GBA Exclusive: Register Now for Economic Stabilization Act Workshop Nov. 7

Don’t miss an exclusive opportunity to get the most up-to-date information about the Troubled Asst Relief Program at GBA’s Economic Stabilization Act and Bank Capital workshop scheduled for Friday, Nov. 7, at the Cobb Galleria Centre in Atlanta. This timely one-day workshop, just one week before banks will be making their final decisions whether to participate in this program, will help you make the best decisions possible. Speakers for the program include Walt Moeling, Jim Wheeler, and Jerry Blanchard, all with Powell Goldstein, LLP, in Atlanta; Don Lampe, Steve Dunlevie and Richard Hills with Womble Carlyle Sandridge & Rice, PLLC, in Charlotte, NC and Atlanta; and Sal Inserra with Porter Keadle Moore, LLP, in Atlanta. The program will focus on the evolving details of the federal legislation aimed at stabilizing the nation's economy and the financial services system in particular. Topics to be addressed include:

• The Treasury Department's program of investing capital into the banking system

• The latest about who is eligible and the terms you will agree to if you participate

• The Status of distressed assets that may be sellable or subject to Treasury guarantees

• Consumer lending and loan modifications

• FDIC guaranty programs and deposit insurance changes

• Tax and financial issues related to capital, assets and operations, including fair-value accounting

• Accounting hot topics and the potential for fraud in trying economic times.

This is an event not to be missed. With questions, please contact GBA's Susie McGehee at 404.420.2010.

Details and specifics continue to evolve about the Treasury’s Capital Purchase Program to invest in the nations’ banks. We know you all have lots of questions and are having long, detailed discussions about whether to participate, how to participate and what the ramifications will be to your bank, your customers and your investors. In addition, there continues to be rigorous public, political and media scrutiny of the government’s actions and the industry’s participation. Here’s a brief update on what we know to date:

• As of today, 25 banks have agreed to participate in the Treasury program. In addition to the original nine large institutions that are participating, 16 banks announced participation this week. Capital was provided to the original nine participants beginning Oct. 27.

• The only published application and term sheet for participation in the Capital Purchase Plan applies to publicly traded entities. The deadline for application is Nov. 14. Of the 340 banks based in Georgia, there are 143 publicly traded banks eligible under these terms.

• Eligibility requirements and deadlines remain unclear for the remaining 60 percent of banks based in Georgia that are not publicly traded companies or Sub S banks. Treasury has stated that specific requirements, term sheets and applications will be provided for these institutions, but has not defined when those details will be available.

• The cost of participation in the Capital Purchase Program will be a 5 percent dividend on preferred shares issued to Treasury, which increases to 9 percent after five years. We understand that it is likely that this 5 percent/9 percent will be required to be paid on an after-tax basis, meaning they will not be tax deductible. Also included in your thinking should be the potential additional cost and share dilution caused by the warrants on common shares that must be issued to Treasury.

• Treasury has expressed a desire that some participants use the capital to acquire less healthy banks.

• Other strings apply, of course. There is tremendous public and political pressure to ensure the capital is used for new lending. And politicians already are watching executive compensation like a hawk, even demanding compensation information in advance from the companies already participating.

The GBA is working closely alongside other industry advocates to press Treasury to ensure that the Capital Purchase Plan provides eligibility for all banks that want to voluntarily participate. Be sure to sign up for the GBA Economic Stabilization Act workshop Nov. 7 for more details and information that can help you decide your course of action. See the article above for full details.

None of us expected the first money used by the Treasury under the Emergency Economic Stabilization Act would be to buy bank stock. And doing so has changed much of the public debate.  Most of our members were watching from the sidelines, and while supportive of the need to pass some legislation, never expected to be in the forefront of the news. However, the facts are what they are, and we are making every effort to help the public understand the issues behind this new Capital Purchase Program. Here are some key facts to share with people about our view of the Capital Participation Program:

• While many people know subprime loans created much of the problems today, most Georgia banks never made a subprime loan.

• The commercial banking and thrift institutions did not ask the Treasury to invest directly into banks. In essence, Treasury’s capital infusion plan calls on the banking system to be the first-responder emergency paramedics to administer much needed medicine, in the form of new lending, to the credit marketplace. Treasury basically sent out a 911 alert and summoned the banks to be the volunteer first responders. A majority of Georgia’s and the nation’s banks are well capitalized and don’t need the additional capital, although we expect many will participate voluntarily or at the request of regulators.

• Treasury has created a program that offers banks an attractively priced source of capital that will help them provide more loans to the marketplace.

• Those who do participate will look to deploy the capital investment in a manner that appropriately provides new funding for loans as well as additional strength and stability for their institution, its customers and investors.

• Treasury’s program is strictly voluntary. A majority of our banks remain well capitalized and don’t necessarily need to participate in the CPP. There may be very good business reasons a bank chooses not to participate. But the bank regulators are pressing the industry to participate and many are expected to do so.

• Georgia banks continue to make loans to well-qualified borrowers. Standards have unquestionably tightened because of economic conditions and the public desire for conservative lending, but borrowers with good credit, manageable debt and solid cash flow, among other things, can qualify for loans.

"People need to know banks are part of the solution to the broad financial crisis," said Joe Brannen, GBA President and CEO. "We have to make sure it's clear we're being asked to come to the rescue here by participating, and that we didn't show up on the Treasury's door with our hand out for taxpayer money."

For the second time in as many weeks, Senators Saxby Chambliss and Johnny Isakson have written to Treasury Secretary Paulson asking the Department to be sure and allow banks of all sizes and structures access to the Troubled Asset

There’s new information available for you about The FDIC programs to fully insure noninterest bearing deposit transaction accounts and to guarantee new senior unsecured debt. Remember, you have until Nov. 13 to let the FDIC know if you want to opt out of either program.

The FDIC this week issued a Financial Institution Letter providing details about the final guidance about how to account for taxes on losses associated with Fannie/Freddie preferred shares. Last week we reported that regulators are allowing banks to treat those as normal losses instead of capital losses in the third quarter. The letter states, “For purposes of the regulatory capital calculations in their September 30, 2008, Call Reports, but not for balance sheet and income statement purposes, banks may elect to adjust the tax effect of losses on Fannie Mae and Freddie Mac

Don’t forget to vote Tuesday. We’re already seeing record turnout in early voting, and we’re sure there will be a healthy dose of democracy in action at the polls Tuesday. We also encourage you to pay close attention to the constitutional amendments on the ballot. We understand from some members that if passed, Amendment 3 on Georgia’s ballot may provide local banks the 

2008 BankPAC Campaign Update

Since the last Bulletin, the following companies have contributed to the GBA StatePAC:

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

• Bank of America, Atlanta, Milton Jones, Georgia President

• South Georgia Banking Company, Tifton, Pait Willis, CEO

Please see the BankPAC Campaign Update for total contributions by group. For more information, please call Elizabeth Chandler at 404.420.2027.

Erosion control and other environmental compliance issues at abandoned and foreclosed residential projects are becoming a burdensome cost to banks. Once a bank takes possession of collateral, a decision must be made as to whether it is more profitable to maintain it or liquidate it. Join Geoffrey Brunning with Brunning & Stang Construction Management Inc. and

There’s still space available at GBA’s Analyzing Personal Financial Statements seminar Thursday, Nov. 13, at Idle Hour Country Club in Macon. Designed for credit analysts, branch managers, consumer lenders and entry-level commercial lenders, this course will be led by Mike Allen, President & CEO of Georgia Trust Bank in Buford. Topics covered at this one-day seminar include how to:

• Identify new cross-selling opportunities

• Develop a pattern of logical, analytical thinking

• Examine a personal tax return for hidden information

• Develop an adjusted net worth

• Make valid credit decisions based on careful analysis

• Identify if income is continuing, verifiable, and recurrent.

With questions, please contact GBA’s Courtenay Pope at 404.420.2015.

Do you know your bank’s responsibilities and actions after a customer defaults on a loan? Do you know the obligations between the debtor and creditor after the foreclosure and sale of personal property? If not, make plans to attend GBA’s UCC Update seminar scheduled for Thursday, Nov. 20, at the Hilton Garden Inn in Macon. This seminar is designed for senior lenders, junior lenders, bank attorneys, compliance officers, loan review personnel and will be led by Gary Moser with Moser, Rose & Cox in Valdosta. You will receive information about documentation of loans secured by personal property, perfection of security interests in personal property. You will also receive a manual entitled, “Banker’s Guide to Revised Article 9 with Comparisons to Old Article 9.” Other topics to be covered include:

• Expanded scope and reasons for the revision

• New definitions

• New types of collateral, including deposit accounts

• New types of transactions

• New national financing statement forms

• New filing requirements, including electronic filing, and other means of perfection

• New default and enforcement rules

• Deficiency collections.

With questions, please contact Courtenay Pope at 404.420.2015.

There are not any new classes beginning the week of Nov. 24 because of the Thanksgiving holiday. 

• ABA Online Review Course for the CTFA Exam (open enrollment), 12 weeks, $795

• Today's Teller: Developing Basic Skills* (open enrollment), 8 weeks, $315

There is still availability in the following AIB Online classes beginning Nov. 17. Please register as soon as possible to secure a seat in the class.

• Banking Today, 5 weeks, $315

• General Accounting*, 16 weeks, $485

• Money & Banking, 16 weeks, $405

• Principles of Banking Accelerated, 10 weeks, $335

• Supervisor Certificate, 16 weeks, $695

These courses are instructor-facilitated with weekly assignments, and can be taken from the comfort of your home or the convenience of your office. All you need is a computer, printer and Internet access. (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.

Just a reminder that GBA will offer the following webinars the week of Nov. 3:

• What to Do When a Deposit Customer Dies – Nov. 4

• These People Drive Me Crazy – Nov. 4

• HMDA Reporting Requirements – Nov. 4

• Safe Deposit Compliance & Legal - 2008 Update – Nov. 6

• Opening Accounts for Non-Resident Aliens – Nov. 6

• Compliance Examination Procedures – Nov. 7

The USDA Rural Development has scheduled the following free workshops about their guaranteed housing loans:

• Newnan
  Nov. 5: 10 a.m. – 12 p.m.; Dec. 3: 10 a.m. – 12 p.m.
  580 Hwy 34 East, Suite C, Newnan, GA 30265. Contact Tamika Lucas at 770.253.2555, ext. 4
  These are held the 1^st Wednesday of each month.

• Calhoun
  Nov. 6:  10 a.m. – 12 p.m.; Dec. 5:  10 a.m. – 12 p.m.
  Chamber of Commerce - 300 South Wall Street, Calhoun, GA 30701. Contact Mark Rice at 770.386.3393, ext. 102
   

GBA Retirement Services, Inc. is pleased to welcome to the Trust Chattahoochee Bank of Georgia, Gainesville, Jody Lail, CEO. The programs offered through the GBA Master Pension and 401(k) Profit Sharing Trust provide flexibility to meet the needs of any bank or associate member that may be looking to add or change

Third Quarter 2008 was a volatile and disappointing quarter for the stock market and another tough quarter for the economy. GBA Retirement Services, Inc. continues to focus on long-term performance as a primary objective when investing in retirement plans. The long-term investment returns of both investment managers, Reliance Trust Company and Atlanta Capital Management, continue to meet or exceed their benchmarks. Both firms continue to focus on high-quality stocks and mutual funds to help minimize risks in the portfolios and funds. Please refer to the update for detailed returns. Please also see Reliance Trust Company’s Third Quarter 2008 Market Trends newsletter

and Atlanta Capital Management’s Third Quarter 2008 Investment Review and Outlook. The third-party 401(k) administrator for the GBA Master Trust, Alliance Benefit Group, continues to do an outstanding job providing daily 401(k) administration, timely turnaround of quarterly statements, ongoing web site features and upgrades, and annual training and education for the member banks in the Trust. Alliance Benefit Group also offers payroll services for Trust members at reduced rates. Please call Mandy Richards at 404.420.2025 for information about how GBA can help design a retirement plan for your bank.

FTRANS Corp., based in Atlanta, GA and a Strategic Partner of the GBA, is the creator of Trade Credit Express™ (TCE), the business-to-business payment system that provides business sellers with all of the advantages of accepting credit cards for payment while still allowing them to extend free and flexible payment terms to their buyers. The mission of FTRANS is to move seller-funded trade credit to financial institutions – just as bank credit cards moved consumer credit to financial institutions.  Offered through banks, TCE provides lenders with a new unique and differentiated product offering for their business clients. The benefits to the bank include:

• Increased business deposits

• Diversification within their commercial loan portfolios

• Safer, lower risk commercial loans in a time of credit market volatility

• Increased loan margins

• Account visibility and control

• Customer acquisition and retention.

For more information, please contact FTRANS’ John Hayes at 678.268.4040, or GBA’s Levi Crabtree at 404.420.2022.

Deluxe Financial Services works closely with financial institutions to develop unique experiences that attract and retain customers and grow business. As one of the top check producers in North America, Deluxe combines its history of strong brands and financial institution relationships with its insights into small business. More than just a check printer, Deluxe offers programs that can add to your bank's profitability and maximize customer satisfaction:

• Deluxe Welcome Home Tool Kit (start-to-finish branch package focusing on the first 90 days of the relationship)

• DeluxeCard Visa Gift Card

• Deluxe Experience Inquiry (improve customer experience and drive new revenue)

• Deluxe Detect (account screening to combat fraud and risk).

Deluxe Financial Services works closely with financial institutions to develop unique experiences that attract and retain customers and grow business. For more information, please call Deluxe’s Beatriz Lucki at 305.285.9212, or GBA’s Levi Crabtree at 404.420.2022.

Improve Your Bottom Line With GBA Services, Inc. Offerings

Please remember to include the Georgia Bankers Association on the list of recipients for announcements about promotions, new employees and special recognition your bank has received. 

At a recent staff recognition event, 10 GBA staff members celebrated service anniversaries with association. Shown in the photo from right, alternating from front to back, are Gino Lassiter (10 years); Joe Brannen (28 years); Susan Kelley (31 years); Courtney Rowland (8 years); Erin Howard (2 years); John Runnion (8 years); and Susie McGehee (9 years). Not pictured: Lydia Thomas (10 years); Kenyetta Parks (8 years); and Jennifer Stevens (3 years).

Congratulations and thanks to Gino Lassiter (far left) and Lydia Thomas (far right) for 10 years of outstanding service to the GBA. GBA President and CEO Joe Brannen (center) presented Gino and Lydia their service awards, and others at a recent staff recognition event. "Gino and Lydia are great teammates," Joe said. "They do their jobs with a service-first attitude, and we've been stronger as an organization because of their professionalism during the past 10 years."

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