The Texas Independent Banker

The July/August edition of IBAT’s magazine, The Texas Independent Banker, will arrive in your mailbox this week, and the online edition is now available for you to view.  Feature articles in this edition include:

Click on the full online edition to view more, including the General Counsel’s Corner and Compliance Guy resource articles.

Guidance Issued

Last week, four federal regulatory agencies and the Conference of State Bank Supervisors (CSBS) issued guidance to financial institutions regarding home equity lines of credit (HELOCs) nearing their “end-of-draw” periods, which occur when the principal amount of the HELOC must begin to be repaid.  The guidance encourages financial institutions to effectively communicate with borrowers about the pending reset and provides broad principles for managing risk as HELOCs reach their end-of-draw periods.

The agencies and CSBS recognize that some borrowers may find it difficult to make higher payments or to refinance their existing loans due to changes in their financial circumstances or declines in property values.  When borrowers experience financial difficulties, financial institutions and borrowers generally find it beneficial to work together to avoid unnecessary defaults.  

The guidance describes how financial institutions can effectively manage their potential exposures under these circumstances and promotes an understanding of potential exposures. It also describes consistent, effective responses to HELOC borrowers unable to meet their contractual obligations.  The appropriate accounting and reporting procedures for HELOCs nearing their end-of-draw periods are also discussed.

The Case Against Disparate Impact

Community bankers around the country have been, understandably, frustrated by a spate of fair lending referrals made to the Department of Justice by federal regulators over the past several years.  Bankers have questioned the efficacy of the referrals and the potential impact on lending as a whole. Yesterday, in an opinion piece in American Banker, Peter Weinstock of Hunton & Williams provided a well reasoned and articulated summation of his belief that the referrals, based largely upon disparate impact regression analysis, might be hurting the very population they were designed to protect.

Weinstock cites a 2011 settlement between the U.S. Department of Justice and Nixon State Bank which targeted the bank’s small-dollar loan program.  Following the settlement, interest rates on loans in the program rose from below 10% to 18%, with no discretion provided for funds on deposit, credit history or length of relationship.  This, effectively, shrank the portfolio of loans in the program by half.

“Intentional discrimination should not be tolerated, but we should question the benefits of disparate impact theory for fair lending enforcement,” Weinstock wrote.  “By forcing everyone to aim to the highest common denominator created by expensive testing related to a mathematical model, the impact is hurting everyone.”

Leadership Conference Photos

As promised in last week’s Bottom Line, the pictures from the 29th Annual Leadership Conference are now available online!

Thank you, again, to all who were able to attend the event and don’t forget to save the date for the 30th Annual Leadership Conference, June 11-13, 2015 at the Hyatt Hill Country Resort and Spa in San Antonio.

Financial Literacy Summit

If you've been struggling with ideas for how to define and get started with a financial education approach in your market, puzzle no more. Just register for and attend the upcoming Financial Literacy Summit. Or if you cannot attend, cultivate another champion in your bank to come to this interactive conference.

In addition to three peer-to-peer learning panels on what is going well with various bank programs across Texas,the Summit will include information on new TEA financial literacy standards, and ways to help your small business customers be better prepared for the loan process. Additionally, you will hear four bank Presidents/CEOs share their views on why financial education is an important outreach in their bank. Our guest speakers include:

  • Mack Neff, Integrity Bank Houston,
  • Jimmy Campbell, Community Bank, Granbury,
  • Jeff Wilkinson, Pioneer Bank, Dripping Springs, and
  • Tee Dippel, Brenham National Bank.

Happy 4th!

In observance of the July 4th holiday, the IBAT offices will close at noon on Thursday, July 3rd and will remain closed through Friday, July 4th. Regular business hours will resume on Monday, July 7th. 

We hope that the holiday is an opportunity for all IBAT members to enjoy time with family and friends, as well as to reflect on the freedoms we enjoy and the ongoing sacrifices made by many to ensure them. Happy 4th of July!

Northstar Bank of Texas

There is a great deal of excitement happening at NORTHSTAR BANK OF TEXAS these days. On May 15th, Tom C. Nichols, Chairman and CEO of Carlile Bancshares, Inc, parent company of NORTHSTAR BANK, announced plans to purchase Community Bankers, Inc. and its 10 Community Bank locations in the North Texas area.  These new banking centers will become NORTHSTAR BANK OF TEXAS when the acquisition is completed during the fourth quarter of this year.  

Tony R. Clark, President and CEO of NORTHSTAR BANK OF TEXAS, stated:  “This is such an exciting time in our bank’s history.  The addition of Community Bank will result in the combination of two banks with a long history of growth and success in the markets they serve.  Both teams comprise a high level of experienced and professional bankers, who deliver quality products and services.  In addition, both have developed a strong culture of maintaining a personalized style of banking with their customer base throughout the years.    

NORTHSTAR BANK continues to be the largest community bank in Denton County and one of the largest in the Dallas / Fort Worth area.  For the sixth straight year, NORTHSTAR BANK OF TEXAS has brought recognition to the region, when they were once again named as one of the Best Companies to Work for in Texas for the year 2014 by the Texas Monthly magazine. They were also named as one of the Best Banks to Work For in 2013 by American Banker and Best Companies Group.

Once the merger of the two banks is complete, NORTHSTAR BANK OF TEXAS will be comprised of 27 banking centers located in Central Texas and North Texas, and will have $1.6 billion in assets.  

Contact: Michele Barber | 940-383-6211 or mbarber@nstarbank.com

US Supreme Court Decision

Last week, the United States Supreme Court struck down a number of President Obama’s appointments to the National Labor Relations Board, made during a three day recess of the Senate in 2012. While there has been some discussion of this decision impacting the appointment of CFPB Director Richard Cordray and subsequent actions of the bureau, it appears that the ruling will have no impact on either.

According to Jacqueline Allen, attorney at Cox Smith, Cordray ratified his actions made during the recess appointment following his reappointment to the post in July of 2013.  As quoted in Allen’s blog post last week, Cordray published a Notice of Ratification in the Federal Register on August 30, 2013, stating: "I believe that the actions I took during the period I was serving as a recess appointee were legally authorized and entirely proper.  To avoid any possible uncertainty, however, I hereby affirm and ratify any and all actions I took during that period."

Dell Double Discounts

Due to the popularity of their June offer, Dell is extending their Double Discount deal for IBAT members through the month of July!  Over the last quarter, IBAT member banks and their employees purchased more than $5 million in products from Dell, saving an average of 32% on each order.  Take advantage of this great offer by visiting Dell's website or by contacting Bryan Horten at 512-942-9120. For the best price, remember to use the coupon codes below, as well as IBAT member ID link GS126658178, when placing your order. The offer is valid for IBAT member banks and bank employees. Please pass on this email, or download the flyer and post it somewhere in the bank where everyone can see it.

July offers include:

  • Save an additional 4% on Inspiron Computers: T93PH3N0L1CV2Q
  • Save an additional 10% on Optiplex, Latitude, & XPS Computers: 231QDD39XWN$T8
  • Save an additional 20% on PowerEdge servers $1,299 and above: W0Q$T80R42?VTN
  • Save up to an additional 20% on Dell Precision Workstations: N7Z13?NS5K42L1
  • Save up to an additional 10% on select electronics and accessories: P84T3FRKPN599G

For orders more than 5 units, please reach out to Bryan Horten at Bryan_K_Horten@Dell.com or 512-942-9120.

Non-transferable. Offer is not combinable with other offers, discounts or coupons. Limit of 5 promotional items per customer. Limited Time Offer. 

Back to the Future

Thank you to everyone who attended the IBAT Leadership Conference and, once again, made it an affair to remember. This year’s conference included more than 265 attendees (including 65 first-timers), who connected with one another through focused leadership training, established networking designed to enhance relationships, and hot topic breakouts geared towards operations, lending, sales and marketing. 

Congratulations to Peter Smith, Senior Vice President and Commercial Lending Officer with Happy State Bank, on his selection to receive the 2014 Excellence in Leadership Award.  Peter, a graduate of the Southwest Graduate School of Banking and board member of the Texas Tech School of Banking, has shown great leadership in his career and in his service to IBAT’s Leadership Division, recruiting more than twenty new members to the Division in the past year. 

IBAT was also pleased to honor Five*Star Award winners: Granville Financial Group, John M. Floyd & Associates and BKD, LLP, during the 29th Annual Leadership Conference. 

Full photos of this year’s events, including attendee photos with Daryl “Moose” Johnston will be available in next week’s edition of the Bottom Line. Save the date for the 30th Annual Leadership Conference, June 11-13, 2015 at the Hyatt Hill Country Resort and Spa in San Antonio.

Thank you to The Baker Group for providing an economic update available here to all conference attendees.

Salary & Compensation Survey

The 2014 data collection period for the Texas Community Bank Salary and Compensation Survey is now open.

Don't miss your chance to submit your bank's salary, compensation and benefits data via online entry, mail or fax! IBAT members who submit data will receive a free copy of the comprehensive bank compensation report, due out in early September. This benefit is made possible through the generous sponsorship of Bank Compensation Consulting.

Other benefits of the Salary and Compensation Survey include:

  • One data collection effort per year;
    July 1-31, 2014;
  • Streamlined to reduce your time commitment, focusing on the top 25 most common job positions;
  • Comprehensive static reporting and custom online reporting tool for segmentation by asset size, market, etc.;
  • Targeted questions on bank employee benefits (New in 2014!)

Consumer Tips: July 2014

According to the National Weather Service, Texas was the 2nd most disaster-prone state in the US with estimated property damage of $23.7 billion from 2006 to 2013 and 313 weather related fatalities during the same period.  For the same period, only New Jersey had slightly more property damage - but just more than a quarter of the weather related fatalities suffered by Texans. 

IBAT’s Consumer Tips article for the month of July, drafted by Carol Troy of IBAT Financial Services, offers consumers practical tips on preparing yourself and your insurance for the storm season.  Click here to download a PDF copy of the tips for inclusion in your statement stuffers and use in lobby materials.  IBAT will distribute Consumer Tips to weekly papers around the state. If you would like a customized version of the release for distribution, please contact Christopher Williston.

Baker Market Update: June 30, 2014

Have you heard the latest about the havoc that’s been wreaked by all the bad weather? Not that GDP thing; that’s old news. I’m talking about the USA Soccer Team. Fortunately, even when we lose, we win. Friday’s loss to Germany didn’t mean elimination for the American squad, but many observers wonder if the outcome might have been different under drier conditions. That’s what happens when you play soccer in a rain forest. If the weatherman is going to get the blame for the economy’s dismal performance, we might as well blame yesterday’s futbol results on him, too. He is, as we all know, directly responsible for the downturn in exports, the decrease in inventories, the deceleration of consumption, and the decline in state and local government spending that all helped the nation’s output contract by 2.9% in Quarter One. Now that we finally have the final numbers, it’s a relief to know there’s nothing wrong that a few high-pressure fronts won’t fix.

Read more in the Baker Market Update


The 29th Annual Leadership Conference is underway! Whether you are with us in San Antonio, or not, you can keep up through social media. Simply use Twitter hashtag #IBATLDC14 and don't miss a beat. 

Welcome Lori!

The Independent Bankers Association of Texas (IBAT) is pleased to announce the addition of Lori Cortez to the IBAT Services team.

Lori joins IBAT Services as a Vice President, following thirty years of service as a Texas community banker, most recently with Southwest Bank in Fort Worth, Texas.

In her new role, Lori will expand the knowledge base of the IBAT Services team, providing an in-house banker’s perspective to identifying new products for endorsement by the IBAT Board of Directors and the due diligence that underlies every new endorsement.

To reach Lori, or any member of the IBAT Services team, call 512-474-6889.