ISSUE 5 2024-25 Meet 2025-26 NBA Chair Mark Linville OFFICIAL PUBLICATION OF THE NEBRASKA BANKERS ASSOCIATION
233 S. 13th St., Ste. 700 Lincoln, NE 68508 Phone: (402) 474-1555 • Fax: (402) 474-2946 www.nebankers.org NBA BOARD OF DIRECTORS RICHARD BAIER President and CEO richard.baier@nebankers.org KARA HEIDEMAN Director of Communications and Marketing kara.heideman@nebankers.org NBA EDITORIAL STAFF MARK LINVILLE NBA Chair First State Bank, Randolph TRAVIS SEARS NBA Chair-Elect Union Bank & Trust Co., Lincoln BRAD KOEHN NBA Past Chair Midwest Bank, Lincoln KRISTY BARTAK Nebraska State Bank & Trust Co. Broken Bow NICK BAXTER FNBO Omaha KRYSTI CUNNINGHAM Security National Bank of Omaha Omaha CURTIS HEAPY Western Nebraska Bank Curtis ZAC HOLOCH Cornerstone Bank York JEFF KANGER First State Bank Nebraska Lincoln ZAC KARPF Platte Valley Bank Scottsbluff JOHN KOTOUC American National Bank Omaha KRISTEN MARSHALL-MASER Five Points Bank Grand Island JEREMY McHUGH Corn Growers State Bank Murdock AARON OTTEN Elkhorn Valley Bank & Trust Norfolk KEVIN POSTIER Henderson State Bank Henderson JAY PRESTIPINO First Interstate Bank Omaha LUKE RICKERTSEN Flatwater Bank Gothenburg BRIAN SCHWEIGER U.S. Bank, N.A. Lincoln RYNE SEAMAN Cattle Bank & Trust Seward RYAN STEFFENSMEIER First Community Bank Beemer KELLY TRAMBLY South Central State Bank Campbell NICK VRBA RVR Bank Fremont MICHAEL WHEELER Wells Fargo Bank, N.A. Omaha ANDREW WITT Dundee Bank Omaha 4 NEBRASKA BANKER
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EDITORIAL: Nebraska Banker seeks to provide news and information relevant to Nebraska and other news and information of direct interest to members of the Nebraska Bankers Association. Statement of fact and opinion are made on the responsibility of the authors alone and do not represent the opinion or endorsement of the NBA. Articles may be reproduced with written permission only. ADVERTISEMENTS: The publication of advertisements does not necessarily represent endorsement of those products or services by the NBA. The editor reserves the right to refuse any advertisement. SUBSCRIPTION: Subscription to the magazine, which began bimonthly publication in May 2006, is included in membership fees to the NBA. ©2025 The Nebraska Bankers Association (NBA) | The newsLINK Group LLC. All rights reserved. Nebraska Banker is published six times per year by The newsLINK Group LLC for NBA and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of NBA, its board of directors or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. Nebraska Banker is a collective work, and as such, some articles are submitted by authors who are independent of NBA. While a first-print policy is encouraged, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at (855) 747-4003. CONTENTS 12 26 8 MEET 2025-26 NBA CHAIR MARK LINVILLE Laurie Johnson, Communications & Marketing Assistant, Nebraska Bankers Association 12 WASHINGTON UPDATE CUTTING THROUGH THE NOISE — AND THE REGULATORY RED TAPE Rob Nichols, President and CEO, American Bankers Association 16 TECH TALK BUILDING A STRONG CYBERSECURITY CULTURE WITHIN YOUR ORGANIZATION Jon Waldman, President, SBS CyberSecurity 20 COUNSELOR’S CORNER NEBRASKA SUPREME COURT REJECTS EFFORT TO UNDERMINE THE ENFORCEABILITY OF PERSONAL GUARANTIES Henderson State Company v. Garrelts, 319 Neb. 485 (2025) Lindsay K. Lundholm, Partner, Baird Holm LLP 22 TECH TALK THE ELEPHANT IN THE LOBBY What Your Customers Aren’t Telling You Robb Rempel, Executive Vice President, Haberfeld 26 THE GROWING THREAT OF AI-DRIVEN FRAUD AND DEEPFAKES Matt Jones, Compliance Advisor, Compliance Hub 30 2025 EDUCATION CALENDAR 6 NEBRASKA BANKER
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Like many Nebraskans growing up in the 1980s, Mark Linville experienced the challenges in agriculture. Many people viewed bankers as the problem amid the farm crisis, even as banks were facing closures and mergers. Despite the economic turmoil, Linville saw the positive impact that a good banker had on the lives of local businesspeople, farmers and the economy as a whole. “My family has experienced both sides of this. So, I truly see how important it is to have a banker who’s a partner who views you as more than just a number. It’s a personal relationship, and that’s especially true when times are challenging,” Linville said. Linville’s early exposure to the impact of a community banker played a significant role in shaping his decision to enter the banking industry. Throughout his 35-year career, Linville has remained committed to helping his customers and community thrive. As the 2025-26 Nebraska Bankers Association chair, that dedication expands to the entire NBA membership. Meet 2025-26 NBA Chair Mark Linville Laurie Johnson, Communications & Marketing Assistant Nebraska Bankers Association Community Impact Linville values community involvement, whether it’s through the bank donating to a cause or volunteering in the community. One of the biggest impacts First State Bank has had on the Randolph community was the Downtown Betterment Revolving Loan Fund in 2011. The bank established a revolving loan fund used by local businesses to install new sidewalks, update infrastructure in downtown buildings and more. A committee of three community members and a banker determines where and how those funds are used. Additionally, the bank and others in the area contributed funds to convert part of the elementary school into a preschool and daycare in Randolph. As children age out of the preschool, they transition into the elementary school. The availability of childcare has attracted parents from other communities to Randolph. The school is growing as a direct result and does not need to consolidate. For a small school, that’s uncommon. Linville called the childcare availability a game-changer for both the school and the community. “Bankers are the cornerstone of their respective communities through volunteerism and leadership. I like the community involvement. You know, when there’s a community project, the bank is the first call. And I’m glad it is — we want to be a part of that. Not only are we expected to participate, but we want to participate. It’s a good part of the responsibility of being a banker and living in a small town,” Linville said. Linville understands the impact that his bank and other Nebraska banks have on the communities they serve. “We work in an incredible industry, one that serves as the heartbeat of our state. If you have a bank that’s engaged and investing in their local community, the community looks like it. Show me a thriving bank, and I’ll show you a thriving community,” Linville said. A Personal Touch As a small-town banker, Linville leads a team that is much smaller than at a larger bank, and everyone wears multiple hats to make sure all bases are covered. “My team does everything that the big banks do, on a smaller scale. And it’s very personal. Our customers know the people who make the decisions — we go to church with them, we go to school functions with them, and we stand in line at pancake feeds with them. We’re very nimble because the decisions are all made right here,” Linville said. Linville and his team appreciate their customers’ in-person visits. He said that although local customers can complete 8 NEBRASKA BANKER
most banking-related processes remotely, they prefer to come to the branch and visit with their banker. These connections provide the bank with direct accounts of the current economic climate and help the bankers address customers’ concerns of tight or, in some cases, negative profit margins. Linville said some consumers are also facing limited discretionary income, as well as challenges related to funding mortgages. Between the increasing housing prices and higher interest rates, becoming a homeowner is more difficult. However, Linville’s role as a banker allows him to help people find solid financial footing. “It’s exciting making a dream come true or giving people the opportunity to have the capital to follow a dream. I love getting young people started, whether it be in farming, starting a small business, purchasing a house or buying their first car — that is without a doubt one of my favorite things,” Linville said. Advocacy As the head of a community bank, Linville has seen the impact that federal legislation has on both banks and customers. Federal banking regulators have implemented what Linville calls “useless, expensive and often foolish overregulation.” Such regulations affect banks of all sizes from both urban and rural areas across Nebraska. Federal regulations requiring increasingly stiffer procedures and rules can make it trickier to find a balance between focusing on the customer and making sure all of the boxes are checked for the regulators, no matter the size of the bank. “I don’t need a regulation to know I need to take care of our community. If we weren’t doing community reinvestment, our bank wouldn’t exist. We wouldn’t survive if we weren’t adequately taking care of CRA. It’s obvious: either you are or you aren’t,” Linville said. In March, Linville was among over 40 Nebraska bankers who traveled to Washington, D.C., to meet with Nebraska’s congressional delegation and discuss banking policy and the role banks play in supporting communities and driving our state’s economy. While there, he highlighted the unnecessary burden and cost of stricter banking regulations. “Banking needs to be about serving our customers and generating profit for our shareholders, not about being a political ping pong ball for politicians. Within the banking industry, there are some things that banks may not have in common with one another, but there are more similarities than differences, and we’re not necessarily on opposite sides,” Linville said. Engagement from across the industry is essential to shaping policy and pushing back against misguided regulation. A recent example is the Access to Credit for our Rural Economy (ACRE) Act, a modified version of which was included in the budget reconciliation legislation recently signed by President Trump. The banking industry had long advocated for the bill. “The ACRE Act is the most critical piece of legislation that I’ve seen in years. It’s huge for our community banks, our farmers and our ranchers because those savings will be passed along to them,” Linville said. He also stressed the importance of bankers becoming personally involved in government relations efforts. The NBA has a longstanding commitment to advocating for Nebraska banks. Bankers can participate in such efforts through the NBA Legislative Advocate Program or the NBA Government Relations Committee, or by donating to the NBA BankPAC to help support pro-business, pro-banking candidates and legislation at both the state and federal levels. “There’s a reason the NBA exists, and a lot of good things can happen from bankers having one voice. And the NBA can be that voice,” Linville said. Linville encourages Nebraska bankers to use their voice as political power. He said the most important thing, perhaps more so than visiting Washington, D.C., is reaching out to your federal representative or senator on a personal level. NBA Chair Mark Linville and his wife, Lisa, at the 2025 NBA Annual Convention NBA Chair Mark Linville (left), NBA Past Chair Brad Koehn (back) and NBA President & CEO Richard Baier (right) at Husker Harvest Days in 2024 9 NEBRASKA BANKER
“They don’t remember a copy/paste from a talking point. But they remember a personal written letter or a personal phone call,” Linville said. Leadership and Giving Back Banking is all about relationships. Linville cherishes the connections he has made since first becoming involved with an NBA committee 20 years ago. He recalled feeling welcomed and valued by more experienced bankers, which helped him grow as a banker. “I remember being a young banker at my first NBA committee meeting and thinking, ‘Man, there are a lot of seasoned, well-respected, bright bankers here.’ And they cared what I thought. I thoroughly enjoyed my experience. From that moment on, I knew I wanted to stay involved. I have so much respect for the bankers that I’ve worked with over the years,” Linville said. Serving on numerous NBA committees during the past two decades has taught Linville new perspectives, shown him how others in the industry were tackling problems and helped him build relationships with peers in the banking world. Mentorships have always been important to Linville. Through his early banking career, he looked for and found mentors within the industry. As young bankers enter the industry, he urges experienced bankers to become mentors and encourages young bankers to seek out mentors within their bank. Linville said it’s a mutual relationship — mentors need the mentees and vice versa — to be able to bounce ideas off of and learn from one another. Looking Forward As the banking industry evolves, Linville is optimistic about its future. He has seen a change from a banking career being viewed as “stuffy” to a renewed sense of excitement about career opportunities. He said there is room for a variety of skills, from HR to compliance, IT to computer science, lending to bookkeeping, tellers and more. New technologies and opportunities in banking can also lead to new threats from fraudsters. One of Linville’s goals as NBA chair is to address the increasing prevalence and variety of scams and fraud. One way is by being able to quickly share information with members across the state when fraud and other issues arise. He also wants the NBA to be responsive and have open lines of communication among its members. As part of this initiative, the NBA holds monthly “Membership Updates” via Zoom to keep members informed of state and federal legislation affecting banks, upcoming NBA events and any other banking-related issues that arise across Nebraska. The NBA is a critical partner to banks of all sizes across the state. Linville fully understands that the NBA exists to serve its members, with bankers representing one another through volunteer leadership roles within the association. “I care deeply about the NBA, that it’s vibrant, growing and serving our members well into the future. There’s a need for the NBA — that’s why I chose to volunteer my time to serve. It’s had such a positive impact on me and our bank. I can’t imagine not having it. So, it’s important that it grows and thrives and, most importantly, is member-driven. That’s what it’s all about,” Linville said. More About Mark Mark Linville graduated from the University of Nebraska at Kearney with a bachelor’s degree in comprehensive business with a finance emphasis. He has also completed the Graduate School of Banking at Colorado and was a member of the Nebraska LEAD Program Class 23. Linville has taken an active role within the banking industry, serving on the NBA Board of Directors, Executive Committee, Government Relations Committee, BankPAC Committee, Education Advisory Committee and Voluntary Employee Benefits Association Board of Trustees. He has also been a member of the Community Bankers and Government Relations Councils with the American Bankers Association. A native of Broken Bow, Nebraska, Linville began his career at Bank Central and Central Insurance Agency in Beloit, Kansas. In 1992, he joined First State Bank and First State Insurance Agency in Randolph, Nebraska. Ten years later, he was promoted to president and CEO, a role he still holds today. He is also the founder and owner of a wealth management firm, 1st Financial Services, where he is a Series 7 investment advisor. His service extends to community and local leadership roles over the years. Linville has served as president of the Randolph Area Community Club, director of the Randolph Area Foundation and chairman of the Randolph Community Fair. Additionally, he has been a TeamMates mentor at Randolph Public School and a volunteer EMT with the Randolph Volunteer Fire and Rescue Department. Linville also volunteers with SYC of Northern Nebraska, an organization that helps youths with special needs, as well as Man 2 Man Prison Ministries and Merritt Youth Retreat for high-school-age young people. Outside of banking, Linville enjoys spending time with his family, camping, hunting and fishing. 10 NEBRASKA BANKER
IRON: Iron is an important part of blood cell production. This test is used to diagnose and evaluate anemia. TOTAL CHOLESTEROL: Cholesterol is blood fat. This test can be used as a screening tool for the development of coronary artery disease. HDL CHOLESTEROL: High density lipoprotein (or ‘good cholesterol’) is used to estimate risk of coronary artery disease. TRIGLYCERIDES: Triglycerides are a form of neutral fat in the blood. Increased levels indicate increased risk of heart disease. TOTAL CHOLESTEROL/HDL RATIO: The C/H ratio is used to estimate risk of developing coronary artery disease. LDL CHOLESTEROL: Low density lipoprotein (or ‘bad cholesterol’) is used to estimate risk of coronary artery disease. TOTAL BILIRUBIN: Bilirubin is a waste product of hemoglobin breakdown. The test is used to detect liver and blood disorders. ALKALINE PHOSPHATASE: Alkaline phosphatase is an enzyme used to determine certain types of bone, liver, and bile duct diseases. ALT (GPT): Alanine aminotransferase is an enzyme used to assess liver damage. AST (GOT): Aspartate aminotransferase is an enzyme found in many tissues. It is an indicator of tissue damage, mainly in the liver, but also in the muscles, heart, and lungs. LDH: Lactate dehydrogenase is an enzyme that indicates cell damage. It is useful in diagnosing lung disease, liver disease, and anemia. GLUCOSE: Glucose levels (often referred to as ‘blood sugar’) help diagnose diabetes mellitus. A1C: Hemoglobin A1C is tested to monitor the long-term control of diabetes mellitus. TSH: The thyroid stimulating hormone test is often the test of choice for evaluating thyroid function. It is frequently ordered along with or preceding a T4 test. BUN: The blood urea nitrogen test is used to assess kidney function and hydration. CREATININE: The creatinine blood test is used along with a BUN test to assess kidney function. URIC ACID: Uric acid is a product of protein breakdown used for diagnosing gout and evaluating kidney stones, chemotherapy, and radiation. eGFR: Estimated glomerular filtration rate is used to detect early kidney damage and monitor kidney function status. PSA (Men 40 years+): Prostate-specific antigen is used to screen for or monitor prostate cancer. TESTOSTERONE: Used to detect an abnormal testosterone level in males and females. In males, it helps diagnose the cause of erectile dysfunction, infertility, or abnormal puberty. In females, it helps diagnose the cause of masculine physical features, infertility, or polycystic ovary syndrome (PCOS). And Many More! If your doctor has recommended additional testing, please call us at least 2 weeks prior to your Preventive Care Clinic to find out if we are able to assist with your specific lab tests and doctor’s order. PHA Health & Wellness Partners 106 West 3 Street, McCook NE 69001 rd Phone: (877)345-7775 Email: nursing@myphahealth.com Obtain a massive amount of health information at No Cost To You, courtesy of NBA! PHA Health & Wellness Partners removes barriers you may face in order to access preventive care. Barriers could include logistics, cost, and lack of a provider or facility. Our Preventive Care Clinic provides you with a Health Risk Assessment and comprehensive lab panel with over 40 tests. Learn about some of the lab tests performed by PHA Health & Wellness Partners:
WASHINGTON UPDATE Cutting Through the Noise — And the Regulatory Red Tape Rob Nichols, President and CEO American Bankers Association We are halfway through 2025, and while there have been several significant developments — from the escalation of geopolitical tensions abroad to economic uncertainty at home — there’s a positive message I want to send to bankers: Our agenda is moving forward. With the help of tireless advocates here in Washington and at the state associations, ABA is continuing our steadfast work with the administration and like-minded lawmakers in Congress to advance the policy priorities that are most important for our members, as outlined in our Blueprint for Growth. We have the tools, resources and people in place to make it happen. 12 NEBRASKA BANKER
In early June, Federal Reserve Gov. Miki Bowman was sworn in as the new vice chair for supervision, which we consider an incredibly positive step for our industry. Her first speech shortly after her confirmation gave a strong signal that we could soon see a return to tailored regulation that will help banks unlock economic growth and better serve their customers, clients and communities while still managing risks. Ben Franklin said, ”In this world, nothing is certain except death and taxes.” We have a different opinion, at least as far as taxes are concerned. 402-817-1000 endacotttimmer.com Gov. Bowman is one of many policymakers now occupying key positions in Congress and at the banking agencies who understand just how vital it is that we have a strong, thriving banking sector in this country. We’ve also had a number of wins in the past few months alone that again signal a return to a more rational regulatory framework. Congress came together to pass a bipartisan bill rejecting the CFPB’s misguided overdraft rule — which would have taken a vital credit option off the table for thousands of Americans who rely on it to manage their finances responsibly — and it was signed by President Trump earlier this past spring. This action not only scraps the overdraft rule, but it also blocks the CFPB from issuing a substantively similar rule in the future. 13 NEBRASKA BANKER
ABA played a significant role in completing the CRA resolution, working to educate lawmakers and their staff on the harm this rule would cause if allowed to take effect. Some in our industry didn’t think we could get this done, but ABA and our members pushed hard, and our industry is stronger for it. We continue our advocacy on Capitol Hill in support of longstanding ABA priorities like the Access to Credit for our Rural Communities Act, or ACRE — which was reintroduced with strong bipartisan support in this Congress — as well as bills that would encourage de novo formation and support the important work of community development financial institutions and minority depository institutions. On the regulatory side, we’ve seen rollbacks of several misguided rules or policy statements, and the banking agencies have signaled forthcoming changes to the 2023 Community Reinvestment Act final rule, as well as changes to rules implementing Sections 1071 and 1033 of the Dodd-Frank Act. And — after sustained advocacy by ABA — the CFPB rescinded a package of “guidance” documents that we felt set new regulatory expectations while circumventing the rule-writing process. Coupled with several recent victories in court — including favorable settlements with the CFPB over their appeal of our UDAAP win and late fee final rule — it seems that a regulatory recalibration is well underway. We continue to hear commitments from Treasury Secretary Scott Bessent about working constructively with our sector to cut through the red tape. While they might not be making national headlines, these changes are happening, and they are incredibly meaningful, not just for banks but for the American economy. Email Rob at nichols@aba.com. 14 NEBRASKA BANKER
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Building a Strong Cybersecurity Culture Within Your Organization Jon Waldman, President SBS CyberSecurity Fostering a cybersecurity-savvy culture isn’t just a best practice — it’s essential for protecting sensitive data and maintaining business continuity. Wait, did I just say that culture plays a role in business continuity? Yes, I did! Technical defenses alone aren’t enough to counter constantly evolving cyber threats. A well-established cybersecurity culture ensures that employees at all levels understand their role in protecting the organization and actively work to prevent security incidents. In this article, we’ll explore how to build and sustain that culture so that security becomes second nature rather than an afterthought. TECH TALK 16 NEBRASKA BANKER
Building and maintaining a strong cybersecurity culture is vital for protecting your organization from cyber threats. Understanding Cyber Threats A reactive approach to cybersecurity isn’t enough — organizations must take proactive steps to identify and mitigate risks before they become full-blown incidents. Regular security assessments help identify vulnerabilities, while timely software updates protect systems from known exploits. Ongoing employee training ensures staff can recognize and respond to threats, strengthening overall cybersecurity and reducing the likelihood of costly breaches. Creating a Culture of Cybersecurity at Work Building a cybersecurity-focused culture means integrating security into everyday workplace behavior. This involves setting strong and clear expectations through policies, providing ongoing (not just once-a-year) and role-appropriate training, and ensuring employees understand and apply their responsibilities through regular testing. When employees know what’s expected, receive training to meet those expectations, and have opportunities to practice and be evaluated, security becomes part of how they work, not just a checkbox. Testing results can also be tracked to measure improvement over time. Doing these things consistently helps create an environment where employees feel personally responsible for safeguarding customer information and the business. Leadership plays a crucial role — when executives prioritize cybersecurity and lead by example, it reinforces its importance across the organization. When security is ingrained in the culture, best practices become instinctive, and employees act with awareness. Evidence and transparency are vital in establishing this culture. Organizations must back up their commitment to cybersecurity with clear actions and policies. Regular reporting and open communication build trust and accountability. For example, sharing security audit results or lessons from incident response exercises demonstrates a proactive stance. Transparency also means acknowledging vulnerabilities and collaborating to address them. Strategies to Build a Cybersecurity Culture Top-Down Approach Executives and managers can embed cybersecurity into the culture by modeling strong security behaviors, supporting awareness initiatives and allocating resources for training and tools. Enforcing policies and reinforcing cybersecurity priorities through companywide communication sets the foundation 17 NEBRASKA BANKER
for a security-conscious workplace. When leadership is visibly committed to security, it fosters accountability across all levels of the organization. Continuous Training and Awareness Programs Cybersecurity training shouldn’t be a one-time event — it must be an ongoing effort tailored to different roles. IT teams may need advanced threat detection training, while customer service staff must recognize phishing attempts. Interactive formats like workshops, webinars and gamified learning enhance engagement and retention of security principles. Simulated phishing exercises provide real-world testing opportunities, sharpening response skills. Periodic refresher courses keep staff informed on emerging threats and risk mitigation techniques. Recognizing and Rewarding Positive Security Behaviors Training and testing are essential, but it’s just as important to recognize employees who take initiative when it comes to cybersecurity. For example, when someone reports a real phishing attempt that helps stop a threat in its tracks, that action should be acknowledged and praised as the heroic move it is. When you ask employees to follow specific security protocols that may fall outside their usual responsibilities, reinforcing positive outcomes with recognition is key. Acknowledging these efforts builds confidence and motivates employees to stay alert and engaged. Creating a Collaborative Environment A strong cybersecurity culture thrives when security is seen as a shared responsibility beyond formal training. Encouraging employees to report suspicious activity and share security tips increases collective awareness. Regular team discussions about cybersecurity issues and solutions can foster accountability, while cross-functional cybersecurity teams can further integrate security measures across departments. By embedding security considerations into daily operations, organizations create an environment where safe practices become the norm. Nailing Down Your Organization’s Cybersecurity Culture Building and maintaining a strong cybersecurity culture is vital for protecting your organization from cyber threats. By implementing the strategies outlined in this article, you can cultivate a proactive security culture that strengthens your defenses and resilience. This article was originally published on sbscyber.com. SBS helps business leaders identify and understand cybersecurity risks to make more informed and proactive business decisions. For more information, contact Ryan Kast at (605) 270-9381 or ryan.kast@sbscyber.com. Learn more at sbscyber.com. 18 NEBRASKA BANKER
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COUNSELOR’S CORNER On July 18, 2025, the Nebraska Supreme Court issued a decision enforcing the plain language of two personal guaranties of bank loans. The decision rejected the effort of the guarantors to impose obligations on the lending bank beyond those contained in the loan documents. Baird Holm litigation partner Lindsay Lundholm led the successful representation of the bank in the lawsuit and on appeal. Henderson State Bank had advanced $1.5 million to an agribusiness through a business operating line of credit secured by the personal Nebraska Supreme Court Rejects Effort to Undermine the Enforceability of Personal Guaranties Henderson State Company v. Garrelts, 319 Neb. 485 (2025) Lindsay K. Lundholm, Partner Baird Holm LLP guarantors of three business owners and the managing owner’s spouse. The agribusiness and several other businesses owned by the managing owner ultimately failed. The managing member died suddenly and without any remaining assets. The bank turned to the two surviving business owner guarantors for repayment pursuant to each of their personal guaranties, but the guarantors refused to pay the debt, which led to the lawsuit for breach of the personal guaranties. In an effort to avoid repayment of the $1.5 million and accruing interest, the guarantors brought counterclaims for fraudulent concealment, fraudulent misrepresentation, civil conspiracy and breach of the implied covenant of good faith and fair dealing. The guarantors argued the bank should have disclosed information related to the financial affairs of the managing member and his business, and attempted to utilize unrelated bank records to argue the bank did not follow customary banking procedures in extending the line of credit or 20 NEBRASKA BANKER
402.330.6300 www.walentineotole.com 11240 Davenport St. • Omaha, NE 68154-0125 WALENTINE O’TOOLE, LLP When time is of the essence, experience counts. Walentine O’Toole blends confidence, experience and knowledge with the personal attention you can expect from a regional law firm. Nebraska, Iowa and South Dakota Celebrating 40 years serving our valued clients. MORE FACE TIME. LESS WAIT TIME. Visit NebraskaBlue.com/Telehealth to learn more. Health benefits that give you access to virtual visits with doctors and specialists, even if you’re out of state. So you can get the care you need — wherever you are, whenever you need it. An independent licensee of the Blue Cross and Blue Shield Association. managing it. The lender, in turn, argued that the unambiguous language of the personal guaranties was controlling and did not provide any of the extra-contractual obligations upon it, which the guarantors sought to impose to avoid their obligations to pay the company’s debt. The Nebraska Supreme Court rejected the guarantors’ effort to impose additional duties upon a lender that contradicted or expanded the scope of what was set forth in the text of the guaranty. As in prior cases, the Court reaffirmed its holding that a creditor may assume a surety has obtained information from other sources or assumed the risks involved with guarantying a debt and a duty of disclosure may only arise if the creditor knows or has good grounds for believing: (1) the surety is being deceived or misled, or (2) the surety has been induced to enter the contract in ignorance of facts materially increasing his or her risks, of which the creditor has both knowledge and the opportunity to disclose prior to the surety’s acceptance of the undertaking. Finally, the Nebraska Supreme Court squarely rejected the efforts of the guarantors to utilize the implied covenant of good faith and fair dealing to imply an obligation on the part of the bank to follow “customary banking practices” into the personal guaranties as an additional term. The Court concluded “[a]rguments premised upon customary banking practices exceed the scope of the implied covenant of good faith and fair dealing, which is circumscribed by the terms of the parties’ agreement. To the extent that the Garrelts argue ‘customary banking practices’ are relevant to their other counterclaims, such practices are similarly inapplicable.” The Henderson case creates two key takeaways for Nebraska bankers: 1) carefully drafted contractual language specific to the lending activity of a bank is critical for the protection of the bank’s interests in the event of default, and 2) “customary banking practices” that the bank voluntarily undertakes do not give rise to contractual obligations different from or beyond the scope of a personal guaranty, or other contract between a bank and its customer. 21 NEBRASKA BANKER
TECH TALK The Elephant in the Lobby What Your Customers Aren’t Telling You Robb Rempel, Executive Vice President Haberfeld 22 NEBRASKA BANKER
You already know what your vocal customers think. Those who love you tell their friends about you. Those who are frustrated with you tell you so, giving you the chance to fix the problem. The customers you should be concerned about are the silent majority. They are the most vulnerable to the marketing messages of your competitors. So, how can you change the narrative and turn those customers into raving fans? Customers switch financial institutions for a variety of reasons; some we can control, others we cannot. As bankers, we often do not see things through the lens of the customer, a thing we can control. When you are closing more accounts than you are opening or are at net zero, it is time to reevaluate three key areas: fees, culture and service. Numbers That Matter First, move beyond a narrow focus on fees themselves. The metric we need to drive is total profitability. The profitability formula is simple: Total Profitability = Average Profits per Household × Number of Households. When it comes to maximizing a bank’s overall profitability, the focus is often on profits per household alone. The problem with this approach is that averages only tell you so much. What banks should focus on is the other half of the equation: the number of households. Rather than expecting customers to understand our banker ways, let’s view the world through their eyes. Rather than charging current customers more, you should increase the number of households. In doing so, your total profitability will soar. Most FIs can handle many more customers with little impact on operating costs. With a strategic approach to growth, community banks can double their number of new-customer acquisitions and sustain that growth for as long as they like. Consumer-Friendly Approach to NII For almost a decade, “free” accounts were almost universal. Fast-forward to today, and banks have reversed course by implementing a wide range of fees. What we have found is that not all fees are created equal. In fact, fees rank as one of the most common reasons people switch financial institutions. We are all familiar with the fees that anger customers, from monthly service charges to minimum balance fees. These you can and should avoid. Instead, focus on fees that drive profitability. The three big fees in retail banking are overdrafts, interchange and value-added products. While some uncertainty remains over the future of overdraft fees, too many institutions simply stopped providing this valuable service rather than implementing customer-friendly practices. Over the last three years, interchange income has outpaced overdraft income and will continue to be a significant profit driver. Interchange is not directly paid by customers, so there isn’t the sensitivity about it. Banks 23 NEBRASKA BANKER
should prioritize increasing debit card adoption and ensuring customers are using cards frequently. Simple targeted campaigns can increase usage with remarkable ROI. Furthermore, the instant issuance of debit cards has a direct correlation with both usage and spending. Perhaps it’s time to reevaluate that opportunity. Gaining popularity, value-added products offer another way for us to provide extra benefits for a reasonable fee. Our data suggests 10-15% of new customers will opt for that product when offered as an option. Too many institutions have attempted to maximize this kind of fee by force-migrating customers or pushing the product onto those who do not want it. The result is a short-term burst of income but long-term damage in the form of high attrition rates and unhappy customers. The strategic implementation of this product is key to its success. Building a Customer-Centric Culture Bankers believe we are great at meeting the needs of our customers. The reality is that consumer expectations are being driven by retailers like Chick-fil-A, Amazon, Zappos, Disney, Starbucks and others. What sets them apart? They have built a culture that empowers their employees to delight customers by anticipating and then meeting their needs. Empowered employees create extraordinary experiences that drive customer loyalty, referrals and sustainable growth. So, what does it take to bridge the expectation gap? First, it starts with training — equipping employees with product knowledge and simple sales tools. When employees feel fully confident in what they are offering, they naturally become stronger advocates for the products. Second, it requires a cultural shift — reframing sales as an extension of exceptional customer service. By actively identifying customer needs and offering solutions, banks can not only enhance customer relationships but also foster long-term loyalty and trust. The elephant in the lobby is that our self-perceptions are at odds with customer feelings. Rather than expecting customers to understand our banker ways, let’s view the world through their eyes. It will result in happier and more loyal customers — and more profitability, too. Robb Rempel is executive vice president at Haberfeld, a data-driven consulting firm specializing in core relationships and profitability growth for community-based financial institutions. Robb can be reached at (402) 770-7519 or rrempel@haberfeld.com. 24 NEBRASKA BANKER
SUPPORTING INDEPENDENT ADVISORS WITH TURNKEY SOLUTIONS FOR FINANCIAL INSTITUTIONS 800-262-9535 | 402-483-2555 9060 Andermatt Drive, Suite 101, Lincoln, NE 68526 jfcadvisor.com Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. The bank and JFC are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using JFC and may also be employees of the bank. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, the bank or JFC. Securities and insurance offered through LPL or its affiliates are: Not Insured by FDIC or Any Other Government Agency I Not Bank Guaranteed | Not Bank Deposits or Obligations I May Lose Value JFC ADVISOR NETWORK Where do you want to go? We’ll get there together. Incorporate A Successful Investment Program In Your Bank JFCAdvisorNetwork JFC Advisor Network Visit Our Site A Successful Investment Program Can: Provide an opportunity to acquire new customers Offer customers a platform where all their financial needs are addressed Build high-end referrals to your bank Present customers with robust wealth management solutions
The Growing Threat of AI-Driven Fraud and Deepfakes Matt Jones, Compliance Advisor Compliance Hub In the evolving world of financial crime, few developments have emerged as swiftly and alarmingly as the risk of deepfakes. Deepfakes are pieces of synthetic media, generally in the form of video, audio or images, that are digitally created using AI to replicate a person’s appearance, voice or even supporting identification documentation. AI allows fraudsters to produce incredibly convincing impersonations for the purpose of identity fraud, social engineering and bypassing identity verification systems. AI-driven deepfakes have ushered in a new era of fraud, making it easier than ever for bad actors to impersonate individuals and manipulate financial systems. The implications of deepfakes pose a unique threat to identity verification and fraud detection, requiring banks to modernize their control environments to keep pace. In a speech delivered on April 17, 2025, Federal Reserve Vice Chair for Supervision Michael S. Barr highlighted the escalating threat that generative AI (Gen AI) poses to the financial sector, particularly through the proliferation of deepfakes. He noted a staggering “twentyfold increase over the last three years” in deepfake-related attacks. Gov. Barr underscored the stark juxtaposition between the low-cost, rapidly deployed synthetic media used by fraudsters and the resource-intensive, slow-to-implement controls required of financial institutions. While synthetic media can be created and circulated with minimal cost and effort, financial institutions must invest in careful review, rigorous testing and layered controls. Barr also acknowledged the challenges smaller institutions face and emphasized the need for banks to adopt scalable, thoughtful steps that can meaningfully reduce exposure to AI-driven fraud. 26 NEBRASKA BANKER
To address this growing risk, banks should begin by evaluating and enhancing their existing controls in a manner proportionate to their size and complexity. Scalable solutions do not necessarily require high-end technology. Training front-line staff to identify red flags of synthetic identity misuse (such as unnatural movements in video calls or inconsistencies in submitted documentation) can go a long way in mitigating risk. Adding out-of-band verification (e.g., call-back procedures) for high-risk transactions, reinforcing manual identity reviews during the onboarding of a new customer, and implementing dual-authorization for account changes can also serve as practical, low-cost defenses. Some vendors now offer affordable, modular fraud detection tools, including basic liveness detection or media forensics capabilities, which can be used to supplement traditional customer due diligence. In addition to internal controls, a key risk area lies in the oversight of third-party relationships. As banks increasingly partner with vendors and fintechs to deliver services, it is essential to evaluate not only the vendor’s performance but also how AI is used in the services they provide. Does the vendor rely on AI models for customer verification, risk scoring or fraud detection? If so, what guardrails are in place to detect misuse, synthetic identities or deepfakes? Banks must remember that they remain ultimately responsible for the actions and outputs of their third-party vendors, even when those services are outsourced. This includes ensuring vendors operate within the bank’s risk appetite and regulatory expectations. To meet this obligation, banks should enhance their third-party risk management programs to include specific due diligence around AI model governance, data integrity and fraud control capabilities. Period reviews, contract clauses that require 27 NEBRASKA BANKER
transparency, reporting on AI performance and fraud detection effectiveness are all steps that a bank may consider taking to ensure it maintains oversight of these third parties. The risks highlighted by Gov. Barr certainly aren’t new to the regulatory landscape. In November 2024, FinCEN issued an alert (FIN-2024-ALERT004) that serves to help financial institutions identify fraud schemes associated with the use of deepfake media and generative AI in fraud. The alert is part of the U.S. Department of the Treasury’s initiative to address the challenges posed by AI in the financial sector. It offers foundational awareness of the threat of deepfakes. Additionally, the alert serves as guidance for banks to review and update their risk-based procedures to address the specific challenges posed by deepfakes. The alert also provides specific red flags to help institutions identify potential deepfakes, including but not limited to anomalies in submitted images or videos, discrepancies between known customer data and new applications and unusual transaction behavior following new account openings. Further provided is SAR filing guidance, directing institutions to use the key term “FIN-2024-DEEPFAKEFRAUD” when reporting suspected activity. Banks should incorporate these indicators into their fraud programs and consider whether their current systems are sufficient to capture synthetic identity activity in a timely manner. As banks increasingly rely on AI to combat fraud, it is crucial to also recognize and manage the new risks associated with Gen AI. A robust strategy involves more than just implementing protective technologies; it requires a shift in culture and operations to effectively handle the rising sophistication of synthetic identities, the potential misuse of deepfakes to circumvent security measures and the vulnerabilities that may arise from third-party vendors utilizing AI tools. Establishing strong AI governance, designing scalable controls and ensuring proper oversight of third-party partners are essential steps in mitigating these threats. Although the danger posed by deepfakes is significant and escalating, with careful planning and adaptation, even smaller community banks can substantially lower their risk and bolster their resilience in this evolving AI-driven landscape. 28 NEBRASKA BANKER
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