June 6, 2008  

GBA Chairman Responds to FHLBA's Revised Member Products and Services Guide

Members of the Federal Home Loan Bank of Atlanta (FHLBA) received a letter this week that previews the June 27, 2008 introduction of its revised Member Products and Services Guide (MPSG).   The MPSG will outline substantive revisions to the Bank’s Credit and Collateral Policy. In particular, the Bank will implement a new credit risk rating system, eliminate the Credit and Collateral Matrix, and establish a revised process for credit underwriting and monitoring. In response to the letter, GBA Chairman Jim Williams, CEO of Citizens Bank & Trust in Eastman stated, "We have been concerned with recent FHLBA actions that negatively impacted the availability of credit to member banks.  Therefore, I am encouraged when the FHLBA states that data collection under the revised MPSG will allow them to 'better assess valuation of pledged collateral, with the

  potential of providing greater value for these loans in the near future.'  Likewise, I commend the FHLBA for making the submission of additional information optional, thereby allowing each bank to determine if the reporting burden is worthwhile.  I am hopeful the new credit risk rating system will be employed in a manner that will provide greater liquidity to banks whose borrowing capacity has been unduly reduced and not as a means by which to further restrict credit.  The GBA will closely monitor implementation of the revised Credit and Collateral Policy and provide comments to the FHLBA as warranted."
Myth vs. Reality About the Georgia Fair Lending Act

The ongoing stress in the housing market and the large number of foreclosures in Georgia have some in the media talking about the perceived consequences of changes made in 2003 to Georgia’s Fair Lending Act.  In particular, a recent story and editorial in the Atlanta Journal Constitution critical of some legislators’ ties to the banking industry are also critical of the changes made in 2003. (Also note Rep. Calvin Hill’s Equal Time response to the editorial). Here’s a refresher about Georgia’s Fair Lending Act. The original law was passed in 2002 with the intent of putting an end to predatory lending practices without affecting credit availability to borrowers from traditional lenders. Unfortunately, a number of undefined terms, ambiguities and harsh penalties in the original legislation put a severe damper on banks’ ability to make a wide variety of loans to well-qualified Georgia borrowers without taking on undue financial and legal risk. It also essentially shut down the secondary market for even properly documented and conservatively underwritten mortgage loans made in Georgia, which basically meant that the state’s lenders would be reluctant to continue making mortgage loans at all. “The lack of clarity and specificity in the original legislation was severely limiting credit availability and, in the end, restricting home ownership for thousands of Georgians who qualified for reasonably priced mortgages and had the ability to pay their bills on time,” said Joe Brannen, GBA President and CEO.

  In response, GBA along with the Georgia Credit Union Affiliates, and the Community Bankers Association of Georgia worked to encourage the legislature to amend the 2002 law to fix the technical issues that were causing the problems while still providing significant and meaningful consumer protections.  Much of the media coverage either fails to report or brushes aside as trivial the very real problems the original legislation was causing. The other thing that often goes unreported is that significant consumer protections still exist in Georgia’s Fair Lending Act prohibiting unscrupulous practices for many high-cost loans. These protections include prohibitions on irregular payment amounts, negative amortization and increases in rates after defaults, as well as requirements by the lenders to determine a borrower’s ability to pay and mandatory home ownership counseling, among other things. Please click here for a white paper that provides a more detailed explanation of the issue. Page 8 includes our recommendations, all of which were adopted, that have ensured a continued competitive lending marketplace in Georgia. As for criticism that legislators voted to adopt these changes or those in this year's foreclosure statutes because of personal ties to the banking industry, Brannen said, “It may sound Pollyannaish, but our experience in working with legislators is that they vote on banking issues based on the merits of the issue and not because of any personal or political gain.”
FDIC Quarterly Update: Tough Start to 2008 for Banks

The FDIC has released its quarterly banking profile for the first quarter of 2008, and the results show that economic conditions remain tough for the nation’s banks. The report says commercial banks and savings institutions reported net income of $19.3 billion in the first quarter of 2008, a decline of $16.3 billion (45.7 percent) from the $35.6 billion that the industry earned in the first quarter of 2007. The FDIC said higher provisions for loan losses were the primary reason for the drop in industry profits, and the size of the earnings decline was mainly attributable to a few large institutions. But, more than half of all insured institutions (50.4 percent) reported lower net income in the first quarter. FDIC Chairman Sheila Blair encouraged banks to pay close attention to reserves and capital going forward. “Given the weaker economy and rising level of problem loans, we're encouraging bank managers to stay on their toes,” she said in the release.

  “We're urging all institutions to make sure their reserves are large enough to cover expected losses. We also want them to beef up their capital cushions beyond regulatory minimums given uncertainties about the housing markets and the economy.” Below is a look at how commercial banks with operations in Georgia compared to the national average.
 

Indicator

Georgia Banks

All US Banks

Return on Assets

0.66

0.66

Return on Equity

5.78

6.71

Noncurrent Loans

2.49

1.60

Nonperforming Assets

2.26

1.03

Capital:Assets

11.71

12.27
Ways to Reassure Customers in Tough Economic Times

We all know it isn’t unusual for bank customers to express concerns about the safety and security of their deposits to you and your staff during times of economic stress. That’s why it is always good to discuss with them the strength and stability of banking with an FDIC Insured institution. According to the FDIC, since its inception in 1934, no one has lost a single penny of insured funds as a result of a bank failure. It can help to remind your customers that the basic insurance amount is $100,000 per depositor per insured bank. And, certain retirement accounts, such as Individual Retirement Accounts, are insured up to $250,000 per depositor per insured bank.

  Despite the tone of some recent news coverage and a couple of well-publicized recent failures outside of Georgia, bank failures are extremely rare. And in the event there is one, the FDIC has a proven, well-defined process for ensuring the ongoing protection and convenient availability of depositors’ money. The FDIC has a good resource you can share with customers to help them better understand what their protections are and even calculate the degree to which their deposits are covered.
How to Enhance FDIC Coverage for CD Customers and Boost Your Liquidity
We encourage banks looking to provide additional peace of mind for customers with large deposits to take advantage of the Certificate of Deposit Account Registry Service®, also known as CDARS®. This service allows you to offer safety-conscious customers the ability to consolidate their CD investments of more than $100,000 with you and get access to full protection of FDIC insurance on those deposits up to $50 million. CDARS is a powerful tool for attracting and retaining deposits, which is important for maintaining or boosting your bank’s liquidity.   CDARS provides a number of other funding solutions for you, too, such as the ability to essentially buy and sell CD funds through the network on a weekly basis. GBA’s associate member Promontory Interfinancial Network can help familiarize you with the full benefits of CDARS. For more information, please call Danny Capitel at Promontory, 866.776.6426 ext. 3476 or visit Promontory’s web site about CDARS.
Delivery Problems with Last Week’s e-Bulletin

We understand some of our subscribers to the e-Bulletin did not get your e-mail last Friday because of a new computer back-up procedure being installed here at the GBA.  Here’s a summary of the issues covered last week.  Please click More Details above to read more about these stories:

  • Georgia Bankers Cover Issues in Washington

  • FHLB-Atlanta Asked to Reconsider Collateral Discount

  • Join GBA’s Grassroots Advocacy Network

  • Action Requested: Urge Senators Not to Co-Sponsor CURIA

  • Community Bankers Hear from State Banking Dept.; Finalize CEO Conference Plans

  • OCC Urges Continued Reserve Building, Stronger Underwriting

  

  • Stay Alert for Pfishers: FBI Cracks Global Ring

  • Be Prepared for Emergency Communications

  • Last Call for AIB Analyzing Financial Statements

  • Last Call for Call Reporting Seminar

  • Act Now, Leadership Conference Hotel Deadline Nears

  • End Scheduling Conflicts with In-House Seminars

  • Register for GBA Webinars Today

  • Register Today for AIB Online Courses

  • Earn CRA Credit for Loans or Investment in the Senior Housing Crime Prevention Foundation

  • Protect Your Customer Information

  • Modular Bank For Sale

  • GBA’s 2008 Salary Survey Input Packets Mailed

Georgia Banks Well Represented at Graduate Banking School

As usual, Georgia had a strong delegation attending the Graduate School of Banking at Louisiana State University, which wrapped up its annual session last week. This year 114 Georgia bankers participated in the program, with 34 bankers beginning their three-year continuing education as part of the freshman class, 34 bankers in the junior class and 46 celebrating their graduation. GBA hosted a reception on campus for the Georgia students during the first week of classes with our Georgia Trustee, Meredith Malcom, Senior Vice President of the National Bank of Walton County, Monroe, and GBA's Marybeth Jones participating.  Congratulations to the following Georgia bankers for completion of the rigorous and rewarding curriculum.  As the chairman of the board of the school, GBA President Joe Brannen participated in the graduation ceremonies and presented certificates to the following Georgians:

  • Brian Abercrombie, Appalachian Community Bank

  • Melinda Abercrombie, Georgia State Bank

  • Adam Beeler, Bank Capital Management

  • Jamey Bryant, Chestatee State Bank

  • Andrew Casto, Community Trust Bank

  • Jerry Chatman, Vinings Bank

  • David Cochran, Commercial Bank

  • Jonathan Cole, Citizens Bank & Trust

  • Tony Crews, PrimeSouth Bank

  • Mark Donovan, Haven Trust Bank

  • Michael Duncan, Community Bank & Trust

  • Ryan Earnest, Heritage First Bank

  • Benjamin Ellington, United Bank

  • Scott Ewing, Park Avenue Bank

  • Adam Foley, United Bank

  • Michael Gibbons, Farmers & Merchants Bank

  • William Gleaton, Security Bank

  

  • Patricia Greene, Bank of Terrell

  • Scott Hall, Bank of North Georgia

  • Robert Hardell, Athens First Bank & Trust Co.

  • Adam Harris, Queensborough National Bank

  • Salita Hill, Wachovia Bank

  • Bryan Holland, The First National Bank

  • Jonathan Housch, United Community Bank

  • Nancy Jernigan, Ameris

  • Robert Johnson, F.D.I.C.

  • Jason Karnes, Appalachian Community Bank

  • Thomas Koether, Georgia Trust Bank

  • Angela Lewis, Citizens First Bank

  • Riddick Marable, GA Dept. of Banking & Finance

  • Jason McCarter, United Community Bank

  • Paul McCormack, SunTrust Banks

  • Tony Mullinax, Rossville Bank

  • David Parr, Bank Capital Management

  • Sheryl Quick, Queensborough National Bank

  • Bobby Rigdon, Pineland State Bank

  • Robert Rogers, Gateway Bank & Trust

  • Stephen Rucker, Capital Bank

  • Lance Sexton., First Choice Community Bank

  • Chevis Spratt, F.D.I.C.

  • Shade Storey, Community Bank & Trust

  • Eugene Strom, Ameris Bank

  • John Tebeau, Athens First Bank & Trust Co.

  • Branford Thompson, South Georgia Bank

  • William Tinsley, Ameris Bank

  • Mason Waters, Atlantic National Bank
Colquitt County Banks Send Children to 4-H Camp
Recently, Leadership GBA partnered with the Georgia 4-H program to help promote youth leadership qualities by soliciting funds from area banks to provide money to cover camp registration fees for deserving children in their local communities. This year, four Colquitt County banks joined together to send four local children to 4-H camp at the Rock Eagle 4-H Center next week. Bank of Lenox, Colony Bank, Commercial Banking Company, Valdosta, and Southwest Georgia Bank, Moultrie, funded the scholarships. Donna Lott, Southwest Georgia Bank and Leadership GBA Executive Committee member, coordinated the effort. Zona Medley, Colquitt County’s 4-H Agent, was appreciative of the local banking community and stated that the funds would greatly benefit campers from Colquitt County.The Leadership GBA Executive Committee devotes many tireless hours to developing projects and events to keep the banking association and industry vibrant as well as promoting worthwhile service projects that develop the leadership skills of our youth.  Leadership GBA is proud to be a part of this enriching experience. If you have questions about Leadership GBA, please contact GBA's Susie McGehee at 404.420.2010.  
Pictured above are the 4-H Camp scholarship recipients with representatives of the participating banks. 
Front row: Celina Valles and Kirsten Holton. Back row:  John Gandy, Colony Bank; Linda Cook, Bank of Lenox; Zona Medley, Colquitt County 4-H Agent; Donna Lott, Southwest Georgia Bank and Brad Barber, Commercial Banking Company.  Not Pictured are Michael Goss and Jose Rameriz.
Act Now, Leadership Conference Hotel Deadline Nears

Just a reminder that the room block for Leadership GBA’s 48th annual Leadership Conference will expire Wednesday, June 11. The July 13-16 conference will be held at the Ponte Vedra Inn & Club at Ponte Vedra, Florida. If you have not already done so, please reserve your room as soon as possible by calling the hotel directly at 904.285.1111 or 800.234.7842.

  The negotiated rate is $219 per night plus a $16 per room per night resort fee. The Leadership GBA Executive Committee has planned a great program that you won’t want to miss!  Please click here to register or call GBA’s Susie McGehee at 404.420.2010 or Jennifer Stevens at 404.420.2024 for more information.

End Scheduling Conflicts with In-House Seminars

Has your staff ever been unable to attend a GBA seminar due to scheduling conflicts? Would you like to host a particular GBA seminar tailored specifically to your bank’s needs? GBA can provide many of its seminars to you without your having to leave your bank or hometown. By hosting an in-house seminar, you have the advantage of choosing a date and location that works

   best for your bank employees.  For more information about in-house seminars, please call GBA’s Susie McGehee at 404.420.2010 or Courtenay Pope at 404.420.2015. Please contact us today to find out how your bank can take advantage of this great training opportunity.
Register for GBA Webinars Today

Just a reminder that GBA will offer the following webinars during the week of June 9:

   All webinars are live and allow time for questions and answers. The $250 registration fee gives you access to one web site “seat,” one telephone site license and all handout materials. If you can’t attend the webinar, you may buy the audio CD, handout materials and a password to see the information online. With questions, please call GBA’s Courtenay Pope at 404.420.2015.
Register Today for AIB Online Courses

The following AIB online classes begin the week of June 30.  Please register two weeks in advance to secure a seat in the class.  These courses are instructor-facilitated with weekly assignments, and can be taken from the comfort of your home or the convenience of your office. (Classes with an asterisk * require Microsoft Excel Software.)

Please see the AIB Online Course Schedule for a complete listing or call GBA’s Alison Moreau at 404.420.2034 with questions.

  

There is still availability in the following AIB Online classes beginning June 23. 

 
Insurance Trust Welcomes New Participant

The GBA Insurance Trust, Inc. Board of Directors welcomes to the Trust Mountain Community Banking Company, I.O., Ellijay, Alan May, CEO.  This company joins more than 290 community banks and associate members in this unmatched member benefit.  The Board is overseen by a group of bank executives who

  understand the need to provide the best in employee benefits.  Please call GBA’s Susan Kelley at 404.420.2017 for details or with questions about your bank's plan.
Status of Important Banking Cases
Our thanks to the Office of the General Counsel of the American Bankers Association for making available the latest edition of the Status of Important Banking Cases to the members of our Bank Counsel Section.  This monthly report provides up-to-date information about litigation involving banks across the country.   This report is another member benefit for the attorneys in GBA's Bank Counsel Section.  With questions about how your bank's attorney can participate in the Section, please call GBA's Kenyetta Parks at 404.420.2035.
Manage Risk in Real-Time & Minimize Loss

The Georgia Bankers Association is pleased to announce MainStreet Technologies (MST) as a new Strategic Partner. The MST Loan Administration Systemis a complete program including evaluation, training and the automation of the bank's processes for managing risk in real-time and minimizing loss.  It is a comprehensive program proven to reduce shareholder risk, improve regulatory compliance, save time and employee costs, add efficiency to operations and improve and enhance customer service.  Bank leaders rely on the MST Loan Administration System to provide them and their boards real-time information in the documents that secure their loans.

  Bankers can employ the System to greatly minimize the issue of missing or expired documents. By reducing exceptions and, therefore, the risk of loans going bad, they also ensure more favorable safety-and-soundness regulatory reviews. Banks employing the MST Loan Administration System have been able to reduce the amounts they budget for loan-loss reserves. For more information, please contact MST’s John Closs at 706.968.0157 or GBA’s Chad Wilson at 404.420.2022.
Modular Bank For Sale
United Community Banks has a modular doublewide bank manufactured in August 2006, by Wilkins and presently located in Hendersonville, N.C.  The bank is 28’ X 76’ with many upgrades and new furniture. Pictures available upon request.   Price is $65,000 for modular and $20,000 for new furniture presently in building (both negotiable).  For more information, please call Gray Williams at 706.835.3905.
GBA’s 2008 Salary Survey Input Packets Mailed
The 2008 Salary Survey Input packets were mailed last week, and the deadline for submitting the information is June 27, 2008. We encourage every GBA member bank to participate so we can ensure a broad-based representation of the banking industry in Georgia. We’ve made participating easier and less time consuming than ever this year by allowing you to participate in all parts of the survey online.   Another key change you’ll notice is that there are only 65 positions condensed from the previous 114. Participating banks will also receive a $200 discount. The results will be tallied and made available by August. If you have any questions, please call GBA’s Kenyetta Parks 404.420.2035.
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 call GBA’s Kenyetta Parks at 404.420.2035.

Some of the Services Available Through GBA Services, Inc.

Bond and D&O Insurance

Holiday Decals

Checking Club Programs

Human Resources Solutions
Community Reinvestment Act

Job Bank

CRM

Marketing & Sales

Discounted Check Program

Non-Qualified Executive Benefits (BOLI)

Discounted Local & Long Distance Program

Pledging Pool Program
Federal Flood Certification Corp.

Record Retention Guide

Financial Industry Pre-Employment Assessments

Senior Housing Crime Prevention Foundation

FinCrime

Strunk & Associates, L.P.

Financial Marketing Solutions (FMS)

Thumbprint Signature Program

Georgia Financial Directory

Trust and Investment Services

Georgia Law Code Book
 
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.
Newsmakers    

Alpharetta - Alpha Bank & Trust
Johnny Myers has been named President, Chief Executive Officer and Director.

Savannah - The Coastal Bank
Rob Horan has joined the bank as Senior Vice President of the Support Services Group and Carla Goodwin as Relationship Manager.
 


Myers
Horan
Goodwin
 

Calendar of Events
Details for June

 

Conferences

 
July 13-16 Leadership Conference Ponte Vedra, FL
Oct. 5-7 President/CEO Conference Savannah
Oct. 5-7 Bank Counsel Conference Savannah
     

Conventions/Events

 
June 15-18 Annual Convention Dana Point, CA
     
 

Schools

 
June 8-13 Southern Trust School Mobile, AL
Oct. 22-24 Branch Managers Institute Macon
Nov. 2-7 Southern Operations & Technology School Athens
 

 

 
 

Seminars

 

June 10

Way to Go - Best Practices for the Frontline

Webinar

June 11

Fostering a Diverse & Inclusive Workplace

Webinar
June 11 Issues in Real Estate Foreclosure: A Legal Perspective Webinar
June 12

CTR Exemptions & the New Notice of Proposed Rulemaking

Webinar

June 12

Lending Compliance: From App to Closing

Webinar

June 12

RESPA

Webinar
June 13 Basic Consumer Lending, Part 1 Webinar
June 17 Mortgage Fraud Today Webinar
June 18 Call Report Preparation, Part 1 Webinar
June 19 Lending Essentials- Financial Analysis Tools, Part 1 Webinar
June 20 Basic Consumer Lending, Part 2 Webinar
June 25 Call Report Preparation, Part 2 Webinar
June 26 Lending Essentials- Financial Analysis Tools, Part 2 Webinar
July 1 Bank Technology Best Practices, Part 1 Webinar
July 8 Bank Technology Best Practices, Part 2 Webinar
July 11 Lending Essentials- Financial Analysis Tools, Part 3 Webinar
July 15 Fair Credit Reporting Act Webinar
July 15 Train the Trainer Webinar
July 17 Becoming an Exceptional Supervisor Webinar
July 21 Problem Loans, Part 1 Webinar
July 16 Microsoft Excel 2007- Tips & Tricks Webinar
July 22 Compliance Issues for the Deposit Area Webinar
July 22 Safe Deposit Security and Liability Webinar
July 23 Notary Public Webinar
July 23 Right of Setoff: When & How Can It Be Used- Webinar
July 28 Problem Loans, Part 2 Webinar
Aug. 14 Problem Loans, Part 3 Webinar

Sept. 10

IRA Update and Review Workshop

Macon

Sept. 11

IRA Update and Review Workshop

Gainesville
Oct. 22-24 Branch Managers Institute Macon
Oct. 28 Advanced Loan Documentation Macon
Nov. 5 Bank Security Seminar Macon
Nov. 13 Analyzing Personal Financial Statements Macon
Nov. 20 UCC Update Macon
   
  American Institute of Banking (AIB)  
Ongoing AIB Online Courses Online
     
  AIB Classroom Courses  
     
Board/Committee Meetings  
June 15 GBA Board of Directors Laguna Beach, CA
July 27-29 GBA Insurance Trust, Inc. Board of Directors Ponte Vedra, FL
July 28-30 GBA Retirement Services, Inc. Board of Directors. Ponte Vedra, FL
Oct. 20-22 GBA Retirement Services, Inc. Board of Directors. Young Harris
Oct. 19-21 GBA Insurance Trust, Inc. Board of Directors Young Harris
     
  Roundtables/Peer Groups  
Aug. 8 President/CEO Roundtable 2 Macon
Aug. 26 President/CEO Roundtable 4 Macon
Sept. 19 President/CEO Roundtable 3 Macon
 
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