annual report - Department of Banking and Finance

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annual report - Department of Banking and Finance

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State of Georgia

Department of Banking and Finance

ANNUAL REPORT

For Year Ending December 31, 2008

Sonny Perdue, III

Governor

Rob Braswell, CEM

Commissioner


Ta b l e o f C o n t e n t s

Message from the Commissioner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Organizational Profile and Staff Contact Information . . . . . . . . . . . . . . . . . . . . . . 6

Structure of the Department and Division Contact Information . . . . . . . . . . . . . . . . . 6

Supervisory Division Summary of Activities for 2008 . . . . . . . . . . . . . . . . . . . . . . . 12

State‐Chartered Banking Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

State‐Chartered Credit Union Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Other Supervised/Registered Financial Institutions . . . . . . . . . . . . . . . . . . . . . . . . 14

State‐Chartered Bank Financial Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

State‐Chartered Credit Union Financial Summary . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Division Staff—Main Office & District Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Examination Districts and Work Areas (Map) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Non­Depository Financial Institutions Division Summary of Activities for 2008 . . . . . 23

Mortgage Licensee and Registrant Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Money Service Businesses (MSB) Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Division Staff—Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Division Staff—Money Service Businesses (MSB) . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Legislative Highlights for 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Administrative Division Summary of Activities for 2008 . . . . . . . . . . . . . . . . . . . . . 30

Fiscal Year Receipts and Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Division Staff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

2008 Highlights from the Director of Communications and Planning . . . . . . . . . . . . 33

Summary of Activities for State­chartered Financial Institutions and Other Entities . .

Regulated by, Licensed by, or Registered with the Department of Banking and

Finance During 2008

34


MESSAGE FROM THE COMMISSIONER

Welcome to the Department of Banking & Finance’s 2008 Annual Report. This past

year was definitely a dynamic year for the Department and the financial industry,

as we both tried to meet the challenges presented by the turmoil in the financial

markets and the downturn in the housing market. However, in times like these I

think it is beneficial to remember that there were many successes and as you go

through this report, I encourage you to review the pages in which the Deputy

Commissioners and the Director for Communications & Planning have listed the

2008 highlights and activities for their respective areas of responsibility.

Before going further, I also want to take this opportunity to thank former Deputy

ROB BRASWELL

Commissioner for Supervision, Grace Lurry, for 34 years of excellent and dedicated Commissioner

service to this Department and the citizens of Georgia. Grace, who retired

September 1, 2008, had a distinguished career with the Department and will be missed in every respect. I

am pleased to announce Kevin Hagler is the Department’s new Deputy Commissioner for Supervision and

brings a wealth of knowledge and first hand experience with him into this position. Kevin most recently

served as the District Director of the Department’s Northwest District.

Regarding the entities we regulate, 2008 became a more challenging year with each passing month. As the

downturn in the housing market accelerated, the impact was felt throughout the financial industry and has

had a significant impact on many of our banks and mortgage licensees. Financial institutions with

concentrations in construction and acquisition and development lending were hit the hardest, and

unfortunately, led to the Department having to close five banks in 2008 by taking them into receivership.

Although the volume of new bank activity decreased significantly this past year, nine banks that were in the

“pipeline” from 2007 opened in 2008. However, a better indicator of the challenging financial environment

is the fact that only two applications for new banks were accepted in 2008.

Despite the turmoil in the financial environment abroad, the operating performance of most state chartered

credit unions in 2008 could best be described as stable. It was noted that some credit unions with

employment‐based common bonds continue to face strategic challenges as their sponsors face competitive

and industry related pressures. It also should be noted that our Department continued to have strong

representation on national credit union issues since George Reynolds, the Department’s Senior Deputy

Commissioner, is serving as Chairman of the National Association of State Credit Union Supervisors

(NASCUS) until his term expires in August 2009.

The mortgage side of the Non‐Depository Financial Institutions (NDFI) Division remained vigilant in

combating mortgage fraud in Georgia. The number of enforcement actions, including Cease and Desist

Orders, Consent Orders and Revocations remained very high in 2008 due to the effectiveness of the risk‐

focused program. In fact, the Mortgage Examiners Group was presented the "Outstanding Regulatory Unit

Award" at the February 2009 Georgia Real Estate Fraud Prevention and Awareness Coalition's Annual

Conference. The award was presented in recognition of the examiners' efforts in investigating and

2008 Annual Report Page 4


documenting mortgage fraud. The Department routinely collaborates with many others (law enforcement

agencies, the Office of the Attorney General, local prosecutors, the Georgia Real Estate Fraud Prevention &

Awareness Coalition, concerned lenders, etc. to name a few) in an effort to crack down on mortgage fraud in

Georgia. I want to take this opportunity to thank our partners for their efforts in protecting the citizens of

Georgia.

The Department also remained very active in the oversight of the money service businesses (MSBs) as

reflected by performing over 230 examinations. The MSB side of the NDFI Division ensures that these

entities are properly licensed and complying with State law, the Bank Secrecy Act, and the requirements of

the Office of Foreign Assets Control.

As you will see in the Legislative Highlights section of this report, the Department did not sponsor a

“Housekeeping Bill” in 2008, but instead focused its attention on a bill to permit Georgia licensed mortgage

lenders and mortgage brokers to participate in a uniform nationwide mortgage licensing system. In

addition, the Department updated many of its rules via two separate rulemaking processes.

Lastly, I want to thank you for providing feedback to us regarding our customer service effectiveness. We

are constantly striving to exceed your expectations and to do our part in making Georgia the best managed

state in the nation. Several of the initiatives highlighted throughout this report were developed due to the

invaluable feedback that you provided; therefore, please keep your comments and suggestions coming.

As always, it remains our goal to be the best financial services industry regulator in the country. Thank you

for your support of these efforts.

Sincerely,

Rob Braswell

Rob Braswell, CEM

Commissioner

MESSAGE FROM THE COMMISSIONER

“Safeguarding Georgia’s Financial Services”

2008 Annual Report Page 5


The Department of Banking and Finance (Department) is the state agency

that regulates and examines banks, credit unions, and trust companies

chartered by the State of Georgia. The Department also has regulatory

and/or licensing authority over mortgage brokers, lenders, and

processors; money service businesses; international banking

organizations, and bank holding companies conducting business in

Georgia.

Financial institutions and financial service providers are subject to strong

statutory and regulatory requirements at both the federal and state levels.

We share regulatory responsibility for Georgia state‐chartered financial

institutions with our federal counterparts (FDIC, FRB, NCUA). We are the

sole regulatory agency for mortgage lenders and brokers and money

service businesses (with the exception of FINCEN and the IRS, which

supervise the Bank Secrecy Act, USA PATRIOT Act and other Anti‐Money‐

Laundering efforts).

STRUCTURE OF THE DEPARTMENT AND DIVISION CONTACT INFORMATION

GEORGE REYNOLDS

Senior Deputy

Commissioner

ORGANIZATIONAL PROFILE AND

STAFF CONTACT INFORMATION

ACRONYMS:

CEM ‐ Certified Examinations

Manager

CEIC ‐ Certified Examiner‐In‐Charge

CFE ‐ Certified Financial Examiner or

Certified Fraud Examiner

CPA ‐ Certified Public Accountant

CSCUES ‐ Certified State Credit

Union Examination Supervisor

CTE ‐ Certified Trust Examiner

Functionally, the Department reports directly to the State’s Chief Financial Officer

and the Governor. The Department is headed by a Commissioner who is appointed

by the Governor to serve a four‐year term. Commissioner Rob Braswell is assisted

by Senior Deputy Commissioner George Reynolds.

The Department’s operations are divided along functional lines: Supervision,

Administration, Non‐Depository Financial Institutions, and Legal and Consumer

Affairs. These divisions are headed by Deputy Commissioners.

The Director of Communication and Planning reports directly to Senior Deputy

Commissioner Reynolds and is primarily responsible for: website administration;

coordinating e‐commerce initiatives; external publications; examination survey

report compilation/analysis; coordinating employee survey processes; overseeing/coordinating all

business resumption and emergency preparedness procedures and plans; coordinating strategic and

business planning; coordinating accreditation processes for the Department’s bank and credit union

supervisory programs; and coordinating any marketing efforts of the Department.

NAME TITLE PHONE #

Rob Braswell, CEM Commissioner 770‐986‐1628

George Reynolds, CPA/CEM/CSCUES Senior Deputy Commissioner 770‐986‐1629

Carol Webb, CEM Director of Communications and Planning 770‐986‐1386

Susan Brown Office Manager 770‐986‐1621

2008 Annual Report Page 6


ORGANIZATIONAL PROFILE AND

STAFF CONTACT INFORMATION

SUPERVISORY DIVISION: The Supervisory Division is responsible for the supervision, regulation,

and examination of depository financial institutions and their affiliated companies that fall under the

regulatory authority of the Department. Such institutions include state‐chartered banks, trust companies

and credit unions; bank holding companies; and international banking organizations.

The Corporate Section of the Division is responsible for financial institution application and registration

processing. The Supervisory Division is headed by Deputy Commissioner for Supervision Kevin Hagler.

Main Office Staff

NAME TITLE PHONE #

Kevin Hagler, CEM Deputy Commissioner for Supervision 770‐986‐1646

Janet Blackmon, CEM Director for Supervision 770‐986‐1627

Lori Godfrey, CEM/CFE Supervisory Manager (Districts 1 & 5) 770‐986‐1636

Mike Killeen, CEM/CSCUES Supervisory Manager (Districts 2 & 8) 770‐986‐5049

Laura Millen, CEM Supervisory Manager (Districts 3 & 4), Trust 770‐986‐1643

Murali Ramachandran, CEM Corporate Manager 770‐986‐1645

Merian Johnson Administrative Assistant 770‐986‐1658

Susan Weissinger Administrative Assistant 770‐986‐1659

District Work Area Staff

District 1—Northwest

NAME TITLE

Melissa Sneed, CEM District Director

Daisy Mitchell, CEM Supervisory Examiner

Rich Parker, CEIC Supervisory Examiner

Ira Goolsby, CEIC Senior Financial Examiner

Vic Greene, CEIC Financial Examiner

Larry Moody, CEIC Financial Examiner

Mark Pressler, CEIC Financial Examiner

Robbie Williams, CEIC Financial Examiner

Aline De Oliveira Senior Assistant Financial Examiner

Ryan Baker Assistant Financial Examiner

Aaron Fisher Assistant Financial Examiner

2008 Annual Report Page 7


ORGANIZATIONAL PROFILE AND

STAFF CONTACT INFORMATION

District 2—Northeast

NAME TITLE

Heather Sartain, CEM District Director

Bill Warnock, CEM Supervisory Examiner

Harold Carney, CEM Senior Financial Examiner

Pam Keane, CEIC Financial Examiner

Justin McElheney Financial Examiner

Mathew Robinson, CEIC Senior Assistant Financial Examiner

John Cowart Assistant Financial Examiner

Brett Poole Assistant Financial Examiner

Cacey Rogers Assistant Financial Examiner

Victoria Williams Assistant Financial Examiner

LaTosha Rose Administrative Assistant

District 3—Central

NAME TITLE

Lori Binford, CEM District Director

Dennis McNeer, CEM Supervisory Examiner

Gloria Jack, CEIC Senior Financial Examiner

Derek Thompson, CEIC Senior Financial Examiner

Brittany Bohannon, CEIC Financial Examiner

Shannon Boyt, CEIC Financial Examiner

George Campbell, CEIC Financial Examiner

Candice Jones, CEIC Financial Examiner

Kevin Smitko, CEIC Financial Examiner

Chad Taylor Senior Assistant Financial Examiner

Deborah Latimer Administrative Assistant

2008 Annual Report Page 8


District 4—Southeast

NAME TITLE

Gary Ford, CEM/CSCUES District Director

Michael Hooks, CPA/CEM Supervisory Examiner

Janet Bryan, CEIC Senior Financial Examiner

Mark Smith, CEIC/CSCUES Senior Financial Examiner

Bob Herndon, CEIC Financial Examiner

Presley Norris Financial Examiner

Kimberly Nobles Senior Assistant Financial Examiner

Emily Fennell Administrative Assistant

Savannah Office

David Widincamp, CEM/CSCUES Supervisory Examiner

Michael Bryan, CEIC Senior Financial Examiner

Patrick Brahana, CEIC Financial Examiner

William (Trey) Craig, III Assistant Financial Examiner

District 5—Southwest

NAME TITLE

Jane Stage, CEM District Director

Virginia Riddick, CEM Supervisory Examiner

Terry Tucker, CEIC Senior Financial Examiner

James Johnson, CEIC Financial Examiner

Sue Ann Tucker, CEIC Financial Examiner

Rebecca Clark Senior Assistant Financial Examiner

Ivan Crocker Senior Assistant Financial Examiner

Jim Mixon Senior Assistant Financial Examiner

Valdosta Office

ORGANIZATIONAL PROFILE AND

STAFF CONTACT INFORMATION

Joyce Jones, CEM/CSCUES Supervisory Examiner

Kay Tillman Green, CEIC/CSCUES Senior Financial Examiner

John Sutphin, III, CEIC/CSCUES Senior Financial Examiner

2008 Annual Report Page 9


ORGANIZATIONAL PROFILE AND

STAFF CONTACT INFORMATION

District 8—Large Institutions

NAME TITLE PHONE #

Steve Pleger, CEM District Director 770‐986‐1387

Amy Johnson, CEIC/CTE Supervisory Examiner 770‐986‐1388

Mike Anderson Large Institutions Specialist 770‐986‐5044

Susan Andrews Senior Financial Examiner 770‐986‐5048

Ernie Coats, CEIC Capital Markets Specialist 770‐986‐1390

Ayanna DeRamus IT Specialist 770‐986‐1389

John Sonnier, CPA/CEIC Senior Financial Examiner 770‐986‐5047

Evans Yancy Credit Specialist 770‐986‐1391

NON­DEPOSITORY FINANCIAL INSTITUTIONS DIVISION: This Division is responsible for

the licensing and supervision of mortgage lenders, brokers, and processors who are licensees and

registrants under the law. The Division is also responsible for the licensing and supervision of check

cashers, sale of check companies and money transmitters ‐ collectively referred to as Money Services

Businesses (MSBs). The Division is headed by Deputy Commissioner for Non‐Depository Financial

Institutions Rod Carnes.

NAME TITLE PHONE #

Rod Carnes, CFE Deputy Commissioner for Non‐Depository Financial Institutions 770‐986‐1371

Melinda Kinard, CEM Director of Money Service Businesses and Mortgage Licensing 770‐986‐1649

Sandra Sheley, CEM Director of Mortgage Supervision 770‐986‐5036

Felicia Faison‐Holmes Non‐Depository Financial Institutions Division Attorney 770‐986‐1648

Larry Shelley, CEM Supervisory Manager ‐ Mortgage Regulation 770‐986‐1372

Joel Byers, CFE Supervisory Manager ‐ MSBs 770‐986‐1656

Diane Hester, CFE Supervisory Examiner ‐ Mortgage 770‐986‐1312

Betty Thomas, CFE Senior Financial Examiner ‐ Mortgage 770‐986‐1316

Bob Bauguss, CFE Financial Examiner ‐ Mortgage 770‐986‐5043

Andy Reid, CFE Financial Examiner ‐ Mortgage 770‐986‐1310

Phillip Valenzuela, CFE Financial Examiner ‐ Mortgage 770‐986‐1620

Peter Lisowski, CFE Financial Examiner ‐ MSBs 770‐986‐1315

Fernando Ornelas, CFE Senior Assistant Financial Examiner ‐ Mortgage 770‐986‐1313

Rhonda Sampson, CFE Senior Assistant Financial Examiner ‐ Mortgage 770‐986‐1311

Amanda Turner Senior Assistant Financial Examiner ‐ Mortgage 770‐986‐2811

Janet Anderson Financial Examiner ‐ Review 770‐986‐1268

Deborah Long Assistant Financial Examiner ‐ Review 770‐986‐2810

Teresa Koeppel, CFE Administrative Examiner ‐ MSBs 770‐986‐1639

Susan Nelson Applications Analyst ‐ MSBs 770‐986‐1652

Irene Harper Applications Analyst ‐ Mortgage 770‐986‐5027

Brenda Harrell Secretary III 770‐986‐5035

Gloria Smith Secretary/Receptionist 770‐986‐1136

2008 Annual Report Page 10


ORGANIZATIONAL PROFILE AND

STAFF CONTACT INFORMATION

LEGAL AND CONSUMER AFFAIRS DIVISION: The Legal and Consumer Affairs Division is

responsible for providing legal advice and legislative drafting support for the Commissioner and staff. The

Consumer Affairs Specialist provides consumers with appropriate contacts and referrals to assist

consumers with their concerns. The Division is headed by Deputy Commissioner for Legal and Consumer

Affairs Judy Newberry.

NAME TITLE PHONE #

Judy Newberry Deputy Commissioner for Legal and Consumer Affairs 770‐986‐1650

Mark Simpson Consumer Affairs Specialist 770‐986‐2809

ADMINISTRATIVE DIVISION: The Administrative Division is responsible for human resource

management, budgeting, accounting services, information systems, training activities, property

management, and records management. The Division is headed by Deputy Commissioner for Administration

Tracy Whitesides.

NAME TITLE PHONE #

Tracy Whitesides, CPA, CEM Deputy Commissioner for Administration 770‐986‐1640

Jeanetta Alexander Accountant 770‐986‐1632

Denise Brown Director of IT 770‐986‐1651

Vicki Brantley, CEM Training Manager 770‐986‐1644

Charlene Haynie Senior Payroll Supervisor 770‐986‐5038

Marilyn Harris, CEIC Personnel Officer 770‐986‐1638

Felicia Hedgebeth Network and Information Security Administrator 770‐986‐1373

Reneé Martin Accounting Director I 770‐986‐1641

Carol Hyde IS Database Integrator 770‐986‐1383

Susan Brown Office Manager 770‐986‐1621

Kaushik Mehta Support Services Officer 770‐986‐1622

Sheila Ball Administrative Secretary 770‐986‐1633

Wanda Williams Administrative Secretary 770‐986‐1633

2008 Annual Report Page 11


The Supervisory Division of the Department of Banking and Finance regulates

and examines banks, credit unions, and trust companies chartered by the State

of Georgia. The Department also has regulatory and/or licensing authority

over subsidiaries of state‐chartered banks, bank holding companies conducting

business in Georgia and international banking organizations. We share

regulatory responsibility for Georgia state‐chartered financial institutions with

our federal counterparts (FDIC, FRB, and NCUA). Major activities and

challenges during the year included:

• The Department took possession of five banks pursuant to the Official Code

of Georgia, Section 7‐1‐150(a) which authorizes the Department in its

discretion to take possession of the business and property of any state

chartered financial institution whenever such financial institution is either

insolvent or operating in an unsafe or unsound condition.

• The depositors of the five banks closed in 2008 were largely unaffected, as acquiring institutions

stepped forward to service those customers.

• During 2008, 115 safety and soundness examinations of banks and 51 safety and soundness

examinations of credit unions were performed by the Department.

• The results of the 2008 Annual Customer Satisfaction Survey continued to be positive, with the

Supervisory Division receiving a 94% rating for overall quality of services provided to regulated entities.

Summary of Application Activity:

SUPERVISORY DIVISION

SUMMARY OF ACTIVITIES FOR 2008

KEVIN HAGLER

Deputy Commissioner for

Supervision

♦ The Department approved five bank charter applications in 2008 and nine state‐chartered banks

opened in 2008.

♦ Financial institutions continued to take advantage of on‐line, expedited processing procedures for

corporate filings to establish branch offices, relocate branch offices, renew representative offices and

expand fields of membership.

2008 Annual Report Page 12


SUPERVISORY DIVISION

SUMMARY OF ACTIVITIES FOR 2008

STATE­CHARTERED BANKING STATISTICS

The number of Georgia state‐chartered banks decreased during the year. As of the end of the year,

the number of state‐chartered banks totaled 276, a decrease of 15 from the previous year. This net

decrease was the result of:

• nine new state banks opening,

• one state‐chartered bank converting to a thrift charter,

• 18 state‐chartered banks merging out of existence, and

• five state‐chartered banks being closed by the Department /put into FDIC receivership.

A four‐year financial performance summary for state‐chartered banks can be found on Page 16 of

this Report.

2008 Annual Report Page 13


SUPERVISORY DIVISION

SUMMARY OF ACTIVITIES FOR 2008

Banks in Receivership Date of Receivership Deposits Acquired by

Integrity Bank

Alpharetta, Fulton County

Alpha Bank & Trust

Alpharetta, Fulton County

The Community Bank

Loganville, Walton County

First Georgia Community Bank

Jackson, Butts County

Haven Trust Bank

Duluth, Gwinnett County

08/29/2008

10/24/2008

11/21/2008

12/05/2008

12/12/2008

Regions Bank

Birmingham, Alabama

Stearns Bank, N.A.

Saint Cloud, Minnesota

Bank of Essex

Tappahannock, Virginia

United Bank

Zebulon, Georgia

Branch Banking and Trust Company

Winston Salem, North Carolina

The above chart details the Georgia state‐chartered banks that were closed by the Department of Banking

and Finance during 2008. In each bank closure, the FDIC was appointed as Receiver of the bank effective

upon the Department taking possession.

Detailed information about failed banks can be found on the FDIC’s website at:

http://www.fdic.gov/bank/individual/failed/banklist.html. This webpage contains useful information

for the customers and vendors of these banks. This includes information on the acquiring bank (if

applicable), how customer accounts and loans are affected, and how vendors can file claims against the

receivership.

New bank charter activity

slowed significantly during

the year, with only two

new state bank charter

applications accepted, five

approved, and nine opened.

It appears that the level of

chartering activity in 2009

will continue to be

minimal, reflecting the

current challenging

banking environment.

De novo banks, defined as

banks opened less than

three years, represented

13% of the total number of

state-chartered banks as of

year end 2008.

2008 Annual Report Page 14


There were 68 state-chartered credit

unions in Georgia at year-end 2008, a

decrease of one from the previous year.

The net decrease is attributed to one

federal credit union converting to a

state charter and two state-chartered

credit unions merging out of existence

during the year.

A four-year balance sheet and income

statement snapshot for state-chartered

credit unions can be found on Page 17

of this Report.

NOTE: In the graph to the right, Total

Assets for state-chartered credit unions

includes the Corporate Credit Union

(Georgia Central Credit Union).

STATE­CHARTERED CREDIT UNION STATISTISTICS

OTHER SUPERVISED/REGISTERED FINANCIAL INSTITUTIONS

BANK HOLDING COMPANIES

A total of 265 bank holding companies were registered with the Department at the end of 2008. The

Department accepted six and approved nine holding company formation applications during 2008. Five

holding company acquisition applications were accepted during the year and six were approved.

FOREIGN BANKING ORGANIZATIONS

At year‐end, the number of International Bank Agencies and Domestic International Banking Facilities

licensed by the Department remained unchanged at three and one, respectively. All three International Bank

Agencies operate as representative offices only, but maintain their licenses as an agency. The number of

International Representative Offices registered increased by one during the year to total three.

TRUST COMPANIES

SUPERVISORY DIVISION

SUMMARY OF ACTIVITIES FOR 2008

Trust activities continue to be conducted principally by bank trust departments. There is one state‐chartered

non‐deposit trust company in Georgia that is an independent trust company (Reliance Trust Company,

Atlanta, Georgia).

REPRESENTATIVE OFFICES OF BANKS AND BANK HOLDING COMPANIES

A representative office is an office established by a bank, a bank holding company, or an agent or subsidiary

of either for the purpose of conducting other than a banking business, and is not considered a main office or

a branch office. As of the end of 2008, there were 71 entities registered with the Department having

representative offices operating in this state.

2008 Annual Report Page 15


SUPERVISORY DIVISION

STATE­CHARTERED BANK FINANCIAL SUMMARY

Source: Call Report and Thrift Financial Report

FDIC‐Division of Insurance and Research

2008 Annual Report Page 16


SUPERVISORY DIVISION

STATE­CHARTERED CREDIT UNION FINANCIAL SUMMARY

* Data above does not include Georgia Central Credit Union, which had Total Assets at the end

of 2008 of approximately $1.8 billion.

2008 Annual Report Page 17


MAIN OFFICE STAFF

The primary responsibility of the

Supervisory Division is the supervision,

regulation, and examination of state‐

chartered financial institutions including:

banks, credit unions and trust companies.

This Division also supervises bank holding

companies and international banking

organizations. The Division is also

responsible for processing various types of

applications, registrations, and notifications

filed by financial institutions.

DISTRICT EXAMINATION STAFF

The Department has six examination districts which have district work areas located in various geographic

regions of the state to facilitate the supervisory process.

From left to right (front row): Ira Goolsby, Melissa Sneed,

Aline De Oliveira, Daisy Mitchell, Vic Greene, Larry Moody

From left to right (back row): Mark Pressler, Rich Parker

Ryan Baker, Robbie Williams

Not pictured: Aaron Fisher

SUPERVISORY DIVISION STAFF

Main Office & District Offices

Seated from left to right: Lori Godfrey, Merian Johnson, Mike Killeen

Standing from left to right: Susan Weissinger, Murali Ramachandran,

Janet Blackmon, Laura Millen

Northwest District 1 - Woodstock

645 Molly Lane, Suite 140

Woodstock, Georgia 30189

Phone: (770) 928-1803 Fax: (770) 928-6209

2008 Annual Report Page 18


From left to right (front row): Derek Thompson, Lori Binford,

George Campbell

From left to right (2nd row): Kevin Smitko, Candice Jones,

Brittany Bohannon, Gloria Jack

From left to right (3rd row): Chad Taylor, Shannon Boyt,

Deborah Latimer, Dennis McNeer

SUPERVISORY DIVISION STAFF

District Offices

From left to right (front row): Justin McElheney, Victoria Williams,

Pam Keane, LaTosha Rose, Heather Sartain

From left to right (back row): Mathew Robinson, Bill Warnock, Cacey Rogers

Harold Carney, Brett Poole, John Cowart

Northeast District 2 - Loganville

3715 Harrison Road, Suite 100

Loganville, Georgia 30052

Phone: (770) 554-0676 Fax: (770) 554-5915

Central District 3 - College Park

510 Plaza Drive, Suite 1230

College Park, Georgia 30349

Phone: (404) 559-4937 Fax: (404) 559-6622

2008 Annual Report Page 19


From left to right (front row): Michael Bryan, Kimberly Nobles,

Emily Fennell, Janet Bryan, Michael Hooks

From left to right (back row): David Widincamp, Presley Norris,

Bob Herndon, Patrick Brahana, Mark Smith, Gary Ford

Not pictured: William (Trey) Craig, III

From left to right (front row): Ivan Crocker, Kay Tillman Green,

Jim Mixon, Sue Ann Tucker, John Sutphin, Virginia Riddick

From left to right (back row): James Johnson, Terry Tucker,

Rebecca Clark, Joyce Jones, Jane Stage

SUPERVISORY DIVISION STAFF

District Offices

Southeast District 4 - Dublin

P.O. Box 965

Dublin, Georgia 31040

Phone: (478) 275-6740 Fax: (478) 275-6742

Savannah Office

6555 Abercorn Street, Suite 222

Savannah, Georgia 31405

Phone: (912) 356-2770 Fax: (912) 356-2769

Southwest District 5 - Douglas

211 E. Ashley Street, Suite 100

Douglas, Georgia 31533

Phone: (912) 389-4248 Fax: (912) 389-4287

Valdosta Office

2215 Bemiss Road, Suite F

Valdosta, Georgia 31602

Phone: (229) 333-5299 Fax: (229) 333-2139

2008 Annual Report Page 20


SUPERVISORY DIVISION STAFF

District Offices

From left to right (front row): Evans Yancy, Mike Anderson,

Ernie Coats

From left to right (back row): Steve Pleger, Ayanna DeRamus,

Amy Johnson, Susan Andrews, John Sonnier

Large Institutions—District 8

The Large Institutions District does not have a

separate office. Examiners work from the

main office or from other district work areas.

2008 Annual Report Page 21


SUPERVISORY DIVISION

EXAMINATION DISTRICTS AND WORK AREAS

2008 Annual Report Page 22


NON­DEPOSITORY FINANCIAL INSTITUTIONS DIVISION

SUMMARY OF ACTIVITIES FOR 2008

The Non‐Depository Financial Institutions Division (NDFI) is responsible for

the licensing, regulation and examination of mortgage lenders, brokers, and

processors who are licensees and registrants and Money Service Businesses

(MSBs) which include sale of check companies, money transmitters, and

check cashers. The Department now regulates over 2,200 Mortgage

Licensees and Registrants and over 1,000 MSBs. Major activities of the year

included:

• Fighting mortgage fraud remained a primary strategic focus for our

division. We continued our Risk Focused Examination Program, which

targets those involved in mortgage fraud, with great results. During the

past year, the Department issued 96 Cease and Desist Orders and 60

Intent to Revoke Orders and made referrals totaling more than $20

million to other law enforcement and regulatory agencies as a result of

our examinations and investigations.

ROD CARNES

Deputy Commissioner for

Non‐Depository Financial Institutions

• According to a report issued by the Mortgage Asset Research Institute (MARI), Georgia ranked 4th in the

country for mortgage fraud in 2008, down from 7 th in 2007. We will continue to work closely with

federal, state, and local law enforcement and regulatory agencies, the Georgia Real Estate Fraud

Prevention & Awareness Coalition, community task forces, and the industry to combat mortgage fraud.

• On July 30, 2008, the Housing and Economic Recovery Act of 2008 was signed into federal law. Title V of

the Act, the Secure and Fair Enforcement Mortgage Licensing Act (S.A.F.E), requires all states to

participate in the Nationwide Mortgage Licensing System and licensure of all loan originators. We

anticipate legislation will be passed during the 2009 legislative session requiring mortgage loan

originator licensing.

• As of January 2, 2009, Georgia went on‐line with the Nationwide Mortgage Licensing System, which is

sponsored by the Conference of State Bank Supervisors (CSBS) and the American Association of

Residential Mortgage Regulators (AARMR) to unify and streamline state licensing requirements and

help fight mortgage fraud.

• Our division continued our Risk Focused Examination Program for MSBs. In 2008, we increased the

number of examinations performed by 18% and issued one administrative action. Our examination

program not only focuses on Georgia laws and Department rules, but also ensures compliance with the

Bank Secrecy Act and anti‐money laundering initiatives. In 2008, we gave presentations at MSB

conventions and will continue to work closely with the MSB industry to provide training and feedback

under our program.

2008 Annual Report Page 23


NON­DEPOSITORY FINANCIAL INSTITUTIONS DIVISION

SUMMARY OF ACTIVITIES FOR 2008

MORTGAGE LICENSEE AND REGISTRANT STATISTICS

Article 13 of Title 7 of the

Official Code of Georgia

Annotated requires all

persons who transact

business as a residential

mortgage lender, broker, or

processor to be licensed or

registered with the

Department, unless they are

exempt or subject to

notification requirements

only.

Since 2006, the Department

has seen a continuous decline

in the volume of new

applications filed each year.

At the end of 2008, active mortgage licensees and registrants totaled 2,259, representing a net decrease of 754 for the

year. As indicated in the applications graph above, new applications declined by approximately 46% in 2008.

2008 Annual Report Page 24


Check Cashers

NON­DEPOSITORY FINANCIAL INSTITUTIONS DIVISION

SUMMARY OF ACTIVITIES FOR 2008

MONEY SERVICE BUSINESSES (MSB) STATISTICS

Check Sellers and Money Transmitters

Since 1965, the

Department has been

supervising companies

that sell travelers’ checks

and money orders to

people in Georgia, and

has been licensing money

transmitters since 2003.

At the end of the year, 23

companies having over

13,000 agents throughout

the state were licensed to

do business in Georgia.

At the end of the year, 80

money transmitters having

over 6,000 agents

throughout the state were

licensed to do business in

Georgia.

The Department continued

to experience a substantial

amount of application

activity for check casher

licenses/registrations

during 2008.

At the end of 2008, there

were 907 check cashers

licensed or registered with

the Department. There

were 242 new applications

for check casher licenses

or registrations during the

year, and 158 companies

either closed or did not

renew their licenses during

the year. This represents a

net increase of 84 or 10%

from the previous year.

2008 Annual Report Page 25


NON­DEPOSITORY FINANCIAL INSTITUTIONS DIVISION STAFF

Mortgage Licensing / Examination & Supervision

MORTGAGE LICENSING STAFF

The primary responsibilities of the

mortgage licensing staff are to process new

and renewal applications for the licensing

or registration of mortgage lenders,

brokers, and registrants. In addition, the

staff processes changes to existing licensees

such as the addition and deletion of branch

locations, addition or change to branch

managers, change in business structure/

name, change in control, change in

management, changes to the surety bond,

and registration of a d/b/a name. Mortgage

licensing also processes educational

provider applications and their renewals.

MORTGAGE EXAMINATION / SUPERVISION STAFF

From left to right (front row): Rhonda Sampson, Felicia Faison-Holmes,

Amanda Turner, Sandra Sheley, Betty Thomas, Diane Hester

From left to right (back row): Andy Reid, Fernando Ornelas,

Phillip Valenzuela, Bob Bauguss

From left to right (front row): Brenda Harrell, Larry Shelley, Melinda Kinard

From left to right (back row): Deborah Long, Irene Harper,

Gloria Smith, Janet Anderson

The mortgage supervision/examination

staff examines mortgage licensees for

compliance and conducts mortgage fraud

investigations of both licensed and

unlicensed entities. Its members prepare

the reports of examinations and, if

administrative action is warranted, they

collect and organize the supporting

evidence. The division attorney then issues

the action or forwards the documentation

to the Attorney General’s office in

preparation for an administrative hearing.

The staff also works with law enforcement

and prosecutors on criminal mortgage

fraud cases.

2008 Annual Report Page 26


NON­DEPOSITORY FINANCIAL INSTITUTIONS DIVISION STAFF

Money Service Businesses (MSB)

MSB LICENSING/SUPERVISION STAFF

The primary responsibilities of the MSB licensing/

supervision staff are to process new and renewal

applications for the licensing or registration of sale of check

companies, money transmitters, and check cashers. In

addition, the staff handles changes in address, branch office

locations and relocations, office closure notifications,

contact changes, and agent updates for seller of checks and

money transmitters. Also, staff members perform

examinations of the licensees, prepare the report of

examination, and recommend administrative action where

needed.

DID YOU KNOW THAT . . .

From left to right (front row): Peter Lisowski, Joel Byers

From left to right (back row): Teresa Koeppel,

Melinda Kinard, Susan Nelson

On our website, you can search for active or inactive mortgage licensees/registrants, notificants, and cease and

desist orders and other administrative actions against mortgage entities or individuals.

Links to those searches and other industry applicable information for mortgage entities are found on our website

from the main page for Mortgage Brokers & Lenders at—

http://dbf.georgia.gov/dbfmtg

You can also search for licensed and registered money service businesses (check cashers, check sellers and money

transmitters ‐ collectively referred to as MSBs) conducting business in Georgia.

Links to those searches and other industry applicable information for MSBs are found on our website from the main

page for Money Service Businesses at—

http://dbf.georgia.gov/dbfmsbs

2008 Annual Report Page 27


The Legal and Consumer Affairs Division is responsible for providing legal

advice and legislative drafting support for the Commissioner and staff. Major

2008 Legislative highlights included:

• In 2008, the Department did not sponsor a “Housekeeping Bill” (which

traditionally provides statutory clarifications). Instead during the 2008

legislative session the Department focused its attention on a bill to amend

Title 7, Article 13, Licensing of Mortgage Lenders and Mortgage Brokers, to

permit Georgia licensed mortgage lenders and mortgage brokers to readily

convert to a uniform nationwide mortgage licensing system pursuant to a

multi‐state uniform mortgage licensing project spearheaded by industry

representatives, the Conference of State Bank Supervisors (CSBS), and the

American Association of Residential Mortgage Regulators (AARMR).

The provision which can be found at O.C.G.A. §7‐1‐1003.5 allows participation in a single source

depository of multi‐state mortgage lender and mortgage broker information which will provide the

Department with a much broader spectrum of information with which to assess an applicant’s

qualifications for licensure, as well as provide access to disciplinary actions across state lines which

should further advance the Department’s focus on regulating the industry and fighting mortgage fraud.

Department Rules were updated in 2008, via two separate rulemaking processes, as provided for by the

State Administrative Practices Act, after review and consultation with interested parties and members

of the industry. The Department welcomes comments from the public or from the industry throughout

the year regarding amendments or clarifications to Department Rules that will enhance the regulatory

oversight and enforcement of its regulated entities.

Highlights of 2008 rulemaking:

LEGISLATIVE HIGHLIGHTS FOR 2008

JUDY NEWBERRY

Deputy Commissioner for Legal

and Consumer Affairs

• Changes were made to various Mortgage Rules In order to accommodate participation in the

Nationwide Mortgage Licensing System (NMLS) and to facilitate the transition of mortgage brokers and

mortgage lenders to the NMLS.

• A provision was added in the Mortgage Rules to require the maintenance of certain information relative

to employees, including date of hire, criminal background check, and date the Department website was

reviewed to verify eligibility for employment. What constitutes payroll records was clarified and a

requirement was added that copies of such records must be maintained by a licensee or registrant for

employees or contractors even if the filing of these forms with the Internal Revenue Service was done by

an agent.

2008 Annual Report Page 28


• Changes to provide parity for Georgia state‐chartered financial institutions regarding interest only

loans by deleting the 10 year amortization period. The Department continues to advise caution

regarding the usage of interest only loans, noting that they should only be extended to appropriate

credit‐worthy borrowers after a proper financial and credit analysis.

• Change requiring check casher registrants to post their registration in public view and addition of a

fine for licensees and registrants that fail to post their license or registration as required.

CONSUMER AFFAIRS SPECIALIST

LEGISLATIVE HIGHLIGHTS FOR 2008

While the Department is unable to handle individual consumer complaints and

inquiries about such entities, we attempt to provide consumers with appropriate

contacts and referrals to assist consumers with their concerns. Consumer Affairs

Specialist Mark Simpson is primarily responsible for directing consumers with

complaints or inquiries to resources that enable them to become financially

educated and to make informed decisions when dealing with one of our regulated

entities.

2008 Annual Report Page 29


ADMINISTRATIVE DIVISION

SUMMARY OF ACTIVITIES FOR 2008

The Administrative Division experienced several changes during 2008. The

Division is responsible for human resource management, budgeting, accounting

services, information technology, training activities, records systems. Major

highlights of the year included:

• We welcomed two new faces in the division. Renee Martin joined the

Department in May as the Accounting Director. Renee came to us from the

Department of Administrative Services. IS Database Integrator Ralph Shire

retired after 34 years with the Department and was replaced by Carol Hyde

in December. She has 20 plus years experience in database administration.

• Four new employees joined the staff of the Department in 2008. Three of the

four employees were field examiners.

TRACY WHITESIDES

Deputy Commissioner for

Administration

• In conjunction with the Non‐Depository Financial Institutions Division, we began the transition over to

the National Mortgage Licensing System to collect mortgage and broker licensing fees.

• In light of the current budget, the division undertook an initiative to increase in‐housing training for

examiners. During 2008, eight in‐house training seminars were held in order to provide training to

Department examiners.

• The Department’s IT staff converted the Department to Ironport for secure email. Additionally, all

examiners received new laptops. District servers were replaced with higher storage capacity servers and

district networks were upgraded with smart switches and firewalls.

2008 Annual Report Page 30


ADMINISTRATIVE DIVISION

FISCAL YEAR RECEIPTS AND DISBURSEMENTS

NOTE: Revenues collected are remitted to the Office of the Treasury and Fiscal Services. The level of

expenditures is subject to the state budgetary process.

2008 Annual Report Page 31


FRONT DESK/OFFICE MANAGEMENT

The primary responsibilities of the front desk/

office management staff are to provide general

and clerical support to Department's divisions.

The Office Manager serves as administrative

support for the Commissioner and Senior Deputy

Commissioner. The receptionists screen and

forward calls as appropriate. The Support

Services Officer oversees the receipt, sorting, and

distribution of mail; maintains office equipment

and supplies; and assists with routine repairs and

preventive maintenance.

INFORMATION TECHNOLOGY (IT)

The primary responsibilities of the IT staff are to: (1) Procure

and maintain computer equipment and software (desktop,

laptop, handheld, server, local area network, firewall, wide

area network, etc.); and (2) Provide technical support (Help

Desk) to Department employees. These individuals also make‐

up the Department’s IT Recovery Team which, in the event of

an emergency situation, is responsible for recovery of the

Department’s IT infrastructure and recovery and restoration

of data and voice communications.

HUMAN RESOURCES/ACCOUNTING/

BUDGET

ADMINISTRATIVE DIVISION STAFF

The primary responsibilities of the human resources/

accounting/budget staff are to: (1) Provide and

administer the functions necessary to the recruitment,

training, and certification of a professional staff; (2)

Manage appropriated budget funds; assuring proper

accounting and tracking of revenue and expense

collections; (3) Coordinate benefit and payroll

transactions, records and reports, and oversight of

employee benefit programs, (4) Perform all State

dictated accounting functions and processes

(involving payables, receivables, payroll, balancing of

accounts, etc.); and (5) Manage physical property

acquisition and disposition.

From left to right (front row): Wanda Williams, Sheila Ball,

Susan Brown, Kaushik Mehta

From left to right: Carol Hyde, Felicia Hedgebeth,

Denise Brown

From left to right: Charlene Haynie, Marilyn Harris,

Vicki Brantley, Jeanetta Alexander, Reneé Martin

2008 Annual Report Page 32


2008 HIGHLIGHTS FROM THE

DIRECTOR OF COMMUNICATION AND PLANNING

During 2008, the Department continued its focus on customer service

improvement through strategic planning initiatives that impact our external

customers and our employees. Initiatives that have not been mentioned elsewhere

in this report are highlighted below, along with other accomplishments and

activities during the year:

• We were reaccredited by the Conference of State Bank Supervisors (CSBS)

during 2008. The CSBS Accreditation Program identifies banking departments

that serve the citizens of their State by operating a capable and professional

regulatory program. Every five years, the Department is subject to an on‐site

review to ensure that we continue to fulfill our statutory responsibility to

charter, examine, supervise and regulate all state‐chartered commercial banks

and trust companies in Georgia. A Review Team of three highly experienced

former regulators and the CSBS Vice President, Accreditation and Certification,

performed the on‐site review.

• The State ushered in a new Strategic Planning methodology during the year. The new integrated

strategic planning process was the result of collaborative work among the state planning agencies to

consolidate and integrate four separate strategic planning processes. The ultimate goal of the new

process is to ensure that agencies are achieving results for Georgians —continuing our efforts to be good

stewards of the state’s resources. The Department’s goals for the next three years are focused primarily

on the following areas:

♦ Increase overall supervisory capabilities and effectiveness.

♦ Reduce mortgage fraud in Georgia.

CAROL WEBB

Director of Communications

and Planning

♦ Enhance E‐Commerce/E‐Government capabilities to improve service to internal and external

customers.

• Feedback from our customer satisfaction surveys for application and examination processes in our two

largest programs continued to reveal extremely positive results during 2008, with satisfaction ratings for

overall quality of service greater than 90%.

2008 Annual Report Page 33


SUMMARY OF ACTIVITIES

FOR STATE CHARTERED FINANCIAL INSTITUTIONS

AND OTHER ENTITIES REGULATED BY, LICENSED BY, OR REGISTERED WITH

THE DEPARTMENT OF BANKING AND FINANCE DURING 2008

2008 Annual Report Page 34


Our Motto is: “Safeguarding Georgia’s Financial Services”

Our Mission is to promote safe, sound, competitive

financial services in Georgia through innovative,

responsive regulation and supervision.

Our Vision is to be the best financial services industry

regulator in the country – Progressive. Proactive.

Service-Oriented.

Visit us on the web at:

http://dbf.georgia.gov

GEORGIA

DEPARTMENT OF

BANKING AND FINANCE

2990 Brandywine Road

Suite 200

Atlanta, Georgia 30341-5565

Phone: (770) 986-1633

Toll-free: (888) 986-1633

Fax: (770) 986-1654 or 1655

Email: dbfpress@dbf.state.ga.us

2008 Annual Report Page 35