INSIDE What's Your Game Plan? IBA Annual Convention 2014 Story on page 10. Hoosier Banker OCTOBER 2014
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Indiana Bankers Association Officers, Directors & Staff IBA Officers Chairman ................................................................ David W. Heeter, MutualBank, Muncie FirstVice Chairman .......................................... Larry W. Myers, First Savings Bank, Clarksville SecondVice Chairman ........................... Michael H. Head, First Federal Savings Bank, Evansville Immediate Past Chairman ................................. James C. Marcuccilli, STAR Bank, Fort Wayne President and Chief Executive Officer .... S. Joe DeHaven, Indiana Bankers Association, Indianapolis Constituent Directors ICBA State Director ........................................ David M. Geis, Jackson County Bank, Seymour ABA Membership Council ....................... Michael K. Bauer,Your Community Bank, New Albany Future Leadership Division President .......... Lucas White,The Fountain Trust Company, Covington Northeast Region Directors James G. Hiatt, First State Bank of Middlebury Michael C. Marhenke, iAB Financial Bank, Fort Wayne Gregory Maxwell, Farmers State Bank, Mentone Northwest Region Directors Annette M. Russell, Security Federal Savings Bank, Logansport Patrick Duffey, State Bank of Burnettsville Karen I. Miller,The Farmers Bank, Frankfort Southeast Region Directors Dennis Wayman, State Bank of Medora George W. Ferriell, Bath State Bank Archie M. Brown, MainSource Financial Group, Greensburg Southwest Region Directors Clay W. Ewing, German American, Jasper Kurt D. Rosenberger, Our Community Bank, Spencer Matthew W. Howrey, North Salem State Bank IBA Staff President & Chief Executive Officer ........................................................... S. Joe DeHaven ExecutiveVice President .............................................................. Paul W. Freeman, CAE SeniorVice President–Government Relations ........................................ Amber R.VanTil, JD Vice President–Meetings & Events ............................................ Christina M. Bennett, CMP Vice President–Government Relations ........................................................... Dax Denton Vice President–Products & Services ................................................................. Rod Lasley Vice President–Education & Training ........................................................... Laurie A. Rees Vice President–Communications .................................................................. Laura Wilson Events & Products/Services Assistant .............................................................. Susan Clark Education Meeting Coordinator ................................................................ Elizabeth Kilty Education Meeting Coordinator ................................................................. Marlene Wells Staff Accountant ....................................................................................... Timothy Fry IT and Facilities Manager ...................................................................... Tracy Wainscott Administrative Assistant ........................................................................... Michelle Long Government Relations & Communications Office Manager ............................ Joshua A. Myers Email addresses: First initial of the staff member’s first name plus last name; example: jdoe@indianabankers.org Please send news releases to: IBAcommunications@indianabankers.org Mission To advocate for and sustain an environment in which banks can succeed. Vision To provide exemplary service to members as the premier state bank trade association in the country. Values In fulfilling our mission, we will: • Maintain the highest ethics, integrity and respect for others; • Serve with professionalism, innovation and resourcefulness; • Instill passion, positive attitude and enthusiasm; • Remain mindful that the success of the IBA is judged by the success of its members. View Hoosier Banker Digital at www.ourdigitalmags.com/ publication/?m=19522&l=1. Publication Disclaimer Hoosier Banker articles are published by the IBA Service Corp., a subsidiary of IBA Holding Company Inc., that is a wholly owned subsidiary of the Indiana Bankers Association. All material published in Hoosier Banker and/or on the IBA website is the property of the Indiana Bankers Association.
5 Hoosier Banker TABLE OF CONTENTS VOLUME 98 NO. 10 6925 Parkdale Place Indianapolis IN 46254-4673 Phone: 317-387-9380 Fax: 317-387-9374 www.indianabankers.org Publisher: S. Joe DeHaven Editor: Laura Wilson Advertising: Rod Lasley Send news releases to: IBAcommunications @indianabankers.org Hoosier Banker (ISSN 0018-473X) is published monthly by the IBA Service Corp., a subsidiary of IBA Holding Company Inc., that is a wholly owned subsidiary of the Indiana Bankers Association. The magazine invites news from IBA members. Copy deadline: first of the month preceding publication. Advertising: Rates available upon request or online at www.indianabankers.org. Advertisers should provide electronic PDFs by the 15th of the month preceding publication. Hoosier Banker advertising is available to members and associate members of the Indiana Bankers Association only. Subscriptions: Hoosier Banker subscriptions are provided free of charge exclusively to members and associate members of the Indiana Bankers Association. Public access to Hoosier Banker Digital is available at www.indianabankers.org. FEATURES 6 PRESIDENT’S PONDERINGS S. Joe DeHaven, IBA 8 BOARD REVIEW Clay W. Ewing, German American, Jasper 9 IBA CALENDAR OF EVENTS CONVENTION COVERAGE 10 WHAT'SYOUR GAME PLAN? IBA ANNUAL CONVENTION 2014 Christina M. Bennett, IBA 12 RECAP OF 2014:AYEAR OF SUCCESS David W. Heeter, MutualBank, Muncie 14 LOOKING FORWARD TO SUCCESS IN 2015 Larry W. Myers, First Savings Bank, Clarksville 16 CONVENTION PHOTO GALLERY EDUCATION ROUNDUP 20 MISSION ACCOMPLISHED: LDP PARTICIPANTS MAKE LEADERSHIP STRIDES Laurie A. Rees, IBA GR SPOTLIGHT 24 ‘MIGHTY BAND OF BANKERS’ ASSEMBLES IN DC Amber R.Van Til, IBA PSP SHOWCASE 26 CUTTING DOWN ON PAPER? THERE IS A SOLUTION! Rod Lasley, IBA OPERATIONS / TECHNOLOGY 28 BIG DATA REAPS BIG REWARDS Jason Young, CIS NuPoint 30 EDUCATEYOUR CUSTOMERS ABOUT INFORMATION SECURITY Dan Hadaway, Infotex DIRECTORS / SENIOR MANAGEMENT 36 STRATEGIC BOND SWAPS: OPTIMIZING RISK AND REWARD IN INVESTMENTS Jeffrey F. Caughron,The Baker Group 38 ALTA BEST PRACTICE NO. 4: DO IT ON TIME,AND DO IT RIGHT Johnathon Biggs, Investors Title Insurance Company DEPARTMENTS 15 TAKING IT EASY 23 FROM THE BOARD ROOM 23 NEW BRANCHES, BUILDINGS & OPENINGS 27 HONORS 32 ASSOCIATE MEMBERS' CORNER 33 COMPLIANCE CONNECTION Larry C.Tomlin, Krieg DeVault LLP 34 BANKING ON COMMUNITY 35 IN MEMORY OF 39 ANNIVERSARY MILESTONES 40 BANKERS ON THE MOVE 46 ADVERTISERS INDEX 5 Hoosier Banker octoBer 2014 More than 500 attendees participated in the 2014 IBA Annual Convention.
6 Hoosier Banker October 2014 Freedom is not free. While we have all heard this statement many times in our lives, and generally accept it at face value, occasionally we need to reflect on how powerful it is. The citizens of the United States enjoy more freedom than those of any other country on earth. Our founding fathers saw to it that all citizens were vested with certain unalienable rights. These rights, enumerated so eloquently in the Bill of Rights, laid the foundation upon which this country was founded. Our brilliant leaders did not want a country of dictatorship. They did not want a country where royalty would rule over citizens and their resources. They wanted a country where citizens would have a voice – a voting voice. In 1773 a group of angry colonists were so disenchanted about not having a voting voice that they organized an act of defiance that we now call the Boston Tea Party. The event was not a revolt against taxation. In fact it took place after the British Parliament had lowered the tax that colonists would pay on tea through the Tea Act. Colonists were upset for two reasons. First, the lowered tax on tea gave monopolistic advantage to a single British trading company, the East India Company, thus threatening independent tea importers. Second, and more significantly, colonists were angry because they had no say in the Tea Act. It was imposed on them. The Boston Tea Party itself was fairly minor by militaristic standards. It lasted three hours, the total value of the tea tossed overboard amounted to what now would equate to about $1 million, and no lives were lost. But this little event made a big splash, because from it was born a plank of freedom: “No taxation without representation.”The cause of self-governance was at stake. Our government was formed with this specific right imbedded in our system. We now have the right to vote for or against those who represent our interests at every level of government. We also vest in those elected the power to tax. It is a delicate balancing act that those we elect must weigh constantly. How do they provide services to benefit the public for the least amount of tax dollars? If they do not do it to our liking, we have the right to vote them out of office the next time their names appear on a ballot. It is simple, but incredibly powerful. Other nations’ citizens vote, too, but between royalty and dictators, none have more freedom than we do. Yet with this precious gift that the founding fathers bestowed upon us, we have become unbelievably complacent citizens. I, for one, believe that voting is more than a right. It is a responsibility. FEATURE President’s Ponderings S. Joe DeHaven, President & Chief Executive Officer, Indiana Bankers Association C M Y CM MY CY CMY K With that responsibility to vote comes other responsibilities, such as becoming informed about what office-seekers believe and determining who we want to vote for based upon those beliefs. Regretfully, most people do not research those whose names are on the ballot. Most people simply ignore their right to vote. This year voter turnout is sadly expected to be very low, particularly in Indiana. We do not have a president, governor or U.S. Senate race on the ballot, so most people will not trouble themselves with voting. We do have three statewide offices up for election: secretary of state, state treasurer and state auditor. All nine of the Indiana seats in the U.S. House of Representatives are up for election. All 100 seats of the Indiana House of Representatives, and 25 or the 50 seats in the Indiana State Senate, are up for election. There also are many local races, all of which have some effect on people’s lives. That’s a lot of power that is up for grabs. Whether you base your vote on your child or grandchild’s education, the overall economy, banking issues or any of myriad other issues at every level, I urge you not to shirk your responsibility to vote. Freedom is not free. Millions of our fellow citizens for the past 200+ years have dedicated their lives to service, so that we can exercise this right to vote. Many have literally given up their lives to secure this right. It is those sacrificed lives that, in my opinion, make voting a responsibility. I am grateful to those among us who are willing to devote their time and talents by placing their names on the ballot and running for office. Surely they deserve the few minutes of consideration it takes for the rest of us to simply vote. Bankers are leaders in every community in this country. Please show your leadership on Nov. 4 by exercising your right – your responsibility – to vote, and encourage those around you to do so, as well. Freedom is not free, but voting is a small price to pay. Amplify is a public relations and grassroots tool designed to help rebuild the image of banking. Developed by the American Bankers Association, Amplify is available to all bankers, both ABA members and nonmembers, free of charge. For more information, visit amplifybankers.com, or contact Laura Wilson the Indiana Bankers Association at 317-917-8047, email: lwilson@indianabankers.org. t AmplifyYour Outreach
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8 Hoosier Banker October 2014 As I was completing my degree in accounting and finance from Lockyear College, my mother suggested that I apply for a job at Citizens National Bank in Tell City. Her advice was simple: “If you pursue a career with the bank, you will have a job for the rest of your life.” She is a very special woman and had always given good advice, so I applied. Unfortunately I was not hired, as the bank had no positions available, but I did find employment out of town as an accountant in the food services industry. By then I was a newlywed, so my wife Barbara and I moved from Tell City, our hometown, to Huntsville, Alabama. In 1978 we had returned home to raise a family, when the president of Citizens National Bank called and offered me the auditor’s position. Of course, remembering my mother’s advice, I accepted. That’s how my banking career started. Banking seemed to be a good fit for me, as it provided an opportunity to make an impact in the community and in people’s lives. Over the years I have had the pleasure of assisting many families plan and reach their individual goals through the purchase of their first homes, providing educational assistance for their children, or assisting in the growth of their businesses. This is very gratifying, and I believe is what a true community banker does every day. Working in a community bank also provided me the opportunity to experience all aspects of banking as I moved from being an auditor to a consumer lender, commercial lender, chief investment officer, chief financial officer, and currently president. This broad background and training would not have been possible in a larger organization. In 1994 I was offered an opportunity to make a larger impact in our community. Mark Schroeder called and asked if I would be interested in assisting German American Bank with the formation of a new bank, First State Bank in Tell City. Of course, I took that leap of faith and served as president and CEO from 1994 to 1999, when I moved into a position with the holding company. Currently my title is president of German American and of German American Bancorp, headquartered in Jasper. I am the chief banking officer and have responsibility for all banking functions. I work closely with our senior management team, located throughout Southern Indiana, providing oversight and guidance. I must say, I have the privilege of working with the most qualified, dedicated and professional bankers in the industry! German American’s corporate culture is critical to our organization, as it identifies who we are. We continuously strive to provide a consistent culture that promotes core values, community involvement and relationship-building, both among our employees and with our customers. While our overall German American culture unifies all of our employees, it also allows each of our regions the autonomy needed to effectively serve their specific markets. Service to our community has always been very important to me and my family. I am honored to serve this community, both through banking and through community organizations. German American encourages strong community involvement and has always supported my efforts. I have been fortunate to have had the flexibility to be involved in various areas of service throughout the years. I very much enjoy helping our communities grow, either by assisting existing businesses to strategize their models, or by working to attract new industry and entrepreneurs. It is deeply satisfying, both professionally and personally, to watch a community develop. Another area of service I enjoy is serving on the Indiana Bankers Association board of directors. Working closely with IBA, I now appreciate more fully the extent to which the Association helps the banking community, especially in the area of government relations. IBA’s advocacy gives Indiana bankers the opportunity to talk with legislators and help them understand the impact of regulations, both in the state arena and on the national level, on our ability to serve our communities. IBA lobbying efforts, combined with grassroots outreach from bankers, gives us a voice in the legislative process. I have come to appreciate the professionalism and respect our lobbying team carries in the industry. This group of individuals works tirelessly for bankers all across the state. Of course other major values of the IBA are the educational and networking benefits available through training opportunities, the Mega Conference and other offerings. The networking I have enjoyed through the IBA has substantially widened my circle of contacts and has certainly opened individual and professional development opportunities. I have also been very blessed in my home life. My wife, Barbara, and I have been happily married for 38 years. She has played a critical role in my success, while pursuing her own professional career as the mayor of our hometown. We are also the proud parents of two fantastic children. Our daughter, Micki (Kidder), is married, has three young children and lives in South Bend. She is an associate vice president of development for the University of Notre Dame. Our son, Matthew, and his wife have recently moved to Boise, Idaho, where he serves as associate vice president of development for Boise State University. Looking back, I didn’t particularly choose banking as a career, as much as it chose me. I must say that I am certainly glad it did, and that my mother was right – in banking, a person has the opportunity for a lifelong career. It’s a career I am proud of. Board Review Clay W. Ewing, IBA Southwest Region Director German American, Jasper FEATURE
CALENDAR UPDATE 9 Hoosier Banker October 2014 Calendar of events Register online at www.indianabankers.org/education-events The IBA Center for Professional Development is located at 6925 Parkdale Place, Indianapolis, 317-387-9380. Alternative Delivery Channels … Available at your convenience via Webinar, CD-ROM or On-Demand The Bank Audit Committee Responsibilities Oct. 29 - IBA Center Small Business Banker Development Program Session 4 - Reviewing Results and Perfecting Your Sales Presentations Oct. 29 - IBA Center Future Leadership Division Conference - Bridging Bankers, Building Leaders Oct. 29-30 - Sheraton Indianapolis Hotel Annual Regulatory Training for the Frontline Nov. 3 - Huntingburg Event Center Nov. 4 - Best Western Plus, New Albany Nov. 5 - Chapman’s Restaurant, Bloomington Nov. 6 - Sherman House, Batesville Nov. 17 - Best Western, Lafayette Nov. 18 - Fort Wayne Hotel Branch Management Series: Session 4 - Raising the Bar for Sustainable Growth Nov. 4 - IBA Center 2014 Community Bankers for Compliance School - Deposit and Operations Module Nov. 5-6 - IBA Center IT and Operations Officer Forum Nov. 6 - Group 1 - IBA Center Nov. 7 - Group 2 - IBA Center Human Resource Directors Forum Nov. 12 - IBA Center Small Business Banker Development Program, Session 3 - The Fundamentals of Commercial Lending Nov. 13 - IBA Center Small Business Banker Development Program, Session 4 - Underwriting Small Business Loans Nov. 14 - IBA Center Community Bankers for Compliance Series, Session 4 - Consumer Loans and HELOCs, Origination and Review Nov. 17 - Courtyard by Marriott Fort Wayne Nov. 18 - IBA Center Nov. 19 - IBA Center The Total Teller: Compliance, Security and Legal Issues Nov. 19 - IBA Center IT Security and Risk Management Conference Nov. 19-20 - Hilton Indianapolis North Hotel 2014 Midwest Agricultural Banking School Dec. 1-4 - Purdue University - West Lafayette Trust Officer / Financial Adviser Forum Dec. 2 - IBA Center Loan Portfolio Management: The Key to Success in 2015 and Beyond Dec. 3 - IBA Center 2014 Ag Clinic Dec. 4 - Purdue University - West Lafayette Lending Compliance Update Dec. 8 - IBA Center Auditing the Ability to Repay Qualified Mortgages and ARMs Dec. 9 - IBA Center Advanced Commercial Lending School Dec. 11-12 - IBA Center Analyzing Tax Returns in Self-Employed and Small Business Situations Jan. 14, 2015 - IBA Center BSA Graduate School Jan. 14-15 - IBA Center Analyzing Commercial and Industrial Business Cash Flow Jan. 15 - IBA Center Branch Management Series: Session 1 - Managing a Successful Branch Jan. 20 - IBA Center Senior Retail Lenders Forum Jan. 21 - IBA Center Advanced Compliance School Jan. 20-21 - location TBD Risk Management Officer Forum Jan. 27 - IBA Center Community Bankers for Compliance Series, Session 1 Feb. 9 - Courtyard by Marriott, Fort Wayne Feb. 10 - IBA Center Feb. 11 - IBA Center 2015 Chief Financial Officer Forum, Group 1 Feb. 17 - IBA Center Basic Banking School, Session 1 Feb. 18 - IBA Center 2015 Senior Lender Forum, Group 2 Feb. 19 - IBA Center 2015 Chief Financial Officer Forum, Group 2 Feb. 20 - IBA Center IRA Basic Issues Feb. 24 - IBA Center IRA Intermediate Issues Feb. 25 - IBA Center Indiana Deposit Account Administration March 5 - IBA Center IBA Leadership Development Program, Session 1 - It’s Simple, But It Isn’t Easy March 10-13 - Wooded Glen Executive Retreat & Conference Center, Henryville Implementing the Integrated Disclosure Rules March 16-17 - IBA Center Oct. 29 - Required Compliance Series: Regulatory Compliance for Deposit Operations, Including BSA Oct. 29 - Tips,Tricks and Trends: Lessons Learned From 2014 Regulatory Examinations Oct. 30 - Mobile Payments:WhatYou Need to Know Now, WhatYou Need to Do Next Nov. 4 - Appraisals Nov. 4 - Director Series: Developing an Effective SuccessionPlanning Strategy for Management and the Board Nov. 5 - Emerging Leaders Education:Turning Financial Statements Into Useful Ratios and Trends Nov. 5 - The Four Cs of Exceptional Supervision: Conveying, Coaching, Correcting and Celebrating Nov. 6 -Your Bank’s Loan Review Program: Meeting Risk Management Needs and Regulatory Requirements Nov. 10 - Eight-Step, No-Fail Phone Call Approach Nov. 12 - Call Report Preparation: Balance Sheet Schedules - RC, RC-E, RC-F, RC-G, RC-K Nov. 12 - BSA Series: BSA Customer Due Diligence and Enhanced Due Diligence Nov. 13 - Vendor Compliance Issues: Risk Management, Contracts and Accounting Nov. 13 - IRA Audit and Compliance Nov. 18 - Effective Use of Credit Risk Rating Nov. 18 - Compliance Perspectives Nov. 18 - Bank Protection Act Robbery Preparedness for All Staff Nov. 19 - Safe Deposit Boxes: 40 Million Reasons to Follow Proper Procedures Nov. 19 - IRS Reporting Requirements: 1098s, 1099s,TINs, Backup Withholding and More Nov. 20 - Loan Deterioration Early Warning Signs:Where Is Your Portfolio at Risk? Nov. 21 - BSA Series: CIP, CDD, EDD and Beneficial Ownership Nov. 25 - Incident Response: Before, During and After a Data Breach Dec. 2, 2015 - The 10 Must-Have Skills for Customer Service Success Dec. 2 - Opening Accounting for Nonprofit Organizations Dec. 3 - Traditional and Roth IRA Reporting Responsibilities: Requirements, Issues and Answers Dec. 3 - Robbery Training and Other Teller Security Issues Dec. 4 - ACH Specialist Series: Handling ACH Exceptions and Returns Dec. 9 - Filing UCC Financial Statements: Getting It Right! Dec. 10 - Supporting Documentations for the ALLL Dec. 16 - Advertising Compliance:Website, Print,TV and Radio Dec. 16 - IRS Information Reporting Dec. 16 - Compliance Perspective Dec. 17 - Denied Loan Requirements: Consumer, Commercial and Residential Dec. 18 - Self-Examination for Fair Lending Compliance
10 Hoosier Banker October 2014 CONVENTION COVERAGE What’s Your Game Plan? IBA Annual Convention 2014 Last month 504 attendees gathered at French Lick Resort for education and networking at the 2014 Annual Convention of the Indiana Bankers Association. This year’s theme – “What’s Your Game Plan?”– reflected the readiness of the banking community to move forward into economic recovery. Events kicked off on Sunday, Sept. 28, with a perfect day for golf. Players enjoyed the tournament, as well as the many contests and giveaways throughout the day. Congratulations to the winning team, shown on the facing page, and to Mike Messaglia of Krieg DeVault LLP, who scored a hole-in-one. Sunday evening, guests convened for the sports-themed welcome party. This festive, outdoor event featured basketball hoops, a football toss and a baseball hitting game – in addition to ample food, music and camaraderie. Many attendees came decked out in their favorite team jerseys to show their team spirit. Monday, Sept. 29, commenced with an entertaining keynote opening, provided by humorist Damian Mason, followed by business sessions in the morning and continuing through late afternoon. Topics covered included perspectives from the American Bankers Association and the Independent Community Bankers of America, the evolution of banking, and dealing with generational differences. IBA’s Future Leadership Division (FLD) sprang into action Monday evening, with a rousing annual silent auction and dinner. The FLD succeeded in raising nearly $75,000 for Indiana BANKPAC. Tuesday, Sept. 30, resumed with networking and learning opportunities. Educational sessions opened with tips for managing email inboxes and continued with an examination of board responsibilities, new opportunities in payments, and groundbreaking insights by Dr. Ruby K. Payne into how poverty impacts banks and the communities they serve. The Chairman’s Banquet took place Tuesday evening. After dinner, IBA Chairman Dave Heeter inducted new Forty Year Club members and presented each with a Forty Year Club lapel pin. He also recognized all Forty Year Club members in attendance, as well as past presidents and chairmen of the Association. Heeter passed along the chairman’s gavel to incoming chairman Larry Myers, after which Sen. Jim Merritt presented a Sagamore of the Wabash award from Gov. Mike Pence to Dave Heeter. Amber Van Til, IBA’s senior vice president-government relations, then made a special presentation to Sen. Merritt, honoring him as IBA Legislator of the Year. Closing out the convention were prize drawings. Chuck Niemier, Lake City Bank, Warsaw, won this year’s Indiana BANKPAC sweepstakes, a trip for two to the French Riviera, sponsored by The KeyState Companies. Ed Cullison, Farmers and Mechanics Federal Savings and Loan Association, Bloomfield, won the grand prize drawing, an aquamarine and diamond bracelet, sponsored by IBA Service Corporation. The evening capped off with dancing and high-energy music provided by Endless Summer Band. An important function of the Annual Convention is to conduct official IBA business. Accordingly elections took place at the Monday luncheon with the following officers elected for 2015: • Chairman – Larry W. Myers, president and chief executive officer of First Savings Bank, Clarksville; About the Author Christina M. Bennett, CMP, is vice presidentmeetings & events of the Indiana Bankers Association. She can be reached at 317-387-9380, email: cbennett@indianabankers.org.
11 Hoosier Banker October 2014 Winners of the golf tournament were (left to right): Jim Fisher,Approval Payment Solutions Inc.; Jay Baker, German American, Jasper; Jim Saner, North Salem State Bank; and Sheridan Sims, SDGblue LLC. • First vice chairman – Michael H. Head, president and chief executive officer of First Federal Savings Bank, Evansville; • Second vice chairman – Annette M. Russell, chief executive officer of Security Federal Savings Bank, Logansport. Also recognized at the Monday luncheon were regional directors for 2015 who already had been elected through voting by members in each region. Dennis Wayman, chairman, president and CEO of State Bank of Medora, will be serving a second term as southeast region director representing small banks. Clay W. Ewing, president of German American, Jasper, currently filling a vacated board position, has been elected to serve his first full term as southwest region director for large banks. Elected to first terms on the board were: Michael S. Zahn, president Break Sponsors Donaldson Capital Management Fiserv FPS GOLD Profit Resources Inc. Breakfast Sponsor IBA Insurance Agency Inc. Chairman’s Banquet Sponsor IBA Group Insurance Trust, Insured by Anthem Euchre Tournament Sponsor Renninger & Associates LLC Golf Beverage Cart Sponsors BITS Network Travelers Golf Hole Sponsors Agresta, Storms & O’Leary PC Allied Solutions BITS Network BKD, LLP BMO Harris Bank Crowe Horwath LLP CSI Executive Benefits Network Floodplain Consultants Gibson Teldata Inc. Lee & Mason Financial Services McGladrey LLP ThankYou, 2014 Convention Sponsors! Profit Resources Inc. SDGblue LLC The SHAZAM Network Tilson Virtual Innovation Inc. Golf Tournament Sponsor Krieg DeVault LLP Grand Prize Giveaway Sponsor IBA Service Corporation Hospitality Suite Sponsors Agresta, Storms & O’Leary PC BOSC, Inc. Continuity Control Independent Community Bankers of America Kilpatrick Townsend & Stockton LLP Profit Resources Inc. Promontory Interfinancial Network The SHAZAM Network Tilson Title Center of Indiana LLC UMB Bank Indiana BANKPAC Sweepstakes Sponsor The KeyState Companies Luncheon Sponsors Federal Home Loan Bank of Indianapolis ICBA Services Network and CEO of First Federal Savings Bank, Huntington, representing the northeast region mid-sized banks; and Arden L. Cramer, president and CEO of Logansport Savings Bank, FSB, as northwest region director representing mid-sized banks. Also elected to fill a new board position to represent those banks that are headquartered outside of Indiana is Tim Massey, Indiana market president for BMO Harris Bank, Indianapolis. Thank you to the banking leaders who make IBA successful, and to all Opening Party Sponsor Keefe, Bruyette & Woods PAC Auction Dinner Sponsor Matrix Integration Printed Material Sponsors Bose McKinney & Evans LLP Great Lakes Capital Fund Infotex The SHAZAM Network TIB-The Independent BankersBank Reception Sponsors Associated Bank The Baker Group BancMac Bankers’ Bank BKD, LLP Equias Alliance LLC Federal Home Loan Bank of Indianapolis Investors Title Insurance Company The KeyState Companies Plante Moran SunTrust Robinson Humphrey Wilmington Trust NA Young & Associates Inc. Welcome Gift Sponsor One America attendees and sponsors who made this year’s convention a success. Next year we will be hosting our Annual Convention Sept. 13-15, 2015, again in beautiful French Lick. We look forward to seeing you there! t
12 Hoosier Banker October 2014 CONVENTION COVERAGE Annual Convention address by: DaviD W. Heeter MutualBank, Muncie IBA Chairman 2014 Recap of 2014: A Year of Success Welcome to the 2014 Annual Convention of the Indiana Bankers Association. As your 2014 board chairman, I would like to update you on the Association. Membership continues to decline. as the industry continues to consolidate. When the announced mergers are completed, IBA membership will include all of the 119 Indiana headquartered banks and thrifts, 20 out-of-state headquartered banks, and four trust companies for a total financial member count of 143. There are also 170 associate members who are an important part of our family. The Association continues to be financially strong, with about $5.2 million in cash and investments and a net worth of around $6 million. IBA has no debt. This places IBA among the most financially secure of all of the state bank trade associations in the country and is the result of entrepreneurial pursuits. In 2013 IBA had a net profit of $1,264,783, of which $1,053,088 was from our efforts in New Markets Tax Credit financing. The actual net operating profit excluding this transaction was $211,695. Our audit firm, CliftonLarsonAllen, has issued a clean audit report. Legislatively, the IBA had another excellent year, with the passage of another Financial Institutions Tax reduction that will decrease the rate to 4.9 percent in 2022. In addition IBA has established a working group to study and determine a strategy to simplify the mortgage foreclosure process. Indiana has one of the longest foreclosure processes in the country, and it is time we delved into changing that. These successes and initiatives are the result of hard work by Amber Van Til, Dax Denton and Josh Myers. Educationally, Laurie Rees and her team have initiated two new forums and two leadership building programs that all have met with great success. The Senior Retail Banking Forum and the Risk Management Forum joined our other successful forums, and nearly all of them sell out each year. Last fall we graduated our first Leadership Development Program class. The feedback from both participants and the CEOs they work for was overwhelmingly positive. We are now about to graduate the second class, and it is equally successful. Also last fall, we held our first Future Leadership Conference – Bridging Bankers, Building Leaders – which was attended by over 50 young bankers. We have another scheduled for Oct. 29 and 30, and the numbers are looking very good for it. Earlier this year we hosted the Mega Conference and, even with continued consolidation of the industry, our attendance was 1,222. We also sold 88 booth spaces, which is a record. The only bad news at Mega was that the golf outing was rained out! But all in all, it was another successful offering led by Chris Bennett and Susan Clark. Technologically, IBA converted to a new data base management software system, replacing the 30-year-old prior system. At the same time, the IBA website was completely updated. Later in the year we, changed from the Cap Wiz system of legislative advocacy to Voter Voice. Voter Voice About the Chairman-Elect David W. Heeter, 2014 chairman of the Indiana Bankers Association, is chief executive officer and director of MutualBank, Muncie. He also serves as CEO, president and director of MutualFirst Financial Inc. Heeter joined MutualBank in 1978 and has served in multiple positions, including vice president and executive vice president/chief operating officer, before being named to his current titles in 2003. He is vice president of the MutualBank Charitable Foundation Inc. He also is a member of the IU Health Ball Memorial Physicians Board, the Community Foundation of Muncie and the Delaware County finance advisory board. A former member of the Federal Reserve Bank of Chicago Community Depository Institution Advisory Council, Heeter has past leadership experience with the Ball State University College of Business alumni board, Muncie Delaware County Chamber of Commerce, United Way and Muncie Family YMCA. Additionally he is a member of the IBA Government Relations Committee and served as a past northeast region director of the IBA board. Heeter is a graduate of Ball State University and of the Graduate School of Banking at the University of Wisconsin. He has been named a Sagamore of the Wabash by Gov. Mike Pence.
13 Hoosier Banker October 2014 provides much more flexibility, and I am sure that most of you have already used it. We continue to increase our presence on social media and are increasingly relying on it for certain communications. Paul Freeman and Tracy Wainscott did the heavy lifting on the software conversions for the website and the data base, and we appreciate the time and talent that was required. Earlier I mentioned that the New Markets Tax Credit transaction added over $1 million to our net income last year. You may recall that, over the next few years, this program will bring in a total of about $8 million. The program, which IBA became involved with in 2004, was an entrepreneurial pursuit that no other trade association in the country has ever successfully completed. Restrictions on the program allow for a two-year claw back of the tax credits and a three-year look back by the IRS after the completion of the last transaction. That means that in 2020, all of the money can be allocated for new or existing programs to benefit members. Much of our ability to utilize the money will depend, of course, on what happens in the bank consolidation area. The money may need to be used to sustain the level of service that IBA provides to you. Only time will tell. You can rest assured that the board will use it to maximize member service. Another entrepreneurial effort that is paying off is our partnership with The KeyState Companies and Crowe Horwath LLP to provide Captive Property and Casualty Insurance Company Subsidiary services. This program has been successful for banks over $500 million in assets. Soon we will be offering the program to banks in the range of $250 million to $500 million in assets. Also in the products and services area, Rod Lasley has negotiated two new Preferred Service Provider relationships. Continuity Control has developed software that eases the management of the entire compliance system. This system – combined with Young & Associates Inc. Community Bankers for Compliance program and the Compliance Connection hotline hosted by Krieg DeVault LLP – go a long way toward helping members better manage the compliance process. The other program is a retail merchant card processing program through Evansville-based Approval Payment Solutions Inc. a long-time IBA associate member. Be sure to ask Rod Lasley about these programs, or visit the booths of Continuity Control and Approval Payment Solutions. IBA’s members are fortunate to have a very talented staff, many have been with the Association for over 20 years. IBA is nationally recognized as one of the top state bank trade associations in the country. Several staff members received recognitions this year that you should be aware of: • Dax Denton was named the Best & Brightest in Banking and Financial Services by Junior Achievement of Central Indiana. He is the second IBA staff member to win this prestigious award, following Amber Van Til, who won it in 2008. • Laura Wilson was named Association Professional of the Year for 2013 by the Indiana Society of Association Executives (ISAE). This award has been won previously by Paul Freeman, Laurie Rees, Chris Bennett and Dax Denton. No other trade association in Indiana has staff who have won this award more than once. • Rod Lasley was recognized by ISAE for the Outstanding NonDues Revenue Program for IBA’s Property and Casualty Captive Insurance Company Subsidiary Pool Program. • Joe DeHaven was elected chairman of the board of trustees of both the Graduate School of Banking at the University of Wisconsin and of the Prochnow Educational Foundation. The school was founded in 1945, and Joe is the first alumnus to chair these boards. During this year, the board did make three changes to the bylaws that I want to report to you. We added a seat to the board that will represent those member banks headquartered in another state. We also expanded the potential board members from presidents and CEOs exclusively to any Reg. O officer in a member bank. In today’s technology-driven world, and with the changing dynamics of the workforce, more flexibility in board membership may become important in the future. Lastly, we eliminated from the bylaws a requirement to have a budget committee. The board has final approval of the budget and works closely with staff to develop a budget each year. One final note: We have had much success in Indiana the past few years legislatively, and much of that success is your grassroots efforts and your support of Indiana BANKPAC. Thank you for that support you have provided. t Dave Heeter, 2014 IBA chairman, presides at the Annual Convention.
14 Hoosier Banker October 2014 CONVENTION COVERAGE Thank you for electing me as your chairman of the board of directors of the Indiana Bankers Association for 2015. It truly is an honor to be elected, and I am humbled by the confidence you have shown in me. Dave Heeter has done an outstanding job as chairman this year, and I look forward to his wise and experienced counsel and advice next year. Last fall the board of directors, some past chairmen, and senior staff of the IBA held a strategic planning meeting. Many of you assisted in this process by completing a pre-meeting survey, designed to provide us with your vision for the future of IBA and the banking industry. Thank you for providing that input. We reviewed every comment and tallied all of the responses, and ended up with five overarching strategies: 1. Maintain strong financial position and robust reserves. Because we have no way of knowing how many more consolidations will occur in Indiana, we are prepared financially to maintain current levels of service well into the future, and we are positioned to take advantage of opportunities that may become available. 2. Expand the use of technology. Technological advances, at both the IBA and for member banks, continue at a rapid rate. We will focus more attention to analyzing those advances and screening what might be most valuable to help all of us to remain efficient and to enable us to provide an outstanding customer experience. 3. Expand product and service offerings. IBA has been a leader in this area throughout the country and across industry associations for many years. It is important that we work with you to maintain that leadership, particularly in the areas of compliance, audit, IT and loan review. Recently many of you completed a survey focused specifically on product and service relationships. We are still analyzing the results, and we look forward to progressing toward the direction which your answers point us. 4. Proactively assist with developing the next generation of bank leaders. We all know the importance of leadership development for our young people throughout the industry. While we believe we have been doing a good job, we will place a higher level of emphasis on leadership development. Any ideas you may have would be much appreciated to help us better serve your needs. 5. Reinvent the Association for long-term viability. Because of the aforementioned bank consolidation, we have to be receptive to cross-state-line combinations, combinations with other in state financial services trade groups, and partnerships with members to provide services. While IBA has been at the forefront at remaining viable to and for our members, we About the Author Larry W. Myers, 2015 chairman-elect of the Indiana Bankers Association, is president and chief executive officer of First Savings Bank, Clarksville. He additionally serves on the bank’s board of directors and as president of the First Savings Charitable Foundation. Myers joined First Savings Bank in 2005 as chief operating officer and was named to his current position in 2006. He previously had served since 1982 with National City Bank, most recently as area president of Southern Indiana. Myers is a member of the St. Louis Federal Reserve Community Depository Institutions Advisory Council; he also has been active with the American Bankers Association on the community bank council and as past member of the mutual council. He serves the community as vice chairman of the Lincoln Heritage Council of Boy Scouts of America and through One Southern Indiana-Chamber of Commerce. A certified trust financial adviser, Myers has Series 7 and Series 66 licenses. He is a member of the IBA Government Relations Committee and has served the IBA board as second vice chairman. Myers earned bachelor’s and MBA degrees from the University of Kentucky, plus completed the Graduate School of Banking of the South and the Cannon Trust School. Looking Forward to Success in 2015 Annual Convention address by: Larry W. Myers First Savings Bank, Clarksville IBA Chairman-Elect 2015
15 Hoosier Banker October 2014 know that our existence is dependent upon our ability to serve your needs efficiently. Therefore we cannot close the door to any opportunity that might enhance our ability to provide that service. The board is in lockstep on these five points and, over the next couple of years, we intend to focus on accomplishing specific goals toward each of these strategies. While the board is working hard on these issues, it is comforting to know that so many of you have participated in this process and will continue to participate and support our efforts in the coming year. Together, I know we will accomplish many of these important goals. Of course one of the most important functions of the IBA is to represent you at the Statehouse during the legislative session each year. Typically there are around 100 bills introduced that could affect your bank and your ability to serve your customers. The IBA Government Relations Team monitors these bills and acts accordingly to protect your interests. There is no way to know what will be introduced next year, but we will continue our advocacy on your behalf. Currently we are working on foreclosure simplification, but doubt we will have a bill for the 2015 session. We expect other groups will have bills dealing with some aspects of the process. Our voice will be loud and strong on your behalf. At the national level, IBA works closely with both the American Bankers Association and the Independent Community Bankers of America. These organizations take the lead on those issues, but IBA is deeply involved and has strong relationships and communications with the Indiana delegation. Prior to lunch you heard from banker leadership representing both ABA and ICBA about the issues in Washington. Additionally, three weeks ago, about 70 Indiana bankers and associate members, along with staff, were in Washington to visit with regulators and congressmen following briefings by ICBA and ABA, as well as the Conference of State Bank Supervisors. This is important work, and we hope you will join us on future trips to Washington. Without our grassroots efforts, we will never prevail at getting credit unions taxed, farm credit supporting us instead of competing against us, or meaningful regulatory relief enacted. This year the board of directors hired Donaldson Capital Management, headquartered in Evansville, to manage the IBA investment portfolio. Donaldson has been managing the investment portfolio of the IBA Group Health Insurance Trust for over 10 years, so it is very familiar to us. As the portfolio continues to grow, the board and staff recognized that IBA does not have the resources to continue to do this internally. We look forward in the next year to working closely with Donaldson Capital Management to appropriately invest the money, to assure ongoing service to members in the future. I am optimistic about the future of the banking industry in Indiana. The board of directors that you have elected is very strong. The Association is very strong. Your commitment is very strong. Together, we are certain that we will be successful at whatever issues are directed at us. With your membership, your grassroots involvement, your support of IBA programs and services, and your commitment to helping determine IBA’s future, success is assured. I am excited to serve you in 2015, and proud and appreciative of the confidence you have displayed by electing me as your 2015 Chairman. Together we will succeed. t Outgoing IBA Chairman Dave Heeter (left), presents the chairman’s gavel to Chairman-Elect Larry Myers at the Annual Convention. James G. Hiatt, president/chief executive officer of First State Bank of Middlebury, has announced plans to retire, effective Jan. 1, 2015. He will continue to serve on the board of directors of Crystal Valley Financial Corp. and of the bank. Hiatt has been serving as president since 1982 and is a current member of the Indiana Bankers Association board of directors, in the capacity of northeast region director. John Edge has retired as president of the Owensboro region of First Security Bank, Owensboro, Kentucky, after 17 years with the company. He is one of the founding executives that started the bank in 1997. Edge continues with the bank in a consultative capacity. t taking it easy
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