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STANDING GUARD AGAINST EVOLVING CYBER RISKS Data Governance Excellence Within Your Bank | Community Bank M&A | Small Business Lending
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Our 100 years tneans that wherever you are going, we can guide you there.
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NJBankers Board of Directors Gerard Banmiller President/CEO 1st Colonial Community Bank
Stanley J. Koreyva Jr. President/COO Amboy Bank
Peter Michelotti President/CEO Community Bank of Bergen County
Thomas J. Shara * President/CEO Lakeland Bank
Louis Anthony Costantino Jr. Managing Director, Industry Manager JPMorgan Chase Bank, N.A.
Anthony Labozzetta President/CEO Sussex Bank
Craig L. Montanaro President/CEO Kearny Bank
Nicholas J. Tedesco Jr. * President/CEO GSL Savings Bank
Detlef H. Felschow President/CEO Roselle Savings Bank
Thomas Lupo President/CEO Regal Bank
Michael P. O’Brien Senior Vice President/Market Manager Bank of America, Merrill Lynch
Greg White* Northern New Jersey Region Bank President Wells Fargo & Co.
John S. Fitzgerald President/CEO Magyar Bank
Christopher D. Maher Chairman/President/CEO OceanFirst Bank
Kevin B. Peterson President/CEO Haddon Savings Bank
Dianne M. Grenz Senior Executive Vice President/Chief Consumer Banking Officer Valley National Bank
Christopher Martin Chairman/President/CEO Provident Bank
Robert Rey President/CEO NVE Bank
Angela Snyder* Immediate Former Chairwoman Chairwoman/CEO Fulton Bank of New Jersey
NJBankers Officers
NJBankers Staff John E. McWeeney Jr. President and CEO ext. 627 jmcweeney@njbankers.com Michael P. Affuso, Esq. Executive Vice President and Director of Government Relations ext. 628 maffuso@njbankers.com Jenn Zorn Senior Vice President and Director of Education & Business Development ext. 611 jzorn@njbankers.com Emily T. DeMasi Vice President and Director of Communications ext. 610 edemasi@njbankers.com Wendy C. Mandelbaum Controller ext. 603 wmandelbaum@njbankers.com Claire Anello Office Manager, Database and Website Manager ext. 631 canello@njbankers.com
Contributing Editor Emily T. DeMasi
Gerald L. Reeves Former Chairman President/CEO Sturdy Savings Bank
Cris Goncalves Manager of Education ext. 630 cgoncalves@njbankers.com Lauren Barraza Executive Assistant ext. 618 lbarraza@njbankers.com Cynthia M. Zaccaro Administrative Assistant II/ Senior Administrative Assistant ext. 632 czaccaro@njbankers.com Erin Suckiel Assistant to the Director of Communications ext. 629 esuckiel@njbankers.com Diane Starr Administrative Assistant to Education Department ext. 600 dstarr@njbankers.com
James S. Vaccaro * Chairman Chairman/President/CEO Manasquan Bank
Thomas J. Kemly * Second Vice Chairman President/CEO Columbia Bank
William D. Moss * First Vice Chairman President/CEO Two River Community Bank
John E. McWeeney Jr. President and CEO New Jersey Bankers Association *Executive Committee
Counsel Michael M. Horn, Esq. McCarter & English, LLP Mary Kay Roberts, Esq. Riker, Danzig, Scherer, Hyland, Perretti LLP
Contact New Jersey Bankers Association www.njbankers.com 411 North Avenue East Cranford, NJ 07016-2436 Phone: 908-272-8500 Fax: 908-272-6626
The Warren Group Design / Production / Advertising custompubs@thewarrengroup.com
www.thewarrengroup.com 280 Summer Street • Boston, MA 02210 617-428-5100
Published continually as a quarterly publication by the New Jersey Bankers Association from 1929 to Winter 1986. Revived as a quarterly publication by NJBankers and The Warren Group in 1998 under the name New Jersey Bank & Thrift and continued as New Jersey Banker in 2002. Combined with The League Leader, published by the New Jersey League of Community Bankers, in December 2008 and continued as New Jersey Banker.
Fall 2017 New Jersey Banker
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Table of Contents
Cover Story
16
Standing Guard Against Evolving Cyber Risks
Departments 5 Chairman’s Platform 11 Upcoming Events NJBankers, A Strong Backbone to a Vibrant Industry 20 New Associate Members 6 From the President’s Office The Lifeblood of NJBankers 29 Bank Notes 7 Politics and Policy Fret Not
30
Bank Shots
Features
8
Directors’ Corner Director Certification and Training
18 Feature Small Business Lending – A (Mostly) True Story
10
Behind the Teller Line Centered Around its Community, Berkshire Bank Brings a New Approach to Banking
22 Feature Cybersecurity and Identity Theft
12 Meet Our Endorsed Service Provider More Banks Turn to Captives to Enhance Enterprise Risk Management 14 Feature The Evolving Employment Law Landscape for New Jersey Employers
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New Jersey Banker
24 Feature Establishing a Data Governance Center of Excellence Within Your Bank 26 Feature The New Frontier of Community Bank M&A 28 Feature Feeding the Media: They’re Willing, Are You Ready?
Fall 2017
Chairman’s Platform
NJBankers, A Strong Backbone to a Vibrant Industry By James S. Vaccaro
T
he banking industry, like most others, has become one that is known for an ever-changing environment, with seismic shifts in how we conduct our business and what that current model looks like today. What we, as bankers, sometimes struggle with, is trying to determine the drivers of banking James S. Vaccaro preferences within Chairman the unpredictable Chairman/President/CEO Manasquan Bank horizons of one, five and 10 years from now. Is FinTech a competitor, partner or potentially both? If partner, what does the preferred FinTech/banking relationship look like? How do we utilize blockchain technology to further fortify our existing customer relationships and attract new ones? Does crypto-currency play a role in our business model and if so, to what degree? Is regulatory relief a potential reality or merely wishful thinking? Are there ways to help shape regulatory relief to benefit our industry? Many New Jersey-based financial enterprises do not possess the internal resources to fully research and vet those, and countless other, strategic issues that our institutions will, undoubtedly, have to address. We depend on external resources to obtain specific expertise or hope to be able to utilize the collective wisdom of our colleagues. In the state of New Jersey, we are extraordinarily fortunate to have an organization that is specifically tasked with “Making Connections.” The New Jersey Bankers Association continually provides comprehensive assistance to enable Bankers make well researched, current thinking, best practices decisions on a whole variety of strategic initiatives.
The New Jersey Bankers Association, under the adroit leadership of John E. McWeeney Jr., has transformed from a traditional association to a leading industry connector. The spectrum of initiatives available range from the Leadership Academy, expert advocacy and the additional guidance of thirty four discipline relevant committees. From philanthropy to benefits administration, NJBankers adds tremendous value to each of its constituents. A quick review of conferences, forums and committee meetings scheduled from this date through the end of 2017 quickly adds up to a number that well exceeds greater than 20. This organizational expertise does not happen without great enthusiasm, coordination, diligence and quest for excellence. Kudos to the entire NJBankers and BCG staff for their professionalism, support and guidance. Let’s take a moment to acknowledge each of them individually:
NJBANKERS STAFF
John E. McWeeney Jr. President/CEO Michael P. Affuso, Esq. EVP/Director of Government Relations Jenn Zorn SVP/Director of Education & Business Development Emily T. DeMasi VP/Director of Communications Wendy C. Mandelbaum Controller Claire Anello Office Manager, Database & Website Manager Cris Goncalves Manager of Education Lauren A. Barraza Executive Assistant to President/CEO & Director of Government Relations Cynthia M. Zaccaro Senior Administrative Assistant
Erin Suckiel Assistant to the Director of Communications Diane Starr Administrative Assistant
BANKERS COOPERATIVE GROUP STAFF Richard P. Siderko President/CEO
Janice Besso-Tamecki Vice President/Secretary Theresa Jolley Accounting Services Manager Mary Pat Boutmy Coordination Manager Sarah Martorina Insurance Services Analyst Antique Minnix Customer Service Liaison James J. DiOrio Senior Consultant A testimony to its provided value is NJBankers healthy membership. NJBankers boasts memberships including 96 banking institutions and 215 associate members (top five across the country). Founded more than 114 years ago, one could easily argue that NJBankers is more relevant today than ever. The collective support of our own trade organization will ensure continued vibrancy. Additionally, the association is always looking for ways to better serve its membership. Your comments/suggestions/ critiques are always welcome. I would ask that next time you speak to any one of our terrifically competent NJBankers colleagues, please take a moment to say thank you. ■ James S. Vaccaro is chairman of the New Jersey Bankers Association and chairman, president and CEO of Manasquan Bank. He can be reached at jvaccaro@manasquanbank.com.
Fall 2017 New Jersey Banker
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From the President’s Office
The Lifeblood of NJBankers
By John E. McWeeney Jr.
A
s we transition from summer to fall I think it’s an appropriate time to tell the story of what I believe is NJBankers greatest value to our members, our committees. NJBankers prides itself on truly being a “member-driven” organization and nowhere is that more evident than through our broad and diverse network of committees. Today NJBankers has 34 different committees covering most of the critical functions of our member banks. I say most because as the needs of our bankers change John E. McWeeney Jr. our committee President/Chief Executive Officer structure must NJBankers adapt accordingly. A good example of that is our Enterprise Risk Management Committee which was started just five years ago and now is one of our most active and vibrant committees. A recent review of our committee data revealed that 98 percent of our member banks currently have a representative on one of our committees. Further, we have a total of 980 committee members which is really impressive. A unique feature of the NJBankers committee structure is that we allow our associate members to participate on our committees. All of our committees are chaired by a banker with administrative support provided by an NJBankers staff member. The combination of banker leadership, industry
Committees • Associate Member Advisory Committee • Audit Committee • Bank Secrecy Act Committee • BCG Board • BCG Exec • CFO Committee • COES • Charitable Foundation • Commercial Lending Committee 6
New Jersey Banker
expertise provided by our associate members and staff support from NJBankers makes for a winning combination. Our committees support our members and the industry at large in a number of important ways. First and foremost is the opportunity to network with your peers and discuss common issues that you face. Most of our committees maintain an active Listserv where questions and issues can be shared with committee members to see how others have handled similar situations. Our Human Resources Committee is probably the best example of utilizing their Listserv to discuss common issues. Another major benefit of the committees is of course, education and professional development. Each committee meets quarterly and at each meeting there are always speakers and presentations on topics of interest. Some of those topics qualify for continuing education credits which is another value-add for our members. Most of the committees also hold their own annual conference, with the agenda and content developed by the committee members. Finally, the committees can serve as a sounding board for us on critical regulatory and legislative issues that come up from time to time which ensures that our advocacy efforts are effectively representing the needs of our members. Don’t just take my word for it. Here’s what two of our committee chairs had to say. David Yanagisawa, executive vice president and chief loan officer of Lakeland Bank, chairs our Commercial Lending Committee and
• Compensation Committee • Compliance and CRA Committee • Conference Committee • Credentials Committee • Enterprise Risk Management Committee • 401K Committee • Government Relations Committee • Human Resources Committee
offered, “Every meeting is an opportunity to create or expand lifetime relationships with industry peers. The ability to speak with people you have met face to face is invaluable.” Joe Mulrooney, senior vice president and chief risk officer of Northfield Bank, chairs our Enterprise Risk Management Committee and added, “I find the committee to be a valuable resource for information. Whether it’s the discussion of current events at meetings, the ability to reach out to members with questions, the conferences we put on, or the collaborative working groups we form to work on topics of interest, I always learn something that helps me do my job.” The process to join an NJBankers committee is quick and easy. Below you’ll find a current listing of NJBankers committees. If you have any questions about the mission of the committee or the appropriate level of banker to serve on the committee we’ll be happy to assist. If you want to join a committee or even more than one, contact us at info@njbankers.com. Provide your committee choice, all your contact information and we will send a confirmation from the appropriate committee liaison regarding the portal for accessing agenda items and next meeting dates. NJBankers motto is “Making Connections.” Don’t be left out. Joining our committees will be one of the best connections you’ll ever make. ■ John E. McWeeney, Jr., is president and CEO of the New Jersey Bankers Association, and can be reached at jmcweeney@njbankers.com.
• Internal Audit Committee • Investment Committee • Legal Committee • Loan Servicing Committee • Lending Steering Committee • Mortgage Committee • Mutual Committee • NJBA Service Corp. Board • NJBankers Board • NJBankers Exec
• Nominating Committee • Operations and Technology Committee • Public Relations & Marketing Committee • Residential Lending/ Affordable Housing Committee • Security Committee • Trust and Wealth Management Committee • Women in Banking Committee
Fall 2017
Politics and Policy
Fret Not By Michael P. Affuso, Esq.
I
magine Vice President Pence leveling a gun at very close range at Tim Geithner, and coolly pulling the trigger; the Former Treasury Secretary goes on to die agonizingly soon thereafter. The media both traditional and alt would be ablaze with insinuation and innuendo and the fine people of our nation would shake their head with horror and disgust and likely ask “What has happened to us?” But such venMichael P. Affuso omous politics has Executive Vice President/ Director of Government Relations happened before. In NJBankers 1804, a sitting vice president did deliberately shoot and kill a former treasury secretary. Those of you who either remember their history class or have been fortunate enough to land tickets to the play know that I’m referring to Hamilton and Burr. Many do not know that Burr was vice president at the time. In addition to violence, the government of the early Republic was plagued with innuendo and accusations of illicit sex, corruption and other dastardly skullduggery in the media of the day. The media was indeed partisan. Newspapers affiliated with Jefferson and Madison attacked Washington for being old and Hamilton for corruption, while the other side accused Jefferson of cowardice and lascivious behavior and general incompetence toward Madison. Soon thereafter, a funny thing happened – nothing. Perhaps it was Jefferson’s inaugural that “we are all Federalists and we are all Republicans” that lit the spark, but soon America transitioned into a political climate known as “the Era of Good Feelings.” The vitriol was gone, the nation moved forward. This epoch was followed by another where sectional feelings ran high, but a triumvirate of great Senators forged compromises. For several generations, these compromises provided the stability for the nation to expand industrially and allow the Union to be preserved when rent open by the Civil War. In short, “the nation will endure as it has
endured.” In a Republic, we elect people to office. People with foibles, grudges, and axes to grind. These same people also serve for reasons of patriotism and idealism. The hope of democracy is that those folks that we elect are able to rise above the petty inhumanity that plagues us all and soar to the higher plane that we all aspire to. Ill will and good humor ebb and flow. Today we have many problems in both politics and policy, and while it is hard to imagine things getting worse, they were. Are we so decadent to engage in verbal grenade throwing over corporate tax rates, mortgage interest deductions, Obamacare, and the like compared to what Lincoln faced with the dissolution of the Union or Roosevelt faced with 30 percent unemployment? Are we so forgetful that we came very close to accidental nuclear war with the So-
viet Union in 1983 which would have resulted in Armageddon that we engage in handwringing over a dictator with bad hair and a few missiles? And finally are we all so overexposed to the news where psychological numbness has set in that we see politics as merely a female UFC cage match where no rules apply and we tune in purely for the prurient interest? As far as politics go – we have been there before – just worse; and two of the combatants ended up on Mt. Rushmore and the other two are widely acclaimed for creating the American system of government and finance. ■ Michael Affuso, Esq., is executive vice president and director of government relations for NJBankers. He can be reached at maffuso@ njbankers.com.
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Fall 2017 New Jersey Banker
7
Directors’ Corner
Director Certification and Training By Donald Musso
R
egulators, particularly the Federal Reserve, are taking a deeper look into the role that Board members should play. The Federal Reserve recently issued Proposed Guidance on Supervisory Expectation for Board of Directors on Aug. 9, 2017. It states: The proposed BE guidance better distinguishes the supervisory expectations for boards from those of senior management, and describes effective boards as those which: (1) Set clear, aligned, and consistent direction regarding the firm’s strategy and risk tolerance, (2) actively manage information flow and board discussions, (3) hold senior management accountable, (4) support the independence Donald Musso and stature of independent risk management and internal audit, and (5) maintain a capable board composition and governance structure. These five attributes support safety and soundness and would provide the framework with which the Federal Reserve proposes to assess a firm’s board of directors under the proposed LFI rating system. To accomplish the strategic role that the proposed guidance is looking for, directors must have the requisite knowledge and understanding to be effective. Directors are not required to become topical experts, but do need to have a working knowledge of key areas and issues about banking. In early 2017, FinPro coined a new phrase “presumptive knowledge” to explain the expectation by regulators, stock investors and other external players that board members have an adequate working level of understanding of key risk areas within their banks. To meet the presumptive knowledge expectation, bank directors need more training, which should meet the following specific criteria: 1) Be targeted to identified high risks within the Bank – High risk areas identified via the Enterprise Risk Program require additional Board attention. If it is a material risk to the Bank, Board Directors must understand the risk and know the mitigation plans for that risk. 2) Utilize Bank specific data whenever possible – Webinars and conferences are very helpful in Bank training, but Directors retain more of the training when the material being used for the training is specific to the Bank. Using specific Bank data for training also allows for ongoing training in areas like ALCO, ERM and Compliance. 3) Be scheduled on a routine basis – It is impossible for any Director to learn and retain anything when taking water from a fire hose. Rather, utilize one Board meeting a quarter for dedicated training on one or two key high risk topics. 4) Periodically include experts in the topic area – Often it makes
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New Jersey Banker
sense for the Board to bring in outside expertise in any given area. Directors must be careful not to place an over reliance on the experts as they cannot meet the presumptive knowledge standard by relying on experts. Utilize experts to supplement internal training and to provide additional expertise when necessary. 5) Have training materials available, digitally, for ongoing reference – Directors do not need to memorize everything. Training is more like an open book test. Training materials should be readily available in digital form for Directors to reference when needed. The training materials should also include a defined checklist that Directors can utilize as appropriate questions on a matter. Good board training is necessary for: • regulatory purposes • liability mitigation • corporate governance • value creation Director training can be accomplished in numerous ways. Some combination of topical webinars, targeted conferences, individual director training and whole board training likely will achieve the best results. Introduction to topics are best achieved through webinars and conferences. To be effective, however, the material needs to be available for future reference. Simple note taking is not an effective way to train. More comprehensive and specific training should be done on an individual and group basis. This format provides the most tailored training and will result in the highest retention of concepts. The best training for directors is a designed program that incorporates all of the concepts identified previously. To facilitate director training, NJBankers has teamed with FinPro to provide a director certification program which incorporates: • 28 annual webinars for directors • 2 conferences targeted to directors • individual director training materials (great for new board members) • whole board training This certification captures the training that directors have received and ensures that they are getting the requisite amount and content of training relative to the bank’s risk profile and to that of comparable banks. Director training is not going away. Control your future by designing your customized training program now. ■ Donald Musso is president and CEO of FinPro Inc. He founded FinPro in 1987 and has become a nationally known thought leader in community banking. In addition to his 27 years of experience at FinPro and FinPro Capital Advisors Inc., Musso has started numerous de novos (several as a founder), is a large investor in community banks, is a member of various bank boards and teaches for elite banking programs. He also frequently discusses community bank policy with all of the banking agencies in Washington D.C. For more information, visit FinPro.us.
Fall 2017
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Fall 2017 New Jersey Banker
9
Behind the Teller Line
Centered Around its Community, Berkshire Bank Brings a New Approach to Banking
O
perated around an entrepreneurial approach and distinctive culture, Berkshire Hills Bancorp, parent of Berkshire Bank, has $9.6 billion in assets and 97 full service branch offices in Massachusetts, New York, Connecticut, Vermont, New Jersey and Pennsylvania. Eight Berkshire Bank branches are located in your region, six of which are in New Jersey and two in Pennsylvania. America’s Most Exciting Bank’s team members are ready to help you with all of your exciting moments. Berkshire Bank provides a traditional range of products and services to meet the deposit and credit needs of its individual customers, small businesses and professionals in the Mid-Atlantic Region. The bank maintains a strong focus on highly personalized, efficient service that is responsive to local needs. Berkshire Bank delivers these products and services with the care and professionalism expected of a community bank, and with a special dedication to personalized service. The bank employs well-trained, highly motivated employees interested in providing quality client relationships, using state-of-the-art delivery systems and client service facilities. This strategy is guided by a management team with extensive banking experience, whose goal is to serve the financial needs of its customers and provide a profitable return to its investors, consistent with safe and sound banking practices. In addition to the traditional banking approach, Berkshire Bank offers a unique service called MyBanker. The personalized banking product pairs you with a dedicated, around-the-clock, relationship manager who is your exclusive point of contact for all your financial service needs. MyBankers are not tied to a branch and strive to help map individual financial journeys, evolving traditional banking relationships through a distinctive and personalized approach. Berkshire Bank also believes in giving back to those who make the community a better place to live. The bank completed its Xtraordinary Day on Wednesday, June 7, 2017. This event was the second year that the company participated in community service events concurrently from 1 p.m. to 4 p.m., closing the entire financial institution including Firestone Financial, 44 Business Capital, Berkshire Insurance Group and RNL Associates as a united effort for community involvement. During Xtraordinary Day, 92 percent of the company, which equates to 1,619 employees, completed 65 projects. From packaging meals to combating hunger to cleaning local parks and delivering financial literacy lessons, over 6,000 hours of service were contributed, with a value of nearly $169,000. The projects helped 75 different nonprofit organizations across the company’s footprint. Berkshire Bank recognizes that being a good corporate citizen is about more than just writing a check. As a result, employees received paid time off to volunteer all on the company dime. The objective of
10 New Jersey Banker
Xtraordinary Day is to show the true power of giving back, by immersing employees in projects that have a meaningful and lasting impact on the communities it serves. It’s an affirmation that America’s Most Exciting Bank is not a sentiment only to be spoken, but the culture of the company throughout all its regions. Xtraordinary Day is a demonstration of the capacity of the XTEAM, the company’s employee volunteer program. Annually, Berkshire Bank associates in New Jersey volunteer for more than 50 organizations and the bank provides financial support to more than 200 organizations in the Mid Atlantic footprint. We are very involved in the communities we serve, from sponsoring events and charitable efforts to volunteering for organizations. Berkshire Bank lends its support to schools and hospitals, cultural institutions and many others. Berkshire Bank’s most precious asset has always been its customers. So the bank treats everyone like friends and neighbors – because they are! ■
Fall 2017
Upcoming Events Oct. 12, 2017
Nov. 2, 2017
Caesars Resort, Atlantic City
Fiddler’s Elbow Golf Club, Bedminster
Oct. 24, 2017
Nov. 14, 2017
Chase Center on the Riverfront, Wilmington, Delaware
APA Hotel Woodbridge, Iselin
Oct. 25, 2017
Dec. 7-8, 2017
The Berkeley Oceanfront Hotel, Asbury Park
Ocean Place Hotel, Long Branch
Oct. 26, 2017
Jan. 19, 2018
APA Hotel Woodbridge, Iselin
The Palace at Somerset Park, Somerset
Oct. 27, 2017
May 16, 2018
APA Hotel Woodbridge, Iselin
Marco Island Marriott, Marco Island, Florida
Oct. 29, 2017
May 1, 2019
Ramada Plaza Conference Center, Monroe Township
The Broadmoor, Colorado Springs. Colorado
Annual Human Resources Conference
2017 Annual Delaware Trust Conference
Enterprise Risk Management Conference
BSA-AML Compliance Management
Hot Topics in BSA/AML Compliance
Commercial Lending School
FinPro’s Annual Conference
CFO Conference W/FMS, New York/New Jersey
BankHorizons 2017
Economic Leadership Forum
114th Annual Conference
115th Annual Conference
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Fall 2017 New Jersey Banker
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Meet Our Endorsed Service Provider
More Banks Turn to Captives to Enhance Enterprise Risk Management
A
s financial institutions continue their focus on managing risk across their organizations, many have implemented captive insurance companies as a key component in identifying and funding for those risks that are not currently covered through their commercial insurance program. A captive allows a bank to expand its coverage over and above its commercial policies and improve its overall risk profile. The captive structure augments the commercial policies, allowing a bank to selfinsure deductibles, increase coverage levels on existing policies (excess layers), fill the gaps (exclusions and sub-limits) in coverage and identify other risks to insure where commercial insurance is not available to the bank. In addition to the benefits received from enhancing the bank’s risk management process and providing options and flexibility when evaluating the bank’s commercial insurance program, a bank also has an opportunity to achieve an annual underwriting profit which they retain. Financial institutions can see an annual increase to EPS of up to 1-3 percent per year, depending on the amount of coverage written through the captive and the claims experience. Not all banks are ideal candidates for the program. Financial institutions must have a holding company and our program focuses on institutions with $500 million to $10 billion in total assets. An institution also needs to have good earnings and strong capital levels. KeyState’s Bank Captive Program is the largest bank captive program in the country and has seen strong growth over the past four years. The program began in December of 2012 with 6 banks. As of Q2 2017, over 70 banks have put the structure in place. KeyState has introduced the Captive Program to banks by partnering with state banking associations throughout the country. Twentysix state banking associations, including NJBankers, have endorsed KeyState’s Bank Captive program.
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Since the endorsement in 2015, two banks in New Jersey have joined the program and several others are considering the program. KeyState encourages banks interested in the program to discuss it with their peers already in the program. OceanFirst Bank joined the program this year. “With our captive in place, we have mitigated a portion of risk inherent in traditional commercial insurance programs in a manner that can also enhance the
Bank's earnings. KeyState handles the management of our captive and their team has demonstrated the knowledge, attention to detail and high level of cooperation that OceanFirst values when selecting a partner,” notes Joseph Iantosca, EVP and CAO, OceanFirst Bank. ■ For more information on KeyState’s Bank Captive Program please contact Josh Miller at (702) 5983738 or Brian Amend at (302) 397-5201.
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RESERVE YOUR SPOT TODAY! TO REGISTER VISIT WWW.BANKHORIZONS.COM Fall 2017 New Jersey Banker
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Feature
The Evolving Employment Law Landscape for New Jersey Employers By Francine Esposito, Esq. and James Leva, Esq.
E
ach year brings new developments in the employment law landscape and 2017 has been no exception. Several topics are on the forefront of change and are worth watching in the future.
PAY EQUITY Pay equity and gender equality legislation has been sweeping across the country during the past year. New Jersey, which often leads the way in protecting employee rights, already had some such legislation in place, but recently sought to further expand employee rights in this regard. Francine Esposito, Esq. In 2013, New Jersey amended the Law Against Discrimination (NJLAD) to make it unlawful for employers to take adverse action against employees for, among other things, discussing their compensation with other employees or assisting in investigating potential discrimination in the payment of wages, bonuses or other employee benefits. To demonstrate its importance, the law required employers to James Leva, Esq. provide written notice of employees’ rights via required posting, as well as in writing upon hire and on an annual basis, with written confirmation of receipt. This year, in an effort to further combat gender-based pay disparities, the New Jersey legislature, like several other state and city legislatures across the country (and across the river in New York), introduced bills that would prohibit employers from inquiring about applicants’ salary histories. The thought is that if employers determine an individual’s worth based upon what other employers previously paid him/her, rather than the worth of the position, sex discrimination in compensation would be perpetuated. A number of jurisdictions have passed such laws to be effective in the future. The most recent of the New Jersey salary history bills would have amended the NJLAD to prohibit employers from screening job applicants based on salary history or relying on salary history to determine wages for applicants at any stage in the hiring process. The bill would have also prohibited employers from asking job applicants about their salary history unless they voluntarily, and without coercion, consented in writing to the
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employer doing so. While the New Jersey legislature passed the bill, Gov. Chris Christie vetoed it. With a change in governors occurring in the fall, this likely is not the end of the attempts to pass more protective gender-equity legislation in New Jersey.
PAID FAMILY AND SICK LEAVE LAWS There can be no doubt that employees are entitled to a great deal of time off, depending upon the circumstances. Under the federal Family and Medical Leave Act (FMLA), employees are entitled to take up to 12 weeks of job-protected leave in a 12month period for their own serious health conditions, to care for parents, spouses and children who suffer from such conditions, to bond with a new child, and to address circumstances relating to certain family members’ call to military service. Under the federal Americans with Disabilities Act, disabled employees may be entitled to even more leave as a reasonable accommodation. This is just on the federal level. New Jersey has one of the most comprehensive family leave frameworks in the country. Under the New Jersey Family Leave Act (NJFLA), eligible employees, working for employers with 50 or more employees anywhere in the country, are entitled to take up to 12 weeks of job-protected leave in a 24-month period to bond with a new child or care for a covered family member suffering from a serious health condition. Covered family members include parents (including in-laws), spouses, children, domestic partners and the children of domestic partners. Due to the interplay of the FMLA and NJFLA (which does not provide for leave for employees’ own
Fall 2017
conditions), employees may be entitled to 36 or more weeks of leave in a 24month period. New Jersey also provides employees with some continued pay through Temporary Disability benefits or Family Leave Insurance (NJFLI) benefits, making New Jersey employees more likely to take leave. Despite the generous benefits provided by existing laws, the New Jersey legislature recently sought to expand such benefits. It passed a bill that would have extended the NJFLA’s coverage to smaller employers and for employees to care for more family members (including siblings, grandparents and grandchildren). The bill would also have increased NJFLI benefits by similarly expanding the category of covered family members for whom employees can care while taking leave, extended the length of benefits available in a year from six to 12 weeks for continuous leave (and from 42 to 84 days for intermittent leave), and increased the amount of paid family leave benefits available from 66 percent of pay up to a maximum, to 80 or 90 percent, depending on the employee’s household income. Although Christie vetoed this bill as well, change may nevertheless occur in the future, including on the federal level given President Trump’s comments on the matter. To make matters even more complex, 13 New Jersey municipalities (Bloomfield, Elizabeth, Plainfield, New Brunswick, Jersey City, Newark, Passaic, East Orange, Paterson, Irvington, Montclair, Morristown and Trenton) have lead the trend around the country to require employers to provide at least some paid sick leave to employees. These laws usually require employers to provide at least 40 hours per year to be used for employees’ and their family members’ conditions and doctors’ visits, among other reasons. These municipal laws may be especially problematic because they are often passed without much notice to the employers they affect, they apply to part-time employees to whom employers may not normally provide such benefits, they apply to employees who work only a minimal amount of time in the covered municipalities (such as employees who float to various branches), and they
may require employers to have different policies based upon the location of their offices. The above tangled web of laws can be troublesome to navigate. As such, employers should ensure that their policies comply with all of the leave laws that apply to them, and should keep an eye out for changes on the federal, state and municipal levels in the future.
PROBLEMATIC POLICIES For several years, the National Labor Relation Board (NLRB) has taken a more focused aim at employer policies that may chill employees’ exercise of the right to engage in “protected concerted activity” under Section 7 of the National Labor Relations Act. This is true whether or not a workforce is unionized. Indeed, any workplace policy that could be reasonably construed to interfere with employees’ rights to band together for their collective good, is considered unlawful, regardless of whether any employee is actually impacted by the policy. The NLRB construes any ambiguities against the employer, and depending on the language, some of the most fundamental and well-intended workplace policies, including those relating to confidentiality of information, insubordination, non-disparagement, social media use and even at-will disclaimers, have been deemed unlawful. The NLRB’s activity in this area has shown no signs of slowing down and the effects of any new Trump-appointed members will not be seen for some time. As such, employers should review their handbooks and other workplace rules to determine whether they contain any prohibitions that could be construed as interfering with employees’ Section 7 rights before they find themselves having to defend an unfair labor practice charge.
WAGE AND HOUR ISSUES Developments in wage and hour law are continuing in 2017. Under both federal and state law, in order for employees to be exempt from being paid overtime (time and one-half their normal hourly rate for hours worked over 40 in a week), they must perform exempt duties, including supervisory or other duties involving
independent judgment and discretion, and must be paid a salary of a certain amount ($23,660 annually) that is not subject to deduction, except under certain circumstances. Determining exempt status was always a difficult task for employers, especially given the need to perform a highly fact-specific inquiry regarding employees’ job duties and compensation. (This is especially true in the banking industry for mortgage-related employees). In May 2016, the United States Department of Labor (DOL) issued a rule that would have significantly increased the number of employees entitled to be paid overtime by more than doubling the salary threshold from $23,660 to $47,476. The rule would have also increased the salary level threshold for “highly compensated” individuals (who were presumed to be exempt if they performed certain work), from $100,000 to $134,004. Many states and business groups filed lawsuits seeking, and were granted, a preliminary injunction barring the DOL from implementing this rule. Both the Obama and Trump administrations appealed in an effort to overrule this decision. The Trump administration had since indicated that it was not advocating the specific salary levels promulgated by the DOL’s rule, but requested public comment to aid in formulating a new proposal. Most recently, on Aug. 31, 2017, while the appeal of the preliminary injunction was pending, the lower court ruled on the merits of the case and invalidated the DOL’s proposed rule. So, for now at least, employers can breathe a sigh of relief. Employers, however, must stay vigilant for new developments because there is a possibility that the Trump administration will appeal this decision, or otherwise seek to promulgate a new rule following the comment period. In any event, employers are always wise to consult with legal counsel in determining employees’ status given the complexities of such analysis. ■ Francine Esposito is a partner and James Leva is an associate at Day Pitney LLP. Francine is a member of the New Jersey Bankers Association Human Resources Committee and is a frequent speaker at committee conferences. She may be reached at fesposito@daypitney.com.
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Cover Story
STANDING GUARD AGAINST EVOLVING CYBER RISKS By Imran Makda and Gregory A. Garrett
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lobal spending on security-related hardware, software and services is projected to hit $81.7 billion in 2017 and climb to $105 billion by 2020, according to International Data Corp. (IDC) research.1 The banking industry is among the top three biggest spenders and for good reason: With most cyber criminals motivated by money, banks are natural targets. Add to that the increase in cyberattacks against banks in recent years, and we see that protection against increasingly powerful forces is warranted: Symantec reports that some of the biggest bank heists in 2016 included the work of organized
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criminal gangs and nation states, with North Korea extracting approximately $94 million from banks in Bangladesh, Vietnam, Ecuador and Poland.2
THE LATEST EVOLUTION OF CYBERATTACKS This year has ushered in a new era of massive cyberattacks. In April, an elusive cyber group called the “Shadow Brokers” leaked National Security Agency (NSA) hacking tools, including highly sophisticated software exploits. Trouble soon followed. The “WannaCry” ransomware program was the first to hit in May, infecting 153 countries
with more than 75,000 ransomware attacks; 3,300 infections were reported in the U.S.3 The attack affected several major institutions including FedEx, Nissan and the Russian Interior Ministry. The program held data files for ransom and demanded the equivalent of $300 in Bitcoin to restore user access. One infected computer on a network possessing administrative credentials could quickly spread the program to all other network computers. WannaCry targeted a vulnerability in Microsoft Windows, and users who hadn’t updated their systems with a security update that Microsoft had issued in March were put at risk.
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A little over a month later, the Petya virus made its presence known around the globe, infecting more than 12,500 machines across 64 countries.4 Similar to WannaCry, Imran Makda the attack used malicious software to prevent users from accessing their data until a $300 Bitcoin payment was made. The program targeted several attack vectors, including vulnerabilities in Gregory A. Garrett Microsoft’s Server Message Block (SMB), known as MS17-010 SMB. However, it quickly distinguished itself as a more dangerous “wiper” virus, not only locking files but potentially destroying them; the program crippled devices by overwriting and encrypting the machine’s master boot record, according to Symantec.5
CLEAR STANDARDS EMERGING Even before these mega-viruses were launched, pressure had been building to implement more rigid cybersecurity standards for the financial services industry. Earlier this year, New York’s Department of Financial Services (DFS) issued a “first-in-the-nation” cybersecurity regulation that went into effect on March 1, 2017, developed to protect customer data and ensure the safety and soundness of the state’s financial services industry. It requires all financial institutions doing business in New York state, regardless of their domicile, to conduct a risk assessment and maintain a risk-based cybersecurity program. Organizations must also adopt a written cybersecurity policy (including third-party risks), designate a qualified chief information security officer (CISO), establish a written incident response plan and submit an annual certification of compliance, among other requirements. This was followed in April by the American Institute of CPAs (AICPA) rolling out its new voluntary framework to standardize reporting on the effectiveness of an organization’s cyber
risk management controls, as part of a new System and Organization Controls (SOC) attestation for Cybersecurity. Stakeholders and prospective investors look at SOC attestations as a measure of corporate health and the effectiveness of enterprise risk management programs. The framework is designed to help ensure that everyone inside and outside of the organization speaks a common language and helps to standardize policies, procedures and controls around cybersecurity. These are just a few of the latest moves that industry groups and government regulators are taking to ensure financial institutions are actively assessing and protecting themselves against the vulnerabilities seized by cyber criminals.
TAKING ACTION Financial institutions must maintain constant vigilance of evolving cyber risks, not only looking ahead to what’s next, but ensuring a strong foundation exists to manage and mitigate the risks. Among the most critical elements of a successful cyber risk management program include: • Employee education: Human negligence is often the biggest risk to organizations. Many attacks are entirely preventable. For example, some organizations could have avoided Petya if users had simply installed a months-old security patch to their computer. Designing training programs around various organizational roles can help employees practice good cyber hygiene and better understand the consequences. • Active monitoring: Threat monitoring and analytical tools are critical weapons in an organization’s defense arsenal to detect and prevent attacks. Early detection can make a world of difference when it comes to rescuing critical data and preventing further damage. • Incident response plan: When an issue emerges, time is of the essence. Developing a plan that details breach notification protocols and identifies the critical stakeholders involved in containing, removing and communicating the threat can ensure the organization’s response is immediate and comprehensive. • Security patch management program: Keeping operating systems and software updated with the latest security patches can reduce the number of exploitable entry
points for cyberattacks. Organizations must develop a solid understanding of the vulnerabilities that exist and the degree of risk they present and ensure they take appropriate measures to address them. Cyber criminals are getting smarter and more sophisticated, and cyber-related compliance demands will only grow. Financial institutions can’t afford to get comfortable. Developing a proactive cyber risk management framework may seem daunting, but the severity of the consequences promises to invite greater complications. ■ Imran Makda is the managing partner of BDO’s New York Metro Insurance and Banking Group and co-leader of BDO’s National Insurance Industry group. He has more than 23 years of experience providing assurance and consulting services to public and privately held companies. He has been with BDO since 1996, primarily focusing on audits of financial services companies, including several large multinational companies. Gregory A. Garrett, CISSP, CPCM, PMP is BDO’s head of international cybersecurity and an international business consultant, expert witness, bestselling author of 22 published business books and 100+ published business articles and former highly decorated U.S. Air Force military officer. With more than 30 years of experience, he has managed more than $40 billion of complex, high-tech programs, contracts, related consulting and professional services projects for government agencies and Fortune 500 companies across the globe. He is the recipient of numerous national and international business awards for his writing, teaching, consulting and leadership.
FOOTNOTES 1. Worldwide Spending on Security Technology Forecast to Reach $81.7 Billion in 2017, According to New IDC Spending Guide. (2017, March 29) 2. Symantec 2017 Internet Security Threat Report 3. BDO Knows Cybersecurity: A Cyberattack of Unprecedented Scale. (2017, May 15) 4. BDO Knows Cybersecurity: Global Cyberattack Known as Petya Marks Second Reported to Use ‘Shadow Brokers’ Toolkit. (2017, June 29) 5. Symantec: Petya ransomware outbreak: Here’s what you need to know. (2017, June 27)
Fall 2017 New Jersey Banker
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Feature
Small Business Lending – A (Mostly) True Story By Christopher G. Webbe
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ome years ago, I worked in the credit department of a New York bank. Having expressed interest in getting involved in C&I lending, I was given a small business portfolio to manage. One of the borrowers “Jim’s company,” was part of that portfolio. The company designed and distributed teen fashions. He purchased the rights to some cartoon characters Christopher G. Webbe and his business consisted of designing clothes around these characters, getting the clothes manufactured in the Far East and having them shipped to his warehouse in the U.S. He then distributed them through clothing companies with stores in malls catering to teenagers. My bank would open letters of credit on behalf of Jim’s company to finance the imports, and then finance his sales to the stores. Things went pretty well for a time, and then the balance of the customer’s operating account dropped, overdrafts began to occur and he became late with his loan payments. I also noticed some substantial payments to plumbers and electricians drawn from his operating account. I dropped in on him at his warehouse in New Jersey, verified that he wasn’t getting any work done on his business premises and asked him about the payments. After several efforts to change the subject he admitted that he was building a house for himself, that there had been some delays and cost overruns, the bank financing the construction wouldn’t let him have any more money, and he had dipped into the company operating account to prevent the trades
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from taking him to court. I lectured him on the need to keep his company and personal affairs separate. Once I had the full picture, we managed to sort things out and agreed on a plan to get him back to paying his bills on time. Unfortunately, what Jim did not tell me was that in trying to plug the hole in his cash flow he had jumped on the band wagon when the cargo jeans fad hit. He had a three-week turnaround from placing his order with the manufacturer to receipt of the goods. His first batch of cargo jeans flew off of the shelves! Very pleased with himself, he placed a second order. Receipt of the jeans unfortunately coincided with the end of the craze, and Jim was left with a warehouse full of cargo jeans. As time went by Jim became more and more desperate, and then a miracle solution presented itself that would alleviate his misfortune. Two gentlemen just happened to drive up in a truck and they told him that someone had informed them that he had some jeans for sale. They agreed to take them off his hands, loaded up the truck and left him with a check. Jim was relieved and was congratulating himself on having disposed of the merchandise at cost. Shortly thereafter the check bounced and Jim realized the only ID he had was a business card with a New York City address, which he quickly found was also fake. By this stage things were quite serious with the company, and Jim did not even have anything for the police to go on. Jim reached out to me and asked me what he ought to do. I was sure Jim could earn his way out of the hole if he got back to his regular business, and so I got approval to continue working with him, opening one letter of credit at a time. We had to redo the documentation, so I decided to use a new law firm where I knew an
attorney who had some experience with the garment trade. I put my new attorney in touch with Jim’s attorney. After a few days, without any warning I got a letter from Jim’s attorney threatening to sue the bank for lender liability, accusing the bank of bringing unreasonable pressure to pay and a whole host of other claims I don’t even remember. Feeling somewhat put out given the way in which I had supported Jim at some risk to my own position in the bank, I quickly set up a meeting. When I arrived at Jim’s office, there must have been at least 10 people there, including his regular attorney, a bankruptcy attorney, a couple of accountants and sundry extras. They didn’t want Jim talking directly to me. The bankruptcy attorney launched into a litany of complaints about the treatment of their client by the bank and then observed that since I had not brought my attorney with me the whole meeting was a waste of time. I couldn’t help agreeing with him and we agreed to terminate proceedings. I parked around the corner, waited for everyone to leave and then went back to have it out with Jim. He was extremely hostile, talked about me leading him up the garden path and suggested that since the relationship was now on an attorney to attorney basis I should leave. I told him that before I left I felt he owed me an explanation. “Well,” he said, “You were the ones who started it when you engaged a firm specializing in bankruptcy.” And that of course was it. No one had told me that bankruptcy was the specialty for which my new legal firm was best known. It took us a good while to lower the temperature. The bankruptcy attorney really didn’t want to let go. Eventually I had my new attorney call Jim’s attorney to explain that I wanted my customer to be assured that the bank had no intention
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of launching bankruptcy proceedings, and eventually things were ironed out. But not before the appearance of a final wrinkle. Assuming that his relationship with my bank was over, Jim had already had his lawyer set up a new company and had opened an account in that company’s name at another bank. He had also called a number of his clients, told them that he had changed the name of the company, and instructed them to wire their payments into the new account. When I saw the flow of funds into Jim’s operating account at my bank reduce to a trickle, I once again went out to visit his business and trekked out to New Jersey. Jim admitted what he had done, and promised to transfer the funds. Every month I was sitting on the edge of my seat waiting for the money to come in. Finally, another bank called on Jim and offered him twice as much as we were prepared to lend. He took the loan, paid us off, and that was the end of our relationship. A central problem of lending to
someone like Jim is that you are entirely in his hands. He will do what he thinks is right for his company at any given time. In C&I lending, your customer’s risks are your risks, and the extent to which they decide to take risks and the way in which they manage those risks will determine whether or not you get paid. At this level of lending the principal may not make much distinction between what is theirs and what belongs to the company; when the two become commingled the situation can become complicated. They also may not have that much experience in business. Jim was an excellent designer, but made the elementary error of releasing merchandise against a forged check. In financial matters, you may well find that your customer is dependent on your designing the structure appropriate to meet their needs, and at the same time may not fully understand or take seriously the terms and conditions you impose. To reduce the risk, you may be tempted to make those terms and conditions very
specific, but take care as to how far you go in that direction – for that may be the path to lender liability. In larger companies, at least there typically are professionals in place who will help supplement the limited knowhow of the principal. But even then, decisions made by the principal may have far reaching effects for the company. It follows that the more you know about your borrower, the better the position you are in to determine whether you can rely on them to make sensible decisions. During your due diligence, you will therefore be wanting to take a good look at the borrower’s track record (for that reason, lenders are usually reluctant to lend to start up operations). One of the first things you are going to ask for is the borrower’s financial statements. In fact, you would think that financial analysis would be the key means of measuring the health and success of a commercial or industrial concern. And so it may be in larger concerns, but with small businesses it may not be so simple.
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Fall 2017 New Jersey Banker
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Feature The quality of your analysis is only as good as the financial data on which it relies. When you receive financial statements from a small business, they most likely will be the result of a collaboration between the principal and his accountant. You may well have no cash flow statement, just a profit and loss and a balance sheet, and you will probably have no explanatory notes. That’s what I used to get from Jim, and I could never be sure of whether they were a true reflection of the company’s financial status. If the borrower is a bit larger, then you may be able to require submission of accountant-prepared compiled statements. These will at least be presented in accordance with accounting standards, but that’s pretty much where it ends. The accountant is still entirely dependent on the information supplied by the borrower. There may, for example, be numbers representing inventory, but the accountant will not have verified that those numbers are correct. Again, there may be balances representing amounts receivable from the borrower’s customers, but there will be no indication as to whether they are collectable. If the accountant is aware of any misstatement or omission he must of course include that fact in the statement, but that is as far as it goes. You can go a step up to reviewed statements; these will cost your client more money. The accounts should be prepared with more objectivity, since the accountant is required to be an unrelated party, and is obliged in the process to develop a thorough understanding of the company, its operations, its industry and its accounting policies and practices. But
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he still doesn’t give you any more than a statement that he is not aware of any modifications that need to be made to the statements for them to be in conformity with generally accepted accounting principles. To obtain full comfort that the numbers being presented to you can be relied upon, you need a full audit with the corresponding auditor's opinion. Such audits are quite expensive and beyond the means of most small businesses. Whatever level of comfort you do obtain, you will be well advised to make contact with the customer’s accountant. With a few judicious questions, you should be able to determine how good the accountant is and how well he knows his client’s business. An additional word on financial analysis – the riskier the business, naturally the more comprehensive you will want your analysis to be. Yet on the other hand, with the size of loan we are talking about, the profitability of individual relationships is going to be limited, so overheads need to be kept within bounds. It is worth bearing in mind that if the financial data are not totally reliable, comprehensive analysis is also going to be limited in its usefulness. For example, a current liquidity ratio calculation is not going to help you if a significant portion of stated inventory turns out to be obsolescent. Credit analysis is useful but in small business lending, my initial focus will still be on the competence of management. There is another aspect of Jim’s business which is worth commenting on. He was heavily dependent on fashion. He got badly burned on the cargo jeans. His whole business depended on his ability to
read fashion trends and react quickly. As I mentioned above, I inherited the account and because of his business I do not believe that I would have entertained him as a new customer. Small business lending is complicated enough in the first place without adding an extra layer of risk. Some other activities I found in my portfolio that posed additional risk: Restaurants and catering: This is an area which is highly cyclical. During economic downturns when discretionary income becomes scarce, restaurants are often the first to suffer. Restaurants, especially individually owned small restaurants, rarely have a strong capital base so there is little to cushion them against the hard times. Restaurants may also be subject to trends in fashion. If ownership can’t keep up it may be difficult to stay in business. Construction: this again is highly cyclical. As the recession hits the demand for new housing plummets. The typical small house builder is left bidding for modification work. Most of his capital will have been tied up in his most recent project and if it is a spec house and he has to reduce his price he may not be in a position to continue in business. He may on the other hand be working on a specific contract and exposed to all the risks that it involves (see Contract Work on the next page). High Tech: The technical world moves quickly, and any business involved in the production and/or distribution of high-products may be at continual risk from obsolescence. This can happen to large companies too, as Kodak learned to their cost. In the personal computing world, focus has shifted from desktops to
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20 New Jersey Banker
Fall 2017
laptops to iPads to smart phones in the space of a few short years. A similar story with videos, and now a major change as Amazon revolutionizes the retail trade. Almost any company these days can be impacted by novel hardware and/or software solutions, companies directly involved in high-tech products even more so. Perishables: Lenders have long been risk averse where companies dealing with food are concerned. Because of this aversion, most farm crop lending is done under government programs. Where companies handle food, there is the ever present risk of spoilage because of either delays in bringing products to market or inability to control conditions under which products are being stored or moved. Seasonal Businesses: Any company that depends on selling the bulk of their goods or services during one or more specific periods during the year presents additional risk. For example, bad weather
occurring during key Christmas shopping days can be disastrous to toy stores. Contract Work: Lenders prefer to see a steady and predictable flow of revenue. Contract work brings with it a number of uncertainties, including whether the company can organize its bids to achieve that steady flow, how good the company is at calculating costs and ensuring the outcome is profitable, whether the contract can be completed on time and whether the company can achieve the required level of quality of work. In my portfolio, I had a software developer. His principal customer kept changing the specifications. Eventually he gave up the project and had to sue for payment. This is not an exhaustive list but it is enough to show that certain specific activities can involve significant additional risk. If you are going to lend in these areas, don’t go with a potential borrower that you are not sure of. Small business lending will not always
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be the roller-coaster I described above, although the previously described scenario is not uncommon. According to Gallup, 50 percent of businesses fail within five years of startup. Other research suggests that management incompetence is to blame for failure in 70 percent of the cases. I held onto my small business portfolio for three years and then moved on to another area. I think we did better with our customers than these statistics suggest. But I would still say that you must be very selective with who you go with, that you should look at financial statements with skepticism, and that you should be ready for just about anything. ■ Christopher G. Webbe is a senior consultant with CEIS and had over 30 years of experience as a commercial banker and consultant. He provides loan review services for domestic and international portfolio segments. He can be reached at (888) 967-7380 and at cwebbe@ ceisreview.com.
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Feature
Cybersecurity and Identity Theft
A
s banks confront their cybersecurity necessities, it’s crucial to keep in mind the type of information they are responsible for protecting. The future of banking cannot be successfully discussed without addressing the evergrowing need for increased cybersecurity. From the teller to the boardroom, banks are having to take a wide-lens look at their cybersecurity programs and how they can properly protect the valuable information they hold, for both their customers and their employees. As with many company-wide programs, establishing security protocols can be time consuming, but taking a look at how better cybersecurity can benefit your bank and safeguard the information you hold can start simply with the letters PII. Personally Identifiable Information, otherwise known as PII, is plentiful in banks. You hold financial information such as a bank account number and the funds within, as well as
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all the personal information that comes along with those accounts. When signing up, customers are asked for personal information about the street they grew up on, or their mother’s maiden name, and all that information is stored in your bank’s system in order to verify their identity at any given moment. As an employer, you are also holding the valuable data of your employees, such as Social Security Numbers, tax information and medical insurance data. While holding this information is par for the course in the daily operations of a financial institution, it can also be a treasure trove for criminals trying to capitalize on their next victim for a data breach or a hack. As modern bankers, you hold a significant amount of responsibility in securing your
cyber networks and protecting the information that customers and employees entrust you with. Especially as news of breaches continues to increase, customers can become concerned about the protections in place to secure their data. This is where increased cybersecurity can play a large role in company trust and customer loyalty. However, there are some factors that can threaten an organization’s cybersecurity, such as increased connectivity and new threats hackers are developing daily. Let’s examine some of the latest cybersecurity threat trends in 2017 and how they could lead to identity theft.
CONNECTIVITY, THE INTERNET OF THINGS AND BEYOND Challenges to security can come from multiple different directions, and according to the Information Security Forum1 there are four common threats that all organizations should be aware of. The first, and perhaps most pressing, is the risk attributed to the large and grow-
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ing number of connected devices populating the Internet of Things. The trend of internet enabled devices in the workplace indicates that connectivity is becoming a regular commodity; creating an “ecosystem of embedded devices” that could be difficult to secure.2 One vulnerable access point in this web of devices could lead to a data breach, making it critical to secure all the devices that can connect to company networks. Cyberspace is evolving, adding a sophistication of tailored attacks, where “specialists” hackers can offer their services to commit fraud, steal information, or even expose corporation or government misdeeds. Hackers may try to focus their talents on specific types of hacking, like through IoT devices, and contract out their skills to organizations who are trying to harm certain brands or public figures. While this isn’t a call to action to remove IoT solutions from your organization’s workflow, it’s vital to be aware of the security risks that accompany new technological changes and how to address them properly to practice the maximum amount of security.
of software where the vulnerability was not patched.
BANKING SECURITY TIES TO IDENTITY THEFT The risk of a bank hacking isn’t solely about stolen money. Bank customers and employees also have to worry about the basic PII that banks contain. In the current landscape, it’s more fruitful to steal information as opposed to money. With the PII of unsuspecting individuals, hackers can sell their information online, allowing others to commit further financial crimes, like identity theft. Identity theft can be a devastating crime that can have a major effect on the victims’ lives, and it can be the outcome of a hack at a hospital, a store or even a bank. As a result, it’s vital for all organizations to learn how to protect their sensitive information, about the risks they face, and how to figure out the best methods for monitoring the issue of identity theft on an ongoing basis. Identity theft protection can help play a large role in protecting the information of clients, customers and even employees.
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FOOTNOTES 1. Olavsrud, Thor. “4 Information security threats that will dominate 2017,” CIO, Dec. 2016 2. ibid 3. “WannaCry Ransomware has Countries Questioning Cybersecurity
ADDITIONAL THREATS TO MONITOR As an organization involved with storing customer information, it should come as little surprise that hacking attacks are expected to flourish in 2017. It’s also worth noting that hackers are likely to continue working smarter not harder, as seen in recent hacking events such as the WannaCry ransomware that affected banks, hospitals and telecommunication companies across 150 countries.3 This hack emphasizes how hackers are being more resourceful to yield higher results, working to find very common vulnerabilities in popular software and exploiting those weaknesses across multiple targets, rather than focusing all their efforts on single big prizes. That may leave smaller organizations and consumers exposed to multiple hacking attacks as the year progresses. While larger corporations have plenty of money to devote to complicated security systems, those without large IT budgets may find themselves vulnerable to crime of this type. One of the easiest ways to help prevent these types of breaks in cybersecurity – if you’re operating without a large, dedicated IT department – is to keep software up to date. Specifically in the WannaCry case, many systems were operating with outdated pieces
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Feature
Establishing a Data Governance Center of Excellence Within Your Bank By Christopher J. Sifter
A
s banks struggle with a variety of data quality and access issues, a growing number of institutions are establishing data governance centers of excellence. Approaching challenges from a people, process, and technology perspective can help banks proactively resolve data issues and maintain integrity for the long-term.
ROOT CAUSES OF DATA ISSUES Many factors contribute to data quality problems or availability issues. Data and operational systems grow Christopher J. Sifter over time, usually complicated by mergers, acquisitions, and other business changes, which can make legacy systems obsolete. In addition, large institutions tend to end up with data silos, with each line of business, project or technology application relying on separate data sources and systems. No single solution exists for data issues, but sound data governance can establish solid foundational disciplines for addressing them. Ideally, five important attributes should exist regarding data governance in a bank: 1) Trust that data is accurate and that its flow can be controlled and audited 2) Consistent access for business stakeholders 3) A single, agreed-upon source for needed data 4) A commitment to and funding for maintaining data quality and availability across the organization 5) A plan for addressing data or information requests with appropriate velocity
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PEOPLE, PROCESS AND TECHNOLOGY The attributes of effective data governance might seem desirable, but many banks might find them more aspirational than operational. What they need is a practical road map. For some, setting up a dedicated data governance center of excellence is the right solution that will address short-term needs while making these behaviors sustainable. A data governance center of excellence is a highly-organized collection of resources and assets that delivers and maintains data as a business-critical asset for operations, business management, compliance and decision-making. Its goals include improved efficiency and stability in maintaining and delivering business-critical data, improved decision-making and more efficient and
effective regulatory compliance. These goals might seem lofty. But by approaching data governance from a people, process and technology perspective, they can be achieved. • People: Trained, knowledgeable and empowered people are placed in roles that are accountable for maintaining data quality. • Process: Improved processes for data management are controlled and governed more consistently and efficiently. To be effective, the center’s policies, practices, processes and standards must be actively maintained and assured – not just written and placed on the shelf. • Technology: Optimized solutions take advantage of current technical capabilities. They are implemented, maintained
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and updated consistently across the organization, rather than in individual locations or departments.
FIVE MAJOR COMPONENTS OF THE CENTER OF EXCELLENCE A data governance center of excellence can be an ongoing, sustainable way of doing business. The overarching goal is to set proactive policies and processes that enable the center to identify potential data issues early. An effective center of excellence includes five main components: 1) Foundational elements: Define a charter and vision that can be monitored and measured over time, and define the roles and responsibilities of everyone concerned. 2) Data portfolio management: Compile and maintain a complete and up-to-date data inventory. Clarify a well-defined data flow map and oversight of data security, retention and destruction policies.
Auditing and Assurance Consulting
3) Implementation management: Determine implementation methods and tools, including assessing how individual projects are identified, approved, assigned and managed; identifying the associated necessary project management, tracking, and change management tools; and developing task assignments, resource management and resource-training programs. 4) Engineering and architecture: Establish and enforce basic system architecture and design standards that acknowledge specific technology quality assurance, testing, software configuration, change management, security and documentation standards. 5) Operations and support: Launch clear incident and service request processes, help desk protocols, hardware and software maintenance processes and other support functions.
GETTING STARTED Establishing a center of excellence is a
complex undertaking, and it is important to establish a rapid and responsive approach from the outset. First, assess a baseline of the current state of data in the organization that spells out problems and challenges and documents what is working well. Then, define goals and expectations to help identify the necessary resources, prioritize implementation tasks and build practical road maps to carry the center into the future. A data governance center of excellence can establish a problem-solving approach from a people, process, and technology perspective. In addition, it helps institutionalize the recognition that data is a critical business asset, which when properly owned, managed and protected can be genuinely valuable to the organization. ■ Christopher Sifter is a managing director in the Crowe Performance Consulting group, leading the banking data intelligence practice. He can be reached at (312) 857-7363 and chris.sifter@ crowehorwath.com.
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Feature
The New Frontier of Community Bank M&A By Dan Flaherty and Matthew Veneri
T
he community bank M&A market is at its healthiest point since the mid2000s. A perfect storm of events has created a robust market and recent increases in M&A pricing multiples have many bank boards discussing strategic options. While several factors have created this environment, none is more influential than the rising valuations of community bank stocks. Seasoned acquirers now have more firepower Dan Flaherty and a new subset of acquirers has emerged. With an attractive M&A market, the decision to remain independent versus a sale has become more difficult. Overall the M&A Matthew Veneri market expanded in each of the last 10 years through either the number of transactions or aggregate deal value. The highest pricing multiples during this period have occurred during the historical bank stock run-up since the election. Despite such favorable current market conditions, many skeptics are pointing towards a looming correction and a potential closing of the M&A window; particularly for small community banks. With signals coming from both ends of the spectrum, we are entering a new frontier of community bank M&A that requires tremendous aptitude, diligence and prudence by community bank boards.
INCREASED BUYING POWER Following President Trump’s election, community bank stocks went on a historical
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bull run. This was great news for seasoned acquirers as buying banks became a much more compelling financial play to increase shareholder value. Several larger, seasoned acquirers saw their stock valuation increase above 200 percent of tangible book and approach 18 times earnings. With valuations at this level, stock M&A transactions become immediately or very quickly accretive to capital and earnings. With some of the largest valuation increases occurring for banks with assets between $750 million to $3 billion, this group has emerged as a very active acquirer and a very attractive partner for those with assets below $500 million. Stronger, seasoned acquirers and new strategic buyers have created a more competitive M&A market, pushing pricing multiples to levels not seen in the last decade.
THE VALUATION GAP The valuation gap refers to the difference in value between the independent stock price of a bank and the merger price it could achieve with a sale. While a merger transaction almost always indicates a
premium to the trading price, a case can be made that the shareholder is better served by the bank remaining independent, improving performance and pursuing a sale in the future. Financial measurement of the valuation gap and evaluation of the risk associated with each strategic path is the backbone of fiduciary responsibility. Thus, it is a board’s obligation to analyze the size of this gap for its own bank and determine if a sale or independence is best for shareholders. This valuation gap has widened for most small banks as the pace of M&A pricing has increased faster than increases for small bank stock prices. With a favorable outlook for the banking industry, it has become attractive to team up with another institution to achieve scale and achieve increased shareholder value together. When the valuation gap is so large that value through independence cannot match that of a merger, community bank boards should evaluate strategic options. However, many bank boards feel bullish about future performance with the potential for increased interest rates, regulatory relief
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and lower corporate tax rates pointing towards a case for independence. In this new frontier of M&A, rapidly changing markets and the threat of being left behind make it imperative that boards evaluate the valuation gap on a regular basis.
A LOOMING CORRECTION OR THE GOLDEN AGE OF COMMUNITY BANK STOCKS It remains to be seen if the new valuation baseline for community bank stocks will hold. Many skeptics point to a looming correction and an overvalued market. If the Fed pauses interest rate hikes for a meaningful amount of time or reverses course all together, coupled with the inability of Washington to improve regulatory conditions for banks or lower taxes, then the skeptics may be right. A market correction would likely stall M&A activity and decrease pricing multiples, leaving many banks stranded that are looking for a merger partner. We may not see another M&A window like the current one for another full business cycle
and smaller community banks could be facing a-more-than-five-year window until strong valuations return. However, if just some of the potential tailwinds materialize for community banking, then we may be entering the golden age of community bank stocks and crossing into a new era of M&A activity.
WHAT’S NEXT FOR COMMUNITY BANK M&A? The next 12 to 18 months will be very indicative for the long-term outlook for community bank valuations. It appears the Fed has paused rate hikes for the remainder of 2017 and President Trump’s administration is struggling to get the promised regulatory reprieve and tax relief legislation passed. Investors should expect a flat stock market and a modest rate of mergers for the remainder of 2017. The full year earnings reports released in the first month of 2018 will provide validation or nullification of the new valuation levels for community banks. While valuation levels will continue
to drive M&A, the strategic rationale for community banks will remain the same. Banking is becoming more difficult and more expensive for smaller banks and increasing scale is critical to drive earnings. In the absence of earnings, banks will always look for a merger partner. While valuations will be impacted by the market, the number of community banks seeking a strategic partner will likely increase as macro level issues in banking continue to make it more difficult for small banks to thrive. With maximized valuations on the minds of all shareholders, community bank boards should be looking at M&A with a 360 degree view: who can we buy, who can we merge with or should we sell? ■ Dan Flaherty, principal of investment banking and Matthew Veneri, managing principal and co-head of investment banking, partner, serve as strategic advisors to financial institutions for M&A transactions and capital offerings at FIG Partners. They can be reached at mveneri@ figpartners.com and dflaherty@figpartners.com.
KNOWLEDGE IS THE BASIS OF SOUND ADVICE. TWENTY NINE YEARS OF EXPERIENCE TELLS US SO. As an advisor to financial companies nationwide for more than 29 years, Sandler O’Neill’s knowledge and insight have served clients well in bull and bear markets alike. The depth of experience gives our firm a unique perspective on how financial companies can best positionthemselves in the current environment. Sound, straight-from-the-shoulder advice – it’s what we do best. To learn more, please contact John Beckelman, Principal, at 212.466.7832, or visit www.sandleroneill.com.
Sandler O’Neill + Partners, L.P.
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Feature
Feeding the Media: They’re Willing, Are You Ready? By Patrick Dix
“L
ife moves pretty fast; if you don’t stop and look around every once in a while, you could miss it.” That line from the movie “Ferris Bueller’s Day Off ” happens to be one of my favorites and, believe it or not, it actually applies to your institution. Opportunities to boost the reputation and brand awareness of your bank are out there every day. But if you don’t know how to act fast, you Patrick Dix might just miss them. For the last 25 years, I’ve watched changes occur in journalism at breakneck speed. When I started as a reporter, I was using a typewriter and there were hours between newscasts. By the time I ended my career in broadcasting, reporters hardly used desktop computers and the hours of news produced locally nearly doubled. These changes don’t just affect journalists. Today, banks have an unprecedented opportunity to partner with local media. New trends in journalism allow you new avenues to offer expertise and opinion, while gaining brand recognition, credibility and free advertising for products and services. You simply need to feed the media’s new appetite. With newspaper, radio, magazine and TV all focusing more of their attention on their online product, reporters need information and fast. In newsrooms, reporters call it a “digital first” philosophy. News is presented as it happens – on social media and websites – with stories coming in small snippets and incomplete tweets and posts, not maturing into full stories until the end of the day. This rise in social media use (Facebook, Twitter, YouTube, Instagram, etc.) is allowing the conversation around issues and events
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in your community to happen 24/7, and reporters will be the first to tell you they need more help finding stories. Here are some questions to ask that will not only help you communicate with your customers but may even get you into the local headlines. First: • Is my organization ready to meet the media? • Do any of our staff members (senior management, branch managers, loan officers, etc.) have media training? • If one of the nightly networks called today and asked us to tell our story, would we be ready? • If we suddenly got 50,000 or more followers on Twitter or Facebook, would we have information they wanted to share with the rest of the world? Then, dig a little deeper: • Do we share our own good news? If you don’t, how can you expect anyone else to share it? Keep in mind, the story won’t always make it into the newspaper or on local TV, but if you share first on social media, your customers and the media have a better chance of seeing it. Reporters are much more likely to follow up on an interesting and well shared post or tweet than they are to call you after receiving a stale press release. • How are we framing the news? We all have a difficult time seeing our hard work from someone else’s perspective. It’s personal to you, and rightly so. But you have to think like a reporter. Ask yourself: -- Why would someone else care about my institution’s story and what would it mean to them? -- What else is going on in the community and would our story trump other headlines?
Looking through a wider lens may help you not only frame a better story for a reporter but also understand which stories truly are newsworthy. • What opportunities are at our disposal? Keep your eyes open. If mortgage rates hit a 30-year low, call the newspaper and see if they need someone to discuss what it means. If a report comes out about the local economy (even if it’s not good), call a TV reporter and offer to bring together some experts for a local perspective. You’ll be doing some of the reporter’s legwork and, in the future, the reporter will remember you were helpful. • Can the media be a powerful tool for us? Yes – even in small communities. In my opinion, the smaller the better! Most small-town newspapers have a digital edition even if they only print a copy of the paper once or twice a week. They’re still looking for news, and you may be one of the few people in town who can bring together diverse groups of consumers and business leaders to talk about important issues. I’ve seen bankers say they have their finger on the pulse of their small communities. Make sure your local media knows that! Remember, telling your own story through paid marketing is important, but having a neutral third party tell your story is invaluable. If you recognize your opportunities and are ready when they come up, your institution won’t get left in the dust. ■ Patrick Dix is a veteran news anchor and reporter who manages the SHAZAM Network’s public relations efforts. SHAZAM is a national single-source provider of the following services: debit card, core, fraud, ATM, merchant, marketing, platform, risk and more. To learn more, visit shazam.net.
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Notes Robert E. Stillwell
Margaret Lanning
AMBOY BANK Amboy Bank named a new president as part of a series of executive promotions. COO Stanley J. Koreyva Jr. has been promoted to president. In addition, three executives were promoted to executive vice president: Domenick Margiotta, chief lending officer; Mary Kay Riccardi, chief risk officer; G. Gregory Scharpf, chief retail banking officer.
BANK OF AMERICA Robert H. Doherty, state president for New Jersey at Bank of America, was named chairman of the New Jersey Chamber of Commerce board of directors. The move was confirmed by the chamber board. Doherty will serve a two-year term. Doherty has been serving as the New Jersey Chamber’s first vice chair for the past two years. He has been a member of the chamber’s board of directors since 2006, and has been active with the chamber since 2002.
BANKERS COOPERATIVE GROUP INC. Bankers Cooperative Group Inc. (BCG) announced the addition of James J. DiOrio to staff. DiOrio has extensive consulting experience in the area of employee benefits, human resources and insurance. In his role as senior consultant he will be primarily responsible for providing high level support in identifying and developing marketing strategies to grow and maintain persistency of BCG’s book of business. Additionally, he will serve as a technical specialist in reviewing, recommending and assisting with implementation of internal policies, procedures and systems which will help BCG maintain existing clients and attract new ones
BOILING SPRINGS SAVINGS BANK Robert E. Stillwell, president and CEO, informed the staff that he will retire effec-
Philip B. Vaz
Tracey McGovern
Gary S. Horan
tive at the end of the first quarter of 2018. Stillwell will remain a member of the board of directors. He began his career at Boiling Springs in June, 1970 as a management trainee, fresh out of college. He has held various positions at Boiling Springs including the position of senior vice president/ secretary and chief lending officer. He was chosen as president/CEO upon the retirement of Edward C. Gibney in July 2002. At the time of his retirement, Stillwell’s almost 48 year tenure will qualify him as the longest serving full time employee since the bank was formed by the consolidation of two local predecessor banks in 1939. Stillwell is only the seventh president in Boiling Springs’ history and has held the position longer than all previous chief executives other than Gibney.
INVESTORS BANK Investors Bank has named a former OceanFirst Bankexecutive as its new chief credit officer, Margaret Lanning. Lanning also will serve as a senior vice president, overseeing the monitoring of risk trends in the bank’s loan portfolio, as well as developing policies and procedures for safe credit underwriting, operations and administration. In her new role, she will report to the chief risk officer.
LINCOLN 1ST BANK Lincoln 1st Bank announced two key promotions. Philip B. Vaz, who currently serves as CFO, has been named executive vice president and COO; while Tracey McGovern, currently the bank’s vice president and controller, will transition into the acting CFO position. Vaz has held a variety of executive positions, starting with accounting assistant and moving up to financial analyst, CFO and, now, executive vice president and COO. As the bank’s newly appointed acting CFO,
Robert H. Doherty
James J. DiOrio
John W. Alexander
Tara French
McGovern will be responsible for overall financial management including accounting, balance sheet management, financial planning and analysis, corporate treasury and financial regulatory reporting.
METUCHEN SAVINGS BANK Metuchen Savings Bank announced the appointment of Gary S. Horan to the board of directors. Horan, president and CEO of Trinitas Regional Medical Center for the last 17 years, arrived shortly after the merger of St. Elizabeth Hospital and Elizabeth General Medical Center which gave birth to Trinitas in January 2000.
NORTHFIELD BANK Northfield Bank announced that John W. Alexander, chairman and CEO, has advised the company’s board of directors that he intends to retire as CEO of the company effective Oct. 31, 2017. The boards of the company have selected Steven M. Klein, president and COO, to succeed Alexander as CEO as of Nov. 1, 2017. Alexander will continue his service as chairman of the board of directors of the company. Tara French will join Northfield as executive vice president and chief administrative officer effective Sept. 18, 2017. French’s oversight and responsibilities will include corporate governance, strategic planning and risk management.
PEAPACK-GLADSTONE BANK Peapack-Gladstone Bank announced the appointment of Robert P. Konopka Jr., senior managing director, private banker at Peapack-Gladstone Bank. Konopka is now a part of the private banking team focusing on the development and growth of the New York City market while providing the bank’s exclusive one-touch private banking experience. ■
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Shots
AMBOY BANK’s Vice President and Marketing Manager, Sylvia Rapoport, presents three $1,000 checks to the winners of the first annual iPlay America Science Fair. The science fair, presented by Amboy Bank, was held on June 11 in Freehold, New Jersey. Out of over 50 students, three first place prize winners each received a $1,000 check presented by Amboy Bank, a trophy and a $500 iPlay America gift card.
CLIFTON SAVINGS BANK(CSBK) donated $7,500 to the city of Garfield to help fund festivities surrounding its centennial celebration. Paul M. Aguggia, CSBK chairman, president and CEO, and Geraldine Rambaldi, CSBK assistant vice president, Banking Center Manager, presented a check to Richard Rigoglioso, mayor of Garfield and Thomas J. Duch, Esq., city manager of Garfield.
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As the NJBANKERS BUILD five-year commitment drew to a close, the NJBankers team spent their last build helping shore residents. Left to right, NJBankers Habitat Coordinator Michael Affuso, executive vice president and director of government relations; Erin Suckiel, assistant to the director of communications; Claire Anello, database, website and office manager; Diane Starr, administrative assistant to education department; and John McWeeney Jr., president and CEO.
PEAPACK-GLADSTONE BANK presented a $500 contribution to the Chatham Historical Society to support their efforts to promote awareness of the rich history of Chatham Borough. Presented by Laura Zmijeski, assistant vice president, Wealth Management Consultants, a division of Peapack-Gladstone Bank, to Helen Ann Rosenfeld, president and Amy Crandall, vice president of the Chatham Historical Society, this contribution will support the society’s public appreciation of Chatham Borough’s character and history. Pictured: Laura Zmijeski presents Peapack-Gladstone Bank’s contribution to Helen Ann Rosenfeld, president of Chatham Historical Society and Amy Crandall, vice president of Chatham Historical Society.
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PROVIDENT BANK The official banking partner of the Sky Blue FC women’s professional soccer team, partnered with the team to host a youth soccer clinic for members of the Jersey City Soccer Association and Bayonne Youth Soccer Association U15 girls. The clinic was held at the Caven Point Sports Complex in Jersey City, New Jersey. Pictured: Sky Blue FC players with members of the Jersey City Soccer Association.
Three representatives from REGAL BANK volunteered at Junior Achievement of New Jersey’s Latino Day at First Avenue School in Newark. In addition to volunteers from other organizations, the Regal Bank volunteers worked to inspire and prepare 675 K-4 elementary students to dream big and reach their full potential. Emphasis was placed on financial literacy, work readiness and entrepreneurship. Pictured: Luke de Araujo, vice president of compliance; Vanessa Nesheiwat, operations manager; and Zoraida Duran, compliance specialist, volunteered their time and energy on behalf of Regal Bank in support of the community. de Araujo also helped to coordinate the event.
ROSELLE SAVINGS BANK has selected Elizabeth, New Jerseybased Community Access Unlimited (CAU) for a donation to help further its mission of providing community access through a broad array of person-centered support services for adults and adolescents with intellectual and developmental disabilities. The charitable organization, founded in 1979 by Executive Director Sidney Blanchard, also provides support to at-risk youth and people with affordable housing needs by giving them the opportunity to live independently, and to lead normal and productive lives as citizens integrated into the community. Pictured: From left to right, Community Access Unlimited (CAU) founder and Executive Director Sidney Blanchard; Detlef Felschow, Roselle Savings Bank President and CEO; and Joanne Oppeit, CAU Assistant Executive Director and Director of Business Development. CAU plans to apply the donated funds to its mission of providing community access through a broad array of person-centered support services.
UNITY BANK donated $1,400 to the Making-It-Home program of the Bergen Volunteer Center to help furnish 14 new apartments for U.S. military veterans. Making-It-Home works with businesses, individuals, government and nonprofit agencies in Bergen County to bring home furnishings to formerly homeless, disabled and low-income families in need. Pictured: Cynthia Massarsky, director of Making-It-Home, is pictured receiving the donation from Frank Di Dolci, relationship manager for Unity Bank’s Emerson branch.
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