• An Important Message From President John Witkowski
  • News From Albany & Washington
  • Latest Industry Trends & Updates
  • Have you visited our newly updated website at www.ibanys.net yet?

Your IBANYS Team: 
Working Together To Make 2017 A Great Year 
For New York C ommun ity Banks !


In This Issue

Quick Links


Have You Contributed to NYSIBPAC This Year?
If not...now is the time! We need your help in this statewide election year to support candidates and committees who understand community banks' needs.  Can we count on you?
CLICK HERE
for our 2017 PAC contribution form. Help support IBANYS' political action efforts in New York State.

Partner

This Week's "Quote To Remember" About Community Banks. . .

"
Community banks have a critical role in keeping their local economies vibrant and growing by lending to creditworthy borrowers in their regions...
They often respond with greater agility to lending requests than their national competitors because of their detailed knowledge of the needs of their customers and their close ties to the communities they serve...when you multiply these effects across the thousands of community banks in the United States, you really see how the lending decisions they make help the broader national economy."


--Former Federal reserve Chairman Ben Bernanke

November 1, 2017

A Message From President 
John Witkowski
Today marks the first day of IBANYS' new Fiscal Year for 2017-18. As we begin our year, we are excited about our strategic initiatives for building value for all IBANYS members: Our member banks, preferred partners, associate members--and, for the association itself.  Our focus will be to provide effective advocacy for New York's community banks, and quality educational programs for Directors, bank executives and their teams who manage risk, compliance, security and cybersecurity.  Among other things, IBANYS plans to develop new forums for member bank CEO's, CFO's and Board Members, and to expand our meetings by introducing them to the Long Island/New York City region. 
 
Here are a few of the projects we are
planning for 2017-18.
  • Renaming our CFO/Senior Management meeting as our "Bank Executive Symposium"
  • Re-tooling our Government Relations & CFO Committees to ensure we are covering relevant and timely topics
  • Creating a new "HR and Operations Committee" to help ensure we offer important topics during our meetings
  • Developing proactive legislation to establish community bank service organizations
  • Defending community banks against legislation and regulations that could hinder community banks progress, or give unfair advantages to our competition
  • Introducing fintech companies to create awareness of the future of banking
  • Develop regional CEO Forums
  • Partner with ICBA on important initiatives that impact community banks nationally
  • Strengthen existing partnerships, and build new relationships with preferred partners and associate members
  • Provide premier speakers for all of IBANYS events
Along with creating a number of new programs and initiatives, we launched our new IBANYS website ( www.ibanys.net) in September -- and, will build a CRM for efficient record keeping. 

I also want to emphasize the importance of our relationship with our IBANYS preferred partners (Wolf and Co., Pentegra Retirement Services, Travelers Insurance, T. Gschwender and Associates and Promontory Interfinancial) and with our associate members. These firms not only provide exceptional products and services to our member banks, but we also have revenue sharing agreements in place that benefit IBANYS for the business our member banks do with them. That's a real "win-win" situation.
 
Lastly, I would like to highlight a few programs that will be beneficial to our member banks, their employees and their clients:
  • NYBDC 's Excelsior Growth Program (Free Webinar on November 7
  • Wellness Resource Program - an additional healthcare benefit to provide for employees and clients. (Teledoc is key service)
  • Cure The Blue Research - A  charitable foundation for prostate cancer research founded by Buffalo Bills great Booker Edgerson
Each of these is explained in greater detail later in today's newsletter 

We hope that our members -- and all those who support the association -- enjoy the rest of 2017, and we look forward to having you with us in 2018!!  Enjoy the holiday season...it is November already!!
 
- John Witkowski

GOVERNMENT RELATIONS

ALBANY

DiNapoli: State Facing Lower Tax Revenues, $4.1 Billion Budget Gap
A report by NYS Comptroller DiNapoli's office raised alarms over the state's budget picture. It found lower tax revenue than anticipated, and a $4.1 billion budget gap. During the  first half of the state's 2017-18 fiscal year, tax collections totaled $36.1 billion ($386.6 million below estimates.) Meanwhile, the state's fund balance was at $6.5 billion ($21.8 million below the latest projection from the state's financial plan, and $3 billion below the balance from a year earlier.)
DiNapoli warned: "New York faces serious fiscal challenges. Projected budget gaps, weaker than expected personal income tax collections and cuts to federal programs combine for a triple threat of budgetary risks. Any federal funding reductions not already assumed in the Financial Plan could force difficult decisions regarding the funding of important programs and services." Governor Cuomo had already  the coming budget season will be a difficult one due to the deficit that would need to be filled during an election year. The state's fiscal year begins April 1.

NYS Senate IDC Releases Report On Bank-Owned Properties
The State Senate Independent Conference (IDC)  released a report on the impact of poorly maintained bank-owned properties on communities yesterday. "Nightmare Neighbors: How Badly Maintained Homes Damage Neighborhoods" details the effects these properties have on surrounding neighborhood home values and proposes new legislation based on the findings.  The IDC, led by Senator Klein (Bronx/Westchester), is comprised of eight members  elected as Democrats who are in a majority coalition with the Senate GOP, including Senate Banks Chair Jesse Hamilton of Brooklyn. 
  • Sam Hoyt has resigned as a regional Empire State Development Corp. (ESDC) president, Gov. Andrew Cuomo's office on Monday confirmed. Hoyt served in the NYS Assembly from 1992 until 2011, headed the ESDC's Buffalo area operations. 

WASHINGTON, D.C.
  
Action Alert On Tax Reform For Sub-S 
Community Banks
With House lawmakers expected to release a draft tax-reform bill tomorrow, ICBA's  grassroots "call to action" continues --asking Subchapter S banks to let their voices be heard on a tax reform measure being debated in Congress.  alert Subchapter S community banks are closely-held businesses dedicated to creating prosperity in their communities through the provision of customized loans and other financial services. One half of all small business loans nationwide are extended by community banks in both the C and S corporate model.  As a Subchapter S bank, it is imperative that you weigh in on the tax reform debate. Tell Congress to ensure that the proposed maximum 25% pass-through tax rate is available to the nation's more than 2,000 community banks organized under Subchapter S of the tax code.  To access the "Action Center" page, visit www.icba.org

Hensarling Will Not Seek Reelection
House Financial Services Chairman Jeb Hensarling (R-TX) announced he will not seek re-election next year. "Although service in Congress remains the greatest privilege of my life, I never intended to make it a lifetime commitment, and I have already stayed far longer than I had originally planned." Hensarling has chaired the Financial Services Committee since after the 2012 election, and has been a strong supporter of communiuty bank regulatory relief. His term as chair expires after 2018. Hensarling noted: "Much work remains at the House Financial Services Committee in the areas of housing finance reform, regulatory relief, cybersecurity and capital formation to name just a few. Furthermore, important work remains in the Congress as a whole - especially pro-growth tax reform."
  • House Ways and Means Chairman Brady (R-TX) indicated said the upcoming proposed tax reform bill would include an itemized deduction for state and local property taxes. That would be a concession to Republicans representing high-tax states (like New York) who have been opposing the proposed total elimination of the federal deduction for state and local taxes. However, a reported compromise has split New York's GOP Representatives. Under the compromise, taxpayers will be able to deduct property taxes from their federal income taxes, but not state or local income taxes.  Meanwhile, The National Association of Home Builders will oppose the bill after the GOP refused to eliminate the deductions for mortgage interest and property taxes and replace them with a new tax credit. The association believes the GOP's rejection would create "a bad bill for the housing sector." UPDATE: House Republicans postponed the rollout of their tax reform proposal from today until tomorrow. GOP members of the  Ways and Means Committee had not finalized details of the bill. 
  • President Donald Trump is expected to sign a resolution repealing the Consumer Financial Protection Bureau (CFPB) rule that barred forced arbitration in financial services contracts with customers. The House blocked the rule in July by a Congressional Review Act resolution, and the Senate followed suit last week. CFPB Director Cordray had written a personal letter to President Trump asking him to veto the congressional override of the CFPB's arbitration rule.  
  • President Trump is reportedly close to naming current Federal Reserve Governor Jerome Powell as the next Chairman of the Federal Reserve, with an announcement likely tomorrow. He would be the first investment banker to hold the position, and the first non-economist in more than 40 years. Powell, a Fed Governor since 2012, was a lawyer before he joining the investment bank Dillon Reed & Co. He  joined the Treasury Department in 1990, and later became a partner at The Carlyle Group, a private equity and asset management firm. The President actually has several spots to fill at the Federal Reserve, but Treasury Secretary Mnuchin said it is unlikely Mr. Trump will simultaneously name a vice chairman at the same time.  
*   *   *   *   *   *   *

PLEASE NOTE:
The November 7 Free Webinar by NYBDC/Excelsior Growth Fund ("Online Lending 2017: What Small Business Bankers Need To Know")  is being rescheduled due to a scheduling conflict. We will keep you posted on the new date once it is finalized.

*   *   *   *   *   *   * 

 
 
Former IBANYS Chairman Paul Mello (P resident & CEO of Solvay Bank) has been reelected to a three Paul Mello year term on the Board of the New York Fed. Solvay is  the oldest independent commercial bank headquartered and operating in Onondaga County, New York.  Mr. Mello has been President & CEO since 2002.  He served as Chairman of IBANYS for two years, and remains a member of the Board of Directors. 
 
New De Novo Commercial Bank Approved 
Acting Comptroller of the Currency Keith Noreika presented Winter Park National Bank (located in Central Florida) with its official charter. Noreika said the first de novo national bank charter since the financial crisis is encouraging, but more needs to be done to make the process of establishing de novo banks more efficient: "... I am encouraged that we are seeing increasing interest in becoming new banks and that de novo activity appears to be thawing slowly as the economy warms...but de novo banks are still exceedingly rare." In an op-ed in The American Banker he said policymakers should streamline the processes of chartering a new bank and applying for federal deposit insurance, cited the dearth of de novo banks since the financial crisis and said the OCC and FDIC can continue making improvements to the application process.


Consumer Lending Up
The U.S. Commerce Department reported that consumer spending, which accounts for more than two-thirds of U.S. economic activity, jumped 1.0% last month. The increase, which included a boost from higher household spending on utilities, was the largest since August 2009.  The data was in the third-quarter GDP report, which showed growth in consumer spending growth slowed to a 2.4% annualized rate after a 3.3% growth pace in the second quarter.  

First Time Home Buyers Down. . .
The share of sales to first-time buyers fell to 34% in 2017, down from 35% in 2016, according to the National Association of Realtors' annual Profile of Home Buyers and housing money Sellers. That's the fourth-lowest share in the survey's 36-year history. (First-time buyers historically make up closer to 40% of homebuyers.)  The decline, at least in part, is attributable to a rise in student-loan debt. For those who did buy, 41% said they had student debt, up 1% from 2016. The average amount of debt is also up, to $29,000 from $26,000.

. . .As Is Total Mortgage Application Volume
Total mortgage application volume fell 2.6% for the week, and the weekly seasonally adjusted application index from the Mortgage Bankers Association is now 20% lower than a year ago.
Refinance applications were down 5% last week. Refinance volume is 38% lower than a year ago, and re-fi activity has fallen 20% since September. Mortgage applications to purchase a home fell 1% for the week, but  are 10% higher than a year ago. 

IBANYS identifies offers products and services that provide value to your banks, companies, employees communities. These brief summaries provide links for information. Please contact IBANYS President John Witkowski with questions. 

Health & Wellness 
The health and wellness landscape continues to evolve. "My Wellness Resource" can be a nice addition to your existing benefit package.  
C ontact Alan Justin: (716) 907-5500.
We are pleased to announce a new offer available to banks.  Offered through IBANYS' partner at My Wellness Resource is a unique program providing a $500 reba
te on any new Fiat, Chrysler, Dodge, Jeep, Ram or Hyundai vehicle. It may only be offered though individual banks, not through IBANYS itself. If your bank and employees might be interested, drop us a line and we will forward it to our contact at My Wellness, Alan Justin, who will reach out to you. 
We only ask that if you are not currently participating in the My Wellness Resource program, that you take a fair & objective look at the program!

Secure, Enhanced Internet Presence
The .bank program by fTLD operates trusted, verified, more secure, easily-identifiable internet locations for financial companies and 
customers.  www.icba.org

Online Lending
Excelsior Growth Fund (EGF) is NYBDC's nonprofit Community Development Financial Institution and IBANYS' exclusive online lending partner. Visit 

Battle Against Prostate Cancer
Cure the Blue" raises funds and awareness regarding prostate cancer in New York State. Visit curetheblue.com t o get involved!  Of all new cancer cases in the nation, prostate cancer represents 9.6%. In 2017, estimates are  there will be 161,360 new cases, and that more than 26,000 people will die of the disease.  Support IBANYS' "Cure the Blue" campaign to help New Yorkers participate in this effort to promote prostate cancer awareness and research. IBANYS partners with the Buffalo Bills Alumni Foundation, which sponsors the program, and urges our member banks to participate. Lake Shore Savings Bank President provided prostate cancer literature and Cure the Blue information at its headquarters in Dunkirk and all eleven of its branches, and also offered"Cure the Blue" ceramic lapel ribbon pins to all customers for a $5.00 donation to Cure the Blue. Lake Shore President & CEO Dan Reininga stated: "We fully understand the severity of this disease and the devastating effect it can have on families. Our support of 'Cure the Blue' initiative is something that we are taking very seriously. We're proud to support it."  "Cure the Blue" continues to grow throughout upstate New York. Walmart stores and the Labatt brewery are on board with a major push in the Watertown and Buffalo areas! IBANYS urges all of our member banks, associate members and allies to join the effort.     


. . .The Kafafian Group 
The Kafafian Group ("TKG") is a finance, strategy, and operations consulting firm specializing in performance measurement, profitability outsourcing, strategic and business planning, regulatory assistance, profit/process improvement, board and management advisory services, and investment banking advisory services. TKG was established to help community financial institutions solve their challenges and take advantage of their opportunities in a constantly changing industry and economic environment.  They  serve community financial institutions by helping senior leaders develop strategies that lead to long-term success. They do this by:
  • Providing end to end strategic planning, including components to strategy such as capital plans and strategic alternative analysis.
  • Constructing granular profitability information to foster a performance culture.
  • Identifying operational efficiencies.
  • Advising institutions on M&A opportunities and a balanced approach to strategic alternatives analysis.
  • Assisting boards of directors and senior managers on improving their effectiveness, satisfying regulatory orders, and creating franchise value.
Contact Robert E. Kafafian, President & CEO: (973) 299-0300,  
rkafafian@kafafiangroup.com

 
. . .That t he number of community banks in the United States peaked in 1996, at 9,700, but has since fallen to  approximately 5,000?  After the financial crisis, the number of applications for community banks plummeted -- from more than 200 per year, to less than 50. In 2011 and 2012, there were none. 

 

 New York community banks play a key role in our state and local economies. Help spread the good news among your customers, business and elected leaders and media!

 

Click here for quotes from Governor Cuomo and former DFS Superintendent Lawsky extolling the performance and value of New York community banks.

Click here for the full NYS Study on community banking.

Click here to read IBANYS President & CEO John Witkowski's comments on the new tax changes and benefits for New York community banks as approved in the 2014-15 State Budget.

 

Click here for IBANYS' letter to the Editor of Consumer Reports Magazine correcting failure to mention community banks as an alternative to using "big banks."

_________________________________

John J. Witkowski
President and Chief Executive Officer
 
Stephen W. Rice
Director of Government Relations and Communications

Linda Gregware
Director of Administration and Membership Services 

William Y. Crowell, III
Legislative Counsel