Your IBANYS Team: 
Working Together To Make 2016 A Great Year 
For New York C ommun ity Banks !
 
In This Issue

Quick Links

Have You Contributed to NYSIBPAC This Year?
If not...now is the time! We need your help in this statewide election year to support candidates and committees who understand community banks' needs. Can we count on you?
CLICK HERE for our 2016 PAC contribution form. Help support IBANYS' political action efforts in New York State.

Partner

February 24, 2016



Don't Miss These Upcoming 
IBANYS Meetings!
IBANYS' 2016 events (see www.ibanys.net under Education/Upcoming Meetings) provide CPE credits, offer New York community banks the latest information and tools for profitability and success...feature unique networking opportunities
. . . and, afford our preferred providers, partners and associate members valuable sponsorship & exhibiting opportunities. It all begins with. . .


. . .Our 2016 Regional 
Compliance   Conferences 
These March 30-31 in Rochester and Albany sessions  will include  presentations by federal and state banking regulators, topical presentations by outside consultants and a "bankers peer panel" discussion.

CLICK HERE to register.

The agenda will include:
  • Cyber security and risk management
  • CRA/fair lending/community development loans 
  • Flood insurance
  • HMDA, BSA/AML
  • Complaint management, including portal systems


 



. . .Then, Our Regional Directors Conferences 
These sessions on April 13 and April 14  in Rochester & Castleton (Albany) will feature issues, trends and information for the board members of New York community banks. As we continue to work out of this latest banking crisis, we see a significant decline in the number of community banks around the country. Bank boards and management continue to see increasing "help" from Washington, D.C. -- much of which simply adds to the cost of doing business. With so much pressure on earnings, it's time to look for answers about how we can survive and prosper in the future. We'll examine current M&A Environment, Capital Planning Strategies, and how to prepare for any interest rate environment headed our way... and, much more!   

Next, it's time to. . .


. . .At IBANYS' CFO/Senior 
Management Conference 
Our May 9-11 program at The Harbor Hotel in Watkins Glen will include a full program, from Monday morning golf and Monday night's dinner, through Wednesday morning's final presentation ending at 10:45 AM. 

Here's a quick preview -- full details and registration will be provided in the very near future. 
  • Monday Evening Dinner Keynote Address by John Elden, SVP & Chief Risk Officer, Federal Home Loan Bank of New York
  • Economic & Capital Markets Update, by Gary Keith, Chief Economist with M&T Bank
  • Deposit Analysis: Crucial Element In Understanding Your IRR Problem, by Al Forresester, CEO, FICAST Data Corp.
  • Succession Planning: Developing The Next Generation Of Community Banking Leaders, by Flynt Gallagher, President, Compensation Advisors 
  • Revenue Enhancement: It's Not What You Think, by Lawrence Pruss, SVP & Revenue Expert, Strategic Resource Management (SRM)
  • Historical Tax Credits by Roger Upton, MS Consultants
  • Credit Stress Testing: What Examiners Expect, and Steps To Deliver, by Shawn O'Brien, President, Qwickrate 
  • The New ALLL: A CECL Primer For CFOs, by Emily Bogan, Senior Risk Management Consultant, Sageworks
  • Managing Your Investment Process: Best Practices For Assuring Consistency & Success, by Greg Roll, ICBA Securities
  • Public Funds: Enhancing Your Deposit Business In 2016, by Joe Hooker & Kevin Hamilton, Promontory Interfinancial Network
  • Bank Cybersecurity: From A Senior Management Perspective by Dave Koto, VP of Banking Strategy, Presidio
  • Strategies for Successful Partnership Between Internal Audit, ERM and the Business -- How To Maximize The Value From Your Risk Functions, by Larry Hessney, CIA, CISA, PCI, QSA, Director-Risk 7 Technology Consulting Servixes, Freed Maxick
  • We'll also have numerous networking opportunities, refreshment breaks, breakfasts, lunches and dinners...and golf beginning at 10 AM Monday, May 9
Then, join us for. . .


. . .IBANYS' Second Annual  Lending Conference
Join us June 28-29 at the Woodcliff Hotel & Spa in Fa irport  (Rochester). The program  will review all aspects of the lending process, with presentations and discussions on loan review, risk, sales, portfolio management and the impact of CECL. 

And Finally, Our Premier Event Of The Year:

IBANYS Annual Convention: Oct. 3-5, 
The Turning Stone
Our 42nd Annual Convention -- our premier educational meeting and business show of the year -- will be held at The Turning Stone October 3-5. We'll have a full menu of top notch speakers and presenters, including keynote speaker Steve Greenberg, a veteran political analyst and commentator who will preview the critically important 2016 election for community banks. Plus, our business show, silent PAC auction and much more!. We will provide details on each program, as well as registration information, in the very near future. Watch for updates.

IBANYS will also participate in two important ICBA meetings: The ICBA Annual Convention in New Orleans, March 6-10, and the Washington Policy Summit in late April, when IBANYS members will meet "on the hill" with Members of our New York Congressional Delegation. Watch for details.



PLEASE Share These Important Dates 
With Your Officers, Directors & Employees
  • March 30, 2016 - Compliance Conference - Rochester, NY
  • March 31, 2016 - Compliance Conference - Castleton, NY (Albany)
  • April 13, 2016 - Directors Conference - Rochester, NY
  • April 14, 2016 - Directors Conference - Castleton, NY (Albany)
  • May 9-11, 2016 - CFO/Senior Management Conference - Watkins Glen, NY
  • June 28-29, 2016 - Lending Conference - Fairport, NY (Rochester)
  • October 3-5, 2016 - 42nd Annual Convention -Turning Stone Resort & Casino, Verona, NY
  • October 19, 2016 - Security Conference - Rochester, NY
  • October 20, 2016 - Security Conference - Castleton, NY (Albany) 

GOVERNMENT RELATIONS UPDATES

I N ALBANY

Budget Tops State Agenda
The New York State Legislature returned to Albany today, as discussions continue on the Governor's proposed $154.6 billion Executive Budget plan. 
The deadline for approval of the 2016-17 state budget is April 1.  An analysis from the State Comptroller DiNapoli's office has found more details are needed about how New York will pay for major mult-year projects.  The report does highlight a vastly improved financial picture for the state in recent years, but notes "...the state may face increasing budgetary challenges in coming years as revenue growth is expected to slow and billions of dollars in settlement money are spent.  The state's fiscal position is much improved because of actions by the Governor and the Legislature, legal settlements and robust tax revenues this year. . .
Yet structural budget challenges remain, and we cannot count on extraordinary one-time windfalls to pay our bills down the road. The Executive Budget reflects better times and proposes new investments in key areas such as infrastructure, but greater clarity is needed on how the state will pay for it all."  DiNapoli said his office also has questions about the timing of the governor's plan to raise the hourly minimum wage of state workers $15 an hour in order to set an example for his push for a statewide hike to that level.

Meanwhile, two bills were on the Assembly Judiciary Committee agenda for action this week: 
  • A.4619 - private right of action for improper debt collection. 
  • A.6932-A - mortgagee or mortgage servicing agent duty to maintain vacant and abandoned property, where foreclosure commenced for failure to maintain or where judgment of foreclosure obtained and mortgagor abandoned property. 

IN WASHINGTON

2016 Plan For Prosperity Reg Relief Agenda
ICBA has launched an updated 2016 version of
its "Plan for Prosperity" community bank regulatory relief agenda. Click here to read the full plan. It is a "common sense" legislative priorities designed for quick advancement in Congress, and builds on several policies passed last year. Those include eliminating redundant privacy notice requirements, expanding the 18-month exam cycle, and enhancing access to Consumer Financial Protection Bureau (CFPB) rural mortgage lender benefits. The 2016 version includes proposals to amend Basel III capital rules, better identify "systemically risky" financial institutions, expand relief from mortgage regulations, "recalibrate" bank oversight and examination, reform the CFPB, and more.
IBANYS will be advocating for the Plan for Prosperity in visits on the hill with members of the New York Congressional Delegation in late April during the Washington Policy Summit.

Other Federal Activity:
  • In its proposed 2017 budget the White House Office of Management and Budget placed the credit union tax exemption at $26.8 billion over 10 years. The estimate includes a projection of steady growth in the credit union industry, with the taxpayer subsidy growing from $1.7 billion last year to an estimated $3.6 billion by 2025.
  • The National Credit Union Administration board voted to finalize significantly looser limits on business lending by credit unions. Among other things, the final rule exempts participations in loans to non-members from the statutory 12.25% member business lending cap. It also eliminates explicit loan-to-value requirements, aggregate limits on construction and development loans and the requirement of a personal guarantee.
  • Federal Housing Finance Agency Director Mel Watt recently said the government's conservatorship of Fannie Mae and Freddie Mac poses risks that are "escalating," in part because of dwindling capital buffers that could lead either enterprise to seek funds from the Treasury in the event of an earnings crunch. Meanwhile, Fannie Mae and Freddie Mac reported a total of $4.6 billion will be sent to the U.S. Treasury next month. Fannie Mae's profits were $11 billion in 2015; Freddie Mac reported $6.3 billion in profits. 
  • The Federal Reserve issued a regulation required by Congress that lowers the dividend paid to banks with more than $10 billion in assets. 
  • The biggest US banks are bracing for a tougher round of stress tests from the Federal Reserve, which could crimp their plans for higher dividends and share buybacks. The two-part exam, which became an annual event in 2011, is designed to assess whether banks have enough loss-absorbing capital to keep trading through a shock to the system similar to the collapse of investment bank Lehman Brothers in 2008.
  • Ten of the twelve Federal Reserve Bank presidents were reappointed today to five-year terms that will begin on March 1, the Fed announced today. The reappointments affected every Fed bank except those in Dallas and Minneapolis, whose new presidents started their terms in September 2015 and January 2016, respectively.
     
INDUSTRY INSIGHTS

Watch for important news next week on IBANYS' new agreement with the New York Business Development Corporation and NYBDC's "Excelsior Growth Fund Program". . .

FDIC: Community Banks Net Income 
Up Four Percent
Community banks reported $5.1 billion in net income in the fourth quarter of 2015, a four percent increase over the fourth quarter of 2014, according to the FDIC's Quarterly Banking Profile.The Deposit Insurance Fund (DIF) increased from $70.1 billion in the third quarter to $72.6 billion in the fourth quarter, and the DIF reserve ratio rose from 1.09 percent to 1.11 percent -- and is on track to meet the mandated 1.35% by third quarter 2020.

Home Equity Update
Despite three years of solid recovery in home prices, a surprising number of homeowners don't realize what they've gained. According to a new survey by Omniweb, 57%  of homeowners said they housing money believe their home value has improved in the last three years, but the majority, 80%, underestimated the amount of value it has gained. Most of the respondents  underestimate what their home is worth and the amount of home equity that they could draw upon. Just over half of homeowners with a mortgage don't expect to gain any equity in 2016, despite rising home prices. Those who are taking money out of their homes are doing so at a very conservative rate. Total home equity nationwide has increased by nearly $1 trillion in just the last year, the highest since 2007, according to Black Knight Financial Services; borrowers, however, are not tapping it. Those who are taking out home equity lines of credit, are not withdrawing as much cash as is available to them. 

Meanwhile, refinance volume is now at the highest level in over a year.  Total mortgage applications for the week before last jumped 8.2% on a seasonally adjusted basis from the previous week, according to the Mortgage Bankers Association. Refinances were entirely behind the gains, increasing 16%. However, mortgage applications to purchase a home fell four percent from the previous week, although they are now 30% higher than the same week one year ago.

Home Resales Rose in January
They reached a six-month high, according to t he National Association of Realtors. Home sales increased 0.4% to an annual rate of 5.47 million units, highest level since July. Last month's sales pace was also the second highest since 2007. The median price for a previously owned home increased 8.2% to $213,800 from a year ago, and more first-time buyers entered the market.

The Consumer Confidence Index hit 92.2, in February, from a revised 97.8 in January, The Conference Board said. That's lower than the 97.3 expected by analysts, and the 
and the lowest level since July, according to Thomson Reuters. 
The monthly survey measures consumers' short- and long-term outlook for the jobs, incomes and business conditions.  While most consumers still felt current business conditions were "good" in February, a growing share (19.8%) felt that current business conditions were bad. Over the next six months, more consumers still expect business conditions to improve.

Free Quarterly Compliance Update Webinar 
Thursday, March 24 (2:00 - 3:00 PM)
Don't get caught unprepared-the Financial Accounting Standards Board (FASB) is expected to issue its finalized Current Expected Credit Loss (CECL) model in the coming months. And, CECL will fundamentally change the way our entire industry accounts for loan loss reserves (ALLL). Attend this free webinar to find out how smart and early planning can control the eventual pain of CECL.
Tune in on  March 24 to learn about:
  • Regulatory updates from this quarter
  • CECL overview and myths
  • Data collection requirements and expected challenges
  • The difference between the old and new CECL model
  • Next steps for financial institutions to consider

Banks CAN Control Health Care Costs
As a Forbes article (November 23, 2015) on healthcare innovators noted: "Patients with a wide array of non-emergency medical conditions obtain the care they need -- from diagnosis to treatment to necessary prescriptions -- quickly, conveniently and affordably." Click here to read the full article.

There IS a way for New York community banks to lower health care costs, boost employee benefits and help retain employees. The "My Wellness Resource Card" offers a  low-cost, non-traditional program to save time and money, and allow your bank to provide on demand health care from U.S. board-certified doctors. They'll provide diagnosis, treatment options and necessary prescriptions via unlimited telephone medical consultations. The program will provide discounts and significant savings on a variety of medical and dental products. Sponsored by My Wellness Resource, Inc. and IBANYS, this program is designed to improve productivity, decrease absenteeism and boost morale without straining your bottom line. It's a way to provide health care benefits, reduce cost and retain employees.  Click here  to learn more about this exciting new alternative, or visit  www.ibanys.net  for details/to enroll.

"Cure The Blue" Is Fighting Prostate Cancer 
-- Join The Battle! 
The Buffalo Bills Alumni Foundation and IBANYS have joined to lead the effort to raise funds and awareness regarding prostate cancer research in New York State. IBANYS' member bank Lake Shore 
Savings Bank is among the community banks strongly supporting the campaign: Its "Cure the Blue" ribbon pins are available for purchase for a donation at all eleven branches, and Lake Shore conducted a branch wide fundraising event earlier this fall. As Lake Shore's President & CEO Dan Reininga noted: "The exciting thing about this is that it's going to be a national campaign at some point. It's very exciting and we're very proud. It's what Lake Shore is all about - putting people first. Can YOUR bank or firm to join this effort?

 IBANYS Webinars Provide
Bottom Line Value! 

Community bankers are facing significant challenges. Bank officers, board members and employees know their responsibilities and potential liabilities are not about to diminish. Is YOUR bank doing everything possible to provide the type of information and tools necessary to prepare for the future?   IBANYS' webinars are specifically designed to meet the needs of community banks. They are effective -- and, cost-effective. Your officers, directors and employees are able to participate directly from their offices. There's a reason  why your industry and association peers are signing up in growing numbers...and why participation in IBANYS webinars has expanded dramatically over the past eighteen months.   Review all  our upcoming  programs by clicking the link below:
https://ibanys.fed.financialedinc.com/store/webinar

IBANYS SPOTLIGHTS:


T. Gschwender & Associates, Inc. 
T. Gschwender & Associates (TGA) is a diversified consulting company that has been providing services to financial institutions and businesses in the Northeast United States since 1984. Financial institutional clients include small community banks and credit unions with less than $100 million in assets to much larger regional institutions with over $5 billion in assets.  For financial institutional clients, they like to describe themselves as a highly sophisticated "Credit Department," able to handle all functions from initial borrower due diligence to collateral liquidation, and everything in between. The goal is to provide these services in a timely and cost effective manner, allowing clients to tap into resources they would not otherwise be able to employ internally. TGA c onsultants all have extensive banking and corporate management experience. Some have been with the firm since the company was started, and current staff provides a wide depth of experience, holding high level positions within banking, accounting, and regulatory institutions.  T. Gschwender & Associates, Inc. is a privately held company started by Tom Gschwender in 1984 and purchased by Bharpur "Bo" Singh on April 1, 2008.  Visit  http://tgschwender-assoc.com  or contact Bo Singh : (315) 701-1293,  e-mail:   bsingh@tgschwender-assoc.com.

  DID YOU KNOW. . .
  • Credit Unions are now a $1 trillion industry, competition for the same business and offering the same products as community banks. 

  • There are now 208 credit unions with more than $1 billion in assets - in 1991, when only 11 credit unions were this large. 

  • A 2006 U.S. Government Accountability Office study found that a bigger portion of credit union customers are upper-income compared to bank customers. 

  • Of the $8.6 billion credit union industry profits reported in 2012, three-fourths of those profits were concentrated in credit unions with over $500 million in assets, representing less than 6 percent of credit unions. 

  • An individual tax payer will pay more in taxes each year than all credit unions combined. 

  • Decades ago, mutual insurance companies and mutual savings banks, with ownership structures similar to credit unions, lost their tax exemptions, specifically in the 1940s and 50s and continue to operate, and thrive, while paying taxes.

  • Canada and Australia, in 1972 and 1994 respectively, repealed their credit union industries' tax exemptions.

New York community banks play a key role in our state and local economies. Help spread the good news among your customers, business and elected leaders and media!

Click here for quotes from Governor Cuomo and DFS Superintendent Lawsky extolling the performance and value of New York community banks.

Click here for the full NYS Study on community banking.

Click here to read IBANYS President & CEO John Witkowski's comments on the new tax changes and benefits for New York community banks as approved in the 2014-15 State Budget.

 

Click here for IBANYS' letter to the Editor of Consumer Reports Magazine correcting failure to mention community banks as an alternative to using "big banks."

_________________________________

John J. Witkowski
President and Chief Executive Officer
 
Stephen W. Rice
Director of Government Relations and Communications

Linda Gregware
Director of Administration and Membership Services 

William Y. Crowell, III
Legislative Counsel