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                               July 27, 2011 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois


  • ICBA Leaders Speak Out
  • FSOC: Large Banks Still Pose Systemic Risks
  • Hoenig: Low Interest Rates Subsidize Large Banks
  • State Republicans File Suit Against Redistricting Map
  • Sheila Bair’s Exit Interview – "Champion of the Little Guy"
  • ICBA Urges Panel To Approve FDIC Study on Exams
  • Register for CBAI’s 37th Annual Convention by 7/31 to Be Eligible for Valuable Prizes!
  • Grant Thornton Releases Bank Survey Results
  • Baker Market Update
  • Register Now to Attend August 1 BAKER Investment Conference
  • Chicago Fed: Financial Conditions Edge Tighter
  • 'House Lock' Not Hindering Employment
  • Feeling Lucky?
  • Are You or Do You Know a Banker Who Is Celebrating 50 Years in Banking?
  • Do You Know of a Bank or Vendor That's Not a CBAI Member but Should Be?
  • Crop Prices Climb to New Plateau
  • Training the Credit Analyst Scheduled for August 3 & 4
  • Banking Essentials First and Second Quarter Scheduled for August 9 & 10
  • IRA Institute Set for August 23-24


  • ICBA Leaders Speak Out

    "Projecting Our Voice" by Cam Fine, ICBA President and CEO

    "Community banks need their own advocacy voice in Washington, D.C., a voice that is distinctly independent and separate from megabanks and their trade-group allies," according to ICBA's Cam Fine. CBAI's David Schroeder is in Washington this week working in close cooperation with ICBA. His full report will be available in the next edition.
    See Fine Article.

    "The Lending Squeeze" by Sal Marranca, ICBA Chairman

    "I’m going to admit what every community banker knows firsthand, but what too many Washington policymakers still, four years after the financial crisis, don’t seem to grasp with sufficient seriousness or urgency: It’s much tougher to lend money today than ever before." See Marranca Article.

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    FSOC: Large Banks Still Pose Systemic Risks

    The largest U.S. financial institutions receive the highest credit rating for short-term funding in part because there is a presumption that they will receive government support in stressed conditions, according to the Financial Stability Oversight Council’s
    first annual report. The report, which covers the progress of implementing the Wall Street Reform Act and potential threats to financial stability, notes that the Federal Reserve identified several weaknesses in the capital plans at many large financial institutions. "These factors highlight some of the challenges still ahead in building a stronger financial system," the report found.

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    Hoenig: Low Interest Rates Subsidize Large Banks

    Historically low interest rates maintained by the Federal Reserve represent a subsidy to the largest banks and should be raised from zero, Kansas City Federal Reserve President
    Thomas Hoenig told Congress. Testifying before the House Financial Services Subcommittee on Domestic Monetary Policy and Technology, Hoenig said the central bank should not guarantee a return for Wall Street or any special interest groups. He also said zero rates redistribute wealth from savers to debtors.

    Hoenig voted consistently to raise interest rates as a voting member of the Federal Open Market Committee in 2010. He is stepping down at the end of his 20-year term in October.

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    State Republicans File Suit Against Redistricting Map

    Last week Republican legislative leaders filed suit to prevent the new redistricting map from taking effect. The expected action claims that the new map violates the Illinois Constitution because it wasn’t made available to the General Assembly or the public for proper review, and 34 of the districts aren’t compact enough. This is the first occasion since adoption of the current state constitution in 1970 that one party (the Democrats) controlled the House, Senate, and the Governor’s Office, thereby also controlling the redistricting process.
    See Illinois Statehouse News Article.

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    Sheila Bair’s Exit Interview – "Champion of the Little Guy"

    As her five-year tenure as FDIC Chairwoman was winding down last month, Sheila Bair spoke candidly with New York Times reporter Joe Nocera. Regarding community banks, Bair stated, "We always saw ourselves as the champion of the little guy. The other regulators never… understood the unfairness of the way little banks were treated versus the big banks."

    Bair’s distaste for the notion that giant banks can never be permitted to fail is also apparent. "I don’t think regulators can adequately regulate these big banks. We need market discipline. And if we don’t have that, they’re going to get us in trouble again."
    See NY Times Article.

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    ICBA Urges Panel To Approve FDIC Study on Exams

    ICBA called on the House Financial Services Committee to advance legislation requiring the FDIC inspector general to study the impact of FDIC policies on the exam environment.
    H.R. 2056, sponsored by Rep. Lynn Westmoreland (R-Ga.), was scheduled to be marked up by the panel last week. In a letter to committee members, ICBA wrote that the oppressive exam environment is hampering lending, which has an adverse effect on the economic recovery. The study mandated by H.R. 2056 would focus on many of ICBA’s concerns, including the effect of “paper losses,” or write downs that cause an institution to raise more capital, and commercial real estate loan “workouts.” The association also recommended that the Government Accountability Office work with the IG because these issues affect all banks, not just those examined by the FDIC. Read Testimony on the Bill.

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    Register for CBAI’s 37th Annual Convention by 7/31 to Be Eligible for Valuable Prizes!

    Register to attend
    CBAI’s 37th Annual Convention and Expo by July 31, 2011, and be eligible to win valuable prizes, including a Wisconsin cheese and wine basket, a $150 Harley-Davidson gift card, a Kodak PLAYSPORT video camera, and a Coach gift card worth $200. Scheduled for September 22-24 at the Hyatt Regency and Frontier Airlines Center in Milwaukee, WI, this year’s convention provides countless networking opportunities, expert speakers on the hottest topics for community bankers, access to new products and services from nearly 100 vendors, and fun and exciting social activities. You won’t want to miss this year’s convention, "Community Banking: Fueled by Loyalty." Register today!

    For a detailed list of prizes, please click here.

    For the full convention promo brochure and to register, please click here.

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    Grant Thornton Releases Bank Survey Results

    Noteworthy among its findings, the Grant Thornton survey revealed a resurgence of optimism among bankers concerning the U.S. economy. Nearly 39 percent of the respondents believe the U.S. economy will improve, while 52 percent expect economic conditions to remain the same.

    The burden of regulatory reform was cited by 91 percent of the respondents as their key concern for the next year, while 57 percent said exposure to commercial real estate loan losses is a serious concern. Regarding future growth, 86 percent said organic loan origination, not acquisitions, will lead the way.
    See Grant Thornton Executive Summary.

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    Baker Market Update

    BAKER Market Update: July 22 Week in Review.
    Read More.

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    Register Now to Attend August 1 BAKER Investment Conference

    With short-term interest rates near record lows and market volatility on the rise, financial regulators continue to make Interest Rate Risk a regulatory priority in 2011.

    In its recent advisory on Interest Rate Risk (IRR), the FFIEC emphasized the importance of sound risk management systems and warned that banks with excessive IRR may have to increase capital, mitigate risk, or both. As loan demand remains subdued in this current economic environment, it is evident that prudent investment portfolio strategies will be critical to bank performance.

    The Baker Group’s upcoming Interest Rate Risk and Investment Strategies Seminar will address specific investment strategies that can be employed to improve margin and mitigate unnecessary IRR, focusing on practical steps bankers can take now in order to prepare for the next rate cycle. We will discuss security selection processes and liquidity risk, and address credit concerns on municipal bonds and balance sheet stress tests.
    Click here for more information and to register.

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    Chicago Fed: Financial Conditions Edge Tighter

    Financial conditions edged tighter and remained slack relative to economic conditions in the week ending July 15. For an illustration,
    click here.

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    'House Lock' Not Hindering Employment

    Chicago Fed Letter finds no evidence that the reluctance of households to sell their homes in a declining house price environment is hindering labor mobility and employment. For the complete text, please
    click here.

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    Feeling Lucky?

    Purchase a chance to win $150 to $2,500 from the CBAI Foundation for Community Banking. Anyone can win! The Foundation endows 15 scholarships every year to deserving high school seniors. Certificates are $20 each or a book of six for $100. Complete the
    certificate and fax or e-mail it to Andrea Cusick at 217/585-8738 or cbaicom@cbai.com (we’ll send you an invoice); certificates will not be sold at Convention this year. Winners will be announced at the CBAI Convention in September – you need not be present to win.

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    Are You or Do You Know a Banker Who Is Celebrating 50 Years in Banking?

    Contact the CBAI Department of Communications for information on the 50-Year Recognition Program. Andrea Cusick at 800/736-2224 or
    cbaicom@cbai.com.

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    Do You Know of a Bank or Vendor That's Not a CBAI Member but Should Be?

    Contact the CBAI Department of Communications and a CBAI staff member will follow up on the lead. If we are successful in recruiting that firm, you will be rewarded for your efforts, whether you’re a banker or an associate member. For more information, contact Andrea Cusick at 800/736-2224 or
    cbaicom@cbai.com.

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    Crop Prices Climb to New Plateau

    Scott Irwin, an agricultural economist at the University of Illinois, believes crop prices have moved perhaps permanently to a new plateau. He attributes the higher crop prices since 2008 to increased biofuels demand and economic growth in emerging markets.
    See Full Article.

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    Training the Credit Analyst Scheduled for August 3 & 4

    This August, CBAI is pleased to offer “Training the Credit Analyst.” Designed for credit officers with little or no experience, this two-day seminar teaches participants how to write effective and comprehensive credit analyses which highlight the important trends shown on the financial spread sheet. Topics include identifying financial statement components, recognizing latent notes, and performing ratio analysis and cash-flow analysis. Preparing financial projections by utilizing sensitivity analysis, identifying factors which may impact the ability to repay debt obligations, and understanding how to grade a loan after analysis is completed are also covered. Leading this seminar is Jeffery Johnson, president and founder of Bankers Insight Group, Atlanta, Georgia.

    For more information and to register, please
    click here.

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    Banking Essentials First and Second Quarter Scheduled for August 9 & 10

    CBAI will hold "Banking Essentials," four, one-day seminars offered in Springfield. A must for the newer community bank employee, this series is designed to provide a complete knowledge of banking principles and operations. It is also geared toward veteran employees as a refresher course. Offered in one location, the four quarters are structured as two, two-day sessions, to cut down on travel for your convenience. As such, quarters one and two are offered on consecutive days in August and quarters three and four are offered on consecutive days in February. All seminars are held at the CBAI Headquarters in Springfield. While it is recommended that the individual attend all four quarters of the series to receive an entire overview of banking, each quarter's material stands alone; one quarter is not a prerequisite for another. Leading the first session on August 9, “Analyzing the Bank and the Banking System,” is Jim Kleinfelter, president of Young & Associates, Inc. Ann M. Brode of Brode Financial Services, a bank consulting firm located in Ravenna, OH, leads the second session "What is a Bank?," which is scheduled for August 10.

    For more information and to register, please
    click here.

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    IRA Institute Set for August 23-24

    CBAI's "IRA Institute" will be held in Springfield August 23-24, 2011. Do you get an uneasy feeling whenever a customer starts asking questions about IRAs? Do you know a little about IRAs but need more information? Would you have a hard time explaining the differences between a Traditional IRA and a Roth IRA? Would it be stressful for you to describe what a "Recharacterization" is to a customer? Have you ever looked at various IRA forms and not understood why the information that's being requested on them is necessary? Have you wondered if any of the rules have changed recently? If you answered “Yes” to any or all of the above questions, then this two-day institute is for you. This program begins with the basics and builds from there to an intermediate level. It is presented by instructors with combined experience of more than 50 years in the field; Randy J. Heidmann and James L. Spaniol, both consultants at Wolters Kluwer Financial Services.

    For more information and to register, please
    click here.

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