INSIDE IBA Hosts 2014 Annual Legislative %ULHÀQJ DQG Reception. Story on page 10. HOOSIER BANKER FEBRUARY 2014
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5 HOOSIER BANKER 7$%/( 2) &217(176 92/80( 12 6925 Parkdale Place Indianapolis IN 46254-4673 Phone: 317-387-9380 Fax: 317-387-9374 ZZZ LQGLDQDEDQNHUV RUJ IBAcommunications #LQGLDQDEDQNHUV RUJ 3XEOLVKHU 6 -RH 'H+DYHQ (GLWRULDO DQG $GYHUWLVLQJ Laura Wilson 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 ǯȱ ¢ȱDZȱęȱȱ the month preceding publication. $GYHUWLVLQJ 5DWHV DYDLODEOH upon request or online at ZZZ LQGLDQDEDQNHUV RUJ. Advertisers should provide HOHFWURQLF 3')V E\ WKH ÀIWK RI WKH PRQWK SUHFHGLQJ SXEOLFDWLRQ Hoosier Banker DGYHUWLVLQJ LV available to members and associate members of the Indiana Bankers Association only. 6XEVFULSWLRQV Hoosier Banker subscriptions are provided free of FKDUJH H[FOXVLYHO\ WR PHPEHUV DQG associate members of the Indiana Bankers Association. Public access to Hoosier Banker Digital is available DW ZZZ LQGLDQDEDQNHUV RUJ $662&,$7,21 83'$7( 35(6,'(17·6 321'(5,1*6 S. Joe DeHaven, IBA ,%$ &$/(1'$5 2) (9(176 &29(5 6725< ,%$ 0(0%(56 $''5(66 723 ,668(6 $7 /(*,6/$7,9( %5,(),1* $1' 5(&(37,21 Amber R.Van Til, IBA )($785(6 ,%$ +2676 68&&(66)8/ ,1',$1$ (&2120,& 287/22. )2580 Christina M. Bennett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nnual Legislative %ULHÀQJ DQG 5HFHSWLRQ
6 HќќѠіђџȱ юћјђџ ђяџѢюџѦ 2014 and evaluate other electronic delivery to reduce members’ ȱȱȱěȬȱȱȱȱȱȱ sessions and meetings. We also will study and determine how to best provide needed technological products and services to our members, particularly to smaller banks. ȱ ¡ȱȱȱȱěȱȱȱȱ- ority. Soon you will be receiving a comprehensive Member Needs Assessment. Please invest the time to complete it. This survey provides direct input to the development of our product and service priorities. We already have heard from many of you regarding needs in the areas of risk management and compliance, as well as talent management and succession planning. We will work on these issues, perhaps forming new entrepreneurial alliances and partnerships with members, service providers or other associations. Priority No. 4 deals with proactively assisting with developing the next generation of bank leaders. Much time was spent on this issue. Strategies include enhancing IBA’s ȱ ȱ ȱȱ ȱęȱěȱ in 2013; modifying engagement and participation requests ȱĴȱȱ ȱ¡ȱȱ ȬȱDzȱ ȱȱȱĴȱȱȱ ȱ ȱ of Banking at the University of Wisconsin; and driving ȱȱȱȱĴǰȱȱȱȱ the younger generation of bankers. This area will no doubt require much input from our younger bankers, so we need to refocus our Future Leadership Division to share their insights. The last area was to reinvent the Association for longterm viability. Of particular interest to you will be our preparation for IBA leadership change within the next few years, and to determine ways to diversify the IBA so that there is more participation by women, minorities and young bankers. ȱ ȱȱȱěȱ ȱȱȱȱȱ thought, while others are already in the works. This longterm plan is the result of your input, plus the hard work and dedication of the strategic planning group, to move your Association forward. Thank you all for your contributions. I expect you may be called upon again as we work our way through these important strategies to continue in our mission: To advocate for and sustain an environment in which banks can succeed. In the November 2013 Hoosier Banker, this President’s Ponderings column focused on the recently held strategic planning session to point direction for the Indiana Bankers Association for the next few years. That column broadly discussed the major areas of discussion that emerged from the planning session. This month, I would like to build upon that foundation with an update of what the IBA board of directors has approved as our strategic plan for the next three years. While some actions are strictly internal operational items, I will instead highlight those items that more directly relate to IBA membership. ȱ ȱęȱ¢ȱȱȱDZ 1. ȱȱȱęȱȱȱȱDz 2. Expand the use of technology; 3. ¡ȱȱȱȱěDz 4. Proactively assist with developing the next generation of bank leaders; and 5. Reinvent the Association for long-term viability. ȱ ȱȃȱȱȱęȱȱȱȱ reserves,” there will be a focus on diversifying IBA revenues through new, sustainable revenue streams that align with member needs. The intent is to continually reduce ȱȱȱȱǯȱ ȱȱȱěȱȱ strongly that we have an obligation to maintain a dues structure that remains among the lowest in the nation. We can only achieve this goal if we tap multiple sources of non-dues income. IBA is fortunate to have residual income from our innovative New Markets Tax Credit program established 10 years ago, and it is substantial. As a result, an endowment vehicle is to be established for a portion of that income over the next few years to allow programming Ȭȱȱȱęȱȱǯ Expanding the use of technology is a two-pronged area. Part of it is intended to keep IBA operations up-to-date ȱ ȱ¢ȱȱĴȱȱȱǰȱȱȱ other part is to help our members stay abreast of techno- ȱȱȱȱȱǯȱ ȱȱęȱ part, we will implement and fully utilize our new database ȱ ȱ ȱȱȱě¢ȱȱǯȱ Having just converted in early January, we face a steep learning curve, both internally and externally, but we will ȱǯȱ ȱȱȱĴȱȱ¢ȱȱȱȱ social media in order to connect with the next generation of bankers and to continually enhance and promote the image of banking and bankers. Under the second part of this priority — helping our members stay abreast of technological advances — we will revisit the use of video conferencing and streaming, $662&,$7,21 83'$7( PRESIDENT’S PONDERINGS 6 -RH 'H+DYHQ 3UHVLGHQW &KLHI ([HFXWLYH 2IÀFHU ,QGLDQD %DQNHUV $VVRFLDWLRQ
In today’s environment, Correspondent relationships are more important than ever and you can take advantage of Stock Yards Bank’s position as one of the largest and strongest banks based in this region. We are committed to working with the community banks of Indiana and we want to be your bank’s partner when you have needs around capital, liquidity, acquisition financing, stock buy backs and more, in addition to retirement plans and other trust services. Give James or Jim a call and put our experienced team to work for your bank. Jim McKenzie Correspondent Banking James Brown Correspondent Banking Lending Services Holding Company Shareholder Groups Bank Credit Needs And More! Deposit Services Fed Fund Sweeps Wire Transfer Automated Clearing House And More! International Services Foreign Exchange (CHECKS & WIRES) Letters of Credit And more! NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE Wealth Management Services Jim McKenzie has over 40 years of banking experience, 36 years of those years as a correspondent banker. James Brown has over 20 years of banking experience in Retail, Small Business, Corporate and Correspondent Banking. (502) 625-0878 jim.mckenzie@syb.com (502) 625-9330 james.brown@syb.com THE CORRESPONDENT BANKING TEAM Retirement Plans Investment Management Insurance Trust Partnering And More! www.syb.com The good guys.
2014 IBA Consumer Lending School April 15-17 z IBA Center for Professional Development Instructors: David Kemp and Paul R. Osborne www.indianabankers.org
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10 HќќѠіђџȱ юћјђџ ђяџѢюџѦȱ2014 &29(5 6725< IBA Members Address Top ȱȱ ȱ ęȱ ȱ The Indiana Bankers Association hosted its annual Legislative ęȱȱ ȱȱ ǯȱŘŞȱ ȱȱ ȱ ¢Ĵȱ ¢ȱ Indianapolis. Some 150 bankers ȱĴȱȱȱȱ come together to discuss legislative issues pertinent to the Indiana banking community in a relaxed atmosphere. Earlier in the day, The KeyState Companies hosted a luncheon for ȱȱȱ ȱ ȱ ȱ Ĵǰȱ ȱȱ afterward. Luncheon highlights included presentations by David H. Mills, retiring director of the Indiana Department of Financial Institutions (DFI), and by Thomas C. Fite, DFI deputy director of depository institutions. At the close of the luncheon, IBA presented Mills with a plaque commemorating his 42 years of service to the banking industry, both as a banker and as DFI director. ȱ ȱȱǰȱ ǯȱ ǯȱ ȱ Ellspermann gave a presentation ȱȱ ȱ ȱ ȱ Ĵȱȱ ȱěȱȱ further the economic wellbeing of Indiana. The lieutenant governor introduced each member of her ǰȱ ȱ¡ȱȱĴȱ members their roles in the administration. ȱ ȱŚȱǯǯȱȱ ȱ ęȱ began, during which the IBA ȱ ȱ ȱȱ bills of interest to Indiana bankers: % SB 1 – State and Local Taxation % SB 36 – Probate, Trust, and ȱȱ ȱ Ĵ % SB 66 – State-Assisted Retirement Plan % SB 140 – Home Rule Powers of Certain Units % SB 175 - Credit Score Disclosures and Credit Inquiries % SB 344 – Mortgage Lending % SB 422 – Abandoned Housing % HB 1157 – Open-Market PACE Program % HB 1224 – Title Insurance % HB 1235 – Savings Promotion ĝ % HB 1245 – Various Financial ȱ Ĵ % ȱŗŘśśȱȮȱ ȱ ȱ Investments % HB 1280 – Land Banks and Tax Sale Issues. ȱęȱȱȱȱ opportunity to recognize members ȱȱŘŖŖƖȱ ǯȱ ¢Ȭęȱ Ȭ member banks contributed at least 200 percent of their fair share goals to Indiana BANKPAC during 2013. The evening continued with the Legislative Reception, giving member bankers an opportunity to meet, mingle and converse about the topics being addressed at the Indiana ȱȱǯȱ ȱ ȱ ȱ Team appreciates the support of our members in staying informed and in tune with the issues that impact banking. This annual Legislative ęȱȱ ȱȱȱęȱȱ many grassroots opportunities this year to give IBA bankers a voice in the legislative process. яќѢѡȱѡѕђȱ Ѣѡѕќџ Amber R. Van Til, JD, is senior vice presidentgovernment relations of the Indiana Bankers Association. She can be reached at 317-917-8047, email: avantil@indianabankers.org. 6HH WKH RQOLQH ,%$ SKRWR DOEXP RI various Association events. Click on the +RRVLHU %DQNHU 'LJLWDO logo in the online HGLWLRQ RI WKH PDJD]LQH DYDLODEOH DW ZZZ LQGLDQDEDQNHUV RUJ Digital Bonus
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12 HќќѠіђџȱ юћјђџ ђяџѢюџѦȱ2014
13 HќќѠіђџȱ юћјђџ ђяџѢюџѦ 2014
14 HќќѠіђџȱ юћјђџ ђяџѢюџѦȱ2014 &203/,$1&( &211(&7,21 Question: What are the requirements under Indiana law for a bank to close in the case of an emergency on a day which is not a legal holiday? DZȱThe Indiana Financial Institutions Act (the “Act”) describes the conditions under which an Indiana bank may close in the case of an emergency. If in the reasonable and proper exercise of ȱǰȱȱĜȱȱȱȱ determine that an emergency exists, ȱ ȱȱȱȱĜȱ¢ȱ either (a) not open one or more of the ĜȱȱȱȱȱǻǼȱȱȱĜȱ are already open, close one or more ȱȱĜȱȱȱǯ1 In this regard, an “emergency” includes: 1. Any condition or occurrence that may interfere physically with the conduct of normal business operations; or poses an imminent or existing threat to the safety or security of persons, property, or both persons and property at one ȱȱȱȱĜȱȱȱDz 2. Any condition or occurrence that is declared a state of disaster emergency by the governor under Indiana Code Section 10-14-3-122 and applies to the area where the ĜȱȱȱȱȱDzȱ 3. The death of or funeral services for ȱ¢ǰȱĜȱȱȱȱ a bank or for a former employee, Ĝȱȱȱȱȱǯ3 ȱ ȱȱȱȱȱĜȱȱȱ bank determine that an emergency ¡ȱȱȱȱĜȱȱȱǰȱ they must provide prompt notice of this action to the director of the Indiana Department of Financial Institutions.4ȱ ȱȱĜȱ ȱȱȱ for more than 48 consecutive hours on business days (excluding legal ABOUT COMPLIANCE CONNECTION In order to address compliance inquiries from members, IBA provides Compliance Connection, an assistance ȱěȱȱȱ Ȭęȱȱ ǯȱ ȱȱĴȱȱȱǰȱ ȱ Compliance Connection will refer the bank to a law ęǯȱ ȱȱȱȱȱ ȱȱ¢ȱLarry C. , partner with Krieg DeVault LLP, Indianapolis, and IBA compliance consultant. Submit Compliance Connection questions to IBA’s ȱ ǯȱ ȱ ȱat avantil@indianabankers.org. 1See ,QG &RGH I 2 This section grants the governor authority to GHFODUH D GLVDVWHU HPHUJHQF\ E\ H[HFXWLYH RUGHU RU SURFODPDWLRQ LI WKH JRYHUQRU GHWHUPLQHV WKDW D GLVDVWHU KDV RFFXUUHG RU WKDW WKH RFFXUUHQFH RU WKH WKUHDW RI D GLVDVWHU LV LPPLQHQW 3 See ,QG &RGH D 4 See ,QG &RGH J 5 See ,QG &RGH I 7KLV LQIRUPDWLRQ LV SURYLGHG IRU JHQHUDO HGXFDWLRQ SXUSRVHV DQG LV QRW LQWHQGHG WR EH OHJDO DGYLFH 3OHDVH FRQVXOW OHJDO FRXQVHO IRU VSHFLÀF JXLGDQFH DV WR KRZ WKLV LQIRUPDWLRQ DSSOLHV WR \RXU LQVWLWXWLRQ·V FLUFXPVWDQFHV RU VLWXDWLRQ ¢ǼǰȱȱĜȱȱȱȱ ȱęȱȱȱȱȱȱ director of the Indiana Department of Financial Institutions.5 ȱ ǯȱ , director of ȱ ȱ ǰȱ , has completed 50 years of service to the bank. He began his career as a state bank examiner in 1960, then joined Home Building Association (now Home Bank) in 1963, and later was promoted to vice president. Levell was named president in 1981 and retired in 2000. Among other organizations, he has been active with Habitat for Humanity, the Martinsville Education Foundation, Community Foundation of Morgan ¢ǰȱȱ ȱ ȱ Chamber of Commerce, the Martinsville Kiwanis Club, United Way and St. Martins of Tours Catholic Church. Levell is a member of the Indiana Bankers Association Forty Year Club. Jody Brodie has completed 20 years of service to ȱ ȱ . ȱ has completed 20 years of service to ȱ ȱ . Two associates of ȱ ¢ȱ ȱ ǰȱ , have been recognized for their years of service: ¢ȱ , core system operations ĜȱȮȱřŖȱ¢Dz ȱ , director – 20 years. ANNIVERSARY MILESTONES $ VDOXWH WR EDQNHUV ZLWK \HDUV RI VHUYLFH %UDQFK 0DQDJHPHQW 6HULHV *UDGXDWH +HDWKHU *DUFLD OHIW &URVVURDGV %DQN :DEDVK LV FRQJUDWXODWHG E\ LQVWUXFWRU 'LDQQH %DUWRQ, 3HUIRUPDQFH 6ROXWLRQV ,QF IRU KDYLQJ FRPSOHWHG WKH ,%$ %UDQFK 0DQDJHPHQW 6HULHV
15 HќќѠіђџȱ юћјђџ ђяџѢюџѦ 2014 ¡ȱĜȱȱȱ ȱ Reserve Bank of St. Louis and a member of the Federal Reserve’s ȱ ȱ ȱ Ĵȱ (FOMC). He discussed FOMC forecasts in recent years and for 2014. Bullard reported that for 2014, the St. Louis Fed continues to project improved growth prospects for the U.S. economy, a decrease in unemployment and a slight increase ȱĚȱȱ ǯ IBA extends thanks to the outstanding presenters of this year’s ǰȱȱĴȱȱǰȱȱ to the sponsors which made the event possible: *ROG 6SRQVRUV Federal Home Loan Bank of Indianapolis ęȱ ȱ ǯ 6LOYHU 6SRQVRUV Bankers’ Bank Robert W. Baird & Company %URQ]H 6SRQVRUV Equias Alliance ȱ ȱ ȱ Premier Capital Corporation Renninger & Associates LLC Photo gallery available on pages 16 and 17. FEATURE On Jan. 10, the Indiana Bankers Association hosted the third annual Indiana Economic Outlook Forum in Indianapolis. Approximately ŗŞŖȱ ȱȱ ȱȱĴȱ for the networking event. At the luncheon, Dr. Michael J. Hicks, director of the Center for Business and Economic Research and a professor of economics in the Miller College of Business at Ball State University, shared his insights into the national and regional economy. He forecasted continuing economic improvement for Indiana, but cautioned that several localities which have been reliant on automobile manufacturing will likely continue to struggle. The keynote speaker was Dr. James Bullard, president and chief ȱ ȱ ȱ ȱ ȱ ȱ яќѢѡȱѡѕђȱ Ѣѡѕќџ ȱ ǯȱ Ĵǰȱ ǰȱȱȱȬ meetings & events of the Indiana Bankers Association. She can be reached at 317-387-9380, email: Ĵȓǯǯ Industy Knowledge What do you want ĨƌŽŵ LJŽƵƌ ůĂǁ Įƌŵ͍ Bose Means BusinessSM boselaw.com
16 HќќѠіђџȱ юћјђџ ђяџѢюџѦȱ2014 ,1',$1$ (&2120,& 287/22. )2580 3+272 *$//(5<
17 HќќѠіђџȱ юћјђџ ђяџѢюџѦ 2014
HќќѠіђџȱ юћјђџ ђяџѢюџѦȱ2014 SHAZAM Network is a longtime Preferred Service Provider of the Indiana Bankers Association. An electronic payments network, the company serves more than 1,500 community banks in 33 states. Over 35 years ago, SHAZAM’s ȱȱȱĜǰȱ Ȭěȱ ¢ȱȱ¢ȱ banks to process electronic payments and developed a network of those participating institutions to create a strong collective voice in the electronic payments industry. As ȱȬȬęȱǰȱ ȱ participating bank CEOs serving on its board of directors, SHAZAM’s ¢ȱęȱȱȱȱ helping banks compete. SHAZAM achieves its goal by reinvesting banks’ success in the development of new products and services, as well as by providing periodic price reductions, allowing banks to compete with the larger ȱęȱǯȱ Banks that work with the SHAZAM cooperative business model are more than customers; they are SHAZAM partners. The banking industry has dealt with much change through the years, and innovation takes place so quickly that it is a challenge to understand which technologies to embrace and which to reject. SHAZAM meets that ȱȬǰȱ¢ȱĴȱ to those products that have true potential to strengthen the banking business. By combining outstanding personal customer service with the best of technology and convenience in electronic payments from SHAZAM, banks have access to an ideal formula for maintaining customer loyalty and marketplace retention. ȱ ȱěȱȱȱȱ of products to help banks succeed in the electronic payments business. It provides services needed to remain competitive, including: PIN and signature debit; card personalization with color photos; HSA cards; and card authorization services that allow banks to issue and activate cards and to authorize transactions based on up-to-the-minute balance information. SHAZAM additionally provides multiple security features to protect against fraud, including Falcon and Falcon Real-Time, which tracks customer habits and makes risk determinations based on those habits. The company also uses a mobile app, SHAZAM BOLT$, to alert customers to potentially fraudulent transactions, allowing them to contact the bank sooner to stop further fraud. As a bonus, this app gives customers access to their card balance information anytime, anywhere. Beyond providing this competitive electronic payments solution, SHAZAM also has the ability to assist in the marketing of the program to maximize customer usage and provide customer rewards programs to win prizes based on usage. SHAZAM is focused on helping community banks survive and succeed in this challenging area of electronic payments. Because of its cooperative ownership structure, SHAZAM succeeds when its customer banks succeed. For more information regarding SHAZAM opportunities, please contact Ken Diekemper at 800-844-7715, ext. 4366, or kdiekemper@shazam.net. You can also contact me, Rod Lasley at the ȱĜǰȱȱřŗŝȬřŞŝȬşřŞŖǰȱDZȱ rlasley@indianabankers.org. 363 6+2:&$6( яќѢѡȱѡѕђȱ Ѣѡѕќџ Rod Lasley is vice president-products & services of the Indiana Bankers Association, and also serves ȱȱȱȱȬęȱȱ ȱ¢ȱ the IBA. He can be reached at 317-387-9380, email: rlasley@indianabankers.org. DZȱ ȱ ¢ȱ ȱȱ
HќќѠіђџȱ юћјђџ ђяџѢюџѦ 2014 ȱ ȱȱ donated to two community organizations last December. The bank gave $750 to the Jackson County Sertoma Club, which serves those at risk or impacted by hearing loss. Additionally bank employees raised another $500 for the Sertoma Club through Jeans Days, plus ǞśŖŖȱȱȱȱęȱȱ ȱěȱ¢ȱǯ ȱ ȱ ȱ has been honored by the American Cancer Society-Lakeshore Division with the 2013 Relay for Life Team Excellence Award. This recognition marks the second consecutive year the LaPorte Savings Bank Lifesavers received the award for raising the most money during Relay for Life area events. The team ȱȱěǰȱȱȱ family raised $13,622 to be used for cancer research, information and services. ȱ ȱǭȱ ȱ ¢ǰȱ , has donated its Burlington banking center building to the Community Howard Regional Health Foundation Inc. The 3,752+ square foot building, located at 401 N. Michigan Rd., Burlington, is valued at more than $140,000 and was used as a banking center before it was closed last year. The donation allows the Foundation to open a primary care ¢ȱĜǯȱ ȱ the agreement, the Salin Bank sign and automated teller machine remain on premise for community access. ȱ ȱ ȱ ȱ ȱȱ (FHLBI) awarded grants in 2013 totaling $12.2 million under its ěȱ ȱ ȱǻ Ǽǯȱ ȱ ȱřŗȱ projects in Indiana and Michigan to help create 786 units of homeownership, rental or transitional housing, with ȱȱěȱȱȱȱǰȱȱȱ in place, supportive housing for households with special needs, and comprehensive community development. Spon- ȱęȱȱȱ ȬȱDZ % 1st Source Bank, South Bend; % Community First Bank of Indiana, Kokomo; % First Financial Bank, NA, Terre Haute; % First Merchants Bank, NA, Muncie; % Home Bank, SB, Martinsville; % Lake City Bank, Warsaw; % MutualBank, Muncie; % Old National Bank, Evansville; % Peoples Bank, SB, Munster; % Salin Bank & Trust Company, Indianapolis; % Terre Haute Savings Bank; % Your Community Bank, New Albany. ȱ ȱ ǰȱ , participated in the “Women Build” last fall for Habitat for Humanity of Johnson County. The bank’s team of 11 women raised $7,857 for the organization through bake sales, a garage sale, employee jeans days and selling pink paper houses in bank branches. Additionally the team constructed and raised a wall for a Habitat house build. ȱ ȱ ǰȱ , is donating $150,000 to organizations in Indiana, Ohio and Kentucky in celebration of the bank’s 150th anniversary. Bank associates were invited to nominate community organizations, with 15 chosen ȱ ȱ ȱ ȱ ǞŗŖǰŖŖŖȱ ǯȱ ȱ ȱ ȱ ęȱ of 200 nominees are the following organizations earmarked for First Financial grants: % Bartholomew County Financial Literacy Coalition, Columbus, Ind.; % Cincinnati Works; % Downtown Middletown Inc., Ohio; % ȱ ȱ ȱ ȱȱ Ȃȱ - tion, Ind.; % ȱ ȱ ¢ȱ ǰȱ ǯDz % Helping Hands Community Outreach Center, Dayton, Ohio; % ȱ ȱ ǰȱ ¢Ĵǰȱ ǯDz % Indianapolis Neighborhood Housing Partnership; % Jackson County Development Industries, Seymour, Ind.; % Main Street Van Wert, Ohio; % Mercer County Civic Foundation, Celina, Ohio; % Neighborhood Housing Services of Hamilton, Ohio; % Ohio State University Extension, Butler and Preble counties, Ohio; % People Working Cooperatively, Cincinnati; % Hamilton Dream Center, Ohio. Associates at Mutual Savings Bank, Franklin, UDLVHG D ZDOO IRU WKH ´:RPHQ %XLOGµ RI +DELWDW IRU +XPDQLW\ RI -RKQVRQ &RXQW\ 6WDWH %DQN RI 0HGRUD LV D ORQJWLPH VXSSRUWHU RI WKH 6HUWRPD &OXE 7KH /D3RUWH 6DYLQJV %DQN /LIHVDYHUV KDYH EHHQ KRQRUHG ZLWK WKH 5HOD\ IRU /LIH 7HDP ([FHOOHQFH $ZDUG Salin %DQN 7UXVW &RPSDQ\ KDV GRQDWHG LWV IRUPHU %XUOLQJWRQ EDQNLQJ FHQWHU WR the &RPPXQLW\ +RZDUG 5HJLRQDO +HDOWK )RXQGDWLRQ ,QF BANKING ON COMMUNITY
20 HќќѠіђџȱ юћјђџ ђяџѢюџѦȱ2014 Janet Yellen, Federal Reserve chair sworn in as successor to Ben Bernanke, brings with her the agenda of ȱȱȱȱȱĴȱ of a humanitarian, a blend desirable in today’s economy that has been given the short end of the stick by a government incapable of bridging ȱěȱȱ¢ȱęȱ policy. Although Yellen’s decision to continue the monthly Treasury and mortgage-backed bond buying has created diverse opinions about her appointment, she manages to gain majority support, even with her softspoken, yet astute, demeanor. Having served as president and CEO of the San Francisco Federal Reserve Bank, Yellen’s resume is nothing short of impressive. Her biography on FederalReserve.org states she is a graduate of Brown and Yale and was a professor of economics at UC Berkeley for 14 years until leaving in 1994 to serve as a member of the ȱȱ ȱȱȱ ǯȱ ȱ heading notable economic councils and organizations for 10 years, she returned to the Federal Reserve in 2010 to act as vice chair. At the top of her to-do list lays the issue of unemployment, for which she is known as having the “dove” quality. Her concern with labor was most notably recognized in her “Fair ȱ ěȄȱǰȱȱ ȱȱ summarized that workers are not productive if they feel they are receiving an unfair wage. She has made public her priorities with regard to the Fed’s responsibilities: “Reducing unemployment should take center ȱǽȱĚǾǯȄ ȱ ȱ Ȃȱęȱ hearing with the Senate Banking Ĵȱȱ ǯȱŗŚǰȱȱ ¢ȱ from unemployment, she was drilled ȱȱěȱȱȱ- ing (QE), mainly focusing on potential asset bubbles and the fact that the mere mention of tapering had ȱěȱȱȱȱȱ ǯȱ ȱĴȱǰȱȱ QE has not produced the most desired outcomes, it has still made “a meaningful contribution” with regard to the automobile and housing markets and pointed out that:“[There Ǿȱȱȱȱȱȱȱ stock market.” Perhaps the result of indicating a possible shift in bondbuying might play a role in the Fed chair’s perspective of transparency, which Bernanke incorporated into the central bank’s guiding principle during his term. ȱ ȱȱ ȱ ȱ ȱ Risch, CFO for Accuride Corp., a leading North American manufacturer and distributor of commercial vehicle components headquartered in Evansville, Ind., he was asked how QE and the Fed chairwoman’s plan ȱȱȱ¢ȱȱěȱ Accuride’s business strategy. He responded, “How do these actions ȱǽǾȱȱȱȱ money? Do they want to reinvest ǽȱȱ¢Ǿǵȱ ȱȱȱ ȱ DZȱ ȱ ȱ FEATURE яќѢѡȱѡѕђȱ Ѣѡѕќџ Almeta Rodgers is a senior at the University of Southern Indiana Romain College of Business, majoring in economics, with an interest in development. She is a member of the Lambda Chapter of Omicron Delta Epsilon, the international economics honor society. The Romain College of Business at the University of Southern Indiana recently hosted its second annual writing competition for the university’s Money and Banking class. Forty students entered the competition, writing on topics ranging from currency, monetary policy, The Federal Reserve, national and state banking, community banks, and central banks across the globe. The Money and Banking class is taught by Dr. Marie A. Bussing (mbburks@usi.edu), assistant professor of economics. Guest speakers have included Thomas L. Austerman, president and ȱ¡ȱĜȱȱ ȱ ǰȱ ǰȱȱ ǯȱ ȱ Ĵǰȱȱ education specialist with the St. Louis Federal Reserve. Following is the winning entry, authored by USI student Almeta Rodgers.
21 HќќѠіђџȱ юћјђџ ђяџѢюџѦ 2014 good enough about the economy that it’s not going to go up and down? For the most part, we feel that they’re ęǰȱ ȱ ȱȱ¢ȱȱ cash, we know that they have credit; ȱȂȱȱȱ¢ȱȂȱǽǾDzȱȂȱ that they’re nervous. Whether it’s ȱĴȱȱ ȱȱȱ Federal Reserve or an action from Congress, or lack thereof, all of these things make people nervous and restrain growth.” Yellen has her work cut out for her. It is clear she has nothing but the best intentions for the working man, but her support of Bernanke’s easy money program has drawn criticism. Even with the notion that low interest rates from monthly bond buying generate more savings, big businesses ȱěȱȱȱȱ its continuation. Janet Yellen certainly has the intelligence and experience to govern the Federal Reserve, but only time will tell if the continuation of the “show me the money” approach will have served the nation well. Hidden problem loans can lead to big expenses. F O L U T I O N S Banks today face a growing number of high-risk loans that are hard to identify. A single REO transaction can put an unexpected blemish on your balance sheet and result in hundreds of thousands of dollars in carrying costs and foreclosure expenses. SNLBanker provides tools to help you minimize surprise foreclosures for a stronger balance sheet. C U S O N S O of tify. pected blemish on your balance Credit Quality Dashboard › Indiana Bankers Association members: Learn more about managing your bank’s NPAs. Contact Julie Jones at 434.951.4419; partners@SNL.com. Collateral Concentration Report $75k in carrying costs for 6 months 6% or $300k in REO costs $375k in total costs + $5M foreclosed property $2.5M loan £ȱ ǰȱ ǰȱ ȱ ¢ǰȱȱȱȱĴȱȱ ǯȱřŖȱȱ a new banking facility, named “The Wolves Branch,” located in the Michigan City High School. This facility provides banking services to the school’s students, ¢ȱȱěǰȱȱ well as increased ęȱ¢ȱ opportunities for the ǯȱ ěȱ¢ȱ students, the branch is open one-half hour prior to the start of the school day and throughout all lunch periods. A Horizon Bank adviser is on premise during the hours of ǰȱȱȱ¢ȱȱȱȱȱȱȱǯȱ ȱěȱ ȱǰȱ¢ȱȱěȱȱȱȱǰȱȱȱ savings accounts, and customized Wolves debit cards. FINANCIAL LITERACY DIGEST 7KH 0LFKLJDQ &LW\ +LJK 6FKRRO PDVFRW MRLQV IDFXOW\ VWXGHQWV VFKRRO VWDII DQG EDQN SHUVRQQHO DW WKH RSHQLQJ RI ´7KH :ROYHV %UDQFKµ RI +RUL]RQ %DQN 1$ 0LFKLJDQ &LW\ ORFDWHG ZLWKLQ 0LFKLJDQ &LW\ +LJK 6FKRRO
22 HќќѠіђџȱ юћјђџ ђяџѢюџѦȱ2014 /(1',1* &5(',7 In 1997, the McKinsey & Company ȱęȱȱȱ “the war for talent” would separate winners from losers in the years ahead. Sixteen years later, the banking industry is on the cusp of losing the war. To understand the issue, consider a talent management planning session conducted by a community bank a ȱ¢ȱȱȱęȱȱ hit. Like many community bankers, the CEO of this bank started his career in the credit department of a ȱȱȱȱŗşŝŖǯȱ ęȱȱ his own background, over the years he had hired commercial bankers with similar training and experience. As the CEO evaluated his bank’s talent, he discovered good and bad news. The good: He had a solid team. The bad: No one was under the age of 40. Concerned, he instructed his HR manager to build the bench of commercial bankers. To his surprise, HR came back and said it could not ęȱȱ Ȭǰȱ¡ȱ commercial banker under 40 in the marketplace. Why were there no young and well-trained commercial bankers in his market? The CEO discovered that the bigger banks in the region had stopped running traditional credit departments back in the 1990s. ȱȱȱ ȱ ȱ ȱȱęȱȱȱȱ change. First and foremost, much of the industry was in bad shape at the time, which drove consolidation. ȱřǰŖŖŖȱęȱȱ failed from the early 1980s to 1993. ¢ȱę¢ȱ ȱǯȱ Banks responded as expected; weak ones merged into stronger ones, and hiring and training slowed. As the industry started to heal around 1993, mergers accelerated. As merger mania struck full force in the midto-late 1990s, many banks found themselves with excess talent. Second, credit departments began to morph into centralized risk management functions, overseen (so we were told) by risk experts. The evolution of credit scoring models and more technical credit products led to a concentration of top credit experts in risk management ǯȱ ȱȱȱęȱ evolved into “relationship managers” who didn’t need an understanding of how to analyze loan applications. In truth, they were sales representatives who relied on product specialists and credit underwriters to support them when customers and clients wanted a loan. Third, in the late 1990s — despite a rebound in bank hiring from college campuses — new recruits explored ěȱȱǯȱ ȱ no longer moved into general management with an emphasis on credit training. Instead, they took on specialist careers in bank disciplines including human resources, supply- ȱǰȱęǰȱȱȱ on. Fourth, some banks that retained general training programs discovered that the programs were not cost- ěǯȱ ȱ¢ȱȱȱȱ of training is the income realized when graduates serve clients and ȱȱȱęǯȱ ȱ competitors without programs realized that they could recruit newly ȱȱȱęȱȱ ȱ ¡ȱ ȱ DZȱ ȱ яќѢѡȱѡѕђȱ Ѣѡѕќџ Richard J. Parsons is a former executive vice president and corporate operational risk executive with Bank of America. The author of Broke: America’s Banking System, Common Sense Ideas to Fix Banking in America, he is a frequent contributor to The RMA Journal and the American Banker, has been published in Wall Street Journal and appeared on CNBC’s “Closing Bell.” Parsons has presented at several state bank trade associations and at the annual conferences of The Farm Credit Council and The Risk Management Association. He earned a bachelor’s degree from Ohio Wesleyan University and an MBA from the University of Virginia. The author can be reached at richardparsons8@gmail.com.
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