New
Jersey
WIN T ER 2 0 1 1
B A N K E R
Celebrating 26 Years of Service James Silkensen Retires
Bankers Legislative Day / BOLI is Back / Social Media E n d o r s e d b y t h e Ne w J e r s e y B a n k e r s A s s o c i a t i o n
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New Jersey Bankers Association www.njbankers.com 411 North Avenue East Cranford, NJ 07016-2436 Phone: 908-272-8500 Fax: 908-272-6626
Jersey B A N K E R
NJBankers Board of Directors Robert C. Ahrens Immediate Former Chairman President/Chief Executive Officer GCF Bank William E. Arnold President/Chief Executive Officer Saddle River Valley Bank Norman E. Beatty Chairman/President/ Chief Executive Officer First Hope Bank Steven E. Brady President/Chief Executive Officer Ocean City Home Bank
Peter M. Brown President/Chief Executive Officer Manasquan Savings Bank
Joseph F. Dempsey, Jr. President – NJ Middle Market Banking JPMorgan Chase Bank, N.A.
Walter Celuch President/Chief Executive Officer Clifton Savings Bank
Peter A. Dontas Market Executive Bank of America
Joseph Coccaro President/Chief Executive Officer Bogota Savings Bank
David J. Hemple President/Chief Executive Officer Century Savings Bank
Robert E. Davis, Jr. President/Chief Executive Officer Rumson-Fair Haven Bank & Trust Co.
Stanley J. Koreyva, Jr. Chief Operating Officer/ Executive Vice President Amboy Bank
The Warren Group Staff Timothy M. Warren Chairman
Timothy M. Warren Jr. CEO & Publisher
David B. Lovins President
Vincent Michael Valvo Group Publisher & Editor in Chief
Jeffrey E. Lewis Controller & Director of Operations
George Chateauneuf Publishing Division Sales Manager
Sarah Cunningham Director of Events
Cara Inocencio Advertising Account Manager
Richard Ofsthun Advertising Account Manager
Emily Torres Advertising, Marketing & Events Coordinator
John Bottini Creative Director Christina P. O’Neill Custom Publications Editor
Scott Ellison Senior Graphic Designer Ellie Aliabadi Graphic Designer
Cassidy Norton Murphy Associate Editor
www.thewarrengroup.com 280 Summer Street • Boston, MA 02210 617-428-5100 Published continually as a quarterly publication by the New Jersey Bankers Association from 1929 to Winter 1986. Revived as a quarterly publication by NJBankers and The Warren Group in 1998 under the name New Jersey Bank & Thrift and continued as New Jersey Banker in 2002. Combined with The League Leader, published by the New Jersey League of Community Bankers, in December 2008 and continued as New Jersey Banker.
Margaret Lanning Senior Vice President, Senior Regional Credit Officer-Northeast Region Wachovia, a Wells Fargo Company
Robert H. King Third Vice Chairman Senior Vice President Roma Bank John E. McWeeney, Jr. Co-President and Co-CEO New Jersey Bankers Association
James R. Silkensen Co-President and Co-CEO New Jersey Bankers Association
Robert E. Stillwell President/Chief Executive Officer Boiling Springs Savings Bank
Stewart E. McClure, Jr. President/Chief Executive Officer Somerset Hills Bank
John H. Wessling, III President/Chief Executive Officer Haven Savings Bank
Donald Mindiak President/Chief Executive Officer BCB Community Bank
Gerald H. Lipkin Chairman Chairman/President/Chief Executive Officer Valley National Bank
Kevin Cummings Second Vice Chairman President/Chief Executive Officer Investors Savings Bank
Mortimer J. O’Shea President/Chief Executive Officer Hilltop Community Bank
Christopher Martin President/Chief Executive Officer The Provident Bank
NJBankers Officers
Frank A. Kissel First Vice Chairman Chairman/Chief Executive Officer Peapack-Gladstone Bank
William D. Moss President/Chief Executive Officer Two River Community Bank
NJBankers Staff John E. McWeeney, Jr. Co-President and Co-CEO ext. 627 jmcweeney@njbankers.com
James R. Silkensen Co-President and Co-CEO ext. 617 jsilkensen@njbankers.com
James M. Meredith Executive Vice President and Chief Operating Officer ext. 614 jmeredith@njbankers.com
Candida Johnson Assistant Vice President/ Assistant to the COO and Director of Business Development ext. 615 cjohnson@njbankers.com
Michael P. Affuso, Esq. Senior Vice President and Director of Government Relations ext. 628 maffuso@njbankers.com Richard P. Neale Senior Vice President and Director of Business Development ext. 630 rneale@njbankers.com Emily T. DeMasi Vice President and Director of Communications ext. 610 edemasi@njbankers.com Wendy C. Mandelbaum Controller ext. 603 wmandelbaum@njbankers.com Jenn Zorn Vice President and Director of Education ext. 611 jzorn@njbankers.com Claire Anello Office Manager, Database and Website Manager ext. 631 canello@njbankers.com
Paula H. Cassidy Assistant to the Director of Communications ext. 604 pcassidy@njbankers.com Jean Reiser Assistant to the Co-Presidents and Director of Government Relations ext. 618 jreiser@njbankers.com Cynthia M. Zaccaro Assistant to the Director of Education ext. 632 czaccaro@njbankers.com Catherine Gleicher Administrative Assistant, Receptionist ext. 600 cgleicher@njbankers.com
Counsel Michael M. Horn, Esq., McCarter & English, LLP Mary Kay Roberts, Esq., Riker, Danzig, Scherer, Hyland, Perretti LLP
Contributing Editor Emily T. DeMasi
Winter 2011
New Jersey Banker
3
Table of Contents
New
Jersey B A N K E R
Departments
6
Chairman’s Platform Saying Goodbye to Jim And Looking Ahead
8
From the Co-Presidents’ Office Reflections on Serving New Jersey's Banking Industry
10
Politics & Policy They Have Only Just Begun To Fight
15
New Members
19 Upcoming Events 50 Bank Notes 52 Bank Shots
Features
12
Directors' Corner Why Board Members Are Responsible for Ethics
14
Feature: Third Annual Bankers Legislative Day in Trenton
16
Insurance Life Insurance: An Asset Class That Needs a Second Look
18 24 4
John McWeeney, Jr., co-president and co-CEO of NJBankers, presents a flag flown over the Capitol on Oct. 5, 2010 in Jim’s honor. On the cover: Rep. Leonard Lance (left) presented a citation to Jim Silkensen, co-president and co-CEO of NJBankers, at the retirement dinner held for Jim in October. See the complete story on page 20. Cover photo: Brian Struble, Digital Moment Studios.
Cover Story
20
Celebrating 26 Years of Service: James Silkensen Retires
26
Marketing All Onboard! First Impressions Count, But then Your Offering has to be Useful
28
Feature Surviving Regulatory Reform: Annual Senior Management Conference
Insurance BOLI is Back
29
Feature Quick Response Codes: Tomorrow is Today
Marketing – Social Media Overcoming the Fear Of the Two-Way Conversation
30
New Leaders in Banking Sixteen of the Best of Banking’s Next Generation
New Jersey Banker
42
BankHorizons Photo Essay
44
Feature The Hidden Crisis in Banking
46
Endorsed Service Providers i365, Constellation NewEnergy
48
Behind the Teller Line Peapack-Gladstone Bank
Winter 2011
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Chairman’s Platform
Saying Goodbye to Jim and Looking Ahead By Gerald H. Lipkin
A
s we welcome you to the winter edition of New Jersey Banker, I realize that it won’t be long before we see the first few flakes of snow. It reminds me of how time passes so quickly! I had the pleasure of presiding at the retirement party for NJBankers Copresident/Co-CEO Jim Silkensen. Jim has served the banking Gerald H. Lipkin industry for over 26 Chairman NJBankers years and plans to Chairman/President/CEO officially retire at the Valley National Bank (973) 305-4001 end of December. In
that time, we have certainly seen many changes in our industry – in the number of financial institutions in New Jersey, in regulations, legislation, products, services and technology, just to name a few, and we will certainly see
One thing that has not changed for New Jersey’s banks is our commitment to the communities we serve.
more changes in the years to come. The one thing that has not changed during that time is the commitment and dedication of
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NJBankers to its members. As chairman, I am truly committed to our mission to promote sound business practices, host forums for the free exchange of ideas, provide educational opportunities and representing your interests
before state and federal government and regulatory authorities. Though we will miss Jim, we know that the association is in good hands with John McWeeney. Change always comes bearing gifts, and with his experience and dedication, John is a gift to NJBankers. I also had the pleasure of presiding over two annual and notable events: the Senior Management Conference and Bankers Legislative Day in Trenton. Both programs clearly demonstrate the need for bank CEOs and senior officers to come together for industry updates and then present a strong voice for our industry, especially with so many recent changes affecting how we conduct our business. With the coming deluge of proposed regulations from the Dodd-Frank Act, we will need every member bank involved in letting federal regulators know how those regulations will affect banks. The Senior Management Conference addressed the concerns of managing officers and senior executives responsible for ensuring the success of their institutions in a new regulatory environment. Though there are global issues that affect the economic revival, the conference distilled and extracted information to make it usable and practical for a financial institution in the state. The second event I also had great continued on page 13
Winter 2011
From the Co-Presidents’ Office
Reflections on Serving New Jersey’s Banking Industry By James R. Silkensen
I
t has truly been an honor and privilege for me to have had the opportunity to serve New Jersey’s banking industry for the past 26 years. Our institutions, through good times and bad, are the pillars of their communities, and I could not have chosen a better industry. I want to thank all those who attended and/ or supported my James R. Silkensen retirement dinner. Co-President/Co-CEO NJBankers My family and I will jsilkensen@njbankers.com always remember the event and the many kind words that were said. Thanks also to those who were unable to
attend, but have sent their best wishes. I left my job at the Federal Home Loan Bank Board in 1984, a time when market interest rates were spiraling ever higher, placing savings institutions under intense earnings pressure. This was worsened by New Jersey’s ill-conceived cap on mortgage interest rates and by minimum regulatory capital requirements that did not take into consideration deposit rates that would exceed 12 percent. From 1989 through 1992, 35 of New Jersey’s savings institutions were taken over by regulators and sold or liquidated, but the majority of the industry weathered the storm and learned lessons that have served them well. Today is another time of great economic stress for banks and savings institutions alike, but our banking industry was much better prepared
For lenders, the answer is easy.
this time. The Dodd-Frank Act will harm commercial banks and savings institutions of all sizes, and I fervently hope that the banking industry learned a lesson from this legislation and will not confront future issues of critical importance to the industry with a divided voice. There is great truth to the old adage that “united we stand, divided we fall.” I am proud to have served a trade association that has steadily grown stronger and able to offer more and better services. Milestones include, among others, the formation of TICIC in 1991, the New Jersey Savings League’s combination with New Jersey’s Savings and Community Bankers in 1996, the transformation of NJSL Services, Inc. into Bankers Cooperative Group in 1997, and the formation of the Education Foundation in 2004. In my opinion, the most important development to being able to offer outstanding service was the combination of the New Jersey League of Community Bankers with the New Jersey Bankers Association in January 2009. As talks progressed between the legacy New Jersey League and New Jersey Bankers Association, I came to appreciate more and more that savings and commercial banks face the same important issues and that those in leadership positions have the same dedication to serving the industry and their communities. The combination gives us the staff resources to offer a far wider array of services and the ability to speak with one voice with our state legislature, regulators and the press. The accomplishments during my tenure have been a team effort and I would like to thank my predecessors as president of the legacy New Jersey League, Ed Lawlor and Sam Damiano, the members of the association, all those who have served on the board and as officers of the association and affiliated companies, all those who have served on committees and our terrific staff. Thanks also to my wife, Candy, and my family for their support and their understanding when I was working late or was away at meetings. Our continued on page 17
8
New Jersey Banker
Winter 2011
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Politics & Policy
They Have Only Just Begun to Fight By Michael P. Affuso, Esq.
O
n Nov. 2, 2010, America went to the polls. The result was a resounding blow to President Barack Obama. Democrats lost more than 60 seats in the House of Representatives and saw their majority trimmed in the Senate. In New Jersey, all but one of the 13 incumbent congressmen defeated their respective challengMichael P. Affuso ers. As a result of Senior Vice President/ Director of Government Relations election day victories, NJBankers maffuso@njbankers.com Democrats retained a slim majority of the state’s Congressional delegation to hold seven of the 13 seats. There were also several legislative and local races of note. Some of the important Congressional races included: The Third Congressional District, representing parts of Burlington, Camden and Ocean Counties: One-term Democrat and House Financial Services Committee member John Adler was narrowly defeated by Republican Jon Runyan, a former NFL football player and a broadcast analyst, by a 50 percent to 47 percent vote. The Sixth Congressional District, serving parts of Middlesex, Monmouth, Somerset and Union Counties: 11-term Democratic incumbent Frank Pallone, Jr. defeated his Republican Tea Party challenger, Highlands Mayor Anna Little, who received 44 percent of the vote to Pallone’s 54 percent. Pallone, one of the key sponsors of the federal health care reform law, has in the past won races with 65 to 70 percent of the vote in his district. The Twelfth Congressional District, serving Hunterdon and parts of Mercer, Middlesex, Monmouth and Somerset Counties: Six-term Democratic incumbent Rush Holt defeated Princeton venture capitalist Scott Sipprelle, the Republican challenger, by a vote of 52 percent to 47 percent. Other Congressional races included:
10 New Jersey Banker
First Congressional District – Democratic incumbent Rob Andrews won a convincing victory over Republican Dale Glading, 65 percent to 35 percent. Second Congressional District – Republican Frank LoBiondo held onto his seat by a 35-point margin, defeating Democratic challenger Gary Stein. Fourth Congressional District – Republican incumbent Chris Smith, the dean of the New Jersey delegation, had a huge victory over Democrat Howard Kleinhendler, taking the district by 41 points. Fifth Congressional District – Republican Scott Garrett defeated Democratic challenger Tod Theise by a 32-point margin, 65 percent to 33 percent. Seventh Congressional District – Republican Incumbent Leonard Lance trounced Democrat Ed Potosnak by 60 percent, built on a huge tally in Hunterdon County. Eighth Congressional District – Democratic incumbent Bill Pascrell took down Republican challenger Roland Straten by 60 percent. Ninth Congressional District – Democratic incumbent Steve Rothman scored a resounding win over Republican Michael Agosta, pulling in 60 percent of the vote to Agosta’s 38 percent. Tenth Congressional District – Democratic incumbent Donald Payne galloped to the most convincing win of the evening, scoring an 86 percent drubbing of Republican Michael Alonso. Eleventh Congressional District – Republican Rodney Frelinghuysen kept pace with his colleagues with a 67 percent victory over Democrat Douglas Herbert. Thirteenth Congressional District – Democrat Albio Sires scored the secondlargest victory margin of the night with a 74 percent to 23 percent win over Republican Henrietta Dwyer. There were also several state and local races that will have long-term implications for Gov. Chris Christie: A special election in the Fourteenth legislative district (Mercer/Middlesex) for
the seat previously held by Bill Baroni, who resigned in February to take a position as the deputy executive director at the Port Authority of New York/New Jersey. Former Hamilton Township Council member Republican Thomas Goodwin has held the seat since March, but was defeated by incumbent Assemblywoman Linda Greenstein. Greenstein, a lawyer, has been in the General Assembly since 2000 and is chair of the Assembly Judiciary Committee. Bergen County Republicans also had a huge night, sweeping the Democrats from the county government. Republican Kathe Donovan beat incumbent Democrat Dennis McNerney for county executive by a margin of 56 to 44 percent. Republican Freeholder candidates John Mitchell, Maura DiNicola and John Felice beat Democratic incumbents Elizabeth Calabrese and James Carroll and candidate John Hogan, creating a five-to-two Republican majority on the Bergen County Board of Freeholders. Republican candidate Michael Saudino beat incumbent Democrat Sheriff Leo Maguire for Bergen County Sheriff.
What does it all mean? Republican control of the House of Representatives, coupled with a slim Democratic majority in the Senate (with many Senate Democrats from states trending Republican on the ballot in 2012), will create both moderation and gridlock. Both parties will use their respective positions of power to sound out ideological campaign themes for the coming 2012 election, knowing that the legislation will never become law. Political brinksmanship will return with presidential vetoes and Congressional investigations. In order to gain the support of all parties, legislation that does become law in this environment will be quite moderate. The ascent of Republicans in the House is good news for bankers in New Jersey. With Republicans claiming the majority, Congressman Scott Garrett is primed to continued on page 13
Winter 2011
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Directors’ Corner
Why Board Members are Responsible for Ethics By John Levy
T
his summer, bankers learned of a new kind of risk not taught in business schools or learned in boardrooms – that the risk political changes pose to the profitability of an enterprise may be as large, and have as much impact, as more typical business risks. Within most organizations, the board of John Levy directors must take responsibility for ethical conduct of the business. First, the board must set “the tone at the top.” The Certified Fraud Examiners defines “setting the tone at the top” as “the ethical atmosphere that is created in the workplace by the organization’s leadership.” Organizations ranging from sports teams, to corner convenience stores, to large corporations take on the characteristics of their leaders. The Green Bay Packers of Vince Lombardi were big, powerful and coldly efficient. Bill Walsh’s San Francisco 49ers were smooth, classy and appeared to win with more guile than brawn. If a local convenience store has poorly stocked shelves and dirty floors, the owner probably does not take pride in his or her appearance. The store’s employees, through the owner’s verbal and non-verbal actions, set their work habits to meet the owner’s implicit standards. This is true even if the owner explicitly states that appearance and cleanliness are important. Employees know it is not “do as I say” but “do as I do” that is important. Enron famously had a corporate code of conduct, to which every employee was required to adhere. What message did the Enron board send to all Enron employees when they specifically exempted CFO, Andy Fastow, from complying with the Enron code of ethics? There is probably no better
12 New Jersey Banker
example of a blatant failure to provide a high ethical tone at the top. Most employees know that CEOs can be replaced, but the board is a continuing presence. Even if board members change, the board as an institution continues to oversee the actions of the business. In other words, perceived failure by the board to abide by ethical standards is recognized as a failure to set a proper tone at the top that can have devastating effects on the ethical actions of the corporation. If the employees and the public understand not only by its words, but also by its deeds, that the board will not condone unethical behavior by anyone within the organization, then the effects can be profound. Whatever tone the board and management set will have a trickle-down effect on employees of the company. If the tone upholds ethics and integrity, employees will be more inclined to uphold those same values. However, if the board and upper management appear unconcerned with ethics and focus solely on the bottom line, employees will be more prone to commit fraud, because they feel that ethical conduct is not a focus or a priority within the organization. The public recognizes that directors are responsible for setting the ethical examples for their organizations. The Report of Investigation by the Special Investigative Committee of the Board of Directors of WorldCom, Inc. stated among its findings that the board should have been, but was not, “communicating throughout the company the value of high ethical standards...” Congress revised the U.S Federal Sentencing Guidelines for Organizations (1991) to provide substantial relief to companies, which “... promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law.” Board members are not managers. A director’s role is to see the big picture, addressing strategy, risk succession,
governance and other large issues – such as corporate ethics. In the midst of the moment, managers can make decisions, which, upon reflection, are ethically questionable or clearly unethical. The board should never be in a position to react without contemplation and should always have the time and resources to reach an ethical consensus. Directors may be held legally accountable if it can be proven that they made decisions without “due care,” which includes having the time and resources to adequately evaluate and make informed and reasoned decisions. Directors are also able to make ethical decisions because they are independent of management, in not only form and substance, but in thought. Directors must understand that circumstances may call for them to make difficult and unpopular decisions, which could require them to resign either quietly or publicly. Because of their independence from the business, directors are ideally suited to identify, understand and decide on ethical issues. In many organizations, the directors are older and have more experience than most of the managers, including the CEO. While age alone, or even past success, does not magically instill wisdom, most of us are taught to respect our elders. As the “adults in the room,” it is incumbent on directors to provide stability and grounding to management, which includes asking management to squarely identify and tackle ethical issues. ■ John F. Levy, CEO of Board Advisory, consults with boards and companies on governance, ethics, financial reporting and accounting and writes and teaches courses on board ethics, corporate governance, accounting and finance. Formerly a CFO of both public and private firms, Levy began his career at the national public accounting firms of Ernst & Young, Laventhol & Horwath, and Grant Thornton. He may be contacted at 908-518-0781 and/or John@BoardAdvisory.net.
Winter 2011
Chairman’s Platform
Politics & Policy
continued from page 6
continued from page 10
satisfaction presiding over was the annual Bankers Legislative Day in Trenton. With a record turnout of bankers and a “who’s who” of speakers and panel participants, I, for one, was paying close attention to our legislative representatives, who spoke about topics relevant to all bankers doing business in our state. We also had the good fortune to hear from Lt. Gov. Kim Guadagno and Banking Commissioner Tom Considine, who shared their vision for business and banking in New Jersey. NJBankers would like to thank Patrick Ryan, chairman of Hopewell Valley Community Bank, for his ability to develop the topics and questions that members wished to ask of their representatives in Trenton. As they say, if you want work well done, select a busy man. We are grateful to Pat for his commitment to this program. With change comes opportunity, and I hope that all of my colleagues and members of the association see opportunity to continue our dialogue with those serving in Washington. I ask that you join us March 14 through 16 for the ABA Government Relations Summit in Washington. Let’s show our federal representatives how their decisions and dictums affect traditional, Main Street banks who did not stray from their mission to serve their communities prudently. One thing that has not changed for New Jersey’s banks is our commitment to the communities we serve. Please join Valley National Bank and submit your entry to the NJBankers Community Service Award program. The program enables each member to spotlight how they go about helping and shaping the communities they serve. NJBankers compiles and brings this collection of cooperation and support of our neighborhoods and communities with us to Washington to demonstrate that the banking industry is truly a part of the solution, and did not contribute to the problems we all are striving to surmount. On behalf of members, associate members and everyone at NJBankers, I once again congratulate Jim on a job well done over the past 26 years, and wish he and his wife, Candy, a very happy and healthy retirement. ■
assume the Chairmanship of the Capital Markets Sub-Committee of the House Financial Services Committee. Sen. Robert Menendez will likely be seen as a savior for Senate Democrats, as he campaigned strongly in the Hispanic districts in the west. As chairman of the Democratic Senatorial Campaign Committee, Menendez played a role in saving Sens. Boxer and
Gerald H. Lipkin is chairman of the New Jersey Bankers Association and chairman, president and CEO of Valley National Bank in Wayne. He can be reached at 973-305-4001.
Bennet, as well as Majority Leader Reid, from defeat. Look for his star to continue to rise in the Caucus. For Gov. Christie, the defeat of the only state Republican incumbent on the ballot is not good; however, the gain of a congressman and control of rich Bergen County more than offsets this loss. n Michael P. Affuso, Esq., is senior vice president and director of government relations for NJBankers. He can be reached via e-mail at maffuso@njbankers.com.
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Winter 2011
New Jersey Banker
13
Feature
Third Annual Bankers Legislative Day in Trenton
4
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record number of bank CEOs and their senior level managers gathered in Trenton in September to get updates on key legislative issues impacting the New Jersey banking industry. After a welcome from NJBankers Chairman Gerald H. Lipkin, chairman, president and CEO of Valley National Bank, Thomas Considine, commissioner of the New Jersey Department of Banking and Insurance, opened the program with a presentation on the “State of Banking in New Jersey.” Next, NJBankers was honored to present Lt. Gov. Kim Guadagno, who took time from her busy schedule to address the bankers on initiatives that she and Gov. Chris Christie have created to change the climate for doing business in New Jersey. Patrick Ryan, chairman of Hopewell Valley Community Bank, moderated a “Legislative Leadership” panel, which included Senate Republican Leader Thomas H. Kean Jr.; Assembly Majority Leader Joseph Cryan; Assembly Republican Conference Leader Jon Bramnick; and Senate Republican Conference Leader Robert Singer, serving on the Senate Commerce Committee, who
14 New Jersey Banker
3
shared their vision for the future for our great Garden State. Ryan moderated a second panel on “Current Issues in Banking,” which included Assembly Financial Institutions and Insurance Committee Chairman Gary Schaer; Assemblyman Jack Conners; Assemblyman John McKeon, Assemblyman Robert Schroeder and Senate Republican Conference Leader Robert Singer. A third panel, “Public/Private Sector Efforts to Improve New Jersey’s Business Climate,” moderated by NJBankers CoPresident and Co-CEO John E. McWeeney Jr., included Philip Kirschner, president of New Jersey Business and Industry Association; Caren Franzini, CEO of the NJ Economic Development Authority; and Dennis Bone, chairman of NJ Chamber of Commerce, president of Verizon New Jersey, Inc., and chairman of Choose New Jersey. We thank the lieutenant governor, the commissioner of banking and insurance, all our panel participants and Patrick Ryan for their time attending and speaking to members at this event. We also thank our sponsors, McCarter & English, LLP and Riker Danzig Scherer Hyland & Perretti LLP. ■
6 1. Gerald H. Lipkin, chairman of NJBankers and chairman, president and CEO of Valley National Bank, greets the attendees. 2. Lt. Gov. Kim Guadagno discussed initiatives that she and Gov. Chris Christie are working on to make New Jersey’s business climate more friendly toward existing and new businesses. Demonstrating the openness of the administration, the lieutenant governor shared her cell phone number with the audience. 3. Senate Republican Leader Thomas Kean (left) addresses the attendees of the annual Bankers Legislative Day. 4. Assemblyman Gary Schaer, chairman of the Financial Institutions and Insurance Committee (second from left) and Assemblyman Jack Conners (right) respond to a question posed by moderator Patrick Ryan, chairman of Hopewell Valley Community Bank. 5. One panel included, from left to right: Dennis Bone, chairman, NJ Chamber of Commerce, president, Verizon NJ Inc., and chairman, Choose NJ; Caren Franzini, CEO, NJEDA; and Philip Kirschner, president, NJBIA. 6. Thomas Considine, commissioner of the New Jersey Department of Banking and Insurance, addressed the attendees of the Third Annual Bankers Legislative Day with a presentation on the “State of Banking in New Jersey.”
Winter 2011
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Winter 2011
New Jersey Banker
15
Insurance
Life Insurance: An Asset Class That Needs a Second Look By David Buckwald
A
fter the stock market crash of September 2008, Business Week published an article describing what happened in the months that followed as the “Panic of 2008.” As many Americans experienced the economy’s ongoing turbulence and uncertainty, a list of choice targets to hold responsible began to emerge: David Buckwald shortly after the country’s largest banking corporations came the investment brokers, financial advisors and retirement-fund managers. It was not long before anyone connected to the country’s financial services industry was likely to be held in some suspicion for the entire economic debacle. Two years later, it seems that a few new targets are about to be added to that national list: life insurance companies and the trust professionals who manage trust-owned lifeinsurance policies. A recent Indiana appeals court decision, In re Stuart Cochran Irrevocable Trust, concurred in a trial court finding that KeyBank’s ILIT trustees had not breached their fiduciary responsibilities to the beneficiaries of Cochran’s life-insurance trust; neither, the court decreed, had those trustees acted imprudently when they replaced the Cochran trust’s original life insurance policies. In a recent presentation to the American Banking Association, Steven Zeiger of Xray Your Life Insurance said, “The Cochran case is a must-read for any trust professional today.” The case’s background and legal arguments relate directly to the handling of insurance trusts as they exist today, and as they seem likely to evolve in today’s turbulent economy. The Cochran case was the first nationally known settled case in which an insurance trust beneficiary sued the trustee of the
16 New Jersey Banker
insurance trust for breach of fiduciary responsibility, and it would have required consideration of just a few more basic questions for the decision to have come down entirely differently. Briefly, after accepting responsibility for handling Cochran’s irrevocable trust in 1999, KeyBank’s ILIT trustee approved an exchange of the trust’s policies. That exchange increased the collective death benefit from $4,753,539 to $8 million. Following the market losses of 2001 and ’02, however, KeyBank hired an independent insurance consultant in 2003 to review the Cochran trust’s replacement policies. Based upon the existing policy values at the time, as well as the age of the insured (Stuart Cochran was just 51 years old in 2003), the consultant recommended continued close monitoring of the policies. Considering the economic conditions in 2003, however, it seemed possible, perhaps probable, that these policies could lapse before Cochran attained his normal life expectancy. Accordingly, his personal insurance advisor recommended purchasing a replacement policy guaranteed to age 100. It carried a guaranteed face value of $2,787,524. KeyBank’s consultant concurred and recommended replacing the existing policy. Accordingly, as trustee, KeyBank replaced the old policies with the recommended policy. The insured, however, never attained his “normal” life expectancy. Shortly after the new policy was purchased, he died at age 53. Quickly, his beneficiaries brought suit against KeyBank for breach of its fiduciary responsibilities, with the eventual result noted above. We believe that result could have been entirely different had just a few more questions been presented for the court’s consideration. For example, neither the plaintiffs nor their attorneys asked the court to consider the specific expenses associated with handling and monitoring the trust-owned life insurance (TOLI) polices as they compared one to another throughout the life of the trust.
Many policy holders assume the cost of a life insurance policy to be the premiums paid. In fact, however, the actual cost of the policy is the monthly charges that are deducted from the policy’s cash value. In addition to the relative cost of insurance (COI), there were the fixed administration expenses (FAEs) and the cash-value-based wrap fees (M&Es), which were never addressed during either court’s examination of the presented evidence. Apparently, KeyBank’s ILIT trustees never thought to measure such expenses, despite the fact that this component is critical to measuring the whole performance of any life insurance policy. Neither, apparently, did the beneficiariesturned-plaintiffs ever think to ask for evidence that the trustees might even have noted such comparisons. The actual comparison of the Cochran policy expenses is shown in an excellent table included in the August 2009, issue of Steve Leimberg’s Estate Planning Email Newsletter. Based upon the tabular breakdown of the expenses for each of three policies held throughout the life of the trust, the total cost per policy ranges from 12 cents for the least costly policy to more than double that – 25.9 cents – per $1 of death benefit. This was the first nationally-known legal case to consider a plaintiff ’s claim of breach of fiduciary duty by ILIT trustees, and can hardly be seen as constituting evolved case law. It is, however, to be considered by those most likely to feel its impact: trust beneficiaries; their ILIT trustees; and the beneficiaries of traditional and non-trustowned policies as well. There was a time in the world of financial services when life insurance policies were idly kept in the bottom drawer of many larger financial plans – ready to provide some value should circumstances so dictate, but hardly a significant part of a sophisticated financial plan. That time is over. The life insurance policy is a significant financial asset and needs to be monitored like any other financial asset.
Winter 2011
Plaintiffs of the near future – disappointed trust beneficiaries and their attorneys – may want to examine the Cochran decision as they prepare their respective cases before going to court. Certainly, it is essential that ILIT trustees examine the case just as carefully and see to the monitoring of their own policies, as well as to the educating of their clients, the trust beneficiaries. Detailed records of such educational efforts on their clients’ behalf should be maintained in client files to demonstrate that the trustee did, in fact, hold to his/her fiduciary responsibilities and consistently monitored all trust assets through a detailed and consistently prudent process. Steven Zeiger suggests that one of the most useful outcomes of the Cochran case was underlining the importance of “reliance on information provided by an independent entity with no policy to sell or any financial stake in the outcome.” Many banks today use an insurance agent to compare policies. This may not be a prudent approach, however, since such agents can certainly have a financial stake in the transaction. An article in The CPA Journal suggests
it is “crucial that trustees of ILITs have a documented review process and the help of appropriate experts to make sure the process is effective.” Steve Leimberg’s Estate Planning Email Newsletter of February 2009 describes the ongoing developments of today in this field as “the TOLI paradigm shift from inadequate policy management to a service-based fiduciary model.” With today’s ongoing vacillations in our stock markets and the current decline of short-term interest rates, both of which profoundly affect the performance of most life insurance policies, it is possible we may see the further underperformance of some policies in the near future. That being the case, it seems equally possible we will see more lawsuits in the similarly near future to add to the evolved-law possibilities of In re Stuart Cochran Irrevocable Trust. ■ David Buckwald is senior partner at Cranfordbased Atlas Advisory Group, LLC, an endorsed service provider of NJBankers. He can be reached via e-mail at dbuckwald@atlasadvisorygroup.com.
From the Co-Presidents’ Office continued from page 8 two sons were very upset with me when I moved them from Virginia to New Jersey, but they seem to have forgiven me, as both have chosen to settle in this great state. Over the course of the last three years, I have found a great friend and co-president in John McWeeney, who worked in close partnership with me to ensure that the combination of the League and NJBankers was seamless to our members and, as much as possible, to our staff. I am confident that the New Jersey Bankers Association will continue to improve the services it provides to New Jersey’s banking industry under John’s capable leadership, backed by our senior management team of Jim Meredith, Mike Affuso, Gordon Ur, Rich Siderko, Rick Neale, the other officers and all of the great members of the NJBankers staff. n James R. Silkensen, co-president and co-CEO of NJBankers, will retire on Dec. 31, 2010, after serving the New Jersey banking industry for 26 years.
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Winter 2011
New Jersey Banker
17
Insurance
BOLI is Back Post-Recession Earnings Shine – Relatively Speaking By Scott Van Voorhis
B
anks in New Jersey and across the country are pouring more money Colorthan profile: ever Genericinto CMYKtax-free printer profile bank-owned Composite Default screen life insurance (BOLI) in order to cover the
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“The best practices by successful banks are to develop a compensation strategy first before looking to how they might fund those strategies using BOLI or not,” contends 25 Dick Freitag, president and founder of IFM Group. 5 Given the tax free status, BOLI accounts can bring tax free returns of 3 percent, 0 compared to after tax gains of just over half that through other investment vehicles. “You don’t want to leave your money at the Fed to earn nothing,” said Jerry Reen, managing principal at Financial Solutions Partners, a life insurance investment advisory firm. 75
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Not surprisingly, after slowing in 2008 and 2009, bank interest in BOLI is on the rise again. “In 2008, everyone was worried it would be our last year,” Reen quips of that rocky time for the financial services industry. “We have done a bunch of transactions in 2009 and 2010.” 100 Nationally, bank-owned life insurance 95 assets soared past the $133 billion mark in the first half of 2010, a 3.3 percent increase 75 over the same period in 2009, according to the recently released Michael White-MeyerChatfield Bank-Owned Life Insurance 25 Holdings Report. “It’s a very viable strategy, especially for 5 community banks that are struggling with earnings,” said Bill Borchert of the BFS Group, 0 an endorsed service provider of NJ Bankers.
Winter 2011
Avoid those red flags As tempting as BOLI may seem, however, it makes sense to look first before you leap, says Freitag, who advises banks and other firms on structuring executive compensation plans. First, the recently passed Dodd-Frank financial reform bill in Washington is poised to usher in a new era of even tougher regulatory enforcement by the federal government when it comes to financial institutions. The bill takes aim at excessive executive compensation. An overemphasis on BOLI to help pay for executive compensation, in turn, could raise red flags among regulators, Freitag warns. And while banks are allowed by federal regulators to put 25 percent of Tier 1 capital in BOLI investment holdings, playing it too close to that line could prove problematic, he notes. For example, if the bank’s BOLI investments do well compared to other assets, suddenly that percentage swells beyond the 25 percent mark, potentially drawing needless scrutiny from federal regulators, Freitag says. Or, for that matter, the bank might be forced to charge off bad loans, reducing the overall amount of capital available.
Pay package first, BOLI next A better approach is for a bank to figure out an overall executive compensation strategy first, then figure out how BOLI fits into that. “BOLI has its place,” Freitag said, but, he added, “it is a means rather than an end in and of itself.” Banks who decide to go the BOLI investment route also need to carefully document their decision and come up with a clear plan for implementing this investment vehicle. While that may take some effort, it could pay dividends over the long run, in regulatory flexibility regarding capitalization. For most community banks, BOLI is about finding ways to provide first-rate benefits for employees at a time when health insurance costs are spiraling ever upward. The gains banks make through BOLI enable banks to continue to provide the kinds of benefit packages needed to attract the best executive talent, notes BFS’s Borchert. “We have had many situations where banks were able to manage their existing health coverage because they bought bankowned life insurance to off-set the cost,” Borchert said. “The cost of health insurance
is a big issue driving banks to look at BOLI again today.”
General account or private placement? Once a bank has settled on an executive compensation strategy, figured out how bank-owned life insurance fits into it, and has come up with a written plan, it still has to choose which type of BOLI investment vehicle to go with. Here again are a number of ins and outs, experts say. The most common route is to open a general account through a major insurer, who helps set up the program. However, larger financial institutions, generally with $1 billion or more in assets, may be able to go the private placement route, Reen notes. That allows the bank in question to work through a life insurance company, but at the same time keep its BOLI investments separate. In particular, that means the bank does not have to factor in the potential credit risk caused by the insurer’s own potential balance sheet problems. As a result, the bank has to reserve much less of its own capital to back up its BOLI investments if it takes the private placement route, as opposed to opening a general account. While the credit of the nation’s major insurers is much less of a concern in today’s relatively stable market, it loomed as a big issue in 2008, when many players in the financial services industry were battling to stay afloat, Reen notes. “Having a general account placement puts you at credit risk to the insurance company,” he said. “It is like buying one big corporate bond from the insurance company.”
The new normal That statement reflects the changes that have raked across the economy since 2008. What used to be considered as a safe investment must now be questioned. And what used to be a top priority for BOLI – tax savings – has now taken second place to earnings relative to other safe investment vehicles in the market. The resurgence of BOLI plans reflects not so much a return to normal as it does the emergence into the new normal. Establish the right priorities and ask the right questions about your BOLI strategy, and it can be a fundamental of your investment strategy that is indeed sound. ■
Upcoming Events January 7
Economic Forum Renaissance Woodbridge Hotel, Iselin March 13 – March 14
2010 ABA Mutual Community Bank Conference Renaissance Washington, Washington, DC March 14 – March 16
2010 ABA Government Relations Summit Renaissance Washington, Washington, DC March 25
Directors & Managing Officers Conference Renaissance Woodbridge Hotel, Iselin April 14
Annamae Baerenbach Annual Mortgage Lending Conference Renaissance Woodbridge Hotel, Iselin April 22
Half Day Accounting & Tax Seminar with FMS NY/NJ Chapter Stony Hill Inn, Hackensack May 11 – May 15
107th Annual Conference The Fairmont Turnberry Resort, Aventura, Florida June 9
Annual Marketing Conference Forsgate Country Club, Monroe Township June 13
Third Annual Charity Golf Outing to Benefit Financial Literacy Mercer Oaks Golf Course, West Windsor June 20
Fourth Annual Bankers Legislative Day in Trenton Location TBD August 8
Annual Summer Golf & Tennis Outing Forsgate Country Club, Monroe Township September 12 – September 18
Senior Management Conference Borgata Casino and Resort, Atlantic City October 20 – October 21
Annual Human Resources Conference Caesar’s Resort, Atlantic City
Scott Van Voorhis is a freelance writer.
Winter 2011
New Jersey Banker
19
ww
Celebrating 26 Years of Service to the New Jersey Banking Industry
Dinner Committee Co-Chairs Katherine Liseno, president and CEO of Metuchen Savings Bank, and David Lindstrom, former chairman of the New Jersey Savings League, shared their memories and introduced the program.
James Meredith, NJBankers EVP and COO, shared a laugh with Jim and the dinner attendees while presenting a gift from the staff.
John McWeeney, Jr., co-president and co-CEO of NJBankers, presents flowers to Candy Silkensen as son Brian looks on. Opposite page, top: Dinner guests watched a video created to commemorate Jim’s years of service with the Association. Opposite page, bottom left: Richard Siderko, president of BCG, conveyed his best wishes to Jim and presented a gift of a travel certificate from the BCG staff.
O
n Oct. 28, 334 of NJBankers Co-president and Co-CEO James R. Silkensen’s colleagues, friends and family gathered at the Renaissance Woodbridge Hotel to celebrate his nearly 40 years of service to the banking industry – with 26 of those years of service to the Association – and wish him well upon his retirement in December 2010. The evening began with good wishes from Gerald H. Lipkin, NJBankers chairman and chairman, president and CEO of Valley National Bank. Lipkin turned the program over to dinner committee co-chairs Katherine J. Liseno, president and CEO of Metuchen Savings Bank and chairman of the New Jersey Savings League from 2001 to 2002, and David W. Lindstrom, chairman of the New Jersey Savings League from 1990 to 1991. Liseno and Lindstrom provided opening remarks, which drew both tears and laughter from dinner attendees. Statistics comparing the industry in 1984 to the industry today got the audience chattering and remarks about “dinosaurs” resonated throughout the evening! After the invocation by the Reverend Dr. Edwin Hann, III, of the Cranford United Methodist Church where Jim and his wife Candy worship, Thomas Considine, commissioner of the New Jersey Department of Banking and Insurance, spoke of Jim’s accomplishments and presented a proclamation from Gov. Chris Christie congratulating Jim and praising his accomplishments. The commissioner also presented a proclamation from the State Assembly. E. Robert Levy, executive director and counsel of the Mortgage Bankers Association of NJ, came to the podium to present a plaque commemorating Jim’s many accomplishments through the years. Rep. Leonard Lance spoke next, and presented a citation which also praised Jim for his accomplishments over his 26-year career. Lance then gave his best wishes to Jim and Candy for a happy and healthy retirement. While dessert was served, Edmond V. Lawlor, Jr., retired president of the New Jersey Savings League, came to the podium to congratulate Jim and wish him much happiness in his retirement. Lawlor recounted how he had recruited Jim from the Federal Home Loan Bank Board in
Opposite page, bottom right: James R. Silkensen shares some memories with dinner attendees.
Winter 2011
continued on page 22
New Jersey Banker
21
Celebrating continued from page 21
NJBankers Chairman Gerald Lipkin, chairman, president, and CEO, Valley National Bank, kicked off the evening with a few words about working with Jim.
Thomas Considine, commissioner of the Department of Banking and Insurance, shared a light moment with the dinner guests.
Edmond Lawlor, Jr., retired president of NJ Savings League, hired Jim back in 1984 and recalled the many times he and Jim attended evening meetings and headed to Trenton to support the banking industry.
Samuel Damiano, retired president of the NJ League of Community Bankers, reminisced about working side by side with Jim serving the needs of association members.
Diane Casey-Landry, COO and senior executive vice president of the American Bankers Association, shared her memories of working with Jim from when they met years ago when she was president of America’s Community Bankers.
22 New Jersey Banker
1984 and how he and Jim worked side by side during difficult times in the 1980s to advocate ardently for the savings industry. Samuel J. Damiano, retired president of the New Jersey League of Community Bankers, shared his thoughts about Jim and the Association under his tenure. Damiano noted the difficulties and rewards of leading an association and pointed out that Jim made it look effortless. Alfred A. DelliBovi, president of the Federal Home Loan Bank of New York, spoke of his relationship with Jim and noted him as a consummate professional. DelliBovi asked Brian Dittenhafer, former president of the FHLBNY, to join him on stage to help present a resolution from the FHLBNY. Diane Casey-Landry, COO and senior executive vice president of the American Bankers Association, flew in from Washington to attend the dinner and provide her good wishes to Jim. Casey-Landry shared her experiences of working with Jim from when they had met years before when she was president of America’s Community Bankers. The last presentations came from Bankers Cooperative Group, TICIC and NJBankers. The entire staff of the three sister firms joined on stage to hear Richard P. Siderko, president of BCG; Gordon M. Ur, president of TICIC and James M. Meredith, executive vice president and COO of NJBankers, congratulate Jim on his retirement. The room filled with laughter as the three presenters provided gifts of travel certificates to Jim and Candy. Jim later remarked jokingly that he felt it interesting that all three seemed anxious to get him out of the country! Next, Jim’s co-president and co-CEO John E. McWeeney, Jr. thanked Jim for his leadership and support during the recent combination of the legacy NJBankers and the NJLeague. McWeeney went on to say that he’ll look back on his time working with Jim as one of the high points of his career. He then presented an American flag to Jim that had been flown over our nation’s Capitol on Oct. 5, 2010, in recognition of his service to our country and the banking industry. McWeeney introduced Jim’s immediate family: wife Candy, son Steve and his wife Selena, with his grandchildren Bleue and Phoenix; and son Brian and his wife Brianne. Flowers were presented to Candy, and Bleue and Phoenix received “pillow-pets” as gifts. McWeeney also announced that Jim would not need to look for a ride after he retires as the NJBankers board of directors generously gave Jim his company car as a retirement gift. McWeeney then introduced a video that was created to commemorate Jim’s years of service with the Association. Twenty-six former Association chairmen, colleagues and friends, a true “who’s who” of the New Jersey banking scene, were taped sharing their stories and wishes for a happy retirement. The video ended with the classic Mamas and Papas song “Dream a Little Dream of Me,” and the dinner guests stood and applauded as Jim took the stage. As Jim thanked everyone who worked with him through the years and who attended the dinner, his humility and modesty were evident. He described the challenges and successes he experienced during his nearly 40-year career – first, with the Federal Home Loan Bank Board and then his 26-year career with the Association. He expressed his gratitude to all who helped make it a satisfying career. He thanked his wife for the times when he needed to be at work in Cranford, Trenton
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9813 TKB NJB Half Page 1.2-2P_TKB NJB Half Page 1.2-2P 3/2/10 7:45 PM Page 1 Gordon Ur, president of TICIC, exchanges a light moment with Jim and the dinner guests as the staff of NJBankers, BCG and TICIC look on.
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The Federal Home Loan Bank of NY honored Jim with a plaque celebrating his many accomplishments over the years. Left to right: Brian Dittenhafer, former president, FHLBNY; Jim; Alfred DelliBovi, president, FHLBNY.
or Washington, to ensure that the voice of the Association would be heard. Jim shared some highlights of his 26 years at the Association, reintroduced his immediate family and introduced his two brothers, Hugh and Ralph, who flew in from Arkansas and Colorado to be a part of the evening’s festivities. Liseno and Lindstrom provided closing remarks, then introduced Gary T. Jolliffe, president and CEO of Millington Savings Bank, who offered the benediction. Camaraderie, laughs, tears of sadness and joy were evident throughout the evening. The bottom line? Congratulations were certainly in order for a man who dedicated his career to the New Jersey banking industry! Thank you to all who were able to share in the evening and to those who sent their best wishes in the journal. Jim is donating the proceeds raised by the journal to the New Jersey Bankers Education Foundation, which provides scholarships to dependents of service members who lost their lives or became permanently disabled in the Afghanistan and Iraq wars. ■
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Winter 2011
New Jersey Banker
23
Marketing – Social Media
Overcoming the Fear of the Two-Way Conversation By Christina P. O’Neill
T
here’s an anecdote that social media experts often use to begin their presentations: A Google search on your bank name brings up, on the first Google page, a website with your bank name and logo (Hey, we didn’t authorize that!) coupled with a not very nice verb. Your institution can ignore the site, but it’s pretty clear from the placement on Google that thousands, maybe millions, of readers haven’t.
“There are no secrets. The networked market knows more than companies do about their own products. And whether the news is good or bad, they tell everyone.” – Cluetrain, Thesis 12
Frank Sorrentino, III
Steven Lubetkin
24 New Jersey Banker
The Cluetrain manifesto (www.cluetrain. com), with its 95 “theses,” was created in 1999, proclaiming the emergence of a customer community independent of mass marketing efforts. It sounded extreme at the time, but now hundreds of thousands of customer communities have not only emerged, but matured. Financial institutions, circumscribed by privacy and disclosure rules, are understandably wary about how they’re going to hold up their end of the social media twoway conversation. But they know they must be in the game. At the Nov. 9 BankHorizons event in Atlantic City, the social media seminars were full to overflowing. The bank in the Google page scenario can pretend it’s above such discourse, or it can join the conversation and find out what’s needed to fix the problem. Since an estimated 85 percent of all bank defections are the result of customers being “angry with the bank,” isn’t that worth a try? Issuing a press release to media that’s not on the angry customers’ radar screen is not going to cut it. You’ve got to go straight to those customers and talk to them on their level, through their preferred medium. And then you’ve got to empower
your staff to carry out the changes needed to fix the problem.
The power of tweet That’s what Frank Eliason did at Comcast, and what he’s striving to do now at CitiBank. By now, his story is well known. He’s the brains behind Comcastcares.com, which brought about significant change in Comcast’s customer service through the use of Twitter to respond to customer-service problems in real time. Using an outside service to facilitate internal communication efforts was a groundbreaking concept when Eliason first introduced it (without legal permission, as he told social-media expert and author Brian Solis in an interview earlier this year). Creating a customer communications channel on Twitter was only part of the solution. The other part was setting the stage for managers to empower their technicians to make the needed changes. Eliason left Comcast in midJuly – “They didn’t need me anymore,” he told Solis; he’d left behind a team of people who could keep the initiative growing, he said. Eliason is now senior vice president of social media at Citibank, overseeing the bank’s internet and mobile marketing team. “So many companies are now using these tools that the best way to get service is not to call the 800 number – it’s to go on Twitter and wait for them to contact you,” says Steven Lubetkin, managing partner of Professional Podcasts LLC.
Monitoring the talk Banks can’t resolve customerservice issues as publicly as cable service providers. The rule of thumb for fielding customer calls on Twitter – which most banks advise their customers to do by now – is to request that the customer call a private number, rather than disclose account information in a public tweet. But let’s say the customer is complaining to the media, rather than to the bank. The reporter calls bank management and lays out the story as the customer presented it.
Winter 2011
Management knows the story is factually wrong – maybe the situation arose from customer error or misfeasance, not a bank error. But privacy regulations prohibit it even from confirming that the source is a customer. Lubetkin advises that the proper guidance is not “no comment” but rather, this: “You can report that, but you would not be accurate when you do.” If a company doesn’t respond when the media calls during a crisis or in response to a customer-service dispute, “they’ll fill the void either with misinformation or input from other parties that don’t know what you know. If you have nothing about your brand to compare what you are with what people are saying about you, third parties are going to be speaking for you and misrepresenting your brand to the public,” he says. North Jersey Community Bank, a midsized community bank with $600 million in assets and seven branches, is just in the beginning stages of monitoring social media. So far, its experience has been limited but good, says Chairman and CEO Frank Sorrentino, III. “I’m sure as we grow, we’re going to get people who like to rant, so I’m sure we’re going to be subject to it as time goes on. But some of what you need to be doing is showing people how you respond. Everybody expects there to be mistakes and issues. In a way, sometimes it’s good to have a mistake or a problem, because it allows you to define how you will respond. People want resolution.”
Breaking down walls The Facebook litmus test of whether a financial institution is willing to have a genuine two-way conversation is whether it allows negative postings to remain on its wall – or whether it allows wall postings at all. “I go to so many corporate Facebook pages where you can’t post to their wall,” says Lubetkin. “You’ll never find out their concerns if you don’t let them post stuff.” The ultimate message a financial institution should seek to deliver is this, he says: We are so confident that we will ultimately satisfy you that we want you to tell us when we fail. Companies that want to improve service invite customers to tell them what it is like. Then, there are employees. If your bank blocks employee access to certain websites, someone in your organization probably thinks there is good reason to do so. “There has to be a level of trust with employees,”
Lubetkin says, and it should have been established in the hiring process. That’s a management issue, not an Internet issue. Social media speaks in a human voice, but that voice ranges from the well-informed to the proverbial barbaric yawp. The impact of many bloggers, says Lubetkin, “is out of proportion to their importance in the real world.” Additionally, much of the discourse in the blogosphere is aimed at generating attention, that generates more clicks and links, in order to go to the top of a search-engine page. It’s not all that different from reality TV.
Something of value So, how does a financial institution determine what’s valuable? “There are tons of online tools to mine the data and make some sense out of it – depending on what you want to mine,” says Ken Greenberg, president and CEO of NJBankers Associate Member Austin & Williams, an advertising/branding agency that addresses social media. “A bank should positively be monitoring the social network conversations about them,” he says. Tools such as Radian6 and GeeYee listen for the conversation topics and alert users, much like Google Alerts, he says. “Think about the articles that appear online with comments below,” he says. “The bank wouldn’t know without these monitoring tools. They’re kind of like the old clipping services – but on steroids.” Responding to this communication takes work, Greenberg says. “Initially, people thought this would be easy – and free. ‘Just’ set up an account on Facebook, post a couple of things, and people will ‘like’ you. It turns out to be a lot more work than that. People
are looking for valuable, helpful content in the social arena. That means constantly posting useful, helpful information. North Jersey Community Bank uses social media to give potential customers a way to get to know the bank before they ever walk in the door. Sorrentino notes that prospective bank customers have walked into a meeting, reached into their briefcases and pulled out a copy of his blog, particularly a post titled “Winning the Ties.” “They say, ‘I enjoyed this, I thought you were spot-on,’” he says. Social media also makes it easier for the bank to differentiate itself not only from the larger banks, but from its community-bank peers. “If you are more tech savvy and live in the blogosphere, not only will we allow you to make a decision prior to walking in our door – you’ll know what we are about, you’ll know our business plan and our product mix. We’re pushing that stuff out to you, so that in a minute or less, you’ll have a sense of who we are.”
Follow the market in order to lead it The two-way marketing conversation is here to stay. The one-way interruptive marketing message has been replaced with the interactive message, bringing with it the hazards of the viral message and the Internet echo-chamber of interest-grabbing posts, forms of overleveraged communication that many in banking find intimidating. Social media is not about being hipper than your competition – it’s about going where the customers are. ■ Christina P. O’Neill is custom publications editor of The Warren Group, publisher of New Jersey Banker.
Winter 2011
New Jersey Banker
25
Marketing
All Onboard! First impressions count, but then your offering has to be useful By Christina P. O’Neill
T
he basics of a good onboarding program are more important now than in good times. Today’s new bank customer arrives with different priorities than before the recession that experts say is technically over. “Consumers are deleveraging, so even as the economy Service for the Early Adopters New Jersey banks have done well even in a difficult economy, growing assets at more than twice the pace of the national average during the first two quarters of 2010. And while 63 percent of Deluxe’s business is from its core legacy products of checks and forms, Susan Eick, vice president, financial services marketing at Deluxe, says the company is moving rapidly into other services, particularly in the small-business arena, and New Jersey banks have been quick to adopt them. Deluxe has packaged an option for banks to get a cost-free online community to help attract and retain small-business customers. Deluxe’s bank customers pay a fee for its onboarding services based on asset size, number of employees and the complexity of the onboarding campaign the bank wants to undertake. It also focuses on what a bank’s most profitable customer is, rather than the demographic the bank says it wants to acquire – a function of how hard it is to win people over unless you’re absolutely sure you’re playing their song. “Consumers and small-business customers have changed the game,” Eick says. “They’re able to shop around. … It’s no longer a game of the small-business customer coming to the bank hat in hand. They’re shopping around to see who will be the best partner for them.”
26 New Jersey Banker
is improving, it does have an impact on the demand for loans,” says Sam Kilmer, vice president of market development at NJBankers Associate Member Harland Financial Solutions. And for small business, the priority is now cash management, rather than business lending. Consumers are more focused on consolidating debt than taking on new obligations. They’re also spending more time studying and managing their accounts via their PCs or mobile phones, at a time when regulatory change has brought about a difference in the way banks can charge fees, he says.
The onboarding strategy Onboarding is most commonly used for checking accounts, credit cards and HELOCs, with the direct deposit account being the primary target. A typical onboarding program focuses on: • Initial contact – by mail, phone or both – to be sure the customer has what they need, and had a good experience opening the account. This should happen within 48 hours of opening. • One week to 10 days later – follow up by phone and/or mail to be sure checks came as ordered (right style/name spelled properly) and mention some other products that could be helpful. • Three weeks to one month after opening – invitation to the branch or discussion of other needs bank can fill. “Checking is positively the core account because you live out of it,” says Ken Greenberg, president and CEO of NJBankers Associate Member Austin & Williams, an advertising agency based in Hauppauge, New York. “You get much more familiar with the
bank with this type of account than, say, a high-yield CD you opened just for the rate.” If the bank has paid some insufficient items – whether checks or debit transactions – for the checking customer, that customer is more likely to want to do more business with that bank, he says.
Accent on small business Bank of America announced in October 2010 that it will hire 1,000 small-business experts to focus on companies with $3 million or less in annual sales, by early 2012. It might seem counterintuitive, after a first half of the year in which BoA charged off $14 million in loans to companies of $50 million or less in sales, as uncollectible, and with the default rate of small business more than 20 times that of larger customers. But BoA apparently sees this crisis as an opportunity for education. North Jersey Community Bank, a $600 million bank with 7 branches and 75 employees, combines traditional and socialmedia outreach in its onboarding efforts. After new customers receive a personal letter from Frank Sorrentino, III, chairman and CEO, welcoming them to the bank, they receive several emails over 30 to 60 days, linking them to new press releases marking financial progress and other milestones. The effect: new customers can ‘windowshop’ the bank. North Jersey Community Bank’s focus on small business has always been its mainstay, Sorrentino says, and those customers are looking for a bank relationship in which their business will receive genuine attention that will help them grow. NJBankers Endorsed Service Provider, continued on page 47
Winter 2011
The key to Real Growth
The Harland Financial Solutions Deposit Benchmarking study, concluded at the end of 2009, surveyed 12.4 million households at 220 financial institutions. Annualized figures contrast growth from new relationships (acquired) net inflow/outflow of existing relationships (organic growth) and loss of existing relationship (attrition). New customer acquisition counted for 7.9 percent of deposit growth; attrition counted against that at 5.5 percent; and 5.2 percent came from organic growth. The overall deposit growth was 7.6 percent, shored up in no small part by organic growth. Best practices recommended by Harland include: • Launching deposit and loan maturity programs that look to renew or rebuild relationships as they are most at risk. • Employing new customer onboarding programs to ensure new customers – who are most at risk – experience the value of the bank (new customers tend to have fewer services). • Implementing recapture processes to win back wallet share and sticky services lost to the competition. • Studying lost customer households to better
understand attrition triggers and set up ongoing processes to target relationships at risk. • Rolling out cross-sell programs of valuable targeted products and sticky services (ie: direct deposit, debit, self-service) to the right customers, at the right time, using the right channel. • Measuring the results of efforts for ongoing improvement and management transparency. • Track and improve leading indicators of loyalty such as attrition/retention, organic growth, services per household, wallet share (using an understanding of how much of the customer’s total household financial relationship is at the bank, and customer willingness to refer business to the bank (more indicative than customer “satisfaction”). Compare to industry benchmarks then available. • Segment the customer base by profitability and track the loyalty of the customers driving profitability. • Analyze the customer base, focusing attention on the most loyal and profitable customers and which services and channels drive their loyalty. Source: Harland Clarke
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Winter 2011
New Jersey Banker
27
Feature
Surviving Regulatory Reform: Annual Senior Management Conference
“S
urviving Regulatory Reform” was the theme of the 88th Annual Senior Management Conference held at the Seaview Resort & Spa in Galloway in September. The conference theme echoed the concerns of managing officers and senior executives responsible for ensuring the success of their institutions in a new regulatory environment. Though there are worldwide issues that affect economic recovery, the conference distilled and extracted global information to make it usable and practical for financial institutions in New Jersey. The conference also provided many networking opportunities for informal discussions and exchange of ideas. This year’s Warren Hill Award was presented to James W. Hughes, Ph.D., dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. ■
Michael Affuso, NJBankers senior vice president and director of government relations, joins Co-Presidents and Co-CEOs James Silkensen (left) and John McWeeney, Jr. (right) on the stage to discuss the importance of the association’s advocacy efforts in both Trenton and Washington.
The Warren Hill Award was presented to James W. Hughes, Ph.D., dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University and a speaker at several previous NJBankers conferences. The award is bestowed upon those outside the industry who have demonstrated commitment and made contributions consistent with the values and principles of NJBankers and its members. Hughes’ presentation, “Dimmer Economic Recovery or Lights Out?” kept attendees on the edge of their seats. Left to right: John McWeeney, Jr., NJBankers co-president and co-CEO; Hughes; and James Silkensen, NJBankers co-president and co-CEO.
28 New Jersey Banker
Gerald Lipkin, chairman of NJBankers and chairman, president and CEO of Valley National Bank, introduces the panel on “Managing the Effectiveness and Efficiency of an AML Compliance Department.” With him are, from left, Judith Germano, assistant U.S. attorney and chief of the Economic Crimes Unit of the U.S. Attorney’s Office, district of NJ; Steve Helmstetter, special agent with the Internal Revenue Service’s criminal investigation department; and panel moderator Sheila Leary, first senior vice president and director of AML/BSA, Valley National Bank, who discussed the importance of having the proper controls in place.
Richard Siderko, president and CEO of Bankers Cooperative Group (far left), moderated a timely panel on the implications of health care reform. He was joined by (from left to right) James DiOrio, senior vice president, Frenkel Benefits; Larry Altman, vice president of the Office of Healthcare Reform, Horizon Blue Cross Blue Shield of NJ; and Michael McGuire, New Jersey CEO, United Healthcare/Oxford.
A regulatory reform panel, moderated by Jon Evans, president and CEO of Atlantic Central Bankers Bank (far left), engaged Washington insiders and industry experts who provided their view on things to come in regulatory reform. The panel included (from left to right): Steve Verdier, executive vice president of congressional relations, Independent Community Bankers of America; Robert Jaworski, Esq., partner, Reed Smith; Priya Dayananda, director, Federal Government Affairs, KPMG; and James Ballentine, senior vice president of grassroots and political operations, American Bankers Association.
Winter 2011
Quick Response Codes: Tomorrow is Today By Marty Rubin
A
n exciting and innovative marketing tool is about to be unveiled to the American public. It will challenge the imagination and cunning of every entrepreneur and marketing person, no matter what their business, and the business of banking is right up there on top. This tool is called the Quick Response Code (QRC). It is a two dimensional barcode that allows a person using a smart phone (a BlackBerry, an iPhone or an Android) to access information by simply scanning the code (see above). By scanning the square-shaped matrix, imbedded information becomes visible on the phone’s screen. There are many applications for this within a phone’s application store or market. A Japanese company called DensoWave developed the technology in 1994 and it has been commonplace ever since. It is estimated that over 40 percent of the Japanese population scan QRCs every day. They have also been used in Europe for quite some time. QRCs can be printed on practically any surface; paper, cloth, plastic, wood or even stone. These codes will eventually become more visible and will be seen as part of an advertisement in newspapers and magazines, on direct mail pieces, on signs and posters, packages and containers, T-shirts or baseball caps, labels, napkins, placemats or coffee cups, and even as temporary tattoos – wherever people can be reached and are capable of using their personal mobile devices. They will receive marketing messages, data or information in an easy, quick and intriguing way. QRCs contain information in both the horizontal and vertical axis. Compared to regular barcodes, this allows for much larger amounts of raw data to be embedded. Data can be numeric, alphanumeric or binary. The more data that needs to be embedded, the larger the QRC becomes.
The minimum dimensions of a QRC depend upon the resolution power of the cameras that are used to scan the code. It is recommended that the minimum size should be 32 by 32 millimeters, or 1.25 by 1.25 inches, for a QRC that contains a website address (URL). This guarantees that all camera phones on the market can properly read the code. Changing the size to a width and height of 26 by 26 millimeters, or roughly one square inch, still covers 90 percent of the phones on the market. The opportunities are endless and the applications boggle the mind. Think of how banks, or the real estate, healthcare or hospitality industries, can use this concept. In any marketing campaign, it is essential to make the consumer take action. Scanning a QRC is easy, and requires a consumer’s participation. A barcode on an advertisement can take the reader to the company’s website. A QRC on a store’s window sign can give a potential customer other store locations with maps. The code on a receipt or a paper wrapper can offer special pricing or discounts. Marketers can take so much advantage of a consumer’s relationship with their smart phones that the applications seem endless. Education and explanation will be necessary in many instances and in various markets, but ownership and usage of smart phones is growing, and a significant portion of the population is already comfortable with the technology and are pushing the boundaries of its capabilities. These willing and curious consumers are the perfect recipients, the perfect targets for this new communication technique, because they get it – they embrace the concept and anticipate more and more adaptations. If bank marketers recognize the value of this phenomenon, they have an eager, aware population segment on which to focus. You do not have to be a marketing specialist to grasp the importance of QRCs. Anyone in business or the professions can recognize the benefits and rewards of this 21st-century
technology, but none more than those responsible for marketing in the banking industry. The potential is enormous – instant communication anywhere and everywhere, and the ability to talk to the public as never before. Bank marketing directors can unleash their creative and imaginative talents in every direction to discover new, nontraditional, out-of-the-box ways to communicate their marketing messages, while capturing the goodwill and respect of forward-thinking potential customers. They now have a tool that is unlike any other. Banks can print a QRC on any brochure, statement-stuffer, magazine or newspaper ad, direct mail piece, lobby sign or presentation folder. Putting QRCs on window posters increases exposure to the public on the street after hours. The QR code easily increases the amount of information you pass to the public beyond the already visible words. Using the codes on your materials immediately multiplies the message, because there is so much to be said, just waiting to be extracted by customers and potential customers. Banks will create hundreds of applications for QRCs, from friendly greetings, to entry to their websites, to contact information for appropriate executives, to eligibility for gifts or prizes, to branch locations, to the latest rates to description of products and services, to reminders of upcoming events, to charitable organization involvement. There is no end. So let the brainstorming begin. Bank marketing directors and staff should start by learning about QRCs from specialists, and then enter an arena that will test their ability to market institutions, products and services in a most exciting environment using the latest technology. ■ Marty Rubin is president of SpectraMedia, a vendor to the banking industry since 1929 that can assist in developing Quick Response Codes for any marketing program. He can be contacted at 908-928-1220 or at mrubin@spectramedia.us.
Winter 2011
New Jersey Banker
29
New
Leaders IN BANKING
Scenes from the New Leaders reception and dinner on Nov. 8, 2010
The Next Wave of Leadership
The 16 people honored as New Jersey’s New Leaders in Banking for 2010 were selected from a wide field of nominees gathered by the New Jersey Bankers Association. They stand out through their professional and personal accomplishments, many of which mesh, and represent the next wave that will keep New Jersey’s banking industry vital. Being a banker is all about commitment, and the honorees here – who come from all levels of banking – demonstrate that commitment to community and customers in their words and deeds. They were chosen by a small panel of judges, none of whom was an active banker or staff member of either the New
Jersey Bankers Association or New Jersey Banker magazine in order to ensure impartiality. They should be proud of their accomplishments so far and we will all be eager to see their achievements to come. You can read their stories on the following pages. The honorees were feted at the New Leaders Gala Awards on Monday, Nov. 8, at the Tropicana Resort in Atlantic City, on the eve of BankHorizons. The winners, along with their president, chairman or other executive, attended a preceremony reception, a dinner, and a post-ceremony cocktail party.
New Leaders: In Their Own Words Daniel Beatty
Kenneth G. Emerson
Town of Residence: Fredon
Town of Residence: Mendham
Left to right: Daniel Beatty and his father, Norman E. Beatty, chairman, president and CEO, First Hope Bank.
Left to right: Kenneth Emerson and Robert Stillwell, president and CEO.
Age: 34 Title: Vice President/Chief Operations Officer Bank: First Hope Bank Bank Location: Hope
Career Highlights: Served as an Army officer for six years, with tours of duty in Kuwait and Iraq, then worked two years as the production controller for Target’s MidAtlantic Distribution Center. In 2007, my wife and I returned to New Jersey and I joined my father and brother working at First Hope Bank. In 2008, I was promoted to COO and oversaw the conversion of our core data processing system. Community Involvement: First Hope Bank has long supported Pass-It-Along, a local community-based non-profit; I have volunteered at this and supported other non-profit events.
Biggest Success: Leading the core conversion process – from vendor assessment and selection, through planning and execution. Dream Job: Continuing to grow as a member of the leadership team at First Hope Bank and to leverage technology and operations to better serve First Hope Bank’s associates, customers and communities. If you didn’t have your current job, what would you do? Stay-at-home-dad. I think I would stand to learn a lot about multi-tasking, prioritizing, having patience and being a better communicator.
Title: First SVP, Director of Strategic Planning, CIO/CTO Bank: Boiling Springs Savings Bank Bank Location: Rutherford
Career Highlights: Working for five NJbased banks ranging in size from $380 million to $26 billion, plus an additional five years as a consultant to the banking industry, providing strategic planning, mutual to stock conversion appraisals, capital markets, market feasibility, ALM and CRA advisory services. Most recently I managed BSSB’s complete conversion of all banking systems to FIS’s IBS suite of products. Community Involvement: Member of the Pastime Club, a non-profit organization that raises funds for local youth athletics.
Winter 2011
Biggest Success: Just completed my largest conversion: BSSB’s migration from OSI’s DNA to FIS’s IBS, including all new core, teller, deposit origination, online banking, bill pay, telephone banking, item processing, document imaging, e-sign, loan servicing, marketing and sales systems. Dream Job: Bank president. If you didn’t have your current job, what would you do? Retire. It would allow me to focus on my favorite activities with my family like platform tennis, golf, photography, woodworking, traveling and cooking.
New Jersey Banker
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Michelle Catrambone
Aimee L. Cervini, CAMS
Age: 38 Title: AVP and Branch Manager Bank: The Bank, Fulton Financial Corp.
Career Highlights: I joined the bank in February of 2005 and opened its second branch in Galloway Township in June of that year. I am a member and serve as an ambassador for the Greater Atlantic City Chamber of Commerce; a board member of The Galloway Township Business Association; and Treasurer for The Absecon/Galloway Rotary club. Community Involvement: The American Heart Association walks and fundraisers; a dictionary program with third-grade students in the Absecon and Galloway schools; an all-day clean up project in Atlantic City; and several fundraisers to support local students and award scholarships through the Rotary club. I also coach for my son’s soccer team.
Town of Residence: Egg Harbor Township
Age: 37 Title: VP-AML/BSA Officer Bank: Sun National Bank Bank Location: Vineland
Left to right: Michelle Catarambone and Angela Snyder, president and CEO, The Bank.
Left to right: Aimee Cervini and Thomas Townsend, senior vice president of operations.
Town of Residence: Buena Vista Township
Biggest Success: Being a full-time mom to my two little boys while maintaining a focus and drive in my banking career.
Career Highlights: Worked for Sun Bancorp for 11 years advancing to current position; achieving the dual goals of obtaining the CAMS (Certified Anti-Money Laundering Specialist) designation and being named Sun’s Bank Secrecy Act officer.
Dream Job: I would love to train dolphins at Sea World.
Community Involvement: South Jersey Regional Medical Center Auxiliary; Milanesi Parent Teacher Association; Sun Bank’s United Way Planning Committee and National MS City to Shore Bike ride fundraiser.
If you didn’t have your current job, what would you do? Full-time coach and motivator for others looking to advance in their careers.
Biggest Success: The Bank Secrecy Act department has grown with the bank. Many manual processes have been automated and implemented with the
support of my staff, our technology department, our core processor and FinCEN. Dream Job: Working for an agency such as FinCEN or the FBI where I could utilize skills and knowledge I have obtained as a BSA officer. If you didn’t have your current job, what would you do? As a mom of three small children, the most recent born last April, returning to work has proven to be challenging. Being a goal- and career-oriented individual, I have managed to balance the challenges of both roles!
Recognizing an Honor Well Deserved. The Bank congratulates Michelle Catrambone on being named one of the 2010 “New Leaders in Banking” by the New Jersey Bankers Association. As the Assistant Vice President and Branch Manager of the Galloway Branch, Michelle’s dedication to her customers and her professionalism reflects this honor. Michelle is always such a positive role model and takes great pride in serving her local community and caring for her customers. Fulton Financial Corporation, the parent company of The Bank, was recently named one of “100 most trustworthy” companies in the nation by Forbes.
1.866.248.BANK
I
thebankonline.com
Member FDIC. Member of the Fulton Financial Family.
32 New Jersey Banker
Winter 2011
Congratulations to all of the 2010 new leaders in banking. Boiling Springs is especially proud to recognize a true leader in banking, our very own Ken Emerson.
American Bankers Association
BOILING SPRINGS SAVINGS BANK Rutherford, NJ
2010 COMMUNITY BANKER AWARD FOR FUNDRAISING FOR FOUNDATIONS AND LOCAL GROUPS
As we are proud to be a true leader in the community.
Come Home to Better Banking Corporate Headquarters: 25 Orient Way Rutherford, NJ 07070 (201) 939-5000
Visit us at: www.bssbank.com
Member FDIC
Lisa Eisele
Lewis R. Beatty
Age: 34 Title: AVP, Controller, Security Officer Bank: 1st Bank of Sea Isle City Bank Location: Sea Isle City Town of Residence: Petersburg
Age: 35 Title: Chief Financial Officer and Executive Assistant to the CEO Bank: First Hope Bank Bank Location: Hope
Left to right: 1st Bank of Sea Isle City President and CEO Larry Schmidt, Lisa A. Eisele and Angela Kelly, vice president and CFO.
Left to right: Lewis Beatty and his father, Norman E. Beatty, chairman, president and CEO, First Hope Bank.
Career Highlights: Ten years of experience in banking, starting as a teller right out of high school. Summa Cum Laude graduate, The Richard Stockton College, bachelor’s of science with finance track, 2001; started as junior accountant, progressed to staff accountant and then controller at 1st Bank in 2005. Chosen as security officer in 2009. I earned my MBA from Stockton last year and was promoted to AVP this year.
Methodist Church; soccer and Little League coach, Upper Township recreation department; member, Delta Mu Delta National Honor Society.
Community Involvement: Served in the New Jersey Army National Guard’s 253rd Transportation Company’s Family Readiness Group; coordinator for 1st Bank’s American Heart Association Walk and the ARC of Cape May County Walk teams; Sunday school teacher and finance committee member at Petersburg United
If you didn’t have your current job, what would you do? Probably work for another financial institution and pursue a law degree.
34 New Jersey Banker
Biggest Success: Balancing education, career and family, with three children and a husband in the military. Dream Job: CEO of a large community bank.
Town of Residence: Blairstown
Career Highlights: I have held the CFO position for eight years. I also set up and managed the bank’s e-commerce presence and call center. I am a Stonier graduate with an MBA in finance. In addition to the accounting responsibilities, I also manage a $90 million investment portfolio.
Dream Job: I look forward to becoming chairman of the board of the bank and continuing my family’s legacy in this part of New Jersey. If you didn’t have your current job, what would you do? Most likely teaching.
Community Involvement: Outside of the bank, I participate in my church and have given speeches to the local high school. Biggest Success: Making the right call to avoid TARP. It has allowed us to focus on the business of banking, while having one less regulatory influence.
Winter 2011
David Hanrahan
Christopher Heffernan
Town of Residence: Mantua Township
Town of Residence: Branchburg
Left to right: Chairman Dominick J. Romano and Dave Hanrahan.
Left to right: Vanessa Heffernan and Christopher Heffernan.
Age: 41 Title: President and CEO Bank: Capital Bank of New Jersey Bank Location: Vineland
Career Highlights: Spent the first 16 years of my career at The Bank of Gloucester County/The Bank; chosen as founding president of Capital Bank of New Jersey, spending the last four years working with our directors and my team of officers and employees to build Capital Bank into a successful, rapidly-growing, profitable, and well-regarded community bank. Community Involvement: Board member of the Cumberland County Habitat for Humanity; member of the American Bankers Association’s Community and Economic Development Committee; council member of the Boy Scouts of America – Southern New Jersey Council; member of the Vineland Rotary Club; member of the Greater Vineland Chamber of Commerce; past treasurer of Fellowship
Bible Church of Mullica Hill; guest professor for the Rutgers University – Camden School of Business Annual Guest Professor Program. Biggest Success: Marrying my high-school sweetheart, Crystal, who loves me and our five kids faithfully and unconditionally. Dream Job: The one I’ve got. If you didn’t have your current job, what would you do? I’ve got no idea – but I often tell my wife that I think I’d make a good waiter.
Age: 29 Title: Operations Manager Bank: Unity Bank Bank Location: Whitehouse Station
Career Highlights: Oversee operations, sales and team development of the bank branch. Over five years, progressed from part-time teller to operations manager. My goals are completely aligned with that of my employer; we both strive day-in and day-out to provide the absolute best service. Community Involvement: I’ve been involved with a couple of Marine Corps scholarship foundations. I also support my honor society, Phi Theta Kappa. I find myself involved with many non-profit organizations whose aim is to support the community in which the bank and I do business.
Winter 2011
Biggest Success: Being recognized as a New Leader in Banking. This is the culmination of all my efforts thus far. Dream Job: My passion lies within the profession of proprietary trading and the more I self-educate myself on the stock markets of the world, the more I am drawn to the idea of doing it for a living. If you didn’t have your current job, what would you do? More than likely, would be a Marine Corps officer, following in the footsteps of my father, grandfather and uncles.
New Jersey Banker
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Damien Kane
Gregory M. Matuson, CPA
Town of Residence: Manalapan
Town of Residence: Egg Harbor Township
Left to right, Damian Kane and Michael Widmer, EVP.
Left to right: Gerald L. Reeves, president, CEO and director of Sturdy Savings Bank, and Gregory Matuson.
Age: 37 Title: Vice President and Director of Marketing Bank: Northfield Bank Bank Location: Woodbridge
Career Highlights: Forming an in-house advertising agency at Northfield Bank, realizing a significant annual cost savings.
committee member of the Staten Island Film Festival and of A Very Special Place Golf Outing.
Community Involvement: Currently the treasurer and a board member of the Union County Baseball Association; volunteer Little League coach for the Manalapan Baseball Association; registration volunteer and team member for the American Cancer Society’s Relay for Life and a registration volunteer at the Stephen Siller Foundation’s Tunnels to Tower Walk/Run in Manhattan; chairman of the Staten Island Chamber of Commerce Marketing Committee; committee member of the Staten Island Economic Development Corporation Business Conference. Board member of the NJ Bank Marketing Association;
Biggest Success: Achieving my current title at the age of 31. Dream Job: Continue to gain greater responsibility within my company and contribute to the growth and success of the organization. If you weren’t doing the job you’re doing now, what would you do? I would probably be a college marketing professor and high school baseball coach.
Age: 36 Title: Senior Vice President, Chief Financial Officer and Treasurer Bank: Sturdy Savings Bank Bank Location: Cape May Court House
Career Highlights: Before my current position, I was a senior accountant for a local accounting firm in Ocean City. I’m a CPA and a member of the American Institute of Certified Public Accountants (AICPA) and the New Jersey Society of Certified Public Accountants (NJSCPA). Community Involvement: Member of the board of directors of the Atlantic Cape Community College Foundation, which provides financial support to the college and its students, awarding more than $200,000 in scholarships this past year.
Biggest Success: Achieving my current title at the age of 31 and to have helped manage and guide the bank through the credit crisis of the past few years and the most difficult economic climate since the Great Depression. Dream Job: My ultimate dream job is to be the CEO of a financial institution. If you weren’t doing the job you’re doing now, what would you do? I would probably work for an investment banking firm.
Outstanding. We are so pleased to congratulate our colleague, Aimee Cervini, for receiving the NJ Banking New Leader Award. 1.800.SUN.9066 sunnb.com over 60 NJ locations Member FDIC
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Winter 2011
Jennifer McGlynn
Michelle S. Miragliotta
Town of Residence: Hawthorne
Town of Residence: Fredon
Left to right: Frank R. Giancola, president and CEO, Mariner’s Bank, and Jennifer McGlynn.
Left to right: Michelle Miragliotta and Norman E. Beatty, president, chairman and CEO.
Age: 32 Title: Vice President, Information Technology and Project Manager Bank: Mariner’s Bank Bank Location: Edgewater
Career Highlights: Certified Community Bank Technology Officer – ICBA Community Bank IT Institute since 2008 and recertified in 2010; featured speaker for cBanc network’s June 2010 President’s spotlight; BetterBank Webinar: 400 Tasks and Items to Open a Bank Branch.
Biggest Success: Managed the planning and opening of three new branch locations; responsible for planning, directing and coordinating IT activities; managed the implementation of remote deposit capture, business bill pay, a new interactive website and a bank-wide upgrade of core systems.
Community Involvement: Team leader for Gloria’s Hope since 2006 to benefit the ALS Association; Mariner’s Bank Making Strides for Breast Cancer team organizer for 2008 Bergen County Walk; NJ Young Professional member since 2009; Paramus Catholic alumni board member since 2010.
Dream Job: To own a bank consulting firm to assist banks in managing all tasks associated with new branch construction, including ground breaking, interior design, installing computers and planning the grand opening. If you weren’t doing the job you’re doing now, what would you do? See dream job.
Age: 30 Title: AVP Loan Administration and Consumer Credit Officer Bank: First Hope Bank Bank Location: Sparta
Career Highlights: I started work at First Hope as a teller in June 2003, and became retail analyst in 2004. In 2007 I was promoted to assistant vice president and retail analyst. In September 2010 I was promoted to assistant vice president and loan administration/consumer credit officer. In addition to my previous responsibilities, I now manage all aspects of the bank’s consumer loan originations area. Biggest Success: My recent promotion to my current job. My work with the bank’s Senior Lender exposed me to a wealth of information about lending, helping to prepare me for the role as leader of the bank’s consumer loan originations area.
Dream Job: Would definitely involve both domestic and international travel, as I love to see how other parts of the country and the world compare to, and differ from, ours. If you didn’t have your current job, what would you do? I would probably still be working at a job at a financial institution, something that involves finance or lending. I’ve always been a detail-oriented, analyticallyminded person.
Millington Savings Bank is proud to congratulate our own
Linda Zito. Winner of a New Leaders in Banking award. We appreciate your outstanding leadership and contribution to our success. It is an honor to have you as part of our Millington family.
(908) 647-4000 • www.millingtonsb.com • Locations in Morris and Somerset Counties Winter 2011
New Jersey Banker
37
Jehan (Gigi) T. Sanders
Brian Schaeffer
Town of Residence: Lodi
Town of Residence: Mount Laurel
Left to right: Laura Criscione, EVP and chief financial officer; Jehan Sanders; and Elizabeth Magennis, SVP and chief loan officer.
Brian Schaeffer
Age: 31 Title: Vice President of Relationship Banking Bank: North Jersey Community Bank Bank Location: Englewood Cliffs
Career Highlights: I started the formation of NJCB’s relationship department by branding and living the bank’s motto of “A Better Place to Be.” This department differentiated NJCB from its competitors – both the community and the national banks – and brought in new, overall growth and profit. Community Involvement: GFLCC, board member; Ridgewood Chamber of Commerce; Fort Lee Rotary; volunteered for Shelter our Sisters; CFA and American Cancer Society – Making Strides Against Breast Cancer; ICPC member.
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Biggest Success: Besides raising three girls, my career advancement in five years at NJCB, progressing from a branch manager of our first, stand-alone branch to the vice president of relationship banking, and having a hand in each of our seven new branches. Dream Job: Professional match-maker, because I truly enjoy bringing people together and forming meaningful relationships. If you weren’t doing the job you’re doing now, what would you do? Work on the international level as an ambassador to the U.S. in connecting us with various parts of the Middle East, by utilizing my Middle Eastern heritage and fluency in Arabic.
Age: 40 Title: Chief Technology/Information Officer Bank: Liberty Bell Bank Bank Location: Marlton
Career Highlights: I’m a 16-plus year technology professional who has worked in various industries managing and providing solutions both domestically and abroad in large and small environments. I’ve been fortunate to work with some of the smartest people, who have helped me grow both personally and professionally.
my experience in information security to build tools to track and catch criminals. I also coach youth soccer.
Community Involvement: I’ve been a volunteer for the Philadelphia chapter of Infragard since 2001 and currently serve as chapter president. Infragard is a public/private alliance between the FBI and industry to share information and raise awareness to protect the critical infrastructures of the United States. I also volunteer my time to law enforcement in an effort to share
Dream Job: Aviation, involving designing and/or flying airplanes.
Biggest Success: Professionally, helping to found and develop Liberty Bell Bank. Personally, somehow convincing my wife to marry me.
If you didn’t have your current job, what would you do? Traveling around the world honing my photography skills.
Winter 2011
20 Locations in New Jersey, Staten Island and Brooklyn
Congratulations! Northfield Bank congratulates Damien Kane and all the recipients of the New Jersey Bankers Association New Leaders in Banking Award.
Member FDIC
Michael Thulen Jr.
Linda Zito
Age: 30 Title: Personal Banker II Bank: Wachovia Bank, A Wells Fargo Company Bank Location: Brick Township Town of Residence: Brick Township
Age: 37 Title: Assistant Corporate Secretary and Commercial Loan Officer Company: Millington Savings Bank Company Location: Basking Ridge Residence: Flemington
Left to right: Vincent Spano, District Manager, Wachovia; Michael Thulen Jr.; and Josephine Moran, Community Banking President, Wachovia. Career Highlights: Recently promoted to the Brick Township Branch of Wachovia from a smaller branch in Lakewood where I had helped new and small businesses get started and grow, often utilizing the Urban Enterprise Zone programs. Community Involvement: Board member of Home Town Heroes and spend time weekly with BMAC. For the last two and a half years I have been a commissioner on the Brick Township Housing Authority and serve as its board chairman for this fiscal year.
Left to right: Nancy Schmitt, VP of Lending, and Linda Zito.
Biggest Success: With Wachovia, I have been a sales leader at different times for the market. In 2009, I opened the most businesses checking accounts in Ocean County. I have also helped several small businesses review business practices to improve their key products and services, resulting in enhanced business relationships with the bank.
Career Highlights: I have been with the bank for 16 years and chose to work in a smaller institution to learn many different aspects of banking. Prior to that, I spent 13 years in a military community, living in various duty stations in Germany and traveling throughout Europe. I also studied to become a paralegal and specialized in corporate law.
Dream Job: A banker working on large commercial and government accounts for an industry leading bank.
Community Involvement: MSB supports many local programs and charities throughout the year. Personally, I regularly gather, donate and deliver items for the local animal shelters. I own two rescue dogs and hope to foster more in the future.
If you didn’t have your current job, what would you do? I would be a building inspector. I am currently licensed in New Jersey and always had a passion for building.
Biggest Success: Growing into my career, working as a teller, in customer service, consumer lending and finally in the commercial lending department. Dream Job: To adopt shelter dogs and train them to do therapy work for our disabled veterans. If you didn’t have your current job, what would you do? I would probably still be in the financial field. I find it rewarding to provide working solutions for customer goals and dreams.
to the New Leader Recipients from The Warren Group! Publisher of NJ Banker
40 New Jersey Banker
Winter 2011
Remember the kid who knew when to use every tool in the bag?
Put him to work for you.
Tropicana casino & resorT | aTlanTic ciTy, new Jersey | nov. 9, 2010
BankHorizons, held at the Tropicana Casino & Resort in Atlantic City on Nov. 9, was a tremendous hit. Seventyfive vendor booths and more than 600 attendees made it a record. Several of the breakout sessions were filled not just to capacity, but to overflow. Keynote speaker William Isaac, author of Senseless Panic: How Washington Failed America shared his experience and wisdom about the anatomy of financial crises, and signed copies of his book. A steady stream of podcasts (see photos), and a spirited raffle at the end, kept the momentum going. Thanks to all our sponsors. See you all next year!
Podcast with keynote speaker William Isaac, author of the book Senseless Panic.
Book signing with William Isaac.
Several of the breakout sessions were fully attended.
The exhibition hall floor was packed at midday.
Overflow crowd at the session on social media.
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New Jersey Banker
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Feature
The Hidden Crisis in Banking By Alan J. Kaplan
A
s we emerge from the financial downturn now known as the Great Recession, which pummeled the financial industry and spawned the despised TARP, another crisis is looming. This crisis, however, is not one caused by faulty mortgage lending policies, credit default swaps or Wall Street. It is of our own doing, even aided and abetted at times by bank boards and CEOs. It is a crisis of leadership, exacerbated somewhat by reticence to plan for the Alan J. Kaplan long term viability of our own institutions. In the new world order of our banking industry, I believe that the two most vital ingredients for banks, small and large, are capital and talent. Everything else, from regulatory scrutiny to asset quality issues to investments gone sour, are tactical problems that can and will be mostly resolved over time, provided that the talent and capital are available to weather the storm. Without these two, regulators are increasingly reticent to grant the time necessary for institutional recovery. This is not meant to diminish asset quality and other problems, which can be major headaches to fix, and may require help from a general economic recovery. We keep returning, however, to the twin necessities of talent and capital, as troubled institutions that are short on leadership will likely pay a premium for additional capital, if it is available to them at all. A number of wellmanaged community banks have become magnets for capital – in many cases with little or no dilution – precisely because of their strong leadership teams. According to Robert Kafafian, president and CEO of bank consulting and advisory firm The Kafafian Group, “The quality of the executive management team is one of the very first things we explore when working on a strategic plan for a client. If a bank lacks strong players in critical positions, it makes executing the plan much more challenging,
44 New Jersey Banker
especially when approaching a transition in any of the bank’s senior leadership roles. While planning is important, having a team that can execute is critical.” Having been in countless bank boardrooms and advised dozens of community banks around the issues of leadership succession, some patterns have emerged: • Most bank boards with a named successor have limited context with which to determine whether that individual is truly ready and capable of running the bank, or whether this person can create “followership” throughout the organization. • Many incumbent CEOs are reticent to truly plan for their departure, because they are not sure when they will really want to retire, or they do not want to be “pushed” by someone waiting in the wings, or they simply refuse to accept that they will not live forever. • Boards often struggle with the issue of “the devil they know.” We have seen many boards select a less ready internal successor, who is a good team player and wonderful cultural icon, over a more qualified (and well suited) outsider, simply because they were not willing to hire someone they did not know prior to launching their search. If a board strongly desires a homegrown successor, which is usually preferable, the process of developing the next leader must begin much sooner. • Banks too often begin to search for a successor with a short timeline for the incumbent CEO to retire. An earlier hunt for the future leader would allow for better successor development, a smoother cultural integration, and an easier transition in partnership with the retiring CEO. So, what is the solution to this conundrum? The answer is quite simple: Invest the time early to develop the high potentials within your organization; set the expectations around timelines and roles; and be honest about what you have or do not have in your own talent pool. Banking today is a far more complex industry than it was in the mid-1980s when I first entered
the industry. The demands on CEOs of even the smallest institutions require broader skill sets, new ways of managing a diverse and diffused workforce, and political and organizational savvy on a new level. Developing these qualities is not easy, but failing to do so actually creates more institutional risk, including the complexities involved in bringing in a new leader from the outside when internal development efforts fall short. There has been a decline in attendance at industry conferences over the past few years, partially due to the cost climate and partially the “optics” of a board or bank leaders flying off to a resort on “bank business.” However, industry conferences and conventions – some of which clearly offer stronger education than others – can provide a vital connection to the latest trends and issues facing those with fiduciary responsibility for the institution. The ABA, ICBA, FMS, RMA, BAI and countless state associations provide excellent training programs for both up-and-comers as well as incumbent leaders. More banks should leverage these and other regional and national resources on behalf of the next generation. Back home, few boards are focused on the two most vital elements of grooming and retaining high potential executives: First, the personal involvement of their boss (or board); and second, providing developmental stretch assignments for up-and-comers. This is where the objections often start, with comments like “I can’t afford to take my chief lender out of that role to broaden her background. I need her there.” We believe that if she is a true successor contender, you can’t afford NOT to round out her banking skills and knowledge in other key areas of the institution. We have seen too many solid employees elevated into the president’s chair with less than ideal preparation, when the bank could have invested the time (more than money) to better round out their experiences. A little coaching around leadership competencies and managing former peers doesn’t hurt either, and is often a very worthwhile investment. Most underprepared successors will be the first to
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admit that they wish more had been done to prepare them for the Big Chair. Showing your up-and-comers that there is a plan for their future, and that you as their current leader (or as a board member) are consciously aware of this, is also vital. High potentials want to feel the love, and this more than anything will keep them committed to the organization. Few rising stars will leave an institution that they feel cares about them and is working to help them reach their potential. Developmental stretch assignments, special projects and board exposure are all ways to make your best-and-brightest feel valued, while simultaneously testing their mettle. Best of all, these activities do not cost the bank money to implement; they may actually save or make money for the institution. Kafafian adds that “community banks can do more to prepare for leadership succession
well in advance of planned retirements. Failing to groom the next generation can be one more reason why a bank might be forced to consider selling or merging.” In the future, when the current financial industry downturn is finally in the rearview mirror, there will still be between 7,000 and 7,500 banking institutions in this country. Yet it is unclear whether there will actually be enough qualified leaders to run these banks. Formal training programs have largely gone by the wayside. Today, what remains are mostly a handful of larger community banks with a few credit analysts being training on the job. While there is nothing wrong with this approach, it lacks the scale and depth of predecessor programs. Quality commercial loans may be hard to come by these days, but quality commercial lenders with strong banking skills and upside potential are even harder to find. Yet this is a major part of the
talent pool from which future bank leaders will be drawn. Our industry remains a vital part of the national economy in many ways, and community banks are often the lynchpin of their local business communities. Ensuring the survival of the industry and community banking is critical all across the country. The best way to secure your bank’s future is by developing leaders within the bank who have the potential to manage and grow a strong, healthy institution for the long term. Failing to do so may result in your bank’s next crisis, and one which may be even more difficult to resolve. ■ Alan J. Kaplan is founder and CEO of Kaplan & Associates, Inc., an executive search and talent consulting firm specializing in the banking industry.
Unparalleled experience
serving New Jersey financial institutions Stifel, Nicolaus & Company, Incorporated has been serving banks and thrifts for over 30 years. Since 2000: • Managed or Co-Managed 474 Public and Private Offerings, raising $55.4 billion in capital • Managed 44 Mutual-to-Stock Conversion Offerings, raising $12.4 billion in capital • Advised in 215 Financial Advisory Transactions, totaling $14.6 billion • Of these transactions, approximately 30% were for Mid-Atlantic-based companies Over 260 Financial Service Companies under research coverage, 75 of which reside in the Mid-Atlantic Region Large retail and institutional sales distribution channel
We have defined the Mid-Atlantic region to include: Delaware, Maryland, New Jersey, New York, and Pennsylvania. The information presented includes transactions effected and matters conducted by Stifel Nicolaus Investment Banking, the Capital Markets Division of Legg Mason Wood Walker, Inc. (acquired on December 1, 2005), Ryan Beck & Co., Inc. (acquired on February 28, 2007), Thomas Weisel Partners LLC (acquired on July 1, 2010), and their respective affiliates. Stifel, Nicolaus & Company, Incorporated and Thomas Weisel Partners LLC are affiliated broker-dealer subsidiaries of Stifel Financial Corp. which are collectively referred to herein under the marketing name Stifel Nicolaus Weisel.
Senior Executive Involvement For more information, contact: Rick E. Maples, Head of Investment Banking (314) 342-2038 • maplesr@stifel.com
Ben A. Plotkin, Executive Vice President, Vice Chairman (973) 549-4025 • ben.plotkin@stifel.com
Michael F. Barry, Managing Director (212) 847-6458 • barrym@stifel.com
Mark B. Cohen, Managing Director (212) 847-6438 • mark.cohen@stifel.com
David P. Lazar, Managing Director (215) 861-7179 • david.lazar@stifel.com
Robin P. Suskind, Managing Director (973) 549-4036 • robin.suskind@stifel.com
member sipc and nyse | www.stifel.com
Winter 2011
New Jersey Banker
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Meet Our Endorsed Service Providers
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ighly regulated, data-intensive, and “always on” institutions like yours demand data protection, disaster recovery, and business-continuity solutions like ours. An EVault® data protection solution from i365, A Seagate Company, will quickly back up and restore your data while keeping it secure and ensuring compliance. Trusted by hundreds of financial services companies globally since 1997, EVault on-premise, cloud-based, and hybrid data protection is simple to manage, easily scalable to grow with your business, and flexible enough to perfectly suit your environment. Your data is completely safe. With EVault, there are no tapes involved, no physical transport; in fact, EVault true disk-to-disk backup technology virtually eliminates human error and guarantees reliability. Plus our professional services team stands ready to help you devise, test and document
emergency procedures based on your specific needs. Among your peers who have suffered disasters, many chose EVault so they can say, “never again.” EVault is designed for regulatory compliance. Use it and you’ll easily pass compliance audits mandated by GLBA, SOX, FFIEC and others. That’s due in part to our network of top-tier, SAS 70 Type II-certified data centers and end-to-end, FIPS-approved, 256-bit AES data encryption. Data is shielded inside your firewall and while it’s in transit and in storage. And there are no “back door” decryption keys; not even i365 can view your protected information. EVault works with you. It thrives in multi-site environments – whether down the hall or across the country – and runs seamlessly in nearly any combination of platforms and applications. These include Microsoft Windows, Linux, VMware, Novell
NetWare, Sun Solaris, HP-UX, IBM AIX, IBM i, Microsoft SharePoint, Microsoft Exchange, Microsoft SQL Server, Microsoft Cluster Services and Oracle databases. Everything about EVault is easy, from setup and centralized management to reporting and one-click “single-pass” restores. You also get i365’s truly world-class customer support: expert insiders, available 24/7/365, at no additional cost. Sound good? ■ Steven Horst is national account manager for i365, A Seagate Company. For more information, he can be reached at 570-2744058 or Steven.Horst@i365.com.
Eisner LLP and Amper, Politziner & Mattia, LLP have combined their accounting, tax and advisory services practices effective August 16, 2010 Introducing:
As EisnerAmper LLP, we’re even better positioned to offer the unparalleled talent and service our clients know and expect, just with a broader and deeper expertise. With nearly 1200 professionals and eleven locations, we’re ready to help you wherever you are from Main Street to Wall Street.
New York | New Jersey | Pennsylvania | Cayman Islands Global capabilities via independent membership in PKF International
46 New Jersey Banker
Bridget Day CPA Partner EisnerAmper Banking Group 732.287.1000 ext 1239
Winter 2011
All Onboard!
Manage Energy Costs with Constellation NewEnergy
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onstellation NewEnergy, NJBankers Endorsed Electricity Supplier, is a leading US competitive energy supplier that serves business customers from Main Street to two-thirds of the Fortune 100. Our commercial, industrial and publicsector customers, which represented over 14,000 megawatts of peak electric load in 2009, depend on our expertise to help them make smart energy buying decisions for their business. We fuse information and electricity to help businesses manage their risk of volatile energy costs by providing a comprehensive array of innovative products, services, pricing and resources designed to address specific customer objectives. By analyzing your energy usage and the unique needs of your business, we work with you to implement a variety of customized strategies designed to help stabilize your electricity costs and create better budget certainty. As you know, it’s good business practice to shop and compare what you pay for products and services with alternate suppliers – this is especially important when it comes to energy. Commercial electricity rates have fallen to multi-year lows and now is a great time to secure a competitive electricity rate with the benefit of long-term price
protection. Constellation NewEnergy can help your financial institution understand your energy options and assist in putting a formal plan in place that meets your unique business’ objectives. For additional information about Constellation NewEnergy and to request a free, no-obligation electricity quote, visit www.NewEnergy.com/NJBA or call Thom Dickinson, senior business development manager, at 609-914-4554.
About Constellation NewEnergy Constellation NewEnergy (www. newenergy.com) is a leading competitive supplier of electricity, natural gas and energyrelated services to commercial, industrial and institutional customers throughout the United States. A subsidiary of Constellation Energy (NYSE: CEG), Constellation NewEnergy operates in all competitive energy markets throughout the country, providing products that enable customers to effectively manage and control energy costs. Environmental information about Constellation NewEnergy’s competitive energy supply services along with other information about our business is available at www. newenergy.com or by calling our toll-free number at 866-237-POWER. ■
Why Should You Choose Constellation NewEnergy as Your Electricity Supplier? • A leading supplier of energy products and services • Fortune 500 company with revenues over $15 billion in 2009 • Serving New Jersey business customers since deregulation began in 2001 • Full-service energy company serving small businesses to large commercial customers throughout the United States
continued from page 26 Deluxe Corporation, a 95-year-old business whose core products are checks and forms, is looking toward the future with its targeting of businesses with fewer than 20 employees. “We’re really helping the cottage industries grow,” says Susan Eick, vice president, financial services marketing at Deluxe. “That’s the future,” she notes. Deluxe’s costfree online community helps banks attract and retain small-business customers. The focus on small business marks the opportunity to make a shift in onboarding tools. Historically, banks have had separate solutions and technology for commercial/ corporate cash management customers and for retail customers. “If you’re a small business, you’re very likely doing both things with the same bank,” says Harland’s Kilmer. And small businesses conduct their business more like consumers than like corporate customers. Today, a retail consumer may also have a small side business – and your bank can make that your business. “You have to be there and earn it as opposed to wait for it,” he says. “Look for opportunistic growth. … How are your products and services bundled? [Ask yourself] if we have this business customer, why don’t we have the personal relationship? Why didn’t we ask for the checking account?”
The challenges ahead The ability to cross-sell will get tougher depending on which way a particular bank decides to go on some of the regulations, Greenberg says. “If you had credit lines out and reduced them, or you used to honor debit overdrafts and now you’re causing somebody embarrassment at check-out by not honoring them you’re going to have a harder time cross-selling.” Additionally, the key to growth in the future is to retain existing customers – the essence of onboarding (see sidebar). Whether you’ve got thousands of an acquired bank’s customers all at once to onboard, or a trickle of customers dissatisfied with their previous institution, establishing and expanding upon a customer relationship is critical. ■ Christina P. O’Neill is editor of custom publications for The Warren Group, publisher of New Jersey Banker.
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New Jersey Banker
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Behind the Teller Line
Peapack-Gladstone Bank and PGB Trust & Investments: Moving Toward 90 Years
Pictured, from left: Craig C. Spengeman, president of PGB Trust & Investments; Frank A. Kissel, chairman and CEO; and Robert M. Rogers, president and COO of Peapack-Gladstone Bank.
P
eapack-Gladstone Financial Corporation, the holding company for PeapackGladstone Bank and PGB Trust & Investments, announced in January 2010 that it would relocate its administrative offices to Bedminster, New Jersey; no small task for a bank that had occupied approximately 25,000 square feet of space just down the road in Gladstone for over 15 years and housed an entire division, PGB Trust & Investments, in a separate building all together. Founded in 1921, Peapack-Gladstone Bank moved its administrative employees into its Gladstone location when the bank had approximately $250 million in assets. In 1972, PGB Trust & Investments, the wealth management division of the bank, opened office space at the Gladstone branch around the corner. On the cusp of celebrating its 90th anniversary, the bank now has $1.48 billion in assets and the trust division has nearly $2 billion in assets under administration.
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Although it was difficult to leave the community where both the bank and the trust division were founded, and had spent so much of their growing years, the move to 500 Hills Drive in Bedminster was a necessity due to the increase in asset size, the growth of the employee base and the desire for the administrative offices for both the bank and trust divisions to combine locations. More than 110 employees report to work each day at the headquarters location of Peapack-Gladstone Bank and PGB Trust & Investments. The new facility in Bedminster provides for the much-needed space to accommodate the executive offices, branch administration, human resources, trust administration, investments and trust operations, as well as the mortgage, commercial and consumer loan departments and other key business functions. “The move afforded us the opportunity to position the majority of our
administrative departments under one roof,” said Frank A. Kissel, chairman and chief executive officer. “We were specifically excited to bring together our retail and trust divisions, because we have been spread apart for many years.” He added that “bringing everyone to one location has allowed us to work more closely with one another, ultimately enabling us to provide our customers with better service and a better overall experience.” Current real estate market conditions allowed the bank the opportunity to secure reasonably priced, long-term space in a location that is close to its roots and one that will provide for the expected growth and expansion that will come as the economy improves. The bank and trust division now occupy approximately 45,000 square feet of space in The Offices at Bedminster, a premier business location that features two stately three-story buildings, located directly
Winter 2011
across from the Kings shopping plaza, in close proximity to Interstates 78 and 287. “Our new headquarters facility is in a very visible and recognizable location, convenient for our customers and easily accessible from Routes 202 and 206,” said Kissel. “We have a full-service branch located directly across the street and are just a few minutes down the road from where our journey began. The location truly offers the best of everything for us and for our customers.” Throughout the administrative transition, the organization made it a priority to ensure that their current network of 23 branches remained unchanged. Full-service branches continue to operate throughout Hunterdon, Middlesex, Morris, Somerset and Union counties. The bank made a conscious effort to maintain a presence in the Gladstone community by keeping its original branch – which is located around the corner from the former headquarters location – open and running at full-service. Customers of the Gladstone branch date back to 1921, and the community has played a very large role in the overall success of Peapack-Gladstone Bank and PGB Trust & Investments.
The
“Our customers, shareholders and employees, many of which are one and the same, are all very important to us. The relocation has created better efficiency overall and a collaborative atmosphere,” commented Bob M. Rogers, president and chief operating officer. “We are working together, generating new ideas and making faster decisions, all for the benefit of these three groups.” The bank will commemorate its 90th anniversary in 2011 and sees the relocation as an opportunity to celebrate its strength and commitment to the New Jersey banking industry. After 90 years, the bank and its trust division remain strong, focused and fully aware of the challenges ahead and those that are before the communities it serves. With continued growth and adherence to its core values of providing traditional banking products and services, supporting its communities and providing an exceptional customer experience – for both longstanding and new customers – PeapackGladstone Bank remains diligent in its promise to continue providing community banking beyond expectation. ■
Peapack-Gladstone Bank and PGB Trust & Investments Headquarters, Bedminster, NJ.
Power to Know
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Winter 2011
New Jersey Banker
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Bank Notes
D. Blake Prichard
Laura Criscione
Kevin McCloskey
CAPE BANK Roy Goldberg and Mark Benevento have been appointed to the Cape Bank Board of Directors. Roy Goldberg is president and CEO of Gold Transportation, the premier supplier of air transportation services to the Atlantic City casino industry. In 2002, Goldberg established “The Shirley Mae Breast Cancer Assistance Fund” in honor of his mother, a breast cancer survivor. To date, through the Shirley Mae Run held each May, the fund has raised and donated over $1 million to breast cancer patients in the Southern Jersey area. Mark Benevento has established numerous successful businesses. Benevento serves as president and owner of Torma Management Inc., a general contractor and construction management company. He is also president and owner of the Greate Bay Country Club; real estate development company Bennie Management; Sports Development Inc., which operates family entertainment centers in Avalon, Sea Isle and Ocean City; and Adventure Golf South, operating three mini golf courses in Ocean City. He is an active member of several area Chambers of Commerce and the Ocean City Boardwalk Merchants Association. FEDERAL RESERVE BANK OF PHILADELPHIA D. Blake Prichard has been appointed first vice president and COO of the Federal Reserve Bank of Philadelphia, effective Jan. 1, 2011. Prichard is currently executive vice president, responsible for information technology services, customer relations and treasury and payment services. He has served more than 30 years with the Federal Reserve, including over 20 years at the Federal Reserve Bank of Boston. Prichard holds a bachelor’s degree from Northeastern University and attended the MIT Sloan School’s senior executive program.
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Irene S. Greenman
Joseph Hoppe
Letitia “Tish” Baum
ICS COMPLIANCE Robert Cardwell has joined ICS Compliance as a director in New Jersey. His regulatory compliance expertise lies in consumer privacy, identity theft, technology compliance, AML, predatory lending, CRA compliance, RESPA/ TILA reform, unfair or deceptive practices, and the Credit Card Accountability, Responsibility and Disclosure Act of 2009. He received a bachelor’s degree in accounting from Lehigh University and a doctorate from Pepperdine University School of Law. Cardwell is licensed to practice law in both California and Pennsylvania. Aaron Kahler joins ICS Compliance as assistant director in New York. He is an AML compliance expert who also specializes in fraud management/investigation and business intelligence/due diligence. He is a certified anti-money laundering specialist and a certified fraud examiner, and earned a bachelor’s degree from Utica College of Syracuse University in economic crime investigation. NORTH JERSEY COMMUNITY BANK Laura Criscione, executive vice president and CFO of North Jersey Community Bank, has been named the 2010 “CFO of the Year” by NJBIZ. Criscione has been a key member of the NJCB executive team since its inception, and many programs and initiatives have been introduced under her supervision. She oversees financial and operational functions and spearheads the technology department. NJBIZ is New Jersey’s leading statewide business publication and provides news and information about New Jersey companies and the New Jersey economy. The award honors CFOs in all industries with significant career achievements, impactful contributions and leadership in other areas of management. NORTHFIELD BANK With over 24 years of experience in the banking industry, Kevin McCloskey has joined
Robert Davis, Jr.
Brenda Ross-Dulan
the bank as senior vice president and senior credit officer. McCloskey is responsible for the credit, credit administration, loan closing, and home equity areas of the bank’s lending division. He received an MBA with a concentration in finance from Rutgers University. Irene S. Greenman joins the bank as vice president of loan servicing. Greenman has over 16 years of experience in the financial services industry. In this position, she will oversee the daily activities of the bank’s loan servicing department. She received a bachelor’s degree in business and computer science from Catawba College. She has also completed courses from The College of Insurance and American Institute of Banking. PASCACK COMMUNITY BANK Joseph Hoppe has been appointed assistant branch manager of Pascack Community Bank’s newest branch located at 210 Broadway in Hillsdale. This is the sixth branch for Pascack Community Bank. As assistant branch manager, Hoppe will be responsible for the growth and profitability of the branch along with daily operations and customer service. REED SMITH Travis P. Nelson has joined Reed Smith as a senior associate. He will be resident in both the firm’s Princeton and Philadelphia offices. Nelson focuses his practice on serving financial institutions, and their directors and officers, in consumer/regulatory compliance, bank mergers and acquisitions, enforcement actions, internal investigations and defense of financial services class action litigation. In addition, he represents institutions and individuals in criminal and regulatory investigations. Nelson earned his law degree at The Catholic University of America in 2001. He received a bachelor’s degree in economics from Villanova University’s School of Business. He is admitted to the Pennsylvania, New Jersey, New York, Maryland and Washington, DC, bars, as
Winter 2011
well as various federal courts, and has litigated before the federal Office of Financial Institutions Adjudication. ROMA BANK Roma Bank has formed a medical and dental practices division, focusing on the financial needs of health care providers. Letitia “Tish” Baum, vice president of commercial lending, will lead the new division. The division is designed to assist health care professionals to meet those needs of acquiring equipment, insurance, facilities and other critical elements necessary to expand their practices. Baum holds an MBA and an undergraduate degree from Occidental College. Jeffrey P. Taylor has been appointed to the board of directors of Roma Financial Corporation, parent company of Roma Bank. A graduate of Lafayette College with a bachelor’s degree in civil engineering, Taylor is a licensed professional engineer and professional planner
in New Jersey. He has served as city engineer and director in the city of Burlington and was president of Environmental Resolutions, Inc., of Mount Laurel. RUMSON-FAIR HAVEN BANK AND TRUST COMPANY Robert E. Davis, Jr., president and CEO of Rumson-Fair Haven Bank and Trust, was recently honored for his feats on the football field at the University of Virginia, when he became the 14th former Virginia player to have his jersey retired. Davis wore number 12 in his three seasons with the Cavaliers – freshmen weren’t eligible for varsity sports at the time – and played for two head coaches, Bill Elias and George Blackburn. As the UVA quarterback, Davis set 13 school and nine ACC records during his career. He still ranks 10th in career total offense at his alma mater. Davis earned a degree in economics from UVA and went on to a successful seven-year career in the NFL with
the Houston Oilers, New York Jets and New Orleans Saints; and two years with the World Football League. WELLS FARGO Brenda Ross-Dulan, Southern New Jersey regional president for Wachovia, a Wells Fargo Company, has been promoted to executive vice president within the company’s corporate structure. Ross-Dulan will continue leading the Southern New Jersey region, consisting of 150 banking stores totaling $12 billion in deposits throughout Atlantic, Burlington, Camden, Gloucester, Mercer, Middlesex, Monmouth and Ocean counties. She is responsible for managing all aspects of retail banking as well as leading the community activities in her markets. Ross-Dulan holds a bachelor’s degree in business administration from Howard University in Washington, and an MBA from the Anderson School of Management at UCLA. ■
Winter 2011
New Jersey Banker
51
Bank Shots
PASCACK COMMUNITY BANK – The management and directors of Pascack Community Bank and local dignitaries celebrated the grand opening of the bank’s newest branch located in Hillsdale with a ribbon-cutting ceremony and reception. Pictured, from left: Jon F. Hanson, chairman of the board of Pascack Community Bank; Hillsdale Councilwoman Marie Hanlon; Bruce M. Meisel, president and CEO of Pascack Community Bank; Hillsdale Mayor Max Arnowitz; Assemblyman Robert Schroeder; and Sen. Gerald Cardinale.
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Winter 2011
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Available wherever books and e-books are sold. Winter 2011
New Jersey Banker
53
Bank Shots
THE PROVIDENT BANK’s Wealth Management Group recently sponsored and hosted a private tent at the 90th annual Far Hills Steeplechase Races. At the event are Provident Bank board members (from left) Terence Gallagher, Laura Brooks, Katharine Laud and Thomas Berry, with James Nesci (center), chief wealth management officer at The Provident Bank’s Wealth Management Group.
FIRST NATIONAL BANK OF ELMER – Douglas E. Carll, CEO and executive vice president of The First National Bank of Elmer (center), receives a 35-year certificate of service from John E. McWeeney, Jr. (left) and James R. Silkensen, co-presidents and co-CEOs of NJBankers. Carll was recognized for his contributions to the banking industry over his 35-year career.
BOILING SPRINGS SAVINGS BANK – Robert E. Stillwell, president and CEO of Boiling Springs Savings Bank (center) is presented with an award from the New Jersey Bankers Association recognizing his more than 40 years serving the banking industry in New Jersey. Presenting the award are John E. McWeeney, Jr. (left) and James R. Silkensen (right), co-presidents and co-CEOs of NJBankers.
54 New Jersey Banker
KEARNY FEDERAL SAVINGS BANK – The Kearny Federal Charitable Foundation proudly granted the Salvation Army of Greater Kearny with a $10,000 check to help support local communities. The partnership between Kearny Federal and the Salvation Army is in its sixth consecutive year, contributing to the successful mission of helping those in need. Pictured, from left: Charles Dolan of The Salvation Army of Greater Kearny and Major Alberto Suarez received the grant from Craig Montanaro, president and COO, and John Hopkins, CEO, of Kearny Federal Savings Bank.
VALLEY NATIONAL BANK – In October, Valley National Bank’s “Valley Goes Pink!” walkathon raised over $120,000 for the fight against breast cancer. There were over 1,600 employees, friends and family in attendance for the event.
Winter 2011
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