SPRING 2018
Meet Tom Barkin Richmond Fed’s New President & CEO
Our Difference: A 70+ year legacy built serving as a retirement plan fi duciary. Your Advantage: Successful retirement plan outcomes for you and your employees.
At Pentegra, our difference is your advantage.
As one of the nation’s most experienced retirement plan fi duciaries, we know that expert governance focused on plan and participant success leads to better results. Get better retirement plan results.
Learn more about our unique retirement plan solutions for banks. Contact us at 800-872-3473, or visit us at www.pentegra.com.
Carolina Banker | Spring 2018 3 Carolina Banker is published by Community Bank Services (CBS), a wholly-owned subsidiary of the NCBA, as a continuation of The Tarheel Banker since July of 1922. Spring 2018
Officers & Directors Mark Holmes, Wilson Chairman David Stevens, Durham Vice Chairman North Carolina Bankers Association Staff Rick Callicutt, High Point Immediate Past Chairman Peter Gwaltney, President & CEO Peter Gwaltney, Raleigh Nathan Batts, Senior Vice President & Counsel Centrant Community Capital Staff President & CEO Grace Sampson, Senior Vice President & Secretary & PAC Treasurer Wendell Begley, Black Mountain Blair Jernigan, Vice President of Event Management David Bennett, Executive Vice President Charles Canaday, Burlington Vickie Bowers, Director of Human Resources John Bocciardi, VP/Asset and Compliance Manager Derek Cohen, Wilmington Scott Brownlow, Creative Director Cindy Wiggins-Tiede, Senior Underwriter Phil Collins, Morehead City Brianna Reeder, Director of Professional Development Shellie Lempert, Servicing and Closing Manager Bruce Elder, Raleigh Michelle Sutton, Executive Assistant Vikki Conley Ikard, Portfolio Analyst Steve Fisher, Granite Quarry Blaine Wiles, Director of Community Outreach & Member Engagement Richard Jefferson, Jacksonville Frank Youngblood, Financial Analyst Consultants Bob Johnson, Winston-Salem Robert A. Singer, Greensboro Grey Morgan, Mount Olive Community Bank Services (CBS) Staff Corporate Counsel Roger Plemens, Franklin Kim Hutchens, Executive Vice President Dr. Harry M. Davis, Boone Rick Redden, Charlotte Lauren Perry, Vice President NCBA Economist and Dean of the NCBA’s Jim Sills, Durham Janice Royster, Director of Endorsed Vendor Programs North Carolina School of Banking at UNC-Chapel Hill
4 Carolina Banker | Spring 2018 NCBA News
6 From The President’s Desk Peter Gwaltney, NCBA 8 NC Bank PAC
10 2018 Events Calendar
12 Legislative Update Nathan Batts, NCBA 16 News From Centrant David Bennett, Centrant Community Capital 20 Why Join The Young Bankers? In This Edition Meredith Begley, Black Mountain Savings Bank 24 25 Years of Camp Challenge Blaine Wiles, NCBA Richmond Fed's New 28 CBS Update CEO & President (Pg. 50) Kim Hutchens, CBS Introducing the eighth CEO & President of the Federal Reserve Bank of Richmond: 30 Health Benefit Trust Thomas Barkin. Read about the new leader Lauren Perry, CBS of the fifth district and why he was chosen 32 Economic Forecast Forum among the many qualified candidates.
Five Perspectives on the 2017 Tax Reforms (Pg. 42) Featured Content The first major overhaul of the tax code in over three decades was passed in December, but what does that mean for 34 Trips and Traps your bank? Five different industry experts Caren Enloe, Smith Debnam give you their thoughts. 38 What Bank Directors Should Learn From Wells Fargo David Baris, American Association of Bank Directors Trips and Traps (Pg. 34) 40 Who Moved My Step Up? Jim Reber, ICBA Securities Although new federal debt collection rules may be coming, banks’ debt collection efforts 42 Five Perspectives on the 2017 Tax Reform already are regulated by North Carolina’s Jim Engel, Aquesta Bank; Kelly King, BB&T; Dr. Harry Davis, NCBA; Debt Collection Act. This article gives nine Nikki Yarborough, DHG Financial Services; Hon. George Holding, NC’s 2nd District important tips on how to avoid the pitfalls that 48 Textbook Advocacy can result in civil penalties, actual damages, Rob Nichols, ABA and attorney’s fees. 50 Richmond Fed's New CEO & President Scott Brownlow, NCBA
From The Bankers
54 Faces in the News
56 Around the State Editor: Scott Brownlow Circulation: 4,500-5,000 57 NC M&A Updates Subscription Fee: $12 Annual Phone: 919-781-7979 58 Banks Backing Their Communities Email: [email protected] FROM THE PRESIDENT’S DESK
Our Vision, Our Mission, and Our Values Late last year, our leadership team at the NCBA went away for a couple of days of strategic planning. It was a productive and invigorating experience, and I enjoyed getting to know my colleagues a little bit better. In light of last year’s merger activity and consolidation of our membership, we felt that a thorough examination of our organization was in order. In addition to the budget and organizational issues, we spent a significant amount of time discussing our vision, our mission, and our core values. For those who have done this, you know how painstaking the process can be. The discussions revealed the passion and deep commitment our team has for our members and the respect we all have for the work bankers do every day in their communities. I’m pleased to share the vision, mission statement and core values we developed during our strategic planning retreat:
Our Vision: Strong Banks, Strong Communities Vision statements are aspirational. They describe what success looks like and where an organization wants to go. A vision statement reveals the character of an organization and tells the world what is important to it. Everything we do will be guided by it. Our Mission: To foster an environment where North Carolina banks can successfully serve their customers and communities. A good, focused mission statement is short and easy to remember. Our mission statement describes an organization and a group of people who wake up every day committed to doing whatever is necessary to help our members serve their customers and communities more easily, with more clarity, less regulation and minimal government intervention. Doing this every day moves us closer to our vision. Our Core Values Core values articulate the character and culture of an organization. Strategic initiatives, hiring decisions and communications must be consistent with an organization’s core values for it to be successful. Our staff has discussed these core values in detail, and they understand that the standards for performance and personal conduct are high. • Service – We are member driven in all that we do. • Advocacy – We are the voice of North Carolina banking. • Learning – We are constantly learning. • Integrity – We are honest and accountable in all that we do. • Community Outreach – We are committed to the communities we serve.
In other news, our Grassroots Team is off to a healthy start and is already having a noticeable impact. As you may recall, our Grassroots Team consists of one appointed member from each NCBA member bank. Each team member is tasked with coordinating government relations activities within their banks utilizing the support and direction of the NCBA. We recently asked Grassroots Team members to encourage their colleagues to respond to an Action Alert on Senate Bill 2155, the Regulatory Reform, Economic Growth and Consumer Protection Act. As of the date of this writing, North Carolina bankers have generated more than 1,400 email messages to Senators Burr and Tillis expressing support for the legislation. As the bill makes its way to the Senate floor, we can all rest assured that our senators know where we stand and how important the bill is to North Carolina’s banking industry. Thanks to all who have responded to the Action Alert. I’m grateful to the members of our Grassroots Team, and am excited about what we can do together as advocates for our industry.
All the best,
6 CarolinaCarCarolil na BankerBankerk | SpringSprS ing 2020180181 New Bank Members Engaged, Proven and Trusted Commercial Portfolio Rick Houser Senior Vice President, North Carolina Market Executive 12335 Wake Union Church Road, #206 Consultants Wake Forest, NC 27587 [email protected] | (919) 556-5972
David Barksdale Executive Vice President & President of North Carolina 3069 Trenwest Drive, Suite 101 Winston-Salem, NC 27103 [email protected] | (336) 448-5800
Tom Smith President & CEO 201 North Union Street Danville, VA 24541 [email protected] | (434) 792-4176 New Affiliate Members
@RISK Technologies, Inc. Roger G. Powell, LLC (Cybersecurity/Risk Management/ (Corporate Consulting/ LOAN Artificial Intelligence) Investment Banking) REVIEW PROGRAMS Allen Mitchell, VP Channels & Client Executives Roger Powell, Principal 16400 Dallas Parkway, Suite 100 2201 Old Court Road, 3rd Floor • Commercial Loan Review Dallas, TX 75248 Baltimore, MD 21208 • Portfolio Acquisition Review (Due Diligence) [email protected] [email protected] • Leveraged Loan Review/Structured Finance Review (972) 532-1878 Ext 201 (443) 253-4516 LOAN PORTFOLIO STRESS TESTING McGuireWoods LLP SecureNation, LLC • Bottom Up Loan Level Approach (Law Firm) (Cybersecurity Software • Top Down Capital Adequacy Assessment Mark Krombowski, Partner and Hardware Solutions) 77 West Wacker Drive, Suite 4100 Jon Davis, CEO • Stress Test Methodology Validation Chicago, IL 60601-1818 7175 Foster Drive, Suite 230 LOAN LOSS RESERVE METHODOLOGY [email protected] Baton Rouge, LA 70806 (312) 849-8170 [email protected] • Methodology Validation • Methodology Refinement Parker Poe Adams & Bernstein Spectrio CEIS REVIEW CONSULTING (Law Firm) (Audio-Visual and Marketing Solutions) Scott Shail, Partner, Financial Services Eric Planzer, Marketing Consultant • Credit Risk Process Review Industry Leader 5950 Fairview Road, Suite 330 • Loan Policy Maintenance 401 S. Tryon Street, Suite 3000 Charlotte, NC 28210 Charlotte, NC 28202 [email protected] [email protected] (800) 584-4653 Ext. 6678 (704) 335-9086
Presto! Network – Publix Super Markets, Inc. (Surcharge-free ATM and Debit Network) Ryan Herzek, Network Manager 1936 George Jenkins Blvd. Lakeland, FL 33815 CONTACT US NOW TO LEARN MORE! [email protected] (863) 688-1188 Ext 35103 888-967-7380 // www.CEISReview.com Carolina Banker | Spring 2018 7 NC BANK PAC NCBANKPAC Contributions from 2017: Political Action Committee for the NC Banking Industry NCBANKPAC Honor Roll The following individuals made strong contributions to NC BankPAC in 2017: American National Bank & Trust Company O.W. Gabriel Peoples Bank Charles T. Canaday Steve Goforth James S. Abernethy Thomas R. Goins Robert C. Abernethy Aquesta Bank Laura Kendall William D. Cable Paul Dougovito Craig Koontz Douglas S. Howard Jim C. Engel Robert P. Little A. Joseph Lampron David Goodrum Larry McDevitt John W. Lineberger Trey Weir Joseph McGuire Gary Matthews Peggy C. Melville Billy L. Price Black Mountain Savings Bank, SSB Howard Sellinger Larry E. Robinson Wendell Begley Dana L. Stonestreet Lance Sellers Meredith Begley Brenda Walker Greg Terry Hunter Westbrook Dan R. Timmerman Carolina Alliance Bank Richard Williams Benjamin I. Zachary George Groome John D. Kimberly KS Bank, Inc. Piedmont Federal Savings Bank John Poole Harold T. Keen Archie G. Allen Scott Cawood Coastal Bank & Trust LifeStore Bank John Cooper Fred Beacham Robert E. Washburn Walker Douglas Tom Bell Art Gibel Richard Jefferson M&F Bank Michael Hauser Jim King James Sills James Helvey Renee L. Rhodes Harold Martin Billy Sewell North Carolina Bankers Association Kenneth Moser Steve Wangerin Nathan Batts Ellen Parsley David Bennett Catherine Robbins Cornerstone Bank Meghan Best Richard Wagner Mark Holmes John Bocciardi Peter Gwaltney Providence Bank CresCom Bank DBA First South Bank Kim Hutchens Richard Anderson Lindsey A. Crisp Blair Jernigan Ted Whitehurst Bruce W. Elder Lauren Perry Steve L. Griffin Grace Sampson Select Bank & Trust Frederick N. Holscher Dawn Thompson Oscar N. Harris Steven Lee William L. Hedgepeth Robert Pfeiffer North State Bank Lynn H. Johnson Marshall T. Singleton Wayne Adams Tanner Smith Forrest H. Ball Sound Bank Larry D. Barbour S. Phillip Collins Entegra Bank James C. Branch Louis Buck Charles T. Francis Southern Bank and Trust Company Roger Greene Glenn E. Futrell Jerry Alexander Harry Grymes Jonathan E. Hand Joel K. Butler Karen Kephart Brian S. Hedges Hope H. Bryant Jerry Ollis Jonathan N. Krieps Michael L. Chestnutt Roger Plemens Burley B. Mitchell Drew M. Covert Barry W. Partlo Dan Ellis Fidelity Bank Harold Perry Olivia B. Holding David E. Royal Stacy R. Reedy Gordon Ivey Ernest W. Whitley Fred J. Smith J. G. Morgan Mary Willis Jack M. Stancil Gerald Haywood Quinn, Jr. Ken Sykes Gregory Shackelford First Carolina Bank Gary Woodlief William H. Bryan Ronald A. Day Paragon Bank Taylorsville Savings Bank, SSB First Federal Savings Bank Brent Barringer Timothy H. Keever John O. Gilleland George H. Edmiston Wayne M. Hoyle Don H. Edwards Union Bank Chip Stroup Scott Edwards Vincent R. Jones Frank Gray HomeTrust Bank Robert C. Hatley Bill Ammons Wesley Jones PAC to PAC Contributions: Frank Beam Howard Jung Sidney A. Biesecker Thomas Oxholm BB&T Ed Broadwell Jason Rapuano Fifth Third Bank W. T. Flynt Suntrust Bank
*As reported by the North Carolina Bankers Association Political Action Committee to the Federal Election Commission in 2017. Federal law requires us to use our best efforts to collect and report the name, mailing address, occupation, and name of employer of individuals whose contributions exceed $200 in a calendar year. For more information about the PAC, please contact Grace Sampson at [email protected].
8 Carolina Banker | Spring 2018 NCBANKPAC Political Action Committee for the NC Banking Industry NC BankPAC supports the election campaigns of individuals who share banking’s legislative goals. It supports those who are willing to listen to and address our community’s biggest concerns. Donors from all throughout the banking industry are helping us reach our goals for the benefit of our state’s banking institutions.
Want to learn more? Watch the official NCBANKPAC video! Use your phone to scan the QR code or find it on our website at www.ncbankers.org/government-relations/nc-bank-pac/
Carolina Banker | Spring 2018 9 UPCOMING EVENTS
January February
Economic Forecast Forum Delegate: Technology Seminar (KPN Consulting) Delegate: Sheraton Imperial in Durham $100 / $115 The Rural Center in Raleigh $250 / $300 The Economic Forecast Forum is a gathering of our state’s most Patron Sponsor: This seminar will be presented by KPN Consulting and will share powerful and influential leaders, and is sure to, once again, attract $1,250 / $1,350 with registrants how to understand and incorporate technology into a sold-out crowd. their bank to make their institution more profitable and efficient. BSA Seminar (Patti Blenden) Delegate: Midtown Hilton in Raleigh $375 / $425 This program is designed to enhance the skills of your BSA and AML support staff, your independent audit team, and any personnel responsible for managing and maintaining a strong BSA and AML program.
March April
Bank Directors Assembly Delegate: Commercial Lending School Delegate: Raleigh Crabtree Marriott $450 / $550 North Carolina Bankers Association $825 / $875 Bring your entire bank board to this conference to keep your Exhibitor: The School has been designed to prepare bankers to serve effectively Directors up-to-date with industry trends so that they can better $1,000 / $1,200 and profitably as commercial loan officers by developing a better perform their jobs and contribute to the success of the bank. comprehension of the economy and how it affects lending decisions. Washington Bank Caucus Delegate: Spring Compliance Update (Patti Blenden) Delegate: The Hay-Adams in Washington, D.C. $400 Greensboro-High Point Marriott $400 / $450 Informative meetings with members of Congress, leaders of the bank Spouse: This will be a two-day comprehensive update on all current regulatory agencies, and other important officials who impact our industry. $200 compliance issues in the banking industry.
CBS Benefits Day & HR Conference Both: American Mortgage Conference Delegate: Greensboro-High Point Airport Marriott $175 / $225 Pinehurst Resort $525 / $625 This program is a great opportunity for NCBA members to learn more CBS: This conference connects the leading experts in the financial services Exhibitor: about options available to their employees through our association and $50 / $75 industry, policy makers, investors and mortgage practitioners of every $1,100 / $1,250 to focus on HR management with their peers. We encourage attendees HR: kind to discuss important issues in the mortgage field. to take advantage of the full program at the discounted rate. $125 / $175 Call Report Seminar Delegate: Paragon Bank in Raleigh $250 / $300 This seminar is designed to explain the whys, wheres and hows of Call Report preparation, and is perfect for both the beginner and the experienced Call Report preparer. May June
Attorney Forum Delegate: nd Annual Convention Delegate: Sheraton Raleigh Hotel $325 / $375 The Cloister in Sea Island, GA $675 / $775 This forum will gather attorneys from all across the state to discuss Don’t miss this annual tradition to be held at the only resort in the Exhibitor: current trends and issues in the industry. world to receive the Forbes 5 star designation nine years in a row! $1,200 / $1,300
10 Carolina Banker | Spring 2018 As you begin to plan your budget and calendar for the year,upcoming the NCBA year, thoughtthe NCBA that thought it may that be helpful it may tobe provide helpful toa guide provide with a guidethe estimated with the costs and dates of our 2018 professional development opportunities and conferences. To learn more about specific events or available availablesponsorship sponsorship opportunities, opportunities, contact Blaircontact Jernigan Blair Jernigan at [email protected] at [email protected] or Brianna or Brianna Reeder Reeder at [email protected] at [email protected]. . July August
Certified Banking Security Delegate: nd Annual School of Banking Student: Manager Training(SBS Cybersecurity) $1,295 / $1,345 University of North Carolina at Chapel Hill $1,700 North Carolina Bankers Association The NC School of Banking is a four year management development After completing this program, attendees will understand how to program dedicated to expanding the skills and capabilities of successfully implement and manage each component of the middle level management and prospective managers. information security program, and their knowledge of layered security programs will be boosted.
September October
Fall Compliance Seminar (Patti Blenden) Delegate: Young Banker’s Conference Delegate:Delegate: TBD $375 / $425 Blockade Runner in Wrightsville Beach $525$250 / /$600 $300 This will be a two-day comprehensive update on all current compliance This annual conference will help to foster the professional issues in the banking industry. development of the emerging leaders in our industry! IRA Essentials Training & TBD Regulatory Compliance School Deposits: Advanced IRAs Training 15-18 North Carolina Bankers Association $450 / $500 North Carolina Bankers Association This event is designed to help financial institutions meet compliance Lending: These one-day programs can be registered for separately, together, or challenges by providing intensive training on the various regulatory $1,050 / $1,100 attached to the HSA Frontline Fundamentals courses. requirements. Attendees can choose to attend either the Deposits Both: Module, the Lending Module, or the entire program. $1,325 / $1375 Health Savings Account Training TBD Raleigh, NC Alumni Update Delegate: This is a half-day program that can be registered for separately, or can 17 Raleigh, NC $350/$400 be attached to the IRA Essentials and/or Advanced IRA Training courses. This event will be spent reviewing the updated manual and discussing recent developments and common problems. Full Program: 24-26 The State View Hotel, Raleigh $525 / $625 This conference is a fusion of our CFO Symposium, Management Team Tracked Option: Conference, Credit Conference and Security Summit. Registration for $400 / $500 your role specific track will be offered as well as a full forum registration Exhibitor: which will allow you to choose your path. $1,200 / $1,400
November On the Web
Internal Bank Audit Seminar Delegate: 11-14 Raleigh, NC $250 / $300 This one-day program will be filled with important and timely information. The NCBA has partnered with affiliate members and Total Training Solutions to provide an ongoing series of webinars
for our members that feature a wide array of topics. You can find the listings online by visiting www.ncbankers.org.
The NCBA welcomes the opportunity to partner with affiliate members on these convenient presentations. If you are an affiliate member and interested in this opportunity, please reach out to Brianna Reeder at [email protected].
*Please note that fees, dates and locations areCarolina subject to Banker change | prior Spring to registration.2018 11 LEGISLATIVE UPDATE
Registering a business, searching records, and making annual reports with the North Carolina Department of the Secretary of State is a straightforward process, but the same could not be said for registering an assumed business name at the local level. There are a
Nathan Batts variety of reasons for operating a business under a name other than the legal name registered Senior VP & Counsel, NCBA with the Secretary of State or with another regulator, as in the case of a bank. Until recently, Phone: (919)-781-7979 assumed business name filings needed to be made with the register of deeds in each county Email: [email protected] in the state in which the business operated under an assumed name. Similarly, the searching process had to be done at the county level. This had implications for banks that may operate various lines of business under other names and when attempting to comply with customer identification procedures for “Doing Business As” (DBA) customers. In 2016 and 2017, the General Assembly greatly improved the process for filing assumed business names. The changes, which are codified in Article 14A of Chapter 66 of the NC General Statutes, went into effect beginning December 1, 2017, and make it much easier to both register assumed business names and to search for them through a central database administered by the Secretary of State. Banks should begin to take advantage of these new tools and updated forms while also being aware of a deadline that will impact previously filed assumed business names by banks and their customers.
New Procedure Filers have the option as part of a new form Filers need to pick a county in which they do to have the assumed names registered in a business to file with the local register of deeds publicly accessible computer system for their assumed business names. The procedures additional counties, or potentially apply to any business operating under an statewide, in all 100 counties. assumed name, including sole proprietorships, partnerships, LLCs, corporations, and trusts. Filers have the option as part of a new form to have the assumed names registered in a publicly accessible computer system for additional counties, or potentially statewide, in all 100 counties. The filing fee is the same if you name one county or all 100 NC counties on your assumed business name certificate. This process of dealing with just one county office and having just one fee will save both time and money.
12 Carolina Banker | Spring 2018 Duplicate names are permitted as the filings do not by themselves bestow trademark or similar protections. However, filers should still be cautious and consult with an attorney when choosing an assumed business name that is already in use. For convenience, you can register up to five assumed business names using the same form. No later than 30 days after the date a certificate is filed, a register of deeds must transmit an image of the certificate and information on the filer to the Secretary of State so that it can be added to the searchable statewide database. The date that the information is sent to the Secretary of State does not affect the filings’ effective date, which is timed to when the filing is made at the register of deeds’ office or the date shown on the face of the filing. Filings remain in effect until withdrawn. The statutes require filers to update their assumed business name filings within 60 days after a change in any of the information required in the assumed business name certificate.
Transition Period, Search Process, and Retrieval of the New Forms and Records Importantly, filings under the prior law will expire December 1, 2022. Thus, there will be a period of years when dealing with bank customers when you may see documents that were filed under both the old and the new law. Any certified copies of assumed business name filings should be obtained from the register of deeds’ office where the
Carolina Banker | Spring 2018 13 LEGISLATIVE UPDATE
information was filed. Although the Secretary of State’s The new forms are available from the website for the office compiles information, it is not considered the Economic Development Partnership of North Carolina official source. (EDPNC), the nonprofit public-private partnership Existing assumed business names filed under the created by the state and under contract with the North old law will not show up in the system until a new Carolina Department of Commerce to promote job filing is made, but all new entries going forward are creation and investment. There is also a link from an searchable from the Secretary of State’s website (www. information page on the Secretary of State’s website to sosnc.gov). Currently, you can choose the “Divisions” the new forms and to frequently asked questions (FAQs). heading and then below the subheading for “Business The new forms do not require the use of a notary. Registration” you will see an option for “Search for a Business.” The search option defaults to searching by Final Comments “Company” but there is a drop-down option to change You may wonder why filers cannot simply go directly to this to “Assumed Business Names.” If you need to find the Secretary of State to make this filing. The General filings that predate December 1, 2017, you will need Statutes Commission, which is comprised predominantly to search in the appropriate county register of deed’s of law professors and is empowered by statute to develop office for that information. modern codes of law for possible bill introduction at the legislature, considered such an approach. However, in view of the perceived convenience for local businesses and the historical role of registers of deeds in handling such filings, they decided to pursue the approach that was enacted into law. Please use the resources below for more information. If reviewing the statutes directly from the General Assembly website, please be cautious as the version online is incomplete as of the writing of this article and has not been corrected yet to reflect changes to the effective dates and expiration dates that were made as part of legislation during the 2017 Session.
RESOURCES
Business forms from the Economic Development Partnership of N.C.: https://edpnc.com/start-or-grow-a-business/start-a-business/ business-forms
Information, including FAQs, from the Secretary of State: https://www.sosnc.gov/divisions/business_registration/ assumed_business_names
Copy of the new law (new Article 14A of Chapter 66 of the N.C. General Statutes) as further amended by Session Law 2017-23: https://www.sosnc.gov/documents/forms/Business_Registration/ Assumed_Name/article_14a_corrected.pdf
14 Carolina Banker | Spring 2018 New look. New name. Same commitment.
Community Investment Corporation of the Carolinas is now Centrant Community Capital.
.WZUWZM\PIVIY]IZ\MZKMV\]Za_MPI^MWXMZI\MLI[IXIZ\VMZ[PQXWN ÅVIVKQIT QV[\Q\]\QWV[TM^MZIOQVO\PMZM[W]ZKM[WN \PMJIVSQVOQVL][\Za\WÅVIVKM\PMKZMI\QWV WZLIJTMPW][QVO;QVKM!!_PMV_M[MZ^MLR][\WVM[\I\MٺIVLXZM[MZ^I\QWVWN I W]ZTMOIKaIVLZMIKPI[IUQ[[QWVLZQ^MVTMVLMZPI[M`XIVLML[\MILQTa It’s time for our name to match our vision. www.centrant.org Carolina Banker | Spring 2018 15 CENTRANT After nearly a year of reflection, interviews with member banks and borrowers, and planning for David Bennett our future, the Board of Directors and staff of Community Investment Corporation of the Carolinas Executive VP, Centrant Phone: (919) 781-7979 are excited to announce that we have adopted a new name: Centrant Community Capital. Email: [email protected] Giving up the familiarity and comfort of a well-known brand is not easy. We have been associated with the “CIC” acronym – first as Community Investment Corporation of North Carolina (CICNC), and most recently as Community Investment Corporation of the Carolinas (CICCAR) – for more than a quarter-century. In fact, despite that name change over a decade ago, we still hear the occasional reference to us as CICNC. Needless to say, this decision was not taken lightly. However, for a number of reasons, we felt that we had finally outgrown our name and that the time was right for a more significant rebranding effort. NEW NAME, NEW LOOK, SAME COMMITMENT Expanding our Reach First and foremost, our geographic footprint has expanded substantially since 1990. We were created as a consortium of NCBA member banks, offering specialized loans in response to the shortage of quality affordable housing in North Carolina. This arrangement worked well, as the majority of our members were local community and savings banks whose operations and Community Reinvestment Act (CRA) needs were similarly focused on our home state. 16 Carolina Banker | Spring 2018 Over the years, our member banks and borrowers evolved, and so did we. Through growth, mergers or acquisitions, many of our bank partners found themselves with a need for CRA credit across much larger, often multi-state, operating areas. Our developers also began asking if we could assist them with their out-of-state properties. When we 2008 offered our first loans in Virginia and South 1990 Carolina, a slight change in our name from CICNC 2012 2005 to CICCAR made perfect sense. It continued to 2012 capture our history and our purpose, while clearly 2018 embracing a slightly larger operating footprint. Approximately five years ago, recognizing that there were no similar consortium-based lending programs in Tennessee or Georgia, the board approved a second expansion effort. This time, the GROWTH SINCE INCEPTION reception we received was slightly different. Despite our commitment to expansion in those neighboring states, a name that identified us as “of the Carolinas” Embracing our Role seemed limited. Prospective member banks and The decision to rebrand as Centrant Community developers with no ties to our legacy footprint did Capital was not limited to geographic considerations, not identify with us, and felt less incentive to work however. As part of our rebranding process, we with us. Despite this challenge, we have made sought input from the groups that know us best: impressive inroads into both states, and see great our member banks, our borrowers, and other opportunity for future growth. constituents in the affordable housing industry Today, the reach and impact of our lending who are familiar with our program. Their feedback program extends across the Southeast. In fact, we was extremely valuable, because it helped us to will begin offering our unique loan program in crystallize our mission, our vision, and our role Texas this year – a state that offers us, in in community development lending. partnership with the Texas banking community, Recurring themes in their responses described a tremendous opportunity to help address the CICCAR as “a critical lending resource,” “a trusted demand for affordable housing in the Lone Star partner we can count on,” and “squarely in the center” state. While working on plans for this next of affordable housing finance. As we considered these expansion, it became clear that we needed to adopt comments, our role became clear: we are a point of a less geographically defined identity. connection between our member banks, our borrowers Carolina Banker | Spring 2018 17 CENTRANT and local communities. We play a central role in We believe that society is strengthened through gathering and distributing vitally important lending creative partnerships and strategic investments that capital to finance affordable housing. promote stability, dignity and opportunity for When we researched “Centrant” as a possible citizens. We strive to offer products and services option, we discovered that it is a French word that consistently meet the needs of our borrowers, often used in the context of “centering” or provide a range of tangible and intangible benefits “focusing.” In combination with our desire to to our member banks, and enhance the communities emphasize our role as a source of community that we serve together. capital, the term captured everything we wanted These statements may not have been as clearly to represent about our organization. In short, we articulated in the past, but they are the same knew that we had found our new name. principles that have guided us since our founding in 1990. Our people and our processes that have Our Mission and Vision defined our organization remain the same, as The rebranding process was also an ideal opportunity does our dedication to serving the banks and to define and adopt new guiding principles in the borrowers who trust, support and rely upon us. form of a mission and vision statement. And so, I welcome you to Centrant Community The mission of Centrant Community Capital is Capital – a brand-new entity with a long-standing to leverage the resources of the banking industry to history of mission-driven lending that you already finance the creation and preservation of quality know quite well. We look forward to working affordable housing in a safe, profitable manner. with you soon! We believe that society is strengthened through creative partnerships and strategic investments that promote stability, dignity and opportunity for citizens. 18 Carolina Banker | Spring 2018 RECENT LOAN CLOSINGS Loan 423344: Wilkes Towers Apartments, Wilkesboro, NC ...... closed on 12/1/2017 for $1,065,000 Loan 367345: Arbor Glen Apartments, Lenoir, NC ...... closed on 12/15/2017 for $300,000 Loan 395347: Abernathy Place Apartments, Columbia, SC ...... closed on 12/19/2017 for $1,900,000 Loan 379343: Lochstone Apartments, Goldsboro, NC ...... closed on 12/20/2017 for $1,720,000 Loan 390348: Foxworth Forest Apartments, Newnan, GA ...... closed on 1/4/2018 for $1,810,478 Loan 401350: Mason Manor Apartments, Boiling Springs, SC .... closed on 12/29/2017 for $1,404,000 Abernathy Place Apartments, Columbia, SC Lochstone Apartments, Goldsboro, NC Kevin Connelly of Connelly Development was the Frankie Pendergraph of Pendergraph Development developer/sponsor of Abernathy Place Apartments. was the developer/sponsor of Lochstone Apartments. The development provides 64 units affordable to The development provides 84 units affordable to fam- families earning 50%/60% or less of the area ilies earning 40%/50%/60% or less of the area median median income. This development received income. This development received a state tax credit $7,715,689 in proceeds from the sale of federal loan for $2,093,361, and approximately $6,031,797 in tax credits. proceeds from the sale of federal tax credits. Abernathy Place Apartments Lochstone Apartments Carolina Banker | Spring 2018 19 NORTH CAROLINA YOUNG BANKERS Meredith Begley Corporate Secretary & Treasurer, Black Mountain Savings Bank Chairman, NCYB Advisory Council Phone: (828) 669-7991 Email: [email protected] The North Carolina Young Banker Advisory Council As a Young Banker, why should I join the North Carolina Young Bankers (NCYB)? If you are a Young Banker in NC, I would encourage you to work with your banking peers to help carry out the NCYB’s mission to: 1) promote financial literacy for North Carolina’s youth, 2) encourage awareness and active engagement in the industry, and 3) foster professional development and provide leadership opportunities for our members. Engaged members have discovered that service to the industry through this mission has not only improved their professional skills and reflected favorably on their banks within the community, but it has personally awarded them with a renewed sense of pride and fulfillment in their career choice. The first pillar of our mission is realized through the financially, as well as with donations of supplies, and their Bankers In Schools initiative and Camp Challenge. time by volunteering during one of the financial literacy Bankers In Schools equips Young Bankers with lesson classes from Junior Achievement’s Economics for Success plans and a brief training course to teach a 45 minute curriculum. The curriculum provides a lesson and real class on financial literacy to middle and high school aged world application of the material to middle school-aged students. The program is designed to strategically match campers. For example, a lesson on personal finance and volunteers with schools in their local communities. Since budgeting assigns campers with a job and designates their its initial run in November 2016, Bankers In Schools has earnings. Then, each camper learns first-hand to prioritize reached nearly 1,000 students. In November 2017, this his/her spending, differentiating between a “want” and a week long event enabled 20 Young Bankers to visit 25 “need.” In 2017, the NCBA sponsored over 220 campers. classrooms at 15 different schools throughout the state. Camp Challenge will celebrate its 25th anniversary in 2018. The next Bankers In Schools event will be hosted in In March 2017, for the first time collectively, the November 2018. NCYB were visible on Capitol Hill. This event was held In addition to Bankers In Schools, Young Bankers in conjunction with the American Bankers Association’s participate in Camp Challenge. Camp Challenge is a week Government Relations Summit in Washington, DC. The long summer camp that provides high-achieving children, Summit included several high-profile representatives and without the financial resources to attend camp on their federal financial regulators speaking on the topic of own, with a real summer camp experience at Camp Weaver regulatory relief. Young Bankers were given the in Greensboro, NC. Young Bankers support this initiative opportunity to meet representatives face-to-face and 20 Carolina Banker | Spring 2018 express how the current banking regulations have from this past year’s conference included: Jennifer Pharr impacted bankers’ ability to serve their customers and Davis applying her hiking tips to business, leadership communities; an important step in learning to advocate lessons through a CEO panel, and renowned business for the financial industry—our second mission. NCYB growth speaker Meridith Elliott Powell leading two and their NCBA delegation met with House Financial sessions on networking like a pro and tips for success. Services Committee members Congressman Robert NCBA President & CEO, Peter Gwaltney, spoke on Pittenger and Congressman Ted Budd, as well as government relations and how Young Bankers can get Congressman Mark Meadows. In April 2018, the NCBA involved in the advocacy effort. All sessions of the will take a larger delegation of the NCYB Advisory conference were specifically designed to adhere to the Council to Washington, DC with hopes of extending third pillar of the mission statement—fostering this to the general membership in coming years. professional development and providing leadership The second Annual Conference of the NCYB was opportunities. From the mountains to the ocean, mark held in September 2017 in Asheville with a “mountains” your calendars for the Young Bankers’ coastal conference theme. Attendance remained strong with just under at the Blockade Runner Resort in Wrightsville Beach 100 attendees from approximately 30 banks. Highlights to be held October 21-23, 2018. As a bank manager, why should I support my employees’ participation in Young Bankers? The NCYB is the premier organization that develops and engages emerging bank leaders while strengthening our community—the organization’s vision statement, achieved through the missions listed above and a wealth of opportunities available for our members to participate in throughout the state. As a bank manager, supporting NCYB is an investment in your employees; an investment that pays dividends to your staff, customers and communities. In December 2015, the NCBA addressed the regional networking events during 2017, including a growing need in the state’s banking industry to first-hand experience on the ropes course at Camp Weaver identify and nurture the next generation of NC where Camp Challenge is hosted, and after hours bankers, starting with a slate of 12 NCYB Advisory networking events with speakers relative to leadership Council Members. The NCYB celebrated its second and professional development. In 2018, the Advisory anniversary this past December with over 375 Council will continue to host regional events in connection members. Currently, the NCYB is the newest with Advisory Council meetings to increase Young organization for young banking professionals and Bankers’ interaction with members of the leadership boasts the second largest membership. As of November team. All Young Bankers are invited to attend any of 2017, 66 percent of the NCBA’s member banks are these networking events throughout the state. represented with NCYB members. Full details of events are covered in the Young Additional opportunities for engagement include the Bankers’ newsletter, received by nearly 400 bankers each NC School of Banking, regional events, and a digital month. These newsletters include economic updates, monthly newsletter. In August 2017, the NC School of articles on current banking trends, and ways to get Banking graduated over 25 Young Bankers from involved with Young Bankers; as well as links to each of approximately 22 banks. The NCYB hosted several the NCYB’s social media platforms. One might ask why Young Bankers? Why not! North Carolina’s seasoned bankers are leaving large footprints for their younger colleagues to step into; as an association, we must provide our Young Bankers with the resources, tools and relationships to succeed. The NCYB are the new faces of “proud NC Bankers!” Carolina Banker | Spring 2018 21 Getting the Answers You Need From Your Current Payroll Provider? Find superior customer service at CBIZ Flex-Pay. We’ll work to improve your payroll services and eliminate frustrations. Call us today to see how we can save you time and money. CBIZ Flex-Pay An affordable payroll solution with unmatched customer attention. 800.457.2143 | 336.245.2261 | www.cbizfl ex-pay.com Sherry Burick, Area Sales Director | sherry.burick@cbizfl ex-pay.com © Copyright 2016. CBIZ, Inc. NYSE Listed: CBZ. All rights reserved. 22 Carolina Banker | Spring 2018 "Almost every adult has three loans at some point "Spending one 45 minute lesson at Camp Challenge in their life – student loans, a car payment, and a completely changed our perspective. It opened mortgage, yet I recall having just a single week's our eyes to the lack of financial literacy throughout lesson in high school on interest/loans. This is why the state. We support Camp Challenge by being Camp Challenge is an amazing program. The an advocate, donor, and volunteer. It’s a life children walk away at the end of camp understanding changing experience that every Banker in our state more about finances than I did at their age." should have at least once!" - Shannon Sutton - Kristen Brabble Kristen Brabble, Ron Day & Shannon Sutton First Carolina Bank Blaine Wiles Director of Community Outreach, NCBA Phone: (919) 781-7979 Fax: (919) 881-9909 Email: [email protected] Carolina Banker | Spring 2018 23 CAMP CHALLENGE CAMP CHALLENGE In 2018, Camp Challenge will officially be celebrating its 25th Anniversary! Established in 1993 and hosted at YMCA Camp Weaver in Greensboro, NC, Camp Challenge is a week-long summer camp experience for high- achieving, low-resource students from all across North Carolina. Each year, hundreds of students attend Camp Challenge at no cost to their families, thanks to donations from our many generous partners. Most of these students Blaine Wiles have never had an opportunity to attend any sort of summer camp before, Director of Community Outreach, NCBA and many have never been outside of their home counties. This is truly a Do you have questions about once in a lifetime experience for them. how you can get involved with While at Camp Challenge, students participate in a variety of traditional Camp Challenge or other summer camp activities, such as archery, swimming, ropes courses, and community outreach and kayaking. There are even many exciting non-traditional activities that financial literacy projects? If so, please get in contact with students can be a part of, like outdoor cooking, skateboarding, paintball, Blaine Wiles by phone at and digital media! Additionally, every student who attends Camp Challenge (919) 781-7979 or email at participates in an engaging personal finance class, led by volunteers from [email protected]. the banking community each day. Campers learn about transactions, 24 Carolina Banker | Spring 2018 budgeting, entrepreneurship, income and careers, and even financing education, all while making lasting friendships and gaining self-confidence. The lifelong skills taught at Camp Challenge are an important piece of the NCBA Foundation’s Financial Literacy mission. We are calling on your help to make this the best summer yet for as many deserving young people as possible. To date, Camp Challenge has served over 10,000 of North Carolina’s brightest middle school students, with success stories aplenty. The price to sponsor one student to attend Camp Challenge for a week is $700, although we are accepting and greatly appreciate contributions at all levels. Additionally, we hope to have as many volunteers visit Camp Challenge as possible to meet with our amazing students! Classes run from 9:00am – 12:00pm daily in June & July, and volunteers are invited to stay to enjoy lunch with the campers afterwards. Please consider giving back to North Carolina’s youth by participating in some way with Camp Challenge in 2018, and together, let’s make the 25th year the best one yet! Carolina Banker | Spring 2018 25 ROBBERY REWARD PROGRAM Keep your bank protected. Since 1977, the North Carolina Bankers Association has provided a reward for information leading Crime doesn’t pay, to the arrest and indictment of anyone who robs a North Carolina branch of a member bank or but reporting it can. savings institution. When a robbery occurs, the Association should be notified as soon as possible so that information about the program can be sent out to all local media outlets before coverage begins. If your bank has been robbed, If you have any questions about the Robbery Reward Program, please please call the NCBA as soon as possible: call the NCBA or visit online: 1-800-662-7044 1-800-662-7044 www.ncbankers.org www.AnovaFinancial.com Community Banking Solutions NCBA endorsed since 2004 AnovaCore® provides flexible, innovative solutions tailor-made for the way community banks do business. When banks need an alternative source of funds to meet growing loan demand, AnovaCore provides a source of secure wholesale funds. The ANOVA program is specifically designed to meet community bank funds management needs, providing banks access to readily available, wholesale or reciprocal deposit funding on a day to day basis. In times of excess liquidity banks can also utilize ANOVA’s Treasury Service, AnovaFunds®, as an alternative high yielding liquid deposit product that provides the security of being fully FDIC Insured. x Wholesale Funding— low-cost alternative funding without collateral or credit limits. x Treasury Services — providing banks with excess liquidity a high yielding FDIC-insured alternative to Fed Funds. x Reciprocal Deposits — provide your depositors excess FDIC Insurance coverage up to $30 million per account. x Public Funds Program — since 2003 ANOVA has provided NC banks and NC local governments a fully FDIC Insured public funds program with no collateral requirements. x Referral Program—earn fee income on referral deposits. FDIC Insured—”Backed by the Full Faith & Credit of the U.S. Government”. For more information—visit us on-line at www.AnovaFinancial.com or call us at 888-266-8293 (1-888-ANOVA-YES). 26 Carolina Banker | Spring 2018 COMMUNITY BANK SERVICES CBS Endorsed Vendors Provide NCBA Members Savings, Service & Quality Look for the Seal, Trust the Product EMPLOYEE BENEFITS • Group disability, long-term, short-term ....UNUM, Standard, Lincoln Financial, Sun Life, Guardian, OneAmerica, Dearborn National • Group Medical ...... 1&%$+HDOWK%HQH¿W7UXVW • Group Dental ...... Delta Dental • Group Life/Supplemental Life ...... 7KH6WDQGDUG • Vision ...... 6XSHULRU9LVLRQ • Accidental Death and Dismemberment ...... 7KH6WDQGDUG • Voluntary Critical Illness & Cancer ...... Colonial • Voluntary Universal Life ...... Colonial • Voluntary Accident ...... Colonial ENDORSED VENDORS SECURITIES BANK OWNED LIFE INSURANCE PAYROLL ,&%$6HFXULWLHV 3HQWHJUD5HWLUHPHQW6HUYLFHV CBIZ Flex-Pay Jim Reber, (800) 422-6442 Fabrizio D’Uva, (914) 607-6855 Sherry Burrick, (336) 462-7838 MERCHANT PROCESSING CRA CREDIT RETAIL FLOOD DETERMINATIONS 76<6 BUSINESS DEVELOPMENT FZDS 'RQQD%XUQV &5$3DUWQHUV 7HUL6L]HPRUH 6XH6KD൵HU FINANCIAL DATA & INTELLIGENCE COURTHOUSE RETRIEVAL SYSTEM & RETIREMENT PLANS S&P Global Market Intelligence COMPREHENSIVE PROPERTY TAX DATA 3HQWHJUD5HWLUHPHQW6HUYLFHV Colin Wyatt, (434) 817-5475 CRS Data Wade Connor, (704) 608-4563 Alwyn Staley, (800) 374-7488 x 150 ELECTRONIC LIEN AND TITLE (ELT) FUNDING SOLUTIONS BANK CYBER SECURITY CONSULTING 'HFLVLRQ'\QDPLFV,QF ANOVA Financial Corporation SBS CyberSecurity $PDQGD-HQVHQ Derek Blair, (888) 266-8293 $OH[LV*DPHZHOO TAX EXEMPT LOANS BANK BONDS, D&O AND COMPANY STORES, COMMERCIAL FOR MANUFACTURING P&C PRODUCTS PRINTING, PROMOTIONAL Manufacturing Economic Development Financial PSI PRODUCTS, CORPORATE APPAREL )LQDQFLQJ$VVRFLDWHV 0(')$6 Brian Mobley, (615) 244-5100 & MARKETING SERVICES Sam Macrina (610) 763-2310 Regency360 &KULV+LFNPDQ SMALL BUSINESS INVESTMENT OFFICE PRODUCTS, COFFEE & BREAKROOM CAPTIVE INSURANCE COMPANIES FUND (SBIC) SERVICES, PRINTER SERVICES 2[IRUG5LVN0DQDJHPHQW*URXS )DUUDJXW&DSLWDO3DUWQHUV 5HJHQF\%XVLQHVV6ROXWLRQV David DiMayo, (410) 472-6490 3KLOLS$0F1HLOO &KULV+LFNPDQ ONLINE BANK ASSET FOR SALE DISCOUNT SHIPPING CHECK PRINTING 3URPRQWRU\,QWHU¿QDQFLDO1HWZRUN UPS Harland Clarke Danny Capitel, (866) 766-6426 Call CBS to Sign Up, (800) 662-7044 Carroll Lynn Ritchie, (704) 649-3124 REWARDS CHECKING & REVIEWING & RENEGOTIATING KASASA LOANS PROGRAM CHECK PRINTING CONTRACTS .DVDVD Fulcrum Ed Wolfe, (512) 349-44 5LFN%HDVOH\ For more information on CBS Employee Benefits, please contact Lauren Perry at [email protected]. For more information on the CBS Endorsed Vendor Program, please contact Janice Royster at [email protected] or Kim Hutchens at [email protected], or call CBS atCarolina (800) Banker662-7044. | Spring 2018 27 COMMUNITY BANK SERVVICES Your Community Bank Services (CBS) team at the North Carolina Bankers Association (NCBA) had a busy fall filled with meetings, discussions, and vetting of possible new vendors to join the ranks of our Kim Hutchens existing high-caliber endorsed vendors. It is our hope that our bankers, affiliate members and other friends Executive VP, CBS Phone: (919) 781-7979 of NCBA will take time to closely examine the vendors we endorse and introduce. Our main objective is Email: [email protected] always to find products, services and opportunities that will bring bottom line value to you. Fulcrum Group International KASASA www.thefulcrumgroupintl.com www.kasasa.com The Fulcrum Group is a privately owned corporation in the Kasasa is a financial technology and marketing technology business of reviewing, renegotiating and bidding check- provider. NCBA’s member banks will now have quick access printing relationships for financial institutions. Fulcrum to Kasasa’s innovative products, including its Rewards was established in 1999 and for the past 18 years has become Checking Accounts, Kasasa Loans and its latest marketing the gold standard for contingency based consulting operating automation platform, Connect. in the space of bank check-printing contracts. Kasasa is an innovative, data-driven technology provider Fulcrum interviews all relevant touch points the bank that has all of the characteristics we look for in a partner. has with the incumbent check supplier. The company will We’re excited about this new alliance and the fact that it assist the bank in examining all options of the check supplier’s will allow us to provide North Carolina banks with the contract; renewing, going to market for bids or renegotiating means to appeal to and engage prospective account holders the existing contract. Upon careful deliberation of all the on a highly competitive level. bank’s information, Fulcrum will provide a recommendation With its Rewards Checking Accounts, Kasasa enables for the bank that will allow the bank to maintain both the community banks to drive new account growth, encourage bank and the bank’s customers as the top priority. accountholder engagement and increase profitability. The Ted Amon and Rick Beasley are the principals at the company’s products are customized to meet each financial Fulcrum Group. Each spent 20 years in the business and institution’s business needs and objectives. Kasasa enables banks are intricately knowledgeable of the check printing businesses to stay competitive in the industry while also giving customers currently working the banks. Fulcrum currently has over the products they look for, such as higher interest rates on 60 clients and is also endorsed and working with the checking and savings accounts, cash back rewards, nationwide Pennsylvania Bankers Association. ATM fee refunds and more. Additionally, Kasasa’s premium, Watch the weekly Bulletin and other announcements free, rewards-based checking and savings accounts require no for the schedule of meetings to be set up around the state minimum balance or monthly service fees. They include Kasasa to introduce The Fulcrum Group. Cash®, Kasasa Cash Back®, Kasasa Tunes® and Kasasa Saver®. 28 Carolina Banker | Spring 2018 Today’s highly competitive environment has made it even more critical that community financial institutions leverage every advantage they have... Gabe Krajicek, CEO of Kasasa Introduced in September, The execute world-class marketing previously reserved for the nation’s Kasasa Loan is transforming the way campaigns to compete with megabanks largest banks - and we’ve proven the people think about borrowing money and their expansive marketing budgets. success of our approach and our and paying it back by introducing a The platform makes it simple for products. Kasasa accounts are 49 new concept called “take-backs.” It is financial institutions to engage existing percent longer-lived than average free the only loan that lets the borrower and new consumers with media checking accounts. We look forward pay ahead to reduce debt, but take that delivered through the channels most to our partnership with CBS and extra back if they need it, making it likely to be engaged with in their NCBA, and the advantages North the most people-friendly loan available market. Utilizing data and the improved Carolina banks will receive from it.” on the market today. Kasasa Loans efficiency of marketing technology to Kasasa is an award-winning provides Kasasa financial institutions reach consumers in a way they want to financial technology and marketing a way to compete on something other interact is critical for ensuring long- technology provider. Based in Austin, than interest rates. In fact, Kasasa term growth and profitability. Texas with 350 employees, Kasasa is Loans are preferred by nine out of ten “Today’s highly competitive committed to driving results for more consumers over comparably priced environment has made it even more than 700 community financial loans, and in extensive testing, 98 critical that community financial institutions by attracting, engaging, percent of consumers said they would institutions leverage every advantage and retaining consumers. Kasasa does refinance existing debt at the same they have,” said Gabe Krajicek, CEO this through branded retail products, rate in order to get a Kasasa Loan with of Kasasa. “Kasasa enables community world class marketing, and expert the take-back feature. banks to compete more aggressively, consulting. The company reinvented The "Connect" platform automates intelligently and strategically than checking, and is now reinventing results for community financial ever before, by harnessing product lending through its latest patent- institutions, enabling them to build and development and marketing scale pending offering, Kasasa LoansTM. Carolina Banker | Spring 2018 29 HEALTH BENEFITS TRUST Death is not a subject we like to think about, but it is a factor that must be considered Lauren Perry when planning for your family’s future. If you were to suddenly die, could your Vice President, CBS family live without your income? Would your family be able to cover the medical Phone: (919) 781-7979 expenses associated with a terminal illness or with burial and funeral expenses? Email: [email protected] You make a great investment in your family and if you are not there for them, you want them protected. Life insurance is a critical component of financial planning and must be carefully selected to cover your specific obligations and meet the needs of your family. It can be difficult to determine the appropriate amount of life insurance coverage. Each family has its own unique set of circumstances, combined with the needs that may arise with the unexpected loss of life. You should consider immediate needs such as funeral/burial expenses, taxes, and medical expenses along with long-term needs such as mortgage, childcare expenses, educational funds and the amount of income replacement to support your family. Additional resources available upon death, such as 401(k), stocks, annuities and other assets should also be considered in this calculation. There are several types of life insurance, with term insurance being one of the most common. As the name indicates, the policy is in force for a fixed number of years and the premiums never change during the “term” of the policy, which is typically 10, 15, 20, 25 or 30 years. The coverage amount also never changes for the duration of the policy which makes it an easy way to help reduce financial risk for a family with a mortgage and/or children still in school. Term insurance can be purchased as an individual or through a group. Group insurance is often arranged by employers, associations, unions or other large groups who offer health and/or life insurance to their employees. The employer or association is the policy sponsor and the insured people are customers or members. When you obtain term insurance through a group policy, the term is no longer a fixed number of years. Instead, the term is tied to your relationship with the sponsor, which has benefits and disadvantages. 30 Carolina Banker | Spring 2018 IS GROSS TERM LIFE INSURANCE RIGHT FOR YOU? BENEFITS DISADVANTAGES • GTL is a simple way to protect your family in • With a group term life insurance policy, you have the event of your death as the policy sponsor no choice of carrier. Generally, this is not an issue, pre-arranges the rate, coverage limits, and but it is something to be aware of, especially if you available terms. want to diversify your insurance coverage. • Employers often provide a benefit amount based • The policy is term, not universal or whole life; upon an increment of annual earnings and, in the therefore, the policy can expire before you do majority of cases, there is no medical exam for the (i.e. upon termination of employment). If you employer provided coverage. do not have other insurance or do not port or • Employees are permitted to purchase additional convert your term coverage, it can leave those term coverage for a low group rate and carriers use who depend on you vulnerable. a health questionnaire instead of a physical exam • Portability and conversion rates may be higher for amounts that are not guaranteed issue. and the amount of coverage may be limited. • If you have health issues, it’s possible that a group term life insurance policy can give you the coverage you might have trouble getting as an individual and the health screening process will be less time-consuming. • There are often options to purchase coverage on spouses and dependent children without medical underwriting. • Many plans offer an accelerated benefit provision if you become terminally ill and waiver of premium if you are disabled. • Coverage may be portable; however, individuals exercising their right to port coverage to a group life plan will have to answer medical questions. • Coverage may be eligible for conversion without medical questions, but this privilege comes with a significantly higher rate and limitations. Group term life insurance is an excellent way to reduce your financial risk. When purchasing insurance, it is important to identify the amount of coverage needed and is advisable to make term insurance part of your plan, not all of it. With proper planning and diversification, your mind will be at ease knowing your family is protected. Carolina Banker | Spring 2018 31 ECONOMIC FORECAST FORUM On January 3, the North Carolina Bankers Association and the North Carolina Chamber cohosted the 16th annual Economic Forecast Forum, a gathering of our state's most powerful and influential leaders, to discuss how the state can become a leader in job retention, job creation and quality of life. Attendees had the opportunity to listen to some of our state's most intelligent economists' ideas about the years ahead. 1 2 3 1. Business leaders from a wide variety of industries enjoy the light banter between the economists participating on the Economic panel. 2. During the preliminary session a panel of experts discussed luring and landing big companies that could bring thousands of jobs to North Carolina. From left to right: Tim Boyum, (moderator) Capital Tonight Anchor, Spectrum News; Andy White, CEO, Trillant; Susan Springfield, Executive VP and Chief Credit Officer, First Tennessee Bank; and Chris Chung, CEO, Economic Development Partnership of NC. 3. On the main stage, the economic forecast was provided by a panel of economist. (left to right) Tim Boyum, (moderator) Capital Tonight Anchor, Spectrum News; Mark Vitner, Managing Director and Senior Economist, Wells Fargo; Dr. Harry Davis, NCBA Economist and Professor of Finance, Appalachian State University; Dr. Mike Walden, William Neal Reynolds Distinguished Professor, North Carolina State University; and Dr. John Connaughton, Barings Professor of Financial Economics, University of North Carolina - Charlotte. 32 CarolinaCarolina BankerBankker | SpringSpringng 2022018018 THANK YOU TO OUR SPONSORS --PRESENTING SPONSOR-- 64 5 --CO-SPONSORS-- 6 7 --PRELIMINARY SESSION-- --GOLD SPONSORS-- 9 --SILVER SPONSORS-- BANK OF AMERICA COASTAL FEDERAL CREDIT UNION ELECTRICITIES OF NORTH CAROLINA MEDICAL MUTUAL HOLDINGS NORTH CAROLINA ELECTRIC COOPERATIVES SUNTRUST BANK --PATRON SPONSORS-- 8 9 CRESCOM BANK ELLIS WINTERS ESSENT GUARANTY FIDELITY BANK FIRST BANK FIRST NATIONAL BANK FIFTH THIRD BANK HOMETRUST BANK KILPATRICK TOWNSEND & STOCKTON KS BANK M&F BANK 4. Presenting sponsors, First Tennessee Bank and Capital Bank, welcomed attendees with a personalized message. O’BRIEN ATKINS NORTH CAROLINA RAILROAD COMPANY 5. As tradition, the ballroom at the Sheraton Imperial was packed to capacity. NORTH STATE BANK 6. Mark Vitner, Wells Fargo, and Dr. Harry Davis, providing insight to attendees on what to expect in the coming year. PARAGON BANK PINNACLE FINANCIAL PARTNERS 7. Bryan Jordan, Chairman, President and CEO, First Horizon National Corporation, parent of First Tennessee Bank SELECT BANK & TRUST and Capital Bank, provided the keynote address. SMALL BUSINESS & TECHNOLOGY DEVELOPMENT CENTER 8. One of the biggest attractions of the Forum is the opportunity to network with business leaders from across the state. SOUTHERN BANK & TRUST 9. As presenting sponsor, First Horizon National Corp. was well represented at the Forum. Colleagues Mark Hopler, UNC-WILMINGTON Kim Ellis, Jay Prosch, and Mike Foster gathered for a group photo. WYRICK ROBBINS YATES & PONTON FEATURED CONTENT While new federal debt collection rules may be on the horizon for 2018, banks’ debt Caren Enloe collection efforts already are regulated by North Carolina’s Debt Collection Act Partner, Smith Debnam (the “NCDCA”). Violations can result in civil penalties, actual damages, and Phone: (919) 250-2125 attorney’s fees. Adherence to the guidelines that follow can help you avoid these Email: [email protected] frequent traps arising from the NCDCA. Determine at the loan Prevent improper third party communications. As a general application stage whether the rule, the NCDCA prohibits disclosure of the debt to third parties. loan is for a ‘consumer’ or There are some limited exceptions and all personnel involved ‘commercial’ purpose and in debt collection should be trained to recognize those exceptions 1properly designate it. For instance, if 2and obtain the appropriate consents. In a nutshell, the NCDCA: commercial, title your documents “Commercial Loan” or “Personal • Allows banks to discuss debt with the consumer, his attorney or spouse; Guaranty of Commercial Loan,” and add • Allows communications to other designated third parties so long as language in the documents confirming the debtor or his attorney has provided written permission; the commercial nature of the obligation. The NCDCA governs the collection of • Allows banks to communicate information regarding the debt to third consumer debt, one that is incurred by parties employed by the bank to collect the debt (for instance, collection an individual for personal, family, agencies and attorneys) and to consumer reporting agencies; and household or agricultural purposes. • Allows banks to communicate with the parent or guardian of the Consumer debts include mortgages, debtor so long as the debtor is a minor and lives in the same household. revolving credit, car loans, and agricultural loans. Policies should be in The NCDCA, however, prohibits communication with the consumer (except place that identify and document the for sending statements of account) where the bank has been notified the purpose of each extension of credit made. consumer has counsel. See N.C.G.S. §75-55. Employ proper skip tracing procedures. The NCDCA allows Make required disclosures. banks to communicate with third parties for the limited Carefully review the contents of purpose of determining the consumer’s location, but places debt collection communications, very specific limitations on the content and frequency of such both scripts and letters. The 3communications. See N.C.G.S. §75-53(d). Policies and procedures should 4NCDCA requires that banks disclose in be in place that provide scripts as to location inquiries and appropriately all communications with the consumer limit the frequency of such communications. Policies and procedures that the purpose of the communication should also clearly prohibit any statement to a third party that would is to collect a debt and the identity of the suggest the consumer owes a debt. bank. See N.C.G.S. 75-54. 34 Carolina Banker | Spring 2018 Review and test written Be careful when contacting consumers at their place of communications and scripts to employment. Under the NCDCA, contacting or attempting to ensure the bank’s intentions as contact a consumer, contrary to his instructions, at his place of to next steps, legal remedies, employment violates the NCDCA unless the bank does not have 5credit reporting, etc. are accurately 6a telephone number where the consumer can be reached during the consumer’s represented. The NCDCA prohibits nonworking hours. See N.C.G.S. §75-52. Contacting consumers at their deceptive representations, including threats place of employment also exposes the bank to potential liability for improper of legal action where none is intended. third party contact if the existence of the debt is disclosed to the employer. Banks should review their communications to ensure that representations as to intended Avoid excessive calls. Clear policies should be in place to actions are, in fact, lawful and intended. address the frequency and timing of calls and set maximum Equally important, to ensure their number of calls within certain time periods – for instance, historical accuracy, communications should per day and per week. The NCDCA prohibits conduct that be periodically tested against the historical 7would “oppress, harass, or abuse” any person and includes in its non- actions taken by the bank. exclusive list, excessive calls. Carolina Banker | Spring 2018 35 FEATURED CONTENT Leaving messages can be risky. Be careful with time barred debt. The NCDCA has As a reminder, the NCDCA several rules in place that make the navigation of time generally prohibits communicating barred debt a tricky subject. The NCDCA specifically the debt to third parties. Telephone prohibits banks from seeking or obtaining a written 8messages, emails, and texts provide the risk 9statement or acknowledgement affirming a debt from a bankruptcy of inadvertent disclosure to third parties. consumer. They also prohibit a bank from seeking the Policies and procedures should be in place acknowledgement of a time-barred debt or a waiver of the consumer's that consider: legal right without the disclosure of the nature and consequences of these, along with the fact that the consumer is not legally 1.) all possible risks, obligated to provide it. See N.C.G.S. §75-55. 2.) the potential to minimize risk This, coupled with a trend by regulators and courts to preclude through consent by the debtor, and the collection of time-barred debts without disclosure of the time- barred nature, and the inability to legally enforce these debts, should 3.) the content of any messages. be considered in establishing policy and procedure regarding collection. Even though the NCDCA is largely consistent with federal laws, to the extent banks engage in internal collection efforts, compliance and recovery personnel should be familiar with the NCDCA's prohibitions and construct a compliance management program that ensures the bank complies with the Act. A robust compliance management program, at a minimum, will: • Provide for training of collection personnel; • Adequately monitor debt collection activities; and • Include written policies and procedures concerning • Provide for corrective actions and adjustments as debt collection activities and communications; necessary. FORGING CONNECTIONS AmAmerirican Mortortgage ConferenceConference The American Mortgage Conference connects the leading experts in the financial services industry, policy makers, investors, and mortgage practitioners of every kind to discuss important issues in the mortgage field. t*OEVTUSZ&DPOPNJD'PSFDBTUTt3FHVMBUPSZ-BOETDBQFt3FQ8BSSBOU3FMJFGt-FWFSBHJOH5FDIOPMPHZUP(SPX4BMFTt$PNQMJBODF5FDIOPMPHZ$IBMMFOHFT THE36 Carolina PINEHURST Banker | Spring 2018 RESORT • APRIL 30 - MAY 2, 2018 Unlocking opportunities in payments Looking for payment solutions to meet your customers’ needs and drive revenue? TSYS® provides full-service, MERCHANT secure and innovative solutions for your customers SERVICES to grow their businesses. From merchant services that include EMV®, e-commerce and mobile payments, to card issuing and prepaid card solutions for payroll and CARD ISSUING incentives — TSYS has a program to fit the specific needs of your customers, all under one roof. No matter how big PREPAID or small your financial institution is, choose a payment CARD SOLUTIONS processing company you trust — choose TSYS. Put our expertise to work. visit lp.tsys.com/ncba EMV is a registered trademark or trademark of EMVCo LLC in the United States and other countries. All trademarks contained herein are the sole www.tsys.com DQGH[FOXVLYHSURSHUW\RIWKHLUUHVSHFWLYHRZQHUV¬$Q\VXFKXVHRIWKRVHPDUNVZLWKRXWWKHH[SUHVVZULWWHQSHUPLVVLRQRIWKHLURZQHULVSURKLELWHG ©2017 Total System Services, Inc. TSYS® is a federally registered service mark of Total System Services, Inc. All rights reserved. TS7192 Carolina Banker | Spring 2018 37 FEATURED CONTENT The Federal Reserve Board’s February 2 Order against Wells Fargo has spread fear among some bank directors wondering whether they are next. It is not so much a fear of what the Order actually says—the language in the Order is not very different from many other Orders, but for one big exception. It directs the board to better oversee the risk management process as it relates to David Baris growth and strategy, with special emphasis on the information flow from various President, American Association of Bank Directors management sources so that the board may act based on sufficient information. Phone: (202) 463-4888 The one exception is the freeze on asset growth from the end of last year. Email: [email protected] No, it has more to do with the fact that Wells federal appeals court. None of that protective announced simultaneously with the issuance of the process was followed. Order that it will replace four board members this We don’t have all the facts to understand year. The Order is silent on that point. whether the Fed forced Wells to remove directors Also released were two letters of reprimand or whether Wells acted on its own, but we do from the Fed directed to the former Chairman & know that the directors in question had none of CEO in addition to the former Lead Director. the due process protections afforded by law and the U.S. Constitution had the agency used its Letters of reprimand are treated confidentially. statutory powers to remove them. It is extraordinary for them to be aired publicly. It is also extraordinary that a federal banking Another aspect of the Order and related agency treats a Lead Director differently from documents is the role that Sen. Elizabeth Warren other directors. played in the removal of Wells directors. The Fed, as are the other federal banking For months, Sen. Warren has called on the agencies, is subject to federal law that limits its Fed to remove Wells directors who had served authority to remove directors and other insiders. during the time that Wells had purportedly The federal law requires the agencies to apply and engaged in questionable sales practices. Initially, meet high standards to remove insiders. she based her demand on the results of the investigation conducted by an outside law firm on Insiders have a right to due process through an behalf of Wells’ Board Audit Committee. administrative process, including a fact finding hearing overseen by an administrative law judge, I’ve read the law firm report (May 2017), which and ultimately, they have a right to appeal to a is publicly available. My main takeaway was that the 38 Carolina Banker | Spring 2018 Board had not received sufficient information from This is reminiscent of the Keating Five from the management that would have allowed the Board to 1980s. Five U.S. Senators succeeded in influencing properly oversee the implementation of Wells’ sales the Federal Home Loan Bank Board in its oversight practices. But Sen. Warren concluded that the board of a savings bank controlled by Charles Keating. It was responsible for flawed management sales practices was an example of how politics should have nothing even though the board was not sufficiently informed. to do with bank regulators’ decisions relating to Sen. Warren followed up on numerous occasions individual banks and individual bank directors. through correspondence with then Fed Chairman For many years, members of Congress have Yellen and cross-examined Yellen in an October 2017 recognized the difference between legitimate Senate banking committee hearing strongly urging oversight of the agencies and interfering with the Fed to remove Wells directors. decisions of the banking agencies on individual Immediately following the publication of the Fed banks and insiders, and have honored that distinction Order of February 2 and the announcement that in their oversight of the banking agencies. Wells was removing four directors, Sen. Warren The Fed has been a fiercely independent agency issued a press release proclaiming victory. The since its inception. It runs the risk that Sen. impression Sen. Warren has left is that without her Warren’s assertions and communications with the persistence calling for the removal of Wells directors, Fed over many months may lead to the perception the Fed would never had applied its influence over that the Fed is not as independent as it has been Wells to have the directors removed. and should be. WHAT SHOULD BANK DIRECTORS LEARN FROM THE FED-WELLS SAGA? • Continue periodic review of Board processes to be sure that board members are receiving good information from various sources, including independent risk management and audit directly reporting to the board or a board committee. • Evaluate how management decides when to elevate matters to the Board or a Board committee so that important matters are reported. • Consider how the Board and Board committees may spend more time on important matters and less insignificant issues, and consider the content, presentation and effectiveness of board reports. • Evaluate risk management in terms of growth strategies and implementation of those strategies. • Recognize that regulatory focus on sales practices has substantially increased since the Wells matter surfaced in September 2016 and has continued to be a focus. • Support AABD’s efforts to help assure that bank directors’ due process rights are protected under law and by the federal banking agencies. Carolina Banker | Spring 2018 39 FEATURED CONTENT Jim Reber President, ICBA Securities Phone: (800) 422-6442 Email: [email protected] Not so long ago, a wildly popular variety of government agency bonds was struggling to get to market fast enough to meet investor demand. Chances are your community bank owned some, or a lot, of these bonds, known as “step-ups.” Lately, the ever-changing dynamics of supply and demand have made the build-out more difficult and the attractiveness less so. Since we’re in the community banking business, and most everything we touch is somehow cyclical in nature, it bears examining why step-ups are at least temporarily on hiatus and what could spark their triumphant return. But before we do, let us revisit the basic structure. These step-ups are issued by the usual suspects: Fannie Mae, Freddie Mac and the Federal Home Loan Bank. They have good liquidity, are pledgeable and are 20 per risk weighted, so they meet all those safety and soundness criteria. Their maturities can vary from three years to 15. Their “lockouts,” which are the periods from issue until the first call date, can be as short at three months and as long as three years. The one thing they have in common: a stated interest rate, or coupon, that will rise in the future if the bond isn’t called by the issuer. COMPARISON SHOPPING basis points higher for the same six months. The breakeven Beyond the promise of a higher rate in the future (if the date was March 2020, which now will never happen. bond still exists), step-ups can have very different structures. For one, the steps can be one-time-only (which MARKET HEADWINDS is comparatively rare), or they can be multi-steps. For With that as a background, let’s examine the difficulty another, the height of the steps can be miniscule (as small in launching step-ups in today’s market. As short rates as 12.5 basis points, or .125 percent, annually) or as large rise relative to longer rates, the underwriters struggle to as two percent annually. For still another, most step-ups rob enough coupon from the front end of the cash flows can be called at any interest payment date, but a few have to make the back coupons attractive to risk-averse one only call date. Your broker should show you all the investors. Remember that portfolio managers are possible outcomes during the pre-purchase phase. comparing fixed rate callables with step-ups, as we saw In the end, the reason step-ups have appeal to community in our example. In the two years between January 2016 banks is that they provide protection against rising rates. and January 2018, the yield curve between one and 10 Portfolio managers realize that they are sacrificing yield years flattened 100 basis points. today for some potential upside later. The trick is to buy To demonstrate, we can refer back to our Fannie Mae enough yield in the future to make up for the lost revenue step-up from 2017. That bond, which you remember was today, which involves guesswork, as the following illustrates. called in September 2017, would have had a terminal In March 2017, Fannie Mae issued a fixed rate bond that coupon of 4.00 percent had it lasted five years. Today, in matured 3/29/2021 with a coupon of 2.125 percent. It also a much higher short-term rate environment, a similar issued a step-up that matured 3/29/2022 with a beginning step-up would begin with a coupon of about 2.00 percent coupon of 1.75 percent. Both bonds were callable in six but would have a terminal coupon of only 3.00 percent. months, which meant September 2017. In fact, both were Plenty of portfolio managers are deciding that a fixed called, so the first investor’s holding period yield was 37.5 rate callable is a better option at the moment. 40 Carolina Banker | Spring 2018 Their future is in your hands. PROOF IN THE UNDERWRITING EŽīĞƌƐƚŚĞĨŽůůŽǁŝŶŐŐƌŽƵƉůŝĨĞŝŶƐƵƌĂŶĐĞ Now let’s look at some numbers for evidence. Back in the ƉƌŽĚƵĐƚƐƚŚƌŽƵŐŚ^ƚĂŶĚĂƌĚ/ŶƐƵƌĂŶĐĞŽŵƉĂŶLJ͗ steep curve days of say, 2011, nearly half of all agency • ĂƐŝĐdĞƌŵ>ŝĨĞǁŝƚŚΘ issues had some type of stepped-up coupon structure. Even • ĚĚŝƟŽŶĂůdĞƌŵ>ŝĨĞ as late as a year ago, nearly a quarter of the new bonds had • ĞƉĞŶĚĞŶƚdĞƌŵ>ŝĨĞ built-in yield protection. In December 2017, step-ups • sŽůƵŶƚĂƌLJΘͬdƌĂǀĞůƐƐŝƐƚ accounted for less than five percent of newly hatched bonds. Community banks in general own fewer agencies than WůĂŶƐŚĂǀĞŚŝŐŚ before. In the past six years, the sector’s weightings have ŐƵĂƌĂŶƚĞĞĚŝƐƐƵĞ ůŝŵŝƚƐ͕ĂƌĞĨƵůůLJ gone from about 18 percent of the total portfolio to about ƉŽƌƚĂďůĞ͕ĂŶĚƉƌŽǀŝĚĞ 11 percent today. I would suspect that given the continued ĞŶŚĂŶĐĞĚĨĞĂƚƵƌĞƐ rising demand for well-structured mortgage products and ĂƚůŽǁŐƌŽƵƉƌĂƚĞƐ high-quality municipal bonds, and their attendant shrinking spreads, agency bonds can make a comeback among community banks—especially when we see the yield curve begin to steepen. The evolution of the agency ŽŶƚĂĐƚŽŵŵƵŶŝƚLJĂŶŬ^ĞƌǀŝĐĞƐĂƚ bond market will continue to respond to investor demand, ϵϭϵ͘ϳϴϭ͘ϳϵϳϵƚŽĚĂLJĨŽƌŵŽƌĞĚĞƚĂŝůƐ͊ and that will include step-ups. PROBLEM: Customer wants fixed rate loan, bank wants floating rate SOLUTION: ARC LOAN HEDGE PROGRAM COMMUNITY BANK EXPERIENCE DŽȅCORRESPONDENT BANK EXPERTISE DŽ Borrowers can take advantage of record low fixed rates DŽ Bank receives a simple floating Contact: Charlie Winborne rate payment 704.496.2612 704.607.4737 5960 Fairview Road, Suite 400 DŽ No complicated swap structure for Charlotte, North Carolina 28210 borrowers or bank www.csbcorrespondent.com DŽ No regulatory or derivative reporting for the bank DŽ Assumable and transferable Leverage CenterState’s marketing, pricing and structuring support. CarolinaCarCara oliololinaa BankerBanBBa kker | SpringSpSprprpringnngg 201820201188 414 FEATURED CONTENT FIVE PERSPECTIVES ON THE IMPACT OF THE n December 22, 2017, President Donald Trump signed into law the first major overhaul of the tax code in more than 30 years. For Othe first time in this generation, a major rewrite has occurred to the federal tax code and many North Carolinians in the banking industry are wondering how this will affect our state's economy and the financial institutions that keep our communities strong. The new tax law includes a reduction in the corporate tax rate from 35%, the highest in the developed world, to 21%, which falls just below the worldwide average. Immediately following this announcement, many businesses began to announce raising wages and granting immediate bonuses to their employees. Still, implementation of the new code can be tricky and not all banks will be affected in the same way. With so many changes to the tax code, there are bound to be questions. Luckily, we have answers from a variety of perspectives. We have asked for different perspectives from around the state, and over the course of this article will hear from some of the brightest minds on the subject. The following pages contains five unique viewpoints from a community bank CEO, a CEO of a larger bank, an economist, a banking accountant, and a congressman. Read on to learn what the Tax Cuts and Jobs Act means to you and your community. TAXES 42 Carolina Banker | Spring 2018 View From... A COMMUNITY BANK CEO The unexpected, late in the year passage of The Tax Cuts and Jobs Act (the Act) has left companies and individuals alike questioning the likely impact of the Act on their businesses and personal finances. For banks and bank customers, the Act has major ramifications… some positive and others potentially costly. This article will explore the implications of the Act as viewed by a banker (me) who at one time was considered a tax expert. However, you are cautioned to address your questions to a CPA or other certified tax professional. Jim Engel For most companies, including banks, the most obvious initial implication of the Act CEO, Aquesta Bank is a reduction of the tax rate from 35 to 21 percent. Obviously for profitable companies, the reduced tax rate should result in increased corporate profits. For banks, the increased profitability means increased capital formation. As capital is the lifeblood of bank lending, the increased rate of capital formation will result in increased lending capacity. Aquesta Bank, for instance, expects to be able to support approximately an additional $9 million a year of lending without raising outside capital. And, Aquesta is considered to be a relatively small bank at $400 million of assets. Larger banks should achieve the same Kelly King Chairman & CEO, BB&T benefits only on a much larger scale. All is not rosy for banks under the Act – even when it comes to capital formation. First, the vast majority of banks are in a deferred tax asset position due to loan loss reserves on their books that were not allowable deductions for tax return purposes. Because the Act eliminated the ability to carry back net operating losses, regulators will no longer allow support of the asset by looking at prior taxes paid. Consequently, for regulatory purposes most banks will find it more difficult to support counting part of their deferred tax asset towards the calculation of regulatory capital. This may have an initial and perhaps an ongoing Dr. Harry Davis Economist, NCBA negative countermeasure to the positive impact of the Act on capital formation. The Act’s impact on individuals will obviously depend on their particular tax position. Increases in the standard deduction and decreases in marginal tax rates should benefit most taxpayers. Limitation on state and local tax deductions may negatively impact those individuals who have received significant federal tax savings from those in the past. But, even these generalities are too broad to know for sure. Taxpayers who have been subject to the Alternative Minimum Tax in the past likely received reduced or even no benefit Nikki Yarborough from large local taxes since the Alt Min Tax limits their deductibility. Partner, DHG Financial Services An intersection of the Act’s impact on banks and bank customers is the elimination of the prized Home Equity Loan (HELOCs) benefits which are effectively eliminated except for purchase money HELOCs or funds used for home improvement. The prospective limitation on deductibility on certain new large first mortgage debt may increase the after tax cost and, consequently, reduce the attraction of such products to customers. The Tax Act was a surprise to many. Whether or not you will benefit from the Act, is highly dependent on your facts. Check with your advisor. For positive or negative, virtually Hon. George Holding everyone will see change. Congressman, NC’s 2nd District Carolina Banker | Spring 2018 43 FEATURED CONTENT View From... A LARGE BANK CEO Simply put, the recent tax reform legislation has made it easier for BB&T to further act on our mission of making the world a better place to live by serving our clients, associates, communities and shareholders. Financial institutions around the United States, whether Jim Engel they be across the country or right here in North Carolina, are able to impact their CEO, Aquesta Bank communities in a positive way. Right after the bill was signed, we announced $152 million of additional investments to support our associates and communities. This included raising BB&T’s minimum hourly pay rate from $12 to $15 per hour; providing a special, one-time $1,200 bonus for almost three-fourths of our associates; and donating $100 million to BB&T’s philanthropic fund to support charitable organizations in our communities. The tax code changes factored heavily into the decision-making process and allowed for us to Kelly King use our capital to build. Chairman & CEO, BB&T As we added to our bottom line, it was only appropriate to share a portion of that increase with our associates. When we provide a place for them to learn, grow and be fulfilled in their work, they take care of our clients in an exceptional way. Simply put, when our associates are happy, our clients leave our banks happy, too. When more of our clients achieve economic success, our communities thrive as a whole. And our shareholders - who ultimately allow us to take deposits, make loans and fuel economic growth - benefit along with all of our constituents. The benefits from tax reform reach Dr. Harry Davis everyone that interacts with BB&T. Economist, NCBA What we’ve done at BB&T is just a single example of the positive effects of tax reform, but it’s easy to see others when we look at what’s happening in the businesses around us. I believe these changes will lead to a positive, long-term improvement in our economy, both on the state and national level. It boils down to this: as businesses pay fewer taxes, the bottom line benefit allows for a higher return on capital, which allows that business to attract more capital. Then, businesses are able to direct more of their capital into investments such as staffing; plant and equipment; and technology, which leads to job Nikki Yarborough Partner, DHG Financial Services creation and a higher standard of living for everyone. Other businesses see gains from these investments, as well, which leads to a domino effect and an economy that grows both progressively and predictably. Tax reform is good for our individual communities and for our country as a whole. Hon. George Holding Congressman, NC’s 2nd District 44 Carolina Banker | Spring 2018 View From... AN ECONOMIST The Tax bill passed by Congress and signed by the President on December 22, 2017 will have positive impact on the growth rate of the US economy. By far the greatest effect will be on the business sector. The minor changes to the tax brackets and tax rates will have very little bearing on individual taxpayers except for small business owners. The Jim Engel majority of individual taxpayers will receive a small tax cut, while very few individuals CEO, Aquesta Bank will experience a tax increase. The US marginal corporate tax rate has been high for years, but became ridiculously high in the past 5 years. Other countries around the world including Ireland, Japan, France, and Australia cut their already lower corporate rates. The result has been to make our corporations less competitive on the world economic stage. The new lower corporate rates will make our corporations more competitive. Most importantly, higher corporate profits will lead to greater business investment, which our Kelly King economy assuredly needs. Business investment was anemic in 2015 and 2016, but started Chairman & CEO, BB&T rising at the end of 2017 in anticipation of the tax bill. Business investment will show a dramatic increase this year, which will lead to a much-needed increase in productivity. The financial sector is one that will benefit the most from the reduction in tax rates. Some corporations have effective tax rates around 25-28% because of tax loopholes. Financial corporations have very high effective tax rates so their earnings will increase dramatically. The announced increases in minimum wages and bonuses by numerous companies are a manifestation of the expected higher earnings. Higher corporate earnings Dr. Harry Davis Economist, NCBA will have a lasting impact on future economic growth. Approximately $3.1 trillion in US corporate profits remain outside the United States due to the high tax rate on repatriation. The tax bill offers a one-time rate of about 15.5% to bring those funds back to this country. If all of those funds were brought back, nearly $450 billion would go into the US Treasury. For example, Apple has already announced that it will pay an additional $38 billion in taxes on repatriated funds. The after tax funds will either be invested or paid out to stockholders. While the former will be more beneficial Nikki Yarborough than the latter for economic growth, both are preferable to leaving the money overseas. Partner, DHG Financial Services Non-urban areas of the country will experience an unexpected benefit from the bill. Small business owners and S corps will be taxed at lower rates than before. This action will improve their profitability and many of them reside in slower growing rural areas of our country. The increase in corporate and small business profits will greatly enhance the economic well-being for millions of Americans. Hon. George Holding Congressman, NC’s 2nd District Carolina Banker | Spring 2018 45 FEATURED CONTENT View From... A BANK ACCOUNTANT The “Tax Cuts and Jobs Act” PL 115-97 (the Tax Act) is the most comprehensive change to the U.S. federal tax code since 1986. The reduction of the corporate tax rate to 21 percent for tax years beginning on or after Jan. 1, 2018, creates an immediate impact on the 2017 financial statements and related regulatory reporting for most financial institutions. Banks with a net deferred tax asset (DTA) as of Dec. 31, 2017, may see a reduction to Jim Engel 2017 earnings due to the re-measurement of the DTA’s at a lower tax rate. The silver lining CEO, Aquesta Bank is that beginning in 2018, the lower corporate tax rate will decrease the bank’s effective tax rate. Fiscal year corporations with a tax year spanning both 2017 and 2018 calendar years will pay tax using a blended tax rate calculated pro rata, based on days in the tax year before and after the effective date of the tax rate change of Jan. 1, 2018. It is important to distinguish between the Tax Act’s enacted date and the effective date. The enacted date, Dec. 22, 2017, is when the legislation was signed into law. The new tax rates apply to tax years beginning on or after Jan. 1, 2018. The guidance for treatment of the Kelly King Tax Act for the income tax provision in the financial statements is found in ASC Topic 740, Chairman & CEO, BB&T Income Taxes. Review and discuss the provision highlights with your tax advisor. ASC 740 requires the impact of any deferred tax re-measurement to be recorded in income from continuing operations, including deferred taxes initially recorded through other comprehensive income (OCI); although OCI itself is not adjusted for the re-measurement. This OCI re-measurement creates a lodged disproportionate tax effect. On Jan. 10, 2018, the FASB approved issuing an exposure draft, allowing the reclassification of the tax reform disproportionate tax effect from OCI to retained earnings, in financial statements that have not yet been issued. Dr. Harry Davis As of the submission date of this article, the accounting treatment has not been issued yet. Economist, NCBA On Jan. 18, 2018, the Federal Reserve Board, Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency issued an interagency statement allowing early adoption of the FASB’s proposed guidance for eligible institutions when filing regulatory reports. The eligibility requirements vary between the agencies; check the guidelines for the regulator applicable to your institution. Other important Tax Act provisions that must be analyzed to determine the impact to financial institutions include: Nikki Yarborough Partner, DHG Financial Services • FDIC premium deductibility for institutions with consolidated assets greater than $10 billion • Repeal of the corporate alternative minimum tax (AMT) and refundable AMT credits • Additional disallowance of tax deductions for some compensation elements for certain employees • Further limiting the deductibility of meals and entertainment expenses • Enhanced opportunities for expensing of qualified property • New rules for net operating losses generated after 2017 Your bank’s tax advisor can discuss impacts from the Tax Act specific to your bank and business model, as well as to your customers. Hon. George Holding Congressman, NC’s 2nd District 46 Carolina Banker | Spring 2018 View From... A CONGRESSMAN Last December, with the passage of the Tax Cuts and Jobs Act, Republicans finally delivered on a long overdue promise to the American people and overhauled the tax code for the first time in more than 30 years. When House Republicans on the Ways and Means Committee unveiled our blueprint for bold, comprehensive tax reform in 2016, we envisioned a system that simplified and lowered rates, raised wages while helping businesses create jobs, and streamlined our Jim Engel overly complex and burdensome tax code. CEO, Aquesta Bank I am pleased to report earlier this winter we achieved that goal and seized a once- in-a-generation opportunity to turn our vision into a reality — improving the lives for workers, families, and job creators in North Carolina and across the country. We started by ensuring middle and working-class families kept more of their monthly paychecks. By lowering tax rates, increasing the standard deduction, and preserving popular itemized deductions like mortgage interest, we created an easy to understand system, and one I believe immediately benefits those living paycheck-to-paycheck. In Kelly King Chairman & CEO, BB&T fact, given these changes, the average family in the Second Congressional District will see their taxes cut by approximately $2,250. Next, we expanded opportunities for Americans all over the country by helping Main Street create jobs. The Small Business Administration reported small businesses are responsible for creating 63 percent of new private-sector jobs in the United States. This is America’s backbone and we needed to take steps to help these businesses get their feet under them to remain competitive. Our tax reform law did just that by dramatically lowering the tax rate for small businesses – the lowest in a generation. Dr. Harry Davis Economist, NCBA In this same vein, prior to reform, the United States had the highest corporate tax rate in the developed world. Moving to a territorial system and lowering that corporate rate from 35 percent to 21 percent immediately leveled the playing field that had been titled toward our international competitors. In just over a month since the bill’s passage we have already seen more than 250 companies announce wage hikes and bonuses for their employees and numerous others announce new investment here in the U.S. This is money that otherwise could have Nikki Yarborough been invested offshore but will now have a real impact on our economy. By putting in Partner, DHG Financial Services place a tax code that encourages growth and rewards investment, it is projected that more than 10,000 new full-time jobs will be created in North Carolina alone. We are just only beginning to see the effects of this historic law, and I remain confident our new, simplified tax code will help hardworking Americans, encourage people to start a business in the United States, and create more jobs for North Carolinians. Hon. George Holding Congressman, NC’s 2nd District Carolina Banker | Spring 2018 47 FEATURED CONTENT Rob Nichols President & CEO, ABA Phone: (800) 226-5377 Email: [email protected] Washington is anything but textbook these days, which can make the advocacy work of state and national trade associations a challenge. But the recent tax reform effort proves that certain staples of effective advocacy— functions at which ABA and the state associations happen to excel—have enduring value. All were on display as Congress and the administration worked together on a comprehensive package of tax reforms that we believe will help grow the economy and create jobs. They also will help banks, which previously had one of the highest effective tax rates of any business, better serve their customers and the broader economy. Those staples of effective advocacy include building This approach made a difference. Lawmakers, for example: respectful relationships and coalitions, speaking • Adopted a careful approach to limiting net interest with a unified voice, offering expert analysis and deductibility, protecting banks’ small business, showing discretion on when and how to offer agriculture and real estate customers, whom we said public criticism. would be harmed by more substantial limits. We were engaged in the tax reform debate • Heeded concerns about the treatment of pass-through from the very start, offering advice and insight entities like Subchapter S banks and brought the rate on the potential effects of various provisions— closer in line to the “promised” rate. such as the impact of limiting net interest • Removed provisions that would have eliminated the deductibility—and coordinating closely with our benefits of deferred compensation plans. state association allies. We also worked closely • Corrected an issue relating to income recognition with other groups in the financial services for mortgage servicing rights and other transactions. industry, hosting daily calls to ensure our advocacy • Steered clear of imposing a new bank tax as a means was united and effective. of paying for tax cuts. At every turn in the legislative process, we • Maintained a variety of tax credits, particularly the worked respectfully with lawmakers to improve low-income housing and new markets tax credits the bill. Recognizing the tightrope lawmakers that are so important to our communities. were walking to create a comprehensive bill that The result is a final package that is largely aligned would have sufficient support, we as an industry with ABA’s core principles for tax reform, with one were careful to offer pragmatic, constructive notable exception: It misses the chance to level the feedback, not public condemnations or threats playing field with credit unions. While this is hugely that could have derailed the effort. disappointing, it’s not for lack of effort. Bankers have 48 Carolina Banker | Spring 2018 Looking for New Non-Interest Fee Income? made their views plainly clear to lawmakers for years. We articulated a sound rationale for including these tax-privileged competitors in reform and even offered public opinion research that showed Americans back the idea. In the end, lawmakers viewed this as too controversial to tackle in this bill, but we’ll keep up the fight. Credit for much of what we did achieve goes to the bankers—from institutions of all sizes and from states across the country—who volunteered their time and The Banker Suite expertise to the cause. (If you ever doubted whether association service was meaningful, I can put you in With the CRS Data Banker Suite, you can bring touch with the women and men on ABA’s tax committee evaluations in-house and create a new revenue stream who helped comb through each 500-page iteration of in the process. the tax bill to identify the potential effects on banks.) Our policy experts and lobbying staff also made a • Stay fully compliant with all 8 points of the Interagency tangible difference. Together, this banker-staff tax Guidance to help you service more real estate loans in-house. reform team artfully balanced the politics and policy behind a highly complex and highly charged legislative • Establish new non-interest fee income. process, and they did so in a manner that kept the • Improve your bank’s efficiency ratio. door open to congressional leaders and literally earned • Quickly and easily determine FEMA flood zones us a place at the table. to meet Biggert-Waters requirements and bypass That gave us just a voice, of course, not the final unnecessary fines. say—and that’s as it should be. Good public policy must • Navigate changes made through the Dodd-Frank Act consider the views of many. It just so happens the banking while saving time and money. We’re all about putting industry represents many—from our two million the power back in your teams’ hands. employees to the countless communities and customers we serve. That makes effective advocacy a must. I’m proud that the ABA and the entire industry delivered. Schedule a Presentation Today. Alwyn Staley | [email protected] | 800.374.7488 ext. 150 | crsdata.com/banking ©2016 CRS, Courthouse Retrieval Systems. All Rights Reserved. The Banker Suite is property of CRS Data, Inc. Carolina Banker | Spring 2018 49 FEATURED CONTENT 50 Carolina Banker | Spring 2018 fter a year-long search, the Federal Reserve Bank of Richmond has A found its eighth President and CEO, Thomas “Tom” I. Barkin, who took office on January 1, 2018. The Bank’s Board of Directors began its search for a new President and CEO in January, 2017. Over the course of the search, the Board sought out a diverse pool of 700 candidates and candidate sources before finally arriving on Tom Barkin as its new President & CEO. According to Margaret Lewis, Chair of the Richmond Fed’s Search Committee and the Bank’s Board of Directors, Barkin stood out as a candidate for several reasons. “Tom’s exceptional academic credentials, his analytical and research-based thought overseeing offices in the southern United leadership, combined with his States, leading multiple functional areas, understanding of the Federal Reserve and providing strategic counsel to a diverse System, were important considerations for portfolio of clients. In addition to this this key leadership role," said Lewis. “He experience, Barkin has served as a board also has experience in leading the member and chairman of the Federal information technology efforts at Reserve Bank of Atlanta, preparing him for McKinsey—critical given the Richmond the responsibility he now holds. Fed’s responsibilities for the system’s In his role, he is responsible for the national technology efforts.” Federal Reserve Bank of Richmond’s His academic credentials certainly are monetary policy, bank supervision and impressive. Barkin received his regulation, payment services, and the undergraduate degree in Economics at Federal Reserve System’s information Harvard University before gaining both his technology organization. He serves as a MBA from the college’s Business School voting member in 2018 on the Federal and his JD from the university’s Law Reserve’s chief monetary policy body, the School. His Ivy League education brought Federal Open Market Committee. Because him to McKinsey & Company in 1986, of this, Barkin plans to be “heavily engaged Carolina Banker | Spring 2018 51 FEATURED CONTENT FEATURED: across the Fifth District to learn more about Peter Gwaltney, President & CEO, the challenges and opportunities facing our North Carolina Bankers Association communities” and utilize the views his district Tom Barkin, President & CEO, shares with him as a key part of his monetary Federal Reserve Bank of Richmond policy considerations. Kathleen Murphy, President & CEO, "I am honored to lead the Richmond Fed and Maryland Bankers its dedicated team," said Barkin. "I deeply Association support the central bank's public service NCBA President & CEO, Peter Gwaltney, mission, and I'm looking forward to leading attended a dinner at the Federal Reserve Bank of and contributing to the important work that Richmond to welcome Barkin shortly after he lies ahead. I also plan to be heavily engaged took office. “Tom Barkin is a warm and friendly across the Fifth District to learn more about individual who is imminently qualified to lead the challenges and opportunities facing our the Federal Reserve Bank of Richmond,” Gwaltney communities and bringing these perspectives said. “I am excited about the opportunity to work forward as part of my monetary policy with him and look forward to our North Carolina considerations and contributions." bankers meeting him in the very near future.” Now accepting applications for the 2018 NC School of Banking! The 82nd Annual NC School of Banking July 29 - August 3 | William & Ida Friday Center The North Carolina School of Banking is the oldest state association banking school in the nation. It is dedicated to expanding the skills and abilities of middle managers and prospective managers. Bankers who enroll in the School spend one week each August receiving training in a college setting. Submit your application now for the North Carolina School of Banking! We look forward to seeing you at the William & Ida Friday Center at UNC-Chapel Hill from July 29 - August 3, 2018. 5252 CarolinaCarCCaararooliollilinana BankerBaBBana kkerkeerer | SpringSSpSprpriinginnngg 220201801818 at Join the NCBA for our 122nd Annual Convention at The Cloister Join the NCBA for this year's Annual Convention! Join us in Sea Island, Georgia, for an exciting opportunity to gather and discuss our industry at The Cloister, a vibrant five-star resort right on the Atlantic. Take out your calendar now and set the date, because this is one destination you won't want to miss. FINANCIALPSIă Financial Products & Services, Inc, provides high-quality insurance products at an affordable price, with the individual attention you need. Our product portfolio allows you to select from a variety of coverage options to meet your specific needs. Your Source for: • Directors’ & officers’ coverage • Financial institution bonds • Property & casualty package products • Cyber insurance • Plastic card coverage • Mortgage hazard insurance Contact your local FinancialPSI insurance representative today to find out how these products may benefit your bank and your customers. Endorsed partner Jon Goodson Brian Mobley Ted Frizen Community Bank Services, Sales Consultant President Sales Consultant a subsidiary of NCBA (901) 428-1807 (615) 244-5100 (865) 769-8649 Carolina Banker | Spring 2018 53 FROM THE BANKERS CAROLINA ALLIANCE BANK FIDELITY BANK John D. Kimberly has been appointed as the Tom Cox has joined Fidelity Bank's team in Chief Executive Officer for Carolina Alliance Holly Springs as Vice President and Branch Bank's Board of Directors. Kimberly joins the Manager. In his new position, Cox will be Board with over thirty years experience in the responsible for business development and financial services industry. Kimberly was providing outstanding customer service to bank President and Chief Executive Officer of customers. Cox has over 30 years of financial Forest Commercial Bank in Asheville, NC experience in the Wake County market. prior to becoming the President of Carolina John D. Kimberly Alliance Bank in 2014. Tom Cox FIFTH THIRDS BANK John S. Poole has announced his retirement Tom Heiks, the Charlotte-based President of from Carolina Alliance Bank and is succeeded North Carolina banking, has been named the by John D. Kimberly. Poole founded the bank head of commercial middle-market banking. in January 2007 with a group of organizing Heiks will also continue in his role as Regional directors, and he was its first President and President overseeing Fifth Third’s North Chief Executive Officer. He will continue as Carolina, Virginia and South Carolina a consultant to management through June employees. He has a 28-year tenure at the bank 2019 and serve on the Board of Directors. and was named President & CEO of Fifth John S. Pool Tom Heiks Third’s N.C. affiliate in 2012. CAROLINA TRUST BANK FIRST BANK J. Shane Wolfard has been hired by Carolina Brittany Marshall has been appointed by First Trust Bank as Vice President and Market Bank as the bank's new Branch Manager Executive in Salisbury where he is tasked with overseeing its Hendersonville office. In her new developing and managing banking relationships. role, Marshall will be responsible for the day to Immediately before joining Carolina Trust, day management of the Hendersonville branch, Wolfard served as Rowan County Regional focusing on serving the needs of current Executive at BNC Bank where he performed customers while also developing new similar duties. relationships with businesses in the area. J. Shane Wolford Brittany Marshall CARTER BANK & TRUST FIRST FEDERAL BANK Catharine Midkiff has been appointed by Pamela S. Keene has joined First Federal as Carter Bank & Trust as an Independent Vice President and Commercial Lender at the Director in Winston-Salem. Midiff served Fuquay-Varina branch. Keene has worked in 20 years as an executive with General Electric banking for over 27 years. She most recently Capital Corporation in risk management, worked with Wells Fargo Bank as Vice operations and finance. She is certified in Six President and Senior Relationship Manager. Sigma as a master black belt, the highest level She is the recipient of several personal and credential in management techniques, professional achievement awards. Catharine Midkiff primarily by reducing risks. Pamela S. Keene FIDELITY BANK FIRST RELIANCE BANK Jeff Wetmore has been hired onto Fidelity David Barksdale has joined First Reliance Bank Bank's team in Salisbury as Senior Vice as North Carolina President. Based in Winston- President and Market Executive. In his new Salem, Barksdale is responsible for the strategic position, Wetmore will be responsible for market expansion of the bank’s Carolina developing and managing commercial banking footprint. President & CEO Rick Saunders says relationships in Rowan County as well as that Barksdale "brings a depth of proven strategic overseeing the sales efforts of the branch. management experience and comprehensive Wetmore has 16 years of financial experience understanding of markets in North Carolina." Jeff Wetmorein the local market. David Barksdale 54 Carolina Banker | Spring 2018 KS BANK NORTH STATE BANK Amber Straley has joined KS Bank as Jim Evans has joined the staff of North Relationship Manager of the Four Oaks retail State Bank’s downtown Raleigh office as a office. She will be responsible for all branch commercial loan portfolio manager. In this operations and personnel as well as growing role, Evans will work with business deposits and loans in the Four Oaks market executives and owners to provide lending area. Straley has worked in the financial industry solutions. He is an industry veteran with since 2007 as a Retail Banking Officer, Assistant over 30 years of experience, most recently Credit Analyst, Risk Management Assistant, working at Bank of North Carolina. Amber Straley and Loan Processor. Jim Evans LIVE OAK BANK Jennifer Williams will serve as a Senior Loan John Lehman has joined North State Bank's Officer for the bank’s renewable energy lending Raleigh office as a commercial loan portfolio team, which focuses exclusively on utility-scale manager. Lehman brings over 30 years of solar, energy storage and waste-to-energy industry experience to the position, as well as project financing nationwide. In her work prior deep roots in the Triangle in several of the to joining the Live Oak team, she managed area's leading community banks. At North solar acquisitions, project financing, and State, he will develop and serve commercial lending, and has closed or delivered more than banking relationships. Jennifer Williams 70 megawatts of solar investments. John Lehman M&F BANK SELECT BANK Tawanna McNeil has been added to M&F David Adams has joined Select Bank & Trust's bank as Branch Manager of their Greensboro Raleigh office as a commercial loan officer and office. McNeil brings to M&F considerable relationship manager. He will be responsible experience in retail banking, marketing, for business development and lending for one strategic planning and training. She currently of Select’s leading markets. He has over 20 is researching local organizations where she years of banking experience, including can lend her enthusiasm for helping others commercial lending and expertise in real estate to a good cause. lending process and procedure. Tawanna McNeil David Adams William Ray has been added to M&F Bank's Bill Hedgepeth, President & CEO of Select Bank business development team as Vice President & Trust, has been appointed to the Federal and Business Banker and will operate out of the Reserve Bank of Richmond’s Community bank's Hargett Street branch in downtown Depository Institutions Advisory Council Raleigh. His background includes consumer (CDIAC). The CDIAC advises the Bank’s leaders and commercial lending, consultative sales and and the Board of Governors about local economies, relationship management, and financial analysis. banking conditions and other issues across the fifth district. CDIAC members represent banks, William Ray Bill Hedgepeth thrift institutions and credit unions. NEWDOMINION BANK UWHARRIE BANK Nicolas Carver has taken on the role of Brendan Duffeyhas been named Uwharrie Commercial Relationship Manager at Bank’s Chief Executive Officer in addition to NewDominion Bank. Carver, a graduate of his title of President. Duffey also serves as Queens University of Charlotte, will be taking Chief Operating Officer and Chief Risk a concierge approach to banking. In his role, Officer of Uwharrie Capital Corp. His banking Carter will be working with prospects and experience includes 10 years as the managing clients to find the best possible financial general partner of a U.S. bank consulting firm solutions for their lending needs. and 20 years in executive banking roles. Nicolas Carver Brendan Duffey Carolina Banker | Spring 2018 55 FROM THE BANKERS Around the State SELECT BANK CELEBRATES NEW WILMINGTON LOCATION POTENTIAL FOR NEW DE NOVO Select Bank & Trust has opened a new facility to serve New Hanover and Brunswick ACTIVITY IN UNION COUNTY counties. The new location at 1001 Military Cutoff Road, Suite 100, will expand the A group of twelve businessmen, led bank’s presence in the area. The branch will be located in the Mayfaire commercial by David Cuthbertson, are looking district, and plans to celebrate with a grand opening and ribbon cutting. toward Monroe as the headquarters The full-service branch offers commercial banking services and traditional banking of the first de novo bank in the products, in addition to featuring drive-thru lanes and a full-service ATM machine Charlotte-region in over a decade, that will offer customers 24-hour banking. Executive Vice President and Chief and the first de novo bank in North Banking Officer, W. Keith Betts, will lead an established team of experienced bankers Carolina since Jacksonville-based at the new location. Betts has 35 years of banking experience, 32 of which he has Coastal Bank & Trust was formed served in Wilmington. “This branch in Wilmington is a significant milestone for our in 2009. Todd H. Eveson, of Wyrick bank,” Betts said. “We have developed a solid customer base in Brunswick and New Robbins Yates & Ponton LLP in Hanover counties with our branch in Leland, which led us to establishing this location Raleigh, is legally assisting the in Wilmington. The additional branch will provide added convenience for many of group, and former community bank our customers, and we believe this location offers significant business opportunities.” CEO Randy Helton and banking On the announcement, President and CEO William L. Hedgepeth II said “Select attorney Tony Gaeta have been hired is intent on being the local community bank of choice in the markets we serve. We to assist in the project. continue to selectively add to our branch network as we assess all strategies to build “This thought process has been shareholder value. Our bank’s mission is, ‘To be the bank of choice in the communities going on for a year and a half,” we serve, by providing exceptional customer service, superior products and experienced Helton says. “If there is a place that bankers using a common sense approach to banking.’” needs a community bank and deserves it, it’s certainly that area.” Helton says there is a possibility the de novo bank’s location could change slightly, but the region to the southeast of Charlotte is the area of choice due to its spot as the county seat and the several vacant bank buildings available to lease. The proposal will be subject to minimum capital requirements and federal and state regulatory approvals, including approvals of the FDIC and the North Carolina Banking Commission. ROXBORO SAVINGS BANK NAMED 2017 ROXBORO SMALL BUSINESS OF THE YEAR Roxboro Savings Bank was recently recognized as the 2017 Roxboro Small Business of the Year, an honor granted to independently owned businesses of 50 employees or less in the Roxboro area that are known for ethical business practices and serving their community through excellent products or services. “We make every effort to support this community, because this community is our primary market,” Executive Vice President and CEO Keith Epstein said in his acceptance speech. “We only have an opportunity to succeed as a business if this is a healthy and vibrant economic environment.” 56 Carolina Banker | Spring 2018 M&A Activity TOWNEBANK COMPLETES MERGER WITH PARAGON Hampton Roads, VA-based TowneBank announced that, at the close of business on January 26, 2018, it completed the previously announced merger with Paragon Commercial Corporation. Endorsed Vendor Pursuant to the terms of the merger, stockholders of Paragon are entitled to recieve 1.725 shares of TowneBank common stock. NEWDOMINION BANK AND PARK NATIONAL BANK MERGE NewDominion Bank will be merging with Park National Bank and will remain headquartered in Charlotte. The merger transaction is expected to close mid-year 2018, subject to the approvals of regulators and shareholders. UNION BANKSHARES AND XENITH BANKSHARES COMPLETE MERGER Virginia-based Union Bankshares and Xenith Bankshares have completed their merger. The combined company has total assets of about $12.3 billion. Most Xenith branches will change names to Union Bank & Trust in late May, the branches in North Carolina Custom cybersecurity solutions will change to Union Bank & Trust, Doing Business as Xenith. This will reduce potential confusion with Greenville-based Union Bank. based on your needs. FIRST CITIZENS BANK ACQUIRES HOMEBANC Raleigh-based First Citizens Bank is acquiring Tampa, FL-based Gain a trusted cybersecurity advisor HomeBancorp Inc. and its subsidiary, HomeBanc, in an all-stock transaction.Under the terms of the agreement, cash consideration with CONSULTING services. of $15.03 will be paid to the shareholders of HomeBancorp for each share of HomeBancorp’s common stock. FIRST HORIZON NATIONAL CORP. COMPLETES Receive personalized NETWORK ACQUISITION OF CAPITAL BANK FINANCIAL CORP. SECURITY testing tailored to your First Horizon National Corporation announced that it completed its acquisition of Capital Bank Financial Corp. size and complexity. Capital Bank Financial merged into First Horizon, and its subsidiary, Capital Bank Corporation, merged into First Tennessee Bank National Association. Go beyond a checklist with a risk- SOUTH STATE CORPORATION AND based IT AUDIT, reviewing for PARK STERLING CORPORATION COMPLETE MERGER South State Corporation announced the completion of its merger compliance and adequacy. with Park Sterling Corporation. Park Sterling Bank, the Park Sterling Corporation bank subsidiary, has merged with South State Bank, a South Carolina banking corporation and the wholly Participate in uniquely designed, role- owned banking subsidiary of South State Corporation. based cybersecurity EDUCATION. UNITED COMMUNITY BANKS, INC. COMPLETES MERGER WITH NLFC HOLDINGS CORP United Community Bank (“United”), the banking subsidiary of United Community Banks, Inc. (NASDAQ:UCBI) has completed its merger, effective February 1, 2018, with NLFC Holdings Contact Alexis Gamewell Corp. (“NLFC”) and its wholly-owned subsidiary, Navitas Credit Corp. (“Navitas”), headquartered in Ponte Vedra, Florida. 501-744-6276 | [email protected] www.sbscyber.com SBS CyberSecurity was previously known as Secure Banking Solutions. Carolina Banker | Spring 2018 57 FROM THE BANKERS Banks Backing Their Communities NORTH STATE BANK ANNOUNCES 15TH ANNUAL SUMMER SALUTE FOR TRANSITIONS LIFECARE Now in its 15th year, North State Bank's Summer Salute has donated over $1.5 million to Transitions LifeCare, the leading provider of hospice and palliative care in Wake County and the surrounding area. Funds provided from Summer Salute support programs for families who otherwise could not afford care. North State Bank announced that their 15th Annual Summer Salute for Transitions LifeCare will be held on May 5, 2018, at North Ridge Country Club in Raleigh. North Carolina’s own “The Embers” with Craig Woolard will provide beach music while attendees enjoy food, fun and dancing. WELLS FARGO HOLIDAY FOOD BANK POP-UP IN CHARLOTTE Wells Fargo’s Holiday Food Bank Pop-Up first arrived in Charlotte on Saturday, December 16, at SouthPark Mall, and visited several locations until December 20. The bank's Food Bank Pop-Up arrived with the goal of supporting local food banks, including Second Harvest Food Bank of Metrolina, and raising awareness of hunger and those in need over the holidays and beyond. As part of the program, the public was invited to drop off non- perishable food items or donate money at the pop-up. In addition, food donations were also being accepted at all Wells Fargo branches in the Charlotte area. FIRST BANK ANNNOUNCES FINAL NON-PROFIT PARTNER FOR ITS "DREAM IT. DO IT." CAMPAIGN First Bank has selected Northern Moore Family Resource Center (NMFRC) as its final nonprofit partner for the bank's "Dream It. Do It.", a yearlong campaign that will award up to $100,000 to deserving individuals in the Carolinas to help them achieve their dreams. First Bank has already contributed $50,000 to help fulfill the dreams of four families in North Carolina and South Carolina. First Bank will donate $10,000 to NMFRC for its participation in the "Dream It. Do It." campaign, a project that a group that works to provide resources for families in northern Moore County to develop healthy children and thriving communities. NMFRC programs include HOPE (Harnessing Opportunity—Promoting Education) Academy preschool, which has more than tripled access to early childhood education, and work with the Town of Robbins on economic and community development initiatives, such as improving access to affordable housing and providing free tax preparation to families in northern Moore County. 58 Carolina Banker | Spring 2018 The Only Captive Partner You Will Ever Need Financial Institutions can enjoy many benefits by implementing a captive insurance subsidiary including: • Manage Enterprise Risks such as Cyber & Breach of Data, Regulatory Audit, & Fraud/Defalcation • Increase Shareholder Equity & Earnings Per Share • Build Regulatory Capital • Reduce Insurance Costs There’s a reason why we’re the industry’s fastest growing captive management company: • The most respected Best-In-Class • Committed to customer service experts in the industry • Compliant with banking regulatory • No hassle, Turn-Key approach best practices • All-inclusive fee structure • Industry Recognition & Award Recipient At Oxford Riisk Mana agement Group, we specialize in con- We bring together the right partners with expertise ducting captive feasibility analysis and coordination of where it matters most, to deliver the highest turn-key captive insurance company arrangements. As possible degree of long-term success for your an alternative risk and captive insurance consulting captive insurance company. company, we’re focused on coordinating design, imple- mentation, regulatory approval and management of captive insurance companies. To learn more, please contact: Kevin E. Myers, CPA, Principal 410-726-1034 [email protected] David M. DiMayo, ACI, CEO 410-236-1080 [email protected] www.OxfordRMG.com PRSRT STD U.S. Postage PAID PPCO P.O. Box 19999 Raleigh, NC 27619-9916 SEPTEMBER 24-26, 2018, AT THE STATEVIEW HOTEL IN RALEIGH This conference is a fusion of our traditional CFO Symposium, Management Team Conference, Credit Conference and Security Summit... You will have the opportunity to hear from experts in your individual field as well as general financial industry updates. Registration will be offered for your role-specific track in addition to a full forum registration for those who wish to choose their own path. Exhibit and sponsorship opportunities will be available! Look out for more information at our website, newsletter, and social media. Join the North Carolina Bankers Association this year at the first annual Fusion Forum.