NEW
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S P RIN G 2 0 1 3
B A N K E R
BANK SECURITY A Comprehensive Look at What Member Banks are Doing to Protect Customers – and Themselves
Compliance in Banking | Health Care Reform in 2013 | Branch Transformation Strategies ENDORSED BY THE NEW JERSEY BANKERS ASSOCIATION
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NJBankers Board of Directors John W. Alexander Chairman/President/Chief Executive Officer Northfield Bank
James A. Hughes * President/Chief Executive Officer Unity Bank
Gerald H. Lipkin Chairman/President/Chief Executive Officer Valley National Bank
Mortimer J. O’Shea President/Chief Executive Officer Hilltop Community Bank
Paul E. Fitzgerald President/Chief Executive Officer First Bank
Thomas J. Kemly President/Chief Executive Officer Columbia Bank
Christopher Martin * Chairman/President/Chief Executive Officer The Provident Bank
Robert Rey President/Chief Executive Officer NVE Bank
Thomas X. Geisel President/Chief Executive Officer Sun National Bank
Peter Kenny President/Chief Executive Officer Heritage Community Bank
D. Nicholas Miceli Market President TD Bank, N.A.
Michael Schutzer President/Chief Executive Officer Harmony Bank
James P. Genoy, Jr. President/Chief Executive Officer/Treasurer Monroe Savings Bank, SLA
Frank A. Kissel * Chairman Peapack-Gladstone Bank
Angela Snyder Chief Executive Officer/Vice Chairman Fulton Bank of New Jersey
Thomas J. Holt * Senior Vice President Bank of America
Anthony Labozzetta President/Chief Executive Officer SussexBank
Michael Nardo Executive Vice President/NE U.S. Market Executive – Corporate Banking PNC Bank, N.A.
NJBankers Officers
NJBankers Staff 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 Michael P. Affuso, Esq. Senior Vice President and Director of Government Relations ext. 628 maffuso@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 Jenn Zorn Vice President, Director of Education and Business Development ext. 611 jzorn@njbankers.com
Cris Goncalves Manager of Education ext. 630 cgoncalves@njbankers.com Lauren Barraza Executive Assistant ext. 618 lbarraza@njbankers.com Allison Montellione Assistant to the Director of Communications ext. 629 amontellione@njbankers.com Cynthia M. Zaccaro Assistant to the Director of Education and Business Development ext. 632 czaccaro@njbankers.com Erin Suckiel Administrative Assistant/ Receptionist ext. 600 esuckiel@njbankers.com
Kevin Cummings * Chairman President/Chief Executive Officer Investors Bank
Gerald L. Reeves * Second Vice Chairman President/Chief Executive Officer Sturdy Savings Bank
Stewart E. McClure, Jr. * First Vice Chairman President/Chief Executive Officer Somerset Hills Bank
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
Emily T. DeMasi
*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
Claire Anello Office Manager, Database and Website Manager ext. 631 canello@njbankers.com
Contributing Editor
Robert E. Stillwell President/Chief Executive Officer Boiling Springs Savings Bank
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.
Spring 2013 New Jersey Banker
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Table of Contents
NEW
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Departments
6 Chairman’s Platform Recovery Continues, and a Chairman Says Goodbye 8 From the President's Office NJBankers Broadens Its Reach 10 15 34 36 38
Politics & Policy A Coming Together
Features
New Associate Members Bank Notes Bank Shots Upcoming Events
12 Directors' Corner Audit Committee Priorities for 2013 14 Behind the Teller Line Two River Community Bank 16
Meet Our Select Service Providers Business as Usual No Longer an Option
17
Purchasing Assistant System Guarantees Increase in Net Profits
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20 Cover Story: Bank Security A Comprehensive Look at What Member Banks are Doing to Protect Customers – and Themselves
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Feature Network Security: The What and How of Patching
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New Jersey Economic Leadership Forum Features Impressive Speakers and Turnout
26
Feature Compliance Risk in Banking
28 Annual Conference The Future of Community Banking 30 Feature Branch Transformation Strategies for 2023 32 Feature Managing the Security Equation 33 Feature Health Care Reform in 2013
Spring 2013
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Chairman’s Platform
Recovery Continues, and a Chairman Says Goodbye By Kevin Cummings
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he rebuilding of New Jersey in the aftermath of Superstorm Sandy is a key priority for our state, and our industry is taking a leadership role in the restoration of homes, businesses and communities. As chairman of NJBankers, I’m proud of the many community banks that have stepped up and provided resources to both statewide and local organizations that are helping rebuild devastated areas. Community banks are also at the forefront of efforts to support our state’s second priority, which is getting Kevin Cummings more people back Chairman to work. We conNJBankers President/Chief Executive Officer tinue to experience Investors Bank a higher unemployment rate than other parts of our region and the nation. While the number of people without jobs dipped slightly at the end of December, the unemployment rate still stood at 9.6 percent, which is uncomfortably above the nationwide average of 7.7 percent. While we are beginning to add jobs, I expect that the statewide unemployment rate may only fall by a small amount in the coming months. During my term as chairman, my conviction has grown that, as bankers, we need to work closely together if we are to take significant strides in attempting to address issues as large as persistent unemployment and rebuilding storm-damaged areas of the state. We have accomplished much following Sandy. Banks across our state are implementing programs that are making a positive difference in our communities. Boiling Springs Savings Bank donated over $100,000 to Sandy relief; and the funds were provided to area food banks, which had been depleted by Sandy victims; local relief organizations, and to the Hurricane Sandy NJ Relief Fund. Columbia Bank issued community grants
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to assist families with the purchase of replacement appliances, and launched a disaster loan program to provide low-rate home equity financing. Columbia also collected hundreds of bags of non-perishable food for five food banks, and raised $22,000 to aid nonprofits with their Sandy recovery efforts. The foundations of both Provident Bank and OceanFirst Bank have committed sizeable dollars. OceanFirst Foundation, the foundation established in 1996 by OceanFirst Bank, quickly responded to the needs of their Jersey Shore neighbors and has distributed over $300,000 of the $500,000 pledged for a relief and recovery grant program to assist the efforts of nonprofit organizations helping people impacted by Superstorm Sandy. Provident Bank funded grants to assist the small business community and local relief efforts. Recently, Investors provided a grant to the UCEDC in support of a program that provides low interest loans to help small firms recover from the storm. These are just some of the many examples of how community banks are making New Jersey the “State of Resilience.” Our second priority – creating more jobs – is both a short-term and long-term pursuit. During his first years in office, Gov. Chris Christie’s administration realized notable progress in making New Jersey a more business-friendly state. The governor initiated Grow NJ, which includes tax incentives that are available to firms that create new jobs or retain existing ones. But that is just a beginning. New Jersey businesses and the state government need to continue to work hand in hand to reduce unemployment and build the state’s job base. As community bankers, we must support and nurture New Jersey’s excellent education resources. From pre-schools to high schools and universities, these learning centers are teaching, training and inspiring the next generation of skilled workers. As business leaders, our aim should be to provide capital and
resources to New Jersey’s public and private schools so that they can develop the current and next generation of dynamic, young professionals who will want to live, work, and raise families in our state. In closing, I want to recognize the notable legislative success achieved by NJBankers. A bill that covers the foreclosure of vacant and abandoned property was approved by both legislative houses and was signed into law by Gov. Christie. The new law ends the old timetable of 900 days, reducing the foreclosure period to 75 days for abandoned and blighted properties, many of which are in our urban centers. Also as an organization, we have worked to reinforce and rebuild our industry’s reputation. This year, NJBankers President John McWeeney and I met with the editorial boards of New Jersey’s news media where we listened to their views about community banks, answered their questions, and outlined the many valuable contributions made by us to the areas we serve. As I prepare to pass the gavel to Stewart E. McClure, Jr., president and CEO of Somerset Hills Bank, I know that he will continue to build upon our efforts of outreach to the news and community organizations that shape public opinion. Before stepping down, I want to thank my colleagues for selecting me to serve as their chairman, an experience that helped broaden my view of the many strengths of our banking business and its leaders in New Jersey. Thank you and I look forward to seeing you in Palm Beach, Florida for the NJBankers 109th Annual Conference. This year’s theme is The Future of Community Banking; a future that I believe will be a bright one for both our industry and our state. ■ Kevin Cummings is chairman of the New Jersey Bankers Association and president and chief executive officer of Investors Bank. He can be reached at kcummings@myinvestorsbank.com.
Spring 2013
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From the President’s Office
NJBankers Broadens Its Reach By John E. McWeeney, Jr.
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o those of us who work in the banking industry, the positive impact that banks have on the economy is selfapparent, but not all recognize or fully appreciate just how integral banks are to economic growth. Part of our mission at NJBankers is to make sure that story gets told, and we started the New Year off with a flurry of activities, all aimed John E. McWeeney, Jr. President/Chief Executive Officer at raising the proNJBankers file of New Jersey’s banks and broadening our reach in the general business community and public sector. On January 10, along with our partners The Warren Group and Rutgers University, we hosted our 2nd Annual New Jersey Economic Leadership Forum (see photos, page 24). By all measures, this year’s forum was a rousing success. We had over 550 attendees; media coverage that included all of the local media, as well as The Wall Street Journal and a live feed by Bloomberg; and a program that was filled with high profile speakers and timely and relevant topics. Charles Plosser, president of the Federal Reserve Bank of Philadelphia, gave an economic update, Ralph LaRossa, president and COO of PSE&G, talked about the impact of Superstorm Sandy, and David Walker, former U.S. Comptroller General and founder of the “Comeback America Initiative,” discussed America’s fiscal challenges. Our breakout sessions were equally informative, and delved into the areas of health care, real estate, higher education and the state of New Jersey’s economic development programs. This was not your standard banking conference – the focus was much broader, and many of our banks that attended recognized that, inviting directors,
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customers and referral sources to attend. Our vision in creating this event two years ago was to raise NJBankers’ profile in the general business community by partnering with a major institution like Rutgers and putting on a first-class economic forum that draws people from all of the economy’s different sectors. We’re well on our way toward achieving that goal, and are already working on next year’s forum, although we’ve set a pretty high bar for ourselves. In conjunction with the Economic Forum, for the second consecutive year, NJBankers conducted an economic survey of our member banks. Approximately half of our 118 member bank CEOs responded to the survey with their thoughts about issues as far ranging as the state of the economy, interest rates, loan demand, the elections and the impact of Superstorm Sandy. The results were shared with the public through a press release and generated good interest from the local media. Our premise is, who would have a better handle on the local economy than bankers who deal with consumers and businesses every day? That premise is being validated by the level of interest our survey is generating. We’ll continue to strengthen the survey going forward and perhaps even find a well-known partner to raise our profile even further. Earlier this year, I was honored to be invited to serve on the board of directors of the New Jersey Chamber of Commerce. I jumped at the opportunity to serve on the board of one of the state’s largest business organizations that is filled with the leaders of business and industry in New Jersey. It presented a wonderful opportunity to yet again represent New Jersey’s banks and tell our story to leaders outside of the banking industry. During my second board meeting, I had the opportunity to tell the chamber’s board about New Jersey’s growing foreclosure problem and seek and obtain their support for a vital piece of legislation that was signed by Gov. Chris Christie in
December. In late January, Mike Affuso and I attended the chamber’s annual train ride to Washington and congressional dinner in our nation’s capital. We networked with business leaders, state legislators and members of our congressional delegation, all the while talking about the vital role that New Jersey banks play in our economy and our communities. One of the other tools we use to tell banking’s story is to conduct editorial board meetings with the major news outlets across the state. Over the past few years we’ve met with virtually every news outlet in New Jersey. We always utilize a similar format: We invite bankers from the local market to join us and give their perspective on the local economy, as well as banking issues. Our meetings usually lead to a story, which helps get our message out to the public. In early February, we held our first editorial board meeting of the new year with the Morris Daily Record. Stew McClure, president and CEO of Somerset Hills Bank, and Nick Miceli, market president for TD Bank, joined Mike Affuso and me for a meeting with the editor and editorial director. Stew and Nick did a terrific job of giving their perspective on market conditions and the current state of the banking industry. Our banks are an integral part of life here in the Garden State. We saw that firsthand in the immediate aftermath of Superstorm Sandy as bankers went to great lengths to reopen branches and restore basic services. We can all take pride in the acts of charitable giving and volunteerism that our banks have demonstrated over these past few months. Finally, we can look to the future with confidence that New Jersey’s banks will play a vital role in rebuilding New Jersey and fueling economic growth. We at NJBankers are proud to do our part and try to get the word out. ■ John E. McWeeney, Jr., is president and CEO of the New Jersey Bankers Association, and can be reached at jmcweeney@njbankers.com.
Spring 2013
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Politics & Policy
A Coming Together By Michael P. Affuso, Esq.
L
ast October, when Superstorm Sandy struck New Jersey, most everyone was focused on the NFL or another sport and the Presidential election. However, as the lights came back on, there was a palpable change in people’s attitudes and actions. Surveying the damage, President Barack Obama and Gov. Chris Christie struck Michael P. Affuso a chord of nonSenior Vice President/ Director of Government Relations partisan fellowship. NJBankers New Jerseyans and New Jersey bankers followed their lead. From the moment the skies cleared, bankers were working to help their customers
and communities. In Hoboken, where there was heavy flooding and very little means of communication or locomotion, there was a cash crisis. There was literally no way to access cash in the city. Within hours of the waters receding, bankers, working with the mayor’s office, were able move a mobile ATM that was completely self-sufficient into City Hall. In Monmouth County, bankers who had no power were conducting business literally the “old-fashioned way,” with handwritten deposit slips and a handwritten deposit ledger, and a box of cash from a folding table in a parking lot. In its footprint, the largest New Jerseyheadquartered bank opened all of its facilities to the public to stay warm and charge devices.
Many people in areas of northern New Jersey were not affected directly by the rising water, but were affected by long power outages and the first real blast of cold air for the season. These are merely some of the examples of the good work being done for our communities at a time when many of our own employees were faced with many personal challenges. Within hours of the storm clearing New Jersey, most banks were completely up and running. For some branches in affected areas, it took a matter of days. While gas lines formed, teller lines were short. But this was just the beginning. With the short-term cash crunch abated, bankers then began to address systemic and long-term problems created for their customers by the storm.
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First, working with the New Jersey Department of Community Affairs and the New Jersey Department of Banking and Insurance, bankers assured localities that credit facilities would be available for municipalities. These credits would be used not only for the more pressing needs of emergency management, but also for the mundane chore of paying bondholders. New Jersey’s municipalities had not missed a bond payment in nearly a century and, with the assistance of bankers, they did not miss a payment due to Sandy. In addition, NJBankers has partnered with various government agencies to ensure that customers’ specific issues would be resolved expeditiously and that government agencies would be able to gain access to the proper internal channels to resolve larger concerns. NJBankers worked tirelessly to assist many constituent issues raised by elected officials at municipal, county and state governments.
OUR MEMBERS FOCUSED ON THEIR CUSTOMERS Most banks waived fees for a period of time after the storm. This was not only late charges on mortgage payments lost in the mail, but also ATM fees and other bank fees. Bankers also offered low interest loans to customers to either address issues of business interruption or storm damage. These loans were often non-recourse loans with minimal paperwork and sometimes only a credit check. For current loan customers, bankers created forbearance programs and loan modifications. Unfortunately, due to federal regulations and the dreaded TDR classification, bankers were limited in how creative they could be in crafting solutions for current loan customers. For many banks, it was better to make additional credits available, rather than adjust current loans.
OUR MEMBERS FOCUSED ON THEIR COMMUNITIES While one of the largest big box stores in the nation gave $1 million to tri-state area charities, a community bank in Ocean
County made $500,000 in contributions to local charities. Though this may have been the most noticeable gift, this was one of the many charitable donations made by bankers to various charities statewide. Multi-state banks donated millions to the efforts, while local banks in nonaffected areas donated thousands. NJBankers was touched by the generosity of our sister state associations, especially from the states devastated by Hurricane Katrina.
needed a helping hand. He spent the month of November as a volunteer on a demo and construction crew. His employer recognized the higher purpose – business could wait. Again, this is but one example. Bank employees provided countless hours of hard labor and tender support for the victims of this tragedy. As you read this, NJBankers and its members continue the fight to rebuild and recover. With all of our efforts and everyone’s efforts, the Shore and all the affected areas, will revive and will prosper. ■
IT WASN'T JUST MONEY Bankers and their families donated their time, too. In Belmar, a person affiliated with a large national bank worked not on his normal routine for his clients, but worked tirelessly for people in his community who
Michael Affuso, Esq., is senior vice president and director of government relations for NJBankers. He can be reached at maffuso@ njbankers.com.
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Directors’ Corner
Audit Committee Priorities for 2013 By Corey Temple
W
hile audit committee agendas are never lacking in any year, a number of critical issues should be on every audit committee’s radar screen – if not front-andcenter – in 2013. This year, audit committees will face a host of governance challenges as economic uncertainty and political turbulence, digitization, increased suCorey Temple pervision and regulation and stepped-up enforcement continue
to reshape the business and risk environment. How these issues fit into your committee’s agenda, of course, depends on your bank’s specific business and accounting matters of concern. But one notion has become clear: focused, yet flexible agendas – and exercising judgment about what belongs and does not belong on the agenda, and when to take deep dives – will be critical. Stay focused on job #1: Financial accounting and reporting and internal controls. The noise in the room surely has escalated with ongoing public policy initiatives, debates on regulatory capital
requirements, tax reform, and new accounting standards. Still, the audit committee needs to stay focused on job #1, particularly with respect to monitoring fair value estimates for hard to value instruments, impairment charges on loans and securities, and management’s assumptions underlying critical accounting estimates such as the allowance for loan losses, goodwill impairment assessments, and valuation allowances for deferred tax assets. Are all financial communications consistent across all regulatory filings? Do the CFO and finance organization have all the resources they need to succeed? Remember: financial reporting quality starts with management. Reinforce audit quality and set clear expectations for the external auditor. Audit quality is enhanced by an engaged should come with the service you deserve audit committee that sets the tone and expectations for the external auditor and then monitors auditor performance through FOS is now part of Herbein + Company, Inc. frequent, quality communications, and a Together, we offer the STABILITY of working with rigorous performance assessment. Also, familiar faces, DEDICATED service teams making pay close attention to Public Company decisions locally, and the FOCUS of working with Accounting Oversight Board (PCAOB) community banks. initiatives on audit quality and auditor SERVICES independence, and consider how the audit Internal Audit committee can strengthen its oversight. Compliance Consulting Monitor the impact of the business Risk Managment Collateral Field Exams and regulatory environment on the Tax and audit bank’s compliance programs. Emerging technologies have made banks more CONTACTS vulnerable than ever to fraud, misconduct James A. Michalak, CPA, CITP Thomas R. Strause, CIA, CFE, CBA, CFSA, CISA and compliance risk. Take these in to Debbi S. Fetter, CFIRS, CISA, CFSA, CRMA account for all growth initiatives, including potential new lending and deposit products, investment strategies or ventures. Ensure that the bank’s regulatory compliance and monitoring programs are adhered to throughout the organization and reinforced www.herbein.com • www.fosinternalaudit.com • 1.855.HC.TODAY in the branch network, operation centers F I N A N C I A Land headquarters. Do management and OUTSOURCING S O L U T I O N Sthe board have a strong process in place to address and correct matters raised in INTERNAL AUDIT + COMPLIANCE CONSULTING
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Spring 2013
Atlantic Technology Systems regulatory examinations? Does the CFO have all the resources he/she needs to succeed? Also, consider how vendors and other third parties fit into those programs. Understand the bank’s significant tax risks and how they are being managed. Challenged first by the complexity of operating across state lines in different taxable jurisdictions, banks are facing increased scrutiny at all levels as well as demands for greater transparency and disclosure. To stay abreast of evolving tax risks, establish a clear communications protocol for the chief tax officer to update the audit committee on tax risk management, tax planning strategies, and uncertain tax matters. Make sure internal audit is properly focused and fully utilized. Internal audit is most effective when it is focused on the critical risks to the business, including key operational risks and related controls – not just compliance and financial reporting risks. Therefore, challenge internal audit to take the lead in coordinating with other governance, enterprise risk management, and compliance functions within the organization to limit duplication in coverage and, more importantly, to prevent gaps. Internal audit should be a valuable resource to audit committees. Beyond these core areas of oversight, audit committees can also play an important role in supporting the board (and coordinating with other board committees) on a broader range of governance challenges: • Consider whether the board has the right composition and committee structure to provide effective risk oversight. • Understand how digitization, banking apps and social media are transforming the business landscape – and the impact on the bank and board oversight. • Set the tone and closely monitor the leadership’s commitment to that tone, as well as the culture throughout the organization. ■ Corey Temple is the partner in charge of the NJ audit practice of KPMG. He can be reached at (973) 912-6359. Also please view the KPMG website at KPMG.com.
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Spring 2013 New Jersey Banker
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Behind the Teller Line
Two River Community Bank SERVICE • EMPLOYEE SATISFACTION • SHAREHOLDER VALUE • INTEGRITY • COMMUNITY
Pictured, from left: Alan B. Turner, executive vice president and senior loan officer; Robert C. Werner, executive vice president and COO; Nancy Graves, assistant banking division director, New Jersey Department of Banking & Insurance; John E. McWeeney, Jr., president and CEO, NJBankers; Michael Skudera, mayor, Tinton Falls; William D. Moss, president and CEO; Frank J. Patock, chairman of the board, Two River Community Bank; Charles T. Parton, vice chairman of the board; Kenneth E. Kobylowski, acting commissioner, NJ Department of Banking & Insurance; A. Richard Abrahamian, executive vice president and CFO.
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wo River Community Bank is known for its extraordinary personalized customer service. The focus of Two River Community Bank, as a fullservice bank, is to provide commercial and retail banking services to individual consumers, professionals and small to mediumsized businesses located within the communities it serves. Going to extremes – routinely – on a customer’s behalf was one of the founding principles of Two River Community when it opened in 2000. Just 13 years later, the NASDAQ-traded financial institution has more than $700 million in total assets and has 12 branches in Monmouth County, four in Union County and two regional lending offices in New Brunswick and Summit, with continued plans for strategic expansion. As part of this ongoing plan, all bankrelated departments were relocated, and the executive offices were consolidated, from five locations into one corporate headquarters in Tinton Falls. The new environment is designed to dramatically improve internal communications and bring greater efficiencies to the company. The bank also opened a second branch location in Red Bank. Two River Community Bank operates on
the foundation that a bank dedicated to the needs of the local community can meaningfully outperform their larger competitors, in terms of friendly personalized service, responsiveness, and commitment to the community. Customers can conduct their banking in person, on a mobile phone, or through the bank’s website 24 hours a day, to check balances, view check images, transfer funds, obtain account statements, open accounts, and access a variety of other valuable services. They are committed to assuring that all of their clients’ banking experiences with them will exceed their highest expectations, whether in person, online or on a mobile device. Business and commercial banking are only two of Two River Community Bank’s many focus areas. They provide essential business services, including business checking and savings services, business money market accounts and certificates of deposit, health savings accounts, commercial loans, SBA lending, investment services, merchant card services, business online banking, and remote deposit capture. Commercial loans include business lines and loans, real estate lending, equipment financing, private banking for business professionals, and private banking for medical professionals, where the bank offers unique services to physicians, including financing for malpractice insurance, medical equipment purchases and practice acquisition. “One of the keys to success in today’s competitive business environment is to surround yourself with the right resources and local business professionals who live and work in your community … who understand your goals and the local business environment, work as hard as you do to stay ahead of the competition, and who are able to respond quickly when opportunities arise,” explained William D. Moss, president and CEO. At Two River Community Bank, they are dedicated to providing their customers with a high level of service, and also going
Spring 2013
beyond traditional banking services to give them immediate access to the financial resources to help them meet their goals. With this in mind, the bank formed a strategic alliance with Harbor Lights Financial Group and launched investment services at Two River Community Bank, providing customers with personalized recommendations to assist them with the management of their funds for today’s needs and also for the financial transition to the next generation. The bank also demonstrates its commitment to the quality of life in the areas it serves through donations and volunteer hours from their dedicated employees and directors to many great organizations. During 2012, the people of Two River Commu-
nity Bank served as either board members or volunteers at over 75 organizations in local communities. “Our ongoing level of commitment to being actively involved in our local communities is woven into how we define ‘community banking,’” said Moss. “We strongly believe that the future of our communities relies not solely on providing financial support through contributions, sponsorships and volunteerism, but also on investing in the future of our youth and their education,” he added. To that end, in 2008 Two River Community Bank instituted an internship program specifically designed to provide a platform for high school students to gain valuable
insights into a potential career through internships at the bank. Interns are given the opportunity to work in various departments, such as loan operations, accounting, human resources, compliance, branch operations and marketing, giving them the ability to gain a comprehensive understanding of the bank’s operations. More than half a dozen high schools have already participated in this program. Since the bank’s inception, its focus has been on the customer, striving to make the banking experience the very best it can be, to meet customers’ financial needs and goals, and to get to know them as a valued customer and friend, while providing the latest in technological advances. ■
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Supernal Software, LLC
200 Robbin Road Paramus, NJ 07625 Contact: Robert B. Jones, President and CEO Phone: 201-261-2800 Email: rjones@cafsnj.org
1676 N. California Blvd., Suite 300 Walnut Creek, CA 94596 Contact: Sarah Slagle, Marketing Coordinator Phone: 888-399-1930 x 176 Email: sslagle@pcbb.com
127 Marina Drive La Crosse, WI 54603 Contact: Peter Griffith, President Phone: 608-785-7101 Email: pgriffith@supernal.com
E2Value, Inc.
Recall
Verafin, Inc.
1887 Summer Street Stamford, CT 06905 Contact: Mike Coan, Vice President of Business Development Phone: 203-975-7990 Email: mcoan@e2value.com
180 Technology Parkway Norcross, GA 30092 Contact: Teresa C. Novak, Sales Executive Phone: 267-987-4688 Email: teresa.novak@recall.com
570 Newfoundland Drive St. John’s, NL, Canada Contact: Catherine Warren, Marketing Phone: 877-368-9986 Email: catherine.warren@verafin.com
Innovative Financing Solutions (IFS)
Samuel M. Reed (dba Morgan Stanley)
Zero-In Media
1200 Mt. Kemble Avenue Morristown, NJ 07962 Contact: Samuel M. Reed, Financial Adviser Phone: 973-425-2317 Email: samuel.reed@morganstanley.com
244 Madison Ave., Suite 244 New York, NY 10016 Contact: Mitchell Goss, Vice President of Sales and Operations Phone: 888-260-7291 ext. 101 Email: mgoss@zeroinmedia.com
218 Ardmore Avenue Ardmore, PA 19003 Contact: Michael Ryan, President and CEO Phone: 610-733-9955 Email: mryan@innovfs.net
nCino, LLC. 2605 Iron Gate Drive, Suite 100 Wilmington, NC 28412 Contact: Frank Gross, Regional Vice President Phone: 201-832-2508 Email: frank.gross@ncino.com
Signature Information Solutions LLC P.O. Box 8488 Trenton, NJ 08650 Contact: Lyman Hopper, Senior Account Executive Phone: 609-359-7238 Email: lhopper@signatureinfo.com
Spring 2013 New Jersey Banker
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Meet Our Select Service Providers for Forms/Office Supplies
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s your bank sacrificing savings and efficiency for familiarity?” This question was asked in a recent banking article and the answer could not be more important in today’s volatile economy. Continuing to do things as they have always been done is simply not a viable business strategy. The reality is that expense reduction strategies will become key contributors to overall bank profitability in 2013. Optimum can help. The Optimum suite of products and services are designed to enhance overall bank performance. Whether your bank is looking to reduce non-interest expense, attain greater control of your procurement
process, save time, save space or instill cost discipline across each department and retail branch, we have the resources to assist you. Optimum leverages our combined purchasing power to drive the unrealized discounts that are beyond the reach of most community banks. Our programs routinely save most financial institutions a minimum of 15 percent to as much as 45 percent on printed documents, office supplies, forms management services, ad specialties and toner cartridges. Optimum provides your bank with monthly usage data, trend analysis, inventory valuation and chargeback reporting by individual
cost center for greater control and accountability. Our program allows community banking institutions to grow without the need for additional labor, time and space. The Optimum program ensures a seamless and prompt transition with minimal disruption to daily bank operations. Call today for your free, no obligation financial analysis and executive management report. Let our team of consultants put your bank on the path to greater efficiency and profitability. ■ For more information, contact Wayne Whipple, director of business development at (570) 207-5130 or wwhipple@opoffice.com, or visit www.bankonoptimum.com.
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urchasing Assistant™ e-procurement system will increase net profits in the first 30 days. Procurement cycles require six basic steps. Products must be requested, spending approved, orders sent to vendors, products received, invoices checked for accuracy and payments made. Good business practice requires that these specific steps be taken (and documented), either on a labor intensive manual basis, or through the use of a more efficient automated system. Purchasing Assistant™ is a web-based, multivendor e-procurement system that will help you reduce spending, automate purchase-to-pay procurement cycles, manage vendor service contracts, control stockroom inventory and meet record retention compliance. Benefits include: • Increased cost center budget compliance. • Controlling maverick spending. • Reducing the cost of consumable supplies. • Improved employee productivity. • Managing service contracts. • Establishing record retention compliance. Budget control – Transactions processed by Purchasing Assistant™ are tracked by PO number, G/L account and cost center, allowing for the enforcement of audit and cost center budget controls. Maverick buying – By controlling offcontract buying and by monitoring realtime usage, management can identify and eliminate unnecessary expenditures. Buying power – With over $2 million in collective buying power, Purchasing Assistant™ has a 15-year track record of reducing product cost for office supplies and toner. Employee productivity – The average
cost to manually process a purchase order cycle is approximately $136. A typical bank will process about 40 orders per cost center per year, resulting in tens of thousands of dollars in unnecessary administrative expense. Service contracts – Vendor service contracts can be posted, profiled and viewed online. Email alerts can be sent to designated staff prior to renewal dates. Records retention – FMS record retention guidelines provide that
Doing Things the Right Way
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procurement and inventory records must be archived from between three to seven years. Orders submitted online using vendor shopping cart programs do not qualify as purchase orders (issued by a buyer to a seller and acknowledged as such). Orders placed through Purchasing Assistant™ are qualified purchase orders and are archived for 10 years. ■ To learn how Purchasing Assistant™ can help increase net profits, visit www.purchasingsystems.com, or contact Kevin Wm. Bless at (800) 305-2024, or email sales@purchasingsystems.com.
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Spring 2013 New Jersey Banker
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Feature
Network Security: The What and How of Patching By Jeremy Burris
R
emember that day when you wanted to sneak out of the office five minutes early and instead had to stay a few minutes late because your computer needed to install 16 updates before shutdown? That (often bothersome) update is an example of a “patch” or piece of code developed to correct problems or assist added Jeremy Burris functionality. Even if you’re not an IT wizard, you can presume that countless patches are necessary to ensure a safeguarded, functional network. Despite the severe need to install patches, IT staff mistakenly omit them due to their complex, progressive nature. The Open Web Application Security Project’s Top 10 Security Risks listing for organizations includes five frequent
management. Here are a few reasons why: • Many of the automated patching systems only secure the operating system itself and not the software on the operating system. • IT staff simply don’t realize that there are patches available or do not think that the software in question could lead to a compromise. • Staff neglect to reboot the system after implementing a patch. This provides a false sense of security because the patch is not “effective” until after the reboot. Hacker tools will tell an intruder how long it has been since a system reboot and what patches were partially installed. • Users install unauthorized software. The IT staff are unaware of the software’s installation and its missing patches. Regardless of the above reasons for an unpatched software package, a single, neglected patch can lead to the compromise of numerous hosts on the network. Although
Automated patching systems, while often robust and helpful, should not be fully relied upon to patch the entire network.
vulnerabilities that can be mended through patching (2010). If missing patches increase an entity’s susceptibility to an attack, why do IT staff overlook patches, and what can you do to make sure your institution is executing effective patch management?
WHAT DO I NEED TO PATCH? There are only two groups of items that need to be patched: software packages and the operating system. Staff typically neglect the first group in terms of successful patch
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all software packages should be monitored, banks should pay closer attention to certain types. Typically, larger software vendors require extra patches. For example, Microsoft (as an operating system) has more patches than a small banking application. To explain, the source code for the banking application is harder for hackers to come by than exploits in the Windows code. In other words, Microsoft and other operating systems are threatening targets to institutions because
they’re common, readily available, found on most internal computers and servers, and less expensive compared to small banking applications.
HOW TO EMPLOY EFFECTIVE PATCH MANAGEMENT Now that you know what needs to be patched, how can you effectively employ patch management at your bank? Exercising patch management will involve one of two methods – patching systems manually or by using an automated software package – or a combination of the two. IT staff can purchase automated software packages that patch the operating system and software loaded. This method is useful for large institutions since manually locating and installing absent patches takes a considerable amount of time. Be forewarned that none of these software packages are 100 percent guaranteed to catch all needed patches. Therefore, IT staff need to be diligent at looking for software that these automated systems may be unable to patch. Smaller institutions with fewer network systems may attempt the time-consuming manual approach instead of the pricier automated method. Both solutions require one piece of documentation that many bank personnel, auditors, and regulators overlook: a detailed software inventory. A well-kept software inventory, whether manually made or derived from an automated software program, should list all installed software on every machine in the organization. With this inventory, the IT staff can check software vendor websites for needed patches and possibly discover unauthorized software loaded by end-users that can be removed. To determine if your organization is building its best barrier for attacks, IT staff should schedule regular penetration tests (from both an external and an internal perspective) as many of the software tools used during a penetration test can search
Spring 2013
for missing patches and misconfigurations. A well-conducted penetration test can be the proof that examiners/regulators, audit committees, and senior management of the bank need in order to assure the organization that the patching system in place is working as designed. Vulnerabilities discovered should be quickly remediated, but more importantly, patching processes should be adjusted to certify the same type of susceptibility is not rediscovered in the future.
IN SUMMARY IT staff should regularly visit software vendor and operating system websites (regardless of the patching system in place) to search for patches for security-related
issues. In addition, IT staff should maintain a detailed software inventory to validate patches and perform periodic reviews of user workstations. Missing patches should be installed as soon as possible and during nonpeak hours so the system can be rebooted. Automated patching systems, while often robust and helpful, should not be fully relied upon to patch the entire network. Lastly, regular penetration tests should be conducted to make sure the patching system in place is operating as intended. Remember, a single missing patch or misconfiguration of software can lead to the compromise of your entire network. Don’t give an attacker a “foothold” to start climbing into your network. ■
Jeremy Burris, CISA, MCP, L|PT, CPTS, C|EH, ECSA, CCIP, is a principal in the Technology Services Group at S.R. Snodgrass, A.C. He has over 15 years of information systems audit and controls involvement. His main focus within the firm is network attack and penetration testing, which is showcased by his four certifications in the area, as well as a licensed penetration tester designation, one of only a few hundred nationally.
REFERENCES The Open Web Application Security Project. 2010. Top 10 2010 – Main: Top 10 risks. Retrieved Jan. 30, 2013, from www. owasp.org/index.php/Top_10_2010-Main.
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Spring 2013 New Jersey Banker
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BANK SECURITY A Comprehensive Look at What Member Banks are Doing to Protect Customers – and Themselves By Christina P. O’Neill Bank security starts from within – with best practices for staff in terms of security clearances, knowledge of customers, and tight controls over staff-owned mobile devices, from laptops to flash drives. The second facet is outward-facing vigilance against threats such as computer hacking, check fraud and ATM skimming. New Jersey-based banks gave their views and shared with us their best practices. As members of the NJBankers Security Committee, Allan Cronheim, vice president of security at Kearny Federal Savings Bank, and Jeffrey G. Walding Sr., CPP, security administrator at Newfield National Bank, joined the conversation.
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SECURITY BEGINS AT THE BRANCH How many staffers have security clearance, and at what level? A best practices rule of thumb: Security clearances should be based on the number of employees at a specific site and the number of employees required to perform opening or closing duties and/or the individual’s operational responsibilities to the bank. Vault and cash locker openings should require a supervisor or manager as well as a staffer, and branch opening and closing should require at least two employees present. Alarm panel access codes and entrance keys should be controlled by the bank’s security officer. One of NJBankers’ member banks maintains a bank-wide key control program which limits distribution of certain keys to people with limited responsibilities. Alarm panel programming is done by vendors as requested by the bank’s security officer only. At this member bank, corporate locations utilize access control software, which permits only designated personnel into the building after hours, or into a specific departmental area during business hours. Except for access to open areas, such as human resources, bank personnel are restricted to their specific departments, such as mortgage, loan, marketing, accounting, internal audit, and so on. Upper management has access to all areas of the corporate buildings and branch locations. As the result of a rapid expansion over the past seven years, the member bank has adopted a photo ID card system for those employees who have a need to visit branch sites where they may not be recognized by newly acquired branch personnel. Such visitor employees include facilities/maintenance employees, internal auditors, human resource employees and security.
KNOW YOUR CUSTOMER All new employees at this member bank are required to receive Know Your Customer training within the first 90 days of employment, and it is documented for review by the regulators. The role of the Know Your Customer policy should be implemented to assist in the identification and prevention of suspicious activity by persons conducting or attempting to conduct illegal activities at the bank. This policy includes obtaining current photo identification, proof of residence, social security number confirmation, and more – and a means to confirm the information. All new customers are also compared to the several watch lists issued by the Office of Foreign Assets Control (OFAC) and account history identification software utilized by other banks as part of the account opening process. If the new customer has a questionable banking history at other banks, it is indicated why accounts were closed. Privacy policies are implemented to protect customer or business information, which, if obtained by unauthorized persons, could cause loss to both the customer and the bank (see sidebar, page 23). Privacy policies are implemented to protect sensitive personal or business information. Security is impacted more when a breach to the privacy policies or practices are experienced. When a breach takes place, resources needed to investigate claims, possible legal expenses, training for employees etc. are often difficult to obtain. Other issues include the bank incurring financial loss, reputation in the community and potential for adverse legal action.
KNOW YOUR CUSTOMER’S COMPUTER, TOO As online and mobile banking become the new normal for banking, outside threats on customers’ computers can severely compromise security. In the Patco vs. People’s United case, recently settled out of court, the Maine-based construction contractor Patco sued Maine-based Ocean Bank (later acquired by New-England based People’s United Bank) after online fraudsters lifted nearly $600,000 from Patco’s account. A federal court found that the bank’s security system was “not commercially reasonable,” but it went beyond that, noting deficiencies in the way the bank’s security system was set up and monitored. Hackers didn’t invade the bank’s system – they installed Zeus malware on Patco’s computer and took $588,000 and change from Patco’s payroll account in several transactions. The federal court concluded that the bank had failed to flag unusual activity in Patco’s account – large transac-
Spring 2013 New Jersey Banker
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tions at unusual times to individuals with whom Patco didn’t do business. The court said that the bank failed to observe the security system’s flagging of these transactions as highrisk. But the most telling piece of evidence was Ocean Bank’s decision to lower the threshold at which challenge questions are asked of customers. The more frequent the challenge questions, the more opportunities thieves had to figure out the answers. Ocean Bank lowered the challenge questions to transactions of $1. To avoid exposure to such loss, banks should have personnel review suspect transactions and notify customers of any suspicious transactions. Also, more institutions are adopting multi-factor identification, requiring more methods of identification than simply answering a challenge question.
THE THREATS FROM OUTSIDE With the advent of remote deposit capture (RDC), it has become necessary for banks to do their own risk assessment before implementing an RDC program for check-capture. One New Jersey Bankers Association member bank only offers RDC to select business accounts that are well-vetted before the bank provides them with the scanning equipment. Technological im-
provements since RDC’s inception cut down on the opportunities for fraud. When a check is scanned and imaged through a scanner, coding is imprinted on the check indicating that the item has been scanned previously. Certain threshold limits can be established with the selected customer to mitigate risk. The member bank’s software flags any remote deposit that has been previously deposited. Then, there’s debit-card fraud. Currently, the member bank does not offer check-imaged deposits at the ATM. The bank has, however, encountered ATM fraud through the fraudulent use of ATM debit cards either at the ATM location, at a point of sale retail outlet, or through the use of skimmer equipment. In some cases, the bank determines that the customer may have given the perpetrator the card and PIN for a specific transaction, only to find out later that the card was used for unauthorized transactions. Other reported frauds are reported by customers that ATM/debit cards are compromised at gas stations, restaurants or retail outlets while on vacation. Going up the chain of outside threats are bank robberies. The state of New Jersey does not have or utilize a statewide bank robbery notification resource for the banking commu-
Reason says: go with the well-known. Instinct says: go with the know-how.
nity. Several bank security groups throughout the state, comprised of bank security officers, local, state and federal law enforcement, generally meet monthly to discuss current trends in bank fraud or robberies, where they exchange information. In addition, most of these security groups have some sort of internet security alert system from which member banks are informed of regional robberies within minutes of the occurrence, providing descriptions, vehicle information, weapon use, etc. Rarely is a dollar amount part of the security alert. Bandit Tracker is a web-based information system also utilized to provide robbery information to member banks. The FBI just started a database that can be accessed at https://bankrobbers.fbi.gov. Bankers Online has a webpage dedicated to bank robbers, and their page can be accessed at www. bankersonline.com/security/robberypage.html. Bank security officers pass along bank robbery information and photographs through the security officer groups in North, Central and Southern New Jersey. Some of the groups only send the information to other participating banks. Law enforcement has their own alerting system for which they put out information and photographs of bank robbers. ■
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Computer Tips for Your Customers Jeffrey G. Walding Sr., CPP, of Newfield National Bank has these tips for banks’ customers regarding computer protection that can be shared with customers. Bank customers may need to hire a professional unless they are, or have access to trained computer technicians. Securing your own computer, or not updating it properly, can be a recipe for disaster. The basics: when the unit isn’t being used, turn it off – and put it away, if possible.
Install anti-virus and anti-spyware: Use and properly
Recognize phishing scams: Email disguised to look like
Back up data: All data – from banking information to
Shop securely: Seek out reputable and/or recogniz-
configure your firewall which regulates who or what from the internet has access to your data whether it be in or out of your computer. Enable your pop-up blocker. Never click the “decline” or “no” button; always click on the Windows “X” at right top to close. family photos – are gone forever if fire, water, etc. damage your computer. Configure for automatic operating system updates such as anti-virus, anti-spyware and anti-malware.
Encrypt your wireless: Encrypt your wireless connection with WPA2. If unavailable, WEP is better than nothing.
Encrypt your hard drive: This means only someone with the key (a strong password) can unscramble (decode) and read documents. The average thief can only use your hard drive as decoration; it takes a more sophisticated hacker to break the code.
Protect your passwords: No word found in a dictionary,
no date of birth or common or relevant number in your life. Do not use the same passwords for every account. Create a random 13 character password that contains at least an alphanumeric symbol, and both uppercase and lowercase letters. For example: 1eMx09%)f12bD. (Note: Now, don’t use this as a password.)
Password protection software or a password vault:
This is where all your passwords are stored for each website or software program and are protected by one master password. Remember, you must protect this password, because if someone accesses it on your computer, they will have all of them. Benefits: It’s easy to create, use and store. It limits user access and is easy to update. On the other hand, all your eggs are now in one basket, and you may forget your master password, so write it down and keep it in a safe place. Password protection software is not for everyone.
it’s from a familiar source, such as a business, your bank, an e-commerce site, Facebook, or Twitter asking you to log in by clicking a link within it. The link takes you to a site looking exactly like that of the legitimate business, where you are asked to input personal information. able companies rather than the lowest priced retailer. Look for web addresses which start with “https://” instead of “http://,” because the “s” stands for “secure.” On the bottom right-hand corner of the page, look for a small padlock. A closed lock icon indicates the site you are buying from uses SSL encryption.
Protect your laptop: These are a higher risk because of their portability. Once thieves have it, they can take their time trying to access the hard drive. Keep sensitive documents off the hard drive or encrypt the drive.
Understand the cloud: This is data stored outside the
home and/or office on other people’s servers. You have to ask: What is their security? Will they notify you of an intrusion into their system in a timely manner?
Protect your loved ones: Do not forget to place these same safeguards on all computers used at home.
Have a plan: If you are to lose your data, computer, or
have a breach in one of your machines and your information is stolen, what do you do? Have an action plan you can put into place to limit or stop the loss of information and recover from it. Note: Businesses should not allow general internet browsing on a machine that is used for Internet banking or financial record-keeping. You never know what your employees are going to click on.
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New Jersey Economic Leadership Forum
Forum Features Impressive Speakers and Turnout
Gathering for a photo at the Economic Leadership Forum are John E. McWeeney, Jr., president and CEO, NJBankers; Robert Doherty, New Jersey state president, Bank of America; David Walker, founder and CEO, Comeback America Initiative; Kevin Cummings, chairman, NJBankers, and president and CEO, Investors Bank; and Stewart E. McClure, Jr., first vice chairman, NJBankers, and president and CEO, Somerset Hills Bank.
N
JBankers welcomed its members and guests to the Economic Leadership Forum on Friday, Jan. 11, 2013, at The Palace at Somerset Park in Somerset. The Forum was a huge success, boasting an impressive lineup of guest speakers and panelists, and hosting over 550 guests. The Economic Leadership Forum was covered by national and local media, including Market News International, Dow Jones Newswires, The Trenton Times, Bloomberg News, NJBIZ, Commerce Magazine, The Record, Reuters, NJ Business Magazine and others. The first speaker was Charles I. Plosser, president and CEO of the Federal Reserve of Philadelphia. Plosser discussed the state of the
economy, business trends and interest rates, among other topics. The next speaker was Ralph LaRossa, president and COO of PSE&G. LaRossa spoke in detail about how PSE&G responded to Hurricane Sandy and provided an update on restoration progress in the state. The Healthcare Panel welcomed Lisa Donoghue, senior vice president, Bank of America; John Lawrence, president, Aetna-NJ; and Barry Rabner, CEO, Princeton Healthcare Group, who addressed the changing health care delivery landscape from the viewpoint of both the provider and the payor and discussed how legislation and the evolving coordination of care impacts the industry.
The Higher Education Interview featured Cindi Pierce, partner, Crowe Horwath, LLP, and Richard Edwards, executive vice president, academic affairs, of Rutgers University, who discussed Rutgers’ merger with UMDNJ, becoming the 14th member of the Big Ten and their invitation into the Committee on Institutional Cooperation. The Real Estate Interview featured Michael Fasano, vice president and regional manager, Marcus & Millichap, and Ed Russo, president and CEO, Russo Development, who discussed the current status of New Jersey’s real estate market. The Economic Development Panel welcomed Edward Deutsch, managing partner, McElroy, Deutsch, Mulvaney & Carpenter, LLP; Michele Brown, CEO, New Jersey Economic Development Authority; Tracye McDaniel, president and CEO, Choose New Jersey; and Michael Van Wagner, executive director, New Jersey Business Action Center. This panel discussed how The Partnership for Action is marshalling its resources to concentrate efforts to expand opportunities, spur investment across New Jersey’s business community and position New Jersey as a national leader in retaining, expanding and attracting businesses. Keynote speaker David Walker, founder and CEO of the Comeback America Initiative, addressed the fiscal challenges that lie ahead for America and how to deal with them. ■
Attendees at the Economic Leadership Forum listen intently to the speakers during the Real Estate interview.
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Charles Plosser, president and CEO, Federal Reserve Bank of Philadelphia, presented his views on the economy, business trends and interest rates to more than 550 guests at the Forum.
Ralph LaRossa, PSE&G president and COO, spoke about PSE&G’s response to Superstorm Sandy and shared an update on restoration of services for the state.
Keynote Speaker David Walker, founder and CEO of the Comeback America Initiative, addressed the fiscal challenges that lie ahead and what he feels our nation needs to deal with those challenges.
The Higher Education Interview featured Cindi Pierce, partner, Crowe Horwath, LLP, and Richard Edwards, executive vice president, Academic Affairs of Rutgers University, who discussed Rutgers’ merger with UMDNJ, becoming the 14th member of the Big Ten and their invitation into the Committee on Institutional Cooperation.
The Healthcare Panel welcomed Lisa Donoghue, senior vice president, Bank of America; John Lawrence, president, Aetna-NJ; and Barry Rabner, CEO, Princeton Healthcare Group, who addressed the changing health care delivery landscape from the viewpoint of both the provider and the payor, and discussed how legislation and the evolving coordination of care impacts the industry.
The Economic Development Panel welcomed Edward Deutsch, managing partner, McElroy, Deutsch, Mulvaney & Carpenter, LLP; Tracye McDaniel, president and CEO, Choose New Jersey; Michael Van Wagner, executive director, New Jersey Business Action Center; and Michele Brown, CEO, New Jersey Economic Development Authority. This panel discussed how The Partnership for Action is marshalling its resources to concentrate efforts to expand opportunities, spur investment across New Jersey’s business community and position New Jersey as a national leader in retaining, expanding and attracting businesses.
Spring 2013 New Jersey Banker
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Feature
Compliance Risk in Banking By Maria Coppinger-Peters
C
ompliance risk is the current and prospective risk to earnings or capital arising from violations of, or nonconformance with, laws, rules, regulations, prescribed practices, internal policies, and procedures, or ethical standards. Compliance risk also arises in situations where the laws or rules governing certain bank products or activities of the bank’s clients Maria Coppinger-Peters may be ambiguous or untested. This risk exposes the institution to fines, civil money penalties, payment of damages, and the voiding of contracts. Compliance risk can lead to diminished reputation, reduced franchise value, limited business opportunities, reduced expansion potential, and an inability to enforce contracts. Risks attack from two directions, there is the quantity of risk and the quality of risk. Generally, the best way to uncover potential risks is by using a matrix. The quantity matrix should rate all factors in a given area, and be rated as high, medium and low based on the risks associated with non-compliance. For example, the Flood Disaster Protection Act (FDPA) has both a monetary risk (mandatory civil money penalties for non-compliance) as well as asset quality concerns in the event of flooding not covered by flood insurance. The quality of risk indicates what controls the bank has in place and how it mitigates the quantity of risk. Include in your assessment controls and safeguards you have in place to lower the residual risk. Therefore, your quality of risk should decrease depending on your mitigating controls.
QUANTITY OF COMPLIANCE RISK INDICATORS The following indicators should be used when assessing the quantity of compliance risk:
26 New Jersey Banker
LOW Violations or noncompliance issues are insignificant, as measured by their number or seriousness. The institution has a good record of compliance. The bank has a strong control structure that has proven effective. Compliance management systems are sound and minimize the likelihood of excessive or serious future violations or noncompliance. MODERATE The frequency or severity of violations or noncompliance is reasonable. The institution has a satisfactory record of compliance. Compliance management systems are adequate to avoid significant or frequent violations or noncompliance. HIGH Violations or noncompliance expose the company to significant impairment of reputation, value, earnings, or business opportunity. The institution has an unsatisfactory record of compliance. Compliance management systems are deficient, reflecting an inadequate commitment to risk management.
QUALITY OF COMPLIANCE RISK MANAGEMENT INDICATORS The following indicators should be used when assessing the quality of compliance risk management: STRONG Management fully understands all aspects of compliance risk and exhibits a clear commitment to compliance. The commitment is communicated throughout the institution. Authority and accountability for compliance are clearly defined and enforced. Management anticipates and responds well to changes of a market, technological, or regulatory nature. Compliance considerations are incorporated into product and system development and modification processes, including changes made by outside service providers or vendors.
When deficiencies are identified, management promptly implements meaningful corrective action. Appropriate controls and systems are implemented to identify compliance problems and assess performance. Training programs are effective, and the necessary resources have been provided to ensure compliance Compliance management process and information systems are sound, and the bank has a strong control culture that has proven effective. The bank privacy policies fully consider legal and litigation concerns. SATISFACTORY Management reasonably understands the key aspects of compliance risk. Its commitment to compliance is reasonable and satisfactorily communicated. Authority and accountability are defined, although some refinements may be needed. Management adequately responds to changes of a market, technological, or regulatory nature. While compliance may not be formally considered when developing products and systems, issues are typically addressed before they are fully implemented. Problems can be corrected in the normal course of business without a significant investment of money or management attention. Management is responsive when deficiencies are identified. No shortcomings of significance are evident in controls or systems. The probability of serious future violations or noncompliance is within acceptable tolerance. Management provides adequate resources and training given the complexity of products and operations. Compliance management process and information systems are adequate to avoid significant or frequent violations or noncompliance. Bank privacy policies adequately consider legal and litigation concerns.
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WEAK Management does not understand, or has chosen to ignore, key aspects of compliance risk. The importance of compliance is not emphasized or communicated throughout the organization. Management has not established or enforced accountability for compliance performance. Management does not anticipate or take timely or appropriate actions in response to changes of a market, technological, or regulatory nature. Compliance considerations are not incorporated into product and system development. Errors are often not detected internally, corrective action is often ineffective, or management is unresponsive. The likelihood of continued violations or noncompliance is high because a corrective ac-
tion program does not exist, or extended time is needed to implement such a program. Management has not provided adequate resources or training.
with sophisticated software programs. The two key takeaways to remember are one, your bank’s compliance risk levels should be dictated by your bank’s business lines and products; and
Your quality of risk should decrease depending on your mitigating controls Compliance management processes and information systems are deficient. Bank privacy policies are nonexistent or do not consider legal and litigation concerns. There are many ways of addressing compliance risk; matrices are quite common, along
two, your assessment must address the most effective way to manage the risk that fits your bank’s profile and unique characteristics. ■ Maria Coppinger-Peters, CRCM/CCEP, is first vice president and chief compliance and CRA officer at Kearny Federal Savings Bank.
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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 High Point Property and Casualty Insurance Company and their affiliates. Each company is financially responsible only for its own insurance products. Certain restrictions and limitations apply. For a full description, please visit PlymouthRockNJ.com. Group discounts apply to policies written in High Point Property and Casualty Insurance Company. If the discount is not currently applied, it may be added upon request. May not be combined with any other group discounts. Offer available to New Jersey residents only. Annual average savings based on customers who switched to High Point Property and Casualty Insurance Company using a group discount from 1/2010 to 4/2012. Your premium may vary due to available discounts, eligibility requirements, driving record, and other factors. ©2013 Plymouth Rock Management Company of New Jersey. All rights reserved 6822/022013
Spring 2013 New Jersey Banker
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Annual Conference
The Future of Community Banking
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he NJBankers 109th Annual Conference will be held May 15 – 19 at The Breakers in Palm Beach, Florida, and it is surely a learning experience not to be missed! The conference theme this year is “The Future of Community Banking” – a topic that should interest every banker in New Jersey and will provide education, enhance leadership and fuel inspiration for all in attendance. The NJBankers Conference Committee has created a timely, powerful program for C-level leadership, directors and senior managers of financial institutions.
This year’s conference offers benefits for everyone. A full trade show will be open and will host our welcome and networking reception, as well as our hot breakfast buffet. The trade show floor is a perfect opportunity to visit with your existing service providers as well as research and speak with new contacts who can provide the kind of thinking and innovation to help your institution evolve as we investigate the future of community banking. On the education side, the conference once again offers full general sessions on Thursday and Saturday and educational
concurrent sessions on Friday. The thinkers and trend setters presenting at the general sessions include: • FHLBNY update from Alfred DelliBovi, president and CEO. • A look at the economy with Chris Low, chief economist of FTN Financial. • A technology review – “Deploying Mobile Devices Across the Bank: Risks and Rewards,” with Jack VonderHeide, president, Technology Briefing Centers. • A corporate governance update with Todd Poland, Esq., McCarter & English, and Robert Schwartz, Esq., Windels Marx Lane and Mittendorf. • Stress testing – Basel III update panel featuring Thomas Killian, principal, capital markets, Sandler O’Neill + Partners; Joseph Hill, president, CEIS Review; John Vogel, regional director, FDIC; and Tara French, assistant deputy comptroller, OCC. Concurrent sessions will feature timely topics including: • Mergers and acquisitions panel with Tony Latini, managing director, Boenning & Scattergood; Jim Stokes, managing director, SunTrust Robinson Humphrey; and Robert Azarow, Esq., Arnold & Porter.
109th ANNUAL CONFERENCE MAY 15-19 | THE BREAKERS, PALM BEACH
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Spring 2013
• An executive compensation session with John Gianacaci, partner, Bank Financial Services, who will present “Provide/Revise Executive & Director Benefit Plans to Significantly Improve Your Bank’s Bottom Line,” and Richard Freitag, president, IFM Group, who will present “Bank Executive & Director Pay Update – Getting More Bank for Monies Spent – Effective Executive & Director Pay Strategies for Today’s Environment & the Impact Legislation & Regulatory Focus is Having on Compensation Plan Design.” • “Leadership Lessons for the Banking Industry,” with Don Musso, partner, FinPro. • “The Syndicated Loan Market – An Effective Way for Financial Institutions to Obtain Funded Assets,” presented by Jack Broeren, managing director, PNC Capital Markets. • “Valuing & Assessing Mortgage Co. Acquisitions – Is this the Market to Enter/ Expand Residential Lending?” with Richard Vader, senior managing director, Financial Service Group, Griffin Financial Group. • “The Cloud 102 and Future Technology,” with Chuck Daniels, CEO, and Christian Ericson, CMO, BITS, and Howard Krouse, business development manager, Fiserv. • “Capital Raising & Outlook for Bank Stocks,” presented by Michael Mayes, managing director, Raymond James|Morgan Keegan; Ben Plotkin, ex-
ecutive vice president and vice chairman, Stifel Nicolaus Weisel; and Eric Luse, Esq., Luse Gorman Pomerenk & Schick. • “Moving Beyond Risk Management and Reactivity to Risk Readiness,” with Matt Dyckman, Esq., SNR Denton. • “Risk DNA – You Can’t Change Your Own But You Can Change Your Bank’s,” presented by Michael Cohn, director, WolfPAC Solutions Group, and principal, Wolf & Company. Our keynote speaker at the conclusion of the Saturday general session will be Kyle Maynard, best known as an inspirational and motivating speaker, author, entrepreneur and athlete, despite being born with arms that end at his elbows and legs near the knees. He will also join us for a signing of his book, No Excuses! Hear his story and you may never make excuses for not getting tasks done again! Kyle’s parents will be making their first speaking appearance at our conference to talk about raising their son to be independent and to thrive.
HOTEL AND AIRLINE RESERVATIONS Full conference planning packets are available on the NJBankers website www.njbankers.com. NJBankers strongly suggests that attendees make their reservations with the hotel and airlines as soon as possible. Hotel reservations must be made directly with The Breakers no later than April 13 since a portion of the
NJBankers room block may be released at that time. Please see the conference packet for room rates and reservation details.
SPONSORSHIPS AND EXHIBIT BOOTHS AVAILABLE Enhance your image by being one of our conference sponsors. Sponsorships give your company maximum exposure and recognition to conference attendees. Showcase your company and services at the full trade show which includes 44 service providers. Attendance as a sponsor or exhibitor provides an exceptional opportunity to forge new relationships with more than 57 financial institutions (based on 2012 attendance). Changing technology, regulations and legislation means that more than ever, financial institutions need the support and products offered by service providers. So don’t miss the NJBankers Annual Conference at The Breakers, a luxury oceanfront hotel and one of America’s legendary resort destinations that is also listed on the National Register of Historic Places. In addition to professional development, NJBankers has arranged for a golf tournament, a tennis tournament, snorkel tour, Flagler Museum tour, a bike tour of Palm Beach and this year … a farewell luau! Please note that tours require advance reservations. See you in Palm Beach! ■
NJBANKERS THANKS THE FOLLOWING EARLY SPONSORS: PLATINUM
GOLD
Aetna, Inc. Bank Financial Services Group
Lakeland Bank McGladrey LLP Stifel Nicolaus Weisel
DIAMOND Federal Home Loan Bank of New York Investors Bank
For sponsorship and exhibiting opportunities please contact Jenn Zorn at (908) 272-8500, ext. 611, jzorn@njbankers.com, or visit www.njbankers.com.
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Feature
Branch Transformation Strategies for 2023 WHAT WILL THE BRANCH LOOK LIKE IN 10 YEARS? By Raja Bose and Chris Gill
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n just 10 years, bank branches may bear only a slight resemblance to today’s environments. Branches will continue to play an important role in serving customers, but customers’ changing behaviors will require banks to redefine their branch networks, technology and staffing. The biggest driver for this shift is consumers’ continued migration from the branch to Raja Bose self-service channels, including automated teller machines (ATM), online and mobile banking platforms. As traditional teller transactions move to lower-cost channels, banks can reconfigure branches into sales-oriented Chris Gill environments with smaller footprints, new layouts that promote teller-customer interactions and a wider variety of self-service technologies. Let’s examine several strategies banks may consider when orienting their operations toward the future. Deposit automation. Implementing advanced-function ATMs with deposit automation technology will almost become a necessity to enable efficient self-service cash and check deposits – and remain competitive. To encourage adoption, the technology must be intuitive and fast. ATMs should be easy for customers to use, accept bulk cash and check deposits, and print check images on receipts. Advanced terminals may even offer conveniences like check printing, emailed receipts and mobile pre-staging.
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For customers, deposit automation eliminates waiting in teller lines and creates 24-hour depositing availability. Customers may also realize faster access to deposited funds, as automated check processing allows institutions to rapidly post deposits. For banks, automation can reduce the frequency and cost of courier visits and eliminate empty envelope fraud. In addition, at busier branches, if a sufficient number of deposit transactions can be migrated from the teller to the ATM, the bank may be able to reduce teller headcount. Teller automation. Installing a cash recycler at a teller station, or between stations as a shared resource, allows tellers to focus more attention on serving customers instead of counting and sorting cash. Cash recyclers automatically verify note authenticity and fitness, sort by denomination and store cash securely at the point of transaction. The recyclers then use the same cash for withdrawals, reducing vault buys and maximizing tellers’ face time with customers. A regional bank in the northeastern United States recently installed cash recyclers in 47 branches. The recyclers have reduced cash transaction times by 37 percent, teller cash levels by 60 percent, and daily vault buys and sells by more than 50 percent. The bank has also reduced teller errors, counterfeit losses and cash orders. Teller pods. Whether resolving problems, opening an account or applying for a loan, certain customer needs are best served via face-to-face interactions. A modern branch design may encourage such interactions via teller pods. In place of traditional teller counters, these freestanding stations typically contain a cash recycler, teller capture device and a workstation, and can be staffed by either a teller or a universal associate. All of
the transactions are conducted using the recycler, which streamlines the associate’s operational duties and frees up time for them to engage with customers and discuss their financial needs. In-line teller stations. A twist on the teller pod model retains the traditional walk-up teller counter but includes an advanced-function device called an inline teller at each station. The in-line teller station provides functionality similar to that of an ATM, allowing customers to complete routine transactions and request assistance for other needs. Like teller pods, in-line teller stations enable tellers to focus on higher-impact interactions with customers. The teller can show the customer how to conduct a transaction using the self-service device, which can accelerate customer technology adoption. The in-line teller concept allows for more efficient staffing, as one teller can manage two or more stations. Remote teller systems. Banks looking to improve branch security and increase operational efficiency may replace traditional teller lines with Remote Teller Systems (RTS). A typical RTS station includes a pneumatic tube system, video monitor and telephone handset. Tellers situated in a secure area of the branch interact with customers via the monitor and phone. RTS stations limit cash exposure in the branch, while allowing for personal customer-teller interactions. Personal interaction at the ATM. Banks can also implement two-way video at the ATM. The technology lets ATM users connect with customer service representatives as needed to complete call-center-oriented interactions, such as increasing withdrawal limits. Customers can resolve issues immediately at the selfservice channel without having to wait to speak with a branch representative. Two-
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way video also allows banks to market services and leverage marketing campaigns. For example, the ATM can inform a customer that a CD is about to mature and offer to initiate a video session to renew or close the CD. Complete self-service environment. Surprisingly, some institutions have completely eliminated assisted transactions in certain parts of their footprint. This model relies heavily on consumers embracing self-service solutions. Relegating all routine transactions to the ATM allows banks to staff branches with associates having strong sales, advisory and relationship development skills. To succeed,
this model requires advanced self-service technology, including deposit automation and, potentially, cash recycling at the ATM. The future is here. Looking 10 years down the road, there’s little doubt branches will continue to evolve. We’re already seeing customers taking advantage of expanding self-service options. And banks are beginning to convert their branches to more sales-oriented environments. It’s only a matter of time before we won’t even recognize the branch of today. ■ Raja Bose, senior director of consumer transaction solutions, is responsible for leading Diebold’s efforts in assisting banks and credit unions in redefining
the role of their branches in the context of their overall distribution channel strategy. Bose helps banks identify solutions to drive branch efficiency, mitigate risks, improve the customer experience and improve sales effectiveness. Chris Gill, senior director, Diebold Consulting, is responsible for leading Diebold’s consulting business, which assists financial institution clients on topics related to branch transformation, channel optimization, efficiency improvement and customer experience. With more than 20 years of experience in retail banking and strategy consulting, Gill helps advise financial institutions on how to transform the branch customer experience while increasing operational efficiencies. For more information, visit www.diebold.com/branchtransformation.
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Spring 2013 New Jersey Banker
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Feature
Managing the Security Equation By Barry Thompson
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hirty years ago, our losses occurred at the teller line, with bad checks; or occasionally we’d take losses from shortchange scam artists or an account holder experiencing financial difficulties. Today, however, checks are a major source of losses: con artists, gangs, and organized crime have learned to use computers to produce some of the best counterfeit checks we’ve ever seen. Using schemes such as social engineering, they’ve turned our account holders against us. We’re now taking losses from lottery scams and work-from-home scams; and soon all financial institutions will be familiar with the newest “computer virus.” And if that’s not bad enough, telephone, cell phone and Internet attacks have now become coordinated in a method known as “vishing.” In a coordinated vishing attack, our account holders receive emails, text messages and telephone calls informing them that their accounts have been frozen, suspended or closed for a variety of reasons. After contacting the criminals, the account holder is talked into divulging social security numbers, account numbers, PINs and
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passwords that are later used by criminals to compromise the financial institution. So who’s behind these sophisticated methods that weren’t even considered possible 30 years ago? Organized crime from Asia, Eastern European countries, Russia and even gangs are developing the techniques used to defraud our financial institutions. A report in Canada for the Royal Canadian Mounted Police exposed the fact that criminals are actually retaining experts in our field to assist them in designing attacks against financial institutions! It seems logical to assume that as financial attacks against institutions change, so should the methods we use to prevent or combat them. But if financial institutions continue to fight fraud with the silo approach, losses will be astronomical. Traditionally, financial institutions have fought fraud only in the departments where it occurred – a silo mentality in combating crime. Often, the security officer is viewed simply as the “cops and robbers person” or the “bad check collection department,” and
it’s in these sorts of financial institutions that we find people who protect their turf and refuse to discuss the losses they’re taking with staff from other departments. This results in the financial institution having no one person in the best position to oversee fraud losses, coordinate defenses, and communicate with account holders. These walls and barriers will have to be torn down if we’re going to defend institutions from coordinated attacks like vishing. The first step for financial institutions is to create a risk management committee with representation from all departments, including marketing. The goal here is to decide how the institution will respond to an attack via several different channels at the same time. The institution will have to know how to respond to account holders immediately, explaining what is happening, in order to avoid taking losses, losing accounts, or receiving bad press coverage. The second step is to use marketing and security to educate account holders – and the public at large – about the various threats we’re facing. (In conducting evening programs for the public, I’ve been amazed at the naïveté of the attendees.) The public has little or no understanding of the type of attacks being used to take their money, partly because schools have reduced or eliminated Intro to Business classes that once taught awareness of scams and schemes. In the future, community programs need to become a major source of education for financial institutions. This, combined with aggressive marketing campaigns stressing security and safety for your financial institution, will help you avoid – or at least reduce – future fraud losses. ■ Barry Thompson, CRCM, is managing partner of Thompson Consulting Group, LLC, a firm specializing in physical risk assessments, security management and financial institution training programs. He can be reached at 315-342-5931 or Barry@Bankmentor.com. For more information, visit www.TgroupOnline.com.
Spring 2013
Feature
Health Care Reform in 2013 By John Lawrence
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or employers and insurers alike, 2013 is a pivotal year for implementation of the Affordable Care Act (ACA), the nation’s most sweeping set of health care reforms since the adoption of Medicare in the 1960s. With the reelection of President Barack Obama in November 2012, lingering doubts about the law’s John Lawrence survival were largely put to rest. Efforts already underway to ensure compliance with the law are now ramping up as employers and insurers work to meet new requirements in 2013 and prepare for significant changes just around the corner in 2014.
THE JOURNEY CONTINUES IN 2013 A number of changes have been implemented already since 2010, chiefly affecting benefits requirements. For example, health plans offering dependent coverage must offer coverage to all dependent children up to age 26. Employers now face various new administrative requirements, such as having to record the aggregate cost of health benefits on each employee’s W-2 form and having to distribute, with insurers, a summary of benefits and coverage document. Some of the changes under the law are phasing in. For example annual dollar limits on essential health benefits will be prohibited beginning in 2014. But, in advance of the prohibition, the ACA caps those limits. The minimum cap on annual limits rises from $1.25 million in 2012 to $2 million in 2013. In addition, starting in 2010, ACA also eliminated lifetime dollar limits on essential health benefits. Among other changes taking place in 2013 is a new requirement that employers notify employees about the availability of health insurance exchanges beginning
in 2014 and how to access information regarding premium subsidies available for coverage in the exchange. Also in 2013, employers will no longer qualify for a tax exemption for expenses related to maintaining prescription drug plans for Medicare Part D-eligible retirees. Consumers in 2013 are limited in the amount they can contribute to an FSA for medical expenses – $2,500 for the year.
HEALTH CARE EXCHANGES AND UNIVERSAL COVERAGE The most sweeping changes impacting individual consumers and employers alike take place in 2014. The health insurance marketplace for individuals and small businesses is being transformed, as consumers will be required to have health care coverage. Starting on Oct. 1, 2013, individual consumers and small group employers can begin shopping and enrolling on the federal and state-based exchanges for coverage effective Jan. 1, 2014. Individuals who meet certain income-based criteria may be eligible for premium tax credits and costsharing subsidies. Recently, the state of New Jersey chose not to set up its own exchange or a partnership exchange, so the federal government will operate the exchange here for state residents. At the same time, many states will opt to widen their eligibility requirements for Medicaid coverage, with the expanded coverage largely paid for with ACA funding. Among the many new requirements faced by insurers and employers in 2014 is guaranteed issue, which means that no consumer can be denied coverage for a preexisting condition. Insurers and self-funded plans also will pay new fees and taxes to help fund exchange subsidies; employers with 50 or more employees could face a new penalty if they fail to provide affordable, minimum essential coverage to their full-time workers, defined as working more than 30 hours a week.
In addition, individual and small group health insurance coverage must meet new essential health benefits requirements in 2014, which in many cases will mean that small employers and individuals no longer will have access to less costly, limited benefits plans.
IMPACT ON COSTS The changes taking place across the health care landscape will result in many more Americans getting access to health care coverage. The law, however, is expected to add to the health care coverage cost burden already shouldered by consumers and employers as a result of medical cost trend. In particular, new minimum benefit requirements, the application of new taxes and fees, and new rating rules are likely to push insurance premiums up at a faster rate. Aetna has been and will continue to recommend changes to federal regulators that will help soften the projected cost impact. Regardless of whether the rules and regulations are modified, Aetna has made compliance with the law a top business priority and stands ready to help its customers understand and adapt to the changes required. ■ John Lawrence is president of Aetna’s New Jersey market. Additional resources on health care reform are available at www.aetna.com/health-reformconnection.
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Bank Notes
Tracy Tripucka
Janet Bossi
Matthew K. Harding
TD BANK TD Bank and the Arbor Day Foundation launched TD Green Streets, a new grant program that will offer 10, $20,000 grants in support of innovative urban forestry initiatives in underserved communities. Funding will support the purchase of trees, tree planting and maintenance, and educational activities. As part of the program, TD has committed to reducing its paper usage by 20 percent by 2015. TD Forests includes urban tree programs such as TD Green Streets and TD Tree Days – TD’s flagship employee volunteer program.
LIBERTY BELL BANK Liberty Bell Bank is lending a hand to Teal Talk On Tour (TTOT) in its ongoing mission of educating the people of Southern New Jersey about the signs and symptoms of ovarian cancer. The bank is providing TTOT with a portion of the header in their 5,000-plus monthly statements to post the group’s awareness message and direct them to the TTOT website for more information on ovarian health. Teal Talk On Tour offered a special thanks to Sil Milelli, senior vice president at Liberty Bell, for her vision and compassion.
CLIFTON SAVINGS BANK Tracy Tripucka has joined Clifton Savings Bank as senior vice president of commercial lending. He has more than 25 years of New Jersey bank management experience, including 15 years at the VP level. In his new role, Tripucka will be responsible for expanding and enhancing the bank’s smalland medium-sized business lending as well as its related small business deposit and banking services. This includes real estate secured commercial loans for multi-family properties; office, retail, mixed-use, medical and other professional buildings; small strip shopping centers; and small warehouses. Before joining Clifton Savings Bank, he served as senior vice
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Ira Robbins
Steven M. Klein
Robert A. Vandenbergh
president and senior credit officer at Crown Bank in Elizabeth; prior to this, he spent over 10 years with Kearny Federal in Fairfield, where he was second vice president and director of commercial loans. Tripucka also has held VP positions at Allegiance Community Bank in South Orange and Summit Bank in Cranford. He earned a bachelor’s degree from Lafayette College in Easton, PA.
OCEAN CITY HOME BANK Janet Bossi has been promoted to executive vice president. In her new position, Bossi will oversee the bank’s residential lending, commercial lending, information technology, operations and customer care center departments. Bossi has 28 years of experience in lending, including 20 years at Ocean City Home Bank. A graduate of the Risk Management Association’s Commercial Lending School and the American Bankers Association’s National School of Banking and Senior Leadership Program, she is a member of the American Bankers Association’s Mortgage Markets and Technology Committee in Washington, DC.
GLEN ROCK SAVINGS BANK Malcom W. Greenough, Anthony Monterisi, H. Carleton Clinch and Dennis R. Robinson have been appointed to the board of directors. Greenough has been named chairman of the board. He has been a member of the bank’s board of directors since 1999. Greenough is a registered investment advisor, and resides in HoHoKus. Monterisi has been named vice chairman. He has been a member of the bank’s board of directors since 2004. Montesiri is a CPA, and resides in Midland Park, NJ. Clinch has been elected to the board. He is an attorney, and resides in Ridgewood, NJ. Robinson is COO of Port Imperial Racing Associates, LLC, and resides in Ridgewood.
Richard K. Ahlmeyer
Bruce Haines
THE PROVIDENT BANK Matthew K. Harding has been appointed to the boards of directors for the bank and holding company. He is the president and COO and member of the board of directors of Levin Management Corporation – a leading retail real estate services firm – and has served in that capacity since 2001. Previously, Harding served as the firm’s senior vice president and deputy COO for five years. He has more than 25 years of real estate industry experience. He is a graduate of Hamilton College with a bachelor’s degree in economics and is a certified commercial investment member.
VALLEY NATIONAL BANK Ira Robbins has been promoted to executive vice president and treasurer. Robbins joined Valley National Bank in 1996 as part of the bank’s management associate program. He is currently responsible for asset and liability management, debt and capital management, liquidity management, strategic planning, budgeting and derivative management. Robbins also participates in corporate development initiatives and oversees the management of the bank’s payroll department. He received a bachelor’s degree from Susquehanna University and received his MBA from Pace University. Robbins is also a graduate of the Stonier Graduate School of Banking. He is a CPA in New Jersey and a member of the New Jersey Society of Certified Public Accountants and the American Institute of Public Accountants.
NORTHFIELD BANCORP, INC. Steven M. Klein has been promoted to president of Northfield Bancorp, Inc. In this new role, Klein will have overall responsibility for planning, organizing, and controlling the day-to-day activities of the company and the bank. Klein joined Northfield as CFO in 2005, and was also named COO in 2011. He will relinquish his role as CFO in connection
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with this appointment. Previously, Klein was an audit partner with KPMG LLP, serving the community banking practices of New Jersey and Philadelphia. He earned a bachelor’s degree from Montclair State University. Klein is a CPA and member of the American Institute of Certified Public Accountants and the New Jersey Society of Certified Public Accountants. Klein is a member and serves on various committees of the New Jersey Bankers Association and the American Bankers Association.
LAKELAND BANK Robert A. Vandenbergh has been appointed president and COO of Lakeland Bank. He began his banking career with Midlantic Bank/North and joined Lakeland Bank in 1998 through the merger with the National Bank of Sussex County, where he was that bank’s president. Vandenbergh has served as senior executive vice president and COO of Lakeland Bancorp and Lakeland Bank since 2008.
as a credit analyst and commercial loan officer. He also served as a treasury management sales officer at JPMorgan Chase Bank and has 22 years of correspondent banking experience. Ahlmeyer served as a team leader with National Westminster Bank USA and as a director at Wachovia Bank/ Wells Fargo within the Financial Institutions Group, where he was responsible for identifying new business opportunities, developing business proposals, and growing meaningful correspondent relationships. Ahlmeyer earned a bachelor’s degree from East Stroudsburg University.
GCF BANK Bruce Haines has been named acting president and CEO of GCF Bank. Previously senior vice president and CLO, he is a finance and administrative executive with over 39 years experience as a commercial banker. Prior to his tenure with GCF, Haines served as executive vice president of Equity Bank in Marlton, NJ. At Equity, he was chief credit officer and senior lender. Haines is a graduate of Temple University’s School of Business with an MBA in finance. He also received a bachelor’s degree from Lafayette College in Easton, PA.
HVC BANK Ted Bessler brings 50 years of banking experience in the Shore area to his new position as senior vice president and commercial loan officer in the Hopewell Valley Community Bank’s (HVCBank) Toms River loan office. From 2009-2011, Bessler was president of Crown Bank. He spent the preceding 10 years in Toms River, as president and CEO of that town’s Shore Community Bank. Bessler spent 22 years with Garden State Bank, based in Jackson Township. A past chairman of the New Jersey Bankers Association, Community Bankers Association of New Jersey, and the Ocean County Bankers Association, Bessler also has served on the Federal Reserve Bank’s Community Advisory Board in Philadelphia, PA, and vice chairman of the New Jersey Health Care Facilities Finance Authority.
M&T BANK Richard K. Ahlmeyer has joined M&T Bank as vice president and senior relationship manager. He is a member of the financial institution team based out of M&T’s Saddle Brook, New Jersey office. Ahlmeyer manages the bank’s correspondent relationships in New Jersey, eastern Pennsylvania and Delaware. He brings 30 years of financial institution experience to M&T Bank. His career began at National Community Bank of NJ as an assistant branch manager. Ahlmeyer completed a commercial credit training program at Midlantic National Bank, which led to a career
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Executives from Provident Bank and RBH Group recently hosted an event at the Newark Club to celebrate a new endeavor to bring a new Provident branch to Teachers Village in Newark, a nearly $150-million mixed-use development that will rise along four blocks of Halsey Street, between the Prudential Center and University Heights. Provident’s new branch will be the bank’s second location in Newark. The new branch is tentatively scheduled to open in September 2013 and will be located on the corner of Halsey Street and Maiden Lane. RBH Group is the lead developer of the Teachers Village project. Pictured at the event in Newark are (from left): George Jacobs, Jacobs Enterprises, Inc.; Ron Beit, RBH Group; Chris Martin, Provident Bank; and Christian Benedetto, Jr., Hopkins Sampson & Brown Real Estate Advisory Services, LLC.
Franklin Township Mayor Brian D. Levine and the Franklin Township Chamber of Commerce joined Unity Bank for a ribbon-cutting ceremony welcoming the bank’s new full-service branch in the Somerset section of the township, its second Somerset County branch and 15th overall. Joining Levine is James Hughes, president and CEO of Unity Bank, Leon Hughes, and Peter Stavrianidis, respectively the president and vice president of the Franklin Township Chamber of Commerce.
Atlantic Stewardship Bank held an educational program for women entitled “Take Control of Your Finances” at its Midland Park headquarters. Atlantic Stewardship Bank plans to continue its educational program for women with additional presentations in 2013. Pictured: Judy Keyes, training officer, Atlantic Stewardship Bank (left), and Regina Poznansky, senior counselor and trainer, Consumer Credit Counseling Service of New Jersey, Inc.
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Photo courtesy of Vincent Amesse, Amesse Photography
Bank Shots
Northfield Bank continued to demonstrate its commitment to the community during the Union office ribbon-cutting ceremony by making donations to the YMCA of the Eastern Union County, the Boys and Girls Clubs of Union County and the Community FoodBank of New Jersey. Representatives of these three charities join Northfield Bank employees and local officials to cut the ribbon for the opening of the Union office.
New Jersey Bankers Education Foundation trustees presented a $5,000 check to the Department of Veteran & Military Services & Programs-Rutgers University to assist veteran students facing temporary financial hurdles while continuing their education at Rutgers. From left to right, John E. McWeeney, Jr., president and CEO, NJBankers; Stewart E. McClure, Jr., president and CEO, Somerset Hills Bank; Christopher Martin, chairman, president and CEO, The Provident Bank; Frank Kissel, chairman, Peapack-Gladstone Bank; Thomas Holt, senior vice president, Bank of America; Kevin Cummings, president and CEO, Investors Bank; James Meredith, executive vice president and COO, NJBankers; and Robert Stillwell, president and CEO, Boiling Springs Savings Bank, present the check to Stephen G. Abel, director of the Department of Veteran & Military Programs & ServicesRutgers University; Robert Bright, assistant director of Veteran & Military Programs & ServicesRutgers University; and Will Madigan, Army veteran and president, New Brunswick Student Veteran Organization-Rutgers University.
Boiling Springs Savings Bank celebrated the opening of its 18th “home of better banking” in Glen Ridge at its “Getting to Know You” event. Pictured at the ribbon-cutting ceremony, from left to right: Robert E. Stillwell, president and CEO, Boiling Springs Savings Bank; Ken Grimbilas, chairman, Boiling Springs Savings Bank; Daniel Fragale, branch manager of the Boiling Springs Savings Bank Glen Ridge office, Arthur Dawson, Glen Ridge councilman; Peter Hughes, mayor, Glen Ridge; Michael Rohal, Glen Ridge borough administrator; and Camilla De Iudicibus, assistant branch manager of the Boiling Springs Savings Bank Glen Ridge office.
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Capital One Bank and Junior Achievement of New Jersey announced the grand opening of the new Capital One/Junior Achievement Finance Park mobile learning center in Newark. There to celebrate the opening were, from left: Douglas Schoenberger, vice president of corporate responsibility and public policy, Verizon; Catherine Milone, president, Junior Achievement of New Jersey; Ed Montesdeoca, senior vice president, region executive, Capital One Bank; Cory Booker, mayor of Newark; and John E. McWeeney, Jr., president and CEO, New Jersey Bankers Association.
On Dec. 19, 2012, New Jersey’s First Lady, Mary Pat Christie, hosted a thank-you fundraising event at Drumthwacket for those who donated to the Hurricane Sandy Relief Fund. At the event, the Community Bankers Association of New Jersey made a $10,000 donation to the relief fund. In attendance and pictured with Christie are: Peter Kenny, president and CEO, Heritage Community Bank, and president, Community Bankers Association; William D. Moss, president and CEO, Two River Community Bank, and vice president, the Community Bankers Association; and Paul E. Fitzgerald, vice chairman, First Bank, and past president, Community Bankers Association.
Haven Savings Bank donated $250,000 to the Rebuild Hoboken Relief Fund (RHRF), a non-profit organization formed to help the city recover from the devastating damage caused by Superstorm Sandy. The sum represented more than one-third of the total funds collected thus far by the sevenweek-old charitable organization. Pictured from left to right: Larry Henriques, vice chair, RHRF; John H. Wessling, III,ERM president, Savings Bank; Dawn Zimmer, of Hoboken;2:59 and former New Half Haven Page-7.25x4.75-OR.pdf 2 mayor 11/27/12 PM Jersey State Sen. Bernard Kenny, chair, RHRF.
Christensen Tamburri Communications (CTC) was the recipient of two JASPER Awards at the 38th Annual JASPER Awards Dinner, held at the PNC Bank Arts Center. The JASPER Awards are issued by the Jersey Shore Public Relations & Advertising Association and honor excellence in communications. CTC won a gold award in the direct mail campaign category, and also received a silver award in the special purpose print material category for a brochure created for the New Jersey Bankers Association.
Spring 2013 New Jersey Banker
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Upcoming Events April 3, 2013
April 30, 2013
The Palace at Somerset Park, Somerset
Crowne Plaza Monroe, Monroe Township
April 10, 2013
May 15-19, 2013
Renaissance Woodbridge Hotel, Iselin
The Breakers, Palm Beach, FL
3rd Annual Women in Banking Conference
August 12, 2013
Operations & Technology Seminar
Annual Summer Golf Outing and Networking Reception Fiddler’s Elbow Country Club, Bedminster Township
Bank Security Workshop
109th Annual Conference
September 25-27, 2013
Annual Senior Management Conference
Revel, Atlantic City April 12, 2013
June 6, 2013
October 9-10, 2013
Crowne Plaza Monroe, Monroe Township
Crowne Plaza Monroe, Monroe Township
Mayflower Hotel, Washington, DC
April 15-17, 2013
June 10, 2013
October 17-18, 2013
Renaissance Washington, Washington, DC
Mercer Oaks Golf Course, West Windsor
Caesars Resort, Atlantic City
April 19, 2013
June 18, 2013
January 10, 2014
Stony Hill Inn, Hackensack
Crowne Plaza Monroe, Monroe Township
The Palace at Somerset Park, Somerset
April 26, 2013
June 19 - 21, 2013
April 30 – May 4, 2014
Crowne Plaza Monroe, Monroe Township
Marco Island Marriot, Marco Island, FL
1st Annual G.R.O.W.T.H. Executive Conference
ABA Government Relations Summit
Accounting & Tax Seminar with FMS- NJ/NJ
25th Annual Annamae Baerenbach Memorial Lending Conference
Annual Marketing Conference
Washington DC Regulatory Visit
6th Annual Golf Outing to Benefit Financial Literacy
Tools for a Compliance Officer – Phase III
Annual Human Resources Conference
Economic Leadership Forum
Compliance University
110th Annual Conference
Renaissance Woodbridge Hotel, Iselin
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©2013 PULSE
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