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QUARTER 3 | VOLUME 22.2REFLECTIONS FROM PAST CHAIRS2020-2021 BOARD MEMBERSWelcomingWelcoming
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PA Bankers Association » Quarter 3, 2020 3thisISSUEIN EVERY ISSUEFEATURES6 Chairman’s Insights8 From the CEO to the CEO10 Ten on Page Ten12 Community Corner28 Government Relations38 A Look Ahead42 From Your Peers44 Vendor Articles18 Welcome 2020-21 New Board Members20 Meet Your New Vice Chair22 Reecting on 125 Years24 Reections from Past Chairs26 #BanksNeverAskThat Anti-Phishing Campaign12QUARTER 3 | VOLUME 22.2REFLECTIONS FROM PAST CHAIRS2020-2021 BOARD MEMBERSWelcomingWelcomingWELCOMING 2020-21BOARD MEMBERSon the cover20
4 » PA Bankers AssociationPA Bankers Association 54 Volume 21.1 | Quarter 1C/A COMPLIANCE PRODUCTS BY TOOL TYPECalculatorsCheat SheetsChecklistsFormsPolicy ToolsProceduresSummariesRisk AssessmentsTrainingPast EventsCOMPLIANCEAUDITBSARISK ASSESSMENTACCOUNTINGINFORMATION TECHNOLOGYSTAFF TRAININGHUMAN RESOURCESADVERTISING / MARKETINGDEPOSIT OPERATIONSLOAN OPERATIONSCOST CENTERSREVENUE CENTERSALL-INCLUSIVE PRODUCTS
PA Bankers Association » Quarter 3, 2020 5PA Bankers STAFF DIRECTORYGeneral Phone/Switchboard (717) 255-6900President & Chief Executive Ocer J. Duncan Campbell III firstname.lastname@example.org | (717) 255-6916External RelationsAmy L. Doyle, External Relations Administrative Assistant email@example.com | (717) 255-6937Erin L. Kanter, Director, Advocacy & Government Relations firstname.lastname@example.org | (717) 255-6910Daniel J. Reisteter, Vice President, Government Relations email@example.com | (717) 255-6933Federal Government Relations & General CounselLisa R. Brandt, Legal Assistant firstname.lastname@example.org | (717) 255-6936Louise A. Rynd, Esq., General Counsel email@example.com | (717) 255-6935Finance & OperationsJill A. Ametrano, Registrar and Records Coordinator firstname.lastname@example.org | (717) 255-6927Michelle L. Bosch, Receptionist and Administrative Assistant email@example.com | (717) 255-6900Connie A. Ferraro, Director, Information Technology firstname.lastname@example.org | (717) 255-6921Sara E. Hocker, Director of Marketing & Communications email@example.com | (717) 255-6912Annette M. Moshgat, Director, Finance firstname.lastname@example.org | (717) 255-6938Michelle L. Staton, Senior Vice President, Finance & Operations email@example.com | (717) 255-6923Courtney M. Young, Communications & Marketing Coordinator firstname.lastname@example.org | (717) 255-6915Member Relations, Professional Development & PA Bankers Services CorporationJacqueline A. Catalano, Vice President, Professional Development email@example.com | (717) 255-6939Tiani A. Chambers, Director, PA Bankers Services Corporation firstname.lastname@example.org | (717) 255-6928Karen J. McDermott, Director, Member Relations email@example.com | (717) 255-6914Linda A. Scott, Member Relations Administrative Assistant firstname.lastname@example.org | (717) 255-6903Cynthia L. Wallett, Senior Vice President, Member Relations and Professional Development, and Managing Director, PA Bankers Services Corporation email@example.com | (717) 255-6913Wayne R. Whipple, Vice President, Business Development firstname.lastname@example.org | (717) 255-6925Marilyn M. Wisniewski, Director, Residential Schools & Meeting Operations email@example.com | (717) 255-6934magazineSTAFF Managing Sara E. Hocker Editor Editorial J. Duncan Campbell III Advisors Jacqueline A. Catalano Tiani A. Chambers Daniel J. Reisteter Louise A. Rynd Michelle L. Staton Cynthia L. Wallett Wayne R. Whipple Courtney M. YoungPA Bankers Services Corporation Board of Directors and Ocers President Jennifer A. Poulsen Secretary M. Theresa Schwartzer Treasurer J. Duncan Campbell III Ocers Gerard A. Champi Trudy K. Everhart Timothy M. Finnerty Scott E. Fritz Richard L. Greslick Timothy G. Henry Karl F. Krebs David E. Raven Jerey A. Stopko Tracy E. Watkins Dale A. Westwood Address Correspondence to: paBanker Magazine c/o Pennsylvania Bankers Association 3897 N. Front St., Harrisburg, PA 17110 Tel. (717) 255-6912 E-mail: firstname.lastname@example.orgBanker 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.Postmaster, send all address changes to:paBanker Magazine 3897 N. Front St., Harrisburg, PA 17110Printed by: HAAS Printing CoSponsored by:
6 » PA Bankers Associationt is my great honor to serve as the PA Bankers chair for 2020-21, as I’m privileged to follow in the footsteps of so many great men and women who have chaired the Pennsylvania Bankers Association during its 125 years of existence. Today, we are considered one of the nation’s leading state associations, investing in the future growth and success of the financial services industry. I am proud to take the handoff from Mike Price, who led us so effectively during the past year, most notably navigating through the COVID-19 crisis and initial stages of its economic impact. We thought we would be honoring Mike for his efforts in Bermuda and celebrating his association year by enjoying each other’s company in-person. Instead, we recognized Mike at our first virtual Annual Meeting in early June. This adjustment enabled us to convene as an industry to advance the Association’s business and welcome new officers and board members. Relationships have always been at the core of our PA Bankers IRelationships Are At Our CoreAdapted from his June 2020 Virtual Annual Meeting Remarks J. BRADLEY SCOVILLPresident & CEOC&N Association, built over time through our shared experiences and tested and strengthened by the difficult challenges we have faced. Providing our industry with the ability to do well while we do good. While not surprising, it has been impressive to once again see our bankers come together during COVID to serve our customers, communities, commonwealth and nation. These bonds have allowed us to learn from each other, share ideas with each other, and help each other through the past several months in a manner that has strengthened our association and industry for the future. Relationships matter. You don’t need them until you do, and they can’t be built “just-in-time” to deal with a significant challenge. And now we have another major issue to address as a nation – racism. There are no short-term, easy solutions to this societal challenge. However, the anger, sadness and frustration of recent events serve as a catalyst for more listening, understanding and introspection. Our response will require us as Pennsylvania bankers to engage and be open to diverse perspectives and innovative ideas, while drawing on established relationships within our banks and our communities, across the industry and with policymakers in all parties. We have a long history of galvanizing as an industry during times of crisis and responding to change. Recently, our initiatives to develop Women in Banking and Emerging Leaders programs, focus on civility and engagement, tell our story and enhance our alignment around advocacy, develop partnerships with the Bankwork$ program and CSBS case study participation, and prioritize diversity and inclusion and digital banking reflect our capacity to lock arms and take actions that have lasting impact. So we will lock arms and take action again as we leverage all of PA Bankers’ existing resources and work together to restore Pennsylvania’s post-COVID economy. We will also collaborate to build a sustainable action plan for a diversity and inclusion initiative that will strengthen the industry and our communities chairman’sINSIGHTS
PA Bankers Association » Quarter 3, 2020 7over time. As always, our bankers will work side by side—small community banks, regional banks, larger banks, women and men of all races and backgrounds – because the fabric woven of all those relationships makes us a stronger industry.We will emerge from this time with a refreshed commitment to serving our customers and communities and a focus on delivering services in ways that create value. Responding to COVID required us to look inward to deal with the daily challenges that were constantly front of mind; now is the time for us all to look outward and focus on our future - our industry’s future, our customers’ future and our commonwealth’s future. And, as always, PA Bankers will be at the center of leading us into that future.As your 2020-2021 PA Bankers chair, working with our committed and talented board of directors, I stand on the shoulders of Mike Price and the leaders that came before him to further the good that they have started. Thank you for the trust that you have placed in me and the other officers, along with the incoming board of directors.In Times of Uncertainty, Trust Boxwood Means to Deliver Predictable CRE Property Valuation Services®BoxwoodMeans.coM/LendersPlace Your Next Order with Boxwood MeansON-TIMEFIXED FEESLESS COSTLYACCURATENATIONWIDEAUTOMATEDCOMPLIANT FASTRETAILPROACTIVETHOROUGHVETERAN APPRAISERSDATA RICHPRUDENT ANALYSISINTEGRATED INSPECTIONSEFFICIENTOFFICETRACKABLEINDUSTRIALTRUSTWORTHYCLIENT FOCUSEDHANDS-ONCOLLABORATIVERESPONSIVEFLEXIBLETECH-INTENSIVECONVENIENTMIXED USERUSH OPTIONSMULTIDASHBOARD ACCESSFAMILYFieldSmart evaluat i onS ■ FieldSmart reStricted appraiSalSContact Dave Colonna ■ Telephone 203.653.4100 x121Email David.Colonna@BoxwoodMeans.comVALUEWe look forward to serving PA Bankers with the same passion, dignity and respect upon which the Pennsylvania Bankers Association was founded in 1895.Thank you very much.
8 » PA Bankers Associatione have already had such a unique year, and yet 2020 has another quarter left to go. What else can possibly happen? It is hard for any of us to predict what to expect, as we claw our way out of this COVID-19 pandemic. The PA Bankers Board of Directors met virtually last month for our strategic board retreat, and the economic impact of this health emergency was on everyone’s mind. Future economic conditions are so uncertain—credit quality, continued interest rate compression, an inverted/flat yield curve. How long will this health crisis continue, and what are the lasting economic effects? At the state level, how does the state government address a $3-5 billion hole in the state budget? These are all pertinent and concerning questions, both for our customers and our banks, themselves.Equally important, the board spent significant time talking through the issue of diversity and inclusion with Mr. David Motley, founder of the African American Directors Forum. David helped us think through the positive effects that our financial A SummerLike No Otherinstitutions will realize through the development of a diverse and inclusive workforce. We have work to do, both as an industry and as an association, but this was a focused starting point of a purposeful and intentional discussion. I am grateful that as part of this retreat discussion the board authorized the establishment of a D&I Advisory Council. This group will look across the association enterprise to review our volunteer efforts, with specific interest in building more diversity within our association boards and committees. Additionally, this advisory group will help us look at opportunities for D&I training for our members and evaluate potential partnerships that will help to support our recruitment, retention and advancement efforts. We thank our members and professional friends who have agreed to give their time to this initiative, and we look forward to benefiting from their experience and expertise.The second day of the retreat included a presentation by Rob Nichols, president and CEO of the American Bankers Association, who provided us with a Washington update, updated us about the current CARES 2.0 legislation, and offered us some election forecasting for Nov. 3. Regardless of the election’s outcome, we remain concerned that our efforts during this COVID-19 crisis will not be viewed consistently by the federal regulators during their examinations. We hope that they will follow the interagency statement that was issued by the FFIEC in June, stating that “The agencies have issued numerous statements related to supervisory policy since the declaration of the national emergency. Appropriate actions taken by institutions in good faith reliance on such statements, within applicable timeframes described in such statements, will not be subject to criticism or other supervisory action.” The banking industry has received so many positive comments from the federal and state regulators, lauding us for our efforts during this crisis. In Pennsylvania alone, we originated more than 173,000 Paycheck Protection Program loans, equating to more than $20.7 billion of loans for Pennsylvania’s small businesses. Hundreds of thousands of jobs were saved because the banking industry worked around the clock to ensure the survival of their local small businesses. And, the PPP was just one from the CEO to the CEODUNCAN CAMPBELLPresident & CEO, PA Bankers AssociationW
PA Bankers Association » Quarter 3, 2020 9example of how banks served their customers during this time of need—loan modifications, forbearance offerings and fee waivers all were provided by banks to their customers. At the state level, we were pleased to have the Senate Banking & Insurance Committee Chairman Mario Scavello join the retreat and offer us a state legislative update. Chairman Scavello represents parts of Monroe and Northampton Counties. He recognized the significant efforts of the banking industry during the pandemic, especially with regards to PPP loans to Pennsylvania’s small businesses.We concluded the retreat with a discussion about our training efforts for this association year. In practicality, we may not be back in person together until 2021. But, we still have important education and professional development seminars, conferences and schools to offer the membership. We will continue to work with you to ensure that we are meeting your needs and ask that you join us for our virtual trainings. There are important regulatory and industry topics that our banks need to understand. We hope you will join us by video for the training sessions and member relations opportunities that meet your needs.I want to thank you all, again, for all that you are doing for your customers and communities. Your PA Bankers staff is here to support you. Please reach out to us and let us know how we can assist your efforts. We will continue to get through this pandemic, and we will get through it together. Take care and stay well!Sincerely,CINNAIRE.COMIt takes more than good intentions to transform communities. It takes capital, development capacity and trusted partnerships. For over 25 years, we’ve been connected to and involved in the communities we serve. We’ve listened and learned, and consistently turned intentions into real transformation. And with more than $7.3 billion in community impact, our commitment to creating healthy communities has never wavered. The Return on Investment: Safe, Aordable Homes. Healthy Communities. Better Lives.Transforming Communities. Transforming Lives.
10 » PA Bankers Association*The Baker Group LP is the sole authorized distributor for the products and services developed and provided by The Baker Group Software Solutions, Inc.Oklahoma City, OK | Atlanta, GAAustin, TX | Indianapolis, IN | Long Island, NYSalt Lake City, UT | Springﬁeld, ILRyan@GoBaker.comwww.GoBaker.com800.937.2257Member: FINRA and SIPCThe Baker GroupIs Here to HelpAs American ﬁnancial institutions—along with the rest of the world—face unprecedented times, The Baker Group is ready with tools and services to help maximize the performance of your institution.That’s why we’re oering new clients our Software Solutions* service package for a six-month free trial. Not only will you have access to our latest market research and insight from our Financial Strategies Group, you’ll be included in all of our webinars. There you’ll hear the latest on how COVID-19 could impact your institution and its investment portfolio.Baker’s Software Solutions Service Package Includes:Asset/Liability Analysis – Interest Rate Risk Monitor (IRRM®)Your management team will ﬁnd that The Baker Group’s quarterly review of the loan and deposit information outlined in the Interest Rate Risk Monitor and Asset Liability Analysis is an eective tool in managing your risk and performance.Baker Bond Accounting® (BBA)The Baker Group will provide you with accurate, easy-to-read reports delivered electronically to you each month.Investment Analysis – Advanced Portfolio Monitor (APM®)The Advanced Portfolio Monitor is a key monthly report that we utilize to help you measure, monitor, and manage the overall risk and performance of your investments.To obtain the resources you need to maximize the performance of your bank, contact Ryan Hayhurst with our Financial Strategies Group at 800.937.2257, or via email at Ryan@GoBaker.com.Stay Connected with PA Bankers!tenONpageTENThe beginning of 2020 has been a learning experience for all of us. Working from home, wearing masks and social distancing are all part of the new normal for our industry. The association staff has been hard at work to ensure our members are getting the most up-to-date information, while still providing various training opportunities. Check out these 10 ways to stay engaged with PA Bankers while working remotely.1» NEW WEBSITE: If you have not already noticed, we recently released our new website, www.pabankers.com, which makes it much easier to navigate everything PA Bankers has to offer. 2» WEBSITE RESOURCES: With a new website comes new resources. The website now features new COVID-19, digital banking and diversity and inclusion resources, while still housing a platform for member resources and products and services offerings. 3» NEW APP: We have developed an app to make our event information more easily accessible to our members. The new app includes an event calendar with the capability to register for events at the touch of a finger, receive event alerts and access event handouts exclusive to registered attendees. The app also includes news updates, member resources, products and services, and advocacy information. Be sure to download the PA Bankers app in the Apple App or Google Play Stores in order to access all of these resources. 4» PA BANKERS VIRTUAL TRAININGS: In an effort to continue to provide training and events to our members during the pandemic, we have switched all in-person events to virtual trainings for the remainder of 2020. Be on the lookout for emails from the association to register for these events.5» AMERICAN BANKERS ASSOCIATION: The ABA is a great source for even more online training, offering facilitated and self-paced online training through the ABA Training Program. Be sure to access these trainings through the PA Bankers website to receive a member discount.6» ONCOURSE LEARNING: Formally TTS, OnCourse Learning provides live or on-demand webinars to your financial institution on banking-specific topics. From the convenience of your desktop, you can get additional training on everything from audits, to compliance, to customer service, to marketing and more, perfect for social distancing. 7» PEER EXCHANGE CALLS: We will continue to host peer exchange calls to provide a space for our members to communicate new information, issues and positive achievements. 8» EMERGING LEADERS NETWORK: The Emerging Leaders Committee will be launching an initiative to allow complimentary individual membership for the Emerging Leaders Network. This membership will allow the association to identify bankers who wish to engage with the initiative and permit the committee to grow the network and encourage regional networking, mentorship, training and development. 9» PA BANKERS CHAMPIONS: Learn about how the association can assist your bank and your colleagues by becoming a PA Bankers Champion for your bank. The PA Bankers Champions program provides your institution a source for information about educational opportunities, advocacy, communications, access to resources, profitability enhancements and more.10» COMMITTEE VOLUNTEER OPPORTUNITIES: Interested in participating in or shaping the future of PA Bankers as we continue to navigate through the pandemic? Members can self-submit a volunteer recruitment form and/or be nominated by another PA Bankers member to serve on our board or one of our many banking-related policy, advisory or standing committees. We are committed to providing all these resources and more to our members during these unprecedented times. Stay engaged with PA Bankers while you navigate through the new normal.
PA Bankers Association » Quarter 3, 2020 11*The Baker Group LP is the sole authorized distributor for the products and services developed and provided by The Baker Group Software Solutions, Inc.Oklahoma City, OK | Atlanta, GAAustin, TX | Indianapolis, IN | Long Island, NYSalt Lake City, UT | Springﬁeld, ILRyan@GoBaker.comwww.GoBaker.com800.937.2257Member: FINRA and SIPCThe Baker GroupIs Here to HelpAs American ﬁnancial institutions—along with the rest of the world—face unprecedented times, The Baker Group is ready with tools and services to help maximize the performance of your institution.That’s why we’re oering new clients our Software Solutions* service package for a six-month free trial. Not only will you have access to our latest market research and insight from our Financial Strategies Group, you’ll be included in all of our webinars. There you’ll hear the latest on how COVID-19 could impact your institution and its investment portfolio.Baker’s Software Solutions Service Package Includes:Asset/Liability Analysis – Interest Rate Risk Monitor (IRRM®)Your management team will ﬁnd that The Baker Group’s quarterly review of the loan and deposit information outlined in the Interest Rate Risk Monitor and Asset Liability Analysis is an eective tool in managing your risk and performance.Baker Bond Accounting® (BBA)The Baker Group will provide you with accurate, easy-to-read reports delivered electronically to you each month.Investment Analysis – Advanced Portfolio Monitor (APM®)The Advanced Portfolio Monitor is a key monthly report that we utilize to help you measure, monitor, and manage the overall risk and performance of your investments.To obtain the resources you need to maximize the performance of your bank, contact Ryan Hayhurst with our Financial Strategies Group at 800.937.2257, or via email at Ryan@GoBaker.com.
12 » PA Bankers AssociationcommunityCORNER1ST SUMMIT BANK Gets Creative with Community Involvement and Social Distancingpril is Child Abuse Awareness Month and 1ST SUMMIT BANK joined the community-wide effort to raise awareness. While also supporting social distancing, 1ST SUMMIT BANK is doing what it can through donations like this to Circle of Support Child Advocacy Center. The Cambria County nonprofit's program Pinwheels for Prevention brings attention to the bright future all kids deserve and how we can help reduce the trauma suffered by victims of child abuse. 1ST SUMMIT BANK is sharing their support with customers doing their banking at their drive-thru in Richland. The display of pinwheels serves as a symbol of the positive effect we can have when we all work together. ADerek Partsch, Public Relations Specialist for 1ST SUMMIT BANK, plants pinwheels at the Richland Office in Johnstown, Pa.1ST SUMMIT BANK Helps 22 Food Banks Feed Their CommunitiesST SUMMIT BANK donated $6500 to 22 food banks in five counties and answered the call for help when these organizations needed it the most. With unemployment soaring and kids not able to eat at school, more people than ever are turning to their local food banks for basic sustenance. These food distribution centers are seeing at least a 50-percent increase in the number of visitors, many for the very first time. Food banks are struggling to meet this increased need at a time when food supplies are at their lowest. With the current run on groceries, stores have less provisions to donate while, at the same time, less people are donating. These local nonprofits are calling for our help. Thanks to 1ST SUMMIT, food banks in Cambria, Somerset, Indiana, Westmoreland and Blair Counties can feed an additional 65,000 meals to their communities.F&M Trust Donates $100K to Support COVID-19 Relief Effortsn response to the current health crisis, F&M Trust recently announced a donation of $100,000 to support COVID-19 relief efforts in Central Pennsylvania.The contribution will provide those on the front lines of the coronavirus crisis, including first responders and nonprofit organizations, with the resources they need to act quickly and protect the most vulnerable.Among the organizations receiving funds from F&M Trust are the United Way chapters in Franklin County, Carlisle/Cumberland County, Shippensburg and the Greater Harrisburg/Capital Region. Relief funds will also be distributed to first responders, including fire companies and EMS units that support F&M Trust’s 22 Community Offices across Central Pennsylvania. Additionally, funds from the donation will be disbursed to the Fulton County Family Partnership.1IContact: Shelby White Corporate Communications Officer (717) 262-7565 email@example.com For Immediate Release April 23, 2020 F&M Trust Donates $100K to Support COVID-19 Relief Efforts CHAMBERSBURG, Pa – In response to the current health crisis, F&M Trust today announced a donation of $100,000 to support COVID-19 relief efforts in Central Pennsylvania. The contribution will provide those on the front lines of the coronavirus crisis, including first responders and nonprofit organizations, with the resources they need to act quickly and protect the most vulnerable. Among the organizations receiving funds from F&M Trust are the United Way chapters in Franklin County, Carlisle/Cumberland County, Shippensburg and the Greater Harrisburg/Capital Region. Relief funds will also be distributed to first responders, including fire companies and EMS units that support F&M Trust’s 22 Community Offices across Central Pennsylvania. Additionally, funds from the donation will be disbursed to the Fulton County Family Partnership. “For over a century, F&M Trust has been supporting our communities in times of need, and now is no different. As a community bank, we view it as our responsibility to help the people in our communities who are struggling to keep their families housed and fed during this outbreak,” said Tim Henry, President and CEO of F&M Trust. “Now, more than ever, F&M Trust is stepping up to be a force for good for our neighbors in Central Pennsylvania. We believe together, we will get through this unprecedented challenge.” Of the bank’s donation, $10,000 was contributed by the employees of F&M Trust. Henry added: “This $10,000 contribution is a testament to F&M Trust employees, who selflessly give of their time and money year after year to support local organizations. This outpouring of charity and goodwill does not surprise me, but it nevertheless makes me proud.” F&M Trust continues to serve its customers through drive-up services, ATMs, online banking, mobile banking and telephone banking. The bank also provides banking services that require an in-person meeting by appointment only. To find the most up-to-date information about F&M Trust’s response to the coronavirus pandemic, please visit fmtrust.bank/covid-19.
PA Bankers Association » Quarter 3, 2020 13id Penn Bank recently presented more than 100 first responder organizations in Pennsylvania with a total of $22,000 through the bank’s First Responders Donation Program. The donations were made through Mid Penn Bank and Scottdale Bank & Trust, a division of Mid Penn Bank, located in Western PA.The First Responders Donation Program was instituted by the bank to thank the fire companies, ambulance associations and other organizations that protect and serve the local community. The program rewards first responders with a donation calculated from their average account balance.Mid Penn Bank is strongly committed to supporting charitable organizations through various means, including corporate donations, employee volunteerism and fundraising. The First Responders Donation Program demonstrates just a fraction of the charitable giving Mid Penn Bank distributes to its communities each year. Mid Penn regularly contributes to causes including health and human services, community improvement and education.Do you have hometown happenings that you'd like to share?Send your bank's community news to Courtney Young, PA Bankers' communications & marketing coordinator (firstname.lastname@example.org), for a chance to be featured in paBanker Magazine or on PA Bankers' social media channels and website.Mid Penn Bank contributes $22,000 through First Responders Donation ProgramM
14 » PA Bankers AssociationcommunityCORNERNEW TO PA BankersAffiliate Members:• Cost Control Associates• Fintel ConnectFinancial Institutions:• Centre 1st BankWelcome&N recognizes the importance of investing in local education with $500,000 in donations to area educational improvement and scholarship organizations.Education is key to a strong and prosperous community. However, there are many roadblocks preventing children from receiving the level of education they deserve. C&N is committed to closing this gap by supporting local organizations that have made it their mission to make sure every child has access to the educational opportunities. By investing in youth, the bank is putting the local economies on the path to sustained growth and giving the children more opportunities to thrive.The following organizations in Tioga County were presented with checks to support their mission for providing strong educational programs:• Wellsboro Area School District (Through the Tioga County Foundation) — $17,000• Southern Tioga Area School District (Through the Tioga County Foundation) — $13,000• Northern Tioga Area School District (Through the Tioga County Foundation) — $15,000• General Council of Assemblies of God — Covenant Scholarship Organization — $8,000• Trinity Lutheran Church and School — $11,000In addition to these organizations, C&N supported other educational program throughout their footprint including:Bradford County — Athens Area School District, $18,000; Epiphany Academy Scholarship, $8,000; Saint Agnes Academy Scholarship, $8,000; Sayre Area School District, $7,000; Sullivan County Area School District, $10,000; Towanda Area School District Foundation, $18,000; and Troy Area School District, $18,000.Bucks County — Big Brothers Big Sisters of Bucks County, $5,000; Bucks County Community College Foundation, $2,000; Bucks County Free Library, $2,000; Bucks County Historical Society, $17,000; CB Cares Educational Foundation, $12,000; Centennial Education Foundation, $7,000; Council Rock Education Foundation, $18,000; Foundation for Learning in Tredyffrin/Easttown, $2,000; Lakeside Youth Services, $2,000; The Pathway School, $2,000; Central Bucks Area School District, $18,000; West Chester Area Education Foundation, $2,000; YMCA of Bucks County, $17,000; Center School, $35,000; Henkels Foundation — Plumstead Christian Academy, $35,000; and Malvern Preparatory School, $5,000.Lycoming County — Pennsylvania College of Technology Community Arts Center, $40,000; Pennsylvania College of Technology Foundation, $4,000; St. John Neumann Regional Academy Scholarship, $15,000; and First Community Foundation Partnership of Pennsylvania, $180,000 allocated towards 18 school districts, including ones in Lycoming County.Potter/McKean/Cameron County — Austin Area School District, $4,000; Coudersport Area School District, $14,000; Galeton Area School District, $7,000; Port Allegany Area School District, $7,000; and Cameron County Area School District, $12,000.Mark Hughes (left), EVP, director of financial division, and Thomas Rudy, EVP, director of branch delivery, present $500,000 check to area educational improvement and scholarship organizations.C&N Donates $500,000 to Support Education C
PA Bankers Association » Quarter 3, 2020 15CNB Bank launched a special initiative earlier this year, ACNB Helping Hands, that serves to reinforce the bank’s ongoing commitment to community during the challenging times when the COVID-19 pandemic dramatically impacted local businesses and residents. This program, funded by both ACNB Bank and its affiliated employees, provided nearly 6,000 meals prepared by 16 restaurants and catering businesses (which are bank customers) that were then distributed during recent months to people in need through 16 local community organizations across the bank’s southcentral Pennsylvania and northern Maryland footprint. In ACNB Bank’s southcentral Pennsylvania markets, the business partners included:• CJ’s BBQ Smokehouse in Chambersburg;• Ernie’s Texas Lunch in Gettysburg;• Firehouse Grill in Littlestown;• La Bella Italia in Gettysburg;• Little Everett’s BBQ in Hanover;• Mamma’s Pizzeria and Ristorante in Biglerville;• Maria & Sal’s Pizzeria in Fayetteville;• Olivia’s Mediterranean Cuisine in Gettysburg; and • The Altland House in Abbottstown. Collectively, these bank restaurant and catering customers provided 3,033 meals through eight community organizations---Adams County Housing Authority, Adams Rescue Mission, Clearview Terrace Apartments, Gettysburg Community Soup Kitchen, Hanover Area Council of Churches, Our Daily Bread, Franklin County Housing Authority and Salvation Army Chambersburg. Helping Hands efforts in Frederick County, Maryland, where FCB Bank, a division of ACNB Bank, is located, resulted in partnerships with three Frederick restaurant customers, including Black Hog BBQ, Dutch’s Daughter and Ilforno Pizzeria, to furnish 1,291 meals to local residents through the three community organizations of Frederick Community Action Agency, Frederick Rescue Mission and Student Homelessness Initiative Partnership. In Carroll County, Maryland, NWSB Bank, a division of ACNB Bank, worked with four restaurant and catering customers---Bess and Ben’s Country Kitchen Restaurant in Taneytown, Maggie’s Restaurant in Westminster, The Buttersburg Inn in Union Bridge and The Food Chick in Westminster---to collectively provide 1,271 meals to five organizations serving residents throughout Carroll County including the Boys and Girls Club of Westminster, Caring Carroll, Inc., Human Services Programs of Carroll County, Inc., Salvation Army of Carroll County and Together We Own It. Staff members of Russell Insurance Group, Inc., a full-service insurance agency and affiliate of ACNB Bank headquartered in Westminster, Md., contributed to the outreach efforts in this region of the bank’s footprint. Additionally, through ACNB Helping Hands, ACNB Bank staff members reached out to local nursing home residents by making nearly 1,000 greeting cards and offering words of encouragement during this time of isolation when residents are without visitors. A greeting card was also enclosed in each of the meal packages distributed to homebound and elderly residents served through the Meals on Wheels program that is affiliated with the Hanover Area Council of Churches in Hanover, Pa. ACNB Bank Shares Results of Helping Hands InitiativeA
16 » PA Bankers AssociationcommunityCORNERhe Dime Bank donated $3,500 to the Wayne County Emergency Relief Fund through the Wayne County Community Foundation (WCCF). This donation was made up of two amounts: $2,500 from The Dime Bank and $1,000 passed on by the bank from employees who chose to donate to the Emergency Food Relief Fund rather than have a celebratory anniversary dinner. The food program was pleased to hear that the employees chose to have the dollars donated to those who really need to put food on their tables. The Emergency Relief Fund coordinators want to emphasize the importance of not only corporate giving, but individual giving, and how every amount, no matter how small, can make a difference.The goal of the Wayne County Emergency Relief Fund is to ensure the community does not go hungry during these difficult times. To date, the Wayne County Emergency Relief Fund has raised over $160,000, made up of over 500 donations from individuals, foundations and businesses. As of April 24, 2020, the distribution in collaboration with the Wayne County Pantry Program, assisted 777 families. Families received grocery bags, which served about 3,000 people. This program is helping the overall communities because although the distribution sites are in Wayne County, the recipients do not need to be Wayne County residents. The Dime Bank Donates to the WCCF Wayne County Emergency Relief FundTURBAN IMPACT FOUNDATIONThe Urban Impact is a community development organization located on the North Side of Pittsburgh. They annually serve over 2,300 at-risk children and youth by providing 60+ programs in athletics, education, performing arts and options. NexTier Bank and #TravelingCheck – EITC PresentationsEarlier this year, NexTier Bank’s #TravelingCheck made EITC presentations to the following organizations:THE PITTSBURGH PROMISEThe Pittsburgh Promise has awarded almost 10,000 post-secondary scholarships to Pittsburgh Public Schools graduates over the last 12 years. These young people are bringing fresh talent, energy and diversity to our region’s workforce. Pictured: Peter Ward, Director of Development; Kathryn Balyesele, Executive Assistant; Lisa Owens, Director of Options; Lara Wozniak, NexTier Bank PCS; and Dan Penberthy, NexTier Bank Commercial Lending.Pictured: Sue Kushnereit, NexTier Bank Marketing; Saleem Ghubril, Executive Director of the Promise; Marsha Dugan Kolbe, Director of Development The Pittsburgh Promise; Lara Wozniak, NexTier Bank PCS; and Dan Penberthy, NexTier Bank Commercial Lending.
PA Bankers Association » Quarter 3, 2020 17eoplesBank recently presented 62 organizations throughout South Central Pennsylvania with checks totaling $830,000. These funds represent contributions made by PeoplesBank through Pennsylvania’s EITC program. The 62 organizations who received funding are: Big Brothers, Big Sisters of York County Boy Scouts of America - New Birth of Freedom Boys & Girls Club of Lancaster Byrnes Health Education Center Childrens Home of York Christian School of York Cleve J. Fredricksen Library Association Creative York Crispus Attucks Association, Inc. Cultural Alliance of York County Donegal School District Education Foundation DreamWrights Youth & Family Theatre Eagle Foundation Greater York Center for Dance Education Hanover Foundation for Excellence in Education, Inc. Harrisburg Academy Hempfield Foundation House of Hope - York, PA Joseph T. Simpson Public Library Junior Achievement of South Central PA Keystone Christian Academy Lancaster Country Day Lancaster Education Foundation Lancaster Science Factory Leg Up Farm, Inc. Logos Academy Manheim Central Foundation for Educational Enrichment Manheim Township Educational Foundation Penn Manor School District Education Foundation Polar Bear Foundation Schreiber Pediatric Rehab Center South Eastern Community Education Foundation South Western Education Foundation Southern York County School District Foundation Spanish American Civic Association St. John the Baptist School Saint Joseph School—Mechanicsburg St. Patrick Catholic School Susquehanna Waldorff School The Appell Center for the Performing Arts The Arc of York County The Belmont Theatre The Columbia Education Foundation The Foundation for the West York Area School District, Inc. The Janus School The Lion Foundation Camp Hill School District The Salvation Army, York PA Water Street Ministries West Shore Foundation WITF World Council on Financial Literacy YMCA of York and York County York Academy Foundation York Catholic High School York Country Day School York County History Center York County Library System York Suburban Education Foundation York Symphony Orchestra YWCA of Hanover YWCA of Lancaster YWCA York PeoplesBank Contributes $830,000 to Support Education Within the CommunityPSince the start of this program, PeoplesBank has dedicated over $8 million dollars to help fund these exceptional programs.
18 » PA Bankers Association pabankers.comCHAIR: J. BRADLEY SCOVILL President and Chief Executive Officer, C&N,Wellsboro, Pa. FIRST VICE CHAIR: WESLEY M. WEYMERS President and Chief Executive Officer,The Gratz Bank, Gratz, Pa. SECOND VICE CHAIR: MARK A. RITTER Executive Vice President &Chief Administrative Officer, The Northumberland National Bank,Northumberland, Pa.IMMEDIATE PAST CHAIR: T. MICHAEL PRICEPresident and Chief Executive Officer,First Commonwealth Financial Corporation,Indiana, Pa.CATEGORY A JAMES WANG President and Chief Executive Officer, Asian Bank, Philadelphia, Pa.CATEGORY B ELAINE A. WOODLAND President and Chief Executive Officer,First Keystone Community Bank,Berwick, Pa.CATEGORY C RANDALL E. BLACK President and Chief Executive Officer, First Citizens Community Bank, Mansfield, Pa.CATEGORY DRONALD J. SEIFFERT President and Chief Executive Officer, Northwest Bank, Warren, Pa.Policy Committee Chairs:PROFESSIONAL DEVELOPMENT: GREGORY T. HAYES President and Chief Operating Officer, Kish Bank, State College, Pa.GOVERNMENT RELATIONS: BLAIR T. RUSH President and Chief Operating Officer,Covenant Bank, Doylestown, Pa.MEMBER RELATIONS: DAVID R. HUNSICKER Chairman, President and Chief Executive Officer, New Tripoli Bank, New Tripoli, Pa.2020-21 BOARD MEMBERSWelcomeDeposit Category Representatives:
PA Bankers Association » Quarter 3, 2020 19At-Large Representatives: MARY GRIFFIN CUMMINGS, ESQUIRE Executive Vice President and General Counsel,FNCB Bank,Dunmore, Pa.SUSIE B. SHIPLEY President, Western Pennsylvania and Ohio,The Huntington National Bank,Pittsburgh, Pa.PHILIP H. JOHNSONRegional President,M&T Bank,Williamsport, Pa.FRANCIS J. LETO President and Chief Executive Officer,The Bryn Mawr Trust Company,Bryn Mawr, Pa.Non-Voting Members: JENNIFER A. POULSENSenior Vice President, Chief Operating Officer,Farmers National Bank of Emlenton,Emlenton, Pa J. DUNCAN CAMPBELL IIIPresident, Chief Executive Officer & Treasurer,Pennsylvania Bankers Association,Harrisburg, Pa.2020-21 BOARD MEMBERSWelcomePA Bankers Group Representatives: GROUP 1: JOHN C. GILL President and Chief Executive Officer,cfsbank,Charleroi, Pa. GROUP 2: DUANE J. BROBST Senior Executive Vice President and Chief Credit Officer,Univest Bank and Trust Company,Souderton, Pa.GROUP 3: ANTHONY J. GABELLOPresident and Chief Executive Officer,PS Bank,Wyalusing, Pa. GROUP 4: JEFFREY J. KAPSAR President and Chief Executive Officer,Mifflinburg Bank and Trust Company,Mifflinburg, Pa. GROUP 5: EUGENE J. DRAGANOSKY President and Chief Executive Officer, York Traditions Bank, York, Pa. GROUP 6: JEFFREY A. STOPKO President and Chief Executive Officer,AmeriServ Financial Bank,Johnstown, Pa.
20 » PA Bankers Association pabankers.comYOUR NEW VICE CHAIRMtWe would like to welcome our second vice chair, Mark Ritter, Executive Vice President & Chief Administrative Officer, The Northumberland National Bank. We asked Mark to answer a few of our burning questions. WHAT WAS YOUR FIRST EXPERIENCE AND/OR EVENT WITH PA BANKERS?My first interaction with PA Bankers was back in the 1980s when I took advantage of our tremendous training opportunities. I broke into the business as a commercial lender and had the advantage of being trained through one of the premier bank management training programs at CoreStates. The PA Bankers training I experienced was key to understanding the global banking business and gaining a deeper understanding of other areas of the bank, including retail banking and compliance. Over the past 33 years, I have had the privilege of serving on numerous committees and task forces, most recently as a member of the board of directors.WHAT IS ONE PIECE OF ADVICE THAT YOU HAVE FOR THE NEXT GENERATION OF BANKERS?I would advise our next generation of bankers, just as I have advised my own daughters, to take advantage of every opportunity you are presented to learn about various areas of banking. Diversity of experiences and knowledge is key to moving into leadership and effectively generating value for customers, shareholders, communities and colleagues. Banking is a noble profession because of what we can do to help our constituencies, and the more one learns about our business the more value we can provide.WHAT’S ONE GOAL THAT YOU’D LIKE TO ACCOMPLISH DURING YOUR TIME ON PA BANKERS’ BOARD?I believe it is essential that as an industry we work diligently to educate and inform our fellow citizens about the noble mission of banking and the benefits we work to generate for our economy. This education must be across all segments of our country, with the goal of helping our community members understand what we can do and what they can and should ask of us. It is also vital that we generate excitement about banking as a career across our nation. We need skilled bankers for the future, and it is essential we do a better job recruiting and training bankers from communities that traditionally have not looked to banking as a career option. This must include more females and members of minority communities joining our teams and moving into leadership roles.G to kn Mark bel!
TRANSPARENCY.ACCOUNTABILITY.PREDICTABILITY.How can you improve bank exams?*RFI = Regulatory Feedback InitiativeTake the RFI* survey at www.allbankers.orgTired of exam surprises?By taking our survey you are providing anonymous feedback that will be used to hold regulators to consistent standards. More than 2000 bankers have already participated.Take a stand. Take the survey.
PA BANKERS ASSOCIATION1913The Federal ReserveAct passes Congress.1927The McFadden Act and Pennsylvania Act define the banking structure for national and state chartered banks in PA.1982Legislation authorizing a phased-in approach to statewide branchbanking is enacted in PA. Alliance of State Bankers Associations is formed.1895PA Bankers hosts its first-annual convention on Dec. 18, in Philadelphia, Pa. There were 321 members.1929Stock Market collapses, and the Great Depression begins.1932Federal Home LoanBank Act creates theFederal Home Loanbank structure.1975Home Mortgage Disclosure Act encourages banks to lend mortgage money to low income areas anddocument their process.1933PA Banking Code establishes restrictions on the establishment of new branches by state banks.1949PA Bankers establishes headquarters in Harrisburg and names Carl Dellmuth asSecretary to lead association staff.1974PA Bankersestablishes PaBPACto support advoccyefforts on behalf ofthe industry and itsmembers.1977CommunityReinvestment Actdirects banks tomeet credit needs ofcommunities toinclude low-incomeareas.1978International Banking Act regulates the establishment,operation and control of foreign banks in the U.S.1987Regional recipricol interstate banking legislation is signed into law in PA.1989Helen Strunk becomes the first female chair of PA Bankers. In the wake of the S&L crisis, Congress passes the Financial Institutions Reform, Recovery and Enforcement Act.PA Bankers establishes its first professional school - Trust School was hosted at Bucknell University.19521935The Banking Act establishes the FDIC as a permanent agency of the government andauthorizes the agency to set standards formember banks and the examination of those banks to ensure compliance.1950Federal Deposit Insurance Act revises and consolidates earlier FDIC legislation into one act, and gives FDIC examinationauthority and lending authority toany insured bank in danger of closing.22 » PA Bankers Association
PA Bankers Association » Quarter 3, 2020 23125 YearsREFLECTING ON OUR PAST WITH 20/20 VISION FOR OUR FUTURE1994PA Bankers Services Corporationis created as a wholly-ownedsubsidiary to offer products andservices to members.2007PA Bankers supportslegislation excludingregulatory goodwill from thePA Bank Shares Taxcalculation enacted.PA Bankers moves to current office on Front Street in Harrisburg.19951997PA Bankers leadsadvocacy effortsresulting in statelegislation thatauthorizes state-charteredinstitutionsto sell and brokerinsurance to theircustomers.2001International MoneyLaundering Abatement and Financial TerrorismAct is passed.2008The housing bubble burstscausing a financial crisis androcking the global economy.2010Dodd-Frank Wall StreetReform and ConsumerProtection Act is signed byPresident Obama.2012Amendments are made to modernize PA Bank Code. 2013PA Bankers forms Women inBanking Network and hosts the first Women in Banking Conference the following year.2016PA Bankers forms EmergingLeaders Network and hosts the first Emerging LeadersConference.2017-18PA Bankers participates in three workforce development and next-generation bankerprograms to recruit top talent for the banking industry.*With the association's help,the BankWork$ program cameto Philadelphia in 2017. Theprogram then expanded toPittsburgh in 20192018The Economic Growth, Regulatory Relief and Consumer Protection Act enacted offering regulatory reform for community financial institutions.*
24 » PA Bankers AssociationWHAT ADVICE WOULD YOU OFFER TO SOMEONE CONSIDERING A CAREER IN BANKING?Have ambition to move up the ladder; it will be noticed. However, be prepared for a marathon, not a sprint. In any career, at the end of the day, ask yourself if you had been the CEO looking at you, would you have approved of your performance this day? Above all, enjoy helping people. If you don’t like serving people, find another career. Remember, bankers do not make physical items to sell; we sell solutions and dreams.Robert Snyder, 2010-11 Chair, Luzerne National Bank The financial services industry has changed dramatically over the last 40 years and needs people with a very wide range of talents. With that said, what hasn't changed is its need for people with strong communication, interpersonal and leadership skills. If you like dealing with people and being a part of helping your customers and communities grow, banking is a great industry.Robert Rupel, 2007-08 Chair, The Provident BankWHAT WAS THE MOST SIGNIFICANT ISSUE AFFECTING THE PA BANKERS ASSOCIATION DURING YOUR TERM AS BOARD CHAIR?During my term as chair, we were beginning to feel the full impact of Dodd-Frank and other regulations that were enacted on the heels of the Financial Crisis of 2008/09. While some additional regulatory oversight may have been appropriate, it became the lead story in our industry…and in some instances the only story. Lost in all of it was the mission; the good work that the banking industry performed every day in the communities that we served across the commonwealth. During that period, when government officials and many others reflected on our Industry, they thought about risk and risk alone, often times at the exclusion of the positive influence we have had for decades on the lives we touched every day.So, the PA Bankers board and staff felt it was time to “Tell Our Story,” and that story was one of helping people. We helped put people into their first homes; we helped families send their first child to college; and we helped small and large businesses manage the financial affairs of their operations so they could focus on growing their businesses and provide more jobs in their communities. Additionally, the support we provide to the nonprofit community was very rarely talked about. We have provided countless dollars in financial support and chaired many fundraising campaigns over the years. Telling our story continues. In fact, in PA, led by Duncan, his team and future chairs, it will never end. The association over the past few years has done a great job of telling federal and state government officials and others that report on our business what our communities have known for a long time…that we get up every day with one focus in mind…and that’s to help people in our communities across the state.Gerry Nau, 2015-16 Chair, Lafayette Ambassador Bank Reflections from Past ChairsIn celebration of the association’s 125th anniversary, we asked several of our past chairs to share their experiences with us, as well as their favorite memories and advice to future leaders in the industry. Take a step back in time…
PA Bankers Association » Quarter 3, 2020 25WHAT IS YOUR FAVORITE MEMORY OF YOUR TIME AS CHAIR OF THE PA BANKERS ASSOCIATION?Enjoy each day that you can help your customers achieve all of their dreams (a new car or house, funding a child’s college tuition, building a new business, etc.). Whatever their dreams are, our properly tailored solutions provide the much-needed boost.Joseph Bower, 2016-17 Chair, CNB BankTHE BANKING INDUSTRY HAS UNDERGONE MANY CHANGES OVER THE LAST 20, 30, 40 YEARS. WHAT ARE SOME OF THE THINGS THAT HAVE REMAINED CONSTANT THROUGHOUT YOUR CAREER IN BANKING?People, businesses and communities need a safe depository for their funds and outside investment to realize their financial goals. This is fundamental – community banks have a longstanding business model, whereby we fund loans with deposits and hope to provide value.William Marsh, 2014-15 Chair, The Farmers National Bank of EmlentonThings have changed because of the financial crisis in 07-09. Dramatic change in industry. Technology is a large part of banking; in the processes and how customers can access banks through technology. Dramatic difference. All good for the consumer. Two fundamentals are still important: • Credit quality – making loans the right way; Remember that “cycles always return.” • Importance of people and relationship. There is a transactional component – technology has advanced that, but relationships are still very important. People are what make the business successful. David Zuern, 2005-06 Chair, Waypoint BankWHAT ROLE HAVE YOU SEEN THE PA BANKERS ASSOCIATION PLAY IN BANKING DURING YOUR INVOLVEMENT WITH THE ASSOCIATION?I have always been proud of my association with PA Bankers because of the way they promoted the banker’s positive role in our society in general and our customers’ lives specifically. PA Bankers also made sure that we were represented politically.Ralph Papa, 2008-09 Chair, Citizens Bank of PennsylvaniaWHAT DO YOU SEE AS THE TOP TWO OR THREE CHALLENGES FACING THE BANKING INDUSTRY NOW AND MOVING FORWARD?Challenges I see ahead include: (1) continued burdensome and unnecessary over-regulation and/or lack of legislative action where it’s needed; (2) time and resources needed to meet the ever-changing digital landscape; and (3) talent retention and acquisition.James Dionise, 2018-19 Chair, Mars Bank• Maintaining personal contact with customers as young people become more technology focused.• Providing adequate security for customers electronic interactions with us.• Keeping banking relevant as alternative delivery methods proliferate. Carl Campbell, 2000-01 Chair, M&T Bank (Keystone Financial)
26 » PA Bankers Association#BanksNeverAskThat Anti-Phishing CampaignFight phishing fraud by turning your customers into expert scam spottersfeaturevery day, thousands of people fall victim to fraudulent emails, texts and calls from scammers pretending to be from their bank. In fact, the Federal Trade Commission’s 2019 report on fraud estimates that American consumers lost a staggering $1.48 billion to phishing scams in 2018. The problem has only grown worse during the COVID-19 pandemic, with more people online.Banks of all sizes are suffering significant monetary and reputational losses from these increasingly sophisticated scams targeting their customers. The American Bankers Association wants to change that.ABA is calling on all banks across the country—members and nonmembers alike—to register to participate in ABA’s new #BanksNeverAskThat anti-phishing campaign—a fresh, bold plug-and-play campaign created to educate consumers about phishing scams and how to thwart them. The industry-wide initiative is one of ABA's biggest consumer protection campaigns in its history. Registered participating banks will receive a toolkit full of ready-to-use assets. Designed to be humorous, eye-catching and engaging, the kit includes videos, GIFs, social posts, printables and more to help educate and protect bank customers. The campaign is entirely free (including for non-ABA members) and can be co-branded, bank-branded or ABA-branded. At the heart of the #BanksNeverAskThat campaign is a consumer website—BanksNeverAskThat.com—where you’ll find tips for how to spot phishing scams, deep dives on reporting or recovering from fraud, as well as an interactive quiz where visitors can put their skills to the test. As the #BanksNeverAskThat materials make clear with improvisational humor, banks would never call to ask for relationship advice or whether you believe in aliens—just as they will never call to ask for your account password or social security number. Participating banks are encouraged to join the rest of the industry in launching the #BanksNeverAskThat campaign in October to coincide with National Cybersecurity Awareness Month. The combined effort from a simultaneous, industry-wide launch will deliver the most impact—and have the best chance to change consumer behavior.National Cybersecurity Awareness Month is a collaborative effort between government and industry that raises nationwide awareness of cyber crimes and prevention every October. Because it coincides with the launch of #BanksNeverAskThat, ABA is celebrating with a cybersecurity-month sweepstakes. Every week during the month of October, site visitors can test their scam savviness by taking the #BanksNeverAskThat quiz, then sharing it on Twitter for the chance to win one of 15 prepaid gift cards. All entrants in ABA’s sweepstakes will also be eligible to win the $1,000 grand prize at the end of the month.The success of this campaign depends in large part on participation by banks across the country. The more banks that join this industrywide effort, the greater the likelihood this positive, pro-consumer message will sink in. We’re counting on banks of all sizes to take part, and we’re making it almost impossible to say no by providing you all the ready-to-use resources you need for free.It’s time to put scammers in their place, protect our customers and reduce the financial damage to banks from phishing. Sign up to participate for the campaign at aba.com/BanksNeverAskThat.EABOUT THE AUTHOR: AMERICAN BANKERS ASSOCIATION
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.
28 » PA Bankers AssociationgovernmentRELATIONSNEW REPUBLICAN LEADERSHIP TEAM ELECTED IN THE HOUSEWith the resignation of former Speaker of the House Mike Turzai (R-Allegheny), House members on June 22 elected Rep. Bryan Cutler (R-Lancaster) as the new Speaker of the House. This resulted in three other changes in leadership positions in the House Republican Caucus. Rep. Kerry Benninghoff (R-Centre) was elected by his Republican colleagues as House Majority Leader; Rep. Donna Oberlander (R-Clarion) was elected House Majority Whip; and Rep. Martin Causer (R-McKean) was elected House Majority Policy Committee Chair. PA Bankers has strong relationships with these new members of the House Republican leadership team.THE BANKING FUNDThe PA Department of Banking and Securities’ Banking Fund is a special revenue fund composed of monies received from fees, assessments, charges and penalties collected or recovered from persons, firms, corporations or associations under the supervision of the Department. It provides for the administration of the Department and regulation of the financial services industry. The Institution Resolution Restricted Account is to be used at the discretion of the Secretary in the event of a seizure or liquidation of a financial institution, association or credit union.Not until after the 19-20 Governor’s budget report/request was published (see H9 pg. 791 of 898) did PA Bankers learn that a transfer of $21 million from the Banking Fund had been made to the General Fund in June 2018, citing the authority granted by Act 44 of 2017 to make up to $300 million in transfers from special fund accounts. Use of existing state accounts was initially proposed by a group of PA House Republican members as a means to avoid tax increases.Further discussions among PA Bankers, PA Association of Community Bankers (PACB), CrossState Credit Union and the PA Department of Banking and Securities have resulted in a move towards a consensus approach on the legislation being developed that will establish the Banking Fund and the Institution Restricted Resolution Account as a separate trust funds, which should discourage future transfers to be made from these funds into the General Fund. New House Commerce Committee chair, Rep. Sheryl Delozier introduced the compromise language and we expect it to be considered by the full House when they reconvene on Oct. 19.STATE BUDGETThe partial, five-month, 2020-21 fiscal year state budget enacted by the General Assembly in late spring will expire on Nov. 30. The legislature will begin deliberating in earnest in the fall a state budget for the remaining seven months of the current fiscal year. Various estimates place the state State Legislative Updates
PA Bankers Association » Quarter 3, 2020 29budget deficit in the $4-5 billion range. PA Bankers has been making the case through targeted grassroots virtual advocacy meetings with key legislative leaders in the House and Senate over the past couple months that an increase in the bank shares tax rate or additional transfers from the banking fund should not be in the mix of revenue sources the legislature might be considering to address the commonwealth’s challenging fiscal environment.PERMANENT REMOTE NOTARIZATION AUTHORIZATIONPA Bankers also continues to advocate for the enactment of permanent remote notarization, as contained in House Bill 2370 or Senate Bill 1097. The current authorization enacted as Act 15 of 2020 will expire 60 days after the expiration of the Governor’s Emergency Disaster Declaration Order, which has been extended to Dec 6.ELDER FINANCIAL ABUSE PREVENTION LEGISLATIONThe House version of legislation amending the Older Adult Protective Services Act that contains a number of provisions PA Bankers supports that would assist in preventing elder financial abuse, House Bill 1930, was voted out of the House Aging Committee on June 23. The legislation is in a position to be voted on by the House when it reconvenes in September.RESUMPTION OF EFFORTS TO IMPLEMENT FIDM FOR COLLECTION OF PAST DUE TAXESThe PA Department of Revenue recently requested that discussions resume among the Department and PA Bankers, PACB and CrossState Credit Union Association to work towards implementing a Financial Institution Data Match (FIDM) Program for the collection of delinquent taxes. Discussions had been put on hold earlier in the pandemic. A further meeting will be scheduled in August among the stakeholder groups to finalize the financial institution agreement. PA Bankers has provided comment and suggestions regarding the draft agreement.COVID-19 ECONOMIC ASSISTANCE PROPOSALSOn July 6, the PA Housing Finance Agency (PHFA) began accepting applications for the $25 million Pandemic Mortgage Assistance Grant Program that was enacted by the legislature as a result of federal CARES Act funds that came to Pennsylvania. The grants must be made to eligible borrowers that qualify, by Nov. 30. PA Bankers provided some suggestions regarding the administration of the program that, to date, have not been accepted by PHFA.The $225 million small business assistance program being administered by the PA Department of Community and Economic Development and the 17 community development financial institutions began accepting applications on June 30.As of this writing, it is not known how many grants have been made through either of these programs.FIDUCIARY ACCESS TO DIGITAL ASSETS LEGISLATION ENACTEDOn July 23, Governor Wolf signed into law Senate Bill 320, sponsored by Senator Tom Killion (R-Delaware), that would provide for fiduciary access to digital assets in Pennsylvania. This is a uniform law that has been approved in all but three states. It is important because individuals are dealing electronically and storing their financial information on the web. This legislation will allow a personal representative, trustee or guardian of the deceased access to the information. PA Bankers supported the enactment of this legislation.In today’s rapidly changing environment, Schneider Downs’ Risk Advisory practice is well-equipped to shed new light on the risks that ﬁnancial institutions face. To learn more about the services we oer to the ﬁnancial services industry, visit www.schneiderdowns.com.Big thinking about risk management.
30 » PA Bankers Associations of this writing, prospects for further federal legislation in response to the COVID-19 pandemic have dimmed following the failure of Senate Republicans’ “skinny” relief bill offered as an amendment to other legislation by a largely party-line vote of 52-47. Issues of particular interest to financial institutions include:UNEMPLOYMENT COMPENSATION The CARES Act’s $600 per week federal unemployment compensation supplement ended July 31. The latest Senate Republican proposal included an extension of enhanced unemployment compensation at $300 per week until December 27. SMALL BUSINESS ADMINISTRATION PAYCHECK PROTECTION PROGRAM (PPP) The PPP closed at midnight on August 8. The latest Senate Republican amendments would have enacted a “Second Draw Loan,” included “hold harmless” language and called for a simplified PPP forgiveness application for loans under $150,000.The American Bankers Association and the state associations sent a letter in July to US House leaders in support of H.R. 7777, the Paycheck Protection Small Business Forgiveness Act, a bill sponsored by Reps. Chrissy Houlahan (D-PA) and Fred Upton (R-MI) that would allow PPP loans to be forgiven once the borrower completes a one-page attestation form. PA Reps. Dwight Evans and Brian Fitzpatrick also co-sponsored H.R. 7777. A similar Senate bill (S. 4117) was previously introduced and supported by association letters. These bills are expected to significantly reduce the paperwork burden for the vast majority of PPP borrowers. Given the lack of additional, comprehensive COVID-19 relief legislation to date, ABA and the SBAs sent another letter of support for stand-alone PPP forgiveness legislation on Sept. 11.Bankers are requested to take a moment to use this link to email their congressman and this link to email their senators to urge their support for simplified PPP forgiveness legislation and urge their colleagues to join them in supporting this important initiative. COVID-19 LIABILITY LIMITATIONThe failed Senate Republican amendments also included provisions intended to protect healthcare workers, providers and facilities, businesses, nonprofits and educational institutions from crippling litigation resulting from the COVID-19 pandemic. The American Bankers Association joined more than 480 national trade groups representing a broad range of industries in a letter to Congress urging support for liability relief provisions PA Bankers joined a similar letter sent by statewide associations in this Commonwealth.E-SIGN MODERNIZATIONThe 51 state bankers associations urged support for inclusion of S. 4159, the E-SIGN Modernization Act, in the enacted Phase IV relief package. Originally authored by Sen. John Thune, the bill would streamline how consumers consent to receiving electronic documents, such as bank statements, account information and contracts. The bill would update the 20-year-old E-SIGN Act to reflect advancements in technology and shifting consumer preferences. Specifically, it would remove the current requirement for consumers to reasonably demonstrate that they can access documents electronically before they can receive an electronic version—which the groups noted created obstacles for companies of all sizes during the coronavirus pandemic.FEDERAL REGULATIONBanks’ use of The Coalition of Bankers Associations’ Regulatory Feedback Initiative will become increasingly important in the uncertain times we currently face. We ask that banks complete a confidential, electronic exam feedback questionnaire after each safety and soundness and compliance examination to provide ABA and the state bankers associations the empirical data we need to advocate for regulatory fairness and certainty.The American Bankers Association is reinventing its Washington Visit Program in response to the pandemic. Meetings with the federal regulatory agencies will take place virtually. An advantage of the virtual format will be our ability to register more participants. Dates/times and registration details will be posted to PA Bankers’ website when they are available.AFederal Legislation UpdatesgovernmentRELATIONS
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32 » PA Bankers AssociationgovernmentRELATIONSs racism baked into our nation’s systems of justice, health and education, or are there disproportionate correlations between race, poverty and crime? Are people too quick to accuse others of racism, or are those in positions of power too slow to recognize their role in perpetuating racial inequities? Is it fair that I posed these as either/or questions, or is all of the above true? While issues surrounding racial justice and inequities are demanding the nation’s attention, honest conversations seem too perilous to hold because of the way some frame the debate as binary. But that ignores the vast common and principled ground on which we all stand and distracts from a focus on meaningful solutions.Bankers are community leaders, which means you run toward a challenge, not away from it. So as fraught as the situation may feel, the American Bankers Association is engaging in an open dialogue of how the banking industry, both as employers and as facilitators of wealth creation, can further the principles everyone agrees on: that all Americans should have a truly equal opportunity to prosper, and that economic inclusion is essential to creating such opportunity.Implicit in this discussion is the belief that we each have a role to play in addressing longstanding inequities. Some may feel the problem lies elsewhere — in another community, city or state — and therefore so must the solution. Others may think they’ve done all they can, to either great or limited effect. But we are an industry that in recent years has developed entirely new ways of banking and in recent months demonstrated remarkable fortitude and commitment to serving our customers through the pandemic. There is more we can — and must — do to address disparities and promote prosperity for all. Many banks recognized this long before the pandemic hit and disproportionately harmed Black Americans, and long before the nationwide protests over the killing of George Floyd and others. Some in recent years have built rigorous diversity, equity and inclusion programs that are both inward facing (focused on employees) and external facing (focused on customers, communities and vendors). Some have pioneered new ways to qualify borrowers and bring those who have been marginalized into the banking system. We celebrate them every year with the ABA Foundation’s Community Commitment Awards. Still others have partnered with Minority Depository Institutions and Community Development Financial Institutions to share compliance resources, expertise and more to better enable those institutions to meet the needs of their often underbanked customers.ABA is tapping the experiences of these banks and leveraging the expertise of our own staff experts on diversity, equity and inclusion to provide others with tools and resources to make a difference at their own institutions. A new peer group for institutions with robust DE&I programs met for the first time in February and is helping us identify leading IRunning Toward the Challengecontinued on page 36
continued on page 36A UNIQUE HEALTH CARE ALTERNATIVEfor Pennsylvania-Based Financial Institutions and Aliate Members of the PA Bankers AssociationWHAT IS THE BANK HEALTH CARE CONSORTIUM OF PA (BHCCPA)?The BHCCPA is a unique health care alternative for Pennsylvania-based nancial institutions and Aliate Members of the PA Bankers Association. Since its launch in July 2007, the PA Bankers Services Corporation, L.R. Webber and The Benecon Group. have collaborated to provide every consortium member with leverage and benets of economies of scale, plan design exibility and signicant cost control strategies to their group health plan.PA BANKERS SERVICES CORPORATIONWayne WhippleVice President, Business Development(717) email@example.comLEARN MORE ABOUT THE PROGRAML.R. WEBBERBrad WebberMarketing Manager(814) firstname.lastname@example.orgTHE BENECON GROUPClaudia BurchsteadSenior Sales Director(717) email@example.com
34 » PA Bankers AssociationABOUT THE AUTHOR: ROB NICHOLS, PRESIDENT AND CEO, AMERICAN BANKERS ASSOCIATION governmentRELATIONSindustry practices in this space that we can share with members. In April, we convened our Diversity, Equity & Inclusion Advisory Group, which is composed of individuals from banks of all sizes and whose mission is to help us nurture bank DE&I efforts. I was also pleased to announce a strategic partnership this year with the National Bankers Association, the leading trade association for MDIs, to promote the health and well-being of underrepresented communities. And we are collaborating with and promoting MinBanc, which reimburses educational and professional development expenses of MDI bankers. This is all to say that both ABA and the industry have a strong foundation upon which to build. And build we must. Unacceptable racial disparities in health, wealth, income, education and other measures of opportunity continue to grow—and the pandemic has laid bare these disparities. Proportionately, two and half times more Black Americans have lost their lives to COVID-19 than white Americans. We cannot shrug our shoulders and declare these inequities someone else’s problem. We cannot fail to engage. We are bankers, we are civic leaders and we must be part of the solution.Looking for CRA investment opportunities? Investment Connection can help!What is Investment Connection?During this time, when ﬁnding investment opportunities and reaching your institution’s CRA goals can be even more challenging, we’re conﬁdent our online tool—designed to connect CRA ofﬁcers, community development bankers, and foundation program ofﬁcers to projects that need ﬁnancial support—can help. Presented by the Federal Reserve Bank of Cleveland, Investment Connection connects funders to nonproﬁts with pre-screened, likely CRA-eligible* projects. Log in to its portal, and you’ll have 24-7 access to investment opportunities. It’s easy to register and indicate preferences. Whatever your funding footprint is or priorities are, the Investment Connection funders’ portal catalogues opportunities across the United States.Please visit clevelandfed.org/investmentconnection for more information. Have questions? Send them to ICCleveland@clev.frb.org*Subject to CRA performance evaluationCheck out funding opportunities here; search by location or issue. continued from page 34
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36 » PA Bankers Association020 has been quite a year--different than what anyone was expecting. COVID-19 and racial tensions have us looking at things from new perspectives. We are having conversations that we may not have had last year, and we are working in an environment we may not have worked in before. Through it all, Pennsylvania’s bankers have been at the front lines, working with your customers to ensure they do not default on loan payments; providing PPP loans to businesses in your footprint who do so much for your community; granting thousands of dollars to local food banks, shelters and businesses who were directly impacted by this health pandemic; and, simply, ensuring your customers could access their money at any time. Your focus has been ensuring that your customers and your communities survive.But, believe it or not, it’s an election year. Elected officials at the state and federal levels have been focused, too, on seeing their constituents survive. From federal legislation to make PPP loan forgiveness easier to state legislation allowing remote notaries to operate temporarily in PA, elected officials in Congress and the state General Assembly are finding ways to help you help your customers.More and more money is spent every cycle to elect candidates to state House and Senate and U.S. Congress. And while the focus has been elsewhere, this year is no different.PaBPAC (Pennsylvania Bankers Public Affairs Committee) has always been committed to supporting candidates who advocate for the banking industry. Pro-banking candidates are dedicated to supporting the same principles we are. These candidates want their constituents and businesses within their districts to not just survive, but to thrive. As we continue through the rest of this 2020 year, we hope that you will help us meet our campaign goal of $467,500. Thank you for contributing to PaBPAC today by sending a check to 3897 N. Front St., Harrisburg, PA 17110, or by credit card on our website. We thank you in advance for your continued efforts in support of our industry and our association.2PaBPAC: Help Us Elect Pro-Banking Candidates in NovembergovernmentRELATIONS
PA Bankers Association » Quarter 3, 2020 37You’re preapproved for trusted advice!Your bank works hard to make customer dreams become reality. Don’t let complex regulations delay your next transaction. Our talented, tireless pros can help you stay compliant, manage risk and grow strategically, so you can focus on building equity in your community. Everyone needs a trusted advisor.Who’s yours?bkd.com/fs • @BKDFS
38 » PA Bankers AssociationADVANCED SCHOOL OF COMMERCIAL LENDING Days 1&2 [Virtual] Members: $675 | Aliate Members: $775 | Non-Members: $1,013TRAINING THE CREDIT ANALYST SEMINAR [Virtual] Members: $675 | Aliate Members: $775 | Non-Members: $1,013ADVANCED SCHOOL OF COMMERCIAL LENDING Day 3 [Virtual] GROWING THE BANK DURING A PANDEMIC SEMINAR [Virtual] Members: $200 | Aliate Members: $250 | Non-Members: $300COACHING FOR OPTIMAL PERFORMANCE SEMINAR [Virtual] Members: $200 | Aliate Members: $250 | Non-Members: $300october19-2021-22262829a aheadlookAs you plan your training and development for 2020-2021, we hope you'll consider learning with us. Here's 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.2020TRAINING/EVENTS CALENDAR
PA Bankers Association » Quarter 3, 2020 39a ahead
40 » PA Bankers Associationa aheadlookAs of May 5, PA Bankers has cancelled/postponed all in-person banker events through June 30, 2020. We will continue to review the calendar, going forward, and communicate any calendar changes to the membership.novemberESSENTIALS OF COMMERCIAL LENDING SEMINAR [Virtual] Members: $675 | Aliate Members: $775 | Non-Members: $1,013WEALTH MANAGEMENT & TRUST CONFERENCE & EXHIBITION [Virtual] Members: $325 | Aliate Members: $385 | Non-Members: $488FDIC DIRECTORS COLLEGE 1-5 registrants $265; 6+ registrants $235DIGITAL BANKING CONFERENCE [Virtual] Members: $200 | Aliate Members: $250 | Non-Members: $300LENDING CONFERENCE [Virtual] Members: $325 | Aliate Members: $385 | Non-Members: $4882-35-6101719-20
PA Bankers Association » Quarter 3, 2020 41a aheadlookindex of ADVERTISERSAMERICAN BANKERS ASSOCIATION .................................................................................................................................. 57APPI ENERGY ........................................................................................................................................................................................ 35BAKERTILLY...........................................................................................................................................................................................49BANK HEALTH CARE CONSORTIUM OF PA ................................................................................................................... 33BARLEY SNYDER ............................................................................................................................................................................... 43BKD CPAs & ADVISORS ................................................................................................................................................................. 37BOXWOOD MEANS ............................................................................................................................................................................. 7CINNAIRE ...................................................................................................................................................................................................9CORNERSTONE ADVISORS ........................................................................................................................................................ 58COMPLIANCE ALLIANCE ................................................................................................................................................................4DELUXE ...................................................................................................................................................................................................IBCHERBEIN .................................................................................................................................................................................................. 45INVESTMENT CONNECTION .....................................................................................................................................................36MERCADIEN ........................................................................................................................................................................................... 53PILLAR + AUGHT ............................................................................................................................................................................... IFCRKL CPA ..................................................................................................................................................................................................... 31S.R. SNODGRASS ..............................................................................................................................................................................BCSCHNEIDER DOWNS ......................................................................................................................................................................29THE BAKER GROUP ..........................................................................................................................................................................11THE COALITION OF BANKERS ASSOCIATIONS ...........................................................................................................21TITLE INSURANCE ............................................................................................................................................................................27YHB ..............................................................................................................................................................................................................39decemberDRIVING DEPOSITS TO THE BRANCH IN THE NEW ECONOMY SEMINAR [Virtual] Members: $200 | Aliate Members: $250 | Non-Members: $300INCREASING BRANCH LENDING IN THE NEW ECONOMY SEMINAR [Virtual] Members: $200 | Aliate Members: $250 | Non-Members: $300 89
42 » PA Bankers AssociationJOHN STAUFFER SVP Retail Banking Strategy Officer, Ephrata National BankHOW HAS YOUR EXPERIENCE BEEN AS A PA BANKERS CHAMPION? My experience as a PA Bankers Champion has been great! I have been able to gain new relationships and deepen existing relationships with my colleagues at other Pennsylvania banks. I often reach out to these colleagues to discuss issues related to our industry. During COVID-19, this has been useful as we face unprecedented situations, such as lobby closures. I am also active with Advanced School of Banking. I am a 2015 graduate, served on the Advisory Committee for 3 years, and now serve as a director for the Class of 2021. HOW DO YOU SPREAD THE WORD ABOUT PA BANKERS TO YOUR INSTITUTION?As a PA Bankers Champion, I am set-up to receive all PA Bankers alerts. When I receive information that is specific to a certain function, I relay that information to the appropriate individuals at Ephrata National Bank. They may be receiving it for the second time; however, I would rather them receive it twice versus not at all. Additionally, I think they may be more inclined to open and read a personalized email from a co-worker versus an email that comes from PA Bankers directly. ANN BAVARIA SVP, Human Resources, Marketing & Regulatory Compliance, New Tripoli BankHOW HAS YOUR EXPERIENCE BEEN AS A PA BANKERS CHAMPION?I’ve participated on different PA Bankers Committees for many years and have witnessed how the association has grown and thrived. The PA Bankers Champions designation has been an essential support in my role as a SVP in charge of Human Resources/Training and Regulatory Compliance. The PA Bankers Champions program gives me insider information, so to speak, about upcoming training programs, new approved third-party bank vendors which the PA Bankers Services Corporation screens and recommends and enables us to share information with peer bankers. As a PA Bankers Champion, we are asked for input on upcoming events. I always try to give thought to what is currently on bankers’ minds and how PA Bankers can support us by highlighting a training need or recommending topics for events. The quarterly updates I receive as a PA Bankers Champion have given me resources for ongoing professional development of our bank employees. PA Bankers Champions are also asked for feedback on any PA Bankers programs they attend, and I can assure you that they listen to ensure high quality events and training continue. It’s been an honor and a pleasure to serve as a PA Bankers Champion.from yourPEERSWhat's It Like To Be a PA Bankers Champion?Looking to maximize the value of your membership? Contact Karen McDermott, firstname.lastname@example.org or (717) 255-6914,to learn more about the program and select a PA Bankers Champion today!
HOW DO YOU SPREAD THE WORD ABOUT PA BANKERS TO YOUR INSTITUTION?At New Tripoli Bank as the HR director, I know everyone pretty well. I am able to look at upcoming training programs and banking schools and work with the senior team and our managers to directly recommend which employees should participate. A bank is only as good as its ongoing training efforts, so I focus a lot on the PA Banker’s educational offerings. This information is disseminated through email, phone calls and discussed at our senior staff meetings when appropriate.www.BARLEY.comLANCASTER • YORK • READING • HARRISBURG • MALVERN • HANOVER • SCHUYLKILL HAVEN • GETTYSBURG • HUNT VALLEY, MD • COLUMBIA, MDWe’re here for you.Our team of banking attorneys understands the needs and objectives of nancial institutions. We work together to develop an understanding of each client’s business to achieve their strategic and risk management goals.LISA HASSINGER CRCM, Senior Vice President & Chief Risk Officer, The Northumberland National BankHOW HAS YOUR EXPERIENCE BEEN AS A CHAMPION?I am happy to be a member of the PA Bankers Champion program. As a PA Bankers Champion, I have become more aware of the value PA Bankers provides to our community banks. I am proud to encourage the employees of our bank to take advantage of the opportunities available to them. HOW DO YOU SPREAD THE WORD ABOUT PA BANKERS TO YOUR INSTITUTION?Typically, I forward email notifications from PA Bankers to the members of management with recommendations for them or their staff. I include an introduction to PA Bankers during new hire training. If a new hire is not familiar with PA Bankers, I provide them with an overview of the value PA Bankers provides to community banks with their advocacy efforts, and I introduce them to the educational and networking opportunities available to help further their careers.
44 » PA Bankers AssociationvendorARTICLESWHERE WE ARE TODAY In an emergency Sunday meeting on March 15, 2020, the Federal Reserve announced it was dropping its benchmark interest rate to zero and launched a new round of open-ended quantitative easing. The move was a direct response to the coronavirus outbreak, which had disrupted economic activity around the world, including the United States. During this time, the 10-year and 30-year treasury bond yields reached new all-time low as dollars flowed into the treasury markets seeking the “full faith and credit” of the United States government. The moves by the Fed and the markets left financial institutions with a U.S. Treasury Curve at historic lows. As a result, institutions with asset sensitive balance sheets are facing the likelihood of margin compression. So, here we are with low interest rates following a severe economic downturn. Hey, I’ve seen that movie before! In 2008, the Fed sharply cut its target funds rate down to zero in an effort to spur lending and jumpstart overall economic activity. In the crisis environment of 2008-2009, many banks were tempted to purchase investments outside their typical investment purchases in order to find yield. Private label MBS and CMOs, trust preferred securities, preferred stock, and subordinated debt were a handful of the types of investments that were purchased. In the wake of that crisis, many of those securities experienced major losses or became worthless. More than a decade later, and we’re seeing a resurgence of some of these same types of investments. DODGING BULLETS If you are shown an investment offering a yield that “seems a little too good to be true,” ask questions! Educate yourself and understand the risks. There is almost always a reason for the increased yield, as bond markets are very efficient at pricing in risk. As the saying goes “there is no free lunch in the bond market,” meaning in order to increase the yield or reward received on a bond, you must take on more risk. That increased risk usually comes from a combination of the following categories: credit risk, interest rate risk, and liquidity risk.A recent example of potential trouble is that of bank subordinated debt. Many banks are actively taking advantage of today’s low interest rate environment to issue relatively cheap subordinated debt to bolster their capital levels (Tier 2 Capital). Furthermore, with many economic uncertainties on the horizon, it makes sense for some banks to issue subordinated debt to boost their overall capital position and total risk-based capital ratios ahead of the economic uncertainty. The issuers are acting rationally, but what about the risk to those who buy these bonds?It’s true that subordinated debt offers enhanced yields; however, it comes at the cost of increased credit and liquidity risk. When a bank fails, there are numerous claims to a failed bank’s assets and the holders of subordinated debt are usually left with little to nothing. Data from the last financial crisis shows a very high “loss given default” percentage on failed banks’ subordinated debt. Investment in subordinated debt should be looked at as an unsecured loan to another financial institution. As a result, regulators tend to take a harsher view on the investment portfolios that hold bank-subordinated debt. STICKING TO THE PLAN We have always been big proponents of having a written strategy. A written strategy lets you proactively manage the investment portfolio instead of being sold “the bond of the day.” Your investment strategy should be intertwined with your balance sheet needs and overall risk appetite. If an investment doesn’t fit your investment strategy, then pass on it. Having a written investment strategy helps strengthen your corporate governance and there’s an added bonus of having some tangible to show to the regulators. The banking industry is likely to have some challenging days ahead due the recession caused by the COVID-19 pandemic. Now is the time to work towards mitigating your credit risk and not reaching for more. Know what you are buying, understand the risks, and ask questions!Sticking to Your Strategy: Avoiding Pitfalls in a Low Rate EnvironmentABOUT THE AUTHOR: DALE SHELLER IS SENIOR VICE PRESIDENT IN THE FINANCIAL STRATEGIES GROUP AT THE BAKER GROUP. He joined the firm in 2015 after spending six years as a bank examiner with the Federal Deposit Insurance Corporation. Sheller holds a bachelor ’s degree in finance and a master’s degree in business administration from Oklahoma State University. He works with clients on interest rate risk management, liquidity risk management and regulatory issues. Contact: 800-937-2257, email@example.com.
PA Bankers Association » Quarter 3, 2020 45
46 » PA Bankers Associationven before COVID-19, the role of the community bank CFO was beginning to shift. No longer looked upon as simply an accountant, new technology like mobile banking and performance management solutions was entering the market that broadened the role of the CFO.Now, as we move forward toward whatever our “new normal” will be, the CFO’s role is expanding into roles beyond finance and accounting. Today’s community bank CFO will need to help navigate a new generation of customers and its staff.Here are some of the ways:Strategic advisor. The modern CFO is well-positioned to understand the market opportunity, strategy and business model of the organization. They also provide a unique perspective across all the institution’s business functional groups. Besides the CEO, the CFO is the only person with a clear view of the big picture and limited bias toward any one aspect of the bank’s performance.Disciplined operator. Today’s CFO provides data, information and insights, and puts them into action. The CFO is responsible for building scalable systems and processes. To excel, the CFO must move beyond the financial report card and embrace broader business insights. To ensure success, the CFO must speak the language of business and understand that the key drivers of business are often significantly more than what shows up on the balance sheet.Innovative technologist. In today’s banking world, the CFO drives proactive technology solutions in support of the business. An educated consumer of technology, the modern CFO pushes the envelope, demanding creative solutions that empower employees. They know what to ask for and are educated enough to know what is possible.According to McKinsey, CFOs are being asked to lead new initiatives and functions as their role evolves, including:• Risk management • Procurement • Regulatory compliance • Integration • M&A • Board engagement • ITCFOs also have a role to play in driving a performance culture throughout the organization — both by encouraging performance-driven behaviors and supporting the acquisition and retention of top-performing talent. CFOs increasingly work alongside CHROs to provide transparent and relevant performance reporting and manage to FI goals. THE LESSONS LEARNED FROM THE GREAT RECESSION CAN HELP CFOS NOWThere's no doubt that the COVID-19 pandemic has changed life as we know it in this country and around the world. As we emerge from lockdown and begin re-opening our economy, the full impact on banks’ financial performance remains to be seen.There are many current similarities to the Great Recession of 2008:• Drastic rate cuts by the Federal Reserve Board• Lower asset yields• Lagging reductions in cost of funds• Thinner margins resulting in lower earnings 6 CRITICAL ACTIONS FOR EVOLVING CFOSToday’s economic uncertainty is driving financial hardship for your customers and is likely putting downward pressure on the NIM and earnings at your institution. By combining the lessons learned from 2008 with the new responsibilities of your expanded role, you can help lead the transformation of your financially stressed institution to succeed in the world we’ll find beyond the pandemic. Here are some critical actions for CFOs to take right now:1. Focus on the numbers In times of economic crisis, focusing on liquidity, loans, deposits and your loan-to-deposit ratios are critical activities for the CFO. A lack of liquidity, the ability of a bank to meet the demands of its depositors, is a disaster.You need to be the rock-solid institution in shaky economic times to give your customers the confidence they need to get through tough financial periods. One important way to do that is a daily focus on liquidity. Work with your board to develop a target liquidity range that you’re comfortable with. Shoot for a number that's a bit higher than the minimums of vendorARTICLESEThe CFO’s Role in Helping Your Community Bank Navigate COVID-19
PA Bankers Association » Quarter 3, 2020 4710%, to give you a cushion. You'll calculate this at the end of the month, but you should be looking at your cash and cash equivalents, total loans, deposits and loans-to-deposits ratios daily.Once you know your numbers, monitor them as closely as possible every day. Don't worry if ups and downs occur. They will, inevitably. Concentrate on the trends and respond appropriately based on those indicators.A performance management tool can be your ally in this effort. You can set an alert to notify you if your numbers fall below your target. You'll be informed and poised to take quick action. You need to forecast your sources and uses of cash at least on a monthly basis. If liquidity starts to get tight and funds are more difficult to acquire, you might want to consider going to a weekly forecast. Regulations may require that, based on how long the situation persists. The key here is to avoid any unwelcome surprises.2. Update your contingency funding plan (CFP) Your CFP is your liquidity crisis management guide, created for a future funding emergency. It gives a bank a deep view into the strengths and, perhaps, weaknesses of its liquidity. But nobody’s crystal ball is accurate enough to have predicted the events of early 2020. Review and revise your CFP as necessary. Work with your board and update those plans. Update your cashflow stress test scenarios to reflect this current environment. Test those contingency funding sources and make sure they’re still there and available. Also, review your collateral. Identify collateral accessible for pledging before it becomes necessary to do so.3. Review your loan portfolio and CD maturity schedule The maturity schedule of your loan and CD portfolios can help give you an understanding of where you're headed in the future. Start thinking about how you can reprice your loans as they come up for maturity and renewal to increase your net interest margin. If they don’t have rate floors, look for ways to insert those rate floors now.Also, examine your CD maturity schedule. Do you have good maturity later with relatively equal amounts maturing each month? Or do you have some large buckets all maturing at the same time? Rates are at rock bottom right now but are guaranteed to start rising. The impact to your NIM will depend on the pricing structure of your loan and CD portfolios, the extent to which loan yields are protected by rate floors when you made the loans and how you manage maturing CDs. 5. Prepare for staff changes As CFO, you've been dealing with numbers, liquidity, CFPs and every other fire you need to put out daily. You may have furloughed some of your staff, or your people may have been working at home because most branches aren't open beyond drive-through transactions. Your bank's business has still been going on because of their efforts.However, your staff has been dealing with this pandemic on a personal level as well. Families have been impacted, members of your staff may have contracted the virus, personal finances may be in flux. Your staff may not be ready to return to the bank for some time. Or, they may have been looking for new jobs while they were furloughed and wondering if they'd have jobs to return to. CFOs should prepare for this and make sure the chain of command for critical functions is intact.6. Strategize and drive necessary change All this focus on your bank's operations can have a silver lining. With your broader perspective as an evolving CFO, you may find improvements and opportunities that you hadn't noticed before. This might mean bolstering your CD maturity ladder, increasing your non-interest-bearing deposits and even creating improved communication and transparency with your staff.8. Create a plan for the future According to a timely report by McKinsey, "strong, steady leadership from the finance organization is critical" during the COVID-19 crisis and beyond. For the CFO, creating a plan that anticipates multiple future scenarios is the key to putting his or her bank in a position to thrive post-COVID-19. It will be vital to bolster your team's productivity, focus on rolling forecasts and look at ways technology can help.Empowering a performance banking mindset will also go a long way toward positioning your bank and your staff for a positive future. Your role as CFO is not just about helping your institution get through uncertain times, it's also about positioning the organization to thrive in the future.ABOUT THE AUTHOR: BARRY ADCOCK draws upon a deep understanding of financial institutions’ operations gained through almost 25 years’ experience in controller and CFO roles at THE BANKER’S BANK, GEORGIAN BANK and NORTHSIDE BANK. He holds a bachelor’s degree in business administration and accounting from Kennesaw State University and earned his CPA license from the State of Georgia in 1998.
48 » PA Bankers Associations we all have had to navigate the personal and professional impacts of COVID-19, we wanted to take a deeper dive into pandemic planning for the financial services industry.WHAT WE’VE LEARNEDWhile the outbreak continues to present challenges, institutions are now finding themselves either executing or developing procedures to return to the workplace. Their pandemic, crisis communications and business continuity plans have been invoked and many have learned how effective (or ineffective) their workforce can be from home. However, certain functions within financial institutions may not have the flexibility to have their entire workforce mobilize in a work-from-home environment. In certain situations, such as branch locations with drive-through and lobby hours, staggered staff and shift work are common solutions to ensure that institutions can continue to serve their communities while attempting to safeguard their employees. Likewise, many institutions have had to cross-train personnel to ensure that critical business processes remain available and effective. For many institutions, this crisis has been a true test to determine how prepared the institution is to safeguard their employees and sustain operations amid the outbreak, considering social distancing, travel restrictions and increased illness.What we have learned has highlighted the importance of having effective:• Risk assessment• Business impact analyses• Continuity strategies• Recovery strategies• Effective plans• Effective testing of those plans• Effective communicationsThe aforementioned foundational elements should have dedicated task force oversight with cross-functional leadership buy-in and clear objectives, to ensure that pandemic-specific actions can be effectively invoked and carried out.All institutions must consider how best to contribute to the decrease in the spread of COVID-19, while providing a safe haven for employees, customers and communities, while still focusing on the bottom line. Employers should identify and communicate their objectives, which include the following: • Reducing transmission among staff, • Protecting people who are at higher risk for adverse health complications, • Maintaining business operations, and • Minimizing adverse effects on other entities in their supply chains.Ongoing communication between the employee and employer is critical to ensure that awareness, expectations and risk exposure are continuously evaluated. This will help to define trigger points and drive the decisions to ensure that appropriate business decisions are made, while providing a level of assurance to your employees and customers.BEST PRACTICES AMID THE CRISISAs we continue to navigate the pandemic and re-enter the workplace, it is critical to continue to consider the following recommendations for the safety of employees and the continued heath of your business.• Require sick employees to stay home; isolate sick employees• Emphasize respiratory etiquette and hand hygiene to all employees• Perform routine environmental cleaning• Maintain awareness of international, domestic, regional and local travel restrictions• Maintain awareness of severity of the pandemic within your region and local communities• Mitigate the impact and exposure to high-risk employees• Prepare/monitor for employee absences due to: o illness of employees and family members o closures or restrictions of early childhood programs and K-12 schoolso restrictions of public transportationvendorARTICLESAOur Thoughts On: COVID-19 and Pandemic Planning for Financial Services
PA Bankers Association » Quarter 3, 2020 49• Implement plans to continue essential business functions, with anticipation of high absenteeism in critical roleso Cross-train personnel to perform essential functions• Assess your essential functions and the reliance that others and the community have on your services or products• Collaborate with customers on ways to continue to meet expectations, while mitigating the risk of exposure to each other• Coordinate with state and local health officials so that timely and accurate information can guide appropriate responses• Establish policies and procedures, such as travel restrictions, flexible worksites (e.g., telecommuting) and flexible work hours (e.g., staggered shifts), to increase the physical distance among employees and between employees• Ensure that policies and procedures are easily accessible to employees and provide clear instructions on how to conduct remote meetings, remotely connect to systems and where to check for updated information• Identify essential business functions and critical elements within your supply chains required to maintain business operations• Ensure business technologies can support the ability and capacity to efficiently and effectively work remotely o Secure and stress testing your remote capabilities and communication tools for performance issues• Identify and modify triggers and procedures for activating and terminating the company’s continuity and recovery plan• Establish a process for visitors that includes helping them to understand the threat and risk they could impose on your organizationo Where have they traveled recently?o Have they been in contact with anyone who has traveled recently?o Ascertain their contact with anyone that has traveled to restricted or known infectious areas recently.Throughout this process and as the pandemic spreads or even dissipates, institutions must effectively communicate their current and future plans with employees and customers. WHERE DO WE GO FROM HERE?Combining what we have learned thus far, with best practices, and collectively incorporating those items into our existing continuity and recovery strategies will help to ensure that institutions are prepared to navigate the potential “second wave” of the pandemic. If you have questions on pandemic planning for your organization, we would welcome a discussion on this increasing concern. How does your banking institution compare to others in the industry?Download our complimentary banking KPI benchmarks report:go.bakertilly.com/PABankersBaker Tilly US, LLP, trading as Baker Tilly, is a member of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. © 2020 Baker Tilly US, LLP ABOUT THE AUTHOR: ERIC M. FAIR, CISA, CBCLA. Eric is a manager in the RISK ADVISORY SERVICES practice at SCHNEIDER DOWNS. He joined Schneider Downs in 2011 and has nearly nine years of experience providing IT internal audit and risk advisory co-sourcing and outsourcing consulting services across various industries, including nearly four years of experience leading, managing, and mentoring a team of IT audit, security and risk professionals to successfully serve our clients. Eric is responsible for leading the engagement team to coordinate, conduct and review engagement deliverables, as well as ensuring effective communications to provide continued value to clients.
50 » PA Bankers AssociationvendorARTICLESoronavirus pandemic” and “COVID-19” are terms that have become common in our everyday conversations and continue to dominate the headlines of local and national news. From reading the news online to turning on the TV, we find ourselves as recipients in a constant stream of Covid-related statistics: recovery rates, total tests administered, tallies of positive vs. negative results and even death tolls. What does all of this mean in terms of personal impact to our employees and businesses? While much has been written about PPE, social distancing and CDC-guidelines for safe reopening of businesses, what is happening behind these stories? What are the real impacts? How are we able to continue serving and supporting our communities and the employees of the banks of Pennsylvania? Through the Bank Health Care Consortium of Pennsylvania (BHCCPA), under the leadership of the Pennsylvania Bankers Association Services Corporation, a recent meeting of more than 30 members enabled the banks to not only understand the cost of the health insurance claim impact on their bank, but other banks throughout the Commonwealth. In addition, the consulting teams of L.R. Webber and The Benecon Group, Inc. were able to share health claims and experience related to COVID-19 that over 500 other employers in Pennsylvania have experienced. This type of community and peer-to-peer engagement offered through membership in the BHCCPA manifests the phrase we’re all so familiar with; we are all in this together. HEALTH INSURANCE COSTS: WHAT HAS HAPPENED; WHAT CAN WE EXPECT? As of early August, the claims data for the 43 member banks in the BHCCPA reveals minimal claim activity for COVID-19. This data base represents over 10,000 employees and dependents. This result is in line with broader results other employers have seen throughout the Commonwealth. Benecon actuaries shared results with the BHCCPA from their recently modeled cohort of 100,000 employees, based on average employer demographics, to CDC data on hospitalizations on demographics. The result is that on average 1 in every 1,200 employees may need hospitalization for COVID-19. The health care actuaries of Benecon are anticipating an increase of claims directly related to COVID-19 of less 0.5%, this would include testing and the actual cost of care for COVID-19 for members of a bank’s health plan. This increase is more than offset by the reduction of utilization that has been seen throughout the months of April through July which has resulted in employer health care claims dropping over 30%. This is producing a period of record profits for insurance carriers. Members of BHCCPA are on a self-funded platform and as a result instead of producing a profit for the insurance carrier, they are seeing the reduction of health care expenditures fall to their bottom line. Further, the LR Webber team was able to share their observed data on COVID experience throughout their broader client base as well as offer solutions for the BHCCPA members to navigate through this period. Not familiar with self-funding? There may never be a better time to consider self-funding of your bank’s health insurance. With strained margins and the need to control expenditures self-funding of your health insurance through BHCCPA should be a serious consideration.EMPLOYEE WELLBEING & RESOURCES FOR BHCCPA MEMBERS As this pandemic continues to have a direct impact on our nation and the Commonwealth, there are mental health implications that extend beyond epidemiology and the virus itself. Many of our employees are often caretakers for relatives that may be in a demographic that is at a higher risk for adverse impacts from COVID-19. This can easily create stress and anxiety for those employees as they juggle caretaking concerns with their own work responsibilities.The vast majority of employers recognize that their employees are the most valuable asset in their organization. Employee wellbeing and safety are top organizational priorities. One area of employee wellbeing that may be less obvious is the mental health component. Have you noticed co-workers, family Bank Health Care Consortium of PA:Health Insurance Costs & Employee Wellbeing in the Era of COVID-19C“
PA Bankers Association » Quarter 3, 2020 51members or friends being more anxious or irritated than normal? How about yourself; have you stopped to think about how stress might be impacting your relationships? According to the National Institute of Mental Health (NIMH), “Coping with the impact of chronic stress can be challenging. Because the source of long-term stress is more constant than acute stress, the body never receives a clear signal to return to normal functioning. With chronic stress, those same lifesaving reactions in the body can disturb the immune, digestive, cardiovascular, sleep, and reproductive systems. Some people may experience mainly digestive symptoms, while others may have headaches, sleeplessness, sadness, anger, or irritability. Over time, continued strain on your body from stress may contribute to serious health problems, such as heart disease, high blood pressure, diabetes, and other illnesses, including mental disorders such as depression or anxiety.”Just as we need family and friends to help us discuss our emotional needs there are times when we need professionals that are trained and experienced to help us achieve mental and emotional wellbeing. These professionals (therapists, psychologists and mental health clinicians) are objective outsiders and offer expert-solutions for dealing with stress. Not sure where to turn? Most health insurance carriers have Employee Assistance Program (EAP) resources. Please check with your carrier for a list of referral resources. You may also find that there are several community resources that are complimentary or have a nominal cost. Here are a few we recently shared with our own clients:Mental Health Resources• www.mindfulness-solution.com• www.Mindful.org• University of Pennsylvania, www.authentichappiness.com• Apps available to download: Calm, Headspace, Smiling MindNutrition & Sleep Resources• Nutrition: USDA Choose MyPlate• Sleep: MedlinePlus Healthy SleepSpiritual Resources• “Spiritual Evolution: How We are Wired for Faith, Hope and Love” by George Vaillant Interpersonal Relationships & Connections Resources• National Institute of Health: Social Wellness Toolkit• Relationship Management, Emotional Intelligence 2.0 by Travis Bradberry and Jean Greaves.• Wellbeing: The Five Essential Elements by Tom Rath and Jim HarterFrom a business perspective, now is the most opportune time to address the issues of health care cost and employee wellbeing. The BHCCPA has the expertise, resources and programs that can positively impact your bottom line and strengthen your employees’ ability to deal with stress and anxiety during this challenging time. For more information please contact Cindy Wallett at firstname.lastname@example.orgARTICLESABOUT THE AUTHORS: BRAD KOPCHA, FSA, FCA, MAAA, EXECUTIVE VP ACTUARIAL SERVICES & BUSINESS DEVELOPMENT, THE BENECON GROUP, INC.CLAUDIA BURCHSTEAD, CSFS, SENIOR DIRECTOR, THE BENECON GROUP, INC.MARK KUNKLE, RETIRED CREDENTIALED MUNICIPAL MANAGER, LIFE MEMBER ICMA, MPA, CSFS, DIRECTOR PROGRAM MANAGEMENT, THE BENECON GROUP, INC.
52 » PA Bankers AssociationvendorARTICLESany banks across the country are at risk of CAMELS downgrades, increased deposit insurance assessment premiums, and regulatory enforcement actions due to inadequate risk management practices for their COVID-19 Loan Modification Program.Loan modifications have been part of most banks’ lending operations for many years. Before the coronavirus, such modifications were often prompted by a borrower’s “financial distress.” Banks would attempt to work with the financially distressed borrower by granting a “concession” that the bank otherwise would not consider for other borrowers with a similar risk profile. An example of such a loan modification might be an interest rate reduction from 5% to 3% for 12 months to help a financially distressed borrower. Generally speaking, this type of loan modification would be categorized as a Troubled Debt Restructure (“TDR”) under accounting literature (ASC 310-40) and captured as such in Call Reports. TDRs are considered impaired loans.MANY BANKS HAVE COVID-19 LOAN MODIFICATIONS APPROXIMATING 25% OF THEIR COMMERCIAL PORTFOLIO. When the country became engulfed with the coronavirus, both Congress (Section 4013 of the CARES Act) and the Regulators (April 2020 Interagency Guidance) issued material to guide banks on TDR designation for COVID-19 related loan modifications. It is critical for bankers to understand that while Section 4013 and the April 2020 Interagency Guidance both discuss the applicability of TDRs, they have materially different requirements (modification duration, date of record for current/delinquency status, etc.) for determining when the TDR designation is necessary. FinPro urges all banks to specifically designate whether the COVID-19 Loan Modification was approved under Section 4013 of the CARES ACT or under the April 2020 Interagency Guidance. This document should be in each loan modification file and address the following items:• Was the borrower impacted by COVID-19? Y e s ________ N o ________ • Was the modification pursuant to Section 4013? Y e s ________ N o ________ o If yes, was the loan was current as of Dec. 31, 2019? Y e s ________ N o ________ o If yes, was the loan modification was between March 1, 2020 and Dec. 31, 2020? Ye s ________ N o ________ • Was the modification pursuant to the Interagency Guidance? Ye s ________ N o ________ o If yes, was the loan current at time of modification? Y e s ________ N o ________ o If yes, was the loan modification short term (i.e. 6 months)? Ye s ________ N o ________ Remember that banks must maintain records on the number and dollar amount of loan modifications approved under Section 4013 and under the Interagency Guidance and report this data to the Board of Directors on a regular basis. THE TDR DETERMINATION IS ONLY THE FIRST STEP IN THE COVID-19 LOAN MODIFICATION PROCESS. Unfortunately, too many banks neglect to implement the second step in the COVID-19 Loan Modification process, which is vital to accurately identify, measure, monitor, and control the bank’s risk profile.Banks must properly “Risk Rate” COVID-19 Loan Modifications and incorporate such risk ratings into their ALLL/ACL calculations. Loans modified under Section 4013 or the Interagency Guidance pertain ONLY to borrowers who have been impacted by the coronavirus. By definition, these borrowers have financial performance less robust than before COVID-19. In some cases, these borrowers may have serious cash flow problems driven by the coronavirus that impact their ability to service their debt. It is incumbent on banks to accurately “Risk Rate” these borrowers at the time of loan modification and on a regular basis going forward. FinPro has COVID-19 Loan Modifications It is more than just a TDR issueM
PA Bankers Association » Quarter 3, 2020 53HELPING BANKS STAY COMPLIANT & AHEAD OF THE CURVE BY PROVIDING RESPONSIVE, FORWARD-THINKING & INNOVATIVE SOLUTIONS• Internal Audit• Model Validation• Staff Augmentation• BSA & AML Consulting• Regulatory Compliance• SOX & FDICIA Consulting• Enterprise Risk Management• Information Technology AuditsPrinceton, NJ - 609.689.9700 | Philadelphia, PA - 215.854.4059 Mercadien.comSalvatore Zerilli, CPA, CAMS Managing Director & Chair, Financial Institutions Servicesszerilli@mercadien.comFINANCIAL INSTITUTIONS SERVICES GROUPobserved that many banks have internally “risk rated” their COVID-19 loan modifications to a “watch” category.Moreover, these new risk ratings must be incorporated into the ALLL/ACL calculation. One “best practice” observed for community banks across the country is to establish a “homogenous pool sub-tier” within the ALLL/ACL methodology to break out all such loan modifications within each homogenous pool. Noteworthy, this approach is often used in conjunction with a new “COVID-19 Q-Factor” that many banks now incorporate their ALLL/ACL methodology. Some banks have actually appended a one- or two-digit code to COVID-19 loan modifications to ensure easy identification over time.Lastly, effective Corporate Governance is critical to avoid CAMELS downgrades and enforcement actions. Corporate Governance starts with a comprehensive documentation process. As noted earlier, banks must maintain records of all COVID-19 loan modifications, specifically noting whether such modifications were executed under Section 4013 of the CARES Act or the Interagency Guidance. Remember, modifications cannot fall under both categories since they have different (and competing) requirements. This information should be reported to the Board of Directors on a regular basis. Similarly, the management must inform the Board of Risk Rating trends for COVID-19 loan modifications and how such ratings have impacted the Bank’s ALLL/ACL. These actions, together with updated policies and procedures to incorporate coronavirus actions, robust MIS and Risk Management practices, and comprehensive Internal Controls will properly prepare banks to address any regulatory concerns. ABOUT THE AUTHOR: SCOTT POLAKOFF, CAMS, is executive vice president with FINPRO, a full-service management consulting firm specializing in providing advisory services to the financial institutions industry. He can be reached at email@example.com / www.finpro.us
54 » PA Bankers Association48 » PA Bankers Association pabankers.comPA Bankers Services Corporation Select Vendors Provide PA Bankers Members Savings, Service and Quality*As of 4/12/19ABA INSURANCE SERVICESBond, D&O, Cyber Insurance, and Employment Practices LiabilityPatricia Williams, (216) firstname.lastname@example.orgACCUME PARTNERSOutsourced Internal Auditing and Risk Management ServicesNicole Lloyd, (717) email@example.comAPPI ENERGYElectricity and Natural Gas Procurement Services, Utilities Management PlatformMargo Madden(667) firstname.lastname@example.orgANDERSON GROUPIntegrated Marketing and Communications and Business IntelligenceRay Melcher, (610) email@example.comAPPROVAL PAYMENT SOLUTIONS, INC.Merchant Processing, Search Engine Optimization, Website Design and Social Media ManagementDanielle Lausch, (717) firstname.lastname@example.orgTHE BAKER GROUP Asset/Liability Management Software and ServicesCharles Amis, (405) 415-7231Charlie@gobaker.com34 banks received credits in surplus of over $8.9 million in 2018 with an average net funding increase in single digits.Wayne Whipple, (717) email@example.com BANK HEALTH CARE CONSORTIUM OF PABITSManaged Service Provider for Voice and Data CommunicationChristian Ericson, (973) firstname.lastname@example.orgCOMMONWEALTH CHARITABLEMANAGEMENTCristine Clayton, (570) email@example.comCOMPLIANCE ALLIANCE Quality Compliance Services That Complement and Assist Internal Compliance PersonnelWayne Whipple, (717) firstname.lastname@example.orgCORNERSTONE ADVISORSCore, Debit EFT, Card Program, Loan Origination, Bill Pay, Mobile Banking & ATM Contract NegotiationJennifer Wagner, (480) email@example.comCRA PARTNERSReceive High-Yielding CRA CreditTerry B. Rooker, (901) 529-4781terry.rooker@SHCPFoundation.orgPA Bankers Services Corporation Select Vendors Provide PA Bankers Members Savings, Service and QualityPA Bankers Services Corporation Select Vendors Provide PA Bankers Members Savings, Service and Quality
PA Bankers Association » Quarter 3, 2020 55 PA Bankers Association » Quarters 1 & 2, 2020 49* Vendor 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 financial support expands resources and strengthens the services and programs of the PA Bankers Association.ONE POINTOutsourced Internal Purchasing, OfficeSupplies, Inventory Control and IPAddress Marketing/SalesPat McMahon, (570) firstname.lastname@example.org PWC:FONT: Handwriting-draft_free versionCampbell:FONT: Century Gothic _ RegularIcon-MarbleBUILDING CONFIDENCE...:FONT: Handwriting-draft_free versionPMS485Black 80%CMYK CMYK CMYK CMYKCMYK CMYK CMYK CMYKIcon-BridgeB-90% B-ScreenBlack 80%PWCAMPBELLPlanning, Design Coordination,and Construction ManagementErin Campbell, (800) email@example.com INVESTORS TITLE INSURANCE COMPANYMulti-Bank Owned Title Insurance ProgramKaren Barnett, (419) firstname.lastname@example.orgTHE KAFAFIAN GROUPPerformance MeasurementRobert E. Kafafian(973) 299-0300 email@example.comL.R. WEBBERMultiple Medical, Drug, Dental & Vision Options and EB SolutionsBrad Webber, (814) firstname.lastname@example.orgNCONTRACTSIntegrated Compliance, Vendor and Risk ManagementMichael Harrison (888) 370-5552 Michael.Harrison@ncontracts.comKEYSTATE CAPTIVE MANAGEMENTBrian AmendManaging Director & VP Sales, Eastern Region(302) email@example.comGRADIENT CYBERAutomated CAT Tool & Digital Forensic Investigation, Network Consensus CybersecurityChris Warman, (412) 600-7860 firstname.lastname@example.orgDEALERTRACK COLLATERAL MANAGEMENT SERVICES, INC.Electronic Lien and Title ProgramWayne Whipple, (717) email@example.comDELUXE CORPORATIONCheck ProgramTodd Wroblewski, (724) firstname.lastname@example.orgNFP EXECUTIVE BENEFITSBOLI, Executive Compensation and Long-Term Care David Shoemaker, CPA/PFS, CFP® (901) email@example.comTHE FULCRUM GROUP INTERNATIONAL, INC. Reviewing, Re-negotiating and Bidding Check Printing RelationshipTed Amon, (770) 736-5787 firstname.lastname@example.orgGLOBALVISION SYSTEMS, INC.Anti-Money LaunderingCatherine Lew(818) 998-7851 email@example.com
Cornerstone Advisors SolutionsPennsylvania Bankers Association members can uncover cost savings, line up enhanced revenue and drive improved eciency and performance working with Cornerstone Advisors.crnrstone.comContract NegotiationsWhen you partner with Cornerstone Advisors, decades of experience negotiating hundreds of contracts work in your favor. Cornerstone’s skilled team negotiates aggressively on your behalf to produce a contract that delivers:Competitive, market-based pricing Best in class legal terms An improved vendor relationshipWith Cornerstone on your side, you are always in control and can expect the very best results from your vendor contract negotiations.Technology DiagnosticCornerstone’s IT Expense Diagnostic is designed to identify areas where you can reduce, redirect or eliminate spend for IT stang, professional services and/or contractors based on a revised project load for 2020. The diagnostic helps you rationalize and prioritize future projects based on the application of business case ROIs in the COVID/post-COVID environment. Cornerstone’s diagnostic helps you:Identify and eliminate redundancy Improve pricing Increase savings opportunities Achieve greater transparency in thedecision-making processDelivery Channel OptimizationCornerstone Advisors stands ready to help you do the work to improve earnings potential in 2020. Contact us today.Payments OptimizationNo area of ﬁnancial services has seen more changes and new entrants than the payments arena. With payments revenue accounting for as much as 40% of an institution’s non-interest income, banks must take a proactive approach to protect and grow this revenue engine to its fullest potential. Cornerstone Advisors helps you take control of your payments business and beneﬁt with:Increased revenue Reduced expenses Minimized risk exposureCOVID-19 has accelerated the number of consumers embracing digital banking oerings. Now more than ever, banks need to transform the digital channels that customers require for their payments and banking activities. Cornerstone can help you set a strategy, select and implement the right systems, and drive a return on your channel investments to oset compressed earnings in 2020. When you partner with Cornerstone, you gain:A delivery channel transformation An enhanced customer experience Increased customer loyaltyJennifer Wagner firstname.lastname@example.org 602.770.4220
PA Bankers Association » Quarter 3, 2020 57aba.com/UnConPAUNCONVENTIONAL A VIRTUAL EXPERIENCE FROM ABAOCTOBER 19 – 20 2020Un•con•ven•tion•al, adj.uncommon, different, interesting and out of the ordinaryIt’s a dening moment for the banking industry. And we’re planning something big. Join us on-screen as we come together to think differently, collaborate and strategize, and focus on the future. REGISTER NOW
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3897 North Front StreetHarrisburg, PA 17110As a strategic partner to more than 140 banks,we never stop working to adapt to change, quickly and eiciently.As the world experiences unprecedented changes, history shows that change is more oen the rule than the exception. The same can be said for the world of banking. And when it comes to changes in banking, you should rely on the experts. As The Banking Experts, we have only worked in banking, every hour of every day, every week of every month, for more than 70 years. In fact, no other accounting and consulting firm possesses greater knowledge of community banks’ needs, challenges, and opportunities than S.R. Snodgrass — which is why, in a world, that never stops changing, we’ll never be stay the same. If you think our unrivaled banking expertise and personalized service could benefit your bank, please allow us to introduce ourselves. We’d be delighted to meet you.www.srsnodgrass.com/banking(833) 404-0344WE’LL NEVERBE THE SAME.As a strategic partner to more than 140 banks,we never stop working to adapt to change, quickly and eiciently.As the world experiences unprecedented changes, history shows that change is more oen the rule than the exception. The same can be said for the world of banking. And when it comes to changes in banking, you should rely on the experts. As The Banking Experts, we have only worked in banking, every hour of every day, every week of every month, for more than 70 years. In fact, no other accounting and consulting firm possesses greater knowledge of community banks’ needs, challenges, and opportunities than S.R. Snodgrass — which is why, in a world, that never stops changing, we’ll never be stay the same. If you think our unrivaled banking expertise and personalized service could benefit your bank, please allow us to introduce ourselves. We’d be delighted to meet you.www.srsnodgrass.com/banking(833) 404-0344WE’LL NEVERBE THE SAME.