Baker Market Update: 6.04.18

One thing we’ve learned in recent days is that holiday-shortened weeks can be just as fun as the five-day variety. Tuesday morning (a substitute for Monday morning) brought angst and excitement in the form of a 500-point meltdown in stocks matched by a six-week low on the 10yr T-Note yield as it hit 2.78%. That’s what a little Italian constitutional crisis can do for ya. The ugliness in share prices reversed and recouped on Wednesday (Italians calmed down), only to be reconstituted on Thursday as the US tax increase on imports put the rest of the world in a bit of a tizzy. By Friday morning (which feels like Thursday), market watchers were relieved to know that we would finally see a calm day in the form of a simple monthly jobs report.

Read More in the Baker Market Update

S.2155 Signed into Law

Late last week, President Trump signed into law the Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155), the industry’s operative bill for comprehensive regulatory relief for community banks.

“This is a true victory for community banks,” said IBAT President and CEO Chris Williston. “The gains made in S. 2155 lay at the feet of the thousands of community bankers who have told the story of the damaging impact of Dodd-Frank on community bank customers.”

Hundreds of IBAT members engaged in outreach to the Texas Congressional delegation last week in anticipation of the House of Representatives’ action on S. 2155. We are pleased to report that all Republicans in the delegation voted for this bill and were even joined by four Democrats—Reps. Cuellar, Gonzalez, Veasey and Vela.

We now encourage IBAT members to call or send a note of thanks to those who supported this important piece of legislation. If you prefer, feel free to use our Grassroots Action Center to communicate your appreciation to those who voted for S. 2155.

Although some of the finer points of S. 2155 will be subject to regulatory rulemaking yet to come, ICBA has prepared a document entitled “S. 2155 – What it Means for Your Bank,” which is now available for download.


Unfortunately, we all seem to have experienced a drastic increase in phishing emails in recent months with a sharp increase in the past few weeks. If a colleague or business partner has a security incident in which their email account becomes compromised, the perpetrator can hijack that account and send hundreds of emails to anyone in that person’s address book, inbox or sent folder. This means you could get an email from a malicious actor that appears to come from someone you know.

CalTech has issued the following guidance about how to approach these emails as they have become harder to detect:

  • Ask yourself if it could be fake. Were you expecting this email from this person (especially if there is a link or attachment)?
  • Are you asked to take action on something?
  • Call to verify the email you received is legitimate. If you email back, the perpetrator will respond as if they’re your colleague and continue to encourage you to click the link, open the attachment, provide credentials, etc.

Never provide your credentials or personal information on links in an email without verifying the authenticity of the source.

Happy Memorial Day!

Displaying the state and national flags is an important duty in carrying out our mission for the state of Texas. In addition to creating an identity for the people of Texas, the proper display of the flag leads the people in times of joy and mourning, and in times of somber reflection and celebration.

Please take note of the laws concerning the following official state observance:

Memorial Day: On the morning of Monday, May 28, both State of Texas and U.S. flags should be raised briskly to full-staff and then slowly lowered to half-staff until noon.  At noon, both the State of Texas and U.S. flags should be raised briskly to full-staff for the remainder of the day.  Flags should be at full-staff on Tuesday, May 29. 

You are not required to schedule employees for duty on holiday or weekend hours only to comply with flag-flying issues. These requirements only apply to days that your agency normally displays the flag. 

To avoid confusion, flags should be flown according to statutory standards and proper procedures of protocol. I have added a “best practices” attachment below to help you distill the statutory information. 

IBAT will close at noon on Friday, May 25, 2018 and will remain closed thru Monday, May 28 in observance of Memorial Day. We will resume to regular office hours on Tuesday, May 29.

Texas Flag at Half-Staff

The devastating act sustained by the Santa Fe High School community today has deeply touched the core of who we are as caring people. As such, it is fitting that flags should be lowered to half-staff in memory of those who lost their lives.

Therefore, pursuant to Chapter 3100 of the Texas Government Code, I direct the Texas flag be immediately lowered to half-staff statewide on Friday, May 18, 2018, in memory of those who lost their lives. Flags should remain at half-staff through sunset on Tuesday, May 22, 2018. Flags should be returned to full-staff on the following day.

Individuals, businesses, municipalities, counties and other political subdivisions and entities are encouraged to fly their flags at half-staff for the same length of time as a sign of honor and respect.

The First Lady and I extend our prayers of comfort to the survivors and the families of the victims and we will continue to keep them in our thoughts and prayers.


Greg Abbott



ICBA released its list of the 75 top-performing community banks across the country, and several Texas banks secured a spot. The rankings were compiled using FDIC data and taking a three-year (2015-2017) weighted average return-on-assets figure with 2017 carrying the most weight. The winners were segmented into three groups based on asset size. Congratulations to the following:


Less Than $300 Million in Assets

#11 Brazos National Bank (Richmond)

#24 The National Bank of Andrews (Andrews)


$300 Million to $1 Billion in Assets

#5 First Bank (Burkburnett)

#6 Crockett National Bank (San Antonio)

#7 Wallis State Bank (Wallis)

#10 Texas Bank (Brownwood)


More Than $1 Billion in Assets

#8 NexBank SSB (Dallas)

#16 Woodforest National Bank (The Woodlands)

#18 Amarillo National Bank (Amarillo)

CFPB Update

The Consumer Financial Protection Bureau (CFPB) released updates to its Small Entity Compliance Guides on the 2018 TILA-RESPA Integrated Disclosure rule. Issued last month, the final rule removes a provision restricting when creditors may use a closing disclosure to communicate closing cost increases to the consumer, which could prevent creditors from charging for valid cost increases. Read more from the CFPB here.

Registration Open

Registration is now open for IBAT’s annual Texas Financial Literacy Summit, which will be held at TIB in Dallas on July 24-25, 2018. IBAT has once again teamed up with TBA, plus new cosponsor Texas JumpStart Coalition, to teach effective ways to connect banks with students, teachers, parents and vulnerable seniors to make a positive impact on the community.

The summit will include a banker spotlight on award-winning financial literacy programs across the state, breakout sessions on building programs with various age groups, a focus on effectively marketing your financial education outreach, and speakers from the Federal Reserve Bank of Dallas. If your bank wants to be seen as a community leader in the area of financial literacy, this is a must-attend summit!


Baker Market Update: 5.21.18

So, what do you think Jerome Powell hears; “yanni” or “laurel”? More importantly, to whom will he listen; James Bullard or Loretta Mester? The reason that might be important is because Mr. Bullard, President of the St. Louis Fed, and Mrs. Mester, President of the Cleveland Fed, are both on the Federal Open Market Committee and, as such, will both have Chairman Powell’s ear when the FOMC meets next month. The thing is, Jim and Loretta are not on the same page. In fact, their outlooks are so disparate, Mr. Powell might wonder if these two central bankers are even looking at the same economy. 

Read More in the Baker Market Update


The spring of even-numbered years is always marked by seemingly endless opportunities to vote. Hopefully, you are aware the runoff elections for the primaries are scheduled for May 22. Early voting is compressed for runoff elections and is underway through this Friday, May 18. Voter turnout is historically very low for these elections, making your vote that much more important. You may find your polling place through your respective county clerk’s website, and the Texas Secretary of State’s website has an abundance of information regarding this election.

The IBAT FedPAC and IBAT PAC have supported a number of these candidates based upon district polling in open seats, and there are several “friendly incumbents” (designated with an asterisk) in runoffs as well. Here’s a rundown of the candidates supported by our PACs (departing incumbent is in parentheses):

  • Congressional District 2 (Poe) – Kevin Roberts
  • Congressional District 6 (Barton) – Jake Ellzey
  • Congressional District 27 (Farenthold) – Bech Bruun
  • Texas House District 13 (Schubert) – Ben Leman
  • Texas House District 37 (Oliveira*) – Rene Oliveira
  • Texas House District 54 (Cosper*) – Scott Cosper
  • Texas House District 62 (Phillips) – Reggie Smith
  • Texas House District 109 (Giddings) – Carl Sherman
  • Texas House District 121 (Straus) – Steve Allison

IBAT's Magazine

The May/June 2018 issue of IBAT’s magazine, The Texas Independent Banker, is now available online. While the printed version should have arrived in your mailbox last week, you can check out the online edition here. This month’s cover feature takes an in-depth look at customer service and how to ensure you are providing the excellent service you think you are. Other articles include:

As always, we welcome your suggestions for content to be featured in future issues. Please feel free to contact Neil Ferguson with ideas.


Baker Market Update: 5.14.18

Human nature being what it is, humans can sometimes go looking for problems where perhaps none exist. In last week’s Jobs Report from the Bureau of Labor Statistics (BLS) it might have seemed problematic that 6.3 million people were unemployed. This week, the selfsame BLS reported in its Job Openings and Labor Turnover Survey (JOLTS) that employers had 6.55 million openings just waiting to be filled. What’s the problem? Do these people not have cell phones? 

Read More in the Baker Market Update

Cam Fine

Congratulations to Cam Fine for concluding his 15-year career leading the Independent Community Bankers of America (ICBA) last week. In an American Banker podcast, Fine addressed past, current and future issues of importance for community bankers, including:

  • The passage of S. 2155;
  • Technology, fintech companies and Amazon Bank;
  • De novo activity; and
  • Washington, D.C. in its current broken state.

Though Fine believes the non-traditional banking model will be the surviving model, he feels optimistic that “community banks will not only endure, but also survive.” Listen to the full podcast here.

IBAT looks forward to working with ICBA’s new president, Rebeca Romero Rainey, in the months and years to come.


The Office of the Comptroller of the Currency (OCC) announced last week it has adopted a final rule that increased the commercial real estate appraisal threshold to $500,000. Transactions valued at or below this amount:

  • Are not subject to Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and interagency appraisal rules;
  • Can be prepared by trained community bank staff; and
  • Do not require a licensed appraiser.

IBAT has prepared an appraisals toolkit that provides guidance in developing effective, consistent procedures for your appraisal program. Along with the guidance resource, this product also includes engagement letters, evaluation/extrapolation forms and review worksheets that are developed in commonly used formats that allow for easy edits, modifications and revisions to meet your bank’s needs. Click here to learn more or purchase the product.

Mark Your Calendar

Save the date for the IBAT Compliance Conference, specifically designed for today’s community bank officer. Join us August 1-3 in San Antonio for this in-depth program that will teach attendees skills and provide the information necessary to survive and thrive in a post-Dodd-Frank world.

The conference is designed so that compliance and operations officers can select the specific topics they need to advance their knowledge. Register today and select one-day, two-day or three-day registration based on individual needs in the areas of lending, operations and common issues.

Baker Market Update: 5.07.18

Figures don’t lie, we’ve all been told, and this morning’s figures from the Bureau of Labor Statistics (BLS) tell us that the nation’s Unemployment Rate fell by two-tenths last month to 3.9%. In technical terms, that’s pretty low. One might think that a flood of new jobs must have been created in order to bring the rate down that much in just one month. And besides, there wasn’t supposed to be that much slack left in the labor markets anyway. Right? Well, here’s where the magic of statistics kicks in. The rise of just 164k in Non-Farm Payrolls would not have been enough to move the needle were it not for the exodus of 236k from the civilian labor force. So, go figure that.

Read More in the Baker Market Update

2018 Hall of Fame

Five community bankers were inducted last week into the 2018 Texas Bankers Hall of Fame at Sam Houston State University (SHSU) in Huntsville. The following individuals were recognized for their significant contributions to the banking industry:

  • David S. Barnard, The National Bank of Gatesville, Gatesville
  • H. Gary Blankenship, Greater Southwest Bancshares, Inc. and Bank of the West, Grapevine
  • David R. Brooks, Independent Bank Group, McKinney
  • The late Walter G. Hall, Citizens State Bank, Alvin State Bank, League City State Bank, Webster State Bank and Bay City Bank & Trust, League City
  • Jill Sharp Vaughan, numerous banks/currently at Zions Bancorporation, Montgomery

Blankenship and Brooks have held many IBAT leadership positions throughout their long community banking careers. Additionally, Blankenship is a recipient of the prestigious IBAT Chairman’s Award. The late Walter Hall was a founding director of IBAT in 1974.

The Texas Bankers Hall of Fame was established by the Smith-Hutson Endowed Chair of Banking at SHSU to honor bankers who have served their industry, community and state. The honorees were inducted at the Sixth Annual Texas Bankers Hall of Fame Gala at SHSU on April 26, 2018. Congratulations to these distinguished bankers, and thank you for the vital role you play in the Texas community banking industry.

'Bank of the Future'

It seems that talk about fintechs is becoming nearly as popular as talk about compliance these days. With different generations fighting for what’s important to them and banks fighting to stay current in an increasingly digital age, it’s time for a compromise.

IBAT’s new associate member, One Touch, has released a white paper entitled ‘Bank of the Future,’ which points out not only what’s important for customers, but also what makes sense for banks. The paper states, “The next logical step is to now offer this to customers and prospects through mobile video banking.”

Below are important points worth mentioning:

  • By 2022, the average number of branch visits per year will be three;
  • 80% of financial institutions plan to launch video banking at some point;
  • 93% of banks believe video chat will improve customer satisfaction; and
  • 70% believe it will reduce handle time vs. regular chat.

To learn more about how financial institutions can benefit from convenient, engaging and low-cost video chat banking, click here.

Legislative Update

A variety of press reports have indicated that Chairman Jeb Hensarling appears willing to move S. 2155, a bill focused on community bank regulatory burden relief, separate from a package of bipartisan bills that he hopes to move forward. In a speech before the U.S. Chamber of Commerce late last week, the Chairman said he is open to passing this important legislation without changes so long as “other pathways” to advancing several bills passed on a bipartisan basis in the House exist. Further, the Trump administration has indicated that the President will sign the bill and is hopeful to do so before Memorial Day.

“We are obviously delighted with this news,” said IBAT President and CEO Chris Williston. “IBAT’s position on this issue has not changed and has been communicated clearly throughout the process. Our strong preference—shared by virtually all major banking and credit union trade groups, which is a rarity—is to get this important bill, without amendment, through the House of Representatives as soon as possible. We have also encouraged the Senate to take up and consider a package of bills that has passed the House on a bipartisan basis. S. 2155 is a fragile compromise and contains much of what we have been working on and hoping for throughout the past eight years. We are optimistic the House and Senate can come to a ‘win-win’ agreement to get this bill through the process.”

IBAT encourages continued communication with your respective members of Congress to express your strong support for S. 2155.

2018 Bank Operations Institue

Registration is now open for the 2018 Bank Operations Institute (BOI). This two-year banking school will take you on a week-long journey—October 7-12, 2018 in Dallas—that provides practical bank management and leadership strategies necessary for successful community bank operations.

The community banking focused curriculum offers strategic insight into banking technology, best practices, administrative processes and project management with an emphasis on practical, real-world banking issues. Hosted at the renowned Southwestern Graduate School of Banking at Southern Methodist University, BOI teaches students the skills required for effective and profitable bank operational management.

Baker Market Update: 4.30.18

The doctrine of relativism and the belief that there are no absolute truths seldom make their way into economic discussions, but maybe they should. Absolutely. Otherwise, we might not be able to feel good about this morning’s report that GDP grew at 2.3% in the first quarter and, of course, we want to feel good. We can do that by pointing to the pre-release estimate of just 2%, and relative to that, 2.3% looks pretty good. But, after all the tax-cut hubbub and consumer confidence that’s downright cocky, the Q1 results may be in need of a little absolution.

Read More in the Baker Market Update


Designed to recognize the best employers in the state, ‘The 100 Best Companies to Work for in Texas’ was conducted by Best Companies Group in partnership with the Texas Association of Business (TAB) and Texas Society for Human Resource Management. This program recognizes companies in the state that make it a priority to create a culture where employees love to come to work. Participation was open to companies with 15 or more employees. TAB will host an awards banquet in Austin next month to honor companies that made the list.

Congratulations to the following IBAT members that made the list:

  • Vista Bank (#12, medium company category, 100-499 employees)
  • Texas Bank and Trust (#23, medium company category)
  • Citizens National Bank (#27, medium company category)
  • Texan Bank (#11, small company category, 15-99 employees)
  • CalTech (#20, small company category)
  • SouthWest Bank (#23, small company category)

Cyber News

It probably doesn’t come as a surprise that last week U.S. and U.K. officials issued a joint technical alert warning of malicious cyber activity carried out by the Russian government. According to the Department of Homeland Security (DHS), FBI and U.K. National Cyber Security Centre, state-sponsored cyber actors are using compromised routers to conduct spoofing activity to support espionage, extract intellectual property and prepare for future attacks.

The joint alert offers mitigation strategies and encourages recipients who find signs of malicious cyber activity to alert DHS’s National Cybersecurity and Communications Integration Center.