Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois Community Bankers Association of Illinois
 
      A Bi-Weekly News Bulletin for CBAI Members                 March 26, 2008 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois


  • Federal Reserve Takes Dramatic Steps to Stabilize Financial System
  • Concerns Expressed Over Bailout of Another Too-Big-To-Fail Giant
  • Illinois Community Banks are Safe and Sound
  • Chicago Fed National Activity Index (CFNAI) Released
  • Baker Market Update
  • FDIC Keeps Deposit-Insurance Assessment Rates Level
  • CBAI Group Meetings Rev Up Soon
  • Tips on How To Deal with Regulators
  • CBAI Officer Compensation Survey Deadline Nears
  • Shazam Welcomes New V.P. of Corporate Communications
  • Register Now for SHAZAM's 2008 EFT Forums
  • Proactive Ideas To Help Keep Health-Insurance Premiums Down
  • Changes in Governmental Relations Staff
  • CBAI Marketing Conference Provides Profitability-Focused Education
  • CBSC Partners Celebrate 20th Anniversaries




  • Federal Reserve Takes Dramatic Steps to Stabilize Financial System
    During the past 12 days the Federal Reserve has instituted several emergency measures to shore up fragile financial markets that have been rocked by the subprime lending crisis. Here are the series of actions and events:

      Fed Provides Bear Stearns Emergency Funding
      On Friday, March 14, financially strapped Bear Stearns, one of the nation's largest underwriters of mortgage bonds and the fifth-largest investment bank, received a 28-day emergency liquidity loan from the Federal Reserve to shore up its precarious cash position. Using a 1930s-era law giving the central bank discretion to take such action to protect the overall financial system, the Fed agreed to assume the credit risk of Bear Stearns collateral. In a statement, the Fed said it "is monitoring market developments closely and will continue to provide liquidity as necessary to promote the orderly functioning of the financial system."

      Fed Cuts Federal Funds and Discount Window Rates
      In separate actions on Sunday, March 16 and Tuesday, March 18 the Federal Reserve's Federal Open Markets Committee (FOMC) cut the federal funds overnight rate by 75 basis points to 2.25 percent and the discount emergency lending rate by 100 basis points to 2.50 percent. For direct loans the Fed provides financial institutions. The Fed has cut rates by an aggressive 300 basis points since September. "Recent information indicates that the outlook for economic activity has weakened further," the FOMC announced in a statement.

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    Concerns Expressed Over Bailout of Another Too-Big-To-Fail Giant

      Banking Professor Art Wilmarth Urges Action and Offers Reforms
      Earlier this year Art Wilmarth, professor at George Washington University Law School and periodic consultant to CBAI, urged Congress to adopt three important reforms to reduce the potential for systemic risk produced by financial conglomerates. These noteworthy recommendations are contained in the attached article released on February 1, 2008.

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    Illinois Community Banks are Safe and Sound
    Illinois consumers should rest comfortably during this turbulent economic period because their local community banks are operating safely and soundly, according to Robert Wingert, president of the Community Bankers Association of Illinois (CBAI).
    Click here for news release.

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    Chicago Fed National Activity Index (CFNAI) Released
    The CFNAI, a monthly index designed to better gauge overall economic activity and inflationary pressure, showed sluggish economic activity in February. All four broad categories of indicators made negative contributions to the index last month. For the complete report,
    click here.

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    Baker Market Update
    With help from the New York Federal Reverse, JP Morgan agreed to acquire Bear Stearns at $2.35/share on Sunday, at least temporarily averting a financial meltdown that could have ensued had they been forced to file bankruptcy in the wake of a modern day "run on the bank" that drained their liquidity position.
    Click here to read more.

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    FDIC Keeps Deposit-Insurance Assessment Rates Level
    The FDIC board of directors voted to keep the assessment rates charged to insured banks and savings associations for the Deposit Insurance Fund unchanged for 2008. The existing assessment rates schedule is 5 to 43 basis points per year. Risk Category 1 institutions will be charged a rate between 5 and 7 basis points. With the agency estimating insured deposit growth of between 3 and 4 percent in 2008 and 2009, under the existing rate schedule the DIF could reach the board's Designated Reserver Ratio target of 1.25 percent at the end of 2008 or early in 2009.

    While the
    FDIC's assessment rate didn't change, most banks will be paying much more for deposit insurance in 2008 as their assessment credits are used up. The industry average assessment rate, net of credits, is estimated to be 3.8 basis points in 2008 compared to 0.9 basis points in 2007. Approximately 60 percent of insured institutions started 2008 with credits still available, but that percentage will drop significantly by the end of the year.

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    CBAI Group Meetings Rev Up Soon
    There's a CBAI Group Meeting coming to your area soon. For a schedule of meetings, click here.

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    Tips on How To Deal with Regulators
    Banks' asset quality and other issues are affecting liquidity and safety in many banks. Philip K. Smith of CBAI associate member firm Gerrish McCreary Smith shares some tips on how to deal with the regulators in this uncertain time. For the complete article,
    click here.

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    CBAI Officer Compensation Survey Deadline Nears
    The 18th Annual CBAI Officer Compensation Survey will provide your bank with officer salaries, incentive, and benefits by bank asset size and geographical location. In addition, it includes support personnel pay, directors' fees, vacation information, and more. Results are FREE to CBAI member banks that participate. The deadline was April 2, but has been extended to April 18.To access the Survey,
    click here.

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    Shazam Welcomes New V.P. of Corporate Communications
    SHAZAM, Inc., one of the last remaining member-owned and -controlled electronic funds transfer (EFT) networks, is pleased to announce James P. Ghiglieri Jr. will join SHAZAM as the vice president of corporate communications on Thursday, March 27, 2008.
    Click here to learn more.

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    Register Now for SHAZAM's 2008 EFT Forums
    SHAZAM's 2008 EFT Forum, Reaching the Pinnacle of Success, has something for everyone. The forum has captivating and entertaining keynote speakers along with industry experts discussing timely industry specific topics. Sessions during this one-and-one-half day forum include topics on: emerging industry trends in the electronic payments industry; plus, a variety of marketing topics for developing an effective low-cost marketing plan and operational topics to help your bank with a variety of issues including exception item processing, security, and fraud mitigation.

    The forums will be held:
    April 3-4 April 29-30
    Chateau on the Lake Embassy Suites on the River
    Branson, MO Des Moines, IA

    For registration and additional information visit
    SHAZAM.

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    Proactive Ideas To Help Keep Health-Insurance Premiums Down
    Is your bank vulnerable to higher health-insurance renewal rates? There are many factors that a bank can address when it comes to reducing the exposure to adverse medical premium increases.
    Click here for two proactive ideas to help reduce claims that can tend to stabilize those pesky renewal rates.

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    Changes in Governmental Relations Staff
    After a productive nine-year tenure as CBAI's vice president of governmental relations, Bryan Soady has accepted the position of director of governmental relations with the Illinois Chiropractic Society (ICS). Effective March 1, Bryan became the top lobbyist for the ICS.

    As a result, CBAI is pleased to announce the hiring of Megan Stieren to assume the responsibilities of vice president of governmental relations. She served on the House Republican staff and began her career with CBAI on March 24.

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    CBAI Marketing Conference Provides Profitability-Focused Education
    CBAI's second annual Marketing Conference, "Marketing for Greater Profitability," scheduled for April 30, 2008 at the Crowne Plaza in Springfield, is designed to help educate community?bank marketing professionals on generating lucrative results. Joe Sullivan, founder of Market Insights, provides the keynote presentation entitled "Change Your Mindset." This session challenges conventional thinking; it challenges bankers who may be stuck in old ways to think and act differently as a means to generate results that will truly impact the bottom line. Other topics covered include using internal marketing to motivate and empower employees, delivering positive customer service experiences to help your institution grow, attracting and keeping affluent customers, drawing more visitors to your website, as well as effective integration of marketing and sales. For more information or to register,
    click here.

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    CBSC Partners Celebrate 20th Anniversaries
    This year, four CBSC recommended firms commemorate their 20th anniversaries of serving community banks.

    Welch Systems, provider of DeLaRue cash handling systems; Harland Clarke, provider of quality check printing products; Wolters Kluwer Financial Services; and Jeffrey Rice Audit Consulting, provider of loan audit-review services. For the full story,
    click here.

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    CBAI
    UPCOMING EVENTS   
    CBAI's PROFESSIONAL DEVELOPMENT PROGRAMS THROUGH APRIL 30

     Investments and Interest Rate Risk: Management for High Performance

     Information Technology Workshop

     Consumer Loan Documentation

     Commercial Loan Documentation

    TELEPHONE/WEBCASTS THROUGH APRIL 30

     Compliance in Advertising

     Identification & CIP Issues

     Regulatory Hot Buttons for DeNovo Banks

     BSA Risk-Assessment Check-up

     Loan Participations for Community Banks

      Core-Processor Evaluation & Selection

    OTHER NOTEWORTHY EVENTS

    Community Banking Week in Illinois
    4/6 - 4/12


    CBAI 18th Annual Officer Compensation Survey Deadline EXTENDED TO 4/18

    CBAI's 26th Annual Washington Visitation: 4/29 - 4/30, Mayflower Renaissance Hotel, Washington, D.C.

    CBAI's 34th Annual Convention:
    "Hometown Heroes", 9/11-13, 2008
    Crowne Plaza Hotel,
    Springfield


    CBAI Group Meetings 4/21 - 6/24



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