the
THIRD QUARTER 2012
b a n k e r
MAKING OUR VOICES HEARD THE MARYLAND BANKPAC
THE OFFICIAL PUBLICATION OF THE MARYLAND BANKERS ASSOCIATION
With its customers under water, Diebold went where it had to go. Above and beyond.
In the aftermath of Hurricane Katrina, Diebold assembled a comprehensive unit to respond to every customer without exception. It’s another example of Diebold doing more to build relationships. Relationships that have inspired us to become leaders and innovators in the banking industry for more than 150 years. For the entire story, visit diebold.com/boldservice. 1.800.806.6827 diebold.com requests@diebold.com
Chairman Michael L. Middleton Chairman & CEO Community Bank of Tri-County
the
b a n k e r
Chairman-Elect Robert A. DeAlmeida President & CEO Hamilton Bank Vice Chairman John A. Scaldara, Jr. Chairman, President & CEO The Columbia Bank
Making Our VOices Heard
Contents
the Maryland BankPaC
The Official PublicaTiOn Of The Maryland bankers assOciaTiOn
Past Chairman Mary Ann Scully Chairman, President & CEO Howard Bank President & CEO Kathleen M. Murphy
Third QuarTer 2012
186 Duke of Gloucester St. Annapolis, MD 21401 410-269-5977 / 800-327-5977 www.mdbankers.com
Maryland Bankers Association
Publication Editor Cynthia L. Gentilcore Maryland Bankers Association
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Board of Directors George J. Behr, Jr. President, Arundel Federal Savings Bank
cover Making Our Voices Heard
Moving the Dial with Maryland BankPAC
Andrew M. Bertamini Regional President, Maryland Market, Wells Fargo Bank, N.A. James R. Bosley, Jr. President & CEO, Farmers & Merchants Bank Ralph W. Emerson, Jr. Senior Vice President, M&T Bank Raymond W. Hamm, Jr. Executive Vice President, PNC Bank, N.A. Michael E. Hough CEO of Maryland Division, Susquehanna Bank Kim Liddell Chairman, President & CEO, The National Bank of Cambridge Michael G. Livingston President & CEO, The Bank of Glen Burnie Philip E. Logan President, Chairman and CEO, Slavie Federal Savings Bank Carissa L. Rodeheaver, CPA, CFP Executive Vice President & CFO, First United Bank & Trust Daniel J. Schrider President & CEO, Sandy Spring Bank Raymond M. Thompson President & CEO, Calvin B. Taylor Banking Company William J. Toomey, II Regional President – Baltimore Metro Region, BB&T Kelly Whitley Vice President, State Government Relations, Bank of America J. Scott Wilfong Chairman, President & CEO, SunTrust Bank, GW/MD
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message from the immediate past chairman No Apologies, Please 4 message from the chairman Transitioning to a New Beginning
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message from the president Leadership Through Focus and Resolve
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maryland bank services featured partner Energy Insights: What Determines Electricity Prices? 8 Regional Meetings
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proud to be a banker Harford Bank Takes up the Banner on National Campaign 11
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departments: news and notes 18 Professional Development Calendar 22
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Third Quarter 2012 | 3
Message from the Immediate Past Chairman MARY ANN SCULLY | MBA IMMEDIATE PAST CHAIRMAN CHAIRMAN, PRESIDENT & CEO HOWARD BANK
No Apologies, Please
I
n my year as chair of the Maryland Bankers Association, I’ve seen the continued misguided attempts by some of our government leaders to address the painful results of a deep economic downturn with expensive, if not crippling, regulations. I have also seen a continued polarization of public sentiment leveled against the banking industry – public sentiment fed by ignorance and enflamed by partisanship. But I’ve also seen the great value – not to mention common sense and commitment – that our association brings to the table. I saw us this year move forward in our mission of “taking back” our industry and not allowing its image to be sullied intentionally or accidentally by those who have never been bankers. One of the attributes that I most value in the association is its inclusiveness and its focus on open communication. And we heard from many of you this year that you value that communication and that willingness to listen in order to influence as well. It is a major reason for our successes. Given this philosophy, one of the outstanding qualities of our association’s mission is that we represent all banks – not just large ones or small ones. Much of the power of the industry is in its diversity. And we have developed partnerships with industry groups that don’t necessarily share all our views. As a result, we believe that we have been able to influence some of the tone and tenor of the conversations around the future of the industry and that we have a better chance of continuing to do so than if we 4 | The Maryland Banker
did not believe so passionately in keeping a dialogue going. We have spent a great deal of time focused on an internal dialogue as well – that of member engagement. In his column in this issue, our incoming chairman, Mike Middleton, stresses the importance of engagement. Without it, our organization is not sustainable. Maryland is a small state with a relatively small potential membership base. Maryland has seen more consolidation in the banking industry than most other states. And all of our members face greater financials challenges in 2012 than they did in 2005. So input from all members in multiple forums becomes all the more important. In this past year, the association has served as a very effective advocate for the industry in the forum of legislation. We have been able to get pro-industry bills passed – not just to quash bills that would have been detrimental to our member banks. In advocacy as in other matters, we do not want to be solely on the defensive, but to be an active partner in the legislative process. The reemphasis on the Maryland Banking School brought in more students this past year. Our members showed that they see the long term value associated with training our future leaders The refocusing of Maryland Bank Services Inc., our wholly-owned subsidiary, helped us to determine which partnerships are most valuable to our members and the association. This year, we spent a lot of time defining what value that was and shifting the economic model accordingly.
One of our most consistent themes has also been to take a much more aggressive position on the industry’s image, and not to be apologetic or reactive. We, better than anybody, understand what we do in our communities every day. What would these communities look like without banks? My predecessor in the chairman’s post, Scott Wilfong, deserves the credit for continuing to raise this question. First, there wouldn’t be the same level of connectivity. Banks exist to match excess liquidity with opportunities for growth, not only for themselves but for their customers. Also, without banks’ presence, we would lose a major source of community leadership, in regard to bankers’ presence on non-profit boards, as well as volunteer hours and grants made in the community. We continue to solicit your help in getting out that message. Like all outgoing chairs, I now stand between the past and the future. The message of where would we be without banks has been linked to the message of where would our banks be without their association. We have stood tall; we have reached out; we have explained and hopefully we have enlightened. As Mike Middleton notes, the need to change never ends but each of you should be proud of what you continue to accomplish each and every day. You are re-capturing the standard. ■ Mary Ann Scully is the outgoing chairman of the Maryland Bankers Association. Reach her by email at mascully@howardbank.com.
Message from the Chairman MICHAEL L. MIDDLETON
| MBA CHAIRMAN CHAIRMAN & CEO COMMUNITY BANK OF TRI-COUNTY
Transitioning to a New Beginning If you want to reach the other shore, you have to lose sight of this one. — Lady Gaga
I
f anyone had told me in 2008 that I’d be quoting a decidedly unbankerly impresario/entertainer at the top of my first column as chairman of the Maryland Bankers Association, I would have said, “that’s not within the realm of the likely.” But look at what she said, and consider the value of the thought. And then consider what tremendous changes, once considered unlikely, have occurred in our industry since then. Change happens. You can’t change change. You can only manage the transition to a new beginning. That’s also the mantra of Bill Bridges, author of Managing Transitions. He, too, notes that “transition starts with an ending. You can’t grasp the new thing until you’ve let go of the old thing.” Customer demand, balance sheet reconfiguration and tremendous public policy pressures have resulted in an annealing process that has tempered our association. The process has encompassed consolidation, bank closures, contraction of bank spending on training and education, and evolving professional development needs, as well as increases
in the policy issues requiring the association’s focus and resolve. As the new realities of the banking industry come into focus, members and the association are looking forward, to the transitions and challenges we will face. Not in the sense of a collegial embrace, but in the sense of in a common phrase, getting our arms around these opportunities. We recognize that successful transitions in work and life involve an awareness that the way things used to be are forever changed. It is with this reality that the theme for the association in 2012-2013 is “Transitions,” embodied in the following goals: • Leverage the collective strength of the MBA’s members by encouraging greater involvement and engagement through member banks. • Be a timely and relevant resource to our members so that they may benefit from the association’s offerings and thus provide overall financial support of the MBA. • Serve as the Maryland banking industry’s tireless advocate at the state and federal levels of government,
with the media and with the public to achieve necessary changes to laws and regulations, and mitigate the risk of increasing public policy pressures. The forces facing our industry and our association could be considered formidable – increasing demands and shrinking resources. We need input from a lot more people than we’ve had before, and that means input from the bottom up. Bridges advises, “people aren’t in the market for solutions to problems they don’t see.” Leaders must first sell the challenge, not the solution. When that happens, the people who work with you and for you may come up with a better solution, and will take their own ownership of change. It is an honor to serve as your chairman for the upcoming year and face the change that is inevitable. The old shore is becoming more distant, and the new one is coming closer. Let’s all be prepared. ■ Michael L. Middleton is the chairman of the Maryland Bankers Association. Reach him by email at mikemid@cbtc.com.
Third Quarter 2012 | 5
Message from the President KATHLEEN M. MURPHY | PRESIDENT & CEO MARYLAND BANKERS ASSOCIATION
Leadership Through Focus and Resolve
I
t’s hard to believe we are nearly in the midst of summer! I hope that you are taking time in these warmer months to reflect and recharge. It’s important! We know that your work never ends. The impact that you make every day with your clients and in your communities has propelled our state toward economic recovery. I love the theme that MBA Chairman Mike Middleton has chosen this year: Transitions. The banking industry has been through a time of tremendous change since 2008, and, as a result, the Association has as well. He reminds us that change is the only constant. We are all looking at the world a little differently today – the new economy, new customer expectations, new regulatory pressures and demands. Change requires focus and resolve – it also requires tremendous leadership. I continue to be in awe of the way our members are leading their banks or lines of business – this banker leadership is embodied in the Association, as well.
As part of the Association’s Annual Convention each year, as has happened for 116 years, the membership has voted for a slate of officers and directors to lead the MBA. At the annual meeting earlier this month, we transitioned to a new board and officer team, which is uniquely configured and positioned to lead the association and the industry during this time of transition. These individuals are applauded for their involvement in and support of the MBA. We are grateful for their leadership. ■
What’s On Your Mind? It’s my honor to serve this great industry. Please contact me at any time to discuss industry issues of importance to you at kmurphy@mdbankers.com or 443-837-1601.
The 2012-2013 MBA OFFICERS CHAIRMAN
CHAIRMAN-ELECT
VICE CHAIRMAN
PAST CHAIRMAN
Michael L. Middleton Chairman & CEO Community Bank of Tri-County
Robert A. DeAlmeida President & CEO Hamilton Bank
John A. Scaldara, Jr. Chairman, President & CEO The Columbia Bank
Mary Ann Scully Chairman, President & CEO Howard Bank
6 | The Maryland Banker
The 2012-2013 MBA DIRECTORS
George J. Behr, Jr. President Arundel Federal Savings Bank
Andrew M. Bertamini Regional President, Maryland Market Wells Fargo Bank, N.A.
James R. Bosley, Jr. President & CEO Farmers & Merchants Bank
Ralph W. Emerson, Jr. Senior Vice President M&T Bank
Raymond W. Hamm, Jr. Executive Vice President PNC Bank, N.A.
Michael E. Hough CEO of Maryland Division Susquehanna Bank
Kim Liddell Chairman, President & CEO The National Bank of Cambridge
Michael G. Livingston President & CEO The Bank of Glen Burnie
Philip Logan President, Chairman and CEO Slavie Federal Savings Bank
Carissa L. Rodeheaver, CPA, CFP Executive Vice President & CFO First United Bank & Trust
Daniel J. Schrider President & CEO Sandy Spring Bank
Raymond M. Thompson President & CEO Calvin B. Taylor Banking Company
William J. Toomey, II Regional President-Baltimore Metro Region, BB&T
Kelly Whitley Vice President, State Government Relations, Bank of America
J. Scott Wilfong Chairman, President & CEO SunTrust Bank, GW/MD
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Energy Insights What Determines Electricity Prices? BY MICHAEL S. PAYNE, JD, LLM
Electricity prices change constantly – literally every five minutes, every day. A multitude of factors affect prices, some modestly, some dramatically. Some factors have a short-term impact while others are long lasting. For example, weather conditions, natural disasters and consumer demand influence electricity prices from one day to the next. Legislation, regulatory changes, generation efficiency, and electricity grid and infrastructure costs impact electricity prices on a longterm basis. Commodity investors and speculators have been a dominant force in electricity pricing. Remember in 2008 when oil prices were at $140 per barrel? Electricity prices peaked then, as well. The chart, top right, illustrates the long-term historical wholesale prices of electricity. Note the volatility and price trends. Since the worldwide financial crisis hit in the summer of 2008, electricity prices have generally trended downward to the point of today’s nineyear historical low. 8 | The Maryland Banker
$120.00 $100.00 $80.00 $60.00 $40.00 $20.00 $-
ar -0 Se 6 p0 M 6 ar -0 Se 7 p0 M 7 ar -0 Se 8 p0 M 8 ar -0 Se 9 p0 M 9 ar -1 Se 0 p1 M 0 ar -1 Se 1 p1 M 1 ar -1 2
What determines electricity prices?
Electricity - PJM Day Ahead Averages ($/mwh)
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istorically low electricity and natural gas prices are making headlines, but what lies ahead for the United States’ energy market? Electricity prices closely track natural gas prices, but the two are not completely synchronized. And, natural gas is used to generate a significant portion of the electricity consumed in the United States.
Disasters In 2005, the hurricane season produced destructive storms, most notably Rita and Katrina, and the cost of electricity skyrocketed. Since 2005, hurricane seasons have remained relatively calm and had minimal influence on electricity prices. Of course, hurricanes, earthquakes, winter storms, and other major weather events cause price volatility. In addition to causing prices to spike, natural disasters have ripple effects through the energy industry. For example, when an earthquake and tsunami devastated Japan in 2011, a nuclear meltdown ensued at Fukushima Daiichi Nuclear Power Station. In the United States, the Nuclear Regulatory
Commission reviewed the ability of domestic nuclear reactors to withstand natural disasters. As a result, several nuclear facilities were taken offline, and some new nuclear projects were abandoned at substantial economic loss to facility owners and local communities. Disasters are felt on a political and governmental level too. Democrats and Republicans often disagree in response to disasters, such as the Fukushima nuclear meltdown and the BP oil spill in the Gulf of Mexico. This causes delayed responses and additional costs to consumers. A bipartisan approach is needed to implement a national energy plan.
Legislation/Regulations A cohesive, harmonious energy strategy between government and the private sector on a nationwide level is pivotal for the U.S. to advance its energy markets. The Smart Energy Act of 2012 (H.R. 4017) and the Environmental Protection Agency’s Cross-State Air Pollution Rule both demonstrate the need for bipartisan legislation. Prudent regulatory measures must be developed and set into play to enhance growth and address environmental concerns. In the next decade, electricity pricing will continue to be affected by energy efficiency standards and power plant emissions restrictions. Opportunities exist for innovations and the creation of new products and services to meet these challenges.
most utilities will continually increase delivery tariff rates to cover costs.
Environmental effects The environmental consequences of coal mining, gas drilling, and power plant emissions affect electricity prices. In February 2012, the Nuclear Regulatory Committee approved two new nuclear power reactors for the first time in the USA since the partial meltdown at Pennsylvania’s Three Mile Island plant in 1979. Green or renewable generation, including solar, wind and hydro, continues to grow slowly. Most of our nation’s electricity is generated from coal-burning power plants. The EPA has cracked down on air pollution, imposing strict limits on environmental emissions from coal-burning plants.
Meanwhile, natural gas-fired power plants are less expensive to build and often less expensive to operate than coal-burning plants. In the last five years, natural gas drillers have produced an abundance of shale gas, which is now in storage and ready to be consumed. As electricity prices plummet, more power plants convert from coal to natural gas for electricity generation. Lower electricity prices also have the effect of slowing implementation of renewable generation because the costs of installing a green system remain high relative to the cost of traditional electricity.
Weather Across most of the U.S., the 20112012 winter season was exceptionally mild. Demand decreased for electricity
GF_Banker'sNewsletter 1/11/12 1:07 PM Page 1
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Infrastructure Who will pay for smart technology and necessary upgrades to our grid systems? Comprised of millions of individual meters and thousands of local networks, our electricity infrastructure is expensive, challenging to maintain and rapidly aging. Trillions of dollars must be invested nationally in the next few decades to upgrade from the current infrastructure to a modernized, fully interactive, self-healing Smart Grid. As utilities are required to rebuild transmission systems to ensure reliable delivery of electricity to homes and businesses, consumers will see electricity delivery costs rise to cover necessary expenditures. Just a few of many needed upgrades include reclosers, capacitor banks, voltage regulators, automated switches, smart meters, substation transformer monitors, distribution management system platforms, volt/ VAR optimization applications, and fault location, isolation, and service restoration applications. Some utilities are spending tens of millions per year. While federal stimulus funds have been issued to some utilities for upgrades,
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Third Quarter 2012 | 9
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to heat homes and businesses as outdoor temperatures were several degrees above normal. Lower demand pushed prices down. In situations when winter weather causes an increase in heating demand, electricity prices tick up. In the summer of 2011, record high temperatures plagued parts of the U.S. Texas was particularly hard hit. Hot weather significantly increases electricity demand as consumers operate HVAC units to cool homes, churches, schools, businesses and other buildings. The summer is when consumers participating in Demand Response Programs are most likely to be notified to reduce consumption during peak usage periods. At peak times, the grid system can become overwhelmed by consumer demand, which causes electricity prices to drastically climb and be extremely volatile.
Consumer demand Ultimately, electricity prices are affected most by the amount of consumer usage, and the time of day and season that electrons are consumed. Every day, grid systems across the U.S. work constantly to provide reliable supply to all consumers. Imagine the everincreasing demand for electricity for schools, institutions, individuals, businesses, government, and other consumers. It makes sense that electricity prices are highest during times of peak demand in the late afternoon, and lowest overnight when demand drops. In any case, usage is likely to steadily increase. â– Michael S. Payne, JD, LLM, is executive vice president and corporate counsel of Affiliated Power Purchasers International LLC (APPI Energy), an independent consulting firm that is endorsed by 140 affinity groups. Since 1996, APPI Energy has assisted more than 3,300 organizations with locations across the United States to reduce and manage energy costs. For unbiased advice, at no upfront cost to you, contact APPI Energy at 800-520-6685.
10 | The Maryland Banker
2012 MBA Regional Meetings It was a great turnout by our membership at this year’s Regional Meetings! We had over 200 attendees at the four regional meetings held in Hagerstown, Royal Oak, Sandy Spring, and Baltimore.
Harford Bank Takes up the Banner on National Campaign
H
arford Bank was looking for a new communications campaign when it became aware that the American Bankers Association (ABA) had launched one of its own – the Proud to be a Banker campaign. “It was a good time for us,” says Charles H. Jacobs, Jr., bank president and CEO. “Harford Bank set a goal of informing our stockholders, customers, employees and citizens in our community the benefits of a community bank and how proud we are serving our community.” Harford Bank has eight branches in two contiguous counties. It launched a promotional campaign utilizing five billboards in its market areas, a website home page, lobby brochures and signs, employee buttons and an online employee
survey, with results shared with employees. It also created and engaged a mid-level employee committee of six with a $3,000 budget. Harford also produced an informational customer brochure regarding the role of community banks. Among the facts listed: Its 67 employees and its directors participated in civic groups, leadership positions and other volunteer efforts, and charitable grants to 94 organizations in its communities. But it also addressed the larger issues of the role of community banks in the nation’s economic well-being, and the implications of federal regulation. The tab for Harford: just over $5,000 beyond the bank’s initial annual communications budget for the year because of the supportive efforts of the ABA. ■
Let the MBA know what your institution is doing for the Proud to be a Banker campaign. Send photos and information on your campaign to the MBA’s Cindy Gentilcore at cgentilcore@mdbankers.com. Third Quarter 2012 | 11
12 | The Maryland Banker
MAKING OUR VOICES HEARD MOVING THE DIAL WITH MARYLAND BANKPAC
By Christina P. O’Neill
E
ven some of the co-sponsors of the Dodd-Frank Act now admit that it would have benefited from more nuanced input from the banking and financial sector. Some lawmakers who voted for it now express voter’s remorse. That’s the take of political expert and litigator Lee E. Goodman, an attorney with the Washington, D.C., law firm LeclairRyan. He likens what he describes as a rush to legislate in a time of perceived political crisis to a runaway train that bankers and others in the financial services industry could not stop. That’s where trade groups like the Maryland Bankers Association (MBA) come in, he says. “They are necessary to watch and study legislation from its infancy and they must remain engaged with elected officials all the time.” He adds, “You cannot spring into action at the last minute and hope someone will hear you.” Breanna Olson is senior manager of the political involvement practice of the Public Affairs Council, based in Washington, D.C. “It’s unfortunate that sometimes it takes a crisis to emphasize the importance of an organization [and its members] being engaged,” she says. Successful advocacy requires a long-term approach to public affairs, before a crisis arises. Trade associations must make their presence known through PACs, grassroots efforts or lobbying teams. Organizations that get their calls returned by lawmakers are generally the ones that have been engaged beforehand. Mike Middleton, MBA chairman, and chairman and CEO of Community Bank of Tri-County, former chair of the Maryland BankPAC, says that the PAC did manage to make its voice heard during the financial crisis. Access to lawmakers during that period was critical, he says. “We moved the dial somewhat, and that’s the key,” he says. “Without access, you can only watch as somebody else shapes the conversation.” William Grant, chairman, president and CEO of First United Bank & Trust, concurs. “You’re either a participant or you lose,” he says. “Just being on the sidelines is no longer a viable option.” He observes the positive impact that good PAC participation has, both at the state level with the MBA and at the national level with the American Bankers Association (ABA).
The multiplier effect Funding individual candidates is the hallmark of a trade association PAC (see sidebar, page 15). Skeptics would say that PAC funds are bribes. This is not the case. “Congress by and large is comprised of overwhelmingly honest people,” Grant says. continued on page 14
Third Quarter 2012 | 13
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Rules of Engagement Lee E. Goodman is leader of the Government Relations, Election Law and Campaign Finance practices at the national law firm LeClairRyan. Here, he gives a primer on PACs.
Federal PAC There are two kinds of federal PACs. The first is a PAC that makes contributions to federal candidates. The second is a PAC that does not make contributions to federal candidates, but makes only independent expenditures to fund advertisements to elect or defeat candidates. The MBA has two PACs – federal and state – which make contributions to individual candidates. They raise contributions from individual employees of the member banks of the MBA, and they use those funds to make direct contributions to candidates. Federal law strictly restricts who can donate to a federal PAC that makes contributions to federal candidates. The law also limits how much money they can donate to the PAC and how much money the PAC can in turn contribute to a federal candidate’s campaign. Goodman notes that the Maryland BankPAC can solicit contributions from individuals only if the member institution grants Maryland BankPAC permission. When permission is granted by the chairman, president, and/ or CEO of the member institution, materials are provided for distribution within the bank. These individuals must donate using their own personal funds. Banks cannot make contributions for them and cannot reimburse their employees’ contributions to the PAC. Each individual can contribute up to $5,000 per year to the MBA’s federal PAC. (Federally-chartered financial institutions, including national banks and thrifts, are prohibited from making corporate contributions to political action committees and to candidates for public office in connection with any U.S. election – federal, state or local.) The PAC can donate up to $5,000 per election to a federal candidate. Federal law recognizes that there typically are two elections each cycle, a primary election and a general election, so the PAC can donate up to $10,000 per election cycle ($5,000 for the primary and $5,000 for the general election). All of these contributions are publicly reported on the website of the Federal Election Commission. There is complete transparency, Goodman states. Editor’s Note: Lee E. Goodman has authored several articles on the regulation of political activity, including a chapter on federal regulation of political speech on the Internet in the book Law And Election Politics: The Rules of the Game (Lynne Reinner Publishers 2004).
14 | The Maryland Banker
Olson says the upsurge in PAC activity by the banking industry after financial reform was enacted surpassed that of many other industries. PACs that raise more money can spend more money – however, the spending-per-candidate limits have not changed. For a trade association’s federal as well as state PACs, both have contributing and fundraising limits. But while a trade association PAC may be limited in the amount of money it can direct toward each candidate, it represents hundreds of individuals pooling resources – and that signifies votes. PAC contributions create a multiplier effect, Middleton notes. “If someone is going to give money to a PAC, they will take their family to the voting polls. They become more engaged,” Middleton says. Additionally, Maryland’s proximity to the nation’s capital gives the association an advantage not shared by more distant PACs – increased access to lawmakers. “We get to see them in between sessions, recesses and the whole route,” he says.
Broadening the base of support However, today’s tendentious political climate has made bank employees skeptical of what’s going on in Washington and in state capitals. So, what’s the best way for a bank that’s involved with a PAC to broach the subject of PAC support to the rank and file? Grant’s First United Bank & Trust is a state-chartered bank. Under state election rules, the state-chartered bank is allowed to contribute $4,000 of corporate money in an election cycle. First United Bank & Trust currently contributes $1,000 each year to Maryland BankPAC. Additionally, the bank solicits personal contributions from board members, its advisory board, officers and management at vice presidential levels and above. Grant says directors and executives participate fully, and vice presidents and advisory board members are at about the 80 percent mark. However, he does say it’s a delicate balance. Some employees are philosophically opposed to engaging in anything political at work. “That’s fine,” Grant says. “We take our political stands, we tell people it’s important to be engaged.”
Only two people in the bank know who participates and who doesn’t, though the overall level of participation is disclosed. This firewall of privacy is intended to dispel a misperception that employees who contribute more to the Maryland BankPAC might be more likely to get a promotion, Grant says. As for the rank and file, the bank holds new-employee and board of directors’ orientations and suggests a modest contribution of 50 cents per biweekly pay period. “What’s important for us, when we talk to Congress, is that [PAC support] isn’t just a few individuals. This is 200 associates, not just the top [echelon].” Associate-level participation stands at 60 percent. Strong PACs involve director and employee campaigns such as the First United campaign and they are easy to do, according to the MBA. At Harford Bank, the outreach effort is also regarded as a delicate balance. Harford became a state-chartered bank in 2001, and currently makes an annual $1,000 corporate contribution to the Maryland BankPAC. Bank President and CEO Charles H.
Maryland State BankPAC The Maryland State Board of Elections governs the MBA’s state PAC and establishes who can contribute, the limits on those contributions in a four-year cycle, as well as limits on the amount of support the Maryland BankPAC can give to candidates. The PAC can donate up to $6,000 per election cycle to a state candidate. An individual person and/or corporation may contribute directly or indirectly no more than $4,000 to one political committee – for example, the Maryland BankPAC – and a total of $10,000 to all political committees during a four-year cycle. A PAC can contribute $6,000 to the MBA’s state PAC in a four-year cycle. (Federally-chartered financial institutions, including national banks and thrifts, are prohibited from making corporate contributions to political action committees and to candidates for public office in connection with any U.S. election – federal, state or local.) The four-year cycle is determined by the gubernatorial election and begins January 1 after the election and ends in the year of the next election. The Maryland BankPAC communicates these rules to members as part of its state fundraising efforts and tracks contributions and expenditures with detailed PAC software. Just as at the federal level, state reporting requirements are carried out by Maryland BankPAC with the Maryland State Board of Elections. Sources: Maryland State Board of Elections and the Maryland Bankers Association.
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Third Quarter 2012 | 15
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Jacobs Jr., writes an annual email letter and distributes PAC information to all management at vice president level and higher. He cites a “fine line” of sensitivity regarding the outreach effort and names a moderate figure for upper-management giving that he emphasizes is only a guideline. With that in mind, is supporting the PAC worth the effort? “Absolutely,” he says. “As a result of participating in BankPAC, we have a daily seat at the table to provide input and educate elected officials on legislation affecting Maryland banks. … We don’t win all of them, we don’t lose all of them, but at least we have a seat at that table.” Jacobs also cites what he sees as a great working relationship between the MBA and the ABA, whose PACs are affiliated. It’s a widely-stated observation that for every letter-writer to Congress, there are 10 more people who share the same view but don’t write. Grant commends the national and state association’s websites and their letter-writing process, and urges employees to visit MBA and ABA web sites and craft a letter.
Finding your voice John Scaldara, Jr., chairman, president and CEO of The Columbia Bank, is also pleased with the MBA and ABA letterwriting campaigns. “I like the personal touch. I like to call them,” he says. The result: lawmakers respond. Lawmakers, he says, “want to see that you’re organizing and providing broad-based support. To get your message heard, you have to have the money to effectively deliver [it].” The way the system works may not appeal to everyone, but it is political reality, he says. He echoes the sentiment that the access that PACs provide is better than not participating in the process. The past three to five years, and the next decade, will be critical in terms of advocacy because the banking environment has the potential to change dramatically. He predicts extraordinary changes in the way banks interact with consumers that will be driven by the new Consumer Financial Protection Bureau. “Without a voice in that process [the industry incurs] greater risk,” he says. “The Maryland BankPAC and the dollars it raises give us the ability to step forward and participate in the process.” ■
2012 Maryland BankPAC Contributors as of May 2012 Includes banks whose employees have made individual contributions in 2012 Baltimore County Savings Bank Bank of Ocean City Bay Bank, FSB Calvin B. Taylor Banking Company CNB Community Bank of Tri-County Farmers and Merchants Bank First United Bank and Trust Hamilton Bank Harford Bank Homewood Federal Savings Bank Howard Bank M&T Bank Maryland Financial Bank Monument Bank New Windsor State Bank OBA Bank Old Line Bank Provident State Bank Queenstown Bank of Maryland Sandy Spring Bank Slavie Federal Savings Bank
Resourceful. Responsive. Reliable.
SunTrust Bank (Good Gov’t Mid-Atlantic PAC) The Columbia Bank (Fulton PAC)
Celebrating 25 Years as Your Strategic Partner, Never Your Competitor
The Bank of Glen Burnie The National Bank of Cambridge The Peoples Bank Woodsboro Bank
www.CBBonline.com
16 | The Maryland Banker
410.356.4876
For more details on how your bank can participate in Maryland BankPAC, please contact Maryland BankPAC Treasurer Lynn Mitchell at 443-8371603 or lmitchell@mdbankers.com.
"Continued professional development is an essential component of individual success and high performing banks. The Maryland Banking School is an outstanding educational source, providing a diversity of industry specific knowledge, along with peer networking opportunities. The interaction amongst students, faculty, and MBA staff creates an excellent environment for learning, while having fun and building relationships that often last a career and lifetime."
- Robert E. Kafafian, President & CEO, The Kafafian Group, Inc. and
Faculty, Maryland Banking School
The Maryland Banking School
Celebrating 37 Years of Developing Quality Bankers!
Maryland Banking School July 30—August 3, 2012
The Inn & Conference Center University of Maryland University College For more information, visit www.mdbankers.com!
News &
Notes
Members in the Community institution based upon a complex formula factoring in current and historical data. The first level of evaluation is the capital level of the institution followed by other relevant data including but not limited to: profitability, historical trends, loan delinquencies, repossessed assets, reserves, regulatory compliance and asset quality.
2012 Influential Marylanders Honorees
From left: Cynthia DuRant, community affairs specialist, FDIC; Lou Giustini, president of the Hagerstown Trust Division of The Columbia Bank; Lynne Cueto; and Shanda Smith, vice president and divisional manager of the Hagerstown Trust Division of The Columbia Bank.
The Columbia Bank presents Lynne Cueto, a customer of their Long Meadow Office in Hagerstown, with a $500 certificate of deposit. Lynne was one of the many customers who participated in The Columbia Bank’s America Saves Week Campaign, which ran from Feb. 21-29. During the campaign, The Columbia Bank opened a total of 119 new savings type accounts with over $1.4 million deposited. Del Karfonta, executive vice president of The Columbia Bank, was selected as one of approximately 40 members of the 2012 Leadership Council for the Cystic Fibrosis Foundation. The foundation received a large number of nominations from across the country, Del Karfonta with many outstanding candidates among them. Their goal is to recognize the top volunteers in the country for their extraordinary contributions and the significant impact they have had on the foundation. The council provides guidance to the next generation of volunteers and assists with fundraising efforts for the foundation. Each member is approved by the foundation’s Nominating and Governance Committee and the Board of Trustees. Karfonta was chosen to represent the Maryland Chapter.
St. Casimirs Savings Bank Two Major Milestones St. Casimirs Savings Bank announced the accomplishment of two major milestones for their bank. Chartered in 1911, the bank celebrated its 100th anniversary serving the citizens of eastern Baltimore City Harford County. Secondly, the bank was recently awarded the BauerFinancial Inc. Five-Star Award for the 89th consecutive quarter. BauerFinancial star ratings classify each 18 | The Maryland Banker
This year the Daily Record hosted its annual Influential Marylanders event on March 29 at The Grand Lodge in Cockeysville. The Daily Record created the award in 2006 to honor people who have made significant, statewide impacts in nine key segments of the state’s civic, commercial and professional activity: civic leadership, communications, education, finance, health care, law, philanthropy, real estate and technology. A tenth category, freestyle, include those honored for their influence in other areas. The MBA congratulates the following three members who were honorees in the following categories: Finance Andrew Bertamini, Wells Fargo Bank, N.A. Mary Ann Scully, Howard Bank Law Sheila Sachs, Gordon Feinblatt LLC
Sandy Spring Bancorp Named to Forbes List Sandy Spring Bancorp, Inc. was again named to Forbes magazine’s “Most Trustworthy Companies.” “To have Sandy Spring Bancorp be one of approximately 15 companies to make the Forbes Top 100 Most Trustworthy Companies list again is truly gratifying,” said Daniel J. Schrider, president and CEO. “The strength of our company can be found in its core values of relationship, integrity, community, drive for performance and teamwork, principles that have been our foundation for almost 150 years. We are privileged to be listed among such outstanding companies across the nation and offer congratulations to our fellow honorees.”
Computer Services, Inc. Recognized MSPmentor recognized Computer Services, Inc. (CSI) as one of the 10 largest managed service providers in its annual Top 100 Global Managed Service Providers List, based on the results of MSPmentor’s fifth annual survey, which ran October 2011 through December 2011. CSI is a leading full-service bank technology provider for comprehensive data processing and Internet banking solutions. To read more or for more information on CSI, visit www.csiweb.com.
Severn Savings Bank Empowers High School Students
SNL’s 2011 Ranking of Top 100 Community Banks
Severn Savings Bank kicked off their new initiative at Annapolis High School in April to bring financial literacy education to high school students across Anne Arundel County by providing them with access to the EverFi Financial Literacy Platform. This web-based program uses the latest in new media technologies – video, animations, 3-D gaming, avatars and social networking – to bring complex financial concepts to life for today’s digital generation. Through the EverFi platform, students will become certified in over 600 topics in financial education, allowing them to become more informed, responsible citizens. Severn Savings Bank partnered with EverFi to bring the interactive financial management program to these high school students at no cost to the schools. The 10unit course offers six hours of programming aimed at teaching, assessing and certifying students in a variety of financial topics including credit scores, insurance, credit cards, student loans, mortgages, taxes, stocks, savings, 401Ks and other critical concepts that map to national financial literacy standards. The platform uniquely tracks the progress and score of every student and provides students who successfully complete the course with Certification in Financial Literacy, a valuable mark of distinction on college applications and resumes. EverFi is a preferred provider of the Maryland Bankers Association. If you would like to learn more about EverFi and how your bank can get involved, contact MBA’s Joanna Weinreich at jweinreich@ mdbankers.com or (443) 837-1608.
Congratulations to member banks Eagle Bancorp Inc and Old Line Bank, which were ranked in the top 100 of SNL’s 2011 best-performing community banks between $500 million and $5 billion in assets.
CFG Community Bank Opens New, Full-Service Branch
CFG Community Bank’s ribbon cutting event at its new Lutherville Branch.
CFG Community Bank opened a new branch in the LuthervilleTimonium area. A ribbon-cutting event was held on May 9 with a grand opening event held May 12 for area residents and surrounding businesses. The event had a complimentary BBQ for the first 200 guests, activities for children and families, and provided current and prospective customers the opportunity to tour the bank and get a sneak peak of its product offerings and special promotions. Attendees were encouraged to bring their spare change to the event to participate in CFG Community Bank’s Coin Pond Challenge. The bank’s free coin counter turns loose change into dollars, and customers who used the machine during the event had the opportunity to donate a portion of that money to Maryland Food Bank’s School Pantry Program, or open a savings account at the bank; CFG Community Bank matched 10 percent of the total donation (up to $25), which ran through the end of May.
“Proud to be a Maryland Banker” Pins – Wear it proudly! Order for employees at your institution today! From left: Annapolis High School principal Donald Lilley; EverFi COO Jon Chapman; school board member Eugene Peterson; Anne Arundel teacher specialist for business education Dorothy Brown; Severn Savings Bank’s Community Reinvestment Officer Kevin Carter; branch manager Vanessa Donaldson; senior vice president JD Zachry; and the MBA’s Joanna Weinreich.
For more information, contact the MBA at 410-269-5977. (Can also be customized for your institution.) Third Quarter 2012 | 19
News &
Notes
continued from page 19
MBA and its Members Take on Capitol Hill
president where he will oversee Pittsburgh-based PNC’s branches in the Southeast. Both Cestello and Gamble will be based in Baltimore.
Bryan McDonald
PNC named Bryan McDonald as manager of its Green Branch in Locust Point. McDonald has been in banking for four years, and with PNC Bank since 2008. His background includes more than a decade in customer service, management, and finance and lending.
Mike Hough was promoted to CEO of Susquehanna Bank’s Maryland division. In his new position, Hough oversee operations in Maryland, West Virginia and Bedford, Fulton and Franklin counties in Pennsylvania. He will also be responsible for all of Susquehanna’s large Mike Hough commercial real estate deals in Maryland, West Virginia, New Jersey and Pennsylvania. On March 19-21, MBA, bankers and state counterparts from across the country traveled to Washington D.C. for the ABA’s annual Government Relations Summit. MBA and member bankers took on Capitol Hill by meeting with all 10 members of Maryland’s Congressional Delegation and/or their bank policy staff regarding our position on the issues facing the banking industry. And, on April 25-27, MBA, bankers and state counterparts joined the Independent Community Bankers of America (ICBA) for its annual Washington Policy Summit on Capitol Hill to meet with regulatory agencies and Maryland’s Congressional offices to advocate pertinent federal issues affecting the financial industry, specifically community banks.
Members on the Move
Raymond W. “Chick” Hamm, Jr.
Raymond W. “Chick” Hamm, Jr. was promoted to PNC’s executive vice president, assuming additional responsibilities for overseeing and growing PNC’s commercial banking operations on the Eastern Shore and Southern Maryland. He also will continue in his current role as market executive for Harford and Cecil counties.
PNC named Laura Gamble as its regional president for the greater Maryland region, including the Baltimore area. Gamble is well known in Baltimore banking circles from her years as Maryland regional president for Bank of America. Gamble succeeds Lou Cestello at PNC. Cestello was elevated to regional 20 | The Maryland Banker
Maryland Banking Directory Online Edition The MBA announced in February an improved member benefit for its members – the Maryland Banking Directory online edition. The new format includes added benefits, such as: • More up-to-date information – MBA information will be updated in real time and banking institution information updated quarterly, rather than annually. • Available to all MBA members and its employees, without the expense to members of purchasing additional copies of the printed version. The online version of the popular directory also includes the same valuable information found in the print format, including: • MBA member, board and staff information • MBA council and committee information • Listings of banking institutions • Information on other financial trade associations • Information on government and regulatory agencies • Information on Maryland elected officials Visit MBA’s website at www.mdbankers.com to view the new online Maryland Banking Directory (which can be found under Communications/Publications on the website), where you will find increased value in this new format.
Welcome New Members Charter Member
Associate Member
Congressional Bank www.congressionalbank.com
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Third Quarter 2012 | 21
Mar yland Bankers Association Professional Development Calendar SPECIAL EVENTS 2012 July 30- August 3
Maryland Banking School
k Services, Inc.
November 14 Deposit Documentation – Baltimore (PBS) November 15 Deposit Documentation – Easton (PBS)
November 9 Bank Next
ness solutions, and SEMINARS, products WEBINARS, 2013
January 4
First Friday Economic Outlook Forum
SCHOOLS, AND ONLINE ber banks. TRAINING
Insurance Investment Services Compliance Loss Prevention olutions July 10 LoanRegulation E Error Resolution On Hold Services Procedures Webinar (PBS) Overdraft Protection Services August 13 ABA Online Review for the CRCM Exam Printing, Supplies & August 23-24 Anti-Money Laundering and Bank Promotional Secrecy ActItems School (PBS) Voice & Data Connectivity September 20 2012 Mortgage Update B to Z (PBS)
Plans
November 6-7 Compliance with Federal Lending Regulations (PBS)
k Services, Inc.
November 8 Mastering HMDA (PBS) – Save the Date!
ness solutions, and products
Executive Management & Directors August 19-22 Senior Management Seminar (GSB) November 28 FDIC Directors College– Baltimore November 29 FDIC Directors College – Cambridge
July 30
General Accounting (AIB)
August 12-24 Graduate School of Banking (GSB) August 13
Principles of Banking (AIB)
Lending July 9
Introduction to Mortgage Lending (AIB)
July 16
Consumer Lending (AIB)
August 6
Analyzing Financial Statements (AIB)
Marketing
Finance July 3
Analyzing Bank Performance (AIB)
September 23-28
Financial Managers School (GSB)
General Banking July 9
Economics for Bankers (AIB)
Principles of Banking (AIB)
July 16
Money and Banking (AIB)
Law & Banking: Applications (AIB)
July 23
Law & Banking: Principles (AIB)
Supervisor Certificate (AIB)
July 23
Marketing Financial Services (AIB)
Security & Technology October 28 - Bank Technology Management November 2 School (GSB)
Trust July 3
Introduction to Trust Products and Services (AIB)
August 13
Basic Administrative Duties of a Trustee (AIB)
A Local ABA Training Provider
For updated more information on For detailed and information on all professional development programs, visit the Calendar section of Maryland Bank Services the MBA’s website at www.mdbankers.com.
ber banks.
Preferred Providers, call Joanna Weinreich at 443-837-1608.
Plans
olutions
s
Insurance Maryland Bank Services, Inc. Investment Services Loan Loss Prevention Offering On Hold Services for MBA member banks. Overdraft Protection Services Printing, Supplies & Promotional Items • Board Portals * • Identity Theft Solutions Voice & Data Connectivity • BOLI & Compensation Plans • Insurance
business solutions, services and products • Business Continuity • Checks & Marketing Solutions • Compliance Services * • CRA Solutions • Document Destruction • Energy Consulting • Financial Literacy
For more information on Maryland Bank Services Preferred Providers, 22 | The Banker at 443-837-1608. callMaryland Joanna Weinreich
* launching in the summer of 2012
• Investment Services • Loan Loss Prevention • On Hold Services • Printing, Supplies & Promotional Items • Voice & Data Connectivity
For more information on Maryland Bank Services Preferred Providers, call Joanna Weinreich at 443-837-1608.
register today!
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