MAY/JUNE 2025 THE OFFICIAL PUBLICATION OF THE INDIANA BANKERS ASSOCIATION Jim Ryan HOMETOWN HEART
nk india SYMPOSIUM SHAREHOLDER Anthony Chan CHIEF ECONOMIST & CHAIRMAN CHAN ECONOMICS LLC More information 8.21.25 MARRIOTT NORTH INDIANAPOLIS, IN CONNECT | LEARN | GROW Josh Linkner CO-FOUNDER & CHAIRMAN PLATYPUS LABS Frank Kelly FOUNDER & MANAGING PARTNER, FULCRUM MACRO ADVISORS LLC Cindy Konich PRESIDENT & CEO FHLBANK INDIANAPOLIS
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. 3 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. MAY/JUNE 2025 3
28 Brit C. Hollopeter Assistant Vice President, Retail Loan Operations Manager – Lake City Bank, Warsaw 38 FLD Day at the Statehouse Sees Record Turnout By Josh Myers, Indiana Bankers Association 24 Saving on TEFRA Through an Investment Subsidiary By Larry M. Wood, The KeyState Companies 12 Jim Ryan HOMETOWN HEART 4 HOOSIERBANKER IN THIS ISSUE
46 Features 6 Vantage Viewpoint By Amber R. Van Til, Indiana Bankers Association 7 Chairman’s Report By Matthew W. Howrey, Indiana Bankers Association 8 IBA Member Benefits Report 2024 10 2025 IBA Education Calendar July-September COVER STORY 12 Jim Ryan Hometown Heart 20 Your Advocacy Impact By Rebeca Romero Rainey, Independent Community Bankers of America 22 Celebrating a Legacy of Collaboration By Rob Nichols, American Bankers Association Articles COMPLIANCE CONNECTION 16 HELOC Closing Costs Waiver By Brett J. Ashton, Krieg DeVault LLP DIRECTORS & SENIOR MANAGEMENT 18 Bank Trends: Can Margin Improvement Continue in 2025? By Dillion Wiedemann, The Baker Group PSP SHOWCASE 24 Saving on TEFRA Through an Investment Subsidiary By Larry M. Wood, The KeyState Companies BANKER PROFILE 28 Brit C. Hollopeter Assistant Vice President, Retail Loan Operations Manager – Lake City Bank, Warsaw HUMAN RESOURCES 36 DEI and Affirmative Action Compliance Under the Trump Administration By Debra A. Mastrian, Amundsen Davis LLC FLD FOCUS 38 FLD Day at the Statehouse Sees Record Turnout By Josh Myers, Indiana Bankers Association WASHINGTON UPDATE 40 Renewing the American Dream By U.S. Sen. Jim Banks PRODUCTS & SERVICES PROFILE 42 New Name, New Vision By Rod Lasley, Indiana Bankers Association LENDING & CREDIT 46 The Future of Small Business Credit Card Programs By Anil Goyal, CorServ Departments 6 Don’t Miss Out! 7 Digital Extras 17 Taking It Easy 23 Banking On Community 26 Associate Members’ Corner 30 Bankers On the Move 34 Anniversary Milestones 35 IBA ‘High Five’ Awards 44 From the Board Room 45 In Memory Of … 47 Mergers & Acquisitions 50 Honorable Mentions 52 Banking Center News 54 Advertiser Index MAY/JUNE 2025 5 INTERACT WITH IBA
O Vantage VIEWPOINT BY AMBER R. VAN TIL, INDIANA BANKERS ASSOCIATION One of the many things that I love about my job is how easy it is to show you exactly how well your Association is doing year after year with our annual Member Benefits Report. Bankers took advantage of more education last year, including a 5% increase in the number of bankers who attended IBA’s Annual Convention and an 8% increase in D.C. Trip attendees. A huge thank-you to all the supervisors who invested in their bankers, to the IBA professional staff and volunteers who made those events happen, and to all our members for your continued support and engagement. Special recognition goes to our associate members for supporting our events and other programming at such a generous level that we have been able to hold IBA’s dues structure to be one of the lowest of any state bankers association in the nation. Similar thanks also go to the entire IBA professional staff whose hard work drove an increase in nearly every area of non-dues revenue. The charts on this page show how the IBA continues to spend relatively little on office management and administration, instead spending the bulk of our investments on member benefits from education and events to communications and government relations. You can find a more detailed breakdown of what the Association provided in the full 2024 report, laid out on pages 8-9 of this issue. We’ll also have printed copies available at many of our in-person events throughout the rest of the year, including our Regional Meetings this fall. DON’T MISS OUT! 1 FLD Leadership Conference July 9-10 Emerging leaders build skills and strengthen networks at this Future Leadership Division event. 2 Annual Convention Sept. 7-9 Indiana bank leaders convene, connect and conduct IBA business in scenic French Lick. 3 IBA Annual Washington Trip Oct. 5-7 Join the chorus and make your voice heard on industry issues at our nation’s capital. Amber R. Van Til President and CEO Indiana Bankers Association AVanTil@indiana.bank If the Association can ever be an added resource to you, reach out to anyone on staff. I look forward to this time next year when we’re celebrating an incredible 2025. IBA Income IBA Expenses 6 HOOSIERBANKER
B Chairman’s REPORT BY MATTHEW W. HOWREY, INDIANA BANKERS ASSOCIATION By the time you read this, our Government Relations team will be taking a much-deserved rest after another great Session at the Statehouse, fighting for Indiana bankers to give us the best regulatory environment possible in which to serve our communities. As they would tell you, though, being out of Session isn’t really an off-season so much as a time to shift tactics. Much of the groundwork for their time at the Statehouse is paved between legislative sessions. As constituents, you could arguably have an even greater impact on the legislative process outside of session when your lawmakers aren’t facing hard deadlines on the bills they’re considering. It’s easier for them to find the time to sit down and have longer-form conversations and really dig into the topics that either were tackled in the most recent session or the ones we know are likely to come up in the next session. This face-to-face interaction is why the tagline for our PAC is Advocacy in Action – we want to facilitate as many opportunities as possible for our members to have direct interaction with your lawmakers and elected officials and truly be the voice of community banking in this state. Nothing impacts legislators and regulators like the in-person, real-life stories from bankers across the state explaining how the laws and rules they pass impact your ability to serve your community. If you want to get more involved but aren’t sure how, reach out to Dax and Ross, and they can give you some ideas. An easy way would be to register for the IBA’s Annual Washington Trip. This year’s is set for Oct. 5-7. We ask for bankers to cover their own travel and hotel costs, but the IBA doesn’t charge a registration fee for this event and – with the support of our valued associate-member sponsors – will cover the cost of all group meals. Registration is now live. Scan the QR code to sign up your bank’s team. On behalf of all the IBA’s members, I want to wish congratulations to the IBA Government Relations Team for another session of incredible work at the Statehouse. Dax and Ross will have a full recap in the July/August issue of Hoosier Banker. I also want to thank the rest of the IBA staff for an incredible year last year, as you’ll see detailed in our 2024 Member Benefits Report on pages 8-9, and thank you to all our members for your continued engagement and support. Matt Matthew W. Howrey Chairman Indiana Bankers Association President and CEO North Salem State Bank Matt has served as president and CEO of North Salem State Bank and its holding company, North Salem State Bancorporation, since 2010. Prior to joining the bank in 2008 as chief financial officer, he served as a bank examiner for the Indiana Department of Financial Institutions, reaching the level of senior financial examiner. DIGITAL EXTRAS Use the QR code to read every article in this issue, plus these digital-only stories! 1 AI as a Game Changer Using your AI strategy to aim for bold, audacious goals instead of incremental efficiency gains. 2 10-Year Rule The SECURE Act and SECURE 2.0 made significant changes to IRA and retirement plan rules, including payout options. 3 On-Us Checks These carry different risks than transit checks, creating distinct responsibilities. MAY/JUNE 2025 7
IBA 0 200 400 600 800 1000 1200 $0K $50K $100K $150K $200K $250K $300K $350K $400K $450K $500K BANKPAC 200% CLUB 8 HOOSIERBANKER
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2025 IBA EDUCATION CALENDAR EDUCATION CALENDAR See all education opportunities at indiana.bank/calendar. 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 Leaders 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 Professional Development/ Education/Training Forum July 18: IBA Center *NEW* Fraud Forum July 22: IBA Center Loan Operations Manager Forum July 24: IBA Center Supervisory Bootcamp July 29-30: IBA Center Frontline Branch Series – Part 3 July 30: Virtual Risk Management Forum July 31: IBA Center AUGUST Community Bankers for Compliance Aug. 5: IBA Center & Virtual Bank Directors Symposium Aug. 7: Virtual Retail Management Series – Part 3: Serving with Excellence and Growing the Bank Aug. 12: IBA Center Emerging Leaders Digital Program – Part 3: Time Management Aug. 12: Virtual Call Report Preparation Aug. 12-13: IBA Center Fraud Academy (in partnership with the Kentucky Bankers Association) Aug. 12-14: Hyatt Regency Downtown, Lexington, KY Essentials of Banking – Part 2 Aug. 14: Virtual Treasury Management Forum Aug. 19: IBA Center Consumer Lending School Aug. 19-20: IBA Center Human Resources Directors Forum Aug. 21: IBA Center BSA/AML Compliance School Aug. 26-27: IBA Center Frontline Branch Series – Part 4 Aug. 27: Virtual *NEW* Chief Credit Officer Forum Aug. 28: IBA Center SEPTEMBER IBA Annual Convention Sept. 7-9: French Lick Springs Resort Advanced Agricultural Banking Conference Sept. 10-11: Doubletree by Hilton, Lafayette Senior Retail Banking Officer Forum Sept. 11: IBA Center Emerging Leaders Digital Program – Part 4: Communications and Conflict Sept. 16: Virtual Mortgage Lending School Sept. 16-18: IBA Center 10 HOOSIERBANKER
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I Jim RYAN HOMETOWN HEART COVER STORY It’s hard to imagine James “Jim” Ryan III may have seen himself as one day becoming the chairman and CEO of a nearly $70 billion regional bank when he started his first job as a dishwasher at a 1950s and 60s-themed restaurant in Michigan, singing and performing the “Hand Jive” periodically throughout the night for customers (an experience he still remembers vividly). That job, though, reinforced what his parents had already taught him about the value of hard work: Ultimately, it doesn’t matter what your job is; if you work hard, success typically follows. After time at a mix of community, regional and national financial institutions, Ryan joined Old National Bank, Evansville, in 2000 as senior vice president, treasurer. He worked his way up through several key positions before being named CEO in 2019. Ryan has used his position to invest in his community, his employees through innovative programs like the bank’s CEO Council,1 and the next generation of bankers overall. Hoosier Banker recently asked him about his experiences, his dedication to developing the next generation of the workforce, keeping a community mindset while managing a Top 40 financial institution2 and more. 12 HOOSIERBANKER
What attracted you to banking as a career? As a finance major at Grand Valley State University, my finance professor asked me if I was interested in a well-paid internship at a bank, which led to an internship at Grand Rapids, Michigan-based Old Kent Bank. Old Kent Bank later became part of Fifth Third. From the beginning, I loved being part of an industry that helps people achieve their dreams. Once I got that initial taste of being a banker, I never considered doing anything else. I have worked in banking continuously since my junior year in college. What do you enjoy most about banking? The aspects I enjoy today are the same things that drew me to a career in banking three decades ago. I truly value the ability to help people reach their financial goals and achieve their dreams. It’s gratifying whenever you can play a role – however large or small – in helping someone else succeed. I also love leading an organization that is committed to strengthening the communities we serve. Building strong, sustainable communities is not only the right thing to do but also strengthens Old National. I’m also grateful to be part of an organization with a long history of fostering the growth and development of its team members. When you identify emerging leaders and empower them with the right tools and resources, you will see them blossom. Tell us about a pivotal moment in your career. Two things come to mind: First, when I was still early in my career with Old National, we entered the Michiana market through a partnership with St. Joseph Capital, headquartered in Mishawaka, Indiana. At the time, my family and I were living in Evansville, and I volunteered to relocate to South Bend as a market leader to ensure that we hit the ground running and find success right away. I spent my entire career working at headquarters, mostly in finance roles, so this opportunity and experience was an eye-opener about different parts of banking away from HQ. Another pivotal moment that comes to mind is Old National’s transformational partnership with Chicago-based First Midwest Bank in 2022.3 Bringing together two successful banks of roughly equal size is definitely not without risk, but we also knew a huge reward was waiting when we pulled it off. I don’t think it’s an exaggeration to say we knocked it out of the park. Today, as a direct result of this partnership, Old National is objectively a stronger bank with an even stronger leadership team and a more effective board of directors. What ties these two examples together is that both require the willingness to take a chance. I’ve said it many times, but good things happen when you have faith in yourself and your team and aren’t afraid to dream big. MAY/JUNE 2025 13
Bankers are known for being risk averse. What is the biggest professional risk you’ve taken that you’re most proud of? The FMB partnership mentioned previously qualifies as the professional risk I’m most proud of. Taking a historically conservative southern Indiana bank and entering into a partnership that would make Chicagoland our largest market surprised many within our industry. And as I mentioned earlier, partnerships of that size and scope come with inherent risks. What has made the partnership work so well is that both organizations had a passion for serving clients, strengthening communities and developing team members. Old National inked a deal to become the official bank of the Big Ten Conference in 2023. What’s your favorite sport to watch? Did you play any in school? I wrestled and played football when I was young. I don’t watch many sports on television today, but I gravitate toward professional golf and tennis when I find time to watch. My wife, Tricia, and I also enjoy playing tennis and pickleball. Old National is the largest bank headquartered in Indiana and one of the 40 largest in the nation. How do you keep a community focus while continuing to expand in size and footprint? It begins with staying true to the vision and culture that have served Old National well since its founding in 1834. We recognize that our success is directly tied to the communities we serve, and we have team members who are deeply rooted in and committed to their communities. I also firmly believe that being a bank founded in and still headquartered in Evansville gives us a smaller-town perspective even as we are poised to become a $70 billion bank soon. We still operate with what I like to call an “Evansville State of Mind,” in which we take the time to build strong, collaborative relationships with our clients and community partners. Every team member and client is essential to our success and greatly matters. This approach works well throughout our footprint – not just in southern Indiana. I will also add that regularly traveling around the Old National footprint and connecting with our team members keeps me centered and reminds me of the importance of staying connected and the power of community. Tell us about your CEO Council. Where did the idea come from, and how has it benefited your bank and employees? I was focused on succession planning from the very first day of becoming CEO. I realized we needed to cultivate more diverse talent within our industry and at Old National. In 2021, we identified a diverse group of already successful and high-potential emerging leaders to work on projects that support the sustainability of underrepresented clients and communities and accelerate their growth and development. Our second CEO Council cohort graduated in 2024, and a third group began earlier this year. What I appreciate most about our CEO Council is the genuine reciprocal relationship it fosters. Our council members bring unique insights and perspectives that strengthen our executive leadership team and the company. In return, we can offer them unique leadership development opportunities that accelerate their growth within the organization. Between the CEO Council, participating in the IBA’s new statewide apprenticeship program and being named to the board of the Orr Fellowship this year, you’ve demonstrated dedication to cultivating the next generation of the workforce. What made that an area where you wanted to focus so much of your attention? Bob Jones, my predecessor at Old National and my mentor, has always said that banks like Old National have a moral obligation to help grow and develop the communities they serve, including cultivating the workforce of tomorrow. Not only is supporting future leaders the right thing to do, but it’s also something I genuinely enjoy. I am thrilled and honored to have recently joined the Orr Fellowship Board of Directors. One of my daughters was an Orr Fellow, so I witnessed firsthand the significant impact this program can have on the next generation of Hoosier leaders. We recently introduced the Orr Fellowship in the Evansville region, and I am excited about the positive impact we can make here in southwest Indiana. The Indiana Bankers Association’s new apprenticeship program is another example of how banks can support their communities by sponsoring these apprenticeships. This initiative represents a transformative opportunity to engage COVER STORY CONT. 14 HOOSIERBANKER
young people in their education and careers, ultimately helping to develop future talent for the banking industry. What do you look for when deciding which organizations to volunteer your time and expertise with? What advice would you give to a young banker looking to start getting involved with board work and other volunteer experiences? It’s important to follow your heart and concentrate on topics that genuinely resonate with you. We live in a busy, fast-paced world and have limited time and resources to allocate effectively. Additionally, it’s crucial to consider where and how you can make the greatest impact, as this can guide your choices moving forward. Please describe the impact of an influential person in your life. My parents were instrumental in shaping me into who I am today. In addition to instilling in me the value of hard work and giving back, they set a personal example – every day – of what genuine compassion and selfless leadership can look like. Bob Jones has also been a highly influential person in my life. Not only did he help me more fully appreciate the importance of strengthening and supporting the community, but he trusted me to play a lead role in fundamentally reshaping our franchise. We wouldn’t be the bank we are today, and I wouldn’t be the CEO I am today if Bob hadn’t instilled that trust and confidence in me. Tell us about your home life/hobbies/time away from the office. I’ve always loved the water, and Tricia and I enjoy boating and spending time on the beach whenever possible. It’s even more special when our two adult daughters can join us. Tricia and I also enjoy playing tennis and pickleball. My wife is an avid tennis player and routinely beats me, but I even the score on the pickleball court. We love getting some exercise and spending time with family and friends. What is one of your hidden talents? I’m not sure if it qualifies as a hidden talent, but I’ve always had a knack for seeing opportunities that others may not be able to visualize. Throughout my career, I’ve had a gift for recognizing a path forward that may initially seem unconventional, but which ultimately bears fruit. How do you define success? I have always viewed success as a team sport – a collective endeavor – and I am absolutely convinced that there is no such thing as individual success. When the team wins, we all win as members of that team. 1 Old National Bank’s CEO Council is a 12-month program that invites roughly a dozen mid-level employees to make an impact on the organization through tackling unique business opportunities that may normally be considered above their position, all under the direct guidance of bank c-suite executives, including CEO Jim Ryan. This gives them a chance to gain and demonstrate executive-level skills, accelerating their career advancement and allowing the bank to cultivate its next generation of seniorlevel talent. https://www.oldnational.com/ resources/insights/old-national-bankrecognizes-outgoing-incoming-ceocouncil-members/ 2 “Insured U.S.-chartered commercial banks that have consolidated assets of $300 million or more, ranked by consolidated assets.” Federal Reserve, as of Dec. 31, 2024. https://www.federalreserve.gov/releases/ lbr/current/ 3 “Old National and First Midwest announce merger to create a premier Midwestern bank.” Old National Bank, June 1, 2021. https://www.businesswire.com/news/ home/20210601005603/en/Old-National-andFirst-Midwest-Announce-Merger-to-Create-aPremier-Midwestern-Bank MAY/JUNE 2025 15
QQuestion: My bank plans to introduce a new home equity line of credit that allows all closing costs to be waived at closing provided the customer maintains the loan for three years, but if the customer elects to pay the loan off early, they will have to repay the closing costs. Does Indiana law allow us to contract for “conditionally waived” closing costs? Answer: It depends. If the home equity loan (HELOC) is a first-lien mortgage, Indiana law does not limit or prohibit the conditional waiving of closing costs. In fact, because first-lien mortgages are not included within the definition of a “Consumer Loan” under the Indiana Uniform Consumer Credit Code,1 they are relatively unregulated with respect to rates and fees under Indiana law. However, if the HELOC is a second-lien mortgage, provided you accurately describe the fee in your note and disclosures as “conditionally waived closing costs,” the IUCCC allows a bank to charge the following closing costs and exclude them from the calculation of the maximum permissible finance charge, provided they are bona fide, reasonable in amount and not for the purpose of circumvention or evasion of the code: 1. fees for title examination, abstract of title, title insurance, property surveys or similar purposes; 2. fees for preparing deeds; mortgages; and reconveyance, settlement and similar documents; 3. notary and credit report fees; 4. amounts required to be paid into escrow or trustee accounts if the amounts would not otherwise be included in the loan finance charge; and 5. appraisal fees.2 If any amount of the closing costs is not considered bona fide, reasonable in amount or is for the purpose of circumvention of the code, then it cannot be considered a permissible Additional Charge and therefore must be included in the finance charge calculation for purposes of IUCCC finance charge limits. Further, if you don’t identify these fees correctly as conditionally waived closing costs in your note and your disclosures, you run the risk that they will be considered a prepayment penalty under the IUCCC and subject to the 2% prepayment penalty cap. Ind. Code § 24-4.5-3-209 provides, in part: “With respect to a consumer loan that is primarily secured by an interest in land, a lender may contract for a penalty for prepayment of the loan in full, not to exceed two percent (2%) of any amount prepaid within sixty (60) days of the date of the prepayment in full, after deducting all refunds and rebates as of the date of the prepayment. However, the penalty may not be imposed: (a) if the loan is refinanced or consolidated with the same creditor; (b) for prepayment by proceeds of any insurance or acceleration after default; or (c) after three (3) years from the contract date … For purposes of this section, the collection of the amount of any conditionally waived closing costs (as allowed under section 202(d) of this chapter) by a creditor, as stipulated in the loan agreement, at the time of prepayment in full does not constitute a prepayment penalty and is not subject to the limitations set forth in this subsection.” In summary, while your bank can offer this option to customers, you will need to ensure your note, disclosures and loan policies are updated to ensure compliance with Indiana law. This information is provided for general education purposes and is not intended to be legal advice. Please consult legal counsel for specific guidance as to how this information applies to your institution’s circumstances or situation. 1 Ind. Code § 24-4.5-3-105 2 Ind. Code § 24-4.5-3-202(1)(d) COMPLIANCE CONNECTION HELOC CLOSING COSTS WAIVER BY BRETT J. ASHTON, KRIEG DEVAULT LLP 16 HOOSIERBANKER
TAKING IT EASY Kerry E. Neff, chairman and CEO of Boonville Federal Savings Bank, retired from his duties as CEO effective April 1. He had been with the bank since 1992 and spent 50 years in banking overall. Outside the bank, Neff volunteered with numerous municipal and religious boards, including Gideons International. He is a member of the IBA’s 40 Year Club. Neff earned his MBA from the University of Southern Indiana. He remains on the bank’s board after retirement from his daily duties. Kenneth L. Schnaus, vice president and business banker, retired from his duties at Springs Valley Bank & Trust Company, Jasper, effective April 4 after 13 years with the company and more than 40 in the banking industry. He serves on the boards of the Dubois County Airport Authority and Ireland Utilities Inc., serves on the Revolving Loan Fund committees for Dubois Strong and the City of Huntingburg, and is an active member of the Jasper Lions Club. Schnaus is a member of the IBA 40 Year Club and graduated from ITT Business College. Brett Ashton Partner Krieg DeVault LLP BAshton@KDLegal.com Brett is chair of Krieg DeVault’s Financial Institutions Practice. He counsels a wide array of financial institutions on complex bank acquisitions, litigation defense and avoidance strategies, strategic planning, new product development, negotiation and defense of regulatory enforcement actions, and general regulatory compliance issues. Krieg DeVault LLP is a Diamond Associate Member of the Indiana Bankers Association. MAY/JUNE 2025 17
C Bank Trends: CAN MARGIN IMPROVEMENT CONTINUE IN 2025? BY DILLION WIEDEMANN, THE BAKER GROUP Community banks saw impressive growth in net interest margin throughout 2024. U.S. banks with less than $10 billion in assets (around 4,200 institutions) improved net interest margins from a post-pandemic low of 3.34 at year-end 2023 to 3.52 at year-end 2024. The prolonged period of higher rates allowed community banks to reprice assets at higher yields, with the average institution’s yield on earning assets increasing by 35bps through the first three quarters of 2024. During that same period, the rate of increase on cost of funds slowed dramatically from 2023. The average institution saw a smaller increase of only 14bps on their liabilities. Aided by 100bp of rate cuts from the Fed at the end of 2024, community banks used a slightly different playbook in Q4. The increase in margin in Q4 was driven more by the decrease in liability costs than it was by the increase in asset yields. Interestingly, asset yields peaked in the third quarter and declined slightly in Q4, likely driven by loan yields tied to prime. Reductions in cost of funds were able to outpace that decline, ending in the same result: improved net interest margins. Where Do We Go From Here? There has been a lot of change in market sentiment in the first half of the year. With reduced government spending, softness in the labor market and concerns about the overall impact of tariffs, the market is pricing in an increased probability of a recession. In mid-February, the market expected only one rate cut from the Fed with the first cut not being fully priced in until December. In the first week of March, the market projected three rate cuts from the Fed with the first cut coming in June. The possibility of additional rate cuts will likely be welcome news on the liability side of the balance sheet as it should provide cover for community banks to continue reducing their cost of funds. The real question will be by how much? Over the last couple of easing cycles, betas on overall cost of funds for community banks were between 20-29%. Stated more plainly, for every 100bps of rate cuts from the Fed, the average community bank was able to reduce its overall cost of funds by 20-29bps. Depending on the liability mix and local competition, your institution may have a different experience. However, there appears to be an opportunity for continued margin expansion by reducing liability costs in 2025 (given we can get the Fed to cooperate). On the asset side of the balance sheet, loan yields for the industry appear to have peaked as loan rates tied to prime have come down from 2024 highs. There are plenty of institutions still repricing pandemic-era loans higher, but there may be less low-hanging fruit from a repricing standpoint than there has been the last couple of years, as the average loan yield for the industry sits at a healthy 6.53%. The average bank’s investment yield is sitting at 3.02% as of the end of 2024. These assets present the best opportunity on the balance sheet for repricing and to continue margin expansion through 2025. By reinvesting at current market yields, banks can pick up +150bps going back into bonds and potentially much more by reinvesting into loans. The catch is that unrealized losses have taken many of these bonds out of play. There are, however, a couple of strategies banks have been using to reprice these lower-yielding bonds to take advantage of high current market yields. These are (1) bond swaps and (2) pre-funding: 1. A bond swap works by selling lower-yielding, currently owned bonds and replacing them with higher-yielding bonds. There may be a realized loss on the sell-side bonds, but if the pickup in income is enough, the loss can be recovered in a short period of time. 2. A pre-funding strategy works by borrowing against future maturities (usually short term) to buy bonds at current yields. Once the currently owned, low-yielding bonds mature, the DIRECTORS & SENIOR MANAGEMENT 18 HOOSIERBANKER
principal can be used to pay back the borrowings and the higher-yielding bonds remain on the books. As market volatility has increased in recent weeks, we’ve seen a steepening of the yield curve from one-year forward. Bonds with short maturities between one and three years may be good candidates to consider for these types of strategies. With the market pricing in higher odds of a recession, there is potential that we end up in a lower rate environment sometime in the future. These bonds with one- to three-year maturities would likely have the most reinvestment risk in that scenario. It’s important to note that both scenarios may have a cost to the bank, so if you’re considering either of these strategies, the right choice could come down to how the bank prefers to “pay” for it. For a bond swap, selling bonds at a loss can be seen as the equivalent of paying interest up-front, whereas the pre-funding strategy will increase interest expense, which is paid over time. The benefits may not be immediate for either strategy, but they do allow banks to continue to reprice some of their lowest-yielding assets while avoiding reinvestment risk if we end up in a lower rate environment in the future. By identifying repricing opportunities within the bond portfolio, banks may be able to further increase the yield on earning assets. Combine this with a little help from the Fed and the industry may be able to continue margin expansion in 2025. Dillion Wiedemann Senior Vice President, Financial Strategies Group The Baker Group Dillion works with clients in a broad range of areas, including investment portfolio management, education, swap strategies and interest rate risk management. A regular speaker at the company’s various educational seminars across the country, Dillion holds a bachelor’s degree from the University of Central Oklahoma. The Baker Group is a Preferred Service Provider of the Indiana Bankers Association and an IBA Diamond Associate Member. MAY/JUNE 2025 19 Get the power of a full IT department—without the cost of expanding in-house. Our experts become an extension of your team, providing 24/7 U.S.-based support, proactive infrastructure management, and comprehensive cybersecurity to enhance your IT performance. EndeavorIT.com 833-348-0007 solutions@endeavorit.com 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
S Your ADVOCACY IMPACT BY REBECA ROMERO RAINEY, INDEPENDENT COMMUNITY BANKERS OF AMERICA Sometimes in life, we’re fortunate enough to see our labor yield results, and that’s precisely what’s been happening with our advocacy efforts. The first quarter of 2025 has boasted great successes for community banking, including: We saw congressional efforts to overturn the Consumer Financial Protection Bureau’s 1071 and overdraft rules. ICBA-supported legislation introduced by House Committee on Small Business Chairman Roger Williams, R-Texas, would repeal the statute that underlies the CFPB’s Section 1071 rule, while Senate Banking Committee Chairman Tim Scott, R-S.C., and House Financial Services Committee Chairman French Hill, R-Ark., have introduced ICBA-backed Congressional Review Act resolutions to overturn the CFPB’s overdraft rule. The first House Financial Services Committee hearing of the year focused solely on community banking. At the “Make Community Banking Great Again” hearing, I was able to testify and highlight policy proposals from our “Repair, Reform and Thrive” advocacy plan. The first House Committee on Small Business hearing of the year focused on small business lending. At the “Hope on the Horizon” hearing, ICBA Chairman-elect Alice Frazier – president and CEO of Bank of Charles Town, in Charles Town, West Virginia – encouraged policymakers to pass Chairman Williams’ 1071 Repeal to Protect Small Business Lending Act, preserve and expand a pro-growth tax environment by extending Section 199A of the Tax Cuts and Jobs Act for pass-through business, and more. Moments like these affirm the importance of community banking to our nation’s economy and in the halls of Congress. We need to keep this momentum, driving forward the issues of right-sized regulation, a level regulatory playing field and flexibility to support our communities. Now more than ever, our successes serve as a call to action: Every phone call we make to our members of Congress, every trip to Capitol Hill and every letter we send falls on open ears and has an impact. We must maintain continued and persistent engagement to ensure our issues remain a priority in today’s legislative landscape. When we come together, it demonstrates to members of Congress just how serious we are about advancing community banking for the betterment of their districts and our communities, and we need your voice. Hard work is what it takes to achieve results. And with more hard work on our part, the rest of the year will just get better for community banking. F E ATUR E Rebeca Romero Rainey President and CEO Independent Community Bankers of America Rebeca.RomeroRainey@ICBA.org Rebeca Romero Rainey is one of the nation’s foremost advocates of the community banking industry, with a focus on regulatory reform for our country’s nearly 5,000 community banks. A third-generation community banker, she is the former chairman and CEO of Centinel Bank of Taos, New Mexico. 20 HOOSIERBANKER
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A Celebrating a LEGACY OF COLLABORATION BY ROB NICHOLS, AMERICAN BANKERS ASSOCIATION At the beginning of this year, my travels on behalf of ABA took me to southern California at a time when deadly wildfires were still raging through many neighborhoods in Los Angeles and the surrounding area. As I sat there in that room full of bankers, friends and colleagues, the sentiment I felt was unmistakable: that when the smoke cleared and the dust settled, bankers would be there, ready to serve their communities and support the recovery – just as they have done throughout American history. As I reflect on ABA’s milestone 150th anniversary in 2025, and as I look at where we are as a nation today, I am reminded that bankers have a long and proud tradition of coming together during hard times to work together and find solutions. That certainly was true of ABA’s founding; in 1873, the United States was facing a financial panic and one of the worst recessions in history. Unemployment and bankruptcies were surging, and 300 banks failed. It was on the heels of this unrest that two young bankers – inspired by the women’s suffrage movement and the power of collective action – worked to convene the first-ever meeting of the American Bankers Association in July 1875 in Saratoga Springs, New York. Since then, ABA has provided a forum for bankers to meet and develop solutions together that make the banking sector stronger, safer and more accessible. Just a few examples: We helped mobilize bankers to safeguard bank funds during a string of bank robberies in the 1890s; we pioneered the routing number system that made it easier for customers to move money; and we encouraged bank lending throughout World War II to help finance military operations through bank purchases of government bonds. In more recent times, ABA has supported banks’ role as economic first responders in the wake of major natural disasters (like the recent floods in Kentucky) and a global pandemic, and we have helped bolster their mission of making sure that the American dream is achievable for all Americans, particularly those in historically underserved communities. As we continue to face a climate of unprecedented challenges, from a deeply divided political landscape to heightened economic uncertainty, our nation’s banks remain strong, resilient and ready to respond to whatever comes our way. ABA is standing ready to aid them in their important work. Despite the many things today that threaten to divide us, I believe – much like our founders did 150 years ago – that we are stronger together. And I hope that in the months and years to come, you’ll continue to be an active part of this organization. Continue sharing your voices, your perspectives and your ideas as we work to shape the future of banking policy in this country over the next 150 years. Together, we can – and will – achieve more. F E ATUR E Robert S. Nichols President and CEO American Bankers Association RNichols@ABA.com Rob Nichols joined the American Bankers Association in 2015 after 10 years at the helm of the Financial Services Forum, a nonpartisan economic policy and advocacy organization. He also served in the George W. Bush administration as assistant secretary for public affairs at the Treasury Department. 22 HOOSIERBANKER
BANKING ON COMMUNITY Centier Bank, Merrillville, donated more than $54,000 to the United Way of Northwest Indiana. The funds were raised through the hard work and generosity of the bank’s employees across the state, matched by a corporate gift, and will be used to support the organization’s flagship programs serving the 12 counties in the bank’s footprint. The bank gave the organization $65,000 in 2024, making for a total two-year donation of more than $100,000. Chris White, CEO of the United Way of Northwest Indiana (center) and his colleague Shannon Buck (second from right) accept a $54,000 donation from Centier Bank, Merrillville, on Jan. 13, at the bank’s corporate office just months before its 130th anniversary. Representing the bank were (from left) Dakita L. Jones, VP, director of community relations; Mike Schrage, CEO; Tim Warner, VP-Business Banking; Ashley Stephan, community relations team lead; and Anthony Contrucci, president of the bank’s holding company, First Bancshares Inc. First Bank of Berne donated $500 to the Adams Central Football Booster Club in conjunction with AC’s state champion football coach Michael Mosser providing a motivational speech to the bank’s employees as part of its Presidents’ Day training and strategy session. Mosser offered insights on leadership, teamwork and success, emphasizing accountability, discipline and shared goals. Adams Central Football Coach Michael Mosser (left) accepts a check on Monday, Feb. 17, for the team’s booster club from Steve Bailey, an employee of First Bank of Berne, treasurer of the booster club and grandfather of AC quarterback Jamison Roach. First Financial Bank, Cincinnati, and its employees donated $191,083 and 1,413 volunteer hours to organizations in the Indianapolis area in 2024, including $55,000 to Exodus Refugee Immigration and $11,000 each to Indianapolis Neighborhood Housing Partnership and Community Action of Greater Indianapolis. Across its entire four-state footprint, the bank and its employees donated more than $4.6 million and 14,871 volunteer hours. The bank has a commitment of $2.4 billion in lending and investments to low- and moderate-income clients and census tracts from 2024-28. That includes a goal of $18 million in philanthropy, with an emphasis on supporting organizations that create and preserve affordable housing and workforce development, plus those that provide housing counseling and promote financial and economic inclusion. North Salem State Bank donated more than 17,000 items to 17 local food pantries serving Hendricks, Putnam and Boone counties. The bank also donated more than $25,000 in cash, matching customer, employee and community donations. Northwest Bank, Warren, Pennsylvania, donated $1,000 to the Legacy of Blessings Adoption Foundation in March. The organization assists families in securing the necessary funding to overcome the initial financial burdens of adoption, ensuring that more children in Indiana can find loving and supportive homes. Peter Kauffman and Kate Kostetler of Northwest Bank; Robert Brannock of Northwest Bank and Legacy of Blessings’ board of directors; Phil Kuhn, Legacy of Blessings co-founder; and Devin Schultis, Northwest Bank. MAY/JUNE 2025 23
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