Florida Banking December 2021 | January 2022

SouthState Bank:

Creating a Culture of Leadership THE MAGAZINE OF THE FLORIDA BANKERS ASSOCIATION WWW.FLORIDABANKERS.COM DECEMBER 2021 | JANUARY 2022

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Editorial & Executive Offices 1001 Thomasville Road, Suite 201 Tallahassee, FL 32303 850-224-2265 www.floridabankers.com Advertising & Production Offices 945 Winnetka Ave. N., Ste. 145 Golden Valley, MN 55427 952-835-2275 For advertising information, contact Valerie Fischer, sales account executive 913-261-7055 Valerie@NFRcom.com For reprints or single issues, contact 800-336-1120 Statements of fact and opinion are made on the responsibility of the authors alone and do not imply an opinion or endorsement on the part of the officers or members of FBA. Florida Banking is published 11 times annually with a combined issue in December/January. Subscription price is $50 per year for nonmembers. Postmaster, send address changes to Florida Bankers Association, P.O. Box 1360, Tallahassee, FL 32302. Copyright 2021 Alex Sanchez President and Chief Executive Officer Fax 952-835-2295 www.BankBeat.biz

THE MAGAZINE OF THE FLORIDA BANKERS ASSOCIATION

VOLUME 36

NUMBER 11

DECEMBER 2021 | JANUARY 2022 ON THE COVER 8 - - - SouthState Bank: Creating a Culture of Leadership CONTENTS 4 - - - - - - - - -Chair’s Message 6 - - - - - - Straight Talk from the President’s Desk 12 - - - - Government Relations: Odds, Ends, Budget and Redistricting 14 - -BancServ Endorsed Partner: Opportunities in Partnerships: Ways Community Banks can Benefit from Today’s Fintechs 16 - - - - - - - - - Trust Banking: Spousal Lifetime Access Trust - A 2022 Estate Planning Option 18 - - - -Florida BankPac Update 21 - - - - - New Year, New You - Let the FBEF Help! 22 - - - - - Personal Transactions 24 - - - - - - - - - - - - - Kudos 28 - - - - - - FBA Staff Spotlight 30 - - - - - - - Upcoming Events 31 - - - - - - - - - Did You Know 31 - - - - - Advertising Directory

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Florida Bankers Association asanchez@floridabankers.com Pamela Ricco Executive Vice President and Chief Operating Officer Florida Bankers Association pricco@floridabankers.com Brooke Harrison Publications Director Florida Bankers Association bharrison@floridabankers.com

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Fab Brumley Chair

Bill Penney Chair-Elect

Greg Nelson Immediate Past Chair

Lloyd DeVaux Second Immediate Past Chair

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On the Cover: The SouthState Bank leadership, from left: Mark Thompson, Ernie Pinner and John Corbett.

Florida Bankers Association: The voice of Florida banking since 1888.

Photos by Daniese Betito, Images for Business, Orlando, FL

CHAIR’S MESSAGE

2022 SESSION: THREE WAYS TO SUPPORT YOUR INDUSTRY

BY FAB BRUMLEY, FBA CHAIR

J anuary 11 is the start of the 2022 Session. At the FBA, we talk a lot about “advocacy,” but it’s not only our state association that’s responsible for speaking out on behalf of the financial sector in Florida. While the FBA’s experienced lobbyists are on the front lines, every banker also has a role to play in advancing beneficial legislation for our industry. The FBA’s legislative priorities are largely determined by its member banks and trust companies, so now is the time to get involved. As Session begins, here are three ways that you can support your association and be an advocate for your industry: 1. Share your legislative concerns with the FBA. To protect the interests of its memb hip t b th th l Council (GRC) to set a legislative a d h is made up of 60 banks of differing s f d state and federal level, the FBA’s Gove team works alongside its Govern Florida. Heading into Session, this legislative and regulatory issues with h and makes recommendations on how d The FBA can’t fight for us if the te d k what challenges banks and trust comp f f your bank is struggling with a particula f assume that others are facing similar challenges, too. You can help form the FBA’s agenda by bringing relevant issues to the table, whether through the GRC or by reaching out to a member of the Government Relations team directly. 2. Attend FBA events like Capitol Day & Capitol Night to network with legislators and decision-makers. The FBA organizes many events, both virtual and in-person, to give bankers access to legislators and policymakers. Stay informed about what’s happening on the legislative front by attending webinars, leadership luncheons, and events. Most recently, the FBA invited member banks and trust companies to attend the 18th annual joint DC l d b d

“fly-in” in partnership with the California Bankers Association. This was a packed week of Zoom meetings and informative discussions with top legislators and regulatory policymakers on both sides of the political aisle. Bankers had the opportunity to pose questions about the IRS reporting requirement, credit union taxation, and climate reform, just to name a few of the topics covered. You won’t want to miss Capitol Day & Capitol Night on January 19. This annual event gives Florida bankers a peek behind the curtain of what happens during Session, as we will spend the day at the Capitol discussing important banking and economic issues with Florida legislators. The day ends with a lobster dinner at FBA’s headquarters. Capitol Day & Night is an excellent opportunity to network with elected officials and your peers. e FBA’s Calls-to-Action.

ry banker can visit Tallahassee or C. in person, each of us can make by responding to FBA’s Calls-to gislative or regulatory issues arise mmediate attention, a Call-to-Action d via email encouraging us to reach l ed officials. Hearing directly from s can help policymakers make more

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f d d ns about the issues at hand. Individually, our voices may be lost. But we are impossible to ignore when our phone calls are received in significant numbers from all across the state. We have an opportunity to support the banking industry during Session. Take action by speaking up about the challenges faced by your bank or local community, by attending events to network with bankers and legislators, and by answering FBA’s Calls-to-Action. I hope to see you in the new year at Capitol Day & Night. You can register online at www. floridabankers.com. For more information on becoming a member of the FBA, contact President and CEO Alex Sanchez at 850-701-3518 or asanchez@floridabankers.com.

4 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

BancServ Endorsed Partners BancServ, Inc., was created by the Florida Bankers Association as an innovative approach to solve problems for financial institutions. By providing research, testing and offering products and services at a discounted rate, BancServ is saving Florida banks two incredibly important resources: time and money. This extensive research and screening performed by BancServ before it contracts with a vendor has allowed institutions of all sizes to become more efficient and effective. BancServ,Inc. is creating profitable conditions, solving problems and meeting needs with significant value for all financial institutions. For more information please call Pamela Ricco, CEO of BancServ at 850-701-3514 .

STRAIGHT TALK FROM THE PRESIDENT’S DESK

MY TIME IN IOWA, PART III: LIFE AT UNIVERSITY

BY ALEJANDRO “ALEX” SANCHEZ, FBA PRESIDENT AND CHIEF EXECUTIVE OFFICER

A s I struggled through Professor Vestal’s Civil Procedure class, I started becoming accustomed to the heavy workload during my first year of law school. I quickly learned one thing, there was no time to watch college football games and it was study, study and even more studying that first year. It was an Indian summer in late October and early November and the weather at Iowa was simply amazing. Iowa City is your typical college town and a wonderful place to be. Iowans are very welcoming and

and running the bleacher stairs at the Field House. They were intense in their workouts, and just seemed aggressive and obsessive in their desire to run faster, quicker and better each time. I turned to a guy next to me and asked, who are those people? He replied, “Alex, those are the wrestlers from Dan Gable’s wrestling team.” I asked a question considered treasonous in Iowa: Who is Dan Gable? And I heard loud and clear who Dan Gable was. He was the head wrestling coach at the University

I always felt at home in Iowa. Most of my law classes were huge with many students. But one of my classes was a smaller writing class with Professor Richard Matasar; who later would be named Law Dean at the University of Florida. I learned so much from Professor Matasar; he probably was my favorite. I considered myself a good writer until I met him. When I received my first graded law paper I wrote for his class, I thought he had broken a red ink pen and just poured it all over

of Iowa. Gable's teams compiled a dual meet record of 355–21–5. He coached 152 all-Americans, 45 national champions, 106 Big Ten champions and 12 Olympians, including eight medalists. His teams won 21 Big Ten conference championships, and 15 NCAA Division I titles. “Mr. Gable is an Iowa legend. Got it,” I said. Every night I grinded out reading over 250 pages of homework. I always took Friday night off to watch a movie and not do any

“AFTER ALMOST FIVE YEARS IN THE MILITARY, AND EARNING MY UNDERGRADUATE DEGREE BY ATTENDING NIGHT SCHOOL WHILE ON ACTIVE DUTY, I REALIZED HOW BLESSED AND FORTUNATE I WAS TO BE A FULL-TIME STUDENT WITHOUT ANY OTHER RESPONSIBILITIES.”

my paper. There were so many red comments from Professor Matasar that I thought that paper needed medical attention for loss of blood. But that is how you learn to get better; you must take suggestions and criticisms, and take it I did. That first year I played basketball in the law school league with my classmate from Professor Matasar’s class. In preparation for the games, I went to the Iowa Field House to shoot around to get my basketball skills back and dust off the rust. While there, I noticed a bunch of young men running wind sprints

work, but it was back to work on Saturday morning. Sunday was no day of rest; after Mass at St. Patrick Catholic Church at noon, it was lunch time and back to class reading. An interesting thing happened to me concerning St. Patrick’s Church years later when I returned to Iowa City. Relying on my memory, I wanted to visit the church again. Besides attending Sunday Mass there while in school, I used to visit the church before each of my final exams. Trust me, law school exams were four hours long — either writing, multiple choice or

6 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

© iStockphoto/pablohart

there was a line of students waiting to use it. Early one night while I was studying at the library, I made a call and spoke Spanish. One of my law classmates overheard me speaking Spanish and asked me where I was born. I told her I was born in Cuba. She then asked me if I was returning to Cuba to practice law after graduation. I looked at my classmate (and anyone who knows me knows that I do not have a poker face) in total disbelief. But I had only seconds to decide which road to take — either to educate or to say something I might regret later. I chose the former. I said, “Yes, I speak Spanish, but no, I would not return to Cuba after graduation to practice law.” I explained that my family came over on a freedom flight one month before the missile crisis in 1962 seeking freedom in the United States from the Socialist/Communist tyranny of Fidel Castro’s Cuba. I explained that I would never return even to visit Cuba while the rule of communism existed. I also added that I had just finished almost five years of military service before enrolling at Iowa Law. Finally, I explained that exchange students were not allowed by Castro and the regime. She apologized and I told her no worries. We became friends after that and I was so happy I chose the high road. But I realized then that not everyone knows the “Cuba” story like we know it in Florida. Year one ended and I was on my way to becoming Perry Mason. More on my Iowa experience in Part IV.

a combination thereof — and I needed all the help I could get, so I always prayed before those exams for wisdom and knowledge. I was staying in a downtown Iowa City hotel and proceeded to walk to St Patrick’s. It was only a block or so away from my hotel. I got to the church location and saw no church. I asked myself, come on, it was here on this spot. But I concluded my memory failed me, so I walked a few more blocks in search of the church. No luck. I scratched my head and was perplexed, I could not believe I couldn’t find the church located right in the heart of downtown Iowa City. Finally, I saw a police officer and asked him where it was, and I felt foolish in doing so because I had been there so many times. The officer told me that the church was destroyed in a 2006 tornado. I was shocked. Each week I faced the challenge of law school and each week I felt stronger and more confident. After almost five years in the military, and earning my undergraduate degree by attending night school while on active duty, I realized how blessed and fortunate I was to be a full-time student without any other responsibilities. Another interesting incident happened to me at Iowa Law that I found sad, but quite frankly, also humorous. The lesson I learned from this incident is that not everyone knows your story, or keeps up with the news, and you can either educate them or be a smart aleck. I chose to educate. In those pre-cell phone days, I used the law library telephone. Each call was limited to just a few minutes, and usually

WWW.FLORIDABANKERS.COM DECEMBER 2021 | JANUARY 2022 — 7

8 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

S outhState Bank, headquartered in Winter Haven, Florida, has an incredible growth story thanks to a strong culture of leadership and empowerment. Today, SouthState is the 34th biggest bank in the country with $40 billion in assets. Formerly CenterState Bank, the bank took its new name as a result of the 2020 merger of equals with South Carolina-based South State Bank. The original CenterState Bank was founded in 2000 by Ernie Pinner and John Corbett as part of a 4-bank charter. “We are all here because of Ernie,” said CEO John Corbett. “The story starts with him.” Pinner gave Corbett his first job in banking when he hired him as a teller just out of college, and they have worked together ever since. He invited Corbett along for the ride when he had the opportunity to start a bank of his own.

banker that is closest to the customer.” This model is critical to the way that SouthState does business, because it would allow them to scale. “We can’t treat every geography the same. We allow the local leader to build for their geography,” said Corbett. “One of the things we’ve loved in the last 20 years of buying these banks is visiting each market and learning about its history.” SouthState bank presidents own their balance sheets and income statements, making decisions based on what’s best for their unique market. Most importantly, Pinner’s team wanted to ensure that every acquisition or merger was a “culture fit” for the bank. This was the deciding factor for the bank’s acquisition of correspondent banking company Silverton, and later the equal partner merger with SouthState.

Chief Strategy Officer Steve Young heads up the correspondent banking business, which is now nationwide. SouthState serves over 1,000 banks in 47 states, accounting for 20% of the country’s banks. “Ernie and John were so purposeful about making sure that our partnerships would not dilute the culture of the bank. If cultures weren’t aligned, we chose not to move forward,” said Young. Thompson added that M&A

“WE CAN’T TREAT EVERY GEOGRAPHY THE SAME. WE ALLOW THE LOCAL LEADER TO BUILD FOR THEIR GEOGRAPHY.” - JOHN C. CORBETT

Pinner was a bank president by the time he was 27 years old, and a pillar in his community; Corbett attributes their success in raising the initial $10 million in capital to Pinner’s stellar reputation. Within its first 10 years, CenterState Bank crossed the billion-dollar threshold in May of 2009. Corbett believes that the financial crisis of 2008 was the crucible for the company. While other banks

is not for the faint of heart; it requires a lot of heavy lifting, to get folks to buy into what you’re trying to do. This was “Phase One” of the bank’s rapid growth. Phase Two, then, was about deciding whether or not to expand outside of Florida. “We did not want to dilute the powerful demographics of a Florida-based company. And so we chose Atlanta, because that was a market with demographics comparable to Florida,” said Corbett. The team made its first out-of-state acquisition in 2018. Meanwhile, the leaders at South State Bank in Columbia, South Carolina were charting a similar path. “They were coming south from the Carolinas, and we were going north from Florida. By expanding up to Atlanta and Birmingham, we were adjacent to [South State],” said Corbett. “Our teams saw the need for scale to create the next powerful regional bank in the southeast.” The merger closed in June 2020. South State CEO Robert Hill took the role of Executive Chairman and Corbett became CEO of the combined company. “About five or six years ago, it became imminent that I needed to step out of the way and let youth keep charging. So I stepped down and became a

took a “survival” mentality, Pinner’s team decided to play both defense and offense simultaneously. “Ernie gave us more responsibility than we deserved,” said Mark Thompson, southern banking president. “He allowed us to make mistakes; we learned quickly and we worked hard to figure things out because we didn’t want to disappoint him. He didn’t micromanage, but he asked good questions.” With Pinner at the helm, the bank continued to grow, acquiring other banks throughout central and south Florida. Today, SouthState Bank is an amalgamation of 65 banks. Looking back on the initial decision to expand, Pinner and Corbett recall the team’s hesitation about opening a second location. The question was how they’d ensure culture continuity across multiple locations. “We realized that we needed to document and memorialize the values that were important to us when we founded the bank, and how we planned to stay true to those values,” said Corbett. “You’ll find that our core values are really a reflection of Ernie’s philosophies that we started with.” The first of the bank’s core values is “local market leadership,” describing a business model that “supports the unique character of the communities we serve by encouraging decision making by the

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“I WAS TRAINED BY A GENTLEMAN WITH THE PHILOSOPHY TO EMPOWER PEOPLE BY GIVING THEM RESPONSIBILITY BEFORE THEY’RE ‘READY,’ AND WE’VE ALWAYS ADOPTED THAT HERE.”

director, and John and his team took over and have done a great job,” said Pinner. “His whole career, Ernie has delegated down, and he allowed me to become a CEO much younger than he should have,” said Corbett. “One of the traits of a great leader is that they work themselves out of a job.” Pinner credits his leadership style to his own mentor, veteran banker Jim White, who gave him his first job in banking. “I was trained by a gentleman with the philosophy to empower people by giving them responsibility before they’re ‘ready,’ and we’ve always adopted that here,” said Pinner. It is by his example that the bank prioritizes mentorship and invests time and resources to educate young people. SouthState welcomes a diverse group of 30+ college students and grads through its internship program each year. “The best way to learn is by watching the people you want to emulate. Ernie set that example for John; John has set it for me; I try to set it for the 10 people who report to me, and I hope they set an example for the hundreds of people who report to them,” said Thompson. “Both Ernie and John have made sure that our values are not just words on a piece of paper or a plaque on the wall. Living by example is the best way to get the culture to take root.” ERNEST S. PINNER Ernest S. Pinner (“Ernie”) has been an active banker all of his adult life, gaining over 56 years of experience in the banking industry. Pinner was the founder and original president and CEO of CenterState Bank which was formed in 1999. He later became Chairman and CEO of the combined CenterState Banks of Florida. Most recently, he served as the Executive Chairman of CenterState Bank Corporation, and is now a director on the board of SouthState Corporation. Prior to the formation of CenterState in 1999, Pinner was an Area President and Senior Vice President of First Union National Bank from 1986 to 1999. Pinner is a native of Florida. In fact, his family goes back seven generations in Florida. He is a graduate of the University of Florida and earned a degree in Banking and Finance. Pinner is an active member of the Polk County community, serving or having served on various community boards.

- ERNEST S. PINNER

Through a practice of encouraging young people and giving them opportunities before they were ‘ready,’ Pinner has empowered his team to rise up and become great leaders themselves, dedicated to promoting a culture that he instilled.

10 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

JOHN C. CORBETT

John C. Corbett serves as Chief Executive Officer and a Director of SouthState Corporation, and as President and Chief Executive Officer of SouthState Bank. Corbett joined SouthState in 2020 through a merger of equals. Prior to the merger, he served as Chief Executive Officer and a Director of both CenterState Bank Corporation and its subsidiary. As a co-founder of CenterState, he began his career with the company in 1999 as Chief Credit Officer and transitioned to President and CEO in 2003. Corbett has been honored by the Florida Bankers Association as 2013 Banker of the Year and by American Banker as 2012 Community Banker of the Year. He is an active member of his community and has served on the boards of numerous civic and professional organizations, including the Florida Bankers Association, the Independent Community Bankers Association, and the Central Florida Economic Development Council. Corbett graduated from Bob Jones University in Greenville, SC with a degree in Financial Management and a minor in Political Science.

MARK W. THOMPSON

Mark W. Thompson is Executive Vice President and Southern Banking Group President for SouthState Bank. Thompson joined SouthState (formerly CenterState Bank) in 2005 and has held several leadership positions during his career, including Senior Vice President and Area Executive for Polk County, Executive Vice President and Chief Credit Officer for CenterState Bank of Central Florida, Senior Vice President and Head of Special Assets, Executive Vice President overseeing the South Florida Market, and president and a director of CenterState Bank of Florida. With over 37 years in the banking industry, Thompson has experience in a variety of leadership roles including Banking Center Manager, Head of Residential Lending, and Commercial Relationship Manager. An active member of the community, Thompson has served on the boards of The American Heart Association, various Rotary Clubs, Keiser College Advisory Board, McKeel Academy Charter School, The Learning Resource Center of Polk County and numerous others during his career.

WWW.FLORIDABANKERS.COM DECEMBER 2021 | JANUARY 2022 — 11

GOVERNMENT RELATIONS

ODDS, ENDS, BUDGET AND REDISTRICTING

BY ANTHONY DIMARCO, FBA EXECUTIVE VICE PRESIDENT AND DIRECTOR OF GOVERNMENT AFFAIRS

F irst, some odds and ends that will shine a light on redistricting, the state’s budget, and other issues. I want to thank the Florida Chamber for this information. Did you know that Florida is the 15th largest economy in the world with a $1.15 trillion GDP? If Florida was a country, its GDP would be right behind Australia and Spain and just ahead of Mexico, Indonesia and the Netherlands. This growth will lead to a natural increase in tax revenue for the legislature to appropriate. There should also be dollars

citizenry. Today there are just under 24,000 more registered Democrats than Republicans. The total active registered voters are just over 14 million voters. The Democrats lead with 35.94 percent of these registered voters, followed closely behind by 35.77 percent Republicans and 28.29 percent for the NPAs, i.e., independents, other parties, etc. The interesting number to watch is the growth of the NPAs. This past August there were more than 57,000 newly registered voters. The NPAs led the pack with 42 percent to the Republicans’ 36

percent, and the Democrats’ 22 percent. There are some counties in Florida that have more NPAs than one of the major parties. This is an interesting phenomenon that will have an impact on Florida’s closed primary elections. Whether this trend continues is something to watch. Redistricting: Where Population Meets Politics The Florida Constitution requires the Legislature to redistrict the state two years after the decennial census, that is 2022. Redistricting is a major, all-encompassing initiative that the Legislature undertakes. Florida gained one congressional seat in the last census. Where will the

left unspent from the federal stimulus packages that will add to the amount to be appropriated. Moreover, as Governor DeSantis has opened (and kept open) our state, the economy has improved and grown. All of these will lead to an expected increase in the state’s budget by the end of the 2022 Session. Additionally, more than 800 people are moving to Florida every day. In turn, this has increased Florida’s population by 14.6 percent since 2010, while the country’s population rose by 6.7 percent. Florida’s growth ranked eighth in the country. As for the raw numbers, the counties you would expect led the pack — Orange, Hillsborough, Miami

“ AS POPULATION CHANGES, SO DOES VOTER REGISTRATION;

FLORIDA USED TO BE A VERY DEMOCRATIC REGISTERED CITIZENRY. TODAY THERE ARE JUST UNDER 24,000 MORE REGISTERED DEMOCRATS THAN REPUBLICANS. ”

Dade, Broward, and Palm Beach. However, in terms of percentage growth, the top five were Osceola, St. Johns, Sumter, Walton, and Lake. However, 17 counties have experienced a reduction in population. As population changes, so does voter registration; Florida used to be a very Democratic registered

Legislature draw it? How will this affect the district lines and make up for the current 27 congressional districts? Much like a stone thrown into a pond, the ripples will be felt across the entire state. Furthermore, the Legislature must draw new district maps for all 120 House members and 40

12 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

© iStockphoto/rarrarorro

Senators. The districts are supposed to be drawn with 2.1 percent of the ideal district size based on population. In other words, close to the same population in each House or Senate District as possible. The population growth set forth above has caused most districts to grow beyond the ideal district size and they must shed residents in the district. In those 17 counties that lost population, the districts are below the ideal district size and must be increased to take in more residents. Layer on top of this the Voter Rights Act which was passed roughly 60 years ago to ensure minority representation in the legislative process. This requires the Legislature to look at the racial makeup of the districts as well. After the Legislature passes the joint resolution creating the new state districts, the Attorney General is required to petition the Florida Supreme Court to judge the validity of the maps. If the Supreme Court determines that the maps are not valid, there must

be a Special Session to work on new maps. Then these go back to the Supreme Court for validation. Should the Legislature be unable to agree on state maps or the Florida Supreme Court rules against the validity of the new maps after the Special Session, the Court shall draw the new districts. This entire process must be completed in time to qualify for federal and state elections, which will be held the week of June 13. Primary election day is August 23 and the general election will be held on November 8. The redistricting process is long and involved. It touches every facet of the state’s legislative process. It also requires every Senate district to appear on the ballot — some for two-year terms and some for four-year terms. Stay tuned to see who your new state representative or senator or congressman may be in the 2022 election.

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BANCSERV ENDORSED PARTNER: BANKERS HEALTHCARE GROUP

OPPORTUNITIES IN PARTNERSHIP: WAYS COMMUNITY BANKS CAN BENEFIT FROM TODAY’S FINTECHS

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BY MELISSA WHELAN, EVP, INSTITUTIONAL RELATIONSHIPS AT BANKERS HEALTHCARE GROUP

T here’s no question that the pandemic caused devastating loss throughout the country. But as the world begins to open back up, companies are evaluating what their “new normal” looks like and identifying ways to drive more revenue into their business. The pandemic forced us to find new ways to interact with customers. As a result, expectations for engagement have significantly increased. Apps like GrubHub and Instacart have become wildly successful

online-only direct bank. For community banks who are known for offering a high-quality customer experience and putting their customers first, this could be an area of concern. However, data from PwC shows that community banks are keeping their finger on the pulse by finding complementary partnerships that will evolve their operations and the service they provide customers. Over the next three- to five years, 82 percent of financial institutions expect to increase their

because of their convenience factor. Now, consumers expect that from the companies they do business with, alongside providing a digital experience, ease of communication, and more. These expectations transcend all industries — including financial services. Many of today’s banks have recognized this shift and are looking for new ways to attract, engage and retain their customers, all while providing a great experience. The increasing role of technology The proof of the shift to

partnerships with FinTechs, with an average return on investment of 20 percent. While others might be waiting years to build or launch partnerships, now is the perfect time for you to benefit from what other companies can offer your institution. Benefits of partnering with FinTechs Here are some of the advantages of embracing outside partnerships: • Creating additional channels for engagement:

“OVER THE NEXT THREE- TO FIVE YEARS, 82 PERCENT OF FINANCIAL INSTITUTIONS EXPECT

TO INCREASE THEIR PARTNERSHIPS WITH FINTECHS, WITH AN AVERAGE RETURN ON INVESTMENT OF 20 PERCENT.”

Consider a partner who can help expand your communication channels and build a digital presence — from updating your website to launching a mobile app or online portal to implementing more frequent email or text message communications. • Diversifying your portfolio: Go beyond your local borrower base and ensure your excess cash strengthens your bottom line, with a partner

digital is in the data. As a result of Covid-19, 50 percent of consumers now interact with their bank through mobile apps or websites weekly — up from 32 percent two years ago. Additionally, a recent survey by FIS shows that 37 percent of consumers began a new banking relationship with a major national or global bank that had a well-established online portal in the past 12 months, and 18 percent of these consumers opened an account with an

14 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

time to review your operations, identify areas of improvement for your bank, and see FinTechs as a partner you can collaborate with to strengthen your business. If your bank is interested in learning more about partnering with a FinTech, please contact endorsed vendor: Melissa Whelan BHG Bank Group mwhelan@bhgbanks.com 315-509-2572 bhgloanhub.com/Melissa Melissa Whelan serves as EVP, Institutional Relationships at Bankers Healthcare Group. She has 15 years of experience helping community banks strengthen and grow their portfolios by connecting them with premium, high-yield loans. Since 2001, BHG has originated nearly $9.4 billion in loan solutions to top quality borrowers, which banks can purchase via The BHG Loan Hub. To date, over 1,300 bank partners have trusted in this program as a proven source of interest income and diversification for their bank. 1 , 300 + Banks have purchased loans from BHG with nearly $1B Interest Earned

“ WITH CONSUMER EXPECTATIONS AND THE BENEFITS OF

that can originate a variety of high-quality loans. • Protecting your business and customer base: Investing in a partner with a strong focus on risk, compliance, and identity fraud prevention IMPROVEMENT FOR YOUR BANK, AND SEE FINTECHS AS A PARTNER... ” PARTNERSHIP RISING IN EQUAL PROPORTION, NOW IS THE PERFECT TIME TO REVIEW YOUR OPERATIONS, IDENTIFY AREAS OF

can give you peace of mind that your Know Your Customer (KYC) procedures are compliant, along with other regulatory guidelines. • Generating supplemental income: Tap into new sources of revenue for your bank, including referral opportunities and loan sources that drive fee income. How to choose the right FinTech partner Not all partners are created equal. To make sure that you’re protecting your customer experience and driving your bottom line, look for these key characteristics when vetting potential FinTech partners. • A track record of success, including being able to navigate economic downturns. • A strong focus on data and quality, with the ability to determine which loans will perform best in your portfolio. • A streamlined process, making it easy to implement new solutions and not slow down your business. • A commitment to providing best-in-class service, with quality solutions that will enhance your customer’s experience. With consumer expectations and the benefits of partnership rising in equal proportion, now is the perfect

WWW.FLORIDABANKERS.COM DECEMBER 2021 | JANUARY 2022 — 15

TRUST BANKING

SPOUSAL LIFETIME ACCESS TRUST – A 2022 ESTATE PLANNING OPTION

BY KAREN MCCRAE-LEE FATT, CTFA, AEP®, CES™

Y our high net worth clients are likely paying attention to the Biden Administration’s proposed changes to the 2017 tax reform law known as the Tax Cut and Jobs Act (TCJA). With the TCJA lifetime gift and estate tax exemption at currently $23.4 million per married couple, a significant amount of wealth can be passed to loved ones without exposure to the 40 percent estate top tax rate. While this tax advantage is set to expire December 31, 2025 and revert to the pre-2018 tax exemption levels of $10 million per married couple or $5 million per individual, the Biden Administration’s tax proposal seeks to accelerate the reduction. Under the current proposal (as of Nov. 1, 2021), the tax exemption level for individuals would shift from $5 million to $3.5 million ($7 million per married couple) as early as 2022, and the new top tax rate would increase to 45 percent. Given the possible increase in estate tax, many advisors are exploring estate planning options with their clients. The Spousal Lifetime Access Trust (SLAT) is one instrument that is receiving renewed attention. A SLAT is an irrevocable trust wherein one spouse (the donor spouse) gifts individual assets to the trust for the benefit of the other spouse (the beneficiary spouse), with the remainder interest passing to the donor spouse’s children and grandchildren. In gifting these assets to the SLAT, the donor spouse is able to benefit from the use of the federal lifetime gift and estate tax exclusion (which is currently $11.7 million per individual) by removing those gifted assets from his or her estate. Additionally, any future appreciation of those gifted assets within the SLAT is excluded from the combined estates of both spouses and is not subject to federal estate taxation. Although a SLAT is an irrevocable instrument, the donor spouse may still indirectly benefit from

the lifetime distributions from the SLAT to the beneficiary spouse given that they both reside within the same household. In case of divorce, unless the SLAT has specific language that allows the trust to terminate at such an event, the donor spouse will lose the indirect benefit of the SLAT while the beneficiary spouse continues to benefit. Generally, the beneficiary spouse is the primary beneficiary of the SLAT and can often serve as trustee with the limited ability to request distributions from the SLAT for health, education, maintenance and support (HEMS). If the beneficiary spouse needs distributions from the SLAT beyond HEMS in order to maintain an accustomed standard of living, then to avoid any potential risk of triggering the SLAT assets as part of his/her estate, an advisor might recommend appointing an independent trustee, which may be a corporate trustee or co-trustee with the power under the SLAT to distribute assets to the beneficiary spouse beyond HEMS. As typically drafted by legal practitioners, a SLAT is treated as a grantor trust for income tax purposes. As a grantor trust, income, deductions and credits are taxed to the donor spouse and thereby not taxed at the trust level (2021 top tax rate for trusts with income levels at $13,050, starts at 37 percent). However, as discussed more fully below, one downside to creating a SLAT is that assets gifted to the SLAT are not included in either the estate of the donor spouse or the estate of the beneficiary spouse, and therefore do not receive a step up in capital gains tax basis at the death of either spouse. Even though a SLAT can be created for each spouse, in order to not raise questions concerning the reciprocal trust doctrine (which is a tax law concept that can arise when two parties create similar trusts for each other), legal counsel may advise that their

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clients should avoid creating the SLATs for each other at the same time and/or with similar terms. As attractive as a SLAT may be, it is not for every wealthy family, and advisors and clients should work with qualified trust and estate planning attorneys, and CPAs in weighing the benefits and risks of implementing this estate tax strategy. A SLAT is generally better suited for those families with combined wealth that exceeds the current estate and gift tax exemption levels — currently $11.7 million for individuals and $23.4 million for married couples (assuming your client has not already used his or her full federal estate and gift tax exemption). The assets gifted to the SLAT can be individually owned by the donor spouse or titled in the donor spouse’s revocable trust; they cannot be jointly owned with the beneficiary spouse. In order to maximize the possible tax benefits of creating a SLAT, assets transferred to the SLAT, or the proceeds of funding assets, should be investments or other assets that are expected to appreciate over time, passing to future generations without incurring (under current law) additional federal gift or estate taxes. It is important to not overlook the assets a donor spouse may need in order to maintain their

accustomed standard of living, because the assets gifted to the SLAT are an irrevocable transfer. Since the SLAT is a grantor trust and the tax liability of the SLAT is paid by the donor spouse, advisors need to make sure that there are sufficient assets outside of the SLAT to satisfy these tax payments. There is no “step-up” in basis in a SLAT when the donor spouse or beneficiary spouse passes away, which means that if the trustees of the SLAT, (or the beneficiaries after the termination of the trust) later choose to liquidate the SLAT’s investments, such sales can trigger significant capital gains taxes. A SLAT may be a great tool to help your clients reduce their gift and estate tax liabilities, especially with the possibility of new tax laws and lower transfer tax exemption amounts. As with any tax or estate planning technique, this approach should be carefully and thoughtfully considered. Collaborative efforts with a team of qualified tax advisors and estate planning attorneys, working together for the clients’ unique financial position and family goals, are always recommended before any conclusive actions are taken. Karen is a Senior Vice President and Senior Trust Manager with Truist Wealth and has served as an FBA Trust and Education Committee Member since 2014.

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Florida BankPac Update PAC contributions for 2021: $259,296 Contributions received between 1/1/2021 and 11/05/2021

Contact Cheryl Tucker (ctucker@floridabankers.com) when your institution achieves 100 percent board member BankPac contributions.

Candence Bank, N.A. Caldwell Trust Company Camp Grove State Bank Capital City Bank Group Thomas A. Barron Robert J. Beauchamp William F. Butler Stanley W. Connally, Jr. Bethany H. Corum Cader B. Cox, III J. Kimbrough Davis

Belinda Cooper Kristen Crawford Michelle Crawford Ginger Devine J. Kent Ernst Cindi P. Falanga Courtney Gage Mark D. James Glenda Kalitzki Stephen T. Kurtz Monica Lester Rebecca C. Miller Robert P. Purvis April Richey Matthew T. Riley G. Michael Smith Kathryn Thomas

Christina DePari David DuVall Pamela Edwards Lisa Hobson June Howard Leah Kirby David Lowden Susan Nasworthy Kim Nyberg Wilmaris Ocasio Patrick Philbin

Banks with 100 percent board member contributions: Central Bank Community Bank of the South

Edison National Bank First Bank, Clewiston

BankPac contributions: 5iron Jason Bradley Amerant Bank Millar Wilson American Commerce Bank, N.A.

Geoffrey Roepstorff Robbie Roepstorff Richard Shera, Jr. First Bank, Clewiston Bryan Beer Mary E. Carroll Andrew Couse Miller Couse Earle Edwards, III Karl E. Larsen Thomas Perry Morris Ridgdill Carey Soud Deborah Van Sickle

J. Everitt Drew Laura Johnson Blucher B. Lines S. Craig McMillan Kenneth D. Pratt

Tammy Vega Brad Weber Martina Weiss Heidi R. Wells Tracy Williams Laura Williamson Commerce National Bank & Trust

John G. Sample, Jr. William G. Smith, Jr. John Jeffry Wahlen Capital City Trust Company

Ameris Bank Anthem Bank

Rodger Shay BancorpSouth Bank

Capital One Central Bank

Jeffrey DiBenedictis Frank A. Hall Norris F. McMahon Timothy S. Prather Jami Searle

Ray Colado Eric Ravndal Community Bank

Walter R. Andersen Scott Kohler Arvind Patel Dinubhai D. Patel Jayesh D. Patel Jayesh K. Patel Jiten Patel Mahendra Patel Nilesh Patel Rajeshkumar C. Patel Shilen K. Patel Vijay Patel Anand Sabapathy John Thompson CFT, International Connie Laguna Citizens Bank & Trust Jinx W. Chaney Tiffani R. Gozdur Cynthia W. Henry Jan Melinda Herrin Sharon R. Johnson Sherry B. Kelley Greg Littleton Robert A. Loftin William G. Middleton Bonnie B. Parker Lori J. Wilson William Brian Yates Citizens Bank of Florida Tim Slattery Citizens First Bank Jay Bartholomew Lindsey Blaise C. Dale Borrowman Tina Campbell Carlie Wynn Cosce Marianne F. George

First Citrus Bank First Colony Bank of Florida Ralph Betancourt Edward E. Haddock, Jr. Bruce W. May Domingo Sanchez Thomas J. Sheehan First Federal Bank of Florida

Linnette Kellar Fred Leopold Jason Morehouse Justin Woodard Community Bank of the South Harold T. Bistline Stephen D. Crisafulli Maxwell C. King Kevin P. Markey Kevin B. Steele William T. Taylor Carlos K. Woodward Community Spirit Bank Brad Bolton Community State Bank Jeff Oody Consolidated Banking Services Taryn Fox Crews Banking Corporation Michael Aloian Desjardins Bank, N.A. Louis Rheaume Drummond Community Bank Paige Brookins Luther Drummond

Bank Leumi Bank of America

Fabiola N. Brumley Bank of Belle Glade Julie Bussey Stephen Prielozny BankFlorida Allen Altman Dale E. Maggard Pamela Mattox Barbara Stalnaker

William S. Beardsley Courtney Blackburn George D. Brewer G. Wayne Cochran, Jr. Pam Hitt

Georgia C. Jones Keith C. Leibfried

James S. Stalnaker, Jr.

Stephanie McClendon Lawrence A. McGrath John A. Medina, Sr. James Moses

Barwick Bank

John Hodas

BBVA Beach Bank

Paul D. Ottendorf Stephen A. Smith Robert Turbeville First National Bank Coastal Community R. Moyle Fritz First National Bank of Mount Dora Bob White First National Bank of NW Florida Angie Barger First National Bank of South Miami Veronica Flores First National Bankers Bank Charlie W. Brinkley, Jr. Michael Malone Blake Tolbird

Don Anchors Tonya Calix Carl J. Chaney Peter Dyson Henry Gonzalez, III Richard Mocsari Andrew Peterson

Charles Reeves Daniel Speight Thomas Wells Pam Woodall Bessemer Trust Company BKD, LLP Michael Belman BMO Private Bank Amy Hale

Lynetta Usher Griner Donald J. Quincey, Jr.

Edison National Bank John Ammons Elizabeth Aurensan Greg Blurton Karen Brazelton Lenor Cross

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Sandra D. Creyaufmiller David S. Croom Brian C. Fowler Charles J. Gisler, Jr. Kevin J. Given Erin K. Grall

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Tom Oliver Dotti Overton Zane Petty Rich Phillips Kris Phillips Lee Pierson Stacey Pittman Malorie Porter Susanne Powers Jennifer Ptack Roger Rivard Barbara Schwabe Reade Sevigny Anne Shaughnessy Robert Smedley Joel Smith John Stump Simon Sumner Mayelin Swafford Daryl Tatum Frank Territo James Tollerton Darrell Turner John Unger Billie Valloreo Debbie Viveiros Eric Walley Donna Walsh Chad Wammock Craig West William O. West David Zillig The Spencer Group Kendall Spencer TIAA Bank Mark Parthemer TIB The Independent BankersBank, N.A. Don Briscoe Cheryl Westermann Truist Bank TrustCo Bank Kevin M. Curley John R. George Michael Hall Robert M. Leonard Robert J. McCormick Michael M. Ozimek, III Scot R. Salvador Eric Schreck Trustmark National Bank Kelley Sumrall United Southern Bank Connie Frady Gregory L. Nelson U.S Cenury Bank Valley National Bank Jeffery W. Klink Joel E. Whittenhall ViZ Bank & Trust (I/O) Joseph Dorsey Ward Damon Sasha Klein Wauchula State Bank Sherry Bohannon

First State Bank of the Florida Keys Karen M. Sharp Flagship Bank David Brandon Ronald Hockman

Ryan James The Bank of Tampa E.D. Armstrong, III Suzy Bateman Douglas Bishop, Jr. Bob Blanchard, Jr. Bryan Boudreaux Matt Boyd Dave Brown John Bui Mitchell Burley Melissa Burman Maureen Busch Greg Celestan Ken Cherven Aric Chevtaikin Dianne Cohrs Cathy Collins Charles Colwill Debbie Cooper Sharon Delong Kathryn Dinsmore Tim Donaldson Genna Dziloski Richard Eatman Luis Eguia Patricia Fain Kristen Feazell James L. Ferman, Jr. Steve Fluharty Tony Fortunato Scott Gault Ann Giles Kevin Gilligan Merlisia Gittens Donovan Glaister Brett Divers Jerry Divers

Georgia L. Irish Richard L. Lynch Kevin K. Metoff Tina M. Nicholson William J. Penney Daniel Richey

Mark Klein Ken Marks Robert B. McGivney

James Nelson Joseph Oliveri Brent Sembler Robert Shaw Paul Wikle Florida Bankers Association Pete Brokaw Anthony DiMarco Kenneth Pratt Alex Sanchez Andrea Williams Florida Business Bank William R. Norris Grove Bank & Trust Gulfside Bank Tim Clarke Jennifer B. Compton P. Compton Cramer, Jr. N. Rogan Donelly Teri A. Hansen F. John LaCivita Thomas A. Martin, Jr. Dennis B. Murphy Sam D. Norton Michael R. Pender, Jr. Charles W. Rush Drayton A. Saunders Jeff Saunders Hancock Whitney Bank Emory Mayfield Heartland National Bank Andrew S. Bible James C. Clinard Jerry T. Whidden ICI Consulting, Inc. Keith Hagen Intercredit Bank Simon Cruz International Finance Bank Jose Cueto Mary Rose McCarron Maggie McCormick

J. Hal Roberts, Jr. Leslie W. Stokes Mauldin & Jenkins, LLC Dianne Kopczynski Alison Wester MidWestOne Bank Thomas DiBernardo

Minesh Dodia Michael Durkin

Nuvia Heider Daniel Klimek Demetrius Levantini Ana Maria Senica

Millenium Bank

Suzanne Norris New York Community Bancorp, Inc. NFP Executive Benefits Joseph Schaefer One Florida Bank Frederick G. Pullum Pilot Bank Roy Hellwege

Javier Jorge Rita Lowman

Lynn Grant Jessica Hall Cathy Harris Gary Harrod

Popular Bank Prime Meridian Bank Raymond James Bank Brian Nestor Steven M. Raney Reich & Tang Jason Blair Renasant Bank Rick Kuci Seacoast Bank

Ron Hernandez Erin Hesbeens Margo Hirons Beth Horner Oscar Horton Kaley Infield Rich Junkermann Kyle Keith Malorie Kent William Kent Aenoi Kounlavong Mike Krieg Owen LaFave Alison LaPointe Tom Lee Thomas Leto Toby Lincoln Jon Locklear Tim Mann Joe Marshburn Lantz Martin Cristina Martinez

Susan Blackburn Cathy Swanson

SelectSource

Intracoastal Bank JPMorgan Chase

Angie O’Reilly ServisFirst Bank Shazam Rich Day Bryan Kain Smart Bank SouthState Bank

Michael Bennett

Legacy Bank

Dennis Bedley Madison County Community Bank Mainstreet Community Bank

W. Ben Flowers James H. Ford Thomas D. Ingram Wendy B. Libby Hal Rogers Paul Rountree

Michael L. Sleaford

Silas McAninch Terry McFatter

STS Group Jay Lewis

Susan Miller Judy Mitchell Blaine Morrison Sebastian Mrowczynski Charlie Murphy Corey Neil David Newberry Jessica Noble

Chris Nelson SunSouth Bank Sunstate Bank

Pamela Cobb J.W. Crews, Jr. Mark Delaney Nellie Garcia BankPac Update, Continued on next page

Marine Bank & Trust Company Bank Mary A. Cone Jo-Ann L. Copeland

Yvonne Debesa Lloyd DeVaux David A. Lieberman

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