The Louisiana Banker Newsletter

for March 28, 2024
 

A Banking Perspective

Written by Ginger Laurent, LBA
Chief Executive Officer
 

LBA advocates, educates and collaborates with and for Louisiana banks. Bankers guide our actions. A recent success story illuminates our partnership and I want to share it with you.

  • A banker who handles tax issues for his bank alerted LBA Director of Government Relations Joe Gendron that the Louisiana Department of Revenue had put a rule out for comment that potentially could have a negative impact on banks
  • Within a seven-day period, Joe talked with the Department of Revenue, tax experts and other associations that could have been affected by the rule; many had not seen the rule and all were concerned and started conversations of their own
  • The Department of Revenue decided to pull the rule

LBA staff assist in situations like this as a normal course of business. The job gets done, and most times, we don’t tell this story. We need to do a better job with telling the partnership story. Your guidance is so valuable; keep it coming!!

A recent example of bankers’ power of advocacy is your overwhelming response to a Call to Action distributed last week by Joe opposing two bills heard by the Louisiana House Commerce Committee. One bill was to allow Louisiana credit unions to handle operating accounts for public funds and the other was to allow the Louisiana treasurer to issue a state currency backed by gold and silver, essentially creating a payment system outside the banking industry. Your calls and emails to members of the House Commerce Committee was on target and powerful. The gold bill had a hearing and failed 16-2, and the credit union bill was voluntarily deferred. Your voice counts and truly makes a difference. See Joe’s Around the Capitol article in this newsletter for more details on the state legislative session.

As a way to highlight banker activity through the Association, LBA Communications Coordinator Jayme Foster compiled the 2023 LBA Year in Review. Click here to take a look—you had a full year!  

In 2008, LBA established a liquidity facility for Louisiana banks for banks to help each other if liquidity needs arise outside the normal liquidity outlets. LBA holds a ‘will call’ list comprised of banks willing to place deposits with those banks requesting assistance. There have been several instances when this program has been used. Every four years we update the list. There have been a lot of changes in the last four years; therefore, we want to make sure everyone knows about the list and can be added to the list if you’d like. We are starting new and the will call list will include the banks that let me know they want to participate by sending me an email at laurent@lba.org. Some of you have already done this for 2024; thank you.

Updated official FDIC signage should now be available through the FDICconnect Business Center. The following information on digital signage was provided from FDIC:

  • The “FDIC” in the FDIC official digital sign is to be displayed with a wordmark size of 37.36 x 15.74px in navy blue (hexadecimal color code #003256), with “FDIC-Insured - Backed by the full faith and credit of the U.S. Government” in Source Sans Pro Web font (regular 400 italic), 12.8px, displayed in black (hexadecimal color code #000000) lettering. If the official FDIC digital sign in these colors would be illegible due to the color of the background, the final rule requires the “FDIC” and the one line of smaller type to the right of “FDIC” to both be displayed in white (hexadecimal color code #FFFFFF). 
  • Also, for reference, the sign is to be displayed clearly and conspicuously in a continuous manner, near the top of the relevant page or screen, and in close proximity to the IDI’s name. The sign must be displayed on the (1) initial or homepage of the website or application, (2) landing or login pages and (3) pages where the customer may transact with deposits.

Enjoy banking!




 

Around the Capitol


Written by Joe Gendron, LBA Director of Government Relations 

The state legislative session began on March 11 and must end by June 3, and what an eventful session it has been thus far. In addition to other matters, in the last couple of weeks we have been involved in efforts to improve property insurance availability and affordability; combat financial crime; and to oppose bills creating a state-sponsored gold depository and expanding credit union authorities. Below is a rundown of bills on those topics.

Insurance-Related Bills

HB 613 by Rep. Gabe Firment and SB 295 by Sen. Heather Cloud would change Louisiana from a "prior approval" rating to a "file and use" rating, thereby allowing insurers to begin using an actuarily sound market rate while giving the commissioner of insurance 30 days to disapprove. HB 613 has passed the house and SB 295 has passed the senate. 

SB 323 by Sen. Kirk Talbot deals with good faith and fair dealing in insurance claims handling. This bill amends our current law to provide, among other things, that in a named storm situation the clock would start to run upon satisfactory written proof of loss and would give 60 days to pay residential catastrophe claims and 90 days to pay commercial catastrophe claims. This bill would also provide a cure period (i.e., the insurer must be given demand for the amount due plus up to 20% for attorney fees/expenses) before a bad faith claim can be filed or prosecuted. If paid by the insurer, the claim is over. Our understanding is that the bill does not change the 50% bad faith penalty for bad actors. It also establishes and clarifies the rights, duties and timelines imposed on both the policyholder and insurer to ensure swift resolution of the claims process. This bill has passed the senate. 

HB 611 by Rep. Gabe Firment and SB 370 by Sen. Adam Bass change Louisiana’s three-year insurance rule that prohibits insurers from non-renewing policies. We are told Louisiana is the only place in the world that has a three-year rule for homeowners' policies. It makes our state out of line with the rest of the insurance market. Both bills modify the existing homeowners' insurance policies with regards to deductibles while allowing insurance companies to manage their risk by removing up to 5% of their existing policies that are subject to the three-year rule. HB 611 has a further stipulation that no more than 5% of the insurer's policies in force in any one parish are included within their nonrenewal plan. Both bills also provide that, upon request of the insurer, the commissioner may approve the nonrenewal of more than 5% of the insurer's customers' policies in a given calendar year. After August 1, 2024, any new policies written would not be subject to the three-year rule under both of these bills. HB 611 has passed the house and SB 370 has passed the senate. 

All of these bills are supported by Insurance Commissioner Tim Temple and the Independent Insurance Agents and Brokers of Louisiana, among other groups. LBA also supports all of the above-mentioned bills. 

Combatting Financial Crime

Regarding LBA legislation, we have filed five bills, four of which are focused on the industry priority of combatting check fraud and payment card fraud. Below is a summary of those bills, all of which have passed the relevant house committees. 

Crime of mail theft and associated fraud—HB 202 by Rep. Kim Carver creates a new state crime of mail theft to help combat check fraud and identity theft. This new statute would also make it a crime to possess or sell stolen mail, as well as to steal or possess without authorization a mailbox key. Mail theft has become a major problem across the country and stolen mail is a major source of check fraud and other financial crime. Currently, there is only a federal mail theft statute. We are seeking a statute with significant penalties, especially for repeat offenders. 

Crime of skimming payment card data and possession of skimmers—HB 211 by Rep. Debbie Villio modernizes and strengthens the state crime law of skimming payment card information (R.S. 14:67.4) by enhancing penalties (especially for repeat offenders) and including as a violation of the law, possession of commonly used equipment for skimming when there is intent to defraud.  

Crime of check fraud—HB 214 by Rep. Debbie Villio modernizes and strengthens the state’s monetary instrument abuse statute (R.S. 14:72.2), which is the primary statute used by state and local law enforcement to charge perpetrators of check fraud. The bill updates the language in the statute to reference washed checks and it will enhance the penalties, especially for repeat offenders. This will help combat check fraud that is occurring when criminals present counterfeit or altered checks to a financial institution with intent to defraud. As mentioned above, we believe that a significant amount of check fraud is originating from checks stolen in the mail. 

Recovery on breach of warranty under Uniform Commercial Code—HB 232 by Rep. Nick Muscarello amends Louisiana’s Uniform Commercial Code provisions relative to presentment warranties and transfer warranties to clarify that when a bank is successful in its lawsuit to recover for an altered check based on a breach of warranty claim, the prevailing bank is entitled to recover its reasonable attorney fees as part of its expenses. This bill requires prior notice and opportunity to pay the claim before attorney fees can be recovered. Thus, the bank would need to give written notice of its warranty claim to the presenting/transferring bank and give them 30 days to respond before attorney fees could be recoverable. 

Bills of Concern

Gold depository bill—HB 714 by Rep. Raymond Crews would: (1) establish gold and silver as legal tender in the state; (2) authorize the state treasurer to issue gold and silver specie (coins) and to establish a state digital currency backed by gold and silver; (3) allow the state treasurer to facilitate the creation of deposit accounts for the purchase and sale of gold and silver (which we are told would be physically stored in Texas); and (4) enable the use of payment cards to purchase goods and services out of the deposit account by converting the value of the new gold or silver digital currency, which is backed by the actual gold or silver, to U.S. dollars by electronic means. 

This bill was heard in the House Commerce Committee this past Monday and was defeated on a 16-2 vote after tremendous advocacy by the Louisiana banking community opposing the measure. Thank you for your outreach to Louisiana legislators!

This misguided bill would have put the state of Louisiana into the business of banking by taking deposits and issuing debit cards to be used for purchases. Among numerous other concerns, this taxpayer-subsidized program would have incented the movement of money out of local communities and our state, which would reduce local deposits available for funding loans in Louisiana communities, thereby reducing the tax base and economic development opportunity in those communities. No state in the country has passed this type of state-run program. 

Credit union expansion of powers bill—HB 239 by Rep. Edmond Jordan would allow credit unions to act as fiscal agents of governmental entities, which means they could hold the operational deposit accounts of governmental entities. LBA strongly opposes this bill as it would be a big shift in public policy in Louisiana because currently the law is clear that only stock-based, federally-insured institutions (i.e., banks) can serve as a fiscal agent of a local government. 

The current law is good public policy because, unlike banks, credit unions do not pay taxes on income or capital at the federal, state or local level, and also are exempt from sales taxes. Also, unlike banks, credit unions are not subject to the Community Reinvestment Act, which requires banks to help meet the credit needs of the communities in which they do business, including low- and moderate-income neighborhoods. 

Credit unions with such a substantial tax exemption should not be given authority to hold additional taxpayer dollars, especially when they do not have bank-like CRA obligations to show that money is being properly lent in the community. 

This bill was scheduled to be heard in the House Commerce Committee this past Monday but it was voluntarily deferred by the author. It is now rescheduled for hearing next Tuesday, April 2.   

Louisiana bankers also have engaged in strong advocacy efforts opposing this measure. Thank you for your efforts on this issue and we may ask for your help again next week to continue to express your opposition to HB 239. 

We will keep you updated on all of the above bills and others throughout the remainder of the session. 

Thanks for your support! 




 

State Legislation Filed to Modernize the Manufactured Home Property Act

A bill is working its way through the Louisiana State Legislature that will modernize the Manufactured Home Property Act. This law sets forth the rules for how manufactured homes can change their classification from movable property to immovable property, which enables a lender to secure its loan with a mortgage that attaches to the land and manufactured home. In recent years, new forms of structures have been brought to market that are built in factories, but are difficult to visually distinguish from site-built structures. While existing law provided for the immobilization of manufactured homes, the current MHPA does not refer to or provide a definition of modular home.

In 2018, the Louisiana Legislature passed House Concurrent Resolution No. 102, which asked the Louisiana State Law Institute to study the law and to make recommendations regarding the classification of modular homes as movable or immovable property, and to develop the legal procedure for their attachment to land and securing them as loan collateral. The Louisiana State Law Institute’s Property Committee worked on a multi-year project which has culminated in Senate Bill 63, which is now moving through the Louisiana Legislature. 

SB 63 proposes to change the name of the MHPA to the Factory-Built Home Property Act to reflect its broader applicability. One of the most significant changes proposed by the legislation is to update the definitions in the Act to clarify that it covers factory-built homes, which includes manufactured homes, mobile homes and modular homes. A corresponding definition of factory-built home is being added to the law, which means a manufactured home, mobile home or a modular home. The definitions of manufactured home and mobile home currently in the law are also being updated and a new definition of modular home is being added to the law. These definitions included in SB 63 will be consistent with the definitions currently used in the Uniform Standards Code for Manufactured and Modular Housing. The uniform standards code in Louisiana establishes the standards with which all new manufactured and modular homes sold in Louisiana must comply. R.S. 51:911.23. The reason for this change is to treat all factory-built homes in a uniform manner. 

SB 63 also keeps the current default rule for the classification of factory-built homes as movables, with the ability to immobilize. A factory-built home can change classification from movable property to immovable property through the immobilization procedure. Section 1149.6 sets forth the requirements for the immobilization of a factory-built home. Immobilization can be accomplished by filing for registry a declaration of immobilization executed by the owner of the factory-built home in the conveyance records of the parish where the immovable to which the factory-built home is attached is located. Note that the declaration of immobilization must be filed in the conveyance records. See Section 1149.6(A). This is a change in the law. Current law allows for the recording of the declaration in either the mortgage records or the conveyance records. Note also that the legislation removes the requirement that the declaration be in authentic form. Of particular interest to lenders, the declaration will be required to contain the concurrence of the holder of any perfected security interest in the factory-built home if the security interest encumbers the factory-built home. See Section 1149.6(B)(3). This will require the owner of the factory-built home to contact the lender about the proposed immobilization, which will alert the lender and give the lender an opportunity to obtain a payoff of the loan in exchange for releasing its security interest or to obtain a mortgage interest in the factory-built home when it is immobilized and becomes immovable property.

Additional language is included in the bill that will clarify the rights of a holder of a previously perfected security interest in the factory-built home at the time of immobilization. A previously perfected security interest in the factory-built home at the time of immobilization has the same priority over existing and subsequent mortgages and other encumbrances on the immovable as would a properly and timely perfected purchase-money security interest in fixtures. See Section 1149.6(C).

SB 63 also proposes to update the requirements for deimmobilizing a factory-built home. An owner may want to deimmobilize the factory-built home in order to move it to another piece of land. The bill will require that a declaration of deimmobilization be filed in the conveyance records of the parish where the immovable is located. In addition, the declaration will need to include a concurrence of the holder of any perfected security interests, recorded mortgages or other real security encumbering the factory-built home. This requirement will enable the lender to be alerted that the owner is planning to move the factory-built home from the property and the lender may want to have its debt paid off. Alternatively, the lender may want to update its collateral documents as the factory-built home is converted from immovable property to movable property. 

If there are no third party rights in the factory-built home, including the absence of a mortgage or other encumbrance, the owner of the immovable property upon which a factory-built home is located may deimmobilize the factory-built home by detachment or removal. See Section 1149.7(E). Thus, if the factory-built home is not encumbered as loan collateral, the owner may physically move the factory-built home to a new location without the requirement of filing an act of deimmobilization. However, comment (a) to Section 1149.7 suggests that for clarity of title, the owner of an immobilized factory-built home who deimmobilizes it through detachment or removal would be wise also to file a declaration of deimmobilization.

SB 63 also addresses what will happen when ownership of land is transferred on which a non-immobilized factory-built home is situated and where the home is not encumbered as loan collateral, such as through a perfected Uniform Commercial Code Article 9 security interest. Section 1149.4 provides that it shall be presumed that any transfer of an immovable on which a nonimmobilized factory-built home is located includes all of the transferor’s interest in the factory-built home, subject to the rights of third persons in the factory-built home. This change is intended to provide an answer to a problem that arises where there is a very old mobile home situated on land and the mobile home was never immobilized and there is no title to the mobile home available. 

SB 63 also makes several conforming changes by updating the terminology used in other laws by replacing the term manufactured home with the term factory-built home. The legislation makes such changes to the definitions contained in the Louisiana Motor Vehicle Sales Finance Act and the Louisiana Secure and Fair Enforcement Residential Mortgage Lending Act.

We will continue to monitor this legislation as it progresses through the legislative process. Click here to see SB 63 engrossed by Sen. Jean-Paul Coussan. 




 

LBA & Bankers Advocate in Washington 

(above, from left) Jake Guidry of b1BANK, LBA CEO Ginger Laurent and Jayce Simpson of Community Bank of Louisiana visit during a meeting with Congressman Mike Johnson during a recent trip to Washington.




 

Social Media Connections

Written by Jayme Foster, LBA Communications Coordinator

 

There are no shortages of awareness campaigns in April. Below are online resources I found for several that might be worth adding to your social media calendar:

National One Cent Day is celebrated on April 1 each year. Below is the post I have scheduled that includes a link to the U.S Mint’s Penny information page.

  • April 1 is National One Cent Day—and no, this is not an April Fools’ joke! Did you know Lincoln first appeared on the penny in 1909? Get more fun facts about the one cent coin here: https://ow.ly/EU2E50R1N0X

The American Bankers Association and the U.S. Postal Inspection Service have released an infographic to combat check fraud that includes consumer tips. Below are the posts I scheduled with the infographic.

  • Did you know the U.S. Postal Inspection Service recovers more than $1 BILLION in fraudulent checks & money orders each year? If you mailed a check that was paid, but the recipient never received it, criminals may have stolen it. Learn more -> https://ow.ly/6ccH50R1MGM 
  • Did you know that if a fraudster steals a check that you mailed, they can use chemicals to “wash” the check allowing them to change the amount or make themselves the payee? Learn more -> https://ow.ly/6ccH50R1MGM
  • Looking for ways you can help protect your mail from being stolen? Click here to learn more -> https://ow.ly/6ccH50R1MGM 
  • Would you like to learn more about how to protect your checks from being stolen or washed? Learn more -> https://ow.ly/6ccH50R1MGM

The recent webinar recording for “How to Use ChatGPT to Improve Your Bank's Marketing” is available and free for LBA members—click here for more information.   

Check out these LBA educational opportunities—LBA Social Media & Banking webinar on Apr. 5 (click here for more information) and the next Marketing Peer Group meeting on Apr. 11 (click here for more information). 

Keep LBA’s hashtags in mind when posting to your social media accounts. We also want to highlight your programs and community projects by featuring your pictures. Send photos with captions to me at foster@lba.org to feature in LBA's newsletter. #LouisianaBanksSupportingLouisiana showcases the many ways Louisiana bankers are tirelessly working to help neighbors and local businesses. #FinLitLouisiana showcases the many financial literacy programs and community projects going on around the state. #LBAatWork features LBA members attending LBA events.

The LBA regularly posts resources on LinkedIn, Facebook and X that can be re-posted or re-tweeted on your own social media outlets to benefit your customers. To follow our posts on LinkedIn, click here; on Facebook, click here; and on X, click here. And make sure you tag LBA in your posts. We would like to help spread your good news to our audience and beyond.




 


 

Congratulations Bankers on Receiving LBA Service Awards!

(above, from left) Jason Smith presents Theresa Stevenson, both of Citizens National Bank, an LBA Service Award for serving the banking industry 22 years.

(above, from right) LBA CEO Ginger Laurent presents the following LBA Service Awards to Crescent Bank employees: Robbin Hardee for serving the banking industry 41 years; Gwen Hammer for serving the banking industry 46 years; and Jane Finnfor serving the banking industry 42 years, as Brian Donohue of Crescent Bank looks on.

(above, from left) The following Home Federal Bank employees received LBA Service Awards: Junior Cantu for serving the banking industry 45 years; Glen Brown for serving the banking industry 45 years; Violet Williams for serving the banking industry 45 years; and Mark Still for serving the banking industry 45 years.

(above, from left) LBA CEO Ginger Laurent presents Steve Lefort of State Bank and Trust with an LBA Service Award for serving the banking industry 46 years upon his retirement.




 

Education Column: Spring Scholarships Awarded

For more than 30 years, the Louisiana Bankers Education Council has offered scholarships to first-time college freshman. The eligibility criteria include: one of the student’s parents must be employed by an LBA member bank located in Louisiana; a minimum 3.0 grade point average or minimum ACT score of 20; and must be enrolling in a Louisiana college and majoring in a banking-related field. This year, LBEC was able to award 26 scholarships! Pictures from these scholarship presentations will be posted on our website soon. Click here to learn more about the first-time college freshman scholarship opportunity. 

LBEC was also able to present four scholarships to college students who participated in one of LBA’s Cookies and Careers in Banking events in 2023—click here to see pictures from the presentations. These students applied for the scholarship by writing an essay about their dream job and what opportunities in banking they learned about from the banker panel. Click here to learn more about this program.   

Our 365 to Rich Bank Shadow Day program also offered three scholarships to participating students and their schools—click here to see pictures from the presentations. LBEC awarded scholarships to students who participated in the program and made donations to their schools for use towards financial literacy education. These students applied for the scholarship by writing an essay about their dream job, what opportunities the banking industry could offer them and what options appealed to them. Click here to learn more about this program.  

These scholarships were made possible by the Louisiana Bankers Patrick Spencer/FISC Education Foundation. LBEC hosts three regional fundraisers each year to raise money to benefit the education foundation. This year they will host a TopGolf Golf Tournament in Baton Rouge on April 25 (click here for more information), a Bowling Tournament at Rock-n-Bowl in New Orleans on July 19 (click here for more information) and a Skeet Shoot in North Louisiana, date to be determined. Hope you can join us!




 

Leadership School Holds Opening Session of 2024

The first Leadership School of 2024 kicked off on March 12 with the opening reception at Jubans and the first session on March 13 at the LBA office. The school meets monthly for five months and completes Hogan Leadership Assessments and online coursework between the sessions. LBA will hold another Leadership School later in the year—click here for information and registration. Pictured below at the podium is Louisiana Bankers Education Council President Kathryn Richard of Bank of Zachary, who served as emcee of the opening reception at Jubans the evening before the first session. Click here to see the rest of the pictures from the opening session.




 

Peer Group Updates Since the Last Newsletter

All of the updates listed this month are member resources and will require you to log into the website to access. Click here to access the main Peer Group page. Once you are logged in, click on the specific group to see the resource listed.

  • Anti-Fraud/Security
    • Contact for regional security groups
    • ABA Check Fraud Claim Directory
    • Nacha's ACH Contact Registry, which includes thousands of check contacts
    • Treasury Department's Treasury Check Verification System (to catch canceled, duplicate or other problematic Treasury checks at the time of presentment)
  • COO
    • Peer group notes from March 5, 2024 meeting
  • Investment Professionals (link located on the Accounting Peer Group Page)
    • Peer group notes from Feb. 28, 2024 meeting
  • Marketing
    • LBA Social Media and Banking Webinar on Apr. 5
    • Hubspot.com's Resource Section with blogs, newsletters, podcasts and other marketing/growth resources 
    • 1440 Daily Newsletter 



 

Bankers Attend Real Estate Luncheon in Lafayette

The 2024 Real Estate Luncheon in Lafayette took place on March 15 at the Petroleum Club with approximately 150 bankers in attendance. The bankers learned about the current state of the residential and commercial real estate markets in the Lafayette area. The luncheon was sponsored by Evergreen Working Capital. 




 

Education Opportunities: April Education Calendar

Below is a list of LBA's upcoming education events—offered in several different formats and covering a wide variety of topics, all aimed at providing members with the opportunity to network with peers and stay current on important issues affecting a rapidly-changing industry. Click on any event title for more information or to register. To see LBA's complete education calendar, click here.
  

 


 

Information about Graduate School of Banking at LSU, Louisiana Tech School of Banking & Kentucky Fraud Academy

Click the graphics below to visit the program's website.

 


    


  




 

Loan Documentation Seminar Held

Loan Documentation was held March 27 at the LBA office with more than 30 bankers in attendance. The program was taught by Mike Allen of Three B’s Advisors. 




 

Bankers Attend Advanced Internal Audit Forum

Advanced Internal Audit forum was held March 12 at The LBA office. Mike Thomas and Darren Shuster, both of Crowe LLP, facilitated the forum. 




 

American Bankers Association Courses Offered Through the LBA

Today many bankers opt for online ABA classes or hold an ABA class in their bank. The key advantages of online or in-bank ABA classes include:

  • Customizationyou can have the class you want or need when you want or need it
  • Cost effectivenessyou can concentrate on the programs most valuable to your employees with no travel involved
  • Creditonline and in-bank ABA classes are ABA-credit courses that apply to diploma/certificate requirements; LBA will assist bankers in applying for diplomas/certificates at appropriate time 

We at the LBA will help you arrange and register for the courses you need. We will make sure you get the ABA credit. For in-bank training, we can possibly help you find an instructor in your area if you do not have an in-bank person ready to teach.

Most of the time, for in-bank ABA classes, it will take 10 or more to be able to hold the class effectively. If your bank has a core group of five or more employees, we can help you communicate the course offering to banks in your immediate market area to get the numbers where they need to be. 

Click here to see a complete list of ABA online and in-bank courses available through LBA on the online courses page in our website's Education section.

ABA online course prices are set by ABA and are listed on the website. In-bank classes are priced as follows:

  • Three-week class, $35 + book
  • 10-week class, $105 + book
  • 15-week class, $155 + book

Ask us to help you get started with ABA online or in-bank courses. We stand ready to set you up with online or in-bank courses whenever you’re ready.

Contact Ginger Laurent at laurent@lba.org or (225) 387-3282 for more information. We are excited to offer the ABA program in a more effective venue for you. Thank you for allowing us to do so.




 

LBA CEO Forum Held

The first session of the LBA CEO Forum was held Feb. 28 at the LBA office. Pictured are the CEOs in attendance with (back row, from left) Mark Folse facilitating the session. Also pictured is OFI Commissioner Scott Jolly who joined the group for a few minutes to talk to the group and answer questions.




 

March Newsletter is Sponsored by LED

 






 

Bankers Alliance Compliance Corner

Editor's Note: The following was submitted by Bankers Alliance. LBA, through its subsidiary Louisiana Bankers Service Corporation, has partnered with Bankers Alliance to give banks access to three compliance-related programs. Click here for more information.

  

Q: When is an anti-steering disclosure required? 

A: The anti-steering disclosure is not required by regulation to be provided to a customer. The disclosure is provided as a safe harbor to protect the bank from claims that the consumer was steered to a product. It may be required by investor or internal policy. Click here for a template for the anti-steering disclosure. 

 

Compliance Alliance offers a comprehensive suite of compliance management solutions. To learn how to put them to work for your bank, call (888) 353-3933 or email info@compliancealliance.com and ask for the membership team. 

 


Did you know that Home Mortgage Disclosure Act specifies when a loan should be reported as a cash-out refinancing rather than a refinancing?  

  • If the bank considers the transaction to be a cash-out when processing the application or setting the terms under investor or bank guidelines, the bank will report the loan as a cash-out refinancing. 
  • If there is no distinction made between a cash-out refinancing or refinancing, the bank sets the terms without regard to the amount of cash received by the borrower and the loan is not made using investor guidelines, the bank will report the loan as a refinancing.

 

Review Alliance is an independent group of compliance specialists offering banks deep-dive audits of their existing transactions, recommendations about program enhancements or guidance on future safety and soundness. Virtual Compliance Officer was added in 2020—a new shared service-model using bank-dedicated compliance officers; perfect for monitoring and guiding your bank remotely. To learn how to put them to work for your bank, call (833)-683-0701or email info@bankersalliance.org and ask for the membership team.

Click here to sign up for a membership demo

For timely compliance updates and resources, click here to subscribe to Bankers Alliance’s email newsletters.




 

Endorsement News: Louisiana Banks Receive $101,875 in Distributions from American Bankers Mutual Insurance

Editor's Note: The following article was submitted by LBA Endorsed Vendor ABA Insurance Services. For more information, visit their website at www.abais.com.

$100.8 million has been declared in total distributions since 1991.

American Bankers Mutual Insurance, Ltd., the reinsurer for the insurance program co-endorsed by American Bankers Association and LBA, declared a $3.5 million distribution to be shared by qualified ABA member banks insured through ABA Insurance Services, a member of Great American Insurance Group.

This is the 34th consecutive year that the industry’s leading professional liability and bond insurance provider has declared distributions to eligible ABA member banks, bringing the total to $100.8 million since the program’s inception. ABA member banks that purchase their directors and officers, bond, cyber, property and casualty and related insurance from this program are eligible to receive a distribution. 

“We are proud of this program and its major milestone achievement of more than $100 million distributed to participating member banks,” said Rob Nichols, ABA president and CEO. “Between the reliable, annual distributions and the high-quality insurance products available, we believe this to be a valuable member benefit and hope others will consider participating.”

“Year after year, for more than three decades, this program has provided eligible ABA members with meaningful distributions and a long-term, stable source of quality insurance and risk services,” said Gary Hemmer, chairman of American Bankers Mutual Insurance, Ltd., and chairman of the board of First National Bank of Waterloo in Waterloo, Ill. “We hope members will look closely at the ABMI offerings as they evaluate their insurance needs going forward.”

To receive a distribution, a bank had to be a member of ABA with qualifying directors and officers, financial institution bond, property and casualty and/or cyber insurance with ABA Insurance Services on Jan. 16, 2024. Distributions took place in February 2024.




 

Vendor Spotlight: Reprioritizing the Margin in 2024: How to Reinvent the ALCO Meeting

Editor's Note: The following article was submitted by HUB | Taylor Advisors. HUB | Taylor Advisors is an LBA Associate Member and you can find more information about them in LBA's Associate Member Resources Guide.

The rising rate cycle has been challenging for financial institutions for several reasons, with net interest margins and profit volatility being top of list for many bankers. Challenging waters lie ahead for institutions as the yield curve remains deeply inverted and the Federal Reserve signaling potential for monetary policy adjustments. The industry has experienced significant NIM volatility over the past five years, mainly due to a rapidly shifting interest rate environment. With rate cuts penciled in for 2024 and potential yield curve volatility, a fresh approach to asset-liability committees can help provide stability for NIM and profit going forward.  

Why Must We Reprioritize the NIM? 

Most institutions are heavily net interest income dependent, so net interest income drives the lion’s share of profitability. The median community institution’s net interest income dependency is 88%, meaning net interest income represents 88% of aggregate revenue. Since 2018, we have observed significant NIM volatility related to asset/liability mix changes, interest rate cycles and optionality.  Those institutions with higher net interest income dependency have felt more profit volatility.  

Reimagining the ALCO Process

The ALCO process has evolved over time as interest rate risk modeling has become more complex and regulatory expectations continue to rachet up. However, all too often we find that ALCO is simply an exercise in regulatory appeasement: reviewing reports, regurgitating ratios, checking the minimum regulatory boxes. Many times, ALCOs get caught overweighting certain areas: the economy, loan and deposit pricing, interest rate risk reports or investments. While regulatory appeasement and these items merit inclusion in ALCO, what is often missed is utilizing ALCO as a profit center. What if decisions and strategies at your ALCO improve and/or stabilize profitability? Can effective strategies move the NIM by 10 basis points? What could that equate to in dollars? For a $500 million institution, NIM improvement of 10 basis points can translate to $500,000 in pre-tax income.  

Net interest margin is the ultimate scorecard for your ALCO and we have found strong correlations between highly effective ALCO processes and higher, stable NIMs over time. When you think about your ALCO membership, the ALCO meeting may very well be the most expensive meeting for your institution. Not just from the human capital expense, but also from the strategies that can make or lose money for your institution. Balance sheet management varies greatly from other approaches to ALCO. Interest rate risk management and asset liability management are terms often used interchangeably with balance sheet management, but in reality, these approaches produce very different outcomes over time. Balance sheet management is the most comprehensive of the three and is where position assessment and strategy execution meet. Assessing risks and opportunities through the lens of the entire balance sheet helps to craft unique strategies to protect and to expand the NIM. For example:

  • Are you growing market share with your loan pricing strategy? Do you have a loan strategy? 
  • How do loan structure and pricing decisions impact interest rate risk and liquidity?
  • What effect do deposit pricing strategies have on marginal cost of funds?
  • How can you utilize your investment portfolio to manage liquidity, interest rate risk and expand income?
  • How does robust capital stress testing impact contingency funding planning?  

These are all examples of topics often missed at average ALCOs that cost your institution basis points at a time when institutions desperately need more basis points for earnings. Your peers with highly effective ALCOs are leveraging their meetings, having these discussions and executing strategies that come from each session.    

HUB | Taylor Advisors’ Take

Interest rate volatility in 2024 will lead to more net interest margin volatility. As such, your ALCO approach and process will be critical for ensuring budget and stretch goals are achieved. Many institutions may have the talent internally to run reports and aggregate an ALCO packet; however, an independent facilitator can bring powerful perspectives, best practices and strategies to squeeze basis points out of your balance sheet. The ALCO packet is not just a document that gets approved by the board of directors, but rather a unique word problem that deserves custom crafted strategies for risk management and profitability to optimize your balance sheet!




 

Banks & Bankers in the News

Banks in the News

The First Bank Donates $1 Million To Historically Black Colleges & Universities

The First Bank recently donated $1 million to 12 historically black colleges and universities across Mississippi, Louisiana, Alabama, Georgia and Florida. Recipients in each state include Jackson State University, Tougaloo College, Southern University and A&M College, Southern University at New Orleans, Dillard University, Xavier University of Louisiana, Bishop State Community College, Albany State University, Savannah State University, Clayton State University, Florida A&M University and Edward Waters University. As one of the largest certified Community Development Financial Institutions in the nation, The First Bank has awarded over $70 million in community investments to support economic growth and job creation since 2010. In the last year alone, the bank has donated over $1.6 million to deserving charities including schools, children’s homes, food banks, hospitals and local housing initiatives.

  

Bankers in the News

First National Bankers Bankshares


Davis   Evans   Hartnagel  Harvey 
       
Honore’
Johnson  Livingston  Marks 




Michel 
Poore 
Rachal 
Sofranko 
       
White        

First National Bankers Bankshares, Inc., has announced the following promotions: Chad Davis (not pictured) has been promoted to senior vice president and information technology support manager. Stephanie Davis has been promoted to officer in client services. Lorie Evans has been promoted to administrative support specialist II. Justin Hartnagel has been promoted to assistant vice president in IT audit services. Kayla Harvey has been promoted to assistant vice president in the finance division. Hannah Honore’ has been promoted to officer and ALM analyst I in the ALM Division. Jessica Johnson has been promoted to vice president in payment operations. Holly Livingston has been promoted to ALM specialist I in the ALM Division. Hank Marks has been promoted to senior vice president in investment sales. Ross Michel has been promoted to officer in the ALM division. Rebecca Poore has been promoted to administrative support specialist II. Kerri Rachal has been promoted to vice president in bank operations. Hester Sofranko has been promoted to officer of FNBB Services Corporation. Brooklyn White has been promoted to payment operations specialist II.

 

United Mississippi Bank 


 
Ellard 
Stahlman  Roberts  

UMB has announced the following elections and promotion. Mike Ellard has been elected to the bank’s board of directors. Deborah Stahlman has been elected to the bank’s board of directors. Adam Blake Roberts has been promoted to assistant BSA officer and assistant BSA Office of Foreign Assets Control officer. 

UMB has also announced it will be opening a full-service branch in New Roads. The new branch, located at 1740 False River Road, will temporarily operate out of a modular building adjacent to the construction site of the permanent branch building. 

 



 

Hashtag Highlights: Franklin State Bank & JD Bank  

LBA uses hashtags to promote the good news of banking on social media. Keep LBA’s hashtags in mind when posting to your social media accounts. Whether it’s a community project, a financial literacy program or a selfie from the last LBA event you attended, these hashtags can help spread your good news to LBA’s audience and beyond. #LBAatWork features LBA members attending LBA events and this one comes with a monthly giveaway. Tag LBA, use #LBAatWork, and if your post is featured in the newsletter, you get a free webinar recording of your choosing.  

#LouisianaBanksSupportingLouisiana showcases the many ways Louisiana bankers are tirelessly working to help neighbors and local businesses. (above) JD Bank recently presented a sponsorship to the Women of Wisdom, an organization that empowers women in Acadiana with opportunities for education, empowerment, fellowship, unity and advocacy. 

#FinLitLouisiana showcases the many financial literacy programs and community projects going on around the state. (above) Franklin State Bank recently taught seniors at Family Community Christian School about a variety of financial literacy topics using FDIC’s Money Smart resources. Brad Chapman of Franklin State Bank is pictured speaking to FCCS students during a reality fair where the students were able to form a budget and see how far money would (or wouldn’t) stretch. 




 

Obituary: George "Bub" Sehon

Funeral services for George “Bub” Vance Sehon, age 91 of Marion, were held on March 7, 2024, at Farmerville Church of Christ with Bart Miller officiating. Interment followed at Roark-Allen Cemetery under the direction of Farrar Funeral Home.

Mr. Sehon was preceded in death by his parents, Clarence W. and Clara Little Sehon; sister Annie Jo Dugas and husband Grady Dugas; sister-in-law Sherry Denton Farrington and husband C. A. Farrington; and brother-in-law Mickey Denton.

Mr. Sehon was born Feb. 25, 1933, and passed away March 5, 2024, after a short illness. He is survived by his wife of 69 years, Peggy Denton Sehon; brother-in-law, Lane Denton (Louise); sisters-in-law, Pam Denton and Debbie Williams (Robbie); nieces and nephews, Steve Dugas, Dr. Rene Dugas, Ken Dugas, Dr. Chris Dugas, Denise Spence, Brad Farrington, Brenda Farrington, Lisa Harper, Terri Whittington and Mandy Kennedy.

Mr. Sehon was born in Haile, but later became a lifelong resident of Marion where he attended and graduated from Marion High School. He played basketball, but preferred baseball and took an interest in it at a young age. He also took interest in a girls basketball game where a talented player caught his eye. Peggy Denton of Farmerville High School scored 42 points against Marion. Mr. Sehon was so impressed, he was determined to meet her. Little did he know this meeting would introduce him to the love of his life.

Bub and Peggy married on May 29, 1954, while he was attending Louisiana Tech University. Before graduating from Louisiana Tech, he was drafted into the Army and was stationed at Fort Benning, Ga. After returning home from the service, he resumed his education and graduated from Louisiana Tech.

Mr. Sehon began his career with Marion State Bank in 1957 with only three employees and under the guidance of his father and former President and CEO C. W. Sehon. He completed the Graduate School of Banking at LSU in 1964. He has served on the bank’s board of directors since 1965. He started with the bank as a clerk and then held officer titles as cashier, vice president, executive vice president, subsequently being promoted to president and CEO in 1982. He held this position until 2020 at which time he became chairman of the board. Click here to see a video posted by the bank about his service to the bank. 

He was also active for many years in several civic and professional organizations.

Pallbearers were Joel Taylor, Bruce Matte, Robert Lane, Ben Jones, Jake Edwards and Tommy Barker. Honorary pallbearers were Scott Jones, Johnny Dollar, Kenneth Auger, Bobby Hobson, Lee Brantley and Dusty Gates.