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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                            March 4, 2015

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Mercatus Center: “Scrap Regulations that Hurt Community Banks”
  • Neugebauer: Overregulation Harming Community Banks
  • Sheila Bair Proposes Regulatory Relief Solution for Community Banks
  • CBAI's 33rd Annual Call on Washington April 28 - May 1
  • ICBA Announces 2015 Community Banking Policy Priorities
  • Wall Street Bankers Shouldn’t Be Too Big to Prosecute
  • Community Banks: 28-Percent Increase in Earnings in Q4 2014
  • How Will Community Banks Drive Growth and Profitability in 2015?
  • Register Now for CBAI's 31st Annual Capital Conference - April 15, 2015
  • CBAI Compensation Survey Now Online
  • CBAI Urged Fed to Implement Rules to Improve Community Bank and Thrift Access to Capital
  • Regulators Issue Guidance Encouraging Youth Savings Programs
  • Investment News from THE BAKER GROUP
  • New Coalition to Develop Wireless ATM Standards
  • The Community Bank Revolution Continues
  • CBAI Announces Saturday Night Entertainment at 41st Annual Convention & Expo
  • Take This Week's CBAI Quick Poll
  • USDA Amends Handbook to Eliminate Term Limits on Guaranteed Operating Loans
  • Time Is Running Short! Community Banking Week Is the Week of April 5
  • 2015 CDD Spring Meeting Slated for March 17-18 in Bloomington-Normal
  • Global Cash Flow Scheduled for March 19-20
  • Community Bank Management of Interest Rate Risk and Investments Set for April 1st
  • The Nuts and Bolts for Today’s Bank Trainer Scheduled for April 7 & 8


  • Mercatus Center: “Scrap Regulations that Hurt Community Banks”

    Research conducted at the Mercatus Center at George Mason University has concluded that regulatory burdens allow big banks to flourish at the expense of small banks, and Congress should get rid of regulations that cost more than they are worth. Read More.

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    Neugebauer: Overregulation Harming Community Banks

    A leading member of Congress detailed the impact of excessive regulation on community banks in a recent op-ed. House Financial Institutions and Consumer Credit Subcommittee Chairman Randy Neugebauer (R-Texas) wrote that new regulations have increased bank consolidation and decreased consumer choice. “Some in Washington have forgotten Main Street in their quest to take down Wall Street,” Neugebauer wrote in the Lubbock Avalanche-Journal.

    Neugebauer, Senate Banking Committee Chairman Richard Shelby (R-Ala.) and Federal Reserve Board Governor Daniel Tarullo are slated to speak at ICBA’s 2015 Washington Policy Summit. CBAI and ICBA are calling on community bankers to gather in the nation’s capital for the April 28-30 event to engage policymakers firsthand and influence public policy. Read the Op-Ed.

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    Sheila Bair Proposes Regulatory Relief Solution for Community Banks

    The former FDIC chairman last week proposed a legislative solution she believes could significantly reduce regulatory burden on community banks. Sheila Bair recommended giving regulators the authority to exempt banks with less than $10 billion in assets from existing and new regulations.

    Sheila Bair noted that it would enable regulators to craft streamlined rules for community banks which would create a two-tiered regulatory system which CBAI, ICBA, and many congressmen already endorse. See AB Article.

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    CBAI's 33rd Annual Call on Washington April 28 - May 1

    Call on Washington is an annual lobbying trip organized by the Community Bankers Association of Illinois. For 32 years, community bankers from across Illinois have been traveling to Washington, D.C. to express their positions on issues to federal regulators and their members of Congress.

    This year’s Call on Washington will be in conjunction with ICBA’s 2015 Washington Policy Summit. Along with CBAI coordinated events, Illinois’ entire delegation is also invited to attend ICBA’s meetings and events. See More.

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    ICBA Announces 2015 Community Banking Policy Priorities

    ICBA announced its top legislative and regulatory priorities for 2015 at the ICBA Community Banking LIVE convention.

    ICBA’s top priorities for 2015 include community bank relief from crushing regulatory burden, reforming mortgage regulations and Consumer Financial Protection Bureau governance, preventing further retailer data breaches, and supporting consistent and transparent standards for evaluating community bank fair-lending practices. A complete list of ICBA’s 2015 Policy Resolutions is available on the association’s website. Read 2015 Policy Resolutions. Read ICBA Release.

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    "CBAI Connected to Community Banking"
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    Wall Street Bankers Shouldn’t Be Too Big to Prosecute

    Mega banks are again in the headlines for alleged wrongdoing including tax evasion, money laundering, price rigging, and manipulating foreign exchange rates. However, federal prosecutors have yet to file criminal charges against a senior mega bank executive. As so aptly noted by J. V. Rizzi, banking consultant and instructor at DePaul University in Chicago, crimes are committed by humans – not organizations. If prosecutors decline to jail or even fine individuals, criminal law hardly works as a deterrent.

    Since the financial crisis exploded in 2008 CBAI has railed against the intolerable double standard employed by regulators and federal prosecutors that favors mega banks over community banks. Rizzi believes that, by prosecuting senior executives of mega banks, illegal activity will be curtailed. Read Bank Think Article.

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    How Will Community Banks Drive Growth and Profitability in 2015?

    For the past few years, most community banks have focused their attention on survival. First it was the market crash of 2008, followed by the regulatory crackdown that began with Dodd-Frank in 2012. And while the aftereffects of the recession are still felt in some ways, and compliance remains one of the most expensive headaches bankers face, 2015 marks a shifting attitude amongst community bankers. In CSI’s 2015 Banking Priorities Survey, more than one-third of the more than 200 bank executives who responded cited driving growth and profitability as the greatest challenge facing their bank this year. Interestingly, driving growth was also seen as the biggest opportunity for 2015. Read More.

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    Community Banks: 28-Percent Increase in Earnings in Q4 2014

    Community banks reported a 28-percent increase in earnings in the fourth quarter from the previous year, the FDIC reported in its Quarterly Banking Profile. Income was driven by higher revenues and lower loan-loss provisions.

    The report also found that community bank loan balances grew even more than the industry with an 8.6 percent increase on strong growth in commercial and industrial loans, one to four-family residential mortgages, and commercial real estate loans.

    Overall, FDIC-insured institutions reported aggregate net income of $36.9 billion, down 7.3 percent from the previous year. This was due to a $4.4 billion increase in litigation expenses at the largest institutions and $1.6 billion decline in mortgage-related non-interest income.

    The Deposit Insurance Fund balance increased to $62.8 billion, up $8.5 billion in the quarter, and the DIF reserve ratio rose to 1.01 percent. See FDIC Release. Read AB Article.

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    Register Now for CBAI's 31st Annual Capital Conference - April 15

    Capital Conference is slated for Wednesday, April 15. Headquarters for the event will be the Hilton Hotel in downtown Springfield. This is your opportunity to make your voice heard with your local legislators and banking regulators!

    Registration is only $100 per institution (after April 1, $150) and covers the cost for ALL, so please bring as many officers, directors, and employees as you wish. Register Here.

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    CBAI Compensation Survey Now Online

    How does your bank compensation stack up? CBAI’s 25th 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.

    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, SVP Communications, at cbaicom@cbai.com.

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    CBAI Urged Fed to Implement Rules to Improve Community Bank and Thrift Access to Capital

    In separate comment letters to the Board of Governors of the Federal Reserve System, CBAI urged the prompt implementation of H.R. 3329 (“Act”) which would increase the Small Bank Holding Company Policy Statement asset threshold from $500 million to $1 billion, expand the scope to include previously excluded small savings and loan holding companies, and make the appropriate technical changes to regulatory capital-reporting requirements. Read Article.

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    Regulators Issue Guidance Encouraging Youth Savings Programs

    Regulators issued guidance encouraging federally insured depository institutions to offer youth savings programs. The guidance also provides answers to frequently asked questions related to the establishment of these programs. The guidance does not create any new regulatory policy or establish new industry expectations, the agencies said. Read the Guidance.

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    Investment News From THE BAKER GROUP

    Baker Market Update

    Unless the various Congressional factions can work out their differences, funding for the Department of Homeland Security will ended last week. Maybe it’s time to call on the persuasive skills of Francis J. Underwood. And while he’s at it, maybe Frank can do something about 4th quarter GDP. We've learned that the previously reported annualized growth rate of 2.6% has been revised downward to 2.2%. Maybe the Bureau of Economic Analysis (BEA) should have quit while they were ahead; or at least “less behind” the impressive but apparently unsustainable Q2 andQ3 performances. See More.


    Baker MBS Market Strategies
    MBA Mortgage Applications Fall Again, Down 3.5%

    Mortgage applications decreased 3.5% last week, led by a 7.5% drop in refinance activity while purchases increased 5%. This was the third consecutive decline in applications with refi volume down to the lowest level since January 2nd. Read More.

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    New Coalition to Develop Wireless ATM Standards

    Wireless technology is a part of most American consumers’ everyday lives. This convenient and innovative technology is no doubt here to stay, and its reach is definitely felt in the ATM industry. See More.

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    The Community Bank Revolution Continues

    In 2014, mobile deposit capture technology became a staple for more than 3,000 banks and 33 million Americans. With the rapid adoption and ongoing acceptance of banking with a smartphone and smartphone camera, the banking industry is poised for even more growth in mobile banking in the coming year. So what can community banks expect for mobile banking and mobile deposit capture in 2015? Read more.

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    CBAI Announces Saturday Night Entertainment at 41st Annual Convention & Expo

    The Saturday night entertainment at CBAI’s 41st Annual Convention & Expo, entitled “Community Bankers: Kickin’ It Country,” is famed country music band Diamond Rio. During the last 25 years, Diamond Rio has compiled a lengthy list of accomplishments, including sales of more than 10 million albums, a Grammy Award, a Dove Award, six Vocal Group of the Year wins (CMA and ACM), two Greatest Hits projects, nine studio albums including three certified Platinum® and five Gold®, five multi-week number-one singles, 22 Top 10 singles, an autobiography, and zero changes inband member. The band is best known for it's hit singles, including “Meet in the Middle,” “How Your Love Makes Me Feel,” “One More Day,” “Beautiful Mess,” “Unbelievable,” and “In a Week or Two.”

    Make plans now to attend CBAI’s 41st Annual Convention & Expo on September 17-19, 2015, at the Omni Hotel in Nashville, TN. Early-bird registration information will be available in March. See Saturday Night Entertainment.

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    Take This Week’s CBAI Quick Poll

    Take this week’s Quick Poll if your bank currently offers a personal financial management solution (PFM). Click Here to view results of previous polls.

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    USDA Amends Handbook to Eliminate Term Limits on Guaranteed Operating Loans

    The USDA Farm Service Agency issued an amendment to its Farm Loan Programs Handbook eliminating term limits on guaranteed operating loans, which ICBA and CBAI recommended as part of the 2014 farm bill. The amendment also increased FSA’s guarantee of Conservation Loans to 80 percent and changed the FSA’s definitions of “farmer,” “beginning farm” and “debt forgiveness.” Read Amendment.

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    Time Is Running Short! Community Banking Week Is the Week of April 5

    Order your bank’s FREE materials by contacting Bobbi Watson at bobbiw@cbai.com or 800/736-2224.

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    2015 CDD Spring Meeting Slated for March 17-18 in Bloomington-Normal

    The CDD Annual Spring Meeting scheduled for March 18, 2015, at the Bloomington-Normal Marriott Hotel & Conference Center, Normal, is geared toward honing professional and banking skills. In addition to the educational offerings, this year's meeting includes a fun and great networking opportunity at the hotel the evening of March 17 with a social event. The Spring Meeting begins with the popular Networking Session where bankers have an opportunity to engage in a roundtable discussion with other bankers sharing their job responsibilities. This is followed by a general session with John Wright entitled, “The Five Ups” followed by a set of breakout sessions: “The Rewards of Choosing A Career In Community Banking;” “Why the Bank Strategic Plan Matters to ALL Bank Employees;” and “Seven Habits of a Highly Effective Audit Committee.” The Business Meeting Luncheon which includes a CBSC services update by CBSC Vice President Services Mike Duke. The afternoon agenda features the following breakout sessions: “The TILA-RESPA Integrated Disclosures – Will the Integrated Loan Estimate Really Reduce Consumer Confusion?;” “The One-Minute Leader;” and “ALCO Committee Basics: Five Steps to Better Earnings & Lower Risks.” Next, the CDD Fall Meeting features a second Networking Session to allow you to participate in more roundtable discussions on a variety of topics. The Spring Meeting concludes with the general session from John Wright titled, “The River of Resistance.”

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    Global Cash Flow Scheduled for March 19-20

    During the most recent financial crisis, both federal and state regulators frequently commented that community bankers could have done better at global cash-flow analysis. Thus, to assist loan officers in sharpening their skills, CBAI has designed this one-day seminar. It utilizes the Uniform Cash Flow Analysis (UCA) method and provides guidance in calculating global cash-flow analysis for those entities that must rely on excess cash generated by their owners to service the business entity’s commercial debt. The use of several cases is provided in order to demonstrate global cash-flow analysis, including a case for the self-employed borrower with interests in several business entities. Upon completion of this course, attendees will have a good understanding of how cash flow is calculated and more importantly, how to interpret its meaning. Leading this seminar is Jeffery Johnson, president and founder of Bankers Insight Group, Atlanta, GA, who has more than 25 years’ experience in the banking field.

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    Community Bank Management of Interest Rate Risk and Investments Set for April 1st

    Banks are contending with an extended low-rate environment that has put pressure on margins, challenged bank managers, and enticed some institutions to “reach for yield” in higher-risk assets. Meanwhile, balance-sheet mix changes have raised additional concerns, and regulators are now focusing attention on interest-rate risk like never before. This seminar discusses optimal strategies, necessary reporting tools, and recommended processes for management of community-bank investments and interest-rate risk. Trends in the rate environment and bank balance sheets are explored, and suggested strategy and tactics to meet the performance challenges while staying within prudent risk tolerance guidelines are offered. A wide range of issues related to regulatory compliance and prudent management practice are also addressed. Jeffrey Caughron and Ryan Hayhurst, both with THE BAKER GROUP, Oklahoma City, lead this seminar.

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    The Nuts and Bolts for Today’s Bank Trainer Scheduled for April 7 & 8

    Today’s bank trainers need a “real-world” foundation to survive and thrive in today’s banking world. This two-day workshop focuses on methods, tools, skills, and resources to ensure that training is valued and “results-oriented.” It is a comprehensive training program for those new to training and a targeted refresher for seasoned trainers. Attendees learn how to use a variety of proven training methods and approaches to make training, including regulatory and compliance training, interactive, energized, “real-world,” and enjoyable; develop an annual training plan; respond to the ever-changing regulatory environment; refine training and facilitation skills; discover how to get a return on limited training investment dollars; improve training and facilitation skills, and much more. Leading this seminar is Dianne Barton, founder and president of Performance Solutions, Inc., Kennesaw, GA, a training and consulting company that specializes in providing solutions to the key challenges facing community banks today in attracting, selling, and servicing their customers.

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