Greetings Iowa Independent Bankers

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Greetings Iowa Independent Bankers

• Vaughn Noring
• Bank Bureau Chief

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Entities Regulated

• Bank Bureau
• 342 state-chartered banks
• 277 bank holding companies
• 1 trust company
• Finance Bureau
• 382 regulated loan licensees
• 120 industrial loan licensees
• 27 debt management companies
• 250 delayed deposit companies
• 694 mortgage bankers/brokers/registrants
• 34 money transmitters
• 3,790 mortgage bank/broker loan originator
  registrants
• Professional Licensing
• Became Bureau of Banking Division effective July
  1, 2006

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Professional Licensing Joins IDOB

• Purpose Coordinate the administrative support
  for the following seven professional licensing
  boards
• Accountants - 11,739 licensees
• Architects - 2,135 licensees
• Engineers and Land Surveyors - 6,750 licensees
• Landscape Architects - 234 licensees
• Real Estate Sales and Brokers - 12,400 licensees
• Real Estate Appraisers - 1,163 licensees
• Interior Design - new board so number of
  licensees is still unknown
• Banking Division budget will be completely
  separate from the Professional Licensing
• Will remain at their current location in Ankeny
• The bureau currently has 13.5 employees

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When will the wheels fall off the economy?
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Iowas rank 36 (rank last year was 33) Iowas
Pretax ROA 1.27 (down from 1.40 yr earlier)
FDIC Summer 2006 State Profile
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Iowas rank 46 (rank last year was 46) Iowas
NIM 3.63 (down from 3.73 yr earlier)
FDIC Summer 2006 State Profile
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Iowas rank 41 (rank last year was 41) Iowas
Noncore Funding to Assets 18.24 (up from 15.94
year earlier)
FDIC Summer 2006 State Profile
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Iowas rank 20 (rank last year was 32) Iowas
Noncurrent Loans to Total Loans .42 (up from
.36 yr earlier)
FDIC Summer 2006 State Profile
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Iowas rank 34 (rank last year was 42) Iowas
Past-Due CRE Loans .34 (up from .16 year
earlier)
FDIC Summer 2006 State Profile
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Iowas rank 20 (rank last year was 19) Iowas
Past-Due RRE Loans 1.24 (up from 1.23 year
earlier)
FDIC Summer 2006 State Profile
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FDIC Summer 2006 State Profile
Iowas rank 44 (rank last year was 44) Iowas
CRE Loans to Tier 1 103.27 (up from 92.86 year
earlier)
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Other Positives for Iowa

• Job Growth is stronger this year
• Low unemployment
• Bankruptcies are down
• Strong land values

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Number of Iowa BanksState National Banks
Number of Banks
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Things Arent Always As They Appear
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Iowa Bank Office Institution TrendsAs of June
30
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New Banks and OfficesSince June 30, 2005

• 1 New Charter
• 49 New Offices

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Iowas Demographics Continue to be an Issue for
Community Bankers in Iowa
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Aging Population
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2006 Legislation

• Effective July 1, 2006 CEOs sent a letter
  summarizing changes and also posted on our
  website
• HF 2587 Some of the key provisions
• No longer need to publish Call Reports
• Increased ability to regulate BHCs and its DOs
• Increase penalties from 100/day to 1000/day
• Repealed 524.1803 which required a BHC wanting to
  acquire shares of a bank to extend the same offer
  to all outstanding shares of the bank not
  already owned by the holding company
• ILCs chartered after July 1 cant be
  established, owned by, or affiliated with
  entities engaged in commercial activities
• Prohibits out-of-state ILCs from branching into
  IA or acquiring control of an Iowa ILC

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2006 Legislation - continued

• SF 2275 -Debt Cancellation Agreements
• State chartered banks can offer voluntary debt
  cancellation coverage to consumers
• Must include cost in the amount financed
• Cost does not have to be included in finance
  charge but Fed regs under TILA must still be
  followed
• SF 2262 Ag loans 5yrs in length can charge
  prepayment penalty
• HF 537 Permits banks to use CDRS program with
  their public funds
• CDRS funds NOT included for pledging collateral
• CDRS funds ARE included for calculating sinking
  fund assessment

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Mobile Offices, Courier Services, and Convenience
Offices

• Administrative Rules New 187 IAC 2.17
• Application is available on IDOB website
• Requires board of directors of banks operating
  one of these types of offices to adopt policies
  governing the operation
• Rules were effective May 3

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Proposed Lending Limit Rule

• Covered at the Day with Superintendent Banker
  Group Meetings
• Goal was to clarify corporate group provision
• Drew quite a few comments from the industry
• IBA is working with a group of bankers and plan
  to have a proposal for us to look at by this
  fall.
• Any proposed Rule change will be put out for
  comment before adopting

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Deadline for Internet Banking Authentication Is
Approaching

• FFIEC guidance entitled Authentication in an
  Internet Banking Environment
• Published October 12, 2005 adherence expected by
  year-end 2006
• Issued by FFIEC (FDIC, OCC, OTS, Fed, NCUA)
• FDIC FIL-103-2005

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Dont let the good times catch us napping . . .
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Properly Assess Your Risks
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Dont take unnecessary risks
Electric Drill
Metal ladder
Bare Feet
Water

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Dont Let Your Customers Get Overextended
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Apply the brakes before small problems explode
into large problems . . .
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Stay abreast of technological advancesthe old
way isnt necessarily the best way
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• www.idob.state.ia.us

Thanks for inviting us!