PRIME INTEREST FALL 2013-14 A Publication of the Carolinas - Virginias Chapter of The Risk Management Association
CHAPTER OFFICERS MESSAGE FROM THE PRESIDENT: President: educational opportunities for bankers in the country. Mike Hendricks, EVP, CCCO, NewBridge Bank And finally, our Chapter will host our Roundtable ses- sions in April. We will offer multiple roundtable oppor- First Vice President tunities adjacent to the Spring Conference. Please Jennifer Welch, FVP look out for additional details as this is one of the best NewBridge Bank peer sharing opportunities available. Second Vice President Matthew E. Cheek, Esq. The other purpose of your Regional Chapter is to help Williams Mullen support the activities of your local chapters. I encour- Secretary/Treasurer age each of you to get involved and play an active role James Clark in your local chapter. The local chapter is where the Supervision, Risk & Credit/Risk “rubber meets the road” of our organization. Your & Policy local chapter brings the educational and networking Federal Reserve Bank Mike Hendricks, EVP, CCCO, NewBridge Bank opportunities to you on a local level based on what the Greetings! I am honored to serve as your Carolinas- membership in your marketplace wants. The banking Virginias Chapter President this year! This is an landscape has changed significantly over the past few exciting year for RMA as we celebrate our organiza- years. These local programs and education opportu- In This Edition: tion’s 100th anniversary. Your Carolinas-Virginias nities will help you “get back into the game” in today’s Chapter has played a long standing role in the banking environment providing both new thoughts and Message from the President 1 growth of the organization with our own roots being ideas as well as a reminder of the basic principles that traced back to 1921. always hold true. Mark Your Calendars 1 Your Regional Chapter conducts three primary All of these events, no matter if they are offered at the events. Our premier event is the Spring Conference local, regional, or the national level, will help you be- Volunteer Spotlight 2 which will be held April 24th and 25th in Pinehurst. come better bankers. Please take advantage of these BJ Moss This year’s event is already shaping up to be an opportunities by participating in, or even leading, an outstanding opportunity for education, peer sharing, event. The quality and success of all of these events Article Writing Competition— 3 and networking. The RMA-ECU Lending Schools depends on the membership taking an active role. Winning Article will be held May 11th through the 16th. This year’s Investing in SBIC school will include a new design and even more I encourage each of you to adhere to RMA’s new tag Funds opportunities to further your credit acumen. This is line – Join. Engage. Lead. undoubtedly one of the best, most cost effective, Legal Lines 5 Intercreditor Agree- Mark Your Calendars ments - The Basics banking professionals. The 3 year curriculum empha- Appraisal Compliance Re- 6 Carolinas-Virginias Annual Spring Confer- sizes underwriting, cash flows, loan structure and loan views ence: April 24-25, 2014, Pinehurst Resort, management for both Commercial & Industrial and North Carolina. Come enjoy thought-provoking Commercial Real Estate lending. Instruction is provid- ed by a faculty with extensive banking experience and About RMA CAVA 7 programs and fellowship with old and new friends, while also enjoying the legendary hospitality and expertise and involves lectures, case studies, class world-class golf courses of the beautiful Pinehurst discussion and participant interaction. The cost for RMA National Info 8-9 resort. Presenters will address cybersecurity, se- each school is $1,200 and includes hotel (double occu- About RMA questration, local and national economic forecasts, pancy), breakfast & lunch each day and dinner Sunday and Thursday evening. For single occupancy, add Upcoming Programs community service leadership and other topics. Sponsorship opportunities are still available. $250. Audio Series CRC For information contact Matt Cheek at (804) 420- Applications available late January 2014 at: http:// 6923 or [email protected]. cpeprograms.ecu.edu/ShowSchedule.awp? RMA History ~~GROUP~BANK~BANKING RMA-ECU Lending School: May 11 - 16, 2014, Greenville, North Carolina. 2014 will For information contact Kevin Futrell at (843) 724-7012 mark the 43rd year that RMA and ECU have part- or [email protected]. nered to provide Commercial Lending Training for
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Volunteer Spotlight BJ Moss Barbara J. (BJ) Moss retired earlier this year after her responsibilities included policies and proce- Finding hotel rooms for the examiners who an extensive career at the Federal Reserve Bank dures development, new hire onboarding, man- were arriving seemed simple enough except of Richmond. In addition to many activities and agement information system reporting and for the fact that the legislature was in ses- accomplishments, BJ was an active RMA volun- automated tool implementation. sion, convention season was in full swing and teer. Her participation with RMA started when the lists of names of examiners were all hand Gene Johnson, her boss and a Richmond Chap- BJ, from all of us who have known and worked -written and often indecipherable. Because ter RMA board member, invited her to a board with you over the years, best wishes for an reserving rooms was such a challenge and meeting. Much to BJ’s surprise, she was intro- engaging, healthy and happy next phase of the list of arrivals continued to grow, BJ made duced by Gene as his replacement on the Board your life. Thank you for your professionalism, reservations under made-up names (such as (what a great tactic!!). This was the start of many wit and fellowship. Maryland Cryses). Of course, as conventions leadership roles with RMA. BJ held various posi- came and went, the FRB rooms had to be tions with the Richmond Chapter board, including 1985 S&L Crisis: Perhaps one of the most changed to different hotels. This led to awk- education and newsletter chairs, vice president interesting periods in BJ’s time at the Fed was ward situations when examiners came back and president. She served as liaison with the the Savings and Loan crisis that began in from a weekend at home only to find that FRB President's office to plan and hold the annual 1985. She spent 186 nights out of town that they had been moved to some different and Lacker Economic Luncheon for the Richmond year. She was mustered out to examine S&Ls unknown hotel. BJ had to bear the brunt of chapter. The “Lacker Lunch” is an annual high- in Ohio and provide a quick report on financial this for many years—some folks just do not light for the Richmond Chapter and the greater condition. This work had to be done out of the have a sense of humor! Richmond financial community. public eye as maintaining confidence in the soundness of financial institutions was key to The hotels were one challenge – another was BJ also served on the RMA Carolinas-Virginias maintaining liquidity (sound familiar??). Her getting enough rental cars. After the invento- regional board of directors. She will be remem- role in Ohio was cut short by a dive down the ry in town was wiped out, BJ started ferrying bered for many things, but not the least of which hotel stairs, a broken ankle and a time on rentals in from the airport. In all, she ended is being famous among a certain select group for crutches. But, she returned to Richmond only up with 68 rental cars – it would have been the "melt in your mouth" chocolate candies she to be told to back her bags and head to Balti- 69, but BJ felt obligated to send back the pink provided as favors at events she organized. In more, Maryland. Cadillac convertible. Imagine BJ’s reaction addition to BJ’s many roles with RMA, she was when more than one examiner expected her active in volunteer work, including serving on the Maryland also had privately insured S&Ls and to resolve parking tickets! The Fed examina- board of the Longwood University Foundation FRB/Richmond management had been in tion team had 20 beepers, two walkie-talkies Fund, regularly donating blood, and participating touch with Maryland Governor Harry R. and a cassette tape recorder— on projects through the United Way Women’s Hughes to offer support. Maryland had 103 communication technology has come a long Leadership Group. For her sins, she remains a thrifts insured by the Maryland Savings-Share way since the 1980s! The Fed team was livelong fan of the Washington Redskins. Insurance Corporation (MSSIC), ranging in size also accepting and processing collateral, from $153,000 to $1.6 billion in assets, and pretty much anything it could find. A lot of it BJ started part-time at the Federal Reserve Bank open from a minimum of two hours one night a had to be rejected as it did not quality. A of Richmond in 1973 as a receiving clerk in the week to being full-service financial institutions. running joke was that new examiners should Money Department. After graduating with a BS BJ went to Baltimore with the mission to locate be trained like repo men to go out and collect degree in education from Longwood College in thrifts, set up a contact person for each one on collateral. 1975, she taught kindergarten for one year in Isle and establish a basis for providing discount of Wight County before returning to Richmond to window credit to the institutions. Retirement (in her own words): “In retire- start on a Master’s in education, supporting her- ment - I have been staying up way too late self through substitute teaching in Henrico County Soon after that, FRB/Richmond staff joined watching Leno and Fallon, and then sleeping and continuing to work part-time at the Fed. Maryland on examinations of two of the largest in. I have been able to stay up late enough When an education career eluded her, BJ went S&Ls - Old Court Savings and Loan and Merritt to see the end of evening pro football fulltime at the Richmond FRB in 1978 and trans- Commercial Savings and Loan - and immedi- games. I have been traveling with my aunt, ferred to the Examining Department in early 1980 ately uncovered fraud through a review of offi- helping her complete items on her bucket list, as a safety and soundness field examiner, work- cial checks, to the extent that it would take such as a helicopter ride around Manhattan ing her way up to assistant vice president. down the MSSIC Insurance Fund. While a and a hot air balloon ride over Hanover silent run had been ongoing for several weeks, County. I accompanied her to Kings Domin- She graduated from the Virginia Bankers School in early May, the forced resignation of several ion, where she and her son rode various of Bank Management in 1985 and the Stonier officials at these large thrifts sparked an actual roller coasters and I watched and took pic- Graduate School of Banking in 1989. Her Stonier physical run, with lines around the block and tures. My plans to totally gut my kitchen Graduate School thesis on asset securitization people camping out overnight to get their mon- have not yet gotten underway - too much was accepted into the libraries of the American ey. Due to the run and pending liquidity crisis, other fun stuff happening to devote time to Bankers Association, the University of Delaware, the governor was forced to issue an executive that. I can now plan lunch and dinner dates and the Harvard University Graduate School of order on May 14, 1985, limiting withdrawals to with friends, and made a trip to the beach for Business Administration. $1,000 per month. In the rush to get institu- a mini vacation. I am putting my toe in the tions qualified for Federal deposit insurance, water on various volunteer projects and have Over her career at the Richmond FRB, BJ over- examiners were brought in from across the joined the Federal Reserve of Richmond saw bank portfolios, the small shell bank holding country. It was at this point that management Retirement Club, where we meet for break- company program, risk and specialty examination implemented its contingency plan, and as- fast one day a month and also have quarterly staff, internal budgeting and automation units, signed BJ to “logistics”. Little did BJ know what formal meetings. I continue to serve as surveillance, quality control, and served the report “being in charge of logistics” really meant. treasurer of my homeowners association, review and training functions. Prior to retirement, which is almost like a second job.”
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2012-13 Article Writing Competition
The top three articles in last year’s completion were as follows: First Place: Investing in SBIC Funds written by Kevin Brooks, Mario Ichaso, Ian Flanders, Tim Robbins, and Marty Weitzel from Access National Bank in Reston, VA.
Second Place: Lending to Continuing Care Retirement Centers written by Nevin Sheppard from BB&T in Winston-Salem, NC.
Third Place: Erring on the Side of Disclosure written by Jessica L. Kimble from Spilman Thomas & Battle, PLLC in Winston-Salem , NC.
Congratulations to all these authors!!! The winning article follows below and continues on page 4.
INVESTING IN SBIC FUNDS
Risk Management Association 2013 Article Competition Kevin Brooks, Ian Flanders, Mario Ichaso, Timothy Robbins, and Martin Weitzel
In 1958, a Federal Reserve re- seas, a tangible net worth of less than $6 When the investment fund is port to Congress identified a growing gap million, and an average after-tax net in- ready to make an investment with SBA between capital markets and long term come of less than $2 million over the prior leverage, it draws down on the SBA com- funding for growth-oriented small busi- two years. Investments may be in the form mitment by issuing a debenture. The de- ness. In response, Congress enacted the of loans, convertible debt, and/or equity to benture entitles the SBA to collect interest Small Business Investment Act of 1958 to qualifying businesses active in manufactur- and principal payments over a period of facilitate the flow of capital in the U.S. ing, transportation, consumer products, time; with the most common form of fi- economy. The Act led to creation of the and other sectors that are not contrary to nancing being a Standard Debenture. This Small Business Investment Company the public interest. Prohibited investments debenture is an amount equal to or less (SBIC) program within the Small Business include those made to companies active in than two times the amount of private capi- Administration (SBA), whose efforts con- project finance, real estate, financial inter- tal committed to the fund. For General tinue to foster the growth of small busi- mediaries or others deemed contrary to Partners who have previously managed a nesses and the U.S. economy. Regulatory the public interest. successful fund in the program, the SBA changes and the current economic envi- may allow them to access debentures in ronment have led to a growing trend of Currently, investment funds li- an amount equal to or less than three banks investing in SBIC funds. There are censed as SBICs have the option to apply times the amount committed to the fund. many benefits for banks to continue pur- for three different types of licenses. Funds Therefore, the SBIC fund may have ac- suing these investments, but these are in may pursue a Standard License, which cess to a maximum of $150 million for a conjunction with their own unique risk fac- has the broadest investment mandate. single fund and $225 million for multiple tors. This article examines the SBIC pro- This license is approved on a rolling basis funds under common control. The deben- gram and the unique dynamics that arise and is eligible for two tiers of leverage cap- ture rate is based on the 10-year treasury for banks considering such investments. ital with a $150 million cap. The Impact plus a premium (usually a spread of 70 to Investment License is for funds with an 80 basis points) and the terms are com- The SBIC program is aimed at investment mandate targeted for social monly 10-year non-amortizing securities funding middle-market growth companies and financial returns. The managers of with semiannual interest payments. A sec- through private-equity funds and mezza- these funds are required to invest 50% of ond type of financing (called a discounted nine lenders. This program offers private- their capital in “Impact Investments” and debenture) has the same face value as a equity funds two to three times leverage are eligible for an expedited licensing pro- standard debenture, but is issued at a dis- for the private capital they raise up to $150 cess. The SBA defines Impact Investments count. As the debenture matures, the se- million, resulting in a total fund size of as those made in target areas of critical curity appreciates to face value. Discount- $225 million. Investment funds seeking to national priority such as underserved mar- ed debentures with maturities of five years participate in the SBIC program submit an kets and communities facing barriers to do not require interest payments, while executive summary of the fund’s invest- credit and capital. A fund may also apply those with ten year maturities require sem- ment strategy and the management team’s for an Early Stage Innovation License. This iannual interest payments during the last qualifications. The SBA then reviews the license is designed to attract investment five years of the term. The SBIC deben- summary to ensure that the fund meets all fund managers with experience supporting tures are pooled by the SBA in March and program requirements, which includes companies in their earliest stages of September of every year and sold to the investing at least 75% of total capital in growth. They have access to one tier of public in the form of debenture participa- U.S. small businesses. The businesses leverage with a $50 million cap. Once li- tions certificates. These certificates are must have fewer than 500 employees, no censed, investment funds may choose to fractionally undivided interests in the pool more than 49% of employees overseas, a receive a commitment from the SBA to of debentures and are backed by SBA tangible net worth of less than $18 million, provide a specific amount of leverage over guarantees. and an average after-tax net income of a set investment horizon. It should be not- less than $6 million over the prior two ed that SBICs may choose to forgo the use Continued on Page 4 years. The remaining 25% of the fund’s of leverage from the SBA and rely solely capital must be invested in smaller firms on private capital. with no more than 49% of employees over-
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INVESTING IN SBIC FUNDS -
CONTINUED FROM PAGE 3
Banks may participate in the Although there are many benefits investment and their own risk appetite in SBIC program either as bank-owned for banks investing in SBICs, there are order to determine if such funds supple- SBICs or as Limited Partners (LP) with also important risks that must be consid- ment their own strategic plan. other investors. Investment funds in the ered. The three major risks of investing in SBIC program are generally formed as SBICs are the loss of principal (or lack Bibliography limited partnerships, with fund managers luster performance), the illiquid nature of acting as the General Partner (GP). LPs these funds, and increased dependence “News and Issuances.” OCC: OCC Pub- supply the majority of the private funding on the fund manager’s performance. Un- lishes Insights Report Covering How and are typically institutional investors, like other SBA programs, investments in Banks Can Use Small Business Invest- banks, and high-net-worth individuals. SBICs are not guaranteed by the SBA. ment Companies to Expand Business. Banks that choose to own their SBIC are Leveraged SBICs contain elevated risk N.p., n.d.Web. 15 Apr. 2013. unleveraged. This allows banks to have characteristics based on the SBA having a control of the fund while avoiding risks priority interest in the event of a fund’s “SBIC Program I SBA.gov “ SBIC Landing from leveraged financing. liquidation. The invested capital is commit- Page I SBA .gov. N.p., n.d. Web. Web. 16 ted for the life of the fund, which is typically Apr. 2013 Banks investing in SBIC funds ten years. As a result of their illiquid na- find unique benefits beyond the traditional ture, banks may not be willing to commit Askari, Ammar. "Small Business Investment realm of investments, including investing in large amounts of capital for an extended Companies: An Investment Option for funds that are blocked by the Volker rule, period of time as required by a fund. Prior Banks." Community Developments. (2012): as the SBIC funds are exempted from this to making any investment in a SBIC, the n. page. Web. 15 Apr. 2013.
JOIN. ENGAGE. LEAD Page 5 Prime Interest LEGAL LINES INTERCREDITOR AGREEMENTS – THE BASICS By: C. Grigsby Scifres, Esq.
It is commonplace for the capital stack of a Absolute payment blockage or permit- Are protective advances or over- business to have more than one source of ted payments outside default situa- advances limited by the cap debt capital. This can take many forms – tions senior debt and mezzanine or junior debt Are bank products, such as treasury sharing the same collateral, different lend- Duration of payment blockages and management services and interest ers secured by different collateral, seller when do they commence rate protection devices, included financing that is subordinate to senior debt used to finance the acquisition of assets, Unlimited or limited number of pay- What is the scope of the junior debt etc. In each of these situations and many ment blockages during a definite time and is additional junior debt permitted others an Intercreditor Agreement is used period to determine the rights and obligations of Debt Modifications. The senior lend- lenders regarding payment and collateral. er in the shared collateral situation and Subordination agreements, widely used in What senior debt defaults trigger pay- both lenders in the split collateral situation real estate credits, are just another version ment blockages--any default, only want the right to modify both their debt and of an Intercreditor Agreement. Set forth payment defaults or defaults where financing documents without having to below are some of the basic business is- the senior debt has been accelerated provide notice to or obtain consent from sues to consider when negotiating an inter- the other lender. These considerations creditor arrangement. Subordination legend on and/or pos- session by the senior lender of the include: Shared Collateral vs. Split Collat- junior debt instrument eral. The common scenarios involve (i) Are limitations negotiated in the debt the senior lender and junior lender sharing Lien Subordination. These concepts cap discussion implicated the same collateral, (ii) each lender having vary depending on whether there is shared a lien on different collateral and (iii) a sen- collateral, split collateral or an unsecured Should the risk to the junior lender be ior secured lender and an unsecured lend- junior lender. They are accompanied by a materially increased without its con- er. Typical issues in these situations are: “turnover clause” that obligates the junior sent lender to pay over to the senior lender any Should each lender have a junior lien proceeds (whether in cash or in kind) from Administration of the senior debt with- on the collateral of the other lender (in the senior lender’s collateral. Some of the out being restricted by the junior lend- split collateral situations) discussion points include: er
Just lien subordination or both pay- Establishing lien subordination regard- Standstill Provisions. Standstill pro- ment and lien subordination less of lien perfection or the relative visions are a necessary component of the priority under applicable law subordination concept. These provisions are triggered when an event of default or a Rights with respect to guarantors Specifying rights to collateral in the bankruptcy occurs. They block the junior split collateral situation lender from exercising any remedies with Debt caps respect to its debt or its collateral (at least Blocking an unsecured lender from in the shared collateral situation). Some of Standstill with respect to exercise of obtaining any future lien rights the issues that arise in this context are: remedies When does the standstill period begin Guarantors. If the same guarantor is Providing for collateral proceeds to be obligated on both credit facilities then the paid to the senior lender How long will the standstill period last Intercreditor Agreement should address the respective rights of each lender with Waivers and assignments of rights if regard to the guarantors. Similarly, if only the borrower becomes a debtor in a Assigning to the senior lender the jun- one credit facility is guaranteed or if there bankruptcy case ior lenders voting rights in a bankrupt- are different guarantors supporting each cy case credit, then the Intercreditor Agreement Debt Caps. Often a discussion point may prohibit the non-guaranteed credit is a limit on the extensions of credit by one Waiver of the junior lender’s rights to facility from obtaining any judgment against or both of the lenders. Some of the issues contest positions taken by the senior or liens on assets of a guarantor. that arise include: lender in the debtor’s bankruptcy
Payment Subordination. Typically, What are the components of the debt-- Assignment to the senior lender of both payment subordination and lien sub- principal, interest, fees, costs, collec- rights to payments on the junior debt ordination are addressed. Some of the tion costs, indemnity payments business points surrounding payment sub- Waiver of the junior lender’s right to ordinations include: Are new extensions of credit subject to object to a sale pursuant to §363 of the cap and if so what is the limit the U.S. Bankruptcy Code.
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INTERCREDITOR AGREEMENTS – THE *State-certified or licensed appraisers BASICS Appraisal Compliance By: C. Grigsby Scifres, Esq. *Reviewer Qualifications and Depth Continued from Page 5 Review of the Review By: GREGORY J. ACCETTA To ensure that appraisals contain the required Fiduciary Duties. A well-drafted information and analysis, an institution should Intercreditor agreement will contain ex- Excerpt from the November 2013 RMA Journal implement a risk-focused approach to determin- press waivers of any fiduciary obligations ing the depth of the review needed. This pro- between the junior and senior lenders. Independence, analysis, and expertise are cess should differentiate between high- and low Also included will be an acknowledge- key in meeting agency standards for the -risk transactions so that the review is commen- ment that each party had the right to review of appraisal reports used to support surate with the risk. The depth of the review review all information that it deemed per- a federally related transaction. should ensure that the methods, assumptions, tinent regarding the credit facilities, the data sources, and conclusions are reasonable, As part of the credit approval process and prior well supported, and appropriate for the transac- collateral and the debtor. These provi- tion, property, and market. This review also sions are important to eliminate any ar- to making a final credit decision, an institution must review real estate appraisals for federally should ensure that an appraisal contains suffi- gument that the junior lender was relying related transactions. When this review is per- cient information and analysis to support the 3 on the senior lender’s underwriting, credit formed by an appraiser, it is commonly known credit decision. decisions, document drafting or any oth- as a “technical” or Standard 3 review. Standard er similar type theories. 3 refers to the requirements in the Uniform In some cases, the results of the compliance Standards of Professional Appraisal Practice review or the risks related to the transaction will Intercreditor arrangements vary (USPAP) for the performance and reporting of require a more intensive technical appraisal depending on the relative leverage of the such reviews by an appraiser. review performed by a qualified appraiser. Cri- teria for escalating the review process should parties and the types of credit facilities When the review is performed by a non- be established in a bank’s policy and proce- involved (e.g., a revolver with a borrow- appraiser, it is known as a “compliance” or dures. ing base vs. term debt secured by fixed “administrative” review. Compliance reviews assets). An understanding of the busi- are usually performed by designated bank staff. Based on an examination of the appraisal re- ness issues at the outset of negotiations The appraisal regulations issued by the various port by bank personnel who have the required and drafting is key to both protecting a federal agencies1 include five minimum stand- skill, the compliance review process can be an lender’s position in the customer’s capital ards for preparing an appraisal. Specifically, the effective tool for determining that an appraisal stack and leveling what often times is a appraisal must: report used to support a federally related trans- very uneven playing field for a junior action meets minimum regulatory requirements. • Conform to generally accepted appraisal lender. standards as evidenced by the USPAP and To read this article in its entirety, please visit promulgated by the Appraisal Foundation’s http://www.rmahq.org/RMA/RMAJournal Grig Scifres is a partner in the finan- Appraisal Standards Board (unless principles of cial services section of Williams Mullen and safe and sound banking require compliance has represented regulated and non-regulated with stricter standards). lenders for over 30 years. For additional infor- mation contact Grig Scifres at (757) 473.5370 • Be written and contain sufficient information or at [email protected] and analysis to support the institution’s decision to engage in the transaction.
• Analyze and report appropriate deductions and discounts for proposed construction or renovation, partially leased buildings, nonmar- ket lease terms, and tract developments with unsold units. (This is commonly called the “as is” value of the property.)
• Be based on the definition of market value set forth in the appraisal regulation.
• Be performed by state-certified or licensed appraisers in accordance with requirements in the appraisal regulation.
A Very Basic Approach
How can an institution’s review staff determine that an appraisal complies? Let’s start with a very basic approach. *Conformance with USPAP
*Sufficient information and analysis
*“As is” value
*Definition of market value
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RMA CAROLINAS—VIRGINIAS CHAPTER NEWS
CAVA is fortunate to have many active local chapters. These include: Virginia/West Virginia: Hampton Roads, Richmond, Poto- mac, Southwest Virginia and West Virginia Chapters; North Carolina: Eastern North Carolina, Triad, Charlotte and Great Smokies Chapters; and South Carolina: Upper South Carolina, Coastal Carolinas and Charleston Chapters.
Our chapter presents opportunities for individuals to get involved. Chapters rely on the talents of volunteers to stage many of their programs, conduct membership development efforts, and promote the ideals of the Association. To find out more about how you can get involved in our chapter, contact: Jennifer Jefferson at (336) 369-0920.
2013 - 2014 OFFICERS AND COMMITTEE CHAIRS
President: Mike Hendricks, EVP, CCCO At-Large Member: Greg Tripp, EVP, Director of Commercial RE Leasing NewBridge Bank Essex Bank (336) 369.0908; [email protected] (804) 784.4066; [email protected]
First VP: Jennifer Welch, FVP Committee Chairs: NewBridge Bank By-Laws/Long Range/Policy Committee: Jennifer Welch (336) 369.0926; [email protected] Roundtable Program Committee: Jennifer Welch ECU Lending School Liaison: Kevin Futrell Second VP: Matthew E. Cheek, Esq. Public Relations/Newsletter Committee Chair: Grig Scifres Williams Mullen Nominating Committee Chair: Ron Paull (804) 783.6923; [email protected] Article Writing Competition Committee Chair: Babette Stone Audit Committee: Anne Burnett Secretary/Treasurer: Membership Committee Chair: Jennifer Jefferson James Clark, Supervision, Risk & Credit Risk & Policy Young Bankers Committee Chair: Jason Paisley Federal Reserve Bank of Richmond Education Committee/Program Chair: Matthew E. Cheek (704) 358.2466; [email protected] State Liaisons: AT-Large Directors North Carolina: David Bell Past President: Anne Burnett, Director of Financial Bank of Richmond Virginia/West Virginia: Greg Tripp Richmond Federal Reserve (804) 697.4080; [email protected] RMA Southeast Regional Manager: Cindee Munro Virginia/West Virginia: At-Large Member: C. Grigsby Scifres, Esq. President - Potomac Dana Bomkamp Williams Mullen President - Richmond Kristopher De Long (757) 473.5370; [email protected] President - Southwest Vicki Shortt President - Hampton Roads Curt Solomon At-Large Member: Jennifer Jefferson, VP President - West Virginia Chris Morris NewBridge Bank (336) 369.0920; [email protected] North Carolina: President - Eastern NC Jonathan N. Krieps President - Triad Cheryl Hancock At-Large Member: Jason Paisley President - Charlotte Lynn Baldwin Business Finance Group President - Great Smokies Lacy Cross (703) 352.0504; [email protected] South Carolina: President - Upper SC Brian Wildrick At-Large Member: Jennifer Jefferson, VP President - Coastal Carolinas Theresa Arrighi NewBridge Bank President - Charleston Jim Hutto, III (336) 369-0920; [email protected]
At-Large Member: Ron Paull, Examiner Federal Reserve (704) 591.8133; [email protected]
At-Large Member: Kevin Futrell, Credit Risk Manager NBSC, a division of Synovus (843) 724.7012; [email protected]
At-Large Member: David Bell, SVP/Regional Credit Manager First Citizens Bank (919) 716.7555; [email protected]
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ABOUT THE RISK MANAGEMENT ASSOCIATION
The Risk Management Association is a not-for-profit, member Members actively participate in the RMA network of chapters. -driven professional association serving the financial services These chapters are run by RMA Associates on a volunteer industry. Its sole purpose is to advance the use of sound risk basis and they provide our members with opportunities in principles in the financial services industry. RMA promotes an their local communities for education, training, and network- enterprise approach to risk management that focuses on ing throughout all stages of their financial services career. credit risk, market risk, operational risk, securities lending, Chapters are located across the U.S. and Canada as well as and regulatory issues. Founded in 1914, RMA was originally in financial centers internationally. called the Robert Morris Associates, named after American patriot Robert Morris, a signer of the Declaration of Independ- RMA members also avail themselves of benefits offered ence. Morris, the principal financier of the Revolutionary War, through headquarters in Philadelphia, Pennsylvania. To helped establish our country's banking system. assist members in advancing sound risk principles, RMA keeps members informed and provides access to industry Today, RMA has approximately 2,500 institutional members. information at this site; publishes a journal (The RMA Jour- These include banks of all sizes as well as nonbank financial nal) and a variety of newsletters, books, and statistics; con- institutions. RMA is proud of the leadership role its member ducts many workshops and seminars; holds several confer- institutions take in the financial services industry. Relationship ences, an annual convention (Annual Risk Management managers, credit officers, risk managers, and other financial Conference); and has numerous committees working on a services professionals in these organizations with responsibil- variety of projects. ities related to the risk management function represent these institutions within RMA. Known as RMA Associates, these RMA welcomes all personnel involved in lending and risk 16,000 individuals are located throughout North America and management in member organizations to become RMA Asso- financial centers in Europe, Australia and Asia. ciates.
Information About RMA Programs, Chapters and Opportunities:
Cindee Munro, Southeast Regional Manager – Chapters and Community Banks The Risk Management Association | 1801 Market Street, Suite 300, Philadelphia, PA 19103 T: 623.266.2344 | F: 623.266.0963| [email protected] | www.rmahq.org
Upcoming Programs:
Chapter Leaders Conference: Philadelphia, PA, June 19–20, 2014
Executive Leadership & Risk Management Program Scottsdale, AZ, March 09 - 14, 2014
Enterprise Risk Management Forum Dallas, TX, May 13 - 14, 2014
Credit Risk Management Audio Series
December 10, 2013—Commercial Credit Risk Ratings: You No longer Can Just Set It and Forget It January 14, 2014—ALLL – Regulatory Impact for Community Banks February 11, 2014—Credit Review – Increasing the Profile of the Third Line of Defense March 11, 2014—Small Business Lending--What Are Banks Doing to Book Loans? April 15, 2014—Role of Risk Management in New Product Development May 13, 2014—Stress Testing: De-Mystifying Stress Testing—Its Not Just for the Big Guys Anymore June 10, 2014—Lending to the Health Care Industry—Opportunities and Challenges
Time: All audioconferences will be held at 1:00 p.m. Eastern Time (10:00 a.m. Pacific Time).
Fees: Multiple listeners permitted free on the same line (include as many as can fit around your speakerphone).
RMA Individual Members: $800 for all ten audioconferences; $100 for five to nine per selected audioconference; or $120 for each selected audioconference up to four (per telephone line).
RMA Member Institutions: $900 for all ten audioconferences; $110 for five to nine per selected audioconference; or $130 for each selected audioconference up to four (per telephone line).
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RMA Credit Risk Certification Why RMA-CRC?
In today's rapidly changing financial services industry, you need practical, day-to-day knowledge that will help you excel in your profession. You need the latest skills—skills that are current and complete. And you need the demonstrated ability to serve a di- verse base of clients. Plus, you need all of your knowledge, skills, and abilities to be validated by a respected organization like RMA. Obtaining your CRC is an investment in your career. For information: http://www.rmahq.org/tools-publications/rma- university/credit-risk-certification
THE BIRTH OF RMA - CENTENNIAL UPDATE
The Risk Management Association is marking the 100th year The Robert Morris name honored the founding father known of serving its members. The official observance, be- ginning at as the primary financier of the Revolutionary War and one of this year’s Annual Risk Management Conference in Philadelph- only two people to sign the Declaration of Independence, the ia (November 17-19), will continue through and beyond the Articles of Confederation, and the Constitution. (Roger Sher- 100th anniversary date—June 25, 2014. Throughout the cele- bration, The RMA Journal is highlighting key moments in RMA man, who helped draft the Declaration, was the other.) Mor- history in this space each month. ris also served as the young nation’s powerful Superinten- dent of Finance and, with Alexander Hamilton and Albert What’s worse than hearing that a company that owes you Gallatin, is widely credited with developing the U.S. financial money is about to go under? Realizing that it might owe plenty system. to several other creditors, too. But his illustrious career also includes a sad footnote. After That was the unfortunate situation facing several financial insti- amassing great wealth through shipping and other endeav- tutions in 1914, when a New York Times headline blared, ors, Morris went bust later in life after a leveraged land spec- “Receivers Take H.B. Claflin … Notes Held by 5,000 Banks.” ulation play went badly. He ended up in debtors’ prison and H.B. Claflin was a dry goods company whose stores included was released only after a special appeal by George Wash- Lord & Taylor. It was also a big-time borrower, but many credi- ington led to bankruptcy law reforms. tors didn’t realize to what extent. Despite its stellar credit rating, Claflin was over-extended after backing the debt of several But perhaps Morris’s financial downfall made him an even struggling department store affiliates. more apt namesake for the organization that became RMA. After all, his life is a lesson in the vast potential-and pitfalls-of The receivership news broke just as the National Association of credit. Morris used credit to borrow against his name and Credit Men was holding its convention in Rochester, New York. finance the war effort. Later, borrowing helped put him in There was a bit of a stir, to say the least. Bankers raced out of prison when the value of his investments plummeted. the meeting hall to find phones. Some attendees left the site altogether and went home to get a better handle on their Claflin positions. Times have changed, and the draconian penalty of debtors’ prison has long been abolished. But, as ever, the financial world That 1914 gathering was also notable because it hosted the remains a risky place indeed. first meeting of The Robert Morris Club of the National Associa- tion of Credit Men, the organization you now know as The Risk Management Association. The club was not formed in response to the panic of the day; the meeting was planned beforehand. But its raison d’être— promoting relations between bankers so they could share credit information was certainly applicable to Claflin. The club’s early members hoped that such relations would minimize future losses.
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