ProBank Austin to Introduce New ‘bankED’ Compliance Training Program at LendIt Fintech 2018 USA
Louisville, KY, March 9, 2018 — ProBank Austin, formerly Professional Bank Services, will launch bankED, its new, video-based compliance training platform, at the LendIt Fintech conference, April 9-11, in San Francisco, CA.
Consider the Impact if Your Database was ‘Equifaxed’!
Posted February 27, 2018 by Stephen D. Heckard in From the Experts.
My youngest son is a high school varsity basketball coach. Each year, before the season begins, he hears of certain areas that the state athletic association wants referees to focus on. These are referred to as ‘points of emphasis’. As a coach, he must learn about officiating updates. Some of these points of emphasis may be due to new rules, while others are due to the progression of the game, causing existing rules to be enforced more diligently. As conditions change, officiating and coaching must evolve. It is important for coaches to be aware of these points of emphasis to avoid being penalized during the season when it matters.
Fed to Wells: Can You Hear Me Now?
Posted February 20, 2018 by Michael M. Moran in From the Experts.
I had anticipated that this month I would simply script a quick overview of the recently released CCAR/DFAST severely adverse economic scenario dynamics. And much like last year (“Do the 2017 CCAR Scenarios Signal Regulatory Focus?”, 2/16/2017), opine on any potential hidden (or overt) messages being sent by the regulators in terms of risk management in the banking industry. In that regard, once again the industry’s largest banks will address a harsh, albeit hypothetical, economic environment – worldwide recession, double-digit unemployment, housing prices off 30% and equity values declining 65%, commercial real estate values cratering, GDP nosedives, etc. – that will gauge both resiliency and resolve for a U.S. banking industry that has grown stronger coming out of the crisis.
Lenders’ Leased Fee Risk
Submitted by Ann Scott, February 15, 2018
Mattress Firm announced the closure of 200 stores in late 2017. Substituting “local” lease terms into those properties will weaken those properties’ cash flow and potentially leave lenders short on debt service coverage. Collateral value may also suffer, further increasing lender risk. As lenders assess their portfolio position for properties housing retail operations, consideration needs to be given to potential changes in collateral value.
Just Another Risk Assessment, or is it a Critical Risk Assessment?
Posted February 8, 2018 by Darla J. Brogan in From the Experts.
Risk assessments are a valuable tool, if used to truly understand the threat environment associated with specific product lines. A good example of a meaningful risk assessment would be a “Corporate Account Takeover Risk Assessment” which, if performed properly, is used to determine the probability of a Corporate Account Takeover (CATO). If the risk is low or nonexistent, then a CATO program would not be necessary. However, the risk is high if a bank offers any of the following products through the electronic banking or cash management system for either commercial or retail customers:
2018 Kicks Off with a Michigan M&A Bang!
Posted January 18, 2018 by Michael M. Moran in From the Experts.
On the evening of January 9, the $1.1 billion Troy-based Crestmark Bank announced plans to merge with a $5 billion operation headquartered in South Dakota. Aside from the geography of the merger partner, such news has become common in our consolidating industry and is typically absorbed by the markets in what has become a somewhat routine fashion. However, one metric jumped off the page when reviewing the dynamics of the transaction: the buyer, MetaBank, will be paying approximately 3.8x tangible book value for the Crestmark franchise. Yes, that is not a typo. 3.8x. And, at the risk of being called clinically insane, let me say that it appears to be a truly disciplined transaction.
Kicking Off the New Year with Resolutions and Best Practices
Posted January 17, 2018 by Darla J. Brogan, Stephen D. Heckard in From the Experts.
According to Wikipedia, ancient Babylonians began each year by promising to return borrowed objects and repay their debts. Ancient Romans began the New Year by making promises to Janus, a two-faced god who represented beginnings and transitions. The month January is name for Janus. Neither the Babylonians nor the Romans had to deal with technology vendors. Ah, so much for the good old days!
Hauck to Facilitate Ohio Banker League’s CFO Forums in 2018
Posted January 9, 2018 by Thomas C. Hauck in From the Experts.
Tom Hauck, Managing Director of ProBank Austin, returns as Facilitator for OBL CFO Forums in 2018. CFO Forums provide opportunities for Presidents, CEOs, CFOs, Controllers, and Fund Managers to discuss important issues critical to a bank’s financial health. With 25 years of community bank consulting experience, Tom leads timely discussions on industry challenges, cutting-edge ideas, and examination experiences. The CFO Forum includes three classroom seminars on March 5, May 14, September 17, and the OBL Annual Meeting on November 7.
Financial Managers Society Publishes Article “The Branch of 2018” by Jeff Morris
Posted January 3, 2018 by Jeffrey L. Morris in From the Experts.
The January/February 2018 issue of Forward, the publication of The Financial Managers Society, features an article by Managing Director Jeff Morris entitled “The Branch of 2018.” Jeff shares his vision for branches in the future which includes technology, but he asserts that it is not all about the latest technology. Jeff envisions future branches as personal financial planning offices staffed by personal bankers who are trained to address customer needs. He believes that traditional teller lines will be replaced by ATMs or ITMs (interactive teller machines) which will be well positioned for customer convenience.
ProBank Austin’s Crystal Lloyd Earns American Bankers Association’s CAFP Certification
Posted December 4, 2017
ProBank Austin announced today that Crystal Lloyd, Vice President-Compliance Division, has become the company’s first Certified AML and Fraud Professional (CAFP). The Certified AML and Fraud Professional (CAFP) designation is awarded to those whom have demonstrated proven knowledge in program design and governance, regulatory requirements, detection, prevention, and reporting, and understanding of existing and emerging money laundering and fraud risks.
Independent Bank Corporation Announces Agreement to Acquire Traverse City State Bank
Posted December 4, 2017 – Craig J. Mancinotti, lead adviser
Maroney Addresses Michigan Bankers Association Management & Directors Conference
Posted November 30, 2017 by Richard F. Maroney, Jr.
Rick Maroney, Managing Director, ProBank Austin, addressed the Michigan Bankers Association Bank Management & Directors Conference today in Grand Rapids, Michigan. Rick’s presentation was entitled, How Washington is Influencing Community Bank M&A.
The Arrogance of Technology
Posted November 15, 2017 by Stephen D. Heckard in From the Experts.
“Bright shiny thing increases ROA by X%.” I have yet to read that in a press release from a tech vendor, but I won’t be surprised when I do!
Financial technology vendors have all fallen into the same trap, believing their own press releases. “Our tech is better because, blah, blah, blah.” Ok, prove it! Too often vendors forget they are not selling technology, but service. And, all too often, that service fails to satisfy clients.
Morris and Van Nevel to Address Ohio Bankers League Annual Meeting on November 9
Posted November 7, 2017 – Jeffrey L. Morris and Vincent P. Van Nevel
ProBank Austin Managing Directors Jeff Morris and Vince Van Nevel are addressing the Ohio Bankers League’s 2017 Annual Meeting on Thursday, November 9, at 11 a.m. at the Hyatt Regency, Columbus. The theme of this year’s conference is “Creating a Winning Culture.” Their professional development presentation is entitled “CECL Simplified. All of the Method. None of the Madness.”
CECL Simplified – All of the Method. None of the Madness
Posted October 31, 2017 by Jeffrey L. Morris, Vince Van Nevel
ProBank Austin brings the expectation for full CECL compliance down to the community bank level in this complimentary one-hour webinar, CECL Simplified, presented by Managing Directors Vince Van Nevel and Jeff Morris. This webinar will provide workable solutions for your community bank on compliance issues that align with the complex new accounting requirements, and that fit the resources and capabilities of most any bank.
PROBANK AUSTIN TRANSACTION ANNOUNCEMENT
Glacier Bancorp, Inc. Announces Acquisition of Inter-Mountain Bancorp., Inc.
Announced October 26, 2017
ProBank Austin Served as Financial Advisor
October 26, 2017 – Glacier Bancorp, Inc., (NASDAQ: GBCI) headquartered in Kalispell, Montana, has announced plans to acquire Inter-Mountain Bancorp., Inc., the bank holding company for First Security Bank, based in Bozeman, Montana.
Understanding the Cold Hard Truth About the Impact of Acquisitions on Vendors
Posted October 25, 2017 by Stephen D. Heckard in From the Experts.
Newton’s third law of motion states that for every action there is an equal and opposite reaction. We all learned that in high school physics. But, what does physics have to do with technology, more precisely, the business of financial technology? Literally, not much. I’m citing it, however, to show there is a correlation between market forces in the banking industry and the reaction to those forces by technology vendors.
Michigan Banks Were Tested Yet Remain Optimistic a Decade After the 2007 Financial Crisis
Posted October 24, 2017 by Michael M. Moran in From the Experts.
It is hard to believe that the date when bank equities peaked (October 12, 2007) during the onset of the financial crisis has now passed its 10th anniversary. While the mortgage meltdown was already kicking into gear, investors were still hopeful as we moved through the Summer of 2007 that significant damage could be avoided and the fallout in the real estate sector would be contained. The S&P 500 closed at a record 1.565.15 on October 9, 2007, a level it would not see again until March 2013.
Jeff Morris Addresses the Ohio Bankers League of Financial Institution
Posted October 19, 2017 by Jeffrey L. Morris.
Jeff Morris, Managing Director of ProBank Austin’s Financial Management practice area, addressed the joint convention of the Ohio Bankers League and the Illinois League of Financial Institutions held in Asheville, North Carolina, on October 12 through 15. Jeff’s presentation on “Loan Growth Strategies for Highly-Competitive Markets” included a discussion on community bank growth trends, high level growth strategies, product specific growth strategies, and implementing growth plans.
Jeff Morris Addresses Community Bankers of West Virginia’s 2017 CEO Directors Conference
Posted October 2, 2017 by Jeffrey L. Morris.
Jeff Morris, Managing Director, Financial Management, ProBank Austin, addressed the Community Bankers of West Virginia’s 2017 CEO Directors Conference on Friday, September 29, at Stonewall Resort, Roanoke, WVa . Jeff’s one-hour presentation was entitled “Seven Secrets of High Performing of High Performing Community Banks.”
Is “Too Big to Fail” Evolving Into “Too Small to Succeed”?
Posted September 20, 2017 by Michael M. Moran in From the Experts.
Coming out of the financial crisis so much attention, politically and economically, seemed to be focused on chants of “break up” the big banks. Irrespective of one’s view on the rationale of such a move — would global competitiveness potentially be exchanged for political expediency? Hadn’t some of the largest traditional commercial banks, such as JPMorgan Chase, effectively stepped up to deploy tremendous resources in helping resolve the haphazard ways of Great Recession poster kids like Lehman, Bear Stearns, Washington Mutual, etc.? Did some bailouts simply perpetuate the concept of moral hazard as few seemed to be truly held accountable during the chaos?
Harvey, Irma and Equifax
When It Comes to Core Conversions, Look Before You Leap
Posted July 31, 2017 in From the Experts.
Bank Director.com recently published an article by Jack Milligan, Editor-in-Chief for Bank Director Magazine,”When It Comes to Core Conversions, Look Before You Leap” (Link Below) which features helpful information for financial institutions faced with choosing a core provider from Steve Heckard, Senior Consultant, Technology Solutions, ProBank Austin.
Cumberland Bancorp (Clarksville, TN) and Southeastern Bancorp (Dickson, TN) Announce Plans to Merge
Announced on July 21, 2017 – Christopher L. Hargrove, lead advisor.
CRE Guidance: Could Require more Expertise/Equity/Examination/Experience/Energy/Effective oversite
Posted July 24, 2017 by Michael M. Moran in From the Experts.
Quite possibly, all or most of the above will apply as we take a slightly tongue-in-cheek spin on one of the industry’s better-known acronyms, and the accompanying regulatory guidance that likely becomes elevated in future exams. In our February post, Do the CCAR Scenarios Signal Regulatory Focus? (February 16, 2017 – link below), we expressed the belief that the annual CCAR and DFAST process might foretell potential regulatory “hot buttons” and/or primary areas of focus for the banking sector.
We All Have Standards, Right?
Posted June 28, 2017 by Stephen D. Heckard in From the Experts.
Each one of us has our own set of standards, what we understand to be acceptable and what is not acceptable. Standards define a minimum of acceptable behavior and how we live our lives. In today’s Trends in Technology blog, “We All Have Standards, Right?” Steve Heckard asks, “is your bank protected by contractually-defined standards for technology services?” For every contracted technology service, there should be well- defined standards of minimally acceptable performance.
The Board’s Vital Role in Lending
Posted June 27, 2017 by Vincent Van Nevel.
We have all heard this mantra time and again. “The board is responsible for safely directing the business and affairs of the institution in the best interest of shareholders, customers, the community, and in accord with the law.”
Morris to Host Western Independent Bankers’ WIBinar on June 27
Posted June 26, 2017 by Jeffrey L. Morris.
On Tuesday, June 27 at 10 a.m. (PST), Jeff Morris, Managing Director of ProBank Austin, will present a WIBinar on “The Seven Secrets of Consistently High Performing Community Banks” to members of the Western Independent Bankers Association. WIB serves members in 13 states including Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming.
Jeff Morris Addresses Virginia Bankers Association Annual Convention
Posted June 16, 2017 by Jeffrey L. Morris.
Jeff Morris, Managing Director of Financial Management at ProBank Austin, addressed the Virginia Bankers Association at its 124th annual convention held at The Homestead in Hot Springs, Virginia, June 18-24. Jeff’s breakout presentation was on “The Seven Secrets of Consistently High Performing Community Banks.” Jeff discussed how several key features are consistent among high performing community banks – one being the critical role of operating efficiency, other traits coincide with and solidify a bank’s long-term ability to provide consistent high value to shareholders, directors, consumers and employees. A copy of his presentation is linked below.
CECL: ONE YEAR LATER
Submitted by Adam Davis, June 13, 2017.
One year ago, on June 16, 2016, the Financial Accounting Standards Board issued ASU No. 2016-13 “Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments”, which introduced the current expected credit loss methodology for establishing allowances for credit losses. In the banking industry we have come to know this now by “CECL”. As a banker, you may be on your way to developing a plan or you may be like many and wondering when and how you should start.
There has to be a Better Way
Posted May 24, 2017 by Michael M. Moran in From the Experts.
The Dodd-Frank Act became public law in the 111th Congress nearly seven years ago. Its objective, as the country moved through the Financial Crisis and the devastating effects of the Great Recession, was primarily four-fold:
-Promote the financial stability of the United States by improving accountability and transparency in the financial system
-End “Too Big to Fail”
-Protect the American taxpayer by ending bailouts
-Protect consumers from abusive financial services practices
PROBANK AUSTIN TRANSACTION ANNOUNCEMENT: Doolin Security Savings Bank to Affiliate with First Mutual Holding Company
ProBank Austin Provided Advisory Assistance to First Mutual Holding Company
Lakewood, Ohio-based First Mutual Holding Company (“FMHC”), the largest member-owned mutual holding company of its kind in the Midwest ($1.7 billion) announced that New Martinsville, West Virginia-based Doolin Security Savings Bank, FSB (“Doolin”) ($48 million) has agreed to affiliate with FMHC, pending approval of regulatory agencies and of voting members of Doolin.
The Cost of Saying Goodbye!
Submitted by Stephen D. Heckard, May 16, 2017
Two years ago, I was asked to review data processing contracts for a small bank to determine departure costs as part of a potential acquisition. We have a very active Investment Banking Division that provides assistance to banks looking to acquire and banks looking to be acquired. In either case from time-to-time, I am asked to provide estimates for terminating processing contracts and deconversion charges. I would like to share with you two recent examples regarding terminating processing contracts.
Contracts – It’s All About the Fine Print!
Submitted by Stephen D. Heckard, April 26, 2017
I have a recurring nightmare that I will come back in my next life to practice contract law. I do not have a law degree, so hopefully that will minimize the chances. However, reviewing contracts is a significant part of my everyday duties, whether managing a core vendor evaluation or renewing a contract with an existing vendor. Since ProBank Austin has a very active Investment Banking Division, from time-to-time, I review client contracts or a target institution’s contracts to determine departure costs if acquired. My assignment is to specifically review a departure from existing processing agreements.
Has March Madness Led to April Anxiety?
Submitted by Michael M. Moran, April, 2017
A few months back, coming off the results of the Presidential election, we opined on the seemingly rocket-fueled rally in bank stocks. At the time, we posited the following as probable/potential catalysts underpinning the significant positive move in the sector:
Meaningful tax reform – might rates drop from approximately 35% to 25% or lower?
Fintech – Be Current and Cognizant!
Submitted by Stephen D. Heckard, April 5, 2017
This blog concludes the Trends in Technology series on fintech, although I do plan on returning to the subject whenever I encounter a fintech subject that I think should be expanded upon. Each day, I invest approximately one hour reviewing email and other resources on fintech. It is possible that in the coming weeks something on fintech will catch my eye and become the subject of a future blog. We will see.
And the Winner is…?
Submitted by Michael M. Moran, March 5, 2017
And no, I have not been handed the wrong envelope. Nor is this the analogous case of an unheralded #16 Seed knocking off a dominant #1 blue-blood in the NCAA basketball tournament that has become “March Madness” – shocking, but likely short-lived. As the chart below reflects, bank stock prices literally came to life after the events of November 8, fueled by expectations of tax cuts, regulatory relief, pro-growth sentiment in D.C., and a favorable interest rate environment. And while the run since the Election has been nothing shy of staggering, seemingly prevailing potential headwinds and countervailing prospective tailwinds make for an interesting environment as we sit here today.
PROBANK AUSTIN TRANSACTION ANNOUNCEMENT: Central Bancompany Completes Acquisition of Bank Star One
ProBank Austin Served as Financial Advisor to Bank Star One
Central Bancompany, Inc., Jefferson City, Missouri, announced that it has completed the acquisition of Bank Star One, Fulton, Missouri. The acquisition was announced on August 19, 2016 and closed on February 23, 2017.
Fintech – A Few Additional Steps to Prepare for Fintech Disruption
Submitted by Stephen D. Heckard, March 6, 2017
Card fraud has been a vexing problem for all institutions. Recent fintech developments may begin to reduce that by increasing the authentication of the payee. One very intriguing method of authentication for card purchases is “selfie pay.” It is exactly as it sounds. A picture of the payee’s face is taken at time of purchase and is compared to a stored picture for verification. Presumably bad hair days won’t create a problem. MasterCard successfully tested this with First Tech Federal Credit Union last year and now is rolling it out in Europe.
PROBANK AUSTIN TRANSACTION ANNOUNCEMENT: First Commonwealth Bank and First Guaranty Bank Agree to Merge
Submitted on February 28, 2017 – ProBank Austin Announces Second M&A Deal of 2017
February 23, 2017 – First Commonwealth Bank, Prestonsburg, Kentucky, announced its agreement to merge with First Guaranty Bank, Martin, Kentucky (press release). The definitive agreement, which is subject to customary regulatory approval, has been approved by the Boards of both banks. Financial terms of the transaction were not disclosed. It is anticipated that the merger of the banks could occur during the second quarter of this year.
Fintech – A Few Additional Steps to Prepare for Fintech Disruption
Submitted by Stephen D. Heckard, February 21, 2017
In my blog, “Preparing for Fintech Distruption” I suggested two steps in preparing for the potential impact of fintech on community banks. These are two significant steps, ensuring that your Board is aware of this potential and discussing what alternative your core vendor can provide. However, there is much more that you can and should do to embrace fintech. Waiting until your bank feels the effects of disruption may be too late to effectively react.
First Merchants Corporation (Muncie, IN) to Acquire Independent Alliance Banks (Fort Wayne, IN)
Submitted on February 17, 2017 – ProBank Austin Served as Exclusive Financial Advisor to Independent Alliance Banks, Inc.
(Muncie, In. and Fort Wayne, In., February 17, 2017) First Merchants Corporation (NASDAQ: FRME) and Independent Alliance Banks, Inc. (OTCQX: IALB)(IAB) today announced they have executed a definitive agreement whereby IAB will merge with and into First Merchants, and its wholly owned bank subsidiary, iAB Financial Bank (iAB), will merge with and into First Merchants Bank.
Do the CCAR Scenarios Signal Regulatory Focus?
Submitted by Michael M. Moran, February 16, 2017
Do the CCAR (Comprehensive Capital Analysis and Review) scenarios signal regulatory focus? Put another way have preliminary indications about regulatory concern over developing CRE concentrations been subtly reinforced in this year’s stress scenarios? Some folks, particularly my family, might accuse me of probably diving a little too deep into numbers at times.
2017 Community Bank Budget Review
Submitted by Jeffrey L. Morris, February 9, 2017
At ProBank Austin, we are always curious at this time of year to find out what’s on the minds of our community bank clients, and in particular, to better understand their plans and goals for the coming year.
Fintech – Are APIs in Your Future
Submitted by Steve Heckard, February 8, 2017
Application Program Interface (API) technology is a hot topic when discussing fintech. Today’s Trends in Technology blog, Fintech – Are APIs in Your Future?, defines API technology and explores the positive and negative applications that affect the banking industry.
The Changing Role of the Compensation Committee of the Board of Directors in Community Banks
Submitted by Jon Doukas, April 12, 2016
Introduction. Traditionally, most executive compensation decisions have been handled at the December meeting of the board of directors, and these decisions were based on limited information and the board’s subjective judgment. However, executive compensation has become more complex. The passage of the FDIC Improvement Act of 1991 (FDICIA), Dodd-Frank Wall Street Reform Consumer Protection Act, and Securities and Exchange Commission Regulations, regarding executive pay communications to stockholders, have made compensation procedures and decisions more challenging. Media coverage and stockholder interest have also increased in recent years. The result has been the need to develop a more formalized approach to the institution’ total compensation programs.
Working the Appraisal
– and Playing the Numbers
Submitted by Ann Scott, April 4, 2016
If loan underwriting and cash flow analysis are the main course of a loan, appraisals are typically considered a part of the appetizer. Actually, they’re the burgundy to the beef, the Alfredo to the fettuccine, the mint to the julep. It’s up to the appraisal reviewer to take a close look at the numbers. Do the rents used by the appraiser match the most recent Tax Return or FYE numbers? What about the expenses? Did the appraiser use a “market percentage” or the actual expenses indicated by the financial information?
– Not Just Minutiae
Submitted by Ann Scott, March 14, 2016
Appraisals contain a lot of data. The information can be ignored or it can be viewed with an eye towards usefulness. Sometimes the untrained eye will gloss over details that are critical to a loan structure. Following are just a few items that can be critical to a lending decision.
Risk Management and Strategic Planning
– A Long Courtship
Submitted by Vince Van Nevel on March 10, 2016
Talk about risk management! Our neighborhood men’s group half-jokingly volunteered a friend, recently retired from the Air Force with combat “tours” in the Middle East, for a project some thought was a bit risky, declaring he was a risk taker. He quickly corrected us stating, in the military the whole idea is to identify risks in your mission and then make plans to minimize them while still accomplishing your goal with a highly trained and disciplined team. If the risk assessment presented too much risk they may scrap the mission and/or find alternative strategies to achieve their objective.
C&I Lending Trends 2015
Submitted by Vince Van Nevel on February 23, 2016
Red Sky at Morning, Sailors Take Warning
For the first time ever, total outstanding commercial & industrial loans exceed total 1-4 family first lien loans, and stand at a record $1.842 trillion as of December 31, 2015. Total 1-4 family first lien loans stood at $1.836 trillion. If this was a horse race, C&I loans won by a nose! However, there may be a storm just over the horizon.
Many years ago when I lived in Chicago working for the OCC, I was certified to sail 30 foot sailboats on Lake Michigan. That is when I first heard of the rhyming weather rules of thumb, the other being “red sky at night, sailors delight.” The “on the water” portion of the certification was primarily spent learning how to depart from and return to the dock without destroying the boat. They wanted to know we could captain the ship safely and that we knew what we were doing; their version of risk management.