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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                                    April 12, 2017

Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Registrations Now Open for Group Meetings 5, 6, 8, 10, 11, 12, & 13!
  • CBAI and ICBA-Advocated Holding Company Relief Introduced
  • Sign Up Today for CBAI's 35th Annual Call on Washington!
  • Stop the Credit Union Power Grab
  • FDIC: Community Bank Deposits, Office Count Both Up
  • Regulatory Implications for Banks at $500 Million and $1 Billion in Assets
  • Deadline for CBAI Compensation Survey Extended - This Is Your Last Chance!
  • CECL: Your Step-by-Step Guide to Compliance by 2020-21
  • Opinion: Want to Ease Regulatory Burden? Reform Congress
  • Nine “Hot Spot” Issues for Examiners on CRE Loans
  • Investment News From THE BAKER GROUP
  • CBAI's 33rd Annual Capital Conference Re-Cap!
  • FDIC Savings Pilot Helps US Students and Banks
  • Handke Testifies on Need for Enhanced USDA Credit Programs
  • BankTrends Launches New Efficiency Ratio Tool
  • CBAI Legal: Federal Courts’ Limited Review of State Foreclosure Judgments
  • CBIS Nicoud: Negligent Entrustment of a Vehicle is Well-Recognized Tort in Illinois
  • New Information for W-2 Scam Victims
  • Register Today for Early-Bird Pricing for CBAI's 43rd Annual Convention!
  • Loan Documentation for Support Staff to be Held April 18-20
  • Writing an Effective Credit Memo Scheduled for April 21
  • Technology Conference Slated for April 25
  • Community Bankers School Set for July 16-21

  • Registrations Now Open for the Group Meetings 5, 6, 8, 10, 11, 12, & 13!

    CBAI leaders and executive staff are visiting 11 locations on the 2017 Group Meetings Tour this spring. Bankers from nearly 200 banks participate in these enjoyable and informative events each year. For this year’s after-dinner presentation, you will hear from one of two experts from SHAZAM Network on either the topic of creating a robbery program at your bank or the topic of developing beneficial relationships with the local media. The opening portion of each Group Meeting will focus on critical legislative and association issues. CBAI President Bob Wingert will provide updates on Association projects and community banking in general, and Senior Vice President of Governmental Relations Kraig Lounsberry will offer an up-to-the-minute report of banking-related legislative activities.

    Consisting of an optional golf outing and a dinner meeting, each Group Meeting provides an excellent opportunity to get the latest information on key banking issues and catch up with friends and peers. (Note: The Groups 1, 2 & 3 meeting follow a different format). Make plans now to attend! See Group Meetings Schedule. See Group Meetings Agenda. See After Dinner Presenter Information.

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    CBAI and ICBA-Advocated Holding Company Relief Introduced

    Legislation to raise the consolidated assets threshold under the Small Bank Holding Company Policy Statement was introduced in the House by Representative Mia Love (R-Utah). The Small Bank Holding Company Relief Act (H.R. 1948) would raise the threshold from $1 billion to $10 billion in assets, implementing a key provision of ICBA’s Plan for Prosperity regulatory relief platform which CBAI supports.

    The policy statement allows qualifying holding companies to raise and carry more debt and potentially downstream the proceeds to their subsidiary banks, allowing more holding companies to raise capital. While the threshold was raised from $500 million to $1 billion in December 2014, CBAI and ICBA have long held that it should be significantly higher to recognize the larger average asset size of today’s community banks. See Plan for Prosperity.

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    Sign Up Today for CBAI's 35th Annual Call on Washington!

    This Congressional Session holds more potential for meaningful regulatory relief than any other in the past 30 years. We need your participation in a grassroots campaign by attending CBAI's 35th Annual Call on Washington which will be held at the Grand Hyatt Washington from April 30 to May 3, 2017.

    CBAI bankers from across Illinois will travel to Washington, D.C. and call on their members of Congress to support issues of importance to Illinois community banks. YOUR VOICE DOES MAKE A DIFFERENCE! Now is the time to get involved.

    Again this year our Call on Washington will be held in conjunction with the ICBA's 2017 Capital Summit. Along with CBAI coordinated events, our entire delegation will attend ICBA's meetings and events. CLICK HERE for more information and to register.

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    Need help marketing your new mobile banking app? Have some outdoor ad space that needs updated with clever marketing slogans and beautiful fresh designs? Want to reach a broader audience and advertise through your ATMs? You can get all this and more from SHAZAM’s award-winning agency, SHAZAM Marketing Services. Our entire team of experienced professionals can offer you top-tier agency services at rates that won't break your budget. Be curious about SHAZAM Marketing Services and check us out!

    Stop the Credit Union Power Grab

    CBAI and ICBA are calling on community bankers to express opposition to the National Credit Union Administration’s proposal to allow tax-exempt credit unions to raise alternative capital. Community bankers can use ICBA’s Be Heard grassroots website to submit a custom comment letter telling the NCUA that enough is enough.

    The NCUA’s proposed rule on alternative capital would undermine credit unions’ mutual ownership structure, allow outside investors to leverage the tax subsidy, and fuel runaway growth of an industry that has already outgrown its original purpose.

    The customizable letter notes that nearly unchecked commercial lending and field of membership powers are already an abuse of the costly and unfair credit union tax subsidy—making this plan the NCUA’s third strike. To send a letter, please click on the following link and use your email address and zip code to access the letter. Contact the NCUA Today!

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    FDIC: Community Bank Deposits, Office Count Both Up

    Last week, the FDIC released the latest issue of its Quarterly Banking Profile and Report. According to the Report, community banks, which represent 92 percent of insured institutions, reported net income of $5.6 billion in the fourth quarter of 2016, a 10.5% increase over 2015. The Report noted that, “the increase was driven by higher net interest income and noninterest income, which was partly offset by higher loan-loss provisions and noninterest expense.” The Report also cited an 8.3 percent 12-month growth rate in loan balances at community banks, indicating that “community banks accounted for 43 percent of small loans to businesses.” In its analysis, the FDIC observed that, although deposits across the banking profession grew, the number of non-community bank offices actually shrank. By contrast, the number of community bank offices increased during 2016. See FDIC Quarterly Profile. Read FDIC Analysis.

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    Regulatory Implications for Banks at $500 Million and $1 Billion in Assets

    There are several regulatory changes for community banks that cross the $500 million and $1 billion in assets thresholds. These regulatory implications should be discussed by the bank's board of directors well in advance of attaining the thresholds.

    The attached memorandum provides community bankers with an overview of those additional regulatory requirements. Read More.

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    Deadline for CBAI Compensation Survey Extended - This Is Your Last Chance!

    Is your bank competing effectively with your peers to attract, reward and retain the top talent in today’s job market? What is your strategy to win the race for qualified leadership and employees?

    Complete the 2017 CBAI Compensation Survey now and receive the confidential results at no cost. National compensation expert BalancedComp has partnered with CBAI to:

    1. ease the process of participating - possible to complete in under 30 minutes
    2. increase the survey's relevance to today’s banking environment
    3. enhance the resulting data's usability

    Thanks to sponsor IZALE Financial Group, the results are free for CBAI Members that complete the survey. Click Here to begin the Survey. Click Here to print a paper copy of the Survey to use as a worksheet. Click Here for a list of benchmark positions.

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    CECL: Your Step-by-Step Guide to Compliance by 2020-21

    In the not-too-distant future, financial institutions will be required to account for loan-loss reserves in a fundamentally different way, in other words: CECL. To help your institution prepare to implement the FASB’s CECL approach to the Allowance for Loan and Lease Losses (ALLL), CSI has developed a multi-year plan to guide you through the process, one step at a time. Read More.

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    Opinion: Want to Ease Regulatory Burden? Reform Congress

    A long-time Washington banking lawyer believes regulatory burden can best be eased by reforming Congress. He notes that bankers have complained about the regulatory burden since long before financial crisis. The savings and loan crisis in the '80s and '90s resulted in an avalanche of rules and regulations. Banking regulation today is far more pervasive than it was back then.

    And yet, the proposed solutions for dealing with the regulatory burden tend to be not much better than the unnecessary laws and rules enacted in the first place. Efforts at regulatory “reform” and regulatory “relief” often ignore the source of what led to the overregulation in the first place: Congress.

    William Aukamp says Congress would do well to require a more deliberative process when enacting legislation, perhaps in the form of a Legislative Procedure Act, along the lines of the Administrative Procedures Act. Providing the general public with an opportunity to comment on pending legislation — and requiring lawmakers to review those comments — would allow experts to weigh in on the merits of the legislation under consideration. He adds that Congress should also be required to reveal how the need for the legislation was determined. Read More.

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    Nine “Hot Spot” Issues for Examiners on CRE Loans

    Commercial real estate lending continues to receive regulatory scrutiny and reminders for financial institutions to practice solid risk management. FDIC officials in March outlined several types of weaknesses in loan underwriting, administration, and oversight practices that are emerging at some banks with CRE portfolios.

    In its latest “Supervisory Insights” publication, the FDIC reiterated the importance of sound credit risk management practices in light of rapid growth in CRE portfolios at some institutions and in light of some institutions operating with a generally higher risk profile. Read Sageworks Blog.

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    Investment News From THE BAKER GROUP

    Baker Market Update

    Recently America’s overnight missile barrage into Syria scooped the Bureau of Labor Statistics and garnered much of the world’s focus. Expect reports on consumer inflation and retail sales. See Baker Market Update.

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    CBAI's 33rd Annual Capital Conference Re-Cap!

    On Wednesday, April 5, 2017, nearly 150 community bankers and friends of community banking gathered in Springfield to meet face-to-face with state legislators, constitutional officers and regulators on legislative issues currently facing the community bank profession. This popular annual event, in its 33rd year, began with the traditional legislative luncheon. IDFPR Secretary Brian Schneider kicked of the event with an informative report on IDFPR and the division of banking. Schneider was followed by the luncheon keynote speaker, political columnist Rich Miller. Miller addressed the current budget crisis and the corresponding political and economic realities.

    Kraig Lounsberry, Senior Vice President of Government Relations, then addressed the delegation on several pieces of banking legislation including a CBAI initiative to clarify the law that financial institutions and their employees do not need to be licensed to enroll borrowers in credit insurance policies. He also noted bills CBAI opposes, including a bill to limit ATM fees to one dollar, a measure to require mandatory supplier diversity reporting, and a proposal to create a state-owned bank. See Event Highlights.

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    FDIC Savings Pilot Helps US Students and Banks

    Financial institutions, schools and non-profit organizations in the US can collaborate to successfully teach children about savings and other positive financial habits – knowledge they can use as a sound foundation as they grow older, according to results of a two-year pilot by the Federal Deposit Insurance Corporation (FDIC). Read More.

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    Handke Testifies on Need for Enhanced USDA Credit Programs

    Steve Handke, president and CEO of Union State Bank of Everest, KS, testified for the ICBA that implementing more robust and better-financed USDA-guaranteed lending programs through the 2018 farm bill will help avoid a farm-credit crunch and prevent an exodus of producers from the ag sector. Handke is a board member of SHAZAM, a preferred service provider of Community BancService Corporation. See Testimony.

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    BankTrends Launches New Efficiency Ratio Tool

    BankTrends, CBSC's Preferred Partner for bank peer group and market analysis, has launched a new Efficiency Ratio Calculator that enables community bankers to easily calculate the effect prospective changes in income and expenses will have on their bank's Efficiency Ratio.

    The Efficiency Ratio, a measure of overhead as a percent of revenue, is a hot topic for most community bankers. It is a quick and easy measure of bank management's ability to control operating costs while generating income. An increase in the bank's Efficiency Ratio means an increase in operating expenses, a decrease in income, or both.

    When bankers think of efficiency they often think of expenses, but the other side of the equation, income, is just as important. For example, how would raising loan rates 25 basis points impact the bank's earnings and Efficiency Ratio? How about calculating the impact of growing the bank's loan portfolio 10% or raising deposit-related fees?

    Now, CBAI member banks can easily calculate the impact different income and expense scenarios will have on their bank's Efficiency Ratio. For more information and to give it a free , no-obligation test-drive, please go to

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    CBAI Legal: Federal Courts’ Limited Review of State Foreclosure Judgments

    A March 29, 2017 opinion of the U.S. Court of Appeals for the Seventh Circuit concluded that a mortgagor whose foreclosure case had been resolved in the state court system has very little chance of resurrecting his or her defense to foreclosure by making an appeal to the federal court system. Read Most Recent CBAI LEGAL.

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    CBIS Nicoud: Negligent Entrustment of a Vehicle is Well-Recognized Tort in Illinois

    Banks carry considerable potential liability when employees with a history of negligent driving get behind the wheel. Put another way, liability under negligent entrustment occurs when the bank bestows trust to an employee they should have known was untrustworthy. Read More from CBIS Nicoud.

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    New Information for W-2 Scam Victims

    The IRS has established a process that will allow businesses and payroll service providers to quickly report any data losses related to the W2 scam currently making the rounds. See details at Form W2/SSN Data Theft: Information for Businesses and Payroll Service Providers.

    If notified in time, the IRS can take steps to prevent employees from being victimized by identity thieves filing fraudulent returns in their names. There also is information about how to report receiving the scam email. As a reminder, tax professionals who experience a data breach also should quickly report the incident to the IRS. Tax professionals may contact their local stakeholder liaisons. See details at Data Theft Information for Tax Professionals.

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    Register Today for Early-Bird Pricing for CBAI's 43rd Annual Convention!

    Registration is now open for CBAI’s 43rd Annual Convention & Expo, scheduled for September 14-16, 2017, at the Crowne Plaza in Springfield, IL. Expert speakers on the hottest community banking topics fill an education agenda featuring 20 break-out sessions. This year's Opening Breakfast Speaker is John O’Leary. At the age of nine, John created a massive explosion in his home and was burned on 100% of his body. He was given 1% chance to live. His epic story of survival, emotional story-telling, unexpected humor, and authenticity make his presentations truly transformational. Also on the agenda is the Welcoming Reception with BancPac Live and Silent Auction, a jam-packed exhibit hall with more than 90 booths, the Annual Business Meeting Luncheon, and much more. The Closing General Session features Jeff Havens, one of the most in-demand speakers in North America. In his hysterical keynote, Us vs. Them, you'll learn a simpler way of looking at your own generational picture, and you'll also learn how to understand, recognize, and resolve every generational issue facing today's workforce.

    Don't wait! Register today for early-bird pricing at CBAI's annual showcase event! You won't want to miss it! Register Here!

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    Loan Documentation for Support Staff to be Held April 18-20

    Loan documentation is a critical component in lending. After the decision to make a loan has been made, the next step is the documentation-closing process. This part of the lending process is essential in order to avoid loan losses due to poor documentation. Many community banks assign this important responsibility to loan administrators with input from the sponsoring loan officer. If not performed properly, poor documentation can cause loans to be adversely classified, even if the underlying credit is sound or if the loan is performing as agreed. The purpose of this seminar is to provide participants with a good understanding of the loan-documentation process. Participants are exposed to the five steps in the loan-documentation process, which include identifying the borrower, identifying and documenting the collateral, evidencing the debt, attaching the collateral, and perfecting the security interest. Leading this seminar is Jeffery Johnson, president and founder of Bankers Insight Group, Atlanta, GA, who has more than 36 years' experience in banking.

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    Writing an Effective Credit Memo Slated for April 21

    After a detailed credit analysis of a loan request has been performed, it is now time to communicate your findings in writing. Credit memoranda are a primary means of communications within the banking field. In writing effective credit memoranda, it is not what you say that commands attention, but how you say it. Credit memoranda serve three functions: they provide information on the condition and status of a customer relationship; they provide a record of thoughts and actions; and they support or recommend action. The purpose of this course is to teach skills required to write an effective credit memo, placing emphasis upon factors or trends that are important without the need to state the obvious. In short, the credit memo should present relevant, material facts and the writer's thoughts and opinions. Leading this seminar is Jeffery Johnson, president and founder of Bankers Insight Group, Atlanta, GA, who has more than 36 years' experience in the banking field.

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    Technology Conference Slated for April 25

    The 2017 Technology Conference features targeted solutions to meet the demands of community banks. Participants benefit from informative general and breakout sessions and discussions with their peers on the hottest technology issues. With the nation’s leading financial-service providers showcasing the latest products, participants also find solutions in the Exhibit Center. The 2017 Tech Conference is designed for you, your management team, and your operations staff. Anyone who values efficiency, understands the ongoing need to stay informed, wants to explore the latest in technology, and appreciates the increased productivity that technology can achieve benefits from this conference. If you are responsible for leading your organization to profitability, you will benefit by attending this year’s Tech Conference. 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.

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    Community Bankers School Week Set for July 16-21

    The Community Bankers School, which consists of two, one-week sessions over a two-year period at Illinois Wesleyan University in Bloomington, will allow you to immediately contribute to the overall success of your bank, and give you the knowledge necessary to get ahead. The School features a nationally recognized faculty, an updated curriculum, and timely topics. Topics covered during this intense week for Class I participants include compliance, accounting, commercial and consumer loan documentation, collections, bank security, auditing, investments, and technology, while Class II focuses on management aspects. However, the benefits extend beyond the classroom with outside case studies, an invaluable student notebook with supplemental materials, as well as networking opportunities with peers, instructors, and senior bankers. You will gain a background and experience for broader responsibilities and greater effectiveness, as well as insight into a community bank’s overall operations responsibilities. The 2017 session opens Sunday, July 16, and concludes Friday, July 21. For more details, click on the attached file or visit today! The deadline to enroll is July 1, 2017. Talk to your employer and register today!

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    THROUGH 05/31/2017






    Finer Points Blog

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