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Coronavirus Aid, Relief and Economic Security (CARES) Act Summary

On March 27th, President Trump signed the $2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES Act) into law.  The 880-page CARES Act includes multiple provisions that will impact Argent clients.

Some highlights include:

Income Tax Filing Date Extended

Note: this is not actually part of the CARES Act, but rather a provision announced by the Treasury Department prior to passage of the CARES Act.

  1. The tax return filing deadline for federal returns previously due on April 15, 2020 is extended to July 15, 2020.
  2. First quarter estimated tax payments are now due July 15, 2020, as well; however, second quarter estimated tax payments are due on June 15, 2020 (subject to change).
  3. For individual taxpayers whose tax liability is under $1 million, deferral of payment of 2019 income tax is permitted, interest and penalty free, if paid by July 15, 2020.

Recovery Rebates for Individuals

  1. Many Americans will receive direct payments of $1,200, or $2,400 for joint filers, plus $500 for each qualifying child.
  2. The rebate amount is reduced by $5 for each $100 that a taxpayer’s income exceeds $75,000 for individuals and $150,000 for joint filers. The rebate is entirely phased out when adjusted gross income exceeds:
    • Joint Filers – $198,000
    • Head of Household – $136,500
    • Individual – $99k
  3. Adjusted gross income will be determined by 2019 tax filings (or 2018, if 2019 tax filings have not been completed). In general, a qualifying dependent child is one who is under the age of 17 at the end of the tax year.
  4. No action on the part of the rebate recipient is required. A notice from the IRS will be sent to the rebate recipient 15 days after delivery of payment stating the location of payment made and amount.
  5. Recovery rebates will not be taxed.

Retirement Account Contributions and Distributions

  1. The deadline for 2019 contributions to traditional and Roth IRAs is extended to July 15, 2020, mirroring the tax return filing deadline
    1. This gives clients more time to decide whether to contribute for 2019
    2. This also applies to 2019 Health Savings Account, Archer Medical Savings Account, and Coverdell Education Savings Account (ESA) contributions.
  2. No RMDs (Required Minimum Distributions) for 2020.
    1. This applies to IRAs and company-sponsored retirement plans
    2. This also applies for IRA and Roth IRA beneficiaries
    3. This applies for owners who turned 70 ½ in 2019 and would otherwise have been required to take their first RMD by April 1, 2020
    4. Beneficiaries who inherited an IRA from 2015 to 2020 and who are subject to the 5-year payout rule (generally, non-designated beneficiaries who inherited before the deceased IRA owner reached his required beginning date) now have an extra year to fully withdraw the balance
    5. The Act does not address “undoing” 2019 and 2020 RMDs already taken – we are awaiting IRS guidance
  3. The 10% early withdrawal penalty is waived for coronavirus-related distributions taken in 2020 up to $100,000 per individual across all company-sponsored plans and IRAs.
    1. A “coronavirus related distribution” is permissible if an individual has incurred:
      1. A diagnosis of COVID-19;
      2. A spouse or dependent has been diagnosed with COVID-19; or
      3. Adverse financial consequences due to being furloughed, quarantined, laid off, incurred reduced hours, unable to work due to childcare issues related to the coronavirus, closing or reducing hours of the a business owned or operated by the person, or other factors as determined by the Treasury Secretary.
    2. Distributions are still taxable, but the tax may be spread evenly over the next three years.
    3. Alternately, the taxpayer has three years to roll the funds back into the plan.
  4. Maximum loan amounts from company-sponsored retirement plans are increased from $50,000 to the lesser of $100,000 or the full account balance for individuals who have been impacted by the coronavirus (using the same definition as outlined above for “coronavirus related distribution”).
    1. Loan repayments scheduled from 03/27/2020 through 12/31/2020 may be suspended for one year.

Charitable Contributions

  1. Charitable contributions for clients who itemize are eligible up to 100% of AGI for 2020 (up from 60%) with a 5-year carryforward of excess amounts. (This does not include donations to Private Foundations and Donor Advised Funds.)
  2. In addition, clients who take the standard deduction may receive an above-the-line deduction of up to $300 for charitable contributions.

Student Loan Payments

  1. Payments on federal student loans are suspended until September 30, 2020.
  2. During this suspension period, interest will not accrue and suspended months count toward loan forgiveness programs.
  3. Students who were forced to withdraw from school due to coronavirus will not be required to return portions of grants or loan assistance. Certain students may also be eligible for emergency financial aid up to the Federal Pell Grant maximum for the year.
  4. For 2020 only, the CARES Act provides an income tax exclusion for individuals who receive student loan repayment assistance from their employer. The maximum amount that can be excluded is $5,250.

Full text of the Act can be found here:

(updated March 31, 2020)

Investment Commentary: Q1-2020

Director of Investments – Argent Trust Company  |  615.385.2720

We are all now living through a period in history none of us will ever forget. The impact on our families, communities, and country has been profound. And it continues. There remains great uncertainty, worry, and fear about the coronavirus and its impact: how widely it will spread, how fatal it may be, how long it will last. When will we see signs of stabilization in its spread and a decline in daily new cases? When will we “flatten the curve”?

While several weeks ago we had reason for cautious optimism that the virus might be largely contained to China, it is now obvious that is not the case. The United States and world are now facing a health crisis and an economic crisis. Both need to be fought with massive government policy responses and individual behavioral changes.

We’ve frequently said that recessions and bear markets are inevitable phases within recurring economic and financial market cycles and that investors need to be prepared for them to happen, but that their precise timing is consistently unpredictable. We’ve also said there is always the risk of an unexpected “external shock” to the markets and economy (e.g. a geopolitical conflict or natural disaster).

It’s one thing to say it and another to actually live it. And still another when the precipitating event or catalyst for the recessionary bear market is something none of us have experienced before: a global pandemic, which has instigated an extreme societal response—including the indefinite closure of schools and non-essential businesses, stay-at-home orders, quarantines, lockdowns, and social distancing—and has potentially overwhelmed medical facilities, personnel, and supplies.

We will get through this crisis, period. Things will improve and recover. This too shall pass.

In the meantime, events are moving very rapidly, policy responses are in flux, and markets are extremely volatile. This commentary reflects the facts, circumstances, and our thinking as of March 26, 2020.

We sincerely hope you and yours are able to remain healthy and manage well through this challenging period.

First Quarter Market Update

The first quarter of 2020 has been an unprecedented period in U.S. financial market history across numerous dimensions:

  • The U.S. stock market fell into a 20% bear market in the shortest time ever—just 22 days—and continued further, dropping 30% in a record 30 days. The typical historical bear market peak-to-trough decline has taken around 12 to 18 months.
  • Short-term expectations of stock market volatility, as measured by the VIX index—often referred to as the market’s “fear index”—closed at an all-time high in its 30-year history on March 16. And the market’s actual realized volatility has only been higher in October 1987 (Black Monday) and the late 1920s.
  • The 10-year and 30-year Treasury bond yields fell to all-time lows of 0.54% and 0.99%, respectively, on March 9.
  • Oil prices had their biggest one-day drop since the 1991 Gulf War, plunging 25% on March 9, triggered by a price war between Saudi Arabia and Russia.

Note, all returns in this commentary are as of the market close on March 26.

Year to date, larger-cap U.S. stocks have fallen 23%. Growth stocks have continued to hugely outperform Value: the Russell 3000 Growth Index has fallen 18%, while the Russell 1000 Value Index has fallen 30%. Smaller-cap U.S. stocks have done even worse, falling 33%.

Developed international stocks and emerging-market stocks have dropped 25%. Much of the differential between U.S. and foreign stock market returns has been due to the appreciation of the U.S. dollar.

In the fixed-income markets, core bonds have gained 1.1%, once again providing their key role as portfolio ballast against sharp, shorter-term stock market declines. As noted above, Treasury bond yields have fallen sharply. They have been extremely volatile as well, shooting up on some days when stocks were also sharply selling off. The 10-year yield is currently at 0.88%, down from 1.92% at year-end.

Turning to the credit markets, high yield and emerging market bonds followed the equity markets down, falling 18% and 15% respectively. Even investment-grade corporate bonds have been far from immune, having lost over 7%.

First Quarter Portfolio Performance & Positioning

Financial markets in 2019 were a positive surprise for many investors. However, the start of 2020 has been the exact opposite. Just three months ago, most investors were astonished to see stocks jump 20% to 30% during the eleventh year of a historic bull market. Even core bonds clocked in a 9% return last year. But things have changed dramatically since year-end. Though one thing is constant: Just as no market pundits expected U.S. stocks to gain 30% last year, none of them expected a 30% drop in the first three months of 2020 and the real possibility of a severe economic recession.

When you diversify across asset classes and consider a variety of potential scenarios, there will always be leaders and laggards in your portfolio. Some positions work well in strong up environments like we experienced last decade, while others benefit portfolios during tougher times, like the start to the 2020s. Put together, they build resiliency and protect a portfolio from betting on a single outcome, which can be a disastrous financial result if the opposite happens.

Highlighted below are two recent portfolio allocation changes:

Reducing Developed International

Positions in foreign stocks have been a headwind in this first quarter. European stocks have underperformed U.S. stocks during this swift and severe downdraft, while emerging-market stocks have fallen a similar amount as U.S. stocks. Our views on international markets are mixed. While valuations remain attractive, we must consider the post-crisis landscape and the speed of recovery. Like the reaction during the 2008 financial crisis, policy makers in the U.S. were able to quickly and successfully implement programs into the financial markets. In short, we believe the U.S, again, will be in a better position to lead the global market from out of this downturn. While we maintain a slight overweight to Emerging Markets, during the quarter we reduced allocations in Developed Markets in favor of U.S. stocks.

Non-Core Income Strategies

Allocations in non-core fixed-income have been a headwind during the quarter. Our active bond fund managers have underperformed the core bond index. In general, falling Treasury rates across the curve and widening credit spreads have been a headwind for active bond managers. Last week, the Strategy group used this relative weakness in credit to increase positions in High Yield Corporate bonds. With yields over 10%, High Yield bonds are at their most attractive levels since the fourth quarter of 2008. At current prices and yields, we expect strong returns for our non-core bond funds over the next two to five years.

Update on the Macro Outlook

Coming into the year, we saw the potential for a moderate rebound in the global economy (especially outside the United States) on the back of reduced U.S.-China trade tensions and extensive global central bank monetary accommodation. And in January and early February, there were signs the manufacturing sector had bottomed and a nascent global recovery was indeed underway. Stock markets rallied to all-time highs.

However, the arc of the coronavirus and the increasingly aggressive U.S. and global response to try to slow its spread has drastically changed everything. The base case now is that the U.S. economy is headed into recession in the second quarter. It is likely to be a severe one, with a sharp contraction in GDP and an unprecedented rise in unemployment and jobless claims.

The consensus also appears to believe the recession will be short in duration, with a rebound beginning around the third quarter. But this is by no means a sure thing. To the extent equity markets are not fully discounting a more severe outcome, downside risk remains.

The depth and duration of the recession—and the strength and timing of the ensuing recovery—depend on two key variables:

  • The progression and spread of the virus: how effective our medical response and social-policy efforts are in flattening the curve, and
  • The fiscal, monetary, and regulatory policy response: how quick and effective new policies will be in supporting households, businesses, and financial markets—mitigating the short-term recessionary damage and preventing a downward spiral into something much worse than a short but severe recession.

The effectiveness of the medical response and economic policies (and their impact on human behavior at the societal level), will help answer the fundamental economic question of how severe and how long the economic downturn and recession will be. And the answer to the economic question will help answer the investment question of how severe and how long the equity bear market will be.

The financial markets and the real economy are interconnected—each drives the other and can reinforce or magnify a trend in one direction. A rebounding stock market supports the real economy and vice versa through positive wealth effects, increased incomes, profits and spending, risk-taking, and optimism. But they can also feed off one another on the downside, in a self-reinforcing negative spiral that can ultimately lead to an economic depression if the spiral is not broken.

On the Economy

On Sunday, March 15, the Federal Reserve held an emergency meeting where they cut the federal funds rate by one percentage point to near zero. The Fed also announced it was restarting quantitative easing (QE) with at least $700 billion in planned purchases of Treasury bonds and mortgage-backed securities.

At his press conference following the meeting, Fed chair Jerome Powell said GDP growth was likely to be negative in the second quarter, and beyond that the economic outlook was highly uncertain, as it depends on how widely the virus spreads: “I would say in fact, unknowable.”

Over the following week, economist after economist slashed their second quarter GDP forecasts deeper and deeper into contractionary territory. They may have changed again by the time this is published, but to give a sense of the magnitude, going into the last week of March, Goldman Sachs was forecasting a 24% annualized decline, Morgan Stanley a 30% decline, JPMorgan a 14% decline, and both Bank of America and Citigroup a 12% decline, to name a few. For comparison, the worst quarter during the 2008 financial crisis was an 8.4% annualized GDP contraction, in the fourth quarter of 2008.

On Sunday, March 22, Federal Reserve Bank of St. Louis president James Bullard topped them all. He was quoted by Bloomberg News citing the potential for a 50% quarterly drop in GDP and a 30% unemployment rate in the second quarter, in the absence of massive fiscal and monetary policy support.

Bullard also said that with an aggressive government response, economic activity should begin to bounce back in the third quarter. And the fourth quarter of 2020 and the first quarter of 2021 could be “quite robust” as Americans make up for lost spending. “Those quarters might be boom quarters,” he said. As another example, Goldman Sachs forecasts a 12% growth rate in the third quarter and a 10% increase in the fourth quarter, following their expected 24% second quarter plunge (forecast as of 3/20/20).

As mentioned earlier, an economic slowdown—particularly an extremely sharp one due to extreme virus containment efforts—can quickly morph into a self-reinforcing negative spiral. Consumers cut back spending, businesses lay off workers, unemployment rises, incomes drop further, spending drops further, corporate profits drop, companies and households default on loans, companies go out of business, investment and employment drop further, etc., causing an even deeper and longer recession and bear market.

In this case of a severe external shock, the government’s economic policy responses are critical. There are two main levers: monetary policy (central banks) and fiscal policy (government spending, tax cuts, unemployment insurance, loans, debt forgiveness, etc.).

One lesson learned from the 2008 financial crisis is: When it comes to the policy response, go big and go fast. Time is of the essence (just as it is with the virus response). Governments need to make a credible commitment to “do whatever it takes” to support the economy and prevent the negative spiral from taking hold.

Monetary Policy

The Fed and other major central banks seem to be all-in to support the fluid functioning of credit, lending, and financial markets, and their critical role as the “plumbing” of the real economy.

As noted above, at an emergency meeting on Sunday, March 15, the Fed cut the federal funds rate to near zero and restarted QE. A week later, it increased the QE program from “at least $700 billion” to essentially an unlimited amount in order to keep interest rates and borrowing costs low. The Fed also initiated several programs—going beyond the tools it enacted during the 2008 financial crisis—to try to ensure enough credit, loans, and liquidity are flowing to banks, businesses, households, and the overall global financial system. It is likely the Fed will do still more (e.g. increasing their asset purchases to support the huge fiscal stimulus that is coming or even effectively monetizing the debt or “helicopter money”).

Fiscal Policy

Legislative haggling in Washington, D.C. over the components of what could be a $2 trillion fiscal stimulus package—nearly 10% of U.S. annual GDP—is close to passing. But congressional Republicans, Democrats, and the Trump administration all seem to agree that something massive needs to be done and done quickly.

Public and business support is also undoubtedly strong. So, the political obstacles to getting something done should be relatively low, especially considering how polarized the current political environment otherwise is. There really is no alternative. And, like the monetary policy response, the fiscal stimulus will also be global in scale, with even austerity hawks like Germany now acceding to its necessity.

The fact that most everyone across the political, ideological, and economic policy spectrums agrees that the aggressive measures necessary to slow or contain the virus could tip the U.S. and world economies into a depression is good news. It greatly improves the odds countries will act quickly and forcefully to enact fiscal, monetary, and regulatory policies to prevent that dire outcome from happening.

The good news is that stock markets now do appear to be discounting a recession, but a relatively short one, not a severe or long-lasting one. According to analysis by Ned Davis Research, severe global recessions have been associated with an average decline of 45% in global equities (albeit there are not many data points). And a reminder: The S&P 500 ultimately dropped 59%, 49%, and 48% in the 2007–09, 2000–02, and 1973–74 bear markets noted above.

If the virus news gets worse in the United States (before it gets better), investor sentiment could take additional hits with further market declines. Such declines—driven by fear, uncertainty, and human herd behavior—can feed on themselves resulting in a major overshoot on the downside compared to the market’s “fair value” on a longer-term fundamental basis.

Closing Thoughts: This Crisis Will End. This Too Shall Pass.

As investors, it is so important to maintain our focus on our long-term financial goals and objectives. As hard as it may be, from an investment perspective we need to try to look through the current environment of fear and concern—emotions which, given the circumstances, are totally justified and felt by all of us—to the almost certain outcome of the virus crisis receding and economic recovery occurring.

Throughout history, the world has faced numerous severe challenges and economic downturns and has always come out the other side. While not minimizing the unique risks and unknowns from the current crisis, we will bet on that being the case again. There is a good chance the recovery may start happening before the end of the year.

As a long-term investor, trying to time market tops and bottoms is a fool’s errand. The evidence is overwhelming that most investors diminish their long-term returns trying to do so. They are more likely to chase the market up and down, and get whipsawed, buying high and selling low. But incrementally adjusting portfolio allocations in a patient and disciplined fashion in response to changing asset class expected returns and risks makes a lot of sense for long-term investors.

The time to be adding to stocks and other long-term growth assets is when prices are low and markets—and most of us personally—are gripped by fear and uncertainty rather than complacency, optimism, or greed. Investing at such times will feel very uncomfortable. It may seem like the market could just keep dropping with no bottom in sight. But that is exactly where research, analysis, patience, experience, and having a disciplined investment process come most into play.

Otherwise, if we invest based on our feelings and emotions, we are very likely to cash out of the market after it has already dropped a lot, locking in those losses. Then, waiting to reinvest after our discomfort and worry are gone, the market will already be much higher. That is not a recipe for long-term investment success, yet it plays out in each market cycle.

Facing the current medical and economic crisis, the situation is probably likely to get worse before it gets better. (We would love to be wrong about that.) But, with some necessary and shared sacrifices from all of us—and clearly those on the medical front lines much more than most—it will get better.

Stay the course.


Not Investment Advice or an Offer

This information is intended to assist investors. The information does not constitute investment advice or an offer to invest or to provide management services. It is not our intention to state, indicate, or imply in any manner that current or past results are indicative of future results or expectations. As with all investments, there are associated risks and you could lose money investing.

Certain material in this work is proprietary to and copyrighted by Litman Gregory Analytics and is used by Argent Financial with permission. Reproduction or distribution of this material is prohibited, and all rights are reserved.

The Morning View: March 26, 2020

Senior Vice President / Portfolio Manager

In this morning’s data, Initial Jobless Claims rose to 3,283,000 in the week ending March 21st, a post-World War II record.  This was up from a revised 282,000 the previous week and far surpassing the previous high of 695k in October of 1982, as the slowdown from the Coronavirus impacts workers.  It is still unknown how long social distancing and other measures put in place by government officials to slow the spread of the Coronavirus will remain in place.  Meanwhile, the Federal Government has passed a $2 trillion stimulus bill, which includes some additional support for jobless workers.  And, the Federal Reserve has recently cut interest rates and enacted programs from the previous recession to offer additional monetary support.  While we expect the virus and mitigation measures to affect additional data points and the economy in the weeks ahead, the fiscal and monetary stimulus should help offset some of the impact.  In all, bond yields are little changed, and equity futures are lower, but off the lows of the session, as we head into the market open.

This material is intended to be for informational purposes only and is intended for current or prospective clients of Argent Trust Company. This information is obtained from sources believed to be reliable, and its accuracy and completeness are not guaranteed. Information does not constitute a recommendation of any investment strategy, is not intended as investment advice and does not take into account all the circumstances of each investor. Forward‐looking assumptions are Argent Trust Company’s current estimates or expectations of future events or future results based on proprietary research and should not be construed as an estimate or promise of results that a portfolio may achieve. Actual results could differ materially from the results indicated by this information. Investments can go down as well as up. Past performance is not a reliable indicator of future resul

Fixed Income Market Update-March 25, 2020

Portfolio Manager / Argent Trust Company

In the wake of the coronavirus pandemic the market’s response has been nothing short of extraordinary. Just a week before the recent downslide started, equity markets were at an all-time high and there was virtually zero talk of a recession. Fast forward to today, and the likelihood of a recession is probable. According to Bloomberg, the estimates of a recession are north of 50%.

In times of uncertainty where the likelihood of economic growth rates are unknown, such as what we’re experiencing now, there may come an opportunity to capture value caused by not only the market’s reaction, but also by the needs of market participants. Liquidity, for instance, is a fundamental pillar that keeps the financial markets functioning, and in times of high-stress, market participants are willing to concede large premiums to those who are willing to provide it. There are numerous examples, but the municipal bond market is currently experiencing aggressive price discounting and has yielded valuable opportunities for those looking for tax-free income. Values, measured by bond yields as a percentage of U.S. Treasuries, are extraordinarily high, making the municipal bond market selectively attractive. To put this into a yield perspective, one month ago the yield-to-maturity on a five-year AAA rated municipal bond was earning near 1% on average, we’re now seeing those similar bonds offered north of 2.5%. In taxable-equivalent terms, an investor in the highest tax bracket would earn 4.77% per annum, depending upon his or her state income tax situation.

Unlike the corporate credit market, where cash-flows are less predictable and debt levels are high, from an historical and macro perspective, municipal bond cash-flows backed by ad valorem property taxes are stable and not likely to be impacted as much by market turmoil as corporate debt.

Over the past four weeks corporate spreads on 10-year bonds have increased from 124 basis-points over treasuries to nearly 400; an unprecedented move in such a short time-period. The reasoning behind such a pronounced move is increased business uncertainty and the financial strain companies around the world are experiencing.

Finally, as a reflection of market expectations and the Federal Reserve’s recent move to lower the Fed Funds rate to a
lower-bound target of 0.0%, rates across the Treasury yield curve have fallen precipitously, with short-term rates
falling faster than long-term rates; also known as a “Bull-Steepener.”

Here at Argent, we’re always looking for opportunities to enhance yields as well as mitigate risk. Given the extraordinary moves in yield spreads witnessed over the past four weeks, we believe there are opportunities to enhance portfolio returns with respect to tax-exempt bonds, as well as non-energy high-yield bonds, and we are looking to do so tactically, and where appropriate, as cash values permit.

If you have any questions or would like to discuss further, please feel free to reach out to our fixed-income team:

Samuel N. Boldrick III – (210) 352-2414
J. Hutch Bryan Jr – (210) 352-2411
Oren M. Welborn Jr – (318) 588-6720

Not Investment Advice or an Offer
This information is intended to assist investors. The information does not constitute investment advice or an offer to invest or to provide management services. It is not our intention to state, indicate, or imply in any manner that current or past results are indicative of future results or expectations. As with all investments, there are associated risks and you could lose money

AmeriTrust Appoints Kenny Brown Jr. as Vice President, Business Development

Tulsa wealth management firm also welcomes Jason Simpson as portfolio manager

Contact: Taryn Clark  |  405.848.8899

TULSA, Okla., March 24, 2020 – AmeriTrust announced today that Kenny Brown Jr. has been promoted to vice president, business development. Jason Simpson has also joined the firm as portfolio manager. Both are based in the Tulsa office and report to AmeriTrust President Harvie Roe. AmeriTrust provides trust administration, investment management and financial planning services and is part of Argent Financial Group, the largest independent trust-based wealth management company in the South.

Brown will spearhead new client outreach and strengthen current customer relationships. He joined AmeriTrust in 2017 as assistant vice president and portfolio manager, bringing more than 10 years of career experience in the trust and financial services industry. Prior to AmeriTrust, Brown spent four years at Heritage Trust in Oklahoma City, also part of Argent Financial Group. He’s also worked in accounting and financial roles with GuideStone Financial Resources and Fidelity Investments in Dallas, Texas.

“Kenny epitomizes the role of fiduciary and understands that listening before advising is the best way to understand and serve our clients,” said Roe. “He is also a highly-respected professional who is personable and has a sharp analytical mind. We’re lucky to have him at the helm of our business development efforts.”

A registered investment advisor representative, Brown is also a level II candidate in the Chartered Financial Analyst (CFA) program. He earned his bachelor’s degree in business administration and MBA in finance from Dallas Baptist University.

Before joining AmeriTrust, Simpson worked for three years as a portfolio manager and investment analyst with Bank of Oklahoma in Tulsa. He also spent four years as finance manager for Arms of Love International headquartered in Costa Mesa, California. Simpson is a level III candidate in the CFA program. He holds a bachelor’s degree in American political studies from Northern Arizona University and a master’s degree in economics from Colorado State University.

“When Kenny introduced me to Jason, it quickly became clear why he championed him as the ideal portfolio manager candidate,” said Roe. “His varied background brings added depth to the team and he shares our values of always putting the client first. Jason knows it’s not about products, but people and responsible financial planning. We are looking forward to seeing him thrive in his new role.”

Brown and Simpson are both involved with local industry and charitable organizations including the Oklahoma CFA Society, Tulsa Estate Planning Forum and Community Food Bank of Eastern Oklahoma. Simpson also enjoys refereeing for collegiate football games.

About AmeriTrust Corporation

AmeriTrust Corporation is part of the Argent Financial Group family of companies and was formed in 1997 in Tulsa, Oklahoma. The company provides investment management and trust management and administration services, as well as financial planning through a sister company and AmeriTrust Advisors, Inc. AmeriTrust Corporation is responsible for more than $600 million in client assets. For more information, visit

About Argent Financial Group

Celebrating its 30th anniversary in 2020, Argent Financial Group (AFG) is a leading independent fiduciary wealth management firm. Responsible for more than $27 billion in client assets, AFG provides individuals, families, institutions and businesses with a broad range of wealth management services including trust administration and related services, investment management, family office services, retirement plan and charitable organization administration, mineral (oil and gas) management, and financial, retirement and estate planning. The company was also recently named for the second year in a row to the Inc. 5000 list of the fastest-growing companies in the U.S. AFG is the only financial services company in Louisiana to make the prestigious list. For more information, visit



Market Update – March 20, 2020

Chief Investment Officer / Argent Trust Company

It’s been a long couple of weeks.

We’ve been presented with a series of events and now face current circumstances that previously had been difficult to imagine. What seemed perhaps unimaginable two weeks ago, for example, the cancellation of in-person classes at schools and universities around the country, has been met with remarkable adaptability. Restaurants forced to shut down have developed effective pick-up and delivery strategies within days. Businesses are figuring out how to accommodate remote workers. Even hospitals are figuring out how to expand the capacity of their respirators which are expected to be in demand. We will see how people react and adapt to the state-wide lockdown orders recently announced. It’s not perfect by any means, and not every business can adapt. We know the next employment report will indicate the reality of the many businesses which have laid-off employees.John McCollum

This pandemic has arrived with alarming speed and already inflicted great pain. The pain, initially, has been caused by both voluntary and government mandated actions intended to delay, and in some areas perhaps prevent, the worst direct impacts of the coronavirus pandemic. Overall, our investment decisions throughout this period have been predicated on the idea that despite a period of extreme economic disruption, somewhat normal business conditions will re-emerge in coming months. Over longer periods, there is no reason to believe that economic activity will not resume its normal pace (with the normal periodic ups and downs).

There will continue to be tremendous government provided support to businesses, institutions and individuals. We have seen encouraging signs so far of the beginnings of this support. The Federal Reserve has cut short term interest rates to zero and implemented or re-started several programs designed to ensure stability in financial markets, especially in some of the areas less publicly visible but critical to normal functioning of markets. The IRS provided the option to defer for 90 days filing and final payments for 2019 tax returns. Congress is working on a bill to provide significant direct relief to those affected by job losses. There will almost assuredly be more to come. We are also beginning to see creativity and innovation, and even some signs of sensible reduction in various rules and regulations as the nation adapts to the realities of slowing the spread of a pandemic.

Markets, at times, have seemed to expect the worst possible outcome. At a time when the fear of the solution is in some ways worse than the disease, we have all been testing and questioning our assumptions. However, throughout all of this, we continue to make changes to investment portfolios when we think we can benefit from what are extreme and judged to be unwarranted short term changes in securities prices.

The Morning View: March 12, 2020

Senior Vice President / Portfolio Manager

Announced this morning, Initial Jobless Claims fell 4,000 to 211,000 in the week ending March 7th, less than forecast.  In addition, the Producer Price Index, which measures the amount of inflation at the producer level, fell 0.6% in February and has increased 1.3% on an annual basis.  The Producer Price Index at the core level, which excludes food and energy, decreased 0.3% in February and has increased 1.4% on an annual basis.  Overall, while concerns of the novel Coronavirus remain and should eventually negatively affect economic data, initial jobless claims have yet to reflect its impact.  Typically, readings below 300k indicate a healthy job market and claims have remained in the low 200k range for a while.  Additionally, there is limited inflation pressure at the producer level, which gives further support for central banks to remain accommodative, as the European Central Bank just announced they will keep rates at very low levels and intend to provide further stimulus and liquidity tools to help deal with impacts of the Coronavirus.  In all, bond yields are little changed this morning and equities are expected to open lower as futures trading was halted following the fluid flow of information.      








This material is intended to be for informational purposes only and is intended for current or prospective clients of Argent Trust Company. This information is obtained from sources believed to be reliable, and its accuracy and completeness are not guaranteed. Information does not constitute a recommendation of any investment strategy, is not intended as investment advice and does not take into account all the circumstances of each investor. Forward-looking assumptions are Argent Trust Company’s current estimates or expectations of future events or future results based on proprietary research and should not be construed as an estimate or promise of results that a portfolio may achieve. Actual results could differ materially from the results indicated by this information. Investments can go down as well as up. Past performance is not a reliable indicator of future results.

Market Update – March 9, 2020

Following are comments on recent market activity from Argent’s Chief Investment Officer John McCollum, as well as detail on fixed income markets from Sam Boldrick, comments on the economy from Marshall Bartlett, and an update on the OPEC meeting and its impact on oil prices from David Luke.

General Update – John McCollum, CFA / Chief Investment Officer, Argent Trust Company

From early last summer to recent highs in mid-February, equity markets in the US surged over 20%. Over the last several weeks, markets have given back virtually all of those gains. Foreign equities had not risen as much as those domestically but have fallen similar amounts. The price appreciation in equities seemed to outpace observed fundamentals although there were signs that earnings growth was set to resume and global economic data appeared to be gathering upward momentum. Low interest rates around the world, supported by both markets and central banks, further supported high asset prices.

The net effect of prices rising faster than underlying fundamentals is simply that future returns may be lower. The effect is borrowing from the future in a sense. Because of the apparent mismatch between prices and fundamentals, we have advocated discipline in assessing time horizons and in maintaining asset allocation levels very tight to targets. Strong underlying economic fundamentals, particularly in the labor force, supported maintaining equity positions for long time horizons.

The Coronavirus (COVID-19) began to startle markets in late January and the fears began to really take hold in late February. The concern was not so much about the direct health impact of the virus itself but rather the economic impact of efforts to contain its spread. The world saw first-hand how economic activity in the region of China where the virus originated was ground to a halt as a result of government restrictions on travel and trade. As the virus began to spread to other countries in larger numbers, it appears the market extrapolated the same economic impact to other regions.

We have previously provided a good bit of information from primary sources (CDC, WHO, NIH etc.) about the nature of the virus itself and what individuals can do to minimize their likelihood of infection. Credible sources indicate that warmer weather (in the northern hemisphere), private market actions (work from home policies etc.), and improved hygiene (washing hands really helps!) and education will help to reduce the extent and severity of infections in the U.S. and other parts of the world. What we don’t know (and what we have understood all along that we can’t know) is how widely infections will spread and what will be the economic impact of private market and government policies to contains the virus’ spread. We also don’t have clear and reliable information about when testing will be broadly available or when a vaccine might be developed. The good news is that by most available economic indicators, the US economy, and the employment situation in particular, are starting from a very strong position.

On top of the recent direct fears of the virus, Saudi Arabia and Russia helped drive a decision (or lack of a decision, really) by OPEC to not cut production. See below for more information on this matter. In response, oil prices declined 20% and stock prices of many energy related companies are falling a similar amount while interest rates continue to fall in today’s trading.

We do believe, however, that like all “shocks” to the market, the events and fears affecting prices today will abate in the future. Having been cautious on allocations and disciplined in evaluating time horizons provides our clients the option to use recent changes in market prices to re-balance and to seek opportunity when others are choosing to sell because of fear or forced to sell because of leverage. Additionally, we will continuously monitor economic data, earnings data, and news of the virus and other matters as we consider any changes to allocation recommendations.

Below, please see additional information and commentary on fixed income and interest rates from Sam Boldrick, economic commentary from Marshall Bartlett, and comments on the oil market and the OPEC/Saudi/Russia decision from David Luke.

Fixed Income Update – Sam Boldrick / Director of Fixed Income, Argent Trust Company

With risk asset selling pressures mounting following increased virus-related volatility last week, and oil price cuts over the weekend, we’ve seen a material drop in yields of safe haven U.S. Treasuries across the board. Earlier this morning the bell-weather ten year Treasury yield hit 43bps, a record low.  At the time of this writing the ten year yield is .54%. With trading activity very high, the entire Treasury yield curve still sports a positive slope with the 3 month T-Bill and two year Treasury Note yielding 37bps and 38bps respectively. Needless to say, combined with an unexpected inter-meeting 50 bps rate cut by the FOMC last week and the strong flight to quality bid globally for U.S. Treasuries, yield spreads on other fixed income assets (the difference between the yield of non-Treasury bonds compared to a Treasury of the same maturity) have increased measurably. Not surprisingly, lesser quality fixed income assets have fared worse than investment grade issues as economic concerns raise default concerns across the financial markets.

We are watching these trends closely with particular focus on the high yield and emerging market fixed income sectors for potential opportunities. As a reminder, we monitor the credit quality of our individual bond portfolios ongoing and will report concerns, if any, as they come up.

With yields at historically low levels, and widespread consternation in the financial markets as a whole, it’s our current recommendation to stand pat with our current allocation percentages but to look for dislocations where we might find value. The U.S. Central Bank (the Federal Reserve) has been very active in the credit markets, boosting liquidity through overnight and term repurchases operations, and the futures markets currently anticipate an additional rate cut by the next FOMC meeting later this month. We would be remiss not to mention that the current appetite for negative interest rates in the United States, as reflected by the voting members of the FOMC, is reported to be negligible, and we expect the current atmosphere to eventually abate somewhat. That said, although foreign buying of Treasury notes and bonds from yield-starved and risk-averse investors could possibly test negative territory, we currently do not recommend the purchase of Treasury Notes or Bonds but for cash management purposes.

Economic Update – Marshall Bartlett / Senior Portfolio Manager, Argent Trust Company

Looking at recession probability measures, the odds of a recession in the next 12 months may have increased, but a recession occurring in that time frame is not yet certain.  U.S. Economic data leading into mid-February show a strong labor market, low unemployment, decent consumer spending, and low inflation.  While still weak, manufacturing was beginning to recover some from the U.S. / China trade war.  Business investment had yet to return to previous levels in the cycle.

Considering this data, measures of recession probability are mixed.  Measures which are based on treasury spreads, such as the NY Fed, and the yield curve, such as the Cleveland Fed, do show an increased chance of recession within the next twelve months.  However, recession measures which are based on payrolls, the unemployment rate, and industrial production, such as the St. Louis Fed, do not yet show an increase in the probability of recession.  The Leading Economic Indicators index has stayed positive, however our review of the underlying components show that it may turn negative at its next release.

The extent of how much decreased economic activity due to Coronavirus filters into economic data could drive whether a recession occurs.   The Federal Reserve has already taken some action with their short term interest rate policy, and will likely take additional steps should conditions not improve.  Given inflation is at low levels, it gives them room to act with the limited tools they have at their disposal.  A fiscal response is likely warranted, however given the discord in Washington and upcoming election, it is unclear whether a strong fiscal response is possible.  However, consumer spending could remain strong and lower oil prices should help somewhat.

Our team remains focused on employment data, company earnings reports, and leading indicators as to whether a recession becomes more likely.

Energy Market Update – David Luke / President, Argent Mineral Management

With global oil demand reacting to the global economy slowing due to the virus, Saudi Arabia proposed another output cut to the OPEC+ members last week in an effort to limit supply and stabilize prices.  Russia didn’t want to play ball and declined to vote in favor of the move, which immediately sent prices tumbling.  This worsened over the last few days when Saudi’s response was to do what they have done before when their “Plan A” was refused…they went opposite and have decided to flood the market via a slash of their product price.

What has never made sense is why the U.S. has always able to avoid the cut mandates and been able to sit back and enjoy the pricing climb due to the output cuts of others.  Russia has finally called us out on this…stating this week that they insist that U.S. shale producers should be made to share the plan.  While I hate the timing…I completely understand their stance, unfortunately.

Back to Saudi Arabia – the last time they flooded the market (in an attempt to drive some U.S. shale companies out of business), it backfired on them as the U.S. companies held on, and the Saudi regime took it on the chin and grew tired of watching their stockpile of cash wither away.  Due to this history, I am hopeful that this market flood will be more temporary and more of a reminder to all of their power and ability to control markets, however some believe this one will be drawn out longer by both sides. It is  not clear how U.S. producers will react, however, market price action indicates an expectation that Saudi actions will be painful for U.S. producers.

Investment Commentary: March 2020

Director of Investments – Argent Trust Company  |  615.385.2720

Fears and concerns about the spread of the coronavirus outside of China and its potential economic impact drove stock markets lower in February. U.S. stocks fell around 8%, while developed international stocks fell a similar amount and emerging-market stocks dropped 5.3% for the month.

The final week of the month was particularly rough for U.S. stocks—falling every day of the week and logging an 11.5% total loss. This was the worst weekly loss for the S&P 500 since October 2008 and the sixth-worst week since the 1930s. It’s fair to say volatility has returned to the markets.

It remains difficult to handicap what the economic impact of the coronavirus will be. But it remains a widely held assumption that the virus will not have a long-term effect on economic growth, although most economists are cutting near-term GDP growth estimates. For example, the OECD recently cut their 2020 global GDP growth estimate to 2.4% from 3% last November. They revised China’s GDP growth sharply to below 5% this year, down from 6.1% last year. They wrote that “broader contagion across the wider Asia-Pacific region and advanced economies—as has happened in China—could cut global growth to as low as 1.5% this year, halving the OECD’s previous 2020 projection from last November.” The risk of a recession has increased in the near term for some countries. For example, Japan will likely be in a recession when their next GDP number is released. Though, in recent days central bankers around the world have said they are ready to act if the economic impact deems it necessary.

Fixed-income markets rallied on the virus fears, as well as an increasing belief that the Federal Reserve would intervene in the markets and cut interest rates. U.S. core bonds gained 1.4% and intermediate-term Treasuries rallied nearly 3% in February—with most of that return coming during the final week of the month. Treasury rates fell to all-time lows, with the 10-year Treasury closing the month at 1.13%. This leaves much of the Treasury curve inverted.

When we started writing this update (on March 2), the markets were sharply reacting to a collapse in China’s Purchasing Management Index. Futures had quickly moved to an extreme position and expected with 100% certainty that the Fed would cut the federal funds rate by 50 basis points at their next FOMC meeting on March 18. The next day Fed chair Jerome Powell cut the policy rate by 50 basis points and the market got the rate cut it was expecting two weeks early. This is the Fed’s first emergency rate cut since the financial crisis in 2008. In the Fed’s press release, they wrote: “The fundamentals of the U.S. economy remain strong. However, the coronavirus poses evolving risks to economic activity.” It’s difficult to see how a rate cut is going to help. Further, it places policy makers in a no-win situation. Market expectations are running way ahead of reality for what policy makers can and will do.

Certain material in this work is proprietary to and copyrighted by Litman Gregory Analytics and is used by Argent Financial with permission. Reproduction or distribution of this material is prohibited, and all rights are reserved.

4 Reasons Why You Should Create a Dynasty Trust To Pass Down Your Wealth

Senior Vice President & Trust Officer – Argent Trust Company  | (210) 581-0436

With federal estate tax exemptions at historic highs, individuals and married couples seeking to support their family and heirs should consider creating a dynasty trust to maximize the wealth they pass down to future generations.

Dynasty trusts have been a powerful tool to preserve and transfer wealth for many years and became even more appealing with the passage of the Tax Cuts and Jobs Act of 2017 (TCJA). Provisions in the TCJA raised the lifetime estate tax exclusion from $5.5 million in 2017 to $11.58 million (double that amount for husband and wife) in 2020.

That’s the good news. The bad news is that in 2026 the exclusion amount will be rolled back to pre-TCJA levels. Given the uncertain political climate, there’s no guarantee the current exemption will stay in place. Here are four key reasons why you should form a dynasty trust now to capitalize on the generous tax benefits currently in place:

1. Grantors can support their family for generations

One of the primary advantages of a dynasty trust – aside from the estate tax exemption amounts – is that it allows grantors to distribute funds to multiple generations. It’s an ideal wealth management tool that allows grantors to cement their legacy and support their children, grandchildren, great grandchildren, and great, great grandchildren (as well as charitable organizations).

While several states have rules against perpetuities that limit how long a trust can be in place, other states are much more progressive. Tennessee, for example, permits dynasty trusts to last up to 360 years. Fortunately, individuals can create a dynasty trust with a longer duration – even if the trust was created in another state. To ensure another state has jurisdiction over a trust, substantial trust administration must be performed in that state and usually include one of the following:

  • The trustee’s principal place of business must be located in that state
  • Some trust records must be held in the state
  • Income tax returns must be prepared or arranged in the state; and
  • Some trust assets must be held in an account in the state

2. Dynasty trusts allow grantors to determine how wealth is managed

Another appealing factor of a dynasty trust is that grantors can dictate how their wealth will be invested, managed and distributed to beneficiaries. The grantor’s wish for control and governance can be as broad or as strict as desired. Provisions can be included that require beneficiaries to meet certain conditions to receive distributions (to prevent heirs from squandering funds). Clauses also can be added to ensure charitable organizations, for instance, meet certain financial criteria or performance metrics to ensure they are being good stewards of the trust’s money.

3. Family assets are protected with a dynasty trust

A properly written dynasty trust will include provisions that protect trust assets from creditors (commonly referred to as a spendthrift provision). Ownership of the assets is transferred to the trustee, effectively preventing creditors from going after those assets to repay debts or other claims. It also protects family assets if a family member is sued or divorces.

4. Future tax savings could be significant

There are no tax savings (aside from the estate tax exemption) when a dynasty trust is created. The assets funded into a dynasty trust and any appreciation of those assets, however, no longer are included in the grantor’s gross estate for federal estate tax purposes. The future tax savings could be considerable if the trust is governed by the laws of taxpayer friendly states like Tennessee, which has no income tax. Additionally, several states do not have capital gains taxes, so proceeds from the sale of assets are taxed only at the federal level.

To maximize the financial benefits of a dynasty trust, individuals should always consider working with a trust company that operates in a state with low taxes and strong asset protection laws. Our company has offices in Tennessee – which is consistently ranked as one of the most trust-friendly states in the country – for those very reasons.

One final observation: consider enlisting the services of an independent, corporate trustee to administer your dynasty trust. An experienced corporate trustee with a licensed firm can provide proven, professional management skills and will be knowledgeable of applicable trust laws – unlike a family member or friend of the family who is not experienced in the complicated and changing nature of trust regulations.

A dynasty trust can be an ideal strategy to take care of your loved ones and their loved ones for generations to come. When evaluating options, consult with an attorney, CPA or trust professional to make sure a dynasty trust is right for you and your family.

To learn more about the benefits of a Tennessee-chartered dynasty trust, please contact me via email or phone (210-581-0436) or anyone else on our Argent Trust Company team.

The Morning View: February 27, 2020

Senior Vice President / Portfolio Manager

Announced this morning, the first revision of GDP growth for the fourth quarter 2019 was 2.1%, as expected.  The quarterly increase in core Price Consumption Expenditures (PCE) was 1.2%, slightly lower than expected.  In addition, initial jobless claims for the previous week were 219,000, higher than expected, but still in the low 200k range.  Overall, this data reminds us that while the economy is growing, it is at moderate levels and inflationary pressures are benign, and this is before the impact of the spread of the Coronavirus (COVID-19) globally, causing markets to react in recent days.  Until there is some clarity of the impact on the global economy and how world leaders will respond, market volatility will likely continue.  We continue to monitor these events, keeping in mind individual risk tolerances and long-term goals.  In all, bond yields ticked lower this morning and equity futures are also lower as we head into the market open. 

This material is intended to be for informational purposes only and is intended for current or prospective clients of Argent Trust Company. This information is obtained from sources believed to be reliable, and its accuracy and completeness are not guaranteed. Information does not constitute a recommendation of any investment strategy, is not intended as investment advice and does not take into account all the circumstances of each investor. Forward-looking assumptions are Argent Trust Company’s current estimates or expectations of future events or future results based on proprietary research and should not be construed as an estimate or promise of results that a portfolio may achieve. Actual results could differ materially from the results indicated by this information. Investments can go down as well as up. Past performance is not a reliable indicator of future results.

Just Because You Can Doesn’t Mean You Should: Why You Need a Corporate Trustee

Originally published to the Winter 2020 edition of The Southerner, a newsletter of the Southern Cremation & Funeral Association

VP & Trust Officer-Funeral & Cemetery Trusts, Argent Trust Company | (318) 251-5856

The adage “Just Because You Can Doesn’t Mean You Should” is advice given to someone who is not using their resources in a wise way. Here in the South we also hear it used as advice given to someone regarding their wardrobe or questionable activities. It means even though there are things you can do; it does not always mean it is the best choice to do them.Debbie Holmes

There are some states that currently allow or have previously allowed you to act as your own trustee. Sounds good, right? You are saving money on those trustee fees! But is it a wise decision to not engage a trust professional, especially in an industry as complex as ours?

Trust companies and banks with trust departments are required to become “eligible” to serve as a trustee for Funeral Home and Cemetery trust accounts. A trustee may be eligible to serve in your state for any other type of trust but may be prohibited from serving in our industry due to additional qualifications. A corporate trustee that is eligible to serve in your state already has the stamp of approval from your regulators!

Corporate trustees bring a wealth of knowledge to the table. In the Funeral and Cemetery trust profession, the knowledge is specialized since it is state-specific. It is part of a corporate trustee’s job to monitor any legislative changes that will affect trust administration. Large trust companies will have a dedicated staff, often including an attorney, monitoring the states in which they are qualified. They will also provide career Funeral and Cemetery trust professionals that handle the day to day administration of your account. These individuals are familiar with all areas of trust administration and are also responsible for having the specialized knowledge for the states they serve.

Another reason to use a corporate trustee is to gain connections to other Funeral and Cemetery trust professionals such as tax preparers, investment managers and record keepers. Your trustee should have a preferred tax preparer who is experienced with Funeral and Cemetery trusts tax preparation. This can be a money-saving feature because a trustee is able to negotiate a lower fee due to the volume of business.

A corporate trustee has a fiduciary duty to act solely in the interest of their clients both legally and ethically. When you hire a corporate trustee, you gain an unbiased advisor to add to your team to help your business succeed. A corporate trustee in our industry has the honor of assisting you in serving your communities.

You may be allowed to forgo a corporate trustee, but you could let a corporate trustee serve you as you take care of your business.