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Community Bankers Association of Illinois
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     A Bi-Weekly News Bulletin for CBAI Members                                    June 8, 2016

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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois
  • Hensarling Announces Bold Plan for Regulatory Relief
  • Community Bank Net Income Rises in First Quarter
  • Gruenberg: FDIC Predicts Rise in De Novo Formation
  • CBAI Chairman Beckemeyer Reflects on His Community Bank’s Core Values
  • Essential Facts for Going Over $500 Million
  • CBAI Foundation Announces Essay Scholarship Winners for 2016
  • CBAI Education Foundation Is 20 Years Young – Give Us a High Five!
  • TAKE THE $10,000 CHALLENGE!
  • Community Banks Can Build Merchant Trust with More Digital Options
  • Investment News From THE BAKER GROUP
  • Ag Groups Hail Supreme Court Ruling
  • And Here's the Kickoff... It's Auction Time Again!!
  • Big Data or Smart Data: How to Maximize What You Know About Your Customers
  • iHELP is Giving Away Scholarships to Participating CBAI Member Banks
  • CBIS Nicoud: As Mobile Banking Increases Community Banks Are Forced to Compete
  • Save $50 on Promotional Products with Midwest Office!
  • CBAI LEGAL: UCC Statute of Limitations Aids Bank
  • Correction to CBAI 2016 Directory of Illinois Financial Institutions
  • Register Today for Early-Bird Pricing at CBAI’s Convention & Expo
  • National Flood Insurance Program Review and Update Slated for June 14
  • Compliance for Lenders To Be Held June 15 & 16
  • Director’s College Scheduled for June 22 & 23
  • 2016 Guide to Human-Resources Sanity in Election-Year Madness Set for June 22


  • Hensarling Announces Bold Plan for Regulatory Relief

    Banks of all sizes would be able to “off-ramp” from certain Dodd-Frank Act and Basel III risk-based capital rules if they meet certain standards, under a plan released by the chairman of the House Financial Services Committee.

    Representative Jeb Hensarling’s (R-Texas) Financial CHOICE Act would provide the “off-ramp” option for institutions with a simple leverage ratio of at least 10 percent and a composite CAMELS rating of 1 or 2. It also offers relief from numerous other regulatory burdens.

    ICBA, which has worked closely with Hensarling on the plan, said it is a welcome opportunity for advancing community bank relief. CBAI fully concurs. “Chairman Hensarling’s common-sense reforms will free up resources that can be used to make loans, promote economic growth and create jobs in local communities nationwide,” ICBA President and CEO Cam Fine said.

    While Hensarling’s proposal does not yet include legislative language, it would incorporate several bills inspired by ICBA’s Plan for Prosperity platform. CBAI is in full support of the Plan for Prosperity. These provisions would reform the Consumer Financial Protection Bureau, ease mortgage rules on portfolio loans, require tailored banking regulations, create a workable exam appeals process, and more. Read Hensarling Release. Read ICBA Release. See Plan for Prosperity.

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    Community Bank Net Income Rises in First Quarter

    Community banks reported $5.2 billion in net income in the first quarter, an increase of 7.4 percent from the first quarter of 2015, the FDIC reported. Net operating revenue at the 5,664 insured institutions identified as community banks rose 6.9 percent from a year ago to $22.2 billion, according to the agency’s Quarterly Banking Profile.

    Overall, insured institutions reported net income of $39.1 billion in the first quarter, a 1.9 percent decline from a year earlier. The decline in earnings was due largely to higher loan-loss provisions for commercial and industrial borrowers, particularly in the energy sector, and lower noninterest income at a few large banks.

    Community bank loan balances rose 1.5 percent during the first quarter and 8.9 percent over the past 12 months. Overall, total loan and lease balances increased 1.1 percent during the first quarter and 6.9 percent over the previous year.

    The Deposit Insurance Fund increased from $72.6 billion at the end of 2015 to $75.1 billion at the end of the first quarter, with the reserve ratio rising from 1.11 percent to 1.13 percent. The number of banks on the FDIC’s Problem List fell from 183 to 165, the fewest in more than seven years. Read FDIC Release.

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    Gruenberg: FDIC Predicts Rise in De Novo Formation

    The FDIC expects de novo charters to increase as economic conditions continue to improve, FDIC Chairman Martin Gruenberg told a member of Congress. In a letter to Sen. Dean Heller (R-Nev.), Gruenberg said the agency has seen indications of increased interest from prospective groups in filing applications for new depository institutions.

    Gruenberg was responding to a letter from Heller requesting information on how the FDIC can remove regulatory barriers to new bank formation. The FDIC is preparing a guide for organizing groups and planning outreach meetings in several regions, Gruenberg noted.

    The correspondence comes after the FDIC recently reduced from seven to three years the period of heightened de novo supervisory monitoring, which followed years of advocacy by CBAI and ICBA. Read Gruenberg Letter. Read Senator Heller’s Letter. See FDIC Release.

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    CBAI Chairman Beckemeyer Reflects on His Community Bank’s Core Values

    In an article that appeared recently in Independent Banker magazine, CBAI Chairman Kevin Beckemeyer, President and CEO of Legence Bank in Eldorado, says his community bank has three key assets: its customers, employees, and communities. Read More.

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    CBAI Connected to Community Banking is sponsored by The SHAZAM Network: If you’re within a few years of a contract renewal with your core vendor, SHAZAM Core Services has some advice. With vendors offering to solve all your needs in one suite, it’s tempting to be wooed by the myth that one platform can be a magic bullet for all your diverse business needs. Look for an agile, open architecture core provider that allows you to bring together a strong foundation of partners to support what makes you unique. Plan now to ensure you’re not locked in a product that can’t quickly adapt to changing customer behavior and the changing needs of your institution. Visit SHAZAM Core Services for More Information.



    Essential Facts for Going Over $500 Million

    When a bank nears $500 million in assets, there are several issues to consider regarding FDIC regulation Part 363, and it’s important for the board and management to understand the regulation before surpassing the $500 million mark. Read BKD Article.

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    CBAI Foundation Announces Essay Scholarship Winners for 2016

    The CBAI Foundation for Community Banking has selected its 2016 Annual Scholarship Program winners. Now in its 30th year, the program annually offers $23,000 to high-school seniors via an essay-writing contest; $500 is also awarded to the first-place winner's high school. This year, 112 CBAI member banks (a new record of 32 percent CBAI member participation!), representing 282 students (another new record!), participated in the contest, which is a free CBAI member benefit! See the List of Winners – Congratulations to All Sponsoring Banks!

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    CBAI Education Foundation Is 20 Years Young – Give Us a High Five!

    This is the 20th anniversary year of the CBAI Foundation for Community Banking! Nearly $500,000 has been awarded in scholarships! EVERY CBAI MEMBER BANK CAN BENEFIT!

    Help us celebrate! GIVE THE FOUNDATION A HIGH FIVE! The Foundation’s “High Five” program is simple. Just $5 from each bank employee and $50 from each director is the aim of the program. Please participate and help the Foundation celebrate! See Program Form.

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    TAKE THE $10,000 CHALLENGE!

    During his presentation at CBAI Group Meetings this Spring, Michael Peterson, manager of financial institution sales at Fitech Payments, issued the following challenge to member banks:

    Fitech will show member banks how to make more money on their existing merchant card program WITHOUT raising merchant fees, or Fitech will pay the bank $10,000!

    Fitech can transform your merchant card services program from a courtesy service to a profit center. Read More.

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    Community Banks Can Build Merchant Trust with More Digital Options

    In the rapidly advancing world of technology, community banks have to make strategic moves to keep up with the competition in order to serve their customers. With all of the recent cyber security breaches, gaining and keeping customer trust is critically important for community banks. Learn More from Fitech.

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    Investment News From THE BAKER GROUP

    Baker Market Update

    The Bureau of Labor Statistics (BLS) reported last week that the world’s largest economy was only able to create 38k new jobs in May, and that’s pretty dismal. So dismal, in fact, the Unemployment Rate fell by 0.3% to 4.7%. See Baker Market Update.

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    Ag Groups Hail Supreme Court Ruling

    Agriculture groups, including Illinois Farm Bureau, applauded a U.S. Supreme Court decision last week that makes it easier for landowners to fight the federal government’s use of the Clean Water Act. Read More.

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    And Here's the Kickoff... It's Auction Time Again!!

    CBAI is excited to begin preparing for Community BancPac’s 25th Annual Silent Auction and 9th Annual Live Auction. Thanks to many of you, this night is always a fun-filled event and remains one of the highlights of CBAI’s Convention. We hope to make this year’s Auction a successful and memorable event, but we need your help! CBAI deeply appreciates the PAC donations many of you make each year. Be a PLAYMAKER and please make a contribution to the auction! See Donation Form.

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    Big Data or Smart Data: How to Maximize What You Know About Your Customers

    Big data is a big deal. It’s the topic of much debate at financial institutions and the cause of a lot of marketing angst. The big issue about big data is this: What do you do with it? How do you leverage all of the internal and external data you have to positively impact your financial institution? How do you use it to make the most of your marketing budget? This article dives into those questions and shows how you can use data to impact your bank's bottom line! Read More from Harland Clarke.

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    iHELP is Giving Away Scholarships to Participating CBAI Member Banks

    How can my bank win a $500 scholarship and $250 Visa gift card? Simply market the iHELP Student Loan over the next few months to your customers. For every application received from June 1st through August 31th the bank will be entered in a drawing. A bank with three applications will get three entries while a bank with 10 applications will be entered 10 times. There will be four drawings, one for June from all June applications, one for July from all of July applications, one for August from all of the August applications, and a cumulative drawing at the end of September for all the applications received from June through August. Read More.

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    CBIS Nicoud: As Mobile Banking Increases Community Banks Are Forced to Compete

    According to The Javelin Group, half of the U.S. adult population now banks using smartphones and tablets. That represents a 29 million increase in user adoption from just last year! Clearly, community banks will need to offer mobile banking services to Millennials and Gen Xers to sustain and grow operations. Read More from CBIS Nicoud.

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    Save $50 on Promotional Products with Midwest Office!

    Midwest Office understands the importance of solidifying your brand in your community. Making a lasting impression on your customers is a key part of your business process. Midwest Office offers promotional products to share with the world in a cost effective way that will really make an impact! For the month of June receive an additional $50 off your next $300 order of promotional products.

    Midwest is able to ensure that your message is out there in whatever way you can think of... offering everything from pens and notepads, to golf gear and drink cozies.

    The Midwest Office team is ready to help you take your brand to new places. Contact Kevin Gaffney, Midwest Office, at 217/303-5511 or via email at kgaffney@midwestoffice.com and let Midwest Office help you leave a lasting impression on your customers!

    Midwest Office is committed to offering CBAI members the lowest price on commonly-used bank office furniture and supplies. These prices are guaranteed to save your bank money compared to the cost of buying supplies from mail-order vendors and super-stores. REMEMBER: Delivery is always free for CBAI member banks!

    Go to www.midwestoffice.com to see additional discounted items, rebates and specials. See Midwest Office Specials!

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    CBAI LEGAL: UCC Statute of Limitations Aids Bank

    In a recent (May 27) opinion of the First District Illinois Appellate Court, a bank prevailed in a breach of contract suit because the Court applied the UCC’s three year statute of limitations rather than the ten year statute applicable in general (i.e., outside of the UCC) breach of contract lawsuits. See Most Recent CBAI LEGAL.

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    Correction to CBAI 2016 Directory of Illinois Financial Institutions

    The phone number for Fitech Payments is incorrectly reflected in the listing of CBAI associate members. The correct number is 817.698.2250. CBAI regrets the error.

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

    Register by June 30, 2016, for early-bird pricing at CBAI’s showcase event, entitled “Community Banking Playmakers.” Scheduled for September 15-17, 2016, CBAI’s Annual Convention & Expo makes its first ever stop in Kansas City, MO, at the Marriott Downtown. Offering a thriving creative arts scene, eclectic mix of entertainment, and die-hard sports, it's safe to say there's something for everyone in Kansas City. But you won’t want to miss the 20 timely education sessions with expert information on the hottest topics in community banking today, not to mention an opening keynote with acclaimed public speaker, consultant, and former NFL athlete, Eric Boles. Education only scratches the surface of the convention’s attributes. Nearly 90 exhibit booths featuring the latest products and services are on display in the Exhibit Hall. Countless networking opportunities and social events include the golf outing at Swope Memorial Golf Course and the Saturday dinner dance featuring the Fabulous Motown Revue. Don’t miss out! Take advantage of the significant pricing discount and register by June 30! Early-bird Registration Here.

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    National Flood Insurance Program Review and Update Slated for June 14

    Every time anyone in the bank makes a flood error, there is potential for a $2,000 fine. And multiple flood errors in the loan can result in multiple fines. As a result, more than ever, we need to ensure that the loan origination and servicing process is free of any deficiencies, including completion of documents, getting insurance when required, and other mistakes. This seminar covers all aspects of the flood process. The focus is on both the loan-origination process and the loan-servicing process, and the steps that bankers must take to ensure appropriate compliance. Included in the presentation are examples from the real world, explaining exactly how “not to do it.” Flood regulations continue to face changes, and this seminar includes all changes instituted up to the date of the presentation. As this presentation includes information for the entire flood-insurance process team, including loan officers, processors, loan-servicing personnel, and loan management. Others in your institution will find value in this presentation, including auditors, and others with flood responsibilities. Leading this seminar is Bill Elliott, CRCM, senior consultant and manager of compliance at Young & Associates, Inc., Kent, OH.

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    Compliance for Lenders Scheduled for June 15 & 16

    The compliance officer is responsible for administering your bank's compliance program including policies and procedures. Each employee of the bank has a duty to have a working knowledge of the compliance issues that pertain to his or her assigned position description. And with a relatively new set of Dodd-Frank rules and the even newer TRID rules, the life of a lender is getting more and more complex. The challenge is to ensure that lending personnel have the right information at the right time. Offered in Springfield and Mt. Vernon, this one-day program provides an overview of the current “hot-button” changes that are part of the lender's responsibilities; an overview of the lender's responsibility for assuring that all of the TRID rules are met; an overview of the Loan Estimate and the Closing Disclosure; and up-to-date information on other compliance issues and other developments in bank regulations that relate to lending. Leading this seminar is Bill Elliott, CRCM, senior consultant and manager of compliance at Young & Associates, Inc., Kent, OH.

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    Director’s College Scheduled for June 22 & 23

    The Community Bank Directors’ College was developed in close conjunction with both state and federal regulators, and is designed to teach individuals how to become a more effective, capable, and supportive member of a bank’s board of directors. It is our goal to graduate directors who return to your bank more active, more knowledgeable, and more decisive. In effect, they will be an even bigger asset to your community bank. The Directors’ College is offered once every two years and provides a thorough understanding of bank operations and bank directors’ responsibilities. The college is recommended for both new and seasoned bank directors. It is structured as two, two-day sessions offered on an annual basis. The second session, which may be attended as a stand-alone course, is being held at the Northfield Center in Springfield, Illinois, on June 22-23, 2016.

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    2016 Guide to Human-Resources Sanity in Election-Year Madness Set for June 22

    As the Obama era draws to an end, the President and various federal agencies have aggressively issued Executive Orders, Administrative Regulations, Enforcement Guidance, and Interpretive Bulletins designed to fulfill past and future political promises. Executive action, coupled with increased policy driven litigation by the EEOC, DOL, DOJ, and NLRB, presents community banks with more complex, federal HR compliance challenges than at any time in recent memory. Additionally, the Illinois state legislature, state administrative agencies, as well as state and federal courts continue to expand the scope of community banks' duties to satisfy state-law discrimination, retaliation, and wage-and-hour law obligations. This lively, interactive one-day program provides participates with an understanding of new and shifting employment-law requirements and the compliance tools necessary to maximize management rights while avoiding the expense and distraction of avoidable litigation and enforcement actions. Leading this seminar is Leonard W. Sachs, who serves as partner-in-charge of the Labor and Employment Group at Howard & Howard Attorneys PLLC, as well as the managing partner of the firm's Peoria office.

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