MARCH/APRIL 2025 THE OFFICIAL PUBLICATION OF THE INDIANA BANKERS ASSOCIATION 2025 Mega Conference WASHINGTON’S NEW VISION FOR BANKING PAGE 16
www.GoBaker.com | 800.937.2257 Oklahoma City, OK | Austin, TX Long Island, NY | Salt Lake City, UT Springfield, IL | Member: FINRA and SIPC May 8–9, 2025 AUSTIN, TX Lost Pines Resort 575 Hyatt Lost Pines Rd Cedar Creek, TX 78612 The Baker Group is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.NASBARegistry.org. Asset Liability Management and Investment Strategies Seminar JOIN US AT OUR ANNUAL DESTINATION EVENT After experiencing the most aggressive Federal Reserve tightening cycle in decades, we now enter the next phase, the easing cycle. The critical question persists: Will the Fed achieve the sought-after soft landing, or will the economy tip into its next recession? 2025 continues to be marked by uncertainty following a period of significant pressures and challenges to balance sheets and net interest margins. Senior management will continue to navigate an environment with uncertainty of interest rates, higher cost of funds, tighter liquidity levels, deposit pressures, and the looming threat of an economic downturn. Proactive balance sheet management and a robust ALCO process are more crucial than ever. This seminar will examine the challenges currently faced by CEOs, CFOs, and investment officers who must navigate the next rate cycle. Join us for an in-depth discussion of the following topics: • Economic and Market Update • The Fed’s Next Moves • Regulatory Hot Buttons • Interest Rate Risk • Liquidity Risk Management • Investment Portfolio Strategies • MBS/CMO Market • Municipal Market Update There is no cost for this seminar. AGENDA Thursday, May 8 Breakfast, Seminar, Lunch, Seminar, Adjourn, Dinner Friday, May 9 Breakfast, Seminar, Conclusion, Golf (included) ACCOMMODATIONS A block of rooms is available at Hyatt Regency Lost Pines Resort and Spa. The special room rate will be available until April 9, 2025 or until the room block is sold out. Hotel price: $329–$379 + $25 resort fee. WHO SHOULD ATTEND Financial institutions’ CEOs, CFOs, investment officers, board members, and those who are directly or indirectly responsible for financial management functions will benefit from this seminar. For more information or to register, visit GoBaker. com/texas/ or scan the QR code. Call Skoshi Heron at 888.990.0010 for additional questions. 14 hours of Economics and Finance CPE credits will be earned for your attendance.
DIRECTORS, STAFF AND CREDITS IBA BOARD OF DIRECTORS OFFICERS Matthew W. Howrey, Chair............................. North Salem State Bank David M. Findlay, FirstViceChair.......................... Lake City Bank, Warsaw Lisa Arnold, SecondViceChair........................... Home Bank, Martinsville Benjamin J. Bochnowski, ImmediatePastChair. . . . . . . . . . . . . . . . Peoples Bank, Munster Amber R. Van Til, PresidentandCEO.................... Indiana Bankers Association CONSTITUENT DIRECTORS Garry D. Kleer, ABAMembershipCouncil....................... First Bank Richmond Kent A. Liechty, ICBAStateDirector........................... First Bank of Berne Amanda Morris-Feldman, IBA FLD President . . . . . . . . First Federal Savings Bank, Rochester Karen B. Woods, Non-Indiana Headquartered Banks . . . . . . . . First Financial Bank, Cincinnati REGIONAL AND AT-LARGE DIRECTORS Mark “Doc” Holt, At-Large.................... First Farmers Bank & Trust Co., Converse Nicole S. Lorch, At-Large.............................. First Internet Bank, Fishers J. Daniel Maddox, NorthRegion..................... Citizens State Bank, New Castle Bradley J. Monts, NorthRegion. . . . . . . . . . . . Hoosier Heartland State Bank, Crawfordsville Jacqueline M. Ruge-Perkins, NorthRegion.................. First State Bank of Porter Mark E. Bruin, SouthRegion...................... The National Bank of Indianapolis David A. Coffey, SouthRegion....................... Mutual Savings Bank, Franklin Eric J. Lane, SouthRegion.................. First Federal Savings Bank of Washington IBA FUTURE LEADERSHIP DIVISION ADVISORY BOARD Amanda Morris-Feldman, President .. .. .. .. ...... First Federal Savings Bank, Rochester Greg Barnes Jr., Vice President ........................... STARBank,FortWayne Ryan Anderson .. .. .. .. .. .. .. .. ........... The Fountain Trust Company, Covington Jenilee Bransteter .. .. .. .. .. .. .. .. .. .. .. .. ............... First Bank of Berne Jordan Briggeman . . . . . . . . . . . . . . . . . . . . . Springs Valley Bank & Trust Company, Jasper Ashley Burns .................................. FirstNationalBank,Cloverdale Michael J. Clampitt ...................................NorthSalemStateBank Brandi Dunn .. .. .. .. .. .. .. .. .. .. .. .............. The Farmers Bank, Frankfort Larissa Fox .................................... OldNationalBank,Evansville Kyle Goodwin .. .. .. .. .. .. .. .. .. .. .. .. .. ............... DeMotte State Bank Christopher Griffith .. .. .. .. .. .. .. .. .. .. ............ First Harrison Bank, Corydon Zach Hockersmith . . . . . . . . . . . . . . . . . . . . . Hoosier Heartland State Bank, Crawfordsville Casey Johnson .. .. .. .. .. .. .. .. .. .. .. .. ............. Home Bank, Martinsville Laura Shake .. .. .. .. .. .. .. .. .. .. ............. The National Bank of Indianapolis Casey Shireman ........................................NWSB,Charlestown Vanessa Spicer .. .. .. .. .. .. .. .. ......... Community First Bank of Indiana, Kokomo IBA STAFF Amber R. Van Til ........................................ PresidentandCEO Rod Lasley ......................................... ChiefOperatingOfficer Dax Denton ............................................ChiefPolicyOfficer Christina M. Bennett, CMP . . . . . . . . . . . . . . . . . . . . . . VicePresident–Meetings&Events Evan Hoffmeyer, CAE .. . . . . . . . . . . . . . . . . . . . . . . . . . VicePresident–Communications Josh Myers .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .VicePresident–MemberEngagement Laurie A. Rees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VicePresident–Education&Training Ross Teare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VicePresident–GovernmentRelations Emily Brooks ........................................DigitalMediaManager Maria L. Dowers . . . . . . . . . . . . . . . . . . . . . . Executive & Government Relations Coordinator Molly Gibbs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Events&Products/ServicesAssistant Elizabeth DeHaven ......................................EducationManager Brooke McCormack .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .EducationMeetingCoordinator Timothy Fry .............................................StaffAccountant Tracy Kubly .......................................... TechnologyManager Silvia Regalado ......................................AdministrativeAssistant FINANCIAL SERVICES ACADEMY Chris Fisher ............................................PresidentandCEO OUR ASPIRATION The Indiana Bankers Association strives to grow stronger banks and stronger communities. OUR VALUES In fulfilling our mission, we will: • maintain the highest ethics, integrity and respect for others; • provide service with professionalism, innovation and resourcefulness; • instill passion, a positive attitude and enthusiasm; and • remain mindful that the success of the IBA is judged by the success of its members. indiana.bank Vol. 109 No. 2 INDIANA BANKERS ASSOCIATION 8425 Woodfield Crossing Blvd., Suite 155E Indianapolis, IN 46240-7321 PUBLISHER Amber R. Van Til EDITOR Evan Hoffmeyer, CAE ADVERTISING Josh Myers DESIGN The newsLINK Group SUBMISSIONS HB@indiana.bank ADVERTISING Media kits are available at indiana.bank. Advertising is reserved for members and associate members of the Indiana Bankers Association. DEADLINES Editorial and ad reservations are due the 20th of the month, two months before publication. SUBSCRIPTIONS Subscriptions are provided free of charge to members and associate members of the Indiana Bankers Association. ABOUT The flagship publication of the Indiana Bankers Association, Hoosier Banker is distributed to all banks and thrifts headquartered in Indiana, IBA-member banks headquartered out-of-state and IBA associate members. PUBLICATION DISCLAIMER Hoosier Banker (ISSN 0018 473X) is published bimonthly by the IBA Service Corp., a subsidiary of IBA Holding Company Inc., which is a wholly owned subsidiary of the Indiana Bankers Association. Material published in Hoosier Banker and on the IBA website is the property of the IBA. All rights reserved. CONTACT IBA Email IBA staff using first name initial and last name, plus “@indiana.bank” – example: JDoe@indiana.bank. MARCH/APRIL 2025 3
22 Legislative Day 2025 By Dax Denton & Ross Teare, Indiana Bankers Association 42 Cookie Banners and Online Tracking Technology By David A. Bowen, Krieg DeVault LLP 16 Washington’s New Vision for Banking By Rep. Marlin Stutzman, Indiana’s 3rd District 10 2025 MEGA CONFERENCE 4 HOOSIERBANKER IN THIS ISSUE
24 Features 6 Vantage Viewpoint By Amber R. Van Til, Indiana Bankers Association 7 Chairman’s Report By Matthew W. Howrey, Indiana Bankers Association 8 2025 IBA Education Calendar May-July 10 2025 Mega Conference May 27-29, 2025 26 It’s Time for a Regulatory Reset By Rob Nichols, American Bankers Association 28 Marching to the Beat of Community Banking By Rebeca Romero Rainey, Independent Community Bankers of America 30 Bill King, Former IBA President, Passes Away 32 State Deposits in Indiana Financial Institutions July 1 – Dec. 31, 2024 Articles LENDING & CREDIT 12 An Inside Look at “Dominion of Funds” Asset-Based Lending Uses Key Provision to Link Borrowers and Financiers By Rhett Rowe, Bridge Business Credit HUMAN RESOURCES 14 Interplay Between FMLA, State/Local Leave Laws & Employer Paid Time Off The DOL’s Recent Guidance By Debra A. Mastrian, Amundsen Davis LLC 49 Choosing Vesting Requirements for Qualified Retirement Plan Purposes By Kristoffer Aas, Ascensus CONGRESSIONAL UPDATE 16 Washington’s New Vision for Banking By Rep. Marlin Stutzman, Indiana’s 3rd District SALES & MARKETING 19 The Case for Personalized Digital Marketing at Community Banks By Hannah Day, CSI GR SUMMIT 22 Legislative Day 2025 By Dax Denton & Ross Teare, Indiana Bankers Association BANKER PROFILE 24 Jill M. Smith Vice President, Mortgage Loan Originator – Mutual Savings Bank, Franklin PRODUCTS & SERVICES PROFILE 34 Do You Want and Need More From Your Data? By Rod Lasley, Indiana Bankers Association COMPLIANCE CONNECTION 42 Cookie Banners and Online Tracking Technology By David A. Bowen, Krieg DeVault LLP DIRECTORS & SENIOR MANAGEMENT 44 The Next Step for the GSEs By Andrea F. Pringle, The Baker Group FLD FOCUS 46 Make the Most of Your Year with the FLD By Josh Myers, Indiana Bankers Association AG BANKING 53 52nd Annual Midwest Agricultural Banking School By Michael Langemeier, Purdue University Departments 6 Don’t Miss Out! 7 Digital Extras 13 From the Board Room 27 Anniversary Milestones 29 Taking It Easy 29 IBA ‘High Five’ Awards 36 Bankers On the Move 39 Banking Center News 40 Honorable Mentions 40 Mergers & Acquisitions 54 Associate Members’ Corner 55 Banking On Community 55 Advertiser Index MARCH/APRIL 2025 5 INTERACT WITH IBA
A Vantage VIEWPOINT BY AMBER R. VAN TIL, INDIANA BANKERS ASSOCIATION As I write, we are closing in on the halfway point of the state legislative session. Between the biennial budget lawmakers must craft and a number of other bills that could impact our members, it has been a busy session already, but your Association has kept you in a strong position. I am so proud of our team, the reputation they have built as one of the most trustworthy at the Statehouse over decades of high-quality work, and the way they passionately speak for our members both in and out of Session. They have already made progress this year in neutralizing problematic legislation and building an alliance for bills we are actively supporting to create the best business environment for the Indiana banking industry — and by extension, the communities our members serve. Dax Denton and Ross Teare gave our members an in-depth look at those bills at our annual Legislative Briefing and Reception on Feb. 4 and again for our Future Leadership Division on March 4. Read more about the Briefing on pages 22-23 of this issue and FLD Day at the Statehouse in our May/June issue. Looking to the future, remember that our annual Cyber, Fraud and Physical Security Conference has moved from the fall to the spring this year. Join us April 16-17 at the Embassy Suites in Noblesville to get the mitigation strategies and topics your bank needs to combat the next generation of fraud. Meanwhile, Mega Conference is a bit later than normal, May 27-29, and our host hotel this year is the JW Marriott. Learn about this year’s keynote speakers and how to register on pages 10-11 of this issue. And we are excited to celebrate Lucas White at ICBA LIVE for his work this past year as chairman of the Independent Community Bankers of America. This was only the second time in IBA history that one of our members served as chair of a national trade, and Lucas was more than deserving of the honor. Amber R. Van Til President and CEO Indiana Bankers Association AVanTil@indiana.bank DON’T MISS OUT! 1 Cyber, Fraud & Physical Security Conference April 16-17 A unique opportunity to enhance security practices, foster collaboration and exchange knowledge on effective strategies. 2 Mega Conference May 27-29 Mega is the largest, most comprehensive state banking event in the nation. 3 FLD Leadership Conference July 9-10 Emerging leaders build skills and strengthen networks at this Future Leadership Division event. Thomas C. Fite, director of the Indiana Department of Financial Institutions, addressed the IBA Board of Directors and Government Relations Committee at the IBA’s annual Legislative Briefing & Reception at the Hyatt Regency Indianapolis, Feb. 4, 2025. 6 HOOSIERBANKER
T DIGITAL EXTRAS Use the QR code to read every article in this issue, plus these digital-only stories! 1 Interest Rates’ Impact on M&A Rising interest rates in recent years profoundly impacted the fair value of assets in financial institution mergers and acquisitions. 2 Fiduciary Trust vs. Wealth Management While some believe these services often overlap, they are based on distinct differences and serve different purposes. 3 Top Challenges and Opportunities for Community Banks in 2025 From data privacy to interest rates, see the results of CSI’s annual Banking Priorities Survey on the pulse of community banking trends. Chairman’s REPORT BY MATTHEW W. HOWREY, INDIANA BANKERS ASSOCIATION There may not be any federal elections this year, but there is still a ballot most of our banks will be asked to fill out this fall – for two seats on the board of the Federal Home Loan Bank of Indianapolis. Last year, the IBA entered new territory in endorsing candidates to fill both seats that were open in 2024. We ran an internal “primary” process calling for nominations of anyone who wanted a shot at those seats. The plan was then to send out those names for every IBA-member bank that was also part of the FHLBI network so our members could choose who they wanted to support. Those names would then receive the IBA’s endorsement and a call for all IBA members to support them in the official FHLBI election. Only two bankers put their names forward, so they automatically received the IBA’s endorsement, and our strategy worked – Jamie R. Shinabarger and Dan L. Moore were both elected to the FHLBI board, maintaining one banker-held seat and flipping a second from a credit union back to banker control. The FHLBI has two Indiana-based seats up for election this year, both currently held by bankers who are eligible for reelection – Larry W. Myers, president & CEO of First Savings Bank, Jeffersonville, who was first elected in 2018 and currently serves as vice chair of the FHLBI board; and J. Daniel Maddox, CEO & chair of Citizens State Bank, New Castle, who was appointed to his seat last April to fill a vacancy and is now on the ballot for his first full term. Nominations for the IBA’s “primary” process will be accepted from March 31 through April 25. A link to the nomination form will be sent to the head(s) of every IBA-member bank in the FHLB system. Voting will then be open for two weeks from May 5-16. The top vote-getters will be announced both over email on May 21 and from the stage at the Mega Conference. With the IBA endorsement comes: ▶ an announcement in the July/August issue of Hoosier Banker with a clear call from me as IBA chairman for all IBA member banks to support the top two vote-getters in order to maximize our chances to get bankers in both open seats; ▶ a reminder email to all IBA members who are eligible to vote in the FHLBI election ahead of the voting period; and ▶ 1-2 email reminders during the FHLBI voting period. The IBA does not show favoritism among its members, but we fight to preserve the voice of banks in the Federal Home Loan Banks. It is the Board’s position that this process represents our best foot forward in doing that. Matthew W. Howrey Chairman Indiana Bankers Association President and CEO North Salem State Bank Matt MARCH/APRIL 2025 7
2025 IBA EDUCATION CALENDAR EDUCATION CALENDAR See all education opportunities at indiana.bank/calendar. MAY Commercial & Residential Appraisals: Reviewing & Interpreting May 1: IBA Center BSA Officer Forum – Group 1 May 7: IBA Center BSA Officer Forum – Group 2 May 8: IBA Center Community Bankers for Compliance – Part 2 May 13: IBA Center & Virtual Frontline Branch Series – Part 1 May 14: Virtual Senior Retail Banking Officer Forum May 15: IBA Center Bank Security Officer Forum May 20: IBA Center Compliance Officer Forum May 20: IBA Center Essentials of Banking – Part 5: Banking Compliance Overview May 22: Virtual Mega Conference May 27-29: Indiana Convention Center, Indianapolis JUNE General Banking School (in partnership with the Kentucky Bankers Association) June 2-6: Griffin Gate Marriott, Lexington, KY 2025 Commercial Lending School June 2-6: IBA Center Senior Lender Forum – Group 1 June 11: IBA Center Senior Lender Forum – Group 2 June 12: IBA Center CFO Forum – Group 1 June 12: IBA Center CFO Forum – Group 2 June 13: IBA Center Emerging Leader Digital Program – Part 1: Managing and Performance June 17: Virtual Marketing AI Bootcamp June 23: IBA Center & Virtual Marketing Directors Forum June 24: IBA Center Frontline Branch Series – Part 2 June 25: Virtual Information/Cybersecurity/IT/ Operations Officer Forum – Group 1 June 25: IBA Center Information/Cybersecurity/IT/ Operations Officer Forum – Group 2 June 26: IBA Center Essentials of Banking – Part 6: WOW! Service and Growing the Bank June 26: Virtual Chief Operations Officer Forum June 27: IBA Center JULY FLD Leadership Conference July 9-10: Renaissance Indianapolis North, Carmel Outside Calling School – Part 1 July 10: Virtual Understanding Bank Performance July 10-11, 17-18, 24-25, 31 & Aug. 1: Virtual Emerging Leader Digital Program – Part 2: Influence & Relationships July 15: Virtual Outside Calling School – Part 2 July 17: Virtual Essentials of Banking – Part 1 July 17: Virtual 8 HOOSIERBANKER
Honor the shining stars of banking in your community by nominating the leaders, past and present, who have helped lead your institution to excellence. For more information about the annual IBA Leaders in Banking Excellence awards and nomination process, please contact Rod Lasley at the IBA, 317-387-9380, RLasley@indiana.bank. This prestigious distinction, IBA’s highest honor, celebrates exceptional bankers throughout Indiana’s history who have left their mark in Banking Community Service Civic Involvement Please consider the current and past presidents, CEOs, directors and others who have played an integral part in the success of your institution at the local level, as well as in the Indiana banking community. 2025 class of the IBA Leaders in Banking Excellence. Now through March 30, 2025, the Indiana Bankers Association is accepting nominations for the
2025 MEGA CONFERENCE MAY 27-29, 2025 JW MARRIOTT & INDIANA CONVENTION CENTER The financial industry is evolving at an unprecedented pace. Artificial intelligence, generational shifts in the workforce and rapidly changing market conditions – combined with a new regulatory environment – are reshaping the future of banking. Are you ready to accelerate growth, adapt to change and lead the way? Mega 2025 will equip you with tools, insights and strategies to embrace innovation, harness emerging technologies and drive sustainable success. This year’s theme, “Accelerating Growth,” underscores the need to evolve in a world where agility, innovation and leadership define the path forward. Join us for an immersive experience where strategy meets execution, innovation fuels progress and success is redefined. REGISTER TODAY! 10 HOOSIERBANKER
5 KEYNOTE FROM BOOMERS TO ZOOMERS: CREATING A WINNING WORKFORCE ACROSS GENERATIONS Lindsay Boccardo Thursday, May 29 Do you ever wonder why interactions with colleagues from different generations can feel so frustrating? This session explores the miscommunications and frustrations that arise between generations and provides a practical game plan to foster harmony and collaboration. You’ll learn why generational divides exist, uncover the four common factors fueling workplace misunderstandings, and practice turning tense conversations into golden opportunities. Additionally, we’ll examine what future employees will expect from their workplace. For those ready to embrace curiosity and shift from judgment to growth, this session offers the tools to become a leader who attracts and mentors younger generations by being open to change, eager to grow and willing to do things differently. Sponsored by Keynote ONE DECISION AWAY: BREAKING THROUGH FEAR AND ADVERSITY TO ACHIEVE SUCCESS David Atkins Wednesday, May 28 Fear, adversity and excuses often determine the difference between those who achieve true success and those who do not. While everyone encounters these challenges, only a select few know how to overcome them. In this empowering session, David introduces the “One Decision Away” philosophy – a transformative model designed to help individuals and organizations break through mental barriers and unlock their full potential. You’ll learn how to cultivate a clear vision, develop a resilient mindset and embrace a sense of urgency to align daily actions with long-term goals. Leave with practical strategies to turn aspirations into achievements and seize opportunities for meaningful success. Sponsored by 11 MARCH/APRIL 2025
O An Inside Look at “DOMINION OF FUNDS” ASSET-BASED LENDING USES KEY PROVISION TO LINK BORROWERS AND FINANCIERS BY RHETT ROWE, BRIDGE BUSINESS CREDIT Once considered the financing method of last resort, especially for distressed companies, asset-based lending has emerged as a structure of choice for companies of all sizes across a wide range of industries. Today, an ABL is no longer just an attractive alternative in challenging times when cash flow is strained but is also a practical financing method during “good times.” ABLs work cooperatively with commercial banks. The goal of an ABL is helping client companies regain financial stability so they can return to conventional financing as soon as possible, on some occasions within one year. A key aspect of an asset-based lending agreement, where the financier provides a borrowing base loan secured against the borrower’s receivables, is to include provisions that relate to dominion of funds, also known as “lockbox.” The term “dominion of funds” is used to describe the mechanism where proceeds of receivables collected into a borrower’s deposit (collection) account are swept by the financier and applied to the loan balance. This is different than allowing those funds to be transferred to the borrower’s general deposit accounts for its own discretionary uses. Dominion of funds provides obvious benefits for the financier since they will usually have taken control over the proceeds of those receivables when making the loan. At the same time, by virtue of the loan being repaid using those proceeds, the financier’s exposure at any time is more closely aligned with the value of unpaid receivables. In turn, the borrower should not be significantly inconvenienced by the application of the proceeds to the loan, as this will free up availability, pay down the loan balance – reducing borrowing costs – and permit the borrower to advance further amounts providing there is sufficient borrowing base availability. Dominion of funds may be in place from day one of the agreement or may be triggered on a springing basis (see below), depending on the commercial agreement between the financier and the borrower. Another common feature built into ABLs is “springing dominion.” With this feature, if the borrower exceeds a certain level of borrowing base availability, say 15%, as its A/R is converted to cash, the borrower retains control over its A/R conversion. It’s only when availability drops below that threshold that the proceeds are governed by “full dominion” and are automatically used to pay down the outstanding revolving loan balance. If the loan is a “springing dominion” transaction, then typically, so long as the level of the outstanding debt is lower than the borrower’s available credit under the asset-based lender’s loan facility or less than the borrowing base, the payments may be sent to and collected in a lockbox and swept to a deposit account controlled by and accessible to the borrower. In a “full dominion” asset-based loan, the payments that are paid into the lockbox account are applied to repaying the outstanding balance owed on the loan as the payments are received daily. LENDING & CREDIT 12 HOOSIERBANKER
These types of dominion stipulations can be at the heart of any workable ABL, allowing both the financier and the borrowing company to work together in a relationship that ensures protection for all the parties involved and promotes economic success, whether in good times or challenging ones. Ultimately, this is done with the aim of returning the ABL client to the traditional commercial lending sector. Generally, business owners and their management teams benefit from dominion of funds and borrowing base reporting protocols as it exposes a business’s true operating cash flow. When embraced, dominion of funds provides a highly useful management tool. FROM THE BOARD ROOM Sharon Walker was elected chair of the board for First Federal Savings Bank, Evansville, at its November meeting, and Kenan Schultheis was re-elected to his position as vice chair. Walker, founder and president of The Long View Group LLC, a finance and strategy consulting firm, has been on the board since July 2022. Schultheis joined the board in April 2021. He is secretary-treasurer and vice president of Schultheis Insurance in Evansville. Wes Herschberger joined the board for First State Bank of Middlebury in January. An entrepreneur with more than 30 years of experience in the technology and IT services industries, he founded and chairs the board of MapleTronics Computers, a leading IT service provider based in Goshen. He actively serves on the boards of the Goshen Health Foundation, Greencroft Communities and Maple Grove Community Church. The National Bank of Indianapolis added two new members to its board in November. John E. Bourquard served as principal and national practice leader of credit risk and loan review services at Forvis Mazars LLP, an IBA associate member, from 1998 until retiring last year. Charles “Chuck” E. Schalliol most recently served the international law firm of Faegre Drinker Biddle & Reath LLP as a senior advisor. He currently serves on the board of Heritage Construction and Materials Company and is a director of the Purdue Research Foundation and the Indiana University Research and Technology Corporation as well as chair of INvestEd, Indiana’s financial education and literacy corporation and an IBA associate member. Schalliol previously served as director of the Indiana Office of Management and Budget and chief financial officer for the State of Indiana under Gov. Mitch Daniels. Rhett Rowe CEO Bridge Business Credit Rowe@BridgeBusinessCredit.com Bridge Business Credit is an associate member of the Indiana Bankers Association. MARCH/APRIL 2025 13
I Interplay Between FMLA, STATE/LOCAL LEAVE LAWS & EMPLOYER PAID TIME OFF THE DOL’S RECENT GUIDANCE BY DEBRA A. MASTRIAN, AMUNDSEN DAVIS LLC In a Jan. 14, 2025, opinion letter, the Wage and Hour Division of the U.S. Department of Labor clarified some thorny questions regarding the interplay between the Family Medical Leave Act and state or local mandated or provided family and medical leave laws. Specifically, the DOL addressed whether an employer can require an employee to substitute their accrued paid time off (vacation and/or sick time) when both the FMLA and state/local family and medical leave laws are in play. FMLA The FMLA is a federal law that covers employers with 50 or more employees for at least 20 workweeks in the current or preceding calendar year. Employees may be eligible to take up to 12 workweeks of unpaid job-protected leave in a 12-month period for certain qualifying reasons1 if they: ▶ Have worked for the employer for at least 12 months; ▶ Have worked at least 1,250 hours during the prior 12 months (as of the date the requested leave is to begin); and ▶ Work at a location where the employer has 50 or more employees within a 75-mile radius. The FMLA requires only unpaid leave; however, an employer may require employees (or employees may elect) to substitute accrued paid time for their unpaid FMLA leave. In other words, employers may require (or employees may choose) that the accrued paid time off runs concurrently with the unpaid FMLA leave. State and Local Leave Laws Some states and the District of Columbia have enacted state paid family and medical leave programs, including California, Colorado, Connecticut, Delaware, Maryland, Massachusetts, Minnesota, New Jersey, Oregon, Rhode Island and Washington. These laws differ as to the amount of leave and qualifying events but generally provide a covered employee with a percentage of their regular income during their leave. Other states have enacted paid sick leave or other paid time off laws. For example, Illinois enacted a Paid Leave for All Workers Act, which allows employees to earn up to 40 hours of paid leave each year to use for any reason. Some municipalities have also enacted sick leave laws. Over 20 cities and counties in other states (mostly in California) have mandatory paid sick leave laws. For example, Chicago has a Paid Leave and Paid Sick and Safe Leave ordinance that covers any employee in Chicago who works at least 80 hours for an employer in any 120-day period. Indiana does not currently have any mandatory paid leave law; however, if an Indiana business has operations or locations in another state, they are subject to the laws of those jurisdictions. Also, if an Indiana business has employees who HUMAN RESOURCES 14 HOOSIERBANKER
work remotely from their homes or other remote locations in another state, the employer must, typically, comply with the laws of the state where the remote worker resides. Guidance From the DOL The DOL answered questions about what happens when an employee is entitled to leave under both the FMLA and a state or local family and medical leave law. The DOL clarified that while the time off runs concurrently with any FMLA leave entitlement, the employee cannot be required to substitute their paid time off during the part of the FMLA leave that is being fully compensated by state or local paid family and medical benefits. If an employee is only receiving a partial wage replacement benefit under the state or local paid leave program, the employer and employee may both agree (but the employer cannot require) that the employee use their accrued paid time off to supplement the state/local benefits. The DOL likened the situation to leaves of absence that are taken in connection with a disability leave plan (e.g., short-term disability insurance program) or workers’ compensation, where the employee is also entitled to FMLA leave and these same rules apply. To be clear, the DOL guidance does not affect FMLA leave generally. If only FMLA leave is at play (and no state/local paid family and medical leave law), employers can still either allow or require the use of accrued paid time off during their unpaid FMLA leave (unless an applicable state law provides otherwise).2 What Employers Need to Know The key takeaways from the DOL guidance are: ▶ When an employee’s leave qualifies for both FMLA and state or local paid family and medical leave, the employer must designate the time off as FMLA. ▶ Employers cannot require an employee to substitute their accrued paid time off during the part of their FMLA leave where the employee is being fully paid under a state/local family or medical leave law. ▶ If the employee is only receiving a partial payment under the state/local program, the employer and employee may mutually agree to supplement the state/local benefits with accrued paid time off, where permitted by state/local law. ▶ Once the employee’s state/local benefits end, the FMLA substitution rule applies. In other words, the employer can require an employee to use their accrued paid time off for the remaining unpaid portion of the leave. Employers that are subject to the FMLA with locations or remote employees in states or localities that have paid leave laws or ordinances should review their FMLA policy and administration practices to ensure they are in compliance. The information in this article is provided for general information purposes only and does not constitute legal advice or an opinion of any kind. You should consult with legal counsel for advice on your institution’s specific legal issues. 1 The qualifying reasons for leave include parenting (leave to care for the employee’s newborn child, or child who has been adopted by the employee or placed with the employee by foster care), the employee’s medical condition (leave for a serious health condition that makes the employee unable to perform the essential functions of their job), family medical (leave to care for a spouse, child or parent who has a serious medical condition), military family exigency (leave for a qualifying exigency arising out of the fact that an employee’s spouse, son, daughter or parent is a service member on covered active duty or called to covered active duty status) and military caregiver (26 workweeks of leave in any one 12-month period to care for a covered service member with a serious injury or illness if the eligible employee is the service member’s spouse, son, daughter, parent or next of kin). 2 Wisconsin, for example, has a mini-FMLA law (the WFMLA), which prohibits an employer from requiring the employee to use available paid time off during the two-week WFMLA leave period. Under that law, an employee may elect to use their paid time off during that period. Debra A. Mastrian Partner Amundsen Davis LLC DMastrian@AmundsenDavisLaw.com Debra grew up watching her father practice law and seeing him help people resolve their problems inspired her to become a lawyer. With a focus on employment litigation and counseling, Debra’s practice includes defending employers against discrimination claims, wage and hour violations, retaliation claims, unfair competition and FLSA collective actions. She also handles a wide range of business litigation matters. Amundsen Davis LLC is a Diamond Associate Member of the Indiana Bankers Association. MARCH/APRIL 2025 15
T Washington’s New Vision FOR BANKING BY REP. MARLIN STUTZMAN, INDIANA’S 3RD DISTRICT The financial sector drives American economic growth and global competitiveness. Yet, this vital industry has been burdened by many inhibitors that have obstructed its ability to thrive. This Congress, the House Financial Services Committee is committed to eliminating these roadblocks by reducing unnecessary red tape, expanding access to capital for small businesses and community banks, and fostering innovation. These priorities aim to create a more dynamic and robust financial system that will allow the American economy to truly enter a new Golden Era. Overregulation stifles economic progress, making it harder for financial institutions to serve their customers. Community banks, which provide nearly 40% of all small business loans in the U.S.,1 are particularly burdened by excessive compliance costs. The Dodd-Frank Act of 2010 “nearly doubled the number of regulations for U.S. banks and added approximately $50 billion in annual compliance costs for the industry,” according to the American Bankers Association.2 Fifteen years later, we are still seeing the detrimental impacts of several provisions within Dodd-Frank, which was not helped by the rulemakings of the Biden administration, killing jobs and increasing red tape. The House Financial Institutions Committee is prioritizing efforts to ensure that regulations are appropriately tailored to mitigate actual risk. A key focus will be examining the current regulatory frameworks at the Treasury Department and the Consumer Financial Protection Bureau to ensure that the supervisory landscape is clarified and does not excessively infringe on financial institutions. The committee also recognizes that specified regulations with a clear compliance system can serve to protect consumers without hindering growth. It can be made possible by eliminating redundant and overly complex regulations that currently stand in the way of banks focusing their resources on growth and serving their customers. If the financial industry is the engine of economic growth, then small businesses and community banks are the pistons that give the engine the power to operate. Small businesses create nearly two-thirds of all new jobs,3 yet many struggle to access the capital needed to expand. A recent study by Goldman Sachs found that 77% are concerned about access to capital.4 We are working to modernize outdated lending regulations that disproportionately impact small banks and credit unions. These institutions play a crucial role in supporting local businesses, yet they face increasing compliance costs that limit their ability to lend. By reforming these policies, we can ensure that banks have the flexibility to serve their customers without unnecessary government interference. A modern financial system must embrace innovation while maintaining market stability. The committee is dedicated to reforming outdated regulatory structures, including those set forth by the U.S. Securities and Exchange Commission. Doing so will create a more coherent oversight framework that will encourage responsible innovation, enhance market efficiency and provide greater clarity for financial institutions exploring emerging technologies. By addressing inefficiencies and overreach, we can create an environment that encourages responsible financial innovation while ensuring fair and stable markets. In 2023, the House Financial Services Committee passed the bipartisan Financial Innovation and Technology for the 21st Century Act (FIT21), which provided a “fit for purpose” regulatory framework for digital assets that establishes a comprehensive regulatory framework for cryptocurrency regulation that includes strong, reliable consumer protections and enables digital asset innovation to thrive in the U.S. This Congress, we have a real opportunity to enact legislation into law and preserve United States’ supremacy CONGRESSIONAL UPDATE 16 HOOSIERBANKER
over emerging technologies. Chairman French Hill, R-Ark., has been in close discussions with relevant stakeholders in the House, Senate and Trump administration, and is working to make sure we are marching in lockstep. Many lessons were learned as the committee drafted FIT21, and I am excited to work with the chairman and committee to use those lessons learned to inform our work on market structure and stablecoin this Congress. Advancements in financial technology have the potential to revolutionize banking services. As policymakers, it is our job to ensure that consumers and investors are protected, and that the U.S. remains a leader in these emerging technologies. The problem remains, however, that without a regulatory framework that supports responsible innovation, these advancements risk being stifled. By modernizing financial regulations, we can ensure that banks can remain competitive in a rapidly evolving marketplace. A strong financial system relies on smart regulation, small business growth and innovation. By cutting red tape, expanding capital access and embracing financial technology, we can create new opportunities for banks and communities. 1 “FDIC Community Banking Study, 2020.” Federal Deposit Insurance Corp. https://www.fdic.gov/resources/communitybanking/report/2020/2020-cbi-study-4.pdf 2 “ABA urges agencies to ease regulatory burden on banks.” American Bankers Association, Oct. 30, 2024. https://bankingjournal.aba.com/2024/10/ aba-urges-agencies-to-ease-regulatoryburden-on-banks/ 3 “Frequently Asked Questions About Small Business, 2023.” U.S. Small Business Administration Office of Advocacy. March 7, 2023. https://advocacy.sba.gov/2023/03/07/ frequently-asked-questions-about-smallbusiness-2023/ 4 “Small businesses are facing a credit crunch.” Goldman Sachs, Oct. 23, 2023. https://www.goldmansachs.com/communityimpact/10000-small-businesses-voices/baseliii-endgame SWITCH TO HB DIGITAL Convert to HB Digital to enjoy: ▶ bonus links to videos, photos and more ▶ portability by smartphone and tablet ▶ early access, averaging two weeks ahead of snail mail Hoosier Banker is available free of charge to all IBA members and associate members. To start your HB Digital subscription or convert from hard copy to digital‑only, email HB@indiana.bank. Marlin Stutzman Indiana’s 3rd District U.S. Congress Rep. Marlin Stutzman is a fourth-generation farmer from Howe. He returned to Congress in 2025 after previously serving from 2010-16. In his time away from Congress, Marlin was a successful entrepreneur in the manufacturing, agricultural and food service spaces. Rep. Stutzman is a member of the U.S. House Financial Services Committee. MARCH/APRIL 2025 17 www.hokansoninc.com Property Management & Maintenance Leasing & Brokerage Development & Project Management Construction Management Corporate Real Estate Consulting Accounting Services ▪ ▪ ▪ ▪ ▪ ▪ ALL OF YOUR REAL ESTATE NEEDS IN ONE COMPANY
BOK Financial® and We go above. So you can go beyond.® are trademarks of BOKF, NA. Member FDIC. Bank dealer services offered through BOK Financial Capital Markets, which operates as a separately identifiable department of BOKF, NA. BOKF, NA is the bank subsidiary of BOK Financial Corporation. Investment products are: NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE We go above. So you can go beyond. Seeking a fresh perspective on your interest rate risk and balance sheet management? As a community banker, your time is valuable. With mounting margin pressures, maximizing earnings from your investment portfolio is crucial. Our unique approach integrates portfolio management within the overall interest rate risk position, optimizing balance sheet performance. At BOK Financial Capital Markets, we help you navigate regulatory requirements with a comprehensive, cost-efficient, tailored solution to enhance your institution’s performance by engaging your management team to formulate ideas and execute strategies that drive results. Budgeting Profit projections ALCO Capital planning Decay/beta analysis Regulatory compliance Investment portfolio Investment mix Interest rate risk Loan pricing Board education Liquidity stress testing Brokered funding SCAN TO LEARN MORE OR VISIT BOKFINANCIAL.COM/INSTITUTIONS
T The Case for PERSONALIZED DIGITAL MARKETING AT COMMUNITY BANKS BY HANNAH DAY, CSI Today’s consumers expect a seamless, personalized digital experience, especially with their financial institution. As institutions look to grow, a one-size-fits-all approach to digital marketing is not as effective as data-driven strategies to personalize and resonate with customers on their chosen channel. Using data to develop personalized marketing initiatives on digital channels can help community banks break through the noise, reaching new customers and deepening relationships with existing ones. Understanding Your Customers: The Importance of Effective Segmentation Understanding customer data and demographics is the first step in elevating your digital experience. At the most basic segmentation level, institutions should be able to differentiate between business and consumer customers. Each of these groups will have different messaging and product offerings. On the consumer side, various segments could benefit your institution, such as high-net-worth individuals, recent graduates or those close to retirement. Viewing your customers in segments allows you to better understand and anticipate their needs, as well as tailor what they see across their digital experience. Examples of segments include: ▶ Life stages: Certain life stages typically involve financial activity, and clues in a consumer’s financial data can indicate which common life stage or event could come next. For instance, a recently married couple has different financial needs or goals than one approaching retirement. If a customer recently had a series of wedding-related purchases and a last name change, there may be an opportunity to offer specific services or products more relevant to that stage of life. ▶ Credit score: Surfacing an end user’s credit score within the digital experience is one of many powerful insights that data can bring to your customer base. Financial institutions could choose to direct educational content toward a group with a lower-than-average score. This approach allows you to determine types of products to market to this group that would increase their financial literacy and education. This segmented approach holds for business customers as well. Your institution could look at transactions for small businesses to determine the health and maturity of the company, providing you with insight into ways you can support them in their business journey. SALES & MARKETING Having flexibility within your digital experience to personalize the messages and locations based on your segment is critical. “ MARCH/APRIL 2025 19
Whether they’re a startup, “mom-and-pop” shop or mid-sized organization, they will need solutions that address their unique needs. 5 Tools Community Banks Can Use for a Holistic Marketing Strategy As you nurture customers throughout their life cycle, reduce attrition with these five channels: 1. Digital Banking Digital banking should be consistent across every channel. If a user logs into their account on a desktop, your bank can serve them with a personalized pop-up ad based on their segment or past transaction history. Your institution can communicate with calls to action and drive adoption through custom text, secure digital messaging and push notifications. 2. Customer Relationship Management An effective CRM platform should provide a holistic customer view by linking sales, operations, branch, digital and call center interactions to support marketing opportunities. Your CRM should also allow you to schedule appointments, send notifications, release targeted emails or marketing campaigns and more. Updating your CRM with regular documentation like contact information, credit scores and marketing preferences can open the door to building personal connections and cross-sales opportunities. 3. Email Campaigns Often linked with CRM, email is another tool to help your institution communicate with customers. While some customers prefer in-person interactions, others may prefer receiving emails. Targeted marketing emails can be an effective way to reach customers with relevant offers. 4. Customer Service Tools Customer service tools like digital banking messaging and text, voice and video communication help bridge the gap between physical and digital channels. Chatbots can also be embedded in the digital banking experience to address customers’ immediate questions or needs and suggest related products or services. Authenticated chat can be managed by your institution’s employees or trained on preliminary conversations to expedite assistance. 5. In-Branch Experience Although most customers are comfortable navigating digital channels, some customers still prefer the branch for certain financial activities. So, your customer experience should seamlessly flow from the digital world to the physical one and vice versa. If someone begins a loan application online, the in-branch representative should be able to help them pick up right where they left off. Bridging the Digital Divide: Finding Ways to Reach Your Customers The placement of marketing initiatives also varies within the digital experience. Some users – such as Gen Z or millennials – may be more likely to use and engage with ads within the digital banking experience versus an email from your institution. Having flexibility within your digital experience to personalize the messages and locations based on your segment is critical. Community banks have always played a unique role locally and are well suited to take advantage of non-traditional methods to meet new customers. For example, in areas offering attractive outdoor adventures like hiking trails, some banks set up small booths to pass out water bottles or breakfast burritos emblazoned with a QR code to their website, blending physical and digital outreach. Ultimately, banks that blend these tactics, leaning into customer segmentation while meeting them in the channel of their choosing with campaigns targeted to their needs, will strengthen the relationship and trust with their customers. Hannah Day Senior Director of Digital Banking CSI media@CSIweb.com Based in Denver, Colorado, Hannah comes to CSI with 20 years of experience in digital banking. She is passionate about community financial institutions and equipping them with the best digital banking experience, so they can serve the unique needs of their customers and communities. Computer Services Inc. (CSI) is an associate member of the Indiana Bankers Association. SALES & MARKETING CONT. 20 HOOSIERBANKER
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