average, most of those loans were under 150,000. Okay, so big numbers. Record breaking numbers right here. Thanks for tuning in today. This episode of the Principled Entrepreneur is brought to you by Moore Co. Realtors. If you've listened to this show for any length of time, you know we care deeply about doing business the right way. That's exactly how we operate. At Moore Company, our agents are trained to help across the board, residential, commercial investment properties, land and farm anywhere in Arkansas with multiple offices and a team that understands the whole picture, we help our clients make confident decisions no matter where they're buying or selling. You may have 99 problems, but real estate won't be one of them when you work with more company realtors. So would you say that those small business loans that you were just talking about, are you seeing a lot of those in your sector just in general, or is this more of a big picture? Not necessarily. What we're not coming down the main street. Yeah, I would say those are big picture. Those are not Main Street. Okay. Sba. And we won't have to get real deep about this, but SBA for a long time, in my opinion, once again, this is my opinion, had a bad Reputation. Because you talk about sba. Wow, that's a lengthy process. It is a lengthy process. Yeah. I'm going to put you through the wringer, basically get an SBA loan. Right. And so I think for years it was almost lenders looked at it as a lender last resort. Like, we're going to try to do this traditionally, but if there's just no way to make it, we're going to call the SBA and say, hey, you think you can make this work? Yeah, well, so the attitudes changed on that, too. So, like, within our company, our SBA director, she's, she's awesome at what she does. And so we've kind of taken the approach too, is instead of making that as a last resort, like, let's just hope if it can work that way, great. If not, we've already tried everything we do. We try to bring her in on the front end and kind of look at it both ways, because she's also going to say, if it can go a traditional banking route, let's do that. Because it's, it's. There's some advantages to doing that. Right. So because you are going to pay as sba, you know, you are going to pay higher fees for that guarantee. There's going to be more cost involved with it. Right. So I would say SBA lending for us has picked up because we have more of a focus on it now. And we, and we do have someone that's direct, that's inside the bank, that's response, responsible for doing it. So I think our focus has picked up. So we have done more SBA loans in the last two to three years. Right. But overall, most of your banks, they really, they don't have a dedicated SBA lender. So if you don't have a dedicated person, just your traditional commercial lender, most of the time, they can have some knowledge about it, but they really are not, they're not a specialist in it. Right. And SBA is one of those things you have to be a specialist because there's so many, you know, nuances to it that, but it can provide that additional support that can get a deal off the ground. And we've had some great success, success stories in that. But I would say those stats are more big picture, big picture and not necessarily macro. Main Street, Russellville that we're seeing, and I'm not saying that may not be the case in Little Rock and some other places, but Main Street, Russellville, you know, we're, it's not, we're not overwhelmed with SBA requests? Yeah. You know, entrepreneurship has to be at forefront in everything that we do. Right. That's why the US Economy does as well as it does is because there's this entrepreneurial spirit that runs down the center of us. Absolutely. And I'm encouraged to see that these numbers are so good. I wish that it was simpler for Main street to get a hold of some of those dollars. I understand in part why it is a little bit difficult. But if we don't have that entrepreneurial spirit, then we're always going to export everything that we do, which is what this has been a huge debate recently. Right. What are we exporting? All our manufacturing. We're doing all this. Why? Because, well, affordability, which we've talked about. And then simply, we don't have that same spirit in some of the generational people that are coming in behind us. They don't have that same entrepreneurial spirit. And so it. Because it's hard. This thing's hard, man. Running a business, running a company, there's sacrifices you gotta make. And so I think though, it's if we can make it easier to access some money and granted there's risk, I mean, hey, you've got to be smart in lending money. Don't get me wrong. I mean, we went through 0809. We understand don't do too risky stuff. But I think if we're going to pick up the economy, it's got to be on the backbone of small business entrepreneurs growing this to a bigger thing. Now, the thing that gets me is in the conversation with Andy McNeil is, is that we have less. So if you look at the 1990s, and I forget these stats, Tal, you may have to pull up stats for me here, but in 1990s, we had more businesses globally, like for nationally, for the America than we do today. Far as like publicly traded companies. Publicly traded companies. Oh, yeah, that's, you know, it's been tanking. Yeah, absolutely. Right. So because. Just because it's so hard, regulations are harder. Everything. So. So then we have these conversations like, okay, what we're doing is just one buys another, buys another buys another. We don't have the startups coming in behind it. Which makes this number say, hey, if we don't have something starting behind it right then are we just going to eat each other into this one great big Monopoly game that we're doing? Which we. It's not good. And we've done that before as a country. If you go back to the early 1900s, what did we have? We had Huge monopolies. We had Carnegie, we had steel, we had the trains with Union Pacific, we had all of these huge. And they even tried to monopolize. And Teddy Roosevelt gets in there and says, wait, guys, you're not doing this. Now here's another billionaire. Oh, yeah. Basically at the time saying, hey, we're not going to do this. But anyways, we gotta be careful about making sure that we're giving the small businesses and the small entrepreneurs a chance to bring this because that's the next guys up. That's the next generation up. Yeah. Yeah. And to be honest with you, you know, when we're bankers, to be honest with you, that's one of my favorite loans. And I could tell you story, you know, if it wasn't privacy, I could tell you, hey, let me tell you about this. This is the coolest thing. Someone came in, had an idea or was in a company, I want to go out on my own and do this. And we were able to walk with them. And it's just the pride that they have in that when they. Because they, they put a tremendous amount of work. Yeah. And so to be able to do those loans and see the customer grow. Yeah. I could tell you some stories that it didn't work the other way, you know, so it's not all 100% successful. Absolutely. But. But those to me is the best. Yeah. Stories. It's when they, you know, it's just awesome to see that 100. I love working on. I do. I love being able to. And I've done it a couple times with people that are just the same story that you had. Now, here's the other problem that we have. We have a problem with new construction, the lack of new construction. Right. We have very little contractors building new subdivisions, building new houses, even multifamily stuff. Most of it's not new. Most of it is just older stuff that's coming that's outdated. And anyways, it's a mess. So I heard a stat the other day, 60% of builders, 60% are now these huge contracting companies. Builder companies like Lennar. Lennar. Okay. So, yeah, the rush. Coleman. So like Lennar. Okay, so 60% of that. Right. Are your contractors now? Right. Okay. Well, back in the early 2000s, they were only 20%. 10 to 20%. Now they're 60%. Okay. So it just goes along with what we're talking about. Right. So these builders are sitting on about. And I think. I think the number was 3 million empty lots across the country. So they got the subdivision, they got the land. They're not building on it. How do we incentivize builders to build? I think that's. If we can. If we can figure that answer out, which I know. Yeah, it's gonna be above my pay rate. But, I mean, this is the problem. Sure. Yeah. We need more housing. I need more houses to sell. People need more housing to. To get into. They can't afford it. So how do you. Is there a way that you think that, hey, could we do this maybe to get contractors or. And are you getting questions asked about new construction? You know that I was thinking back when. Right. When you started. That early in my career, we had, you know, I had several builders that were clients, and we had spec houses going all the time. And typically, depending on who they were, we'd have two at a time or we'd have four at a time. And it was. It was constant. I mean, I would do, you know, spec loans all the time. One would pay off. We've got another one coming, you know. Well, that has. I mean, if you just look across Russellville, there's just. There's not many people that are. That are. That are true spec builders, you know, that that's what they're doing now. They'll do some other stuff, but. But I think just the affordability piece of it. When you talk about developing a subdivision, what goes into. And you know it very well. What goes into buying the dirt. Yeah. And then having to put it in the way that the cities would require it. Is it regulation? Regulate the cost of it, too? I think. And then. And then just everything else in the construction industry, as far as just your labor, insurance, all that has just went up so much. Yeah. That you're holding costs. You're holding costs. So to get a lot that's affordable. Yeah. It's hard because used to, you know, your lots were 10,000, 15,000. Yeah. Well, now there's just no possible way you could go buy a track of dirt that was in an area that you'd want to put a subdivision in and develop it for that. Yeah. So I think. I think that is part of it. And I don't know what the answer is that, too. You know, I've read some stories in other states where there's been some public private partnerships on that, where, you know, the city would put out some incentives. Right. Or the state to develop a subdivision, you know, and give that infrastructure to the builder. That would make it affordable then. So I think that. I think there's got to be some kind of combination. There yeah. Between public and private to help spur some of that. And then from a tax standpoint, you know, I think too. Yeah. If there was some ways to incentivize on the capital gains like we were talking earlier, I think that is something that would, would. Well, if you're talking. So if you're, if I'm the contractor and I like man, all those costs that you just mentioned. Right. 100% accurate. I've just got way too much into this. And so what's my margin? Oh yeah. And my margin may be 5 to 10% maybe. Right. Maybe right. So if my margins are that tight and then I got to take that margin and say I'm going to get hit with a 20% capital gains tax after that. It's kind of like, well, what's worth it? It takes me six months to build the spec house. Right. For the risk of what? That's right. Yeah. So my thought is, and I talked to Congressman Hearn about this a little bit of saying, hey, can we could. What if we say the capital gains tax about 20%. Right. Depending on the tax bracket. But let's just say 20%. Say we knocked it down to 10% for any new construction that was happening for a thousand square foot house and you had to offer it to a first time homebuyer first. Okay. Now what does that do to the spread? Well, it allows the spread you, allows your purchase price to be less. It allows the first time homebuyer not to have the competition with other investors or other place. So it keeps the, keeps the competition down. So these first time home buyers can then come in there. What do you think would happen to that market? You're probably going to get a lot more phone calls about. That's right. About new construction. Absolutely. And I'm going to get enough bunch of new phone calls of people saying hey, I've been on the sideline, I can handle the 5 and a half or 6% interest rate. I can do that. But now I don't, I, now I've got something new to buy because people don't want to move into something with the project right now I can just. I was telling you that's the way the, the new group moving in. Absolutely. But the average age, Jared, of a new home buyer is about 38 or 39 years old. That's really increased. Yeah, right. I mean. Oh yeah. I mean I don't know when you, how old you were, but I was, I was in my mid-20s. Yeah, mid-20s, something like that. Yeah. So burst out. That's what me and you both were. That day's come and gone. They were not seeing that anymore. Why? Because of affordability, but also because anything that you can buy, they're not capable to go in there and spend the extra money to fix it up. So the new construction looks really good for them, but there's no new construction out there. Absolutely. So it's this really interesting paradigm that we're in to try to figure this thing out. And I think there's some answers there. I'm not just. But I'm not seeing it being really. I'm not seeing the government, either state or federal, being super aggressive about trying to figure this out. They keep talking about it. We got to figure this housing thing out. We got to figure this housing thing out. But they always throw something out, and then they come back. They throw something out, and then they get off of it. And I'm like, well, in the meantime, what does that do? And what you said earlier, it's saying, well, there's inconsistency and uncertainty in the market. So what happens? I'm just gonna wait. I'm just gonna wait. That's right. I'm just gonna wait. Yeah. Yeah. So really, it's not helping any of that. It's actually hurting for sure for the. On new construction side and in other areas as well. What would you. Let me throw something back at you. What would you say a starter home price would be in Russellville now? Oh, that's. Is that. Well, you're talking about just like new construction. New construction. What would they. I mean, it's like it. Would it be in the 175. 175 a foot. Probably. Maybe. Maybe a little bit more. So depending on the size of that, you're going to be in the mid twos or even low three hundreds. So just think about that. That's another problem is the wages to support. Yeah. To be able to qualify for that. Because when we first bought our first house. Yeah. I mean. Yeah. I mean, it was in it. It was less. My first house would be less than new trucks today. I mean, so no kidding. You know, so you could do that. But now when you're talking. So it's going. Not only if you had those available, that price. I mean, it's. It's just harder. It's harder for that. The younger generation to have the income to support to buy that. If you're talking about a starter home. Which still blows my mind to think a starter home. I know would be that. I know I rem. When it When. When prices started going up and we got into, like, the 130s, 135s and I thought, there's no way. New construction at 130, 135. No way. They were selling spec houses at $100 a foot. 107. 107 dollars a foot. Out in Shallow Manor. When, you know, back in 2017, 2018, whatever. Yeah. Nowadays, I mean, that's just. Just a used house. It's unheard of. Is 153 a foot. Yeah. I can remember for years we were less than a hundred dollars. And then when I would remember hearing stories, well, Conway went over there, $100 square foot. Square foot, you know, and then now we just flew past that. Yeah. So. Yeah. So give me. Give me the. The biggest reasons people are getting denied right now, denied loans right now, you know, it comes back to liquidity. Liquidity that's having the cash to withstand the uncertainty. If we want to keep using the word uncertainty to withstand the uncertainty, the unknown. That even. And that doesn't necessarily come just from the entrepreneur starting a business. That's from someone that's buying rental property. Right. Or buying a commercial building that, you know, the way all those costs are, you know, are increasing, you know, or you lose a tenant. Can you withstand? Because, you know, there's some folks that you'd have. You can't go. They couldn't go three months without a tenant. Right. Or they're going to be in trouble. Yeah. So I would say for. And you know, I'm not saying we're the. The most conservative, but me personally, I'm pretty conservative, that I want to see that there's a backstop there, that you've got some liquidity. Because I'm doing you a disservice, too. If I just get you into this and I can just get you in it and you can make it, as long as everything is perfect. Right. Then you're going to come back to me and say, hey, why did you do this? And so I think that's part of our philosophy, is that we're always going to be transparent, honest, and say, hey, this is what we're seeing. You just really. You don't have the liquidity to do this. So you've got to have some. You've got to have a backstop there where whatever that looks like, that could be, like I said earlier, family friend, whatever it could be. But. Right. You've got to have a plan B to be able to withstand some of this that's coming in the. In the market. And I don't think we're out of the. I think 20, 26. We're still going to see some things that is going to make it hard. If you, if you just. You're operating with no backstop, no liquidity, it's going to be hard. Yeah. No. And then you got cash is king. Yeah. So if you've been able to be disciplined and save, then I think also there's some opportunities. Yeah. Could be some buying opportunities, too, but I think you've got to have that discipline. Well, that's what I was telling Jody this week, because we were. I was kind of giving her the forecast for us, and what are we doing? I said. I said I'm going to get more liquid because I think there could be some stuff that's going to be coming in the near future. I'm not talking like 0809. I'm not talking about that, but I'm thinking, thinking if you've been wise with your, with your money and you get. You get liquid, you can. You have that liquidity. There is opportunities, I think, in 20, 26 and 7 that you could have if you're. If you're ready to go. Restaurant if you're ready. If you're ready to go. So do. Do your homework ahead of time. Be on, go have it. Have the liquidity. And I think these. There's going to be several investment opportunities for people to get to this. You know, the stocks. I mean, it's just crazy right now. But in real estate, here's the thing, for the most part. And then we had a. We just talked about a 40% appreciation, but for the most part, it's a steady. It's steady as you go. Right. It's not. It doesn't have the, the high mountains or the low valley, especially for us here. Yeah, especially, I want to say, Arkansas in general. There's some markets. There's some markets. Yeah. I mean, northwest Arkansas is on a whole nother. Absolutely whole nother level, but. Yeah, yeah. I mean, it's. It's so I. Telling Jody a second, let's just. Let's just hold what we got and see and see what happens. You know, there's no, no rush to it. That's wise. And so next. Next thing, I got kind of hitting. Hitting these high marks real quick. What should people pay attention to instead of rates now? I know. Take liquidity out of it. What should people pay attention to instead of rates and liquidity and all this other stuff? Like what's, what are we missing let's say, are we missing? Because what I hear a lot of Jared is okay, does it cash flow. But people don't understand what that is. They don't. They, they say that as a catchphrase. Right. But the way that you look at cash flow is different than the way that maybe somebody else looks at cash flow. Right. So let me kind of answer the question and then get you there. I think cash flow is part of this. As investors, we don't do a very good job of, of looking through the lens of what real cash flow is. So what does real cash flow look to a lender when you, when I, when I pop it in front of you. You know, so I'm going to answer this different way. So cash flow could be different. Okay. So every borrower could look a little different. Yeah. So traditional cash flow, if you want, is just, you want to bring in a project and project needs to stand on its own. Yeah. So if it's a, if it's a commercial property, you need to have enough income that's coming in that supports if you've got a loan, loan payment, taxes, insurance, and if some vacancy in there. Yeah. And at the end of that, the bottom of the page, it should still be positive. Okay. That's just cash flow. Right. Now some people to cash flow, their philosophy is a little different. So if you're a person that's being disciplined and you're investing in real estate and you know, hey, I'm not lit, I'm not trying to pull out a real estate right now. I'm doing it for 20 years down the road. Yeah. And I've got X number of properties. I'm okay, I may want to buy, I may pay a little more for this property and it may not cash flow to where the bank wants to see it per project, but you've got nine other properties that can help support it from a global standpoint. Right. So we look at it globally too, because everybody's, everybody's investing philosophy is a little different in my opinion. Sure. You know, depends on what you're, where you're at in life. Real estate especially, you know, if you're not trying to live out of it and it's long term, then you might, because it could be an opportunity that, hey, this is a property that I want. It's not come for sale, but I'm going to take it. Now, it's not the best deal, but over time it could turn into a good deal. Yeah. So cash flow to me is different for each individual, but from a Bank standpoint, we need to see that it's. It's going to cash flow, you know, one to one. But we look at a 120. So it's going to cover it more than just a break even. But if you've got. So it's hard to say. So if you've got other resources and other income that could come in and take care of that shortfall a little bit. Yeah. Then it could still work. Yeah. So does that make sense? It's not really. Depends on the situation. It all looks a little different. Look at, look at the whole. Not just the global picture of it, not just the one I got you. So we talked about this a little bit earlier and we don't have to use specifics, you know, in, in this question, but big picture here. I think what we've. One of the principles that we've brought out here is there's a Wall street mentality that a lot of people see on the news, and that doesn't always translate down to Main Street. And I go back to what is the life expectancy of community banking? Because the lifeblood of community for businesses. Let me say that for businesses is being able to go to the guy that they know and say, hey, listen, things are tights. I need to get line of credits to extend some things or I need to scale my business and I need to do this. But it seems to be getting harder and harder to do in a global setting. I mean, we're lucky here in Russell, but I'm talking about. But community banking, Jared, is so important. And I think we're losing that identity as a country because we feel. I feels like it's just the big guys. Big guys. Big guys. Big guys. Even we talked about the contractors. Lennar is the big guys eating up the little guys. They bought another company, Arkansas company. Yeah. That was building spec houses. So our banks doing the same thing. And what's. What's going to happen to the, to the little guys that need to go down and get a loan from the community bank? Are they there anymore? Yeah, I think so. So when you say community bank, you know, I think when you say I'm a community bank, I think that has got that just that terminology has kind of got caught up as in a. Is a nice little marketing tool. Yeah, we're a community bank. Yeah. Y' all hear that? I'll hear that from some banks that are not headquartered in Arkansas. Right, right. That are, you know, multi. 100 billion plus, 2, 50 billion plus banks. Right. Or community bank, you know, it's really hard to be a community bank if there's no one in the market that can make a decision. So I think your community banks and too. So you've got. We've got some really good community banks in our town. Like you said, we're lucky. We're lucky to have some good community banks. From a competitor standpoint, I don't like that. But from a. But from the community, it's good. We've got some really good bankers here. Yeah. But one thing too, I think if you're a true community bank and you're also. So if. Caleb, I'm known a long time. So if I'm not just your bank in the good times. Right. Okay. If you run through. If you get into a tight spot, then our philosophy of our bank. I'm just speaking for us as a community bank. We're still going to be there with you. The larger institution that you're talking about. It's really not. It's. What have you done for me today? I mean it's. It's. You're. You're cut loose. So the, the true community banks, they're there to help support that entrepreneur at the beginning, at the end, but in the middle if there's some tough times and you don't turn your back on that person and that's what a true community bank does. But if, if the regulators will allow that to continue to happen, I think that's what you're seeing. I think you're seeing in some of the really small banks with today's. With the technology expense, cybersecurity. As you know, fraud is huge in the. Even the regulatory. The compliance piece of it is a. Is a burden. So I think that if you do see some consolidation, that's kind of the cause of it. Yeah. Is just that is that piece of it. It just makes it hard. I can imagine. You know, but. But I think you're, you know, the. Just the community. There's always going to be a niche. Especially in Arkansas now. I don't know. You know, if you get into some of the other states, I could see where that may not be as big a deal because in those large towns you may not know. You know, we go to church with our customers. We see them at the ball fields. We see them hunting, playing golf. You know, so you've got that relationship piece that I'm not sure that equates in New York or in California. I know they're there. But it's not your true community banks that we have here. Yeah. So I think that. You know what. And I'm just going to speak from Caleb. Right? Yeah, I'm just going to speak for me. Yeah. What. And this has nothing to do with. What I'm about to say is this does not include first security in this. And I'm not talking about any bank specifically, but what banks need are deposits. Right? That's right. That need deposits. And what irritates me is that a lot of these banks get a lot of deposit money. That's right. And that's what they turn around and make loans off of. That's right. And so these communities are then empowering these banks to make loans, and that's how they grow and they gear. But they're not making loans here. They're making loans in New York, they're making loans in Florida, they're making loans in other states, but they're not making loans where the deposit money is actually bolstering. That's right. Their profit share. That's right. And that's what irritates me as I'm looking at this from a consumer point of view. Right. And. And again, that. Me, me and you, I come to you all the time that it has nothing to do with you, but I'm just talking about in the big picture. That's right. Community bank. If you're gonna. If the community is going to support the bank, the bank should support the community and the small businesses by pumping money back into it to bolster the economy. Because then we all win at that point. It's not about Wall street or New York or Florida or wherever it is. It's about Main street growing. And here I'll give you an example. This is a big global example, okay? And I wasn't planning on doing this today, but so after World War II, Japan's in ruins. They're just obviously, right. They had two nuclear bombs hit them and they've lost the war, right? So they're in. They're in ruins. But if you look from the 1940s to the 1950s, their economy took off, okay? And even going into the 60s and the 70s, I mean, Japan never really had. I mean, obviously in the 40s, but. But it really took off, right? And so China is sitting there saying, wait a minute, how in the world is Japan after recovering? We are not even in the war. And so the leaders. The leader of Japan, I cannot remember his name, goes to basically the biggest rival that he has in Japan and says, how are you doing this? Of course China's communist, right? So they have a central bank Right. Just one central bank. And Japan says. The guy Japan says, hey, you're doing this all wrong. He says, we have banks everywhere. We loan money everywhere. We're feeding the businesses because we know those businesses are going to build. And we're taking the risk in taking the little capital that we have and investing it into Main Street. And Main street is feeding this incredible industrial revolution in Japan, which is still there today. You know, they bred that out of World War II and said, We've got to rebuild this thing. And they did it because they took all these different banks and started to expand all across Japan. China then takes that blueprint and does the same exact thing. Jared. So the idea is not less banking. The idea is more banking to allow more opportunity for these small businesses people to come up and then to grow the economy an organic way, which is what we are founded on as a country. And so the blueprints there. But again, I go back to. I feel like we're missing. We're missing the points. We're missing the mark on all this. And if we don't do something sooner rather than later, we're going to look back on this and say, I told you so and I don't want to get there. You know, nobody wants us to get there. But I just. There's a lot of things that we can do, but we're obviously, we're not capable of doing it. But me and you can see the problems. We don't always have the solutions, but we can see the problems. And I just hope that everybody else is seeing that the problems are out there as well. That's true. That's true. So, hey, anything else for we get out of here that you're like, hey, we, we missed this. We need to talk about that or something. Well, the only you we had talked about, I think it's an interesting stat, talking about it. Just Pope County. Yeah. You know, the activity that we have in Polk County. Sure. From a lending standpoint and mortgage filings. And that's something that, you know, most people probably don't track that, you know, and look at it, the general public. But Justin Price in our office does a great job, but he tracks this each month as far as mortgage filings in Pope County. And so in 20. Well, in 24, there was a little over 1500 mortgages filed. Yeah. $322 million amount. So in 22 million in real estate mortgages filed just in Polk County. And that was for all of 2025. All of 20. 24. 2024. So fast. Forward to 25. Yeah. And there's about a little over 1700 mortgages and around 411 million. Okay, so it was a nice increase. Yeah, 89, $90 million increase in mortgages filed in Polk County. Yeah. So I think sometimes people think, you know, if you think about that's a pretty big number. You're closing in on a half a billion. Yeah, you know, that's true. You know, so that's, that's a lot of activity and some of that could be refi. But some of that is, is new. So I think that's a pretty interesting stat. And one of the other thing that we're following is a lot of the non banks that's not headquartered in, in Russellville or even in Arkansas. You're, you know, rocket mortgages and different people like that. The percentage that they're doing here is growing each year. So as of last year, it was 40, like 47% of the mortgages filed was filed by non bank lenders or banks that are not physically located in Russellville. It could be a bank in Little Rock that does a mortgage here. But that's an interesting, that is interesting. Just in 2022, Justin was telling me it was in the 30s. So we've seen that just consistently climb. So that's an interesting stat to kind of watch to see how that with all technology and the Internet banking and Internet, all the advertising going on that people are, you know, and I don't know, coming from some newer generation, I don't know where that's coming from. Do you attribute that to the rise, the appreciation rise just in cost in general? So that, Absolutely. So that. So that number's going up because of just the overall markets going up or is that some new entrepreneurial business or just new people coming in the market? That's it. I think it's a combination. Combination. I think you're seeing that. Yeah, absolutely. A combination of both of those. Which is, it's, it's. That's good. I mean, that's good. Yeah. I mean, I think it goes to some of the other numbers we talked about small business loans that we're doing. So that's, I mean, that's good. I mean that's, that's a, that's encouraging. Yeah. Okay, last thing before I get out of here, I always ask the one question and I never tell, I never tell the guests before. Here we go. Oh, yeah, give me a book. Give me two. Give me three. Jared Wood says, you got to read these. They changed my perspective. They changed my life. What, what is. Give me. Give me some books. Yeah. I've read. Let's see. So trying to think currently or the two in the past. So I do. I do enjoy reading the one book that. And I'm. I'm kind of. I just kind of gravitate to the, to the Navy SEALs. I can never be a Navy SEAL, but I just think that they're so impressive. So there's a book called Extreme Ownership. Yeah. Jocko. No, I've got it in my office. I have it. Oh, my gosh. That book to me is so. I mean, it's such an interesting book, but it also gives you so many principles of leading and what that looks like. How looks. You know, leadership looks. Yeah. So that book really changed kind of how to that I look at leadership. Yeah. And the team as the idea of leading up and down. That book. That really stood out to me. Absolutely. Yeah. Yeah. And a lot of people forget that piece. It goes both ways. It goes both ways. And most of them are like, well, the boss didn't tell me. Wait, wait, wait. Exactly. How about you tell the boss. Exactly. And then the boss will understand more after you tell him where there's a gap, then he can just assess a hundred different things at once. People don't understand. And if you're a true leader, you welcome that. You want that. Yeah. You know, and you're able so that. I love that book. Trying to think of another one. It's kind of a lighter book, but Bob. Bob Golf. Have you ever heard of any Bob Golf book? He wrote a book. Several, but Undistracted was one of them. And it just kind of talks about. It kind of gets more into faith based, but it talks more about how, you know, how chaotic the world is now. And if you're not really grounded in your faith and you're. You're trying to get your priorities in line. Yeah. Man. You can get distracted real quick. Yeah. Go down a different road that you don't need to go down. So. Absolutely. Those are two. Or the two that I've read recently that stand out. I've got one. I just got order. Got it in. It's an old book and you may have read it. The Ruthless Elimination of Hurry, if you've heard of that. No, it sounds like a good one. Yeah. The elimination. So I don't know, I'm seeing what. That's kind of more along those lines of just that. I don't know why I'm gravitating to those two. Just the ones that are like, try to help me stay grounded and hey, you know, to not just get caught up in all the chaotic, you know, the. I've. I'm big on history books. Like, I love. I love reading about just history. But one of the things that I've. I've found, like, you look for patterns. One of the things that. What happens when you read a bunch and you probably experience this, it's like it connects dots in your brain that you didn't know were necessarily there. So I'm reading something about history has nothing to do with real estate. And all of a sudden, there's a bridge between the two that say, well, that happened all those years ago, but I can make that relevant today. And this is how. And now all of a sudden, you have a paradigm shift because of something that you read. That's right. Right. That's right. And one of the things that I've notice and over all these guys that I read, you know what they. One of the huge traits that they have. What's that? They. They are reading. They read everything. Yeah, yeah. Whether it's Teddy Roosevelt, whether it's Winston Churchill, whoever it is, they consume information. And so that's the reason I asked that question is because what you're consuming is this is what. Is how you're going to lead. It's how you're going to do these things. So it's always good to kind of get a perspective of who's reading what. Right. You know? Yeah. Jared, thank you for coming on, man. This is fun. Absolutely. Thanks for having me. I really enjoyed it. This is fun. We don't have all the answers. We didn't come up. We didn't. We didn't fix the world's problems. Now, if you're looking at me for all the answers, you're in a bad, bad place. Well, me either, but I think it's fun to talk about them and hopefully, hopefully, you know, we have this conversation in a couple of months. We're looking in a better position on some of these things. There is. There is hope. That's right. There is hope. We want to end on a positive note. I think. I think this year looks to be a positive direction. Yes. There's some things that we're going to have to overcome, but that's with every. Every. Every day, every month, every year, there is something. If you didn't have things. No challenges. No challenges. It would be. It would be really boring. So we got plenty of challenges ahead of us, but we got a lot of hope on the horizon, too. So. Jared, thanks. For joining us today, man. Appreciate you. You bet. Thank you. Yeah, you could be the greatest. You can be the best. You can be the King Kong banging on your chest. You could beat the world. You could beat the wall. You can talk to God, go banging on his door. You can throw your hands up. You can beat the clock. I'm Jody Moore with Moore Co. Realtors. And welcome to the Real Estate hall of Fame.