Banking & Finance

Feb.15 – BANKING & FINANCE: Governor Perdue Signs House Bill 926

Written by Administrator Tuesday, 16 February 2010 12:55

SBJ.com Staff Report

Governor Sonny Perdue signed HB 926 last Thurs., Feb. 11, sponsored by Rep. James Mills, intended to help Georgia banks, businesses and homeowners navigate the economy, according to Perdue.

“This legislation will increase stability in Georgia banking,” said Perdue. “This is a bill that strengthens already existing lender-borrower relationships and allows loans in good standing to be renewed, which helps both the bank and the borrower.”

Current state law restricts banks from lending more than 15 percent of their capital to any one borrower. With the recent pressure on bank capital levels, current law has had the unintended consequence of disallowing banks to renew loans, even with great customers. That hurts banks by kicking out some of their paying customers, and it hurts borrowers who are meeting their obligations. This bill gives more flexibility to state-chartered banks whose legal lending limit has been lowered because of declining capital on their balance sheet.

Under this law banks will be able to renew loans with existing customers even if financial strain has made that loan above the normal lending limit. The law does not require banks to renew such loans.

The Senate passed the bill today by a 52-0 vote. The measure passed in the House last week by a 165-1 vote.

“This needed change will allow some of the bank's very best customers to renew performing loans. Without this change, a constituent who has made every payment would be denied a loan renewal even at no fault of their own," said Banks and Banking Committee Chairman James Mills. “This measure will save businesses and jobs for Georgians.”

The Blending of Wells Fargo, Wachovia Moving Forward with Care

NEWS - Banking & Finance

Last Updated on Tuesday, 09 February 2010 16:08 Written by Administrator Sunday, 07 February 2010 17:04

By Lou Phelps and Ted Carter

SBJ.com Staff

When Wells Fargo acquired Wachovia Bank in October 2008, the acquisition of the troubled bank essentially doubled the size of Wells Fargo, a major undertaking in an era of change and stress in the banking industry.

Wachovia was and is still number one in local deposits market share in the 13-county Savannah area, so Wells Fargo’s plans for the local market are of vital interest.

Wells Fargo has moved slowly and carefully in making changes, according to Darryl Harmon, named Regional President for Wells Fargo’s Southeast Region in January 2009, responsible for Mississippi, Alabama, Georgia and Florida operations. He was previously based in California, and is now operating the Southeast region out of Atlanta.

A close look at Savannah’s economy and banking landscape has led Wells Fargo to conclude beefing up here is a good idea.

That may seem puzzling in light of Georgia’s newly acquired distinction as the national leader in bank failures. But Savannah’s upside is too appealing to pass up, said Harmon.

“The economy here in Savannah might not be as strong as you’d like. But what we’re seeing is that when you look at the entire four-state market (for the Southeast region), this market has held up pretty well,” he said.

In the Savannah market, the Wachovia brand name is still in use, though a number of Wells Fargo products have already been added to serve customers, according to Harmon and Savannah City President, Jenny Gentry. The Wells Fargo brand name conversion will begin later this year, however, and will be completed in 2011.

Harmon was in town last week for the 15th Annual Southeastern Bank Management and Directors Conference, and sat down with SavannahBusinessJournal.com to discuss the merger.

Wells Fargo has no plans to close any of the 14 Wachovia branches, and in fact, may open more branches, and they will be hiring between 25 and 30 employees over the next year for the community banking division. Wells Fargo company will also be expanding other Wells Fargo divisions in the region, including insurance and mortgage divisions, and Wells Fargo Securities Advisors.

According to Gentry and Harmon, 15 new retail bankers will be hired this year, plus two to three personal bankers a month. And, Wells Fargo will maintain its 2008 and 2009 levels of financial support to non-profit organizations in 2010.

Wells Fargo’s payroll products, bank merchant accounts and its credit card system will be added during 2010, as well. New ATM’s are already coming into the region, which offer check scanning and an 8 p.m. daily banking close.

As to Wells Fargo’s philosophy in helping customers with home mortgages, nearly half a million Wells Fargo loan customers were provided with mortgage payment relief through active trial and completed loan modifications in 2009, and the bank wrote $711 billion in loans and lines of credit to help get the economy going again.

But, “banks are underwriting more prudently,” said Harmon. “We’re going to do what’s prudent to run a good bank.”

Locally, said Gentry, “we were not a big ‘A & D’ lender (acquisition and development) to neighborhood developers,” so the Savannah Wachovia division does not have the commercial real estate exposure locally that many Savannah community banks are now dealing with.

Wells Fargo/Wachovia’s commercial real estate lending is headquartered out of Jacksoville, Fl., she explained.

In 2009, Wells Fargo introduced a home mortgage conference program in the Atlanta area called “Leading the Way Home,” to help its customers with problem home mortgages, which has been very successful, said Harmon. He plans to expand the program in the Southeast.

“We worked with people on-site, at the events,” he said, adding that Wells Fargo now has 4,000 employees nationally working on home mortgages with its customers.

“What differentiates us,” Harmon said, “is a business model that is very community based, and relationship oriented. Wachovia had a similar model,” aiding the merger process, and helping the very large bank feel smaller and close to its customers at the local level. In fact, Wachovia was frequently rated as the number one bank in customer service, nationally.

While a big player nationally with 11 percent of the nation’s banking deposits and the market leader locally with 16 percent of Chatham County’s deposits, Wells Fargo’s roots are in small business and home lending, Harmon emphasized. He cited the 1998 acquisition of Wells Fargo by Minneapolis-based Norwest Bank.

“That was a bank very much in tune to small business, very much in tune with consumers, very much in tune with mortgage,” he said.

“We were not a Wall Street bank. Nor were we taking a lot of the risks that a lot of the Wall Street banks were taking.

2009 Financial Results

Wells Fargo & Company released its fourth quarter and annual results recently, reporting record revenue and strong net income of $12.3 billion for 2009.

Fourth quarter revenue was $2.8 billion, a four percent increase (annualized) from third quarter 2009, after pre-tax $500 million credit reserve build and $861 million of merger-related and incremental expenses.

The banking company completed a full repayment of its TARP preferred stock in December 2009, paying back $25 billion to the Federal government.

“The Wells Fargo model has been built to outperform our peers over time and through cycles. Clearly we have done just that again in 2009 and believe that this very same model and execution discipline will continue to outperform the industry in the years and cycles ahead,”said Chairman and CEO John Stumpf.

The merger with Wachovia essentially doubled the size of the company, and “has already generated tremendous synergies as we expand the time-tested Wells Fargo model to more customers and team members over a broader geography, including additional businesses that help customers succeed financially,” said Stumpf.

Growth in net charge-offs declined significantly in the quarter, and almost all major loan categories had relatively flat to declining losses, with the exception of commercial real estate, he said.

Editor's Note: Ted Carter contributed to this story.

BB&T Reports 50% Drop in 2009 Income; Decline in Non-Performing Assets

NEWS - Banking & Finance

Written by Administrator Friday, 22 January 2010 15:48

SBJ Staff Report

1/22/2010 - BB&T Corporation (NYSE: BBT) was one of the first banks in our region to report on its fourth quarter earnings numbers and final 2009 performance.

For the fourth quarter, net income totaled $194 million, or $.27 per diluted common share, compared with $307 million, or $.51 per diluted common share, earned during the fourth quarter of 2008.

The bank’s revenue growth for the quarter was up 22.7 percent, and the net interest margin improved to 3.80 percent for the quarter, after the take-over of Colonial Bank and its customer’s $1.5 billion in client deposits.

“I am pleased to report solid fourth quarter earnings, given the current credit cycle, and pleased to convey a number of very positive trends in our performance,” said chairman and Chief Executive Officer Kelly S. King. “We enjoyed record net revenues for 2009, driven by strong mortgage banking income of $658 million and record insurance income, which exceeded $1 billion, as well as solid growth in net interest income.

“Growth in average noninterest-bearing deposits continues to be exceptional, at 41.5 percent, and average client deposits increased 28.8 percent, reflecting continued improvement in deposit mix and the impact of the Colonial acquisition. Importantly, we experienced a significantly slower growth rate in nonperforming assets in the fourth quarter compared to recent quarters,” said King.

King said the Colonial Bank integration is progressing well, and will provide long-term strategic benefits for the bank.

For the full year 2009, BB&T’s net income was $877 million, compared with $1.5 billion earned in 2008. Diluted earnings per common share for 2009 totaled $1.15, compared with $2.71 earned during the same period in 2008.

Growth rate in nonperforming assets slowed to 7 percent, the early stage of stable credit indicators, according to King.

The linked-quarter growth rate in nonperforming assets slowed to 7 percent in the fourth quarter of 2009 compared to 23 percent in the third quarter of 2009. However, nonperforming assets as a percentage of total assets increased to 2.65 percent at Dec. 31, 2009, compared with 2.48 percent at Sept. 30, 2009. Annualized net charge-offs were 1.83 percent of average loans and leases for the fourth quarter of 2009, an increase from 1.71 percent in the third quarter. But, early indicators of problem loans continue to be relatively stable compared with the third quarter of 2009 and have improved significantly compared to year-end 2008 levels, BBT stated.

Profitability was harmed by a $725 million provision for credit losses totaled in the fourth quarter of 2009, an increase of $197 million compared with the fourth quarter of 2008, and exceeded net charge-offs by $237 million, or $.21 per diluted share.

The higher provision increased the allowance for loan and lease losses as a percentage of loans held for investment to 2.51 percent at Dec. 31, 2009, compared with 2.29 percent at Sept. 30, 2009. The increases in nonperforming assets and the provision for credit losses were driven by continued deterioration in housing-related credits with the largest concentration of housing-related credit issues in Atlanta, Florida and metro Washington, D.C., as well as some deterioration in the coastal areas of the Carolinas.

BB&T’s noninterest expenses also increased $349 million, or 34.5 percent, in the fourth quarter of 2009 compared with the same period in 2008, affecting net income. The increase included $115 million of additional foreclosed property expenses; an additional $34 million in FDIC insurance expense; increased pension costs of $17 million, and $38 million for post-employment benefits expense that are offset by additional noninterest income. Excluding these items, and approximately $159 million of growth resulting from purchase acquisitions, noninterest expenses were down 1.2 percent compared with the prior year’s fourth quarter on actual operations.

Small Banks Work To Gain Advantage in Banking Reform

NEWS - Banking & Finance

Written by Phillip Thursday, 14 January 2010 18:34

By Ted Carter
SBJ Staff

Georgia’s community bankers say the apparent willingness of Congress to kill the “Too-Big-to-Fail” doctrine gives them hope they’ll soon be able to compete more equally with the nation’s big banks.

But they say they still have cause to worry as the banking reform legislation approved in December by the House of Representatives heads to the Senate. Putting full regulatory and rule-making power into the hands of a single entity – the proposed Consumer Financial Regulatory Agency – is a bad idea, they say.

“Basically, they are talking about a banking czar all powerful for all banks,” said Steve Bridges, legislative affairs director for the Community Bankers Association of Georgia.

Small bankers fret that such a one-size-fits-all regulatory approach could put them under the same hammer that is about to come down on the nation’s major banks and financial services giants. That would hardly be fair considering the sins of the big institutions in causing the fall 2008 banking meltdown, Bridges said.

It’s a point House Financial Services Chairman Barney Frank emphasized during his committee’s work on the landmark banking reform legislation passed by the House in December. Frank noted there’s been a pattern of the larger institutions' failures imposing costs on the smaller institutions. He vowed to prevent that this time around.

Community bankers, through their national arm, the Independent Community Bankers Association, managed to persuade House members to make some changes favored by the small banks.

These included:

• Exempting most community banks from primary enforcement by a Consumer Financial Protection Agency.

• Exempting community banks from any Consumer Financial Protection Agency fees.

• Appointment of a special Consumer Financial Protection Agency ombudsman to advocate for community banks.

Further, the small banks persuaded lawmakers to include a change in the Federal Deposit Insurance Corporation assessment formula to assess insurance premiums based on a bank's assets, rather than on its domestic deposits, as is the case now.

The assessment change could save most community banks between 20 percent and 40 percent on their FDIC assessments, according to Bridges.

The assessment change would ensure that big banks bear a larger financial load that community bakers say more accurately reflects the risks to the FDIC.

The Independent Community Bankers Association began pushing for this soon after President Obama’s election. "The current deposit insurance premium assessment system places a disproportionate burden on community bank liquidity," the group said last December in a memo to Obama's transition team.

The ICBA noted that some big banks have foreign deposits or other funding sources they can tap for lending in the United States – but that don't count against them in FDIC assessments.

In a notice to Community Bankers Association of Georgia member last month, Bridges noted he wants an agency created for consumer compliance regulation that would be a separate agency from safety and soundness regulation.
As the Senate begins framing its version of the legislation, community bankers will push for the consumer protection agency to be run by a regulatory council of a dozen experts instead of an appointed czar, the Independent Community Bankers Association says.

Sidebar: Banking Groups Await Death of "too Big to Fail"

Banking Groups Await Death of Too-Big-to-Fail

NEWS - Banking & Finance

Written by Phillip Thursday, 14 January 2010 18:30

By Ted Carter
SBJ Staff

Victory is near for foes of the federal banking doctrine of “Too-Big-to-Fail” that played out in the fall of 2008 and put taxpayers on the hook for tens of billions of dollars.

Organizations such as the Georgia Bankers Association and the Community Bankers Association of Georgia say the doctrine’s death can’t come too soon.

“We want these guys to pay for a fund to use to wind down their risks,” said Steve Bridges, legislative affairs director for the Community Bankers Association of Georgia.

Under legislation already approved by the U.S. House of Representatives and expected to gain majority favor in the Senate, banking giants like Bank of America, Chase and Citigroup are headed for a “systemic” risk pool. They would be assessed premiums to pay for resolving their financial entanglements should they again reach the point of toppling and threaten to send shockwaves through the nation’s economy.

The Georgia Bankers Association represents banks of all sizes but has endorsed an end to the doctrine of banks as too big to fail. The association’s objection to the doctrine, said spokesman David Oliver, lies in the use of taxpayer money to bail out the big banks.

“We don’t want size restrictions” on banks, Oliver said, and added the organization hopes that a mechanism can be set up to help ensure large failures don’t occur.

Joe Brannen, president & CEO of the Georgia Bankers Association, said in a written statement that managing systemic risk must include a clearly-defined process and authority designated for handling the failure of a large financial institution so it doesn't send shock waves throughout the economy. “The Georgia Bankers Association supports the need to develop ways of recognizing interconnected and complex threats to our nation’s economy and financial services system,” he said.

“We want to get away from taxpayers having to prop up an institution because someone thinks it is too big to fail and establish a process to resolve complex, large financial institutions.”

Feeling burned by the savings & loan failures of the 1980s, Congress in 1991 passed a law that stipulated broken banks could be fixed only at the "least cost" to taxpayers, generally by covering only insured deposits of up to $100,000.
But the law gave regulators a loophole. It allows bigger bailouts if top economic officials, in consultation with the president, decide bailouts are needed to prop up the financial system.

That loophole has put community banks at a disadvantage ever since, as large depositors, including businesses, have felt they could put amounts above the Federal Deposit Insurance Corporation protected $100,000 (now $250,000) into the nation’s biggest banks without risk, said Bridges, the lobbyist for the Community Bankers Association of Georgia.
“They ought to pay for that,” Bridges said of the big banks’ ability to take in deposits far larger than those of community banks.

To get larger deposits from businesses looking to park their operating funds, community banks use “sweep accounts” by which the money is placed overnight in U.S. Treasury funds. The next day it’s swept back into the account so the businesses can use it, Bridges explained.

“What we’re saying is that we’re at a competitive disadvantage,” he added. “If one of us little guys gets in trouble you’ll just sweep us up into the pan and take us out of existence. So businesses decide they will only do business with the big banks because the government sees them as too big to fail.”

In Savannah, Coastal Bank President Tom Wiley has been puzzling over how the CEO of the nation’s 10th largest bank must have felt in fall 2008 after President George W. Bush called the chief executives of the nation’s nine biggest banks into the White House and ordered them to take bailout money.

That presidential act, Wiley said, “made it clear a division was being made.”

“If you were number 10 and not invited (to take the bailout money), where does that put you?” Wiley wonders.

‘Move Your Money’ Campaign in Spotlight

NEWS - Banking & Finance

Written by Phillip Thursday, 14 January 2010 18:27

From Staff Reports

Don’t like the new fees that big banks are charging your credit card?

Then vote with your feet, says the American Bankers Association, in response to public anger over new credit card fees banks have initiated to offset new federal restrictions that kick in next year.

In a confluence of sorts, the willingness of big banks to show the dissatisfied to the door comes as progressive news and commentary Web site Huffington Post gains momentum for a national campaign it has dubbed “Move Your Money.”

Hatched by Web entrepreneur Arianna Huffington and Rob Johnson, director of the Economic Policy Initiative at the Franklin and Eleanor Roosevelt Institute, the grassroots effort aims to persuade Americans to move their accounts from the nation’s bank giants to community banks or credit unions. Huffington touted the success of the two-week-old effort in an ABC news interview last week, saying that nearly 340,000 visitors to the “Move Your Money” Web page have clicked on half of the 16,000 zip codes in a data base set up to help people to find community banks in their neighborhoods that are rated healthy by the Institutional Risk Analytics organization.

Huffington, in a TV interview just after initiating “Move Your Money,” theorized community banks are more likely to lend and to help fuel a recovery among America’s small businesses. “Community banks are much more likely to reinvest that money in the community and actually help create jobs,” she said, pointing out that the banks the government bailed out have lent out hundreds of billions less since getting the government help.

In the spirit of the holiday season, “Move Your Money” produced a promotional Web video that features the Jimmy Stewart character George Bailey as the community banker fighting to stop rich skinflint Mr. Potter from taking over the town of Bedford Falls. Prayers and angelic intervention foil Mr. Potter and lead to a wonderful life for Mr. Bailey, his family and townspeople.

Don’t look for similar success from the “Move Your Money” effort, says the American Banker, a publication that provides news, analysis and commentary for banking and financial services executives.

America’s banking giants appear to be “no worse for the wear,” two weeks after the movement began, the publication said on its Web site.

But the big banks could take a hit on the margins, especially in their efforts to “cross sell” their services to account holders, American Banker says, conceding that Huffington and others have tapped into “an undeniable aspect of the consumer psyche — a festering resentment of big banks and a growing frustration with government officials seen as having donned kid gloves for a task that might have required brass knuckles.”

Eventually, the suspicion and anger that has been building toward big banks could cause damage at the margins, where much of a company’s fate is often decided, the American Banker says.

It could lead customers to look elsewhere when it comes to taking out mortgages, selecting wealth advisers or seeking any of the other products and services that banks would hope to cross-sell to clients, the banking publication says.
It adds that in the long term, the “Move Your Money” effort is likely to at least bring more education to consumers about banking services.

In Georgia, community banking lobbyist Steve Bridges says the “It’s a Wonderful Life” theme probably helped the campaign’s launch, considering it came during the holiday season when the classic Hollywood film gets frequent showings.

The video promo was “very cleverly done,” said Bridges, legislative affairs director for the Georgia Association of Community Banks.

Bridges wishes much success for the campaign, but notes that criticism of lending practices should take into account the regulatory challenges faced by banks of all sizes. All banks have been getting “beat over the head” by regulators, he said.

David Oliver of the Georgia Bankers Association, which represents banks of all sizes, said he does not expect much to come from the Move Your Money campaign. Where someone banks is usually determined by the services they need and the geographic convenience a bank offers, he said.

Tom Wiley, president of The Coastal Bank in Savannah, says he does not think a national campaign is needed to implore coastal Georgians to move their deposits to small banks. Upheaval in the banking industry has been sending customers his way for some time now, he said.

“I get the bulk of my business from the ‘too-big-to-fail’ institutions,” Wiley said. “People like to know their bank and know the decision makers when they sit across the table from them.”

Community Bank Designations Restated By FDIC

NEWS - Banking & Finance

Written by Administrator Thursday, 14 January 2010 18:25

SBJ Staff Report

The FDIC and network of federal bank regulatory agencies recently announced the annual adjustment to the asset-size thresholds used to define "small bank," "small savings association," "intermediate small bank" and "intermediate small savings association" under the Community Reinvestment Act (CRA) regulations.

As a result of the 0.98 percent decrease in the Consumer Price Index for the period ending in November 2009, the definitions of small and intermediate small institutions for CRA examinations will change as follows:

• "Small bank" or "small savings association" means an institution that, as of Dec. 31 of either of the prior two calendar years, had assets of less than $1.098 billion.

• "Intermediate small bank" or "intermediate small savings association" means a small institution with assets of at least $274 million as of Dec. 31 of both of the prior two calendar years, and less than $1.098 billion as of Dec. 31 of either of the prior two calendar years.

These asset-size threshold adjustments are effective Jan. 1, 2010, and affect regulations and various ratios that the banks must adhere to.

SunTrust Moves To Conform Top Executives’ Pay to TARP Requirements

NEWS - Banking & Finance

Written by Phillip Thursday, 14 January 2010 18:23

1/11/2010 - On Dec. 30, 2009, the Compensation Committee of the board of directors of SunTrust Bank, Inc. implemented a new compensation structure designed to comply with the U.S. Treasury’s Interim Final Rule on TARP Standards for Compensation and Corporate Governance. SunTrust received $4.85 billion in TARP funds in late 2008.
The Interim Final Rule prohibits the payment or accrual of bonuses (including most equity-based incentive compensation) to the "senior executive officers" shown in SunTrust’s proxy statement and to its next 20 most highly compensated employees.

However, the committee approved an increase in the cash salary for 2010 for William H. Rogers Jr., president, to $560,000 “to reflect increased responsibilities he has assumed since his promotion last year,” according to the company’s SEC filing.

Also, as required by the Interim Final Rule, SunTrust will not pay cash bonuses for 2009 to its named executive officers and will not pay any TARP-permitted long-term restricted stock bonuses for 2009 to its named executive officers.

But the committee approved "salary share" amounts for the bank’s top officers, including James M. Wells III, William H. Rogers Jr., Mark A. Chancy, Thomas M. Freeman and Timothy E. Sullivan, effective Jan. 1, 2010, to be paid entirely in the form of "salary shares" as contemplated by the Interim Final Rule.

The annual rates of salary shares for the named executive officers established by the committee are: $2,990,000 for Wells; $1,060,000 for Rogers; $850,000 for Chancy; $830,000 for Freeman; and $830,000 for Sullivan. SunTrust will grant the salary shares of stock each pay period beginning with the pay period that begins on Jan. 1, 2010, in the form of stock units under the SunTrust Banks, Inc. 2009 stock plan.

Local Banks Help Protect Business Customers from Fraud

NEWS - Banking & Finance

Written by Phillip Thursday, 14 January 2010 18:20

Savannah Business Journal Special Report

1/11/2010 - A number of local banks have added security measures to protect their business customers from the growing threat of Internet fraud.

Earlier this year, the Financial Services Information Sharing and Analysis Center (FS-ISAC), an industry group created to share data about critical threats to the financial sector, alerted its members that organized cyber-gangs in Eastern Europe are stealing the banking credentials of small and mid-size U.S. companies and using the information to wire funds to money “mules” in the United States who then forward the money to the criminals.

Many of these schemes start by sending an e-mail to the company’s controller or treasurer. The message contains either a virus-laden attachment or a link that – when opened – installs malicious software designed to steal passwords. The criminals then use the passwords to initiate a series of wire transfers, usually in increments of less than $10,000, to avoid banks’ anti-money-laundering reporting requirements.

The “mules” who help these criminals may be willing or unwitting individuals in the United States who often are hired by the criminals via popular Internet job boards. The mules set up bank accounts, withdraw the fraudulent deposits and then wire the money to fraudsters via popular money and wire transfer services.

Aware of the potential danger, The Coastal Bank, a community bank based in Savannah, has been adding extensive security measures to its online banking platform and wire transfer procedures. Mandy Ownley, vice president of Sales, Service and Cash Management at The Coastal Bank, said businesses should not shy away from the cost and time savings of online banking because of the threat of fraud.

“Online banking is an excellent tool if it is used appropriately,” Ownley said. “Banking online gives the business owner the ability to monitor their account activity in real time all the time and check on anything that seems fishy.”
While business identity theft via the Internet is a growing problem, check fraud is still more likely to be perpetrated through the mail. But to protect themselves from Internet criminals’ increasingly stealthy maneuvers, Ownley said businesses should check to see if their bank has an effective system in place to protect businesses from fraud.

Banks that do have prevention systems in place have been effective in combating cyber crime, according to the American Bankers Association (ABA). The ABA reported that through 2006, the nation’s banks caught 92 percent of check fraud attempts, saving about $12 billion in attempted fraudulent charges.

The Coastal Bank’s Online Business Banking, for example, uses a four-part login for business users to verify both company and user level access. The system uses a double-blind process for issuing passwords, 128-bit encryption, and locks out users with repeated failed login attempts.

“These measures alone would make it very difficult for a cybercriminal to steal our customers’ information,” Ownley said. “But we take many additional steps to ensure the safety of our business banking customers. We focus on our business customers, and we’re always looking for extra features we can put in place to protect businesses from fraud.”
These features may have protected recent victims such as Gainesville-based Slack Auto Parts, which lost nearly $75,000 when fraudsters used malicious software, or malware, to steal the company’s online banking credentials and distribute the funds to six money mules across the country. The infection from Ligats (also known as “Clampi) hid inside of their systems for more than a year without being detected by the company’s anti-virus software, according to a report in the Washington Post.

Because most of the malicious software currently attacking businesses lie in waiting on hacked or malicious Web sites, the FS-ISAC recommends that commercial banking customers “carry out all online banking activity from a stand-alone, hardened and locked-down computer from which e-mail and Web browsing is not possible.”

In addition, the Georgia Bankers Association (GBA) has a service available to members where they can share information about financial crimes with other banks and law enforcement officers. FinCrime is a national database where financial institutions can share information about potential threats to the banking industry, including criminal plots, aliases and more.

“Information sharing is critical,” said GBA Communications Director David Oliver. “Just being aware of scams like this helps us to put protections in place for our customers.”

Oliver said protections such as the ones The Coastal Bank has implemented are becoming increasingly common. He said businesses should talk with their bankers about what protections they provide. He also said businesses should make sure that they have the latest anti-virus protections for their computers and a strict policy on who has access to financial passwords and accounts. Further, he warned that business owners should never give out account information unless they initiated the call and that banks would not ask for sensitive account information through unsecure channels such as e-mail.

Vigilance is important because commercial banking customers have roughly two business days to spot and dispute unauthorized activity under the Uniform Commercial Code. “If it just doesn’t look right to you,” Oliver said, “notify your bank immediately.”

FDIC Closes The Tattnall Bank in Reidsville

NEWS - Banking & Finance

Written by Phillip Thursday, 14 January 2010 18:18

1/1`1/2010 - The Tattnall Bank in Reidsville, Ga., was closed in December by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with HeritageBank of the South, headquartered in Albany, Ga., to assume all of the deposits of The Tattnall Bank.

The two branches of The Tattnall Bank reopened during normal business hours as branches of HeritageBank of the South. Depositors of The Tattnall Bank automatically became depositors of HeritageBank of the South.

As of Sept. 30, 2009, The Tattnall Bank had total assets of $49.6 million and total deposits of approximately $47.3 million. HeritageBank of the South did not pay the FDIC a premium for the deposits of The Tattnall Bank. In addition to assuming all of the deposits of the failed bank, HeritageBank of the South agreed to purchase $48.5 million of the failed bank's assets. The FDIC retained the remaining assets for later disposition.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $13.9 million. HeritageBank of the South's acquisition of all the deposits was the "least costly" resolution for the DIF compared to alternatives. The Tattnall Bank is the 127th FDIC-insured institution to fail in the nation this year and the 24th in Georgia. The last FDIC-insured institution closed in the Georgia was First Security National Bank in Norcross, which closed in early December.

Banking & Finance

Feb.15 – BANKING & FINANCE: Governor Perdue Signs House Bill 926

The Blending of Wells Fargo, Wachovia Moving Forward with Care

BB&T Reports 50% Drop in 2009 Income; Decline in Non-Performing Assets

Small Banks Work To Gain Advantage in Banking Reform

Banking Groups Await Death of Too-Big-to-Fail

‘Move Your Money’ Campaign in Spotlight

Community Bank Designations Restated By FDIC

SunTrust Moves To Conform Top Executives’ Pay to TARP Requirements

Local Banks Help Protect Business Customers from Fraud

FDIC Closes The Tattnall Bank in Reidsville

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