View
1
Download
0
Category
Preview:
Citation preview
Update On NCYB Message From The Chairman Health Savings Accounts
The Harry A. Davis Professorship
The Walker School of Business at Appalachian State University
Names Professorship in Dr. Davis’ Honor
© 2016 First Tennessee Bank National Association. Member FDIC.
TALK TO A RELATIONSHIP MANAGER ABOUT YOUR BANK’S NEEDS. CALL 800-453-7686 OR EMAIL CORRESPONDENTSERVICES@FTB.COM
First Tennessee Correspondent Services offers a range of robust financial and business solutions
to support community banks. When you work with First Tennessee, you’ll get the personal attention
that’s made us a continuous provider of correspondent services for over 100 years.
First Tennessee Correspondent Services include:
Holding Company Loans | Fed Funds | Letters of Credit | International Services
Image Cash Letter | Settlement Services | Safekeeping
4 Carolina Banker Summer 2016
Carolina Banker
in this issue
SUMMER 2016WWW.NCBA.COM
The NCBA is proud to announce that the Walker College of Business at Appalachian State University (ASU) has introduced the Harry A. Davis Professorship in honor of the tremendous service and lasting impression Dr. Harry A. Davis, NCBA economist and professor of banking at ASU, has had on both the University and on the banking industry in our state. This Professorship, named in Harry’s honor, will allow the Walker College of Business to attract and retain talent to teach, conduct research and perform service in the field of banking and finance. Cover photo taken by Ray Barbour of Ray Barbour Photography.
on the cover
Carolina BankerThe award-winning magazine published quarterly by Community Bank Services (CBS), a wholly-owned subsidiary of the NCBA, as a continuation of The Tarheel Banker since July of 1922.
Editor Kathleen Rollinson
Circulation:Subscription:
5,000+$12 per year
Mailing Address:
Phone:Email:
P.O. Box 19999Raleigh, NC 27619(919) 781-7979kathleen@ncbankers.org
features
[6] From The President’s DeskBy: Peter Gwaltney
[34] Q&A With Congresswoman Virginia Foxx
[59]
[34]
[59]
Introducing The Dr. Harry A. Davis Professorship At The Walker College Of BusinessBy: Kathleen Rollinson
5Summer 2016 Carolina Banker
Officers & DirectorsBob Hatley, Raleigh
ChairmanRick Callicutt, High Point
Vice ChairmanMike Ayotte, MorgantonImmediate Past Chairman
Peter GwaltneyPresident & CEO
Larry Barbour, RaleighWendell Begley, Black Mountain
Scott Custer, RaleighRon Day, Raleigh
Denis de St. Aubin, Siler CityCharles Frederick, Asheville
Mark Holmes, WilsonHarold Keen, Smithfield
Bob Reid, CharlotteKari Stoltz, Raleigh
North Carolina Bankers Association Staff
Peter Gwaltney, President & CEOGrace Sampson, Sr. VP & Secretary / PAC Treasurer
Nathan Batts, Senior Vice President & CounselMeghan Best, Vice President & Chief Financial Officer
Dawn Thompson, VP & Associate CounselVickie Bowers, Director of Human Resources
Christy Santacana, Meetings DirectorKathleen Rollinson, Director of Communications
Brianna Reeder, Director of Professional DevelopmentBlaine Wiles, Director of Community Outreach
Frank Youngblood, Operations CoordinatorTina Dilio, Receptionist
Community Bank Services (CBS) StaffKim Hutchens, Executive Vice President
Lauren Perry, Vice PresidentJanice Royster, Director of Endorsed Vendor Programs
Community Investment Corporation of the Carolinas (CICCAR) Staff
David Bennett, Executive Vice PresidentJohn Bocciardi, VP/Asset and Compliance Manager
Cindy Wiggins-Tiede, Senior UnderwriterShellie Lempert, Servicing and Closing Manager
Vikki Conley Ikard, Portfolio Analyst
ConsultantsRobert A. Singer, Greensboro
Corporate CounselDr. Harry M. Davis, Boone
NCBA Economist and Dean of the NCBA’s North Carolina School of Banking at UNC-Chapel Hill
contentFrom The President’s DeskBy: Peter Gwaltney
[6]
Faces In The News
Around The State
[8] A Message From The ChairmanBy: Bob Hatley, Paragon Bank
Why Your Bank’s Data May Be Inadequate For CECLBy: Emily Boga, Sageworks
[12] Legal Corner: Bankers Take The Capitol By StormBy: Dawn Thompson
[16] 2016 Bank Directors Assembly
[22] Update On North Carolina Young Bankers DivisionBy: David Allen, Bank of North Carolina
[26] The LIHTC Program At 30 - Past Results, Future NeedsBy: David Bennett
[30] A Primer To Understanding Golden Parachute PaymentsBy: Thomas P. Hutton, Luse Law
[50] Financial Literacy Update: How Early Should We Teach Financial Literacy?By: Blaine Wiles
[32] 2016 Washington Bank Caucus
[34] Q&A With Congresswoman Virginia Foxx
[37]
[70][73]
[41] What Keeps HR Executives Awake At NightBy: Kim Hutchens
[47] North Carolina Interest On Lawyer’s Trust Account Program ReportBy: Evelyn Pursley, NC IOLTA
Banks Backing Their Communities[74]
[44] 2016 American Mortgage Conference
[55] News From CICCAR
[18] Health Savings AccountsBy: Kevin Boyles, Ascensus
[56] Employee Benefits Update: Workplace Wellness: Simple Steps To A Successful ProgramBy: Lauren Perry
[59] Introducing The Dr. Harry A. Davis Professorship At The Walker College of BusinessBy: Kathleen Rollinson
[62] The Risk Of Unintended Consequences: Applying A One-Size-Fits-All Rule With Respect To Payoff & Reinstatement QuotesBy: Graham Kidner, Hutchens Law Firm
[64] North Carolina Member Feature: Richard Jefferson
[66] A Message From The Incoming ChairmanBy: Rick Callicutt, Bank of North Carolina
6 Carolina Banker Summer 2016
President’s Message
FROM THE PRESIDENT’S DESK
When Congress turned a cold shoulder to the banking industry this past De-cember by eliminating a common sense package of bi-partisan regulatory reforms from a year-end omnibus spending bill, it signaled that Congress sees little risk in upsetting their bankers back home. The clear message from NCBA members, and bankers across the nation, is that com-munity banks are suffering from today’s regulatory burden, and the frustration isn’t just about Dodd-Frank. It’s about decades of ill-fitting one-size-fits-all regulations that have forced many community banks to either give up and sell, merge or acquire other banks in order to achieve the neces-sary scale to spread rising expenses over a larger organization. This trend has been compounded by a long trough of histori-cally low interest rates, but that’s not the only cause.
Some in Congress understand the impact all of this has had on customers and communities, but more need to be “converted.” To do this, bankers, the ABA and state bankers associations must work together in a more coordinated fashion to push back the negative narrative that has affected all banks since the financial crisis and tell the story of how customers and communities are being harmed by today’s regulatory environment. The banking in-dustry must also build our political muscularity to the point where Congress and the Administration understand the real-world impact of their inaction and become more motivated to act.
The way the banking industry has com-municated with Congress in the past will not be enough to move the needle in the future. For example, the full-court press led by the ABA and coordinated through
Peter Gwaltneyis president and CEO of the North Carolina Bankers Association.
the NCBA (and our fellow state bankers associations) prior to the passage of the omnibus spending bill involved inside the beltway radio and print publications, mes-sages through all forms of social media and an easy-to-sign online petition that collect-ed more than 20,000 signatures. Sounds impressive, but it wasn’t enough. We were ignored. As impressive as 20,000 signatures sounds, it’s only 1 percent of the banking industry’s 2 million employees.
Bank employees and directors represent voters, and public officials respond to voters. For most banks represented on the petition for regulatory reform, only the CEO and senior officers signed. There is strength in numbers, and in the future we’re going to have to involve our people – as many of our 2 million employees as possible.
In addition to grassroots advocacy, finan-cial resources will be needed to build our political muscularity and clout on Capitol Hill. The three political funding vehicles described below are components of the NCBA political engagement strategy. Each plays a unique role in our efforts to sup-port friends of banking in Congress and the North Carolina General Assembly, or to replace those who are detrimental to the interests of the banking industry.
NC Bank PAC
The NC Bank PAC is the centerpiece of NCBA political engagement. Approxi-mately half of the money collected by NC Bank PAC is spent on contributions to members of the North Carolina congres-sional delegation, and the other half is spent on contributions to members of the General Assembly. All contributions to
7Summer 2016 Carolina Banker
elected officials are reviewed and approved by the NCBA Legislative and Regulatory Committee or the NCBA Board of Di-rectors. A growing number of banks in North Carolina are inviting all employees to contribute to NC Bank PAC, and some are making it easy to contribute by offer-ing payroll deduction. The NCBA offers payroll deduction to our staff of 19, and 100 percent of our staff has contributed a total of $3,000. Our NC Bank PAC goal for 2016 is $125,000. I will be visiting our member banks over the remainder of this year to express gratitude for NC Bank PAC support and to encourage participation. Increasing our political engagement is our top priority this year and will be reflected in how my time and energy is spent for the remainder of this year.
The Fund for Economic Growth
Later this year, the NCBA will begin soliciting corporate contributions from all NCBA member banks to the ABA’s Fund for Economic Growth. The Fund for Economic Growth is a 501(c)4, commonly referred to as a Super PAC. The Fund for Economic Growth will focus a portion of its efforts educating consumers and politi-cians on banking issues, while the other portion will be spent on advocacy for bank-friendly candidates in strategic U.S. House and Senate races nationwide. Ed Willingham, chief operating officer, First Citizens Bank in Raleigh, serves on the Board of Directors of the Fund for Eco-nomic Growth. We will work closely with Ed to communicate the goals and objec-tives of the Fund and to encourage support among North Carolina banks.
Friends of Traditional Banking
Friends of Traditional Banking (FOTB) is a non-partisan grassroots effort, organized by bankers. FOTB chooses two Congres-sional races each cycle, and encourages its membership to donate directly to those campaigns. FOTB is the inverse of a PAC
- instead of spreading a little bit of money to a lot of campaigns, it focuses a large sum of money on a couple of key campaigns. NCBA members will be hearing more about FOTB in the future and will be encouraged to get involved. The only way to affect change in Congress is to defeat those who are not friendly to banking, and that’s what FOTB seeks to do.
These are important tools the NCBA and bankers across the nation will be using this year and in the future to in-crease our political muscularity in our nation’s capital and create a more con-ducive environment for banks to grow, prosper and serve your communities.
In closing, I want to express my sin-cere gratitude to Bob Hatley as he wraps up his term as NCBA chairman this month. Bob’s enthusiasm for the work of the NCBA has permeated our organization and has been a source of constant encouragement for me and our staff. Bob has made himself available for countless conversations and meetings and has represented the NCBA with passion and professional-ism across North Carolina and on the national level. Under Bob’s leader-ship, we’ve increased and encouraged member engagement in NCBA events and activities, encouraged PAC partici-pation and political engagement at all levels in our member banks, and we’ve actively promoted economic develop-ment in North Carolina. Please join me in thanking Bob for a job well done! All the best,
CB
8 Carolina Banker Summer 2016
A MESSAGE FROM THE CHAIRMAN
Bob Hatley is president & CEO of
Paragon Bank and is chairman of the North
Carolina Bankers Association (NCBA).
It has been an honor and a joy to serve
as chairman of the North Carolina
Bankers Association (NCBA) these
past 12 months. The time has flown.
Reflecting on my tenure, I want to
mention our group’s leadership. We are
fortunate to have Peter as our presi-
dent, and to have the support of such
a capable and energetic staff. While
attending various meetings and con-
ferences with Peter, I’ve observed just
why he enjoys such an excellent repu-
tation among our professional peers
in the ABA, ICBA and other banker’s
associations.
The NCBA is one of the nation’s top
five bankers associations. With a solid
foundation, a very strong financial
statement, and balance sheet liquidity,
the organization does well at generat-
ing annual cash flow to support our
mission.
Peter’s entry has solidified these
strengths. He remains very involved
in our Association’s financial decisions
and takes his fiduciary responsibility
seriously—protecting the member-
ship’s assets. As with any strong leader,
Peter oversees a very supportive staff
of capable people who enjoy working
with such a fine organization.
The combination of leadership and
staffing help to maintain our lofty
reputation and support the mission of
maintaining relevance and vitality for
banking in North Carolina and across
the country.
I began in June of 2015 with three goals
for myself and the NCBA:
• Support Banking Com-
missioner Ray Grace in his
quest for new bank forma-
tions:
As with the rest of the country,
this has been a challenge in
North Carolina. In fact, there
has only been one new bank
charter in the past 12 months.
New bank formation is critical
to our communities. However,
this will remain difficult until the
regulatory landscape softens and
investment incentives return.
This is a work in progress.
• More involvement from
member banks both large and
small:
We have added directors to our
board from some of our larg-
est and smallest banks. The
large contingent that visited
Washington in April to voice
our concerns is evidence of the
Association’s broad engagement
level. The relevance of banking
in North Carolina is dependent
upon each member’s activity in
the various areas of the Asso-
ciation. Peter and I are working
to establish socials across the
state, so bankers and legisla-
tors can get to know each other
better.
• 100 percent participation
in the NC Bank PAC:
We are not there yet, but we
are well on our way. The NC
Bank PAC and two new orga-
nizations— Friends of Banking
and The Fund for Economic
Growth—help ensure that our
elected officials support and
protect our industry, both in
Raleigh and in Washington.
These three organizations pro-
vide opportunities for corpora-
tions to support congressmen/
women who support banking.
The NCBA, ABA and ICBA are
more active in the political and
regulatory arenas than ever be-
fore, and North Carolina bank-
ers are more engaged than ever.
I am very proud of our effort.
Finally, thank you to our board of
directors for your energy and support.
Particularly, I’d like to recognize the
directors whose terms are expiring:
Harold Keen, KS Bank, Smithfield
Mike Ayotte, Morganton Savings
Bank, Morganton.
Larry Barbour, North State Bank,
Raleigh.
Denis de St. Aubin, Old North State
Bank, Siler City.
Charles Frederick, TD Bank,
Asheville.
Kari Stoltz, Bank of America, Raleigh.
I have very much enjoyed serving you,
and I appreciate your confidence.
HOLD FOR CFNC HALF
PAGE AD HERE
CB
866-866-CFNC (2362)
CFNC is a service of the State of North Carolina provided by Pathways (the NC Department of Public Instruction, the NC Community College System, the NC Independent Colleges and Universities and The University of North Carolina), College Foundation, Inc., and the NC State Education Assistance Authority.© 2016 Pathways, College Foundation, Inc. and State Education Assistance Authority (CFNC)
attorneys
Providing Legal Advice to Banks, Boards and Executive Management for Over 20 Years
Mergers and Acquisitions Corporate Governance
Stockholder Relations/Proxy Contests Charter Conversions
Capital Raising Transactions Executive Compensation
Corporate Reorganizations Employee Benefits
Compliance and Enforcement Initial Public Offerings
Bank Regulation Stock and MHC Conversions
5335 Wisconsin Avenue, N.W. Suite 780
Washington, DC 20015 (202) 274-2000 www.luselaw.com
Eric Luse (202) 274-2002
eluse@luselaw.com
John J. Gorman (202) 274-2001
jgorman@luselaw.com
Lawrence M.F. Spaccasi (202) 274-2037
lspaccasi@luselaw.com
Kent M. Krudys (202) 274-2019
kkrudys@luselaw.com
Kip A. Weissman (202) 274-2029
kweissman@luselaw.com
Thomas P. Hutton (202) 274-2027
thutton@luselaw.com
11Summer 2016 Carolina Banker
CAMP CHALLENGEGIFT PLANNING
Blaine Wiles director of community outreach, NCBAPhone (919) 781-7979Fax (919) 881-9909 Email blaine@ncbankers.org
“At Square 1, we believe it is important to invest in access to opportunities for learning and development for today’s children and youth - the future leaders of our communities. Camp Challenge has provided an excellent framework and environment to encourage these opportunities, and we are proud to continue our support of their efforts.”
Square 1 Bank, a division of Pacific Western BankEvan Sitton, Vice PresidentCRA & Community Development
12 Carolina Banker Summer 2016
Legal Corner
Dawn Thompson is vice president,
national legislative affairs and associate counsel of the North
Carolina Bankers Association.
BANKERS TAKE THE CAPITOL BY STORM
More than 30 North Carolina bankers,
bank board members and bank attorneys
attended this year’s Washington Bank
Caucus, held at The Willard in Washing-
ton, D.C., to carry the flag for the banking
industry and voice our concerns at the
Capitol. We had a diverse group this year
representing banks of all sizes and charters,
urban and rural, providing an accurate
cross-sampling of our statewide industry.
The primary goal of our annual Washing-
ton Bank Caucus is to advocate on behalf
of the North Carolina banking industry
on regulatory relief, credit union taxation,
regulatory reform and other banking re-
lated issues. Attendees maintained a stren-
uous pace over the two-day trip, meeting
with federal financial regulatory agencies,
including the Office of the Comptroller
of the Currency (OCC), Federal Deposit
Insurance Corporation (FDIC), Consumer
Financial Protection Bureau (CFPB) and
Federal Reserve (Board), in addition to 13
of the 15 member North Carolina Congres-
sional delegation.
Federal Financial Regulatory Agency
Visits
Day one of our Washington Bank Caucus
started with breakfast at The Willard, which
gave us an opportunity to join together and
talk through the most important issues fac-
ing our North Carolina banks. The energy
in the room was palpable and it was obvi-
ous that these bankers were ready to voice
their concerns and frustrations.
From breakfast, we went straight to the
OCC. A panel of representatives of the
OCC, including Senior Deputy Control-
ler and Chief of Staff Paul Nash, Senior
Deputy Comptroller for Midsize and Com-
munity Bank Supervision Toney Bland, and
others fielded questions related to the dis-
cretion the OCC has to tailor regulation to
the spectrum of banks it supervises without
Congressional action, level of interac-
tion with Congress, what to expect in the
Fintech arena, community banking, and
top risk areas the agency is seeing during
examinations. When asked about issues of
concern at the OCC, Mr. Nash focused on
two specific issues – succession planning
and margin compression. Deputy Chief
Counsel Karen Solomon spoke about the
agency’s focus on Fintech and responsible
innovation, stating that the OCC is open
for innovation and is seeking comments
from bankers. When asked about possible
legislation governing Fintech companies,
Ms. Solomon said that legislation might be
premature.
Our group then headed for the American
Bankers Association’s (ABA) headquarters
for a meeting with ABA staff followed by
a meeting with the CFPB. Our bankers
enjoyed a lively discussion with a panel of
representatives from the CFPB, mostly cen-
tered on the new TILA/RESPA Integrated
Disclosures (TRID). Several heads of mort-
gage lending at our member banks gave
specific examples of problems with the new
TRID disclosures, including confusion,
longer time for closing, additional costs to
the customer, higher fees being passed onto
the customer and more. The CFPB noted a
few bumps in the road, but maintained that
13Summer 2016 Carolina Banker
The primary goal of our annual Washington Bank Caucus is to advocate on behalf of the North Carolina banking industry on regulatory relief, credit union taxation, regulatory reform and other banking related issues.
the CFPB’s research shows TRID is work-
ing and is better for the consumer. The
panel members also discussed the CFPB’s
consumer complaint database, noting that
debt collection has overtaken mortgage
servicing for receiving the most com-
plaints. Bankers questioned the panelists
on how the complaint information is vali-
dated and by what other means does the
agency collect data. Our bankers stressed
there is a complete disconnect between
how the agency thinks the disclosures will
work and what actually happens at a clos-
ing. Bankers also noted several potential
unintended consequences from TRID.
After the meeting with the CFPB, we
headed to the FDIC. Chairman Martin
Gruenberg, along with Directors Doreen
Eberly and Mark Pearce of the
FDIC, reported that community
banks are performing better than
ever with large profit and growth
nationwide. Bankers contradicted
that assessment with examples of
the burden that has been placed
on conducting business from the
mountains of regulations. One
banker expressed frustration over
the time and energy expended to
prepare the voluminous pre-examination
materials only for those same materials
being requested again during the on-site
examination. Another banker stated that
the complexity of the rules is stifling small
banks and credit to communities. This
banker explained the hundreds of pages of
guides that cross-reference another hun-
dred page guides that cross-reference the
thousand page statute adds to the complex-
ity and confusion of the all the rules. All
in all, it was safe to say our bankers drove
their point home.
On day two, we began at the Federal
Reserve. Governor Jerome Powells of the
Federal Reserve, whose background is
in investment banking and law, remarks
were well-received by the group. Governor
Powell was optimistic about the United
States economy and bet that the economy
would continue to grow, albeit slowly, over
the next year. Prompted by a question from
one banker, Governor Powell explained the
process and procedure around the Finan-
cial Open Market Committee (FOMC) and
discussed how FOMC makes decisions on
interest rate policy.
I – along with many of our attendees –
ended the long, yet successful day with a
beautiful walk back to The Willard, passing
the White House and other monuments.
Overall, we had a great and productive first
day in Washington.
Congressional Visits
Also on day two of our visit, our bankers
met with almost all of our Congressional
delegation in the Henry Hyde Room of
the Capitol Building. In every meeting,
our attendees told Members stories of how
regulatory red-tape is hindering the flow
capital to North Carolina communities and
their constituents. Most members were
receptive to changes to Dodd-Frank, but
warned that large scale fixes will not likely
occur this year. One Congressman stressed
the importance of educating both sides of
the aisle to ensure a bill’s success and urged
the bankers to show other members of
Congress how these regulations are truly
CB
impacting bank customers and their com-
munities.
Members also discussed the Presidential
election, ISIL, National Security, North
Carolina HB2, House leadership, political
inside baseball and the Puerto Rico debt
crisis, among other issues.
After a long day at the Capitol, we cele-
brated at the Willard with a lovely cocktail
reception and dinner with several Mem-
bers of our Congressional delegation and
their staffers.
Optional Visit to the U.S. Naval Academy
After two full days of work, several bankers
chose to take in some American history on
our optional special tour of the U.S. Naval
Academy in Annapolis. The group, which
consisted of 18 bankers and spouses, spent
a beautiful day exploring the scenic Naval
Academy campus, known as the Yard. With
its combination of early 20th century and
modern buildings, the Naval Academy is a
true blend of history, tradition and state-
of-the-art technology. The group ended
the tour with a classic Maryland crab cake
lunch in downtown Annapolis.
Join Us Next Year
Advocating in Washington by giving
practical examples of problems in the
regulatory process is critical for regulatory
reform. We hope you will join us and add
your voice at next year’s Washington Bank
Caucus on March 28-30, 2017 at The Hay
Adams.
KEENANSUGGS.COM 800.277.1674COLUMBIA | GREENVILLE | RALEIGH | CHARLESTON
BANKING INSURANCE. A SERIOUS DECISION.
Shifting trends, regulatory burden and market uncertainty are
impacting today’s banking industry. This turmoil makes
everyday decisions more and more complicated. Your insurance
program does not need to be one of them.
We are proud that in over 130 banks across the Southeast
(including over 50 in North Carolina) our dedicated team of
financial institution specialists, client service advocates and risk
management experts partner with our clients to serve as their
trusted insurance advisors.
Banking insurance is complicated. KeenanSuggs can help.
At Pentegra Retirement Services, our difference is your advantage.
At Pentegra, we deliver a level of governance that is unmatched in the industry, and the oversight of a
Board of Directors comprised of our clients—real people who use our products and services, and place
their own retirement future in our hands. Work with an expert to ensure your plan retirement plan is
administered according to the highest and most secure standards.
Learn more about our unique retirement plan solutions. Contact us at 800-872-3473, or visit us
at www.pentegra.com
Our Difference: A 70+ year heritage of governance and the oversight of an institutional fiduciary.
Your Advantage: A level of retirement plan accountability and responsibility that’s unmatched.
16 Carolina Banker Summer 2016
Top Left: Congressman Mark Walker, who represents North
Carolina’s Sixth Congressional District, kicked off the 2016
Bank Directors Assembly with a special address. Top Right:
Patti Blenden, president, Financial Solutions, addressed the
crowd on creating a culture of compliance. Right: Attendees
had the opportunity to hear a dynamic and forward-thinking
presentation from Jack Vonder Heide, president, Technology
Briefing Centers, on planning for emerging technologies and
the future of banking. Below Left: Program participants were
also lucky enough to hear from Commissioner Ray Grace,
North Carolina Office of the Commissioner of Banks, on the
challenges and opportunities in our state’s banking industry.
Top Left: Dr. Harry Davis,
NCBA economist, Dean of
the NCBA’s North Carolina
School of Banking and
professor of finance, Ap-
palachian State University,
provided attendees with an
update on the state of the
economy in North Carolina
and nationwide during a
special dinner presentation
on the first day of the Bank
Directors Assembly. Bot-
tom Left: Attendees also
heard from J. Keith Hughey,
founder, J. Keith Hughey
Company. He provided
attendees with a presenta-
tion on the five areas where
most long-term plans fall
short on the final day of the
Bank Directors Assembly.
2016 Bank Directors Assembly
Camp ChallengeHonor Roll
Camp ChallengeHonor Roll
Support Camp ChallengeContact Blaine Wiles at the NCBA today!
(800) 662-7044 or blaine@ncbankers.org
Friends:
Horizons Club: ($600)
Vista Club: ($2,500)
Summit Club: ($5,000)
Legacy Club: (2016 Endowment Contributions)
Pinnacle Club: ($10,000)
blaine@ncbankers.or
CAHEC
BB&T
David Belk Cannon Foundation
Harvey McNairy Foundation
Live Oak Bank
Square 1 Bank
Bank of America
Bank of North Carolina
Blue Cross & Blue Shield North Carolina
First Community Bank
Wells Fargo
Wren Foundation
Coca-Cola
CommunityOne Foundation
Fifth Third Bank
First Citizens
First Bank
First Tennessee Foundation
Piedmont Federal Savings
Asheville Savings Bank
Belmont Federal Savings Bank
blueharbor bank
Carolina Bank
Cornerstone Bank
Dana & Jana Stonestreet
Farmers & Merchants Bank
Fidelity Bank
First Federal Savings Bank
First Carolina Bank
FISERV
Four Oaks Bank
HomeTrust Bank
James & Gina Bigger
KS Bank
LifeStore Bank
Paragon Bank
Peoples Bank
Roxboro Savings Bank
Select Bank
Sound Bank
Southern Bank Foundation
Staff of Carolina Alliance Bank
SunTrust
Tammy Nicholson
Tarboro Savings Bank
TrustAtlantic Bank
United Community Bank
Union Bank
Uwharrie Bank
Woodforest National Bank
Yadkin Bank
Carter Bank & Trust
Black Mountain Savings Bank
Meredith Begley
Regions Bank
Rick Callicutt
William Granberry
Thad & Jan Woodard
18 Carolina Banker Summer 2016
Kevin Boyles is VP/business
development for the retirement products
and services division of Ascenus.
HEALTH SAVINGS ACCOUNTS
A New Magnet For Millennial
Consumers
Today it seems you can hardly avoid
tripping over an article about the state
of American healthcare, health savings
accounts (HSAs), or millennial trends.
The Affordable Care Act (ACA) is still a
political hot button and is certain to move
more firmly into the spotlight given the
upcoming presidential elections. What has
not been evaluated, however, is the impact
of HSAs in the health insurance paradigm
shift the U.S. is currently undergoing.
Consumers’ perspective on healthcare cov-
erage is evolving, and millennials stand to
be affected significantly by the shift. As the
generation looks to expand into the largest
segment of the U.S. workforce, your bank
has the opportunity to capitalize on the
new perspective by including HSAs in your
product line.
Millennial Expansion
Recent data from the Pew Research Cen-
ter shows that in 2015, generation Y, more
commonly known as millennials, caught
up to generation X as the largest genera-
tional segment in the workforce at 53.5
million strong. Considering how many
millennials are still in college or looking
for their first jobs, that number will expand
rapidly in the near term. By 2020, millenni-
als will make up half the workforce and by
2025, they will constitute 75 percent of the
workforce.
The landscape of employer-offered health
insurance is changing just as rapidly, with
large scale migration to high deductible
health plans (HDHPs) by employers of all
sizes, and the advent of defined-contribution
health insurance. According to the Kaiser
Family Foundation, 26 percent of all em-
ployers already offer an HDHP. The larger
the employer, the more likely it is to offer
an HDHP paired with an HSA. When it is
offered, more than half of the employees are
covered under the plan. Coupled with the
ACA mandate for individuals to carry health
insurance or face tax penalties, it’s a recipe
for growth in HSAs beyond the already
exponential evolution since their inception
in 2004.
Millennials will be at the forefront of this
growth, though baby boomers and oth-
ers will have a significant impact. A perfect
storm of legislative, economic and demo-
graphic forces is brewing to fuel unprec-
edented growth in HSAs.
Legislative Factors
The ACA mandates not only that all indi-
viduals carry health insurance, but that all
employers with 50 or more employees offer
health insurance for its employees. HDHPs
are less expensive for small employers to
offer, so it’s reasonable that most businesses
would choose them. Because premiums for
HDHPs also are considerably lower than
most others, individuals buying insurance
on their own (either through healthcare
exchanges like healthcare.gov or from other
sellers of health plans) also are likely to
select the less expensive HDHPs. Because
coverage under an HDHP is a requirement
for having an HSA, the potential is high for
HSA growth among all consumers.
19Summer 2016 Carolina Banker
Economic Factors
For years, larger employers (200-plus em-
ployees) have been steadily migrating to
HDHPs as their sole offering. This picked up
considerable steam during the Great Reces-
sion as a way to cut costs, but also to allow
employers to preserve other benefits, such as
401(k) matching. This trend was not repli-
cated in the smaller employer space, as many
of those employers simply stopped offering
health insurance in the pre-ACA environ-
ment.
HDHP Growth By Type Chart
A new tactic being used by employers is
defined contribution healthcare. In this situ-
ation, the employer does not offer a health
plan to employees, but rather makes a “de-
fined contribution” to each employee for the
employee to purchase her own health insur-
ance. As long as the contributions are prop-
erly designated and reported on Form W-2,
Wage and Tax Statement, as contributions
to the employee’s healthcare, this approach
meets regulatory guidelines and is gaining
steam with employers of all sizes. This will
almost certainly drive more people to the
open market for health insurance plans,
which also will lead to a near-certain in-
crease in the individual adoption of HDHPs,
and HSAs by extension, in the years ahead.
Demographic Factors
Although an estimated 2.3 million millenni-
als ages 19–25 are covered by their parents’
health insurance under the ACA, once they
turn 26, they will no longer be eligible for this
coverage.
As younger generations enter the workforce,
it’s not hard to imagine that the HDHP/HSA
choice will become more widespread. One
key reason may be because the premiums are
lower, allowing employees to redirect into
their HSAs the money that they save paying
the lower premiums.
Millennials’ have a more transient approach
to employment compared to prior genera-
tions. Ninety-one percent of surveyed millen-
nials plan to stay with their current employer
for less than three years, according to the
Future Workplace “Multiple Generations @
Work” survey.
When you draw the lines and connect the
dots—especially the economic and demo-
graphic ones—compelling evidence supports
massive ongoing changes to the healthcare
and health savings systems the U.S. has
known for decades. HSAs are already play-
ing a pivotal role in this shift, poised to figure
even more prominently in the years ahead.
How Does A Bank Play Its Part?
Organizations looking to attract and retain
clients, both within the millennial cohort and
outside of it, should consider ways that they
can help consumers understand how HSAs
help with their healthcare saving and expense
management.
The level of education in the consumer space
on HSAs is dismal. Employers, the internet,
insurers, and even the healthcare exchanges
provide sparse information about HSAs and
how to use them. Banks can provide incred-
ible service by simply offering more informa-
tion on HSAs and their benefits.
Banks with small business relationships and/
or select employer groups can provide addi-
tional value by working directly with employ-
ers or those selling their health insurance
plans to be the HSA provider of choice. Public
healthcare exchanges do not market HSAs,
nor do they offer them, so there is room for
financial organizations to make a difference in
the market.
As HSAs continue to expand rapidly each
year, they eventually will become as common-
place as IRAs, if not more so. The HSA mar-
ket is an underserved marketplace and thus, a
critical area for banks to provide value. CB
What if there were practical and affordable solutions that could allow your bank to effectively navigate risk management and help
you successfully leverage your existing resources?
And what if those solutions were backed up by nearly four decades of experience in the community bank industry?
At PKM, our Risk Advisory Solutions Group offers an innovative suite of services tailored to community banks with limited resources that are
searching for ways to provide superior customer service, while continuing to manage risks throughout their organization.
Contact us today to learn more.
Corporate Governance
Internal Controls
Information Technology
Regulatory Compliance
Regulatory Support
Credit Review
Chances are, we’ll spot the risks,
before you even know they are
there.
235 Peachtree Street NE | Suite 1800 | Atlanta, GA 30303 | 404.588.4200
Risk Advisory Solutions
22 Carolina Banker Summer 2016
AN UPDATE ON NORTH CAROLINA YOUNG BANKERS FROM CHAIRMAN DAVID ALLEN
David Allen is senior vice president at Bank
of North Carolina.
In December of 2015, 12 ambitious bankers
ranging in age between 24 and 44 met with
the North Carolina Bankers Association
(NCBA) and began laying the groundwork
for what would eventually become the
North Carolina Young Bankers (NCYB).
Over the next several months the inaugural
advisory board would define the vision and
mission of the NCYB and what it means
to be a member of the organization. The
NCYB is targeting the next generation
of industry leaders that will navigate the
new world of enhanced regulation, rapidly
changing technology, and an overall para-
digm shift in how society perceives banks.
The vision is simple – to be the premier
organization that develops and engages
emerging bank leaders while strengthen-
ing the communities it serves. The NCYB
will focus on three primary goals to achieve
its vision: (1) promote financial literacy
for North Carolina’s youth; (2) encourage
awareness and active engagement of young
professionals in the banking industry; and
(3) provide education and foster the profes-
sional development of its members.
To accomplish these goals, the NCYB will
engage its members through regional and
statewide events, a monthly newsletter and
volunteer opportunities. The NCYB is plan-
ning multiple events throughout the year
focused on leadership, education and net-
working, designed to strengthen the skill
set of each participant and promote career
engagement. The NCYB will keep members
informed of the relevant issues affecting the
industry and opportunities for advocacy.
Lastly, the NCYB will provide opportuni-
ties for volunteerism and resources that
support financial literacy efforts in the local
communities. Successfully achieving the
mission of the NCYB will help restore the
image of banking, improve the financial
health of the community and engage the
millennial generation in the workforce.
The formation of the NCYB comes at an
opportunistic time in the banking indus-
try. The industry is transforming around
us and with this change brings new chal-
lenges in how banks will manage a complex
regulatory environment, attract and retain
employees and continue to serve their
communities. The mission of the NCYB
will address these challenges and mobilize
the current young professionals towards a
common goal of strengthening the indus-
try. The NCYB will be a driving force in
improving the overall image of banking and
reestablishing banks as trusted partners in
the community.
Prior to 2008, the perception of banking
was positive; banks were pillars of society
and respected for their contributions to the
community. The 2008 Great Recession ush-
ered in a new perception of banking. The
indiscretions of a few tarnished the prevail-
ing image that had defined the industry
for decades. Frequently used terms in the
media now include mistrust, predatory
lending and greed. How quickly forgot-
ten are the benefits that banks provide to
their communities: helping individuals
start their own business and buy their first
home; serving as trusted financial partners,
supporting philanthropic organizations
and providing jobs. Banks of all sizes were
blamed for the financial downturn and have
been attacked for placing profit over cus-
tomers. The reality is that banks have con-
23Summer 2016 Carolina Banker
tinued to serve the needs of the community
and are adapting to changing consumer
demands in the banking experience.
The NCYB will help restore the image of
banking through our mission of improv-
ing financial literacy in the youth of North
Carolina. Banks have an obligation to pro-
mote the financial welfare of their commu-
nities, not only through the products and
services they provide, but also with educa-
tional resources and volunteerism of their
employees. Promoting financial literacy will
strengthen our communities and help lay
the foundation of long-term financial suc-
cess for individuals.
The NCYB will encourage a collaborative
effort among all banks in improving finan-
cial education. Financial literacy topics
range from budgeting, saving, managing
credit worthiness, creating financial goals
to also understanding the role of banks in
the community and the broader economy.
The NCYB will develop an education cur-
riculum aimed at elementary through high
school students across the state. We en-
courage our members to partner with other
local organizations and create volunteer
opportunities in their respective commu-
nities to further this goal. The long-term
prosperity of the community is dependent
upon laying the foundation of financial
literacy in our youth. Stronger communi-
ties equal stronger banks. In turn, banks
will have greater resources to reinvest in the
communities and reestablish the positive
relationship between banks and the mar-
kets they serve.
The efforts of the NCYB will also help
promote banking as an attractive career
option for aspiring young professionals. A
recent USA Today article states that increas-
ingly fewer millennials are pursuing careers
in banking and finance. Several factors
contributing to this trend are negative
sentiment that stemmed from the financial
crisis and an image that banking is high-
stress with demanding hours.1 The industry
must change this perception of banking
and reestablish trust with the millennial
generation. Banking should be viewed as
an industry where young professionals can
have a long-term, rewarding career with
diverse opportunities and have the ability
to take an active role in serving the needs of
local communities.
The millennials are now the largest genera-
tion in the workforce surpassing the baby
boomers and generation X. Numerous
articles have been written seeking to un-
derstand how millennials think and what
they value compared to prior generations.
What is clear is that emerging leaders want
to explore new challenges, be involved in
helping their communities and take on dif-
ferent responsibilities. The banking indus-
try can meet this demand. To do so, the
industry must adapt to a changing ideology
and embrace an evolving set of values. This
does not mean that banking should change
its core values of stability, soundness and
focus on customer service, but rather the
industry should incorporate a new set of
beliefs that are representative of a younger
generation. Attracting the best and bright-
est employees will be critical for the indus-
try to adapt to changing market demands
and maintain banks as a vital member of
the community.
It is our hope that involvement in the
NCYB will promote greater engagement of
young bankers not only in their individual
careers but also the industry as a whole.
Young bankers will have opportunities to
learn about different areas of banking from
lending to technology, operations to human
resources. Young Bankers will have access
to state and federal elected representatives
and champion the advocacy efforts of the
NCBA. The NCYB will be inclusive of all
job titles and encourage active participation
1 USA Today, June 26, 2015
CB
across individual banks, regions and the
state. All bank employees can have a voice
in developing their individual skill sets and
positioning themselves as the next layer of
bank leadership. What is not specifically
stated in our mission is that we must rede-
fine what it means to be a banker and have
a career in banking. Banks play an impor-
tant role in the prosperity of the country
and each individual working for a bank
has the opportunity to make a difference in
their community. The NCYB will provide
the pathway that leads young bankers to realize their potential. Engagement equates to ownership and ownership will empower employees to take an active role in the long term success of banking. This is an exciting time in the banking industry and NCYB is poised to lead the new emerging leaders of our future.
CPAs & Advisors with Your Growth in MindAt Cherry Bekaert LLP, we’ve designed our practice with one thing in
mind: cultivating client growth. As a nationally recognized, growth-oriented
firm, we have the resources to take your business as far as you want to
go. Through our Financial Services Group, we proactively and cost-
effectively deliver value-added solutions designed to help our financial
institution clients reach their growth potential.
Your Guide Forward
Atlanta | Charlotte | Miami | Raleigh-Durham
Richmond | Tampa | Washington D.C.
G. Todd Batchelor, CPAManaging PartnerFinancial Services Industry Grouptbatchelor@cbh.com919.825.4264
Paul Fedorkowicz, CPAPartnerFinancial Services Industry Grouppfedorkowicz@cbh.com919.782.1040
cbh.com
Find out how we can guide your bank forward
Get Started! Email: alexis.gamewell@protectmybank.comPhone: (615) 669-5056Web: www.protectmybank.com
2. GoPhishing
1. EmployeeTraining
3. SeeResults
TM
Phishing and Security Awareness Training Tool:
EZXploit - Automated Human Pentesting
On-demand Security Awareness Training
Vulnerable Browser Plugin Detection
Unlimited Phishing Security Tests
SBS Help Desk SupportAnd more!
Go Phishingwith SBS and KnowBe4
ggon
26 Carolina Banker Summer 2016
CICCAR
David Bennett is the executive vice president of Com-munity Investment Corporation of the
Carolinas (CICCAR), a wholly-owned
subsidiary of the North Carolina
Bankers Association.
THE LIHTC PROGRAM AT 30 - PAST RESULTS, FUTURE NEEDSThe federal Low Income Housing Tax
Credit (LIHTC) program was created in
1986 as part of the comprehensive budget-
ing and tax reform efforts of Congress and
the Reagan administration. In recognition
of the 30th anniversary of this landmark
legislation, CohnReznick LLP, a national
accounting firm with a significant prac-
tice in the areas of affordable housing and
low income housing tax credits, recently
issued a report entitled “The Low Income
Housing Tax Credit at Year 30: Recent
Investment Performance (2013-2014).” This
report is the fourth in a series issued by
CohnReznick, using property performance
data for more than 20,000 affordable hous-
ing communities located across the
country.
A Look at Performance Results
Based upon an analysis of the national
performance data, CohnReznick found
that the performance history of affordable
LIHTC housing is strong, particularly dur-
ing the years following the Great Recession.
For example, the median physical occupan-
cy rate for the sample improved from 96.4
percent in 2008 to 97.5 percent at the end
of 2014. During the same period, the me-
dian physical occupancy rate for properties
located in North Carolina was higher than
the national rate, rising from 97 percent
in 2008 to a peak of 97.9 percent in 2012,
before settling at 97.3 percent in 2014.
The report also highlights strengthening
economic occupancy rates. Unlike physical
occupancy, which reflects the number of
units occupied by tenants, economic oc-
cupancy measures the percentage of gross
potential rent that is actually collected. Even
with a high physical occupancy rate, there
can be a lower economic occupancy rate due
to rent concessions, turnover lag between
tenants or uncollected rent. For affordable
multifamily units, the CohnReznick report
identified a median economic occupancy
rate of 96.6 percent in 2014, nearly identi-
cal to the median physical occupancy rate
of 97.5 percent. Again, the results for North
Carolina were consistent with this average.
Finally, CohnReznick analyzed median Debt
Service Coverage Ratios (DSCRs) for these
properties. From 2008 to 2014, the median
DCR improved from 1.15x to 1.33x, with a
slow and steady increase of 2-4 basis points
per year.
During the same timeframe, CICCAR’s
performance results were quite comparable
to CohnReznick’s findings, with a median
DSCR climbing from 1.14x in 2008 to 1.24x
in 2014, and a median physical occupancy
rate improvement from 95 percent to 98
percent.
Median DSCR
Median Physical Occupancy
2008 2014 2008 2014CICCAR Portfolio 1.14x 1.24x 95 percent 98 percentRegional Average 1.15x 1.31x 96 percent 97 percentNational Average 1.15x 1.33x 96 percent 98 percent
27Summer 2016 Carolina Banker
Even as the real estate market for apartments has boomed over the past 18-24 months, few developers are willing or able to create a new supply of affordable units. Without some degree of financial incentive, high development costs simply make this a difficult - if not impossible task.
Based upon year-end numbers for 2015,
CICCAR’s portfolio performance has con-
tinued to strengthen, with a median DSCR
that now stands at 1.35x and a continued
median physical occupancy rate of 98 per-
cent.
Understanding the Need
There is no shortage of praise for the LIHTC
program, from both sides of the political
aisle. Its unique approach to using public re-
sources to attract private sector invest-
ment and ownership in the affordable
housing sector is widely recognized as
the most effective housing program to
come out of Washington, D.C. Private
developers and tax credit investors such
as banks have become quite adept at
creating an attractive supply of hous-
ing units for low- to moderate-income
households. So, what is driving demand
for the units, and the resulting perfor-
mance improvement?
Much of this trend can be attributed to
two factors: an overall decline in the na-
tional rate of homeownership and stagnant
income levels. In 2004, the U.S. homeowner-
ship rate peaked at 69 percent, and has been
declining steadily ever since then. From that
31 percent level in 2004, the percentage of
renter households has increased steadily to
36 percent at the end of 2014.
With fewer households electing to purchase
a home, the increased demand for rental
units in general has resulted in upward pres-
sure on rents. As rents for market-rate prop-
erties rise, more households that are not tra-
ditionally considered as “low income” face
a household cost burden, defined as paying
more than 30 percent of income for housing
expenses. The National Low Income Hous-
ing Coalition (NLIHC) reports that in 2014,
49 percent of all renter households were cost
burdened, with 26 percent being considered
“severely cost burdened” (i.e., spending
more than 50 percent of income on housing
expenses).
When higher-income cost-burdened house-
holds compete for units with lower rents,
fewer units remain available to households
at the lowest end of the income scale –
namely, the households traditionally served
by LIHTC properties. This demand for af-
fordable units is then manifested in the high
occupancy and debt coverage ratios noted
above.
Even as the real estate market for apart-
ments has boomed over the past 18-24
months, few developers are willing or able
to create a new supply of affordable units.
Without some degree of financial incentive,
high development costs simply make this a
difficult – if not impossible – task.
Resources such as the LIHTC are limited,
and applications for credits continue to out-
pace allocations by a ratio of 3:1 or more.
Meeting the Demand
Fortunately, there have been a number of
responses – both actual and proposed –
that are designed to address the need for
affordable housing. In April 2016, the US
Department of Housing and Urban Devel-
opment announced that it will be allocat-
ing nearly $174 million in funds from the
National Housing Trust Fund to states over
the coming months. This program, which is
28 Carolina Banker Summer 2016
CB
funded by contributions from Fannie Mae
and Freddie Mac, will complement existing
local, state and federal programs (such as
the LIHTC program) by providing funding
through the states to support the creation
and preservation of affordable housing.
In North Carolina, affordable housing
advocates have proposed an expansion
of the Workforce Housing Loan Program
(WHLP), created by the General
Assembly to replace the state’s housing tax
credit. Originally established at a level of
$10 million per year to help finance af-
fordable housing in rural areas, the WHLP
allocation increased to $12.5 million in the
2015/2016 budget cycle, and is proposed
for an increase to $15 million in 2016/2017.
Finally, Senator Maria Cantwell (D – WA)
recently proposed a 50 percent expansion
of the competitive tax credit allocation
available via the LIHTC program. Her
proposal came in response to a petition of
more than 1,300 affordable housing
practitioners and stakeholders. While the
appetite for tax reform in Washington is
mixed, it is possible that the LIHTC
program’s track record of success may pave
the way for more resources to help meet
this critical need. • Stay fully compliant with all 8 points of the Interagency
Guidance to help you service more real estate loans
in-house.
• Establish new non-interest fee income.
• Improve your bank’s efficiency ratio.
• Quickly and easily determine FEMA flood zones
to meet Biggert-Waters requirements and bypass
unnecessary fines.
• Navigate changes made through the Dodd-Frank Act
while saving time and money. We’re all about putting
the power back in your teams’ hands.
©2016 CRS, Courthouse Retrieval Systems. All Rights Reserved.
The Banker Suite is property of CRS Data, Inc.
Schedule a Presentation Today.Alwyn Staley | abstaley@crsdata.com | 800.374.7488 ext. 150 | crsdata.com/banking
With the CRS Data Banker Suite, you can bring
evaluations in-house and create a new revenue stream
in the process.
The Banker Suite
Looking for New Non-Interest Fee Income?
30 Carolina Banker Summer 2016
A PRIMER TO UNDERSTANDING GOLDEN PARACHUTE PAYMENTS IN A CHANGE IN CONTROL
Thomas P. Hutton is a partner with Luse
Gorman, PC.
The best time to ensure various documents
work together is when they are drafted. How-
ever, as mentioned, many of these documents
are drafted at different times (and by different
draftsmen) and on a stand-alone basis with-
out considering how they interact with other
arrangements. The next best time to ensure
the documents work as intended is through
periodic reviews. Periodic reviews are espe-
cially important since many factors occur
over time that impact the intended benefits.
For example, the inclusion of a new element
of the overall executive compensation pack-
age, such as equity grants, the increase in base
compensation over time, or a change in the
terms of an agreement may affect a number
of arrangements. Periodic reviews should in-
clude running specific numeric examples. In
other words, the best way to understand how
arrangements work together is to conduct a
“real life” illustration on a change in control
with realistic assumptions.
Many executive compensation arrangements
include provisions addressing what happens
when payments made to an executive in con-
nection with or following a change in control
exceed the executive’s golden parachute limi-
tations under Section 280G of the Internal
Revenue Code (“Section 280G”). Without
coordination among these arrangements,
the total benefits received by the executive
following a change in control may be dimin-
ished. Section 280G provides that “parachute
payments” that equal or exceed three times
the executive’s average annual taxable income
from the employer for the five preceding
taxable years are considered “excess para-
chute” payments. The term “parachute pay-
ment” generally includes any compensation
received on account of the change in con-
trol, such as severance payments, continued
Completing a merger or acquisition is one
of the most significant events in the life of a
corporation, as well as its management. Ac-
cordingly, it is important that the compensa-
tion arrangements covering executive officers
are designed in a way to protect the execu-
tive from a premature termination of em-
ployment, protect the employer by provid-
ing incentives for executives to stay through
the completion of the transaction and meet
the expectations of each party. The typical
executive compensation arrangements that
come into play in a change in control include
employment agreements, change in control
agreements, deferred compensation plans
and equity grants (stock options, restricted
stock).
Institutions and executives expend signifi-
cant time designing executive compensation
arrangements. Often, the process involves
outside advisors and the various arrange-
ments are designed or modified at different
times by different advisors. For example, the
institution and executive may enter into an
employment agreement when the executive
is hired and later enter into a deferred com-
pensation arrangement to provide the execu-
tive with supplemental retirement benefits.
Many deferred compensation arrangements
provide for an enhanced and/or accelerated
benefit upon a change in control. However,
failure to coordinate the provisions of the
employment and deferred compensation
agreements may result in the executive’s total
benefits not equaling the expected benefits
under each agreement individually. Once the
process of negotiating the merger has begun,
it is generally too late to fix the uncoordinat-
ed provisions, such as common definitions
and golden parachute limitations.
31Summer 2016 Carolina Banker
health benefits, accelerated deferred compensation
benefits and accelerated vesting of equity awards. If
the total payments constitute excess parachute pay-
ments, the executive will be subject to a 20 percent
excise tax on all parachute payments over the aver-
age, not over three times the average, of the execu-
tive’s taxable income for the five preceding years.
For example, assume Executive A’s taxable income
received from Company C for the preceding five
years equals $750,000. His Section 280G limit equals
$450,000 (three times the $150,000 average). Execu-
tive A’s employment contract provides that if his em-
ployment terminates in connection with a change
in control, he receives a severance benefit equal to
2.99 times his current base salary. The agreement
also provides that if the total parachute payments to
Executive A exceed the Section 280G limit, the pay-
ments will be cut-back to $1.00 less than the limit.
Assuming Executive A’s salary in 2016 is $150,000,
the severance benefit equals $448,500; which is be-
low his Section 280G limit. After Executive A en-
tered into the employment agreement, he enters
into a salary continuation agreement (“SCA”) pro-
viding him with a lump sum benefit of $500,000 if
he retires after age 65. If he leaves employment after
age 60 and before age 65, the benefit is $300,000.
However, if he terminates employment in connec-
tion with a change in control, he will receive the
entire $500,000, regardless of his age when the
change in control occurs. If Executive A had retired
(without a change in control) in 2016 at age 61, he
would have received $300,000. However, because
his termination was in connection with a change in
control, he receives the full $500,000. The addition-
al $200,000 is a parachute payment under Section
280G. His parachute payments now equal $648,500
($448,500 severance under the employment agree-
ment and $200,000 under the SCA). Since the pay-
ments exceed his Section 280G limit of $450,000,
his benefits must be reduced to $449,999. This ef-
fectively eliminates the change in control benefit
under the SCA. So, while the parties intended for
Executive A to receive the full benefit, the lack of
coordination among the agreements diminished the
benefits payable to him upon the change in control.
Executive compensation arrangements deal with
Section 280G in one of several ways, including:
Cut-Back: cut-back payments to just below the
Section 280G limit.
Modified Cut-Back: provide the executive with
either the benefits as cut-back or the full benefits,
whichever provides the greatest after-tax benefit
(taking into account the excise tax).
Gross-Up: the employer will reimburse the execu-
tive for the excise tax due on the payments and for
all other taxes resulting from the payment of the
excise tax. This approach may become very expen-
sive and has fallen out of favor with shareholders.
Silence: the agreements may not address Section
280G at all, thereby allowing the parties to deter-
mine how to deal with the payments at the time of
the change in control. While this approach allows
for some flexibility, it does provide a level of uncer-
tainty for the parties.
Numerous issues can arise when various agree-
ments treat parachute payments differently. For
example, a deferred compensation arrangement
may include a cut-back provision while an em-
ployment agreement provides for a modified
cut-back. At times this may be acceptable if the
provision only deals with the payments made
under the specific agreement. However, when
the provision in one arrangement addresses all
parachute payments, it can create significant con-
fusion and lead to unintended consequences.
The terms of various executive compensation ar-
rangements, especially when considered together,
can be very confusing and overwhelming. The po-
tential impact of Section 280G further complicates
matters. Not understanding how various arrange-
ments work, either individually and/or together,
and how Section 280G impacts the benefits, often
results in unintended negative consequences to
executives. It is important to take care when draft-
ing or modifying these arrangements and to peri-
odically review these arrangements and run “what
if ” scenarios with realistic numeric illustrations. It
is also important to understand how the terms of
various arrangements will be perceived by outside
parties, such as shareholders or shareholder advi-
sory services. Spending the time to do so well in
advance of a change in control, in fact, well in ad-
vance of even considering a change in control, may
eliminate a great deal of anxiety and confusion.CB
32 Carolina Banker Summer 2016
2016 Washington Bank CaucusTop Left: Attendees of the 2016 Washington Bank Caucus kicked
off their trip with a briefing from the OCC. Our delegates heard
from Paul Nash (pictured), senior deputy comptroller and chief
of staff; Toney Bland, senior deputy comptroller for midsize and
community bank supervision; Karen Solomon, deputy chief
counsel; and Kevin Greenfield, director for bank information
technology. Below Left: Following a meeting with the ABA and
CFPB, bankers had a briefing with the FDIC, where they heard
from Martin Gruenberg, chairman, FDIC. Below Right: Bank-
ers began day two of Washington Bank Caucus with the Federal
Reserve, where they spoke with and heard from Jerome Powell
(pictured), governor, Federal Reserve.
Right: Representatives from North State Bank and North State
Bank Mortgage paused for a brief photo prior to the briefing
with the Federal Reserve. Below Left: Following their visit with
the Federal Reserve, our bankers headed to lunch at Old Ebbitt
Grill, a historic oyster bar and grill near the White House. As at-
tendees enjoyed their lunch they heard an update on the ABA, its
activities and its plans for the future from Rob Nichols, president
& CEO, ABA. Below Right: After lunch, our delegates went to
Capitol Hill for a full afternoon of meetings. The first of which
was with U.S. Senator Richard Burr.
33Summer 2016 Carolina Banker
The Willard InterContinentalWashington, D.C.
Above Left: Attendees visited with Congressman Patrick McHenry, who is serving his sixth term in the U.S. Con-
gress where he represents the citizens of North Carolina’s 10th district. In the 114th Congress, McHenry serves as
Chief Deputy Whip as well as vice chairman of the House Financial Services Committee. Above Top: Our bankers
also heard from and spoke to Congressman Richard Hudson. Hudson is serving his second term in Congress repre-
senting North Carolina’s 8th Congressional district. Above Bottom: Attendees also had the opportunity to visit with
Congressman Mark Walker, representing North Carolina’s 6th Congressional District in his first term in Congress.
Below Left: Our delegates also heard from Congressman Robert Pittenger, who is serving his second term in Con-
gress representing the citizens of North Carolina’s 9th Congressional District. Pittenger is a member of the House
Financial Services Committee, and sits on the Financial Institutions and Consumer Credit Subcommittee as well as
the Monetary Policy and Trade Subcommittee.
Above Middle: Congressman Mark Meadows, who has been the U.S. representative for North Carolina’s 11th Congressional
District since January 2013, spoke with and answered questions from our engaged attendees. Meadows serves on the House
Oversight and Government Reform Committee where he chairs the Subcommitee on Government Operations. Above Right:
To conclude their visit to Capitol Hill, our bankers meet with Senator Thom Tillis and discussed the political climate in
Washginton.
34 Carolina Banker Summer 2016
&QA with Congresswoman
Virginia Foxx
Congresswoman Foxx repre-sents North Carolina’s 5th District in the United States
House of Representatives. She serves on the House Education and the Workforce Committee and is Chairwoman of the Subcommittee on Higher Education and Work-force Training. She also serves on the powerful House Committee on Rules. She was elected by her peers to serve as Secretary of the House Republican Conference. Congresswoman Foxx, who holds the distinction of being the first member of the 2004 congressio-nal freshman class to pass a sub-stantive piece of legislation from the House of Representatives, is the recipient of numerous hon-ors and recognitions, including the U.S. Chamber of Commerce’s Spirit of Enterprise award, the National Federation of Indepen-dent Business’ Guardian of Small Business award and the National Association of Manufacturer’s Award for Legislative Excellence. Before serving on Capitol Hill, Foxx spent 10 years in the North Carolina State Senate. She began her career in the field of higher education, which included serving as a sociology instructor at Ap-palachian State University (ASU) and holding several administrative positions at ASU, including As-sistant Dean of the General Col-lege. She also served as President of Mayland Community College. Congresswoman Foxx is a gradu-
ate of the University of North Carolina at Chapel Hill, where she earned a bachelor’s degree in English and a Master of Arts in College Teaching in Sociology. She also holds a Doctor of Educa-tion degree from the University of North Carolina at Greensboro. Congresswoman Foxx is mar-ried to Tom Foxx. Before her congressional service, the couple owned a nursery and landscap-ing business in North Carolina. She enjoys reading, gardening, and most of all, being a grand-mother to two.
Q: Why did you decide to become involved in politics?
A: In the 1970s, I was a member of the League of Women Voters. Through the League, I attended school board meetings in my county as a public observer to en-courage accountability of elect-ed officials. I went to countless meetings, many times as the only person representing the general public.
During one meeting of an all-male school board, a local report-er leaned over and said, “These guys are incompetent. Why don’t you run for the school board.”
My instinctive response was, “I’m not qualified,” and I think many women can fall prey to this atti-tude of self-disqualification and underestimate their abilities.
The next year I ran for the school board. I lost the first race and learned a valuable lesson: it is possible to lose and live with dignity. I won the next election for the school board and later ran for the state Senate and then suc-cessfully ran for Congress in 2004.
Q: How have you stayed grounded and focused on North Carolina’s 5th Dis-trict?
A: It is important to use many differ-ent ways to gather information from constituents on their concerns. There are ample opportunities for constitu-ents to tell me what they think on any issue: in person, in letters, over e-mail, on the phone, etc. I also return home to the district every weekend and, in addition to the events I attend, I do all the same things that you do - at-tend church, pump my gas, go to the grocery store, work in my yard, etc. Through my many interactions with
35Summer 2016 Carolina Banker
constituents, I take their sugges-tions back to my colleagues as I have always done and will con-tinue to do.
My mission is to have the most responsive Congressional office in the nation. I read and answer all of my own mail. The staff and I work very hard to be accessible and to respond promptly to con-cerns. We are here to help and welcome the opportunity to work with constituents who need assis-tance.
Q: How does the banking indus-try impact North Carolina’s 5th District?
A: While it isn’t the focus of life, money is an element of nearly every facet of it. As the industry entrusted with the care of that necessary resource, banks are a fundamental part of our commu-nities and impact them in count-less ways. Local families rely on access to capital, safe stewardship of their savings and the conve-nience of modern banking tech-nologies to have the financial cer-tainty necessary to improve their quality of life. Every day I hear from businesses that are looking for capital to expand their busi-nesses; they also use the incred-ible technology available to pro-cess global payments in a variety of ways, none of which would be possible without a strong banking industry.
North Carolinians feel the im-pact of financial institutions early in life when they open their first checking or savings account, and they progress to building a credit record that enables them to ob-tain an affordable mortgage and take the steps necessary to ensure
their family is financially stable. I have vivid memories of going with my father to the local bank in Avery County when I was a teenager to buy our first home. That early interaction was so en-couraging and it has stayed with me as I started a family, bought a home and became a small busi-ness owner.
Q: What do you consider to be among the largest challenges to growing our North Carolina econ-omy?
A: Our nation grew from nothing into the strongest economy in the world because Americans were free to compete with the market picking winners and losers, not politicians. Unfortunately, gov-ernment has continued to expand its control over businesses. There are virtually no actions business people can take without need-ing the government’s permission or a stack of paper to file. A dis-couraging example of this heavy-handed action from the federal government is the hundreds of regulations resulting from Dodd-Frank, which are significantly impacting access to desperately needed capital and driving com-pliance costs high enough to re-sult in the closure of one commu-nity financial institution a day in America. My colleagues and I are working in the House to rollback Dodd-Frank’s overreach, and I also continue to push the Senate to consider my legislation, the Unfunded Mandates Information and Transparency Act, passed by the House, to increase transpar-ency about the costs of unfunded federal mandates and hold the federal government accountable for considering those costs before passing them on to local govern-ments and the private sector.
It’s also clear that the federal government’s healthcare and tax policies are having a signifi-cant effect on businesses’ abili-ties to expand as well as provide their employees with quality wages and benefits. Top-down mandates from Washington have a track record of failing and Obamacare is no different. Constituents inform me daily of their increased premium costs and dwindling choices in the marketplace. The United States also has the highest corporate tax rate among advanced econo-mies and the unwillingness of some to consider tax reform for individuals and businesses of all sizes is driving investment over-seas and depressing the growth of our economy.
Finally, Washington owes the American people a responsible budget that reins in wasteful federal overspending and guar-antees accountability for the use of taxpayer dollars. Much of the economic turmoil that has gripped this nation is the result of the federal government spending beyond its means. Our ballooning national debt threat-ens economic stability and jeop-ardizes the American dream for their families.
Q: How has owning your own business helped you understand certain issues in Washington, D.C.?
A: As a former small business owner, I know firsthand how the government can make it more difficult for a business to be successful. I recognize the true costs of overregulation, such as lost productivity, increased ex-penses and new financial and le-gal liabilities, which many poli-cymakers often forget about.
Q: You are known as a vocal pro-ponent of government account-ability. Why do you feel this is so important?
A: Accountability, transparency and appropriate public scrutiny are necessary for government to function well. I also recognize that the federal government is funded by the money of hard-working American taxpayers. They deserve to know how the government is spending their tax dollars, and they deserve to have their money spent wisely.
Q: Now for the most important question. You are well known for your boundless energy level. How do you maintain that level of energy day in-and-day-out?
A: I remember why I was elected to serve in the first place and trust in God. God gives me strength to face the challenges of the day. CB
Make YourShareholders
HAPPY!Use our C&I Program toinstantly add loan growth
and diversification.
Contact your representative today oremail to CI@centerstatebank.com
5960 Fairview Road, Suite 400 Charlotte, North Carolina 28210704.496.2612 www.csbcor re spondent . com
Use Decision Dynamics comprehensive title solution to maintain your entire title portfolio.
Authorized in all ELT states Superior workflow interface
Real-time VIN inquiries User level customization
37Summer 2016 Carolina Banker
Emily Bogan is the director of consulting at Sageworks.
WHY YOUR BANK’S DATA MAY BE INADEQUATE FOR CECL
Got data? This is one of the many ques-
tions financial institutions will face once
the Financial Accounting Standards Board
(FASB) finalizes its guidance on the cur-
rent expected credit loss model, known
as CECL. The CECL model is a change
in guidance for the allowance for loan
and lease losses (ALLL), shifting from an
incurred credit loss model to one based on
expected credit losses. It will include re-
quirements for forward-looking estimates,
a longer loss horizon and removal of the
“probable loss” threshold.
After several delays, final CECL guidance
is expected to be released in mid-2016.
One sign that this timeline remains on
track is FASB’s formation of a CECL Tran-
sition Resource Group (TRG) to “solicit,
analyze and discuss implementation is-
sues that could arise when organizations
implement the upcoming credit loss stan-
dard,” according to a FASB news release.
Announced at the end of March 2016,
members of the TRG represent accounting
firms, regulators, banks and credit unions.
In the quest to understand CECL and
how to properly prepare for the transition,
one theme has continued to rise to the
top: data. Based on comparisons of what
data is currently needed for calculating
the ALLL versus what we anticipate will
be needed under CECL, banks may need
to gather, archive and store much larger
amounts of data.
While many banks may believe they are
already collecting sufficient data needed
for a smooth transition, industry experts
warn that data practices may actually fall
short of what will be needed. The specific
data needs will not be known until the final
CECL proposal is released, but in general,
more data will be better, and loan-level data
over time is key.
For example, under the current historical
loss rate methodology, common aggregate
data elements needed for the ALLL calcula-
tion include charge-offs, recoveries, pool
segmentation and balances. Under CECL,
it is expected that several new loan-level
data elements will be needed, including risk
rating, loan duration, loan balance, charge-
offs and recoveries and segmentation.
Banks will have time before having to
implement CECL, but they should begin
reviewing data collection practices and
strategies now if they expect to properly
prepare for changes. In fact, waiting un-
til after guidance is released may result
in a missed opportunity. During a recent
38 Carolina Banker Summer 2016
Sageworks webinar, more than 450 bankers
were asked to describe their data adequacy.
Only 36 percent of respondents felt their
data archives were sufficient to prepare for
CECL.
In working with banks across the coun-
try and assessing their data adequacy for
CECL, here are four weaknesses I com-
monly see:
1. The data is incomplete. Calculat-
ing the ALLL under CECL could
mean estimating expected losses for
the life of a loan. This implies that
banks may need to review historical
data on losses for many loan types
over many periods. For a bank cur-
rently aggregating charge-offs and
recoveries quarterly, incorporating
loan-level detail will substantially
increase the loss data required.
While many community banks lack
the systems and resources needed
to capture this historical data, ex-
perts recommend taking steps now
to gather it, whether through hiring
additional staff, improving internal
systems or purchasing software.
2. The data is unreliable. Accurate
data is the central building block
of a defensible ALLL calcula-
tion, therefore, accurate historical
loan-level detail will help prevent
future subjectivity. However, pro-
cesses and policies by which data is
gathered can vary from person to
person, department to department
and institution to institution. As a
result, the bank is subject to data
inaccuracy and inconsistency.
3. The data is not easily accessible.
Even now, gathering data needed
to calculate the ALLL is one of the
biggest challenges banks face in
their reserve process. Many must
gather data from disconnected
sources or spreadsheets, and doing
so can be labor-intensive and time
consuming. Under CECL, banks
will need access to more historical
information – all at the loan level.
Banks storing such information in
PDF form or across systems can be
caught by surprise if they do not
get the data into a usable, accessible
format. For example, many banks
may think their core system is suf-
ficiently capturing and storing loan-
level data. Unfortunately, usable
core data is often discontinued after
13 months – if not sooner. Storing
core archives in a data warehouse or
considering an automated solution
to capture and store the data are
two ways to avoid this challenge.
4. Data governance and accountability
is lacking. If separate departments
develop their own roadmaps for
identifying and gathering data, the
institution can end up with a mish-
mash of information that can mean
different things to different people.
Even subtle differences, such as
how loan segmentations are labeled
or how figures may be truncated,
could cause significant hurdles
when it comes time to accurately
use the data. It is important to have
clear lines of oversight for defining
the necessary fields, gathering the
data and ensuring data integrity.
When it comes to your bank’s data, there
are several important characteristics to
keep in mind, including:
Transparency – Understand how
and where data is stored, and have
a clear process to minimize confu-
sion.
Granularity – With the increase in
data required, make sure the data-
39Summer 2016 Carolina Banker
CB
base/system can handle increased
volume and account for the entire
life of a loan.
Accessibility – Ensure data is
readily available in usable, report-
able formats. Storing information
across disparate systems or in
unusable formats (PDFs, text files,
etc.) can create headaches down
the road.
Holistic – Data should be stored
for the whole portfolio, not just for
losses.
Frequency – Ensure data is up-
dated frequently to accommo-
date cross-functional needs. For
example, process it daily, archive
it monthly, or as frequently as
needed to meet the bank’s needs.
Security – The database must be
secure and backed up frequently to
minimize risk.
While the recommendation is to gather
and store as much loan-level detail as
possible, banks must consider the impact
certain loss methodologies will have on
the specific data elements needed. Indus-
try experts, including regulatory agencies,
have highlighted that CECL may result in
community banks utilizing more ad-
vanced loss methodologies, like migration
analysis, vintage analysis and probability
of default/loss given default (PD/LGD).
For example, vintage analysis tracks ho-
mogeneous loans by origination period
and measures losses accumulated on each
vintage. Selecting this methodology will
require data fields such as individual loan
origination dates and individual loan origi-
nation amounts. Compared to other meth-
odologies, vintage analysis isn’t as reliant on
individual loan risk classification and the
migration of loans between classifications.
With CECL on the horizon, it is recom-
mended that banks begin preparing now
rather than waiting for guidance to be re-
leased or until the effective dates. Here are
several steps to help you prepare today:
• Review whether your data sources
are complete, available, reliable and
properly governed.
• Minimize risk in loans you’re un-
derwriting today.
• Create a roadmap to your CECL ef-
fective date and include on that map
the formation of a CECL commit-
tee.
• Review and strengthen risk rating
procedures.
• Start cross-departmental collabora-
tion now, including both credit and
finance departments.
• Consider the impact of moving to a
more robust loss methodology.
By taking the steps now to prepare, your
bank will be one step ahead of peers and
be in a better position to justify and defend
your ALLL calculation under CECL.
CBS Endorsed Vendors
Provide NCBA Members
Savings, Service & Quality
Look for the Seal, Trust the Product
CHECK PRINTING
Harland ClarkeCarroll Lynn Ritchie, (704) 649-3124
CRA CREDIT RETAIL
BUSINESS DEVELOPMENT
CRA PartnersSue Shaffer, (901) 529-4787
OFFICE SUPPLIES
Preston Steele, (336) 341-2553
DISCOUNT SHIPPING
UPSCall CBS to Sign Up, (800) 662-7044
FUNDING SOLUTIONS
ANOVA Financial Corporation
PAYROLL
Flex-PaySherry Burick, (336) 462-7838
FLOOD DETERMINATIONS
Teri Sizemore, (419) 660-8589
MERCHANT PROCESSING
TransFirstAndy Rosenberg, (973) 883-8909
RETIREMENT PLANS
Pentegra Retirement ServicesWade Connor, (704) 608-4563
SECURITIES
ICBA SecuritiesJim Reber, (800) 422-6442
BANK OWNED LIFE INSURANCE
Pentegra Retirement Services
FINANCIAL DATA & INTELLIGENCE
SNL FinancialColin Wyatt, (434) 817-5475
ELECTRONIC LIEN AND TITLE (ELT)
Amanda Jensen, (803) 808-4929
For more information on the CBS Endorsed Vendor Program, please contact
Janice Royster. (800) 662-7044 or janice@ncbankers.org
BANK CYBER SECURITY CONSULTING
Secure Banking Solutions (SBS)Alexis Gamewell, (615) 669-5056
COURTHOUSE RETRIEVAL SYSTEM &
COMPREHENSIVE PROPERTY TAX DATA
Alwyn Staley, (800) 374-7488 x 150
GENERIC PRESCRIPTION DRUG PROGRAM
Corey Sharpe, (336) 279-0007
COMMERCIAL INSURANCE PRODUCTS
Financial PSIBrian Mobley, (615) 244-5100
CAPTIVE INSURANCE
Oxford Risk Management Group
41Summer 2016 Carolina Banker
Community Bank Services
Kim Hutchens is executive vice president of Com-munity Bank Services (CBS), a wholly-owned subsidiary of the North Carolina Bankers Association.
2016 HR CONFERENCE REVEALS WHAT KEEPS HR EXECUTIVES AWAKE AT NIGHTThere’s always the question, “What keeps
you awake at night?” For approximately
70 of our NCBA Human Resource (HR)
executives, the answers resonated loud
and clear.
For the first time, NCBA combined the
annual Community Bank Services (CBS)
Benefits Day and Human Resource
Conference. Gathering for a two-day
conference on March 22-23 at the
Greensboro-High Point Airport Marriott,
were approximately 70 human resource
executives eager to hear from seasoned
HR executives and network with their
peers. It was clear from the first day of the
conference that our member bank’s HR
executives are dealing with a host of very
complicated, intense and often delicate
issues. With traditional issues related to
employee performance, pay, recruitment,
benefits and training, executives are now
carefully researching and following legal
cases within the federal and state courts
and departments as well as the never-end-
ing merger and acquisition activity.
Lauren Perry, vice president of CBS,
kicked off the first day of the conference
with an update on the 2016-2017 renewal
rates for the various employee benefits
that CBS sponsors: health, dental, vision
and life/disability. With approximately
50 member organizations/banks enrolled
in one or more of the employee benefits,
attendees were given all the current and
new rates that will go into effect with the
new plan year, which takes place on June
1, 2016.
Peppered with the renewal rate informa-
tion were speakers on issues related to
the benefits we provide our membership.
Speakers lined up for the day’s agenda on
topics related to the Affordable Care Act
(ACA), wellness and fitness initiatives,
an introduction to iBenefits, Inc, the new
voluntary benefits providers, as well as an
update from Dave Marley of Marley Drugs
on the generic prescription drug program
his company provides to all NCBA mem-
bers. (For a complete update on the 2016-
2017 rates for all employee benefit plans,
please contact Lauren@ncbankers.com; or
kim@ncbankers.og)
During the second day of the conference,
the presenters included:
• Devon Williams, attorney, Ward
and Smith law firm, provided key
insights into the appropriate use of
social media.
• Melissa Weaver, partner, Brooks
Pierce law firm, laid out the newest
regulations surrounding the topics
of sexual harassment and bully-
ing in the workplace, along with
domestic partnership benefits and
LGBT-related issues.
• Grainger Pierce, attorney, Nexsen
Pruet law firm, detailed updates
from the Equal Employment Op-
portunity Commission’s latest rul-
ings, along with recent employment
cases involving Affirmative Action
and the Family and Medical Leave
Act.
• Kyle Still, labor & employment
42 Carolina Banker Summer 2016
CB
partner, and Diane Tindall, at-
torney, Wyrick Robbins law firm
reviewed the Department of Labor’s
latest published rules defining the
difference between an “exempt” and
“nonexempt” employee.
• Ann Smith, principal, Jackson
Lewis law firm, outlined the Na-
tional Labor Relations Board’s
latest rulings on cases surrounding
employee handbooks.
• Tim O’Rourke, president & CEO,
Matthews Young Consulting gave
insightful observations on bank
compensation from the viewpoint
of the bank’s compensation com-
mittee.
• A panel, which included David
Allen, senior vice president, Bank
of North Carolina; David Beaver,
CFO, Uwharrie Capital Corp.;
Kristen Brabble, corporate of-
ficer & director of retail banking,
First Carolina Bank; and Melissa
deBuhr, director, advisory ser-
vices, human capital practice
lead, Carolinas at RGP, provided
thoughts on different work-related
initiatives involving the “Millenni-
als” employee workforce.
• Melissa DeBuhr with RGP ex-
plained how HR executives can
manage the expectations in merger
and acquisition activity.
• A panel including Jon Macklin,
senior strategic policy consultant,
BCBSNC; Diana Mason, employee
benefits consultant, Scott Ben-
efits; and Melissa Weaver, partner,
Brooks Pierce law firm, jumped
into the various components of the
ACA from their separate perspec-
tives.
• Lauren Perry, vice president of
CBS, gave an update on how to
manage enrollment and benefit
questions with employees who
become eligible for Medicare (age
65 and older) while still active full-
time bank employees.
The luncheon on day two of the conference
was kicked off by the current NCBA Vice
Chairman and Bank of North Carolina
CEO, Rick Callicutt. In his remarks, Cal-
licutt was quick to identify and heighten
the important role that HR executives play
in a bank’s overall performance as well as
maximizing the potential from a bank’s
greatest asset – its employees.
We are extremely appreciative of this year’s
participants at the two-day conference
and thank the speakers and sponsors. All
information related to the conference can
be found on the NCBA website – www.
ncbankers.org, or contact Kim Hutchens
(kim@ncbankers.org) or Lauren Perry (lau-
ren@ncbankers.org) with questions.
Thank you to our 2016 CBS BenefitsDay
and Human Resource Conference Spon-
sors:
GOLD:
BlueCrossBlueShield/North Carolina
SILVER:
BusinessSolver
Express Scripts
Flex-Pay Payroll Services
Scott Benefits Services
BRONZE:
AlwaysCare
HCMS Group LLC
iBenefit Communication
Marley Drug
Matthews Young Consulting
The Standard
At Oxford Risk Management Group, we specialize in conducting captive feasibility analysis and coordination of turn-key captive insurance company arrangements. As an alternative risk and captive insurance research and consulting company, we’re focused on coordinating design, implementation, regulatory approval and management of captive insurance companies.
We bring together the right partners with expertise where it matters most, to deliver the highest possible degree of long-term success for your captive insurance company.
410.472.6490
Learn more by calling or visiting us online.
www.OxfordRMG.com
• The most experienced and respected Best-In-Class experts in the industry• No hassle, Turn-Key approach• All-inclusive fee structure with industry leading pricing• Engineered for small to mid size enterprises• Committed to customer service
FFoortune 500 SSttyle CCaptive Risk Maaanaaageeemmment SSSeeervicesfoorr Small to MMid-SSized Enterprisesss
There’s a reason why we’re the industry’s fastest growing captivemanagement company:
The Only Captive PartnerYou Will Ever Need
44 Carolina Banker Summer 2016
2016 American Mortgage ConferenceRight: David Stevens, president & CEO, Mortgage
Bankers Association, kicked off the first day of the 2016
American Mortgage Conference with an update on real estate
finance and moving forward to economic stability. Below Left:
Attendees also heard from Sean Becketti, vice president & chief
economist, Freddie Mac, on housing and the road ahead. Below
Middle: Rob Chrisman, capital markets consultant, Chrisman,
Inc., addressed the crowd on day one of the American Mort-
gage Conference and spoke about the many changes coming in
residential lending. Below Right: Ted Tozer, president, Ginnie
Mae, kicked off day two of the American Mortage Conference
with a session on the future of government lending.
Left: On day two of the American Mortgage Conference, attendees
also heard from Steve Richman, national spokesperson, Genworth
Mortgage Insurance. Richman talked about generational marketing
and the millennial mindset. Below Left: Day two of the conference
included a panel discussion on the ups and downs of mortgage lend-
ing in community banks. The panel was moderated by Joe Smith,
Joseph A. Smith, Jr. Monitoring Ltd., and included the following
panelists: Roger Dick, Uwharrie Bank; David Rupp, Four Oaks
Bank; Rob Rusczak, North Carolina Housing Finance Agency; and
Ken Sykes, North State Mortgage. Below Right: Matt Tully, vice
president of government and industry relations, Essent Guaranty,
spoke about housing finance reform and the coming election.
45Summer 2016 Carolina Banker
Marriott City CenterRaleigh, North Carolina
Above Left: Nadja Vital, affordable lending regional manager, South East, Freddie Mac, kicked off the third and final
day of the 2016 American Mortgage Conference with a presentation entitled “Doing Affordable Lending Profitably.”
Above Right: Attendees also heard from Ed Pinto, co-director and chief risk officer, International Center on Hous-
ing Risk, American Enterprise Institute, on the third day of the conference. Pinto spoke about the future of housing
finance. Below Left: The closing speaker for the conference was Anne McCulloch, senior vice president, credit and
housing access, Fannie Mae. McCulloch spoke about the challenges and opportunities created by demographic change.
Above Right: Attendees had the opportunity for networking
breaks throughout the general session as well as two receptions,
which were both held in the marketplace and allowed for addi-
tional networking opportunities as well as visiting with conference
exhibitors. Left: In addition to the general session, the American
Mortgage Conference had six breakout sessions. Pictured is Rick
Goldbach, executive vice president and director of business devel-
opment, Townebank Mortgage. Goldbach’s session was titled “The
Future of the Loan Originator.”
1.800.351.3843 contactHC@harlandclarke.com
Research • Analytics • Direct Mail • Email • Contact Center © 2015 Harland Clarke Corp. ClickSWITCH is a trademark of the Fusion Network. All rights reserved.
Consumers think switching banks is a real hassle.1 Inactive accounts are a hassle for you.
ClickSWITCH changes that. A turnkey, fully automated account switching solution,
ClickSWITCH simplifies activation for you and your new account holders with the click
of a mouse. In just 10 minutes, they can initiate secure transfers of recurring transactions,
deposits and online bill pay from former financial institutions to yours. Easy for them.
Increases activation rates for you. It just clicks.
harlandclarke.com/ClickSWITCH
1 Consumersunion.org, Trapped at the Bank, September 2013
Sometimes thingsjust click.
Hassle-free,
one-click account
switching
47Summer 2016 Carolina Banker
NORTH CAROLINA INTEREST ON LAWYER’S TRUST ACCOUNT PROGRAM REPORT
Evelyn Pursley is the executive director of
NC IOLTA.
The North Carolina Interest on Lawyer’s
Trust Accounts (NC IOLTA) program is a
non-profit initiative created by the North
Carolina State Bar. The program works
with lawyers and banks across the state
to collect interest income generated from
lawyers’ pooled client trust accounts for
the purpose of funding grants to providers
of civil legal services for the indigent and
to programs that further the administra-
tion of justice. Since the first such grants
were made in 1985, this partnership
between lawyers and banks has funded
over $75 million in grants to support legal
assistance for at-risk children, the elderly,
the disabled and the poor in need of basic
necessities.
How The Program Works
Lawyers often handle money that belongs
to clients—such as settlement checks or
money to pay various fees. Often, the
amount of money that a lawyer handles
for a single client is quite small and/or is
held for only a short period of time. By
virtue of IOLTA, lawyers place these indi-
vidual deposits together into combined, or
pooled, trust accounts from which banks
forward the interest net of service charges
to the state IOLTA program, which uses
the money to fund law-related charitable
causes.
IOLTA Income Suffers During
Economic Downturn
Because IOLTA’s income depends on
interest being paid on bank accounts,
the economic downturn has dealt us a
double blow: smaller interest rates be-
ing paid on smaller principal balances.
Income from IOLTA accounts has de-
creased by over 50 percent from a high of
more than $5 million in 2008 to less than
$2 million over the last several years. For
2015, income from the accounts was $1.8
million, though we are pleased to report
that, for the first time since 2008, we did
not post a decrease from the previous
year in income from IOLTA accounts.
During this downturn, however, we have
appreciated the fact that many North
Carolina banks resisted lowering inter-
est rates on the accounts even when they
could do so and still maintain the com-
parable interest rates required for pooled
attorney trust accounts. And, though the
number of Prime Partner banks – those
that go above and beyond the eligibility
requirements of the IOLTA rule – has
decreased, we are pleased to feature those
who remain in our Eligible Bank list.
During this economic downturn, the
program has come to rely on funds
Lawyer’s IOLTA Trust Accounts
Bank pays interest less routine service charges
Funds remitted to NC IOLTA Program
Grants awarded for legal services to indigents and for the improvement of the administration of justice
48 Carolina Banker Summer 2016
received occasionally from court awards
or settlements. In 2015, we were fortunate
to receive more than $900,000 in such
funds. These funds were crucial to our
ability to make 2016 grants.
We remain hopeful that a rise in inter-
est rates and perhaps further funds from
other sources will bring income levels
back to more normal levels. We have been
notified that all IOLTA programs nation-
wide should expect a major distribution
of funds in 2016 resulting from a national
settlement in 2014 of loan servicing claims
asserted at the national level by the De-
partment of Justice and six state attorneys
general.
We Continue To Make Grants
The IOLTA trustees dramatically reduced
the number of grants beginning in 2010
as we dealt with a significantly changed
income environment due to the economic
downturn. The trustees decided to focus
grant-making on organizations provid-
ing core legal aid services. Even with that
change, IOLTA grants have dramatically
decreased by more than 50 percent from
their highest level of just over $4 million
in 2008 and 2009.
With the additional funds from court
awards, we were able to bring total grants
for 2016 back to $2 million and make just
over a 3 percent increase in the individual
grants – an emotional boost to all.
We have, of course, also tightened ex-
penses during this time, and are pleased to
report that our expense to income ratio
for the life of the program remains less
than 10 percent.
We are proud to be able to say that most
of the funds received are used for making
grants.
Grantee Spotlight: Expunction Projects
Provide Second Chances That Benefit
Individuals And Our State
Work to expunge criminal records for
worthy individuals has involved a num-
ber of IOLTA grantees – including staffed
legal aid organizations and pro bono
programs that bring together volunteer
attorneys and clients in need.
Though it may involve a decades old act
or even an arrest with no conviction,
having a criminal record is a daunting
obstacle to job seekers and others. More
than 1,000 state and federal laws deny
North Carolina residents a wide range
of privileges and rights, including public
benefits, occupational licenses and child
custody, based on criminal records.
In an Associated Press article on expunc-
tions, Daniel Bowes, an attorney with the
Second Chance Initiative at the North
Carolina Justice Center, calls a criminal
record “a scarlet letter that you can’t
escape” due to the availability of
electronic records and the fact that most
employers and landlords run criminal
background checks which document
every criminal incident. Often, these
employers and landlords are denying
worthy applicants based on long-ago
convictions or even charges that were
dismissed or disposed “not guilty.”
More than 150 pro bono lawyers state-
wide, along with paralegals and other
staff, are volunteering to assist these
49Summer 2016 Carolina Banker
CB
individuals with free legal services. Law-
yers at corporations and other non-trial
lawyers particularly like this pro bono
work perhaps because it is transactional
and time limited. This expunction work is
also being accomplished through clinics
offered around the state staffed by legal
aid attorneys assisted by students from
North Carolina law schools. And, the
district attorney’s offices in both
Wilmington and Asheville have assisted
with such clinics as well.
Bowes believes, “The primary asset of
our reentry efforts is the diversity of
partners at the table. In the last few years,
state legislators from across the political
spectrum have come to recognize the un-
necessary barriers to gainful employment
and affordable housing facing individuals
with nonviolent convictions and
responded by passing a handful of laws
that significantly expand expunction
opportunities for first-time, nonviolent
misdemeanors and felonies commit-
ted before the age of 18 or more than 15
years ago. Now you have law students,
pro bono attorneys, local community
groups, non-profit legal service providers,
and private firms partnering to bring this
important relief to underserved commu-
nities across the state. The result is hun-
dreds of low-income individuals gaining
genuine opportunities to move beyond
their past mistakes and more fully
contribute to their families and
communities.”
NC IOLTA Is Grateful For Our
Partnership With Banks In North
Carolina
We have appreciated our partnership
with North Carolina banks, and have
particularly valued the knowledge and
expertise our trustees from the bank-
ing industry have brought to the board
and to our decision making. In 2015, Ed
Broadwell of HomeTrust Bank in Ashe-
ville completed two, three-year terms on
the IOLTA board. His service included
two years as vice-chair and a final year as
chair of the NC IOLTA board. Broadwell
brought significant experience from the
banking industry having served on the
Board of the American Bankers Asso-
ciation (ABA) and the North Carolina
Bankers Association (NCBA), including
serving as the NCBA’s chairman.
In leaving the IOLTA board, he noted,
“For decades IOLTA’s Board of Trustees
truly has had a legacy of service by some
of the best public servants I have met in
my 50 plus years in banking leadership
both in North Carolina and nationally.
Having been selected for the Board of
Trustees and then serving as chairman
has been an unanticipated honor to serve
our North Carolina citizens.”
Currently, two of IOLTA’s nine trustees
bring banking industry experience. Ed-
ward C. Winslow III, partner at Brooks
Pierce in Greensboro, has spent his career
practicing in the areas of banking and
financial services, including representing
the NCBA and banks within and out-
side North Carolina. Joseph A. Smith, Jr.
served as North Carolina
Commissioner of Banks for nearly ten
years upon appointment in 2002.
For more than thirty years, IOLTA and
banks in North Carolina have worked in
partnership through this important pro-
gram to provide significant benefits for
our state. We look forward to continuing
the partnership for years to come.
50 Carolina Banker Summer 2016
Many of you have children, grandchil-
dren, nieces and nephews that are in
the midst of their middle school edu-
cation. They are starting to resemble
adults rather than children, and have
begun developing their own distinc-
tive personality traits, with their own
thoughts and ideas. They are more
than likely reading Harper Lee’s To
Kill a Mockingbird or a set of poems
by Langston Hughes, can solve math
problems using long division and have
built a DNA model out of tiny marsh-
mallows and toothpicks (something I
never could seem to do without eating
too many marshmallows). They are
finding their own way and learning
new skills that will set them up for
a successful future. But, ask a sixth
grader to create a spending plan for
his/her weekly allowance and you’ll
likely be met with a blank stare.
Despite recent efforts both nation-
ally and statewide in North Carolina,
financial literacy remains notably
absent from the education system, with
efforts to increase awareness of money
matters still largely targeted to adult
consumers at the point of sale. While
it is obviously important to educate
adults in how to spend wisely, save and
share, when do these lessons become
too late to matter? In contrast, when
is it too early to start teaching future
generation’s healthy money skills?
Some school administrators argue that
financial literacy is a topic best left for
the home. Similarly to other subjects
not covered widely in public schools,
Blaine Wiles is the director of
community outreach for the North Carolina Bankers Association.
financial education can potentially be
a touchy area when some may perceive
that they or their children are being
told how to spend their money or what
to do with it. However, if financial
education is left to parents, it must be
noted that some of these same parents
have become a bit too trigger-happy
with their credit cards, often under-
save for their own retirement, and
spend outside of their means without
even realizing it.
Ideally, of course, personal finance
would be taught in both scenarios – in
the school and at home. While having
the opportunity to receive financial
lessons from their parents can be an
invaluable opportunity for students,
teaching in the classroom helps to
level the playing field for those kids
who don’t get this type of education
at home. In the wake of the housing
bubble and The Great Recession, the
movement to make financial educa-
tion mandatory in primary school has
gained momentum in recent years,
and a handful of states already require
high school students to pass a per-
sonal finance class to graduate. But it
doesn’t take a rocket scientist or world-
renowned economist to figure out that
is just too little too late. These are skills
that students should be learning when
they are most impressionable and are
at the time in their lives when they are
developing habits and routines.
So when is the right time to start
educating young people on personal fi-
nance? In short, early and often. Lead-
HOW EARLY SHOULD WE TEACH FINANCIAL LITERACY?
Financial Literacy Update
51Summer 2016 Carolina Banker
ers in the financial literacy arena argue
that basic aspects of money-handling
should be integrated into education no
later than elementary school. “Play-
ing sports, exercising and brushing
your teeth are good life habits, and you
start learning them while you are very
little,” said Nan Morrison, president
& CEO of the Council for Economic
Education, one of the leading organiza-
tions in the U.S. focused on financial
education of K-12 students. “Personal
finance is also about establishing good
habits.”
That’s not to say first graders should
be dissecting spreadsheets or trying to
predict market trends, but getting kids
comfortable with money and teach-
ing them the value of the dollar at an
early age is imperative to establishing
healthy habits that they can eventually
carry into their adulthood. Personal fi-
nance is a lesson that is getting increas-
ingly harder to convey as time goes on
and technology advances.
While many of us watched our parents
pay for movie tickets and groceries
with ten and twenty dollar bills, kids
today grow up seeing everything pur-
chased with a seemingly easy swipe of
a card or even with their smart phones.
Although living in a digital age has
made purchasing goods and services
much easier and more streamlined,
there is typically some negative that
comes along with the good in these
advances. Thoroughly explaining that
real money is the unit that backs these
ever prevalent debit and credit cards is
incredibly important in helping young
people understand healthy spending
habits.
“It’s about teaching kids the conse-
quences of their financial decisions,
which relates to living a healthy and
responsible life,” said Amy Hayward,
co-president of A Squared Enter-
tainment, which helped produce the
animated content for billionaire inves-
tor Warren Buffet’s “Secret Millionaire’s
Club,” a program that offers saving,
earning and investing advice for kids.
As students mature and build upon
their financial foundation of knowl-
edge, more complex concepts such as
college planning and entrepreneurship
may be introduced.
Personal finance education, however,
need not (and should not) replace the
coursework already taught in elemen-
tary, middle or high schools. “Expo-
sure to personal finance concepts can
be gained through children’s literature,
such as Aesop’s Fables, like the classic
‘Ant and the Grasshopper’ story, which
is already used in the classroom,” said
Morrison. The goal is seamless and
consistent integration into existing
coursework or materials. Instead of
having students learn about pie charts
by graphing the number of children in
their class with different hair colors,
math teachers can ask students to chart
how they plan to spend or allocate
their allowance.
One arguably major downside to
teaching financial literacy in schools is
that knowledge unfortunately does not
always translate into smart decision
making. That’s partly because bad fi-
nancial decisions are sometimes rooted
in procrastination and inattention,
rather than lack of education. “We
know that people can learn things in
the classroom, but not actually change
their behavior,” said Brigitte Madrian,
professor of public policy and corpo-
rate management for Harvard Uni-
versity’s John F. Kennedy School of
Government. “The challenge in the
classroom is that you can make finan-
cial literacy classes mandatory, but you
can’t cover everything that every student
is going to need to know,” she added. “It
may contribute to making better deci-
sions later on, but we don’t know that.
It’s speculation.”
Regardless of what wise or poor finan-
cial decisions students may make down
the road, it’s our responsibility to ensure
that every young person is equipped
with the education and foundation
necessary to handle whatever obstacle
may arise. “If we can start teaching these
financial building blocks earlier, then
they will have those habits of thought
already in place,” said Morrison. “They
may not be worried about their 401(k)
when they’re just out of college, but they
may remember the jelly bean lesson on
compound interest and be more likely to
save.” CB
G e o r g i a | N o r t h C a r o l i n a | O h i o | S o u t h C a r o l i n a | Te n n e s s e e | V i r g i n i a | e l l i o t t d a v i s . c o m
with you every step of the way.
More than 160 banks in the Southeast depend
Member FDIC www.texascapitalbank.com NASDAQ®: TCBI
THE SMART MONEY IS ON Texas Capital Bank has a long history of building correspondent relationships that create value by meeting balance sheet needs and earning asset goals. From liquidity to loan participations and larger loan syndications, we build relationships that achieve the mutual goals of each financial institution.
TEXAS CAPITAL BANK®
Peter Stringer, EVP & Manager
214.932.6710peter.stringer@texascapitalbank.com
Jeff Wagner, SVP
913.549.3539jeff.wagner@texascapitalbank.com
Shirley York-Jones, EVP
832.308.7061shirley.york-jones@texascapitalbank.com
Jesse Jackson, SVP
214.932.6736jesse.jackson@texascapitalbank.com
Mike Moses, Business Development
361.550.5248mike.moses@texascapitalbank.com
12 3
• Top experts from across the state
• More than 25 breakout sessions
• Networking opportunities including a reception
• Special track and CE for housing counselors
• The annual Housing North Carolina Awards
• The annual N.C. Housing Coalition Legislative Awards Breakfast
• And more!
Registration opens early July. Early-bird registration, which ends Sept. 28, 2016, is $245
($215 for members of the N.C. Housing Coalition). After that, registration will be $295
($265 for Coalition members). Registration will cost $350 at the door.
Conference info
www.NCHousingConference.com • (919) 881-0707
October 12-13, 2016Raleigh Convention Center
kfast
Want to be a sponsor or exhibitor?Call Shellie Lempert at (919) 781-7979 to book your space today
Hosted by:
The conference will feature:
Get ready to join nearly 1,000
housing colleagues from North
Carolina and across the Southeast
to learn the latest news and
innovations in affordable housing!
HOUSING WORKS!2016 NC Affordable
Housing Conference
55Summer 2016 Carolina Banker
News From CICCAR
CLOSINGSCLOSINGSLoan #328306, Viridian Apartments, Lenoir, NC, $245,644 .......................................................................closed on Jan. 29, 2016
Loan #331307, Fountain Pointe Apartments, Rockingham, NC, $550,000 ............................................... closed on Feb. 11, 2016
Loan #373308, Ripley Station Apartments, Raleigh, NC, $875,000 .......................................................... closed on Feb. 17, 2016
Loan #327309, Emerald Forest Apartments, Biscoe, NC, $243,487 ........................................................... closed on Feb. 19, 2016
Loan #316310, Marsh View Place Apartments, Charleston, SC, $1,373,129 ............................................. closed on Feb. 23, 2016
Loan #375311, Allison Square Apartments, Anderson, SC, $605,000 .....................................................closed on March 3, 2016
Loan #374312, Dobbins Hill Apartments, Chapel Hill, NC, $1,039,500 ...............................................closed on March 15, 2016
Mark Morgan and Staurt LeGrand were the developers/sponsors of
Emerald Forest Apartments. The development provides 48 units
affordable to families earning 30%/50%/60% or less of the area median
income. This development received RPP funds for $800,000, a state tax
credit loan for $1,497,064 and $3,206,389 in proceeds from the sale of
federal tax credits.
Emerald Forest ApartmentsBiscoe, NC
Viridian ApartmentsLenoir, NCJim Yamin was the developer/sponsor of Viridian Apartments. The
development provides 64 units affordable to families earning 50%/60%
or less of the area median income. This development received Uni-
four Housing Consortium funds for $200,000, a state tax credit loan
for $2,039,441 and $4,964,304 in proceeds from the sale of federal tax
credits.
Allison Square ApartmentsAnderson, SC
Paladin, Inc. and Olympia Construction were the developers/sponsors of
Allison Square Apartments. The development provides 40 units afford-
able to families earning 50%/60% or less of the area median income. This
development received $5,114,878 in proceeds from the sale of federal tax
credits.
Fountain Pointe ApartmentsRockingham, NC
Connelly Development NC, LLC, was the developer/sponsor of Foun-
tain Pointe Apartments. The development provides 39 units afford-
able to families earning 50%/60% or less of the area median income.
This development received a state tax credit loan for $1,254,419 and
$3,333,377 in proceeds from the sale of federal tax credits.
56 Carolina Banker Summer 2016
Employee Benefits Update
Lauren R. Perry vice president of Community Bank Services (CBS), a wholly-owned sub-sidiary of the North Carolina Bankers Association.
WORKPLACE WELLNESS: SIMPLE STEPS TO A SUCCESSFUL PROGRAMEmployer awareness of wellness and its
importance in the workplace has sig-
nificantly increased over the past decade.
There are a multitude of programs avail-
able - and all are heavily marketed to
certain employer groups. Do we all desire
to live a long, healthy, happy life? Do we
believe wellness is important in the work-
place? Do we want to improve the health
of our employees, reduce absenteeism,
improve productivity and reduce the cost
of our health insurance premiums? Of
course we do.
Although the goals are similar, the path
to achieving workplace wellness will be
different for each employer. Each com-
pany has a unique population with diverse
demographics, geographic locations,
resources, as well as a distinct company
culture. Wellness programs are not one-
size-fits-all and finding the right mix can
often require some trial and error until the
best course of action is determined.
The banking industry presents additional
challenges, by nature, which prevent many
employers from implementing a success-
ful wellness program. As most employ-
ees have sedentary positions in a branch
location or corporate office, it is difficult
to incorporate exercise in the daily rou-
tine. Many employees have the pressure
of meeting performance standards and
struggle with work-life balance as a result
of those goals. Banks with multiple loca-
tions in different geographic regions are
constantly challenged with coordinating
the company-wide staff meetings and
trainings that are a necessary part of their
business. Therefore, scheduling on-site
wellness events or biometric screenings
for all employees may seem impossible or
incredibly difficult to coordinate.
Although these challenges may appear in-
timidating, wellness programs are linked to
greater productivity, less absenteeism and
a reduction of long-term health care costs
for employees nationwide. Health and ef-
ficiency have a clear relationship – healthy
employees take fewer sick days and are
more productive at work – and businesses
are starting to take notice of this fact. If
you are not doing enough to ensure the
health of your workforce (and company as
a whole), it is time to empower the people
who make it all possible. Even if you do not
have the resources to implement a com-
plete wellness program, there are six small
investments you can make to show employ-
ees that you value their health - and they
will return big dividends!
1. Promote preventive care. The Af-
fordable Care Act (ACA) requires
all preventive care to be covered
at 100 percent. Remind your em-
ployees of this valuable, FREE
benefit throughout the year. Host-
ing on-site flu shot clinics each year
is a great way to get started. Most
insurance plans now cover flu shots
at 100 percent and have providers
who will make arrangements to
cover employees and family mem-
bers at all locations.
57Summer 2016 Carolina Banker
2. Encourage exercise. There are nu-
merous ways to promote employee
activity in and out of the office, but a
few ideas for working hours: Imple-
ment and promote a lunch hour
walking club and offer incentives for
employees who participate. Encour-
age the entire staff to use the stairs
by posting signs in the elevator or
sending out friendly “reminders”
throughout the month. Many em-
ployers offer discounts or partially
subsidize memberships to a local
gym. If you are able to make
structural changes to your
building, some employers
have been successful adding a
workout room with a shower
for employees who wish to
work out during lunch or
after hours. Some banks even
provide employees with a
free Fitbit and encourage
a “healthy” steps competi-
tion between employees or
teams and rewards fun prizes
for those that walk the most steps
per day/week. Who doesn’t love a
“healthy” competition every now and
again?
3. Take time to educate. All company
staff meetings and luncheons are
prime opportunities to help em-
ployees learn about healthy habits.
To do so, recruit speakers to lead
30-minute sessions on heart-healthy
meals, snacking on the go or quick
stress management skills. Many of
the local hospitals, gyms and health
departments have resources for
community health education. If you
have the space, consider bringing in
instructors for lunchtime classes with
light activity for your employees to
enjoy. Keep sessions entertaining but
informative, and offer incentives for
employees who attend like small prizes
or benefits.
4. Encourage utilization of medical
plan resources. Many medical plans
include 24/7 access to a nurse line,
online cost estimator tools and healthy
living programs. The resources are de-
signed to help employees become bet-
ter healthcare consumers. Nurse lines,
for example, are a great resource when
determining if an illness or injury war-
rants an emergency hospital visit. If
the individual can treat themselves at
home or go to the primary care physi-
cian in the morning, they are able to
save significant time and money by
avoiding the ER for a non-emergent
issue.
5. Support better food choices. With
our busy schedules, eating and drink-
ing at the office are often necessary
to make up for lost time. Offer your
employees healthy meal and snack op-
tions that help fuel their performance,
while also meeting their nutritional
needs. Consider replacing sodas with
milk, juice or sparking water, and, if
your budget permits, keep a bowl of
The banking industry presents additional challenges, by nature, which prevent many employees from implementing a successful wellness program. As most employees have sedentary positions in a branch location or corporate office, it is difficult to incorporate exercise in the daily routine.
fresh fruit in the break room. Stock-
ing snack machines with nuts, dried
fruit, healthy crackers or popcorn
is also a good idea with little or no
cost to the company.
6. Be mindful of mental health.
Mental health conditions such as
depression and anxiety have con-
sistently been towards the top of
the list when it comes to health
concerns in this industry. Bank-
ers have higher utilization of drugs
in this therapy class compared to
the benchmark, and the associ-
ated impact on the plan’s pharmacy
cost can be alarming. Unmanaged
stress has also been linked to heart
disease, high blood pressure and
sleep trouble. Consider offering an
employee assistance program (EAP)
CB
or encourage employees to utilize
the EAP that is offered. Allowing
employees to have breaks during
the day to go out for a walk or some
fresh air can also be a small step to
reduce stress in the short-term or
long-term.
To learn more about worksite wellness and
programs available through the NCBA
Health Benefit Trust, please contact
Lauren R. Perry, (800) 662-7044 or
lauren@ncbankers.org.
FINANCIAL PSI HALF PAGE
AD
Financial Products & Services, Inc, provides high-quality insurance products at an
affordable price, with the individual attention you need. Our product portfolio allows
you to select from a variety of coverage options to meet your specific needs.
Your Source for:
Contact your FinancialPSI insurance representative today to find out how these products may benefit your bank and your customers.
FINANCIALPSI – Your Business Is Our Business
Jon Goodson
(901) 428-1807
Ted Frizen
(865) 769-8649
Brian MobleyPresident(615) 244-5100
59Summer 2016 Carolina Banker
Editor’s Desk
INTRODUCING THE DR. HARRY A. DAVIS PROFESSORSHIP AT THE WALKER COLLEGE OF BUSINESS AT ASU
Most North Carolina bankers have some
kind of connection with Harry Davis. In
his roles as NCBA economist, dean of the
NCBA’s North Carolina School of Banking
and chair of the NCBA chair of Banking at
Appalachian State University (ASU), Dr.
Davis has served the banking industry and
shaped the careers of thousands of students
and bankers for thirty-seven years.
Dr. Davis joined the faculty at the Walker
College of Business at ASU as professor of
banking in 1980. Shortly after his arrival,
he was asked to chair the Department of
Finance, Banking and Insurance. Consis-
tently rated by students as one of the most
popular professors at ASU, his regular class
load includes undergraduate Commercial
Bank Management and Managerial
Finance in the MBA program.
“Professor Davis offers his students practi-
cal life advice related to current events,
and he lectures with humor and clarity –
making advanced financial concepts easy
to comprehend,” said MBA student Ben
Brown. “Undergrads and graduate students
alike love taking his classes; we all have a
Dr. Davis story to share.”
During his tenure at ASU, Dr. Davis has
balanced his teaching responsibilities with
countless speaking engagements at bank-
ing conferences in North Carolina and na-
tionwide. His economic updates have been
published in countless newspapers and
magazines, and he has been interviewed on
the economy and banking issues on radio
and television stations across the state.
“North Carolina’s banking industry has
Kathleen Rollinsonis the director of communication at the North Carolina Bankers Associa-tion and editor of the Carolina Banker.
been well served for many years by Harry
Davis,” said Peter Gwaltney, president &
CEO of the NCBA. “The NCBA is very
fortunate to have him on our team for the
many contributions he makes through
research, speaking engagements and direc-
tion of our banking school. He is an ambas-
sador for banking like no one else I know.”
In addition to his capacity as NCBA
Economist, Dr. Davis serves as dean and
instructor for the NCBA’s North Carolina
School of Banking. He works closely with
the School’s faculty and class representa-
tives to ensure that the curriculum is rel-
evant and reflective of the changes taking
place in banking. He is also an instructor
for the Director’s College sponsored by the
North Carolina Commissioner of Banks,
the North Carolina Insurance Executive
Management School and the South Caro-
lina School of Banking.
“Harry has been an impact player for a long
period of time – both at the University and
in the community banking space in North
and South Carolina,” said Joe Towell, chair-
man of Yadkin Financial Corporation. “He
has had a positive impact on many students
who went on to become very successful
bankers. He has deep roots in the industry
and has been incredibly successful in both
the classroom and in the board room as a
high quality individual and a high quality
professional.”
Professorship Honoring Our Dear Friend
Harry’s Legacy
In recognition of his nearly four decades
60 Carolina Banker Summer 2016
of service to North Carolina’s banking
industry and ASU, the Walker College of
Business at ASU, in collaboration with the
NCBA, is creating an endowed professor-
ship in Harry’s honor. The Harry A. Davis
Professorship will allow the Walker Col-
lege of Business to attract and retain talent
to teach, conduct research and perform
service in the field of banking and finance,
preserving and building upon Harry’s life-
time of work and achievement during his
long tenure at ASU.
“I am humbled that the Walker College
of Business has chosen to name this Pro-
fessorship in my honor,” said Harry. “My
colleagues and students during my career
with ASU have become extended members
of my family, and I – along with my col-
leagues – are hopeful that this Professor-
ship will be used to attract highly moti-
vated future faculty members and students
to continue and expand upon a tradition of
excellence.”
“Harry Davis embodies the very mission of
the Walker College of Business at Appala-
chian,” said Walker College Dean Heather
Norris. “Each and every day, he delivers
transformational educational experiences
that prepare and inspire students to be
ethical, innovative and engaged business
leaders who positively impact our commu-
nity. This professorship will not only honor
Harry, but will also help the Walker College
of Business continue its legacy of excellence
in banking education in North Carolina.”
NCBA Campaign To Fund The Dr. Harry
Davis Professorship
A fully-endowed professorship requires
$1 million in funding, and the the NCBA
has organized a campaign to raise money
for the professorship through contribu-
tions from NCBA members, with a goal
of $1,000,000. When the NCBA members
reach $666,667 in gifts and/or pledges, the
Walker College of Business will apply for
matching funds from the State of North
Carolina; the state will provide matching
funds of $333,333 to create a $1,000,000 en-
dowment. To be eligible for matching funds,
all bank pledges are to be completed within
a five-year period. At the time of this print-
ing, early pledges exceed $100,000 from the
NCBA and its members.
For details on how your organization can
make a pledge contact the NCBA office or
Will Sears at the Walker College of Business
at searswill@appstate.edu or (828) 262-6231.
“Harry Davis has been a vital contributor
to our bankers association, to Appalachian
State University and to our state for nearly
40 years,” said Bob Hatley, president & CEO
of Paragon Bank in Raleigh. “In his role as
economist for the NCBA, he has provided
North Carolina bankers valuable insight into
what has happened and what appears to be
coming our way in the economy and why.
He has shown the effect this information has
to our banks and to our communities. We
have all made strategic decisions based on
information gained from Harry. Now is our
chance to recognize him for his contribution
to the success of banking in North Carolina.”
NCBA members will receive information
about the Dr. Harry A. Davis Professorship
fundraising campaign in July and regular
updates on pledges received will be provided
through the NCBA Weekly Bulletin during
the campaign. We will continue to keep you
informed throughout the process and ap-
preciate any and all contributions from our
member banks. CB
Above: Harry Davis addressing a crowd at the CEO Lecture Series.
2016 Conferences
Join Us For
Management Team Conference
Oct. 24 - 26
Pinehurst Resort
Pinehurst
Contact the NCBA Meetings Department
at (800) 662-7044 or email
Christy Santacana at
christy@ncbankers.org
July/August
July 31-Aug. 5: North Carolina School of BankingChapel Hill
Friday CenterAugust
30-31: CFO SymposiumRaleigh Marriott Crabtree Valley
Women In Banking Leadership
SymposiumOmni Hotel, Charlotte
September
28-29:
October
24-26: Management Team ConferencePinehurst Resort, Pinehurst
11-13: North Carolina Young Bankers
(NCYB) ConventionOmni Hotel, Charlotte
November
9-10: Security SummitHilton Charlotte Executive Park
North Carolina School of Banking
July 31 - Aug. 5
University of North Carolina
Chapel Hill
NCYB Convention
Sept. 11 - 13
Omni Hotel
Charlotte
62 Carolina Banker Summer 2016
THE RISK OF UNINTENDED CONSEQUENCES: APPLYING A ONE-SIZE-FITS-ALL RULE WITH
RESPECT TO PAYOFF & REINSTATEMENT QUOTES
Graham H. Kidner is general counsel with Hutchens Law Firm.
The recent opinion in Prescott v. Seterus,
Inc., 2015 WL 7769235 (11th Cir. Dec. 3,
2015), has led many mortgage servicers
to direct foreclosure law firms to elimi-
nate the practice of including estimated
or anticipated charges (“estimates”) in
payoff and reinstatement quotes. Such
directions are problematic, particularly in
the Carolinas where Prescott has no legal
force, and no federal court in either state
has addressed the issues in that case. Ad-
ditionally, because Prescott is a Fair Debt
Collection Practices Act (FDCPA) case, its
holding applies only to debt collectors, not
to creditors. While some servicers may be
debt collectors when they communicate
with defaulting borrowers, many are not.
Moreover, both the Mortgage Servicing
Rules and North Carolina law require the
servicer to include estimates it expects the
borrower to pay when responding to a bor-
rower’s authorized payoff request. South
Carolina foreclosure judges frequently
require payoff quotes to include estimated
charges.
In Prescott, the loan servicer was Seterus,
a debt collector. Seterus issued a reinstate-
ment quote to the borrower and included
attorneys’ fees it estimated would be
incurred to the good-through date, but
that had not been incurred as of the date
the quote was issued to the borrower. The
Court held that, even though the estimate
was clearly marked as such and con-
tained in a separate section of the letter,
the servicer violated 15 U.S.C. § 1692f(1),
which prohibits a debt collector from using
“unfair or unconscionable means to collect
or attempt to collect any debt,” including
“[t]he collection of any amount (including
any interest, fee, charge or expense inci-
dental to the principal obligation) unless
such amount is expressly authorized by the
agreement creating the debt or permitted
by law.” Because the mortgage instrument
(believed to be the standard GSE form) did
not require the borrower to pay estimated
fees, but only those actually incurred, the
Court found that Seterus was not autho-
rized to collect them at the time it provided
the statement.
The Court also held that Seterus violated 15
U.S.C. § 1692e(2)(B), providing that a “debt
collector may not use any false, deceptive
or misleading representation or means in
connection with the collection of any debt,”
including the “false representation of…
any… compensation which may be law-
fully received by any debt collector for the
collection of a debt.” Observing that the
“least sophisticated consumer” standard
is used to evaluate claims brought under
the FDCPA, the Court found that the least
sophisticated consumer would not have
understood the terms of the mortgage to
require the payment of “estimated” fees in
order to reinstate the loan.
The FDCPA and the Consumer Financial
Protection Bureau’s Mortgage Servicing
Rules target different audiences, without
reference to their members’ possible dual
status: debt collectors, who may or may
63Summer 2016 Carolina Banker
not be mortgage loan servicers; and ser-
vicers, who may or may not be debt collec-
tors. The latter arguably require the inclu-
sion of estimated or anticipated charges in
payoff statements, unless the servicer has
decided to waive collection of such charges.
12 CFR § 1026.36(c)(3) provides, in perti-
nent part, that if the borrower follows the
correct procedure for requesting a payoff
statement, the servicer “must provide an
accurate statement of the total outstanding
balance that would be required to pay the
consumer’s obligation in full as of a speci-
fied date.”
If a borrower follows the statutory pro-
cedure, North Carolina law requires the
servicer to provide a written payoff state-
ment for a specified date up to 30 days
after the borrower’s request. The statement
must contain, inter alia, the “information
reasonably necessary to calculate the payoff
amount as of the requested payoff date.”
N.C.G.S. § 45-36.7(e). This also appears to
require the servicer to include estimates of
fees and costs it expects to incur through
the specified date if it intends to collect
them from the borrower. The servicer’s
failure to comply with § 45-36.7 could
expose it to action from the N.C. Commis-
sioner of Banks. Demanding the payment
of fees or costs incurred subsequent to the
provision of a payoff statement, if esti-
mated or anticipated charges were excluded
from the statement, may violate N.C.G.S.
§ 53-244.111, which makes it unlawful for
a servicer to fail to follow state and federal
laws and regulations related to mortgage
servicing. N.C.G.S. § 53-244.116 provides
that the Commissioner may impose a civil
penalty on a servicer for such a failure of
up to $25,000 per violation.
South Carolina has not enacted legisla-
tion with respect to the provision of payoff
statements. However, a judge presiding
over a foreclosure case will routinely order
the servicer to provide the borrower a pay-
off statement good for up to 30 days, and to
include charges estimated or anticipated to
come due by the end of that period. Failure
to comply may at the least result in a delay
of the proceedings in the event the bor-
rower complains to the court, and may lead
to the imposition of monetary sanctions on
the servicer or a denial of judgment.
Both servicers and their law firms are right
to be concerned about complying with the
FDCPA. However, as with other federal
laws, different federal courts may arrive at
conflicting positions interpreting the same
statutes and each opinion may be the law
for the jurisdiction in question unless and
until the United States Supreme Court ul-
timately settles the conflict. As an on-point
example, federal courts in the Third Circuit
have issued opinions implicitly approv-
ing of debt collectors including estimated
charges in communications to consum-
ers. See, e.g., Kaymark v. Bank of America,
N.A., 783 F.3d 168, 175 (3d. Cir. 2015),
and Stuart v. Udren Law Offices, P.C., 25 F.
Supp. 3d 504, 511 (M.D. Pa. 2014).
In conclusion, applying the Prescott rule in
the Carolinas may have unintended conse-
quences for servicers, including the inabil-
ity to collect otherwise recoverable charges
from borrowers; reimbursement denial
from loan owners; or, adverse action from
the CFPB or the Commissioner of Banks.
Law firms are also concerned whether
servicers will pay their invoices contain-
ing post-statement fees and costs if these
charges are not paid by the borrower. CB
64 Carolina Banker Summer 2016
NORTH CAROLINA BANKERS ASSOCIATION MEMBER PROFILE: RICHARD JEFFERSON
WRITTEN BY: KATHLEEN ROLLINSON
As the only full-service community bank
headquartered in Jacksonville and Onslow
County, North Carolina, Coastal Bank &
Trust was the last de novo bank that opened
in North Carolina. Richard Jefferson, who
was named President & CEO in January 2016,
has been with Coastal Bank & Trust since it
opened for business in 2009 as one of the four
original executive team members serving as
CFO.
Prior to the Recession, de novo banks were a
strong business model and there was a void
in locally-owned community banking in the
Jacksonville area. The original officers – who
all had extensive banking backgrounds – did
a tremendous amount of research on Jackson-
ville and its surrounding communities, and
found that the demographics supported the
need for a locally-owned community bank.
The executive team received approval for the
bank from the State and raised capital – all
locally raised with no institutional funds.
“Trying to raise $11 million in 2008 when the
economy was at its lowest point was difficult,”
said Richard. “But, we found that people were
willing to support our mission in bringing
community banking to Jacksonville and On-
slow County.”
Coastal Bank & Trust opened for business
on April 13, 2009, and since that time has
been operating under its same guiding prin-
ciple –providing the highest level of service
by creating a banking experience unique to
the marketplace. Fast-forward seven years
and the bank now has 24 employees, a main/
branch office in Jacksonville, a branch in
Holly Ridge and a Loan Production Office in
Wilmington.
Richard Jefferson, president & CEO of Coastal Bank & Trust, lives in Jacksonville with his wife, Terri, and their children Griffin and Bailey.
Originally from Danville, Virginia, Richard is
a second generation community banker and
grew up in a community bank environment.
His father was president of American National
Bank and was with them for more than 30
years. “As a kid, I remember going into the
bank on the weekends and after school to sim-
ply hang out or help my dad around the bank,”
said Richard. “I’m extremely proud to follow in
his footsteps. Community banking really suits
me. I truly enjoy providing an integral service
to our community.”
Richard is very involved in the local commu-
nity, being a member of and having served as
chairman of the Military Affairs Committee.
Jacksonville is the home to Camp Lejeune, the
largest Marine Corps base on the East coast.
He is also very involved with Jacksonville
Breakfast Rotary Cub and his church. “In the
communities we serve, my focus is to com-
municate and educate people on the difference
of community banking – what it is and the
role that it serves within a community,” said
Richard. “I try to practice what I preach to our
employees, and that is to be actively engaged in
our communities. It is an integral part of our
corporate philosophy as a community bank.” CB
NCBA FOUNDATION SCHOLARS2016
LAUREN DRUMTHE LARRY BARBOUR SCHOLAR
Lauren is the daughter of James and Crystal Drum. James works for High Point Bank & Trust Company. Lauren, the recipient of the Larry Barbour Scholarship, will attend Clemson University. This scholarship is in recognition of Larry’s contin-ued advocacy for leadership train-ing through the curriculum of the NCBA’s North Carolina School of Banking and his dedicated service over decades to the University of North Carolina at Chapel Hill.
ROBERT JUDGE WILL KELLYTHE HAROLD KEEN SCHOLAR THE KEL LANDIS SCHOLAR
SHANN LEONARD REGAN LONG SAMANTHA SHUFORD
Shann, the recipient of the Kim Price Scholarship, is the son of Lee and Bonna Leonard. Lee is employed with Yadkin Bank in Raleigh. Shann will attend Davidson College. This scholarship is named in Kim Price’s honor for his pursuit and implementation during his chairmanship of 100 percent dues refund for the members in 2008. It is also in recognition for his strong voice calling for a halt to credit union expansion.
Regan, the recipient of the John B. Harris, Jr. Scholarship, is the son of Loren and Jane Long. Loren works for Entegra Bank in Franklin. Regan will attend the University of Alabama. The Scholarship is in honor of John Harris’ pursuit of the integrity of banking, fulfillment of bank’s missions as quasi-public trusts due to federal insurance accounts and serving as an advocate to assure a well-trained staff for the benefit of consumers.
Samantha, the recipient of the Donna Goodrich Scholarship is the daughter of Gene and Jane Shuford. Jane is em-ployed by Bank of the Ozarks in Shelby. Samantha will attend the University of South Carolina. A leader of unparalleled comparison, respected by all and admired for her immense capacity as a consen-sus builder, this scholarship was named in Donna’s honor for being a strong and positive advocate for women in banking.
THE KIM PRICE SCHOLAR THE JOHN B. HARRIS, JR. SCHOLAR THE DONNA GOODRICH SCHOLAR
Robert, the recipient of the Harold Keen Scholarship, is the son of Robert and Eliz-abeth Judge. Robert is employed at Live Oak Bank in Wilmington. Robert will at-tend Villanova University. This scholar-ship is named in honor of Harold Keen with great appreciation for his enthusiastic oversight as chairman of the NCBA Foun-dation’s Scholarship Committee, and the fulfillment of its mission and its support of college-bound academic achievers who are children of employees of banks in our state.
Will, the recipient of the Kel Landis Scholarship, is the son of Roy and Kathleen Kelly. Roy works for Fifth Third in Raleigh. Will will attend North Caroli-na State University. This scholarship is named in honor of Kel Landis to express gratitude for his pursuit of superlative performance on behalf of North Caroli-na’s banks and their government relations missions, constructive conversations and regulatory reform.
66 Carolina Banker Summer 2016
67Summer 2016 Carolina Banker
LETTER FROM INCOMING CHAIRMANRICK CALLICUTT
Rick Callicut is president & CEO of Bank of North Carolina.
“Hope is not a strategy.”
My name Rick Callicutt, and I’m the CEO &
president of Bank of North Carolina. I often
communicate to our employees the
statement referenced above, as a strategy
requires a plan of action, while hope is
simply a belief for something to happen. In
both my professional and personal life, this
quote holds true.
Originally from North Carolina, this state
has always been my home. I was born in
High Point, and grew up in the Davidson
County area. My love of sports has always
been evident, and I played basketball,
football and was on the track team in high
school. I then attended High Point University
where I set a track record that still stands
in the high jump category. Yet my love for
sports is not just dribbling, shooting and
running, but the relationship between the
coach and the players.
After graduating from college, I entered the
world of financial services where I joined
Wachovia Bank in their management
program. I held various roles there;
however, while not my favorite, the one that
was probably the most beneficial was in the
sales finance area as a collector. I describe
that experience as a master’s degree in
people.
In 1991, a new bank was being formed in
Thomasville, North Carolina, and I was
fortunate to be a part of its creation and
development. We opened our doors to
customers in December as Bank of North
Carolina (BNC), and we’ll be celebrating
our 25th anniversary this year. Over the
years, we’ve consistently experienced steady
growth; however, the past five years have
been the most exciting at BNC. During that
time, we’ve had the opportunity to build
our franchise throughout North Carolina,
as well as entering both South Carolina and
Virginia as BNC Bank. Through strategic
acquisitions, we have partnered with
financial institutions to deliver the best
banking experience possible. Our brand
promise is to Deliver More than expected,
and this is not only a part of the culture at
BNC, but it is ingrained in everything we
do. Through the commitment and
dedication of our employees, we strive to
Deliver More to one another, to our
customers and to the community each and
every day.
At BNC, our mission is to provide the best
banking experience possible by
anticipating our customer’s needs, and
exceeding their expectations while
assisting them in achieving their
short-term and long-term goals. We are
committed to providng a challenging and
rewarding work environment for our
employees, while maintaining solid
financial strength to ensure superior
returns to our shareholders.
When you begin a bank, there are many
jobs to be filled by a few select individuals.
This may seem challenging at times;
however, it is through those experiences
you have the ability to learn. During my
tenure at BNC, I’ve probably held about
every role, and much of how I manage
today is because of that thorough
foundation. I hire the best bankers I can find,
and then I allow them to do what they do
best. Yes, I work from a playbook, and we
focus on the fundamentals, but I must also
be deliberate in allowing the employee to
do their job without micro-managing. I’ve
learned through coaching and support,
success will follow.
On a personal level, my family includes my
wife, Jaime, three daughters, two step
daughters, and three grandchildren. We
all have busy schedules; however, we enjoy
spending time together doing activities such
as boating, traveling, saltwater fishing and
supporting our Carolina Panthers, University
of North Carolina Tar Heels and University
of South Carolina Gamecocks.
Accepting the role of Chairman of the NCBA
is not one I take lightly. Our industry has
Think differently about compliance.
Today’s most respected compliance experts and practitioners will give you new
insights into compliance knowledge, a deepened understanding of regulatory
issues, and career-building skills.
ABA Compliance Schools
Fall 2016 Session
October 22–28, 2016 | Atlanta, Georgia
Expand your understanding. Optimize your productivity.Register today at aba.com/cs
been under siege the last several years. Our
communities, customers, shareholders and
employees have suffered the consequences of
the regulatory burden and the indifference of
our Congress to take significant action. We
have been painted with a brush not fitting of
the contributions we make as an industry of
community banks.
Your board of directors and leadership of the
NCBA are committed to working hard to
ensure our voice is heard. Your NCBA has
never been better positioned, and steadfast in
our resolve to advance the cause we all share.
Thank you for the opportunity to be the
incoming chairman of the North Carolina
Bankers Association. It is an honor and a
privilege, and I look forward to another year
of growth and success.
PAC GOAL$125,000
52,031
2016NC BankPACPOLITICALACTIONCOMMITTEE
2016 Honor Roll
100% Club BB&T, Winston-Salem blueharbor bank, Mooresville Entegra Bank, Franklin First Federal Bank, Dunn First Federal Savings Bank, Lincolnton First South Bank, Washington High Point Bank & Trust, High Point Jackson Savings Bank, Sylva
Lumbee Guaranty Bank, Pembroke Morganton Savings Bank, Morganton North State Bank, Raleigh Old Town Bank, Waynesville Paragon Bank, Raleigh Piedmont Federal Savings Bank, Winston-Salem Regions Bank, Raleigh Roxboro Savings Bank, Roxboro Select Bank & Trust, Dunn Sound Bank, Morehead City SunTrust Bank, Durham Taylorsville Savings Bank, Taylorsville
200% Club Black Mountain Savings Bank, Black Mountain Coastal Bank & Trust, Jacksonville North Carolina Bankers Association, Raleigh Tarboro Savings Bank, Tarboro
70 Carolina Banker Summer 2016
Faces in the News
ALBERMARLE BANK & TRUST, A WEST TOWN
BANK
Albermarle Bank & Trust named Deborah Lee vice presi-
dent and city executive for the new branch that recently
opened in Edenton. Albermarle Bank & Trust also named
Heather Sawyer assistant vice president and branch man-
ager for the new full-service banking office in Edenton.
AQUESTA BANK
Aquesta Bank Insurance Services, Inc., a subsidiary of
Aquesta Bank, announced that Denis Bilodeau retired as
president at the end of March. Aquesta Bank announced
the bank has hired Jon McConnell to serve as a Charlotte
city executive to help develop and grow the commercial
relationships in the Charlotte area. Aquesta Insurance
Services, Inc. announced that Kenneth (Ken) McGee has
been named president of the subsidiary of Aquesta Bank.
Aquesta Bank also announced the hiring of Julia Stuckey
to serve as a branch manager for its SouthPark location in
Charlotte.
BANK OF NORTH CAROLINA
Bank of North Carolina announced the promotion of
Patrick W. Pritchard to executive vice president, senior
operations officer. Pritchard leads the branch operations,
deposit administration, loan operations and loan process-
ing teams.
CAROLINA BANK
Carolina Bank announced that Amy Gilmore joined the
bank as Greensboro mortgage loan officer. Gilmore is an
accomplished banker with nearly 30 years of experience
in the financial industry. Carolina Bank also announced
the hiring of Fuller Parham to its Peace Haven Road office.
Fuller will serve as vice president, commercial banking
officer, responsible for developing new customer relation-
ships and managing existing customer portfolios. Carolina
Bank also announced the promotion of Kathryn Watson
to the position of assistant vice president and branch man-
ager in Asheboro.
CAROLINA TRUST BANK
Carolina Trust Bank announced Edwin E. Laws joined the
bank as executive vice president and Chief Financial Of-
ficer (CFO).
CARTER BANK & TRUST
Carter Bank & Trust announced the promotion of Charlie
H. “Chuck” Martin III to assistant vice president. Martin
has been employed by the bank for 21 years and most re-
cently served as the bank’s marketing officer. The bank also
announced the promotion of Kristen C. Worley to branch
manager of the 58 East office, located at 140 Kentuck Road
in Danville, Virginia.
DeborahLee
HeatherSawyer
JonMcConnell
JuliaStuckey
Patrick W. Pritchard
Kenneth (Ken)McGee
FullerParham
KathrynWatson
Edwin E.Laws
AmyGilmore
Charlie “Chuck”Martin III
Kristen C.Worley
JoyCash
DenisBilodeau
BestyJones
BethanyAlger
KristenAnderson
Julie Clark
KimFox King
71Summer 2016 Carolina Banker
Faces in the News
CRESCOM BANK
CresCom Bank announced the hiring of Joy Cash to serve
as branch manager and assistant vice president for its new
Wilmington branch, which opened in April, located at
4710 Oleander Dr. This branch is CresCom Bank’s first
Wilmington branch and represents continued expansion
throughout the Carolinas.
F&M BANK
F&M Bank announced Betsy Jones joined the bank as se-
nior compliance officer in Salisbury.
FIDELITY BANK
Fidelity Bank announced the promotion of Bethany Alger
to vice president and business development officer. Fidel-
ity Bank also announced that Kristen Anderson joined its
team at the Sunset Plaza branch in Fuquay-Varina as as-
sistant vice president and office manager. Julie Clark also
joined its team at the Parkway Pointe branch in Cary as
vice president and branch manager. Kim Fox joined the
Fidelity Bank team in Roxboro as vice president and busi-
ness development officer. Fidelity Bank also announced
the promotion of Matthew King, previously serving as
chief credit officer, to executive vice president at the bank.
FOUR OAKS BANK
Four Oaks Bank announced the renaming of their finan-
cial services division. Four Oaks Services is now “Four
Oaks Wealth Management.” Chris Vasques will serve as
senior vice president and manager of Four Oaks Bank
Wealth Management.
KS BANK
KS Bank announced that Earl W. Worley, Jr., KS Bank chief
operating officer, has been elected chair of the University of
Mount Olive board of trustees.
NEWBRIDGE BANK
NewBridge Bank announced that Robin Snipes Hager,
senior executive vice president and chief administrative
officer, has been honored with the ATHENA Leadership
Award by the Greensboro partnership. This award is a na-
tional honor presented to an individual who attains the
highest level of professional excellence, and is committed
to improving the quality of life for others and the advance-
ment of women.
NORTH STATE BANK MORTGAGE
North State Bank Mortgage announced they have en-
hanced its Outer Banks team by hiring Carrie Cubine as
a mortgage loan officer. North State Bank Mortgage also
announced that Jamie Harrington, vice president and re-
gional manager, was named in the top echelon for Homes
Earl W. Worley, Jr
CarrieCubine
JamieHarrington
DavidJoyner Davis
ChrisVasques
Robin Snipes Hager
EllenMcGraw
JasonKranack
JohnGraham
BrookeJenkins
KrissHughes
MichaelCooper
JessePaino
Faces in the News
for Heroes affiliates, having been named the organization’s
#3 lender in the United States and #1 lender in North
Carolina. North State Bank Mortgage also announced the
hiring of David Joyner, mortgage loan officer. Joyner will
work alongside Cubine and the Outer Banks team.
PARAGON BANK
Paragon Bank announced that Matthew C. Davis, chief
operating officer and executive vice president, has been ap-
pointed to the board of directors for WakeEd Partnership
and to the board for A Place at the Table. Paragon Bank
also announced that John Graham has joined the client de-
velopment team at the bank’s Charlotte office as senior vice
president and client development officer. Paragon Bank
also announced the promotions for three key individuals.
Kriss Hughes has been promoted to senior vice president,
Brooke Jenkins has been promoted to assistant vice presi-
dent and Ellen McGraw was promoted to vice president.
SQUARE ONE BANK
Square One Bank announced that Jason Kranack joined
the bank as executive vice president, bank operations.
TD BANK
TD Bank named Michael Cooper as deployment director
of the New Markets Tax Credit Program (NCTC) for TD
Community Development Corporation.
WELLS FARGO
Wells Fargo announced that Jesse Paino was named senior
relationship manager for the Cary market.
YOUNT HYDE AND
BARBOUR HALF PAGE AD WE HELPCOMMUNITY BANKS
GROW CONFIDENTLY
Keep the NCBA in the loop!
CAROLIN
ABANKER
Fall 2010
Honor Flights
Give WWII Vets
Pride and Praise
ROOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOONNLINLINLINLINNNNNNNNNNNLINNNLINNNNNNNNNINNNLINLINNLINNLINLINNNNLINNNNNNLINNNNLININLINNNNNNNINNNNLINLINNLINNNINNNNNNNNLINNNNNNINNNNLINLININNLINLINNLINNNLINLINNNNNLINNNNLINLINLINILINLINLINNLINNNNNNNINLINNLININLINININLINNNNNNNLINNNNNLINLIININLINNINNNNNNNNNNNNNNLINLLLILINLINLILINLINININNNNNNNNNNNNNNNINLININLINLLILILILIIIINININNNNNNNNNLINLINNNNNLILLILILILIIINININNNNNNNNNNNNNNNNNNNNLLINLINLIININININNNNNNNINNNNNNNNLLINLLLILILIIIININININLININLINNLINNNNNNNLLLLLLLILILINIINLININLININNNNNNNNNNLLILINLLLILILIIIINININNNNNLINNLINLINNNNNLINNLLLILIININININLINLINLINLINLINNNNLINNNLLILILILIININININNNLINNNNNNLINLLLLLLILINLIININNNLINNNLLLLLIIINLINLINLINNNINNNNLILINLIIININININNNLLILINLIIINLINLILLLILILIILLL AAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAABBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBANANANNNANNANANANANANANNANAANANANANNANAAAANANANANANANANAAANANANANANANNANAAANANANANAANAAAANAANNAAANANANANANAAANANANANANANANNANANANNANANANANANAAANANAANANANANNAAAANNNANANANAAAAAAAAAAAAAAAAAAAAAAAAAAAAAABBBBB
HELP KEEP CAROLINA BANKER
CURRENTAs your bank promotes employees or hires new employees, please remember to send an update and the employee’s headshot to Kathleen Rollinson at kathleen@ncbankers.org. This special Faces in the News section in Carolina Banker is designed to showcase these announcements each issue. We truly appreciate your submissions.
73Summer 2016 Carolina Banker
Around the State
Left: Four Oaks Bank held a Ribbon Cutting Ceremony to celebrate the bank’s move into their brand new facility at 115 Four Oaks Place in Dunn. Approximately 80 well wishers and supporters attending the ceremony and enjoyed a light lunch. Below Left: Senator Thom Til-lis speaks with North Carolina bankers about regulatory red tape, issues in Washington and in North Carolina and his position.
Left: The newest branch of Albermarle Bank & Trust (a West Town Bank) in Edenton celebrated its grand opening with a ribbon cutting ceremony with its employees, stakeholders, government officials and community leaders. Above: In April, Willow Creek, a 53-unit apart-ment community of CICCAR’s for seniors in Cary, celebtrated its official dedication with a ribbon-cutting ceremony. This development provides affordable housing for seniors in the area whose incomes are limited to 60 percent of the area median. Pictured holding the scissors is Represen-tative David Price.
74 Carolina Banker Summer 2016
Banks Backing Their Communities
Top Right: United Way of Lincoln County an-nounced Carolina Trust Bank as this year’s winner of the North Carolina Spirit Award. Each year, the United Way of North Carolina recognizes and awards companies and organizations that have demonstrated strong community support through United Way involvement. The Award celebrates the partnership of people working together and implementing innovative solutions for long-term community change. Carolina Trust Bank has demonstrated 15 straight years of 100 percent employee participation and contributions to the United Way campaign.
Left: Wells Fargo team members helped move veterans into their brand new apartments at CASA in Raleigh. The furniture was from The Green Chair Project in Raleigh, which is another organization that Wells Fargo actively supports. Bottom Left: The United Way of Asheville Bun-combe County presented Asheville Savings Bank (ASB) with the United Way Spirit of the Mountains award in recognition of the Bank’s outstanding commitment to the community. Pictured is Suzanne DeFerie, president & CEO of ASB; David Bailey, president & CEO of United Way of Asheville and Jonna Bradham, SVP, human resources, ASB.
Top Right: HomeTrust Bank is celebrating 90 years of commu-nity banking by donating $90,000 to organizations in its banking footprint. The 90K for 90th Community Support Contest will fund initiatives for 45 local ogranizations. In the photo David-son County Market President presents a check to the LHCDC in Davidson County. Bottom Right: Paragon Bank participated in the Triangle MS Walk in April at the PNC Arena in Raleigh. Paragon Bank employees raised more than $4,000 including a matching donation from the Bank.
P.O. Box 19999Raleigh, NC 27619-9916
PRSRT STD
U.S. Postage
PAID
PPCO
Seeing Red?Are you “in the red” when it comes to customer debt collection? To us, Red means STOP. Stop the calling, the “he’s not in,” the “check’s in the mail,” the broken promises… Stop spinning your wheels when trying to collect past due accounts, and let HUTCHENS LAW FIRM help.
Hutchens Law Firm has over 35 years’ experience in consumer and commercial debt collection and can provide you with real solutions to
throughout North and South Carolina to serve you. Let us help you get the RED out of your next loan report by calling us today:
844.409.0707
4317 Ramsey St, Fayetteville, NC | Offices in Fayetteville, Southern Pines, Charlotte, Wilmington, Columbia, Myrtle Beach
HUTCHENSLAWFIRM.COM
Recommended