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WINTER • ADVOCACY AWARD WINNER• CSBS AND WOMEN IN BANKING RECOGNITION IN THIS EDITION
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PA Bankers Association » Winter 2024 3thisISSUEIN EVERY ISSUEFEATURES6 Chairman’s Insights8 From the CEO to the CEO10 Ten on Page Ten12 Community Corner20 Recognition Round-Up26 Government Relations30 A Look Ahead32 Vendor Articles16 2025 CSBS Competition Details18 Workforce Initiative: College Interns37 Chair's ChallengeWINTER • ADVOCACY AWARD WINNER• CSBS AND WOMEN IN BANKING RECOGNITION IN THIS EDITIONON THE COVERBRINGING TIMELY NEWS AND INFORMATION TO THE MEMBERSHIP OF THE PA BANKERS1318 CMYCMMYCYCMYK240219_Snodgrass_Full-Page-Ads_Why-To-Why-Not_Revised_2024_v6.pdf 51 2/19/24 12:18 PM
4 » PA Bankers Association pabankers.com800.937.2257 www.GoBaker.com Oklahoma City, OK | Austin, TX | Long Island, NY | Salt Lake City, UT | Springfield, IL | Member: FINRA and SIPC*The Baker Group LP is the sole authorized distributor for the products and services developed and provided by The Baker Group Software Solutions, Inc.The Baker Group’s Strategic ServicesFixed Income Investing• Strategic security selection process• Full range of investment sectors— Treasuries and agencies— Agency mortgage backed securities and CMOs— Municipal bonds— Negotiable CDsRegulatory Support• Policy review and development• Full exam prep and support• Ongoing education and training for board and ALCOBaker Loan Solutions• Loan participations and sales across many asset classes• Enhance the performance of your loan portfolio• Improve liquidity while reducing concentration risk issuesBaker Funding Solutions• Fast access to intermediate and long-term deposits• No risk of core deposit cannibalization• Increased eciency: single certificate per maturity• No collateral required• No risk of early withdrawalFinancial Strategies Group• Decades of experience measuring, monitoring, and managing risk• Develop, implement, and update custom financial strategies• Specific focus on executable strategies with step-by-step guidance• Ability to serve client needs as a “C-Suite in a box”Education• Combination of timely topics and fundamental concepts• Seminars and speaking events throughout the U.S.• Quarterly webinars• Client-specific training and educationMunicipal Credit Analysis • Pre-purchase and post-purchase credit analysis• Regulatory education• Monthly Reporting• Ratings change notifications• Individual credit monitoringThe Baker Group’s Software SolutionsAsset Liability Management – Interest Rate Risk Monitor (IRRM®)• Full regulatory and strategic support• No binding contracts• Easy-to-understand reporting• Foundation for improved balance sheet management and performanceBond Accounting – Baker Bond Accounting® (BBA)• Executive summary and management reports• Reduces accounting and regulatory burdens• Current and historical files available via internet/emailInvestment Analysis – Advanced Portfolio Monitor (APM®)• Accurately measure and manage your portfolio’s risk profile• Easy-to-read cashflow and performance reports• Includes all the best practice stress tests• Ability to simulate “what-if” scenarios before transactions take placeSolutions As UniqueAs Your BankTo find out how The Baker Group can assist your institution in defining and meeting its financial objectives, call your Baker representative or Charles Amis at 888.333.8208, or Todd Hardberger at 844.213.0489.Since 1979, we’ve helped our clients improve decision-making, manage interest rate risk, and maximize overall balance sheet performance. The Baker approach utilizes software and products developed by Baker’s Software Solutions* combined with the firm’s knowledge, experience, and advice. Our platform was developed to oer solutions that cover the entire balance sheet. We welcome the opportunity to discuss any of our services in more detail with you and your management team.
PA Bankers Association » Winter 2024 5PA Bankers STAFF DIRECTORYGeneral Number (717) 255-6900PA Bankers AssociationJill A. Ametrano, Registrar and Records Coordinator jillametrano@pabankers.com | (717) 255-6927Lisa R. Brandt, Legal and Policy Coordinator lbrandt@pabankers.com | (717) 255-6936J. Duncan Campbell III, President & Chief Executive Ocer dcampbell@pabankers.com | (717) 255-6916Jacqueline A. Catalano, Vice President, Professional Development jcatalano@pabankers.com | (717) 255-6939Amy L. Doyle, Communications and Government Aairs Coordinator adoyle@pabankers.com | (717) 255-6937Connie A. Ferraro, Director, Information Technology cferraro@pabankers.com | (717) 255-6921Michelle L. Henry, Administrative Assistant, Member Engagement & Development mhenry@pabankers.com | (717) 255-6900Sara E. Hocker, Director of Marketing and Communications shocker@pabankers.com | (717) 255-6912Annette M. Moshgat, Director, Finance amoshgat@pabankers.com | (717) 255-6938Louise A. Rynd, Esq., General Counsel lrynd@pabankers.com | (717) 255-6935Michelle L. Staton, Chief Operating Ocer mstaton@pabankers.com | (717) 255-6923Marilyn M. Wisniewski, Professional Development Assistant mwisniewski@pabankers.com | (717) 255-6934 PA Bankers Services CorporationTiani A. Chambers, Director, PA Bankers Services Corporation tchambers@pabankers.com | (717) 255-6928Cynthia L. Wallett, President, PA Bankers Services Corporation cwallett@pabankers.com | (717) 255-6913Wayne R. Whipple, Vice President, Business Development wwhipple@pabankers.com | (717) 255-6925magazineSTAFF Managing Sara E. Hocker Editor Editorial J. Duncan Campbell III Advisors Jacqueline A. Catalano Tiani A. Chambers Louise A. Rynd Michelle L. Staton Cynthia L. Wallett PA Bankers Services Corporation Board of Directors and Ocers Chair Tracy E. Watkins, SPHR Secretary Ginger G. Kunkel Treasurer J. Duncan Campbell III Directors Janak M. Amin Mary G. Cummings, Esq Brett D. Fulk John C. Gill Andrew Linn Brendan J. McGill John H. Montgomery Michael D. Peduzzi Brian J. Richardson Jerey S. Stauer Joseph R. TothAddress Correspondence to: paBanker Magazine c/o Pennsylvania Bankers Association 3897 N. Front St., Harrisburg, PA 17110 Tel. (717) 255-6912 Email: shocker@pabankers.compaBanker Magazine is published four times a year by the PA Bankers Services Corporation (Services Corporation), a subsidiary of the Pennsylvania Bankers Association (PA Bankers). The Association serves Pennsylvania banks and nancial institutions with educational programs, member services and represents members on the state and federal level. Since 1895, PA Bankers continuously worked to be the premier nancial services organization supporting a diversied membership through volunteer participation, a knowledgeable sta, state of the art technology and a commitment to excellence.paBanker Magazine is the ocial publication of PA Bankers.EditorialThe opinions expressed in articles by authors other than Association sta and ocers are the responsibility of the authors only and not necessarily those of the PA Bankers, the Services Corporation or its members. All articles, unless otherwise notied, have been written by paBanker Magazine sta. Questions and comments should be addressed to the Managing Editor. PA Bankers members may reproduce any non-commercial part of this publication with verbal permission from the editor. All others must receive written permission from the editor prior to reproduction of any part of this publication. Copyright ©2003 PA Bankers Services Corporation. All Rights Reserved.Designed by: Hot Frog Print & MediaSponsored by:
6 » PA Bankers Association pabankers.comne of the things that I have learned over my career as a banker is the critical importance of industry advocacy. I have been in banking for 30+ years, and honestly, it wasn’t until recently that I fully understood my responsibility as a community bank CEO to commit myself and my bank to advocating for our industry in Harrisburg and Washington. I always thought that someone else would take care of that “advocacy thing” for me and our industry. Well, I’m here to tell you that I was wrong in that thinking. We have to be that someone else—each and every one of us— to encourage pro-growth policies that will allow the banking industry to provide more effective service to our customers and protect against harmful policies that will inhibit our ability to serve our communities. If we don’t advocate for ourselves, no one will do it for us.And, so when we get into policy disputes over issues such as interchange, as we currently are embroiled in with the retailers at both the federal and state levels,; or the unfair tax treatment of other financial service providers, such as credit unions and farm credit, we can’t look to others to carry our water—we have to show up, and we have to show up in force. Otherwise, we only have ourselves to blame for the consequences of inaction.Take the credit unions for example. When the country’s bankers come to Washington in the springtime for the ABA Washington Summit, our industry typically sends about 1,000 bankers to this advocacy fly-in. Well, the credit unions send 6,000. Let that settle in a bit, and maybe that explains why they have protected their tax-exempt status for so long. For them, it’s survival. They show up because they must. We need to adopt that mentality in the banking industry. The ABA Washington Summit is scheduled for March 17-19, and I hope that you will join me there. This trip is one way that I would encourage you and your bankers to get involved in as part of the industry’s advocacy effort, as we will go to the Capitol to educate Pennsylvania’s Members of Congress on the issues that matter most to us.There are other ways as well. Every fall, PA Bankers organizes a regulatory visit to Washington where the commonwealth’s bankers have the opportunity to meet with senior leaders of our federal regulators. This past October, we met with Governor Michelle “Miki” Bowman from the Federal Reserve, Director Jonathan McKernan from the FDIC and other leaders of the federal regulatory community. These are impactful meetings that afford us the ability to present the actual impact of federal regulation on our customers. The 2025 regulatory visit will occur on Oct. 2-3, and again, I hope you will make the time to add your voice.You’re also invited to advocate with state legislators here in PA, as we convene our bankers in Harrisburg for an annual PA Bankers Day at the State Capitol, typically leading into the June budget season. Look for more details in the coming weeks about our 2025 Bankers Day, as we have tentatively identified Monday, June 2 as the date for this year’s event.Specific to our political advocacy, so much of our ability to do our jobs comes down to who represents us in Congress and the state legislature. Having representatives who understand banking and appreciate our mission to serve our customers and communities, adhering to common sense regulation and legislation, makes such a difference. If you haven’t supported the PA Bankers Public Affairs Committee (PaBPAC), you need to do so (and to be clear, this is not a solicitation for PaBPAC Federal—I need to state that for the record). Contributions to PaBPAC support those candidates for office who support the banking industry. We have a very successful PAC, but it can be even more successful. I believe we must all commit to supporting PaBPAC in the strongest way possible in an effort to elect pro-banking, pro-business, bipartisan policymakers.One final way to lend your voice to PA Bankers’ advocacy efforts is through chairman’sINSIGHTSThe Importance of AdvocacyRANDALL E. BLACKPresident & Chief Executive OfficerFirst Citizens Community BankO
PA Bankers Association » Winter 2024 7specific issue-related calls to action. From time to time, the association will encourage bankers to add their opposition or support to important legislation. This is an easy way to engage for the good of the industry, and so I would urge you to stay aware of these opportunities through the association’s Advocacy & Insights weekly digital newsletter. Currently, there are active calls to action on issues such as opposing the Credit Card Competition Act (interchange), supporting the SAFE Act (safe harbor for cannabis banking) and supporting the Access to Credit for Rural Economies (ACRE).Let me take a moment on ACRE, as it is personal to me as a 30+-year banker but also as a 40+-year farmer. ACRE will lower the cost of making a loan backed by agricultural real estate, enhance competition between lenders for agricultural and rural housing loans, and help expand access to low-cost credit in rural America. ACRE would accomplish these important goals by excluding from gross income the interest received by a qualified lender on all loans secured by farm real estate and aquaculture facilities. Additionally, ACRE would exclude from gross income the interest received by a qualified lender on home mortgage loans of $750,000 or less in rural communities of no more than 2,500 people. This tax exemption for interest-income on agricultural loans has been an effective tool to support rural lending by government-sponsored enterprises such as Farm Credit. ACRE would simply expand that tax treatment to all federally insured banks, thereby increasing loan supply and decreasing costs for borrowers. The Trump Administration is expected to seek tax legislation early in the upcoming session, so now is the time to contact PA’s Senators and your congressional representative, using the e-contact tool posted here. Please urge your Members of Congress to co-sponsor ACRE when it is reintroduced in the 119th Session of Congress.So, I think you can tell that I drank the advocacy Kool-Aid. It’s never too late, and I encourage you to get involved. I launched the Chair’s Challenge earlier this year to incentivize the membership’s engagement with the association—through PA Bankers training, the PA Bankers Services Corporation’s products/services and overall industry advocacy. You can earn Bankers Bucks for all of these critical association functions, including PA Bankers Day at the State Capitol and the Washington Summit and Regulatory Visit, just by showing up. I hope you will.We have 77,000 bankers in Pennsylvania. Think about the powerful force we can be if we are together. There is no doubt that we are stronger together. Remember, no one else is going to tell our story for us—it’s our responsibility, and I hope you will learn from me that it is never too late to take this responsibility seriously. Thank you,Randy BENEFITS FROM ACREPENNSYLVANIAThe Access to Credit for our Rural Economy (ACRE) Act (H.R. 3139/ S. 2371) is a bipartisan approach to help lower interest rates for rural borrowers. By expanding an existing tax incentive to all rural lenders, ACRE would increase competition and lower the cost of credit on rural mortgages and farm real estate loans. In Pennsylvania:HOW*based on ABA estimatesSecureAmericanOpportunity.com/acre $19,899,043 total farm real estate savings per year $8,246,181 total rural mortgage savings per year 1,372,475 people live in a community that would qualify for mortgage interest savings under ACRE 49,053 farms would qualify for interest savings on loans secured by real estateTOTAL ESTIMATED SAVINGS $28,145,224
8 » PA Bankers Association pabankers.coms we turn the page on 2024, I’m curious to know what 2025 will bring for our industry. I’m sure you are as well.What do we see on the policy landscape?Well, for starters at the federal level, we know that there will be new leadership at the FDIC, the OCC and the CFPB. Chair Gruenberg, Comptroller Hsu and Director Chopra will yield their agency supervision to new leaders to be nominated by President-elect Trump. The same is expected at the FHFA, the supervisory agency for the Federal Home Loan Banks. With new leadership, Congress could consider recently enacted regulations that it believes exceed statutory intent. An example is the Consumer Financial Protection Bureau’s “open banking” rule issued under Section 1033 of the Dodd-Frank Act. Whether other proposed regulations will continue toward implementation or receive reconsideration depends upon the personnel who will lead the agencies under the new Administration. President-elect Trump has voiced opposition to burdensome regulations, and so we hope that he will appoint agency heads who share his regulatory mindset. The future of agency regulations will also depend upon who leads the congressional committees which oversee the federal regulatory agencies.In the Senate, Senator Tim Scott (R-SC), currently the Ranking Member of the U.S. Senate Banking Committee, is expected to assume the chair in January. Senator Elizabeth Warren (D-MA) is expected to become the Committee’s Ranking Member. Newly elected Pennsylvania Senator Dave McCormick would be a welcome addition to that Committee. PaBPAC was pleased to recommend that BankPac support Dave’s campaign in light of his pro-business/pro-banking positions. We look forward to working with him when he joins the U.S. Senate. With a 53-47 Republican advantage, it will be interesting to see how quickly the Senate moves to confirm the President’s nominees, as well as his policy agenda.There will be a razor-thin Republican majority in the U.S. House of Representatives, which gets thinner with every member of Congress recruited into the Trump Administration. There is a four-person competition to lead the House Financial Services Committee, including Reps. French Hill (R-AR) and Andy Barr (R-KY). Both of these members of Congress have extensive experience on issues confronting the industry, and any of the four candidates would be an effective leader of the committee. As it relates to the full House, the Pennsylvania delegation will welcome two new members, both Republicans who successfully defeated incumbents. In Pennsylvania’s 8th congressional district (Northeast PA), BankPac-supported challenger Rob Bresnahan defeated incumbent Congressman Matt Cartwright; and in Pennsylvania’s 7th congressional district (Lehigh Valley), PA State Representative Ryan Mackenzie unseated Democrat incumbent Susan Wild. With these two new members, Pennsylvania’s congressional delegation will consist of 10 Republican and 7 Democratic members. I would like to point out that Rob Bresnahan’s grandmother was a founding member of Landmark Community Bank, originally headquartered in Pittston before being acquired by Fidelity Deposit & Discount Bank in 2021.At the state level, as the saying goes: the more things change, the more they stay the same. The 25-26 state legislature will convene in Harrisburg on Jan. 7 with the same chamber composition with which they ended the 23-24 session. Republicans will from the CEO to the CEODUNCAN CAMPBELLPresident & CEO PA Bankers AssociationAWhat to Expect in 2025
PA Bankers Association » Winter 2024 9hold a 28-22 majority in the PA Senate, while Democrats will hold a tight 102-101 majority in the state House. No incumbent member of the state House lost re-election. Only one incumbent member of the PA Senate (Senator Jimmy Dillon, D-Philadelphia) will not be re-seated. This all means that legislation will need to be bipartisan to advance through both chambers of the state legislature.One issue of interest to our industry that will re-emerge in the next state legislative session is elder financial exploitation prevention and response. In the recently concluded session, we advocated for legislation that would have allowed banks to delay or deny a suspected fraudulent transaction that was intended for an older adult customer with immunity. This legislation (HB 2064) was amended to expose financial institutions to significant penalties and damages if they did not stop a transaction later proved to be fraudulent and limit their immunity in these situations. PA Bankers looks forward to continuing our work with the General Assembly and the Governor’s Administration, as well as incoming Attorney General Dave Sunday and his staff, in an effort to collaboratively address this very important issue.We can expect much to happen in 2025. Other issues, such as Federal Reserve interest rate changes and additional consolidation of the industry, are on the horizon, and new issues that we are not even thinking about at this time will likely arise. What can we expect? No one fully knows, but one thing I believe to be true is that the banking industry is resilient and will handle whatever difficult situation comes our way with competence, compassion and success. We must stay together as an industry, as we are stronger together. The PA Bankers Association is here to offer our assistance in whatever ways possible to ensure that the commonwealth’s banking industry continues to deliver sustaining economic support to its customers and communities.Wishing you all a prosperous and productive 2025. We will be walking right beside you every step of the way. Thank you for all that you do!Sincerely,Duncan
10 » PA Bankers Association pabankers.comtenONpageTEN1021987643Similar to 100–400 college-level courses in areas of banking and commercial lending, PA Bankers’ schools offer a systematic curriculum approach to professional development. Haven’t attended a PA Bankers School? Hear from fellow bankers on why you should attend next year.Attending the PA Bankers School of Banking was an incredibly positive and transformative experience for me. The program provided a comprehensive understanding of the banking industry, seamlessly blending theoretical knowledge with practical applications. The expert instructors brought real-world insights that deepened my grasp of core banking principles, financial management, and leadership strategies.One of the program's highlights was the opportunity to network with industry professionals and peers, building valuable connections that will significantly benefit my career. The hands-on exercises and collaborative learning environment made complex concepts engaging and accessible.I left the program feeling more confident and empowered to tackle challenges within the banking sector, equipped with actionable skills that I could apply immediately in my role. I wholeheartedly recommend the PA Bankers School of Banking to anyone looking to take their career in the financial industry to the next level.Kara Chludzinski, AVP, When I first joined First Keystone Community Bank, I was excited to hear that they’re members of PA Bankers. I made it a priority to begin my PA Bankers experience in my second year with my employer. This past summer, I enrolled at the School of Banking, a week-long program tailored to enhance your knowledge in banking with courses that focus on the primary areas of banking. The speakers were knowledgeable in the subjects they lectured, but they also shared their experiences in the industry. My favorite part of the program was meeting people from all walks of life and learning how they contribute to their bank and community. Overall, the School of Banking was an inspiring experience that is currently shaping my personal and professional growth. I took back learning different perspectives and approaches from our team group meetings as my highlight from the program.Sharon A. Warchol, Dick Grafmyre,5the PA Bankers Schools
PA Bankers Association » Winter 2024 111098764As soon as I learned about PA Bankers Advanced School of Banking, I knew it was something that I wanted to be a part of. At The Dime Bank, being chosen to be a part of this program is seen as an honor and privilege. It has been more difficult and rewarding than I ever imagined, and I am grateful for all of knowledge, growth, and experiences that I have been able to share with fellow students, professors, and advisors over the past three years. I am a firm believer that the best way to grow is to step outside of your comfort zone, and this program has pushed me to do that time and time again. Working together and learning with other banking professionals, especially during the Bankexec simulation, has been an invaluable eye-opening experience. I will cherish this opportunity and knowledge for the rest of my career.Viktoria Beiter, My facilitation experience has been both fun and rewarding. The students are engaged and it’s a great experience as a facilitator creating opportunities for them to learn and have some fun while doing it. It’s a ‘feel good’ to contribute to building our next generation of Pennsylvania bankers!Ed Martel, ACBP, As a new university professor teaching a course on banking, I was asked if I would like to teach at a banking school. That was over 30 years ago, and over those years I have taught at eight national or state schools of banking, including PA Bankers’ School of Banking and Advanced School of Banking. My overall experience has been very positive, and my association with PA Bankers’ schools has been particularly rewarding. My greatest satisfaction has been watching former students’ progress in management, becoming CFOs. HR directors, the head of marketing and even CEOs.Jim Clarke, I have greatly enjoyed the opportunity to not only attend the schools, but now to be a director and being able to use the knowledge I gained to help others advance in their banking careers is truly the most rewarding. PA Bankers offers great opportunities for continued education and networking that have helped me become a better banker as well as leader within my organization. Being a director of the Advanced Banking School is about helping others in the industry continue to focus on their development and ensure that they get the most out of the education being provided each year.Daniel Wagner, It was a true privilege to stand before our 2024 Advanced School of Banking class as the Dr. Philip O. Benham, Jr. Achievement Award recipient. I remain deeply grateful for this recognition and the opportunities it represents. I’m especially thankful to Kish Bank for investing in a consistent pipeline of Advanced School of Banking attendees over several decades. The resulting organizational growth and development speak for themselves.In my remarks to fellow graduates, I shared: ‘...we meet our industry daily at the intersection of what was, what is, and what could be. Navigating through the past and present, we find opportunities to make a lasting impact on our clients, colleagues, and communities. Sometimes this means simply convincing a 40-year veteran that they don’t need to print every email. Aspirationally, it means introducing, supporting, or leading paradigm-shifting changes aimed at sustaining community banking well beyond our years. This can be both personally and organizationally energizing.’Thanks in large part to this foundational program, I know all of us are now better equipped to deliver as we return to our institutions.Mark Yerger, SVP, Teaching tomorrow’s banking leaders at the Advanced School of Banking is the greatest gift banking has given to me.Joseph Major, 5My experience at the PA Bankers School of Banking was nothing short of amazing! My favorite thing about the entire week was the instructors. Each one brought different experiences, expertise, knowledge, and styles of teaching that made every day fresh and exciting. It’s a great opportunity for both new and experienced bankers looking to increase their knowledge. I would highly recommend this course for anyone looking to become a more well-rounded banker.Jonathan Smith,
12 » PA Bankers Association pabankers.comcommunityCORNERAmeriServ BankBrentwood BankEphrata National BankF&M TrustForty-seven military service veterans received much-needed travel backpacks and essential life-style items thanks to the AmeriServ Bank Cares Program. The backpacks were filled with items donated by its employees and were collected/distributed through a partnership with Veteran’s Leadership Program. Volunteers from Brentwood Bank spent a day working with Rebuilding Together Pittsburgh, upgrading a homeowner's front yard, porch, deck and garage in Pittsburgh's Lincoln-Lemington neighborhood.Ephrata National Bank participated in Junior Achievement's Putt for Education, held by Junior Achievement of South Central PA, who supports financial education in the community.More than 250 employees of F&M Trust loaded approximately 300 backpacks with essentials for local homeless and at-risk veterans, as part of Totes for Hope, the American Red Cross of Greater Pennsylvania’s effort to support homeless, hospitalized, at-risk and resource deprived veterans in the community. The backpacks are provided to VA hospitals, community groups and non-profits to get them into the hands of those who need them.
PA Bankers Association » Winter 2024 13FCCBFirst Resource BankFirst Citizens Community Bank's Cancer Classic Golf Outing raised an incredible $25,000 for the American Cancer Society through the support and generosity of its participants, sponsors and community.First Resource Bank contributed to the Radnor Educational Foundation and the Radnor Memorial Library for their dedication to go above and beyond to ensure bright futures for the children in the community.Jonestown Bank & TrustJonestown Bank & Trust Co. (JBT) donated $5,000 to St. Daniel’s Preschool for the school’s Pre-Kindergarten program to provide scholarship awards to families whose children attend the school.
14 » PA Bankers Association pabankers.comcommunityCORNERJuniata Valley BankPenn Community BankS&T BankJuniata Valley Bank participated in the United Way of Mifflin-Juniata Day of Caring, where team members volunteered at Fame EMS and the Boy Scouts in Reedsville, Pa.Penn Community Bank has awarded a $25,000 grant to Willow Grove Community Development Corporation (WGCDC) to support the expansion of affordable housing options in eastern Montgomery County through their Bridging the Gap Program. The grant will help WGCDC continue its mission of providing quality, affordable rental housing to families across five suburban municipalities.S&T Bank team members participated in an American Heart Association Heart Walk in Lancaster, Pa., raising over $700 in support of the cause.SELECT VENDORS:• DarkDefend Risk Management Solutions, LLCWelcomeNEW TO PA BANKERSAFFILIATE MEMBERS:• 44 Business Capital• Finastra• M2• Property Solutions, Inc.• Zest AIFINANCIAL INSTITUTIONS:• Mid Penn Bank• MCS Bank
PA Bankers Association » Winter 2024 15Somerset Trust CompanyIn cooperation with the Somerset County Foundation for Higher Education and Allegany College of Maryland, Somerset Trust Company announced the continuation of an early college education program, which allows Somerset County high school students to enroll in at least one early college course per semester, at no cost. For the 2024-2025 academic year, Somerset Trust was able to commit over $200K to prepare students for the post-secondary education atmosphere by allowing them to experience college-level classes in smaller, more intimate environments.Do you have hometown happenings that you'd like to share?Send your bank's community news to Amy Doyle for a chance to be featured in paBanker Magazine or on PA Bankers' social media channels and website.
The 2025 CSBS Community Bank Case Study Competition is Underway!The 2025 CSBS Community Bank Case Study Competition is now open for registration! The nationwide academic competition is an opportunity for undergraduate students to partner with local community banks to conduct original case studies on relevant topics.In addition to providing undergraduate students with an excellent opportunity to engage and gain valuable knowledge of the banking industry, the case study competition serves as a platform for community banks to tell their individual stories.2025 Competition Details:Topic: For the 2025 CSBS Community Bank Case Study Competition, teams will be asked to learn about how banks approach interest rate risk and the impact of ination in an eort to gain a better understanding of how community banks are ensuring that they remain safe and resilient nancial pillars of their respective communities. • Deadline for Statements of Interest by Faculty Advisors: Feb. 5, 2025 • Deadline for Student Team Members and Community Partners to Register: March 5, 2025Looking To Become Involved? Contact Michelle Staton today. Visit csbs.org/bankcasestudy for more information.COMMUNITY BANK CASE STUDY COMPETITION 16 » PA Bankers Association pabankers.com
PA Bankers Association » Winter 2024 17HR Consulting Scan to learn more about ouradvisors and services Regulatory Compliance Monitoring + TrainingVulnerability Testing (Internal + External)BSA/AML Model ValidationsBSA/AML ExaminationsRisk Assessment + Gap AnalysisInternal Audit Plans + TestingTrust Department ExamsFraud ExamsInformation Technology ExamsSocial Engineering TestingSOX Documentation/TestingFDICIA Documentation/TestingRecruitment/Retention HR Audits & AssessmentsHR OutsourcingInterim HRSuccession PlanningExecutive SearchExecutive CompensationAffirmative Action Plan PreparationLeadership Coaching and DevelopmentCompensation Studieswww.herbein.com I 610-378-1175Risk Management Empower your executive team and confidently guide your financial institution throughthe intricate world of banking and finance with our premier Risk Management and HRConsulting Services. As a leading CPA advisory firm, Herbein is your partner in ensuringbusiness stability, compliance excellence, and a workplace that attracts top talent. Allowus to expertly navigate the ever-evolving regulatory environment while fostering anelite, motivated workforce you can depend on.A GREAT TEAM SERVING EXTRAORDINARY BANKSQuestions? Contact our team today and learn how we can help with your organizational needs. Debbi Fetter, CFIRS, CISA, CFSA, CRCM, CCSA, CERP – Risk Management Services Laurel Cline – HR Consulting Services James Burke – Consultant
18 » PA Bankers Association pabankers.comworkforceINITIATIVESJobs with good pay and healthbenefitsJob advancement with clearcareer path Global opportunitiesOn-the-job-trainingFuture focused industry growth Banks are highly regulated, whichhelps provide stability andreassurance to employees intimes of economic uncertainty.Why Banking? CAREER OUTLOOK: BANKING INDUSTRYThe future of thebanking industry is you!OverviewIn today's ever-evolving financiallandscape, bankingjobs continue to playa crucial role indriving economicgrowth andsupporting theglobal financialsystem. In partnership withthe PennsylvaniaBankers Association,ShippensburgUniversity’s CareerCenter presents keyindustry insights andfacts about careerpathways in banking. Data & Insights Provided by: Lightcast Q3 2023 Data Set - lightcast.iofinancial services and analysis risk assessmentproblem-solvingcommunicationteamwork + leadershipadaptabilityproduct knowledge sales and marketingTop Quality Skills The banking industry encompasses variousroles, including:Pennsylvania continues to show better thanaverage job growth with 57,485 employeesin PA, compared to the national average foran area this size of 53,246 employees.*GRP is the total value of the goods and servicesproduced in a regional economy that measures theeconomies of counties, metropolitan statistical areas,and some other local areas.$ 1 5 . 6 B I N D U S T R Y T O T A L E A R N I N G S ( 2 0 2 2 ) GRP* Economic ImpactFView the Website TodayPasscode to access the site is PBA2024!Don’t forget about the banking intern website created just for PA Bankers members to use for their talent acquisition and retention needs. The website has intern program development resources, including assistance in creating an intern program and recruiting interns, as well as information about a career and leadership skills academy for all college interns working at member banks statewide. The academy is a comprehensive program designed to equip college interns with the essential skills and leadership capabilities needed to thrive in professional environments. This year's academy will run for nine weeks, June 5 through Aug. 7, so we encourage you to get your interns in today. Need one-on-one assistance? You will find that on the website as well.Getting ready for college interns in 2025?
PA Bankers Association 50 Volume 21.1 | Quarter 1SOMEONE IS MAKING MONEY ON TITLE INSURANCE. IT SHOULD BE YOU.It’s like owning your own title insurance company, only better. PA Bankers Services Corporation – along with Investors Title Insurance Company – will help you become part of a multi-bank owned title insurance agency and share in the profits every time title insurance is written. To learn more, simply give us a call at (717) 255-6925 and we’ll show you how your bank can earn non-interest income from title insurance.
20 » PA Bankers Association pabankers.comrecognitionROUND-UPThrough the Women in Banking Recognition of Excellence Program, we wish to acknowledge rising stars and leaders throughout our industry going the extra mile to promote and inspire women in the workplace to reach their full potential. Each year, the program honors four individual leaders during the annual Women in Banking Conference in the three categories. Anyone (member or non-member) can nominate a candidate, and prior nominees may be re-nominated. Nominations are currently open, and the deadline to nominate your peers is Jan. 24, 2025.CLICK HERE TO NOMINATE YOUR PEERSWOMEN IN BANKING NETWORKNominating CategoriesCelebrating a woman who has achieved success within a leadership role and displays courage, values and ethics, as well as undeniable enthusiasm for the industry, her institution and the community. PATRICIA A. HUSIC WOMAN OF INFLUENCE AWARDCelebrating a woman up to the age of 35 who is making a significant impact in her industry and community, making her ‘one to watch.’ TOMORROW’S PROMISE AWARD(2 awards): Celebrating a seasoned male or female professional at a PA Bankers financial and/or Affiliate Member who continuously promotes and inspires women in the workplace to reach their full potential.CHAMPION(S) FOR WOMEN AWARD
PA Bankers Association » Winter 2024 21The William S. Latoff Advocacy Award recognizes a banker who displays excellence in advocacy as an active policymaker for PA Bankers, an outspoken and successful advocate for the industry and a committed supporter of PaBPAC.Clem currently chairs the association’s Government Relations Policy Committee, serves as vice chair of the Advocacy Committee, is a member of the PA Bankers Board of Directors, and volunteers as a federal contact banker. Previously, he led the association’s federal banker volunteer policy and grassroots advocacy team. Additionally, Clem is an avid supporter of the Pennsylvania Bankers Public Affairs Committee (PaBPAC) and regularly engages with the association’s advocacy events and initiatives.The award honors the late William S. Latoff, former chairman and CEO of DNB First – National Association in Downingtown. Latoff was the chair of the PaBPAC Board of Directors from 2007-10, a PA Bankers Government Relations Policy Committee member, the chairman of the Nominating Advisory Committee of the Federal Reserve Bank of Philadelphia and a representative to the American Bankers Association’s BankPAC Committee. TO THE 2024 WINNER!Clem Rosenberger, IIIPresident & CEONexTier BankWilliam S. Latoff Advocacy Award HONORING EXCELLENCE IN ADVOCACYCgrulis,recognitionROUND-UP
22 » PA Bankers Association pabankers.comrecognitionROUND-UPDiversity, Equity and Inclusion Success Stories and Best PracticesWould you like to share what your bank is doing in the diversity, equity and inclusion space with PA Bankers? Please reach out to Michelle Staton, Chief Operating Officer, mstaton@pabankers.com.Bankers Settlement Services of Southwest PA 3rd QuarterAward WinnerCongratulations to Scott Gottshall of Reliance Bank for being named Bankers Settlement Services of Southwest PA’s 3rd Quarter Award Winner for generating the most loan officer premium referrals. Pictured: Machelle Snare, Agency Operations Officer; Jim Bulger, Agency Manager; and Scott Gottshall, VP/Mortgage Loan Originator III
PA Bankers Association » Winter 2024 23PA BANKERS SERVICES CORPORATIONWayne WhippleVice President, Business Development(717) 255-6925wwhipple@pabankers.comCONTACT INFORMATIONWEBBER ADVISORSBrad WebberMarketing/Sales Manager(814) 695-8066 x4186bwebber@webberadvisors.comTHE BENECON GROUPClaudia Burchstead, CSFSRegional VP of Sales(888) 400-4647cburchstead@benecon.com
24 » PA Bankers Association pabankers.comrecognitionROUND-UP50-YEAR CLUBINDUCTEETHANK YOU FOR YOUR DEDICATED SERVICE TO THE INDUSTRY.As of 11/22/2024LINDA GORDNERRegional Mortgage Lending Officer/VPC&NCgratulatisIs your bank celebrating a charter anniversary? Have your employees been in the banking industry for 30+ years?Contact Michelle Henry to celebrate your achievements in the next paBanker Magazine Recognition Round-Up.RECOGNITION ROUND-UP
PA Bankers Association » Winter 2024 25CCoonnttaacctt KKeenn LLaagguuee aatt Ken Lague at (512) 549-2400 or ken.lague@odpbusiness.com ffoorr mmoorree iinnffoorrmmaattiioonn.. *Free Delivery: Minimum purchase required after discounts and before taxes. Orders outside our local delivery area and most furniture, oversized items, bulk items, cases of bottled water and other beverages, and special order items do not qualify. Non-qualifying orders incur a delivery charge. Delivery fees will be noted prior to purchase. Many orders can be delivered the next business day (between 8:30 a.m. and 5:00 p.m.) if placed online or via phone by 3:00 p.m. or via fax by 1:00 p.m. local time (in most locations). Other restrictions apply. See odpbusiness.com, call 888.263.3423, or ask your account manager for details.ODP and ODP Business Solutions are trademarks of ODP Business Solutions, LLC. © 2024 ODP Business Solutions, LLC. All rights reserved. Your financial institution is committed to serving your customers, associates, and communities. At ODP Business Solutions, we’re endorsed by your association and committed to serving you. Count on us to provide a high-touch service model, reliable supply chain solutions, discounted pricing, and powerful reporting to each of your branches. • More than 1,300 discounted items frequently usedby the banking industry • Free delivery on qualifying orders of $50 or more*• Customize a list of up to 75 additional items to help meet yourspecific objectives• Contract pricing for your associates via ourEmployee Purchase Program • Cost-saving tools, reporting, and bill management• Quarterly business reviewsThis is just a fraction of what we offer. Look to us for industry experience, insight, and support that can help you maximize performance, efficiency, and productivity across every transaction. LLooookkiinngg ttoo ppuutt aa ttrruuee ccoollllaabboorraattoorr iinn yyoouurr ccoorrnneerr?? BBaannkk oonn OODDPP BBuussiinneessss SSoolluuttiioonnssTM..
26 » PA Bankers Association pabankers.comgovernmentRELATIONSootball season is in full swing, and here in the nation’s capital, the home of the Washington Commanders has a new name: Northwest Stadium, the moniker of Virginia-based Northwest Federal Credit Union, which recently inked a multi-year, multi-million-dollar stadium naming deal. If you’re wondering how a credit union—a nonprofit, tax-exempt entity—can afford such a hefty marketing spend, you’d be asking the right question. When Congress passed the Federal Credit Union Act authorizing the creation of federal credit unions, its intention was for these institutions to serve people of modest means within clearly defined communities united by a common bond. But times have changed. Today, many credit unions—in pursuit of endless growth—have dramatically expanded their fields of membership. Northwest—whose marketing budget ballooned by 88% from 2022 to 2023—was founded in 1947 to serve CIA employees. It now offers membership through multiple federal agencies, as well as “hundreds of businesses and community organizations.” Northwest isn’t the only credit union spending top-dollar on marketing to grow membership far beyond its original scope. In fact, several of the largest credit unions now purport their potential membership base to be upwards of 330 million Americans—effectively the entire population of the United States. If credit unions are now empowered to cast a net this wide and compete aggressively for market share with taxpaying institutions, it’s time for policymakers to stop punting the ball on ensuring that these institutions are accountable and transparent in their operations. ABA expressed this view in a recent letter to NCUA Chairman Todd Harper—who has himself questioned whether credit unions should be spending so much on stadium naming deals, when those funds could be better spent supporting members. In addition, there have been several positive policy developments in recent days that suggest a growing appetite in Washington for greater accountability and transparency for the $2.3 trillion credit union industry. One example: In a recent policy statement, the FDIC signaled that it will begin requiring credit unions to provide additional information when applying to acquire an FDIC-insured bank. Credit unions have targeted a total of more than $9 billion in bank assets so far this year, with 18 deals announced in 2024 alone. ABA remains deeply concerned about the increasing number of these types of transactions and the potential tax losses and effects on local communities that accompany them. Regulators should rightfully scrutinize these deals, given that credit unions are not subject to any federal Community Reinvestment Act requirements. Greater accountability is also expected through an upcoming rulemaking on executive compensation transparency from the National Credit Union Administration that would require the disclosure of certain financial information by federal credit unions. Given that credit unions are democratically controlled financial cooperatives, it is essential that their member-owners have greater visibility into how top executives are incentivized relative to these transactions. Regulators are not the only ones taking note—in fact, in just the past year, a total of 80 members of Congress have publicly questioned credit union activities. Taking all these developments into consideration, it seems the time is right to move the chains on credit union accountability. You can count on ABA to continue playing offense on these issues in the months ahead. FIt’s Time to Stop Punting on Credit Union AccountabilityABOUT THE AUTHOR: ROB NICHOLS, PRESIDENT AND CEO, AMERICAN BANKERS ASSOCIATIONEmail Rob at nichols@aba.com.
ennsylvania has the second-largest state legislature in the country with 253 members – 50 senators and 203 representatives. Ours is the largest full-time state legislature.Fifteen new state legislators will begin their terms in Harrisburg in January when the 2025-26 session begins:Senator-elect Joe Picozzi (R-Philadelphia)Rep.-elect Roman Kozak (R-Beaver – part)Rep.-elect Jeremy Shaffer (R-Allegheny – part)Rep.-elect John Inglis (D-Allegheny – part)Rep.-elect Brian Rasel (R-Westmoreland – part)Rep.-elect Josh Bashline (R-Clarion; Armstrong – part)Rep.-elect Scott Barger (R-Huntington – part; Blair – part)Rep.-elect Chad Reichard (R-Franklin – part)PConstituents make the best issue advocates. To that end, PA Bankers is rebuilding its state contact banker program. We hope to enlist at least one banker for each member of the PA General Assembly – especially the new members listed above. As the name implies, the role of a state contact banker is to stay in touch with their assigned state legislator(s) and serve as a trusted resource on financial services issues. This is not a significant time commitment. Meeting with your legislator occasionally – either in their district office or ideally in your bank so your legislator can see how you operate - will help foster a relationship. Attending our Spring Bankers’ Day at the Capitol to visit your senator and representative in their Harrisburg offices will also be helpful. PA Bankers occasionally requests urgent outreach by phone or email on a timely legislative issue.We plan to schedule brief quarterly calls to provide issue updates to those who volunteer for this role, so you will have the support you need. Staff can be reached any time questions arise.You may already have a relationship with your state legislator. If not, a pledge to make their acquaintance and form a relationship is what we seek. If you do not know who represents you in the state Senate and House, you can use the “Find My Legislator” tool in the left column of the General Assembly’s home page. You may choose to engage either with the legislators who represent the legislative district in which you reside or where your bank operates. Volunteers for this program may sign up online. We hope to hear from you soon, as this effort is a significant opportunity for you to advocate for the banking industry with state policymakers. Thank you for joining this critically important cause.Join Our State Grassroots Advocacy TeamgovernmentRELATIONS PA Bankers Association » Winter 2024 27Rep.-elect Marc Anderson (R-York – part)Rep.-elect Nikki Rivera (D-Lancaster – part)Rep.-elect Nate Davidson (D-Dauphin – part; Cumberland – part)Rep.-elect Jamie Walsh (R-Luzerne – part)Rep.-elect Brenda Pugh (R-Luzerne – part)Rep.-elect Jacklyn Rusnock (D-Berks – part)Rep.-elect Sean Dougherty (D-Philadelphia – part)
28 » PA Bankers Association pabankers.comgovernmentRELATIONShe best and most successful PAC Fundraising results begin with an effective bank-wide grassroots advocacy effort. The two are inextricably related. Here are just a few suggestions for improving your overall advocacy effort.• Make advocacy a regular agenda item for your board and management meetings. • Awareness of the importance of advocacy improves when the CEO takes time to explain the impact of proposed adverse legislation (capping interchange fees is a good example). Emphasize the impact on your customers and communities and your ability to meet their needs.• Effective grassroots advocacy occurs when there is a call-to-action by PA Bankers that is pushed out to your entire team, from the board to all levels of the bank. People are more committed when they are engaged. • Engagement is reinforced when grassroots calling efforts lead to successful outcomes and you communicate and celebrate positive results. • Advocacy is particularly effective when you invite your elected representatives to visit your bank and involve your team members in the visit. Have them explain how excessive and /or negative legislation diverts critical resources from the effort to raise the quality of life in our communities.• Take advocacy personally. You are not only a leader of your bank, but you are also a leader in your industry. Volunteer your time and leadership when called upon and include your managers. Participate in in-district events. Duncan will tell you that lobbying efforts are much more successful when legislators hear from constituent bankers. And when you lead by example, your organization will take notice. • Include your managers in calling efforts like PA Bankers Day at the State Capitol and annual Washington Visits. Not everyone is cut out for it, but I promise there are members of your management team who feel strongly about the issues and can speak to them with a compelling voice. Engage them! • Employees who can speak about their banks and their communities will be effective advocates for the industry.• Recommend your bankers for association committees. Everyone is more motivated when they feel part of something larger than themselves. • Utilize the vast array of PA Bankers’ schools, conferences and seminars. Nothing connects our bankers more to the important work of our association than being informed.Conducting a successful annual PAC Campaign is an extension of your advocacy efforts. The following best practice guide is the result of a meeting of the Past Chairs Forum that met in conjunction with the 2024 PA Bankers Board and Past Chairs strategic retreat. The Past Chairs thought that sharing the results of a successful PAC campaign by one of the association’s members might serve as a helpful guide for other PA Bankers member CEOs, as they look to increase their bank’s political advocacy and support for the PA Bankers Public Affairs Committee (PaBPAC)--at a time when political advocacy has never been more important.PA Bankers appreciates the significant emphasis that Kish Bank places on industry advocacy. These PAC contributions are entirely voluntary and go to support pro-banking, pro-business candidates from all parties who understand and appreciate the value of the banking industry to their communities.This is not a solicitation for PaBPAC federal.TA Practical Guide for CEOs to Successful PAC Fundraising
PA Bankers Association » Winter 2024 29governmentRELATIONSMost importantly, successful PAC fundraising starts at the top with the CEO and Board of Directors. It just makes sense that stockholders have the most to gain by supporting lobbying efforts that will elevate bank performance and stock valuations. Since most of your board members own shares, it is fitting that your board members achieve 100-percent PAC support. Our board agrees on an appropriate contribution level and encourages all board members and senior officers to give at that level. Although contributions are strictly voluntary, our Executive Leadership Team understands that they must lead by example, and we have been fortunate to achieve 100-percent contribution at the platinum level ($800-$999). Senior managers (with the exception of wealth and municipal finance advisors who operate under constraints) have also achieved 100-percent participation. It is notable that our board, executive team and senior managers all participate in our stock incentive program, so it is not hard to convince them that contributing is clearly in their own self-interest as it relates to their personal wealth.Finally, we maintain an annual profit-sharing program in which all hands participate. In some years, the profit-sharing program can be quite lucrative. Naturally, that is an ideal moment to promote contributions to our PAC. And well over 50 percent do contribute. So, if you offer a cash profit sharing program or a 401(k) plan, it is a strong incentive to contribute. Importantly, we remind all team members that a PAC contribution is actually an investment in their profession and their career. If they are not willing to stand and support their industry, who will? We remind them that failure to support the industry’s PAC can result in a weaker industry that is challenged to respond to competitive threats. Combining our industry voices and resources means that we are stronger together and stronger than we could ever hope to be individually.And finally, we celebrate our successes. Every year my wife and I invite every PAC contributor of $25 or more to a celebration on our back patio. We also invite representatives of our state and federal representatives to be present to discuss the importance of political engagement and advocacy. At that time, we choose a PAC contributor in attendance to present a PAC check to a candidate or public official. It is an evening that reinforces what we are capable of as a team and creates a great springboard for future campaigns. And what did we achieve this year? Our employees contributed $38,800 and our board contributed $15,600 for a total of $54,400. I share that not to boast, because obviously that money is spent to benefit all banks in PA, but because I believe we can achieve far more as an industry than we do today. We are fortunate to have one of the greatest associations in the country. They deserve all the financial wherewithal we can provide them. ABOUT THE AUTHOR: BILL HAYESEXECUTIVE CHAIRMAN, KISH BANK
30 » PA Bankers Association pabankers.comDIRECTORS INSTITUTEHershey Country Club, Hershey, Pa.EXECUTIVE MANAGEMENT CONFERENCEThe Hotel Hershey, Hershey, Pa.june 17sept. 8-9TRAINING THE CREDIT ANALYST SEMINARPA Bankers Training Room, Harrisburg, Pa.AGRICULTURAL BANKERS CONFERENCEPenn Stater Conference Center, State College, Pa.SCHOOL OF CONSUMER LENDINGPA Bankers Training Room, Harrisburg, Pa.SCHOOL OF COMMERCIAL LENDINGPenn Stater Conference Center, State College, Pa.LENDING CONFERENCEThe Hotel Hershey, Hershey, Pa.march 12-13april 23-24may 6-7june 8-12nov. 20-21LENDING & CREDITLEADERSHIPa aheadlookAs you plan your training and development, we hope you will consider learning with us. Here is a sneak peek at some of the opportunities to learn with PA Bankers this coming year. Visit www.pabankers.com for more information and pricing details about each event.Please note: all dates and locations are subject to change. This includes changing in-person events to virtual oerings.
PA Bankers Association » Winter 2024 31DEI CONFERENCEHershey Lodge & Convention Center, Hershey, Pa.YOUNG PROFESSIONALS CONFERENCEHershey Lodge & Convention Center, Hershey, Pa.april 9-10sept. 23-24SCHOOL OF COMPLIANCE PA Bankers Training Room, Harrisburg, Pa.WOMEN IN BANKING CONFERENCEHershey Lodge & Convention Center, Hershey, Pa.april 1-3march 2-3COMPLIANCE, REGULATORY & RISK MANAGEMENTWOMEN IN BANKINGDIVERSITY, EQUITY & INCLUSIONYOUNG PROFESSIONALSSCHOOL OF BANKINGPenn Stater Conference Center, State College, Pa.WEALTH MANAGEMENT & TRUST CONFERENCE & EXHIBITIONThe Hotel Hershey, Hershey, Pa.ADVANCED SCHOOL OF BANKINGPenn Stater Conference Center, State College, Pa.REGIONAL C-SUITE PEER EXCHANGES/RECEPTIONSjan. 22 - Lancaster Country Club, Lancaster, Pa.jan. 23 - Indiana Country Club, Indiana, Pa.feb. 5 - Williamsport Country Club, Williamsport, Pa.june 8-12oct. 5-7july 20-25GENERAL ASSOCIATIONWEALTH MANAGEMENT, TRUST & INVESTMENT SERVICES
32 » PA Bankers Association pabankers.comvendorARTICLESow quickly a bank can recover after an emergency, such as a tornado, fire, or flood, often depends on pre-emergency planning. Management needs to plan to improve the likelihood that the bank will survive and recover. Carefully assess how the bank functions, both internally and externally, to determine which staff, materials, procedures, and equipment are necessary to keep the business operating.• Review the business process flow chart if one exists.• Identify operations critical to survival and recovery.• Include emergency payroll, expedited financial decision-making, and accounting systems to track and document costs in the event of a disaster.• Establish procedures for succession of management—include at least one person who is not at the bank headquarters, if applicable. Identify suppliers, shippers, resources, and other businesses the bank interacts with daily.• A disaster that shuts down a key supplier can be devastating to the business—develop professional relationships with more than one bank in case the primary contractor cannot service needs.• Create a contact list for existing critical business contractors and others that would be used in an emergency— keep this list with other important documents on file in an emergency supply kit and at an off-site location. Plan what course of action to take if the building is not accessible.This type of planning is often referred to as a “Continuity of Operations” plan and includes all facets of business.• Consider if the business can be run from a different location.• Develop relationships with other companies to use their facilities in case a disaster makes the location unusable. Plan for payroll continuity. Decide who should participate in preparing an emergency plan.• Include employees from all levels in planning and as active members of the emergency management team.• Consider a broad cross-section of employees from throughout the organization but focus on those with expertise vital to daily business functions. These will likely include people with technical skills, as well as managers and executives. Define crisis management procedures and individual responsibilities in advance.• Make sure those involved know what they are supposed to do.• Train others in case back-up help is needed. Coordinate with others.• Meet with other businesses in the building or complex.• Talk with first responders, emergency managers, community organizations and utility providers.• Develop plans with suppliers, shippers, and others that the bank regularly does business with.• Share plans and encourage other businesses to set in motion their own continuity plans to assist others. Review emergency plans annually. Just as business changes over time, so do preparedness needs. When new employees are hired or when bank functions are changed, update plans and inform employees.ABOUT ABA INSURANCE SERVICESABA Insurance Services, a member of Great American Insurance Group, is a long-term, reliable and stable source of D&O, Bond, Cyber Liability and P&C insurance for financial institutions, including trust companies and banks in organization. Our unique insurance program, co-endorsed by PBASC and American Bankers Association, has been committed to serving and supporting financial institutions by providing quality insurance and excellent customer service for over 35 years. Excess insurance and STAMP surety bonds are also available. For more information on risk management, please visit abais.com/Insights or contact ABA Insurance Services’ Patricia Williams at 410-960-6878 or ppwilliams@abais.comContinuity of Operations PlanningHABOUT THE AUTHOR: PATRICIA WILLIAMSABA INSURANCE SERVICES
PA Bankers Association » Winter 2024 33EnvironEnergy.comReduce Energy Demand & CostsMinimize Budgetary RisksIncrease EfficienciesMeet Sustainability Goals Formerly APPI EnergyEnviron Energy is a leading energy management advisorthat combines industry expertise with data-driven insightsto help you procure electricity, natural gas and renewables,manage energy risk, and achieve your sustainability goals. Spending Too Much On Energy Costs?Get in Touch for your Tailored Energy Strategy:PABankers@environenergy.comACCESS COLLABORATIVE LENDING SOLUTIONS: Expand Your Loan and Lease Oerings for Ag & Forestry ClientsAgri-Access specializes in secondary market financing for agriculture, aquaculture, forest products and rural land, providing capital for community banks across the nation.Visit our website at agri-access.comMatthew SenterVice President – Lender RelationsPhone: 507-810-0837matthew.senter@agri-access.comadINDEXAGRI-ACCESS .................................................................................................................33BANK HEALTH CARE CONSORTIUM OF PA .............................................23BANK ON KEYSTONE COALITION...................................................................33BANKTALENTHQ ......................................................................................................IBC BANK PERFORMANCE REPORT ..........................................................................9CHAIR'S CHALLENGE ...............................................................................................37CINNAIRE ......................................................................................................................... 44COMPLIANCE ALLIANCE ..................................................................................... BCCSI ..........................................................................................................................................45DEI SUCCESS ................................................................................................................. 22ENVIRON............................................................................................................................33HERBEIN ............................................................................................................................17INVESTORS TITLE INSURANCE COMPANY..............................................19MARKET SCAN .............................................................................................................. 29MOBILE APP ....................................................................................................................35N CONTRACTS...............................................................................................................41ODP BUSINESS SOLUTIONS ...............................................................................25S.R. SNODGRASS, P.C. ............................................................................................IFCTHE BAKER GROUP ..................................................................................................... 4Does your bank not yet offer a Bank On Certified Account? Visit our website to learn more about the benefits of Bank On Certified Accounts and how you can get started today.
34 » PA Bankers Association pabankers.comvendorARTICLESommonwealth Charitable Management (CCM) is an approved Educational Improvement Tax Credit (EITC) administrator for Preschool Scholarships (PKSO), Kindergarten through twelfth grade Scholarships (SO) and Educational Improvement Organization (EIO) funding. CCM works statewide and redirects your state taxes to benefit students across Pennsylvania with scholarships and innovative programs. We are approved by the Department of Community and Economic Development and have decades of experience. Donors in the middle of (or completing) a two-year commitment to participate in EITC apply on May 15, while new donors apply on July 1 each year. Once approved, donors must send their contributions to eligible EITC administrators within 60 days of the date of their approval letter. Administrators accept the donation and mail their donation acknowledgement letters to the donor. The donor must submit all donation acknowledgements to DCED within 90 days of the date on their acceptance letter. If you are new to EITC, the program can be cumbersome, and CCM is positioned to help make the process simple and seamless. We can submit applications on your behalf to the Department of Community and Economic Development (DCED). Once approved to participate, your bank may send the entire EITC contribution to CCM and we submit the donation acknowledgment to DCED on your behalf. CCM eliminates the pressure of having to send dozens of checks, await letters and send them to DCED within a very short timeframe. CCM will work with the donor one-on-one, to target schools that are customers or located within your service area to receive funding. The staff at CCM will work directly with the schools, ensuring the donor’s identity is maintained. We process scholarship applications for the PKSO and SO programs, and work with schools to maximize impact of their allocated EIO funding. Each spring, we present a detailed report showcasing how funds were used by the selected schools. In addition, we provide annual data reports for all scholarships awarded by CCM to be utilized by your CRA team.If your bank is already participating in the Educational Improvement Tax Credit (EITC) program, and even if you have already taken advantage of the maximum allowed tax credits available through EITC, there is a way to increase your participation. CCM has a Special Purpose Entity (SPE) partner that has EIO tax credits available for your bank. With a two-year commitment, your bank will still earn a 90% tax credit, and your funds can be sent to any qualifying organization. These tax credits are available even if your bank has reached the $750,000 tax credit limit through EITC. CCM will arrange a meeting with the SPE to review the steps to participate in the program and how your credits will be awarded. There have been historic increases to the amount of tax credits available in the EITC program, and it’s never too late to try and access the credits to benefit your bank. Please contact Melissa Turlip at mturlip@commonwealthcharitable.org or 570-278-5448 to learn how to begin or grow your EITC program.Starting and Growing your EITC Program in Partnership with Commonwealth Charitable ManagementABOUT THE AUTHOR: MELISSA TURLIP, COMMONWEALTH CHARITABLE MANAGEMENTMelissa Turlip is the Director of Programming for Commonwealth Charitable Management and has been with the organization for over five years. She holds a Bachelor of Science degree in Early Childhood Education and has over 25 years of experience in the education and non-profit sector. Her background includes creating and implementing educational programs for the federal government, working for a local college and leading a non-profit organization. Melissa leads the Tax Division of Commonwealth Charitable Management. C
PA Bankers Association » Winter 2024 35We’re Mobile! The PA Bankers App keeps you connected with PA Bankers like never before. SEE HOW YOU CAN UTILIZE THE APP BELOW:1DOWNLOAD THE FREE APP IN THE GOOGLE PLAY AND APPLE APP STORES TODAY.Register for events at your fingertips.2Update your personal/business information on the go.3Have all event details in one place (i.e., handouts, evaluations, speaker bios, etc.).4Access the updated PA Bankers calendar at all times.5Connect directly to the association’s social channels and stay up-to-date on association news.6Browse for products and services for your institution.Read paBanker magazine on the go.78 Access resources designed for PA Bankers' members. Receive "Instant Alerts" to stay informed.9Advocate for the industry from any location.10
36 » PA Bankers Association pabankers.comvendorARTICLESheck fraud has a long and intricate history, evolving alongside the development of banking and payment systems. Today, it remains a pressing concern, threatening the financial stability of banks and the security of their customers. The emergence of digital platforms like Telegram has transformed the landscape of fraud, offering fraudsters easy access to dark marketplaces where banking data is readily available. With minimal technical expertise, individuals can tap into these channels, which are often unmonitored, to purchase sensitive information or participate in fraudulent activities. These channels operate at a rapid pace, closing and reopening within days, making it difficult for financial institutions to keep up. As a result, banks struggle to monitor the sheer volume of channels where stolen checks are traded, creating significant vulnerabilities.THE CHANGING LANDSCAPE OF CHECK FRAUDThe digital evolution of fraud tactics means that community banks must evolve their detection and response strategies. While some banks dedicate entire teams to monitoring these channels, the sheer scale and speed at which they operate make it difficult for most institutions to stay ahead. Furthermore, many banks find themselves ill-equipped to gather and analyze intelligence quickly, often leading to delays in response times.KEY CHALLENGES FOR COMMUNITY BANKSMonitoring Digital Channels: The rapid creation and closure of illicit channels on platforms like Telegram make consistent monitoring a logistical challenge.Resource Constraints: Small and mid-sized banks may lack the resources to allocate a dedicated team for fraud detection.Communication Inefficiencies: Banks often struggle with ineffective communication channels, making it difficult to share timely information about local fraud incidents. Calls and emails frequently go to the wrong contacts, delaying crucial collaboration efforts.LEVERAGING TECHNOLOGY AND DATA ANALYTICSAdapting to the evolving nature of fraud requires leveraging advanced technology and data analytics. By implementing proactive measures, banks can detect suspicious patterns early and act before fraud escalates. Building comprehensive digital fraud cases allows institutions to document incidents meticulously and collaborate efficiently. Real-time data sharing on secure platforms ensures all relevant information is promptly captured, enhancing prevention and response efforts.THE IMPORTANCE OF COLLABORATION AND COMMUNICATIONThe battle against check fraud is not one that banks can fight alone. Collaboration among financial institutions is critical to creating a united front. By fostering partnerships, sharing intelligence, and establishing clear communication channels, community banks can strengthen their defenses. Building a network where local banks can quickly exchange information not only protects individual institutions but also reinforces the overall integrity of the banking system. Ensuring that each bank has a designated point of contact for fraud-related communication can reduce delays and improve the effectiveness of collaborative efforts.CONCLUSION: ADAPTING FOR A RESILIENT FUTUREAs check fraud continues to evolve, financial institutions must adapt. Embracing technology, improving communication, and fostering collaboration are key steps to safeguarding both banks and their customers. By staying informed, proactive, and united, banks can mitigate risks associated with check fraud, ensuring a more resilient and secure financial future.The Evolution of Check Fraud:Challenges and Solutions for Modern BankingABOUT THE AUTHOR: PHILLIP BRASFIELD, FRAUD SPECIALIST, DARKDEFENDPhillip Brasfield is a Fraud specialist for DarkDefend and has expertise in help financial institutions gain the upper hand in detecting, preventing, and mitigating financial fraud. Phillip has worked in the Fintech industry since 2016 and holds a Master of Science in Cybersecurity from the University of Alabama at Birmingham. DarkDefend provides state-of-the-art fraud prevention solutions for financial institutions. For more information visit darkdefend.com.C
PA Bankers Association » Winter 2024 37CHAIR RANDY BLACK CHALLENGES YOU TO INCREASE YOUR ENGAGEMENT WITH THE ASSOCIATION Get Involved in Advocacy Attend and send Others to Conferences and Events Use Educational Programming Get Involved in Committees Attend Peer Exchanges Take Advantage of Free Resources Oered Use Products and Services Through the Associations’ For-Prot SubsidiaryVisit our website to learn how you can nd value in your PA Bankers membership and earn Bankers Bucks* to use towards discounts on registration fees for PA Bankers’ 2025-26 events.Learn More
38 » PA Bankers Association pabankers.comvendorARTICLEShe recent announcement by PJM Interconnection, the transmission grid operator in Pennsylvania as well as the Mid-Atlantic and parts of the Midwest , of a significant increase in capacity costs has sent shockwaves through both the energy and industrial markets. This dramatic rise, from $28.92/MW-day to $269.92/MW-day, is a direct result of power plant retirements, difficulties connecting new sources of power to the grid, and increased electricity demand within the region. As this new pricing structure takes effect in June 2025, commercial customers across the PJM region, including banks, could face 10+% increases in their total annual electricity costs.UNDERSTANDING THE PJM CAPACITY AUCTIONThe PJM capacity auction is a mechanism designed to ensure that the region has sufficient electricity supply to reliably meet peak concurrent electricity demand. Through PJM’s annual Base Residual Auction, the RTO seeks to procure sufficient generation resources to prevent power outages. However, as with any commodity market, when the available supply falls short of increasing demand, the cost of capacity naturally rises.The PJM capacity auction continues to play a crucial role in ensuring the reliability and stability of the electric power grid. As the energy landscape evolves, it is essential for large energy users to understand and be ready to adapt to address the challenges associated with capacity planning and market design.RECENT TRENDS AND CHALLENGESIn recent years, the PJM region has faced several challenges, including:• Retirement of Older Power Plants: The retirement of aging coal and nuclear power plants has created a need for new capacity.• Increasing Intermittency: The growth of renewable energy sources, such as solar and wind, has introduced challenges in forecasting and managing capacity.• Increased Demand: large-scale data-centers and industrial manufacturers returning to the US are driving energy demand higher.IMPLICATIONS FOR PJM’S CAPACITY AUCTION1. Ensuring Grid Reliability: The primary goal of the capacity auction is to guarantee that there is sufficient capacity available to meet demand, preventing blackouts and brownouts. By ensuring adequate supply, the auction contributes to the overall stability and resilience of the power grid.2. Market-Based Pricing: The auction mechanism promotes a competitive market for capacity, leading to more efficient allocation of resources. By setting prices based on supply and demand, the auction helps to maintain a balance between the cost of capacity and its value to consumers.3. Incentivizing New Investments: The capacity auction can incentivize investments in new power plants, energy storage facilities, and demand-response programs. By providing a predictable revenue stream, the auction can make these investments more attractive to developers. In other words, the higher capacity prices the region will experience in 2025-2026 sends a market signal to developers that will lead to greater investment in capacity resources. This investment will serve to bring future capacity prices back down.4. Addressing Capacity Shortages: If the auction reveals a capacity shortage across the region or in certain geographies, it can trigger actions to address the shortfall, such as accelerating the development of new resources or implementing load management measures.5. Impact on Energy Prices: The capacity price can influence wholesale electricity prices, particularly during peak demand periods. A high-capacity price may lead to higher wholesale energy prices, which can ultimately impact retail electricity rates.IMPACT ON PENNSYLVANIA BANKERSThe implications of the PJM capacity auction for Pennsylvania bankers are significant, as they can directly impact the cost of electricity for facilities. Here are some key implications:The PJM Capacity Challenge:Implications for Pennsylvania BankersT
PA Bankers Association » Winter 2024 39• Increased Energy Costs: Banks with multiple branches or facilities can be energy-intensive, requiring significant amounts of electricity for operations. The increased capacity prices will directly translate to higher energy bills. • Reliability Concerns: While the PJM capacity increase is intended to improve grid reliability, there is still a risk of power outages, especially during peak demand periods. Such outages could disrupt critical bank services. • Regulatory Compliance: Regulatory bodies may impose stricter requirements on bank facilities to ensure that they have adequate backup power systems and disaster preparedness plans in place. STRATEGIES TO MITIGATE THE IMPACTWhile the PJM capacity price increase presents significant challenges, there are strategies that Pennsylvania Bankers Association members can implement to mitigate its impact:• Energy efficiency: Investing in energy-efficient equipment and practices can help reduce electricity consumption and lower overall energy costs.• Peak load reduction: By reducing electricity consumption during peak summer hours, customers can mitigate the impact of high capacity rates. This can be achieved through measures such as scheduling non-critical operations outside of peak times or participating in demand response programs. If you have not explored demand response (programs that pay you to reduce load at peak times), or if the economics did not make sense before, now may be the time to revisit these programs. • Renewable energy: Exploring renewable energy options, such as on-site solar panels, can help customers reduce their reliance on the grid and hedge against future price increases.• Long-term contracts: Entering into long-term contracts with energy suppliers can provide some stability and potentially lock in lower rates.CONCLUSIONThe PJM capacity price increases that go into effect in June 2025 will present significant challenges for PA Bankers members. However, by implementing effective energy procurement and energy management strategies, banking facilities can mitigate the impact and ensure their long-term viability. By investing in energy efficiency, peak load reduction, renewable energy, and energy supply contract optimization, customers can position themselves to weather the storm and emerge stronger.At Environ Energy we are committed to ensuring customers have the knowledge and the means to avoid unnecessary costs and reduce uncertainties with their energy budget. For information on lowering capacity costs for facilities in the PJM territory or other regions connect with an Environ Market Advisor today.ABOUT ENVIRON ENERGY APPI Energy, now operating under the Environ Energy name, has been delighted to support PA Bankers members since 2009. Throughout this period, Environ has gained a deep understanding of the distinct energy challenges facing PA Bankers members, along with identifying energy solutions that most effectively align. PA Bankers has selected Environ to provide data-driven, holistic energy management services and custom solutions for our members. Environ Energy has been at the forefront of energy management and sustainability solutions for decades, guiding clients toward advancement in energy-efficient buildings, clean energy buying, energy resilience, and regulatory compliance. With a portfolio of over $1B in energy contracts and over $100M in client savings, Environ delivers energy management services to some of the largest institutions and government agencies across industries including healthcare, manufacturing, data centers, food and beverage, hospitality, real estate, finance, and more. To learn more about Environ Energy, please visit their website at www.environenergy.com or contact them today at PABankers@environenergy.com.ABOUT THE AUTHOR: PAUL LAVALLE, ENVIRONPaul Lavallee has a career spanning over 30 years including 18 in the energy space serving clients in the mass markets and large commercial segments. With a background of strategy, product, sales, marketing, and channel development, Paul has seen the ups and downs of a volatile energy landscape. Paul joined Environ Energy earlier this year and previously worked as Sales Director for Perch Energy, and for more than a decade, National Sales Director at Constellation. Paul serves as the Market Manager for the banking industry at Environ Energy.
40 » PA Bankers Association pabankers.comow often does your organization think about risk? Chances are it’s top of mind for your leadership team, employees, and customers. But do you use dynamic risk management? That’s a question more banks should ask.After all, the days of one-time or annual risk assessments are mostly over. Compliance guidelines and regulations are evolving to meet the needs of existing and emerging risks. For example, cybersecurity threats aren’t new, but bad actors’ tactics are getting more robust and technologically advanced with the rise of ransomware and artificial intelligence-enabled phishing attacks.So, how can banks create a more proactive and flexible risk framework? What opportunities and obstacles may they face as they implement dynamic risk management? Let’s dive into that and more.UNDERSTANDING DYNAMIC RISK MANAGEMENTDynamic risk management, or DRM, is a risk approach where banks actively identify, assess, and mitigate risks in real time. While risk assessments are used in DRM, they are not merely formalities put in place to appease auditors. They are updated as risk conditions, both internal and external, change. For example, a DRM approach would consider the impact of staffing changes or a natural disaster on an institution’s operational risk, and updates would be made accordingly.KEY DIFFERENCES BETWEEN TRADITIONAL AND DYNAMIC RISK MANAGEMENTTraditional risk management, or static risk management, relies on an existing framework and scheduled periodic assessments. For example, a bank schedules its fraud risk assessment for one month, but the Office of the Comptroller of the Currency (OCC) issues new fraud risk management guidance for all OCC-supervised banks the following month. If the bank uses a traditional approach to manage fraud risk, it will wait until the next risk assessment to make updates.Unlike traditional risk management, DRM considers the evolving nature of risks. If traditional risk management is a stagnant body of water, DRM is like a river, constantly flowing and adapting to changes in the landscape. Using the previous example, a dynamic risk-focused bank would promptly adapt to meet the guidelines.EXPLORING THE BENEFITS OF DYNAMIC RISK MANAGEMENTDRM offers financial institutions a plethora of benefits, including:• Proactive risk mitigation. Rather than rely on past risk assessments and timelines, all departments are encouraged to continually monitor updates specific to their area, uncover new risks, and share their findings with other teams, improving the overall operational risk management of the organization and reducing the chance of regulatory penalties, among other benefits.• Regulatory compliance. Banks can maintain compliance and avoid falling behind industry standards by adapting their assessments and strategies based on current or upcoming regulations.• Improved Operational Resilience. Operational risk is a significant concern among banks as it touches nearly every department and outside relationships with vendors and partners. Organizations can adjust their controls and processes with DRM to adapt and thrive in fast-moving environments.• Enhanced Risk Culture. DRM is contagious within an organization. If one department actively pursues other teams for updates and change, the entire culture must level up and adjust its strategies accordingly.HOW TO IMPLEMENT DRM AT YOUR FINANCIAL INSTITUTIONWhile DRM’s benefits are worth the effort, there are some steps every organization should take to maximize their efforts:1. Assess your current framework. Review your current risk management strategy to identify what’s working and the gaps and areas where a DRM approach is a high priority.2. Engage stakeholders. Involve multiple parties and departments, including IT, marketing, and operations, to discuss potential risks and ensure a comprehensive understanding of your institution’s operations.vendorARTICLESDynamic Risk Management:What Is It and How Can Banks Use It?H
PA Bankers Association » Winter 2024 413. Establish a continuous monitoring system. Develop a system to track key risk indicators (KRIs), which identify and predict potential risks, and key performance indicators (KPIs), which measure your organization’s success based on your identified goals and objectives.4. Prioritize risk assessment updates. Dynamic risk assessments should be updated as needed based on changes in regulations, products, processes, and organizational risk tolerance.5. Enhance your internal controls. Control self-assessments, audits, and testing offer a wealth of insights. Use them to create new internal controls or improve existing ones.6. Evaluate—and reevaluate—your approach. You can’t set and forget a DRM strategy. Modify your approach based on learnings, regulatory updates, and new insights.HOW TO BUILD A DRM CULTUREMaking the most of a DRM strategy is more than completing a set of steps—it’s about improving your organization’s risk management culture.To do that, you need everyone, including your team members, to be educated and actively embrace this new perspective. Provide training on new or existing technology and systems. Encourage employees to communicate their concerns and any signs of risks. Remember, a commitment to clear and open communication starts from the top down.It’s also important to note that while DRM is arguably more suited for the evolving nature of risks, there are times when a traditional risk management approach may be necessary. Suppose your bank has limited resources, systems, and human capital to manage an area actively, or perhaps the area is low-risk. In those cases, traditional risk management might work. Communicate this information to your teams so everyone is on the same page.As you revisit your organization’s risk management approach, consider which areas would benefit from DRM implementation and the time and resources it will take to implement this approach successfully. You may find that some systems are working, but others need to be addressed now or soon. Regardless of the type of risk you’re anticipating or actively mitigating, having a strong dynamic risk management approach will enable you to tackle the challenges and see the opportunities risk presents better.ABOUT THE AUTHOR: MONICA BOLIN, MANAGER OF ENTERPRISE RISK MANAGEMENT, NCONTRACTSMonica Bolin is the Manager, Enterprise Risk Management at Ncontracts. Over the last 30+ years, Monica has gained extensive financial institution management and consulting experience, particularly in risk management, loan review, commercial lending, credit administration, internal audit/compliance and loan operations. She has presented at conferences and webinars, as well as authoring blogs and articles for publications. Ms. Bolin has a wide array of experience working with large regional financial institutions as well as smaller community banks. She has performed operational reviews, staffing assessments, and internal audits of enterprise-wide bank operations, including regulatory compliance programs, risk assessments, vendor management, disaster recovery, policy reviews, loan review and due diligence reviews.
42 » PA Bankers Association pabankers.comhe Federal Deposit Insurance Corporation Improvement Act (FDICIA) of 1991 is central for enhancing the safety and soundness of financial institutions. With 2025 fast approaching, community banks should prepare to meet FDICIA requirements effectively, especially if nearing asset thresholds that trigger specific compliance obligations. This article offers an overview of FDICIA requirements and practical steps for community banks aiming to streamline compliance.OVERVIEW OF FDICIA COMPLIANCE REQUIREMENTSFDICIA’s primary goals are to strengthen financial stability through stringent reporting, independent audits, and internal controls. Community banks should understand key thresholds:• Banks with $500 Million or More in Assets: These banks must establish effective internal controls over financial reporting (ICFR) and among other requirements, provide a management report that speaks to management’s assessment of internal controls over financial reporting. There are also key independence considerations that must be given to the Audit Committee and the auditor. • Banks with Over $1 Billion in Assets: Additional requirements apply, including an independent auditor's attestation to management’s assertions regarding the effectiveness of internal control over financial reporting.Why 2025 Matters: For community banks, growth often brings new regulatory obligations. As they approach asset thresholds set by FDICIA, proactive planning can make the transition to compliance smoother and less disruptive. By understanding these requirements early, banks can implement necessary internal controls and processes in advance, avoiding last-minute adjustments that could strain resources or disrupt operations.PRACTICAL STEPS FOR FDICIA COMPLIANCE1. Conduct a Gap Analysis of Internal ControlsA gap analysis is a foundational step in preparing for FDICIA compliance, as it helps community banks assess whether their current internal controls align with regulatory and control framework standards. This analysis involves thoroughly reviewing all controls to pinpoint any weaknesses or “gaps” that could prevent the bank from meeting FDICIA requirements, such as controls that may be underdeveloped or inconsistently applied. In addition to identifying control gaps, a gap analysis emphasizes the importance of thorough and accurate documentation. FDICIA demands comprehensive documentation that clearly demonstrates both the design and operating effectiveness of each control. This means documenting not just what controls are in place, but also how they function in practice, ensuring they’re both robust and traceable. By conducting a gap analysis, banks can proactively address compliance challenges, build stronger control environments, and reduce the risk of costly deficiencies during audits.Key Takeaways• Control Gaps: Identify gaps in controls that may hinder compliance.• Documentation Standards: Ensure documentation meets FDICIA’s rigorous standards, including the effectiveness and operation of each control.2. Establish a Robust Internal Control FrameworkA solid internal control framework is important for meeting FDICIA compliance, as it ensures financial reporting is accurate, reliable, and secure. Developing this framework involves creating comprehensive ICFR (Internal Control over Financial Reporting) process documentation—which includes detailed process narratives describing each step of critical processes and key control matrices that identify controls, responsible parties, and frequency. This documentation is the foundation for understanding and monitoring the bank’s control environment. Equally important is control testing, which should be conducted regularly to verify both the design effectiveness (confirming that each control is properly designed to address specific risks) and operating effectiveness (ensuring each control works as intended in practice). Together, well-documented processes and rigorous testing provide evidence of a strong control environment, helping banks meet regulatory expectations while safeguarding financial integrity.Key Takeaways• ICFR Process Documentation: Maintain detailed process narratives and key control matrices.• Control Testing: Conduct regular testing to ensure controls function effectively. Testing should include vendorARTICLESTNavigating FDICIA Compliance in 2025:A Guide for Community Banks
PA Bankers Association » Winter 2024 43both design effectiveness (whether controls are correctly structured) and operating effectiveness (whether they operate as intended).3. Document and Test Critical Accounting PoliciesFDICIA’s focus on Critical Accounting Policies and Significant Accounting Estimates means banks must pay extra attention to areas where judgment and estimation are involved, as these are more susceptible to errors or misstatements. This requires detailed documentation of Management Review Controls (MRCs)—the processes management uses to review and validate key estimates and decisions. For instance, in areas like the Allowance for Credit Losses (ACL), acquisition accounting, and goodwill impairment assessment, management must outline not only the control itself but also the specific steps taken to verify completeness, accuracy and consistency. This includes documenting who is responsible for each review, what data and assumptions are used, how frequently reviews are conducted, and what thresholds or criteria are applied to flag issues. By thoroughly documenting these controls, banks can provide a clear audit trail, supporting both the validity of their financial statements and their commitment to internal control environment under FDICIA.Key Takeaways• Thoroughly Document MRCs: Rigorous documentation of Management Review Controls (MRCs) in areas like the ACL supports FDICIA compliance and audit readiness.• Clarify Review Steps and Criteria: Clearly define responsibilities, data sources, and criteria for reviews to strengthen controls and reduce misstatement risk.4. Prepare for Independent AuditsIndependent audits play a crucial role in FDICIA compliance by providing an objective evaluation of a bank’s financial reporting controls and internal processes. Engaging auditors with specific experience in FDICIA ensures a thorough assessment, as these auditors are well-versed in the unique requirements and expectations for compliance. They will evaluate key areas such as the design and operational effectiveness of internal controls over financial reporting (ICFR), which includes verifying that controls are structured to mitigate risks and function reliably in practice. Additionally, experienced FDICIA auditors can guide banks in aligning their internal processes with applicable standards and requirements, helping identify any gaps or deficiencies early on. Key Takeaways• Management’s Assessment: Ensuring management evaluates ICFR and can demonstrate its effectiveness.• Coordination with Auditors: Sharing testing documentation, aligning sample sizes, and coordinating on control assessments can reduce audit burdens.5. Monitor and Update Internal ControlsFDICIA compliance requires an ongoing commitment to monitoring and adjusting internal controls to keep pace with evolving risks and regulatory expectations. Regular reviews of control documentation—ideally on a quarterly or semi-annual basis—allow banks to verify that key controls remain effective and aligned with current standards. This proactive approach helps banks quickly identify any deficiencies, which could lead to inaccuracies in financial reporting or operational vulnerabilities. When deficiencies are found, it’s important to evaluate their impact and implement corrective actions promptly to minimize risk exposure. Key Takeaways• Regular Control Reviews: Perform quarterly or semi-annual reviews of key control documentation and update processes as needed.• Addressing Deficiencies: When deficiencies arise, assess the potential impact on financial reporting and take corrective actions promptly.6. Address Reliance on Outsourced ServicesFor banks that rely on outsourced services like loan servicing or IT, FDICIA compliance mandates clear accountability, even for functions handled externally. While SOC 1 reports from service providers offer insights into the provider’s control environment, management must go further by actively reviewing these reports, identifying any deficiencies, and ensuring all complementary user entity controls (CUECs) are appropriately mapped and tested within the bank’s own control framework. It’s also essential to document the steps taken to verify the accuracy of critical reports generated by these outsourced services, particularly those affecting core systems and transaction data. Key Takeaways• Review SOC Reports: Verify any noted deficiencies and ensure complementary user entity controls (CUECs) are mapped and tested.• Document Verification Steps: Confirm the accuracy of reports from outsourced services, especially for core systems or transaction data.KEY DEADLINES AND REPORTING REQUIREMENTSFDICIA requires timely submissions of various reports, with strict guidelines:• Annual Report Filing: Within 90 or 120 days after the fiscal year-end, depending on the institution's public or subsidiary status.Navigating FDICIA Compliance in 2025:A Guide for Community Banks(continues on page 46)
44 » PA Bankers Association pabankers.comvendorARTICLES• Other Deadlines: Institutions must submit copies of auditor communications on deficiencies, significant matters, and non-compliance within 15 days of receipt.If a delay occurs, institutions must notify regulators with a written notice of late filing, outlining reasons and expected filing dates.FDICIA compliance is a vital step for community banks aiming to ensure operational integrity and sound financial management. By following these steps, banks can achieve compliance, meet regulatory demands, and strengthen internal controls, enhancing both operational stability and stakeholder confidence. For further guidance on FDICIA compliance and effective internal control practices, our team offers insights and solutions tailored to community banks, helping you meet regulatory expectations and prepare for continued growth.ABOUT THE AUTHOR: LUKE GORE, CPA, PRINCIPAL, YHB | CPAS & CONSULTANTS Luke specializes in assurance and regulatory compliance for community banks. An leader at YHB, he delivers training, industry updates, and speaks at webinars and banking association events across Pennsylvania, Virginia, West Virginia, and Maryland.(continued from page 45)It takes more than good intentions to transform communities. It takes capital, development capacity and trusted partnerships. In our 30+ years, Cinnaire has delivered more than $10 billion in community impact. Overcoming challenges. Solving problems. Backed by a commitment to creating healthy communities that has never wavered.The Return on Investment: Safe, Aordable Homes. Healthy Communities. Better Lives.Transforming Communities. Transforming Lives.CINNAIRE.COM
PA Bankers Association » Winter 2024 45CMYCMMYCYCMYK
46 » PA Bankers Association pabankers.comDARKDEFEND RISK MANAGEMENT SOLUTIONS, LLCAI-Powered Fraud Prevention SolutionsChuck Diulus, (412) 697-9125cdiulus@threatadvice.comDEALERTRACK COLLATERALMANAGEMENT SERVICES, INC.Electronic Lien and Title ProgramTiani Chambers, (717) 255-6928tchambers@pabankers.comBANK HEALTH CARECONSORTIUM OF PAA Unique Health Care Alternative for PA-Based Financial Institutions and Aliate Members of the PA Bankers AssociationWayne Whipple, (717) 255-6925wwhipple@pabankers.comPA Bankers Services CorporationSelect Vendors Provide PA Bankers MembersSAVINGS, SERVICE AND QUALITYABA INSURANCE SERVICESBond, D&O, P&C, Cyber Insurance and Employment Practices LiabilityPatricia Williams, (216) 220-1280pwilliams@abais.comCOMPLIANCE ALLIANCEA Family of Bank Compliance ServicesThat Includes Compliance Alliance, Review Alli-ance and Virtual Compliance OcerTiani Chambers, (717) 255-6928tchambers@pabankers.comBANZAI!Interactive, Award-Winning CourseTeaching Students Real-WorldFinance, No Upfront CostKatie Rigby, (801) 821-9055katie@banzai.orgCOMMONWEALTH CHARITABLEMANAGEMENTApplication and Administrationof EITC ProgramsCristine Clayton, (570) 278-3800cclayton@commonwealthcharitable.orgBANKTALENTHQDiversity is Essential -Find Talent in all the Right PlacesTiani Chambers, (717) 255-6928tchambers@pabankers.comBANK PERFORMANCE REPORTA Proven Tool for Improving SuccessQuarterly performance reports subscription available for all states; custom/historical reports upon requestTiani Chambers, (717) 255-6928tchambers@pabankers.comCORNERSTONE ADVISORSCore, Debit EFT, Card Program, LoanOrigination, Bill Pay, Mobile Banking &ATM Contract NegotiationJennifer Wagner, (480) 425-5204jwagner@crnrstone.comVendor selections and recommendations are made in accordance with PA Bankers Services Corporation’s stated mission. It is believed that the promoted products and services merit strong consideration by PA Bankers member banks. PA Bankers Services Corporation due diligence and selection criteria should not be construed as a guarantee, as the ultimate appropriateness may vary from bank to bank. In addition, member banks are encouraged to conduct their own due diligence reviews of recommended vendors. Remuneration received by PA Bankers Services Corporation is utilized in-part to support the PA Bankers Association through contracted agreements, corporate sponsorships and overhead coverage. This nancial support expands resources and strengthens the services and programs of the PA Bankers Association.DELUXE CORPORATIONCheck ProgramTodd Wroblewski, (724) 625-5599todd.wroblewski@deluxe.comENVIRONElectricity and Natural Gas Procurement Services, Utilities Management PlatformKathryn S. Allen, (667) 330-1161KAllen@APPIEnergy.comVendors with the green outline provide products and services to both nancial institutions and Affiliate Members.
PA Bankers Association » Winter 2024 47EVOLVMerchant Processing, Search EngineOptimization, Website Design and SocialMedia ManagementNellie Schlachter, (888) 311-7248x3009nschlachter@poweredbyevolv.comINNOVATIVE FINANCING SOLUTIONS, LLC.Your Trusted SBA/USDA ExpertsMichael D. Ryan, (610) 733-9955mryan@innovfs.netPAYLOCITYHCM Solutions andEngagement SoftwareLisa DeJoy, (717) 303-7663ldejoy@paylocity.comMARKETSCANImmediate Financial Impact Through NegotiationsWayne Whipple, (717) 255-6925wwhipple@pabankers.comINVESTORS TITLEINSURANCE COMPANYMulti-Bank Owned TitleInsurance ProgramKaren Barnett, (419) 577-5900kbarnett@invtitle.comKLARIVISData Analytics Solution Designed by Bankers for BankersAmber Robinson, (603) 860-3162amberrobinson@klarivis.comWEBBER ADVISORSMultiple Medical, Drug, Dental &Vision Options and EB SolutionsBrad Webber, (814) 695-8066bwebber@lrwebber.comNCONTRACTSIntegrated Compliance, Vendor and Risk Management, Board Encouragement PlatformKara D'Argenzio, (412) 370-4391kara.dargenzio@ncontracts.comNFP EXECUTIVE BENEFITSBOLI, Executive Compensationand Long-Term CareDavid Shoemaker, CPA/PFS, CFP®(901) 754-4924david.shoemaker@nfp.comPWCAMPBELLDesign-Build, Branded Environments, Technology Solutions, Consulting ServicesErin Campbell, (800) 253-7430erin.campbell@pwcampbell.comHARTMAN EXECUTIVE ADVISORSFractional IT and Cyber LeadershipShea Gabrielleschi, (410) 600-3329sgabrielleschi@hartmanadvisors.comVIKAR TECHNOLOGIES, INC.Digital Account Opening and Lending Solutions: One View, One Vendor, One VikarNancy Schneier, (973) 495-4835nancy@vikartech.comODP BUSINESS SOLUTIONSOce and banking supplies, furniture, print and copy services, promotional products and moreTiani Chambers, (717) 255-6928tchambers@pabankers.comTHE PLATEAU GROUP, INC.Tailored Credit Enhancement and Debt Protection SolutionsWayne Whipple, (717) 255-6925wwhipple@pabankers.comTHE BAKER GROUPAsset/Liability ManagementSoftware and ServicesCharles Amis, (405) 415-7231Charlie@gobaker.comPNC FIRSTPreferred Derivatives ProgramAmber L. Evanco, (724) 689-2178amber.evanco@pnc.comASSET EXCHANGEOnline Marketplace Jack Payne, 610-295-5555jack.payne@pnc.com
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