Mainebiz

V O L . X X I N O. X X V I I Mainebiz: How do you think banks are doing now compared to 2008? Christopher Pinkham: People were vilifying the banking industry for the past 7-9 years. We used to be seen as helpful. We were partners. Now we're public enemy No. 1. So there's inter- est in attracting millennials who will need financial guidance. Also, we are seeing our age demographics at banks reflective of the state. ere are 9,100 employees in Maine banks. A lot are 55 or older, so that will open up more opportunities for jobs in the future, including in information technology. ere are 31 retail banks in the state of Maine. Of those, there are 26 that are Maine-headquartered [including the recent Camden National/Bank of Maine merger.] eir footings [assets] are about $25 billion. We know that all the banks collectively in Maine have 501 retail locations, which means we cover every corner of the state. MB: Do you think the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 accomplished what it set out to do? CP: e standards by which we do any kind of lending have dramatically changed, because prior to Dodd-Frank, the regulated industry, namely the banks, were basically sound underwriters. And then there were the other 50% to 60% of the loans made by the unregulated industry, the mortgage brokers, online borrowing companies, in some ways the companies that were built and designed to circumvent the banking system. ey were supposed to follow federal rules but there was no enforcement. So after the mess of 2008 and 2009, Dodd-Frank was passed and we slowly have rolled out some 20,000 pages of regulations. We're only half-way there. It is to benefit consumers, but more importantly it's to create a level playing field. Dodd-Frank has done a number of things. It's also made running a finan- cial institution much more expensive. MB: What are your priorities for Maine's banking industry? CP: First, the cybersecurity and fraud issues with the EMV chip are on every- one's mind. at's because it's an expen- sive part of our business that's not under our control. With the change in the laws in October and the rollout of chip-pro- cessing equipment for merchants, we're getting there. But there is a learning curve. It's the chip, not the PIN. e chip is card-present. So you've got a card, you put it into a machine, so electroni- cally we've got a match. It's a one-time, transaction-encrypted match. And for anyone who says this is going to solve all the problems, you need to remember how many transactions are done on the Internet. ere's no card present and no chip involved. We're not dealing with that part of the problem yet. e two messages the industry's been trying to deliver are: everyone has to work together on this and there's a responsibility for the card issuer, the retailer and the consumer. And we need consumers to make sure they check their statements and provide us with good and current telephone numbers so we can contact them when there's a problem. We need merchants to roll out the proper equipment and have the right security. And we need the people who make the plastic to beef up their capacity to make cards. We're still strug- gling to get enough cards. P H O T O / T I M G R E E N WAY State of Maine's banking industry Maine Bankers Association head shares his Top 5 priorities B y L o r i V a L i g r a F O C U S » C O N T I N U E D F R O M C O V E R Christopher Pinkham, president of Maine Bankers Association, in Portland. 9/30/15 (9 months) 12/31/14 12/31/13 12/31/12 Residential real estate loans (% annual growth) 2.35% 4.09% 5.67% 4.03% Home equity loans (% annual growth) 4.78% 8.04% 1.67% –0.14% 90-days delinquent — all loans 0.96% 1.19% 1.37% 1.73% Commercial real estate (% annual growth) 5.26% 6.86% 5.84% 6.47% Commercial and industrial loans (% annual growth) 4.15% 14.5% 7.79% 6.12% Net income before extraordinary items 0.67 0.62 0.49 0.64 Performance by Maine-headquartered banks S O U R C E : FDIC Call Reports/Maine Bankers Association N OV E M B E R 3 0 , 2 0 1 5 24

• Cover