June 17, 2005

Chairman Michael Oxley (R-OH) held a hearing this week on the issue of national banks having authority to enter the real estate brokerage and management business.  Chairman Oxley took strong exception to the National Association of Realtors’ (NAR) position that the Congress never intended to grant such authority when the Gramm-Leach-Bliley Act was passed in 1999.  Since the Fed and Treasury proposed implementing regulations authorizing the real estate activity, the Realtors have successfully gotten Congress to withhold Treasury appropriations to adopt the proposal.  In a letter to his colleagues in the House, Chairman Oxley said, “On the merits of the banks and real estate issue, the NAR’s position is both anti-competition and anti-consumer.”  Thank you, Mr. Chairman.  That sums up GBA’s position on this issue, too.  Please call GBA’s Elizabeth Chandler at (404) 420-2027 with questions or for further information.

GBA Chairman Dan Blanton, President and CEO of Georgia Bank and Trust Company in Augusta, testified before the Advisory Committee on Smaller Public Companies of the Securities and Exchange Commission today in New York City.  The Advisory Committee was established by the SEC to examine the impact of the Sarbanes-Oxley Act (SOX) and other federal securities laws on smaller public companies. The Committee will develop recommendations and issue a final report by April 2006.  Dan serves on the Administrative Committee of the American Bankers Association’s (ABA) Community Bankers Council and was testifying at the ABA’s request.  In his statement for the record, Dan focused on how the banking industry was much more extensively regulated than most other public companies and how the size of banks, because of their loan portfolios, do not accurately reflect bank size relative to the assets of other types of businesses.  He recommended the SEC consider revisiting the threshold for registration from the current $10 million in assets and 500 shareholders.  Dan pointed out how the asset threshold is overstated in banks because of the loan portfolios not found in other small public companies.  The 500 shareholder threshold has not been updated since 1964 and he recommended a new threshold of between 1,500 and 3,000 shareholders.  Dan’s testimony also focused on the need to revise the definition of an “accelerated filer” and he discussed the estimated annual increase in costs associated with SOX.

• Integrity Bancshares, Alpharetta (Integrity Bank, Steve Skow, CEO)

• Colony Bankcorp, Fitzgerald (Colony Bank, Dan Minix, CEO)

• Security Bank Corp., Macon (Security Bank, Rett Walker, CEO)

• Thomasville Bancshares, Thomasville (Thomasville National Bank, Stephen Cheney, CEO)

• Summit Bank Corporation, Atlanta (Summit National Bank, Pin Pin Chau, CEO)

• Fidelity Southern Corporation, Atlanta (Fidelity Bank, Jim Miller, CEO)

• United Community Banks, Inc., Blairsville (Jimmy Talent, CEO)

• Main Street Banks, Inc., Kennesaw (Main Street Bank, Sam Hay, CEO)

• CCF Holding Company, Jonesboro (Heritage Bank, Leonard Moreland, CEO)

• Southwest Georgia Financial Corp., Moultrie (Southwest Georgia Bank, DeWitt Drew, CEO)

• Synovus Financial Corp., Columbus (Jimmy Blanchard, CEO)

• Savannah Bancorp., (Mike Odom, CEO)

• GB&T Bancshares, Gainesville (Gainesville Bank & Trust, Richard Hunt, CEO)

• SunTrust Banks, Inc., Atlanta (Phil Humann, CEO)

• Southern Community Bancshares, Fayetteville (Southern Community Bank, Gary McGaha, CEO)

• ABC Bancorp., Moultrie (Ed Hortman, CEO)

• Flag Financial, Atlanta (Flag Bank, Joe Evans, CEO)

• Georgia Bank Financial, Augusta (Georgia Bank & Trust Co., Dan Blanton, CEO)

• WGNB Corp., Carrollton (West Georgia National Bank, Leighton Alston, CEO)

“It says an awful lot for our industry to represent 20 percent of the top 100 performing public companies in Georgia.  We are proud of their achievements,” said GBA President Joe Brannen.

GBA BankPAC Update
Since the kickoff of the 2005 BankPAC Campaign, the following banks have contributed to the GBA StatePAC:

• Mike Knowles, CEO, NorthWest Bank & Trust, Acworth

• Phil Baldwin, CEO, Neighbors Bank, Alpharetta

• Marc Greene, CEO, Mountain Valley Community Bank, Cleveland

• Stuart Smith, CEO, Douglas National Bank

• Jack Floyd, CEO, Bank of Hazlehurst

• John Thompson, CEO, Community Bank & Trust-Troup, LaGrange

• Ford Thigpen, CEO, Georgia State Bank, Mableton

• Bucky Kimsey, CEO, Newnan Coweta Bank

• Ken Bibb, President, The Geo. D. Warthen Bank, Sandersville

• Neil Joiner, CEO, Bank of Dooly, Vienna

• Jack Harvey, CEO, Farmers and Merchants Bank, Washington

Thanks to all for your support.  We will report contributors to the FedPAC in the next Bulletin.  If you have questions or need additional information, please contact Elizabeth Chandler at (404) 420-2027.

Banking Department Proposes Rules
The Georgia Department of Banking and Finance has proposed new rules implementing the Department’s 2005 housekeeping bill which was recently signed by Governor Perdue.  A copy of the proposed rules has been sent to each state-chartered bank. Please review the regulations and let us know of any concerns as we will be filing a comment letter if necessary by the July 29 deadline.

Document Disposal Rule Effective July 1
The amendment to the Interagency Guidelines Establishing Standards for Information Security that implemented the Fair and Accurate Credit Transactions Act mandated disposal requirements for credit report information will be effective July 1, 2005.  The regulators have already stated that most institutions had previously adopted disposal standards in their information security controls.  The guidelines provide until July 1, 2006 for institutions to bring their third-party agreements into compliance.

Antitrust Group Looking at Realtors
A respected Washington, D.C.-based organization, the American Antitrust Institute, has begun a real estate competition project to examine standard industry commissions and practices, including barriers to competition that may lead to higher costs for consumers. The organization will study the effects of various practices on residential real estate transaction costs and the prices charged for the services provided. The project also will examine controls over multiple-listing services, membership and licensing requirements, regulatory structures, price-fixing and anti-rebate restrictions, as well as trade association restraints on competition at the federal, state and local levels. From the above article and the new efforts begun by this organization, it is clear the Realtors are taking a narrow view of protecting their turf.  We will be closely following the study as one of the reasons many legislators support our position on bank involvement in real estate brokerage is to ensure competition is fair and balanced.

SBA 7(a) Funding
A number of our members have expressed concern about the Administration’s decision to not fund the Small Business Administration’s 7(a) loan program for fiscal year 2006.  An amendment was successfully offered this week in the House to the SBA’s appropriation bill that provides $79 million for the program.  It is early in the process, but the House vote to support the funding was fairly large and bipartisan, so there is some hope the funding will survive the appropriations process.

Legislative Update at Conference
Final preparations are being made for Leadership GBA’s 45^th annual Leadership Conference.  This year’s event will be held on July 17-20 at the Hilton Oceanfront Resort on Hilton Head Island, SC. Rep. James Mills, Chairman of the House Banks and Banking Committee, will join us to discuss issues of interest to the banking industry that were addressed in the 2005 session of the Georgia General Assembly.  He will also cover issues that his committee will be studying going forward such as title pawn lending and privacy issues. There’s still time to register if you would like to attend this event.  Please call GBA’s Susie McGehee at (404) 420-2010 or Fran Williams at (404) 420-2015 with questions.

Live Online Seminars
The GBA and The Graduate School of Banking at the University of Wisconsin-Madison will offer the following seminars in June and September.  These seminars are divided in two to six 90 minutes sessions each and you pay only one site registration fee for as many participants as you wish.  The convenience of the short sessions and the economical site fee are just a few of the reasons these programs continue to gain popularity with our members.

• Understanding The Factors That Drive Bank Profitability, June 27, 28, 29

• A Modern Course in Asset/Liability Management For Community Bankers,
  Sept. 22, 29, Oct. 6, 13, 20, 27

• Agricultural Lending In The 21^st Century, Sept. 28, 29

• Best Practices In Credit Risk Management, Sept. 9, 16, 23, 30

• Eight Habits Of Effective Bank Managers, Sept. 21, 22

• Human Resource Management In A Community Bank-The Basics,
  Sept. 13, 20, 27

• Identifying Potential Problem Loans, Sept. 9, 16, 23, 30

• No Nonsense Strategic Planning for Community Banks, Sept. 13

• Originating Profitable Loans, Sept. 20, 27, Oct. 4, 11

• Risk Management for Community Banks – A Workable Process, Sept. 21

• When is Enough-Enough? Advanced Cash Flow Analysis & Loan Structure,
  Sept. 9, 16, 23, 30

For details and to register, please see the flyer or contact GBA’s Edie Canales at (404) 420-2034.

Welcome New Member
GBA Retirement Services, Inc. is pleased to welcome to the Trust Hometown Community Bank, Braselton, Sean Childers, CEO.  The programs offered through the GBA Master Pension and Profit Sharing Trust provide flexibility to meet the needs of any bank or associate member who may be looking to add or change their qualified retirement plan.  The Master Trust provides high quality, affordable pension, profit sharing, and Section 401(k) programs for banks and associate members of all sizes.  Please call GBA’s Mandy Richards at (404) 420-2025 for help with designing your retirement plan.

For sale
One 28x76 DCA approved modular bank building, fully equipped. The price is $80,000 and it will be available September 1, 2005.  Please contact Tracy Dixon at First National Bank of Decatur County, Bainbridge, at (229) 246-3131 for complete details.

Gladiator Technology Services, Inc., GBA’s New Strategic Partner
The GBA is pleased to announce the endorsement of Gladiator Technology Services, Inc., a national managed security services provider (MSSP) for community financial institutions, as its newest Strategic Partner.

Gladiator Technology’s service offering is flexible and can be customized to meet the various security needs of financial institutions.  The company provides GBA members with enterprise-wide intrusion prevention, firewall monitoring, and server host intrusion detection 24x7x365 monitoring services called CoreDEFENSE.  In addition, Gladiator provides vulnerability assessments, penetration tests, vulnerability scanning, server security scanning, IT compliance management products and performance monitoring.  “We are proud to have the GBA recognize the benefits of Gladiator’s comprehensive set of security services for its membership through this endorsement,” said Danny Johnston, President and CEO of Gladiator Technology Services, Inc.  “The GBA’s selection of Gladiator provides additional confidence to financial institutions that we offer a comprehensive and multi-layered approach that provides solid security for community banks.”

Gladiator is a national managed security services provider (MSSP) specifically serving over 400 community financial institutions nationwide.  Gladiator’s team of security and technology specialists is committed to protecting institutions’ systems and customer information in adherence with regulatory standards as defined by the federal government.  The company is owned and operated by financial industry veterans who understand the complexity of the unique technology configurations in financial institution systems and the regulatory responsibility assigned to these institutions’ daily operations. Gladiator’s unique enterprise-wide, multiple-layered approach addresses the various types of vulnerabilities found within each institution’s technology systems. Gladiator’s flagship offering, CoreDEFENSE, is an integrated, comprehensive and managed 24x7x365 intrusion prevention and detection security service, specifically designed and developed for financial institutions.  Gladiator Technology provides the following services: firewall monitoring, intrusion prevention, host intrusion detection, vulnerability assessments, penetration tests, event log analysis, vulnerability scanning, server security scanning, IT compliance management products and performance monitoring.  For additional information about Gladiator, contact Caroline Lord at (678) 461-4620, ext. 220.

GBA Job Bank
The Georgia Bankers Association offers free job posting resources for our member banks.  These listings can be viewed online or through our bi-weekly publication included in the GBA Bulletin.  Resume postings are also available.  For more information please contact GBA’s Renee Valdez (404) 420-2036 or Kenyetta Parks (404) 420-2035.

Reg DD Rules Effective in 2006
In last Friday’s e-Bulletin we told you about The Federal Reserve issuing a final rule amending Reg DD, the Truth in Savings Act, intended to improve the uniformity of information given consumers when they overdraw their deposit accounts.  The rule deals with the popular courtesy overdraft protection service many banks offer.  We told you the rule is effective July 1, but didn’t tell you what year – it’s 2006.

Newsmakers:

Augusta - First Bank of Georgia
Debra Metts has been elected Vice President and Business Bank.  Joining the Board of the bank’s holding company, Georgia Carolina Bancshares, Inc., are Clayton B. Boardman, III, R. W. Culpepper, Don A. Grantham, Dr. Karen M. Foushee, Thomas Kelly, Jr. and William D. McKnight.

Cornelia - Community Bankshares, Inc.
Annette Fricks has been elected to the Board; Deanna Mote to Vice President; and Deborah Hudson to Banking Officer.  James Holden and Greg Weicht have been elected Banking Officers and Philip A. Page and Angela Sprinkle to Assistant Vice Presidents of Community Bank & Trust in the Barrow County Division and the Regulatory Compliance area, respectively.

Calendar of Events

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Operations/Technology Committee

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