THE TEXAS INDEPENDENT

VOLUME XL NO. 1 BANKER JANUARY/FEBRUARY 2014

20 IBAT's 2014 Education Schedule By Julie Courtney, CAE, CMP

24 Implementing a Successful Strategic Plan Involves a Multi-Level Approach: Connecting the Dots Between Drafting the Plan and Successful Results

By Keith Hughey

26 Organizing Sales & Marketing Data to Improve ROI

By Guenther Hartfeil

30 What Banks Should Know About the End of Support for XP By Denney James

32 Tech Mecca 2014: The Premier Technology Conference & Expo for Financial Institutions

34 Are You One of the 20%?

Bonnie Kankel / Editor in Chief By Steve Scurlock Mary E. Lange / Contributing Editor Darlene Revers / Advertising Manager Leslee Walker / Advertising Assistant John Wilson / Cover Design/Illustration Barbara Jezek / Design/Production

IBAT’s bi-monthly magazine, The Texas Independent Banker, welcomes letters from readers. The Texas Departments Independent Banker, January/February, Volume XL, Issue 1. Published bi-monthly by the Independent Bankers Association of Texas, 1700 Rio Grande Street, Suite 100, 4 Up Front Austin, TX 78701, 512/474-6889, FAX 512/322-9004. 16 Personnel Update Inquiries should be sent to the Editor. Editorial guidelines are available upon request. Advertising rates may be Foundation Footprints obtained by contacting Advertising Sales at 800/749- 6 Association News 4228 or 512/474-6889. Advertisements do not imply 18 sponsorship by IBAT. ©2014 by the Independent Bankers Services Solutions Association of Texas. No part of this publication may be 8 IBAT Calendar reproduced in any form without written permission of 42 the publisher. Opinions expressed in this publication do not necessarily reflect official policy of the Independent 10 Frontline Leadership Bankers Association of Texas. 44 IBAT Around the State General Counsel’s Corner 12 45 Advertising Directory Interest Rates 14 46 Compliance Guy Quote: Chris Williston

January/February 2014 www.ibat.org ★ 3 Up Front

Resolutions

nd so we begin another year. past two years our communication efforts have resulted in over Don’t count me among all the well-intentioned 500 media stories and opinion pieces. people who start each year with a myriad of New Year’s We will continue to pound away with supporting media resolutions. I learned long ago that deciding one day efforts making the case that community banks are essential to change one’s longstanding behavioral patterns was to small business lending and economic growth and should Anothing more than an exercise in futility. not be subjected to rules governing too big to fail financial Lose weight. Better manage time between family and work. institutions. Sign up for debit processing with Travel less. Say “no” more often. I’ve tried and failed. The end An Invaluable Compliance Resource always justified the means. IBAT has made the commitment to assist our member insti- Business resolutions are different. Constructed primarily and get instant issue for tutions in navigating the maze of current and prospective regu- from budget expectations built from the strategic plan, they are lations resulting from the passage of Dodd-Frank, and we believe more easily managed and monitored. And executed correctly, it to be disingenuous to profit from an industry desperately seek- Instant-issue allows you to make new and replacement debit cards in your branch lobby these resolutions often result in celebration rather than failure. ing support and guidance. using secure, table-top equipment. Once the card information is entered into the system, I’m proud of the effort the IBAT management team and We will continue to make available access to our experi- our very dedicated volunteers put into the strategic planning it only takes about a minute to produce a personalized debit card. Your cardholder enced team of legal counsel and compliance specialist free of and annual budgeting process. All initiatives are measured charge and expand our compliance forum to share best prac- leaves the branch with a new debit card in hand and ready to use! against one objective: does the product or service add value to tices and collaborative problem solving among IBAT’s member membership? institutions. So what have we resolved for 2014? Here are our top five For a very limited time, will provide equipment, project management priorities. Help Members Manage Non-Interest Expense expertise, installation and training to financial institutions that sign up for EFT processing IBAT Services continues to search for cooperative group Double Down on DC Lobby Efforts – all at no extra charge! buying opportunities through its endorsed product and service We acknowledge that it is almost impossible to manage offerings. Members benefitted by effective lobby efforts from 2,000 miles away. And while IBAT receiving over $2.5 million in But hurry! This offer may expire in an instant! staff has an excellent relationship with members of the Texas direct discounts in 2013. Congressional delegation and actively engages in the legisla- The addition of the full Dell tive and regulatory process with the ICBA, the IBAT Board Since 1975, TransFund has been providing product line of desktops, laptops, has committed even more financial resources in 2014 to work servers and hardware and software EFT processing to community financial on advancing legislation to reduce the oppressive regulatory accessories will likely double the environment. institutions. Our mission is to help aggregate member savings in 2014. IBAT has secured additional “feet on the ground” in DC maximize EFT profitability for our IBAT’s insurance subsidiary, by retaining the services of the Policy Resolution Group of IBAT Financial Services, will con- clients, while providing new and Bracewell and Giuliani effective January 1. In addition, IBAT tinue to expand its product line and will continue its longstanding relationship with Jim Wise of the exciting products and services to insurance underwriters to secure PACE Group for DC lobbying efforts. help clients grow. competitive pricing to managing christopher l. Few state associations can match the financial commit- financial exposure and risk. williston, cae, is ment we have made to improving the community bank business President and Chief model, and advancing our long-term goal of achieving a two- Educational Offerings Executive Officer of the tiered regulatory system. Second to None Independent Bankers More than 10,000 directors, Telling the Community Bank Story officers and employees partici- Association of Texas. Call TransFund today at 405.401.9469, IBAT and ICBA have made great strides through aggres- pated in IBAT educational sum- 713.446.5292, [email protected], sive public relations and social media efforts in segregating com- mits, workshops, conferences and munity banks from the systemically risk-averse banks. Over the (Continued on page 42) [email protected] or visit

4 ★ The Texas Independent Banker January/February 2014 INSTANT GRATIFICATION.

Sign up for debit processing with TransFund and get instant issue for free!

Instant-issue allows you to make new and replacement debit cards in your branch lobby using secure, table-top equipment. Once the card information is entered into the system, it only takes about a minute to produce a personalized debit card. Your cardholder leaves the branch with a new debit card in hand and ready to use!

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Call TransFundd todaytodtoodadayayy atat 4405405.401.9469,005.5.44001.1.994469, 713.446.5292,92,2, [email protected],[email protected], [email protected] oorr vvisitissit www.transfund.com.sfuunndd.c.cocomomm.. Foundation Footprints

Community Bankers Get It

Changes to the Board In the December issue of The Texas Independent Banker, we were delighted to announce that Kay Bailey Hutchison had accepted the position of the Foundation’s honorary chairman. I also am delighted to announce several additional changes as we lace up our running shoes and prepare for 2014. Ringing in the new: Mack Neff, President & CEO, Integrity Bank, Houston Mary Scott Nabers, President and CEO, Strategic Partnerships, Austin Cliff McCauley, Senior Executive Vice President, Frost, San Antonio Steve Sievert, Executive Vice President, Communications-Market- ing, PULSE, Houston These outstanding new board members share our vision and t the beginning of a New Year, we pause to recognize will be contributing to the conversations at the board table and the IBAT Education Foundation as it moves forward working together with our fellow board members: into 2014. Let me begin with our most recent celebra- Charles T. Doyle, Chairman, Texas Independent Bancshares, tions and close with the exciting changes to the Foun- Texas City dation Board of Directors. Gary D. Edmiston, Senior Business Consultant, UT Permian A First the celebrations: Basin Small Business Development Center In late December, the Foundation was awarded a $30,000 Catherine Ghiglieri, JD, President, Ghiglieri & Co., Austin grant from the Office of Consumer Credit Commissioner (OCCC) Charles E. Greef, Partner, Hunton which administers the Texas Financial Education Endowment and Williams, Dallas Fund, to support the IBAT Teach the Teacher™ financial literacy Ken Greer, Advisory Director, First program. In 2014, we are planning to hold this award-winning National Bank-Mount Vernon 6 hour program in the Texas Education Agency Service Centers Robert Hulsey, President & CEO, of Edinburg, Fort Worth, Wichita Falls, San Angelo and Beau- American National Bank of mont. Thanks to the growing local focus with community banker Texas, Terrell sponsors and PULSE, we have already taken this program to eight Mary Lange, President, IBAT Edu- other regions of the state as we move toward our goal of taking the cation Foundation, Austin IBAT Teach the Teacher™ to all 20 TEA regions. Bobbie McMillan, President & And, in late December, our community bank members were CEO, The Commercial Bank, generous in their year-end contributions. We had met our bud- Mason geted goal the night before Christmas, and I am happy to report Michael Thompson, President & Willard J. Still is here in the first quarter that we have exceeded our expectations. CEO, Extraco Banks, Temple the Board Chairman This makes our story to the corporate community even more Ringing out the old: of the IBAT Education compelling when they see our own members “getting it,” and While we are delighted with Foundation and Vice financially supporting our Foundation and its mission of build- our progress, I would be remiss if Chairman of American ing financially literate communities. As a reminder to our board I did not also celebrate the board Bank, N.A. in Waco and staff that these efforts are not a sprint, what we have under- members who have helped us reach taken is in fact a marathon! (Continued on page 41)

6 ★ The Texas Independent Banker January/February 2014

services solUtions

Going Online is Key to Growing Your Business

rom pizzas to potential homes, consumers are shopping Enterprise is the affordable, scalable tool needed to level the online for everything — including mortgages for those playing field against large lenders. Enterprise gives bankers a homes. But many banks are missing out on business competitive edge over institutions that do not have web appli- because they don’t offer a robust online application. cations — better positioning them for future business growth. F IBAT Members are Turning to D+H Mortgagebot Advanced Compliance Support To help lenders meet rising consumer demand for online Enterprise alleviates compliance burdens with solutions that options, IBAT has recently endorsed D+H Mortgagebot. Mort- provide accurate rates and fees, instant disclosures at the point of gagebot provides the industry’s only true end-to-end, Soft- sale, back-end processing (UCDP, UAD, ULDD, Equifax UDM, ware-as-a-Service (SaaS) lending platform — Mortgagebot Fannie Mae Early Check), disclosure alerts to help meet RESPA, Enterprise®. TILA, MDIA and Regulation B, and automated updates – avail- Over 1,300 lenders nationwide — including many IBAT able only with 100% web-based, cloud technology. members — use Enterprise to provide self-serve applications online while still maximizing every branch opportunity. Looking Ahead Through the Cloud Using innovative cloud-computing technology allows In 2012, 53 percent of Mortgagebot clients originated more lenders to stay open around the clock, allowing borrowers to than half their volume through Enterprise — and these num- complete applications anytime bers are projected to rise as volume and rates continue to drive and anywhere it’s convenient for demand for online technology. them. And applicants find the Industry fluctuations make online-application capability a application process, which takes necessity for long-term lending success. Built-in optimization of as few as 20 minutes, an easy, sat- online-application capability has changed the face of mortgage isfying experience. lending because of its success in adjusting to external factors, In the branch, Enterprise and the channel (by far the low- empowers all associates to quote est cost channel for loan-volume rates and complete applications to better serve borrowers and growth) can give lenders cost-effi- alleviate the workload for loan officers. The web-based solutions cient scalability through the right empower loan officers to be more productive and mobile, and platform. ★ deliver instant disclosures, eliminating bottlenecks and easing compliance complexities. To learn how D+H Mortgagebot can The platform eliminates cumbersome, manual processes help you, contact Dustin McClelland and also helps streamline all processing requirements, increase at 281-256-9106 or dustin.mcclel- loan production, reduce operat- land@mortgage- ing costs and enhance service. bot.com. Enterprise’s processing through RoGERS PoPE, JR. post-closing capabilities provide is Chair of the iBAt lenders administrative interface, Services Board and real-time data management and Vice Chairman and more efficient, paperless docu- Chief operating officer ment imaging. of texas Bank and trust, Leveling the Playing Field for Longview. Community Lenders For community lenders,

8 ★ The Texas Independent Banker January/February 2014

Frontline Leadership

Success…Value…Involvement

can’t believe that 2013 is already over and we are starting The new structure has also allowed us to bring more value a new year. Even more so, I can’t believe that my term as to the membership through various regional meetings. From golf Leadership Division Chairman is halfway over. Time truly tournaments and sporting clay shoots, to networking events and flies when you are busy with so many successes as a Division. luncheons, to cocktail receptions and mixers, to learning about From the success in raising money for the PAC at last fall’s credit scores and even a family fun day at a water park, we have IIBAT Convention to the continued rollout and success of the offered it all…and we aren’t stopping there. Check the IBAT new Leadership Division structure, 2013 was good and 2014 will website for upcoming events in your region and if there is some- be even better. thing you want to hear about or do, please let us know and we Membership in the IBAT Leadership Division is at an all will do our best to bring it to you! time high, with the current number of members as of this writ- A heartfelt congratulations to my dear friend Julie Mayrant ing at 563. With the wildly popular success of last summer’s with Woodforest National Bank for being selected by IBAT Leadership Division Conference to the many regional meetings Chairman Jay Gober to serve on the IBAT Board of Directors. held across the state to the success of the new regional structure, Julie’s hard work and commitment to the Leadership Division more and more community bankers are seeing the value of being and community banking made her an easy choice as one of Jay’s a part of the Leadership Division. If no one in your bank has Chairman Picks for appointment to the IBAT Board. Although become involved, I encourage you to take the time to do so. You we will miss her on the Leadership Board, she will be an excel- will not be disappointed. lent member of the IBAT Board. Don’t forget IBAT’s TechMecca Conference coming up

LD Area Region 4 next month at the Renaissance Arboretum in Austin. This is LD Area Region 1 an opportunity for community bankers across the state to gather 1 LD Area Region 3 LD Area Region 5 and see and hear what is new and evolving in technology as it relates to our industry. It is not just

LD Area Region 2 for the techies at your bank. If you 3 4 2 5 are involved in the management of your bank, you need to be there. It is one of the best events you will 6 8 9 LD Area Region 6 attend this year! 7 Also, please consider partici-

LD Area Region 7 10 pating in the IBAT Congressional LD Area Region 9 LD Area Region 8 visit in Washington DC on April 11 LD Area Region 10 29–May 2. You may not think you LD Area Region 11 can make a difference, but I assure you the whole is much more power- ful than the individual pieces. It is Speaking of the new structure, the remaining regions will KEVIN MONK vitally important that our congres- convert to the new regional structure early this year. It seems is Chairman of the like only yesterday when we began discussions on ways to get sional leaders hear and see us and Leadership Division and bankers involved in the Leadership Division. Through the new the passion we have for community Senior Vice President at regional structure, there is a place and a role for every commu- banking. Make plans to attend. Alliance Bank in Sulphur nity banker who wants to volunteer their talents to the Leader- “Alone we can do so little; together ship Division. Regions 1 and 5 will conduct elections in March Springs. we can do so much” — Helen Keller for new chairpersons in those regions. If you are a member in either region and are interested in being involved in that capac- Until next time…God Bless! ity, please let us know. Kevin H

10 ★ The Texas Independent Banker January/February 2014

GENERAL cOUNSEL’S CORNER

Mining the Internet for Compliance Resources

egulatory compliance burden has taken first place in Compliance Guides that are very readable and helpful. In addi- the race for biggest threat to community banking. The tion, there are videos on each of the mortgage rules which can be number and complexity of rules just keeps growing at watched online. Alternatively, you can print out the transcript. an amazing pace. This translates to increased costs to banks just to keep up. In smaller institutions, compli- Training Materials Rance officers commonly wear multiple hats. Thus, it is important The FDIC’s web page includes under “News & Events” its to be able to find good sources of information. And when that links to various meetings and conferences. Training materials information is freely available, that is even better. and PowerPoint presentations on a variety of topics are avail- So, let’s look at the Internet to find those sources. able. These include CRA, Compliance Management, Cyber Fraud, Director’s Roles and Responsibilities, Fair Lending, Flood IBAT Web Page Insurance, Interest Rate Risk, Third Party Risk, and more. For IBAT members, one of the first and best resources is Similarly, the Federal Reserve has a specific web page quite simply the association’s web page (ibat.org) and newslet- devoted to directors called Bank Director’s Desktop. It includes ters. The legal section includes Capitol Comments, a monthly training for directors. In addition, it links to the OCC publica- recap of regulatory news and changes, which includes quick tions for directors! These OCC publications include the Direc- links to the primary sources along with a helpful analysis. The tor’s Toolkit, which includes several guides as well as The Direc- weekly e-Newsletter includes the hottest news along with the tor’s Book—The Role of a National Bank Director. legal case study for the week (Legal Ease). Bankers can share knowledge in the IBAT Compliance Forum. In addition, there Consumer Education are white papers on compliance topics and a cache of the Legal Many banks provide newsletters to their customers. In addi- Ease columns. tion, they need educational material on overdraft protection and how to avoid excessive overdrafts Regulatory Web Pages in order to satisfy Best Practices. Each of the state and federal regulators has its own web Both the FDIC and the Fed have page. Each of these has a search feature. These pages typically brochures that can be downloaded include links to regulations, examination materials, handbooks, and then used to meet this need. consumer resources, guidance, interpretative letters and other In addition, the FDIC has an array useful material. As a practical matter, this means that you can of consumer news and informa- pull up federal regulations online rather than subscribe to a ser- tion resources, including a regular vice. Also, you have ready access to explanatory materials. For newsletter, which can be a good example, the exam manuals explain various regulations. The outreach tool for a community Interagency Fair Lending Examination Procedures is an excel- bank. For many years, the FDIC lent explanation of fair lending rules and expectations. has made available a brochure on The FDIC has an institution directory which can be used to Your Insured Deposits. In addition, obtain info on other banks and holding companies. Similarly, the Karen Neeley there is a deposit calculator avail- state regulators have sections for their regulated entities. Thus, received her BA and able online, which can be useful at you can quickly check on the license status of a mortgage broker, JD from the University the new accounts desk. insurance agent, money service business or other entity that is of Texas at Austin. required to have a state license or registration. This can be very Updates She is a director for useful as part of due diligence on new customers or vendors. Virtually all of the regulatory the Texas Association The CFPB’s web page is aimed more at consumers than at web sites include a way to subscribe of Bank Counsel and financial institutions. However, its “Law & Regulation” section to that agency’s e-mail news list. General Counsel for the This is free, but it can quickly fill includes regulations, guidance, and a very complete resource Independent Bankers up your inbox! However, you will on the mortgage rules. These include online Small Entity Association of Texas.

12 ★ The Texas Independent Banker January/February 2014 get proposed and final regulations when they come out (before useful material on pending and passed legislation. In addition, they are actually printed in the Federal Register), news items, it links to the Legislative Reference Library as well as the Texas guidance and other resource material. For example, FinCEN Administrative Code, constitution and statutes. Unfortunately, (Financial Crimes Enforcement Network) publishes guidance these are not updated quickly for the changes from the most from time to time on various BSA issues. These can be received recent legislative session. However, they are a good starting from the FinCEN Update subscription as they come out. The point. Texas Department of Banking publishes a regular newsletter that Employment Law summarizes and links to important regulatory developments. Both the Texas Workforce Commission and the U.S. Due Diligence Resources Department of Labor have web pages that provide a wealth of The Texas Secretary of State has a portal, SOSDirect, which information about state and federal employment laws, including provides inexpensive, quick filing for UCC-1s and the like as workplace posters which can be downloaded. The DOL material well as for corporate and other business organization filings. In includes simple “fact sheets” from the Wage and Hour Division addition, it provides great search capabilities. This can facilitate on the Fair Labor Standards Act as well as basic information on a bank’s verification of customer ID under the Customer Identi- all federal employment laws. fication Program required by the USA PATRIOT Act as well as Other Resources helpful information for loan underwriting. Even if the agency is closed, the web page is always “open for business.” The items described above are the most significant to In addition, it is always smart to perform a search through financial institutions as they grapple with the growing regula- Google or some other search engine to look for news items, liti- tory compliance matters. Of course there is much more that is gation in the news, complaints and the like. useful—like the U.S. Census page, EDGAR (for SEC filings), and other state and federal agency material. And there is much Texas Legislative Resources that is just for fun—or a time waster—depending on your per- The Texas Legislature Online is a very comprehensive web spective! Hopefully this quick overview will provide you with site that includes information and links to the Texas House and new ideas about ways to mine the Internet for free compliance its members as well as the Texas Senate and its members. It has materials. H

January/February 2014 www.ibat.org ★ 13 interest rates

Interest Rate Risk Winning the Performance Challenge A Priority for 2014 For 35 years, The Baker Group has helped community financial institutions steer through unpredictable economic environments with the use of robust tools and resources for interest rate risk and investment

The Banking Environment: 2. Does our IRR model shock the fair value of regulatory and portfolio management. Moving through 2014, we must set our focus on strategies that raise our As we move into a new year, the US economy continues to risk-based capital ratios as well simple equity capital? and meet new challenges. Our task is to help financial institutions develop effective 3. Do we have a way to model faster re-pricing liabilities rela- plod along at a slow and steady pace. Things are getting better, processes and strategies for optimal in any environment. but we’re still far from where we were before the “Great Reces- tive to earning assets? sion” began. Meanwhile, the banking landscape has improved 4. Are “floors” on loans modeled properly in our IRR system? markedly as earnings have clocked sixteen consecutive quarters 5. Do we have reports that show how our balance sheet liquid- Our proven approach of total resource integration of year-over-year increase. Returns on assets remain below pre- ity is affected by rising interest rates? utilizing software and products developed by Baker’s recession levels, but they’re higher than a year ago and com- 6. What if we just want to look at securities cash flow? fortably above one percent. Much of the improved performance Risk Management decision-making depends on thorough Software Solutions* — combined with our solid investment and meaningful data in a useable report format. The five ques- comes from healthier asset quality. Loan losses have declined experience and advice — makes us the investment firm of to levels not seen since 2007, and provisions have fallen nearly tions above are good ones to consider when assessing the ade- forty percent. All of this is good news, but make no mistake; quacy of an IRR reporting system. choice for financial institutions. When facing the challenge banks face a multitude of challenges ahead. Risk, Capital, and Stress Tests: of an uncertain environment, The Baker Group can help Spotlight on Interest Rate Risk: It makes good sense to measure and monitor the relation- you win the performance challenge. Not the least of these challenges is that of potential inter- ship between unrealized losses and capital. And this extends est rate risk. Regulatory agencies have once again elevated IRR to various measures of capital itself. For example, if we apply Asset/Liability Management for High Performance the mark-to-mark adjustment for securities to risk based capi- as a focal point for examiners, as evidence suggests that many Evaluate Earnings and Capital at Risk tal measures, we can more closely capture a total picture of the financial institutions are taking on higher levels of interest rate Simulate Stressed Rate Scenarios bank’s relative risk. All else being equal, a bank that makes rela- risk. Balance sheets have changed noticeably in recent years as Analyze Risk Management Strategies loan demand has been weak and short-term rates have hugged tively few loans can sometimes justify a higher level of interest historic lows. This could leave them significantly exposed to a rate risk than a bank with a high loan/deposit ratio. Similarly, sustained increase in interest rates. well-capitalized banks with pris- High Performance Investment Strategies In October, the FDIC released an FIL on Sensitivity to Mar- tine asset quality can tolerate more Develop Quarterly Strategies ket Risk (IRR). Simultaneously, the OCC conducted a webinar interest rate risk than those with Determine Optimal Relative Value to address the IRR issues they thought most important. There high “Texas Ratios.” Manage Risk vs. Reward Tradeoff is a consensus among regulators that the essential risk for banks Institutions should run stress stems from long-term (or high duration) assets funded by non- tests on assumptions for non- maturity deposits that have surged into bank balance sheets in maturity deposits in IRR models to Education for High Performance the wake of the Great Recession. The influx of “surge depos- identify exposure to rising rates and Tailored Board Education its” has regulators concerned about the potential for fast rising higher interest expense. Back tests Webinars for ALCO interest expense from rate sensitive liabilities. At the same time, and assumptions reviews should Interest Rate Risk Seminars asset values could come under greater pressure than in past rate ensure that floors on loans are being cycles because effective durations are relatively high. The price modeled properly. The dynamics of JEFFREy F. CAUGHRon risk of some investment portfolios has increased significantly in balance sheet cash flows should be is Associate Partner with the past few years due to lengthened maturities, options risk, reported and reviewed, and invest- To find out how The Baker Group can assist your institution in defining and meeting its financial and declining yields. ment cash flow projections tracked The Baker Group LP objectives, call your Baker representative or Ryan Hayhurst at 800.937.2257. for different rate environments. Management Tools: Banks have again been given The regulatory concerns should cause bank mangers to pon- a “heads up” from examiners on der several questions about the reporting tools that they have at interest rate risk. With proper their disposal: reporting tools, good policies, and 1. Do we have reports that project securities depreciation rela- sound processes, the regulatory tive to capital in a rising rate environment? (Continued on page 42) Member: FINRA and SIPC Oklahoma City, OK Austin, TX Birmingham, AL Indianapolis, IN Salt Lake City, UT Springfield, IL 800.937.2257 14 ★ The Texas Independent Banker January/February 2014 *The Baker Group LP is the sole authorized distributor for the products and services developed and provided by The Baker Group Software Solutions, Inc. Winning the Performance Challenge

For 35 years, The Baker Group has helped community financial institutions steer through unpredictable economic environments with the use of robust tools and resources for interest rate risk and investment portfolio management. Moving through 2014, we must set our focus on strategies that raise our

performance and meet new challenges. Our task is to help financial institutions develop effective processes and strategies for optimal performance in any environment.

Our proven approach of total resource integration utilizing software and products developed by Baker’s Software Solutions* — combined with our solid investment experience and advice — makes us the investment firm of choice for financial institutions. When facing the challenge of an uncertain environment, The Baker Group can help

you win the performance challenge.

Asset/Liability Management for High Performance Evaluate Earnings and Capital at Risk Simulate Stressed Rate Scenarios Analyze Risk Management Strategies

High Performance Investment Strategies Develop Quarterly Strategies Determine Optimal Relative Value Manage Risk vs. Reward Tradeoff

Education for High Performance Tailored Board Education Webinars for ALCO Interest Rate Risk Seminars

To find out how The Baker Group can assist your institution in defining and meeting its financial objectives, call your Baker representative or Ryan Hayhurst at 800.937.2257.

Member: FINRA and SIPC www.GoBaker.com Oklahoma City, OK | Austin, TX | Birmingham, AL | Indianapolis, IN | Salt Lake City, UT | Springfield, IL| 800.937.2257 *The Baker Group LP is the sole authorized distributor for the products and services developed and provided by The Baker Group Software Solutions, Inc. Personnel Update

Shannon Hinders Eubank Corpus

Peterson Brown Mason

Andrews of Applied Banking. Hinders began his Administration degree from Wayland J. Russell Shannon has been elected banking career as a credit analyst with Baptist University. to the Federal Reserve Bank of Dallas Happy State Bank in 1992. He has served Houston board of directors by its member banks. He in many capacities related to lending and s has been appointed will serve a three-year term starting Janu- most recently as executive vice president David Corpu by Governor Rick Perry to the Teacher ary 1, 2014. Shannon, president, CEO and in charge of lending. Retirement System of Texas Board of chairman of the board of National Bank of J. Alan Eubank has been promoted to Trustees with a term to expire in 2019. Andrews for the past 27 years, has 35 years president of the Pampa market for Happy Corpus is a senior vice president of Com- of experience in the banking industry. As a State Bank. He joined Happy in 2011 and munityBank of Texas in its Houston Dallas Fed board member, he will provide has served as senior vice president in com- region. With 29 years in finance and bank- input into regional economic conditions mercial lending since that time. Eubank ing, Corpus has also been involved with as part of the Federal Reserve’s monetary graduated from Texas Tech University the creation of charter schools in Texas policy functions. Shannon is a graduate of with a Bachelor of Science degree in for the past 17 years. As one of nine board Sam Houston State University and Texas Agricultural Economics and Finance and members, Corpus will serve as a trustee Tech University Intermediate School of has over 17 years of banking experience. for the $117.5 billion TRS trust fund, Banking. Ryan Monroe, who previously served securities and other assets. He earned his as president of Happy State Bank’s Pampa Bachelor’s degree and Master of Business Happy market, has relocated to Amarillo. He Administration from Our Lady of the Gary Hinders has been elected presi- joined the bank in 2008 and has 18 years Lake University at San Antonio. dent of Happy State Bank. Hinders gradu- of banking experience. Monroe will serve ated from West Texas A&M University as senior vice president in commercial, oil Debbie Peterson has been named with a Bachelor’s of Science degree in and gas lending at the Amarillo down- vice president and director of compliance Agriculture Business and Economics. He town location. He will continue work- for Integrity Bank. Peterson’s 38 years of is also a graduate of the Southwest Gradu- ing with his existing lending relation- banking experience have been mostly in ate School of Banking at Southern Meth- ships and assist in Pampa when needed. the lending division, focusing on resi- odist University and Texas Tech School Monroe obtained a Bachelor’s of Business dential construction. Debbie recently

16 ★ The Texas Independent Banker January/February 2014 achieved the designation of Certified Community Bank Compliance Officer, and is an active member of IBAT and Jr. Achievement. Integrity Bank recently opened two new locations, now serving experience access clients in The Woodlands and in South- east Houston.

Longview Barry Brown, a naval reserve captain with more than 30 years’ banking experi- BKD National Financial Services Group ence, has joined Texas Bank and Trust as president of the bank’s Dallas market. Brown will lead the bank’s expansion into the north Texas Metroplex. He served 1:5 PARTNER TO STAFF most recently as president of the Bank of the Ozarks’ Manatee-Sarasota market, On site = insight. When you work with BKD National Financial Services Group, expect attention located on the Florida Gulf Coast. Brown from partners and managers you’ll see and hear from regularly. BKD’s partner-to-staff ratio is lower than the 1-to-9 average found in other national firms. Experience how our personal holds a Bachelor of Arts degree in Busi- and responsive service style can help take your financial institution to the next level. ness Administration/Finance from South- eastern Louisiana University. A Captain Debbie Scanlon Jon McDowell in the United States Navy Reserve, Sup- [email protected] // 713.499.4600 [email protected] // 210.341.9400 ply Corps, Brown is an Operation Desert Doug Van Meter bkd.com [email protected] // 405.606.2580 Shield/Desert Storm and Iraqi Freedom veteran. Paul Mason has joined the staff of Texas Bank and Trust Company as vice president and portfolio manager in the bank’s trust division. Mason has over eight years of experience in the investment man- agement field, and most recently worked in Northern Trust’s Houston office as an associate portfolio manager. In his new role with Texas Bank and Trust, he will be responsible for managing existing portfo- lios for trust, retirement plan services and investment management accounts, as well as helping to develop new business for the division. Mason holds a bachelor of busi- Data Protection ness administration degree from Abilene Christian University. $74,000 per hour downtime - That is the average cost associated with system failure for mid-sized businesses. When disaster strikes, data recovery can take hours or even days without the right solution. Is this downtime cost something your organization can San Angelo afford? Find out how AvTek Solutions can help you prevent costly downtime. CalTech has announced that Mark We offer technology solutions that cover the entire information life-cycle, from strategy Conlon and Eric Durbin were recently and design to operations ‘Best Practices’. Each solution is tailored to your environment. promoted to mentor, the highest level engineer at the company. The mentor Virtualization | Networking | Storage | Servers | Data Protection role is a technical role but also a leader- Monitoring & Compliance | Access | Managed Services ship role in which the mentor works with growing engineers to develop their tech- 214.778.2983 nical skills as well as customer relation- www.avteksolutions.com ship skills. Conlon has been with CalTech for six years, and Durbin has been with CalTech for five years. ★ Designing IT solutions for your future.

January/February 2014 www.ibat.org ★ 17 Association News

First American Payment Systems Newtek Business Services banking products,” Tom Cypher, presi- Offers Next Day Merchant Funding Selected to Service $400 Million dent of product management and devel- opment at Fiserv, said. “FraudMAP is the First American Payment Systems Loan Portfolio latest addition to our existing suite of pro- recently announced the release of Next Newtek Business Services, Inc. tections and provides a new and proven Day Funding, which allows qualifying announced that its subsidiary Newtek approach to detecting suspicious account merchants to receive their funds in half Small Business Finance, Inc. has been activity and payments.” the time of traditional processing time- selected to service a $400 million portfolio lines. Next Day Funding will positively of SBA 7(a) loans for a large institutional H impact businesses that rely on cash flow client. The servicing has transferred and IBAT ESPs Honored Among Top to meet operational obligations. is currently part of Newtek’s loan servic- FinTech Companies “In a year marked by enhancements ing portfolio. Several of IBAT’s Endorsed Service to our mobile solutions and the introduc- “We are extremely pleased to Providers made the list of American tion of our proprietary tablet POS system, announce that our total loan servicing Banker’s FinTech100 – Top 100 Compa- we are excited to announce the addition portfolio has exceeded $1.0 billion, a level nies in Fintech. Those honored at this of Next Day Funding to our partners and that not only represents a milestone in year’s event included: merchants,” Neil Randel, chief executive the company’s operating history but also • Diebold, Incorporated officer of First American Payment Sys- exceeds our previously stated expecta- • First Data tems, said. tion,” Barry Sloane, chairman, president • D+H and chief executive officer of Newtek H • Computer Services, Inc. Business Services, Inc. said. Diebold Helps Secure One of the Additionally, the following IBAT associate members were also included on Largest Gold Mines in the World H the list: Fiserv Announces Guardian Diebold, Incorporated is helping to • ACI Worldwide, Inc. secure Pueblo Viejo Gold Mine, one of the Analytics FraudMAP Solutions • BancVue Ltd largest gold mines in the world. Located Fiserv, Inc. announced that it will • FIS in the Dominican Republic, the Pueblo offer Guardian Analytics FraudMAP • Jack Henry & Associates, Inc. Viejo Mine has proven and probable gold solutions, delivering integrated behav- • Total System Services, Inc. reserves of 25 million ounces. ior-based anomaly detection solutions to (TSYS) “Diebold’s experience in securing Fiserv consumer and business banking cli- H large sites helped us approach the Pueblo ents. The agreement provides Fiserv cli- Viejo Mine project holistically, defining ents with a new option for strengthening SWACHA Services Corporation security systems and strategies to mitigate layered security and meeting the Federal Partners with Aptys Solutions both external and internal threats,” Mike Financial Institutions Examination Coun- SWACHA Services Corporation has Mateo, vice president of the Latin Amer- cil expectations for anomaly detection. officially partnered with Aptys Solutions ica Division at Diebold, said. FraudMAP is widely deployed at to strengthen payment processing oppor- To secure this high-value site, Die- financial institutions to proactively pre- tunities for financial Institutions. Aptys bold installed and implemented advanced vent consumer and commercial fraud. The Solutions is able to consolidate payment video surveillance, access control, intru- solution protects against a wide range of processing including an end-to-end auto- sion detection and perimeter monitoring account takeover threats including mal- mated clearing house (ACH) solution for systems. The company integrated these ware, phishing, social engineering, vish- originating, analyzing, processing, receiv- systems via a customized software applica- ing, data breaches and payments fraud. ing, managing and monitoring ACH tion, enabling on-site security personnel “We are committed to providing our transactions. to efficiently monitor the entire property clients with industry-leading layered secu- “We chose to partner with Aptys in real time. rity solutions tightly integrated into our Solutions because of its turnkey ACH

18 ★ The Texas Independent Banker January/February 2014 solutions that provide strong competitive Survey, 88 percent of respondents stop solution that adheres to reporting advantages for our members and other cli- reported they pay at least one bill elec- regulations at both the state and federal ents,” Tim Quisenberry, AAP, president of tronically, up from 82 percent in 2009; levels. SWACHA Services, said. and nearly half of those indicated they “We wanted to keep Verifyde simple, Aptys’ ACH technology provides have increased their use of electronic so we created bundles to match each busi- financial institutions with a cost-effective payments compared to 12 months ago as ness type, with the specific state and fed- and efficient method for processing ACH payment method trends continue to shift eral reporting needs to match,” Dennis transactions through a unified payments from traditional paper checks to mobile Boggs, executive vice president of business platform. This offers lower transaction and online platforms. development at Calyx Software, said. processing costs and more efficient clear- H Additionally, Calyx Software has ing services for managing payments today expanded The Calyx Network with an and in the future. Calyx Software Introduces interface update. The Calyx Network SWACHA also reported that elec- Calyx Verifyde allows users of Point to connect directly tronic payments continue to rapidly Calyz Software now offers govern- with lenders and mortgage service provid- become the most preferred form of bill ment-required regulatory mortgage com- ers. The November update will be auto- payment among consumers, according to pliance reports through Calyx Verifyde. matically installed into Point versions 8.0 a recent survey of more than 600 Texans. This new product will create reports that and higher when users open their software In SWACHA’s 2013 Consumer Insights provide financial institutions with a one- and connect to the Internet. H

Looks like Happy State Bank needs a bigger drive-through.

January/FebruaryJanuary/February 20142014 www.ibat.orgwww.ibat.org ★★ 1919 IBAT’s 2014 Education Schedule By Julie Courtney, CAE, CMP

long with political advocacy, banker education stands at the center of IBAT’s mission. Through the IBAT Education Foundation, we’ve built a unique lineup of live summits designed to meet the needs of community bankers. IBAT leaders survey the landscape of changing regulations and new challenges to the industry, adapting our educational lineup to assist your staff and directors each year. AThere is no better way to nurture the future of our industry and the success of your enterprise than committing to education. Consider the variety of programs offered by IBAT — including education summits, Leadership Conference, cluster programs, webcasts and the Annual Conven- tion — to meet your staff’s educational needs in 2014. EDUCATION CALENDAR Winter Summit Hold, Fold or Raise? An M&A Workshop for February Community Banks February

pertinent issues with senior officials from 9-11• South Lake Tahoe • the OCC, FDIC, Fed and Banking Depart- This summit offers plenty of network- ment. Three of the preeminent banking 20-21• Dallas • ing opportunities and social time with the lawyers in Texas will address current hot speakers and other attendees, along with a topics impacting your bank and your bot- IBAT remains committed to a vibrant fabulous venue, reasonably priced accom- tom line. And, finally, you can take part and healthy environment for indepen- modations and lots of fun. Education in a lively discussion on the present state dent community banks and continues to sessions are designed to encourage audi- of the economy, predictions for the future work for legislative relief to foster long- ence questions and participation. You’ll and appropriate strategies for investing in term success for the industry. Neverthe- have the opportunity to candidly discuss turbulent times. less, we understand that market forces

20 ★ The Texas Independent Banker January/February 2014 inevitably may present you and your bank with opportunities to buy, sell or merge. Nuts and Bolts of Banking Summit Thus, we want to arm you with knowl- edge to make informed decisions in this April financially important area. Specifically, as a bank director, CEO or senior officer, you need to be fully prepared to objectively and capably assess whether the most appropriate strategic plan for your bank 29-30• San Antonio • involves being a buyer, merger partner, or perhaps, a seller. In this program, ideal for beginning bank employees, you will learn about the complete banking process, including how Credit Analysis Summit banking institutions are structured and How to Create and regulated along with what banks do and Maintain a Sales Culture in how they do it. This is also a perfect learn- March a Community Bank ing opportunity for bank suppliers who could use a primer on how a bank works. March Bank on Boot Camp 18• Dallas • This one day program is designed to June introduce critical financial and non-finan- 26-27• San Antonio • cial credit analysis considerations, docu- mentation, monitoring and other impor- This program explores the concepts tant factors central to the review of most and skills necessary to establish an effec- major loan types. The program emphasizes tive sales environment in your bank. You 3-4• Austin • ratio analysis, balance sheet and income will learn about the key components in statement trends, SFAS 95 cash flow anal- structuring a sales environment, how to IBAT teams up with SWACHA ysis and non-financial considerations criti- develop employees’ attitudes and abilities to bring you this two-day ACH educa- cal to sound underwriting principles. toward selling, as well as tools and tech- tional event designed to help you attack niques to identify customer needs and the ACH rules, explore new ACH rules, successfully sell your bank’s products and chart the course of the ACH return items, Advanced Credit Analysis Summit services. navigate the maze of an ACH file, and mitigate the risk management enemy in all its forms. (Continued on page 22) March Lending Compliance Summit April

19-20• Dallas • Intended for a more experienced audience, this program covers financial 17-18• San Antonio • statement analysis concepts and SFAS 95 cash flow analysis in more depth, applying This summit will provide an overview UCA cash flow analysis to specific types of recent regulatory changes, litigation of of loans. Case studies are used to cover interest and practical recommendations underwriting issues, policy guidelines, for implementation at community banks, working capital needs, business risks, col- along with moderated “best practices” ses- lateral valuation, borrowing base financ- sions. Come for the latest information and ing, and other issues as they pertain to an unparalleled opportunity to network commercial credits. and share ideas with your peers!

January/February 2014 www.ibat.org ★ 21 EDUCATION CALENDAR officers. The summit spotlights success- 29th Annual Leadership ful programs that earn CRA credit where 34th Annual Bank Operations Conference local bankers have promoted financial Institute (BOI) education initiatives, and demonstrates June practical ways you can bring financial lit- October eracy information to your community.

Operations Compliance Summit 26-28• San Antonio • 12-17• Dallas • This 2½ day conference is designed to August Guided by the industry’s top regula- inspire and involve the leaders of commu- tors and educators, BOI builds its program nity banks. All Leadership Division mem- around moving operations officers from bers, presidents, CEOs, CFOs, executive the back room to the boardroom. Here management, branch managers as well as the emphasis is on practical, real-world up and coming employees are encouraged 14-15• Dallas • issues and solutions. BOI takes students to attend. In addition to first-class speakers The operations side of the bank con- through the nuts and bolts of operations and educational sessions, the conference tinually faces challenges with increased to a new level of strategic thinking and is an excellent opportunity for network- regulations and aggressive consumer pro- presentation. Students from a multi-state ing and sharing ideas and solutions with tection actions. Furthermore, litigation area attend BOI for one week each fall for peers. With a resort location and family- against banks has exposed several areas two years. The program is taught by noted friendly agenda, attendees are encouraged of concern. The speakers at this program regulators, bankers, educators, and profes- to combine professional development will provide an overview of recent regula- sionals with an emphasis on the practical with a family vacation. tory changes, litigation of interest, as well skills needed for effective and profitable as practical recommendations for imple- operational management. mentation at community banks.

Certified Community Bank Appraisals Summit Director Seminar August October

Financial Literacy Summit 28• San Antonio • 31- This course provides attendees with November July the underlying knowledge and skills required in reviewing a commercial real estate appraisal to determine compli- ance with appraisal regulations and stan- dards as provided by the Uniform Stan- • Dallas • •1 Dallas • 24-25 dards of Professional Appraisal Practice This seminar will benefit anyone (“USPAP”). Through case studies and The Certified Community Bank involved in their financial institution’s exercises, participants will evaluate the Director (CCBD) designation is a collab- community outreach program: senior real estate appraisal as a key component oration of and administered by the Inde- management, compliance officers, mar- in the credit risk assessment process for pendent Bankers Association of Texas keting officers and business development commercial real estate loans. and the SW Graduate School of Banking

22 ★ The Texas Independent Banker January/February 2014 Foundation. This certification covers the the excellent training they receive locally, regulatory and fiduciary responsibilities of IT Security Summit the benefit for IBAT member banks is bank directors, board structures and pro- Date TBD they can send an unlimited number of employees for one flat rate. It is training cesses, effective board governance and • Dallas • expectations of board members by regula- you need, where you want it! Offerings This summit is designed for CEOs, tors, examiners and shareholders. include such topics as BSA/AML, culti- COOs, security officers and anyone vating proactive customer advisors, and responsible for risk management of a fair lending. community bank’s information technol- ogy department. Speakers will cover the hot topics facing community banks’ IT departments from a banker viewpoint and COMPLIANCE SEMINARS the regulatory issues of the IT exam. IBAT cosponsors compliance pro- grams with Professional Bank Services (PBS). PBS has conducted seminars Head Teller School throughout the U.S. for more than 20 years. They provide educational programs Dates & Location TBD to thousands of bankers through their Whether new to the position or very relationship with 25 banking associations experienced, tellers and customer ser- and several banking agencies. Training vice representatives will benefit from this clients include various financial institu- seminar. The program will develop and tion regulatory agencies. Investment & Asset/Liability improve skills in recruiting, retaining and Compliance Topics Covered for 2014 Management Summit managing employees; achieving outstand- • Anti-Money Laundering & Bank ing customer service; cross-selling bank Secrecy Act School November products and services; and best practices • Texas Deposit Documentation relating to bank robberies, fraud, Reg CC • HMDA compliance and Fed Funds availability, • RESPA among others. • Dodd – Frank Update – Reg Z, B and RESPA • Introduction to Lending Compliance • San6 Antonio • • Mortgage Disclosure Workshop Branch Manager Community banks continue to oper- Certification School ate in an environment characterized by intense competition, regulatory scrutiny, Dates & Location TBD and economic uncertainty. This program WEBCAST/TELEPHONE SEMINARS will help shed light on some important During two two-day sessions, par- In conjunction with Financial Edu- changes taking place in the financial ticipants will learn about managing staff cation, Inc., telephone/webcast seminars industry and their impact on community – hiring, coaching, team building; moni- are a very economical way to train your banks. With the regulatory landscape toring and improving customer service; employees and directors. For one low as a backdrop, the discussion will then as well as setting sales goals and effective price, everyone in the bank can sit in on shift to a macro-economic review and selling. They will also learn tips and tech- the program with the use of a speaker- its influence of and implications for both niques for becoming more organized and phone and a computer. investment portfolio strategy and inter- efficient, and how to set realistic goals and Additionally, by choosing the web- est rate risk management. The discussion objectives for the branch. cast option, participants will also be able will continue with specific investment to view online visuals as the presentation product analyses and potential strategic is delivered. The sessions are one hour alternatives. Throughout the program, CLUSTER PROGRAMS and fifteen minutes in length with afif- emphasis will be focused on the need for IBAT’s Cluster Programs provide cost- teen minute question and answer period. community banks to develop compatible effective training for your employees and and complementary strategies that will directors. Bankers from numerous banks *Because you are a member of the promote the optimal utilization of the in a close geographic area are invited to Independent Bankers Association of investment portfolio as a valuable man- participate in a live two-hour evening Texas, you have access to participate in agement tool. workshop on a banking hot topic. Besides these webcasts at the Member rate. H

January/February 2014 www.ibat.org ★ 23 Implementing a Successful Strategic Plan Involves a Multi-Level Approach Connecting the dots between drafting the plan and successful results

By Keith Hughey

ommunity banks continue necessarily provide input of a strategic Creating emotional ownership to support to address the challenges nature, the tactical ideas shared by those organizational improvements posed by an ever-changing on the front line can provide valuable Developing the type of culture where marketplace, economic insight relative to operational realities, employees feel that their opinions are and regulatory uncertainty, customer needs and any procedural inef- valued creates an emotional connection and shifting customer ser- ficiencies that need to be addressed. between their efforts and the resulting vice expectations. As a In order to jump start staff involve- benefits for the organization. When peo- result, having a clearly defined strategy for ment in the strategic planning process, ple feel that emotional “ownership,” they setting goals, focusing resources and mea- C management should create an initial are more likely to work harder to ensure suring outcomes is essential, regardless of communications outline that: that goals are met and they are more alert whether an institution is in the acquisi- • shares the bank’s vision, mission and to additional ways that enable the institu- tion mode; is preparing to sell; or simply values; tion to deliver better results and greater implementing new programs and services • gathers staff input regarding challenges value to its customers. to position itself as the primary financial and opportunities for improvement; services provider for its customer. • explains the role each staff member Measuring momentum and results Unfortunately, too many bank leaders plays in making the bank successful; and At regular intervals, management still adhere to the belief that strategic deci- • defines specific, measurable steps for should convene the staff to share exam- sions are developed based on the 30,000- employees to complete in relation to ples of how the plan is progressing and to foot perspective of the corner office and the plan. acknowledge the important role everyone board room. And while it is imperative for is playing to help the bank reach its stra- management and the board to be on the Once implementation begins, each tegic goals. same page regarding the overall direction strategic initiative should be given an Also, at least once a year manage- the bank will take going forward, strategic owner who will take responsibility for ment should take the initiative to gather planning should involve much more than moving it to completion. Throughout the feedback on how well they have kept an upper management point of view. process, effective use of project manage- their promises, managed the planning ment tools can help to identify bottle- The ABCs of an effective strategic plan process and supported the efforts of staff necks and help to redirect project efforts in moving the organization forward. Not To be effective, a strategic plan when necessary. only does this serve as a good way to close should have no more than three major In addition, it is important to have the loop on the current year, it strength- strategic initiatives and the planning survey tools in place that enable manage- ens the sense of teamwork and leads to a process includes the perspectives of staff ment to determine how employees are higher level of customer care. H at every level of the organization who reacting to the changes that are affecting are tasked with the everyday responsibil- the workplace, and ultimately whether ity of implementing the proposed actions or not customers are experiencing an Keith Hughey is Senior Consultant for John M. and changes. While not everyone will improved service experience. Floyd & Associates.

24 ★ The Texas Independent Banker January/February 2014 January/February 2014 www.ibat.org ★ 25 organizing sales & Marketing Data to Improve ROI by Guenther Hartfeil

ver 400 years ago, Francis solutions like SNL Banker. This paper will Similarly, if three businesses are owned by Bacon said “Knowledge discuss three key ways to organize data for two people, those three businesses can be is power. If knowledge is sales and marketing purposes: Household- separately identified as customers but can utilized properly it yields ing, Product Grouping and Household also be brought together as a household money which is power in Assignments. These form the foundation if there is enough visible evidence to link today’s times.” The same for understanding the customer relation- them together. Householding software is true today. Knowledge is ship, assessing customer opportunities, uses account information such as tax ID more important than ever in the business establishing new goals and assigning or name and combines it with special Oworld and has led to much more effec- responsibility for execution. lookup tables (e.g., nicknames) to process tive sales and marketing through the use business rules which define individuals, of customer, prospect, officer, branch and Householding households and addresses. Each of these market information and analytics. Today, Householding is the process whereby outputs is given a special key or number bankers can be equipped to answer ques- individuals or businesses are linked to that does not change over time. Plus, each tions like: “Who are my best customers?”, all their customer accounts and are then of these keys is attached to every name and “Who is most likely to buy?”, “Which sales brought together as joint decision-makers account on the system. For SNL Banker, officers need coaching?”, “How many new whenever it makes sense. For example, Jo a super household key is also produced— customers did we get last week?”, “Which Smith owns a savings account, Josephine more on that later. branches have the most untapped oppor- Smith owns a mortgage and Jossie Smith Above is an example of a simple tunities?” and many more. owns a credit card. If there are common household. The constant household key is The raw material of knowledge is data attributes (e.g., email address or tax shown but the address key and customer data. It becomes knowledge when placed ID), these three different names can all keys are not displayed. These two indi- into context and combined with the expe- be brought together as one person with viduals, who do not appear related based rience and creativity of people. Banks are three accounts. If Josephine has a joint on their name, share an address and own awash with data, but data needs to be checking account with Alex Mays and a joint checking account together. Note organized and accessible. The accessibil- shares an address and phone number, they that Desirae does not own a credit card ity is provided by business intelligence can be brought together as a household. with the bank even though Emerson has

26 H The Texas Independent Banker January/February 2014 rganizing ales & Marketing Data to Improve ROI by Guenther Hartfeil

one. Since credit cards are sold and used a month to sell more products and inquire thousands of products (e.g., 30-day Jumbo individually, a great cross-sell opportunity about service delivery. Establish goals to Step Rate CD). Sifting through all the is to identify all households with two or sell some key sticky services such as bill products is tedious and time consum- more adult customers but only one credit pay at the time checking accounts are ing. Different levels of aggregation help card. opened. It is easier to track what occurred bankers discover sales opportunities and If the sales force has access to this when customers and households are accu- coaching opportunities that could be view, their pre-call planning can be done rately identified. easily overlooked. For example, a bank’s in record time. The relationships and SNL Banker also links individual Senior checking account could be catego- products held in the household can be households together into super households rized as a non-interest checking account, quickly viewed prior to calling the cus- based on joint account ownership (e.g., more broadly as a checking account, and tomer. Householding also saves time at someone in Household A owns a joint even more broadly as a deposit account. the front line by reducing double-calling CD with someone in Household B). Just Think of these as levels with deposits at efforts. There is no reason to approach as a customer key can only be assigned to level 1, checking at level 2 and so on. Desirae and Emerson separately to sell a one household, a household key can only Each level of aggregation offers a different mortgage or home equity line. Systems be assigned to one super household. perspective and may also involve a differ- like SNL Banker perform householding Super households can inform both ent sales force. Certainly, product manag- weekly and update account information your retention and sales strategies. On the ers will also want access to the most gran- nightly to ensure that bank officers have retention side, it’s important to review the ular products, and that is provided within up-to-date views of their customers. This super household composition before doing systems like SNL Banker. saves time, and more importantly, pro- something that negatively impacts a par- A key performance indicator is the vides officers the data they need to be ticular member of that super household. cross-sell ratio (i.e., the number of prod- more effective in their role. For example, if a young person asks for an ucts or services per customer or house- With householding, executive man- NSF waiver, one thing to consider is if he hold). The cross-sell ratio typically counts agement can assess and set goals for both or she is tied to other individuals or house- the number of product types a client owns adding new households and reducing lost holds that are high value relationships. rather than the number of accounts. ones. They can compare the number of On the sales side, someone like mort- Every bank seems to calculate this differ- new and lost households by branch or gage bankers can view their customers ently so it is very hard to compare them officer and design campaigns, refocus on to see who else they know. If the bank- bank to bank. For example, some banks customer service or coach employees to ers have a good relationship with these count virtually every account so that if a increase the number of net new house- customers, they may be able to refer them household has three CDs and a checking holds (i.e., new minus lost). Executing an other members of the super household. account, their cross-sell number is four. onboarding process for new checking cus- Other banks may look at that same house- tomers is a best practice that reduces attri- Product Grouping hold and say their cross-sell number is two tion. Call the customer in a week to make The product grouping process aggre- (they own CDs and Checking). Another sure all materials have been delivered gates bank products in increasingly bank may look at that same household and (e.g., checks, debit cards) and call again in broad levels. Banks sell hundreds, even (Continued on page 28)

January/February 2014 www.ibat.org ★ 27 Organizing Sales & Marketing cont’d come up with a cross-sell of three if the household has two 90-day CDs and one 180-day CD. If SNL Banker clients orga- nize their product level definitions fairly consistently, it is much easier to show and understand peer comparisons and develop meaningful goals. SNL has developed a recommended aggregation schema. These recommen- levels, even the broadest. For example, often not present or correct on existing dations are based on a number of factors how many commercial households have bank systems. For example, a customer such as: a credit relationship without deposit may have opened a checking account at • whether the products are substitutes accounts? Since attrition is highest among Branch A fifteen years ago but has moved for one another, those with fewer products, how much is it and is now using Branch B for all their • whether there tend to be different sales worth to keep the credit only customers? banking needs. The GL system will assign forces supporting the products, Does this call for a campaign to cross-sell the checking account and hence customer • whether demand estimates are avail- other products? to Branch A. The branch that can best able from outside parties at a particular Some banks focus attention at level impact future sales and service satisfaction level of aggregation (e.g., demand 1 or a layer down to define a “sweet spot” is Branch B. Similarly, sales officers come estimates for equity credit are readily they want to target. What percent of and go over time so the assigned account available but demand estimates for retail households have deposits, credit officer may no longer be relevant. Itis 100% equity lines are not so one level and either investments or insurance? important to know where to send a lead of aggregation is all equity credit), What percent should the bank target? list for sales and who to hold account- • how regulators view product aggregates A hybrid model with checking is shown able for excess attrition if service is poor. (e.g., per FDIC reports), and since checking is critical for defining a It is also useful to evaluate the assigned • whether some key business areas would bank as the customer’s primary financial household “book of business” for cross-sell be over- or under-counted based on institution. opportunities. the business rules (e.g., insurance, It is impossible to present a full model Best practice is to assign each house- with many product categories like life in this article. Please ask a SNL Banker hold to a branch, except those living well or property insurance and variations adviser or sales professional for more outside the service area or households within those categories, should not details. that do not consider themselves bank cus- be at the same level as non-interest tomers (e.g., they only own an indirect checking with only a few product Household Assignments loan). Assign even those households that offerings). Household Assignment is the pro- opened all their accounts online. If possi- The broadest, first level of product cess of assigning accounts, customers and ble, use branch and ATM transaction data aggregation is [is shown in the chart] households to the appropriate branch, to determine which branch will be the above: officer or channel for sales and/or ser- primary branch, usually the branch fre- It is useful to look at cross-sell at all vice responsibility. These assignments are quented the most by key household mem- bers. If transaction data is not available, assign the branch with the most recently opened accounts. If there are no branch opened accounts, consider the household location to find the nearest branch. For officer assignments, match assigned officer keys on bank systems to current employees and their job titles. If the employee is no longer working as the relevant officer, assign the household to the relevant managers and let them reas- sign on the system. Identify job titles that are generalists and assign as many house- holds as practical to those generalists (not

28 ★ The Texas Independent Banker January/February 2014 more than they can handle). Identify offi- cer types who do not service customers and assign their customers to the appro- DEGREES IN BANKING priate service area (e.g., assign all mort- Contact us for a free brochure. gage customers to the mortgage phone 866-BEARKAT or (936) 294-3764, email: [email protected] unit for service). shsu.edu/see/banking Much more information is avail- able on this topic, but the key is to hold SAM HOUSTON STATE UNIVERSITY the appropriate people accountable for COLLEGE OF BUSINESS ADMINISTRATION sales and service and be able to review and compare correctly assigned books of business to find cross-sell and coaching opportunities.

Summary With Householding, Product Group- ing and Household Assignments in place, banks can efficiently find and pursue cross-sell, up-sell, activation and reten- tion strategies. Householding allows accu- rate and easy views of the full customer relationship; however, the household needs to be assigned to selling and service officers and channels in order to execute those strategies. Plus, it is easier to find the opportunities when products and ser- vices are grouped together or bankers will miss the forest for the trees. Many types of reports are available or can be created to show cross-sell, up-sell activation or retention opportunities. For example, Officers 1 and 4 have a 5% pen- etration of credit cards into their books of business, but the average is 15% for simi- lar books of business. As another exam- ple, 40% of commercial households only have one product or service, so the single product loan customers are targeted with a special offer. Once the opportunities are identified, lists can be produced and sent to the appropriate channel or person. The underlying infrastructure required for these reports and more is Household- ing, Product Grouping and Household Assignments. To learn how SNL Banker can help you use data to improve your sales and marketing ROI, contact: Julie Jones at 434.951.4419 or [email protected]. H

Guenther Hartfeil is Associate Director of Prod- uct Management at SNL Financial. twitter Follow IBAT on Twitter at twitter.com/myibat

January/February 2014 www.ibat.org H 29 What Banks Should Know About the End of Support for

ecurity experts continue to see if it applies also to Windows XP. Since effectiveness of controls is tested peri- urge that businesses in all Windows XP will never receive that spe- odically with results reported to senior sectors take steps now to cific security patch, this might create a management or the board of directors. avoid security and opera- groundswell of security holes in most XP tional risks associated with machines still in use. ATMs Running XP Microsoft’s April 8, 2014 You don’t have to be a security expert support termination for Concerns with Compliance to understand the potential risk of run- Windows XP. Not only are banks at risk with secu- ning XP on an ATM. It is the same reason SBanks in particular are warned that, rity, some regulators say that compliance banks are no longer running IBM’s OS/2 in order to avoid problems that could with security mandates could also be an — no support for security patches. potentially arise within their networks, issue once Microsoft ends the XP support. According to Dean Stewart, Die- ATMs, POS terminals and work stations, One such mandate is the Payment Card bold’s Senior Director of Core Product they should take steps now to migrate to Industry Data Security Standard. Solutions, approximately 75% of banks Windows 7 or 8. This comes from the As noted in the aforementioned have ATMs running XP. Based on that Federal Financial Institutions Examina- FFIEC XP Alert, failing to update oper- statistic, there will be many banks still tion Council (FFIEC) in their October 7, ating systems could result in application running XP on their ATMs after the April 2013 alert. incompatibilities and increased risk for cutoff date. Because Microsoft will no longer be data theft and/or unauthorized additions, This poses a number of problems for providing security updates and patches deletions and changes to data. banks: running an unsupported operating for XP, systems will be more susceptible In the FFIEC Information Technol- system would render a financial institu- to hackers. There will be undoubtedly ogy Handbook, certain recommendations tion noncompliant with payment card be an increased risk inherently but many are outlined for banking institutions: industry requirements. Fines from a bank experts agree that hackers will purposely • Conduct ongoing risk assessments to declared noncompliant could cost the target systems left with XP running. identify and measure risks that could bank thousands of dollars every month. A statistic that best expresses this result from the continued use of XP For community banks, this cost could be point is the malware encounter rate vs. throughout the organizations and crippling. the malware infection rate. According to vendors. Microsoft’s own data, Windows XP users • Consider the impact on business conti- Time is Running Out are six times more likely to be infected nuity and disaster recovery. With less than six months before with malware than Windows 8 users • Consider compatibility with other sys- Microsoft ends their support of the still and almost twice as likely as Windows 7 tems and applications, as well as costs popular Windows XP, many analysts agree users. and new risks. that companies must have a migration What many analysts suspect will hap- • Develop an implementation plan to plan in place or risk facing compliance pen is that when Microsoft ends support prioritize changes and monitor related issues. for XP, hackers will wait for the security third party mitigation and migration What many CIOs do not realize is patches for Windows 7 and Windows 8 to activities. that the average enterprise deployment be released and use that information to • Monitor risk and ensure the can take 18 to 32 months to fully deploy,

30 ★ The Texas Independent Banker January/February 2014 hat Banks hould Know About the End of Support for XP

By Denney James

according to Microsoft. Banks support end date, with a few weeks of real still utilizing Windows XP world, real time testing. should be in some stage of planning and applica- Tips, Tools and Last Minute Advice tion testing to ensure the Many businesses have attempted to migration deployment is migrate to Windows 7 and failed. They complete before end of have failed to properly analyze their appli- support. cations well enough to make the move or Banks need to communicate the plan effectively across guarantee that they are all lines of business. keeping pace Microsoft is not going to extend sup- and adapting port to any company unless they purchase their work- Microsoft’s custom support option. There place to meet gov- are other businesses outside of Microsoft ernment regula- that will continue to update XP machines tions and new IT with security patch updates and other environments. This updates that will keep the machines means ensuring they secure and up to date. The cost of both have the most effec- of these services will far exceed the cost tive tools in place of migrating to Windows 7 for most small to carry out the businesses. migration and to Community banks that have yet to maintain any new even start the migration process have technology follow- options aside from buying Microsoft’s cus- ing deployment. tom support. Here are some steps banks The next sev- should consider before choosing the solu- eral months should tion that is right for them: be used to evalu- STEP 1: Assess and plan ate Windows 7 This should be the obvious first step; and Windows however, if it’s not done right, banks can 8 and to plan really trip themselves up. Migration sup- a migration port products (like Dell’s ChangeBase) accordingly. are designed to automate the applica- The goal tion compatibility testing, remediation, should be to be packaging and virtualization phases of a completely off XP before the (Continued on page 45)

January/February 2014 www.ibat.org ★ 31 the Premier technology conference & expo for Financial institutions

February 3–4, 2014 Renaissance Arboretum Hotel Austin

iBAt’s unique financial institution technology show, Tech- Mecca, will be here before you know it. This year’s show focuses on the CORE areas of concern for community bankers, Compli- ance, Operations, Risk management and Enterprise efficiency. We know that, with any decision to implement new tech- nology solutions into your bank, there are a number of individu- als and departments that must first sign off. That’s why IBAT is committed to making TechMecca a cost-effective event for Texas community bankers, offering a “three for the price of one” special on registration. That’s three attendees for the low cost of $695. For more information or to register, visit www.ibat.org/ techmecca.

TECHMECCA AGENDA

sUnDAY, FeBRUARY 2, 2014

6:30-10:00PM Optional Super Bowl Party

MonDAY, FeBRUARY 3, 2014 7:30AM-5:00PM Conference Registration 9:00-10:15AM Opening General Session: Prosecuting Wall Street — a Business Ethics Session from Citigroup Whistle-blower — Richard Bowen 10:30-11:30AM Concurrent Sessions • Is Your Bank Ready for Today’s Mortgage Customer? • Banker Perspectives: Mobile Strategy • Federal Reserve Payments Update • Leveraging Big Data for Big Results

32 H The Texas Independent Banker January/February 2014 sPONsOrs eXHIbITOrs Titanium Sponsors 21st Century Financial First Data 11:30am-2:30pm Dell Services fisoc, Inc./Buzz Points Expo Hall Open (Includes Lunch) Dell SecureWorks Abound Resources Glory (USA) Inc. 2:30-3:30pm Diebold AccuSource Solutions High Cotton ACI WORLDWIDE Interactive General Session platinum Sponsors I.T. Works American Bank Systems IBT, Inc. 3:30-5:30pm AvTek Solutions AutoFX2 Jack Henry & Associates D+H Mortgagebot Exhibit Hall Open/Exhibitor & Attendee Automated Business Systems March Networks Deluxe Networking Reception Automated Systems, Inc. MEA Financial Enterprises, PULSE AvTek Solutions LLC. Tuesday, February 4, 2014 Gold Sponsors The Baker Group Nautilus Hysong Bank Technology News Banc Statements, Inc. Network Box USA, Inc. 7:30-10:30am First American Payment Banker’s Toolbox PrintMail Systems, Inc. Conference Registration Systems BKD, LLP PROFORMANCE 7:30-8:30am Silver Sponsor Cachet Financial Solutions PULSE Expo Hall Open (Includes Breakfast) Yennik CalTech Resilient Intelligent Networks Cardinal Software, Inc. Security Center, Inc. 8:30-9:30am Bronze Sponsor CFC Technology Corporation SHAZAM Glory Concurrent Sessions Columbus Data Services SMA Solutions • EMV Forum: Following the Expecta- Computer Service Profession- SNL Financial tions of EMV and How it Will Impact als, Inc. (CSPI) Supernal Software Your Bank, Merchants and Customers CoNetrix SWACHA • Current IT Challenges in Banking and Custom Card Systems Technique Data Systems, Inc Efficient Solutions Custom Vault Corporation TransFund • The Lurking Menace: Cybercrime, Data D+H Mortgagebot Unicom Technologies, Inc. Security and Privacy Rights Datacard Group Verafin • 10 Things Core Providers Don’t Want DBSI, Inc. VSoft Corporation You to Know Dell Inc. WebEquity Solutions, LLC 9:45-10:45am Deluxe Financial Services Concurrent Sessions Diebold • The A to Z’s of Vendor Management First American Payment • Understanding and Building a Proactive Systems, LLC • ATM Upgrade Plan to Stay Compliant and Competitive • Emerging Technologies: IT & Opera- tions in Light of Financial Reform • Industry Hot Topic 11:00am-12:00pm Interactive General Session 12:00-1:30pm Expo Hall Open (Includes Lunch) 1:30-2:30pm Closing General Session: From the Future Back- wards: Knowing Next Now — Lee Wetherington 2:30pm Grand Prize Drawing & Conference Concludes

January/February 2014 www.ibat.org ★ 33 Are You One of the 20%? 20%By Steve Scurlock “Every man owes part of his time20% and money to the business or industry to which he is engaged. No man has a moral right to withhold his support from an organization that is striving20% to improve conditions within his sphere.” 20% President Theodore Roosevelt, 1908 20% 20% arch 1 marks the beginning of IBAT’s 2014 who support our industry and not rely solely on the generosity of PAC Drive campaign. Last year we had 8720% a few of our members for this fundraising effort. banks conduct PAC Drives, some for the One of America’s favorite pastimes is to complain about the first time, and most as a continuing20% effort government, but if we don’t contribute to change, it does little to support the community banking message 20%good to complain. and encourage bank staff to be engaged in As you well know, community banks are the lifeblood of the process. The IBAT Leadership Division 20% many Texas cities and towns. IBAT continues to aggressively Board of Directors has taken on the task of challenging all IBAT work for you – and only you — in Austin and Washington, D.C. 20% Mmember banks to raise a minimum of $1,000 in 2014. But we need your help, with both your involvement and your We have a number of members who continue to raise the 20% financial support. bar and contribute thousands of PAC dollars each year. We owe We hope you will be receptive when you hear from your you a huge thank you and encourage you to keep up the good 20% local Leadership Division regional representative asking you to work! Our goal is to dramatically increase the number of IBAT conduct a PAC Drive. Members of the Leadership Division will 20% members participating in this important initiative. be happy to visit your bank and talk with you, your board and

That is why the IBAT Leadership Division’s Board of Direc- 20% employees on the importance of a PAC Drive. They can suggest tors has decided to focus on increasing in-bank PAC Drives for fun ways to raise money for the PAC, but in most cases, all it 2014. Monies from the IBAT PAC and IBAT FedPAC are used takes is “the ask.” to work toward the election of members of the Texas Legisla- Plus, complete your PAC Drive by April 25th and your ture and U.S. Congress who understand the important role of name goes in to a drawing for a barbecue dinner for you and independent community banks in the economic vitality of our your staff prepared and served by your IBAT staff! communities, state and nation. Wouldn’t you agree that each The challenges are significant, but we are convinced com- community bank should participate in this effort? munity bankers will rise to the occasion. We hope we can count This is our industry and we should all be not only willing, on you to move the “20%” to “100%”! but eager to raise PAC dollars to help elect those individuals Steve Scurlock is Executive Vice President for IBAT.

34 ★ The Texas Independent Banker January/February 2014 President’s Circle Thank you H over $1,000 to the following banks for conducting PAC drives in the last year! Keary Barnes, Catalyst Financial Company, First State Bank, Abernathy Junction National Bank Houston Amarillo National Bank Kilgore National Bank Brandon Bartek, Mills County State Bank, First National Bank of Ballinger First National Bank Texas, Killeen Goldthwaite Ballinger National Bank Kleberg First National Bank, Peter Bennis, Pinnacle Bank, Fort Worth Cynthia Blankenship, Bank of the West, Austin County State Bank, Bellville Kingsville Grapevine State National Bank of Big Spring Lamesa National Bank H. Gary Blankenship, Bank of the West, Texas Heritage Bank, Boerne Llano National Bank Grapevine Brady National Bank Craig Buford, CBA of Oklahoma, Oklahoma City, Texas Bank and Trust, Longview OK Brenham National Bank First Bank & Trust, Lubbock Philip Cecil, Liberty National Bank, Paris Citizens State Bank, Buffalo Mason Bank John Cornyn, U.S. Senate, Washington, DC First Bank, Burkburnett The Commercial Bank, Mason Charles Doyle, Texas Independent Bancshares, Inc., Texas City First State Bank of Burnet Border Capital Bank, McAllen Doak Dunkin, Dial Dunkin & Associates, First National Bank of Byers First State Bank, Mesquite Harlingen First State Bank & Trust, Carthage Community National Bank, Clinton Dunn, First State Bank, Mesquite Farmers State Bank, Center Midland Wade Easley, First National Bank of Hereford Citizens Bank, Claude First National Bank of Moody Kathleen Fields, Padgett, Stratemann & Co., L.L.P, San Antonio Western Bank, Coahoma Guaranty Bond Bank, David Fuller, Point Bank, Pilot Point First Bank, Conroe Mount Pleasant Jay Gober, First State Bank, Graham ValueBank Texas, Corpus Christi First National Bank of Mount Scott Heitkamp, ValueBank Texas, Corpus Christi Community National Bank & Trust Vernon Christy Hester, Texas Bank and Trust, Longview of Texas, Corsicana Muenster State Bank Jeb Hughes, Community National Bank, Midland J. Keith Hughey, John M. Floyd & Associates, TIB-The Independent BankersBank, Southwest Bank, Odessa San Antonio Dallas Ozona National Bank John Jay, Roscoe State Bank Veritex Community Bank, Dallas Liberty National Bank, Paris Cary Johnson, First State Bank of Burnet AccessBank Texas, Denton Point Bank, Pilot Point Mayo Kasling, First National Bank of Hughes Springs Dilley State Bank LegacyTexas Bank, Plano Robert Marling, Woodforest National Bank, The First National Bank of Eagle First National Bank in Port Spring Lake Lavaca Julie Mayrant, Woodforest National Bank, Spring United Bank of El Paso del Norte First State Bank-Rice Cliff McCauley, Frost Bank, San Antonio Milton McGee, Texas Leadership Bank, Fort Davis State Bank Roscoe State Bank Henderson Pecos County State Bank, Fort Texas Leadership Bank, Michael Montgomery, First State Bank-Rice, Stockton Royse City Ennis Southwest Bank, Fort Worth Texas State Bank, San Angelo Kenneth Moore, Anahuac National Bank Michael Murphy, Sage Capital Bank, Gonzales First State Bank, Gainesville Lone Star Capital Bank, N.A., Charles “Mack” Neff, Integrity Bank, ssb, Moody National Bank, Galveston San Antonio Houston HomeTown Bank, N.A., Galveston First Community Bank, N.A., Phillip Newsom, Commercial State Bank, Palmer Mills County State Bank, San Benito John Northcut, Stockmens National Bank, Cotulla Goldthwaite Bank PAC, Guaranty Bond Bank, First National Bank of Shiner Mount Pleasant Sage Capital Bank, Gonzales Alliance Bank, Sulphur Springs PSCO PAC, Padgett, Stratemann & Co, LLP, First State Bank, Graham Texas First Bank, Texas City San Antonio Bank of the West, Grapevine First National Bank of Bosque Carlton Palmer, Strategic Risk Associates, LLC, McKinney Farmers State Bank, Groesbeck County, Valley Mills Lester Parker, United Bank of El Paso del Norte Gruver State Bank Waggoner National Bank, Vernon Jim Payne, First State Bank & Trust, Carthage Happy State Bank Community Bank & Trust, Waco Victor Pierson, Moody National Bank, Galveston First National Bank of Hebbronville Citizens National Bank of Texas, Rogers Pope, Jr., Texas Bank and Trust, Longview Citizens National Bank, Henderson Waxahachie Zan Prince, First National Bank of Weatherford Alan Renfroe, Cendera Bank, Bells First National Bank of Hereford Fidelity Bank, Wichita Falls Troy Robinson, Bank Texas, Quitman D’Hanis State Bank, Hondo First National Bank of Winnsboro Deborah Scanlon, BKD, LLP, Houston Integrity Bank, ssb, Houston Yoakum National Bank Greg Schwertner, First National Bank of Ballinger Industry State Bank First State Bank, Yoakum Steve Scurlock, IBAT, Austin (Continued on page 36)

January/February 2014 www.ibat.org ★ 35 PAC cont’d Ursula Jimenez, IBAT, Austin Richard Gasdia, Aporia Solutions, Inc., Houston Ramona Jones, IBAT Services Inc., Austin Kelly Goulart, IBAT, Austin David Seitze, Frost Bank, San Antonio Bonnie Kankel, IBAT, Austin Mark Griege, Veritex Community Bank, Dallas Joe Sharp, First Baird Bancshares, Inc., Bedford Timothy Koch, University of South Carolina, Wendy Griffin,Schertz Bank & Trust Mark Singleton, Citizens National Bank of Texas, Columbia, SC Donna Harrelson, Texas Bank and Trust, Waxahachie David Lacy, Community Bank & Trust, Waco Longview Justin Steinbach, Frost Bank, Dallas James Law, Alliance Bank, Sulphur Springs Gordon Huddleston, Veritex Community Bank, Glen Thurman, First National Bank of Moody Ricky Leal, First Community Bank, N.A., Dallas Bradley Tidwell, Citizens National Bank, Harlingen Kyle Irwin, Gruver State Bank Henderson Steve Mack, Texas Heritage Bank, Boerne David Jones, Happy State Bank, Amarillo Lynn Vincent, First State Bank & Trust, Carthage Tommy McCulloch, Fidelity Bank, Wichita Falls Bill Kacal, Integrity Bank, ssb, Houston Steven Warner, Align Financial Services Michael McKenzie, Alliance Bank, Jerry Kacal, Integrity Bank, ssb, Houston Consultants, Inc., Austin Sulphur Springs Joe Kim King, Brady National Bank Chris Williston, IBAT, Austin Craig Meier, Meier Auctioneers, Ennis Fred Leonard, Integrity Bank, ssb, Houston Ronnie Miller, Community National Bank, Hondo David Linaburg, TIB-The Independent Michael Moores, Citizens National Bank, BankersBank, Dallas PAC Statesmen Henderson Chip Lynch, Independent Community Bankers of H $800-$999 Frank Morris, First State Bank, Gainesville America, Dallas Patty Mullins, IBAT, Austin Scott McDonald, Davis Kinard & Co, PC, Abilene Hazem Ahmed, Integrity Bank, ssb, Houston Jeff Nunn, Citizens Bank, Amarillo Bobbie McMillan, The Commercial Bank, Mason Abel Castro, First Bank & Trust, Lubbock Michael O’Rourke, TIB-The Independent Ryan Morris, First State Bank, Gainesville Doak Crabtree, Happy State Bank, Stratford BankersBank, Dallas Karen Neeley, Cox, Smith, Matthews, Inc., Curtis Griffith,City Bank, Lubbock Mae Beth Palone, IBAT, Austin Austin Dickie Heathcott, Crowe Horwath LLP, Dallas Ralph Preuss, Alliance Bank, Sulphur Springs Curt Nelson, IBAT Services Inc., Austin Kenneth Horton, First Capital Bank, Quanah Todd Price, First State Bank, Mesquite Darlene Revers, IBAT, Austin James O’Jibway, Austin County State Bank, Kevin Monk, Alliance Bank, Sulphur Springs Bellville Tom Turner, First State Bank, Abernathy Marty Rivers, First State Bank - Downtown Denton Paul Painter, Alliance Bank, Greenville Craig Roberts, Guaranty Bond Bank, Mike Pearce, Bank of the West, Grapevine PAC Delegates Sulphur Springs Stanley Pinkham, McLendon-Chisholm Thomas Sellers, Alliance Bank, Sulphur Springs Jimmy Rasmussen, HomeTown Bank, N.A., H $500-$799 J. Michael Terrell, Waggoner National Bank, Galveston Glenn Biggs, First State Bank, Abernathy Vernon Albert Reese, Integrity Bank, ssb, Houston Glenn Biggs, Texas Heritage Bank, Boerne Carol Troy, IBAT Financial Services, Austin Mark Roe, John M. Floyd & Associates, Burleson Micah Boles, First National Bank of Bosque Terry Tuggle, First National Bank Texas, Killeen Bill Saunders, AccuSource Solutions, Carrollton County, Valley Mills Valarie Ure, IBAT Financial Services, Austin Charles Shanley, John M. Floyd & Associates, Cleve Breedlove, AccessBank Texas, Denton Richard Ware, Amarillo National Bank Baytown L. F. Bridges, Alliance Bank, Sulphur Springs Christine Weinzapfel, Muenster State Bank, Mark Sheffield,Roscoe State Bank, Bastrop Angie Brown, First National Bank, Giddings Gainesville Kathy Smith, Bank Compensation Consulting, Carl Cecil, Liberty National Bank, Paris Robert Weinzapfel, Muenster State Bank Inc., Plano David Chadwick, Farmers State Bank, Center David Willmann, Llano National Bank Alinaghi Soudjani, Happy State Bank C.R. Cloutier, MidSouth Bank Texas, N.A., James Worsham, Alliance Bank, Sulphur Springs Jeff Stewart, Comanche National Bank Lafayette, LA David Stovall, Stovall, Grandey & Allen CPA, Charles Comer, Bank of the West, Fort Worth Fort Worth Doyle Cooper, Texas Leadership Bank, Royse City PAC Partners Dewey Stringer, Integrity Bank, ssb, Houston Wayne Cooper, Alliance Bank, Sulphur Springs H $300-$499 John Sughrue, Veritex Community Bank, Dallas Julie Courtney, IBAT, Austin Vican Tan Sun, Integrity Bank, ssb, Houston Susan Allen, Texas Heritage Bank, San Antonio Ruth Ann Crowson, Alliance Bank, Tim Teske, Green Bank, N.A., Dallas Sulphur Springs Kenneth Black, Citizens National Bank, Henderson Tim Turbeville, First State Bank, Gainesville Zach Dean, Fort Davis State Bank Blake Bozman, Veritex Community Bank, Dallas Paul Urban, Texas Heritage Bank, San Antonio Mickey Eddins, Alliance Bank, Sulphur Springs Carol Chiu, Integrity Bank, ssb, Houston Jeffery Van Wart, Integrity Bank, ssb, Houston Roger Elliott, Alliance Bank, Sulphur Springs Windol Cook, TIB-The Independent Brian White, First National Bank of Moody Randall Ferguson, First National Bank of Alvin BankersBank, Jacksonville Mark Williamson, West Texas State Bank, Snyder Robert Gerry, Integrity Bank, ssb, Houston Lance Davis, BKD, LLP, Jackson, MS Gary Wooley, Integrity Bank, ssb, Houston John Gilliam, First National Bank of Bosque Kathryn Deason, Citizens National Bank, Cody Yanchak, First American Payment Systems, County, Valley Mills Henderson LLC, Fort Worth Judy Gillis, Alliance Bank, Sulphur Springs Kenneth Derks, Equias Alliance, LLC, Plano Jack Griggs, First State Bank, Abernathy Tieman Dippel, Brenham National Bank C. T. Head, Mills County State Bank, Goldthwaite PAC Friends Sheila Dixon, Citizens National Bank, Tyler Charles Helm, Alliance Bank, Sulphur Springs Christopher Doyle, Texas First Bank, Texas City H $101-299 J. Pat Hickman, Happy State Bank, Amarillo Troy England, First Bank, Conroe Don Abernathy, The Bankers Bank, Israel Hinojosa, First National Bank of David Estes, Texas Heritage Bank, Cross Plains Oklahoma City, OK Hebbronville Betsy Flencher, Citizens State Bank, Somerville David Alford, Citizens National Bank, Henderson Janey Holstien, IBAT, Austin Ben Flencher, Citizens State Bank, Somerville Ronald Alfred, Brenham National Bank Brooke Jamieson, TIB-The Independent Randy Andrews, Texas Bank and Trust, Longview BankersBank, Irving Kyle Frazier, Integrity Bank, ssb, Houston

36 ★ The Texas Independent Banker January/February 2014 Mark Anton, Integrity Bank, ssb, Houston Geoffrey Gallo, Doeren Mayhew, Houston Laura McKethan, Citizens National Bank, Kerri Araujo, Citizens National Bank of Texas, Alicia Garrison, TIB-The Independent Henderson Waxahachie BankersBank, Dallas Ryan Mecredy, TIB-The Independent Sam Armstrong, ValueBank Texas, Corpus Christi Mark Gibson, First National Bank of Bosque BankersBank, Dallas Michele Arvo, TIB-The Independent County, Valley Mills George Meisenheimer, Citizens National Bank, BankersBank, Dallas Ross Glenn, Happy State Bank, Amarillo White Oak Thomas Atkinson, TIB-The Independent Chad Golden, TIB-The Independent Maggi Metheany, TIB-The Independent BankersBank, Dallas BankersBank, Irving BankersBank, San Jose, CA Bartlett Barry, AccuSource Solutions, Carrollton Patrick Gray, TIB-The Independent BankersBank, Scott Miers, Lamesa National Bank Christine Beaulieu, Muenster State Bank Dallas Charles Miller, First Bank, Wichita Falls Craig Berry, TIB-The Independent BankersBank, Alina Greavu, IBAT, Austin Anita Minor, Bank of the West, Grapevine Dallas Virginia Grimes, The Genesis Group LLC, Jessica Molina, IBAT, Austin Jacob Bezner, First State Bank, Gainesville McKinney Dianne Monroe, Happy State Bank, Dumas Stan Bickel, First National Bank of Ballinger Luke Grizzaffi,First State Bank, Gainesville Luke Motley, Farmers State Bank, Center Bonnie Blackman, Bankers Digest, Dallas Jack Gruber, D’Hanis State Bank, Hondo Ann Murphy, Point Bank, Pilot Point Wendy Blaeser, D+H Mortgagebot, Mequon, WI Jesse Haggard, First National Bank of Trinity Patti Nethery, First National Bank Texas, Killeen Ricky Bowman, Roscoe State Bank, Sweetwater Kerry Hall, IBAT, Austin Bryan Nowlin, Lamesa National Bank Brandon Braden, Texas State Bank, San Angelo Ben Hatcher, First State Bank, Gainesville Steve Oates, Farmers State Bank, Carthage Don Briscoe, TIB-The Independent BankersBank, Steve Haverlah, Llano National Bank Ronny Ortowski, First State Bank, Gainesville Dallas Danette Heffner, Citizens National Bank, Joe Parker, First National Bank of Byers Scott Brown, nCino, Prattville, AL Henderson Sam Parker, Texas Bank and Trust, Longview John Buttery, Llano National Bank Harlan Heitkamp, ValueBank Texas, Clint Patrick, Mills County State Bank, Early Corpus Christi Marsha Byrd, Texas Bank and Trust, Gladewater Steve Patrick, Mills County State Bank, Stan Callahan, Amarillo National Bank Lita Herrera, IBAT, Austin Goldthwaite Alvia Calvert, Happy State Bank, Dumas Gary Hinders, Happy State Bank, Amarillo Jessica Pelache, First National Bank Texas, Killeen Thomas Canfield,Mason Bank Jimmy Hoerster, Llano National Bank Debra Peterson, Integrity Bank, ssb, Houston Barbara Carney, TIB-The Independent Peggy Hogan, Citizens National Bank of Texas, Charlie Phillips, Integrity Bank, ssb, Houston Waxahachie BankersBank, Dallas Shannon Phillips, IBAT, Austin Bud Holmes, Happy State Bank, Lubbock Charles Carpenter, Texas Bank and Trust, Terrell Jerry Pinkston, Farmers State Bank, Center Terry Hoover, TIB-The Independent BankersBank, Gina Carter, CalTech, Fort Worth Rogers Pope, Texas Bank and Trust, Longview Dallas Craig Chaikin, Texas Bank and Trust, Longview Carroll Putnam, TIB-The Independent Carol Hopper, Citizens National Bank, Henderson Aaron Clark, Lamesa National Bank BankersBank, Dallas Todd Huckabee, Crockett National Bank, James Coleman, Integrity Bank, ssb, Houston Allan Rasmussen, HomeTown Bank, N.A., San Angelo Robert Coleman, First National Bank in Graham Friendswood James Hudson, TIB-The Independent Charles Redfearn, Point Bank, Pilot Point Gary Cox, Texas State Bank, San Angelo BankersBank, Dallas Michael Rehm, Jefferson Bank, San Antonio John Currie, State National Bank of Big Spring Jeff Irwin, Gruver State Bank Lloyd Reiter, First State Bank, Gainesville Randy Curtis, First National Bank Texas, Killeen Robert Jenkins, Integrity Bank, ssb, Houston Darlene Renken, Yoakum National Bank J. Raymond David, Point Bank, Pilot Point Tom Jester, Point Bank, Pilot Point Merrill Reynolds, Reynolds Williams Group, Joseph David, Point Bank, Pilot Point John Johnson, Happy State Bank, Canadian New Braunfels Robert David, Point Bank, Pilot Point Michael Johnson, TIB-The Independent Michael Rhodes, Lamar National Bank, Paris Neilson Davis, Farmers State Bank, Center BankersBank, Dallas Nelwyn Richardson, Citizens National Bank, W. I. Davis, Farmers State Bank, Center Jason Jones, Roscoe State Bank, Sweetwater Henderson Franklin Deaderick, Southwest Bank, Odessa Philip Jones, Bank On Hold, Edmond, OK Russ Richardson, Star Bank of Texas, Fort Worth Harold Deem, First State Bank, Gainesville Vance Jones, Texas State Bank, San Angelo Eduardo Rios, Texas First Bank, Houston Lawrence Del Papa, Texas First Bank, Galveston Janine Kasper, Deluxe Corporation, Larkspur, CO Darla Rooke, Junction National Bank Mary Diaz, First National Bank Texas, Killeen Scott Kelley, TIB-The Independent BankersBank, Richard Scanio, American Bank, Corpus Christi Scott Dickerson, Texas Bank and Trust, Longview Dallas John Schmitz, First State Bank, Gainesville Shawn Dillon, First American Payment Systems, Melissa Kinion, The Genesis Group, LLC, LLC, Fort Worth McKinney Michael Scott, First Community Bank, N.A., San Benito Deborah Dinsmore, Integrity Bank, SSB, Houston Jack Kleinecke, TIB-The Independent Kevin Sebade, Muenster State Bank Matthew Doyle, Texas First Bank, Texas City BankersBank, Victoria David Seim, Happy State Bank, Lubbock Kevin Drew, TIB-The Independent BankersBank, Sue Lehrer, Newport Board Group, Houston Dallas Claude Lewis, ValueBank Texas, Corpus Christi Mike Smith, Citizens National Bank, Henderson John Eastwood, Bank of the West, Grapevine David Litton, Citizens National Bank, Henderson Peter Smith, Happy State Bank, Lubbock John Elliott, Southwest Bank, Lubbock Penni Livingston, TIB-The Independent Jonathan Stephens, Southwest Bank, Lubbock Tim Farley, Citizens National Bank, BankersBank, Dallas Linda Stephens, Integrity Bank, ssb, Houston Mount Enterprise Jana Longbotham, Happy State Bank Alan Strittmatter, Point Bank, Pilot Point Chris Favre, Integrity Bank, ssb, Houston Wallace Lynch, Point Bank, Pilot Point Paul Sturm, Point Bank, Pilot Point George Fisk, LegacyTexas Bank, Plano Lindsey Manwarren, Citizens National Bank of Dale Swinburn, Happy State Bank, Canadian Jason Flanagan, Citizens National Bank, Texas, Waxahachie Scott Tankersley, CalTech, San Angelo Henderson James May, ValueBank Texas, Corpus Christi Becky Tanner, Citizens National Bank, Henderson Diane Francis, TIB-The Independent Brent McCasland, CalTech, San Angelo Bruce Taylor, TIB-The Independent BankersBank, BankersBank, Dallas Gregg McCoury, Farmers State Bank, Center Dallas Elwood Freeman, Lamesa National Bank Nikki McDaniel, First National Bank Texas, David J. Temple, TIB-The Independent Linda Galligher, Alliance Bank, Sulphur Springs Killeen BankersBank, Dallas James McElray, Integrity Bank, ssb, Houston (Continued on page 38)

January/February 2014 www.ibat.org ★ 37 PAC cont’d Sammy Bell, First National Bank of Winnsboro Dan Collins, Farmers State Bank, Groesbeck Sandra Bergey, Yoakum National Bank Jim Collins, D’Hanis State Bank, Hondo Beverly Texada, TIB-The Independent Michael Bernhardt, First Bank, Wichita Falls Gary Colman, Yoakum National Bank BankersBank, Dallas Shane Best, Texas Bank and Trust, Longview Greg Colquitt, Citizens National Bank, Longview Charles Thomas, First State Bank & Trust, Dennis Bettison, Texas First Bank, Texas City Gary Conway, Roscoe State Bank Carthage Debbie Bigelow, Amarillo National Bank Danny Copeland, Citizens National Bank, Joseph Thomas, Texas State Bank, San Angelo John Billups, Prosperity Bank, Victoria Henderson Michael Thompson, Extraco Banks, N.A., Randy Bjork, Texas Bank and Trust, Longview Debbie Cox, First State Bank, Gainesville Temple Joe Blackshear, Texas First Bank, Texas City James Cox, Southwest Bank, Odessa Greg Todd, TIB-The Independent BankersBank, Patricia Blackshear, TIB-The Independent Jerry Craft, Jacksboro National Bank Dallas BankersBank, Irving Michael Crain, Alliance Bank, Sulphur Springs John Todd, First State Bank, Mesquite Bill Blackwell, Mills County State Bank, Tom Cravens, Southwest Bank, Arlington Amanda Traywick, Citizens National Bank, Goldthwaite Longview Debra Crawford, TIB-The Independent Darrell Blum, Brenham National Bank BankersBank, Dallas Ben Turbeville, First State Bank, Gainesville Joe Boaz, Prosperity Bank, New Waverly James Crawford, Bankers Healthcare Group, Inc., Tom Turner, Citizens State Bank, Dallas Gary Boening, Yoakum National Bank Syracuse, NY George Waggoner, First National Bank Texas, Waymon Boyd, First National Bank in Trey Crim, Kilgore National Bank Conroe Port Lavaca Richard Cullen, First National Bank in Lyle Walden, TIB-The Independent BankersBank, Bryan Bradley, Farmers State Bank, Mexia Port Lavaca Dallas Henry Bradley, First Bank, Oklahoma City, OK Sarah Cypert, First Bank & Trust, Lubbock Don Walker, Farmers State Bank, Center George Brannies, Mason Bank James Dangelmayr, Muenster State Bank William Ware, Amarillo National Bank George Briant, Happy State Bank Franklin Darilek, Prosperity Bank, Victoria Will Welch, CalTech, San Angelo Debra Bridges, Mills County State Bank, David Daspit, Texas First Bank, Houston Gary Wells, Happy State Bank, Amarillo Goldthwaite Carl Davis, First National Bank of Winnsboro Brenda Wendt, Woodforest National Bank, Spring Joseph Bright, Muenster State Bank James Davis, Fort Davis State Bank Chuck White, First Bank, Wichita Falls Craig Brooks, Prosperity Bank, Katy John Davis, Roscoe State Bank, Sweetwater Christopher Williston, IBAT, Austin Barry Brown, First Bank & Trust, Lubbock Michael Davis, Brady National Bank Sue Winford, Lamesa National Bank F. E. Brown, Kilgore National Bank Steven Davis, Gruver State Bank Tony Wooster, Citizens National Bank, Henderson Joe Brown, Border Capital Bank, McAllen Larry Day, Texas Bank and Trust, Longview Richard Browning, Southwest Bank, Odessa Jamie Dean, Fort Davis State Bank PAC Pals James Bryan, Happy State Bank Pamela DeCeault, Kilgore National Bank Dewey Bryant, Southwest Bank, Odessa Morris DeFriend, Farmers State Bank, Groesbeck H $100 Vernon Bryant, Southwest Bank, Fort Worth Julie Degelia, Alliance Bank, Greenville John Able, Integrity Bank, ssb, Houston Jo Ann Buchanan, Fort Davis State Bank Richard Dial, Texas Bank and Trust, Longview Drew Albright, TIB Mortgage, Lubbock Danny Buck, Lone Star Capital Bank, N.A., Frank Diebel, First National Bank in Port Lavaca Deanna Alfred, Brenham National Bank San Antonio Stacy Dienst, HomeTown Bank, N.A, Galveston Charles Amato, SWBC, Financial Services Bruce Buenger, Industry State Bank Ray Dierschke, First National Bank of Ballinger Division, San Antonio Bryan Bumpas, Jacksboro National Bank T. H. Dippel, Brenham National Bank Norma Anzuldua, Kleberg First National Bank, Thomas Burdett, Happy State Bank, Amarillo Kingsville David Doyle, Texas First Bank, Texas City Michelle Burnett, First National Bank Texas, Lee Ardell, Texas First Bank, Texas City Patrick Doyle, Texas First Bank, Texas City Killeen L. D. Due, First Bank, Wichita Falls Frank Armstrong, First National Bank of William Buttery, Llano National Bank Hebbronville J.R. Duke, First State Bank & Trust, Carthage Chris Cabbiness, First National Bank of Hereford Stewart Armstrong, Kleberg First National Bank Tom Duren, Mills County State Bank, Goldthwaite Joe Calvert, Integrity Bank, ssb, Houston of Kingsville James Dyer, Fort Davis State Bank Dickey Campbell, Texas First Bank, Texas City Mike Atkins, Southwest Bank, Odessa Jim Dyer, Fort Davis State Bank Joe Cannon, Farmers State Bank, Groesbeck J. R. Avant, Dilley State Bank Michael Ebie, First State Bank, Mesquite Amy Capps, Mason Bank Jeff Avant, Dilley State Bank Gary Edmiston, Security Bank, Odessa Richard Carlton, Southwest Bank, Odessa John Awalt, Farmers State Bank, Groesbeck William Ellis, Texas Leadership Bank, Royse City Edward Carrasco, First Financial Bank, N.A., George Bailey, United Bank of El Paso del Norte David Epke, First National Bank Texas, Killeen San Angelo Dotsy Balentine, HomeTown Bank, N.A., Leslie Escalante, Prosperity Bank, Victoria Kent Carruthers, The Citizens Bank of Clovis, Galveston Maurice Estlinbaum, HomeTown Bank, N.A., NM John Ballard, Citizens Bank, Claude Galveston Pamela Cernoch, Industry State Bank, New Ulm Kelly Barclay, Ozona National Bank, Wimberley Liz Estrada, Citizens Bank-Claude Branch, Margaret Cherryhomes, Jacksboro National Bank William Barfield,First National Bank of Tucumcari, NM John Childers, First National Bank of Ballinger Hebbronville Gary Farley, Integrity Bank, ssb, Houston Allan Childs, Pecos County State Bank, Bobby Barker, Happy State Bank, Dumas James Farley, Southwest Bank, Lubbock Fort Stockton David Barnes, First State Bank, Yoakum Rocky Farrar, Happy State Bank Mitchell Chouke, Texas First Bank, Galveston Jennifer Barnett, Citizens National Bank, Tammy Feagley, Alliance Bank, Sulphur Springs Kenneth Clark, First National Bank in Longview Dick Fellers, Happy State Bank Port Lavaca Jim Barron, Texas Bank and Trust, Longview Mark Fields, Amarillo National Bank John Clemens, Amarillo National Bank W. H. Bauer, First National Bank in Port Lavaca Nelson Finch, Jefferson Bank, San Antonio Philip Cloud, Bank of the West, Grapevine Douglas Bean, Ozona National Bank Francis Fisher, Muenster State Bank Christopher Cole, Southwest Bank, Odessa Joe Bean, Ozona National Bank Paul Fisk, Texas Leadership Bank, Royse City William Coleman, Liberty National Bank, Paris Don Beaty, First National Bank of Winnsboro Gary Flemmons, Texas Leadership Bank, Glynn Collier, Mills County State Bank, Royse City Gail Beeman, Texas Bank and Trust, Longview Goldthwaite

38 ★ The Texas Independent Banker January/February 2014 William Flori, TIB-The Independent BankersBank, Dallas Gary Ford, Hamlin National Bank Joe Ford, Hamlin National Bank Patricia Foster, First National Bank Texas, Killeen Kousta Foteh, Integrity Bank, ssb, Houston Robert Fullbright, First National Bank of Hebbronville Burnie Galle, Industry State Bank Greg Garland, First Bank & Trust, Lubbock Kyle Garner, TIB-The Independent BankersBank, Irving Gregory Garrison, HomeTown Bank, N.A., Galveston Donald Gartman, Texas First Bank, Texas City Carlos Garza, Texas First Bank, Texas City Ray Geistweidt, Mason Bank Mike Gilbert, Texas Leadership Bank, Royse City Gene Giles, First State Bank & Trust, Carthage Cecil Glovier, Happy State Bank, Amarillo Kenneth Goates, Texas Bank and Trust, Tyler Barry Gober, First State Bank, Graham Charles Gober, First State Bank, Graham Mert Goldman, United Bank of El Paso del Norte Bryan Gonzalez, First National Bank of Hebbronville Gail Graham, Texas Bank and Trust, Tyler Herbert Graham, Southwest Bank, Odessa Cody Graves, Mills County State Bank, Goldthwaite Abound Resources Dell SecureWorks First Data Online Banking Tom Graves, Mills County State Bank, Growth and Efficiency Information Security, Compliance, Internet Banking Systems, Goldthwaite Advisory Services, Technology Consulting Risk Mangement Services, Bill Payment Ryan Esquell 512-351-3702 Security and Risk Consulting Jay Carrigan 512-970-9674 Jerry Graybill, Jacksboro National Bank Kevin Jordan 214-236-5339 Bill Greenhaw, TIB-The Independent AccuSource Solutions Dell, Inc. The Genesis Group BankersBank, Dallas Expense Management Program, IBAT’s Dell ID#:GS126658178 Advertising & Marketing Sheila Gresham, Citizens National Bank, Office Supplies, Promotional Items, Technical Consulting, Melissa Kinion 800-725-3800 Henderson Turn-Key Marketing Workstations, Servers, Printers, Lew Ellyn Gross, Industry State Bank Bill Saunders 800-869-0992 x106 Desktops, Laptops, Ultrabooks, Glory Global Solutions Teller Cash Dispensers, Michael Hackebeil, D’Hanis State Bank, Hondo Tablets, Electronics and Accessories, Advantage Health Plans Trust* Teller Cash Recyclers, Howard Hackney, Texas Bank and Trust, Services and Software Health, Dental, Vision, Long Term and Quickchange Machines Longview Denney James 512-728-8763 Short Term Disability, AD&D, Group Term James Robinson 325-692-0109 Fred Haemisegger, Integrity Bank, ssb, Houston Life, and Voluntary Life Deluxe Corporation Linda Hahn, Kleberg First National Bank of Melissa Nance 800-521-1711 Check Printing Services™ The Hertz Corporation Kingsville *Paid Endorsement Deluxe Business AdvantageSM Car Rental Discounts, CDP#46681 Larry Haire, Kilgore National Bank Deluxe Detect® Allyson Kealy 201-307-2381 American National Cliff Hale, Citizens National Bank, Longview Insurance Company Deluxe Knowledge Exchange Solution™ John M. Floyd & Associates Deluxe ProventSM Kenneth Hall, Texas Bank and Trust, Longview Credit Life and Gap Waiver Insurance Recruitment Services Janine Kasper 303-335-7627 Scott Hall, First National Bank of Hereford Kevin Moore 281-535-7469 Kim Kreps 512-263-7946 Russell Hammonds, Junction National Bank Dial Dunkin & Associates Overdraft Program Consulting The Baker Group George Hansard, Pecos County State Bank, Credit Life Insurance, Mark Roe 800-410-3107 Broker/Dealer, A/L Management Fort Stockton Balloon Note Financing Mike Mackey 888-480-0301 MG Architects Travis Hardwick, Texas First Bank, Houston Doak Dunkin 800-234-6401 Architecture, Planning and Interior Design William Harper, First State Bank, Graham CSI SecureConnect Diebold, Inc. Scott Clanton 713-552-0707 Board Portal Wendy Harris, Mills County State Bank, Early ATM Security Products & Services Employee Intranet Promontory Interfinancial Bank Operations Equipment & Supplies James Hartley, Industry State Bank Bill Evers 800-545-4274 x19224 Network Opteva® ATM Equipment John Hasskarl, Brenham National Bank CDARS Integrated Services Sonja Havens, First National Bank Texas, Killeen D+H Mortgagebot Insured Cash Sweep Service ® Gary Guerrero 210-242-6123 Rayburn Haynie, First National Bank in Mortgagebot Enterprise - the leading Chuck McBrayer 866-776-6426 x3432 end-to-end, cloud-based lending platform. Port Lavaca First American Payment Mark Heinze, Ballinger National Bank Point-of-sale solutions PULSESelect®/ MoneyPass® Next generation LOS Systems Bill Hellen, First National Bank of Hebbronville Merchant Processing Services Surcharge-Free ATM Network Dustin McClelland 281-256-9106 Dolphy Hellman, Muenster State Bank Cody Yanchak 817-317-7213 Mark Martin 832-214-0247 Claude Henry, Texas Bank and Trust, Tyler 11/13 A. G. Hermann, First State Bank, Yoakum Call Curt Nelson: 512-275-2240 www.ibatservices.com

(Continued on page 40)

January/February 2014 www.ibat.org ★ 39 PAC cont’d Bentley King, Pecos County State Bank, Maggie Molina, United Bank of El Paso del Norte Fort Stockton Nancy Mullins, First National Bank Texas, Killeen Charles King, Texas Bank and Trust, Longview Lee Murchison, First Bank, Wichita Falls John Hermann, First State Bank, Yoakum Frank King, Brady National Bank William Murphy, Veritex Community Bank, Plano Guillermo Hernandez, United Bank of El Paso Joe Kim King, First National Bank of Ballinger Andrew Murr, Junction National Bank del Norte Mason King, Southwest Bank, Fort Worth Maurita Myers, Texas Bank and Trust, Longview Hank Hernandez, United Bank of El Paso Ronny Knight, First National Bank of Winnsboro Charles Napier, United Bank of El Paso del Norte del Norte Fred Knipling, First National Bank in Port Lavaca Dean Narrell, Roscoe State Bank, Sweetwater Gerald Hess, Muenster State Bank Corey Krusa, Amarillo National Bank William Natho, First National Bank of Shiner Hue Hillis, Citizens State Bank, Buffalo Mike Kuhlman, Happy State Bank, Canyon Pat Nault, Kilgore National Bank Fred Hilscher, First National Bank of Shiner Douglas Kunkle, First Bank, Wichita Falls Don Neill, DEI, Brownwood Marshall Hodge, Texas Bank And Trust, Canton Sherri Kusak, First State Bank, Yoakum Rita Nelson, First National Bank Texas, Killeen Antoinette Hoelscher, Texas State Bank, Kenneth Kvinta, First State Bank, Yoakum Debbie Norman, First National Bank Texas, San Angelo Gary Lain, Hamlin National Bank Killeen Mike Holbert, Texas Bank and Trust, Longview Harlan Lambert, Pecos County State Bank, David Norris, Happy State Bank, Amarillo Malcolm Holland, Veritex Community Bank, Fort Stockton Sam Nunn, Citizens Bank, Amarillo Dallas Bill Landiss, First National Bank, Giddings Daniel Odom, Western Bank, Lubbock Scott Hollyfield,Bank of the West, Grapevine Mary Laughinghouse, D’Hanis State Bank, Deborah Odom, Gruver State Bank John Hooker, First Bank, Iowa Park Hondo Bruce Orr, First Bank & Trust, Lubbock Rob Houser, CalTech, San Angelo Steve Lewis, Jefferson Bank, San Antonio Giancarlo Ortega, Texas First Bank, Houston Robert Huff, Southwest Bank, Odessa Brad Lindemann, Industry Bancshares, Inc. Patrick Pace, Hamlin National Bank - Rule Center Bill Hughes, Farmers State Bank, Groesbeck James Lindemann, Industry Bancshares, Inc. Bob Pagan, HomeTown Bank, N.A., Galveston David Hughes, Farmers State Bank, Groesbeck John Loeffler,Junction National Bank Sheri Parish, Texas Bank and Trust, Longview Cynthia Hundl, First National Bank of Shiner Barney Loesch, Brenham National Bank Donnie Park, First Bank, Wichita Falls Robby Hymel, D’Hanis State Bank, Hondo Don Long, Ozona National Bank Kelly Park, Prosperity Bank, Victoria Jacqueline Ilse, Kleberg First National Bank of Warren Longmire, Texas First Bank, Hitchcock Kingsville Bryan Peeler, Fannin Bank, Bonham Larry Lott, Texas Leadership Bank, Royse City Clint Irwin, Gruver State Bank Carlos Pena, Texas First Bank, Texas City Dale Lunsford, Texas Bank and Trust, Longview John Irwin, Gruver State Bank, Amarillo Darlene Pence, TIB-The Independent David Magness, Texas Leadership Bank, BankersBank, Dallas Mark Irwin, Gruver State Bank Royse City Joe Perrin, First National Bank of Hereford Jim Ivy, Pecos County State Bank, Fort Stockton James Maloney, United Bank of El Paso del Norte John Perrin, First National Bank of Hereford Claud Jacobs, First State Bank, Yoakum Dave Marlow, Yoakum National Bank Clark Peveto, Community National Bank & Trust Rick Jamieson, TIB-The Independent Mark Marshall, Brady National Bank of Texas, Mineral Wells BankersBank, Irving Russell Marshall, Prosperity Bank, Victoria Riley Peveto, Community National Bank & Trust Christina Janecka, Citizens National Bank, of Texas, Mineral Wells Corsicana Gustavo Martell, United Bank of El Paso del Norte George Peyton, Happy State Bank, Canadian M. C. Jeu, Integrity Bank, ssb, Houston Dora Martinez, Kleberg First National Bank, Edward Pfeil, Prosperity Bank, Victoria Jerry Johnson, First Bank, Burkburnett Kingsville Dan Phillips, Kilgore National Bank A. C. Jones, First National Bank of Hebbronville, Mario Martinez, First National Bank of Corpus Christi Pat Plaia, Texas First Bank, Winnie Hebbronville Charles Pluenneke, Mason Bank Tim Jones, Prosperity Bank, College Station Laurie Mayfield,D’Hanis State Bank, Hondo Gregg Jordan, Amarillo National Bank Joyce Pope, Texas Bank and Trust, Longview Bill McCandless, Lone Star Capital Bank, Catherine Potter, Texas First Bank, Texas City John Jordan, Prosperity Bank, Victoria San Antonio Greg Pruitt, First National Bank, Rotan Murray Jordan, Brady National Bank Jennifer McCarty, Citizens National Bank of Matt Ramsey, Amarillo National Bank Barry Josserand, First National Bank of Hereford Texas, Waxahachie Chris Rand, Farmers State Bank, Groesbeck Tina Jourdan, TIB-The Independent BankersBank, Michael McCullick, D’Hanis State Bank, Hondo Corky Randolph, Alliance Bank, Rockwall Dallas Steve McIlhaney, Main Street Checks, Inc., Tim Kahanek, Prosperity Bank, Victoria Norman, OK Nancy Ray, Community National Bank & Trust of Texas, Mineral Wells Jonathan Kalich, First National Bank of Shiner Drayton McLane, III, Happy State Bank Mary Reeves, First National Bank of Moody, Michael Kalina, First National Bank of Shiner Drayton McLane, Jr., Happy State Bank Dallas Sam Kana, First National Bank of Eagle Lake Jim McVay, United Bank of El Paso del Norte Barry Renfroe, TIB-The Independent James Kangerga, Texas Leadership Bank, J.C. Melcher, First National Bank in Port Lavaca BankersBank, Boerne Royse City James Mellody, Texas Leadership Bank, Royse City Glenn Renken, Yoakum National Bank Kevin Kaplan, Prosperity Bank, Corpus Christi James Meredith, First National Bank Texas, Tot Richards, First State Bank, Graham Eugene Kasberg, First National Bank of Ballinger Killeen Terry Richey, Southwest Bank, Odessa Don Kaspar, First National Bank of Shiner Elam Miles, Mills County State Bank, Goldthwaite J.D. Riggs, Roscoe State Bank Douglas Kaspar, First National Bank of Shiner Frosty Miller, Llano National Bank John Ritchie, Community National Bank & Trust Scott Keeling, First National Bank of Hereford Jan Mills, First National Bank of Winnsboro of Texas, Mineral Wells Brad Keitt, Citizens National Bank, Henderson David Minear, First National Bank of Shiner, Richard Ritchie, Community National Bank & Tom Kelley, Yoakum National Bank Bellville Trust of Texas, Mineral Wells Terry Keltz, Brady National Bank George Minear, First National Bank of Shiner Don Roark, First Bank & Trust, Lubbock Ross Kerns, Amarillo National Bank Kelly Minear, First National Bank of Shiner, Frank Roddie, Brady National Bank Richmond Tom Key, Community National Bank & Trust of Gary Rothwell, First Bank & Trust, Lubbock Texas, Mineral Wells Randy Mitchell, First National Bank of Winnsboro Ronald Rudloff, Industry State Bank Joey Kimbrough, Hamlin National Bank T. M. Mobley, Kilgore National Bank Ed Rumage, Jacksboro National Bank Lisa Moeller, Industry State Bank, Columbus

40 ★ The Texas Independent Banker January/February 2014 IBAT 1/3 pg TIB Jan/Feb 2014

Gary Rusch, Alliance Bank, Greenville Robert Russell, Citizens National Bank, Henderson Richard Sadler, Farmers State Bank, Groesbeck Joe Saladino, HomeTown Bank, N.A., Galveston Craig Sanders, Amarillo National Bank Allen Sanderson, Fannin Bank, Bonham John Satterwhite, First National Bank of Winnsboro Billy Saucier, First National Bank of Winnsboro Clyde Sawyer, Pecos County State Bank, Fort Stockton Richard Scalzitti, Integrity Bank, ssb, Houston Marcus Scarborough, Citizens Bank, Tulia Frank Scheer, First Security Bank, N.A., Flower Mound Paul Scheurer, TIB-The Independent BankersBank, Dallas Sandra Schmidt, Industry State Bank Marcia Schmitz, Muenster State Bank Mark Schmutz, Prosperity Bank, Katy Patrick Schully, First State Bank, Gainesville David Schulz, Industry State Bank Milton Schwartz, Mills County State Bank, Goldthwaite Greg Schwertner, Brady National Bank Charlie Sellers, Hamlin National Bank Hanna Shanar, Integrity Bank, ssb, Houston James Sheridan, Texas Bank and Trust, Tyler Stephen Sherrill, Citizens Bank, Claude Stuart Shiloff, United Bank of El Paso del Norte William Shine, First National Bank Texas, Killeen Ben Shirey, Texas Bank and Trust, Canton Traci Shore, TIB-The Independent BankersBank, Dallas in every community they serve. We will Mary Shows, Yoakum National Bank FOUNDATION FOOTPRINTS keep you updated with the Foundation Beny Shuping, Hamlin National Bank cont’d from page 6 Footprints e-newsletter. Keith Shurtleff, Alliance Bank, Sulphur Springs Brian Sims, Happy State Bank this new level of activity. These four indi- Best wishes for 2014 to be a very good Thomas Sipp, TIB-The Independent BankersBank, viduals are leaving our board after many year for our industry and for each one of Irving years of service to the Foundation and we you. ★ Trent Sisemore, Happy State Bank, Amarillo Edward Smien, First National Bank Texas, Killeen are so proud of all they have helped the Alfred Smith, Happy State Bank Foundation accomplish. They include: Amelia Smith, First Lockhart National Bank J. Pat Hickman, Happy State Bank, one of Joy Smith, TIB-The Independent BankersBank, our founding members. Houston Michaux Nash recently retired from Ameri- Robert Smith, Sage Advisory Services, Austin Stanley Sommer, Brenham National Bank can National Bank of Texas, one of our Annette Sorrells, First National Bank of founding members. Hebbronville Darrell Brown, Executive Director, Student Donald Sparks, Prosperity Bank, Victoria Engagement, Tarleton State University Richard Spencer, Texas Bank and Trust, Longview Donald Spiess, Brenham National Bank Steve Doty, Compliance Consultant, Barbara Spiller, Junction National Bank McGregor Rob Roy Spiller, Junction National Bank We can never say thank you enough 2014 Teaching Excellence in R.E. Spradlin, Kilgore National Bank for years of service, idea sharing, dona- Financial Literacy award Drew Springer, Ballinger National Bank tions of time, money and the personal Phillip Springer, Ballinger National Bank Nominate a deserving teacher from your local energy they have so faithfully provided. Willis Stamper, Jacksboro National Bank school district and help us honor their commit- Patrick Stanley, Amarillo National Bank We are excited by your support and ment and contributions to promoting financial Aaron Starks, TIB-The Independent BankersBank, encouragement as we work to accomplish literacy in our public schools. Dallas our mission. One important goal of the Nominations deadline – Robert Stennis, Prosperity Bank, College Station Foundation is to remind Texans that True (Continued on page 43) Community Bankers make a difference march 31

January/February 2014 www.ibat.org ★ 41 UP FRONT cont’d from page 4 webinars in 2013. Our goal is to make available vital training offerings and low- est cost educational alternatives across all functional banking lines, consistent with the needs identified by the membership. I sincerely hope you will resolve to utilize the tremendous benefits offered through your association and engage in our program of work. Your involvement and support will ensure that we are suc- cessful in meeting the growing demands of you, our members. And it just might result in realizing the lofty resolutions and goals you have established for your own institution. ★

INTEREST RATES cont’d from page 14 IBaT 40TH aNNUaL CONVENTION challenge can be met and the potential sePTember 27–30, 2014 risks managed for a smooth and profitable 2014. ★ wOrTHINgTON reNaIssaNce HOTel • FOrT wOrTH Since 1979, we’ve helped our clients improve decision-making, manage interest rate risk, and maximize investment portfolio performance. Our proven approach of total IBaT Calendar resource integration utilizing software and January June products developed by Baker’s Software Solu- tions* — combined with our solid investment 28–30 IBAT Regional Meetings (Round 1) 3–4 Bank on Boot Camp experience and advice — makes us the invest- 26–28 Leadership Conference, San Antonio February ment firm of choice for many community 3–4 TechMecca, Austin July financial institutions. For more information, 9–11 Winter Summit XIV, Lake Tahoe 24–25 Financial Literacy Summit contact Jeff Caughron at The Baker Group: 20–21 Hold, Fold or Raise? An M&A august 800-937-2257, www.GoBaker.com, or Workshop for Community Banks 14–15 Operations Compliance Summit email: [email protected]. *The Baker Group LP is the sole autho- march 28 Appraisals Summit 10–13 IBAT Regional Meetings (Round 2) rized distributor for the products and services september 18 Credit Analysis Summit developed and provided by The Baker Group 27–30 IBAT Convention, Fort Worth Software Solutions, Inc. 19–20 Advanced Credit Analysis Summit October 26–27 Sales Culture Summit 12–17 Bank Operations Institute, Dallas COMPLIANCE GUY cont’d from page 46 april 31 Certified Community Bank Directors laundering activity. Do you identify and 17–18 Lending Compliance Summit Program consider both velocity and variety? Are 29–30 Nuts & Bolts of Banking Summit November there other ways than just reports to help 29–30 22nd Annual Congressional Visit 1 Certified Community Bank Directors identify unusual or suspicious activity? If may Program your bank does not do both, the picture 1–2 22nd Annual Congressional Visit 6 Investment & Asset/Liability may not be complete, and you might get Management Summit hit by a big surprise! ★ For information about any of these programs, contact Julie Courtney at 800-749-4228 or [email protected], or visit www.ibat.org. Kelly Goulart is IBAT’s Regulatory Compliance Manager.

42 ★ The Texas Independent Banker January/February 2014 PAC cont’d Frankie Tupa, Flatonia National Bank, Flatonia Blan Willoughby, First National Bank in Mark Stevenson, Texas State Bank, San Angelo Chan Turner, Texas Bank and Trust, Longview Port Lavaca Mark Stewart, Prosperity Bank, Victoria Jim Underwood, First State Bank, Graham David Wilson, Texas Bank and Trust, Longview Webster Stickney, Happy State Bank, Canadian Herschel Vansickle, Prosperity Bank, Victoria Gaddis Wittjen, Texas First Bank, Texas City Connie Stockbridge, Mason Bank Brian Vincent, Happy State Bank John Womack, Kleberg First National Bank, Kingsville Ron Stovall, Roscoe State Bank Brent Wade, Amarillo National Bank Rex Wood, TIB-The Independent BankersBank, William Stovell, First National Bank of Hereford Marjorie Wagner, Citizens National Bank, Henderson Dallas David Strayhorn, First Bank, Burkburnett R. A. Wagner, First National Bank of Shiner Ernest Woodward, Pecos County State Bank, Tony Street, Community National Bank & Trust Fort Stockton of Texas, Mineral Wells Travis Wall, First State Bank & Trust, Carthage Jerry Woolverton, Texas Bank and Trust, Tyler Richard Stuart, Community National Bank & Mark Walling, Texas Bank and Trust, Tyler M.J. Wooten, Llano National Bank Trust of Texas, Mineral Wells Claude Walter, Muenster State Bank Bob Wright, Roscoe State Bank Bryan Studdard, Roscoe State Bank Pat Ware, Amarillo National Bank Jack Wu, First National Bank in Port Lavaca Vican Sun, Integrity Bank, ssb, Houston David Watson, Yoakum National Bank F. Randolph Young, United Bank of Tommy Tatum, First National Bank of Hereford Michael Weaver, First National Bank of Shiner, El Paso del Norte Matthew Tavern, Happy State Bank, Amarillo Cuero James Young, First Bank & Trust, Lubbock Gary Taylor, Texas Bank and Trust, Longview Paul Weaver, Southwest Bank, Odessa Henry Weinzapfel, Muenster State Bank Kenneth Zapalac, National Bank & Trust, William Thiele, Yoakum National Bank La Grange H G. E Thompson, First State Bank, Yoakum Kay Wesson, Roscoe State Bank, Bastrop Mace Thurman, First National Bank of Moody Cyd West, First National Bank Texas, Killeen Russell Thurman, First National Bank of Moody Linda West, Happy State Bank Gilbert Tijerina, First National Bank of Hereford Katie Whitson, Citizens Bank, Claude Susan Tomchesson, Prosperity Bank, Sugar Land Charlie Williams, Citizens National Bank, March 1 Longview John Clyde Tomlinson, Texas Bank and Trust, Longview J. David Williams, Centennial Bank, Kerrville marks the beginning of Cheryl Traudt, Extraco Banks, N.A., Temple Larry Williams, Roscoe State Bank IBAT’s 2014 Toby Tripp, Southwest Bank, Odessa Perry Williams, Happy State Bank, Amarillo Eddie Tucker, First State Bank, Graham Karen Williamson, First National Bank of Moody PAC Drive Campaign

WELCOME NEW MEMBERS

®

BANKS across their branches – tracking repairs, mainte- expertise, and loan volume to build a diversified pub- The First National Bank of Mertzon nance, assets, warranties + manage and source lic finance portfolio. Mort Mertz, President & CEO service providers. Outsource ATM Paul Albright, Vice President Patriot Bank, Houston Henry & Peters, P.C. Cypress, TX W. Don Ellis, Chairman & CEO Gary Penkilo, CPA, Officer/Shareholder www.outsourceatm.com Tyler, TX ASSOCIATE MEMBERS www.henrypeters.com Outsource ATM provides ATM managed services, allowing financial institutions to focus on their core Accumatch Property Tax Intelligence Henry & Peters, P.C. currently provides accounting competencies and offload a resource drain. Our part- Ryan Liebbe, National Director of Sales services to 25 financial institutions. Besides tax and ners get the marketing and financial benefits; we take Dallas, TX audit services, we provide internal audit services, on the risk and regulations, hard costs, headaches, www.accumatch.com consulting, regulatory compliance, trust audit ser- maintenance and management of the ATMs. Own the vices, mergers and acquisitions, and capital planning Property Tax Servicer. We have created an automated benefits, not the hardware. and projects. We currently serve banks with asset platform that has the ability to match parcel num- sizes from $17 million to over $2 billion. Treasurer’s Choice Processing bers through our proprietary matching technology. Clayton Hosterman, Principal/Founder This allows our clients real time service with a fast Holman Capital Corporation Dallas, TX turnaround. All delinquent taxes are monitored and Lance S. Holman, President & CEO www. treasurerschoice.com reported on a monthly basis with no annual fee. Rancho Santa Margarita, CA Treasure’s Choice Processing unites community Corrigo Incorporated www.holmancapital.com banks with community brick and mortar and e-com- Tom Kay, Director National Accounts Holman Capital specializes in originating tax-exempt merce merchants. We have the tools, relationships, Allen, TX and taxable debt solutions issued by governments, and solutions to allow banks to help ALL merchants www.corrigo.com universities, and hospitals. We finance their essential accept and process credit card transactions driving The work order network powered by Corrigo is an purpose capital equipment, real property, infrastruc- unparalleled, stable, non-interest income from these easy-to-use web-based application that provides ture, and technology needs. Holman Capital provides relationships with the potential of raising average IBAT members the ability to effectively control costs its banking partners with pricing intelligence, credit revenue per merchant over 50%. H

January/February 2014 www.ibat.org ★ 43 a

November 12 IBaT speaks to a commu- IBAT nity focus outreach meeting sponsored by Woodforest National Bank in North Rich- Around land Hills IBaT celebrates the 75th the anniversary of mG archi- tects in Houston. State November 14 IBaT Education presents the and beyond Waco area Cluster program: BSa/amL – What’s Essential October 31 - November 2 in 2013? IBaT Education hosts The IBaT participates in the Hill Certified Community Bank Country meeting of Finan- Director’s program in cial Women in Texas in Dallas. Kerrville. October 1-2 October 10-11 its 125th anniversary in November 4-6 November 19 IBaT participates in the ICBa IBaT attends the pULSE IBaT attends the Texas Goldthwaite. IBaT celebrates with Integri- BSa/amL Institute in Dallas. Conference in New Orleans. association of Bank Coun- October 23 ty Bank at the grand opening October 3 sel annual Convention in IBaT attends TIB’s board November 5-6 of its pasadena branch. austin. IBaT Leadership Division meeting in Irving. IBaT Education presents IBaT speaks at the South Region 5 hosts a luncheon October 13-18 IBaT staff attends profes- Dodd-Frank Update! Regula- plains Bankers association in mount pleasant and a IBaT Education presents the sional advocacy association tions Z, B, and RESpa Semi- meeting in Lubbock. nar in San antonio. dinner in Longview. 2013 Bank Operations Insti- of Texas Conference in November 19-20 tute in Dallas. IBaT participates in the austin. November 5-7 IBaT Education presents West Texas/San angelo area October 15 October 24 IBaT attends BaI in Denver. the Branch manager Sum- Bankers meeting. IBaT Education and pBS co- IBaT Leadership Division November 7 mit Sessions 3 & 4 in The October 7 host the 2013 Texas Deposit Regions 3 and 4 host the IBaT Education presents Woodlands. IBaT attends a meeting of Documentation in Lubbock. DFW Educational Luncheon Dodd-Frank Update! Regula- November 20 the Financial Services Sec- October 15-16 and Golf Tournament at the tions Z, B, and RESpa Semi- IBaT, TBa and FDIC present tor Work Group at the Texas IBaT Services visits member Hackberry Creek Country nar in Irving. the 2013 FDIC Banker Out- Department of Insurance in banks in Northeast Texas. Club - Las Colinas in Irving. IBaT hosts the associate reach in austin. austin. October 16 October 25 member Houston area Net- November 20-22 working Event. October 7-10 IBaT Education and pBS co- IBaT speaks at the fall meet- IBaT Education participates IBaT participates in the host the 2013 Texas Deposit ing of the mays Business IBaT Leadership Division in the annual gathering in annual meeting of all the Documentation in arlington. School Banking program in Region 9 gathers for a New Orleans of the educa- College Station. community bankers associa- IBaT Leadership Division networking event and round tion departments of all tions in Virginia. Region 1 hosts the Florida IBaT Services participates in table discussion in Houston. the community bankers October 8 Scramble Golf Tournament the advantage Health plans November 7-8 associations. IBaT attends the South in amarillo. Trust Board of Trustees IBaT Education hosts the November 21 meeting in Oklahoma City. Central Texas Bankers October 17-18 IBaT Investments & asset/ IBaT speaks to the austin association meeting in IBaT participates in The October 27-30 Liability management Sum- association of Financial Schulenburg. Baker Group’s annual Semi- IBaT attends ICBa’s fall mit in Dallas. professionals. October 8-9 nar in Oklahoma City. meetings in West Virginia. November 9 November 22 IBaT Education hosts the October 18 October 29 IBaT Education Foundation IBaT, TBa and FDIC present 2013 Dodd-Frank Update! IBaT celebrates with mills IBaT celebrates 100 years of presents the 2013 IBaT the 2013 FDIC Banker Out- Regulations Z, B, and RES- County State Bank at community banking with The Teach the TeacherTm pro- reach in Richardson. pa Seminar in Harlingen. First State Bank, Columbus. gram in Houston.

44 ★ The Texas Independent Banker January/February 2014 ANNIVERSARIES Advertising Directory Prosper Bank, Prosper 110 years AccuSource Solutions www.accusourcesolutions.net pg 2 H ANICO www.anico.com pg 9

Guaranty Bond Bank, Mount Pleasant Avtek Solutions 100 years www.avteksolutions.com pg 17 BKD, LLP www.bkd.com pg 17

What Banks Should Know About the End of Support for XP cont’d Caltech www.caltech.com pg 48 migration. Starting a migration project in place to inform users what files will be First American Payment Systems a bit prematurely without discovery and lost in the migration— typically personal http://www.first-american.net/ pg 47 planning can actually cost banks time and music and video files. money because they could end up starting Granville Financial Group STEP 5: Migrate and measure www.granvillegrp.com pg 13 over. Ensure that, if you are deploying new IBAT Services STEP 2: Build a standard image servers during this process, it is included www.ibat.org/services pgs 11, 39 At this point in the game, efficiency in step one of this process. Make any is of the utmost concern. It is best prac- required network adjustments such as IBAT Services Success Story www.diebold.com pg 7 tice to create a standard image that will enabling multicasting. Identify and docu- be utilized on all Windows 7 systems ment test cases; then create a phased roll- Sam Houston State University www.shsu.edu pg 29 going forward. In fact, for future Windows out. Once you have completed all of the migrations, it would be a good idea to above the migration can begin. The Baker Group www.gobaker.com pg 15 make notes of steps that you planned and STEP 6: Metrics executed to ensure proper execution. Be The board of directors and executive The Bankers Bank www.thebankersbank.com pg 29 sure to include on the standard image all team will be looking for reporting follow- applications that are required on all base ing the migration to measure the key data TIB computer images. points from a high level perspective. The www.mybankersbank.com pg 41 STEP 3: Verify applications key metrics of interest will be total num- Transfund Banks should verify that their appli- ber of clients migrated, problems reported www.transfund.com pg 5 cations are supported on Windows 7. This during the migration process, overall can be the tricky (and most expensive) migration status and verification that the part of the process. If banks invested a ton bank is compliant with all licensing. of money in custom software, they may During the planning process banks be required to upgrade that software to will need to identify how the migration ensure compatibility with Windows 7. will look: will you upgrade your current machines, buy new client workstations or STEP 4: Capture user settings virtualize the end-user computing? Each This might seem like a minuscule fac- option has its benefits and drawbacks. tor, but this one task can make the differ- Although this process might seem daunt- ence between a successful or unsuccessful ing, there are plenty of resources for banks migration. It involves transferring each to utilize. A wise man once said “A jour- user’s network, operating system, applica- ney of a thousand miles starts with the tion and data settings. Imagine a bank with first step.” H 10 branches, 100 employees, 30 network printers, network drive mapping, favorites Denney James is the Strategic Account Man- and security settings, and then imagine the ager for IBAT at Dell. For more information on time it would take to individually handle how Dell can help your bank with the migration process contact Denney at 512.728.8763 or just this task. There should also be policy email him at [email protected].

January/February 2014 www.ibat.org ★ 45 THE COMPLIANCE GUY

By Kelly Goulart

Mining for...Unusual Activity? Get business started right out of the box! ast month, Saddle River Valley Bank, a two-branch committed, is being committed, or may be committed — 1stPayPOS™ provides increased capabilities over traditional New Jersey community bank whose assets were and structuring is a crime that has been committed, is being acquired by Center Bancorp Inc. in 2012, agreed committed, or may have been committed. countertop terminals in a simple and easy to use format. to pay $8.2 million to settle claims that it vio- What does a bank need to watch out for? One thing to lated anti-money laundering laws. That same identify and track is the amount and velocity in which month, CommunityOne Bank in North money is moved. The purpose of money laundering is Carolina agreed to a $400,000 restitution to move money around, and that translates to veloc- payment with the Department of Justice to settle ity. What tools does the bank have in place to iden- La claim that the bank failed to file suspicious tify transactions that are unexplained, repetitive, or activity reports and maintain an effective AML show unusual patterns? That all relates to velocity program. The case was brought when regulators charged of movement and requires tools to identify. that CommunityOne should have detected and reported Many community banks rely on system reports a Ponzi scheme that was operated by a bank customer that lack any historical look back — in other for two and a half years and involved laundering $35 words, the system reports are static and not million dollars through accounts at the bank. The les- dynamic. That is a fundamental weakness. A C son for community banks is that anti-money laundering good example of that is the Cash Transaction Report. Typ- M and “Know Your Customer” violations are not just a big ically those reports give the cash in and cash out on a par- Y bank problem. ticular business day to help identify transactions greater CM

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46 ★ The Texas Independent Banker January/February 2014 Call us at 817-317-7213 to find out about our bank programs. Get business started right out of the box! 1stPayPOS™ provides increased capabilities over traditional countertop terminals in a simple and easy to use format.

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Key Benefits Include Plus tons of standard features

• Quick & easy setup Inventory tracking Loyalty offers

• Remote management Personnel tracking Sales Analytics • Cloud backup • Tracks all payment types CRM tool Print, email, or text receipts

Call us at 817-317-7213 to find out about our bank programs.