Maryland Banker 2Q 2011

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With Online Compliance Consulting, you gain access to a Compliance Dashboard that has everything you need to prepare for upcoming compliance requirements:• Unlimited compliance questions to your personal compliance consultant• A review by your personal consultant of the policies and disclosures for new and existing requirements• Semi-annual training for your Board of Directors by your personal compliance consultant• Monthly Compliance Alerts on new requirements with step-by-step compliance directions• A quarterly webinar that will help you organize, prepare, and implement new requirements• A calendar of upcoming regulatory deadlines• A progress tool that helps you manage your upcoming requirements and track your progress as you go• Access to our database of common compliance questions and answers from official regulatory sources• As an additional service, unlimited compliance reviews of your advertisements and website.

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Second Quarter 2011 | 3

15

Chairman J. Scott Wilfong Chairman, President & CEO SunTrust Bank, Greater Washington/Maryland

Chairman-Elect Mary Ann Scully Chairman, President & CEO Howard Bank

Vice Chairman Michael L. Middleton Chairman & CEO Community Bank of Tri-County

Past Chairman C. Richard Miller, Jr. President & CEO Woodsboro Bank

President & CEO Kathleen M. Murphy Maryland Bankers Association

Publication Editor Joanna Bowen Weinreich Maryland Bankers Association

Board of Directors

George J. Behr, Jr.President Arundel Federal Savings Bank

Andrew M. BertaminiRegional President, Maryland MarketWachovia, A Wells Fargo Company

Robert A. DeAlmeidaPresident & CEOHamilton Federal Bank

Ralph W. Emerson, Jr.Senior Vice PresidentM&T Bank

Peter W. Floeckher, Jr.Regional President, Greater MarylandPNC Bank, N.A.

Michael E. HoughDivision President - Maryland DivisionSusquehanna Bank

Michael G. LivingstonPresident & CEOThe Bank of Glen Burnie

Philip E. LoganPresident & ChairmanSlavie Federal Savings Bank

Tom N. RasmussenPresident & CEONew Windsor State Bank

Carissa L. RodeheaverExecutive Vice President & CFOFirst United Bank & Trust

Daniel J. SchriderPresident & CEOSandy Spring Bank

Brantley J. StandridgePresident, Maryland OperationsBB&T

Raymond M. ThompsonPresident & CEOCalvin B. Taylor Banking Company

DirectorsTimothy M. Warren, Chairman Timothy M. Warren Jr., CEO & Publisher David B. Lovins, President Vincent M. Valvo, Group Publisher & Editor in Chief

Finance & aDministrationJeffrey E. Lewis, Controller / Director of Operations

eDitorial Christina P. O’Neill, Custom Publications Editor Cassidy Norton Murphy, Associate Editor

aDvertisingGeorge Chateauneuf, Publishing Division Sales Manager Richard Ofsthun, Advertising Sales ManagerCara Inocencio, Advertising Sales Manager eventsSarah Cunningham, Events DirectorJason Long, Events ManagerEmily Torres, Advertising, Marketing & Events Coordinator

Design & ProDuctionJohn Bottini, Creative Director Scott Ellison, Senior Graphic DesignerEllie Aliabadi, Graphic Designer

©2011 The Warren Group Inc. All rights reserved. The Warren Group is a trademark of The Warren Group Inc. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the publisher. Advertising, editorial and production inquiries should be directed to: The Warren Group, 280 Summer Street, Boston, MA 02210. Call 800-356-8805.

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186 Duke of Gloucester St.Annapolis, MD 21401

410-269-5977 / 800-327-5977www.mdbankers.com

coverfrank Talk about dodd-frank Maryland bankers sound Off on act’s impact

maryland lawmakersdelores G. kelley 04

message from the chairmanWhat do you Value in your Mba Membership? 05

maryland bank services featured partnerWhat’s better than free checking? 06

message from the president Making a Powerful impact 07

economic updatehopeful Outlook on bank lending 11

departments:

news and notes 13members on the move 13mba members in the community 13

Contents

PuBLISHED By

280 Summer Street, Boston, MA 02210

Phone: 617-428-5100 Fax: 617-428-5118 www.thewarrengroup.com

SECOND QuartEr 2011the

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Frank Talk

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4 | The Maryland Banker

Maryland Lawmakers Delores G. Kelley State Senator (D-District 10, Baltimore County) [email protected]

A fter 40 years in higher education

and raising three children, living in New york, Pennsylvania, Virginia and Indiana, and founding one of

Maryland’s two minority-owned banks, there wasn’t much left for Delores Kelley to do – so she ran for public office.

Elected to the General Assembly in 1991 and the State Senate in 1995, Kelley has been a director of The Harbor Bank of Maryland since it was established in 1982.

In Baltimore in the late 1970s, it was challenging to run minority-owned small businesses. From 1979 to 1981 the founders of Harbor Bank worked to raise capital and

obtain an operating charter, and the bank officially opened in September of 1982.

“Minority business owners were having a difficult time getting access to capital, so we decided to do something about it,” Kelley said. “But then we thought, well, we don’t want to serve just one ethnic group, and other small business people were having problems, too, so we ended up with a pretty multi-cultural board. And we have been serving the community ever since.”

Harbor Bank began with a single branch, which is still the main office, on Fayette Street in Baltimore. Over the years it expanded to a total of seven branches and $450 million in assets.

It’s tough times in the financial world, for both state legislators who keep a wary eye on changing federal regulations and bank directors who must oversee their

execution. Harbor Bank is well-positioned as the economy struggles to regain traction, and Kelley is looking forward to getting back to doing business.

“Everybody is feeling the pinch in commercial banking, in this regulatory environment,” she said. “There’s been so much contraction in the mid-sized and small bank layers. Harbor Bank is being very cautious and very careful, and we hope to get back to great levels of service to the community and our traditional market.”

Kelley serves on a number of committees, including the Senate Finance Committee and the National Conference of State Legislatures’ Communications, Financial Services and Interstate Commerce Committee, which looks at financial services across various institutions, including banks, credit unions and regulated businesses, such as insurance companies. She provides a unique perspective on these committees because of her understanding of issues facing the banking industry. She has sponsored numerous bills on behalf of the Maryland Bankers Association.

“In this national turmoil, and in what truly is a global economy, you’ve got to scan a horizon that’s much broader and has so many more moving parts than just what’s going on in your state or your country,” she said. “Once you feel like you have a good understanding of one part, and you have legislation in place to address it, you look somewhere else and there’s a whole other issue to deal with.”

Kelley’s lengthy list of committees, commitments and responsibilities come down to one life philosophy, which she has embodied since her earliest days in Norfolk, Virginia: “I enjoy the political process, and I think our country is made better because ordinary citizens can get involved and be involved on a local or national level. There is something very powerful in that.” ■

Cassidy Norton Murphy is the associate editor of custom publications for The Warren Group, publisher of The Maryland Banker.

BY CASSIDY NORTON MURPHY

Do business with someone who thinks like you.

www.CBBonline.com 410.356.4876

Resourceful.Responsive.Reliable.

Time and money are precious commodities. Conventional wisdom holds that the more

of these resources you invest, the more engaged you are. you make these investments in exchange for value. Everyone at the Maryland Bankers Association wants to ensure our members are receiving the most value possible. As I near the end of my term as chairman of your Association, I wanted to focus on the fourth of my four overarching goals for this year: member engagement.

A member who supports professional development programs is considered highly engaged, even if they do not serve on our councils or committees. Likewise, a member who has employees represented on each of the MBA committees is highly engaged, regardless of whether they participate in programs. It’s a choice that each member makes depending on their interests and needs.

We want to continue to offer more opportunities for you to be engaged and stay connected.

In early 2010, the MBA successfully launched its new website (www.mdbankers.com). This site enables members to better find information on state and federal legislative activities, professional development offerings, products and services and more. It also allows members to engage in updating

their own contact information, enroll in communication channels and participate in grassroots advocacy campaigns.

We also started our own social network by creating our new Member Community (www.mbamembercommunity.com). This allows more of our members to engage in our volunteer activities through our councils and committees and through peer forums dedicated to your specific interests.

In August, the Member Value and Financial Growth Task Force submitted a survey to the MBA membership. In this survey, members were asked to assess the value of various MBA benefits. The following is a sample of survey results as well as action the Association has taken to guarantee that we are investing where you hold the most value:

MBA members most value the •MBA’s role in legislative, regulatory and judicial affairs at the state and federal levels and timely and relevant communications on industry issues and topics – we continue to advocate for our members, especially as we wrap up the current legislative session. And congressional and regulatory actions have kept us on our toes.MBA members highly value the •Annual Convention and First Friday

Economic Outlook Forum events – MBA resources are being dedicated to making these events as timely and relevant as possible. New sessions have been added to the convention for greater value. More than 700 attendees were welcomed at the First Friday Economic Outlook Forum, and we look forward to an even larger event in 2012.MBA members prefer webinar •training for bank compliance training – MBA is offering over 200 webinars this year, many supporting compliance needs, including Dodd-Frank Act training.MBA members are interested in in-•person training for bank directors – MBA has partnered with the Center for Financial Policy at the Robert H. Smith School of Business at the university of Maryland to offer a six-part Bank Director Training series and certification.

Our goal is to provide value and have you engaged with your Maryland Bankers Association. We will continue to respond to the needs of our membership and ask that you call on us. The MBA officers, directors and staff are eager to help you make the most of your membership. ■

J. Scott Wilfong is the chairman of the Maryland Bankers Association. Reach him at [email protected].

What Do You Value in Your MBA Membership?

J. SCOTT WIlfONg | MBA CHAIRMAN CHAIRMAN, PReSIDeNT & CeO SUNTRUST BANk, gReATeR WASHINgTON/MARYlAND

Message from the Chairman



What’s Better than Free Checking?

Maryland Bank Services Featured Partner

The unprecedented attacks on fee income in banking are stunning, and they are forcing all financial

institutions to reconsider free checking and debit card reward programs. The recent new FDIC guidelines on overdraft programs and the Durbin amendment attack on interchange income will eliminate almost half of the existing net profitability from checking accounts at the average bank, according to an article last month from a well-respected and nationally known banking and consulting group.

Strunk & Associates has been in the business of helping bankers create strong fee income for more than 30 years. As we have watched this attack develop over the past year, we began working on a new approach to creating fee-producing checking accounts that bank customers would be more than willing to pay for, because the benefits save them more than 10 times the monthly fee.

Many banks have already jettisoned free checking, and now charge from $6

to $20 monthly for the same checking account that was free just months ago. Many community bankers feel that they need to hold onto free checking as a differentiator, but the truth is that national banks are still opening 80 percent of the new accounts in the country. Holding on to free checking might only guarantee that your bank gains market share in a money-losing product. That’s simply not a sustainable business.

Why would a customer willingly return to paying a monthly service charge of $6 to $8 per month after 10 years of free checking? Consider this: How many times have you seen lines at the gas station because it’s “nickel off Thursday”? How many times have you seen the lines at Costco or other businesses that offer 10 cents off per gallon to their members? How many new accounts do you think you could open if your customers could routinely get gas for 20 percent less than everyone else (for my 93 octane, that’s 66 cents less per gallon)? That’s just one

of the many benefits of Strunk’s new Preferred Checking benefits package for community banks.

A great deal of consumer research shows that bank customers want at least two things from their bank: They want their bank to help them do a better job of saving money, and they want their bank to help them feel more secure. Preferred Checking offers a $10,000 AD&D policy, Identity Theft 911 restoration service from an assigned advocate when identity theft occurs, and 20 percent savings on gasoline, movie tickets, restaurants and many more retail purchases from nationally known brand names.

Preferred Checking is not a new account that will just cannibalize your current accounts. It is a benefit package that can be added to any checking or savings account. It can be launched in 90 to 120 days, and just like Strunk’s industry-leading Overdraft Privilege service, there are no up-front costs, no minimum monthly fees, just purely variable costs based on your success. ■

To explore the potential for your bank, call Strunk’s Mike Potter at 800-728-3116, or email [email protected]. You might want to start thinking about having a new account desk at the gas station.

Making a Powerful Impact

kATHleeN M. MURPHY | PReSIDeNT & CeO MARYlAND BANkeRS ASSOCIATION

Message from the President

As noted in this issue’s Chairman’s Column, MBA Chairman Scott Wilfong set “Member

Engagement” as one of his top priorities for the year. This is because institutions that derive the greatest value in their MBA membership are those that are most involved.

Scott covers the many ways that our members can become more involved with the Maryland Bankers Association. I’d like to focus on how increased engagement in the public policy dialogue can have positive results for your institution and your industry.

Our members have seen clearly the dynamic impact of legislative and regulatory changes coming from Annapolis and Washington in recent years. In fact, the public policy risk that our industry faces is among the greatest risks facing our members and the industry. Just as you work to mitigate interest rate risk, reputational risk and credit risk, I urge you to consider the importance of mitigating your public policy risk.

There are some simple, straightforward ways that you can do this:

Get to know your legislators. Speaker of the House Mike Busch asked bankers at a recent MBA meeting for a show of hands of how many knew the names of their state senator and their House delegates. About 30 percent of the bankers raised their hands.

Every bank employee in Maryland should know who their state legislators are and who their representative is in Congress. Even better, they should develop a relationship with them. Our industry’s ability to thrive is in their hands.

As a result of the 2010 elections, 10 new senators and 30 new delegates were sworn into their posts in the Maryland General Assembly this year. This turnover points to why the MBA’s efforts and your involvement in our state legislative grassroots advocacy initiatives are so important. It is about building relationships among bankers and these newer legislators so that we can shape legislative outcomes in the General Assembly. Likewise, strengthening relationships with General Assembly veterans is just as important. We want to know who you know, both at the state level as well as in Congress.

Join the MBA in Washington, DC. A good way to get started in this process is to attend the MBA’s Annual Washington Visit, which will take place Sept. 14 -15, 2011. Information can be found on the MBA’s website, www.mdbankers.com.

Invite legislators to meet your board and staff. It’s important that elected officials, who are making decisions every day about your bank’s future, know the challenges your bank is facing: how you are lending, how you support financial education initiatives,

the number of people you employ, and the leadership role your employees have in the community. It could be a perspective they have never heard before. We can continue to improve the public perception of the banking industry through dialogues such as these across our state.

Let us know what you think. We, along with the national banking trade associations, regularly communicate with our Congressional delegation and submit comment letters to the regulatory agencies. We have begun to see the tidal wave of new and proposed rules as the Dodd-Frank Act is implemented. It seems hardly a day goes by where we are not asking for your help - in completing a survey so we can understand how an issue impacts you or asking you to write a letter to Congress or the regulators. It’s hard to find the time to respond to all of these requests, yet it makes all of us more effective. The MBA and the national trades work tirelessly for you; yet nothing can replace the powerful impact of engaged bankers communicating with policy-makers.

With the 2011 Session of the Maryland General Assembly drawing to a close, it has reminded us of the power of engaged members, enabling us to effectively represent our industry once again this year. Effective advocacy from MBA is what our members’ value most. It is only with your help and support that we can achieve the best outcome. ■

What’s On Your Mind?

It is my honor to serve this great industry. Please contact me at any time to discuss industry issues of importance to you at [email protected] or 443-837-1601.


Join the MBA for a “2011 General Assembly Session Recap and a Look Ahead” at our Regional Meetings:

April 27 – Fountain Head Country Club, Hagerstown

April 28 – Crofton Country Club, Crofton

April 29 – The Federal Reserve Bank, Baltimore

Visit the MBA’s website at www.mdbankers.com for more information.


By ChrIStInA P. O’neIll

about

The nation’s economy appears to be slowly reviving, and much of Maryland’s economy is reviving with it, but the outlook of a cross-section of Maryland

banks’ leaders is gloomy when it comes to the Dodd-Frank Act. To paraphrase the late humorist Jean Kerr: Cross? My dear, they were irate.

“It’s a poorly-crafted, rashly-considered bill in general,” says Mary Ann Scully, chair and CEO

of Howard Bank, a six-branch bank headquartered in Ellicott City with six branches and $300 million in assets. Howard Bank recently reported a profitable 2010. Scully shares the view of many others that the bill was drafted as the result of intense pressure

at the federal level to fix the financial crisis. She also calls the assertion that it won’t affect community banks “a myth.”

“It’s an overreaction to a Wall Street event,” says Kim Liddell, president and CEO of the National Bank of Cambridge, a three-branch bank established in 1880 and locally-owned. “The pendulum has swung pretty hard.” He says he expects a lot of industry

pushback over the next two years, and says, “I don’t think that the Fed should be regulating the market. It’s not what they were designed to do.”

Scully and Liddell have plenty of company,

Maryland Bankers Sound Off on Act’s Impact

DODD-FRANKF R A N K T A L K

MAry Ann SCUlly

KIM lIddell


including former FDIC Chairman William Isaac, author of Senseless Panic: How Washington Failed America. Isaac also recently became the non-executive chairman of Ohio-based Fifth Third Bank. He has recently been on the book-tour circuit, spreading the message that the creation of the Dodd-Frank Act doesn’t address the causes of the financial crisis – and that it will indeed impact banks with assets of less than $10 billion, despite assertions to the contrary.

For a bank of Fifth Third’s size – $111 billion, with 15 affiliates and more than 1,300 branches – Dodd-Frank is an expensive but manageable nuisance, Isaac says. He expects it to reduce earnings by several million dollars, but Fifth Third will ultimately be able to spread those costs out over a large number of customers and transactions – something the smaller banks will have great difficulty doing.

The DurBIn AMenDMenT – gooDBYe, Free CheCkIng?

Revenue losses from the Durbin Amendment, which caps interchange fees per transaction regardless of transaction size, are expected to be significant, with declines measured in the 70 percent range. Worse, instead of sparing banks with assets of less than $10 billion – the way the law is written – it will ultimately force smaller banks to go along with large-bank pricing on the fees. “What would incent a merchant to use a community bank with a higher interchange fee when compared with a larger provider?” says Richard Miller, Jr., president and CEO of Woodsboro Bank, with assets at about $190 million and eight

branches. “Price regulations didn’t work in the ’70s. It won’t be the fix in the 21st century.”

Many in the banking industry don’t think that

merchants will pass savings in reduced interchange fees to the consumer. “Durbin

doesn’t acknowledge the pragmatics of what the merchant will do,” says Howard Bank’s Scully.

Isaac agrees. He blasts the Durbin amendment as special legislation to benefit large retailers. “It’s going to cost small banks. They’re clearly going to have to go along with the large-bank pricing. It’s a good example of what’s wrong with Dodd-Frank.”

John Scaldara, Jr., president and CEO of The Columbia Bank, says his bank,

which at $2.1 billion in assets is well below the $10 billion threshold, will still fall under the big-bank rules because it’s part of a multi-bank holding

company. He expects to see “an immediate, substantial impact on revenues.” He estimates that 50 to 75 percent of the bank’s revenue associated with debit card transactions is at risk because of legislative initiatives. The fee caps don’t take into account the costs of managing debit cards and guarding against fraud, which are costs incurred by the bank.

National Bank of Cambridge’s Liddell says the amendment fails to take into account the generation cost for each debit card, which for his bank is slightly more than $2. He can put a dollar amount on the cost of the amendment. He expects a reduction in net income on debit cards of $71,000 a year, representing 13 percent of the bank’s non-interest income.

The CosT oF CoMPlIAnCeOverwhelmingly, bankers say that the

cost of compliance will be significant. Just as with the loss of interchange fee income, they will have to spread the expense of compliance over a much smaller pool of staff than larger banks will.

James Bosley, Jr., president and CEO of Farmers & Merchants Bank, sums

it up: Dodd-Frank takes away revenue sources while increasing overhead costs due to added compliance. “Instead of serving the community,

the bank’s personnel have to spend time studying compliance with new regulations,” he says. Publicly-traded Farmers & Merchants is “very fortunate” to have remained profitable and grown its capital, and has expanded its loan portfolio by 75 percent over the last three years, he says.

Liddell says he is familiar with compliance matters, but “it’s just something I can’t do and run a bank.” He has had to hire another compliance officer. “It’s going to be a dramatic cost in terms of resource use,” he says.

Some regulatory requirements can be stratified by bank size, says Woodsboro Bank’s Miller. He cites the Community Reinvestment Act (CRA) regulations and examination procedures, but says other regulatory areas are not so easy to stratify. He also cites the unlimited authority given the Consumer Financial Protection Bureau

tO MAKe MOney In the erA Of dOdd-frAnK, BAnKS wIll hAve tO CreAte And retAIn well-trAIned StAff, COntrOl rISKS, PrOvIde gOOd CUStOMer ServICe And MAIntAIn A StrOng BAlAnCe Sheet.

JOhn SCAldArA, Jr.

JAMeS BOSley, Jr.

rIChArd MIller, Jr.


(CFPB) to change disclosure and reporting requirements for banks of all sizes. “And while they may not be examining banks under $10 billion, the prudential regulators are expected to follow their promulgations and the CFPB has the authority to examine any community bank they choose,” he says.

Mary Ann Scully notes that while the CFPB may not impact community banks directly, its presence will be filtered through another regulator, bringing an additional layer of compliance, higher costs and much uncertainty. While regulators have recently added staff, she says, “most are contract employees, many haven’t been fully trained … the devil’s in the details.”

The undecided regulatory environment makes it difficult for regulators to have a sense of what direction they’re supposed to take, she says. “Clearly there’s a feeling there’s not enough capital in the system, but regulators won’t tell [banks] unless [the banks] are really in trouble. The basic middle of the road bank that’s performing well doesn’t get guidance.”

leT The MArkeT DeCIDeWilliam Isaac thinks the marketplace

will figure out the true cost of risk, and that it does not need to be mandated by statute. “It’s buyer beware, number one; do your homework, don’t buy stuff you don’t understand. I think the market’s been

burned very badly by what’s happened in the last couple of years, and the market will make corrections to protect buyers. The big pension funds will figure out how to protect themselves – they don’t need Congress to dictate how they will structure transactions. It’s simply not appropriate. … I believe that the markets should be left to their own devices to figure out how to fix that.”

One of the more ironic impacts of Dodd-Frank may be to concentrate more bank business in the hands of the larger banks as smaller banks, unable to

grow revenue, consolidate or sell. While Maryland is in a relatively healthy growth market, other regions may lose smaller banks. “Laws and regulations that promote competition are in the best interest of consumers, says Miller, noting that the three largest banks now control 60 percent of the financial assets in the country, whereas the five largest banks controlled 54 percent of assets in 2008. “Creating a level playing field is what Congress should be focusing on,” he says.

Scaldara of The Columbia Bank says he expects a move to modify Dodd-Frank, not repeal it. “Our position is [to] wait and see how the competitive landscape is going to take shape,” he says.

“The road to hell is paved with good intentions,” says Howard Bank’s Scully. “I don’t think Congress wants to hurt commercial banks, but they moved in a reactive way and didn’t understand what they were doing. The result will be more consolidation in the industry.” ■

Christina P. O’Neill is editor of custom publications at The Warren Group, publisher of The Maryland Banker.

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Lending Volumes Trending higher

Ever so steadily, the u.S. economy is approaching some semblance of normalcy. The economy is

expanding at a roughly 3 percent pace. The number of jobs is growing and unemployment has been trending lower.

Data regarding both revolving and non-revolving consumer credit indicates that consumers are both seeking more credit and receiving it. In December of last year, consumer credit outstanding

increased by $6.1 billion, reaching a total of $2.41 trillion. Revolving credit increased for the first time since August 2008, ending a 27-month losing streak. Non-revolving credit balances also rose. Correspondingly, retail sales have been drifting higher, including new car sales, which are likely to top 13 million this year nationally.

Despite these and other indications of renewed economic vigor, there is still

a widely shared view that excessively constrained bank lending continues to hamper the economic recovery. This concern is often expressed in the context of real estate lending, and data generally indicates that residential and commercial real estate remain particularly resistant to material improvement.

Economists, among others, are routinely asked the question, “When will banks begin lending again?” with the common offshoot being “What will make banks want to lend again?” Bankers often counter with the response that banks are lending, but only to those who are creditworthy and/or have sufficient collateral.

That is, of course, as it should be, but one can understand the angst regarding bank lending to a certain degree. During last year’s third quarter, u.S. banks and savings institutions had $631 billion in outstanding “small” loans (loans associated with an initial amount of $1 million or less) to businesses, according to the Federal Deposit Insurance Corporation, which was down 5 percent from $667 billion as of March 31. Moreover, data from the Federal Reserve indicate that only 10 percent of large u.S. banks reported easing loan terms for small businesses over the past three months. This compares with nearly 20 percent for medium-sized or large companies.

Indeed, there is no lack of evidence suggesting that small businesses continue to struggle to gain access to credit. In January, 26 percent of small businesses surveyed by Barlow Research Associates reported being denied additional credit

Economic UpdateANIRBAN BASU, MA, MPP, JD | CHAIRMAN & CeO, SAge POlICY gROUP CHIef eCONOMIC ADvISOR, MARYlAND BANkeRS ASSOCIATION

The Maryland Banking School offers perspectives on forces that shape the financial services industry. Through an emphasis on developing leadership, managerial and technical skills, and

creating a resource network, students enhance their individual and corporate performance to thrive in the evolving financial services marketplace.

The Maryland Banking School Celebrating 36 Years of Developing Quality Bankers!

August 1—5, 2011 University of Maryland Inn & Conference Center

For more information, visit www.mdbankers.com!

continued on page 12


CR

[M

A ]®

economic updatecontinued from page 11

over the previous year or not applying for credit because they anticipated rejection. By contrast, only 4 percent of middle-market companies, or those with revenues of at least $10 million, but less than $500 million, said the same thing, according to The Wall Street Journal.

Remarkably, the number of small business loans and lines of credit made in the third quarter was down more than 70 percent from its pre-crisis peak, according to Equifax Inc., the Small Business Financial Exchange and The Wall Street Journal. However, not all of this was due to stricter lending standards. Recently released data from the National Federation of Independent Business indicates that 91 percent of small businesses are not interested in borrowing or have had all their credit needs met already.

That said, there increasingly exists a combination of quantitative and qualitative evidence that bank monies are increasingly flowing into the economy, including in Maryland. Whether this is

due to an easing of lending standards or to greater demand for money among creditworthy borrowers is not perfectly clear. However, the emergence of greater lending represents another element of emerging normalcy.

Data from the FDIC regarding the third quarter of 2010 indicates that capital levels for banks are up across the board and that loans written off as uncollectible and noncurrent loans both declined for a second consecutive quarter. The implication is that banks, particularly large banks, have more capital at a time when demand for loans is poised to expand in conjunction with a steepening yield curve and in the context of an economy producing less downside risk.

Though evidence of renewed lending is not overwhelming, it is not difficult to find. For instance, published reports from the SBA indicate that some banks have increased their small-business lending in Maryland. There is also the supportive influence of certain public policies. According to the Baltimore Business Journal, regional, national and community banks have all recently done deals that

used new market tax credits in greater Baltimore.

Community bankers continue to consider the implications of the newly-minted Small Business Lending Fund. under the program, which is part of the Small Business Jobs Act of 2010 enacted in the fall, the Treasury purchases preferred stock in community banks that are then permitted to draw upon the $30 billion fund to lend to small businesses. A recent Washington Post article indicated that certain Maryland community banks are strongly considering tapping into the program to accelerate the pace of small business lending.

In the final analysis, there is every reason to believe that the pace of lending is about to accelerate. Some of this has likely happened, but is not yet apparent in the data. As the economic recovery becomes more sure-footed over the course of the year, loan volumes will increase, including to developers, small businesses and other economic participants that have heretofore been among the most impacted by a lack of access to capital. ■

First Quarter 2011 | 13

continued on page 14


Members on the Move

the columbia bank announces the Promotion oF baxter m. PhilliPs, Jr.

Baxter “Mitch” Phillips, Jr. has been promoted to senior vice president of commercial banking for The Columbia Bank. He previously was a vice president

of commercial banking. He has been with The Columbia Bank since 2005.

Phillips manages a diverse group of commercial clients and handles their loans, deposit and cash management needs.

ingriD chaPman Joins Pnc Private client grouP

Ingrid Chapman recently joined PNC Bank as a relationship manager in the private client group, a team that helps clients manage wealth and assets.

Chapman provides personalized solutions and direct access to a broad array of financial expertise to address and tailor clients’ investment needs during various life stages.

Chapman has 22 years of financial services and wealth management experience and was formerly a vice president at Bank of America. Chapman serves clients in Cecil County from the Elkton Main and Big Elk Mall branches.

ramsey l. harris PromoteD to branch manager

Ramsey L. Harris was recently promoted to assistant vice president and branch manager at the uptown branch of PNC Bank in the Mt. Vernon

neighborhood of Baltimore City. Harris oversees the day-to-day operations of the branch, as well as provides complete financial services, including a wide range of checking accounts; loans and mortgages; investment services; insurance; and small business banking solutions.

Harris has more than five years of financial services/management experience. He previously served as a financial sales consultant at PNC’s Charles Village Branch. Prior to joining PNC he served as treasury manager and family development director at Abundant Life Ministries in Cecil County, MD.

Pnc Wealth management Promotes JosePh Jennings

PNC has promoted Joseph Jennings to senior vice president in the Wealth Management division. As investment director, Jennings provides

leadership of all client-related investment activities in Greater Maryland.

Jennings joined PNC in 1996 and has 14 years of wealth management experience.

the columbia bank Promotes melanie reeDer to branch manager oF the arunDel Preserve oFFice

Melanie Reeder has been promoted to branch manager of The Columbia Bank’s Arundel Preserve Office located in Anne Arundel County.

She previously was the assistant branch manager of the bank’s same location. Reeder has been with The Columbia Bank since 2004. In her new position, she will oversee the day-to-day banking operations of the Arundel Preserve Office, develop new business opportunities, and integrate the bank into programs and initiatives that benefit the local community.

Members in the Community

susquehanna bank’s #tWeet2FeeD virtual FooD Drive ProviDes 200,000 meals to area FooD banks

They may be just 140-character messages, but they had the power to generate more than 200,000 meal donations for area food banks. During the 2010 holiday season, Susquehanna Bank put a new spin on the traditional food drive by creating an online,

Welcome New Members

The Maryland Bankers Association (MBA) is the only professional association representing the Maryland banking industry. We are pleased to welcome the following new members:

Associate Members:FinPro, Inc.•TVM Real Estate Solutions•

Associate Financial Member:USAA Federal Savings Bank•

News & Notes

Susquehanna Bank employees donated 37,600 meals to the Maryland Food Bank. Pictured (L-R) are mike cox, Susquehanna Bank; kelly brown, Susquehanna Bank, Leslie Marsiglia, Maryland Food Bank; and barry luciani, Susquehanna Bank.


News & Notes virtual food drive called #Tweet2Feed, a campaign that used the power of Twitter to raise donations and awareness for food banks in Maryland, Pennsylvania, New Jersey and West Virginia.

During the campaign, which ran from Nov. 15 through Dec. 31, Twitter users were encouraged to follow Susquehanna on Twitter and retweet messages to donate meals to individuals and families in need. In addition to the online campaign, Susquehanna collected food donations in most of its 220 branches and donated 50 additional meals for every checking account opened during the month of December. The bank’s donation of 200,000 meals total surpassed its original goal of 150,000.

“The positive response to #Tweet2Feed

was way more than we ever anticipated,” said Alison van Harskamp, director of corporate communications for Susquehanna. “It was our first charitable campaign using Twitter so we didn’t know exactly what to expect, but we’re thrilled with the results. We had customers, non-customers – even people from around the world – following, retweeting, and sending us tweets about how much they appreciated the campaign. Through our followers, we were able to quickly reach thousands of people and help communicate and raise funds for the hunger needs in our communities.”

Susquehanna’s partner food banks also helped the viral campaign by posting messages on their Twitter feeds, Facebook pages, and websites. The food banks benefiting from this campaign provide service to each of the counties in Susquehanna’s four-state market area and

included: Central Pennsylvania Food Bank, Philabundance, Second Harvest Food Bank of Lehigh Valley and NE Pennsylvania, Greater Berks Food Bank, The Weinberg Food Bank (Luzerne County, PA), Maryland Food Bank, Community Food Bank of New Jersey – Southern Branch, Food Bank of South Jersey, and Mountaineer Food Bank (West Virginia).

hoWarD bank Partners With senior housing crime Prevention FounDationHoward Bank has become the third Maryland bank to partner with the Senior Housing Crime Prevention Foundation (SHCPF). The SHCPF, a Maryland Bank Services preferred partner, is dedicated to providing crime-free living environments to over 29,000 Maryland nursing home residents, HuD senior housing residents and Maryland veterans.

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annie geiermann appointed member of the governor’s commission on small business

Annie Geiermann of The Columbia Bank was appointed to Gov. Martin J. O’Malley’s Commission on Small Business. The goal of the Governor’s

Commission is to engage with small business communities across the State to hear from entrepreneurs and seek the input of statewide elected officials, local representatives and economic development administrators.

“Annie continues to be recognized for her efforts with local small businesses and we are pleased that she is part of The Columbia Bank’s team,” stated John A. Scaldara, Jr., CEO and president of The Columbia Bank.

“Supporting small business is a core belief for The Columbia Bank. After serving on the Governor’s Small Business Task Force and subsequent appointment to the Small Business Commission, Annie Geiermann truly exemplifies this core belief,” added Scott C. Nicholson, senior executive vice president of The Columbia Bank.

Geiermann is a senior vice president of the commercial banking division of The Columbia Bank. She oversees business development, providing customized financial solutions for businesses, their owners and employees.

hamilton Federal bank appoints bill ballard and carol coughlin to board of Directors

Hamilton Federal Bank has appointed Bill Ballard and Carol Coughlin to its board of directors.Ballard is a partner with EFI Group, LLC. A Baltimore-

based engineering and manufacturing consulting firm, EFI Group develops and implements productivity improvement, LEAN manufacturing and cost reduction

projects for manufacturing operations throughout the united States.

Coughlin is CEO and founder of BottomLine Growth Strategies, Inc. (BLGS) Established in 2006 and based in Towson, Maryland, BLGS provides outsourced CFO advisory services to growing companies

to improve profits, overcome obstacles and prepare for profitable mergers and acquisitions.

“Bill and Carol each have a wealth of business expertise and local market experience. We are delighted to have them join our board,” said Hamilton

Federal Bank president Robert A. DeAlmeida. ■

hamilton Federal bank employees (Hammy’s Heroes) raised close to $7,000 for Special Olympics by participating in the 15th Annual Polar Bear Plunge.

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teach children to save Day is april 12

The ABA Education Foundation’s financial education initiative, Teach Children To Save is celebrating its 15th anniversary this year. MBA members will be in schools doing their own part on April 12, including Calvin B. Taylor Banking Company. The bank began a new tradition in 1997 when they pioneered and implemented Teach Children to Save and is one of 15 banks in the country that have participated every year since.

For FHLBank Atlanta, challenging business environments are nothing new. For nearly 80 years,

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The Right Tool for All Business Cycles

Documents

Maryland Banker 2Q 2011