Usually the site of weddings and summer balls, the Grand Hotel in Point Clear will play host to a different kind of clientele in August — banking executives.
The Alabama Bankers Association (ABA) meets annually in Point Clear for its CEO, Bank Executive & Directors Conference. Regularly attracting 800 or more participants, the event is broken into networking sessions and learning lunches in addition to the larger, general sessions.
Scott Latham, who has served as president and CEO of the Alabama Bankers Association since 1997, says the conference helps those in high-level banking positions better serve their members in an environment of continuing change and fluctuations in the economy.
“The event is to help our bankers and their respective members of their board of directors to do even better at managing and directing their respective banks,” Latham says. “Our industry is one that is highly regulated and that is very critical and important to individuals and local economies. It’s an industry that requires trust and safekeeping of people’s money. As a result of that, our members want to do the very best they can do.”
Most members of the board of directors at a bank are not practicing bankers, Latham says. Instead, they are representatives of the shareholders of the bank or individuals who themselves have a higher stake of ownership in the bank. This body is responsible for setting the strategic direction of the financial institution, as well as establishing policies that guide the day-to-day operations of the bank.
The ABA directors conference began in 2002 and was prompted by a visit from the Federal Deposit Insurance Corp. (FDIC), which is one of the major federal regulators of banks.
“Some folks at the FDIC Atlanta regional office said they were interested in doing something in Alabama,” Latham says. “I think they had started something similar in Virginia the year before. I think we had about 55 people the first one we ever did. We have been told for a few years now that we have the largest conference of its kind in the nation, which I’m really proud of.”
Latham says the team has not finalized the agenda for this year, but the event garners high-profile speakers each year from economists and regulators to industry-specific experts.
Last year’s conference included sessions ranging from cybersecurity and cannabis banking to labor forecasting and artificial intelligence. Latham says a continuous learning mindset is important for bankers.
“Every industry is kind of ever-evolving, but it feels like banking more so now than maybe earlier in my lifetime,” Latham says. “The economy is always changing, and if I live in Huntsville versus living in Montgomery, your economies are a little bit different. Depending on where I am and the environment, certain concepts are going to mean different things to me than the guy sitting next to me at the conference. All of that being said, this conference is a way to be sure that as a banker or director, I’m thinking about all the things I need to be thinking about for my role and that as an organization, we’re poised to grab onto anything that can help us manage this organization in a better way.”
Banks can either have a federal charter or a state charter. A federally chartered bank is usually chartered by the Treasury Department and usually has the word “national” in its title. Latham estimates there are fewer than 10 federally chartered banks in the state. But the difference is minor, Latham says — primarily a difference in whether the bank is regulated by the FDIC or a state banking department.
“The reason we do this is because we are so heavily regulated as an industry, whether it’s the state or the feds, whichever agency it is,” Latham says. “I would go so far as to say that there are smaller banks in this state and around this country who have sold their bank to another bank because the red tape and the paperwork and everything the government requires the bank to do is so very onerous.”
Latham stresses that the banks in the ABA don’t dislike regulation. He asserts that good bankers are always going to embrace those guardrails.
“That doesn’t mean that it isn’t burdensome and onerous and hard to comply with,” Latham says. “There is just more and more required of us by the government. So, the liability that bankers and directors have to get it right also increases. I have small banks that had one compliance officer 10-15 years ago that now have three.”
Latham says the importance and value of the conference lies in the ever-changing regulatory landscape and the importance for banks to get it right.
Banks are also challenged with decisions about handling deposits, whether to loan the money out or invest it, he notes.
“If the bank doesn’t make money and then puts some of those profits away, the first time a loan goes bad, the bank’s not going to be able to handle that,” Latham says. “A bank has to plan for the time when a customer falls on hardship and can’t fulfill his or her obligations. There are so many implications in the changing interest rates. Managing the lending portfolio and the investment portfolios requires exceptional skill, and regulators look very carefully at how that’s done because that affects the strength of the bank. It places a huge importance on banks and on the individuals to continuously learn.”
Not only is the conference a net positive for the attendees, he says, but also for those who bank at their institutions. Customers and shareholder alike want to be sure their bank is safe and sound, as well as offering the latest in products, services and technology.
“The really great news is that Alabama’s banks — and most of the banks in this nation — are healthy, strong banks because of all the regulations and the investment into having our organizations run by really good people,” Latham says. “It’s important to the consumer to have the trust in knowing that I deposit my money, I have my lending relationships here, I feel good about not only the knowledge level of those bankers but I’m going in and laying my needs down in front of or laying my business plan in front of.
“To me, it’s a win/win when I’m confident that my institution is running on all cylinders both from a performance perspective and a regulatory perspective,” Latham says. “We’ve been very blessed that even in the downturn, we haven’t had poor-performing banks in our state.”
Crystal Castle is a Mobile-based freelance contributor to Business Alabama.
This article appears in the May 2024 issue of Business Alabama.
