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Interview with a Community Banking Professional
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 Ric Wagner President and CEOPiedmont Federal Savings Bank
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Q: What should be the focus of community banks?
A: Simply put, the community should be the focus of a community bank. This translates into being involved in the community in a fundamentally and conservatively sound manner. The community bank should be the example of how to conduct business, above board, with a conservative, risk-sensitive approach. The banks should be a ready source of funding for whatever financial services and products are present within the individual financial institution's business model. Safety and soundness are two critical characteristics of a community bank. Consumer trust and respect must be earned and maintained by the fiscally responsible operation of the institution with fair and equitable treatment of all customers. If the citizens of the community support the bank, it prospers. If that is the case the bank then should give back to the community by being a responsible corporate citizen.
Q: As a whole, what do you think they are doing right? Where are they falling short?
A: Financial institutions that are providing responsible financial services and products that meet the needs of the citizens within the community being served are doing it right. Institutions that do not provide the aforementioned are falling short.
Q: As to the community banking industry, what is keeping you up at night, if anything?
A: The number of bank failures either due to an unavoidable chain of circumstances or a lack of a conservative operating philosophy and fiscally responsible operating practices. The poor performers impact those who are paying attention to the fundamentals and focus on operating in a safe and sound manner.
Q: Where do you see the industry in ten years?
A: With all the changes within the local, state, national and global financial services industries, it is difficult to project what tomorrow will look like, much less in the next ten years. Hopefully, consumers will continue to have a selection of stock and mutual financial institutions to choose from - we all benefit from healthy competition within the context of a fair and level playing field.
Q: What is the most important thing you have learned as a banker?
A: Be honest, be true and treat people (customers) the way you would want to be treated. Do not put customers in loans they cannot afford, thus placing them in a financially stressful situation.
Q: Piedmont Federal is growing. To what do you attribute your bank's success?
A: Do the right thing by our customers. Do not be greedy. Pay attention to banking fundamentals. Sometimes that effort results in growth, other times the assets of the institution may shrink. It all depends upon maintaining a customer-focused profitable institution.
Q: What do you enjoy most about your job?
A: I enjoy the opportunity to make a positive difference in other people's lives (customers, employees and the community at large).
About Piedmont Federal Savings Bank
Piedmont Federal Savings Bank was formed in 1903 by a small group of businessmen who wanted a reliable source of home financing for Winston-Salem, N.C. Since then, it has grown to 5 branches stretching from Boone, N.C. to Kernersville, N.C.. It is also building a new headquarters in Winston-Salem. It has evolved from only focusing on home loans, which remains a core business, to offering an array of banking services for its customers. In 2008, the bank changed its name from Piedmont Federal Savings and Loan Association to Piedmont Federal Bank to better reflect the products and services it offers.
Update: We are pleased to share the news that the two community banking professionals featured in the last edition of Community Banking Excellence, Harry Comm and Catherine Ferrari of Hancock County Savings Bank, have recently experienced a change in positions. Comm was elected to the position of Chairman of the Board of Directors and Chief Executive Officer of the bank, and Ferrari was appointed to the position of President and Chief Operations Officer.
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Oversee your borrowers;
do not manage them.
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| Compliance |
Dodd-Frank Revisions to the Fair Credit Reporting Act
by Timothy R. MooreIt is hard to believe that the Dodd-Frank Act ("Act") celebrated only its first birthday on July 21, 2011. It seems like it has been around a lot longer than that sometimes. Although the Act has already reshaped the regulatory regime for both financial and many non-financial entities, in actuality, its impact is just now beginning to be felt. This is the first of what is sure to be many articles examining the Act and its affect on community banks. DISCLOSURE OF CREDIT SCORES AND FCRAOn July 15, 2011, the Federal Reserve Board ("FRB") and the Federal Trade Commission ("FTC") published new rules implementing the Act's revisions to the Fair Credit Reporting Act ("FCRA"). The Act set out new content requirements for both risk-based pricing notices and adverse action notices. The Act essentially says that if the consumer's credit score is used by the creditor in setting the material terms of the credit (for a risk-based pricing notice) or in deciding to take adverse action as to that consumer (for an adverse action notice), then the creditor must provide the consumer with either a risk-based pricing notice or an adverse action notice containing the credit score and information the creditor used in making its decision. Read the full article on our website.
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Corporate
Another Limited Liability Company Wants a Loan
by Mark D. Clark
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Although the concept of a limited liability company has been around since 1977 when Wyoming enacted a limited liability company act, the popularity of the limited liability company has primarily grown during the last 15 years. In August 1994, the Uniform Limited Liability Company Act was adopted by the National Conference of Commissioners in an effort to create more uniformity among state limited liability company legislation. The Uniform Limited Liability Company Act was amended in 1996 to adapt to certain Internal Revenue Service guidelines. The allure of the limited liability company business model is its unique ability to bring together in a single business organization the best features of all other business forms -- properly structured, its owners obtain a corporate-styled liability shield, flexibility in establishing rules governing internal affairs and the pass-through taxation of a partnership. General and limited partnerships do not offer all their partners a corporate-styled liability shield; Subchapter C corporations do not offer their shareholders the pass-through taxation of a partnership; yet all state limited liability company acts contain provisions for a liability shield and the pass-through taxation of a partnership. With the greater uniformity among state limited liability company statutes and the increased comfort of business owners and lawyers in understanding the value of the limited liability company business model, more and more limited liability companies have been created to conduct a wide variety of business enterprises. Read the full article on our website. |
| Construction |
N.C. Legal Updates for Construction Lenders
by Stephanie U. Roberts
and Bryan G. Scott
By way of follow-up to our January 2011 article on the N.C. Lien Law Legislation and relevant case law, we want to report two recent developments. (1) On July 19, 2011, the North Carolina Court of Appeals again addressed lien priority issues when it reversed the trial court's entry of judgment on the pleadings in favor of Preserve Holdings, LLC (which purchased property out of foreclosure in January 2008 from the original plaintiff, Wachovia). Wachovia Bank, NA v. Superior Construction Corp., 2011 WL 2848234 (N.C. App., July 19, 2011). This opinion is important because it again highlights the uncertainty of predicting determining lien priorities. Read the full article on our website.
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