Florida Banking November 2023

THE MAGAZINE OF THE FLORIDA BANKERS ASSOCIATION WWW.FLORIDABANKERS.COM SEPTEMBER 2020 First State Bank of the Florida Keys: ‘Giving Back is Key’ TTHE MAGAZIINE OF THE FLORIIDA BANKEERRSSAASSSOOCCIAIATTIOIONN WWW.FLORIDABANKERS.COM SEPTEMBER 2020 WWW.FLORIDABANKERS.COM NOVEMBER 2023

Editorial & Executive Offices 1001 Thomasville Road, Suite 201 Tallahassee, FL 32303 850-224-2265 www.floridabankers.com Advertising & Production Offices 250 Prairie Center Dr., Ste. 300 Eden Prairie, MN 55344 952-835-2275 www.nfrcom.com For advertising information, contact Erica Nelson Advertising Sales Executive 763-497-1778 Erica@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 A

THE MAGAZINE OF THE FLORIDA BANKERS ASSOCIATION

VOLUME 38

NUMBER 10

NOVEMBER 2023

ON THE COVER 8 - - - - - - - - - - First State Bank

of the Florida Keys: 'Giving Back is Key'

CONTENTS 4 - - - - - - - - -Chair’s Message 6 - - - - - - Straight Talk from the President’s Desk 12 - - - - Government Relations: Stop the Florida Credit Unions’ Million Dollar Tax Subsidies 14 - - Bancserv Endorsed Partner: Has BOLI Lost Its Luster? 16 - - - - - - - Trust and Wealth Management: Glenmede: A Perfectly Positioned Boutique Wealth and Investment Management Firm 18 - - - - FBA Leadership Events Honoring FDIC Chair Martin Gruenberg and Vice Chair Travis Hill 23 - - -FBA’s 2023 Trust & Wealth Management Conference 26 - - - - - - - - Florida Bankers Educational Foundation Donors 28 - - - - - Personal Transactions 29 - - - - - - - - - - - - - Kudos 31 - - - - - - - Upcoming Events 31 - - - - - Advertising Directory 31 - - - - - - - - Did You Know?

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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Jose Cueto Chair

Derek Jones Chair-Elect

Bill Penney Immediate Past Chair

Fab Brumley Second Immediate Past Chair

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On the Cover: The First State Bank of the Florida Keys President Gary Carney.

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

Photos by Nick Doll Photography

CHAIR’S MESSAGE

FLORIDA’S PROPERTY INSURANCE CRISIS: THE FBA IS ASKING FOR YOUR HELP

BY JOSE CUETO, FBA CHAIR

F or many years, the issue of unavailability in Florida’s property insurance market was largely one that was limited to Florida’s coastal areas. However, more recently, the issue has expanded into a full-blown insurance crisis for not only Florida’s coast but for our state and the country as a whole. As FBA Chair, I have spoken to many of you who are concerned about the double digits raises in premiums for lesser coverage. Bankers tell me that their clients are now asking for the bank to issue forced place insurance because it’s the only somewhat affordable option. I’ve heard stories of homeowners who have gone bare in hopes of saving enough in their own coffers to try and cover the next catastrophic event. As bankers, our property insurance needs are simple. We desire property insurance to be affordable and available. At the current moment, Florida’s market is neither. Florida has been hit routinely by catastrophic storms, discouraged reinsurance investments in our market, and seen domestic insurers go bankrupt or major carriers pull out of our state. And on top of everything, statistics clearly show that Florida has, by far, the most challenging legal environment within which to settle insurance claims. The Florida Legislature took some important steps last session to pass major reforms that are expected to signal to the insurance and reinsurance markets that Florida has the political will to make the changes necessary to begin addressing the problem. During 2022, legislators had two special sessions to address the property insurance crisis. In May 2022, the legislature passed SB 2A and 2D which focused on funding hurricane home hardening grants, reforming contractor solicitations, allowing insurers to offer separate roof deductibles and requirements to mandate that insurers move faster in their processing of hurricane claims. The legislature also convened another Special Session in December 2022 to put in place additional and historical reform. During that special session, legislators passed SB 2A repealing the one-way attorney fee provisions

for property insurance claims, leaving both parties responsible for paying their attorney fees; prohibited the assignment (in whole or in part) of any post-loss insurance benefits for policies issued after January 1, 2023; established the Florida Optional Reinsurance Assistance Program which allows Florida insurers to purchase reinsurance at near/reasonable market rates; limited policyholders from entering Citizen’s Insurance Company, including a requirement to remove policies where renewals or take out offers are within 20 percent of the Citizen’s premium and established additional regulatory provisions to make certain that insurers resolve claims and pay those claims faster. In addition to FBA supporting these historic reforms, it gives me great pleasure to report that the FBA hears your concerns and is seeking to create a forum to formally discuss them. Last month, under the direction of our CEO and with the support of FBA member Diane P. McNeal of Canadian Imperial Bank of Commerce Private Wealth, the FBA initiated an FBA Property Insurance and Condominium Task Force. While we are not directly in the business arena of insurance, the FBA hopes to better understand the challenges we face with the current market. The task force will be surveying Florida’s banks to come up with those using the best practices and creative solutions to offer our clients. We plan to liaise with regulatory agencies and policy makers to offer up constructive criticism of where there is a lack of guidance regarding insurance compliance issues. And while we do not expect to discover a silver bullet solution, what we do hope to achieve is to communicate our concerns to those who can impact this crisis and provide them with our unique perspective as major providers of the capital that moves our economy. As your chair, I’m asking for your help. When you receive the survey from the FBA’s task force, please respond in a timely manner. We need to hear how each bank in each part of the state is addressing the problem. I thank you in advance for your time in helping us address this crisis.

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STRAIGHT TALK FROM THE PRESIDENT’S DESK

PROUD OF THE FBA CULTURE I AM LEAVING BEHIND

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

A s my tenure as the FBA’s third CEO in our 136 year history comes to an end, I am proud of our many accomplishments, and of the people behind those accomplishments over these last 30 years. Years ago, I made a promise in memory of our second great leader, John Milstead, to leave a stronger and better FBA upon the end of my tenure. Since our founding in 1888, the FBA has created and benefited from a positive culture that continues today. What is the FBA culture? It is the 17 people at the FBA who are dedicated to serving you and the

bankers during those dark days: “We need the FBA now more than ever.” I had prepared the FBA team for the worst in those difficult years of 2008-11, and their response was to continue putting their noses to the grindstone and to work harder and smarter for the banking industry so that you could better serve your customers and communities. When COVID hit, and most banks were unfamiliar with joining the portal of the Small Business Administration to upload the PPP loans, the FBA team

banking industry. During the last 30 years, I have seen that culture at work for our industry every day. I am so proud to have had the honor of leading the men and women who make up our association who are so devoted in serving our bankers. Part of the FBA culture is that these 17 individuals are like family. We care for each other in good or bad times with a bond of trust. We travel together, eat together, and have spent many years together supporting one another

worked around the clock to help our industry assist their customers with these critical loans and help our state recover from the negative impacts of COVID. The FBA team is a family. And while this member of the family will soon be leaving them behind, they will continue in their dedication in serving our industry by helping the FBA’s fourth CEO, Kathy Kraninger, in her efforts. The FBA family is all about trust, unity, and knowing and believing in each other that no matter the obstacles

“NO MATTER THE OBSTACLES OUR INDUSTRY FACES, THE FBA TEAM WILL BE UNITED AND WORK TOWARD FINDING SOLUTIONS TO HELP OUR BANKERS DO WHAT THEY DO BEST.”

through the challenges of life. That unity translates into the strength of the FBA team, the best one in the association profession. That unity has led us to conquer hills and mountains together for the FBA and for our industry. For instance, during the Great Recession when 75 percent of Florida’s banks were not making a profit and laying off employees, the banks still paid the FBA dues. It was remarkable! This was the response we got from

our industry faces, the FBA team will be united and work toward finding solutions to help our bankers do what they do best, which is providing the capital to make the economy go. This FBA culture must and will continue. It has existed for 136 years, starting under the leadership of our first CEO, Floyd Call, and continued by our second CEO, John Milstead; I have had the honor of maintaining and enhancing this culture as FBA’s third CEO.

6 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

Matthew Bennett

Anthony DiMarco

Payton Fewell

Brooke Harrison

Brian Hickey

Lesley Jordan

Marilyn Matherne

Barbi Miller

Letty Newton

Dianne Pagel

Kenneth Pratt

Pamela Ricco

Gina Rotunno

Sheri Sanderson

Cheryl Tucker

Olga Williams

WWW.FLORIDABANKERS.COM NOVEMBER 2023 — 7

The First State Bank of the Florida Keys Executive Management team, from left: Robert E. Murrell, Chief Credit Officer; Gary L. Carney, President; Jennifer O. Waddell, Chief Experience Officer; and David W. Kolhagen, Chief Financial Officer

8 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

‘Giving Back is Key’ First State Bank of the Florida Keys:

F irst State Bank of the Florida Keys is a pillar of the community. The bank was founded in Key West in 1955 as the island’s first community bank and has served the unique needs of the Keys ever since. One cannot go far without encountering the bank’s name and signage as evidence of its service and patronage to the local “Conchs” (as the born-and-raised locals are called). Today, the bank has $1.25 billion in assets and eight locations across the Keys, as well as an operations center in Miramar. “When you look out into the community, the bank is one of the most prominent contributors in Monroe County,” said President Gary Carney. Carney took the helm as president on January 1, 2023, succeeding Karen Sharp, who has assumed the

for more than 20 years. Of the bank’s 170-plus employees, more than 20 are in the 20+ Club, and nearly 70 have served for more than 10 years. The club is just one of many of Carney’s initiatives to bring back morale-boosting traditions that were put on hold during the pandemic. “We’ve been working with HR to bring back incentives and find assistance for our employees. One of my primary goals is to be the best employer in the Keys,” Carney said. The bank is excited to have reinstituted breakfast for employees at all locations on Friday mornings, the annual company picnic (expanded to include two locations) and the annual employee appreciation party. Other recognition programs include the Delivering Exceptional Experiences Recognition

title of director emeritus. Carney joined First State Bank in 2006 as senior vice president, senior loan administration officer. He was promoted to executive vice president in 2007, chief credit officer in 2011, and chief operating officer in 2021. Carney is from Ohio. After graduating from Kent State University, he went to work for Charter One Bank starting as a credit analyst and completing his tenure as head of commercial credit. During his 18-year career, he was involved in mergers and acquisitions

(DEER award), wellness awards, and referral awards. Housing is a unique challenge for the bank and its employees, considering the high cost of living in the Keys. Bank management continues to look for solutions like purchasing property that it can offer employees as affordable rentals. Carney and his team are proud of the positive culture and the dedication and loyalty of bank staff. This is felt by the bank’s customers, too, as many enjoy visiting the branch just to do business with their favorite teller.

“WHEN YOU LOOK OUT INTO THE COMMUNITY, THE BANK IS ONE OF THE MOST PROMINENT CONTRIBUTORS IN MONROE COUNTY.”

- GARY CARNEY

and set up credit departments in five other states. First State Bank was grateful for Carney’s lending background. He wrote the first portfolio analysis for the bank and implemented portfolio management. Carney did not originally see himself becoming a permanent resident of the Keys; when he joined the bank in 2006, it was with the expectation that he would stay for a few years before settling in a larger city like Miami or Fort Lauderdale. Shortly after Carney started, however, the bank weathered the Great Recession, and the longer he stayed the more invested he became. Nearly 18 years later, he understands why the company jokes about its employees never leaving. The bank has brought back its “20+ Club” to recognize and celebrate those who have served

“I’m grateful to have been able to get the right people in the right positions. Not everyone would fit into our culture,” Carney said. First State Bank is known for its longevity and service within the community. The bank’s involvement goes beyond monetary sponsorship; employees donate their time, as well. Bank management encourages consistent volunteerism by offering comp time for community service. At local events like the Seafood Festival, for example, bank employees can be found greeting festival goers and selling tickets. The bank’s mantra, worn proudly on staff volunteer shirts, cleverly reads “Giving Back is Keys.” “We encourage people to go out and get involved. We’re everywhere. Our employees are at events almost First State Bank, Continued on page 10

WWW.FLORIDABANKERS.COM NOVEMBER 2023 — 9

The bank commissioned the late George Carey to build a metal sculpture of the bank’s mascot “Moolah the Manatee” for the city of Key West’s Art in Public Places program.

“I’m making sure I have the proper people under me, so that I’ll find my successor within the company and have the time to train that person before I move on,” Carney said. Board succession, however, is somewhat more immediate. “Most of our board members have served for over 20 years. We’re working on bringing in the next generation.” Of course, Carney is only just getting started. “Our board, our shareholders, and our employees are taking to my ideas, and I’m grateful to them for giving me the tools and the latitude to do what I need to do,” Carney said. With a long history at the bank and nearly a year as president under his belt, Carney is excited about First State Bank’s future and to continue its tradition of service to the community he now calls home.

First State Bank, Continued from page 9

every weekend wearing our t-shirts and representing the bank,” Carney said. “Most of our board members are heavily involved in the community, and they love that the bank is out there.” Looking forward, Carney’s goals include technological advancement and succession planning. “One of my goals is to bring us forward digitally. Our head of IT is just a bundle of energy. We have a lot of ideas,” Carney said. “In order to stay relevant, we must digitalize and automate products and processes. We have recently moved to the cloud, which was a big step forward for the bank.” As for succession planning, Carney and his team want to start early to ensure the future success of the bank, investing in rising stars who will carry on the bank’s culture and legacy.

10 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

MEET PRESIDENT

GARY L. CARNEY

In addition to its civic philanthropy and volunteerism, First State Bank connects to its community through art, specifically art that showcases local sea life and the beautiful waters of the Florida Keys. The largest representation of this CONNECTING THROUGH ART

Gary Carney joined First State Bank of the Florida Keys in 2006 as senior vice president / senior loan administration officer and was promoted to executive vice president in 2007, chief credit officer in 2011, and chief operating officer in 2021, before assuming his role as president in January 2023. His professional background includes almost 40 years of banking and credit administration experience. Prior to joining First State Bank, Carney led the Commercial Credit department at Charter One Bank overseeing a five-state market. Carney earned his Bachelor of Business Administration degree from Kent State University, is a 2002 graduate of Stonier / America’s Community Bankers Graduate School of Banking, and a 2023 graduate of the Executive Development Institute’s Graduate School of Banking in Colorado. He has served Easterseals Florida Keys as a past chairman of the Board of Directors and as a member of the Regional Advisory Board Audit Committee.

connection is the statue “The Manatee,” which faces the waterfront at one of the bank’s Key West branches. The statue was the first commissioned piece in the City of Key West’s Art in Public Places program. It was created by the late, local artist George Carey, who, along with his high school students in the 1980s and ’90s, made several metal sculptures at schools throughout the city. Carey had retired to Ohio when the bank called on him to create a realistic manatee to be the inaugural piece in the city’s art program, but also to represent the bank’s mascot, “Moolah the Manatee.” Carey accepted the commission, and the enormous manatee was created in the snowy north and transported to Key West where he has become a favorite photo spot, especially during the holidays when he is dressed for the occasion. First State Bank has also worked for many years with local artist, Rick Worth, and local photographer, Rob O’Neal. Worth, known for his art-o-mobiles (painted cars) and roof tile paintings, painted colorful underwater scenes featuring tropical fish, sea turtles, coral, and of course, a manatee for the bank’s personal debit card, new ATMs, several bank vehicles, and even a mural at the bank’s Stock Island branch. The bank also features Worth’s art on many of its promotional items for customers. Photographer O’Neal, known for his vivid Keys imagery and stunning aerial photos, captured the aerial photo of the Keys’ famous 7-Mile Bridge, seen on the bank’s Online Banking background, brochures, and business debit card.

NOVEMBER 2023 — 11

GOVERNMENT RELATIONS

STOP THE FLORIDA CREDIT UNIONS’ MILLION DOLLAR TAX SUBSIDIES BY ANTHONY DIMARCO, FBA EXECUTIVE VICE PRESIDENT AND DIRECTOR OF GOVERNMENT AFFAIRS

F lorida TaxWatch recently issued a detailed report on the million-dollar tax subsidy that credit unions enjoy in Florida. In summary, TaxWatch found that the Florida credit unions’ tax subsidy is as follows: • State taxes not paid annually - $101.8 million • Federal taxes not paid annually - $147.8 million • Local sales tax not paid annually - $9.4 million • The total of the annual tax subsidy is $259 million. You are reading that correctly – the

that purchase community banks inherit a diversified financial portfolio and customers. Most of these customers will not leave the resulting credit union once the purchase is complete. Moreover, the growth of non-tax-paying credit unions (either through organic growth or acquisition) complicates a government’s ability to improve tax conditions in other areas of need. For example, more credit union growth reduces tax receipts. This reduction may reduce a government’s ability to reduce

credit unions’ tax subsidy is more than $250 million a year. Wow!

or exempt taxes such has been done with seniors and first responders. I do not think this is what they had in mind when the credit union charter was granted a not-for-profit tax-exempt status. This begs the question, why are credit unions granted a not-for-profit tax-exempt charter? When they were first formed in the early 20th century, they were only allowed to work with a select employee group, such as teachers, plumbers, and the like.

“THE TAXWATCH STUDY FOUND THAT A FAMILY OF FOUR WILL PAY MORE IN TAXES THAN THESE MULTIMILLION-DOLLAR CREDIT UNIONS.”

None of these dollars are being used in your local communities to pay for roads, libraries, schools, or other local needs. None of these dollars are being used by the federal government for the defense of our nation or to reduce the national debt. Instead, these dollars are used for unfair competition in the financial marketplace. Furthermore, the

TaxWatch study found that a family of four will pay more in taxes than these multimillion-dollar credit unions. A family of four is estimated to pay more than $5,400 in taxes while these credit unions pay $0. It begs the question, why should a family of four pay more in taxes than a multimillion-dollar business? To further compound this inequity, the credit unions are using these tax subsidies to purchase community banks and removing them from the tax rolls. This will only exacerbate the unfairness. The credit unions

Over time, this was eroded away as credit unions sought more and more profits to pay management. Now, instead of being limited to a certain employee class and their immediate families, anyone may join a credit union if they live, work, or worship in a county with a branch in it or a customer gives a de minimis amount to a charity. The restrictions are therefore nonexistent. Now a mega credit union may have branches in most counties in Florida. One credit union, for example, has

12 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

branches in 45 counties in Florida and 26 counties in Georgia, where anyone can walk up and open an account if they live or work in that county. Credit unions are also crossing state lines; some credit unions in Jacksonville have branches in Georgia. Two Michigan credit unions purchased community banks on Florida’s west coast. That is a long way from the credit union’s headquarters and its original charter to help the low and middle class members who live in a compact geographical area. The time has come to tax multimillion-dollar credit unions that are not limited to a single employee group and their immediate families. Why not start with the

credit unions with assets of at least $500 million that do not have a single employee group? There is no reason they could not pay these taxes. If you are going to act like a bank, then you should have to be regulated and taxed like a bank. The time has also come to stop the charade of competition in granting credit unions public deposits. The study plainly shows that these credit unions have an unfair competitive edge compared to community banks of similar size. The federal and state governments should stop catering to this charade by taxing these mega banks disguised as not-for-profit credit unions.

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BANCSERV ENDORSED PARTNER: NFP EXECUTIVE BENEFITS

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HAS BOLI LOST ITS LUSTER?

BY GLENN BLACKWOOD AND JOE SCHAEFER

W ith the rapid rise in interest rates in 2022 23, there is some line of thinking that Bank Owned Life Insurance (BOLI) has lost the attractive edge it has enjoyed over the years. It might be worthwhile to step back and look historically at BOLI and how it has performed since 2001, as interest rate cycles have ebbed and flowed. Over the last five years, the banking industry has experienced opposite ends of the spectrum, from excess liquidity in a low interest rate environment to constricted liquidity in a rapidly increasing rate environment. In both scenarios, because banks are in the business of effective use of their inventory (cash), banks were, and continue to be, on the hunt for yield. The intent of this article is to provide a history of how the Bank-Owned Life Insurance or BOLI asset has performed for the last 20-plus years, its structure and purpose on a bank’s balance sheet, and how it has served as a popular alternative asset to balance volatility for the long term. Let’s begin with the basics Unlike retail life insurance with annual premium payments, BOLI is a single-premium institutional cash value life insurance policy. When a bank purchases a BOLI contract, it maximizes its earnings potential from the full principal which earns compound interest from day one. Combined with book-value accounting treatment, the asset’s cash value will continue to grow steadily based on the earnings credited by the insurance carrier without experiencing the volatility of marked to-market adjustments. Because BOLI is a life insurance asset, it carries a death benefit in addition to its cash value, which adds to the asset’s positive balance sheet impact. The bank is the owner of the cash surrender value (bank asset) while also being the beneficiary of the life insurance proceeds. This is important because the death benefit protects the bank against financial costs when the death of a key person occurs. BOLI allows the bank to

efficiently obtain key-person protection by way of an earning asset, rather than through a term life insurance policy’s annual premium expense. The difference to retail life insurance does not stop at its premium frequency. Unlike a retail life insurance policy, intended to have maximum death benefit and minimum premium payments, BOLI is structured to have the smallest death benefit possible, while maintaining the tax preferred nature of a legal life insurance policy according to the Internal Revenue Code. This is important because the policy charges are a factor of the size of the death benefit. Thus, smaller death benefits minimize costs and maximize policy earnings for the bank. This is ideal when the goal is to create efficient use of cash. Why do banks own BOLI? The business purpose for a bank to own BOLI, as documented by Interagency Memo 2004-56, is to finance employee benefits expenses. Because the income generated from a BOLI policy is consistent and the asset is intended to be held for the long term, it matches up well against rising employee benefits expenses. The tax preferred nature and high credit quality of BOLI make the asset an attractive alternative to other high-quality taxable assets. While many banks earmark BOLI income to finance a specific benefit for key people, BOLI income may be used to finance all employee benefits, including 401(k) match, health insurance, etc. It is important to understand that a bank’s decision to purchase BOLI is for its long-term earnings potential and ability to ride the waves of rising and falling rate cycles. To provide an example, Figure 1 illustrates the performance of actual BOLI returns against the 10-Year Treasury and Fed Funds from 2001 to 2023. To generate a return, insurance carriers maintain a general portfolio comprised of multiple assets with varying degrees of maturity (including high-quality MBS, Corporate Bonds, and Private Placements). Many of the assets held inside the carrier’s general account cannot be directly owned by a bank. However,

14 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

banks are able to experience the returns of these assets indirectly through BOLI. The smoothness of BOLI earnings is a result of the lag-effect of the general portfolios and the pace at which assets turn over into current interest rate earning instruments. In other words, as portions of the portfolio mature, the cash released is redeployed into assets that pull the portfolio in the direction of the market. In the Figure 1 case study, the heavy green line represents actual tax effected BOLI yields aggregated from multiple carriers but does not include the impact from tax-free death proceeds. From 2001 to 2002, the Fed Funds rate dropped rapidly. While BOLI yields also decreased, the lag effect tempered the drop in comparison. When the Fed Funds rate climbed steadily in the middle of 2004, BOLI rates stabilized as carriers attempted to reallocate portfolios from the downward trend in the prior months. Going forward to the economic crisis in 2008/2009, we all know what happened to interest rates as the economy was in turmoil and banks were failing. This is where BOLI carriers shined as they did their best to steady returns for the following 10 years. During that 10-year period, in many cases, BOLI was the highest earning asset on a bank’s balance sheet and served as a counterbalance to create income in a low interest rate environment. It is relevant to point out that not all BOLI carriers’ performance will be identical because each carrier manages their own general portfolio. Not only will there be variance in portfolio assets amongst carriers, but the duration of each portfolio will vary. Those with shorter durations will be more sensitive to rate fluctuations than those with longer durations. Because of this, many banks will use a blended approach of BOLI products to balance their risk and market rate sensitivity.

The point of highlighting that time frame is to take the focus away from the hunt for yield today and shine the light on the long term. The Fed’s fight against inflation has caused market rates to rise at a faster pace than the turnover in BOLI carriers’ general accounts causing under market BOLI returns. The recent uptick shows that BOLI is behaving exactly as predicted. Turnover creates a pull in either direction, but the tax-preferred status means that BOLI movements do not have to be as drastic to have the same impact. For example, in simplified terms, for every 100 basis points of movement in the market, a tax-preferred asset will only need to adjust by 75 basis points to have the same impact. This assumes a 25 percent tax rate and is an example to illustrate a point. It is also important to note that the BOLI yields in Figure 1 do not include the potential proceeds from the life insurance when a death occurs to one of the insureds. Howard Marks from Oaktree Capital often uses the phrase, “time over timing,” which is meant to urge investors against attempting to time the market but rather to focus on the long-term and reap the rewards of compound interest. The big picture tells us that over time BOLI continues to deliver consistent returns and serve its purpose, to offset the costs of employee benefits expenses and manage risk. Glenn Blackwood and Joe Schaefer are consultants with NFP Executive Benefits. To learn more, contact Blackwood at glenn. blackwood@nfp.com or Schaefer at joe.schaefer@nfp.com. Glenn Blackwood is a registered representative with Kestra 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 Services, LLC is not affiliated with NFP or NFP EB. Investor Disclosures: https://bit.ly/KF-Disclosures

Actual Case Study - BOLI Tax Equivalent Net Yields versus Treasury Yields, Fed Funds & MBS Index

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TRUST AND WEALTH MANAGEMENT MINI FEATURE

GLENMEDE: A PERFECTLY POSITIONED BOUTIQUE WEALTH AND INVESTMENT MANAGEMENT FIRM

T he Glenmede Trust Company was founded in 1956 for one purpose: to serve in perpetuity as the Trustee and Administrator of The Pew Memorial Trust, the initial funding source for the nonprofit now known as The Pew Charitable Trusts. Over the decades, we have thoughtfully and purposefully evolved to meet our client’s needs while staying true to our everlasting commitment to fiduciary values.

achieving their desired goals. From there, our clients’ wealth objectives guide us in formulating a customized investment strategy within a proven framework to build portfolios for the long-term. Our clients benefit from decades of experience in planning, interpreting, and administering personal and charitable trusts, in addition to helping their families transfer wealth in a manner that reflects their values

through our Center for Family Philanthropy and Wealth Education. Glenmede serves clients in all 50 states and formally brought our client-focused approach to Palm Beach, Fla., in 2019. Since many of our existing clients reside in Florida on a full-time or seasonal basis, our goal was to deepen our commitment to serving their changing needs while continuing to partner with a strong network of local Florida based intermediaries and industry professionals. Understanding the demand for services and expertise in the region such as tax and trust law changes, a volatile economy and shifting needs of current and potential clients, we

Today, Glenmede is a privately owned, independent wealth and investment management firm that oversees $42.5 billion* in assets under management for high net-worth individuals, families, family offices, endowments, foundations, and institutional clients. We believe we are perfectly sized to provide a wide range of expertise and solutions, while offering exceptional client service that fosters personal and enduring relationships over multiple generations. Each of our clients is truly unique, and the complexities of wealth require a comprehensive approach supported by an integrated team.

“AT GLENMADE, WE ARE COMMITTED TO DEVELOPING RELATIONSHIPS AND PARTNERSHIPS BY MAINTAINING A LOW CLIENT-TO-ADVISOR RATIO AND FOSTERING A MULTIGENERATIONAL PERSPECTIVE.”

assembled a team of deeply experienced professionals with over 185 years of collective industry experience. This integrated team is led by Mark R. Parthemer, a Fellow of the American College of Trusts and Estates Counsel. Parthemer brings decades of sophisticated estate planning, tax and advisory experience not only to the Florida region, but to the entire firm as he also serves as Glenmede’s Chief Wealth Strategist.

Through this collaboration, our team can explain how the dimensions of wealth interconnect and why a multifaceted plan is the best path for clients to reach their wealth objectives. It starts with our proprietary Goals-Based Wealth Management process, a dynamic methodology that provides insights from stress-tested scenarios to educate our clients on their options, make informed decisions and maximize the probability of

*As of 6/30/2023

16 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

At Glenmede, we are committed to developing relationships and partnerships by maintaining a low client-to-advisor ratio and fostering a multigenerational perspective. Our client focus and commitment, coupled with our fiduciary duties and private ownership keeps us keenly focused on our clients’ everchanging investment and wealth management needs. This is the Glenmede difference.

friends and is not intended as investment, tax or legal advice. Any opinions, recommendations, expectations and/or projections expressed herein may change after the date of publication. Information obtained from third-party sources is assumed to be reliable but may not be independently verified, and the accuracy thereof is not guaranteed. No outcome, including performance or tax consequences, is guaranteed, due to various risks and uncertainties. Clients are encouraged to discuss any matter discussed herein with their tax advisor, attorney or Glenmede Relationship Manager.

This material provides information of possible interest to Glenmede Trust Company clients and

MEET MARK PARTHEMER, AEP, FBA TRUST EXECUTIVE COMMITTEE CHAIR

Mark Parthemer, AEP, is Glenmede’s Florida regional director and chief wealth strategist. He is responsible for cultivating the growth and operations of the Florida region and for developing and communicating Glenmede’s position and strategy concerning tax, estate planning and fiduciary matters pertinent to clients and their advisors. Parthemer joined Glenmede with over three decades of experience in trust, estate and tax planning. Prior to joining Glenmede, Parthemer served as managing director for TIAA, working with ultra-high-net-worth clients to deliver sophisticated tax and estate planning advice. He

held previous roles including managing director and senior fiduciary counsel at Bessemer Trust Company and senior tax professional at PricewaterhouseCoopers. Parthemer earned Bachelor of Arts and Bachelor of Science degrees from Franklin & Marshall College, and a Juris Doctorate from The Dickinson School of Law, Penn State University. Parthemer is a fellow of the American College of Trusts Estates Counsel. He is the Florida Bankers Association Trust Executive Committee Chair and served as Past Chair of the Legislation Committee. He is also group vice chair for the American Bar Association, RPTE Trusts and Estate Practice Group, and often faculty for the University of Miami’s prestigious Heckerling Institute. Parthemer is a nationally recognized speaker and a frequently published author. He is an associate editor and columnist for the Journal of Financial Services Professionals and is frequently quoted on tax and estate planning matters in publications such as the Wall Street Journal, NY Times, and Washington Post.

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PHOTOS COURTESY OF DANIESE BETITO, IMAGES FOR BUSINESS, ORLANDO, FLA. FBA LEADERSHIP EVENTS HONORING FDIC CHAIR MARTIN GRUENBERG AND VICE CHAIR TRAVIS HILL Hilton Tampa Downtown, Tampa Hotel AKA Brickell, Miami T he FBA hosted a leadership luncheon with FDIC Vice Chair Travis Hill in Tampa on September 7, and a dinner honoring FDIC Chair Martin We are grateful to both Gruenberg and Hill for addressing our membership; it is so important for our industry to stay informed about the regulatory landscape. Gruenberg in Miami on September 12. The events drew a combined audience of more than 500 bankers.

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FBA’S 2023 TRUST & WEALTH MANAGEMENT CONFERENCE Ritz Carlton, Fort Lauderdale

PHOTOGRAPHS BY BENJAMIN RUSNAK PHOTOGRAPHY

T he FBA held its 64th Annual Trust & Wealth Management Conference at the Ritz Carlton in Fort Lauderdale on September 21-22. This annual conference is designed with the trust and wealth management professional firmly in mind. The timely curriculum addressed topics and issues currently challenging the industry, taught by attorneys well versed in the legal aspects, industry consultants, and senior trust and wealth management officers deep in the daily trenches. Trust Executive Committee Chair Mark Parthemer, Florida Regional Director at The Glenmede Trust, provided legislative and education updates and

presented awards in recognition of service, involvement and accomplishments. The 2023 award winners were: Trust Banker of the Year Bill Moor, President, Capital City Trust Company Trust School Tinsley-Wells Honor Graduate Andrew Aiello, CIMA, Managing Principal at Sabal Trust Company Trust Hall of Fame Inductee Pete Brokaw, retired, formerly FBA Senior Vice President of Education

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24 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

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Z

FLORIDA BANKERS EDUCATIONAL FOUNDATION (FBEF) DONORS CONTRIBUTIONS RECEIVED FOR THE 2023-24 FISCAL YEAR THROUGH OCTOBER 1, 2023

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.

Amerant Bank Jerry Plush Anchor Bank

Prime Meridian Bank Sammie D. Dixon, Jr. Raymond James Bank, N.A. Steven M. Raney Sanibel Captiva Community Bank Kyle D. DeCicco SmartBank Billy Carroll, Jr. SouthState Bank John Corbett Sunstate Bank Lloyd DeVaux TCM Bank, NA Damon J. Moorer The Bank of Tampa A. Gerald Divers The First National Bank of Mount Dora Robert D. White The First, a National Banking Association Ray H. Cole TIAA Bank Curt Cunkle Trustmark National Bank John D. Sumrall United Bank Mike Vincent United Southern Bank Greg L. Nelson U.S. Bank Sandra Fleming U.S. Century Bank Luis de la Aguilera

First Horizon Bank Mario Trueba First State Bank of the Florida Keys Gary Carney Flagship Bank Robert B. McGivney Florida Capital Bank Mark Johnson Grove Bank & Trust Jose E. Cueto Intracoastal Bank Bruce E. Page Locality Bank Keith Costello Madison County Community Bank Edward Meggs Mainstreet Community Bank of Florida W. Ben Flowers William J. Penney New York Community Bancorp, Inc. Mark D. Watson Ocean Bank Alfonso A. Macedo One Florida Bank Frederick G. Pullum OptimumBank Timothy Terry Popular Bank Israel Velasco Marine Bank & Trust Company

Nelson Hinojosa

Axiom Bank

Ross Breunig Banesco USA Calixto Garcia-Velez BankFlorida James S. Stalnaker, Jr. BankUnited Tom Cornish Barwick Bank James J. Bange Caldwell Trust Company Kelly Caldwell, Jr. Capital City Trust Company William L. Moor, Jr. Central Bank John M. Thompson Century Bank of Florida Jose Vivero Citizens Bank & Trust Greg Littleton City National Bank of Florida Jorge Gonzalez Community Bank Fred Leopold Community Bank of the South William T. Taylor Customers Bank Joseph Nowland Cypress Bank & Trust Dana Kilborne

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Winter Park National Bank David R. Dotherow

Waterfall Bank

Kevin Darmody Wauchula State Bank James W. Crews, Jr.

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. 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 Working to advance your career through education? The Florida Bankers Educational Foundation (FBEF) is here to help. FBEF funding can be used by bankers working for a bank or a trust company in Florida while attending a FBEF participating university. Applications and eligibility information can be found online at FloridaBankers.com/FBEF. If you are thinking of applying for FBEF funding, please contact FBEF Director Letty Newton at (850) 701-3522 or lnewton@floridabankers.com for more information on how the FBEF can help you.

REGISTER TODAY! FBEF WELCOME RECEPTION Tuesday, January 23 | 5:30 – 7:00 PM Table 23

Register early for a reduced rate of $115. After December 20, registrations are $125.

The Florida Bankers Educational Foundation (FBEF) wants to welcome you to Tallahassee! Join us the evening before FBA’s Capitol Day for this fun networking reception that raises funds for the FBEF to support bankers who want to advance their careers through education.

You must register separately for the FBEF Welcome Reception. For more information, contact FBEF Director Letty Newton at 850-701-3522 or lnewton@floridabankers.com.

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