FDIC Banker Outreach

The Independent Bankers Association of Texas and the Texas Bankers Association have partnered with the FDIC and Texas Department of Banking to bring you this important update on current and emerging banking issues. Breakout sessions are tailored for directors, risk management staff and consumer compliance staff. Attendees will be provided with resource materials for future reference. Register now!

IBAT Member Frost Bank News

Frost Bank last week announced that they had filed to convert from a national bank to a state member bank.  In a San Antonio Express story, Chairman Dick Evans indicated that the move was to facilitate better communication with their primary regulator, and was in the best interest of the bank. American Banker also covered the story.

Texas Finance Commission Appointments

Governor Rick Perry last week reappointed two members and named a new appointee to the Texas Finance Commission.  All the appointments are for terms ending February 1, 2018. 

Jay Shands, President and CEO of First Bank and Trust East Texas, Lufkin, was reappointed as one of the now two commercial bank representatives. 

Darby Byrd is the retired CEO of Orange Savings Bank, and currently serves as Vice Chairman of the bank.  He has been reappointed as the savings bank representative.

Both of these gentlemen have served with distinction.   IBAT congratulates them on their reappointments, and appreciates their commitment to the industry.

New to the Finance Commission is Victor Leal of Amarillo.  Mr. Leal is president and CEO of V. Leal’s Management and Leal’s Mexican Restaurants, and is a former mayor of Muleshoe.  We look forward to working with Mr. Leal in the coming years.

Further information is available in the Governor’s press release.

IBAT Member First State Bank & Trust Celebrates 110 Year Anniversary

On February 16, 2012 the First State Bank & Trust of Carthage, Texas will celebrate 110 years of service to the people of Carthage and Panola County, Texas.

First State Bank & Trust was founded in 1902 as Merchants and Farmers National Bank with capital of $25,000. The founder was R.E. Trabue. Thomas Boren was President, L.J. Smith was VP and Cashier and 3 other employees opened its doors on February 27, 1902. The deposits at the end of the year totaled $6,021.

The bank changed its name in 1910 to Guaranty State Bank. The reason for the change was to take advantage of the guaranty fund which was developed by the State of Texas to ensure the deposits of banks after the Panic of 1907. This was a forerunner of FDIC Insurance, which came into being in 1933 by the act of Congress. The original amount of FDIC insurance for individual accounts was $5,000 per account. The program remains in place today with coverage for individual accounts up to $250,000. Mr. Trabue sold the bank to Mr. R.P. (Pink) Ash in 1910. Bank deposits at the end of that year exceeded $93,000.

In 1923 Guaranty State Bank reported deposits of $410,733. The bank was headed by President R.P. Ash, Vice President A.A. Jordan, Cashier Horace R. Allison, and Assistant Cashier Mrs. Berna Ash Reeves. Mrs. Reeves was Mr. Ash’s daughter and served on the Board of Directors along with Mr. Allison, Mr. Jordan, Mr. Ash, J.M Carnes, Lee Ferguson and J.H. Wooten. In 1925 the bank name changed to First State Bank. Mr. A.L. Lipscomb, Sr. served as interim President until 1927 when B.F. Payne, Jr. purchased the bank from Mr. Ash. B.F. Payne, Jr. was elected President in 1928 and served in that capacity until 1960 when he was succeeded by his nephew, Milton L. Payne. B.F. Payne continued to serve as Chairman of the Board until his death in 1963. Milton Payne served as President until 1984 when he became Chairman of the Board. He served as COB and President until 1984. W.C. Applegate succeeded him as President and served until 1988. Milton served as COB and President from 1988 to 1990.

In 1990 Jim Payne was elected Vice Chairman of the Board and Lynn Vincent was elected President. In 1998, Jim was elected Chairman of the Board and Milton Sr. Chairman. Milton and Jim have served the bank a total of 110 years (Milton-65, Jim-45), which coincides with the 110th Anniversary in February 2012.

Deposits of First State Bank at the end of the decade of the 30’s exceeded $346,000.

The decade of the 40’s impacted business across the nation and created personnel vacancies because many employees were involved in the war effort through military service overseas. The wartime directors included Horace Allison, John C. Brown, Mrs. Nell Owens, B.F. Payne and Mary Payne. Dan Shaw’s wife, Nettie, served as an assistant cashier and director while Dan served overseas. Deposits at the end of the decade were $2,762,614.

In the decade of the 50’s, oil and gas exploration created the opportunity for continued development of local businesses. Two long time employees began their service to the bank in the decade: Welton Sanders (1955) and Lynn Vincent (1957). Mr. Vincent currently serves as President and is a member of the Board of Directors.

Foster Murphy, son-in-law of B.F. Payne, Jr., joined the bank’s board in 1959 and continues in that capacity today. His son, David Murphy, currently serves as Vice President and director.

In 1963 the bank added a trust department and changed its name to First State Bank & Trust Co. The deposits at the end of the decade reached a record $12,153,187.

First State Bank & Trust Co. was given the opportunity for a new location when a butane truck caught on fire and burned several businesses on West Panola Street in the fall of 1968. Construction of a new building began in 1971 and the bank moved to its present location in March 1972. Employees J.R. Duke and Gene Giles joined the bank in this decade. Mr. Duke retired in 2009 as an officer but continues to serve as a director. Mr. Giles currently serves as Sr. Vice President of Lending and is also a director. Deposits at the end of the 70’s were $39,064,618.

A new drive-in on N. St. Mary Street was added in 1983 due to increased demands for drive-in service. Deposits at the end of the year reached $72,205,976. The first ATM was added in 1983.

Decades of the 90’s began with a 12,000 square foot addition to the building built in 1972. This addition included the first escalators in Panola County. Deposits at the end of the decade totaled $188,638,221.

As the bank entered the 21st Century, the pace of change continued with the development of debit cards. The bank celebrated 100 years of service to the community in 2002. The use of computers has driven banks to move forward and to offer new and exciting opportunities for our customers. The latest addition to expand our services to the people of Panola County include a new 3,600 sq. ft. convenience bank at 120 W. Panola. It includes 3 commercial lanes, 10 drive-in lanes and a new ATM in March of 2009. The present directors of the bank are Dwain Brady, John W. Cooke, J.R. Duke, Tom Escoe, Gene Giles, David Murphy, Foster Murphy, Jim Payne, Milton Payne, Kevin Smith, Charles Thomas, Lynn C. Vincent, and Travis Wall.

Deposits as of December 31, 2011 were $383,717,274 and the total capital for the same period was $65,141,422.

As we approach our 110th anniversary, we are more aware than ever that our success as a banking institution has been made possible by the loyal customers of Carthage and Panola County.

BOCB Award Winner Brenham National Bank

Brenham BOCBBrenham National Bank received a Gold medal in the Best of Community Banking Awards sponsored annually by the Independent Bankers Association of Texas (IBAT).  The Brenham bank was recognized in the Financial Literacy category for an aggressive educational campaign to provide a better understanding of financial responsibilities and career opportunities within the community.  Bank employees developed curriculum, conducted workshops and served as volunteer teachers for elementary and high school Junior Achievement programs. Included in the campaign was a “Personal Finance Workshop”, designed to train-the-trainer so that attendees could share information and materials with friends and families.

Growth Strategies: Top 10 Ways Banks Can Grow in 2012

IBAT's goal is to provide a diversity of opinions and viewpoints about
national banking news.  Some news articles do not necessarily reflect
the opinion of the Independent Bankers Association of Texas.

Bankers Digest Featured Articles February 6, 2012 Issue
Source: Grant Thornton LLP

Even in the midst of current industry challenges, banks can take simple steps to grow in the year ahead, according to a recently released report by Grant Thornton LLP.

With the squeeze in interest margins, decrease in lending opportunities, and increase in capital-level requirements, bankers need to focus more clearly on where to deploy capital for the greatest return... Read more.

Appraisals Summit

A recent issue of Texas Bank Report, published by the Texas Department of Banking, identified appraisal and collateral evaluation deficiencies as one of the most glaring issues facing banks in examinations.  The Department specifically identified failure on the part of banks to:
  • Perform timely annual appraisals on Other Real Estate Owned;
  • Update appraisals in distressed markets upon renewal; and
  • Secure an independent third party inspection on livestock and equipment.  

Registration is now open for the March 22 IBAT Appraisals Summit, aimed at updating your real estate lenders, and others involved with lending on real estate, on existing and emerging regulations and trends.

Commenting on Transfer of Regulations

As innocuous as a transfer of regulations from one federal agency to another may at first appear, we are concerned with the deleterious effect the transfer could have on compliance research.  When Regulations B, C, E, F, G, H, I, J, K, L, M, O, P, X, V, Z and DD are transferred to the Consumer Financial Protection Bureau, does that mean that all the links we’ve made to the transferred rules will die overnight. The next time you are researching a compliance issue and you click on a link to read the law, that link may be dead.  Our guess is that it will.  Additionally, the numbering for all these regulations will also change overnight? For instance, Regulation Z will change from 12 CFR part 226 to 12 CFR 1026.  This is going to cause a lot of confusion.  Finally, transactions that occurred prior to December 30, 2011, will be regulated by the old regulations and those closed thereafter will be controlled by the new regulations.

IBAT has written a comment letter to the CFPB, and we encourage you to use it as a template to express your concerns to the CFPB.

Shands Reappointed

IBAT's goal is to provide a diversity of opinions and viewpoints about
national banking news.  Some news articles do not necessarily reflect
the opinion of the Independent Bankers Association of Texas.

Photo by: The Lufkin News

Posted: Friday, February 3, 2012
By STEVE KNIGHT/The Lufkin News

Gov. Rick Perry on Thursday reappointed First Bank and Trust President and CEO Jay Shands of Lufkin to the Finance Commission of Texas.

Shands, whose new term will expire Feb. 1, 2018, is also board chairman of First Bank of Conroe and Balcones Recycling. He is a member of the American Bankers Association, Independent Community Bankers of America, and Independent Bankers Association of Texas... read more.

FHFA Proposed Rule

If adopted, a proposed rule from the Federal Housing Finance Agency (FHFA) will delegate from the FHFA to the FHLBanks the responsibility for determining their member banks’ compliance with the FHFA’s community support requirements. IBAT filed a comment letter opposing this delegation. IBAT’s comment letter points out that FHFA is in a better position to perform this task, FHLBanks are not regulators, and Congress previously took this authority away from FHLBanks.  The proposed rule would also do away with the probationary period for banks with a single CRA rating of “Needs to Improve.”  IBAT opposed that change as well. Click here to read the comment letter.

IBAT Foundation Raffle Begins!

For the third year, IBAT Foundation offers the Guiltless Giveaway to its members as a fundraiser for its financial literacy efforts.  Raffle ticket sales began February 6 and are available up to either  April 12 or  we hit our limit of 2000 tickets. Don’t delay. Last year we sold out in 30 days. Click here to register/buy tickets.

Thanks to the generosity of IBAT associate member Dennis Schwartz, we have nine prizes: Grand Prize of $5,000 Discover Gift Card, 3 Apple iPad2, 2 Nikon digital cameras, 3 selections of Tiffany jewelry.

Ticket Prices range from 1/$15; 2/$25; 5/$50; 12/$100. Click here to register/buy tickets. Payment choices include credit card or invoice. You will receive an automatic confirmation plus numbered ticket stubs that come in the mail.

The winning tickets will be drawn by an independent third party auditor on Friday April 13.

IBAT Banker, Celebrated Couple

IBAT's goal is to provide a diversity of opinions and viewpoints about
national banking news.  Some news articles do not necessarily reflect
the opinion of the Independent Bankers Association of Texas.

Center to celebrate community couples
By Shannon Guillot
Special to The Daily News
Published February 1, 2012

Family Service Center is already in the Mardi Gras spirit. This year at our annual Connections of the Heart “Celebrate Carnival” gala Friday, the Davidson Ballroom of the Tremont House will be transformed into a festive carnival scene.

One of the great highlights during the evening’s festivities will be honoring three community couples who live the mission of Family Service Center by “strengthening families and supporting communities.” Our honorees are Jimmy and Jane Hayley, Vic and Janice Pierson and Drs. Ben and Sharon Raimer.... read more.

Sign the CU Petition Today

More than 12,000 community bankers have signed ICBA’s petition to oppose the expansion of small business lending authority of credit unions.  Last week, credit union advocates descended on Capitol Hill, asking Congress to more than double their lending authority via the Small Business Lending and Enhancement Act of 2011 (H.R. 1418/S.509).

“The current business lending cap of 12.25% of assets was set in law by Congress to maintain a distinction between tax-exempt credit unions and taxpaying community banks. Any legislation to increase this cap would only harm and displace taxpaying community banks and the customers and communities they serve. Taxpaying community banks more than adequately satisfy all past, present, and future small business loan demand from qualified borrowers in their communities across the country,” the petition reads. 

Although reaction to the petition has been significant thus far, IBAT and ICBA are continuing to urge all community bankers to take a few minutes to add their name.  The credit union lobby is applying the full-court press on members of Congress and community bankers need to respond in kind.

IBAT Banker to Retire

IBAT's goal is to provide a diversity of opinions and viewpoints about
national banking news.  Some news articles do not necessarily reflect
the opinion of the Independent Bankers Association of Texas.

Photo by: Joy Lewis, Reporter-News

By Hannah Boen
Posted January 29, 2012

While many have claimed to be self-made men, it is rare to find someone who truly climbed the ranks alone. However, few would argue that Joe Ford beat the odds to become one of the most successful men in the Big Country.

Ford grew up near Hamlin in a small community called Wise Chapel. He was one of 11 children of a cotton-farming family — and tradition would say he should have become a farmer... read more.

Call Today: Co-sponsors Needed for Communities First Act

IBAT has issued a call to action for community bankers to urge their member of the U.S. House of Representatives to become co-sponsors of the IBAT inspired Communities First Act (HR 1697). The call comes after news that the bill will be marked up in the House Financial Services Committee in early March.
  • The CFA contains dozens of significant regulatory relief provisions for community banks in the wake of Dodd/Frank, including:
  • Allowing community banks to amortize losses on commercial real estate loans and other real estate owned over 10 years for regulatory capital purposes;
  • Requiring the Securities and Exchange Commission to conduct a cost-benefit analysis before approving any proposed accounting change;
  • Increasing the threshold number of bank shareholders that trigger SEC registration from 500 to 2,000; and
  • Allowing the Financial Stability Oversight Council to veto Consumer Financial Protection Bureau rules that would adversely impact community banks.

Currently, only four Texas Congressman (Poe, Canseco, Marchant and Sessions) are among the more than 71 co-sponsors of the bill. Please call your House member now and request that he or she co-sponsor HR 1697. A full list of contact information for the Texas Congressional delegation is available here.

BOCB Award Winner Citizens National Bank

Citizens National Bank received a Bronze medal in the Best of Community Banking Awards sponsored annually by the Independent Bankers Association of Texas (IBAT).  The Henderson bank was recognized in the Community Service category for its 80th anniversary celebration, highlighted by the painting of a mural capturing aspects of news, business, history and landmarks of Rusk County during the 80 year period.  Art teacher Janet Wallace won a contest to design the mural and muralist Denna Miller of Longview replicated the design on a downtown building.

Community Bank Bill Gaining Steam

We are pleased to report that the Communities First Act (HR 1697), a broad bill aimed at specific regulatory burden and tax relief for community banks, continues to make progress in Washington.

This bill, an ICBA initiative strongly encouraged and supported by IBAT, was heard in Subcommittee last November, with additional action promised in the coming months.  With the cosponsor tally now at 71, it continues to gain traction and momentum.  Texas cosponsors include Canseco, Marchant, Poe and Sessions.  Additionally, the Senate version of this initiative, S. 1600, counts among its cosponsors Senator Hutchison.  We very much appreciate the support of these lawmakers on this “community bank centric” – and much needed – legislation.  Detailed information on this bill is available here.

This issue is one of many that will be front and center on our upcoming trip to Washington, DC.  For additional information and to register, please visit our website.

IBAT Member Vista Bank's 100 Year Anniversary

This year marks the 100th year Vista Bank has been serving West Texas. In appreciation of their valued clients they will hold a ribbon cutting January 25th at 5:30 PM at Vista Bank, located at 4621 50th Street.

News Facts:

  • The Lubbock Chamber of Commerce will provide a ribbon cutting for Vista Bank's 100th Anniversary
  • Ribbon Cutting will begin at 5:30 PM on Wednesday, January 25th at Vista Bank, 4621 50th Street
  • Wine and hors d’oeuvres will be served
  • Attendees can register to win a $100.00 VISA giftcard
    (Drawing open to everyone. Limit one registration per person. Must be present to win.)

About Vista Bank:
Vista Bank was founded in 1912 in Ralls, Texas. Today, the bank operates 10 full-service banking oces in the communities of Abernathy, Crosbyton, Hale Center, Idalou, Lorenzo, Lubbock, Petersburg, Plainview, and Ralls. Read more about Vista Bank's history.


Political Season in High Gear

With tremendous uncertainty regarding the ultimate district lines, “who’s running where” and even the dates for the primary elections, we are well into our biannual process of determining which candidates to support.  While we are waiting for some finality in the ever-dynamic redistricting saga for a number of open seats in the Texas House of Representatives and Congress, there are many districts and candidate slates that appear to be set regardless of how the process settles out.

And speaking of settling out, the U.S. Supreme Court issued an opinion on Friday in the State’s redistricting case. Because the Court remanded the case for further proceedings consistent with its opinion, it is unclear how that decision will affect the elections.  Stay tuned. There are still a few balls in the air.

Some of you have already received communications from us seeking input on primary contests in your area.  We appreciate your input and involvement, and want to make sure we are following the will of our members in each district.  With over 30 open seats in various bodies, the chances are good you will have an opportunity to provide input in this process.  Additionally, if you have any observations or opinions you wish to share, please call or e-mail us at any time.

Finally, sincere thanks to all of you who have faithfully supported the IBAT PACs over the years.  You continue to make a difference for our industry!

Protect Your Collateral Values

In early December, we sent an email discussing steps to take to avoid impairment of your real estate collateral due to tax lien loans.  As we approach the due date for 2011 property taxes, we encourage you to review this document and your procedures to ensure that your collateral is not impaired due to an unanticipated priority lien.  We continue to receive calls and emails from banks that are dealing with the aftermath of a tax lien transfer, and hope to assist you in avoiding this unfortunate situation.

Texas Banks Find Success with SBLF

A report sent by the Treasury Department to Congress last week showed signs that the Small Business Lending Fund (SBLF) has been successful in stimulating lending.  Nationwide, banks that participated in the SBLF increased small business lending by $3.5 billion over average lending reported in the four quarters before the Small Business Jobs Act, which created the SBLF, was enacted. 

Nineteen Texas banks participated in the SBLF, seeing an average increase in small business lending of 29.6%.

The full list of participants in the SBLF is available via the Treasury Department’s website.

CATO Webinar

Late last week, the Texas Department of Banking (DOB) issued Supervisory Memorandum 1029:  Standards for the Risk Management of Corporate Account Takeovers.

The Memorandum, along with extensive “Best Practices”, provides banks with a roadmap and tools to counter the increasing occurrence of this type of cybercrime.   The materials were developed by a Task Force comprised of representatives from the DOB, U.S. Secret Service, SWACHA and the banking industry.  Additional information regarding the Task Force, process and related resources are available online.

Additionally, the FFIEC Supplemental Guidance on Multifactor Authentication was effective January 1, 2012.  The goal of the Supplemental Guidance is to prevent identity theft and financial fraud from the misuse of online banking applications.

Regardless of your charter type, we encourage you to review the materials on the DOB’s website, and to join in a webinar on January 25 at 3:00 PM for a thorough discussion of this important issue.  A recording and collateral materials will be available online shortly after the live webinar.  

2011 Summary of Deposits

IBAT's goal is to provide a diversity of opinions and viewpoints
about national banking news.  Some news articles do not necessarily
reflect the opinion of the Independent Bankers Association of Texas.

Bankers Digest Featured Articles January 16, 2012 Issue
Source: FDIC Quarterly, Banking Profile Third Quarter 2011, Division of Insurance and Research

Each year as of June 30, the Federal Deposit Insurance Corporation (FDIC) collects deposit data for branches and offices of all FDIC-insured institutions. The resulting Summary of Deposits (SOD) is a valuable resource for analyzing deposit gathering and branching trends, as well as domestic deposit market share. The SOD data are available online... read more.

Read the Latest Missing Linc Blog Post

In an opinion piece and blog post circulated last week, IBAT President and CEO Chris Williston weighed in on President Obama’s recent appointment of a director to the Consumer Financial Protection Bureau.

“The absence of a director was creating a window during which unregulated, non-traditional financial entities such as payday lenders, private student lenders and other financial intermediaries could continue to escape direct oversight and rulemaking of the CFPB. Regulated financial institutions welcome the closing of that window,” Williston wrote. 

However, the appointment of a director, Williston notes, does not come without concern for many community bankers who, “worry that the CFPB will propose rules that will hurt our customers and stifle our ability to provide competitive and innovate products for small businesses.”
The ultimate test of the CFPB, he concluded, will be “how the agency intends to implement ‘tiered regulation’ and resist the temptation to promulgate rules to fit all institutions.”