2019 Journal of Community Bank Case Studies

Executive Summary

2019 COMMUNITY BANK CASE STUDY COMPETITION University of Tennessee at Martin

T his case study profiles FirstBank, Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA), enacted May 24, 2018, on FirstBank’s operations and community betterment. The mission, vision, and values of FirstBank are aligned to provide its customers the highest degree of service. In 1984, FirstBank began as a single branch in Scott’s Hill, Tennessee, population approximately 668 people, and has grown into a $5.1 billion entity as of year-end 2018 with markets located throughout Tennessee, northern Alabama, and northern Georgia. Because of the unique community banking story of FirstBank and its exceptional growth, FirstBank has the resources and experience to provide the personalized service that is true to its community banking roots. The strategy of FirstBank is to empower its market presidents to make decisions for their respective markets, thus allowing FirstBank to utilize local knowledge and insight to flourish in each market. FirstBank keeps the communities at the heart of day-to-day operations and decision-making. FirstBank is an elite financial performer. FirstBank outperforms its peer group across multiple financial benchmarks and is a well- capitalized bank. Although regulatory and compliance costs are burdensome to community banks of FirstBank’s size, FirstBank strives to continue its elite financial performance and comply with all state and federal regulations. headquartered in Nashville, Tennessee, by focusing on the impact of the

The relatively large monetary and time requirements of regulation and compliance put community banks like FirstBank at a disadvantage. FirstBank’s annual compliance cost is between 5.3% - 9.8% of the bank’s non- interest expenses (Durham). FirstBank’s Risk Department, as well as all employees, is highly dedicated to both compliance requirements and the overall soundness of FirstBank. FirstBank plans to utilize the EGRRCPA provisions that are relevant to a bank of its size, complexity, and operations. FirstBank sees potential relief from the following provisions: capital classification, the Volcker Rule, reciprocal deposits classification, and appraisal limitations. Section VI includes discussion of these provisions. Going forward, FirstBank expects the provisions of EGRRCPA to give limited compliance cost relief and hopes future legislation will provide more relief for banks with assets between $3 billion and $10 billion. FirstBank will utilize all applicable relief to better serve its customers and communities as customers are one of FirstBank’s major priorities.

4