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THE MAGAZINE OF THE ALABAMA BANKERS ASSOCIATION, INC. CONTENTS FEATURES 10 Is Liquidity Stress Testing Stressing You Out? of playing defense by reducing staff or cutting services, start playing It shouldn’t come to much of a surprise that liquidity risk management offense by finding savings in your vendor contract negotiations. Not is a major focus for all the regulatory agencies. Since the financial crisis only will you likely find additional funds, you can improve the quality of 2008, the economy has improved and banks have steadily added of the service you receive — and you can do so without changing loans to their balance sheets. As a result of the increase in loan demand, vendors. overall liquidity levels have decreased as more liquidity is now tied up in loan portfolios. 32 PIN Adds Level of Security in Payment Transactions 14 InsurTech: What Bankers Need to Know When authenticating transactions, choosing between one It should come as no surprise that banks and insurance companies are in authentication method or another isn’t a good strategy. A better the midst of a transformation from the traditional systems we’ve come approach is to leverage layered authentication, allowing the PIN to to rely on for many decades to next generation technology. While banks serve as the strongest option because the issuer is authenticating the harness the power of FinTech, insurers too are quickly embracing its consumer’s identity. companion, InsurTech to replace their own legacy systems and improve results. Insurers hold enormous amounts of high quality information 34 Education Spotlight and advanced processing technologies that assist in almost every A total of 23 people from 18 banks traveled to the 4-H Center in insurance task. Columbiana for our BSA/AML Boot Camp led by Dianne Barton.

18 Recap of the 2019 Bank Operations & Management Summit The 2019 Bank Operations and Management Summit held in February brought together bankers in the areas of marketing and public relations, human resources, information technology, operations and DEPARTMENTS management. More than 180 people from 40 banks registered for this 6 From the President’s Desk annual event. Speakers from all over the country fly in to train Alabama Relief from Rising Health Care Costs bankers on the latest trends and developments in the industry. 8 Chairman’s Message Association Sets Legislative Priorities for 2019 Session 20 Time to Focus: The 2019 Regular Session That’s the gap of time between the close of the 2018 Regular Session of 9 Thank You BankPAC Supporters the – March 29, 2018 – and the start of the 2019 Many thanks to the banks who have responded to our call for session – March 5. And while the chambers of the State House have commitments to our state political action committee! been pretty quiet during this time frame, it’s been anything but silent in 36 ABA NewsLine Banking News from and for Alabama the worlds of politics and law. 45 ABA Calendar of Events Dates and Locations 28 How Negotiating with Vendors Can be Easier than You Think 45 ABA Live Seminars Dates and Topics Many community banks continue to struggle with how to improve their ABA Telephone & Webinars Dates and Topics bottom line without taking dramatic cost-cutting measures. Instead 46

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

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

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, President, ABA Services / Inc.. Opinions expressed in this magazine do not necessarily reflect the policies of the Alabama Bankers Association, Inc.. Senior Vice President, Alabama Bankers Association ([email protected]) • Lisa Garrett, Vice President, Accounting and ADVERTISING: Inquiries should be directed to Shelley Hildebrand at the Alabama Bankers Association, Inc.. Rates will Information Systems ([email protected]) • Shelley Hildebrand, Vice President, Marketing and Business Development be furnished on request. The Alabama Bankers Association, Inc. reserves the right to omit any advertising or editorial copy deemed ([email protected]) • Jason Isbell, Vice President, Legal and Governmental Affairs ([email protected]) unsuitable for publication. Publication herein does not necessarily Lisa Dunn, Director of Conference Services ([email protected]) • Debbie Pharr, Director of Education imply endorsement of any product of service offered. POSTMASTER: Send address changes to Banking Traditions, 445 ([email protected]) • Tabitha Abele, Executive Assistant, Banking School Coordinator ([email protected]) Dexter Avenue, Suite 10025, Montgomery, Alabama 36104-3775. In November 2012, The Alabama Bankers Beth Oliver, Sales and Recruitment Coordinator ([email protected]) • Ashley Thomas, Bankers 2 Leaders Coordinator Association and the Community Bankers Association merged to form the Alabama ([email protected]) • Peyton Tyrone, Administrative Assistant ([email protected]) Bankers Association, Inc. Scott Miller, Executive Director, Alabama Multifamily Loan Consortium ([email protected]) 4 LEGISLATIVE ISSUE 2019 BANKING TRADITIONS Correspondent Banking Fed Funds Management Participation Loans Servis1st Access Online Holding Company Loans Settlement Services Correspondent Lending De Novo & Escrow Services Agent Credit Card Issuance

Rodney E. Rushing Bill Street Andrew Barrett Executive Vice President Senior Vice President - AL, LA, MS Vice President - TN, KY, VA 205.423.2717 205.423.2718 615.498.8079 [email protected] [email protected] [email protected]

Bill Dacko Tim Finney Karen Grahn Senior Vice President- FL Vice President - GA, SC SVP Credit Card Division Manager 407.496.7669 478.952.6497 205.949.0330 [email protected] [email protected] [email protected]

J. David Jordan Steve Shelton Kimble Vardaman Chief Corrrespondent Operations Officer Senior Vice President - AR, MO, TN Correspondent Chief Credit Officer 205.423.2719 901.634.1608 205.578.4683 [email protected] [email protected] [email protected]

14SFB0308 1/14/2014 - 1:35pm

COATED 78c 58m

205.949.0302 www.ser Member FDIC Equal H Member FDIC | Equal Housing Lender | www.servisfirstbank.com By Scott Latham, Alabama Bankers Association President & CEO Relief from Rising Health Care Costs Among the costliest expenses for banks is the valuable employee benefit of health insurance coverage. Practically every bank in our membership, at time or another, has commented on the continued rising costs, the effect of those on the banks’ bottom line, and whether the ABA can find a way for banks to come together to help ease the growing costs in one collective effort.

While association health plans (AHP), are nothing Lanier & Co. to investigate the feasibility of an new, federal regulations adopted in conjunction association health insurance plan for member with the Affordable Care Act made AHPs more banks. Following much research and formal interest difficult and less efficient, leading many trade groups from more than 90 of our member banks, requests to discontinue their plan. But an Executive Order for proposals were made to multiple insurers “Promoting Healthcare Choice and Competition which resulted in a several proposals with the Across the United States” issued by President Trump most attractive being from Blue Cross Blue Shield in October 2017 led directly to the adoption of of Alabama. At press time, we were in the midst of new Department of Labor rules that are specifically a series of meetings held throughout the state to designed to expand access to AHPs for existing discuss the details of the plan and provide quotes to associations. interested banks.

Under the new rules, an AHP can be an attractive We are optimistic that our AHP is a viable option insurance product because many of the prior and one that can provide significant savings to our geographic, ownership, and “commonality” bank members. We will continue to update the restrictions were lifted, thus allowing a trade membership through our electronic newsletters as association such as the ABA, for instance, to have its we continue with this endeavor. entire membership base treated as one large risk pool for insurance purposes. With large group purchasing With the Alabama Legislature in session, and with the power, price flexibility options, rate stabilization first quarter of 2019 soon complete, the year is sure measures, and consumer protection safeguards to be busy and productive. If you have not already becoming part of the new framework, the number done so, I encourage you to make plans to attend our of trade groups that offer AHPs to their members is 2019 Annual Convention & Trade Show which is set likely to increase significantly over the short term. for June 9-12 at The Broadmoor in Colorado Springs, Colo. We held this annual event at The Broadmoor in During the summer of 2018, we engaged J. Smith 2013 are excited to return.

6 LEGISLATIVE ISSUE 2019 BANKING TRADITIONS BIRTHDAY SURPRISES ARE FUN. FINANCIAL REGULATORY SURPRISES? NOT SO MUCH.

Our 230+ attorneys across seven cities help heavily-regulated companies predictably move forward in less-than-predictable regulatory environments.

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888-254-2466 www.balch.com Alabama Florida Georgia Mississippi Washington, DC

No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers. By Jerry Powell, Alabama Bankers Association Chairman

Association Sets Legislative Priorities for 2019 Session

With a successful 2018 behind us, we look forward to the challenges ahead in 2019 and beyond. The mid-term elections returned us to legislative gridlock at the national level, but the regulatory environment remains encouraging with the Trump Administration appointees at the FDIC, OCC, CFPB and Federal Reserve Bank taking control of the regulatory agenda.

Our opportunities as an industry to make met recently to review the association’s legislative structural change that will benefit our banks and priorities for 2019 and consistent with the above our customers comes with regulatory proposals statement discussed a possible legislative fix to a like CRA and BSA reform, the small dollar lending problematic court decision that impairs our ability initiative, brokered-deposit reform, capital relief to make future advance mortgage loans. Jason and faster payments. In order to make a difference and Scott will be seeking legislative sponsors and in these areas we must take the time to comment trade association support for this important bill. specifically on these regulatory proposals.Watch for more on this issue. Your leadership and Providing the rule writers with detailed fact-based advocacy with your local legislators and business analysis of the proposal’s impact on our institutions community may be needed to get this bill passed. and customers is the most important thing we can do to effect change. In focusing on legislative and regulatory matters I do not intend to ignore the other great work Educating our legislators in Washington and of the association. Our strong educational Montgomery on the issues that are important offerings, leadership development programs and to our members is a primary role of the Alabama conferences are second to none. I encourage you Bankers Association. Scott Latham and Jason to take advantage of all the association offers to Isbell cultivate strong working relationships with develop yourself and your team to successfully members of the Alabama House and Senate to compete in 2019 and beyond. The strength of provide insight and analysis on legislation affecting Alabama banks is the sound professional leadership banks and our customers. We as an industry rarely of our institutions. Your leadership is demonstrated have a legislative agenda, but when we do propose in many ways, including your support for BankPAC or support specific pieces of legislation it is only at the guideline level. If you haven’t made your after consulting with a large cross-section of our contribution to BankPAC for 2019, I encourage you members, other trade associations and members to do so. of the Legislature. The Legal and Governmental Affairs Advisory Committee of the association See you at the convention in Colorado Springs.

8 LEGISLATIVE ISSUE 2019 BANKING TRADITIONS Many thanks to those who have responded to our call for commitments to our state political action committee, BankPAC. January 1, 2018 to December 31, 2018 ★ Southern Bank Company ...... Mr. Gates Little ★ Southern Independent Bank ...... Mr. Micah Garner CAPITOL CONTRIBUTORS ★ Southern States Bank ...... Mr. Stephen Whatley ★ Bryant Bank ...... Mr. Claude Edwards ★ SouthPoint Bank ...... Mr. Stephen Smith ★ Cadence Bank ...... Mr. Jerry Powell ★ State Bank & Trust ...... Ms. Dana Peoples ★ Citizens Bank & Trust ...... Mr. Charlie Williams ★ Sweet Water State Bank ...... Mr. Stratton Lewis ★ Citizens Bank of Winfield ...... Mr. Russell Carothers ★ Traditions Bank ...... Mr. Tim Compton ★ First Bank ...... Mr. Jared Kirby ★ Trinity Bank ...... Mr. Robbin Thompson ★ First Bank of Alabama ...... Mr. Chad Jones ★ First Citizens Bank ...... Mr. William Petrey ★ First Financial Bank ...... Mr. B.K. Goodwin PAC PATRONS ★ ★ First National Bankers Bank ...... Mr. Charles Morris AmeriFirst Bank ...... Mr. Robert Ramsey ★ ★ First Southern Bank ...... Mr. Dennis Morgan Ameris Bank ...... Mr. Mark O’Mary ★ ★ Peoples Independent Bank ...... Mr. Royce Ogle AuburnBank ...... Mr. Robert Dumas ★ ★ River Bank & Trust ...... Mr. Jimmy Stubbs Bank Independent ...... Mr. Macke Mauldin ★ ★ Traders & Farmers Bank ...... Mr. Will Walker Bank of Moundville ...... Mr. Howell Poole ★ ★ Troy Bank and Trust Company ...... Mr. Jeff Kervin CB&S Bank ...... Mr. Mike Ross ★ ★ Vantage Bank ...... Mr. Lowell Galloway CCB Community Bank ...... Mr. Thomas Lane ★ ★ West Alabama Bank & Trust ...... Mr. William Finney Citizens Bank ...... Mr. Tom Gulledge ★ Citizens State Bank ...... Mr. Anthony Burnett ★ Community Spirit Bank ...... Mr. Brad Bolton STATESMAN SUPPORTERS ★ Eva Bank ...... Mr. Dewayne Morris ★ Bank of Evergreen ...... Mr. Tim Dantz ★ Exchange Bank of Alabama ...... Mr. Ricky Ray ★ Bank of Walker County ...... Mr. Mark Wilson ★ First Community Bank of Central Alabama ...... Mr. Michael Morgan ★ Bank of York ...... Mr. Jimmy Collins ★ First Exchange Bank ...... Mr. Steve Smith ★ Brantley Bank & Trust ...... Mr. Travis Colquett ★ First Fidelity Bank ...... Mr. Stephen Eberhart ★ 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 State Bank of the South ...... Mr. John Boyett ★ Citizens Trust Bank ...... Mr. Jason Eppenger ★ First U. S. Bank ...... Mr. James House ★ Commercial Bank of Ozark ...... Mr. Charles Harper ★ FNB Bank ...... Mr. Steve Rownd ★ Community Bank & Trust ...... Mr. Dave Bryant ★ FNB of Central Alabama ...... Mr. Heyward Gould ★ Community Neighbor Bank ...... Mr. William Johnson ★ Liberty Bank ...... Mr. Chris Bailey ★ Escambia County Bank ...... Mr. James Jones ★ Metro Bank ...... Mr. Jason Dorough ★ Farmers & Merchants Bank ...... Mr. Lin Latta ★ MidSouth Bank ...... Mr. Davis Malone ★ Farmers & Merchants Bank - Lafayette ...... Mr. Stanley Tucker ★ North Alabama Bank ...... Mr. Terry West ★ First Bank of Boaz ...... Mr. Ricky Ray ★ Peoples Bank of Alabama ...... Mr. Robin Cummings ★ First Bank of Linden ...... Ms. Ann Yelverton ★ Peoples Bank of Red Level ...... Mr. Phillip Murphy ★ First Cahawba Bank ...... Mr. Richard Walters ★ Peoples Southern Bank ...... Mr. Richard Moore, Jr. ★ First National Bank of Hartford ...... Mr. Jack Hughes ★ Phenix-Girard Bank ...... Mr. Menza Dudley ★ FirstState Bank ...... Mr. Steve Foster ★ Progress Bank & Trust ...... Mr. David Nast ★ Friend Bank ...... Ms. Hope Johnson ★ Regions Financial Corporation ...... Mr. John Turner ★ HNB First ...... Mr. Dwight Gamble ★ Renasant Bank ...... Mr. John Bentley ★ Marion Bank & Trust Co...... Mr. Conrad Taylor ★ Robertson Banking Company ...... Mr. Gary Holeman ★ Merchants Bank ...... Mr. Joe Bedwell ★ ServisFirst ...... Mr. Thomas Broughton, III ★ Millenial Bank ...... Mr. Matt Rockett ★ 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 Is Liquidity Stress Testing Stressing You Out? by Dale Sheller

10 LEGISLATIVE ISSUE 2019 BANKING TRADITIONS It shouldn’t come as much of a surprise that liquidity risk management is a major focus for all the regulatory agencies. Since the financial crisis of 2008, the economy has improved and banks have steadily added loans to their balance sheets. As a result of the increase in loan demand, overall liquidity levels have decreased as more liquidity is now tied up in loan portfolios. Additionally, banks need to consider how the vast amount of surge deposits in the industry might behave as the Fed continues to raise rates and deposit competition heats up. Is it possible those depositors will leave in search of higher rates? Or will they leave the banking system altogether?

In April 2010, the Federal Financial Institutions Second, take a look at some ways to conduct liquidity Examination Council (FFIEC) issued a policy stress testing. Here is where you need to start getting statement to provide for sound practices for managing creative. A brainstorming starting point is to ask, funding and strengthening liquidity risk management “What would keep our ALCO up at night from a practices. This guidance is now eight years old; liquidity risk perspective?” Liquidity stress testing however, with the renewed focus on liquidity risk should address both institution-specific as well as management, some banks are playing catch-up to market wide events. You should start with looking at ensure they are in compliance. For years, the concept the bank’s balance sheet and its potential seasonality. of liquidity stress testing seemed irrelevant, as Some institutions experience more seasonality than most banks were flush with deposits, cash liquidity, others, and seasonality can come from both sides of and tepid loan demand. Fast forward to 2019 and the balance sheet. However, there is one area that will stress testing our liquidity levels seems much more affect any institution: the loss of customer deposits. plausible. Modeling a scenario where you lose varying levels of deposits is a must. The question becomes, “How do I stress test my liquidity?” First, take a look into the regulatory guidance. Stress testing a loss in deposits is just one of many The aforementioned 2010 guidance states the following: scenarios to consider when running a liquidity “Institutions should conduct stress tests regularly for a stress test. Once again, regulators want to see both variety of institution-specific and market wide events institution-specific as well as market wide stress across multiple time horizons. The magnitude and events. Examples of institution-specific events may frequency of stress testing should be commensurate with include asset quality concerns, reputation risk, rapid the complexity of the financial institution and the level of growth, and regulatory restrictions. Market wide or its risk exposures.” There are a few more sentences after systemic events may include capital market disruption, those two, but all in all, the guidance doesn’t give us a whole lot of…well, guidance. Continued page 13

BANKING TRADITIONS The Magazine of the Alabama Bankers Association 11 Together we can do Anything.

T a x IT

Co mpl ian ce dit u A

CPA firms all face the same audit requirements and standards. Our methods of providing audit, tax and compliance services do more for our clients than just meet the requirements. For over 100 years our goal has been to build relationships through commitment, quality and dedication to our clients and to the accounting profession.

Bill Curtis, CPA Nicole Cunningham, CPA 2000 Southbridge Pkwy | Suite 501 Birmingham, AL 35209 Certified Public Accountants (888) 277-0020 | mjcpa.com Liquidity Stress Testing the shortfall in liquidity. Ensure the results of your Continued from page 11 liquidity stress tests are discussed by the asset-liability committee and the review is documented in the economic conditions, uncertainty in industry, and minutes. Lastly, don’t forget about your contingency changes in interest rates. A scenario that needs to be funding plan. The results of your stress testing should considered is one where the bank has capital issues also play a key role in shaping the institution’s and they become “less than well-capitalized” per the contingency planning. Therefore, stress testing Prompt Corrective Action regulation. Falling to the and contingency planning are closely intertwined. “adequately capitalized” rating limits a bank’s access Remember to stress your liquidity and not yourself! to various contingent funding sources. Restrictions on brokered deposits and paying high rates on deposits now comes into play. Additionally, creditors such as Dale Sheller is vice president in the the Federal Home Loan Bank, Federal Reserve, or Financial Strategies Group at The correspondent banks will demand more collateral, Baker Group. He joined the firm reduce availability, or terminate the borrowing line. in 2015 after spending six years as a bank examiner with the Federal Once you have your stress scenarios well thought out, Deposit Insurance Corporation. you need to run those scenarios through a pro forma He works with clients on interest cash flow analysis and analyze whether or not your rate risk management, liquidity risk current liquidity levels can remedy the stress scenario. management, and regulatory issues. If not, you then need to look towards our contingent liquidity sources and see if they are sufficient to fund The Baker Group has been endorsed since 2010. CSI KNOWS TALK IS CHEAP.

When someone tells you they’re going to do something, they should do it. Your customers expect that of you, and you expect that of your technology partners.

When you work with CSI, you don’t get a technology provider that talks a big game—you get a partner that truly listens and always acts.

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ALBKR-LAYOUT-1118.indd 1 11/2/18 11:19 AM BANKING TRADITIONS The Magazine of the Alabama Bankers Association 13 InsurTech: What Bankers Need to Know

by Sam Stern

14 LEGISLATIVE ISSUE 2019 BANKING TRADITIONS It should come as no surprise that banks risk assessment. These tools are often provided by startup IT service providers (frequently backed by and insurance companies are in the midst investors) who are focused on transforming the of a transformation from the traditional insurance industry’s data aggregation, distribution, and competitive practices. Currently there are very systems we’ve come to rely on for many little rules or legal provisions that specifically decades to next generation technology. address InsurTech. While banks harness the power of FinTech, InsurTech is a path to operational efficiency but it is also a competitive weapon against more ponderous insurers too are quickly embracing its computer software. Almost every single insurance companion, InsurTech to replace their company client in our portfolio is in the midst of, or has just completed, major upgrades to its billing, own legacy systems and improve results. claims, and underwriting platforms. One of the main Insurers hold enormous amounts of reasons we hear for these changes is to compete against the behemoth property/casualty and personal high quality information and advanced lines carriers as well as improve the liability side of processing technologies that assist in the balance sheet. almost every insurance task. Whether in house or through specialized digital service firms insurers are investing in: Actuaries are being replaced by data scientists • Modern balance sheet/ledger system that meets and routine tasks like manual entry and balancing current regulatory standards ledgers can now be performed by ‘bots’ at a fraction • Blockchain systems to improve economies of of the cost of a natural person employee. InsurTech scale and transaction integrity involves considerable expenditures and in 2017 • Modern Human Resources (HR) systems the global spend in the U.S. is predicted to reach • Custom underwriting systems almost $3 billion. Life & Health InsurTech has • Custom premium finance, payment, and attracted more than $5 billion in the last five years collection system alone. It is estimated that there are more than 1,000 • Big Data to reach price perfection InsurTech companies in existence today. In fact, • Claims payment, processing, and analysis 2018 was a pivotal year because insurers that are • Policyholder management publicly committing to InsurTech are looking for • Bespoke insurance products their investments in disruption, robotics & artificial intelligence “innovation studios” and strategic Banks as insurance buyers will be affected most partnerships to finally pay off in the execution stage. likely in the form of a friendlier user experience that would include: What is InsurTech and how might it affect you? • Customer Portals where you can look up real There is not yet one single definition of InsurTech. time policy, claims, and exposure information The phrase only emerged a few years ago. It is a • Mobile Applications and ‘click for cover’ broad term that refers to the quest for disruptive insurance policies technology such as artificial intelligence and big data to provide insurance companies new tools for Continued page 17

BANKING TRADITIONS The Magazine of the Alabama Bankers Association 15 because your home is our home

BryantBank.com | 1.866.912.0507

Correspondent Ad_v2.indd 1 11/29/2018 1:43:30 PM INSURTECH: WHAT BANKERS NEED TO KNOW to understand for the average farmer and are paid out continued from page 15 through mobile phone applications. For southeastern banks, small agricultural loans could incorporate • Motor vehicle and property information tracking this type of practice to generate revenue and bolster with photographic databases collateral. • Artificial Intelligence systems that assist customers without human interaction Insurance brokerages must also adopt and leverage • Elimination of paperwork InsurTech to deliver a better customer experience. By now, nearly every broker has moved over to a There is more to uncover. We believe that banks and paperless document system. In addition, some firms insurers can create synergistic model that sees the have tools that take incredibly deep dives into the combined Insurer>Bank>IT Broker model improve data on their books of business. One way this helps most aspects of the bank’s services. Consider the is that it opens the door for meaningful conversations potential gains managing a large mortgage impairment with insurers on behalf of clients, particularly in insurance schedule or review of an applicant’s the “program” (insurance policies covering a large insurance policies and creditworthiness as part of the and homogenous risk pool) space. Rather than trust loan underwriting process (particularly when lending the insurer for loss and exposure information, a money on personal security). Right now, InsurTech broker armed with accurate data “scraped” from firms are incorporating all kinds of health data from internal, public, or paid for sources is able to verify wearables like a Fitbit or iWatch. The data is in real assumptions and leverage its information into stronger time communication with the insurers who create terms and conditions. Another area of improvement more precise health scores which generate more is in the ability for agents to have mobile access to its accurate risk pricing. An easy example of this is the broker management systems. Unfortunately brokers avid runner that qualifies for a bigger life insurance who can use these modern techniques are still in the policy. Imagine incorporating InsurTech into the minority because the technology is still relatively cost bank’s Trust department or its life, credit life, annuity, prohibitive. and disability products sales process. Many banks provide asset management, management consulting, If the banking and insurance industry gets this right, and data processing services too that can pivot off of meaning proper and secure use of actuarial and related advanced insurance technologies. data, then the traditional model of insurance buying will evolve into a purer version of risk transfer that Some of our clients use publicly available geo- facilitates, rather than often complicates, commercial mapping software to instantly assess damage because your home is our home transactions. Given the close knit nature of banks after major weather events. A bank uses the same and insurance companies it’s only natural to watch information to assess damage or exposure to its InsurTech grow alongside FinTech. It is our belief commercial and residential loan portfolios. Another these new technologies will not disrupt but reinforce recent and interesting case study involves African the value community banking brings to our region for farmers who can purchase a very inexpensive ($20) generations to come. “rain” policy that pays if there is no precipitation within a prescribed period of time (e.g. one week). These policies use objective third party weather Sam Stern is senior vice president of J.Smith Lanier, services to trigger payouts thereby eliminating claim a Marsh and McLennan Agency. J. Smith Lanier has handling delay and insurer bias. The policies are easy been endorsed since 2014.

BANKING TRADITIONS The Magazine of the Alabama Bankers Association 17 BryantBank.com | 1.866.912.0507

Correspondent Ad_v2.indd 1 11/29/2018 1:43:30 PM The 2019 Bank Operations and Management Summit held in February brought together bankers in the areas of marketing and public relations, human resources, information technology, operations and management. More than 180 people from 40 banks registered for this annual event. Speakers from all over the country fly in to train Alabama bankers on the latest trends and developments in the industry.

General Session speakers included Joe Hileman and TerrY Choate who discussed understanDing incidents of violence in the workplace. During this session attendees learned what to do when traditional security precautions — alarm systems, locks, policy/procedures — fail. Our other general session speaker, Eric Rheam, discussed how to become a person of influence and why that is an important concept.

Several activities held in the trade show area gave attendees the opportunity to visit the vendors present. And, during our Trade Show “Speed Dating” Showcase attendees met one-on-one with vendors to hear about their products and services.

18 LEGISLATIVE ISSUE 2019 BANKING TRADITIONS THANK YOU SPONSORS!

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BANKING TRADITIONS The Magazine of the Alabama Bankers Association 19 20 LEGISLATIVE ISSUE 2019 BANKING TRADITIONS TIME TO FOCUS: The 2019 Regular Session

by Jason Isbell Three hundred and forty days. That’s the gap of time between the close of the 2018 Regular Session of the Alabama Legislature – March 29, 2018 – and the start of the 2019 session – March 5. And while the chambers of the State House have been pretty quiet during this time frame, it’s been anything but silent in the worlds of politics and law.

Consider this: 340 days ago… During this same 340-day time frame, the Alabama Supreme Court issued a ruling that could have a • You couldn’t read a sentence about Gov. Kay devastating impact on the entire financial services Ivey and Attorney General Steve Marshall without industry – banks, credit unions, title companies, etc. being reminded that they had been appointed to – leaving industry advocates searching for a lasting those posts in 2017. Now? After decisive victories solution. last November, Ivey and Marshall hold those top spots until at least 2023. So, as the election season of 2018 gives way to the • Alabama did not even have a lieutenant governor. legislative session of 2019, it’s time to sift through the Now? Former state representative numerous issues on the minds of legislative leaders, as ascends to the office after garnering the most votes well as the association, and lay out the issues, and the of any candidate on the November 2018 ballot. people, of primary importance. • Nearly 40 members of the 140-seat Alabama Legislature were doing something other than It’s time to focus. holding the legislative seats they now hold. Continued page 23

BANKING TRADITIONS The Magazine of the Alabama Bankers Association 21 Going Above and Beyond for Our Clients

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No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers. ATTORNEY ADVERTISING. Contact: John D. Watson, Esq., 205.521.8436, [email protected], Bradley Arant Boult Cummings LLP, 1819 Fifth Avenue North, Birmingham, AL 35203. © 2019 TIME TO FOCUS on the amount of the potential tax increase, whether continued from page 21 the rate would be automatically adjusted going forward, and how new revenue would be divided between the Alabama Department of Transportation, FOCUS ON cities, and counties. To be sure, raising gas taxes Legislative Leadership’s for the first time since 1993 will be a major lift and is by no means a sure thing. But the availability of Priorities federal matching funds and an increase in the public’s awareness of faulty roads and bridges across the state The 2019 Regular Session of the Alabama Legislature seem to be shifting everyone’s thoughts from “no is the first session of the current four-year term. To chance” to “no doubt.” put it mildly, a “first session” is a different animal altogether, as legislators feel not only emboldened Prisons from their recent electoral victory but also comforted Alabama’s correctional system is always a topic in having four years to atone for any mistakes made of discussion, but 2019 looks to be the year where at the beginning of a term. In fact, some of the most multiple pieces of this puzzle come to the forefront of controversial votes of a legislator’s career are likely legislative debate. Gov. Ivey blinked first, announcing taken during a first session. Need examples? Consider in mid-February that the state would spend at least that the two largest tax increase proposals in recent $900 million to build three new men’s prisons. But memory – Gov. Bob Riley’s $1. 2 billion “Amendment major issues are still on the table, including a funding One” plan from 2003 and Gov. Robert Bentley’s request to hire 500 new prison guards and a demand $541 million tax increase proposal from 2015 – were from U.S. District Judge Myron Thompson that the introduced in the first regular session after the 2002 state quickly address mental health issues throughout and 2014 elections. the criminal justice system. So, what’s in store for this year’s session, the first Ethics Reform since the 2018 elections? How will newly-elected A major debate ensued in 2018 over whether certain officials take ideas from last summer’s stump speeches economic development professionals should be forced and turn them into this summer’s legislative victories? to comply with state ethics laws that generally apply And with so many different concepts on the board, to lobbyists. In particular, the focus was aimed at a what will legislators focus on in Montgomery? group of professionals known as “site selectors” who Gas Tax oftentimes work on behalf of unnamed corporations to secure tax abatements and other incentives designed Everyone, from Gov. Kay Ivey down to rank-and- to lure new industries to specific areas. The industry file legislators, knows which issue will dominate worried that economic development opportunities discussions in the State House during the next few would dry up if site selectors had to publicly reveal months: an effort to raise gasoline taxes. And though their client lists. On the other hand, since public funds Republican lawmakers are traditionally tax-averse, were involved in the incentive package, some thought the discussion in the House of Representatives and that transparency should be mandatory rather than Senate – chambers controlled by Republican super- voluntary. As a compromise, legislators agreed to majorities – has shifted from if the concept of a gas tax allow site selectors and other economic development increase has enough support to which of the competing professionals to remain exempt from the client plans have the most support. Legislative leaders and impacted interest groups seem to be trying to decide Continued page 24

BANKING TRADITIONS The Magazine of the Alabama Bankers Association 23 TIME TO FOCUS perpetually cash-strapped State General Fund. There continued from page 23 is also the added debate over who actually has the power to make the expansion decision: the Legislature disclosure requirements imposed on lobbyists. But the or the governor. Either way, calls for expansion are law they passed last year is set to expire on March 31. not likely to slow down anytime soon, especially as In other words, if this issue isn’t cleared up during the the struggle continues for Alabama’s rural healthcare first three weeks of the 2019 session, look for a major infrastructure. ethics fight to break out in the State House. Lottery and Gaming FOCUS ON The debate over legalizing casino gaming or a state- sponsored lottery has raged in Alabama for decades. Association’s Legislative But as long as gaming is available somewhere in Priorities or near Alabama, proponents will wonder why it’s not available everywhere in the Yellowhammer Some legislative issues will be on the association’s State. And the pressure on legislators is mounting. agenda every single year: thwarting credit unions’ Consider this: Alabama is now only one of six states attempts to become public depositories, protecting with no form of lottery; casinos owned by Indian State Banking Department funds from being diverted tribes, which generate millions in profit each year, to other public agencies, and ensuring that the banking pay no taxes to the state; and, a recent U. S. Supreme industry is not disproportionately impacted by any Court ruling paved the way for states to adopt laws changes to tax laws, for example. Check, check, and legalizing sports betting. There are still major pockets check. of moral opposition to all forms of gambling. But recent opinion polls indicate that a large number of And we are already aware of several industry issues Alabamians, including Republicans, favor taking a that are likely to arise during this session. For chance on the idea, especially when faced with the instance, the Department of Revenue is working choice of generating new tax revenue from gaming to make some technical changes to the Financial operations versus something like an increase in sales Institution Excise Tax statutes, an Alabama Law or property taxes. The issue is sure to be debated this Institute project seeks to alter several statutes related year, but how far it goes is anyone’s guess. to the redemption of property, and licensed real estate appraisers are hoping a change in the law will allow Medicaid Expansion them to perform evaluations when appraisals aren’t Alabama is one of 14 states that did not expand its required. Medicaid program in the wake of the Affordable Care Act. Though several groups have advocated But thanks to a ruling last September from the for expansion since 2010, the Alabama Hospital Alabama Supreme Court, the association’s primary Association has made a concerted effort over the legislative focus in 2019 is crystal clear: protect future past few months to link the lack of expansion with advance mortgages. the closure of hospital facilities. In fact, AHA reports that 12 hospitals – six urban and six rural – have How did we get here? closed since 2011, with another rural hospital set to On April 8, 2015, Penny Guin purchased real property shut its doors in late March. While it would increase and, on the same day, executed in favor of Reform- the amount of federal funds provided to Alabama, based West Alabama Bank and Trust (“WABT”) an Medicaid expansion would also come with a large optional future-advance mortgage secured by the price-tag that would have to be paid from the property. The next day, Guin and Jasper-based GHB

24 LEGISLATIVE ISSUE 2019 BANKING TRADITIONS Construction (“GHB”) entered into a contract to construct a home on the property. After completing FOCUS ON its work, GHB submitted a final bill on July 25, The Banking Committees 2016. At Guin’s request, the bank advanced funds When a piece of legislation is introduced that impacts Alabama’s banking under the mortgage for the first time nearly three industry, chances are high that it will be assigned to the House Financial months later, on Oct. 16. When part of its final Services Committee or the Senate Banking and Insurance Committee. Thanks bill was not paid, GHB filed a lien in probate to several legislative retirements, the committees’ rosters are poised to look court against Guin’s property and, a little over different than they did last term. In fact, of the 28 legislators serving on two weeks later, GHB asked the Walker County these two committees, 17 of them were not Circuit Court court for a declaratory judgment that assigned to these committees at the end of last session. In the House, Rep. Chris its materialman’s lien was superior to WABT’s Blackshear (R-Phenix City) of District 80 mortgage lien. was named chairman of the 13-member House Financial Services Committee, while Blackshear Shelnutt As you might expect, the bank tried to have GHB’s in the Senate, Sen. Shay Shelnutt claim dismissed, arguing that WABT’s lien had (R-Trussville) of District 17 was named chairman of the 15-member Senate priority because the mortgage was executed before Banking and Insurance Committee. The association looks forward to working GHB delivered materials to Guin’s property. with these Representatives and Senators as they shape Alabama’s banking policy for the next four years. The trial court agreed, and GHB appealed to the Alabama Supreme Court. In a 5-4 ruling handed HOUSE FINANCIAL SERVICES COMMITTEE down on Sept. 21, 2018, the Court reversed the trial Rep. (R-Phenix City), Chairman court and held that “a future-advance mortgage does Rep. Jimmy Martin (R-Clanton), Vice-Chairman not create a mortgage lien until some indebtedness Rep. John Rogers (D-Birmingham), Ranking Minority Member * Rep. (D-Birmingham) is incurred by the mortgagor under the future- Rep. (R-Montgomery) advance mortgage.” In other words, the Court Rep. Kelvin Lawrence (D-Hayneville) * said it did not matter that the bank’s mortgage had Rep. Thad McClammy (D-Montgomery) been executed prior to the commencement of any Rep. (R-Muscle Shoals) ^ Rep. (R-Hartford) ^ construction work. Instead, what drove the ruling Rep. Kyle South (R-Fayette) * was the Court’s assertion that indebtedness was Rep. (R-Hayden) * incurred by the bank not on April 8, 2015, the day Rep. (R-Harvest) ^ the mortgage was executed, but on Oct. 16, 2016, Rep. (R-Tuscaloosa) the day the bank made the first advance. Since SENATE BANKING AND INSURANCE COMMITTEE the advance occurred after GHB had delivered Sen. Shay Shelnutt (R-Trussville), Chairman materials to Guin’s property, GHB incurred debt Sen. Jack Williams (R-Wilmer), Vice-Chairman first and thus, its lien had priority. Sen. (D-Birmingham), Ranking Minority Member Sen. (R-Montgomery) ^ Sen. David Burkette (D-Montgomery) * Then-Associate Justice Tom Parker, who would Sen. Donnie Chesteen (R-Geneva) ^ be elected chief justice less than two months later, Sen. Chris Elliott (R-Spanish Fort) ^ was joined in the majority opinion by Justices Sen. Andrew Jones (R-Centre) ^ Tommy Bryan, Jim Main, Greg Shaw and Kelli Sen. (R-Scottsboro) * Wise. Justice Shaw also wrote a special concurring Sen. (R-Opelika) ^ Sen. Dan Roberts (R-Birmingham) ^ opinion arguing that a mortgage tax or recording fee Sen. (R-Guntersville) paid by WABT could potentially be an incurrence of Sen. (D-Greensboro) * debt that would secure the bank’s lien priority. Sen. Jabo Waggoner (R-Vestavia Hills) Sen. Tom Whatley (R-Auburn) Continued page 27 * indicates incumbent legislator who did not previously serve on these committees ^ indicates legislator serving first term in House/Senate BANKING TRADITIONS The Magazine of the Alabama Bankers Association 25 Experience the power of true partnership.

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Learn more & experience: FNBB is a non-competitive ally with a commitment SERVICE BEYOND COMPARISON to community banking in Alabama. Contact: bankers-bank.com Andrew Nichol, Relationship Manager Jonathan Simon, Central & North Alabama Correspondent Lending Officer 800.318.6272 Aggie Gibson, South Alabama Correspondent Lending Officer

In addition to traditional correspondent services we offer:

• Asset Liability Management • Image Check Exchange • Capital Markets Division • Lending • Compliance Audit Services • International Services • Sales/Trading • Officer and Director Loans • Internal Audit Services • Bank-Owned Life Insurance • Bond Accounting • Holding Company Loans • Insurance Products & Services • Retirement Plan Services • Safekeeping • Loan Participations TIME TO FOCUS but also future advances to the same extent as if the continued from page 25 future advances were made at the same time the mortgage was executed. This act also would provide Dissenting were then-Chief Justice Lyn Stuart and that the total amount outstanding under the mortgage Justices Mike Bolin, Brad Mendheim and Will Sellers. at any one time has priority over any subsequently recorded mortgages, liens, or conveyances. While Simply put, the Court’s holding in GHB Construction this bill would technically be adding new laws to the and Development Company, Inc. v. West Alabama books, its purpose would simply be to realign lien Bank and Trust calls into question a bank’s lien priority laws with how they existed prior to the WABT position on every loan product where all of the ruling. proceeds were not advanced at closing. Again, the Court still has the power to avoid the Experience the power Along with the Mortgage Bankers Association of harmful consequences that are sure to result from the Alabama, the Alabama Land Title Association, the WABT decision. But until they do, the association’s of true partnership. Credit Union Coalition of Alabama, and the League primary focus during the 2019 legislative session will of Southeastern Credit Unions, the association be on passing this simple, yet incredibly important, spearheaded an effort to petition the Court to rehear piece of legislation. the case. WABT filed a petition, too, but as of this writing, the Court has not indicated whether it would rehear the case or, if it did, what modifications it FOCUS ON Partnering with FNBB means more than access to a full range of would make to the original ruling from last September. innovative correspondent products and services. It means you’ll YOU! experience unparalleled attention from individuals who are What’s next? committed to building lasting relationships that help you The beginnings of legislative terms are the perfect In just 23 pages, the Court’s WABT ruling upended improve performance and increase profits. That’s the power of time to form or maintain a relationship with your decades of industry practice surrounding lien priority an FNBB partnership. legislators. When the rubber meets the road, the and threatened to permanently eliminate an entire class association will need YOU if bills like the Future of loan products, including home equity lines of credit. Advance Mortgage Protection Act are to have a chance But unless at least four of the justices, some of whom of becoming law. Please strongly consider taking a only joined the Court in January, agree to rehear the few minutes to call, visit, or email your representative case, the WABT ruling is the new law of the land. or senator – introduce yourself long before you ask for their vote! You never know when that relationship And if that’s the case, the association and other might pay dividends for you, your bank, industry advocates agree: this judicial problem and the entire industry. demands a legislative solution. Enter “The Future Advance Mortgage Protection Act.” Learn more & experience: FNBB is a non-competitive ally with a commitment Jason Isbell is ABA’s Vice President of SERVICE BEYOND COMPARISON to community banking in Alabama. Contact: As currently drafted, this bill would make clear that a Governmental and Legal Affairs. He can be bankers-bank.com Andrew Nichol, Relationship Manager mortgage may secure not only existing indebtedness reached at [email protected]. Jonathan Simon, Central & North Alabama Correspondent Lending Officer 800.318.6272 Aggie Gibson, South Alabama Correspondent Lending Officer Stay up-to-date about everything going on at the Alabama State House In addition to traditional correspondent services we offer: by reading our e-newsletter, Capitol Notes. To subscribe, simply email • Asset Liability Management • Image Check Exchange • Capital Markets Division • Lending • Compliance Audit Services • International Services • Sales/Trading • Officer and Director Loans Jason Isbell at [email protected]. • Internal Audit Services • Bank-Owned Life Insurance • Bond Accounting • Holding Company Loans • Insurance Products & Services • Retirement Plan Services • Safekeeping • Loan Participations BANKING TRADITIONS The Magazine of the Alabama Bankers Association 27 How Negotiating with Vendors Can be Easier than You Think By Kelly Flynn Many community banks continue to struggle with how to improve their bottom line without taking dramatic cost-cutting measures. Instead of playing defense by reducing staff or cutting services, start playing offense by finding savings in your vendor contract negotiations. Not only will you likely find additional funds, you can improve the quality of the service you receive — and you can do so without changing vendors.

Re-negotiating benefits both large and immediate, retroactive savings. However, it’s also a case of better late than never when it comes to uncovering small institutions hidden savings. Whether you have one vendor or dozens, an expert in vendor pricing and services can walk you through the process of determining what level of savings What you don’t know could cost you you should expect from re-negotiating your service Over the past few years, there has been a substantial contracts. What’s more, simply changing the verbiage decrease in technology costs. However, your service in a contract can ensure that you’ll receive the services provider is under no obligation to pass along those you need today, as well as what you anticipate needing savings to you … especially if you have never asked for down the road. a review of contract pricing and terms.

When done correctly, re-negotiating a contract can An expert in contract review can determine if there are be a “win-win” for you and your vendors; you get savings and possible incentive opportunities available better service at a better price and your vendors keep a with your current vendor. This includes reviewing every satisfied customer. However, if there are issues related line item of your service agreements and providing to poor service or slow response to requests for support, feedback on pricing, service, support, and conditions getting the vendor’s attention during negotiations can related to proposals, contracts and agreements. For lead to solutions for unsatisfactory treatment that can contracts such as debit card processing — which can mend conflicts in the relationship with your institution. include between 50 to 60 line items — this can require a substantial time commitment from your staff, taking Depending on the type of service, most contract terms them away from important strategic initiatives or run between three and seven years. The best time service issues. to review contracts is before they renew or extend automatically — approximately 18 to 24 months prior With the results from such a comprehensive review, to the expiration dates. It is during this timeframe you’ll be able to make an informed decision to not only that the most substantial savings can be negotiated. secure better pricing, but also to lock in more By starting this early, you may even benefit from Continued page 30

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© 2019 John M. Floyd & Associates, Inc. J|M|F|A® is a registered trademark and JMFA Next Generation Overdraft Privilege is a trademark of John M. Floyd & Associates, Inc. NEGOTIATING WITH VENDORS amount of details associated with the merger and continued from page 28 remain unaware of the potential savings available by renegotiating existing contracts. In some cases, they simply ignore this seemingly cumbersome issue. favorable terms that fit your budgetary needs. If your A better solution? Creating a competitive environment current vendor presents less than ideal costs or terms, to determine which vendor is willing to absorb any a professional negotiator can often help you obtain termination costs to retain the business. Establishing a better deal. And, if necessary, they can even help a competitive field will help to either eliminate the identify other potential service providers that might be a penalties or negotiate to have the winning vendor pay better fit for your needs. for them. And having the support of an objective third- Check your contracts when making service party negotiator can help you get the best results from changes this situation. Increasing consumer demand for faster, more Depending on the transaction volume and other factors, convenient services — along with new standards on the savings from reviewing vendor contracts could credit and debit card technology — have created a more reach hundreds of thousands, if not millions, of dollars. urgent need for community banks to upgrade product offerings and reduce the risk of fraud on electronic Focus time and resources to your best advantage transactions. Unfortunately, staying on top of the latest Let’s face it, monitoring and managing service contracts technology can involve substantial costs — especially if can be confusing. That’s especially true if staff is you are working under service contract terms that were without the strong expertise to measure current costs established years ago. against what options are available in the marketplace or the skillful knowledge to negotiate better terms. If you’re planning to make changes to your existing service delivery offerings, it is also the perfect If your service agreements are coming up for renewal opportunity to make sure your current contracts for in the next 18-24 months, there’s no better time to enlist core processing, Internet banking and debit/credit card the help of a professional contract reviewer to identify branding provide the most favorable terms at the lowest potential savings and better service offerings for your possible costs. account holders. Make a point to review contracts Satisfaction should be guaranteed following a merger or acquisition Whether you have existing contracts that haven’t been In the event of a merger, contract negotiations present reviewed for years or you’re simply looking for a way an important opportunity for obtaining improved to get the most value on your service contracts, you efficiencies and streamlined service. The issues related should seek outside help from a partner that offers a to mergers are complex, and in some instances, far- guarantee on their fee structure. By doing so, if their reaching. Whenever two organizations combine, the help does not result in lower costs, you should not be service redundancy factor is not only overwhelming charged a fee. That way, the only way your bank can but expensive. The acquiring institution now has two lose is by neglecting to take advantage of this cost- core processors, two ATM and card processors, two saving opportunity. credit reporting processors, and on and on. And, early termination of vendor contracts usually results in costly Kelly Flynn is a national sales director penalties. for John M. Floyd & Associates (JMFA). She has more than 15 years of experience Ultimately, senior management must decide which of working with financial institutions of all the multiple platforms to select and absorb the costs sizes. associated with terminating a vendor. Oftentimes, however, leaders are consumed by the tremendous JMFA has been endorsed since 2005.

30 LEGISLATIVE ISSUE 2019 BANKING TRADITIONS 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. PIN Adds Level of Security in Payment Transactions by Terry Dooley

32 LEGISLATIVE ISSUE 2019 BANKING TRADITIONS When authenticating transactions, choosing between one authentication method or another isn’t a good strategy. A better approach is to leverage layered authentication, allowing the PIN to serve as the strongest option because the issuer is authenticating the consumer’s identity.

There’s a clear trend emerging in the payments authenticated by the device, not the consumer. industry regarding payment authentication. It’s One example is the elimination of the consumer’s moving from authenticating the consumer to signature for chip-on-chip transactions. PINless authenticating the transaction or device initiating chip-on-chip transactions, which generally occur the transaction. The effects and ramifications under a certain dollar amount, also operate this aren’t yet known; and, combined with countless way. new entrants into the payments landscape, consumers are using — and loading personal The implementation of biometrics — fingerprints, information into — more and more applications facial recognition, etc. — are used to authenticate to access their accounts. Storing credentials in a a consumer to a device. But that biometric third-party app to query other financial institution data itself isn’t sent to the issuer to verify the accounts, investment accounts or reward consumer; the transaction is authenticated accounts carries inherent risk, and may have based on the device authentication. A personal some unintended consequences. One of which identification number is, and continues to be, the occurs when an app is compromised but still has only payment authentication method in which access to the consumer’s financial institution or the consumer is authenticated by the financial investment credentials and is used to do nefarious institution. things. Plus, while both PIN and biometrics are technically This situation reignites the old debate: Can you controlled by the consumer, one can be changed, and have a strong, seamless authentication process the other can’t. As a consumer, I can have hundreds that doesn’t require consumer action, but instead of different PIN combinations and change them any just magically works? This is the trend in time I want, but I can’t change the biometrics of my payments. In many cases the transaction is being 10 fingers and toes, and my two eyes.

BANKING TRADITIONS The Magazine of the Alabama Bankers Association 33 Like biometrics, many other methods use device- I don’t believe choosing between one level or transaction-level authentication, such as authentication or the other is a good strategy. QR codes, text messages, email addresses and A better approach is to leverage layered phone numbers. All these options are various authentication and the PIN can serve as one of representations of a token, just as the consumer’s the strongest and most trusted methods because credit or debit card number is a token to reach a the consumer is being authenticated, not a device. consumer’s debit, prepaid or other account. Terry Dooley leads SHAZAM’s Should the PIN be required on every transaction? business and product development, Well, it would allow for the least amount of application development, IT fraud, but it’s not a practical approach for many infrastructure, corporate and IT channels. Yet, the PIN, because of its strength security, vendor integration, and as well as its dynamic nature in its ability to be security consultation teams. changed by the consumer, can serve as a highly effective secondary authentication method when the need for stronger authentication beyond the SHAZAM has been an endorsed service provider device or transaction authentication is needed. since 2005. EDUCATION SPOTLIGHT

A total of 23 people from 18 banks traveled to the 4-H Center in Columbiana for our BSA/AML Boot Camp led by Dianne Barton.

34 LEGISLATIVE ISSUE 2019 BANKING TRADITIONS Providing a great customer experience while keeping an eye on efficiency and bottom line is more  important than ever in today’s branch.

The answer to this ever-growing need is advanced branch technology. ROI models prove that investments in new technology, like interactive teller machines, are the right decision.

“You have to be in a community to serve a community. This is not just an idea anymore. This technology has been proven to enhance customer experience and impact a bank’s bottom line,” industry visionary and STS Group CEO Scott Couch said.

The size of a typical branch has decreased hi-resolution technology that can reduce from more than 2,500 square feet to less costs and improve video. Other solutions than 1,500 square feet in the last 10 years. such as video analytics, access control, Branch technology such as self-service safe and remote alarm management are also deposit boxes, teller cash recyclers, and being adopted to the new branch concept. interactive teller machines are just a few Community banks need a partner that of the products that fit perfectly into the can maintain traditional equipment while new branch model.Customers love this new looking through the windshield at the future streamlined banking experience and it has to provide forward-thinking solutions. proven to make banks more efficient and profitable. Nearly a decade ago, the Alabama Bankers Association endorsed STS Group as its For more information visit us online at New technology is also being used to partner in branch automation and security. www.stsgrp.com enhance branch security. Video can now STS Group is proudly leading the way to or email [email protected]. be captured with fewer cameras; using tomorrow’s branch! new role. Murphy PERSONNEL joined Renasant in Bank Independent congratulates two employees 2013 and previously on their recent promotions. The bank promoted served as director of Ginger McGough to vice president – sales officer enterprise strategy and Deana Slagle to sales officer. Both McGough with responsibilities Jeff Murphy Anne Bethea and Slagle have been with the bank since 2008. in data warehouse implementation, commercial incentive program Bryant Bank design and build out, and overseeing internal announced that developed applications. Prior to joining Renasant, local mortgage Murphy gained experience in infrastructure, core lender, Michelle systems, applications, development skills, and data Robinson, has warehouse design and implementation. Renasant also welcomes Anne Bethea as vice president and been appointed Michelle Robinson Becky Williams as executive vice retirement plan solutions advisor. Bethea will work president and senior mortgage sales manager for at the bank’s Park Place Tower location. She holds a Bryant Bank Mortgage. In addition to Robinson’s Series 7/66 license and is also AIF certified. promotion, Becky Williams has been hired to River Bank and Trust, support the Tuscaloosa market with mortgage headquartered in Prattville, lending. welcomes Davis Dugger as a vice president and relationship manager Peoples Bank of Alabama in under the direction of Doug Thomas, Cullman welcomes David Patterson the Coastal Region’s Managing Davis Dugger to its team as chief financial officer. Executive. As a commercial lender He comes to us with more than 16 in Mobile for the past six years, Davis has exceeded years of banking experience having client expectations by understanding their needs served as a bank examiner for the David Patterson and offering them exceptional service. Alabama State Banking department for 11 years, followed by five years with First National Congratulations to Sherry Coker Bankers Bank working in both the Capital Markets with ServisFirst Bank in Mobile division and the Commercial Lending department. on her promotion to vice president and private banker. In this new role, Renasant congratulates Jeff Murphy on assuming Coker will continue to focus on the the role as the bank’s chief technology officer. growth of Mobile’s Private Banking Sherry Coker Murphy brings more than 30 years of information and Purchase Card sector. Coker has technology and enterprise strategy experience in his more than 15 years of banking experience and has

36 LEGISLATIVE ISSUE 2019 BANKING TRADITIONS ABA’s Half Century Club honors bankers who have been in the industry for 50 years or longer. Have someone in your bank who has reached this milestone? Email Tabitha Abele at [email protected] for more information.

Congratulations to Carole Whitfield on celebrating 50 years of service to the banking industry. Whitfield began her career on at Robertson Banking Company in Dempolis on Feb. 1, 1969. During the early part of her career Whitfield worked in the savings and loan department. She became a supervisor in the 80s and was promoted to vice president in 1987. Whitfield was named head of human resources in 2002 and promoted to senior vice president of operations in 2005.

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Member: FINRA and SIPC www.GoBaker.com | 800.937.2257 Oklahoma City, OK | Atlanta, GA | Austin, TX | Indianapolis, IN | Long Island, NY | 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. been with ServisFirst since 2013. BANK DIRECTOR NEWS SmartBank in Tuscaloosa welcomes Sarah Beth Hahn to its Investment Auburn National Bancorporation Services team. A Tuscaloosa native, announced in January the election Hahn has more than 11 years of of Robert W. Dumas as chairman experience in banking and is a of the board of directors of the certified financial planner. Sarah Beth Hahn company and its subsidiary, AuburnBank. Dumas was appointed Bob Dumas EMPLOYEE NEWS president and CEO of the company in 2017. He has been president and CEO of the bank The Graduate School of Banking since 2001, when he was also elected as a company at Colorado announced that Drew director. Dumas has been employed by the bank in Wade of West Alabama Bank various positions since 1984, and became a director in Reform graduated from the of the bank in 1997. Executive Development Institute for Community Bankers®. EDI is ServisFirst Bank in Huntsville Drew Wade a rigorous 19-month leadership welcomes Dennis Lee Bragg to development program for up-and-coming its board of directors. As a fourth- executive officers of community banks. Wade generation farmer, Bragg has a vast was one of 11 community bank executives from amount of experience in the farming industry. He currently around the U.S. to be recognized for completing Dennis Bragg the program which combines hands-on leadership owns and operates Bragg Farms, development training with sophisticated bank an 8,400-acre, row crop operation. He also operates management strategies to position community bank a certified seed business with wholesale markets executives for long-term success. EDI participants across the Southeast. Bragg joins ServisFirst Bank experienced expert coaching and mentoring by Huntsville with years of community and industry- experienced bank CEOs, and completed a series of related involvement. He currently holds several projects designed to improve their banks’ overall industry positions, such as Director of the Madison performance. Wade began working with West County Cooperative, Director of the Alabama Alabama Bank in May of 1994 as a management Water Commission and is a member of the Auburn trainee. He has worked in various jobs within the Agricultural Partnership Council. Bragg is also a bank and is currently the COO. He has attended and member of the National Corn Growers Association, graduated from both Alabama Banking School and Southern Seed Association, Alabama Farmers the Graduate School of Banking at LSU. Federation, Alabama Crop Improvement Association and the Alabama Soybean and Corn Association.

BANKING TRADITIONS The Magazine of the Alabama Bankers Association 39 RETIREMENTS OBITUARIES

David Downs passed away on Feb. 3. Downs, age 63, was the vice president of Central State Bank in Calera. According to the bank, Downs graduated from the University of Montevallo and then followed in the footsteps of his father, Roy Downs, as a banker and community servant in Calera.

Congratulations to Terry Phillips on his retirement Anthony Willmon passed away on Nov. 26. A in late February from SmartBank. Phillips has had a longtime banker, Willmon retired as the president of long career in Alabama’s banking industry and is a the First Bank of the South in Rainsville. former chairman of the association.

BankFirst Capital Corporation to Acquire FNB Bancshares of Central Alabama BankFirst Capital Corporation announced in solid commercial banking and credit practices, and a November the signing of a definitive merger long tradition of superior community and customer agreement with FNB Bancshares of Central service,” BankFirst’s President and CEO Moak Griffin Alabama, Inc. under which BankFirst will acquire said. FNB Bancshares. The transaction was unanimously approved by the board of directors of each company, After the merger is completed, the combined is expected to close in the first quarter of 2019, and company will operate under the BankFirst brand, is subject to customary closing conditions, including have 22 offices serving Mississippi and Alabama, and approval from the shareholders of FNB Bancshares have assets in excess of $1.2 billion. and bank regulatory authorities. “Our customers will benefit from this merger “Being a strong, local community bank for the through an increased legal lending limit, more communities we serve is extremely important to diversified product offerings, and a continued focus both BankFirst and FNB of Central Alabama. By on technology solutions in banking. The close combining our 183 years of banking experience proximity of the corporate headquarters will enable in Mississippi and Alabama, this merger will allow us to continue to offer local decision making. Best us to build upon and further strengthen our of all, the customers’ relationships with the bankers shared beliefs, community focus and commitment they’ve worked with in the past will continue to service excellence. In addition, this merger unchanged as we become part of the BankFirst supports our strategic intention of partnering with team,” R. Heyward Gould Jr., FNB of Central organizations that have strong core deposit funding, Alabama President and CEO, said.

40 LEGISLATIVE ISSUE 2019 BANKING TRADITIONS Bank Independent’s New Madison Branch Combines Digital Convenience with Personal Service Bank Independent opened a new location at the corner of Nance Road and Highway 72 in Madison in November. The grand opening was celebrated with an open house and ribbon cutting on Nov. 13. The bank’s management team and branch staff joined Angelina Pettway, vice president-sales officer, in welcoming visitors and showing them around the newly-completed facility. While the branch’s signature Williamsburg architecture is consistent with the bank’s other locations, upon entering the space customers experience a casual atmosphere with modern amenities, such as a Tech Bar with secure iPads and a Refreshment Center with coffee, water, and snacks. Regions Foundation Announces $10,000 Donation Supporting Wetumpka Tornado Recovery The Regions Foundation, a nonprofit initiative of Regions Bank dedicated to supporting a wide range of community investments, announced in late January a donation of $10,000 to the Central Alabama Community Foundation. The donation from Regions Foundation will support immediate and long-term recovery efforts organized by CACF following the EF-2 tornado that destroyed parts of Wetumpka on Jan. 19. Regions Foundation’s contribution to CACF’s Wetumpka Tornado Relief Fund will be used to support grants for local nonprofit organizations that are working to meet a variety of disaster-recovery needs. Further, CACF will use funding to deliver financial assistance to individuals and local government entities impacted by the tornado.

BANKING TRADITIONS The Magazine of the Alabama Bankers Association 41 First Metro Bank Announces the Opening of Three Student-Operated Branches in Colbert County Schools Growing their financial literacy footprint, First Metro Bank in partnership with the Colbert County Board of Education, recently announced the opening of student-operated branches at Cherokee, Colbert County, and Colbert Heights High Schools. With the addition of the three in-school branches, First Metro Bank’s nationally recognized program expands to six total schools including Florence High School, Muscle Shoals High School, and most recently, Athens High School. The new school branches, scheduled to open in August 2019, will offer traditional banking products and services that are available only to students, faculty, staff and administration. Shown above are: First Metro Bank President and CEO Rodney Howard, Colbert County Schools Superintendent Dr. Gale Satchel, and First Metro “Since 2013, First Metro Bank’s school branch model has created an Bank Community Reinvestment Officer Alana Parker. innovative program providing students with real-world experiences including financial education, job skills, and mentoring opportunities,” Metro Bank Board of Directors for believing in the students of the Colbert said Alana Parker, community reinvestment officer. “Through the County School District.” unrelenting support of local schools and the FDIC, this program is helping students understand personal financial literacy and offering them the “The First Metro Bank student-operated locations are, and will continue tools needed to become financially-stable, knowledgeable adults.” to be, a momentous part of our financial literacy efforts as our desire to provide local students with financial education is a high priority,” “I am honored to partner with First Metro Bank and have their presence said Rodney Howard, First Metro Bank President and CEO. “We look in our schools,” said Dr. Gale Satchel, superintendent of Colbert County forward to expanding our relationship with Colbert County Schools Schools. “Our students will have first-class financial literacy at their while increasing students’ awareness of financial responsibility prior to fingertips. I want to give a special thanks to Mr. Howard and the First graduation.”

Congratulations to the team at First Cahawba Bank on opening a new office in Troy in late November. First Cahawba’s headquarters are in Selma.

42 LEGISLATIVE ISSUE 2019 BANKING TRADITIONS Community Rallies for 8th Annual Toy Share Drive More than 3,275 toys and $1,016 were donated to the 8th Annual Program in partnership with Lexington High School, Christmas Charities Bank Independent and WAFF48 Toy Share Drive over the holidays, Year Round of Madison County, Committee on Church Cooperation of meeting 2018 goal totals and helping hundreds of families across seven Morgan County, William Porter Foundation in the Shoals, Safeplace counties. Since the first Toy Share Drive in 2011, partner organizations of the Shoals, Cornerstone Church in Lawrence County, Lauderdale have distributed 25,100 toys and more than $7,370 to local families. County Christian Children’s Home, Department of Human Resources of Toys were collected in all bank sales offices and were presented to Franklin County, Department of Human Resources of Lawrence County, partnering charitable organizations for distribution to local families Department of Human Resources of Limestone County, and Rogersville prior to Christmas Day. Recipient organizations included the Angel Tree Volunteer Fire Department. Regions Opens New Bank Branch in Madison County In late February, Regions Bank formally unveiled the company’s most modern branch in the area to date, offering a unique blend of updated technology and personal service. The open design of the branch at 8863 Highway 72 West does not include a traditional teller line. Instead of waiting to be called to a counter, when people walk into the branch, they are greeted face-to-face by a local Regions banker. In addition to helping people with general transactions, each banker at the Bradford Creek branch can help customers with in- depth needs, such as planning budgets, analyzing financial options and creating a personalized roadmap designed to help people accomplish their financial objectives. The branch also becomes part of a growing number of locations offering Regions Video Banking. In addition to standard ATM services, Video Banking ATMs allow customers to choose to connect with a Regions Video Banker via live, two-way video. Along with processing most general transactions, Regions Video Bankers help customers with account maintenance and general inquiries during expanded hours.

ASSOCIATE MEMBER NEWS The law firm of Boles Holmes Parkman White recently announced Kevin Christensen, senior vice president of market intelligence and that longtime ABA attorney and lobbyist H. Hampton “Hamp” Boles data analytics for SHAZAM Network, has been named acting executive has joined the firm as Counsel. A graduate of Auburn University and director and interim board chair for the U.S. Faster Payments Council. Tulane University Law School, Hamp has earned numerous professional Christensen has been involved in this industry-led effort since 2015. As accolades throughout his 51-year legal career and has been intimately a member of the Faster Payments Task Force, he led the interoperability involved in legislative issues important to the Association, the State work group and was a member of the editorial board. Following the Banking Department, and Alabama’s banking industry. After practicing work of the task force, Christensen was elected to the Governance for decades with Balch & Bingham, Boles began his tenure on Feb. 1 at Framework Formation Team. The work group is responsible for his new firm, where his son Mitch is a named partner. developing the operating vision for the U.S. Faster Payments Council, of which Christensen now leads and SHAZAM is a founding sponsor.

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 JULY 14-19 MARCH 2019 2019 Alabama Banking School 28 RESPA / TRID, Patti Blenden University of South Birmingham Alabama, Mobile APRIL 17 29 Mortgage Servicing, Patti Blenden Legislative Day Montgomery AUGUST 1-4 Birmingham CEO, Bank Exec & Directors’ Conference APRIL 2019 JUNE 9-12 The Grand, Point Clear Annual Convention 4 Internal Audit, Mike Thomas & Trade Show SEPTEMBER 22-25 Birmingham The Broadmoor, D.C. Fly-In 5 Beneficial Ownership & CTRs, Dianne Barton Colorado Springs, Colo. The Mayflower Hotel, Prattville Washington, D.C. 15-19 Advanced BSA Academy, Faculty JULY 11-13 Destin, Fla. B2L Summer Leadership NOVEMBER 7-8 Conference 76th Annual Trust & The Henderson Beach Wealth Management MAY 2019 Resort & Spa, Destin Symposium 7 Elder Exploitation & Identity Theft, Molly Stull Vestavia Country Club, Prattville Vestavia 8 How To Create A Program For Your Bank’s Policies Procedure, Molly Stull Prattville 9 Fish Or Cut Bait! Compliance Tackle Box, Dawn Kincaid PROUDLY SERVING FINANCIAL Prattville INSTITUTIONS SINCE 1944 10 Dissecting Disclosures: Analyzing AL New Account Operations, Dawn Kincaid Prattville 22 Universal Banker Certification, Dianne Barton Birmingham 24 What’s Hot and What’s Not: Advanced BSA Update, Dianne Barton Birmingham ACCOUNTING COMPLIANCE For more information on any of ABA’s live seminars, TECHNOLOGY ADVISORY please contact Debbie Pharr at 334-386-5735 or email [email protected]. thebankadvisors.com saltmarshcpa.com | (800) 477-7458 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. 12 Excel Explained: Creating Interactive Spreadsheets (10 a.m.) MARCH 2019 15 Commercial & Business Lending Basics for Support 15 Protecting Your Salaried-Exempt Status (10 a.m.) Personnel (1:30 p.m.) 18 Handling Deceased Deposit Accounts (1:30 p.m.) 16 Flood (10 a.m.) 19 Right of Setoff (10 a.m.) 17 Regulation O - Lending to Insiders (10 a.m.) The UCC for Bankers (1:30 p.m.) 18 Escrows (10 a.m.) 20 Auditing HMDA (10 a.m.) 18 Loan Structuring Basics (1:30 p.m.) How Top Producing Bankers Prospect for Business (1:30 p.m.) 22 Basics of Banking: An Overview (1:30 p.m.) 21 Check Fraud (10 a.m.) 23 Vault Security & Disaster Recovery Essentials (10 a.m.) Managing a Successful Call Center (1:30 p.m.) Opening Fiduciary Accounts (1:30 p.m.) 22 Call Report - Lending Schedules for Banks (10 a.m.) 24 Developing and Organizing an Effective Remote Deposit 25 Residential Construction Lending (1:30 p.m.) Capture Program (10 a.m.) 26 Writing Teller Procedures (1:30 p.m.) Creating the Right ERM Program for YOUR Community Four Cs of Exceptional Supervision (10 a.m.) Bank (1:30 p.m.) 27 Opening Accounts for Nonresident Aliens (10 a.m.) 25 BSA 10 Exam Hot Spots (1:30 p.m.) Best-Ever Compliance Checklists for Commercial Mortgage Origination Compliance: Part 1 (10 a.m.) Loans (1:30 p.m.) 26 Understanding Commercial Loan Documents (10 a.m.) Open Ended Lines of Credit (10 a.m.) 29 Five Ways to Jump-Start Your Core Deposit Growth 28 Foreign Remittances (1:30 p.m.) in 2019 (1:30 p.m.) 29 Ratio Analysis to Determine Financial Strength (10 a.m.) 30 Red Flags for Money Laundering - Staff Training (10 a.m.) APRIL 2019 MAY 2019 1 Basic Cash Flow Analysis (1:30 p.m.) 1 Powers of Attorney (10 a.m.) 2 Core Management Skills (10 a.m.) Mortgage Origination Compliance: Part 2 (1:30 p.m.) Workplace Violence Planning & Active Shooter 2 FFIEC Mobile Services Guidance Review (10 a.m.) Preparedness (1:30 p.m.) 20 Legal Ownerships (1:30 p.m.) 3 Robbery Prevention & Response (10 a.m.) 3 Loan Participations: What You Should Know (10 a.m.) Lie Detection (1:30 p.m.) 7 Equipment Lease Financing (10 a.m.) 4 Successful Workout Strategies (10 a.m.) 8 Recent Lending Compliance Enforcement Actions (10 a.m.) Mapping Complicated Business Accounts Lending 101 (1:30 p.m.) Documentation (1:30 p.m.) 9 BSA CIP and CDD (1:30 p.m.) 5 IRA Death Payments to Beneficiaries Webinar (10 a.m.) Bank Call Report Preparation for Beginners - Part 1 (10 a.m.) 8 Lending to Municipalities (1:30 p.m.) 10 Introduction to ACH (10 a.m.) 9 Business Writing for Financial Professionals (1:30 p.m.) 13 Advanced Commercial Loan Documentation (1:30 p.m.) 10 UCC 3 & 4 (1:30 p.m.) 14 OFAC: Can We Comply? (10 a.m.) Marketing & Advertising Compliance (10 a.m.) 15 Handling Loan Applications (1:30 p.m.) 11 Reg E Five Best Practices (10 a.m.) 16 Bank Call Report Preparation for Beginners - Part 2 (10 a.m.) Addressing Threats of Violence (1:30 p.m.)

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

46 LEGISLATIVE ISSUE 2019 BANKING TRADITIONS Step Up home loans Affordable Rates + Down Payment Assistance

Eligible Borrowers May Qualify For Affordable Income Subsidy

AHFA and Freddie Mac have teamed up to offer the Freddie Mac Home Possible Advantage conventional loan product.

Now, in addition to the down payment assistance currently offered through Step Up, the Home Possible Advantage product provides eligible borrowers a grant to help with closing costs. Borrowers with qualifying income at or below 50% of the Area Median Income (AMI) limits (as published by Freddie Mac) are eligible for an Affordable Income Subsidy (AIS) grant in the amount of $2,500. Borrowers with qualifying income between 50.01% - 80% of AMI limits are eligible for a grant of $1,500.

AHFA has been offering homebuyers the Step Up program since 2005. It is designed specifically for moderate-income home buyers who can afford a mortgage, but need help with the down payment. The down payment funds are secured by a 10-year second mortgage and are combined with a 30-year, fixed-rate first mortgage.

As with Step Up, this new grant can be combined with a Mortgage Credit Certificate to make buying a home even more affordable.

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