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Bridges Reappointed Commissioner Legislative
Reception |
Happy
New Year!
All of the GBA directors,
officers and staff wish you a happy and prosperous New
Year! “2001 should be
another good year for our industry despite some gloomy signs on the
horizon,” said GBA President, Joe
Brannen. “The
recently-released census
data proves Georgia is where people want to live and do business;
that’s good news for banking.”
2001 Trends to
Consider
As we enter the first year of the new millennium, a number of significant
trends are being mentioned by
GBA members throughout the state. These
trends are important for every bank to consider and address in their
strategic planning efforts. “Georgia
is a diverse state just as is our banking industry,” said GBA Chairman E.J.
“Jud” Vann, IV, President of Planters
& Citizens Bank in Camilla.
“Every one of us is unique in our approach to our market and how
we plan for profitability. Our
state may be diverse, but most of our members conduct business in a
relatively-limited geographic area which limits how diverse we can make
our own institution. After
all, banks are a direct reflection of how well our local markets are
faring in any economic environment, and it is incumbent upon us as bankers
to consider these major trends as we lead our institutions,” he
concluded.
Funding and Liquidity. Bankers are telling us they are having an increasingly difficult time attracting and keeping core deposits. This deposit shortfall has come at a time of record loan demand. Most banks are having to rely on other sources such as the Federal Home Loan Bank for funding and liquidity. The FDIC has raised concern about increased interest rate risk banks incur as non-core funding has grown.
Asset Quality. Regulators also continue to raise concern with loosened underwriting standards. The FDIC suggests some banks are assuming more credit risk as their real estate loan portfolios continue to grow rapidly. Much of this growth was fueled by the huge influx of people to Georgia this last decade – more than a million people moved here. Funding these new loans and maintaining quality go hand in hand.
Revenue Growth/Margins. Many bankers report a rising cost of funds and increased competition for loans which together put enormous pressure on spreads. Fee income is becoming increasingly important to make up for the loss in net revenue from traditional lending. Many banks are looking at insurance sales as the most likely new product line to add to their mix.
Technology. The Y2K preparations caused banks to upgrade their systems to state-of-the-art. One banker told us, “Unfortunately ‘state-of-the-art’ lasted about 10 minutes before something better came out. Just because our technology works doesn’t mean our bank is positioned to compete with it.”
Privacy. Banks have a great story to tell and history to support in protecting customer information. Bank privacy policies are due by July 1 this year. Take advantage of this marketing/positioning opportunity.
Federal
Legislative Issues
State Legislative
Issues
Georgia
House of Representatives
Georgia State Senate
U.S.
Congress
Bank Regulators
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Chapter 12 Bankruptcy Status We have had several banks call inquiring about the Chapter 12 (family farm) bankruptcy issue. As we previously reported, President Clinton pocket vetoed the Bankruptcy Reform Act of 2000. Included in this bill was a provision making Chapter 12 permanent and extending the authority retroactively to June 30, 2000. Since earlier legislation authorizing Chapter 12 included a “sunset” date of June 30, 2000, Chapter 12’s legal authority lapsed on June 30 and is not now in effect. However, please remember that Chapter 12 has lapsed in the past and Congress has always made later enactments retroactive. Therefore, debtors now have available Chapters 7 and 13, and should Chapter 12 be renewed, bankruptcy courts would probably allow debtors to convert to Chapter 12. Also, any Chapter 12 cases filed prior to June 30, 2000, will be treated as if Chapter 12 were still in effect. Sen. Charles Grassley (R-IA) and Rep. Nick Smith (R-MI) are both champions of Chapter 12 extension, and they will almost certainly address the issue early in the 107th Congress. Two major amendments to the definition of a “family farmer,” both of which would open Chapter 12 to a greatly expanded universe of farmers and ranchers, were considered and rejected by the 106th Congress. The first of these amendments would have doubled, from $1.5 million to $3 million, the amount of debt a debtor can have and still seek protection under Chapter 12. The second amendment would have reduced from 80 percent to 50 percent the amount of that debt that must arise from a farming operation owned by such debtor. Any additional consideration of Chapter 12 renewal will likely include consideration of these amendments. We have successfully opposed, and will continue to oppose, these and other amendments designed to expand the reach of Chapter 12. Call GBA’s Elizabeth Way at (404) 420-2027 with questions.
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New
Congress Begins
The 107th Congress was sworn in this week and will
face a number of issues
of interest to the banking industry.
The House
voted to reorganize the banking committee to expand their
jurisdiction to securities and insurance legislation. This move was a direct result of the passage of the financial
modernization bill last year and should expedite the
consideration of industry legislation.
Among the major banking issues will be:
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Bankruptcy reform – The bill passed with big margins last Congress and should fare better with the new White House.
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Privacy – Many legislators in both parties want to adopt stronger privacy language than was in last year’s legislation. Privacy protection is a top “polling issue” among voters; defining what to do about it is the challenge.
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Deposit Insurance Reform – The groundwork was laid last year to comprehensively review FDIC coverage. Expect a major focus on the cost to expand coverage, as well as the intangible costs associated with what else the industry might be required to accept to expand coverage. Most believe net new deposits would come our way if the limits were raised.
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Tax Reform – Expect the administration to push for a tax cut, including estate taxes. It may be possible to expand the debate to allow more banks to elect Subchapter S status and increase the limits on IRA-type accounts.
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Corporate checking accounts – Allowing 24 transfers per month while phasing in the allowance to pay interest on corporate checking accounts should receive early attention by the Congress.
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Predatory/Subprime lending – Expect some in Congress to grow impatient with the regulators’ attempt to address predatory lending and begin pushing a legislative solution.
And this is the abbreviated list! Call GBA’s Elizabeth Way at (404) 420-2027 with questions.
Calendar
of Events
Schools
Conferences
Seminars
Georgia AIB
Professional Development Guide
Internet
Training
|
What’s
the “Deal” with E-Learning? |
Watch for these professional development opportunities this month…
Advanced Compliance Symposium
- January 17-18 at the Crowne Plaza, Macon – Annual forum for
experienced compliance officers to pick up new and active regulatory
concerns.
Georgia AIB
Registration – Just before the holiday break your folks should have
received their copies of the AIB
Advantage,
which
lists all the courses to be held during Winter Quarter 2001. Our goal is to match the large number of enrollments from
Winter Quarter last year, so please support and promote AIB classes in
your local area. AIB classes
start February 5th.
Georgia
Banking School – Twenty bankers took advantage of the Early Bird registration and enrolled in the 2001 freshman class in
Athens. Having broken recent total enrollment figures for the past three
years, another sellout at 70 is expected. We recommend each bank make its
Georgia Banking School registration decisions soon.
The brochure and registration forms are enclosed.
CEO Academy:
Compliance Management – This session is scheduled for
February 5 at the City Club of Macon.
Blair Rugh, Director of Kirchman Regulatory Services,
is the instructor.
Two telephone seminars:
Analyzing Personal
Financial Statements, January 16 from 2:30 to 4:30.
Robbery Procedures,
January 26 from 3:00 to 5:00. Please
note that participants for the Robbery Procedures seminar will receive a
letter of certification indicating that appropriate training has been
delivered to your institution which complies with the requirements of the
Bank Protection Act, providing all other aspects of your institution’s
security program are in compliance.
Retirement Services, Inc.
GBA Services, Inc.
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Some Of The Services Available Through GBA Services, Inc.
GBA Services, Inc. is governed by a board composed primarily of community bank presidents who look for the best products and services available. They do the due diligence for you and you can rely on their efforts. For more information on any of these services, please contact Renee Valdez at (404) 420-2036. |
The Board of the GBA Insurance Trust welcomes First Commerce Bank, Commerce, Charles Blair, CEO; The Citizens Bank, Nashville, Steve Perry, President and Adel Banking Company, Tommy Tebeau, President, to the Trust. The banks join more than 275 other community banks and associate members taking advantage of this unmatched member benefit. Call GBA’s Susan Kelley at (404) 420-2017 with questions.
Trust Welcomes New Member
GBA Retirement Services,
Inc. is pleased to welcome Citizens Bank of Effingham,
Springfield, Harry Shearouse, President/CEO, as a new
participating plan sponsor. The
programs offered through the GBA Master Trust provide flexibility to
meet the needs of any bank or associate member who may be
considering adding or changing their qualified retirement plan.
The Master Trust provides high quality, affordable pension,
profit sharing, and Section 401(k) programs for banks and companies
of all sizes. Contact
GBA’s Mandy Richards
at (404) 420-2025 or Bruce Shaw at (770) 642-2150 to get more
information about how GBA can help you with your retirement plan
design.
Alma, FNB South
Congratulations to the bank, formerly known as The First National Bank
of Alma, Zach Johnson, President, and the officers, directors
and staff on the opening of the bank’s new Douglas branch.
Alpharetta, NetBank
Congratulations to D. R. Grimes, CEO, who has been named to the
Federal Reserve Board’s Thrift Institutions Advisory Council (TIAC).
Madison, Bank of
Madison
Tim Carter has joined the bank as Vice President and Commercial
Lender; Clifton Hanes has been promoted to Senior Vice President
and CFO; H. Vinson DeLaigle to Senior Vice President/Senior Lender;
and Zeke Lambert to Vice President.
Peachtree City, Peachtree
National Bank
Michael A. Gayles has been promoted to Senior Vice President-Commercial
Loan Manager and Eileen Kempf to Assistant Vice President-Loss
Prevention Officer.
Newest Bank Linked
Welcome to The
Summit National Bank, Atlanta, Pin
Pin Chau, President, as the latest bank to link to GBA’s website.
When your bank’s homepage is ready to be linked, let GBA’s Lydia
Thomas know by calling her at (404) 420-2039.
GBA’s
e-Bulletin List
If
you're looking for an easier way to distribute the Bulletin among your
staff, add them to our distribution list for the e-Bulletin.
Let GBA's Lydia Thomas know who you
want added.
