KENTUCKY BANKER April 2015
April 2015 | 2
CONTAC TS BOARD OF DIRECTORS Mr. Bill Allen Bank of the Bluegrass and Trust Company
Ms. Lanie W. Gardner First National Bank of Muhlenberg County
Mr. William Alverson Traditional Bank, Inc.
Ms. Elizabeth Griffin McCoy Planters Bank, Inc.
Mr. Thomas J. Smith, III American Bank & Trust Company, Inc.
Mr. James W. Beach Peoples Bank & Trust Company Owenton
Mr. Gordon Kidd United Cumberland Bank
Mr. Ryan Steger Commonwealth Bank FSB
Mr. Michael H. Mercer First Security Bank of Kentucky
Mr. H. Lytle Thomas Heritage Bank, Inc.
Mr. Glenn Meyers Kentucky Federal Savings & Loan Association
Mr. Frank B. Wilson Wilson & Muir Bank & Trust Company
Mr. Michael Mineer Citizens Deposit Bank & Trust
Mr. Greg A. Wilson The First Commonwealth Bank
Mr. J. Wade Berry Farmers Bank & Trust Mr. William F. Brashear, II Hyden Citizens Bank Mr. Neil S. Bryan The Farmers Bank of Milton
Mr. Louis Prichard Kentucky Bank
Cover photo taken by Robin Miller “Weeping Trees�
for the Scenes of Kentucky Photo Contest
KBA STAFF Ballard W. Cassady Jr. bcassady@kybanks.com President & CEO
Michelle Madison mmadison@kybanks.com Information Technology Manager
Audrey Whitaker awhitaker@kybanks.com Insurance Services Coodinator
Debra K. Stamper dstamper@kybanks.com EVP / General Counsel / Director of Compliance
Lanie Minton lminton@kybanks.com Administrative Assistant
Tim Abbott tabbott@kybanks.com Account Representative
Katie Rajchel krajchel@kybanks.com Staff Accountant
KBA Benefit Solutions
Paula B. Cravens Sturgeon pcravens@kybanks.com Director of Education Solutions Selina O. Parrish sparrish@kybanks.com Director of Vendor Solutions Matthew E. Vance mvance@kybanks.com Chief Financial Officer Miriam Cole mcole@kybanks.com Executive Assistant Paula Cross pcross@kybanks.com Education Services Coordinator Jamie Hampton jhampton@kybanks.com Education Services Coordinator Natalie Kaelin nkaelin@kybanks.com Assistant General Counsel
Yvonne Savage ysavage@kybanks.com PAC Services Coordinator Angie White awhite@kybanks.com Manager, Communications Solutions Steve Whitlow swhitlow@kybanks.com Systems Engineer
Consultant
John P. Cooper jcooper@kybanks.com Legislative Solutions Consultant
KBA Insurance Solutions
Chuck Maggard cmaggard@kybanks.com President & CEO Brandon Maggard bmaggard@kybanks.com Account Representative
HOPE of Kentucky Billie Wade bwade@kybanks.com Executive Director
Tammy Nichols tnichols@kybanks.com Finance Officer & Asset Manager
Lisa Mattingly lmattingly@kybanks.com Director of Sales & Service Donna McCartin dmccartin@kybanks.com Benefit Support Specialist
CONTRIBUTING EDITOR Angie White awhite@kybanks.com
CONTACT 600 West Main Street Suite 400 Louisville, KY 40202
Phone: 502-582-2453 Fax: 502-584-6390 www.kybanks.com
April 2015 | 3
CHAIRMAN’S CORNER I have a customer in southern Ohio whose business is near a huge landfill, sarcastically named Mount Rumpke after the company that collects trash in the region. Every time I visit that customer, I drive past this hill of refuse and can’t help but think of the mountain of regulation burying the financial services industry in the Commonwealth – and the smell is pretty much the same too. The KBA recently spent time in Washington, DC telling the story of our state’s financial institutions to those who might help us make a difference, explaining our frustration with the standing of the current regulatory burden. It was not hard to come up with examples of how Dodd-Frank, Qualified Mortgage, CFPB, overly-aggressive examinations and the overall regulatory burden stand in the way of Kentucky banks and our ability to serve our customers. These trips can be very frustrating, as I often feel the stories told fall on deaf ears. For several years, the agencies wrote the regulations we currently struggle under with little regard for our input. Last year we were told it was time to “put the pen down to allow the regulations to season.” Unfortunately, they seasoned like a fine wine turning to vinegar.
The KBA stormed the Hill with a long wish list of reforms – some of which will probably be on our wish list years from now. However, there seems to be progress on a number of critical items. Congressman Barr (KY-6), a member of the House Financial Services Committee, has proposed legislation, (H.R. 1389) The American Jobs and Community Revitalization Bill, providing the ability for portfolio mortgages to be safe harbored under Dodd-Frank’s QM rules. Barr’s bill would also move the exam cycle for most banks from a twelve month cycle to an eighteen month cycle. We also learned about the Financial Institution Exam Fairness Bill (S.774), under which an appeal process for issues with exam findings would be established. I envision a day when we go to Washington, provide sensible solutions to issues, enact them into law and fly home knowing that all is right in the world of Kentucky banking. However, these things take time, money, effort and patience. This will be a long, sustained battle, but the KBA’s recent efforts have positioned the industry well to move forward. I think we are at the beginning of a cycle when we will have success making things better!
This year, however, the trip to DC left me guardedly optimistic as the agencies and our elected officials acknowledged the need for changes to help the community banks. While there is no hope for a repeal of Dodd-Frank, there are opportunities to make substantive changes.
Don’t Forget to Register for the Inaugural Chairman’s Cup. July 10th, 2015 Elk Creek Hunt Club, Owenton, KY Contact Yvonne Savage at ysavage@kybanks.com for details April 2015 | 4
Kentucky Supreme Court Protects Bank’s Rights As Assignee Of Subdivision Developer by M. Thurman Senn The recent “Great Recession” has resulted in numerous loan defaults by borrowers engaged in the development of new housing subdivisions. The developer in such a project typically will have recorded deed restrictions governing the use and development of the subdivision, and those deed restrictions will grant various powers and rights to the developer. A typical negotiated resolution of such a default will include the developer deeding to the bank (or an OREO affiliate) ownership of the land under development. The deed-in-lieu of foreclosure paperwork often will include some type of assignment of the developer’s rights under the deed restrictions. At issue in Your Community Bank v. Woodlawn Springs Homeowners Association, Inc. was a dispute over whether the bank succeeded to the developer’s right under the deed restrictions not to pay homeowner assessments on subdivision lots that it owned. The Kentucky Supreme Court examined both the language of the deed restrictions and the document assigning the developer’s rights to the bank and concluded that the two documents gave the bank lender the right not to pay homeowner’s assessments. Regarding the deed restrictions, the Court noted that the definition of “Developer” expressly included “any person, corporation, association or other entity to which it [the original developer] may expressly assign its rights … under these Restrictions.” Regarding the deed-in-lieu of foreclosure, the Court noted that the transaction documents included a “written Assignment and Assumption of Developer Rights”. Taken together, these documents were “unequivocal” and plainly established that “the Bank
shall receive the rights, interests, and obligations of the Developer.” Based upon this, the Kentucky Supreme Court directed that the homeowner’s association be enjoined from enforcing the fee provisions against the bank and be directed to remove all liens asserting unpaid assessments. The Kentucky Bankers Association filed an amicus curiae brief in support of the bank in the case. This assistance is proof of the importance of your trade association. The case also highlights the importance of a lender reviewing the deed restrictions for a subdivision which it is contemplating financing. The lender should determine if the deed restrictions expressly allow the borrower/ developer to assign and mortgage its developer rights. When the lender is enforcing its mortgage, it should consult with competent counsel to determine if a deedin-lieu of foreclosure or even the foreclosure judgment will transfer developer’s rights. A related question is whether the successor to the developer will assume the developer’s obligations under the deed restrictions. Careful analysis of this is also required to protect the bank from assuming liabilities that it did not anticipate. Finally, the Woodlawn Springs case involved subdivision lots and not condominium units. There are specific statutes in KRS Chapter 381 addressing payment of maintenance fees and developers rights in a condominium regime which may lead to a result that is different from that in the Woodlawn Springs case. Every day, the lawyers at M&P are involved in helping banks and other lenders understand and address the legal risks they face with real property collateral. Please contact one of our offices to learn more.
M&P is a leading banking and finance law firm representing financial institutions, businesses and individual clients throughout Kentucky and Indiana. M. Thurman Senn is of counsel at Morgan & Pottinger, P.S.C.
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STRAIGHT TALK DIS CONNECT We had the pleasure of taking twenty-five Kentucky bankers to Washington a couple of weeks ago. It always seems to be the best trip of the year for various reasons - one being the camaraderie that is established among the bankers. We visit all the regulatory agencies, the ABA, and our Congressional members. If you have questions about anything to do with government relations, this trip provides an opportunity to learn. However, over the last couple of years I have noticed a distinct difference in the way our regulators deal with bankers. It used to be on the razor’s edge of controversial but always civil, now it has moved into the realm of patronizing. They are always nice and very polite and ask for any comments or questions that the bankers have (the ritual rigmarole one would expect). When they receive questions, they respond in one of two ways: “I will look into that and get back with you,” or “No, that would never happen.” The first indicates that you have hit a sore spot, and they don’t want to talk about it, while the second indicates the worst of all answers, the DISCONNECT.
was intended to be handled. Whatever happens to that knowledge I never know because the examiners never change (and neither do the Washington bureaucrats for that matter). I guess it is just too much for them to imagine that someone wouldn’t do exactly what they say. The solution is simple. Before anyone can be hired in Washington, they must spend time working in the real world. This includes managing people in genuine, business situations which they will regulate one day- but not before experiencing the ins and outs of everyday business. Just as mine inspectors should have to work in a mine, a bank examiner should have to work in a bank. A health care representative should have to work in a hospital and so on, not the make believe world that they operate in, but the real world outside the Potomac. WOW, just imagine if all the examiners and lawyers from CFPB, OCC, FDIC, and the Fed actually had to know the business that they were regulating! What a beautiful world that would be… almost a fairy tale world.
The DISCONNECT is when Washington intends for a regulation to be handled one way, and the examiners handle it in a completely different way. This confuses bureaucrats because they don’t understand the “rule of rumors.” When I was in graduate school, we played the rumor game. One person whispers a short, succinct fact into the ear of the first person in the first row. They then pass the fact along by whispering into the person’s ear next to them and so on and so on until you reach the last person. When the last person tells what they were told it sounds very little like the original fact. This is caused by people hearing the same thing in different ways then passing it on the way they heard it. Washington is always stunned to hear that an examiner is treating a certain regulation differently than the way it
Let me know what you think: bcassady@kybanks.com April 2015 | 6
Emerging Leaders class of 2014 featured left to right: Justin Augsback, Max Mitchell, Melissa Banta, Jamie McCune, Jarrod Orr, Thomas Richards (not pictured: Jona Lee Moore)
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MY TWO CENTS PLUS SOME We Went to DC ...at Least the Weather was Nice Last month the KBA took its annual trip to Washington, DC to visit with our Senators, Congressmen, and the Federal Banking Regulators. As always, it was an interesting trip and wonderfully coordinated. But, alas, it was also not as enlightening as we had hoped. Let’s start with the fun stuff. Typically, we stay at the Mayflower. This year, Yvonne shook it up a bit and coordinated our participants from The Hay-Adams, one of Washington’s premiere historic hotels. We had our briefing reception, on March 15 (Sunday evening), in the hotel and started and ended our days from the entrance of the hotel, overlooking the White House. The view was beautiful, and our group was able to go to the top floor for photo ops with the White House in the background. The meetings began bright and early Monday, March 16th, with the first meeting at the ABA offices. ABA staff briefed us on their, and other, state banking associations’ legislative activities concerning the topics we considered most important, such as regulatory relief, survival of traditional banks, cybersecurity and data breach, credit union issues and Farm Credit System. The ABA stressed as Ballard has, that the agencies and legislators are not interested in hearing how difficult it is for community banks to comply or compete. Instead, they need to hear how the burdens are impacting bank customers and our ability to serve those customers. As always, the ABA brought in several staffers to provide summaries and answer questions regarding national efforts and collective states’ efforts, which allows us to tailor our legislative meeting to complement consistently. After the ABA, we met with U.S. Treasury representatives. Our meeting was with Amias Gerety. Strikingly, he said multiple times that the Treasury was “satisfied with the architecture of the Dodd-Frank Act.” He indicated that the “architecture” was built on three principles: manage big bank failures to avoid catastrophe; manage the risks associated with derivatives; protect consumers from bad actors. Of course, we pointed out that traditional banks had nothing to do with these problems and the fixes hit us. As far as “architecture” goes, it seems we needed a well-made boat to weather the high and low tides and April 2015 | 8
storms. Instead, they built us a house on the beach that is so fortified and weather proof that there is no adaptability left for changes in tide. If the water level rises too high, we are stuck. Disturbingly, the Treasury expressed their confidence that the regulators are listening and used as an example the fact that the CFPB continues to modify their regulations. As we pointed out, these changes, even if they are improvements, are just one more layer to manage AND offers no assurance as it can be changed again whenever the agency decides to do so. We left the Treasury meeting and met with the OCC Several years ago, the OCC began organizing their meetings with state banking associations as open discussion round tables. Several key OCC representatives are scattered among bankers at a “roundtable.” After introductions, they opened the discussion for questions that we had for the OCC. The OCC assured us that they did tailor examinations to the complexity of the bank being examined, as far as they are able under the law. Any other variation would have to be authorized by Congress. The OCC further defended their examiners by indicating that they are properly trained and consistent in the message. However, the OCC representatives present for the meeting were not familiar with the integrated disclosures and were surprised that it was of concern to our members. The OCC requested that our members take the time to comment fully on the 10-year EGRPRA review. This is a legislative mandate that regulators report every 10-years on outdated, unnecessary or unduly burdensome regulations. http://egrpra.ffiec.gov/ From the OCC we visited with the FHFA. Since this is not a prudential regulator, the meeting is always informative about programs offered, rules etc. Specifically, they discussed the Seattle/Des Moines FHLB merger, which was the first voluntary FHLB merger ever in its history. They opined that the FHL Banks are facing some of the same problems that traditional banks are, which have contributed to the merger. After FHFA, we returned to the Hay-Adams. Next month… part II of the Washington Trip. Debra K. Stamper dstamper@kybanks.com
Washington DC
Question: Can the bank set daily limits on the amount an individual may withdraw from an ATM? Answer: In the FAQs found on the Treasury’s website at http://fms.treas.gov/directexpresscard/questions.html#3.2, section 4.8 reads: What is the maximum amount of cash I can withdraw from an ATM with my Direct Express® card? Many ATM owners do set limits and you may withdraw up to the maximum amount allowed by the ATM owner. ATM owners' daily ATM withdrawal limits typically range from $200 to $1,000. This same FAQ may also be found at the Direct Express Card website at https://www.usdirectexpress.com/edcfdtclient/ docs/faq.html#17 So, yes, the bank may set maximum daily ATM withdrawal limits. This usually prompts the next question, which is “Can you set a different limit for those pre-loaded government benefit debit cards or other bank’s cards vs. the bank’s own debit cards?” This needs to be discussed with the ATM provider. The bank needs to ask whether the system can differentiate between these cards or whether the ATM software only allows the bank to set a limit across the board for all ATM withdrawals. One other consideration would be if you only restrict certain cards, and not all debit cards, are you going to be singling out a protected class in some way and will that trigger UDAAP or other concerns? I don’t know, but just something to consider as well. It would also be important to review the bank’s agreements with MasterCard and VISA to ensure restricting access does not in some way violate those agreements. April 2015 | 9
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Maximize Human Capital with Workforce Planning As community banks keep up their growing sense of optimism, they remain challenged keeping up with hefty regulatory demands while also trying to take strategic measures to better plan and grow their business and financial results. The core costs associated with current and future results is tied directly to the community banks’ human capital – its selection, its development and its integration with technology. Current regulatory pressures and increased competition, as well as a continued sluggish economy have forced community banks to rethink their operating models. A streamlined and efficient operating model goes hand-in-hand with improved financial results. As a result, many community banks are evaluating staffing levels, organizational structure, level of management positions and succession. To assist in these efforts in succession and workforce planning, the ProfileXT® (PXT) assesses how well an individual fits specific positions in your institution. The “job matching” feature of the PXT is unique, and enables you to evaluate an individual relative to the qualities required to successfully perform a specific position. It can be used throughout the employee lifecycle for selection, onboarding, managing and strategic workforce planning. The PXT is effectively used in many positions in banking, including:
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For information on how our unparalleled industry expertise and insights can help your bank, please contact MCM Financial Institutions Leader Henry Hawkins at 502-882-4490.
For more information on how the ProfileXT® or other talent assessment products can enhance the workforce of your business, please contact HR Consulting Principal Linda Winlock at 502-882-4465.
March 2015 | 11
U.S. Bank Launches 2015 Financial Genius Scholarship U.S. Bank, demonstrating its commitment to financial education, is offering current and prospective college students the opportunity to earn a $5,000 scholarship though the U.S. Bank Financial Genius Scholarship Program (#financialgenius). To participate, applicants are required to complete eight online learning modules that cover key concepts for building financial wellness. “Financial education is essential in building healthy financial habits for life,” said Erica Opstad, vice president and head of financial education at U.S. Bank. “Last year, 15,000 students received critical financial education from U.S. Bank, and 99 percent said they felt ‘better prepared to make financial decisions.’” The program will provide five students with $5,000 to use toward any eligible two- or four-year educational institution. U.S. Bank has provided more than $500,000 in scholarships over the past 19 years. By incorporating financial education into the scholarship process, U.S. Bank helps ensure students are successful both inside and outside of the classroom. Students will complete online learning through Financial Genius for Life, which provides real-world skills and knowledge that everyone can benefit from through EverFi@ Work, a self-paced, online learning platform that covers key concepts for building financial literacy. The 15-minute courses will train and motivate students to make positive financial decisions by teaching fundamentals such as: how a credit score is calculated; the basics of overdraft coverage; and how to avoid identity theft, pay for college, refinance their mortgage, or start a small business. “I’ve benefited not only from the scholarship, but from
the education I received in the process,” said Russell Jew, last year’s scholarship recipient. “It’s rare that you actually receive an education in the process of applying for a scholarship.” Russell won the scholarship in his senior year of high school, and began taking classes at City College in San Francisco in the fall of 2014. He will earn his associate degree in May, making it possible to transfer to a four-year college sooner to pursue a major in chemical engineering. “The scholarship has helped me focus on my studies rather than juggling my schoolwork along with a part time job,” he said. The online application process is open until Sept. 17, 2015 with winners being announced in October. For more information or to apply visit usbank.com/scholarship or follow us on Twitter @usbank_news, #financialgenius. Financial Genius is part of a year-long, multi-faceted program U.S. Bank is making available to college-age students through the U.S. Bank Student Union. “The Student Union encompasses educational tools, interactive events, traditional and social media, thousands of student surveys and peer-to-peer feedback,” said Robyn Gilson, vice president of multicultural strategy at U.S. Bank. “We designed the program by listening to students. They feel uninformed on topics like credit, identity theft or investments, but are interested in learning. The potential for these students is truly unlimited, which is why we are committed to providing students with tools to improve their confidence and skills.”
Compliance Alliance Q&A Question: For adverse action notice purposes, when do we start counting for the 30 day notification period requirement? Does this count begin once the bank makes the adverse action decision or within 30 days after receipt of the completed application? Answer: Regulation B requires that the notice of adverse action be sent within 30 days after receipt of the completed application. Regulation B, section 1002.9(a): 1. When notification is required. A creditor shall notify an applicant of action taken within: April 2015 | 12
(i) 30 days after receiving a completed application concerning the creditor's approval of, counteroffer to, or adverse action on the application; (ii) 30 days after taking adverse action on an incomplete application, unless notice is provided in accordance with paragraph (c) of this section; (iii) 30 days after taking adverse action on an existing account; or (iv) 90 days after notifying the applicant of a counteroffer if the applicant does not expressly accept or use the credit offered.
Building Loyalty with Millenials Through Financial Education With a new year upon us, most banks are evaluating their marketing plans and asking, “What are we going to do differently in 2015?” A key priority for many banks is to find new ways to strengthen their relationship with Millennial consumers. But effectively engaging this savvy, independent and often skeptical generation can feel like a daunting task, especially when the media often paints a negative picture of Millennials’ mistrust of banks. At EverFi, we’ve helped millions of young people build their financial know-how, and we believe there is a tremendous opportunity for banks to use digital education to connect with the “mobile-first” generation of consumers. Our research shows that offering financial education is a highly effective way to engage Millennials, earn their trust, and increase their wallet-share. But in order to effectively connect with this demographic, banks must first understand and adapt to Millennials’ style and embrace their preferred methods of communication. In November 2014, we surveyed hundreds of Millennials on their relationship with their primary bank, and the majority of respondents used words like “transactional” and “boring” to describe this relationship. When asked to rate the relationship on a 1 to 5 scale, the majority of respondents felt completely “neutral.” In a world in which many banks are competing on the same features and brand is a critical differentiator, “neutral” is simply not enough. So what can banks do to strengthen their brand with Millennials and become a trusted source of financial guidance? Our survey revealed that Millennials want help when it comes to managing their finances, specifically, training on how to avoid fees, better mobile tools, and education on relevant products that will help them stay on a budget and manage student debt. In fact, two thirds of respondents said that they would actually like
more communication from their bank if the information provided is relevant, beneficial, and not overly commercial. In order to effectively reach Millennials and provide this financial guidance, mobile engagement is key. According to the Federal Reserve, more than 70% of Millennials have used mobile banking services within the last 12 months, compared to only 40% for the remaining adult population. At EverFi, we see this data play out every day. The vast majority of traffic to our adult education platform comes from a smartphone or tablet. Secondly, Millennials have short attention spans and want on-demand access to information when it fits their schedule, which may be outside of normal banking hours. Peak traffic to EverFi’s financial education platform is between 4pm and 8pm, and 20% of traffic between 10pm and 1am. Banks must focus on providing short, fun and engaging content that can be accessed anytime, anywhere. Lastly, incentives are a highly effective means to get young people to engage with your educational offerings. Our partners have seen huge spikes in user activity by offering scholarships, contests, one-time fee forgiveness, a $25 savings account credit, or other incentives. A key takeaway here is that young people want help when it comes to managing their finances, but it has to be convenient, relevant, and mobile-friendly. This presents an incredible opportunity for financial institutions to become that source of trustworthy guidance for the next generation of customers. In fact, consumers that engage with a company’s educational offerings are 5 times more likely to make a purchase than consumers reached by more traditional advertising campaigns. Millennials expect innovation in banking to come from outside the industry, either from high-tech startups or wellestablished names like Google, Amazon, or Apple. But at EverFi, we’re helping community banks be the source of that innovation. Hundreds of leading banks are using our technology to build privatelabeled financial education campaigns that empower consumers and build their trust and loyalty.
March 2015 | 13
Let your voice be heard ! (without revealing your identity)
By taking our survey you are providing anonymous feedback that will be used to hold regulators accountable. More than 2000 bankers have already participated.
Take a stand. Take the survey.
Take the RFI survey at www.allbankers.org *
*RFI = Regulatory Feedback Initiative
April 2015 | 14
Regulators Know We Are Watching You should have seen the look on the regulator’s faces when we presented them with data that revealed the disparate enforcement of Fair Lending standards in two of the FDIC regional offices. At the time, about 25% of the banks across the country were being criticized for Fair Lending violations, but in these two FDIC regions, almost 80% of the banks were being criticized. Regulators had just heard a barrage of criticism from bankers in those regions angry about Fair Lending, and now they knew why. When we showed them the results from the Regulatory Feedback Initiative survey, it’s unclear what impacted them more, the fact that two of the regional offices were clearly on a warpath on Fair Lending, or the fact that we had the data to prove it. Regardless, within 6 months we watched the survey results as criticism reported in these two regions came back to the national average. Thanks to over 2,500 bankers who have taken the time to complete the Coalition of Bankers Associations’ “Post Exam Survey,” bankers association advocates across the country are now armed with the information we need to fight for the fair treatment of our members. Recently, several executives from state bankers associations were asked to meet with FDIC field examiner supervisors in San Francisco to provide input on what banks are saying about their examinations. We prepared a report from the “Post Exam Survey” database and presented them with the “Overall Satisfaction” of bankers on their Safety & Soundness and Compliance exams. We also identified and shared with them the five most significant issues driving “Overall Satisfaction.” In each category, we presented a comparison of how satisfaction with the FDIC compared with satisfaction with the OCC and the Federal Reserve, and then went on to show them how satisfaction with the San Francisco office compared with the other FDIC regions across the country.
The news was positive in some areas, but fairly negative in others. In the most negative areas, we presented the results according to the years of experience of the examiner in charge. And to no surprise, the most significant challenges were found in those exams conducted by EOC’s with under three years’ experience. We left them with six bullet point recommendations on things they could do to improve banker satisfaction with the examination process, substantiated by the data. Based on the question and answer segment of the presentation, it was clear the examiners were very interested in the results, but we could sense that they were even more startled by the fact that we had access to this amount of detailed information about the examinations. We are convinced that just knowing we are watching and recording what is happening in these examinations will improve the way some examiners approach their job. This is the primary objective of the Regulatory Feedback Initiative, to use transparency to demand accountability and improve the examination process for all banks. This information makes every state bankers association more effective. Not only can we share the aggregated information strategically with the regulatory agencies, we can share it with our members to help them prepare for upcoming examinations. But we can only accomplish these goals if every bank will adopt a policy to take a few minutes after every exam (or visitation) to anonymously tell us what happened. Every year, more and more banks are participating when they realize it is a very small price to pay for such an enormous dividend.
April 2015 | 15
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April 2015 | 16
Take Three Steps to Service-Focused Branches in 2015 by Tim Kopischke Today, when a customer walks into a bank branch, they’re usually not there to deposit checks or make loan payments—those are tasks they can now accomplish from anywhere using mobile technologies. Rather, a branch visit these days entails solving an issue that needs a human decision: opening a new account or discussing such complex products as loans or financial planning. With that in mind, facilities must also evolve from transaction-oriented locations into customer-centric service centers. And building service-oriented branches requires a few specific areas of innovation that provide managers and frontline employees the tools they need to be most effective. The idea is that a bank’s technology should empower staff to see customers the way customers see themselves. And a recent industry study reveals that bank executives understand the importance of enhancing branch operations this year. In CSI’s Annual Banking Priorities Study, 44.6 percent of respondents identified branch optimization as a strategic focus for 2015. This strategy, in fact, is rated as the top focus area in the study, ranking ahead of other such important initiatives as EMV preparedness, mobile banking adoption and social media participation. Bank executives clearly see branch transformation key to success in 2015 and beyond, so the question becomes how to go about it. There are three primary areas through which banks can facilitate a more service-oriented branch: Customer-Centric Views
of places and provide information to employees on profitability, recommended products, transaction and account history and customer service interactions. By creating a companywide tech foundation that is focused on the customer, banks can increase collaboration across all lines of business and build a cohesive understanding of how the various touch points affect the customer relationship. As a result, the entire bank can collectively deliver a consistently great experience throughout the customer lifecycle. Branch Mobility Finally, banks should consider the physical layout of the branch and look for ways to incorporate technology that allows more flexibility. In addition to providing mobile technology directly to the consumer, banks also should leverage tablets and mobile systems to empower employees to move throughout the branch and work with customers in a comfortable setting. By unshackling frontline employees from the counter or desk, they can educate, solve issues and collect data that is directly entered into the core system, eliminating roadblocks to centralized information. Ultimately, for banks to stand out from their rivals, they must look closely at the customer experience and ensure that the technology is mobile and flexible, and supports a service-oriented culture. Tim Kopischke is director of software engineering for CSI. In his role, he serves as chief architect of CSI’s cloud-based core system, and he leads research on emerging technologies and application development trends.
First, institutions should implement tech systems that enable a customer-centric view rather than an account-centric view. Customers see one bank—they don’t recognize, or even care, whether the core system, Internet banking, loan servicing systems and mobile banking platforms are separate; they just want a seamless experience from one touch point to the next. Banks should use tools that can “journey map” customers to gain a complete picture of their experience across all interactions. Banks also should record and monitor customer data to help them optimize the entire customer experience, rather than focusing on isolated touch points. To gain insight, they must study both structured data, like transaction data, as well as such unstructured data as call logs. Strengthening Customer Relationships Next comes the need for systems that can automate customer engagement for frontline employees. Powerful CRM programs can collect customer data from a variety April 2015 | 17
StoneCastle Financial Corp. (“StoneCastle”) is the first public investment company specifically established to invest in healthy community banks. StoneCastle invests in community banks that have experienced management teams, stable earnings, sustainable markets and growth opportunities. StoneCastle provides permanent, nonvoting, efficiently priced passive capital for community banks, both publicly and privately held. If you are considering any of the following: (1) acquisitions, (2) the needed capital to support organic growth, or (3) looking to provide liquidity to shareholders, the StoneCastle team is prepared to review your capital needs and strategic goals at your convenience. Read: Unlocking a New Source of Capital for Community Banks Quick Facts for Banks1 StoneCastle provides permanent, nonvoting, efficiently priced passive capital for community banks, both publicly and privately held StoneCastle’s Investment Criteria: *Eligible Banks -- Bank holding companies, commercial banks and savings institutions; each typically with less than $10 billion of total assets; public and private entities *Instruments -Non-cumulative convertible preferred equity non-cumulative preferred equity, subordinated debt, bank stock loans, convertible trust preferred securities, warrants and, to a lesser extent, common equity
-Quarterly Dividend or Interest Payments
*Typical Investment Size:
-$2 – $15 million, smaller or larger by exception, with maximum pro-forma ownership limited to 24.9%
*Investment Process Timeframe: Typically 3 - 6 weeks; variable by institution and structure For more information, contact Mr. T.W. Shannon at twshannon@premier-consultingpartners.com or (918) 970-4890.
April 2015 | 18
Stock Yards Bank Supports Fund for the Arts As a member of the banking industry, you may have been described as “left brained,” meaning you reason with logical, analytical tendencies. “Right brained” counterparts-for whom subjectivity and intuition top their skills sets- tend to excel at music and art. The decision makers at Stock Yards Bank took this psychology to heart and lead their organization with a cohesive left brain/right brain initiative- placing importance on business inside the bank and civic events outside the bank. In late February, Stock Yards Bank announced a partnership with the Fund for the Arts NEXT! Program. The goal of the NEXT! Program is to prepare the next generation for volunteer leadership roles in the area of Arts and cultural interests, with a strategic focus on strong corporate citizenship. Stock Yards Bank arranged sponsorship for the Special Events Series with plans to encourage bank employee’s attendance at the artistic events. Ushering their own employees to keep a pulse on the community is part of what makes Stock Yards Bank successful. “We have found success for over 100 years, and it’s because we focus on both current needs and the next generation of customers. The arts opens a dialogue – it’s a way for societies to discuss political and economic issues.” said Michael Croce, Director of Retail Banking.
Tina, Anna Helen, Lucia, and Michael Croce featured outside the Cadillac Theatre in Chicago, Illinois.
When asked about his involvement in the Arts, Michael Croce shared a unique story about his path to Arts appreciation. His wife, Tina, originally introduced him to the Arts through plays, museums and performances early in their relationship. As daughters Lucia (16) and Anna Helen (13) developed academically, they migrated towards theatre, art, music, and choir. “The arts is a way to expand learning, and I see this play out with my girls….the Arts sparks dialogue.” Drawing from his firsthand experience with Arts, and the meaningful impact on his children, Croce himself stands as an example of connecting the community through arts support. When his children mature, and impact the economic and cultural community, Arts appreciation will exist in the next generation of leaders.
ABOUT SYBT Michael, Anna Helen, Lucia, and Tina Croce pictured in Bogota, Colombia (South America) visiting family.
Stock Yards Bank made an investment in the community with this partnership. “Investing in the Arts allows us to connect with members of the community at a higher level,” said Croce, “you can’t see people on a business level all the time, you need to connect with them in the community.”
Stock Yards Bank & Trust Co. is a wholly owned subsidiary of Stock Yards Bancorp, Inc. (NASDAQ: SYBT), with company assets totaling $2.2 billion, serving the Louisville, Kentucky, Indianapolis, Indiana, and Cincinnati, Ohio markets. Founded in 1904, Stock Yards Bank has evolved from a small bank serving the Louisville livestock industry to a nationally recognized bank known for exceptional service and financial performance. Our capabilities align well with those of national banks, but our focus has always been building a strong relationship with our customers.
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Proudly Serving KentucKy BanKS for 25 yearS t ax -f ree /t axaBle M uniciPal B ondS • uS t reaSurieS /a gencieS
Bill Barker Toll Free: 800.292.4563 bbarker@rsanet.com
One Riverfront Plaza • 401 W Main St, Suite 2110 • Louisville, KY 40202
Louisville ~ Lexington ~ Cincinnati -KBa a SSociate M eMBer Member FINRA and SIPC • Investment Products Not FDIC Insured • No Bank Guarantee • May lose value.
Mark your Calendar for the 2015 Group Meetings Group 1 Paducah – May 5th Drake Creek Golf Course
Contact Paula Cravens for details. pcravens@kybanks.com
Group 2 Central City – May 6th Central City Country Club Group 4 Bowling Green – May 7th Bowling Green Country Club Group 9 Prestonsburg – May 12th Stonecrest Golf Club Group 7 London – May 13th London Country Club Group 6 Lexington – May 14th Kearney Hill Golf Course Group 8 Northern Kentucky May 19th Summit Hills Country Club Group 3/5 Louisville – May 20th Wildwood Country Club
Stonecrest Golf Club, pictured above, features an incredible view with 700 acres of mountaintop land. Group meetings provide a great opportunity to network with fellow bankers in your area. Join us for legislative updates, industry insights, and golf!
April 2015 | 21
Word on the Street
“My experience in Wisconsin was a confirmation of how well the KBA General Banking School prepared me for the Graduate School. The faculty at the KBA school were not only just as qualified academically, but provided a great foundation upon which to build at the graduate school. In hindsight, the intersession project at KBA was perhaps the single most useful tool I took to Wisconsin. Thank you so much for making the program a great stepping stone for my future career!� Dave Kunze, Vice President/Operations Officer Whitaker Bank
We want to hear your feedback on KBA events, seminars, schools, and services. Tell us how you feel. Contact awhite@kybanks.com April 2015 | 22
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April 2015 | 23
Shedding Light on the Farm Credit System, America’s Least Known GSE Two new board members and new chairman at FCA On March 9, the Senate confirmed two new members to the Farm Credit Administration’s (FCA) board of directors. Dallas Tonsager will assume the board seat now held by Jill Long Thompson, the FCA’s outgoing chairman and CEO. Tonsager’s appointment will expire in May 2020; he previously served on the FCA board from 2004 to 2009. The Senate also confirmed Jeffrey Hall as an FCA board member for a term expiring in October 2018. Hall, who replaces Leland Strom, previously served on the staff of Senate Majority Leader Mitch McConnell. Ken Spearman, the third FCA board member, has been appointed the
on top of CoBank’s $350 million loan last June to Frontier Communications and its $725 million loan to Verizon in February of last year. Rep. Mulvaney stated that “while lending to similar entities is permissible, I fail to see how a large, publically traded telecommunications company is similar to a small, rural telephone cooperative . . . I do not believe they meet the letter or spirit of the statute as a similar entity to which CoBank may lend . . . CoBank should have exercised its discretion not to commit to loans to such entities. Large, corporate banking transactions with access to global financial markets are best left to the private sector, not to taxpayers.” [underlining in the original] It will be interesting to read Long Thompson’s reply, or Spearman’s, if Long Thompson kicks the can to him. Interestingly, Mr. Mulvaney is not a member of the House Agriculture Committee, but he is a member of the Financial Services and Government Reform Committees. Each of those committees should be concerned about the extent to which CoBank is lending outside the agricultural sector of the economy. CoBank overreaches, again, in lending to investor-owned utility
FCA’s new chairman and CEO, succeeding Long Thompson in that position; his term will expire in May 2016. One hopes that the two new FCA directors, and Spearman as FCA chairman, will demonstrate a greater concern about the FCS lending outside the scope of its congressional charter than was expressed by Long Thompson and Strom. Time will tell. CoBank loans to investor-owned utilities dismay Rep. Mulvaney In a March 2 letter to FCA chairman Long Thompson, Rep. Mick Mulvaney of South Carolina stated “how dismayed I was to learn” of loans CoBank made in January to two large, investor-owned telecom companies – $225 million to U.S. Cellular and $200 million to AT&T. Those loans pile April 2015 | 24
CoBank has overreached, again, when, on March 10, acting as a co-syndication agent, it participated in a $450 million unsecured revolving credit facilities for the California Water Service Group (CWS). CWS is an investor-owned, New York Stock Exchange-listed company providing “regulated and non-regulated water service to approximately 2 million people in more than 100 California, Washington, New Mexico, and Hawaii communities.” Given its size and financial strength, CWS certainly does not need to tap taxpayer-subsidized credit provided by CoBank, which probably would argue that under the Farm Credit Act it can lend to CWS because as a water utility CWS has activities that are “functionally similar” to the cooperatively owned water utilities that CoBank is authorized to lend to. However, this loan to CWS, like the $1.5 billion of CoBank loans to investor-owned telecom companies that Rep. Mulvaney questions, clearly stretched congressional intent with regard to the FCS’s lending authority. Questions that Sen. Pat Roberts, chairman of the Senate Agriculture Committee, raised at the confirmation hearings for Tonsager and Hall are an additional indication that members of Congress are increasingly concerned about FCS lending that goes beyond congressional intent. The FCS, and CoBank in particular, should worry where its lending overreach could lead.
FCS’s 2014 financial results The FCS has finally published its 2014 financial statements, almost two weeks later than usual. FCS’s aftertax profits in 2014 reached a record level – $4.72 billion up1.8% over 2013 as average loans outstanding in 2014 rose 6.7% above 2013’s average. Due to a 14 basis point decline in net interest spread, to 2.50%, the FCS’s net interest income for 2014 was only 1.9% higher than in 2013; that modest increase carried through to the FCS’s bottom line. The FCS attributed the decline in net interest spread to “competitive pressures, greater average loan volume in lower spread lines of business and a lesser amount of debt being called;” i.e., debt that was refinanced at lower interest rates. The FCS’s tax bill for 2014 was the same as 2013 – $221 million – which means its overall tax rate
dropped slightly, to 4.47% from 4.55% in 2013 and 5.12% in 2012. CoBank, though, accounts for most of the FCS’s tax liability – $162.9 million in 2014. For the rest of the FCS, its effective tax rate has been declining, from 1.76% in 2012 to 1.61% in 2013 and to 1.50% in 2014. The FCS remains strong financially, reflecting both the continuing strength of the farm economy and the FCS’s continuing ability to use its favorable tax and GSE status to cream-skim the stronger agricultural and utility credit risks. FCS capital remains at an elevated level – 16.2% of total assets of $283 billion at the end of 2014 compared with 16.3% at the previous year-end. Credit quality improved, with a decrease of $303 million in nonperform-
ing loans and a $66 million decrease in other real estate owned. The FCS’s allowance for loan losses at the end of 2014 equaled 71% of total nonperforming loans. The FCS is not without its warts, though. A financial restatement still has not been published for FCS Southwest, the FCS association serving most of Arizona that is being forced into a shotgun merger with Farm Credit West, as reported in last month’s FCW. According to the FCS’s Annual Information Statement for 2014, Southwest has had to add $47 million to its allowance for loan losses and charge off $42 million of loans. Whether Southwest was solvent at the end of 2014 will not be known until its restated financial statements are published. My Treasury FOIA request may eventually bear fruit FCW readers may remember that I filed a Freedom of Information Act (FOIA) request with the Treasury Department on May 8 of last year to obtain all documents related to the creation of a $10 billion line-of-credit the Farm Credit System Insurance Corporation (FCSIC) obtained from Treasury’s Federal Financing Bank on September 24, 2013. That line of credit expired on September 30, 2014; it has since been renewed for another year. As I reported in the December 2014 FCW, I have persevered since last May in trying to obtain these documents. As recently as March 11, I was advised by a Treasury official that once she completed her review, “they will be reviewed by the [Treasury] General Counsel . . . I am going to try to get the documents out to you within the next two weeks.” Of course, I was told the same thing months ago. It will be interesting to see how informative these documents are given that this line-of-credit apparently was created without Congress’s knowledge or consent.
April 2015 | 25
Bankers on the Move Field & Main Bank is pleased to announce that Jennifer Drennan has been promoted to Senior Vice President and Chief Retail Officer. Drennan oversees corporate retail, customer service, products and services, and customer experience. Drennan is a graduate of Murray State University, where she earned a bachelor’s in business administration in 2008 and a master’s in business administration in 2011.
Field & Main Bank is pleased to announce that Matthew Hunsaker has been promoted to Vice President, Finance and is responsible for financial modeling and reporting, streamlining finance operations, and special bankwide projects and initiatives. Hunsaker graduated summa cum laude with a bachelor’s degree in accounting from the University of Evansville in 2009.
Field & Main Bank is pleased to announce that Wanda Mayer has been promoted to Senior Vice President of Operations. In her new position, she is responsible for strategic leadership and management of multiple operating units, as well as performing critical activities that support the day to day operations of the organization.
Field & Main Bank is pleased to announce that Sara Cox has been promoted to Vice President, Compliance Manager, and is responsible for managing the compliance department. She is a Certified Community Bank Compliance Officer through the Independent Community Bankers of America.
First Capital Bank would like to announce that Janee Smith was promoted to Vice President, Quality Control.
First Capital Bank would like to announce the promotion of Richard Siegel to Vice President, Chief Credit Officer.
First Capital Bank would like to announce the promotion of Bob Bumann to Assistant Vice President, Credit Underwriter.
(Not Pictured) Field & Main Bank is pleased to announce that Melissa McCormick has been promoted to Administrative Officer. Previously, she was with BankTrust Financial for more than two years, serving as Administrative Assistant, Human Resource Manager and Marketing/ Advertising Director.
Gary Clifton, President of Kentucky Home Bank, was named the recipient of the 2014 Ron Filkins Volunteer of the Year award. Clifton has volunteered and devoted his time to a long list of organizations. He praised others who take time to volunteer in the community and accepted the award on behalf of them and the organizations they support. “We have so many citizens here who are willing to give their time, treasure, and talent to make this a better place to live,” said Clifton. “The generous spirit of the community is exemplified by the quality of life we have here.”
Want to announce a promotion? Recognize a fellow banker? Send all photos and announcements to Angie White at awhite@kybanks.com
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Bankers on the Move Central Bank Chairman, President and CEO, Luther Deaton, Jr., has announced that Elizabeth Johns has joined Central Bank as Vice President, Personal Trust Officer. Elizabeth joins Central Bank with a background in wealth management and compliance. She is a graduate of the University of Notre Dame where she received a bachelor of arts degree in English and French.
Central Bank is proud to announce the promotion of Mr. Ashley Weir to Vice President, Mortgage Lending. Mr. Weir joined Central Bank in 2008 as a Mortgage Lending Officer. Ashley holds a degree in business administration from the University of Kentucky. He currently works out of the Georgetown market.
Central Bank is proud to announce that R. Scott King has joined Central Bank as Vice President, Senior Portfolio Manager. Mr. King, who holds the prestigious designation of Chartered Financial Analyst®, brings 25 years of banking experience to his new position.
Community Trust and Investment Company is pleased to announce that Abigail L. Blair has joined Community Trust and Investment Company as a Wealth Insurance Coordinator. Abby Blair graduated from Mt. Notre Dame High School in Cincinnati, Ohio. She earned a Bachelor of Science in Business Administration degree, with a concentration in Management, from Morehead State University in Morehead, Kentucky.
Central Bank is proud to announce that Joshua Lehman has joined Central Bank as Assistant Vice President, Commercial Lending Officer. A native of Crestview Hills, KY, Josh is a graduate of the University of Kentucky where he received a bachelor’s degree in Integrated Strategic Communications.
Community Trust and Investment Company is pleased to announce that Edwin Riddlebarger has joined as Vice President, Wealth Insurance Advisor. Eddie works with senior management to create opportunities to present life insurance solutions to customers, as well as to non-customers.
Central Bank Chairman, President and CEO, Luther Deaton, Jr., has announced that Susan Simmons has joined Central Bank as Director of Human Resources. Susan brings nearly thirty years of experience to her new role. She achieved the prestigious designation of Senior Professional in Human Resources, as well as SHRM-Senior Certified Professional. Susan also serves as the current Chair of the Kentucky Society for Human Resource Management.
Central Bank announced that Brett Blackwell has joined Central Bank as Senior Vice President, Senior Market Lender. Brett brings more than ten years of experience in the banking industry to his new role. He will be working in the Northern Kentucky area.
Central Bank Chairman, President and CEO, Luther Deaton, Jr., has announced that Jeff Murphy has joined Central Bank as Vice President, Business Development. A native of Owensboro, Jeff received his B.A. in Corporate & Organizational Communication from WKU. Jeff joins Central Bank with nine years of experience in consumer and business banking.
Ron Carmicle, Chairman of the Board, announced the selection of Mark F. Wheeler to become President of Central Bank of Jefferson County. He will join the bank in early April, 2015. Carmicle noted, “Mark has excellent banking experience and we are very excited he will be joining our organization. Our bank is poised for growth in Kentucky’s largest banking market and we are confident his leadership and market knowledge are just what we need to continue our success.”
Central Bank Chairman, President and CEO, Luther Deaton, Jr., has announced the promotion of Jeanie Gammon to Vice President, Mortgage Lending. Ms. Gammon has been with Central Bank since 2001 and has history in mortgage lending and marketing. Jeanie is located in our Jefferson County market.
Field & Main Bank is pleased to announce that David Sartore has been promoted to Executive Vice President and Chief Financial Officer. He previously served as Controller, Senior Vice President.
April 2015 | 27
Powerful Connections Apply Today for GSB
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Upcoming Classes Graduate School of Banking - August 2-14, 2015 Bank Technology Management School - April 12-17, 2015 Bank Technology Security School - October 11-16, 2015 Human Resource Management School - April 19-24, 2015 Financial Managers School - September 13-18, 2015 Bank Management Forums - Ongoing Throughout the Year Online Seminar Series - Ongoing Throughout the Year
Visit gsb.org to request a catalog or for information on curriculum, student profiles, scholarships and more. Power your career … apply now for GSB!
April 2015 | 28
Educating Professionals, Creating Leaders
“The faculty and staff are the best in the industry and truly care about your success in the GSB program. The classes and projects are challenging and rewarding. My GSB experience helped me meet my career goals.” - Mary Young Senior Vice President, The Cecilian Bank Elizabethstown, Kentucky
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More DC Photos
Jamie McCune snagged a Wolf Blitzer “selfie” following the Washington Wizards NBA game with the KBA Emerging Leaders
Above: “Lady Liberty and the Eagle” statue
Left: The Washington Monument aglow at night standing just over 555 ft tall
Above: The Capitol building under construction, but still regal and inspiring Above: Inspiring view of the White House at night
April 2015 | 29
Facts You May or May Not Know About the Kentucky Derby Impress your friends with little known trivia about the most exciting two minutes in sports. Mint Julep Consumption Each year, about 120,000 mint juleps are consumed at Churchill Downs. The official drink of the Derby is traditionally made with Kentucky bourbon, simple syrup, crushed ice, powered sugar and mint. The Fastest Horse The fastest horse in Derby history was Secretariat, who in 1973 finished the 1 ¼ mile distance race with of a time of 1:59.40. Only two other horses in Derby history have crossed the finish line in under two minutes, according to ESPN. The “S” Name There have been 19 winning horses in the Kentucky Derby whose names began with the letter “S.”
Record-Breaking Wagers In 2012, the Derby set a record for wagering with more than $187 million bets on the races (combined total from both on and off-track bets). In 2011, the total was about $165 million, according to Churchill Downs data. The Rose Garland Each year, over 400 red roses are used in the rose blanket draped around the winner of the Derby. In 1925, a columnist dubbed the Kentucky Derby the “Run for the Roses,” according to KentuckyDerby.com. The Smallest Race In 1892, only three horses ran in the Derby, making it the smallest field in the race’s history, CNN notes.
Photo credits: Associated Press, Jamie Squire, Al Bello- Getty images, Matt Goins/Lexington Herald-Leader Fun Facts provided by ESPN and WDRB Eric Crawford
April 2015 | 30
Debt Capital Markets
The Cantor Fitzgerald Portfolio Manager Regulators have always stressed that institutions’ executive and senior management need to be knowledgeable of balance sheet risks and fully capable of communicating and managing these risks. For decades, at many institutions the “in-depth” institutional risk discussions centered on the loan portfolio (for good reason) with investment portfolio conversation limited to the CFO/Treasurer/portfolio manager (in many cases the same person) offering a few canned reports to the ALCO committee. Times are different now – institutions have to be more engaged with investment portfolio risk management, and, they must develop a process that enhances a manager’s capabilities while still being efficient. Specifically, a CFO/Treasurer/portfolio manager must be able to source information and analysis that allows him or her to thoroughly understand and communicate the characteristics of the institutions’ investment holdings as well as the risk presented by these holdings – all without increasing their workload. Cantor Fitzgerald has created an on-line investment management portal that offers a CFO/Treasurer/portfolio manager the ability to roll up their sleeves and fully evaluate their investment holdings. The Cantor Fitzgerald Portfolio Manager provides maximum flexibility, an easy-to-use interface and functionality that was designed specifically for the carry-based portfolio manager: The “Portfolio Overview” module allows users to review the risk characteristics of their holdings – from a portfolio-, sector-, sub-sector or security-level perspective. A “drill-down” tool allows multiple grouping options and provides allocation, rate shock and cash flow details on the specified sets. The “Portfolio Explorer” module provides true inquiry-driven functionality. Searches can be performed at the cusip or sector level, or users can create ad-hoc aggregations produced through a large combination of sort options. Results can be modified and saved, are exportable and offer “click-through” functionality. The “Toolbox” is the analytical module, offering single security analysis, a swap model and a leverage model. The swap and leverage tools allow a user to evaluate the economics of a buy/sell or a buy/borrow transaction. Importantly, the results include more than just transaction analysis; using the “Compare” tool, users can evaluate the benefits of different proposed transactions on a side-by-side basis while the “Before/After” analysis shows the impact of a proposed transaction on the existing portfolio. No longer can the investment portfolio be managed simply by looking at static reports with multi-colored graphs. In fact, increased regulatory scrutiny combined with generational lows in interest rates have created the perfect risk storm for asset managers – an environment that requires increased awareness, depth of knowledge and creative tools to appropriately manage investment portfolios. The Cantor Fitzgerald Portfolio Manager serves as a complete risk management kit for carry-based portfolio managers and can be an important part of the institutional asset management process. Please contact your Cantor Fitzgerald representative for a walk-through of this important new product. Disclosures While care has been taken in the preparation of the material presented herein, Cantor Fitzgerald & Co. and its affiliates (collectively, “Cantor”) does not make any representations or warranties, express or implied, s to the accuracy, completeness, or appropriateness of the information contained herein. This document may contain forward-looking statements, which give current expectations of future activities and performance. Any or all forward-looking statements in this material may prove to be incorrect and such statements may be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Cantor does not undertake any obligation to revise such forward-looking statements to reflect the occurrence of unanticipated events or changed circumstances.
1 2015 | 31 April
UPCOMING EDUCATION EVENTS & SEMINARS Call Report Seminar May 19 Bowling Green May 20 Lexington Bank Security Seminar Identity Theft: aka Social Engineering May 28 Louisville General Banking School May 31 – June 5 Louisville Regulators Forum June 18 Bowling Green June 19 Lexington Human Resource Seminar June 25 Louisville BSA/AML School - Pegasus Program July 8-9 Lexington
April 2015 | 32
Personal & Business Tax Return Analysis Seminar August 11 Bowling Green August 12 Lexington New Accounts - Pegasus Seminar August 17 Morehead August 18 Hazard August 19 Somerset August 20 Elizabethtown August 24 Paducah August 25 Bowling Green August 26 Lexington Internal Audit Seminar August 19 & 20 Elizabethtown Lending Compliance School August 24 - 28 Louisville