New Jersey Banker - Summer 2018

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JERSEY

S U MMER 2 0 1 8

B A N K E R

NJBankers Holds New & Improved Annual Conference New Administration is Offering Regulatory Relief | The End of LIBOR | NJBankers Women in Banking Conference

ENDORSED BY THE NEW JERSEY BANKERS ASSOCIATION

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NJBankers Board of Directors John Borelli, Jr. President/CEO Newfield National Bank

Douglas L. Kennedy President/CEO Peapack-Gladstone Bank

Christopher D. Maher Chairman/President/CEO OceanFirst Bank

Kevin B. Peterson* President/CEO Haddon Savings Bank

Nicholas J. Tedesco Jr. President/CEO GSL Savings Bank

Louis Anthony Costantino Jr.* Managing Director, Industry Manager JPMorgan Chase Bank

Steven Klein President/CEO Northfield Bank

Paula Mandell Senior Vice President/Area Executive M&T Bank

Preston D. Pinkett, III Chairman/CEO City National Bank of New Jersey

Gregory White Northern NJ Region Bank President Wells Fargo Bank, N.A.

Detlef H. Felschow President/CEO Roselle Savings Bank

Anthony Labozzetta President/CEO SB One Bank

Christopher Martin Chairman/President/CEO Provident Bank

Robert Rey President/CEO NVE Bank

Dianne M. Grenz Senior Executive Vice President/Chief Consumer Banking Officer Valley National Bank

Thomas Lupo President/CEO Regal Bank

Michael P. O’Brien Senior Vice President/Market Manager Bank of America, Merrill Lynch

Patrick L. Ryan President/CEO First Bank

Immediate Former Chairman* James S. Vaccaro Chairman/President/CEO Manasquan Bank

Larry C. Schmidt* President/CEO 1st Bank of Sea Isle City

NJBankers Officers

NJBankers Staff John E. McWeeney Jr. President and CEO ext. 627 jmcweeney@njbankers.com Michael P. Affuso, Esq. Executive Vice President and Director of Government Relations ext. 628 maffuso@njbankers.com

Claire Anello Office Manager, Database and Website Manager ext. 631 canello@njbankers.com

Jenn Zorn Senior Vice President and Director of Education & Business Development ext. 611 jzorn@njbankers.com

Lauren Barraza Executive Assistant ext. 618 lbarraza@njbankers.com

Emily T. DeMasi Vice President and Director of Communications ext. 610 edemasi@njbankers.com Jessica Furino Vice President and Manager of Member Experiences ext. 641 jfurino@njbankers.com Wendy C. Mandelbaum Controller ext. 603 wmandelbaum@njbankers.com

Contributing Editor Emily T. DeMasi

Former Chairwoman Angela Snyder Chairwoman/CEO Fulton Bank of New Jersey

Cynthia M. Zaccaro Administrative Assistant II/ Senior Administrative Assistant ext. 632 czaccaro@njbankers.com Erin Suckiel Assistant to the Director of Communications ext. 629 esuckiel@njbankers.com Diane Starr Administrative Assistant to Education Department ext. 600 dstarr@njbankers.com

William D. Moss * Chairman President/CEO Two River Community Bank

Thomas J. Shara * Second Vice Chairman President/CEO Lakeland Bank

Thomas J. Kemly * First Vice Chairman President/CEO Columbia Bank

John E. McWeeney Jr. President/CEO New Jersey Bankers Association *Executive Committee

Counsel Michael M. Horn, Esq. McCarter & English, LLP Mary Kay Roberts, Esq. Riker, Danzig, Scherer, Hyland, Perretti LLP

Contact New Jersey Bankers Association www.njbankers.com 411 North Avenue East Cranford, NJ 07016-2436 Phone: 908-272-8500 Fax: 908-272-6626

American Business Media Design / Production / Advertising

345 North Main Street, Suite 313 West Hartford, CT 06117 (860) 719-1991 www.ambizmedia.com

Published continually as a quarterly publication by the New Jersey Bankers Association from 1929 to Winter 1986. Revived as a quarterly publication by NJBankers and The Warren Group in 1998 under the name New Jersey Bank & Thrift and continued as New Jersey Banker in 2002. Combined with The League Leader, published by the New Jersey League of Community Bankers, in December 2008 and continued as New Jersey Banker.

Summer 2018 New Jersey Banker

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Table of Contents

Cover Story

16

NJBankers Holds New & Improved Annual Conference

Departments 5 From the President’s Office 10 Summer at Last 12 6 Chairman’s Platform Participation key for strength of NJBankers, 30 your bank and the banking industry 31 10 Politics & Policy

Something is Wrong

New Associate Members Upcoming Events Bank Notes Bank Shots

Features

08

Behind the Teller Line Creating a New Brand Identity

21

12

Directors’ Corner Insurance Matters, Beyond D&O

22 Feature

Top Five Costly Mistakes To Avoid In Commercial Loan Closings

14 Feature

NJBankers and the Edward J. Bloustein School of Planning

and Public Policy, Rutgers University Release Results of

Eighth Annual Economic Survey 20 Feature

It’s Not the One Thing You Do, It’s Everything

You Do to Control Your Healthcare Plan Costs

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New Jersey Banker

Meet Our Endorsed Service Provider Promontory Interfinancial Network – Reciprocal Deposits

24 Feature

NJBankers Women in Banking Conference Knocks it Out of the Park 26 Feature

A Breath of Fresh Air: How the New Administration

is Offering Regulatory Relief 28 Feature

The End of LIBOR

Summer 2018

From the President’s Office

Summer at Last

By John E. McWeeney Jr.

T

his past winter and spring may not have been the worst weather on record for New Jersey but it sure felt like it. How many cold, snowy or rainy days did we endure before summer finally arrived? But, alas, summer is here and hopefully we’ll all have plenty of warm sunshine to enjoy the beach, golf or whatever your favorite summer pastime is.

At NJBankers the end of June always marks the end of our fiscal year John E. McWeeney Jr. President/Chief Executive Officer and a chance to colNJBankers lect our collective breaths. July and August is our only slow time of the year with the legislature typically out of session and our meetings calendar quiet with the exception of our Annual Summer Golf Outing and Networking Reception at Fiddlers Elbow Country Club in Bedminster on August 14th. Like many of your institutions, it’s a busy time for staff vacations and the recharging of batteries. That said, though, it’s also a great time for reflection on the fiscal year just completed and doing some strategic planning for the year ahead.

In October we’ll be releasing our 20172018 Annual Membership Report which will share highlights of the association’s operations. We’re excited to report that under the leadership of our Immediate Past Chairman Jim Vaccaro, Chairman, President and CEO of Manasquan Bank, and the rest of our officers and board of directors, NJBankers had another very successful year. We all benefitted from Jim’s passion and enthusiasm. Our advocacy efforts were very strong and impactful and the quality of our education and professional development offerings were excellent (based upon direct feedback we received from meeting attendees). As a result, our membership base remained largely intact, albeit down a handful of bank members due to industry consolidation and our financial results were strong with profitable op-

erations and a solid balance sheet. The same can be said for our affiliate, Bankers Cooperative Group, which posted excellent results.

Beyond the numbers and statistics, though, we also made some meaningful progress on some of our key strategic goals. Our Emerging Leaders Program, now in its second year, has an outstanding class of bankers and the curriculum has been upgraded from the first year. The Director’s Certification Program, done in partnership with FinPro, is also in its second year and is starting to gain some traction both in New Jersey and with other state bankers associations across the country. We also changed the look and structure of many of our seminars and conferences, all with the goal of improving the experience for both our bank members and our speakers, exhibitors and sponsors. Perhaps the most notable change

Moss, President and CEO of Two River Community Bank. Bill, along with our new officers and board will help to lead us in the year ahead and certainly his early focus on increasing member engagement will be of great help. We’re also excited to add an important new member of our team, Jessica Furino, who started as Vice President and Manager of Member Experiences in July. Jessica is a professional Meeting Planner and joins us after seven years as the Director of Events for the Women President’s Organization in Manhattan. She will bring a new level of professionalism and innovation to our programs. We changed her position's job title to Manager of Member Experiences to clearly put the focus on our members.

In early August our management team will be meeting for a strategic off-site planning

Perhaps the most notable change was the new format at our Annual Conference where we built in a General Session with keynote speakers and concurrent breakout sessions each day. was the new format at our Annual Conference where we built in a General Session with keynote speakers and concurrent breakout sessions each day. The feedback we received from attendees was overwhelmingly positive.

Another example will be the new format for our Annual Senior Management Conference scheduled for September 24th and 25th at the Borgata in Atlantic City. We’ve condensed what was a two night/three day conference into a one night/two day conference with no diminution in content. We think this too will be well-received by the attendees. We portend to be a “Member Driven” organization and hopefully these efforts demonstrate that.

As we look to the year ahead we’re excited to work with our new Chairman, Bill

session. We’ve done it for a number of years and it serves as a great incubator for new ideas on how to serve our members better and run the association more efficiently. Labor Day will be upon us quickly and will be followed by a flurry of important NJBankers programs including our 2018 Regulatory Trip to Washington, D.C. on September 5th – 6th and our Annual Senior Management Conference at the Borgata on September 24th – 25th.

In the meantime, I hope that you and your colleagues get to enjoy some summer fun with your family and friends.

■ John E. McWeeney, Jr., is president and CEO of the New Jersey Bankers Association, and can be reached at jmcweeney@njbankers.com.

Summer 2018 New Jersey Banker

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Chairman’s Platform

Participation key for strength of NJBankers

By William D. Moss

I

’m excited and honored to be NJBankers 2018 – 2019 Chairman. This is my first feature letter to members but before I share my message, let me begin by thanking Former Chairman Jim Vaccaro for his leadership and guidance this past year. I’d also like to acknowledge John McWeeney’s commitment to making NJBankers a premier organization for representing our members. He, along William D. Moss with Mike Affuso Chairman President/CEO and Jenn Zorn, do Two River Community Bank a great job leading advocacy, education and business development efforts. I look forward to working with them and

With professional development comes the need for experts who share the latest information for compliance, lending, cybersecurity and human resources, to name a few business lines, by speaking at seminars and conferences. NJBankers speakers, who are Endorsed, Select and Associate Member Service Providers, present leading-edge topics and recommendations at events because they are experienced professionals. When you are at NJBankers events, connect with these Service Providers. Speak with them and stop to visit their displays. This participation and engagement goes a long way as they support NJBankers initiatives in many ways including sponsorships. Service providers appreciate face-to-face conversations and may just have the solution you need to move your bank forward.

Participation makes your staff stronger and the Association viable. Seasoned bankers benefit with a fresh point of view. Emerging leaders benefit personally and professionally. the entire NJBankers staff representing you, our valued members, for the next year.

When I was elected to my first tour on the NJBankers Board in 2008, I was excited to participate and help guide the Association.

Many years later, I have that same excitement as your new Chairman. As I went through the Chairs, I experienced the importance of participation for the success of the Association and of the industry. With member participation, the Association can count on us to support their efforts in New Jersey as well as in Washington.

In addition, with member participation, the Association will be able to better execute their mission of providing opportunities for the professional development needs of our staffs and even ourselves.

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New Jersey Banker

Member participation is key to the strength and vitality of the Association, your bank, as well as the banking industry. One way to participate is to join a Committee.

NJBankers has 34 Committees and there’s one for nearly everyone at our banks. You’ve heard John call Committees the lifeblood of the Association and I couldn’t agree more. In a rapidly changing environment, Committee interaction keeps us and our staffs up to speed on top issues. You just get a different view when networking and sharing with others.

As a past president of the Community Bankers Association, I recognize the importance of having an engaged membership. The organization, however, is transitioning. There are fewer banks than

just a year ago and that means fewer CEO participants.

The same is happening at NJBankers.

Membership is slowly declining – not that we should panic – but it causes us to think about the future. A solution? Participation and engagement.

Participation makes your staff stronger and the Association viable. Seasoned bankers benefit with a fresh point of view. Emerging leaders benefit personally and professionally.

NJBankers offers The NJBankers Leadership Academy, an intense look at the components of leadership. By enrolling rising stars in the Academy, the bank enjoys the benefits of energizing up-and- coming leadership and the Association benefits by introducing the rising star to Association benefits.

We’ve all been talking about hiring and retaining Millennials. We’ve been advised that they want continued education. They’ll get it by participating in NJBankers seminars and conferences and especially through the Academy. Millennials want to share ideas.

They can do this sitting on Committees and networking at events. They want to be recognized. I encourage nominations for the Emerging Leaders Rising Star Awards. They want to be involved in community service.

NJBankers can provide that as well. Plus, a Young Bankers program is being designed to engage Millennials in the industry and in the community.

I ask you to join me as an active participant in NJBankers. Use the many opportunities the Association offers to grow; and speak with Service Providers about the solutions they bring to members. When you are engaged, you’ll understand why NJBankers is “Making Connections”.

In conclusion, I am truly honored to serve as your next Chairman and look forward to working with you, the Board, John and our great staff.

■ William D. Moss is president and CEO of Two River Community Bank. He can be reached at wdmoss@ tworiverbank.com.

Summer 2018

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Behind the Teller Line

Creating a New Brand Identity

W

hat do you do, when your organization outgrows its brand? Forty-three years ago, when SB One Bank, formerly Sussex Bank, was founded, this question was the furthest thing from the minds of its then leadership. However, today, with a successful merger under its belt, and geographic expansion well beyond Sussex County, extending further into the New York City metropolitan market, it became increasingly apparent that the brand was in need of an update.

While the bank’s trajectory for growth was changing, its mission was not. Making deep personal connections with its customers and the communities in which it serves, has always been the bank’s focus, and will continue to be; however, with growth and expansion comes more customers and more communities. The bank’s leadership knew they needed one cohesive brand that capAnthony Labozzetta tured not only the bank’s heritage as a SusPresident and CEO SB One Bank sex County institution but its potential as a regional bank. They also wanted to pay homage to their partnership with Community Bank of Bergen County, NJ (CBBC) who they merged with in January of this year.

The rebrand was a consideration before the merger, but it was the partnership with CBBC that was the impetus to move forward. Sussex Bank’s leadership knew that defining its brand would be a significant process and that it needed to be done right.

“You only get one chance to make a first impression,” said Anthony Labozzetta, president and CEO of SB One Bank. “The same holds true with a rebrand.”

So, in the months leading up to the merger, Sussex Bank began the extensive exercise of creating a new brand identity which included developing a new name, logo and color palette.

From the bank’s perspective the most important aspect of the rebrand was communication with all of its key stakeholders. It was a bit of a juggling act since the rebrand ran alongside the merger, but

Introducing SB One Bank Where banking is always about you.

To discover what an even better banking experience feels like, visit

www.SBOne.bank

keeping its staff updated and involved in the process was crucial and so too was notifying its customers that good change was around the corner.

So while the rebrand planning was in the works, the bank launched internal and external communication campaigns to tease the new name, look and feel for the bank. continued on page 11

DiD you HEAR tHE nEws? Community Bank of Bergen County and Sussex Bank are merging to create an even better banking experience.

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New Jersey Banker

Summer 2018

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Politics and Policy

Something is Wrong

By Michael P. Affuso, Esq.

T

he American economy is humming. Unemployment is at an 18 year low, the stock market is near all-time highs, interest rates remain near historical lows, and the business sentiment is bullish. It is one of those rare times like the late 1990’s or the mid 1980’s or the late 1920’s where economic euphoria makes opaque the financial realities. The reality is that this growth is funded by debt.

Since 1970 the United States budget was balanced in only four years (1997-2001). This means that taxpayers have paid adequate taxes to cover the amount of government that we consumed in four years of the past 48 years. That means a 70 year old who began a career at age 22, paid adequate taxes in only four years of that career.

Why am I being a skunk at the picnic?

Why does it matter? It hasn’t been a problem, who cares?

Michael P. Affuso The piling up, year over year of deficits, Executive Vice President/ Director of Government Relations has led to unprecedented government debt.

NJBankers The U.S. debt to GDP ratio is now over 105% -- this means that all of the wealth created in a single year could not pay off the national debt. The deficit is projected to rise to nearly $1 trillion dollars for each year from now until 2021. Each trillion represents over 3% of GDP. Thus in four years, our debt to GDP ratio will likely be close to 120%. The debt to GDP ratio a decade ago was 68%.

In June, foreign purchasers of U.S. debt (China and Russia) both decided to lower future debt purchases; furthermore, in June Federal Reserve Chair Powell adopted a hawkish stance on inflation. Coupled together, interest rates on federal debt are rising. Thus while deficits are growing, debt is piling up and the cost of carrying that debt is growing. Boring – yes. Not sexy – yes. In the weeds – yes.

But consider this…

Each taxpayer owes $175,000 to merely pay the debt that has accrued. Not for future deficits. This means each person would owe $17,500 in additional federal tax for the next 10 years with no interest. There is a slim chance that our debt holders would go for a zero interest repayment plan. According to USA Today, the average ad-

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justed gross income for married filing jointly filer is $117,000. For this family, nearly 30% of adjusted gross income would be needed to pay their share of the national debt for the next ten years – again without interest.

That pays for the hamburger we ate yesterday.

That does not solve the problem of the deficit today. According to DebtClock.org, current U.S. tax revenue at time of writing in real time is $3.372 trillion; spending is $4.147 trillion. Our annual revenue is currently 81% of annual spending – and this is with the economy humming and in a nearly decade long expansion.

Since we’ve already crushed the average taxpayer above to pay for the government they already consumed, we can assume that it wouldn’t be feasible to raise their taxes by an additional 19% to cover the deficit. In this case we may want to look at spending.

Medicare, Medicaid and Social Security represent half of all government spending; Defense represents another 15%. We can slash Medicare, Medicaid and Social Security spending by 37% to balance the current budget. If we want to throw in Defense we need to cut 29% out of the large entitlements and Defense in the current and future budgets to be in balance.

But should a balanced budget be a goal? I would suggest not. We must do BETTER. If a client came to a bank with a great story of a booming business that was just breaking even in a great economy, would we not question why there were no reserves? Would the banker not perceive that there is something that is amiss?

We have heard the baseball analogy to the current economic cycle.

Consensus says that we are in the last three innings. Some say seventh and some say ninth; but we are clearly not in the second. If this is where we are in the cycle and our national balance sheet is what it is – clearly something is wrong.

Common sense tells us to fix the roof while the sun is shining but human nature says go to the beach.

Enjoy the beach, but hurricane season is coming.

■ Michael Affuso, Esq., is executive vice president and director of government relations for NJBankers. He can be reached at maffuso@ njbankers.com.

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Behind the Teller Line continued from page 8

Sussex Bank needed to keep its customers engaged in the process – and share and build excitement with them. The bank knew that changing its name would have a significant impact on them. Both the Sussex Bank and CBBC customers have strong connections to the legacy brands so communicating the impending name change needed to be thoughtful. This meant, communicating with them frequently and through various channels, e.g. in-branch, online, direct mail, etc.

Sussex Bank also needed to keep its staff involved and up-to-date because not only are they on the front line with the customers, but they are the bank’s best ambassadors. It was important that they had a role in the process and could share the excitement of the rebrand with customers.

A concerted internal communications campaign was initiated to keep the staff informed and updated on the rebrand process, specifically, its timing, impact on the branches and customers. The marketing team armed the branches with tools to help them manage customer questions about the impending changes. In addition to preparing the staff, Sussex Bank made it a priority to share its new name and logo with the internal team before launching it externally, and they did so during their annual employee offsite meeting in March.

On April 19, Sussex Bank officially announced that it was changing its name to SB One Bank and launched the new brand to all of its key stakeholders – customers, shareholders and the press. They formally announced the name change during two ribbon-cutting celebrations – in their Sparta and Maywood branches. A digital and print advertising cam-

paign and new SBOne.bank website were launched, and branch-wide celebrations for the SB One Bank team took place the following day.

SB One Bank is confident that the new brand truly captures the essence of who they are and where they are headed.

While it’s only been a few months beyond the formal launch, SB One Bank is still reeling from its rebrand high. All indications show that the new name, new logo and brand identity has been embraced by customers and staff.

SB One Bank is confident that the new brand truly captures the essence of who they are and where they are headed. In addition to delivering a stellar brand, they know the success of the launch hinged on the bank’s ability to keep everyone informed. Clear and consistent communication with its team and customers truly made all the difference.

“We really put our all into the rebrand, and the proof is in the results,” said Labozzetta.

■

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Summer 2018 New Jersey Banker

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Directors’ Corner

Insurance Matters, Beyond D&O

By Doug Borden

M

any banks have a routine with respect to insurance and risk management exposures. The typical relationship between banks and their risk management advisors is an annual presentation by the broker or risk manager who is responsible for designing and placing the insurance coverages. The conversation centers on Directors & Officers insurance (D&O) which is, rightfully so, a coverage exposure near and dear to any director’s heart along with Bond and Cyber Liability insurance. All of these coverages are critical but one of the best insurance opportunities for banks to protect themselves and underwrite profitable business is frequently overlooked - the loan portfolio.

Doug Borden The loan portfolio is not only a community bank’s greatest asset, it produces the majority of the bank’s income. These loans are carefully underwritten to avoid default and reviewed by loan committees, compliance departments, auditors and regulators. The heavy scrutiny is to avoid default and for good reason. According to TrendingEconomics.

com, the US averages 27,000 business bankruptcies per year and is expected to trend to 37,800 by 2020. New Jersey ranks 15th in the US with 287 personal bankruptcies per annum per 100,000 residents. When you scratch beneath the surface, it’s not uncommon to find that many of these portfolio assets went bankrupt because they, themselves, did not have adequate insurance.

Banks purchase Mortgage Protection, Mortgage E&O and Forced Placed Property/Flood insurance, but this should be viewed as a back-up plan, not a primary means of protection.

These policies cover mortgaged properties where the borrower does not have property insurance in place. The structure of this coverage can come in various forms. Suffice to say the lower cost models may require greater attention by Bank staff to prevent coverage gaps.

For example, a borrower’s evidence of insurance is a part of underwriting which doesn’t get enough attention. Commonly, a loan will require property, liability, and sometimes life insurance.

Though that may be an over simplification, my point is the devil (or bankruptcy) is in the details: • A property insurance limit greater than the loan amount does not guarantee an adequate payout if coinsurance require-

Upcoming Events August 14, 2018

November 2, 2018

Fiddler's Elbow Country Club, Bedminster

Courtyard By Marriott, Cranbury

September 5-6, 2018

October 24-25, 2018 & November 5-6, 2018

Washington, DC

NJBankers Office, Cranford

September 24-25, 2018

November 27, 2018

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January 18, 2019

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October 18, 2018

May 1-5, 2019

Location TBD

THE BROaDMOOR, Colorado Springs, CO

Annual Summer Golf Outing and Networking Reception

Regulatory Visit to Washington, DC

Senior Management Conference

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FDIC Directors College

12 New Jersey Banker

CFT-Commercial Lending School

2018 Advanced IRA with PMC

CFO Conference W/FMS, NY/NJ

Economic Leadership Forum

115th Annual Conference & Trade Show

Summer 2018

ments and valuations are ignored. A $1M policy will not pay $1M if the true property replacement cost is $2M. • Even if the amount of property coverage purchased is adequate, the loss of income or mechanical breakdown can be more devastating to a business than physical damage from a fire.

• Liability limits need to be maintained at an amount appropriate for the size of the borrower. Umbrella/Excess Liability insurance is a relatively inexpensive way to insure against catastrophic claims.

• Finally, the more unique policies are rarely reviewed by lenders. As directors we understand the need for Bonds, Cyber and D&O as mentioned earlier.

Isn’t it equally important to the survival of our borrowers?

Determining the adequacy of a borrower’s insurance portfolio is obviously a complex undertaking.

Community banks should not burden their loan officers or credit risk departments with this task, without outside expertise. Bankers should partner with their outside risk manager or insurance broker to establish insurance requirements and train back office staff on how to use them.

As a part of our stewardship program, we meet annually with our banking clients’ credit risk departments and lenders for Insurance 101 training and education.

This exercise accomplishes two things; educates those dealing with insurance for the bank at an in depth level; and establishes a dialogue for those unique circumstances that come along with loan portfolio review. Like many aspects of banking the dialogue with your risk manager should be open and transparent. ■ Doug Borden is co-founder and Managing Director of Borden Perlman. He brings with him over 30 years’ experience, having served as manager of sales of commercial and personal insurance for its predecessor, the W.S. Borden Company. He currently sits on the Board of Directors at First Bank and previously served on the Advisory Board for Northfield Bank from 2016-17 and on the Board of Directors for Hopewell Valley Community Bank from 2006-16.

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Summer 2018 New Jersey Banker

13

Feature

NJBankers and the Edward J. Bloustein School of Planning and Public Policy, Rutgers University Release Results of Eighth Annual Economic Survey

N

JBankers, in conjunction with the Edward J. Bloustein School of Planning and Public Policy at Rutgers University, has released the results of the eighth annual NJBankers Economic Survey of Bank CEOs. The survey inquired about national and state economic assessments; residential loan demand; commercial real estate and business loan demand; branches; Millennials and more.

The survey was conducted under the direction of James W. Hughes, Ph.D., University Professor and Dean Emeritus, Edward J. Bloustein School of Planning and Public Policy, Rutgers University; Marc D. Weiner, J.D., Ph.D., Associate Research Professor, and Data Analyst Evan Iacobucci, M.A., M.U.P. Research Assistant, both of the Bloustein School.

The survey sampled all 92 member institutions of the New Jersey Bankers Association. Of the 92 banks in the panel, 67 fully completed the questionnaire for an overall response rate of 72.8%.

Highlights of the survey include: • This year’s survey results indicate a soaring confidence in the US economy. Nearly 85 percent of respondents indicated the national economy’s health as “good,” and a record 10 percent rated it as “excellent.” For the first time in the survey’s history, no one rated it as “poor.”

• While somewhat more muted than sentiments toward the national economy, confidence in the NJ economy is nonetheless surging. 42 percent of respondents rated New Jersey’s economic health as “good” in 2018, compared to 15 percent in 2016. Still, 2018 marks the eighth consecutive year in which no respondent has rated New Jersey’s economy as “excellent.”

• Respondents clearly see federal policies under the Trump administration as benefiting the US economy, with nearly 3/4 of respondents anticipating economic improvement under its tenure.

• Respondents overwhelmingly anticipate modification of DoddFrank, with components of it being at least partially repealed.

• The 2018 survey continues to show improvement in the business loan market, adding to a now seven-year trend of increasing demand from 2011 to 2018. For the first time, “good” has surpassed “fair” to become the dominant ranking among respondents, with 49 percent indicating that current demand for business loans is “good.”

• Real estate loans are another area of general optimism.

Nearly 60 percent of respondents — a record high — rated the current demand for real estate loans as “good.” This increase takes place as the “fair” rating continues to decline,

14 New Jersey Banker

representing an increasing gap between these ratings.

• Continuing trends observed in 2013 and 2016, the 2018 survey shows that the multifamily rental submarket remains the strongest demand sector.

This sector is immediately followed by industrial warehousing, with “pick-andpack” fulfillment centers, a new category for 2018, coming in as the third strongest submarket.

• Respondents communicated that the largest obstacle to business lending is regulatory concerns (30 percent), followed by a lack of qualified borrowers (24 percent) and lack of demand (21 percent). Nevertheless, the perception of lack of demand and lack of qualified borrowers as obstacles is much diminished from five years ago.

• Residential loan demand remains strong, with a slight majority of respondents — 53.8 percent — indicating that demand is “good.” This figure marks continued improvement that has been registered since 2014, when only 22 percent of respondents gave this same rating.

• The refinance market has changed somewhat, with those ranking it “poor” moving from nearly 13 percent to a second-highest record value of 26 percent. Simultaneously, the “excellent” rating moved from just under 5 percent in 2016 to 0 percent in 2018. The “good” rating fell from just under 30 percent to 20 percent. Still, over 50 percent of respondents rated it “fair.” Recent changes in the federal interest rate may have played a role in shaping these results.

• A slight majority of respondents (57 percent) see home prices remaining unchanged over the next six months, though 2018 continues a trend of fewer and fewer respondents anticipating such stability. Despite a continued increase in respondents who see values dropping over the next six months, a minority of respondents fall into this category (16 percent), while 27 percent see values increasing over the next six months.

• Some shifts are evident in the respondents’ assessment of the most significant obstacles to consumer lending. Regulatory concerns – still largest altogether at 31 percent – are steadily declining, while lack of demand (25 percent) and interest rate risk (19 percent) are growing concerns.

• The categories that best contribute to successful strip malls, according to respondents, can be summed up as “Triple-F”: Food, Fitness, and Fun. Respondents marked the top three contributors as being “Starbucks / Similar Cafés (81 percent),” “Urgent Medical Care Centers” (72 percent), and “Su-

Summer 2018

permarkets” (58 percent), with "Health / Fitness Clubs” falling just out of the top three (45 percent).

• The anticipation of either expanding or decreasing the number of bank branches was fairly split, with a balance between those respondents who see the number of branches increasing (24 percent) and those who see it decreasing (18 percent).

Still, most (58 percent) do not see the number of their bank’s branches changing.

• Millennials are now the largest sector of the workforce, and most significantly growing market. Nevertheless, over half of respondents (54 percent) indicate that their banks are not fully adapted to serving that customer base.

• Banks are taking steps to better accommodate their Millennial employees. The most common step indicated by respondents toward this end is a mechanism to give voice to Millennial employees (37 percent), followed by adding Millennial representation to steering committees and adding specific programs or initiatives devoted to Millennial employees, both of which were indicated by 30 percent of respondents.

• Respondents were split as to whether the $10,000 cap on the SALT deduction from federal tax liability would affect

their deposit bases. Nearly 4 in 10 respondents (39 percent) see the $10,000 cap as likely to decrease their deposit bases.

Nevertheless, a few more than that do not think it will have an effect, and a smaller portion did not know what effect it would have.

• The expansion of credit unions is perceived as having a negative effect on deposit bases of banks. The majority of respondents, close to 2/3, indicate that the expansion of credit unions has decreased their banks’ deposit bases.

NJBankers thanks our member Managing Officers SPONSORED BY who participated in the survey which yielded this valuable information. We also thank FinPro, Inc. for sponsoring the survey once again. ■ For information and copies of the survey contact Emily DeMasi, VP/ Director of Communications, New Jersey Bankers Association at edemasi@njbankers.com

CEIS REVIEW INC.

C ommerCial l oan P ortfolio C onsulting f or B ankers S ince 1989.

By

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Serving 135+ commercial lending Institutions throughout the U.S. and overseas, each of our Credit Professionals bring with them an average of 20+ years of Lending and/or Executive Level Experience to each of CEIS’ Clients engagements.

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Summer 2018 New Jersey Banker

15

NJBankers Events

Photos Don Christensen, RIZCO and Dave Gruol, David Gruol Photography

NJBankers Holds New & Improved Annual Conference

This year’s Annual Conference at the JW Marriott Marco Island Beach Resort in FL drew numerous representatives from 52 banks and more than 94 associate members and other business firms.

NEW FORMAT DELIGHTS ATTENDEES This year, the Annual Conference format was refreshed and reinvigorated resulting in many accolades from attendees. Unlike previous years, every morning began with educational Concurrent

Sessions. Each session was repeated allowing participants to attend twice as many sessions in a day then at previous Conferences.

Rather than hold two General Sessions during the Conference, the Concurrent Sessions were followed by three General Sessions.

By featuring three sessions, attendees experienced more Keynote speakers who captivated the audience with their insight.

WHAT A START! Joe Everson, an artist and singer painted a depiction of the iconic 1945 Iwo Jima photograph while he sang the national anthem at the First General Session of the Annual Conference.

He painted “Raising the Flag on Iwo Jima” upside down and then flipped it right-side up as he finished singing “The Star-Spangled Banner,” revealing the completed image to the attendees’ delight.

The “Amazon Prime Effect”, featuring Dave DeFazio, partner Strategy Corps, fascinated the audience with just how much Amazon is influencing the world around us. His presentation was captivating and timely indeed!

16 New Jersey Banker

Mark Zinder, speaker, economic forecaster, writer and consultant presented “What Happens Next”- a futurist look that resulted from studying historical events. He showed how history repeats itself with innovations that disrupt or destroy the norm!

Scott Pioli, Assistant General Manager of the Atlanta Falcons discussed diversity and its impact on sports and life in general.

His Q & A period allowed attendees to participate in discussions ranging from current NFL initiatives to insight on working with Bill Parcells of the Giants (his father-in-law!) and Bill Belichick.

His message was valuable to all – not just football enthusiasts!

Summer 2018

MORE CONCURRENT SESSIONS

With the refreshed format, the Annual Conference featured 11 Concurrent Sessions. Topics of interest and speakers included: BSA – Today and Tomorrow

Mary Marley, Partner, Martino & Thoms, LLC Salvatore Zerilli, Managing Director,The Mercadien Group

Navigating the Cybersecurity Landscape

Sudhir K. Kondisetty, Principal, Risk Advisory Services, RSM US LLP Sue Salecky, SVP, Business Development, COCC

Best Practices in CEO and Executive Succession Planning and Executive Retention

Steven Goldberg, Regional Managing Director, Bank Financial Services Group

It’s All About Deposits

Matthew K. Miller, Executive Managing Director, FinPro, Inc.

Regulatory Hot Topics

Lieutenant Colonel Robert Darling presented a moving description of his experience during 9/11 as a logistics coordinator in the President’s Bunker. His discussion on crisis leadership was a minute by minute, hour by hour recounting of the events of 9/11 as managed by our top leaders including President Bush and Vice President Cheney among other administration officials including Condoleezza Rice, then Secretary of State. He later signed his book, “24 Hours Inside the President’s Bunker- 9/11/01: The White House”.

Moderator: Michael Mancussi, Esq., Partner, Arnold & Porter Kaye Scholer Panelists: Thomas Angstadt, Assistant Deputy Comptroller, Bank Supervision, Office of the Comptroller of the Currency Jacqueline P. Fenton, CPA, Assistant Vice President Regional, Community and Foreign Institution Supervision, Federal Reserve Bank of New York Robert Long, Assistant Regional Director, Federal Deposit Insurance Corporation William T. Wisser, Vice President – Safety and Soundness Regulatory Applications, Enforcement and Risk Monitoring Supervision, Regulation and Credit, Federal Reserve Bank of Philadelphia

Recent Trends in Mergers and Acquisitions of Banks, Mutuals and MHCs Michael Rave, Esq., Partner, Day Pitney Douglas P. Faucette, Esq., Locke Lord LLP

The Changing Face of Directorship

Kristine Oliver, Managing Director, Pearl Meyer & Partners Alan J. Kaplan, Founder & CEO, Kaplan Partners

CRA Session

Bria Barker, Director Financial Education, EverFi Michael D. Ryan, President/CEO, Innovative Financing Solutions Sue Shaffer, Vice President, Relationship Development, CRA Partners

Financial Reform Legislation and Regulation for 2018 – What’s in it for Community Banks?

Eric Luse, Esq., Partner, Luse Gorman John Gorman, Esq., Partner, Luse Gorman

Rebeca Romero Rainy, President and CEO of the Independent Community Bankers of America (ICBA) presented a summary of the efforts and wins by the ICBA to support community banks nationwide. She is one of the industry’s foremost advocates for regulatory reform that makes sense! She discussed future advocacy efforts to support the health of the banking industry by a continuing dialogue with the current Administration on rolling back over-bearing regulations that are hurting community banks. Her presentation received a huge round of applause.

Investment Strategies for a Flattening Yield Curve James L. Reber, President/CEO, ICBA Securities

Standards in Payments

Patrick Dix, Vice President, Public Relations, SHAZAM

Summer 2018 New Jersey Banker

17

NJBankers Events

Photos Don Christensen, RIZCO and Dave Gruol, David Gruol Photography

An Inspirational Breakfast featured Ben Utecht, former NFL player of the Indianapolis Colts. As a result of six seasons, and a Super Bowl championship, Utecht walked away because of multiple injuries, concussions, and memory loss from playing. Utecht works with and advises the American Brain Foundation on its mission to fund research in to the causes, improved treatments, and cures for brain and other nervous system diseases.

INSTALLATION OF 2018 – 2019 OFFICERS The Annual Conference featured the Installation of the NJBankers 2018 – 2019 Officers. The new leadership includes, as Chairman, William D. Moss, President and CEO, Two River Community Bank; First Vice Chairman Thomas J. Kemly, President and CEO, Columbia Bank; and Second Vice Chairman Thomas J. Shara, President and CEO, Lakeland Bank. James Vaccaro, Chairman, President and CEO, Manasquan Bank administered the oath of office and presented the ceremonial gavel to Moss.

Associate Members and NJBankers staff meet at the open meeting of the Associate Member Committee. The Committee connects at the Annual Conference to hear more about NJBankers initiatives.

In addition, staff addresses any questions that Associates may have about membership. The Committee is led by Roseann Casiere, RMC Consulting Group.

Fun & Games Attendees enjoyed the Annual Conference fun and games night. We are pleased to report that none of the participants in the Everglades Tour were lost, and the golf tournament was not rained out (though gloomy skies prevailed)!

Spouses enjoyed a private breakfast as well as a yoga session for anyone interested in a morning stretch.

GAME NIGHT WAS A HUGE SUCCESS! Featuring Skee-ball, pool, giant Jenga, basketball and Board Games, attendees enjoyed winning, “not winning” and even a pie in the face!

All were good sports. Food and fun was had by all.

18 New Jersey Banker

LIFE’S AT EASE WITH AN OCEAN BREEZE BEACH BASH This year, the Annual Conference featured an afternoon of music, fun and food. The event was held earlier in the day than previous conferences – from 1:30 to 5:30 pm – and though the weather didn’t cooperate at first, all enjoyed the planned activities. Music by the “Surf Dudes” had attendees singing along and tapping their feet. The food stations offered choices including tacos, elk (!), ice cream and so much more.

Members enjoyed outdoor activities when the weather broke.

Paddle Boards, Corn Hole, water hammocks and volleyball were available for all to enjoy! Life was certainly at ease for all on a beautiful beach with white sand and turquoise waters!

THE MARKET SHOWPLACE BUSTLED WITH ACTION! The Market Showplace was the site for several receptions as well as for information. Thanks to all exhibitors who displayed and discussed the latest and greatest products and services with members.

Summer 2018

NJBankers Milestones There were three members who celebrated significant anniversaries serving the New Jersey banking industry this year.

Katherine Liseno, president/CEO, Metuchen Savings Bank, was honored for 55 years of service to the Garden State banking industry. Andrew Scrivani, a Director of Crest Savings Bank, celebrated 40 years serving the banking industry.

Forrey-Gallman Awarded to Two Deserving Recipients

Robert Monteith, former president/CEO, and a Director of NVE Bank, was recognized at the Former Chairmen’s dinner for his 45 years of service to the banking industry. John E. McWeeney, Jr., NJBankers president & CEO presented plaques to the deserving recipients. We applaud your dedication to the industry!

In addition, Bogota Savings Bank has served the banking public for 125 years having been incorporated in 1893. Though there have been many changes, mergers and acquisitions in the industry, the bank continues to serve their customers and neighbors. We wish Bogota Savings Bank another 125 years (or more) of service!

The Forrey-Gallman Award was bestowed upon two familiar names in the Garden State Banking Industry. The Award honors members who have demonstrated long-term outstanding service to the NJ banking industry. It is named for Robert C. Forrey and Emil A. Gallman, longtime chief executive officers of the New Jersey Bankers Association and the New Jersey Savings League, respectively, who inspired association members with their leadership in assuring that members were well represented in the areas of government relations, public relations and educational opportunities.

This year, there were two Award recipients.

Gerald H. Lipkin, former President/ CEO who continues to be Chairman of Valley National Bank and Robert E. Stillwell, CEO of Boiling Springs Savings Bank received the prestigious award. In addition to leading Valley National Bank to excellence, Gerry has been honored for his many contributions, both business and personal, to Community Based Organizations. Bob has led BSSB to excellence as well! BSSB was chosen as one of the “Best Places to Work” and he gave back to the community as a founder of the Bank’s Community Alliance Program.

This year, the following banks were honored with awards:

2018 Members Applauded for Helping Their Neighbors through the Community Service Awards

Members were recognized for their commitment to the communities they serve through the NJBankers Community Service Awards. The NJBankers Public Relations and Marketing Committee initiated the Award program as a way to recognize the many civic and charitable activities that are conducted by member banks throughout the year. The awards are determined by independent judges who are members of the PRSA.

TD Bank Largest National Bank Provident Bank Banks with Deposits over $5 Billion Peapack-Gladstone Bank Banks with Deposits between $2 Billion to $5 Billion Northfield Bank Banks with Deposits between $1 Billion and $2 Billion Unity Bank Banks with Deposits between $500 Million and $999 Million Crest Savings Bank Banks with Deposits between $300 Million and $500 Million Lincoln 1st Bank Banks with Deposits below $300 Million Congratulations to these members for all you do for your customers, neighbors and communities you serve!

See event sponsors on page 30

Summer 2018 New Jersey Banker

19

Feature

It’s Not the One Thing You Do, It’s Everything You Do to Control Your Healthcare Plan Costs

E

mployers often ask their healthcare advisors, “What is the one thing I can do to control my healthcare plan costs?” Well, in many ways this is a trick question. There is no magic bullet. Studies from national consulting firms have indicated that employers who actively manage many aspects of their program experience lower long-term costs than employers that are passive. Some of the areas that need to be actively managed every year include: 1. Plan Design- Does the plan design provide benefits in a cost efficient and effective manner? Is the plan designed so that employees have a little skin in the game? You want employees to go through a decision process when they select a provider, medication or type of service. Plans that have low out of pocket expenses for employees often encourage over-utilization of services.

2. Wellness Programs- Simply stated, healthy plan participants have less medical claims than unhealthy plan participants. As a result, many employers are encouraging healthy behaviors. There are a wide range of activities that employers can initiate to accomplish this goal. Some of the activities can include walking contests, blood pressure screenings, health fairs, healthy foods in the company cafeteria, weight loss programs, smoking cessation programs, annual physicals, etc. The keys to a successful wellness program is to phase it in gradually, make it easy to understand and incent employees to participate. The incentives can be monetary (bonus or reduced employee contribution) or non-monetary (extra day off).

3. Employee Contributions- For many years, employers simply paid 75-80% of the plan costs for employees and dependents. With the prevalence of two working spouses, employers have had to re-think this approach. The norm today is for employers to pay a lower percentage of the total cost for dependents than for employees. In addition, employers are requiring employees to provide proof that they are trying to improve their health condition through completion of a Health Risk Assessment, participation in a smoking cessation or weight loss program or any other “wellness" that doesn’t run afoul of Federal Regulations. Participation in the various wellness programs will lower the payroll deduction for employees to the medical plan. At the same time, improved health will lower claims which will ultimately lower the cost of the plan for employers.

4. Financial Structure of the Plan- Employers need to see if the plan is structured in the most appropriate way for a group with its characteristics. Often smaller groups immediately think that fully-insured programs are the way to go. However, there has been a trend for some small employers to self-insure benefits, albeit with low amounts of upside risk. Groups of a few hundred to a few thousand employees often self-insure or utilize a hybrid type of funding arrangement (e.g., minimum premium or level funding). It is important that an employer has a similar risk philosophy/tolerance for its healthcare plan as it has for other aspects of its business.

20 New Jersey Banker

BANKERS COOPERATIVE GROUP , INC.

A N N J B A N K E R S A F F I L I AT E D C O M PA N Y

Insurance Companies/Provider Networks- It is most important that the insurance company’s provider network matches up well with the geographic distribution of your employees. Access to providers is critical. At the same time, network discounts and insurance company premium costs should be factored into the selection process of the insurer and their network.

6. Communication of the benefits- Employees who fully understand the operation of the plan are apt to have lower plan costs than employees who don’t understand the plan. Employee engagement can result in lower plan costs as well as the most appropriate care in the correct setting. Communications can be in the form of e-mail blasts, posters, brochures, etc. However, in keeping with the way we communicate in our everyday lives, employers are increasingly establishing Employee Benefit Online Portals for their employees. These portals not only allow employees to enroll for benefits online, they give the employer a place to store plan documents, forms, notices, etc. This approach makes it easier for employees to understand their benefits but helps to reduce internal administrative costs and some of the costs of compliance.

As we can see, what started out as a simple question, turned out to have a multi-faceted answer. But at the end of the day, proactive employers may reduce their health trend rate by 2-4% every year.

Looking at it another way, an employer spending a $1 million today can save $380,000 to $740,000 over the next 5 years by being proactive.

We’re assuming a 10% annual baseline medical trend in our projection.

For larger employers, the payoff is even more substantial. It is definitely a worthwhile exercise.

Established in 1982, Bankers Cooperative Group, Inc. (BCG) is the selfcontained brokerage facility for members and associate members of the New Jersey Bankers Association (NJBankers). Today, BCG is the leading provider of employee benefit programs for New Jersey’s banking industry.

As administrator of the New Jersey Bankers Association sponsored Employee Benefits Trust (EBT), BCG is able to leverage almost 8,000 industry employees and their dependents to negotiate group employee benefit programs and pricing not generally attainable on an individual employer basis. The “Cooperative” in our name is what sets BCG apart from the competition. Since 1998, BCG has returned $2.9 million in patronage dividends to its shareholders and EBT participants.

■ 5.

Summer 2018

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Feature

TOP FIVE COSTLY MISTAKES TO AVOID IN COMMERCIAL LOAN CLOSINGS

By Delia C. Donahue, Pepper Hamilton LLP

B

anks are in the business of making loans. Lenders, underwriters and credit committees do their best to weed out the potentially problematic credits. The approval of a strong credit however is only the beginning. The bank then partners with a law firm to document and close the loan. Everything is full speed ahead, with a target closing date looming in the near future. But before the closing team steps on the gas, they should take a moment to remind themselves that sometimes borrowers default. Lenders need to invest time and care upfront in the drafting, negotiating and closing of a loan to best position their banks to recover if there is a default.

Based on my nearly 20 years of experience representing banks, this article will identify the Delia C. Donahue top five most costly mistakes made by lenders and their counsel in the closing of commercial loans.

1. Failure to Issue a Closing Checklist A comprehensive closing checklist and “kickoff” conference call are vital to managing the closing process. Failing to prepare and regularly update a checklist will cause confusion and delay. Bank counsel should always issue a closing checklist and hold an initial conference call with the borrower’s counsel to review the deliverables and delegate responsibility for the various items listed therein, including drafting loan documents, collecting and reviewing organizational documents, preparing entity approvals, and ordering searches and third-party reports. A number of these items may take weeks to prepare. The third-party documentation and other lead time items (e.g., appraisals, title commitments and surveys) should be started right away, especially when real property collateral is involved. Copies or drafts of the closing diligence should be delivered to the bank at the earliest possible time so the items can be reviewed thoroughly and any identified issues addressed quickly and effectively. Conference calls should be held regularly with the working group (including lender, borrower and counsel for both) to review and update the closing checklist. Lenders do not want the untimely delivery of diligence to hold up closing, create unnecessary post-closing items, or result in a sloppy review and analysis. A good closing checklist will help manage the closing schedule and mitigate against missing or incomplete information and documentation.

2. Reliance on “Canned” Loan Documents “Canned” documents or fillable loan documentation software should be avoided, even for seemingly simple loans. Poor drafting and using improper documentation are serious errors that can result in an inability to enforce your loan. The loan documents set out the terms of the deal

and contractually bind the borrower and the lender. There is almost always some aspect of a commercial loan that requires nuanced drafting.

Most of the canned documents are not intended or formatted for negotiation, and the addition and deletion of text can have unintended consequences. In my reviews of loan files documented with these types of forms, I have seen glaring errors, including documents with key fields left blank (e.g., loan amount), instances when the wrong document is included in a package (e.g., use of a security agreement for a specific piece of equipment when an “all assets” security interest is intended), instances when the information is filled in incorrectly (e.g., incorrect signature blocks and authorized signers), and documents that are missing state-specific legally required language (e.g., mandatory disclosures).

These types of errors will directly impact the bank’s ability to enforce its documents and realize the benefit of its intended bargain.

3. Over-Negotiating the Loan Documents When negotiating loan documents, carefully think through the effect of each proposed revision and avoid conflicting terms. I always put myself in the position of the workout specialist or workout attorney who is trying to enforce the documents post-default. What would they want the documents to say? I generally will recommend against a revision if it would unduly restrict the lender’s ability to call a default (e.g., extended cure periods or narrowly defined events of default).

A lender may not want to accelerate a loan, but the ability to call a default will bring the borrower to the table to discuss other options, such as waiver, amendment or forbearance, and will create fee-generating opportunities for the bank. Any agreed-to revisions to the initial documents must be incorporated consistently across the document set to avoid internal contradictions. It is helpful to include a conflicts-ofterms clause in the loan agreement (e.g., “if any provisions contained in this Agreement conflict with any provisions in any other Loan Documents, the provisions contained in this Agreement shall govern”). If a continued on page 25

Summer 2018 New Jersey Banker

22

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Feature

Photos Don Christensen, Rizco.

NJBankers Women in Banking Conference Knocks it out of the Park THE PALACE AT SOMERSET PARK, THAT IS! The NJBankers Women in Banking conference saw more than 435 attendees enjoy a day of Knowledge, Power and Mentorship.

The Conference was designed by the Women in Banking Planning

A number of the members of the Women in Banking Committee strike a pose!

The afternoon’s Keynote Speaker, Morris Morrison, talked about his journey and tied it back to the conference noting that the strongest people in his life have been women.

The morning’s Keynote, Dima Ghawi, holds a glass vase which she uses as a metaphor for shattering one’s own fears and limitations. Dima then signed copies of her book, Breaking Vases.

Dima received a standing ovation for sharing her words of wisdom with conference attendees.

24 New Jersey Banker

Committee which provides direction each year for topics, a communitybased organization for contributions and so much more. Just take a look at the speakers who shared their wisdom!

WIB Committee Chairwoman Geri Kelly, Columbia Bank EVP and HR Officer, shares a light moment with the audience.

The mission of Eva’s Village is to provide care and support for people who are struggling with poverty, hunger, homelessness, and addiction. A contribution of $5,000 was given to Marie Caliendo, Manager of Corporate and Foundation Relations to support their mission. Presenting a ceremonial check to Marie are Geri Kelly, Columbia Bank EVP and HR Officer (L) and John McWeeney, Jr., NJBankers President and CEO.

In addition to a contribution of $5,000 to support the work of Eva’s Village, conference attendees brought donations to support Eva’s clients that included personal items like shampoo, diapers, baby items and even Teddy Bears! (yes… those are all bags of donations behind Marie!)

Summer 2018

Feature continued from page 22 default occurs, a strong and consistent set of loan documents will put the bank in the driver’s seat.

WIB offered Concurrent Sessions that were repeated so attendees had more choices for speakers and topics. Here, Dr. Patti Ippoliti, Assistant Professor of Professional Practice, Rutgers Business School discusses “Unconscious Bias in the Workplace”.

Lauren Hammer, principal of Hammer Leadership, addressed an overflowing room of attendees in her Concurrent Session – “It’s OK to Say No!”

A second Concurrent Session was led by Susan Mach, Owner, Mach Creative Services. Dr. Mach enlightened the audience about “Negotiating While Female: How to Get What you deserve – with your Integrity Intact”.

The afternoon’s Keynote, Morris Morrison, got down to attendee eye-level to make a point. His well-received presentation was titled “Overnight Success”, and he noted that it isn’t the case and requires self-understanding and goals. Morris then signed his book, “Overnight Success: An Inspiring Story About Culture, Results & the American Dream” for attendees.

4. Erroneous UCC Filings Improperly drafted and filed financing statements can have devastating effects on a bank’s collection efforts. In a secured financing, the lender relies on a perfected security interest. Perfection means that the lender has rights and remedies against the borrower’s assets if an event of default occurs. It also means that the lender has rights against other creditors if the borrower goes into bankruptcy. A bank’s failure to properly perfect its security interest will jeopardize its rights to the collateral. A security interest in the majority of personal property assets is perfected by filing a UCC-1 financing statement in the jurisdiction where the debtor is located. The determination of where a debtor is located for perfection purposes depends on whether the debtor is a registered business entity, individual or unregistered business entity. Financing statements filed in the wrong jurisdiction are ineffective. Furthermore, including the correct name of a debtor on the financing statement is critical since the filing will be indexed and searched based on the debtor’s name. A financing statement will be ineffective if it contains any “seriously misleading” errors or omissions in the debtor’s name. Whether an error or omission is “seriously misleading” will depend on the search logic used by the applicable filing office and whether a search run in that office would disclose the relevant filing. Errors that result in a loss of perfection may be as simple as adding an extra space before the “Inc.” or “LLC” in a debtor’s name. These errors will have dire consequences for banks seeking to enforce their rights against collateral.

5. Use of Post-Closing Agreements Lenders should avoid using post-closing agreements and obtain any desired information and documentation from a borrower before a loan closes. Post-closing agreements listing various deliverables that should have been addressed before the closing date will only create headaches down the road for the lender and the bank’s closing department, which will need to monitor the open exceptions. The borrower is likely to be less than responsive to documentation requests once it receives its money and returns to running its business. The bank has the most leverage before the money is out the door. If the information or documentation is important enough to include as a prerequisite to closing, it is usually important enough to wait for.

Making good loans is key to a bank’s success. Lenders and their counsel should focus on gathering the right information and accurately documenting the transaction in a way that best positions the bank to make a strong recovery if there is a default. By avoiding the above costly mistakes, lenders will develop stronger loan portfolios, with renewed confidence in their ability to enforce the rights and remedies intended under their loan documents.

■ Delia C. Donahue is a partner in the Princeton office of Pepper Hamilton LLP. Ms. Donahue focuses her practice on finance and other commercial transactions. She regularly represents borrowers and lenders in commercial lending transactions, restructurings and workouts. She can be reached at 609-951-4149 or donahuedc@pepperlaw.com.

Summer 2018 New Jersey Banker

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Feature

A Breath of Fresh Air: How the New Administration is Offering Regulatory Relief

By Sanjay Marwaha and David Smith of Accume Partners

O

ne can say for certain that there has been a lot of change with the new administration. President Trump has appointed new members to several key agencies that has, and could further impact, financial institutions. The extent of the impact will not be fully known until the coming months are upon us. There also has been a shift from the focus on adding new regulations to allow for some de-regulation, which could be very beneficial to financial institutions.

First, let us take a look at the newly nominated head of the Consumer Financial Protection Agency (CFPB), Kathy Kraninger. President Trump announced on Saturday June 16th that he will be nominating Kathy Kraninger to head the CFPB. Mick Mulvaney has been keeping the seat warm since he was appointed as acting Director of the CFPB on November Sanjay Marwaha 25, 2017. Ms. Kraninger was recently associate director at the Office of Management and Budget. She has also held many positions on Capitol Hill. In her current position, Kraninger oversees the budget for financial regulators. She must be approved by the Senate before she can take over the position. Kraninger may continue with de-regulation or she may hold off on the current momentum.

In addition, (see chart) other agencies David Smith are undergoing changes.

The good news for financial institutions is that some regulatory relief is finally here!

The good news for financial institutions is that some regulatory relief is finally here!!! What does this mean for you exactly?

On May 24th, 2018, President Donald Trump signed S. 2155 Economic Growth, Regulatory Relief, and Consumer Protection Act into law. The new bill was a critical first step toward bringing regulatory relief to financial institutions. The bill:

26 New Jersey Banker

• Provides Qualified Mortgage designation for most mortgages held in portfolio by banks with less than $10 billion in assets; • Makes it easier for lenders to close loans without waiting when rates decrease; • Ends mandated stress tests for banks with under $100 billion in assets; • Relieves banks that originated fewer than 500 mortgage loans per year from the expanded Home Mortgage Disclosure Act (HMDA) data points; • Provides relief from appraisal requirements for smaller mortgages in rural areas; • Simplifies capital calculations for community banks; • Institutes longer exam cycles for community banks; and • Provides relief from the Volcker Rule for most community banks.

Some provisions of the regulatory reform bill took effect immediately while others have future specified effective dates (examples follow below). Further still, some are open-ended and will require rulemakings by the regulatory agencies to take effect.

The focus of this article is to discuss some of the major points of the bill, how they may impact your institution, and when they will take effect.

One of the most discussed rule changes by bankers stemming from the bill is Section 104 - Home Mortgage Disclosure Act Adjustment and Study (HMDA relief). Unfortunately, it has an unspecified effective date requiring further regulations to take effect. Once it is effective, banks that originate fewer than 500

Summer 2018

Consumer Financial Protection Bureau

CFPB

President Donald Trump nominated Kathy Kraninger to lead the Consumer Financial Protection Bureau where Mick Mulvaney is now acting director.

CFTC

Dawn Stump (Republican) and Dan Berkovitz (Democrat) are awaiting their confirmation as Commissioners.

FDIC

Thomas Hoenig, Vice Chair (Republican) Term to end in Q2 of 2018. President Trump will select a Democrat for the Vice Chair and Internal Director.

SEC

Robert Jackson is President Trump’s Democratic pick for Commissioner. Kara Stein will remain in her post as Commissioner until a new nominee is announced.

*Sources can be found at the end of the article

closed-end mortgage loans or less than 500 open-end lines of credit in each of the two preceding calendar years will be relieved from complying with the new expanded data points that took effect January 1, 2018. This will reduce the necessary time and efforts to properly collect and report all of the expanded data fields.

Other significant aspects of the law with unspecified effective dates are noted below. Section 101 - Minimum Standards for Residential Mortgage Loans, provides that certain mortgage loans that are originated and retained in portfolio by institutions with less than $10 billion in consolidated assets will be deemed qualified mortgages under the Truth in Lending Act (TILA) while maintaining consumer protections. Section 109 - No Wait for Lower Mortgage Rates, removes the three-day wait period required for the combined TILA/RESPA mortgage disclosure if a creditor extends to a consumer a second offer of credit with a lower annual percentage rate. Section 103 – Appraisal Exemption for Rural Areas, provides an exemption from any appraisal requirement if certain conditions are met (rural area, loan less than $400,000, originator has a federal regulator and originator documents three or more appraisers and documents lack of availability).

These three aforementioned changes allow more flexibility for lenders. Section 201 – Highly Capitalized Banks, requires the federal banking agencies to develop a specified Community Bank Leverage Ratio (the ratio of a bank's equity capital to its consolidated assets) for banks with assets of less than $10 billion. Such banks that exceed this ratio shall be deemed to be in compliance with all other capital and leverage requirements.

Some sections that are effective immediately (just needing regulations to be confirmed) include Section 210 - Examination Cycle, raises the consolidated asset threshold from $1 billion to $3 billion for well-managed and well-capitalized banks to qualify for an 18-month examination cycle. Section 203 - Community Bank Relief, provides that banking entities will be exempt from Section 13 of the Bank Holding Company Act (Volcker Rule) if they have less than $10 billion in total consolidated assets, and total trading assets and trading liabilities that are not more than 5% of total consolidated assets.

The aforementioned changes are only a highlight of the handful of regulations impacted by the law. This is a groundbreaking effort to reverse some of the recent onslaught of additional regulatory requirements. This is a change from the increased regulation and scrutiny we are seeing elsewhere, such as from the New York Department of Financial Services. The regulatory pullback from the law is a welcome breath of fresh air from bankers. Stay tuned and watch out for the effective dates stemming from the law and how the changes impact your institution.

■ Sanjay is a Managing Director and Risk & Regulatory Advisory Services Practice Leader for Accume Partners. He has 20+ years of professional services including internal audit, regulatory compliance, enterprise risk management, information technology, blockchain, business process enhancement, strategy and performance improvement. He's worked with financial and non-financial institutions, insurance companies, non-profits, and regulators. Sanjay can be reached at smarwaha@accumepartners.com or at 585-721-9399. David is a Director in the Risk & Regulatory Advisory Services Practice for Accume Partners and has over 13 years of regulatory compliance experience in the financial institutions industry. He provides regulatory compliance services to the firm’s financial institutions clients. David performs and oversees consumer compliance audits and consulting reviews (all lending, deposit, and alphabet regulations), specialty audits and reviews (BSA/AML, Fair Lending, UDAAP and CRA) and compliance management audits for a wide range of clients. David is a former regulator with the Office of the Comptroller of Currency. David can be reached at dlsmith@accumepartners.com or at 570-606-7423.

*Sources: • https://www.marketwatch.com/story/heres-what-is-known-about-thesurprising-choice-to-lead-the-cfpb-2018-06-18 • https://www.wsj.com/articles/white-house-weighs-cftc-general-counselfor-cftc-democratic-slot-1513370482 • https://www.fdic.gov/about/learn/board/hoenig/index.html • https://www.sec.gov/biography/commissioner-robert-j-jackson • https://www.sec.gov/biography/stein-kara-m

Summer 2018 New Jersey Banker

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Feature

The End of LIBOR

By Lydia C. Stefanowicz and Charles J. Wilkes, Greenbaum, Rowe, Smith & Davis LLP

B

oth lenders and borrowers who have or are negotiating credit facilities with LIBOR-based interest rates need to be aware that LIBOR is being phased out. Parties should review and understand what their loan documents, swap documents and other financial contracts say about how interest will be calculated in the absence of LIBOR, which is slated to be eliminated completely by the end of 2021, if not sooner.

LIBOR is an acronym for London InterBank Offered Rate. Originally, LIBOR was the average interest rate at which a bank could borrow from leading banks in London.

A brief history of LIBOR may be helpful to understand how we arrived at where we are today. LIBOR loans first appeared in London in the early 1970’s when growing inflation and rising interest rates made banks relucLydia C. Stefanowicz tant to make loans at a fixed rate for a long period of time1 (i.e., a classic term loan). An alternative developed in the form of syndicated loans which allowed several banks to share the risk by each making only a portion of a large loan, which was originated, structured and administered by an agent bank.

In addition, LIBOR allowed the syndicate banks to set the interest rate on the loan for a relatively short period of time (each an “inCharles J. Wilkes terest period”) at a rate that was determined by consulting other banks to ascertain the rate at which the lending banks could borrow (and often actually did borrow, a process known as “match-funding”) from other banks an amount equal to the loan for a period of time equal to the interest period. This turned a large fixed rate loan into a series of smaller adjustable rate loans with the interest rate reset periodically to reflect market conditions, which reduced the risk of the then volatile interest rate environment. When the Prime Rate (then the dominant benchmark for interest rates on U.S. corporate loans) reached an unprecedented high of 21.50% in 1980, large U.S. borrowers turned in growing numbers to the London Eurodollar market. Eurodollars are U.S. dollar deposits held outside of the U.S. At the time, Eurodollar deposits were not subject to the same regulatory restrictions as U.S. dollar deposits within the U.S. This resulted in the ability to make Eurodollar loans at interest rates that were several percentage points lower than the Prime Rate. LIBOR loans came to be perceived as loans that enjoyed favorable terms typically reserved for blue chip borrowers. As the London financial markets grew in importance, LIBOR evolved to become the preferred benchmark for shortterm interest rates around the world. LIBOR rates are now published each business day for five major currencies (U.S. dollar, British pound sterling, euro, Japanese yen and Swiss franc) and several borrowing periods, ranging from overnight to one year. It has been estimated that

28 New Jersey Banker

over $350 trillion dollars’ worth of financial derivative contracts, mortgages, bonds, and commercial and consumer loans bear interest at rates based on LIBOR.2

WHY CHANGE A BENCHMARK THAT IS SO WIDELY USED? Originally, LIBOR was the average interest rate at which a bank could borrow from leading banks in London and was ascertained on an individual basis by the bank making the loan. In 1986, the British Bankers Association (BBA), a U.K. trade organization, took over the administration of LIBOR and began to compile and publish the rates.

Various investigations after the 2008 financial crisis revealed that since the early 1990’s, BBA had colluded with reporting banks to falsely inflate or deflate rates to their advantage. By 2012, the breadth of the manipulation scandal had become evident and about 20 major banks worldwide were the subject of criminal and civil investigations and lawsuits. Thereafter, the Financial Conduct Authority (FCA), a UK regulatory agency, assumed responsibility for overseeing LIBOR.3 While regulatory reform could overcome the problem of market manipulation, post-financial crisis regulation diminished bank appetite to make wholesale loans. As a result, banks now rely on judgment calls more than actual transactions to set LIBOR. In 2017, Andrew Bailey, FCA’s CEO, in a widely-reported speech, questioned the sustainability of LIBOR as a benchmark. Bailey noted that “the underlying market that LIBOR seeks to measure—the market for unsecured wholesale term lending to banks—is no longer sufficiently active.” 4 According to Bailey, “[i]f an active market does not exist, how can even the best run benchmark measure it?” Acknowledging that the unexpected and unplanned disappearance of LIBOR would cause market disruption,

Summer 2018

Bailey announced that the current panel banks had agreed voluntarily to sustain LIBOR until the end of 2021 to allow time for a transition to alternative reference rates that are based on actual transactions.

WHAT WILL REPLACE LIBOR? In the U.S., in a press release published on December 14, 2017, the Federal Reserve Board released final plans to create new reference rates based on overnight repurchase agreements (commonly known as “repos” and pursuant to which banks lend money to each other on a secured basis), including the Secured Overnight Financing Rate (SOFR), which was identified as the recommended alternative to U.S. Dollar LIBOR5. SOFR is a broad measure of the cost of borrowing overnight, calculated as a volume-weighted median of transaction-level tri-party repurchase agreement transaction data.6 Since early April 2018, the New York Federal Reserve Bank has published SOFR on its website each business day at approximately 8:00 a.m. To-date, historical SOFR has ranged from a low of 1.65% on May 22 to a high of 1.92% on June 22.7 This action by the Federal Reserve does not, however, solve the problems that arise from the end of LIBOR. This new benchmark will not be a successor rate to LIBOR in any technical sense. There is no mandate to use SOFR as a replacement for LIBOR and, in its current form, SOFR may not actually be the most relevant benchmark for many financial products. LIBOR transition needs to deal with the structural differences between the two rates. Two notable differences exist between LIBOR and SOFR. First, SOFR is based on secured transactions, while LIBOR reflected the pricing on unsecured transactions. Generally secured borrowing rates are lower than unsecured rates. Second, SOFR is an overnight rate only, while LIBOR is published for several periods ranging from overnight to one year. As a result, there is no reason to believe that financial contracts with pricing based on LIBOR will be construed, wholesale, to have intended that this new rate replace LIBOR (with whatever effect that may have on pricing). Thus, prudence dictates that financial contracts that utilize LIBOR as a reference rate and have a term extending beyond 2021 (or even earlier, if the lender has a right to reprice in the event LIBOR cannot adequately be determined or if LIBOR fails to cover the lender’s cost of funds) need to be reviewed to identify each party’s rights in the event that LIBOR is no longer available, and to further ascertain if the alternative (if any) provided in those contracts is both workable and will result in pricing reasonably tailored to compensate the financial institution for its risk and provide a reasonable return, and to offer the borrower a market interest rate.

For example, a traditional credit agreement may include boilerplate that if LIBOR is unavailable, the lender has the right to switch to Prime Rate pricing. The problem with that is that the Prime Rate right now is about 5.00% per annum, while one month LIBOR is 2.10% (according to The Wall Street Journal Money Rates). Even with the lower “spread” or margin that usually goes with Prime Rate pricing, a borrower typically would be paying a materially higher interest rate. The Prime Rate alternative to LIBOR was never intended to be a long term solution; it was designed to operate when a temporary disruption of the financial markets prevented the lender from timely obtaining a LIBOR quote in the short term. In addition, if the parties are forced to rely on a

provision of this type for any period of time, there will be a mismatch with the terms of any applicable interest rate swap. That is, interest rate swaps tied to LIBOR may no longer be effective to hedge against the floating rate obligations they were intended to cover.

In recent years, as the potential for financial market disruptions became more evident, the variety of alternative rate provisions included among the boilerplate in credit agreements has grown to include provisions that do not simply state a certain specified alternative interest rate, but instead provide the lender with an often vaguely-stated right to re-price if LIBOR becomes unavailable, e.g., a provision that permits the lender to substitute for LIBOR a rate determined by the lender from “another recognized source or interbank quotation.” In addition, the variations on such alternative rate provisions are nearly limitless. And there is no assurance that the alternative rate provisions in a swap contract match the alternative rate provisions in the covered credit agreement.

Financial institutions are faced with a large and complex transition from LIBOR. Currently, however, there appears to be a degree of complacency among financial institutions about assessing and reducing exposure to LIBOR-based pricing.

Financial institutions need to inventory their LIBOR-based exposure. They should also be reducing the amount of new LIBOR-based contracts undertaken. Financial institutions will need to determine whether SOFR is the best replacement for LIBOR or if another benchmark is more appropriate for each financial product. In light of the dearth of historical SOFR data, updates to risk and pricing models will be complicated and timeconsuming, and may require considerable lead time to implement. Informing and educating customers about the new benchmarks and rates and the reasons for transition will need to be handled thoughtfully.

Addressing the issues attendant to the transition from LIBOR-based interest rate provisions now is the best way to avoid confusion, uncertain pricing, damage to customer relations and other unintended consequences in the near future.

■

*Sources: 1. Gavin Finch and Liam Vaughn, The Man Who Invented the World’s Most Important Number, November 29, 2016, available at www.bloomberg.com/ news/features/2016-11-19/the-man-who-invented-libor-iw3fpmed.

2. Tortoise Investments, Replacing LIBOR: The Countdown Begins, August 16, 2017, Forbes, available at https://www.forbes.com/sites/tortoiseinvest/2017/08/16/ replacing-libor-the-countdown-begins/2/#29d65aabb522.

3. Id. 4. Andrew Bailey, Chief Executive, Financial Conduct Authority, Speech on the Future of LIBOR at Bloomberg London (July 27, 2017), available at www.fca.org. uk/news/speeches/the-future-of-libor.

5. Press Release, Federal Reserve Bank, Federal Reserve Board Announces Final Plans for the Production of Three New Reference Rates Based on Overnight Repurchase Agreement (repo) Transactions Secured by Treasury Securities, available at https://www.federalreserve.gov/newsevents/pressreleases/ bcreg20171208a.htm.

6. https://apps.newyorkfed.org/markets/autorates/sofr 7. Id.

Summer 2018 New Jersey Banker

29

Notes Michael A. Westra

Jessica Doyle

John F. Rath, III

Stephen C. Novak

Catherine Franzoni

ATLANTIC STEWARDSHIP BANK

PEAPACK-GLADSTONE BANK

Atlantic Stewardship Bank announced the election of Michael A. Westra as Chairman of the Board of Directors for Stewardship Financial Corporation and the Bank.

Peapack-Gladstone Bank announced the appointment of Brydget Falk-Drigan as Executive Vice President, Chief Human Resources Officer at Peapack-Gladstone Bank. Falk-Drigan will oversee the Bank’s Human Resources function, building upon its existing strategic plan, success and growth.

BOILING SPRINGS SAVINGS BANK Boiling Springs Savings Bank has appointed James Nesci, formerly head of national sales at TD Bank’s wealth management business, president of the Rutherford-based bank.

FREEDOM BANK Freedom Bank announced the promotion of Jessica Doyle to the position of Senior Vice President of Compliance.

LAKELAND BANK Thomas J. Shara, President and CEO of Lakeland Bank, announced the following appointments.

John F. Rath, III has been promoted to Executive Vice President and Chief Lending Officer and Stephen C. Novak, has been promoted to Executive Vice President, Senior Commercial Real Estate Officer and Group Leader.

LINCOLN 1ST BANK Lincoln 1st Bank has named Erik J. Terpstra its new chief financial officer and vice president.

MANASQUAN BANK Manasquan Bank has promoted Catherine Franzoni to chief operating officer, a new position.

OCEANFIRST BANK OceanFirst Bank announced the appointment of Jeana M. Piscatelli to the role of Senior Vice President and Director of Cash Management. In her new role, Piscatelli will implement overall strategy and manage the day-to-day functions for corporate cash management initiatives at OceanFirst.

30 New Jersey Banker

PROVIDENT BANK Provident Bank has named James Higgins, SVP, relationship manager/team leader in the Commercial Lending Division. He will work out

Brydget Falk-Drigan

James Higgins

of the bank’s Lehigh Valley Regional Office in Bethlehem, Pennsylvania.

SB ONE BANK SB One Bank has promoted Vito Giannola to chief banking officer.

TD BANK TD Bank has promoted Martin Mellili to commercial market president of the bank’s operations in areas including Newark, New Brunswick, Morristown and Elizabeth.

■

Sponsors - NJBankers Board of Directors, members and staff extend their

deep appreciation to the many sponsors and exhibitors for their participation in the Annual Conference. The event would not be as successful as it was without their support! - A special Thank You to Pat Dix, VP Public Relations, SHAZAM, for providing our voice-overs during the Conference.

Platinum Sponsors

Gold Sponsors

Bronze Sponsors - CONTINUED

Bankers Cooperative Group BFS Group BITS Cullen & Dykman EverFi FHLBNY Lakeland Bank P&G Associates GRC Solutions NJBankers Business Services RSK Compliance Solutions Peapack-Gladstone Bank Strategic Resource Management Wolf & Company

Kearny Bank RSM Two River Community Bank

Day Pitney Diebold Heartland, a Global Payments Company Helms Briscoe The Invictus Group® Kilpatrick Townsend & Stockton Luse Gorman McCarter & English PNC Bank Riker Danzig Scherer Hyland & Perretti S.R. Snodgrass Stevens & Lee TD Bank

Diamond Sponsors Baker Tilly BDO Crowe Manasquan Bank Mosteller Associates Valley National Bank

Silver Sponsors Arnold & Porter Kaye Scholer Boenning & Scattergood CenterState Bank COCC Columbia Bank ICBA Securities Investors Bank The Kafafian Group Keefe, Bruyette & Woods, A Stifel Company Locke Lord OceanFirst Bank Rizco Sandler O’Neill + Partners

Patron Sponsors Bogota Savings Bank Martino+Marley

Bronze Sponsors Atlantic Community Bankers Bank

Summer 2018

Shots

Peapack-Gladstone Bank announced their donation of $1,400 to Teams for Kids Foundation, Inc. made on behalf of its employees, clients and friends. (left to right) Kate Sant’Angelo, Peapack-Gladstone Bank Retail Private Banker and Andrew Bauer, Teams for Kids Foundation

Boiling Springs Savings Bank donated $10,000 to Chilton Medical Center’s Pediatric Clinic. The contribution further supports the bank’s longstanding mission to enhance the quality of life in the communities it serves.

Spencer Savings Bank has raised over $100,000 for Special Olympics New Jersey, with its 7th year New York Football Giants Snowbowl participation. Special Olympics is celebrating its 50th Anniversary this year, and Spencer was proud to mark their participation in this fundraiser which supports sports competition and training for over 25,000 Special Olympics New Jersey athletes.

Lakeland Bank announced that Mary Ann Deacon, Chairman of Lakeland Bank, has been named one of the Girl Scouts of Northern New Jersey’s 2018 Women of Achievement honorees. The award program was held at the Westmount Country Club in Woodland Park to honor five individuals from the local community who exemplify the values of Girl Scouting.

NVE Bank Branch Managers from the bank’s 11 branches helped Bergen County elementary school students celebrate Financial Literacy Month by teaching savings classes. The classes, aimed at giving kids the opportunity to start learning financial basics in a fun and interactive way, was done in partnership with the American Bankers Association Education Foundation’s Annual Teach Children to Save Program.

Throughout the month, NVE bankers taught over 500 students, awarding each “graduate” participation certificates and NVE piggy banks at the end of class.

Glen Rock Savings Bank, which has served the personal and commercial banking needs of northern New Jersey customers since 1922, celebrated a grand re-opening of its location at 474 Prospect Avenue in West Orange with a host of festivities. Held to showcase a recent refresh of the branch’s interior, the event drew a large crowd of area residents and business leaders.

More than 50 Provident Bank team members participated in the Big Brothers Big Sisters of Monmouth and Middlesex Counties’ Bowl for Kids’ Sake, at Brunswick Zone in Hazlet, N.J. Provident Bank employees raised more than $11,700 which will help provide children facing adversity with strong and enduring, professionally supported 1-to-1 relationships that change their lives for the better.

Roselle Savings Bank made a $1,000 donation to The Arc of Hunterdon County.

The Bank is committed to offering financial support to organizations that provide services to underserved individuals and families. The donation supports The Arc of Hunterdon County’s services, programs and advocacy for people with intellectual and developmental disabilities.

Roselle Savings Bank announced a 7-week savings challenge prodding students to start saving money from a young age. Branch managers have been working with area schools to arrange group welcome visits to the bank – along with parents or guardians – for money-saving tutorials and to open Student Savings Accounts. To increase participation, Roselle Savings Bank is sweetening the deal by rewarding the student that deposits the most money during the seven-week period with a $25 gift card to Rita’s Italian Ice. Students can open an account with as little as $1.00 and will earn interest on their savings.

Summer 2018 New Jersey Banker

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Sandler O’Neill + Partners, L.P.

ynovus Financial Corp. • Comerica • Independent Bank Group • Opus Bank • First Interstate BancSystem • Cap

ederal Financial • FVCBankcorp • State Bank Financial Corporation • Bridgewater Bancshares • TriState Capital Hold

Carolina Trust BancShares • MB Financial • German American Bancorp • Cadence Bancorporation • The Bank of N

C E L E B R A T I N G

utterfield & Son Ltd. • City National Bank of Florida • First Busey Corporation • Mid Penn Bancorp • Luther Burbank Co

Peapack-Gladstone Financial Corporation • United Community Banks • Union Bankshares Corporation • First Mu

olding Co. • NexBank Capital • First Community Holdings • Merchants Bancorp • Meridian Bank • Sterling Bancorp I

lifton Bancorp Inc. • PacWest Bancorp • TowneBank • Sun Bancorp • FirstMerit Corporation • Astoria Financial Corpora

nvestar Holding Corporation • PCSB Financial Corporation • Home BancShares • Capital Bank Financial Corp. • Renas

orporation • First Merchants Corporation • Banner Corporation • Berkshire Hills Bancorp • Old National Bancor

agle Bancorp • LegacyTexas Financial Group • Heritage Commerce Corp • Huntington Bancshares • Chemical Finan

orporation • Trustmark Corporation • United Bankshares • Webster Financial Corporation • First Bank • WSFS Finan

YEARS

orporation • Bridge Bancorp • Banc of California • First Commonwealth Financial Corporation • CVB Financial Cor

ark National Corporation • Pinnacle Financial Partners • Live Oak Bancshares • Flagstar Bancorp • OceanFirst Financial Co

First National of Nebraska • Wintrust Financial Corporation • International Bancshares Corporation • Triumph Banco

outhside Bancshares • MidFirst Bank • Bank of the Ozarks • Simmons First National Corporation • Seacoast Bank

orporation • First Citizens BancShares • FCB Financial Holdings • Central Pacific Financial Corp. • Preferred Ban

BB Bancorp • Western Alliance Bancorporation • First Foundation • Meta Financial Group • CapStar Financial Hold

Thank you to all our clients on our 30th Anniversary.

Atlantic Capital Bancshares • Ameris Bancorp • MidSouth Bancorp • First Midwest Bancorp • Beneficial Bancor

ime Community Bancshares • Bank Leumi • Northfield Bancorp • First Bancorp • First Financial Bancorp • Midland Sta

ancorp • Valley National Bancorp • Fulton Financial Corporation • United Community Financial Corp. • Waterstone Financ

ew York Community Bancorp • F.N.B. Corporation • Investors Bancorp • TFS Financial Corp • Provident Financial Serv