Independent Banker - February 2018 - 66

Risks & Rules
IT PAYS TO PARTICIPATE
Members that use ICBA Services Network
programs have a 26 basis point higher
ROA and a 45 basis point higher ROE than
community banks that don't. icba.org
______
appreciation for the regulatory
environment, " Duggan says. " They're
audited by banking regulators, and
they want to make sure they're doing
everything by the letter of the law. "
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A choice of exemptions
One of the most striking changes
to come out of the JOBS Act is that
private companies can raise higher
levels of capital than ever before
through Regulation A+, which allows
a company that meets certain criteria
to raise up to $50 million in a given
year. Paltrowitz notes that community
banks often turn to Reg A+ when
facing a merger or acquisition.
Greyson E. Tuck, attorney and
consultant for Gerrish Smith Tuck,
PC in Memphis, Tenn., says that
while most community banks rely on
Reg D, " under the right set of circumstances,
Reg A+ works and makes
sense for community banks. "
Tuck explains that Reg D predates
the JOBS Act and is typically the best
choice for community banks as long
as they can raise the needed capital
within its parameters. " The path of
least resistance for community banks
is almost always a Reg D 506 offering, "
he says.
Regulation Crowdfunding (Reg
CF) is perhaps the JOBS Act
development that has received the
most media attention, but it has not
proven particularly popular with
community bankers.
" Crowdfunding [under Reg CF] is
rare for community banks, because
you can only raise $1 million in any
12-month period, " Duggan explains.
" So, by the time you pay your lawyers
and whoever you need to run your
crowdfunding portal, there's not
much left.
" Reg CF is more for small startups
LoanOfficerHub.com
[that are] getting their first round
of seed money [and] need to prove
their concept. "
While deregistering is right for
some community banks, others are
bucking the trend and launching
IPOs. Cadence Bancorporation, a
http://www.icba.org http://www.LoanOfficerHub.com
Independent Banker - February 2018

Table of Contents for the Digital Edition of Independent Banker - February 2018
