Texas Banking April 2016

PROMISES, PROMISES: WHY DFA REFORM IS A TOUGH HAUL THIS YEAR

Contents 8 14 18

V O LU M E 1 0 5 • N O. 4 • A P R I L 2 0 1 6

28 SOCIAL

Features

Columns

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4

Where laws are made Bankers told to ‘work their Congress’ to obtain regulatory relief

14 Books + Bankers = Bright Students 18 Cutting trees in the social networking forest How to sharpen your tools to expand your online reach

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Chairman’s Forum Report from the Hill

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Banker to Banker Banking in the Bend

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Your Advocate Promises, promises: Why DFA reform is a tough haul this year

28 Community Banker Spotlight 34

East Texas banker finds home in Longview

Message from the President The third front

Compliance Hotline All about TRID construction lending

John L. Snider Immediate Past Chair

Departments

W. David Lacy Community Bankers Council Chair

20 News & Trends

William C. Helms Regional Bankers Council Chair

26 Partner Focus

Robert L. Upchurch, III Government Relations Council Chair Kenneth L. Burgess Jr. Chairman

EDITORIAL OFFICES: 203 West 10th Street, Austin, Texas 78701-2388 512-472-8388 fax 512-473-2560 www.texasbankers.com

Jim R. Purcell Vice Chair

James D. Dreibelbis Treasurer

Olivia Carmichael Solis Editor Katherine Kolstedt Art Director Jocelyn Carby Associate Editor Jamie Tanner Assistant Editor

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36 Bank People

J. Eric T. Sandberg Jr. TBA President/CEO

ADVERTISING OFFICES: The Warren Group 280 Summer St., 8th Floor Boston, MA 02210-1131 800-356-8805 www.thewarrengroup.com Dave Janoff Sales Manager djanoff@thewarrengroup.com

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TEXAS BANKERS ASSOCIATION

BOARD OF DIRECTORS R. MARK BAIN, First United Bank, Lubbock

ERICSANDBERG

DEAN O. BASS, Spirit of Texas Bank, SSB, College Station

TBA PRESIDENT & CEO

GEORGE G. BRUNS, USAA Federal Savings Bank, San Antonio

MESSAGE FROM THE PRESIDENT

KENNETH L. BURGESS, JR., FirstCapital Bank of Texas, N.A., Midland DANNY B. BUTLER, Jefferson Bank, San Antonio RONALD D. BUTLER, II, First Financial Bank, N.A., Abilene CINDY CAMPBELL, First National Bank, Southlake

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The third front

On the advocacy front, everyone is familiar with the efforts of the TBA on legislative matters in Austin and in Washington, D.C. In the post Dodd-Frank environment, advocacy at the federal level has also become increasingly important with respect to the administrative arm of the government, which is responsible for rule-writing under statutory mandates. This encompasses all the federal financial supervisory agencies, which now includes the Consumer Financial Protection Bureau and its onslaught of new initiatives ostensibly aimed at consumer protection.

Last year, for example, TBA took the lead in questioning the CFPB’s effort to obtain overdraft checking account data on every bank in the country, which resulted in certain processing companies assessing pass-through charges to the industry.

There is also a third front in terms of TBA issue advocacy and that is the federal judiciary. The most prominent example in this area is of Texas Bankers Association v. U.S. Dept. of the Treasury, where the association has contested IRS regulations requiring banks to file annual reports of interest earned by depositors who are neither taxpayers nor residents of the United States.

This litigation, which also includes the Florida Bankers Association, challenged the IRS regulation under the Administrative Procedure Act for failing to conduct any cost/benefit analysis prior to adopting the rule. TBA also furnished the court with survey results showing that more than $500 million of deposits at Texas banks had been withdrawn even before the regulation took effect as news spread that the Treasury Department planned to share this information with countries having lax confidentiality and public safety records.

At the appellate level, the case was decided against the TBA on a procedural question as two of the three judges ruled that a bank would first have to incur a tax penalty for violating the IRS reporting requirement in order for the court to have jurisdiction. Of course, no bank or any other business would be willing to violate the law for litigation purposes. TBA has now appealed to the U.S. Supreme Court for review of this lower court decision, which effectively precludes any pre-enforcement review of tax regulations.

There is no way of knowing whether the Supreme Court will agree to hear the case but we are encouraged that a number of amicus briefs have already been filed in support of our case including the National Federation of Independent Business and the Cato Institute.

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TIMOTHY J. COOPER, First State Bank, Spearman R. TERRY CULLEN, CTFA, First National Bank in Port Lavaca MORRIS E. DEFRIEND, The Farmers State Bank, Groesbeck GREG DODDS, Texas Bank, Brownwood WADE C. DONNELL, The National Bank of Texas at Fort Worth JAMES D. DREIBELBIS, Woodforest National Bank, The Woodlands ROBERT R. FRANKLIN, JR., CommunityBank of Texas, N.A., Houston JESSE LEE HAGGARD, III, The First National Bank of Trinity WILLIAM C. HELMS, BBVA Compass Bank, Houston JOHN L. HOLT, JR., NexBank Capital, Inc., Dallas ROBERT W. HOXWORTH, First National Bank Texas, Killeen WILLIAM DAVID LACY, Community Bank & Trust, Waco RANDY MCCURLEY, The First State Bank of Mobeetie PAUL S. MOXLEY, Texas Regional Bank, McAllen JIM R. PURCELL, The State National Bank, Big Spring JOE QUIROGA, Texas National Bank, Edinburg CHARLOTTE M. RASCHE, Prosperity Bank, Sugar Land MARK S. REILEY, Icon Bank of Texas, N.A., Houston J. MARK RIEBE, Texas Bank Financial, Weatherford KATHERINE RODRIGUEZ, CPA, Moody National Bank, Galveston RAYMOND H. RUST, III, Commercial Bank of Texas, N.A., Nacogdoches REAVE J. SCOTT, Coleman County State Bank JOHN L. SNIDER, Shelby Savings Bank, SSB, Center STEVE STAPP, R Bank, Round Rock GARY B. TAYLOR, Texas Bank and Trust Company, Longview ROBERT L. UPCHURCH, III, First State Bank of Bedias GARY P. VAN DEVENTER, Security State Bank, Anahuac DON R. WATERS, Liberty Bank, Hurst CEE YAGER, Worthington National Bank, Fort Worth

Expressed opinions in any signed article of Texas Banking are those of the author and do not necessarily reflect the viewpoint of editors or the Texas Bankers Association on the subject. While this magazine makes reasonable efforts to establish the integrity of advertisers, it does not endorse advertised products or services unless specifically so stated. Texas Banking © 2016, Texas Bankers Association. Articles may not be reproduced or reprinted without the expressed written permission of the Texas Bankers Association.

Texas Banking (ISSN 0885-6907) is published monthly by the Texas Bankers Association, 203 W. 10th St., Austin TX 78701-2388.

Periodicals Postage Paid at Austin, TX and at additional mailing offices. POSTMASTER: Send address changes to Texas Banking, Texas Bankers Association, 203 W. 10th St., Austin TX 78701-2388.

Annual dues of TBA members include $20 for each one-year subscription to Texas Banking. Annual rates for additional subscriptions are $48 for member banks and $96 for non-members.

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KENBURGESS TBA CHAIRMAN CHAIRMAN’S FORUM

Report from the Hill

i

I am writing this article upon returning from Washington, D.C., for the ABA Government Relations Summit.

We had good attendance from Texas relative to prior years, with more than 80 bankers, many of those first-time attendees. It was refreshing to see the young faces in attendance as these are the future leaders of our industry. You could see many of these future leaders becoming more engaged and enthusiastic as they heard the reports and attended the calls on Capitol Hill.

It is critical that our industry give these young leaders the opportunity to understand the impact of the legislative process and the methods available to us to have a voice in the making of policy for our industry.

It was clear from our meetings that the message we have been voicing through our face-to-face calls, letters and telephone calls has resonated with members of Congress on both sides of the aisle. Most understand the current environment is restricting banks’ ability to serve their customers and their communities.

However, the environment in D.C. is extremely partisan and it has become more about personal attacks than an open discussion of facts.

Our political leadership has moved very far to the left and very far to the right, while I would say the American public is in the middle.

On one of the days, we listened to a bipartisan panel of Congress dis-

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TEXAS BANKING • APRIL 2016

TBA Chairman Ken Burgess thanks Rep. Scott Tipton for authoring the TAILOR Act.

cuss the possibility for regulatory reform in the near future. The two Democratic members indicated willingness to talk as did the Republican member. One telling comment came from Sen. Heidi Heitkamp, who made the statement that “in our efforts for regulatory relief, we must keep the discussion on the issues and not make it personal. If we make it personal, we will lose.”

Sen. Heitkamp is one of the Democratic leaders who understands that regulatory relief is critical to our nation’s individuals and communities and to unlocking job creation. She has been one of the primary Democratic leaders who has tried to find common ground for some measure of regulatory relief. There is no doubt not much will be done in

Washington, D.C., until relationships are built between members on both sides.

One highlight of the trip was the opportunity to meet and thank Congressman Scott Tipton from Colorado’s 3rd Congressional District. Congressman Tipton recently authored the TAILOR Act, which was recently passed by the House Financial Services Committee. The act would require regulators to consider bank risk profiles and business models when writing regulations.

He also authored a letter to each of the regulators asking them to take risk and business model into account in their rulemaking ahead of any Congressional action. The Texas Bankers Association invited Congressman Tipton to a reception after our day of calls on the Hill, and Congressman Tipton graciously agreed to attend. I urge all Texas bankers to show Congressman Tipton our appreciation through our support as not very many have stepped this far out on the limb for our industry and our communities.

Another good call by a number of our bankers was on Congressman Pete Sessions. Rep. Sessions was very supportive of our concerns. He made a very important statement as we were leaving. He said, “Your faceto-face calls in Washington, D.C., really do make a difference. Keep doing it and you will eventually reap the benefits.”

Visiting with Rep. Pete Sessions (center) are TBA Vice Chair Jim Purcell and Eric Sandberg.

Above: TBA President & CEO Eric Sandberg discusses banking issues with Rep. Will Hurd. With him are Jim Goudge (second from left) and Hector Cerda.

Center spread: Chairman Jeb Hensarling of the House Financial Services Committee meets with a group of Texas bankers.

Former White House Press Secretary Dana Perino.

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TEXAS BANKING • APRIL 2016

WHERE LAWS ARE MADE Bankers told to ‘work their Congress’ to obtain regulatory relief

By Olivia Carmichael Solis

An aide to Rep. Henry Cueller (left) listens to, left to right, Ignacio Urrabazo, Hector Cerda and Jim Tondre.

@TEXASBANKERS

Congressmen, regulators and bankers are accustomed to speaking in numbers: The Dodd-Frank Act contains 2,300 pages with more than 400 new rules and mandates. The CFPB created nearly 1,900 pages of regulatory text in its effort to simplify mortgage disclosure forms. Since Dodd-Frank was passed in 2010, Texas alone has lost 144 banks.

While statistics are important, lawmakers and regulators advised more than 1,000 bankers at last month’s ABA Government Relations Summit in Washington, D.C., to tell stories of how regulations are affecting their customers. Chairman Jeb Hensarling of the House Financial Services Committee, who said he won’t rest until “Dodd-Frank is ripped out by its roots and tossed on the trash-heap of history,” advised bankers to tell stories of customers who are being denied the American dream.

“When small town community bankers come up and tell me that they spend more time dealing with government red tape than serving their customers, you know something is seriously wrong in America today,” Hensarling added.

“The regulatory environment is making it more difficult every single

TEXAS BANKING • APRIL 2016

9

day to see kids start businesses and experience the American dream,” said Sen. Tim Scott (R-SC), member of the Senate Committee on Banking, Housing and Urban Affairs.

“Capital requirements … liquidity requirements … strength testing— Every single additional cost winds up on the shoulders of our consumers.

Washington doesn’t understand that every single expense must be woven into the cost of doing business, and the cost is growing.”

Blaine Luetkemeyer (R-MO) added, “All of you are here this week to talk to us and that’s great,” he said.

“When you come in, don’t talk to us about your bottom line. We are more sensitive to our constituents and your needs. Tell us stories about people you’ve helped or how rules and regulations have hurt your customers.”

Rep. Will Hurd (R-TX) offered additional advice: “Don’t talk about your industry; talk about your customers.” He added that bankers

More than 1,000 bankers gathered in Washington, D.C., for the GR Summit.

Jeff Austin III introduces Rep. Jeb Hensarling at the GR

Sen. Tim Scott (R-SC) of the Senate Committee on

Summit.

Banking, Housing and Urban Affairs.

Rep. Blake Farenthold (center) meets with Jay Isaacs, Crystal Sturm, Travis Hillman, Silvia Aparicio, Brian Coufal and Rep. Ted Poe.

Tray Rankin.

Texas bankers pose in front of the capitol on their way to visit their congressmen.

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TEXAS BANKING • APRIL 2016

Rep. Pete Sessions.

should take the additional step of educating their customers and explaining the impact of rules and regulations on them.

The good and bad news

Texas bankers wait for their meeting with Rep. Pete Sessions.

TBA Chairman Ken Burgess asks a question during a Sen. John Cornyn.

visit with Sen. John Cornyn.

The bad news is that 2016 is a presidential election year and passing major regulatory relief for banks is going to be difficult. The good news is that efforts are underway to provide limited reg relief measures.

Chairman Hensarling, for example, is “deep into the planning” of a financial regulatory reform plan that would require a cost-benefit analysis for every regulation that passes. He is also proposing regulatory relief from Basel III capital requirements for community banks and changes to Federal Reserve mechanisms.

“The bold and better alternative you will see from committee Republicans will provide vast regulatory relief for financial institutions in exchange for meeting high, but

Rep. Marc Veasey meets with, left to right, Lee Haggard, John Snider, Veronica Watkins, Jeff Austin III, John Ory, Rep. Roger Williams.

Sean Shope and Michell Milner.

Politico’s Ben White moderates a panel with Sen. Heidi Heitkamp (D-ND), Rep. Blaine Luetkemeyer and Rep. Ed Sen. John Cornyn walks with Jim Purcell.

@TEXASBANKERS

Perlmutter (D-CO).

TEXAS BANKING • APRIL 2016

11

simple, capital requirements,” he said. “If financial institutions elect to hold strong Tier 1 capital, then they should gain relief from both DoddFrank and Basel’s burdensome regulations, neither of which were meant for community banks and shouldn’t apply to them to begin with.”

In addition, Reps. Scott Tipton (RCO) and David Scott (D-GA) have introduced H.R. 2896, the TAILOR ACT, that would require federal financial oversight agencies to fine-tune regulations to better fit (i.e., tailor) a financial institution’s risk profile and business model. The bill passed by a 34-22 vote with bipartisan support in the House Financial Services Committee.

“When regulators fail to fully grasp the compliance burdens of the many new mortgage rules to the point that financial institutions exit the mortgage business, it is abundantly clear that tailoring efforts have fallen short,” wrote the sponsors of the bill.

In their visits, Texas bankers urged the Texas delegation to support the bill. Tipton even stopped by a TBA reception at the conclusion of the visits to address the group. Texas bankers, in turn, thanked him for his efforts.

Chairman Richard Shelby of the Senate Committee on Banking, Housing and Urban Affairs, who last year introduced the Financial Regulatory Improvement Act—only to have it stripped out of the Omnibus budget legislation late in the year—is not giving up. He is continuing to work on building support for S. 1484, his financial regulatory reform law, but added that many members of his banking committee are wedded to Dodd-Frank. “Be patient,” he told the bankers. “But don’t be too patient. Get involved.

Work your Congress.”

Sen. Shelby’s legislative draft calls for a regulatory framework based on the systemic risk a bank poses, not simply on size alone. It would also give regulators more power to designate banks with assets between $50 billion and $500

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Rep. Randy Neugebauer (fourth from right) meets with constituents.

Rep. Dave Brat (R-VA) stops by the Texas bankers’ recepJose Gonzales and TBA Chairman Ken Burgess.

tion and discusses banking issues with Eric Sandberg.

Rep. Louie Gohmert (second from right) hears the concerns of Texas bankers.

Rep. Pete Olson.

Chairman Jeb Hensarling.

Brandon Batch, an aide to Rep. Michael McCaul, meets with, left to right, Jim and Suzanne Goudge and Sean Shope.

billion as systemically important and subject to tighter regulation.

And, although Congress generally tends to shy away from discussions on credit unions, both Hensarling and Shelby expressed concern about the NCUA’s move to expand credit unions’ expansive field of membership and member business lending. “We continue to have laws made by unelected unaccountable bureaucrats,” Hensarling said. “I do not see the authority for which they (NCUA) can do this.”

Shelby also was concerned that the NCUA ignored Congress and moved toward expanding credit union operations.

The Texas connection

Political analysts Stuart Rothenberg (left) and Charlie

Sen. Richard Shelby, chairman of the Committee on

Cook.

Banking, Housing and Urban Affairs.

Texas figured prominently in this year’s GR Summit. More than 80 Texas bankers, including 28 firsttimers, were on hand to pay visits to their lawmakers. Texas bankers visited 33 of the 36 members of the Texas delegation, as well as Sen. John Cornyn and two staffers from Sen. Ted Cruz’s office.

Rep. Al Green meets with, left to right, Mike Mauldin, Ignacio Urrabazo, Wes Hoskins, Michele Carfello, Silvia

David Lacy, Scott Rogers, Pat Bassano and Luke

Aparicio and David Bailey.

Longhofer discuss banking issues.

Rep. Randy Weber (left) hears from, left to right, Judy Rogers, Vic Pierson, Lee Rep. Roger Williams listens to Jim Purcell, Donny Palmer and Eric Sandberg.

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Weaver, Jim Sturgeon and Emmett Rhodes.

TEXAS BANKING • APRIL 2016

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Books + Bankers

By Jamie Tanner April is Financial Literacy Month and that’s especially important in Texas.

It’s important because, in our state, personal financial literacy is a component of the mathematics instruction in grades kindergarten through eight. However, many teachers have not received training or resources that will help them meet the TEKS (Texas Essential Knowledge and Skills).

Bankers can really shine in this role of helping elementary teachers and students achieve the goal to become more financially savvy. The financial literacy knowledge some of these teachers, and especially the young students, lack is second nature to a banker.

The Texas Bankers Foundation wants to help facilitate this relationship between the banking industry and schools. The Foundation offers free books (one book per member bank) for first- through fifth-graders that have financial literacy themes and a companion lesson plan. To learn more, visit texasbankers.com/finlitbooks or contact Jocelyn Carby, Foundation coordinator, at 512-472-8388 or jocelyn@texabankers.com.

The Foundation launched the books program this time last year. The following are four success stories of bankers using the Foundation’s books to teach a financial literacy lesson at their local elementary schools. Hopefully, bankers find inspiration and fresh ideas from these anecdotes for how they can make a positive impact on the lives of children in their communities.

JOSH SPIVEY Vice President, Woodhaven National Bank, Fort Worth Josh Spivey has two elementary school-aged children and teaches financial literacy lessons at their school and other elementary schools in the Fort Worth area every year.

“I’m always looking for ways to make financial literacy fun and interactive for the kids and easier on myself,” Spivey says.

In previous lessons, Spivey used a whiteboard to create a giant checkbook register to teach the young students about adding, subtracting and budgeting. “What we’ve found, especially from low-income neighborhoods, is some parents had never seen a checkbook register,” he says. “So, at the same time we were

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teaching the parents.”

In another lesson Spivey once presented, a young girl asked him if he was able to count to 100 because that was what they were learning to do in class at the time. “I told her ‘yes, that I could actually count to a thousand,’” Spivey says. “You could hear a pin drop and then all of the kids just started saying, ‘Whoa, that’s amazing!’”

That whole year, anytime Spivey would see that little girl or her friends, he could hear them whisper, “Mr. Spivey can count to a thousand!” Their teacher, Mrs. Morgan, still teases him in the halls about how he’s the man who can count to a thousand. “It has been a running joke for the past three years but a good memory of what kind of an

impression you can make on little kids,” Spivey says.

Since the children had seen the big checkbook register and knew Spivey could count to a thousand, he wanted to come up with a new lesson plan. The day before he was set to attend his son’s first grade class, Spivey received an email from the Texas Bankers Foundation about their book program.

He really liked the books and lesson plans, so after printing off the lesson plans he headed to Barnes & Noble to buy “A Chair for My Mother”

by Vera B. Williams and “Alexander, Who Used to Be Rich Last Sunday”

by Judith Viorst.

“The books were so much better than what we’d done before because the kids had used the

= Bright Students NORMA LANE Executive Vice President, Lovelady State Bank, Lovelady

books in some of their other lessons,” Spivey explains. “It was probably the best presentation we’d had and definitely the best response from the teachers.”

The teacher previously used “A Chair for My Mother” to teach children the importance of family — the financial literacy lesson plan focuses on saving money. The teacher told Spivey she’d use the book for math lessons, too, going forward.

“We’re a community bank; you can’t just be that in name,” Spivey says, on the importance of being involved in the community. “As bankers, we can give back by giving skills to young people, and even teachers and parents. We take for granted some of these skills we use every day in the financial industry.”

@TEXASBANKERS

Norma Lane learned about the Foundation book program while receiving a Cornerstone Award on behalf of Lovelady State Bank at TBA’s Convention in Austin last year.

After meeting with Texas Bankers Foundation Coordinator Jocelyn Carby, Lane returned to the bank with “The Go-Around Dollar” by Barbara Johnston Adams to present to fourth-graders and got in touch with the principal of the local elementary school.

“We’re in a small town so we just called and discussed that we had this book for fourth grade and wanted to present and then donate the book to the school library,” Lane says. She presented the lesson at two math classes that each had roughly 20 students.

“Fourth grade is a great group to work with; the teacher informed us money is introduced to them in the third grade but taught extensively in the fourth grade,” Lane says.

Lane stressed that making a book

presentation was worth the small time commitment. She says the time commitment was only 45-50 minutes for each of the two classes; she prepared by reading the book beforehand; and the bank gave gift bags with pens, stickers, balloons, a dollar and state quarters to each student.

All sorts of currency — coins, bills, silver certificates, even counterfeit bills — were used as part of Lane’s presentation.

Lane says the fourth-graders were especially enamored with the $2 bill.

“The children were excited to learn about money and had tons of questions,” Lane says. “They were a lot more responsive and inquisitive than we expected.” The students were even starting to grasp the knowledge of how banks lend money and how customers make deposits.

“We think it’s really important to give back and be a part of the community — it’s what we feel is part of our responsibility as bankers and financial leaders,” Lane explains.

Lane is looking forward to presenting and donating a new book at a different grade level this school year.

Fourth-graders raise their hands to answer a question asked by Norma Lane after she read “The Go-Around Dollar” at Lovelady Elementary School.

TEXAS BANKING • APRIL 2016

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TEKS, Almanza says the lesson plans have been a big hit with the teachers who are looking for material to teach their students. “The younger you teach financial literacy the better the outcome once a child reaches a certain age,” Martinez says.

These two community representatives have made such a positive impression they’ve been asked by schools to come teach financial literacy lessons to parents, too.

JAMIE PHILLIPS Vice President, First Community Bank, Corpus Christi

Each First Community Bank location has a care package with five books and lesson plans to present at local schools.

ABIGAIL MARTINEZ AND MIRIAM ALMANZA Community Representatives, Frost Bank, Austin Teaching financial literacy is a huge component of Abigail Martinez’s and Miriam Almanza’s jobs as community representatives for Frost Bank.

“Our job is to get Frost in front of anyone in the community,” Martinez says. They interact with the community at a variety of events and especially in schools. They’ve taught financial literacy to ages ranging from children in pre-kindergarten to seniors.

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TEXAS BANKING • APRIL 2016

Martinez and Almanza had used other resources to teach elementary school classes but they now exclusively use the books recommended by the Foundation. “The books are more appropriate for the various grade levels so that’s what we use,” Martinez says.

These Frost Bank community representatives have made an incredible impact on young Austin students.

“Since Oct. 28, 2015, Miriam and I have successfully taught 96 classes using the TBA curriculum,” Martinez says. Those visits were spread out among 10 different schools; that also means 96 books were donated to school classrooms or their libraries.

“There’s no negative to this; it’s very rewarding and the kids love it,” Martinez says. “The books and lessons aren’t boring at all — it’s not hard to sell. It’s so interactive and fun.”

Martinez and Almanza do like to put their own twist on their lessons.

For example, third grade students complete a worksheet about recognizing the value of $10 bills, $5 bills, quarters, nickels, etc., while they read “If I Made a Million” by David M. Schwartz, so Martinez and Almanza bring in zip lock bags for each student to hold up the correct currency that’s being discussed.

With students being tested on financial literacy in third grade for the

Jamie Phillips and First Community Bank, Corpus Christi, aren’t strangers to financial literacy efforts.

“The students and teachers always seem excited to have a guest speaker come in,” Phillips says of visiting schools to make a presentation. “Especially the younger ones love to be read to, they always have questions, it’s a lot of fun.”

They’ve taught Teach Children to Save and read books to students recommended by the Foundation last school year. “This year, the goal is to reach more kids and get out there and make the donations,” Phillips says.

In late February, Phillips sent packages to their nine locations containing laminated lesson plans and the five books recommended by the Foundation aimed at all five elementary school grade levels.

Phillips wants their nine locations to each pick a local school, read the appropriate books to each grade and donate the book and lesson plans.

Ideally, they’d read to every class in the school.

Phillips’ goal is to reach a thousand elementary school students through their book presentations this year.

“We teach our kids good manners, how to ride their bikes, how to do their homework but we have to teach our kids good financial responsibility — we can’t assume they’ll just learn it at school,” Phillips says. “We have to step up and make sure they know what they’re doing so that we have financial leaders for tomorrow.”

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Cutting trees in the social How to sharpen your tools to expand your online reach

By Eric Cook In last month’s article, “Social by Nature,” I shared the story of my father, a life-long community banker, and compared his approach to community banking to that of today’s modern social networker. Despite social networking not being around during his banking days, much of what we see online today is simply the “digitization” of time-tested community bank practices.

By their very nature, successful community bankers embody the characteristics of being both social and well networked in the communities they serve. It’s only in recent years this strategy has extended to the Internet and social networking sites like Facebook, LinkedIn, Twitter and others. Understandably, this shift has caused anxiety and concern to more than a handful of my banking friends as they struggle to embrace the change.

In my previous article, I intentionally avoided getting “into the weeds” and discussing how to use social networking. I wanted to first set the stage for why social networking today really is no different from what we, as community bankers, have been doing for years.

Now it’s time to expand a bit more and share some tactical ways that you can put social technology to work for you, help expand the reach of your institution online and build your personal (and bank’s) brand — all at the same time.

You’ve got t wo ears and one mouth for a reason Maybe you originally heard this from your mother, a business mentor or college professor. I’ll be the first to admit it, I like to talk. This is probably one of the reasons why I love presenting at conferences as much as I do. Although

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I’m not sure exactly when the first time I heard it, I’m a firm believer in active listening and making sure that before you open your mouth, you clearly understand what people want to hear from you. If you don’t, you’re just talking, or in social networking terms “posting,” just for the sake of it, and that’s not good for anyone.

When someone asks me “what’s the best way to get started in social networking,” many are surprised with my answer. I say “first, think about what you want to get out of your social networking efforts and then start by listening to those who are important to you.”

Many expect me to recommend the latest and greatest social network or tell them how many times per day they should be updating their profiles and posting. Nope. First, spend your time listening to make sure you know what you should be talking about!

If you just hop on social networking sites and start talking about what’s important to you (or your bank) and don’t take into consideration what your desired audience wants to hear, there’s a good chance they won’t pay attention to you for very long, and then you’ve lost ’em!

Define what you want from social net working There are many reasons why a bank (or individual) starts using social networking, but you need to determine what your reason(s) is/are. Is the bank or credit union across town active in social networking and you want to catch up?

Are you a commercial lender interested in building your prospecting opportunities or your credibility as a banking professional? Are you looking to share all the great ways

FRIENDS

TWEET

NEWS

NETWORK

net working forest that your bank (and your employees) support the communities you serve? Or, maybe you just want to get with the times and be better with technology to see how it can help.

These are just a few and there’s no right answer, but you need to ask the question and have some reason(s) for getting involved with social networking, because it will take some time. This means that you’ll ultimately have less time for something else that you’re doing now, so it’s important to have a goal in mind.

Find and listen to those that help you reach your goals Now that you’ve given some thought to what you want to accomplish, it’s time to think about who will be part of that process. These may be customers, other community bankers that are active in social networking, your competition, family members, celebrities, etc.

Whatever category they may fall into, you’ll need to start identifying the actual people (or businesses) and listen to what they are saying (so that when you get ready to start sharing content, it’s going to be relevant to what they want).

The best way to start listening is to first use the search feature available on all the various networks and see if you can find your best customers (or others you want to follow).

You can also do a Google search for the person or business with the network name after it. This will also help show you if they are active online (and you should connect).

If they have pages or profiles, make sure that you’re following them and start paying attention. Even if all you do is listen and don’t interact, at least you’re in a better position by knowing what’s going on in their world. If

@TEXASBANKERS

you’re not listening, you’ll miss everything and can you be 100 percent sure that your competition isn’t?

Eventually, you’ll start to get an idea of what they are sharing, what type of information they likely will be interested in reading (or watching), when there is an opportunity to engage and either offer a congratulations or maybe even share it with your network.

How sharp is your axe?

When someone goes online and checks out what I’m posting, I often hear comments like “Don’t you do any ‘real work?’ You always seem to be posting, commenting and updating all your social networking profiles.” Yes, I post a lot but only because I know what folks I’m connected to are interested in knowing more about — but I’m leveraging technology to work smarter, not harder, and that allows me to be in a lot of places at once.

Over the years I’ve tried, tested and selected some great tools to help me be as efficient as possible. In fact, you may be surprised that most days I spend less than 30 minutes managing my social networking accounts, yet still am able to make a big impact. Here’s how.

While I may be paraphrasing his quote slightly, Abraham Lincoln was credited with saying if he was given six hours to cut down a tree, he’d spend the first four of them sharpening his axe. While we’re not cutting down any trees, the lesson here is you want to be prepared and ensure you’re using the right tool for the job — in Lincoln’s case, a sharp axe. see “Social Media,” p. 38

TEXAS BANKING • APRIL 2016

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INDUSTRYNEWS Waco teen wins ABA national video contest The American Bankers Association Foundation announced that Nathan Mitchell of Waco was the grand prize winner of its 2015-2016 “Lights, Camera, Save!” video contest.

The judging panel, which consisted of personal finance and communications experts, awarded the Waco teen the grand prize for his video, “Nathan Mitchell’s Money Management Short.”

Mitchell, a student at Rapoport Academy, was a national finalist after

winning the local contest at Extraco Banks’ Waco branch.

“In only 57 seconds, Nathan’s video takes you through one’s life journey, exploring the endless possibilities once you start saving,” said Corey Carlisle, ABA Foundation executive director.

“Nathan’s video will inspire other kids and teens to make saving a priority.”

The winning videos were revealed through a live broadcast on the association’s YouTube channel.

Pioneer Bank merger successfully completed Pioneer Bancshares Inc., the holding company for Pioneer Bank SSB, successfully completed its merger with FC Holdings Inc., the holding company for First Community Bank N.A., effective March 1. The new Pioneer Bank exceeds $1 billion in total assets and operates 22 branches across Texas.

Pioneer Bank is now one of the largest banks headquartered in Central Texas. Jeffrey A. Wilkinson, Pioneer Bank’s president and CEO, will lead the new Pioneer Bank; Ron Coben, formerly First Community Bank’s chief operating officer, is COO. The bank’s Austin headquarters building is scheduled to open in the fall with an additional operations center in the Houston area.

“Pioneer Bank is growing and will continue to grow, but we care even more about our customers’ growth,” said Wilkinson. “Our scale provides larger lending limits, more convenient locations, and a better customer experience driven by better banking technology.”

5/29/15 10:11 AM Page 1

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Do you want a career in a field that offers its employees competitive salaries and benefits, opportunities for career advancement, education and training, job flexibility and excellent working conditions?

Fred Rusteberg to retire from IBC-Brownsville this year Banking veteran, community leader and founding president and CEO of IBC Bank-Brownsville, Fred Rusteberg, recently announced his retirement after working four decades in the banking industry. His transition from CEO into retirement began in February and he will officially step down at the end of August.

Rusteberg opened the first IBC Bank in Cameron County in 1984, the fourth IBC Bank in the International Bancshares Corp.

“We have built a great team,” Rusteberg said. “We’ve developed strong talent, and I know turning the bank’s leadership over to Al Villarreal, senior executive vice president, is the right decision. Al has diligently served the bank and community for 23 years, and his team has gained the respect and admiration of the board, staff and community.”

During Rusteberg’s tenure, he grew the bank to the high performing institution it is today with its 13 banking facilities and more than $1 billion in assets. While retiring as CEO, Rusteberg will serve as senior chairman of the IBC Bank-Brownsville board, and Ygnacio D. Garza will continue to serve as board chairman.

“Fred has played an integral part in the success of IBC Bank-Brownsville, and we are appreciative for his decades of service to the bank, Cameron County and the Rio Grande Valley,” International Bancshares President and Chairman of the Board/CEO Dennis E. Nixon said. “His leadership and vision for growth are invaluable, which is why we are pleased with his decision to continue his service on the bank’s board.

“I see the same vision and determination in Al, and we are confident he will continue Fred’s legacy in keeping IBC Bank-Brownsville as the region’s premier bank while serving as president and CEO.” Villarreal has been in the banking

@TEXASBANKERS

industry since 1988 and with IBC BankBrownsville since 1993. He currently serves as the bank’s senior executive vice president and board member.

In addition to 40 years in banking, Rusteberg has worked on the progress and development of the Brownsville community. He was the founding chairman of “Brownsville First,” a grassroots community effort in 1990 that convinced Brownsville voters to approve a half-cent sales tax and bond issue for economic development and quality of life proj-

ects, which the community continues to enjoy today.

Before he began his banking career he worked as assistant port director for the Port of Brownsville and as project director for the Brownsville/Matamoros Railroad Relocation project, helping develop a $50 million pilot/demonstration project. This eventually resulted in the relocation of the Union Pacific and Southern Pacific rail yards and rail transportation from the center of Brownsville.

Currently Rusteberg is a member of the University of Texas-Rio Grande Valley Strategic Planning Committee, which is working to bring the new regional university to the Rio Grande Valley area.

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TEXAS BANKING • APRIL 2016

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INDUSTRYNEWS PlainsCapital Bank renews $25,000 financial literacy grant Dallas-based PlainsCapital Bank has renewed a $25,000 grant to the Texas Council on Economic Education (TCEE) to support a financial literacy program for Texas middle school students. The grant ensures that the program, developed by TCEE in 2012 and funded by PlainsCapital, will continue to be available to teachers and schools throughout the state. The program covers topics such as saving, budgeting, credit and financial responsibility.

“Kids need to learn important money lessons early,” said Pete Villarreal, chief administrative officer for PlainsCapital Bank. “This program helps teach practical life skills – how to open a bank account and balance

a checkbook, how to save money to reach goals, how credit cards work, and if you borrow money, how much you need to earn to pay it back.

Exposure is key. The earlier we can instill good financial habits in kids, the better the outcome.”

Villarreal said PlainsCapital Bank’s commitment to improving financial literacy in Texas was the driver in partnering with TCEE four years ago to develop a program for seventh- and eighth-grade students that incorporated financial literacy education with math and social studies curricula.

“We’re building a foundation here,” said Laura Ewing, president and CEO of TCEE. “Students need to learn the principles of personal

finance well before high school, and they need to be armed with a basic understanding of money management before being sent out into the world to earn a living. These classes make a difference.”

Financial education varies widely by state. Studies show states with more strenuous standards get graduates off to a better financial start in life. Since 2000, Texas has made personal financial coursework a requisite for high school graduation.

In 2014, the Texas Education Agency (TEA) took the added step of implementing financial literacy mathematics standards for kindergarten through eighth-grade students, known as the Texas Essential Knowledge and Skills (TEKS) standards.

The program is a free resource for any public or private middle school in Texas needing financial literacy materials to incorporate into its curriculum.

In 2015, TCEE reported that 729 middle school teachers had downloaded the lessons, sharing them with 8,137 other teachers and impacting 477,254 students.

Villarreal sits on the board of TCEE and is actively involved in PlainsCapital’s financial literacy initiatives. A strong proponent of financial education in general, Villarreal points out what he believes to be the broader implication.

“A better understanding of one’s personal finances as a result of economic education can help make financial mistakes less common.

Smarter spending, saving and investing contributes to a healthier economy.”

FIND US ON SOCIAL MEDIA

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TEXAS BANKING • APRIL 2016

We Wish to Welcome and Thank Our Newest Associate Members Armor 2360 Campbell Creek Blvd., Suite 525 Richardson, TX 75082-4401 Phone: 877-262-3473 steven.bohn@armor.com www.armor.com The leader in active cyber defense, Armor offers customer-centric security outcomes for retail and eCommerce enterprises, healthcare organizations, payment leaders and financial institutions. Armor protects highly sensitive data for the most security-conscious companies in the world. With its proven cybersecurity approach and proprietary cloud infrastructure built specifically for security, compliance and performance, responsible businesses choose Armor to reduce their risk.

Prism Hotels & Resorts 14800 Landmark Blvd., Suite 800 Dallas, TX 75254-7506 Phone: 214-257-1038 jina.luman@prismhotels.com www.prismhotels.com Founded in 1983, Prism Hotels & Resorts has grown to become an award-winning hotel management, investment and advisory services company. Prism is uniquely poised to handle any scenario a lender may face in gaining control of their hotel collateral. While receivership and foreclosure are preferred options, if the borrower files bankruptcy, Prism can serve in the role of CRO or collaborate with a trustee to manage the hotel until it is sold.

SOLE Financial 1675 SW Marlow Ave., Suite 330 Portland, OR 97225-5105 Phone: 503-730-4395 lindsay.wilson@solepaycard.com www.solepaycard.com A 12-year veteran in the payroll card industry, SOLE® Financial offers the SOLE Visa® Payroll card, which allows unbanked and underbanked cardholders instant and free access to their hard-earned pay, while eliminating the expenses of paper payroll checks for employees and employers alike.

Brick-and-mortar banks have seen an increased need to offer a paycard, but face an uphill battle when it comes to implementing the product in-house. By partnering with SOLE, financial institutions are able to offer the SOLE paycard to their commercial accounts in need of a paycard solution, while continuing to focus on their traditional banking services.

SOCIAT AS

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Computer Transition Services Inc. 3223 S. Loop 289, Suite 556 Lubbock, TX 79423-1370 Phone: 806-793-8961, ext. 222 dbaucum@ctsinet.com www.ctsinet.com Computer Transition Services Inc. (CTSI) is an IT consulting firm with more than

30 years of experience in the financial industry. CTSI provides customized technology solutions for community banks, including security, business continuity, disaster recovery and best practices to support desired business outcomes. Our highly trained team utilizes strategic IT planning to help you meet your longterm business goals.

ME

MBER

TBA calendar of events Ap r il 5 7-8

Board of Directors update call Bankers Legal Conference, San Antonio

M ay 4-6

132nd Annual Convention, Grapevine

Ju n e 1 1 2 13 14 15 16

TBA Board member orientation, Austin TBA Executive Committee meeting, Austin TBA Board of Directors meeting, Austin 2016 Texas Tour, McAllen, Corpus Christi and Victoria 2016 Texas Tour, San Angelo, Abilene and Midland 2016 Texas Tour, Lubbuck, Amarillo and Fort Worth 2016 Texas Tour, Dallas, Sugar Land and The Woodlands

@TEXASBANKERS

TEXAS BANKING • APRIL 2016

23

INDUSTRYNEWS 75 years of serving the San Antonio area

On Feb. 23, Broadway Bank celebrated its 75th anniversary with a special employee event. On hand to deliver a TBA Board proclamation was Executive Vice President John Brigance, who presented the document to Chris Cheever, Suzanne Goudge and Jim Goudge. In addition to serving breakfast, cutting a commemorative cake and firing a confetti cannon, San Antonio Region President Pam Parish presented the Values in Action award to Luanne Long for her contributions to the flood victims in Wimberley.

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TEXAS BANKING • APRIL 2016

TBA PROFESSIONAL DEVELOPMENT TBA Schools & Conferences SCHOOLS Compliance School

CONFERENCES Agriculture & Rural Affairs

Annual Convention

April 17-22, San Antonio

April 6-8, Fort Worth

CFO Conference

Compliance Update School

TBA Bankers Legal Conference

June 8-10, Lost Pines

April 19-20, San Antonio

BSA/AML Compliance School April 7-8, San Antonio

May 4-6, Grapevine

Senior Management Summit July 13-15, San Antonio

June 13-15, San Antonio

April 2016 Introduction to Consumer Lending Webinar

Ag Loan Documentation Webinar 18 1:30-3:30 p.m.

Notary Training 4 1:30-3:30 p.m. (Part 1) Webinar

11 1:30-3:30 p.m. (Part 2)

Morale & Motivation for Supervisors Webinar 5 1:30-3:30 p.m.

Oil & Gas Lending Webinar 6 1:30-3:30 p.m.

FFIEC Statement on Cyber Extortion Webinar 7 1:30-3:30 p.m.

Opening Business & Fiduciary Accounts Webinar

Commercial Loan Documentation Webinar 3 1:30-3:30 p.m. (Part 1) 4 1:30-3:30 p.m. (Part 2)

19 1:30-3:30 p.m. (Basic) Managing in the Middle Webinar 26 1:30-3:30 p.m.

(Advanced) 5 1:30-3:30 p.m.

ACH Risk & Compliance Webinar 20 1:30-3:30 p.m.

(Risk Management) 28 1:30-3:30 p.m.

(Compliance)

Third-Party Management Webinar

Check Handling Do’s & Don’ts Webinar 6 1:30-3:30 p.m.

Small Business Lending Webinar 9 1:30-3:30 p.m. (Part 1) 16 1:30-3:30 p.m. (Part 2)

21 1:30-3:30 p.m.

CRA Review & Update Introduction to Internal Audit Webinar Webinar 10 1:30-3:30 p.m.

22 1:30-3:30 p.m. (Part 1) ACH Operations 25 1:30-3:30 p.m. (Part 2) Webinar 8 1:30-3:30 p.m. (Part 1) 29 1:30-3:30 p.m. (Part 3) 11 1:30-3:30 p.m. (Part 1) 15 1:30-3:30 p.m. (Part 2) Universal Banker: A New 19 1:30-3:30 p.m. (Part 2) Adverse Action Staffing Model 24 1:30-3:30 p.m. (Part 3) Webinar Webinar 12 1:30-3:30 p.m.

Dissection of Malware 27 1:30-3:30 p.m.

10 Traps to Avoid on the Frontline Webinar 13 1:30-3:30 p.m.

Focus on Appraisals Webinar 14 1:30-3:30 p.m.

(Residential)

All webinars are Central Time Zone

Real Estate Loan Documentation 27 Dallas 28 San Antonio

May 2016 ERM for Community Banks Webinar 2 1:30-3:30 p.m.

Webinar

12 1:30-3:30 p.m.

Advanced Cash Flow Analysis Webinar 13 1:30-3:30 p.m.

(CRE) 20 1:30-3:30 p.m.

(Global)

All featured ABA courses are facilitated online courses. Course lengths vary from five to 16 weeks and are noted for each course. For full descriptions and a list of self-paced online courses, please visit our website at www.texasbankers.com. Email aba@texasbankers.com with questions.

April 2016 Analyzing Financial Statements 4 16 Weeks

Managing Interest Rate Risk 4 8 Weeks

Consumer Lending 11 16 Weeks

General Accounting 11 16 Weeks

Principles of Banking 11 16 Weeks

Basic Administrative Duties of a Trustee 18 5 Weeks

Marketing Financial Services 18 16 Weeks

Principles of Banking Accelerated 18 10 Weeks

Law and Banking: Applications 25 16 Weeks

Money and Banking 25 16 Weeks

Principles of Banking 25 16 Weeks

Supervisor Certificate 25 16 Weeks

May 2016 Analyzing Financial Statements 2 16 Weeks

General Accounting 2 16 Weeks

Consumer Lending 9 16 Weeks

Economics for Bankers 9 16 Weeks

Law and Banking: Principles 9 16 Weeks

Principles of Banking 9 16 Weeks

Commercial Lending 16 12 Weeks

@TEXASBANKERS

TEXAS BANKING • APRIL 2016

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PARTNERFOCUS Increase efficiency and profitability CASH Suite™, a Wolters Kluwer solution, is an end-to-end commercial lending system that enables the origination, analysis and underwriting, presentation, closing, servicing and portfolio management of commercial loans. Its integrated set of applications are designed to drive efficiencies and accuracy across the banking enterprise, while providing the flexibility to originate, fund and manage credits ranging from streamlined small business loans to complex commercial real estate deals.

The industry-leading analytic capabilities with CASH Suite are driven by Wolters Kluwer Financial Services’ flagship applications, CASH Insight and CRE. CASH Suite’s features include: • Comprehensive spreading tools

•

•

•

•

•

for business and personal financial statements, tax returns, commercial real estate and projections.

More than 30 industry templates and analyses for businesses, individuals, non-profits and special purpose entities.

Ratio and trend analysis, Uniform Credit Analysis cash flow, standard and custom covenant monitoring and calculations.

Global cash flow analysis that is efficient, accurate and seamlessly resides in the program.

Custom analysis and calculations that allow users to create templates unique to their market, customer profiles and analytical preferences.

Comparisons to industry analytical data provided annually by the Risk

Management Association.

• Stress testing and sensitivity analysis at the borrower and portfolio level with sorting and grouping capabilities.

• Analysis, monitoring and reporting of commercial real estate collateral.

To learn more about how CASH Suite can help grow your commercial lending portfolio, please visit www.WoltersKluwerFS.com/CASH. Wolters Kluwer is a TBA endorsed partner providing compliance forms and software for financial institutions.

Lynne Pearce 800-397-2341 lynne.pearce@wolterskluwer.com

Easing the vendor management burden

26

From the flood of new regulatory requirements to the sheer volume of vendor relationships — more than 100 at the average community bank — vendor management has become an onerous and time-consuming task.

heavy lifting and provide guidance on compliance so that you can focus on your bank’s most pressing needs.

But it doesn’t have to be.

Nvendor can help you:

Ncontracts’ flagship vendor management solution, Nvendor, is streamlining third-party vendor management compliance at more than 600 financial institutions — reducing risk and cutting costs in the process.

We’re helping banks replace manual systems of spreadsheets and emails with a complete vendor management solution backed by an expert team of legal, compliance and IT professionals. From the expert analysis of your bank’s vendor agreements to customized tools and dashboards, Nvendor touches every aspect of vendor management. We manage the

• Reduce internal expenses. Make your institution more efficient by dedicating fewer resources to vendor management. Nvendor’s team of contract specialists and compliance experts monitor regulations and vendors, including their financial state, cybersecurity procedures and business continuity plans, so your staff doesn’t have to.

• Mitigate risk. Make insightful decisions and demonstrate due diligence to regulators with executive summaries prepared by Ncontracts’ experts. We collect and analyze all FFIEC-required

TEXAS BANKING • APRIL 2016

documents and simplify them into a single-page summary to help you assess vendor risk.

• Cut vendor costs. Never unintentionally auto-renew a contract or overpay a vendor again. Nvendor examines agreements for key provisions and deadlines to help you proactively negotiate agreements before notice dates, prevent noncontractually based price increases and monitor service level agreements. On average, our clients’ non-interest income expenses are 33 percent lower than their industry peers.

NContracts is a TBA endorsed partner providing vendor and contract management solutions for financial institutions.

Cathy Isaacs 615-981-8258 cathy.isaacs@ncontracts.com www.ncontacts.com

TBA endorses 100+ products and services needed by banks for day-to-day operations that enhance customer experience, increase revenue, ensure regulatory compliance and security, and assist with employee retention. With TBASCO’s reputation for integrity and thorough due diligence, banks can trust TBA endorsed solutions.

Contact Wanda Stevens at 800-462-7295 tbasco@texasbankers.com | www.texasbankers.com/tbasco

COMMUNITY BANKER SPOTLIGHT

East Texas banker finds home in Longview KATHYTITTLE PRESIDENT & CEO COMMUNITY BANK, LONGVIEW

1

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4 5 PHOTOS LEFT TO RIGHT: 1 Tittle’s son, Christopher, and granddaughter, Trista, celebrate after Trista took first place at a cheer

6

2 Tittle spends a day with her grandsons — Tanner and 3 Tittle often attends her grandsons’ baseball and football games. 4 The “granddogs,” Sadie and Spike, have a photo with

competition.

7

Tucker.

prominent placement on Tittle’s desk along with photos of her grandchildren.

5 Tittle, her son, Kyle, and his wife, Emily, take in a 6 Tittle prepares

baseball game in Seattle vs. the Texas Rangers.

before visiting the Texas delegation on Capitol Hill at the ABA Government Relations Summit.

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TEXAS BANKING • APRIL 2016

7 Tittle and Kyle in Seattle.

k

Kathy Tittle, president and CEO of Community Bank, Longview, didn’t settle down too far from her hometown. She grew up in Daingerfield, 45 miles north of Longview.

“It was really great,” Tittle says of growing up in Daingerfield. “Lone Star Steel employed several thousand people back in the 50s on up until the 80s. It was a thriving place, I really enjoyed it.”

Tittle’s father worked for the railroad and her mother was mostly a homemaker until Tittle and her younger sister were teenagers.

Tittle got her first start in the professional world while in high school.

“When I was in high school, we had vocational office education. When you were a junior or a senior you went to school until noon or 1 o’clock, and then gained office experience in the afternoons.” Tittle worked for Brabham Insurance Agency in the afternoons. At that time, I wanted to be a secretary.

After graduating from Daingerfield High School in 1971, Tittle left her hometown to attend the University of Texas at Arlington. Tittle also attended school at North East Texas Community College in Mt. Pleasant.

She attended UT-Arlington for a year before getting married in 1972.

Tittle moved around a lot while her now ex-husband was in the military before they returned to Daingerfield.

“When my ex-husband got out of the military and we moved back to Daingerfield, I got my job back at the insurance agency.” The same agency Tittle worked at while in high school.

Through the course of a number of years at the insurance agency, Tittle became acquainted with Billy Gibson, chairman of the board of the Lone Star State Bank. In 1987, Gibson hired Tittle to work for the bank.

Her first job was loan secretary but Tittle got the chance to learn other areas of banking.

@TEXASBANKERS

“I always liked to learn new and different things and Mr. Gibson gave me the opportunity to learn as much as I wanted.” In 1992, Gibson purchased Community Bank in Longview and Tittle helped with the application process.

After the application was approved, Gibson asked Tittle to be executive vice president at the newly acquired bank in Longview.

Banking in Longview In 2010, Tittle was promoted to president and CEO of Community Bank.

The bank is locally owned and has six locations.

Tittle is proud of the bank’s mortgage portfolio — they have a lot of customers who are first-time home buyers and the bank generates and keeps all of their loans in house.

“People don’t have to wait a week to hear back from a loan committee,” Tittle says. “We do abide by rules and regulations but we don’t make it harder than it needs to be.”

Tittle also says just because you’re a square peg and don’t fit in that round hole, that doesn’t mean you don’t deserve to get a mortgage.

“A lot of people that grew up here come back here, it’s just a nice place to live,” she says. Longview is between Dallas and Shreveport, La. Community Bank staff stay involved in Longview through the Rotary Club, chamber of commerce, Junior Achievement and the American Heart Association, among others.

Recently, Tittle presented a banksponsored Amtryke (a therapeutic tricycle for people with disabilities) through AMBUCS. AMBUCS provides mobility for people with disabilities.

TBA involvement Community Bank has been taking advantage of TBA education, particularly webinars and seminars, for

years. “They’ve been excellent training for all of our staff, myself included,” Tittle, who is set to join the TBA board of directors, says. “I get the Weekly, I like the Compliance hotline question. I read it every time.”

Tittle first got introduced to TBA through Billy Gibson, a former board member.

Life outside of banking Tittle has two sons. The oldest lives in Longview and is married with three children. Tittle’s youngest lives in Austin, is married and they have two dogs.

“So I have three grandchildren and I call the dogs my granddogs,” she says laughing. “Believe it or not their picture is on my desk along with the three kids.”

“The oldest grandchildren are two boys and they play baseball and football so I go watch them almost every weekend. My granddaughter performs competition cheer,” Tittle says. “I am blessed to be able to live close to them and be involved in their activities.” She likes to travel and is into music but being with family is her preferred use of free time.

Who is your hero?

My dad What is your favorite book?

John Grisham and Danielle Steel novels What is your favorite movie?

“Groundhog Day” What is your favorite sports team?

Texas Longhorns What is your favorite quote?

“Do unto others as you would have them do to you.” The Bible

TEXAS BANKING • APRIL 2016

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DONNYPALMER TBA MEMBER RELATIONS OFFICER BANKER TO BANKER

o

Banking in the Bend

Occasionally, it is fun to relate some of the details of my travels around Texas. A recent trip to the Big Bend area of the state was certainly fun and interesting. It had been a while since I had traveled the area and, since my wife Patty has retired from teaching, she agreed to join me on this trip. The Big Bend part of Texas offers some of the most scenic vistas in the state and provides some specific banking needs. Patty was not disappointed on her first trip to this part of Texas.

There are several trails, like the Trans Pecos and Texas Mountain Trail, that can be used as a way to explore the area. Some of the highways cover the same ground that stagecoaches used to travel on their route from San Antonio to California. Van Horn provided a glimpse into a major crossroad community that today still serves as a mecca for motels, restaurants and tourist activities.

Marfa, home to the Marfa Lights, started out as a railroad stop that became a trading center. Big Bend Banks was chartered in 1907 and continues today as a major spoke in the hub of activity in Presidio County where the population is around 2,000.

Clay Slack and Chip Love have managed the bank for many years.

We stayed at the Hotel Pisano, famous for hosting the stars of the movie “Giant,” which was filmed in 1956. The film was selected for preservation in the United States National Film Registry by the Library of Congress for being “culturally, historically or aesthetically significant.”

Marathon provided a unique opportunity for some peace and quiet as the historic Gage Hotel does

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TEXAS BANKING • APRIL 2016

Sometimes a little sightseeing is appropriate as I travel the state.

not provide radios or TVs. The hotel also boasts a five-star eatery, the 12 Gauge Restaurant. The food and libations there and at the White Buffalo Bar were tops. The Marathon Branch of TransPecos Banks is an anchor for the short, downtown stretch along State Highway 90.

Fort Davis is aptly named since it was established in 1854 as a functioning guard for the stage line from San Antonio to El Paso. Another historic hotel, The Limpia, is a great place to stay and dine in this small community.

Zach Dean is the president at Fort Davis State Bank, which was charted

Welcome new member TBA is proud to welcome this new member to our Texas Banking family:

First Bank & Trust Darrell W. Adams President & CEO 201 N. Washington St. Seymour, TX 76380-2123 Phone: 940-889-3113 www.fbtseymour.com

in 1911. Since this is a fairly remote location, the bank utilizes many of our TBA webinars as a major source for continuing employee training. As the home of the University of Texas McDonald Observatory at Mount Locke, the city and bank provide many services that a tourist community must be prepared to deliver.

Another military installation at the crossroads of the Old San Antonio Trail and the Comanche War Trail is the city of Fort Stockton. Dan Frank is the president of First National Bank of Fort Stockton, which was chartered in 1958. Down the street is The Pecos County State Bank where George Hansard serves as president.

This bank’s roots date back to 1928.

Most of these banks are off the beaten path and the communities they support offer a much slower pace of life with some unique needs.

But banking is still banking regardless of the locale and circumstances … some are just a lot more peaceful and scenic! donny@texasbankers.com

JOHNHEASLEY TBA GENERAL COUNSEL YO U R A DV O C AT E

Promises, promises: Why DFA reform is a tough haul this year

o

On March 15, 83 Texas bankers, including 28 first-timers, stormed Capitol Hill to meet with 33 of our 36 members of Congress and Sen. John Cornyn. The bankers reported that all of the meetings went well.

There seems to be a bipartisan consensus that after five years and seven months, the Dodd-Frank Act is doing more harm than good for community banks. One Houston Democrat on the Financial Services Committee spent more than an hour with visiting bankers discussing regulatory burden and the issue of how to define a community bank. The message from several of the Republican members of the Texas delegation was that we need to enlist the support of bank customers who have been adversely affected by DFA. Texan Jeb Hensarling told our group that he would again be bringing some regulatory relief measures to the House floor. The House Financial Services Committee chairman, under the direction of Speaker Paul Ryan, is working with other committees to pass measures that are designed to show what responsible, conservative policies would look like in contrast to what federal policies have been for the last seven and a half years.

Hensarling’s proposals may be too ambitious while a Democrat is in the White House. A rifle shot approach on several issues might be better. On March 16, Senate Banking Committee Chairman Richard Shelby told the 1,000 ABA community

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bankers from around the country that he will again be working on regulatory relief and said that he may need to use the appropriations process to get it done. Of course, he made similar claims last year and no real relief came in the appropriations bill.

To get an understanding of how, from our Texas perspective, simple and reasonable requests for reg relief can get stymied you need to look at the polarization that exists between Republican and Democratic elected officials.

A perfect example of this occurred while we were in D.C. Republican Blaine Luetkemeyer of Missouri serves on the Financial Services Committee. Luetkemeyer is an advocate for community banks. He was on an ABA panel on March 16 with a Senate Banking Committee Democrat and a House Financial Committee Democrat.

After some initial sparring about who was responsible for the disruptions at Trump rallies, the panel discussed pending legislation.

Luetkemeyer mentioned that Massachusetts Sen. Elizabeth Warren was the biggest obstacle and called her the “Darth Vader of the financial services world.” One Politico reporter tweeted his comment that bankers should “find a way to neuter” Elizabeth Warren.

Her response did not take long.

Because I follow everything about Elizabeth Warren I received an email the next day. It was a fundraising

request from Elizabeth Warren for Senate. In the email, she said that she had always viewed herself as more of a Princess Leia type and that the Force was clearly not with Congressman Luetkemeyer. She also stated that his comments were to a room full of “Wall Street bankers.”

There was not a Wall Street banker within 100 miles of that meeting. In bold type she made the following statement: “Luetkemeyer probably thinks that he’ll make big bucks from his Wall Street friends off of his sexist remarks. So how about we push back in the way that the Congressman and his Wall Street buddies understand: It’s a big goal — but can we match the $50,000 that the American Bankers Association has given Blaine Luetkemeyer? Please chip in whatever you can afford right now.”

You see what she is doing? In a Bernie Sanders fashion she has taken remarks made to community bankers in an attempt to raise money to fight the Sith Lords of Wall Street.

TBA bankers are not giving up the fight. We continue to advocate legislation that will allow QM loans to be held in portfolio, allow for regulations to be tailored to the size of the bank, allow banks to appeal regulatory decisions and limit the scope of Basel III. We cannot give up the fight. The November elections will determine the future of the banking industry more than any election since the 1930s.

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JENNIFERKIRBY COMPLIANCE SPECIALIST, COMPLIANCE ALLIANCE COMPLIANCE HOTLINE

All about TRID construction lending

i

If you missed CFPB’s TRID Construction Lending Webcast, don’t worry, we listened for you. Here’s a little bit of what we learned.

Loan purpose waterfall approach

Compliance Alliance has received a lot of questions about the purpose disclosed on the Loan Estimate for construction loans. If loan proceeds will primarily be used to finance construction cost, the loan purpose should always be Construction, right? Not always. We learned from the webcast that the use of proceeds to finance construction cost does not by itself impact the disclosure of the loan purpose on the Loan Estimate.

Section 1026.37(a)(9) defines four possible loan purposes in the following waterfall order: • Purchase • Refinance • Construction • Home equity loan When determining which purpose to disclose, the creditor must look at the waterfall of four possible purposes in the order that they appear in section 1026.37(a)(9) and select the first one that applies to the loan.

To illustrate the use of the waterfall: If the loan meets the definition of Purchase because the consumer intends to use the loan to purchase the property that will secure the loan, the creditor must disclose the purpose as Purchase even if the loan also meets any other definitions

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TEXAS BANKING • APRIL 2016

appearing later in the waterfall.

If the loan does not meet the definition of Purchase, but meets the definition of Refinance because the consumer intends to use the loan to satisfy an existing obligation already secured by the real property, the creditor must disclose the purpose as Refinance even if the loan also meets other definitions appearing later in the waterfall.

If loan proceeds will primarily be used to finance construction cost, the loan purpose should always be Construction, right?

Not always.

If the loan will be used to finance the initial construction of a dwelling on the property and will not be used for any purchase or refinance purposes, the creditor must disclose the purpose as Construction.

Here are some common questions that we have received and our analysis based on what we learned using the waterfall approach.

1. What purpose is disclosed when a consumer finances the purchase of land and construction costs? If the loan will be used to finance both the purchase of land and construction cost, the loan purpose must be disclosed as Purchase on the Loan Estimate.

2. What purpose is disclosed when a consumer owns the land and finances only the construction costs? If the loan will be used to finance the initial construction of a dwelling and not for the purchase of land or the refinance of an existing mortgage, the loan purpose must be disclosed as Construction on the Loan Estimate.

3. When separate sets of disclosures are provided for the construction phase and permanent phase, what purpose is disclosed for the permanent phase? The creditor must disclose Refinance for the purpose of the permanent phase. When each phase is disclosed and considered as a separate transaction and the proceeds of the permanent transaction satisfy the outstanding balance due at the conclusion of the construction phase, the credit meets the definition of a Refinance purpose.

How to disclose construction holdbacks Compliance Alliance has received

multiple questions from members asking us how construction holdbacks are handled and how should they be disclosed on the Loan Estimate. There is no direct guidance on this issue in the rule or any commentary, but the CFPB provided an analysis during the webcast.

A construction holdback is referred to in the webcast as a portion of the loan proceeds that is placed in or designated to a reserve or other account at consummation.

Based on the CFPB’s analysis of the rule, a construction holdback amount can be separately itemized in Section H (other) of the Loan Estimate and labeled “Construction Holdback” if that is what it is called under the terms of the legal obligation. If the amount to be disclosed is not given a specific label in the legal obligation, it may be labeled using some other term, which clearly and conspicuously reflects the purpose of the proceeds.

loan amount disclosed pursuant to §1026.37(b)(1). If the result of the calculation is a positive number, that amount is disclosed as a negative number under §1026.37(h)(1)(ii), but only to the extent that it does not exceed the total amount of closing costs disclosed under §1026.37(g)(6). If the result of the calculation is zero or negative, the amount of $0 is disclosed under §1026.37(h)(1)(ii).”

The CFPB suggests by factoring the construction holdback amount, as one of the payments to third parties not otherwise disclosed in the Loan Estimate, there is an effect on

the remainder of the cash to close table, which will result in an accurate disclosure. The calculation of the closing costs to be financed affects the calculation of the “funds to the borrower.”

The end result, according to the CFPB, is that the cash to close box will accurately reflect the amounts the parties are actually responsible for at closing as a result of the loan agreement and the parties’ legal obligations.

If you have any questions about construction loans and TRID disclosures, please don’t hesitate to contact us — 888-353-3933 or info@compliancealliance.com.

Construction holdbacks can also be disclosed in cash to close as an alternative If the creditor does not disclose construction holdback amounts in Section H (other) of the Loan Estimate, the entire construction cost, including the holdback amount, can be factored into the Calculating Cash to Close table in accordance with 1026.37(h)(1)(ii). Let’s look at the commentary to 37(h)(1)(ii) which advises how to calculate “closing costs financed”: Comment 37(h)(1)(ii)-1 1. Calculating amount. The amount of closing costs financed disclosed under §1026.37(h)(1)(ii) is determined by subtracting the estimated total amount of payments to third parties not otherwise disclosed pursuant to §1026.37(f) and (g) from the total

@TEXASBANKERS

TEXAS BANKING • APRIL 2016

35

BANKPEOPLE DALLAS

TIB-THE INDEPENDENT BANKERSBANK Travis Brooks to first vice president/assistant manager for specialized lending.

Debra Sickler to first vice president/communications and marketing.

FORT WORTH

ORIGIN BANK Curtis Hamilton to senior vice president, commercial banking manager.

SOUTHSIDE BANK David Stout to vice president, relationship manager for the North Texas region.

Matt Zohfeld to senior vice president, regional sales manager, mortgage for the North Texas region. Jeremy Dean to vice president, mortgage secondary and technology manager.

Curtis Hamilton

David Stout

Matt Zohfeld

Jeremy Dean

Kelly Brechel, MAI

Joelda Mendez

Melissa Rodriguez

Phillip Carey

SOUTHWEST BANK Kelly Brechel, MAI, to vice president-appraisal manager.

MIDLAND

COMMUNITY NATIONAL BANK Joelda Mendez, Melissa Rodriguez and Phillip Carey to assistant vice presidents.

Send your promotions and new hire notices to olivia@texasbankers.com

INDEX TO ADVERTISERS For information on advertising in Texas Banking magazine, please email advertising@thewarrengroup.com Company Name American Bankers Association BKD LLP First72 Cyber FTN Financial Hollerbach & Associates, Inc. J.B. Lloyd & Associates Kansas Bankers Surety Ncontracts Pentegra Retirement Services Phase Engineering Prism Hotels Q2 Software, Inc. Sentry Manangement Inc. Texas Bankers Insurance Agency Vantiv

Phone

Website

Page

1-800-BANKERS 713-499-4600 501-492-8441 800-456-5460 210-226-2556 800-964-0360 785-228-0000 888-370-5552 800-872-3473 x9559 800-419-8881 214-257-1039 512-560-3674 800-677-8606 800-318-4142 214-762-5257

www.aba.com www.bkd.com www.first72cyber.com www.ftnfinancial.com www.hollerbach.com www.lloyd-ins.com www.kbsforbanks.com www.ncontracts.com www.pentegra.com www.PhaseEngineering.com www.fishingforsolutions.com www.Q2ebanking.com/one-TBA www.sentrymanagement.com www.texasbankersinsurance.com www.vantiv.com/financialinstitutions

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Social Media continued from page 19 Not only will it help with the immediate task at hand, but over time you’ll be much more efficient as you continue “cutting trees� in the social networking forest. Another variation of this is “work smarter, not harder� and by having the right tools to make the process more efficient, you’ll get more done in less time (and may even have fun doing it).

Building your digital toolbox and getting started Thanks to the smartphone, we have powerful apps and tools at our disposal to help stay engaged, discover awesome content to share and easily interact with others. In fact, statistics show that if someone is active on social media, there’s a good chance they are active via their mobile device!

While all of the big social networks have their own apps, I’m also a big fan

of apps that help add value to the Facebook, Twitter and LinkedIn experience. The three that I recommend you should start with are: Flipboard, Nuzzle and Buffer (and all have great desktop versions at www.flipboard.com, www.nuzzle.com and www.buffer.com).

If you’re looking for interesting content on banking, business strategy local news or maybe even sports and entertainment, Flipboard and Nuzzle are great. You can follow topics, see what your connections are sharing and then “dig it� to get even more detailed information on an article or topic.

From these apps, you can then share with the touch of a finger to your social network sites, allowing you to share content and start to provide information that your connections will be interested in reading. The more thought you put into what you share, the better chance you’ll be able to develop your influencer reputation with your connections!

WORKING With Community Banks as Part of Their Management Teams

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Sentry’s decades of experience in the banking industry helps clients navigate new regulations and allows the Bank more time to focus on other profit centers.

Consistency: Our portfolio managers have more than 90 years combined experience serving the banking community and our average client has utilized Sentry for close to 14 years. We provide proven: s Custom investment programs/A/L strategies s IRR Management/Third Party Support s Objective Regulatory Support

Objectivity Sentry Management is a Fee-Based only, SEC registered investment adviser (RIA). Strategies and investment programs are developed with each bank’s involvement and approval. While brokers have a direct conflict of interest due to the price mark-up on bonds sold to a bank, SMI objectively utilizes over 50 broker dealers to ensure our clients receive superior national coverage, access to all eligible bank investments and optimal investments at the best price.

In a period of shrinking margins and increased regulation, Sentry can provide your bank with unbiased support and work as your partner to become more efficient in an area that can impact 20-50% of the bank’s income. Contact us today for a free consultation and find out how we can be of help to your management team.

Buffer provides an easy way to then take this content and quickly share it with several of your social networks at the same time. For example, when I find a great article that I think my connections would be interested in reading, I can get it into my “stream� on Facebook, Twitter and LinkedIn with one click. Buffer even automatically schedules when the post is published to my networks, which is great if I’m doing some reading during off hours but want the information to appear when my connections will likely be online and see it.

So now you have some suggestions for tools to help you find and share content, but only after you’ve spent time listening to your audience and what they want to hear.

Remember, it’s not about YOU, it’s about THEM. You want them to see information from you that puts them first, which will build your credibility and help enhance relationships much faster than if you were simply sharing your bank’s promotions.

And if you need any handholding as you get rolling along, don’t be afraid to reach out and ask for help.

One of the things that you’ll find is that people who do it well like to share what they know and help others (myself included), so reach out and just ask. You might be surprised where your social networking efforts will take you and six months from now who knows how social you will be!

Let’s connect!

If you’d like to connect, ask questions and learn more about taking your social networking efforts to the next level, I’d love to hear from you and help in any way I can! www.facebook.com/ecook www.twitter.com/ericcook www.linkedin.com/in/ericcookmba Eric Cook is a “recovering banker� of 15 years turned digital strategist and award-winning web designer with WSI, the world’s largest network of

1-800-677-8606 s !SSET AND ,IABILITY 0RICING AND 3TRUCTURE 3TRATEGIES s !SSET 2ESTRUCTURING 3TRATEGIES )NVESTMENTS ,OANS s )NTEREST 2ATE 2ISK -ANAGEMENT -EASUREMENT $YNAMIC AND #OMPUTER $OWNLOADS s )NVESTMENT -ANAGEMENT s 0OLICIES s %DUCATION 4RAINING 3EMINARS

digital marketing professionals. A two-time contributing author of the best-selling book Digital Minds: 12 Things Every Business Needs to Know About Digital Registered Investment Adviser (RIA) with the SEC and MSRB #5 Eureka Circle, Suite E ‹ Wichita Falls, TX 76308 Fax (940) 696-2810 ‹ www.sentrymanagement.com

Marketing, he routinely works with community banks around the country helping with their online strategy, social media utilization and enhancing their digital presence. www.PoweredByWSI.com

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TEXAS BANKING • APRIL 2016

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With more than 70 years of experience built working with banks like yours, Pentegra can help you design a retirement plan and benefits financing solution that helps improve your bottom line while positioning your bank to attract, reward and retain the talent key to your success—to help your bank strengthen its competitive advantage.

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Don’t be caught by surpris i e.

F ir s t 72 Cy b e r c a n p r o v i d e y o u w i t h a r o a dma a p o f yo u r r i s k s .

M ee t r e g u l a t or y e x p ec t a t i on o s w i t h o u r Cy be e r A s ses s m e n t To o l or d i g dee p e r w i t h ou r Cy be b rR i s k 3 D p r od u c t .

O n e I n f o r m a t i o n W a y, S u i t e 4 0 5 | L i t t l e R o c k , A R 7 2 2 0 2 5 0 1. 4 9 2 . 8 4 41 | f i r s t 7 2 c y b e r. c o m Stop by our booth at the Texas Bankers A ssociation meeting or hear direc tly from our founder, Greg Schaef fer, who will be speaking at the conference.