name game - cbiaonline.org...“matures”, “baby boomers”, “generation x”, and...
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2 COMMUNITY BaNker UpdaTe | AUGUST 2015
want to attenda webinar?
View a complete calendar andregister for CBI-sponsored webinarsand events at www.cbiaonline.org
or Call Us at 515.453.1495for more information.
Social Media Workshopincluding Local Community Bank Case Study
August 19-21
September 23-24
St. Charles, Missouri
Omaha, Nebraska
Bonus session August 19
Bonus session September 23
Presentations on:
For a conference brochure, go to www.mibanc.com and click on Upcoming Events.
Bonus Session Member FDIC
• DeliveringaRed-CarpetCustomerExperience• Fraud&PaymentSecurity• ERMThatCreatesValue• WhatShouldbeontheMindofCEOs• EMVCardRequirements• VendorManagement–TheBigPicture• MakingtheMostofSARs• TheEvolvingThreattoBankOperations• DebitFraudTrends• Andmanymore
Regulatory panel included
auGust 2015 webinar line-uP
Aug. 4 FairLendingComparativeFileReview
Aug. 5 CrossSelling&ReferralOpportunitiesfortheFrontline:StrategiestoEnhance theCustomer’sExperience&GrowtheBank
Aug. 6 NewAccountsSeries:BusinessAccountSignatureCards&Resolutions: Entities,Authority&Documentation
Aug. 11 Garnishments,Subpoenas,Summonses,Levies:HandlingOfficialDemands forCustomerFunds
Aug. 12 AdvancedCommercialLoanDocumentation
Aug. 13 CFPBIncomeVerificationRulesforSelf-EmployedBorrowers:TaxImplications forQualifiedMortgages
Aug. 18 Website&SocialMediaCompliance
Aug. 19 USPAPIssues&BestPracticesforResidentialAppraisalReviewers: AvoidingViolations
Aug. 20 BSAComplianceSeries:HowtoRedesignYourBSAProgramtoImpactYour BottomLine
Aug. 25 EmergingLeaderSeries:DebtServiceCoverageCalculationsinUnderwriting
Aug. 26 MasteringtheSBA7aLoanPart3:Servicing,Liquidation&GuarantyPurchase
Aug. 27 Facebook:UpdateonSystem,Strategies,Techniques&Tips
Aug. 31 The20MostImportantThingstoKnowAboutTRIDComplianceBeforethe RevisedOctober3Deadline
COMMUNITY BaNker UpdaTe | AUGUST 2015 3
In This Issue
August2015WebinarLineup...................... 2
Guest Feature: Making the Case for Main
StreetbyCamFine,ICBA............................. 3
Recap:44thAnnualConvention..............4-8
OnlineBoardPortals.................................... 9
8thAnnualGolfTournament.....................10
ApplePay....................................................11
ManagingAgriculturalCreditRisk.......12-15
RuralMainstreetSurvey...................... 16-18
CommunityBankersforCompliance
FallSession................................................20
LOTQuarterlyMeeting...............................20
CBIAffiliate&AssociateNews..................21
EVENTS CALENDAR8th Annual Golf Tournament...Aug. 11
LOT Quarterly Meeting............ Aug. 20
Certified Community LenderCertification Renewal............... Aug. 20
Community Bankers for ComplianceFall Session......................Sep. 22 & 23
Community Banking SummitsFall Sessions........................Oct. 13-15
LOT Quarterly Meeting.............Nov. 19
Community Bankers of Iowa1603 22nd St, Suite 102
West Des Moines, Iowa 50266Phone: [email protected]
Making the Case for Main StreetAmerica’s regulatory system unjustly favors the megabanksWritten By Camden Fine, President and CEO of ICBA
Byitsverydefinition,theword“justice”equateswithrightfulnessandjustnessofgroundorreason.That’swhythetoo-big-to-fail
regulatorydebateleavesmeperplexedandconcernedaboutthewellbeingofthisgreatnation.
Ifweareacountrybuiltuponlibertyandjusticeforall,whyisoureconomicandregulatorysystemsounjustlytiltedinfavoroftoo-big-to-failfinancialinstitutionsledbytoo-big-to-jailmanagementteams?Whyisoureconomicsystemoperatingonthemantraof“anotherday,anotherfine”?Howisthatright?Howisthatjust?HowisthatAmerican?
Takeforinstancetheforeign-exchangefinesthatwerehandedoutinMaytoJPMorganChase,Citigroup,Barclays,UBSandRoyalBankofScotland,allofwhichpledguiltytocriminalchargesthattheyactedinconcerttomanipulateinternationalinterestratesandforeigncurrencyexchange.Overthespanofseveralyears,thesebanksbilkedbillionsofdollarsfromunsuspectingcompanies,internationalinvestorsandindividualsbyalteringratesintheirfavor.
Andasweknowalltoowell,thisisn’tthefirsttimethesebankshavehadproblemswiththelaw.BothJPMorganandCitibankhavebeenheldliableformortgagesecuritiesfraud.JPMorganhasalsobeeninvolvedin‘LondonWhale’trading,therobo-signingscandal,electricitymarketmanipulation,andmunicipalbondtradingfraud.ForUBS,thiswasthethirdcriminalsettlementinsixyears.
Andtheresult?Fines.Accordingtorecentestimates,thenation’slargestfinancialinstitutionshaveaccumulatedmorethan$150billioninbankfinesandpenaltiessincethefinancialcrisis.
ButisthisenoughtostopWallStreet’swrongful,unjustdoing?Ifhistoryisanyguide,theanswerisadefinitiveno.ThisissimplyanothergovernmentslaponthewristfortheWallStreetmegabanks,andjustanotherbusinessexpenseontheirfinancialstatements.Whenwillthegovernmentrealizethatfinesdon’tworkforthesefinancialbehemothsandtheirmanagements?Finesarenothingmorethananecessarycostofdoingbusiness.
Thisiswrongandneedstostop.
Bycontrast,communitybanks—homegrownbanksthatareembeddedintheircommunitiesduringgoodtimesandbad—lending,servingandsupportingtheeconomicbackbonethatdriveslocalsmallbusiness,agricultureandconsumerfinancialstability—arebeingsuffocatedbyregulationsandregulatoryscrutinythat’schokingthelifeoutofMainStreet.
TakeforinstancethephonecallIreceivedfromthe$45millionassetcommunitybankwitheightfulltimeemployeesinatownoflessthan2,000citizenswhotoldmehisbankhasbeenswarmingwithregulatoryexaminersforweeksonend,pouncingonanyminorerrororsmallmissteptheycanfind.Orthe$83milliondollarassetcommunitybankthathadits16officersanddirectorsdraggedtocourt,andtheirassetsseizedfor“poorjudgment”inapprovingloans.HowoftendoyouseeWallStreettoo-big-to-failofficersanddirectorsdraggedintocourtforusing“poorjudgment”?Never.Evenwhenpleadingcriminallyguilty.
(Making the Case for Main Street continued on page 22)
4 COMMUNITY BaNker UpdaTe | AUGUST 2015
The Week That WasRecap: 44th Management
Conference & Annual ConventionHundredsofcommunitybankers,spouses,children,andexhibitorsgatheredatCBI’s44thManagementConference&AnnualConvention,thelargestcommunitybankgatheringinIowa,heldJuly15-17,2015inOkoboji.TheConventionrepresentstheimportanceofcommunitybanks’personalserviceandcommitmenttotheircustomersandthecommunitiestheyservewiththetheme“WhereEverybodyKnowsYourName.”
ThisreunionofbankersandtheirfamiliesfromacrossIowawereinformedandentertainedbynationallyrecognizedspeakers,andshownnewproductsandservicesattradeshowexhibits.ManyattendeeshavecalledCBI’s44thAnnualConvention“thebestconferencewiththebestspeakersinalongtime”.WereyouwithusinOkobojilastweek?Ifyouskippedit,here’swhatyoumissed:
OnDay1,acquaintancesbecamefriendsonthegolfcourseduringtheMixed Pair Golf Tournament,andinfishingboatsduringthe11th Annual Catch-and-Release Tournament.ThateveningduringtheKickoff Reception,communitybankersfromaroundthestatewerehonored,andtheLeaders of Tomorrow(LOT)grouppresentedscholarshipstotwoexemplaryIowastudents.(Read more about the awards and their recipients on pages 6-8.)
OnDay2,speechesandpresentationsontimelytopicsfromhighcaliberguestspeakersinthebankingindustryprovidedadvice,newideas,andinsightthatbankersandaffiliatescanuseintheirbusinessesandtheirpersonallives.AttheBankers’ Roundtable Breakfastthatmorning,ICBAMarketingVPChris Lorencegaveabreakdownof“thoughtleadership”--theusesofsocialmedia,typesofthoughtleaders,andthestepstogetstartedoncreatingorimprovingyourbank’ssocialmediaprogram.LaterattheFirst General Session,Professor James Olsonrecountedhisandhiswife’s30yearexperienceasCIAagents,includingthetrialsofcomingoutfromundercovertofriendsandfamily.Then,motivationalspeakerChip Eichelbergerexplainedthatreevaluatingyourdailyroutineandtakingcareofyourselfisjustasimportant,ifnotmoreso,thantakingcareofyourbusiness.Histheoryofgetting“SwitchedOn”involvesworkingsmarter,notharder,andsuccessstartswithhowengagedyouareandhowwellyourespondtoadversity.
BreakoutSessionsonDay2alsoofferedbankerstheopportunitytolearnmoreaboutissuescurrentlyimportanttothebankingindustry.TheRegulators’ PanelbreakoutsessionfeaturedFederalReserveBankofChicago’sIowaRegionalDirectorJeff Jensen,IADivisionofBanking(IDOB)SuperintendentJim SchipperandFDICRegionalDirectorJames LaPierre,backbypopulardemandtoanswerquestionsonthecurrentstateandfutureoftheregulatorylandscape.SHAZAM’sSeniorVPofMarketingDan KramerandSeniorPRManagerPatrick Dixshowedusthedos,don’tdos,andNEVERdosintheirbreakoutsession“Trends In Data Breach Response”.ICBA’sChrisLorencewasbacktomediateaSocialMediadiscussionpanelincludingKaley Fleig,VPofOperations&CompliancewithIowaStateBank&Trust-FairfieldandJoleen Fleming,SeniorVPatFirstCitizensNationalBankinMasonCity.
Spousesandfamiliesweren’tforgotteneither.Ataspecial“Cheers
for Women” BreakfastonDay2,theladiesreviewedhandmadeitemsfromViBellaJewelry,andlistenedtocompanyrepresentativeHeidiKooikerrecounttheViBellastory.Laterthatafternoontheygave“A Toast to the Arts”andtouredthegalleriesatPearsonLakesArtCenter,thenenjoyedacocktailhourintheCenter’sgazebo.TheGala/Auction and TradeshowheldlaterthatnightwasanothersuccessfulfundraisingeventforCBI’sPAC.BankersandtheirfamilieswereabletoreviewproductsandservicesbyCBI’sEndorsedandAffiliateServicemembersatthetradeshow,whilesamplingvariouswinesandappetizersandparticipatingintheCBIPACsilentandliveauctions.
TheTown Hall BreakfastmeetingonDay3hadIowaSecretaryofAgricultureBill Northeyasaguestspeaker,followedbyWinnebago Industries CEO Randy PottsandCFO Sarah Nielsentogiveamorein-depthlookatWinnebago’shistory.IntheSecond General Session,IDOBSuperintendentJim SchipperreturnedtogiveareportonbankingandeconomicconditionsinIowa.HewasfollowedbyICBAImmediatePastChairmanJohn BuhrmasterwhoupdatedattendeesonICBA’sregulationpolicyeffortsinWashington.Healsooutlinedpastsuccessesandgavenoticeonfutureregulatorybattles,suchastheproposaltoreduceFedstockdividendspaidtobanksaspartofaplantofundtheHighwayTrust.
KeynoteSendoffSpeakerJeff HavenscappedoffSecond General Sessioneventswithhislaugh-out-loudpresentation“US! vs. THEM!: Understanding Millennials”.Hedetailedthedifferencesbetween“Matures”,“BabyBoomers”,“GenerationX”,and“GenerationY”(commonlyknownas“millennials”),showingthattheoldergenerationsarenotreallyasunbendingastheyseem,andthenewestgenerationsarenotlazyorunengaged,merelyisolatedinaglobalworldcausedbytheadventoftheinternet.Havensthensuggestedmethodsthatthevariousgenerationscanusetomeeteachotherhalfway.TheBankers’ Golf TournamentatBrooksNationalGolfClubthenclosedanothersuccessfulConvention.
CBI’s44thAnnualConventionhascomeandgone,buttherearemorechancestoexperienceandparticipateinCBI’svaluableandinformativeevents.If you didn’t join us at convention this year, attend the 8th Annual Golf Tournament to benefit CBI’s PAC (see more on page 10), or the Fall Community Banking Summits being held October 13-15, in Carroll, Johnston, and Algona.
Thank you to everyone who joined us “Where Everybody Knows Your Name”, and a BIG thank you to our Convention Sponsors. We couldn’t do it without you! And visit us online at cbiaonline.org to check out the Convention Photo Galleries!
Don’t miss out! Save the date for next year,July 13-15, 2016. We’ll see you then!
COMMUNITY BaNker UpdaTe | AUGUST 2015 5
Immediate Past Chairman John Buhrmaster breaks down ICBA successes for community banking in Washington.
Keynote Sendoff Speaker Jeff Havens closes the Convention at
the Second General Session.
SHAZAM’s Dan Kramer discusses the latest in data breach response
issues during the Breakout Sessions.
Professor James Olson gives an account of his life as a spy for the CIA during the First General Session.
IA Sec’y of Agriculture Bill Northey at the Town
Hall Breakfast.
CBI’s 2015/16 Executive Committee. L-R: Corporate Secretary Don Hole and Nancy Hole, Treasurer Cameron Miles, Lisa Ludwig and CBI 2015/16 President Randy
Ludwig, Bonnie Dixon and Immediate Past President Rob Dixon.
Above: Fisherman pose for a group photo at the 11th Annual Catch and Release Fishing Tournament. Below: Convention attendees visit exhibits, bid
on auction items, and talk shop at the Gala/ PAC Auction and Tradeshow.
Below: Enjoying refreshments at the Kickoff Reception.
Motivational speaker Chip Eichelberger shows Convention attendees how to“Get Switched On” to improve their business and personal lives.
6 COMMUNITY BaNker UpdaTe | AUGUST 2015
CommunitybankersfromacrossIowawererecognizedduringtheCBI’sawardsceremony,heldduringtheKickoffReceptionatthe44thManagementConferenceandAnnualConventioninOkoboji,Iowa.TheRobertD.DixonFounders’Award,establishedin2003,isthemostanticipatedandhighlyregardedhonoroftheceremony.MartiRodamaker,President&CEOofFirstCitizensNationalBankinMasonCitywasnamedthe2015recipientofthisprestigiousaward.ShewaspresentedwithaplaquebyRobDixon,sonofRobertD.Dixonwhoco-foundedCBI(thenIowaIndependentBankers)in1972.AboutRodamaker’scommitmenttobankingandhercommunity,anominatingbankersaid:
“By definition this award represents an individual dedicated to community banking, their community, and involvement in Community Bankers of Iowa, ICBA, and the industry in general. I can think of no one who more accurately fulfills this definition than Marti Rodamaker.”
Aftergrowingupinabankingfamilywithstrongleadershipbypredecessorswhoprovidedamodeltoemulate,Rodamakerfoundemploymentinbankingfollowinganeducationineconomicsandfinance.SheeventuallyjoinedthefamilybankandquicklyclimbedtheladderleadingtotherolesofChairman,President,andCEOofoneofIowa’sstrongestbankingenterprises.RodamakerhasvolunteeredforvariouspositionsonboththestateandnationallevelsandhasbeenactivewithICBA,becomingChairmanofsuchcommitteesasICBASecurities,DirectorofICBA
Reinsurance,ChairmanoftheLendingCommittee,andcurrentlyservesasChairmanofICBPAC.Inaddition,shehastestifiedonbehalfofICBAbeforetheFinancialServicescommitteeoftheUSHouseofRepresentatives.RodamakerhasperformedexceptionallyinleadershippositionseventuallysucceedingtothePresidencyofCommunityBankersofIowa,andwasappointedbyGovernorBranstadtotheIowaPartnershipforEconomicProgressBoardforEconomicDevelopment.TheFounders’awardwascreatedtorecognizethosebankerswhoembodycommitmentandrepresentthebestincommunitybanking,towhichtheyhavedevotedtheirlivesandlivelihoods.Rodamakercontinuesthetraditioninthisfellowshipofexcellence.
Above: 2015 Robert D. Dixon Founders’ Award recipient Marti Rodamaker poses with family at the Kick-Off Reception
of the 44th Management Conference & Annual Convention.
Above: 2014/15 CBI President Rob Dixon presents Marti Rodamaker with the Robert D. Dixon Founders’ Award.
Marti Rodamaker Honored By Community Bankers of IowaNamed 2015 Robert D. Dixon Founders’ Award Recipient
Jen Trenary Selected as the 2015 “Up and Coming Banker of the Year”Annually,onecommunitybankerisrecognizedbytheirpeersfortheirperformanceandachievementsinbankingastheUpandComingCommunityBankeroftheYear.JenniferTrenaryofRolfeStateBankwasannouncedasthe2015recipientatCBI’s44thAnnualConvention.
TrenaryisCashierofthebank,ComplianceOfficer,BSAOfficer,AssistantTrustOfficer,CommercialLoanOfficer,andfillsmanyotherroles.Aswellasinherexemplaryperformanceatthebank,Jenwas
chosenduetoherintegralinvolvementinactivitiesandpromotionofthetownofRolfe,Iowaandsurroundingareas.
AboutJen,HeidiBrown,VicePresidentofCitizensStateBankinSheldonsaid:
“In her many capacities serving the bank, along with her daily operational responsibilities, [Jen] is a member of nearly
every budget, audit, IT and seemingly endless list of committees charged with managing affairs of the bank. All this is done while meeting all the ethical and regulatory standards that we are bound by as we attend to the needs of our clientele. It is a challenging chore to balance the needs and demands of the public while meeting the supervisory expectations, but we have found her to be up to that challenge in all respects.
She projects all the same personal attributes outside the bank through her involvement in an exhausting list of community services.”
TheUpandComingCommunityBankeroftheYearAwardispresentedbytheLeadersofTomorrow(LOT).LOTisaprogramcreatedbyCBItoenhancethegrowth,leadership,andnetworkingskillsoffuturebankingleaders.LOTestablishesanetworkofleaderswhoserveandstrengthentheircommunitiesandadvocateforthecommunitybankingindustry.
Up & Coming Banker of the Year Award Committee Chair Heidi Brown presents the award to 2015 recipient
Jen Trenary.
2015 Up and Coming Banker of the Year
Award recipientJennifer Trenary of
Rolfe State Bank.
COMMUNITY BaNker UpdaTe | AUGUST 2015 7
Making a Difference in Fort MadisonLee County Bank & Trust Is the
2015 Community Banking Month “Best-of-the-Best” AwardeeIndependentcommunitybanksacrossIowahaveanimportantroleandimpactintheirlocalcommunities.CBI’sBest-of-the-BestAwarddistinguishesacommunitybankinIowathatepitomizeshowcommunitybanksaremakingadifferenceonMainStreet.Theyear-roundeffortsofonebankearnedthemCBI’sCommunityBankingMonthBest-of-the-BestAward.LeeCountyBank&TrustinFortMadisonwasrecognizedasthe2015recipientduringCBI’sKickoffReceptionatthe44thAnnualConventioninOkoboji.
TheworkLeeCountyBank&TrusthasdonesendsaclearmessageabouthowcommunitybanksaremakingadifferenceonMainStreet.DuringCommunityBankMonth,theygaveout4,000miniaturecandybarsthatthewholebankhelpedwrapwithlabelsthatsaid“ProudtobeYOURCommunityBankand“ShopLocally”.Theypromotedseveralspecialprojectsduringthemonth,includingafooddrivefortheirlocalfoodpantry;afoodandcleaningsupplydriveforalocal,no-killanimalshelterandanEmployeeBookDriveforthepubliclibrarywhereover200booksweredonated.
LeeCountyBank&Trust’sthemeforthisyearwas“HelpingOurCommunityGrow”andtheyhandedoutafewhundredstarterplantstocustomers.Andon“ThankYouThursdays”,theytookturnstreatingcityemployeestobreakfast.Year-round,theytreatcustomerstowarmcookiesintheirbanklobbiesandpractice“RandomActsofKindness”.Eachmonth,twoemployeesaregivenanallowancetousetobrightenotherpeoples’days.
AstheBest-of-the-BestCompetitionwinner,LeeCountyBank&Trustreceivedthe“TravelingTrophy”,anhonorthatstayswiththebankuntilhandedovertothenexthonoreethefollowingyear.Thebankwillalsoreceiveapizzapartyfortheirstaff,hostedbyandcomplimentsofCBI.
Chad Ward, Vice President of the 2015 Best-of-the-Best Competition winner Lee County Bank & Trust, accepts the “Traveling Trophy”
from 2014/15 CBI President Rob Dixon.
44th annual cOnVentiOn tOurnament winnersfishinG tOurnament:Kris Ausborn-9-3/4”Perch
Stacey Snyder-18-3/4”SmallmouthBassJason Ryskamp-20-1/4”Walleye
miXeD Pairs GOlf tOurnament:1st Flight:
Don&ShariBakerTonyFahrenkrog,HeidiBrown
2nd Flight:SuzanneMeyers,RobDixonMary&StephenHowell
3rd Flight:Mike&BethHahn
Troy&TeriVanderStouwe
Pin PriZes:ClosesttoPin-TerryNielsenLongestDrive-JonPenceLongestPutt-MartyTrepp
bankers’ GOlf tOurnament:1st Flight:
RickAadland,BrianVanderWiltWadeGort,ScottThomson
2nd Flight:TomVanOverbeke,CharlieWalshThomasLarson,SteveVanEerden
3rd Flight:KellyPfeifer,BenYoder
TerryGreenley,TomVandeKamp
Pin PriZes:ClosesttoPin-TomLarson
LongestDrive-StevenRansdellLongestPutt-FranFleck
cOnGratulatiOns tO alltOurnament winners!
Visit our website at www.cbiaonline.orgfor complete listings.
8 COMMUNITY BaNker UpdaTe | AUGUST 2015
Leaders of Tomorrow Award Two ScholarshipsProviding Scholarships to High School Seniors for Its 13th Year
Certified Community Lenders:time to renew ccl Designations
ThedeadlinetorenewtheCertifiedCommunityLender(CCL)designationisAugust 20, 2015.Visitourwebsitetodownloadthe2015RenewalApplication.
DidyouattendCBI’sCommunityBankersforComplianceSpringSeminarheldApril14&15,ortheFDICBankersCollege,heldMay5?Get 6 hours of Continuing Education credit per day if you attended one or both of these events!
TolearnmoreaboutreceivingContinuingEducationcreditsorthecertificationrenewalprocess,visitourwebsiteorcontactPretty [email protected].
VisitourwebsiteformoreinformationontheCertifiedCommunityLenderprogramandhowyoucanapply.
EmmetsburgHighSchoolstudentEmily BonnstetterwasawardedoneofthetwoLeadersofTomorrow(LOT)ScholarshipsduringCBI’sawardsceremony,heldduringthe44thAnnualConventioninOkoboji.
Apartfromachievingastellaracademicrecord,Bonnstetterearnedacommunityservicecorduponhergraduationwithafullscheduleofextra-curricularactivities,includingstudentgovernment,schoolchoirandmusicals,andparticipatingonthecrosscountry,basketball,track,softballandvolleyballteams.
Emily’ssparetimewasspentvolunteeringinsucheffortsasassistingwithchurchprograms,volunteeringatlocalfundraisersandwashingfiretrucksforthecityofCylinder.
RequirementsfortheLOTscholarshipincludewritinganessaydetailingtheroleofcommunitybanks.Emilyspokefromfirst-handexperiencewhenshewrote:
“In my hometown, community banks are much more than a place to deposit money and takeout loans. These banks place an undeniable value in membership and togetherness while providing their customers with great care. I am currently employed seasonally at one of our community banks in town, and I have received a taste of what it takes to stay active in our community. These employees place a monumental value in knowing their customers on a first-name basis.”
EmilyBonnstetterwasnominatedforthescholarshipbyKyleAuten,VPofBusinessBankingforIowaTrust&SavingsBankinEmmetsburg.
2015 LOT Scholarship recipient Emily Bonnstetter
Ryan CrewfromSpencerHighSchoolwasawardedoneofthetwoLeadersofTomorrow(LOT)ScholarshipsduringCBI’sawardsceremony,heldduringthe44thAnnualConventioninOkoboji.
Alongwithanunbelievable4.06GPA,Ryanrackedupacademickudosincluding4yearsontheHonorRoll.HealsoreceivedAcademicLettersall4years,waspartoftheTalentedandGiftedprogram,andcarriedadvancedplacementcoursesin5differentsubjects.RyanservedontheStudentCouncilandwasClassPresidenthissophomoreandjunioryears.
Ryanalsomanagedtokeepupwithmanyextra-curricularactivities,suchashisschool’sDramaandSpeechclubs,ChoirwhereheservedasSecretary,andtheschoolband.Heparticipatedonthefootballandgolfteams,aswellasearninganotherletterontheswimteam.Ryan’schurch-basedand4-Hcommunityactivitiesisalsoanimpressivelist.
Inhisessayontheroleofcommunitybanks.Ryanwrote:
“One of the best things about my local bank is that when I enter its doors I immediately recognize the employees because they are all active in my community. They each make an effort to know me and to make me feel important. My dad decided to start his own retail agronomy business after working in the field for many years. [...]My bank partners with most small businesses in the community in the same way as my father’s business because it understands the needs of each. Working together like this makes Iowa small towns work and survive.”
RyanCrewwasnominatedforthescholarshipbyDennisBauman,LendingComplianceOfficeratAckleyStateBank.
2015 LOT Scholarship recipient Ryan Crew
Save The Dates!JOin us fOr the fall
cOmmunity bankinG summits
Tuesday, Oct. 13 - 3pmCarroll, IA • Santa Maria Winery
Wednesday, Oct. 14 - 3pmWest Des Moines, IA • Sheraton Hotel
Thursday, Oct. 15 - 3pmAlgona, IA • Algona Country Club
Contact Jackie Haley at [email protected] or 515.453.1495 to learn more or to discuss sponsorship opportunities.
Featuring Olympic Wrestler and CoachDan Gable as Keynote Speaker!
COMMUNITY BaNker UpdaTe | AUGUST 2015 9
Bynow,youprobablyknowthatweb-basedportalsolutionscanprovideyourboardofdirectorswithsecure,centralizedaccesstoaslewof
confidentialmaterials,includingmeetingminutes,trustandauditreports,loandelinquenciesandvotingarchives—dayornight,fromanywhere.And,boardportalsprovideasafe,simplifiedplatformforcommunicatingwithyourboard.
Indeed,boardportalsarepossiblythemostpopulartypeofonlineWebportals.Forboardmeetings,portalshavemadetheprintingandmailingofhugeboardpacketsathingofthepast.Andbeyondsavingtherelatedmonetaryresourcesandmanhours,conveningmembersonlinemeansyouneedn’tworryaboutboardreportsgettinglostinthemail.Aboardportalnotonlykeepsthesereportshighlysecure,butalsoallowsinaccuratedatatobeupdatedornewinformationadded,evenatthelastminute.
Further,postingboardmaterialsonportalsgivedirectorsplentyoftimetothoroughlydigesttheinformationandmakesoundbusinessdecisions.Andifapastdiscussionitemisbroughtup,theycanquicklysearchforrelatedtermstofindallpastreferencesintheportal’sarchives.
Otherwise,themeetingsproceedmuchthesameasalways,withtheadditionofsuchgreateradvantagesasallowingmemberswhocan’tbephysicallypresenttoseethesamematerialsandinformationasthosewhoare.
Forafinancialinstitution,communicatingwithboardmembersthroughanonlineportalisanefficient,cost-effectiveand,mostimportantly,highlysecuremeanstokeepthemabreastofallaspectsofabank’sproceedings.Directorscanviewallcurrentandhistoricalmaterialsthemomentthey’reposted,andreceivealertswhennewcontentbecomesavailable.Theportalalsosafeguardsonlinevotinganddiscussionthreads,andletsyouassignpermissionstoensuredocumentsreachonlytheirintendedaudience.
And,directorscanmonitorsuchcriticalinformationasthestatusoftroubledassets,liquidity,capitalratiosandnetincome—informationthatchangesdaily.
Butfacilitatingasafe,paperlessboardroomistrulyjustthetipoftheicebergforsecureportaltechnologies.Employeeintranetsandloancommitteeportalsalsoprovideaneffectivealternativeforsecurelymanagingavarietyofsensitivedataandapplicationsenterprisewide.TheseonlineWebportalsrequireallthesamesafeguardsasdoboardportals,includingloginandpasswordverification,toensureallmaterialsremainprotected.
Simplify Loan Committee ProceedingsAloancommitteeportalstreamlinesloanmanagementactivitiesbyprovidingaprotectedlocationforcommitteememberstosaveandstoreloandocumentssothey’rereadyforboardreview.
Forexample,thecommitteecanpostloanmaterialsonaportalworkspacethat’sdedicatedtoaparticularloan,andnotifydirectorsthattheloanrequirestheirreviewandapproval.Theboardisthenabletoreviewtheloandataonline,sharecommentswithothers,makepersonalnotationsandplacetheirdecision—whichisinstantlyavailableforviewingbytheloancommitteeandarchivedforfuturereference.
Inaddition,theloancommitteecaneasilymakerevisionsontheportalitself,allowingmemberstohostpaperlessloanreviewcommitteemeetingsandreducingtheneedtocirculatesensitivematerials.
Streamline Employee CommunicationsWhenitcomestoemployeeintranets,yourinstitutioncancapitalizeonseveraladvantages.Intranetssimplifydocumentsharingtominimizehardcopies,mailedmaterials,faxesandemails.Andwiththeirabilitytocentralizecommunicationandresourcedistribution,theyalsocanleadtoenhancedcollaborationandknowledgesharingaswellasimprovedproductivity,sinceemployeeshaveamoreefficientwayofinteractingwitheachotheracrossdepartmentsandbranches.What’smore,thissolutionprovidesanumberofhumanresourcefunctions,includingtime-keepingandattendance,vacationtrackingandpolicymanagement.
Anemployeeintranetalsooffersyourstaffproductivitytoolstobetterassign,manageandtrackworkflowsanddailytasks.
Strengthen Regulatory ComplianceAcriticalpointtorememberisthat,whenpartneringwithan(Online Board Portals continued on page 22)
Powerful Ways
Transcend the BoardroomOnline Web Portals
Written By: Bill EversSenior Business Development Director, Computer Services Inc.
10 COMMUNITY BaNker UpdaTe | AUGUST 2015
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Gary [email protected]
Gene [email protected]
EveryyearCBIhostsagolftournamentformemberstobuildrelationships,enjoyalittlecompetition,andraisefundsforCBI’sPAC.ThetournamentisnormallyheldeveryyearinSeptember.Thisyear,playanewcourseatanewtime!HitthelinkswithusAugust 11atHyperionFieldClubinJohnstonforCBI’s8thAnnualfourperson,bestshotGolfTournament.
NEW THIS YEAR,aBusinessSymposiumwillopentheevent,featuringapresentationonEconomicTrendsfromICBASecurities/ViningSparks,andakeynoteaddressfromI-CubsGeneralManagerSamBernabe.Prizeofferingshavebeenincreasedthisyearaswell!
REGISTRATION IS NOW AVAILABLE ONLINE!VisitourwebsiteorcontactJackie [email protected],ortoaskaboutsponsorshipopportunities.
CBIPACisCommunityBankersofIowa’snon-partisanpoliticalactioncommittee.CBI’spoliticaleffortsconcentrateondefendingtheviewsandneedsofindependentbankers,andontheissuesthatareofbenefittoIowa’scommunitybanksandtheirlocaleconomies.
August 11 • Hyperion Field ClubBusiness Symposium: 9am - NoonLunch: Noon • Shotgun: 12:30pm
CBI’S 8TH ANNUAL GOLF TOURNAMENT IS ALL NEW!
I-Cubs General Manager Sam
Bernabe will speak at the 8th Annual Golf Tournament.
COMMUNITY BaNker UpdaTe | AUGUST 2015 11
Nobodylikestobethefirstonetoaparty.It’salittleawkwardand,worse,thehostoftenisn’tready.Thebetterbetistobe“fashionablylate.”Itgivesthehostalittletimetosettleinsothey’reactuallyreadytowelcomeyoutoagreatexperience.
Somecommunitybanksmaybefeelinglikethey’relatetothepartywhenitcomestotheadoptionofApplePay™.However,asitturnsout,thosebanks—andtheircustomers—willbetheoneswhoarriveintimeforthebestexperience.
WenowknowalotmoreabouttheearlymistakessomebanksmadeintheenrollmentandvalidationprocessforApplePay.Thisisn’tafaultintheApplePaysystem.Rather,theissuecomesinhowbanksauthenticatethecardbeingenrolledactuallybelongstothepersonusingit.
WhenacardholderenrollsinApplePay,therequestcantakeoneofthreepaths:red,greenoryellow.• Red—Thismeanstheenrollmentrequestisriskyandit’llbe
declined.• Green—Thisisthepathofleastresistance.Therequestisa
low-riskrequest,andthecardholder’sabletosignupusinglimitedinformationfromthecard.
• Yellow—Thisincludesenhancedauthentication,meaningadditionalcardholderIDandverificationarerequired,therebyhelpingensuretherealcardholderistrulytheoneenrolling.
TheyellowpathisoneofthebestwaystopreventfraudintheApplePayenrollmentprocess.Why?
Well,earlyon,banksreliedontheusualauthenticationmethodsusedforcard-not-presente-commercetransactions.Thatmeanttheywereallowingtokenstobeactivatedinthegreenpathwithcommonlyknownvaluessuchasthecardnumber,expirationdate,cardholdername,ZIPcodeandthesecuritycodeonthebackofthecard.BankswantedtheexperienceofsigningupforApplePaytobeaseasyaspossiblefortheircardholders.Asyoucanprobablyguess,thisledtoproblemswithfraud.
FraudsterscouldenrollastolenorcounterfeitcardwitheaseonanyiPhone®andmakepurchaseswithoutmuchfearthey’dbedetected.Theproblemwithinsufficientauthenticationduringenrollmentforthebankwhoissuedthecardis,undernetworkrules,atokentransactionistreatedlikeacard-presenttransaction.Theliabilityforanyfraudfallssquarelyontheissuer,notthemerchant.
So,howcanbanksofferarelativelypain-freeApplePayenrollmentprocesswhileensuringenhancedsecurityforcardholdersandtheirorganizations?Theanswerisintheauthenticationprocess.Followingtheyellowpathisthewayforward.
Withyellowpathauthentication,thecardholder’scardinformationissenttothenetworktoissueatokenthesamewayit’sdoneinthegreenpath.However,withtheyellowpath,thenetworkinitiallyissuesaninactivetoken.Fromhere,thebank’srequiredtoperformaverificationprocess.AtSHAZAM,we’veworkedwithfinancialinstitutionstocreateanenhancedenrollmentthatensuresastrongidentificationprocessanddrivesdowntheriskoffraudallthewhilemakingsuretheenrollmentprocessisaneasyforthecardholder.
Inthenot-so-distantfuture,authenticationmayincludeuseofthePINassociatedwiththecard,addinganotherlayerofsecuritythecardholderwouldknow,butafraudsterwouldn’t.
Newformsofpayment,likeApplePay,areofferingbankcardholderschoiceandflexibilityinhowandwheretheyusetheircard.But,it’scriticalathoroughIDandvalidationprocessistakenintoconsiderationtoensurethepaymentssystemisn’tcompromisedalongtheway.
Terry Dooley is SHAZAM Network’s Executive Vice President and Chief Information Officer. For more information on CBI Endorsed Member SHAZAM, visit www.shazam.net.
Apple Pay Written By: Terry Dooley
Executive Vice President & CIOSHAZAM
Being ‘Fashionably Late’ Isn’t a Bad Thing!
When It Comes to
12 COMMUNITY BaNker UpdaTe | AUGUST 2015
Theroughly1,500agriculturalbanks1intheUnitedStatesplayacrucialroleintheU.S.financialsystembyhelpingmeetruralproducers’creditneeds(Figure 1, below).Assetsizecomparisonswithlargerfinancialinstitutionsunderstateagriculturalbanks’importantcontributionstoboththeirregionaleconomiesandtothebroadernationaleconomy.Marketconditionsinrecentyears,includingvolatilecommodityprices,escalatedfarmlandvaluesincertainregionsofthecountry,andrisingfarmproductioncosts,haveelevatedtherisksinagriculturallending,somuchsothattheFederalReserveBoardissuedsupervisoryguidanceinOctober2011onsupervisoryexpectationsformanagingagriculturalcreditrisk.2
Thisarticleprovidesahistoricalperspectiveonagriculturebankfailures,discusseslessonslearnedabouttheincreasedriskinagriculturallending,andreviewsaspectsofthesupervisoryguidanceoneffectiveriskmanagementpolicies.SincetheFederalReserveSystemsupervisesalargenumberofagriculturalbanks,itsexaminershavetheopportunitytoobserveawiderangeofriskmanagementpractices.Severalprovenriskmanagementpracticesandsomecommonmistakesobservedduringtheexaminationsofthesebanksarealsodiscussed.Thisanalysis,however,isnotall-inclusive.
Lessons Learned from a Past Farm Crisis and Common MistakesAgriculturalmarketsdeterioratedseverelyinthe1980s,affectingmanyagriculturalbanks.Althoughasignificantnumberof
agriculturebanksfailedinthe1980s,mostsurvived.3Thosebanksthatweatheredthecrisiswerecharacterizedashavingmoreconservativeandconsistentlendingstrategies,strongerriskmanagementpractices,andmoreformalizedcapitalandstrategicplanningprocesses.Infact,theboardsofthesurvivingbankshadgenerallyimplementedstrongriskmanagementframeworkswellinadvanceofadverseglobalmarketdynamics.Agriculturalbankfailuresinthe1980swerelargelyaresultofpoorlendingpractices,includingincompletefinancialandcashflowanalysis,overrelianceoncollateralvalues,poorlydevelopedlendingpoliciesandprocedures,poordocumentation,andaggressivemarketingtocustomers—withlittleconcernforcashflow.Moreover,manyborrowerswereaccustomedtoobtainingcreditwithminimalfinancialdocumentationbasedontheanticipationthatmarketpricesandassetvalueswouldonlycontinuetorise.Overall,oneofthebroadlessonslearnedfromthe1980sfarmcrisiswasthatconservativeandconsistentlyappliedriskmanagementsystemsemployedduringbothgoodandbadtimesenabledmostagriculturalbankstowithstandeventhemostsevereagriculturalmarketdownturns.
Inlookingbackatthe1980sandthemorerecentfinancialcrisis,itisapparentthatseveralcommonfactorscontributedtotheriseinproblembanks.Amongthosefactorswereweakriskmanagementpracticesandineffectiveriskcontrols.Policiesorproceduresthatdescribedthebank’srisktoleranceandprovidedtheparametersformanagingthoseriskswereoftenlacking.Therewasoftenaslowresponsetoidentifyinganddowngradingproblemloansbecauselendingpoliciesandriskmanagementprocedureswereoutdated,ineffective,ornonexistent.Inadequatetrainingofless-experiencedlendersoftenledtopoorloanunderwriting,loanstructuring,andcreditanalysis.
Withrapidlyincreasingrealestateprices,manyagriculturalbanksreliedtooheavilyoncollateralandmisjudgedfarmlandvalues.Whenconditionsworsened,borrowerequitypositionsand,ultimately,thevalueofcollateralavailabletoprotectthebankagainstlossdecreasedsignificantly.Examinersoftennotedthatcreditdecisionswerebasedoncollateralvaluesinsteadofborrowers’debtservicecapacity.Weakunderwritingcanleadtoproblemloansandloanlosses.Atmanyfailedbanks,competitivepressuresledtoinsufficientpricingforriskandrelaxedunderwritingstandards.Loanswerestructuredprimarilytomaintainbusinessrelationshipsandwerebasedon
Successfully ManagingRegardless of Agricultural
Reprinted with permission of Community Banking Connections®. Copyright 2015 Federal Reserve System.
Legal Disclaimer: The analyses and conclusions set forth in this publication are those of the authors and do not necessarily indicate concurrence by the Board of Governors, the Federal Reserve Banks, or the members of their staffs. Although we strive to make the information in this publication as accurate as possible, it is made available for educational and informational purposes only. Accordingly, for purposes of determining compliance with any legal requirement, the statements and views expressed in this publication do not constitute an interpretation of any law, rule, or regulation by the Board or by the officials or employees of the Federal Reserve System.
Written By: Nicholas Hatz, Assistant Vice President, Federal Reserve Bank of Kansas City–Omaha Branch, and Sandra Schumacher, Supervisory Examiner and Relationship Manager, Federal Reserve Bank of Minneapolis–Helena Branch
COMMUNITY BaNker UpdaTe | AUGUST 2015 13
management’spreviousexperiencewithborrowersratherthanoninformationinfinancialstatements.Cashflow,revenue,andbalancesheetforecastswereoftenunsubstantiated.Lendingdecisionsbasedoninsufficientcreditanalysisresultedinbanksnotunderstandingtheirborrowers’fullfinancialcondition.Whenmarketconditionsdeteriorated,borrowerswereexposedtorisinginputcostsandunstableprices,andthebankshadnoforewarningthattheborrowerswerefacingdebtrepaymentproblems.Theproperbalancebetweenmanagingcreditriskandsupportingacustomer’sneedsiscritical.Amismatchinamortizationperiodsmaystraincashflowandrepaymentability,forcingtheborrowertobecomenoncompliantwiththetermsoftheloan.
Supervisory Expectations for Effective Risk Management PracticesAsoutlinedinSupervisionandRegulation(SR)letter11-14,abank’sriskmanagementprogramshouldbecommensuratewiththesizeandcomplexityofthebank’sexposuretotheagriculturalsector.AsillustratedinFigure2(right),SRletter11-14outlinessixkeyriskmanagementpractices:assessmentofcreditworthiness,assessmentofcashflow,underwritingstandards,creditadministrationandcontrols,loanstructure,andsoundcollateralmarginsandevaluations.Managingriskintheseareasdoesnotnecessarilyinvolveavoidingtherisk;rather,itinvolvesemployingaconsistentapplicationofpracticesproventocontrolriskeffectivelywithinawiderangeofoutcomes.
Asoundriskmanagementprogramincludesaboardofdirectorsandmanagementteamthatunderstandcurrentissues,trends,andoverallconditionsinagriculturalmarkets.Factorsgenerallyusedtojudgethestrengthofthefarmeconomy,suchascommodityprices,productioncosts,farmlandvalues,andglobalmarkets,areillustratedinFigure3(following page).Accordingly,assessingemergingtrendsforeachofthesefactorsservesasasolidbasetoidentify,measure,monitor,andcontrolagriculturalcreditrisks.Monitoringmarketfactorsandtrendshelpsmanagementandtheboardtoidentifysourcesofpotentialvolatilityandmitigateexposuretothosevariousinfluences.
Assessment of Creditworthiness and Cash FlowAsoutlinedpreviously,prudentriskmanagementpracticesarealwaysrelevant,regardlessofagriculturalmarketconditions.Insufficientcreditanalysisandinappropriateloanstructureareoftenobservedasprecursorstoaproblemloan.Inmanycases,overrelianceoncollateralratherthancashflowasasourceofrepayment,generousloantermstowardfavoredcustomers,andinadequaterealestateappraisalsandevaluationsarecommonunderwritingpitfalls.Creditqualityshouldtakeprecedenceoverloanportfoliogrowth,andabankshouldnotallowthedesireto
Source:SRletter11-14,“SupervisoryExpectationsforRiskManagementofAgriculturalCreditRisk,”availableatwww.federalreserve.gov/bankinforeg/
srletters/sr1114.htm
buildrevenuestocompromisecreditstandards.Safetyofprincipalandassuranceofrepaymentwithinagreed-upontermsshouldbeatleastasimportantasprofitingfromthetransaction.Abankcannotchargeahighenoughinterestratetocompensateforaloanthatcannotbecollected.
Anothercommonmistakeisthatcashflow,revenue,andbalancesheetforecastsaretoooftenacceptedatfacevaluebasedonaborrower’sassurancesthatthenumbersareconservative.Suchforecastsareassumptions,andtheimportanceofverifyingtheassumptions’validitycannotbeoverstated.Consistentapplicationofacashflowsensitivityanalysisisusefulindetermininganoperation’sabilitytowithstandriskanduncertainty.Financialanalysissoftware,whichisreadilyavailableandeasytouse,mayhelpbanksassessaborrower’screditworthinessandanalyzecashflow.Suchsoftwaremayprovideamorethoroughanalysisofaborrower’srepaymentcapacityandhisorherabilitytoadapttostressedconditions.Examinershavenotedthatmanyagriculturallendershaveencouragedtheirborrowerstousethesetoolstobetterunderstandtheirownoperationsandfinancialconditions.
Underwriting StandardsRelianceonoutdatedorineffectivepoliciesandprocedurescouldpossiblyexposethebanktounnecessaryrisk.Asignificantnumberofpolicyexceptionscanindicatethatabankistakingonadditional(Agricultural Credit Risk continued on next page)
Agricultural Credit RiskMarket Conditions
14 COMMUNITY BaNker UpdaTe | AUGUST 2015
Source:SRletter11-14,“SupervisoryExpectationsforRiskManagementofAgriculturalCreditRisk,”availableatwww.federalreserve.gov/bankinforeg/
srletters/sr1114.htm
(Agricultural Credit Risk continued from previous page)
risksandthatunderwritingstandardsarenolongerinstepwiththecurrentenvironment.Itisimportantforbankstoadheretostrong,well-developedpoliciesandproceduresinthecurrentlendingenvironment,wherecompetitionforqualityborrowingrelationshipsremainsintense.Looseningloanunderwritingcriteriabasedonallegedoffersfromcompetitionshouldbeavoided.Whilelendersoftenstatethatexceptionsweregrantedtomeetcompetitivepressures,frequentcontraventionsofboard-approvedpolicyguidelinesmaycauseexaminerstoquestionwhethersuchloansshouldhavebeenmade.
Astrongpracticethatexaminershaveobservedduringtherecentupturninlandvaluesisthatmanylendershavenotusedthecurrentmarketassetvaluationsforlandinlendingdecisions.Bankswithstrongcreditriskmanagementprocesseshavebeenobservedsettingadollarcapperacre,generallybasedonhistoricalvalues,eventhoughrecentappraisalswouldsupportsoaringlandvalues.Inthisscenario,theborrowerisrequiredtoprovideupfrontcashorequityandadditionalcollateraltopurchasethelandandsecurefinancing,thuscreatingacushioniflandvaluesdecline.Byfollowingthispractice,thesebankshavemaintainedconservativeunderwritingstandards,unlikemanylendersintheearly1980sthatallowedloan-to-valueratiosforloanssecuredbyfarmlandtoexceed80percentbasedonthecurrent,albeitinflated,marketvalues.
Credit Administration and ControlsClearguidelinesshouldbeinplacetoidentifyandcorrectproblemloans.Delinquenciesareoftenthefirstindicationofproblemloansandusuallyreflectdeteriorationinaborrower’sfinancialcondition,suchasdecliningprofits,decreasingsales,increaseddependenceondebt,anddecreasedworkingcapital.Outdatedfinancialstatementsarealsoanindicationthattheborrowermaybeexperiencingfinancialproblems,astheborrowermaybereluctanttoprovidethebankwithcurrentfinancialinformation.Someaspectsareoutofthebank’sandfarmer’scontrol,suchasnaturaldisasters(forexample,flood,fire,hail,andcroporlivestock
disease);therefore,itisimportantforlenderstoensuresufficientinsuranceisinplacetoprotectassets.
Abankshouldalsohaveapolicythatclearlyindicateshowcarryoverdebtwillbefinancedandmonitored.Therearenohard-and-fastrulesonwhethercarryoverdebtshouldbeadverselyclassified,butthedecisionshouldgenerallyconsidertheborrower’soverallfinancialconditionandtrends.Inaddition,tohelpidentifyanysuddenmaterialincreaseintheborrower’sindebtednessordeteriorationinperformance,bankswithstrongcreditriskmanagementprocessesperformperiodiccreditbureauchecks.Finally,examinershavefoundinternalcreditriskratingstobeeffectivewhenbanksestablishloanreviewprogramstofurtherassistinidentifyingproblemloans.Whenexaminersidentifyproblemloansthatwerepreviouslyunknowntothebank,itgenerallyreflectspoorlyonmanagement’sabilitytoidentifyandcontrolcreditrisk.
Bynature,aruralcommunitybank’sloanportfolioisoftenhighlyconcentratedinagriculturallending.Recognitionofthepotentialconcentrationriskinthesebanks’capitalandstrategicplanningprocessesisparticularlyimportant.Regulatorsexpectthatmanagementortheboardwillensurethatmanagementinformationsystemsandmonitoringproceduresareformalizedandconsistentlycompleted.Monitoringofconcentrationlevelsshouldbedoneonagranularlevel,meaningthatthebankshouldmeasuremorethanabroadagricultureconcentration.Banksareencouragedtohavealoanportfoliodiversificationpolicyandsetprudentexposurelimitsforagriculturalloansbycommoditytype,geographicmarket,andindividualborrowingrelationship.Banksalsobenefitfromconcentrationreportsthataretrackedinrelationtocapitalatrisk,ratherthanonlytrackingconcentrationsbythepercentageoftotalloans.
Loan Structure and Sound Collateral EvaluationsProperloanstructureandtermsarecritical.Improperstructureortermscouldleadtoinappropriatelylongamortizationperiodsoreventolenderliabilityissuesintheeventofaloandefault.Furthermore,itisgenerallyinappropriatetofinancepermanentworkingcapitalorotherlong-termneedsusingopenlinesofcredit.Loanstofundnoncurrentassetscarrygreaterriskwhenrepaymentisgeneratedbyfuturecashflow.Instead,repaymenttermsshouldbelinkedtotheprimarysourceofrepaymentfortheloanandtheusefuleconomiclifeoftheassetsbeingfinanced.
Structuringaloantoaborrower’sbusinessplansandcyclescanensurethatpaymentschedulesalignwithcashflows.Forexample,acropoperationsetuptomakemonthlypaymentsmayhavedifficultymeetingpaymentobligations,sinceitscashflowistypicallyconcentratedinthefallandwintermonthswhentheoperationsellsitsgrainafterharvest.Inthiscase,anannualpaymentschedulewouldbemorecloselyalignedtothetimewhentheborrower(inthiscase,thecropoperation)receivesincome.However,annualrepaymenttermswouldlikelybeinappropriateforadairyoperator,whichgenerallyreceivesmoreregularweeklyormonthlycashflows.Examinershaveobservedthatmanybankswithstrongcreditriskmanagementhaveappropriatelystructuredweakerloanswithanenhancementtosupportthecredit(forexample,anoutsideguaranteethroughtheUnitedStatesDepartmentofAgricultureorFarmServicesAdministration).
Collateralevaluationsshouldbewelldocumentedandperformedatafrequencycommensuratewiththeriskcharacteristicsoftheaccount.Frequentinventoryreports,borrowingbasecertifications,andloanofficervisitationsarestrongprocessesobservedby(Agricultural Credit Risk continued on next page)
COMMUNITY BaNker UpdaTe | AUGUST 2015 15
(Agricultural Credit Risk continued from previous page)
examiners.Forexample,livestockoperationsthathaveregularturnoverandvaluesthatfluctuatewiththemarketprice,suchasfeederoperations,requireperiodiccountsandinventorymonitoringtoensurethatadequatecollateralcoverageandcapitallevelsaremaintained.
ConclusionThepotentialalwaysexistsintheagriculturalsectorforreducedprofitabilityandincreasedborrowerstressbasedontheunknownanduncontrollablevolatilityinthemarketplace.Historicalhindsightprovidesexaminerswiththeopportunitytoanalyzewhathasworkedandwhathasnot.Lessonslearnedfrompasteconomicdownturnsinthefarmsectorshowthatagriculturalbanksthatpursuedmoreconservativelendingstrategiesandhadstrongerriskmanagementpracticeswithformalizedcapitalandstrategicplanningprocesseswerewellpositionedforboththeup-and-downcyclesofvolatileagriculturalmarkets.
Promptidentificationofrisksandappropriatemanagementstrategiestocontrolrisksareparamounttothesuccessofeverybank.Managingriskspresentsanadditionalchallengewhenabankisdependentonasinglesectoroftheeconomy—inthiscase,agriculture.Guidingbanksthroughgoodandbadtimesrequiresproactiveanddiligentmanagementoversight,aswellaseffectiveandinformedboardgovernance.Itremainsessentialforthefutureprosperityofagriculturalbankingthatbanksimplementprudentandconsistentriskmanagementstrategiesatalltimes,notonlyinstressedmarketconditions.
NOTES1Agriculturalbanksaredefinedasbanksinwhichfarmproductionandfarmrealestateloansequal25percentormoreoftotalloans.
2SeeSupervisionandRegulationletter11-14,“SupervisoryExpectationsforRiskManagementofAgriculturalCreditRisk,”availableatwww.federalreserve.gov/bankinforeg/srletters/sr1114.htm.
3SeeFederalDepositInsuranceCorporation,“HistoryoftheEighties—LessonsfortheFuture,”availableatwww.fdic.gov/bank/historical/history/
IowaTIB Ad1/2 pg.April 2015
16 COMMUNITY BaNker UpdaTe | AUGUST 2015
July Survey Results at a Glance:• TheRuralMainstreetIndexroseabovegrowthneutral,its
highestreadingsinceJanuaryofthisyear.• Farmlandpricesdeclinedforthe20thstraightmonth,but
withwidevariationsacrosstheregion.• Onaverage,bankersreporteda6.8percentfallinfarmland
pricesoverthepast12months.• Only11.9percentofbankersreportedthatfarmloandefaults
wereupfortheyear.However,54.8percentofbankersexpectfarmloandefaultstoriseoverthenextyear.
• Retailsalesriseforthemonth.
OMAHA,Neb.–TheCreightonUniversityRuralMainstreetIndexroseabovegrowthneutralforJulyfromJune’stepidreading,accordingtothemonthlysurveyofbankCEOsinruralareasofa10-stateregiondependentonagricultureand/orenergy.
Overall:TheJulyRuralMainstreetIndex(RMI),whichrangesbetween0and100,climbedto53.4,upfromJune’sgrowthneutral50.0,anditshighestlevelsinceJuneoflastyear.
“Thisisthefourthstraightmonththeindexhasrisen,indicatinganupturnineconomicconditionsfortheregion.Improvingcroppricespushedtheoverallindexandtheeconomicoutlookhigherforthemonth,”saidErnieGoss,JackA.MacAllisterChairinRegionalEconomicsatCreightonUniversity’sHeiderCollegeofBusiness.
Farming and Ranching:ThefarmlandandranchlandpriceindexforJulyincreasedslightlyto31.4fromJune’s31.1.“Thisisthe20thstraightmonththeindexhasmovedbelowgrowthneutral.But,asinpreviousmonths,thereisagreatdealofvariationacrosstheregioninthedirectionandmagnitudeoffarmlandprices,”saidGoss.Thismonthbankerswereaskedhowmuchfarmlandpriceshadchangedintheirareaoverthelastyear.Onaverage,bankCEOsreportedpriceshadfallenby6.8percentoverthepast12months.Sevenpercentindicatedthatfarmlandpricesintheirareahadexpandedovertheyear.“Approximately14percentregisteredadeclineof1to4percent,34.9percentreportedapricereductionof5to9percentand27.9indicatedfarmlandpriceshaddecreasedby10to20percent.Theremaining16.3percentreportednochangeinfarmlandpricesovertheprevious12months,”saidGoss.TheJulyfarmequipment-salesindexrosetoaveryweak17.9from
June’srecordlow12.5.Theindexhasbeenbelowgrowthneutralfor24straightmonths.“Withfarmincomeexpectedtodeclineforasecondstraightyear,farmersremainverycautiousregardingthepurchaseofagriculturalequipment,”saidGoss.
Banking:TheJulyloan-volumeindexdeclinedto72.1from79.9inJune.Thechecking-depositindexroseto53.4fromJune’s48.0,whiletheindexforcertificatesofdepositandothersavingsinstrumentswasunchangedfromJune’s38.6.
Thismonthbankerswereaskedaboutfarmloandefaultsoverthepastyearandexpecteddefaultsoverthenextyear.Only11.9percentreportedfarmloandefaultswereupfortheyear.However,54.8percentofbankersexpectfarmloandefaultstoriseoverthenextyear.
AccordingtoPeteHaddeland,CEOoftheFirstNationalBankinMahnomen,Minn.,“Farmersareholdingtheirown,butweexpectafewdefaultproblemsthisfall.”
Butinsomeareas,farmloandefaultsremainrare.Forexample,JamesShafer,CEOofTheFirstNationalBankinTremont,Ill.,reported,“(Mybank)hasnothadafarmloandefaultinthe40-plusyearsIhavebeenhere.”
Hiring:Despiteweakercroppricesandpullbacksfrombusinesseswithclosetiestoagricultureandenergy,RuralMainstreetbusinessescontinuetoaddworkerstotheirpayrolls.TheJulyhiringindexdippedslightlytoastillhealthy60.3fromJune’s61.5.“RuralMainstreetbusinessescontinuetohireadditionalworkers.RuralMainstreetcommunitiesaregrowingjobsatasolidannualpaceofapproximately1percent,primarilyinbusinessesnotlinkedtoagricultureorenergy,”saidGoss.
Confidence:TheconfidenceindexforJuly,whichreflectsexpectationsfortheeconomysixmonthsout,expandedtoaweak46.6fromJune’s45.9.“Recentimprovementsinagriculturalcommoditypricespushedbankers’economicoutlooktoaweak,buthigherlevel,”saidGoss.
Home and Retail Sales:TheJulyhome-salesindexsoaredto73.3fromJune’s68.1.TheJulyretail-salesindexincreasedto53.4from50.0inJune.“Thismaybeasignalthatwearefinallyrecordingincreasesinretailsalesstemmingfromthedownturninfuelprices,”saidGoss.Eachmonth,communitybankpresidentsandCEOsinnonurban,
(Rural Mainstreet continued on next page)
main street economic survey
C r e i g h t o nU N I V E R S I T Y
Rural Mainstreet Economy Improves for July:More than half of bank CEOs expect higher loan defaults
Ernie Goss
COMMUNITY BaNker UpdaTe | AUGUST 2015 17
(Rural Mainstreet continued from previous page)
agriculturallyandenergy-dependentportionsofa10-stateareaaresurveyedregardingcurrenteconomicconditionsintheircommunitiesandtheirprojectedeconomicoutlookssixmonthsdowntheroad.BankersfromColorado,Illinois,Iowa,Kansas,Minnesota,Missouri,Nebraska,NorthDakota,SouthDakotaandWyomingareincluded.ThesurveyissupportedbyagrantfromSecurityStateBankinAnsley,Neb.
Thissurveyrepresentsanearlysnapshotoftheeconomyofrural,agriculturallyandenergy-dependentportionsofthenation.TheRuralMainstreetIndex(RMI)isauniqueindexcovering10regionalstates,focusingonapproximately200ruralcommunitieswithanaveragepopulationof1,300.Itgivesthemostcurrentreal-timeanalysisoftheruraleconomy.GossandBillMcQuillan,formerchairmanoftheIndependentCommunityBanksofAmerica,createdthemonthlyeconomicsurveyin2005.
Colorado:Afterfallingbelowgrowthneutralforfivestraightmonths,thestate’sRuralMainstreetIndex(RMI)advancedto53.2,wellaboveJune’s48.6reading.Thefarmlandand
ranchland-priceindextumbledto12.7from29.1inJune.Colorado’shiringindexforJulydeclinedto52.9fromJune’s56.0.
Illinois:TheJulyRMIforIllinoisroseto53.6from49.7inJune.Thefarmland-priceindexslumpedto31.6fromJune’s34.1.Thestate’snew-hiringindexincreasedto60.5fromJune’s58.5.JimEckert,presidentofAnchorStateBankinAnchor,said,“Excessraininourareaissignificantlyhurtingcrops.Somesoybeanswereneverplanted.Corncropisclearlyreducedaswell.”
Iowa:TheJulyRMIforIowaadvancedto56.6fromJune’s51.8.Iowa’sfarmland-priceindexforJulyslumpedto43.9fromJune’s44.3.Iowa’snew-hiringindexforJulyjumpedto65.4from62.6inJune.
Kansas:TheKansasRMIforJulyroseto52.3fromJune’s48.2.Thestate’sfarmland-priceindexforJulysankto24.6fromJune’s26.5.Thenew-hiringindexexpandedto57.7from55.4inJune.
Minnesota:TheJulyRMIforMinnesotaroseto53.9fromJune’s
(Rural Mainstreet continued on next page)
Tables 1 and 2 summarize survey findingsNext month’s survey results will be released on the third Thursday of the month, August 20.
Table 1: Rural Mainstreet Economy One Year Ago and Last Two Months: (index > 50 indicates expansion)
July2014
June2015
July2015
Area economic index 51.8 50.0 53.4
Loan volume 79.8 79.9 72.1Checking deposits 53.5 48.0 53.4
Certificates of deposit and savings instruments 37.8 38.6 38.6Farmland prices 48.3 31.1 31.4Farm equipment sales 33.4 12.5 17.9Home sales 64.1 68.1 73.3Hiring 59.7 61.5 60.3Retail business 55.4 50.0 53.4Confidence index (area economy six months out) 42.9 45.9 46.6
Table 2: The Rural Mainstreet Economy, July 2015Percentage of bankers reporting
Up10% - 20%
Up1% - 9%
NoChange
Down1% - 9%
DownMore than 9%
Regardingfarmloandefaultsinyourareaoverthelastyear,defaultsare: 2.4% 9.5% 85.7% 2.4% 0.0%
Up10% - 20%
Up1% - 9%
NoChange
Down1% - 9%
DownMore than 9%
Regardingfarmloandefaultsinyourareaoverthenextyear,whatdoyouexpect? 4.8% 50.0% 45.2% 0.0% 0.0%
Increased 1% - 4%
No change
Decreased 1% - 4%
Decreased 5% - 9%
Decreased 10% - 29.0%
Whathasbeenthechangeinthepriceofanacreofcroplandinyourareaoverthepastyear? 7.0% 16.2% 14.0% 34.9% 27.9%
Follow Ernie Goss on Twitter: www.twitter.com/erniegossFor historical data and forecasts, visit: www2.creighton.edu/business/economicoutlook/
18 COMMUNITY BaNker UpdaTe | AUGUST 2015
(Rural Mainstreet continued from previous page)
52.6.Minnesota’sfarmland-priceindexdeclinedto37.4from40.5inJune.Thenew-hiringindexforthestateclimbedto62.8fromJune’s61.0.AccordingtoPeteHaddeland,CEOoftheFirstNationalBankinMahnomen,“Cropslookgreat.”
Missouri:TheJulyRMIforMissourideclinedto47.1from49.9inJune.Thefarmland-priceindexfellto13.9fromJune’s35.0.Missouri’snew-hiringindexdecreasedto53.4fromJune’s58.8.
Nebraska:TheNebraskaRMIforJulyclimbedto50.1from48.8inJune.Thestate’sfarmland-priceindexfellto21.4fromJune’s29.5.Nebraska’snew-hiringindexdippedto56.4from56.6inJune.AccordingtoJeffreyGerhart,presidentandchairmanoftheBankofNewmanGrove,“RainfallhasbeenprettygoodinnortheastNebraska,butpivotsarebeingturnedon.”
North Dakota:TheNorthDakotaRMIforJulydecreasedto50.6from52.6inJune.Thefarmland-priceindexfellto36.5from56.0inJune.NorthDakota’snew-hiringindexdeclinedto62.4fromJune’s67.2.
South Dakota:TheJulyRMIforSouthDakotaexpandedto56.7fromJune’s52.2.Thefarmland-priceindexroseto43.0from42.1inJune.SouthDakota’snew-hiringindexroseto65.0from61.7inJune.
Wyoming:TheJulyRMIforWyomingadvancedto52.5fromlastmonth’s49.2.TheJulyfarmlandandranchland-priceindexslumpedto27.9fromJune’s32.7.Wyoming’snew-hiringindexclimbedto59.0fromJune’s57.9.
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COMMUNITY BaNker UpdaTe | AUGUST 2015 19
ICBA_7169_2015 Ad Campaign_ICBA Reinsurance.indd 1 12/4/14 11:48 AM
20 COMMUNITY BaNker UpdaTe | AUGUST 2015
CommunityBankersofIowaispleasedtosponsortheannualCommunity Bankers for Compliance Program (CBC).TheFallSeminarSessioniscomingupSeptember 22-23 attheHilton Garden InninJohnston,IA.ForcurrentmembersoftheCBCProgram,attendanceattheFallSessionseminarisincludedwithprogramenrollment.CBCmembersandnon-membersmaychoosetoattendjustoneorbothdaysofthisinformativeregulatorypolicyseminar.
TheCBCProgramisthemostsuccessfulandlongestrunningcompliancetrainingprograminthecountry.Itprovidesyourbankwithup-to-dateinformationontheever-changingbankregulations,aswellasguidanceforstructuringandmaintainingyourin-bankcomplianceprogram.Theprogramhaspassedthetestofregulatoryscrutinyandhasreceivedapprovalfromtheregulatoryagenciesnotonlyforitscomprehensiveness,butalsoforitspracticality.
Who Should AttendIt is essential that your bank’s compliance officer attend.Butbecauseregulatorycomplianceshouldbeapproachedfromateamperspective,manybankshavealsofounditextremelybeneficialtosendadditionalemployeestosessionsontopicsthatrelatedirectlytotheirpositionsinthebank.
FormoreinformationortoregisterforCommunityBankersofIowa’sCommunityBankersforComplianceProgramFallSession,visitourwebsiteatwww.cbiaonline.comorcontactPretty [email protected].
Reduce your bank’s regulatory risk and register today to attend!
Community Bankers forCompliance Program
Fall Seminar September 22-23
CBI Members:$350 for each 1-day session
$150 for each additional representative
Non-Members:$550 for each 1-day session
$250 for each additional representative
FALL SEMINAR SESSIONSEPTEMBER 22-23, 2015
Hilton Garden Inn8600 Northpark Drive, Johnston, Iowa
2015 Community Bankersfor Compliance Program
Register Online at www.cbiaonline.org
Learn About Community BankingLeadership and Legal Issues
LOT’s Quarterly Meeting Is August 20 TheCommunityBankersofIowa’sLeadersofTomorrow(LOT)group’snextQuarterlyMeetingwillbeheldThursday,August20from9:00amtoNoon,attheStoneyCreekInninJohnston.Sendtheup-and-comingleadersinyourbanktothiseducational,networkingevent!
BelinMcCormickattorneyMatt McDermottwilladdressattendeeswithhispresentation“Leadership,theBostonMarathonandBankLegalIssues”.McDermottwillrelatehispersonalexperiencesinrunningtheBostonMarathonwhenitwasbombedin2013,andinrunningitagainin2014.Hewilldiscusslegalissuesinthebankingindustryaswell.
Iowa Senator Matt McCoy(D-21)hasalsobeeninvitedtogiveLOTmembersanupdateontheIowapoliticallandscape.
Visitwww.cbiaonline.org/lot-quarterly-meetings.htmlformoreinformationandtoregistertoattendthemeeting.
IfyouareinterestedinbecomingamemberoftheLeadersofTomorrow,contactusat515.453.1495,[email protected],orvisitourwebsiteatwww.cbiaonline.org.
COMMUNITY BaNker UpdaTe | AUGUST 2015 21
NewsfromCBIAffiliate&AssociateMembers
CommunityBankersofIowa(CBI),theIowaDivisionofBanking(IDOB),theCouncilofStateBankingSupervisors(CSBS)andtheIowaBankersAssociation(IBA)areco-sponsoringaone-dayseminar:theExecutive Leadership of Cybersecurity(ELOC).TheseminarwilltakeplaceonAugust 26 at the Sheraton HotelinWestDesMoines,from8:30am to 4:00pm.Registration is $125 per person for CBI, IBA, or CSBS members,andincludescontinentalbreakfast,lunch,breaksandseminarhandouts.
TheELOCseminarisdesignedforCEOsandseniorleadershiptodiscussthecurrentcyberthreatlandscape,thecollectionandsharingofcyberthreatintelligenceandbestpracticesincybersecuritymanagement.Thisprogramwillprovidelogical
andunderstandableideasforbankstoadoptindevelopingandmaintainingeffectivecybersecurityprograms.Thegoaloftheseminarisforyoutowalkawaymoreinformedaboutcurrentcybersecurityissues.
Who Should Attend:BankDirectors,CEOs,ChiefRiskOfficersandotherbankexecutivesareencouragedtoattend.This seminar is not designed to be a series of technical presentations. Information technology jargon will be kept to a mininum.
Formoreinformationandtoregister,visitourwebsiteandcheckouttheEducationsectiontodownloadtheeventregistrationflyer.
CBI to Co-Sponsor Executive Leadership of Cybersecurity (ELOC) Seminar - Aug. 26
CBIAssociateMemberFederalHomeLoanBankofDesMoines(FHLBDesMoines)hasannounceddetailsforthe2015StrongCommunitiesAward.BeginningonJuly20,2015,FHLBDesMoinesmembersandpartnerswillhavetheopportunitytowin$15,000topromotesmallbusinessgrowthandretentionintheircommunities.
Theawardrecognizesthevaluethatcommunitiesderivefromeconomicdevelopmentprojects,fromrecruitinganewgrocerystore,renovatingahistoricbuildingintheheartofthedowntowndistrictintoamulti-usefacility,supportingtheexpansionofatechnologyincubator,tounderstandingtheimportanceofprovidingopportunitiestosmallandminoritycontractors.
FHLBDesMoinesmembersandpartnersthroughoutthedistrict,including13-statesandthreeU.S.Pacificterritories,areeligibletoapply.TheapplicationperiodwillopenonJuly20,2015andnomineeswillbeacceptedthroughAugust 31, 2015.Theprocesstodeterminetwo$15,000winners,oneurbanandonerural,willfeatureavotingcomponentthatwillbeopentothepublic.
Formoreinformationabouttheawardorhowtoapply,visitwww.fhlbforcommunity.comorcontactMitchFastenau,FHLBCommunicationsandExternalRelationsCoordinator,[email protected].
FHLBDesMoinesprovidesfundingsolutionsandliquiditytonearly1,500financialinstitutionstosupportmortgagelending,economicdevelopmentandaffordablehousingintheircommunities.ForadditionalinformationaboutFHLBDesMoines,visitwww.fhlbdm.com.
NEW HIRES: Vantage Point Solutions
TwonewassetshavebeenaddedtotheteamatCBIAffiliateMemberVantagePointSolutions(VPS):Michele Lee,newRiskandRegulatoryComplianceManager,andPat EssigasaCreditReviewConsultant.
MicheleLeehasbeenacomplianceanalyst,internalauditorandloanofficerforlocalfinancialinstitutions.Shebrings17yearsofvaluableexperiencetoVantagePoint’sgrowingbankingdivision.Inrecentyearsshehasfocusedon
performingcompliancereviewsandservingasaliaisontoregulators.Shealsohasextensiveexperiencetrainingstaffonallregulatorychanges,andisespeciallywell-versedinconsumerlendingregulations.
With37yearsofbankingexperience,PatEssigisaseasonedveteranintheindustry.Hehasspenthiscareerasanagriculturalandbusinessbanker,acreditadministrator,andabranchmanagerandmarketpresident.HetraveledextensivelythroughoutIowaandSouthDakotaperformingcreditreviewoncommercialandagriculturalloanportfolios.Hisexpertiseincludesagriculturalandcommercialcreditanalysis,salescoachingandmanagement,creditreviewandportfolioduediligence,andloanworkoutsandproblemsolving.
Combiningprofessionalengineering,technicalexpertiseandextensiveregulatoryknowledge,VPSdesignscustomized,technicallyadvancedandeconomicallyviablesolutions.Formoreinformationvisitwww.vantagepnt.com.
Michele Lee, Risk and Regulatory Compliance Manager for VPS
Pat Essig, VPS’ new Credit Review Consultant
FHLB Des Moines Announces 2015 Strong Communities Award
22 COMMUNITY BaNker UpdaTe | AUGUST 2015
(Making the Case for Main Street continued from page 3)
Communitybankersaren’taskingforeasytreatment,theyjustwanttobetreatedfairlyandjustly.IfwecontinuedownthispathofspecialdealsforWallStreetfinancialmoguls,webetterbereadyforthefrighteningconsequencesthatwillalmostcertainlyleadustoournextfinancialcrisis.
Americadeservesbetter.AmericadeservesasystemwhereMainStreetanditscitizensareallowedtothriveandaren’tsuffocatedbyamisguidedregulatoryregimethatallowstheircommunity’sprimarysourceofcapitaltodeteriorate.
Incontrasttotherelativelynewphenomenonoftoo-big-to-failmegabanks,communitybankingintheUnitedStatesisasystemthathasworkedforcenturies.Itisasystemthatisuniquetotheglobalfinancialstructureandhashelpedmakeourcountry’seconomytheenvyoftheworld.Ifcommunitybanksdon’tdorightbytheircustomers,theyfail.Theyaren’tproppedupbytaxpayers.It’stheveryessenceofafreemarketsystem—akeyprincipleofthelibertyuponwhichAmericawasfounded.
IchallengeAmerica’slawmakersandregulatorstodowhat’srightandtoholdWallStreettothesamelawsandregulationsasMainStreet.Onlythenwillwetrulyhaveaneconomicandregulatorysystemthatisbuiltuponlibertyandjusticeforall.
Following Mr. FineMore than 1,000 people are followingCamden Fine’s tweets @Cam_Fine — are you?Visit www.twitter.com/cam_fine.
(Online Board Portals continued from page 11)
onlineportalprovider,youmustperformduediligenceonyourvendor’ssecuritycontrols,includingrelatedproof,becauseexaminerswillaskforit.
Thatsaid,web-basedportalsofferseveraladvantagesfromacompliancestandpoint.Directorsgainaccesstothemostup-to-date,clickableregulatorychanges,aswellasconvenientonlinecompliancetraining.Afterall,nosingleentityismoreaccountablefor,ordeeplyaffectedby,acomplianceslip.
Portalsalsomakeexaminers’jobseasierbygivingthemgreateraccessibilitytosuchorganizedandarchivedmaterialsasboardminutesandcompliancemanuals.
Finally,onlineportalsaddstrongercomplianceandefficiencytopolicymanagement,sincetheyallowyoutopostandarchivefinancials,bylaws,trainingdocumentsandmanuals,disasterrecoveryplansandmore—andcompelbothdirectorsandemployeestoacceptordenythem,whennecessary,withasimpleclick.
Bottomline—onlineWebportalsstretchbeyondtheboardroomtobenefityourfinancialinstitution’sentirestaff,andputpowerfultechnologyatyourfingertips.Theysavetime,energyandmoneythatcanbeputtowardwhatcounts—protectingtheinstitution,employeesand,ofcourse,customersfromunnecessaryrisk.
Bill Evers serves as senior business development director for CSI Regulatory Compliance. For more information about CBI Endorsed Member Computer Services, Inc., visit csiweb.com.