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Community Bankers Association of Illinois
Community Bankers Association of Illinois    Community Bankers Association of Illinois CBAI E-Newsletter Sponsor - SHAZAM
 
     A Bi-Weekly News Bulletin for CBAI Members                     February 19, 2014

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Staff Visit to Washington Reinforces Support for Community Bank Positions
  • Career Development Division (CDD) Spring Meeting set for March 18-19
  • CBAI's 30th Annual Capital Conference Registration Opens! Early Bird Ends March 26!
  • 2013 Results: Illinois Community Banks Posted Profits and Grew Assets
  • Seven Takeaways from Q4 Results for Community Banks
  • Baker Market Update
  • NFIB Survey: Small Business Confidence Treading Water
  • Dodd-Frank Doubles Down on Too-Big-to-Fail
  • Managing the Pending Bubble in HELOCs
  • Ag Secretary: “New Farm Bill an Investment in Rural America”
  • Farmland Values Increase in Seventh and Eighth Fed Districts, But at Slower Pace
  • FHLB Chicago Releases 2013 Financial Highlights
  • New FFIEC Guidelines Emphasize the Importance of Social Media
  • Comptroller's Handbook Revised
  • CBAI Compensation Survey Now Online
  • Survey: 45% of Americans Choose Banks Based on Fees
  • Time to Plan Your Community Banking Week Celebration!
  • What’s Special about Your Bank?
  • Harland Clarke: 12 Questions Banks Should Ask Instant Issue Providers
  • Deposit Documentation Scheduled for February 24-27
  • Key Lending Strategies for Growth and Profitability Set for February 27
  • Fighting Fraud Scheduled for March 3-5
  • Register Today for CBAI’s Professional Forums and Groups!
  • CBAI Announces 2014 Group Meeting After-Dinner Topic and Speakers
  • Mark Your Calendar for CBAI’s 40th Annual Convention & Expo


  • Staff Visit to Washington Reinforces Support for Community Bank Positions

    Despite a severe D.C. snowstorm that closed the Federal Government on Thursday, February 13, David Schroeder, vice president federal governmental relations, visited every office of the Illinois congressional delegation, the Conference of State Bank Supervisors, and the ICBA to discuss issues of importance to Illinois community banks.
    Read More.

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    Career Development Division (CDD) Spring Meeting to be Held March 18-19

    The CDD Annual Spring Meeting is scheduled for March 18-19, at the Hilton Hotel in Springfield. This conference combines motivational, energetic, and informative general sessions with important messages for today’s banker, as well as six breakout sessions with practical solutions and ideas that can be immediately implemented at the bank and a fun-filled social event. Additional conference highlights include:

      David Kemp, president of Bankers Management Inc., is conducting two general sessions at the conference entitled, “The Next Two – Three Years in Community Banking,” and “Leadership That Gets Results!”
      Two networking sessions and the Business Meeting Luncheon, featuring a legislative update, elections of officers, and the Career Banker and Economic Educator of the year awards, are conducted at the conference.
      Social Event – Join us on March 18 from 7 – 9:30 p.m. for an evening of networking fun at the Hilton Hotel where Coole 2 Duel will take the stage. Back by popular demand, Coole 2 Duel will have a dueling piano show. Make sure you bring you requests! This event includes an appetizer buffet, cash bar, and of course, music. This event is included in your registration fee.

    Register Now!

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    CBAI's 30th Annual Capital Conference Registration Opens! Early Bird Ends March 26!

    Mark your calendar to attend the Community Bankers Association of Illinois’ 30th Annual Capital Conference. This important event will be held Wednesday, April 9th at The Hilton Hotel in downtown Springfield. Registration begins at 11 a.m., followed by lunch at 11:30 a.m.

    As an additional incentive to participate, Early Bird Registration is $100 per bank ($150 after March 26th). Bring as many officers, directors and employees as you would like for just one low price. In addition to lunch, a legislative reception with heavy hors d oeuvres is also included. A block of rooms has been reserved at The Hilton Hotel at the rate of $109 per night. To make reservations, contact The Hilton Hotel at 800/445-8667 and indicate that you are with CBAI.
    Register Now!

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    2013 Results: Illinois Community Banks Posted Profits and Grew Assets

    According to Bank Trends, a CBSC-preferred provider of a community bank peer analysis tool, 86% of Illinois community banks (those with assets less than $10B) were profitable in Q4, posting a median Pretax ROA of 0.81% and a median ROE of 5.48% during the quarter. Core earnings (calculated as pretax, pre-provision return on equity) were 11.73% in Q4, which was a decline from 11.9% in Q3 and 12.7% in Q4 2012.
    Read More.

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    Seven Takeaways from Q4 Results for Community Banks

    Many community banks are still struggling to regain their financial footing following the drying up of mortgage refinancings. But quarterly results from the first 200 community banks that have reported are providing some glimmers of hope.
    See Details.

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    Baker Market Update

    Federal Reserve Chairman Janet Yellen testified that the current, accommodative monetary policy shaped by Ben Bernanke would continue. A decline in retail sales last month surprised the experts, and industrial production fell.
    See Baker Market Update.

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    NFIB Survey: Small Business Confidence Treading Water

    The latest survey of small business owners conducted by the National Federation of Independent Businesses (NFIB) found that optimism barely increased in January to 94 which remains well below the pre-recession average of 100.
    See NFIB Report.

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    Dodd-Frank Doubles Down on Too-Big-to-Fail

    Economists Charles Calomiris and Alan Meltzer believe Dodd-Frank, rather than resolve the problem of too-big-to-fail banks, actually exacerbates the problem. They cite two major flaws: 1) its rules require regulatory enforcement instead of giving bankers incentives to maintain safety and soundness of their own banks; and 2) the regulatory framework attempts to prevent any individual bank from failing, instead of preventing the collapse of the payments and credit systems.

    The economists recommend placing the responsibility for absorbing a mega bank’s losses on banks and their owners by substantially raising the minimum ratio of the book value of their equity relative to the book value of their assets. They conclude that Dodd-Frank institutionalizes TBTF protection by permitting bailouts at the discretion of government authorities, financed by taxes on surviving banks and taxpayers. CBAI, a long-time proponent of downsizing the mega banks, generally concurs with these observations.
    See WSJ Article.

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    Managing the Pending Bubble in HELOCs

    During the next four years, an estimated $221 billion of home equity loans (HELOCs) will reach the end of their draw period, and regulatory agencies are preparing to evaluate these loans from a risk management perspective. Plante Moran offers guidance on how to manage risk associated with the pending HELOC bubble.
    See Plante Moran Article.

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    Ag Secretary: “New Farm Bill an Investment in Rural America”

    U.S. Agriculture Secretary Tom Vilsack stated last week that the new Farm Bill “…strengthens the farm safety net and ensures vital nutrition assistance for hardworking children and families during tough times. It closes loopholes and achieves much-needed reform, saving billions of dollars.”
    See USDA Release.

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    Farmland Values Increase in Seventh and Eighth Fed Districts, But at Slower Pace

    According to the Federal Reserve Bank of Chicago’s survey of District 7 farm banks, values for good farmland increased by 5 percent in 2013. However, Illinois experienced a 10 percent increase in 2013.
    See FRB Chicago AgLetter.

    Meanwhile, the survey of District 8 farm banks conducted by the Federal Reserve Bank of St. Louis found that good farmland values increased by 12.2 percent in 2013. See FRB St. Louis Release.

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    FHLB Chicago Releases 2013 Financial Highlights

    In a letter to stockholder institutions last week, FHLB Chicago President Matt Feldman announced strong financial performance for the bank in 2013. He emphasized two strategic goals: 1) building a member-focused bank that delivers needed products and services, and 2) building the Mortgage Partnership Finance (MPF) Program platform which is becoming accepted by most of the other FHLBanks as the mortgage aggregation platform for the FHLBank System.

    President Feldman indicated that net earnings at the FHLB Chicago grew to more than $2 billion in 2013 which enabled completion of its stock repurchase program.
    See FHLB Chicago Release.

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    New FFIEC Guidelines Emphasize the Importance of Social Media

    The Federal Financial Institutions Examination Council (FFIEC) released new guidance for financial institutions in dealing with social media in mid-December. The document, Social Media: Consumer Compliance Risk Management Guidance, did not impose new restrictions, but did clarify ways financial institutions must manage risk.
    Read More.

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    Comptroller's Handbook Revised

    The Office of the Comptroller of the Currency (OCC) recently issued the “
    Retirement Plan Products and Services” booklet of the Comptroller’s Handbook. This updated booklet replaces a similarly titled booklet issued in December 2007. This booklet provides updated guidance to examiners and bankers on retirement-plan products and services offered to customers of national banks and federal savings associations; explains the risks inherent in such products and services; and provides a framework for managing those risks.

    Note for Community Banks: This booklet applies to all banks that provide retirement-plan products and services.

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    CBAI Compensation Survey Now Online

    How does your bank compensation stack up? CBAI’s 24th Annual Officer Compensation Survey registers officer salary, incentives, benefits, total compensation and more. It also tabulates support personnel benefits and compensation, plus compensation to bank directors. Peer results will include information based on bank asset size and geographical location. Participating CBAI members receive the Survey results free-of-charge.

    For a .pdf of the Survey to use as a worksheet,
    Click Here.

    To complete the actual Survey, Click Here.

    For questions, contact Andrea Cusick, CBAI Senior Vice President Communications.

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    Survey: 45% of Americans Choose Banks Based on Fees

    Half of Higher Income Earners Prefer Great Rates

    According to a recent GoBankingRates consumer survey, 45 percent of respondents selected “low or no fees” as the most important banking feature or service offered by a financial institution. However, nearly 50 percent of higher income earners ($100,000 to $149,999) said great rates were of utmost importance.
    See GoBanking Rates Article.

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    Time to Plan Your Community Banking Week Celebration!

    Celebrate Community Banking Week 2014 the week of April 6-12! Free materials are available for the asking – just contact Bobbi Watson at 800/736-2224 or
    bobbiw@cbai.com.

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    What’s Special about Your Bank?

    Nominations are being taken now for the 2014 CBAI Award for Excellence and Innovation, Sponsored by BKD, LLP. In 2013, Legence Bank, Eldorado was the winner for its entry, Legence University, which provides an extensive financial-literacy curriculum for school-age children through adults. Does your bank have a special program, product, service, philanthropic effort, or civic project? Tell us about it! (Your bank need not be a BKD client to enter.)

    For more information about the BKD Award,
    Click Here.

    For a BKD Award nomination form, Click Here.

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    Harland Clarke: 12 Questions Banks Should Ask Instant Issue Providers

    According to a Federal Reserve Payments Study, annual debit card payments have continued to increase by double-digits and now account for 34.8 percent of noncash payments. This growth indicates a dramatic decline in the use of cash and checks as consumers embrace more card-based payment methods. With this increased focus on debit cards, it is critical for financial institutions to implement a business model that differentiates them from the competition.

    The process of personalizing, mailing, and activating cards associated with centralized issuance can take up to 10 days. Instant issuance enables new and existing customers to walk into a branch and, within seconds, receive a fully-functioning, active payment card. Thus, creating opportunities to increase activation rates and interchange revenue. The sooner the card is used, the faster financial institutions can benefit from an immediate return on their investment. A recent analysis of one bank’s use of instant issuance showed customers use their cards, on average, within the first 8 hours of receiving the card.

    When evaluating instant issue, banks should only work with vendors that meet certain standards to ensure that all data is protected. Harland, CBAI’s Preferred Provider for checks and marketing products, has developed a White Paper that address 12 questions bankers should ask instant issue providers.
    Read More.

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    Deposit Documentation Scheduled for February 24-27

    Each of the regulations, laws, or guidelines pertaining to deposit documentation have aspects that relate to the initial disclosures, but the emphasis of this class is on the how and why. Many things tellers and customer service representatives do are driven by these regulations, but too often circumstances can make it difficult for those employees to apply the regulations because they don't know the details. This seminar describes the requirements, explains in a straight-forward manner the basic principles, and then draws on real life experiences to explore how to apply those principles. Among the challenges covered are error resolutions, new-card issuance, replacement cards, delay of funds, honoring checks, split deposits, NSF checks, credit card checks, two-party checks, CD penalties, partial withdrawals, who can open an account, how can it be titled, who can I talk with about the account, identity theft, suspicious activity, and more. Tim Tedrick, CRCM, CRP, and partner at Wipfli LLP in Sterling, IL, leads this
    seminar.

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    Key Lending Strategies for Growth and Profitability Set for February 27

    Lending still hasn't fully recovered since the great recession. However, there is demand out there for the consumer, small business, and commercial loan, if you know where to look. This engaging
    one-day seminar looks at the ways a community bank can find these loan opportunities and find them faster than your competitors can. Strategy number one is to generate more loans from your existing customers. Strategy number two is to take opportunities from your competitors. The seminar focuses on tactics that will help you discover, qualify, and take all available loan opportunities. This entertaining and informative one-day seminar focuses on the concepts of identifying opportunities, pre-qualifying which customers and prospects make sense to work with, and which areas of loan opportunities you might consider for specialization. Duane F. Sobecki, CEO of Focused Results, LLC, a sales strategy, consulting, and training firm, leads this seminar.

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    Fighting Fraud Scheduled for March 3-5

    Fraud-prevention efforts within banks are often hampered by the inability to stay abreast of the speed at which fraud schemes appear, change, adapt, and strike. Not unlike a GPS device that recalculates immediately when the driver takes an unexpected turn, your bank should also have a structure in place to recalculate your fraud-prevention efforts to the constantly evolving fraud landscape. CBAI has partnered with Jim Rechel of The Rechel Group, Inc. to bring you a workshop that addresses the issues impacting all banks, including the fraud schemes and responses your bank must be aware of in today's world.
    Join us for this year's innovative program to learn proactive steps you can take to address the fraud-prevention program in ways you may not have imagined.

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    Register Today for CBAI’s Professional Forums and Groups!

    CBAI now offers six professional groups and forums, including CEO Forums, Senior Lender Forums, Operations/Technology Groups, Marketing Groups, Branch Manager Groups, and Human Resources Groups. Each Group or Forum meets quarterly, and are organized based on bank size and market to ensure that professionals have as much in common as possible without being competitors. The groups remain small (no more than 14 participants), and each group sets its own meeting dates and agendas. Consultants from a variety of firms may be invited to address the group on various issues. This expertise would cost thousands of dollars if you had to pay for it on a “real-time” basis. Participation in the Forums and Groups comes with a long list of benefits, including forming lasting relationships with non-competing professionals, sharing resources and ideas between meetings with a built-in network of your peers, solving your most pressing problems, and obtaining access to highly respected experts in your field. You will be able to improve your community bank’s practices, increase your understanding of the challenges and issues in your field, come away with resources and new ideas from every meeting, and grow professionally, as well as personally.
    More Information.

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    CBAI Announces 2014 Group Meeting After-Dinner Topic and Speakers

    CBAI leaders and executive staff are visiting 11 locations on the 2014 Group Meeting tour this spring. Bankers from more than 200 banks participate in these enjoyable and informative events each year. Consisting of an optional golf outing and a dinner meeting, Group Meetings also provide an excellent opportunity to get the latest information on key banking issues and catch up with friends and peers. (Note: Groups 1, 2 & 3 this year will include a lunch, meeting, and golf outing). Leading the after-dinner presentation are representatives from SHAZAM® Network, including Jim Ghiglieri, SVP of relationship development, Dan Kramer, SVP of marketing and merchant services, and Tom Miller, SVP of sales. Their presentation, “Changing Trends in Electronic Funds Transfer,” discusses how emerging trends in the payments arena put new demands on your institution. Discover current trends in EMV migration and the pros and cons of EMV deployment both at the ATM and to your cardholders. You also hear the truth about EMV and data breaches. Using data from existing products, you learn the latest in mobile commerce and alerting. The session also addresses merchant-transaction routing and the impact to your bottom line, and new ATM capabilities that can help reduce fraud and increase product marketing that will positively impact your institution. You also learn why keeping abreast of these changes maintains your reputation as a leader in your marketplace and helps meet the needs of your customers.
    See Group Meeting Schedule.

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    Mark Your Calendar for CBAI’s 40th Annual Convention & Expo

    Mark your calendar! You won't want to miss CBAI's 40th Annual Convention and Exposition. Plans are well underway and it promises to be our best one yet! Scheduled for September 18-20, 2014, it will be held at the Marriott Downtown in Chicago. Please
    click here to add a reminder to your Outlook calendar for CBAI's showcase event! Then read the upcoming issues of Banknotes, our bi-monthly magazine, and the various publications for complete details and registration forms. This year's convention features high-quality speakers and educational break-out sessions from which to choose, 100 firms exhibiting the latest in bank products and services; and outstanding social events including the Annual Golf Tournament, the Welcoming Reception and Live and Silent Auctions; and the fabulous Saturday Dinner Dance.

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