Baker Market Update

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.

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

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.  

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.

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
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

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



Fort Bend, Galveston, Harris, Matagorda and Wharton Counties


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

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.

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!

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

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.  

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

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
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

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

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

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

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

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
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

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

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

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

IBAT in D.C.

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."

Baker Market Update

In what has become something like a game of
"rock, paper, scissors" for global bond markets, conditions in Europe
trumped all other variables in driving the direction of bond prices [last]
week. While last week saw the bulls in Pamplona chasing daring Spaniards
through the streets of that city, other daring Spaniards took to the streets of
Barcelona in violent protests over the newly announced austerity measures being
planned by that nation's government. And while bicycle racers continued their
festive tour through the verdant countryside of France, little else from the
Continent could be seen as cause for celebration. Deepening concerns over the
fiscal crisis in the EU along with that region's worsening recession has ramped
up investors' fears of globally negative economic consequences.

Despite [last Thursday's] announcement that Initial Jobless Claims for the
prior week came in at the lowest level seen in over four years (350m), the U.S.
Treasury's auction of 30yr bonds produced a record low yield of 2.58%... Read more in the Baker Market Update.

Leadership in Action

When there was still a frontier, Americans were
pioneers. In the 21st century, they need to be "visioneers" -
especially when it comes to growing and maintaining successful businesses. What
does "visioneering" mean? It is nothing less than the embrace of
constant change. The change needs to be accepted and capitalized on because it
is happening... Read more.

Corporate Account Takeover

In light of the July 6 decision
by the U.S. Federal Court of Appeals for the First Circuit regarding a bank's
liability when cyber fraud occurs, IBAT, with endorsed service provider Dell
Secureworks, has prepared five tips for banks to share with their business
customers to prevent corporate account takeover (CATO) and other types of cyber

  1. Use
    a computer that is dedicated only to handling online banking and bill pay.
    That computer or virtualized desktop would not have any other capabilities,
    such as sending and receiving emails or surfing the Web, since Web exploits and
    malicious email are two of the key malware infection vectors. 
  2. Online
    computer users should avoid using weak or default passwords for any online site
    and should refrain from using the same password for multiple sites.
    Use a "password manager" to put all your passwords in one database and avoid
    using the same password for more than one website
  3. Institute
    and enforce a centralized plan for keeping computer applications, operating
    systems and security software updated.
    Make sure servers and workstations
    are fully patched promptly and regularly.
  4. Implement
    a robust Intrusion Prevention Solution (IPS) to defend against cyber threats.

    An IPS provides policies and rules to block suspicious network traffic such as
    Web exploit kit attacks, SQL injection attacks, and banking Trojans that infect
    computers and steal data that allow intruders access to your banking accounts.
  5. Before
    clicking on links or attachments in emails, always verify that the
    correspondent sent you the email with the link or attachment.
    Hackers are
    known for breaking into email accounts and sending malicious links and
    attachments. Verify with the sender to confirm the links or attachments are
    safe to click or open.

Also, please refer to the earlier guidance by
, a webinar
conducted by the Texas Department of Banking and the Texas
Bankers Electronic Crimes Task Force - Best Practices Reducing the Risks of
Corporate Account Takeovers
as resources to help protect your customers
from fraud. CATO is just one of the many IT security topics that will be
discussed at IBAT's IT
Security Summit
on August 9.

Basel III


recently proposed capital rules have resulted in numerous inquiries from our
membership.  We are obviously concerned, and will be meeting with senior
level regulators to discuss these complex rules and the potential impact on
community banking.  Further, we will have a comment letter finalized in
sufficient time for you to review our thoughts prior to the September 7
deadline for comments.

primary concerns at this juncture include:  the complexity, expense and
burden of compliance appears to be "overkill" for a relatively basic
community banking business model; treatment of TRUPS appears to be in conflict
with a hard-fought victory in Dodd-Frank; Tier 1 capital treatment of market
valuation in the AFS portfolio is problematic; and new risk allocations,
especially in mortgage and other real estate categories, could increase the
cost of credit to consumers and small business borrowers.

of the federal regulators have programs planned to discuss these proposals, and
you should have been notified of the applicable event/teleconference.  

will remain vigilant as this process moves forward, and will, as always, be
focused on how these new capital proposals will impact you as a community bank.

Abound Resources

On July 10, Abound Resources, an IBAT endorsed service provider, announced
their acquisition of Sheshunoff Consulting + Solutions' suite of Risk
Management Software products

In a joint statement, President and CEO Brad Smith stated, "We are
extremely pleased to be able to acquire the leading online Enterprise
Risk Management
system (ERM) designed specifically
for the community bank and credit union market. The bRisk suite combines
compliance best practices for BSA, Fact Act, SOX, FDICIA, vendor management,
business continuity planning and internal audit with automated risk
assessments, controls and reporting to provide a comprehensive solution
for bank and credit union compliance - all at a price point that fits a
community institution compliance budget." 

Ms. Sheshunoff noted that, "Based on the fit of
our services with theirs and their track record of outstanding client service,
we felt that Abound was our best choice to ensure continued high levels of
service and the best path to a seamless transition for our bank and credit
union clients."

Congressman Hinojosa's Visit

Congressman Ruben
Hinojosa visited with veterans at The First National Bank of Hebbronville.
During the recent ICBA/IBAT visit to Washington D.C., Congressman Hinojosa
expressed an interest in meeting with the veterans in Hebbronville. Bank
President Hinojosa offered the Bank's Community Room and his staff coordinated
the luncheon. Congressman Hinojosa replaces Congressman Henry Cuellar as House
Representative for Jim Hogg County (Hebbronville) as a result of

Pictured with the Congressman are President/CEO Israel Hinojosa
and employees of the bank.

HCSB Merger

[Plainview, TX] Recently, the Boards of Directors of HaleCo Bancshares, Inc. and LubCo Bancshares, Inc. – the two holding companies of HCSB, a state banking association, and Citizens Bank, respectively – approved a definitive agreement to merge the two banks into one, with HCSB being the resulting bank.

Affiliated for years and sharing common ownership and directors, the two entities have entered into a ‘merger of equals’ transaction through a stock exchange as a means to expand services to customers, manage costs and operate more efficiently.

Subject to customary conditions and approval from bank regulatory authorities, the merger brings together two of the oldest and strongest community banks in the Panhandle, both very well respected and sharing a common cause and guiding principles.

The transaction is expected to close in the fourth quarter of 2012, with HCSB doing business as a wholly-owned subsidiary of HaleCo Bancshares, Inc., which also will change its name to Commerce BancShares, Inc. as a part of the proposed transaction. The resulting bank will operate under HCSB’s 1934 bank charter. Upon closing, HCSB will officially operate a total of 12 full-service banking centers and one loan production office across four key regions of Texas: the Panhandle, South Plains, Lubbock and the Hill Country.

Because of strong brand positions in the market regions the two banks currently serve independently, HCSB will continue to operate and market itself as such in the Panhandle and Hill Country, with Citizens operating and marketing itself as “Citizens Bank, a division of HCSB” in Lubbock and the South Plains. “There is no better time than the present to bring Citizens and HCSB together. Both are true community banks that believe in the power of meaningful relationships with customers and, ultimately, when merged, can remain the bank generations can count on,” comments HCSB Chairman J. David Williams.

“The coming together is truly a positive move that will allow us to bring the best to market in all our shared communities – including the expansion of trust and wealth management services and mortgage lending in Lubbock and the South Plains,” comments Citizens Bank Chairman E.W. Williams, Jr.

Executive management, corporate and bank operations, compliance, finance and credit administration for the merged organization will work out of a new facility in Lubbock, which HCSB is in the process of acquiring.

HCSB was chartered in June 1934 in Plainview, Texas and operates seven banking centers – four in West Texas (two in Plainview and one each in Hart and Tulia) and three in the Hill Country (two in Kerrville and one in Fredericksburg) – and a loan production office in Boerne. Assets as of June 30, 2012 were $397 million.

Citizens Bank was chartered in October 1932 in Slaton, Texas and operates five banking centers – one in Slaton, one in Post, one in Shamrock and two in Lubbock. Assets as of June 30, 2012 were $275 million.

Upon completion and close, it is anticipated that the combined bank will have over $700 million in assets. Characterized by consistent, conservative growth throughout their histories, HCSB and Citizens have grown into two of Texas’ most respected independent banks.

Grand Opening

American Bank, a Texas-based bank serving Austin
since 2001 and IBAT member, kicked off the July 4th holiday a day early with an
all-American celebration at their third local location, which opened early June
in the historic Sampson Building downtown.  

veteran and Austin Region President Robert Greenwood and his staff gave a warm
welcome to the community and are geared up for the ever-growing business
market. The branch offers full depository and commercial loan services, with
three commercial lending officers located there offering convenience and
commitment to Greater Austin.

Left to right, Emily Ballenger, Chris Bourne, Nick Vetsch, Robert Greenwood,
Trim Traister, Melody Garrett and Richard Scanio.

IR/Liquidity Risk Disclosures

Financial Accounting Standards Board (FASB) is calling for comments on its
proposal to expand liquidity and interest rate risk disclosures.  

the proposed rules, a financial institution would have to:

  • Disclose
    the carrying amounts of classes of financial assets and financial
    liabilities in a table, segregated by their expected maturities, including
    off-balance-sheet financial commitments and obligations;
  • Disclose
    information about its time deposit liabilities, including the cost of
    funding in a table or list during the previous four fiscal quarters;
  • Disclose
    its expected cash flow obligations in a table, segregated by their
    expected maturities, without being required to include the reporting
    organization's financial assets in that table;
  • Provide
    its available liquid funds in a table, which includes unencumbered cash,
    high-quality liquid assets, and borrowing availability;
  • Provide
    additional quantitative or narrative disclosure of the organization's
    exposure to liquidity risk, including discussion about significant changes
    in the amounts and timing in the quantitative tables and how the reporting
    organization managed those changes during the current period.

the rule would require disclosure of:

  • The
    carrying amounts of classes of financial assets and financial liabilities
    according to time intervals based on the contractual repricing of the
    financial instruments;
  • An
    interest rate sensitivity table that presents the effects on net income
    and shareholders' equity of hypothetical, instantaneous shifts of interest
    rate curves; and
  • Quantitative
    or narrative disclosures of the organization's exposure to interest rate
    risk, including discussion about significant changes in the amounts and
    timing in the quantitative tables and how the reporting organization
    managed those changes during the current period.

FASB has set a comment deadline of September 25, 2012.  This proposal epitomizes unnecessary
and costly regulatory burden and IBAT will be commenting accordingly.
is our hope that you will do the same.  To file a comment, please follow
the instructions found here.