Bank Audit & Risk Committees Conference Agenda

Bank Audit &
Risk Committees Conference

June 11-12, 2019
Chicago, IL

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7:00 AM - 8:00 AM
Breakfast + Registration

7:00 AM - 8:00 AM
First-Time Attendee + Bank Membership Program Welcoming Breakfast + Registration
Michelle King, Chief Marketing Officer, Bank Director
Bank Director welcomes first-time attendees and our bank services members to this year’s annual Bank Audit & Risk Committees Conference.  During the breakfast, first-timers and members receive an overview of what to expect over the day and a half event.

8:00 AM - 8:10 AM 
Al Dominick, CEO, Bank Director

8:10 AM - 9:00 AM
Today’s Banking Industry
Steven D. Hovde, Chairman & CEO, Hovde Group, LLC
This session focuses on the current economy, industry trends, operating conditions and areas of potential opportunity for banks attending this annual conference.

9:00 AM - 9:05 AM
The Audience’s Take on the Industry
Jack Milligan, Editor-in-Chief, Bank Director
Find out how fellow audience members feel about the current state of affairs and where the future is headed.  Participate with others in the audience in a fast-paced, focused and fun survey of all attendees.

9:05 AM - 9:55 AM
Issues & Trends Facing Today’s Audit Committee
Gary Bronstein
, Partner, Kilpatrick Townsend & Stockton LLP
Robert Glaser
, Audit Committee Chair, Five Star Bank
Derrick Hong
, EVP, Chief Audit Executive, Pacific Premier Bank
Todd Sprang
, Managing Principal, CliftonLarsonAllen LLP
Moderated by: Jack Milligan, Editor-in-Chief, Bank Director
Serving on the audit committee may be the toughest and most time-consuming job of a board member, and it is not getting any easier. Audit committees must focus on supervising the internal auditor, hiring an external auditor, reviewing audits and following up to ensure problems are resolved, while also focusing on the big picture issues and not getting lost in the details. In this session, experts in the field share best practices and today’s hot topics for the audit committee.

9:55 AM - 10:10 AM 
Refreshment Break
Sponsored by:  PayNet, Inc.

10:10 AM - 11:00 AM
The “Ex-Regulator”
Brian McCormally, Partner, Arnold & Porter
Hear from a former bank regulator who speaks frankly about what he values in a relationship between a regulator and a bank, how to communicate—and how not to communicate—with your regulator and what really gets a bank in hot water (that you might not expect).

11:10 AM - 12:00 PM
Breakout Sessions

Breakout I: The Impact of CECL On Your Bank
Derek Blauser
, SVP, Credit Administration, Prosperity Bank
Kevin Brand, Senior Manager, Advisory Services, Crowe LLP
CECL is the biggest accounting change to impact the industry in years, and its potential impact cannot be overlooked. As of the conference dates, implementation is less than a year away for SEC filers, and two years away for the rest of the industry, so a bank’s board and management team need to understand where they need to be in the implementation process, how it could reshape the bank’s risk profile, CECL’s impact on growth and acquisition strategies and more.

Breakout II: How Data Analytics Minimize Credit Risk
William Phelan
, President, PayNet, Inc.
Every bank should have a digital lending offer for small and medium sized enterprises - which are largely underserved by banks.  A digital lending capability can be done without brain surgery on the core adding millions to shareholder value.  This session shows ways to retool outdated processes into digital lending to reduce decision time from weeks to days, increasing win rates by up to 30% and average margins by up to 50%.  A recent McKinsey study showed that a bank with a balance sheet of $250 billion could capture as much as $230 million in annual profit.

Breakout III: Deposit & Loan Strategy Considerations in Today’s Rate Environment
There is no one-size-fits-all deposit strategy.  Every bank is unique and merits a deposit and funding strategy that meets its specific needs.  In this increasingly competitive environment, banks need to establish a framework that balances the seemingly conflicting need to have both an offensive and defensive deposit strategy.  In this session, industry experts will discuss a data-driven, analytical approach to ensure that your bank is tailoring a deposit and funding strategy that best fits its individual needs.

Breakout IV: Fintech and Banking: The Challenges and Opportunities
Banks today are now working hand-in-hand with fintech entities, and the sentiment has changed from being confrontational to accepting technology as an alternate channel to attract new customers.  This session explores risk, internal control and security considerations for fintech solutions necessary for all financial services firms.

12:00 PM - 1:00 PM
Networking Lunch
Sponsored by: Dixon Hughes Goodman LLP

1:00 PM - 1:50 PM
Breakout Sessions

Breakout I:  Building and Enhancing the Risk Function for Banks Under $10 Billion
Mike Dempsey
, Senior Manager, Dixon Hughes Goodman LLP
For banks with assets under $10 billion, enterprise risk management (ERM) expectations can require formality, maturity and sophistication in terms of risk governance, assessment and monitoring.  As examiners push banks to demonstrate a safe and sound risk management framework, developing an effective ERM program starts with establishing the appropriate risk culture.  Learn key risk management strategies to bring back to your bank. 

Breakout II: Focus on Operational Risk
Michael D. Cohn, Director, WolfPAC Integrated Risk Management
Stephen Fullam, Chief Risk Officer, Toyota Financial Savings Bank
There are a wide variety of risks that are deemed to be operational in nature and these play a prominent role in a bank’s Enterprise Risk Management program even though they don’t get talked about enough. Cyber, loan underwriting and the privacy impact on business process and document digitization are operating risks. The threats may not jeopardize the viability of the franchise to the extent that liquidity and credit risks can, but the impact to capital is less than desirable. In this presentation, we address how the nature of operational risk has changed in the era of digitalization and how progressive banks are dealing with it.

Breakout III: Staying Ahead of Governance Risk – Key Considerations for the Board
Peter Schablik, Partner, Mazars USA LLP
New technologies, disruptive innovations and changing regulations are rapidly impacting business operations. The board must stay ahead of all three to ensure sound governance for its organization. In this session, we explore key considerations for the board including areas of regulatory scrutiny, expectations for information technology and cybersecurity oversight.

Breakout IV: Inside the Deposit Dilemma - How M&A May Be the Best Risk Management Tool For It
Adam Mustafa
, President & CEO, Invictus Group
The community bank deposit dilemma will eventually lead to curtailed growth, margin compression, liquidity stress or any combination of these challenges.  This session explores why every bank’s risk committee must understand the deposit situation and ensure that the bank is protected.  The right acquisition of a bank with a healthy amount of excess deposits and favorable loan rate absorption provides an insurance policy against the situation getting far worse.

1:50 PM - 2:05 PM
Refreshment Break
Sponsored by:  Invictus Group

2:05 PM - 2:55 PM
Breakout Sessions

Breakout I: ERM and Internal Audit Transformation: World Class Collaboration and Delivery
Don Bouffard, Audit Committee Chair, Amalgamated Bank
Mark Pappas, EVP & Chief Risk Officer, Amalgamated Bank
Sherry Williams, Chief Audit Executive, Amalgamated Bank
Moderated by: Jennifer Burke, Partner, Crowe LLP
This session provides an overview of the maturity of ERM in financial services, transformation of internal auditing for future expectations and the importance and value of having two highly performing ERM and IA teams collaborating to add value and input on strategic goals.

Breakout II: The Latest Liability Trends Facing Bank Directors & Officers
Dennis Gustafson, Principal & Financial Institutions Practice Leader, Armfield, Harrison &
Thomas, Inc.
The most recent litigation and claims circumstances facing community banks and their directors and officers is examined in this interactive session. This session looks at the new debit card, social engineering and cyber loss scenarios, as well as the potential impact of the #MeToo movement. Attendees walk away with a tangible “top 10” list of D&O liability coverage improvements to keep current with the ever-changing claims environment.

Breakout III: Using Your Compensation Plan to Mitigate Risk
Gayle Appelbaum
, Partner, McLagan
Gregory Camarco, Associate Partner, McLagan
Boards face the challenge of designing executive compensation plans, including nonqualified deferred compensation plans, that will allow the bank to recruit and retain management talent while limiting exposure to unwanted risks. Aligning these plans with the company’s long-term objectives should limit executives’ incentive to make decisions that improve short-term metrics but increase the company’s risk exposure. This session reviews several essential tools necessary to recruit and retain key officers while discouraging imprudent risk-taking.

Breakout IV: Blockchain’s Growing Influence and What That Means
Smart Contracts, Know Your Customer and Anti-Money Laundering, payments and remittances are all eventually going to be influenced by the confusing yet revolutionary technology of blockchain. Let’s get down and dirty with what it means, how it works, what it’s going to change and how it will help banks in the short and long term.

3:05 PM - 3:20 PM
Your Thoughts On Audit & Risk Committee Issues
Jack Milligan
, Editor-in-Chief, Bank Director
Craig Sanders
, Partner, Moss Adams LLP
During this interactive session, we gauge the audience’s opinions regarding topics related to both audit and risk as determined by Bank Director’s 2019 Risk Survey.

3:20 PM - 4:10 PM
An 18-Month Economic Forecast:  Is It Time To Prepare for the Inevitable Downturn?
As of November 2018, there are more than a few economists and industry experts that believe we are about 12 months or so away from the next economic downturn.  This session tackles a number of issues: Is the industry in better shape than in the last recession?  How will the Fed move, if rates are still relatively low?  What do stress test results tell us about the industry’s ability to weather another recession?  And how can banks prepare for the next phase in the credit cycle?

4:10 PM - 5:00 PM
Debating The Issues Facing Directors Today
John Erickson, Director, Bank of Hawaii
Salvatore Inserra
, Partner, Crowe LLP
Paul Ward, SVP & Chief Risk Officer, Community Bank System, Inc.
Moderated by:  Mika Moser, President, Bank Director
In this interactive session, we pose questions to leading experts, a chief risk officer and a risk committee chair relating to how risk should be handled and strategized within a bank. Hear how each perspective differs and take away ideas and processes for your bank.

5:00 PM - 6:00 PM
Networking Peer + Guest Reception
Sponsored by: Hovde Group, LLC


7:00 AM - 8:00 AM

8:00 AM - 8:15 AM
Day Two Welcoming Remarks
Mika Moser
, President, Bank Director

8:15 AM - 9:05 AM
The Five Biggest Cybersecurity Threats Right Now
Annie Goodwin
, Risk Committee Chair, Glacier Bancorp, Inc.
Colleen L. Kimmel
, Vice President & General Counsel, Sterling Bank and Trust FSB
Joe Oleksak
, Partner, Plante Moran
David L. Porteous, Lead Director, Huntington Bancshares Incorporated
Moderated by:  John Maxfield, Executive Editor, Bank Director
The cybersecurity landscape is constantly evolving. Two years ago, one of the biggest vulnerabilities came from ransomware, a type of malicious software that threatens to publish a bank's data or block access to digital distribution channels unless a ransom is paid. But last year, the prevalence of ransomware attacks dropped, as the rising price of bitcoin led cyber actors to focus instead on surreptitiously co-opting banks’ servers to mine cryptocurrencies. Attend this session to find out what the five biggest cybersecurity threats confronting banks are right now.

9:15 AM - 10:05 AM
Breakout Sessions

Breakout I:  Making Offers They Can Refuse: Millennials, Gen Z and You
Harry L. (Trey) Deupree, III
, Consultant, Equias Alliance, an NFP Company
Kyle Healy, Vice President, Corporate Development, Equias Alliance, an NFP Company
Are you struggling to get and keep the best talent that will drive your business forward? Many industries have been slow to innovate their attraction and retention strategies for the highly-compensated millennial employee, banking included. This session explores ideas on developing specialized compensation plans that can reduce risk for banks – and complement the habits and desires of the current and emerging workforce.

Breakout II: Who’s Auditing Your Internal Auditors?
Mark Boettcher
, Senior Manager, Baker Tilly Virchow Krause, LLP
Timothy M. Kosiek, Partner, Baker Tilly Virchow Krause, LLP
The greatest Enterprise Risk Management or cybersecurity program on paper might just be a paper tiger if bank personnel aren’t following the policies and procedures that have been established. How have a variety of banks structured their Internal Audit programs, who does the Internal Auditor report to, and how should they be empowered inside their organizations?

Breakout III: Enable Strategy by Flipping the Script on Risk and Compliance
Joanne Campbell
, EVP, Risk Management, Camden National Bank
Dawnella Johnson
, Partner, Crowe LLP
Compliance and risk functions are often thought of as overhead, a necessary evil, and naysayers.  Banks often do not consider risk when making strategic decisions and spend too much time and money on risk and compliance compared to the business value.  By changing our mindset and flipping the script on Risk and Compliance, we can utilize these functions as enablers of achievement of strategy.  Through the use of data driven insight and foresight, an empowered culture, and a change-enabled workforce, we can both protect and create value strategically.

10:05 AM - 10:20 AM
Refreshment Break

10:20 AM - 11:10 AM
Breakout Sessions (select one)

Breakout I: Best Practices for Vendor Risk Management
Banks have been engaging in this process for some time now, and the prudential banking agencies have issued their own guidance, so we should be able to define a set of best practices for how to handle vendors and potential partners.  Recently, we have focused most of our attention in the due diligence process in the fintech arena, but the list of bank vendors is long and includes such business as lawn care and cleaning services, as well as core processors and external auditors.

Breakout II: Governance Risk
In today’s world, boards may find they are having to be more flexible to get busy directors together, whether meeting via conference call or using Skype-style video chat solutions. But it can be easy for a ne’er-do-well to gain access to your confidential board meetings and listen in on your sensitive discussions. Here’s how to protect your board.

Breakout III:  Have You Done Your M&A Due Diligence?
M&A due diligence is its own separate process, and to a degree, it involves various kinds of risk assessments.  A potential acquirer’s loan team will look through a representative sample of the target’s loan files to get a sense of what their lending practices are, and this speaks to credit risk.  And the acquirer will look at the target’s funding structure, which speaks to liquidity risk.  But how should an acquirer’s Chief Risk Officer apply an Enterprise Risk Management framework to a proposed acquisition when he/she may only have a few days to make the assessment?

11:20 AM - 12:10 PM
Practical Applications of RegTech
Chip Register
, SVP, Chief Administrative Officer & CIO, The Fauquier Bank
Jo Ann Barefoot
, CEO, Barefoot Innovation Group, LLC
A fast-paced overview of the most effective regtech tools used by banks today - what they are and what problems they solve.

12:10 PM - 12:15 PM
Closing Remarks
Mika Moser
, President, Bank Director