2008 annual report [Dec. 31, 2008]

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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 . .

34

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

Finance During 2008

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 Commissioner for Supervision, Grace Lurry, for 34 years of excellent and dedicated service to this Department and the citizens of Georgia. Grace, who retired

ROB BRASWELL Commissioner

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

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MESSAGE FROM THE COMMISSIONER
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

"Safeguarding Georgia's Financial Services"

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ORGANIZATIONAL PROFILE AND STAFF CONTACT INFORMATION

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).

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

STRUCTURE OF THE DEPARTMENT AND DIVISION CONTACT INFORMATION

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.

GEORGE REYNOLDS Senior Deputy Commissioner

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 Rob Braswell, CEM George Reynolds, CPA/CEM/CSCUES Carol Webb, CEM Susan Brown

TITLE Commissioner Senior Deputy Commissioner Director of Communications and Planning Office Manager

PHONE # 770-986-1628 770-986-1629 770-986-1386 770-986-1621

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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.

NAME Kevin Hagler, CEM Janet Blackmon, CEM Lori Godfrey, CEM/CFE Mike Killeen, CEM/CSCUES Laura Millen, CEM Murali Ramachandran, CEM Merian Johnson Susan Weissinger

Main Office Staff
TITLE Deputy Commissioner for Supervision Director for Supervision Supervisory Manager (Districts 1 & 5) Supervisory Manager (Districts 2 & 8) Supervisory Manager (Districts 3 & 4), Trust Corporate Manager Administrative Assistant Administrative Assistant

PHONE # 770-986-1646 770-986-1627 770-986-1636 770-986-5049 770-986-1643 770-986-1645 770-986-1658 770-986-1659

District Work Area Staff District 1--Northwest

NAME Melissa Sneed, CEM Daisy Mitchell, CEM Rich Parker, CEIC Ira Goolsby, CEIC Vic Greene, CEIC Larry Moody, CEIC Mark Pressler, CEIC Robbie Williams, CEIC Aline De Oliveira Ryan Baker Aaron Fisher

TITLE District Director Supervisory Examiner Supervisory Examiner Senior Financial Examiner Financial Examiner Financial Examiner Financial Examiner Financial Examiner Senior Assistant Financial Examiner Assistant Financial Examiner Assistant Financial Examiner

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ORGANIZATIONAL PROFILE AND STAFF CONTACT INFORMATION

District 2--Northeast

NAME Heather Sartain, CEM Bill Warnock, CEM Harold Carney, CEM Pam Keane, CEIC Justin McElheney Mathew Robinson, CEIC John Cowart Brett Poole Cacey Rogers Victoria Williams LaTosha Rose

TITLE District Director Supervisory Examiner Senior Financial Examiner Financial Examiner Financial Examiner Senior Assistant Financial Examiner Assistant Financial Examiner Assistant Financial Examiner Assistant Financial Examiner Assistant Financial Examiner Administrative Assistant

District 3--Central

NAME Lori Binford, CEM Dennis McNeer, CEM Gloria Jack, CEIC Derek Thompson, CEIC Brittany Bohannon, CEIC Shannon Boyt, CEIC George Campbell, CEIC Candice Jones, CEIC Kevin Smitko, CEIC Chad Taylor Deborah Latimer

TITLE District Director Supervisory Examiner Senior Financial Examiner Senior Financial Examiner Financial Examiner Financial Examiner Financial Examiner Financial Examiner Financial Examiner Senior Assistant Financial Examiner Administrative Assistant

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ORGANIZATIONAL PROFILE AND STAFF CONTACT INFORMATION

District 4--Southeast

NAME Gary Ford, CEM/CSCUES Michael Hooks, CPA/CEM Janet Bryan, CEIC Mark Smith, CEIC/CSCUES Bob Herndon, CEIC Presley Norris Kimberly Nobles Emily Fennell
Savannah Office David Widincamp, CEM/CSCUES Michael Bryan, CEIC Patrick Brahana, CEIC William (Trey) Craig, III

TITLE District Director Supervisory Examiner Senior Financial Examiner Senior Financial Examiner Financial Examiner Financial Examiner Senior Assistant Financial Examiner Administrative Assistant
Supervisory Examiner Senior Financial Examiner Financial Examiner Assistant Financial Examiner

District 5--Southwest

NAME Jane Stage, CEM Virginia Riddick, CEM Terry Tucker, CEIC James Johnson, CEIC Sue Ann Tucker, CEIC Rebecca Clark Ivan Crocker Jim Mixon

TITLE District Director Supervisory Examiner Senior Financial Examiner Financial Examiner Financial Examiner Senior Assistant Financial Examiner Senior Assistant Financial Examiner Senior Assistant Financial Examiner

Valdosta Office Joyce Jones, CEM/CSCUES Kay Tillman Green, CEIC/CSCUES John Sutphin, III, CEIC/CSCUES

Supervisory Examiner Senior Financial Examiner Senior Financial Examiner

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ORGANIZATIONAL PROFILE AND STAFF CONTACT INFORMATION

District 8--Large Institutions

NAME Steve Pleger, CEM Amy Johnson, CEIC/CTE Mike Anderson Susan Andrews Ernie Coats, CEIC Ayanna DeRamus John Sonnier, CPA/CEIC Evans Yancy

TITLE District Director Supervisory Examiner Large Institutions Specialist Senior Financial Examiner Capital Markets Specialist IT Specialist Senior Financial Examiner Credit Specialist

PHONE # 770-986-1387 770-986-1388 770-986-5044 770-986-5048 770-986-1390 770-986-1389 770-986-5047 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 Rod Carnes, CFE Melinda Kinard, CEM Sandra Sheley, CEM Felicia Faison-Holmes Larry Shelley, CEM Joel Byers, CFE Diane Hester, CFE Betty Thomas, CFE Bob Bauguss, CFE Andy Reid, CFE Phillip Valenzuela, CFE Peter Lisowski, CFE Fernando Ornelas, CFE Rhonda Sampson, CFE Amanda Turner Janet Anderson Deborah Long Teresa Koeppel, CFE Susan Nelson Irene Harper Brenda Harrell Gloria Smith

TITLE Deputy Commissioner for Non-Depository Financial Institutions Director of Money Service Businesses and Mortgage Licensing Director of Mortgage Supervision Non-Depository Financial Institutions Division Attorney Supervisory Manager - Mortgage Regulation Supervisory Manager - MSBs Supervisory Examiner - Mortgage Senior Financial Examiner - Mortgage Financial Examiner - Mortgage Financial Examiner - Mortgage Financial Examiner - Mortgage Financial Examiner - MSBs Senior Assistant Financial Examiner - Mortgage Senior Assistant Financial Examiner - Mortgage Senior Assistant Financial Examiner - Mortgage Financial Examiner - Review Assistant Financial Examiner - Review Administrative Examiner - MSBs Applications Analyst - MSBs Applications Analyst - Mortgage Secretary III Secretary/Receptionist

PHONE # 770-986-1371 770-986-1649 770-986-5036 770-986-1648 770-986-1372 770-986-1656 770-986-1312 770-986-1316 770-986-5043 770-986-1310 770-986-1620 770-986-1315 770-986-1313 770-986-1311 770-986-2811 770-986-1268 770-986-2810 770-986-1639 770-986-1652 770-986-5027 770-986-5035 770-986-1136

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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 Judy Newberry Mark Simpson

TITLE Deputy Commissioner for Legal and Consumer Affairs Consumer Affairs Specialist

PHONE # 770-986-1650 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 Tracy Whitesides, CPA, CEM Jeanetta Alexander Denise Brown Vicki Brantley, CEM Charlene Haynie Marilyn Harris, CEIC Felicia Hedgebeth Rene Martin Carol Hyde Susan Brown Kaushik Mehta Sheila Ball Wanda Williams

TITLE Deputy Commissioner for Administration Accountant Director of IT Training Manager Senior Payroll Supervisor Personnel Officer Network and Information Security Administrator Accounting Director I IS Database Integrator Office Manager Support Services Officer Administrative Secretary Administrative Secretary

PHONE # 770-986-1640 770-986-1632 770-986-1651 770-986-1644 770-986-5038 770-986-1638 770-986-1373 770-986-1641 770-986-1383 770-986-1621 770-986-1622 770-986-1633 770-986-1633

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SUPERVISORY DIVISION SUMMARY OF ACTIVITIES FOR 2008

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.

KEVIN HAGLER
Deputy Commissioner for Supervision

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:
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.

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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.

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SUPERVISORY DIVISION SUMMARY OF ACTIVITIES FOR 2008

Banks in Receivership
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

Date of Receivership

Deposits Acquired by

08/29/2008

Regions Bank Birmingham, Alabama

10/24/2008

Stearns Bank, N.A. Saint Cloud, Minnesota

11/21/2008

Bank of Essex Tappahannock, Virginia

12/05/2008

United Bank Zebulon, Georgia

12/12/2008

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.

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SUPERVISORY DIVISION SUMMARY OF ACTIVITIES FOR 2008
STATECHARTERED CREDIT UNION STATISTISTICS
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).

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
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.

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SUPERVISORY DIVISION STATECHARTERED BANK FINANCIAL SUMMARY

Source: Call Report and Thrift Financial Report FDIC-Division of Insurance and Research
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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.

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SUPERVISORY DIVISION STAFF Main Office & District Offices

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.

Seated from left to right: Lori Godfrey, Merian Johnson, Mike Killeen
Standing from left to right: Susan Weissinger, Murali Ramachandran, Janet Blackmon, Laura Millen

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
2008 Annual Report

Northwest District 1 - Woodstock
645 Molly Lane, Suite 140 Woodstock, Georgia 30189 Phone: (770) 928-1803 Fax: (770) 928-6209
Page 18

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

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

Central District 3 - College Park
510 Plaza Drive, Suite 1230 College Park, Georgia 30349 Phone: (404) 559-4937 Fax: (404) 559-6622

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SUPERVISORY DIVISION STAFF District Offices

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

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

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
2008 Annual Report

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
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SUPERVISORY DIVISION STAFF District Offices
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.
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

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SUPERVISORY DIVISION EXAMINATION DISTRICTS AND WORK AREAS

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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 7th 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.

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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.

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NONDEPOSITORY FINANCIAL INSTITUTIONS DIVISION SUMMARY OF ACTIVITIES FOR 2008
MONEY SERVICE BUSINESSES (MSB) STATISTICS
Check Cashers
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.

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.

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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.

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

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

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.

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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.

From left to right (front row): Peter Lisowski, Joel Byers From left to right (back row): Teresa Koeppel, Melinda Kinard, Susan Nelson

DID YOU KNOW THAT . . .
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

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LEGISLATIVE HIGHLIGHTS FOR 2008

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).

JUDY NEWBERRY
Deputy Commissioner for Legal and Consumer Affairs

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:

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.

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LEGISLATIVE HIGHLIGHTS FOR 2008
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
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.

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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.

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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.
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ADMINISTRATIVE DIVISION STAFF

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.

From left to right (front row): Wanda Williams, Sheila Ball, Susan Brown, Kaushik Mehta

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
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: Carol Hyde, Felicia Hedgebeth, Denise Brown
From left to right: Charlene Haynie, Marilyn Harris, Vicki Brantley, Jeanetta Alexander, Rene Martin

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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.

CAROL WEBB
Director of Communications and Planning

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. 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%.

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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

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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
2008 Annual Report

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
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