Florida Banking March 2022

THE MAGAZINE OF THE FLORIDA BANKERS ASSOCIATION WWW.FLORIDABANKERS.COM MARCH 2022

Amerant Bank leadership, from left: Carlos Iafigliola, Jerry Plush, and Kristy Amaro.

Amerant Bank: Growing a New Brand with History

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 2022 Alex Sanchez President and Chief Executive Officer Fax 952-835-2295 www.BankBeat.biz

THE MAGAZINE OF THE FLORIDA BANKERS ASSOCIATION

VOLUME 37

NUMBER 2

MARCH 2022

ON THE COVER 8 - - - - -Amerant Bank: Growing a New Brand with History

CONTENTS 4 - - - - - - - - -Chair’s Message 6 - - - - - - Straight Talk from the President’s Desk 12 - -Florida Bankers Educational Foundational (FBEF) Donors List 14 - -BancServ Endorsed Partner: Non-Qualified Deferred Compensation: A Powerful Loss Prevention Tool 16 - - - - - - - - - Trust Banking: Directed Trusts – Who is Responsible if Something Goes Wrong? 18 - - - - - - - - - Capitol Day + Capitol Night Gallery 24 - - - - - Personal Transactions 26 - - - - - - - - - - - - - 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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6

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 Amerant Bank leadership, from left: Carlos Iafigliola, Jerry Plush, and Kristy Amaro.

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

Photos by Mark Gall, Images for Business, Orlando, FL

CHAIR’S MESSAGE

LOOKING FORWARD TO FBA’S ANNUAL MEETING

BY FAB BRUMLEY, FBA CHAIR

D o you know what’s just around the corner? The summer months are almost upon us, and so too is the FBA’s 134th Annual Meeting. This year’s event will be held June 5-8 at the Ritz-Carlton Grande Lakes in Orlando. We encourage you to book your hotel rooms and register now to take advantage of our “early bird” discounted pricing. It has and continues to be a privilege to connect and work together to ensure a healthy future for our industry. Especially in unprecedented times like we’ve had; we are grateful for every opportunity to gather safely in person. And when we gather, we maximize that time by attending relevant educational

by industry leaders, and the BankPac Silent Auction, a personal favorite. Be sure to dress for our “Casino Night” theme, and consider donating an item for the auction. More importantly, outbid your peers! This event is BankPac’s largest fundraiser of the year and provides important funds to support political candidates who advocate for a free and competitive marketplace. Wednesday begins with the Florida Bankers Educational Foundation (FBEF) Fun Run/Walk. Not only will you enjoy some early morning exercise, but you have the satisfaction of knowing that your participation and donations provide scholarship opportunities to bankers who are pursuing a college or graduate school degree or other professional certification.

sessions, recognizing hardworking and deserving bankers, and raising funds for the FBA’s scholarships and advocacy efforts. Our association also conducts business such as installing new officers and board members. I, personally, am proud to be passing the gavel to Incoming Chair and friend, Bill Penney. Returning this year by popular demand and for us to explore is the in-person trade show. Our event will kick off with board

We will close the Annual Meeting with the final banquet and an evening filled with entertainment and fellowship. Though we certainly have a packed schedule, we’ve built in time to enjoy your stay and explore the many amenities at the beautiful, recently renovated Ritz-Carlton Grande Lakes. I hope every FBA member

bank will send at least one representative to the Annual Meeting in June. It is a great opportunity to see the value of your bank’s FBA membership and to take an active role in our association. Be sure to register today and make your hotel reservations. We look forward to seeing each other again in Orlando! Visit the FBA website to register and stay up-to-date with the most current program information: www.FloridaBankers.com/AnnualMeeting.

meetings on Sunday, June 5, followed by the Rap with the Regulators Panel and Welcome Reception on Monday afternoon and evening. The panel gives bankers the opportunity to ask questions of representatives from each of the regulatory bodies, including the Office of Financial Regulation, the FDIC, the Office of the Comptroller of the Currency, and the Federal Reserve. Tuesday brings the General Session with our inspiring keynote speaker, breakout workshops led

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STRAIGHT TALK FROM THE PRESIDENT’S DESK

MY TIME IN IOWA, PART V: JUDGE HAROLD VANN, COACH VINCE SCHAFFER, MIAMI AND ME

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

T he time finally came to graduate from the University of Iowa, College of Law. I attended a summer semester to graduate a semester early in December of 1983. My class would graduate in May 1984. Some believe I did this so I wouldn’t have to spend another winter in Iowa, but that’s not true. After serving our country in the United States Air Force for almost five years, and nearly three years of law school, I wanted to begin my work life and have a family sooner rather than later. I did miss being with my classmates in May of 1984 for the graduation. I was then, and still am today, very grateful to the University of Iowa for accepting me to such a well-known and nationally recognized law school. While graduation was a great time, it was filled with many questions. I learned that law students at graduation should throw their caps in the air like Naval shipmen and women, but knowing that the state bar exam is still ahead, they don’t, which takes all the fun out of graduation. It was great to be back home in Miami with my parents and friends again. As an added plus, January 1984 was also a special time; my University of Miami Hurricanes were playing in the NCAA national football championship game, as an underdog to the mighty Nebraska Cornhuskers. Bernie Kosar and the Canes won their first national championship in a thriller. My days were filled now with studying for the Florida Bar and looking for a job. I went down to Peter Kent in the Miami design district and bought a suit. I had one suit and two dress shirts. I started working on my resume and printed a hundred copies to distribute. I knew no attorneys; my family did not know any attorneys. There was no family law firm to call on to seek a job. What did I do? Each morning I would drive my newly purchased used Mercury Monarch to downtown Miami and park underneath the overpasses in metered parking. I would bring lots of quarters to last me until 5 p.m., since I could not afford a parking ticket. I was freshly showered in one of my two dress shirts with my hard plastic briefcase, ready to take on downtown Miami. I started in the nearest office tower and would take the

elevator to the top floor and work my way down. I was “cold calling,” entering each law firm on every floor, asking the receptionist if I could meet with the managing partner of the firm. The usual answer I received was,“Please leave your resume and I will give it to him.” I was getting rejected each day, by the minute. The country was still in a recession and most law firms were not hiring. It was late spring and the heat arrived in Miami. Each day when I returned home, I was tired, sweaty and disappointed. I washed my shirt, wore the other one the next day, and went back out there to face my challenge: find a job. It was disheartening to have graduated from law school after two and a half years of nonstop work and not find a job. But I would never change this job search experience. Getting rejected as often as I did was an incredible experience that made me stronger. Today, I urge young students to not shy away from rejection. It builds character and strength. While it is tough to experience, it’s true what we learned from our parents: “What doesn’t kill you makes you stronger.” Each day after parking the car underneath the noisy overpasses, I prayed and asked God for his guidance that day. What I learned then and have certainly reaffirmed many times over in my life is that He always has a plan that you must seek and find. In my cold calling on law firms, I learned there are kind people everywhere. Occasionally a receptionist would tell me: “Mr. Sanchez, take a seat… let me tell the managing partner you are here.” To my great surprise, that partner would greet me and take me to his corner office, give me water, and ask for my resume. Then he would knock my socks off by telling me that he too started out by cold calling on law firms. Wow, I could not believe that. In his first job, his desk was in the hallway outside the front door to the law firm, and all the clients thought he was the receptionist. Those words inspired me to press on in my job search. Each day I drove to downtown Miami with great enthusiasm and drove home tired and rejected, but knowing the next day was another opportunity. After a

6 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

few weeks, I regrouped, and thought I needed another strategy. I thought of Judge Harold Vann. Years ago, in high school, I met Judge Vann. Legendary Florida High School basketball coach Vince Schaffer, my coach, asked our team one day after practice if one of us wanted to volunteer to help clean out the apartment of the brother of one of his friends. I volunteered. Not knowing who the coach’s friend was, it was Judge Vann and his wife who picked me up at my parents’ house in a U-Haul truck. Judge Vann’s brother lived on the first floor in a condo on Fort Lauderdale Beach. He was a WWII veteran and hero. In one weekend, we cleaned the apartment. On Sunday night Mr. Vann gave me his card and told me to stay in touch. I did. Whenever I came home on military leave to see my parents, I always visited with Judge Vann in my military uniform. So after looking for a law job and coming up empty, I called Judge Vann. He was a big guy, about 6 feet 5 inches tall, originally from Georgia with a commanding presence about him. He was mad as heck at me when he learned I had graduated from law school and had been in Miami for months and not called him. I told him I was trying to do it on my own and did not want to bother him. He told me to come see him at his judicial chambers the next day, and I said, “Yes sir.” What happened next you will not believe. It was a life lesson for me. Judge Vann asked me to follow him into his office after the bailiff told everyone to rise in the courtroom. Judge Vann gave me a big hug, and we spoke for a few minutes privately in his office. He said times were tough to find a job but to keep the faith that everything would work out for me. He then proceeded to write the names of seven Miami law firms on a piece of paper, and

started calling them one at a time, always asking for the firm’s managing partner. My eyes almost popped out when I saw the names of the firms he’d written down. It was well into the lunch hour when he started dialing, and lawyers were out to lunch. After a few calls, Judge Vann finally got a hold of the senior partner at a firm and he told him the following: “My friend Alex Sanchez is sitting in my chambers right now. I am sending him down to your law firm to begin working at 1 p.m. today.” I was in total disbelief at Judge Vann’s words. I said, “Judge Vann, you just want me to show up to that law office and begin working today? You never even asked the partner if there was a job for me; you just want me to show up?” He said, “Yes,” then added, “and you have 20 minutes to get there.” I gave Judge Vann a big hug, thanked him numerous times, and walked down Flagler Street to the law firm. I got there at 1 p.m. and the firm’s partners were all waiting for me as I exited the elevator, asking,“Are you Alex Sanchez?” I nervously replied yes. That is how my career started, thanks to a friendship I was blessed with when I volunteered in high school for a cleaning project… not knowing who I would be helping, or that one day I would need that person’s assistance. At the time, I had no way of knowing that I would even study law or that my coach’s friend was a judge. Wow, isn’t life funny? I learned many lessons from this part of my life: 1) never give up; 2) we all need help sometimes; 3) stay in touch with people and, 4) always be thankful to God for his guidance.

WWW.FLORIDABANKERS.COM MARCH 2022 — 7

Growing a New Brand with History Amerant Bank

8 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

O riginally founded as Gold Coast National Bank in North Miami Beach over 40 years ago, the bank was renamed Commercebank in 1982 and acquired by the Venezuelan group Mercantil Servicios Financieros in 1987. The bank was then renamed Mercantil Bank in 2017 and together with its US holding company spun off from the Caracas group in 2018, announcing its new brand, Amerant, shortly after that year. Today, Amerant Bank is headquartered in Coral Gables as a wholly owned subsidiary of Amerant Bancorp Inc. The bank has $7.64 billion in assets and over 600 employees with 17 branches in South Florida and seven in Houston. Amerant has evolved over the last year under the leadership of its new Vice Chairman, President & CEO, Jerry Plush, who implemented a set of strategic initiatives with the goal of becoming a top quartile performer. Plush has served on the Board of Directors of Amerant since July 2019, and was asked to be one of four board members to serve on the search committee for the new CEO. While the committee was pleased with its final candidates, they ultimately offered the role to Plush. “I love being in a leadership position and I love working with people. When you work at a small firm and you’re on a lot of boards, you don’t have as much of a direct impact on everything as you do when you

lead an organization like this one; I have to say that I jumped at the opportunity,” said Plush. Investing in Marketing When he joined Amerant at the beginning of 2021, Plush saw the need to increase Amerant’s brand recognition, as its rebranding from the Mercantil name was overshadowed by the tumultuous year of the Covid pandemic. The company quickly moved to engage Zimmerman Advertising to increase Amerant’s brand awareness and recognition in target markets and through their partnership with local hockey team the Florida Panthers. “I’ve been a hockey person my whole life. At the beginning of last year, the Panthers had a great run, but some unfinished business in the playoffs, and we saw this partnership as a win-win for both of our organizations,” said Plush. Amerant is the helmet sponsor for Panthers home games. Plush is pleased with how beautifully the orange Amerant logo stands out on the navy helmets in pictures and on TV. The partnership also includes virtual on-ice logo positioning during games and allows for great social media tie-ins. Amerant’s “imagine a bank” campaign uses photos of the Panthers to illustrate clever taglines like, “Imagine a bank that has your back.” Amerant Bank, Continued on page 10

The Amerant Bank management team in the lobby of the Coral Gables branch in Miami.

WWW.FLORIDABANKERS.COM MARCH 2022 — 9

among other things. Amerant uses recycled water bottles and its branches give out reusable, branded grocery bags made of recycled materials. The bank has also installed electric vehicle charging stations at its headquarters and plans to deploy more in other locations. On the governance side, Amerant is focused on fair pay, diversity and inclusion, and its board composition. Plush has created a new C-suite position and appointed Kristy Amaro as Chief of Diversity & Inclusion; in her new role, she will work to further enhance opportunities for diverse representation in the company. When it comes to growing the Amerant team, Plush emphasizes that he is not only looking for bankers or those with prior banking experience. “The integration of different backgrounds makes a huge difference in our company,” said Plush. “There are terrific people here, and that’s what has helped drive our success.” Partnering with Fintechs Amerant has launched a number of products in partnership with fintechs, including Marstone, Alloy,

Amerant Bank, Continued from page 9

“Our folks have been very creative in doing a lot with very little. And now that we’ve put dollars behind these marketing campaigns, we’ve amplified our efforts and increased our brand recognition as a result,” said Plush. Prioritizing ESG Initiatives So too has Plush made a push for implementing sustainable solutions in the workplace. Consumers, especially, are increasingly mindful of business’ environmental, social, and governance (ESG) issues. Having observed the impacts of the environment and climate change in Miami and Houston, Amerant feels that it’s critical to show its customers how serious its bank leadership is about ESG. “There are so many little things you can do under ESG to positively impact the environment,” said Plush. “ESG is not a checklist for us; we want to make it a way of life. At Amerant, we ask, ‘How can we thread ESG into our DNA as an organization?’” In the initial phase of this process, the company has focused on more immediate changes; this includes recycling, going paperless, and eliminating plastic,

The Amerant Bank women executives, from left, are: Laura Rossi, Anahy Espiga, Silvia Larrieu, Christine Esteve, and Kristy Amaro.

10 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

Q2, Raistone, and more. Amerant Smart Investing, for example, is a white-labeled investment platform provided by Marstone. The bank has another project with Marstone in the works, a personal financial planning module which allows customers to save for specific financial goals. Amerant also launched a tool for automated small business lending powered by Numerated Growth Technologies.

Jerry Plush is a well-known senior financial services executive with more than 35 years of experience. He currently serves as Vice Chairman, President & CEO of Amerant Bancorp, Inc. He has served on the Board of Directors of Amerant since July 2019. Prior to joining Amerant, Plush served as a partner with Patriot Financial Partners, L.P., a private equity firm based in Radnor, PA. He sourced new investment opportunities for the firm and represented Patriot on the board of directors for multiple portfolio banks, specialty finance and fintech companies. Plush holds a Bachelor of Science degree in Accounting from St. Joseph’s University in Philadelphia. He is a certified public accountant and a certified management accountant and is a member of the National Association of Corporate Directors (NACD). He is a NACD Board Leadership Fellow and holds the CERT certificate in Cybersecurity Oversight. Plush has been active in several well-known philanthropic organizations, including serving on the board of trustees of the Connecticut Public Broadcasting Network, as chairman of Junior Achievement of Southwest New England, as the founder and event chair of the Children’s Charity Invitational, on the Board of Overseers for WGBH in Boston and on the board of directors of Junior Achievement of Southeastern Pennsylvania. He currently serves on the board of directors of United Way Miami and Miami-Dade Beacon Council. “We saw a clear need when PPP ended to automate small business lending. Our tool allows small businesses to apply and receive funding within 24 hours,” said Plush. Amerant strategically chose its fintech partnerships for the ability to go from contract signing to implementation in just 90 days. “We look for ways to make it easier to bank with us. And it’s not at the expense of personal service. Customers are demanding that they have the ability to interact with their bank via digital processes; at the same time, they’re with us because of our personal service,” said Plush. “Our people are as important as ever, but we’re putting additional tools and efficiencies in place to benefit both our team and our customers. We believe that these integrated solutions combined with our quality people is a pretty unbeatable combination.”

“ESG is not a checklist for us; we want to make it a way of life.” - Jerry Plush

MEET JERRY PLUSH, VICE CHAIRMAN, PRESIDENT AND CEO

WWW.FLORIDABANKERS.COM MARCH 2022 — 11

Z

FLORIDA BANKERS EDUCATIONAL FOUNDATION (FBEF) DONORS CONTRIBUTIONS RECEIVED FOR THE 2021-2022 FISCAL YEAR THROUGH FEBRUARY 1, 2022

Company and contact names are listed as they were at the time the donation was made

Thank you to all FBEF donors! Your annual contributions help support the FBEF's mission to help Florida bankers advance their careers through education. We appreciate your of the FBEF.

Jeff Sands Blake Tolbird Robert L. Trott First State Bank of the Florida Keys Karen M. Sharp Five Iron, LLC Jason Bradley Flagship Bank Robert B. McGivney Florida Bankers Association Pamela Ricco Florida Business Bank William R. Norris Florida Capital Bank Mark Johnson Grove Bank & Trust Sheldon Anderson Heartland National Bank James C. Clinard ICI Consulting, Inc. Keith Hagen Independent Community Bankers of America Scott Brown Intercredit Bank, N.A. Simon Cruz Intracoastal Bank Bruce E. Page Madison County Community Bank Edward Meggs Mainstreet Community Bank of Florida Janelle Flowers W. Ben Flowers Thomas D. Ingram Marine Bank & Trust Company William J. Penney Shaun E. Williams MidWest One Bank, Michael Durkin New York Community Bancorp, Inc. Mark D. Watson One Florida Bank Frederick G. Pullum

Amerant Bank,N.A. Jerry Plush Amerifactors Financial Group, LLC Chris Davis Ameris Bank Palmer Proctor, Jr. Anchor Bank Nelson Hinojosa Apollo Bank Eddy Arriola Banc Card of America

Commerce National Bank & Trust Guy D. Colado Ray D. Colado Eric Ravndal Community Bank Fred Leopold Community Bank of the South William T. Taylor Crews Banking Corporation James W. Crews, Jr. Rob Roberts Dixon Hughes Goodman LLP Adam Thomas Dorsey Consulting, LLC Joseph Dorsey Finemark National Bank & Trust Harlan Parrish FirstBank Florida Calixto Garcia-Velez First Bank, Clewiston Miller Couse

Tyler Dutton Tyler Martin

Banesco

Mario Oliva

Bank Leumi Jeff Watts BankFlorida,

J ames S. Stalnaker, Jr.

Beach Bank

Charles Reeves

BKD, LLP

Earle Edwards Morris Ridgdill First Bank & Trust Gary Blossman First Citrus Bank Jack M. Barrett First Florida Integrity Bank Gary L. Tice First Horizon Bank Mario Trueba First National Bank Brad E. Barber

Meagan Clark BMO Harris Bank, N.A. Chad Campbell Caldwell Trust Company Kelly Caldwell, Jr. Capital City Bank Group Edward Canup Bethany H. Corum Connie Davis J. Kimbrough Davis Brantley Henderson Daniel Petronio Capital City Trust Company William L. Moor, Jr. Central Bank John M. Thompson Citizens Bank & Trust Gr eg Littleton City National Bank of Florida Jorge Gonzalez College Ave Student Loans Bill Ayers

First National Bank Coastal Community R. Moyle Fritz First National Bank of South Miami Veronica Flores First National Bankers Bank Charlie W. Brinkley, Jr. Delvan Irwin Michael Malone Lourdes M. Mendes Jeff Neale

12 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

The First, ANBA

ServisFirst Bank Rex McKinney SHAZAM Bryan Kain SmartBank Billy Carroll, Jr. South State Bank John Corbett

Popular Bank

Michael R. Wilson TIB The Independent Bankers Bank, NA Eric Allen Don Briscoe Trivergent Trust

Israel Velasco Prime Meridian Bank Sammie D. Dixon, Jr. Monté L. Ward Professional Bank Abel Iglesias QSI, Inc. Christy McMurry Raymond James Bank, N.A. Steven M. Raney Renasant Bank Adam J. Lombardo Saltmarsh, Cleaveland & Gund Paul Allen Kristen Stogniew Josh Strickland Seacoast Bank

Robert F. Thomson II

TrustCo Bank, Eric Schreck Trustmark National Bank John D. Sumrall United Southern Bank Connie C. Frady Gregory L. Nelson U.S. Bank Sandra Fleming U.S. Century Bank Luis de la Aguilera Valley National Bank Joseph V. Chillura Winter Park National Bank David R. Dotherow KC Dotherow L. Gary Wright & Associates L. Gary Wright

Ashley A. Dunson Stearns Weaver Miller

Landus Anderson Marco Paredes, Jr.

STS Group

Russell Bowling Jay Lewis Adam Stephens

SunSouth Bank Monty Weigel Sunstate Bank

Susan Blackburn Cathy P. Swanson Karen G. Nolan Seacoast National Bank Todd Feintuch SelectSource Cheryl Chapman Angie O’Reilly

Yvonne Debesa Lloyd DeVaux Fabricio Macastropa

TCM Bank

Damon J. Moorer

TD Bank, N.A. Nick Miceli

A COPY OF THE OFFICIAL REGISTRATION AND FINANCIAL INFORMATION MAY BE OBTAINED FROM THE DIVISION OF CONSUMER SERVICES BY CALLING TOLL-FREE 800-435-7352 WITHIN THE STATE. REGISTRATION DOES NOT IMPLY ENDORSEMENT, APPROVAL OR RECOMMENDATION BY THE STAT E. www.FloridaConsumerHelp.com

The FBEF is a 501(c)(3) non-profit corporation registered with the Florida Department of Agriculture & Consumer Services, Registration #CH7621. Contributions to the FBEF are tax-deductible. Organized in 1956, the FBEF continues to help bankers throughout Florida. If you are interested in making a tax-deductible contribution to the FBEF, contact Letty Newton at 850-701-3522, lnewton@floridabankers. com, or PO Box 1360, Tallahassee, FL 32302-1360. For information on applying for FBEF funding please go to floridabankers.com/FBEF.

WE LOOK FORWARD TO THE NEXT TIME THE FBEF CAN WELCOME YOU TO TALLAHASSEE Thank you to everyone who participated in the 2022 FBEF Welcome Reception the night before FBA’s Capitol Day + Capitol Night. This year’s fundraiser was a success, with our largest group of attendees yet. A big thank you goes out to the 2022 FBEF Welcome Reception sponsors: • Wine Sponsor – Saltmarsh, Cleaveland & Gund • Hors d’oeuvres Sponsor – Seacoast Bank • Dessert Sponsor – Madison County Community Bank • Name Badge Sponsor – Five Iron, LLC

• Napkin Sponsor – Capital City Bank Group • Friend of the Foundation – ICI Consulting, Inc.

A COPY OF THE OFFICIAL REGISTRATION AND FINANCIAL INFORMATION MAY BE OBTAINED FROM THE DIVISION OF CONSUMER SERVICES BY CALLING TOLL-FREE 800 435-7352 WITHIN THE STATE. REGISTRATION DOES NOT IMPLY ENDORSEMENT, APPROVAL OR RECOMMENDATION BY THE STATE. www.FloridaConsumerHelp.com

WWW.FLORIDABANKERS.COM MARCH 2022 — 13

BANCSERV ENDORSED PARTNER: NFP

NON-QUALIFIED DEFERRED COMPENSATION: A POWERFUL LOSS PREVENTION TOOL F L O R I D A B A N K E R S A S S O C I A T I O N

BY GLENN BLACKWOOD AND JOE SCHAEFER

W hen we think of loss prevention, insurance often comes to mind. Insurance policies exist to protect against the sudden financial loss of an unexpected event. By nature, insurance is a tool to reduce risk and financial burden. For example, banks insure their physical branches, vehicles, liability, and cyber security risk, so why not insure against the loss of your most valuable asset – your people? For a bank, a Non-Qualified Deferred Compensation (NQDC) or Supplemental Executive Retirement Plan (SERP) can be a powerful loss prevention tool and can behave like an insurance policy to do just that. When a business offers a SERP to an employee, the intent is not merely to deliver additional compensation, but rather to accomplish several

key employee leaves an organization. The employee experiences the pain of leaving behind any unvested portion of the benefit while the organization incurs a host of unexpected costs, both direct and indirect, when a key employee departs. This double-edged pain is precisely what NQDC, such as a SERP, aims to prevent. While the impact associated with the loss of a key employee will be felt differently by each bank, consider the following example of what it could look like, in terms of lost revenue, if a top loan officer was to quit and take 30 percent of his relationships to a competing organization. Assumptions: • Lender manages a $40 million loan portfolio with 4 percent margin ($1.6 million in annual revenue) • $10 million per year in new loan growth • 30 percent of the total

objectives, as follows: (1) to provide equitable retirement benefits to its senior management team whose benefits are often restricted by limitations from ERISA and IRS guidelines, (2) to attract talent by providing a well-rounded and meaningful compensation program, and (3) to protect itself against the financial loss that would occur if the employee were to leave for another organization, which brings us to the main focus of this

“ THE COST OF LOSING AND EFFECTIVELY REPLACING KEY EMPLOYEES FAR OUTWEIGHS THE COST OF USING A NQDC PROGRAM AS A LOSS PREVENTION TOOL. ”

portfolio would be $12 million in existing loans lost to a competing bank Based on these assumptions, if $12 million in loans were to leave the bank in year one, that would equate to $480,000 in lost revenue. The $10 million of new loans not generated results in another $400,000 lost revenue opportunity, for

article. In these situations, we are discussing key employees who are leaders or significant members of the team who directly impact the economic success of the organization. In this context, a SERP acts as an insurance policy and loss prevention tool that organizations use to reduce the risk of losing strong contributors. The insurance element is achieved via the documented vesting provisions of the SERP contract. In terms of loss, it is important to understand that the knife cuts both ways when a

a total loss of $880,000 in year one. This lost revenue could continue in year two, year three, or until the bank replaces both the lender and the lost business. Now imagine the compounded loss if this lender was the CLO and took others on the team with them. The cost of losing and effectively replacing key employees far outweighs the cost of using a NQDC program as a loss prevention tool. Because no two employees are alike, the primary advantage of using NQDC to reduce risk is its high degree of flexibility.

14 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

Whether the bank’s goal is to align performance with shareholder objectives or to provide a steady source of retirement or a shorter-term deferral of income to key executives, a NQDC program can be designed to suit the needs of the bank and individual. In this way, the NQDC structure becomes a customizable insurance policy for banks to secure their management team, as well as to attract and retain talent in a competitive market. This enables your key employees to focus on growing the bank, rather than searching for their next job opportunity. According to the American Bankers Association, roughly 65 percent of banks in the United States provide some type of NQDC program for their leadership. To finance the expense associated with these plans, banks often look to Bank-Owned Life Insurance (BOLI). This is no coincidence since the attributes of BOLI are uniquely appropriate to offset the expenses of a NQDC program for two main reasons. First, because the expenses in a NQDC plan are predictable and are generally a long-term obligation, the reliable returns from a BOLI program match up effectively over time. And second, BOLI carries death benefit coverage which provides the means to preserve a participant’s full benefit for their selected beneficiary, in the event the participant passes away before the benefit has been fully accrued. Combined, the BOLI and NQDC

strategy is a one-two punch to efficiently reduce risk, grow the bank, and deliver benefits to key employees. In closing, a few questions to consider regarding a NQDC program: • In what way(s) does your bank provide value to retain your talent that your competitors do not? • Does your bank have the right team in place to reach its goals and continue to provide value? • If not, for what positions should your bank be recruiting? • What would happen if one or more key employees were to leave? • Would the key employee be difficult to replace and what would be the lost opportunity if they were to leave? Glenn Blackwood and Joe Schaefer are consultants with NFP Executive Benefits. To learn more, contact Glenn Blackwood at glenn.blackwood@nfp.com or Joe Schaefer at joe.schaefer@nfp.com. Glenn Blackwood is a registered representative with Kes tra Investment Services. Insurance services provided through NFP Executive Benefits, LLC. (NFP EB), a subsidiary of NFP Corp. (NFP). Securities offered through Kestra Investment Services, LLC, member FINRA/SIPC. Kestra Investment Ser vices, LLC is not affiliated with NFP or NFP EB. Investor Disclosures: https://bit.ly/KF-Disclosures

The National Graduate

School of Banking

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Session Dates: August 21 – September 2, 2022 Location: University of Washington, Seattle, WA To learn more about PCBS or to apply to the program, call (425) 278-0250

PCBS, in partnership with the Foster School of Business at the ff the University of Washington, o ers a premier three-year ffers a premier three-year grad fi graduate-level educational program focused on the nancial financial services industry. Our full-length courses, taught by outstanding industry experts, provide responsive, practical answers to today’s most critical banking challenges.

or visit www.thePCBS.org We look forward to everyone joining us on campus next year!

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TRUST BANKING

DIRECTED TRUSTS – WHO IS RESPONSIBLE IF SOMETHING GOES WRONG?

KELLY O’KEEFE, SHAREHOLDER, STEARNS WEAVER MILLER

W hen a settlor creates a directed trust giving a non-trustee certain administrative powers over the trust, who is responsible if something goes wrong? You must ask this question before agreeing to serve as a “trust director” or “directed trustee” of a directed trust. But where is the answer? The trust terms are your first source, but you can now look to the Florida Uniform Directed Trust Act (the “Act”), which went into effect on July 1, 2021, as Part XIV of Florida’s Trust Code, Chapter 736. The Act offers guidance on issues where little previously existed in Florida, including the controversial issue of who is the fiduciary in a directed trust. While the Act provides significant guidance, it leaves many issues open to interpretation. The Act is intended to make Florida directed trusts more appealing to those making and managing generational transfers of wealth. Transfers of wealth to future generations in the next two decades are expected to be larger than ever before and much of that wealth will pass through directed trusts. Directed trusts are appealing because they offer a means of ensuring a settlor’s intent is paramount in the trust administration. For example, they give a settlor the opportunity to continue using the services of a trusted family advisor who can provide the trustee instruction on specific issues, such as investments or distributions, requiring consideration of unique family relationships, family businesses or special needs beneficiaries. Were it not for the settlor’s selection of a trusted family advisor in these circumstances, a trustee might otherwise delegate that sensitive responsibility to an individual or entity who is ill-equipped to handle it. Directed trusts also allow settlors to appoint trust protectors and give them the flexibility to amend or terminate a trust or remove and appoint trustees when necessary to preserve the settlor’s intent or protect the beneficiaries. A directed trust may also prevent family turmoil by removing

distribution decisions from an adult child and giving them to a trusted family advisor or advisory committee. Directed trusts offer these advantages without the deadlock that may result when co-trustees of a traditional trust disagree. How do directed trusts deliver these advantages? Pursuant to the Act, a settlor may grant a trust advisor or trust protector, now collectively referred to in Florida’s Trust Code as a “trust director,” the power of direction over some aspect of the trust administration. That trust director also has the attendant powers needed to exercise the power of direction unless the trust provides otherwise. For example, trust directors can hire attorneys or other professionals to assist in performing their assigned duties provided the trust does not prohibit them from doing so. The trustee of a directed trust remains the trustee but is now also a “directed trustee,” who must follow the trust director’s instructions to the extent the trust director has been granted the power of direction. In addition to being effective estate planning tools, directed trusts increase opportunities for wealth managers. They permit a client’s longtime investment advisor to continue serving the client as a trust director tasked with investment decisions rather than losing that client to a trust company. The trust company, serving as a directed trustee, may in turn gain a new client who would not have retained the trust company without the benefit of that client’s longtime trust advisor. This arrangement clearly benefits the client in multiple ways. For example, where a directed trustee has only minimal responsibility for the decisions of a trust director, the directed trustee may be able to offer more competitive pricing for its services. The opposite is true if the directed trustee bears fiduciary responsibility for the trust director’s actions. In that situation a trustee has no incentive to take on the role of directed trustee.

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The Act, however, provides the incentive by clarifying where fiduciary responsibility lies. The Act provides that a trust director shall be a fiduciary to the beneficiaries with respect to the powers it holds and a directed trustee, who only facilitates the trust director’s exercise of that power, shall incur reduced, secondary liability only to the extent of his willful misconduct when deciding whether to comply with the trust director’s directions. Accordingly, a directed trustee must take reasonable action to comply with a direction, but if compliance amounts to willful misconduct the directed trustee may be liable. That may sound simple, but in practice there will be pitfalls because what amounts to willful misconduct is not defined and will only become apparent in each set of circumstances. As the law of directed trust evolves, the landscape will be ripe with beneficiaries who may assume that, although a directed trustee followed a trust director’s instructions, the directed trustee had a similar but independent power under the trust that if exercised prudently could have mitigated the loss caused by the trust director’s actions or inaction. This means vague descriptions of powers can be costly. Trust terms that are contrary to the Act may also cause confusion. A directed trust may place a heightened fiduciary standard on the directed trustee, for example, by imposing a negligence standard instead of willful misconduct. Conversely, a trust may decrease a trust director’s fiduciary responsibility. Regardless, exclusionary clauses eliminating all fiduciary responsibility generally remain unenforceable in Florida. Directed trusts may not appear obvious on their face either. They are unlikely to specifically reference a trust director, trust advisor, trust protector or directed trustee, but instead may only describe a non-trustee’s power. Consequently, a directed trustee must read the trust carefully to assure that a trust director actually has a power before following directions related to that power. The Act requires it. The Act also establishes that there are certain powers that will not be considered directed powers unless the trust expressly identifies them, such as the power to appoint or remove a trustee. While an indemnification provision might be one way to effectively distinguish the respective fiduciary obligations of a trust director and directed trustee, a well-drafted trust that expressly delineates rights, duties and powers between the two and provides for a dispute resolution process between them should be the preferred choice. When the preferred choice is not available, there are still options. A directed trustee with doubts about its duty to comply with a trust director’s directives can apply to a court for guidance, and receive attorneys’ fees and costs from the trust for doing so. To prevent the filing of actions against them, directed trustees and trust directors can shorten the limitations period by giving appropriate notice to beneficiaries. Thanks in part to the work

of the Florida Bankers Association, the six-month limitations period set forth in section 736.1008, Florida Statutes, was extended to the directors, officers and employees of trustees and trust directors. Fiduciary obligations are not the only uncertainty the Act attempts to demystify. While all the questions the Act addresses are too voluminous to cover here, a few governing the relationship between the trust director and directed trustee are worth noting. The Act restricts a trust director’s power to release a trustee from liability. It also addresses how much information they must share. Information sharing is of critical importance when one cannot reasonably act without information from the other, for example, when one has the power to invest and the other has the power to distribute. The absence of trust terms addressing this key issue has been a significant source of litigation, which the Act attempts to assuage by requiring the trust director and directed trustee to provide information to each other when reasonably related to the other’s powers or duties and their own duties. There is also a safe harbor provision that prevents liability for one’s reliance on information provided by the other, unless acceptance of the information amounts to willful misconduct. As to obligations to the beneficiary, a trust director must provide information within the trust director’s control to a qualified beneficiary upon written request to the extent the information is reasonably related to the trust director’s power or duties. The directed trustee’s obligations to inform beneficiaries remain the same as a traditional trustee. However, unless the trust provides otherwise, a directed trustee has no duty to monitor a trust director or advise beneficiaries of instances when the directed trustee might have acted differently than the trust director. Overall, the Act offers significant clarity on specific issues, but there are others that must be explored to fully appreciate who is responsible if something goes wrong. For example, tax and federal benefit eligibility issues (which are beyond the scope of this article) must also be examined. What can be most clearly discerned from the Act is that a directed trust clearly delineating the rights and duties of the trust director and directed trustee is the best way to assure you can answer the question – “who is responsible if something goes wrong?” Kelly O’Keefe is a Shareholder in Stearns Weaver Miller’s Tallahassee office. She represents professional and family member fiduciaries in complex and high stakes estate, probate and trust disputes and litigation. Kelly is the Vice Chair of the Tallahassee Regional Estate Planning Council, and a subcommittee Chair for the Florida Probate Rules Committee. She is regularly recognized by The Best Lawyers in America, Florida Trend and Super Lawyers magazines and is AV Preeminent Rated by Martindale-Hubbell. You can reach Kelly at kokeefe@stearnsweaver.com.

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Capitol Day + Capitol Night 48 TH ANNUAL

T he FBA’s 2022 Capitol Day + Capitol Night events were a success. Nearly 200 bankers joined us in Tallahassee in order to advocate for our industry at the capitol. Capitol Day began in the morning with an in-depth Government Relations Council meeting that included discussion about state and federal legislative issues. Bankers then attended a luncheon with keynote speaker Attorney General Ashley Moody. Additionally,

there were small-group appointments with members of the Florida Legislature. The bankers also heard from Representatives Duggan, Yarborough, Ingoglia, Jenne, and Grall. Capitol Night presented an opportunity for bankers, legislators, staffers and friends to come together in an informal setting. Fresh fare of seafood and fresh corn-on-the-cob was enjoyed by all. Special thanks to event sponsor FNBB - First National Bankers Bank.

PHOTOS COURTESY OF COLIN HACKLEY, COLIN HACKLEY PHOTOGRAPHY, TALLAHASSEE

CAPITOL DAY LUNCHEON

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CAPITOL DAY LUNCHEON

CAPITOL DAY MEETINGS

Capitol Day + Capitol Night, Continued on page 20

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Capitol Day + Capitol Night, Continued from page 19

CAPITOL DAY MEETINGS

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CAPITOL DAY MEETINGS

CAPITOL NIGHT

Capitol Day + Capitol Night, Continued on page 22

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Capitol Day + Capitol Night, Continued from page 21

CAPITOL NIGHT

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CAPITOL NIGHT

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PERSONAL TRANSACTIONS

NEW CEOS AND/OR PRESIDENTS FORT MYERS

SANIBEL

Jeffrey A. Muddell, CFP was named office president of the Sanibel-Captiva operation for The Sanibel Captiva Trust Company. He will work daily beside S. Albert D. Hanser, founder and chairman, as Muddell’s duties within the

Sanibel Captiva Community Bank announced the promotion of Kyle DeCicco to bank president and board director. He joined the bank in 2016 as vice president and commercial loan officer. A member of the bank’s executive management

Muddell

DeCicco

company and community expand. He joined the company’s wealth services team in the fall of 2019 and he has worked closely with many clients, focusing a large part of his efforts on new client development as well as financial planning services for many of the firm’s next generation clients. Muddell has had a successful career in the nonprofit management and philanthropy industry, having served as system director of gift planning for the Lee Health Foundation in Fort Myers, following 18 years in the Orlando area where he led fundraising efforts at Orlando Health Foundation. Muddell holds a Master’s in Business Administration degree from the University of Florida’s Warrington School of Business, and has obtained his Certified Financial Planner (CFP) designation. He earned his bachelor’s degree in communications from the University of Miami. He is currently on the board of directors of the Charitable Foundation of the Islands, president of the Sanibel School Fund, a committee member for SanCap Cares, and a member of Sanibel Community Church.

team since January 2020, DeCicco was previously executive vice president. In his new position, he oversees management and operations, while continuing his responsibilities as senior loan officer. With over 15 years of banking experience, he has worked in commercial real estate and lending, credit analysis, performing and nonperforming loan portfolio management, and management of FDIC insured loss-share assets. DeCicco is a graduate of the Florida Bankers Association – Florida School of Banking and holds a bachelor’s degree in business administration from Florida Atlantic University. With the bank’s continued support, DeCicco is in his final year of the American Bankers Association’s Stonier Graduate School of Banking at the Wharton School of the University of Pennsylvania; he is expected to graduate in June. As a Southwest Florida native, DeCicco is committed to supporting community organizations by serving as a board member and treasurer of The Foundation for Lee County Public Schools; he is a member of the foundation’s Grant Selection Committee, among other volunteer efforts.

PROMOTIONS/NEW HIRES DAYTONA BEACH

having served in a range of areas including risk management and business lending. Weise graduated from University of Central Florida with a Bachelor of Science degree – Business Administration & Finance. FORT MYERS

Intracoastal Bank announced the addition of Stuart Weise as senior vice president / chief credit officer. In this role, he will have the primary responsibility for overseeing all aspects of the bank’s credit risk management function including

Weise

Sanibel Captiva Community Bank announced the promotion of Dan Cronin to senior vice president.

compliance with banking laws, regulations, audits, policies and procedures. He will also be responsible for the overall management of all loan credit related activities. Prior to joining Intracoastal Bank, Weise was executive credit manager for Renasant Bank, Nashville Tennessee. He comes to Intracoastal Bank with more than 30 years of experience in commercial banking,

Based in the bank’s McGregor branch, Cronin was previously a vice president and residential loan officer. Originally from Michigan, Cronin is a University of Michigan graduate and Cronin

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