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April 7, 2006

Williams, Jordan Nominated
Dan Blanton, CEO of Georgia Bank and Trust Company in Augusta and the chair of GBA’s Nominating Committee, reports the committee is proposing the following two bankers for statewide elective office.  For GBA Chairman-elect:  James R. Williams, President and CEO of Citizens Bank & Trust Company, Eastman, and for GBA Vice Chairman, Steve W. Jordan, President and CEO of the Bank of Monticello.  “Our committee is pleased to recommend these two fine bankers to the membership for election to these important positions of leadership,” Dan said.  Jim is currently GBA Vice Chairman.  Steve is currently serving on the GBA Board of Directors and as the Group 6 representative on the Georgia BankPAC Board of Directors.  They will be formally elected at the Annual Convention in June.  Congratulations Jim and Steve.

Annual Convention Offers Family Friendly Tours and Activities
The 2006 Annual Convention is offering several family friendly tours and activities you won’t want to miss.  For the true fishermen, deep sea fishing in the Gulf of Mexico promises to be an enjoyable experience on Sunday afternoon.  On Monday afternoon, experience the days of long ago and set sail on The Lady Stirling, get “up close and personal” with the dolphins and manatees or enjoy a sightseeing tour through the Everglades via a true Florida airboat.  On Tuesday, kayak through the secret trails and hidden coves of the mangrove forests, set sail on The Lady Stirling or tour the Everglades.  To participate, just complete the online registration form; we will be happy to invoice your bank.  If you have any questions about the activities, please call GBA’s Susie McGehee at (404) 420-2010.  Space is filling up quickly so register now to guarantee your family a spot.

CRE Proposal Needs Comment Letters
In previous Bulletins we have told you about our concerns on a joint federal banking agency proposal that could have a dramatic and negative effect on a number of our member banks who have a real estate concentration in their loan portfolios.  A copy of our comment letter has been sent as has one by the Georgia Department of Banking and Finance.  At the GBA Board meeting this week, the Board was briefed by Gary Pannell of Miller, Hamilton, Snider, and Odum, PLLC, Atlanta.  Gary facilitated a working group from GBA’s Credit Committee which drafted our comment letter.  The Board encourages other bankers to write your own letter advising the federal agencies of the steps you already take to manage the risk in your portfolio.  The regulators want to hear directly from bankers and we hope you will help.  In a speech this week, Comptroller of the Currency, John Dugan, weighed in on the topic when he said,  "Our message is not, 'Cut back on commercial real estate loans. Instead it is this: 'You can have concentrations in commercial real estate loans, but only if you have the risk management and capital you need to address the increased risk.' And in terms of the risk management and capital you need, we're not talking about expertise or capital levels that are out of reach or impractical for community and mid-size bankers -- because many of you already have both."

FDIC Reports Banks Strong
The Federal Deposit Insurance Corporation released their quarterly earnings report this week and reported the economy and the banking industry both continue to perform well across most areas of the nation.  FDIC Chief Economist Richard A. Brown said, “Moderate to strong job growth across much of the nation is helping to support loan growth and credit quality at federally insured banks and thrifts. However, heavy dependence on mortgage and construction lending is making some banks more vulnerable to regional downturns in real estate activity.”  A close review of the Georgia-specific report shows the following:

• Job growth in Georgia continues to improve

• Home price appreciation accelerated in 2005

• The pace of home sales is decelerating

• Bank profitability expanded due to strong loan growth

• The changing yield curve raises warnings for 2006

• Commercial real estate lending concentrations are at unprecedented levels (rising from 40% of assets in 1996 to 61 percent of assets at the end of 2005)

• There were 349 banks chartered in Georgia at the end of 2005, five more than at the end of 2004

GBA State Legislative Report Online
In last week’s e-Bulletin, we included a wrap-up Legislative Update highlighting the major bills that passed of interest to bankers.  More importantly, this year was the largest number of bills GBA had to work against to either modify or ask legislators to oppose.  Please click here to see the final comments about this year’s session.

Fed Announces Hearings
The Federal Reserve Board will be holding a series of hearings later this year on home equity lending.  In a speech this week, Fed Governor Susan Bies said, “These hearings are a first step to a broader review of mortgage disclosure rules. One of the issues that will be explored at the hearings is likely to be the adequacy of the existing disclosures for nontraditional mortgages, such as interest-only loans and payment-option ARMs, as well as forty-year mortgages and reverse mortgages.”  Governor Bies also said the issue of predatory lending continues to concern the Fed as changes to the Home Ownership and Equity Protection Act (HOEPA) have not been made since 2002.  She said the hearings could explore the impact of the HOEPA rule changes on abusive lending practices as well as on the availability of subprime credit.  Congress is also taking another look at the possibility of a national anti-predatory lending law.

Ritz-Carlton Leadership Center to Provide Training at Conference
Brochures have been mailed for Leadership GBA’s 46^th annual Leadership Conference which will be held on July 16-19 at the Omni Orlando Resort at ChampionsGate in Orlando, Florida.  The Executive Committee has planned a great program to help you prepare for the constant changes in the banking industry.  This year’s conference will feature leadership training by the famous Ritz-Carlton Leadership Center.  For the fifth consecutive year, the Leadership Center has been ranked in the top ten, among Training Magazine’s “Top 100 Training Organizations.”  Jeff Hargett, Corporate Director, will share The Ritz-Carlton philosophy and core values and show how they translate into exceptionally high levels of customer satisfaction and loyalty.  The conference also provides excellent networking opportunities for bankers from around the state to share ideas. For additional information, call GBA’s Susie McGehee at (404) 420-2010 or Fran Williams at (404) 420-2015.

Calling All PEP Report Cards
Leadership GBA’s 2005-2006 PEP goal is to make at least 50,000 contacts.  To date, the number of contacts have been reported is far short of that goal; we know the presentations are being made; we just need your help in reporting the numbers.  The PEP reporting deadline date is May 31 and we need your help to achieve our goal.  It’s easy to report your PEP contacts.  Each time you return from a visit to a school or other group presentation, simply complete a PEP Report Card and return it, via mail or fax at (404) 522-9848 to the GBA office.  Remember that your National Teach Children to Save Day presentations can be reported as PEP contacts.  If you have any questions or need assistance, please call GBA’s Fran Williams at (404) 420-4015.  Send those PEP Report Cards to GBA today!

Fifty Georgia Banks Share $145,540
Financial institutions that are members of the ABA-sponsored and GBA-endorsed insurance program underwritten by Progressive will be sharing in a nationwide profit distribution of $4,000,000.  The participating banks in Georgia that purchased insurance from the program will receive checks totaling $145,540 which brings the total distributed to Georgia banks to nearly $1,685,000 since the program’s inception.  Since 1990, the program has distributed $54,000,000 nationwide and offers Directors & Officers Liability, Financial Institution Bond, Internet Banking Liability, Trust Errors & Omissions, Employment Practices Liability, Entity Errors & Omissions and other insurance products for community banks that include expansive coverage and increased benefit amounts and in most cases, significantly lower rates.  Please call GBA’s Kenyetta Parks at (404) 420-2035 with questions or to learn how you can be a part of this rewarding program.

BSA Seminar in Macon
GBA is hosting a day-long seminar in Macon April 20 entitled Bank Secrecy Act: A NEW ERA at the Holiday Hotel and Conference Center (formerly the Holiday Inn Macon Conference Center).  As both federal and state banking regulators have “stepped up” their efforts to examine and enforce compliance with the Bank Secrecy Act, including issuing Cease & Desist Orders for first-time “violators,” you know BSA compliance is much more than completing CTRs, SARs, and a $3,000 Log.  BSA compliance includes a risk assessment of the bank’s customers to identify “high-risk” accounts as well as comprehensive internal audit and independent review procedures; many banks are struggling with the volume of all this work.  This seminar is designed to help; here are the highlights that will be covered:

• New exam procedures for BSA + OFAC+ CIP + Suspicious Activity Reporting

• How to develop Risk Profile for your Bank

• How to perform customer due diligence and monitor “High-Risk” accounts

• Additional requirements for Money Services Businesses (“MSBs”)

BSA Officers, Compliance Officers, and Internal Auditors will all benefit from attending.  The registration fee for members is $195. With questions, please call GBA’s Fran Williams at (404) 420-2015.

Clark Consulting: Considering the Purchase of BOLI?
A number of Georgia bankers are being approached by bank-owned life insurance (BOLI) brokers. BOLI has become the prevalent tool of choice for recovering the cost of certain employee benefit programs. A diversified BOLI portfolio can be a very effective asset/liability management tool, often bringing balance sheet advantages that enhance earnings per share.  The Georgia Bankers Association has endorsed the BOLI product offered by Clark Consulting since 1995.  Clark Consulting has helped over 50 Georgia banks purchase over $500 million of BOLI. In many cases the BOLI placements were implemented in order to offset the cost of benefit plans used to retain and reward key executives.  For more information on BOLI and other services offered (Executive Benefits Consulting, Compensation Consulting), contact Bill Cunningham of Clark Consulting at (205) 968-3255.

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 Kenyetta Parks at (404) 420-2035.

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 or to order any of these products or services, please call (404) 522-1501.

Latest Bank to Link
Welcome to Farmers & Merchants Bank, Lakeland, Lee Northcutt, CEO.  Call Lydia Thomas at (404) 420-2039 when your bank is ready to link.

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