Connecticut Banking 2Q 2012

Second Quarter 2012

SURVEY SAYS: CONNECTICUT BANKS ARE STEPPING UP Contributions Rise An Astonishing 75 Percent

MEET THE CSFM CLASS OF 2012 REGULATORY COMPLIANCE FOR COMMERCIAL LENDERS BE THE BEST CRO YOU CAN BE

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Second Quarter 2012

SURVEY SAYS: CONNECTICUT BANKS ARE STEPPING UP Contributions Rise An Astonishing 75 Percent

MEET THE CSFM CLASS OF 2012 REGULATORY COMPLIANCE FOR COMMERCIAL LENDERS

COVER STORY

BE THE BEST CRO YOU CAN BE

Connecticut Banks Are Stepping Up............................................ 16 The results of the 2011 Community Involvement Survey are in.

CONNECTICUT BANKERS ASSOCIATION

10 Waterside Dr. Farmington, CT 06032-3083 Telephone: 860-677-5060 • Fax: 860-677-5066 Chairman Martin J. Geitz

Second Vice Chairman Chandler J. Howard

First Vice Chairman John J. Patrick, Jr.

President & CEO Gerald M. Noonan

President & CEO Simsbury Bank

President & CEO Liberty Bank, Middletown

Chairman, President & CEO Farmington Bank

Senior Vice President & Secretary Lindsey R. Pinkham Vice President & Treasurer Thomas S. Mongellow Vice President Colleen E. Clancy Vice President & Director of Education Mary Beth Nelsen

Page 4

FEATURES

CFSM Class of 2012............................................................ 4 Strategic Insights Into Compliance Costs............................... 5 Ten Things Commercial Lenders Should Know About Regulatory Compliance..................................................... ....6 Understanding How Data Breaches Can Occur.................... 8 2012 CBA Calendar........................................................... 10 Twenty Questions (and Counting) for Risk Managers........... 12

Connecticut Banking is an official publication of the Connecticut Bankers Association and is published quarterly by

The Warren Group Design / Production / Advertising www.thewarrengroup.com custompubs@thewarrengroup.com With the exception of official association announcements, the Connecticut Bankers Association and The Warren Group disclaim responsibility for opinions expressed in Connecticut Banking. This publication is intended and designed to provide accurate and authoritative information, not to provide legal, accounting or other professional advice.

CONNECTICUT BANKING

Editor Colleen E. Clancy

©2012 The Warren Group Inc. All rights reserved. The Warren Group is

a trademark of The Warren Group Inc. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the publisher. Advertising, editorial and production inquiries should be directed to: The Warren Group, 280 Summer Street, Boston, MA 02210. Call 800-356-8805.

Page 24

Page 26

Banks in the News..................................................................... 20 Bankers in the News.................................................................. 26

3

Connecticut Banking Magazine • Second Quarter 2012

Class of 2012

Connecticut School of Finance & Management

51 happy graduates.

T

he Connecticut Bankers Association has a busy calendar of events each year. One of the more anticipated and enjoyable events is the graduation ceremony held each spring for the second-year students enrolled in the Connecticut School of Finance & Management.

The school is the premiere management training program offered by the Association.

The CBA is pleased to announce that 51 students in the school’s class of 2012 graduated on March 28, 2012. One of the many highlights of the graduation ceremony was the awarding of the John C. Shortell Award for Academic Excellence to Annie Mohanty of Rockville Bank. This award is presented to the student who achieves the highest academic rating while attending the Connecticut School of Finance & Management.

With this ceremony now just a memory, there are now 2,224 individuals who have successfully completed the program requirements and have received their CSFM certificate of completion.

Congratulations to the 51 members of the class of 2012.

Picture Your Employees Or Yourself Here Annie Mohanty, Rockville Bank (center), winner of the John C. Shortell Award for Academic Excellence, is congratulated by Martin C. Geitz, CBA chairman and president and CEO of Simsbury Bank (left) and Lou Ferreira, CBA Management Development Committee chairman and vice president and SLO, Stafford Savings Bank.

4

The CBA has released the syllabus for the class of 2014. The syllabus includes course descriptions, class schedules, fees associated with attending and much more. Applications are due

by June 15, 2012. u

Second Quarter 2012 • Connecticut Banking Magazine

Strategic Insights Into Compliance Costs

By Arthur L. Loomis, II

I

n recent years, many community banks have cited rising uncontrollable compliance costs as a reason for selling or merging with another bank. While compliance costs have continually risen over the past 10 years, we sought to establish whether their inexorable rise was really critical to the long term viability of a community bank. To begin to get a sense of the issues magnitude, we sought to obtain direct information from community banks. The survey was distributed to over 300 community banks, predominately in New York or New England.

Among the compliance questions asked were last three year’s cost, expected future trends in costs, where these costs are expected to grow most, how the bank expects to address compliance, whether by building its internal capacity or outsourcing, and what the quality of the compliance service was.

We also inquired as to their data processing and security/ fraud cost trends, the quality of the service provided by these outsourced entities, as well as the prioritization of challenges to their bank over the next five years. These results will be the topic of future articles.

The survey’s 27 respondents have total assets between $50 million and $4.5 billion, and reflect data over the past three years, 2009, 2010 and 2011.

The responding banks had median total assets of $470 million, 102 employees and eight branches at year end 2011. The middle 50 percent of the banks were between $256 million and $67 million in total assets, 60 to 189 employees, and three to 14 branches.

Compliance costs, as a percentage of average assets (in basis points), remained fairly constant between 2009 and 2011, as shown in chart (below):

The bad news is that the overall data suggests that compliance costs before Dodd Frank rose alarmingly between 2009 and 2011. For the median respondent, with assets of $470 million, compliance costs rose to $185,000 in 2011 from $131,000 in 2009, nearly a 19 percent annual increase. For the average respondent, which had assets of $625 million, compliance costs rose to $346,000 in 2011 from $288,000 in 2009, or nearly a 10 percent annual increase.

Looking forward, over 70 percent of these community banks anticipate compliance costs will grow $50,000 per year, at least.

That means annual increases of perhaps 14 to 25 percent! Just 15 percent felt compliance costs would stabilize in the coming years.

In terms of dealing with compliance issues and its related expense, 18 percent of the community banks anticipate help from their state associations or joint ventures, while 26 percent expect to use internal resources. Over 49 percent believe they will use a combination of internal and other external resources (not state associations or joint ventures), whereas only 7 percent expect to only rely upon external service providers.

Somewhat surprising, respondents also felt by an overwhelming majority (74 percent), that compliance costs will grow the most in the compliance function, and not in front line or delivery of products and services. We wonder if this opinion is just the tip of the iceberg, as we are concerned that the front line compliance costs will mushroom in the years ahead.

Another piece of good news was that all the community banks were generally pleased with their external compliance providers, with the largest bank segment ($75 million or more) reported extremely satisfied performance (B+ average), while the $401 to $750 million segment and those smallest banks surveyed were still satisfied (B average).

Based on the survey’s responses, it appears that compliance costs have yet to approach the smothering levels some pundits have led community bankers to believe. However, based upon these same bankers’ expectations of future substantial increase, it may be an early warning of uncontrollable expenses which enables astute bankers to develop strategic plans which affect or mitigate the damage to operating profits. u

Median Compliance Costs Number

2009

2010

2011

Banks Under $400 million

10

5.40

5.73

6.62

Banks $401 to $750 million

12

5.01

4.62

5.13

Banks $751 million plus

5

1.23

1.15

1.61

TOTALS

27

4.70

4.99

5.32

Art Loomis is the CEO of Northeast Capital & Advisory, Inc., a boutique investment bank with offices in Albany and Boston, which offers strategic planning and community bank consulting services, M&A transaction advice and fairness opinions, and capital financings.

These results corroborate the belief that compliance costs are not terribly variable. Rather, they tend to represent a more fixed cost. They also appear to be fairly modest in magnitude, as 2-5 basis points is far from the 50-100 basis points in after tax ROA most banks generate. That was the “good” news.

5

Connecticut Banking Magazine • Second Quarter 2012

Things Commercial Lenders Should Know About Regulatory Compliance

By Norman H. Roos and Travis R. Searles commercial purpose, the loan documents should clearly set forth that purpose, and the loan document package should include a separate, carefully drafted statement of business purpose.

3

Commercial Loans Secured by Consumer Collateral

4

Owners, Principals and Guarantors

5

Anti-Discrimination Laws

6

Spousal Signatures Under ECOA

If a borrower’s business and/or collateral involves consumer products and services, a commercial lender needs to ensure that its borrower has complied with applicable consumer laws and regulations in order to avoid successor liability issues. For example, if the borrower extends consumer credit, then it must comply with all applicable consumer credit laws. Otherwise, if the lender were to foreclose on the consumer collateral, the commercial lender could be subject to consumer claims or defenses.

Consumer compliance obligations can also apply to commercial lending activities because the individual principals of a business borrower and individual guarantors are covered by various consumer protection laws. For example, if a commercial lender seeks to evaluate the credit-worthiness of an individual guarantor, the lender must comply with the Fair Credit Reporting Act and state privacy law requirements.

1

Commercial Lenders Need to Know about Regulatory Compliance

2

‘Commercial’ Loans Can Become ‘Consumer’ Loans, if not Properly Drafted

The Equal Credit Opportunity Act (ECOA) applies to commercial lending as well as consumer lending transactions.

ECOA prohibits lenders from discriminating on any of several protected classes, including race, religion, national origin, marital status and gender. ECOA also imposes specific requirements and restrictions governing credit application and underwriting procedures. Another federal anti-discrimination law that applies to commercial lending is the Community Reinvestment Act (CRA). By its express terms, CRA prohibits discrimination in “small business lending.”

Commercial lenders sometimes labor under the mistaken belief that their activities are not subject to regulatory scrutiny. This is a mistake that can have adverse consequences for the unsuspecting commercial lender. As discussed below, all commercial lending transactions are subject to state and federal regulation, and some commercial transactions are also subject to consumer protection laws.

Commercial loan documents should be drafted with care to avoid having a commercial loan transaction re-characterized as a consumer loan. Re-characterization as a consumer loan can subject the lender to liability for failure to comply with various consumer lending laws, including the Truth-in-Lending Act and Regulation Z, RESPA and state licensing laws. If a loan is for a

The ECOA rules regarding spousal signatures have been a particularly thorny issue for commercial lenders. Generally speaking, it is not permissible to obtain a spouse’s signature on a loan document unless the spouse’s credit-worthiness or assets are being relied upon by a lender in extending credit to the borrower.

6

Second Quarter 2012 • Connecticut Banking Magazine

7

Reporting and Disclosure Requirements

CERCLA, which imposes strict liability upon the owner of noncompliant property.

The Fair Credit Reporting Act (FCRA) and the Home Mortgage Disclosure Act (HMDA) also apply to certain commercial lending transactions. FCRA governs the gathering and re-disclosure of credit-related information on individuals (such as guarantors). HMDA imposes certain reporting obligations for the extension of “home improvement loans” and “home purchase loans,” both of which are applicable to a business borrower’s purchase of multi-family dwellings.

10

Privacy Laws

Federal privacy laws such as the Gramm-Leach-Bliley Act (GLB) safeguard the privacy of a consumer’s “non-public personal information.” Commercial lenders often obtain information protected by GLB when evaluating principals, executives or guarantors of a business borrower. Compliance with GLB is mandatory in such circumstances. Also, every state has its own privacy laws, which can be broader and more onerous than GLB.

8

The PATRIOT Act

Title III of the PATRIOT Act requires commercial lenders to, among other things, implement Customer Identification Procedures (CIP) under which the lender must obtain certain information on all borrowers, compare that information to government lists of suspected terrorists, and (where appropriate) report such information to governmental authorities.

Regulatory scrutiny of financial institutions has reached unprecedented levels in the wake of the 2008 Wall Street meltdown. In that context, it is vital for commercial lenders to assess and address their regulatory compliance obligations – including those obligations referred to above. u

9

Real Property Collateral Issues

Norman H. Roos is chair of Robinson & Cole LLP’s Finance Practice Group and has been advising banks, insurance companies, diversified financial service companies, and other publicly and privately held entities on a broad range of regulatory and transactional matters for over 30 years. Travis R. Searles, an associate with the firm, practices in the firm’s Finance and Business Transactions Practice Groups.

Commercial real estate collateral is subject to numerous federal and state regulations including the Americans with Disabilities Act and environmental laws such as the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). Commercial lenders need to address their borrower’s compliance with these laws – particularly

7

Connecticut Banking Magazine • Second Quarter 2012

Understanding How Data Breaches Can Occur

By Gerald Gagne, CPA, CISA

T

he success of a financial institution is built on customer service and its reputation in the community.

A bank or credit union may have built up goodwill over decades, but it could come undone in a matter of hours if a highly publicized security breach comprises private customer information. This will not only cost an institution its reputation, but also tens of thousands of dollars in fixes and possible fines.

It is essential that companies take all precautions available to them and create a robust information security plan to protect the personal information they hold Gerald Gagne on their customers and employees.

To be prepared, it’s important to know what kind of threats are out there.

No matter the size of the financial institution, there are a number of ways for hackers or cyber-terrorists to permeate into an IT system. Here are some of the major attacks and exploits out there today: Technical vulnerabilities – these come in the form of missing patches for software defects, using outdated systems and applications, zero day attacks that occur before defects are realized, and custom exploits that take advantage of specific vulnerabilities.

Malware are computer viruses, worms, Trojan horses and backdoors.

Insecure ports and services – those web-based tools or access points that are vulnerable to attack.

Compromised user credentials, such as passwords and user names that are no longer secret.

Rise of the ‘Opportunistic’ Attack The large-scale hacks of the past are in decline and smaller attacks, called “opportunistic” attacks, which exploit the

vulnerabilities and methods mentioned above, are on the rise. These attacks result from a lack of basic security controls, such as: • Not using passwords or using default passwords.

• Not installing patches for known exploits.

• Not building secure and properly configured firewalls.

• Not installing the latest anti-virus software.

• Not having adequate monitoring procedures.

In the last few years, hackers and cybercriminals have turned to one of the oldest criminal practices to find vulnerability in a company: Exploiting people’s behavior. The term for this is “social engineering,” which is when a criminal exploits a person’s desire to be helpful, or their greed, causing them to put aside their better judgment even for a moment. Cybercriminals combine this ancient art with the latest technology to gain access to the information they need.

Some of the high tech social engineering techniques used today are: Phishing – using fake emails from seemingly legitimate entities to trick a person into revealing important information like passwords and usernames.

Spear phishing – a more personalized and direct version of phishing that uses fake emails that appear to come from entities, like Facebook, and are personalized to the victim to appear more trustworthy.

Vishing – using Internet-based phone systems to avoid tracing and caller ID, and tricking victims into revealing their personal information.

Baiting – purposely leaving behind removable media such as thumb drives and CD-ROMS for the curious to take 8

and plug into their computer, which contaminates the computer with a virus.

Hackers and cyber criminals use a powerful computer-based tool to get the information they need for social engineering: Social media. Very often, people put enough personal and work information on their Facebook or LinkedIn pages that allows the cybercriminal to target them individually and appear to be a friendly source.

However, it is possible to prevent social engineering scams through best practices, including: Training staff to be aware of scams and to keep their work and personal worlds apart.

Installing and using strong email filtering programs that sift out malevolent spam.

Regularly installing and updating anti-virus and anti-malware protections.

Utilizing sophisticated data loss prevention software to analyze the use and movement of important information.

Beefing up or adding web filtering software to prevent the use of social media sites, personal email, and instant messaging in the workplace.

Old fashioned physical security – locking things up.

Data Breach Cause and Effect It seems there are more stories than ever on security breaches in the news, and very often they result from the following problems: • Stolen laptops.

• Stolen paper reports.

• Hacking incidents.

• Vendor mismanagement.

• Improper destruction of files.

• Lost backup tapes.

• Dishonest employees selling information.

According to the nonprofit watchdog group Dataloss Database, through July

2011, there were 369 reported incidents of security breaches that involved personal information. This loss represents approximately 127 million records.

The costs resulting from security breaches are very real and very high.

According to the Ponemon Institute, in 2008, the cost per record borne by an organization was $202 per compromised customer record. In 2011 it went up to $214. The average total per-incident cost in 2010 was $7.2 million, compared to $6.65 million in 2008.

As data breaches increase, more regulations will follow, which will add to the financial and reputational costs that come with each incident. Massachusetts already has the toughest data privacy law in the nation, and it is in full effect. The law, commonly referred to as CMR 17, or the Massachusetts Data Privacy Law, holds entities accountable for a security breach by establishing a minimum standard that must be met in areas like encryption of data and storage of documents that contain personal information. It is very possible for companies to face fines, possible civil action and further public exposure from this new law. However, by creating and implementing a data security plan, a company can be in compliance with the law and avoid becoming prey to cybercriminals.

Computers and web-based tools provide financial institutions and companies with great opportunities and advantages. However, with these opportunities come greater risks. By observing best practices, putting in place a security plan that includes vendors and hiring top consultants, a company can dramatically increase its ability to stave off hackers and cybercriminals and prevent data breaches. u Gerald Gagne leads Wolf & Company’s Risk Management Services Practice where he is responsible for the successful delivery of risk management services to clients.

His expertise includes IT risk assessments, customer information privacy reviews, application and network security reviews, Internet intrusion studies, war dialing and social engineering. He can be reached at (617) 439- 9700 or ggagne@wolfandco.com.

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Connecticut Banking Magazine • Second Quarter 2012

CBA CALENDAR MONTH

2012-2013 MEETING/EVENT

LOCATION

6

Legislative Seminar

Crowne Plaza, Cromwell

8

IT Audit Training Seminar

Crowne Plaza, Cromwell

12

Work of Leadership/DiSC Styles

CBA, Farmington

14

Time Management Seminar

Crowne Plaza, Cromwell

CCBA Annual Meeting

Cranwell Resort, Lenox, MA

22

IT Committee

Hawthorne Inn, Berlin

22

Management Development Committee

Hawthorne Inn, Berlin

25

CFT Bankers’ Forum

Tunxis Plantation, Farmington

JULY

4

Independence Day

SEPTEMBER

3

Labor Day

JUNE

DATE

14-17

9-11

OCTOBER

CSFM Resident Session 2013 & 2014

Trumbull Marriott, Trumbull

18

Asset/Liability Management

Crowne Plaza, Cromwell

24

CBA Annual Golf Tournament

Country Club Farmington

27

Directors & Trustees College

Crowne Plaza, Cromwell

2

Bank Security Seminar

Crowne Plaza, Cromwell

8

Columbus Day

14-17

ABA Annual Meeting

18-21

CBA Annual Meeting

San Diego, CA

24

CSFM Monthly Session

Crowne Plaza, Cromwell

7

CSFM Monthly Session

Crowne Plaza, Cromwell

12

Veterans Day

22

Thanksgiving Day

29

Legislative/Executive Committee Meeting

Hawthorne Inn, Berlin

4

CSFM ’13 Monthly Session

Crowne Plaza, Cromwell

5

CSFM ’14 Monthly Session

Crowne Plaza, Cromwell

JANUARY

17

New Leaders Awards Dinner

2013

18

BankWorld Expo

MGM Grand, Foxwoods MGM Grand, Foxwoods

NOVEMBER

DECEMBER

10

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Twenty Questions (and Counting) for Risk Managers

By David Sidon

A

re you old enough to remember the game Twenty Questions?

Wikipedia’s description: “Twenty Questions is a spoken parlor game which encourages deductive reasoning and creativity.”

If you have just been named as your institution’s risk manager or chief risk officer (CRO) you probably have at least 20 questions, as do the executives who appointed you. And like the game, the questions are fairly standard from bank to bank.

Question 1: What is the CRO’s job description? It is perhaps best stated as “oversight of the institution’s enterprise risk management process and its myriad disparate risk silos.” But the day-to-day requirements call for questioning everything.

12

Consider this. You have just been made CRO for the frat or sorority house at the state university. What is your role on Saturday night? Checking IDs at the front door or looking for people sneaking in the back door? Checking what goes into the punch? Bed check? Out on the front lawn keeping an eye out for the campus police?

You’re responsible for all that and more.

Pretty much a lose-lose position. Do your job and you’re seen as the conservative campus curmudgeon. And if something goes wrong, you’re to blame.

Which brings us to Question 2 – as Ford famously framed the question; What is Job 1? Job 1 is probably asking these questions and implementing structure and process to build the accountability, responsibility and clout that gives you, as the CRO, both a seat and a voice at the executive table.

The consideration of your executive role, or at least your “mesh” with the executive team spawns Questions 3 through 5: What does the CRO do that the CEO does not do? What is your authority day-to-day? What is your responsibility as whistle-blower? For small institutions, the CEO is the CRO. Period. All major decisions emanate from the corner office. The CRO is generally out of that picture, transforming many risk positions into mere compliance administration. So, is your authority characterized as pro-active day-to-day, or reactive as whistle-blower? It’s a mix of both.

Questions 6 and 7 dovetail: Can you be effective if you are home-grown?

What if you already know these people and this business model? This is an

important and often overlooked issue.

Many institutions have created the risk position around the individual seemingly best suited to the role. This could be the COO, the audit manager, the compliance manager, the CIO, or perhaps a soon-toretire individual who can be moved aside to make way for a new strategic hire.

The concept of risk manager has been likened to police internal affairs. Once you take on that internal policing role, you are required to sever all previous “friendliness.” I think that’s too severe, but how do you jump up the organizational chart to a position that needs to ask critical questions of lending or finance?

Aren’t the respective managers the experts? The risk manager’s autonomy, however, is entirely similar to that of our traditional internal audit department.

Questions 8, 9, 10 and 11: How strong a voice must CRO have? How senior?

With a seat at the executive table?

How wide should the risk manager’s responsibilities and authorities range?

My answers to the first three: A CRO needs a very strong voice as a senior manager with a key seat at the executive (and perhaps board) table. These three qualifications set the tone for establishing the range of responsibilities and authorities.

Question 11: If the role of the CRO is based on an enterprise-wide risk management philosophy, doesn’t this set of questions answer itself? Global reach, and the awareness and ability to delve into each area of the institution are important.

Perhaps most important is the ability to see how all the functional areas mesh.

In this capacity, the CRO is perhaps the keeper of the business and process flow integration blueprint.

Here’s an example of responsibility, role and reach. Credit concentrations are a hot topic. The OCC published new guidance in December and policies, procedures and reports attendant to the issue of concentrations of credit are being re-examined and reconsidered.

13

Who’s responsible? The senior lender.

For what? Policy, procedure and metrics.

What is our CRO’s role here? If the CRO merely monitors that the lending group is aware of the new guidelines, has reviewed policies and procedures in light of the new guidance, and has created and presented reports with properly calculated concentration metrics, then we have taken on the compliance admin moniker we are being careful to avoid.

This is where the CRO can start asking questions: What does this analysis tell us? Are the metrics consistent with our strategies? With our budget? With our incentives? Do we need to be worried? Do we need to change our approach? Which concentrations should give us pause? In short, did we merely conduct the analysis for regulatory appeasance, or have we

reached a moment of affirmation? Or conversely, have we reached a “so now what” moment? If the CRO has a strong voice, speaking from a senior position at the executive table, this questioning should be expected and respected.

Question 12: To whom do you report?

This is a functionally-reporting versus administratively reporting moment. The key factor, however, is independence, and we should look to traditional structures for internal audit managers as guidance.

Question 13: If no real internal auditor is designated, who is it? You? Smaller institutions in which the internal audit function is completely outsourced struggle with this question, and the appointment of a risk manager may help with this dynamic. The risk manager continued on next page

Bankers Search LLC

Member Conn. Bankers Assn.

National Banking Network Member CCBA

continued on page 14 13

continued from previous page

THE RISK EXERCISE IS OFTEN CLOUDED BY TRADITIONAL BIASES AND “OVER-WEIGHTING.” REPUTATION AND COMPLIANCE RISK ARE BOTH TERRIFIC EXAMPLES OF OVER-COOKING. is not an auditor, but his/her role very naturally may assume the audit liaison role, with internal, external and regulatory audits. The risk manager can logically take over the audit issues tracking function, reporting typically to the audit committee (or audit and risk committee, as some banks have re-energized and rechartered).

Question 14: What is the risk manager’s relationship with the audit committee? Direct report, for starters. And similar to the leadership and choreography role played by audit managers, the risk manager may “shepherd” the meetings; scheduling, planning, and report distribution.

Questions 15 and 16 represent

2012

my audience participation moment when doing “Twenty Questions” as a presentation. Would you change the audit/risk committee dynamic/charter?

How?Discuss.

Question 17: Assessing risk – what does “high-moderate-low” mean in your world? Risk appetite is defined as the amount of risk an entity is willing to accept in pursuit of value. How is this assessed? Risk is in the eye of the beholder, and the question of consistency always arises. Who ultimately referees?

Somebody has to. Each functional area views risk through its own functionality lens, making enterprisewide assessment complicated. Highmoderate-low is subjective, judgmental

educate

and fickle. What’s the measuring stick or key metric? In March 2011, the OTS issued a CEO memorandum addressing capital management. It turns out to be a terrific risk management publication, in my opinion. In addressing capital management and suggesting that banks establish their own capital targets (the presumption being that the targets be “tougher” than regulatory rules), a list of enterprise risks is delineated, with capital ratios as key metrics; our measuring stick. All risk managers should have this memorandum in their toolkit.

The risk exercise is often clouded by traditional biases and “over-weighting.”

Reputation and compliance risk are both terrific examples of over-cooking.

Relatively small risks that might result in a handful of disgruntled or lost customers and similarly, small risks that are easy targets for examiners (HMDA and flood insurance compliance come immediately

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14

to mind) get lots of ERM attention and weight. Meanwhile, unmonitored problems may lurk. What about an institution that has poor employee performance review files coupled with sloppy and ill defined termination procedures? Wrongful termination lawsuit lurking? More impactful than HMDA violations? Any of the audit budget directed to this subject? Why not?

Question 18: How do you guide your bank, staff and auditors for a consistent approach to risk definitions? This is difficult to define within an individual bank, and equally difficult for the entire fleet of risk consultants, risk system providers, external audit firms, internal audit firms and regulatory examinations privy to the institutions’ risk environment.

Careful definitions that capture relativity should provide a working model from which thoughtful risk discussions may spring. Because, in the end, the risk

15

designation is a collaborative metric, serving as the starting point, and then memorializing the risk analysis/discussion with an end result – or, at least as much of one as a dynamic risk assessment might provide.

Question 19: How do the risk committee or audit committee weigh in on risk appetite? Ideally, they set the parameters. Risk appetite and risk rating definitions at the ERM level may provide interesting board retreat subject matter.

And if the board has set the definitions, the risk manager need only interpret and enforce.

Question 20: What if risk management becomes merely compliance admin? This is the pitfall facing and confounding risk managers and CROs. Institutions are establishing top level risk positions, only to pile on so much risk minutiae as to blur the vision.

How does the risk manager push back?

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The answer is now often found in shifts in organizational architecture. Meet the risk department! Compliance, BSA and other risk areas may now report into a CRO as an overall consolidator, a clearing house for all things risk.

To end where we began, our Wikipedia description describes a game that “encourages deductive reasoning and creativity.” Thinking of the CRO role, I might change that to deductive questioning and creative re-focus on the results of risk assessments; not the “doing” or forensics of risk assessments, but rather the informative gathering of the implications of what the risk assessment discovered or uncovered. u David B. Sidon, CPA, is principal of The Navis Group, a risk management consulting firm based in Gloucester, Mass., specializing in enterprise risk management and business continuity planning.

CONNECTICUT BANKS ARE STEPPING UP

By Kristin Cantu

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hen it comes to taking the pulse of a community, traditional retail banks are one of the first places to check. Employees can be found on nonprofit boards, organizing food drives and even serving as a member of a town’s chamber of commerce.

A bank’s success depends greatly upon the economic strength of its town and community members, who look to banks for guidance and support. So it should come as no surprise that in the 2011 Annual Community Involvement Survey, the Connecticut Bankers Association found that charitable donations and the number of employees who donate time to community activities were up by a staggering 75 percent and 153 percent, respectively.

A total of 41 banks participated in the survey and reported $31.5 million in charitable contributions were made to 10,509 organizations during 2011. More than 11,000 employees (not including directors) volunteered 217,581 hours of their time last year.

Connecticut banks are proving that being invested in its communities is engrained in how they do business.

Farmington Bank has three focuses in its grants, including community investment, Traczyk said. This is “really looking at investing in those key institutions in a community that help define [it].” Grantees that fall into this category include the Farmington Symphony Orchestra, local baseball leagues, Junior Achievement and historical homes.

Another focus of the foundation is economic empowerment, which includes working with organizations that assist families and individuals in areas such housing and job education. “The idea is [to] improve economic status,” she said.

The last focus is health and wellness – “working with families and individuals in making changes in their behavior or lifestyle which impacts their health going forward over a long period of time,” Traczyk said. The idea is that “if you have people who are healthier, they’re more productive at work. It’s kind of a win-win for everybody.”

Simsbury Bank’s charitable contributions come out of its annual operating budget, said Martin Geitz, bank president and CEO, and Connecticut Bankers Association chairman.

“We look at organizations who need support in two ways,” said Geitz. “One is from the point of view of economic well-being and the quality of life of the communities that we’re serving. The other is trying to find opportunities for us to inform people about what Simsbury Bank is doing.”

Many organizations that Simsbury Bank support are “fundamentally in the education business,” he said. The bank’s support also ranges from youth sports to chambers of commerce and Rotary and Lions Clubs to historical and arts organizations.

Salisbury Bank & Trust Co. likes to focus its financial contributions on “anything that can help with affordable housing and low-to-moderate income families,” said Stacey Curtis,

Funding, Funding, Funding One of the most important ways banks are getting involved is by making financial contributions to local organizations. Whether it’s through a foundation or not, Connecticut banks are finding ways to let its communities know they can look to them for financial support.

The Farmington Bank Community Foundation is “brand new,” said Christine Traczyk, foundation director and community development manager at Farmington Bank. The foundation’s grants usually range between $2,500 and $10,000, though the foundation “would go over if it’s a particularly good program,” she said.

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executive secretary. The financial institution also includes other categories for giving, such as the arts and humanities, education and youth programs.

Even though Salisbury Bank budgets a certain amount of money to contribute for the year, the institution tries to be flexible with its giving. “Things change from year to year, Curtis said. “I don’t think we ever start out the year and say we’re only going to give $100 to this [organization] and that’s going to be the end of it.”

Focusing where to spend contribution dollars is common among banks and Liberty Bank is no different. The Liberty Bank Foundation focuses on three priority areas: preventive programs for families and children, affordable housing, and capacity building for nonprofits engaged in those two areas.

However, Liberty Bank’s grant making wasn’t always so focused.

The financial institution brought in a consultant in 2007 and conducted a full strategic planning process, said Sue Murphy, executive director of the Liberty Bank Foundation.

After conducting focus groups and meeting with grantees, community leaders and other nonprofit organizations, the foundation was told that even though it was doing good in the community, it needed to have more of a focus. It needed to “pick a couple of things and try to do them well rather than try to give something to everybody,” Murphy said.

The foundation asked itself where it made the most sense to give. The answer for Liberty Bank was to focus its grant making more on prevention and less on intervention. “It’s the old idea of an ounce of prevention is worth a pound of cure,” Murphy said.

More Than Money It’s just not enough to make grants. Banks know volunteering time is just as valuable as the dollars it doles out.

Volunteerism is “in the DNA here,” Murphy said of Liberty Bank’s employees. In 2011, the bank’s employees reported volunteering 18,500 hours for 271 organizations.

They can be found hosting holiday parties at the Riverview Hospital for children, raising money for the American Heart Association’s Heart Walk, and fielding people for United Way’s Day of Caring.

“We encourage people to volunteer and we provide them with opportunities,” Murphy said. Opportunities include giving every bank employee four full paid days off to do community service. Employees can also find volunteer 18

opportunities on the bank’s Intranet.

Employee volunteerism can also help when evaluation time rolls around. This is true at Salisbury Bank where “it helps them when it comes to promotional opportunities within the bank,” said Doug Cahill, director of human resources. “We do take a look at volunteerism because it’s part of our mission statement to give back to our community.”

Salisbury Bank employees give back by getting involved with the local fire department, hosting shredding days and working with Rebuilding Together, which does home renovations. “Most of our employees do take part in something,” said Curtis. “I think that it’s important because we live in such a tight-knit and small community.”

Simsbury Bank employees volunteered 2,100 hours last year, said Geitz. Employees play leadership roles in organizations like the Avon Chamber of Commerce, the Rotary Club in Bloomfield and even serving as vice president of the Farmington Valley YMCA. “We also have employees who are very involved in certain health organizations,” Geitz added. The bank will match funds raised for events, such as the Autism Walk.

“We really have an actively involved employee base in the community, which is great,” said Traczyk of Farmington Bank’s workers. “They have a much better understanding of what it happening in their community, which for the bank ... it lets us do our strategic planning better because we really have a pulse on what our community needs are.”

Investing In Education What else can banks do in addition to funding grants and volunteer time? An increasingly popular role has been to invest in the education of its community. This often comes in two forms: teaching financial literacy, something that half of the banks surveyed report they are engaged in, and awarding scholastic scholarships and grants.

Farmington Bank has formed an education team, made up of 20 employees, who use the American Bankers Association’s Get Smart About Credit program, which teaches children to save, said Traczyk. “We are firm believers that an educated citizen makes really good financial decisions and great customers. For us, it’s a great way to educate the community, potentially build our customer base and potentially expand our business.”

Liberty Bank has been working with the Credit for Life Fair, a financial literacy education event at Middletown High School. “It’s really exciting – we’ve got seven different

financial institutions working together on a common goal of helping to engage students in learning about financial literacy,” Murphy said.

The bank also has a scholastic grant program that awards $20,000 to a dozen schools annually. The grants focus on remediation programs targeting kids at risk of failing in and dropping out of school.

“We are trying to help [students] bring their performance back up to grade level, engage them more deeply in school and help them to succeed,” Murphy said.

Volunteerism plays in a role in scholastic scholarships awarded from Salisbury Bank. Although the criteria also includes parental income and academic achievement, volunteerism is a “major area we look at and make our decisions based on,” Cahill said.

Why It’s Important The reasons behind why a bank should be active in its community are endless. But what most of the financial institutions seem to agree on, is that both sides benefit.

“We have a vested interest in this area being as economically strong and as attractive a place to live and run a business and bring up a family as it possibly can be so that we, as a bank, can have strong companies as customers and great households as customers [that] need our services,” Geitz said. “We try through our financial support and our volunteerism and leadership roles to do what we can do to make this a great place so that it’s a great market for us as a bank to do business.” u Kristin Cantu is a freelance writer.

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BANKSintheNEWS Farmington Bank’s recent ribbon-cutting ceremony at its newest and first branch in Wethersfield included contributions to three Wethersfield nonprofit organizations. Essex Savings Bank is pleased to announce the results of the recent voting by customers who participated in the bank’s Community Investment Program. The bank’s customers were asked to select from a list of 94 qualified non-profit organizations that made application to the bank. Each year the bank donates 10 percent of its after tax net income to non-profit organizations within the immediate market area. Over 9,475 votes were cast this year, with $76,698 to be disbursed during the month of April. The remaining $178,968 will be distributed over the year. By year end 2012, $255,666 will have been allocated to over 200 organizations bringing the total distribution since the inception of the program in 1996 to more than $3.4 million. Bank of Fairfield and Chip’s Restaurant Community Spirit Award Ceremony recognized five local citizens for their outstanding service to the community. The winner in the volunteer category was Ellen Redgate, who has served at Operation Hope for more than 20 years.

Tony Hwang won the government category for his tremendous support in the community and for his efforts helping residents during Hurricane Irene in particular. Samantha Strelzer won the youth volunteer category for selling 4,000 boxes of Girl Scout cookies. In the education category, Sr. Maureen Ulatowski was recognized for her dedicated service as a member of the St. Catherine Academy. Finally, in the not-for-profit category, Donna Twist received an award for her leadership as executive director of the Norma F. Pfriem Breast Care Center. Chelsea Groton Bank announced that employee contributions to the 2011-2012 United Way campaign have exceeded past totals. More than $36,000 in employee pledges and corporate matches will be invested in the community through the United Way of Southeastern Conn. In addition to financial contributions, Chelsea Groton employees also donate more than 335 hours annually to the United Way as committee members, volunteers and members of the board of directors.

1. The bank also held a Dress Down Day to benefit the Children’s Museum of Southeastern Connecticut. $545 was raised and donated to the organization. Once each month, employees who choose to dress casually make a nominal donation to a charity that has been recommended by a bank employee or a bank customer. In 2011, employees raised $6,670 to support nine charities. Niantic Branch Manager Dana Chapel presents a check to the Children’s Museum of Southeastern Connecticut.

2. The bank presented its sixth annual Money Madness seminar to more than 175 high school students at Connecticut College. The daylong seminar featured break-out sessions by community representatives from SERAC, William W. Backus Hospital, the FDIC and Valenti Auto Dealers, who spoke about the costs of smoking, eating healthfully on a budget, keys to maintaining good credit, and tips on buying a vehicle, respectively.

Naugatuck Savings Bank was recently voted favorite bank from the Oxford Patch.

Pictured at the recent check presentation of $5,000 from the Farmington Bank Community Foundation are, from left: Nancy Stilwell, director of social and youth services, town of Wethersfield; John J. Patrick Jr., chairman, president and CEO of Farmington Bank; and Donna Hemmann, mayor of Wethersfield.

Farmington Bank also made contributions to the Webb Deane Stevens Museum and the Wethersfield Historical Society.

Pictured, left to right: Chip’s Restaurant owner George Chatzopoulos, Bank of Fairfield First Vice President Bob Hojnacki, Ellen Redgate, Samantha Strelzer, Bank of Fairfield President Fred Reinhardt, Donna Twist, First Selectman Mike Tetreau and Tony Hwang.

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Chelsea Groton Bank’s Niantic Branch Manager Dana Chapel presents a check to the Children’s Museum of Southeastern Connecticut.

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Pam Luketich, community education officer, Chelsea Groton Bank, speaking at the recent Money Madness seminar.

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 In 2011, Bank of America awarded Mercy Learning Center the Neighborhood Builders Award. As part of the award, MLC received $200,000 in unrestricted grant funding and leadership development training for MLC’s executive director and an emerging leader. The award allowed for MLC to expand their basic educational classes of reading, writing and computation for low income women.

Bill Tommins, president, Fairfield County, Bank of America, presents a Neighborhood Builders Award to Jane Ferreira, president of the Mercy Learning Center of Bridgeport.

1. Eastern Federal Bank employees raised money for Big Brothers/ Big Sisters by bowling for kids’ sake. The four EFB teams had a wonderful afternoon together and raised $1,000 for a very worthy cause.

2. The bank cosponsored the Credit for Life fair, a financial literacy event designed to prepare high school seniors for life beyond the classroom. Students were provided fictitious information related to income and credit based on their likely career choice and “managed” their money throughout the event. Along the way, students encountered temptations for spending on “fun” or unnecessary items and even encountered a “reality check” – an unexpected life event, like a root canal or tax refund.

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Bank of America’s Valencia Carter-Dimbo volunteers to conduct mock interviews with students from the Mercy Learning Center (MLC) in Bridgeport. The mock interviews provide valuable experience for MLC’s population of low income students who are seeking jobs.

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The Milford Bank received the Corporate Award in recognition of its service to the community at the 57th annual meeting and awards ceremony of the Milford Chamber of Commerce. Over the past five years alone, the bank has donated $1.19 million to local charities for health, public safety and education initiatives. Bank trustees, officers and employees are active members of many community and civic organizations such as Milford Hospital, Rape Crisis Center of Milford, United Way, Red Cross, Literacy Center of Milford and Beth El Shelter.

Guilford Savings Bank’s President and CEO Margaret Livingston was one of the three inductees in the Governor’s Prevention Partnership’s “Corporate Mentoring Hall of Fame.” As a mentor for over 12 years, both her words and actions portray her belief in youth mentoring.

The Guilford School-Based Mentoring Program celebrated 10 years in 2011, attributing part of its success to the strength and determination of Livingston and the employees at Guilford Savings Bank.

President and CEO Margaret Livingston (center) is joined by some of her fellow Guilford Savings Bank mentors. From left: Hank Baum, Michael Yeh, Mark Muszynski, April MacClain, Abby Patrizio, Jeremy Canestri and Mike Paz.

Jewett City Savings Bank Foundation gave 25 area fire and ambulance companies a total of $14,000 in funding. The grants, totaling $52,300, supported a variety of community initiatives in the bank’s marketplace.

Fire companies pose with Kevin Merchant, president of the Jewett City Savings Bank Foundation (center), after receiving foundation grants. From left: Paul Yellen, Moosup Fire Dept.; Dean Roussel and Kurt Oster, Sterling Volunteer Fire Co.; Josh Malone, Central Village Fire Co.; Brian Glaude, Sterling Volunteer Fire Co.; Kevin Merchant; Mike Hewko, Dayville Fire Co.; Charles Colli, Atwood Hose Fire Co.; Ken Holcomb and Zach Ezzell, Plainfield Fire Co.; and Jim Stewart, Central Village Fire Co.

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 1. First County Bank hosted a free, interactive workshop on “Using Facebook and LinkedIn to Build Sales” that was well-attended by small business owners from Fairfield County.

2. First County Bank teamed up with local chefs as they competed to create the best-tasting recipe, as judged by the public, using maple syrup as an ingredient. David’s Soundview Catering from Stamford took top honors. First County Bank volunteers are ready for opening of the Chef ’s Challenge at Maple Sugar Weekend Festival.

3. Bank volunteers were out in full force at the Stamford Museum & Nature Center for the 12th annual Maple Sugar Festival Weekend.

Thirty-eight volunteers gave out free popcorn, drawstring backpacks, grocery bags and mini cutting boards.

4. The bank partnered with the Stamford Jewish Community Center, Stamford Hospital, and the Stamford Chapter of Hadassah to host Women Living Healthy in 2012. Targeting women of all ages, the fair focused on women’s health, fitness, and financial wellbeing.

First County Bank presented three lectures focusing on building the foundation for financial success and independence.

5. The bank celebrates with Hertz Construction the completion of the first green home in Darien.

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Speakers at the event were, from left: Deborah Gunzelman, director for non-credit programs, CITI, UConn, School of Business; Karen Kelly, senior vice president and chief marketing officer, First County Bank; Stephanie Cockerl, search, social media and web analytics, Creative Partners; Anahid Shahrik, vice president of social media, Creative Partners; Josh Moritz, senior vice president or interactive, e-commerce and social media, Creative Partners; and Katherine Harris, president and chief operating officer, First County Bank.

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First County Bank volunteers are ready for opening of the Chef’s Challenge at Maple Sugar Weekend Festival.

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Salisbury Bank and Trust Company has announced the launch of a new, online “Financial Answer Center,” designed to be an educational resource for its customers and the community. The website features information on any number of financial topics, from paying for college, to financing a home, to starting a small business or managing investments. Salisbury Bank’s Financial Answer Center is simple to use and easy to understand. Along with the educational articles, it includes case histories, worksheets, calculators and links to sources for additional information.

Salisbury Bank and Trust Company is pleased to announce its 2012 Annual Scholarship Program, which was created in 2009 to assist students who have a proven financial need and who are already making a difference in their communities. Eligible students must be a resident of Litchfield, Berkshire, or Dutchess county, and currently enrolled in a public high school, vocational, or technical school; be a homeschool student affiliated with such a school; or be a graduate or GED recipient of an eligible school district and entering the first year of college.

Salisbury Bank and Trust Company and The Greater Berkshire Agriculture Fund (GBAF) announced a loan fund to assist farms and farm-related businesses that might otherwise have difficulty getting loans. GBAF loans can be used for working capital, capital needs such as equipment or buildings, operations, or other improvements for production or value-added enterprises.

Back row: Erik Anderson, executive chef, David’s Soundview Catering; Melissa Mulrooney, executive director, Stamford Museum & Nature Center; Elizabeth Keyser, Connecticut editor, Zagat Restaurant Survey; Reyno Giallongo Jr., chairman and CEO, First County Bank. Second row: Susan Kane, Susan Kane Catering; and Dina Glekas-Loukrezis and Nikki Glekas, EOS Greek Cuisine. Front row: Jonathan Mathias, A Dash of Salt.

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From left: Kathy Harris, president and COO First County Bank; Eric H. Koehler, CEO, Stamford JCC; Dana Roth and Meg Haron, co-chairs, Stamford JCC Center Women’s Health Fair; and Michael Victor, branch manager, First County Bank.

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From left: Hertz Construction co-owners Paul Hertz and John Hertz; Jayme Stevenson, Darien selectman; Rick Zaremski, senior vice president and director of commercial lending, First County Bank; and Jim Darling, vice president of business banking, First County Bank.

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1. Liberty Bank was nationally honored for its work with Middlesex Habitat for Humanity of Connecticut at the American Bankers Association National Conference for Community Bankers. The award specifically recognized the bank’s work to promote and stock Middlesex Habitat’s ReStore. The ReStore sells quality new and gently used furniture, appliances, and building materials at deep discounts, with proceeds funding creation of more affordable housing for lowincome families.

2. Liberty Bank officially opened a new Home Lending Center. The location will focus on special lending programs for Meriden residents and those in the surrounding communities, lending for affordable housing and education of first-time homebuyers.

1. Rockville Bank Foundation and Rockville General Hospital (ECHN) officially opened the newly renovated hospital cafeteria with a ceremonial ribbon-cutting of hospital gauze and surgical scissors.

This project was made possible as part of a $157,500 grant from the Rockville Bank Foundation, bringing its total donations to ECHN to over $500,000 since the foundation’s establishment in 1998. This latest grant from the Rockville Bank Foundation also will be used toward renovation of Manchester Memorial Hospital’s lobby this spring.

2. Rockville Bank/Rockville Financial, Inc. and the George Sykes Memorial Fund each presented checks for $250,000 to the Library Trustees for the Campaign. The library was awarded a $1 million matching grant from Connecticut State Library and a $250,000 grant from the state of Connecticut for ADA accessibility modifications.

1 Liberty Bank President and CEO Chandler J. Howard (right) accepts an award from ABA Community Bankers Council Vice Chairman Ken Burgess.

2 From left: Arelis Kinard, originator, Liberty Bank; Meriden Mayor Michael Rohde; Imran Saeed, Meriden branch manager, Liberty Bank; Chandler J. Howard, president and CEO, Liberty Bank; Bob Steele, consumer credit risk manager, Liberty Bank; and Sean Moore, president, Greater Meriden Chamber of Commerce.

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From left: William H. W. Crawford, IV, president and CEO, Rockville Bank/Rockville Financial, Inc.; Richard J. Trachimowicz, Rockville Bank EVP and President of the Rockville Bank Foundation; Thomasina Clemons, President of the Rockville Public Library Board of Trustees and one of three Co-Chairs of the Rockville Public Library Campaign Steering Committee; Susan Mason, Co-Chair of the Rockville Public Library Campaign Steering Committee; Tom Mason, Co-Chair of the Rockville Public Library Campaign Steering Committee and the Secretary of the George Sykes Memorial Fund; and Chick MacMillan, President of the George Sykes Memorial Fund.

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From left: Dr. Dennis O’Neill, chairman of the ECHN board of trustees; Tom Scanlon, chairman of the ECHN foundation board of trustees, Peter J. Karl, ECHN president and CEO; William H. W. Crawford, IV, president and CEO, Rockville Bank/Rockville Financial, Inc.; Richard J. Trachimowicz, Rockville Bank executive vice president and president of the Rockville Bank Foundation; and Marino J. Santarelli, Rockville Bank executive vice president and chief operating officer.

SI Financial Group Foundation, Inc., has completed its biannual distribution of grants totaling $31,970 to 10 eastern Connecticut charitable organizations. Recipients included the Fairview Odd Fellows Home; Malta, Inc.; St. Vincent DePaul Place and Three Rivers Community College; the American Legion Veteran’s Housing; Brooklyn Town Library; Windham Area Interfaith Ministry (WAIM); and Windham Region No Freeze Hospitality Center. The Covenant to Care for Children of Bloomfield also received support from the foundation’s latest distribution.

1 Savings Institute South Windsor and Tolland Branch Manager Demetrio Ricciardone presents a check to Caryl Hallberg, CEO of Covenant to Care For Children.

2 Savings Institute Willimantic Branch Manager Mark Light presents a check to Victoria Nimirowski, director of the Windham Area Interfaith Ministry.

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1. Savings Bank of Danbury Foundation awarded a $6,500 grant to Jericho Partnership. The grant will be used to offset the cost of purchasing food for all Pathways Youth Ministries programs. Pictured, from left: Michael Ronan, Stewardship Director of Jericho Partnership; June Renzulli, a member of the board of directors of both Jericho Partnership and Savings Bank of Danbury; Carrie Amos, executive director of Jericho Partnership; and Hal Wibling, president and CEO of the Savings Bank of Danbury and vice chairman of the Jericho Partnership board of directors.

2. The foundation also awarded a $6,500 grant to Regional Hospice of Western Connecticut. The grant will be used to support the Healing Hearts’ programs. Pictured are Karl Epple, a member of the Regional Hospice board of directors and a member of the Savings Bank of Danbury Foundation committee; Debbie Ryan, vice president of Counseling Services Regional Hospice; Jane Allen Wilson, vice president of philanthropy and major gifts for Regional Hospice; Janice Lea, vice president of marketing for Savings Bank of Danbury and a member of the Regional Hospice Marketing Committee; and Ed Ronan, member of the board of directors of both Regional Hospice and Savings Bank of Danbury.

3. The foundation awarded a $3,500 grant to Special Olympics Connecticut. The grant will be used to support the annual Danbury Penguin Plunge. Pictured are: Bonnie Smith, vice president of Savings Bank of Danbury, and a member of the board of directors and Human Resources Committee Chair for the Special Olympics; Sharon Pelkey, director of Development Northwest Region of Special Olympics; and Charlie Williams, vice president of Savings Bank of Danbury and a volunteer with the agency.

4. Donna Guralski was the lucky winner of the Savings Bank of Danbury’s Southbury branch’s anniversary raffle of an Amazon Kindle.

Pictured are John DiBiaso, assistant vice president and branch manager of the Southbury branch with Donna Guralski.

5. The Savings Bank of Danbury Foundation awarded a $5,000 grant to the Women’s Center. The grant will be used to support education and training programs. Pictured are: Glori Norwitt, Women’s Center board president; Paul Dinto, a Women’s Center advisory board member and member of the Savings Bank of Danbury board of directors; Beth Ann Fetzer, community development officer, assistant vice president, Savings Bank of Danbury, and a member of the Women’s Center advisory board; and Pat Zachman, executive director of the Women’s Center.

6. The Savings Bank of Danbury congratulates Daryl Howell, the lucky winner of a $100 Agriventures Agway gift card raffle at the bank’s booth at the Western New England Home Show. Pictured presenting the prize to Daryl is Janice Lea, vice president of marketing.

7. The foundation awarded a $5,000 grant to The Bridge to Independence and Career Opportunities (TBICO). The grant will be used to support the Corporate Edge, business skills training program.

Pictured, from left to right: Michele Grull, mortgage officer, Savings Bank of Danbury; Bonnie Smith, vice president of human resources, Savings Bank of Danbury; Glynis Powanda, branch manager and assistant vice president, Hayestown office, Savings Bank of Danbury; Annie Weed, director of programs and development for TBICO; and Beth Ann Fetzer, community development officer, assistant vice president, Savings Bank of Danbury, and secretary of the TBICO board of directors.

8. The foundation awarded a $3,500 grant to the Danbury Regional Child Advocacy Center (DRCAC). The grant will be used to support the 24

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Volunteer Mentor Program. Pictured, from left: Rebecca Wade-Rancourt, DRCAC executive director; Glynis Powanda, assistant vice president and branch manager, Hayestown office, and a member of the center’s board of directors; and Jana Draper, president, DRCAC board of directors.

9. The Savings Bank of Danbury Foundation awarded a $5,000 grant to Handy Dandy Handyman. The grant will be used to support home makeover projects. Pictured are Beth Ann Fetzer, community development officer, assistant vice president, Savings Bank of Danbury; Don Mitchell, member of the Savings Bank of Danbury board of directors and former chairman of the Handy Dandy Handyman board of directors; Peter Brady, president of Handy Dandy Handyman; and Hal Wibling, president and CEO of Savings Bank of Danbury.

10. Savings Bank of Danbury employees donated 32 “Spring Buddy Baskets” to the Western Connecticut Business Volunteer Council (WCBVC). The baskets will be distributed by the WCBVC to preschool children from the Danbury and New Milford Head Start programs, as well as other social service organizations. In the center of the baskets is Beth Ann Fetzer, community development officer at the Savings Bank of Danbury.

Michael Sheahan (left), chief mortgage and consumer lending officer, Simsbury Bank, and Howard Zern, chief retail, technology and operations officer, Simsbury Bank, present the bank’s $5,000 check to Dougla Pyrke, development director of Hill-Stead Museum, and Becky Trutter, volunteer liaison and special events manager of Hill-Stead Museum.

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Simsbury Bank is pleased to announce that it is the presenting sponsor of Hill-Stead Museum’s 26th annual May Market, an important community event and fund raising activity for the museum. The May Market will feature 65 exhibitors on the grounds of the museum, offering garden and crafts vendors as well as gardening and cooking demonstrations, in addition to live music and dance performances.

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1. Union Savings Bank revitalized a previous advertising campaign while providing a strong customer incentive and engaging audiences.

The bank created 1-2-3 Checking Challenge, an online game that awards prizes redeemable when the player opens a new 1-2-3 Checking account. Between the game launch on October 11 and campaign close on December 31, more than 2,200 players spent an average of 5.5 minutes each playing the game. The game challenged visitors to arrange rows of numbered circles so that the rows read 1, 2, 3 in sequential order. If they lined up a minimum of three rows, they won a $30, $60 or $100 voucher, which could be deposited into a new 1-2-3 Checking account.

2. The Union Savings Bank Foundation has awarded $214,300 to 33 non-profit organizations across Western Connecticut. The foundation grants will support local organizations that provide healthcare, promote educational achievement and address human needs. 1. Webster Bank received special recognition from the United Way of Central and Northeastern Connecticut for 75 years of inspired philanthropy, volunteerism and commitment. Last year’s Webster Employee Community Campaign raised a record-setting $1.2 million in support of organizations across the company’s four-state footprint.

2. Webster Bank is investing in the most visible and tangible connection to customer: the bank branch. Webster is pleased to announce eight recent bank branch upgrades. The lobby in the branch at 1919 Black Rock Turnpike, Fairfield is pictured at right. u

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BANKERSintheNEWS secretary. Twenty employees were recognized for serving for periods of five to 20 years at the company’s annual service award breakfast. Of the banks 200 employees, the average length of service is 10 years, and 27 percent of the bank’s employees have greater than 15 years of dedicated service.

Pictured: Mark Tillinghast, Ann Chenail, and Richard Morelli, who received 20-year service awards, with President and CEO Michael Rauh (second from right).

Tom Villanova (left) with his management team. Left to right: Bob Teittinen, Paul McLaughlin, Leslie Black, Ray Croce, Maura Malo.

Litchfield Bancorp recently announced the promotion of Tom Villanova to president and CEO following the retirement of longtime president and CEO Mark Macomber. Also promoted from senior vice president to chief operating officer is Paul McLaughlin. In addition, the management team includes senior vice president Leslie Black, who serves as chief financial officer. Rounding out the management team are Chief Lending Officer Robert Teittinen, Chief Risk Officer Maura Malo, and Connecticut Mutual Holding Company Compliance Officer Ray Croce.

Three bank employees received certificates of completion for the twoyear Connecticut School of Finance & Management (CSFM) program.

Branch Manager Melinda Burridge, Deposit Services Assistant Manager Margaret McMahon, and Senior Marketing Officer Meghan Horan started the program together in 2010. Both Burridge and Horan graduated the program with honors.

Connecticut Bankers Association is pleased to announce Mary Beth Nelsen joined the CBA as vice president and director of education. Her responsibilities will include managing CSFM, administering educational programs and working with members to provide support for their training and staff development Mary Beth Nelsen needs. She will also coordinate the activities of the Management Development and Human Resources committees.

Union Savings Bank elected president and CEO Francis G. Dattalo. He has been with the bank since 2006.

Francis G. Dattalo

The Bank of New Canaan, The Bank of Fairfield and Stamford First Bank, a division of The Bank of Thomas Cragg Peter Russell Brian Charlebois New Canaan, has named Thomas Cragg mortgage loan officer. In his new position, he will help grow the residential mortgage division of the three banks.

Peter Russell joined the bank as senior vice president and chief lending officer. In his new capacity, he will be responsible for all commercial and consumer lending activity at the bank. Brian Charlebois was named first vice president and commercial team leader. He will be responsible for developing commercial and industrial lending throughout Connecticut.

Blunt White

Mary Conti

Chelsea Groton Bank is pleased to announce that Blunt White has joined the Commercial Lending Department as vice president and commercial loan officer. Mary Conti has joined as North Stonington branch manager and assistant

Connecticut Community Bank, N.A. promotes five. Steve Bacon has been promoted to senior vice president. Karyn Lanzano, Lorene Koletar, Rita Russell and Jodi Young were promoted to vice president.

Dime Bank is pleased to announce the appointments of four new assistant vice presidents.

Laraine Cellucci Peter Lampasona Julie O’Connor Laraine Cellucci is responsible for the daily operation at her branch.

Peter Lampasona serves as the bank’s retail operations manager.

Julie O’Connor is responsible for analyzing, verifying, processing Christopher Gauthier Diane G. Papadakos and reporting loan data for the commercial loan transactions.

Christopher Gauthier serves as a commercial loan officer and is responsible for a diverse commercial portfolio consisting of commercial real estate, commercial and industrial, and municipal relationships. Diane G. Papadakos assumed the role of vice president

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First County Bank welcomes Tamara Ledwith as a product and sales marketing manager. Ledwith has more than 20 years experience in business development and marketing in financial services.

and director of marketing and sales. She is responsible for the bank’s marketing and promotions, advertising, public relations, branding and community relations.

Eastern Federal Bank announces the appointment of Robert Miller to assistant vice president and business development officer. He has managed the Jewett City office since he joined the bank in 2010.

Tamara Ledwith

Robert Miller

Farmington Bank chairman, president and CEO John J. Patrick Jr. will lead the American School for the Deaf (ASD) Foundations for the Future Bicentennial Campaign. The ASD, the birthplace of American Sign Language and deaf education, announced the launch of its Foundations for the Future Bicentennial Campaign, John J. Patrick Jr. a fundraising and building campaign in honor of the institution’s 200th anniversary in 2017. The campaign funds will assist with the design and construction of a new state-of-the art education facility on its West Hartford campus that will reinforce ASD as a world leader in deaf education.

Kyle Eagleson

Mark Jenusaitis

Paul Schoen

Mike Paz

Guilford Savings Bank has promoted Kyle Eagleson to vice president and finance manager. Eagleson was recently chosen as an Emerging Leader in Banking by the Connecticut Bankers Association and Connecticut Banking magazine. Mike Paz was recently promoted to assistant vice president and commercial loan officer. Mark Jenusaitis joined the bank in February as a commercial loan officer. Paul Schoen recently joined the bank’s human resources department as the training officer. continued on page 28

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officer. Andrew Hvizd III has joined the bank as vice president of commercial lending.

Three members were recently appointed to the senior management team: Renee Pallenberg, vice president of retail banking and marketing; Bette-Lou Rush, vice president of enterprise risk management; and Robyn Westerkamp, vice president and director of human resources. Together they have over 40 years of banking experience.

Northwest Community Bank has promoted Steven Zarrella, vice president, to the management team as manager of the commercial loan department. Monica S. Diulio, assistant vice president and Steven Zarrella Monica S. Diulio Torrington branch manager, is a recent graduate of the Connecticut School of Finance & Management.

Jewett City Savings Bank has announced the promotion of three employees to the title of assistant Katherine Quackenbush Dianne Chiavarini Jenny Driscoll vice president.

Katherine Quackenbush is the bank’s human resources officer. Dianne Chiavarini is the manager of the bank’s Central Village branch. Jenny Driscoll served as escrow clerk and loan servicing assistant before being named to her current role as loan originations manager.

Liberty Bank has appointed LeighBette Maynard assistant vice president, responsible for Leigh-Bette Maynard Sebastian Gromowski the Cheshire Anna Brothers branch office. She brings with her over a decade of experience in retail banking and financial services supervisory positions. Sebastian Gromowski was promoted to assistant vice president of resort finance.

Gromowski joined Liberty Bank as a portfolio manager. Anna Brothers was promoted to vice president, responsible for the bank’s external communications. Her responsibilities include strategic direction and execution of all external messaging, search engine marketing, management of the website, branding initiatives and merchandising programs. She is also responsible for the bank’s social media presence.

The Milford Bank’s Jorge Santiago received the Human Service Award at the 57th Annual Meeting and Awards of Distinction of the Milford Chamber of Commerce.

Lisa Behling

Andrew Hvizd III

Deborah Wheelahan

Laura Gallinoto

Quinnipiac Bank & Trust has announced the appointment of Tony Rossley to the bank’s seasoned staff of commercial loan officers. Sandi Weber, vice president of SBA lending, has been Tony Rossley Sandi Weber named “2012 Financial Champion of the Year” by the Connecticut Small Business Administration. With over 25 years experience in the commercial lending industry, she serves as the bank’s liaison for the U.S. Small Business Administration and state lending programs.

Savings Bank of Danbury is pleased to announce that John Jahne has joined the bank John Jahne Michele Grull Kathleen Romagnano as senior vice president and chief information officer. Michele Grull has relocated her office to Waterbury, as she will now be focusing her attention on the mortgage lending needs of the Southbury and Waterbury communities. Executive Vice President and Chief Operating Officer Kathleen Romagnano has been elected to serve as a member of the board of directors of the Housing Development Fund, which

Sharon Mansfield

Naugatuck Savings Bank welcomes Lisa Behling as the branch manager of the Southbury and Woodbury offices. Deborah Wheelahan was promoted to executive vice president and chief operating officer. Laura Gallinoto has joined the bank as regional manager. Sharon Mansfield was promoted to vice president and commercial loan

From left to right: Rheo Brouillard, president and CEO; Laurie Gervais, senior vice president of human resources; Elaine Ruffo, customer service representative, Canterbury; and William Anderson, senior vice president of retail banking.

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was established in 1989 as a nonprofit organization to finance the development of affordable housing.

Savings Institute Bank & Trust announced the promotion of seven of the bank’s officers, as well as numerous employee award recipients. The announcements were made at the bank’s “Celebration of Excellence.” Among those receiving promotions included Sarah Kanas to vice president, Mark Light to assistant vice president, Jaclyn Petrizzo to vice president, Valerie Shorts to assistant treasurer and Mike Urgo to assistant treasurer. Also recognized were Lisa Allegro, who was recently promoted to assistant vice president, and Donna Connolly, who was hired as assistant vice president and assistant controller. The President’s Award was presented to Elaine Ruffo for her dedication to so consistently meeting and exceeding her customers’ expectations.

Simsbury Bank is pleased to announce that Stephen R. Vaughan has joined the commercial banking team as a commercial relationship manager. He will work directly with Stephen R. Vaughan business owners and managers to help them achieve their goals through tailoring the bank’s full breadth of financing, cash management and other business services solutions for their needs.

Stamford First Bank Vice President and Branch Manager Neil Dickson has joined the board of directors of the Stamford Historical Society.

Dickson has been a bank Neil Dickson branch manager for 16 years.

continued on page 30 29

BANKERSintheNEWS

Jennifer M. Socha

Shalonta Ford

continued from page 29

TD Bank has promoted Jennifer M. Socha to SBA loan specialist in the SBA division. Shalonta Ford was promoted to vice president and insurance regional sales specialist in personal lines at TD Insurance, Inc., a subsidiary of the bank.

Union Savings Bank is pleased to announce the addition of Tom Cugno as vice president Tom Cugno Mark S. Chory John E. Gergots of project management, a newly-created position. Mark S. Chory has joined the bank as vice president of commercial lending. John E. Gergots has joined the bank as vice president of commercial lending.

Brien J. Lasse has joined the bank Brien J. Lasse Cynthia Forbes as vice president of wealth management and retirement planning and trust officer. Cynthia Forbes has joined the bank as commercial services administrative officer. She has held a variety of banking roles, including teller and assistant branch manager.

vice president and commercial operations manager. Lee Sirotnak was promoted to senior vice president of information technology governance, which includes change, problem and resource management, quality assurance and compliance. Prior to this, Sirotnak was vice president of information technology process management. Kim Syrop was promoted to senior vice president of fraud mitigation and loss management.

She is responsible for the bank’s fraud prevention strategies as well as investigation and recovery of losses, all of which require her to work closely with local and federal law enforcement in the prosecution of financial crimes.

David J. Dixon

Charles L. Olson

John H. Driscoll Jr.

John M. Jezowski

Webster Bank launched an enhanced, full-service private bank. The team includes: David J. Dixon, senior vice president and director of Webster Private Bank; Charles L. Olson, senior vice president, director of sales, service and marketing; Theodore Bobroske, senior vice president and senior private banker; John H. Driscoll Jr., senior vice president and senior private banker; John M. Jezowski, senior vice president and senior private banker; and Amy B. Miller, vice president and private banker.

Webster Bank announces several new roles, new responsibilities, and some new faces. Gerald P. Plush has been Gerald P. Plush Jennifer Hoynes Denise Kaufman promoted to president of the holding company and the bank. He now serves on the board of directors as well. Plush retains his position as chief operating officer. Karl D. Adamsons was promoted to senior vice president and group financial manager. Adamsons had been serving as the business financial officer responsible for support consumer finance since 2009. Martin H. Anderson was promoted to senior vice president for middle market banking. Christopher Childs was promoted to senior vice president of Webster Financial Advisors. Anthony Denniston was promoted to senior vice president of employee relations. Jennifer Salera Hoynes was promoted to senior vice president of brand management.

Denise Kaufman was promoted to senior vice president and regional manager of retail banking. Charlotte Kienbaum was promoted to senior vice president of HSA bank operations and contact center. HSA Bank is a division of Webster Bank. Michael Liam O’Connor, Esq., joins Webster Bank as senior vice president of corporate real estate and facilities. O’Connor joins Webster after completing an active duty tour as an Army officer assigned to the Office of the Judge Advocate General in Washington D.C. Joseph J. Pelliccia Jr. was promoted to senior vice president and director of loan operations. Previously, he served as

Webster Bank welcomes its three newest private bankers: John K. Lynch, senior vice president and senior private banker; Mariana R. Sequeira, senior vice president and senior private banker; and Jacquelyn Waddock, senior vice president and senior private banker.

Webster Bank subsidiary, Webster Capital Finance, will focus on a targeted expansion with the addition of three lenders in the transportation, construction and manufacturing finance arena: Timothy S. Moriarity, vice president; Timothy J. Woodcock, vice president; and Jerald F. Herrmann, vice president.

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Windsor Federal Savings promoted Kimberly Schmaltz to the position of mortgage loan originator.

Kimberly’s banking career spans more than 15 years. u

Kimberly Schmaltz

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With its customers under water, Diebold went where it had to go. Above and beyond.

In the aftermath of Hurricane Katrina, Diebold assembled a comprehensive unit to respond to every customer without exception. It’s another example of Diebold doing more to build relationships. Relationships that have inspired us to become leaders and innovators in the banking industry for more than 150 years.

For the entire story, visit diebold.com/boldservice.

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