Transactions Magazine - September 2012

September 2012

ConventionA PHOTO RECAP OF VAIL

Page 44

GivinG BaCk2012 COMMUNITY SERVICE AWARDS

Page 10

that’s My BankCOMMUNITY BANKS & COUNTY FAIRS

Page 16

Ronald B. GeibThe 2012-2013 PACB Chairman

Introducing

THE PUBLICATION OF THE PENNSYLVANIA ASSOCIATION OF COMMUNITY BANKERS

Pennsylvania’s Community Banks. For people and their neighborhoods.

2 | Transactions | www.pacb.org

UPCOMING EDUCATION EVENTS

Plan your training for this year with ourvariety of educational seminars andconferences. Registration is easy and

just a click away at pacb.org.

APRIL • 2013Security SeminarApril 9, 2013Harrisburg, PA

CCBSP Q2 WebinarApril 15, 2013

JUNE • 2013Directors ConferenceJune 4-5, 2013Hershey Lodge - Hershey, PA

JULY • 2013CCBSP Q3 WebinarJuly 15, 2013

SEPTEMBER • 2013ALM SeminarSeptember 10, 2013PACB Headquarters - Harrisburg, PA

OCTOBER • 2012ALM SeminarOctober 3, 2012PACB Headquarters - Harrisburg, PA

Tech Conference October 10, 2012PACB Headquarters - Harrisburg, PA

Marketing ConferenceOctober 17-18, 2012Hilton Garden Inn - Hershey, PA

NOVEMBER • 2012Directors CollegeNovember 1, 2012Doubletree Monroeville - Monroeville, PA

Directors TrainingNovember 7, 2012Radisson Hotel Valley Forge - King of Prussia, PA

Directors TrainingNovember 13, 2012Hershey Lodge - Hershey, PA

Directors TrainingNovember 14, 2012Scotch Valley CC - Hollidaysburg, PA

JANUARY • 2013CCBSP Q1 SessionJanuary 15, 2012DoubleTree Monroeville - Monroeville, PA

CCBSP Q1 SessionJanuary 16, 2012PACB Headquarters - Harrisburg, PA

FEBRUARY • 2013Commercial Lending SchoolFebruary 19-20, 2013Crowne Plaza Harrisburg - Harrisburg, PA

Credit Administration SeminarFebruary 26, 2013PACB Headquarters - Harrisburg, PA

SEPTEMBER • 2013 (CONT)136th Annual ConventionSeptember 20-24, 2013Boston Marriott Copley Place - Boston, MA

OCTOBER • 2013CCBSP Q4 WebinarOctober 22, 2013DoubleTree Monroeville - Monroeville, PA

CCBSP Q4 WebinarOctober 23, 2013PACB Headquarters - Harrisburg, PA

NOVEMBER • 2013ALM SeminarNovember 5, 2013Pittsburgh, PA

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is your bank

prepared?

IN 2013, YOUR STAFF CAN BECOME CERTIFIED COMMUNITY

BANK SECURITY PROFESSIONALS.

In partnership with:

www.protectmybank.com

Please contact Saundra Cunningham, VP-Education Services, at 717-231-7447

or [email protected] about this important, new certification.

INTERESTED?

Q1 Sessions January 15, 2013 • DoubleTree Monroeville • 101 Mall Blvd., Monroeville, PA 15146January 16, 2013 • PACB Headquarters • 2405 N. Front St., Harrisburg, PA 17110

www.pacb.org | Transactions | 3

010101101010001111001010111010011010101001001010010010100100101001010010101001010101010111111110100010001001010010101001000000011110101001111101010111110100000101101010011101010001011111100111000101111110001010110010100010001010100101001001011110011100010111111000101010100001000 FRAUD 0010100010001010010001001100100100101010100000010010 PHISHING 001111111100000101010101001110100111000011110010101001010010010101000001 IDENTITY THEFT 11101010011111010101111101000001011010100110000000111011111000111111110000010101 1000100010100100010011001001001010101 0010101001000000011110101001111101010101010001011111100111000101111110111010110010100010100010001010010001001100100100101010100000001110111110001100 010000001010101010011101001110000111100101010010100100101001010100100000001111010100111110101011111010000010110101001110101000101111110011100010111111000101011001010001010001000101001000100110010010010101010000000111011111

is your bank

prepared?

IN 2013, YOUR STAFF CAN BECOME CERTIFIED COMMUNITY

BANK SECURITY PROFESSIONALS.

In partnership with:

www.protectmybank.com

Please contact Saundra Cunningham, VP-Education Services, at 717-231-7447

or [email protected] about this important, new certification.

INTERESTED?

Q1 Sessions January 15, 2013 • DoubleTree Monroeville • 101 Mall Blvd., Monroeville, PA 15146January 16, 2013 • PACB Headquarters • 2405 N. Front St., Harrisburg, PA 17110


ContentsSeptember 2012

FEATURE ARTICLES2012 Community Service AwardsAnnouncing the 2012 PACB Community Service Award winners.

Preserving Pennsylvania’s Agricultural SpiritA look at how Somerset Trust Company and MCS Bank are giving back to their communities through local County Fairs.

Notice of Proposed RulesWhat does Basel III mean for you and what does PACB have planned to help.

The PACB Strategic Plan: Ron Geib’s Key To Our SuccessAn overview of PACB’s new strategic plan and how PACB’s new Chairman, Ron Geib, plans to help the organization carry it out.

Anticipated Effect on Pennsylvania Banking Institutions of Department of Banking Merger with Securities CommissionWhat does this recent merger mean and how does it affect you?

Blindsided By Basel IIIA multi-dimentional view on how Basel III will impact Community Banks.

Understanding the Details of ALLL Assessment for DirectorsA look at Allowance for Loan and Lease Losses and how it is related to income and loss.

Basel III: Key Points for Community BankersThe four main points where Basel III has an impact on Community Banks.

Five Minutes With Congresswoman Allyson SchwartzThe Congresswoman for Pennsylvania’s 13th Congressional District discusses redistricting, her accomplishments, her committees, and more.

PACB’s 135th Annual Convention RecapA photographic look back at PACB’s 135th Annual Convention in Vail, Colorado.

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ADVERTISERSFinancial Outsourcing SolutionsRhoads & Sinon LLPSignature Information SolutionsBybel Rutledge LLPParenteBeardSmith Elliott Kearns & Company, LLCShumaker Williams P.C.SR Snodgrass

1515213335393943

ON THE COVERIntroducing PACB’s new Chairman, Ron Geib. A look into his goalfor his year as Chairman - putting the Strategic Plan into action.


ON THE COVERIntroducing PACB’s new Chairman, Ron Geib. A look into his goalfor his year as Chairman - putting the Strategic Plan into action.

6 | Transactions | www.pacb.org THAT’

S M

Y B

AN

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Transactions Magazineis published monthly by

Pennsylvania Association of Community Bankers2405 North Front Street, P.O. Box 5319

Harrisburg, PA 17110-5319

BUSINESS HOURS:8:30 a.m. - 5:00 p.m. M-FTelephone: 717.231.7447

Fax: 717.231.7445 www.pacb.org

PACB STAFF:Dominic D. DiFrancesco, [email protected] - President/CEO

Tim G. Arthun, [email protected] - Director of Government Relations Natalie S. Bombatch, [email protected] - Publications Manager

Saundra J. Cunningham, [email protected] - VP–Education ServicesEric A. Kovac, [email protected] - Publications Manager

Patricia Kuharic, [email protected] - Administrative AssistantShirley A. Regan, [email protected] - Comptroller/Office Manager

2012-2013 PACB LEADERSHIP EXECUTIVE COMMITTEEChairperson - Ronald B. Geib

President/CEO, Harleysville Savings Bank

Chairperson Elect - Dennis D. CirucciPresident/CEO, Alliance Bank

Vice Chairperson - Andrew W. HasleyPresident/CEO, Allegheny Valley Bank

Secretary/Treasurer - Terry L. FosterEVP/CEO, MCS Bank

President/CEO - Dominic D. DiFrancescoPennsylvania Association of Community Bankers

Immediate Past Chairperson - Chuck LeyhPresident/CEO, Enterprise Bank

General Counsel - Keith A. Clark, Esq.President, Shumaker Williams, P.C.

STANDING COMMITTEES: CHAIRS & VICE CHAIRSEDUCATION

Gary Bradley, Cresson Community BankWendy Nagle, C&G Savings Bank

FINANCE & BUDGETTroy M. Campbell, Altoona First Savings Bank

Roger A. Zacharia, Ambler Savings Bank

FIRSTPACGeorge M. Evans, Indiana First Bank

LEGISLATIVERory Ritrievi, Mid Penn Bank

MARKETINGPat Evans, Northwest Savings Bank

Linda DeAngelis, C&G Savings Bank

MEMBERSHIPKevin J. Gallagher, Huntingdon Valley Bank

Barron P. McCune, Community Bank

STRATEGIC PLANNINGTim Zimmerman, Standard Bank, PaSB

Terry Sager, William Penn Bank




A WORD FROM PACB’S CHAIRMAN

First and foremost, I’d like to thank my fellow PACB members. It’s an incredible privilege to serve as PACB’s Chairman. I greatly appreciate the confidence and trust that you have in me. I’d also like to thank Chuck Leyh for his service to PACB during the past year. He visited with a majority of our member banks to help PACB de-velop a strategic plan. Though I won’t be visiting each bank individually, I plan to attend as many regional meetings as possible to help PACB move forward in the implementation and execution of the strategic plan.

I like to think about the strategic plan in terms of baseball and the concept of synergy. For me, synergy is when a team gathers to solve a challenge that results in a solu-tion that no one individually owns. In baseball, for a team to work together as one, to win, each player needs to be aware of his individual duties. It is synergy that will help the community banking industry survive and succeed.

I have shared the following quote that I found on Suc-cessories.com with my staff at Harleysville Savings Bank, because not only is synergy important for the community banking industry as a whole, but also for our individual bank teams. “The strength of the team is in each individual member…the strength of each member is in the team.”

Synergy is the habit of creative cooperation or team-work. Two people, creatively cooperating, will be able to produce far better results than either one would alone. Synergy lets us discover jointly things that we are much less likely to discover by ourselves. Finding

a third alternative is not a compromise; it represents a win-win situation for both parties.

As I begin my term as PACB Chairman, I urge you to keep this concept of synergy in mind and move forward with your fellow community bankers. Rec-ognize and value the differences between your peers and synergize with them. It is especially important at this time that you, as a member of PACB, remain ac-tive and involved so that together we can deal with the issues ahead of us like, BASEL III and the TAG Exten-sion. Our individual voices may not be far reaching, but when we synergize and band together as a team, our voice will be heard loud and clear.

It was extremely encouraging to hear from so many of you at the Annual Convention in Vail. The beauty of Vail was an awesome environment for Pennsylvania community bankers to gather and hear from regulators, vendors, and each other. I received many offers of help from members and their spouses and vendors. You’re engaged and you know that you need to be involved with PACB to survive. Our power is in our numbers.

On a final note, please feel free to call me should you need any assistance. And when you do call, please don’t apologize for taking my time. I have a support system built around me that includes my wife, my team at Harleysville, and the staff at PACB. They help me so that I can serve you.

P.S. Go Phillies!

PACB CHAIRMAN RON GEIB


COMMUNITY BANKERS IN ACTION!

We’re mad as…well you know…and we’re not going to take it anymore! While serving as county com-missioner, I would hear comments like this one all the time. Very rarely did it result in any meaningful outcomes. Passion is a great thing, and some people simply need to vent. There are times when passion and venting – simply showing your emotions – is not enough. Now is one of those times!

Community bankers across the country are taking action to convey their frustrations. At a time when community banks are threatened daily in the name of Wall Street, Congress continues their outright assault on community banking. Whether by word or deed, the policies expressed by Washington are driving as-set consolidation through bank mergers. Candidates like Elizabeth Warren push a regulatory agenda that hurts Main Street banks. President Obama speaks of the evils of the banking industry in nearly every polit-ical speech. Even a self-proclaimed “pro-business” Re-publican-led US House of Representatives has pushed back on our need to pass a (NO COST TO THE TAX PAYERS) extension of TAG. It is indeed time for com-munity bankers to take action!

In this month’s Transactions you’ll meet PACB’s new chairman, Ron Geib. Ron is the President and CEO of Harleysville Savings Bank. Like every successful lead-er, Ron understands the power of “Team.” As individu-als our voice is limited, but when we stand shoulder to shoulder we become a force. Ron will continue to lead PACB with the same enthusiasm as Chuck Leyh, and with Chuck’s same commitment to energizing partici-pation in PACB. It is one thing to be a member and a much more powerful thing to be involved.

If you need a few ideas on how to take action, I have some suggestions to share. First, this presidential elec-tion is meaningful. The outcome will have a dramatic impact on the community banking industry. While your friends, neighbors and colleagues complain about being overwhelmed by the commercials and mail and debates, you have to remain focused. Listen to each can-didate’s daily message, because they are not alike. It is up to you to decide which candidate best reflects your beliefs in the greatness of America. Once you decide, vote! There is never a good excuse not to vote.

As a community organization you can provide voter registration forms and even host Saturday morning events to draw in your customers and register your neighbors. In Pennsylvania, voter registration closes 30 days prior to the election, so if you plan an event, you need to do it soon. Voter registration forms can

be obtained at the county courthouse and through most State Senate and House of Representative offices. Call ahead if you plan on asking for a large quantity of registration forms.

Taking action is important, and in campaigns, money matters. Money allows candidates who share your views to get their message out, in order to attract vot-ers. In Texas, a group of community bankers formed a coalition to raise money for the Presidential candidate of their choice. They wanted to make certain that there was a way for community banks across the country to give to a campaign in a way that registered the support of the community banking industry. They worked with the campaign to organize a code that would identify every contribution made in the name of community banking. It was an innovative idea and a powerful op-portunity for community bankers across the country to band together. There is power in numbers!

My message is simple. With all the significant issues we have on our plate – overcoming Basel III, TAG, CU business lending and a myriad of regulatory burdens – we need to stand together and take action.

The Presidential Election of 2012 is just about one month away, and that means Pennsylvanians will de-cide the fate of a President, a US Senator, 18 US Con-gressmen, 3 statewide officers, 25 PA Senators and 203 members of the PA House of Representatives. Now is the time to stop venting and get involved.

Likewise, now is the time to get actively involved with PACB. Our committees are still in formation and the goal is that every member bank assigns someone to actively engage in one or more of those committees. Rest assured we make it easy. In most cases your voice can be heard without ever leaving your office. We do this because we respect your time and the demands that come with a small business. We make it easy, be-cause our success depends upon your participation.

As Chairman Ron says, “The whole is greater than the sum of its parts.” Get involved, and together we can ensure the future of community banking in Pennsyl-vania and throughout this great country.

PRESIDENT/CEO NICK DIFRANCESCO


The Directors College is an interactive one-day seminar to provide ongoing education to bank directors on current topics and various elements of bank supervision. It is designed to help directors, both new and experienced, stay abreast of the ever-changing regulatory and economic environment. Now more than ever, directors are under constant pressure to remain current in their knowledge of the banking industry and the segment their institution serves. There must also be a basic understanding of what issues are currently impacting their institution’s financial performance and competitive environment. This program is offered in partnership with the Federal Deposit Insurance Corporation (FDIC) and includes a general session on current topics affecting community banks, a luncheon presentation on economic and banking conditions, and a choice of three interactive breakout sessions. There are six breakout session topics offered and each attendee can tailor this seminar to their own individual needs by registering in advance for those topics of most interest.

1. MANAGING INTEREST RATE RISK IN TODAY’S ENVIRONMENTThis session will discuss the importance of interest rate risk (IRR) management strategies and practices in today’s challenging interest rate environment. The session will touch on an overview of IRR management techniques and Board responsibilities. Directors will have an opportunity to participate in a group case study on evaluating IRR strategies and approaches. This session will conclude with a need-to-know overview of recent regulatory guidance on IRR.

2. INFORMATION TECHNOLOGYThis session will provide an overview of the information technology examination process as well as common examination findings. Directors’ roles and responsibilities in information technology oversight will be discussed. The session will also provide insight to emerging technology trends such as mobile banking, vendor hosted board packets, and personal tablets (e.g., iPads).

3. COMMUNITY BANKINGThis session will provide an opportunity for participants to hear about the FDIC’s perspective on community banking and to dialogue on broad-based themes. Learn what initiatives are planned for 2012 and how the financial crisis has impacted community banks. Recent exam trends and current issues facing community banks will be discussed.

4. NEW DIRECTOR GUIDANCEThis session will focus on fundamental board governance issues and is designed for Directors with less than five years experience. In addition to discussing participant questions, the session will cover Directors’ roles and responsibilities, insider rules, and effective ways to monitor bank performance.

5. COMPLIANCE MANAGEMENT SYSTEM: ENSURE YOUR BANK MEETS REGULATORY STANDARDSThis session will provide an excellent understanding of what the consumer protection examiners look at to arrive at your Compliance Management System

(CMS) rating. Directors will be provided with an overview, expectations, and best practices regarding the CMS elements: Board and Management

Oversight; Compliance Program (including policies and procedures; monitoring; training; and complaint resolution);

and Compliance Audit. Real world examples will be used to apply the CMS standards.

6. HOW DO EXAMINERS ASSIGN LOAN CLASSIFICATIONS AND RATE ASSET QUALITY?Do you know how examiners assign classifica-tions and rate your loan portfolio? This session will focus on the regulatory perspective on loan classifications and the elements of lending that

contribute to rating the Asset Quality component of the CAMELS rating system. Participants will have an

opportunity to interact through case studies, reviewing pertinent aspects of loan examples and assigning appropri-

ate classifications based upon the Six “P’s” of Credit.

WHAT IS THE DIRECTORS COLLEGE?

BREAKOUT SESSION OPTIONS

DIRECTORS COLLEGENOVEMBER 1, 2012

Stay up-to-date on the continuously changing regulatory and economic environment so you can avoid the consequences of noncompliance.

CREDITS: Attendees are eligible to earn up to 5 CPE credits and 4 CLE credits.QUESTIONS: Contact Saundra J. Cunningham, VP-Education Services, at 717.231.7447 or [email protected].

REGISTER ONLINE BYOCTOBER 12, 2012 AT PACB.ORG/EDUCATION


COMMUNITY SERVICE AWARDS20 12

Overall Winner

BRENTWOOD BANKBrentwood Bank celebrated their 90th anniversary this year with a special project, “90 Causes for 90 Years.” To show their appreciation to those who have made this milestone possible, their customers and the communities they serve, the bank donated to and supported more than 90 charitable organiza-

tions in local communities, including the American Cancer Society Relay for Life, the Bethel Park Volun-teer Fire Department, and many others. In addition to support directly from the bank, Brentwood Bank team members dedicated countless hours to these and other community organizations.


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Regional WinnerALLEGHENY VALLEY BANK

This year, Allegheny Valley Bank contributed to The Edu-cation Partnership “School Supply Drive” and “Holiday In-School Distribution Program.” The “School Supply Drive” campaign resulted in $2,035 in monetary donations and seven boxes of school supplies, whose estimated value was more than $600. The “Holiday In-School Distribution Program” helped 5,200 students in the community. Along with The Education Partnership’s staff and board mem-bers, Allegheny Valley Bank employees and other volun-teers visited fourteen participating schools in December to distribute gifts of school supplies to students. For some students, it was the only holiday gift they received.

Regional WinnerALLIANCE BANK

Regional WinnerBRYN MAWR TRUST

As part of their “Community Involvement Program,” Alli-ance Bank employees donated toys to The Delaware Valley Children’s Charity, which they have supported for more than 20 years. The bank also organized two food drives benefitting the Upper Darby Food Center. Additionally, Alliance Bank participated in two local communities’ Crime Prevention and National Night Out celebrations. All of the proceeds went to the Delaware County Hero Scholarship Fund and the Spring-field Community Watch Organization. Finally, bank employ-ees volunteered for the Lansdowne-Yeadon Elm Street Pro-gram to help renovate the homes of elderly, low-income, and disabled persons in Lansdowne and Yeadon.

Bryn Mawr Trust participated in the “Career Awareness Pro-gram” for children in the Fresh Air Fund, an organization that provides free summer vacations to children from underserved New York City neighborhoods. Younger children in the pro-gram enjoy simple summer activities with host families, while older children expand their experience in the program through the “Career Awareness Program.” Eight participants, ranging in age from 12 to 15, visited five different organiza-tions to meet people in a variety of jobs. During their visit to Bryn Mawr Trust the children were greeted by Chairman and CEO Ted Peters, who spoke about the bank, different careers in the banking industry, and banking in general.

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Regional WinnerCOMMUNITY STATE

BANK OF ORBISONIA

This year, Community State Bank of Orbisonia celebrated their 60th anniversary by holding the “60th Anniversary Community Success Contest.” The goal of the contest was to share their 60 years of success throughout their market area by presenting volunteer organizations with $5000 grants. More than 60 organizations applied for the grant, and three out-of-area judges selected five winners: Shade Gap PTO Playground Improvement Project, Huntingdon Area Meals on Wheels, Children’s Health Fair, sponsored by the Auxiliary to JC Blair Hospital, Hustontown Branch Library, and American Youth Soccer Organization. Addi-

Regional WinnerFIRST FEDERAL SAVINGS

AND LOAN OF GREENE COUNTY

Regional WinnerFIRST NATIONAL BANK

OF MERCERSBURG

The First Federal Savings and Loan of Greene County’s project this year was providing support for the American Cancer Society, an organization dedicated to helping per-sons who face cancer. The American Cancer Society sup-ports research, patient services, early detection, treatment and education. One hundred bank employees contributed time toward the organization’s Relay for Life event, gifts, and financial support to this worthy cause. Employees also held raffles to raise funds for the organization.

Through the “Teach Children to Save” program, employ-ees at the First National Bank of Mercersburg taught more than 1,500 students the importance of saving money, how to save money, and the difference between a want and a need. Each class received a piggy bank and as a group decided on a savings goal, including: donations to Hai-ti, donations to animal shelters, pizza parties, books for the school library, and even a hamster class pet. In addi-tion the bank provided money- and coin-themed activity sheets, pencils, erasers, and coin sets as prizes.

tionally, 10 more organizations were chosen as honorable mentions and received $500 grants.

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Regional WinnerFIRST NATIONAL BANK

OF MINERSVILLE

In a multi-faceted effort, the employees of The First Na-tional Bank of Minersville supported the Minersville Public Library, Cell Phones for Soldiers, and the Minersville Food Pantry. State & federal budget cuts have hurt local libraries so in order to help out, the bank collected hundreds of new and gently used books. The First National Bank continued to be an official drop off location for the non-profit organiza-tion Cell Phones for Soldiers, whose goal is to provide every US soldier with a way to call home for free. The bank also acted as a collection point for donations of canned goods and non-perishable items for the Minersville Food pantry.

Regional WinnerHARLEYSVILLE SAVINGS BANK

Regional WinnerMALVERN FEDERAL

Participating annually in the North Penn United Way (NPUW) campaign is a major way Harleysville Sav-ings Bank gives back to the communities it serves. Both the Board Chairman and President & CEO have served terms on the NPUW Board and also served as Campaign Chair. During the past three years, the bank has increased and exceeded their giving goals. This past year, with the bank’s 100% match, 115 employees from all seven offices contributed a total of $55,400. Additionally, the bank had 10 grand leaders ($1000 or more) and 100% participation of their 23-member management team.

To help commemorate its 125th year of continuous service to the community, Malvern Federal Savings Bank initiated “125 Days of Sharing,” a company-wide community ser-vice and volunteer project that commenced at the outset of 2012 and will continue through the end of the year. The entire staff pledged to provide a combined 125 days of community service to non-profit organizations within the bank’s footprint. Year-to-date, 53 employees and board members at Malvern Federal Savings Bank have com-pleted a combined 560.5 hours of community service with 16 non-profit organizations, totaling 70 of their intended 125 days. They have touched the lives of individuals in a

meaningful way through their generous donation of time and talent to various community service projects.

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Regional WinnerMCS BANK

In February, MCS Bank and the United Way of Mifflin-Juniata co-sponsored a “Walk for Warmth” event that raised funds for the Coalition of H.O.P.E.S. (Help Offer-ing People Essential Services). The Coalition is comprised of human service agencies throughout Mifflin and Juniata Counties that work to meet the needs of individuals in crisis and to assist them in achieving their goal of self-suf-ficiency. More than 50 walkers, which included approxi-mately 20 bank employees, raised nearly $6,400 for the Mifflin-Juniata Energy Bank, an agency helping individu-als with heating expenses. In conjunction with the “Walk for Warmth,” MCS Bank also sold gloves at their “Help-

Regional WinnerPEOPLESBANK

A CODORUS VALLEY CO.

Regional WinnerWILLIAM PENN BANK

Through the “Care to Share!” program, each of the bank’s 220+ employees were provided with a $25 Visa Gift Card. They were instructed to go out into the community and do something special and unexpected for someone they randomly selected. To name just a few, gas money was provided for a family traveling back and forth to Hershey to care for a seriously ill child, a group of retired men had some extra money to spend on groceries for a monthly breakfast they provide to homeless persons, and a client with limited income now had some money to purchase

William Penn Bank supported a variety of non-profit or-ganizations this year through their “Community Involve-ment/Service” project. Employees regularly volunteer at local organizations through the ongoing employee vol-unteer program, “Doing Goodwill with Bill.” In addition, William Penn Bank employees collected and delivered gro-ceries to a local food pantry, donated gift certificates to lo-cal fire victims, sponsored a Mother’s Day Tea fundraising event to benefit the Bucks County Housing Group, spon-sored a family to attend the Destined for a Dream Annual Scholarship Banquet, and donated grants to a number of other non-profit organizations in the community.

ing Hands” booth during Lewistown’s annual “Festival of Ice,” raising $1,000 for the Mifflin-Juniata Energy Bank,

much-needed medicine. Because of its tremendous suc-cess, PeoplesBank continued the program with a sec-ond distribution of cards in July. A third distribution is planned for later in 2012.

www.peoplesbanknet.com


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PRESERVING PENNSYLVANIA’SAGRICULTURAL SPIRIT


By: Natalie Bombatch

PRESERVING PENNSYLVANIA’SAGRICULTURAL SPIRIT


ocal agricultural fairs, dating as far back as the 1600s, were important for trade, compe-tition, and highlighting American culture. Fairs today carry on these same traditions. Each year, people of all ages gather at the lo-cal fairgrounds to show their prized exhibits, participate in contests, enjoy musical enter-

tainment, learn about agriculture, and interact with others from the community.

Pennsylvania is the proud home to 110 agricultural fairs attended by more than 5.5 million fairgoers each year. Not only do fairs sup-port agriculture and tour-ism, Pennsylvania’s num-ber one and two industries, respectively, they are also essential to local commerce.

Unfortunately, many Pennsylvania fairs’ very existences are being threatened with increasing state budget cuts. Just 10 years ago, funding from the Pennsylvania Department of Ag-riculture for distribution among the state’s county and com-munity fairs was $4.4 million. That number dropped to $2 million in 2009, and was as low as $971,000 just last year. As of June 30, 2012, the state budget passed with funding back up to $2 million; however, the instability of state funding has left many fairs scrambling to obtain funds elsewhere. Local

businesses have stepped up to the task of helping their com-munity fairs stay in business.

Somerset Trust Company is a sponsor of the Somerset County Fair, and MCS Bank, centered in Lewistown, sup-ports three local fairs held within the counties they serve: the Mifflin County Youth Fair, the Huntingdon County Fair, and the Beaver Community Fair.

SOMERSET TRUST COMPANY

When the Somerset County Fair is in need of donations, local businesses like Somer-set Trust Company step in to support. Jeff Romesburg, President of the Somerset County Fair, explained,

“For about seven years now, Somerset Trust Company has been a huge help to us. By sponsoring the first Sunday of the fair, the bank starts the week off on a very positive note. You can tell that the bank is dedicated to combining agriculture with youth and their families.”

Each year, Somerset Trust Company sponsors the “Somer-set Trust Family Day at the Fair” at the Somerset County Fair. This year, to entice attendees for that day, the bank purchased billboards and mailed about 25,000 postcards to local residents inviting them to attend the fair at no charge.

LWE WANT THE FAIR TO REMAIN

SUSTAINABLE TO SHARE AGRICULTUREWITH FUTURE GENERATIONS.


During the event, bank employees worked at the fair gates and distributed promotional items to attendees.

According to Roberta Lohr, Senior Vice President of Market-ing, “Somerset Trust Company is so heavily invested in the fair because we realize that agriculture is an integral part of the community. We want the fair to remain sustainable to share agriculture with future generations, which is why we contribute each year.”

Additionally, Somerset County Trust employees manned a booth at the fair for the entire week. At the booth the focus is always on children. In the past, the bank has had a duck pond, putt-putt contest, and a coin toss where children received prizes purchased by the bank. “We, at the bank, are very proud to live and work in Somerset County. We support the Somerset County Fair be-cause it brings together families, friends, and neighbors to celebrate our agricultural heritage,” said Barbara Harrold, Vice President – Branch Administration.

MCS BANK

MCS Bank also finds value in supporting today’s youth. They donate to the 4-H programs of the Mifflin County

Youth Fair, the Huntingdon County Fair, and the Beaver Community Fair. 4-H is an organization that empowers youth to reach their full potential, working and learning in partnership with caring adults. MCS Bank President and CEO Terry Foster said, “The bank supports 4-H because the organization helps to perpetuate entrepreneurial spirit and the agricultural industry through successive generations. We’re an agricultural area and it’s critical that we encourage agriculture and learning.”

Indeed, 4-H programs are a huge learning experience for local youth. Participants acquire management skills, finance skills, and basic life skills, like responsibility, communication, and ethics. 4-H members spend money

to purchase their animal, put time and effort into raising it, and calculate how much they need to make at auction to offset that original cost. Often, the money earned is used to purchase another animal for the next year. Foster elaborat-ed, “The programs definitely transcend agriculture. Really, they’re microcosms of the business cycle.”

In past years, at all three fairs, MCS Bank supported 4-H pro-grams by purchasing member-raised animals at livestock auc-tions. More recently, the bank wanted to enhance their involve-ment with 4-H and find different ways to meet their needs.

WE’RE AN AGRICULTURAL AREA ANDIT’S CRITICAL THAT WE ENCOURAGE

AGRICULTURE AND LEARNING.


A contact from the Mifflin County Youth Fair 4-H program told the bank that their members looked somewhat dis-jointed while showing their livestock at auction. MCS Bank satisfied that need by purchasing t-shirts, giving the mem-bers a unified and professional appearance. The shirts also advertised both 4-H and the bank to fairgoers, spreading the word about the organization and community support from local businesses. “The support from our community can’t be beat. If we need anything, we know that we can go to local businesses for support,” shared Darvin Yoder, Mif-flin County Youth Fair Board Member.

Also, this year marks the 100th Anniversary of the Pennsyl-vania State Association of County Fairs. To celebrate, Mifflin County Youth Fair ran a campaign requesting 100 sponsors to donate $100 to benefit the 4-H youth camp. MCS Bank

has donated to this campaign. “In this area, we see a lot of kids going into the family farming business or agriculture field, and a lot of them start their careers through the 4-H program. The assistance from donors like MCS Bank helps them pay for a college education,” said Thomas Walker, Penn State Cooperative Extension District Director.

This year at the Huntingdon County Fair, MCS Bank do-nated hand towels to participants in the 4-H program to have with them while grooming and showing their ani-mals. This was a creative way for the bank to advertise their support of the fair as well as give the group some-thing useful. The bank also provided promotional items for gift bags given to children participating in a youth trac-tor pull event. Edsel Hamman, Huntingdon County Fair Board Member, explained, “We, as volunteers at the fair, get nothing but enjoyment from watching kids grow, learn

responsibilities, and understand the importance of agri-culture in Huntingdon County.”

MCS Bank has been involved with the Beaver Community Fair for several years. In the past, bank employees have helped serve chicken dinners. This is the first year that the bank donated t-shirts, similar to those purchased for the Mifflin County Youth Fair, for 4-H members to wear during the livestock auction.

In addition to the purchase of advertising at all three fairs, contributions in support of endowment fund programs have also been made in the past by the bank.

Pennsylvania has deep agricultural roots, and it’s the youth of today that will become the farmers and agricultural industry

professionals of tomorrow. Local community banks, like Som-erset Trust Company and MCS Bank, are helping to perpetuate the agricultural tradition by donating to their local fairs’ youth programs. As generations of fami-lies come to the fair year after year, it becomes very apparent that their support is truly having a positive impact on youth and the commu-nity as awhole.

Pennsylvania is the proud home to 110 agricultural fairs attended by

MORE THAN 5.5 MILLION FAIRGOERS

Photo provided byBranden Snyder

If you would like Transac-tions to feature your bank as our Community Bank Profile in an upcoming issue, please feel free to contact me at [email protected] or 717-231-7447.


UPCOMING FAIRS:York Fair (Sept. 7-16)Berlin Brothersvalley Community Fair (Sept. 9 & 12-15)McClure Bean Soup Festival & Fair (Sept. 9-15)Green Township Community Fair (Sept. 10-15)Denver Fair (Sept. 11-15)Sinking Valley Fair (Sept. 11-15)Albion Area Fair (Sept. 11-15)Beaver Community Fair (Sept. 16-22)Gratz Fair (Sept. 16-22)Harmony Grange Fair (Sept. 18-22)Southern Lancaster County Fair (Sept. 19-21)North East Community Fair (Sept. 20-22)Oley Valley Community Fair (Sept. 20-22)Bloomsburg Fair (Sept. 22-29)Ephrata Fair (Sept. 25-29)Morrisons Cove Community Fair (Sept. 25-28)West Lampeter Community Fair (Sept. 26-28)Hollidaysburg Community Fair (Oct. 2-4)New Holland Farmers Fair (Oct. 3-6)Unionville Community Fair (Oct. 5-7)Manheim Community Farm Show (Oct. 8-12)Dillsburg Community Fair (Oct. 16-20)


egulators have made a concerted effort in 2012 to implement language of the Dodd-Frank legislation and implement banking standards put forth by the Basel Commit-tee on Banking Supervision. Earlier this year, the regulatory agencies proposed new rules on a variety of community bank-

ing issues including mortgage loans, Tier 1 Capital criteria, and risk weights for consumer and commercial loans. In October the public comment period will end for four very important rules proposed. This article summarizes some of

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NOTICE OFPROPOSED RULES

By: Tim Arthun

the components of the proposed rules and a sneak peek of PACB’s Government Relations Strategy.

CFPB PROPOSED RULES ON MORTGAGESERVICING – COMMENTS DUE OCTOBER 9TH

Mortgage Servicing Rules•Servicers would be required to contact borrowers who

are at least 30 days late on their payments by telephone, and follow up in writing with information about op-tions for avoiding foreclosure.


If you want to know more about the comings and goings in the PA Legislature or Con-gress, please feel free to call or e-mail me at [email protected] or 717-231-7447.

•Servicers would have to provide regular billing statements about the next payment due, how past payments have been applied, and other important loan information.

•Vague requirements of servicers including providing “easy access to staff,” responding “quickly” to requests for payoff amount information, and giving consum-ers early warning about how upcoming rate changes could impact future changes. Many community banks already provide this prompt and courteous service without the need for a federal mandate.

TRUTH IN LENDING ACT AMENDMENTS – COM-MENTS DUE OCTOBER 15TH

Appraisal Requirement on Higher-Risk Mortgages•Requires creditors to use a licensed or certified ap-

praiser who prepares a written report based on a phys-ical inspection of the interior of the property.

•Mandatorily disclose to applicants information about the purpose of the appraisal and provide consumers with a free copy of any appraisal report.

BASEL III PROPOSED RULES –COMMENTS DUE OCTOBER 22ND

Regulatory Capital Minimums and Capital Buffers•Establishes new capital requirements including; a com-

mon equity tier 1 capital ratio of 4.5%, tier 1 capital ratio of 6%, total capital ratio of 8%, and tier 1 leverage ratio of 4%.

•Requires financial institutions to hold additional buf-fer of common equity tier 1 capital in the amount of 2.5% of all risk-weighted assets, or places restrictions on capital disbursements and bonus payments.

Standardized Approach for Risk Weighted Assets•Residential Mortgage exposures would be weighted

along a scale, based upon the loan-to-value ratio, be-tween 35-200%. All balloon mortgages would fall be-tween 100-200% risk weight.

•Certain commercial real estate loans would be as-signed a 150% risk weight.

•On exposures that are 90+ days or non-accruing, risk weight would increase from 100% to 150%.

PACB STRATEGY

Member banks will begin receiving “action packets” in Sep-tember that detail PACB’s coordinated, multi-layered strate-gies and tactics in response to these notices. These packets will include sample letters to be sent to legislators and regu-lators, talking points for how community banks are directly

being impacted by the notices, and several other informa-tional tools. Also, PACB will be updating and upgrading the Government Relations portion of our website to include information about legislative priorities, resources for legis-lative and regulatory topics, and information about devel-oping issues and stories that affect the industry. Enhanced visibility of PACB’s Government Relations work will be utilized by a strong social media campaign with regular up-dates about legislative happenings.

These “action packets” and similar tools are essential to keeping our member banks connected to the business of Harrisburg and Washington. The political rhetoric coming out of the halls of government could lead many to believe that community banks await a disparaging forecast. How-ever, with an effective strategy that will combat the over burdensome regulations being proposed, community banks have the potential to enjoy great success in the future.

PACB is also looking for member banks that are inter-ested in holding “bank visits” for elected officials. These visits are a chance to showcase your bank’s abilities while

providing interesting and educational discussions about the effect of legislation. If you would be interested in hosting a bank visit, please contact PACB via telephone at 717-231-7447 and speak with Tim Arthun, Director of Government Relations.

WHAT YOU CAN DO AND HOW PACB WILL HELP

Turning back the tide of burdensome regulations from the government will take a group effort. This is why we all need to come together and stand unified in opposition to harmful industry policies to achieve legislative success.

Regulators and elected officials want to hear directly from you! After all, you are the ones that have a vastly superi-or and technical understanding of how regulations made in D.C. will create ripple effects across the Commonwealth. This means picking up the phone, writing letters, and inviting elect-ed officials into your bank to see the faces of the industry.

We all need to come together and stand unified in opposition to

HARMFUL INDUSTRY POLICIES


CENTERFOLD

THE PACBSTRATEGICPLAN: RON

GEIB’SKEY TO OUR SUCCESS


CENTERFOLD

THE PACBSTRATEGICPLAN:


As Chairman, I plan to do all that I can do to support PACB in

executing this strategic plan. I can’t guarantee our success

as an organization…no, but I can guarantee there would be no

chance of success without meeting the objectives of this plan.


NOW THAT WE’VE IDENTIFIED THETARGET, IT’S TIME TO PUT THE

STRATEGIC PLAN INTO MOTION.

on Geib, President and CEO of Harleysville Savings Bank and Harleysville Savings Fi-nancial Corporation, is ready to start his term as the new PACB Chairman. He fol-lows Past Chairman Chuck Leyh, President and CEO of Enterprise Bank. Geib’s goal as Chairman is to be a continuation of those

before him as well as a building block for those to come in the future. Geib explained, “Being Chairman is all about building on the legacy of the past. Of the most recent Chairmen, Rich Meares helped us transi-tion to PACB President and CEO, Nick DiFrancesco, making way for Chuck Leyh to aid the Board of Directors in developing a strategic plan for the next three years. Now that we’ve identified the target, it’s time to put the strategic plan into motion. That’s what I fully intend to do.”

Geib is a huge believer in strategic planning and identify-ing the values of an organization. Geib’s goal as Chairman is to help members understand what their role is in help-ing both PACB win and the community banking industry win. He used the phrase, “The clearer the vision, the fewer the options, the fewer the questions, the easier the an-swers,” to describe the benefits of creating and implement-ing a strategic plan. With a strategic plan built for clarity and connectivity, the Board of Directors, PACB staff, and member community banks can all strive to work together toward a common goal.

The strategic plan has three main objectives that Geib refers to as “Pillars in the Plan,” which are described below.

PILLAR ONE

The first Pillar focuses on membership development and re-tention through improved member relationships. The plan calls for the creation of more interaction among our members, and also identifies strategies to engage more members of our banks’ management teams. There will be regional meetings to bring together our member banks, encouraging them to interact and become more involved in the issues affecting the

current state of community banks, such as BASEL III and the TAG Extension.

Geib noted that there are always two ways to look at the state of community

banking. He said, “On one hand, unfortunately, there’s more regulatory burden today for community banks. We need to be focused more on what is coming at us in the future. On the other hand, community bankers have never been in a better time or place to tell our stories that differentiate us from big banks. We have the opportunity to point out that difference – they caused a problem and we didn’t.”

The story that differentiates Harleysville Savings Bank from big banks centers on the importance of community. He lives by the philosophy of Anne Beiler, founder of Auntie Anne’s Inc., which is, “Give, to get, to give again.” Geib believes that giving back to community members, local organiza-tions, and the environment creates value for everyone. “It is the community relationship feel that attracts both cus-

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tomers and staff to Harleysville, and we’re proud of that,” acknowledged Geib. Relationships are incredibly important and powerful; stories like his are what PACB members need to share in order to separate themselves from big banks and the problems they’ve caused.

PILLAR TWO

The second Pillar identifies strategies to improve each of the four ‘core’ functions contained in the PACB mission state-ment: “1) Promoting the ideas of community banking by ad-dressing the 2) Educational, 3) Legislative, and 4) Network-ing needs of our members.”

Geib elaborated, “On the legislative focus, when I first got involved with PACB, I thought we existed to have a voice in Harrisburg regarding community banking issues. Although that is true, I have come to realize that our in-volvement and resources are needed in Washington, DC, as well.” It is important that Pennsylvania community bankers have a relationship with national members of con-gress in order for the needs of community banks to be un-derstood when policy is being formed. It’s impossible for ICBA to have a relationship with all 535 members of con-gress in Washington – and also, voting constituents have more clout than paid lobbyists.

PILLAR THREE

The final objective recognizes that PACB needs to do more than just make the existing business model better. The association needs to expand their ability to gener-ate revenue. The third Pillar calls for PACB to develop new programs, products and/or services to enhance the “Value Proposition” to existing and potential members; quantifying with an objective dollar value, which reflects a return on dues.

Geib concluded, “This is PACB’s target for the next three years. As Chairman, I plan to do all that I can do to support PACB in executing this strategic plan. I can’t guarantee our success as an organization…no, but I can guarantee there would be no chance of success without meeting the objec-tives of this plan.”

ABOUT RON

On January 21, 2007, Ron Geib was appointed Presi-dent and Chief Executive Officer of Harleysville Savings Bank and Harleysville Savings Financial Corporation. Harleysville Savings Financial Corporation is the hold-ing company for Harleysville Savings Bank. Harleysville

Savings Bank was established in 1915 and is headquar-tered in Harleysville, PA with seven full-service branches in Montgomery County.

This year marks an especially important milestone for Har-leysville Savings Bank. As of August 31, the bank will be in its 25th year as a public company. Geib said that it was hum-bling to discover that of the 41 PA Stock Thrift Companies in existence on December 31, 1988, Harleysville Savings Bank is the only bank still in existence. He added, “This gives tes-timony to what can happen when Directors make decisions with a long term view in mind.”

Since beginning his position as CEO, Geib has placed a heavy focus on teamwork. To communicate with his staff and encourage their involvement with the bank and the community, he has emailed a “Thought of the Week” for the past five years. Topics include events in the community, bank values, and practices for personal growth.

He graduated from Bloomsburg University with a B.S. in Accounting in 1976. His education also includes at-tendance at the Ohio State University Academy for Fi-nancial Executives.

Geib began his career in community banking directly after

graduating from college. He spent four years as a Branch Manager for Harleysville Savings Bank. In 1980, he earned the position of Chief Financial Officer, a position he held un-til becoming the Chief Operating Officer in 1999. In 2003, Geib was appointed the President and COO of both the Bank and Harleysville Savings Financial Corporation.

Many men like Geib have hobbies like hunting, fishing or golfing; however Geib’s hobby truly is community banking. He joked, “I’ll tell my wife that I’m going to go sit in a tree stand, but really I come into the bank.” Numbers make him tick and he enjoys interacting with the people of the com-munity. Community banks provide the environment where numbers and people come together. He commented, “I en-joy being able to do what I love every day – making a differ-ence in people’s lives and in banking.”

During the past 30 plus years, Geib has served both the financial industry and his community in various posi-tions. He is a Past President of the Insured Financial Institutions of the Delaware Valley, and Past President of the Philadelphia Chapter of the Financial Managers Society. Geib also serves as the Treasurer of the Board of the North Penn United Way and was the 2007 Campaign Chairman. He serves other local non-profit organiza-tions in various capacities.

Being Chariman is all about

BUILDING ON THE LEGACY OF THE PAST


I enjoy being able to do what I love

every day – making a difference

in people’s lives and in banking.


ANTICIPATED EFFECT ONPENNSYLVANIA BANKING

INSTITUTIONS OF DEPARTMENTOF BANKING MERGER WITHSECURITIES COMMISSION

By: Reginald S. Evans, Esq.Shumaker Williams, P.C.



iscussions of whether to merge the Pennsylvania Department of Banking and the Pennsylvania Securities Com-mission turned into legislation that was passed unanimously by the Gen-eral Assembly and signed into law by the Governor on July 2, 2012. The new

law is Pennsylvania Act 86 of 2012. Pursuant to the Act, the Pennsylvania Department of Banking, a State Agen-cy under the Governor’s jurisdiction, and the Penn-sylvania Securities Commission, an independent State Agency, will “consolidate” to become a unified “Depart-ment of Banking and Securities”.

REORGANIZATION AND ENFORCEMENT

The Department will proceed forward with the Secre-tary as Agency. The Securities Commissioners will no longer be agency heads. Instead, they will have a re-duced yet important role. In that regard, there will be a newly formed “Commission” established within the Department. The Commission’s role will be to serve as

the final adjudicator or decision maker regarding every administrative enforcement matter that requires a hear-ing officer and is commenced by the consolidated De-partment under any law that it administers. The Com-mission will have such other functions as the Secretary chooses to authorize. The Commission is to be composed of five individuals including the Secretary, a designee of the Governor, and three individuals nominated by the Governor and approved with the advice and consent of the State Senate. For regulation and enforcement organization purposes, Act 86 provides that the consolidated agency will have a securities division for regulation of securities law mat-ters. Pursuant to Act 86, the Department will continue to regulate, license, examine, and enforce Pennsylvania’s banking laws as well as licensing laws affecting nonde-pository entities.

FUNDING OF THE DEPARTMENT

Pursuant to Act 86, the “Banking Department Fund” is redesignated as the “Banking Fund.” The sources of this Banking Fund shall not include fees, assessments, charges, and penalties generated from the Pennsylvania Securities Act or the Takeover Disclosure Law. Sepa-rately, Act 86 provides that a securities division is es-tablished within the Department and that the ability of the Pennsylvania Securities Commission to impose fees on persons or entities that it regulates is transferred to

D

Mr. Evans’ practice includes representation of banks, savings associations, hold-ing companies, and non-depository mortgage lend-ers and brokers, regarding regulatory compliance, licensing and enforcement issues under federal and state law, charter conversions, mergers and acquisitions, and intellectual property. Mr. Evans served as chief counsel to the Pennsylvania Department of Bank-ing from 1995 to 2003.

the Department of Banking and Securities. Considered together, the Banking Fund will fund the Department as it is now, pre-merger, and the securities fees will fund the securities division of the Department. These bank-ing and securities monies will support the overall man-agement of the Department. The Banking Fund is not intended to subsidize the securities division but is to pay for the regulation of banking institutions and non-depository licensees.

TIMING OF THE CONSOLIDATION

This consolidation of State Agencies is on a fast track. Act 86 became law on July 2, 2012. The Secretary is re-quired to submit a reorganization plan to carry out the reorganization to the Pennsylvania Executive Board by August 31, 2012. If the reorganization plan is approved by the Executive Board, the plan takes effect on Septem-ber 28, 2012. The target reorganization date and the ef-fective date of most of the provisions of Act 86 discussed above is the same, October 1, 2012.

EFFECT OF CHANGE

The addition of a Commission that acts as “judge” in enforcement matters expands from one to five the num-ber of people who decide whether the Department’s enforcement pursuit or the regulated entity’s defense is correct and therefore enforceable. By dividing the bank-ing regulatory side in fiscal terms from the newly in formation securities division, combined with the sepa-rate expertise that staff have from both of their agen-cies, banking institutions can probably expect regulation to continue in a substantially sim-ilar manner to how it has been handled to date.

The Banking Fund is not intended to

SUBSIDIZE THE SECURITIES DIVISION


n the fall of 2010, the Basel Committee on Banking Supervision introduced the Basel III international capital standards. These measures were aimed at improving risk management so that, ultimately, the bank industry

could better withstand fu-ture economic crises. When these reforms were first es-tablished it was generally thought that they would apply to international “too-big-to-fail” banks or “systemically important financial institutions.” It is doubtful community banks expected to be totally exempt or immune from the new standards, since most regulations trickle downstream,

I

BLINDSIDEDBY BASEL III

By: John GagnonBank Strategies

M Benefit Solutions

despite original intent. However, when the federal bank regulatory agencies rubber stamped approval of the inter-national version for U.S. institutions in June, the industry

appeared to be caught flat-footed as to the all-inclusive nature of the proposal. The weight and complexity of these reforms, coupled with current and other proposed new regulations, poses a

real threat to the community banking industry.

M Benefit Solutions – Bank Strategies provides Executive benefits consulting and assists community banks in invest-ing in bank owned life insurance (“BOLI”) as a financing

THE INDUSTRY APPEARED TO BE CAUGHT FLAT-FOOTED AS TO THE ALL-INCLUSIVE

NATURE OF THE PROPOSAL.


or cost-recovery vehicle for employee benefits. This article examines new banking regulations in two ways: how the regulations will impact the community bank marketplace in general (a macro view) and how the regulations will impact the products and services to banks (a micro view).

From a macro point of view, the federal bank regulatory agencies proposals create new capital standards with un-derlying changes in how regulatory capital is calculated as well as significant changes to asset risk weights, particu-larly residential loans. These proposals would most likely impede lending and, due to the implementation timeline, hinder smaller banks ability to raise new capital, when nec-essary. Imposing complex rules and regulations originally intended for the largest international banks on small, tra-ditional community banks makes little sense. The overall outcome, if these standards are implemented, could very well be massive bank consolidation as many smaller, pri-vate banks will be forced into distressed sales or assisted mergers due to an inability to raise capital quickly.

From a micro point of view, one area stands out – the inclu-sion of accumulated other comprehensive income (AOCI) in regulatory capital. Currently, unrealized gains and losses from available-for-sale (AFS) securities, which fall under AOCI, are excluded in the calculation of regulatory capital. This change adds extra volatility and will totally alter the investment strategies of banks. This could positively impact capital in some instances; however, given the current rate en-vironment and the inevitable rise in interest rates, this could have a devastating effect. The rule will discourage holding long-term debt and push banks toward holding shorter dura-tions or many may just move assets from AFS into the held-to-maturity (HTM) securities category. This could potentially weaken the market for typical bank held securities such as municipal bonds and agency mortgage-backed securities.

Bank Owned Life Insurance (BOLI) can potentially be a par-tial solution to this problem. A bank worried about the capi-tal risk of their securities portfolio could move these funds into the tax favorable environment of BOLI, which has al-ways been accounted for as an “other asset.” The bank could choose to invest in the general account of the life insurer or potentially fulfill their investment mandate by diversify-ing their funds in underlying sub-accounts of certain types of BOLI products. While BOLI is not a complete solution to the volatility and other issues that will emerge if unrealized gains/losses from AFS securities flow through regulatory capital, BOLI could provide a useful option for banks.

When federal regulators presented these proposed regula-tions, it does not appear they anticipated the extent of the opposition. Regulators minimized the impact pointing to the fact that most U.S. banks already met or exceeded the ratio thresholds. However, this underestimated the massive cost and complexity that these standards will impose on community banks, not to mention the myriad of unintended adverse consequences. While the regulators had two years to review these proposals prior to implementing, the bank-ing industry has a few months to state their case and banks

M Benefit Solutions offers se-curities through M Holdings Securities, Inc. a Registered Broker/Dealer, Member FINRA/SIPC. M Financial Group is the parent com-pany of M Benefit Solutions and M Holdings Securities, Inc.

This material is intended for informational purpos-es only and should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney, tax advisor or plan provider.

and trade organizations are actively pointing out the flaws in the current proposals.

To provide comments on these regulations you can find re-sources at:• http://www.icba.org/advocacy/index.

cfm?ItemNumber=130925• http://www.fdic.gov/regulations/capital/rulemak-

ing.html• http://www.occ.treas.gov/news-issuances/

bulletins/2012/bulle-tin-2012-24.html

• http://www.federalreserve.gov/newsevents/press/bcreg/20120607a.htm


n the current climate of bank examinations and the sometimes contentious recommendations made during and after reviews, board members should be familiar with bank examiner responsi-bilities, particular-ly when it comes

to asset quality. The OCC Comptroller’s Handbook, which can be found at www.occ.treas.gov, shows the spe-cific guidance for examiners as to what to assess but not a specific methodology. The examiners are to assess “all signifi-cant aspects that affect the collectability of the portfolio”…, and they are to exercise their judgment as to whether the bank has a process that adequately rates the risk of the port-folio and effectively reserves for potential losses. It is always

I

UNDERSTANDING THEDETAILS OF ALLL ASSESSMENT

FOR DIRECTORS

By: John E. Scherer, Sr.Software Implementation Specialist

Harland Financial Solutions

in the bank’s best interest to have the process accessible, ex-plainable and able to be validated. An examiner’s confidence in the bank’s processes will generally lead to fewer questions

about methodology, down-grades and guidance requir-ing review process improve-ments. Allowance for Loan and Lease Losses (ALLL) is the accounting and financial outcome of the bank’s own asset quality review. It is di-

rectly related to the bank’s income and so prudently grading and reserving for losses while remaining a profitable enter-prise is sometimes a very narrow path. Keeping examiners confident in the bank’s asset quality assessment and limiting their downgrades will allow better planning with fewer sur-prises and a less adversarial review process.

IT IS ALWAYS IN THE BANK’S BEST INTEREST TO HAVE THE PROCESS ACCESSIBLE,

EXPLAINABLE AND ABLE TO BE VALIDATED.


The loan review and asset quality assessment environment at every bank is somewhat different. Each institution has a culture and the board/management interaction is driven by personality and skill set as well as the size of the bank. Virtually all operate with a high level of trust between the executive officers and the board. Some directors want all the details on a criticized loan and while others just want the bottom line. What is consistent at every bank is the need to have that detail accessible and able to be presented to both the board as warranted and the examiner as re-quired. It is in the director’s best interest to work with bank management to understand what the risks in the loan port-folio are and how the bank is addressing those risks. Direc-tors should be comfortable with the bank’s methodology for downgrading a loan (or not), what factors are being considered and what the result of the downgrade will be. The ALLL process should be clear and well documented. The bank should also have in that process, identifying in a timely manner, potential downgrades and collectability issues. A director should ask: Does my bank have a process for collating similar type loans, similar collateral, similar location and similar industries, and extrapolate from those segments, a global portfolio risk? The process does not necessarily need to be complicated but the bank should have the ability to take a loan or relationship with a known issue (i.e., reduced collateral type value, industry slow-down, changes in a commercial borrower neighborhood) and identify similar loans and relationships in their port-folio and review for a possible downgrade. A “stress test” review of those loans may show that a specific loan is dis-

John E. Scherer is a senior software implementation specialist at Harland Finan-cial Solutions and can be reached at [email protected].

similar enough to the criticized or downgraded loan that no further action is needed. However, it may show that there is increased risk in a segment and allow the bank bet-ter management of the collection process and its ALLL, as well as limit pursuit of new business in that segment. The process will show the examiner a quantifiable risk based on segments, and also, that the risk is being managed.

Having quantifiable oversight of the bank’s portfolio risk should limit the number and extent of additional down-grades discovered during examinations, but more impor-tantly, allow a realistic analysis of the potential losses the bank may face. ALLL is a valuable assessment for bank management and directors. The write downs required by non-performance of loans are generally understood by directors and other reviewers. What is just as important to the bank is to have a process to accurately assess and accrue for the potential write down, before it gets to that non-performing status. As a director, knowing the details of that pro-cess is essential.


he summer’s unusual hot weather has also brought on hot regulatory changes, specifi-cally Basel III, that will result in consequenc-es for the community banking industry.

The proposed capital rules are designed to meet international Basel III standards. The

most surprising factor in the proposed rules was that the standard applies to all bank holding companies over $500 million, as well as all subsidiary banks regardless of size. Dodd-Frank carved out some new capital provisions, pri-marily Trust Preferred Se-curities (TruPS) continuing to qualify for Tier 1 capi-tal. Larger banks began to plan for this change, but it left smaller banks behind the planning curve. The proposed rules are still in the comment phase, but understanding key points will assist community bankers in developing capital plans to meet the proposed regula-tory standards.

1. Trust Preferred Securities Phase Out

All banks over $500 million in total assets will no longer be

T

BASEL III:KEY POINTS FORCOMMUNITY BANKERS

By: Jack H. GoldsteinManaging Director

Strategic Risk Associates, LLC

able to count TruPS as Tier 1 capital. Banks under $15 billion will be subject to a phase out of TruPS over 10 years begin-ning in 2013. Many banks have executed interest rate swaps from fixed to floating in order to take advantage of the low rate environment. So why is this important?

• Are TruPS still acceptable if they are no longer Tier 1 capital, or really subordinated debt? In this current in-terest rate environment TruPS at LIBOR + 2%, or less are not a bad deal, especially if they can be swapped for a longer term fixed rate instrument. The execution

of this strategy is worth consideration since hold-ing company debt ranges from 4% to 6%. Rates on TruPS that exceed LIBOR + 2% may not make sense and a redemption strat-egy should be considered. • Then there is the issue

of structure. Maybe you are happy with the cost and TruPS and they still count partially as Tier 1 capital, and the cost is less than existing debt. Again an inter-est rate swap strategy with options to cancel in the future may make sense. However, keep in mind, the optionality will impact the rate so it needs to be part of an overall capital management plan.

CAPITAL STANDARDS WILL CHANGE,AND IT WILL BE EXPECTED THAT

COMMUNITY BANKS DOCUMENT THEIR PLANS IN 2013 TO MEET THE NEW NORM.


Jack H. Goldstein is Man-aging Director for Strategic Risk Associates, LLC (www.srabank.com). Mr. Gold-stein in his 30 year banking career has specialized in all aspects of bank operations including credit risk management, strategic planning, capital planning, due diligence, loan review, stress testing, and ALLL Analysis. Mr. Goldstein has held various senior management positions with regional and community banks in Pennsylvania and Maryland.

Strategic Risk Associates, LLC (SRA) is an innova-tive consulting and advisory firm specializing in the banking industry. Our partners and associates have a strong commitment to innovation, customer service and continuous improvement. Our team provides fast efficient, and practical consulting and advisory services on strategic planning, capi-tal management, stress testing, loan review, inter-nal audit, accounting, risk management programs (ERM), and merger and acquisitions advice.

Mr. Goldstein may be contacted at (443) 907-3000, or at [email protected].

2. Gains and Losses on AFS Securities Now Count in Capital

This proposal is the most troubling and will have a signifi-cant impact on Community Banks. As rates have remained low and loan demand weak banks have added significant amounts of securities to their balance sheet at longer dura-tions. When rates begin to rise the unrealized losses will be larger and a bigger percentage of capital. In some cases, a 300 basis points shock results in a portfolio loss, of 10% or more. Let’s say you are a $250 million community bank with $100 million in AFS securities, and $25 million in cap-ital. A 10% loss is a 40% swing in capital. This could have a devastating effect upon capital with banks falling below well capitalized. In some cases regulators are asking banks to further shock these portfolios in severe stress scenarios of 400 to 500 basis points. This analysis widens the loss having a more significant impact on capital.

The answer is to shorten duration (price risk), but how will that impact your earnings? This is a proposal that needs attention and community bankers must advocate for a change during the 90-day comment period.

3. Capital Buffer

The proposed new “capital buffer” is designed to increase capital levels. The buffer is a sliding scale, but in prin-ciple requires banks to hold 2.5% more capital. Falling short of this capital buffer will limit some forms of execu-tive compensation and dividend payments. Community Banks need the flexibility of dividend payments to main-tain and attract outside capital sources. This capital buf-fer may not be an immediate issue, but keep in mind the above proposed changes will result in community banks looking for sources of other capital to meet this buffer. The lack of dividend payments will make it difficult to attract such capital.

4. New Risk Weighting Rules

The proposed rules substantially change many risk weightings placing emphasis on risk weighted capital measures. Today’s fairly simple system becomes much more complex. The proposed rule changes will include additional risk factors, primarily LTV measurement. This will be a challenge to community banks who do not peri-odically update collateral values on residential loans (or other loans secured by real estate), or track LTVs on their core system. This makes stress testing a more compelling argument for community banks that have not historically stress tested their portfolios. Banks should begin to em-ploy independent stress testing on the entire loan portfo-lio as a capital planning tool regardless of the proposed rule changes. Stress testing is not only expected by regu-latory agencies at any size level, but is an excellent capital planning tool providing a forward looking estimate over a two-to-three year period.

The changes are significant and will have an impact on

community bank strategies going forward. Proper plan-ning, enhanced risk management tools, and redesigned strategies will help community banks to be better pre-pared to meet these new regulatory capital standards. A couple thoughts:

• Capital continues to be King and Basel III may find Community Banks short of capital;

• Capital must be supported with strong risk man-agement, such as enterprise risk management, and stress testing;

• The “capital buffer” increases based on the risk profile of the bank similar to SCAP tests where reg-ulators have more tools to limit executive compen-sation, and dividend payments;

• New risk weighted rules require greater data cap-ture requiring independent third party stress test-ing, enterprise risk management scoring models, and capital simulation. This will be the new norm.

It is important to note that these proposed rules are still in the comment period, and it is rumored that the period may be extended (or the comment period on portions of the proposed rules). So make sure you are an advocate for the industry, and that you are heard. Best advice is start planning today, capital stan-dards will change, and it will be expected that community banks document their plans in 2013 to meet the new norm.


TIM ARTHUN (TA): The redistricting process changed your district slightly but also contains several areas that are new. Do you anticipate the issues and needs of the new district differing much from the previous district?

CONGRESSWOMAN ALLYSON SCHWARTZ (AS): While there are several new areas of the 13th Con-gressional District, I continue to represent suburban Montgomery County and Northeast Philadelphia. I look for-ward to meeting my new constituents and repre-senting their needs in Washington and here at home, as I have done for the current district for eight years. The number one concern for all of my constitu-ents remains strengthening our economy -- now and into the future. That means preserving and growing our middle class; prioritizing education, infrastruc-ture, and innovation; improving the quality of life in our neighborhoods; and ensuring access to affordable, quality health care for everyone.

(TA): This is your 4th term in Congress and you have al-ready earned the reputation of being a rising star. What do you consider to be your greatest accomplishment during your time in Congress?

FIVE MINUTESWITH CONGRESSWOMAN

ALLYSON SCHWARTZ(AS): I was proud to have been a part of expanding access to quality, affordable health coverage for all Americans through my work on the Affordable Care Act. I specifically fought for provisions to improve primary care, ensure cov-erage for children with pre-existing conditions, allow young adults to stay on their parents coverage, and strengthen Medicare for our seniors now and into the future.

As the daughter of a Ko-rean War veteran, I firmly believe that we have the responsibility to ensure that our nation’s veterans can find work when they return home. Too many veterans, especially Post-9/11, are

struggling to find employment. That is why I have intro-duced legislation to support our veterans. In my first term in Congress, I introduced legislation to provide tax credits to businesses that hire unemployed veterans. This bill was signed into law in 2007 and later strengthened by President Obama in 2009. To build on the success of that law, I intro-duced the Hiring Our Veterans Act, which was signed into law by President Obama in November 2011 as part of a larg-er package to strengthen the economic climate for veterans.

I have worked to strengthen our economy with targeted tax incentives for emerging industries, creating the right envi-ronment for private sector job growth. The Therapeutic Tax

WITH THE MANY ECONOMIC AND POLITICAL CHALLENGES AMERICA FACES TODAY, I HAVE

WORKED PARTICULARLY HARD TO BRIDGE THE PARTISAN DIVIDE AND GET SOMETHING DONE.


and all Americans, and build sustainable communities in Pennsylvania and across the country. These include the GREEN JOBs Act, the Community Restoration and Revitalization Act and the Manufacturing American In-novation Act. My bipartisan efforts on health care this year include legislation to address the shortage of phy-sicians in this country through new medical residency training opportunities, and the Medicare Physician Payment Innovation Act, which prevents a scheduled 30 percent cut to physicians serving Medicare patients

and reforms the Medicare payment system to improve quality while reducing costs.

(TA): Currently you serve on two committees; the House Budget Committee and House Foreign Affairs Committee. What are some of the challenges you face in these assign-ments?

(AS): As the number two Democrat on the House Budget Committee, I take very seriously the need to tackle our na-tion’s economic and budget challenges. The federal budget is a statement of our priorities and values as a nation. Dur-

Credit, legislation I championed in 2010, provided $1 billion dollars to 3,000 small biotech companies across the country to ensure America continues to lead the world in innovation and research and development.

In February 2012, I was honored to be appointed to the joint Senate-House conference committee charged with with re-solving differences between the House and Senate so we could extend middle class tax cuts, protect seniors’ access to their doctors, and extend unemployment benefits for Amer-

icans still searching for work. The conference committee was one of the only bipartisan groups in the 112th Congress to reach a bipartisan agreement successfully.

With the many economic and political challenges America faces today, I have worked particularly hard to bridge the partisan divide and get something done. I take very seriously my responsibility in Congress to find that common ground and accomplish our goals for the American people. I have worked across the aisle on a number of important bills to incentivize innovation and spur job growth, strengthen health care for seniors

The number one concern for all of my constituents remains

STRENGTHENING OUR ECONOMY

For more information about our confidential advice and services, visit:

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U.S. Representative Allyson Y. Schwartz is current-ly serving her fourth term representing Pennsyl-vania’s 13th Congressional District. The 13th Dis-trict includes both the close-knit neighborhoods of Northeast Philadelphia and the first ring suburbs of Montgomery County.

As a centrist Member of Congress, Schwartz is rec-ognized for her commitment to finding effective, bi-partisan solutions to fix our economy, improve the quality of life for Pennsylvania families and commu-nities, and make our nation more secure. She current-ly serves on two committees in Congress: the Budget Committee, as the Vice Ranking Member, and the Foreign Affairs Committee.

Schwartz’s first piece of legislation, which was enacted in 2007, offers tax credits to businesses that hire veter-ans returning from Iraq and Afghanistan. These credits have helped ease the process of returning home for our soldiers and are an important token of our gratitude for their service.

As a leader on health care policy, Schwartz has played a significant role in strengthening primary care; im-proving access to quality, affordable coverage for all Americans; ensuring coverage for children with pre-

existing conditions; and strengthening benefits for se-niors. Most recently, Schwartz has taken the lead on reforming the Medicare physician payment system to protect seniors’ access to their doctors, provide physi-cians with stability and certainty, and improve quality and efficiency while driving down costs in Medicare.

Schwartz is founder and Co-Chair of the Healthcare Innovation Task Force, founder and Co-Chair of the Academic Medicine Caucus, and serves on the Livable Communities Task Force.

Back home, Schwartz has secured funding to revitalize the Delaware riverfront, improve SEPTA stations, cre-ate bike and pedestrian paths throughout the Common-wealth, bolster Main Street districts in Lansdale and Ambler, and improve Dilworth Plaza in Philadelphia.

Prior to her service in Congress, Schwartz was a lead-ing healthcare executive in Philadelphia. From 1990 - 2004, she served as a member of the Pennsylvania State Senate, where she was considered one of the most ac-complished legislators for her adeptness at forging bipartisanship relationships. She earned a B.A. from Simmons College in Sociology and a Masters of Social Work from Bryn Mawr College. She is married and has two grown sons.

ing this time when we face significant economic challenges, we must put forward budget solutions that ensure we meet our nation’s obligations, and reduce our deficit, but also grow our economy.

We must commit to reducing the nation’s deficit in a bal-anced and fiscally responsible manner. Spending cuts must be balanced with increased revenue, and increase greater ef-ficiency and effectiveness from all sectors of government. We must continue to make strategic investments in our economic future. Both cuts and revenue must protect and grow a robust middle class, incentivize small business and domestic manufacturing, and eliminate unnecessary and costly special interest tax breaks.

As a member of the House Foreign Affairs Subcommittee on the Middle East and Southeast Asia and the Subcom-mittee on Terrorism, Nonproliferation, and Trade, I have worked to counter Iran’s nuclear ambitions by tightening sanctions against the Iranian regime. A nuclear-armed Iran would undermine our nuclear non-proliferation efforts by setting off an arms race in the Middle East; provide Hamas and Hezbollah with the protection of a nuclear umbrella; and increase the chances that a nuclear weapon could end up under the control of a terrorist organization. I am also committed to strengthening U.S-Israel relations and have worked to enhance security coordination between our two countries.

(TA): Which legislative priorities do you feel are must

pass before the end of the year? Do you think that with the proposed sequestration cuts the country is headed for a “fiscal cliff” without Congressional action?

(AS): Congress has much to accomplish and not that much time in which to accomplish it. Americans continue to call on Congress to work together. That is why we must set aside politics and take actions to grow our economy, like extend the middle class tax cuts for 114 million middle-class families. We must also continue to invest in our future in-novation and economic growth by extending targeted tax incentivizes for businesses like the R&D tax credit.

In addition, Congress must continue to ensure patient ac-cess to physician care by preventing drastic cuts to physician reimbursements and permanently reforming the existing Medicare physician payment system. The current payment system has created uncertainty and instability, not only in our health care system but also in the larger economy, and it must be addressed.

(TA): I know you keep an extraordinary schedule, but can you share a little bit with us about your personal life? What do you like to do in your spare time?

(AS): I am incredibly lucky to have a wonderful husband, two very successful sons, a new daughter-in-law, and my first grandchild on the way. When I am not spending time with my family, I enjoying reading and like to keep active by walking and playing tennis.



3:00 - 4:00 PM | THE GAME IS ABOUT TO CHANGE - WHAT A COMMUNITY BANK DIRECTOR NEEDS TO KNOW ABOUT THE NEW CAPITAL RULESThis session will provide an overview of the capital rules recently proposed by the federal banking regulators as they are likely to apply to community banking organizations. The session will focus on those aspects of the rules that a community bank director needs to know in order to ensure their institution is prepared for the transition to the new framework. Additionally, because the new rules will almost certainly require community banking organizations to hold more capital, this session will also discuss the primary sources of capital available to such organizations and the means by which a community bank can raise such capital in light of the recently enacted JOBS Act.

4:00 - 4:30 PM | RECEPTION

4:30 - 5:30 | DINNER

5:30 - 6:30 PM | IT’S 2012...DO YOU KNOW WHERE YOUR RISKS ARE? UNDERSTANDING AND PREVENTING COMMUNITY BANK DIRECTOR LIABILITY IN A NEW REGULATORY WORLDAs the banking crisis continues to unfold, banking directors and officers find themselves under heightened scrutiny and at increased risk for their personal decisions. An era of heightened regulatory enforcement has led to a vast amount of rules, regulations, and guidance aimed at increasing banking directors’ responsibilities. The goal of this session is to focus on the risks that directors face as individuals given the current regulatory environment and how directors can be proactive in reducing the likelihood of facing individual liability. Specifically, this session will discuss the traditional role and duties of banking directors, the common mistakes and risks that can lead to individual director liability, and the preventative measures that directors and officers of community banks can take to mitigate the risk of individual liability.

DIRECTORS TRAINING AGENDA

REGISTER ONLINE AT PACB.ORG/EDUCATION

November 7, 2012Radisson Hotel Valley Forge

1160 First Avenue | King of Prussia, PA 19406

November 13, 2012Hershey Lodge

325 University Drive | Hershey, PA 17033

November 14, 2012Scotch Valley Country Club

18 Clubhouse Drive | Hollidaysburg, PA 16648

CREDITS: Attendees are eligible to earn up to 3 CPE credits.QUESTIONS: Contact Saundra J. Cunningham, VP-Education Services, at 717.231.7447 or [email protected].

DIRECTORS TRAINING

Sponsored by:


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August 17-20, 2012 • Vail Mountain Resort & Spa • Vail, CO

A N N U A LCONVENTION135th


Recap





Recap





Recap


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The March 2012 Deadline Has Passed: Do Your ATMs Meet ADA Accessibility Requirements?Elizabeth Fast, JD & CPA, Bankers ChoiceTop 10 IRA Issues: Compliance, Reporting, Death & DistributionsDeborah L. Crawford, gettechnical incBeing Prepared For Regulatory ExamsKenneth Proctor, Abound ResourcesThe Board’s Role With The Loan CommitteeAnn Brode, Brode Consulting Services, Inc.Advanced Collection ToolsDavid L. Osburn, MBA, Osburn & Associates, LLCWire Transfer ComplianceRhonda Hudson, Compliance +, Inc.Bank Protection Act Robbery Prepared-ness For All StaffBarry Thompson, CRCM, Thompson Con-sulting Group, LLCLegal Update - Loans: 2012 In ReviewElizabeth Fast, JD & CPA, Bankers ChoiceBest Practices In IT Risk Assessment ProgramsDr. Kevin Streff, Secure Banking SolutionsRegulation E Alert: New Requirements For Consumer Foreign Remittance Transfers: Deadline February 7, 2013Deborah L. Crawford, gettechnical inc

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Debit Card Error Resolution & Regulation E InvestigationsHeather Briganti, AAP, Mid-Atlantic Pay-ments AssociationAccountiong For OREOBruce Richter, CPA & Christopher Lee, CPA, Eide Bailly LLPMeeting the New Requirements for Capital Adequacy & Contingency With a Special Look at Basel IIIGary Young, Young & Associates, Inc.Fee Income Challenges: Best New Revenue & Cost Cutting OpportunitiesLee Wetherington, AAP, Director of Strategic Insight, ProfitstarsSafe Desposit Boxes: Drilling, Unpaid Rent, Death & Unclaimed PropertyElizabeth Fast, JD & CPA, Bankers ChoiceTroubled Debt Restructuring Update on Regulatory GuidanceS. Wayne Linder, Young & Associates, Inc.Frontline Professionalism: Compliance at Account OpeningAnn Brode, Brode Consulting Services, Inc.UBPR Peer Group Comparison: Getting It Right!Gary J. Young, CEO, Young & Associates, Inc.Business Accounts: Who is Authorized to Open, Close, Transact?Deborah L. Crawford, gettechnical incAnalyzing Ratios & Cash Flow in Com-mercial LendingTim Harrington, CPA, Team ResourcesManaging E-Sign, E-Statements, & E-DisclosuresNancy Flynn, Founder & Executive Director, The ePolicy Institute

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