A PUBLICATION OF THE NEW JERSEY BANKERS ASSOCIATION 10 COMMUNITY DEVELOPMENT LOANS 18 NJBANKERS 118TH ANNUAL CONFERENCE AND EXHIBIT HALL 14 THE ROLE OF AI IN COMPLIANCE NEW JERSEY BANKER MAKING CONNECTIONS ISSUE 3, 2024
CONTENTS What’s inside 10 COMMUNITY DEVELOPMENT LOANS: ARE THEY HERE? ARE THEY THERE? COULD THEY BE ANYWHERE? DEPARTMENTS 05 CHAIR’S PLATFORM In the heart of community banking lies a commitment to not only financial success, but also to the well-being of the neighborhoods it serves. 06 FROM THE NJBANKERS PRESIDENT’S OFFICE In recent years, Environmental, Social, and Governance (ESG) considerations have emerged as pivotal factors influencing the strategies and operations of businesses across various industries. 08 POLITICS AND POLICY As the United States grapples with significant economic and social challenges, the halls of Congress echo with the reverberations of political deadlock. 13 WELCOME NEW ASSOCIATE MEMBERS 16 MEET SOME OF OUR ENDORSED AND SELECT PROVIDERS 26 IN THE SPOTLIGHT: PHILANTHROPIC COMMITTEE ARTICLES 09 1 Million Meals Campaign 10 Community Development Loans: Are They Here? Are They There? Could They Be Anywhere? 12 NJBankers Emerging Leaders Network Trivia Night 14 The Role of AI in Compliance 18 NJBankers 118th Annual Conference and Exhibit Hall Featured Three Days of Education, Networking, and Some Time in the Sand 24 Building Tomorrow’s Bank Begins with Building Talent 25 Q&A with a Bank CEO 30 What to Expect and How to Navigate Medical Plan Increase 14 THE ROLE OF AI IN COMPLIANCE 18 NJBANKERS 118TH ANNUAL CONFERENCE AND EXHIBIT HALL 28 BANK SHOTS 29 BANK NOTES 31 UPCOMING EVENTS 3
NJBankers Officers Patrick L. Ryan* Chair President/CEO First Bank Michael P. Affuso, Esq.* President/CEO New Jersey Bankers Association Craig L. Montanaro* First Vice Chair President/CEO Kearny Bank Elizabeth Magennis* Second Vice Chair President ConnectOne Bank NJBankers Staff Michael P. Affuso, Esq. President/CEO maffuso@njbankers.com Jenn Zorn Executive Vice President/ Director of Education & Business Development jzorn@njbankers.com Jessica Jakobson Vice President Professional Development jjakobson@njbankers.com John Mangini Vice President/Director of Marketing/Communications jmangini@njbankers.com Brittany Wheeler Vice President/Director of Government Affairs bwheeler@njbankers.com Edward Yakely VP/Chief of Finance NJBankers/BCG eyakely@njbankers.com Andrea Ganzman Director of Digital Marketing & Creative aganzman@njbankers.com Lauren Barraza Chief of Staff lbarraza@njbankers.com Cynthia M. Zaccaro Senior Administrative Assistant, Business & Professional Development czaccaro@njbankers.com Diane Starr Marketing & Education Database Administrator dstarr@njbankers.com Bankers Cooperative Group Staff Matthew W. Cooney President/CEO mcooney@bcg-nj.com Mary Pat Boutmy Vice President and Board Secretary mboutmy@bcg-nj.com Andy Slobiski Employee Benefits Consultant aslobiski@bcg-nj.com Chris Corvil Client Services Analyst ccorvil@bcg-nj.com Doug Holcombe Employee Benefits Consultant dholcombe@bcg-nj.com Theresa Jolley Accounting Services Manager tjolley@bcg-nj.com Sarah Martorina Insurance Services Analyst smartorina@bcg-nj.com Jon Robinson Benefits Analyst jrobinson@bcg-nj.com Contact New Jersey Bankers Association www.njbankers.com 411 North Avenue East Cranford, NJ 07016-2436 Phone: 908-272-8500 Email: info@njbankers.com Counsel Mary Kay Roberts, Esq. Riker, Danzig LLP Contributing Editor John Mangini Vice President of Marketing and Communications New Jersey Bankers Association NJBankers Board of directors John M. Bonhomme* Managing Director/Regional Director JPMorgan Chase Bank N.A. John Borelli, Jr. President/CEO Newfield Bank Matthew Carcich President/CEO Freedom Bank John DeSclafani SVP/Commercial Banking Lender Wells Fargo Bank, N.A. Edward Dietzler President/CEO The Bank of Princeton Catherine Franzoni SEVP/COO Manasquan Bank Jorge S. Gomes, Esq. President/CEO Lusitania Savings Bank James A. Hughes President/CEO Unity Bank Thomas J. Kemly President/CEO Columbia Bank Steven M. Klein* Immediate Former Chair Chair/President/CEO Northfield Bank Anthony Labozzetta* President/CEO Provident Bank Kevin M. Lenihan President/COO Crown Bank Christopher D. Maher Former Chairman Chair/CEO OceanFirst Bank Martin P. Melilli Market President TD Bank, N.A. Donald Mindiak President/CEO First Commerce Bank James D. Nesci President/CEO Blue Foundry Bank Kevin B. Peterson President/CEO Haddon Savings Bank Jane E. Rey President/COO Spencer Savings Bank Robert Rey President/CEO NVE Bank Ira Robbins* Chair/CEO Valley Bank Michael A. Shriner President/CEO BCB Bank Kenneth R. Totten Chair/President/CEO United Roosevelt Savings Bank James H. Wainwright President/CEO Freehold Bank * Executive Committee 4
chair’s platform Beyond Deposits and Loans: Community Banks, CRA, and the Power of ESG PATRICK L. RYAN, CHAIR, PRESIDENT/CEO, FIRST BANK In the heart of community banking lies a commitment to not only financial success, but also to the well-being of the neighborhoods it serves. Community Reinvestment Act (CRA) and Environmental, Social, and Governance (ESG) principles have become central in shaping the ethos of community banks, influencing their interactions with customers, employees, and the environment. Long before the term “ESG” became commonplace, community banks were quietly laying the foundation for sustainable and responsible investing. For over two centuries, they’ve woven themselves into the fabric of local communities, providing financial services and fostering economic growth while prioritizing environmental and social well-being. Today’s focus on reinvestment and sustainability isn’t a new trend for community banks; it’s a continuation of the core values and commitment that comes with building thriving communities for generations to come. Picture your local community bank as more than just a place to deposit your paycheck or get a loan. It’s a hub where relationships are built and also acts as the foundation for local economies to thrive. The Community Reinvestment Act, created in 1977, ensures that community banks actively support the growth of all segments of their communities, especially those that might otherwise be left behind. It’s about saying no to redlining and saying yes to inclusive economic development. But it doesn’t stop there. Community banks like First Bank are stepping up to the plate, championing causes that matter to their customers and the environment. From supporting affordable housing projects to investing in renewable energy initiatives, banks are making a tangible impact where it counts. And it’s not just about doing good—it’s also about doing well. By integrating ESG criteria into their operations, community banks are not only managing risks but also building trust and loyalty among their customers and communities. Walk into your local First Bank branch and see we’re not only talking the talk but also walking the walk when it comes to sustainability. You’ll find us reducing our carbon footprint by recycling and using energy-efficient bulbs and office equipment, promoting diversity and inclusion, and ensuring ethical business WALK INTO YOUR LOCAL FIRST BANK BRANCH AND SEE WE’RE NOT ONLY TALKING THE TALK BUT ALSO WALKING THE WALK WHEN IT COMES TO SUSTAINABILITY. YOU’LL FIND US REDUCING OUR CARBON FOOTPRINT BY RECYCLING AND USING ENERGY-EFFICIENT BULBS AND OFFICE EQUIPMENT, PROMOTING DIVERSITY AND INCLUSION, AND ENSURING ETHICAL BUSINESS PRACTICES THROUGHOUT OUR OPERATIONS. IT’S ABOUT BEING TRANSPARENT AND ACCOUNTABLE, SO YOU KNOW EXACTLY WHERE YOUR MONEY IS GOING AND THE POSITIVE IMPACT IT’S MAKING. practices throughout our operations. It’s about being transparent and accountable, so you know exactly where your money is going and the positive impact it’s making. Of course, there are challenges along the way. Community banks must juggle the demands of short-term financial goals with the longterm vision of sustainability. But with strong leadership and a genuine commitment to their communities, these banks are rising to the occasion. By embracing CSR and ESG principles, they’re not only safeguarding their future but also paving the way for a more inclusive and sustainable world. 5 chair’s platform
president’s office Risk management, ESG, the Duty to Shareholders, and the Supreme Court MICHAEL P. AFFUSO, ESQ., PRESIDENT/CEO, NJBANKERS In recent years, Environmental, Social, and Governance (ESG) considerations have emerged as pivotal factors influencing the strategies and operations of businesses across various industries. In particular, the banking sector has witnessed a significant transformation, with ESG principles becoming part of decision-making processes. This shift was principally driven by regulatory action, with regulators having assumed a dual role of both regulating an industry, and attempting to channel the efforts of that industry into a lane which they deem beneficial. ESG advocates view banks as financial intermediaries and key contributors to sustainable development and societal well-being. As advocates have been appointed to top regulatory positions, ESG permeates the regulatory superstructure of financial services. For example, a recent Supreme Court case struck down a New York DFS rule focusing on reputational risk of institutions doing business with the NRA. In a 9-0 decision written by Justice Sotomayor, the court found that this type of regulatory action, though cloaked in risk management, actually had an illegal chilling effect on the First Amendment. Bankers are in the business of managing risks and serving the people and businesses in their marketplace. Assessing risks and balancing those risks is a key element in banking. One of the primary drivers behind the integration of ESG into the banking sector is the growing awareness of environmental risks. Community banks, especially, understand their local communities and are best suited to manage local environmental risks. Indeed, there is risk to lending in the Passaic River basin, Raritan River Basin, or the coastal and other littoral properties. Bankers routinely weigh these risks when lending money to borrowers, as do insurers. A risk based ESG model also calls for bankers to assess whether they should lend to the fossil fuel industry as a means of drying up sources of funding for a non-favored industry. In New Jersey, many people use fossil fuel to heat their homes and most use gasoline for locomotion. Under the guise of ESG, zealots want to dry up lending for home heating oil companies as well as to gasoline retailers, instead of allowing capital and lending markets to weigh the various risks in funding decisions. ESG policy creates situations where bankers will be forced to shift lending preferences toward the favored policy de jure. Some things to consider: oil and gas are bad and solar is good, but it is widely acknowledged that the fastest way to reduce carbon is to shift from coal to natural gas for electricity generation; solar is sustainable and ESG friendly, but little consideration is given to the degradation of the environment for sourcing the minerals for batteries or fabrication of the solar panels; wind is sustainable and ESG friendly, but the economics don’t work. Bankers will be whipsawed between whatever advocates deem is the best policy on a given day. While some may feel that this problem is not yet acute at community banks, like other targeted regulatory actions, this issue is likely to seep down into the community bank level in the future. ESG policies also push industries to shift focus from shareholders to “stakeholders” as defined by the regulatory superstructure and advocates. Banks are particularly committed to the communities in which they do business, but they also must balance this ethos against sustainability as a business. Sustainability in banking requires prudent lending and the ability to raise capital. Bankers must navigate the binary framework of environmentally friendly lending (good) and traditional lending (bad). While the social benefit to low interest lending to ESG friendly projects may be clear, the ability of the borrower to repay as well as the other costs to the institution must be balanced. It is unlikely that capital markets will look favorably on institutions that are over positioned in low profit endeavors. A healthy banking system, as well as a healthy economic system, requires investors to have faith in the institutions that they are investing in. A keystone of that faith are the fiduciary duties owed to shareholders. Cornell University Law School Legal Information Institute states: The duty of care is a fiduciary duty requiring directors and/or officers of a corporation to make decisions that pursue the corporation’s interests with reasonable diligence and prudence. This fiduciary duty is owed by directors and officers to the corporation, not the corporation’s stakeholders or broader society. While it is reasonable that financial institutions give attention to broader social constructs to ensure that acute stress is not visited upon them by regulators or customers, and thus harm shareholders, this cannot become the primary focus of any industry needing access to capital markets. Indeed, even BlackRock CEO Larry Fink, who stood at the vanguard of ESG, has voiced concerns that proposals were “over-reaching lacking economic merit” and “unlikely to help promote shareholder value.” The challenges to ESG principles are not only on the economics, they are also likely to reach the Supreme Court. Over the past several years, the Supreme Court has handed down landmark decisions in the May/June months. Recently, we have seen adjudication surrounding abortion rights, gun rights, affirmative action in universities, and the legality of the funding scheme of the CFPB. The court is poised to rule on a case which deals with Chevron deference, the doctrine of judicial deference given to administrative actions, holding that such judicial deference is appropriate where the agency’s answer was not unreasonable, so long as Congress had not spoken directly to the precise issue at question. Should the Court limit the scope of administrative action, it is likely that certain ESG rules promulgated by regulatory bodies will come into legal question. What should a banker do? Do what you are doing—do your best: know your customer and community, assess the risks and balance the risks. It is what you do and what you do best. 6 from the njbankers president’s office
politics and policy The Shadow of the 2024 Presidential Election BRITTANY WHEELER, VICE PRESIDENT/DIRECTOR OF GOVERNMENT AFFAIRS, NJBANKERS As the United States grapples with significant economic and social challenges, the halls of Congress echo with the reverberations of political deadlock. Federal legislation, once a beacon of hope for progress, now finds itself ensnared in the intricate web of partisan politics, with the looming specter of the 2024 presidential election casting a long shadow over Capitol Hill. November 5, 2024, cannot come soon enough. The paralysis gripping legislative efforts stems from the deeply polarized state of American politics. With a razor-thin majority in both chambers, lawmakers find themselves caught in a perpetual tug-of-war between Democrats and Republicans, each side fiercely guarding its ideological turf. This gridlock, exacerbated by the relentless pursuit of partisan advantage, has transformed the legislative process into a battleground, where compromise is viewed as a sign of weakness rather than statesmanship. The ugly dynamics of the 2024 presidential election further exacerbate this stalemate. As politicians jockey for position, every legislative maneuver is scrutinized through the lens of its potential impact on the electoral landscape. Democrats, wary of alienating their progressive base, push for ambitious reforms on issues ranging from climate change to healthcare, while Republicans, emboldened by their growing influence within the party, dig in their heels to thwart what they perceive as overreach. Amidst this political brinkmanship, the needs of the American people and business communities are relegated to the sidelines. Critical projects and policy decision languish in limbo, as lawmakers bicker over funding allocations. Efforts to address pressing social issues, such as police reform and immigration reform, stall as partisan bickering drowns out voices calling for meaningful dialogue and compromise. Meanwhile, the specter of economic uncertainty looms large, with crucial legislation to bolster small businesses and working families left in legislative purgatory. Basel II Endgame? 1071 Proposals? SAFER Banking? The consequences of this legislative stalemate are far-reaching and profound. Without meaningful action from Congress, the United States risks falling behind on the global stage, as other nations surge ahead with bold initiatives and innovative policies. Domestically, the fabric of society is fraying at the seams, as inequality deepens and social tensions simmer beneath the surface. The erosion of trust in government institutions only serves to further exacerbate these fissures, fueling a sense of disillusionment and disengagement among the electorate. Democrats and Republicans must set aside their differences and prioritize the common good over partisan gain. Compromise, once seen as a hallmark of effective governance, must once again become the guiding principle of legislative action. This will require a willingness to engage in genuine dialogue, to listen to opposing viewpoints with an open mind, and to seek common ground wherever possible. Furthermore, the influence of the 2024 presidential election must be tempered with a recognition of the urgent needs facing the nation. While electoral politics will always play a role in shaping legislative priorities, it cannot be allowed to overshadow the imperative of governance. Lawmakers must demonstrate the courage and leadership necessary to rise above the fray, to put the interests of the American people first, and to forge a path forward that reflects the values of democracy and pluralism. In the final analysis, the fate of federal legislation impacting the banking industry hangs in the balance, caught between the competing forces of partisanship and pragmatism. The road ahead will be fraught with challenges, but it is not insurmountable. By embracing the spirit of bipartisanship and reclaiming the lost art of compromise, lawmakers have the power to break the deadlock and restore faith in the promise of American democracy. In the words of President Lincoln—a house divided cannot stand. THE CONSEQUENCES OF THIS LEGISLATIVE STALEMATE ARE FAR-REACHING AND PROFOUND. WITHOUT MEANINGFUL ACTION FROM CONGRESS, THE UNITED STATES RISKS FALLING BEHIND ON THE GLOBAL STAGE, AS OTHER NATIONS SURGE AHEAD WITH BOLD INITIATIVES AND INNOVATIVE POLICIES. DOMESTICALLY, THE FABRIC OF SOCIETY IS FRAYING AT THE SEAMS, AS INEQUALITY DEEPENS AND SOCIAL TENSIONS SIMMER BENEATH THE SURFACE. THE EROSION OF TRUST IN GOVERNMENT INSTITUTIONS ONLY SERVES TO FURTHER EXACERBATE THESE FISSURES, FUELING A SENSE OF DISILLUSIONMENT AND DISENGAGEMENT AMONG THE ELECTORATE. 8 Politics and Policy
NJBANKERS 1 MILLION MEALS CAMPAIGN BY THE NUMBERS ABOUT THE 1 MILLION MEALS CAMPAIGN With the support of our members, together we can become champions for those facing hunger across New Jersey. NJBankers has partnered with the Community FoodBank of New Jersey (CFBNJ) to donate one million meals to families in need by 2027. WAYS TO SUPPORT THE CAMPAIGN DONATION PACKAGES By becoming a Fighting Hunger Hero or Fighting Hunger Ally, you can help us meet our goal of raising $334,000 to provide a total of one million meals to feed hungry seniors, parents and children across the state. These donation packages showcase your commitment to fighting hunger and will have a great impact toward helping us meet our goal. For more information on becoming a Fighting Hunger Hero or Fighting Hunger Ally, please contact John Mangini at 908-324-4026 or jmangini@njbankers.com. INDIVIDUAL DONATIONS CFBNJ estimates that $1 can provide three meals to NJ residents in need. Donations of any amount—no matter how large or small—will go a long way in the fight against hunger in our state. You can make an individual donation to the campaign at https://give.cfbnj.org/njbankers, or by scanning the QR code. THANK YOU TO OUR SUPPORTERS Fighting Hunger Hero Fighting Hunger Allies 494,205 Meals or $164,735 raised to date through the generous support of our members. $1,258 Average donation made by our campaign supporters. 49% Of the way to our goal of raising one million meals to assist the over 800,000 NJ residents facing hunger. 131 Donations made since the campaign launched in 2022. 6,496 Volunteer hours spent by our members at CFBNJ in support of the 1 Million Meals Campaign. 9 1 million meals campaign
COMMUNITY DEVELOPMENT LOANS: ARE THEY HERE? ARE THEY THERE? COULD THEY BE ANYWHERE? STEFFANI JENKINS, CRA LIAISON, ICBA CRA SOLUTIONS ARE THEY UNDER A ROCK? ARE THEY IN A SOCK? COULD THEY BE AD HOC? CAPTURING COMMUNITY DEVELOPMENT LOANS CAN BE JUST AS EASY AS READING DR. SEUSS OR THEY CAN BE JUST AS HARD AS CAPTURING A MOOSE. OK, THAT’S A BAD RHYME BUT YOU GET THE IDEA! THE KEY IS KNOWING WHAT A COMMUNITY DEVELOPMENT LOAN IS, HOW TO FIND THEM, WHO REPORTS THEM, AND WHY THEY ARE REPORTED. What is a Community Development Loan (“CD Loan”)? The primary purpose of a CD Loan must be for affordable housing, revitalization, and stabilization of a LMI area or to promote economic development/create jobs for low-to-moderate-income people. A CD loan cannot already be reported as a small business or small farm loan. It also cannot already be reported as a HMDA loan, unless the loan is for the purpose of multi-family affordable housing. This is the only instance when the loan can be reported under both HMDA and as a CD loan. If CRA qualification is based on job creation, gross annual revenue size eligibility requirements must be met based on the Small Business Administration’s guidelines found here: https://www.sba.gov/document/ support-table-size-standards. Under the current CRA rule, the loan must also benefit your bank’s assessment area or a broader, statewide or regional area that includes the bank’s assessment area to qualify for CRA credit. 10 feature
What are some examples of CD Loans? Loans to finance multi- family affordable housing or made in conjunction with the SBA’s 504 loan program where the loans are greater than $1 million are eligible for CRA credit. Loans made to minority and women-owned financial institutions that have a community development purpose are also eligible for CRA credit. Loans made to local or state governments that have a community development purpose are also eligible. How do you locate CD Loans? Finding CD Loans can be a daunting task. Because there are so many ways a loan might qualify as a CD Loan, it’s difficult to automate their capture like small business or HMDA loans. Your loan officers should be regularly trained on CD Loan qualification. The bank’s CRA Officer should also consider attending loan committee meetings to determine if any loans in their pipeline might qualify. Another way to capture these types of loans is to research all commercial purpose loans over $1 million. Though a CD Loan does not have to be over $1 million to qualify for CRA credit, this would help identify those loans already captured as small business loans and therefore, not eligible as CD loans. You can also research loans to non-profit organizations to determine if they might have a community development purpose. Who reports CD loans and why? Under the current CRA rule, large banks must report their CD loans. Small and intermediate banks may report CD loans, but it is not required. A small bank that chooses to report their CD loans, however, may help demonstrate to their regulator their bank’s commitment to meeting the credit needs of their communities as well as prepare for future growth of the bank. Because CD Loans are included in a bank’s lending test, these loans can have a positive effect on the lending test and can sometimes help mitigate deficiencies in other areas of lending. Can Dr. Seuss help me? Though Dr. Seuss is a master storyteller, he cannot help you with your community development loan “story.” When documenting these loans, tell your bank’s story. Describe how the loan qualifies as “community development.” Specifically describe how the loan benefitted the community or individuals within the community. When applicable, take photos of the project and include them in your documentation for the examiners. Sometimes pictures really are worth a thousand words. Can you help me? When researching community development loans, contact me with your questions. I’m only a stone’s throw. I won’t say no! Another bad rhyme, but you get the idea! Steffani Jenkins Steffani Jenkins is the CRA Liaison for ICBA CRA Solutions. She has over 20 years of experience in CRA, serving in multiple capacities, including Community Development Manager, CRA Analyst, and Deputy CRA Officer. feature
NJBankers emerging leaders network trivia night Our Emerging Leaders Network got together for a night of craft beers and trivia during a recent networking event. For more information on joining the Emerging Leaders Network, contact Jessica Jakobson, jjakobson@njbankers.com. Emerging Leaders racked their brains and enjoyed some brews at our trivia night. 12 emerging leaders network trivia night
welcome new associate members NJBankers would like to welcome the newest Associate Members to the Association. ALKAMI TECHNOLOGY A leading cloud-based digital banking solutions provider for financial institutions in the U.S. that enables clients to grow confidently, adapt quickly, and build thriving digital communities. Contact: Lizzy Szabo, Sales Executive lizzy.szabo@alkami.com ALL COVERED Empowering financial institutions with cybersecurity, compliance, and IT solutions to navigate the ever-changing digital landscape securely and to achieve business goals through innovation and expertise. Contact: Rick Frisenda, ITSC Finance rfrisenda@allcovered.com ASPIRE SYSTEM DIGITAL TRANSFORMATION INC. We have successfully implemented innovative technologies for various financial institutions, enhancing operational efficiency, improving customer experience, and ensuring compliance with regulatory standards. Contact: Bruce Goodrich, Regional Head BFS bruce.goodrich@aspiresys.com THE CHANGE COMPANY CDFI LLC Enables community banks and impact investors to easily search for and buy prime impact loans, shop CRA-eligible loans in their assessment areas, and build their balance sheet. Contact: Ryan Collins, Director, Business Development rcollins@changemtg.com CORNERSTONE ADVISORS OF ARIZONA Elevating and empowering banks and fintech through data-driven solutions for peak performance. Contact: Stacey Bryant, Director, Business Development sbryant@crnrstone.com FINRAY IO, INC. Finray is a financial platform engineered to optimize corporate financial operations and enhance the efficiency of finance. Contact: Victor Perretti, Senior Advisor rick.perretti@finray.io JEFFERSON WELLS Professional services firm delivering solutions to solve emerging challenges in Internal Audit, Risk & Compliance, Finance & Accounting, and Tax. Contact: Brian Reid, Director Client Strategy & Business Development brian.reid@jeffersonwells.com SILLS CUMMIS & GROSS Full service commercial law firm including commercial lending transactions and related litigation. Contact: Jason Sobel, Member jsobel@sillscummis.com WHITE WHALE SOLUTIONS As seasoned bank marketing experts, we pride ourselves on delivering measurable results, including increased deposits, and strengthened relationships. We are proud to be a SOCII/Type 2 Data Compliant, Women-Owned Business Enterprise. Contact: Isabella Ponticello, Account & Sales Development Manager isabella@whitewhalesolutions.com The Emerging Leaders Network brings together bankers and associate members, who are under 40, to network and share ideas. Our trivia night winners—Peapack-Gladstone Bank. 13 emerging leaders network trivia night
The Role of AI in Compliance GOOD DAY MY FELLOW COMPLIANCE PEOPLE. I WAS ASKED IF I WOULD LIKE TO SUBMIT AN ARTICLE ON COMPLIANCE FOR THE NJBANKERS QUARTERLY NEWSLETTER. AS IF WE ARE NOT BUSY ENOUGH, BUT LIKE MANY OF US, I HAVE ISSUES SAYING NO TO ANYTHING OR ANYBODY. SO HERE I AM TRYING TO DECIDE WHAT I WOULD WRITE ABOUT THAT WE HAVE NOT BEEN BOMBARDED WITH OVER THE YEARS. DON’T WE COMPLIANCE FOLK HAVE OUR NOSES BURIED IN COMPLIANCE REGULATIONS EACH AND EVERY DAY? SO, I DECIDED TO CHOOSE SOMETHING I KNOW LITTLE ABOUT BUT IS PROMINENT IN OUR DAILY CONVERSATIONS, ARTIFICIAL INTELLIGENCE (AI). NOW, AS AN OLD GUY THAT HAS TROUBLE WITH COMPUTERS, AS IT IS, HERE I AM RESEARCHING AND WRITING ON AI. I THOUGHT MAYBE I WOULD LEARN SOMETHING AND PERHAPS YOU MAY BENEFIT AS WELL. NOT TO MENTION THE FACT THAT MY CEO WANTS AN AI POLICY WRITTEN AND IN PLACE. 14 feature
One of the first things I learned was, AI is not new; it has been around for years. You may think AI is a recent development in technology, like in the last several years, right? False, the basis of AI began in the early 1900s but great strides have been made from the 1950s. We have been using AI for quite some time without even knowing it. Have you ever had that feeling that Facebook, Instagram, Alexa, Microsoft, Amazon, and many other programs are reading our minds, or listening to our conversations? Like when we start writing a Google question and Google finishes the question. Or message a friend about something you want to buy or are looking at on Amazon and then suddenly you start getting ads for that product, yup, Artificial Intelligence. So, what is AI? As defined in Executive Order, 14110, Safe, Secure and Trustworthy Development and Use of Artificial Intelligence, “artificial intelligence” or “AI” is: a machine-based system that can, for a given set of human-defined objectives, make predictions, recommendations, or decisions influencing real or virtual environments. Artificial intelligence systems use machine and human based inputs to perceive real and virtual environments; abstract such perceptions into models through analysis in an automated manner; and use model inference to formulate options for information or action. AI is prominent today and in use at many financial service providers. It is estimated that 32% of financial service providers are currently using AI and that is expected to grow to more than half the financial service providers by this year. Most of the AI usage today is centered around customer service. AI automates the routine customer service tasks including account balance inquiries, password resets, verifying customers identities, opening accounts, etc., which frees up customer service reps to focus on selling products and services. In my career, I have used the following statement all too often when speaking with Senior Management; “Compliance runs the Bank.” AI is going to be an invaluable tool for all Compliance Officers, BSA Officers, Department Managers and the like as we get buried deeper and deeper in regulations. Compliance gets more sophisticated every day and AI is a big part of the programs that help us determine compliance with money laundering programs, monitoring computer activity for cyber threats that get stopped at the firewalls, protection of our customer accounts from frauds by restricting suspicious transactions, and many other threats. These items are just the tip of what we are looking at. The days of reviewing reports and computer screens of information generated by our support systems, need to be enhanced and Artificial Intelligence is the enhancement that is going to help us stay in compliance with all the regulatory requirements that are here and coming. Regulations get outdated. Congress and regulators are re-writing them. How are we going to keep up? My greatest concern has always been having something right in front of my face and not seeing it. Artificial Intelligence is the new set of glasses that will help us see what we could not see before. Ralph Bonadies Ralph Bonadies is SVP/Chief Risk Officer of Parke Bank. THE DAYS OF REVIEWING REPORTS AND COMPUTER SCREENS OF INFORMATION GENERATED BY OUR SUPPORT SYSTEMS, NEED TO BE ENHANCED AND ARTIFICIAL INTELLIGENCE IS THE ENHANCEMENT THAT IS GOING TO HELP US STAY IN COMPLIANCE. REGULATIONS GET OUTDATED. CONGRESS AND REGULATORS ARE RE-WRITING THEM. HOW ARE WE GOING TO KEEP UP? 15 feature
Allied Solutions is one of the largest providers of insurance, lending, and marketing products to financial institutions in the U.S. Allied Solutions maintains over 15 regional offices and service centers around the country and is a subsidiary of Securian Financial Group, Inc. Products and Services 1. New Look Lending - Second Lien Loan Purchase Opportunity 2. Deep Future Analytics (DFA) - Predictive and Actionable Analytics 3. Blue Water Technology - Buying and Selling Mortgage Serving Rights 4. interface.ai - Call Center Automation Learn more at www.alliedsolutions.net Aaron Heckert Regional Vice President, Eastern Region aaron.heckert@alliedsolutions.net Fintel Connect provides a comprehensive affiliate and influencer marketing solution exclusively tailored to the financial industry. This means you’ll have access to specialized technology, a strong network of industry-specific channels, and a team of experts dedicated to driving the growth of your program. Learn more at www.fintelconnect.com/brands Julia Wild Director of Strategic Partnerships julia@fintelconnect.com Bank Performance Report is a proven strategic planning tool that offers a wealth of benchmarking data to help your bank improve its overall performance. The report is available for purchase through your membership with NJBankers. The annual subscription fee includes four (4) quarters, with your first report being the next quarter published upon subscribing. Selina Parrish Director of Membership, Kentucky Bankers Association sparrish@kybanks.com Compliance Alliance is the only banking industry compliance resource that is owned, operated, and managed by State Banking Associations. Based on the needs of community bankers, Compliance Alliance provides its members an ever-increasing set of bank compliance tools and services that help them stay up-to-date with consumer and regulatory requirements. Learn more at www.bankersalliance.org Brittney Stacey Director of Customer Success brittney@compliancealliance.com NEW PROVIDER 16 Meet some of our endorsed and select providers
ICBA CRA Solutions provides CRA Education & Training, CRA Support Services, the CRA Collaborative Peer Group, and CRA qualified loans, investments, and grants. Since our inception in 2000, we have helped banks across the country earn meaningful CRA credit through elder financial abuse prevention programs— all with flexible funding options to make it simple for banks to get involved. Learn more at www.icbacrasolutions.org Kristine LaVigna Business Development Manager kristine.lavigna@icba.org Steffani Jenkins CRA Liaison and Business Development Manager steffani.jenkins@icba.org KeyState Renewables assists banks and other institutional investors with finding, underwriting, and managing solar investment tax credit investments through its SOLCAP solar tax credit fund platform. In 2019, KeyState Renewables partnered with Corner Power to launch SOLCAP. Learn more at www.key-state.com Tim Swiat Regional Business Development Leader tswiat@key-state.com NEW PROVIDER 17 meet some of our endorsed and select providers
NJBankers 118th Annual Conference and Exhibit Hall featured three days of education, networking, and some time in the sand THE NJBANKERS 118TH ANNUAL CONFERENCE AND EXHIBIT HALL, DREW MORE THAN 350 ATTENDEES WHO SPENT THREE DAYS PARTICIPATING IN EDUCATIONAL PROGRAMMING LED BY SOME OF TODAY’S MOST INFLUENTIAL SPEAKERS, AN EXHIBIT HALL SHOWCASING THE LATEST PRODUCTS AND SERVICES ON THE MARKET, AND NETWORKING OPPORTUNITIES. THIS IMPORTANT EVENT SHOWCASED THE STRENGTH AND RESILIENCE OF THE NJ BANKING INDUSTRY. CHECK OUT THESE PHOTO HIGHLIGHTS OF THE DAY! NJBankers President & CEO, Mike Affuso, kicked off the event at the Ritz Carlton in Naples, FL. 18 annual conference and exhibit hall recap
Keynote speaker, Paul Argenti, Professor of Corporate Communications, The Tuck School of Business, Dartmouth College, lays out when and how companies should take a stand on social issues. Dr. Mark Esper, the 27th Secretary of Defense, sat down with NJBankers President & CEO, Mike Affuso, to discuss some of the top foreign policy issues facing our country today. 19 annual conference and exhibit hall recap
Conference attendees got to spend some time in the Florida sunshine, connect with old friends, and make some new ones at our Beach Party. NJBankers President & CEO, Mike Affuso, presents outgoing NJBankers Chair, Steven Klein, with a resolution recognizing the many contributions he made during his tenure. NJBankers’ outgoing Chair, Steven M. Klein, Chair, President & CEO of Northfield Bank, delivers his outgoing remarks before swearing in a new slate of officers. Over 30 exhibitors were on hand to discuss and showcase the latest products and services for the banking industry. 20 annual conference and exhibit hall recap
NJBankers incoming board officers were sworn in during the event. From L to R: Second Vice Chair, Elizabeth Magennis, President, ConnectOne Bank; First Vice Chair, Craig L. Montanaro, President & CEO, Kearny Bank; Incoming Chair, Patrick L. Ryan, President & CEO, First Bank; and Outgoing Chair, Steven M. Klein, Chair, President & CEO, Northfield Bank. Incoming NJBankers Chair, Patrick L. Ryan, President & CEO, First Bank, delivers his vision for the future of the association. Select Associate Members had the exclusive opportunity to discuss their products and services with a small group of bank CEOs and Senior Executives during our Speed Networking luncheon. 21 annual conference and exhibit hall recap
Dr. Kelly Monahan, Managing Director, Upwork, Future of Work Research Institute discusses the new realities of the workplace and the leadership insights needed to navigate it. The conference exhibition hall is all about making connections. 22 annual conference and exhibit hall recap
As part of the 118th Annual Conference and Exhibit Hall NJBankers recognized milestones achieved by our members over the past year. AWARD RECIPIENTS INCLUDED: The EXCELLENCE IN BANKING AWARD is bestowed upon members who have demonstrated long-term outstanding service to the NJ banking industry. This year’s winners were, Patrick M. Ryan, Chair, First Bank and Donald D. Somma, President & CEO, First Hope Bank. The COMMUNITY SERVICE AWARDS recognized the amazing work our banks do in supporting the communities they serve. A new ASSOCIATE MEMBER ANNIVERSARY AWARD was presented to some of our Associate Members celebrating milestone anniversaries with the association. Our YEARS OF SERVICE AWARDS recognized members celebrating milestone anniversaries at their respective banks. Years of Service award recipients from L to R: Thomas Allen, Columbia Bank; David Hemple, Century Savings Bank; Christopher Martin, Provident Bank; Jose Guerrero, Spencer Savings Bank; Maria Mayshura, First Bank; Donald Mindiak, First Commerce Bank; Robert Rey, NVE Bank; Kenneth Totten, United Roosevelt Savings Bank; Neil Blakeman, Century Savings Bank. Donald D. Somma receives the Excellence in Banking Award (Patrick M. Ryan will be recognized during September’s Banking on the Future event). Community Service Award winners from L to R: Blue Foundry Bank, Columbia Bank, First Bank, Kearny Bank, Lakeland Bank, Lusitania Savings Bank, Valley Bank, Northfield Bank, Provident Bank, Peapack-Gladstone Bank. Recipients of our Associate Member Anniversary Award included from L to R: Christina Shea, KPMG, celebrating 40 years; Rob Fornes, Piper Sandler, celebrating 35 years; Mary Kay Roberts, Riker Danzig, celebrating 25 years; and Ned Hogan, Stevens & Lee, celebrating 25 years. 23 annual conference and exhibit hall recap
Building Tomorrow’s Bank Begins with Building Talent CONNECTONE BANK WAS BUILT ON THE PREMISE THAT PUTTING PEOPLE FIRST IS A BETTER WAY TO DO BUSINESS. FOUNDED IN 2005 BY FRANK SORRENTINO III, A THIRD-GENERATION HOME BUILDER, THE BANK’S ENTREPRENEURIAL SPIRIT AND PEOPLE-FIRST CULTURE GREW THE BANK ACROSS NEW JERSEY, INTO NEW YORK, AND MOST RECENTLY SOUTH FLORIDA IN JUST UNDER 20 YEARS. Since our founding, ConnectOne has been heavily invested in our culture and employee experience, and, as a growth company, growing our talent is always top of mind for the executive team. In the past few years, we’ve experienced significant shifts in how we run our institutions, the way our clients do business, and how our workforce operates. The 2020 pandemic set off a series of changes in our businesses. In the same way we evolved our engagement with our clients, we evolved our talent-centric environment and maintained our commitment to our culture, ensuring our employees feel valued and empowered to deliver exceptional services and solutions to the clients they serve. Ultimately, we knew that as we looked to build ConnectOne Bank for the future, it was just as crucial to make the same investments in our people. Over the past few years, the bank has made strides to build an exceptional and hybrid workplace culture that maintains the same people-first values the bank was founded on, while continuing to modernize and invest in digital innovation. Beginning from a team member’s first day, employees are immersed in an onboarding experience that emphasizes the company’s culture and mission. ConnectOne Bank’s goal is to ensure employees understand both the way the bank operates, rules of engagement, and how the client base is served, operational intricacies, and the client base they serve. A distinctive aspect of this approach is having the Human Resources function report directly to our Chief Culture, Experience & DEI Officer. This alignment places company culture at the heart of all HR initiatives, ensuring scalability and efficiency as the bank grows. This strategy has strengthened operations, streamlined processes, and fostered a more culture-centric environment. As ConnectOne Bank is committed to investing in its people, it understands that this goes beyond their current capabilities. The bank focuses on developing managerial skills, strategic thinking, and problem-solving abilities through its Learning & Development team. By honing in on individual interests and goals, ConnectOne Bank creates an environment where team members feel valued and can pursue their professional passions. Through a suite of progressive talent development programs, ConnectOne Bank ensures that employees are equipped with the skills and knowledge necessary to meet both immediate and future challenges. This commitment to continuous learning and professional development underscores the bank’s belief in the potential of its people and their critical role in ongoing success. Another important part of ConnectOne Bank’s strategy is the use of the Predictive Index, a tool that enhances understanding of team dynamics and individual strengths. This tool facilitates optimal role alignment, fostering an environment where collaboration and efficiency are integral to daily operations. By leaning into team strengths, ConnectOne Bank ensures cohesive, engaged, and empowered teams, contributing to a positive and inclusive workplace environment. The insights from the Predictive Index also support the recruiting function, helping to create well-rounded teams by filling gaps in abilities or traits. The past few years have taught us that the banking industry is resilient and continues to evolve and adapt with changes in the environment and economy. By embracing a people- first culture, ConnectOne Bank has been able to evolve and modernize in order to equip our talent for the future, despite what comes. We’ve learned that change is unpredictable, but investing in our talent’s ability to lead and adapt allows our team to navigate change while maintaining the foundations that served us when the bank was founded. THE PAST FEW YEARS HAVE TAUGHT US THAT THE BANKING INDUSTRY IS RESILIENT AND CONTINUES TO EVOLVE AND ADAPT WITH CHANGES IN THE ENVIRONMENT AND ECONOMY. BY EMBRACING A PEOPLE-FIRST CULTURE, CONNECTONE BANK HAS BEEN ABLE TO EVOLVE AND MODERNIZE IN ORDER TO EQUIP OUR TALENT FOR THE FUTURE, DESPITE WHAT COMES. 24 Behind the teller line
1 2 3 4 5 6 7 8 9 10 11 12 IF YOU COULD SIT DOWN WITH YOUR BANK’S CEO AND ASK QUESTIONS ABOUT THEIR CAREER JOURNEY, THOUGHTS ABOUT THE BANKING INDUSTRY, OR EVEN WHAT THEY DO IN THEIR SPARE TIME, WHAT WOULD YOU ASK? IN THIS FEATURE, NEW JERSEY BANKER WILL ASK THE QUESTIONS FOR YOU! WE ASKED PATRICK L. RYAN, CHAIR, PRESIDENT/CEO, FIRST BANK, SOME QUESTIONS. THANKS FOR SITTING DOWN WITH US PAT! How did you get started in banking? My father, Patrick M. Ryan is a career banker, so I was exposed to the field at a young age. When in college, I worked in several different departments at Albany Savings Bank—working as a teller, an IRS specialist, and a merger transition support person. At 22, I joined the investment banking firm of Goldman Sachs— working as a Financial Institutions analyst in the Investment Banking group in New York City and in London. I became a “career” community banker in 2005 when I joined my dad at Yardville National Bank before starting First Bank three years later. What advice do you have for young bankers starting their career? Raise your hand. Most banks have more work that needs to be done and not enough “volunteers” to push new projects forward. If you’re ambitious—raise your hand and ask for more. You’ll get the opportunity to learn a lot and advance quickly. Why do you feel it’s important for banks like First Bank to be associated with NJBankers? Community banks are the “low man on the totem pole” from a size perspective so we need a voice to help protect us against legal and regulatory overreach. What trait does the modern banker need to have to be successful? Inquisitive and flexible. The world is changing quickly, and you want to be thinking about where the puck is going, not where it has been. What are you most proud of regarding your leadership at First Bank? The positive impact we’ve had on the lives of so many members of our community—from employees, to customers, to shareholders. Over the course of your career, what is the biggest shift you’ve seen in banking? The constant churn of added regulations. Banks need to keep getting bigger to keep up with the demands of the regulations and new rules that keep getting created. What is the difference between being a boss and being a leader? A boss is in charge because of a pre-ordained hierarchy. Leadership is earned. Bosses create order takers who do what is asked, and nothing more. Leaders create inspired action where people go above and beyond to achieve results. What piece of advice do you wish you had known when you started your career? Strike the right balance between ambition and enjoying the moment. Both are important. What’s the best advice you ever received? Everyone needs a place to go. Meaning: get up every day and get moving with a purpose. What is something people don’t know about you? I almost pursued a career in politics. What helps you stay objective? I instinctively try to look at issues from multiple angles. I also get worried about “conventional wisdom.” I think it stems from being naturally inquisitive. What are three things left on your bucket list? Write a book of poems, hike the 46 Adirondack high peaks, ice skate the Dutch canals. 25 questions and answers with featured bankers
Kathy Durante Executive Director, OceanFirst Foundation Julie Holland Executive Director, Columbia Bank Foundation In the Spotlight: PHILANTHROPIC COMMITTEE Q: What do you see as the primary responsibilities of a foundation head, and how do you prioritize them? DURANTE: To support our Board of Directors in carrying out the mission of our Foundation which is to empower nonprofits to think bigger, solve more problems, and make life better in the neighborhoods served by OceanFirst Bank. To do so, our team partners with local community organizations and schools, providing the resources and expertise to help put great ideas into action. My role day-to-day is to ensure that our planning, grantmaking, volunteer, community engagement, learning, and marketing initiatives are best in class. HOLLAND: As the Executive Director of the Columbia Bank Foundation, it is necessary to prioritize our mission of commitment to serving the needs of our local communities. As we concentrate on fulfilling our mission, I prioritize our responsibilities with yearly goals that measure the impact our support provides. Specifically, the primary responsibilities as the head of the Foundation include: ɨ Identify support funding for community- based nonprofits, civic, and business charitable organizations and their initiatives that meet the necessary Foundation criteria. ɨ Ensure that funds disbursed to nonprofits and organizations are used correctly to provide meaningful change in the community. ɨ Act as the liaison between nonprofits and the Foundation Board, providing insights to stakeholders regarding how grants will be used to positively influence the community. ɨ Encourage ongoing collaboration with our nonprofit partners to determine solutions that support programs that fulfill their mission. ɨ Establish strategic plans to disburse appropriate charitable funds throughout the year with discernment on what opportunities will provide significant impact to the community. Serve as a positive influence and inspiration to Columbia Bank customers and employees through demonstration of commitment to volunteer and charitable donations. Q: How do you approach strategic planning and goal setting for a foundation? DURANTE: In prior years, we’ve utilized strategic planning consultants to provide guidance and evaluation. However, in more recent years, our Board continually assesses our impact throughout the year with quarterly reporting in key areas. The staff team at OceanFirst Foundation also works closely with the Board and I to set goals and effectively execute them. HOLLAND: As one of the largest private foundations in New Jersey, the Columbia Bank Foundation Board annually constructs a budget that determines anticipated disbursements based on our yearly goal of impact and historical data of contributions. Our team works proactively to plan specified funds that benefit low-and-moderate income individuals relating to grants, sponsorships, our employee sponsored giving program, and direct charitable contributions. For each of our programs, we create allocation goals that correlate to one of our seven major focus areas of support; affordable housing, community investment and economic development, environmental sustainability, food insecurity, health and human services, and the arts. During our support requests review, we strategically select organizations whose mission and objective are consistent with the causes we support within the communities we serve. Q: How do you assess the effectiveness and impact of philanthropic investments or grants? DURANTE: It varies depending on the specific grant program, but we try to keep it as simple as possible to ensure that our partners are not overburdened by process and paperwork. We offer most grants as General Operating FIRST AND FOREMOST, YOU LISTEN TO THOSE DOING HARD WORK IN THE COMMUNITY. THAT MIGHT HAPPEN AT A VISIT TO THEIR ORGANIZATION TO SEE THE IMPACT FIRST-HAND OR WHEN WE MEET WITH THEIR TEAM MEMBERS AT COMMUNITY EVENTS OR SPECIAL PROJECTS. J KATHY DURANTE, EXECUTIVE DIRECTOR, OCEANFIRST FOUNDATION 26 In the spotlight: philanthropic Committee
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