New Jersey Banker Summer 2011

New

Jersey

S U MMEr 2 0 1 1

B A N K E R

Mobile Banking’s TIME has come

Are You Managing Environmental Risk? | Community Service Awards | Schuyler Savings Bank E n d o r s e d b y t h e Ne w J e r s e y B a n k e r s A s s o c i a t i o n

Consolidate your IT Services and improve your bottom line.

One company…

One contract…

One set of service standards…

Contact Maintech today to learn how we can optimize your IT Services needs, while lowering your operating costs. Maintech’s wealth of service offerings can bolster your efficiency and deliver a true value to your company.

•

•

•

•

Data Center Services: Your Single Source, Vendor Neutral services program delivered with unified performance.

Maintech’s neutrality allows us to support a wide range of hardware.

Managed Services: Build the customized monitoring, administration and maintenance program for your enterprise that you’ve always wanted. Maintech can make it happen.

Desktop Services: All the desktops, laptops, PDAs, mobile devices, etc. can be overwhelming to maintain. Maintech offers solutions for managing them all.

Hardware Maintenance: In or out of warranty, your hardware maintenance is in great hands with our network of field representatives. Emergencies? No problem.

Maintech. Servicing IT since IT first needed servicing.

www.maintech.com © Maintech 2010

1.800.426.TECH

New

New Jersey Bankers Association www.njbankers.com 411 North Avenue East Cranford, NJ 07016-2436 Phone: 908-272-8500 Fax: 908-272-6626

Jersey B A N K E R

NJBankers Board of Directors Robert C. Ahrens President/Chief Executive Officer GCF Bank

Peter A. Dontas Market Executive Bank of America

Peter M. Brown President/Chief Executive Officer Manasquan Savings Bank

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

Walter Celuch President/Chief Executive Officer Clifton Savings Bank

Stanley J. Koreyva, Jr. Chief Operating Officer/ Executive Vice President Amboy Bank

Joseph Coccaro President/Chief Executive Officer Bogota Savings Bank Joseph F. Dempsey, Jr. President – NJ Middle Market Banking JPMorgan Chase Bank, N.A.

Timothy M. Warren Chairman

Timothy M. Warren Jr. CEO & Publisher

David B. Lovins President

Vincent Michael Valvo Group Publisher & Editor in Chief

Jeffrey E. Lewis Controller & Director of Operations

George Chateauneuf Publishing Division Sales Manager

Sarah Cunningham Director of Events

Cara Inocencio Advertising Account Manager

Richard Ofsthun Advertising Account Manager

Emily Torres Advertising, Marketing & Events Coordinator

Christina P. O’Neill Custom Publications Editor

Gerald H. Lipkin Chairman/President/Chief Executive Officer Valley National Bank Christopher Martin Chairman/President/Chief Executive Officer The Provident Bank

Anthony Labozzetta President/Chief Executive Officer SussexBank

The Warren Group Staff

John Bottini Creative Director

Margaret Lanning Senior Vice President, Senior Regional Credit Officer-Northeast Region Wells Fargo Bank, NA

Scott Ellison Senior Graphic Designer Ellie Aliabadi Graphic Designer

Cassidy Norton Murphy Associate Editor

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.

Stewart E. McClure, Jr. President/Chief Executive Officer Somerset Hills Bank

Mortimer J. O’Shea President/Chief Executive Officer Hilltop Community Bank Gerald L. Reeves President/Chief Executive Officer Sturdy Savings Bank Michael Schutzer President/Chief Executive Officer Harmony Bank Robert E. Stillwell President/Chief Executive Officer Boiling Springs Savings Bank

William D. Moss President/Chief Executive Officer Two River Community Bank

NJBankers Officers Frank A. Kissel Chairman Chairman/Chief Executive Officer Peapack-Gladstone Bank Kevin Cummings First Vice Chairman President/Chief Executive Officer Investors Savings Bank Robert H. King Second Vice Chairman Senior Vice President Roma Bank John E. McWeeney, Jr. President and CEO New Jersey Bankers Association

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

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

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

Candida Johnson Assistant Vice President/ Assistant to the COO ext. 615 cjohnson@njbankers.com

Emily T. DeMasi Vice President and Director of Communications ext. 610 edemasi@njbankers.com

Paula H. Cassidy Assistant to the Director of Communications ext. 604 pcassidy@njbankers.com

Wendy C. Mandelbaum Controller ext. 603 wmandelbaum@njbankers.com

Cynthia M. Zaccaro Assistant to the Director of Education ext. 632 czaccaro@njbankers.com

Jenn Zorn Vice President and Director of Education ext. 611 jzorn@njbankers.com

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

Contributing Editor Emily T. DeMasi

Summer 2011

New Jersey Banker

3

Table of Contents

New

Jersey B A N K E R

Departments

6

Chairman’s Platform Seeking Opportunities for NJ Bankers

8

From the President's Office Plotting Our Course

10

Politics & Policy Advocating for the Industry

13

New Members

20 Cover Story

Mobile Banking’s TIME has come

13 Upcoming Events

34 Bank Notes 38 Bank Shots

Features

14

Directors' Corner Great Bank Boards Start With the Right Directors

15

News NJBankers Community Service Awards

16

Feature Main Street, We Have a Problem

18

Feature The Big Questions

22

Feature First Annual Women in Banking Conference Encourages Knowledge, Leadership and Mentorship

4

New Jersey Banker

24

Meet Our Endorsed Service Providers Pentegra: Providing Retirement Plans for Community Banks

25

Purchasing Assistant: Helping Your Bank to be More Profitable

26

Feature Challenges and Regulatory Expectations for Your ALLL

28

Annual Conference Meet the 2011 – 2012 New Jersey Bankers Association Officers and Board of Directors

30

Behind the Teller Line Schuyler Savings Bank

31

Feature How Well Are You Managing Your Environmental Risk?

32

Feature Directors and Managing Officers Conference a Rousing Success

Editor’s note: The views that are expressed in articles that have been submitted are not necessarily the views of NJBankers.

Summer 2011

Extinction happens. Fortunately, so does evolution.

We’ll help you evolve to deposit automation.

rex T.

d Do

o

d bir

a Ab

cu

s

65 million B.C.

e Typ

wr

i

ter

s po de e M p AT velo n e

it

Today

Diebold will make the transition so smooth you’ll barely notice. Which is what you’d expect from the company that pioneered deposit automation 20 years ago.

Here are a few other things you can expect from Diebold: industry-leading ATM uptime, unsurpassed processing speed, the broadest range of technology options and the best integrated security features in the industry. And every Diebold deposit automation solution is designed to evolve along with your business.

Because evolution is so much better than the alternative. For more information, email requests@diebold.com or call 1-800-806-6827. diebold.com/evolve

Chairman’s Platform

Seeking Opportunities for NJ Bankers

By Frank A. Kissel

I

t is my pleasure to welcome you to the summer issue of New Jersey Banker.

I had the honor to be a part of the NJBankers 2011 Annual Conference at the Fairmont Turnberry Isle and was installed as chairman of the Association. I could not be more proud to serve the members of this outstanding organization.

The great Frank A. Kissel philosopher, Chairman NJBankers scientist and lawyer Chairman/CEO Francis Bacon once Peapack-Gladstone Bank said, “A wise man will make more opportunities than he finds.”

I find this quote particularly motivating, since the Annual Conference theme was

“Opportunities in the New Decade.” Those attending listened to several presentations on just where those opportunities may be found or made.

There is no doubt that tough economic times are still with us. It seems that like Bacon, bankers have to be philosophers, scientists and lawyers, as we continue to make our financial institutions successful and position ourselves to serve the needs of consumers and businesses in our great Garden State.

We are philosophers when we think about where we are and what is to come.

Like philosophers we face many questions and we strive to find the answers that will make our institutions successful. The Annual Conference helped to guide and plot a possible course as we look to create opportunities.

Like scientists, we take our observations and distill the data making conclusions as to how it can best fit our institutions and the customers we serve. Though many services we offer may seem the same, our journeys are very different. Opportunities for one institution may not be the same for another, but then again, that was always true. That is where the philosophical thinking comes in!

Like lawyers, we pore over new regulations designed to better banking. But didn’t New Jersey banks always offer “better banking” for customers? Like lawyers defending our innocence, we tell our story to the press, the regulators and customers: “Traditional banks did not cause the economic crisis. We are willing, however, to be the solution that stimulates healing and growth.” We educate continued on page 13

Unparalleled experience

serving New Jersey financial institutions Stifel, Nicolaus & Company, Incorporated has been serving banks and thrifts for over 40 years.

Since 2000: • Managed or Co-Managed 489 Public and Private Offerings, raising $59.2 billion in capital • Managed 49 Mutual-to-Stock Conversion Offerings, raising $13.7 billion in capital • Advised in 221 Financial Advisory Transactions, totaling $14.8 billion • Of these transactions, approximately 30% were for Mid-Atlantic-based companies Over 220 Financial Service Companies under research coverage, 67 of which reside in the Mid-Atlantic Region Large retail and institutional sales distribution channel

We have defined the Mid-Atlantic region to include: Delaware, Maryland, New Jersey, New York, and Pennsylvania.

The information presented includes transactions effected and matters conducted by Stifel Nicolaus Investment Banking, the Capital Markets Division of Legg Mason Wood Walker, Inc. (acquired on December 1, 2005), Ryan Beck & Co., Inc. (acquired on February 28, 2007), Thomas Weisel Partners LLC (acquired on July 1, 2010), and their respective affiliates. Stifel, Nicolaus & Company, Incorporated and Thomas Weisel Partners LLC are affiliated broker-dealer subsidiaries of Stifel Financial Corp. which are collectively referred to herein under the marketing name Stifel Nicolaus Weisel.

6

New Jersey Banker

Senior Executive Involvement For more information, contact: Rick E. Maples, Head of Investment Banking (314) 342-2038 • maplesr@stifel.com

Ben A. Plotkin, Executive Vice President, Vice Chairman (973) 549-4025 • ben.plotkin@stifel.com

Michael F. Barry, Managing Director (212) 847-6458 • barrym@stifel.com

Mark B. Cohen, Managing Director (212) 847-6438 • mark.cohen@stifel.com

David P. Lazar, Managing Director (215) 861-7179 • david.lazar@stifel.com

Robin P. Suskind, Managing Director (973) 549-4036 • robin.suskind@stifel.com

member sipc and nyse | www.stifel.com

Summer 2011

Does your current insurance company see your bank as less sophisticated than it is?

No matter what size bank you are, Travelers will never treat you like a second-class citizen.

For more than 110 years, our local presence and industry-leading underwriters have combined to offer a comprehensive suite of coverages designed to fit each client’s needs perfectly.

Contact your independent agent today to learn more about our Travelers SelectOneŽ for Community Banks, and stop being treated like you are just another mouth at the trough. Š2011 The Travelers Indemnity Company. All rights reserved. The Travelers Indemnity Company and its property casualty affiliates. One Tower Square, Hartford, CT 06183

travelers.com

From the President’s Office

Plotting Our Course

By John E. McWeeney, Jr.

F

resh off of a very successful 107th Annual Conference, NJBankers heads into summer and our new fiscal year with positive momentum and a new threeyear strategic plan.

As the banking industry continues to change, so too must NJBankers in order to serve our members and add value.

The board of John E. McWeeney, Jr. directors approved President/CEO the new strategic NJBankers plan at its May meeting. The strategic planning process took place over three months and was facilitated

by The Kafafian Group, an associate member. The process included TICIC and BCG and involved more than 20 one-onone meetings with officers, directors, bank members, associate members and staff. We also held an off-site planning session with both bankers and staff to review the results of the interviews and use that feedback to plot the organization’s course for the future.

So what did we learn from the process?

• Member advocacy at the state and national level is the foundation of our mission.

• Promoting the New Jersey banking industry and being recognized as the voice for New Jersey banks is critical to our advocacy mission.

• Member engagement, creating stronger

member loyalty and enlisting more bank and associate members is key to our success.

• Education, training and development and networking opportunities are important value propositions to members.

• NJBankers needs to be the source of information within a defined number of member driven subject matters.

• Other related services, such as BCG and TICIC, add to the value of membership.

While all of these findings are selfapparent, they reaffirmed, for both the board of directors and management, where NJBankers needs to focus as it moves forward. We also did a thorough analysis of NJBankers’ strengths, weaknesses, opportunities and threats. The final outcome is a strategic plan that will target five key objectives: • Further strengthen advocacy and promotion of the NJ banking industry • Improve member engagement and recruit non-member banks and associates • Enhance value-added services and increase non-dues revenue • Develop a management and board succession plan • Improve the operating efficiency of the organization

timelines that will help us achieve our strategic objectives over the next three years. We’ll keep our members posted on our progress as we move forward.

With the recent change in our by-laws, this past conference saw the changing of the guard for our officers and directors as a new slate was sworn in at the closing General Session. Our thanks and gratitude goes out to immediate former Chairman Gerry Lipkin and retiring board members, Norm Beatty, Steve Brady, Bob Davis, Don Mindiak and John Wessling for their dedicated service.

The true strength of any trade association is the active engagement of its members and NJBankers is fortunate to have members who get involved. I would like to personally thank Gerry Lipkin for all of his support and guidance during his year as chairman. I look forward to working with our new chairman, Frank Kissel, and our board of directors as we implement our new strategic plan.

Lastly, I’d like to recognize our outstanding team of professionals who staff NJBankers, TICIC and BCG. There’s no group in the industry that’s more passionate about serving their members. We can look to the future with confidence knowing that NJBankers is in good hands. n

Our management team has developed a very detailed list of both qualitative and quantitative goals with accompanying

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

BankHorizons will once again deliver to you a busy exhibit hall full of bank executives, management, and staff seeking the latest products, services, and strategies to keep their institutions moving forward. Join 80 of the banking industry’s leading exhibitors

Thursday, November 10, 2011, Atlantic City, NJ – Tropicana Resort

8

New Jersey Banker

and showcase your solutions while networking with more than 600 attendees from across the Mid-Atlantic region.

Summer 2011

AT THE END OF THE DAY, YOU WANT RESULTS. SO THAT’S HOW WE BEGIN EACH DAY. When our banking clients have questions, they need the right answer at the right time. So they need lawyers who combine deep legal experience with sound business sense. This is what motivates us to work harder, continually expanding our versatility and pushing the limits of our collective skills. At Riker Danzig, we understand that no matter how much success we have realized, what you're interested in are the results we get today.

MORRISTOWN, NJ 973.538.0800 TRENTON, NJ 609.396.2121 NEW YORK 212.302.6574 LONDON AFFILIATE +44 (0) 20.7877.3270 W W W.RIKER.COM

Politics & Policy

Advocating for the Industry

By Michael P. Affuso, Esq.

T

his spring, members of NJBankers attended the American Bankers Association’s Government Relations Summit.

Led by NJBankers President and CEO John E. McWeeney, Jr., and Chairman Gerry Lipkin, more than 30 members attended the meeting, joining more than 700 of our brethren from across the country.

The ABA-sponsored summit is an annual event in which NJBankers members are able to meet with Michael P. Affuso our federal legislators Senior Vice President/ Director of Government Relations and regulators.

NJBankers The summit began with an address from ABA Chairman Steve Wilson.

Wilson, chairman and CEO of LCNB National Bank in Lebanon, Ohio, discussed the ABA’s Proud to Be a Banker campaign, which is based on the job-creating loans and the strong, positive leadership bankers provide in their communities. Wilson was followed by three of the conference’s speakers: ABA President and CEO Frank Keating, Sen. Chris Coons (D-DE) and House Majority Leader Eric Cantor (R-VA).

“It is important for bankers to educate both congressional Republicans and Democrats to help them understand the unintended consequences of the Federal Reserve’s proposed debit-card interchange rule,” Coons said. He explained that meetings he held in the past few weeks with representatives of banks and credit unions, along with consumer advocates, convinced him to become a cosponsor. “Across all of those conversations they persuaded me that [interchange was] one of many aspects of Dodd-Frank that was passed in haste and without a clear perception as to what its consequences would be for consumers, for merchants, for communities and, in particular, for banks,” Coons said.

Cantor assured bankers that he staunchly

10 New Jersey Banker

NJBankers stormed Capitol Hill during the ABA’s Government Relations Summit. From left to right: Gordon Ur, president and CEO, TICIC; Robert Ahrens, president and CEO, GCF Bank; James Meredith, executive vice president and COO, NJBankers; Rep. Frank LoBiondo (R); Robert Dorsey, president and CEO, Audubon Savings Bank; and Timothy Hand, executive vice president and COO, GCF Bank.

Several members joined NJBankers at the Government Relations Summit to discuss issues ranging from the difficulties with Dodd-Frank implementation to changes to interchange rules. From left to right: Joseph Dempsey, Jr., president, NJ Middle Market Banking, JPMorgan Chase Bank; Richard Ahlmeyer, vice president, Wells Fargo Correspondent Banking; Jose Guerrero, chairman, president and CEO, Spencer Savings Bank; Gerald Lipkin, chairman, president and CEO, Valley National Bank; Sen. Robert Menendez (D); John McWeeney, Jr., president and CEO, NJBankers; Alfred DelliBovi, president and CEO, Federal Home Loan Bank of NY; and Eric Amig, senior vice president, Federal Home Loan Bank of NY.

opposes the Federal Reserve’s interchange proposal, as he believes it is “price-fixing.”

“I asked the other side, ‘How would you like it for the government to come in and tell you what to sell your services … for?’” Cantor said. He explained, however, that for House Republicans to take action on the issue, they first must see positive legislative momentum in the Senate to stop the interchange proposal.

He also cited the Dodd-Frank Act’s Consumer Financial Protection Bureau as an example of too much government bureaucracy. The CFPB “will just add to layers of regulation and will end up increasing the cost of credit for those who we’re trying to help,” Cantor said.

Acting Comptroller of the Currency John Walsh and Office of Thrift Supervision Acting Director John Bowman also spoke.

Bankers also visited Capitol Hill to discuss the crushing regulatory burden under which their banks are operating, with interchange as

a top priority. Our members also discussed, among other things, credit unions’ efforts to raise their business-lending cap and the Security and Exchange Commission’s municipal advisers proposal.

FDIC Chairman Sheila Bair’s comments on the final day of the summit led to a storm of news reports and recriminations. The biggest long-term threat to the banking industry would be its failure to support the reforms needed to ensure the long-term stability of financial markets and the economy, Bair told bankers.

“As this historical era unfolds, public opinion as to the role played by the banking industry seems unlikely to be neutral,” she said. “It is far more likely that banks will come to be viewed either as a group that supported the restoration of free enterprise and public continued on page 12

Summer 2011

Politics & Policy continued from page 10

Speaking with Rep. Robert Andrews (D) are, from left to right: Timothy Hand, executive vice president and COO, GCF Bank; James Meredith, executive vice president and COO, NJBankers; Gordon Ur, president and CEO, TICIC; Robert Ahrens, president and CEO, GCF Bank; and Andrews.

Members from GCF Bank joined NJBankers to meet with Rep. Jon Runyan (R), a former professional football player, during the Government Relations Summit. From left to right: James Meredith, executive vice president and COO, NJBankers; Timothy Hand, executive vice president and COO, GCF Bank; Runyon; Robert Ahrens, president and CEO GCF Bank; and Gordon Ur, president and CEO, TICIC.

responsibility in the American economy, or as a group that mainly looked out for its own short-term interests and resisted reforms that could have restored a sense of confidence and fairness in our financial markets.”

Clearly, when it comes to advocacy on federal issues, there is great opportunity for improvement.

Back in New Jersey, we are working

core reason for membership in NJBankers is advocacy. With this core mission established, I would like to briefly outline some ideas that we believe will lead to improvements in advocacy and improvements in communications about our work to our members.

Improving advocacy: First and foremost, we must improve the participation in

We will redouble our efforts with the press, focusing on positive articles, editorial boards and providing an outlet for you, the bankers, to shape public opinion. diligently to provide value for our membership in improved advocacy.

As discussed in John McWeeney’s “Plotting Our Course” article, NJBankers is in the process of strategic planning. A poll of our members clearly demonstrates that the

12 New Jersey Banker

JEBPAC. We will begin a comprehensive communications campaign to our managing officers, which will discuss legislative challenges and victories via members-only external affairs conference calls. It is our belief that discussing legislative victories

will stimulate giving. Furthermore, we will continue our efforts to invigorate the JEBPAC committee with bankers that are committed to the political process and willing to call on other bankers for contributions. In concrete terms, we aim to increase the total amount contributed to JEBPAC by 10 percent for each of the next three years. If we can build this momentum, we will be able to double our contribution in seven years.

What will we advocate for? NJBankers will develop a positive agenda through our committee structure. The goal would be to generate 10 legislative ideas annually with the end goal of developing legislative change. We will be able to measure our success as each new idea becomes law. However, if NJBankers is to grow into a leader in the state, we must begin to think globally and develop a long term strategic legislative plan to promote growth. This plan will only be possible by forging strategic alliances with other likeminded groups and groups, such as labor, that have not normally been seen as allies.

How will you know? Unfortunately modesty and messaging don’t mix. Therefore, we will pursue a dual track of messaging.

First, we will improve both the content and the channels of communication between NJBankers and our managing officers.

As noted above, we will begin an external affairs conference call that will occur several times per year with only managing officers in attendance. The goal of the call will be to discuss legislative victories and challenges as well as a spotlight on NJBankers efforts covered by the media. It is our goal to use these calls to demonstrate the effectiveness of our advocacy efforts and our value to you, our members. We will also continue to communicate through our committee structure with special focus on the monthly government relations conference call. You will also continue to see our advocacy efforts highlighted in our quarterly magazine and weekly Bulletin.

But that’s only our communication with you; communication with the outside will also improve advocacy. We will redouble our efforts with the press, focusing on positive articles, editorial boards and providing an outlet for you, the bankers, to shape public opinion. In addition, we will commit to an issues advocacy plan which will allow

Summer 2011

Chairman’s Platform continued from page 6

Michael Affuso, Esq., is senior vice president and director of government relations for NJBankers.

He can be reached via email at maffuso@ njbankers.com.

the public that we must perform our duties diligently and prudently. We will evaluate each opportunity that comes our way but we will not jump at it until we are assured that it is the right thing to do, for our bank and for our communities.

There is no better way to tell our story than to demonstrate the commitment to the communities we serve by participating in the NJBankers Community Service Award Program. Peapack-Gladstone did and by independent judges was awarded special recognition at the conference. I speak for my colleagues at Century Savings Bank, Columbia Bank, NVE Bank, OceanFirst Bank, RSI Bank, and Wachovia/Wells Fargo Bank when I say we were proud to be recognized for this commitment. I certainly hope that you will participate, if you have not in the past, to demonstrate to legislators, regulators, customers and the public the commitment you also make to the communities you serve. When communities thrive, the nation thrives. Remember, your

Upcoming Events

New Members as of May 2011

NJBankers to influence the electorate in particular areas on particular issues. We will continue to raise our stature through participation in business groups and charitable events such as the Race Against Hunger, and support of many financial literacy efforts. Finally, we will continue our grassroots lobbying efforts with Action Bankers Councils, Bankers Legislative Day, the Government Relations Summit and a new program, the New Jersey Bankers Washington Regulatory Visit. This will be a time for NJBankers members to attend meetings with regulators in Washington. The visit is scheduled for October 5 and 6; we hope you will mark your calendars.

NJBankers, as a whole, and I, personally, look forward to working with you and meeting the challenges ahead. Let us begin. n

August 8

Annual Summer Golf & Tennis Outing Forsgate Country Club, Monroe Twp. September 12 – 14

Annual Senior Management Conference

association’s motto is “With New Jersey Banks, New Jersey Prospers.”

I would like to thank Gerry Lipkin, our immediate former chairman, for his service this last year. At the conference, the ceremonial gavel was passed to me and I encourage all of our members to move boldly into the future as our customers and communities need us.

Times may be tough, but bankers are tougher. We will seek out the opportunities and our management teams and boards of directors will prudently evaluate how to best take advantage of them. And, as Milton Berle said, “If opportunity doesn’t knock, we’ll build a door.” I plan to join Association leadership in speaking to legislators, regulators and the media. Won’t you join us? Let’s get started working on those opportunities! I look forward to serving you. n Frank A. Kissel is chairman of the New Jersey Bankers Association and chairman and CEO of Peapack-Gladstone Bank, located in Bedminster. He can be reached at kissel@ pgbank.com.

Affinion Group

Boenning & Scattergood, Inc.

Vyzas & Associates, P.C.

400 Duke Drive Franklin, TN 37067 Phone: 615-764-2492 Contact: Misha Bleymaier-Farrish Email: misha.bleymaier@ affiniongroup.com

4 Tower Bridge, Suite 300 200 Barr Harbor Drive West Conshohocken, PA 19428 Phone: 610-832-5312 Contact: Anthony A. Latini, Jr. Email: alatini@boenninginc.com

54 Washburn Street Jersey City, NJ 07306 Phone: 201-216-0800 Contact: Vince Vyzas Email: vince@vyzaslaw.com

Atlas Advisory Group, LLC

Eastern Armored Services, Inc.

21 Commerce Drive, Suite 301 Cranford, NJ 07016 Phone: 908-653-7292 Contact: David Buckwald Email: dbuckwald@ atlasadvisorygroup.com

P.O. Box 8733 Trenton, NJ 08650 Phone: 609-890-1762 Contact: J. Richard Norton Email: easternarmored@aol.com

Banc Consulting Partners

100 Park Avenue, Suite 1600 New York, NY 10017 Phone: 212-849-6828 Contact; Kevin T. Kane Email: ktk@frcconsult.com

Borgata Hotel & Resort, Atlantic City October 5 – 6

NJBankers Regulatory Visit New for 2011!

Washington, DC October 20 – 21

Annual Human Resources Conference

Caesar’s Resort, Atlantic City November 9 – 10

BankHorizons 2011

Tropicana Resort, Atlantic City Visit our website regularly at www.njbankers.com for the most current list of upcoming events, conferences, seminars and web seminars. Register online for all NJBankers events.

770 East Main Street Moorestown, NJ 08057 Phone: 856-234-9664 Contact: Lon P. Haines Email: lonphaines@ hainesandhaines.net

Westfield Commercial Agency LLC 1020 Springfield Avenue, Suite 201 Mountainside, NJ 07092 Phone: 201-988-1990 Contact: Neil Heinze Email: naheinze@yahoo.com

York Realty Services, Inc. Financial Regulatory Consulting Inc P.O. Box 420

Sea Girt, NJ 08750 Phone: 732-449-0509 Contact: Mark Trimmer Email: mark@yorkrealtyservices.com

Morgan Melhuish Abrutyn 651 West Mount Pleasant Avenue Livingston, NJ 07039 Phone: 973-994-2500 Contact: Elliott Abrutyn Email: eabrutyn@morganlawfirm.com

Summer 2011

New Jersey Banker

13

Directors’ Corner

Great Bank Boards Start With the Right Directors

By Martin M. Coyne

E

very week when I read NJBIZ, I’m amazed at the diversity of businesses and business issues in our state. These businesses serve other New Jersey businesses or consumers who live in NJ. Some may be customers of your bank.

How does a great bank board govern, enable and support their Martin M. Coyne institution to serve these customers? The board of every successful bank has the right directors, with the right knowledge, discussing the right topics. This means directors with the requisite skills and experience that are completely informed discussing the most important issues.

Strong financial expertise and financial risk management are mandatory for all bank boards. However, good bank boards also understand important consumer and

your board. Board composition should be driven by your bank’s strategy and customer base.

Many of the issues any financial institution faces can be linked back to a poor strategy, disagreement about strategy or one that is poorly executed.

Strategies evolve and can change over time and your board must keep pace with these changes. Periodically evaluate board composition and evolve your board along with your strategy to address the issues your bank is facing.

There is a simple three-step process that you can use to assess your board’s composition: Determine what skills and experience are needed. Identify the skills and experiences required to successfully implement your strategy.

Your strategy defines what you want to accomplish and how you will do it. It will also help determine what director skills and experiences are needed to review and support successful strategy

Good bank boards also understand important consumer and business issues. They have the “voice of the customer” and a deep knowledge of customer viewpoints represented on their board. business issues. They have the “voice of the customer” and a deep knowledge of customer viewpoints represented on their board.

Here are some proven approaches to ensure that you have the right directors with the right knowledge sitting at your boardroom table.

The Right Directors The ultimate success of your bank is directly correlated to a thoughtful strategy developed by your CEO and approved by

14 New Jersey Banker

implementation.

Assess your board composition.

Prepare a simple matrix with the prioritized skill sets and experience on the X-axis and directors names on the Y-axis. Check off on the matrix where each director adds value and can add value in the future.

Directors should add value in multiple areas. This simple exercise identifies skill and experience gaps that may need to be filled.

Develop a plan to evolve your board and fill any gaps. When missing skills

or experience are identified, recruit new directors with the missing experience or educate existing directors on these topics.

The Right Knowledge Based on my experience, every board should take time once a year to discuss the following question: How well does our board and each director understand our bank’s business strategy, business model and competition?

Boards of successful banks have a broad and deep understanding of their bank’s business.

Each director takes personal responsibility to be fully informed and current on their bank’s relevant business issues. But this is a shared responsibility.

Your CEO must ensure that relevant information and “continuing education” are provided to your board. Each director also must also keep current on new regulations and your competitive environment.

This continuous learning process starts with making sure that each director understands your key operating issues, main sources of business risk, perceptions of stakeholders, customers and investors and the competitive and regulatory environment.

Your board should have the expectation that each director will devote the necessary time and attention to maintaining the proper level of knowledge to actively contribute to board discussions.

In summary, a well-informed board of directors who understand broader business issues in addition to just financial issues and regulations will help your bank and CEO succeed.

■ Martin M. Coyne serves on several boards and is a speaker, advisor and president and CEO of NACD-NJ. He is the author of How To Manage Your Board While Your Board Manages You. He can be reached at 201-767-6955 or via e-mail at marty@ceolearningnetwork.com.

Summer 2011

News

NJBankers Community Service Awards

In recognition of outstanding community service, Community Service Awards were presented to members at the NJBankers 107th Annual Conference. From left to right, John E. McWeeney, Jr., president and CEO, NJBankers; Raymond G. Hallock, president and CEO, Columbia Bank; Robert S. Monteith, CEO, NVE Bank; Vito R. Nardelli, president and COO, OceanFirst Bank; Robert M. Rogers, president and COO, Peapack-Gladstone Bank; D. Russell Taylor, chairman, president and CEO, RSI Bank; and David J. Hemple, president and CEO, Century Savings Bank.

B

y participating in this program, members reinforce the fact that banks play an indispensable role in the social and economic well-being of our great Garden State.

NJBankers members are a vital part of the communities they serve. With that, NJBankers provides an opportunity to get the recognition members deserve while highlighting the significant impact New Jersey banks have on New Jersey citizens and their communities. The Community Service Award program affords members a great opportunity to show off their institution’s community service initiatives.

NJBankers compiles entries sent in by members into a book that is distributed to independent judges for review. In celebration of community banking, 54 NJBankers members participated in the 2010 Community Service Award program.

Seven banks received special recognition at the NJBankers 107th Annual Conference in Aventura, FL. Community participation includes a wide range of activities such as working, hosting or sponsoring the following: • Financial literacy efforts – members have attended schools to teach the importance of being financially literate. They also bring students or even adults to their institutions for in-house classes on budgeting, buying a home and the importance

of managing credit wisely. Members even raise funds to fill back-packs with school materials to ensure that students have the tools to help them with their studies; • Builds for Habitat for Humanity statewide; • Support for “future customers,” including local boys and girls clubs, Scouts, Little League, the Ys, and so many more; • Scholarships and grants to local students and community-based organizations; • Information on preventing ID theft and sponsoring of “shred days;” • Feeding the needy by volunteering at food banks and meal centers; • Donations to countless community groups for their fundraising efforts; • Senior citizens by volunteering at centers and full-care facilities or providing funds for events; • Fundraising for local police, fire and EMS squads; • Walking countless miles to support the March of Dimes, help find a cure for breast cancer, MS, leukemia, diabetes, and, well, if there’s a walk (or run), members are there; • Food drives, toy drives, and coat drives; • And countless other activities for community-based organizations.

By participating in the Community Service Award program, members reinforce

There were six deposit size categories that members fell into. Members that received special recognition this year included: Very large, national bank Wachovia/Wells Fargo Bank Over $2 billion Columbia Bank Between $1 billion and $2 billion OceanFirst Bank Peapack-Gladstone Bank Between $400 million and $850 million NVE Bank Between $250 million and $400 million RSI Bank Under $250 million Century Savings Bank

the fact that banks play an indispensable role in the social and economic well-being of our great Garden State! Plus, NJBankers shares the information with legislators and the media.

Congratulations to all of this year’s banks who received special recognition.

NJBankers hopes that more members will participate and show their service to their communities. Calls for entries begin in October and announcements will be made in the NJBankers Bulletin.

■

Summer 2011

New Jersey Banker

15

Feature

Main Street, We Have a Problem

By Bill Streeter

Three years of bank-bashing have left traditional banks frustrated at their sagging image. Something needs to be done … and it is

L

awyer jokes used to have a lock on the market. Not anymore. Type “banker jokes” on Google and you’ll find plenty to choose from, including this one: Q. What’s the problem with banker jokes?

A. Bankers don’t think they’re funny; normal people don’t think they’re jokes.

Ouch!

Lawyers might tell bankers to just get over it. Easy for them to say. Congress is run by lawyers.

If it was just about jokes, bankers would get over it. But the jokes are a symptom of a much more serious issue – the sharp decline in how the public regards banking. This decline was clearly made worse by the financial crisis that the vast majority of traditional banks had no part in causing. During the crisis, “banking” was redefined by the media and policymakers to include mortgage brokers, Wall Street investment banks, and even AIG. Combine

this with the TARP “bailout” – which was anything but – and there has been blood in the water for banks ever since. The overreaching Dodd-Frank Act is the most glaring example of how misinformation can drive bad public policy.

As he took office last October, ABA Chairman Steve Wilson, CEO of LCNB National Bank, Lebanon, Ohio, was deeply disturbed by this trend. He was frustrated that people generally aren’t aware of, or don’t understand, what traditional banks do to help people and support their communities. He made it a primary goal of his term to repair banking’s damaged reputation and to help restore the industry to the position of honor it once held. As he said, “We stand a far better chance of winning in the political arena when we are also winning in the arena of public opinion.”

From the ground up Wilson established an ABA Image Task Force to determine how best to tackle the challenge. Led by co-chairs Matt Williams, ABA’s vice-chairman, and president of Gothenburg (NE) State Bank, and Bick Weissenrieder, CEO of The Hocking Valley Bank, Athens, OH, the task force has been meeting monthly since November, in concert with ABA staff, led by Executive Vice-President of Communications Ginny Dean. Committee members include a mix of bankers, state association executives, and a media representative (this writer).

The group determined that the best approach would be to begin locally, and the place to start was with bank employees.

“Do we know how our employees respond when asked a question about our bank or about the industry?” Matt Williams asked during a presentation at ABA’s recent Government Relations Summit. “Do they look down at their shoes or shrug their shoulders – or do they talk with a sense of pride?” Each employee, he said, can be an ambassador for the bank and the industry if he or she is

“They said that?” Takeaways from ABA consumer focus groups Focus groups are always enlightening and frequently jarring. ABA conducted four of them earlier this year to explore consumer perceptions about banks. Below are some typical observations.

Not sure what you do: They favor banks’ involvement in the community and economic development, but know little about the extent to which it’s currently done.

Whose fault? When asked who was responsible for the financial crisis, the answer was “everyone.” Banks, the government, predatory lenders, ratings agencies, consumers who made poor choices.

Regs not being enforced: Most do not understand how, and the extent to which, banks are regulated, although they believe that existing regulation isn’t being enforced, as shown by the recent financial crisis.

Big vs. small: Consumers drew a distinction between big banks and community banks – although they weren’t sure how many community banks still exist – and between banking and Wall Street, although the line was blurry.

Make a profit, but not too much: Banking is a commodity to most people. They want it to work and, while they believe that banks are entitled to make a profit, they don’t want the fees to be unreasonable.

16 New Jersey Banker

Don’t whine: People generally do not want to hear banks complain about regulation. It sounds self-serving and whiny.

Summer 2011

informed and feels the same pride in their profession that bank presidents do. Employees can be very effective at helping to correct misinformation in their circle of family and friends, and with customers, said Williams.

Bank directors can do likewise.

Altogether, the task force identified five target audiences: 1. Employees and directors 2. Customers 3. The community 4. Media 5. Policymakers With input from the task force and from several consumer focus groups, Dean pulled together ABA’s resources to craft a toolbox that member banks can use to take an active role in rebuilding banking’s image. The toolbox is available to ABA members on aba.com.

Find out what people think To move the image needle, the task force recognized that it’s critical to have an idea of what the public’s perception of banking really is. The focus groups were part of that. In addition, the toolbox contains sample surveys

for banks to give to employees and customers.

The surveys, which can be tailored by each bank, should identify problem areas that then can be addressed. Among the issues probed: • How prepared do employees feel to address questions about the bank or the industry?

• In their opinion, does the bank’s management act with integrity?

• Does the bank act in the best interests of its customers?

What is needed “For the ABA image effort to succeed,” said Matt Williams, “two things have to happen.”

The bank’s CEO has to make a dedicated commitment to be an ongoing part of it; and The CEO has to select a “go-getter” in the bank with the right skills to head up the effort.

“If we sit back and say, ‘We’re all right, it’s not our problem,’ and leave it up to someone else,” said Williams, “nothing will change.”

Reprinted with permission from the April 2011 issue of ABA Banking Journal, copyright 2011 by the American Bankers Association. ■

Telling Your Bank’s Story Here’s some of what’s in the new ABA toolbox for members on aba.com: • Sample letters to employees and directors • Surveys for employees and customers • Q&A for addressing customer questions • Case studies of successful bank programs • Impact statement form to help quantify banks’ community support (loans, charitable contributions, volunteer work, taxes paid, etc.)

• Speech and PowerPoint presentation for community meetings • Focus group instructions • Op-Ed article • Tips for working with the media • Media talking points • ABA resources

Bill Streeter is editor-in-chief of the ABA Banking Journal.

AIB Principles of Banking

Principles of Banking Tenth Edition

For 85 years Principles of Banking has supported the profession of banking and the professional success of bankers. From its initial publication in 1925 as Banking Fundamentals to the current 10th edition as Principles of Banking, no other banking product or course has touched so many.

AIB Principles of Banking is offered in an instructor-led online format that integrates high quality instruction with the convenience of a virtual classroom or can be taught in your bank.

It is the perfect course for every employee and is the most effective way to introduce new personnel to the banking industry.

AIB Principles of Banking is available through the American Bankers Association.

Find out how you can provide your employees with the foundational course for industry recognized AIB diplomas and prepare them for a successful career in banking by visiting www.aba.com and clicking on Professional Development.

www.aba.com

l 1-800-BANKERS

Summer 2011

New Jersey Banker

17

Feature

The Big Questions

By Sal Marranca

G

enerational questions have hung heavily in the air for all community banks since the Wall Street financial crisis began nearly four years ago. Does community banking have a bright future?

And more personally for all of us, does my community bank have a viable, profitable and purposeful future?

There has been Sal Marranca no shortage of people willing, sometimes even clamoring, during one of our industry’s most challenging times to provide glib answers. You’ve heard their ominous predictions: Community banks can no longer compete in an industry rigged to big-bank regulatory advantages and economies of scale. The mounting costs and burdens of regulation will drive most community banks out of business. Deflated loan demand won’t turn around. Technology and innovative products are becoming unaffordable. Fewer people will care whether community banks stay in business. As a result of all this, a tsunami of mergers and consolidation will carry away all but the strongest, luckiest or largest community banks. Blah, blah, blah!

Of course, many of these people divining a bleak future for community banks are well-meaning and sincerely worried. Some, including the cheerleaders of the policies and activities that triggered the financial crisis, are simply capitalizing on or fanning the fears of the moment. Still others have self-interest in beating the drums of perpetual gloom.

Mostly their doleful predictions reflect the tenor of the times, that today’s circumstances won’t change or challenges can’t be solved.

I’m glad George Washington didn’t feel that way at Valley Forge, or we all might still be speaking with British accents!

Recently one prediction – that there will be fewer than 5,000 banks in five years, and fewer than 2,500 in 10 years – made a splash in the banking press. The stunning prediction

18 New Jersey Banker

made great news, particularly in reflecting today’s beleaguered community banking environment. That opinion was fair game to cover. Certainly it’s reasonable to predict that consolidation in the banking industry will continue. No doubt community banks will face more challenges (regulatory and otherwise), but our institutions also will face opportunities. To say that consolidation will winnow the banking industry by one-third over five years and by two-thirds over 10 years is disproportionate and pessimistic to the point of defeatism. It’s also not true.

An ICBA membership survey in February showed that 7 percent of community bank owners would seriously consider selling their institutions when market opportunities improve. The other 93 percent of community bankers were mostly considering whether to acquire another institution or possibly other institutions. That means, from the number of total financial institutions that exist today, about 520 community banks would be up for sale in the near future and that nearly 6,900 community banks would be looking to acquire them. In more positive terms, this shows a great majority of community bankers believe their institutions have a bright future that is worth continuing to pursue. Considering the real pain, anxiety and uncertainty that the Wall Street financial crisis imposed on community banks, you could say the vast majority of community bankers are bullish about their industry.

ICBA’s membership survey is a significant gauge of community bankers’ outlooks and intentions. Unfortunately, it’s not a viewpoint that fits the storylines repeated since the financial crisis or the echo chamber of legitimate worries over certain new regulations to come from the Dodd-Frank Wall Street Reform and Consumer Protection Act. The law’s damaging debit interchange price control provisions and subsequent Federal Reserve regulations must be stopped.

The Consumer Financial Protection Bureau must also remain focused on the largest banks and nonbank financial firms, and ICBA is making progress to ensure that

happens, and encourage the bureau’s officials to create streamlined consumer regulations and disclosures for the mutual benefit of consumers and community financial institutions. It won’t necessarily be easy or happen overnight, but we know we can do these things.

Like the vast majority of community bankers recorded in ICBA’s member survey, I’m optimistic about the future of my community bank and of community banking.

The financial crisis and severe recession didn’t change the fact that community banks still have the first-rate products, nimble service and expertise that people want and need. Megabanks and nonbanks will never be able to serve foremost long-term customer relationships, as community banks like yours and mine do every day. And so many Americans understood and appreciated the differences between Main Street community banks and Wall Street financial institutions.

That’s opportunity, not a crisis.

Industry pessimists seem to believe that small businesses and our overall U.S. economy won’t rebound, but community bankers see the economy steadily if slowly beginning to revive at last.

Pessimists seem to think that regulatory burdens from the Dodd-Frank Act will, as with past laws, fall disproportionately on community banks. But most community bankers know that most of the Dodd-Frank provisions aren’t directed at community banks, but at Wall Street banks and shadow nonbanks. For example, the act’s considerable too-big-to-fail provisions will impose significant ongoing prudential regulation on the largest banks and nonbank financial firms, even possibly causing them to downsize and restructure in major ways. Numerous exemptions and bypass provisions for community banks are written expressly into the law. The Consumer Financial Protection Bureau, for example, must also weigh the potential burden on small businesses and community banks of its proposed rulemaking.

Pessimists overlook that the law

Summer 2011

provides constructive, watershed statutory recognition that community banks should be regulated differently from Wall Street banks and nonbanks. After decades of educating Congress and regulators in Washington, policymakers widely recognize the special, uniquely constructive role that community banks play in our nation’s financial services arena. Most community bankers know they shouldn’t give up just as policymakers are preparing to take real, concrete steps toward greater regulatory parity by adopting the decades-long goal of tiered industry regulation for large banks and community banks.

Yes, all community banks must address the cost and costly distractions of mounting and ever-changing regulatory burdens as a competitive challenge. The pessimists also don’t think community bankers will continue to find solutions in Washington and in the marketplace to these competitive and regulatory challenges, but most community bankers remember how they successfully navigated considerable technological, regulatory and product line changes over the years. (Consider that a mere 15 years ago, few American businesses had a website or used email, and virtually no consumer carried a debit card or conducted his or her banking online.) The ability of community banks to adapt and find new solutions to challenges didn’t end with the financial crisis. We don’t need to solve every challenge today to know our institutions still have a bright future.

Like me, most community bankers have faith in themselves, in their customers, in America’s small businesses and in continual regeneration of America’s entrepreneurs. My customers and community will continue to need my bank’s products and services and, most important, my team of employees who deliver those products and services with integrity and long-term commitment to my customers.

As the recovery from the financial crisis and recession begins taking hold, now is an important time for all community bankers to plan both tactically and strategically for the future. Now is the right time for every community bank and its leadership to consider fundamental questions about themselves, their industry and the future of their communities. Let’s safeguard and finish the unprecedented progress we started together in Washington and address the potential threats remaining with the Dodd-Frank Act. Let’s find new ways

through technology, creative management and organization, and new partnerships to address the real bottom-line costs of ever-changing regulation. Let’s restructure and prepare our institutions to continue to compete in an environment of ongoing change. Let’s reinforce our community bank brand and values with our customers and our marketplace.

In short, community banks should plan to continue to do what they’ve always done to be successful. We’ve done it in the past, so

we can do it in the future. Tomorrow will be better than yesterday. As an industry, we need to ask ourselves if our glass is half full or half empty. Will our community bank be on the lookout for opportunities to acquire or to be acquired?

A large majority of ICBA members answered that question and agree.

■ Sal Marranca is ICBA chairman and the president and CEO of Cattaraugus County Bank in Little Valley, NY. He can be reached at info@icba.org.

Looking to Reduce your Operating Costs?

WE caN savE YOu TIME aND MONEY.

Our proactive approach to managing computer networks will free-up capital to spend on GROWING your business, not fixing it.

Introducing SAFETiNET™ Your IT Department’s New Best Friend:

• Network Management Solutions • Managed Network Security • Managed Network Infrastructure

An Atlantic Technology Solution

Once you have SAFETiNET™ you won’t know how you worked without it!

Try SAFETiNET Risk Free for 30 Days:

www.safetinet.com

Call to Learn More: 1-888-921-2934

Enjoy Peace of Mind with this new suite of products and services customized to the needs of your business.

Atlantic Technology Systems 386 State Route 94 South Newton, NJ 07860 Providing Professional IT Services for over 20 years.

Summer 2011

New Jersey Banker

19

Cover Feature

Mobile Banking’s TIME has come Hot Apps and the Coolness Factor

By Scott Van Voorhis

M

obile banking is the new Wild West of the financial sector, with a bewildering array of gunslingers battling it out for share in a fledging market – and there’s no sheriff in sight.

And as New Jersey banks ride into this new Dodge City full of apps, Androids and iPhones, executives will need to be quick on the draw, with ever more crucial choices ahead as mobile phone technology takes flight, industry experts say.

Banks in New Jersey and across the Northeast are quickly grasping that they can’t sit this gun battle out in the saloon. Bank executives face crucial choices as they build their basic platform of mobile services, from whether to enable customers to deposit checks via their phones or go the browser or app route.

A number of proposals for creating a new, nationwide mobile payment infrastructure are on the table, but they have no clear direction. The federal government is wary of playing sheriff, and the nation’s largest banks, retailers, credit card companies and mobile providers are being left alone to hash out the next big technological leap in mobile banking.

“It’s almost a paradigm shift,’’ said Connie Hartman, Internet services manager at Susquehanna Bank. “It’s sort of a time and space convergence – you can do anything, anywhere, anytime.”

NJ banks well-situated So far, New Jersey banks have gotten off to a fast start when it comes to positioning themselves for success in the rapidly emerging mobile banking market.

Matt L’Heureux, vice president of client services at COCC, a bank technology consulting firm based in Avon, CT, notes that almost every bank he is familiar with either has a mobile banking program already or is forming one in their strategic plan.

And for good reason: The mobile phone is fast becoming the main portal to the world for the next generation of home owners and

20 New Jersey Banker

consumers, L’Heureux and other experts note. Stats show that mobile phone use is poised to skyrocket over the next few years, with dramatic implications for the future of banking.

Mary Meeker, a managing director at Morgan Stanley and head of the firm’s global technology research team, has already dubbed this the mobile Internet era the fifth major tech cycle of the last half century.

Within five years more users will connect to the Internet via their mobile devices than through their desktop PCs, she predicts.

There is a silver lining here for banks scrambling to adapt. Overall, mobile banking is much more cost effective for banks than traditional banking, whether it’s a teller behind the counter or someone at a phone center fielding calls, industry observers say. Client banks that have adopted mobile banking have seen a 50 percent drop in customerservice calls, notes Douglas Brown, senior vice president of mobile products at financial technology consulting firm FIS Global. “That is pretty substantial,” he says. Mobile-banking customers also tend to buy more products and are more open to good and relevant marketing.

Conversely, ignoring these trends could prove dangerous for a bank’s future.

COCC’s L’Heureux sees mobile banking hitting critical mass three years from now in college towns and five years everywhere else. “You don’t want to have a struggling mobile platform when all of a sudden one of the country’s biggest banks is bragging about their mobile banking platform,” he said.

Speaking of big banks, Bank of America, which has more mobile banking customers than any other financial institution right now, has set what arguably is the gold standard in the emerging sector.

Mobile customers can now check balances, pay bills and e-bills, transfer money between accounts and other Bank of America customers and view transactions and pending transactions. The bank has also spread its net wide when it comes to connecting with mobile customers, with app, browser-based and text based mobile banking.

Summer 2011

And BOA offers downloadable applications for six different mobile devices: iPhone/iPod Touch; Google Android devices; Blackberry devices; Palm devices; Windows Phone 7 App; and iPad. “The explosion of smart phone adoption has supported our growth to approximately seven million active mobile banking users," said Marc Warshawsky, senior vice president of mobile channel planning and design at Bank of America. “Customers really value the ability to use smart phones and other mobile devices to more convenienly manage their day-to-day finances while on the go."

New Jersey banks are right behind. Susquehanna Bank launched mobile banking in 2009 and now offers basic services, such as a branch locater and the ability to check accounts, transfer funds, pay bills and get alerts, Hartman notes. “We had been looking at it for a while – some of our larger banking competitors had already introduced it,” she notes. “We felt we needed to add it to keep the customers we already had and gain new customers.”

Columbia Bank also offers the basic package – viewing account balances, transferring funds and paying bills, finding a branch and checking current rates. The bank’s mobile customers can also get low balance alerts as well, said Joseph Raitano, the bank’s website administrator.

Moving forward in mobile banking For New Jersey banks like Susquehanna and Columbia, the aim now is to fill in remaining gaps in the basic service platforms.

Susquehanna sees the potential for person to person payments, while Columbia is looking at enabling its mobile customers to deposit checks by taking a photo on their phones.

And both banks are looking at adding apps as well to make it easier for customers to do mobile banking. Susquehanna has an iPhone app and wants to expand its reach to other devices. And Columbia is adding mobile banking apps for Android and iPhone users, Raitano noted. “We do not believe we're even close to maxed out mobile services,” he said.

In fact, keeping up with the apps is a must for banks looking to stay ahead of mobile banking developments.

Consumers have a growing fascination with apps, which are the hot thing right now in the mobile market, L’Heureux said. There is a coolness factor, and also an ease of use, that’s hard to beat – the touch of a button.

And the last thing any bank should want is a smart phone customer looking for a mobile banking app, and buying the service from a tech company because there is no app from their local bank, he contends.

While banks also need to offer browser-based and text-based mobile banking, apps should get top priority. “We think it’s apps first,” L’Heureux said. “If you have a smart phone or iPhone, nothing is as easy as the click of that single icon. Apps have really become a way of life.”

Still, challenging as it has been for banks to roll out mobile banking platforms so far, the biggest hurdles may be just ahead.

The next big technological leap right now in mobile banking involves Near Field Communications, the ability to pay with a smart phone loaded with your debit card. continued on page 27

Protecting Against Mobile Banking Fraud

By Christina P. O’Neill

Smart phone use is expected to reach 1.1 billion consumers by 2018, with person-to-person payments the fastest growing application, and 500 banks offering it nationwide. Mobile phone use is growing 85 percent year over year. With the average person-toperson transaction exceeding the average credit card purchase, is the mobile banking industry prepared to protect itself?

Mike Urban, senior director at FICO for Global Fraud Solutions, says there’s no such thing as reward without risk. At a May 24 webinar addressing the growing risk of mobile bank fraud, he cited a recent Juniper Networks Global Threat Center report that revealed that Android saw a 400 percent growth of malware attacks since the summer of 2010 – less than a year. Phishing on a mobile phone can be harder to detect because the smaller address bar makes it harder to read a full web address in a mobile web browser. This all adds up to transaction risk, he says.

Four big players are in the mobile phone arena now – Apple, Google, RIM and Microsoft – and financial institutions need a vendor that supports all four, he says. Additionally, in two out of five institutions, mobile banking applications record login information on text files on consumer phones, so protection is critical.

Scott Zoldi, vice president of analytic science at FICO, noted at the webinar that even if banks adopt best practices, the other problem is reliability and security of the networks that report to the banking site. Smartphone users on WIFI must use caution to connect to trusted networks.

In “man-in-the-middle” attacks, someone mimics the site to intercept between the phone and the mobile site – and once again, the Internet offers many ways to launch attacks. However, it’s harder for hackers to crack https:// sites than http:// because https uses SSL (secure socket layer) and encrypts all traffic between a user’s device and the website.

Zoldi suggests financial institutions use analytics to monitor transactions. Given that information may be compromised at the phone level, applications using adaptive techniques, rather than rules-based parameters, should be in place to monitor banking activity on phones to detect and identify abnormal activity. Adaptive technology occurs in real time, whereas rules are static. “At the same time, we don’t want to stop good transactions from happening,” Zoldi observed.

Summer 2011

New Jersey Banker

21

Feature

Women working in corporate banking, commercial lending, treasury management and risk management attended the panel on Corporate Banking moderated by Lucia Gibbons, Wells Fargo Bank.

First Annual Women in Banking Conference Encourages Knowledge, Leadership and Mentorship

S

ome banking experts say that not enough women have surpassed the industry’s “glass ceiling,” and that was the inspiration for the NJBankers First Annual Women in Banking Conference.

Nearly 230 women from across New Jersey, representing 45 financial institutions, joined NJBankers in the inaugural conference at The Palace at Somerset Park in Somerset in April. The conference focused on mentoring and leadership journeys of women in the banking industry, and the need for more women to assume leadership roles in financial institutions.

A committee, chaired by Margaret Lanning, senior vice president and senior regional credit officer, Wells Fargo Bank and a member of the NJBankers board of directors, was formed to plan and obtain speakers for the conference. After the conference, Lanning told the press, “it’s usually a senior and junior person, a one-on-one relationship with coaching. This was 1 to 227. We were sharing and thereby mentoring each other.”

Angela Snyder, president and CEO of The Bank, told NJBIZ that “women and minorities are underrepresented at the top rungs of banks,” but the institutions are “more open to diversity because [they] promote diverse ways of thinking. A diverse outlook is even more important than ever as banks expand their relationships with customers.”

Katherine Kremins, senior operations officer at Peapack-Gladstone Bank and a member of the committee, noted that “more people see that women are as capable as men.”

One of the keynote speakers, Laura Schulte, president of Community Banking East Region, Wells Fargo Bank, described her leadership journey and her experience bringing the Wachovia and Wells Fargo teams together and the importance of women supporting each other to achieve goals.

Lisa Hetfield, interim director for the Institute for Women’s Leadership at Rutgers University, presented highlights and statistics about women’s leadership in New Jersey banking.

22 New Jersey Banker

Barbara Rehm, editor at large for American Banker, addressed the attendees as the endnote speaker. She spoke on the diverse group of women she has met in planning and organizing the “Top 25 Women in Banking,” a project she indicated she has enjoyed coordinating since she meets movers and shakers in the industry.

Speakers and panelists also included: Kathryn Carlson, managing director, U.S. Trust, Bank of America Private Wealth Management; Karen Casey, chief risk officer, Amboy Bank; Michele Clay, regional sales and marketing director, Northeast, Wells Fargo; Brenda Ross-Dulan, executive vice president and regional president, Southern New Jersey, Wells Fargo Bank; Mary Grace Finn, senior vice president, Wells Fargo Treasury Management, and divisional sales manager, Wells Fargo; Lucia Gibbons, executive vice president and Northern New Jersey regional president, Wells Fargo; Katherine Kremins, senior vice president and senior operations officer, Peapack-Gladstone Bank; Michelle Y. Lee, regional president of Northeast community banking, Wells Fargo; Laura McAulay, senior vice president and senior credit products officer, Bank of America; Nicole Nielsen, vice president and human resources manager, Two River Community Bank; Diane Scriveri, executive vice president and chief lending officer, Bogota Savings Bank; Jennifer Simone, vice president of commercial lending, Somerset Hills Bank; Angela Snyder, president and chief executive officer, The Bank; Desiree Thomas, senior vice president, Financial Institutions Group, J. P. Morgan Securities.

Importantly, the conference allowed attendees to network with other female leaders in the industry.

NJBankers thanks all our speakers and the committee for taking their time to ensure that this inaugural conference was a success.

We also thank the attendees, who demonstrated that there is a need for this educational opportunity in the state. We look toward to the second annual conference with much anticipation.

Summer 2011

Conference attendees listen intently to Laura Shulte’s presentation. Nearly 230 women attended the inaugural conference.

Committee Chairwoman Margaret Lanning, senior vice president and senior regional credit officer, Wells Fargo Bank, and a member of the NJBankers board of directors, welcomes the attendees to the First Annual Women in Banking Conference.

The Corporate Services panel, moderated by Mary Riccardi, Amboy Bank, was designed to share experiences with women working in finance, marketing, human resources and operations.

Barbara Rehm, editor of American Banker, spoke on the diverse group of women she has met in planning and organizing the “Top 25 Women in Banking” – a project which she indicated is very enjoyable, educating and enlightening.

Front row, left to right: Diane Scriveri, Laura Mc Aulay, Margaret Lanning, Nicole Nielsen and Lisa Hetfield. Second row: Dianne Grenz, Jennifer Simone and Catherine Brody. Third row: Katherine Kremins, Karen McMullen and Cheryl Patnick.

Thanks to the Committee

Lisa Hetfield, Rutgers University, provided statistics regarding the current under-representation of women in executive and board positions in the state’s banks, but noted that there has been some progress.

Laura Shulte, Wells Fargo Bank, described her leadership journey and her experience bringing the Wachovia and Wells Fargo teams together.

The First Annual Women’s Conference Committee members dedicated their time and knowledge of potential speakers to make the conference a success. The committee included: Margaret Lanning, Wells Fargo Bank, N.A., Chairwoman Catherine Brody, JPMorgan Chase Bank, N.A. Dianne Grenz, Valley National Bank Karen Hall, Saddle River Valley Bank Fay Hamid, Garden State Community Bank (Div. of NYCB) Lisa Hetfield, Rutgers University Katherine Kremins, Peapack-Gladstone Bank Laura McAulay, Bank of America, N.A. Karen McMullen, CFT Atlantic and Central States Nicole Nielsen, Two River Community Bank Cheryl Patnick, Capella Consultants LLC Mary Riccardi, Amboy Bank Diane Scriveri, Bogota Savings Bank Jennifer Simone, Somerset Hills Bank

Summer 2011

New Jersey Banker

23

Meet Our Endorsed Service Providers

Pentegra: Providing Retirement Plans for Community Banks

F

ounded by the Federal Home Loan Bank System in 1943, today Pentegra is the retirement plan provider of choice for community banks nationwide, with more than 1,200 retirement plans and over $6.7 billion in plan assets under management.

Pentegra offers over six decades of industry knowledge and insights in developing bank retirement plan solutions designed to attract, retain and reward the talent needed to ensure your bank’s success. Features include: • An exclusive focus on retirement plan solutions for community banks.

• An independent, unbiased structure that puts the best interests of your plan and participants first.

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

• A comprehensive array of retirement plan solutions, including 401(k) plans, defined benefit pension plans, KSOPs, ESOPs, profit sharing and money purchase plans, cash balance plans, executive benefit and director compensation programs, and bank-owned life insurance (BOLI) financing to help you implement a more costeffective strategy to offset some or all of the expenses related to

24 New Jersey Banker

your retirement plan and other employee benefit programs.

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

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

• Investment flexibility with a choice of actively managed mutual funds, or institutionally-managed indexed funds with investment fiduciary protection for your bank and board of directors.

• Direct access to highly skilled benefits professionals, including inhouse ERISA attorneys, enrolled actuaries, certified plan consultants, investment professionals, compliance specialists and education specialists • A 97 percent client satisfaction rating.

For more information, contact us at 800-872-3473, or visit us at www.pentegra.com.

■

Summer 2011

Purchasing Assistant: Helping Your Bank to be More Profitable

P

urchasing Assistant is an e-procurement, spend management software as a service (SaaS). It manages requisition to pay procurement cycles, reducing manual processes and increasing employee productivity. Purchasing Assistant: • Controls maverick buying • Reduces the cost of supplies • Eliminates paperwork • Establishes records retention compliance • Increases cost center budget control • Manages service contracts • Improves employee productivity Buying power – With three times the buying power of the largest bank in NJBankers, Purchasing Assistant has a demonstrated track record of reducing net procurement expense. These savings are the result of national account contracts exclusively

available only to Purchasing Assistant client banks.

Maverick buying – By controlling “off contract” buying and monitoring actual cost center usage, unnecessary expenditures can be identified and eliminated.

Paperwork – The average cost of processing a purchase order, from requisition to payment of the invoice, is approximately $108 (per the Aberdeen Group, Boston). A typical bank will process about 40 orders per cost center each year, resulting in tens of thousands of dollars in unnecessary administrative costs.

Records retention – The Financial Managers Society suggests that procurement records must be archived from between three to seven years. As 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), virtually all procurement documentation by purchasing departments is not in compliance with FMS standards.

Budget control – Every transaction processed through Purchasing Assistant is tracked by a PO number, G/L account and cost center. With that captured data, cost center budget and audit compliance becomes available to all financial managers.

Employee productivity – With an automated procurement system, your bank can optimize administrative time and provide service continuity in the event of employee separation from service.

■ To learn more about Purchasing Assistant, visit www.purchasingsystems.com, or contact Kevin Wm. Bless at 800-305-2024 or sales@ purchasingsystems.com.

For 30 years, we’ve been alongside our participants through calm seas and rough waters. Today you are faced with new regulatory developments and more uncertainty than ever before. As we face the unknown together, know that we’ll be by your side as an advocate and trusted advisor – empowering you to make smart decisions and build a successful debit program. We see debit opportunities in everything we do, because it’s all we do. Profit from our passion.

Stay informed by visiting our Durbin Amendment Resource Center at pulsenetwork.com/debitregs Collaboration

Professional Development

Customer Service

A Discover Financial Services Company

pulsenetwork.com/debitregs ©2011 PULSE

Summer 2011

New Jersey Banker

25

Feature

Challenges and Regulatory Expectations for Your ALLL

By Amit Govil

H

ow do we define an adequate level of ALLL Reserve? Based on recent regulatory emphasis, changes in the economic climate, the uncertainty in the real estate market and the economy, the establishment of a bank’s ALLL Reserve has become the new $64,000 question in the banking industry. The regulatory scrutiny has been tremendous, which brings an element of inconsistency derived primarily by the regulatory desire to increase the ALLL Reserve. Such desire is often in direct conflict with the bank’s, which has a primary objective to maintain an adequate reserve balance and also to preserve earnings and capital levels.

The 2006 Interagency Policy Statement on Allowance for Loan and Lease Losses combines with other regulatory and accounting directives to establish guidelines and requirements for the ALLL. The Interagency policy requires the ALLL Reserve to be calculated using the guidelines of the Financial Accounting Standards (FAS) No. 5 and FAS No. 114. The Financial Accounting Standards Board (FASB) recently released the Accounting Standards Codification: ASC 450 for FAS 5 and ASC 310 for FAS 114. The ASC 450 is perhaps where the greatest challenge with respect to documentation comes in. Using the guidance provided in the policy statement, following are some steps that you should consider in deriving the ASC 450 Reserve balance: • Divide your loan portfolio for unimpaired loans into the pool of loans with similar credit risk (for most, call report categories are generally acceptable).

26 New Jersey Banker

• Calculate your more recent historical loss percentage for each pool of loans (most likely two years, but that can change based on economic trends) and adjust it by the risk assessment for the qualitative factors listed in the Interagency policy.

• The adjustment for these qualitative factors should be appropriately supported through an appropriate assessment.

• Though not required, according to the Interagency policy, further escalate the adjusted historical loss percentage for the classified portion of the loans for each loan pool. You can use your assessment of delinquency or concentration risk for each loan pool to adjust the loss percentage for the classified/criticized loans.

• Now we have the adjusted and further adjusted historical loss percentage which we can apply to the outstanding loan pools.

• You can include the off balance sheet items for each loan pool – even though the policy statement states that you should not, some regulators insist that they be included.

• I would not include the loans for which you have performed a valid ASC 310 impairment review. I would make sure that my review process for ASC 310 is robust.

Now that we’ve mastered the art of calculating an appropriate ASC 450 (FAS 5) Reserve balance, it is time to take on the bigger challenge of developing a systematic and objective methodology to calculate the

ASC 310 (FAS 114) Reserve balance for your institution.

ASC 310 (FAS 114) impairment measurement The starting point for the ASC 310 (FAS 114) calculation is the identification of all loans that are deemed to be potentially impaired. This can come from an institution’s “normal loan review procedures,” which suggests the inclusion of loans that meet some type of a classified loan classification.

A bank should review each of its classified loans individually to identify “impaired” loans. Loans determined not to be impaired are returned to their pools for analysis under ASC 450. In accordance with interagency policy, loans which have been reviewed for impairment and where there is no quantitative measurement of impairment are not required to be returned to the ASC 450 pool. The issue where most institutions get criticized, and where the process falls apart, is the first step of identifying potentially impaired loans. If the loan is not impaired, then it must be pushed back for ALLL calculation purposes into the ASC 450 pool category. The key takeaway here is the issue of an institution’s definition and assessment of what constitutes an impaired loan. We need to develop a definition and then apply it consistently.

Loans identified as “impaired” are those for which the bank is unable to collect all amounts according to contractual terms.

The bank can estimate the amount of loss based on one of three approaches: present value of estimated future cash flows, fair market value of collateral for collateralized loans, and estimated market price of loan.

Summer 2011

For an individually evaluated impaired collateral dependent loan, the regulators require that if the recorded amount of the loan exceeds the fair value of the collateral (less costs to sell), this excess is included when estimating the ALLL. Some institutions, however, attempt to derive the estimated fair market value of the collateral property by taking the old appraisals in the loan file from the time of origination and discounting it based on their estimate of the decline in the property values in the particular area. This methodology, although reasonable, is often not well supported and therefore has not worked well with the regulators.

What the regulators are looking for is a bona fide appraisal. However, this can be costly. Thus, many institutions procrastinate getting an appraisal. The regulatory expectancy is that an institution should set a timeframe and a consistent framework to ensure that appraisals are being performed in an objective, consistent, and timely manner.

Charge Off or ALLL Reserve Another area of confusion has been

whether the impaired portion of a loan, once calculated, should be added to the ALLL or charged off. The interagency policy states that the portion of the impaired amount determined as being a loss and uncollectible should be charged off. Once you measure the impairment amount for each loan, further assess what portion of it is collectible or not. You cannot assume that all of it will be collectible, and simply add it to the reserve. It needs to be evaluated on an individual case-by-case basis.

When it comes to your ALLL methodology, you not only need be able to calculate the right number, but you need to be able to support it and provide your narrative.

■ Amit Govil, CPA, CRISC, is a partner at P&G Associates, bringing over 25 years of internal audit, compliance and risk management experience to the community banks P&G serves. P&G Associates is a full service provider of outsourced risk management solutions including internal audit, loan review and the ALLL software: PRISM. Contact Govil at whatsyourrisk@pgcpa.com or 732-651-1700.

Mobile Banking continued from page 21 And this is where the Wild West analogy re-enters, with myriad players rolling out a plan a day and with the federal government taking a wait-and-see approach.

Or to put it another way, everyone knows what the next big step is, but getting there is an entirely different matter. Right now, different players are working on potentially competing systems, including the big banks, the credit card companies, mobile phone providers and major retailers.

Bank of America currently has its own pilot program in New York, in which customers who’ve loaded bank debit cards onto their smart phones are able to make purchases at participating merchants.

Far from stepping in to regulate the new field, in a recent report, the Federal Reserve argued that these potentially competing industry efforts will eventually sort themselves out – a finding that has drawn fire from some mobile banking industry observers. But FIS’ continued on page 35

Some say success is found.

At EisnerAmper we know success is made.

EisnerAmper Banking Group has the expertise and resources to provide a wide array of services to the banking industry.

Our professionals offer the following services, Internal Audit, Regulatory/404 Compliance, Fiduciary & Trust Operations, Bank Secrecy Act & Anti-Money Laundering, IT, Tax Services and Consulting (ERM).

For more information on how EisnerAmper can meet your banking needs contact: Bridget Day, CPA Partner, EisnerAmper LLP 732.287.1000 bridget.day@eisneramper.com

www.eisneramper.com EisnerAmper LLP Accountants & Advisors

Independent Member of PKF International

New York

|

New Jersey

| Pennsyl vania

| Cayman Islands

Summer 2011

New Jersey Banker

27

Annual Conference

Meet the 2011 – 2012 New Jersey Bankers Association Officers and Board of Directors

Immediate Former Chair Gerald Lipkin, chairman, president and CEO, Valley National Bank, joins board members sworn in at the NJBankers 107th Annual Conference. Pictured, from left to right: Christopher Martin, chairman, president and CEO, The Provident Bank; Anthony Labozzetta, president and CEO, SussexBank; Michael Schutzer, president and CEO, Harmony Bank; Robert Stillwell, president and CEO, Boiling Springs Savings Bank; Mortimer O’Shea, president and CEO, Hilltop Community Bank; and Gerald Reeves, president and CEO, Sturdy Savings Bank.

Gerald Lipkin, immediate former chairman and chairman, president and CEO of Valley National Bank (left), passes the ceremonial gavel to NJBankers chairman for 2011 – 2012, Frank Kissel, chairman and CEO, Peapack-Gladstone Bank.

John E. McWeeney, Jr., president and CEO, NJBankers, presents the Forrey-Gallman Award to James Hyman, president and CEO, Hopewell Valley Community Bank.

New Jersey Bankers Association members receive an additional 5% discount* on New Jersey car insurance with High Point.

NJBA members understand the value of savings and service excellence. High Point Auto Insurance works with you to customize an auto insurance policy specifically to fit your needs. Peace of mind and money in your pocket — that’s more than just insurance.

Call 1-800-625-8903 today for your free quote and special 5% discount for NJBA members.

A member of

www.highpointins.com * Offer available to New Jersey residents only. Discount only applies to new and renewal policies underwritten 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. Other restrictions may apply. HP263/SG/082010

28 New Jersey Banker

Summer 2011

M

ore than 500 members, associate members, exhibitors and guests attended the NJBankers 107th Annual Conference in Aventura, Florida, in May. By all accounts, it was another successful event with notable attendance and celebrated speakers.

Congratulations to the 2011 – 2012 New Jersey Bankers Association officers whose terms began on May 14, 2011: Chairman Frank A. Kissel Chairman/CEO Peapack-Gladstone Bank

First Vice Chairman Kevin Cummings President/CEO Investors Savings Bank

Second Vice Chairman

NJBankers welcomes the following individuals who Have joined the Board of Directors:

Robert H. King Senior Vice President Roma Bank Many thanks to Gerald H. Lipkin, chairman, president and CEO of Valley

The

National Bank, for his service as NJBankers’ 2010 – 2011 chairman.

NJBankers extends its sincere thanks to the following individuals, whose terms have expired, for their distinguished service on the Board of Directors: Norman E. Beatty, First Hope Bank Steven E. Brady, Ocean City Home Bank Robert E. Davis, formerly of Rumson-Fair Haven Bank & Trust Donald Mindiak, BCB Community Bank John H. Wessling, III, Haven Savings Bank

Anthony Labozzetta, SussexBank Gerald L. Reeves, Sturdy Savings Bank Michael Schutzer, Harmony Bank

Congratulations to the following individuals upon their reelection to the Board of Directors: Christopher Martin, The Provident Bank Mortimer J. O’Shea, Hilltop Community Bank Robert E. Stillwell, Boiling Springs Savings Bank Also at the conference, the 2011 ForreyGallman Award was presented to James Hyman, president and CEO of Hopewell Valley Community Bank. The award is named for Robert C. Forrey and Emil A. Gallman, long-time chief executive officers of the New Jersey Bankers Association and New Jersey Savings League, who inspired association members with their leadership in assuring that members were well represented in the areas of government relations, public relations and educational opportunities. The Forrey-Gallman Award is bestowed upon members that have demonstrated longterm outstanding service to the New Jersey banking industry.

■

Power to Know

Specialized banking experience that understands your challenges.

With 300 financial institution clients, ParenteBeard’s financial services practice is one of the most experienced in the Mid Atlantic region. Our knowledge of banking operations, plus a core audit discipline and extensive compliance knowledge, means you get the full breadth of services your institution requires.

Working with you, our professionals provide an exceptional blend of technical expertise and personal service. Our size, our industry experience and our public company expertise have helped us become a recognized leader in the financial services industry. See the difference that experience makes.

Audit | Accounting | Tax | Business Advisory Services Parentebeard.com

800.267.9405

© Parentebeard LLC

New Jersey | Pennsylvania | New York | Delaware | Maryland | Texas

Summer 2011

New Jersey Banker

29

Behind the Teller Line

Schuyler Savings Bank A Time-Tested Community Bank Opens its First Branch

S

chuyler Savings Bank, headquartered in Kearny, New Jersey, recently opened a new branch in Harrison, the bank’s first branch in its 87-year history. The new branch, located at 203205 Frank E. Rodgers Boulevard North, opened its doors in February. The bank erected a new street clock at the corner of this location, which reflects the bank’s

logo and symbolizes 87 years of strength and stability throughout decades of economic changes.

Schuyler Savings Bank was founded in 1924 to serve the Lithuanian community in Kearny. Over the years, the bank has evolved with the community so that customers of all ages and cultures feel welcome. The bank recognizes that

Schuyler Savings Bank, founded in 1924, today is lead by its board of directors (from left to right): George Moroses, Laurence Mach, President George Halski, Chairman of the Board Robert Mooney, Bruce Kauffmann, Vice President James Cummings, and Vice President and Chief Financial Officer Alberto Alemany.

Artist rendering of the new Schuyler Savings Bank branch in Harrison.

30 New Jersey Banker

the needs of today’s customers are very different from past generations. With that, Schuyler’s board of directors moved to ensure that the bank keeps pace with current technologies and offers the same 24/7 banking services as larger banks, including debit cards, telephone and online banking, and a state-of-theart ATM that permits cash and check deposits and cash withdrawals. In addition, Schuyler Savings strives to meet the needs of the area’s diverse population by offering team members who speak English and a variety of other languages, including Spanish, Portuguese, Polish, Ukrainian and French. The bank’s many second- and-third generation customers, some of whom have been visiting the bank since childhood, are fiercely loyal.

Even though many have moved out of Kearny, they maintain their accounts with the bank.

“The key to Schuyler Savings Bank’s success and strength, throughout eightplus decades, has been relationships,” according to George Halski, the bank’s president and chief executive officer for 15 years. Schuyler’s management takes pride in the relationships the bank has forged with their customers over the years. Halski continued, “We simply try to provide the best personal service to our customers. Every customer relationship is important to us.” At Schuyler Savings Bank, employees know their customers by their first names. This winning formula has seen the community bank through depression, recession, war and worry since its founding in 1924.

Halski and Schuyler’s board of directors have long believed that the bank’s mission calls for outreach and support beyond its customer base, to the entire community. For this reason, Schuyler Savings Bank’s continued on page 35

Summer 2011

Feature

How Well Are You Managing Your Environmental Risk?

By Michael C. Benz

E

nvironmental contamination can adversely impact all types of real estate, from a strip mall in Freehold to vacant land in Hackettstown. Besides its potential to harm human health, contaminated property can pose serious financial and legal risks for lenders. To proactively manage their exposure to environmental risk, most lenders have a formal environmental policy in place.

These policies generally prescribe Michael C. Benz different levels of environmental due diligence required prior to closing new loans, extending or renewing existing loans, and foreclosing on property.

Of course, a policy is only effective if it remains current. If it is no longer in line with the bank’s business goals or risk tolerance, or does not address new environmental regulations or guidance documents, its value is limited.

Have you reviewed your environmental policy lately? If not, it’s probably time for an update. Here’s why.

First Things First: Why Does Environmental Due Diligence Matter?

When it comes to financing commercial real estate, environmental contamination is something that can come back to haunt you. Contamination on property securing a loan transaction can expose lenders to direct liability for cleanup costs, as well as to probable litigation. It can also cause buyers to default if they are forced to divert cash flow to pay for legal costs or remediation.

In the case of foreclosure, banks may forfeit their ability to qualify for secured creditor exemptions under CERCLA – and they’ll be taking title to property that may be difficult to sell. Finally, banks face collateral devaluation and the potential reputational risk associated with lending on or owning

properties making headlines for adverse environmental impacts.

Policy Basics The goal of environmental due diligence is to understand the environmental risk associated with extending credit on a particular property, and then factor any risk into the overall credit analysis. To that end, there are certain components that lenders should always include in the policy (tailored, of course, to the bank’s individual goals and risk appetite): • An objective; • A definition of roles and responsibilities; • A list of the types of properties subject to the policy; • An indication of the types of circumstances that merit greater scrutiny; • Procedures for ongoing monitoring of property risk; and • Prescriptive environmental due diligence tool(s) to be used for specific scenarios.

You should review each of these components periodically to ensure that they are still in line with your bank’s business model and goals, or when regulatory, competitive or other issues warrant it.

Today, all of the above likely apply. For example, according to Milford, CT-based Environmental Data Resources’ latest Benchmark Survey of Financial Institutions, 76 percent of SBA lenders across the U.S. have already adopted the U.S. Small Business Administration’s September update to its environmental policy (SOP 50 10 5(c)). The new ASTM vapor encroachment screening standard (E 2600-10), which lays out a plan for screening vapor encroachment on property involved in real estate transactions, is also prompting banks to update their policies – 52 percent said vapor migration/vapor intrusion is emerging as an environmental risk concern at their

institution. (For more about vapor intrusion, visit www.edrnet.com/vi.) Combine those issues with the fact that 92 percent of lenders who responded to EDR’s survey have been visited by a regulator in the past two years, and you can see why a policy update might be warranted.

Foreclosures are another highly relevant issue today, yet many banks’ environmental policies do not adequately address them.

This is a mistake, because when a bank takes the title to a property during foreclosure, it can be held liable for cleanup unless it takes steps to protect itself. That protection comes in the form of a Phase I environmental site assessment prepared in accordance with the U.S. EPA’s All Appropriate Inquiry Rule or its equivalent, ASTM standard E 1527-05. (As it does for borrowers, the inquiry protects lenders from environmental cleanup liability under the Comprehensive Environmental Response, Compensation and Liability Act, or state CERCLA-based programs by allowing them to claim status as an “innocent landowner.”) But many lenders rely on the Phase I prepared for the borrower – if they conduct environmental due diligence at all.

They should reconsider, because even if the borrower’s initial inquiry rose to the level of an AAI/ASTM E 1527-05-compliant Phase I, the report could be missing information the bank might consider critical, due to the difference in risk tolerances.

Bottom line: A sound environmental policy – one that is updated regularly – is a smart move. Consider updating yours today if you haven’t looked at it lately.

■ Michael C. Benz is director of sales for Environmental Data Resources (EDR). Based in Lavallette, he specializes in providing lending institutions with the information they need to assess, understand, and manage environmental risk. For more information on EDR’s 2010 Benchmark Survey of Financial Institutions or the tools available from EDR for helping banks manage their exposure to environmental risk, contact Mike at mbenz@edrnet.com or at 800-265-1613.

Summer 2011

New Jersey Banker

31

Feature

Directors and Managing Officers Conference a Rousing Success

T

John E. McWeeney, Jr., presents NJBankers Service Awards to, from left to right: Eric D. Gaver, Sturdy Savings Bank; Joseph J. Lukacs, Jr., Magyar Bank; Geoffrey M. Connor, The Provident Bank; Edward C. Gibney, Boiling Springs Savings Bank; and William J. Vander Eems, Atlantic Stewardship Bank, recognizing their many years of service to the banking industry in New Jersey.

(RIGHT) Dr. William Dunkelberg, professor, Department of Economics, Temple University, and chairman, Liberty Bell Bank, presented “Banks Won’t Lend? Or Businesses Won’t Borrow? A Small Firm Perspective on the Economic Outlook.”

he Directors and Managing Officers Conference was held for the first time at the Renaissance Woodbridge Hotel in Iselin and drew over 230 attendees.

Speakers included President and CEO of the American Bankers Association Gov. Frank Keating and Dr. William C. Dunkelberg, professor, Department of Economics, Temple University, and chairman, Liberty Bell Bank. Two panels shared timely information: the first panel on the DoddFrank Wall Street Reform and Consumer Protection Act and the second panel on the Future of Lending. James Hyman, president and CEO of Hopewell Valley Community Bank, moderated both panels. The Dodd-Frank panel included attorneys Robert Schwartz, Windels Marx Lane and Mittendorf; Douglas Faucette, Locke Lord Bissell and Liddell; and Donna Conroy, Frieri, Conroy and Lombardo. The second panel on lending included Robert Davis, executive vice president for mortgage finance risk management, ABA; William Githens, president and CEO, Risk Management Association; and Michael Moebs, principal, Moebs $ervices.

KNOWLEDGE IS THE BASIS OF SOUND ADVICE. TWENTY YEARS OF EXPERIENCE TELLS US SO. As an advisor to financial companies nationwide for more than two decades, Sandler O’Neill’s knowledge and insight have served clients well in bull and bear markets alike. The depth of experience gives our firm a unique perspective on how financial companies can best position themselves in the current environment.

Sound, straight-from-the-shoulder advice – it’s what we do best.

To learn more, please contact Fred D. Price, Managing Principal, at 800.635.6855, or visit www.sandleroneill.com.

Sandler O’Neill + Partners, L.P.

32 New Jersey Banker

Summer 2011

The Dodd-Frank panel included moderator James Hyman, president and CEO, Hopewell Valley Community Bank; Donna Conroy, Frieri, Conroy and Lombardo; Robert Schwartz, Windels Marx Lane and Mittendorf; and Douglas Faucette, Locke Lord Bissell and Liddell.

Robert King, senior vice president, Roma Bank, and NJBankers third vice chairman, welcomes the attendees to the 2011 Directors and Managing Officers Conference.

ABA President and CEO Gov. Frank Keating addressed the attendees, providing a Washington update.

(ABOVE) The second panel on lending included moderator James Hyman, president and CEO, Hopewell Valley Community Bank; Robert Davis, executive vice president for mortgage finance risk management, ABA; Michael Moebs, principal, Moebs $ervices; and William Githens, president and CEO, Risk Management Association.

(RIGHT) The attendees listened intently to the presentations and panels at the 2011 Directors and Managing Officers Conference.

More than 230 members attended the meeting.

IDEAS TECHNOLOGY

RESULTS Great Technology Services for Banks www.cocc.com 888.678.0444

Summer 2011

New Jersey Banker

33

Bank Notes

David Smith

Mark McCollom

Eric Heyer

ACCUME PARTNERS Mark Lindig has been appointed CEO at Accume Partners. Lindig has served as a regional managing director for Accume since August 2010. He succeeds Fred Nitting, who will assume the role of managing partner, focused on expanding and diversifying the firm’s portfolio of clients and services.

Additionally, David Smith, CAMS, has joined Accume Partners as compliance manager in the firm’s Financial Services Practice. He will be responsible for assisting clients with assessing their compliance infrastructure, documenting compliance risk, performing compliance monitoring and

Dennis Costa

Steven M. Klein

Virginia Bauer

Jerry Zaro

testing, providing compliance training and drafting policies and procedures. Smith is a Certified Anti-Money Laundering Specialist, and a member of the Institute of Internal Auditors and the Association of Certified Anti-Money Laundering Specialists. He is a graduate of the Stonier Graduate School of Banking and earned a bachelor’s degree in accounting from King’s College.

BOILING SPRINGS SAVINGS BANK Acela Roselle was promoted to senior vice president. She joined the bank in 1999 as the director of human resources. Roselle attended the Wood New York School of Business and

William Van Winkle

Douglas J. Heun

received the Society for Human Resource Management, Professional in Human Resources (SHRM PHR) Certification through Fairleigh Dickenson University. She is a member of the NJBankers HR Committee, SHRM North Jersey/Rockland Chapter, Commerce and Industry Association of New Jersey, NJ Business and Industry Association, and the Employers Association of New Jersey.

Griffin Financial GROUP Mark R. McCollom has been promoted continued on page 36

FOR ALL THE RIGHT REASONS Independent & Cost-Effective Portfolio Risk Review

LOAN REVIEW PROGRAMS

LOAN POLICY MAINTENANCE

LOAN LOSS RESERVE VALIDATION

PROBLEM LOAN MANAGEMENT

CREDIT DATABASE FORMATION

LOAN & CREDIT SEMINARS

PORTFOLIO STRESS TESTING

CREDIT ANALYSIS

PORTFOLIO ACQUISITION REVIEW

REGULATORY RELATIONS

CEIS REVIEW INC.

Toll Free 888.967.7380 www.CEISREVIEW.com

Professional Services for Bankers by Bankers

Offices: Florida, Maine, New York

34 New Jersey Banker

Summer 2011

Mobile Banking

Schuyler Savings Bank

continued from page 27

continued from page 30

connection with the bank. We want our future Harrison customers to know that we are the bank people have trusted for 87 years and we are genuinely concerned for them and their financial needs.”

Schuyler Savings Bank maintains its headquarters at 24 Davis Avenue in Kearny and operates two branch offices in Kearny and now in Harrison. For more information, visit the bank’s website at www.schuylersavings.com.

■

management and board members are active in the community and sit on the advisory boards of a number of local organizations. Schuyler Savings also offers financial support to local non-forprofit and civic organizations.

Halski notes, “As we have seen at our Kearny headquarters, our customers 9813 TKBbecause NJB Halfthey Pagefeel 1.2-2P_TKB NJB Half Page 1.2-2P 3/2/10 7:45 PM Page 1 are loyal an emotional

Online Web-based video presentations inspired by actual client experiences, hosted by the Principals & staff at S.R. Snodgrass.

The Knowledge Bank TM

Brown is more encouraged by what he sees.

“There is a recognition that no one can do it alone,” Brown said. “There is an acknowledgement that there will be more cooperation required to make it successful.”

And he sees banks as holding the strongest cards. “The banks are in the pole position from the consumers’ point of view. It is someone they know and who handles their money safely and securely. That can’t be underappreciated.”

While it may be too early to pick the winning technology, many small and midsized banks would be mistaken if they simply sit back and wait for the dust to clear, notes Amy Wilkinson, a product manager at Fiserv Mobile Solutions. Now is the time to prepare for the brave new world of smart phone point and click purchasing, she advises.

One might be person-to-person bill payment, which could get customers comfortable with making payments with their smart phones. Another might be teaming up with a local restaurant to offer a coupon that can be used. In fact, now is the time – Wilkinson predicts a national mobile infrastructure starting to take shape as early as 2012.

She advises banks to use these and other “baby steps” to prepare their customers for the next big leap. “When all of these things come together, it’s imperative that consumers find it easy to use,” Wilkinson said.

■ Scott Van Voorhis is a freelance writer.

Only from S.R. Snodgrass

“Your Key to a Wealth of Information” Currently available for viewing: Improving Director Effectiveness The Strategic Planning Process • Strategic Planning Issues • Product Design for Profitability • •

Jack Salvetti, Managing Principal

• SOX 404 Harry Bertrand, Principal

• Bank Secrecy Act Training Debra Masters, Principal •

Fair Value Measurements Under Statement of FAS 157

Bob McDonough, Principal •

Network Security Attack & Penetration Highlights

Andrew Olmo, Principal •

Exercising Incentive Stock Options & Nonqualified Stock Options

Richard Pacella, Principal

EXCLUSIVELY AT

www.srsnodgrass.com

Summer 2011

New Jersey Banker

35

Bank Notes to head of the Griffin Financial Group. In this position, he will be responsible for dayto-day management of investment banking operations for banks, thrifts, specialty lenders and asset managers. A CPA, McCollom is a member of the American Institute of Certified Public Accountants and the Pennsylvania Institute of Certified Public Accountants.

He is also a member of the CFO Councils for both the Financial Services Roundtable and the BAI, and serves in leadership roles for several nonprofit organizations.

KEARNY FEDERAL SAVINGS BANK Eric Heyer has recently been named senior vice president and CFO of Kearny Federal Savings Bank. Before joining Kearny Federal, Heyer worked as the senior vice president, treasurer and CFO of American Bank of New Jersey and CFO of American Bancorp of New Jersey, Inc. He has a bachelor’s degree from Rutgers University in New Brunswick and 25 years of banking experience. Heyer

is currently a member of the Financial Managers Society.

LIBERTY BELL BANK Dennis Costa has been named senior vice president of finance at Liberty Bell Bank.

Costa is the bank’s principal accounting and finance officer and responsibilities include all regulatory, managerial and financial accounting. He joined Liberty Bell Bank in 2004 as vice president and controller.

NORTHFIELD BANK Steven M. Klein has been appointed COO at Northfield Bank and will retain his responsibilities as CFO. Klein joined Northfield as CFO in 2005. Previously, he was an audit partner with KPMG LLP, serving the community banking practices of New Jersey and Philadelphia. Klein earned a bachelor’s degree in business and accounting from Montclair State University. He is a CPA and member of the American Institute of Certified

Public Accountants and the New Jersey Society of Certified Public Accountants. He also serves on various committees of the New Jersey Bankers Association and the American Bankers Association.

PARENTEBEARD LLC ParenteBeard LLC has launched a Sustainability Practice which will work with clients to establish sustainability initiatives, including creating the organization’s strategy, assuring the credibility and transparency of sustainability measures already in place, and teaming with clients to create sustainability and Corporate Social Responsibility reports.

The new practice is led by Cynthia (Cindy) Wollman.

Rumson-Fair Haven Bank and Trust Virginia Bauer, Thomas Unterberg and Jerry Zaro have been elected to serve on the bank’s board of directors. Bauer and Zaro are new to the board, while Unterberg rejoins the

OUR eneRgy fUtURe IS COMIng tOgetheR. We all want the same thing: affordable, reliable, clean, and secure sources of energy. The good news is that we know how to get there, and we’re already on the way. Energy markets are increasingly competitive. New Smart Grid technologies are making energy use more efficient. Investments in nuclear, solar, wind, and natural gas will more cleanly provide electricity for homes and businesses today, and for the cars and trucks of tomorrow. At Constellation Energy, NJBankers Endorsed Electricity Supplier, we understand the challenges and we’re delivering the innovative energy solutions that are helping our customers succeed and our communities prosper. newenergy.com/NJBA

© 2011. Constellation Energy Group, Inc. The materials provided and any offerings described herein are those of Constellation NewEnergy, Inc., a subsidiary of Constellation Energy Group, Inc. Brand names and product names are trademarks or service marks of their respective holders. All rights reserved. Errors and omissions excepted. Environmental information about Constellation Energy’s competitive energy supply services along with other information about our business is available at: www.newenergy.com and our toll-free number: 866.237.POWER.

36 New Jersey Banker

Summer 2011

board after a brief hiatus. In addition, the bank previously announced the appointment of William Van Winkle to the board.

Bauer is currently CEO of GTBM, Inc, which develops and markets proprietary software solutions. Previously, she held numerous executive positions and was appointed by Gov. Jon Corzine to the Board of Commissioners for the Port Authority of New York and New Jersey. Bauer also served as Commerce Secretary for the State of New Jersey.

Zaro is currently counsel to the firm Sills, Cummis and Gross. Previously, he served in the cabinets of both Gov. Jon Corzine and Gov. Chris Christie as chief of the Office of Economic Growth and as a member of the NJEDA. He has also served as chairman of the New Jersey Highway Authority and as commissioner of the New Jersey Sports and Exposition Authority.

Van Winkle is a financial professional, and founder of Van Winkle Associates Unterberg serves as chairman and the general partner of Unterberg Capital LLC. He has been in the investment banking business since 1956 and has been a director or trustee of a number of public and private companies and institutions.

SPENCER SAVINGS BANK Anthony S. Cicatiello, chairman of CN Communications International, Inc., has been reelected to serve on the board of directors. For three decades, Cicatiello has brought diverse experience to the complex intersection of business, government and media.

Nicolas Lorusso has been reelected to the board. He formerly served as president of Spencer Savings Bank and retired in 1996. He has been on the bank’s board since 1984, and has previously served as chairman. During his time on the board, he has chaired several board committees.

Barry C. Minkin has also been reelected to the board of directors. Minkin also served, and continues to serve, as chairman and a member of other board committees. Prior to his election to the board, he served as senior vice president and director of Strategic Benefit Planning for The Teare Group, Inc., and is a charter member of United Benefit Advisors.

STURDY SAVINGS BANK Business leader Douglas J. Heun, CPA has been appointed to Sturdy Savings Bank’s board of directors. Heun has been a practicing accountant and firm owner for nearly four decades. He co-founded Tracey, Heun, Brennan & Company in 1972. He has earned numerous credentials, including Personal

Financial Specialist, Certified Financial Planner, Accreditation in Business Valuation and Certification in Financial Forensics. He is also a licensed Public School Accountant. Heun and his firm recently merged with the accounting firm, Friedman LLP. Heun earned a bachelor’s of science degree in accounting and business administration from Drexel University.

■

Do your statements look like this? �

Full-Color Redesigned Statements with Custom Formatting

�

Interactive PDF Delivered Electronically

�

Reduced Processing Costs

�

Targeted Cross-Marketing

�

Eliminate Inserts with Onserts

�

Built-In Response Buttons

�

Improved Customer Service

Call

888-FSI-6200 today to schedule an online demo and see what eDoc can do for your statements.

Trust well placed.

21 Harristown Rd, Glen Rock, NJ 07452 • 201.652.6000 • 888.FSI.6200 • www.insideFSI.net Core Processing • Item Processing • Integrated Packages • Corporate & Branch Capture OFAC & Patriot Act Solutions • Web Hosting & Services

Summer 2011

New Jersey Banker

37

Bank Shots

Millington Savings Bank supports the efforts of local Girl Scout Erin Caffrey, who is working on her Gold Award project.

Caffrey is a senior at Watchung Hills Regional High School and an active member of the school’s Fine Arts Program. The goal of the Gold Award project is to develop a strong and steady relationship between student artists and businesses in the community. To support this effort, Millington Savings Bank displayed artwork created by Watchung Hills Regional High School’s fine arts and photography students at the bank’s headquarters.

Bank of New Jersey hosted a delegation of prominent Japanese bankers at its headquarters in Fort Lee. During the event, executives from the JA Gifu Bank participated in a site tour, seminar, and Q&A session with Bank of New Jersey management to learn about today’s business and banking environment in the NJ/NY area. Pictured with the delegates from Japan are: Michael Lesler, president and chief operating officer, Bancorp of New Jersey (fourth from left); Albert F. Buzzetti, chairman of the board and CEO, Bancorp of New Jersey (sixth from left); Diane Spinner, executive vice president, Bancorp of New Jersey (seventh from left); Mark Sokolich, Fort Lee Mayor (sixth from right); and Leo Faresich, executive vice president, Bancorp of New Jersey (second from right).

Somerset Savings Bank provided the Central Jersey Housing Resource Center (CJHRC) with a grant to support the organization’s efforts in assisting area households that are struggling to find housing that meets their needs and means. Funding provided by Somerset Savings Bank will be earmarked by CJHRC for client counseling and a portion will be used for pre- and post-purchase counseling courses. Other funds will be dedicated to delinquency/foreclosure counseling and financial literacy counseling. David Wigg, vice president (left) and William Taylor, president (right) of Somerset Savings Bank present Sharon Clark, executive director of CJHRC, with a check.

BANKERS WITH BRUSHES – This volunteer crew of Columbia Bank employees recently completed a “Paint Day” at the Phoenix Center, a Nutley-based school that provides educational and therapeutic services to children with disabilities. All labor and materials were donated by Columbia Bank.

Bogota Savings Bank donated $5,000 to Family Promise of Bergen County. A widely-recognized national organization, Family Promise assists homeless families return to independent living through community support and donations.

The organization operates 163 national affiliates, 16 of which are based in New Jersey. The money donated will cover a year’s worth of expenses in a transitional apartment. Pictured, from left: Joseph Coccaro, president and CEO, Bogota Saving Bank; Kate Duggan, executive director, Family Promise; Nancy Woods, president, board of trustees, Family Promise; and Sandra L. Sievewright, senior vice president, Bogota Savings Bank.

Regal Bank celebrated Earth Day by asking town residents to stop by their Livingston or new Roseland branch and bring their documents to be shredded or drop off batteries and cell phones for recycling. Hundreds of pounds of paper were brought in to be recycled, and many used cell phones were brought in to benefit Cell Phones for Soldiers, a nonprofit organization. The staff of the Livingston branch wear their Earth Day shirts, made of recycled material, and gather around the shred boxes.

38 New Jersey Banker

PWCampbell Food Drive PWCampbell and Studio 109 Designs conducted a canned food drive to benefit the Greater Pittsburgh Community Food Bank. Employees were asked to donate canned goods in exchange for events such as a pizza lunch, raffle, an ice cream social, Bring Your Child to Work day and even a full week of casual days. The original goal of 500 cans was met before the campaign officially began, and by the end of the month, 1,250 cans were donated.

Summer 2011

THE POWER OF AN ADVANCE

One advance can help fund hundreds of neighborhood needs.

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

Sussex Bank, an FHLBNY member, used an advance to help provide financing assistance to Canterbury Village, a senior assisted living residence in West Orange, New Jersey.

Currently home to 40 senior citizens, the advance helped stabilize the not-for-profit housing facility’s economic future, while a portion of the funding was used to renovate its Victorian structure. This project enabled Canterbury Village to continue to offer quality care and housing services to seniors in Essex County and beyond, as it has since 1921.

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

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

Visit star.com/learnmore

In today’s changing debit landscape, choose the STAR® Network to ensure success every step of the way.

Regulatory change is coming, and you need to prepare. The STAR® Network adds value beyond the transaction with: • Cutting-edge Security Solutions

• Industry-leading Innovation

• Coast-to-coast POS/ATM Access

• Proven Commitment

©2011 First Data Corporation. All Rights Reserved.