Florida Banking November 2021

FBA’s Trust and Wealth Management Division: Shaping New Legislation

THE MAGAZINE OF THE FLORIDA BANKERS ASSOCIATION WWW.FLORIDABANKERS.COM SEPTEMBER 2020 THE MAGAZINE OF THE FLORIDA BANKERS ASSOCIATION WWW.FLORIDABANKERS.COM NOVEMBER 2021

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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 10

NOVEMBER 2021

ON THE COVER 8 - - - - - FBA's Trust and Wealth Management Division: Shaping New Legislation CONTENTS 4 - - - - - - - - -Chair’s Message 6 - - - - - - Straight Talk from the President's Desk 12 - - - - - - - Trust and Wealth Management Division Legislative Accomplishments 14 - - - - - - - - - Trust Banking: A Preview of the 2022 Legislative Session 16 - - - - Government Relations: Some Thoughts on the Unbanked 18 - -BancServ Endorsed Partner: Renewed Interest in Bank Captives in 2021 20 - - - - - - - - - FBEF Donors 22 - - - - - Personal Transactions 24 - - - - - - - - - - - - - Kudos 28 - - - - - - FBA Staff Spotlight 29 - - - - - - - - - Recent Events 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

4

6

Fab Brumley Chair

Bill Penney Chair-Elect

Greg Nelson Immediate Past Chair

Lloyd DeVaux Second Immediate Past Chair

29

On the Cover: Members of the FBA Trust Executive Committee

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

Photos by Mark Gall, Images for Business, Orlando, Fla.

CHAIR’S MESSAGE

THE STRONGER OUR MEMBERSHIP, THE MORE EQUIPPED WE ARE TO SERVE

BY FAB BRUMLEY, FBA CHAIR

W hen issues arise like the IRS transaction data proposal, I’m reminded of the value in having an organization like the Florida Bankers Association that speaks out on behalf of our industry. Our state associations give our industry a unified voice, one that reaches the representatives and policy makers who vote on the issues that could either help or hurt our community banks. The FBA has been representing financial institutions in Florida since 1888. Today, we are one of the most powerful state banking associations in the country, advocating on behalf of members in Tallahassee, Washington, D.C., and in state, regional, and national media outlets. These are just a few of the top benefits of membership with the FBA: Support and advocacy for banks The FBA has strong leadership in the halls of the Florida Legislature and the U.S. Congress, building relationships and advancing legislation that will be beneficial to the industry. The skilled lobbyists on the FBA’s Government Relations team have an ear to the ground for both the challenges we’re facing today and those on the horizon. And the FBA wants to hear from its member banks. The team invites input from the bankers it serves. Most recently, for example, trust banking CEOs had the opportunity to sit down with FBA President and CEO Alex Sanchez for a roundtable discussion. Sanchez went table to table to speak personally with every attendee, asking questions to learn more about the important issues facing the trust and wealth management industry. While you and I have our own personal political viewpoints, the FBA is bipartisan and works with representatives on both sides of the aisle to do what’s best for our industry. You’ve probably heard Sanchez describe himself as a “one-trick pony,” meaning that he supports the people who support banking — regardless of party affiliation. Access to vendors through BancServ Last month, I wrote about BancServ, Inc. (BSI), a wholly owned subsidiary of the FBA dedicated to

researching and selecting vendors on behalf of member banks. BancServ’s “Endorsed Partners” must undergo a stringent application process, and once chosen, offer discounts and exclusive offers to bankers. These vendors provide products and services across a variety of industries, including compliance, check and marketing services, investment products and services, office supplies and printing, bank security equipment, etc. Researching vendors takes time and effort, but member banks can rest assured that the FBA has done the appropriate due diligence in vetting these companies and their credentials. Educational and networking opportunities The FBA Education Department is dedicated to providing quality educational events covering topics that are timely, beneficial and valuable to member banks. This includes both online and in-person opportunities like seminars, webinars, workshops and conferences. It is so important to learn and stay up-to-date if we are to gain a competitive advantage in this rapidly changing industry. I attended many FBA workshops and trainings when I started my banking career. Looking back, I’m incredibly grateful for the opportunity to both learn and network with fellow bankers. These educational events not only introduced me to friends and colleagues I still know today, but also helped me become more involved with the FBA. We at the FBA like to say that “the voice of many is louder than the voice of one.”The FBA is the megaphone that amplifies our voices. The stronger our membership, the more that the FBA is equipped to serve the bankers and financial institutions in our great state. If you aren’t already a member of the association, I encourage you to add your voice. 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 II: MY LIFE BEGINS AT IOWA LAW

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

U pon my honorable discharge from the U.S. Air Force at McGuire Air Force Base in New Jersey, I took an Eastern Airlines flight to my hometown of Miami to vacation for 30 days with my parents. I began my life as a civilian. No more uniforms. I could grow my hair as long as I wanted. I didn’t have to spit-shine my shoes anymore. After almost five years in the military, I would now become a full-time student at the University of Iowa, College of Law. So how was my transition into civilian life? I had short hair and still shined my shoes with my horsehair shoe brush that I had purchased from my roommate during my first year in the military. I arrived in Iowa City in early August of 1981. I noticed three things right away about Iowa: people were very nice, the ears of corn were like sugar, and like Florida, it rained many afternoons and everything was lush green. As I was settling in, I went to the Law School to register and pick up a stack of five books. Those books were thick and heavy. At the law school briefing by Dean Hines, he warned us to work and study hard. He added it didn’t matter whether we were Summa Cum Laude in undergrad, this was law school and focus and hard work was critical to our success. As I looked around the large stadium seating classroom, I could see terror in the eyes of all the students. I am sure I looked worried too. After the Dean’s lecture about the reality of law school, we exited the large classroom. At that point I met many of my future classmates. Most of them were concerned and worried about the Dean’s advice that party time was over from the undergraduate student days. I did not say a word to my classmates, just listened to their concerns about how tough law school was going to be. At one point in the conversation, I was asked: “Alex, do you agree that law school will be tough and we won’t have much time for personal affairs?” I answered, “Yes, law school will be tough, but I can’t believe I will only be a student full-time.” That answer

confused and perplexed my classmates. I don’t think they understood what I meant. Everything is relative in life; it all depends on your life experiences. While most of my law school classmates were in for a shock, I looked forward to just attending school and not having to work during the day while serving our country in the military. While the typical college undergraduate student was partying, attending football games, waking up at noon the next day and doing all the other things an 18- to 22-year-old does, my experiences were different. During those years, I worked during the day and some nights to fulfill my assigned military duties. My undergraduate courses were held at a military base school for military dependents, usually a junior high or high school. In Iowa, I felt as light as a feather as all I had to do was attend school. Day One came in late August that fall, and I got up, got dressed, and headed off to law school. My first class was the one that made all of us “shake in our boots,” as they say. It was the Civil Procedure class taught by Professor Alan Vestal. Professor Vestal looked like a law professor, and he spoke like one and had full command of the classroom. If I had been a Hollywood director and was looking for someone to play the role of a law professor in a movie, Professor Vestal would have been the perfect choice. Like in the old EF Hutton commercials, when he spoke, “everyone listened.” As I completed Day One at law school and headed home, we were saddled with a reading assignment of 50 pages per each of our five classes. That first night, and every night thereafter, we had a total of 250 pages to read and analyze. That storyline would repeat each night for the next three years, but freshman year was the worst and the toughest because we didn’t know what we were doing. As I opened that heavy civil procedure textbook and started reading the first assigned 20 pages, I paused and asked myself, “What did I just read?” I

6 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

had no idea, it was all a blur. So I started all over again from page one. I still had 200 pages to read for the other four classes. While struggling against “heavy eye disease,” (for some reason my eyes wanted to close), I finished my first night’s reading assignment. Then the terror of law school really began the next morning. I sat in the stadium classroom early the next morning, somewhere in the middle row to the left aisle. Professor Vestal came in with his readers on and said, “Good morning,” in his booming voice. Then it began. He told us he believed in the Socratic method of teaching, and he would call on one student per class to answer questions for most of the hour, while standing. Now I must admit, my heart skipped a beat when I heard that. It wasn’t as bad as my drill sergeant screaming at us, but it was a close second.

Everyone’s eyes were down until Professor Vestal called out the name of the student he would select. If your name wasn’t called out, what a relief it was. Then one cold morning in late fall, I sat down feeling relaxed and pretty good, when I heard Professor Vestal say what I did not want to hear: “Good morning, Mr. Sanchez.” Oh no, not me. Did I hear that right? Did he say Mr. Sanchez? Wait a minute, I was the only Sanchez at Iowa Law, so it was me. I stood up and said, “Good morning, Professor Vestal.” He then proceeded to grill me. “Mr. Sanchez, did you read the case last night?” Then I felt like I was back in boot camp and responding to my drill sergeant when I firmly said, “Yes sir, I did read the case.” In Part Three, I will share more on my experiences at Iowa Law.

University of Iowa, College of Law building , Courtesy of The University of Iowa, Office of Strategic Communication

WWW.FLORIDABANKERS.COM NOVEMBER 2021 — 7

FBA’s Trust and Wealth Management Division: Shaping New Legislation

8 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

T he oldest division of the Florida Bankers Association, the Trust & Wealth Management Division was created in 1934 and sees to the specialized needs of banks with trust departments and stand-alone trust companies. The Trust Executive Committee governs this division, overseeing Trust School, the annual Trust & Wealth Management Conference, and other educational seminars and programs sponsored by the division. The committee is made up of experienced trust and wealth management professionals who represent the Division and work alongside the FBA to advance legislation for the trust industry. Leading the Trust Executive Committee is Chair Kelly Caldwell, president and CEO of Caldwell Trust Company. He follows Immediate Past Chair Bill Moor of Capital City Trust Company and has served the first year of his two-year term. Caldwell believes that the TEC is the “eyes and ears for the trust industry” in the state of Florida. His goal

“We want to take away the stigma of being scared of crypto, and start to embrace it as something that can be managed… and to figure out strategies to do that safely,” Pratt said. Pratt works closely with the FBA trust legislative committee and its incoming Chair Carlos Batlle, managing director at JPMorgan Chase, to review proposals and advance legislation that will be beneficial to the industry. “My role is to help our trust bankers get the tools that they need to serve their clients, and our team does what we can to move government out of the way and allow bankers to serve their clients efficiently and creatively,” Pratt said. The FBA invites the input of its member banks to better understand the key challenges and issues they’re facing. At the recent Trust & Wealth Management Conference, the FBA invited Florida trust CEOs from around the state to attend its inaugural CEO Roundtable Discussion and Dinner. This was a

unique opportunity to sit down together and discuss the issues impacting the industry, with the ear of FBA President and CEO Alex Sanchez, who also gave an exclusive Washington briefing. “If there’s one meeting trust bankers need to attend in the state of Florida, this is the meeting. This is your chance to have the FBA totally focused on you and our industry,” Caldwell said. Caldwell and Sanchez went table to table, speaking personally with every attendee. “This was a great discussion about the importance of what

as Chair is to build relationships with trust bankers across the state, promoting collaboration when it comes to representing and advocating for the industry. “I’m hoping that we can grow our participation and involvement by the senior trust people in the state of Florida, because the FBA needs the support of decision-makers in order to be successful in what it does,” Caldwell said. “While we’re friendly competitors, I want to make sure we’re staunch allies in collaborating to protect our industry.” Caldwell wants the state of

“ CRYPTO IS NOT A FAD; IT’S HERE, AND IT’S MORE PREVALENT THAN YOU CAN IMAGINE... THEREFORE, WE'D BETTER KNOW WHAT THE RULES ARE. ”

- KELLY CALDWELL

trust bankers do to help Floridians manage their savings and their wealth. The trust, private banking, and wealth management division of the FBA plays a vital role in our industry,” said Sanchez. “I appreciate everyone who is active in the division, and particularly the leadership of our trust division chairman. Kelly Caldwell is someone who has given back to our industry, and he did a fantastic job leading our discussion at the recent dinner.” “Kelly has a vision for a united trust industry, and he has spent a lot of time, energy, and his own resources to encourage members to get involved,” Pratt said. “He’s helped drive innovative educational components, he’s helped drive legislation, and he’s been here in Tallahassee to walk the halls and thank our legislators.” Caldwell is also an advocate for educating the public about what it means to be a professional fiduciary, and believes the TEC can play a role. He has noted a shift in the industry as more people go online for investment

Florida to be a leader in the trust industry, helping shape new legislation for emerging technologies like cryptocurrency and electronic wills and notaries. “Crypto is not a fad; it’s here, and it’s more prevalent than you can imagine. We’re going to have to deal with it, and therefore, we’d better know what the rules are,” Caldwell said. “Hopefully we have rules that help us do our job, as opposed to ones that hurt us.” The rules are being written into existence today. Owing to the complex nature of trust banking, members of the trust division benefit from the attention of a dedicated lobbyist on the FBA Government Relations team. Cryptocurrency is uncharted territory. FBA Senior Vice President of Government Affairs Kenneth Pratt described the challenges regulators face in outlining appropriate measures for managing assets like cryptocurrency, calling it a “moving target” as the value fluctuates constantly. He expects there will be more guidance from regulators in the near future.

FBA's Trust and Wealth, Continued on page 10

WWW.FLORIDABANKERS.COM NOVEMBER 2021 — 9

Caldwell’s values as a business leader, and he brings this perspective to his position as Chair. This is an exciting season for the trust industry to “rally the troops” and make their voices heard when it comes to the new laws governing their jobs. “One of the major benefits of being a member in the FBA is the opportunity to network with other colleagues and learn about the trends within the industry,” Pratt said. “Our industry is strong legislatively when we’re together and we speak with one voice, and having a trust and wealth management division of the FBA has allowed us to do that.”

FBA's Trust and Wealth, Continued from page 9

advice, turning to social media “influencers” without the necessary credentials. “All of a sudden, everyone’s an expert. I don’t understand how you can give investment advice if you know nothing about your clients,” Caldwell said. “We’re in the relationship business. We’re in the business of understanding and helping our clients meet their goals. The types of investments change, but what doesn’t change is the need for relationships, the need to understand our clients, and the need to help them navigate through all the noise.” Building relationships and trust is central to

Members of the FBA Trust Executive Committee, from L to R: (Back row) FBA's Peter Brokaw, Lucas DeVicente, Richard DeNapoli, Bill Moor, Kelly Caldwell, Melissa Brown, Burns Dobbins; (Front row) FBA's Kenneth Pratt, Mark Parthemer, Sasha Klein, FBA's Pamela Ricco, and Joseph Weaver. See page 13 for a full list of TEC members.

10 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

KELLY CALDWELL, CHAIR

Kelly Caldwell is the President and CEO of Caldwell Trust Company. He began his professional career in 1988 after graduating with High Honors and a Bachelor of Electrical Engineering degree from the Georgia Institute of Technology. Caldwell started work at the family-owned registered investment advisory firm, which became Caldwell Trust Company in 1993. He succeeded his father as CEO in 2007. Today, the company has offices in Venice and Sarasota and manages more than $1 billion in assets. Caldwell's technology background has brought significant productivity improvements and profitable growth to the company. Under his leadership, total assets, total annual income, and stockholders’ equity have increased more than 85 percent. Caldwell is passionate about donating his time to the community, serving as a board member of the Argus Foundation, the Florida Bankers Association's Trust Executive Committee, the Sarasota Sheriff's Office Charitable Foundation, Inc., and The Suncoast Charities for Children. Lastly, he is an alumni from the Leadership Florida Class of XXVIII.

BILL MOOR, IMMEDIATE PAST CHAIR

Bill Moor began his career at Capital City Bank in 1987 as a methods analyst. As President of Capital City Investments, he implemented and managed the retail brokerage service provided by LPL Financial, located in Capital City Bank offices. In addition, Moor is the President of Capital City Trust Company and Capital City Strategic Wealth. Moor graduated from the University of Florida and earned his master’s degree in business administration from Florida State University. He is also a graduate of Leadership Tallahassee and Leadership Florida. He serves on the board for the Tallahassee Downtown Improvement Authority. Moor is chair of the Economic Club of Florida. He is past chair of the Governor’s Club and the Greater Tallahassee Chamber of Commerce. Moor also is past chair and serves on the executive committee for the Trust Division of the Florida Bankers Association. He serves on both the finance committee for St. John’s Episcopal Church and the board of St. John’s Episcopal Church Foundation. Moor is also a member of Capital Tiger Bay Club and the Tallahassee Exchange Club.

WWW.FLORIDABANKERS.COM NOVEMBER 2021 — 11

Trust & Wealth Management Division Legislative Accomplishments

Employee/Director/Officer Liability (Passed in 2021) Extends liability protection for officers/di rectors/employees of corporate trustee • Provides the same 6-month statute of limitations protection for individuals • Protects individuals from facing person al liability lawsuits Payments to Surviving Successors (Passed in 2020) New mechanisms for survivors to receive small accounts without formal administration • Simple affidavit for accounts under $1,000 and court petition for amounts under $10,000 • Deceased has no outstanding creditors or known will and affiant takes on the liability Electronic Legal Documents (Passed in 2019) Updates how notarized documents and wills may be created electronically • Removes two witness presence require ments for electronic wills to be created • Establishes electronic notaries who may virtually notarize most documents Omnibus Trust Updates (Passed in 2018) Additional updates to Florida’s Trust Code Clarifies Trust Code to provide settlor's intent as paramount to interests of beneficiaries • Provides flexibility and modernizes up dates to Florida’s decanting rules • Providing glitch fixes to the electronic trust accountings statute passed by FBA in 2015 Digital Assets (Passed in 2016) Allows Fiduciary Access to Digital Assets of Deceased Persons • Allows access to four types of fiducia ries: personal representatives of estates, guardians of minors/incapacitated per

sons, agents with power of attorney, and estate trustees • Allows full user control over digital assets by using online tools or separate wills and trusts to designate a separate person • Provides specific procedures and circum stances of how and what a custodian may access Estates (Passed in 2015) Provides necessary changes and clarifica tions to Florida’s probate code. • Clarifies guidelines to appropriately assess attorney fees in probate judicial disputes • Revises the default guidelines on will challenges in judicial proceedings Directed Trusts (Passed in 2014) Limits the liability of fiduciaries who act as co-trustees • Clarifies that fiduciaries may draft trusts which exonerate an excluded cotrustee • Removes the duty of the excluded trustee to make inquiry into co-trustee actions Family Trust Companies (Passed in 2013) Creates statutory and regulatory framework for FTCs • Authorizes families to establish FTCs which provide a specialized approach to wealth • Establishes licensing for these entities under the Florida Office of Financial Regulation rather than the Federal Ex change Commission Power of Attorney (Passed in 2013) Changes to improve the functionality of Florida’s statute • Clarifies and updates the act for attor ney fees, disabled principals, out of state acceptance and broker-dealers who may use POAs

12 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

Uniform Transfers to Minors (Passed in 2013) Extends custodianship for minors beyond 21 years of age • Permits that a testator may provide a custodianship last until the minor reach es age 25 • Allows the estate to continue to take advantage of the statutory protections for beneficiaries until age 25 • Kelly Caldwell Jr. , Caldwell Trust Company • William Moor Jr. , Capital City Trust Company • Carlos Batlle , J PMorgan Chase Bank, N.A. • Sheldon Bernau , S ynovus Trust Company • Melissa Brown , Truist Wealth Management • Joseph Covas Jr. , First Horizon Bank • Joan Crain , BNY Mellon Wealth Management • Richard DeNapoli , Coral Gables Trust Company

Other Legislative Issues FBA is currently monitoring: • Uniform Voidable Transactions Act • Uniform Principal and Income Act • Tenancies by the Entireties Trust • Multiple Trustees Compensation • Uniform Voidable Transactions • Kearney Fix • Transfers of IRAs in Divorce • Digital Assets (Part 2) • Lucas DeVicente , Sabal Trust Company • Burns Dobbins , Fifth Third Bank • Willem Erwich , The Northern Trust Company • Sasha Klein , Price Waterhouse Coopers • Mark Parthemer , TIAA Bank • S usan Walker , Bank of America • Joseph Weaver , Raymond James Trust N.A. • Paul Weigel , Bank of America Private Bank • Lory Weisensee , Charlotte State Bank & Trust

Trust Executive Committee Members

Advertise in Florida Banking magazine!

Contact Valerie Fischer // 913-261-7055 // Valerie@NFRcom.com

WWW.FLORIDABANKERS.COM NOVEMBER 2021 — 13

TRUST BANKING

A PREVIEW OF THE 2022 LEGISLATIVE SESSION: TRUST AND WEALTH MANAGEMENT DIVISION

BY KENNETH PRATT, FBA SENIOR VICE PRESIDENT OF GOVERNMENT AFFAIRS

E very legislative session, the FBA Trust and Wealth Management Division stays active by proposing, amending or defeating new legislative concepts to help trust bankers serve their clientele. In the last four years, FBA’s Trust Legislative Committee, led by Sasha Klein, has tackled several significant policy issues. In that time, we have seen Florida become a leader on issues such as electronic wills/notaries, directed trusts, trust attorney fees and trustee employee/director liability, to name just a few. The 2022 Legislative Session, which begins on January 11, 2022, will be no different. The FBA’s Trust and Wealth Management Division will continue working to update and structure Florida’s laws to make our state an attractive state to situs or manage trust business. Several items are already on the horizon for the FBA in 2022: Handling Virtual Currency While there is a great deal of recent financial buzz regarding virtual assets like Bitcoin and Coinbase, the volatility and elusiveness of this market remains a challenge. One of the major unanswered questions for trust bankers is how best for trust companies to go about safely guarding these assets. The first real challenge, though, is being aware of their actual existence. Several trust companies are now incorporating intake forms which require that testators list their virtual assets and that they provide the trust company with the key to these virtual wallets for safekeeping. The industry must also push for assistance in determining how these accounts might be handled by regulators. The Office of the Comptroller of the Currency and, more recently, Florida’s Office of Financial Regulation, have drafted regulatory guidance, giving trust bankers the green light and

some guardrails of what safe custody looks like. However, Florida’s legislature doesn’t seem quite ready to dive right into resolving some of the issues surrounding virtual currencies. The only expected 2022 legislative proposal is one that failed last year, which would have added and better clarified the definition of virtual currencies in Florida law and determined when those currencies may be regulated under Florida’s money services business statutes. While we are not expecting the legislative conversation to go beyond this proposal in 2022, this issue is one which will remain with us for years to come. Overruling the Kearney Case In 2019, a Florida court issued a ruling, Kearney v. Travelers , an unpublished opinion which allowed a creditor to reach a debtor’s IRA because the court found that the IRA had been pledged in a blanket security pledge and no longer enjoyed the creditor or tax protection of section 222.21, F.S. After the decision in Kearney , the Real Property Probate and Trust Law Section of the Florida Bar (RPPTL) reached out to FBA to discuss legislatively reversing the holding in the case. Originally, the proposal was very broad in its approach to solving the Kearney issue, including some who believed that an IRA should never be able to be pledged as an asset. However, after two years of studying the issue and last year’s failed attempt at passing a bill that all stakeholders could agree to, the RPPTL division has put forth a proposal which has been narrowed. The proposal would simply include language in Florida’s Uniform Commercial Code which requires that IRAs be specifically listed if a legal pledge of these assets is made to a creditor. As drafted, the new law would be remedial and thus able to be applied retroactively to pledges made prior to the law’s passage.

14 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

Clarifying IRA Transfers in Divorce Another case of RPPTL interest which dealt with a creditor’s ability to reach an IRA was a 2018 U.S. Bankruptcy 8th Circuit case titled, In re: Lerbakken . This case involved a divorced couple where an IRA was transferred from one spouse to another spouse, as part of the divorce settlement decree. The 8th circuit’s appellate panel found that the interest in the debtor’s ex-wife’s IRA to be transferred to the debtor pursuant to the couples’ stipulated property settlement was not exempt from the claims of the debtor’s creditors in bankruptcy. While the debtor argued that his interest in the IRA was exempt under the federal bankruptcy law exemptions, the court rejected that argument. Florida has no such current legal controversy regarding this area of law, however, the RPPTLs have proposed that Section 222.21(2)(c) of Florida Statutes clarify that when an IRA is transferred in a divorce, it specifically retains creditor exemption status after the transfer. This proposal has been filed but failed as legislation during the previous two legislative sessions although it has passed out of its assigned committees without much discussion. We expect this proposal will be filed again during the 2022 Legislative Session.

Your Impact The issues detailed above are only the ones that we are aware of at this time. There will undoubtedly be unexpected issues which will be raised to our attention as the beginning of Session quickly approaches. No matter the issue, FBA’s team is always working hard to represent the trust and wealth management industry in Tallahassee. But to maximize our advocacy efforts, we also need your individual help. Please join us for our annual Capitol Day + Capitol Night this year which will be held in Tallahassee on January 19. You will hear from state legislative leaders and have the chance to directly impact how policymakers see our industry. For more information and to get registered for this special FBA event, go to www.floridabankers.com. Please know that you can also have a major impact on our work by helping to provide our lobbying team with new ideas and suggestions for legislative proposals. If there are issues which inhibit your service to your clients, you are always welcome to reach out to me at kpratt@floridabankers.com. If there is a legislative solution which may be helpful to your trust company and our other FBA members, we would be happy to help. In the meantime, be on the lookout for Anthony DiMarco’s weekly session email updates on the issues above and other important banking issues followed by FBA.

Register Today!

Register online at www.floridabankers.com

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GOVERNMENT RELATIONS

SOME THOUGHTS ON THE UNBANKED

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

A recent refrain in progressive circles is that the financial system is leaving the unbanked or underbanked behind. Many progressive groups have used this to justify such plans as public banks, postal banks or FedAccounts to push their agenda. While there is work to do to reduce the number of the unbanked and underbanked, much progress has been made by the marketplace and should be noted. The FDIC released its biennial survey “How America Banks: Household Use of Banking and Financial Services,” which found that a record 95 percent of U.S. households have a bank or credit union account in 2019. The survey found that between 2017-19 more

somewhat interested. Interest in an account was higher among those who had been previously banked, and among African-American households over white households. • Use of non-bank credit, such as payday loans or title loans, declined from 8 percent of households in 2015 to nearly 5 percent in 2019. Historically, the number of unbanked households continues to decline from 8.2 percent in 2011 to 5.4 percent today. The FDIC has undertaken its survey again this summer and results are expected sometime next year. It will be interesting to see the effect of the pandemic on this statistic.

than 1.5 million households opened bank or credit union accounts (hereinafter simply bank accounts). Other key findings include: • Mobile banking continued to rise, more than doubling between 2017-19. • Nearly half of the unbanked households reported that they did not have enough money to meet minimum deposit requirements. • Roughly one-third of

Although the number of unbanked households continues to decline, banks need to continue our efforts. One example of this effort is Bank On. This is a program developed by the Cities for Financial Empowerment Fund (CFE) for certified deposit accounts which include features such as low costs, online bill pay, no overdraft fees, and debit or prepaid cards. Many banks have joined this program, you may wish to check it out too.

“ ALTHOUGH THE NUMBER

OF UNBANKED HOUSEHOLDS CONTINUES TO DECLINE, BANKS NEED TO CONTINUE OUR EFFORTS. ”

unbanked households stated that they did not have a bank account because they did not trust banks. • While the number of unbanked households declined, the number of African-American households still without a bank account was 14 percent and 12 percent for Hispanic households. • Among the unbanked more than half were not interested in getting a bank account while approximately one quarter were very or

Another solution to the unbanked is to help minority-owned banks. Recently, the FDIC announced a priority of Chairman Jelena McWilliams, the “Minority Depository Institutions Program.” According to the FDIC, the goal of the Program is to stand up “the Mission-Driven Bank Fund to help channel private investment in mission-driven banks – FDIC-insured MDIs and Community Development Financial Institutions (CDFIs) – to build size, scale, and capacity in these banks. These institutions already play

16 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

compete with FDIC banks. Other states such as California have passed laws for a public bank, but so far none have been chartered. Finally, there is the FedAccounts proposal to allow the Federal Reserve to offer transaction accounts directly to U.S. citizens and businesses. They argue that

a significant role in the minority, low- and moderate income, and rural communities they serve. Investments by the fund will enable them to have a greater impact in their communities by providing affordable financial products and services, stimulating economic and community development, and building opportunity and prosperity.” Many banks have donated to this Fund to help it succeed. These programs are examples of the type that should reduce the number of the unbanked. On the other hand, there are ideas by progressives that probably will not help the problem and will only lead to an increase in the size of government. Some believe that the U.S. Postal Service beginning a bank will help both the unbanked and the Post Office. It is highly unlikely that having the USPS open and service accounts will succeed. Another idea is a public bank. Advocates believe that it will help the unbanked since it will be consumer oriented and not profit-oriented. Only one state has a public bank, North Dakota, and it is a vestige of the WWI era. The Bank of North Dakota does not

this will be more consumer-oriented and could speed up the delivery of government benefits. This proposal will use the banking system as a mere conduit for service. All of these proposals fail to understand that market-oriented systems will, on the whole, outperform government entities or that bottom-up emergent order markets will outperform top down markets. As much as many would want, there is no magic wand to change basic economics.

“ BANKS MAKE DREAMS COME TRUE, AND WE

WILL CONTINUE TO CREATE MORE DREAMS FOR MORE PEOPLE. ”

With this in mind, the bottom-up market (with or without partnership with the public sector) needs to continue to reduce the number of the unbanked. Our industry will continue to make significant strides on reducing this number. Banks make dreams come true, and we will continue to create more dreams for more people.

At FNBB, we understand your needs and celebrate your achievements. We’re always available to discuss day-to-day challenges, plans for the future, or anything in between. Our industry is forever evolving, but together we can tackle new challenges and take advantage of new opportunities.

Supporting Community Banks

It is our privilege to serve you. Thank you for allowing us to be your trusted partner.

800.275.4222

SERVICE BEYOND COMPARISON

bankers-bank.com

WWW.FLORIDABANKERS.COM NOVEMBER 2021 — 17

BANCSERV ENDORSED PARTNER: KEYSTATE CAPTIVE MANAGEMENT

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RENEWED INTEREST IN BANK CAPTIVES IN 2021

BY BRIAN AMEND AND DAVID GUERINO

R ecent adverse trends in the commercial insurance markets are driving community banks to consider alternative risk financing solutions. A growing number of mid-size banks are forming captives and realizing meaningful benefits. Ransomware attacks typically begin with a targeted email message containing malicious software. Once introduced, the malware spreads throughout the network, encrypting documents or files and rendering them inaccessible until a ransom is paid by the victim. What is a captive insurance company?

• Commercial insurance carriers have pushed banks to assume higher deductibles while narrowing coverages. • Commercial carriers have almost universally denied claims for Covid-19 business interruption and extra expense coverage. KeyState managed captives covered over $4 million in Covid-19 related claims. • Captives can provide coverages that are not available commercially or are cost-prohibitive in the commercial marketplace.

• Representation and warranty insurance for merger and acquisition transactions. • Legal expense coverage for class action nuisance lawsuits. • Unknown liabilities related to PPP loan processing and administration. • Broad cyber coverage to supplement commercial policies with significant exclusions. Banks can structure a captive to address and respond to these risks, capture the underwriting profits (rather than just paying premiums to a commercial insurer), and control/ reduce a bank’s overall cost of insurance. It’s not uncommon for

“ IT’S NOT UNCOMMON FOR A BANK TO REDUCE ITS AVERAGE, ANNUAL “TOTAL COST OF INSURANCE” BY 20 TO 30 PERCENT BY FORMING A CAPTIVE. ”

A captive is a wholly-owned subsidiary of the bank’s holding company that operates as a legally licensed captive insurance company. The bank pays annual premiums to its captive for coverages not included in its commercial insurance program. The captive covers commercial deductibles, commercial policy exclusions, and emerging risks not covered under a bank’s commercial policies. With enhanced risk management and a meaningful federal incentive for middle-market companies, banks in KeyState’s Bank

Captive Program typically experience an average increase to annual earnings of 1 to 2 percent per year. Why should a bank evaluate a captive now? • Commercial insurance premiums have increased significantly. • Cyber risk: 25 to 50 percent increase. • Bankers Professional Liability: 10 to 30 percent increase. • FI / Crime Bond: over 10 percent increase.

a bank to reduce its average, annual “total cost of insurance” by 20 to 30 percent by forming a captive. Over 70 percent of Fortune 500 companies have utilized captives for many years. And now, due to current commercial market conditions, a significant number of middle market companies and community banks are forming captive insurance structures. What banks can form a captive? Generally, a bank must have a holding company to form a captive. Both “C” and “S” corporations

18 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

©istock.com/Photo-Dave

can own a captive, and banks with $750 million to $15 billion in assets are generally well suited for KeyState’s Bank Captive Program. KeyState launched its program in 2012, and since that time, over 85 banks across the country have formed a captive and joined the Bank Captive Program. Based on the number of banks currently evaluating the program and/or already in the formation stage with their bank captive, KeyState expects the Bank Captive Program to grow by 15 to 20 percent over the next year. KeyState partners with Crowe, LLP in the evaluation of the captive. Currently we have a number of your

Florida peer banks in the feasibility stage of evaluating a captive with all indications moving to implementation stage. Twenty-six state banking associations, including the Florida Bankers Association, currently endorse KeyState’s Bank Captive Program. For more information on the Bank Captive Program, please contact Brian Amend, SVP & Managing Director – Eastern Region (302.425.5158 | bamend@key-state.com) or David Guerino, SVP & Managing Director of Captive Management at (802) 233-2624 | Dguerino@key-state.com.

With ARC, you can generate substantial fee income, reduce loan prepayment speeds, and expand customer relationships.

For more information, email us at:

WWW.FLORIDABANKERS.COM NOVEMBER 2021 — 19

Z

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

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 support of the FBEF.

ICI Consulting, Inc. Keith Hagen Intercredit Bank, N.A. Simon Cruz Intracoastal Bank Bruce E. Page Madison County Community Bank Edward Meggs Mainstreet Community Bank of Florida W. Ben Flowers Thomas D. Ingram Marine Bank & Trust Company William J. Penney MidWestOne Bank Michael Durkin One Florida Bank Frederick G. Pullum Popular Bank Israel Velasco Prime Meridian Bank Sammie D. Dixon, Jr. Professional Bank Abel Iglesias Raymond James Bank, N.A. Steven M. Raney Renasant Bank Adam J. Lombardo Seacoast Bank Susan Blackburn ServisFirst Bank Rex McKinney FBEF Donors, Continued on page 21

Amerant Bank, N.A. Jerry Plush Ameris Bank Palmer Proctor, Jr. Apollo Bank Eddy Arriola Banesco Mario Oliva Bank Leumi Jeff Watts BankFlorida

Crews Banking Corporation James W. Crews, Jr. FirstBank Florida Calixto Garcia-Velez First Bank, Clewiston Miller Couse

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 First National Bank of Coffee County R. Moyle Fritz First State Bank of the Florida Keys Karen M. Sharp Flagship Bank Robert B. McGivney Florida Business Bank William R. Norris Florida Capital Bank Mark Johnson Grove Bank & Trust Sheldon Anderson Heartland National Bank James C. Clinard

James S. Stalnaker, Jr.

Beach Bank

Charles Reeves BMO Harris Bank, N.A. Chad Campbell Caldwell Trust Company Kelly Caldwell, Jr. Capital City Trust Company William L. Moor, Jr. Citizens Bank & Trust Greg Littleton City National Bank of Florida Jorge Gonzalez College Ave Student Loans Bill Ayers Commerce National Bank & Trust Ray Colado Community Bank Fred Leopold Community Bank of the South William T. Taylor

funding please go to the Education section of www.floridabankers.com. 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

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

20 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

SmartBank

TCM Bank

Trustmark National Bank John D. Sumrall 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

Damon J. Moorer

B illy Carroll, Jr . SouthState Bank John Corbett SunSouth Bank Monty Weigel Sunstate Bank Lloyd DeVaux

TD Bank

Nick Micell TIB The Independent Bankers Bank, NA Eric Allen Don Briscoe Trivergent Trust Robert F. Thomson II

Fabricio Macastropa

THE FBEF WANTS TO WELCOME YOU TO TALLAHASSEE!

With the new year, there will be a new way to show your support for the FBEF at the FBEF Welcome Reception fundraiser on Tuesday, January 18, 2022. Join us in Tallahassee the night before FBA’s Capitol Day, 5:30 – 7:00 p.m., for the FBEF Welcome Reception at OverUnder Midtown Bar & Lounge. You must register for this event separately from Capitol Day and Capitol Night. Registration for this fundraiser is $75.00 per person. The FBEF Welcome Reception can be found on the calendar of upcoming events on www.floridabankers.com. All proceeds from this event benefit the programs of the FBEF, which provide funds to bankers seeking to advance their careers through education. For more information contact FBEF Director Letty Newton at 850-701-3522 or lnewton@floridabankers.com. 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

©istock.com/Julia Fateyeva

WWW.FLORIDABANKERS.COM NOVEMBER 2021 — 21

PERSONAL TRANSACTIONS

PROMOTIONS/NEW HIRES FORT MYERS

MIAMI

Amerant Bancorp Inc., announced that Kristy Amaro has been named Chief Diversity and Inclusion Officer. Amaro will lead the organization’s efforts to further a culture that recognizes and creates opportunities for diverse

Sanibel Captiva Community Bank announced that Tilia Howard has joined its downtown Fort Myers branch as a loan processing coordinator. She is responsible for processing loan files and ordering services and verifications needed

Amaro

representation throughout the enterprise. Most recently, Amaro served as People and Organizational Development Manager, working to develop, promote and deliver learning solutions that develop staff potential and support the organization’s business strategy. She was also the Change Management lead for Amerant’s Digital Transformation strategy, successfully leading a diverse team to drive digital adoption. Prior to joining Amerant, Amaro managed the learning and development function in the luxury hotel industry. Early in her career, she also served as a public school educator in under-resourced communities. P ORT CHARLOTTE Gina Letterio has joined the Trust and Investment Services division of Charlotte State Bank & Trust. Previously a personal banker, she is now a personal trust operations specialist charged with facilitating trust department operations and assisting clients with inquiries, requests, and support. Angie Parsons has joined Letterio

Howard

for underwriting review. Prior to joining the bank, Howard worked for several credit unions in the customer service and consumer lending departments. She has an associate degree in psychology studies from Kellogg Community College in Battle Creek, Mich. Jasmine Jones has joined Sanibel

Captiva Community Bank as a teller at its Winkler office. She is responsible for assisting customers with personal and business banking transactions. Jones has over five years of experience working in

Jones

the customer service and retail industries, as well as in early childhood education. She has an associate degree in paralegal studies from Florida SouthWestern State College.

Caleb Stempel has joined Sanibel Captiva Community Bank as an information technology assistant at its Operations Center. His primary responsibility is to assist in the implementation, operation and maintenance of the bank’s

Stempel

Charlotte State Bank & Trust as a portfolio manager. Parsons graduated summa cum laude from the University of South Florida with a Bachelor of Science in Finance, and she has more than 13 years of Holly Selders has been named a vice president of Charlotte State Bank & Trust. Already a seasoned lender in Michigan and Virginia when she joined the bank in 2014, Selders quickly moved to the top tier of Charlotte County lenders. Charlotte State Bank & Trust has chosen Todd R. Rinehart to succeed the retired Maryann Mize , CCIM, as senior vice president and senior lender. Rinehart has more than 40 years of experience in all aspects of the banking industry.

computer and communication systems. He will also provide technology related support for all bank employees. Prior to joining the bank, Stempel worked for the School District of Lee County as a network support specialist. He has over 15 years of information technology experience working in various fields, including the medical, health and fitness industries. Stempel has a Bachelor of Science degree in information systems and cybersecurity from Columbia Southern University.

Parsons

wealth management experience.

Marianna Marks has joined Sanibel Captiva Community Bank as a loan processing coordinator at its Bridge branch. She is responsible for processing loan files and ordering services and verifications needed for

Selders

Marks

underwriting review. Prior to joining the bank, Marks worked in the retail industry for six years. She also has a background in event promotion.

Rinehart

22 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING