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WesternBanker
ISSUE 2 2021 A P U B L I C AT I O N O F W E S T E R N B A N K E R S A S S O C I AT I O N
WHAT’S INSIDE:
8 10 14
CALIFORNIA ADVANCES COVID BOARD OVERSIGHT FINANCIAL SERVICES FIRMS EMERGE
RELIEF TO STRUGGLING AND THE ESG FRAMEWORK FROM A YEAR OF WHIPSAW CHANGE
CITIZENS
2 www.westernbankers.com | WesternBanker
WesternBanker | Issue 2 2021 3
Contents ISSUE 2 2021
P.10
P.8
DEPARTMENTS
FEATURES
6 Message From WBA President
8 California Advances COVID Relief to Struggling Citizens and CEO Stephen G. Andrews
10 Board Oversight and the ESG Framework 30 2021 WBA Advertiser Index
14 Financial Services Firms Emerge
From A Year Of Whipsaw Change
18 Member Profile
20 Welcome Aboard
P.14
24 Member Update
27 BankWork$ Helps Young Adults
Find Meaningful Careers
28 Ask The Compliance Guru
View this issue and past issues of WesternBanker online any time at www.westernbankers.com
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Western Bankers Association, 1303 J Street, Suite 600, Sacramento, CA 95814, P: 916-438-4400/F: 916-441-5756, Email online at www.westernbankers.com.
©2021 Western Bankers Association | NFR Communications, LLC. All rights reserved. WesternBanker is published six times each year by NFR Communications, LLC for Western Bankers Association and
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4 www.westernbankers.com | WesternBanker
WesternBanker | Issue 2 2021 5
Message From WBA President and CEO
Stephen G. Andrews
Stephen G. Andrews
President and CEO
Western Bankers Association
SAndrews@westernbanker.com
Our industry has not
missed a beat during
this pandemic. We have
innovated, advocated
and delivered for our
clients, and this focus
on serving clients has
never wavered.
Banks Key to Economic Recovery
A
full year has passed since COVID-19 altered the primary bank and 96 percent rate their banks’ customer
way we live and work, and while the pandemic is service as excellent, very good or good. Also encouraging
still front and center in our lives and businesses, we is that eight out of 10 U.S. adults said banks are important
have much to be hopeful for. According to the New York to the nation’s economic recovery.
Times, more than 70 million Americans have received at
Banks continue to facilitate Payment Protection Program
least one dose of the vaccine as of March 15 — a critical
loan applications and are advocating to extend the ap-
step to reducing the number of new COVID-19 transmis-
plication deadline to ensure that businesses in need have
sions. Things are beginning to look up. an opportunity to participate. In only two months, banks
Our industry has not missed a beat during this pandemic. in the WBA footprint have facilitated more than 257,000
loans with a value of $23 billion to help local businesses
We have innovated, advocated and delivered for our cli-
keep their doors open and employees on the payroll.
ents, and this focus on serving clients has never wavered. A
recent survey, conducted by Morning Consult on behalf of As part of our mission to provide education and profes-
the American Bankers Association, found that Americans sional development, we are looking forward to the virtual
remain highly satisfied with their bank and value their Women in Banking Forum on April 6-8. This three-day
banks’ support during this pandemic. In fact, nine out of event brings together women in the banking industry for
10 account holders are very satisfied or satisfied with their education, connection and empowerment. The speaker
6 www.westernbankers.com | WesternBanker
line-up includes TEDx Speaker and Developer Advo-
cate Sydney Lai, and Olympic Gold Medalist Summer
Sanders, as our keynote speakers, plus Teresa Bryce Ba-
zemore, president and CEO of the Federal Home Loan
Bank of San Francisco, along with more than 20 dynam-
ic speakers who will present on timely and relevant in-
dustry topics, including the economy, regulatory and leg-
islative updates, leadership, gender diversity, and much
more. We are encouraged that nearly 300 women have
already registered for this event and hope that you will
encourage your co-workers and peers to join us.
We are also happy to share that we welcomed several
new members to the association this year, including three
banks. Our newest members are featured in this maga-
zine; I hope you will help us welcome them.
As always, we are grateful for your membership and sup-
port. Our team is dedicated to serving this industry and
we are grateful for the trust you have given us.
Sincerely,
Women in Banking Forum ALL NEW
Date: April 6-8, 2021 | VIRTUAL VIRTUAL WORKSHOPS
Bank Counsel SePLQar
May 27, 2021 | VIRTUAL January 19, 2021
Call Report Preparation
Directors Workshop
June 22-23, 2021 | VIRTUAL January 26, 2021
BSA/AML
Education Summit
August 2-27, 2021 | Hyatt Regency Huntington Beach February 1, 2021
M&A Update 2021
Annual Conference
September 9-14, 2021 | Fairmont Orchid, Kamuela, HI
March 11, 2021
Regulatory Compliance Conference Risk DQG6DIHW\ 6RXQGQHVV
Cannabis Forum
October 1-15, 2021 | Caesars Palace, Las Vegas
/HQGHUV &KLHI&UHGLW2ɝFHUV&RQIHUHQFH
November 15-17, 2021 | Ritz Carlton Laguna Niguel
Bank Presidents Seminar
January 11-14, 2022 | Four Seasons Biltmore Santa Barbara
To learn more, visit: westernbankers.com/professional-development
WesternBanker | Issue 2 2021 7
California Advances
COVID Relief to Struggling
Citizens
By Kevin Gould, SVP, Director of Government Relations, California Bankers Association
S
ince the Legislature’s return in January, the state has of 2020, by extending the definition of “effective time pe-
taken swift action to advance COVID-19 relief to riod” from April 1 to September 1, 2021.
struggling Californians. Economic assistance pro-
As a reminder, AB 3088 requires mortgage servicers to
vided through the state’s efforts are designed to augment
provide a notice to borrowers in circumstances where
federal relief and extend support to individuals and small
forbearance is denied. The notice must set forth the reasons
businesses that may not have received help in prior efforts.
why forbearance is denied and if there is a defect in the
In late January, the Legislature passed SB 91 (Committee borrower’s request, the mortgage servicer must identify the
on Budget and Fiscal Review) Chapter 2, Statutes of 2021, defect and give the borrower an opportunity to cure the
defect. These notice provisions were set to sunset on April 1,
extending the renter eviction moratorium relief that was
but have been extended in SB 91 until September 1, 2021.
set to expire on January 31. While the measure focuses
Also, last year’s compromise requires that mortgage servicers
predominantly on renters and landlords, the legislation
comply with federal requirements pertaining to borrower
contains one provision impacting residential mortgage
options following a COVID-19 related forbearance.
servicers. More specifically, the legislation amends Civil
Code Section 3273.1, which was added by last year’s com- Geared to provide protections to small landlords, last
promise measure, AB 3088 (Chiu) Chapter 37, Statutes year’s compromise expands California’s Homeowner Bill
8 www.westernbankers.com | WesternBanker
of Rights by applying its provisions
to non-owner occupied residential
1-4 properties thereby requiring,
among other provisions, that mort- Economic assistance provided through
gage servicers explore options with
the landlord to avoid foreclosure.
the state’s efforts are designed to
These expanded protections remain
in place until January 1, 2023.
augment federal relief and extend
In mid-February, the Governor an- support to individuals and small
nounced a $9.6 billion agreement
with the Legislature on early, im- businesses that may not have received
mediate action items that were
initially outlined in the Governor’s
help in prior efforts.
January budget proposal. Several
measures are included in this agree-
ment that seek to provide relief to paid sick, medical, or family leave, association continues to work with
individuals and small businesses ex- and insurance premiums; working stakeholders to ensure that these
periencing financial hardship due to capital and overhead, including payments are readily identifiable by
the pandemic. rent, utilities, mortgage principal, financial institutions through the
and interest payments; and, costs inclusion of unique indicators on
Among these measures, CBA sup- associated with federal, state, or ACH payments or on state checks
ports AB 80 (Burke), which al- local guidelines for reopening with and that these payments be protect-
lows businesses to deduct up to required safety protocols, such as ed from garnishment.
$150,000 of business expenses that personal protective equipment, test-
were paid for using forgiven federal With the recent passage of Presi-
ing and employee training expenses.
Paycheck Protection Program loans dent Biden’s $1.9 trillion econom-
or Economic Injury Disaster Loan The state will also be furnishing ic relief package, the early action
funds. CBA agrees with the under- economic impact payments to eligi- by the state will provide addition-
lying intent of the measure which is ble Californians through the newly al meaningful relief to struggling
designed to conform with federal approved Golden State Stimulus Californians. As with previous
tax relief, and to assist California plan. SB 88 (Committee on Budget federal efforts, the state’s relief
businesses struggling under the eco- and Fiscal Review) authorizes one- measures are an important step to-
nomic strain of the pandemic. time direct payments of $600 to ward economic recovery.
those who: 1) claim the California
Another measure supported by Kevin Gould is the Senior
CBA, SB 87 (Caballero & Min), Earned Income Tax Credit or that Vice President and Direc-
appropriates $2 billion for the Cali- filed a tax return using a federal tor of Government Rela-
fornia Small Business COVID-19 Individual Taxpayer Identification tions for the California
Relief Grant Program which pro- Number and have income less than Bankers Association. He
vides grants to small and micro $75,000; 2) are California Work joined the CBA in 2004,
businesses. Administered through Opportunity and Responsibility bringing with him more
the Small Business Advocate within to Kids Act recipients; 3) receive than seven years of legis-
the Governor’s Office of Business benefits under the Supplemental Se- lative experience. In his role, he oversees the man-
and Economic Development, grants curity Income/State Supplemental agement and operation of CBA’s state and federal
will be made available for up to Program; or 4) are Cash Assistance government relations department and serves as
$25,000 to certain small businesses Program for Aged, Blind, and Dis- one of CBA’s three registered lobbyists. Gould’s ad-
and nonprofits. Grant funds may be abled Legal Immigrants recipients. vocacy responsibilities and issues focus mainly in
used for costs associated with the Following work done at the fed- the areas of bank operations, commercial lending,
COVID-19 pandemic, including: eral level surrounding the issuance and wealth management issues. You can reach him
payroll costs; health care benefits; of economic impact payments, the at kgould@calbankers.com.
WesternBanker | Issue 2 2021 9
Board Oversight and
the ESG Framework
By Maurine Padden, EVP and COO, Western Bankers Association
A
s we explored in the previous Director’s Corner Janet Yellen announced that she is establishing a Treasury
(WesternBanker, Jan/Feb 2021) discussing team to focus on climate change.
the environmental, social and governance
(ESG) principles, there are several reasons why it is The New York Department of Financial Services recently
issued guidance for its regulated banks regarding the im-
important for banks to incorporate ESG goals into
portance of recognizing the effects of climate risk on the
their overall corporate strategies. The benefits a bank
financial system broadly and bank assets and operations
may realize include:
specifically. These actions are clear indicators that bank-
• New product and services innovation; ing regulators intend to have their voices heard in the
• Increased operational efficiencies; ESG arena.
• Reputation enhancement;
• Enhanced employee engagement, productivity Diversity in the workplace, vendor space and in the
and retention; boardroom are also in the forefront of many banks’
• New employee attraction; agendas as financial institutions and other corporations
• Addressing investor expectations; and focus on promoting and enhancing their social goals of
• Proactive positioning of the institution to meet diversity and inclusion.
future regulatory expectations.
Although bank regulators have yet to require that banks The board plays a critical role in steering and setting
adopt ESG principles, environmental goals related to cli- the strategic direction of the ESG goals that the bank
mate change are one area of current regulatory focus. has identified as part of its overall strategic plan for the
institution. In doing so, the board works with manage-
Federal Reserve Board Governor Lael Brainard has identi- ment to set risk tolerances and provide oversight and
fied climate risk management as part of the Fed’s financial management of the ESG strategy execution by the bank.
stability responsibilities. In addition, Treasury Secretary The board will also establish management reporting and
10 www.westernbankers.com | WesternBankerdisclosure policies and practices to rately created ESG sub-committee. Diversity and Inclusion Framework
ensure accountability for ESG goal Factors to consider in selecting the Boards seeking to establish and
performance as well as direct the appropriate board model may in- implement the “S” or social goal
incorporation of specific objectives clude whether or not the full board of diversity and inclusion as part
and measures in management per- has the time and expertise to pro- of its ESG principles may wish to
formance plans. Developing and vide the oversight needed or wheth- consider the standards set forth
implementing a solid ESG frame- er an existing subcommittee or a in the diversity and inclusion
work for the bank begins with ap- newly-created subcommittee would framework proposed by federal
propriately structuring the board be better equipped to execute the regulators upon enactment of the
so that it may optimally perform board’s duties. Dodd-Frank Act. The framework
its duties. is available to banks that choose
Selecting the most appropriate gov- to use it on a voluntary basis.
Board Structure ernance structure for the bank will When properly calibrated to fit the
Depending upon the size and com- assure that the board has the right size and complexity of the institu-
plexity of the institution, the board skills and competencies in place to tion, this framework can provide
may wish to perform its ESG over- effectively perform its oversight func- a roadmap for bank boards work-
sight function as a full board, or tion and provide guidance to man- ing with their management teams
through delegation to an existing agement. If needed, the board should to establish and evaluate perfor-
board committee such as the risk or seek external expertise to support the mance of the bank’s social goals.
audit committee or through a sepa- execution of their obligations. CONTINUED ON PAGE 12
WesternBanker | Issue 2 2021 11The framework includes standards Workforce Profile Disclosure and Transparency
in four key areas: and Employment Practices The bank incorporates its diversity
• Organizational Commitment The bank develops and uses employ- and inclusion goals into the strategic
• Workplace and Employment ment policies and practices that cre- plan and makes its progress in meet-
Practices ate diverse applicant pools. ing its strategic plan goals available to
• Procurement and Business the public on its website or through
Practices (i.e., third-party The bank uses qualitative and quan-
other communication channels.
contractor/vendor/supplier titative measurements to assess prog-
diversity) ress in meeting articulated diversity The bank uses its website or other
• Disclosure and Transparency and inclusion goals for hiring, pro- public communication channels to
moting, career development and re- promote employment and contracting
Organizational Commitment Standard
tention throughout all staffing levels opportunities available at the bank
The bank possesses a diversity and
of the organization from entry-level
inclusion policy developed and ap- that promote diversity.
to executive management and peri-
proved by the board and senior man-
odically reports progress to the board ESG goals and performance are in-
agement that includes a regular prog-
ress reporting function to the board. creasingly seen by many bank em-
The board holds management at all
ployees, stakeholders including inves-
levels accountable for achieving di-
The bank incorporates diversity and tors and customers as key factors in
versity and inclusion goals.
inclusion goals in its strategic plans choosing to do business with the or-
for employment (recruiting, hiring, Procurement and Business Practices ganization. Fortunately, banks have
retention and promotion) and third- (Third-party Contractor/Vendor/ a culture of community commitment
party contracting which are devel- Supplier Diversity) and engagement. Incorporation of
oped and approved by the board and The bank has developed and imple- more targeted and effective ESG prin-
senior management. mented third-party contractor/ven- ciples and goals into bank strategic
The bank provides training and edu- dor/supplier diversity policies that plans is not a stretch, simply a greater
cational opportunities to its entire promote fair opportunities for minor- opportunity for banks to refine and
workforce from the C-suite to line ity-owned and women-owned busi- enhance their focus and resulting
employees regarding diversity and nesses to compete for bank goods and achievements, all of which will con-
inclusion on a consistent basis. services contracts. tribute to the bank’s value creation
and long-term success.
The bank has a senior officer with The bank uses quantitative mea-
sufficient training and expertise surements to assess success in meet- Maurine Padden serves as
in diversity and inclusion policies ing third-party contractor/vendor/ EVP and Chief Operating
and practices who is charged with supplier diversity goals. Measure-
Officer where she oversees
oversight and management of the ments may include an analysis of
WBA’s advocacy efforts in
bank’s goals and is provided dedi- the percentage of contract dollars
the legislative, regulatory
cated resources to support diversity awarded to minority-owned and
women-owned businesses by race, and legal arenas on behalf
and inclusion goals and initiatives
of the organization. ethnicity and gender, as well as the of the association’s members in additon to providing
number or percentage of contracts operational support to the WBA team. As a member
The diversity and inclusion goals awarded to minority-owned and of WBA’s senior management, she contributes to
adopted by the bank include spe- women-owned subcontractors. the development and execution of the association’s
cific steps to promote a diverse pool
strategic goals and initiatives. Maurine received her
of candidates to meet employment The bank measures the success of
law degree from University of the Pacific’s McGeorge
hiring, recruitment and retention its practices employed to promote
objectives as well as board member- a diverse supplier pool and pro- School of Law and her bachelor’s degree in govern-
ship and senior management/leader- vides periodic progress reports to ment and economics from California State University,
ship selection. the board. Sacramento.
12 www.westernbankers.com | WesternBankerFinancial Services Firms Emerge
From a Year of Whipsaw Change
By Brandon Koeser, Brandon Hollis and David Mamane, RSM
Financial institutions: Banks leave “We expect the aid package will bolster U.S. growth con-
the pain of 2020 behind ditions in the first half of 2021, likely preventing another
Banks are looking at 2021 with the hope that the human economic downturn, which our forecast had previously im-
and economic toll of 2020 can be left in the past. plied,” said RSM U.S. Chief Economist Joseph Brusuelas.
Few could have expected such a difficult year for banks; Because of the coronavirus relief package, the continu-
after all, they were coming off a record year for earnings ing distribution of a vaccine and the growing prospects of
in 2019, and the future seemed bright. But then in March, further stimulus given Democratic control in Washington,
they were confronted by a global health pandemic that D.C., RSM revised its forecast for first-quarter growth in
sent the economy into a tailspin, prompting the Federal
2021 to 2.5 percent, up from 1.1 percent, and an increase
Reserve to cut the federal funds rate twice, to zero, and
in second-quarter growth to 8.7 percent from 4.6 percent.
Congress to step in with a fiscal aid package.
Further, as the economy continues to recover, all signs
The effects of these cuts fell squarely on the banks, which
point to robust growth in the second half of the year. RSM
depend on interest earned from loans for a majority of
forecasts year-over-year growth in gross domestic product
their income. The result was that their net interest margins
were compressed to record lows, according to the Federal for 2021 of roughly 5.4 percent, with risk to the upside.
Deposit Insurance Corporation. After the traumatic events of 2020, it’s hard to think about
there being a possibility that things could be better than
Net interest margin by bank asset size forecast, but it’s certainly an option.
5.00
Now, with economic conditions improving, we are likely
Net interest margin (%)
4.50
to see some modest inflation and a steepening of the yield
4.00
3.50
curve along the midrange to the longer end. Looking at the
3.00
Fed’s five-year, five-year forward rate, a key measure of fu-
2.50
ture inflation, we can see this steepening.
2.00
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2020 Federal Reserve five-year, five-year forward rate
Banking average Assets > $250B Assets $10B - $250B
Assets $1B - $10B Assets $100M - $1B Assets < $100M
2.25
Source: Federal Deposit Insurance Corporation; RSM US LLP 2.00
1.75
Inflation rate (%)
But in late December, President Trump signed a $900 bil-
1.50
lion fiscal aid package to provide direct fiscal aid to house-
1.25
holds and businesses equal to 4.25 percent of gross do-
1.00
mestic product. This package, the second-largest economic
0.75
aid measure in the nation’s history, was expected to give a
0.50
much-needed boost of fiscal relief to the economy, just as Jan. Feb. March April May June July Aug. Sept. Oct. Nov. Dec.
the novel coronavirus was surging again. Source: Federal Reserve; RSM US LLP
14 www.westernbankers.com | WesternBankerIn addition, RSM’s projection for the closely watched have different preferences for how they engage with their
10-year Treasury yield, which bottomed out in August creditors is key to developing a collection approach that is
at 0.51 percent, shows the rate approaching 1.3 percent effective and accepted by the borrower. Successful collec-
by the end of 2021. Already, in the early days of the new tion companies are able to identify the mode of communi-
year, the yield pushed past 1 percent. cation that works best for each customer segment, deliver
tailored messages to their customers and communicate in
Along with the rising rates, improving economic con- a manner that sets the right tone.
ditions will lead to a positive impact on loan portfo-
lios as banks return to normal lending — not stimu-
Scalability
lus lending — and see the benefits of a strong growth
Investments in technology-driven collection functions
cycle easing credit concerns. This, in turn, will lead to
can more easily be adapted to changing markets and
fewer credit losses.
product offerings than a traditional brick-and-mortar
Rising rates, new lending and fewer credit losses are operation. Code-driven collections systems can be
enough to spur optimism in any banker. adapted to new regulations and expanded without the
same investment in staffing and physical space. This al-
The takeaway lows financial services companies to nimbly respond to
While 2020 was characterized by stimulus funding, changes in the competitive landscape.
low interest rates and credit concerns, 2021 will most
likely see a recovery and a revival of the U.S. economy. Artificial intelligence
Banks will be positioned to capitalize on the momen- Technology-driven solutions provide a wealth of data on
tum and help drive economic growth while also seeing customers and their payment behaviors to enable the de-
the benefit to their financials. velopment of a personalized approach. There are many
- Brandon Koeser solutions developed by fintech companies that assist in pre-
dicting customer delinquencies using combinations of his-
Specialty finance: The challenge torical data, easily accessible demographic information and
of collecting consumer debt behavioral influencers (such as call notes). Collection strate-
The ability to collect on consumer debt is important to gies can then be developed to communicate with borrowers
the profitability of any lending institution or debt col- before they reach the later stages of delinquency.
lection firm, and these companies must invest heavily
in infrastructure and resources to ensure they have an The takeaway
effective collections function. Collecting on consumer debt will always be challeng-
ing. Companies that invest in technology will create a
The regulatory environment is continually changing. For
nimble collections function that can respond to an ever-
example, in October, the Consumer Financial Protection
changing and complex regulatory environment, while
Bureau (CFPB) set new guidelines on communications be-
remaining profitable.
tween lenders and borrowers — which required a consid-
- Brandon Hollis
erable investment by lenders and debt collection agencies.
Then there was the COVID-19 pandemic, which only Insurance: A public-private push to cover pandemics
added to the challenges for specialty finance companies As COVID-19 vaccines are administered and the global
as they adapted to remote work environments. economy begins to show signs of recovery, leaders in
business and government have been looking for ways to
Now, with the Biden administration in charge, specialty mitigate the risk of future pandemics. In the traditional
finance companies face the prospect of more vigorous insurance model, the losses of the few are paid for by the
oversight and enforcement actions. RSM has identified premiums of the many. But global pandemic risk is un-
three trends defining the future of collections. insurable by nature; this is because risk diversification, a
core tenet of the insurance business, is not possible. For
Personalization this reason, a government backstop is necessary to sup-
Collecting on consumer debt does not lend itself to a port the insurance industry and to build resilience in busi-
one-size-fits-all approach. Customer preferences and de- nesses going forward.
mands vary dramatically. Understanding that customers
CONTINUED ON PAGE 16
WesternBanker | Issue 2 2021 15A first attempt have only been amplified by the pandemic. Many commer-
In May 2020, Rep. Carolyn Maloney of New York proposed cial insurance carriers are implementing broader infectious
legislation for the Pandemic Risk Insurance Act (PRIA), which disease exclusions in their policies, and in extreme cases,
would establish the Pandemic Risk Reinsurance Program they are outright declining to renew policyholders in certain
within the Department of the Treasury. higher-risk industries.
The program would provide compensation to insurers up The ripple effect of being underinsured or uninsured can
to a $750 billion cap if they incurred losses as a result of be crippling to a business where insurance is required for
coverage related to pandemics on or after Jan. 1, 2021. financing activities, for example. Middle market busi-
nesses are not immune to these trends and are often hit
But despite broad agreement last fall that the economic harder compared to larger counterparts because they lack
impact of the pandemic, estimated at approximately $1 the capital to self-insure against the coverage gap and to
trillion per month, cannot be borne by the property and provide liquidity in a time of crisis.
casualty insurance industry, the PRIA bill stalled in Con-
gress, and managing future pandemic risk remains an The middle market is not immune to price increases as they affect
outstanding issue for the government and the insurance all sizes of accounts
industry to address. 10
8
This is not the first time that the insurance industry and
6
the government have been at an impasse. In previous cas-
Rate increase (%)
4
es, they have found solutions including the Terrorism Risk 2
Insurance Act, the National Flood Insurance Program and 0
the Federal Crop Insurance Program. -2
-4
Mind the coverage gap -6
Without a way for the private sector or the government to
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address pandemic risk, businesses renewing their commer- Jumbo accounts (Premium > $1M) Large accounts (Premium $250K - $1M)
Medium accounts (Premium $25K - $250K) Small accounts (Premium up to $25K)
cial insurance programs going into 2021 are experiencing
significant price increases, but in some cases are receiving Source: MarketScout; Bloomberg; RSM US LLP
much less coverage.
The takeaway
A public-private program could offer cost-effective access
Commercial lines markets have continued to harden
during the pandemic to insurance against pandemic risks that would be unin-
surable in the private insurance market. It would allow
10
the insurance industry to deliver a great customer experi-
8
ence and stability to the economic recovery while gaining
6
greater control over the risk on their balance sheets.
Rate increase (%)
4
- David Mamane
2
0 Brandon Koeser is a senior analyst at RSM US based in Minneapolis, specializing
-2 in the financial services industry.
-4
Brandon Hollis is a senior manager in assurance at RSM US specializing in serv-
-6
ing clients in the specialty finance industry.
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Commercial lines aggregate Property Business interruption General liability David Mamane is a director and financial services senior analyst with RSM
Canada. He provides a diverse range of property & casualty, actuarial, insurance
Source: MarketScout; Bloomberg; RSM US LLP
management and enterprise risk consulting services for large financial institu-
tions and clients in various industries.
Commercial insurance markets have hardened steadily over
All three are part of RSM’s cutting-edge Industry Eminence Program, providing
the past five years because of underlying claim trends, which
deep insight on the latest economic, business and technology trends.
16 www.westernbankers.com | WesternBankerWesternBanker | Issue 2 2021 17
MEMBER PROFILE
Q: How did you get I just love what I do. I have always had a passion for
your start in banking? working with people and being engaged in a way that
I can be helpful. I grew up working and volunteering
Diedre Porche: I origi- through community service with my family and this is
nally wanted to study where I learned the impact this can have on the people
law and was headed you serve. I have the privilege of doing this for a living
down that path. But through JPMorgan Chase.
an opportunity arose
while I was completing
my master’s degree at Q: JPMorgan Chase has been a leader in confronting
Texas A&M. Through racial inequities. Last year, your firm established its
the university, I landed “Path Forward” initiative. What is this and what does
a placement in an of- it address?
Diedre Porche ficer development pro-
Diedre Porche: I haven’t been more proud of JPMorgan
Managing Director, Division Director, gram that JPMorgan
Chase than when it announced its Path Forward initia-
California Business Banking Chase was sponsoring.
JP Morgan Chase and Co. Programs like that are tive last year. This is a significant program — a $30 bil-
amazing. For an entire lion commitment over the next five years that will help
year I navigated all the roles — front office and back of- close the racial equity gap for Black and Latinx people
fice banking, from underwriting to cash management, and in our country.
operations process to sales. I learned how the bank works
It is inspiring working for a firm that puts money di-
and built great relationships along the way. I came out of
rectly into the communities it serves by enhancing prod-
the program and landed in a loan officer role and worked
ucts and services that meets their needs. It is committing
my way up from there.
real money and taking meaningful steps to address racial
I discovered very quickly that I was able to take this passion inequities. Building on our firm’s strong foundation of
for connecting with people and working in communities existing commitments, these new investments will create
and hone it into a skill around educating and supporting the real impact for communities of color.
needs of a community. It’s an amazing responsibility being
What excites me most about this initiative is that it in-
able to touch so many lives by helping people realize their
cludes a $2 billion commitment for 15,000 loans to small
dreams day-in and day-out whether they are business own-
businesses. We will also invest $8 billion for 40,000 loans
ers, families who are starting an education fund for their
to help Black and Latinx households get on the property
child or saving money to purchase their first home. Through
ladder. And for existing homeowners, we are committing
all of this, I get so much energy from helping people and it
another $4 billion for refinancing mortgages, which we
has grown over the years into a life-long passion of mine.
hope will reduce mortgage payments for homeowners.
Q: What do you enjoy most about working in the When you add all of this together, the Path Forward
banking industry? initiative is investing in home ownership and housing,
committing more resources to minority-owned small
Diedre Porche: In my career of now nearly 27 years, I have businesses, providing educational tools to help our com-
had eight different jobs — and all at JPMorgan Chase, munities improve their financial health, and looking at
which makes me a bit of a unicorn. It’s exciting to be able how to build upon our firm’s existing diversity.
to take the work you do every day and create real, lasting
and impactful change in our world. I have always viewed We’re only getting started, but all of this is fundamental
my career as an opportunity and a privilege. to creating a more equitable society.
18 www.westernbankers.com | WesternBankerQ: Tell us about your roles with Advancing Black neighborhood of Los Angeles. The community impact
Pathways and Women on the Move? branch in Crenshaw, located in the historic Black com-
munity of Leimart Park, is in the perfect location. It
Diedre Porche: JPMorgan Chase launched Advancing
will be aligned to our Path Forward commitments to
Black Pathways (ABP) over two years ago in an effort
advance racial equity and bring more opportunity to
to strengthen the economic foundation of the Black
communities color.
community. This program predates our Path Forward
initiative and has proven to be impactful across the What we’re really excited about here is that our Crenshaw
country. ABP focuses on four key areas where there location is being built to directly serve this neighborhood.
are racial and economic disparities that create barriers The branch will employ full-time, home-lending experts fo-
to long-term financial success: Education, Careers and cused on helping more people in the neighborhood achieve
Skills, Wealth and Community Development. Through affordable, sustainable homeownership.
ABP, JPMorgan Chase is hiring Black talent, develop-
ing Black leadership and investing in Black businesses It will also have event space for community gatherings
and households to improve the financial health of Black and financial health workshops, skills training, and
communities around the world. space for small business pop-ups. The branch will be
locally-inspired and include local artwork or represen-
Last year I was appointed to be the executive sponsor of
tation from neighborhood small businesses.
ABP for the West. It’s an exceptional opportunity to raise
awareness and to really invest and create partnerships in Our hope with this branch is that it will help strengthen
communities of color. There is so much opportunity to the financial wellness of families and individuals, ex-
close the racial wealth gap and there are so many people in pand access to capital for Black-owned small businesses
our community who want to be part of that work. and grow Black homeownership.
Similarly, I am also an executive director and sponsor of
Women on the Move (WOTM), JPMorgan Chase’s commit-
ment to fuel female ambition and advance financial equality.
Our WOTM program supports the recruitment, retention
and promotion of women at all levels through mentorship
to empower both professional and personal growth.
WOTM has enabled us to host thousands of conversations
across the country, where women get together and discuss
the challenges we face as we seek to build wealth. If we can
help women figure out how to solve their financial issues,
you help families and you support communities. This is
purposeful dialogue that helps women navigate the steps to
build wealth and have financial security.
I am also the chair of JPMorgan Chase’s Market Lead-
ership Team in Los Angeles, overseeing the entire firm’s
strategic decision-making and civic engagement in
southern California.
Q: What’s next?
Diedre Porche: Later this spring, we are opening a first
of its kind community impact branch in the Crenshaw
WesternBanker | Issue 2 2021 19WELCOME ABOARD
The Western Bankers Association (WBA) is pleased to welcome Chang M. Liu, David Ritchie, Jeremiah Z. Smith and
David Brager as members of the WBA Board of Directors. These industry veterans bring years of experience and unique
perspectives to the Board as they help the industry navigate the evolving landscape.
Chang M. Liu — Vice Chairman at Large
President and CEO of Cathay General Bancorp and Cathay Bank
Chang M. Liu is president Previous to his work at Cathay, Chang was the exec-
and CEO of Cathay General utive vice president and chief lending officer at Banc
Bancorp and Cathay Bank. of California (formerly known as Pacific Trust Bank)
where, under his leadership, the bank increased its com-
Chang has more than 30 mercial real estate loan portfolio by $400 million within
years of commercial bank- three years. Coupled with acquisitions, Chang grew the
ing experience. Chang bank from $875 million in assets to $3 billion by the
joined Cathay Bank in 2014 end of 2013.
as senior vice president and
Prior to that, he was with California National Bank
assistant to the chief lend- (which was later acquired by U.S. Bank) in the com-
ing officer; he has held posi- mercial real estate group, where he averaged more than
tions of increasing respon- $125 million in consequent annual loans production
sibility, including executive vice president and chief over an eight-year span.
lending officer in 2016, chief operating officer in 2018
Chang is active in community organizations and serves
and president of Cathay Bank in 2019. Before assuming
on the boards of Foothill Family Service and Cathay
his role as president and CEO, he was responsible for,
Bank Foundation.
among other things, managing and overseeing all com-
mercial and real estate lending, business development Chang received a Bachelor of Arts degree in economics
and various operations. from UCLA.
20 www.westernbankers.com | WesternBankerDavid Ritchie — Vice Chairman at Large
President and CEO of American River Bankshares
David Ritchie is the presi- new responsibilities as the regional vice president of
dent and CEO of American the Sacramento Regional Commercial Banking office
River Bankshares [NAS- and was subsequently promoted to senior vice presi-
DAQ-GS: AMRB], the dent. He spent three years in Sacramento consistently
parent company of Ameri- growing the office. In 1997, Ritchie returned to Or-
can River Bank, a regional ange County to manage the Regional Commercial
bank serving northern Cal- Banking office in Irvine.
ifornia since 1983.
Ritchie attended University of Southern California
American River Bank op- for two years and was active in the Sigma Chi fra-
erates as a community ternity prior to transferring to the University of Cali-
business bank with five lo- fornia, Irvine, where he earned his Bachelor of Arts
cations serving the Greater degree in economics.
Sacramento area, two branches in Sonoma County and
three branches in Amador County. Ritchie also serves Ritchie has served on the board of directors of the
as president and CEO of American River Bank and as San Juan Capistrano Chapter of Legatus and is past
the president of the American River Bank Foundation. chair of the board of the Orangewood Children’s
Foundation, an organization which he was involved
Prior to joining American River Bank, Ritchie was
with for 13 years. He has also served on the boards
senior vice president and regional manager of U.S.
of the J.F. Shea Therapeutic Riding Center and the
Bank’s commercial banking office in Torrance, Calif.
Irvine Barclay Theatre. Ritchie has also remained ac-
The commercial banking team consists of 14 full-time
tive with his alma mater, serving as a trustee for the
employees including relationship managers and port-
UCI Foundation and on the Advisory Board for the
folio managers. The office maintains $600 million in
School of Social Sciences.
loan commitments and has revenues of $12 million.
Ritchie also served as the executive vice president He has received many awards including the Orangewood
and regional manager of One West Bank’s commer- Children’s Foundation’s Crystal Vision Award (2010),
cial banking offices in Orange County and San Diego. the Boy Scouts of Orange County’s Man of Character
Based in Irvine, Ritchie manages a team of commercial Award (2009), JF Shea Therapeutic Riding Center’s
banking professionals who serve companies with an- Michael Lewis Award (2009), Irvine Barclay Theatre’s
nual sales greater than $20 million. Jade Award (2006), UCI Athletic Hall of Fame’s Varsity
Award (2006) and the UCI School of Social Science’s
Prior to joining One West Bank, Ritchie spent more Laud & Laurels Distinguished Alumni (2001).
than 25 years working for Wells Fargo Bank. Ritchie
was an executive vice president and the region head Other achievements include All PCAA and All Ameri-
for the Wells Fargo Regional Commercial Banking of- can honors in water polo. Additionally, Ritchie was
fices in Orange County and Carlsbad, Calif. selected as a member of the U.S. National Water Polo
Team in 1977 and represented the United States inter-
A 25-year company veteran, Ritchie began his ca- nationally as a member of the team for four years.
reer with Wells Fargo in 1986 working eight years
in the Real Estate Group. In 1994, Ritchie took on Ritchie lives in Shingle Springs with his wife.
WesternBanker | Issue 2 2021 21Jeremiah Z. Smith — Vice Chairman at Large
Senior EVP/Chief Operating Officer of First Northern Bank
Jeremiah Z. Smith is senior ber of the compliance, information services and ethics
executive vice president/ committees. He is also a voting member of the manage-
chief operating officer of ment loan committee.
First Northern Bank. He
previously served as execu- Smith is a board member for the Greater Sacramento Eco-
tive vice president and chief nomic Council and a member of the American Bankers
financial officer of First Association’s Emerging Leaders advisory board, as well
Northern from 2010-2018. as a recent member of the California Bankers Association
He reports directly to the (CBA) board, and the former chairman of CBA’s state gov-
CEO and is a member of ernment relations committee and a member of CBA’s ag-
the bank’s senior manage- ricultural and membership committees. He is also a mem-
ment team. Smith joined ber of the Rotary Club of West Sacramento, and currently
the bank in 2003. serves on the board of directors of the United Way Califor-
nia Capital Region. He served as Honorary Commander
As senior executive vice president, Smith is responsible of Travis Air Force Base from 2014-2015.
for bank wide branch and deposit operations, finan-
cial operating results, oversight of the human resources Smith has a Bachelor of Science degree in business adminis-
function, and regulatory compliance. He oversees the tration with a concentration in finance from California State
wealth management division, comprising First Northern University, Sacramento, and subsequently earned a CPA des-
Advisors and First Northern’s Mortgage Division. Smith ignation. In 2008, Smith graduated from the Pacific Coast
chairs the bank’s asset/liability committee and is a mem- Banking School at the University of Washington in Seattle.
David Brager — Vice Chairman at Large
Chief Executive Officer of Citizen Business Bank
David Brager is chief execu- nancial centers and three trust office locations serving
tive officer of Citizens Busi- the Inland Empire, Los Angeles County, Orange Coun-
ness Bank. CVB Financial ty, San Diego County, Ventura County, Santa Barbara
Corp., the holding company County, and the Central Valley area of California.
for Citizens Business Bank,
is one of the 10 largest bank Brager’s professional career incorporates more than 33
holding companies head- years of banking experience with an extensive back-
quartered in California, with ground in management, commercial lending, business
more than $13 billion in as- planning, sales and operations. Prior to his promotion
sets. [NASDAQ: CVBF]. The to CEO, Brager served as executive vice president of the
bank is consistently recog- sales division, overseeing all business financial centers
nized as one of the top per- across the bank’s footprint in California. He joined the
forming banks in the nation, and has made money in 173 bank in 2003 as manager of the Fresno business finan-
consecutive quarters, and paid a cash dividend in 124 con-
cial center before becoming senior vice president and
secutive quarters.
regional manager of the Central Valley Region.
CVBF was ranked the “Best Bank in America” in 2020,
He has a Bachelor of Science degree in business admin-
according to Forbes’ Best Banks in America.
istration from California State University, Fresno. He
Citizens Business Bank offers a wide array of banking, also graduated from Pacific Coast Banking School at the
lending and investing services through 57 business fi- University of Washington in Seattle.
22 www.westernbankers.com | WesternBankerWesternBanker | Issue 2 2021 23
MEMBER UPDATE
NEW ASSOCIATE MEMBERS
AQUAOSO is water security simplified. In its simplest
form, the company can be thought of as a credit score
for water risk. AQUAOSO’s cloud-based water risk
management software as-a-service platform helps
financial institutions understand the true impacts of Fast and accurate results drive our efforts at Empyrean.
water stress to mitigate investment risk and improve Our system was designed and developed by ALM
decision-making. By aggregating thousands of data practitioners, built with ease of use and speed of
sets in an easy to use map-based platform, AQUAOSO calculations as primary considerations for its model.
empowers organizations to more accurately identify, It is the fastest growing solution in the market today.
track and manage water risk, thereby saving time and Banks and credit unions of all sizes turn to us for
money. Based in Folsom, Calif., and with dispersed financial risk management products that help them
team members nationally, AQUAOSO believes water increase efficiency, reduce operational costs, and more
is more than a commodity — it is the lifeblood that easily manage financial performance.
fuels the company’s passion to bring technology and
Website: www.empyreansolutions.com
transparency to the market in order to build a water
resilient future.
Website: www.AQUAOSO.com
Newcleus, LLC, is the premier benefit plan and
Baker Hill is the expert solution for loan origination, financing strategy provider in the banking industry.
portfolio risk and relationship management, CECL Our size and tenure allow us to provide our clients
and analytics for financial institutions in the United and advisors with the best products, services,
States. The company delivers a single unified platform administration, and regulatory compliance support
with modern solutions to streamline loan origination available. Newcleus is the result of the combination
and portfolio risk management for commercial, of BFS Group, Meyer-Chatfield and Compensation
small business and consumer lending. The Baker Advisors. By coming together as Newcleus, we now
Hill NextGen® platform also delivers sophisticated have the ability to provide greater reach, annuity
analytics and marketing solutions that support sound products and client service in the banking industry than
ever before.
business decisions to mitigate risk, generate growth and
maximize profitability. Website: www.newcleus.com
Website: www.bakerhill.com
24 www.westernbankers.com | WesternBankerPerficient is a leading global digital consultancy. We SmartStream is a recognized leader in financial trans-
imagine, create, engineer, and run digital transformation action management solutions that enable firms to im-
solutions that help our clients exceed customers’ expec- prove operational control, reduce costs, build new rev-
tations, outpace competition, and grow their business. enue streams, mitigate risk and comply accurately with
With unparalleled strategy, creative, and technology ca- the regulators.
pabilities, we bring big thinking and innovative ideas,
along with a practical approach to help the world’s larg- By helping its customers through their transformative
est enterprises and biggest brands succeed. Traded on digital strategies, SmartStream provides a range of solu-
the Nasdaq Global Select Market, Perficient is a member tions for the transaction lifecycle with AI and machine
of the Russell 2000 index and the S&P SmallCap 600 learning technologies embedded — which can be de-
index. Perficient is an award-winning Adobe Platinum ployed in the cloud or as managed services.
Partner, Platinum Level IBM business partner, a Micro-
As a result, more than 2,000 clients — including 70
soft National Service Provider and Gold Certified Part-
of the world’s top 100 banks — rely on SmartStream
ner, an Oracle Platinum Partner, a Gold Salesforce Con-
Transaction Lifecycle Management (TLM®) solutions
sulting Partner, and a Sitecore Platinum Partner.
to deliver greater efficiency to their operations.
Website: www.perficient.com/industries/financial-services
Website: www.smartstream-stp.com
NEW MEMBER BANKS
C3bank is a customer focused banking institution. The With offices currently located in Encinitas, Lake San Mar-
clients we serve and the relationships we have developed cos and Riverside, Calif., along with a strong online pres-
are just as important as the accounts we maintain. We are ence, C3bank offers a complete range of banking services.
committed to offering premier banking services and con- We take great pride in providing excellent customer ser-
tinuous improvement of our product lines and offerings. vice that only a focused institution can offer. Our corpo-
rate culture and decisions are driven by core values that
Originally founded in 1981, C3bank was brought back contain key commitments to our customers, shareholders,
to its entrepreneurial culture when three local investors employees and the community we serve.
purchased the bank in 2014. Since that time, the bank
has made significant investments to allow for enhanced The success we have achieved to date, combined with ex-
customer offerings resulting in strong loan and deposit cellent asset quality and a strong capital position has the
growth, and a customer-oriented culture. In April of 2017, bank positioned to build its banking franchise and ensure
we relaunched a new brand for C3bank, a new website our customers have a solid partner so they can “focus on
and online banking system. We remain committed to con- their business, not their banking.”
tinued improvement to best serve our customers.
Website: www.c3bank.com/
We meet clients’ needs through three key differentiators:
strong customer connections, technology and access to
decision makers. CONTINUED ON PAGE 26
WesternBanker | Issue 2 2021 25Community Commerce Bank (CCB), formed in 1976, CCB is considered to be “well capitalized” according
is part of The East Los Angeles Community Union (TE- to all regulatory requirements and definitions. Call one
LACU) family of companies. CCB prides itself on serving of our three branch offices for our current outstanding
the financial needs of California residents through a wide rates on FDIC-insured deposit accounts. As a subsidiary
range of loan products and deposit accounts.
of TELACU, CCB supports many social and economic
CCB specializes in commercial real estate loans, loans development programs such as education scholarships,
to non-profit and religious organizations, apartments (5 senior housing projects, a weatherization program, and a
units or more), as well as other real estate loans regard- Veterans Upward Bound program to name a few.
less of reason, for both consumer or commercial proper-
ties, and business. Website: www.ccombank.com/
First established in 1976, GBC International Bank was On August 1, 2007, the name GBC International Bank
founded by local actresses and businesswomen as the (GBCIB) was adopted. The new name reflects the bank’s
First Women’s Bank of California. With a mission to long-standing expertise in handling international trade,
eliminate discrimination on the basis of sex, the bank commercial real estate financing, and business and per-
was able to make a difference in our communities and sonal banking services.
society while supporting and advancing women.
In 2008, GBCIB continued its effort to help small busi-
In 1984, we adopted a new name — Guaranty Bank of nesses by gaining a Preferred Lender status with the U.S
Small Business Administration (SBA). This designation
California, to reflect our expanded services, programs
gives GBCIB the ability to streamline the procedures nec-
and role within our communities.
essary to provide financial assistance to the small busi-
In 1999, GBC was awarded a Delegated Authority Lend- ness community while expediting its process. GBCIB has
er status by the Export-Import Bank of the United States maintained its SBA’s Preferred Lender status and won an
and has kept that designation ever since. We are currently SBA Export Lender of the Year Award in 2016.
rated as one of the top in the nation as a High-level Del- GBCIB is one of the few banks that specializes in, and
egated Authority Lender. is dedicated to providing, comprehensive financial solu-
tions to help small companies. Our long-standing exper-
In 2004, GBC was awarded Ex-Im Small Business Re-
tise in handling International export lending and SBA
gional Bank of the Year for our impressive performance
loans makes us the best choice for business lending and
in helping small export-import businesses. At that time,
international service needs.
and to this day, we are one of the most active Export
Working Capital Lenders in the United States. Website: www.gbcib.com/
26 www.westernbankers.com | WesternBankerYou can also read
