Sioux Falls Estate Planning Council

April 16, 2015

Division of Banking

1

SD Banking Profile

• State Chartered Institutions: 57

• Total Assets: $21,473,657• Largest Bank: Great Western Bank, Sioux Falls

($9,636,848,000)

• Smallest Bank: Farmers State Bank, Hosmer ($21,573,000)

• Home Federal recently chartered as SD bank

2

SD Banking Profile

3

19971998

19992000

20012002

20032004

20052006

20072008

20092010

20112012

20132014

30

40

50

60

70

80

90

150

200

250

300

350

400

450

SD Bank Charters vs. Bank Locations

# of Charters

# of Locations

# of Charters # of Locations

SD Banking Profile

4

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

Total Assets vs. Total Deposits

Total AssetsTotal Deposits

Number of Banks by Asset Size

14

1515

2

7

2 1Number of Banks

Under $50M$50M-$99M$100M-$299M$300M-$499M$500M-999M$1B-4.99BOver $5B

5

Composite Ratings - Banks

6

12/31/2010

12/31/2011

12/31/2012

12/31/2013

12/31/20140

10

20

30

40

50

60

70

Composite Rating Distribution

12345

*

Trust Company Profile

7

96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 $-

$20,000,000,000

$40,000,000,000

$60,000,000,000

$80,000,000,000

$100,000,000,000

$120,000,000,000

$140,000,000,000

$160,000,000,000

$180,000,000,000

0

10

20

30

40

50

60

70

80

Trust Assets # of Trust Companies

Billions Trust Companies

Trust Department Profile

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02 03 04 05 06 07 08 09 10 11 12 13 14$0

$1,000,000,000

$2,000,000,000

$3,000,000,000

$4,000,000,000

$5,000,000,000

$6,000,000,000

$7,000,000,000

5

6

7

8

9

10

Trust Assets # of Trust Departments

Billions Trust Departments

Public vs. Private Trust Companies

9

2011 2012 2013 2014 Pending0

10

20

30

40

50

60

70

80

34 38 4147

1

2226

2829

2

Public Companies Public Pending

Tota

l Tru

st C

ompa

nies

Public vs. Private Trust Assets

10

2011 2012 2013 20140

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

160,000,000

180,000,000

Private Companies Public Companies

Tota

l Ass

ets

(000

)

Total Assets by Type

11

2011 2012 2013 20140

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

160,000,000

180,000,000

Custodial Assets Directed Assets Discretionary Assets

Tota

l Ass

ets

Trust Company Situs

12

Active Presence Contracted Presence Limited Presence Employees0

5

10

15

20

25

30

4

22

3

19

26

3

Private Companies Public Companies

# of

Tru

st C

ompa

nies

Trust Company Composite Ratings

13

Strong Satisfactory Unsatisfactory Not Rated0

5

10

15

20

25

30

35

40

45

4

22

5

160

19

0

11

Private Companies Public Companies

Examination Statistics

14

2011 2012 2013 20140

5

10

15

20

25

30

35

0

1

2

3

4

5

6

7

10 10

15

11

10

4

6

10

Private Exams Public Exams Full-Time Trust Examiners Out-of-State Exams

# of

Exa

min

ation

s

Trust Examiner Tenure

15

12/31/2011 12/31/2012 12/31/2013 12/31/20140

1

2

3

4

5

6Trust Examiner Tenure

10+ years3-10 years1-3 years<1 yearWriting Exams

# of

Exa

min

ers

2015 Legislation

• DLR –Banking Bills • HB 1025 – Bank Bill• HB 1027 – Money Lender Bill• HB 1028 – Money Transmitter Bill• HB 1051 – Trust Task Force Bill

• Other Bills of Interest to the Division• HB 1084 – Public Deposit Protection Commission• HB 1209 – Credit Card Notice of Change in Terms

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2015 Legislation Cont.

• HB 1025 – Bank Bill• Sections 1-9 include form and style cleanup, cross-

reference fixes, commission to director changes• Section 10 changes notice process for failed banks• Supported by Banking Commission

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2015 Legislation Cont.

• HB 1027 – Money Lender Bill• Allows companies to license through NMLS• Defines “business of lending money”• Defines “duration”• Exempts state and local political entities• Moves renewal period to calendar year end• Clarifies & enhances enforcement authorities• Makes loans made by unlicensed entities partially void

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2015 Legislation Cont.

• HB 1027 – Continued• Applies select portions of the Fair Debt Collection Practices

Act to 1st Party Collectors• Supported by Banking Commission

• HB 1028 – Money Transmitter Bill• Allows Money Transmitters to license through NMLS• Supported by Banking Commission

19

2015 Legislation Cont.

• HB 1051 – Trust Task Force Bill • Sections 1-8 are Trust Company Specific• Sections 9-20 make changes to Title 55• Sections 21-27 update Chapter 21-22

20

2015 Legislation Cont.

• HB 1051 – Trust Task Force Bill • Trust Company Sections

• 1, 2, 4 & 6 - General clean up • 3 - Changed “quorum” to “majority” for governing board

meeting requirement in SD for public trust companies• 5 - Allows municipal bonds and other investments for trust

company pledge to the Division• 7 - Allows Division to share information with other regulators for

removal and prohibition orders• 8 - Requires charter dissolution within 30 days of sale/merger

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2015 Legislation Cont.

• HB 1051 – Trust Task Force Bill • Title 55 Sections

• 9 & 10 - Creates a standard definition of “beneficiary” for use throughout Title 55 and removes a duplicate definition (other definitions still present)

• 11 - Cleanup• 12 & 13 - Splits 55-1-36 into separate code sections• 14 - Allows governing instrument to expand, restrict or eliminate

certain trust and trust administration provisions (does not apply to provisions against self-dealing)

• 15 - Allows grantor to include arbitration language in trust document

22

2015 Legislation Cont.

• HB 1051 – Trust Task Force Bill • Title 55 Sections

• 16 - Clarifies trustee disclosure requirements related to investments in affiliates when court order or trust document requires affiliate investment

• 17 - Adds trust protector to the class of parties that can request a trustee be removed

• 18 - Raises the threshold for terminating noncharitable trusts from $50,000 to $150,000

• 19 & 20 - Adds LLC’s to the definition of person in 55-4-1 and makes clear that any person in 55-4-1 can be a beneficiary or transferor in Chapter 55-16 (APT Chapter)

23

2015 Legislation Cont.

• HB 1051 – Trust Task Force Bill • Court Supervised Trust Sections (Chapter 21-22)

• 21 - Clarifies which parties to a court supervised trust are entitled to notice of court proceedings (creditor/claimant must have previously asserted a claim)

• 22 -26 - Provides to a trustor certain rights to intervene in any court proceeding related to a supervised trust and establishes procedures for resolving objections by interested parties and the waiver of notice in certain circumstances

• 27 - Applies the rules of civil procedure in Title 15 to any action brought under chapter 21-22

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2015 Legislation Cont.

• Bills Watched by DLR - Banking• HB 1084 – Public Deposit Protection Commission

• Allows certificates of deposits owned by the bank to be pledged as eligible collateral to secure public deposits

• HB 1209 – Credit Card Notice of Change in Terms• Better aligns SD law with that of the CFPB

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Looking Forward

• Possible Initiated Measure on Usury• Division of Banking Guidance on Trust Service Offices• Division of Banking Annual Trust Memo• Situs Requirements for Public Trust Companies

• 51A-6A-11.1 requires full compliance on 7-1-15• Trust Task Force 2015 – Possible Division Items

• Trust Company Resolution Fund Structure• Public Trust Company Office Space Requirements• Continued clean up of Chapter 51A-6A

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Division Locations

• South Dakota Division of Banking1601 N. Harrison Avenue, Suite 1Pierre, SD 57501Ph: 605-773-3421; Fax: 1-866-326-7504

• 1500 W. 51st Street, Suite 102 Sioux Falls (Currently being expanded)

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