Basel III

outcry against the Basel III capital proposals grew ever-louder last week as
sixteen members of Texas's Congressional delegation signed a letter to federal regulators opposing the
measures.  This is in addition to the Congressional letters we mentioned
last week from Representatives Conaway, Hensarling and Neugebauer.  

"A one-size-fits-all approach to banking regulation has the potential to
create more unintended consequences than it yields in market stability,"
the letter said, echoing long-time calls by IBAT for a bifurcated regulatory
structure which accounts for the traditional business model of community banks.

IBAT extends our sincere thanks to these members of Congress for their support
on this vital issue. We encourage IBAT members who live in the sixteen
districts represented by these members to extend their thanks as well.

Early Voting - Last Chance!

opportunity to participate in early voting for the upcoming election ends this
Friday evening.  To locate your polling place, please follow these instructions. The "big day" is
next Tuesday, November 6.
 Whether you vote early, or with the masses on Election Day, please do
take time to vote, and encourage those in your circle of influence to do the

last week's edition of The Bottom Line, we
reviewed a number of "competitive" races and indicated those
candidates receiving support from the IBAT PACs in those races.
 Additionally, we provided a link to judicial candidate recommendations.
 Rather than reprint that information, we encourage you to access that
information here.

Treaty Oak Bank Conversion

Tony R. Clark, President and CEO
of NORTHSTAR BANK OF TEXAS recently announced that
Treaty Oak Bank will become part of NORTHSTAR BANK

effective November 5th, 2012. 

a member of Carlile Bancshares, Inc., headquartered in Fort
Worth, TX, NORTHSTAR BANK is the largest community
bank in Denton County,
and one of the largest in the Dallas / Ft. Worth
area.  Over the past 13 years, NORTHSTAR, as a full-service bank, has grown from 2
locations to 10 locations located throughout North Texas,
with assets over $1 billion. 

NORTHSTAR continues to be a
leader in the banking and mortgage industries. 
 Their professional staff and personalized
style of banking have been the key ingredients to their success.  Mr. Clark stated: "We are excited to expand
our NORTHSTAR BANK work family into the
Central Texas region and be able to deliver
our unique, personalized style of banking to the area."  Ron Simpson, President of Treaty Oak Bank,
affirmed:  "This merger will be an asset
to the customers of Treaty Oak Bank knowing that the conversion will bring
added resources, products and services to the markets we currently serve."

NORTHSTAR BANK recently brought recognition to our industry once again,
when they were named as one of the Best Companies to Work for in Texas for the year 2012
for the 4th straight year.  This
program was created in 2006 and is a project of Texas Monthly, the Texas Association of Business (TAB), the Texas
State Council of the Society of Human Resource Management (TSC-SHRM), and Best
Companies Group.

the move into the Austin and Marble Falls
areas, NORTHSTAR BANK OF TEXAS looks forward to
expanding its hometown style of community banking into Central
Texas, with all the benefits of that a mega bank would bring.  Watch for our "star" rising in this

Member FDIC and Equal Housing Lender

Lone Star Capital Bank

ANTONIO, TX (October 23, 2012) - 
Lone Star Capital Bank
was honored to be recognized as a United Way pacesetter for the second year in
a row as a record breaking 1,200 business and community leaders gathered last
week at the United Way's kick-off luncheon.

bank has already contributed $22,424 this year, a 20 percent increase over last
year's donation and, for the eighth year in a row, the bank attained 100
percent participation from its employees.

efforts of Lone Star Capital Bank, along with the other organizations that
gathered to kickstart this year's campaign, contribute largely to San Antonio
being named the number one best performing city in America for United Way
giving.  Combined giving from local pacesetter institutions in 2012
totalled $32.9 million - an unprecedented lead toward the $49.3 million goal.

collected for the United Way will be invested in 135 high-quality programs and
initiatives at 64 agencies throughout the community, ensuring that vital work
will continue to assist older adults, respond to emergencies, fight hunger and
homelessness, strengthen families, promote early childhood education, help young
people stay in school and graduate, support the disabled, and build a stronger

Star Capital Bank specializes in providing customized banking services for
entrepreneurs, executives, professionals, small businesses and real estate
investors. It is a member of FDIC and an Equal Housing Lender.

Social Media

media is an everyday reality that is penetrating through the walls of our daily
lives. The use of social media has become unavoidable due to the use of smart
phones, laptops, and tablets that people are using to connect with people all
over the world. People are constantly posting pictures, tagging posts about
their current location, and even sharing mass amounts of personal information
to the World Wide Web through social media websites like Twitter, LinkedIn, and
Facebook. Some people see this over share of information as a bad thing, but in
reality it can actually be an asset to your business as long as you remember
three things about social media. They are three easy to remember lessons: Be
passionate, know your company's identity, and trust your people.

first lesson, be passionate, is key to using social media. Have you ever gone
to a grocery store and been overwhelmed by how many different choices of water
there are? You look around and there are twenty choices for "different" types
of water all at the same price and you have no idea which one to pick because
there actually isn't much of a difference. You end up picking the first pack of
water you see, or you walk away from the water all together because you're
overwhelmed by the endless choices. This is kind of like the world of Twitter.
Every day limitless amounts of content circulates Twitter because companies
force their employees to share information to popularize the company's brand.
This is wrong. This type of information is typically ignored by the public
because it is not personalized and not interesting to read about it. The key to
fixing this problem is to stir passion in your employees. Get your employees
excited about unique things that are going on within the organization. This
will then create a desire within the employees to promote your company through
social media. The passion in their tweets will then create interaction between
customers and your company. That passion will help create that unique brand
recognition that will make your company stand apart from the rest.

second lesson is to know your company's identity. What makes your company
unique? What makes your employees want to work hard so that your organization
can be successful? It is important to celebrate your company's values because
they make up your company's identity. If you are a small and low cost company
you do not have to have a Facebook page just because it seems like every other
company does. In fact having a Facebook page for that type of company could
actually clash with your brand image. Remember to know what your company
values, know what your company needs to be successful, and then use the
necessary tools to achieve that success.

third and final lesson is to trust your people. Since social media is so deeply
intertwined with our everyday lives, it would almost hurt your company more to
block all forms of social media in the workplace.  Instead you should make
social media important to your employees.  Be strategic with social media
by creating a type of training session for your employees that teaches them how
to use social media successfully for the company and for themselves. Have the
right tools in place to show them what is appropriate and what is good for the
company, but remember to never force your employees to use social media because
that can hurt your company more than it actually can help.

media is a wonderful emergent tool that, when used properly, can benefit your
company exponentially. Embrace twitter, Facebook, and any other social media
website and use them to your advantage. Today we discussed three things about
social media that can make your company successful: be passionate, know your
company's identity, and trust your people. If you remember to use all three of
these tools you will help eliminate the mass amount of clutter and noise that
circulates the web and you will have effectively used social media to your
company's advantage.

Silver Alert


NWS Brownsville &
Corpus Christi


Pharr PD is searching for Martin Anaya, diagnosed with
Alzheimer's, White, M, 92 years old, DOB 11/11/19, HEIGHT 5' 3", WEIGHT 130
lbs, Gray Hair, Brown Eyes, wearing blue button shirt, khaki pants and a white
cowboy hat.                                    

The senior
citizen was last seen at 1:00 p.m., 10/24/12 at 426 E Villegas, Pharr, TX
78577, driving a White, 2003 Nissan Frontier with TX License Plate 951-9AY.

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 Pharr Police
Department at 956-784-7700.

News Media
Point of Contact is
Police Department at 956-784-7700.

Baker Market Update

Information received since the Federal Open Market Committee met in September suggests that economic activity has continued to expand at a moderate pace in recent months. Growth in employment has been slow, and the unemployment rate remains elevated. Household spending has advanced a bit more quickly, but growth in business fixed investment has slowed. The housing sector has shown some further signs of improvement, albeit from a depressed level. Inflation recently picked up somewhat, reflecting higher energy prices. Longer-term inflation expectations have remained stable... Read more in the Baker Market Update.

Jimmy Rasmussen

Congratulations to Jimmy Rasmussen, President
and CEO of HomeTown Bank and former IBAT Chairman, on his election to the
Federal Reserve Bank of Dallas Board of Directors.  

will serve a three year term beginning January 1, 2013. 

Stress Testing Guidance

Last week, the OCC released guidance
to national banks with assets of $10 billion or less on the use of stress
testing to assess risk in their loan portfolios. 

"Stress tests do not need to involve sophisticated analysis
or third-party consultative support," the guidance said. "For most community
banks, a simple, stressed loss-rate analysis based on call report categories
may provide an acceptable foundation to determine if additional analysis is

IBAT has discussed stress testing for community banks with
senior staff at the OCC and expressed concern that the results of such testing
might be inconsistently evaluated by examination staff.  Additionally,
IBAT remains concerned that the addition of stress testing expectations adds
one more layer to the regulatory burden which plagues community banks in the
aftermath of Dodd-Frank.

Silver Alert




POLICE DEPARTMENT is searching for PAT G BROWN, diagnosed
with Alzheimer's, HM, 81 years old, DOB 03/17/1931, HEIGHT 5'4", WEIGHT 140
WITH GRAY PANTS AND BLACK DRESS SHOES.                                                                                                

The senior
citizen was last seen at 10:30 P.M., 10/22/2012 at 1013 JULIUS, VICTORIA, TX,
driving a SILVER, 2004 BUICK LESABRE with TX License Plate


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 VICTORIA

News Media
Point of Contact is

Mortgage Originator Proposal

Under the
proposed loan origination compensation amendment to Regulation Z, if a creditor
pays loan originator compensation, the creditor may not impose any discount
points or origination points or fees unless the creditor makes available to the
consumer a comparable, alternative loan that does not include discount points
and origination points or fees, unless the consumer is unlikely to qualify for
such a loan. To recover costs, lenders may have to set rates at levels that
trigger federal and state high-cost loan laws. Additionally, contributions to
profit-sharing plans and 401K plans may be affected. Finally, the rules would
require bank mortgage loan originators to essentially meet the rules for
licensing non-bank lenders.  IBAT's comment letter brought each of these issues and
more to the attention of the CFPB.

2012 Elections

general election is underway. Early voting started yesterday, October 22, and
runs through Friday, November 2.  Election
Day is Tuesday, November 6
. You can easily access early voting
and Election Day polling locations, as well as sample ballots, by going to your
County Clerk's website, or find information here.

IBAT PAC and IBAT FedPAC have been active this election cycle, thanks to the
generous support of you and your community banking colleagues.  We have
historically followed the "friendly incumbent rule," and have
supported candidates with whom we've worked and established relationships.
 There are few truly competitive races in the general election due to a
redistricting process that tends to result in control for one party.  In
those contests (based upon a list published by "Texas Weekly")
considered even remotely competitive, the IBAT PACs have contributed to the
following candidates:


  • Randy Weber (CD14)
  • Francisco "Quico" Canseco (CD23)


  • Carlos Uresti (SD 19)
  • Juan "Chuy" Hinojosa (SD 20)


  • Craig Eiland (HD 23)
  • Connie Scott (HD 34)

House (continued)

  • J.M. Lozano (HD 43)
  • Jason Isaac (HD 45)
  • Jimmie Don Aycock (HD 54)
  • Dee Margo (HD 78)
  • Stefani Carter (HD 102)
  • Linda Harper-Brown (HD 105)
  • Kenneth Sheets (HD 107)
  • Jason Villalba (HD 114)
  • John Garza (HD 117)
  • Sarah Davis (HD 134)
  • Tony Dale (HD 136)

you have no doubt read in past issues of The
Bottom Line
, the IBAT FedPAC has contributed to both U.S. Senate
Candidate Ted Cruz and Mitt Romney for President.  

We also frequently get questions regarding judicial races from our members. We
have a longstanding relationship with The Texas Civil Justice League (TCJL),
one of the leading tort reform groups in Texas. TCJL endorses judicial
candidates, and we encourage you to take a look at their endorsements in these races.  

Please feel free to call (512-275-2226) or email (sscurlock@ibat.org) Steve Scurlock if you have any questions or
comments, and please vote and encourage those in your circle of influence to do
the same.

Compliance Officer

By Kelly Goulart 

I recently read a post that referred to a bank Compliance
Officer as "...part soothsayer, part counselor, and part sage." No doubt the
role of the Compliance Officer has evolved over time into a position of great
importance and responsibility in any bank, large or small. So what exactly is
the role of the Compliance Officer in the bank today and what makes a
Compliance Officer effective?

A very good resource for understanding the role of the
Compliance Officer - and it can be applied to any banking organization - is the
Basel Committee on Banking Supervision white paper entitled Compliance and
compliance function in banks (April 2005). That high level paper
contains valuable principles that can be used to develop and maintain an
effective compliance program. The following is from the Introduction to that
white paper.

"Compliance starts at the top. It will be most effective
in a corporate culture that emphasizes standards of honesty and integrity and
in which the board of directors and senior management lead by example. It
concerns everyone within the bank and should be viewed as an integral part of
the bank's business activities. A bank should hold itself to high standards
when carrying on business, and at all times strive to observe the spirit as
well as the letter of the law. Failure to consider the impact of its actions on
its shareholders, customers, employees and the markets may result in
significant adverse publicity and reputational damage, even if no law has been

Compliance starts at the top.
Repeat - Compliance starts at the top. An effective Compliance Officer should
be a senior bank officer. As we have said in Legal Ease, the title is
not important but the level of authority is. The Compliance Officer must have
the authority to make and enforce policies. Having established a Compliance
Officer as a senior bank officer, the following are normal duties assigned to
that person:

  • work as a primary liaison between the bank and
    regulatory agencies regarding compliance matters and investigations
  • work with the BSA/AML Officer in the
    preparation and evaluation of regular suspicious-activity reports and the
    coordination of Bank Secrecy Act (BSA), anti-money laundering (AML)
    regulations, and terrorist-financing activities
  • study new banking products and services to
    evaluate risk
  • inform and advise the senior management
    regarding proposed and pending regulatory changes
  • update regulations and communicate the
    same to bank staff
  • administer matters relating to codes of
  • prepare and review materials for
    regulatory training efforts

That is a formal outline of the roles and responsibilities
of the Compliance Officer. A more casual outline would be soothsayer,
counselor, and sage. And a good Compliance Officer will feel comfortable in
each of those roles.

A Compliance Officer is part soothsayer. On a proactive
basis they have to peer into the future and see how potential regulatory
changes will impact current products and business practices. At no time is that
more important than it is now as we face a deluge of regulatory changes
prompted by the CFPB and Dodd-Frank. It is critical that Compliance Officers
utilize a resource like IBAT's Capitol Comments to ensure they are
informed of new regulatory requirements and pending changes to existing
regulatory requirements. Playing catch-up is just not an option.

A Compliance Officer is part counselor. They should
supervise a function that identifies, documents, and assesses the compliance
risks associated with the bank's activities. The Compliance Officer should advise
senior management on compliance laws, rules and standards, including keeping
them informed on developments in that area. During the reporting period, the
Compliance Officer should refer to the compliance risk assessment including any
changes to the compliance risk profile of the bank since the last formal
assessment. A good counselor provides advice and information to senior
management on a regular basis.

A Compliance Officer is part sage. A primary role in the
bank for the Compliance Officer is the education of staff on compliance issues.
They should act as the central point of contact within the bank for compliance
questions from management and staff. Having a "go to person" in the bank makes
it that much easier for bank staff. Good communication skills are very
important for a Compliance Officer.

So there you have it - a good Compliance Officer is indeed
part soothsayer, part counselor, and part sage. Acknowledging the importance of
each of those roles makes the job so much more effective - and rewarding.

Business and Social Media

When it comes to using social media, companies
are more concerned with improving their reputation than they are with
increasing sales, new research has found. More than 20 percent of businesses
say they use social media to build their reputation and their brand, compared
with just 11 percent of businesses that use it to increase sales. More