Volume 29 Spring Issue 1 2018 Successful strategies require INSIGHT The Baker Group has long been known for its proven software and products, but it takes insight to make sound, strategic decisions. For financial institutions,insight can be defined as the ability to see what others may not see.

uccessful financial institution managers know the importance of achieving a high-performance Splan. Establishing such a plan requires not only sound data and accurate information, but also an insightful partner; The Baker Group is that partner.

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 seeking an insightful partner, you can be assured The Baker Group will help you make the right choices for your institution.

The Baker difference. In 1981, when Dr. James Baker revealed his innovative and insightful approach to banking in his book, Asset/Liability Management, little did he know The Baker Group would one day be working with over 1000 community financial institutions and be known as the industry leader in interest rate risk management and investment portfolio strategies.

Education Investment Strategies Asset/Liability Management Tailored Board Education Develop Quarterly Strategies Evaluate Earnings and Capital at Risk Webinars for ALCO Determine Optimal Relative Value Simulate Stressed Rate Scenarios Interest Rate Risk Seminars Manage Risk vs. Reward Tradeoff Analyze Risk Management Strategies

Leaders in innovation. The Baker Group remains the industry leader when it comes to innovation. We are truly a one-stop shop that never outsources our customizable reporting services. 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 Oklahoma City, OK | Atlanta, GA www.GoBaker.com Austin, TX | Indianapolis, IN 800.937.2257 Salt Lake City, UT | Springfield, IL

*The Baker Group LP is the sole authorized distributor for the products and services developed and provided by The Baker Group Software Solutions, Inc. Volume 29 Issue 1 Spring 2018

THE MAGAZINE OF THE ALABAMA BANKERS ASSOCIATION, INC. CONTENTS FEATURES 24 Recap of the 2018 Session: A Top 10 List for Bankers 10 Developing a Comprehensive Data Strategy One of the quickest and least controversial legislative sessions in Read about S&P Global Market Intelligence’s experience with more recent memory ended on March 29, when the than 100 community financial institutions that identified one common adjourned sine die just after noon. The session ended four legislative element present in successful business intelligence implementations. days and 25 calendar days before its mandated conclusion, giving legislators a brief head-start on the 2018 election season. 14 Strategic Considerations for Community Banks For many community bankers, a merger or acquisition transaction 28 125th Annual Convention & Trade Show often seems like a viable strategic alternative to address increasing Set for June 3-6, our annual convention and trade show will be held at compliance and funding costs, competition from non-banks, and the the beautiful Fairmont Southampton in Bermuda. Get an update on the need for scale to drive operational efficiencies and value creation. agenda, speakers and convention events!

18 From the Bank to the Capital 35 Is the TRID Improvement Act an Improvement? Alabama’s public servants, just like Alabamians themselves, come from While we were eagerly awaiting a final rule from the CFPB on the so- all walks of life. In the Alabama Legislature, for instance, you’ll find called “black hole” tolerance issue, a new bill was swiftly passed by the restaurant owners, car salesmen, pharmacists, stockbrokers, real estate House of Representatives last month: the TRID (TILA-RESPA Integrated agents, attorneys, farmers, and teachers. But scattered about the halls Disclosure) Improvement Act of 2017. of power in Montgomery are also current and former bankers and bank directors. DEPARTMENTS 20 Alabama Elections: A Preview 6 From the President’s Desk What Keeps You Up at Night? Todd Stacy, editor of Alabama Daily News, shares his thoughts about Alabama’s upcoming elections. This election year is getting into full 8 Chairman’s Message swing and there are lots of interesting races taking shape. Despite Great Organizations Run by Great People Produce Positive Results Democratic Senator Doug Jones’ special election win over Roy Moore in 9 Thank You BankPAC Supporters December, Alabama remains a mostly Republican state, meaning most Many thanks to the banks who have responded to our call for statewide offices will be pretty much decided in the GOP primary on commitments to our state political action committee! June 5. 38 ABA NewsLine Banking News from and for Alabama 23 Can Your Portfolio Play Defense, Too? 42 Half Century Club Honoring Bankers Serving Over 50 Years When it comes to the bank’s investment portfolio, the immutable truth we’re all living with these days is the inverse relationship between 45 ABA 2018 Calendar of Events Dates and Locations interest rates and bond prices. When interest rates rise, bond prices fall. 45 ABA Live Seminars, the Latest Topics & Updates Water runs downhill. Nobody likes it, but some are better prepared for it than others. 46 ABA Telephone & Webinars Dates and Topics

BANKING TRADITIONS The Magazine of the Alabama Bankers Association 3 CHAIRMAN CHAIRMAN-ELECT VICE CHAIRMAN TREASURER PAST CHAIRMAN PRESIDENT & CEO Tim Compton Jerry Powell David Nast Jimmy Stubbs William Petrey Scott E. Latham President & CEO EVP & General Counsel President & CEO President & CEO President & CEO Alabama Bankers Traditions Bank Cadence Bank Progress Bank & Trust River Bank & Trust First Citizens Bank Association, Inc. Cullman Birmingham Huntsville Prattville Luverne Montgomery

BOARD OF DIRECTORS Chris Carothers Vice Chairman & President, Citizens Bank, Winfield Leigh Collier Midsouth Region President, Wells Fargo, Birmingham CHAIRMAN Robert Dumas President & CEO, AuburnBank Josh Barnes FNB Bank, Grant Bob Freeman Executive Vice President, BBVA Compass, Birmingham CHAIRMAN-ELECT Dwight Gamble President & CEO, HNB First, Headland Clark Rainwater Merchants Bank of Alabama, Cullman Jack Hughes CEO, The First National Bank of Hartford VICE CHAIRMAN Hope Johnson CEO, Friend Bank, Dothan Candice Burge Bank of Tuscaloosa Jeff Kervin President & CEO, Troy Bank & Trust Company TREASURER Stratton Lewis, Jr. Chairman, President & CEO, Sweet Water State Bank Travis Colquett Brantley Bank & Trust Macke Mauldin President, Bank Independent, Sheffield PAST CHAIRMAN Richard Moore, Jr. Chairman, President & CEO, Peoples Southern Bank, Clanton Meredith Nelson Southern States Bank, Birmingham Howell Poole President & CEO, Bank of Moundville DIRECTORS Elizabeth Bailey Merchants Bank, Mobile Mike Ross President & CEO, CB&S Bank, Russellville Charlie Breedlove Friend Bank, Dothan Rodney Rushing Executive Vice President, ServisFirst Bank, Birmingham Heath Blevins First Jackson Bank, Stevenson Steve Smith Chairman, President & CEO, SouthPoint Bank, Birmingham Stacey Crabtree First Southern State Bank, Stevenson Alvis Storey Chairman & CEO, Merchants & Farmers Bank of Greene County, Eutaw Brian Davis The First National Bank, Brundidge Byron Heifner Bryant Bank, Tuscaloosa Rick Swagler Executive Vice President, Regions Financial Corporation, Birmingham George Hendricks Escambia County Bank, Flomaton Steve Whatley President & CEO, Southern States Bank, Anniston Chris Latta Farmers & Merchants Bank, Piedmont Shad Williams President & CEO, Cheaha Bank, Oxford Mac McCreless Traders & Farmers Bank, Haleyville Keith McCullough NobleBank & Trust, Anniston Matt Meynardie Central State Bank, Calera Chairmans Council Claude Edwards President, Bryant Bank, Tuscaloosa Alexes Murillo Traditions Bank, Cullman Rob Finney President & CEO, West Alabama Bank & Trust, Reform Matthew Pope Metro Bank, Pell City Jimmy Ramage Chairman, The First National Bank, Brundidge Jason Windham Bank Independent, Sheffield Will Walker Chairman & President, Traders & Farmers Bank, Haleyville Katie Windham Robertson Banking Company, Demopolis

Banking Traditions is the official publication of the Alabama Bankers Association, Inc., 445 Dexter Avenue, Suite 10025, Montgomery, Alabama 36104-3775. Phone: 334/244-9456. Fax: 334/244-9382. Banking Traditions is published four times a year in the Spring, Summer, Fall and Winter. Views and conclusions expressed in articles herein are those of the authors, not necessarily Alabama Bankers Association Staff those of the editors or officers of the Alabama Bankers Association, Scott E. Latham, President & CEO ([email protected]) • Janice W. Cox, Senior Vice President Inc.. Opinions expressed in this magazine do not necessarily reflect the policies of the Alabama Bankers Association, Inc.. ([email protected]) • Lisa Garrett, Vice President, Accounting and Information Systems ([email protected]) ADVERTISING: Inquiries should be directed to Shelley Hildebrand at the Alabama Bankers Association, Inc.. Rates will Jason Isbell, Vice President, Legal and Governmental Affairs ([email protected]) • Lisa Dunn, Director of Conference be furnished on request. The Alabama Bankers Association, Inc. reserves the right to omit any advertising or editorial copy deemed Services ([email protected]) • Debbie Pharr, Director of Education ([email protected]) • Shelley Hildebrand, unsuitable for publication. Publication herein does not necessarily imply endorsement of any product of service offered. Corporate Communications Manager ([email protected]) • Tabitha Abele, Executive Assistant /Banking School POSTMASTER: Send address changes to Banking Traditions, 445 Coordinator ([email protected]) • Beth Oliver, Sales and Recruitment Coordinator ([email protected]) Dexter Avenue, Suite 10025, Montgomery, Alabama 36104-3775. In November 2012, The Alabama Bankers Ashley Thomas, Bankers 2 Leaders Coordinator ([email protected]) • Peyton Tyrone, Administrative Assistant Association and the Community Bankers Association merged to form the Alabama ([email protected]) • Scott Miller, Executive Director, Alabama Multifamily Loan Consortium ([email protected]) Bankers Association, Inc.

4 CONVENTION ISSUE 2018 BANKING TRADITIONS

What Keeps You Up at Night? ABA is committed to helping bankers navigate an ever-changing banking landscape

op of mind for most bankers today are past and map out best plans for our future. thoughts about capital, liquidity, growth T opportunities, regulatory pressure, Top of mind for us has been the continuing effort increasing competition and the like. in Washington for final passage of S. 2155, The When asked the question, “What keeps Economic Growth, Regulatory Relief, and Consumer you up at night?” bankers responses tend to fall Protection Act, which passed by the Senate back in squarely within these areas. Yet some bankers describe March. The bill is now in the hands of the House of a potentially larger challenge of staying engaged with Representatives, a body which has previously passed customers to strengthen existing relationships and bills in a bipartisan manner including many provisions develop new ones to deepen revenue streams. And at in S. 2155. Stalling its passage in the House, however, the end of the day, every banker is right to be thinking are a number of amendments that members of the about these things and more. House Financial Services Committee and Committee Chairman Jeb Hensarling (R—TX) want added to As we gather next month for our 125th Annual the bill. With the Senate having clearly called the Convention in Bermuda, one thing is certain: the bill dead if amendments are added, we are urging landscape for bankers is continually changing and members of the House to pass the bill as is, and to looks nothing at all like it did in 1893. With that in work separately on gaining the additional measures mind, ABA has arranged meaningful presentations through alternative legislation. We are grateful for the intended to broaden your scope about what is doable long overdue work in both chambers, and expect the in managing today’s and tomorrow’s successful measure to pass soon, after which President Trump is commercial bank. expected to sign it into into law.

The “Amazon Prime Effect” is a presentation I’m We are especially thankful to the American Bankers anticipating. Amazon recently announced that more Association and also the Independent Community than 100 million people are members of it’s specialty Bankers of America for their efforts to usher this service which has changed most everything about legislation to the finish line. ABA officials were in how consumers shop, and Dave Defazio will talk Washington recently for the governmental affairs about how banks must understand the impact of summits hosted by both of these partners. these changing trends on our industry. Appropriately titled “Buckle Up Bankers,” David Kemp will be on hand Finally, your ongoing involvement and voice within to challenge our thinking about what’s next for banks the ABA is top of mind for me each day. We are grateful and bankers. Other presentations include developing for every opportunity to work for and serve you and strategies to exceed our customers’ expectations your bank. I hope to see you in Bermuda in June, at our as well as how to increase our leadership power as Bankers 2 Leaders conference in July, and at our CEO, bankers. So if you have not yet registered to join us, BankExec & Directors Conference in August. Together I hope you’ll reconsider as we gather to celebrate our we are stronger.

6 CONVENTION ISSUE 2018 BANKING TRADITIONS

Great Organizations Run by Great People Produce Positive Results

erving as your chairman for the last someone we can trust whenever we need year has been one of the greatest some support. S honors of my life. Every meeting or event has been a learning On two recent occasions I had vendor needs experience with great people sharing thoughts for two areas of our bank. I did not even and ideas to help improve our industry. While specifically ask Scott or Janice for help; I every member and every member bank runs only casually mentioned during phone his/its shop a little differently and while there conversations about other subjects that I are large differences in the asset sizes of our needed a vendor or help with an existing member banks, one thing is crystal clear vendor. Even though at the time Scott was every time a group of our members is in the in Washington, D.C. on lobbying efforts, and same room: great people are running great Janice was at her office planning a seminar, organizations that are producing very positive in each case they went above and beyond to results in every community of this state. connect me with the appropriate people. One of the two situations was resolved within two As I was collecting my thoughts for this days, and the other one within two weeks. If article, I googled the definitions of association we could have that kind of results removing and friendship. Association was defined as burdensome regulations, all our problems a connection or cooperative link between would be solved. people or organizations. Friendship was defined as a state of mutual trust and support In short, the state of Alabama may not rank between allies or allied nations. Well, it is very as high nationwide as we would like in obvious that our Alabama Bankers Association some categories, but our Alabama Bankers is run with a heavy dose of friendship. Under Association would have to rank right at the the leadership of Scott Latham and Janice Cox, top in any banking related category. Looking our entire association staff is always there as forward to seeing you in Bermuda!

8 CONVENTION ISSUE 2018 BANKING TRADITIONS Many thanks to those who have responded to our call for ★ Southern Bank Company ...... Mr. Gates Little commitments to our state political action committee, BankPAC. ★ Southern Independent Bank ...... Mr. Guy Wilkes ★ Southern States Bank ...... Mr. Stephen Whatley April 1, 2017 to March 31, 2018 ★ SouthPoint Bank ...... Mr. Stephen Smith ★ State Bank & Trust ...... Ms. Dana Peoples CAPITOL CONTRIBUTORS ★ Sweet Water State Bank ...... Mr. Stratton Lewis ★ Bryant Bank ...... Mr. Claude Edwards ★ Traditions Bank ...... Mr. Tim Compton ★ Cadence Bank ...... Mr. Jerry Powell ★ Trinity Bank ...... Mr. Manning Sanders ★ Citizens Bank & Trust ...... Mr. Charlie Williams ★ Citizens Bank of Winfield ...... Mr. Russell Carothers PAC PATRONS ★ First Bank ...... Mr. Jared Kirby ★ AmeriFirst Bank ...... Mr. Robert Ramsey ★ First Bank of Alabama ...... Mr. Chad Jones ★ Ameris Bank ...... Mr. Tracy Pickle ★ First Citizens Bank ...... Mr. William Petrey ★ AuburnBank ...... Mr. Robert Dumas ★ First Financial Bank ...... Mr. B.K. Goodwin ★ Bank Independent ...... Mr. Macke Mauldin ★ First National Bankers Bank ...... Mr. Victor Nichol ★ Bank of Brewton ...... Mr. Jerry Kelly ★ First Southern Bank ...... Mr. Jack Johnson ★ Bank of Moundville ...... Mr. Howell Poole ★ Merchants and Farmers Bank of Greene County ...... Mr. Alvis Storey ★ Bank of Vernon ...... Mr. Andy Johnson ★ Peoples Independent Bank ...... Mr. Royce Ogle ★ CB&S Bank ...... Mr. Mike Ross ★ River Bank & Trust ...... Mr. Jimmy Stubbs ★ CCB Community Bank ...... Mr. Thomas Lane ★ Traders & Farmers Bank ...... Mr. Will Walker ★ Citizens Bank ...... Mr. Tom Gulledge ★ Troy Bank and Trust Company ...... Mr. Jeff Kervin ★ Citizens State Bank ...... Mr. Anthony Burnett ★ Vantage Bank ...... Mr. Lowell Galloway ★ Community Spirit Bank ...... Mr. Brad Bolton ★ West Alabama Bank & Trust ...... Mr. William Finney ★ Eva Bank ...... Mr. Dewayne Morris ★ Exchange Bank of Alabama ...... Mr. Ricky Ray STATESMAN SUPPORTERS ★ First Community Bank of Central Alabama ...... Mr. Michael Morgan ★ Bank of Evergreen ...... Mr. Tim Dantz ★ First Exchange Bank ...... Mr. Greg Faison, III ★ Bank of Walker County ...... Mr. Mark Wilson ★ First Federal Bank ...... Mr. Charles Wolbach ★ Bank of York ...... Mr. Jimmy Collins ★ First Fidelity Bank ...... Mr. Stephen Eberhart ★ Brantley Bank & Trust ...... Mr. James Hollis ★ First National Bank of Dozier ...... Mr. W.B. Smith ★ Central State Bank ...... Mr. Mitt Schroeder ★ First Southern State Bank ...... Mr. Jack Lovelady ★ Cheaha Bank ...... Mr. Shad Williams ★ First State Bank of DeKalb County ...... Mr. David Henderson ★ Citizens Bank of Enterprise ...... Mr. Kelly Jones ★ First U. S. Bank ...... Mr. James House ★ Citizens Trust Bank ...... Mr. Jason Eppenger ★ FNB Bank ...... Mr. Steve Rownd ★ Commercial Bank of Ozark ...... Mr. Charles Harper ★ FNB of Central Alabama ...... Mr. Jim Flemming ★ Community Bank & Trust ...... Mr. Dave Bryant ★ Liberty Bank ...... Mr. Chris Bailey ★ Community Neighbor Bank ...... Mr. William Johnson ★ Metro Bank ...... Mr. Jason Dorough ★ Escambia County Bank ...... Mr. James Jones ★ National Bank of Commerce ...... Mr. John Holcombe ★ Farmers & Merchants Bank ...... Mr. Lin Latta ★ Peoples Bank of Alabama ...... Mr. Robin Cummings ★ Farmers & Merchants Bank - Lafayette ...... Mr. Stanley Tucker ★ Peoples Bank of Red Level ...... Mr. Phillip Murphy ★ First Bank of Boaz ...... Mr. Ricky Ray ★ Peoples Southern Bank ...... Mr. Richard Moore, Jr. ★ First Bank of Linden ...... Ms. Ann Yelverton ★ Peoples State Bank of Commerce ...... Ms. Brenda Barnes ★ First Cahawba Bank ...... Mr. Catesby Jones ★ Phenix-Girard Bank ...... Mr. Menza Dudley ★ First National Bank of Hartford ...... Mr. Jack Hughes ★ Progress Bank & Trust ...... Mr. David Nast ★ FirstState Bank ...... Mr. Steve Foster ★ Regions Financial Corporation ...... Mr. Grayson Hall ★ Friend Bank ...... Ms. Hope Johnson ★ Renasant Bank ...... Mr. John Bentley ★ HNB First ...... Mr. Dwight Gamble ★ Robertson Banking Company ...... Mr. Gary Holeman ★ Marion Bank & Trust Co...... Mr. Conrad Taylor ★ ServisFirst ...... Mr. Thomas Broughton, III ★ Merchants Bank ...... Mr. Grady Bedwell ★ SunSouth Bank ...... Mr. Monty Wiegel ★ Peoples Bank of Greensboro ...... Mr. Harris Coleman ★ Town-Country National Bank ...... Mr. Hal Huggins ★ PrimeSouth Bank ...... Mr. David Baggett ★ Trustmark ...... Mr. Jerry Host ★ Small Town Bank ...... Mr. Alan Hubbard ★ United Bank ...... Mr. Robert Jones, III

BANKING TRADITIONS The Magazine of the Alabama Bankers Association 9 Developing a Comprehensive Data Strategy Keys to Realize Change By Keith Taylor

Our experience with more than 100 community financial institutions has identified one common element present in successful business intelligence implementations.

10 CONVENTION ISSUE 2018 BANKING TRADITIONS and dissolve opposition derived from the simple resistance Successful organizations to change. Once the audience for the strategy is expanded to the entire develop, communicate organization, there is less ability to control the message and manage the conversation. A clear articulation of the “Why” and execute on a is critical to the entire organization. Here are some common comprehensive data challenges to watch out for: • Conflicting organizational priorities, strategy. The most • Resistance to change, and common problem is a • The next big idea. Let’s examine a couple of the potential challenges listed lack of understanding above. throughout the First, conflicting organizational priorities is not a new phenomenon. A clear articulation of the project and its organization. expected value gives everyone the permission to remain focused, even when they are confronted with other requests.

Comprehensive means that this strategy should apply Next, you need to be wary of the next big idea interrupting to all groups within the organization that use data — the rhythm and cadence of your project. A clear, understood including management, business units, and IT — but it also strategy will stop the next big idea from jumping the includes the processes, procedures and guidelines needed priority queue of things to get done. to direct the organization. The comprehensive look helps organizations move beyond the simple use of data for reports into thinking about things like storage, collection Develop a Steering Committee and access. A formalized data strategy may be a new endeavor for your organization, so do not hesitate to bring a variety of Usable data has also taken on new meaning as we see the backgrounds, expertise and perspectives to bear on the benefits of incorporating access to real-time, current data challenge. The diversity will increase the likelihood of with historical views. Data is not just for historical views. success as proponents of the project will exist throughout the organization. A comprehensive data strategy is more than a list of obvious statements or vague objectives; it goes well The diversity created by having a team own the data beyond a list of software vendors; and, most importantly, strategy with knowledge of the vision, progress made to it is designed to be flexible because your organization and date and future work planned will also help prevent key marketplace are changing rapidly. If your organization is person risk. thinking about how to transform your data into an asset, a strategy is essential to realizing the perceived value of the Align Goals & Create a Road map project. The first task of the steering committee is to establish goals. These should align with the overall goals of the Define the “Why” organization. It is important that the committee be able to Strategies and projects that impact the entire organization articulate how the data strategy fits. need a thorough answer to the question, “Why are we doing this?” As well as, “We are tackling this project because…” The delicate balance of short-term success and long- A clearly articulated raison d’être will answer questions term objectives is a primary responsibility of a steering before they are asked, calm fears before they create stress, committee. When looking at the long-term objectives, foster cohesiveness before independent ideas dilute focus consider the five- to 10-year plans for the organization. Do (Continued on page 12)

BANKING TRADITIONS The Magazine of the Alabama Bankers Association 11 Developing a Comprehensive Data Strategy In our experience, ensuring that expectations of the Continued from page 11 leadership team are aligned with the team executing the project is another key component of project success and you anticipate any large system conversions like the core or longevity. general ledger? Recognize that a data project of this nature may require When creating a road map, our best advice is to understand change to the culture of your organization. By our nature, immediate needs that could be solved by a new report or humans are resistant to change — especially change that access to daily information. Focus on helping an individual disrupts our daily tasks. This is why your team needs to or department do their job better today. This will create give the organization an understanding and confidence some quick wins and allow the organization to view future that this change will positively impact the institution’s road map items from the context of early successes. performance and will make their daily lives more productive. Change Is Certain It may seem counterintuitive to use a tool designed to Capacity provide focus, but situations change, systems change, new Finally, when putting together your road map, be honest information becomes available and organizations need to be and realistic with the capacity of the teams involved. For flexible. The request should start at the steering committee. example, if you are going to rely heavily on the finance or Once the “why” is defined for this change, feedback from accounting team to accomplish a specific milestone, be sure business stakeholders should be gathered to assess the to consider the amount of work required of them around impact and the road map should be updated if needed. month- and quarter-ends.

As a practice, a review of the data strategy road map should Plan to end the processes that were providing data in the occur each quarter and senior leadership should evaluate past and communicate it strongly in the organization. You the entire project annually. Each management team will exceed your team’s capacity if you expect them to should determine the appropriate cadence for themselves execute the old and the new. compared to the larger organization.

12 CONVENTION ISSUE 2018 BANKING TRADITIONS Measurement Define what success looks like early on. This will allow Keith Taylor is the Senior Product your team to measure against that goal and be able to Manager for SNL Banker at S&P Global communicate this success to management. If you wait until Market Intelligence, joining the team in the project starts, it becomes a moving target and success is June of 2015. harder to quantify.

We encourage our clients to think critically about what S&P Global Market Intelligence has been an business outcomes they would like to achieve and use this endorsed provider since 2017. as the starting point. We encourage clients to look at usage of the systems they are implementing and set goals for individuals using the new data. If a user is not accessing Copyright © 2018 by S&P Global Market Intelligence, a this information as frequently as desired, it provides the division of S&P Global Inc. managers with documentation to address in employee follow-up. These materials have been prepared solely for information purposes based upon information generally available to When you measure usage — and your teams know leadership measures usage — it will impact their the public and from sources believed to be reliable. S&P willingness to embrace the change brought with new data Global Market Intelligence, its affiliates, and third party availability. providers (together, “S&P Global”) do not guarantee the accuracy, completeness or timeliness of any content Communication provided, including model, software or application, and Communication may be last in this discussion but it is are not responsible for errors or omissions, or for results certainly not the least important. The best data strategy will obtained in connection with use of content. S&P Global quickly run into challenges if the steering committee is not able to effectively communicate the value of the project, disclaims all express or implied warranties, including (but the progress being made and success stories. not limited to) any warranties of merchantability or fitness for a particular purpose or use. Be proactive in the organization to meet with stakeholders throughout the project’s lifecycle. It is important to begin S&P Global Market Intelligence’s opinions, quotes and prior to the official decision on the project and share the “why” we are embarking on this work. This information credit-related and other analyses are statements of opinion will build confidence in those you will need to help execute as of the date they are expressed and not statements of fact the project. or recommendation to purchase, hold, or sell any securities or to make any investment decisions, and do not address Once you have shared your vision and reasons for the the suitability of any security. project, listen. When the team sees that the steering committee listens and makes changes when required, this builds confidence and engenders common goals. Finally, S&P Global keeps certain activities of its divisions separate it is important that people throughout the organization from each other in order to preserve the independence and understand what is being accomplished and if progress objectivity of their respective activities. As a result, certain is being made. Be sure to highlight wins early and often. divisions of S&P Global may have information that is not It is more important that communication is constant than formal. available to other S&P Global divisions.

Finally S&P Global provides a wide range of services to, or Your organization is likely sitting on a wellspring of data. relating to, many organizations. It may receive fees or other It takes a comprehensive approach to unlock the value economic benefits from organizations whose securities or in that data. If you achieve the step of realizing the value services it may recommend, analyze, rate, include in model that is present, you, then, need a strategy to guide your portfolios, evaluate, price or otherwise address. organization in extracting that value.

BANKING TRADITIONS The Magazine of the Alabama Bankers Association 13 STRATEGIC Considerations for Community Banks By Chris Couch and Brad Axelrod

For many community bankers, a merger or acquisition transaction often seems like a viable strategic alternative to address increasing compliance and funding costs, competition from non-banks, and the need for scale to drive operational efficiencies and value creation. While any decision to enter the M&A fray requires a highly individualized analysis, a few general considerations are always relevant.

14 CONVENTION ISSUE 2018 BANKING TRADITIONS INITIAL CONSIDERATIONS Strategic Fit Being able to offer the same products and services to a Can you manage costs? broader customer base or being able to offer new and The Dodd-Frank Act has brought an explosion of compliance different products and services to an existing customer base requirements. Headcounts required to address consumer are two ways that an M&A transaction can be a strategic compliance have virtually tripled. Similarly, technology fit for both parties beyond the potential benefits of a heftier costs have increased markedly as consumers have grown balance sheet. When cost structures are scalable, combined accustomed to web and mobile banking. And FinTech experience in specialty areas may allow both parties to competitors are increasingly capturing deposits and reducing deploy capital more efficiently and with less risk than they non-interest settling payments outside traditional bank- could independently. A combined deposit base might lead centric channels. Even with changes at the CFPB, industry the market, and an increased lending limit might allow experts report that new costs are not merely permanent but the combined bank to service the majority of the market’s will accelerate. With broad technology adoption, banking creditworthy borrowers, thereby discouraging out-of-market will increasingly move online. competitors.

Can you increase your deposit base without increasing Deal Economics your physical footprint? As with any deal, the economics have to make sense; costs and benefits must be weighed. Strategic transactions Technology is making it more expensive to operate brick- are expensive, drawing resources from core operations, and-mortar branches and making it easier for customers distracting management, and involving accountants, advisers, to bank elsewhere. Online accounts, ACH, and remote and lawyers. Consider these costs, not merely the out-of- deposit capture services facilitate banking from anywhere. pockets. Community banks have an opportunity to grow a deposit base without expanding their physical presence and should Then consider: Are stakeholders (and your shareholders) consider this type of growth. better off following the transaction? To a seller, that may mean customers have better access to more robust products, Can your team manage expansion? employees have greater stability and growth opportunities, If your institution has not grown appreciably in the last 10 and shareholders have more opportunity to earn healthy years, consider whether your management team can lead an returns. From a legal perspective, the value to shareholders expansion. Does your team have the technical and leadership drives the analysis. In an all-cash deal, the seller’s board skills to recruit, develop, and retain the talent necessary to has a duty to get the highest price possible. This may mean support expansion? Do your ideal growth markets possess engaging an investment bank to identify acquirers and/or the requisite talent pool? running an auction process. In an all-cash transaction, so long as the process is reasonably designed to maximize the Are your shareholders ready for the future? sale price, the board has satisfied its duty. Assuming you have the vision, the will, and the team to The board’s duty is different where all or part of the sales carry your institution into the future, are your shareholders consideration is the acquirer’s stock. Here, maximizing willing? For the first time in years, community banks that shareholder value does not necessarily mean “largest weathered the financial downturn are earning strong returns closing consideration.” Rather, a selling board in a stock- and, with recent tax cuts, are positioned to either pay for-stock transaction should also consider the likelihood of handsome dividends or reinvest in the bank. Boards must a bidder’s post-closing success relative to the current bank choose whether to reward their shareholders with current and relative to other bidders. A sale-for-stock transaction is dividends or defer those payouts in the interest of investment really a decision to trade one set of assets (the current bank’s toward future growth. business plan, operations, and management) for another. As with any investment decision, the board should look beyond STRATEGIC CONSIDERATIONS the closing-day stock price and perform due diligence on the acquirer. Where that diligence indicates a “lower” bid may If your bank’s path forward includes growth through be more beneficial overall to shareholders, i.e., the value acquisition or an exit through a sale, consider what makes a shareholders may actually realize over the mid- to good partner and how to evaluate or make attractive offers.

(Continued on page 17)

BANKING TRADITIONS The Magazine of the Alabama Bankers Association 15

Strategic Considerations for Community Banks may require the acquirer to adopt the target’s operational ( Continued from page 15) and pricing terms, or may contain considerable termination fees. Any of these issues can delay a transaction or affect long-term exceeds the value presented by the competing deal pricing. While it may not be possible to renegotiate key bid over the same period, the lower bid may be superior. vendor agreements, identifying challenging provisions may Where boards consider all relevant factors and information influence a bank’s decision to pursue a strategic transaction. in assessing stock-based bids, they will satisfy their duties If waiting until next year’s renewal term avoids challenges, notwithstanding electing for a “lower” bid. consider delaying until then.

For acquirers, while the board’s duty is fundamentally the Consider executive compensation agreements same – to work in the best interests of the shareholders – the Many banks have compensation agreements designed to considerations may be somewhat different.1 Because it would retain talented managers and executives. These agreements be impossible for the acquirer’s board to evaluate every – often put in place years before a strategic transaction possible deal, the board will generally consider how well a materializes – can have serious tax consequences for both the transaction may advance its strategic plan and how quickly employer and the employee when triggered. Section 280G of the acquisition will pay for itself. Whether an acquisition the United States Internal Revenue Code prohibits “golden furthers the strategic plan is largely a function of fit. While parachute payments,” which are payments “in the nature of payback can be measured in different ways, it will generally compensation” to any officers, directors or one percent (1 consider cost savings realized through operating efficiency percent) or greater shareholders where the payments to such (often consolidated operations and attrition), and increased individual are (a) contingent on a change in control and (b) revenue (often through cross-selling and expanded product in the aggregate greater than three times the average taxable offerings).2 In any event, the likelihood that payback is compensation for such individual for the five years preceding realized as projected is primarily a function of due diligence the change-in-control event, determined on a present-value and execution. basis. If such a payment is found to violate Section 280G, the company loses a tax deduction for a portion of the payment, STRUCTURING CONSIDERATIONS and the recipient is subject to a hefty penalty. The adverse effects of change-in-control or executive compensation After choosing a path, but prior to identifying a mate, there arrangements can often be mitigated with advanced planning. are few non-obvious points that can increase the likelihood of a successful strategic transaction. In today’s challenging business and regulatory environment for community banks, merger and acquisition transactions can be a tempting avenue to maximize shareholder value. Talk to your regulators early and often But M&A is complicated and risky, as the foregoing points Both the buyer and the seller will need regulatory approval. reflect. Early and careful deliberation and counsel can Buyers may increase the likelihood of procuring approvals identify key risk factors and smooth the process for a board by discussing plans with primary regulators in advance of and management team that elects to test the M&A waters. identifying a target. Regulators may express concerns or identify points of interest, all of which can help the bank prepare for the transaction process. Similarly, for boards con- Chris Couch and Brad sidering a sale in the future, an open dialogue with regulators Axelrod are partners at may identify areas of interest to address prior to taking the McGlinchey Stafford bank to market. Prior assessments may enhance value when where they help banks discussions with bidders materialize. and holding companies navigate the increasingly Consider your vendor contracts complex landscape with- in which they operate. Chris Couch Brad Axelrod Even the best vendor contracts contain burdensome Contact Chris Couch provisions that are triggered by a sale or acquisition. Some at (205) 725-6404 or may require vendor consent prior to assignment. Others [email protected].

1. Decisions to acquire are generally reviewed under the “Business Judgment Rule:” the decisions of a disinterested board, made after due consideration of relevant factors, will not be second-guessed by the courts. Shareholders who disagree with the board’s stew- ardship, the logic goes, can vote the board out. 2. Tax may also be an important consideration. The impact of the recent federal legislation is still being assessed.

BANKING TRADITIONS The Magazine of the Alabama Bankers Association 17 From the Bank to the Capital By Jason Isbell Alabama’s public servants, just like Alabamians themselves, come from all walks of life. In the Alabama Legislature, for instance, you’ll find restaurant owners, car salesmen, pharmacists, stockbrokers, real estate agents, attorneys, farmers, and teachers. But scattered about the halls of power in Montgomery are also current and former bankers and bank directors.

18 CONVENTION ISSUE 2018 BANKING TRADITIONS As the 2018 election season hits the home stretch – the Republican and Democratic party primary elections will be Senator held on June 5 – here’s a quick look at some of the names on Since 2014, Steve Livingston the 2018 ballot who have played a role in an Alabama bank, of Scottsboro has represented including two bankers running for the Alabama House of District 8 in the Alabama Representatives. Senate. In that role, Livingston, a Republican, represents all or parts of DeKalb, Jackson, Running for Re-Election and Madison Counties. A businessman, Sen. Livingston is the owner of The Fuel Center, a Governor Kay Ivey distributor of Chevron gasoline Before she was Alabama’s and lubricants. But Livingston 54th Governor, 30th Lieutenant is also an active member of the board of directors for FNB Governor, and 38th State Bank in Scottsboro. Sen. Livingston is running for his Treasurer, Kay Ivey was a banker. second term in the . At Merchants National Bank in Mobile, Gov. Ivey spearheaded Senator relationships with local schools and created an innovative A dentist by training, Paul financial literacy program for Bussman of Cullman has been students. That led her directly into a member of the board of a leadership role with the Alabama directors for Cullman Savings Bankers Association, where she not only helped create the Bank since 1994. He’s served in Alabama Banking School but was also instrumental in seeing the past as chairman not only of it located at the University of South Alabama. Not surprisingly, the bank’s board, but also of the Ivey was then part of the school’s first graduating class and board overseeing the Cullman recently served as the commencement speaker for the 40th Savings Bank Foundation. graduating class. Gov. Ivey is running for her first full-term as Bussman represents Senate the state’s chief executive. District 4, which includes all or parts of Cullman, Lawrence, Marion, and Winston Counties. Sen. Bussman is running for his third term in the Secretary of State Alabama Senate. John Merrill Given that he was SGA President Representative Tim at the University of Alabama in Wadsworth college, many might think that John Merrill has been in politics After serving as the attorney for – and only politics – his entire the Sulligent-based First State professional life. But in reality, Bank of the South for over 30 Secretary Merrill had a long years, was career with the Tuscaloosa County added to the bank’s board of School System that ended when directors in March of last year. he was elected to the Alabama Rep. Wadsworth was elected in House of Representatives in 2014 to represent House District 2011. And during the next four years – up until he was elected 4, which covers all or parts of Alabama’s 53rd Secretary of State – Merrill worked for First Jefferson, Walker, and Winston Federal Bank, a community bank in Tuscaloosa. While there, Counties. An attorney with offices he was responsible for new and existing customer relationships. in Lamar County and Winston County, Wadsworth was listed Secretary Merrill is an overwhelming favorite to win a second by the American Conservative Union as having the second term as secretary of state. most conservative voting record in the Alabama House of Representatives. He is running for his second term. (Continued on page 21)

BANKING TRADITIONS The Magazine of the Alabama Bankers Association 19 incumbent Steve Marshall is facing challenges from former Attorney Alabama General Troy King, former U.S. Attorney Alice Martin, and former Trump campaign official Chess Bedsole. Marshall is well-liked within the law enforcement community, but not very well-known outside of it. His fiercest Elections: critic at the moment is Martin, who frequently dings Marshall for being the “Bentley appointee.” That point of attack fell flat when it was revealed that A Preview Martin, too, pursued Bentley’s appointment even while she was leading By Todd Stacy an investigation into his conduct. King has by far the strongest name identification of the candidates in the race, having run for AG twice before, Editor’s Note: Todd Stacy is the publisher of Alabama Daily News, a new once successfully and once not. While not well-known, Bedsole has a web site dedicated to providing readers with the latest in state and federal compelling narrative, having been appointed to the Trump-Sessions Justice political news impacting Alabama. Originally from Prattville, Todd is well- Department, and appears to have the financial resources to go the distance, suited for this role, having previously worked as a communications specialist having loaned his campaign $600,000 as of this writing. A race this for a state speaker of the house, governor, and U.S. Congressman. Be sure to competitive is surely headed for a runoff, where the top two vote earners check out his website, www.aldailynews.com, and subscribe to his Alabama will compete head-to-head 45 days later. Which candidates make it to the Daily News digest, which has quickly become must-read material inside next round is anybody’s guess. Alabama political circles. The race for Supreme Court Chief Justice is shaping up to be an interesting This election year is getting into full swing and there are lots of interesting one, too. Current Chief Justice Lyn Stuart, who assumed the job after Roy races taking shape. Despite Democratic Senator Doug Jones’ special election Moore was removed from office in 2016, is running against Associate win over Roy Moore in December, Alabama remains a mostly Republican Justice Tom Parker, a longtime Moore ally. The pragmatic, work-oriented state, meaning most statewide offices will be pretty much decided in the Stuart has strong support in the business community, while Parker has GOP primary on June 5. support from an unlikely combination of tea party conservatives and trial lawyers. At the top of the ballot Gov. Kay Ivey is well-positioned to win a term in her own right after assuming office more than a year ago in the wake While these statewide races get top billing on the marquee, most of the of the Bentley debacle. She carries high approval ratings buoyed by a actual policy in Alabama is decided in the Legislature. Every state legislative booming economy, a relatively successful legislative session, and her steady seat is on the ballot this year, including many open seats. Of the 105 handling of the state’s top job after a tumultuous, scandal-ridden few Members of the House of Representatives, 25 are not running for reelection. years. Her closest competitor is Huntsville Mayor Tommy Battle, who boasts Of the 35-member State Senate, 11 will not seek reelection. That makes for an impressive record leading Alabama’s “Rocket City,” but has a limited some interesting campaign matchups down ballot. following outside of North Alabama. Pastor Scott Dawson has a strong following in Birmingham and State Senator Bill Hightower is well known One to watch is Senate District 7 in Huntsville, where State School Board in South Alabama, but each will find it difficult to compete with Ivey’s Member Mary Scott Hunter and Madison County GOP Chairman Sam popularity and superior fundraising. Givhan are facing off. More than $500,000 has been raised between the two candidates so far, making it probably the most expensive legislative In the race for Lieutenant Governor, Public Service Commission President race this cycle.

Twinkle Cavanaugh is running against Guntersville State Rep. Another interesting race is in Senate District 25, where Montgomery County and Mobile State Sen. . Cavanaugh is well known by voters Commissioner Ronda Walker faces attorney Will Barfoot. Barfoot has deep having appeared on the ballot statewide several times. Ainsworth has been family connections in the Montgomery area, while Walker has gained a fiery presence in the Alabama Legislature, including this past session significant public exposure from her time on the Commission. when he sponsored a controversial bill allowing trained teachers to carry

firearms in school. He has plenty of financial resources, though, which he Beyond the primary, a few GOP candidates are facing serious general will need to use to raise his profile through television and radio advertising election challenges. In Northwest Alabama, State Senator to compete with Cavanaugh’s recognizable name on the ballot. Glover is of Florence is being challenged by Democratic State Rep. Johnny Mack a popular, hardworking state senator, but probably lacks the statewide Morrow. Stutts, a doctor, is completing his first term in the Senate, while presence and resources to be very competitive.

By all accounts, the race to watch this year is for Attorney General, where (Continued on page 21)

20 CONVENTION ISSUE 2018 BANKING TRADITIONS From the Bank to the Capital ( Continued from page 19) West Alabama Bank & Trust. McCool recently received the coveted endorsement of the Alabama Civil Justice Reform Ballot First-timers Committee; the Association is a member of the Committee and supported McCool’s endorsement. Of note, the Alabama Bankers Association and its state political action Candidate for Alabama House of Representatives committee, BankPAC, has been proud to support each of these candidates Andy Whitt is the Senior Vice with a financial contribution. President/Madison County Executive for the First National Bank chartered in Pulaski, As the election season continues, this article will Tenn. He is a 20-year veteran of likely be updated with the names of other candidates banking, and currently oversees connected to Alabama’s banking industry. Do you the bank’s presence and growth into the North Alabama market. know a candidate for a statewide legislative, Whitt is running to represent judicial, or executive office with a strong District 6, a seat held since 2009 connection to your financial institution, either by the retiring Rep. Phil Williams that covers all or parts of Limestone and Madison Counties. as a current or former employee or board Thanks to strong fundraising efforts and name identification member? If so, send their info to ABA Vice President of Legal and throughout the district, Whitt is running unopposed in the Governmental Affairs Jason Isbell at [email protected], and primary and general elections – the only non-incumbent on the they might be included in any future updates to this article. ballot to do so. Alabama Elections Preview ( Continued from page 20) Candidate for the Alabama House of Representatives Morrow maintains strong popularity in a House District that already shared many Jeff Sorrells has spent a quarter- voters with Senate District 6. In Northeast Alabama, two state representatives century in banking and is are running for the open Senate District 10 seat: Republican and currently a Vice President and Loan Officer for the First National Democrat-turned-Independent . Most non-Republicans wouldn’t Bank in Hartford, Alabama. And have a chance statewide, but in areas like these that were traditionally blue after serving as Hartford’s mayor strongholds, moderate democrats or independents could win. for the last nine years, Sorrells has decided to run for the Alabama Of particular interest to Alabama’s bankers, the leaders of the two legislative House of Representatives. He committees that handle most banking-related legislation are deciding to retire is seeking the District 87 seat from public office: Republican State Rep. Ken Johnson of Moulton, chairman of currently held by Rep. Donnie the House Financial Services Committee, and Republican State Senator Slade Chesteen, who is leaving the House to run for the state Senate. Blackwell of Mountain Brook, chairman of the Senate Banking and Insurance That seat covers all or parts of Geneva and Houston Counties. Committee. Their successors will be selected next January by the Speaker of the House of Representatives and the Senate President Pro Tempore. Chris McCool Candidate for Alabama Court of Criminal Appeals In any case, there will be a lot of new faces in Montgomery next year when the Chris McCool, the longtime State Legislature reconvenes. I’ll be hitting the campaign trail, too, following the district attorney for Fayette, candidates and updating readers on how races are shaping up. Stay up to speed Lamar, and Pickens Counties is by subscribing to my Daily News email updates at seeking a seat on the Alabama www.ALDailyNews.com. Court of Criminal Appeals, a five-judge appellate panel charged with appeals of criminal Todd Stacy is the publisher of Alabama Daily News, a new cases. And for the last 14 years, website dedicated to providing readers with the latest in McCool has served on the board state and federal political news impacting Alabama. of directors of the Reform-based

BANKING TRADITIONS The Magazine of the Alabama Bankers Association 21

Can Your Portfolio Play Defense, Too? by Lester Murray Whether we like it or not, there are some immutable truths in this fickle world of ours that simply can’t be denied; like water running downhill. Or, the way it always rains the day after you wash the car. When it comes to the bank’s investment portfolio, the The result of such introspection will hopefully help answer a immutable truth we’re all living with these days is the inverse key question: How much risk is the right risk for my bank? relationship between interest rates and bond prices. When The answer is not the same for everyone. With the analytical interest rates rise, bond prices fall. Water runs downhill. tools available these days, portfolio managers can estimate with Nobody likes it, but some are better prepared for it than others. surprising accuracy the price volatility of individual items or an entire portfolio. Having that ability doesn’t prevent price depre- With the Fed having already instituted a handful of rate hikes ciation, but it does prevent it from being an unpleasant surprise, and the prospect for a few more almost a certainty, portfolio and that prevents a lot of hand-wringing. managers are seeing the value of their holdings decline as, for some, the level of market value depreciation becomes uncomfortably high. For some, perhaps, but not necessarily for The Cash Flow Defense all. No one enjoys watching the value of their assets decline, Once it is determined how much market risk can be comfort- but market risk is, and always has been, an element of portfolio ably tolerated, the security selection process actually becomes management. Not even the most prudent and savvy of portfolio simpler. Potential alternatives can now be evaluated in the managers are immune from market risk, and if your bank has a context of predetermined depreciation parameters. You’ve bond portfolio, it has exposure to market risk. identified your pain threshold and can now apply your analyti- cal techniques to measure what kind of exposure your various Why is it, then, that declines in valuations are so often accom- alternatives might bring with them. Those alternatives, whether panied by consternation and hand-wringing? Banks buy securi- they apply to broad strategic options or individual security ties in order to have earning assets, and whether securities have selections, can now be judged on the basis of their contribution an unrealized gain or an unrealized loss, they are still assets and to, or mitigation of, depreciation risk. they are still earning. Problems seem to arise for those portfolio managers who discover that somewhere along the way, they For those who have taken the steps that allow them to be became speculators and are dismayed when they learn, often comfortable in their own risk, downturns in the market do the hard way, that they somehow missed the top. Or, maybe not induce panic. Rather than lament the price depreciation they missed the bottom, or whatever it is they “knew” was wrought by higher market rates, portfolio managers know their going to happen. Perhaps blinded by shiny yields, their security efforts to create and maintain a steady stream of stable cash selection process failed to identify undesirable characteristics, flow will now be rewarded. This cash flow line-of-defense is like cash-flow volatility, that can accelerate price depreciation beneficial in two ways. Its source represents a diminution, in in the face of rising rates. the case of amortizing securities, of assets with below-market values. These funds now become the transactional ammunition with which to replace lower-yielding “underwater” assets with How Much Risk Is Too Much? higher-yielding, current-market bonds. Depreciation is reduced Other portfolio managers, and boards of directors for that and yield is increased. These are both good things, but they matter, seem a lot less stressed-out by rising rates and falling won’t happen unless care is taken to identify and acquire, along values. Does that mean they’re happy about their bonds being the way, the kinds of securities that will provide this valuable, underwater? Probably not, but they also know it’s not the end defensive cash flow just when it is most needed. Remember of the world. They know that because, as part of their portfolio what your father told you: defense wins championships. management process, they gave some thought to their portfoli- os’ role and along with that, their own appetite for risk. Are they Lester Murray joined The Baker Group in all loaned-up and just need a liquidity buffer or a temporary 1986 and is an associate partner within the parking place until loans are funded? Or, is loan demand weak firm’s Financial Strategies Group. Contact: and investments are required to be primary income genera- 800-937-2257, [email protected]. tors? Does the bank have large volumes of public deposits that require certain types of securities for collateral? How well is the bank capitalized and what other interest rate risk exposure is The Baker Group has been an present? Is asset quality an issue? endorsed provider since 2010.

BANKING TRADITIONS The Magazine of the Alabama Bankers Association 23 RECAP OF THE 2018 SESSION A Top 10 List for Bankers By Jason Isbell One of the quickest and least controversial legislative sessions in recent memory ended on March 29, when the Alabama Legislature adjourned sine die just after noon. The session ended four legislative days and 25 calendar days before its mandated conclusion, giving legislators a brief head-start on the 2018 election season.

24 CONVENTION ISSUE 2018 BANKING TRADITIONS During the session, representatives and senators introduced a total of 1,604 measures: 922 bills - 526 in 2. Senate Bill 318 (now Act 2018-396) by Sen. (R-Decatur): the House and 396 in the Senate – and 682 resolutions. the “Data Breach Notification Act”

In the end, 36 percent (579 measures) were enacted. Per This bill requires certain entities to provide notice to certain persons upon a breach of security that results in the usual, the vast majority of the new acts have nothing to unauthorized acquisition of sensitive personally identifying information. Strongly supported by Alabama Attorney do with the banking industry — there’s the resolution General Steve Marshall, Alabama became the 50th and final state to pass some type of data breach notification commending a Scottsboro police officer on receiving a bill. Given that financial institutions are required by federal law to provide notification to persons affected by a data Life Saving Certificate (HJR101) or the bill continuing the breach caused by the institution, this bill does not apply to financial institutions that are compliant with applicable Surface Mining Commission until 2022 (SB75). federal data breach guidelines so long as the Office of the Attorney General receives a copy of any customer notice But the 10 new laws below deserve provided pursuant to those federal guidelines. This exemption provision was included in the legislation at the urging of the the most attention from bankers. Alabama Bankers Association.

1. House Bill 417 (now3. SenateAct 2018-149) byBill Sen. Clay 60 Scofield (R-Arab) (now Act 2018-500) by Rep. (R-Phenix City): Under prior law, a county commission could only select its the “Examination of Bank Service Providers Act” public depository institution on or before the first week of This bill authorizes the Superintendent of Banks to regulate December, with such institution to be used the next calendar and examine certain third-party entities that perform services, year. No other public depositors – the state, local boards of by contract or otherwise, for a state-chartered bank. Entities education, etc. – had such a strict selection timeline and, in subject to regulation and examination perform either (a) fact, could make those selections at any time. This bill granted data processing services, (b) activities that support financial county commissions the same depository institution selection services (such as lending, fiduciary activities, deposit taking, flexibility currently available to all other public depositors. etc.), and (c) Internet-related services (such as electronic bill Working alongside the Association of County Commissions payments, mobile applications, and security monitoring, etc.). of Alabama, this bill was a perfect example of the Alabama The superintendent’s authority is triggered only when these Bankers Association directly responding to a problem with services are performed in such a way that the superintendent the current law that was brought to our attention by a member believes regulation or examination is necessary to ensure bank. the safe and sound operation of a serviced bank or banks to respond to a real or potential danger to the public welfare. The new law, modeled after language drafted by the Conference of State Bank Supervisors, contains some efficiencies that, (now4. House Act 2018-126) Bill by Rep. 90Kerry Rich (R-Guntersville) for instance, allow the superintendent to use an examination performed on the service provider by another state or Three years ago, the Alabama Legislature – at the urging of federal regulator within the previous 24 months. Adopted the Alabama Bankers Association and others – modified in some form by at least 40 other states, the law allows the the law related to the “right of redemption” for foreclosed superintendent to enter into “corrective agreements” with homesteaded residential properties. In short, for those or issue “corrective orders” to a service provider subject properties, the redemption period was cut from one year to to the superintendent’s authority. The original draft of this six months. Part of those changes required a person to receive legislation was much, much broader. After several discussions via certified mail a notice of his or her redemptive rights. But with the Alabama Bankers Association, the State Banking several open-ended questions, such as how to respond when Department narrowed the focus of the legislation. someone claimed they did not receive this notice, were left

BANKING TRADITIONS The Magazine of the Alabama Bankers Association 25 Together, we can help ALABAMA GROW LEGENDARY COMMUNITIES

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CONTACT BRYANT BANK’S EXPERT TEAM TODAY! 1.866.912.0507 | WWW.BRYANTBANK.COM unanswered. The new law makes technical notice-related Realtors to fine-tune language related to a financial institution’s changes designed to clear up any ambiguities in the 2015 law, responsibilities to accountholders and to the state Department which will hopefully allow the shorter redemptive period to of Revenue. be utilized as originally intended. The Association worked alongside the Alabama Association of Realtors and the Alabama Land Title Association to shepherd these updates through the legislature. (now8. House Act 2018-519) Bill by Rep.163 Paul Beckman (R-Prattville): the “Uniform Trust Decanting Act” Another product of the Alabama Law Institute, this legislation (now5. ActHouse 2018-577) Bill by Rep. Corley354 Ellis (R-Columbiana) allows an irrevocable trust created in Alabama to be poured into – or “decanted” – into another irrevocable trust under certain Under current law, when a property owner fails to pay local circumstances. Of particular interest to a bank’s trust officers, property taxes, a county tax official has two options: the official this uniform legislation had been adopted in five other states as can sell the property altogether, or the official can sell a tax lien of the end of 2017. for the amount of unpaid taxes. Both options are somewhat difficult to navigate, but no counties currently utilize the tax lien option. This bill, promoted by county tax officials from all across the state, significantly revises the statutes controlling the 9. Senate Bill 152 tax lien procedures. The Alabama Bankers Association worked (now Act 2018-163) by Sen. with the officials to draft a substitute version of the bill to make (D-Birmingham): the “Uniform Voidable Transfers Act” the tax lien options even more palatable to the lending and real estate industries. Yet another product of the Alabama Law Institute, this bill modifies, and updates, procedures included in the Uniform Fraudulent Transfers Act, which was originally adopted in 1989. Applicable for all transactions occurring after January 1, 6. Senate Bill 337 2019, the UVTA establishes an updated procedure by which a (now Act 2018-403) by Sen. Rodger Smitherman creditor may reach assets a debtor has transferred to another (D-Birmingham) person in order to prevent the assets from being used to settle a debt. Drafted by the Alabama Law Institute, this 83-page bill makes substantial changes to the Uniform Condominium Act, which Alabama originally adopted in 1990. Of particular interest to the Association were provisions of the bill related to lien priority 10. House Joint Resolution 14 between the lenders and condominium associations with an (now Act 2018-57) by Rep. (R-Anniston) interest in a particular condominium unit. This resolution creates a task force to combat “curbstoning,” which is when a person sells used motor vehicles under the pretense of being the owner of the vehicle – and not a motor vehicle dealer – in order to evade state and municipal statutes (now7. House Act 2018-467) Bill by Rep. 248 Kyle South (R-Fayette): and rules for licensed motor vehicle dealers. The Task Force the “Alabama First-time and Second Chance Home Buyer to Combat Curbstoning consists of ten members, include one representative appointed by the Alabama Bankers Association. Savings Account Act” The panel’s findings and recommendations are due to the This bill allows first-time and “second chance” home buyers Legislature by Feb. 1, 2019. – an individual who resides in Alabama and has not owned or purchased, either individually or jointly, a single-family residence during a period of ten years prior to the date of Jason Isbell is ABA’s Vice President of Governmental and Legal purchase – to establish home buyer savings accounts to save Affairs. He may be contacted at jisbell@alabamabankers. funds for a down payment and closing costs for the purchase com. Are you receiving our Capitol Notes publication of a home. Contributions made to these accounts qualify for a state income tax deduction of up to $6,000 or $12,000 that is distributed each week when the Legislature is in (depending on filing status) for up to five years. The Alabama session? If not send your email address to shildebrand@ Bankers Association worked with the Alabama Association of alabamabankers.com to be added to the list.

BANKING TRADITIONS The Magazine of the Alabama Bankers Association 27 ALABAMA BANKERS ASSOCIATION Annual 125th Convention ANNUAL CONVENTION & Trade Show JUNE 3 - 6, 2018 Bermuda fuses British charm, African heritage and other influences old and new into a cultural mix that can’t be found anywhere else. Historic sites meet modern cultural gems, museums display everything from shipwreck artifacts to contemporary fine art, and music and dance enliven the mood all around the island. You’ll come across Gombey dancers at festivals, artisans crafting masterpieces in their studios and musicians jamming the night away at nightclubs and pubs. Feel the pulse of Bermuda and start exploring.

28 CONVENTION ISSUE 2018 BANKING TRADITIONS Tentative Agenda

SUNDAY, JUNE 3 12 - 3 p.m. Bermuda Triangle and Shipwreck Snorkel* 6 - 7 p.m. Registration and Welcome Reception B2L Silent Auction and Trade Show Begins MONDAY, JUNE 4 7:45 - 8 a.m. Prayer Service 7:30 - 8:30 a.m. Breakfast Buffet 8:45 a.m. -12 p.m.General Business Session 10 a.m. - 12 p.m. Famous Homes and Hideaways Tour* 5:30 - 6:45 p.m. Reception and B2L Silent Auction Ends 7 - 9:30 p.m. Bermuda Beach Bash Dinner & Entertainment TUESDAY, JUNE 5 7:45 - 8 a.m. Prayer Service 7:30 - 8:30 a.m. Breakfast Buffet 8:30 a.m. -12 p.m. General Business Session 1:30 p.m. Golf Tournament* WEDNESDAY, JUNE 6 7:45 - 8 a.m. Prayer Service 7:30 - 8:30 a.m. Breakfast Buffet 8:30 a.m. -12 p.m. General Business Session 2 - 5 p.m. Catamaran Sail and Snorkel* 6 - 9 p.m. The British are Coming Dinner & Entertainment * Optional events, additional fees apply.

BANKING TRADITIONS The Magazine of the Alabama Bankers Association 29

Sponsors Convention Events DIRECTORS’ CLUB Mauldin & Jenkins Sunday, June 3 The Baker Group WELCOME TRADITIONS CLUB RECEPTION FHLBank of Atlanta & REGISTRATION SHAZAM Celebrate 125 years of gatherings at the welcome reception for our EXECUTIVE SPONSORS annual convention. Reconnect with old friends and enjoy refreshments Bradley while getting a head start on the Bankers 2 Leaders Silent Auction. Our trade show will be set up with our vendors ready to interact with our Bryant Bank guests. BBVA Compass Deluxe Strategic Sourcing Monday, June 4 Independent Community Bankers of America BERMUDA BEACH BASH John M. Floyd & Associates dinner & entertainment Jones Walker Pathway Lending The oceanfront beach club will be all ours for the night at our Monday ServisFirst Bank evening Bermuda Beach Bash! After a cocktail party and the conclusion of our B2L Silent Auction in the trade show area, guests will take a Synovus shuttle down to the beach for our Monday evening event. Enjoy the pink DELUXE SPONSORS sand beach and ocean views during a delightful surf ‘n turf meal. Alabama Housing Finance Authority Balch & Bingham Wednesday, June 6 First National Bankers Bank THE BRITISH ARE COMING! Jackson Thornton dinner & entertainment Maynard Cooper & Gale The last night of covention is always the most spectacular, and this Warren Averett event will continue that tradition. Join us at the Fairmont’s famed Waterlot Inn for craft cocktails, dancing on the dock, and a lavish feast. PREMIUM SPONSORS Defining Bermuda’s steakhouse experience for nearly 350 years, the Alabama Multifamily Loan Consortium historic Waterlot Inn remains Bermuda’s best. Nestled Banc Consulting Partners dockside on Jew’s Bay, the Waterlot Inn offers Harland Clarke breathtaking sunsets. Not only will we have Porter Keadle Moore access to the restaurant and dock for Travelers this event, but also to a private GENERAL SPONSORS yacht moored at the pier. Banks Street Partners BSI, Inc. CenterState Bank Diebold Nixdorf High Cotton Porter White & Company

BANKING TRADITIONS The Magazine of the Alabama Bankers Association 31 Partnering Alabama’s Bankers with Providers for Enhanced Services and Growth

When it’s time to look for new service providers or to rethink current ones, your first call should be to ALABAMA BANKING SERVICES. We maintain a team of providers who have participated in a rigorous due diligence process to earn the Alabama Banking Services endorsement. Bankers like you have participated in the process to ask all the hard questions. Nothing replaces your own due diligence, but we try to make your job easier. The endorsement process uses the purchasing power of Alabama Bankers Association members to negotiate meaningful benefits. If you are ready to make a change or add a new service, we hope you will give our ESPs careful consideration. For more information about how Alabama Banking Services can help you, contact Janice Cox at (334) 244-9456. CONVENTION GENERAL SESSION SPEAKERS

The Amazon Prime Effect bestselling author and top rated speaker Dr. longer good enough! It doesn’t matter if Adam Thompson Jerry V. Teplitz will show you how to make you are a professional (educator, attorney, Subscription services are quickly becoming every day that way through actual tools and physician, etc.), a management professional, the dominate strategy of today’s best retailers techniques that will increase your energy or an entrepreneur... you now have to consider and have caused a monumental shift in the level resulting in more effective leadership the ‘CUSTOMER EXPERIENCE’ from the minute a way people buy. More than 50 percent of capabilities. customer makes contact until the minute they all American households now subscribe to are done! Amazon Prime, and more than 200 million Strategies to Exceed people subscribe to this and other retail Customer Expectations Navigating the World of services such as Netflix, Spotify, Dollar Shave Ann Brode FinTech Club, Costco and AAA. Bank marketers have a To better meet the needs of your customer, you Don Musso duty to understand these trends and drive their must first truly understand them. What are Financial technology (Fintech) has a different financial institution beyond just transactions they expecting in regard to services, product meaning to different people. Specifically, to connect better with the lifestyles of today’s and delivery channels? The customer of the within community banking, fintech has modern consumers. Adam Thompson reveals future may or may not look like your current different meanings for an organization’s how fee-based services like Amazon Prime, customers. True? The strategic direction of your customers, employees, management team and Dollar Shave Club and Netflix are rewriting bank must take that customer of the future board members. With recent rapid progression the brains of today’s customers. Learn how into consideration or you will miss the mark. of this technology, it is changing banking for these companies use innovative mobile apps This session will discuss how to “figure out” all all stakeholders of an institution. This change and communication strategies to engage customers, current and future. Ann will present is coming in product and service offerings, customers and become more valuable to their survey results of what people want and expect; delivery channels, convenience, corporate subscribers and what these changes mean for you may be surprised! governance and much more. Adopting and banking. continual innovation will be necessary for Buckle Up Bankers: community banking institutions to continue to Increasing your Leadership Wild Ride Ahead compete and establish competitive advantages Power to New Levels of David Kemp in this ever-changing technological landscape. Excellence Innovative thinking and performance- Jerry Teplitz, Ph.D. enhancing ideas will be coming at you fast Maximizing Profitable Fee Have you ever had a negative day as a leader? and furiously during this interactive session Income in a Bank How did you feel at the end of it? Did you in which David asks the tough questions, Mark Stenson feel tired and drained? Now, have you ever challenges conventional wisdom and provides For a bank to be high performing it needs to had a positive day as a leader? How did you insights into the future of banking. have strategies to maximize the profitability feel at the end of it? Energized. Isn’t there an of various sources of fee income: i.e. trust, increase in your productivity, effectiveness and Get a Competitive Edge by investment services, insurance, ACH, bottom line on that positive day? What would Coloring Outside the Lines interchange, mortgage, and loan fees. This that do to your abilities and successes as a Jeff Tobe presentation will provide proven tactical leader? You can have that outcome every day! In a high energy, humorous style, Jeff Tobe strategies that have been successful for many In this highly interactive program, Amazon shows attendees that customer service is no high performing banks.

BANKING TRADITIONS The Magazine of the Alabama Bankers Association 33 A community bank’s trusted ally for over a century.

First Tennessee Correspondent Services offers a range of robust financial and business solutions to support community banks. When you work with First Tennessee, you’ll get the personal attention that has made us a continuous provider of correspondent services for over 100 years. TALK TO A RELATIONSHIP MANAGER ABOUT YOUR BANK’S NEEDS. CALL 800-453-7686 OR EMAIL [email protected]

Holding Company Loans | Fed Funds | Letters of Credit | International Services Image Cash Letter | Settlement Services | Commercial Safekeeping

©2018 First Tennessee Bank National Association operating as First Tennessee Bank and Capital Bank. Member FDIC.

FTB_B2B_8581_11318_8.5x11_4c_Laugh.indd 1 3/7/18 9:38 AM Is the 'TRID Improvement Act' A community bank’s trusted ally for over a century. an Improvement? By Victoria E. Stephen

Now you may be asking yourself, “What exactly is the While we were eagerly awaiting a final problem with how title insurance is disclosed?” Well, to put rule from the CFPB on the so-called “black it simply, it isn’t disclosed the way it is actually charged, and some argue that this is counter to the general spirit and hole” tolerance issue, a new bill was swiftly intent of the TRID rule. As Congressman Hill pointedly put it, “This legislation seeks to correct this error by ensuring passed by the House of Representatives last that consumers know the exact cost of their title insurance – not the number reported as one price on a lending estimate month: the TRID (TILA-RESPA Integrated and another price on a closing document.” Disclosure) Improvement Act of 2017. In many states, when a borrower purchases a lender’s title insurance policy (as is often required by the bank), the borrower will receive a discount on the lender’s title policy if an owner’s title policy is also purchased. This markdown On Oct. 5, 2017, Congressman French Hill is often called a “simultaneous issue discount,” and although it effectively reduces the rate of the owner’s title introduced H.R. 3978, which eventually had policy, the discount is technically applied to the lender’s four other bills tacked onto it, making it a title policy. The CFPB didn’t much care for this approach, though, and five-in-one set of changes for the financial designed a specific formula for banks to use for disclosing services industry. One of these bills, the title policies under the TRID rule. The rule as it stands today reads as follows: TRID Improvement Act, specifically amends The premium for an owner’s title insurance policy for and clarifies how title insurance premiums which a special rate may be available based on the simultaneous issuance of a lender’s and an owner’s policy and discounts are disclosed on the Loan is calculated and disclosed pursuant to § 1026.37(g)(4) as follows: Estimate and Closing Disclosure. On Feb. 1. The title insurance premium for a lender’s title policy is based on the full premium rate, consistent with § 14, the House of Representative passed the 1026.37(f)(2) or (f)(3). First Tennessee Correspondent Services offers a range of robust financial and business solutions to support 2. The owner’s title insurance premium is calculated by community banks. When you work with First Tennessee, you’ll get the personal attention that has made us bipartisan bill by a healthy 271 to 145 vote. taking the full owner’s title insurance premium, adding a continuous provider of correspondent services for over 100 years. the simultaneous issuance premium for the lender’s coverage, and then deducting the full premium for TALK TO A RELATIONSHIP MANAGER ABOUT YOUR BANK’S NEEDS. lender’s coverage. CALL 800-453-7686 OR EMAIL [email protected] 3. 12 CFR 1026.37(g)(4)-2

In simpler terms, the lender’s title policy must be disclosed Holding Company Loans | Fed Funds | Letters of Credit | International Services as the full undiscounted amount, while the owner’s title Image Cash Letter | Settlement Services | Commercial Safekeeping policy is disclosed as the cost of both the owner’s and

©2018 First Tennessee Bank National Association operating as First Tennessee Bank and Capital Bank. Member FDIC. BANKING TRADITIONS The Magazine of the Alabama Bankers Association 35

FTB_B2B_8581_11318_8.5x11_4c_Laugh.indd 1 3/7/18 9:38 AM lender’s title policies together, minus the cost of the full to clarify the infamous “black hole” problem is still lender’s title policy. For those math types out there, this is pending, with no word yet on when it might be made what it looks like as a formula: final. Mandatory compliance for the other 2017 TRID amendments is fast approaching though. Generally, Lender’s Title = Cost of Lender’s Title without purchasing compliance with the 2017 amendments is mandatory for Owner’s Title transactions for which the bank receives an application on or after October 1, 2018. As a reminder, banks are allowed but not required to implement the amendments early, and Owner’s Title = (Owner’s Title + discounted Lender’s Title) – don’t necessarily have to implement them all at once. Cost of Lender’s Title without purchasing Owner’s Title For a rule that was originally designed to help consumers For example, if the lender’s title policy on its own is $900, better understand the home closing process, many and a $1,000 owner’s title policy is also purchased, the would say that we have a long way to go, but the TRID lender’s title policy is discounted to $100 and the owner’s Improvement Act seems to be a step in the right direction. title policy remains at its full $1,000. Under the current TRID rule, disclosing lender’s title as $100 and owner’s As always, Compliance Alliance is here to help you title as $1,000 as it is actually charged would be incorrect. through these and all other regulatory changes. For any The correct way to disclose these facts is: questions or concerns, feel free to give us a call at (888) 353-3933, or email at: [email protected]. Lender’s title policy = $900

Owner’s title policy= $200 [$1000 (Owner’s) + $100 Victoria E. Stephen serves as Associate General Counsel for (Discounted Lender’s) - $900 (Lender’s) = $200 Compliance Alliance. As one of our hotline advisors, Victoria helps C/A members with a variety of compliance and For a rule that was created to support transparency and regulatory questions. accuracy in the home closing process, many understandably question whether this convoluted formula may be doing just the opposite. Founded in 2011, Compliance Alliance is the only The TRID Improvement Act seeks to change this rule, and require disclosure based on the actual amounts imposed. banking industry compliance resource that Specifically, the requirement to “itemize all charges” will be replaced with one to “itemize all actual charges,” and is owned, operated and managed by 28 state the following sentence will be added: “Charges for any title bankers associations (including ABA). insurance premium disclosed on such forms shall be equal to the amount charged for each individual title insurance Based on the needs of community bankers, Compliance Alliance policy, subject to any discounts as required by State provides its members an all-inclusive set of bank compliance tools and regulation or the title company rate filings.” services that help them stay up-to-date with consumer and regulatory requirements. To apply these proposed changes to our example above, the bank would disclose the lender’s title policy as $100 Members of Compliance Alliance receive: and the owner’s title policy as $1,000, exactly as they are • Access to an extensive collection of community banking charged by the title insurance company. compliance resources created specifically for them by industry experts. So where do we go from here? As of publishing, the bill • A hotline for compliance-related concerns. is still awaiting passage by the Senate before it moves • Reviews of company advertising or marketing campaigns, policies, on to the President, so there are several steps left before procedures, disclosures and new products. these changes potentially become final. The effective date currently set out in the bill is 18 months after Compliance Alliance is the only banking compliance resource in the enactment of the Act, so banks will have plenty of time for market today that includes all of our products and services in our annual implementation if and when it is enacted. membership fee with unlimited access to all member employees of our subscribing banks. As for other TRID changes, the proposed rule that seeks

36 CONVENTION ISSUE 2018 BANKING TRADITIONS

Progress Bank PERSONNEL announced the addition of two new Metro Bank congratulates Tracy Perry, employees. Shain senior vice president, on his promotion Segars joined the to branch manager of the Heflin office. bank as senior vice Perry has 25 years of experience in president, mortgage banking. He worked as the chief credit Shain Segars Kyle Conrad division head. analyst for the bank for the last seven Segars began his career in mortgage years. Prior to that he worked as a senior Tracy Perry banking with Castle Mortgage Corp. lender for Peoples Bank in Georgia. in Vestavia where he worked for 12 years as a senior vice president and NobleBank & Trust secondary market officer. He then added Bill Pitts to joined ServisFirst Bank where he its staff as senior vice worked as a secondary marketing president – credit Nick Rockhill officer for three years. Kyle Conrad administration. Pitts joined the bank as an assistant vice president, business comes to NobleBank banker in the Birmingham market. He will be responsible having previously Bill Pitts Mike Tyson for developing and sustaining financial relationships with worked at the First businesses throughout the area. Conrad has a strong National Bankers Bank history of working with businesses and with commercial and at SouthTrust loans, as well as experience with retail banking. The bank Bank. He will work congratulates Nick Rockhill on his promotion to assistant in the Birmingham vice president and business banker for the Huntsville office behind The area. Rockhill joined the bank in 2012 as a client specialist Summit. Another and later became an assistant branch manager and new employee, Mike Mike Coggin Trey Pilkington branch sales manager for the Jones Valley office in Tyson, has joined the Huntsville. bank as vice president and credit analyst. Tyson joins the bank with 22 years of experience having worked previously Renasant Bank for BB&T, Colonial Bank, Regions Bank and SouthTrust Bank. welcomes Mike Coming on board as a senior vice president is Mike Coggin. Martin as a member Coggin has a vast amount of experience in the financial of its lending team in services industry with more than 25 years of experience in Auburn. Martin will commercial lending and other banking services. Coggin serve as a senior vice previously worked for BB&T, Wells Fargo and the Bank president, commercial of North Georgia. He has experience with complex loan Mike Martin Clay King relationship officer. assessments and has managed loan portfolios in excess He has worked for 18 years as a commercial banker of $250 million. He will be responsible for growing the in Auburn and Opelika. Also joining the bank is Clay commercial client base for the Birmingham branch. Trey King who will work as an SBA development officer in Pilkington was promoted from credit analyst to commercial Birmingham. Before joining Renasant, King worked in loan officer. He has worked for the bank for two years.

38 CONVENTION ISSUE 2018 BANKING TRADITIONS similar roles for various regional and national banks. program. The bank also promoted Jim River Bank & Trust in Millbrook Holtkamp to senior congratulates Jon Foshee on his vice president. promotion to city president. Foshee Holtkamp leads the joined the bank in 2012. Commercial and Industrial Banking team Jim Holtkamp Emily Frazier Robertson Banking Company in for ServisFirst Bank Demopolis announced the promotion Jon Foshee Huntsville. His primary of Whit Bird, CCIM, to city president of focus is in government the Birmingham market. Bird joined contract banking, in the bank in 2017 when it expanded which he oversees a into Birmingham. Bird and his team are commercial banking located in the historic Federal Reserve team consisting of a Building in downtown Birmingham. The commercial banker, Blake Freeman Kasey Golden bank also announced the promotion credit analyst and of Jessica Snyder to assistant cashier. Whit Bird loan administrator. Emily Frazier was Snyder joined the bank in 2011 and one of the Huntsville team’s first four works as a loan assistant in the Northridge office. members when she joined the bank in 2006 as an executive assistant. She ServisFirst Bank later became a cash management congratulates several officer and has now been promoted to Stacey Marks employees in the a credit analyst. Blake Freeman began Huntsville office working for ServisFirst as an intern while still in college. He on their recent joined the bank full time as a credit analyst in 2015 and has promotions. A bank now been promoted to commercial banking officer. After employee since 2007, serving as a lending assistant since 2014, Kasey Golden DeLynn Gower Will Heaps DeLynn Gower was will now work as a private banking officer. In her new role, promoted from assistant vice president to vice president Golden will be responsible for providing guidance to clients in private banking. In her new role, Gower will continue surrounding their current and future financial goals. And to cultivate banking relationships with existing and Stacey Marks, an executive assistant for the last 10 years, has prospective professional, executive and personal clients been promoted to a cash management sales officer. In her for the bank. Will Heaps is a 16-year banker with previous new role, Marks will be responsible for developing business experience as an internal auditor and commercial credit relationships with clients, including positive pay services, analyst. Heaps became the bank’s agriculture banker merchant services, commercial and personal credit card and after learning from colleagues in ServisFirst’s Dothan services and business internet banking. market, he has grown the Huntsville market’s agriculture banking presence to the third largest in the state. Heaps Trustmark Bank congratulates Julie Emhka on her is being promoted to senior vice president and will promotion to vice president and trust officer at the Mobile oversee the operations of the ServisFirst Bank Huntsville main office. Emhka has more than 32 years of banking branches and management of the Huntsville internship experience and is a certified public accountant.

BANKING TRADITIONS The Magazine of the Alabama Bankers Association 39 on six metrics: pretax return on average tangible common EMPLOYEE NEWS equity, net charge-offs as a percentage of average loans, Hope Mehlman, chief governance efficiency ratio, adjusted Texas ratio, net interest margin on officer and assistant corporate secretary a fully taxable equivalent basis and loan growth. More than of Regions Financial Corp., has been 530 companies were eligible for the SNL/S&P Global Market elected to the board of directors of the Intelligence rankings. Council of Institutional Investors (CII). CII is “We are pleased to be recognized among the top rated a nonprofit and nonpartisan association banks in the country by SNL/S&P Global Market Intelligence,” of pension funds, other employee stated David Nast, President and CEO of Progress Bank. “We Hope Mehlman benefit funds and endowments. The have a group of high performing associates who run our association is a diverse community of professionals from company the right way and take great care of our clients,” he various organizations who work collaboratively to learn new added. information, share ideas and educate fellow CII members about effective corporate governance practices while Temkin Group Ranks Regions Bank Among promoting vibrant, transparent and fair capital markets. Top Companies for Customer Experience For the fifth consecutive year, Regions Bank is among the top 10 percent of hundreds of companies listed in the OBITUARIES annual Temkin Experience Ratings. The nationwide rankings are based on customer Melody Godbold passed away on March 22 at the age feedback compiled by Temkin Group, a research firm of 71. She was the vice president, chief financial officer, and that studies consumer views and preferences. Each year, director of the Bank of Pine Hill for approximately 40 years Temkin asks thousands of people about their interactions and was a member of Pine Hill United Methodist Church. with over 300 companies. Those companies are then ranked from highest to lowest based on how positively Dr. Billy Beall, director emeritus of the First Citizens Bank customers viewed their experiences with each business. of Luverne, passed away March 24. Dr. Beall was a much John Owen, head of Enterprise Services and loved and well known dentist in Luverne and was one of the Consumer Banking for Regions, attributed the bank’s founders of First Citizens Bank. consistently high Temkin rankings to Regions’ focus on building deeper relationships with the people and businesses served by the bank. BANK NEWS “In every community we serve, our focus is the same. Progress Bank Ranked as the 64th Top We want to help all of our customers, no matter how Performing Community Bank in the United large or how small, reach their financial goals,” Owen said. States “Our bankers are taking the time to listen to people and Progress Bank announced it was named the 64th top develop customized recommendations to help customers performing bank in the United States with total assets succeed financially. Our technology teams are constantly between $1 billion and $10 billion by SNL/S&P Global Market working to evolve and refine our digital banking services. Intelligence, based on its financial results for the year ended It’s part of our commitment to making banking easier and Dec. 31, 2017. Only three community banks from Alabama more meaningful to our customers, and we are dedicated were included in the $1 billion to $10 billion ranking. to consistently working to improve the customer experience over time.” SNL/S&P Global Market Intelligence’s rankings are based

40 CONVENTION ISSUE 2018 BANKING TRADITIONS Regions Earns Fannie Mae STAR “We are forever grateful to all our service men and Recognition for Assisting Homeowners women for the sacrifices they made in protecting our and Excellence in Mortgage Servicing freedom,” John Bentley, Renasant President of Alabama Regions has recently been awarded the Servicer and Florida Community and Business Banking, said. Total Achievement and Reward™ (STAR™) Performer “Participating in the Totes of Hope drive is a great way we recognition, given by Fannie Mae, for the company’s can show our appreciation and support.” efforts in assisting homeowners and excellence in The kits, which were filled with personal hygiene mortgage servicing during 2017. Regions was recognized items such as: toothpaste, toothbrushes, shaving cream, for overall excellence in General Servicing and Solution baby wipes, dental floss, deodorant, shampoo, along with Delivery, based on industry standards and best practices other items, were packaged and distributed upon the from Fannie Mae. drive’s completion on March 31. “There are between 120,000 to 200,000 homeless Renasant Bank Partners with the veterans in the U.S. Many of these men and women think American Red Cross for Alabama Veterans the world has forgotten about them and it means so Renasant Bank is partnering with the American Red much to them to receive these backpacks,” Alicia Anger, Cross for their Totes of Hope drive, an initiative to provide regional director of communications for the Alabama veterans in VA hospitals and outreach programs across Red Cross, said. “A key part of the Red Cross mission the state of Alabama with personal care and hygiene kits. is to support the military, their families and veterans. During the month of March, supplies for the personal This Totes of Hope campaign partnership will provide care and hygiene kits can be dropped off at participating essential personal care to veterans in need and make a Renasant locations across the state of Alabama. huge impact on fulfilling the Red Cross mission.”

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BANKING TRADITIONS The Magazine of the Alabama Bankers Association 41 River Bank & Trust Named as an Auburn University “Top Tiger” Business River Bank & Trust was honored in early April by Auburn University as one of its Top Tiger companies. This program is presented by Auburn’s Harbert ABA’s Half Century Club honors bankers who have College of Business and Business Alabama magazine. been in the industry for 50 years or longer. Top Tiger companies are those that are among the fastest-growing and are founded, owned or led by Auburn alumni. River Bank & Trust was formed and is led by 1985 Auburn University graduate Jimmy Stubbs, and ranks as one of this year’s “Top Tiger” businesses. Founded in 2006, the bank has grown to be one of the largest community banks in Alabama, based on total assets, with offices in Alexander City, Auburn, Daphne, Gadsden, Montgomery, Millbrook, Opelika, Prattville, and Wetumpka. This is the fourth consecutive year that River Bank & Trust has been recognized. Congratulations to Larry Ezell with The “Being named to the 2018 class of Auburn’s “Top Commercial Bank of Ozark who was recently Tigers” is a proud moment for River Bank and is the honored for his 50 years of service to the banking result of a great team, a supportive board of directors, industry. ABA President and CEO Scott Latham, and our commitment to always putting our clients’ left, presented Ezell with the award. interests and our communities first,” said Stubbs. Stubbs was also selected to serve as a judge for the finals of the Tiger Cage Business Idea Competition to be held during the Entrepreneurship Summit on April 6th in the AU Hotel and Conference Center. The Tiger Cage Business Idea Competition is an annual competition to discover and reward the best early stage products, services or business concepts among Auburn University students.

Southern States Bank Awarded Top 200 Healthiest Banks Congratulations to Linda Taylor, right, with Southern States Bank is honored to announce Marion Bank and Trust Company who was that we are recognized as one of the Top 200 recently honored for 50 years of outstanding service Healthiest Banks for 2018 by DepositAccounts.com. to the banking industry. From left are Conrad Out of all 5,557 FDIC insured banks, DepositAccounts. Taylor, president and CEO of the bank as well as Mrs. com recognizes those who have shown exceptional Taylor’s husband, and Charles Dunkin, chairman of fiduciary responsibility. Southern States Bank ranked the bank’s board of directors. 123 out of the 5,557 banks.

42 CONVENTION ISSUE 2018 BANKING TRADITIONS Every year, DepositAccounts.com evaluates the Southern States Bank. “This recognition could not have been financial health of every FDIC insured bank in the United made possible without the hard work and dedication of our States. Each institution is graded on a number of factors employees, customers and stockholders.” – including capitalization, deposit growth and loan to DepositAccounts.com is the largest and most reserve rations – in order to determine a comprehensive comprehensive online publication in the U.S. dedicated to health score. Southern States Bank received an A+ Rating banking and deposits product information for consumers. and only 11 percent of all Banks receive an A+ Rating. It covers every federally insured bank and credit union and “We are extremely proud to be recognized as one utilizes its patented technology to track approximately of the Top 200 Healthiest Banks in the United States,” said 275,000 consumer deposit rates. Steve Whatley who is chairman, CEO and president of

Advanced BSA Academy Held in Destin, Fla.

A total of 53 people from 41 banks attended our BSA Academy in Destin, Fla. in late April. Led by Dianne Barton and a number of other speakers and regulators, attendees got an in-depth look at the latest topics and issues regarding to the Bank Secrecy Act.

BANKING TRADITIONS The Magazine of the Alabama Bankers Association 43 YOUR POTENTIAL IS OUR PASSION. ICBA creates and promotes an environment where community banks flourish.

The Independent Community Bankers of America is the only national organization that exclusively represents the interests of community banks. With effective advocacy, best-in-class education, and quality products and services, helping your community bank reach its full potential is our passion.

JOIN ICBA TODAY www.icba.org [email protected] 866-843-4222 JUNE 3-6, 2018 MAY 2018 125th Annual Convention 22 Women in Banking Dianne Barton & Trade Show Hyatt Regency Hotel Birmingham - Wynfrey Hotel Fairmont Southampton 23 Today’s Personal Banker: Beyond Universal Banker Southampton, Bermuda Dianne Barton Hyatt Regency Hotel Birmingham - Wynfrey Hotel JULY 12-14,2018 24 What’s Hot and What’s Not: Advanced BSA Update B2L Summer Leadership Dianne Barton Conference Hyatt Regency Hotel Birmingham - Wynfrey Hotel Sandestin Golf & Beach Resort 25 Advanced Deposit and Consumer Destin, Fla. Compliance Update Darlia Fogarty JULY 15-20,2018 Hyatt Regency Hotel Birmingham - Wynfrey Hotel Alabama Banking School AUGUST 2018 University of South Alabama, Mobile 9 New Kids on the Block Part I: Step by Step ~ Decoding Deposits Molly Stull AUGUST 1, 2018 Prattville Alabama Bank Counsel 10 New Kids on the Block Part II: Conference The Right Stuff ~ Lessons in Loans The Grand Hotel, Point Clear Molly Stull Prattville

AUGUST 2-4, 2018 21-22 Reg Z University: Closed End Bill Elliott CEO, Bank Exec & Directors’ Hyatt Regency Hotel Birmingham - Wynfrey Hotel Conference The Grand Hotel, Point Clear 23 Internal Audit: Transfers, Deposits, Operations, Trends & Fraud Mike Thomas and Matt Davis SEPTEMBER 13-14, 2018 Prattville

75th Annual Continuing Education 24 Call Report Preparation: Trust Seminar Purpose, Filing and Forms Vestavia Country Club, Birmingham Bill Curtis and Nicole Cunningham Prattville SEPTEMBER 23-26, 2018 ABA D.C. Fly-In For more information on any of ABA’s live seminars, please contact Debbie Pharr at 334-386-5735 or Mayflower Hotel, Washington, D.C. email [email protected].

BANKING TRADITIONS The Magazine of the Alabama Bankers Association 45 REGISTER TODAY! For more information or to register for a seminar, visit www.alabamabankers.com/edu. Most webinars are scheduled at 10 a.m. and 1:30 p.m. Central Time unless otherwise indicated. Visit www.alabamabankers.com/edu to confirm times. PLEASE NOTE: ABA has changed its webinar provider to Total Training Solutions/Bank Webinars. In addition to live and on-demand webinar access, the company also offers webinars on CD-ROM. Questions about this new provider? Contact Debbie Pharr at (334) 386-5735.

20 BSA Series: 10 Examination Hot Spots (1:30 PM) MAY 2018 21 Overdrafts (1:30 PM) 15 Introduction to ACH...The Basics (10 AM) 22 Bank Call Report Preparation for Beginners - Part 4 (10 AM) 16 Flood Insurance (10 AM) 25 Residential Construction Lending (1:30 PM) 17 Escrows (10 AM) 26 Basic Cash Flow Analysis (10 AM) 17 Critical Issues on Certificates of Deposit (CDs) (1:30 PM) 26 Commercial Real Estate Lending (1:30 PM) 18 Call Reports: RC-C Loan Coding and Related 28 Safe Deposit Audit (10 AM) RC-R Reporting (10 AM) 29 Bank Call Report Preparation for Beginners - Part 5 (10 AM) 21 For Bank Managers: How to Hire Bankers Who Will Sell (1:30 PM) 22 Possible Topic: Common Pitfalls of ARM Disclosures (1:30 PM) 24 New BSA Officer Training (1:30 PM) JULY 2018 29 FDIC INTREx Work Program (1:30 PM) 9 Best-Ever Compliance Checklists for Consumer Loans (1:30 PM) 30 Information and Cyber Security (10 AM) 10 Handling Loan Applications – What can go wrong? (10 AM) 11 BSA for Lenders (10 AM) JUNE 2018 11 FDIC INTREx Work Program (1:30 PM) 1 Bank Call Report Preparation for Beginners - Part 1 (10 AM) 12 ATM Cashout Scams (10 AM) 4 Using Personal Tax Returns for Global Cashflow: 16 Possible Topic: Providing Accurate and Timely What’s Cashflow and What Isn’t (1:30 PM) Adverse Action Notices (1:30 PM) 5 Call Center Representative Training (10 AM) 17 Dealing with Subpoenas... (10 AM) 5 TRID (1:30 PM) 17 Increasing Fee Income (1:30 PM) 6 Protecting Your Salaried-Exempt Status (10 AM) 18 Customer Due Diligence with Beneficial Owners (10 AM) 6 Basics of Real Estate Loan Documentation (1:30 PM) 18 Advanced Commercial Loan Doc (1:30 PM) 7 25 Baseline Controls Banks Struggle to Implement (10 AM) 19 HMDA (10 AM) 7 Signature Card Danger Zones (1:30 PM) 19 Incident Response and Forensics (1:30 PM) 8 Bank Call Report Preparation for Beginners - Part 2 (10 AM) 23 Information and Cyber Security (1:30 PM) 11 CRA (1:30 PM) 24 ACH Origination for Lenders and Cash Management (10 AM) 12 Onboarding your New Hire (1:30 PM) 24 Developing a Strong Enterprise-Wide Risk Assessment 13 Excel Pivot Tables 101 (1:30 PM) for your ERM Program (1:30 PM) 14 Limited Liability Companies: Do’s and Don’ts (1:30 PM) 26 Audit Report Writing (10 AM) 15 Bank Call Report Preparation for Beginners - Part 3 (10 AM) 27 Lending to Churches and Other Religious Institutions (10 AM) 18 Compliance Perspectives (1:30 PM) 30 Possible Topic: Untangling Web of Fee Disclosures (1:30 PM) 19 Notary Public (10 AM) 31 CRE Appraisals: Appraisal Components, Approaches 19 Possible Topic: RESPA - Those Pesky Section 8 Violations (1:30 PM) to Values & Cap Rates (1 PM)

For more information about our telephone seminars and webinars, please contact Debbie Pharr by calling (334) 386-5735 or emailing [email protected].

46 CONVENTION ISSUE 2018 BANKING TRADITIONS

445 Dexter Avenue • Suite 10025 Montgomery, Alabama 36104-3775 334-244-9456 I 334-834-1890