SECOND QUARTER 2014
MARYLAND BANKERS TAKE ANNAPOLIS BY STORM
TALKING ABOUT DATA SECURITY
THE OFFICIAL PUBLICATION OF THE MARYLAND BANKERS ASSOCIATION
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Chairman Robert A. DeAlmeida President & CEO Hamilton Bank
SECOND QUARTER 2014
MARYLAND BANKERS TAKE ANNAPOLIS BY STORM
Chairman-Elect John A. Scaldara, Jr. Chairman & CEO The Columbia Bank Vice Chairman Daniel J. Schrider President & CEO, Sandy Spring Bank
TALKING ABOUT DATA SECURITY
THE OFFICIAL PUBLICATION OF THE MARYLAND BANKERS ASSOCIATION
Past Chairman Michael L. Middleton Chairman & CEO Community Bank of the Chesapeake
186 Duke of Gloucester St. Annapolis, MD 21401 410-269-5977 / 800-327-5977 www.mdbankers.com
President & CEO Kathleen M. Murphy
Maryland Bankers Association
Publication Editor Cynthia L. Gentilcore Maryland Bankers Association
Board of Directors Calvin E. Barker Regional President, Baltimore Metro Region, BB&T
DATA SECURITY TARGET BREACH ONLY THE LARGEST OF MANY
George J. Behr, Jr. President & CEO, Arundel Federal Savings Bank Andrew M. Bertamini Regional President, Maryland Market, Wells Fargo Bank, N.A. James R. Bosley, Jr. President & CEO, Farmers & Merchants Bank Ralph W. Emerson, Jr. Senior Vice President, M&T Bank Raymond W. Hamm, Jr. Executive Vice President, PNC Bank, N.A. Michael E. Hough CEO of Maryland Division, Susquehanna Bank Kim Liddell Chairman, President & CEO, The National Bank of Cambridge Michael G. Livingston President & CEO, The Bank of Glen Burnie Philip E. Logan President, Chairman and CEO, Slavie Federal Savings Bank Carissa L. Rodeheaver, CPA, CFP President & CFO, First United Bank & Trust George Swygert Regional Executive, Capital One, N.A. Raymond M. Thompson President & CEO, Calvin B. Taylor Banking Company Kelly Whitley Vice President, State Government Relations, Bank of America J. Scott Wilfong Chairman, President & CEO, SunTrust Bank, GW/MD
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Planning Ahead for Your Upcoming Health Care Renewal
message from the chairman Social Media, the Electronic Revolution, and the Future of Banking
message from the president Shaping our Industry’s Future
Day In Annapolis Maryland Bankers Take Annapolis By Storm 8 Council of Professional Women in Banking and Finance 2014 Philanthropy Initiative 11 2014 ‘First Friday’ Economic Outlook Forum Draws 700 Attendees in from the Snow
DEPARTMENTS: news and notes 20 professional development calendar 22
16 Second Quarter 2014 | 3
Planning Ahead for Your Upcoming Health Care Renewal
f you are like most banks in the state of Maryland, you have been dealing with rising health care costs, carrier consolidation, shifts in power and an uncertainty of the future of health care. When renewal time is upon them, most banks feel that they are at the mercy of the carriers and have little impact on what their health care costs will be moving forward. In 2013, MBA Benefits Alliance, a non-stock corporation, was formed to provide a high-quality, competitive, selfinsured health care program for MBA member banks and their employees across the state of Maryland. Working together, MBA Benefits Alliance and L.R. Webber Associates Inc. (LRW) help stabilize health care costs for members, while providing flexibility, support and service to each institution and its employees. MBA Benefits Alliance is not a short-term fix to combat higher premiums, but rather a long-term approach to controlling your health care costs. “First United is very pleased to be among the founding members of the MBA Benefits Alliance,” said William B. Grant, chairman and CEO, First United Bank and Trust. “Like our customers, we value loyalty and long-term relationships. We have been affiliated with L.R. Webber Associates Inc. for decades. We attribute much of our health care cost savings and proactive decision-making to their advice and guidance. Best of all, we know that they are consistently there when our employees have a need. And now, with the opportunity to join other banks to enhance our savings through both pooled claims history for stop-loss coverage and streamlining administrative expenses, it was an easy decision for us to participate. We commend the MBA on sponsoring 4 | The Maryland Banker
this opportunity and look forward to more of our fellow bankers joining us in this collaborative effort.” MBA Benefits Alliance helps members to target plan designs and disease management/wellness programs to specifically help employees with improved health. When you look at what makes up your costs – “components of pricing” – some things are easy to understand and others are not. The more difficult areas are confronted through the MBA Benefits Alliance model. In the end, your bank will be in control of the data, which gives you the ability to make adjustments to continue to provide an important employee benefit, while also controlling costs over the long haul. Nervously waiting for your insurance carrier to deliver your renewal will be a thing of the past! “Old Line Bank has historically endeavored to provide employees with a comprehensive benefits package that provides both value and economy,” said. James W. Cornelsen, president and CEO, Old Line Bank. “As health care costs continue to rise, we were extremely pleased to have the opportunity to join the MBA Benefits Alliance. We believe this relationship will provide us with the flexibility to design plans that fit our employees’ unique health care needs.” As the largest non-interest expense to your bank, your employee benefit costs should be reviewed annually, shortly before renewal time. Understanding and evaluating your plan takes time and effort. If you are looking for a long-term cost control solution, and your renewal is coming up in the next six months, now is the time to start planning ahead to: • Gain better control of the overall financing of your benefit plan. • Maintain full transparency and know where every dollar is spent and what is driving your claims. • Gain stability by being part of a much larger purchasing group. • Take pride in being part of the solution to controlling health care costs. For MBA member banks interested in learning more about exploring this program, contact MBA’s Cindy Gentilcore at (443) 837-1602 or email@example.com, or LRW’s Craig Diienno at (410) 960-5399 or firstname.lastname@example.org. ■
Message from the Chairman ROBERT A. DEALMEIDA | MBA CHAIRMAN PRESIDENT & CEO HAMILTON BANK
Social Media, the Electronic Revolution, and the Future of Banking
n informed member is an engaged member. Being accessible to and keeping our members informed is a top priority of the Maryland Bankers Association (MBA). One of my focuses this year as MBA chairman is to improve the communication infrastructure of the association, which began with the redesign of MBA’s website this past January. Some of the new website features include: • A tool to search within the website. • MBA events and education opportunities. • Calls to action and news about the MBA. • A searchable membership directory for products and service solutions. • A mobile app display when accessing the MBA website from a mobile device. • Expanded advertising opportunities. If you haven’t visited MBA’s new website, please take a moment and visit www.mdbankers.com. As you go through, note the many offerings available that you and your bank can take advantage of as a member of the MBA. The MBA also plans to refine its publications as needed, including e-communications and member resources. This spring, the MBA board of directors will implement the Director Access Board Portal through MBSI Preferred Provider Financial Services Inc. (FSI) to provide a convenient and secure online platform for its directors. The MBSI board of directors has already been using FSI’s Director Access for almost a year. It’s incredibly convenient to be able to securely access timely and confidential documents anytime, anywhere. It saves time by uploading individual documents as they become available and saves money by putting an end to printing and reducing ink and paper costs. Communication capabilities today have expanded exponentially, but human nature still needs to catch up. Facebook has become the modern-day equivalent of the telephone party lines of days of old before the capability of the nation’s phone system had grown to meet post-World
War II demand. My bank’s Facebook page is managed by our employees. The page features articles on topics of interest to the banking community and highlights the activities of our employees in our communities. This fall, the MBA will be looking at its use of social media, as Facebook and other modes of communication are growing just as fast are the medium of the future. To make sure everyone’s voices are heard through these mediums will be critical to the future of our industry. ■ Robert A. DeAlmeida is the chairman of the Maryland Bankers Association. Reach him at email@example.com.
MBA’s New Website
If you have any questions on MBA’s new website or would like more details on website advertising opportunities, please contact MBA’s Cindy Gentilcore at (443) 837-1602 or firstname.lastname@example.org. ■
Second Quarter 2014 | 5
Message from the President KATHLEEN M. MURPHY | PRESIDENT & CEO MARYLAND BANKERS ASSOCIATION
Shaping our Industry’s Future
hen you read this, we will be nearly two-thirds through the 2014 General Assembly Session. Each year when the legislators convene, this is where the rubber meets the road for our members. With a compressed schedule, a flurry of bills is introduced every year and this one has been no different. The MBA’s Government Relations Council (GRC) reviews every state bill that we flag to help the MBA’s public policy team assess the impact on the banking industry. Dan Schrider, president and CEO of Sandy Spring Bank and MBA vice chair, chairs the GRC. “I am honored to serve as chairman of the GRC,” says Schrider. “I think the work of the GRC is among the most important work of our association. I am grateful for the commitment of council members who give of their time to help our industry remain strong.” He says members analyze bills each week during the Legislative session to determine their impact, if any, on the banking industry, and then decide whether to take a position. “One of the things I love about the GRC is that it’s focused on the banking industry as a whole – not just small banks or large banks,
but the health of banking in general,” he says. “That’s why members of the GRC take their responsibility seriously.” A list of the bankers serving on the GRC is shown below. When you aren’t represented in the process, you are at risk. And representation is what we do for our members, small and large. We listen, testify and advocate for the passage of good bills, and spend 95 percent of our time and effort amending or stopping bills that would
We listen, testify and advocate for the passage of good bills, and spend 95 percent of our time and effort amending or stopping bills that would harm banks’ ability to serve their customers and communities. harm banks’ ability to serve their customers and communities. Continued on page 19
Government Relations Council Members Dan Schrider Sandy Spring Bank GRC Chairman James Anthony
Mark Krebs Farmers & Merchants Bank
Patricia Obara JPMorgan Chase & Co.
Thomas Lamb PNC Bank, N.A.
Kelly Rodgers Wells Fargo Bank, N.A.
Donna Leaman USAA Federal Savings Bank
Donald Schuster Sandy Spring Bank
Anne Balcer Congressional Bank
Michael Livingston The Bank of Glen Burnie
Brenda Skidmore SunTrust Bank
James Brown Capital One, N.A.
Kimani Little Federal Home Loan Bank Atlanta
Richard Story Howard Bank
Chesapeake Bank & Trust Company
Steven Brownlee Capital One, N.A. John Charrier M&T Bank John Cogar PNC Bank, N.A. Stephen Kensinger Old Line Bank Kenneth Krach M&T Bank
Johann Lopez Citibank Eileen Lunga M&T Bank R. Mark Metz PNC Bank, N.A. Michael L.Middleton Community Bank of the Cheseapeake C. Richard Miller, Jr. Woodsboro Bank
Robert Tartaglia JPMorgan Chase & Co. Joyce Vance Sandy Spring Bank Mary Wasaff BB&T
MBA’s Public Policy Team Maryland Bankers Association Kathleen Murphy President & CEO Mindy Lehman Vice President of Government Affairs Alex Choi Government Affairs Specialist Gordon Feinblatt, LLC General Counsel Bob Enten, Esq. Counsel Margie Corwin, Esq. Carla Witzel, Esq.
Kelly Whitley Bank of America John Yee Frederick County Bank
Second Quarter 2014 | 7
Day in Annapolis Maryland Bankers Take Annapolis by Storm
MBA members on the Senate floor with Senate President Thomas V. Mike Miller.
n February 5, 2014, over 80 bankers from 25 banks around Maryland convened in Annapolis for MBAâ€™s Day in Annapolis. Back by popular demand, the Day in Annapolis program provides a unique avenue for MBA members to meet with individual legislators, learn about Marylandâ€™s legislative process, and communicate about banking issues and their individual banks. Through participation in the Day in Annapolis, 8 | The Maryland Banker
MBA members effectively developed relationships with legislators and staff, and experienced first-hand the advocacy role of the Maryland Bankers Association. The day began with a panel of legislators and bank directors, including: Sen. Delores Kelley (D- Baltimore County; director, vice chairman, The Harbor Bank of Maryland) and Delegates Brian McHale (D-Baltimore City; director, Bay-Vanguard Federal Savings Bank)
and Delegate Pam Beidle (D-Anne Arundel County; director, chairman, compliance committee, Arundel Federal Savings Bank). Panelists provided their perspectives on the 2014 Legislative Session, their entrance into politics, and their dual roles as legislators and bank board directors. Panelists also emphasized the great importance of citizen involvement in the legislative process and encouraged open communication with legislators.
Following the panel session, attendees proceeded to the Maryland State House to observe the floor proceedings. Sitting in the gallery of the two chambers, our members were introduced on both the Senate and House floors. During the proceedings, attendees observed very lively debate amongst the legislators and a moving tribute to our fallen heroes overseas. After observing the proceedings in the Senate and House, our attendees returned to the Lowe House Office Building, where MBA’s President and CEO Kathleen Murphy and Vice President of Government Affairs Mindy Lehman provided a legislative update. The briefing helped prepare attendees for their meetings with Maryland legislators. As part of the Day in Annapolis, attendees met with their legislators to discuss the communities they serve, and issues facing our industry. Murphy led a small group of industry leaders to a meeting with both Speaker of the House Michael Busch and President of the Senate Thomas V. Mike Miller. Meeting attendees had the opportunity to accompany the speaker and the president in their respective chamber lounges, and speak candidly with both about issues facing the communities they serve and gain valuable insight into the 2014 Legislative Session. Members of MBA’s Council of Professional Women in Banking and Finance also traveled to Annapolis for a special forum with guest speaker Sen. Nancy King (D-Montgomery County; president, Maryland Women’s Legislative Caucus). During this interactive panel, King provided valuable insight into the legislative session, the Women’s Caucus 2014 agenda, and discussed the importance and need for women to serve in public office as well as ways for attendees to get involved. MBA thanks our speakers and attendees for your outstanding participation in this important day of advocacy. No one makes a better banking advocate than a banker! ■
MBA members on the House floor with Speaker of the House Michael Busch.
MBA members met in the chamber lounge of Senate President Thomas V. Mike Miller for an open dialogue about issues facing the banking industry and to gain insights into the 2014 Legislative Session.
Senator Nancy King (D-Montgomery County, and president, Maryland Women’s Legislative Caucus) was guest speaker at a special forum for members of MBA’s Council of Professional Women in Banking and Finance.
Over 80 bankers from 25 banks around Maryland convened in Annapolis for MBA’s Day in Annapolis.
From left: MBA’s President & CEO Kathleen Murphy serving as moderator to the following panel of legislators and bank directors: Delegates Brian McHale (D-Baltimore City; director, Bay-Vanguard Federal Savings Bank); Senator Delores Kelley (D- Baltimore County; director, vice- chair, The Harbor Bank of Maryland); and Delegate Pam Beidle (D-Anne Arundel County; director, chair, Compliance Committee, Arundel Federal Savings Bank).
Second Quarter 2014 | 9
Council of Professional Women in Banking and Finance 2014 Annual Conference Thursday, May 1, 2014 Hilton BWI Hotel 1739 West Nursery Road Linthicum, MD The Council of Professional Women in Banking and Finance is where professional women
Connect, Learn, Empower, and Succeed.
For more details and sponsorship opportunities contact MBAâ€™s Cindy Gentilcore at 443-837-1602 or email@example.com. Register online today at www.mdbankers.com. 10 | The Maryland Banker
Council of Professional Women in Banking and Finance 2014 Philanthropy Initiative If only your shoes could talk … they would have a story to tell! Donate your used shoes so others can benefit and begin to build their own story!
n February 10, 2014, the Maryland Bankers Association’s (MBA) Council of Professional Women in Banking and Finance launched its 2014 philanthropy initiative, a statewide used shoe drive, in partnership with Soles4Souls, that runs from February 10 through May 1. Based in Nashville, Tennessee, Soles4Souls (S4S) is a global 501(c)3 nonprofit organization dedicated to fighting the devastating impact and perpetuation of poverty. Through its mission to “wear out poverty,” Soles4Souls collects new and used shoes from individuals, schools, churches, organizations and corporate partners, then distributes those shoes to people (mainly women) in need through microenterprise programs designed to create jobs in poor and disadvantaged developing nations. Soles4Souls has distributed over 21 million pairs of shoes in 127 countries, and is “changing the world one pair at a time.” Through this partnership, the following will transpire: • MBA member bank branches/organizations will collect donations of women’s, men’s and children’s used shoes. • The drive’s collection goal: 25,000 pairs of used shoes or more. • Shoes are sent to Soles4Souls for processing. • The donated shoes create micro-enterprise programs in developing nations, which create jobs that help fund Soles4Souls operations. • The money raised from the Council of Professional Women in Banking and Finance Used Shoe Drive will pay for 500 new pairs of shoes (Sketcher clogs) to be donated to a Maryland nonprofit organization at a New Shoe Distribution Event in 2014.
If your bank branch/organization is interested in participating or would like more details, please contact MBA’s Cindy Gentilcore at (443) 837-1602 or cgentilcore@ mdbankers.com. The deadline date to register to participate is March 28, 2014. The Council of Professional Women in Banking and Finance Advisory Board expresses its sincerest gratitude for the many bank branches/organizations participating and for giving back to a great cause! ■
The goal the Council of Professional Women in Banking and Finance is to have bank branches throughout the state of Maryland participate in the 2014 Philanthropy Initiative Used Shoe Drive. Second Quarter 2014 | 11
DATA SECURITY TARGET BREACH ONLY THE LARGEST OF MANY
BY STEVE VIUKER
The massive credit and debit card breach at Target over the 2013 holiday season was only the largest of almost two dozen similar data breaches over the past year alone. But it’s one that got both the banking and the merchant worlds to focus on the costs and consequences of a massive and vulnerable payment system – and the challenge of vigilance on the part of employees and vendors. Target, the nation’s third-largest retailer, issues proprietary debit and credit cards known as the “Target REDcard.” The credit and debit versions of the Target REDcard were impacted in the breach, along with most credit cards used at Target stores. Attackers began skimming data from credit and debit card transactions at 12 | The Maryland Banker
Target’s cash registers on November 27, and continued to do so until the breach was shut down on December 15. The software also found its way to another Target system, where it stole personal data such as email addresses and phone numbers for 70 million people. The Federal Bureau of Investigation
said it has identified around 20 cyberattacks in the past year similar to the one that hit Target. The U.S. Secret Service is taking the lead in the investigation into the attack on Target and other retailers, but had said little publicly as of the end of January.
Big Distress Downstream Saying that safeguarding customer information is central to maintaining public trust, Independent Community Bankers of America (ICBA) President and CEO Camden R. Fine called on Congress to take action to mitigate the negative impact on the public of security breaches. Additionally, ICBA called for a single national standard to replace the patchwork of state laws on data security breaches that fosters confusion and puts consumers at risk. The ICBA said it strongly supports notification to allow consumers to take
Maryland Bankers Survey Results on Data Breach BY ALEX CHOI
steps to protect themselves from identity theft or fraud resulting from data breaches. Scott Tangney, executive vice president, financial and professional services at New York City-based Makovsky Integrated Communications, said cyber break-ins will push consumers to other retail brands and will shake customer confidence in online sales. “Will consumers increasingly hold retailers accountable for this type of situation and the speed and course of action taken?” he asks. “Will regulators force retailers to have a certain level of cybersecurity program in place? How will the payments industry respond?” Tangney notes that the open letter from Target CEO Gregg Steinhafel, published in newspapers and on the company’s website, was straightforward “and hit some good points,” but did not cover the steps
the company will take to prevent another data breach. “Yes, it was a criminal act, but if you leave the keys in your friend’s car and it gets stolen, don’t you have some accountability?” he asked. The National Retail Federation (NRF) declined to comment, but published an open letter to House Speaker John Boehner and Senate Majority Leader Harry Reid on Jan. 21, calling for the payment card industry to adopt the PIN and chip technology now used in Europe, Canada and many other countries. The NRF also called for a federal cyber-security law to allow the sharing of information about cyberthreats, and for a uniform federal breach notification law to allow retailers to focus on a single compliance regulation and to give consumers around
The Maryland Bankers Association (MBA) recently polled member financial institutions to ask what policies and procedures they implemented in response to the Target data breach. A total of 21 financial institutions responded. The most common practice after receiving the list of compromised cards was to contact the cardholder, through mail or phone (often both) and notify them of the compromise. A replacement was then sent to the cardholder. As the compromise was found during the holiday season, many institutions worked on an individual basis with the cardholder to allow for the least amount of disruption for the cardholder. After the issuance of new cards, old cards were made “hot.” Many institutions had to divert resources from other departments to work on the issue of the compromised cards. Based on the feedback, the MBA estimates the initial direct costs associated with card replacement averaged $10 per card. The total impact of the Target breach on banks in Maryland is still unfolding as many institutions had not calculated costs associated with overtime, fraudulent charges, and lost hours on other projects. From the majority of those surveyed, there appeared to be a general consensus that the diversion of resources to quickly, safely and smoothly notifying customers and transitioning them into a new card during the holiday season was a major issue. Because of the large amounts of cards being requested from the vendors, wait times were much longer. Alex Choi is government affairs specialist for the Maryland Bankers Association.
Continued on page 14
Second Quarter 2014 | 13
ABA Comments on Target Data Breach BY CHRISTINA P. O’NEILL
The Target data breach seems to have raised the outrage bar in the financial community, which has cost the industry millions of dollars in expenses for reissued cards and countless hours of employee time, commented Ken Clayton, executive vice president and chief counsel at the American Bankers Association (ABA). In a Feb. 14 newsletter comment that was definitely not Valentine’s Day material, Clayton said that the bright side of the scope of the breach presents the industry with an opportunity to draw public and legislative attention to a long-standing problem that until now, there had been an insufficient level of political will to remedy. “It is wrong that banks must pay for others’ security lapses,” Clayton noted. “It is wrong that retail stores that handle the most sensitive of customers’ personal financial information are not held to the same high standards as banks. And, most importantly, it is wrong that consumers must deal with the hassles and inconveniences of fraud and card reissuances caused by inadequate controls at major retailers.” The ABA is seeking maximum reimbursement for banks affected by the breach – and wants to change the game plan to deal with future breaches. But, Clayton says, the ABA is also seeking common ground, engaging in a cybersecurity partnership announced in mid-February, with the goal of reaching accord among all members of the payment system to commit to the highest security standards. To make that happen, Clayton said, would require all participants “to have skin in the game.” “Our goal is shared responsibility for a payment system that provides maximum protection for customers while supporting commerce,” and said that Target’s breach presents “an opportunity to help us get there.” Christina P. O’Neill is editor of custom publications for The Warren Group, publisher of Maryland Banker
the country a uniform, consistent law to protect their rights.
Thinking About the Next Move Electronic Transactions Association CEO Jason Oxman said in January that the Target breach could not have been prevented by the use of EMV cards alone (EMV is short for Europay-MastercardVisa, the three entities that developed the chip and PIN standard used in Europe). “It’s too early to be pointing fingers,” he said. “Target has taken responsibility for the breach of its systems. The lack of chip technology has been cited as the reason the Target breach took place. The Target breach, from what we know, was an internal breach of Target’s system and had nothing to do with EMV and would not have been prevented by EMV cards. EMV makes it harder for criminals to use stolen information to manufacture stolen credit cards, but it doesn’t prevent breaches such that happened at Target or Neiman Marcus. Target maintained its customer
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information in an unencrypted form.” According to FierceRetail.com, cybercrime firm InterCrawler confirmed in mid-January that at least six unnamed retailers have been hit with data breaches similar to Target’s. Those merchants used point of sale (POS) systems infected with the same malware used in the Target breach. InterCrawler has reportedly alerted law enforcement, Visa Inc. and intelligence teams at several large banks regarding the discovery. A report from iSIGHT Partners, titled “Indicators for Network Defenders,” maintains that the malware used to extract
A McAllen Police detective collects credit cards that were confiscated by police after arresting a man and a woman on fraud charges on Jan. 20 in McAllen, Texas. According to a South Texas police chief, the suspects used account information stolen during the Target security breach to buy tens of thousands of dollars’ worth of merchandise, but a spokesman for the U.S. Secret Service said an investigation is ongoing into the possibility of a link between the Target data breach and the arrests.
personal data from POS terminals at store check-outs was “almost certainly derived” from BlackPOS software that contained malware scripts with Russian origins. “The issue of credit card data theft is larger than any retailer, any bank, and even than any country. It is transnational, transindustry, and growing rapidly,” said Davia Temin, president of Temin and Company. “It is a powerful form of financial terrorism. The remedies to the problem need to transcend specific companies and industries. That means cooperative efforts of government law enforcement, across
borders and in cooperation with private security. I do doubt that governments will have the resources to help banks with costs, however. The real solution will only come through multiple-party cooperation to help identify and stop the behavior, as well as [to] find technological solutions to lessen the impact of the theft.” ■ Editor’s Note: The original version of this article originally ran in the first quarter issue of Banking New York, a publication of The Warren Group.
Second Quarter 2014 | 15
2014 ‘First Friday’ Economic Outlook Forum Draws 700 Attendees in from the Snow
From left: Kathleen Murphy, president & CEO, MBA; Alex Boyle, (retired) former vice chairman of Chevy Chase Bank; Anirban Basu, chairman and CEO, Sage Policy Group; Jeffrey Lacker, president, Federal Reserve Bank of Richmond; Calvin Barker, regional president, Baltimore metro region, BB&T, and member of MBA board of directors; Gordon Cooley, deputy commissioner of financial regulation, DLLR; David Beck, senior vice president and regional executive, Federal Reserve Bank of Richmond-Baltimore Branch; and Bob DeAlmeida, MBA chairman, and president & CEO, Hamilton Bank.
Anirban Basu, chairman and CEO of Sage Policy Group moderated a panel of economists. The panelists included, from left: Jeffrey Schappe, CFA, managing director and chief market strategist, Sterling Capital Management, an independently operated subsidiary of BB&T Corporation; Agnes “Aki” Pampush, CFA, director of equity strategies, SunTrust Private Wealth Management; and Anika Khan, director and senior economist, Wells Fargo Securities, LLC.
ven snow could not stop the 700-plus attendees from the seventh annual “First Friday” Economic Outlook Forum on January 3, at the Renaissance Harborplace Hotel in Baltimore. Business leaders and bankers from across the State joined together to hear the details on what’s ahead for the economy and the impact on business. Anirban Basu, chairman and CEO of Sage Policy Group, kicked off the event, focusing on the Mid-Atlantic region. Basu was joined by a panel of bank economists as they identified trends in various market segments, including real estate, health care and construction. Panelists included Anika Khan, director and senior economist, Wells
Fargo Securities, LLC; Agnes “Aki” Pampush, CFA, director of equity strategies, SunTrust Private Wealth Management; and Jeffrey Schappe, CFA, managing director and chief market strategist, Sterling Capital Management, an independently operated subsidiary of BB&T Corporation. Dr. Quincy Krosby, chief market strategist for Prudential Securities, joined the group remotely, delivering compelling remarks about quantitative easing and the transitions at the Federal Reserve system and the board of governors. Finally, Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, addressed the group with a look ahead and the trends he is seeing in the economy. ■
Save the Date – Next year’s event will take place on Friday, January 9, 2015. 16 | The Maryland Banker
Guests put forward questions to Jeffrey Lacker, president, Federal Reserve Bank of Richmond.
Jeffrey Lacker, president, Federal Reserve Bank of Richmond, addressing the group.
GF_Banker'sNewsletter 1/10/14 8:30 AM Page 1
Thank You To the participating associations: Maryland Association of CPAs Maryland Chamber of Commerce Maryland Realtors Association Maryland Retailers Association
And the eventâ€™s sponsors: Platinum Sponsor BB&T Gold Sponsors Old Line Bank SunTrust Bank Wells Fargo Bank, N.A. Silver Sponsors Bank of America Sandy Spring Bank Patron Sponsors Arundel Federal Savings Bank Baltimore County Savings Bank Bay Bank, FSB Business Finance Group, Inc. Calvin B. Taylor Banking Company Capital One, N.A. Community Bank of the Chesapeake Farmers & Merchants Bank Federal Home Loan Bank of Atlanta First United Bank & Trust Hamilton Bank Howard Bank M&T Bank New Windsor State Bank OBA Bank PeoplesBank, A Codorus Valley Company Revere Bank Shapiro Sher Guinot & Sandler Susquehanna Bank The Bank of Glen Burnie The Columbia Bank UHY Advisors Woodsboro Bank Yount, Hyde & Barbour
The leaders in providing legal advice to Marylandâ€™s financial services industry
D. Robert Enten Carla Stone Witzel David S. Musgrave Marjorie A. Corwin Peter B. Rosenwald, II Christopher R. Rahl Brian L. Moffet Andrew D. Bulgin John C. Morton Victor A. Kwansa Travis W. Dalton Attorneys at Law 233 E. Redwood Street n Baltimore, MD 21202 410-576-4000 n www.gfrlaw.com
Shared Patron Sponsors Bay-Vanguard Federal Savings Bank Carroll Community Bank Dixon Hughes Goodman LLP Harford Bank Watkins Meegan LLC Watkins Consulting, Inc.
Second Quarter 2014 | 17
Save the Date!
118th Annual Convention of the
Maryland Bankers Association June 1-4, 2014 at
Nemacolin Woodlands Resort Farmington, PA
Please contact MBAâ€™s Pat Holle (443-837-1607 firstname.lastname@example.org) or Andrea DeVilbiss (443-837-1606 email@example.com) for sponsorship information. Registration materials will be available soon.
Message from the President continued from page 7
Take, for example, two bills addressing so-called “patent trolls.” These entities will purchase large amounts of vague, general patents for the purpose of collecting user license fees or pursuing litigation against those who they assert have infringed on their patent. This issue is not specific to the banking industry, but it has affected us in the form of assertions against certain ATM and check imaging technologies. Two Maryland banks received letters from the same “patent troll” alleging that their ATMs used technology for which the trolls claimed they owned the patents. In one case, the bank paid $40,000 in sub-license fees to the “troll,” as it saw its legal expenses defending itself escalate. Senate Finance Committee Chairman Thomas MacLain “Mac” Middleton introduced SB 585; a nearly identical bill, HB 430, was introduced in the House by Delegate Jon Cardin. The bill sets standards of “good faith” and “bad faith,” which the attorney general or the courts can use to determine whether a patent
assertion violates Maryland law. It gives the Office of the Maryland Attorney General the power to investigate these claims and to request proof that the patent holder is acting in good faith. At a February 5 hearing before the House Economic Matters Committee, about 20 bankers made their concerns known regarding this bill. Despite the inclement weather that day, Maryland bankers showed up in force, with a total of 80 bankers attending the Day in Annapolis. This is just one example of how the MBA uses the legislative process to address a member challenge or concern. Three other bills have been introduced on our behalf addressing funds transfers under the Uniform Commercial Code; UCC Article 4(a); a rewrite of the Maryland Trust Code which has been an initiative of MBA’s Trust Committee for several years; and a bill to establish a new index for paying interests on mortgage escrow accounts and certain club accounts, as the Federal Reserve is no
longer publishing the index formerly used in Maryland. When we do our work in the General Assembly, we know our members “have our backs,” providing input, getting involved and making their perspectives and voices heard. The importance of member involvement is essential. Every August, I teach a leadership and advocacy class at MBA’s Maryland Banking School. The class’s objective is to nurture emerging leaders and instill in them the responsibility to advocate for their bank and their industry. The enthusiasm around the important role that bankers can play and how they can make a difference is contagious. That’s something I hope all of our members experience as, together, we are shaping the industry’s future. ■ It’s my honor to serve this great industry. Please contact me at any time to discuss issues of importance to you at firstname.lastname@example.org or 443-837-1601.
To be the best, learn from the best.
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Second Quarter 2014 | 19
News & Notes Members on the Move
Suzette Covalt joined Carroll Community Bank’s commercial lending division. Prior to joining Carroll Community Bank, she was most recently a business banking manager at PNC in Westminster. Prior, Covalt held similar positions at Susquehanna Bank, and BB&T (formerly Carroll County Bank and Trust). Kristen Snow joined Frederick County Bank (FCB) as vice president of commercial lending. Snow has nearly 20 years of experience in the financial services industry, including 14 years in commercial lending, specializing in commercial real estate lending, as well as five years of credit experience.
The Columbia Bank appointed Mark Mullican as the president and chief operating officer. As president, he will oversee production activities throughout Maryland and the other markets in which the bank operates. He will work closely with John Scaldara Jr., who will remain chairman and CEO. In addition, Scaldara will assume additional responsibilities for The Columbia Bank’s parent company, Fulton Financial Corporation. Mullican most recently served as president of the Brokerage Division of Fulton Financial Corporation. In that capacity, he was responsible for brokerage sales throughout Pennsylvania, Maryland, New Jersey, Delaware and Virginia.
Federal Reserve of Richmond Honors Bill Grant Former MBA Chairman Bill Grant, chairman & CEO of First United Bank and Trust, was honored on December 11, 2013, for his years of service as a member of the board of directors of the Federal Reserve Bank of Richmond-Baltimore, and was presented with a framed letter and Seal from Federal Reserve Chairman Ben Bernanke. Photo (L to R): Mark Mullinix, first vice president, Federal Reserve Bank of Richmond; Bill Grant, chairman & CEO, First United Bank and Trust; Jeff Lacker, president, Federal Reserve Bank of Richmond; Dave Beck, senior vice president and regional executive, Federal Reserve Bank of Richmond-Baltimore Branch; and Kathleen Murphy, MBA’s president and CEO. 20 | The Maryland Banker
Christopher Mills joined The Columbia Bank as vice president of government contract banking. He previously worked for Sterling National Bank as vice president, government contractor finance. He will be responsible for developing new business opportunities and managing the government contracting portfolio in the Maryland and Washington D.C. metro marketplace. Queenstown Bank of Maryland promotions: Heather Dodd was promoted to branch manager of the bank’s Easton branch. She has been assistant branch manager at that branch since 2012 and has been with the bank since January 2003. Jamie Dulin was promoted to vice president and retail branch administrator. In this position she will be responsible for overseeing the operation of the branch offices. She has been with the bank since December 2008. Brooke Horney was promoted to vice president and chief credit officer. She began her career at the bank in June 2011 as a credit analyst. Emory Vandiver has joined Computer Services, Inc. (CSI) as its new business development director for the East Coast. Emory has more than 15 years of experience working with cloud-based IT and managed services solutions. Through his expertise, Vandiver will assist financial institutions in executing business objectives that enhance IT enterprises and simplify the complexities associated with managing IT systems. He brings a very strategic approach to helping financial institutions leverage hosted technology to its fullest potential.
Members in the Community 2014 Influential Marylanders Honorees This year the Daily Record will host its annual Influential Marylanders event on March 27, 2014, at The Grand Lodge in Cockeysville. The Daily Record created Influential Marylanders in 2006 to honor people who have made significant, statewide impacts in 10 key segments of the state’s civic, commercial and professional activity: Civic Leadership, Communications, Education, Finance, Freestyle, Health Care, Law, Philanthropy, Real Estate, and Technology. We would like to congratulate Andy Bertamini, regional president, Maryland market, Wells Fargo Bank, N.A., and member of MBA board of directors; Dan Schrider, president and CEO, Sandy Spring Bank, and MBA vice chairman; and Kathleen Murphy, president and CEO, Maryland Bankers Association, for being named amongst The Daily Record’s list of 2014 Influential Marylanders in the category of finance. In total 50 honorees were selected.
NAACCC President’s Community Service Award Congratulations to Arundel Federal Savings Bank for receiving the 2013 North Anne Arundel County Chamber of Commerce President’s Community Service Award.
Queenstown Bank of Maryland Awarded the Good, Better, Best Award Congratulations to Queenstown Bank of Maryland, which was chosen by the Shore Update readers in 2013 as The Best Bank Service and The Best Place To Work in Queen Anne’s County. The Shore Update is a local magazine in Queen Anne’s
County that is distributed to over 17,000 households monthly. Each year, readers have an opportunity to vote on local businesses in the Good, Better, Best Award contest.
The 2014 Outstanding Directors Awards Congratulations to Andy Bertamini, regional president, Maryland market, Wells Fargo Bank, N.A., and member of MBA board of directors; and Gary Geisel, former CEO of Provident Bank and former MBA chairman, for their recognition by the Baltimore Business Journal as an Outstanding Director for 2014. Eight board directors serving on boards of companies and nonprofits around greater Baltimore were selected for this award. ■
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Mar yland Bankers Association Professional Development Calendar A Local ABA Training
SPECIAL EVENTS May 1 June 1-4
Council of Professional Women in Banking and Finance Annual Conference
Maryland Banking School
SEMINARS, WEBINARS, SCHOOLS, AND ONLINE TRAINING Finance April 3, 10, 17 Managing a Dynamic ALCO (GSB) April 7 Managing Interest Rate Risk (AIB) May 5 Managing Deposit Costs in a Rising Rate Environment (GSB)
Managing Funding, Liquidity, and Capital (AIB)
Executive Management & Directors April 3 April 8
Board Succession: Best Practices (GSB)
Survival of the Fittest! New World Strategies for Every Community Bank to Ponder (GSB)
Analyzing Bank Performance (AIB)
Survive and Thrive: Six Strategic “Must-Dos” and Best-Practice Strategies (GSB)
General Banking April 14 April 14 April 22-24 April 28 May 8 May 12 June 9 August 3-15
General Accounting (AIB) Principles of Banking (AIB) Understanding the Business of Banking and Factors that Drive Profitability (GSB)
April 30 May 2 May 8
April 7-8 April 7-9
April 15 April 21-23 April 21-22 April 21 April 22 April 28-29 May 5-6
Health Insurance Pre-Licensing (Glen Burnie)
Property & Casualty Pre-Licensing (Glen Burnie)
May 12 May 12-13 May 13 May 19 May 19-20
Health Insurance Pre-Licensing (Glen Burnie)
May 19-21 May 27-28 Principles of Banking (AIB) June 2-3 Supervisor Certificate (AIB) Eight Habits of Effective Bank Managers (GSB) June 2-4 Money and Banking (AIB)
Economics for Bankers (AIB) Law & Banking: Principles (AIB) Principles of Banking (AIB) General Accounting (AIB) Principles of Banking (AIB) Graduate School of Banking (GSB)
Interviewing Skills for Better Hires (GSB) Human Resource Management School (GSB) Win the Talent War! Robust Talent Management and Holistic Succession (GSB) Employment Law Update (GSB)
Property & Casualty Pre-Licensing (Glen Burnie)
Life Insurance Pre-Licensing (Glen Burnie)
Commercial Lending (AIB)
Property & Casualty Pre-Licensing (Towson)
Sales & Marketing
Life & Health Combo Pre-Licensing (Glen Burnie) Life Insurance Pre-Licensing (Glen Burnie) Life & Health Combo Pre-Licensing (Towson) Life & Health Combo Pre-Licensing (Glen Burnie)
Life & Health Combo Pre-Licensing (Glen Burnie) Life Insurance Pre-Licensing (Glen Burnie) Health Insurance Pre-Licensing (Glen Burnie) Life & Health Combo Pre-Licensing (Glen Burnie) Property & Casualty Pre-Licensing (Towson) Life & Health Combo Pre-Licensing (Towson) Life & Health Combo Pre-Licensing (Towson) Property & Casualty Pre-Licensing (Glen Burnie) Commercial Lending (AIB)
Analyzing the Company’s Liquidity Position Using the Cash Conversion Cycle (GSB)
April 14 April 15
Consumer Lending (AIB)
Problem Loan Identification and Prevention (GSB)
Intro to Agricultural Lending (AIB)
The First Three Calls on a Prospect: Proven Techniques for Building Momentum (GSB)
Creating Compelling Advertising for Community Banks (GSB)
April 21 April 22
Money Saving, Money Making Marketing Ideas (GSB)
Understanding C&I Loan Structuring, Loan Agreements and Covenants (GSB)
May 5 May 6
Analyzing Financial Statements (AIB)
Marketing Financial Services (AIB) The Evolution of Social Technology (GSB) Build an Effective Referral Program in 60 Days (GSB) Managing the Customer Experience – It’s a Bottom Line Necessity (GSB)
Security & Technology March 30 – April 4 Bank Technology Management School (GSB) April 1 Easy To Use Audit Tools that Won’t Break the Bank (GSB)
Social Media for Financial Institutions and Regulatory Expectations (GSB)
April 10 April 17 April 24 May 1
Penetration Testing: Start-to-Finish (GSB)
May 7 May 8 May 15 May 21 May 28
Security Awareness and Social Engineering (GSB)
Social Media Attacks 101 (GSB) Mobile Device Security Best Practices (GSB) Mobile Security: Making Sense of Mobile Device Management (MDM) Systems (GSB) Proactive IT Security Self-Defense (GSB) Hacking Headlines (GSB) Rollovers Between Retirement Plans and IRAs (GSB) Roth IRA Distributions (GSB)
April 21 April 23 April 30 Flow Integration Issues for Lenders and May 7 Analysts (GSB) May 14 Financial Statement Projections: Going Beyond June 23 Historical Ratio and Cash Flow Analysis to Make a Simplified and Effective Forecast (GSB) June 23
Key Ratio Analysis: Calculating the Numbers Correctly (GSB)
2014 Integrated Disclosures: The New Closing April 2 Disclosure
April 15 & 17 Ag Lending in a New Business Climate (GSB) April 29 Business Cash Flow Basics and Global Cash
Life & Health Combo Pre-Licensing (Towson)
Consumer Lending (AIB)
April 7 April 8
Leverage the Middle of Your Organization (GSB)
Errors & Omissions, Identity Theft, and Risk Management (Columbia)
May 12 May 13
Life & Health Combo Pre-Licensing (Glen Burnie)
Coaching for Better Performance (GSB)
Insurance April 1
Health Insurance Pre-Licensing (Glen Burnie)
Law and Banking: Applications (AIB)
HR Management April 3 April 6-11 April 10
April 14 April 14-15
IRA Conversions and Recharacterizations (GSB) Basic Administrative Duties of a Trustee (AIB) IRA Beneficiary Distributions (GSB) Traditional IRA Distributions (GSB) Establishing and Amending IRAs (GSB) IRA Contributions (GSB) Intro to Trust Products and Services (AIB) ABA Online Review Course for the CTFA Exam (AIB)
Loan Underwriting Mistakes (GSB)
For detailed and updated information on all professional development programs, visit the Calendar section of the MBA’s website at www.mdbankers.com.
22 | The Maryland Banker
Our Members Are Your Best Prospects. Start building stronger business relationships today. Maryland Banker, the official magazine of the Maryland Bankers Association, is the one and only magazine dedicated to the banking community throughout Maryland. The publication reaches all 134 Maryland banks – providing comprehensive penetration to a variety of decision-makers in virtually every bank in the territory. This local product, with familiar names and faces, is turned to first and foremost for industry news and vital market information. With Maryland Banker, you’re reaching decision makers – our primary readers include CEOs, executives, managers and specialists, including those who are most involved with their association and the industry. Our growing distribution list includes CFOs, CLOs, branch managers, loan and trust officers, marketing, HR and IT officers. Maryland Banker offers advertising and sponsorship opportunities in three targeted marketing programs – digital, print and live events – reaching readers on multiple platforms. Building a relationship with each channel is the most comprehensive and effective way to reach your best prospects. Each fall, the affiliated tradeshow, BankNext, gives you an opportunity to meet face-to-face with the movers and shakers in the Maryland banking industry.
MEDIA SOLUTIONS > PRINT Quarterly Magazine Maryland Banker
> ONLINE Website and Digital Magazine Advertising Direct Email Marketing
> EVENTS Sponsorship and Exhibitor Opportunities at BankNext
Questions? To learn more about Maryland Banker or to customize a marketing program unique to your business needs, call 800-356-8805 ext. 307 or email email@example.com. The official magazine of the Maryland Bankers Association
With Operation 411, compliance isn’t a 911.
In the next few years, financial institutions will face mandatory changes to the self-service channel. Diebold is responding now, with Operation 411: 4 compliance requirements, from 1 company with 1 request. With Diebold as a proactive partner, you’ll be efficiently ahead of change to meet everything from Windows® 7 updates to PCI compliance. Operation 411. It’s another example of how Diebold never stops watching the future, as it helps you now.
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Published on Mar 11, 2014
Maryland bankers take Annapolis by storm; the Council of Professional Women in Banking and Finance’s 2014 philanthropy initiative; and cover...