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     A Bi-Weekly News Bulletin for CBAI Members                   January 9, 2013 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Time Growing Short To Participate in CBAI’s Scholarship Program
  • Senators Urge GAO to Study Too-Big-To-Fail
  • 31st Annual CBAI Call on Washington to be Held April 23-26, 2013
  • Studies Released on Causes and Impact of Bank Failures
  • AIG Considered Suing Government Over Bailout – Lawmakers Outraged
  • CFPB “Qualified Mortgage” Rule Expected This Week
  • CBAI Members Achieving 100 Years of Community Banking in 2013
  • American Banker Offers Banking Ideas for 2013
  • Investment Strategies for 1st Quarter 2013
  • Baker Market Update
  • Small Business Confidence Remained Low in December
  • 2013 Community Banking Week in Illinois is April 1 – 6
  • FEMA to Complete Implementation of Flood Insurance Reform
  • Save The Date! CBAI Capital Conference - April 17, 2013
  • Commercial Lending Institute to be Held January 14-16, 2013
  • Community Bank Directors’ College Set for January 23 & 24, 2013
  • Technology Conference Scheduled for February 7, 2013
  • CBAI Announces 2013 Convention Golf Outing


  • Time Growing Short To Participate in CBAI’s Scholarship Program:
    Essay Deadline is 2/4/13


    The CBAI Foundation for Community Banking will provide $23,000 in scholarship funds to top high-school seniors statewide via an essay-writing contest. The topic this year is: How do community banks make dreams come true? The Foundation will award a $1,000 scholarship to a student in each of CBAI groups as well as a newly added $500 award to the second-place finisher in each group, assuring geographical uniformity of winners. One student will win $1,000 a year for up to four years of higher education. And, as in previous years, the high school of the overall winner will receive $500. Your bank’s chance of sponsoring a winner is better than ever!

    There is no cost to participate, but time is running short. Contact Bobbi Watson at 800/736-2224 or
    bobbiw@cbai.com for details.

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    Senators Urge GAO to Study Too-Big-To-Fail

    Senators David Vitter (R-La.) and Sherrod Brown (D-Ohio)
    urged the Government Accountability Office to study the economic benefits that the too-big-to-fail financial firms receive due to actual or perceived taxpayer support. The senators asked the GAO to investigate whether banks with more than $500 billion in assets are able to raise funds more cheaply than smaller competitors because creditors believe the megabanks have a government guarantee against failure.

    The Senate voted before Christmas to approve ICBA-supported legislation sponsored by Vitter and Brown directing the GAO to study the advantages of the megabanks’ too-big-to-fail status, though the House did not act on it.

    “Wall Street megabanks, their shareholders, and their bondholders expect the U.S. government to step in during a crisis and provide capital to keep them in business,” the senators wrote to the GAO. “The implicit — and in some cases explicit — taxpayer-funded safety net provides subsidies to these large financial institutions.”

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    31st Annual CBAI Call on Washington to be Held April 23-26, 2013

    Call on Washington is CBAI's annual lobbying trip to our Nation's Capital. Now in its 31st year, scores of community bankers from across Illinois will join with their colleagues from throughout the nation and meet with Members of Congress and federal bank regulators in Washington, D.C. to express their opinions on important bank issues. YOUR VOICE CAN MAKE A DIFFERENCE! Now is the time to get involved. PLEASE PLAN TO JOIN US. More details to follow.

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    Studies Released on Causes and Impact of Bank Failures

    FDIC Renders Causes and Recommendations

    As required by law, the FDIC conducted a comprehensive study during 2012 to determine the causes and impact of bank failures. The report concluded that most failures were caused by aggressive growth, asset concentrations, inadequate underwriting, and deficient credit administration coupled with declining real estate values. The report also contains recommendations to improve supervisory activities.
    See FDIC Report.

    General Accounting Office Study Cites CRE Loan Losses

    The GAO Report to Congress was also released last week on the causes and consequences of bank failures. It concluded that credit losses on commercial real estate loans was the primary factor in most community bank failures.

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    AIG Considered Suing Government Over Bailout – Lawmakers Outraged

    After receiving a government bailout of $182 billion in 2008 that saved it from certain collapse, the American International Group (AIG) was considering becoming a part of a lawsuit alleging that the government didn’t provide shareholders fair compensation when it took a nearly 80% stake in the company.

    Reaction from public officials was swift as members of Congress widely criticized the company as the poster child for Wall Street greed, fiscal mismanagement and executive bonuses. AIG was using credit default swaps to provide insurance coverage to other firms like Goldman Sachs for large volumes of collateralized debt obligations backed by mortgages that ultimately went bad. Apparently the giant financial firms haven’t changed their attitudes about self-interest at all costs.
    See Fox News Report. Amid public outrage, the AIG board today voted not to participate in the litigation.

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    CFPB “Qualified Mortgage” Rule Expected This Week

    The Consumer Financial Protection Bureau is expected to release a final rule this week defining which mortgage loans automatically satisfy Dodd-Frank Act ability-to-repay requirements. The “qualified mortgage” rule is designed to ensure that only safe loans are provided to customers and will have significant implications on the future of the mortgage market.

    CBAI and ICBA have repeatedly encouraged the CFPB to structure the “qualified mortgage” standard as a legal safe harbor with clear, well-defined standards. We also have been urging the bureau to include community bank balloon mortgage loans held in portfolio under the QM definition.

    We are concerned that excessively rigid rules will threaten to force community banks out of the mortgage market, making it harder for average consumers to get a home loan.

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    CBAI Members Achieving 100 Years of Community Banking in 2013

    CBAI member banks celebrating 100-year anniversaries in 2013 are:

      Tompkins State Bank, Avon
      Brimfield Bank
      The First National Bank of Brownstown
      Washington Federal Bank for Savings, Chicago
      Flanagan State Bank
      State Bank of Graymont
      Community Trust Bank, Irvington
      Vermilion Valley Bank, Piper City
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    American Banker Offers Banking Ideas for 2013

    Financial reporters for American Banker magazine collaborated to identify “10 Big Ideas for Banking in 2013.” Among other issues, the ideas include fees, mobile banking, and operational risk.
    See AB Article.

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    Investment Strategies for 1st Quarter 2013

    The Baker Group's 1st quarter 2013 conference call on Investment Strategies is set for Thursday, January 10, 2013, 11:00 a.m. CST.
    Click Here to register now. Mark your calendars for the next strategy conference call on April 11, 2013.

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    Baker Market Update

    Now then, that didn’t hurt, did it? You know, that pseudo slip off the Fiscal Cliff that kind of happened but not really. Apparently there’s a Fiscal Ledge that no one knew about. Although the Congress came to the end of regulation play without a budget agreement, a last-minute plan was worked out in overtime that was lauded for preventing tax rate increases on about 99% of Americans.
    Read More.

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    Small Business Confidence Remained Low in December

    According to the National Federation of Independent Business (NFIB) Optimism Index, small-business owner confidence remained near historic lows in December, due partly to congressional wrangling over the fiscal cliff and the fate of tax issues.
    See NFIB Release.

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    2013 Community Banking Week in Illinois is April 1 – 6

    IT'S A NEW DAY IN COMMUNITY BANKING!! For FREE materials, contact Bobbi Watson at 800/736-2224 or
    bobbiw@cbai.com.

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    FEMA to Complete Implementation of Flood Insurance Reform

    The Federal Emergency Management Agency (FEMA) plans to complete implementation of Section 100205 of the Biggert-Waters Flood Insurance Reform Act effective August 1, 2013. Implementation of the provision that eliminates subsidized premium rates for non-primary residences has already begun. Rate increases for new policies and renewal policies will become effective January 1, 2013.

    In accordance with Section 100205(a)(1)(A), FEMA will exclude certain properties from receiving subsidized premium rates, including the following:
      • Any severe repetitive loss property consisting of 1-4 residences.
      • Any property that has incurred flood-related damage in which the cumulative amounts of NFIP flood insurance claim payments equaled or exceeded the fair market value of the property.
      • Any business property.
    The properties noted above will experience a 25% increase in annual premium rate until their average risk premium rate is equal to the average of the risk premium rates for actuarially rated policies.

    In accordance with Section 100205(a)(1)(B), FEMA will no longer provide a rate subsidy to the following:
      • Any property not insured by the NFIP as of the date of enactment of Biggert-Waters (with a possible exception created by Section 207).
      • Any property purchased after the date of enactment of Biggert-Waters.
      • Any policy under the NFIP that has lapsed in coverage as a result of the deliberate choice of the policyholder.
    These policies will be immediately subject to full-risk rating. FEMA will provide additional details concerning the implementation of these provisions of Section 100205(a) by February 1, 2013.

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    Save The Date! CBAI Capital Conference - April 17, 2013

    Please save the date! CBAI’s 29th Annual Capital Conference will take place on Wednesday, April 17 at the State House Inn in Springfield. More details to follow.

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    Commercial Lending Institute to be Held January 14-16, 2013

    The three-day
    Commercial Lending Institute provides commercial lenders with a solid foundation for producing and managing a quality loan portfolio. It focuses on analytical tools such as ratio, financial, cash flow analysis, as well as commercial loan structuring to enhance repayment capacity. Case studies are used to reinforce learning and represent typical community bank borrowers. Topics covered on day one include financial statement review, credit and ratio analysis, asset-conversion cycle analysis, and ratio interpretation. Cash budgeting, loan structuring, commercial loan documentation, and credit risk management are among the topics on day two. Day three examines cash-flow analysis, financial forecasting, and writing credit memos. Jeffery Johnson, president and founder of Bankers Insight Group, Atlanta, GA, heads this distinguished faculty. He is joined by Gerald Pfeiffer, partner, and Andrea Zurkamer, senior manager of assurance services, both of CliftonLarsonAllen, LLP in Peoria, IL; and Robert M. Swartz, manager, and Gary Genenbacher, CPA and partner, both of BKD, LLP.

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    Community Bank Directors’ College Set for January 23 & 24, 2013

    The
    Community Bank Directors’ College was developed in conjunction with state and federal regulators, and is designed to teach individuals how to become more effective, capable, and supportive members of their bank’s board of directors. The goal is to graduate directors who return to their banks more active, more knowledgeable, and more decisive -- an even bigger asset to your community bank. The College is offered once a year, provides a thorough understanding of bank operations and bank directors’ responsibilities, and is recommended for both new and seasoned bank directors. It is structured as two, two-day sessions offered on a annual basis; either may be attended as a stand-alone course. The first session is being held at Northfield Inn and Conference Center in Springfield, IL, January 23-24, 2013. Topics covered in the first session include an overview of the role of the bank director, the changing landscape of banking, the director and the board, and the loan process from the director’s view. The internal audit function, directors’ responsibilities in compliance, strategic technology planning and security update, your regulators' view of directors' responsibilities, and regulatory hot topics are also addressed.

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    Technology Conference Scheduled for February 7, 2013

    CBAI’s 2013 Technology Conference features targeted solutions to meet the demands of community banks. Participants benefit from informative general and break-out sessions and roundtable discussions with your peers on the hottest technology issues. With more than 35 of the nation’s leading financial-service providers showcasing the latest products, participants also find solutions in the Exhibit Center. The Tech Conference combines a hands-on technology show with tech-targeted educational sessions. The topics are hot and the speakers are experts. You are exposed to a multitude of new ideas at this year’s conference.

    There are still exhibit booths available! If you would like to exhibit at this year’s conference, Click Here.

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    CBAI Announces 2013 Convention Golf Outing

    Scheduled for Thursday, September 26, 2013, CBAI’s Convention Golf Outing will be held at Panther Creek Country Club in Springfield, IL. Panther Creek is Springfield's foremost Championship Country Club, featuring the best practice facility and range available in Central Illinois. Designed by Hale Irwin, Panther Creek is a 7,244-yard par 72 golf course. Mark your calendars today for CBAI’s 39th Annual Convention and Expo on September 26-28, 2013, at the Crowne Plaza in Springfield.
    Read More.

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    CBAI
    CBC Program

    PROFESSIONAL DEVELOPMENT PROGRAMS THROUGH 02/28/2013


    TELEPHONE/WEBCASTS THROUGH 02/28/2013



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