MAKING THINGS HAPPEN Hello Challenge, Meet Insight

ISSUE 4 2017

OFFICIAL PUBLICATION OF THE UTAH BANKERS ASSOCIATION

MAKING THINGS HAPPEN Hello challenge, meet insight.

Whatever your challenge is, and wherever it is, you’ll find PwC providing insight, perspective and solutions. PwC assists financial institutions like yours, throughout the state of Utah and globally, with their most challenging issues, from regulatory reform, stringent capital requirements, and risk management, to disruptive technologies and others. For more information, contact: Ryan Dent, Utah Banking and Capital Markets Partner, at [email protected] / (801) 534 3883 or visit www.pwc.com/banking.

© 2017 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

276036-2017-Utah Banker FY2017 Ad.indd 1 12/20/2016 10:00:24 AM UBA Board of Directors 2017/2018 CHAIRMAN Ron Ostler Chairman Comenity Capital Bank Salt Lake City

VICE CHAIRMAN Doug DeFries President & CEO Bank of Utah Ogden

2ND VICE CHAIRMAN Kay Hall 8 13 Executive Vice President and CFO Zions Bank

IMMEDIATE PAST CHAIRMAN Craig White President & CEO Utah Independent Bank Beaver

COMMUNITY BANK ADVISORY CHAIR Rick Beard President & CEO People’s Utah Bancorp American Fork

REGIONAL BANK ADVISORY CHAIR Mark Herman Market President U.S. Bank Salt Lake City

INDUSTRIAL BANK ADVISORY CHAIR Kristin Dittmer Chief Financial Officer 4 The Donovan Mitchell Approach 17 2017 Bank Executive Conference EnerBank USA Salt Lake City By Howard Headlee, President Emerging Bank Leaders Jan Bergeson 18 CRA Officer/Utah Market Leader 6 Making Things Happen Conference Ally Bank Midvale By Rob Nichols, President and CEO, American Bankers Association Compliance Corner: Do We Finally Rob Carpenter 20 Executive Director Have a Better TRID? Region Manager If You’re Worried About JPMorgan Chase 8 By Sarah Sauceda, Associate General Counsel Salt Lake City Cybersecurity. Call an Attorney George Daines By Tomu Johnson and Tammy Georgelas 22 UBA Commercial Lending President & CEO Cache Valley Bank Development Program Logan 10 Best Practices for Enhancing the Ray Dardano Debit Chip-Card Experience President & CEO 23 Deeds In Lieu Of Foreclosure: Marlin Business Bank Salt Lake City Advantages Considerations For Are Your IRR Assumptions Going Secured Lenders Gary Harding 12 President & CEO up in Smoke? By Todd M. Labrum, Snell & Wilmer Prime Alliance Bank Woods Cross A primary concern for the lender is its ease Stand Pat or Pay Up and ability to enforce remedies against the Kent Landvatter 13 real property collateral in the event that the CEO FinWise Bank Quarterly Bank Executive Outlook loan becomes troubled. Sandy 15 Survey Highlights Carla Nguyen District Manager By Glenn Martin, Regional Director, Bank Kudos U.S. Bank 24 Promontory Interfinancial Network Salt Lake City The U.S. unemployment rate dropped to Curt Queyrouze a sixteen-year low of 4.3 percent in July Bankers on the Move President & CEO 27 TAB Bank (although it has ticked slightly back up to a Ogden still impressive 4.4 percent). Erich Sontag UBA Associate Members Senior Vice President UBA Education Committee 29 Bank Of American Fork 16 Salt Lake City Volunteers At Fisher House

Frank Stepan Managing Director Morgan Stanley Bank, N.A. Salt Lake City

Kirk Weiler President & CEO WEX Bank Midvale

The Utah Bankers Association represents fifty regional, community and industrial banks throughout Utah and is the voice for Utah’s banking industry and its employees.

©2017 Utah Bankers Association | The newsLINK Group, LLC. All rights reserved. Utah Banker is published quarterly each year by The newsLINK Group, LLC for the Utah Bankers Association and is the official publication for this association. The information contained in this publication is intended to provide general information for review and consideration. The contents do not constitute legal advice and such not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your specific circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of the Utah Bankers Association, its board of directors, or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. Utah Banker is a collective work and as such some articles are submitted by authors that are independent of the Utah Bankers Association. While the Utah Bankers Association encourages a first print policy, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior permission. For further information, please contact the publisher at: 855.747.4003. Issue 4. 2017 3 The Bottom Line By Howard Headlee, President, Utah Bankers Association

The Donovan Mitchell Approach

love watching Donovan Mitchell play sweeping and others are more subtle. insatiable appetite for retaining profits basketball. I think it’s because I love Some changes are anticipated, and many and growth. I seeing people do things that no one will be unintended. There will be those thought possible. It gives me hope who will analyze and predict the future Most people are stunned to find out that that things can turn out better than impact of tax reform based on histori- the largest credit union in Utah, Ameri- we ever expected. cal assumptions founded on what has ca First, has retained over $500 million been experienced in the past. This can in profits over the last five years. Any Most people base their expectations for be thoughtful and in some ways help- other business would have contributed the future on assumptions they have ful, but those that limit their decisions more than $100 million in taxes, with developed from historical performance. to these historical boundaries will be over $25 million going directly into But every once in a while someone quickly left behind. Utah’s Uniform School Fund. At some comes along whose performance changes point, when this profit taking behavior all the underlying assumptions. Things I am particularly interested to see the spreads throughout more and more once thought to be impossible become impact of a somewhat more level playing states, there will be enough votes in possible, changing the trajectory of fu- field in the financial services industry. Congress to put an end to this corporate ture expectations. For far too long, a handful of fake credit loophole once and for all. unions have been operating like banks This holds true in every aspect of life, and with all the benefits of the tax exemption In the meantime, bankers will take it’s the reason we should all be far more provided to real credit unions. Instead the Donovan Mitchell approach and hopeful and optimistic about the future of passing the benefits of the exemption find ways to compete that no one ever than we often are! There are lessons here on to their members, they have charged thought possible. The future industry for each one of us, in any field of work, rates just below the taxable banks and re- leaders will optimize any improve- industry or profession. The future is tained the excess profits to fuel massive ments in taxes or regulation and shaped by those who reject the limitations promotions and growth. change the trajectory of future expec- of historical assumptions and boldly ex- tations. And I will be rooting for them pand the boundaries of what’s possible. When banks begin to enjoy lower tax because every time a customer leaves a rates and pass those savings on through bank and moves their business to one History tells us that broad based tax lower prices, these fake credit unions of these fake credit unions, the tax base reform, always results in significant will have to begin to pass more of their for our schools is eroded and that’s the change. Some changes are embraced tax advantage on to their members. last thing our teachers and Utah taxpay- as positive, some as negative. Some are This will curb what has become an ers can afford. n

4 www.uba.org Because no two clients are ever the same.TM

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BRIAN CUNNINGHAM | 801.257.1954 | [email protected] GATEWAY TOWER WEST | 15 WEST SOUTH TEMPLE | SUITE 1200 | SALT LAKE CITY, UT 84101 DENVER | LAS VEGAS | LOS ANGELES | LOS CABOS | ORANGE COUNTY | PHOENIX | RENO | SALT LAKE CITY | TUCSON Issue 4. 2017 5 WASHINGTON UPDATE And of course, bankers’ engagement on the CFPB’s arbitration rulemaking not only helped shape ABA’s policy position on the issue, it ultimately helped persuade Congress to overturn the rule, securing a critical win for bank customers who would have lost access to a resolution option that was faster, more economical and more beneficial to con- sumers than class action litigation.

The truth is, we rely on bankers to inform and guide everything we do, from our comment letters on regulatory proposals and advocacy communica- tions, to conference content and online Making Things Happen training. That is the only way associa- By Rob Nichols, President and CEO, American Bankers Association tions can succeed.

So my appeal to you is this: Help us ou’ve heard the saying that there are that showcases how bankers lead their help you. We are fortunate to have three kinds of people in the world: communities in difficult times. many engaged bankers, but we need Y people who make things happen, more. We especially want to make people who watch things happen and We’ve been promoting this video widely sure tomorrow’s bank leaders are people who wonder what happened. In and encouraging bankers to do the same engaging today. my experience, the women and men who because it tells such an important and lead America’s banks fall decidedly into positive story about our industry. I’m ABA Chairman Ken Burgess told the the first camp. grateful to Bob Jones (United Bank, crowd at our annual convention that he Atmore, Ala.), who serves on the ABA learned the importance of actively par- It could be because you lead the in- Foundation board and also chairs the ticipating in association and industry stitutions that serve as the engine of Fund for Economic Growth, for sug- affairs early on from his dad, who was America’s economy — and together, gesting this. involved with both the Texas Bankers you comprise one of the most important Association and Independent Bankers industries in our nation. It could also be Bankers serving on ABA’s Community Association of Texas, as well as ABA. because most of the bankers I meet and Bankers Council, along with senior It’s a legacy he is passing on to his staff, talk to in my travels are deeply engaged loan officers and others at member and I hope our other banker volunteers in industry affairs. They are at their state banks, made a big difference when they will do the same. association’s convention, serving on its provided us essential feedback during board or on one of ABA’s many councils, the Consumer Financial Protection Odds are that whatever position you working groups or committees. They are Bureau’s rulemaking on small-dollar hold in your bank, you possess expertise tending not only to what their employees, loans. Their comments, which we that your state association and ABA customers and communities need, but relayed in letters and meetings with are eager to tap. Look for opportunities also to what the industry, economy and bureau officials, resulted in a critically to join a working group or serve on country need to thrive. important exemption for banks from a committee (see some opportunities the CFPB’s final rule requiring short- at aba.com/Committees). Respond to This extra service makes a big difference. term, small-dollar loans to meet an surveys asking your views on an issue When bankers engage in their associ- ability-to-repay test. or business practice. Tell us what your ation’s affairs or in advocacy, a host of bank needs help with to succeed. good things happen. Some examples: Banker involvement was also the key to scoring improvements last year to Guide us, use us. That’s why we are It was a member of ABA’s “official fami- the Call Report for smaller banks. We here. And it’s how, together, we make ly,” for instance, who suggested ABA fly are seeking to replicate that success good things happen.n down to Houston and Naples following as the agencies undertake a review Hurricanes Harvey and Irma and capture of their safety and soundness exams. on video — for all to see — how banks That’s why ABA invited regulators to listen in on two banker conference and bank employees were responding E-mail Rob Nichols at to the local disasters. The result of that calls we hosted on the topic — so that [email protected]. suggestion is a video — which you can regulators could hear bankers’ per- view at aba.com/HurricaneResponse — spectives early on in their review process.

6 www.uba.org INFORMATION = POWER Get in shape for your next exam!

Request a free Custom Exam Preparation Report Utah Bankers Association and get prepared for your next exam. a proud member of This report is driven by thousands of bankers who have anonymously taken our survey. No more exam surprises! Request your Custom Exam Preparation Report at www.allbankers.org If You’re Worried About Cybersecurity, Call an Attorney

By Tomu Johnson and Tammy Georgelas, Parsons Behle & Latimer

ach year brings a data breach that affects more and more By engaging legal counsel, companies can understand their people; each breach also brings larger fines for companies legal obligations in the cybersecurity arena and draft poli- E who failed to protect information. In an effort to evade cies addressing identified risks. regulatory fines and consumer wrath, companies have tried to address cybersecurity risks with varying results. Mean- Cybersecurity legal obligations flow from corporate while, the $120 billion cybersecurity industry—eager to sow leadership’s fiduciary duty of care; state, national, and fear, uncertainty, and doubt—pushes an array of products to international law; and contractual obligations. address cybersecurity risks both real and imagined. Instead of purchasing gizmos, executive leadership should rely on Executives and board members owe a fiduciary duty of care legal counsel to help define their legal risks and draft poli- to the companies they serve. Failing to carry out those cies and procedures minimizing identified risks. duties can impose personal—and potentially uninsurable— lawsuits against executives and board members. Under the At first glance, it may seem odd to solve cybersecurity prob- duty of care, executives and board members must act on an lems with lawyers, but regulators don’t care if a company informed basis, in good faith, and in the honest belief that spends thousands of dollars on cutting-edge cybersecurity their actions are in their company’s best interests. This technology. Regulators analyze whether the circumstances means executives and board members must act reason- leading to a data breach violate state, national, or interna- ably when they assess information so they can protect the tional law. Accordingly, companies should understand their interests of shareholders. The duty of care also requires legal obligations to minimize their cybersecurity risks. executives and board members to address reasonable risks to

8 www.uba.org Instead of buying gadgets to solve obscure cybersecurity problems, companies should engage legal counsel who can define the legal problem and draft policies and procedures to minimize risks.

a company. In other words, executives basis to process consumer information; security issues raised during these and board members cannot reduce and impose steep fines for failing to meetings. If executives and board their cybersecurity liability by ignor- comply. For example, in 2018, the Eu- members fail to hold these meetings, ing the problem. ropean Union can fine companies the they may breach their fiduciary obli- greater of €20,000,000 or 4 percent of gations to the company. State, national, and international international revenues. laws increasingly regulate how com- Policies must set the company’s security panies process information. On the Another source of legal risk comes framework for physical and techno- state level, 48 states have data breach from contractual obligations. It’s a logical security. There are numerous notification laws. Most of those laws common business practice to draft security frameworks to choose from but simply explain how to notify individ- service agreements insisting business the most common are ISO’s 27001 stan- uals affected by a data breach. Some partners comply with specific privacy dard, NIST Cybersecurity Framework, states go further. Utah, for example, and security laws. In the healthcare and the Center for Internet Security’s requires “any person who conducts industry, health entities commonly 20 Critical Controls. Of these stan- business in the state . . . [to] implement require business partners to sign a dards, the Center for Internet Security’s and maintain reasonable procedures Business Associate Agreement, which 20 Critical Controls are the most to: prevent unlawful use or disclosure creates an obligation to comply with approachable. They’re free, available of personal information . . . ” In other federal privacy and security laws. online, and provide a reasonable level of words, operating without appropriate protection without breaking the budget. policies and procedures runs the risk of Once executives and board members violating the law. understand their privacy and security Finally, policies should flesh out an obligations, their legal counsel should incident response process. Without In the federal regulatory environment, draft appropriate policies and pro- it, companies can waste thousands of organizations who work in industries cedures. At minimum, the policies dollars without properly addressing in- such as health care, banking, insur- should explain how the company gov- cidents. The incident response process ance, finance, and telecommunications erns over privacy and security matters, should designate an incident response face a plethora of cybersecurity obli- the physical and technological security coordinator who fills out an incident re- gations. For example, in the health measures to prevent data breaches, and port, reports the incident to executives, care environment, federal law requires the incident response process. and works with various departments health care entities to implement to resolve the incident. Critically, specific privacy and security policies. With regard to governance, a designat- the process should incorporate legal Failing to do so can incur millions in ed executive should provide regular counsel so counsel can protect matters fines, consumer anger, and months of reports to the board about security as- discussed during the incident with the audits with disruptive regulators. sessment results, progress on addressing attorney-client privilege. security matters, audits of the security Internationally, most countries enforce system, privacy and security awareness No company wants to lose their custom- strict privacy and security laws. Where campaigns, and data breach incidents. ers’ information. No company wants to the United States regulates privacy by Executives and board members should pay a fine or lose business because of a sector, most countries outside the Unit- have an opportunity to review these data breach. Instead of buying gadgets ed States regulate privacy and security items, recommend solutions, and to solve obscure cybersecurity prob- comprehensively. Accordingly, most communicate regular privacy directives lems, companies should engage legal countries: illegalize the international to employees. In line with the duty of counsel who can define the legal prob- transfer of information without follow- care, executives and board members lem and draft policies and procedures to ing certain processes; require a legal must reasonably address privacy and minimize risks. n

Issue 4. 2017 9 Best Practices for Enhancing the Debit Chip-Card Experience Complexity of U.S. Rollout has Created Inconsistencies at the Point of Sale

By Bryan Manka, Senior Product Manager, Emerging Technologies, PULSE Network

n October 2015, a fraud liability shift was introduced to the party that has not adopted EMV chip technology. This I shift prompted a transition to chip-enabled credit and debit cards and POS terminals. As of January 2017, an estimated 90 percent of U.S. debit cards were chip-based, according to the 2017 Debit Issuer Study, commissioned by PULSE and conducted by Oliver Wyman.

While many major merchants were early adopters of the technology, smaller retailers have been slower to make the transition. The gradual transition to chip-based transactions, combined with the requirements of Regulation II implementing the Durbin Amendment and changes in cardholder verification method (CVM), have created a chip card acceptance landscape • Card Network Combinations – U.S. debit cards have in the U.S. that varies widely from card to card, and from mer- one of three primary card brands and at least one un- chant to merchant. affiliated debit network (but often two or three). This means cards can have dozens of possible combinations of In many instances, debit transactions are approved as consum- enabled networks. ers would normally expect. In other cases, cardholders may be asked to sign in a merchant environment where they would • Enablement Order – Because most banks enabled their normally use their PIN, eliminating the option to receive cash credit cards with chips before their debit cards, merchants back. In rare instances, the transaction may fail and the con- made a similar choice, enabling their terminals first for sumer will have to use another payment option. They also may chip-based credit transactions. This means they enabled be asked to choose between a global network brand and “U.S. the global AIDs before U.S. Common Debit AIDs, and debit” when completing chip-card transactions. signature authorization before PIN authorization, in many cases. Many chip-accepting merchants still have not To understand what banks can do to help their customers cope enabled the common AIDs. Depending on where each with this disparity of experiences, it’s important to first under- merchant is in the implementation process, the result is a stand the factors that contribute to it. wide variety of cardholder experiences.

Layers of Complexity • CVM Options – Many debit networks now support PIN- There are several layers of complexity involved in the U.S. tran- less POS transactions – and in the case of PULSE, even sition to chip cards: signature transactions. This blurs the lines between PIN and signature debit and has added another layer of uncer- • Regulation II – Among other things, this regulation requires tainty to the cardholder experience with chip cards. financial institutions to enable at least two unaffiliated networks on each debit card and enables merchants to determine • Terminal Configurations – Merchants and their acquir- routing priority among the enabled networks. U.S. chip debit ers make a number of choices when configuring payment cards must have at least two application identifiers (AIDs) terminals. These include preferences for AID selection to be compliant, and to facilitate merchant routing choice: a and PIN, signature or PINless verification preference. global AID from the payment brand on the card (Discover, Mastercard or Visa) and a U.S. Common Debit AID. The com- • Network Routing Choice – Acquirers make routing mon AID enables routing to any of the supported brands on decisions based on the transaction information cap- the card, including unaffiliated debit networks. tured by the terminal.

10 www.uba.org Suggested Best Practices for Issuers To assist your cardholders in navigating this complex environ- 5. Help your customers understand that their experience at ment, we suggest the following best practices: the terminal may vary between PIN, PINless and signature verification. Similarly, they may be asked to verify mobile 1. If you haven’t already done so, enable a common AID on all payments with their fingerprint or with their fingerprint and of your debit cards as soon as possible. If you issue PIN-only PIN. Let them know that this variation may persist for the cards that are not enabled on one of the primary debit net- foreseeable future.n works, license a shared AID from the Debit Network Alliance for those cards. For more information on U.S. Common Debit AIDs, visit debitnetworkalliance.com or uspaymentsforum.org. 2. Encourage merchants that have retail accounts at your bank to support a U.S. Common Debit AID to help maximize their routing choices, reduce costs and improve the cardholder experience.

3. Educate your cardholders about the different verification methods they are likely to encounter in different merchant environments. Let them know that some fast-food restau- rants and grocery stores often opt to use PINless debit for lower-value transactions.

4. Inform cardholders that they may encounter terminals that ask the consumer to choose the AID by asking them to se- lect either “U.S. Debit” or a branded network. Suggesting the U.S. Debit option will maximize the routing options and reduce your costs.

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Issue 4. 2017 11 Are Your IRR Assumptions Going up in Smoke? By Lester Murray, The Baker Group fter the mortar sets on that new fire- development needs to be institution specific place flue, the only way to know if it’s and empirically justifiable. Some may A really going to work is to build a fire have noticed that most of their attention and see where the smoke goes. Some might has been directed toward the behavior not immediately discern how that relates to of non-maturing deposits (NMD). Or interest rate risk, but the comparison helps rather, the behavior of the owners of all illustrate some similar circumstances. All the those non-maturing deposits. Particularly assumptions about how those rate-sensitive those assumptions governing their pricing elements on the balance sheet will react to behavior. One can understand the concern higher interest rates never get tested until the since it’s not uncommon for NMD balances fire gets going; until rates actually rise. to represent more than half of total assets. Because of their prominent position on A False Sense of Security? community bank balance sheets, even small Since the first rate hike in almost ten years variations in behavior can translate into was implemented by the Federal Open sizeable “misses” when comparing project- Market Committee at the end of 2015, a ed results to actual outcomes. Regulators handful of increases to the Fed Funds Target understand this and have quite reasonably Rate have followed and it’s possible, even encouraged the sensitivity testing, or stress- probable, there will be more. So, now that ing, of NMD related assumptions. the Zero Interest Rate Policy of the Fed is a couple of years behind us, it may be a good Receiving less attention are some of the time to take a look and make sure the smoke pricing assumptions governing the behavior is actually moving up the chimney. Or, in of interest-earning assets, like investments the context of interest rate risk, has the actual and loans. The preponderance of commu- behavior of the balance sheet played out as nity banks’ modelling exercises assumes your assumptions predicted? asset pricing betas of at least 80 percent and often 100 percent. Additionally, the timing Many risk managers probably feel like they lag between the change in market rates and already have an answer to that question. the manifestation of that change on banks’ Perhaps they do, but maybe they don’t. lending rates is often very short or non-exis- These are the risk managers that point to tent. It might be instructive, now that several the “spot-on” results of their last several increases in the prime rate have occurred, years of backtesting. After all, the purpose to compare the current schedule of lending of backtesting is to compare projected results rates at your bank to the rates that were in to actual results, and if one’s assumptions place before the Fed began its rate normal- are materially “off,” those backtesting results ization process. As critical as NMD pricing won’t be so “spot-on” will they? But, what assumptions are to the accurate projection of if there’s nothing to actually backtest? Since interest expense, the validity and reasonable- the Fed Funds rate became zero-bound in ness of asset pricing assumptions are just as December of 2008, never have rates been crucial to the accurate projection of interest so low for so long. Add to that the historic income. If your current lending rates are little lack of volatility, and we end up backtesting changed from their pre-normalization levels, Ground Hog’s Day: the same thing over and it might be time for the ALCO to re-eval- over. While certainly not without value, it’s uate some of those assumptions before probably safe to say that the interest rate en- you start smelling smoke. n vironment since 2009 has not really put those assumptions to the test. Lester Murray joined The Baker Group in 1986 and is an Associate Partner within the firm’s Financial Strategies Group. He helps community financial Check Those Smoke Detectors institutions develop and implement investment This is a concern that isn’t new. Since the and interest rate risk management strategies. Before joining The Baker Group, he worked at two FFIEC Interagency Advisory on Interest broker/dealer banks in Oklahoma City and was Rate Risk was published in 2010, regula- also an assistant national bank examiner. A graduate of Oklahoma State University, he holds Bach- tory agencies of all stripes have reminded elor of Science degrees in finance and economics. everyone, time and again, that assumptions Contact: 800-937-2257, [email protected].

12 www.uba.org Stand Pat or Pay Up By Brandon Casey, Federal Home Loan Bank of Des Moines

fter several Fed hikes having already taken place, retail The factors to consider in this analysis consist of the following: deposit cost increases has thus far been marginal. However, current deposit rate, promotional rate and the cost of replacement A with multiple additional hikes being projected to take place funding. Some would assume that if the promotional rate by the end of 2018, that could soon change. Each hike increases offered is lower than the replacement funding rate, then the likelihood that your competitor down the street may raise rates increasing deposit rates is the best option. The marginal cost to get new deposits in the door. If and when this happens, will approach shows that isn’t always the case. Let’s assume that you follow suit? After all, even retail deposits at an increased rate we raise rates in order to retain the maturing deposits. Table provide you with cheaper funding versus the wholesale market. 2 shows the marginal cost of the “pay-up” strategy.

Is it really that simple though? Are you better off raising your rates to compete with the special offer of your competition? If the promotional retail rate is significantly cheaper than the wholesale alternative, the eye test certainly tells you so. However, using marginal cost analysis can tell a very different story, as basic math can show the hidden cost of raising retail deposit rates can Deposit Type Amount Rate Cost be quite steep. Non-Rate 5,500,000 0.40% 22,000 Sensitive Let’s consider the scenario where competitors are increasing Rate Sensitive 4,500,000 0.40% 18,000 rates on one-year CDs and you need to evaluate whether or not to Total 10,000,000 0.40% 40,000 respond in lockstep. In this type of analysis, you need to estimate the percentage of your institution’s maturing one-year time deposit accounts that will move to the competition unless you match the Table 1. Rate-Sensitive and Non-Rate Sensitive Portions of competition’s rate. This percentage is defined as the rate sensitive Maturing One-Year CD Accounts portion of that segment of the deposit base. Table 1 shows the rate sensitive and non-rate sensitive portions of the maturing one-year CD accounts for our hypothetical institution. Here we assume that 45 percent of the account holders are rate sensitive.

Deposit Type Amount Rate New Rate Rate Increase Marginal Cost Non-Rate Sensitive 5,500,000 0.40% 1.25% 0.85% 46,750 Rate Sensitive 4,500,000 0.40% 1.25% 0.85% 38,250 Total 10,000,000 85,000 Marginal Cost 1.89%

Table 2. Marginal Cost of Increasing Rates to Retain Deposits

Issue 4. 2017 13 In this example, it is easily determined that paying up for $4.5 million. Alternatively, let’s assume that we hold results in an additional cost of $85,000. However, the our ground, stand pat, and let the “hot” money go. Table marginal cost of increasing rates in this case is really 1.89 3 shows the marginal cost of holding rates constant and percent because you are paying an additional $85,000 just replacing the runoff with a one-year Bank advance at a rate to retain the rate sensitive deposits which only account of 1.91 percent.

Deposit Type Amount Rate Rate Increase Marginal Cost Non-Rate Sensitive 5,500,000 0.40% 0.00% - 1-Year FHLB Advance 4,500,000 1.91% 1.51% 67,950 Total 10,000,000 67,950 Marginal Cost 1.51%

Table 3. Marginal Cost of Holding Rates Constant and Replacing Runoff with a Bank Advance

Here we can see that, given the assumed parameters, a substantial savings can be realized by allowing the rate sensitive deposits to runoff and replacing them with on-demand funding from the Federal Home Loan Bank of Des Moines. Even though the advance rate is 1.91 percent, the marginal cost of replacing the deposits is only 1.51 percent. The reason being, since there is no increase to non-rate sensitive deposits, the marginal cost is only the difference between the cost of replacement funding and the rate sensitive deposits that went elsewhere.

When making the determination to stand pat or pay up, the marginal cost of the strategy used in accomplishing your objectives should be considered. As we have seen, when the hidden and not-so-hidden marginal costs are considered, tapping your bank’s reliable wholesale funding may be the cheapest alternative. If you have any questions or would like to discuss the concept of marginal cost, please contact any of the following:

Brandon Casey 206.340.235 Eric Jensen 206.434.0581 Brett Manning 206.340.2472 Brandon Casey Federal Home Loan Bank of Des Moines n

14 www.uba.org Quarterly Bank Executive Outlook Survey Highlights Q2 2017 | Promontory Interfinancial Network

By Glenn Martin, Regional Director, Promontory Interfinancial Network

he country has received some solid economic news over Executive Business Outlook Survey, we asked bank presi- the last several months. The U.S. unemployment rate dents, CEOs, and CFOs which of following posed the great- T dropped to a sixteen-year low of 4.3 percent in July est potential threat to the economy if Congress fails to act: (although it has ticked slightly back up to a still impressive • Corporate Tax Reform 4.4 percent), the Dow Jones Industrial Average crossed the • Regulatory Reform 22,000 mark, and U.S. gross domestic product increased 2.6 percent in the second quarter, meeting expectations. • Debt Ceiling • Budget Legislation (Keep the Government Open) But the question of whether the current expansion will grow and deepen or instead switch direction may depend on Not surprisingly, enactment of regulatory reform/relief legis- whether a number of important policy issues are resolved in lation was near the top of the list for many bankers. Several Washington this year. respondents also cited the debt ceiling and a federal budget as important for the long-term health of the economy. But the We believe banks have some unique insights when it comes number one choice for a sizeable majority of bank executives to the nation’s economic health. In our most recent Bank was the passage of corporate tax reform.

Some 39 percent of survey respondents identified corporate opportunity to appoint the chairs of the Federal Reserve and tax reform as the top economic issue for Congress vs. 25 per- Federal Deposit Insurance Corporation to go along with his cent for regulatory reform, 19 percent for the debt ceiling, and nominee to head the Office of the Comptroller of the Curren- 17 percent for budget legislation. cy—Joseph Otting. Yet survey respondents were predomi- nantly neutral or only slightly optimistic that the President’s Small community banks (less than $1 billion in assets) and new agency leadership would improve the regulatory environ- larger community banks ($1 to $10 billion in assets) were ment for lending. almost identical in their choices, 39 percent and 37 percent respectively. Interestingly, while regulatory reform remained If you would like to see the complete survey please visit the second choice of small community banks, it dropped to our survey site. If you have any questions about the survey, third position among larger community banks. please email [email protected]. n

Regionally, corporate tax reform was the top choice in the Midwest, Northeast, and South, but regulatory reform was Glenn Martin: Over twenty years of sales experience in the banking industry. Currently a Regional Director for a seven state territory. Manages approximate- first choice among bank respondents in the West. ly 150 banking relationships. Responsible for consulting with banks of all sizes on funding, liquidity management, profitability and customer acquisition. Prior Speaking of regulatory reform, we also asked bank respon- to joining Promontory in May of 2006, held sales and relationship management positions for 16 years in the trust and wealth management business. Received dents about leadership changes at the top banking regulatory a bachelor’s degree from the University of Kansas in 1989. Currently lives in agencies. Over the next year, President Trump will have the Castle Rock, Colorado with his wife and three children.

Issue 4. 2017 15 UBA Education Committee Volunteers at Fisher House

n the spirit of the holiday season, for the fifth straight year members of the UBA Education Committee made dinner for grateful residents of the Salt I Lake City Fisher House, a special home that provides temporary housing for military families while their loved ones receive medical care.

In what has become a tradition for the Education Committee, members from all across the state generously donated money and their time to help prepare the carefully selected gourmet meal made entirely from scratch.

The Fisher House helps our military and veterans in need by providing their families a free of charge “home away from home” in a comfortable environment that offers hope, community, and healing. n

16 www.uba.org 2017 Bank Executive Conference

he 7th Annual UBA Bank Executive Winter Conference held December 1, 2017 at the Salt Lake Marriot Uni- T versity Park Hotel was well attended by bank executive officers from across the state of Utah in a setting designed to provide executive management teams with a “Risk Radar” to guide their banks through the industry’s most pressing issues for the coming year.

This year’s conference kicked off with a Risk Radar Regula- tor Panel with representatives of the Federal Reserve, FDIC, OCC and the State of Utah, and featured keynote speaker ABA Chief Political Strategist Rob Engstrom who addressed Managing Political Risk.

Other sessions included Chris Redgrave, Zions Bank providing an analysis on Generational Trends and Impacts; Lyall Swim, Junto Strategy, addressing What it Takes to be an Innovator and a lively discussion on Weapons of Math Destruction with Don MacDonald, MX.

At lunch, graduates of the 2017 EDP program were honored by their respective bank management. n

Issue 4. 2017 17 2017 Emerging Bank Leaders Conference

he 2018 EBL Conference marked a successful year for the working through challenges; Personal Branding with Katie Emerging Bank Leaders. Approximately 80 bankers Holland, Corporate Alliance; an engaging demonstration T from across the state attended “Igniting Leadership, on the Amazon Prime Effect from Dave DeFazio and a a Conference for Emerging Bank Leaders” on November life changing story of perseverance from Hall of Fame 9th at Thanksgiving Point. The annual event featured Gold Medalist Mike Schlappi. Other highlights included presentations on timely topics from a mix of impressive “Leadership Insights” from UBA Chairman Ron Ostler, industry and leadership experts including: Advocacy from Comenity Capital Bank and UBA Board Member Curt Utah House Speaker Greg Hughes; An Economic Outlook Queyrouze, TAB Bank. for 2018 with Robert Spendlove, Zions Bank; Crystal Maggelet, FJ Management sharing her experiences on Details on the 2019 EBL Conference will be available soon. n

18 www.uba.org Issue 4. 2017 19 COMPLIANCE CORNER HMDA AND COMPANY— HIGHLIGHTS FOR THE UPCOMING YEAR

This past year has shaped up to be quite a ride but buckle up—2018 is fast approaching.

By Sarah Sauceda, Associate General Counsel

ighlights for 2018 include: (1) Home Mortgage Disclo- the preceding calendar years, or if it originated 100 or more covered sure Act (HMDA) changes; (2) amendments to the Equal open-end lines of credit in each of the past two years. Of course, the H Credit Opportunity Act (ECOA); (3) an increased Truth- institutions making these loans also need to meet other applicable in-Lending (TIL) threshold; (4) Community Reinvestment Act coverage requirements to be subject to HMDA. (CRA) amendments; and (5) “sunset” provisions. As for the amendments to transactional coverage, HMDA 2018 The time has come for the long-awaited changes affecting HMDA modifies the types of transactions that are covered. Basically, the to hit the banking world with a bang. HMDA – version 2018 – new version of HMDA adopts a dwelling-secured standard. As includes changes relating to institutional and transactional coverage of January 1, 2018, covered loans will include both closed-end and data collection, recording, reporting, and disclosure. mortgage loans and open-end lines of credit secured by a dwelling. Another major change to this portion of HMDA concerns As for institutional coverage, HMDA 2018 adopts a uniform business-purpose loans. Starting January 1, 2018, dwelling-se- loan-volume threshold for all institutions. This means that start- cured, business-purpose loans and lines of credit will constitute ing January 1, 2018, an institution will be subject to HMDA if it covered loans if they are home purchase loans, home improve- originated 25 or more covered closed-end mortgage loans in each of ment loans, or refinancings.

20 www.uba.org In conclusion, there are a great many changes in store for 2018, but if you are prepared, you should be able to handle them with ease and confidence.

One other slightly understated change has to do with preapprovals. The regulators are at it again and are making more changes—this Under the new rule, covered institutions will be required to collect, time to the CRA. Once again, these changes are aimed at help- record, and report information for approved but not accepted preap- ing banks transition to the new version of HMDA. The new rule proval requests for home purchase loans. In contrast, preapproval updates the definitions of “home mortgage loan” and “consumer requests for open-end lines of credit, home purchase loans to be loan,” and the public file content requirements to conform HMDA secured by multifamily dwellings, and reverse mortgages will not be 2018. The amendments also cleanup the CRA by removing now ob- covered under HMDA. solete references to the Neighborhood Stabilization Program. The comments closed on October 20, 2017, and the final rule becomes Lastly and as most of you know, reportable data under HMDA has effective on January 1, 2018. received a bit of a makeover. HMDA 2018 adds a few extra data points. These new data points include: (a) applicant/borrower age, The updates to the CRA may be found here: https://www.federal- (b) credit score, (c) automated underwriting system information, (d) reserve.gov/newsevents/pressreleases/files/bcreg20170913a1.pdf unique loan identifier, (e) property value, (f) application channel, (g) borrower-paid origination charges, (h) points and fees, (i) lender Finally: When I think of sunsets, I picture beaches, long walks, credits, (j) discount points, (k) loan term, (l) prepayment penalty, and OF COURSE regulations that are up for renewal. (This is (m) non-amortizing loan features, (n) interest rate, and (o) loan normal, right?) This last topic concerns the regulations that are originator identifier as well as other data points. set to expire in the near future. These are often referred to as “sunset” provisions because the regulatory sun is quickly setting Again, the effective date for these changes is January 1, 2018. Be on them. Some of the major sunset provisions include: sections 531 sure to remember that, although the HMDA 2018 is upon us, you (maximum rent) and 533 (foreclosure) of the Servicemembers will still need to submit data collected in 2017 under the current Civil Relief Act (SCRA); the U.S. Department of Housing rule with the slight change of submitting the 2017 data to the CFPB and Urban Development (HUD) SCRA notice; the National instead of the Federal Reserve Board. Flood Insurance Program (NFIP); and the Federal Home Loan Mortgage Corporation loan limit of $424,100. These provisions The updates to HMDA can be found here: https://s3.amazonaws. are all set to expire at the very end of 2017, with the exception of com/files.consumerfinance.gov/f/documents/201708_cfpb_fi- the NFIP. NFIP authorization was set to expire on December 8, nal-rule_home-mortgage-disclosure_regulation-c.pdf. 2017, but received a two-week extension by Congress (currently set to expire on December 22, 2017). As of now, none of the Because the regulators know that changing one major regulation provisions have been extended past 2017. So, be sure to keep an isn’t enough fun, they have also changed ECOA. ECOA’s current eye on these regulations towards the end of the year. ethnicity and race information collection are updated in the 2018 version of the regulation. Additionally, the amendments add In conclusion, there are a great many changes in store for 2018, certain model forms and remove others. Thankfully the changes but if you are prepared, you should be able to handle them with to HMDA and ECOA go hand-in-hand, as the purpose of the ease and confidence. amendments to ECOA is to facilitate compliance with HMDA version 2018. Note that all these changes to ECOA come into For any questions or concerns, feel free to give us a call at (888) effect on January 1, 2018 with the exception of the amendment 353-3933, chat with us on the website (https://www.complianceal- that removes the Uniform Residential Loan Application. This liance.com), or email us at [email protected] n particular amendment becomes effective on January 1, 2022.

The final ECOA rule can be found here: http://files.consumerfinance.gov/f/documents/201709_cfpb_final-rule_regulation-b.pdf. Sarah serves as Associate General Counsel for Compli- ance Alliance. She is an Honors Program graduate who It didn’t happen for 2016…It didn’t happen 2017…but the time you graduated summa cum laude from Lamar University in have anxiously been awaiting…has finally arrived! The TIL ex- Beaumont, Texas where she received her bachelor’s degree. While at Baylor Law School, Sarah heavily studied emption threshold has been adjusted. The exemption threshold will the financial aspects of the law—focusing her attention increase from $54,600 to $55,800, effective January 1, 2018. on secured transactions and the Uniform Commercial Code. Before coming to Compliance Alliance, she worked at Frost Bank within their Credit Administration The rule updating the threshold can be found here: https:// Department. As an attorney with Compliance Alliance, Sarah is eager to www.federalregister.gov/documents/2017/11/09/2017-24445/ help members with their compliance and regulatory questions. truth-in-lending-regulation-z.

Issue 4. 2017 21 EDUCATION CORNER

UBA Commercial Lending Development Program

he Utah Bankers Association proudly presented Certificates of T Completion to the 2017 class of the UBA Commercial Lending Devel- opment Program (CLDP). Classes recently wrapped up for the four-month program which focuses on cultivating a strong foundation in the demanding commercial lending arena by identify- ing key skills required to perform the specialist function of assessing businesses for loan purposes. The CLDP is part of the UBA’s ongoing commitment to help develop leaders, building a strong future for the banking indus- L to R: Chase Carver, TAB Bank; Randy Allred, TAB Bank; Mike Ballantyne, Central Bank; Tyler Hardy, Central Bank; Mark Drake, Central Bank; Doug Blanchard, Central Bank; Greg Rich, Optum try in Utah. For more information on Bank; Bryson McFarlane, TAB Bank; Morgan Gubler, Cache Valley Bank; Instructor David Osburn; this and other development programs, Derek Hall, TAB Bank; Kade McMullin, Cache Valley Bank. contact Becky Wilkes, 801-214-7724, Not pictured Ben Blume, TAB Bank and Terry Thompson, TAB Bank [email protected]. n

UBA Executive Development Program

raduates of the 5th class of the UBA insights and experience, facilitate interactive with introductions to colleagues at other Executive Development Program were course sessions that focus on the important banking institutions and future networking G honored at the UBA 7th Annual Bank economic, regulatory and competitive pres- opportunities. Executive Winter Conference in Salt Lake sures facing the industry today. City December 1. This is the fifth com- The graduates joined their classmates along mencement in a program developed by the Each month throughout 2017, the bankers with their respective bank management at UBA to enhance and expand future banking attended daylong classes on a wide range a lunch honoring them during the UBA’s executives understanding of all aspects of of banking topics. According to UBA Bank Executive Winter Conference in finance and leadership. President Howard Headlee, “The cross-dis- December. ciplinary curriculum provides a 30,000-foot The Executive Development Program is a perspective of the banking industry.” “The For further information on the Executive comprehensive course designed to cultivate course provides broad exposure to different Development Program, contact Becky Wil- the next generation of banking leaders. Ex- disciplines within banking organizations,” kes, Vice President of Education at 801-214- ceptional instructors, with years of industry Headlee said. It also provides the bankers 7724, [email protected]. n

L to R: Ben Cluff, Rock Canyon Bank; Kevin Staley, Rock Canyon Bank; Russell Moss, Central Bank; Jason Hardy, Bank of the West; Nathan DeFries, Bank of Utah; David Dyreng, Rock Canyon Bank; Brock Riley, Bank of Utah; David Cheney, American Express Centurion Bank; Steve Hannay, Medallion Bank; Saul Aguirre, KeyBank; Bryan Smith, Marlin Business Bank; Robyn Currah, Zions Bank; Zachery Taylor, American Express Centurion Bank; Erin Balmanno, Comenity Capital Bank; Dave King, EnerBank USA; Nathan Cluff, Comenity Capital Bank; Jacob Terry, 1st Bank; Susan Hostetter, TAB Bank; Kyler Cheesman, Bank of American Fork; Marc Peterson, Zions Bank; Clayton Denos, Rock Canyon Bank; David Mickelson, Bank of American Fork; Bryan Jack, First National Bank; Lauren Chapman, Comenity Capital Bank; Jennifer Dee, Bank of Utah; Tyler Heap, TAB Bank; Kyle Brown, Medallion Bank Not pictured: Adam Farr, Optum Bank; Gary Jensen, Central Bank

22 www.uba.org DEEDS IN LIEU OF FORECLOSURE: Advantages and Considerations for Secured Lenders

By Todd M. Labrum, Snell & Wilmer

n considering whether to extend a not sufficient to repay the underlying of property ownership when a deed in loan secured by real property, a pri- loan in full) against the borrower is lieu of foreclosure is used. Defaulting I mary concern for the lender is its ease not worthwhile. Keep in mind that borrowers are spared the public and ability to enforce remedies against the availability of a post foreclosure court filings, required foreclosure the real property collateral in the deficiency varies by state and the advertisements and the accompanying event that the loan becomes troubled. foreclosure process and elections stigma associated with a foreclosure Typically the lender will consider loan made by the lender. Careful advance appearing on their credit history. modifications or agreed to forbearance planning when enforcing remedies is Lenders also have the opportunity to terms, but if the parties are unable to crucial to avoid waiving or limiting the ask for helpful documentation and mutually resolve a loan default, the lender’s rights. information relating to the property, remedies available to a real estate including leasing files and service secured lender include foreclosure, both Advantages contracts, thus easing the lenders non-judicial and judicial, the appoint- The primary motivation for a deed transition into ownership. Cooperative ment of a receiver, a short sale and deed in lieu of foreclosure—as the names borrowers may even be willing to in lieu of foreclosure. suggests—is to avoid the time and cost provide any needed assignments as of the foreclosure process. In the state part of negotiations, allowing the This article will explore the possible of Utah, the foreclosure process takes property to continue operations advantages and risks of negotiating and approximately 130 days from the date relatively uninterrupted. accepting a deed in lieu of foreclosure. on which the lender provides a Notice of Default and Election to Sell to the Lastly, and perhaps most importantly, A deed in lieu of foreclosure is a borrower. Alternatively, a deed in a deed in lieu of foreclosure allows recordable instrument whereby the lieu of foreclosure is not restricted by the lender to preserve its deed of trust owner of the real property encumbered procedural time and notice requirements or mortgage lien on the property if by a deed of trust or mortgage conveys and is only limited by the time needed properly documented. Since a deed its interest in the property to the lender for the parties to negotiate and document in lieu does not “foreclose out” any in exchange for the release of some or the transfer of title. A shorter timeline is subordinate liens, the lender takes the all obligations under the deed of trust likely to translate into a decrease in costs property subject to all existing liens, or mortgage and other loan documents. for both parties. whether known or unknown. Thus, Such conveyance, which must be entered many lenders will not cancel the note into voluntarily by both parties, allows Lenders often fear the bad acts of a and deed of trust lien, but will instead the lender to obtain title to the collateral disgruntled borrower who is no longer give the borrower a covenant not to property without going through the incentivized to preserve the value sue—in the event the deed is later set foreclosure process. Accordingly, the and condition of the property during aside for legal or equitable reasons— lender may be able to save time and costs a lengthy foreclosure process. The and will keep the deed of trust mortgage related to a foreclosure. shortened timeline of a deed in lieu of of record and not discharge or release it foreclosure allows the lender to take until the property is sold. Utah merger At the outset, a lender must determine control of the property without the law follows the intent of the parties, if a deed in lieu of foreclosure makes appointment and costs of a receiver allowing a deed of trust or mortgage to sense for the lender by balancing the and take immediate steps to repair remain in place if the parties express advantages and risks discussed below. and preserve the property, receive their intention in the deed in lieu of Generally, a lender will most often any associated income, maintain foreclosure to not terminate the deed of pursue a deed in lieu of foreclosure contracts which are necessary trust or mortgage. Recent case law also when the borrower lacks assets other to operate of the property, and, generally supports the ability of a lender than the secured property so that ultimately, sell the property. to foreclose its deed of trust or mortgage pursuing a deficiency judgment (i.e. a after acceptance of a deed in lieu of judgment against a borrower following a Many lenders also find that borrowers foreclosure, at least where the deed foreclosure where the sale proceeds are are more cooperative in the transition contains an anti-merger provision. n

Issue 4. 2017 23 BankBank Kudos Kudos

BANK OF UTAH Global Military Analyst and Cyber Risk Consultant Head- credit to pay off a portion of the principal amount, in a lump lined Bank of Utah Fall Speaker Events in Logan, Ogden, sum within the first 18 months of their loan, to lower their Salt Lake and Lehi, Sept. 26 - 27 monthly payments while retaining the loan’s original interest rate and terms. In addition to the new PowerLoan, EnerBank To help Utah businesses minimize cyber risk in the global market- offers a variety of other solar loans such as Same-As-Cash place, Bank of Utah hosted its annual Fall Speaker Events, Sept. and low interest loans with fixed monthly payments. The 26 – 27 in Logan, Ogden Salt Lake and Lehi, featuring former U. bank’s innovative Combo Loan is another available option. S. Air Force Intelligence Officer Ret. Col. Cedric Leighton. He www.enerbank.com is currently a CNN Military Analyst and the chairman of his own global strategic risk consultancy. KEYBANK “With the advent of the ‘Internet of Things,’ everyone and every KeyBank Named Best Place to Work for LGBTQ Equality business is at some degree of risk for compromised data,” said Leigh- ton. “When you’re connected online, your suppliers’ lack of cyber KeyBank received its tenth perfect score of 100 percent for security can impact yours. Big things happening around the world satisfying all criteria on the Corporate Equality Index (CEI), can put your business at risk as well. You can’t fix vulnerabilities a national benchmarking survey and report on corporate pol- without first knowing the threats that exist in the business world. The icies and practices related to lesbian, gay, bisexual, transgen- cyber world and the real world are now interchangeable.” der and queer (LGBTQ) workplace equality, administered by the Human Rights Campaign Foundation. Leighton shared fascinating stories from his past at the KeyBank’s efforts in satisfying all of the CEI’s criteria Pentagon and assignments results in a 100 percent ranking and the designation as a around the globe, as well as Best Place to Work for LGBTQ Equality. KeyBank joins the give his take on the current ranks of 609 major U.S. businesses which also earned top U.S. geo-political environment marks this year. and how it affects businesses. Throughout his 26-year career KeyBank Donates $40,000 to Local Educational Organizations in the US Air Force, Leighton In keeping with the company’s commitment to supporting com- Cyber Security expert, Cedric oversaw numerous critical in- munity partners that provide access to high quality education and Leighton, speaks to Logan telligence missions, helped train support for students’ academic success, KeyBank recently award- business leaders at Bank of Utah the nation’s cyber warriors and ed grants to three local education nonprofits totaling $40,000. Fall Speaker event at The Grove is the recipient of numerous Event Center in Logan. military awards. KeyBank awarded a $25,000 grant to the Westminster College Center for Entrepreneurship, which inspires students from ENERBANK USA all disciplines to utilize their passion and skills to explore the New Loans for Rooftop Solar PV Installations world of opportunities by learning about entrepreneurship. The EnerBank USA introduced its grant from KeyBank will help give students practical skills and 12- and 20 -Year Power Loan empower them to innovate, validate, plan, fund, and launch with an optional re-amortization new ventures. KeyBank also awarded a $5,000 grant to the feature for Solar PV projects. Legacy Summer Bridge Program, which helps prepare incom- Annual percentage rates (AP Rs) ing first-generation and traditionally underrepresented students for 12-Year PowerLoan is 1.99 with the academic, leadership, and social support to successful- percent, 2.99 percent, and 3.99 ly transition to college. percent; 20-Year PowerLoan APRs are 4.99 percent and 5.99 In addition, KeyBank made a $10,000 donation to Junior percent. Minimum and maximum loan amounts are $15,000 Achievement’s K-12 Whole School Program, enabling and $65,000, respectively, on approved credit. These new loans local elementary schools to receive Junior Achievement’s are specifically for homeowners who want to use their solar tax curriculum for the 2017-2018 school year.

24 www.uba.org “The mission of the KeyBank KeyBank Awards The Road Home $25,000 Grant Foundation is to support orga- Building strong communities that advance economic nizations and programs that inclusion; the development of small businesses; and safe, prepare individuals for thriving affordable and stable housing for all neighbors is a key tenet futures, which is perfectly aligned of KeyBank’s community giving philosophy. In support of with the work Red Barn Farms Key’s commitment to supporting neighbors, the company does to provide transitional hous- recently awarded a $25,000 grant to The Road Home for its ing, educational training and jobs Rapid Re-housing for Families program. for adults recovering from drug and alcohol abuse,” said Terry The Rapid Re-housing Pro- Grant, president of KeyBank’s gram supports The Road Utah market. “It is a pleasure to fund programs like this one, Home’s mission to assist peo- which greatly improve the quality of life for individuals and ple to move out of homeless- enhance the overall economic vitality of our community.” ness and back into the local community. The KeyBank ZIONS BANK grant provides funding to American Banker magazine recently listed Zions Bancorpo- help find and secure housing ration as one of five Top Banking Teams of women execu- for families, many of whom tives in the nation. There were 27 women from across the come directly to the program company who were recognized at the awards ceremony held from local shelters. in New York City. Women comprise 50 percent of Zions Ban- KeyBank Contributes $5,000 to Red Barn Farms corporation’s corpo- KeyBank recently announced a $5,000 grant to Red Barn rate officer positions, Farms, a recovery farm and life-skills academy focused and female executives on assisting individuals and families struggling with drug make up 21 percent addiction, alcoholism, trauma and mental illness. The of the company’s Ex- KeyBank contribution was made in support of the Red Barn ecutive Management Farms’ Reintegration Project, which is striving to reinte- Committee. n grate people with a history of addiction and trauma back into the local workforce.

Issue 4. 2017 25 ADVERTISING in your association’s trade journal is a solid approach to business development.

Business publications are rated the first choice for staying in touch with what’s going on in their sector by 61% of decision makers. 83% of managers would recommend to people starting a career in their sector to read the business publications. If I didn’t read them I wouldn’t know what’s going on. With the information we gather from the publications, we can determine if we are on the right track or if we need to change direction. 71% of decision makers believe that B2B magazines are essential reading. I would be lost without my business publications.

[email protected] | (v)855.747.4003 26 www.uba.org Bankers on the Move

Shane Adams has been promoted into Agricul- Brooke L. Heym has been appointed by Bank tural Lending for State Bank of Southern Utah of Utah to the position of mortgage loan officer and will be working out of the Cedar City Main at the Redwood Road Branch. She has more Branch. Shane has been the Branch Manager in than 20 years of management experience with a Parowan since 2003. proven track record for developing an efficient staff of any size. She excels in consumer lending, Steve Barton has been the Branch Manager for business-to-business management and research. State Bank of Southern Utah in Orderville since 2014 and has transitioned to the Parowan branch Stephanie Horne Clark has been promoted to executive vice as Branch Manager. His experience in commer- president and director of Private Banking at Zions Bank. Her cial lending as Orderville manager will be of responsibilities include management of the bank’s Private Bank- great value to our customers in Parowan. ing division, as well as the Family Business, Family Office and ZionsMED programs. She previously served as senior vice pres- Julia Bibby will bring extensive expertise to ident and director of Private Banking from 2014 to 2017. She Bank of Utah as a commercial loan officer. Bibby joined Zions Bank in 1997 after working as a customer service is a banking expert with experience as a credit manager and premier banking officer for First Interstate Bank/ analyst and client service manager at banks on Wells Fargo Bank. the east and west coast. She will oversee operations of commercial, real estate and credit loans. Alayne Davis joined State Bank of Southern Utah in 1996 and has been the Mortgage Loan Julie Buchholz has joined Comenity Capital Processing Manager for many years. Alayne Bank as CRA Officer. Julie has extensive com- has recently been moved into a new Mortgage munity involvement not only in Utah but also Loan Underwriter position for the Bank and will Missouri, Illinois, New Jersey and New York. continue to lend her expertise to State Bank’s Julie brings a dynamic and progressive lead- mortgage department and customers. Alayne is ership experience with expertise in community development, based in the South Interchange branch in Cedar City. service operations and project management. Prior to joining Comenity Capital Bank, she held positions with GE Capital, GE Annie Leither, Zions Bank’s Sponsorship Manager, received a Healthcare, CNBC and NBC. Julie will be leading a strategic 20 in their 20s Award by Utah Business magazine. Leither over- CRA program with service and investment related initiatives sees all the bank’s sponsorship efforts which amass to nearly 30 benefiting the needs of the community. Comenity Capital Bank percent of the bank’s current marketing budget. She assumed the is very excited to partner with Julie and looks forward to all the new marketing position a few years ago, and has helped solidify innovative ideas she brings. various high-profile business relationships across Utah and Idaho.

Issue 4. 2017 27 Ryan Martin has been promoted by Key Bank Cristie Richards has been named executive vice president and to senior vice president, regional retail leader for director of customer experience at Zions Bank. In this posi- Utah and Idaho. In this role, he is responsible for tion, Richards will be responsible for helping to improve the overseeing KeyBank’s retail network and small overall client experience with a focus on driving a profitable business banking segment across Utah and Ida- customer strategy at all levels of the company. She also over- ho. He will work closely with KeyBank’s middle sees the bank’s Diversity and Inclusion Council. market, business banking, investment services, mortgage and private banking teams to help meet the needs of Utah and Idaho Jennifer Smith, Zions Bank’s Chief Information Officer, was clients throughout their entire financial wellness journey. recognized by American Banker magazine as one of 25 Women to Watch in today’s banking industry. Smith oversees a massive Allen Morris joins Bank of Utah as a mortgage effort to replace the current loan and deposit processing system lender. Previously, Morris worked as a retention at Zions Bank with a more modern, integrated approach more point advisor at Autopoint, a software company suited for today’s digital age. in Utah. He will be responsible for approving applications and managing clients in the mortgage Wendy Thomas joined State Bank of Southern loan process. Utah as the Branch Manager in Orderville. With an extensive background in Real Estate, Wendy Arthur Newell will bring extensive expertise to brings a high level of consumer lending knowl- Bank of Utah as a commercial loan officer. New- edge and an ability to build lasting relationships ell has worked in the banking industry for more with the Orderville community. than 20 years and has experience as a regional manager, senior vice president and banking man- David White joins Bank of Utah as a mortgage ager at various banks in Utah. He will oversee lender in the Orem branch. Previously, White operations of commercial, real estate and credit loans. was the branch manager for Bendigo Bank in Australia where he managed staffing, risk Jennifer Nielsen has joined Bank of Utah to compliance, lending and overall productivity of serve as a mortgage originator at the Roy, Utah the branch. He will be responsible for approving branch. Nielsen started her career 12 years ago applications and managing clients in the mortgage loan process. at a local credit union, where she excelled in mortgage lending. During her time at the credit union, she was promoted to branch manager and mortgage originator.

WORDS. DANI GORDEN Advertising Sales 855.747.4003 [email protected]

28 UBAUBA AssociateAssociate Members Members

Agri-Access The Cadence Group Federal Home Loan Bank of Des 3405 E Overland Rd, Ste 110 P.O. Box 711190 Moines Meridian, ID 83642 Salt Lake City, UT 84171 901 Fifth Ave, Suite 3800 Tel: 208-320-2637 Tel: 801-337-3917 Seattle, WA 98154 Contact: Chad Brown Contact: Jonathan Eberhardt Tel: 206-434-0581 Email: [email protected] Email: jeberhardt@thecadencegroup. Contact: Eric Jensen com Email: [email protected] Azureity, Inc. 563 West 500 South, Ste 260 CBCInnovis, Inc. FPS GOLD Bountiful, UT 84014 250 E. Broad Street, 21st Flr 1525 W. 820 N. Tel: 801-677-2499 Columbus, OH 43215 Provo, UT 84601-1342 Contact: Brian Acord Tel: 855-202-6111 Tel: 801-429-2126 Email: [email protected] Contact: Jason Bunker Contact: Matt S. DeVisser Email: [email protected] Email: [email protected] The Baker Group 2975 West Executive Parkway, Suite 139 Community Bank Consulting Services Harland Clarke Lehi, UT 84043 364 Tanner Lane 15955 La Cantera Pkwy Tel: 800-937-2257 Midway, UT 84049-6520 San Antonio, TX 78256-2589 Contact: Brian Bates Tel: 314-422-1567 Tel: 801-288-2133 Email: [email protected] Contact: Lynn A. David Contact: Michael Kelly Email: [email protected] Email: [email protected] Bank Financial Services Group 1500 Quail St, Ste 600 Compliance Alliance, Inc. Holland & Hart Newport Beach, CA 92660 203 W. 10th St. 222 S Main St., Ste 2200 Tel: 951-712-1106 Austin, TX 78701 Salt Lake City, UT 84101-2194 Contact: Larry Rowley Tel: 888-353-3933 Tel: 801-799-5800 Email: [email protected] Contact: Scott Daugherty Email: [email protected] Jones Waldo Bank Trends 170 S Main St., Suite 1500 175 S Main St, Ste 500 D.A. Davidson & Co. Salt Lake City, UT 84101-1644 Salt Lake City, UT 84102 8 Third Street North Tel: 801-521-3200 Tel: 877-717-6743 Great Falls, MT 59401 Contact: George Sutton Contact: Michael Stinson Tel: 406-268-3084 Email: [email protected] Email: [email protected] Contact: Tom Hayes Email: [email protected] Kirton McConkie Bankers’ Bank of the West 50 East South Temple 1099 18th St., Suite 2700 Dorsey & Whitney LLP 1800 Eagle Gate Tower Denver, CO 80202-1927 111 S. Main St., 21st Floor Salt Lake City, UT 84111 Tel: 303-291-3700 Salt Lake City, UT 84111 Tel: 801-328-3600 Contact: Dallas Kiburz Tel: 801-933-7365 Contact: Gary Winger Email: [email protected] Contact: Steven Waterman Email: [email protected] Email: [email protected] BMA Banking Systems Metrostudy 2151 South 3600 West Eide Bailly LLP 1 Thomas Cir NW Suite 600 West Valley City, UT 84119-1121 5929 Fashion Point Dr., Ste 300 Washington, DC 20005-5803 Tel: 801-978-0200 Ogden, UT 84403 Tel: 202-452-0800 Contact: Kevin Jones Tel: 888-777-2015 Contact: Heather Knutson Email: kevin.jones@bmabankingsys- Contact: Gary Smith Email: [email protected] tems.com Email: [email protected]

29 www.uba.org UBAUBA AssociateAssociate Members Members

Mirador Ray Quinney & Nebeker P.C. Snell & Wilmer, LLP 317 SW Alder St, 2nd Floor 36 S State Street, Suite 1400 15 W South Temple, Suite 1200 Portland, OR 97204-2547 Salt Lake City, UT 84111-1451 Salt Lake City, UT 84101-1547 Tel: 503-451-0518 Tel: 801-532-1500 Tel: 801-257-1900 Contact: Steve Rice Contact: Kevin Glade Contact: Lori Newey Email: [email protected] Email: [email protected] Email: [email protected]

Moss Adams LLP Raymond James Tanner LLC 601 W Riverside Ave, Suite 1800 One Embaradero Center, Ste 650 36 South State St., Suite 600 Spokane, WA 99201 San Francisco, CA 94111 Salt Lake City, UT 84111-1400 Tel: 509-747-2600 Tel: 415-616-8900 Tel: 801-532-7444 Contact: Mike Thronson Contact: Steven Egli Contact: Tom Lund Email: [email protected] Email: [email protected] Email: [email protected]

Mountain West Small Business Fi- Rocky Mountain CRC Travelers Insurance nance 64 E Winchester St., Suite 230 6060 S Willow Drive 2595 E 3300 S Salt Lake City, UT 84107-5602 Greenwood Village, CO 80111 Salt Lake City, UT 84109-2727 Tel: 801-366-0040 Tel: 720-200-8447 Tel: 801-474-3232 Contact: David Watkins Contact: Janu Cambrelen Contact: Steve Suite Email: [email protected] Email: [email protected] Email: [email protected] RSM US LLP WorldPay Office Depot 515 S. Flower St., 41st Floor Salt Lake City, UT 84101 281 West 2100 South Los Angeles, CA 90071 Tel: 801-664-3198 Salt Lake City, UT 84115-1830 Tel: 213-330-4736 Contact: Jon Garner Tel: 801-831-4201 Contact: Victoria Umphress Email: [email protected] Email: [email protected] Parsons Behle & Latimer Zions Correspondent Banking Group 201 S Main St Ste 1800 Sandler O’Neill + Partners, L.P. 310 South Main Street, Suite 1400 Salt Lake City, UT 84111 1251 Avenue of the Americas, 6th Floor Salt Lake City, UT 84101 Tel: 801-532-1234 New York, NY 10020 Tel: 801-844-7854 Contact: Gary E. Doctorman Tel: 212-466-7800 Contact: Steve Campbell Email: [email protected] Contact: Avi Barak Email: [email protected] Email: [email protected] Promontory Interfinancial Net- work, LLC Scalley Reading Bates Hansen & 1300 17th St N, Suite 1800 Rasmussen Arlington, VA 22209 15 West South Temple, Suite 600 Tel: 703-292-3462 Salt Lake City, UT 84101 Contact: Glenn Martin Tel: 801-531-7870 Email: [email protected] Contact: Jonathan Rupp Email: [email protected] PwC 201 S. Main Street, Suite 900 Simpson & Company, CPAs Salt Lake City, UT 84111 1111 E. Brickyard Road, Suite 112 Tel: 801-534-3883 Salt Lake City, UT 84106-2592 Contact: Ryan J. Dent Tel: 801-484-5206 Email: [email protected] Contact: Kenneth R. Simpson Email: [email protected]

Issue 3. 2017 30 PERSPECTIVE.

The COMMERCIAL LENDING AND BANKING GROUP at Jones Waldo recently closed the following types of transactions:

• Construction loans for office, retail, medical, hotel, apartments and mixed-use condominium developments • Real estate acquisition loans • Corporate credit facilities • Affordable housing tax-credit construction loans • New market tax-credit construction loans • Ski resort financings • Asset based acquisition loans • Credit provider representation for credit enhanced bond financings • Syndicated real estate and corporate financing transactions • Real estate and corporate credit restructuring transactions • Financial institution owned real estate sale transactions • Judicial and non-judicial foreclosures • Ongoing advice regarding bank regulatory compliance issues

Jones Waldo’s commercial lending group provides the level of specialization and skill that comes only with seasoned professionals who represent both local and national clients. To learn more call us at 801-521-3200 or visit our website at www.joneswaldo.com.

JONESWALDO.COM + 801-521-3200 SALT LAKE CITY PARK CITY PROVO ST. GEORGE CHICAGO

JonesWaldo_PerspectiveAd_122316.indd 1 12/23/16 1:33 PM PRSRT STD U.S. POSTAGE PAID SALT LAKE CITY, UT Utah Bankers Association PERMIT NO. 508 175 S Main Street, Ste 1420 Salt Lake City, UT 84111

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