Georgia
Bankers Participate in DC Summit with Legislators, Regulators
Several
Georgia bankers participated in an American Bankers
Association-sponsored three-day Government Relations summit in
Washington, D.C., this week. “There has seldom been a time when
our industry had more at stake than right now,” said GBA
Chairman Steve Jordan, Bank of Monticello, who led
the delegation. “It was important for us to personally speak
with our Congressmen and regulators to tell our story because we
know the story best and we have to be our own advocates.” In
visits to the Hill, (see
briefing document) the bankers focused on funding alternatives
to the FDIC and briefed the members about the many unintended
consequences on other institutions resulting from the way FDIC
is resolving bank failures. Among the other issues discussed:
smoothing fair-value accounting for declining real estate
values; not compromising on bankruptcy cram down to get
increased FDIC borrowing authority; the need to end the
disallowance of loan loss reserves above 1.25 percent; the
impact on institutions and their competitors when brokered
deposits are forced out of institutions; protection of overdraft
protection programs; and a way to end the too-big-to-fail
concept as part of the regulatory restructuring process. After a
presentation to the bankers, FDIC Chairman Sheila Bair
was pummeled with questions about the one-time 20 basis-point
assessment and how FDIC contractors are handling failed bank
assets. In response to a question from former GBA Chairman
Dan Blanton, Georgia Bank and Trust in Augusta, about
allowing the banks to expense any special assessment over a
number of years, she stuck to her previous view that this was
not possible (GBA has asked for FDIC to issue FICO-like bonds or
allow an equity investment to recapitalize the fund, which is
under consideration).
One
banker who had purchased the assets of a failed bank told Bair
that the loans he had not bought had been sold by the FDIC’s
online auction contractor and created enormous devaluations of
other property on which his and other banks were lending. The
banker recommended FDIC hold on to these assets until valuations
improved, but Bair rejected the suggestion, defended the
agency’s use of online auctions and said her view is the
properties need to be put back in the private sector
immediately. Although acknowledging values were depressed, she
talked about the accounting for these values as distressed
sales, which should not be taken into account by the appraisers.
She did not address regulatory pressure at the exam level to
reduce values. On the good news front, Comptroller of the
Currency John Dugan, when asked about the 1.25 percent of
loan-loss disallowance, inferred progress was being made
and said simply, “Stay tuned.” He supported the change in a
recent speech about pro-cyclical issues that need to be
addressed. House Financial Services Committee chair Barney
Frank told the bankers he supported increasing FDIC’s
borrowing authority; and in response to a question about
nationalization, strongly emphasized the importance of
maintaining the diversity of locally based banks concluding, “It
is a great strength.” Former Treasury Secretary and current
director of the National Economic Council, Larry Summers,
pointed out the clear differences between traditional banks and
the investment and mortgage banks most closely aligned with the
economic problems. A banker urged Summers to ask the President
to be more accurate in his use of the word “bank.”
Legislative Update:
Thirty-nine Down – One to Go – Legislature Set for Adjournment
As we went to press with our Legislative Update, the General
Assembly is down to one day left in their 40-day legislative
session. And a busy day it will be primarily with both the house
and senate considering any number of bills that still need
agreement on changes. The headlines will all be about
transportation funding and the state budget – the two biggest
issues that have loomed over the heads of legislators all
session. But the members have been diligent on other issues and
a number of bills we’ve been working on this session received
action this week:
Sen. Ed Harbison handled the Banking Department’s
Housekeeping bill when it passed the Senate. However, an
unrelated amendment was adopted making it a crime to
fraudulently obtain a tax ID number, so the House will have
to agree to the change or ask for a conference. The bill
deals with certain capital provisions, fines and penalties
for failing to respond to Department requests for
information, and the extension of regulatory orders to
holding companies.
Rep. Calvin Hill was able to get the House to pass
the
S.A.F.E Mortgage Licensing Act.The bill implements
federal legislation dealing with the registration and
licensing of mortgage lenders. Bankers originating mortgages
will simply have to be registered while other mortgage
originators must be individually licensed.
Efforts to change the Georgia Fair Lending Act stalled for
the session after the House Rules Committee rejected Sen.
Bill Hamrick’s request for the full House to vote on the
bill. The House version is substantially different from
the senate’s version and would prohibit mortgage brokers
from being compensated with yield spread premium – their
principal source of income. As the bill amended the Georgia
Fair Lending Act, and our members are preempted from
complying with that Act, we have been monitoring it to
ensure it was not expanded
Rep. Ron Stephens’
bill to enact a state income tax credit for new
purchasers of single-family homes ran into the revenue
shortfall buzz saw this week with the administration
objecting to its impact on the state budget. A scaled down
version of the bill was passed and a conference is slated
with the Senate.
Sen. Ronnie Chance handled two tax-related bills
we’ve had an interest in. One
bill closes a loophole certain REITs were taking
advantage of, and the other
bill modifies the retraining tax credits many banks have
been using. The bill originally eliminated the credits for
banks, but those have now been restored. While the language
could be clearer about the kinds of industry-specific
software the credits will apply, it appears this language
will hold as the bill is in conference.
The Senate is expected to agree to House changes to the
bill we’ve been working on that deals with the filing of
deeds on foreclosed properties. The language dealing with
notifying renters or occupants of foreclosed properties was
removed. Our thanks to Rep. Doug McKillip for his
diligent work on this issue.
Sen. Chip Pearson’s
bill that require the values of foreclosed or bank-owned
sales of comparable real property to be used in determine
fair market value of property for tax purposes was amended
and passed the House this week. The Senate is expected to
agree to the changes.
Rep. Ed Lindsey successfully got the House to
agreement to a minor change made in the Senate to the
Uniform Electronic Transaction Act(UETA). The
bill is now on the way to the Governor. UETA provides
standardization of many rules related to electronic
transactions, including retention of paper records
such as checks, and the validity of electronic signatures.
The Senate created Georgia
Vulnerable Adult Study Commission through a
resolution introduced by Sen. Ronald Ramsey. The
study commission will be looking at a number of issues
including financial exploitation of seniors.
Next week, we will prepare a wrap up Legislative Update for
the session about all the bills we have been following. Several
bills will be the subject of further study prior to next session
and we will be working with the respective authors and
committees. With questions about the 2009 session, please
contact GBA’s
Elizabeth Chandler at 404.420.2027 or
Joe Brannen at 404.420.2026.
Harbison
Hill
Hamrick
Stephens
Chance
McKillip
Pearson
Lindsey
Ramsey
GBA Comments on Overdraft, Accounting Proposals
GBA President
Joe Brannen submitted comments on two regulatory
proposals this week. The
first letter responded to the Federal Reserve’s proposal on
overdraft protection programs in which the GBA advocated for a
consumer “opt-out” approach and
the
secondresponded
to the Federal
Accounting Standards Board (FASB) proposal on
Other-Than-Temporary Impairments (OTTI) and Fair Value
Accounting.
With questions, please call GBA’s
Elizabeth Chandler at 404.420.2027.
Accounting Rules for Securities Portfolios Get Welcome Change
The
Financial Accounting Standards Board (FASB) Thursday adopted
important GBA-supported changes to rules that govern accounting
for securities and certain other assets. The changes to OTTI guidance
and Fair-Value accounting rules
are effective for second quarter reporting, with first quarter
adoption permitted. Both rules must be implemented
simultaneously. The new rules are as follows:
OTTI.
Under the new guidance, if OTTI exists, the security is
marked to market. But if there is no intent or requirement
to sell the security, the estimated credit loss is recorded
in earnings and the noncredit portion of the loss is
recorded in “other comprehensive income.” This change should
allow the income statement to better reflect economic losses
and provide more accurate earnings upon which regulatory
capital is based. Though GBA, ABA and others recommended
that OTTI be based on credit losses -- rather than
mark-to-market losses -- for securities to be held to
maturity, FASB declined to make this change.
Fair Value.
Under the new rule, banks will be allowed to use judgment in
estimating market values in inactive markets. The rule calls
for values to be based on modeled cash flows, not simply on
broker price quotes. This change, along with many others
adopted by FASB, should prevent the use of “fire sale”
values.
“These changes are steps in the
right direction and we appreciate them,” said
Joe Brannen, GBA President and CEO. “However, these
particular guidelines don’t address real-estate valuation, which
is the larger problem for most borrowers and bankers. Accounting
rules governing real-estate assets and the aggressive
application of those rules by the regulators force the use of
real capital to account for theoretical losses, and that needs
to stop.” Adoption of more reasonable
application of accounting rules related to real-estate
valuations and markets has been a key priority for GBA this year
that we’ll keep actively working. With questions, contact
Joe at 404.420.2026, or
Elizabeth Chandler at 404.420.2027.
CPP Update: Georgia List of Banks Now Stands at
18
The
latest verified Georgia banks to receive investment from the
U.S. Treasury’s Capital Purchase Program are CSRA Bank Corp.,
Wrens ($2.5 million, March 27), First Intercontinental Bank,
Doraville ($6.4 million, March 13), and PeoplesSouth
Bancshares, Inc., Colquitt ($12.3 million, March 13). This
brings the list of Georgia banks receiving investments to 18.
We continue to encourage Treasury to expedite more investments
for our banks that have applied.
Bank Closures:
GBA Stresses Perspective and Public Reassurance
about FDIC Coverage
The March 27
closure of Omni National Bank marked the fourth Georgia
bank to close this year and the ninth since August 2008. These
announcements are always news and they continue to raise the
need for GBA and bankers to help consumers understand the
strength of FDIC insurance coverage. GBA was asked to comment
about the Omni closure by a number of sources, including
Atlanta’s Fox 5 TV. Our responses continue to focus on the
big picture view and the longstanding strength of FDIC
protection for depositors. We are careful not to trivialize or
understate the significant issues our economy and some of our
banks are having, but we also feel perspective is important. For
example, these facts might not make every story, but we continue
to mention in every interview we do that 92 percent of Georgia’s
banks remain well capitalized, more than half were profitable
last year and loan balances in our banks grew by more than $1.5
billion in 2008.
Another point of perspective we have been sharing includes the
fact that while Georgia has had nine
closures
since 2008, that’s out of almost 340 banks at the beginning of
2008.Unfortunately for all, some other states have similar or
greater percentages of their banks that have closed; California
at eight of 318; Nevada at three of 43 and Oregon at two of 40,
for example. On a national level, the perspective is just as
important. Last year 25 banks were closed, compared to more than
1,000 during 1989 and 1990, combined. And, through it all, no
one has ever lost a penny of FDIC-insured deposits.
Resource:
Trends and Tips Officer and Director Protection
Along with
turbulent times in our industry comes more legal risk for your
bank officers and directors. For example, 54 percent of all
securities fraud lawsuits filed against S&P 500 companies in
2008 were against financial firms. Many of you don’t fall into
that size company but the risks are out there, regardless.
Associate Member Alston and Bird, LLP, has put together a
good
trend
and tips sheet to help you ensure your bank, officers and
directors keep doing
things the right way and appropriately manage legal risk.
It’s a good
idea to take a close look at your bylaws and Bond and D&O
Insurance to make sure they’re appropriately structured. Thanks
to Alston and Bird’s Mark Kanaly for giving us permission
to share this with members.
Chris
Low to Provide Economic Update at Annual Convention
No
annual Convention would be complete without an economic update.
Join nationally recognized economist, Chris Low,
Chief Economist with FTN Financial in New York City as he
addresses today’s state and national economy, and
discusses the outlook for interest rates.
The 2009 Annual
Convention is scheduled for June 15-16 at the Renaissance
Waverly Hotel in Atlanta. Convention brochures were mailed last
week. Detailed information is also available on our web site.
With questions about the hotel, the brochure or the Convention
in general, please contact GBA’s
Susie McGehee at 404.420.2010.
Tradition
Continues: 50-year
Bankers to be Recognized at Annual Convention
GBA is proud to
recognize Georgia bankers who have devoted 50 years or more of
service to the banking industry. These bankers will be honored
at the 2009 Annual Convention in June. Please help us
properly recognize the bankers who have reached this important
milestone by sending a letter to GBA’s
Susie
McGehee with the following information: banker’s
name and current title, bank name, his/her years of service,
brief work history, photograph of banker nominated and the name
of the nominating banker. This information must be received by
Friday, May 16. Please contact Susie at 404.420.2010 with
questions.
Incredible
Value for Your Training Dollars: Georgia Banking School
Registration
is underway for the 48th annual Georgia Banking
School at the University of Georgia! The Georgia
Banking School is a unique growth opportunity for
qualified, highly-motivated bankers. The $1,650 annual
tuition covers everything except transportation and
incidentals for one week, an enormous value to your bank
and to the students. The date for this year’s session is
May 3-8. The school provides a well-balanced, three-year
curriculum taught by UGA faculty members, experienced
bankers and other well-qualified industry experts.
Each
year, the curriculum is reviewed and updated by the
school’s administrative committee to reflect the needs
of the banking community. The School is designed
to launch the careers of future banking leaders and to
make a positive difference in your bank each day. For
more information, please call GBA’s
Marybeth Jonesat 404.420.2032.
Legal
Issues Update on Tap at Rural Development and Lending Conference
Join Jim
Moore and Allen Olson with Moore, Clarke, Duvall
Rodgers, P.C., Albany, as they address legal issues facing
farmers and agribusiness lenders. Issues include security interests, proper completion of loan
documentation, collection of proceeds of collateral, lender
liability, and the New Farm Program.
This
year’s Rural
Development and Lending Conference will be May 14-15 at
the Savannah Riverfront Marriott. For hotel reservations, please
call the hotel directly at 912. 233.7722. For more information,
please contact
Marybeth Jones at 404.420.2032.
Learn
Tips for Leading During Challenging Times at Leadership Conference
During
challenging times, we don't manage the challenges, we manage
ourselves in the midst of those challenges. Managing yourself is
a function of character. Bruce Bickel,president
and founder of the Transformational Leadership Group in
Pittsburg, Penn., will help you discover the eight
principles of personal self-management, each having an
associated character
quality, and
how they will enhance your ability to excel in the today’s
challenging times. The conference will be July 12-15 at Amelia
Island Plantation in Amelia Island, Fla. SAVE $100 by
registering before April 15 at the $395 early-bird registration
price. With questions, please call GBA’s
Susie McGehee at 404.420.2010 or
Jennifer Stevens at 404.420.2024.
Last
Chance for Loan Documentation Seminar
Keep your records in compliance and your customers satisfied
by staying up to speed on the basics of loan documentation. This
one-day seminar is designed for loan officers, loan
administrators and credit administrators at every level and will
cover how to document the condition of the collateral, the
condition of the title and the condition of the borrowers and
guarantors. Thompson Kurrie Jr. and Harrison Coleman,
partners with Coleman
Talley, LLP
in Atlanta are the instructors. The seminar is Wednesday, April 8, at
Idle Hour Country Club in Macon. The registration fee is $225.
With questions, please contact GBA’s
Courtenay Pope at 404.420.2015.
Learn How
to Analyze Commercial Financial Statements - April 14-15
In today’s
world, emphasis is placed on a practical methodology to help
bankers evaluate a company’s creditworthiness. Designed for
entry-level commercial lending officers, credit trainees and
analysts, this workshop will introduce and use a comprehensive
and consistent approach to analyzing commercial financial
statements. Topics to be discussed in this two-day workshop
include
cash-flow analysis, financial
projections,
case studies for practical application of concepts and much
more. Mike
Allen, president and CEO of Georgia Trust Bank in
Buford, is the instructor. The workshop is April 14-15 at
Idle Hour Country Club in Macon. The registration fee is $325
for members. With questions or to register, please contact GBA’s
Courtenay Popeat 404.420.2015.
$99
Hot Topic: Emerging Bright Spots for Georgia Banks –
April 22
GBA’s
Emerging Bright Spots for Banks webinar will focus on
several key economic issues that are changing the landscape for
community and regional banks in Georgia. A.M. Best will
present the facts and figures that led them to these conclusions, drill down to the local market conditions in Georgia
and address
specific issues
for Georgia bankers. A.M. Best’s Khan
Voung and Anthony McSwieney will lead the April 22
online seminar. The registration fee is only $99. With questions,
please contact GBA’s
Courtenay Pope at 404.420.2015.
Basics
of Banking:
Legal Issues for New Account Documentation – April 28 and April 29
This one-day
seminar will teach new account personnel proper account opening
procedures and compliance requirements. Topics to be covered
include signature card contracts, CIP Compliance overview, TIN
compliance, individual accounts and much more. Designed for new
accounts representatives, back-up new account personnel,
certificate of deposit staff, bookkeeping
and
accountholder service personnel, this seminar will be led by
Patrice M.
Konarik of Sunwest Training Corp. from Kendalia, Texas.
Seminar sessions will be Tuesday, April 28, at Holiday Inn Lanier Centre in
Gainesville and Wednesday, April 29, at Idle Hour Country
Club in
Macon.
The registration fee is $225. With questions, please contact
GBA’s
Courtenay Pope at 404.420.2015.
Compliance
Webinar: Citizens, Resident Aliens and Nonresident Aliens
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.
AIB Highlights:
Consumer Lending, Marketing Financial Services
and Trust Basics
The
following instructor-led
AIB online classes begin the week of April 27. 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 register two weeks in advance to secure a seat in the
class.
Act
Now: Space
Still Available for Spring AIB Classroom Course
Beginning Tuesday, April 7, AIB will offer Accelerated:
Principles of Banking. The course will meet for 10 sessions
over a 5-week period and will be taught by Larry Townsend
of The Commercial Bank, Winterville. Class will meet
every Tuesday and Thursday, from 6-9 p.m., ending May 7. The
registration fee is $260 and includes the cost of the textbook.
If you
would like to see a specific AIB course offered in your area or
with questions about
AIB classroom courses, please call GBA’s
Alison Moreau at (404) 420-2034.
Teach Children to Save Day Coming up – April 21
Just
a reminder that National Teach Children to Save Day is quickly
approaching. With many Americans exchanging their spending
habits for saving for a rainy day, this is a great opportunity
take the necessary steps to lead kids on the path to a positive
financial future. On Tues., April 21, bankers nationwide will
use their expertise to inspire students to become life‐long savers. The ABA Education Foundation is also calling on bankers to
accept its Million Child Challenge and teach saving lessons
to 1 million students on Teach Children to Save Day, and
throughout the year. TCTSD veterans and first-timers can sign up
online at
www.abaef.com. As part of the registration, bankers
will be asked to report the number of students they will teach.
Registered bankers will receive bonus materials and recognition
in ABA print publications and online. To help you plan or
present a lesson, the foundation has created a
Teach Children to Save resource kit. The kits are
available for grades K-6 and grades 7-12. Each and has multiple lesson
plans that explain the difference between needs and wants, ways
to identify expenses and how priorities can influence spending.
For more information on Teach Children to Save Day or to
purchase Teach Children to Save resource kits, please visit
their
web site
or call 1-800-BANKERS.
Tools to Develop and Retain Your Company’s Top
Employees
Now, more than ever, it’s time to make
sure you hang on to your top talent and pay special attention to
developing the entire team. With
TalentQuest, building, developing and retaining an ‘all
star’ team will position your organization to capitalize on
opportunities that will undoubtedly exist when the economy
begins to recover. A comprehensive, carefully structured talent
management program can provide better visibility into top,
mid-level and low-performing employees, enabling a financial
institution to manage them accordingly. In addition, companies
can more effectively source high-quality candidates, develop and
retain the top talent they already have, and build more reliable
succession plans. And, as the most successful organizations know, having the best people
isn’t simply an ideal, it is a competitive necessity that is one
of only a few true differentiators.
So, how do financial institutions accomplish this? TalentQuest for
Financial Services integrates standardized job descriptions,
competency models and Peak Performer Profiles into a talent
management system designed to guide financial institutions
through each stage of an employee's career cycle. Now more than
ever, it is crucial to ensure you have the right people in the
right places and that your top talent is fully engaged. Doing so
will help you gain efficiencies, which will ultimately help you
outperform your competitors in 2009 and beyond. For more
information, please contact
Jon Naphin at TalentQuest at 404.965.5221.
High Quality Human Resources Solutions
Employment
Law Compliance, Inc.
is a Strategic Partner of the Georgia Bankers Association and
our primary resource for employee handbooks, toolkits,
affirmative action plans, and other compliance products
specially designed for community banks. Keeping up with
ever-changing employment regulations and human resources best
practices can be time consuming. Monitoring changes specific to
the banking industry adds even more effort to the task.
Employment
Law Compliance focuses on the needs of community banks which do
not have the luxury of a large HR staff or in-house employment
counsel. Their staff is committed to designing and
maintaining solutions and services that can help your bank
attract, hire, retain, and manage the best employees. For more
information, please contact ELC’s
Steve Greene at 770.206.3371 or GBA’s
Levi Crabtreeat 404.420.2022.
For Sale
Addmaster IJ2040-01
receipt/validation printers. 22 available at $350 each.
Please
contact Jane Pitts at Stephens Federal Bank,
706.886.2111, ext. 273.
Find
a Job, Post a Job with 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.
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
orderany of these products or services, please call
404.522.1501.
Read
All About It -- Send
Us Your News
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.
We want to
share your news with your colleagues across the state. Please
forward your announcements and photos to GBA's Lydia Thomas.
Newsmakers
Cartersville - Unity National Bank
Jeff Sanders has joined the bank as Senior Vice President
and Chief Financial Officer.
Claxton - Southern Bankshares, Inc.
Keith Miller, licensed veterinarian and owner of
Claxton-Metter Veterinary Clinic, Inc., has been elected to the
holding company’s Board of Directors and that of its
wholly-owned subsidiary, The Claxton Bank.
Decatur - Cornerstone Bank Congratulations to CEO Chris Burnett, President Charles Yorke, the
officers, directors and staff on the recent opening of the
bank’s new Decatur office where Kerri Morrin will serve
as Vice President and Branch Executive.
Dublin - Bank of Dudley The bank announces the following promotions: Darly
Creamer to Loan Operations Officer; Jarrod Windham to
Assistant Vice President; Jeremy Beall to Assistant
Operations Officer; and April Little to Mortgage Loan
Officer.
Elberton - Pinnacle Bank
Robert Chandler has been promoted to Business Banker.
Loganville - Essex Bank
Valerie Pendergast has been promoted to Vice President,
Human Resources.
Valdosta - Citizens Community Bank
Jennie Tindall has been promoted to Assistant Vice President
and Tim Jones, City President, has been appointed to the
bank’s Board of Directors.
Boca Raton, Fla. - SECNAP Network Security For the second consecutive year, the company has been named
‘Hot Company of 2009.’ Its most recent recognition was announced
in March at the Technosium Executive Alliance Summit in San
Francisco. Congratulations!
Sanders
Windham
Pendergast
Miller
Beall
Tindall
Creamer
Little
Jones
DeKalb Co. CEO Burrell Ellis (center) celebrates the ribbon
cutting of Cornerstone Bank’s new downtown
Decatur location. He is joined by (R to L):
Leonardo McClarty, President, DeKalb Chamber of
Commerce; Mayor William (Bill) Floyd, City of
Decatur; and Charles Yorke, President,
Cornerstone Bank.
Several
Georgia bankers participated in an American Bankers
Association-sponsored three-day Government Relations summit in
Washington, D.C., this week. “There has seldom been a time when
our industry had more at stake than right now,” said GBA
Chairman Steve Jordan, Bank of Monticello, who led
the delegation. “It was important for us to personally speak
with our Congressmen and regulators to tell our story because we
know the story best and we have to be our own advocates.” In
visits to the Hill, (
The
Financial Accounting Standards Board (FASB) Thursday adopted
important GBA-supported changes to rules that govern accounting
for securities and certain other assets. The changes to OTTI guidance
and Fair-Value accounting rules 
Alternative
sources of capital remain more difficult than usual to arrange
in the current market environment. A couple of good resources
for tracking CPP
in Georgia are
No
annual Convention would be complete without an economic update.
Join nationally recognized economist, Chris Low,
Chief Economist with FTN Financial in New York City as he
addresses today’s state and national economy, and
discusses the outlook for interest rates. 
