Florida Banking April 2024

THE MAGAZINE OF THE FLORIDA BANKERS ASSOCIATION WWW.FLORIDABANKERS.COM SEPTEMBER 2020 Millennium Bank: Committed to Service and Stewardship THTEHMEAMGAGZIANZEINOEFOTHFETHFLEOFRLIODARIDBANBKAENRKSEARSS OACSSIAOTCIOIANTIONWWW.FLORIDABANKERS.COM SEPTEMBER 2020 WWW.FLORIDABANKERS.COM APRIL 2024

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TH ANNUAL MEETING THE BREAKERS | PALM BEACH, FLORIDA Visit our website for the most current program information and event announcements: www.FloridaBankers.com/AnnualMeeting

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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 2024 Kathy Kraninger President and Chief Executive Officer Florida Bankers Association kkraninger@floridabankers.com Pamela Ricco Executive Vice President and Chief Operating Officer A

THE MAGAZINE OF THE FLORIDA BANKERS ASSOCIATION

VOLUME 39

NUMBER 3 APRIL 2024

ON THE COVER 8 - - - - - - - - Millennium Bank: Committed to service and stewardship CONTENTS 4 - - - - - - - - - Chair’s Message: How FBA’s BancServ Connects Banks with Quality Vendors 6 - - - - - President's Perspective: Be an Ally, or in Other Words, Build a Team 7 - - - Spotlight on FBA’s Women in Leadership Planning Committee: Q&A with Committee Chair Lourdes Mendes 12 - - BancServ Endorsed Partner: “An Ill Wind that Blows No Good:” Economic Headwinds and Asset and Liability Management 14 -------- Trust and Wealth Management: Banking at the Speed of Blockchain 16 - - First National Bank of Mount Dora: Banking on Community 18 - - - Florida Bankers Educational Foundation (FBEF) Donors 20 - - - FBA Leadership Luncheons Honoring FED Governor Michelle Bowman 24 - - - - FBA Leadership Luncheon Honoring Congressman Byron Donalds 26 - - - - - - Personal Transactions 26 - - - - - - - - - - - - - - Kudos 30 - - - - - - - - Upcoming Events 31 - - - - - - -Advertising Directory 31 - - - - - - - - - -Did You Know?

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Florida Bankers Association pricco@floridabankers.com

Brooke Harrison Publications Director Florida Bankers Association bharrison@floridabankers.com

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6

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: Millennium Bank Florida Regional President Suzanne Norris

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

Photos by Steven Martine Photography

CHAIR’S MESSAGE

HOW BANCSERV CONNECTS BANKS WITH QUALITY VENDORS

BY JOSE CUETO, FBA CHAIR

S electing the right partners is central to each bank’s success and to avoiding significant headaches or worse. Conducting our due diligence to make the best choice for the bank - and, therefore, our employees and customers — is often time-consuming and painful. We must consider many factors, such as a vendor’s background, experience, price point, client satisfaction, transition costs, operational risk, etc. The good news is that we have access to a valuable resource that can make the vendor-selection process easier. The Florida Bankers Association’s (FBA) wholly owned subsidiary BancServ, Inc. exists to connect our

members ask prospective partners the tough questions as if they were buying the product for their own bank. We’re grateful to this group for their commitment and service on behalf of our membership. The current board chair is Karen Sharp of BankMiami (IO). There are many benefits to using the products and services offered by FBA’s Endorsed Partners. They offer discounts and other exclusive offers to member banks. Moreover, this is a revenue-generating program for the FBA. Every time a member bank uses an Endorsed Partner, the FBA receives a percentage and those dollars flow back into BancServ and the FBA’s efforts to serve members and advocate for our industry.

members to companies that offer the highest quality products, services and solutions. BancServ’s mission is about helping our members save time, effort and money — directly to our members and indirectly through revenue to FBA. Through BancServ’s Endorsed Partner program, the FBA endorses companies who offer a range of bank products and services, including check and marketing services, Bond

The relationships that the FBA facilitates with quality vendors through BancServ are enormously helpful. As FBA members, we’re receiving recommendations from a trusted source. We also have the opportunity to meet vendors face-to-face at events and learn more about their products and services. Time is a precious resource. The due diligence of the BancServ board of directors

“THE RELATIONSHIPS THAT THE FBA FACILITATES WITH QUALITY VENDORS THROUGH BANCSERV ARE ENORMOUSLY HELPFUL.”

and D&O insurance services, EFT solutions, healthcare and professional lending, compliance solutions, HSAs, core-consulting, office supplies and printing, and more. To become an endorsed partner, companies must undergo a thorough application process and vetting by the BancServ board of directors. In addition, these companies are often already affiliated with FBA as Associate Members and generally have existing relationships with our members. The BancServ board is made up of C-level community bank executives who are heavily involved in the vendor selection or operations of their bank. These board

eliminates hours of research for our banks. Furthermore, BancServ is committed to continual improvement in the services offered, the value provided, and the promotion of partners. To learn more about FBA’s Endorsed Partners or to share your ideas and feedback, visit floridabankers. com/endorsed-products-services.html. Reach out to Director of Partner Relations Brian Hickey at 850 701-3510 or bhickey@floridabankers.com for an introduction. Consider our Endorsed Partners and other Associate Members the next time you’re selecting a vendor!

4 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

BANCSERV ENDORSED PARTNERS

Partner with Lively to deliver a best in-class HSA experience and unlock revenue growth for your bank. Adam Berry, (208) 724-03091 adam.berry@livelyme.com

Florida Bankers Health Consortium has been helping community banks manage their benefits for more than 50 years.

Bond, D & O, Cyber Insurance Patricia Williams, (800) 274-5222 pwilliams@abais.com

Adella Salinas, (800) 368-3248 asalinas@selectsourceone.com

#1 source for medical & professional loans BHGLoanHub.com/FL Melissa Whelan, (315) 559-7641 melissa@bhg-inc.com

The only nationwide independent, member-owned debit network, processor & core provider supporting community banks. Alex Jerigan, (229) 861-3802 jjerigan@shazam.net

Custom Sale-Leaseback, Property Management & Branch Consulting Bill Yeomans, (315) 491-8651 byeomans@brooklinedevelopment.com

Web-based portal for professionally designed & produced bank branded marketing materials in seconds. Neal Reynolds, (678) 528-6688 nreynolds@bankmarketingcenter.com

STS Group is Florida’s strongest partner for bank security, ATMS & branch automation equipment. Adam Stephens, (256) 957-8018 adams@stsgrp.com

A full suite of investment products and services for community banks through its exclusively endorsed broker, Stifel.

J im Reber, (800) 422-6442 jreber@icbasecurities.com

Comprehensive and affordable payments solutions, including credit, debit, merchant, & digital commerce. Client Relations, (800) 242-4770 payments@icba.org

Broad range of integrated payment, marketing, & technology solutions.

Executive Benefits & BOLI Glenn Blackwood, (561) 798-5620 glenn.blackwood@nfp.com Joe Schaefer, (786) 566-9423 joe.schaefer@nfp.com

Bill Lopez, (305) 609-2757 william.lopez@vericast.com

Zurich provides best-in-class solutions to help reduce FBA member bank losses and manage risk more effectively.

Discounted supplies including PPE, cleaning, furniture, print & promo solutions. Customer Service, (888) 263-3423 NationalEmailOrders@odpbusiness.com

A family of bank compliance services that include compliance alliance, review alliance, & virtual compliance officer. (833) 683-0701 info@bankersalliance.org

Stanley Bernard, (410) 559-2423 stanley.bernard@zurichna.com

Ncontracts' solutions suite encompasses the complete life cycle of risk. We help you build a better bank in a constantly changing environment.

Core & Digital Banking Evaluations | Contract Negotiations | Bank Advisors for 28 Years Keith Hagen, (850) 640-2244 keith.hagen@ici-consulting.com

Receive High-Yield CRA Credit David Lenoir david.lenoir@icba.org

Corey Polom, (413) 374-5467 corey.polom@ncontracts.com

Created by the Florida Bankers Association, BancServ Inc., provides quality products and services at a discounted rate, saving Florida banks time & money. Brian Hickey, Managing Director of Partner Relations | bhickey@floridabankers.com

PRESIDENT'S PERSPECTIVE

BE AN ALLY, OR IN OTHER WORDS, BUILD A TEAM

BY KATHY KRANINGER, FBA PRESIDENT AND CEO

I f I were to list every title and position I have held on my resume, it would be extensive. I have joked that I couldn’t hold a job, particularly when compared to those who dedicate their career to one organization. Yet, across the organizations, positions, and time span, I have only had one female boss. To be sure, women have been on the management teams at the same organization; women have been my peers, colleagues, and friends; and I have had majority female teams report to me. Yet, my bosses, mentors and champions have been men.

We were facing a new paradigm and new challenges, particularly after September 11th, 2001, when the mission was front and center. Individual egos were checked, for the most part (I’m not a complete Pollyanna!), and hearing different perspectives and solutions was valued. So was a default to action – there was more than enough work to go around, and we needed everyone on board. “Being an ally,” to me, is about recognizing that everyone has a contribution to make, and the whole is greater than the sum of its parts. Furthermore,

For much of my career, I worked with law enforcement, which remains male-dominated in the front-line officer/ agent workforce as well as in the ranks of leadership. To put some numbers on the sector: in 2021, while 60% of full-time civilian law enforcement employees in the United States were female, only 13.3 percent of full-time law enforcement officers were

each person’s experience, background, race, gender, values, and education bring unique perspectives to the team. Leaders need to tap into the strengths of each team member and coalesce the team, because that is the only way to deliver on the goal. As the CEO of FBA, I want to ensure our team is strong, with every member engaged and contributing – that starts

“‘BEING AN ALLY,’ TO ME, IS ABOUT RECOGNIZING THAT EVERYONE HAS A CONTRIBUTION TO MAKE, AND THE WHOLE IS GREATER THAN THE SUM OF ITS PARTS.”

female and less than 3% of leadership were female. So, it was not unusual for me to be the only woman in the room or the only woman at the table. It rarely fazed me, and I was generally not even conscious of it. I attribute that, largely, to two things – first, I grew up with three brothers who helped ensure I stand up for myself and have a thick skin; second, I spoke up and was heard in those rooms. That second point is interesting, looking back now. I believe it says as much about the fantastic men I had the honor of serving with and working for as it does about me.

with the FBA staff and extends to our association. New perspectives and backgrounds should be brought to the team to strengthen our ability to deliver on the mission. At the FBA Board, we are talking about how to engage emerging leaders in the banking sector and within the FBA – I welcome your thoughts on this important issue. This month, I can note one opportunity to engage more women in leadership opportunities, and that is through our 10th Annual Women in Leadership Conference. I look forward to seeing you there!

6 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

SPOTLIGHT ON FBA’S WOMEN IN LEADERSHIP PLANNING COMMITTEE: Q&A WITH COMMITTEE CHAIR

LOURDES MENDES M eet the Women in Leadership Planning Committee, a group of dedicated bank executives who assisted the FBA in developing the program for our 10th Annual Women in Leadership Conference! The conference is designed to encourage, support and inspire women to reach for leadership positions in their chosen industries. Lourdes Mendes, SVP and Relationship Manager at Cadence Bank, has served as the 2023-24 committee chair. Could you describe the committee’s role in planning the conference? What does serving as Chair mean to you? The committee is composed of female bank executives from across the state representing a diverse mix of experience, roles and geographic locations. We discuss hot topics, attendee reviews from previous years and feedback we receive from our colleagues in

the industry. We focus on providing an agenda that is relevant and meaningful to women across every department of the bank. Being Chair on the 10th anniversary was especially meaningful; I have attended this event for several years and appreciate how the program brings people together and enriches women across our industry.

Lourdes Mendes

What do you love best about the Women in Leadership event?

One of my favorite aspects of the conference is the ability to meet and network with women I normally wouldn’t have the opportunity to engage with. I enjoy introducing people and seeing relationships grow through the years of attendance. Meaningful contacts and relationships are made every year.

CONFERENCE COMMITTEE

Tiffany Colucci

Gwynn M. Davey

Nicole Jones

Connie C. Nelson

Hanisha Patel

Pamela Ricco

Susan Rich

Susan Roetz

Kelly A. Smith

Lisa M. Scott

Susan H. Walker

WWW.FLORIDABANKERS.COM APRIL 2024 — 7

8 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

Committed to service and stewardship Millennium Bank:

M illennium Bank celebrates its 25th anniversary this year, taking pride in its commitment to being good stewards and serving both the Tennessee and North Florida markets. The Tennessee-headquartered community bank was founded in 1999 by a group of investors to benefit the citizens of the Chattanooga area. In 2020, the bank expanded into Florida with its acquisition of century-old Columbia Bank based in Lake City. Millennium Bank has since thrived in the North Florida market despite the challenges of navigating a merger during the global

on the Board of Directors. “Being on the board was important to me because I wanted to be part of the decision-making process not only at the executive level but at the board level to help chart the course for the bank,” Norris said. When she visited Chattanooga and met the bank leadership, especially CEO Mike Haskew, she “just knew it was going to be a special place.” Norris joined the team in 2020 and was instrumental in integrating the bank’s recently acquired Florida branches. It helped that the

Chattanooga and North Florida communities were so well aligned; Norris was also grateful to work with a team she knew well, as many of her employees had worked for her at previous institutions. “I have a fantastic team. I’m proud of how they have embraced the new challenges I’ve put in front of them. Each one of the people on my team have taken on some different

“AT MILLENNIUM BANK, WE ALL

pandemic. Today, the bank has nine offices and more than $500 million in deposits. Last year, the bank experienced record earnings of $6.8 million and loan growth of 12 percent. “2020 was a big year for the bank. Anyone who has ever been part of a merger process will acknowledge how challenging a merger can be under the best of circumstances;

UNDERSTAND THAT WE ARE CHARGED TO BE GOOD STEWARDS OF WHAT HAS BEEN GIVEN TO US. WE TELL EMPLOYEES EVERY DAY TO ‘DO THE RIGHT THING.’”

- SUZANNE NORRIS

we accomplished this during a pandemic, which required a change in the way we did business with customers and interacted with employees,” said Suzanne Norris, Millennium Bank Florida regional president. “We also provided almost $50 million in Paycheck Protection Loans to customers while in the process of integrating the banks. That program was critical to the survival of our customers.” Norris manages the strategic operations of the bank’s four locations in Lake City, Gainesville and Ocala. She is also

responsibilities than they had previously,” Norris said. “This is a culture that recognizes excellence. We provide a rewarding work environment where employees can achieve their professional and personal goals. When they succeed, their communities succeed.” In those early days of the merger, Norris’ strategy was about “leading through the storm,” overcommunicating with her team and setting clear expectations. “I think that went a long way toward Millennium Bank, Continued on page 10

WWW.FLORIDABANKERS.COM APRIL 2024 — 9

The Millennium Bank Florida regional management team, from left to right: Lori Simpson, Lake City Market President; Connie Anderson, VP/Branch Manager; Myron McClendon, VP/Branch Manager; Suzanne Norris, Florida Regional President; Shelby Bullard, AVP/Program Officer; Teresa Stephens, Ocala Market President, SVP/Retail Market Manager; Pat Massimillo, VP/Business Banker and Branch Manager.

of the communities in their service areas for many years. While Millennium Bank provides an array of mobile and online banking options, Norris says the team works hard to maintain the personal touch for customers. “People value

Millennium Bank, Continued from page 9

helping people accept the changes we needed to make,” Norris said. “One of the hardest parts about mergers and acquisitions is finding a balance between respecting the strengths of the culture

you’re leaving behind, while at the same time establishing a new culture and new expectations. Ultimately, we have the same goals, and we’re going to continue to deliver on those.” Stewardship is one of the bank’s core values. “At Millennium Bank, we all understand that we are charged to be good

relationships. They value expertise. Our customers have the opportunity to pick up the phone and speak directly with a decision maker. We still feel like our personal touch is something that sets us apart,” Norris said. She continued, “The bank has a longstanding commitment of service in our communities. Because

“BANKING IS A NOBLE PROFESSION. WE MAKE DREAMS COME TRUE FOR PEOPLE”

- SUZANNE NORRIS

each community is unique, we tailor our activities to those markets and how we can best make an impact. We support those areas that are important to customers and employees.”

stewards of what has been given to us. We tell employees every day to ‘do the right thing.’ The rest will take care of itself,” Norris said. All of senior management have been residents

10 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

At the corporate level, the bank sponsors the Chattanooga Motorcar Festival, the proceeds of which support Alzheimer’s and neuroscience research through Fifty Plus Foundation, Inc. Leadership agreed that Alzheimer’s is something that impacts every family, every customer; research is a critical part of solving the puzzle. The bank provides flexible schedules to its employees to allow them to participate in community outreach that is important to them. Employees partner with local school systems to conduct financial literacy programs or organize food drives for the local food bank. Most recently, a group of bank employees volunteered with the United Way to help the Homeless Coalition count the homeless for the census. “Sometimes it’s the smaller, individual needs that get overlooked. Meeting those needs often resonates with people more than if we wrote a big check,” Norris said. “Off-the-radar service is so impactful.” Norris also acknowledged the bank’s role in providing jobs within the community. “In smaller communities, the types of professional jobs we provide are important. These are nice career jobs for people. Someone can come to a small community bank and have a rewarding career while staying in their own community,” Norris said. She hopes that the next generation will find banking to be a rewarding and valuable profession, and that young bankers will have the same industry opportunities that she was afforded. “Banking is a noble profession. We make dreams come true for people,” Norris said. “When it comes to one’s financial situation, it encompasses their business, their family. As bankers, we’re invited into really sacred areas for people; it’s an important role that we play.” Norris and her team take this charge seriously and find joy in helping members of the community achieve their financial goals. “We are in great markets with plenty of opportunities for organic growth,” Norris said. “We will continue to capitalize on those opportunities and stay focused on growing with our clients and communities.”

SUZANNE NORRIS, FLORIDA REGIONAL PRESIDENT Suzanne Norris serves as the Florida regional president of Tennessee-based Millennium Bank, managing the strategic operations of the bank’s four locations in Lake City, Gainesville and Ocala. She also serves on the Millennium Bank Board of Directors, including Asset Liability and Loan Committees. Norris joined Millennium Bank in 2020, where she was instrumental in integrating the bank’s recently acquired Florida branches, previously owned by Columbia Bank, to create one community bank headquartered in Chattanooga under the Millennium Bank brand. Norris has more than three decades of banking experience, serving communities throughout the North Florida market. She began her career as a commercial banking officer for NCNB National Bank of Florida and has enjoyed success leading teams for community, regional and large banks, including TD Bank and Ameris Bank. A strong advocate for the communities in which she lives, Norris currently serves on the Florida Gateway College Board of Trustees, the Gainesville Chamber of Commerce Board of Directors and the United Way of Suwannee Valley Board of Directors. She also serves on various committees for the Diocese of St. Augustine, Epiphany Catholic Church and St. Francis Catholic Academy. An avid Gator, Norris was honored to serve as president of the National Alumni Association for the University of Florida. Norris earned her undergraduate degree from the Warrington College of Business at the University of Florida.

WWW.FLORIDABANKERS.COM APRIL 2024 — 11

BANCSERV ENDORSED PARTNER: COMPLIANCE ALLIANCE

BY ELIZABETH MADLEM, VICE PRESIDENT OF COMPLIANCE OPERATIONS AND DEPUTY GENERAL COUNSEL AT COMPLIANCE ALLIANCE “AN ILL WIND THAT BLOWS NO GOOD:” ECONOMIC HEADWINDS AND ASSET AND LIABILITY MANAGEMENT F L O R I D A B A N K E R S A S S O C I A T I O N

F inancial institutions are facing headwinds on account of burgeoning non-performing assets, corporate malfeasance, a slowdown in the economy, and a mismatch between the maturity profile of assets and liabilities. Severe liquidity strains caused the failure of Silicon Valley Bank, Signature Bank and First Republic Bank. Yet despite weaker economic conditions, sharply higher interest rates, high inflation, financial market stress and concerns over a potential recession, the banking industry demonstrated resilience. How? Asset and Liability Management (“ALM”): It is a common phrase thrown around a boardroom when in discussions about the viability and future of a bank. It is the practice of mitigating financial risks resulting from a mismatch of assets and liabilities, a combination of risk management and financial planning. Not only is it vital for the sustainability and longevity of financial institutions within the financial landscape, but it solidifies the important roles that banks play in maintaining the stability and growth of economies. Liquidity risk has become an increasingly important parameter for the assessment of a financial institution. But with a new age of depositor behavior and evolution of regulations, achieving a dynamic, integrated ALM program is challenging for banks of all sizes. Low interest rates lasted years, resulting in a complacency among financial institutions regarding deposit balance behavior. Then, during the past two rising rate cycles, deposit balances grew, coupled with an unusual systemic deposit inflow from 2020-2021 as a result of COVID-19 pandemic-related government fiscal stimulus. But those early 2023 bank failures proved that depository behavior is changing. One of the more important lessons surrounded concentration risk. Prior, deposits were considered one of the safest products in the liability structure of a bank. But, as the industry quickly learned, some types of depositors are more sensitive than others. Large concentrations of a particular type of client create a higher risk of deposit

flight, as was the case with SVB. As a result, banks are needing to diversify their funding basis. The ALM function covers a prudential component and an optimization role within the limits of compliance. Prudential meaning the management of all possible risks and rules and regulation, with optimization covering the management of funding costs, generating results on balance sheet position. But the industry is riddled with change: Business cycles becoming aggressive, global ecosystems and third-party risks becoming more complex, regulations rapidly changing, more stringent compliance enforcement — financial institutions are going to be forced to adopt an agile ALM framework with a broader perspective scoping out broad objectives of the bank’s asset/liability portfolio, as dictated by the Board in order to address new situations where a policy does not yet exist. With the adverse interest rate environments, it has been found that most ALM systems and processes are not providing accurate and explainable outcomes scaled to meet transaction processing requirements. They lack flexibility to support interest rate risk reporting, scenario modeling requirements and “what if” analysis and are unable to scale to account for a bank’s contract and account volume of deposits and loans. There exists a lack of transparency in the underlying calculation logic, resulting in unexplainable and independently unverified data. It is important for banks to assess the three pillars within an ALM program to include: ALM Information Systems, ALM Organization and ALM Processes. These pillars address the key components examiners test on: Board and senior management oversight policies, procedures, and risk limits; management information systems; and internal controls and audit. ALM Information Systems addresses Management Information Systems and information availability, accuracy, adequacy and expediency. Information

12 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

is the key to ALM strength. ALM Organization requires a strong commitment from the Board and senior management to integrate basic operations and strategic decision-making within risk management. The ALCO decision-making unit monitors market risk levels compared to Board set risk-limits, articulates the current interest rate view and view on the future direction of interest rate movements to strategize for future business opportunities, and reviews the results of and progress in implementation of the decisions made. Lastly, the ALM process encompasses a scope of liquidity risk management, management of market risks, trading risk management, funding and capital planning, and profit-planning and growth projection. While the above is not all-encompassing, it does assist financial institutions in knowing that their ALM foundation is robust and agile to respond to evolving needs, and that it is modeling the balance sheet, projecting net interest income and economic value of equity all while performing scenario analysis and stress testing to assess the impact of key performance indicators. This means also hiring a quality-of-ALM professional who understands the need to replicate the portfolio from a sensitivity point of view when modeling a balance sheet or replicating cashflow including complex structured products and embedded optionality. It requires accuracy and reliability to demonstrate what

is happening right now within a portfolio. As stress testing and scenario analysis demands continue, banks need to be able to respond consistently to multiple scenarios via their credit stress models. It should account for evolving requirements, meaning the bank should be able to run a scenario analysis, including stress testing non-interest-bearing checking accounts if there is a move to a higher interest rate. Financial institutions need to recognize that change is necessary for how they tackle managing liquidity and interest rate risks. ALM and liquidity are two essential parts of the bank’s overall model risk management structure. Ensure the Board has at least one director with a solid understanding of balance sheet management concepts. Be proactive in identifying risks and updating policies and procedures before implementing new products or activities. Reevaluate and communicate guidance and risk tolerances to bank personnel. With the economic landscape, particularly that of community banks, changing significantly, it directly correlates to a heightened need of attention to ALM risk management strategies and processes. Elizabeth Madlem is the vice president of Compliance Operations and Deputy General Counsel at Compliance Alliance. As the vice president of Compliance Operations, Madlem oversees C/A’s Products and Services and plays an important part in all operational areas of C/A. FLORIDA TRUST & WEALTH MANAGEMENT SCHOOL July 21-26, Rosen Shingle Creek Resort, Orlando Advance your career by enrolling in one of the Florida Bankers Association’s nationally-renowned schools taking place this summer!

FLORIDA SCHOOL OF BANKING August 4-10, J. Wayne Reitz Union, University of Florida, Gainesville

For more information about the FBA’s schools, please visit the FBA website at www.FloridaBankers.com or contact Olga Williams at ojwilliams@floridabankers.com.

WWW.FLORIDABANKERS.COM APRIL 2024 — 13

TRUST AND WEALTH MANAGEMENT

BANKING AT THE SPEED OF BLOCKCHAIN

BY DAVID K. SPENCER CPA

W hat a time to be alive! While financial engineering has provided us with a host of new products and opportunities, according to Gary Gastineau, author of "The Exchange-Traded Funds Manual," the first real attempt at something like an ETF was the launch of Index Participation Shares for the S&P 500 in 1989. We have come a long way since then. As of 2022, there were over 8,500 ETFs globally, in every variety and industry you can imagine. In January, we had a memorable event in financial history of similar import as the first ETF or the advent of fee-free stock trades. The Greyscale Bitcoin Exchange Traded Fund was approved in January

blockchain. So, as the internet is more important than any one site, the technology that is blockchain is more important than Bitcoin itself. That being said, this author does believe that someday Bitcoin will have a six-figure price. However, the blockchain will continue to reign supreme. I will spare you the technical details but suffice to say blockchain will affect every industry and spring up new players in every industry. Thus, we should expect to see blockchain industry ETFs to follow swiftly behind this first approval. But the question remains, what is a blockchain and why does it matter? A blockchain is a database, no more, no less. However, blockchain databases

2024. Since then, we have heard pundits nearly daily on the financial news opining about the implications of the approval. Reports are that over $3 billion dollars have flowed into the ETF. But what is all the hype about? The BTC ETF promises to allow institutions and retail investors access to Bitcoin in a regulated and safe way they are comfortable with. It also will allow institutions a more robust way to get involved in the asset class. However, these are obvious answers,

have some unique features that make them particularly useful. For starters, they are unhackable. But wait, haven’t we seen blockchains get hacked? No, we have seen exchanges get compromised and hacked. Blockchains cannot be hacked with current technology. There is a worry that quantum computers could hack a blockchain, but that is a long way off and beyond the scope of our conversation here. For the time being, the fact remains, blockchains cannot be hacked.

THE TECHNOLOGY THAT IS THE BLOCKCHAIN IS SET TO REVOLUTIONIZE THE WORLD IN MUCH THE SAME WAY THE INTERNET TOUCHED EVERY FACET OF OUR LIVES.

and there is much more happening in the digital asset space than just a new ETF. It is easy to follow the fascination with Bitcoin and the name recognition that is associated with the first blockchain-based digital currency ever created. However, Bitcoin is not the story. The blockchain is the story. Blockchain is the technology that allows the wonder that is Bitcoin. Put simply, Facebook runs on the internet in much the same way Bitcoin runs on a

Blockchains only contain accurate data. A major issue with any database is knowing if we can rely on the data stored there. One feature of blockchains is that they verify the data prior to the data being archived on the blockchain. Because the data is verified prior to being stored on the blockchain, there is no need for scrubbing data and constant updating of information. These are some of the unique features of blockchains. It is this author’s belief that every financial professional

14 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

in the country will have to understand blockchains at some level in order to offer products in the future. In 2019, the Bank of International Settlements (BIS) issued one of its first statements on digital assets. As digital assets and Central Bank Digital Currencies (which the BIS notes are different things) become more prevalent, banks will have exposure to these and the BIS comments the following: “…the Committee expects that if a bank is authorised [sic] and decides to acquire crypto-asset exposures or provide related services, the following should be adopted at a minimum: • Due diligence: Before acquiring exposures to crypto-assets or providing related services, a bank should conduct comprehensive analyses of the risks noted above. The bank should ensure that it has the relevant and requisite technical expertise to adequately assess the risks stemming from crypto-assets. • Governance and risk management: The bank should have a clear and robust risk management framework that is appropriate for the risks of its crypto-asset exposures and related services. Given the anonymity and limited regulatory oversight of many crypto-assets, a bank's risk management framework for crypto-assets should be fully integrated into the overall risk management processes… • Disclosure: A bank should publicly disclose any material crypto-asset exposures or related services as part of its regular financial disclosures and specify the accounting treatment for such exposures, consistent with domestic laws and regulations. • Supervisory dialogue: The bank should inform its supervisory authority of actual and planned crypto-asset exposure or activity in a timely manner and provide assurance that it has fully assessed the permissibility of the activity and the risks associated with the intended exposures and services, and how it has mitigated these risks. 1 ” Clearly, these four instructions are sound guidance from the BIS. In 2022 the BIS completed a survey of 85 central banks around the world. The survey suggests that by 2030 there could be 15 Central Bank digital currencies in circulation 2 . In the U.S. the FEDNOW service is a real-time gross settlement system that has been active since July 20, 2023. This is a blockchain based system open to all depository institutions in the United States. Blockchain is here now and is here to stay. For the brief history of crypto, many banks have taken a rather strict stance on the asset class. Some clients have had accounts closed for too much dealing in crypto. Digital asset companies have had difficult times opening bank accounts and keeping them open.

In the bank’s defense, it is wise to remove a client if the bank is unsure of the providence of funds and/or is not familiar with the type or size of transactions being executed by the client. Thus, while banks were within their professional responsibility in these actions, they were losing customers and business as a result. This tide will shift as digital assets become more widespread and banks will have to educate their staff about how to have intelligent discussions about digital assets. This is the key to the first step in any financial institution when they think about their digital asset strategy. How do I educate my staff? This becomes a much more difficult task as there is so much untrustworthy information on the internet at large. Few professionals understand and have deep knowledge in the space. Governance, disclosure and supervision are tasks that the bank can handle once they have established the institutional knowledge to have robust conversations in house. Building that knowledge base should be the highest priority and the time has arrived. Without a sound knowledge base, the bank will not be able to build a strong digital asset strategy. Without a strategy, the coming decade will be much more difficult to manage. Attempting to play catch up when you don’t even understand the rules, is a losing position. It is imperative now that banks begin to invest in the education of staff and perhaps younger staff who are enthusiastic about being a part of the coming digital asset revolution. The technology that is the blockchain is set to revolutionize the world in much the same way the internet touched every facet of our lives. Blockchains will become ubiquitous and a more important part of our financial lives as everything is tokenized someday. Your car, your house and someday your vote will be on a blockchain. While that someday has not come yet, the days of assuming that crypto is a fad that will soon fade are gone. We are at the pivotal point where educating oneself about digital assets is no longer an option; it is a necessity in order to compete over the coming decade. This is your sign and your call to action. Continue to learn or suffer the consequences of the world racing past at the speed of blockchain. David Spencer CPA is a senior advisor specializing in digital asset taxation and advisory. A graduate of the University of Oregon’s Lundquist college of business, he has spoken internationally and at several universities on the topic. He has numerous certifications in fintech and blockchain from IBM, Harvard Professional Education, and the Global Blockchain Business Council. An avid freediver in his spare time and a self-proclaimed futurist, Spencer is excited about the future he sees ahead.

1.Source: Statement on crypto-assets. (2019, March 13). Bis.org. https://www.bis.org/publ/bcbs_nl21.htm 2.Kosse, A., & Mattei, I. (2023). Making headway -Results of the 2022 BIS survey on central bank digital currencies and crypto. https://www.bis.org/publ/bppdf/bispap136.pdf

WWW.FLORIDABANKERS.COM APRIL 2024 — 15

TRUST AND WEALTH MANAGEMENT MINI FEATURE

FIRST NATIONAL BANK OF MOUNT DORA: BANKING ON COMMUNITY

THE RIPPLE EFFECT OF ROBUST WEALTH MANAGEMENT AND STRONG RELATIONSHIPS

F or nearly a century, the First National Bank of Mount Dora (FNBMD) has not only been a familiar part of Lake County but also has played a pivotal role in helping the area grow and prosper. This undoubtedly stems back to the relationships they have built. From their first days to today, their commitment to the people they serve and to the surrounding community has been unwavering. And while the way people bank has changed significantly over the decades, FNBMD’s dedication to its community has not. This steadfast commitment is just one aspect

FNBMD has also applied its knowledge and expertise to directly benefit the community. The Trust and Investment Department acts as the Trustee for the Mount Dora Community Trust, managing funds that are donated to support education, community activities and charitable organizations. Established in 1972 by a visionary donor, the philanthropic trust simplifies the creation of sub-trusts and manages funds for community benefit. With contributions from numerous donors, it supports various local causes. Notably, it funded the restoration of Mount Dora’s historic railroad station, which houses the Chamber of Commerce.

that makes FNBMD unique. They have long since combined their relationship-driven focus with both wealth management strategies and trust expertise. Seeing a need in the community, FNBMD established the Trust and Investment Department in 1965. What started as simply helping friends and neighbors manage and grow their financial assets and make smarter decisions with their money, evolved into providing comprehensive support to individuals

Beneficiaries include local schools, cultural organizations, animal shelters and community parks. Its broad scope reflects the interests of those who live and work in Mount Dora, ranging from aiding abused individuals and animals to enhancing cultural facilities and supporting community celebrations. This is especially rewarding for those at FNBMD, who have the ability to see firsthand the results of

"WE ARE ACCESSIBLE AND HAPPY TO SPEND TIME WITH OUR CLIENTS, GETTING TO KNOW THEM BETTER AND HAVING A FULL AND COMPREHENSIVE UNDERSTANDING OF THEIR INDIVIDUAL NEEDS AND EXPECTATIONS."

- JANICE EPAILLARD

in various life stages and situations, ensuring the protection of their wealth through a wide range of strategies. Throughout the years, they further honed their capabilities to better serve clients by staffing their team with CPAs, CFAs, and CFPs who possess a deep knowledge of both estate and financial planning. And just this year, they exceeded $1 billion in assets under management.

their community commitment. It’s clear that strong relationships based on service and trust are at the heart of all that FNBMD does. Knowing that taking charge of financial futures can be daunting for many, FNBMD investment advisors offer the guidance and assurance necessary to define and achieve their clients’ personal version of success. “We are accessible and happy to spend time

16 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING

with our clients, getting to know them better and having a full and comprehensive understanding of their individual needs and expectations,” Janice Epaillard, Vice President & Chief Fiduciary Officer, noted. However, FNBMD’s support doesn’t end there. They go the extra mile by providing tailored recommendations to help their clients reach their objectives and conduct regular progress reviews to ensure they remain on course. As an example of going this extra mile, long-time client Kim Stewart Brandt spoke of a difficult time. “When my dad passed away, my mom had absolutely no idea about what the bills were, where they had money in the bank, or where the brokerage account was, so I was in quite a panic. I did know, however, that they had a safety deposit box at the First National Bank of Mount Dora. I made some calls to a couple of the members of the Bank and told them what my situation was, and unbeknownst to me, they called around town to find out where my parents had their money. They then called me and told me who I needed to contact. Knowing that the First National Bank of Mount Dora was in my corner at such a difficult time was a huge relief. In the years since, not only has it been an easy and convenient place to bank, but they’ve also done a fabulous job with my portfolio. But what I like best about them are the relationships.” Like Kim, if anyone has an issue, problem or challenge, they know they can pick up the phone and speak with someone who will go above and beyond to help them. They also know that this person understands their situation and will advise them with only their best interests in mind. “I think one of the key competitive advantages of our investment team is that we insource the investment management function instead of outsourcing it like so many of our peers do. This allows for a personalized approach that our clients appreciate, because ultimately our job is to build toward client-specific outcomes rather than general market exposure,” said Pete Baksh, CFA, Vice President & Chief Investment Officer. Whether individuals need to start planning for retirement, roll over an existing retirement account, develop an investment or savings program, or protect wealth through trusts or estate planning, FNBMD is there. With a proactive approach, they not only address current questions but also anticipate those that have not yet been asked, continuing to foster strong relationships along the way. John D. Pease, IV, President of the Trust Department, noted how long relationships have been a priority for them. “We have always been aware of the importance of strong relationships. In fact, in 1965, the Trust Department was the first to feature an on-site investment advisor. We continue that tradition today, where our local team of investment professionals provides our

Pete R. Baksh, CFA

Janice C. Epaillard, CTFA, AEP

John D. Pease, IV

clients with the highest levels of service, attention and expertise.” He continued, “What we have learned over the years is that our steadfast commitment to our clients, to our neighbors and to our community truly sets us apart. Our success comes primarily from referrals. By providing a good product and delivering personalized customer support, our clients become huge spokespeople for the Bank. In much the same way, some of our clients are third and fourth generations of the same families we’ve served for decades. That says something.” FNBMD’s impact extends beyond these individual families. When individuals are empowered with stronger financial foundations, it creates a ripple effect of financial empowerment and community engagement that positively influences local businesses and the broader community. By supporting individuals’ financial wellbeing, from generation to generation, FNBMD is actively contributing to the establishment of a more prosperous community overall.

Trust and Investment Services are: NOT FDIC INSURED NOT Deposits of the Bank NOT Guaranteed by the Bank NOT Insured by any government agency MAY lose value

WWW.FLORIDABANKERS.COM APRIL 2024 — 17

Z

FLORIDA BANKERS EDUCATIONAL FOUNDATION (FBEF) DONORS CONTRIBUTIONS RECEIVED FOR THE 2023-24 FISCAL YEAR THROUGH MARCH 1, 2024

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 Anthem Bank

Brian Reed Commerce Bank & Trust Eric Ravndal Community Bank

5ironCyber

Jason Bradley Kirsten Melchior

Rodger D. Shay, Jr.

Flagship Bank

Robert B. McGivney Florida Capital Bank Mark Johnson Grove Bank & Trust Jose E. Cueto Gulfside Bank Dennis B. Murphy Hancock Whitney Bank Emory Mayfield ICI Consulting, Inc.

Anchor Bank

Jason Crowe Fred Leopold Community Bank of the South William T. Taylor Crews Bank & Trust James W. Crews, Jr. Rob Roberts Customers Bank Joseph Nowland Cypress Bank & Trust Dana Kilborne J. Kimbrough & Connie Davis Desjardins Bank, N.A. Louis Rheaume Dynamic Financial Strategies Diane McNeal FineMark National Bank & Trust Harlan Parrish First Colony Bank of Florida Ralph Betancourt First Foundation Bank Garrett Richter First Horizon Bank Mario Trueba First National Bank of Wauchula W. Lee Mikell Alasha C. Mikell First National Bankers Bank Chris Alexander Charlie W. Brinkley, Jr. Robert L. Trott

Nelson Hinojosa

Axiom Bank

Ross Breunig Banc Card of America

Andrew Lane Tyler Martin

Banesco USA

Calixto Garcia-Velez

BankFlorida James S. Stalnaker, Jr. Bank of America Fab Brumley BankUnited Tom Cornish Barwick Bank James J. Bange Brookline Branch Services Ed Horne Caldwell Trust Company Kelly Caldwell, Jr. Capital City Bank Group, Inc. William G. Smith, Jr. William G. Smith III 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 Climate First Bank Lex Ford College Ave Student Loans

Keith Hagen Jayme King Rachel King

INB, N.A.

Gabriella Cioli Intracoastal Bank Bruce E. Page Locality Bank Keith Costello Drew Saito Luse Gorman, PC Zachary Davis

Madison County Community Bank Edward Meggs Mainstreet Community Bank of Florida

W. Ben Flowers Paul B. Rountree Marine Bank & Trust Company

William J. Penney Shaun E. Williams Marketwise Valuation Services, Inc. Morgan Fowler Marcus Leoni New York Community Bancorp, Inc.

First National Bank Coastal Community Nicole Jones First State Bank of the Florida Keys Gary Carney

18 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING