Bob and Cathy Buzzo - Media Communication Group

FALL 2011
OFFICIAL PUBLICATION OF THE WEST VIRGINIA BANKERS ASSOCIATION
Bob and Cathy Buzzo
2011-12 WVBA Chairman

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12
4 Looking Forward to the Future
As we look toward the future, the banking industry is
unfortunately facing severe headwinds, perhaps more on
regulatory issues than the legislative front.
By Robert L. Buzzo, Chairman
6 Defenses, Damages, and Attorney’s Fees and
Costs Under the WVCCPA
While the WVCCPA may feel like it applies “strict liability”
on creditors for violations, creditors should rest assured that
they do have a number of the defenses that they can assert
under the WVCCPA to shield from liability.
By Angela L. Beblo and Patrick R. Barry, Spilman Thomas & Battle, PLLC
8 Meet Robert L. Buzzo – Your 2011-2012
Chairman
Robert L. Buzzo was elected 2011-12 Chairman of the
West Virginia Bankers Association during our 118th Annual
Convention.
12 The Pitfalls of Social Networking for
Employers: Why Employers Should Have
Social Networking Policies
Social networking presents opportunities and challenges for
employers. To effectively overcome the challenges and take
advantage of the opportunities, employers should carefully
consider adopting social networking policies.
By Justin M. Harrison, Bowles Rice McDavid Graff & Love LLP
18 Is Your Bank Ready for Accounting Standards
Update No. 2010-20 – The New Credit Quality
Disclosures
If your bank has not started to accumulate the information
required for these new disclosures, we strongly encourage
you to devote the necessary resources to do so immediately
and not wait until the end of the year, because it may be too
late to capture the information needed to be disclosed if the
reports are not generated until after year end.
By Christopher S. Nice, CPA, CISA, P.L.L.C. Member Arnett & Foster, P.L.L.C.
21 Calendar of Events
22 WVBA 118th Annual Convention
25 Why Every Bank Needs a Whistleblower Policy
A whistleblower policy adds an extra degree of insurance that
employees will be protected from being fired, subjected to
harassing treatment, reprisals, or be adversely affected by
any form of retaliation.
By Bernie Deem, DeemHR
26 Member Notes
fall 2011 3

A MESSAGE FROM THE CHAIRMAN
By Robert Buzzo
Looking Forward to the Future
It is indeed a privilege and my pleasure
to serve as Chairman of the West
Virginia Bankers Association for the
coming year. During these tumultuous
times in the banking industry it is reassuring
that the WVBA remains a strong
and respected advocate and resource
for its member banks. As Chairman, I
look forward to working with the Association’s
staff, Board of Directors, and
bankers across the State to promote the
best interests of the banking industry.
The history of the WVBA goes back
almost 120 years; however, the Association’s
importance in providing a
unified voice on important issues for
West Virginia banks has never been
greater. Over the past few years, under
the leadership of President Joe Ellison,
the Association has led the charge in
getting the “banking story” in front
of our elected officials on the myriad
of legislative issues that have dramatically
affected our business. Through
the coordinated efforts of the WVBA
and its constituent bankers, we were
able to gain the support and votes of
most of our Congressional Delegation
on key banking bills. It is also gratifying
to know that the Association has
earned a great deal of credibility in the
State Legislature. We try to choose
our battles carefully and only go to the
Capitol on matters of great importance
and we are always armed with factual
information when we make our points
to legislators. Thank you to all the
bankers who give unselfishly of their
time to call on elected officials with
whom they have personal relationships,
and use their influence for the
greater good of all banks in the State.
As we look toward the future, the banking
industry is unfortunately facing
severe headwinds, perhaps more on
regulatory issues than the legislative
front. Now that Dodd-Frank is hitting
its effective dates, the harsh reality of
hundreds of new regulations from the
Consumer Financial Protection Bureau
(CFPB) as well as our primary regulators
will soon hit us right between the
eyes. As bankers we will have to do
everything we can to keep these new
regulations as reasonable as possible.
These efforts will include activities
such as writing comment letters on
proposed regulations, lobbying our
Congressional Delegation to reign in
overzealous regulators and answering
calls to action from our national and
state trade associations. I encourage
CEOs to get all bank employees and directors,
not just a few officers, involved
in efforts to fend off undesirable regulations.
As we all know, in Washington it
is often a numbers game and, the more
bankers our elected officials and regulators
hear from, the better our chance of
a more favorable outcome.
On a brighter note, the WVBA continues
to provide outstanding value
in educational opportunities for bank
employees. With the stress currently
on earnings, a natural tendency is
to cut back on educational expenses.
However, I would argue that with the
ever changing banking landscape, the
last place to cut is in education. The
WVBA provides high quality seminars
throughout the year, at very reasonable
prices, to keep bankers informed on
important topics affecting our business.
Additionally, the WV School of
Banking is regarded as one of the best
banking schools in the Nation under
the leadership of Ed Seifried.
To say the year ahead, or for that
matter the years ahead, will be full
of challenges would be a gross understatement.
However, it is comforting
to know that we have a strong alliance
through our membership in the
West Virginia Bankers Association.
I encourage all members to get more
actively involved in the work of your
Association. Please respond favorably
if asked to serve on a committee, make
a call to a Congress person, come to
Charleston to meet with legislators,
write a letter to a regulator or simply
provide your opinion on an issue.
Through your involvement, your Association,
your industry and your bank
will be better.
The industry is changing, the way we
do business is changing, but one thing
will never change and that is the vital
role that banks play in our communities
and the U.S. economy. I look
forward to working with and for you in
the coming year and together we can
help ensure the ongoing vitality of our
industry.
4
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The team
bankers count on.
Thomas A. Heywood
Sandra M. Murphy
Julia A. Chincheck
Patrick E. Clark
Richard M. Francis
Ellen Maxwell-Hoffman
Edward D. McDevitt
Camden P. Siegrist
Amy J. Tawney
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The members of our Financial Services Team are committed to
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Defenses,
Damages, and
Attorney’s Fees
and Costs Under the WVCCPA
By Angela L. Beblo and Patrick R. Barry, Spilman Thomas & Battle, PLLC
violations that occurred outside of the
applicable one and four year periods.
Second, a defense exists if the creditor
has timely remediated a violation or if
the creditor’s violation was erroneous.
If (1) the violation is discovered and
corrected within 15 days, and (2) the
consumer has not commenced a civil action
or sent a cure demand, the creditor
may not be held liable under the WVCC-
PA. 3 Furthermore, there is no liability if
a creditor can establish that the violation
was unintentional or in error. 4 A violation
could be found to be unintentional
or in error if the violation occurred as
a result of the creditor’s adherence to
its procedures that have been adapted
to avoid that violation. 5 It should be
noted, however, that these defenses are
not available to a creditor that has been
sued in a common law action and not a
specific action under the WVCCPA. 6
Third, a defense also exists if the
person does not meet the definition of
a “consumer” under the WVCCPA. A
“consumer” is the individual who owes,
or who is alleged to owe, the debt at
issue. 7 Further, the WVCCPA is only
available to an individual who incurred
indebtedness through the purchase of
items that were primarily for personal,
household, or family. 8
Last quarter we focused on claims that
can be asserted under the debt collection
provisions of the West Virginia
Consumer Credit and Protection Act, W.
Va. Code §§ 46A-1-101 et seq. (the “WVC-
CPA”). This article will focus on the
basic defenses available to creditors under
the WVCCPA. Despite the “strict liability”
feel to the claims consumers may
assert under the WVCCPA, the defenses
available to creditors may enable a creditor
to avoid any liability for technically
violating a section of the WVCCPA.
First, there is a limited time period
within which claims may be brought under
the WVCCPA. For cases related to
revolving charge accounts or revolving
loan accounts, no action may be brought
more than four years after the alleged
violation occurred. 1 For cases involving
consumer credit sales or consumer
loans not made pursuant to a revolving
account, no action may be brought more
than one year after the due date of the
last scheduled payment. 2 Thus, a court
will not hear a case for claims related to
Fourth, defenses are available for each
particular claim under the WVC-
CPA’s debt collection provisions if the
plaintiff fails to meet all of the necessary
requirements of that particular
section. For instance, while section
2-128(e) prohibits communication with
a consumer after attorney notification
is given, the notification must
provide either (a) the attorney’s name
or address to be valid or (b) the attorney’s
name and address are “easily
ascertainable.” There is no guidance
regarding what information makes an
attorney’s name and address “reasonably
ascertainable” but courts have
found that if a customer provides information
relating to an attorney, the
WVCCPA — continued on page 16
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Meet Robert L. Buzzo –
Your 2011-2012 Chairman
Robert Buzzo was elected 2011-12 Chairman of the West Virginia
Bankers Association during our 118th Annual Convention
Title: President
Financial Institution: First
Community Bank
Hometown: Premier, WV
How I got into the banking business:
Persistence – During my senior year of
college, I started thinking about local
companies that appealed to me as potential
places of employment. It wasn’t long
before The Flat Top National Bank of
Bluefield rose to the top of my list.
One of the main reasons for wanting to
work at the bank was because I attended
the same church as Al Modena, the
Senior Vice President of the bank, and I
regarded Mr. Modena as a man of high
integrity and respected him for all of the
leadership roles he had with numerous
community organizations. Incidentally,
Al is also a past chairman (1994 - 1995)
of the West Virginia Bankers Association.
Just before graduation, I wrote
Al, enclosing my resume, asking to be
considered for employment at the bank
and received a nice letter back stating
that there were no positions available.
After graduation I took a job in Washington,
D.C., mainly because it was my
only offer in a tight job market in the
early ‘70s, but I still felt I wanted to work
for Flat Top National. I wrote Al again
and asked him to keep me in mind if
anything came up. I didn’t last long in
Washington and was a bit homesick and
an opportunity came up to work for an
insurance agency in Bluefield. However,
banking was now my dream and,
after several more letters to Al, and of
course stopping him at church at every
opportunity to plead my case, he finally
arranged for me to interview at the bank.
Luckily, there was a position open at the
bank and I was hired as a teller. I’m not
sure if Al saw potential in me or if I simply
wore him down but I am eternally
grateful to him for opening the door for
me to get into banking. I guess it has
worked out well so far since I have been
with the same bank or its successor for
almost 39 years.
One unique thing about my bank:
The current First Community was
formed in 1990 with the merger of First
Community Bancshares, Inc. (Princeton)
and Flat Top Bankshares, Inc.
(Bluefield). The roots of the bank go
back 137 years to the former Princeton
Bank & Trust Company. We have
grown to just over $2 billion in assets
and have a 50+ branch network system
in our four states of operation. While
we are relatively large by community
bank standards and have a very large
footprint of branches, we have maintained
our community bank philosophy
of personalized service and local decision
making. We feel that our bank is
uniquely positioned to provide community
banking at its best while having
the resources and diverse business lines
to also serve our customers’ needs in investments,
insurance and trust services.
In other words, we are a community
bank that has it all.
The one person who’s had the greatest
influence on my career:
I believe there are actually two people
that have had the greatest influence
on my career. As I mentioned earlier,
Al Modena, who not only gave me the
opportunity to get into banking, but
also, through his example, showed me
the importance of community service
as a vital role of a community banker. I
have been involved with numerous civic
and community organizations over the
years because Al taught me early on that
what is good for the community is also
good for the bank. The other person
who greatly influenced my career was
G. Ross Boyce, who was Senior Vice
President and Cashier for the bank and
my boss during my early banking career.
Ross taught me the business of banking
and the fundamental principles of being
a manager. Under Ross’ mentorship, I
was able to build a strong foundation in
bank operations, accounting and, most
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importantly, the art of dealing with
people. Throughout my career I have
always tried to adhere to the principle
that Ross taught me and that is simply
to treat people with respect and always
be fair.
Recent accomplishment:
I have to say that being elected Chairman
of the WVBA is one of the greatest
honors that I have had in my career.
This organization has such a rich history
of service to the banking industry and to
even be included on the list of bankers
that have served as President/Chairman
is truly a privilege. I look forward to
working with bankers throughout the
State during my year as Chairman and I
am very proud of the strength that West
Virginia banks have shown during this
recent economic cycle.
First job:
My first job out of college was with the
S.S. Kresge Co. (predecessor to K-Mart)
in Washington, D.C. I was selected to
go through the management training
program for Kresge and my first assignment
was right in the middle of D.C.
on Rhode Island Avenue. I can still remember
how petrified I was as a young
man from Bluefield, WV, who had
scarcely been out of town, moving to
the metropolitan Washington area. The
very idea of having to spend an hour and
a half to commute to work and to shutter
the windows of the store to prevent
looting was completely foreign to me.
My desire to live in the big city waned
quickly and after about three months I
came back home and began a long career
of about four months with Metropolitan
Insurance before entering banking.
I joined the bank in 1973 and my first
position was as a drive-thru teller. In
those days there was no such thing as
a management training program in
small banks so if you were new to the
business you started as either a teller
or in the bookkeeping department. I
remember my first supervisor, Sharon,
was a real task master and put the fear
of God in you if you ever thought about
being out of balance. I was soon moved
inside to the main bank to fill in for the
head teller who had to take a leave of
absence for a surgical procedure. As luck
would have it, the head teller chose not
to return and I was promoted to that
position, unfortunately not because of
my uncanny ability, but because I was
able to lift the heavy bags of coin and
none of the lady tellers wanted the job.
Thus, I achieved my first promotion and
first managerial position with the bank.
I must say that working on the teller
line in my early days gave me a great
appreciation for the front line employees
of the bank and the importance of their
interactions with customers to the success
of the bank.
Biggest career break:
My biggest career break occurred in
2000 when I was named President of
Meet Robert L. Buzzo
— continued on page 10
Take Charge
of your
career
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fall 2011 9

Meet Robert L. Buzzo — continued from page 9
First Community Bank. The vote of confidence from the
Board of Directors and CEO John Mendez was truly gratifying
and deeply appreciated. Having worked my way up
through the ranks, so to speak, I felt very fortunate to be
named president of the organization to which I had devoted
essentially my entire working career.
The toughest part of the job:
The toughest part of the job is working within the confines of
the myriad of regulations that we deal with in the industry today.
It seems that I, along with most bankers, spend more time
on regulatory and compliance issues than we do serving customers
or growing the bank. Those of us who have been in the
business for a while know how much more complicated it is to
make a loan or even open a checking account than it was just
a few years ago. Unfortunately, with the full implementation
of the provisions of the Dodd-Frank Act, it is readily apparent
that the intensity of the over-regulation of the banking industry
will only increase.
The best advice I ever received:
I’m not sure of the exact source but I have always subscribed to
the philosophy of, “don’t ask anyone to do anything that you
wouldn’t do yourself.” Having the good fortune of doing just
about every job in the bank, I believe that I can relate pretty
well to most of the employees of the bank. Let’s face it, everything
that a banker does during the day is not always pleasant,
it just is not fun to turn down a loan request or to deal with an
irate or disrespectful customer. I believe that it is unfair to ask
an employee to do something that you have not done in the
past or are not willing to do yourself.
Advice you would give young bankers:
Do not get discouraged with the media “bank bashing” that
has been prevalent in recent years. We all know that traditional
bankers had nothing to do with the financial debacle
that occurred a few years ago. I believe that the historical track
record of traditional banks and their commitment to the communities
they serve is again being recognized by the American
public. It was encouraging to see that a recent Gallup Poll
showed a nice pick up in consumer approval ratings for the
banking industry. Let’s keep doing what we have always done,
taking care of the banking needs of the businesses and individuals
in our communities.
Something else I would like to accomplish:
I have much more that I want to accomplish in my professional
career. However, one industry wide initiative that I would like
to be a part of is a movement to roll back some of the massive
regulation that is being dumped upon the industry. As the
regulations spawned by Dodd-Frank start to materialize, we
will see mountains of new regulations coming from both our
primary regulators and the new CFPB. I believe the WVBA
should join forces with the American Bankers Association and
other trade organizations to fight against unnecessary and
overly burdensome regulations. I would like to be a part of
that fight.
Something about me not everyone knows:
I love to get my hands dirty. I am a true weekend warrior and
on Friday afternoons I shed by buttoned down banker persona
and dive into a home project. Most bank customers don’t even
recognize me when I’m in Lowe’s on Saturday morning in my
cargo shorts, tennis shoes, t-shirt and baseball cap. Working
with my hands is not only enjoyable, it is also a great stress
reliever – plus I’m pretty good at it, at least in my own mind.
My wife thinks I try to be an over-achiever, especially at yard
work, and I’ve even had threatening calls from neighborhood
husbands to dial it back a notch because their wives are pressuring
them to get outside. I’ve heard rumors that I’m known
as the “mulch-master” since I put down about three dump
trucks of mulch each spring.
About my family:
Cathy and I have been married for 39 years and were high
school sweethearts. Cathy and I have been together my entire
working life. She has shared all of the many good times and is
my support system when things aren’t so good. We have been
blessed with two beautiful daughters, Melissa and Angela, who
are both married. Melissa and her husband, David, have two
children, Natalie and Nicolas, while Angela and her husband,
Mark, are expecting their first child (a boy) in November.
Cathy and I are fully immersed in grand parenting and spend
every possible minute we can with the grandchildren.
Outside interests:
In addition to my weekend warrior projects, I also enjoy
playing golf. While I can’t say golf is relaxing, it certainly is
challenging and I thoroughly enjoy the sport and the beautiful
surroundings on golf courses. I am also an avid fan of college
football and basketball. While both of my daughters attended
Virginia Tech, my heart is in West Virginia so I am also a
Mountaineer fan. I’m glad that the Hokies and Mountaineers
no longer play each other so I don’t have the conflict pulling
for the school that has a significant amount of my money and
the one that has my heart. Of course, the number one interest
that I have outside the bank is that of being granddad – my
most enjoyable pastime.
Community involvement:
I have been involved with many organizations over the years
and served on the boards of civic and charitable groups. Currently,
I am a Rotarian and a Board member for the Virginia
Chamber of Commerce, the Greater Bluefield Chamber of
Commerce, and the Bluefield State College Foundation.
10
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The Pitfalls of Social
Networking for Employers:
Why Employers Should Have Social Networking Policies
By Justin M. Harrison, Bowles Rice McDavid Graff & Love LLP
Social networking presents opportunities and challenges for
employers. To effectively overcome the challenges and take
advantage of the opportunities, employers should carefully
consider adopting social networking policies.
The popularity of social media suggests
that the phenomenon is not a
passing fad. Individuals young and
old, businesses, politicians and governments
are all looking to social media to
stay connected, stay informed and disseminate
information. For both savvy
and unwary employers, though, social
media can be a problem.
As with many things in our new digital
world, social media seems to encourage
people of all ranks and profiles to type
comments which they would otherwise
think twice about before uttering out
loud in the workplace. Do you find your
CEO’s political views to be a tad loony
Do you find your co-worker attractive
or perhaps she just annoys you Is your
company losing money For many, posting
comments on these topics for their
“friends” to see is almost second nature.
For some, this information is often
posted without prompting.
For reasons obvious and subtle, employers
should consider adopting social
networking policies - not to discourage
their employees from participating in
social media, but to encourage them to
think twice before posting something
online. In a perfect world, a model social
networking policy should consist of a
simple message: “Think twice before you
type.” Unfortunately, life is not so simple
for employers. In order to avoid potential
pitfalls, effective social networking
policies should be drafted in a manner to
address the following considerations:
• Breadth – should the policy cover
content or the activity Typically,
social networking can present two
types of concerns for employers:
(i) how employees are portraying
the employer online, and (ii) how
employees are spending their time
at work. The second concern can
usually be addressed through a
general computer usage policy.
• Marketing – employers need to
consider whether they want employees
12
www.wvbankers.org

to identify with their business when networking online.
Does the social networking activity enhance the business
profile or otherwise contribute to the company The
most basic social networking policy should be very clear
in informing employees that their posts as an employee
can affect how their employers are perceived. At a
minimum, employees should be informed that they will
be held accountable for the manner in which they portray
their employer online. As an alternative, employers may
determine that the marketing benefit of having their
employees identify with the employer through social
networking is of limited utility, and that employees will
be prohibited from identifying or affiliating with their
employers in a social networking environment.
• The Message – employers should adopt social networking
policies that clearly explain the risks associated with
an employee’s online publication of information related
to their employer. Employees should understand that
information they post online might be grounds for
disciplinary action. If employers want their employees
to engage in social networking in order to enhance the
profile of the business, then careful consideration needs to
be given regarding the targeted audience and the type of
message that needs to be conveyed.
• Human Resources – social networking policies should
be drafted with an eye toward upholding the employer’s
values by maintaining the integrity of other corporate
policies. Employees’ online activities can violate other
corporate policies, especially those related to confidentiality
or harassment; therefore, employers should consult with
human resources personnel in drafting these policies.
• Other Considerations – despite the need for adopting social
networking policies, employers should tread carefully in
terms of how they monitor employee’s social networking
activities. Broad social networking policies may trigger
scrutiny by the National Labor Relations Board if the policy
can be interpreted to impede an employee’s rights to discuss
working conditions under the National Labor Relations Act.
In sum, the purpose of a social networking policy is not to
encourage an employer to act as “Big Brother.” Rather, the
goal of a social networking policy is to protect the employer -
protect its brand, maintain its obligations to foster a workplace
free of harassment, and promote the efficacy of other important
corporate policies. Communication is key. Adopting
and explaining a social networking policy will go a long way
toward avoiding many pitfalls.
Should you require more information, please feel free to contact the
author, Justin M. Harrison, directly at (304) 347-1785 or via e-mail at
jharrison@bowlesrice.com. Justin is a partner in the Charleston office
of Bowles Rice McDavid Graff & Love LLP. He is a member of the firm’s
Labor and Employment Law group.
Resourceful. Responsive. Reliable.
Do business with someone
who thinks like you.
www.CBBonline.com 804.239.0452
fall 2011 13

Should you require more information, please feel free to contact the
authors, Sandra M. Murphy at (304) 347-1131 or via e-mail at smurphy
@bowlesrice.com, or Amy J. Tawney at (304) 347-1123 or via e-mail at
atawney@bowlesrice.com.
Ms. Murphy and Ms. Tawney are partners in Bowles Rice McDavid
Graff & Love LLP specializing in banking and commercial law. Bowles
Rice McDavid Graff & Love LLP is general counsel to the West Virginia
Bankers Association.

WVCCPA — continued from page 6
debt collector has an obligation to attempt to communicate
with the alleged attorney before resuming communications
directed at the customer. 9
Fifth, another defense is found in the Unfair and Deceptive
Acts or Practices (“UDAP”) provisions of Article 6 of the
WVCCPA that requires the consumer to follow statutory
procedure before a claim will be considered valid. The UDAP
provisions contain an express statutory prerequisite to a consumer
bringing a private cause of action. A plaintiff may not
commence a UDAP claim without first sending the intended
defendant notice of the alleged violations claimed and giving
the defendant at least 20 days from receipt of the notice to cure
such violations. 10 If the statutory notice was not given to the
defendant, there is not an actionable cause of action under the
UDAP provisions against that defendant. 11
In addition to the defenses identified in the WVCCPA, common
law defenses (such as laches, standing, comparative
negligence, and waiver) also are available.
While the WVCCPA may feel like it applies “strict liability” on
creditors for violations, creditors should rest assured that they
do have a number of the defenses that they can assert under the
WVCCPA to shield from liability. Next issue, we will focus on
the damages that a person may be entitled to under the Act.
1
Id. at 5-101(1).
2
Id.
3
Id. at 5-101(7).
4
Id. at 5-101(8). This defense in the WVCCPA contains a significant difference from the Fair
Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq. (“FDCPA”). Under the FDCPA,
the defense is available if the violation is unintentional and the result of a bona fide error of
fact notwithstanding the maintenance of procedures reasonably adapted to avoid any such
violation or error. Under the WVCCPA, the defense is phrased in the disjunctive, thereby
creating two defenses (the violation was unintentional or the result of a bona fide error of fact
notwithstanding the maintenance of procedures).
5
Id.
6
Syl. pt. 1, Casillas v. Tuscarora Land Co., 186 W. Va. 391, 391-92, 412 S.E. 2d 792, 792-93
(1991).
7
W. Va. Code § 46A-2-102(12); see Mem. Op. and Order, Payne v. Green Tree Servicing LLC,
2:05-cv-00293 (S.D.W. Va. March 7, 2006).
8
W. Va. Code § 46A-2-122(b).
9
Id. at 2-128(e).
10
Id. at 6-106(b). However, one judge in Raleigh County, West Virginia, recently ruled that
a plaintiff may commence litigation without first sending the required notice and that the
statute can be satisfied by merely staying the litigation for 20 days.
11
Perry v. Tri-State Chrysler Jeep, LLC, No. 3:08-0104, 2008 WL 1780938, at *4 (S.D.W. Va.
April 16, 2008).
Angela L. Beblo and Patrick R. Barry are associates in the Consumer
Finance Litigation Group at Spilman Thomas & Battle,
PLLC. Ms. Beblo and Mr. Barry routinely represent, counsel,
and defend financial institutions and other creditors in federal
and state courts involving alleged violations of the WVCCPA
and federal consumer protection laws in connection with home
loan mortgages, unsecured loans, automobile financing, credit
card accounts, and consumer credit sales. You may contact Ms. Beblo at 304.340.3852,
abeblo@spilmanlaw.com, or Mr. Barry at 304.340.3884, pbarry@spilmanlaw.com.
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A significant change from the current
disclosure requirements will be
the requirement to provide information
on the loan portfolio and the
related allowance for loan losses on
a disaggregated basis. These levels
are referred to as “portfolio segment”
and “class of financing receivables”.
A class of financing receivables is
generally a further disaggregation of
a portfolio segment. In other words,
you will need to provide a more detailed
picture of your loan portfolio
composition in the bank’s financial
statement footnotes.
Is Your Bank Ready
for Accounting
As the end of the third quarter of 2011
quickly approaches, banks should be
ensuring they have devoted sufficient
resources to address 2010 modifications
to an accounting standard that will have
a significant impact on the financial
statement disclosures about their loan
portfolio and the related allowance for
loan losses valuation account.
On July 21, 2010 the Financial Accounting
Standards Board issued
Accounting Standards Update (ASU)
Standards
Update No. 2010-20 – The New Credit
Quality Disclosures
By Christopher S. Nice, CPA, CISA, P.L.L.C. Member Arnett & Foster, P.L.L.C.
No. 2010-20, Disclosures about the
Credit Quality of Financing Receivables
and the Allowance for Credit Losses,
which amends Accounting Standards
Codification Topic 310, Receivables, by
requiring more robust and disaggregated
disclosure about the credit quality
of a bank’s loans and its allowance for
loan losses. These new disclosures
will significantly expand the existing
requirements and are focused on providing
transparency regarding a bank’s
exposure to loan losses.
The objective of the amendments
in the ASU is for a bank to provide
disclosures that facilitate financial
statement users’ evaluation of: (a) the
nature of credit risk inherent in the
bank’s loan portfolio; (b) how that risk
is analyzed and assessed in arriving
at the allowance for loan losses; and
(c) the changes and reasons for those
changes in the allowance for loan
losses. As such, a bank is required to
provide the following existing disclosures
about its loan portfolio on a
disaggregated basis:
• A schedule of the activity in the
allowance for loan losses from the
beginning of the reporting period
to the end of the reporting period
on a portfolio segment basis (the
level at which a bank develops and
documents a systematic method for
determining its allowance for loan
losses), with the ending balance
further disaggregated on the basis of
the impairment method.
• For each disaggregated ending
balance, the related recorded
investment in loans.
• The nonaccrual status of loans by
class (a disaggregation of portfolio
segment based on initial measurement
attribute, risk characteristics, and a
bank’s method for monitoring and
assessing credit risk).
• Impaired loans by class.
Accounting Standards
— continued on page 19
18
www.wvbankers.org

Accounting Standards — continued from page 18
Further, a bank is required to provide the following new
disclosures about its loan portfolio:
• Credit quality indicators of loans at the end of the reporting
period by class.
• The aging of past due loans at the end of the reporting
period by class.
• The nature and extent of troubled debt restructurings that
occurred during the period by class and their effect on the
allowance for loan losses.
• The nature and extent of loans modified as a result of
troubled debt restructurings within the previous 12 months
that defaulted during the reporting period by class, and their
effect on the allowance for loan losses.
• Significant purchases and sales of loans during the reporting
period disaggregated by portfolio segment.
It is expected that management will need to design and implement
new and enhanced processes to meet the disclosure
requirements of this new standard. These enhancements
will include developing new and modified reports from the
information technology system and making modifications
to various spreadsheets. Management may need to implement
completely new processes to obtain some of the data
needed to meet the disclosure requirements. If your bank
has not started to accumulate the information required for
these new disclosures, we strongly encourage you to devote
the necessary resources to do so immediately and not
wait until the end of the year, because it may be too late to
capture the information needed to be disclosed if the reports
are not generated until after year end.
For public companies, the amendments that require disclosures
as of the end of a reporting period were effective
for periods ending on or after December 15, 2010. The
amendments that require disclosures about activity that
occurs during a reporting period were effective for periods
beginning on or after December 15, 2010. For nonpublic
companies, the amendments are effective for periods ending
on or after December 15, 2011. In other words, all of
this is applicable for the December 31, 2011 financial statements
so the time is now to get ready for these increased
disclosures.
ASU 2010-20 is available in full at www.fasb.org.
Christopher Nice is a P.L.L.C. Member of Arnett & Foster, P.L.L.C., Certified
Public Accountants, in Charleston, West Virginia. A Certified Public
Accountant and Certified Information System Auditor, Mr. Nice has over
fifteen years experience in providing audit and consulting services in the
financial institutions industry. Mr. Nice can be contacted at 800-642-3601
or through email: chris.nice@afnetwork.com.
fall 2011 19

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Calendar of Events
Register online at www.wvbankers.org
Live Seminars & Schools
September
13 New Accounts Documentation and Compliance
14 & 15 Call Report Preparation
20 How to Improve Your Collection Department
27 & 28 Consumer Lending School
29 Loan Portfolio Management
October
4 Investigative Forensics and the Banking Industry
9 – 14 GSB Financial Managers School
15 – 21 ABA National Compliance School
17 Introduction to Bank Secrecy Act
18 & 19 BSA/AML School
19 ACH Compliance, Bridgeport, Co-Sponsored with PBS
20 ACH Compliance, Charleston, Co-Sponsored with PBS
19 & 20 Residential Real Estate Lending School
23 – 28 ABA National Trust School
25 & 26 Internal Audit School
November
2 Compliance Update, Charleston, Co-Sponsored with PBS
3 Compliance Update, Bridgeport, Co-Sponsored with PBS
15 & 16 CFO/CPA Conference
29 & 30 Commercial Lending School
Webinars – Both Live and Recorded
September
13 Excelling at Coaching
13 Appraisal Review for Residential Mortgage Decisions
14 Subpoenas, Summonses, Garnishments, Tax Levies, Etc.
15 Safe Deposit Liability/Security
15 Commercial Real Estate Loan Documentation
October
4 Frequent Mistakes in Lending Compliance
11 Power of Attorney & Living Trust
14 Fighting Payments Fraud
18 Lending to Municipalities
20 Robbery Preparedness
25 Professional Credit Analyst
27 IRA Basics
November
1 Early Warning Signs of Problem Loans
2 Business Accounts: Authority and Liability
3 Home Equity Lines of Credit
8 What to Do When a Customer Dies
8 Top 10 Loan Documentation Mistakes
9 Achieving Teller Excellence
15 Staying Up-to-Date with BSA & OFAC
16 Tool Kit of Best Customer Service Practices
22 HMDA
December
6 IRS Information Reporting
6 So You’re a New Supervisor
8 Top 10 Most Frequently Asked Safe Deposit Questions
13 IRA Audit
Graduate School of Banking Online Senior
Management Seminars
September
20 The ALCO Process – The Board Role
21 IT Risk Assessment
22 Credit Governance
22 Growing Properly-Placed, Longer-Term Core Deposits
28 Regulator Hot Buttons for IT Security
28 Strategies for Building a Better Board
October
4 Mergers and Acquisitions in the Current Environment
4 Current Trends in Agricultural Lending
5 Developing a Risk Mitigation Strategy
5 Strategic Planning for a New Environment
11 Business Continuity & Disaster Recovery
12 IRA Reporting
12 Risk Management for Community Banks
13 Conducting a Business Impact Analysis the Right Way
13 Optimizing Pricing Decisions in ALCO
18 Money-Saving, Money-Making Marketing Ideas
19 Financial Statement Analysis
20 Update on Regulatory Enforcement Actions
25 Commercial Real Estate Appraisals
25 Keys to Understanding Personal Cash Flow from Tax Returns
November
2 Creating Compelling Advertising for Community Banks
2 Eight Habits of Effective Bank Managers
9 IRA Beneficiary Distributions
10 The Next Generation of Customers
17 Ways to Market Your Bank Online
22 Global Cash Flow
22 Monitoring and Updating Real Estate Values
22 A Practical Guide to Consumer Lending
30 Understanding and Processing Transfers and Rollovers
December
7 IRA Required Minimum Distributions
7 Practical Approach to Anticipating and Managing Interest Rate
Risk
14 IRA Contributions
Visit www.gsb.org or www.wvbankers.org for
additional online seminars.
fall 2011 21

WVBA 118th
Annual Convention
22
www.wvbankers.org

fall 2011 23

Why Every
Bank Needs a
Whistleblower Policy
By Bernie Deem, DeemHR
As often happens, no one had all the facts
but acted using incomplete information.
That is where a good policy comes in.
Most companies have complaint investigation
procedures that work well and are
accepted by employees. Whistleblower
policies are different. They provide extra
reassurance that the company wants to
know about illegal activities and wants
to deal with them in the right way. It’s
a great way of saying “You don’t have to
sue us or go to a government agency if
you think something wrong has happened”
without saying it.
It could have been a really ugly lawsuit
– a downright brawl that could have
severely impacted the Company’s
stakeholders. Add to that the years
required untangling the issues, investigating
accusations, dealing with legal
nightmare stuff, and lots of other issues
that sap time, energy, and money. Unfortunately
this company I was working
for didn’t realize they needed a whistleblower
policy before it was too late. It’s
a smart thing to do even if Dodd-Frank
didn’t require it.
Because of the mess they were in, the
company realized they needed a proper
investigation and I was hired to do that
because of some HR implications. The
result was that there had been a huge
misunderstanding on everyone’s part –
the employee(s), human resources, and
management too. In the case I’m describing,
the employees got a little paranoid
because they thought they had uncovered
something illegal that they were duty
bound to report, human resources began
working out of fear of a lawsuit and started
documenting and monitoring everyone’s
actions, and management kept trying to
explain it was all being misconstrued.
To their credit, once management looked
into what occurred they realized several
things they should have done differently.
Before my involvement they talked with
employees and explained what the company
had found in its own investigation.
But after so much distrust, the employees
just did not believe them. Employees
thought since it was the company’s investigation,
the result was pre-ordained to be
in favor of the company.
And because of the way things were going,
the involved employees were terrified
they were going to be subject to adverse
treatment or get fired even though they
had done the right thing by reporting it.
It wasn’t until the company hired an objective,
third party to talk with the involved
persons that the core issue was resolved.
A whistleblower policy adds an extra
degree of insurance that employees will
be protected from being fired, subjected
to harassing treatment, reprisals, or be
adversely affected by any form of retaliation.
The policy is intended for serious
concerns such as actions that may lead
to incorrect financial reporting, unlawful
actions, serious improper conduct,
or actions violating harassment and
discrimination laws.
Bankers are concerned about complying
with regulations regarding whistleblowing
contained in the Dodd-Frank. But
the fact is there are other regulations
that make similar demands, for instance,
the Sarbanes – Oxley Act, the
False Claims Act, and other regulations
that call for certain protections.
Here are some steps your bank might
want to take.
1. Familiarize yourself with the
relevant laws that require specific
whistleblower protection. (Hint: Most
OSHA complaints must be reported
directly to OSHA).
2. Add a Whistleblower Policy to your
company policies that details how
whistleblower situations will be
handled. Make certain that it ensures
no one will be retaliated against for
making a legitimate complaint and
that employees know you are firmly
behind it.
3. Provide a non-threatening method
Whistleblower — continued on page 26
fall 2011 25

Whistleblower — continued from page 25
for employees to encourage them to make the organization
aware if they think there is a problem that meets the
definition of whistleblowing.
4. Consider the use of a third policy entity to provide an
avenue for receiving whistleblower complaints. Make
certain it is their practice to recommend other remedies
before recommending you hire a lawyer but that that they
can also recognize when legal advice is imperative.
5. Make sure your complaint receiver understands your
business well enough not to make a big issue out of
something minor.
6. Communicate your policy to employees on how to
report while making it clear the type of complaints that
are appropriate for this special situation and that most
complaints need to use your already established procedure.
And a final suggestion – don’t wait. You never know what
could be brewing . . .
Citizens Bank of West Virginia
Thomas K. Derbyshire was named president
and CEO of the bank, effective August 1,
2011. He succeeds William T. Johnson, Jr.,
who retired after forty-eight years of service
to the organization. He also serves as vice
president and treasurer of the bank’s holding
company, Citizen’s Financial Corp.
First National Bank, Ronceverte
Matthew L. Burns has been officially named
the bank’s president and CEO. He had served
in the role of president and CEO since
December 2010. Prior to that role, Burns was
First National Bank’s chief financial officer
for more than 12 years.
The author, Bernie Deem, is the owner of DeemHR, a regional consulting firm with specialists
in support services for financial institutions. DeemHR has recently begun a whistleblowing
service that provides the full spectrum of needs for whistleblowing compliance
and has resources available when an investigation is required. (Disclosure: A lawyer is
available to DeemHR for any questionable situations, but our specialists are not lawyers.)
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26
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the most comprehensive array of audit, tax, consulting/compliance and IT services
of any firm. And because we are West Virginians with over a half century of service,
you know you can trust our reputation and counsel....all the way to bank.
Contact: Jack Rossi, Member
AF Center • 101 Washington Street, East
Charleston, West Virginia 25301
304.346.0441 • 800.642.3601

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