Palmetto Banker Spring 2013

2009 Park Street, Post Office Box 1483 Columbia, S.C., 29202-1483 Phone: 803.779.0850; Fax: 803.779.0890 Web: www.scbankers.org

Contents

Chairman

F. Richard “Rick” Redden, III Wells Fargo Chairman-Elect

Art Seaver Southern First Bank, N.A. First Vice Chairman

H. Blake Gibbons, Jr. The Citizens Bank Treasurer

David M. Lominack TD Bank Immediate Past Chairman

S.C. Bankers Respond to DOR Breach

Mulvaney Named to Key House Committee

Page 8

Page 29

Sharon W. Bryant First Citizens

President’s Message

5

Plan Ahead When it Comes to Crisis Communications

6

Linda W. Parker

SCBA Honored by United Way

9

Executive Vice President, CFO

Central Banking, South Carolina Style

10

Executive Vice President, Employee Benefit Trust/SC Bankers School

2013 SCBA Young Bankers Conference

14

Teresa D. Taylor

2013 SCBA Legislative Reception

17

Preview: 113th SCBA Annual Convention

18

Taxes, Credit, Education—A Look Back at The 1913 SCBA Annual Conference

20

Importance of Intangible Value in Real Estate Loans

24

Good Samaritans

26

M. Caroline Sheorn

Meet Your Legislator—Greg Delleney

28

Administrative Assistant

Bank News

31

Director, Marketing and Communications; Editor, Palmetto Banker

Personal Transactions

32

R. Kevin Dietrich

Calendar

35

New Associate Members

37

SCBA Staff President and CEO

Fred L. Green, III Executive Vice President/COO/BankPAC Treasurer

Donna S. Taylor

Senior Vice President, Conventions/Conferences

E. Anne Gillespie Senior Vice President, Legislative & Regulatory

A. O’Neil Rashley, Jr. Vice President, SCBA Services, Inc.

Carolyn Laffitte Director, Government Relations

Amber Setzler Barnes Director, Advertising & IT

Bonnie Nelson

The Palmetto Banker is a publication of the South Carolina Bankers Association. The magazine exists to serve its members by communicating news of interest, education and SCBA activities. Items from members are welcome, however the editor reserves the right to refuse copy. With the exception of official announcements, the SCBA disclaims responsibility for opinions expressed and statements made in articles published in the Palmetto Banker.

Cover photo: Executives Jason Starnes, Coney Arnette and Parrish Little, all key members of the First Citizens team that responded to the DOR database breach, are shown outside the bank’s downtown Columbia office. Photo by Zach Sykes.

3

President’s Message

Good or Bad, Crisis Can Represent Opportunity

S

outh Carolina bankers have seen their fair share of crises over the past few years; the worst economic downturn since the Great Depression, a housing bubble and budget uncertainty at state and local levels are among issues they’ve faced during the past half decade.

So when it was revealed last October that millions of state residents’ financial information – including bank account numbers – was compromised as a result of a security breach at the South Carolina Department of Revenue, some outsiders may have wondered just how the state’s bankers would respond.

Thanks to a good bit of hard work and a willingness to approach the challenge with an open mind, I’m proud to say that our bankers have handled the situation with poise and composure. They’ve worked to uphold longstanding customer confidence by taking steps to add increased security to at-risk accounts and by seeking to identify potential fraudulent activity related to the breach.

The latter is being done most visibly through the newly devised Bank Security Watch, a SCBA-developed forum that allows banks to post details of transactions believed to be connected to last year’s breach. Institutions are able to note watch for problematic transactions.

The idea is that if someone is misusing bank account information collected through the DOR hacking, banks will be able to catch it earlier, before a criminal has had the chance to defraud numerous individuals or institutions.

That the South Carolina banking community has responded promptly to the DOR breach doesn’t surprise me.

Our banks have long sought to provide a safe and secure environment for customers and businesses to place deposits and take out loans.

In reality, South Carolina’s banking industry had but a handful of options available after it was revealed that the account information of a sizeable percentage of state residents had been compromised. Bankers could have put their collective heads in the sand and attempted to ignore the issue, they could have taken a wait-and-see approach or they could have been proactive.

The first two alternatives would have opened the door for confused customers to flood bank employees with questions about the wellbeing of their assets, and, potentially allowed fraudsters to pilfer accounts with impunity.

And institutions unable to answer questions about the safety of accounts would have opened themselves up to the possibility that clients would end up taking their business elsewhere.

The desire to be able to provide peace of mind to consumers was one of the principal factors behind the SCBA’s decision to go to court to ask the Department of Revenue to turn over a list of compromised accounts to various banks. By the time letters from the state began arriving in mailboxes informing Palmetto State residents that one or more of their accounts were among those involved in the hacking, South Carolina banks already had a list of which accounts were active and which had been closed.

This gave bankers the chance to inform customers that additional protections were being placed on active accounts that were among those compromised or to tell them that they had nothing to worry about because a closed account can’t be hacked. Either way, customers came away with an understanding that their bank was genuinely interested in their welfare.

The fact is, our industry rarely gets an opportunity to highlight the many good things it does. In addition to the important role banks play in bolstering the economy, we

The fact is, our industry rarely gets an opportunity to highlight the many good things it does. provide financial security and confidence to millions of South Carolinians every day. Unfortunately, though, Palmetto State bankers can get tarred with the same brush as a handful of rogue financiers in New York or London when there’s a major financial scandal.

You never want a crisis like this to occur, but when one does happen it could very well provide that rare chance to highlight the positive. In this instance, bankers showed that they were willing and able to step up and boost security in the face of a potentially unprecedented threat.

John F. Kennedy, who knew a thing or two about handling difficult situations, was noted for employing the following bit of figurative language in numerous speeches: “When written in Chinese the word ‘crisis’ is composed of two characters. One represents danger, and the other represents opportunity.”

South Carolina bankers may not be out of the woods yet regarding the dangers associated with the DOR database breach, but they can hold their collective heads high knowing that they have successfully responded to the opportunity to do right by their customers.

(Fred L. Green is the president and chief executive officer of the South Carolina Bankers Association.)

5 Palmetto Banker

Feature

Hope Not a Viable Plan in Crisis Communications Allison Dean Love Special to the Palmetto Banker

I

n the time of a crisis, will your bank’s integrity, credibility, professionalism and long-term reputation be enhanced or destroyed? Will your loyal customers continue to trust your professional service, responsiveness and your commitment to their financial well-being?

As we’ve seen with the recent S.C. Department of Revenue database breach, crises can occur at any time and at a moment’s notice. Your future success may rest with how well you and your employees respond to a crisis.

No one likes to consider potential calamities or bad news, but the fact is such events can enhance or destroy an organization’s reputation and brand in a matter of minutes.

Preparing for the unexpected is particularly crucial for banks, which have a tremendous responsibility in that they must not only protect customer assets when a crisis arises, but also the wellbeing of their employees and the values, mission and vision of their operation.

While most banks are prepared for such contingencies as robberies or hostage situations, the potential impact from a natural disaster, death of a key employee, employee scandal, security issues and other potential issues, including disgruntled customers spreading complaints through social media, can be far more devastating.

Step one is to assess risks and identify potential vulnerabilities, and then devise a response plan. If something happened could you contact employees, vendors and customers? What if your building or equipment was damaged?

The goal is to create a business continuity plan that protects people and property, allows the bank to resume critical operations, minimizes downtime, remains competitive, preserves reputation and meets obligations.

Timely, accurate and proactive communications are critical during a crisis. Crisis management has evolved into reputation management. Reputation-management strategy should ideally be used continuously, utilizing a pre-emptive approach rather than waiting until a crisis occurs. Remember, perception is reality, and timeliness and honesty are essential.

Consider the following key elements of a crisis communication plan: 



‘No one likes to consider potential calamities, but the fact is such events can enhance or destroy an organization’s reputation and brand in a matter of minutes.’ 

Messages – Facts about the situation and your bank along with actions your team will be taking.

Consider the people needed for the team, necessary technological support, instruction required for team members (such as media training), an area to set up a “base camp,” supplies needed, and funding such as travel expenses.

Thirty years of hard work gone in 30 seconds Reputations can be made or broken in the initial phase of a crisis. Use your head and your heart in developing key messages. As the old saying goes, you’ve only got one chance to make a first impression, so be proactive, be as accurate as possible and be credible. Express empathy and compassion for those impacted, a commitment to open, transparent communications of all pertinent facts along with a pledge to uncovering any mistakes made and actions to make any changes to prevent a similar situation from occurring.

Communicating with the public and stakeholders on a regular basis throughout the crisis can help reinforce customer trust. But it is crucial to remember that the time to prepare a crisis communications plan is when people can think calmly and rationally. A crisis communication action plan will include: an updated list of key contacts, an assessment of processes and a review of the business continuity plan, a review of company messaging (such as sample news releases and facts sheets), and plan testing (including on-camera media interviews and what-if scenarios).

Don’t forget to incorporate social media into the overall crisis communications strategy. Within seconds of a crisis, customers and employees may take to Twitter, Facebook, YouTube and a host of other social media sites. Monitor social media and have one or more employees dedicated to responding, especially to negative comments or posts.

The simplest advice when bad news happens is to tell the truth and tell it fast. Go public with bad news as soon as possible in order to stay ahead of the story. Explain the situation, Teams – Think about who you want to serve as a spokes- take action and talk with the media. Factual, timely media person and ensure you have contact information for all relations will help get your message across. Use trustworthy, members of your team; credible sources who are available, responsive and comAudiences/Stakeholders – employees, customers, venmitted to your bank’s values. Depending on the situation, you dors, media; and See Crisis, next page

6 Palmetto Banker

Crisis may or may not choose to have the CEO on the frontline.

Consider the severity of the situation and whether a news conference is warranted, or whether one-on-one interviews would work better.

Remember to balance the “paranoia” with caring customer service. Key messages points should include concern, commitment and a confidence that your bank is going to weather the storm and remain rock solid. Above all, stay positive but realistic, and don’t be self-serving. Say what you will do next If you fail to plan, you plan to fail and follow up as needed.

Media training prior to a crisis will ensure potential spokesMany resources are available for staff training, including persons are comfortable going into interviews and that they online business continuity planning guides, and professional will be concise and caring in their responses while showing a discussion groups through LinkedIn and Twitter. If your bank commitment to organization values. While you want to addoes not have the in-house expertise to develop a crisis comdress the facts of the situation, it is important to remember munication plan, then hire someone to assist, and sooner the overall impression you want to create. The CEO, spokes- rather than later. person(s) and key operational employees should be trained A crisis for your bank might be a disgruntled customer or a to answer questions such as: customer shot or held hostage during a robbery. It might be the loss of electricity, a flood, technological disaster or securi What is the situation? Have people died or are lives at ty breach. risk?

Whatever it is, your customers and the world will be watch What is the impact of the situation to your customers ing to see how you handle it. Have a written plan of action and/or employees? prior to a crisis that is not just on a shelf for safe keeping.  What could you have done differently?

Plan, plan some more, review your plan, practice and test a  What can be done to ensure the situation never occurs variety of scenarios before a crisis hits. Considering the poagain? tential threats in advance can be the difference in your bank’s  What have you learned? failure or success.

Is an apology necessary? Think about whether your bank A thoughtful approach to crisis management and crisis comcould have liability in the situation. munication will demonstrate your bank’s values in action.

Your attorney might advise you not to speak; however, remember you can win in the law courts and lose in the court (Allison Dean Love is a Columbia-based public relations and of public opinion. communications specialist, and CEO of Allison Dean Love ConConsider the potential damage to your reputation if you sulting, LLC. Her experience spans a range of industries, inchoose to stay silent. Take responsibility, act fast, express cluding banking, insurance, healthcare and nonprofit organiremorse and take action to make the situation better. zation management.)

S.C. Students Turn Out for Banking Careers 101 Session Some 100 students were on hand for the annual SCBA Banking Careers 101, held Feb. 6 at Seawell’s in Columbia.

Students from more than a dozen colleges and universities were on hand, including representatives from USC, The Citadel, Claflin University, Morris College, Presbyterian College and Lander University.

The students were split up into five groups and spent 25 minutes each in five different sessions, each of which focused on an specific area of banking: IT and operations; lending; compliance, credit risk and accounting; management training, retail and investments; and corporate social responsibility, marketing and human resources.

“I definitely learned a lot and enjoyed meeting everyone,” a Winthrop student said. “It was a day to remember as I move forward toward a career in the banking industry.”

Students asked a wide variety of questions during the sessions, ranging from what’s the best way to get into the bank-

ing industry to whether an MBA is necessary to get ahead.

“I think the most important thing you can do is have a positive attitude, whether it be in a banking career or anything else,” said Glenn Buddin, chief executive of Blue Ridge Bank.

“If you’re a teller and someone asks you to look over a loan, do it; banks want people who are willing to learn as much as possible and to understand as much as possible about how the industry works,” he added.

Bankers from institutions with offices all over the state were on hand.

TD Bank was the grand sponsor of the event, and Bank of America, BB&T, Blue Ridge Bank, CresCom Bank, First Citizens, First Reliance Bank, Home Federal Savings & Loan, NBSC and Palmetto State Bank also served as sponsors.

Other banks which sent representatives included SCBT, Southcoast Community Bank, Park Sterling Bank, Security Federal Bank, Wells Fargo and Southern First Bank.

7 Palmetto Banker

Feature

SCBA, State Bankers Meet DOR Breach Challenge Kevin Dietrich Palmetto Banker Editor

M

ore than five months have passed since Gov. Nikki Haley first told South Carolinians that the tax information of millions of residents and businesses had been compromised through a security breach at the S.C. Department of Revenue.

The South Carolina Bankers Association and the state’s bankers have been working practically nonstop since that time to ensure that consumers have been protected from fraud related to the hacking.

Within days of the breach, even as the scope of the incident was still being assessed, the SCBA was in contact with the Governor’s Office, seeking to mitigate risk to Palmetto State residents. The SCBA set up a special cyber security seminar, began legal action that allowed the Revenue Department to turn over data to banks so they could help customers and began work on a fraud-detection forum.

Apple Bankers were just as prompt to act.

“When we realized what had happened at the Department of Revenue, we immediately went into crisismanagement mode with daily briefings to top management and a cross-functional project team to develop our response to customers,” said First Citizens CEO Jim Apple.

“We also aligned with SCBA efforts to reach out to the Governor’s Office and the rest of our industry.”

First Citizens was among many banks that quickly communicated word of the attack to its employees, so they could respond to questions from customers and share the protective measures recommended by the Department of Revenue, Apple added.

Within a short time, SCBA President and CEO Fred Green had testified before S.C. House and Senate committees, explaining to legislators how bankers were working to protect consumers and what additional steps were planned.

“As a member of the SCBA, I am very appreciative of the proactive efforts of President Fred Green and the SCBA staff to inform and protect the member banks and its customers concerning the potential risks of fraud as related to the DOR breach,” said Blake Gibbons, president and CEO of The Citizens Bank.

Scope of the Breach The DOR breach became public on Oct. 26 when Haley and then-Revenue Director James Etter revealed that bank account numbers, social security numbers and other unen-

8 Palmetto Banker

crypted financial information from millions of tax forms filed by South Carolina residents had been stolen earlier in the year. Also compromised was the tax information of thousands of Palmetto State businesses, along with some credit card and debit card numbers.

Within days the SCBA was in contact with the Governor’s Office, helping to identify how the industry could counter attempts by fraudsters to use compromised information.

As state officials prepared to dispatch letters to affected South Carolinians, the SCBA went to court in a friendly action that gave banks information that would enable them to determine which accounts had been impacted.

Circuit Court Judge Robert Barber gave approval for the S.C. Department of Revenue to turn over the bank account numbers of compromised accounts to state banks and credit unions as a result of the SCBA’s suit. Banks were required to request a list of the compromised accounts of their customers from DOR, which nearly every SCBAmember institution did.

By having a list of compromised accounts, each institution would be able to determine which accounts were still active and then add an additional layer of screen, to boost protection from hackers.

“The proactive steps that the South Carolina Bankers

Breach Association has taken to address the database breach is a wonderful example of leadership and partnership,” said David Lominack, Upstate market president for TD Bank. “All member banks are working together to protect customers and the SCBA has been the catalyst to make it work.”

Letters from the state to affected residents went out the week of Christmas, and many South Carolina banks were able to answer questions once customers began calling to inquire whether their accounts were in danger. In many cases, the compromised accounts had long been closed, meaning there was no chance for hackers to siphon funds.

Bankers have also provided consumers with information on how they can better protect themselves.

“Although the bank was not responsible for this security breach, our role as a trusted financial advisor has been to share the S.C. Department of Revenue’s recommended procedures with customers and encourage them to monitor their accounts closely for any unusual or suspicious activity,” said Coney Arnette, senior vice president and branch support services director for First Citizens.

“We have asked customers to visit their local branch or call our customer contact center immediately if they detect any suspicious activity on their accounts,” he added.

ation’s efforts. It was at this meeting that Green first publicly described Bank Security Watch, the SCBA’s frauddetection forum. The following month, Green appeared before a S.C. House committee and was able to provide additional detail on the Bank Security Watch system. The network allows banks to work together protecting accounts identified as having been compromised, Green said.

If a customer reports or a bank detects fraud on a flagged account, banks across the state will be alerted in an effort to keep an eye out for similar attempts.

In addition, the SCBA has been tracking bills introduced in the legislature dealing with identity theft, financial transaction fraud and computer fraud, along with proposed legislation that would defray costs for taxpayers related to the protection of their identities.

The most important of the bills introduced in response to the database hacking is Senate bill 334, a comprehensive bill that would require the governor to develop a protection plan to minimize the actual and potential Lominack costs and effects of identity theft due to the cyber security breach at the Department of Revenue by providing identity theft-resolution services.

Moving Forward S 334 would also provide tax deductions for individuals Around the same time the SCBA initiated court action, it who bought ID theft protection, establish an Identity Theft held a special seminar in Columbia focusing on the dataUnit in the Department of Consumer Affairs and create the base breach. A key aspect of the seminar was a panel of Department of Information Security. bank cyber security experts who offered advice on how “This obviously isn’t something that anyone in the bankSCBA members could better understand the breach and ing industry wanted to have happen, and it’s something how they could reduce their risk and potential risks to we’re going to be dealing with for many years, but it is retheir customers. assuring to know that our industry is ready and able to In mid-December Green testified before a special S.C. step up to the plate when a challenge of this magnitude Senate subcommittee and was able to highlight the Associ- takes place,” Green said.

SCBA Recognized with Gold Award from United Way The South Carolina Bankers Association was recognized with the Gold Award from the United Way of the Midlands on Feb. 5 in Columbia.

The SCBA not only had 100 percent participation among its staff members, but showed a 78 percent increase in giving from the previous year.

“Even though we are a small staff, Bryant we are a mighty force,” said SCBA

Senior Vice President Anne Gillespie.

“We were recognized with many of our area’s largest companies,” she added. “As you can see, every contribution helps.”

First Citizens’ Executive Vice President Sharon Bryant served as emcee and co-chair of this year’s ceremony, which was held at the Marriott.

The Gold Award is given to acknowledge that an organization's gifts reflect 100 percent of its giving potential.

The South Carolina Bankers Association has been a longtime supporter of the United Way.

9 Palmetto Banker

Feature

Central Banking, South Carolina Style: 1813-1868 Kevin Dietrich Palmetto Banker Editor

A



full century before the Federal Reserve System was created, South Carolina embraced a central  banking system of its own, creating an institution that functioned as a quasi-public arm of the state govern-  ment for more than 50 years.

The Bank of the State of South Carolina, chartered in 1812 with state assets, acted as an unofficial subsidiary of the state Treasury. It handled tax money the state brought in, and, like many 19th century banks, issued currency.

However, unlike its competitors, the Bank of the State also became a political hot potato, with high-profile state politicians battling one another over whether to rein in or even shutter the institution at various points during its decades of operation.

In the end, it was the ravages of the Civil War, ensuing bankruptcy and Reconstruction that finally claimed the institution, which was formally closed by the Legislature in 1869. Yet even today, the Bank of the State of South Carolina remains in the news.

Currency issued by the bank during the War Between the States, initially held to be worthless after the conflict, were later reimbursed at 50 cents on the dollar following the end of Reconstruction. The plan was to destroy the bills once they’d been turned in, but instead the notes sat in the basement of the Statehouse for more than 80 years before being rediscovered in the 1960s.

After being moved to the S.C. Department of Archives and History, the agency began selling the notes off to collectors a few years ago, and continues to do so today. By doing so, it can be said that the Bank of the State continues to generate revenue nearly 150 years after its closure.

Still, few South Carolinians today know much about one of the Palmetto State’s original economic development tools.

In the Beginning The Bank of the State came about during a time when there were few financial institutions operating in South Carolina, or the nation. The first bank to be chartered in the Palmetto State was the original Bank of South Carolina in 1801. By 1812, the state had four private banks in operation, all based in Charleston and all primarily interested in short term commercial lending, with little interest in making longer-term loans to planters, according to J. Mauldin Lesense’s 1970 work The Bank of the State of South Carolina: A General and Political History.

Among the factors that drove lawmakers to authorize the creation of a state bank:

10 Palmetto Banker

South Carolina was reliant on agriculture, but planters had trouble securing funding because existing banks concentrated on making loans to merchants, which tended to turn a profit more quickly; There was a shortage of capital in the state beyond the immediate confines of Charleston; and The War of 1812 caused a shortage of specie, or hard currency, particularly silver and gold.

This building at 19 Broad Street in Charleston was the headquarters of The Bank of the State of South Carolina from 181738. It later housed the South-Western Railroad Bank and, after the Civil War, the old Charleston News and Courier.

In a bid to remedy these issues, the Legislature in December 1812 overwhelmingly approved a bill “to establish a Bank, in behalf of and for the benefit of the State ….”

The capital of the Bank of the State of South Carolina comprised all the assets in the treasury of the state, according to Lesense.

These consisted of shares of United States stocks given the state through funding arrangement on the

Bank of the State Revolutionary War debt, all bonds and notes due the state, and stock owned by the state in two private Charleston banks – the State Bank and the Planters and Merchants Bank. In addition, the full faith of the state was pledged to the support of the bank and all public money was deposited in the institution.

The institution’s relations “to the state of South Carolina were like those of the Bank of England to the United Kingdom,” according to W.A. Clark’s 1922 work, The History of the Banking Institutions Organized in South Carolina Prior to 1860.

The Legislature set down guidelines for the operation of the bank: It had the right to issue notes which were receivable for any debts due the state; and it could also receive deposits and lend money on real and personal property.

Loans could run for up to a year and be renewed provided the interest was paid in advance. No one person was allowed to borrow more than $2,000, which would be approximately $35,000 in today’s dollars.

South Carolina wasn’t the only state to interject the government into its banking system, according to the Economic History Association. But most other states didn’t go so far as to create a state-backed institution.

Virginia, Indiana, Kentucky, Louisiana, Mississippi, Illinois, Tennessee and Georgia to varying degrees took significant stakes in their first chartered banks (providing an implicit subsidy) and required the banks, once they established themselves, to subsidize the states’ continuing internal improvements programs of the 1820s and 1830s, according to the association.

Off and Running The Bank of the State of South Carolina opened its doors in 1813 and by 1819 had grown its capital from $102,546 to nearly $1.2 million, largely through the sale of U.S. stock, proceeds from banks stocks and annual surpluses in the state treasury transferred to the bank.

By the time the bank’s first president Stephen Elliott died in 1830, the institution boasted a vigorous bottom line, having made a net profit of more than $1.4 million during the preceding 17 years. In addition, it had about $400,000 in individual deposits and $1.25 million of its currency in circulation, according to Lesense.

In addition, Elliott had ensured that the bank had fulfilled its mission of reaching out beyond Charleston by opening branches in Columbia, Camden and Georgetown.

The bank would later open another branch in Abbeville and set up agencies, not unlike today’s loan-production office, in Chester, Clinton, Laurens, Marion, Newberry, Spartanburg, Sumter and Yorkville. In addition, it had out-

Notes issued by the Bank of the State of South Carolina during the War Between the States. Hundreds of thousands of notes similar to these were found in the basement of the Statehouse in the 1960s and can be purchased at the S.C. Department of Archives and History.

of-state agencies in Charlotte, Liverpool, London, New Orleans and New York, according to Walter Edgar’s South Carolina: A History.

After a quarter century of operation, the Bank of the State was strong and sound, having weathered the Depression of 1837. One of the highlights of the bank’s early history was its role in helping rebuild Charleston after the devastating fire of 1838.

With approximately 1,000 homes destroyed, as many as 7,000 people homeless and damage estimated at as much as $3 million – the fire was a disaster that would mean hundreds of millions of dollars in losses today.

Under a plan approved by a legislative committee, called the “fire loan,” the state would borrow $2 million and deposit it in the Bank of the State. The bank would then lend it to those who wanted to rebuild in the burnt section of Charleston using fireproof material such as stone or brick, See Bank of the State, page 12

11 Palmetto Banker

Feature Bank of the State and would not from 1842-44; and make a profit on Benjamin Franklin Perthis activity. Ultiry, who served in the mately, the bank South Carolina Legislaplayed a crucial ture throughout the role in helping period and became Charleston rebuild the state’s first postand get back on its war governor. feet, Clark wrote in On the pro-bank side his History of the were, John H. Means, Banking Institugovernor from 1850tions Organized in 52; James Gadsden, South Carolina. president of the South Among the strucCarolina Railroad Co. tures built with in the 1840s; and John “fire loan” money S. Preston, state senais the Bank of tor and brother-in-law South Carolina’s to future Confederate office at 256 general and governor Meeting Street.

The Bank of South Carolina’s headquarters at 256 Meeting Street in Charles- Wade Hampton.

William Gayer seBoth sides even tried ton was one of the many building constructed through “fire loans,” money lent by the Bank of the State of South Carolina following the devastating cured a loan of to get Calhoun, who blaze of 1837. $12,000 from the was a depositor in the Bank of the State bank, to weigh in one to rebuild his carriage manufacturing shop at the site a way or the other, but he declined. year after the fire, and the structure served as a carriage By the 1850s opposition began to wane, perhaps befactory into the 1890s. It later was operated as a wholecause the Bank of the State was posting robust results. By sale boot and shoe store, a tire company and a Lutheran 1853 it had nearly $850,000 in deposits and turned a profit services center before the Bank of South Carolina began in of more than $350,000. Increasingly, the bank was used as 1987. a tool for economic development. It frequently advanced Despite the good works of the Bank of the State of South funds to the state for purchase of stock in various railroads Carolina through its first quarter century, it was still a po- being planned or built in South Carolina, and the institulitical entity and as such had detractors. In the 1840s, bank tion not only sold bonds to finance the building of a new critics would spend a good bit of the decade trying to shut statehouse – South Carolina’s current capitol – beginning down the institution. In the fall of 1840 Franklin Harper in 1854, but financed the actual construction until the Elmore was named bank president. He had served in Con- money was realized from the bond sales, according to Legress from 1836-39 and would later replace John C. Calsense. houn in the U.S. Senate upon the latter’s death in 1850.

The beginning of the end for the Bank of the State came However, Elmore’s tenure at the bank was “marked by with South Carolina’s secession in December 1860. On almost continuous warfare with the enemies of the bank,” Dec. 22, 1860, two days after the signing of the Ordinance according to Lesense. “The institution was always in the of Secession, the bank was appointed to sell certificates public eye, with the people of the state divided in bank for $400,000 in state stock, money that was to be used for and anti-bank factions.” military defense. It soon became apparent that this was The Bank of the State under Elmore became as much the insufficient and the bank was called upon to dispose of subject of controversy in South Carolina politics as the Dis- $675,000 in state bonds, Lesense adds. Finally, the bank pensary under Pitchfork Ben Tillman, Lesense added. was also requested to issue up to $200,000 in currency Arrayed against the bank during this period was the and to advance it to the state on demand of the governor. chairman of the House Ways and Means Committee, Chris- Simply put, before a single shell had been fired at Fort topher G. Memminger, the future Secretary of the Treas- Sumter, the bank was required to come up with nearly ury for the Confederacy; James H. Hammond, governor See Bank of the State, next page

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Bank of the State $1.3 million for military preparations. The Bank of the State also had to take care of such actions as meeting the expenses of the Secession Convention.

While the Bank of the State managed to weather the trials of the war’s first year, 1862 proved much more challenging.

“The Bank of the State invested heavily in securities of the Confederacy, and by the end of the fiscal year it had lent $4,500,000 to the Confederate government, including some of its precious specie,” Lesense writes. “It also had over $1,000,000 in Confederate currency among its assets.

Thus by the end of 1862 the bank was so deeply involved in Confederate finances, that its success depended upon the success of the Confederate government.”

Ultimately, the future of the Bank of the State collapsed with the Confederacy. On Feb. 17, 1865, the institution’s Columbia branch, from where the business of the Charleston office was also being conducted, was burned when Sherman’s troops overran the capital city.

The state had been devastated by Union soldiers, but bank President Charles H. Furman reopened the Charleston branch by mid-1865. However, the bank had little way of collecting on debts owed, and could only hope to realize a small percentage of the value of its assets.

Following the passage of the state constitution of 1868, South Carolina’s first Reconstruction-era governor, Robert Scott recommended an early and thorough investigation of the Bank of the State, with the goal of placing it in full liquidation as quickly as possible, according to Lesense.

The Legislature passed an act on Sept. 15, 1868, to close

the operations of the bank and directed that its assets were to be sold at public auction. Bank notes issued prior to Dec. 20, 1860, were to be surrendered in return for state bonds bearing 6 percent interest over 20 years. Initially, bills issued during the war were considered of no value.

Following the end of Reconstruction and the reestablishment of white Democratic rule in 1877, it was decided that the state would pay 50 cents on the dollar for Bank of the State bills issued during the war, in the form of 10-year bonds that paid 6 percent interest. Bill holders had until July 1, 1881, to redeem the notes. With that, the Bank of the State of South Carolina passed into history.

Today, the Bank of the State is largely forgotten, but for more than five decades it provided needed capital outside of Charleston to planters and merchants alike, served as an arm of the state treasury and helped South Carolina maintain its fiscal constancy. It was an institution of great financial strength and performed many services to the citizens and state of South Carolina, according to Lesense.

Its operation was hindered by the fact that banking, by its nature, requires a confidentiality that runs in direct contrast to the open nature of good government. Yet, there was no doubting that among the state-run banks that existed in the antebellum United States, the Bank of the State was among the best.

“The fact that this bank was able to survive business vicissitudes and political attacks for over half a century indicates that the management was in the hands of men of high integrity and ability,” Lesense writes.

The beginning of the end for the Bank of the State of South Carolina came with the destruction and ruin of the Civil War. Shown here is the current Statehouse following its destruction

by Union troops in 1865. The bank sold bonds to provide funding for the building and also financed its construction until the money was realized from the bond sales. The bank was closed shortly after the end of the conflict, in 1869.

13 Palmetto Banker

Young Bankers Conference

Young Bankers Conference Draws 180 to Hilton Head Some 180 bankers, associates members, spouses and guests turned out for the 2013 Young Bankers Conference, held March 8-10 at the Westin Resort & Spa on Hilton Head Island.

Speakers included SCBT Financial President and CEO Robert R. Hill Jr., Morganton Savings Bank President and CEO Michael Ayotte, Palmetto Health President John S. Singerling III, Coastal Carolina University head football coach and the chairman of TD/Ameritrade Joe Moglia, and Thirteenth Judicial Circuit Solicitor and former United States Attorney for the District of South Carolina W. Walt Wilkins III. This year’s conference represented one of the largest attended conferences in recent years, said SCBA Young Bankers Division Chairman R. Montague Laffitte III. “All of the speakers were very entertaining and provided insightful tips on employee engagement, leadership qualities, and creating and sustaining a positive organizational culture,” said Laffitte, Columbia market president for SCBT. Hill discussed the importance of developing strong leaders within the banking industry in order to overcome future challenges and stressed the importance of each organization developing leaders, adding that strong leaders

Jessica Shand, Decision Dynamics Inc., and Peter Shand, BDC/ CDC, with Shawn Willis, Turner Padget, and wife Elizabeth.

Robert Hill, SCBT, and John Singerling, Palmetto Health, convey what it takes to be a great leader in today’s environment.

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coincided with strong bank performance, Laffitte said.

Ayotte provided attendees with an economic update that ranged from shedding light on net interest margin pressure at the local level due to an increase in deposits and soft loan demand to some of the financial political issues being debated by Congress.

Laffitte also singled out Wilkins’ talk during the prayer breakfast segment, as the former U.S. Attorney told about surviving a plane crash on his honeymoon and how that incident increased his faith and allowed him to better handle life’s challenges and obstacles.

“These quality speakers laid the groundwork for a weekend of fun, entertainment and fellowship,” Laffitte added.

“Over the years, this conference has brought together bankers and friends that have used this weekend to develop relationships with vendors, associate members, and even friendly competitors. It is an opportunity to come together and learn ways for us to improve our performance as bankers and ultimately enhance our bank and the communities we serve.”

Next year’s convention will be held March 7-9 at Pinehurst, N.C.

Joe Moglia, head football coach Coastal Carolina University and chairman TD Ameritrade, and Young Bankers Division Chairman Montague Laffitte, SCBT.

The 2012– 2013 Young Bankers Division Board of Directors.

Young Bankers Conference

Curt Evatt and Allen White, Oconee Federal, Mike Shumaker, Bryan Cave, LLP, and Henderson Duke and Wes Caudell, Community Bankers Bank.

Chairman-elect Marvin Robinson, Wells Fargo, presents Chairman Montague Laffitte, SCBT, with a plaque.

Walt Wilkins, Thirteenth Circuit Solicitor, speaks on faith and adversity during the Prayer Breakfast portion of the conference.

Lindsey and Vance Livingston, and Emily and Ellis Farr, Haynsworth Sinkler Boyd.

Saturday proved to be a beautiful day for golf.

Thank you to the Young Bankers Conference Sponsors:

Gold Sponsors AloStar Bank of Commerce, SCBT The “odds� were everyone had a good time Saturday night.

Silver Sponsors Bank of America, BB&T, BDC/CDC, Elliott Davis, First Citizens, First Reliance Bank, Federal Home Loan Bank of Atlanta, Security Technology Systems, TD Bank, Turner Padget, Wells Fargo.

Bronze Sponsors

Mike Ayotte, Morganton Savings Bank, provides an economic update and commentary.

Blue Ridge Bank, Ellis Lawhorne, Haynsworth Sinkler Boyd, Mauldin & Jenkins, NBSC, Palmetto State Bank, Performance Trust Capital Partners, The Plateau Group, Reliance Trust Company, Rogers Townsend, Sandhills Bank 15 Palmetto Banker

16 Palmetto Banker

SCBA Legislative Reception

Above: Boyd Jones of NBSC, U.S. Rep. Jim Clyburn and SCBA President and CEO Fred Green. At right: Wells Fargo’s Rick Redden, SCBA’s Amber Barnes and S.C. Attorney General Alan Wilson.

Left: Mike Brenan, BB&T, and Senate President Pro Tempore John Courson.

Middle: Dwight Neese of Provident Community Bank and Glenn Blackwood of Equias Alliance. Right, Robert Hill of SCBT and Jeffrey Lacker, President of the Federal Reserve Bank of Richmond.

SCBA Legislative Reception Enjoys Strong Showing with 550+ on Hand More than 550 individuals turned out for one of the best-attended legislative receptions in the history of the South Carolina Bankers Association, held Jan. 8 at the Columbia Museum of Art. Among those on hand were U.S. Reps. Jim Clyburn and Joe Wilson, Federal Reserve Bank of Richmond President Jeffrey Lacker and S.C. Attorney General Alan Wilson.

The event also featured many members of the South Carolina Legislature, including House Speaker Bobby Harrell and Senate President Pro Tempore John Courson, along with Lt. Gov. Glenn McConnell.

South Carolina bankers were also in abundance, with banks from across the state represented at the annual affair.

House Speaker Bobby Harrell and SCBA President and CEO Fred Green talk during the South Carolina Bankers Association Legislative Reception Jan. 8 at the Columbia Museum of Art.

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SCBA Annual Convention

Kiawah to be Site of 113th SCBA Annual Conference

T

he 2013 South Carolina Bankers Association Annual Convention will take place Sunday through Wednesday, June 9-12, 2013, at The Sanctuary resort at Kiawah Island.

The Sanctuary is consistently ranked among the top destination resorts in the world and features spectacular scenery, a variety of outdoor activities and some of the best golf in the Southeast, and Chairman F. Rick Redden III and wife Angela are pleased to invite all bankers and associate members of the SCBA. Redden Speakers at the convention include Frank Keating, American Bankers Association president; S.C. State Treasurer Curtis Loftis; former Federal Reserve Board Governor Mark Olson; and John Silva, chief economist for Wells Fargo.

In addition to the business sessions, there will be a dinner dance, a reunion for alumni of banking schools and a picnic at the Firefly Distillery and Irvin House Vineyard.

The Firefly Distillery opened its doors in 2008 and the location is one of the very few in the country to include both a vineyard and a distillery. The Sanctuary’s facilities include golf, tennis and Kamp Kiawah for children.

Convention fees are $495 for bankers and associates, and $395 for spouses/guests. For the convenience of attendees, the SCBA’s special nightly hotel rates will be extended to registrants for two days before and after the convention.

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Speakers Frank Keating President & CEO American Bankers Association Frank Keating, president and CEO of the American Bankers Association, will be the keynote speaker at the SCBA’s annual convention, June 9-12, 2013.

Keating became the ABA’s president and CEO on Jan. 1, 2011, following seven years of service as the president and CEO of the American Council of Life Insurers, and after serving two terms as Oklahoma’s 25th governor.

The American Bankers Association, a 135-year old association that represents banks of all sizes and charters, is the voice for the nation’s $13 trillion banking industry and its 2 million employees.

Keating received high praise when he was announced to replace the retiring Ed Yingling in November 2010.

“Frank was the unanimous choice of the search committee, then-ABA Chairman Stephen P. Wilson said.

“He brings to this position tremendous energy, a strong history of involvement in financial issues, the respect of policymakers on both sides of the aisle and extensive management experience.”

Wilson added that Keating is well known in Washington and around the country. “Frank comes from a family of bankers and served on the board of a savings bank.”

SCBA Annual Convention Curtis M. Loftis, Jr. Treasurer State of South Carolina

chairman of the Public Company Accounting Oversight Board, five years as a member of the Federal Reserve Board of Governors and the Federal Open Market Committee, and after serving as staff director of the Securities Curtis M. Loftis Jr. serves as State Subcommittee of the U.S. Senate Committee on Banking, Treasurer of South Carolina. He is a na- Housing and Urban Affairs. tive of Lexington County and a graduate Mark is also a past President of the American Bankers of University of South Carolina. He is a Association. business owner and the founder and benefactor of The Saluda Charitable Foundation.

John Silvia Loftis is the “private banker” for South Carolina. He is Chief Economist responsible for the investment, cash management and Wells Fargo safekeeping of the state’s general and restricted funds and the assets of the S.C. Retirement Systems.

John Silvia is a managing director and The Treasurer is the vice chairman of the State Budget & the chief economist for Wells Fargo.

Control Board.

Based in Charlotte, he has held his position since he joined Wachovia, a Wells Fargo predecessor, in 2002 as the comDavid McNair pany’s chief economist.

Founder Prior to his current position, John worked on Capitol Hill The McNair Group as senior economist for the U.S. Senate Joint Economic David McNair brings more than 25 years Committee and chief economist for the U.S. Senate Banking, Housing and Urban Affairs Committee. of experience in the fields of organizaBefore that, he was chief economist of Kemper Funds tional and leadership development. and managing director of Scudder Kemper Investments, As the founder of The McNair Group, he Inc. is an oft-requested speaker for indusJohn was awarded a NABE Fellow Certificate of Recognitries as diverse as healthcare, hospitality and tourism, retion in 2011 for outstanding contributions to the Business tail, real estate development and utilities.

David began his career with AT&T, moving to their corpo- Economics Profession and Leadership Among Business rate headquarters in the early 1980s to work with custom- Economists to the Nation. er service offices and retail sites across the U.S. After that, he made a dramatic change to hospital administration for Glenn A. Blackwood a large, acute care health system.

Managing Consultant In 1998 he founded The McNair Group, a team of seaEquias Alliance soned professionals who coach organizations to higher levels of performance.

Glenn A. Blackwood, Managing ConWhile his focus is on maximizing the employee and the sultant of Equias Alliance, will share with customer experience, he is driven by outcomes and perforattendees how his faith strengthens him mance measures for success. and guides him in his personal and professional life.

Mark Olson Blackwood transitioned into the financial services indusCo-Chair try from a professional football career that spanned ten Treliant Risk Advisors years with the Miami Dolphins.

During his time with the Miami Dolphins he served as Mark Olson is co-chair of Treliant Risk defensive captain and played in two Super Bowls. BlackAdvisors, a Washington, D.C.-based wood finished his career with 29 interceptions and 13 fumcompliance, risk management, and stra- ble recoveries. Prior to being drafted by the Dolphins, tegic advisory firm serving the financial Blackwood attended the University of Texas. services industry. Olson’s distinguished He gives inspirational talks to youth groups, sport teams career has spanned more than 40 years. and business professionals. He and his wife, Beth, reside in Mark joined Treliant Risk Advisors after three years as West Palm Beach, Fla.

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Looking Back

Taxes, Credit, Education Focus of S.C. Bankers in 1913 Annual address of SCBA President Bright Williamson, President of the Bank of Darlington, given at the 13th Annual Convention, July 11, 1913, Lake Toxaway, N.C.

whose duty it shall be to arrange for their introduction in the Legislature, and who shall also watch all legislation for or against the banks, and report same to each bank for their information and guidance. fter much tribulation and some adverse criticism, “The inequalities of taxation are glaring. No individual or the committee appointed by the Executive Council corporation is so heavily taxed as the banks, and some … have brought you to this beautiful spot to hold banks are much more heavily taxed than others. I recomyour thirteenth annual convention. I hope that it will be mend the appointment of a Committee on Taxation, such a successful and enjoyable occasion that you will forget that you are actually six miles from that imaginary line which divides the two Carolinas.

“My honored predecessor is a diplomat. Instead of doing, he recommends that things be done, as for instance, that we have our state divided into groups, and that we do a lot of things -Bright Williamson for our farmer friends. All of the groups SCBA Chairman, 1913 Williamson have met and organized, and those meetings which I was able to reach whose duty it shall be to make a thorough study of the were mostly well attended. subject, and evolve a plan or suggest a law which will remMuch good can be accomplished by these groups in edy such unjust discrimination. bringing neighboring bankers into closer touch with each “Credit is too cheap. Not only are we loaning too freely, other, in solving local problems, in inducing harmony furnishing oftentimes capital where it should be only modwhere there may be friction, in helping the younger memerate short time loans, but the records at our last call bers of our clerical forces by precept and example to fit show that our own bills payable and re-discounts are exthemselves for the responsible positions which eventually cessive. We should call a halt. In our desire to accommothey will have to fill. date, and to turn an honest penny, we are getting reckless.

“Our Agricultural Committee has been very active. It is We should liquidate our own indebtedness at least once a endeavoring to demonstrate the community of interests year. between the farmers and the bankers, and to promote a “Yet in the face of hard times, and the cry of tight monbetter system of agriculture. The chairman, Mr. (Robert I.) ey, we may review the marvelous growth of our state with Burnside, (president of Farmers & Merchants Bank of a great deal of price. Just think of what it has accomGreenville), attended the meeting of the Agricultural Complished in the last decade! mittee which was held in Minneapolis, arranged the con“How its agriculture has developed, making records ference of farmers and bankers during the Corn Exposition which the world has not beaten! How its manufacturers in Columbia, and is at present in Europe with the American have multiplied until its products are known in the far corCommission, authorized by Congress, studying and investiners of the earth! gating plans in vogue there, which it is hoped may be How our banks have increased and our deposits have adapted to the needs of farmer friends, much to their adgrown! And yet there are things which we sadly need – let vantage and enrichment. us confess it that we all may use our influence to remedy “I feel that our Association does not take enough interest it. One of our problems is the lack of education of the in the laws governing banks. We have a splendid Legislamasses. The natural indifference of the average boy and tive Committee, to which I appointed Mr. T.B. Stackhouse girl to going to school must be overcome by moral suasion for the five-year term, and the chairman particularly has or by compulsory education law. been active in doing good work, but I think that we should “The parents must be shown that they own and their organize a regular campaign to get the laws passed which children’s future welfare demand that they shall send their are so much needed in our state, and I would recommend children to school at least long enough to fit them for the that the executive council be authorized to employ one to ordinary vocations of life. It is humiliating to note the perprepare such laws as seem to them most needed, and centage of illiteracy in our state.

A

‘The inequalities of taxation are glaring. No individual or corporation is so heavily taxed as the banks.’

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1913 “It would be a source of great pride and material prosperity to us if we should be instrumental in lifting the cloud of ignorance which befogs the minds of so many of our little men and women. It behooves us to make the effort.

Shall we not go on record as promising to do so and to do all in our power to make it effective?

“Someone has aptly defined co-operation as the essence of unselfishness. Don’t we need more of that? Haven’t you often noted that the most usual question asked when any proposition is being discussed is: ‘Where do we come in?’

“How often our state has been handicapped in securing legislation, state or national, by such a spirit.

“Let us bury our rivalries and our petty jealousies and work for a more enlightened, prosperous, better state, and the leaven which may be implanted by our united efforts in one part will surely radiate into the far corners until the who is permeated with that broad intelligence and spirit of enterprise which will transform our grand old state into a model for all its neighbors.

“Let us bankers, though our organization, be in the van of all progressive movements which will tend to better conditions around us.

“Let us promote the general welfare, be active in securing legislation so much needed in banking and financial affairs and strive in every way to make our influence felt in bettering conditions in our home state.

“We will be amply repaid in the satisfaction we derive from our efforts and in the material profits which will accrue as a matter of course as our communities grown and prosper.”

(Bright Williamson, 1861-1927, served as president of the Bank of Darlington from 1890 until his death. He was also president of a number of other Pee Dee-area business ventures, including the Darlington Phosphate Company, the Darlington Oil Company, the Independent Cotton Oil Company, the South Atlantic Oil Company and the Darlington Brick Company.)

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2013 SCBA Annual Convention Sponsors Diamond Sponsor

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22 Palmetto Banker

2013 SCBA Annual Convention Sponsors Gold Sponsors

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23 Palmetto Banker

Feature

Intangible Value of Real Estate Loans a Key Factor income, simply because they cannot be easily defined.

Real property appraisals recognize three basic approaches to value: replacement cost, sales comparable and income capitalization. The concept of component analysis applies omponent analysis involves separating the value of only to the income approach. income-generating real estate into values for real The income approach converts the anticipated future beneproperty, personal property and intangible value. fits of property ownership into an estimate of present value Originating primarily in the context of determining a hotel’s and requires a calculation of the net income being generated real estate value for ad valorem tax purposes, the concept for a property before debt service, and a determination of a has far broader applications.

As underlying values for loans increasingly shift from “hard” capitalization rate for such net income. Net income is divided assets to intangible assets, lenders face increasing regulatory by a capitalization rate to determine the property’s appropripressure to “take less risk” by separately valuing the compo- ate value. nents generating the income and valuing the risk separately.

Documentation Issues Value allocation for income-producing real estate-centric Lenders must confirm that their documentation acquires projects generally involves four componot only a security interest in all of the rights comprising the nents: ongoing operation but also allows the lender, in case of de Land; fault, to act quickly to take over the business as an operating  Buildings/improvements; business in order to preserve its “going concern” value.  Tangible personal property; and Many lenders are familiar with some of the inherent prob Goodwill/ongoing business value lems in properly securing a loan to an operating hotel. For represented by intangible personal example, lenders must obtain proper security interests in property or “business enterprise franchise agreements, reservation systems, websites, licenses value.” and other components which allow the hotel to generate inThe terminology surrounding this Ellison come. Obtaining security interests in a health care facility’s fourth component is confusing and reintangible assets poses similar challenges. Typical intangible ferred to by multiple names, including assets of a nursing facility may include: intangible value, goodwill and business enterprise value  Licenses, certifications and approvals from state and/or (BEV). local government agencies and regulators; The Dictionary of Real Estate Appraisal defines “business  Assembled work forces, including licensed, certified and enterprise value” as “the value contribution of the total intrained employees, some of whom may have (or need) tangible assets of a continuing business enterprise such as existing employment agreements; marketing and management skill, an assembled work force,  Patient records; working capital, trade names, franchises, patents, trade Management agreements; marks, contracts, leases, and operating agreements.”  Vendor contracts; When analyzing the value of income producing real estate  Trade names; and properties, the Appraisal Institute, Internal Revenue Service  Contracts with federal, state or local agencies for the (IRS), Securities Exchange Commission (SEC) and Financial placement of particular residents.

Accounting Standards Board pronouncements of the America Nursing facility operators usually enter into various agreeInstitute of Certified Public Accountants (FASB) all recognize ments with government authorities including licensure agreethat a property’s value includes an intangible value compoments, provider agreements with the state agencies that adnent.

While the concept may be generally recognized, no consen- minister the Medicaid program (often contained within the sus exists as to how to calculate BEV. That lack of consensus state department of social services) and Medicare.

Staff and consultants may need certifications issued by fedmay help explain some of the vitriol surrounding the debate eral, state or local authorities. Similarly, local licensing and in the appraisal world on how to calculate BEV. Although particular circumstances may call for a component other regulations may be required for fire and safety, food analysis for a going concern (e.g., such as to apply those com- services and zoning compliance.

The application of many of these governmental contracts ponents to specific statutory definitions of taxable value), using a component analysis for appraisal purposes, particular- means that the rooms are not effectively “leases” of the ly for a loan appraisal, imposes artificial boundaries on value guest rooms to residents; rather the use of the rooms carry with them specialized terms on the retention of patients’ recand creates substantial risk to lenders if they fail to secure the components of a project generating important sources of See Intangible Value, next page

By Morris Ellison Special to the Palmetto Banker

C

24 Palmetto Banker

Intangible Value ords, requirements of safekeeping residents’ personal property, lengthy notice provisions for termination of a resident’s lease, confidential provisions about disclosing medical conditions and records, and obligations to take in residents, retain them and terminate them without violating any antidiscrimination laws.

Health care facilities may need to be qualified by the appropriate government agency for specific equipment or facilities above the level required by usual zoning and building laws.

Appointing a receiver to take over operations may be very problematic and may not satisfy various applicable licensing requirements.

For example, notwithstanding anything in the loan documents to the contrary, applicable law may not permit assignment of certain rights, notably liquor licenses for hotels or contracts with local, county and state governmental agencies for nursing facilities.

A hotel with a national franchise is dependent upon continued compliance with the requirements of the franchise agreement, and upon failure and termination of that agreement, can lose access to a national reservation system and connection to “rewards” travel, that can destroy the hotel’s lifeblood.

Little wonder that many lenders have generally shied away from loans to operating hotels.

framework for separating the tangible and intangible assets of real estate centric businesses.”

As of this writing, the materials of this course have undergone four rewrites and are still subject to vigorous debate and attack.

Significantly, the new Appraisal Institute course does not advocate a particular theory or method for calculating BEV. “Rather, each appraiser must come to his or her own conclusion based on the property type, local market customs, and scope of work.”

No guidance is given to appraisers as to how to allocate intangible value from an overall value. In other words, the new course recognizes the existence of additional risk in making loans to real estate centric businesses, but offers no guidance as to how to calculate this risk.

On Oct. 1, 2011, the Small Business Administration adopted updated appraisal policies “relative to business valuation requirements and going-concern appraisals when there are changes in ownership.”

The new regulations require all SBA lenders to obtain a “going concern appraisal” for any real estate property involving an ongoing business.

SBA now requires lenders to have an appraisal valuing the separate components prepared by an MAI appraiser who has passed either Course 800 or the Appraisal Institute’s new course.

Impacted properties include: hospitality uses such as resorts and motels, healthcare facilities such as hospitals, nursing home and assisted living centers, restaurants and nightclubs, recreation facilities such as theme parks, theaters and golf courses, manufacturing firms, franchised gas stations/convenience stores and shopping centers, office buildings and apartments.

Although the SBA claims that nothing has changed, the SBA’s requiring lenders to obtain appraisals prepared by appraisers who have passed a specific course is certainly new.

The Office of the Comptroller of the Currency (OCC) seems to be adopting a similar approach. Unlike the new SBA regulations, relevant OCC regulations do not specifically mandate the appraiser be qualified in business valuation, nor that the appraiser complete a specific course. Rather, OCC vaguely requires that the appraiser be competent.

While most OCC appraisals need only comply with the Uniform Standards of Professional Appraisal Practice “stricter standards” may apply to certain OCC related appraisals if

‘Lenders must confirm that their documentation acquires not only a security interest in all of the rights comprising the ongoing operation but also allows the lender, in case of default, to act quickly to take over the business as an operating business.’

Arguments Regarding ‘BEV’ While the IRS, SEC and FASB all require separation of components, there is no consensus on the method for calculating BEV. Initially, the controversy involved primarily hotels and stemmed from lenders and borrowers seeking to use the resulting high real estate values supported by a more conservative approach to lend and borrow money in amounts greater than the values calculated under the other methodologies which generally calculated a higher BEV and lower real estate value.

For several years, the Appraisal Institute offered a course, known as Course 800, to teach appraisers a methodology to measure BEV. However, Course 800 generated such an outcry that the Institute dropped, but did not disavow, the course in 2005.

In 2012, the Appraisal Institute began offering a new course entitled “Fundamentals of Separating Real Property, Personal Property, and Intangible Business Assets.” The stated purpose of the course is to provide “the theoretical and analytical

See Intangible Value, Page 35

25 Palmetto Banker

Good Samaritans

SCBT Gives Computers; The Palmetto Bank Helps Kids she was grateful for the donation.

“It will allow us to now have a computer in a common area for our teachers to enter daily notes which are used for Medicaid billing as well as to show the progress of each child,” she said.

The Palmetto Bank’s annual “Be An Angel!” program helped nearly 500 Upstate children this past Christmas.

The names of 496 the children, obtained through different county departments of social services, Hands On Greenville/ Greenville County Foster Parents Association and The Salvation Army of Spartanburg, were hung on specially designed Be An Angel! ornaments on the Christmas trees in the lobbies of all 25 bank branches.

SCBT’s Kelly Harvey, right, presents two computers to Carrie Pride, executive director of College Hub, a Spartanburg Bank customers and employees sponsored the children nonprofit. by selecting the name of a child, purchasing items for the child, and returning the items to the bank. The bank proSCBT’s Spartanburg office recently donated two comput- vided gift coordination with the area organizations. ers to College Hub, a Spartanburg-based nonprofit, dediMore than 10,000 children have been touched by the Be cated to leading and supporting educational achievement An Angel! program since its inception in 1995. at all ages.

The computers will be used to assist College Hub in reaching out to students and help them complete college applications and apply for financial aid.

“SCBT is proud to partner with area nonprofits,” said Kelly Harvey, a commercial loan assistant at SCBT. “We look forward to many years in Spartanburg, and feel it is important to do everything we can to foster economic growth and a sense of pride within our community,” she added.

College Hub Executive Director Carrie Pride said her organization was grateful for the support.

“When groups donate items like computers, it helps us ensure that the money we raise goes straight to the students who need it,” she said.

SCBT recently donated three computers to A Child’s Haven, a nonprofit organization dedicated to transforming the lives of young children who have experienced developmental delays or behavioral challenges.

The computers will be used by staff members at A Child’s Haven for a variety of purposes including tracking attendance, entering goals for each child, and managing Medicaid, transportation and billing.

Debbie Roche, executive director of A Child’s Haven, said

26 Palmetto Banker

Meet Your Legislator

State Rep. Greg Delleney Jr., left, introduces U.S. Sen. Lindsay Graham at a Chester County fish fry last year.

Delleney, House Judiciary Chair, Appreciates Banks’ Roll

R

ep. Greg Delleney Jr. understands the role community banks play in small- and medium-sized towns throughout South Carolina.

Delleney, R-Chester, is the new House Judiciary Chairman, where many of the bills that affect banks and bank customers pass during the legislative process.

The Judiciary Committee is among the choicest committee assignments. Judiciary is involved in everything from criminal law changes to civil court reform to government restructuring. Delleney had previously been chairman of Judiciary's constitutional laws subcommittee.

Delleney replaced former Rep. Jim Harrison, RRichland, who did not seek re-election after 23 years in the House. Delleney said he saw firsthand the importance of community banks while serving on the advisory board for First Citizens in Chester.

“What I learned was how important local banks are to local communities,” Delleney said. “They’re absolutely crucial to the well-being of a community and the people who live in the community. For one thing, if you can’t get a loan, you can’t start a business.”

The Chester native remembers opening his first bank account, with South Carolina National in 1970, while a stu-

28 Palmetto Banker

dent at The Citadel. When asked if opening a bank account was a big deal, Delleney replied affirmatively, adding, “It was a bigger thing keeping money in my account.”

Delleney, an attorney with the firm of Hamilton, Delleney and Grier, P.A., earned a bachelor’s degree from The Citadel in 1974 and a juris doctor from Cumberland Law School at Samford University in 1981. He began his tenure in the S.C. House in 1991.

Prior to becoming a House member, Delleney served on the Chester Fire Control Commission from 1983 to 1989.

Delleney said he doesn’t anticipate the Legislature imposing any onerous laws on the banking industry this session.

“I anticipate that we’re going to be play less of a role, rather than more,” he said. “The market knows better than government what works and what doesn’t.”

Delleney, 61, served in the Navy from 1974-77, is past president of the Chester Sertoma Club, is a member of Gideons International and is both a Mason and a Shriner.

Delleney is an elder in Chester Associated Reformed Presbyterian Church. He and wife Rebecca have two children, Caroline Caldwell and Francis Gregory III.

Mulvaney Appointed to Financial Services Committee U.S. Rep. Mick Mulvaney recently was named to the House Committee on Financial Services, a plum assignment for the second term Republican from South Carolina’s 5th District.

Areas the committee is involved in include banks and banking, money and credit, and insurance.

"I am excited by my appointment to the House Committee on Financial Service,” Mulvaney said after being named to the committee.

“Community banks, credit unions, insurance companies, and the conMulvaney sumer finance industry are the backbone of South Carolina's financial services economy.

“By working on this committee, I will be in a position to deal with issues that affect a growing and important segment of our state's economy,” he added.

Mulvaney, speaking to a group of bankers at the South Carolina Bankers Association offices in mid-March, said he senses a willingness among Congress to consider changes to Dodd-Frank, the 2010 that brought significant changes to financial regulation in the United States.

“I’m getting a very strong feeling that there is bi-partisan

support for changing Dodd-Frank,” he said.

“People are losing jobs because of the regulatory burdens associated with Dodd-Frank and I think that’s starting to resonate with people on both sides of the aisle.”

Mulvaney is optimistic that leaders in Washington are willing to take a longer-term approach to solving problems, rather than simply relying on stop-gap measures.

“I believe it’s still possible to find legislators in Washington willing to work together,” he said. “If we can get enough smart people on both sides, then yes, we can work put our differences aside and do what’s best for the country.”

Mulvaney graduated from Georgetown University with a degree in International Economics, Commerce and Finance. He attended law school at UNC at Chapel Hill and later took part in Harvard Business School’s OPM program.

After practicing law following law school, he started his own law firm. Later, he ran the family real estate business then started a small homebuilding company. He was also a minority shareholder in a restaurant franchise company, and even owned and operated his own restaurant.

The House Committee on Financial Services is made up of more than 60 members. Mulvaney is the only member from South Carolina.

29 Palmetto Banker

Bank News Coastal Carolina National Bank opened its first branch personal banking satisfaction, supporting TD’s position as office in Garden City earlier this year. an industry leader in customer The South Strand branch is located at service.

2961 Highway 17 Business. The Gar“The delivery of a legendary cusden City office marks Coastal Carolitomer experience is paramount at na National Bank’s first location beTD Bank and we’re pleased to see yond its main office in Myrtle Beach. the Greenwich Excellence Awards recognize the efforts that our employees make each day,” said Fred Graziano, Independence Bancshares Inc. of Greenville announced in Head of Regional, Commercial, Government and Small January it had closed on a private placement of stock alBusiness Banking for TD Bank. lowing it to raise more than $14 million.

The Palmetto Bank recently received notification from the The deal marked only the second Federal Deposit Insurance Corp. and the South Carolina capital-raising effort by a bank in South Carolina in the past two years, State Board of Financial Institutions that the consent order it had been operating under since June 2010 was terminatand it enabled Independence to move from being an undercapitalized ed effective Jan. 30, 2013.

“Termination of this regulatory agreement is a fitting institution to a very well-capitalized one. start to 2013 for The Palmetto Bank,” said Sam Erwin, Independence, the holding company for Independence President and CEO. “This positive National Bank, issued more than 17.5 million shares of action by the banking regulators is common stock and brought in gross proceeds of $14.1 milfurther confirmation that the exelion, according to the company. cution of our Strategic Plan is “We believe raising capital in this offering will help us to yielding the desired results.” improve our capital levels in excess of regulatory requireAlthough the consent order has been terminated, certain ments and better position the Bank to expand its business into higher growth opportunities that are designed to de- regulatory requirements and restrictions remain, including requirements to continue to improve credit quality and liver more consistent earnings going forward,” said Indeearnings, restriction prohibiting dividend payments withpendence National Bank President and CEO Lawrence R. out prior approval from the supervisory authorities, and Miller. the maintenance of a specified leverage capital ratio, acSynovus, the parent of South Carolina’s NBSC, was honcording to parent company Palmetto Bancshares. ored recently with 17 awards from Greenwich Associates The Palmetto Bank recently announced it had launched for excellence in both Middle Market and Small Business three new deposit-accepting ATMs. banking.

These machines, located on Haywood Road in Greenville, Among 750 banks evaluated nationwide, only 39 reWest Wade Hampton Boulevard in Greer and on Highway ceived national excellence awards for Middle Market banking, and only 76 in Laurens, do not require a deposit envelope or deposit slip, according to the Greenville-based bank.

42 for Small Business banking. CoFor cash deposits, the ATM sorts and counts the bills, lumbus, Ga.-based Synovus received verifies the amount and prints the denominations depositfour regional awards as well. ed on the receipt. For checks, Palmetto bank customers “These awards are a testimony to the excellent service have the option to receive an image of the deposited our team members provide customers day-in and daychecks on the back of the ATM receipt. out,” said Synovus Chairman and CEO Kessel D. Stelling.

Greenwich Associates, of Stamford, Conn., is a financial SCBT Financial Corp. and First Financial Holdings Inc., two services consulting and research firm. of South Carolina’s oldest banking companies, signed a TD Bank was recently honored for its small business bank- definitive merger agreement recently. ing and middle market banking efforts by Greenwich Asso- When the deal is complete, the combined company will have approximately $8.3 billion in total assets and $6.9 ciates. billion in total deposits. Columbia-based SCBT has 82 locaTD Bank was recognized with five National Small Business awards, including overall client satisfaction and excel- tions in the Carolinas and Georgia while North Charlestonlence in credit policy, financial stability, online services and based First Federal Bank has 66 locations in the Carolinas.

31 Palmetto Banker

Personal Transactions BB&T Mike Brenan, South Carolina market president for BB&T, was awarded the United Way of the Midlands 2012 Humanitarian of the Year earlier this year.

Brenan was recognized Feb. 28 during the 29th annual United Way of the Midlands Humanitarian of the Year Dinner and Award Ceremony.

Brenan was nominated for the award

by Holt Chetwood of Wells Fargo.

“His commitment to our community’s most at-risk citizens can be seen through his work in this area,” Chetwood said. “He is a man of strong faith. He is a great example of servant leadership, and we are fortunate to have a community leader like him in the Midlands.”

As chair of the Greater Columbia Chamber of Commerce this past year, Brenan helped secure the backing of other business leaders to promote the penny sales tax referendum for the bus system as well as improvements to roads, bikeways, greenways and more.

ty with three banks, he most recently was responsible for the day-to-day operations of an $80 million institution.

Thomas earned a bachelor’s degree in industrial management from Clemson and is a graduate of the LSU School of Banking. He also has held volunteer leadership roles with the South Carolina Bankers Association and the American Bankers Association.

Coastal Carolina National Bank

Robert Hucks, vice president with Coastal Carolina National Bank, was guest speaker recently at South Conway Elementary School.

Hucks, who came up through the Conway school system and attended elementary school at South Conway, was contacted by school principal Leon Hayes about addressing the students during an awards ceremony in which students with who had achieved either perfect attendance or made the Honor Roll (received all As, or all As and Bs) for the previous nine weeks were recognized.

More than 400 individuals, including teachers, students Blue Ridge Bank and parents, were on hand as Hucks identified not just Yvette Norris of Blue Ridge Bank was presented with a plaque by S.C. Senator Thomas Alexander, recognizing her some keys to success and but also the importance of defining success.

35 years of service to the bank. Norris has spent many of “The main talking points were balance, attitude and hard her years with the Walhalla bank as a drive-thru teller and work,” he told those in attendance. “If you add all those is very personable and popular with customers. She was named assistant vice president in March 2004. Sen. Thom- up, you are setting yourself up for success.” as, R-Oconee, made the presentation on behalf of the South Carolina Bankers Association.

First Community Bank Baxter Donaldson, a commercial bankCarolina Alliance Bank er with First Community Bank in LexC. Kyle Thomas has joined Carolina ington, was recently honored with the Alliance Bank as executive vice presiprestigious Mike Till Award, given by dent and commercial banking officer. the Greater Lexington Chamber and Thomas brings nearly 25 years of bankVisitors Center. ing experience in the Upstate markets Donaldson was recognized for his to the bank, most recently as president leadership in the Lexington community. and CEO of Seneca National Bank, Along with the Rotary Club of Lexingwhich was acquired by new owners. ton, Leadership Lexington County, and the Greater Lexing“Kyle is a talented, hands-on banker ton Chamber and Visitors Center, Donaldson has been acand his strengths and experience will prove invaluable to tive with the Indian Waters Council of the Boy Scouts.

Carolina Alliance as we continue to expand our efforts in Till, who died in 2011 at age 50, was a beloved resident growing our business,” said John Poole, president and CEO of Lexington active in numerous civic and business organiof Spartanburg-based Carolina Alliance. “Kyle places a zations. great value on outstanding customer service, strengthenThe award bearing his name is given to an individual who ing customer relationships and community involvement.” exemplifies his humility, friendliness, perseverance and Thomas’s banking experience is centered in the Upstate dedication to the Lexington community. Donaldson is a market, primarily in management, administration and native of Metter, Ga., and a graduate of Georgia Southern commercial lending. Having worked in a leadership capaci- University.

32 Palmetto Banker

Personal Transactions successfully complete a rigorous examination demonstrating their aptitude Gordon A. Baird has taken over as president and chief exand expertise in anti-money laundering ecutive officer of Independence Bancshares Inc., the pardetection and enforcement. ent of Independence National Bank.

Francois earned a bachelor’s degree Baird, who will also serve one the Greenville-based comfrom the University of South Carolina pany’s board, has had an extensive career in banking and and joined the Columbia-based bank financial services. Baird began his career at John Hancock company in 2010.

Real Estate Finance in 1990, continuing with State Street Bank and Trust Company and Citigroup Global Markets, South Atlantic Bank Inc. He has extensive experience in bank regulatory issues South Atlantic Bank has appointed and payments, technology, consumer finance and capital Becky W. Bacot vice president and dimarkets. Baird replaces Lawrence R. Miller, who had rector of mortgage operations. Bacot’s served as president and CEO since Independence’s forresponsibilities include supervision of mation. However, Miller will continue as president and mortgage loan processing, underCEO of Independence National Bank. writing, and closings, and implementation of policy and procedures for mortgage loan compliance.

SCBT She is based at the bank’s main office Robert H. Demere Jr. has been appointat the corner of 29th Avenue North and Grissom Parkway ed to SCBT Financial Corp.’s board of in Myrtle Beach. Bacot brings more than quarter century directors. of experience to her new post. She began her career with “We are pleased to have Rob join our First Federal of South Carolina in 1986 as a loan producBoard of Directors,” said Robert R. Hill tion manager.

Jr., SCBT president and CEO. “His bankBacot joined Plantation Federal Bank in 1990 as vice ing and business background is a trepresident and director of mortgage lending and served mendous asset to our company.” there until 2012. A native of Marion, Bacot graduated Demere is president of Savannahfrom Francis Marion University with a bachelor’s degree in based Colonial Group Inc., a corporation that provides business management. wholesale and retail gas and oil.

Independence Bancshares Inc.

Chrissie Casas has been promoted to retail director by SCBT. Casas has more than 20 years of experience in the banking industry and has served in various roles, including teller, FSR, relationship manager, and operations manager.

She joined SCBT in 2003 as vice president and branch manager of SCBT’s Bluffton office. She was later promoted to senior vice president and retail market leader for Beaufort County, leading to her current promotion as the retail director for the bank. A native of Ventura, Calif., Casas currently resides in Lexington and attends Radius Church. She has been married to Ron Casas for 22 years and they have two daughters.

Carl Francois of SCBT was recently awarded the CAMS credential by the Association of Certified Anti-Money Laundering Specialists.

The CAMS (short for Certified Anti-Money Laundering Specialist) designation is awarded to professionals who

South Atlantic Bank has announced the promotions of Leah Mazurkiewicz, (top) to customer service representative at the bank’s Murrells Inlet office and Lauren Griffin (bottom) to deposit operations specialist at the main office.

Mazurkiewicz most recently served the bank as a teller at the main office in Myrtle Beach. Prior to joining South Atlantic Bank, she was the manager of the Heart to Heart Boutique at Coastal Grande Mall. A native of Conway, she is a graduate of Carolina Forest High School and earned a bachelor’s degree in communications from Coastal Carolina University. In the community, Mazurkiewicz serves as a volunteer with the Conway Chamber of Commerce.

Griffin joined South Atlantic Bank as a teller in 2008 and has nearly 12 years of business experience. Prior to joining See People on the Move, next page

33 Palmetto Banker

Personal Transactions South Atlantic Bank, she served as the office manager for Premium Petroleum Company from 2004 to 2008. She is a graduate of Westchester Community College in Westchester, N.Y., with an associate’s degree in liberal arts. The Westchester native has resided along the Grand Strand for four years.

from 2007 to 2011, and was a customer service representative for Southcoast Community Bank in Charleston from 2011 to 2012. She resides with her family in Myrtle Beach.

David Lominack, TD Bank’s Upstate market president, was given the Special Chairman’s Award for community leaderKarla Marion has joined South Atlantic Bank as a teller at ship contributions during the Greenville Chamber of Comits main office at 630 29th Avenue North in Myrtle Beach. A merce’s annual meeting in late February. Lominack is vice native of Myrtle Beach, Marion brings five years of busichair of the United Way Palmetto Society, an organization ness experience to her position with South Atlantic Bank. in which ordinary people with extraordinary visions come She served as a customer advisor for HTC in Murrells Inlet together to make their communities the best they can be.

Index of Advertisers AloStar

4

Community Bankers Bank 26

MountainSeed Appraisal Management

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BDC/CDC

34

Credit Risk Management

CenterState Bank

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Diebold, Inc.

30

North American Merchant Services

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34 Palmetto Banker

2

Calendar of Events What’s Coming Up April 2013

May 2013

June 2013

15-17

SCBA Washington Trip/ABA Government Relations Summit, Washington, D.C.

1

9-12

23

Bank Directors & Managers Workshop, Courtyard Marriott @ 9 USC, Columbia, S.C.

23

SCBA Asset Liability Conference Clarion Town House Hotel, Columbia, S.C.

Teach Children to Save Day, Across South Carolina 25

25

SCBA Credit Conference Courtyard Marriott @ USC, Columbia, S.C.

SCBA Trust Conference Columbia Conference Center, Columbia, S.C.

SCBA Asset Liability Conference Clarion Town House Hotel, Columbia, S.C.

113th SCBA Annual Convention The Sanctuary, Kiawah Island, S.C.

July 2013 14-19

S.C. Bankers School Lander University, Greenwood, S.C.

September 2013 23

Young Bankers Division Golf Tournament, The Members Club, Elgin, S.C.

Intangible Value “principles of safe and sound banking” so require.

OCC real estate lending guidelines state that “an institution’s real estate lending program should include an appropriate real estate appraisal and evaluation program.”

The Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) imposed additional requirements on institutions subject to OCC regulations by “requir[ing] each institution to adopt and maintain written real estate lending policies that are consistent with principles of safety and soundness and that reflect consideration of the real estate lending guidelines.”

What this exactly means is unclear.

The irony in the evolving regulatory approach described above is apparent. On the one hand, regulators are trying to ease credit for a distressed real estate industry. On the other hand, the application of the regulatory approach described above will almost necessarily lower the property’s real estate value and encourage financial institutions to reduce available credit or raise interest rates.

Since the 2008 crash, lenders have been discouraged from using raw land as collateral for real estate loans. In many markets, credit for non-incoming producing property is very difficult to obtain. Consequently, many lenders have rushed to move as much of their portfolio as possible to income producing properties. In the interest of promoting “safe and sound banking practices,” regulatory authorities are simultaneously promoting new regulations which clearly will reduce the values of income producing

properties by extracting intangible value.

The question which must be asked is whether these new regulatory policies are really encouraging credit or hampering the recovery of the real estate industry from a historic downturn.

The increased emphasis on BEV may also impact banks in other ways. For example, the due diligence for many contemplated mergers or acquisitions of smaller community banks will focus on the target’s books.

One potential question is “how clean are the target’s real estate lending books if the underwriting files do not contain appraisals that recognize the existence of BEV and attempt to address this component of value?”

The absence of such appraisals could impact the ability to sell participations in real estate loans or raise capital.

Predicting the impact of the absence of such appraisals is, at best, difficult. The arguments surrounding component analysis and the proper method of calculation are about risk. Component analysis recognizes the reality that different components of real estate centric businesses involve different amounts of risk.

Mathematically calculating that risk, for whatever purpose, is difficult to do, leading to heated arguments about methodology – arguments that remain unresolved.

Since the 2008 crash, lenders have been discouraged from using raw land as collateral for real estate loans.

(Morris Ellison is a partner with the law firm of Womble Carlyle Sandridge & Rice in Charleston. His practice includes commercial real estate transactions, commercial litigation and banking law.)

35 Palmetto Banker

Welcome, New Associate Members Consolidated Banking Services, Inc. 525 Industrial Way, Suite B Cumming, Ga., 30040

IDentity Theft 911 7580 N. Dobson Road, Suite 201 Scottsdale, Az., 85256

Contact: Taryn Fox 525 Industrial Way, Suite B Cumming, Ga., 30040 Phone: 770.292.9922 Email: tarynfox@cbs-i.com Website: www.cbs-i.com

Contact: Nate Spurrier 205 Fox Chapel Drive Irmo, S.C., 29063 Phone: 803.201.9165 Email: nspurrier@idt911.com Website: www.idt911.com

CBSi of Cumming, Ga., is IDentity Theft 911 is the dedicated to providing the nation’s premier consulbest service and sales tative provider of identity available for traditional and data risk manageand electronic bank ment, resolution and education services. The company security equipment. serves 17.5 million households across the country and proWith an average for 25 years’ experience, our technivides fraud solutions for a range of organizations, includcians can service ALL makes and models of vault, drive up, ing Fortune 500 companies, the country’s largest insurcash handling, and alarm/CCTV/access control equipment. ance companies, corporate benefit providers, banks and Our equally qualified sales consultants will provide the credit unions and membership organizations. Since 2005, best solutions for all of your equipment needs. the company has helped more than 600,000 businesses manage data breaches.

Diebold, Inc. 5995 Mayfair Rd. North Canton, Ohio, 44720 Contact: Kevin White Phone: 704.905.4216 Email: Kevin.white@diebold.com Website: www.diebold.com As a global technology leader and innovative services provider, Diebold, Inc. delivers the customized, integrated security and self-service solutions that position financial institutions to achieve the highest levels of efficiency, reliability and security.

For more than a century and a half, Diebold has been a trusted name in the industry because of the partners who support our organization and the customers who foster our innovation.

To learn more about how Diebold’s portfolio of solutions can help drive your business forward, visit Diebold’s website at www.diebold.com.

North American Merchant Services, Inc. Two Town Square Blvd., Ste. 300 Asheville, N.C., 28803 Contact: Brian Chapman Phone: 828.687.0687 Email: bchapman@namerchatntservices.com Website: www.namerchantservices.com North American Merchant Services, Inc. (NAMS) has been a leader in the electronic payment-processing industry for more than a decade. Asheville, N.C.-based North American Merchant Services partners with community banks to offer credit card processing services for businesses of all sizes.

We work directly with your bank to build and grow a merchant program dedicated to serving your existing and potential business banking customers.

Customers benefit by fast, reliable credit card processing with personal, 24/7 local customer service, while our banking partners benefit through an added revenue stream and a partner who shares the same values of customer service.

37 Palmetto Banker

Welcome, New Associate Members Pelmetta Performance Solutions, Inc. 677 N. Washington Blvd., Ste. 67 Sarasota, Fla., 34236

Smith Debnam 4601 Six Forks Rd., Ste. 400 Raleigh, N.C., 27609

Contact: C. Edward “Ed” Tucker 2209 Bar Ridge Pond Columbia, S.C., 29223 Phone: 803.865.0906 Email: ed@pelmetta.com Website: www.palmetto.com

Contact: Trevor M. Hughey Phone: 919.250.2227 Fax: 919.250.2100 Email: thughey@smithdebnamlaw.com Website: www.smithdebnamlaw.com Smith Debnam is a midsize Carolinas law firm located in Raleigh. We represent both national and local clients in the areas of corporate law, commercial and consumer collections, equipment leasing and finance, business litigation, creditors’ bankruptcy, real estate, construction law, business and corporate law, employment law, wills and estate planning, family law, and immigration. The diverse experience of our attorneys gives us exceptional insight into our clients’ operations and needs. Many of our attorneys are board-certified specialists in their practice areas and all of our attorneys regularly attend continuing legal education seminars and professional conferences to keep abreast of the current legal landscape and relevant industry trends and news.

Pelmetta Performance Solutions, Inc. is a thought leader and a premier sales and service performance solutions firm built on the success of our clients across the U.S. and Canada. We are former bankers ourselves and understand the challenges and opportunities within today’s financial services market. The Pelmetta Partners have 25+ years of organizational development experience. We have helped financial institutions large and small lift performance by executing a process that enables employees to deliver superior service and achieve exceptional results. We are a performance-enabling firm specializing in the areas of culture transformation and integration, leadership effectiveness, coaching, sales and-service WB Brawley Company quality, employee and customer engagement, and devel102 Eastwood Road, DZ opment.

Wilmington, N.C., 28403

SC State Housing Finance and Development Authority 300-C Outlet Pointe Blvd.

Columbia, S.C., 29210

Contact: Bruce Brawley Phone: 910.452.2195 Email: wbbrawley@wbbrawley.com Website: www.wbbrawley.com

WB Brawley Company has been managing facility projects since 1992. Our vision is to be a resource organizations trust to solve the challenges they face with their facilities. We design, construct, renovate and furnish facilities. We underFor more than 40 years, the South Carolina State Housing stand the challenges of working in operating and revenue Finance and Development Au- generating facilities, the challenges of communication and thority (SC State Housing) has coordination with all the stakeholders and the importance helped South Carolinians find of deadlines. Our role is to deliver a successful project by effectively managing all service and product suppliers so quality, safe and affordable housing. The South Carolina State Housing Finance and Development Authority makes that scope, schedule and cost objectives are met. Whether mortgage loans to sponsors of affordable multifamily rent- it involves determining which design elements drive a project’s success or developing strategies for pursuing green al units and enables first-time and special needs home building goals, we are committed to finding solutions. buyers to get their piece of the American Dream.

Contact: Clayton Ingram Phone: 803.896.9520 Email: clayton.ingram@schousing.com Website: www.schousing.com

38 Palmetto Banker

South Carolina Bankers School 2013 South Carolina Bankers School July 14-19, 2013 Lander University

The South Carolina Bankers School challenges students to learn more about their responsibilities as bankers while preparing them for future advancement within the industry. Students acquire a better knowledge of the total scope of their organizations and the role the financial services industry plans within the national economy. The school consists of a three-year progressive course of introduction with a one-week resident session each year. The school is ranked among the pre-eminent institutions of its kind in the nation, with thousands of Palmetto State bankers have enrolled and graduated from program over the past half century.

For more information: Please contact Teresa Taylor at the South Carolina Bankers Association at 803.779.0850.

South Carolina Bankers Association (2009 Park Street) Post Office Box 1483 Columbia, South Carolina, 29202-1483

2013 South Carolina Bankers Association Annual Convention June 9-12, The Sanctuary, Kiawah Island, South Carolina