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           December 31, 2008 Graphic
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Community Bankers Association of Illinois
Community Bankers Association of Illinois Community Bankers Association of Illinois


  • Best Wishes for a Prosperous and Safe 2009
  • Lahood a Great Choice for Transportation Secretary
  • Tentative Schedule for CBAI’s Washington Visitation Revealed
  • Quinn Predicts Blagojevich’s Departure
  • Baker Market Update
  • FDIC State Profiles for Third Quarter Now Available
  • Democrats May End Minimum Tax on Munis to Spur Market
  • Treasury Invests $2.8 Billion of TARP Funds in 49 Banks
  • St. Louis Fed Creates Financial Crisis Timeline
  • Federal Regulators Issue Identity Theft Brochure
  • Federal Regulators Release CRA Threshold Adjustments
  • Camden Fine on Obama’s Challenges in the Financial Arena
  • Blankenship Offers Quick Review of 2008 with a Look Ahead to 2009
  • FDIC Releases Five-Year Strategic Plan
  • Chicago Fed National Activity Index Declines in November
  • State Budgets Facing Tough Times in Midwest
  • Farm Production Costs May Not Be As High As Predicted
  • 2009 Real Estate Forecast: More Trouble
  • Retailers Face Wave of Store Closings
  • 2009 CBAI CEO Forums
  • CBAI Senior Lender Forums
  • Ten Key Elements for an Effective Onboarding Strategy
  • Take The Health Savings Account Survey


  • Best Wishes for a Prosperous and Safe 2009

    As a turbulent 2008 winds down, the leadership and staff of the CBAI corporate family extend their best wishes to all Illinois community banks and CBAI associate member firms for a healthy and profitable new year. The cataclysmic upheavals in the financial markets and economy during 2008 have caused the most severe worldwide recession in 70 years. Community banks should be proud of the fact that they did not cause this crisis and are now gaining long-deserved recognition among consumers and public officials for their prudent management approach that has sustained the profession for 150 years.

    Given the continuing uncertainty of our economy, CBAI encourages community bankers to apply conservative management principles in their lending and investment decisions. During 2009 community bankers should take advantage of CBAI’s quality educational programs and the many services that benefit banks’ bottom lines. Greater banker participation in grassroots lobbying will also be needed to influence the outcome of numerous bank-related legislative proposals that are anticipated in 2009. Banker involvement will be extremely important for the community banking profession during this period of financial, economic, and political upheaval.

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    Lahood a Great Choice for Transportation Secretary

    On December 19, President-elect Obama named retiring Republican Congressman Ray Lahood as Secretary of Transportation. Obama chose Lahood because he “was committed to finding the best person for the job regardless of party.” Congressman Lahood has long been a friend of community banking in Illinois and CBAI believes he is excellent addition to the Obama administration. Lahood served 12 years as chief of staff to House Minority Leader Bob Michael before running for the congressional seat vacated when Michael retired in 1994. Lahood became famous for his ability to work across party lines, and Illinois will benefit with Congressman Lahood returning to Washington D.C.

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    Tentative Schedule for CBAI’s Washington Visitation Revealed

    The 2009 CBAI Annual Washington Visitation has been set for MAY 12-13 at the Grand Hyatt Washington Hotel. With several major issues in play (financial restructuring, ILCs, mortgage foreclosures and more), CBAI needs a large delegation of community bankers to go to Washington, so plan now to participate. For the tentative schedule,
    click here.

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    Quinn Predicts Blagojevich’s Departure

    Lieutenant Governor Pat Quinn
    told a national audience on “Face the Nation” last Sunday that Governor Blagojevich will be impeached and out of office by Abraham Lincoln’s bicentennial birthday on February 12, 2009. In the interim, a defiant Governor created another storm by appointing former Attorney General Roland Burris to serve as President-elect Obama’s replacement in the U.S. Senate despite the firm commitment of Senate democrats not to accept any appointment of the tainted Governor.

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    Baker Market Update

    Consumer spending for the holidays was down, but stocks were up at the end of last week. The Treasury market rallied late last week as fears of deflation are again on the rise. The 10-year Treasury Note is currently up 6/32 in price to yield 2.16%, while price in the two-year Treasury Note is up slightly, with its yield falling to 0.89%.
    Click here for more economic information, including the cost of crude oil for the last 12 months.

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    FDIC State Profiles for Third Quarter Now Available

    The FDIC has
    released banking and economic data for the third quarter of 2008 for each state. In Illinois, unemployment increased from 5.2% on 9/30/07 to 7.1% on 9/30/08. Illinois had 659 bank and thrift charters on 9/30/08 compared to 678 charters on 9/30/07. During that period, total banking assets increased to $403 billion from $386 billion; median return on assets declined to .75% from .88%; and net interest margin remained steady at 3.55%.

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    Democrats May End Minimum Tax on Munis to Spur Market

    In an effort to increase funding for housing projects, airport runways and other municipal development, congressional democrats are pushing for a new tax break for municipal bondholders. The break would exempt the interest from the alternative minimum tax.
    More information.

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    Treasury Invests $2.8 Billion of TARP Funds in 49 Banks

    On December 23, 2008, the Treasury announced that it has committed to invest $2.8 billion in 49 banks through the Capital Purchase Program, a part of the Troubled Assets Relief Program (TARP). In exchange, the Treasury will receive preferred stock and warrants from the financial institutions.
    More details.

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    St. Louis Fed Creates Financial Crisis Timeline

    Now available on the web site of the Federal Reserve Bank of St. Louis is a
    timeline of major financial events and policy actions dating back to August of 2007. The site will be periodically updated as further events unfold. A link to the site will also be available on the CBAI web site section titled “CBAI Information on the Financial Crisis.”

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    Federal Regulators Issue Identity Theft Brochure

    The updated brochure, “You Have the Power to Stop Identity Theft,” addresses primarily Internet “phishing” and includes contact information for the major credit bureaus and where to report suspicious e-mails.
    More information.

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    Federal Regulators Release CRA Threshold Adjustments

    The federal agencies recently
    released the annual adjustment to the asset-size thresholds used to define small and intermediate banks and small and intermediate savings associations as required under CRA regulations.

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    Camden Fine on Obama’s Challenges in the Financial Arena

    ICBA President Cam Fine explores the challenges facing President-elect Obama and other banking issues for 2009. For his views,
    click here.

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    Blankenship Offers Quick Review of 2008 with a Look Ahead to 2009

    ICBA Chairman Cynthia Blankenship puts her own
    perspective on what 2008 wrought, and her hopes for what’s to come in 2009.

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    FDIC Releases Five-Year Strategic Plan

    FDIC Chairman Sheila Bair released the agency’s long-term strategic goals and objectives for carrying out its core mission. She noted that no depositor has ever lost a penny of insured deposits and gave assurances that no depositor ever will.
    See Message and Strategic Plan.

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    Chicago Fed National Activity Index Declines in November

    All four broad categories of economic indicators that comprise the Index declined in November, reflecting weakening economic activity. The decrease was driven mainly by employment-related indicators.
    See Full Report.

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    State Budgets Facing Tough Times in Midwest

    The Federal Reserve Bank of Chicago compiled economic and budget forecasts for the five Midwestern state in the Seventh Federal Reserve District. For Illinois, base revenues for FY2009 are projected to be down 1.9% from the previous year, resulting in a $1.3 billion budget shortfall.
    More information.

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    Farm Production Costs May Not Be As High As Predicted

    A University of Illinois farm management specialist recently stated that production costs next season will not be as high as originally feared based on lower energy costs. However, production costs are still on track to surpass the historic highs reached in 2008, and combined with lower commodity prices many farmers could be mired in an economic stranglehold in a matter of months.
    More details.

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    2009 Real Estate Forecast: More Trouble

    The mortgage problems that pushed the nation into recession in 2008 could amplify in 2009, according to market analysts. The impact of rising unemployment on foreclosures and sales is cited as the biggest concern.
    More information.

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    Retailers Face Wave of Store Closings

    With holiday sales the worst in 40 years, analysts predict that 12,000 retail stores will close in 2009, including high profile chains AnnTaylor, Talbots, Sears, Circuit City, and Sharper Image.
    More information.

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    2009 CBAI CEO Forums

    The CEO Forums provide community bankers an opportunity to discuss important issues and timely events with non-competing community bankers. Benefits of participation include gaining access to highly-respected experts in community banking; learning about critical banking issues, profitable products, and services; discovering cost-cutting concepts; and forming lasting relationships with other CEOs. Based on compatibility, the CEO Forums meet quarterly with a facilitator on a date and at a location determined by Forum members. For more information and a registration form, please
    click here or contact Sandra McAvoy at the Association at 800/736-2224.

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    CBAI Senior Lender Forums

    The CBAI
    Senior Lender Forums meet at the CBAI Headquarters in Springfield. Paul Sims, president of Guided Solutions, Franklin, TN, facilitates the forums. Sims has 28 years in commercial banking and financial services, and has served as senior lender and chief operating officer for a community bank, managed asset-based lending and other specialized lending functions, and was director of bank services for a vendor to community banks. He holds a MBA for the University of Chicago and an undergraduate degree from Vanderbilt University.

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    Ten Key Elements for an Effective Onboarding Strategy

    From the first few minutes of an account opening through the entire first year, financial institutions are faced with a make-it-or-break-it window of opportunity.
    Research shows that new customers are the most likely to purchase additional products and services. Paradoxically, they are also the most likely to leave. Attrition during the first year ranges from approximately 35% to 45% — that's two times higher than the rate of attrition among established account holders. Effective onboarding counters this problem by establishing an early and meaningful dialogue with new customers — enhancing and strengthening relationships from the very start to pave the way to a long-lasting, mutually beneficial relationship.

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    Take The Health Savings Account Survey

    The U.S. Department of the Treasury predicts by the year 2010, HSA policies will account for more than $14 million, covering 25 to 30 million people.

    Find out how other organizations are preparing. Wolters Kluwer Financial Services, a CBAI endorsed partner, developed a
    quick survey, which only takes a few minutes to complete. Once the results are tallied, we'll forward them to survey participants, so you can get a better perspective of the market.

    For information regarding the Wolters Kluwer HSA survey, please contact Matt Haupert.

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