New Jersey Banker Summer 2015

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Century Savings Bank Celebrates 150 Years | Amending IRA Documents | Successful Survivors ENDORSED BY THE NEW JERSEY BANKERS ASSOCIATION

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Proudly serving as counsel to the new Jersey Bankers association

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JERSEY B A N K E R

NJBankers Board of Directors John W. Alexander Chairman/Chief Executive Officer Northfield Bank

James P. Genoy, Jr. President/Chief Executive Officer/Treasurer Monroe Savings Bank, SLA

Anthony Labozzetta President/Chief Executive Officer Sussex Bank

Kevin Cummings President/Chief Executive Officer Investors Bank

David J. Hemple President/Chief Executive Officer Century Savings Bank

Stewart E. McClure, Jr. * Regional President Lakeland Bank

Louis Anthony Costantino, Jr. * Managing Director, Industry Manager J.P. Morgan

Thomas J. Holt Senior Vice President Bank of America

D. Nicholas Miceli Market President TD Bank, N.A.

Edward Dietzler President The Bank of Princeton

James A. Hughes President/Chief Executive Officer Unity Bank

Peter Michelotti President/Chief Executive Officer Community Bank of Bergen County.

John S. Fitzgerald * President/Chief Executive Officer Magyar Bank

Henry P. Ingrassia President/Chief Executive Officer Glen Rock Savings Bank

Craig L. Montanaro * President/Chief Executive Officer Kearny Bank

Paul E. Fitzgerald President/Chief Executive Officer First Choice Bank

Thomas J. Kemly President/Chief Executive Officer Columbia Bank

John E. McWeeney, Jr. President and Chief Executive Officer ext. 627 jmcweeney@njbankers.com James M. Meredith Executive Vice President and Chief Operating Officer ext. 614 jmeredith@njbankers.com

Claire Anello Office Manager, Database and Website Manager ext. 631 canello@njbankers.com

Michael P. Affuso, Esq. Executive Vice President and Director of Government Relations ext. 628 maffuso@njbankers.com

Cris Goncalves Manager of Education ext. 630 cgoncalves@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

Contributing Editor Emily T. DeMasi

Robert Rey President/Chief Executive Officer NVE Bank Peter G. Schoberl Chairman/President/Chief Executive Officer Community First Bank Kathleen Stone Regional President/NJ Executive Susquehanna Bank

NJBankers Officers

NJBankers Staff

Jenn Zorn Senior Vice President and Director of Education & Business Development ext. 611 jzorn@njbankers.com

Michael Nardo Executive Vice President/NE U.S. Market Executive – Corporate Banking PNC Bank, N.A.

Lauren Barraza Executive Assistant ext. 618 lbarraza@njbankers.com Erin Suckiel Assistant to the Director of Communications ext. 629 esuckiel@njbankers.com Cynthia M. Zaccaro Assistant to the Director of Education and Business Development ext. 632 czaccaro@njbankers.com

Gerald L. Reeves * Chairman President/Chief Executive Officer Sturdy Savings Bank

James S. Vaccaro * Second Vice Chairman President/Chief Executive Officer Manasquan Savings Bank

Angela Snyder * First Vice Chairwoman Chairwoman/CEO Fulton Bank of New Jersey

John E. McWeeney, Jr. President and CEO New Jersey Bankers Association

Counsel Michael M. Horn, Esq. McCarter & English, LLP Mary Kay Roberts, Esq. Riker, Danzig, Scherer, Hyland, Perretti LLP

*Executive Committee

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

Katherine Davey Administrative Assistant/Receptionist ext. 600 kdavey@njbankers.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.

Summer 2015 New Jersey Banker

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SPECIALIZED EXPERTISE

Table of Contents

Audit & Compliance SEC Rules & Regulations SOX 404 Internal Audit Control

MASTER the

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Network Attack & Penetration Information Systems Audit Business Resumption Planning

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Strategic & Succession Planning Profit & Process Improvement Enterprise Risk Management

Cover 16

Master the .BANK Domain

Departments

Tax Planning & Advice Tax Preparation & Compliance Tax Accounting

6 Chairman’s Platform 10 Politics & Policy Successful Survivors

A Real Commitment 8 From the President’s Office At Your Service 9 Upcoming Events

Audit & Co-Sourcing Regulatory Compliance

22 New Associate Members

28 Bank Notes

29 Bank Shots

Features

Insurance & Trust

THE SNODGRASS APPROACH: PERSONAL, PROACTIVE and EVOLVING over time. Our team of expert practitioners have been providing business consulting services since 1946.

Visit us on www.srsnodgrass.com | 800-580-7738

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New Jersey Banker

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Directors’ Corner Yea or Nay, Board of Director Loan Approval

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Feature Borrowers' Failure to Comply with Trial Period Plan Means No Loan Mod

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Meet Our Endorsed Service Provider Retirement Planners with More Than 70 Years of Experience

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Feature When and How to Amend IRA Documents

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Meet Our Endorsed Service Provider Are You an IRA Fiduciary Advisor?

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Behind the Teller Line Century Savings Bank Celebrates 150 Years

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NJBankers Events New Jersey Bankers 111th Annual Conference

Summer 2015

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Chairman’s Platform

Successful Survivors

By Gerald L. Reeves

T

here is no doubt that we have been through one of the most significant and challenging financial downturns in the history of the U.S. The number of banks has declined in the nation as well as in New Jersey. Nationwide, in 1994, there were 12,604 banks; in 2004, there were 8,976.

Today*, there are 6,509 banks in the nation.

In New Jersey, the decline in the number of banks follows the nation’s trend with 184 banks in 1994 and 139 in 2004. Today, Gerald L. Reeves there are 98 banks Chairman in the state.

NJBankers President and CEO As we know, Sturdy Savings Bank there have been bank failures

throughout the country. Because of the strength of the banking industry in N.J., thankfully, there have only been six failures in the Garden State. In addition, there is a trend for industry consolidation through numerous mergers and acquisitions.

We are the survivors.

NJBankers members have not only weathered the storm but continue to be successful through it all. Our delinquent loan levels are falling, our earnings are recovering but we need to share the message that we are more than survivors. We are here to succeed and support the communities we serve.

Members continue to employ New Jersey residents who are taxpayers and voters. We help businesses of all sizes and homeownership is made possible with our lending programs. We support communitybased organizations and charities. Look at our industry commitment to the NJBankers

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Addressing Your Bank’s Needs • • • • • • •

Internal Audit Outsourcing Regulatory Compliance Audit & Training Collateral Field Examinations Asset Liability & Liquidity Examinations Information Technology Audits Data Mining & Analysis Penetration & Vulnerability Assessments

• Sarbanes-Oxley & FDICIA Documentation & Testing • Trust Department Examinations • Fraud Examinations • Staff Training • BSA & Anti-Money Laundering Examinations

Bankers Build initiative with Coastal Habitat for Humanity – more than 500 bankers rolled up their sleeves and logged 4,800 work hours to help our neighbors who were affected by Superstorm Sandy!

There is much we can do to tell our story. Our customers and future customers, in addition to our collective initiatives to promote financial literacy, must also be taught about the meaning of safety and soundness. Legislators, both at the state and federal levels, need to recognize our successes and the contributions we make to their constituency.

We need the support and help of our regulators. They too need to recognize our successes and withstand administration pressures to tighten standards for prudent, sound banks – like us!

Share the message of our safety, soundness, success and survival. The only way we will do that is through engagement.

Join us in our advocacy efforts.

Join us when we meet with regulators in Washington, D.C., Sept. 29–30. Come to the Government Relations Summit in Washington, March 14–16, 2016, where we meet with legislators. The more bankers who are engaged, the louder our voices become.

NJBankers also offers Bankers Leadership Day in Trenton with the same intent – engage and educate our legislators as to the state of our industry. This opportunity to meet with legislators will be in early 2017.

Have you participated in COES meetings? These meetings are opportunities to get our message to the “right” people.

There’s no need to leave your office. You can phone in to participate in the meeting.

The same is true for the 24 committees that meet to discuss everything from ERM to Marketing. Committees are a great way to network and learn from your peers.

Let’s join a collective effort to share the message that we are indeed successful survivors and then let’s celebrate our success! ■ *Statistics for “today” are based on number of banks at year-end 2014.

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New Jersey Banker

Gerald L. Reeves is chairman of the New Jersey Bankers Association and president and CEO of Sturdy Savings Bank. He can be reached at greeve@sturdyonline.com.

Summer 2015

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From the President’s Office

At Your Service

By John E. McWeeney, Jr.

A

s we head into the summer season, more than just the weather is heating up here in New Jersey.

So too are the community service activities of NJBankers and New Jersey’s banks.

Community service has become synonymous with banks, as bankers across the Garden State volunteer their time to support their neighbors and friends.

Projects can range from large, John E. McWeeney, Jr. statewide iniPresident/Chief Executive Officer NJBankers tiatives like the NJBankers Bankers Build Program with Habitat for Humanity (see page 10) to sponsoring the local Little League team.

For years New Jersey’s banks, large and small, have been active in supporting their communities. So much so that

The NJBankers Public Relations and Marketing Committee initiated a Community Service Award Program as a way to recognize banks that go above and beyond in their civic and charitable activities. Each year we ask some members of the New Jersey Chapter of the Public Relations Society of America to review all of the banks included in our annual summary and select those institutions that really stand out. Winners are selected in seven different size categories that range from banks with less than $300 million in deposits to large national banks. This year’s winners were recognized at our Annual Conference in Nashville and included Millington Savings Bank, Sturdy Savings Bank, Two River Community Bank, Oritani Bank, Kearny Bank, Garden State Community Bank and TD Bank. Congratulations to the winners and to all of our member banks for the outstanding work they do in supporting their communities.

In addition to volunteering their time, New Jersey’s banks have a long and consistent track record of donating their money to help support worthy and needy causes.

NJBankers compiles an annual summary of the community service projects of our member banks that we share with legislators and the media in an effort to get this great story out. This year’s recently completed summary captures the activities of 42 banks that run the gamut from financial literacy to service on nonprofit boards to walkathons to food drives to senior outreach to health clinics – and on and on it goes. The outreach is broad and touches virtually every corner of our society.

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New Jersey Banker

Recognizing the importance of community service, NJBankers has stepped up its efforts in recent years to complement what our bank members are doing and also combine the efforts of the banking industry for broader regional or statewide initiatives. Targeted causes or organizations for these efforts have included Habitat for Humanity, New Jersey’s food banks and New Jersey Special Olympics.

In addition to volunteering their time, New Jersey’s banks have a long

and consistent track record of donating their money to help support worthy and needy causes. The monies are significant and when combined add up to millions of dollars in donations contributed each year. NJBankers has participated in this arena as well through the New Jersey Bankers Education Foundation.

Founded in 2005, the foundation was established to honor fallen or permanently disabled military members in the Afghanistan and Iraq wars by providing scholarships to their eligible dependents. Either the dependent or the service member must have a connection to New Jersey. The foundation is completely funded by New Jersey banks and governed by industry trustees. To date the foundation has awarded scholarships to the spouses of two fallen service members as well as provided funding for veteran education and training programs at the Rutgers Office of Veteran Affairs, Operation First Response and Rider University.

In an effort to broaden the industry’s charitable efforts, the NJBankers Board of Directors recently approved changing the name of the Education Foundation to the New Jersey Bankers Charitable Foundation and expanding its mission to consider charitable requests beyond supporting veterans and their families.

The foundation will continue to have a dedicated commitment and funding to support veterans and their families but raise new monies from NJBankers to support other charitable causes.

It should allow the banking industry to further its impact in supporting New Jersey’s communities.

Thank you to all of our banks and bankers for all that you do to help our neighbors and friends in need. At NJBankers, we’re sure proud to be a part of the team.

■ John E. McWeeney, Jr., is president and CEO of the New Jersey Bankers Association, and can be reached at jmcweeney@njbankers.com.

Summer 2015

Upcoming Events

August 10, 2015 Annual Summer Golf Outing and Networking Reception Montclair Golf Club, West Orange

November 20, 2015 Directors College with FDIC Crowne Plaza Monroe, Monroe Township

September 9-11, 2015 Annual Senior Management Conference Ocean Place Hotel, Long Branch

December 1, 2015 Future Leaders in Banking Gala in Conjunction with BankHorizons Tropicana Casino & Resort, Atlantic City

September 29-30, 2015 Washington DC Regulatory Visit Mayflower Hotel, Washington, DC

December 2, 2015 BankHorizons 2015 Tropicana Casino & Resort, Atlantic City

October 21, 2015 Enterprise Risk Management Conference Crowne Plaza Monroe, Monroe Township

January 15, 2016 Economic Leadership Forum The Palace at Somerset Park, Somerset

November 17, 2015 CFO Conference with FMS Renaissance Woodbridge Hotel, Iselin

May 11-15, 2016 112th Annual Conference The Phoenician, Scottsdale, AZ

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Summer 2015 New Jersey Banker

9

Politics and Policy

A Real Commitment

By Michael P. Affuso, Esq.

I

n the months after the wake of Superstorm Sandy, many commitments were made and promises kept, but life being life, people move on, new issues arise, other priorities are found.

NJBankers and our members committed to Habitat for Humanity.

Our goal was an ambitious one; to remain and continue when others had left and moved on.

In the summer of 2013, NJBankers Michael P. Affuso and our members Executive Vice President/ Director of Government Relations began, as part of NJBankers an industry-wide response, a partnership with Coastal Habitat for Humanity for a 30-day summer

build program. The projects are part of a five-year program in some of the areas of New Jersey ravaged by Superstorm Sandy.

There were more than 10,000 homes damaged by Superstorm Sandy in Southern Monmouth County and the rebuilding process will take several years.

NJBankers and our members provided manpower and financial resources. Every Tuesday and Thursday, a team of eight to 10 bankers were at work on a Habitat project. In addition, each institution pledged $100 to Coastal Habitat for each banker working on each day. In total, bankers worked 30 days, providing nearly 2,000 volunteer hours and thousands of dollars in donations.

The work continued in 2014.

Last summer, NJBankers and our members continued our partnership with

Coastal Habitat for Humanity for a 20 day summer build program. Coastal Habitat for Humanity is poised for the long-term recovery and plans to assist over 100 families annually. This summer build was even more successful than our plans. In total, bankers worked 28 days and provided nearly 2,800 volunteer hours and thousands of dollars in donations.

To date, the program has been a great success, with more than 35 banks from all over New Jersey providing 58 days of construction with over 500 bank volunteers doing the work. We were also able to raise $55,000 as a direct donation to Habitat, as well as several individual contributions; one banker purchased all of the appliances for one house.

The work continues today.

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Summer 2015

with Coastal Habitat for Humanity and beginning a new partnership with Bergen Habitat for Humanity.

NJBankers will be continuing efforts in 2015 with a 25-day summer build program with both Coastal Habitat and Bergen Habitat. The program will run from June through August.

Habitat for Humanity works with low- to moderate-income families in their area to give them an opportunity to help themselves, to own a decent, affordable home of their own, which they pay for and maintain. Partner families invest hundreds of “sweat equity” hours building their homes and the homes of others.

These homes are sold at no profit and with no interest charged. Mortgage payments are then used to finance additional houses. Habitat volunteers provide the labor and individual sponsors provide the financial resourses and materials to build the Habitat houses.

The support from NJBankers’ members has been extraordinary. Within

days after an email from NJBankers President and CEO John E. McWeeney Jr., the calendar was committed to institutions. In addition to providing

ated teams. These teams allowed bankers not only to work with co-workers, but also meet other bankers from smaller institutions.

The program has been a great success, with more than 35 banks from all over New Jersey providing 58 days of construction with over 500 bank volunteers doing the work. community service, many bankers were excited about using the opportunity for team building. The projects also fulfill more than volunteering and team building, they also allow employees of smaller institutions which could not provide a full team to be paired with other similarly situated people to form amalgam-

Please follow us on Twitter and you can look forward to other updates in our weekly bulletin.

■ 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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Summer 2015 New Jersey Banker

11

Directors’ Corner

Yea or Nay, Board of Director Loan Approval

By Noel R. Holland

T

he intent of this article is to suggest that directors may wish to examine, from a best practice vantage, the current propriety of having directors approving individual loans either in the forum of the Board Loan Committee or the actual board of directors’ meeting for their institution. As a disclaimer, the comments set forth are those of the writer only, and shall neither be considered the position of the institution nor the law firm with which the writer is associated, nor shall they be reNoel R. Holland lied upon as legal advice or legal opinion.

While many larger institutions, and/or institutions with recent charters, do not have di-

rectors’ approve individual loans, it has been common practice for small and medium size institutions, to have at least certain categories or sizes of loans receive director approval.

Historically this traces to the business model of such institutions gathering deposits from the communities in which they are located, lending these same monies within such communities, and relying on their directors local experience and community involvement to assess the credit worthiness of these potential local borrowers.

As the financial industry has matured, and simultaneously the volume of loans and the complexity of underwriting and securitization has increased, the tendency has been for a bank’s board of directors to delegate the authority to approve certain loans, very often based upon limited dollar amounts, to management. This has resulted in boards addressing

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the largest, and sometimes most complicated transactions. While many directors may possess the expertise to review such a proposed transaction, some may not have the background to appreciate the significance of certain aspects of the financial statements presented or the loan structure at issue. This raises the question whether management or the board is in a better position to approve individual loans.

It raises a further question whether such individual loan approval falls within the scope of board oversight or “crosses” into an everyday management decision.

From a regulator perspective, generally regulators continue to require adherence to the long standing principles that directors owe a duty of care and a duty of loyalty in fulfilling their responsibilities of oversight of the core functions of an institution. While against individual directors, regulators generally suggest that these lawsuits have arisen only in the case of failed institutions where individual directors did not properly fulfill their recognized fiduciary duties. Regardless, such lawsuits highlight the potential personal liability that each director is subjected to as a result of board service, and possibly loan approval.

While certainly within the scope of the duty of care and duty of loyalty, a bank’s board has the responsibility to provide oversight of the bank’s lending function, it also appears clear, that in the absence of specific statutory or regulatory requirement, a board may delegate the individual loan approval process, provided appropriate loan policies are adopted and adhered to. It is the suggestion of the writer, recognizing a board has a finite amount of time, that a board may wish to consider, that rather than utilizing time on individual loan approvals, that a bank’s board of directors may more properly address its duties and responsibilities by exercising diligent and robust oversight of the entire lending process.

Such oversight should include but not be limited to: • Establishing and/or approving both the short term and long term strategic objectives for a bank’s lending program while simultaneously developing a monitoring process to be certain that such strategic goals are met;

Summer 2015

• Developing detailed lending policies which contain specific limits and specific approval authorities; • Developing a process for tracking and reporting to the bank’s board on a periodic basis any exceptions to such policies on approved loans; • Establishing a detailed timely reporting process for actual loan approvals, with enhanced detail on larger or out of the ordinary loans; • Ensuring that qualified individuals are hired and retained as credit and loan officers; • Receiving thorough reports on any incentive compensation earned by members of management in connection with loan approval; • Establishing detailed standards for product mix and diversification, as well as concentration limits as to types of loans, and within such loan categories, further limits possibly for industry type, geographic location, etc.; • Developing methods of monitoring the interest rate risks associated with the various types of loans and the duration or term of such loans, as well as setting appropriate interest rate limits; • Establishing detailed procedures for timely board notification of loan delinquency, default circumstance and real estate owned; • Developing a thorough understanding of the methodology and calculation of the allowance for loan losses; • Ensuring that appropriate loan review and compliance review is undertaken and reported to the bank’s board; and • Establishing a procedure for comparing present performance on many of the items outlined above versus past performance, as well as the performance of the institution versus the institution’s peers.

If after considering the matter, a bank’s board questions whether present day best practice should result in changes to its loan approval process, the institution should at a specific circumstance, as well as the policy changes that are required to be certain that the director’s continue to appropriately exercise oversight over the bank’s lending function.

■ Noel R. Holland, Esq., is engaged in the private practice of law and currently serves as the chairman of the board of directors of Columbia Bank.

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• A board of directors that is comprised of our clients – presidents and CEOs – who use our products and services and trust their retirement future to Pentegra.

• A comprehensive array of retirement plan solutions, including 401(k) plans, defined benefit pension plans, KSOPs, ESOPs, profit-sharing and moneypurchase plans, and cash balance plans to help you implement a more costeffective strategy to offset some or all of the expenses related to your retirement plan and other employee benefit programs.

• A full service approach to retirement plan management that delivers custom plan design, administration and recordkeeping, investment management, plan consulting, legal support, plan compliance, fiduciary responsibility and employee education and communications.

• Plan features designed especially for banks, including the ability to offer bank holding company stock and/or bank certificate of deposits as investment options, and private label retirement programs for bank commercial clients.

• A level of fiduciary oversight that is unmatched offering the ability to fulfill all three principal roles in a retirement plan – as an ERISA 402(a) named fiduciary, as a 3(16)(A) plan administrator, and as a trustee, whether as a fully discretionary trustee with sole authority over plan assets or as a directed trustee.

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www.eosnj.com Summer 2015

Are You an IRA Fiduciary Advisor?

T

he Department of Labor (DOL) has recently released proposed regulations that redefine who is considered a “fiduciary advisor.” Often, when news like this is reported, bankers worry about how these rules will impact their business.

Many “IRA experts” have written about the gloom and doom of these new rules. But for most (but not all) bankers, these rules will have no impact at all.

Typically, fiduciary advisors are fee-based financial advisors, because a fiduciary advisor is defined as anyone who provides investment advice for a fee. However, the new DOL guidelines will define a fiduciary advisor as anyone who provides investment advice to an IRA owner for a fee or other compensation. If a fiduciary receives any consideration for his own personal account in connection with a transaction involving the income or assets of an IRA, it is a prohibited transaction, which would disqualify the IRA. Because fee-based financial advisors receive their income from the IRA investor and not from the investment, the prohibited transaction rules are not a concern. However, for advisors who derive their income from commissions and other fees or revenue sharing, the prohibited transaction rules are a very real concern.

Thus, under the new DOL guidelines, IRA trust departments and brokerage firms will need to restructure their business model to limit advisors to fee-based, not commission-based or any other form of compensation-based advice.

For banks that invest IRAs in traditional savings-type products, such as certificates of deposit or time deposit accounts, this rule is not a concern. The bank employee is not rendering investment advice. However, one of the concerns that bankers have expressed was whether offering information or education, especially to individuals who are contemplating rolling over funds from a workplace retirement plan to an IRA, would be treated as investment advice. Fortunately, the DOL proposal excludes education from the definition of IRA investment advice, so plan sponsors may continue to provide general education to IRA owners, including education on rollovers, without triggering fiduciary duties.

■ PMC is an NJBanker endorsed service provider and a "go-to" source for up-to-date, reliable and verifiable information on IRAs and HSAs. PMC sponsors the National IRA Compliance Seminar, regional IRA workshops and IRA Express Training Video Series. PMC also offers the IRA and HSA Hotline Service, the IRA Insider monthly newsletter, IRA reference manuals and guides, and print and electronic IRA and HSA forms and customer brochures. To see how PMC can help you, please visit www. pmc-corp.com or call 800-233-3207.

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15

COVER

MASTER the

.BANK

Domain: Six Steps to Success

I

f you are a banker, the world of the Internet – as you currently know it – is about to change.

This year the global banking community, led by fTLD Registry Services and supported by dozens of associations and industry leaders, including the American Bankers Association and the Financial Services Roundtable, will have the opportunity to create a new online location for their businesses.

Right now, more than a thousand new domain extensions are making their way to the Internet – but only one has been created by banks, for banks.

It’s called .BANK. .BANK is a new, more secure Internet domain for banks. It is an easily identifiable channel for trusted communications between banks and their customers. And .BANK is a place for growth and innovation.

Only verified members of the banking community can have a .BANK domain for their trademarks, trade names and service marks.

Banks contend with a range of operational issues, from launching and cross-selling financial products, to improving customer retention, to meeting compliance and regulatory requirements. In ad-

16 New Jersey Banker

dition, banks must protect their assets and operations from the very real threat of cyber security. Migrating to a .BANK domain provides a lot of answers and options. .BANK is brand new, and how banks use the new domain will undoubtedly vary. But there is one thing every bank has in common regarding their .BANK domain name – time.

“It’s important that banks get ready now,” said Craig Schwartz, managing director of fTLD, the private company that is owned, operated and governed by banks, insurance companies and their respective trade associations. “Our research with banks shows a high level of awareness about the .BANK domain however, they may not yet realize the process, the implications, or the full value that a .BANK domain can deliver. If banks delay, they run a risk of being unable to secure their preferred web address. No other domain can match the caliber of value, security and trust like a .BANK address.”

In fact, enhanced security requirements are one of the primary reasons for banks to consider when evaluating the new domain, according to fTLD’s market research. Schwartz explained that fTLD will implement a series of critical controls not currently required

Summer 2015

by the operators of any other commercial domain, in order to mitigate existing cyber risks and build a high-trust environment for users of .BANK. “With today’s technology, we know there is no silver bullet that will eradicate the malicious activities that are propagated over the Internet,” said Schwartz. “But the security requirements fTLD mandates for .BANK domains will bring a level of trust and protection that exceeds that available in any existing commercially available gTLD.” The .BANK domain was available in mid-May for banks with trademarks registered with ICANN’s Trademark Clearinghouse. But according to Schwartz, the majority of banks were eligible to purchase their domain during the general availability period that started in June. .BANK domains will be available on a first-come, first-served basis, so it is important for banks to get ready. The American Bankers Association, one of the Founders of fTLD, is offering several tips for getting started: 1. Organize a .BANK project team, and include marketing, plus those responsible for your Internet platform, IT, and legal. By forming a working group of these representatives, banks can get a broad sense of the needs and possibilities for a .BANK domain.

2. It’s likely a bank uses a third party to host its website or to provide other online services. That external resource should be part of the working group, to ensure that all technical aspects are considered.

Even if banks don’t plan to use one or more .BANK domains right away, ABA recommends registering them so they are available when the bank is ready to use them.

3. Consider protecting trademarks. If banks have registered their trademark in ICANN’s Trademark Clearinghouse (TMCH), they may apply for an exact match of that mark. If banks do not have a registration in the TMCH, they may apply for a domain that corresponds to their trademark, trade name or service mark.

4. Evaluate whether to move all activities to .BANK or to maintain certain activities in an existing domain such as .COM. Many banks will purchase terms related to their main brand trademark, but also for their products, services or locations.

5. Check into the names available through the registrars. Due to the enhanced security requirements behind .BANK, including mandatory verification of eligibility, the .BANK domain can only be purchased from fTLD-approved registrars. The current list is viewable at the ftld website – ftld.com.

6. Once banks have made the decision to purchase one or more .BANK domains, they need to consider how it will be deployed. It is expected that some banks will transition their consumer-facing online presence to .BANK to maximize the value of participation, while others will use the new address as a channel to communicate with customers, other banks or regulators.

“It’s critical that banks get educated and mobilized quickly,” said Schwartz. “The .BANK domain will be a trusted, verified, more secure and easily identifiable location on the Internet for them to do business. Banks that can organize themselves now will be the ones that truly take advantage of this significant step forward for the industry.”

For more information, consult the fTLD website at www.ftld.com for updates on .BANK registration, registrars and additional information on policies and requirements.

■

ENHANCED For banks, their customers and Internet users, enhanced security means a restricted, specialized, highly controlled environment, free from many of the malicious activities that occur in other generic top-level domains. fTLD maintains high standards of security and takes an active approach to working with the global banking community to enhance trust in the online financial system. fTLD employs enhanced consumer protection safeguards designed to mitigate cybersquatting, typosquatting, phishing and other harmful activities. fTLD’s enhanced security requirements, which apply to itself, its approved-registrars and entities that register domain names, were developed by its community-based Security Requirements Working Group.

The complete list of requirements is available on fTLD’s website. Some highlights include: • Mandatory verification and re-verification of charter/ licensure for regulated entities to ensure that only legitimate members of the global banking community are awarded domain names.

• Domain name system security extensions (DNSSEC) to ensure that Internet users are landing on participants’ actual websites and not being misdirected to malicious ones. What makes fTLD different and better is that DNSSEC is required for itself as the operator of .BANK as well as all the organizations that register domain names. DNSSEC creates a chain of trust that is a unique requirement for .BANK. • Email authentication to mitigate spoofing, phishing and other malicious activities propagated through emails to unsuspecting users.

• Multi-factor authentication to ensure that any change to registration data is made only by authorized users of the registered entity.

• Enhanced encryption to ensure security of communication over the Internet to prevent eavesdropping, data tampering, etc.

• Prohibition of proxy/privacy registration services to ensure full disclosure of domain registration information so bad actors cannot hide.

Summer 2015 New Jersey Banker

17

Behind the Teller Line

Century Savings Bank Celebrates 150 Years A SESQUICENTENNIAL OF COMMUNITY BANKING PLUS

T

his year marks Century Savings Bank’s 150th anniversary, and the bank plans to observe its sesquicentennial with a yearlong celebration.

“We’ve all seen how the financial landscape constantly changes, but sound financial principles and our deep-rooted commitment to the communities we serve have enabled Century Savings Bank to not only survive, but flourish for a century and a half,” said J. Alan Woodruff, Chairman of Century’s board of directors. He continued, “One hundred and fifty years is a remarkable milestone in the banking industry.

We are stronger than ever, and we are extremely excited to share this success with our customers, friends and neighbors.”

Throughout the year, Century Savings Bank’s celebratory plans will include an interactive multimedia campaign featuring local customers and community partners, an expansion of the centurysb.com website to memorialize the history of the bank and the communities it serves, and implementation of its eagerly anticipated 150 Days of Giving initiative.

The innovative 150 Days of Giving initiative, which began on the bank’s anniversary date of June 9, consists of a series of events, giveaways and random acts of kindness, compliments of the bank. Deborah Holman, Century’s vice president of marketing, explained, “Century Savings Bank has always considered our customers to be one of our greatest assets. We feel extremely fortunate to have built such lasting relationships with not only them, but their families as well. We attribute much of our success to these relationships, and this initiative is our way of expressing our thanks.” In the coming months, Century Savings Bank employees will be unexpectedly popping up all over Cumberland, Gloucester and Salem counties to carry out an assortment of “Day-Bettering Deeds.”

This ambitious undertaking illustrates the bank’s dedication to the people of South Jersey. Century was founded for the purpose of bettering this community when, in 1865, a group of Bridgeton businessmen recognized the need for a bank to help manage the economic growth in the region.

Originally known as the Bridgeton Saving Fund and Building Association, the bank emerged during a time of unrest in the country.

President Abraham Lincoln had just been assassinated; the Civil War was coming to an end, and the country had just suffered through numerous battles. As reconstruction began, Century Savings Bank was there to provide sound financial advice and a fresh start for many in the area. Generating prosperity and homeownership throughout the town, the bank was instrumental in helping to establish Bridgeton as the “city of homes.”

What started out as a small building and loan association with $2,096.50 in total assets has since grown into a $440 million financial force servicing individuals and businesses from its network of six strategically located branches in Elmer, Gibbstown, Mullica Hill, Upper Deerfield Township and Vineland.

Never straying from its roots, Century Savings Bank now offers South Jersey residents the best of both worlds – the combination of

18 New Jersey Banker

Summer 2015

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“It has been Century Savings Bank’s privilege to offer true community banking plus for the last 150 years; and as we reflect on our past, celebrate our present, and look forward to our future, we are committed to making that “plus” mean more than ever before – more convenient services; more money available for loans, mortgages and lines of credit; more charity initiatives; and even more community-oriented outreach,” said David Hemple, president and CEO. Century’s unwavering, yet forward-thinking, commitment to provide more is something that has set the bank apart and allowed it to become one of America’s oldest banks. ■

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Connect with us: bakertilly.com/industries/banking/ Want to receive our banking articles? Go to: bakertilly.com/insights/subscribe Baker Tilly refers to Baker Tilly Virchow Krause, LLP, an independently owned and managed member of Baker Tilly International. © 2015 Baker Tilly Virchow Krause, LLP An independent member of Baker Tilly International

Summer 2015 New Jersey Banker

19

Feature

Borrowers’ Failure to Comply with Trial Period Plan Means No Loan Mod

T

he case law in New Jersey has been settled that a borrower is not entitled to a modification as a matter of right. See Payen v. Impac Funding Corp., No. A4087-12T3, 2014 N.J. Super. Unpub. LEXIS 1955, at *11 (App. Div. July 29, 2014) (“Federal case law suggests that modifications are not mandatory under HAMP, and that there is no private cause of action for violation of the program’s guidelines in any event.”); Warner v. Sovereign Bank, No. A-2744-12T2, 2014 N.J. Super.

Unpub. LEXIS 1679 (App. Div. July 11, 2014) (finding that borrower did not have any right to a loan modification and that the lender’s refusal to grant borrower a loan modification did not breach the covenant of good faith and fair dealing).

In two recent decisions, the New JerJoy Sperling sey Appellate Division, while not stepping away from the principle that there is no obligation to modify a loan, held that language contained in trial period plan agreements issued pursuant to the federal Home Affordable Modification Program (HAMP) could require a lender to provide a modification. However, the courts found that there was no such obligation because the borrowers did not Christina Parlapiano comply with their payment obligations under those agreements. See Miller v.

Bank of Am. Home Loan Servicing, L.P., No. A-0169-13T2, 2015 N.J. Super. LEXIS 35 (App. Div. Mar. 5, 2015); Arias v. Elite Mortg. Grp., Inc., No. A-4599-12T1, 2015 N.J. Super. LEXIS 13 (App. Div. Jan. 23, 2015). In so doing, the courts made clear that borrowers are required to fully comply with a trial period plan agreement in Nancy Todaro order to be considered for a permanent modification of their loans.

As in Arias, discussed below, the trial period plan agreement at issue in Miller contained language that made clear that the agreement was not a modification and that the loan would not be modified unless the borrowers met all of their payment obligations. Miller, 2015 N.J. Super. LEXIS 35, at *4-5, *6. The borrowers brought various claims against the lender, including breach of contract, after the lender refused to offer them a permanent modification. Id. at *1. The court in Miller adopted and expanded the reasoning set forth in Arias, finding that, even though HAMP

20 New Jersey Banker

did not provide the borrowers with a private right of action, they were not precluded from “pursuing state law claims arising from the breach of an underlying” trial period plan agreement. Id. at *2. The Court specifically held that “borrowers should not be denied the opportunity to assert claims alleging a lender failed to comply with its stated obligations under the TPP.” Id. at *12.

Nonetheless, stating that “the specific terms of the TPP govern the parties’ agreement,” the Appellate Division affirmed the trial court’s dismissal of these claims because the summary judgment record demonstrated that the borrowers did not present proof of timely payment. Id. at *12-13, *14-15.

In Arias, the opinion upon which Miller relies, the Appellate Division found that the terms of the Trial Period Plan Agreement (“TPPA”) put the borrowers on notice that the agreement was not itself a loan modification and that “failure to strictly comply with the terms of the TPP would result in denial of a loan modification.”

Arias, 2015 N.J. Super. LEXIS 13, at *7. The facts in Arias were as follows: Borrowers Leonardo Arias and his wife, Ruth M. Padilla, executed a mortgage to secure a loan Arias obtained to purchase real property. When the borrowers were unable to make their regular mortgage payments, Bank of America (BOA), the servicer of the loan, offered them a three-month trial loan modification under HAMP, which the borrowers accepted.

The terms of the TPPA were expressly conditioned upon, among other things, the borrowers making their three monthly trial payments in full and on time. Id. at *7-8. As a result of the borrowers’ failure to make timely payments, BOA refused to provide them with a loan modification. Consequently, the borrowers brought claims against BOA for breach of contract and breach of the duty of good faith and fair dealing, arguing that the TPPA was a binding contract to modify the loan.

Contrary to the borrowers’ arguments, the trial court “concluded that the TPP Agreement was not a binding contract to modify the loan” and granted summary judgment in favor of BOA on the borrowers’ contract and quasi-contract claims. Id. at *2. The Appellate Division affirmed the trial court’s decision, but for slightly different reasons. Relying on the plain language of the TPPA, the Appellate Division found that the borrowers’ failure to comply with the terms of the agreement constituted a breach that justified BOA’s decision to not provide the borrowers with a loan modification.

Importantly, the Appellate Division began its analysis by reviewing the text of the TPPA. In particular, the court stressed that the terms of the TPPA placed the borrowers on notice that the agreement was not itself a loan modification. The TPPA stated in multiple sections, including the first sentence, that the borrowers would be provided with a modification if they were “in compliance with this Trial Period Plan … and [their financial] representations

Summer 2015

… continue to be true in all material respects.” Id. at *6; see also, e.g., id. at *8 (“I further understand and agree that the servicer will not be obligated or bound to make any modification of the loan documents if I fail to meet any one of the requirements under this plan.”). The court concluded that the agreement was “‘a unilateral offer,’ pursuant to which the bank promised to give plaintiffs a loan modification, if and only if plaintiffs complied fully and timely with their obligations under the TPP.” Id. at *8 (emphasis added) (citing Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547, 652 (7th Cir. 2012) and Young v. Wells Fargo, Bank, N.A., 717 F.3d 224, 234 (1st Cir. 2013)).

The court then went on to find that the summary judgment record clearly demonstrated that the borrowers did not comply with the TPPA’s payment schedule and, therefore, they were not entitled to a further modification of their loan. Id. at *9.

In reaching its conclusion, the court in Arias paved the way for the Miller decision by analyzing Wigod, a Seventh Circuit case, in which the court held that, while HAMP provides no private cause of action, a borrower could potentially assert a breach of contract claim against a lender based on the lender’s failure to honor promises made in a HAMP trial period plan agreement.

Id. at *3-4 (citing Wigod, 673 F.3d 547). Wigod determined that a reasonable person interpreting the trial period plan agreement in that case would consider the agreement “a definite offer to

provide a permanent modification that she could accept so long as she satisfied the conditions.” Wigod, 673 F.3d at 562.

These decisions confirm that borrowers are required to fully comply with the terms of any trial modification in order to reap the benefit of a further modification from their lenders. These cases also stand for the proposition that lenders must uphold their end of the agreement when borrowers have fully complied with its terms. This is consistent with the suggestion in Arias that a lender or servicer may not offer a trial period plan agreement that binds a borrower to make trial payments while allowing the lender or servicer to offer them nothing in return, as such actions may violate the New Jersey Consumer Fraud Act. Lenders and servicers are cautioned to be careful with the wording of any trial modification offers and clearly state in those offers that full and complete compliance is a prerequisite for a further modification.

■ Joy Harmon Sperling is a partner at Day Pitney LLP, where she is a member of the firm's Commercial Litigation department and chair of its Creditors’ Rights and Real Estate Litigation business unit. Christina A. Parlapiano is counsel in Day Pitney’s Commercial Litigation department.

Nancy Todaro is an associate at Day Pitney and a 2011 graduate of Villanova University School of Law. For more information, contact Day Pitney at (973) 966-6300.

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Summer 2015 New Jersey Banker

21

New Associate Members

as of May 2015

Chatham Financial

Ostrowitz & Ostrowitz, Esqs.

235 Whitehorse Lane Kennett Square, PA 19348 Contact: Joedy Tran, Director Phone: 610-925-3120 Email: jtran@chathamfinancial.com

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Investment Professionals, Inc. 16414 San Pedro Ave., Suite 150 San Antonio, TX 78232 Contact: Pam Wise, Business Development Officer Phone: (210) 582-2787 Email: pam.wise@invpro.com

National Networking & Commerce Solutions, DBA Mindcore 150 River Road, Suite C-3 Montville, NJ 07045 Contact: Matthew Rosenthal, President Phone: (973) 664-9500 Email: matt.rosenthal@mind-core.com

NYMBUS 1000 5th St. Miami Beach, FL 33139 Contact: Steve Lucas, VP of Sales Phone: (888) 840-0089 Email: slucas@nymbus.com

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PrecisionLender 1255 Crescent Green, Suite 200 Cary, NC 27518 Contact: Brandi Haymore, Director of Brand Awareness Phone: (980) 297-7118 Email: bhaymore@precisionlender.com

Saul Ewing LLP 650 College Road East, Suite 4000 Princeton, NJ 08540 Contact: Ryan L. DiClemente, Partner Phone: (609) 452-5057 Email: rdiclemente@saul.com

Thomson Reuters 3 Times Square New York, NY 10036 Contact: Clayton Slivka, Account Director Phone: (646) 223-7280 Email: clayton.slivka@thomsonreuters.com

O’Connor Davies, LLP 20 Commerce Drive, Suite 301 Cranford, NJ 07016 Contact: Joseph Zarkowski, Partner Phone: 908-967-6815 Email: jzarkowski@odpkf.com

22 New Jersey Banker

Summer 2015

THE POWER OF AN ADVANCE

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FHLBNY advances are a reliable liquidity source for our member lenders to finance home mortgage, small business, and economic development activities.

Investors Bank and The Provident Bank used FHLBNY advances to help provide permanent financing to New Community Corporation (NCC) for its Workforce Development Center, from which NCC offers employment programs, training courses, financial aid, and job placement assistance to New Jersey’s underprivileged residents. The advances helped stabilize the economic future of the Center so NCC can continue to improve the quality of life of inner-city residents.

Contact us to see how the power of an advance can improve your community.

101 Park Avenue, New York, NY 10178 | (212) 441- 6700 | www.fhlbny.com Note: The Federal Home Loan Bank of New York uses the word “advances” to refer to the loans it provides to our member lenders.

Summer 2015 New Jersey Banker

23

Feature

When and How to Amend IRA Documents

By Lisa Walker

I

t’s become rare that a year goes by without new laws or other IRS guidance that in some way, directly or indirectly, affects IRAs. Lately, IRAs and retirement savings in general have been a target for change in legislative bills and government initiatives. Some recent proposals give taxpayers more opportunity and incentive to save for retirement, while others remove some of the benefits associated with retirement saving arrangements.

Keeping up with these changes and understanding when IRA document amendments are needed is not always easy.

Nevertheless, financial organizations are responsible for amending IRA documents when needed. They must decide which documents to amend, when to amend, and how to communicate these amendments to Lisa Walker their clients.

WHEN TO AMEND Of the three documents required for IRAs, only two are subject to amendments: the plan agreement and the disclosure statement. A financial disclosure must be provided when an IRA is first established, but it is not required to ever be amended.

An amendment often is necessary when a major tax law affecting IRAs is enacted. This can affect both plan agreements and disclosure statements or only may affect the language in the disclosure statement.

For major tax laws, the IRS often releases guidance, usually in the form of a revenue procedure, specifying that the amendment is required and when the amendment must be completed. If the IRS does not release guidance but changes to the IRA rules affect a financial organization’s documents, an amendment to the disclosure statement often is required.

New legislation and rule changes are not the only reasons for amending IRAs. Many financial organization acquisitions and mergers require some form of plan document amendment. Or if a financial organization simply decides to change to a different IRA document, it should review both the IRA documents it currently uses and the new documents. In some cases, the financial organization may simply start using the new forms. In others, the financial organization may need to notify IRA owners of specific changes in the IRA documents.

PLAN AGREEMENT Procedures for amending IRA plan agreements for law changes differ depending upon whether an IRS model form or prototype

24 New Jersey Banker

plan agreement is being used. IRS model plan agreements (e.g., Form 5305 series documents) need only be amended after the IRS releases a new version of these forms and specifically requires amendments.

Sometimes the IRS issues new forms but does not require amendments. If the IRS requires amendments, it provides a specific deadline to amend.

Prototype plan agreements generally must be amended after each major law change that affects IRAs. IR annuity endorsements generally require amending as indicated for IRA prototype plans. Prototype documents primarily are based on sample language provided by the IRS through its Listing of Required Modifications (LRMs). The IRS periodically updates the LRMs, often accompanied with amendment guidance, for major law changes or after a series of changes affecting IRAs has occurred.

Treasury regulations require plan agreement amendments to be completed no later than 30 days after the date the plan agreement amendment is adopted or 30 days after the date the amendment becomes effective, whichever is later.

DISCLOSURE STATEMENT A financial organization is required to provide a current disclosure statement reflecting the current rules to individuals opening IRAs. Disclosure statements cannot contain language that creates false or misleading information.

Further, disclosure statement amendments are required when a plan agreement is amended if the changes to the plan agreement materially affect information in the disclosure statement. If the IRS requires that plan agreements be amended, disclosure statements generally must be amended at the same time.

Unless the IRS provides guidance for a specific amendment event, disclosure statement amendments must be completed 30 days after the later of the date the plan agreement amendment is adopted or the date it becomes effective. Regulations are not clear on when to amend disclosure statements for law changes if a plan agreement amendment is not required. In this case, a financial organization should provide disclosure statement amendments as soon as administratively feasible after the changes become effective.

Summer 2015

HOW TO AMEND Most financial organizations can obtain the amendments from their forms provider. Financial organizations that draft their own amendments should consult with their attorneys for recommendations. Once a financial organization has the amendments, it should follow these procedures.

1) Mail each IRA owner a copy to the individual’s last known address. If any amendments are undeliverable and are returned, the financial organization should keep the undelivered amendment in the IRA owner’s file. Note that the amendment can be included with other materials to save postage. It also is a good idea to enclose a cover letter explaining the amendment.

2) Document that the amendment was sent by placing a copy in each IRA owner’s file or creating a master file. A master file should contain a copy of each amendment, a dated cover letter, and a list of mailing recipients.

Amendments for tax law changes often do not require a signature or consent from the IRA owner. But depending on the type of document, amendment, and state laws, amendments may require the IRA owner’s consent (i.e., a fully signed

amendment by both parties). Financial organizations should consult with their legal counsel for direction.

FAILURE TO AMEND If a financial organization fails to amend when required or does not amend timely, it faces potential penalties. A financial organization that does not provide a required plan agreement and disclosure statement amendment to an IRA owner could be penalized as much as $100 per IRA ($50 per document). In addition, a financial organization that does not amend puts itself and its clients at risk for errors and negative tax consequences because of noncompliant documents and outdated information.

This article originally appeared in Ascensus’ newsletter, The Link, in April 2015.

■ Lisa Walker is a copy writer at Ascensus who writes and reviews articles about various topics related to IRAs, ESAs and HSAs. She has earned the Certified IRA Services Professional (CISP) designation from the Institute of Certified Bankers and holds a bachelor’s degree in English. For more information on how Ascensus can guide your financial institution through the amendment process, please contact Heather Hoskins at 800-346-3860 or heather.hoskins@ascensus.com.

TODAY I PLUG INTO BUSINESS INTELLIGENCE. It’s time big data informs strategic, profitable decisions. csiweb.com/plugin BUSINESS INTELLIGENCE • CUSTOMER VIEW Summer 2015 New Jersey Banker

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NJBankers Events

New Jersey Bankers 111th Annual Conference

COMMUNITY SERVICE AWARDS Congratulations to the following members who received special recognition at the Annual Conference: Less than $300 Million in Deposits Millington Savings Bank

Thomas Shara, president and CEO of Lakeland Bank, moderated a “Regulatory Hot Topics” panel. Panelists included Wilma Sabado, Federal Reserve Bank of New York; Ed Dowling, OCC; Andrew Rizkalla, CFPB; William Wisser, Federal Reserve Bank of Philadelphia; and John P. Conneely, FDIC.

Chairman Gerald L. Reeves congratulated the newly elected board members (pictured, from left): Peter Michelotti, Community Bank of Bergen County; Anthony Labozzetta, Sussex Bank; David Hemple, Century Savings Bank; and Kathleen Stone, Susquehanna Bank.

Nearly 500 members, associates and guests attended the NJBankers 111th Annual Conference at the Omni Hotel in Nashville, Tennessee. By all accounts, it was another successful event with an overwhelming attendance and a line-up of dynamic speakers.

Many thanks to Gerald L. Reeves, president and CEO, Sturdy Savings Bank, for his continued service as NJBankers chairman for 2015-2016.

APPOINTMENTS TO THE BOARD OF DIRECTORS, EXECUTIVE COMMITTEE AND CHARITABLE FOUNDATION The following members have been appointed to continue the association’s successes.

Chairman Gerald Reeves congratulated those recently elected and reelected to the board of directors: Anthony Labozzetta, Sussex Bank; Peter Michelotti, Community Bank of Bergen County; Edward Dietzler, Bank of Princeton; Peter Schoberl, Community First Bank; and Kathleen Stone, Susquehanna Bank.

The board appointed two members to the board of directors to serve a two-year term: David Hemple, president and CEO, Century Savings Bank, to fill a Class B vacancy; and Louis Anthony (Tony) Costantino Jr., managing director, industry manager, J.P. Morgan, to fill an atlarge position.

Additionally, the board appointed the following members to serve on the Executive Committee for the upcoming fiscal year: Craig Montanaro,

26 New Jersey Banker

Kearny Bank; John Fitzgerald, Magyar Bank; and Tony Costentino Jr., J.P. Morgan.

The board also appointed Samuel Damiano, Haven Savings Bank; James Silkensen, Somerset Savings Bank; and John McWeeney Jr. and James Meredith, NJBankers, to serve as trustees of the New Jersey Bankers Charitable Foundation.

FORREY-GALLMAN AWARD On behalf of the NJBankers board of directors and membership, President and CEO John E. McWeeney Jr. presented the 2015 ForreyGallman Award to Mortimer O’Shea, director of Haven Savings Bank. O'Shea had previously served on the New Jersey Bankers Association's board of directors. The award is bestowed upon members that have demonstrated long-term outstanding service to the New Jersey banking industry.

It is named for Robert C. Forrey and Emil A. Gallman, long-time chief executive officers of the New Jersey Bankers Association and the New Jersey Savings League, respectively, who inspired association members with their leadership in assuring that members were well represented in the areas of government relations, public relations and educational opportunities.

Prior to joining Haven’s board of directors, O’Shea served as the president and CEO of Hilltop Community Bank, which was acquired by Haven Savings in a merger that added Hilltop’s branches in Berkeley Heights, Madison and Summit for a total of nine locations in northern New Jersey with total assets of more than $860 million.

In his career, O’Shea has also held executive leadership positions at Ramapo Financial Corp., Ramapo Bank, The Summit Bancorporation, Somerset Trust Company (a wholly owned subsidiary of Summit from June 1990 to October 1993) and The Trust Company of Princeton, as well as management positions at First Fidelity Bancorporation and Irving Trust Corporation. ■

Between $300 Million and $500 Million in Deposits Sturdy Savings Bank Between $500 Million and $999 Million in Deposits Two River Community Bank Between $1 Billion and $2 Billion in Deposits Oritani Bank Between $2 Billion and $5 Billion in Deposits Kearny Bank $5 Billion-Plus in Deposits Garden State Community Bank National Banks TD Bank The judges were also asked to choose “silver” participants, since it was difficult to choose just one entry per category.

Those receiving silver recognition include: Less than $300 Million in Deposits City National Bank Between $300 Million and $500 Million in Deposits Hopewell Valley Community Bank Between $500 Million and $999 Million in Deposits 1st Constitution Bank Between $1 Billion and $2 Billion in Deposits Boiling Springs Savings Bank Between $2 Billion and $5 Billion in Deposits Peapack-Gladstone Bank $5 Billion-Plus in Deposits Investors Bank

Summer 2015

D. Nicholis Miceli, TD Bank; Fay Hamid, Garden State Community Bank; Craig Montanaro, Kearny Bank; Kevin Lynch, Oritani Bank; William Moss, Two River Community Bank; and James Fisher, Sturdy Savings Bank, accepted awards on behalf of their banks from NJBankers President/CEO John E. McWeeney Jr., acknowledging their outstanding community service during 2014. (Not pictured: Millington Savings Bank.)

John E. McWeeney Jr., president and CEO of NJBankers (right) presented the Forrey-Gallman Award to Mortimer O’Shea, director, Haven Savings Bank, at the 111th Annual Conference.

Attendees of the conference visited with service providers in the bustling Exhibit Hall to learn about products and services which benefit member banks.

Gerald L. Reeves, NJBankers chairman and president and CEO, Sturdy Savings Bank, emceed the program.

Thomas J. Curry, 30th Comptroller of the Currency, discussed current issues affecting community banks.

During the Second General Session, Michael Cohn, director of WolfPAC Solutions Group and Wolf & Company, kicked off the session with “Risk Assessments, Risk Profiling and Risk Management.”

Presenting “A View From Washington” was John Ikard, chairman, American Bankers Association, and president and CEO, FirstBank Holding Company, Lakewood, CO.

Nearly 500 members attended the Annual Conference.

Donald Musso, president and CEO, FinPro Inc., Jeffrey Otteau, president of Otteau Valuation presented “A Glimpse into the Future.”

Group, presented a housing market update.

Service Awards were presented by John E. McWeeney Jr. to Peter Kenny, First Bank; Jill Schafhauser, Roselle Savings Bank; Robert E. Stillwell, Boiling Springs Savings Bank; and Alan Woodruff, Century Savings Bank for their years of service to the banking industry.

Keynote speaker Jim Abbott, former Major League Baseball Player presented “ADAPT: Overcoming Adversity” while capturing attendees with his skills and accomplishments. Abbott famously threw a no-hitter for the New York Yankees vs. Cleveland on Sept. 4, 1993.

Summer 2015 New Jersey Banker

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Bank Notes

Megan E. Lore

John T. Harrison

Howard N. Hall

Joanne O’Donnell

Michael T. Doyle

Jill Hettinger

Lisa Chalkan

Patrick R. Brocker

Jack Murphy

Melissa Scofield

CENTURY SAVINGS BANK Century Savings Bank announced the promotion of Megan E. Lore to the position of vice president of mortgage and consumer lending.

In her role as vice president, Lore will be responsible for growing the bank’s mortgage and consumer loan portfolio and managing operations of the Mortgage and Consumer Loan Department.

THE FEDERAL RESERVE BANK OF PHILADELPHIA The Federal Reserve Bank of Philadelphia announced the promotions of Michael T. Doyle to vice president in Treasury payments and Jill Hettinger to budget officer in the enterprise risk management department. Doyle, who joined the bank in 1988, has led the team supporting the treasury check information system. More recently, Doyle has directed the development of the post-payment system, a large, multiyear application development effort for the Treasury. Since joining the bank in 1999, Hettinger has held positions of increasing responsibility in the financial management services and enterprise risk management departments. She has responsibility for all aspects of the bank’s financial and capital budget, forecasts, and financial performance monitoring.

INVESTORS BANK Investors Bank has selected experienced banker John T. Harrison as its senior vice president of business lending in southern New Jersey.

Harrison is responsible for growing the bank’s commercial deposits and business loan portfolios by leading the business lending teams in the Spring Lake Heights, Robbinsville, Mount Laurel and Sewell offices.

PEAPACK-GLADSTONE BANK Peapack-Gladstone Bank announced the appointment of Lisa Chalkan to the position of senior vice president, chief credit officer and Patrick R. Brocker to senior managing director. Chalkan brings a record of distinguished and exceptional leadership in all aspects of credit administration and underwriting and managing policies and procedures, in a dynamic environment, to Peapack-Gladstone Bank.

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She will direct the bank’s credit professionals and quality assurance teams to efficiently manage the high growth of the bank’s loan originations and implement a robust program to ensure continued high asset quality. Brocker is responsible for establishing the cash flow leveraged finance and asset based lending product capabilities for the bank.

TD BANK TD Bank has promoted Gary C. Tognoni to senior vice president, head stress testing execution in Treasury and balance sheet management. Based in Cherry Hill, he will lead the bank’s Treasury stress testing analytics group responsible for developing and sustaining a robust stress testing process, including governance and controls oversight, cycle execution, and model development of deposit and loan balance models.

UNITED ROOSEVELT SAVINGS BANK United Roosevelt Savings Bank announced that long time President and CEO Chester Mikotacyzk retired effective April 1, 2015.

Mikotacyzk was with United Roosevelt for over 40 years, serving as president and CEO since 1992. Mikotacyzk served as a director of Bankers Cooperative Group, Inc. and was a member of the New Jersey Savings League Board of Governors. In addition, he served on various committees on the New Jersey Bankers Association. Succeeding Mikotacyzk is Kenneth R. Totten, who joined the bank in February. Totten served as chief lending officer at Metuchen Savings Bank from 2004 to recently. Prior to that, he held a similar position at RSI Bank. Totten serves as chairman of the NJBankers Lending Committee.

VALLEY NATIONAL BANK Valley National Bank announced the appointment of Jack Murphy as senior vice president and operations manager of the commercial lending department, and Melissa Scofield to executive vice president and chief risk officer. As CRO, her responsibilities include managing a number of independent control functions, including enterprise-wide risk management, internal audit, AML compliance, loan review, regulatory compliance and information security. ■

Summer 2015

Bank Shots

Amboy Bank President George E. Scharpf welcomed the growing group of children at Bring Your Daughters and Sons to Work Day. The children of the employees in the administration building were treated to breakfast and a day of activities that focused on learning about banking and saving money.

Girl Scout Troop 640 received a behind-the-scenes tour of the Neptune City branch of Kearny Bank. The tour included stops at the money-counting and currency-counting machines, the bank vault, the “other side” of the ATM, and the drive-thru cameras, which play a crucial role in branch security. The children also learned how the bank operates, along with the duties of each member of the banking staff. Pictured, from left: Patricia Crammer, teller, Neptune City office; members of GSJS Troop 640; and Jennifer Sottilare, assistant vice president and Neptune City branch manager.

Ten teams comprised of Provident Bank employees recently participated in the Big Brothers Big Sisters of Monmouth/Middlesex counties’ “Bowl for Kids Sake” bowling event. Employee efforts to raise over $9,400 went toward one-on-one mentoring programs. Pictured, clockwise from left: Christine Cartwright, corporate donations administrator; Rob Capozzoli, marketing director; Anthony Ramella, cash management sales officer; Matt Flannery, senior SBA specialist; Taylor Madaffari, communications coordinator; and Christine Hamilton, digital media coordinator.

Employees, family and friends from Newfield National Bank sponsored a water table and walk team to raise funds for March of Dimes. The event was held at Rowan University. The team raised close to $4,000 to help the March of Dimes fund research, education, vaccines and breakthroughs. Pictured, from left: (front row) Fallon Milligan, Michele Vallone, Veronica Meehan, Justine Meehan, Cheryl Jablow, (middle row) Donata Dalesandro, Doug Johnson, Brenda Johnson, Kim Eisinger, Joanne Barsuglia, Danielle Barsuglia, Regina Carione, Joanne Ziemnicki, (back row) Steve Corcoran, Joe Migoley, Tim Anderson, Chuck Grova, Brian W. Jones, Shannon Dougherty, Sara Harris, Larrisa Contarino, Kevin Allen, Valerie Schuh, D.J. Cassidy, and Christiann Ramdhanie. Not pictured: Natalie Szwed, Gabbi Szwed and Rae Eidam.

Summer 2015 New Jersey Banker

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Bank Shots

Executives from Millington Savings Bank helped honor this year’s Teachers Who Make Magic awards, sponsored by MAGIC 98.3 radio and Greater Media NJ. Twenty-three educators throughout central New Jersey were recognized at the event, which honors teachers for their dedication and passion in and out of the classroom. Pictured, from left: Robert G. Russell Jr., senior vice president and COO, MSB; Gary T. Jolliffe, director, MSB; Jennifer Giordano, director of instruction, Bedminster School; award recipient Thomas Notte, Bedminster School; Michael A. Shriner, president and CEO, MSB; John J. Bailey Sr., senior vice president and CLO, MSB; and Tony Odachowski, client development director, Greater Media NJ. Spencer Savings Bank helped lead the charge at the 9th Annual New York Giants Snow Bowl at MetLife Stadium. The “Spencer Blue Diamonds” team was comprised of 19 members who competed in the co-ed division of the flag football event. The event raises funds for the athletes of Special Olympics New Jersey. Spencer Savings Bank took second place overall in this year’s fundraiser by amassing $17,073. In total, more than $500,000 was raised at the event, all of which helps the organization to provide free year-round training and competition opportunities in 24 sports, including flag football, for the more than 25,000 New Jersey athletes.

Century Savings Bank employees participated in the 12th Annual National Wear Red Day Campaign, in support of the American Heart Association’s Go Red for Women movement. In support of the movement, Century kicked off a month-long fundraising effort, by collecting donations, at all branch locations, beginning with National Wear Red Day. This year, Century has raised a total of $1,500 in support of the movement.

Valley National Bank employees participated in World Autism Awareness Day by wearing blue as part of the Light It Up Blue Campaign.

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Highlands State Bank donated $500 to the American Heart Association as a result of the bank’s third annual National Wear Red Day campaign. Employees and customers at the bank’s Vernon, Sparta, Totowa and Denville locations donated generously to the campaign, with Highlands State Bank matching those donations. Kristen A. Piccolo, regional director for the American Heart Association/American Stroke Association was presented with a check.

Summer 2015

Peapack-Gladstone Bank volunteers joined the Community Soup Kitchen in making a difference for those in need.

Regal Bank was a proud sponsor of the 6th Annual Running 4 Answers 5K race and two-mile fun run in Roseland. Regal Bank’s $1,000 donation will benefit the Cure Alzheimer’s Fund. Pictured, from left: Marie Hood, Regal Bank customer service representative; Carolyn Mastrangelo and Barbara Geiger, co-directors for Running 4 Answers; and Michele Tolli, assistant branch manager, Roseland branch.

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Plymouth Rock Assurance is a marketing name used by a group of separate companies that write and manage property and casualty insurance in multiple states. Insurance in New Jersey is offered by Plymouth Rock Management Company of New Jersey on Behalf of Palisades Insurance Company, 331 Newman Springs Rd, Suite 304, Red Bank, New Jersey 07701, and its affiliates. Each company is financially responsible only for its own insurance products. Certain restrictions and limitations apply. For a full description of the programs, features, and coverages, please visit PlymouthRockNJ.com.

Group discounts apply to policies written in High Point Property and Casualty Insurance Company or Palisades Insurance Company. May not be combined with any other group discounts. ©2015 Plymouth Rock Management Company of New Jersey. All rights reserved. 7994/022015

Summer 2015 New Jersey Banker

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SCoTT BARAnoWSki, CiA DiReCToR – inTeRnAl AuDiT SeRViCeS

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