Independent Banker - September 2020 - 64

customers to use a new deposit control
account to monitor funds usage. This
allowed us to open new accounts and
keep money on balance sheet as payroll
and expenses are paid over time. The
impact is balance sheet growth.
∠ Nutt: In addition to an increase in
deposits, there seems to be a move
to safety in a time of crisis. We also
believe being an active PPP lender in
all our communities have increased
exposure and certainly increased our
deposit account number. Since the PPP
program began, we have opened around
1,000 deposit accounts, which would
typically represent about six months
of account openings. Some of that was
just for current customers to account
for the PPP funds separately, but since it
became known in our communities that
we could get the PPP loans processed
timely compared to large banks, we saw
an increased number of new customers.
Hopefully this is where we will see the
long-term benefit of the program, as
community banks really stepped up and
supported those in need, and I think
communities noticed that " shop local "
includes " bank local. "
∠ Jon Drake: We're also seeing this.
For us, deposit growth year-over-year
is up 17%. Some of this is PPP loan fees
that are in checking accounts waiting
to be spent according to guidelines.
Still, other deposits have come through
larger banks not being able to or just
downright refusing to look at PPP
requests. Several new relationships
have been developed with prospects
who are leaving those institutions,
many after multiyear relationships.
Q: Most community banks' funding
sources have been heavily affected
by recent economic stimulus that
could result in a return to more
traditional, albeit higher, rate
levels. How do you think this will
affect the CFO role?
∠ Rautzhan: As this continues
How the ICBA CFO Forum went virtual
Navigating the financial challenges brought on by the
COVID-19 pandemic are new for many community bank
chief financial officers, but the hurdles they faced before
haven't disappeared. That's where the ICBA CFO Forum,
held virtually on Aug. 17-18, comes in.
The annual seminar is designed to equip CFOs with
knowledge to bring back to their community banks,
including the latest industry insights in emerging tax and
accounting strategies, current expected credit losses
(CECL) implementation, deposit funding sources, risk
management, cybersecurity and more.
New to this year's seminar was the " Planning During a
Pandemic " session, as well as other topics that have been
tailored to address the impact of COVID-19. For example,
the " Income Tax Update " seminar held discussions on
the opportunities and setbacks for community banks due
to the pandemic, covering the Families First Coronavirus
Response (FFCR) and Coronavirus Aid, Relief, and
Economic Security (CARES) acts.
Other highlights of the forum included the CFO Peer
Exchange, which was an opportunity for CFOs to engage
with peers from financial institutions similar in asset size
to their own and discuss a variety of topics, ask questions
and share solutions.
Visit icba.org/education to learn more about Community
Banker University and other ICBA education opportunities.
to play out, the CFO role will be
affected in many ways as we manage
banks' funding needs during these
unprecedented times. We'll need
to have heightened awareness of
external outside factors that might
reveal new trends [and] changing risk
factors, and maybe even [look] for
opportunities to manage liquidity.
∠ Hofer: I agree. I think the CFO role
will continue to be one of keeping
your head down and managing that
internal rate of return that is inherent
in our portfolios. On the bright side,
we have never had as many tools in
our toolbox as we do right now with
all of the new programs available
to us.
∠ Oldenberg: I think interest rate
risk from declining rates is a real
concern and only second to credit
risk currently. But long term, I think
shrinking margins are the biggest
concern for community banks. The
CFO, through ALCO [asset-liability
committee], will need to monitor and
guide the lending function through
pricing concerns. In the long term, I
54 Q ICBA Independent Banker Q September 2020
http://www.icba.org/education
Independent Banker - September 2020

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