IBAT News

Win Your Dream Vacation!


The
2012 Dream Vacation tickets have arrived.  Each ticket is $10 and you have
the opportunity to win $5,000 toward your Dream Vacation!

We'd
like to thank our sponsors for making this event possible:

  • Bank
    of the West, Grapevine
  • HCSB,
    Kerrville
  • Independent
    Bank, McKinney
  • TIB-The
    Independent BankersBank, Dallas
  • ValueBank
    Texas, Corpus Christi

Dream
Vacation ticket sales benefit the IBAT PAC, so get your order in today!
Remember, due to state ethics laws, we can accept only personal checks and
personal credit cards.  Contributions are voluntary.

To order your tickets, call IBAT and ask for Patty or download the order form here.

The Fiscal Cliff


As the 112th Congress
hobbles towards recess in anticipation of the November general election, there
seems to be little political will to steer the nation away from the "fiscal
cliff" by extending tax cuts first passed during the Bush administration. 
Both the Republican-controlled House and Democrat-led
Senate have passed their own tax bills.  The House bill proposed extending
cuts across all brackets while the Senate bill followed the path advocated by
President Obama, excluding extension for individuals making more than $250,000
a year.  Neither bill is expected to find its way to the President's
desk. 

While much has been made of the political implications of
the Congressional game of chicken being played with the extension of the tax
cuts, the actual impact on the United States economy is now more clear, thanks
to a study
commissioned by ICBA, NFIB, the S Corporation Association and the U.S. Chamber
of Commerce. 

In short, a tax increase on individuals making more than
$250,000 will likely translate into a loss of approximately 700,000 American
jobs, including 56,000 in Texas.  The impact on Texas is second only to
California, which is expected to lose more than 76,000. 

The major source of job loss, according to the study, will
come from flow-through businesses like S-corporations, partnerships, LLCs and
sole proprietorships, which realize the tax liability of their company's
profits and losses on individual shareholder tax returns.  The study notes
that these businesses employ 54% of private sector American workers and pay 44%
of federal business income taxes. 

In an election season characterized by rhetoric about
economic "fairness," it is clear from the ICBA-backed study that raising taxes on
the highest earners ultimately results in loss of middle class jobs, including
jobs in manufacturing companies, 81% of which are flow-through
businesses. 

IBAT is particularly concerned for the 273 Texas financial
institutions organized as S-corporations, who would see a tremendous increase
in their effective tax rates.  Not only are individual bank shareholders
likely to have their tax rate increased to 36% or 39%, but dividends issued by
the banks to cover the shareholders' tax liability will be taxed at
approximately 44% as part of the "pay for" included in the Obama healthcare
initiative. 

For all of these reasons, IBAT has joined 120+ other
organizations in urging House
and Senate
(link needed) leaders to make the full extension of tax cuts a priority. 

Lending Compliance Summit

After months of testing "plain language" mortgage disclosures
with consumers, the Consumer Financial Protection Bureau proposed sweeping
changes to the RESPA and TILA disclosures.  At the Lending Compliance
Summit, August 15-16, Karen Neeley will take the 1099 page proposal, among
other difficult compliance issues, and distill them down into a brief,
understandable presentation. Although the disclosures are not final, Karen
expects the final disclosures to closely resemble those the CFPB proposed. The
rules will probably not be in effect until January 2013.  However, the
changes are so sweeping that banks simply must begin preparation for the
changes as soon as possible to assure that the right systems will be in place.

To learn more about the Lending Compliance Summitt, or to register, click here

Last Chance to Vote!


Last
reminder, last chance.  Today is election day.  The turnout will be
remarkably low, making your vote even more important.  If you've already
voted, thank you. If you haven't, you have until 7:00 this evening to do
so. Polling locations can be found here. A recap of candidates supported by the
IBAT PACs was provided in a prior edition of The Bottom Line.  

Your involvement in the political process is important and appreciated.

Baker Market Update


[Last]
Monday's bond rally that saw Ten Year Treasury Notes trade as low as 1.39%
shows that blistering temperatures and withering droughts are not the only
things setting records this summer. While the American corn crop may be dying
on the vine... well, stalk, that's still not as bad as the news out of Europe.
At [last] week's outset, market participants were greeted with renewed and
heightened fears about Greece's solvency along with renewed and heightened
fears about the efficacy of the planned bailout of Spanish banks. With those
circumstances adding to the renewed and heightened fears about a possible
crumbling of E.U. unity, that adds up to a lot of scared money looking for a safe
place to hide. The United States wasn't the only refuge from risk as record low
yields were also seen in Germany, the United Kingdom, and of course, Norway.

In an early morning release [Friday], the first estimate of Q2 GDP came in
slightly to the upside of expectations at a 1.5% quarterly growth rate. Along
with that, the Q1 growth rate was revised up slightly to 2.0% from the
previously announced 1.9%... Read more in the Baker Market Update.

Non-Resident Alien Deposits


Last
Thursday, the U.S. House of Representatives passed a bill that included an
amendment to block a recent IRS rule requiring the reporting of interest on
non-resident alien deposits.  The measure was in the form of an amendment
on a bill to bar federal agencies from issuing "significant" new
regulations until the unemployment rate falls below 6%.   

"Sadly, the NRA language and the bill itself is largely a symbolic
gesture," said Steve Scurlock, IBAT Executive Vice President.
 "The Senate reportedly has no plans to bring this bill up, as such
would point out that the IRS rule is unnecessary and misguided and will have a
deleterious impact on a number of community banks, the fragile economic
recovery and citizens of other countries seeking a safe haven for their
deposits.  Further, we are supportive of any measures to require federal
agencies to 'take a breather' from the avalanche of new rules and regulations,
and applaud the House of Representatives for their initiatives in this
area."

IBAT would like to express our sincere thanks to Texas Congressmen Ruben
Hinojosa, Quico Canseco and Henry Cuellar for their leadership role on the NRA
issue.  Congressman Hinojosa was one of three members of Congress to sign
the "Dear Colleague
Letter"
urging support of this amendment.  

Baker Market Update


With
much of America in mid-summer vacation mode [last] week, Fed Chairman
Ben Bernanke chose to spend part of his seasonal break at Washington
D.C.'s iconic theme park known as Capitol Hill. Never one to leave work
at the office, Mr. Bernanke commiserated with park employees about the
recent, disappointing slow-down in the pace of the current economic
recovery and the prospect for even less robust growth throughout the
remainder of the year. Other discussions centered around the possible
opening at year-end of the park's newest thrill ride known as "The
Fiscal Cliff." While much excitement has been generated by this new
ride's potential, park officials have not been very forthcoming on what
the possible features of this new attraction might be. Mr. Bernanke also
visited with other park personnel about possibly reopening
"Quantitative Easing", one of Ben's favorite rides. Even though he was
out of the office, the Chairman's comments still had the effect of
keeping yields on the Ten Year Treasury note pretty much at or below
1.50% for most of the week.

Despite
the vacation festivity, the week started off on a bit of a sour note
when, on Monday, Retail Sales recorded an unexpected 0.5% decline... Read more in the Baker Market Update.

Visa/MasterCard Settlement


"Friday's
settlement between Visa and MasterCard and retailers will likely have an
unfortunate impact on consumers and their buying behavior," said Chris
Williston, IBAT's President and CEO.  

The
settlement, which will now permit retailers to begin imposing a surcharge, or
"retailer checkout fee" each time a customer chooses to pay with a
credit card at the point of purchase, ends a seven year long class action suit
brought by large retailers.  Some retailers have already vowed that they
will ask Congress to intervene and establish artificial interchange price
controls on credit card transactions much like they successfully advocated on
debit card interchange with the infamous "Durbin amendment" to the
Dodd-Frank Act.

"IBAT
will strongly oppose any such efforts and Congress should reject further
government price controls in a system that has benefited all parties,"
Williston said.  Many payment industry analysts have predicted that the
settlement will ultimately raise costs for consumers who have relied on credit
card purchases as a convenient and secure method of payment without the imposition
of added interchange fees.

Vietnam Veterans Memorial


The long effort to build a monument at the Texas Capitol honoring hundreds
of thousands of Texans who served in the Vietnam War is finally on the way to
reality.  Work on the 14-foot bronze sculpture has begun at the Deep in the Heart Art
Foundry
in Bastrop, Texas.

The Texas Capitol Vietnam Veterans Monument project was approved by the Texas Legislature in
2005 by legislation co-sponsored by Vietnam veterans Senator Juan “Chuy”
Hinojosa and Representative Wayne Smith.  Earlier this year, IBAT put out
a call to Texas community bankers to help put the project over the top in
raising matching funds to begin work on the project.

“Thanks to the support of Texas individuals, veteran organizations, foundations,
and corporations, and with a $500,000 matching grant from the Texas Historical
Commission, we have now reached 80% of our fundraising goal,” said Robert
Floyd, chair of the committee that raised funds for the monument.  “We are
absolutely delighted to announce that production of the Texas Capitol Vietnam
Veterans Monument has begun.”

The 14-foot bronze sculpture
by artist Duke Sundt
features five infantry figures poised in patrol positions.  On the base
surrounding the fighting unit are bas relief panels depicting naval, artillery,
medical and aviation services that supported the combat patrol.  The 3,415
Texans killed in Vietnam will be remembered by “dog tags” personalized with
each man’s name, military service, hometown and date of loss.  The 3,415 tags will be entombed inside the
monument.

The Texas Capitol Vietnam Veterans Monument will be installed on the
northeast side of the Capitol grounds.  Dedication is tentatively
scheduled to occur in the fall of 2013.

The monument is accompanied by an online “Living Monument” featuring
profiles of Texans who served in the Vietnam War to extend the monument’s
educational reach.

Silver Alert July 27, 2012

 

AFFECTED TEXAS
COUNTIES AND/OR NWS REGIONS:

Brazoria,
Fort Bend, Galveston, Harris, Matagorda and Wharton Counties
      

THIS
IS A MISSING SENIOR ALERT ISSUED BY THE TEXAS SILVER ALERT NETWORK

The Brazoria County Sheriff's Office is searching for Miguel
Facundo-Rodriguez, diagnosed
with Dementia, H, M,
75 years old, DOB 05-08-1937, HEIGHT 5' 4", WEIGHT 135 lbs, White Hair, Blue Eyes,
wearing no shirt, beige or khaki shorts and gray Nike
shoes.                                                                                                       

The senior
citizen was last seen at 6:00 p.m., 07/22/12 at 1426 Loop Dr.,
Rosharon, TX and is travelling on foot.

Law
enforcement officials believe this senior citizen's disappearance poses a
credible threat to HIS/HER own health and safety.

If you have
any information regarding this missing senior citizen, contact the Brazoria County Sheriff's Office at 979-864-2392.

News Media
Point of Contact is
Brazoria County Sheriff's Office at 979-864-2392.

 


 

Vote Now!


Over
the past several weeks, we have urged you to vote in the primary runoff
elections. It's that important!  

Early
voting is now underway, and runs through this Friday, July 27.  Election
day is July 31.  To determine your polling place, the Secretary of State's website has an easy tool or
you may access this information on your county's website.  

In
an earlier edition of The
Bottom Line
, we discussed the runoff elections as well as specific races in
which the IBAT PACs had made contributions based upon our membership surveys in
the various districts.  We also provided information on several
"friendly incumbents" we have supported in the runoffs.  We
encourage you to review this information in the link provided.  

Even if you will not be
able to vote for a candidate in a local race, your participation is important
as two critical statewide races are in play.  The IBAT PAC has supported
Supreme Court Justice David Medina, and the FedPAC has supported, and IBAT has
endorsed, Lt. Governor David Dewhurst in his race for U.S. Senate.


We strongly encourage you to vote in these important elections and encourage
your circle of influence to do the same.  Turnout will no doubt be low in
this unique election cycle, which makes your vote even more important.

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

 

ATM Bill Update


The
House voted last week - 371 to 0 - to pass H.R. 4367, which overturns the
redundant fee notice requirement. This has spawned a spate of lawsuits in
recent years.  The bill, sponsored by Representative Blaine Luetkemeyer (R
- MO, and a community banker prior to his election to Congress), had 145
cosponsors, including 14 from Texas - Canseco, Carter, Cuellar, Farenthold, Al
Green, Hensarling, Hinojosa, Johnson, Marchant, Neugebauer, Paul, Poe, Reyes
and Smith.

IBAT was among a number of industry trade groups encouraging the passage
of this legislation, and we were obviously pleased with the overwhelming
support in the House.  We are hopeful of swift passage in the Senate.

Senior Housing Crime Prevention


When the IBAT Family looked at the option of adding the
Senior Housing Crime Prevention (SHCP) Program to the Foundation's program of
work, we were reminded that as people age and they must choose some form of
assisted living, they often feel alone. Good people who have spent a lifetime
being productive, being good parents and grandparents, paying taxes and being
good citizens....we feel that they should not be forgotten.

The IBAT Foundation Board approved its sponsorship of this program
to offer additional security to those using nursing homes and veteran's homes
so they could eliminate the worry of protecting their valuables or their
identities. We will all receive a special joy by knowing that we are helping a
senior citizen feel more secure because this program is in place to offer the
security they deserve.

We encourage you to
read the supporting comments from our bank regulators regarding this program. If you can,
help IBAT achieve its goal of adding more community banks by December 2012 to
protect more Senior Citizens in our great state. This is true Texas Community
Banking at its best.

For a listing of 100 senior housing facilities in 84 Texas
cities which have expressed interest in this program, click here XXXXX

For information about the program, visit the SHCPF official
website
or call Peter Gwaltney or Sue Shaffer at 877/232-0859.

Photo A:
Woodforest National Bank Officer Dr. David Gottlieb visits
with a resident of the Woodlands Healthcare Center, during the recent launch of
the Senior Housing Crime Prevention Foundation (SHCPF) initiative in the
Houston area on July 11, 2012. Woodforest National Bank donated a Dell computer
to each of the three senior housing facilities that they have selected to
support with a loan and senior crimestoppers program. The computers provide a
variety of financial education tips and tools, and also connect to the world
wide web.

Photo B, Left to right:
Standing: Park Manor of West Chase Administrator, Beverly
Mustafa, Woodforest National Bank Officers John Ross and Marcus Vasquez, and
SHCPF Representative, George Clinard. Seated: Leaders of the Park Manor
Resident Council.

Are You Virtual?


By Chris Sutherland Network
Engineer, Advanced Matrix Network Services, a JHA solution

Virtualization is a proven
software technology that is rapidly transforming the IT landscape and
fundamentally changing the way that people compute. Virtualization allows you
to enhance the way your IT environment operates. It simplifies the physical infrastructure,
providing centralized management and better flexibility for resource sharing.
From data centers to desktops, virtualization lets banks pool and share IT
resources centrally and standardize computer deployment and resources so data
is more secure. 

For years, bankers have been
watching and waiting for the definitive direction of virtualization. Although
the technology isn't new, there has been a delay in adoption for reasons
ranging from an overall lack of knowledge about the benefits, to banks fearing
a shift in their day-to-day operations.

Today, virtualization
technology is maturing and the tangible benefits are being realized - and the
timing couldn't be better. In the recent uncertain economic environment, the
industry-wide virtualization initiative is generating immediate and ongoing
operating efficiencies and cost savings for many banks nationwide. And more and
more banks are progressively plugging in.

Below are the top five reasons
banks are implementing server virtualization.

1. Get more out of resources

With virtualization, banks can
pool common infrastructure resources and break the legacy "one application to
one server" model with server consolidation. Virtualization can dramatically
reduce the number of physical servers and dynamically redistribute excess
computing power to where it is needed most. As the processing power of today's
servers continues to increase, it is now easier than ever for one more powerful
server to replace multiple smaller servers.

Reducing the number of physical
servers also reduces ongoing energy requirements, making it a more
environmentally friendly way of doing business. This option is attractive to
banks that are adopting "green" business practices.

2. Reduce data center costs

Cost
reduction is one of the primary reasons banks are increasingly taking advantage
of virtualization. Virtualization requires fewer servers and related IT
hardware and can reduce real estate, power, and cooling requirements. It also
provides more efficient management tools, which can enable banks to improve
their server‐to‐admin ratio and even reduce personnel requirements. And looking
at the big picture, virtualization dramatically reduces the hassle and costs
associated with ongoing hardware maintenance.

3. Enhance availability and
security

Virtualization increases
availability of hardware and applications, improving business continuity and
disaster recovery. It enables banks to securely backup and migrate entire
virtual environments with practically no interruption in their day-to-day
operations. With virtualization, banks can eliminate planned downtime and
recover quickly from unplanned business interruptions.

4. Gain operational
flexibility

Virtualization enables banks to
respond to market changes with dynamic resource management, faster server
provisioning and improved desktop application deployment. Banks need to be able
to change software and add new products in a reasonable time frame. With a
virtual server infrastructure, they can do this without having to find new
hardware, order it, and wait on having it shipped to the bank. If you have the
growth room in your setup you can configure and test without having to wait for
equipment.

5. Improved desktop
management and security

Virtualization provides
environments that users can access locally or remotely, with or without a
network connection on almost any standard desktop, laptop, tablet PC, or
device. With desktop virtualization, banks can secure and manage desktops from
one centralized location. Using simple management tools, all desktops can be
configured the same and the data is stored at a data center to help ensure that
security and backup policy requirements are upheld.

Getting started with
virtualization

Banks that are interested in
getting started with virtualization should begin the process with discovery and
planning. It's important to analyze the current operating environment and use
that information to decide how and where virtualization should be utilized.

Discovery - First, take inventory of your entire environment,
including servers, workstations, and switches. Monitor the performance of your
environment, which includes building a history of performance for servers,
diagramming what each workstation needs physically, and tracking performance of
bandwidth locally on wide area networks.

Planning - Review your
discovery documentation, and determine what elements of your environment are
good candidates for virtualization. Determine your future needs in areas such
as management, disaster recovery, and cost savings. And make sure you're
working with a trusted and proven vendor that is experienced with evaluating
and implementing virtualized environments. Look for a vendor that offers custom
network solutions and consultation that support virtualization, server
consolidation, storage, communications, conversions, and migrations.

Server virtualization can
generate significant cost and time saving benefits to banks. If you haven't
researched how this operational enhancement can help your bank save money,
improve disaster recovery, and simplify day-to-day processes, there's never
been a better time than right now. Around the world, companies of all sizes are
benefiting from virtualization - don't be left behind!

Chris Sutherland is a
Network Engineer, Advanced, at Matrix Network Services offered by Gladiator
Technology, a solution provided by the ProfitStars® division of Jack Henry
& Associates, Inc. (JHA). He can be reached at csutherland@jackhenry.com.

Taking a Different App-ti-tude


By Jennifer Geis

The following article
originally ran as a feature in the July/August
edition
of The
Texas Independent Banker Magazine
.  

With each passing day, it seems that there is a gizmo, gadget, or app
for virtually everything, from grocery shopping or finding the cheapest gas in
town, to organizing photos or finding a long lost relative.

The most recent consumer craze is the tablet device.  Ownership of
this technology is growing exponentially with tablet users in the U.S.
estimated to grow 51 percent from 2010 to 2015.  At last count, Apple has
sold more than 44 million iPads with several other vendors following
suit.  Amazon has now introduced its own set of tablets, and Forrester
Research estimates that it could sell anywhere from three to five million
tablets in its first quarter on the market.

It's tough to keep up with all of these newly released gadgets, and
tougher still if you're a first-generation iPad or tablet user.  With the
myriad of applications available on the market today, it can be difficult to
determine which apps you need, which ones are worth paying for, or perhaps more
importantly, which ones you will actually use.

Many iPad and tablet users are flocking to a new application called
Flipboard.  Flipboard packages images, videos, articles, Facebook updates,
and tweets in a consolidated format.  It organizes personal preferences
and offers them up in a one-page block format that is optimized for easy
browsing.  Flipboard even collects information published by friends on
Facebook and Twitter, turning disparate links to photos, videos, and articles
into an accessible potpourri of your favorite things.

This is the new expectation of the online experience - a place for
everything and everything in its place.  With all of the online options at
our fingertips, consumers are gravitating more and more to the online channel
to simplify and solve the challenge of organizing their lives.

This methodology not only applies to the way we interact online in
general, but it also applies to the way we bank online.  Just as apps come
and go, our attitude toward banking is evolving.  Consumers are expecting
easy and immediate access to organized and consolidated financial information.

So how can your bank meet this consumer demand and consolidate
transactions into a pretty package of financial services in the same way that
Flipboard does for the iPad?  Three small initials - OFM (online financial
management).

OFM (also known as PFM, or personal financial management) is growing in
popularity as more and more banking functions move online and consumer demand
grows for all-in-one financial control.  OFM sites are marketed as
"dashboards" where users can view multiple accounts, categorize financial
transactions, manage alerts, create and manage budgets, accurately analyze
spending, and even establish savings goals and track net worth - all in one
place.

According to a recent Celent report, online banking is no longer about
using personal computers and logging into an online banking website.  It
is about an integrated, fully functional online banking and bill pay user
experience.

Celent reports that in the future of electronic banking, an ideal scenario
for banks would be to house all of its electronic banking components in one
place.  Interchangeable modules such as bill pay, money movement, and PFM
widgets would be served up to the device, and modality would be selected by the
consumer, along with a properly skinned front end.  This shift clearly has
implications for OFM and will contribute to it becoming the cornerstone of
online banking.

Although OFM has come a long way in recent years, it still has a way to
go in some respects.  Many OFM solutions on the market today are bolt-on
solutions that create a disconnected user experience; their solutions open up
in new browser windows, have different interfaces and menu structures, varied
navigation, and an inconsistent look and feel.

Progressive technology vendors, however, anticipated the demand for a
seamless consumer experience, and developed OFM services that encompass the
comprehensive and cohesive features that consumers crave.  Smart OFM
solutions allow consumers to easily monitor account balances, transfer funds,
create attractive graph-like pictures of their overall financial status, and
even pay bills through one simple and secure connection to their online banking
website.  They offer individualized homepages that integrate online banking,
OFM, and bill pay, along with bank-specific marketing to create a consistent,
comfortable, and targeted user experience.  Progressive technology
providers are also introducing online banking iPad apps, which will allow users
to be even more mobile and flexible with their financial management.

So, while banking online and paying bills probably isn't on the top-10
list of fun things to do on the weekend for most consumers, seamless features
like OFM and mobile features like the iPad app certainly make financial
management much easier and possibly more entertaining for today's tech savvy,
convenience-driven consumer.  And perhaps more importantly, OFM aligns
their online banking experience with the "everything in its place" methodology
that is so common among other new technologies available on the market today.

Your customers are gravitating toward the online channel to simplify
their financial management experience.  If you aren't offering the
premiere technology, online features, and simplified user experience they
expect, there's likely a bank just down the street that can.  Talk to your
technology vendor about these high-demand features today and develop a plan to
adopt them at your bank right away.  Your convenience-driven customers,
and ultimately your bank's bottom line, will benefit from your progressive
thinking and organizational shift in app-ti-tude!

Jennifer Geis is a
Strategic Business Development Manager for Jack Henry & Associates,
Inc.  She can be reached at 727-525-2107 or
jgeis@jackhenry.com.

IBAT in D.C.


IBAT
President and CEO Chris Williston and EVP Steve Scurlock spent several days in
our nation's capital last week "telling the community banking story,"
and voicing concerns about proposed regulations, including Basel III and the
CFPB QM rules.  Productive meetings with senior level regulators at the
banking agencies, as well as the CFPB, were mixed with visits on the Hill with
key lawmakers and staff.  IBAT also reaffirmed its strong support for
Congress to extend the Transaction Account Guarantee (TAG) program before the
December 31, 2012 deadline.  Community banks have benefited from TAG as a
stable source of funding in these times of financial instability.  

"The challenges continue for community banking, and decision-makers
need to hear our message," said Williston.  "Everyone seems to
be saying the right things - community banks are 'the good guys' - we didn't
cause the problems and we're getting crushed by an avalanche of regulatory
burden.  What we don't see is this being translated into meaningful action
or results, and that was one of our main objectives this trip.  The recent
issuance of a complex and burdensome capital proposal is a clear case in point.
 We believe that this is unnecessary and clearly overkill for the
community bank sector, and we had the opportunity to convey our thoughts - face
to face - on this and other important issues to key players."

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