Visit us online: Website | NCBA LinkedIn | NCEL LinkedIn | Instagram Fed Financial Stability Report The banking system over the past few months has remained sound and resilient, with risk-based capital ratios well above regulatory requirements, the Federal Reserve concluded in the first of its two financial stability reports for 2024. While the Fed found the overall banking system sound, it noted that fair value losses on fixed-rate assets remained sizable for some banks, and some banks have concentrated exposures to loans backed by commercial real estate. "[I]nterest expenses increased somewhat faster than interest income, reflecting a higher share of interest-bearing deposits on banks’ balance sheets and somewhat higher deposit rates. As a result, net interest margins, which measure banks’ yield on their interest-earning assets after netting out interest expenses, declined a notch in the aggregate in 2023.” Branch Manager Bootcamp Next Session: April 29, 2024 Fair Lending and Community Reinvestment Act (CRA) Training May 10, 2024 Virtual Compliance School (Hosted by NCBA and VBA) Lending Track: May 21, May 23, May 28, May 29, May 31 Deposits Track: June 10, June 12 New FLSA Overtime Exemption Regulations - Required Action Items May 30, 2024 Bankers in Schools | Volunteer Sign-Ups Extended to Friday, April 26 We urgently need your expertise and passion! We are still seeking volunteers for this year's Bankers in Schools program, taking place from May 6-10, and sign-ups have been extended to Friday, April 26. Bankers in Schools is a unique opportunity for you to impact our community and share valuable financial skills with the next generation. Volunteers will teach a 45-minute lesson on budgeting using a specially tailored curriculum created by the NC Emerging Leaders.  Sign up to visit a North Carolina high school in your area! About Bankers in Schools   Sign Up by Friday, April 26   Federal Legislative & Regulatory Update Final Rule on Overtime Eligibility The Department of Labor has issued a final rule that would significantly increase the number of employees who are subject to the Fair Labor Standards Act’s overtime and minimum wage requirements. The salary level under the rule will increase to $43,888 as of July 1, and then to $58,656 on Jan. 1, 2025. The rule also requires DOL to update the salary level automatically every three years using the methodology in the rule. For employees whose salary falls above the salary level, the employee may qualify for exempt status if the employee satisfies the duties test, which the final rule did not change. In addition, the rule increases to $132,964 on July 1 the amount of income an employee must receive to be subject to the highly compensated employee (HCE) test, an abbreviated duties test. The HCE test’s compensation threshold then increases to $151,164 per year (including at least $1,128 paid on a salary or fee basis) on Jan. 1, 2025. FTC Bans Noncompete Clauses The FTC has issued a final rule to ban the use of noncompete clauses in employee contracts. While the FTC does not have regulatory authority over banks, it does have authority over bank affiliates. The final rule makes it illegal for an employer to enter into a noncompete with a worker, maintain a noncompete with a worker or tell workers they are subject to a noncompete. Noncompete agreements with senior executives entered into before the rule’s effective date, which is 120 days after the rule’s publication in the Federal Register, remain in force. Existing noncompetes with other workers are not enforceable after the effective date. DOL’s Expands ‘Fiduciary’ Definition  The Department of Labor has adopted a new rule broadening the definition of an investment advice “fiduciary” under the Employee Retirement Income Security Act (ERISA). Under the final rule, a bank or other financial institution or representative assisting customers with a one-time rollover transaction likely will be deemed a “fiduciary.” One-time annuity transactions also will be included.  FinCEN Sets 2025 Date for Access to Beneficial Ownership Information FinCEN has updated its beneficial ownership information (BOI) FAQ to include new questions and updated information about reporting companies, beneficial ownership through trusts and access to beneficial ownership information. Of note, the FAQ states that banks are expected to receive access to BOI reported to FinCEN under the reporting rule in the spring of 2025. Climate Disclosure Rule Senator Tim Scott (R-SC) has introduced a resolution (S.J. Res. 72) under the Congressional Review Act that seeks to overturn the SEC's climate disclosure rule. Scott noted, "The SEC’s mission is to regulate our capital markets and ensure all Americans can safely share in their economic success – not to force a partisan climate agenda on American businesses." The resolution has 37 additional co-sponsors, including both Senator Ted Budd and Thom Tillis. A similar resolution has been filed in the House (H.J. Res. 127).   Guidance on Real Estate Agent Commissions Fannie Mae and Freddie Mac have issued guidance regarding the treatment of property seller-paid buyer agent fees following the recent court settlement involving the National Association of Realtors (NAR). In March, NAR agreed to make several changes to how Realtors’ commissions are apportioned as part of a settlement to end several antitrust lawsuits. Fannie and Freddie noted that their policies on interested party contributions (IPCs) allow parties, including property sellers, to make contributions to the borrower’s closing costs, subject to maximum limits ranging between 2% and 9% of the property value. Typical fees or closing costs paid by a seller in accordance with local custom, known as common and customary fees or costs, are not subject to the IPC limits.  “If a seller or seller’s real estate agent continues to pay the buyer’s real estate agent commission in accordance with local common and customary practices, these amounts are not required to be counted towards the IPC limits for the transaction,” Fannie Mae said. $27 Billion in Elder Financial Exploitation Financial institutions reported roughly $27 billion in suspicious activity related to elder financial exploitation during a one-year period from 2022 to 2023, FinCEN said in a new financial trend analysis. Banks filed 72% of all elder exploitation-related BSA reports, with elder scams accounting for 80% of all reported activity. Most elder scam-related BSA filings referenced “account takeover” by a perpetrator unknown to the victim. Adult children were the most frequent elder theft-related perpetrators. Comment Letter on Regulatory Burden The NCBA has joined with other state bankers associations on a comment letter directed to the Democratic and Republican leaders of the House Financial Services Committee and Senate Banking Committee. The letter urges these Congressional leaders to push for an independent, third-party review of recent banking agency rulemakings to assess their appropriateness and effectiveness in addressing risks within the banking sector. Regulators frequently cite to bank failures, like that of Silicon Valley Bank, as justification for the regulatory changes. However, the letter notes that the measures under consideration would not have prevented the bank failures, nor would they foster a broad-based, diverse U.S. banking system. The letter recognizes that Senators Thom Tillis and Federal Reserve Governor Michelle Bowman have called for an independent review. Proposed Changes to Bank Merger Policy The FDIC is accepting public comment on its proposal to change how the agency will evaluate bank merger applications. The proposal would broaden the number of competitive factors the FDIC will take into consideration when deciding whether to approve or deny applications. The agency would also require an accounting of the potential effects on communities, including possible branch closures or relocations. Comments are due June 18. State Legislative & Regulatory Update Budget Surplus With the General Assembly convening this week for the start of the 2024 short session, lawmakers got good news concerning the state budget. Economists predict collections will exceed revenue budgeted for the year ending June 30 by $413 million (a 1.2% increase) and the state is projected to receive $1 billion more in the fiscal year starting July 1 than what was anticipated (a 3% increase). Overall state operating revenues exceed $34 billion. The General Assembly's focus during the “short” session is to make adjustments to the second year of the two-year budget. NCBA Announcements The 2024 American Mortgage Conference in Review Each year, the American Mortgage Conference brings together policymakers, investors, leading experts in the financial services industry and mortgage practitioners of every kind. On April 15-17, 2024, nearly 150 attendees gathered at the Savannah Marriott Riverfront to discuss important industry issues and analyze the progress being made in Washington. Bankers traveled from all over to join us in Georgia, with a total of 32 states represented at the conference! At this year's event, attendees had the opportunity to hear from regulators, industry experts, mortgage leaders and more before closing out the day with roundtable discussion groups to reflect on the day’s hot topics. In between, attendees reconnected with old friends, met with exhibitors and expanded their reach at the networking receptions. For more photos from the event, be sure to search #SavannahAMC2024 on LinkedIn! And keep an eye out for more information as we finalize the details for next year’s American Mortgage Conference. Quarterly Economic Update with Dr. Harry Davis, PhD The economy continues to display surprising strength. In March, 303,000 new nonfarm jobs were created and the labor force participation rate rose. The unemployment rate fell from 3.9% to 3.8%. Real average hourly earnings have now increased for 12 consecutive months. Consumer confidence remains relatively high and well above the level associated with a recession. Everyone please return your tray table and chair back to their upright positions for the “soft-landing." Full Story ➤   Management Forum | Save the Date for this New NCBA Program! Save the Date for the 2024 NCBankers Hall of Fame! Thank You to Our Annual Sponsors Events from the NCBA are made possible thanks to the support of our annual sponsors: Professional Development Virtual Compliance School | Lending Track Begins on May 21, 2024 Learn More & Sign Up   Online Training from our Partnered Providers Finding the time for crucial professional development can be a challenge. Luckily, NCBA members have access to online training material through our partnered training providers. Find your perfect webinar from ABA Training or OnCourse Learning today! Upcoming OnCourse Webinars FCRA Compliance: E-Oscar and Metro2 - April 25, 2024 Lending 101 - April 25, 2024 Navigating the FedNow® Rules and Regulatory Compliance Environment - April 25, 2024 W-9s, W-8BENs and IRS Mismatches - April 30, 2024 Bi-Monthly Compliance Briefing - April - April 30, 2024 Open New Accounts Part I: Consumer Accounts - April 30, 2024 New FLSA Overtime Exemption Regulations - Required Action Items - May 31, 2024 CBS Spotlight Upcoming Webinar with S&P Global: Outlook For Banks As They Digest Higher For Longer Rates Please join the S&P Global Market Intelligence team at 11:00 AM on Thursday, May 9, as they plan to discuss the following items with members of the North Carolina Bankers Association: Focusing on revenue headwinds facing banks as deposits remain precious amid greater regulatory scrutiny, higher rates persisting Discussing how banks are likely to slow growth in the face of elevated funding costs and concerns over commercial real estate exposures Focusing on banks’ credit quality and CRE exposures and the headwind they will present to earnings Discussing how earnings pressures likely will encourage banks to focus on efficiency and eventually M&A activity Learn More & Sign Up   Upcoming Webinar with BankMarketingCenter.Com: Social Media - What's New and What's Next. About Your Presenter: Eric Cook is a 15-year “recovering banker” now digital strategist and three-time contributing author to the best-selling “Digital Minds” book series. A faculty member for several state and national banking schools, his engaging teaching style, passion for community banking, and deep understanding of digital trends have made him a popular voice for innovation in the banking industry. Learn More & Sign Up   Industry Update North State Bank Promotes Antonio Nevarez to Relationship Banking Manager North State Bank has promoted Antonino Nevarez to Relationship Banking Manager for its Garner office, announced Amanda M. Lloyd, Executive Vice President and Chief People Officer. In this position, Nevarez will develop and enhance loan and deposit relationships with existing and prospective customers and oversee office operations. "We opened the Garner office on the heels of opening our first location in North Raleigh, so some of our longest customer relationships are rooted in this community," shared Lloyd. "Antonino's knowledge and experience are ideal for stepping into this position following the retirement of Elaine Crabtree. We believe customers will enjoy getting to know and working with him." KS Bank Celebrates the Bank's 100th Anniversary KS Bank is proud to announce that they are celebrating their 100th anniversary in business, a milestone few other businesses have reached. Currently, there are estimated to be less than 1,000 companies in the United States that have survived 100 years – less than half a percent of all businesses in the U.S. “Our longevity is a testament to the trust and loyalty of our customers,” said Earl W. Worley, Jr., President/CEO of KS Bank. “For 100 years, we have been a part of various communities in eastern North Carolina, providing not just banking products but also funding the dreams of small business owners, providing stable careers for our employees, and providing leadership and financial support for organizations making our communities a great place to live and work. We’re excited for the future of KS Bank and are committed to offering superior service and support for the next 100 years." PB Financial Corporation Announces 1Q24 Earnings PB Financial Corporation, the holding company for Providence Bank, reported net income available to common stockholders for the quarter ended March 31, 2024, of $3,169,250 compared to $3,712,014 for the same period in 2023, a decrease of 14.62%.   As of March 31, 2024, the Company reported total assets of $1.016 billion compared to $878.9 million on March 31, 2023, an increase of 15.57%. Total deposits were $805.0 million and gross loans  were $860.3 million at the end of the first quarter of 2024 compared to total deposits of $705.1 million  and gross loans of $714.1 million at the end of the first quarter of 2023, increases of 14.16% and  20.48%, respectively, On the Lighter Side You can't be that kid at the top of the waterslide overthinking it. You just have to go down the chute. - Tina Fey NC Bankers Association | 3601 Haworth Drive | Raleigh | NC | 27609 | US If you no longer want to receive emails regarding the NCBankers Bulletin, please Opt-Out.