IBANYS Weekly E-Newsletter |
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The President's Message
By John Witkowski, President & CEO
A reminder: Our new address is:
Independent Bankers Association of New York State
194 Washington Ave, Suite 420
Albany, NY 12210
Community banks reported net income growth of 19.6% in the third quarter from the same period last year, according to the FDIC's Quarterly Banking Profile. Community banks reported:
- Annual net income growth of $1.4 billion.
- The quarterly net interest margin rose 6 basis points from the previous quarter to 3.31%.
- An 11.7% increase in net interest income from a year ago.
- A 9% decrease in noninterest income from last year because of a decline in net gains on loan sales revenue.
- Provision expenses declined 83.5% from a year ago but increased 427.9% from the second quarter.
- Total assets increased 2.1% from the previous quarter on 6.8% growth in securities holdings.
- Loan and lease balances declined 0.2% from the second quarter.
- Deposit growth of 2.6%, up from 2.1% in the second quarter.
- The noncurrent rate for total loans dropped 4 basis points to 0.65%, while the net charge-off rate declined 4 basis points to 0.06%.
Community bank equity capital grew 2.2% during the quarter, while the leverage capital ratio rose 11 basis points to 10.25%. The overall banking industry reported a 35.9% net income increase from a year ago on further economic growth and improved credit conditions. The DIF balance rose $1.4 billion from the second quarter to $121.9 billion, and the reserve ratio remained stable at 1.27%. During the quarter, three new banks opened, including one community bank; 39 merged with other FDIC-insured institutions; one bank ceased operations; and none failed. . . .As we move into 2022, many believe it will be difficult for banks and credit unions to boost revenue. Today's newsletter includes an interesting blog from Strategic Resource Management (SRM) that focuses on Identifying Revenue Opportunities in 2022.
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OCC announces CRA evaluation schedule for Q1, Q2. The OCC has released its schedule of Community Reinvestment Act evaluations to be conducted in the first and second quarters of 2022.The CRA evaluation schedule is available on the OCC’s website.
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OCC: Agencies Issue Joint Statement on Crypto-Asset Policy Initiative and Next Steps
The federal bank regulatory agencies issued a statement summarizing their interagency “policy sprints” focused on crypto-assets and providing a roadmap of future work related to crypto-assets.
In particular, the statement describes the focus of the preliminary work conducted through the sprints undertaken by the agencies. It summarizes the agencies’ plan to provide greater clarity throughout 2022 on whether certain crypto-related activities conducted by banking organizations are legally permissible, and related expectations for safety and soundness, consumer protection, and compliance with existing law and regulations.
The emerging crypto-asset sector presents potential opportunities and risks to banking organizations, their customers, and the overall financial system. The interagency sprints quickly advanced and built on agencies’ combined knowledge, which helped identify and assess key issues related to potential crypto-asset activities conducted by banking organizations.
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The Cybersecurity and Infrastructure Security Agency and FBI have issued a cybersecurity reminder for public and private sector organizations to remain vigilant against ransomware and other cyberattacks during the holiday season. The advisory notes malicious cyber actors often take advantage of holidays and weekends to disrupt critical networks and systems. FYI: ICBA offers more information on resources to help community banks bolster cyber and data security, including Sheltered Harbor to add a layer of protection against malware, .BANK to secure customer relationships, and more.
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Federal regulators’ new cybersecurity notification rule:
Here are the key takeaways from the rule:
- The federal banking regulators have adopted a final rule mandating new reporting requirements in the wake of cyberattacks and other computer-security incidents that result in harm to the confidentiality, integrity, or availability of an information system or information processed, stored or transmitted by the system.
- The rule requires banks to report covered cyber incidents to their primary federal regulator as soon as possible, and no later than 36 hours after determining an incident occurred. Bank service providers will also be required to notify affected banks as soon as possible after determining a computer-security incident has materially disrupted or degraded, or is reasonably likely to materially disrupt or degrade, services provided to banks for four or more hours.
- Banks and bank service providers should now be reviewing their threat detection capabilities and response protocol to ensure compliance with the new reporting requirements, which has a compliance date of May 1, 2022.
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National Bank of Coxsackie announces new CEO
Congratulates James W. Warren on Retirement
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National Bank of Coxsackie announced the retirement of CEO James W. Warren after 25 years with the Bank. John A. Balli was named CEO effective October 18th, 2021.
National Bank of Coxsackie is an Independently owned local Community Bank. They have been around since 1852 and currently operate 8 branches across Greene, Albany, and Schoharie Counites.
IBANYS congratulates and welcomes John Balli, and wishes Jim Warren well as he concludes a distinguished career. Thanks, Jim, for your strong support of IBANYS and the New York community banking industry.
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Mike Pollock, retiring Fulton Savings Bank President/CEO |
After 41 years of dedicated service at Fulton Savings Bank, Mike Pollock will be retiring as the bank’s President & CEO on December 31, 2021.
We would like to congratulate Mike Pollock on his retirement after 41 years at Fulton County Savings Bank! What a great career and we wish you all the best!
Thank you for your support of IBANYS!!!
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Mark your Calendars and Save the Dates - IBANYS 2022 Meeting Schedule
- December 7 - Human Resources - ZOOM
- February 8 - Compliance - ZOOM
- April 4-5 - Mid-Year Conf. - ZOOM
- April 11 - Directors - ZOOM
- May 3 - Lending - (tentative) in-person
- June 13-15 - Annual Convention - Turning Stone Resort & Casino - in-person
- July 12 - Human Resources Update - ZOOM
- September 12-13 (tentative) - West Point - in-person
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Human Resources Update
December 7, 2021
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This program will provide updates on federal, New York State and New York City employment laws. Topics will include COVID-19 vaccination issues; COVID-19 leave laws; the New York HERO Act, New York’s recreational marijuana law and guidance; and addressing the workforce shortage.
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ASSOCIATE & PREFERRED PARTNERS |
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IBANYS Welcomes our newest Associate Member
GLOBAL BANK SOLUTIONS
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Global Bank Solutions (GLBS) is a full service compliance consulting and audit firm that provides support to Banks, Credit Unions, and other financial institutions. GLBS is headed up by a former Federal bank examiner and also provides BSA, IT, and other services to meet your needs.
To learn more click the link:
Dan Cherner, President & CEO
(833) 334-5622
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2022 Loan Growth: Finding It and Managing the Risk |
Tuesday, December 7th at 2:00 pm ET
Duration: 45 minutes
Cost: None
Many banks saw negative average loan growth in 3Q 2021 and the challenges are still with us —potentially leading to further trouble for net interest margins and growth strategies. What’s to be done? Join this timely webinar as Arne Monson of Holtmeyer & Monson and David Ruffin of IntelliCredit discuss current lending trends, hot opportunities and more. You’ll learn about sectors and niches to focus your lending efforts on — and how to manage loan growth in new areas without incurring inordinate risk. We’ll also share how banks can transfer PPP loan success into a permanent government-guaranteed lending program, covering how to get started, best practices and the right prospects to target. This is a don’t-miss event.
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QwickAnalytics Quarterly State Performance Trends Report has been updated for Q3.
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By Paul Davis, Dec 1, 2021 9:41:00 AM
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It will be difficult for banks and credit unions to boost revenue in 2022 – many will need to be more innovative than ever to add customers, book loans, and bring in fees.
Interest rates should remain low next year, and competition will intensify as loan demand returns. Customers’ shifting preference for digital channels will require tech investments that will further pinch bottom lines.
Financial institutions are looking at niche businesses, acquiring loan portfolios, and creative revenue strategies to offset those pressures. Here’s a look at some tactics being employed.
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Join us in San Antonio for the largest annual convention for community bankers! Held Feb. 27 - March 3, 2022, ICBA LIVE is the best place to renew connections and make new ones.
Join together with ICBA and your industry colleagues from across the nation to celebrate our industry in person.
Our industry is ever changing: Learn about new trends and sharpen your knowledge in your area of expertise.
Explore the city take a walk across the River Walk, enjoy the vast selection of food and drink and take in the gorgeous San Antonio weather.
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Fed Taper Tactics
A review of past QE wind-down strategies.
By Jim Reber
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Maybe the U.S. economy has improved to the point where further quantitative easing isn’t as critical to the Federal Reserve’s policy of “accommodation.” It certainly looks like the Fed has some further work to do on the portion of its mandate that relates to price stability, given the overshoot of its inflation goals. Fed Chairman Jay Powell said as much as early as this August, when he commented that “substantial further progress” has been achieved, and a month later stated that “moderation in the pace of asset purchases may soon be warranted.”
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An organization representing 4,000 housing operators urged the New York State Legislature and Governor Hochul to allocate at least $2 billion for the Emergency Rental Assistance Program in order to address thousands of renters who remain in arrears. Read More
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Nearly $1 billion intended to cover back rent for New Yorkers who suffered economic hardship due to the pandemic still hasn’t made it into the hands of tenants six months after the program launched. The state has warned that the $2.4 billion set aside for rent relief would likely not cover new applicants and mostly closed applications. The hold up, state officials say, is partly linked to missing paperwork. https://apnews.com/article/health-new-york-c364f519ddf0b00074d6dca8bf47b227
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A new poll shows Governor Hochul with a commanding lead in the Democratic gubernatorial primary. She had more than twice the support of her nearest rival, NYS Attorney Letitia James, the New York Post reports. Hochul led James 40 %to 17 % among primary voters, with 7% supporting the potential bid of Mayor Bill de Blasio or Public Advocate Jumaane Williams, who is a candidate. Rep. Suozzi (D-L.I./Queens) announced his candidacy this week after the poll was completed. About 30% of Democrats were undecided.
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Amid all the talk about the Democratic gubernatorial race, Republican Rep. Lee Zeldin (R-L.I.) believes he can ride the same political wave as fellow Republican and Virginia Governor-Elect Glenn Youngkin to flip control of state house next year for the first time since 2002. Zeldin believes he can draw votes in Democrat-heavy New York City by appealing to parents who feel their education choices are being taken away, as Youngkin did in Virginia. https://nypost.com/2021/11/26/lee-zeldin-plotting-youngkin-like-gop-surprise-over-democrats-in-2022/
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ICBA President & CEO Rebeca Romero Rainey thanked community bankers for their grassroots efforts and urged them to continue that track record as ICBA (and IBANYS) target the CFPB’s Section 1071 small-business data collection and reporting proposal. Dodd-Frank Section 1071 requires financial institutions to collect and report data on credit applications from certain small businesses, which would restrict access to credit, raise borrower privacy concerns, and require costly new third-party relationships. Despite the proposal’s significant potential impact, the CFPB is proposing to exempt only institutions that originate fewer than 25 loans per year. Because the CFPB does not consider form letters, ICBA offers a comprehensive guide to help community bankers develop, format, and submit truly personalized comments that will maximize our grassroots impact. By using ICBA’s guide to submit comment letters, community bankers can help achieve more robust community bank exemptions that will support continued lending to small businesses in our local communities. ICBA has strongly advocated a robust community bank exemption to the reporting requirements and said the proposal’s exemption for those that originate fewer than 25 loans per year is far too narrow. While ICBA and other organizations have advocated an extension, community bankers currently have until Thursday, Jan. 6, to use the ICBA guide to submit comment letters. USE ICBA'S GUIDE TODAY
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Treasury Secretary Yellen told Congress she continues to support the widely opposed IRS bank reporting proposal. While Testifying before the Senate Banking Committee, she said policymakers have narrowed the proposal—which remains in play even after ICBA and community bankers worked to keep it out of the House-passed reconciliation bill. The hearing followed a report that Senate Democrats are working to include a narrowed IRS reporting plan in their version of the reconciliation bill. ICBA’s Paul Merski noted the plan is “fundamentally flawed” no matter how it is tweaked. With the IRS reporting plan still alive in Washington, ICBA is encouraging community bankers to continue weighing in on the reconciliation debate with ICBA grassroots resources: Opposing SBA 7(a) direct lending. Urging Congress to oppose the IRS reporting plan. Rallying consumers against IRS bank reporting.
- The Biden administration is reportedly considering Richard Cordray for the top banking regulator position at the Fed. Cordray led the Consumer Financial Protection Bureau from 2012 to 2017. He is currently COO of Federal Student Aid at the U.S. Education Department, overseeing the $1.6 trillion student-loan program. Cordray is a close ally of both Senate Banking Chairman Sherrod Brown (D-OH) and Senator Elizabeth Warren, who was the CFPB’s first Director.
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The Federal Housing Finance Agency increased the maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac in 2022. The limit for one-unit properties in most parts of the country will rise to $647,200, an increase of $98,950 from $548,250 in 2021. The maximum loan limit will be $970,800 in areas in which 115 percent of the local median home value exceeds the baseline loan limit.
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FDIC Chair McWilliams said the agency is exploring whether stablecoins should be covered by deposit insurance. She cited interagency efforts on regulating digital assets and said FDIC staff are working through how deposit insurance would apply to different stablecoin arrangements. Policymakers are debating how to regulate stablecoins and other digital assets. A President’s Working Group report recommended requiring stablecoin issuers to be insured depository institutions, while Federal Reserve Governor Christopher Waller has expressed skepticism about imposing the full banking rulebook on stablecoin platforms. ICBA’s comment letter noted a coordinated regulatory approach to digital assets could help address risks, dispel confusion in the marketplace, and prompt more community banks to explore digital asset products and services to address customer needs. Federal banking regulators said they plan to provide greater regulatory clarity on crypto-related activities next year, while the OCC issued an interpretive letter with guidance on stablecoins and other digital assets.
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Negotiations in the Senate over expanding the state and local tax deduction hit a new snag with two key lawmakers at odds over whether the plan should raise revenue for other spending priorities in President Joe Biden's economic agenda. https://www.bloomberg.com/news/articles/2021-11-29/salt-cap-talks-falter-as-sanders-menendez-negotiate-details?mkt_tok=ODUwLVRBQS01MTEAAAGBD-mX_cMhNjlh1Ucf7wlQ5IkA3nPQnQnmiPHuJ8GpZOvWT2VTdqWafo2Gu25GGHK7rs58C99p5EGrUuWNF6qQCblNi77nT50nBtB0kEM4ihrf
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Five Democratic senators reportedly do not support President Biden’s nominee Saule Omarova’s to lead the Office of the Comptroller of the Currency, raising fresh doubts about her confirmation. Axios reported Senate Banking Committee members Tester (D-Mont.), Warner (D-VA.), and Sinema (D-AZ.) told Chairman Sherrod Brown (D-OH) and Biden administration officials they oppose the nomination. Sens. Hickenlooper (D-CO.) and Kelly (D-Ariz.) also are also reportedly opposed, as are all Senate Republicans. ICBA and a coalition of state community banks groups, including IBANYS, co-signed a letter of opposition.
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