Bank CEO Network

On April 4-5, 2016, The Bank CEO Network will host its 13th Annual Community Bank Directors’ Conference at the Omni Mandalay Hotel at Las Colinas in Irving, Texas. Conference topics, which are tailored to educating outside directors and CEOs of community banks, address the most current and pertinent issues impacting these banks.

Click here to register or here for additional information, including CPE credit and conference fee. 


DOD Final Rule

In 2015, the Department of Defense (DOD) issued a final rule amending the implementing regulations of the Military Lending Act (MLA) of 2006. The final rule expands specific protections provided to service members and their families under the MLA, and it addresses a wider range of credit products than the DOD's previous regulation. FDIC-supervised institutions and other creditors must comply with the rule for new covered transactions beginning October 3, 2016. For credit extended in a new credit card account under an open-end consumer credit plan, compliance is required beginning October 3, 2017.

Under the final rule, creditors are granted a safe harbor if they use one or both of two methods to verify borrower status – an MLA database or a credit report. The Defense Manpower Data Center has said that financial institutions must express their interest in direct access to the database no later than February 1, 2016, and that this safe harbor approach may only be made available to larger institutions. IBAT submitted a comment letter asking for community banks to also be given access to the MLA database and an extension to March 1, 2016. It was announced this week that the DOD extended the deadline to February 15, 2016 to express interest. However, we feel a longer delay is warranted and continue our opposition to the possible exclusion of smaller banks from accessing the MLA database. 

Staff contact: Shannon Phillips, sphillips@ibat.org, 512-275-2221

February Consumer Tips

IBAT’s February Consumer Tips article is available online. These tips offer advice about refinancing your home. The article looks at reasons why home owners choose to refinance and includes questions that will help determine if this is the right option. It also contains general information about the refinancing process, including fees and other costs.

Please feel free to share IBAT's February Consumer Tips with your bank customers.

Staff contact: Lindsey Gehrig, lgehrig@ibat.org, 512-275-2215

Baker Market Update

While candidates for public office may have the luxury of skipping certain events they don’t care to attend, our appointed public servants don’t have that option. So, when the FOMC met this past Wednesday, it  was comforting to note that everyone showed up; despite what had to be high levels of cognitive dissonance among some members. One wonders if Janet Yellen is feeling a little snake-bit as evidence mounts that economic conditions have deteriorated at just the moment the FOMC has manifested action not supported by that conclusion.  Bummer.

Read more in the Baker Market Update.

AM Networking

Start the year off strong with a trip to San Antonio for an associate member networking event. Join us on February 4, 2016 for a free opportunity to experience AM “speed dating” with incentives. Why should you attend?

  • Increase your prospect list and enhance relationships;
  • Continue to build your network and learn what other IBAT associate members do;
  • Hear from the San Antonio Region President of the IBAT Leadership Division about how it can help you/your company; and
  • Ask questions of a panel of area community bankers.

The AM networking event will be held at The Plaza Club in San Antonio from 2:30-4:30 p.m. Attendees will have a chance to win a free registration to the IBAT Leadership Division Conference, June 23-25, 2016, at the Moody Gardens Resort in Galveston.

Following the AM event, you’ll have the opportunity to network with more than 100 local bankers. Additionally, the IBAT Regional Meeting in San Antonio will take place soon after the AM event, from 5:30-7 p.m., at The Plaza Club so make plans to stay for that important meeting if you can.

Register today to reserve your spot at the AM event. 

Staff contact: Darlene Revers, drevers@ibat.org, 512-275-2217

Regional Meetings

The 2016 Tour de Texas Regional Meetings begins today, February 1, 2016. We look forward to seeing you in one of the 10 towns we'll visit in the next 5 days.

IBAT Chairman Rogers Pope, Jr., Texas Bank and Trust in Longview, along with Texas Banking Commissioner Charles Cooper and past IBAT leaders and staff, will be coming to you to offer our thoughts on the community banking industry in the year ahead. The agenda will include an economic outlook for 2016, the state of Texas community banking and a legislative and regulatory prognosis, among other important topics and issues of the day.

New Credit Union Antics

The National Credit Union Administration (NCUA) is up to it again – trying to expand credit unions’ tax-advantaged status over tax-paying banks. This time it is through a recent NCUA proposal calling for changes to credit union field-of-membership rules that basically eliminate the common-bond requirement, making them even less restricted by geography. This would allow credit unions to expand their footprint while maintaining tax exemption and avoiding federal financial regulations that apply to community banks.

The proposed field-of-membership expansion undermines congressionally imposed limits put in place to ensure credit unions adhere to their original mission. Contact the NCUA and Congress today via ICBA’s Be Heard website to help remind the NCUA that Congress sets credit union law.

Staff contact: Steve Scurlock, sscurlock@ibat.org, 512-275-2226

Reciprocal Deposits Update

Last week the FDIC Board voted unanimously to rescind a plan to treat reciprocal deposits as brokered deposits in the calculation of assessments for banks with less than $10 billion in assets. Under the new proposed rule, these institutions will continue to treat reciprocal deposits as core deposits. More than 400 comment letters, including IBAT’s, were filed in response to the proposal when it was unveiled last July. 

“We applaud the FDIC Board of Directors for considering this issue carefully,” said IBAT President and CEO Chris Williston. “It is clear that the Board is acting in the best interest of the Deposit Insurance Fund by focusing on assessing risk where it actually exists.” Williston added, “We would like to see the Board continue to do so without perpetuating arbitrary lines of delineation based on asset size but rather the risk profile and activities of the institution.”

A 30-day comment period is currently open on the new rule, which can be found here. The FDIC has also provided an online assessment calculator for banks to consider the effect of the new rule on their assessments. 

Staff contact: Steve Scurlocksscurlock@ibat.org, 512-275-2226

Tech Survey Trends

The IBAT Technology Survey is currently open and collecting feedback from Texas community banks about their technology priorities. Based on the responses we’ve received thus far, an emerging trend is how IBAT members are re-envisioning the future of bank branches.

  1. The (Re)Emergence of a Bank Sales Culture 
    With tighter margins and stiff competition, the press is on for every community bank customer to become as valuable to the bank as possible. This is encouraging Texas community banks to invest more resources in training programs for frontline staff to cross-sell various bank products and services. Nearly 60% of respondents to IBAT’s Tech Survey indicated that improving staff skills in cross-selling is among their top priorities to improve bank earnings.
  2. Envisioning the Branch as a Sales Hub
    Developing the staff’s cross-selling skills is not only for the purposes of greater in-house sales. Results to date show that 49% of banks participating in IBAT’s Tech Survey have indicated they are looking at placing greater responsibility on the branch staff to participate in outside sales calling and local marketing. As in-branch transaction volume continues to decrease, the bank branch will evolve into more of a sales hub than a storefront for financial products and services.
  3. Creating Efficiencies
    How are Texas banks going to shift resources from the branch operations to outside sales? The answer is two-fold – survey participants indicate they will utilize a combination of branch automation and digital resources (like online account opening) to shift resources away from traditionally staff-heavy customer interactions. While this doesn’t mean the end of relationship banking, it marks a move towards streamlining low-value transactional interactions in favor of freeing up staff for higher-value interactions for the bank and the customer.

Based on what’s happening around you, do you agree or disagree? Do the findings thus far line up with your bank’s expectations? Weigh in on IBAT’s Technology Survey and offer your feedback before January 28, 2015.

Staff contact: Christopher Williston, clwilliston@ibat.org, 512-275-2208

Upcoming Deadline for TM 2016

IBAT's TechMecca 2016 is two short weeks away, and it's not too late to register. Whether you're looking for a high-quality solution for business efficiency or to meet the latest customer demands in bank technology, TechMecca will have something for everyone. See the full line-up of demo companies and educational sessions, and make your reservations to be in Austin February 11-12, 2016. 

This Wednesday, January 27, 2016, marks the deadline to secure your room reservation at the negotiated group rate. TechMecca will be hosted at the beautiful Renaissance Hotel in Northwest Austin. Don't miss out on the opportunity to be in the middle of the action. Click here to make your room reservation now.

Staff contact: Julie Courtney, jcourtney@ibat.org, 512-275-2227

Baker Market Update: Jan. 25, 2016

A wild week for the markets, you say? Well, that would be an understatement. Bonds, stocks, and commodities all experienced prodigious and sometimes violent price swings as a host of variables from China’s challenges to petroleum’s plunge served to remind a lot of investors, some of whom may have forgotten, that investing can be a risky business. After a week like this, drinking tap water in Flint might be a safer proposition.

Read more in the Baker Market Update.

Helping Community Banks

StoneCastle Financial Corporation, an IBAT Endorsed Service Provider, was in the media spotlight last week as American Banker highlighted the company’s structured product to help community banks raise low cost Tier 1 capital. 

“Raising capital has been tough for community banks ever since the financial crisis, especially the smallest ones,” the article began. It went on to detail StoneCastle’s offering of collateralized debt obligations in its “pioneering deal… used to fund 10-year subordinate loans” to banks. “Though the loans count as Tier 2 capital, if a bank holding company uses the proceeds to purchase stock in its underlying depositary institution, the depository can treat the new capital as Tier 1 common equity,” it explained.

StoneCastle’s first deal ended up costing the participating banks 4.5% after costs, noted StoneCastle Chairman Josh Siegel in the article. Siegel commented, “if you compare that to other options, it’s ‘Wow!’”

StoneCastle is currently looking for bank participants in its next deal. To learn more, contact the IBAT Services team.

Staff contact: Curt Nelson, cnelson@ibat.org, 512-275-2240

“The Big Short”

People everywhere are talking about the new movie “The Big Short,” which looks at our country’s most recent financial crisis and the sub-prime mortgage lending that caused it. An outstanding op-ed entitled “Community banks aren’t to blame for sins of big banks, Wall Street in ‘The Big Short,’” written by David Littlewood, president of TFNB Your Bank for Life in McGregor, TX, recently ran in the Waco Tribune.

Littlewood aims to make perfectly clear that the big banks and bankers portrayed in the film share no similarities with community bankers. He begins by saying, “Let’s start by differentiating between the big banks and bankers such as those portrayed in the film and the community banks that are, unfortunately, being lumped into the same category.” While community banks are dedicated to the growth and success of their customers, these too-big-to-fail banks and Wall Street firms literally “played craps with the American and global economy for personal gain.”  In an eerily timely development further validating Littlewood’s points, news of Goldman Sachs’ $5 billion settlement related to mortgage securitizations was announced on the same day this op-ed was published. 

He goes on to discuss the loan model used by community banks – one vastly different than the model used by the big banks in the film – in which loans are typically held and serviced for the life of loan by the originating bank. If mistakes are made and losses are incurred, the community bank – and only the community bank, not the American people – suffers the consequences. He concludes by saying, “Not all bankers are bad, greedy or unscrupulous. Community bankers know their success lies in the success of the people and small businesses they help and the communities they serve. I hope people get all sides of the story – and realize the popular idea that all bankers are evil just ain’t so.”

Staff contact: Steve Scurlock, sscurlock@ibat.org, 512-275-2226

Ill-Advised Proposal Dropped

The Federal Housing Finance Agency (FHFA) issued a final rule that does not include its previously proposed requirement that banks maintain at least 1% of their assets in long-term home mortgage loans and at least 10% of assets in residential mortgage loans as a condition of membership in the Federal Home Loan Bank (FHLB). IBAT filed a comment letter on this proposal to express our concerns when the rule was published. 

“We appreciate the FHFA’s common-sense response to the outpouring of concerns on this proposed change,” stated Chris Williston, IBAT President and CEO. “A number of community banks have taken advantage of the products and services of the FHLB to provide funding alternatives and manage interest rate risk. Further, additional “hurdles” in the residential mortgage lending arena subsequent to well-intentioned yet misguided federal responses to the crisis have taken a number of our banks out of this line of business. The FHFA did the right thing in dropping this ill-advised proposal.”

Staff contact: Steve Scurlock, sscurlock@ibat.org, 512-275-2226