Tennessee Bankers

This Week Newsletter

August 28, 2017 - Issue No. 1734

TBA Endorses EVOLVE for In-House Evaluations

Earlier this month, the TBA Board of Directors approved a new TBA endorsed partnership with EVOLVE Valuation Compliance Services.
Founded in Middle Tennessee by Eric Collinsworth and Jason Bennett, Evolve is a web-based evaluation platform for banks to efficiently write regulatory compliant in-house evaluations. Evolve can alleviate some of the burden associated with appraiser shortages and costs, increase efficiencies in the loan closing process, and with low pricing per evaluation, Evolve can provide a reliable source of fee income. To learn more about this newest TBA Endorsed Partner visit evolvevcs.com or contact Eric Collinsworth at eric@evolvevcs.com or 615-417-9942.

OCC Issues Guidance on Programs for Home Loans with Over 100 Percent LTV

The OCC issued guidance for OCC-regulated banks seeking to develop programs to offer home loans with loan-to-value ratios of over 100 percent, known as "higher-LTV" loans. These programs may be eligible for CRA credit.

Such programs would apply to purchase loans or purchase plus rehabilitation of owner-occupied properties in communities "officially targeted" for revitalization by federal, state, municipal or other government-designated entities. Eligible loans would be permanent first-lien mortgages with LTV ratios exceeding 100 percent, without mortgage insurance or other acceptable collateral and with an original loan balance of $200,000 or less.

The guidance also provides information about the required policies and procedures under such a program and about the process and timing for notifying the OCC about starting or modifying a program. Read the guidance.

Claim Your Spot in the Senior Retail Banking Officer Forums

The 2017-2018 Senior Retail Banking Officer Forum holds its first of three sessions September 6 in Nashville, offering individuals responsible for retail banking operations the opportunity to discuss concerns and explore solutions to challenges they face on a day-to-day basis. The agenda for each session is established based on feedback and input from participants in the forum group. Subject matter experts are invited to speak on specific topics based on requests from the forum members. To learn more, click here.

Interest Income Boosts Bank Profits in Second Quarter

FDIC-insured banks and savings institutions earned $48.3 billion in the second quarter, up 10.7 percent from the industry's earnings a year before, the FDIC announced last week. The agency said the rise in net earnings was largely driven by a 9.1 percent increase in net interest income as the Federal Reserve continues the process of normalizing interest rates. Return on assets, a benchmark for industry performance, hit 1.14 percent—a level not seen since 2007.

With interest rates slowly rising, net interest margin improved to 3.22 percent, up from 3.08 percent the year before and the highest level since 2013. Noninterest income was 1 percent higher compared to the same point in 2016.

Total loans and leases increased by 1.7 percent, or $161.2 billion during the second quarter. While loan growth remains strong, the rate of growth slowed for the third consecutive quarter. Residential mortgages grew by 1.8 percent, credit card balances by 3.1 percent, and commercial loans by 1.1 percent. Banks set aside $12 billion in second-quarter loan loss provisions, up 2.3 percent from 2016, and noninterest expenses rose by 3.3 percent.

Community banks earned $5.7 billion in net income during the second quarter, up 8.5 percent from the same time last year. Loan growth at community banks outpaced the industry as a whole at 2.7 percent; community bank C&I loans to businesses rose by 3.1 percent.

According to the FDIC report, the number of institutions on the problem bank list dropped from 112 to 105, the fewest since 2008, and the Deposit Insurance Fund balance rose to $87.6 billion during the quarter.

Reliant Bank, Brentwood Announces Deal with Community First Bank & Trust, Columbia

Brentwood, Tenn.-based Commerce Union Bancshares Inc. will acquire Columbia-based Community First Inc. in an all-stock transaction slated to close in the first quarter of 2018. Commerce Union subsidiary Reliant Bank ($1 billion in assets) will absorb Community First Bank & Trust ($476.1 million).

Commerce Union will enter Maury County with four branches and enter Hickman County with two branches. It will also expand in Williamson County by one branch.

Community First CEO Louis Holloway will join the resulting entity as COO. Jim Bratton will become Maury County market executive. Holloway and two Community First board members—Brown Daniel and Rusty Vest—will join the Commerce Union and Reliant Bank boards. Commerce Union plans to rename itself Reliant Bancorp Inc. upon the merger's close, subject to shareholder approval.

Welcome New TBA Associate Member

TBA welcomes new associate member FIG Partners in the category of consulting. Please thank this company for their support of the Tennessee banking industry through membership. When evaluating vendor partners, review the list of all TBA associate members in our online directory.

Solar Eclipse at TBA Headquarters

Still awe struck over last Monday's Great American Eclipse? View the pics and video of the total eclipse party at TBA.

TBA On the Road

  • Compliance Conference takes place in Franklin.
  • TBA's Membership Meetings wrap up with stops in Nashville, Memphis, and Jackson.

See where TBA goes while "on the road" by following @TNBankers.