April 2020 Oklahoma Banker

Unsettled times OBA President and CEO Roger Beverage has to look back on his own history to find anything comparable to what everyone is currently going through.

PAGE 3

Stimulus checks questions

The newspaper of the Oklahoma banking industry

April 2020

We’re sure you have plenty of questions about the impending stimulus checks. Luckily, Compliance Alliance has some answers!

PAGE 21-22

Pandemic communications Like much of the country, the Oklahoma Bankers Association has embraced Zoom as the communications tool of choice during the COVID-19 pandemic crisis. Each Tuesday, the OBA hosts a call for bankers to join in which several issues related to banking and the pandemic are addressed, such as the Paycheck Protection Program. The weekly calls have also included such guests as Gov. Kevin Stitt, Sen. James Lankford, Rep. Markwayne Mullin, Oklahoma State Banking Commissioner Mick Thompson and several officials from the Small Business Adminstration. Join the next call by shooting an email to Jeremy (jeremy@oba.com) or Megan (megan@oba.com) and they’ll get you on the list!

INSIDE Banker Spotlight 24 Banking Briefs 2 Calendar 7 Education 4-5

#BankersOfOklahoma 16 Legal Briefs 11-14 Oklahoma Bankers 8 Resource Directory 23

(MAILING LABEL)

Implementing the CARES Act – successes, frustrations We’re almost a week into the process of implementing the CARES Act, and still there seem to be more questions than answers.

“We have been trying to keep our member banks up to date on various aspects of the PPP (Paycheck Protection Program),” said Adrian Beverage, OBA’s chief of staff. “It just seems like once we think we have an answer, the next set of FAQs or the next form we get have been changed.

I know some of our banks are as frustrated as we are, but we are keeping current as best we can.

Nothing is more important to our banks than taking care of their customers, and nothing is more important to us than taking care of Oklahoma banks and their employees.

“For example, on Tuesday, April 7, the SBA provided guidance about the disbursement of a PPP loan. We were told that the first disbursement had to occur five days after the loan was approved. The next day, the set of FAQs was published amending the earlier guidance to require See CARES ACT on Page 9

2

Oklahoma Banker

April 2020 n BANKING BRIEFS

Professional member scholly available

Each year, the Oklahoma Bankers Association awards a $1,000 scholarship to an incoming freshman who has a parent, grandparent, sibling or spouse who is a Professional Member of the Association.

Visit OBA.com for the application for the 2020 scholarship application. Applications are due April 17, 2020.

SBA approves all Oklahoma counties for disaster relief loan program

In response to COVID-19, all 77 Oklahoma counties have been approved for low-interest disaster loans from the U.S. Small Business Administration.

These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact.

More information is available at SBA.gov/disaster.

Honor grads Honor graduates from the 2019 OBA Operations School, held in November, were recently recognized. In the photo at left, honors grad Matthew Rowe holds his plaque. Rowe is with City National Bank in Tulsa. He is joined by the OBA Director of Education Janis Reeser and school chairman Ryan Webb. Above, honors grad Mary Murray displays her award plaque. Murray is with First Fidelity Bank in Oklahoma City.

She is joined by bank EVP Steve Hart as well as Reeser.

Join an OBA Committee

NOW is the time to get involved in your Association, and one good way to accomplish this is to join one of our committees!

We are now taking names for those interested in our committees for the 2020-2021 year. By participating with the group three to four times a year, you learn more about your profession, meet other bankers and share ideas.

Visit OBA.com to download an interest form or contact Janis Reeser at janis@oba.com!

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Oklahoma Banker

April 2020 n EXECUTIVE NEWS

3

Nightmare on main street

There I was, minding my own business, with thoughts of the upcoming anniversary of my heart attack. Happy thoughts they were because I was so very blessed to have survived it.

That memory brought back feelings of gratitude and praise that I lived to celebrate my 74th birthday.

It was the best one ever, as you might imagine.

Now I’m facing the reality of birthday number 75 while at the same time trying to understand the enormity of the current pandemic and what it means.

Today’s reality is like nothing I’ve ever experienced or even imagined.

When I served as the director of banking in Nebraska 35 years ago, I thought things in general were

When I say it’s “personal,” I don’t just mean the pandemic’s economic impact on our savings and 401(k) accounts. But its impact extends to matters of life and death, to which many of us may have (unknowingly) been exposed, perhaps for the first time.

Roger Beverage OBA PRESIDENT AND CEO roger@oba.com

bad. The state’s economy collapsed.

Main streets across the state were staggered by the economic blow to the state’s main industry (food production). Many farms and small businesses collapsed. As a result, I was forced to close a lot of banks.

I was also the receiver for a failed industrial bank, the deposits of which were not insured as everyone had been led to believe. Its customers were mostly senior citizens and retirees. People were frustrated and angry about the state’s ineptness, followed by the state’s denial of any legal responsibility for the losses incurred by the depositors as a result of the entity’s collapse.

I sent people to jail. I helped impeach the state’s attorney general, who was a friend of mine. Some of the banks I was forced to close were owned by other friends, people I had worked with and for when I served as executive vice president of the Nebraska Bankers Associa-

tion. We had 24-hour protection by law enforcement agencies. It was not a good period in that state’s history.

The collateral damage incurred during that period, and its negative impact on the business to which I had and have dedicated my professional career, was unbelievable.

It was also unprecedented for my generation. We’d never seen that kind of adversity before and we didn’t quite know what to do about it.

Standing by, watching banks being sold or liquidated, because of the actions I’d taken by closing them, was painful. I watched what was happening to individuals, to small farmers and other businesses that supported them. It was and remains well beyond my ability to adequately describe, either then or now. There was no real understanding of what it all meant.

But we were Nebraskans. We were Americans, by George, and we would not be beaten. We would not allow our state, or our country to falter. We would be back, stronger than ever. And, after a few years, we were for the most part.

Fast forward to early March 2020 – just a few short weeks ago.

Main street and small businesses in general were staggered again – worse than ever before – even after the

9-11 attacks or the near-meltdown of the global economy. It is worse than anything I’ve previously experienced, and this time it was personal – impacting every individual in our state and across this grand country.

When I say it’s “personal” I don’t just mean the pandemic’s economic impact on our savings and 401(k) accounts. That’s bad enough.

But its impact extends to matters of life and death to which many of us may have (unknowingly) been exposed, perhaps for the first time.

If you’re older (essentially 65plus) and you have some underlying health issues, you are deemed to be in the most at-risk health category of all.

Hmm. 74 years old; the proud owner of four stents in my left coronary artery. I look in the mirror and conclude, “Yep, we have a winner here!” Marvelous.

So, my wife and I have been self-quarantined now for more than three weeks, and we’re still friends. I think. There’s a house that’s been under construction across the street. Other than watching various laborers arrive and depart daily, it’s about the only movement or activity we see in the neighborhood.

And the accompanying silence, due to the mandate we all stay Continued on Page 9

OBA 2019-2020 Board of Directors

Oklahoma Bankers Association 2019-2020 Executive Committee

Copyright© Oklahoma Bankers Association, 2020 Volume 110/Number 4 (ISSN 0030-1647) Jeremy Cowen, Editor Senior Vice President/Communications • jeremy@oba.com Megan McGuire, Member Relations Vice President • megan@oba.com Cami ten Napel, Communications Assistant cami@oba.com

Frazier Henke Tulsa, Chairman Rick Walker Lawton, Vice Chairman Kyle Hughbanks Alva, First Vice Chairman Sandy Werner Elk City, Immediate Past Chairperson Roger Beverage President/Treasurer

Mark Londagin, Grove Amada Alvidrez, Guymon Mike Lyles, Coweta Paula Barrington, Edmond Jay Randels, Alva Herschel Brewster, Weatherford Bill Schonacher, Oklahoma City Don Clark, Anadarko Danny Seibel, Lindsay David Cook, Laverne T.W. Shannon, Oklahoma City Priscilla Cude, Bethany Donald Sherman, Purcell Ted Cundiff, Broken Arrow Terri Thompson, Henryetta George Drew, Edmond Alicia Wade, Oklahoma City Jim Hamby, Ada Beth Wright, Coalgate Carl Hudgins, Tulsa Matt Jackson, Thomas

Oklahoma Banker is published monthly by the Oklahoma Bankers Association, 643 N.E. 41st, Oklahoma City, OK 73105. Phone: 405-424-5252; Toll-free number: 866-424-5252; FAX: 405-424-4518. A $45 subscription is included in membership fees. Non-member subscriptions are available. Paid subscriptions may be obtained by submitting payment and application to the editorial office. Single copy price is $3.50. Periodical postage paid at Oklahoma City, Okla.

POSTMASTER: Send address changes to Oklahoma Banker, 643 N.E. 41st, Oklahoma City, OK 73105. News items and editorials from members of the Oklahoma Bankers Association are invited.

The editor reserves the right to reject any advertising or editorial copy deemed unsuitable for publication for any reason. Copy deadline is eight business days before publication date.

Disclaimer: with the exception of official announcements, the Oklahoma Bankers Association disclaims all responsibility for opinions expressed and statements made in articles published in the Oklahoma Banker. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. If legal or accounting advice or expert assistance is required, the services of a qualified professional should be sought.

4

Oklahoma Banker

April 2020

n EDUCATION UPDATE

Quarantine means no live events, plenty of webinars

As I write this month’s article and reflect on the world changes of the last 30 days, it’s a struggle to try to stay positive.

We need each other now more than ever. I miss seeing everyone at seminars, conferences and other events. Social distancing is a struggle.

All live events for April have been postponed or canceled. A couple from March have been rescheduled. Although subject to change, here’s the list (in order as originally scheduled) with the new dates: • Vendor Management Seminar, Oklahoma City, Aug. 13.

• Basic New Accounts Seminar, Tulsa, June 9.

• Basic New Accounts Seminar, Oklahoma City, June 10.

• Bank Directors Update, Tulsa, Nov. 9.

• Bank Directors Update, Oklahoma City, Nov. 10.

• Senior Management Conference, Las Vegas, Nevada, canceled. By early summer, should have the dates for 2021.

• BSA Seminar, Tulsa, June 16.

• BSA Seminar, Oklahoma City, June 17.

• HR Seminar, Oklahoma City, June 11.

• Women in Banking Conf, Norman, canceled. Will be held in October or November.

• Reg CC Update, Tulsa and Oklahoma City canceled.

• Teller Seminar, Oklahoma City, Sept.

28.

• Teller Seminar, Woodward, Sept. 29.

• Teller Seminar, Krebs, Sept. 30.

If you were registered for a program that has been rescheduled, we transferred your registration to the new program date. If you registered for an event that has been canceled, a refund has or will be sent.

Please let me know if you have questions about any of these sessions.

On a brighter note, we do have a full slate of webinars available to keep you and your team educated. As you know, we use TTS (Total Training Solutions) for the majority of our webinars. Effective March 16, and until further notice, TTS has extended the OnDemand

• Should renters sign a release of liability affidavit before box access is permitted?

• Does your lease agreement contain a correct emergency vault closing clause?

Janis Reeser DIRECTOR OF EDUCATION janis@oba.com

access period for all “Live Plus Five (days)” registrants to 60 days (versus five business days.) Also, they are waiving the $75 per location fee for additional locations. Here’s the schedule:

New FFIEC Business Continuity Management Handbook April 10 — webinar

The FFIEC released a complete re-write of the Business Continuity Planning booklet on Nov. 14, 2019, titled Business Continuity Management.

This webinar will consist of an overview of the new BCM booklet and provide insight in how to develop your BCM Program.

What you will learn: • Roles and responsibilities.

• Business impact analysis.

• Risk assessment process.

• Business resiliency.

• Third-party resiliency.

• Training.

• Testing.

IT and cybersecurity officers, IT managers, risk management staff, auditors and other senior management will gain insight into the business continuity planning process.

Susan Orr, a frequent speaker and trainer, will teach the program. (Susan will lead the Vendor Management Seminar scheduled in August.)

Allowing Safe Deposit Box Access During a Pandemic Branch Closing April 13 — webinar

Whether you have 50 boxes or 5,000, this presentation provides a realistic and well-organized method of reviewing your procedures and providing safe deposit box access when your branch is closed. Topics covered include:

• Is regulatory approval required if branch access is permitted to enter a box?

• What 30 important items could a renter want to remove from a box?

to criminals.

• Physical security measures to reduce your risk.

• Safe opening procedures.

• Considerations at closing time.

• Examination of recent cases of robbery/kidnapping.

• Protecting you, your employees and your family.

• Bank robbers: in their own words.

• What type of box renter notification should be provided to your renters?

• Responding to different types of robberies.

• What liability might occur if safe deposit box access is not permitted?

• Latest robbery statistics.

• What health concerns must we address when granting box access?

• Morning glory robberies.

• What notice should be posted on your branch lobby entry door?

This informative program will benefit branch managers, security officers, safe deposit supervisors, vault attendants, compliance officers, auditors and your in-house legal counsel. Dave McGuinn, commonly referred to as the safe deposit GURU, will lead the discussion.

Robbery Prevention & Response April 13 — webinar

Although losses due to fraud dwarf the amount lost to robberies each year, bank robberies pose a much greater risk to employees. In this session, find out what makes a robber choose his target, and learn ways to safeguard you and your institution against these criminals.

Program highlights: • Making your location more attractive to customers and less attractive

• The high cost of complacency.

• Proven methods of prevention.

• Are you putting yourself at risk?

• Habits that endanger.

Frontline staff, bank trainers and branch managers should participate in this training. Carol Dodgen, a former security training officer at Compass Bank, will teach the program.

What You Need to Know About Escrows April 14 — webinar

This program provides comprehensive coverage of the flood regulations, Regulation X and Regulation Z escrow rules. We explain, step-by-step, how to establish, maintain and cancel escrow accounts under the amended requirements.

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Oklahoma Banker

April 2020

5

n EDUCATION UPDATE (CONTINUED FROM PREVIOUS PAGE)

lation Z and the flood regulations to have escrow accounts, and which are exempt.

• The limitations on the amount of the required escrow payments at origination and over the life of the loan.

• How to conduct an escrow analysis.

• How to determine an escrow account computation year.

• The calculation of the amount of the allowed cushion.

• The rules for preparing the initial escrow account disclosure statement.

compliance officers and others involved in BSA oversight should participate.

Carl Pry, CRCM and Certified Risk Professional with Treliant Risk Advisors, will teach the class.

SAR: Line-by-Line April 16 — webinar

This webinar will review line-byline the text fields and requirements to complete the SAR. Specifically, the session will address: • How to complete the note to FinCEN.

• The TRID rules regarding the escrow notices required in the Closing Disclosure.

• Cyber crimes.

• How to prepare the annual escrow account statement.

• Line-by-line review of all instructions.

• How to resolve a surplus, a deficiency or a shortage.

• Regulation Z rules regarding escrow cancellation notices.

The program is designed for compliance officers, operations personnel, mortgage loan officers, loan originators and others involved in opening and maintaining escrow accounts for mortgage loans. Jack Holzknecht, a frequent speaker for the OBA, will facilitate the discussion.

BSA for Lenders April 15 — webinar

This two-hour program will assist your bank in determining whether your BSA Compliance Program adequately includes controls, such as training, policies and procedures, monitoring, etc., for loan products in addition to deposit products. Covered topics include: • Commercial and residential mortgage loan money laundering schemes identified by FinCEN through a 10year study of SARs. • Lending red flags, including those addressed in the BSA Exam Manual and many more.

• Customer Due Diligence (CDD) and, Enhanced Due Diligence (EDD) expectations regarding loans.

• Beneficial Ownership identification and verification requirements for legal entity customers.

• How to develop customer risk profiles and conduct ongoing risk-based monitoring for loan products.

• Portions of your BSA Policy/Program that need to address lending.

Commercial loan officers, BSA officers,

• Human smuggling and human trafficking.

• Copy of Form and instructions.

• Referral forms for staff, Excel spreadsheet of all advisories and mortgages.

• How to complete a narrative.

Those responsible for completing and reviewing SARs will benefit from the discussion. Deborah Crawford, an experienced bank trainer and speaker, will lead the course.

Signature Card Danger Zones April 21 — webinar

How a signature is set up can impact your customer’s FDIC coverage.

It is critical that bankers clearly understand ownership, titling and access under your signature card contract.

During this webinar, you will learn: • Understanding the five major components of a signature card.

• What are the “big three” and what happens when they don’t match.

• Losses, liability and what went wrong in cases where banks lost big money.

• Dealing with signature card changes: white out, crossed out, etc.

• Looking for key signature card issues: offset, how to close accounts, etc.

• How a signature card set-up can cause your customer to be uninsured by the FDIC.

This webinar is designed for customer service representatives, branch administration, branch managers, tellers, training and development staff, compliance personnel and anyone who handles customer accounts. Deborah Crawford will facilitate the discussion.

Small Business Lending: The CARES Act, New SBA Programs, and Other Issues April 22 — webinar

This timely program will cover SBA programs, PPP, as well as the American Workers Paid and Employed Act. We’ll also provide some timely reminders of various compliance requirements on small business lending to ensure your programs remain best-in-class so you can be prepared to handle the next set of challenges thrown your way. Covered topics include: • Provisions of the CARES Act that apply to small business lending, including: › Keeping American Workers Paid and Employed Act (Title I) and the Paycheck Protection Program: qualifications and standards. › Significant expansion of SBA programs, including to the 7(a) program. › Express loans, entrepreneurial development programs and Emergency Injury Disaster Loans (EIDLs). › The Coronavirus Economic Stabilization Act of 2020 (Title IV) – loans to qualifying entities, including restrictions.

• ·Treasury guidance – application forms, information sheets.

• Loan modifications – how should these be handled? › Handling late or missing payments. › Disclosure and other requirements, including fair lending and UDAP/ UDAAP. • Additional compliance guidance around commercial lending, including: › Appraisals (new requirements), flood insurance, fair lending, UDAP/UDAAP and more.

This webinar is intended for anyone in the institution interested or involved in the CARES Act and its implications for small business lending, including lenders, relationship managers, compliance and audit professionals, management, board members, servicers, SBA lenders, and anyone else interested in how this new environment of banking is impacting small business lending. Carl Pry will provide the guidance.

Unclaimed Property Compliance April 23 — webinar

This webinar will focus on complex state unclaimed property reporting requirements and the unique challeng-

es facing banks. Learn best practices to mitigate risk proactively, efficiently track customer contact and monitor recent legislative updates that could impact your organization. Key points addressed: • Overview of unclaimed property reporting requirements.

• Trends impacting financial organizations.

• Handling of unique property types, such as IRAs, CDs and safe deposit boxes.

• State dormancy periods; exemptions and deductions.

Anyone responsible for the oversight, management, and reporting of unclaimed property, such as bank operations managers, compliance officers, risk managers and internal auditors, should plan to participate. Various speakers from Crowe LLP will facilitate the session.

Equipment Lease Financing April 28 — webinar

Seventy-two percent of U.S. companies use some form of financing when acquiring equipment. This webinar focuses on the many aspects of equipment lease financing, from structure and documentation to monitoring and administration. It will also include a review of the OCC Lease Financing Guidelines. Both new and experienced equipment lease financing lenders will find this program to be informative and useful. Covered topics: • Capital leases vs. operating leases.

• “True Leases” vs. lease financings under the UCC. • Types of equipment well-suited to lease financing arrangements.

• Economic analysis of a lease vs. loan.

• Tax and accounting issues.

• Documenting the equipment lease financing arrangement.

• Equipment maintenance and upgrades.

• Lease monitoring and administration.

• Treatment of leases in bankruptcy.

• Review of OCC Lease Financing Guidelines.

Robin Russell, a Texas-based attorney who teaches numerous classes related to financial transactions, will teach the class.

• • •

That’s it for now. Hang in there.

Brighter days are ahead.

6

Oklahoma Banker

April 2020

Banking begins in Caddo County at turn of century

By Michael J. Hightower, Ph.D Bank and Commerce Historian

Like so many banks in Oklahoma, First State Bank of Anadarko’s history was shaped by a single family.

Its patriarch, Thomas Kearse, was born in July 1869 near Solomon, Kansas.

He earned a law degree from the University of Kansas and, shortly after the Cherokee Strip was opened to non-Indian settlement in 1893, relocated to Medford, Oklahoma Territory.

Kearse served as chief clerk in the recently formed territorial legislature in Guthrie. He returned to Kansas in 1897 and, on March 11, married Rebecca Hahn, a Missouri native (b.

Nov. 30, 1871) who moved to St. John, Kansas, with her parents in 1878.

In 1901, Kearse and his bride moved to a homestead in Caddo County, Oklahoma Territory. On May 31 of that year, the First National Bank of Anadarko opened its doors (or tent flaps, to be precise) in a corn field where the court house was later built. The bank received its charter on July 16, 1901.

Kearse launched his banking career

on July 9, 1902, when Oklahoma Territory Secretary of State William Grimes granted a charter to Washita Valley Bank in Fort Cobb with capital stock of $5,000.

As principal shareholder, Kearse, then living in Sickles, was named as president; other shareholders included James B. Yount of Fort Cobb and J. H. Korndofer of Medford.

For the next few years, Kearse split his time between managing the bank, farming his ever-increasing acreage in Caddo County, and helping to raise the couple’s only daughter, Roumaine, who was born in 1906.

Competition came from Caddo County Bank, which opened its doors down the street in 1902. The Hite brothers ran the bank until 1909,

when they sold controlling interest to Paul Gilbert and Charles Grimmett.

In 1915, former Oklahoma State Treasurer Jim Menefee bought controlling interest in Caddo County Bank. Menefee had the distinction of serving one term as the state’s first treasurer in Gov. Charles N. Haskell’s administration (1907-11).

According to homestead law, Thomas and Rebecca had to prove up their claim by living on it and making improvements. Accustomed to frontier scarcity, when the Kearses acquired something, they appreciated its value and tended to keep it.

“They never sold anything,” explained Kitty Clark, a longtime director at First State Bank of Anadarko and wife of bank president Don Clark. “They owned farms around the Fort Cobb area that they accumulated over the years, and they never sold anything!”

More competition for banking services in Caddo County arrived in 1909 when First State Bank of Anadarko received its charter. On July 1 of that year, the bank reported capital stock of

$15,000, profits and reserves of $785.54, and deposits of $59,715.30. Under the presidency of H. C. Bradford, the bank focused on a twofold mission: customer service; and meeting the needs of farmers and ranchers.

The bank’s motto – personal service, one customer at a time – came to symbolize the bank’s local ownership and commitment to economic development in Caddo County.

In a pattern that typifies the pioneer banking era, Caddo County banks used the front page of the local newspaper to publish their financials and tout their unique services, usually with a catchy slogan, in a no-holds-barred competition to convince folks that their money would be safe and secure in their vaults.

Hightower is the author of the two-volume banking in Oklahoma (OU Press, 2013, 2014). To schedule a book discussion on Oklahoma banking history in your community, contact Michael by phone at (424) 249-6043 or by email at mhightower@okhistory. org.

Oklahoma Banker

April 2020

7

n OKLAHOMA BANKERS

Burton

Custer

FNB Community Bank, Midwest City

Tracy Burton was promoted to vice president and Choctaw Branch manager.

She began working for FNB as a Loan Processor in 1997, then moved to the Choctaw Branch as a personal banking officer in 2005.

Desi Custer was promoted to BSA officer. She began her career with FNB in 2002 as a part-time teller, moved up to commercial teller and teller shift leader and then ATM clerk, then assistant BSA officer. Custer graduated from the University of Central Oklahoma with a bachelors in accounting.

Debbie McKnight was promoted to assistant vice president. She started working at FNB Community Bank in June 1996 in the transit department. She transferred to the CIF department and worked there until 2016 when she moved back to the transit department as an assistant cashier.

Darrell Titsworth was promoted to assistant vice president and personal banking officer. He started at FNB Community

McKnight

O’Rourke

Bank in January 2016 as a part-time teller, then teller supervisor and Personal banking assistant.

American Bank and Trust Co., Tulsa

Michael Willis has been newly elected to serve on the bank’s board of directors.

Willis currently serves as Tulsa County Clerk and has substantial experience in government and private sector leadership including political management, public relations, crisis management, negotiation, government affairs and policy. Willis holds a bachelors in public affairs and administration and a masters of public administration from the University of Oklahoma.

Grand Bank, Tulsa

Cain Wright was hired as senior vice president of commercial lending. Before joining Grand Bank, Wright served the Tulsa community as a commercial lender at First

Stump

Texada

Bank of Owasso. He is on the board of Tulsa Girls Art School, a mentor for both Street School of Tulsa and Big Brothers Big Sisters, and he has served on the selection committee for Tulsa’s Habitat for Humanity since 2014.

Grand Savings Bank, Bentonville, Arkansas

Kyle Stump was hired as loan officer to the Jay branch. He currently serves as vice mayor of the Jay City Council where he helps drive local growth and development.

Stump brings 12 years of experience with the Delaware County Assessor’s Office to his role at Grand Savings Bank’s Jay office.

TIB, Dallas, Texas

Beverly Texada has been promoted to executive vice president and joins TIB’s executive team. Texada’s career at TIB has

Titsworth

Velekei

spanned over 25 years, as she has overseen the operations of the bank’s expansive Card Services Division. She earned a B.B.A. from Henderson State University in Arkadelphia, Arkansas.

Michael C. O’Rourke has been promoted to senior vice president/correspondent officer. O’Rourke began his TIB career as a summer intern in June 2007. He holds a BBA in Finance from Texas Tech University and is a graduate of the Southwest Graduate School of B anking at Southern Methodist University in Dallas, Texas. He is also a graduate of the IBAT Bank Lending Institute and the Texas Tech Banking School.

Dawn Velekei has been promoted to senior vice president/controller. She joined TIB in 2016, having served at numerous community banks. Velekei earned a BBA in Accounting from the University of Texas at Dallas and is a graduate of both the Bank Operations Institute in Commerce, Texas, and the Graduate School of Banking in Madison, Wisconsin.

8

Oklahoma Banker

April 2020

Bankers complete OBA Commercial Lending School More than three dozen bankers from across the state recently complete the 2020 OBA Commercial Lending School, held on March 1-16.

The attendees are featured in the photo on this page.

Standing, from left, on the back row are: Adam Howell, Quail Creek Bank, Oklahoma City; Zach Bishop, Regent Bank, Tulsa; Clint Barney, RCB Bank, Ponca City; Colton DeMuth, F&M Bank, Kingfisher; Jared Gabriele, Grand Savings Bank, Rogers, Arkansas; Todd Hamilton, BancCentral, Enid; Mark Byers, Vision Bank, Ada; Jace Woodrow, McClain Bank, Purcell; Zac Dillard, Vision Bank, Ada; Kyle Hatcher, NBC, Oklahoma City; David Cooper, First National Bank in Marlow, Marlow; Andrew Winslow, RCB Bank, Broken Arrow; Derek Winchester, Vision Bank, Prague; Bob Crothers, Citizen Potawatomi Community Development Corp., Shawnee; and Shane Regier, Equity Bank, Cordell.

Standing, from left, on the middle row are: Shane Jett, Citizen Potawatomi Community Development Corp., Shawnee; Martin Hernandez, Arvest Bank, Oklahoma City; Nicole VanZant, BancFirst, Prague; Joshua Sims, BancFirst, Meeker; Noe Rodriguez, Falcon Bank, Eagle Pass, Texas; Natalie Freeman, Arvest Bank, Oklahoma City; Kegan Tuohy, Stride Bank, Enid; Kendra Anderson, First National Bank, Vinita; Emily Jantz, Stride Bank, Blackwell; Tori Stockstill, American Heritage Bank, Sapulpa; Mandi Bruner, RCB Bank, Ca-

toosa; Samantha Hutchison, Valliance Bank, Oklahoma City; Cheyenne McBeath, Arvest Bank, Bartlesville; Eva Austin, Arvest Bank, Lawton; Katherine Slifer, Oklahoma Development Finance Authority, Oklahoma City; Tara Deavours, BancFirst, Lawton; Krystal Urbanski, City National Bank, Law-

ton; Jared Wilson, First Bank & Trust, Healdton; Felecia Freeman, Citizen Potawatomi Community Department Corp., Shawnee; Daniel Torres, First Bank & Trust Co, Clinton; and Janis Reeser of the OBA. Seated, from left are: Kyle Gift, First Bank of Owasso, Owasso; Oscar Cabal-

2020 BANKING SCHOOLS

lero, Falcon Bank, Laredo, Texas; Nick Moody, Union State Bank, Bartlesville; Jim Bob Rempel, Shamrock Bank, Coalgate; Jeff Hamilton, Arvest Bank, Bartlesville; Steve Odle, Grand Savings Bank, Jay; Jeff West, BancFirst, Yukon; and Angela Sellers, American Bank, Collinsville.

OBA EVENTS CALENDAR April 2020 16

SAR: Line-by-Line, webinar

21

Signature Card Danger Zones, webinar

Commercial Lending School March 1-6

22

Small Business Lending: The CARES Act, webinar

23

Unclaimed Property Compliance for Financial Institutions, webinar

Compliance School Aug. 24-28

24

Safe Deposit Vault Security & Disaster Recovery Essentials, webinar

28

Equipment Lease Financing, webinar

Intermediate School Feb. 3-7; June 1-5

Basic Banking School Sept. 14-17 Consumer Lending School Oct. 5-9 Operations School Nov. 16-20

May 2020 6

Reg E Compliance – Five Best Practices for Handling Disputes, webinar

7

Edit Writing BSA Policy and Procedures, webinar

8

Introduction to ACH: The Basics, webinar

11

Basic Personal and Business Tax Return Analysis, webinar

12

Understanding Commercial Real Estate Loan Documents, webinar

Oklahoma Banker

April 2020

CARES Act first disbursement within 10 days of approval. It makes you scratch your head and ask, ‘so, which is it – five days or 10 days?’”

Beverage explained the sheer magnitude of the PPP effort was staggering, appropriating $250 billion to be distributed to small businesses for payroll purposes.

That amount was exponentially higher than anything the SBA had ever done before.

The guidance that had to be written was also something that no one at Treasury or elsewhere had ever done before.

And it was all mandated to be up and running in six days.

“When you stop and think about all of that, you begin to understand the enormity of the task,” Beverage said.

“None of us are surprised at the challenges this program presents; it’s just frustrating because we have to be tentative in providing information or, worse, not being able to provide any answers at all.

“Lenders need the guidelines and rules. They need the details that will take it through the full operational mechanics of what’s required of a bank – from origination to forgiveness, to sale, to guarantee. As this issue goes to press, we still don’t have that process down pat yet.

“Right now, lenders are in a quandary. It’s difficult to proceed without clear guidance, especially when it comes to disbursement.”

He also mentioned what’s concerning to a lot of OBA members is what happens after all of the preliminary steps

9

From Page 1

“Right now, lenders are in a quandary. It’s difficult to proceed without clear guidance, especially when it comes to disbursement.”

Adrian Beverage OBA CHIEF OF STAFF

have been taken, with no firm guidelines or rules in place, and something wasn’t done correctly.

“What happens to the upfront servicing fee?” Beverage said. “The guarantee?

The ability to sell these PPP loans into the secondary market, or into the new vehicle that the Federal Reserve is creating?

“No one has an answer. Not surprisingly, the lack of proper direction and being unable to move quickly creates both friction and stress among both borrowers and lenders. And some bankers worry about how, on an after-thefact basis, SBA will regard the actions that have been taken without specific disbursement guidance from SBA/Treasury.

“God bless our member banks, which, in spite of uncertainties about forms and other disbursement questions, are focused solely on helping their customers, working 12-15 hours a day in some instances, in the middle of the worst pandemic in more than a generation.”

n EXECUTIVE UPDATE (CONTINUED FROM PAGE 3)

home, is deafening. It’s like a ghost town out here. It’s so quiet.

Everyone asks, “When will it be over? When can we resume normal activities?” Obviously, we’re not there yet.

In fact, we may not have yet reached the peak of infections or deaths as this issue of the Oklahoma Banker goes to press.

That’s pretty sobering.

I can’t help but think about future bank examinations and what it will be like going forward. I remember what it was like for me 35 years ago, trying to manage the chaos that resulted from the economic crash in agriculture, and I wouldn’t want to do that again, ever.

Thank God for Mick Thompson, our state banking commissioner. He’s absolutely the best. Mick’s been on the head of the spear while battling alongside of the industry from the outset.

He’s been fighting to make sure that examiners here and elsewhere stay calm and collected as we try to sort this out together. No one could ask for more.

In addition, thanks also go out to the OBA’s chairman, Frazier Henke, and our board of directors. They know what we know, and they have been supportive of everything we’ve been doing to keep you informed about the latest developments and the speed with which those developments have been coming.

We are your OBA. We are here for you and your bank, 24-7 if need be.

There are never too many questions, too many emails or too many phone calls from our member banks. Take advantage of this tremendous resource that’s at your fingertips. And stay healthy and safe.

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Oklahoma Banker

April 2020

OBA Emerging Leaders The OBA’s Emerging Leaders program was created with the goal of engaging the next generation of banking leaders in the process of dealing with issues facing their industry though their participation in the OBA. This program lets these future leaders interact frequently during lunch meetings where speakers share valuable ideas. Other events are planned as well!

No membership dues are required to join the Emerging Leaders program. The only requirement is to be an employee of an OBA-member bank. For more information, visit www.oba.com/emergingleaders or contact:

Megan McGuire

megan@oba.com 405-424-5252 ext. 109

IN THIS ISSUE:

Legal Briefs

• Coronavirus and assisting customers

A PR I L 2020

A few weeks ago I was asked about extending mortgage loans for borrowers for 90 days. My first thought was “we never extend mortgages due to all the paperwork and costs.” But my, oh my! White flags began There is a risk balance that banks must follow so that flying and the government recognized that consumers in six months or at your next exam, you will say, “we were deep in critical times. Shelter in helped” rather than “we were damned place orders have been extended and if we did, and damned if we didn’t.” schools are staying closed. Workers I’ve heard one property manager say are being laid off literally by the tens of she received text messages from renters thousands. This begs the question, is 90 verifying that because of the coronavidays of relief enough? Banks are getrus there is no rent owed for the next ting in a mode of “ready, fire, aim” as month. The press is advertising that Andy Zavonia they try to meet the needs of borrowers evictions and foreclosures have been OBA COMPLIANCE TEAM and the CARES Act. You’ll read more compliance@oba.com stopped and small business loans are on this below. The Act will give many available (even before the House passed mortgage borrowers nearly a year of the CARES Act). People do not grasp forbearance. Ninety days just isn’t that a stoppage because courts are enough for many. closed and collection actions are de What can banks do to assist borrowlayed to avoid “kicking someone who ers but do so in a safe and sound manis down,” will at a time resume and the ner? We may have to assume “safe and obligations to pay as agreed will mean Pauli Loeffler sound manner” is a subjective term. It past due payments must be paid. Enter OBA COMPLIANCE TEAM certainly has a different meaning based compliance@oba.com regulatory notices that encourage lendon the condition of the bank and its ers to work with customers. The New region during a COVID-19 economy York Times had an article on March than it did last December when borrowers simply want22, 2020, that began: ed loan extensions for holiday bills. Times are different “U.S. federal and state financial regulators are ennow, but what will be said about a bank’s reaction a year couraging lenders to help borrowers affected by the after the pandemic is over? coronavirus, and will not penalize them for doing so….

“The regulators said they will not criticize banks for Modify Policies—COVID-19 Addendums ‘safe and sound’ loan modifications or direct the lend In June 2000 the FFIEC established policy standards ers to categorize them as ‘troubled debt restructurings’ under the Uniform Retail Credit Classification and Ac—something that could affect their financial wellness.” count Management Policy imposing controls that are That sounds helpful, but nowhere does it say a borrower still followed today. This policy: will not be responsible to make a payment. It does say 1) Required banks to establish explicit standards a bank must act in a safe and sound manner. If a bank that control the use of extensions, deferrals, renewals, does not, it will be held accountable. Historically, after and rewrites for closed-end loans some form of government bailout or immediate reaction 2) Allowed an additional re-age of open-end credto a crisis such as with the recent $2 trillion stimulus its in formal workout or debt management programs package, enforcement actions increase. Fraud happens. that meet all other re-aging requirements; and Sometimes it is intentional and sometimes it is not, but 3) Extended the charge-off time frame for openit is looked for. What can a bank do to assist its customend and closed-end retail loans secured by one- to ers in these very strange times of massive business closfour-family residential real estate to 180 days past due. ings with so many customers without cash reserves and The Federal Register (65 FR 36903, June 12, 2000, at without a paycheck? This landscape is changing fast and https://www.federalregister.gov/d/00-14704 ) defined standards on re-aging accounts. The term “re-age’’ is information is being updated daily. Stay on top of your defined as “returning a delinquent, open-end account daily regulatory updates.

Coronavirus and assisting customers

Pull out and save this section

to current status without collecting the total amount of principal, interest, and fees that are contractually due.”

The context of this policy is addressing troubled debts.

But regulators began asking banks to have a policy addressing extending or deferring loan payments. I will use the term “extension” here to mean allowing a borrower to extend the loan by making an agreement with the lender to defer one or more periodic payments to the end of the contract. The amount of interest owed, or a specific fee is charged for this or may be waived under some circumstances. In the case of loans past due, what examiners did not want to see was a poor payment history and multiple extensions applied to a loan to bring it current without a plan for future payments. This was hiding past due accounts and was both misleading and an unsafe and unsound practice. Open-end loans were limited to one extension in a 12-month period and twice in five years. The June 2000 policy did not state that same limit for closedend loans, but I have heard of examiners interpreting it to mean closed-end loans as well. In any case, a bank should have a policy or internal guidance on when extensions are allowed, why, how many may be applied at one time, how many are allowed in a year, over the life of the loan, and who can approve extensions as well as who can approve any exception to these internal requirements.

Criteria for extensions other than those offered during the holidays includes answering various questions similar to the underwriting process: 1) Why is the extension needed?

2) Will interest owed be paid at the time of the extension?

3) What is the recent payment history?

4) What is the plan for future payments, and how have financial conditions improved?

5) Is there loan collateral?

6) And particular to mortgages, is this in a flood zone (requiring signed disclosures), are mortgage documents necessary to be filed with the county, are we escrowing, and what happens to the accruals for those expenses?

Another issue deserving attention is an underwriting policy. A business loan may require several years of tax returns and other financials. In today’s CARES Act economy the policy needs to address new underwriting requirements. The lender’s highlights for the Paycheck Protection Program defines only four criteria to make a 100 percent Small Business Administration guaranteed loan: Continued on next page

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Oklahoma Banker Continued from previous page

1) verify that a borrower was in operation on February 15, 2020 2) verify that a borrower had employees and paid salaries and payroll taxes 3) verify the dollar amount of average monthly payroll costs 4) follow BSA requirements.

Obviously, there is more needed behind the scenes such as verifications of how many employees there are, etc. The SBA is getting pushback on some of these issues from big banks and is considering revising the guidance to increase acceptance by lenders. The loan programs are still developing as well as are compliance rules. It does make it difficult to follow this path when parts are being made up as we go. It’s important you keep abreast of the changes.

Your bank may have one or more policies addressing Troubled Debt Restructuring (TDR), extensions, and other workout issues. These may need an emergency addendum as it is unlikely any were created for the recent massive and critical changes in our economy.

Assisting Borrowers What can your bank do today to assist borrowers?

The information above leads us to this. In general, new loans can be made, HELOCs and other lines may be increased, and existing loans can be renewed, modified, or extended to assist your borrowers. While the demands are to react at a moment’s notice, the bank must

April 2020 act deliberately. Coordinate what is being done internally. It may not be necessary to have an amended policy board-approved prior to implementation for emergency purposes. Let management use its authority to react as needed and have the staff such as Compliance, Audit and lenders amend policies and procedures for appropriate approvals. Inform the bank’s CRA officer of the concessions being made to address customers affected

by COVID-19 and keep examiners informed as to what the bank is doing on both the Lending and Operations sides of the bank.

New Loans Section 1102 of the CARES Act addresses the Paycheck Protection Program. This is a commercial loan designed to provide a direct incentive for businesses to keep their workers on the payroll. These workers are your consumer and mortgage borrowers. The SBA will forgive loans if all the employees are kept on the payroll for eight weeks after the loan is made and the money is used for payroll, rent, mortgage interest, or utilities. The PPP will be available April 3 – June 30, 2020.

All federally insured banks can make PPP loans with a fast SBA approval. Banks can have lenders apply with the SBA online and we are hearing that in 36 to 48 hours lenders who are not yet SBA-approved can be approved. The bank can be paid a processing fee based on the loan balance for making these loans, based on tiers. Loans of $350K and less pay 5 percent to the lender, $350K to $2 million pay 3 percent and

Need to get your message out?

Put it where it will be noticed... the newspaper of the Oklahoma banking industry!

For more information, or to place an ad, contact: Jeremy Cowen (405) 424-5252 • 866-424-5252 • jeremy@oba.com.

those greater than that pay 2 percent (check current information for any changes). The four underwriting criteria are outlined above.

You may also want to pay attention to bullet 1 in that underwriting list as to a date recognized as the beginning of the COVID-19 period. And if the bank is interested these PPP loans may be sold in the secondary market.

Banks can promote special loan products or the same products that were being offered a year ago. Rate considerations may be offered or deferred first payment dates.

There are still qualified borrowers out there, but fewer.

Some employees are more secure than ever and are creditworthy.

Loans Past Due or About to Be Be proactive and communicate with your borrowers before they are past due. On March 22, 2020 the Fed, FDIC, NCUA, OCC and CFPB published an “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus.” This statement encourages banks to work with borrowers. It also provides encouragement to work with borrowers who “are or may be unable to meet their contractual payment obligations because of the effects of COVID-19.” Add emphasis to “are or may be” and consider seeking out borrowers in advance of a payment difficulty. The bank may offer a lot of relief when payments may be deferred, and the contract extended. It provides goodwill and avoids a bump in past due loans.

The statement goes on to say the “agencies will not criticize institutions for working with borrowers and will not direct supervised institutions to automatically categorize all COVID-19 related loan modifications as troubled debt restructurings (TDRs)” but it also points out that any modifications and actions taken must be consistent with safe and sound practices. The bank does not want to assist borrowers through special programs only to have those loans classified later as TDRs. Banks are still encouraged to work with classified and “special mention” loans as well.

The Statement went on to say “The agencies have confirmed with staff of the Financial Accounting Standards Board (FASB) that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief, are not TDRs.” From the FDIC’s FIL-50-2013, “A TDR designation means a modified loan is impaired for accounting purposes, but it does not automatically result in an adverse classification. A TDR designation also does not mean that the modified loan should remain adversely classified for its remaining life if it already was or becomes adversely classified at the time of the modification.” So, a TDR doesn’t immediately require a classified loan status, but it is not far away. The bank may assume that borrowers who are current on payments are not experiencing financial difficulties at the time of the modification for purposes of determining a TDR status. When this is the case, no further TDR analysis is required for the loan.

Loan modifications and loan extensions may be a banks preferred options to address existing loans and avoiding past dues and the costs associated with them both in collection activity and additional ALLL reserves. Issues to keep in mind include training and applying the bank’s policy addendum and procedures consistently.

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Oklahoma Banker

April 2020 Continued from previous page

As to extensions of payments, consumer loan payments may be deferred either before or after default, but the agreement must be in writing. The bank can charge an extension fee, but it cannot charge both an extension fee and a late fee. The advantage— particularly if the borrower is more than 30 days late—is it will not be reported negatively to the credit bureau. The bank can contract for several extensions at once to advance the due date by several months, and then revisit the circumstances when payments are due to resume. The loans principal does not increase but interest continues to accrue.

Some issues to consider in your written extension agreements include requiring or reminding the borrower that insurance on collateral such as a vehicle must be maintained during this period. If your bank issues credit life or disability insurance, double check the policy and notify your borrower of any issues there. Some policies track only the originally scheduled amortization and do not extend coverage when there is a payment extension.

A borrower extending a loan several times over the life of a loan may have no insurance for the last unscheduled payment periods which resulted from the extensions.

It is recommended that you accurately document the loan status when the extensions are granted, was it a 30 or 60 day or worse status, was the arrearage caused directly or indirectly by COVID-19 (document that briefly), and what are the prospects that once the extension period is over the borrower will be able to resume payments?

When on the loan desk my bank looked at the period the borrower was employed at their job. We often worked with borrowers in lower income positions who were employable at many places. For example, a person who was a cook or waitstaff was employable at many types of restaurants and unemployment periods would be brief as they often went from job to job. That is not the case today and these are some of the most unemployed folks during the current crisis. Documenting facts such as this may justify allowing multiple loan extensions at one time. If the coronavirus curve flattens in two months and the economy returns to a near normal state, positions for this group of workers will fill quickly. But at that time, those who have been unemployed may have rent and mortgage payments stacked up along with utilities, and most borrowers pay those bills before a signature loan at your bank. For this reason, a buffer month or two is recommended. This may be one of the reasons the CARES Act is providing such an extended period for mortgage extensions of up to a year.

How many deferrals/extensions should be granted?

That can be up to the bank and the policy in effect. In 2019 that may have been two payment extensions in a year. In 2020 it may be three or six. It is recommended that management decide, based on its market, what is reasonable and reduce that to a policy.

Because we have limited guidance as to what an examiner may feel is acceptable, the Compliance Officer or a member of senior management, or both, may want to have a call with the bank’s examiner in charge and say, “this is what we are implementing” and explain why, and how many extensions will be allowed based on what circumstances. Then, what happens if the quarantine period is extended? Will more extensions be allowed? Don’t ask the examiner to approve your policy as they do not manage the bank, just ask what their impressions would be.

This may provide the bank with an opportunity to avoid criticism later or hear that an even more flexible policy

would be considered safe and sound. The intent here is not to hide any past due loans, but to work with good borrowers and help protect their credit ratings during these difficult times.

Keep in mind that most real estate secured loans are only subject to disclosure and remedy provisions of the U3C, but Reg Z does at least talk about “skip-a-payment” extensions and that neither late fees nor extension fees are considered finance charges. The written extension agreement would supersede application of payment provisions which usually state that payments are applied first to interest, then principal, and finally late fees. Extension agreements can be used with real estate secured loans and these can be done in the same manner as for U3C covered loans, and address escrows. Check with your forms vendor or counsel on the use of forms.

In the case of mortgages, the bank is extending the loan. That is a MIRE (Make, Increase, Renew or Extend) event and under the flood rules the bank may need to check the flood status of the property and if it is in a Special Flood Hazard Area, disclose that and have an acknowledgment from your borrower signed.

The bank needs to address escrows if there are any. Ask whether they must be paid, or may they go unpaid as well?

I understand there are different approaches to this question. Some banks will not collect any part of the mortgage payments at this time and will adjust the final payment of the loan to include the extension fees, but I also hear about banks that are requiring the escrow portions to be paid and are staying in a 90- to 120- day range for extensions.

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While some banks are planning to capitalize interest, not all are. In any discussion with your EIC it may be wise to inquire about this, because the agencies don’t seem to be handling the nuances of the CARES Act, TDR and Generally Accepted Accounting Principles uniformly.

Section 4022 of the CARES Act will allow government-supported loan borrowers such as those with loans from Freddie, Fannie and the VA, to request a forbearance for 180 days if they were impacted by COVID-19, and at the end of that period another 180-day forbearance period can be requested. There are new rules to provide these extensions (modifications) and to show the loans as current, and not past due. More on that below.

Section 4022 is targeted at 1-4 family dwellings meeting certain qualifications. It must be a federally backed mortgaged meaning it is: a) insured by the Federal Housing Administration b) insured under section 255 of the National Housing Act c) guaranteed under section 184 or 184A of the Housing and Community Development Act of 1992 d) guaranteed or insured by the Department of Veterans Affairs e) guaranteed or insured by the Department of Agriculture f) made by the Department of Agriculture; or g) purchased or securitized by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association.

Continued on next page

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Oklahoma Banker Continued from previous page

Many of the loans your bank is servicing in-house may not qualify for such a lengthy extension period as the government programs backing the covered loans adds to the safety and soundness of the loan, meaning there is less risk to the lender. Instead of six months, the bank may adopt a standard three or four payment limit or may factor the current loan to value ratio into the decision and base the period deferred in part on that. Like the extensions discussed above, I recommend documenting what happened and what is projected to happen.

For the loan qualified under Section 4022, during the covered period, a borrower experiencing a financial hardship due, directly or indirectly, to the COVID–19 emergency may request forbearance by: a) submitting a request to the borrower’s servicer; and b) affirming they are experiencing a financial hardship during the COVID–19 emergency That’s all the CARES Act calls for. It does not allow for the any forms or questions, but this applies only to the government backed mortgages.

Limits on fee, penalties and interest Section 4022 goes on to describe the servicer’s requirements. “Upon receiving a request for forbearance from a borrower…the servicer shall with no additional documentation required other than the borrower’s attestation to a financial hardship caused by the COVID–19 emergency and with no fees, penalties, or interest (beyond the amounts scheduled or calculated as if the borrower made all contractual payments on time and in full under the terms of the mortgage contract) charged to the borrower in connection with the forbearance, provide the forbearance for up to 180 days, which may be extended for an additional period of up to 180 days at the request of the borrower, provided that, the borrower’s request for an extension is made during the covered period, and, at the borrower’s request, either the initial or extended period of forbearance may be shortened.” Specifically mentioned are “fees, penalties, or interest” but escrow payments are not referenced. We hope there will be clear guidance on this, so banks will know whether escrow payments may or may not be suspended or postponed.

Absent this, banks may need to run an analysis of what the cost of paying taxes and insurance will be to avoid surprises later. There will be more impact based on the number of extensions, amounts of escrow payments and the timing of the escrow funds paid out. The escrow analysis may indicate the bank will be making a large amount

April 2020 of interest free loans as borrowers repay the deficiencies and shortages slowly.

Apart from the CARES Act, if an Oklahoma mortgage states a maturity date or the maturity date is ascertainable (you or counsel needs to review your documents), Sec. 301 of Title 46 requires foreclosure to be commenced within six years of that date, so it is relatively safe to not file notice of extension for a short extension. An extension for a year would not be a short term. On the other hand, if the mortgage neither states a maturity date nor is it ascertainable from the mortgage, the mortgagee must file a notice of maturity within 30 years of the date of the mortgage. So, if it is a 30-year mortgage with no maturity date, a short extension in such case could impede the bank in a worst-case scenario. If the bank is unsure which applies, the best action is to file.

Whether the loan is a mortgage or consumer loan, a modification may the solution to a problem. The June 2016 Legal Briefs has an excellent article explaining the differences between a modification and a renewal/refinance. A new loan created by the latter would require all the Reg Z and TRID disclosures applicable to the loan.

A modification does not, and this why it is the easier and less costly process. Payment extensions may be the simplest solutions, especially for consumer installments.

Some banks are being proactive and contacting consumers to offer no cost, three payment extensions.

Regulatory Reporting There is more confusion based on guidance documents and, in this case, I’m referring to credit reporting. The document is the FDIC’s March 27, 2020 FAQs addressing working with borrowers (at https://www.fdic.gov/coronavirus/faq-fi.pdf). In question 2, the FAQ discusses the credit reporting of loans which have had payment extensions. The first paragraph says, “Past due reporting status in regulatory reports should be determined in accordance with the contractual terms of a loan, as its terms have been revised under a payment accommodation or similar program provided to an individual customer or across-the-board to all affected customers. Accordingly, if all payments are current in accordance with the revised terms of the loan, the loan would not be reported as past due.” This makes sense because a loan that receives an extension advances the due date and is not contractually delinquent. The loan system would show it as current on regulatory reports and to the credit bureaus.

The second paragraph in questions 2 states, “For loans subject to a payment deferral program on which payments were past due prior to the borrower being

affected by COVID-19, it is the FDIC’s position that the delinquency status of the loan may be adjusted back to the status that existed at the date of the borrower became affected, essentially being frozen for the duration of the payment deferral period For example, if a consumer loan subject to a payment deferral program was 60 days past due on the date of the borrower became affected by COVID-19, an institution would continue to report the loan in its regulatory reports as 60 days past due during the deferral period (unless the loan is reported in nonaccrual status or charged off).”

This then indicates that if a borrower was, for example, one payment past due, and then lost his job due to a government-mandated closure and could not make his next two payments, the bank could extend only the two payments owed after the closure or at least would report it as a month past due. I do not see a bank handling one past due loan in two ways. The bank would collect what it can for three extensions in total. Systems will typically not advance a due date, but still report a loan as still delinquent. Note, though, that the reporting described in the FDIC’s FAQ is regulatory reporting, not reporting to credit bureaus.

Credit bureau reporting The CFPB on April 1 provided credit bureau reporting guidance in its “Statement on Supervisory and Enforcement Practices Regarding the Fair Credit Reporting Act and Regulation V in Light of the CARES Act” and stated, “As lenders continue to offer struggling borrowers payment accommodations, Congress last week passed the CARES Act. The Act requires lenders to report to credit bureaus that consumers are current on their loans if consumers have sought relief from their lenders due to the pandemic. The Bureau’s statement informs lenders they must comply with the CARES Act. The Bureau’s statement also encourages lenders to continue to voluntarily provide payment relief to consumers and to report accurate information to credit bureaus relating to this relief.”

This indicates that when a loan date is advanced due to an extension, COVID-19 or not, that is the correct way to report the loan. The CFPB does have authority over Reg V. The CFPB also recognizes that loan departments are strained due to COVID-19 personnel shortages. It notes that if there are FCRA dispute investigations that are not handled in a timely manner the CFPB does not intend to cite this in an exam nor bring any enforcement actions because of it. Hopefully the other agencies will follow suit.

Download previous editions of Legal Briefs.

Visit www.oba.com and click on the “Legal” section.

April 2020

Oklahoma Banker

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n #BANKERSOFOKLAHOMA

From Megan’s living room to her iPhone screen ...

EDITOR’S NOTE: The OBA’s Megan McGuire #BankersOf Oklahoma feature is modeled upon the Humans of New York photograph series. It will essentially be a “best of ” the photographs of bankers Megan takes from around the state during the month. You can see all of Megan’s “#BankersOfOklahoma” photographs on the OBA’s Instagram and Facebook feeds. With the country in #StayAtHome mode, Megan decided to share her favorite screenshots from

Megan McGuire OBA MEMBER RELATIONS megan@oba.com

Zoom as well as a few photos from her home office this month!

Quail Creek Bank commercial, Megan’s living room, Oklahoma City While working from home one day, Megan managed to catch a Quail Creek Bank commercial on television. Maybe it was the one with Bryan Petty in it!

Megan McGuire, Jeremy Cowen Oklahoma Bankers Association, Oklahoma City Even during the difficult times we’re in, Megan can still get Jeremy to give his signature high-pitched, high-VOLUME laugh, even over Zoom!

Megan McGuire, Jeremy Cowen, Adrian Beverage, Oklahoma Bankers Association, Oklahoma City Megan had to take time to use Zoom to connect with two of her favorite co-workers at the OBA. This particular screenshot is one of the few in which Adrian isn’t making a weird face!

April 2020

Oklahoma Banker

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Pro forma information on acquisition due diligence

By Doug Van Meter BKD

The number of annual bank acquisitions is on the decline after peaking in 2015.

Interestingly, the number of deals and pricing matrix per transaction have decreased, while the average deal value per transaction has increased, suggesting that larger banks are being acquired as compared to previous periods. Approximate average deal value to tangible common equity is 154 percent for 2019, based on 272 completed deals, as compared to 169 percent during 2018 at 346 deals. Average deal values to earnings are slightly lower—18.8 percent during 2019 as compared to 24.3 percent during 2018.

Various factors have contributed to the steady pace of bank acquisitions since 2014, including increased regulatory compliance cost, succession planning issues, increasing capital requirements, the need to leverage excess capital and uncertainty in operating risk associated with government regulations.

However, under the current regulatory environment, these trends may not continue at the same pace due to recently enacted tax reform and promises for reduced regulatory burden. Reduced corporate and individual tax rates and upcoming accounting changes will likely continue to affect pricing strategies with considerations on regulatory capital related to adopting an expected credit loss model and reduced net deferred tax assets and longer-term benefits of reduced income tax provisions. Many bank management teams are assessing their strategic plans to be either buyers or sellers based on the changing acquisition environment.

This article aims to help banking organizations’ buyers with due diligence in preparing pro forma financial information; however, sellers also may find the information useful.

One of the first considerations in the acquisition process is obtaining regulatory approval. The application process should include a thorough due diligence of the target, a well-documented business plan post-acquisition and pro forma financial statements and disclosures with post-closing capital ratios. Capital ratios pre- and post-close are an important area for regulators to evaluate the viability of the transactions and will influence ultimate approval. Therefore, the buyer should carefully evaluate the transaction and pro forma financial information recording.

A first step in preparing accurate pro forma financial information and disclosures is summarizing the deal contract, including the purchase price, contingencies, obligations and transactions occurring due to change in control provisions and transfer of assets acquired and liabilities assumed. Once a clear understanding of the transactions is obtained, the acquirer should apply Accounting Standards Codification 805, Business Combinations, to the transaction, which requires a thorough analysis and recording of assets acquired and liabilities assumed at fair value.

Here are some high-level reminders when recording a target acquisition: • With limited exceptions, assets acquired, liabilities

assumed and noncontrolling interest are recorded at fair value.

• Merger-related costs, such as legal, accounting and consulting fees, are no longer capitalized into the acquisition price.

• Currently, none of the target’s allowance for loan losses transfers to the acquirer.

• Goodwill can no longer be adjusted after one year post-acquisition.

• Any excess of net assets acquired over the purchase price (formerly negative goodwill) is recognized in earnings as a bargain purchase gain.

• The acquisition date is the date assets are acquired and/or liabilities are assumed.

• Adjustments to fair value may be made post-acquisition within one year after the acquisition date.

Estimating fair value can be challenging pre-acquisition and may require outside assistance, particularly with loan portfolios. Bankers generally instill good due diligence processes when evaluating loan credit quality; however, other fair value adjustments are often overlooked, such as those related to current interest rates and terms as compared to contractual agreements in place, liquidity premiums or estimation of prepayments — all of which can have a material effect on fair value measurements either individually or in the aggregate. The same is similar to other financial instruments, including deposit portfolios.

The effects on the financial statement may be long-lasting due to post-acquisition accretion or amortization of discounts or premiums applied to assets and liabilities to arrive at fair value. These subsequent adjustments and impairment considerations are important to the pro forma financial disclosures because they may have significant effects on results of the entity’s operations and cash flows.

It’s also important to understand Statements of Financial Accounting Concepts No. 6, Elements of Fi-

nancial Statements, regarding elements of financial statements and criteria for recording an asset or a liability.

In some cases, assets or liabilities recorded on a target’s balance sheet may not qualify for an asset or liability on the acquirer’s books during the acquisition process, and vice versa. Items to carefully examine may include prepaid assets, unrecorded payables, employee relocation cost or terminations, payroll liabilities arising from stock-based compensation plans, equity method investments, favorable or unfavorable leases and assets and liabilities arising from contingencies.

In other cases, costs an acquirer expects but isn’t obligated to incur in the future aren’t liabilities at the acquisition date but are costs the acquirer will incur subsequent to the acquisition date. A common example is the decision to terminate software contracts of the target post-acquisition.

In this circumstance, the buyer may have negotiated the termination cost into the acquisition price and cost to the selling shareholders, with a perception the cost will be recorded as a liability at the acquisition date. However, a liability or related expense isn’t incurred until the software is terminated — often post-acquisition — resulting in an expense to the buyer.

Many purchase and assumption agreements include purchase price allocations based on a target’s capital, as stated in accordance with generally accepted accounting principles. Applying a thorough due diligence process with an understanding of the concepts described above can improve buyer and seller expectation related to deal values and pro forma information results, resulting in accurate pro forma information that can help with expedited regulatory approval and depiction of the transactions post-close.

For more information on how issues in this article could affect your institution, reach out to your BKD trusted advisor.

April 2020

Oklahoma Banker

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Oklahoma Banker

April 2020

COVID-19 relief checks: what banks need to know

By Greg Friedman

Ultimately, an individual filer will be eligible to receive a check if their most recent tax return showed AGI below $99,000. The thresholds rise to $146,500 for headof-household filers with one child, and $198,000 joint filers with no children. If an individual is above these thresholds, they will not be receiving a check. Additionally, those without a Social Security number, nonresident aliens and individuals claimed as dependents are equally out of luck.

ceive Social Security payments, they also don’t need to take any action. The Treasury Department has said that the IRS will use the information on the Form SSA-1099 and Form RRB-1099 to generate the stimulus checks to Social Security recipients who did not file tax returns in 2018 or 2019. For individuals who do not have their direct-deposit account set up, paper checks will be mailed to them directly.

Associate General Counsel, Compliance Alliance

Unless you’ve been living under a quarantine rock, you’re undoubtedly aware that Congress passed, and President Trump signed into law H.R.748, better known as the CARES Act, on March 27, 2020. The Law provides multiple forms of relief, including the $350 billion Paycheck Protection Program and a delayed tax-return deadline of July 15. The most important form of relief however, is the disbursement of relief checks intended for the majority of Americans.

WHO GETS A CHECK? The majority of Americans are eligible to receive a stimulus check if they meet certain qualifications set-out in the Law. Specifically, eligibility will be based on each individual’s most recent tax return and adjusted gross income.

WHAT DOES THIS MEAN FOR YOU? Nearly all of your customers are expected to receive government-issued checks in the coming weeks. Should be simple, right? We’ve already seen an inf lux of questions regarding this program, and I’ve done my best to address the most common concerns below.

HOW WILL THEY SEND THE CHECKS? The IRS plans to use the direct-deposit information provided by filers for their 2018 or 2019 tax returns.

So for individuals who filed taxes in 2018 or 2019 with direct-deposit information, they don’t need to do anything; the check will be automatically deposited into the account. For individuals who don’t file taxes but do re-

Continued on next page

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April 2020 Continued from previous page

1. WHAT SHOULD YOUR BANK BE PREPARED FOR? You can expect quite a few questions from customers regarding when and how they will receive their checks.

Reading the first part of this article will provide you with all you need to know about the relief checks, so that’s an easy one. You should also be prepared to inform customers of where they can find guidance on this program.

• https://www.congress.gov/116/bills/hr748/BILLS116hr748enr.pdf - Section 2201 on Page 55 of the Law itself discusses this program.

• https://www.irs.gov/newsroom/economic-impactpayments-what-you-need-to-know – This IRS page is updated regularly to provide the most important information needed on the relief checks.

• https://www.irs.gov/coronavirus – This IRS page is tailored to provide help to taxpayers, businesses and tax-exempt organizations regarding the relief checks.

• https://home.treasury.gov/coronavirus – This Treasury Department page provides regular updates on the relief check program.

2. IF A CUSTOMER’S DEPOSIT ACCOUNT IS CLOSED, MAY WE REOPEN IT TO ACCEPT THE RELIEF CHECKS? There hasn’t been any specific guidance on this particular question at this point. Conservatively, we would advise not “re-opening” a closed account to accept a stimulus deposit, similar to the best practice recommendation for IRS tax returns. Re-opening a closed account without the consent of the account owner could raise UDAAP and potential legal issues, so tread lightly.

3. IF A CUSTOMER HAS A NEGATIVE BALANCE, CAN WE CHARGE-OFF THE ACCOUNT USING THE RELIEF CHECKS? While there hasn’t been any specific guidance issued on this question, your bank should consider the reputational risk of depositing funds and then using them to offset a negative balance.

Legal Update

21

4. CAN WE DEPOSIT INTO AN OPEN ACCOUNT AS LONG AS THE NAMES ON THE CHECKS ARE OWNERS ON THE ACCOUNT? Yes, the bank may deposit a relief check into an open account as long as the names to which the check is payable match the name/names on the account.

5. CAN THE BANK CHARGE A FEE TO CASH THE RELIEF CHECKS FOR NON-CUSTOMERS? There isn’t an express prohibition in charging a fee to cash the checks. The bank would just want to be sure that the fee is disclosed before the transaction is conducted to avoid any potential UDAAP issues.

PARTING WORDS Unfortunately, the IRS and Treasury Department haven’t issued too much guidance on these upcoming checks, so we’re all going to be figuring this out on the fly.

Stay on top of compliance issues with this monthly report from the OBA’s legal team.

At the OBA we understand the importance of receiving timely and accurate information about crucial issues facing commercial banking.

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Legal Update offers you an excellent opportunity to enhance and maintain your working knowledge of today’s changing and challenging banking environment.

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Oklahoma Banker

April 2020

Troglin

From Page 24

“Other times, I go with hiking groups, or my grandkids will go sometimes.”

Troglin is a part of Bold Betties, a group of women from all across the country who get together a couple times a year and participate in outdoor activities together.

“I’ve done rock climbing in Moab with them and then we did snow skiing in Breckenridge,” Troglin said.

“Most of the time we don’t have anything in common aside from our love of the outdoors.”

But the Bold Betties aren’t the only people Troglin enjoys staying active with.

Troglin has been a part of Legacy Bank for 24 years, and for the past 15, she has been friends with co-worker Andrea Mangus. Mangus has joined Troglin in her active endeavors, and their favorite thing to do together is spin class.

“Callie came to work one day in May and mentioned

she did a spin class. She said I was welcome to join her anytime,” Mangus said.

“Naively, I agreed, and she held me to it. Now I regularly attend spin class. It is now one of my favorite things. In fact, she encouraged two or three of our co-workers to attend.”

Troglin isn’t just a go-getter outside of work. Her co-workers love working with her and appreciate her friendship and mentorship.

Gaylene White, another co-worker and friend of Troglin, is grateful for Troglin.

“I love working with Callie because she is always encouraging, a great leader and just a fine example of the kind of person that I strive to be,” White said.

Mangus echoed White’s comment about Troglin.

“She is empathetic, funny and is willing to take time to listen,” Mangus said.

“She wants to do what she can to make others’ jobs easier.”

Troglin is a people person and loves the opportunity she gets to interact with others through her job.

“Getting to know customers on a personal level is what I enjoy the most,” Troglin said.

Troglin’s social lifestyle has unfortunately been affected during this unpredictable time. The coronavirus has caused her exercise classes to be canceled, and she is missing the time she typically spends with friends in class.

“I definitely miss that social interaction with people, you know, face to face,” Troglin said.

While she is missing her group classes, she has found plenty of ways to make up for them and is taking advantage of the outdoors. Troglin recommends getting outside and getting some fresh air to anyone who is able.

“It doesn’t cost anything, you don’t have to have any equipment or skills,” Troglin said.

“Absolutely go out and do it.”

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Bankers’ Resource Directory

Oklahoma Banker

April 2020

ACCOUNTING/AUDITING BKD CPAs & Advisors www.bkd.com Crowe, LLP www.crowe.com/banking Eide Bailly, LLP www.eidebailly.com

Farmers National Company www.farmersnational.com Floco Data 405-547-2989 Haberfeld Associates www.haberfeld.com Land Scout www.landscout.com

Finley & Cook CPAs www.finley-cook.com

McSwain Consulting www.mcswainconsulting.net

Fortner, Bayens, Levkulich & Garrison, P.C. www.fblg-cpa.com

Performance Trust Capital Partners www.ptcp.com

Grant Thornton LLP www.grantthornton.com

RDK and Associates, Inc. www.rdkonline.com

HoganTaylor LLP www.hogantaylor.com

Susan Orr Consulting www.susanorrconsulting.com Taylor Douglas Consulting www.taylordouglas.net

K•Coe Isom www.kcoe.com Steven D. Martin, CPA www.stevemartincpa.us McCormack and Associates, Inc. www.mccorm.com Peters & Chandler www.p-ccpa.com RSM US LLP www.rsmus.com Stinnett & Associates, LLC www.stinnett-associates.com Tom C. Pharaoh, PLLC 405-946-2260 The Whitlock Company www.whitlockco.com COMPUTER SOFTWARE & HARDWARE American Bank Systems www.americanbanksystems.com Bancsource www.bancsource.net BankOnIT www.bankonitusa.com CNET, Inc. www.cnetokc.com CSI www.csiweb.com DataScoutPro www.datascoutpro.com Finastra www.finastra.com Green Check Verified www.greencheckverified.com Jack Henry and Associates Inc. www.jackhenry.com Modern Banking Systems www.modernbanking.com Nicola Banking Systems www.nicolabanking.com Paycom www.paycom.com CONSULTING  Bank Compliance.com 

www.bankcompliance.com Cross Check Compliance, LLC www.crosscheckcompliance.com  Compliance Alliance  www.compliancealliance.com CoNetrix www.conetrix.com

CYBERSECURITY Alias Forensics www.aliasforensics.com JMARK Business Solutions, Inc. www.JMARK.com Matrixforce www.matrixforce.com SBS CyberSecurity www.sbscyber.com Verafin www.verafin.com ELECTRONIC FUNDS TRANSFER Shazam Inc. www.shazam.net EQUIPMENT/SYSTEM Bank-Tec South www.bank-tecsouth.com Black Mesa Security www.blackmesasecurity.com Catch 21, Inc. www.catch21.com Dobson Technologies www.dobson.net Equips www.equips.com Federal Protection www.federalprotection.com Financial Equipment Co. www.financialequipment.org Fiserv www.fiserv.com Mick’s Vault Works www.micksvaultworks.com MPA Systems, LLC www.mpasystems.com NuSource Financial www.nusourcefinancial.com Smith Hamilton www.smithhamiltoninc.com Telecomp www.telecomp.com Verge Network Solutions, Inc. www.vergenetworks.com EMPLOYMENT Career Specialist, Inc. www.csibanking.com FINANCIAL SERVICES

 Equias Alliance  www.equiasallliance.com

Abrigo www.abrigo.com American Collection Services www.americancollectionservices.com

Everett Advisory Partners www.everettadvisory.com

The Baker Group www.gobaker.com

BALANCE www.balancepro.org Commerce Street Capital www.commercestreetcapital.com Country Club Bank Capital Markets Group www.ccbcm.com D.A. Davidson & Company www.dadavidson.com The David Capital Group, Ltd www.davidcapitalgroup.com  Deluxe Financial Services  www.deluxe.com Equify Asset Services www.equifyfinancial.com Farmer Mac www.farmermac.com FHLBank Topeka www.fhlbtopeka.com Financial Consulting Inc. www.fciok.com.com First Bankers’ Banc Securities www.FBBSinc.com FHN Financial www.fhnfinancial.com Gateway Mortgage www.gatewaymortgage.com Hunt Financial Group www.huntfinancialgroup.net Insured Aircraft Title www.insuredaircraft.com KASASA www.kasasa.com MetaFund www.metafund.org Midwest Housing Equity www.mheginc.com Mortgage Investment Services Corp. www.mischomeloans.com Myriad Advisor Solutions www.myriadas.com Oklahoma Finance Authority 405-842-1145 PNC Financial Institutions Group www.pnc.com/fig PPDocs, Inc. www.ppdocs.com Promontory Interfinancial www.promnetwork.com Reich & Tang www.reichandtang.com REI Oklahoma www.reiok.com Texas Capital Bank www.texascapitalbank.com Wells Fargo www.wellsfargo.com Western Technologies Group, LLC www.wtgroupllc.com Windsor Mortgage Solutions www.mortgageties.com INSURANCE Advantage Health Plans Trust www.advantagehealthplanstrust.com AmTrust North America www.amtrustfinancial .com Bankers Healthcare Group www.bhgbanks.com Berkley FinSecure www.berkleyfinsecure.com  Comp Risk Management  www.comp-risk.com Courtesy Insurance Agency www.ciaokc.com First Life & Casualty Re-Insurance www.ipa-ok.com Insurica Insurance Management Network www.insurica.com  KeyState  www.key-state.com

23

 = endorsed vendor

Lee Daniells & Associates www.lee-daniells.com Summit Consolidated Group www.yoursummit.com Travelers Insurance www.travelers.com WGA Benefit Consultants www.wgabenefitconsultants.com Wichita National Life Insurance Co. www.wnlic.com LEGAL SERVICES Christensen Law Group www.christensenlawgroup.com Conner & Winters, LLP www.cwlaw.com Crowe & Dunlevy www.crowedunlevy.com Drummond Law www.drummond.law Fenimore, Kay, Harrison & Ford, LLP www.fkhpartners.com Hall Estill www.hallestill.com Hunton Andrews Kurth www.huntonak.com Law Office of Liz George, PLLC www.georgelawokc.com McAfee & Taft www.mcafeetaft.com Phillips Murrah, P.C. www.phillipsmurrah.com Piper Sandler www.pipersandler.com SpencerFane www.spencerfane.com MISCELLANEOUS Absolute Data Shredding www.shredok.com Cherokee Nat’l Small Bus. Asst. Center www.cherokee.org/sbac Citizen Potawatomi Community Dev. Corp. www.cpcdc.org EverFi, Inc. www.everfi.com MIDCON Data Services, LLC www.midcondata.com Oklahoma State Banking Department www.ok.gov/banking Oklahoma Water Resource Board www.owrb.ok.gov  Purple Wave Auctions 

www.purplewave.com

 Regulatory Feedback Initiative 

www.allbankers.org Southwestern Stationery & Bank Supply, Inc. www.southwesternok.com State Chamber of Oklahoma www.okstatechamber.com  Thumbprint Signature Program  405-424-5252 MARKETING Wilken Communications 405-623-0718  Works24  www.works24.com SUPPLIES  Office Depot  www.business.offficedepot.com Versateq, LLC www.versateq.com

VENDOR MANAGEMENT Karns Profit Improvement www.profitimprovement.com

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Oklahoma Banker

April 2020

n BANKER SPOTLIGHT

Outside time

By Cami ten Napel

Communications Assistant

“Gym closed, spin classes canceled … thank goodness you can’t close the outdoors!!”

This Facebook post comes from Callie Troglin, vice president and branch manager at Legacy Bank in Oklahoma City. Coronavirus has brought social interaction to a screeching halt and has challenged many people to get creative with how they stay active.

For Troglin, though, there is nothing like being outside. She craves the fresh air and adventure and will try out almost any activity that gets her moving.

“I think nature is just a really good prescription for you overall. It’s a great stress reliever and it gets you away from technology so you can mentally, kind of, refocus your mind,” Troglin said.

Troglin participates in a long list of outdoor activities such as hiking, skiing and horseback riding. She believes any kind of exercise is a great way to release endorphins and will set goals for herself to achieve within her active lifestyle.

“I have a goal of visiting every state park in Oklaho-

Outdoorsy — While many of us are stuck inside during the COVID-19 quarantine, Legacy Bank’s Callie Troglin can at least look back on her far-flung outdoors adventures at places such in Moab, Utah (above left) and Rocky Mountain National Park in Colorado (above right). Troglin, a staunch lover of the outdoors, still finds time to get outside and get her exercise even during these difficult times.

ma. I have visited almost all of them, I’ve just got a couple more to still go see,” Troglin said.

“Seeing new places, going all over Oklahoma to visit these state parks has been really a lot of fun. We have a pretty diverse landscape in Oklahoma.”

Achieving this goal hasn’t always been smooth sailing for Troglin and has given her some funny stories to tell.

When she first began her journey to visit every state park in Oklahoma, Troglin would go every weekend to a new park, set up her tent and camp. She said every single weekend she went in the beginning, it rained.

“People started joking, later in the summer when it got dry. They would ask me to come set up my tent in their yard so it would rain,” she said.

Deciding which outdoor activity is her favorite was not

an easy task for Troglin, but she ultimately decided horseback riding in the mountains of Colorado could not be beat.

“We just don’t have anything like that here. It is completely off the grid. The group of us will tent-camp and, you know, sitting around at night where you can’t get any cell phone service,” Troglin said.

“Just being able to sit and talk to each other and just really get back to personal connection.”

While she treasures these moments spent with friends, it doesn’t matter to Troglin if she goes on adventures alone or with others, she sees advantages to both.

“I go by myself sometimes just because, like I said, it’s very good stress relief. Just to get off on your own and just explore,” Troglin said.

See TROGLIN on Page 22