Calling All Bank Directors

On October 24, 2023, the federal banking agencies adopted a new Community Reinvestment Act (CRA) regulation that revolutionizes the obligations of banks with assets of $600 million or more. On this episode of Calling All Bank Directors, our guest Ken Thomas, a leading expert in CRA for many years, explains what boards of directors can do to support compliance with the new regulation. AABD recorded this podcast episode prior to the filing of a lawsuit by various bank trade associations. Unless the regulation is overturned or withdrawn by the agencies, bank boards and management of banks of $600 million or more will face huge challenges. Ken is the president and CEO of Community Development Fund Advisors and author of the seminal book on CRA. He taught at Wharton Business School for 42 years and serves on the Board of Directors of a community bank. ***** Thanks to our guest, Ken Thomas: https://www.communitydevelopmentfund.com/about/  Calling All Bank Directors is the podcast of the American Association of Bank Directors. AABD has been your advocate since 1989 and our podcast, hosted by AABD President David Baris, is designed to keep you well informed to help protect both you and your bank. Questions? Contact [email protected].

On October 24, 2023, federal banking agencies adopted a new Community Reinvestment Act (CRA) regulation that revolutionizes the obligations of banks with assets of $600 million or more. The rule will move banks away from the original intent of CRA, which was to encourage banks to meet the credit needs of their low to moderate income communities. In this episode of Calling All Bank Directors, Ken Thomas, a leading expert in CRA for many years, explains what the regulation says and what has changed from the old rule. He believes that the new rule will result in nearly 10 times the number of failing banks – from just over one percent to around 10 percent. AABD recorded this podcast episode  prior to the filing of a lawsuit by various bank trade associations Ken Thomas is the president and CEO of Community Development Fund Advisors and author of the seminal book on CRA. He taught at Wharton Business School for 42 years and serves on the Board of Directors of a community bank. ***** Thanks to our guest, Ken Thomas: https://www.communitydevelopmentfund.com/about/  Calling All Bank Directors is the podcast of the American Association of Bank Directors. AABD has been your advocate since 1989 and our podcast, hosted by AABD President David Baris, is designed to keep you well informed to help protect both you and your bank. Questions? Contact [email protected].

The recent failures of Silicon Valley Bank, Signature Bank, and First Republic Bank have upped the ante for your next examination. Expect it to be rigorous and searching for opportunities to take enforcement action against your bank, directors, and officers. Banking agencies have ramped up their review of bank liquidity, investments, and asset/liability management (ALM) in response to the failures and a flood of enforcement actions is anticipated. To help banks and their boards of directors and officers prepare, host David Baris is joined by David D. Gibbons to discuss preparing for your next examination. David Gibbons has extensive financial services experience with a unique blend of public and private sector experiences as a senior bank regulator, a practicing Chief Risk Officer, a financial services risk management and regulatory advisor, and a testifying expert. He serves as a member of AABD’s Task Force studying how a bank director’s risk of personal liability may be mitigated consistent with safe and sound banking. ***** Thanks to our guest, David Gibbons: https://daviddgibbons.com.  Calling All Bank Directors is the podcast of the American Association of Bank Directors. AABD has been your advocate since 1989 and our podcast, hosted by AABD President David Baris, is designed to keep you well informed to help protect both you and your bank. Questions? Contact [email protected].

In this episode, host David Baris is joined by Troutman Pepper Partners Lori Sommerfield and Chris Willis to discuss changes in fair lending regulation and supervision that represent new challenges to banks and their directors and officers. They are co-authors of the Practical Handbook on Fair Lending for Bank Directors and Executive Officers, 2nd Edition. Lori and Chris identify the important changes that have occurred since the Handbook’s first edition in 2016, including more regulatory emphasis and actions relating to redlining, disparate impact, and redefinition of the statutory term “fair” to include discrimination. At Troutman Pepper, Lori and Chris represent banks, bank directors, and other bank officers in fair lending compliance, enforcement, examinations, and litigation.  ***** Thanks to our guests: Lori Sommerfield: https://www.troutman.com/professionals/lori-sommerfield.html  Chris Willis: https://www.troutman.com/professionals/chris-j-willis.html  Calling All Bank Directors is the podcast of the American Association of Bank Directors. AABD has been your advocate since 1989 and our podcast, hosted by AABD President David Baris, is designed to keep you well informed to help protect both you and your bank. Questions? Contact [email protected].

In this episode, David Baris is joined by Dave Martin to discuss the factors that influence banks to sell, and how the selling bank can plan to maximize its appeal to a buyer and the consideration paid in the transaction. Dave details the essential role that the buyer/seller ratio, which considers the number of potential buyers that exist in the bank’s market, plays in the likelihood that a bank can be sold. He also explains the practical steps that a bank can take to improve its attractiveness and value to a buyer. Dave Martin advises banks on whether it is an opportune time to sell the institution and how to do it. With Mellon and several investment firms, he has represented banks in numerous bank mergers and acquisitions. ***** Thanks to our guest, Dave Martin. Calling All Bank Directors is the podcast of the American Association of Bank Directors. AABD has been your advocate since 1989 and our podcast, hosted by AABD President David Baris, is designed to keep you well informed to help protect both you and your bank. Questions? Contact [email protected].

In this episode of Calling All Bank Directors, Women2Boards Founder and CEO Nancy Sheppard addresses how to go about finding great bank directors.  She identifies specific strategies to tap into a variety of talented and qualified people from a variety of backgrounds, including women, ethnic minorities, and those outside the community or communities served by the bank. Prior to founding Women2Boards, Nancy served for over 20 years as CEO of Western Independent Bankers (now the Western Bankers Association). ***** Thanks to our guest, Nancy Sheppard: https://women2boards.com/  Calling All Bank Directors is the podcast of the American Association of Bank Directors. AABD has been your advocate since 1989 and our podcast, hosted by AABD President David Baris, is designed to keep you well informed to help protect both you and your bank. Questions? Contact [email protected].

In this episode, host and AABD President David Baris is joined by Dr. Ken Thomas, Founder and CEO of Community Development Fund Advisors, to address how proposed CRA regulations, once finalized, can impact your bank. A lot depends on the size of your bank. Banks with assets of $600 million or more will be facing an additional measure of CRA performance (retail lending) and those over $10 billion will have additional challenges. The comment period expires on August 5, 2022. Ken is a leading expert and author of the seminal work on CRA. He taught banking and monetary economics at Wharton for 42 years. He is the Chair of the Nominating and Corporate Governance Committee of a community bank. Community Development Fund Advisors manages the Community Development Fund, which enables banks to invest in CRA-qualified investments. ***** Thanks to our guest, Dr. Ken Thomas: https://www.linkedin.com/in/ken-thomas-2371a8125/  Calling All Bank Directors is the podcast of the American Association of Bank Directors. AABD has been your advocate since 1989 and our podcast, hosted by AABD President David Baris, is designed to keep you well informed to help protect both you and your bank. Questions? Contact [email protected].

In this episode, host David Baris is joined by Bill Boyan, a managing director at Piper Sandler, to address recent trends in bank mergers – including valuations, forms of consideration (stock, cash or a combination), and factors influencing their direction.  Bill will also discuss how banks can make themselves more valuable and attractive to acquirers, and anticipated capital needs and the movement from sub debt to equity. Bill has managed numerous bank mergers and capital raises in his long and successful career. A presentation to accompany this discussion is available here: https://bit.ly/3Pkvxuw ***** Thanks to our guest, Bill Boyan: https://www.pipersandler.com/2col.aspx?id=5777  Calling All Bank Directors is the podcast of the American Association of Bank Directors. AABD has been your advocate since 1989 and our podcast, hosted by AABD President David Baris, is designed to keep you well informed to help protect both you and your bank. Questions? Contact [email protected].

In this episode, host and AABD President David Baris is joined by Jeff Marsico, president and founding shareholder of the Kafafian Group, to address how the common misalignment of executive incentive compensation with the compensation of other bank employees can be injurious to banks' profit goals.  For example, if a loan officer is rewarded for volume and not for the profitability of the loan portfolio, that might lead the officer to sacrifice profitability for volume and act inconsistent with the bank’s efforts to reach ROE goals. As president and a founding shareholder of the Kafafian Group, Jeff oversees and works on all lines of the banking business, with a focus on strategy, profitability, and financial advisory. He has analyzed and facilitated hundreds of strategy development engagements for community financial institutions. ***** Thanks to our guest, Jeff Marsico: https://kafafiangroup.com/team/jeffrey-p-marsico/  Calling All Bank Directors is the podcast of the American Association of Bank Directors. AABD has been your advocate since 1989 and our podcast, hosted by AABD President David Baris, is designed to keep you well informed to help protect both you and your bank. Questions? Contact [email protected].

In this episode, host and AABD President David Baris is joined by Ethan Heisler, who will address the Fed’s timetable on rate hikes and quantitative tightening, the impact of the Fed draining reserves on bank deposit growth and strategies to address it, and questions that bank directors should be asking management on strategy and technology spending. Ethan is the Senior Director for Strategy at Kroll Bond Rating Agency.  He is the Editor of the Bank Treasury Newsletter, a monthly publication directed to financial institutions at the Treasury level. He was a Managing Director in Fixed Income Sales and headed up Citi’s Bank Treasury Resource Group.  Before that, he was the Staff Director of Bank Analysis at the Federal Reserve Bank of New York. ***** Thanks to our guest, Ethan Heisler: https://www.linkedin.com/in/ethan-heisler-58b370119/  Calling All Bank Directors is the podcast of the American Association of Bank Directors. AABD has been your advocate since 1989 and our podcast, hosted by AABD President David Baris, is designed to keep you well informed to help protect both you and your bank. Questions? Contact [email protected].