January February GCFM 2022 by Community Bankers Association of Georgia

2022 LEGISLATIVE SESSION | EARLY BIRD SAVINGS | 2022 SCHOLARSHIPS

JAN/FEB 2022

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Advocacy Engagement

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CONTENTS

F E AT U R E S January/February 2022

C B A S TA F F John McNair President & CEO john@cbaofga.com Lori Godfrey Executive Vice President and Chief of Staff, Government and Regulatory Relations lori@cbaofga.com Kristi Greer Senior Vice President Professional Development kristi@cbaofga.com Lindsay Greene Senior Vice President Member Services, Marketing lindsay@cbaofga.com

So many ways to support CBA’s community bank advocacy efforts.

The Importance of Community Banking Advocacy Engagement in 2022 Supporting CBA’s PAC Fund

t h e l at e s t

Why is Advocacy Important and How Can Banks Best Support It?

s pot l i g h ts

CBA’s PAC/PR Fund

s tay connected

@CBAofGeorgia

professional development

11 Education Buzz 12

2022 Compliance Professionals Package

Calendar of Events

Scholarship Applications

trends

Treasuries for the Win!

CBA’s Preferred Service Providers

@CBAGeorgia

Lisa McNair Director of Finance lisa@cbaofga.com Cassie Cornell Assistant Vice President Digital Strategy and Professional Development Marketing cassie@cbaofga.com Becky Soto Assistant Vice President Professional Development and LEAD Board becky@cbaofga.com Connie Shepard Assistant Vice President Professional Development and Member Engagement connie@cbaofga.com

@company/ cbaofgeorgia

Community Bankers Association of Georgia 1640 Powers Ferry Road SE, Building 28, Suite 100, Marietta, GA 30067-1425 (770) 541-4490 or (800) 648-8215 • Fax (770) 541-4496 | www.cbaofga.com • cba@cbaofga.com J an u ar y/ Fe b r u ar y 2 0 2 2 | G e or g i a C om m un i ti es F i rs t | 1

VANTAGE POINT

The Importance of Community Bank Advocacy Engagement in 2022

John McNair President & CEO Community Bankers Association of Georgia

First, WELCOME to 2022! I hope everyone had a joyous and relaxing Holiday Season. Lisa, Lauren, and I went back home to Pennsylvania and spent a good bit of time with family and friends. With parents now in their mid-80’s, Lisa and I appreciate even more just how special each Holiday season is for our family.

time, it is unclear who the nominee will be, and I am sure this primary too will be hotly contested. Since CBA does not have federal PAC fund, we will rely heavily on ICBA for candidate support and direction; however, our priorities for the Senate seat are identical to those outlined for the Gubernatorial election.

Now that 2022 is here, there is a lot to discuss regarding the Georgia legislative session and politics in general in our state, so, let’s dive right into it:

Bottom Line: Please be aware that things are going to get very heated here in Georgia. Millions of dollars from out of state will pour into all the campaigns and the ads and rhetoric will be unsettling at times. To address, I encourage everyone to become engaged in the advocacy process. There are several things all must do:

Georgia Legislative Session: Tax relief for community banks: CBA is pursuing a state income tax relief bill for community banks under $50 billion in assets. Margin compression, increased costs of doing business, and predatory tax advantaged competitors are all negatively impacting community banks. On the heels of the PPP, it is now known how vital community banks are to the Georgia economy. Lori and I, along with our consulting firm Fiveash-Stanley, will work to educate legislators as to the benefit of supporting a tax relief package. The 2022 Elections: Georgia will be center stage nationally due to the fact we have a Gubernatorial and US Senate election. While redistricting has created several hotly contested US House races, I will focus on the Gubernatorial and Senate elections. Gubernatorial Election: Democratic candidate Ms. Stacey Abrams has announced her intention to run for Governor potentially creating a rematch with Governor Kemp; however, former Senator David Perdue has decided to primary Governor Kemp for the Republican nomination. The Republican primary challenge from Sen. Perdue is a shock considering his earlier loss to now Sen. Ossoff and the bifurcation of the Republican vote, funding, and allegiances from the Sen. Loeffler and Rep. Collins primary. CBA does not support candidates during primaries, only party nominated candidates. We will support candidates that prioritize small businesses, less regulation, lower taxes, agriculture, and community banks. US Senate Election: This election too will receive national attention. Sen. Warnock will be running to retain his seatthis time for a full 6-year term, against one of several Republicans vying for the Republican nomination. At this

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1) Support CBA’s PAC Fund: CBA’s PAC fund is the ONLY ONE in Georgia’s banking industry that exclusively supports the interests of community banks. As we have seen time and time again, bifurcated advocacy does not work- too many conflicting interests. Only single constituency advocacy is effective. CBA needs your support to fight for candidates that will fight for you and your communities. 2) Support ICBA PAC Fund: ICBA’s PAC fund is the ONLY ONE exclusively to serving the nation’s community banks. There are several races in Georgia with national implications and ICBA needs your help to support those that will carry the community bank fight to Washington. 3) Take the time to become educated on the issues AND encourage your colleagues to do similarly. Most importantly, VOTE!! Every election, whether local, state, or federal is important; however, this mid-term election will have a generational impact on Georgia and the country. Please be engaged, support the PAC funds that share your interests, and get out in person to vote. THANK YOU!

FROM THE TOP Debra Weil Executive Vice President Community Banking Co. of Fitzgerald 2021-2022 CBA Chairwoman

Supporting CBA’s PAC Fund - Giving Georgia’s Community Bankers A Strong Voice CBA Political Affairs Committee (CBA PAC) is the only Georgia State PAC exclusively committed to representing the interest of community banks. In an ever-changing industry, CBA must constantly build and renew relationships with our state legislators. I’ve been involved in raising funds for PAC for many years and I would like to offer a few ways you and your bank can generate funds for this important cause. Corporate contributions to the CBA PAC/PR Funds may be made by state banks, any bank holding company and most, if not all, associate member companies. National banks can contribute to the PR Fund only. The following are ideas to generate PAC/PR contributions: • Set a specific goal for your bank or business • Write a personal check as CEO to set an example for your officers and employees • Ask Board of Directors to contribute one month’s worth of Board of Committee fees as their contribution • Encourage employees to have a “jeans day” for a fee, with the contributions going to PAC/PR Fund • Host a golf tournament, dinner, or other fundraising event for your customers, with proceeds supporting PAC/ PR funds

If you are just learning about CBA’s Advocacy efforts, I invite you to participate in a CBA Advocacy event. CBA offers numerous ways to network with your peers while raising funds. • Form a team and participate in fundraisers such as the Spring Topgolf Showdowns or the Fall North and South Clay Shoots. • Donate items or funds to CBA’s Silent Auction held at CBA’s Annual Meeting in September. • Get creative on a fundraiser that best fits your bank and customers Remember: Corporate contributions to the CBA PAC/ PR Funds may be made by state banks, any bank holding company and most, if not all, associate member companies. National bank can contribute to the PR Fund only. With your support, and participation in the political affairs process, the Georgia’s community bankers can have a strong voice and influence in the shaping of our industry.

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We recognize and thank our law partner John F. Kennedy for his continued service and leadership in the Georgia Senate.

Leadership:

Chairman of the Senate Majority Caucus Vice Chair, Banking & Financial Institutions Committee

Recent Legislation: 2021 Special Session: Senate Bill 1 EX Senate Bill 2 EX House Bill 1 EX 2021 Session: Senate Bill 234 2020 Session: Senate Bill 373 Senate Bill 451 Senate Bill 1023 2019 Session: Senate Bill 157

Offices: Macon + Atlanta + Athens

THE LATEST

Why is Advocacy Important and How Can Banks Best Support It? Truett Cathy, the Founder of Chick-fil-a, once said, “Where there is no margin, there is no mission.” What did he mean by this statement? Chick-fil-a is known nationally for its culture of excellence and service. They are known for their mission statement, which is “to be America’s best quickservice restaurant at winning and keeping customers.” When Mr. Cathy said, “Where there is no margin, there is no mission,” he meant if there is no profit (margin), “there is no way we can achieve our mission of being America’s best quick-service restaurant at winning and keeping customers.” Although Mr. Cathy’s industry is much different than the financial industry in which we serve, the overriding need for margin is still relevant.

In addition to supporting the PAC/PR funds, as a community bank CEO in Georgia, it is critical for me to personally engage with our legislators. Our voice, as bankers, must be heard. As important as it is for our Association to be highly engaged with our legislators, it doesn’t compare to the impact bankers can have at the grass roots level.

The mission of the Community Bankers Association (CBA) carries the words, “Our advocacy is our power.” If advocacy is the power behind the CBA, then in order to carry out our mission, we must have margin, derived from the Political Affairs Committee and its Public Relations Fund (PAC/PR) Fund. Therefore, it is essential for our community banks to support the CBA’s PAC/PR Fund for three main reasons.

I trust you will lock arms with me and fight for the good of us all. I wish each of you a successful and prosperous 2022.

In 2022, I am going to make it a priority to engage frequently and deeply with our representatives at the State and Federal level. Additionally, I am going to make it a priority to engage with other CEOs nationally on mission critical issues that impact our industry. We can make a difference if we are intentional and passionate about doing so.

Sincerely, T. Neil Stevens

First, it makes a statement that we care. When we demonstrate the willingness to put financial resources behind our words, it speaks volumes. When we are not willing to offer the resources needed, it subtly sends the message that advocating for what is best for our industry and those we serve is not a true priority. Second, it is the right thing to do. If we truly care about our industry and the political headwinds that we are facing, it becomes evident that we must support advocacy initiatives and sacrifice to achieve success. The care and concern for keeping our industry vibrant and growing propels the giving. Finally, it takes financial resources to be effective in this space. The entities that gain the greatest traction locally and nationally, from a political perspective, are those who have the most monetary support. While it may not be the only component to success, it is an essential one.

T. Neil Stevens President & CEO Oconee State Bank, Watkinsville CBA Advocacy Committee Chair

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SPOTLIGHT

CBA's PAC/PR Fund

Lori Godfrey Executive Vice President & Chief of Staff Government and Regulatory Relations

The CBA Political Affairs Committee (CBA PAC) is the only Georgia State PAC exclusively committed to representing the interests of Community Banks. The political activities of CBA are a vital function. We are seeking the support of every banker in our Association in raising political funds and assisting in political communications. Please remember the power of the Georgia Legislature shapes our future and can change our profession. Maintaining our unified strength is essential. With your support and participation in the political affairs process, the Georgia's community bankers can have a strong voice and influence in the shaping of our industry. How are Funds Used? CBA’s PAC provides Georgia’s community banking industry a voice in state politics through campaign contributions to state legislators and candidates seeking election. The PAC fund assists candidates who support community banking and are running for election to the Georgia State Legislature or other state level offices. CBA’s Public Relations (PR) Fund is used for political activities only. The PR Fund facilitates communication between legislators and community bankers. The PR Fund allows CBA and community bankers to continually participate in political events and meetings across the state. Are Contributions Tax Deductible? Contributions to the PAC Fund are not tax deductible. CBA’s Community Bankers for Better Government PAC is registered with the Georgia Government Transparency and Campaign Finance Commission and complies with all state ethics laws.

How Much Should My Bank Contribute?

Suggested giving guide based on the assets of your bank:

Download Individual Contribution Form Download Corporate Contribution Form

Why Contribute to PAC? The banking industry will always be a changing industry. Since we compete in an industry that is driven by economics and politics, we must constantly build and renew relationships with our state legislators. It is crucial to support the friends of our cause by contributing to their political campaigns. ho Can Contribute? W Corporate contributions to the CBA PAC/ PR Funds may be made by state banks, any bank holding company (i.e. whether the bank is state or national) and most, if not all, associate member companies. National banks can contribute to the PR Fund only. In addition, the directors, officers, and employees of all CBA member banks may contribute to PAC/PR Funds.

Contribution Level Range for Bankers & Directors

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SPOTLIGHT

ADDITIONAL IDEAS TO GENERATE PAC/PR CONTRIBUTIONS • Set a specific goal for your institution • Ask Directors to contribute one month’s worth of Board or Committee fees as their contribution • Encourage employees to have a “jeans day” for a fee, with the contributions going to PAC/PR Fund • Host a golf tournament, dinner, or other fundraising event for your customers, with proceeds supporting PAC/ PR funds

• Write a personal check as CEO to set an example for your officers and employees • Form a team or participate in PAC Fundraisers, such as CBA’s Clay Shoot & Golf Tournaments • Donate items or funds to CBA’s Silent Auction held at CBA’s Annual Meeting • Get creative on a solution that best fits your institution and customers

TARGET YOUR AUDIENCE

Check out our Advertising & Sponsorship Options

If you want to target top decision makers in Georgia’s community banking industry, you will find the CBA offers numerous ways to help you accomplish your goals and stretch your marketing dollars. Show your support for CBA and promote your business at the same time. If you have questions, please contact Lindsay Greene at lindsay@cbaofga.com or (770) 541-0376.

Georgia Communities First Magazine

Published six times a year, Georgia Communities First provides coverage of community banking industry trends and developments both on a state and national level.

CBA Website Advertising

CBA Today eNewsletter Advertising

Published weekly, CBA Today has a distribution of over 5,000. This digital newsletter includes information on upcoming association events, educational opportunities, associate members, as well as state and national industry news.

CBA’s website, www.cbaofga.com, is the source of information for all things CBA. Ad space is available on a monthly basis and can link to your home page or the destination of your choice.

Upcoming Sponsorships: • Credit Analyst I | January 19-20, 2022 • Credit Analyst II | February 15 – 16, 2022

• Flood, Appraisals, Applications | January 27, 2022 • Compliance Officer Bootcamp | March 1-4, 2022

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Education Buzz: Talent Sharing

Have you ever considered sharing the talent of your internal employees with multiple departments within your community bank? “Why?” you ask. “Why not!” There are many individuals that are in positions where they are under-utilized. These bankers have a variety of skills and talents that are untouched daily. In our industry, we continue hearing you share that qualified candidates and retaining talent are some of your top challenges. If we

PROFESSIONAL DEVELOPMENT

choose to encourage talent sharing and help managers understand the benefits in avoiding the hoarding philosophies they are known for, we may have found a great talent management strategy. Consider the employees on your team. What skills do they possess? Do you know all them? You do know what they do well in their current roles but what about the hidden treasures? Consider giving you employees an opportunity to complete a short survey that helps your HR managers gather the skills that are untapped. Then use these in building your next project team.

Kristi Greer

Senior Vice President Director of Professional Developent Community Bankers Association of Georgia

Want to talk more about organizational development and talent management strategies, call me and consider joining CBA’s HR & TD league.

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PROFESSIONAL DEVELOPMENT

Join Early & Save! New Elite Package Available! Compliance Professionals Package Join before Quarter 1

Each member can send their first attendee complimentary to all four quarterly training sessions plus receive all the benefits above. Detailed electronic manuals are provided one-week prior to each compliance program which incorporates regulatory compliance requirements including the latest federal legislation and guidance from the federal financial institution regulatory agencies. Members may use the link to download and print their own materials. Banks who participate in the Compliance Professionals Package will receive discounts on registrations for additional Compliance related-professional development opportunities including (these are listed in the order offered for 2022): • TRID: The Basics (2-day workshop)– January • Flood, Appraisals & Applications – January • Compliance Officer Bootcamp, St. Simons Island (4-day school) – March • Georgia Deposit Documentation – March • BSA/AML Fundamentals – April • TRID: Advanced (1-day workshop) – May • Advanced BSA Officer School, St. Simons Island (4-day school) – August • NEW: Advanced Deposits: Compliance and Audits (2-day workshop) – October • BSA/AML Update - November • And more

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Elite Compliance Professionals Package Join by January 30, 2022

We know each of you appreciate having BSA training in addition to the compliance topics offered. We have put together an Elite package that will give you an additional $500 in savings. You have the option to upgrade the Compliance Professionals Package by paying an additional $2,175. Saying yes and paying the additional funds by January 30th will automatically get one person registered for these classes: • BSA/AML Fundamentals • Advanced BSA/AML Officer School • BSA 1-day Year-End Update Choosing this option, 1. Registers you for these three programs at an early bird savings and 2. Your bank will be given two $150 coupons to use towards the following programs: • Human Resources & Talent Development League • CBLA – Community Bankers Leadership Academy • Mortgage Lending School • Executive Channel • Innovation Package Elite Compliance Professionals Package **Prepayment required. **Automatically registers one attendee for the three BSA programs listed. **No cancelations. Substitutions welcome. **Deadline for upgrade to Elite Package is January 30, 2022. ***Two $150 coupons can be used by any employee of the bank that is an elite member. Coupons applied at registration. Registration for program with coupon must be completed and paid by March 15, 2022.

PROFESSIONAL DEVELOPMENT

Compliance Officer Bootcamp March 1—4, 2022 | King & Prince, St. Simons Island Early Bird Deadline: January 15, 2022 This program provides insight on how to be an effective Compliance Officer. This is a must whether you are new to compliance or have been moving through the motions of compliance for years. Human Resources & Talent Development League Early Bird Deadline: January 15, 2022 Access to the HR Hotline up to four times per month, four R.A.P Sessions, access to virtual networking groups, and attendance to 2022 Spring HR Conference. Elite Compliance Professionals Package Early Bird Deadline: January 30, 2022 Upgrade your bank’s Compliance Professionals Package to the Elite Compliance Professionals Package and take advantage of free programs, special savings and much more. Pay by January 30th and automatically receive a complimentary registration to the following: BSA/AML Fundamentals | Advanced BSA/AML Officer School | BSA 1-Day Year-End Update In addition, your bank will receive two $150 coupons to use towards a variety of CBA signature programs. Mortgage Lending School April 4—7, 2022 | Crescent Mortgage Headquarters, Atlanta Early Bird Deadline: February 15, 2022 This school is designed for both bankers who want to enter the secondary market mortgage space, and those who are already seasoned in mortgage origination. Attend in person or virtually over four days. The Mortgage School will focus on the roles and functions within residential mortgage banking.

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PROFESSIONAL DEVELOPMENT

Inspired by CBA’s LEAD Committee, the Community Bank Leadership Academy is designed specifically for the future community bank leader. This series of four sessions will benefit the attendees through individual self-discovery, personal and professional growth and career development. Each participant will walk away with their own personal development plan. The workshops are designed to bring continuity and sustainable accomplishments which will allow each participant to build positive influence, team connections, and ongoing learning resources. The Academy aims to support Georgia’s community banks in the development of its people so that these bankers will become impactful leaders of influence - for the bank, themselves, and their communities. Participants who consecutively attend & participate in all four sessions in a calendar year will receive a Certificate of Completion.

The “Tool Belt” Leaders choose to professionally grow their knowledge. This series will encourage not only workshop participation but also ongoing self-development. The sessions are designed to build upon each other so that each leader can create action plans for successful practice in their banks. You will see value plus change. In 2022, each session will cover 1.5 days of learning and development and will take place on Tuesday afternoon & evening and all day Wednesday.

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CBA's 54th Annual Convention & Mini-Trade Show is now CONNECT! September 13-17, 2022 Ritz Carlton | Amelia Island, FL Reserve Your Room Today! For guests that prefer to call in to make their reservation via phone, we have a dedicated group desk available to accommodate them at 866-763-2960 please reference the group name Community Bankers Association of Georgia when making reservations.

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Mark Your Calendars for these Excellent Training Opportunities March 1-4: Compliance Officer Bootcamp April 4-7: Mortgage School April 19-21: BSA Fundamentals May 9-11: HR/TD Conference May 22-27: Barrett School of Banking August 22-26: Advanced BSA/AML Officer School September 15-17: Connect – CBA’s Annual Convention October 18-19: Advanced Deposits: Compliance & Audit *NEW CBA continues to provide relevant, timely, and effective education. Find our training calendar on the website or contact one of the “ladies of learning” to discuss your professional development needs and goals. JANUARY ALLL/CECl TRID Basics (2 days) Credit Analyst Level 1 (2 days) Flood, Appraisals, Applications

APRIL

FEBRUARY

MARCH

Branch Leadership Retail Banking Forum Credit Analyst Level 2 Executive Channel IRA Fundamentals

MAY

Compliance Officer Bootcamp Commercial Lending Bootcamp HR RAP Q1: Compliance GA Deposit Doc CBLA 1 ICBA Live

Mortgage School Commercial Lending Bootcamp Branch Leadership Retail Banking Forum BSA Fundamentals ICBA Capital Summit Q2: Compliance

TRID Advanced HR Conference + RAP Executive Channel Commercial Lending Bootcamp CBLA 2 Barrett School of Banking

JULY

AUGUST

JUNE

L.E.A.D. Retreat

SEPTEMBER

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Bank Security Cyber Risk Summit Adv BSA/AML School CBLA 3 Executive Channel

Convention Sept 13-18 Q3: Compliance Retail Banking Forum

OCTOBER

NOVEMBER

DECEMBER

CBLA 4 Branch Leadership HR RAP Advanced Deposits: Compliance and Audits (2 days)

Executive Channel

Q4: Compliance BSA Update HR RAP

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CBA’s Memorial Scholarship Applications Are Available!

The Community Bankers Association of Georgia (CBA) is proud to offer the 2022 Julian & Jan Hester Memorial Scholarship and the J. Steven Walraven Scholarship! The Hester Scholarship is open to Georgia high school seniors who will be entering a Georgia college, university or technical school (two year program or more) in the fall semester of 2022. The scholarship is named after the late Jan Hester, daughter of Lalia and the late Julian Hester, long-time CEO of the CBA. The four winning recipients will be awarded a $1,000 scholarship. CBA’s Leadership Division proudly assists with this initiative. The Walraven Scholarship is awarded in the amount of

$500 to a bank employee who desires to continue their education while working full-time at a CBA member bank. The scholarship is named after the late J. Steven Walraven, an active community banker who exemplified professionalism and community involvement. To compete, employees must write a short essay on how community banking has impacted their life and how it will enable them to give back to their community. Applications for either scholarship should be returned to the bank no later than Friday, April 8, 2022. All completed applications should be submitted by the bank to CBA no later than Friday, April 15, 2022. Only complete applications will be eligible. A panel of independent judges will review the applications and winners will be announced in late April 2022. Please visit www.cbaofga.com to download the scholarship applications and encourage participation from your community. For more information, please contact Lindsay Greene at lindsay@cbaofga.com.

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TRENDS

Treasuries for the win!

Jim Reber

President & CEO ICBA Securities

Low yield spreads send community banks back to the basics. I’ll let you in on a secret: sometimes your columnist runs out of new ideas to cover. A dearth of new products, no new regs, a stable rate environment—All of these can cause a writer to run aground while sailing the financial seas in search of material.

were to purchase a simple five-year agency bond, he or she can expect to get three basis points (0.03%) more yield than the five-year treasury note. In the not-too-distant past, that spread would have been 15 to 20 basis points.

Then it dawns on me: I’ve never covered treasury securities! For the most part, you should be glad. This sector over the past quarter century has gradually receded into the background of bank portfolio management as community bankers everywhere have been on the hunt for higher returns. For all of treasuries’ built-in benefits, there’s the fact that they yield less than anything else on your brokers’ offering menus. While the treasury yield curve is the basis from which your entire balance sheet is priced, as investments they’ve at best been an afterthought.

As to why incremental yield is so hard to come by, the simple explanation is that supply/demand is at work. The still-massive amounts of uninvested cash in the banking system, chasing supplies of bank-suitable bonds that really aren’t growing much if at all, have resulted in narrowing spreads. I for one certainly wouldn’t relish the notion of buying an agency bond versus a treasury at these levels. In 2021, around 40 percent of the government-backed bonds which community banks purchased were treasuries, according to Vining Sparks. That is by far the highest amount in decades.

UST’s historical role As to why I’m bothering to cover a sector that community banks don’t own, there’s more to this story than meets the eye, and besides, it’s possible the readers have forgotten some of the more salient points. Being the master of the obvious, I’ll point out that treasuries have unmatched credit quality and liquidity. There are other features that portfolio managers like, such as the fact that an investor can pick virtually any maturity out to 30 years, and that small block sizes trade at virtually the same prices as large blocks. There was also a time and place when bank investment portfolios regularly contained treasuries. If we were to look back a generation, we’d see that mortgagebacked securities (MBS) in particular weren’t highly represented. Several factors working in concert have changed the attitudes and objectives of portfolio managers. First, the long-term trend toward lower interest rates since the 1980’s has contributed to smaller net interest margins, and hence the urgency for incremental yield. Secondly, investors of all stripes, and community banks in particular, have made it their business to be more sophisticated in their understanding of available options. Thirdly, MBS underwriters have continued to bring new products to market, many of which are coveted by bank portfolio managers. Two examples are Collateralized Mortgage Obligations (CMOs) and “prepayment friction” MBS. The typical community bank’s bond portfolio now has the majority of its investments in the mortgage security category.

Hoped-for outcomes What is the endgame for this strategy? Certainly, a bond portfolio stuffed full of zero-percent risk-weighted bonds that have no optionality really isn’t a recipe for outperforming one’s peers. There are several possibilities. One is that yield spreads widen, if not to 1990’s levels, then at least to 2010’s. When that happens, the most efficient bonds swaps of all time can be executed: sell a treasury, and buy an identical-duration agency, MBS, or municipal bond. Another outcome is that the yield curve flattens (which nearly always happens when the Fed hikes rates), and the total returns on the longer treasuries in the portfolio actually hold up very well. Most optimistically, loan demand shows up, and the investor can dump the treasuries in short order and turn them into much higher-yielding credits. So there you have it. If you have recently considered the buying of treasuries in lieu of the more traditional sectors, given the paltry incremental rewards, just know that you’d be in good company. And with any luck, you are finished reading about the wonders of U.S. treasury securities for the next 20 years.

What changed in 2021? So why now are community banks reverting to old practices, at a time when nominal rates are still low, and loan demand is tepid at best? As you may have heard, yield spreads on traditional investments are at an all-time low. For example, if a banker J an u ar y/ Fe b r u ar y 2 0 2 2 | G e or g i a C o m m un i ti es F i rs t | 25

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CBA’S 2022 PREFERRED SERVICE PROVIDERS DIAMOND LEVEL

ICBA Securities

Jim Reber | jreber@icbasecurities.com | 901.762.5884 Independent Community Bankers of America

Scott Brown | scott.brown@icba.org | 334.328.5731 James Bates Brannan Groover LLP

Dan Brannan | dbrannan@jamesbatesllp.com | 404.997.6023 SHAZAM

Alex Jernigan | jjernig@Shazam.net | 229.220.0064 PLATINUM LEVEL Harland Clarke

Christine Ahlgren | christine.ahlgren@harlandclarke.com | 678.500.5330 Warren Averett

Lisa Berry | lisa.berry@warrenaverett.com | 205.769.3388 Wipfli Mary Boortz | mboortz@wipfli.com | 715.858.6677 GOLD LEVEL

SILVER LEVEL ACG

Bankers Healthcare Group

Phil Winn | Phil.Winn@acgworld.com | 678.458.9899

Crescent Mortgage

John Gianacaci | JGianacaci@BCC-USA.com | 609.915.9168

Eclipse Brand Builders

Shea Gabrielleschi | shea@shcpfoundation.org | 901.529.4773

FITECH

Ryan Sower | ryan@executiveinsuranceagency.com | 770.474.2355

Genesys Technology Group, LLC

Ryan Busenitz | Ryan.Busenitz@kasasa.com | 678.595.0625

Holtmeyer & Monson

Melissa Wallace | melissa.wallace@qwickrate.com | 678.797.4062

Danny Capitel | dcapitel@promnetwork.com | 770.630.6796 Mauldin & Jenkins Ron Mitchell | rmitchell@mjcpa.com | 229.446.3600

BCC-USA

CRA Partners

Executive Insurance Agency, Inc. Kasasa

QwickRate

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Chis Bates | chris@agoraeversole.com | 601.366.7370 Bahr Consultants, Inc.

Newcleus Bank Advisors

Hank Bahr | hank@bahrconsultantsinc.com | 865.694.6098

Point to Point Environmental

Greg Herring | gtherring@darnelrecovery.com | 770.786.4500

JR Llewellyn | jr.llewellyn@newcleus.com | 678.427.1015 Mark Faas | mfaas@p2penvironmental.com | 678.565.4435 Ext 151

DARNEL, Inc.

STS Group

Chris Nelson | cnelson@stsgrp.com | 205.567.3613 Travelers

Diana Baker | dcbaker@travelers.com | 678.317.7882 Interested in becoming a Preferred Service Provider?

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