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CBA Today eNewsletter - July 2, 2014 - Community Bankers Association of GeorgiaJuly 2, 2014EventsLeadership Division Hits It Out of the Park!Upcoming EventsCBA UniversityIndustry RepresentationLegislative UpdatesMember ServicesAbout CBAConferencesConventionsUnder the Florida sun and on its gorgeouseast coast beach, Georgia communitybankers, associate members andcolleagues from around the countrygathered at The Ritz-Carlton, AmeliaIsland, for the wildly successful LeadershipDivision Convention and Mini-Trade Show."OurLeadershipDivisionmembersexceeded most of the very ambitious goals they set this year; therefore, it was onlyfitting their achievements be celebrated with a fantastic convention!” stated CBAPresident & CEO Rob Braswell. “This is a dynamic group that continues to flourishand impress. The future of Georgia banking is definitely in good hands.” TheConvention was emceed for the first time by CBA’s beloved friend and speaker,Charles Williams of MACS and Speaker Connection, Eastman, and he certainlyhelped the crowd relax and have fun.SchoolsTraining the CreditAnalystJuly 9-10CBA HeadquartersAtlantaWorkplace Law &Compliance ProgramWorkshop IIJuly 17AtlantaWorkplace Law &Compliance ProgramWorkshop IIJuly 24MaconClick here to see highlights of the action-packed convention!WebinarsBanker Regulatory ForumsCBA ResourcesCompliance2014 Georgia FinancialDirectoryCareer CenterSuperior Products.Significant DiscountsFDIC RegulatoryCalendarSalary SurveyCash Flow AnalysisA CBA Endorsed Member CompanyCBA Today eNewsletter - July 2, 2014 - Community Bankers Association of Georgia.html[10/27/2014 11:42:12 AM]

CBA Today eNewsletter - July 2, 2014 - Community Bankers Association of GeorgiaA Special Thanks to the2014 Convention Sponsors and Exhibitors! Atlanta Gets A- for Small Business Friendliness;Georgia in Top 10Atlanta Business Chronicle reports Atlanta has received an A- inan annual survey that gauges small business friendliness in citiesacross the country. The survey was conducted byThumbtack.com in partnership with the Ewing Marion KauffmanFoundation using information from more than 12,000 smallbusiness owners."After a two-month survey of thousands of small business ownersnationwide, Atlanta has received one of the highest grades foroverall friendliness given by the local small business community,"said Jon Lieber, Chief Economist of Thumbtack. "Creating a business climate that iswelcoming to small, dynamic businesses is more important than ever, and lawmakersin Atlanta understand what it takes to make an environment like this."The top rated cities overall are Colorado Springs, Colo; Boise, Idaho; Austin andHouston, Texas, and Louisville, Ky. The lowest rated include Sacramento and SanDiego, Calif., and Providence, R.I.Other Atlanta findings include:Georgia was one of the top 10 friendliest states in the nation.Small business owners said that Atlanta could stand to improve its training andCBA Today eNewsletter - July 2, 2014 - Community Bankers Association of Georgia.html[10/27/2014 11:42:12 AM]

CBA Today eNewsletter - July 2, 2014 - Community Bankers Association of Georgianetworking programs, which were one of the strongest determinants of overallfriendliness in the study.Fifty-three percent of business owners in Atlanta reported that they paid "theright share of taxes," in line with the national average.Atlanta's earned a B from small business owners in regard to environmentalregulations.The survey results come just as CNBC has named Georgia the top state in the countryto do business. Click here to read more.Proposed Regulatory Capital Reporting ChangesThe Federal Deposit Insurance Corporation (FDIC), theFederal Reserve Board (Board), and the Office of theComptroller of the Currency (OCC) (collectively, theagencies), under the auspices of the Federal FinancialInstitutions Examination Council (FFIEC), recently wrote aletter requesting comment on proposed revisions to the risk-weighted assets portionof Schedule RC-R, Regulatory Capital, in the Consolidated Reports of Condition andIncome (Call Report). As the FFIEC has previously advised, the agencies areproposing to replace existing Part II, Risk-Weighted Assets, of Schedule RC-R with arevised version of Part II that would incorporate the standardized approach forcalculating risk-weighted assets under the revised regulatory capital rules approvedby the agencies in July 2013 (see FIL-41-2013, dated September 24, 2013, and FIL-32014, dated January 22, 2014). The agencies also are proposing to revise thereporting of securities borrowed in Call Report Schedule RC-L, Derivatives and OffBalance Sheet Items. These proposed changes would take effect as of the March 31,2015, report date. Click here to read the full letter.How Regulators are Shaking Up Small Bank Cyber ReviewsAmerican Banker reports community banks and credit unionswith inadequate programs to fight cyber risk may soon behearing about it from their examiners. The regulators' newcybersecurity assessments — now being piloted for over 500community-sized institutions as part of regular safety andsoundness exams — are meant largely to help authoritiesgauge cyber-risk readiness at smaller companies that lack themega-resources available to the big banks.But the new reviews appear to be more than academic. Officials say issues arisingduring an assessment may be identified in an institution's formal exam report."If we find issues, absolutely we are telling examiners that, based on the existingguidance, they need to inform management of the institution about where theirCBA Today eNewsletter - July 2, 2014 - Community Bankers Association of Georgia.html[10/27/2014 11:42:12 AM]Connect with CBAon LinkedIn,Facebook &Twitter!

CBA Today eNewsletter - July 2, 2014 - Community Bankers Association of Georgiaprogram may be lacking," said Valerie Abend, senior critical infrastructure officer atthe Office of the Comptroller of the Currency. "Where it is something that followscurrent policies, the finding will be part of the examination report."Sources familiar with the situation say regulators may also identify deficiencies,through less formal communication, that go beyond existing guidance. The FederalFinancial Institutions Examination Council announced the assessments last month,and introduced them earlier this month for 500 institutions that were next up in theschedule of normal safety and soundness exams. This initial round of assessments isexpected to last through mid-July. Whether additional community banks and creditunions will be included has not yet been decided. Click here to read the full article. Why Smaller Banks Are Buying Employee Life InsuranceAccording to American Banker, smaller banks are slowlyadopting bank-owned life insurance as a way tocounter shrinking loan margins and diminished returns onother investments. Community banks have traditionally beenreluctant to buy life insurance on key employees, a commonpractice among big banks. But since the recession, highercapital requirements and other factors have made bank-owned life insurance, orBOLI, increasingly attractive. The insurance offers tax breaks and counts as Tier 1capital, while producing higher yields than most Tier 1 investments."The interest in BOLI has really spiked in the past three years or so, once some bankswere past the recession and past dealing with real-estate woes," says David Fritz,managing partner of Executive Benefits Network. "For banks that had excess liquidityand a lot of money sitting in Fed funds, the opportunity that BOLI offered was too hardto ignore." Click here to read the full article.ICBA Touts Community Bank Business Lending on PBSNewsHourICBA explained the role of community banks in small-business lending on the PBSNewsHour.In the segment, ICBA Executive Vice President of Congressional Relations and ChiefEconomist Paul Merski said community banks specialize in small-business lendingbecause they are local, relationship lenders. Knowing the local market helps ensurebetter lending decisions and rates that are favorable for small-business owners,Merski said.The segment follows a recent Washington Business Journal interview with ICBAPresident and CEO Cam Fine on the need for tiered banking regulation. Watch theSegment.Some Banks are Heading to the Cloud – More are Planning ToForbes reports a recent survey of 29 senior technologyexecutives at financial institutions found that cloudcomputing holds the potential to redefine therelationship between corporate tech departments andfinancial institution business units. More important, thechange is coming at a time when costs and regulatorycompliance are high priorities, according to the BostonCBA Today eNewsletter - July 2, 2014 - Community Bankers Association of Georgia.html[10/27/2014 11:42:12 AM]

CBA Today eNewsletter - July 2, 2014 - Community Bankers Association of Georgiabased Aité Group.The different demands enable banks to choose from several types of cloudapplications such as private clouds, for the more sensitive data, and public clouds tostore other information. More frequently, banks are going with a hybrid model thatcombines the two, Aité Group analyst David Albertazzi said.“I think the new solutions are much better in terms of technology and therefore theyare being viewed as less risky,” he said.The Aité Group found that 50 percent of those surveyed responded that they werelikely or highly likely to use private clouds in the next 24 months. Earn More on SBA Loan SalesFor community banks that sell the 75% federalgovernment guaranteed portion of their Small BusinessAdministration loans, there is now the option to sell anadditional 15 percentage points (or 60% of the retainedportion) of the non-federal government guaranteedportion into a newly structured market.New Wave Market Makers has closed several transactions for Georgia banks, andexpanded the SBA Tails Program to more selling community banks. The selling banktypically receives premiums between 103.5% to 105.0%, net of selling and structuringexpenses. “The premium is determined by calculating the spread over the Prime Rate,the premium amortization over the life of the loans and a charge off adjustment basedon the NAICS codes,” said Walter H. Roder II, the Managing Principal of New WaveMarket Makers.“The key advantages for the selling community banks are the bank can originate up to60% more SBA loans with the same capital and/or reduces the exposure to chargeoffs by 60% - the SBA bank retains only 10% of the SBA loans originated,” Rodercontinued.The other benefits to the selling bank are the sale is on a non-recourse basis as loanparticipations, with the servicing fee retained by the selling bank – 1.00%, withcomplete control of collection and recovery activities and without the prior approval ofthe regulators for the selling banks or the purchasing credit unions.Roder explained that SBA Tails are the non-federal government guaranteed portion ofSBA loans and represent the 15% of the 25% retained by SBA lenders or 60%.Buyers of SBA Tails own 60% of the non-guaranteed portion of the loans. Theguaranteed 75% portions are regularly sold into the secondary market at typically112% to 115% premiums. SBA Tails are sold on a non-recourse basis. Even thoughnot guaranteed, credit losses have been historically low and are shared on a proratedbasis. As a 15% owner, 60% of all payments, collections and recoveries of theretained portion are shared with the buying credit unions. All loan participations areportions of 7(a) SBA loans, with typically 25-year or 10-year terms and variable rates.The program has been fully vetted by a well-known law firm covering all of the SBA,CBA Today eNewsletter - July 2, 2014 - Community Bankers Association of Georgia.html[10/27/2014 11:42:12 AM]