Fall 2014 GA Communities First magazine by Community Bankers Association of Georgia

FALL 2014

INSIDE

• Meet the 2014-2015 Board of Directors • CBA Endorsed Member Spotlight: Harland Clarke • Highlights from the 46th Annual Meeting & Trade Show

Official Publication of the Community Bankers Association of Georgia

• Celebrating a Lifetime of Service

Member: Member:

SLC

Stokes Lazarus & Carmichael LLP A T T O R N E Y S

A T

L A W

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Stokes Lazarus & Carmichael LLP A T T O R N E Y S A T L A W

Our firm has provided legal services for the banking community in the areas of credit and collections litigation, fraudulent transfer litigation, bankruptcy representation, and bank loan workouts since our inception in 1972. We pride ourselves on “Real World Legal Solutions®.” We welcome the opportunity to discuss how we can help you optimize recoveries.

Stokes Lazarus & Carmichael LLP 80 Peachtree Park Drive, NE Atlanta, Georgia 30309 Tel. 404-352-1465

THE POWER OF LEGAL KNOWLEDGE® Visit us online at www.slclaw.com

GEORGIA

Communities FAL L 2 01 4

FIRST INSIDE

CBA STAFF Rob Braswell President & CEO rob@cbaofga.com Steve Bridges Executive Director of Legislative & Regulatory Affairs steve@cbaofga.com

Happy New (CBA) Year!

Finer Points: Resilient & Strong

General Counsel Corner: Healthcare Lending: An Opportunity for Community Banks

CBA of Georgia Welcomes New Associate Members

Lindsay Greene Vice President Marketing & Member Services lindsay@cbaofga.com

Celebrating a Lifetime of Service - CBA Recognizes 2014 Recipients

Shera Banks Marketing Coordinator shera@cbaofga.com

Peake Wilson Vice President Corporate Events & Leadership Division CBA Corporate Secretary peake@cbaofga.com

Steven Rigdon Director of Legislative & Regulatory Affairs steven@cbaofga.com

CBA Announces the Endorsement of BASYS Processing and Steven Rigdon Joins CBA Team! CBA Teams with Midwestern Securities Trading Company and Pentegra to Offer a 401(k) Multiple Employer Plan for Member Banks

Bank Secrecy Act (BSA) Training Opportunities

Guest Article: Accounting for the Alternative Minimum Tax (AMT)

Donna Coutant Education Coordinator donna@cbaofga.com

Guest Article: When the Minimum is Not Enough

Amanda Lee Education Associate amanda@cbaofga.com

Guest Article: Trends in Debit Rewards Programs Focus in Value Creation

Jodi Swilley Director of Education & Professional Development jodi@cbaofga.com

Tammy Maass CFO tammy@cbaofga.com Nick Wilborn Accounting/IT Coordinator nick@cbaofga.com

page 10 | CBA Endorsed Member Company Spotlight: Harland Clarke

4th Annual Southeast Financial Workplace Law & Compliance Conference

page 6-7 | CBA of Georgia Elects 2014-2015 Board of Directors

s, ight

Banking, Ac

on!

Teresa Day Administrative & Corporate Events Assistant teresa@cbaofga.com

FEATURES

46th Annual

NG & TRADE SHOW M EE T I

page 14-17 | Highlights from the Annual Meeting & Trade Show

S ta y co n n ecte d Scan with your smartphone to view our website.

Community Bankers Association of Georgia 1900 The Exchange, Suite 600, Atlanta, GA 30339 (770) 541-4490 or (800) 648-8215 • Fax (770) 541-4496 www.cbaofga.com • cba@cbaofga.com

page 21-22 | CBA Announces New Endorsements

F a ll 2 0 1 4 | Ge o r g i a C o m m u n i t i es Fi r s t | 1

FROM THE PRESIDENT'S DESK

Happy New (CBA) Year!

Rob Braswell President & CEO Community Bankers Association of Georgia

As you may know, October 1st always begins a new fiscal year for the CBA of GA. I thought I would take this opportunity to take a quick look back at the past year before letting you know of some of the programs planned for the upcoming year. I would be remiss if I didn’t first thank 2013 – 2014 Chairman Charlie Curry and our board and committee members for their dedicated service and guidance over the past 12 months. This was a terrific group with which to work, always supportive of new ideas and fresh approaches, and consistently focused on our mission to enhance community banking in Georgia. I thank this group and all of our members for a tremendously successful year. During the past year, a renewed emphasis was placed on enhancing value to our banks, bankers, and Associate Members. Here are just a few of the initiatives introduced these past 12 months: •

Developed a new CBA logo and tagline - “We are community banking.” to reflect that we are a growing, dynamic association with a dedicated mission to serve community banking in all facets.

•

Had the largest contingent of bankers in CBA history attend the ICBA Washington Policy Summit in May as we met with 14 members or staffs of Georgia’s congressional delegation.

•

Re-established the CBA Legal Hotline via a partnership with James-Bates-Brannan-Groover-LLC. The CBA Legal Hotline # is 404-844-2765.

•

Revised the format and location of the Banker Regulatory Forums – now two of the four interactive, quarterly meetings are held in Macon to enable more Middle and South Georgia bankers to attend.

•

Partnered with the Barret School of Banking – It’s a top-notch graduate banking school focused solely on community banks. The school is one week per year for three years (as opposed to the traditional two weeks per year) at one-third the cost due to tuition subsidies provided by the Paul W. Barret, Jr. Trust Fund.

•

Conducted our first Women in Banking Seminar in recognition of the powerful influence and potential of women in the banking profession. This seminar received outstanding reviews and will be held annually.

•

Introduced our first, and very successful, Sporting Clay event as a PAC fundraiser.

•

Revised the Spring Regional Luncheon Meetings to include more content and be quicker paced. Attendance was outstanding!

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•

Installed new initiatives at our Leadership Division Conference and the Annual Meeting & Trade Show that will become staples due to their success – these included having entertainment at Saturday night banquets, a 5k and Fun Run with CBA T-shirts, two 7-minute spotlights in which bankers and/or bank directors won $1,000 in cash on the spot, and exhibition drawings in which bankers became eligible for two $500 drawings and three $100 drawings.

•

Designated six service providers as Endorsed Member Companies covering mortgage services, insurance review, peer analysis, investment brokerage, merchant processing, and a multiple employer 401(k) plan.

I’m also looking forward to setting this year’s agenda with Chairman Dale Morris, President & CEO of First National Bank of Coffee County, and the 2014 – 2015 board and committee members at our upcoming planning session; however, here are several new initiatives that have just recently kicked off, or will kick off very shortly: •

Made available a Salary Survey of the 15 most prevalent positions in community banks – Conducted by Nichols Cauley in partnership with CBA of GA – free to participants/$250 for non-participants/$350 for nonmembers.

•

Started the rollout of a Multiple Employer 401(k) Plan (MEP) called CBA Easy(k). In our MEP partnership with Pentegra and Midwestern Securities Trading Co., your fiduciary risk is reduced, administration requirements are lessened, a larger pool of investments become available, and potential cost savings may be realized.

•

Welcomed Steven Rigdon, a 17-year community banker from Metter, on board October 1st to assist in making bank visits and lobbying on state and federal levels. Steven will be a great addition to the CBA team!

•

Anticipate a new CBA of GA website by December 1st for easier online registration for events and classes, enhancing our Career Center, and better messaging and ease of navigation.

As you can see, it’s already shaping up to be another active and exciting new year! I hope to see you soon – and as always, please let us know how we can be of service to you. Best regards and Happy “New” Year!

FINER

POINTS

Resilient & Strong The latest official industry numbers are in. The good news is the entire banking industry, now more than six years after the Wall Street financial meltdown, continues its steady return toward a full and stable normalcy. Lending balances are rising. Margins are strengthening. Profits are growing. The even better and too-often overlooked news, however, is how the nation’s community banks are standing up to and even standing above the largest financial players. When it comes to lending in particular, community banks, against considerable economic headwinds, are outperforming their Wall Street megabank counterparts. Two key snapshots from the FDIC’s second-quarter financial performance report on federally insured institutions illustrate the point: • By a wide margin, community banks are the industry’s top-producing lenders. Loan balances at community banks rose 7.6 percent over the past 12 months, shoulders above the 4.9 percent industrywide average that includes the megabanks. And while community banks hold less than 20 percent of industry assets overall, community banks provide nearly half of all smallbusiness loans.

Cam Fine President & CEO Independent Community Bankers of America

What does this mean? Certainly, these industry performance measures, though reflecting positive trends, are snapshots amid a still delicate economic recovery. Real challenges lie ahead, including how future rising interest rates are properly anticipated and managed. And there are always dangers beyond Main Street, particularly the misbehavior of too-big-to-fail Wall Street firms that ICBA is working to downsize. Yet the bigger picture shouldn’t be overlooked: That is, the fundamental relationship-based business model of community banks—which includes efficiently putting local deposits to work through prudent local lending—remains remarkably resilient as well as essential to the financial health of Main Street and the nation’s economy. Although currently overburdened by excessive regulation and unfairly besieged by rivals with governmentsupported market advantages, community banks, if allowed a fair and level playing field, can and will successfully compete against any other financial institution or model anywhere and anytime. Committed and strong, community banks are here to stay. We have the hard numbers to show it.

This pace-setting industry performance, reflecting the fastest rise in loan balances since 2007, is even more impressive considering that community banks compete against extraordinarily aggressive rivals—from giant credit unions to Farm Credit System institutions to too-big-to-fail megabanks—operating with significant government-subsidized funding and tax advantages. Nevertheless, quarter after quarter, community banks consistently demonstrate their lending prowess that is so essential to Main Street. •

Community banks earnings are strong. Community banks posted $4.9 billion in earnings during the second quarter, up 3.5 percent from a year ago. Overall industry earnings, marked by the industry’s second-highest ever quarterly income posting, but skewed by volatile revenue streams from investment banking shops at the megabanks, rose 5.3 percent. Impressively, community banks are booking the most loans while maintaining the industry’s highest net interest margins, standing at 3.59 percent for community banks and at 2.76 percent for the largest banks. Significantly, community banks with $1 billion or less in assets collectively posted a 1.00 percent return on assets, only four basis points lower than the largest banks managing global operations and risks. F a ll 2 0 1 4 | Ge o r g i a C o m m u n i t i es Fi r s t | 3

Corner GENERAL COUNSEL

legal news and updates for cba members Have a topic you would like to see covered in “General Counsel Corner?” Email us at generalcounselcorner @ jamesbatesllp.com

cbahotline

@ jamesbatesllp.com

FALL 2014

Healthcare Lending:

An Opportunity for Community Banks by T. Daniel Brannan and Paul J. Quiner As we recently explained in CBA Today, healthcare lending represents a significant opportunity for community banks. America’s healthcare industry has grown tremendously and will continue to do so. With this growth, the borrowing needs of healthcare companies are expected to increase. Large banks and specialty lenders have been known to cater to this market, but increases in demand for healthcare capital should create opportunities for community banks to finance local projects. As community bankers know, locally financed projects often include assisted living facilities, nursing homes, outpatient surgery centers and individual physician practices. Lending on these projects can be a significant revenue source for community banks; however, these types of projects present unique underwriting, collection and portfolio management risks. Risks associated with healthcare lending may arise in different ways for different types of healthcare enterprises. Several commonly encountered risks lenders should consider are: n Whether the borrower has been excluded from billing Medicare or Medicaid, the dominant payors in this industry; n Whether the borrower has entered into a Corporate Integrity Agreement with the federal or state government, which may restrict the borrower’s business; n Whether the borrower’s leases, agreements and other contracts are in compliance with healthcare laws governing kickbacks and self-referrals; n Whether “Business Associate Agreements” and other patient privacy protections have been implemented in accordance with federal and state law;

n Whether the lender understands Medicare’s nuanced banking account requirements, such as that a bank must waive its right of offset against any Medicare deposit account; n Whether the borrower’s revenue projections are realistic in light of reduced reimbursement rates and trends; n Whether there is any threatened or pending False Claims Act litigation or audits against the borrower; and n Whether, in the event of a loan default, the borrower’s Certificates of Need, Medicare/Medicaid certifications or healthcare licenses are (i) jeopardized, or (ii) transferable or assumable by the lender.

With careful analysis these issues can be understood and addressed at the outset of the underwriting process. But if they are not, these issues may surface as the loan seasons, with the undesirable consequences of (i) increasing the likelihood of default, or (ii) drastically diminishing the value of the community bank’s collateral in the foreclosure or collections phase. T. Daniel Brannan partner

(404) 997-6023

dbrannan@jamesbatesllp.com

It is very important to understand that not all the questions posed above can or should be addressed by due diligence. Matters that customarily would be subject to due diligence include (i) the borrower’s government payor exclusion status, and (ii) requisite regulatory compliance. Those matters directly impact the borrower’s ability to repay the loan and the lender’s collateral. By contrast, other issues may be addressed by appropriate covenants, representations and warranties in the loan documents (e.g., covenants, representations and warranties that the borrower’s contracts and agreements are in compliance with applicable healthcare laws). Beyond the underwriting phase, there are practical considerations to be dealt with in servicing a healthcare loan. For example, the government has very specific requirements that govern whether a borrower may execute a sweep agreement in favor of a financial institution. The borrower’s instructions to the lender must be carefully crafted in order to comply with certain Medicare anti-assignment prohibitions.

Paul J. Quiner

partner

(404) 844-2770

pquiner@jamesbatesllp.com

Regardless of nuances in healthcare lending, these types of loans present opportunities for community banks. As demand for healthcare capital grows, community banks can take advantage of these opportunities if they have the ability to evaluate the corresponding risks. n

PRESENTED BY GEORGIA’S LAW FIRM: OFFICES Corner,” a recurring column featuring legal news and information of interest to CBA 4 | w w w .cbaof ga. com | “General Sum mCounsel er 201 3 MACON + ATLANTA

members, is brought to you by James-Bates-Brannan-Groover-LLP. Visit us at www.georgiaslawfirm.com

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Community Bankers Association of Georgia Elects 2014-2015 Board of Directors Dale Morris, President & CEO, First National Bank of Coffee County, Douglas, was installed as the 2014-2015 Chairman of the Community Bankers Association of Georgia (CBA) during the 46th Annual Meeting & Trade Show, held September 17-21, 2014 at The Ritz-Carlton, Amelia Island, FL. His term began October 1, 2014. The CBA is a non-profit organization dedicated to serving community banks throughout Georgia for over 40 years to enhance their profitability and growth. Founded in 1969 by a group of Georgia community bankers, the CBA is the state's only advocate working solely for the interests of community banks and their customers. The CBA was formed to protect the political interests of locally-owned community banks and today represents nearly 200 community banks and 200 associate member companies. The Association offers services in four distinct areas, which include political affairs, education, products & services and networking. Board members are selected from ten divisions across the state of Georgia, ensuring all Georgia community banks are equally represented. Board members are elected to a one-year term which begins October 1st of each year. During the course of the year, Directors will be involved in a number of items on behalf of the CBA membership, such as responding to proposed rules and regulations from the various regulatory agencies, reviewing numerous products & services which will benefit the

Connect with CBA

community banking industry as well as consumers, and weighing in on proposed legislation. “Our Association continues to thrive due to the efforts and guidance provided by the community bank leaders that comprise our Board,” commented Rob Braswell, President & CEO of the Community Bankers Association of Georgia. “The varied experience each Board Member brings to the table is an invaluable asset to our Association and serves to strengthen the community banking industry in Georgia.” For more information, contact CBA at (770) 541- 4490/ (800) 648-8215 or visit www.cbaofga.com.

Is there anyone so wise as to learn by the experience of others?”

Employing electronic banking services is increasingly required for community banks to succeed in today’s environment. Comprehensive IT examinations are even more critical given the risks associated with these services. Choose CRI, where our IT services experience is your checkmate.

125+ financial institution clients, Assets totaling up to $40+ billion, Performing IT FFEIC examination and penetration testing for 1 out of 3 financial institution clients.

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– Voltaire

banks@CRIcpa.com CRIcpa.com | blog.CRIcpa.com

Welcome 2014-2015 Board of Directors! Chairman

Chairman-Elect/Committee Chair: Nominating & Political Affairs

Dale Morris First National Bank of Coffee County, Douglas

Ed Cooney Affinity Bank Atlanta

Vice Chair/Committee Chair: Audit

Lisa Lane State Bank & Trust Company, Macon

Treasurer/ Committee Chair: Member Services

At Large

Brad Serff Providence Bank Alpharetta

Dan Oliver Vinings Bank Smyrna

Immediate Past Chairman

Charlie Curry First State Bank of Randolph County, Cuthbert

Division 1 Chair

Division 2 Chair

Division 3 Chair

Division 4 Chair

Division 5 Chair

Division 6 Chair

Al Ross Peoples Bank Lyons

Charles Rooks Family Bank Pelham

Derek Williams Columbus Community Bank

George Lazenby Newton Federal Bank Covington

Elliott Miller Georgia Banking Company, Atlanta

Henry Pope Exchange Bank Milledgeville

Division 7 Chair

Division 8 Chair

David Caswell Century Bank of Georgia Cartersville

Tim Jones Citizens Community Bank Valdosta

Member at Large

Len Dorminey HeritageBank of the South, Albany

Member at Large

Mike Henry State Bank of Georgia Fayetteville

Division 9 Chair

Drew Walker Community & Southern Bank, Cumming Member at Large

Rusty Powell Highland Commercial Bank, Marietta

Division 10 Chair

Amrey Harden Oconee State Bank Watkinsville

Rob Braswell CBA of Georgia Atlanta

Paul Bennett Alma Exchange Bank Alma

Charles Buckner Foothills Community Bank Dawsonville

Member at Large

Ron Quinn Peach State Bank & Trust, Gainesville

Eddie Selph The Merchants & Citizens Bank, McRae

Scott Tomlinson Flint Community Bank Albany

Committee Chair: Membership & Banker Regulatory Forum

Member at Large

Ex- Officio (ICBA)

Clark Hungerford Vinings Bank Smyrna

Honorary Member

Pat Blanchard First Bank of Georgia Augusta

When your instant

issue card solution is so easy and affordable, it’s not luck. It’s Harland Clarke. harlandclarke.com/CardAtOnce

Instant card issuance is a no-brainer. Your account holders are asking for it, and you want to offer it to them. Now you can issue fully functioning, personalized cards onsite in about a minute — affordably — with Card@Once from Harland Clarke. Because the service is web-based, there’s no software or dedicated server to buy, and no technology management necessary on your end. All you need is an internet connection. Just plug in the printer and you’re ready to go. When it comes to a one-source, low-cost solution for instant issue, it takes more than luck. It takes Harland Clarke.

Harland Clarke Payment Solutions. Leave nothing to chance.

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Marketing Services - Security Solutions - Payment Solutions 1.800.277.7637 Card@Once (patent pending) is a registered trademark of EFT Source, Inc.

401(k) DISCLOSURES

Are you ready to Make it Easy?

Join the CBA Easy(k) Make it Easy Plan

he CBA Easy(k) 401(k) Multiple Employer Plan is a unique program only available to CBA member banks that provides a highly competitive retirement plan for your employees with many advantages for your bank, including: n Outsourcing many of your fiduciary responsibilities & liability n Potential cost savings to your bank n Elimination of 5500 filings n Elimination of plan audit (for larger plans) n Oversight Committee made up of your CBA bank peers

Call Nathan White at 800-732-8601 or email nwhite@midwesternsecurities.com

Make Plans to Attend the 4th Quarter Banker Regulatory Forum The CBA invites you to make plans now to attend the 4th quarter Banker Regulatory Forum and luncheon to be held on Thursday, November 6, 2014, at the Julian Hester Training Center (JHTC), CBA Headquarters in Atlanta. The goal of this forum is to establish a dialogue with the state and federal regulatory agencies in furtherance of the following objectives: • • • •

obtain timely, useful information from the regulatory agencies regarding their policies, procedures, techniques, and objectives; communicate information obtained from the regulatory agencies to the CBA members through timely publications; serve as a clearing house for the CBA member bank concerns, receiving information from members regarding regulatory and agency problems and issues; and, assist in the development of the CBA positions on pending, as well as existing regulations, interpretations, and rules.

To learn more about the program or to register, please contact www.midwesternsecurities.com Securities are: not insured by the FDIC; not a deposit or other obligation of, or guaranteed by, the depository institution; subject to investment risks, including possible loss of the principal amount invested. Securities, Insurance, and Investment Advisory Services are offered through Midwestern Securities Trading Company, LLC. Member FINRA/SIPC. MSTC and CBA are not affiliated.

Proudly sponsored by

In this issue, CBA is pleased to feature Ryan Busenitz, Account Executive, Community Markets Division, Harland Clarke. Harland Clarke has been endorsed by CBA for over 25 years. We invited Ryan to participate in a Q & A so you can learn more about this longtime Endorsed Member Company and a little more about Ryan.

Tell us about Harland Clarke and your role with the company:

arland Clarke is the industry leader in providing checks to over 10,000 financial institutions. As print and check usage has declined over the years, Harland Clarke has continued to diversify its product suite in solutions such as Marketing Solutions (both print and digital), Instant Issue ATM/Debit card solutions and Survey Solutions. I started with Harland Clarke in 2004 working in their Finance Department. After seven years of working with budgets, forecasts and accounting for our Sales & Marketing group, I transitioned into a sales executive role within our Community Bank Market division covering the northeastern half of Georgia as well as the western half of South Carolina. In this role, I sell both new solutions to my clients/prospects as well as help manage the current check programs that my clients have.

HOW DO YOU HELP GEORGIA'S COMMUNITY BANKS?

esides helping them with their check programs and ensuring that their check operations are running smoothly, I work to give industry insight to those that I meet with. Obviously, I want to sell new solutions to these clients, but more importantly, I want them to stay abreast of what is going on in the marketplace and help them be their account holder's primary financial institution. Working with clients that range from roughly $300M to $8B in assets gives me a unique perspective that can benefit my clients.

WHAT'S NEW? ANY HOT PRODUCTS? CBA Annual Meeting - Ryan, center, chats with Brad Serff, Providence Bank, Alpharetta and Lisa Lane, State Bank & Trust Company, Macon

he hottest product in our market today is our Card@Once Instant Issue ATM/Debit card solution. For the cost and ease of implementation, it is by far the best instant issue solution in the marketplace. Also, our company's recent acquisition of Valassis has allowed us to provide personalized acquisition mail marketing campaigns at pricing that is 25-35% less than what the competition is charging.

INTERESTING FACT ABOUT YOU:

hold a BS in Accounting, Management & Finance from The Master's College; because of my finance/accounting background, I'm a licensed CPA-not something that is very common for sales folks.

WHAT DO YOU DO OUTSIDE OF WORK:

enjoy spending time with my family. My wife Katie loves to do interior decorating/design and is currently working on launching her own DIY website (therusticboxwood.com). My daughter Mackenzie, 9 loves dance (ballet, jazz & tap) and stays busy between that and school. My son Jimmy, 7, plays little league baseball and I help coach his team. I also currently play tennis in a local USTA league and enjoy playing golf and bow-hunting when I get the chance.

Let’s Talk Turkey – An unfortunate ending for a turkey – just in time for Thanksgiving! 1 0 | w w w . cbaof ga. com |F a l l 2 0 1 4

Family time - The Busenitz gang – (l-r) Katie, Jimmy, Mackenzie and Ryan Busenitz.

ServisFirst Correspondent Banking Our name is our mission statement.

OUR NAME IS OUR MISSION COATED 78c 58m

Rodney E. Rushing Executive Vice President 205.423.2717 rrushing@servisfirstbank.com

Henry Abbott Senior Vice President 205.423.2797 habbott@servisfirstbank.com

Bill Dacko Senior Vice President- FL 407.496.7669 bdacko@servisfirstbank.com

Karen Grahn Vice President Manager, Credit Card Division 205.949.0330 kgrahn@servisfirstbank.com

J. David Jordan Vice President 205.423.2719 djordan@servisfirstbank.com

Rik Lane Senior Vice President - GA, SC 478.733.0756 rlane@servisfirstbank.com

Steve Shelton Senior Vice President - TN, AR 901.634.1608 sshelton@servisfirstbank.com

Bill Street Senior Vice President - AL, MS, LA 205.423.2718 wstreet@servisfirstbank.com

205.949.0302 www.ser Member FDIC Equal Housing Lender

www.servisfirstbank.com | Member FDIC | Equal Housing Lender

F a ll 2 0 1 4 | Ge o r g i a C o m m u n i t i es Fi r s t | 11

CBA of Georgia Welcomes New Associate Members The Community Bankers Association of Georgia (CBA) would like to welcome new Associate Members who were recently approved at the Board of Directors Meeting at the Annual Meeting & Trade Show. Throughout the year, the CBA Board of Directors approves quality vendors who provide products and services to CBA members. For more information on becoming an associate member, contact Lindsay Greene at lindsay@cbaofga.com. CBIS - Community Bank Insurance Solutions Insurance Services - Stan Flynt, Greensboro, GA Drew Eckl & Farnham, LLP Legal Firms - Gary Beelen, Atlanta, GA MST Loan Loss Software - Dalton Sirmans, Cornelia, GA

CBA Day at the Capitol Wednesday, February 11, 2015

STANLEY Security Solutions Comprehensive Security Systems - Sharla Hardin, Tucker, GA U.S.D.A (United States Department of Agriculture, Rural Development, Business and Cooperative Programs) Financial Services - Karen Davis, Athens, GA

Financial solutions. Focused on you. More than 100 banks in the Southeast, large and small, depend on Elliott Davis for personal attention, industry experience and services, including external and internal audit, SEC reporting, taxation and compliance. Our financial services practice is 90 professionals strong, with a 60-year reputation for helping banks operate stronger, wiser, better.

Attention Bankers and Associate Members: We want YOU there!

Discover how our 360° service can be an asset to your business.

NEW FORMAT! Don’t miss the opportunity to: • Network with your colleagues • Discuss key upcoming legislation • Meet with your legislators

Contact Peake Wilson at peake@cbaofga.com for more details. Jason Caskey, CPA Financial Services Practice Leader

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Georgia | North Carolina | South Carolina |

Virginia | elliottdavis.com

Foresight is 20/20.

HIGHLIGHTS:

If you want to know whatâ&#x20AC;&#x2122;s next in financial services technology, look to the leader in digital banking, payments, account processing and more. fiserv.com/next

F a ll 2 0 1 4 | Ge o r g i a C o m m u n i t i es Fi r s t | 13 ÂŠ 2014 Fiserv, Inc. or its affiliates.

46 th Annual meeting & trade show a raving success September 17-21 |The Ritz-Carlton, Amelia Island, FL

CBA’s 46th Annual Meeting & Trade Show, held September 17-21 at The Ritz-Carlton, Amelia Island was the place to be! From phenomenal speakers to fantastic networking opportunities, the Annual Meeting had it all! The convention, hosted by 2013-2014 CBA Chairman Charlie Curry, President & CEO, First State Bank of Randolph County, Cuthbert, kicked off Thursday night with a Dine-Around in the Exhibit Hall. Bankers and attendees visited with 42 top financial services providers while dining from a variety of food stations. The Exhibit Hall was alive with activity ranging from the Annual Silent Auction to a “Fling the Ring” Wine Bottle Ring Toss to a photo booth. Keeping with the Hollywood theme, bankers had a chance to learn about the exhibitors and win big money by playing “Oscar Trivia.”

Peter Stathopoulos and Todd Hennings, Macey, Wilensky & Hennings, LLC, Atlanta, who specialize in the entertainment industry, present how Georgia law provides for a tax credit for film, television, commercial, and digital interactive entertainment productions created in the state. The Banker/Regulator Point-Counterpoint Panel, moderated by Mark Kanaly, Alston & Bird, LLP, Atlanta was a big hit with attendees. The panel included Michael Dean, Acting Regional Director, FDIC, Atlanta, and Oscar Harvey, Associate Deputy Comptroller, OCC, Dallas, TX, as well Ed Cooney, President/CEO, Affinity Bank, Atlanta, and Derek Williams, President/CEO, Columbus Community Bank.

Next, Steve Sievert, Executive Vice President of Marketing & Communications, PULSE, presented a The General Session opened with the Color Guard and “7-Minute Spotlight.” New this year, the spotlight gave the National Anthem sung by Lillie and Curry Hoats, a financial services provider seven minutes to present Charlie Curry’s 14-year old granddaughters. The All- to the group. At the end of the presentation, a drawing Star Cast for Friday started with a panel discussion on "The was held for $1,000 cash. Congratulations to Travis Business of Georgia Film Tax Credit Finance.” Attendees Cook, The Merchants & Citizens Bank, McRae who was heard from Hollywood producer James Brooke, Friday's winner! All3Media, Los Angeles, CA and Georgia attorneys,

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Friday morning’s session concluded with a dynamic presentation from columnist, author and small business owner Gene Marks, who presented "Now at the Box Office - Opportunities & Growth." Clark Hungerford, Vinings Bank, was the winner of the $300 daily cash prize sponsored by TIB. Saturday morning’s General Session began with CBA officer nominations conducted by Ed Cooney, President & CEO, Affinity Bank, Atlanta. The 2014-2015 slate of officers was unanimously approved. John Buhrmaster, chairman of the Independent Community Bankers of America (ICBA) and president of 1st National Bank of Scotia, N.Y., provided the ICBA report and presented a check to CBA. Jaime Dominguez, Director of Strategy for Retail Banking, Fiserv, Chicago, IL, provided an interesting presentation in his "Coming Attractions - Beyond Branch Banking to Experience Banking: Evolving Your Branch." Trish Springfield, Retail Banking Executive, The Palmetto Bank, Greenville, SC got the crowd energized with her presentation "Now Available in 3D: Revenue Thriller Despite Economic Chiller.” The Saturday “7-Minute Spotlight” was hosted by Jim Reber, President & CEO, ICBA Securities, Memphis, TN. Following an informative presentation, Jim held the drawing for $1,000 cash which went to Lee Northcutt, Colony Bank, Fitzgerald. Known as “Mr. Doubletalk,” entertainer, humorist and comic speaker Durwood Fincher brought down the house with his hilarious presentation. Special thanks to the eight bankers who participated in the on-camera “survey” – your responses were priceless and stole the show!

"...very thoughtprovoking, good content and great takeways!" - Tim Jones President, Citizens Community Bank Valdosta

F a ll 2 0 1 4 | Ge o r g i a C o m m u n i t i es Fi r s t | 15

Saturday morning’s session ended with a drawing for the $300 daily cash prize sponsored by Warren Averett, LLC. Derek Williams, Columbus Community Bank was the winner. The star-studded Chairman’s Reception & Banquet entitled “A Night of Stars,” began with the Hollywood Walk of Fame, a star-lined, red-carpet entrance where guests were greeted with a photo underneath the flashing marquee. Reception attendees socialized while listening to the silky voice of Corbin Hoats, grandson of Charlie Curry, croon the hits of Hollywood’s golden years. The banquet included sponsor appreciation, recognition of PAC/PR contributors, presentation of the Lifetime Service Awards and a farewell address from Charlie Curry. Rob Braswell, President & CEO of CBA presented Charlie with a plaque and gift recognizing him for a tremendously successful year under his leadership. The evening concluded with entertainment from Jon Wee and Owen Morse from “The Passing Zone,” one of the most accomplished comedy duos in the nation. A finalist on “America’s Got Talent,” The Passing Zone wowed the audience with a hilarious, energetic, and amazing juggling and comedy routine. Special thanks to Charlie Curry and sponsor Pat Frawley, Community & Southern Bank, for their brave hearts and great attitudes when called on stage! The convention would not have been possible without the support of the sponsors and exhibitors. A special thank you to the many companies who supported this year’s Annual Meeting & Trade Show!

1 6 | w w w . cbaof ga. com |F a l l 2 0 1 4

Platinum Elite

Thank You, Sponsors Platinum

Bronze

Silver

Individual Event Sponsors JB Board Appreciation Dinner

SLC

Board Appreciation Reception

7-Minute Spotlight 7-Minute Spotlight

Stokes Lazarus & Carmichael LLP A T T O R N E Y S A T L A W

Hotel Key Cards

Registration Packet Friday Break, Saturday Promo Flyer Saturday Cash Prize, Photo Booth

Chairman’s Banquet

Chairman’s Banquet Entertainment “The Passing Zone”

Silent Auction Flyer Friday Cash Prize

Board Meeting Refreshments Customized Tote Bags Golf Prizes

Friday Promotional Materials Saturday Break

Golf Tournament Boxed Lunch & Circle of Gold

Bottled Water Welcome Refreshments

Convention Program & Pocket Agenda

Golf Tournament Beverage Cart

Chairman’s Reception Friday Breakfast

Convention Signage Meeting Space WiFi Thursday Dine-Around Carving Stations Saturday Breakfast

In-Room Gifts & Name Badges

Thank You, Exhibitors

Annual Golf Tournament a Big Swing of Success! CBA hosted its Annual Golf Tournament with over 40 players at The Golf Club of Amelia Island. Designed by Mark McCumber and Gene Littler, this Amelia Island golf club's breathtaking landscape was as beautiful as was challenging! It was a beautiful afternoon of fun and networking thanks to our wonderful sponsors --tournament beverage cart sponsored by Crescent Mortgage; golf prizes sponsored by Investment Professionals, Inc.; and the golf tournament boxed lunches and circle of gold sponsored by BFS Group. Congratulations to all winners: First Place Team: Jimmy Dubberly, South Georgia Bank, Glennville; Chris Wright, CenterState Bank, Atlanta; J.R. Llewellyn (who also won Longest Drive) with MeyerChatfield Compensation Advisors, Greensboro; and Chris Kelly, Barret School of Banking, Memphis, TN. Second Place Team: Erik Bagwell, CenterState Bank, Atlanta; Allen House, Jack Henry Banking, Monett, MO; Stan Nelson, Warren Averett, LLC, Birmingham, AL; and Mike Bell, ProfitStars, Monett, MO. The Closest to the Pin winner was Micheal Gordon, Mauldin & Jenkins, Atlanta. The CBA sincerely thanks all who helped make the golf outing a success!

1ST PLACE WINNERS

Chris Kelly, Barret School of Banking, Memphis, TN; J.R. Llewellyn (who also won Longest Drive), Meyer-Chatfield Compensation Advisors, Greensboro; Chris Wright, CenterState Bank, Atlanta; and Jimmy Dubberly, South Georgia Bank, Glennville.

2ND PLACE WINNERS

Over $5,000 Raised for PAC!

The CBA's popular Silent Auction and the Fling the Ring Wine Bottle Ring Toss proved to be very successful at the 46th Annual Meeting & Trade Show. Contributing to CBA’s PAC/PR funds is of vital importance to the industry we serve as it affords us to have a strong, clear voice in the Georgia Legislature. CBA expresses our sincere appreciation to all who participated and had fun in this year’s efforts. The Silent Auction and Fling the Ring Wine Bottle Ring Toss raised over $5,000 for CBA’s PAC/PR funds. The CBA of Georgia thanks all who donated and purchased items for the Silent Auction and Fling the Ring fundraiser.

Special Recognition

Erik Bagwell, CenterState Bank, Atlanta; Allen House, Jack Henry Banking, Monett, MO; Stan Nelson, Warren Averett, LLC, Birmingham, AL; and Mike Bell, ProfitStars, Monett, MO.

Save the Dates for our 2015 Conventions! 37th Annual Leadership Division Convention & Mini-Trade Show Friday-Monday, June 12-15, 2015 Sandestin Golf & Beach Resort, Destin, FL

47th Annual Meeting & Trade Show

The Community Bankers Association of Georgia (CBA) recognized Tammy Maass, Chief Financial Officer, CBA of Georgia, Atlanta, with an engraved plaque for her 20 years of service to the Association. Pictured left to right: Charlie Curry, President & CEO, First State Bank of Randolph County, Cuthbert; 2013-2014 CBA Chairman; Tammy Maass, and Rob Braswell, President & CEO, CBA of Georgia. 1 8 | w w w . cbaof ga. com |F a l l 2 0 1 4

Wednesday-Sunday, September 23-27, 2015 The Westin Savannah Harbor Golf Resort & Spa

Celebrating a Lifetime of Service

he Community Bankers Association of Georgia (CBA) paid tribute to four community bankers who have marked a significant milestone in the banking industry at the 46th Annual Meeting & Trade Show held at The Ritz-Carlton, Amelia Island, FL. Edgar Chapman, Faith Danforth and Paul Bennett (accepting for his late mother, Olivia Bennett), received the Lifetime Service Award during the "Night of Stars" Chairman's Banquet. Eddie Selph, The Merchants & Citizens Bank, McRae, will accept the award at a later presentation.

Faith Danforth, Senior Vice President/Loan Officer, Farmers & Merchants Bank, Nashville, has been in banking for 50 years. She applied for a job at United Banking Company in Nashville after her high school graduation. She was hired to work in the bookkeeping department by Mr. Dillard Hand and Mr. Sam Akins on April 1, 1964. Faith has worked her way through the bank and likes being an Agricultural Loan Officer best. Faith is now a Senior Vice President/Loan Officer and the Branch Manager at the Nashville Branch.

The CBA is extremely grateful to these individuals who have served as role models to the banking community. Honoring them is a small token of the CBA’s appreciation for their efforts to the banking industry.

The late Olivia Bennett, longtime Alma community banker, was one of the first female bankers in the state of Georgia. She served as Chairman of the Board for many years before her retirement at the age of 90. Mrs. Bennett served as the director on the following boards: Alma Exchange Bank & Trust (Alma), South Banking Company (Alma), Peoples State Bank & Trust (Baxley), Citizens State Bank (Kingsland), Peoples Bank (Lyons), South Georgia Bankshares (Lyons), and Bankers Data Services, Inc. (Alma).

"Georgia is fortunate to have such an impressive number of community bankers who have reached these milestones. It’s our pleasure to honor the men and women who have served the banking needs of their communities and lent their expertise to a new generation of community bankers throughout their careers,” stated Rob Braswell, President & CEO of the Community Bankers Association of Georgia. "We are honored to be counted among their peers.”

"Georgia is fortunate to have such an impressive number of community bankers who have reached these milestones...”

Edgar Chapman, Chairman, Talbot State Bank, has been in banking for 50 years, and has served as both President and Chairman of Talbot State Bank and served as a charter member of the Fayette County Chamber of Commerce. He was inducted into the Peachtree City Rotary Club and became one of their youngest members. He has participated in three humanitarian international projects with Rotary, in Vietnam, Guatemala, and an Immunization Day for Polio in India. He is a Rotary Paul Harris Fellow.

Charlie Curry, President & CEO, First State Bank of Randolph County, Cuthbert; 2013-2014 CBA Chairman; Edgar Chapman, Chairman, Talbot State Bank; and Rob Braswell, President & CEO, CBA of Georgia, Atlanta

Eddie Selph

Eddie Selph, President & CEO, The Merchants & Citizens Bank, McRae, has been in the banking industry for 40 years. After college, Eddie worked at Farm Credit Services for five years. He then was affiliated with a commercial bank. Eddie has served as President/CEO and Director of The Merchants & Citizens Bank in McRae since 2004.

The honorees were also featured in a recent issue of the CBA’s eNewsletter CBA Today. Every year, CBA honors bankers who have 30 or more years of banking experience and a proven record in excellent community involvement with the Lifetime Service Award. For more information about the Lifetime Service recognition, please contact CBA at (770) 541-4490 or email peake@cbaofga.com.

Charlie Curry; Faith Danforth, Senior Vice President/Loan Officer, Farmers & Merchants Bank, Nashville; and Rob Braswell.

Charlie Curry; Paul Bennett (on behalf of his late mother Olivia Bennett); and Rob Braswell. F a ll 2 0 1 4 | Ge o r g i a C o m m u n i t i es Fi r s t | 19

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CBA Announces the Endorsement of BASYS Processing for Merchant Services CBA is pleased to announce the endorsement of BASYS Processing, effective September 18, 2014, for Merchant Services. The CBA conducts an extensive due-diligence before selecting a company as an Endorsed Member Company (EMC). BASYS, of Lenexa, Kansas, earned the approval of both CBA's Member Services Committee and the Board of Directors for their bank-centric approach to Merchant Services. Since their inception in 2002, BASYS has assisted hundreds of community banks in establishing and operating thriving Merchant Services Programs. An excellent Merchant Services program not only helps banks get their foot in the door for prospective loan and deposit customers, but also strengthens the relationship with their existing customer base. From customer service and support, to strategic growth strategies for their bank partners, BASYS has detailed processes to take Georgia community banks to the next level with their Merchant Services programs. The company assists over 1,200 financial institutions nationwide in increasing non-fee income with an unheard of 95% merchant and 99% bank retention rate. "We are thrilled to announce the endorsement of BASYS Processing," stated Rob Braswell, President & CEO of the Community Bankers Association of Georgia. "One of CBA's primary objectives is to provide CBA member banks with quality products and services that will help them serve their customers and increase shareholder value. BASYS epitomizes the culture and values that our banks are looking for in a processing partner. They have a proven track record of growing bank portfolios and increasing non-interest income for their partners. We are excited to have BASYS Processing as our most recent Endorsed Member Company," said Mr. Braswell. Start Using BASYS Processing Today! Contact Brady Hanna, VP of Financial Services, to do an analysis on your existing program and start seeing the BASYS difference today. CBA members receive an extra 5% revenue share! View the bank programs: https://www.basyspro.com/Bank_Programs.html.

Steven Rigdon Joins CBA Team! CBA is pleased to announce Steven Rigdon has joined the Community Bankers Association (CBA) as Director of Legislative and Regulatory Affairs. Steven received his Bachelor of Business Administration from Georgia Southern University; and is a 2008 graduate of LSU Graduate School of Banking. He is a long-time member of CBA’s Leadership Division, having served as 2012-2013 Chairman. Upon graduation from college, Steven worked as a Human Resources Manager for three years for Milliken & Company in LaGrange. Prior to joining CBA, Steven spent 17 years in community banking in Metter, where he worked at The Brown Bank and most recently as Vice President, Commercial & Consumer Lender at Pineland State Bank. In his new position as Director of Legislative and Regulatory Affairs, Steven will be lobbying at the Capitol during the Legislative Session, calling on community banks across the state and representing CBA at various events. “We’re excited to have Steven on board,” stated President & CEO Rob Braswell. “His community banking background combined with his extensive involvement with CBA make him a great addition to the team!”

Steven and his family will continue to reside in Metter. He and his wife Tina have two daughters, Ramsey and Leah, and the family is a member of Metter Primitive Baptist Church. Steven has been active in Metter and Candler County by being a part of the Metter Rotary Club, the Chamber of Commerce, United Way, Relay for Life, and his church. Steven Rigdon, Director of “My goal for our association Legislative and Regulatory Affairs is that we continue to strive to make improvements and enhance the relationships of all of our community banks in Georgia; by being a voice for them at the state and federal level and by finding out what we can do to help them be more successful,” commented Steven.

Contact Steven at CBA at 770.541.4684 or steven@cbaofga.com.

F a ll 2 0 1 4 | Ge o r g i a C o m m u n i t i es Fi r s t | 21

CBA Teams with Midwestern Securities Trading Company and Pentegra to Offer a 401(k) Multiple Employer Plan for Member Banks The Community Bankers Association of Georgia (CBA) announces the CBA 401(k) Multiple Employer Plan (CBA Easy(k)) exclusively for CBA member banks. CBA has partnered with Midwestern Securities Trading Company, LLC (MSTC) and Pentegra to provide fiduciary and administrative support for the Plan. The Community Bankers Association conducts an extensive duediligence before selecting a company as an Endorsed Member Company (EMC). Midwestern Securities Trading Company (MSTC), in East Peoria, IL, earned the approval of both CBA’s Member Services Committee and the Board of Directors. In its decision to sponsor the plan, the CBA board of directors recognized that retirement plans are an important tool for attracting and retaining quality employees. However, administration and compliance have become more burdensome for employers with added rules, disclosures, and employer responsibilities. CBA selected MSTC to create a new retirement savings plan exclusively for CBA member banks and their employees. The CBA Easy(k) MEP enables member banks to provide a highly competitive, value added, retirement plan for its employees while reducing many of the fiduciary responsibilities, liabilities, and, in many cases, costs for adopting employers. The CBA Easy(k) simplifies a bank’s 401(k) program by outsourcing most fiduciary responsibilities and liabilities, eliminating the 5500 filings, and eliminating the plan audit (for larger plans), all while potentially providing cost savings. Under the CBA MEP, CBA members will have a dedicated team of experts from MSTC and Pentegra to manage the Plan. Each bank will retain the ability to customize plan provisions for its employees with the freedom to select its own financial advisor. The MEP is controlled by an oversight committee comprised of representatives from banks participating in the MEP. The participating banks will have direct input into Plan structure, vendor management, fund selection, fees, etc. “We believe the CBA Easy(k) MEP has the potential to save CBA member banks money, reduce their administrative burdens, expand the scope of services, increase the quality of their plan’s investment menu, and help sponsoring banks avoid much of their fiduciary liability,” said Rob Braswell, President & CEO of Community Bankers Association of Georgia (CBA). “I invite bankers

Fall Sporting Clay Shoot Raising funds for CBA’s PAC/PR

interested in this new, value-added benefit plan to register for a complimentary seminar or webinar, or contact me for more information.” Benefits to CBA Bank: • Reduces administrative burdens • Potential cost savings to member banks • Potentially increase the quality your plan’s investment menu • Reduce member banks’ and executive teams’ fiduciary liabilities • Elimination of individual 5500 filings • Elimination of individual plan audit (for larger banks) • Oversight committee made up of CBA peers CBA and MSTC will hold both informational webinars and seminars throughout Georgia to educate CBA member banks on the CBA MEP program in October and November. These complimentary meetings will run around 90 minutes, and preregistration is required. Watch for details on the upcoming dates and locations. To register, please email your name, bank, and names of people attending to Nathan White at nwhite@midwesternsecurities. com. About Midwestern Securities Trading Company, LLC MSTC, a member of FINRA/SIPC, is an independent, fully disclosed, introducing broker/dealer. It specializes in providing financial institutions with retirement plans, retail investment services, and marketing solutions. It works with community banks throughout the U.S. Its focus is on growing a new non-interest revenue stream for the institution from the investment services division and protecting the institution’s customer base from attrition. Contact Nathan White, CFO, at (800) 732-8601 or nwhite@midwesternsecurities.com. About Pentegra Retirement Services Pentegra Retirement Services has specialized in multiple employer plans (MEP’s) for 70 years. They were founded by the Federal Home Loan Bank system specifically to create a MEP for FHLB employees. They are one of the leaders in the industry regarding MEP’s, stand-alone retirement plans, and ESOP/KSOP plans.

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For more information or to register, please contact Peake WIlson at peake@cbaofga.com. 2 2 | w w w . cbaof ga. com |F a l l 2 0 1 4

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Thursday - Friday, October 23-24, 2014 | The Georgian Club, Atlanta

The CBA is pleased to announce the 4th Annual SE Financial Workplace Law & Compliance Conference. This year's conference will focus on Strategic Human Resources (HR) in the 21st Century. The Society of Human Resource Management and Ray Stanford, Founder & Principal, SIO Law Group and the Southeast Financial Consortium (SIFICON) will co-sponsor this special financial workplace conference.

requirements, tomorrow’s technology, new social relationships, risk management controls and people. Come join industry experts as they engage the audience in a variety of hot topics such as risk management, culture planning, the new business judgment rule, Obamacare, culture integration, threat response, today’s diversity, and change management and much more.

Now, more than ever, managing change in the workplace requires a collaborative executive management team developing a strategic human resource (HR) plan which targets boundless compliance

Don’t miss this one-of-a-kind conference designed specifically for community bank HR professionals and other executives with responsibility for workplace law compliance.

FEATURED SPEAKERS

Charlie Harman Rob Braswell Vice President for Government President/CEO and Community Affairs, Emory Community Bankers University & former Chief of Staff Association of Georgia for US Senator Saxby Chambliss Atlanta Atlanta

Kimberly Douglas Author and former 2003 President SHRM Atlanta

Brian Logan CEO Citris Atlanta

Joan Buchanan Chief Diversity Officer & Director of the Minority & Women Inclusion (OMWI), Federal Reserve Bank of Atlanta

Gregory Fordham Managing Director JURISi Group LLC

Tom Hall CEO Resurgent Performance, Inc. Atlanta

Jon Neiditz Partner Kilpatrick Townsend Atlanta

Carl Pilger Attorney Digital Insurance Atlanta

Gene Caudle Managing Director OnesourceHRM Atlanta

A. McArthur (Mac) Irvin Attorney Irvin Bowen Hale-Smith LLC Atlanta

Julius Pryor III Author JP3 Atlanta

Robert Dawkins Regional Attorney EEOC Atlanta

Mark Kanaly Partner & Chair Financial Services Products Group Alston & Bird LLP Atlanta

Ray Stanford Founder/Principal SIO Law Group Atlanta

F a ll 2 0 1 4 | Ge o r g i a C o m m u n i t i es Fi r s t | 23

2014 CBA WEBINARS Affordable, Professional Training, When and Where You Choose!

he CBA is committed to superior webinar customer service and has been a leader in webinar training for over a decade. The CBA webinars are designed for most positions in a community bank from the teller line to the board room. The speakers are industry experts with long-term, real-life, hands-on experience. Benefits of participating in a CBA webinar are: • Easy to Use, Time effective, Cost effective, Convenient, Interactive, • Current Topics delivered by experienced speakers, • Three Registration Options,

• Continuing Professional Education Credits, • Take-Away-Toolkit (consists of an employee training log and a Quiz to measure staff learning), • Webinar series for Bank Directors, Compliance Professionals, Risk Managers, Leaders, and • Much more! Register today for a webinar training option that best meets your training needs! For the most current listing of webinars, visit www.cbaofga.com.

OCTOBER 2014 10/7 10/8 10/9 10/14 10/15 10/16 10/21 10/22 10/23 10/28 10/29 10/30

Compliance & Legal Issues in Employee Screening: Pre-Hire & Post-Hire Defining Risk Management Officer Expectations & Responsibilities Your Depositor Has Died: Now What? Everything You Need to Know About Regulation CC: Compliance, Placing Holds, Substitute Checks & Clearings Recent Accounting Developments & Future Issues Managing the Force-Placed Flood & Hazard Insurance Processes Safe Deposit Boxes: Compliance, Legal Issues, Delinquencies & Death How to Reduce IT Risk Assessment Time by 70% & Still Satisfy Examiners & Your Board Conducting the 2014 ACH Audit Social Media Update: Facebook, LinkedIn, Twitter & YouTube Regulatory Compliance for Deposit Operations, Including BSA Mobile Payments: What You Need to Know Now & an Overview of Apple Pay

NOVEMBER 2014 11/4 11/5 11/6 11/12 11/13 11/14 11/18 11/19 11/20 11/25

Developing an Effective Succession Planning Strategy for Management & the Board Turning Bank Financial Statements into Useful Ratios & Trends Your Bank’s Loan Review Program: Meeting Risk Management Needs & Regulatory Requirements Call Report Preparation: Balance Sheet Schedules: RC, RC-E, RC-F, RC-G, RC-K Vendor Compliance Issues: Risk Management, Contracts & Accounting Ability to Repay & Qualified Mortgages: Lessons Learned the Hard Way & 2015 Changes Bank Protection Act Robbery Preparedness for All Staff IRS Reporting Requirements: 1098s, 1099s, TINs, Backup Withholding & Recent FATCA Updates Loan Deterioration Early Warning Signs: Where is Your Portfolio at Risk? Incident Response: Before, During & After a Data Breach

DECEMBER 2014

12/2 12/3 12/4 12/9 12/10 12/16 12/17 12/18

Opening Accounts for Nonprofit Organizations Traditional & Roth IRA Reporting Responsibilities: Requirements, Issues & Answers Handling ACH Exceptions & Returns Filing UCC Financing Statements: Getting it Right! Supporting Documentation for the ALLL Advertising Compliance: Website, Print, TV & Radio Denied Loan Requirements: Consumer, Commercial & Residential Self-Examination for Fair Lending Compliance

LE CPE/Cits Cred le b Availa

To learn what is covered in the webinar and to register, visit www.cbaofga.com or contact Jodi Swilley at Jodi@cbaofga.com or 770-541-4492. 2 4 | w w w . cbaof ga. com |F a l l 2 0 1 4

Note: Dates/Topics subject to change.

Associate Members - Elevate Your Brand and Build Stronger Relationships in 2015! In today’s business world, you need relationships, and that means direct and consistent contact with your customers and prospects. Make the most of the opportunities CBA provides to connect with member banks and their strong buying power. Consider advertising and sponsorship programs at a new variety of price points to fit in your budget planning. CBA offers a wide variety of advertising options to help you reach key decision makers in Georgia's community banking market. Enjoy maximum exposure, multiple run discounts and options designed to fit any budget. Advertise in the weekly newsletter, CBA Today, the quarterly magazine, Georgia Communities First, on the website, in the Georgia Financial Institutions Directory, or all of the above.

Distribution for the weekly e-newsletter is over 4,200 and growing. What’s the easiest and most economical way to increase your name recognition among CBA’s member banks while advertising your products and services? Event sponsorships! We welcome Associate Members to help underwrite Association activities such as golf outings, refreshment breaks, receptions, banquets and entertainment. Sponsors are recognized through various means, identifying them as leading providers to the Georgia community banking industry. Watch for more information on 2015 advertising and sponsorship programs. Contact Lindsay Greene at (770) 541-0376 or lindsay@cbaofga.com for a customized package.

UPCOMING

EDUCATIONAL PROGRAMS SUCCESS THROUGH KNOWLEDGE

OCTOBER 2014

NOVEMBER 2014

6th Annual Deposit & Lending Compliance School October 6-9, 2014 – Brasstown Valley Resort & Spa Young Harris

Consumer and Commercial Loan Documentation November 4-5, 2014 – JHTC at CBA Headquarters, Atlanta

Inaugural Community Bank Leadership Academy Fall Session October 22, 2014 – Idle Hour Country Club, Macon 4th Annual SE Financial Workplace Law & Compliance Conference (1 ½ days) October 23-24, 2014 – The Georgian Club, Atlanta Consumer Lending School (4 ½ days) October 27-31, 2014 – JHTC at CBA Headquarters, Atlanta FDIC Consumer Protection Workshop (1 ½ days) October 29-30, 2014 – Idle Hour Country Club, Macon

Banker Regulatory Forum November 6, 2014 - JHTC at CBA Headquarters, Atlanta

DECEMBER 2014 Creative Collections (NEW - ½ day ) December 2, 2014 – JHTC at CBA Headquarters, Atlanta Allowance for Loan and Lease Losses (ALLL) (New - ½ day) December 4, 2014 – JHTC at CBA Headquarters Compliance Program IV Topic: Anti-Money Laundering/Bank Secrecy Act Held in Five Convenient Cities December 2, 2014 - Rome | December 3, 2014 - Duluth December 9, 2014 - Macon | December10, 2014 - Albany December 11, 2014 – Brunswick F a ll 2 0 1 4 | Ge o r g i a C o m m u n i t i es Fi r s t | 25

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Bank Secrecy Act (BSA) Training Opportunities The importance of Bank Secrecy Act compliance cannot be overstated. The Financial Crimes Enforcement Network (FINCEN) is responsible for Bank Secrecy Act compliance and financial institutions are examined for compliance by their regulatory agencies. An insufficient BSA compliance program may expose a financial institution to reputation risk, such as manipulation by unscrupulous money launderers, undermine the integrity of the financial system or even threaten national security. Banks must ensure that appropriate personnel are trained in applicable aspects of the BSA. At a minimum, the bank’s training program must provide training for all personnel whose duties require knowledge of the BSA.

To assist CBA members in meeting their annual BSA training requirements, each year, the CBA is pleased to offer two basic BSA Officer Schools, one Advanced BSA Officer School and several BSA webinars throughout the year. We hope you will consider joining us in 2015 for a BSA training program that best fits your training needs. The CBA would like to thank the large number of community bankers from all across the state who attended the 2014 BSA Schools and who contributed to their overall success! Please SAVE THE DATES for the 2015 BSA Officer Schools and watch for additional BSA training information to arrive at your office soon.

2015 BSA Officer School Calendar BSA Officer “Basic” School – Tuesday-Thursday, March 17-19, 2015 – Atlanta BSA Officer “Basic" School – Monday-Wednesday, August 10-12, 2015 – Atlanta Advanced BSA Officer School –Tuesday-Friday, October 6-9, 2015 – St. Simons Island

Congratulations to the Graduates of the 2014 BSA Officer Schools!

February 2014 BSA Officer “Basic” School JHTC at CBA Headquarters, Atlanta

August 2014 BSA Officer “Basic” School JHTC at CBA Headquarters, Atlanta

Graduates of the 7th Annual Advanced BSA Officer School, The King & Prince Beach Resort & Spa, St. Simons Island F a ll 2 0 1 4 | Ge o r g i a C o m m u n i t i es Fi r s t | 27

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Accounting for the Alternative Minimum Tax (AMT) Stan Nelson CPA Warren Averett, LLC A CBA Associate Member Company

In 2010 and 2011, depending on maturities, ratings and call features, bank investment portfolio managers could purchase tax exempt municipal bonds with a stated interest rate that varied between 5.5 percent and 6.5 percent. That stated rate exceeded the rate of similar taxable securities. Due to the economic conditions of the day, many banks loaded their portfolios with tax exempt municipal bonds. As it turned out, tax exempt did not mean totally devoid of tax due to a nasty provision called the alternative minimum tax (aka the stealth tax). Most bank tax returns are calculated under two taxation methods, the regular method and the alternative minimum tax method. Whichever method yields the larger tax is the one used to determine the amount you send to the government. The AMT is an extremely convoluted system. The calculation for AMT begins with regular taxable income. There are 15 initial adjustments to that number most of which are of little significance to the banking world. There are adjustments for certain depreciation, intangible drilling costs and other preference items. But there is a final adjustment to regular taxable income that definitely affects the bank tax return. There is an adjustment called the Adjusted Current Earnings (ACE) adjustment. The ACE adjustment measures the difference between book income and taxable income and either adds or subtracts 75 percent of the difference to alternative minimum taxable income. This is where we tie everything back to tax exempt income. Due to the large amount of tax exempt income dictated by market conditions of this period, many banks had little or no regular taxable income. However, since you had to add back 75 percent of the difference in book and taxable income, AMT income was basically increased by 75 percent of your tax exempt income. The AMT rate being 20 percent, the result is that many banks had to pay 20 percent of 75 percent of their otherwise taxâ&#x20AC;? exempt income. This is not the end of the story. Remember earlier that we said the ACE adjustment could either be added or subtracted from alternative minimum taxable income? What would happen if the bank sold the tax exempt securities and had no tax exempt income? The difference between book and alternative minimum taxable income can reverse itself thereby creating an alternative

minimum tax credit. Thus, theoretically, the bank could eventually recover the AMT paid in prior years. We still are not to the end of the story. We havenâ&#x20AC;&#x2122;t discussed how to account for all of this activity. Generally Accepted Accounting Principles (GAAP) dictate that the tax created or saved from a temporary timing difference will generate a deferred tax asset or a deferred tax liability. In the case of paying AMT generated by the ACE adjustment, the bank would normally create a deferred tax asset rather than an expense. Be advised that regulators will not recognize a deferred tax asset unless that deferred tax asset will be realized by the bank within one year. For capital purposes regulators have priority over GAAP. To learn more, contact Stan Nelson at stan.nelson@warrenaverett.com.

256-241-0563 or

Order a 2014 Georgia Financial Directory today! Additional copies are $45 for members; $75 for non-members.

F a ll 2 0 1 4 | Ge o r g i a C o m m u n i t i es Fi r s t | 29

When the Minimum is Not Enough Sabrina Atkins Litigation Attorney

Camalla Kimbrough Attorney

Baker Donelson | A CBA Associate Member Company

Eleventh Circuit Rules that Lenders May Require Borrowers to Obtain More Flood Insurance than the Amount Mandated by Regulations Governing FHA-Insured Mortgages The United States Court of Appeals for the Eleventh Circuit recently resolved a district court split regarding minimum flood insurance coverage by holding that a lender may require a borrower who has a federally-insured mortgage to obtain flood insurance beyond the amount mandated by federal law. Feaz v. Wells Fargo Bank, N.A., et al., 745 F.3d 1098 (11th Cir. 2014). In Feaz, the borrower's loan was guaranteed by the Federal Housing Administration (“FHA”). When the FHA guarantees a loan for a home located in an area designated by the FEMA as presenting “special flood hazards”, the Department and Housing and Urban Development (HUD) requires that the home be covered by flood insurance “in an amount equal to either the outstanding balance of the mortgage … or the maximum amount of the … insurance available with respect to the property improvements [i.e., $250,000], whichever is less.” Feaz obtained $63,000 in flood insurance, more than the loan’s principal balance but less than the home’s replacement value. However, in 2007, Wells Fargo instructed her to increase her flood insurance coverage to the amount of her home’s replacement value. Feaz failed to do so and Wells Fargo force-placed the insurance. Feaz filed suit alleging that Wells Fargo breached the mortgage contract by requiring her to obtain more flood insurance than what is mandated by federal law. Wells Fargo argued that the Covenant sets a floor, rather than a ceiling, on the amount of flood insurance coverage that a borrower must obtain. The district court agreed and Feaz subsequently appealed. The Eleventh Circuit held that the Covenant “unambiguously makes the federally required flood-insurance amount the minimum, not the maximum….” The Court noted that a lender can set the required insurance for “any hazards,” including floods. Additionally, the Covenant “adds a separate and independent requirement that the borrower maintain the federally required minimum amount of insurance in addition to – not in lieu of – what the lender requires.” Thus, the Court held that the mortgage contract allows the lender to “do and pay whatever is necessary” to “protect the value of the Property."

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Accordingly, it is now crystal clear that lenders are free to require higher flood insurance coverage from its borrowers pursuant to FHA-guaranteed mortgages. However, the jury is still out on whether this holding will have on property owners within special flood hazard zones located in the coastal states and those borrowers' ability to refinance their loans. To learn more, contact Sabrina Atkins at 678-406-8741 or satkins@bakerdonelson.com.

Trends in Debit Rewards Programs Focus on Value Creation Jeff Trachtman Director, Product Management PULSE A CBA Endorsed Member Company

Debit rewards programs have gone through a seismic shift in recent years, primarily due to Regulation II’s impact on interchange rates. Many financial institutions moved away from issuer-funded debit rewards after regulatory limits on interchange made many such programs uneconomical. Nonetheless, to paraphrase Mark Twain, reports of the death of debit rewards are greatly exaggerated. The 2014 Debit Issuer Study, commissioned by PULSE, found that debit rewards programs regained some momentum last year, largely driven by the increasing popularity of merchant-focused rewards. After declining significantly in 2011 and 2012, post Reg II, 47 percent of all issuers offered a rewards program in 2013. Consumers Can Be Fickle Not all debit rewards programs are created equal. What might seem like the easiest part – attracting cardholders into a rewards program – can be a significant challenge. The relatively low level of consumer participation often is due to a lack of marketing support. But digging deeper, we’ve found that most rewards programs just aren’t very interesting to cardholders. Therefore, financial institutions constructing rewards programs to encourage cardholders to exhibit a desired behavior – such as using a specific payment product, opening new accounts or maintaining certain balances in their deposit accounts – must figure out the consumer’s sweet spot. A Time for Experimentation At PULSE, we encourage financial institutions to experiment with new types of rewards programs in order to see which resonate with your cardholders, get them to act and keep them engaged over time. Financial institutions also need to determine the value being created for their organization. This can include fostering better relationships with merchants as well as customers, cardholder retention, and encouraging changes in cardholder behavior, such as increased spend on their debit card. In the midst of this analysis, the silver bullet financial institutions have is transaction data.

Every time a card is used, it generates extremely valuable information, such as, when and where debit is used most, ticket size, frequency of use, and in what merchant categories. This data-centric approach leverages information that once was underutilized to inform critical business decisions that can have an enormous impact on issuers’ bottom line. Having the back-end data infrastructure to collect and analyze this information is necessary to properly construct and target debit rewards offers. Strategic financial institution marketing will define the next generation of debit rewards. Debit rewards programs that provide value to all participants, while also generating indispensable marketing data, can help level the playing field for smaller institutions. To learn more, contact Mark Reda at 813-854-2210 or markreda@pulsenetwork.com.

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WE BELONG..... “ICBA Bancard’s industry data and strategic positioning analysis was instrumental in helping us make key decisions regarding our credit card program. Through Bancard’s resources, we have developed strategies to expand and enhance our credit card portfolio and improve the banks profitability.” Susan Horton President, CEO & Chairman Wheatland Bank, Spokane, WA

ICBA Bancard/TCM Bank ICBA Reinsurance

Grow your bank with us. www.icbabancard.org (800) 242-4770

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ICBA Securities

ICBA Mortgage

| ICBA Consulting | ICBA Strategic Technology Solutions

Meet CBA's Endorsed Member Companies! Enhance your revenue. Improve your bottom line. Each of the Endorsed Member Companies below has earned the seal of approval from the CBA Member Services Committee and CBA's Board of Directors. Most offer special pricing to CBA members. Explore the revenue-enhancement opportunities with these vendors and improve your bottom line! ACG | Refurbished ATMs/Currency Counting Phil Winn | phil@acg.us.com | (770) 442-9800

ICBA Securities | Quality Investment Products Jim Reber | jreber@icbasecurities.com | (901) 762-5884

Bahr Consultants, Inc.| Insurance Review Hank Bahr |hank@bahrconsultantsinc.com | (865) 694-6098

Investment Professionals, Inc. (IPI) | Investment Services Steven Ransdell| steven.ransdell@invpro.com| (501) 410-4445

Banc Consulting Partners | Executive Benefits/BOLI Brian Miller | bmiller@yourbankpartner.com | (770) 485-8559

Midwestern Securities Trading Company, LLC (MSTC) 401(k) Multiple Employer Plan (MEP) Nathan White | nwhite@midwesternsecurities.com | (800) 732-8601

Give us a call at (770) 541-4490 or (800) 648-8215 or visit CBA online at www.cbaofga.com. F a ll 2 0 1 4 | Ge o r g i a C o m m u n i t i es Fi r s t | 33

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