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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 27, 2016

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Join Your CBAI Colleagues in Washington with Virtual Policy Summit
  • Fine: Community Bank Voice Must Be Heard
  • FDIC Approves Revised Community Bank Assessment Formulas
  • Regulators’ Incentive Pay Plan Exempts Some Community Banks
  • Goldman Settlement Proves Too Big to Fail Is Alive and Well
  • Community Banks Continue to Dominate Small Business Financing
  • Which Small Bank Has the Biggest ROAE?
  • Congressman Quigley Introduces Community Bank Advisory Committee Legislation
  • Registration Now Open for CBAI's Annual Group Meetings
  • Peer-To-Peer Lending, Friend or Foe?
  • ICBA Issues Cyber Insurance White Paper
  • Index: Rural Economy Continues to Sag
  • Investment News From THE BAKER GROUP
  • Midwest Office Can Save Banks Up to 55% on Everyday Office Supplies!
  • Dell Discounts Up to 45% Ends Soon
  • CBIS Nicoud: DOL Fiduciary Rule Will Impact Third-Party Investment Advisors
  • CBAI LEGAL: Ex-Wife’s Equitable Interest Trumps Attorneys’ Fees
  • Deadline for Nominations for the Excellence and Innovation BKD Award Is June 1
  • Register Today for Early-Bird Pricing at CBAI’s Convention & Expo
  • Auditing TRID Set for May 2
  • ACH for Beginners Scheduled for May 3 & 11
  • CBC: Compliance Management Systems and Risk Assessment Slated for May 3 & 4
  • Commercial and Industrial Lending in Today’s Competitive Market Set for May 4
  • Call Report Seminar Planned for May 4


  • Join Your CBAI Colleagues in Washington with Virtual Policy Summit

    With community bankers gathered for the ICBA Washington Policy Summit this week, CBAI member bankers back home can join in the outreach today with ICBA’s Virtual Policy Summit. ICBA is encouraging community bankers across the country to amplify the industry’s voice by sending in the custom email message to their members of Congress today.

    Community bankers are in the nation’s capital through tomorrow to meet with federal regulators and their members of Congress on regulatory relief, data security, taxpayer subsidies for credit unions and the Farm Credit System, and crop insurance. CBAI has a delegation of 60 bankers and guests from nearly 40 banks in the nation's Capital. ICBA’s Virtual Policy Summit custom message makes it easy for community bankers anywhere to contact their lawmakers on these key issues. Contact Congress Now!

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    Fine: Community Bank Voice Must Be Heard

    In an age of short news cycles and even shorter attention spans, community bankers have to be willing to tell their story again and again to connect with policymakers and the public, ICBA President and CEO Cam Fine wrote in a new blog post. That is why ICBA is hosting Community Banking Month and the Washington Policy Summit in April, he wrote—to make the community bank voice heard.

    “Our industry’s success depends on our ability to share that story—to the people in our communities, to the news media, to the policymakers who establish the laws we live by, and to the next generation of community bankers,” Fine wrote. Read Blog Post.

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    CBAI Connected to Community Banking is sponsored by The SHAZAM Network: Nothing is more important than keeping yourself, your employees and your customers safe. As the violence of robbery continues to harm financial institutions across the nation, are you prepared? SHAZAM now offers crime response training for the financial services sector with our robbery and crisis management consultant (who has over 30 years of experience in the criminal justice field). Training options include a threat assessment, a robbery course and an active shooter workshop. Help keep your organization safe. Sign up today!



    FDIC Approves Revised Community Bank Assessment Formulas

    The FDIC board of directors approved a final rule revising Deposit Insurance Fund assessment formulas for community banks with less than $10 billion in assets that have been FDIC-insured for at least five years. The updated formula revises the FDIC’s methodology for determining risk-based assessments for community banks to better reflect risks.

    Together with the overall decline in rates that will occur once the DIF reserve ratio reaches 1.15 percent, more than 93 percent of community banks will pay lower assessment rates, the FDIC said. The FDIC revised its online assessment calculator that allows institutions to estimate their assessment rates to reflect the final rule.

    The final rule also reflects the changes that were made in the second notice of proposed rulemaking last January, including changing the one-year asset growth measure and substituting a brokered deposit ratio in place of the previously proposed core deposit ratio. Under the new brokered deposit ratio, only brokered deposits in excess of 10 percent of total assets my increase assessment rates. For banks that are well-capitalized and have a CAMELS composite rating of 1 or 2, reciprocal deposits will be deducted from brokered deposits.

    The final rule will be effective on July 1 provided the DIF reserve ratio reaches 1.15 percent by that date. For more information, contact CBAI’s David Schroeder at davids@cbai.com. Read More.

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    Regulators’ Incentive Pay Plan Exempts Some Community Banks

    Federal regulators proposed new executive compensation standards that would exempt financial institutions with less than $1 billion in assets and offer regulatory discretion for those between $1 billion and $50 billion.

    Under the proposed rule, executives at Level 1 ($250 billion or more) and Level 2 ($50 billion-$250 billion) institutions would have to defer some of their qualifying incentive-based compensation. Regulators would have discretion over whether to apply some of these standards to Level 3 institutions ($1 billion-$50 billion). And institutions with less than $1 billion would not be covered by the rule.

    Regulators have made significant changes to their 2011 proposal, which would have required banks with $1 billion or more in assets to have policies and procedures for their incentive compensation commensurate with their size and complexity. Read the Proposed Rule.

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    Goldman Settlement Proves Too Big to Fail Is Alive and Well

    The recent Department of Justice $5 billion settlement with Goldman Sachs proves yet again that mega banks remain too-big- to-fail, too-big-to-jail, and too-big-to-punish. Not a single responsible individual at Goldman was named, let alone held accountable for fraudulent activity. What some now call “immaculate corruption” must come to an end. It’s time for real accountability, criminal prosecutions, and civil penalties to deter lawbreaking. Read More.

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    Community Banks Continue to Dominate Small Business Financing

    Community banks are the favored option for private businesses. They approved 76% of applicants for at least some of the amount being requested. Large banks had a lower approval rate of 58%. Additionally, 75% of private firms said that they were satisfied with the services of small banks while only 51% held a similar view of large banks. On this count, online lenders performed poorly with only 15% being able to meet the expectations of borrowers.

    These were some of the findings of the 2015 Small Business Credit Survey: Report on Employer Firms, an annual exercise conducted jointly by seven Federal Reserve Banks (New York, Atlanta, Boston, Cleveland, Philadelphia, Richmond, and St. Louis). Read More.

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    Which Small Bank Has the Biggest ROAE?

    Contrary to the claim by certain “experts” that community banks must be at least $1 billion in assets to be profitable, the five most profitable publically-traded banks under $2 billion in assets have less than a billion in assets. That’s according to a recently released American Banker magazine annual ranking of publically-traded banks under $2 billion in assets.

    Congratulations to two CBAI member banks that made that top performer list: #2-ranked West Town Bancorp, North Riverside, and #18-ranked Washington Federal Bank, Chicago. Both banks operate in large metropolitan areas, are less than $250 million in assets and posted outstanding financial results. Read More.

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    Congressman Quigley Introduces Community Bank Advisory Committee Legislation

    CBAI thanks Congressman Mike Quigley (D-05) for introducing legislation which in part establishes a Treasury Department Community Bank Advisory Committee. The Committee will provide the Department with valuable advice and guidance on a broad range of important issues impacting community banks in Illinois and throughout the country as well as the communities they serve.

    CBAI Chairman Kevin Beckemeyer, president and CEO of Legence Bank in Eldorado, said, “Congressman Quigley’s legislation will ensure the voice of community banks is considered in the policy making process. As an Illinois community banker, and on behalf of Illinois community banks, we truly appreciate Congressman Quigley introducing this important legislation.” Read More.

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    Registration Now Open for CBAI's Annual Group Meetings

    CBAI leaders and executive staff are visiting 11 locations on the 2016 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. The opening portion of each Group Meeting focuses on critical legislative and association issues. CBAI President Bob Wingert provides updates on Association projects and community banking in general; and Senior Vice President of Governmental Relations Kraig Lounsberry offers an up-to-the-minute report of banking-related legislative activities. This year’s after dinner topic is “The Financial Technology Revolution,” presented by Michael Peterson, Fitech Payments, Ft. Worth, TX. The wind of change in the payments world is gaining in strength as financial technology’s “fintech” potential to alter how, where and when payments are made – as well as who it is that facilitates them. Registration is now open for CBAI's Annual Group Meetings, so register today! View Schedule.

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    Peer-To-Peer Lending, Friend or Foe?

    Today, peer-to-peer lending platforms and other FinTech innovations are becoming increasingly relevant in the financial landscape. Staying at the forefront of this shift will be crucial to securing your banks loan growth in the future. The article discusses how bankers can work with these platforms to make them more friend than foe and how to grow loans through the millennial market. Read More.

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    ICBA Issues Cyber Insurance White Paper

    ICBA released a white paper that provides an overview of cyber insurance for community banks. “Cyber Insurance and Community Banks: An Introduction” outlines what it is and is not, how to prepare for the underwriting process, and the types of coverages that may be available to community banks. See ICBA’s Cyber and Data Security Resources Page.

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    Index: Rural Economy Continues to Sag

    The rural economy continued to drop in April, according to Creighton University’s Rural Mainstreet Index. The index declined to 38.2 from March’s already-low 40.2, the eighth consecutive month below growth-neutral. Compared with a year ago, prices for farm products are down by 16 percent and energy products are eight percent (8%) lower. Read More.

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    Investment News From THE BAKER GROUP

    Baker Market Update

    Information received since the Federal Open Market Committee met in March indicates that labor market conditions have improved further even as growth in economic activity appears to have slowed. Growth in household spending has moderated, although households' real income has risen at a solid rate and consumer sentiment remains high. See Baker Market Update.

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    Midwest Office Can Save Banks Up to 55% on Everyday Office Supplies!

    Call your local sales representative today at 866-978-5555 to get a free price analysis. See Midwest Office Specials!

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    Dell Discounts Up to 45% Ends Soon

    CBAI members have special access to ICBA member discounts of up to 45% on Dell computer equipment. Follow the links to the ICBA-Dell web site and input the ICBA Member ID 141351622. See Dell Discounts.

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    CBIS Nicoud: DOL Fiduciary Rule Will Impact Third-Party Investment Advisors

    The Department of Labor recently finalized its so-called fiduciary rule, which has ramifications for community bankers that both sponsor a defined contribution plan and offer investment services through a trust department or third-party broker dealer. The rule emerged after a five-year controversial battle that pitted Wall Street interests against what the DOL argued are the inherent conflicts-of-interest in the brokerage industry. Read More from CBIS Nicoud.

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    CBAI LEGAL: Ex-Wife’s Equitable Interest Trumps Attorneys’ Fees

    At the intersection of divorce, foreclosure and attorneys’ fees rests a recent Illinois Appellate Court decision in the case of Peru Federal Savings Bank v. Weiden, where the Court weighed an ex-wife’s stake in the marital residence versus a lien for attorneys’ fees when a foreclosure sale resulted in surplus proceeds. See the Most Recent CBAI LEGAL.

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    Deadline for Nominations for the Excellence and Innovation BKD Award Is June

    Is Your Bank in the Running?

    Nominations are being taken for the 2016 Excellence & Innovation BKD Award Presented by CBAI and the accounting firm of BKD LLP. The award brings recognition to banks with an outstanding, innovative product/service or program. Your bank does not need to be a BKD client in order to enter. Nominations are due at CBAI headquarters no later than June 1. We hope to receive your nomination soon. Learn About the BKD Award. Download Nomination Form.

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    Register Today for Early-Bird Pricing at CBAI’s Convention & Expo

    Registration is now open for CBAI’s 42nd Annual Convention & Expo, scheduled for September 15-17, 2016, at the Marriott Downtown Kansas City. Expert speakers on the hottest community banking topics fill an education agenda featuring 20 break-out sessions. Eric Boles, president of The Game Changers Inc., a company dedicated to maximizing employee commitment and performance, takes the stage for this year’s Opening Breakfast. A highly acclaimed keynote speaker and consultant, Boles learned many principles of team dynamics and leadership from his experience playing in the National Football League (NFL) with the New York Jets and the Green Bay Packers. Also on the agenda is the Welcoming Reception with BancPac Live and Silent Auction, a jam-packed exhibit hall with nearly 90 booths, fun partner’s programs exploring the exciting city of Kansas City, a Closing General Session, and much more. Our annual showcase event closes with the only group dedicated to recreating the Motown experience in both music and dance, The Fabulous Motown Revue. Performing together for more than 25 years, members of The Fabulous Motown Revue have played with The Four Tops, Martha Reeves, Natalie Cole, Aretha Franklin, Ray Charles, Mary Wilson, The Temptations, and many other Motown favorites. Early-bird Registration Here.

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    Auditing TRID Set for May 2

    We are finally into the dreaded TRID (Integrated Disclosures) changes, and it is time to begin to focus on auditing these new portions of the regulation to assure that the bank is in compliance. The regulations have had major impacts upon every bank for every size. The focus of this seminar is to discuss your audit plan in order to measure your compliance with the new regulations. The seminar covers three specific areas of audit: timing of all the disclosures; completion of the loan estimate; and completion of the closing disclosure. Auditing these areas means an extensive review of many issues. This makes the audit process even more difficult, as the interrelationships of the various portions of the documents and their timing adds much complexity to the process. This program is designed specifically for bank auditors and others involved in the process of reviewing consumer mortgage loan files. Leading this seminar is Bill Elliott, CRCM, senior consultant and manager of compliance, at Young & Associates, Inc., Kent, OH.

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    ACH for Beginners Scheduled for May 3 & 11

    This session explains general ACH rules in a real-world, easy-to-understand approach. Attendees learn the essentials of understanding the ACH system and daily processing as well as steps for handling some common issues. Learn to talk the “lingo” with the best of them! This class strategically allocates its objectives into education on the receiving side (RDFI) in the morning and early afternoon, followed by the origination side (ODFI) later in the afternoon. New and relatively new ACH personnel and operations staff who want a better understanding of ACH would benefit from attending. Nicole Meinhardt, CPA, AAP and senior manager at Wipfli LLP, Sterling, IL, leads this seminar.

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    CBC: Compliance Management Systems and Risk Assessment Slated for May 3 & 4

    Over the last several years, compliance officers and employees have been faced with the implementation of new rules, and have been focused on trying to discern the details of what was required. This has left very little time to measure the risks that are a part of any regulatory change. The challenge is that regulators want their constituencies to focus on and manage the risks associated with compliance, as well as the details of the regulation itself. This session, the third quarter of the Community Bankers for Compliance Program, is focused on explaining the best ways to manage and assess compliance risk. The first portion of the presentation discusses Compliance Management Systems. We look at it from the perspective of the regulators and the perspective of the industry. The second portion of the presentation discusses the risk-assessment process itself. We begin with the risk-assessment process for operations in general, and then look at just one piece of the operations puzzle – Regulation E (Part A). We then continue with risk assessment for the Bank Secrecy Act (BSA). The final portion of the risk-assessment presentation is lending-risk assessment, and we look at the myriad of lending issues and then focus specifically on managing the risks created by TRID. Leading this session is Bill Elliott, CRCM, Young & Associates, Inc., Kent, OH.

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    Commercial and Industrial Lending in Today’s Competitive Market Set for May 4

    Offered in Lisle this May, this seminar begins with a brief overview of commercial and industrial (C&I) loan products including working capital lines of credit, ABL facilities, and equipment financing (loans/leases) and their typical structure. The training session also covers underwriting C&I loans including accounts-receivable assessment and the use of a “Borrowing Base Certificate” (basic and advanced models), the valuation and quality of inventory, and the analysis of various equipment-related issues in lending. This portion of the seminar also covers the proper evaluation of the borrower's financial statements. Additionally, the seminar covers documentation of C&I loans, collateral concerns, challenges with pricing, and managing the C&I loan portfolio. The seminar concludes with a review of how to identify and market to new C&I loan prospects in today's competitive market. Leading this seminar is David Osburn, founder and managing member of David L. Osburn & Associates LLC.

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    Call Report Seminar Planned for May 4

    With ever-changing regulatory and accounting environment, it is important that call report preparers and reviewers remain up to date. In 2016, there are several proposed changes to the call report. In addition, many banks continue to struggle with the recent regulatory capital changes under Basel III. This session includes detailed discussions of each call report schedule as well as the real-life challenges of completing an accurate Call Report. The session provides detailed examples as well as sufficient time for questions, answers, and discussion. Participants receive a detailed, 200+ page manual that is valuable for future reference. It includes a summary of general instructions and procedures for less-experienced preparers. This seminar covers new accounting updates that will affect banks’ Call Report. Understanding of and compliance with accounting changes is often more difficult than revisions to Call Report schedules. Leading this seminar is Amanda C. Garnett, CPA, CliftonLarsonAllen LLP’s Peoria office.

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