2025 ISSUE 1 Yield Enhancer or Gimmick? Callable Securities Present Risk and Reward PRESIDENT’S MESSAGE Starting the New Year Off Right Facing Wire Transfer Fraud Losses? Steps to Ensure Your Bank Has Coverage
INVESTMENT PRODUCTS Municipal Bonds Mortgage-Backed Securities Govt. & Agency Bonds Corporate Bonds Brokered CDs Money Market Instruments Structured Products Equities Mutual Funds ETFs FINANCIAL SERVICES Public Finance Investment Portfolio Accounting Portfolio Analytics Interest Rate Risk Reporting Asset/Liability Management Reporting Municipal Credit Reviews Balance Sheet Policy Development and Review Comprehensive SOLUTIONS 888-726-2880 FBBS believes the success of your team is the future of our firm. MEMBER FINRA & SIPC. INVESTMENTS ARE NOT FDIC INSURED, NOT BANK GUARANTEED & MAY LOSE VALUE. Ever since I met Chris Bryan, I have been impressed with how professional & knowledgeable he is in his work for MIB. Chris knows what MIB can do for Banks and he knows what he can do for your Bank. He brings energy and enthusiasm to everything he is associated with. Chris has the “IT” factor and he makes everyone around him better. He is who you would want on your team and he makes the MIB team better. Chris Bryan with customer Brock Nuckolls of Rock Port, Missouri WHY ? Brock Nuckolls, President/CEO Citizens Bank and Trust of Rock Port Lending Services Operational Services Audit Services* MEMBER FDIC Audit Services are offered thru MIB Banc Services, LLC, a subsidiary of our holding company. 800-347-4MIB mibanc.com * 40 YEARS STRONG Four Decades of Growth, Innovation, and Customer Commitment 800-347-4MIB mibanc.com MIB proudly reflects on four decades of commitment to our customers and the communities they serve. Since its founding, MIB has focused on empowering community banks with innovative financial solutions, reliable support, and a steadfast dedication to their growth and success. As we look to the future, we are excited to continue to increase the products and services available to community banks while fostering strong, collaborative relationships. MEMBER FDIC Lending Services Operational Services Audit Services 40 years OPERATIONAL SEMINAR 2025 MIBANC.COM/EVENTS MARCH 6 - COLUMBIA, MO Register Now:
INSIDE THIS ISSUE PO Box 1765 Jefferson City, MO 65102 (573) 636-2751 | miba.net Editor: MATTHEW S. RUGE Executive Director ©2025 The Missouri Independent Bankers Association (MIBA) | The newsLINK Group LLC. All rights reserved. The Show-Me Banker is published six times per year by The newsLINK Group LLC for MIBA 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 MIBA, 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. The Show-Me Banker is a collective work, and as such, some articles are submitted by authors who are independent of MIBA. 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. Published for the Missouri Independent Bankers Association 4 PRESIDENT’S MESSAGE Starting the New Year Off Right 6 FLOURISH Striking Balance in 2025 7 FROM THE TOP Why Advocacy Should Be a Top Priority in 2025 8 A Background On Joe Armour CEO and President, 1st Advantage Bank 12 MIBA Upcoming Events 12 MIBA Lobbying Report 13 ICBA LIVE 14 Rep. Luetkemeyer’s Next Chapter 16 Facing Wire Transfer Fraud Losses? Steps to Ensure Your Bank Has Coverage 18 MEET YOUR MISSOURI BANKER Camille Casner Warner Bookkeeping Specialist, Bank 21 21 Community Bankers For Compliance Program 22 MIBA Ixtapa 2025 24 Yield Enhancer or Gimmick? Callable Securities Present Risk and Reward 26 Strong Earnings and Asset Quality Put U.S. Banks on Solid Ground 28 Save the Date for MIBA’s 48th Annual Convention & Expo 29 News From You 30 MIBA PAC Honor Roll 31 Welcome New Associate Member 31 MIBA Endorsed Vendors 32 MIBA Associate Members 34 Upcoming Webinar Schedule 36 MARK YOUR CALENDAR! 2025 Directors & Officers Conference 18 8 22 24 The Show-Me Banker Magazine | 3
Doug Fish MIBA President BTC Bank Bethany, MO PRESIDENT’S MESSAGE Starting the New Year Off Right As we begin the new year, I encourage you to embrace whatever changes may come our way. I hope there are more ups than downs, but I know that we as community bankers will always rise to the occasion. A good way to start the new year is by having a good strategic plan that includes managing your bank’s risks. 4 | The Show-Me Banker Magazine
The market environment and external and internal factors — including economic cycles, regulatory changes, technological advancements and customer preferences — are all variables. The planning process includes identifying and mitigating potential risks, whether credit, market, operational, regulatory or reputational. Continuously updating risk management frameworks ensures compliance with evolving regulations to protect our assets while maintaining customer trust. The process and resulting objectives provide common goals and a roadmap for success. It is important to remember that strategic plans are not static; they must be flexible and adaptable to changes in the industry and our markets. Regular monitoring and reviewing of progress toward objectives are necessary to ensure the plan remains relevant. Tracking key performance indicators (KPIs) is beneficial to adjusting strategies in changing market conditions with regulatory changes or technological disruptions. A sound strategic plan is key to maintaining profitability, improving customer relationships and ensuring long-term sustainability in the competitive banking landscape. The process to reach a sound strategic plan varies, whether it is an offsite, third-party facilitated process or an afternoon in the board room led by the CEO. Regardless of the “how,” the creation of the plan is most important. Managing the Risks The purpose of a bank’s investment portfolio varies greatly depending on the bank, their individual policies and their needs. Risk management, capital efficiency and liquidity management are all areas that can affect policy and needs. This is true whether your bank has a high loan-to-deposit ratio or uses the bond portfolio for more than just pledging and liquidity. The past 33 months of the four-letter word, AOCI, have impacted our banks negatively with liquidity and tangible equity capital concerns. Fortunately, credit risk in most bond portfolios was not impacted the way market, liquidity and interest rate risks were. Regulation restricts and limits the make-up of a community bank portfolio with the typical portfolio holding government agencies, mortgage back securities and municipals. Depending on a bank’s complexity and needs, some portfolios will vary in makeup and mix. Managing the risks within the investment portfolio through diversification, active monitoring and adherence to regulatory frameworks mitigates the impact of adverse market conditions. The increasing complexity of financial products and evolving market dynamics require constant vigilance and innovation in risk management strategies. Strategic Planning Strategic planning for banks serves as a tool to align goals, optimize resources and stay competitive in an industry that is ever-changing and evolving. The process is multipurpose, addressing both short-term objectives and long-term goals. Whether using an external third-party facilitator or an in-house process, the foundation of any strategic plan has a clear set of goals. They should be specific, measurable, achievable, relevant and time‑bound (SMART). The Show-Me Banker Magazine | 5
Rebeca Romero Rainey President and CEO, ICBA @romerorainey FLOURISH The start of a new year brings with it opportunities, and as we enter 2025, we do so with an eye toward the potential that awaits. For years, we’ve been seeking balance across a number of areas, encouraging regulators and legislators to initiate more proportionate rulemaking, embracing innovation for our banks to become nimbler and more efficient, and engaging in education to expand our knowledge in today’s banking environment. This year, we’ll see results through focused strategy and hard work. Leading With Advocacy Without a doubt, advocacy serves as the most critical piece of our mission in 2025. With a shift in control in Congress and the White House, our focus will be on regulatory relief and proportionate rulemaking. We want to amplify the impact of community banks at the local level and champion issues ranging from rethinking the de novo framework to seeking regulatory relief on Dodd-Frank Act Sections 1071 and 1033 and beyond. Our messages this year center on both right‑sizing regulation and demonstrating the community bank difference. We’re moving from a defensive position of responding to thousands of pages of new regulation to an offensive one where we can be proactive and speak to community‑friendly and community bank-forward rulemaking. We have the opportunity to instigate a more balanced approach to regulation, supporting a vision that considers effects on consumers in the context of the ability to do business. This balanced approach is critical for industry viability moving forward. The moment is now to effect real change. But the reality is that there are a lot of pressing needs with policymakers as the year begins, so it’s our job to ensure that our issues are prioritized and our voices are heard. Growing With Innovation and Education Of course, while we are speaking up for the interests of our communities and our banks, we also need to continue growing as businesses and adapting to a changing industry. From new fintech innovations to a better understanding of the risk and compliance requirements of today’s environment, ICBA Innovation and ICBA Education stand ready to ensure you have the information you need to advance your business plans this year. Striking Balance in 2025 Where I’ll Be This Month We will be hosting state association colleagues at our Innovation Center in Atlanta, and I’ll be making a trip to Minnesota to visit the ICBA team there. It’s with that in mind that I encourage you to join us at ICBA LIVE, taking place March 11-14 in Nashville, Tennessee. There, you can explore what’s next on our advocacy agenda, how our innovation programs can support your bank, and what you and your team need to know to be the change you seek in 2025. This year is about recommitting to ICBA’s pillars of advocacy, innovation and education and embracing the potential that awaits. I, for one, am feeling very optimistic. 6 | The Show-Me Banker Magazine
Lucas White ICBA Chairman, President of The Fountain Trust Company FROM THE TOP Why Advocacy Should Be a Top Priority in 2025 Summit (icba.org/capital-summit), slated for May 12-15 in Washington, D.C. Mark your calendars now to join your colleagues in raising your voice for community banking. This will be a pivotal year for us, where collectively, we will make a difference. Now’s the time to make sure advocating for community banks is among your top priorities. The start of the new year brings with it a fresh slate and a collective reset on priorities. As we develop annual objectives, we need to be mindful of what is transpiring within our banks, but also what is transforming the industry around us and how we can effect positive change. That’s why advocacy must be a priority this year. Setting National Priorities ICBA is nonpartisan and has a long history of working with both sides of the aisle, and we have a new administration and elected officials who need to fully understand the community bank difference. Our voices need to be heard on a wide range of issues, including Section 1071 of the Dodd-Frank Act, the Secure and Fair Enforcement (SAFE) Banking Act, the Access to Credit for our Rural Economy (ACRE) Act and more. In addition, with the Tax Cuts and Jobs Act of 2017 set to expire at the end of 2025, it’s going to be a big year to discuss taxes — and, with them, credit union disparities. The odds are in our favor: Following a significant election year, Congress is fired up to get new legislation on the table. This is our opportunity to drive home the importance of the high-tech, high-touch community banking model. It’s our chance to demonstrate how community banks prioritize a legislative and regulatory environment that keeps the banking system safe and sound, creates a level playing field in financial services and allows for the flexibility necessary to serve the distinct interests of communities across the nation. The Power of the Collective But it takes the power of this entire community to amplify those messages and bring them to life. Members of Congress need to hear specific examples from their constituents about how community banks meet their districts’ needs. Members of Congress need more than platitudes and big‑picture ideas; they need to understand how what we do every day makes a difference in their constituents’ lives and strengthens their communities. In short, they need to hear our stories. So, as you set your intentions for 2025, I hope that one of them is to attend ICBA’s Capital My Top 3 In addition to remaining a vocal advocate for community banking, here are my three New Year’s resolutions for 2025: 1. Spend more time at home, in my bank and with my community. 2. Be more present with my kids. 3. Continue running for health. The Show-Me Banker Magazine | 7
A Background On Joe Armour CEO and President, 1st Advantage Bank 8 | The Show-Me Banker Magazine
Joe Armour was born and raised in historic St. Charles, Missouri. From a young age, Joe knew that he wanted to be a banker, making him the first to choose this career path in his family. “I think the reason why I went to banking is that, as a banker, you get to help people. Many people don’t see banking that way, but that’s what bankers do, they help people,” Joe said. While attending St. Louis University, Joe worked in the grocery business to help pay his way through college. After graduation, he stayed one more year in grocery and then started his career in banking, participating in the Super Money Market program. The program provided overall training in all facets of banking, including lending, deposits, management and more. Joe started off working as a teller, then a personal banker, a credit analyst and a lender. He was able to learn about the banking business from the ground up, gaining an understanding of what each employee must do in their role to ensure that the team as a whole and the bank thrive. This experience has served Joe well over the years. In 2010, Greg Smith, a colleague, asked Joe if he would like to make a move with him and join the management team at 1st Advantage Bank. The bank was only 5 years old at the time, along with being in the middle of the Great Recession. Joe said, “Greg brought me along as part of the management team. He selected me along with a few other talented people and gave us the opportunity to continue developing.” He liked the challenge of being able to work out a difficult situation and help the bank grow. Greg, now retired, was the CEO of 1st Advantage Bank. Joe credits Greg for helping him get to where he is today. “Greg worked here with me for 17 years, and he was certainly a huge part in the development of my career. Greg took a chance on me and helped mold me into where I am today,” Joe recalled. “Attitude is everything,” Greg would often say. He made a point to teach those around him that you can accomplish so much with a positive attitude. Joe took that lesson to heart. Today, Joe is the CEO and president of 1st Advantage Bank. He enjoys the fact that no two days are the same. Taking on the challenge of the day is something Joe looks forward to. In fact, when we were speaking with Joe, the challenge of the day was snow. Yes, you read that right, snow. Joe explained, “It’s amazing how things have changed over the years with people’s attitude towards snow. It used to be that you either came to the office or you didn’t, and now we are trying to get people to work from home if they can. We need to be flexible but, ultimately, still have to have the bank open.” The Show-Me Banker Magazine | 9
One of Joe’s most memorable experiences happened during the recent pandemic with the Paycheck Protection Program (PPP). “During PPP, we were working sometimes over 20 hours a day, 24 hours a day in some cases. There were a lot of employees involved in that, and I don’t think I ever had to ask somebody to help out, they just came in and did it,” he said. “We were a team, and it was an awesome feeling.” Joe continued, “We are able to be adaptive to the many changes because we were a smaller bank and had a little bit more flexibility. That was a huge advantage of community banks during that time. We were getting calls from bigger banks, asking if we could help them out. Community banks rose to the occasion and led the way during PPP, both in Missouri and nationwide. “We were constantly in contact with our customers; people’s livelihoods were at stake. We would get calls at all hours. Once, we even answered a customer’s call at 3:00 a.m. We were in the office working anyways, so why not?” Having an amazing team of employees doesn’t happen by chance. “I’ve been at a couple of different banks over the years. I’ve been here for coming up on 15 years. We really have a great group of people at this bank. We’re a bank with 22 employees, and we have done a fantastic job. It is not ‘Joe Armour,’ it’s all of us, all the team members at 1st Advantage Bank,” Joe said. “It doesn’t matter what your title is. We pick up trash from the parking lot if needed, and we do what needs to be done to make this bank successful and to give the level of customer service that our customers expect. Attitude certainly is everything!” It is important to Joe that he gives back and helps others outside of work too. He is currently involved with Community Living Inc., a nonprofit that provides services to adults and children with developmental and intellectual disabilities. Prior to that, Joe sat on the board of directors for nine years with 10 | The Show-Me Banker Magazine
Boone Center Inc., an organization that helps developmentally disabled adults learn skills and find employment. He is also on the board of directors with the O’Fallon Chamber of Commerce. Joe explained that membership in MIBA is important: “Our bank has been a member since day one, and I’ve taken an active role over the past five years. I am currently serving on the Bank Services Committee and the IT Committee.” He continued, “The biggest thing MIBA provides is opportunities to network — holding conventions of like-minded community bankers with banks of all different sizes from all areas of the state as well as the many vendors that show up. We’re able to get ideas from each other; it is helpful to be able to talk to other bankers around the state and learn more about what they’re doing or what challenges they might have.” It is safe to say that Joe’s childhood ambition of helping people has come full circle. Whether it be in banking or in the community, serving and helping others is a way of life. “I could not do this without the support of my wife, Amy, and children, Joe and Allison,” Joe said. When Joe is not at work or serving in the community, he enjoys traveling to the national parks and hiking them with Amy. To date, the two have hiked through 22 of the national parks, 23 if you were to count the Everglades. From Acadia National Park in Maine to the Olympic National Park in Washington and many places in between, their goal is to hike through every national park. The Show-Me Banker Magazine | 11
The 2025 Session of the Missouri General Assembly kicked off at noon on Jan. 8. As expected, Dr. Jon Patterson and Alec Riley were elected speaker of the House and majority leader, respectively, key leadership positions in the House. Cindy O’Laughlin and Tony Luetkemeyer were elected president pro tem and majority leader, respectively, key leadership positions in the Senate. For now, the House and Senate are going through the exercise of swearing in new members, making speeches on what their top priorities are for their tenure, forming new committees and getting rid of or consolidating old ones, and naming committee chairs and members. Time will tell what happens with the key issues, but they will surely get floor time this year. However, them crossing the finish line is a big “if” at this point. With the naming of committee chairs, Sen. Sandy Crawford of Buffalo was named chair of the Senate Insurance and Banking Committee, a position she has held for the last two years; and Rep. Bill Owen of Springfield was named chair of the House Financial Institutions Committee. Committee members will be named shortly. As for the “big” issues, Pro Tem O’Laughlin outlined her priorities as education, repealing the non-partisan court plan and placing the appointment of the highway superintendent for the Missouri Department of Transportation with the governor. Speaker Patterson highlighted trying to deal with two recent statewide vote issues that passed, abortion rights and the increase in the minimum wage. As for banking-related issues, MIBA is working with other financial groups to address fraud, especially fraud targeted at Missouri seniors. We’ll update you on our progress in our next article. As always, it is a pleasure to represent MIBA, and we thank you for your trust in our ability to navigate the Missouri Legislature and Executive Branch. Andy Arnold Arnold & Associates MIBA Lobbying Report 12 | The Show-Me Banker Magazine
RHYTHM. AMPLIFIED. Together, community bankers amplify the power and successes of our industry at the largest annual gathering of community bankers—ICBA LIVE 2025. Plug into a wide range of educational offerings to boost your knowledge and bring it back to your bank. Synchronize with fellow community bankers and industry experts on the latest industry trends and innovations. Celebrate the unique rhythm of our industry through energizing and inspiring general sessions and unparalleled networking events. Register today at icba.org/live March 11–14, 2025 Gaylord Opryland Resort & Convention Center NASHVILLE
Rep. Luetkemeyer’s Next Chapter With less than one month left in his eight-term Congressional tenure, Rep. Blaine Luetkemeyer released the following statement regarding his legacy serving Missouri’s Third District: “Above all, I’m proud to have advocated on behalf of thousands of individual constituents dealing with federal agencies. From gaining access to veterans’ benefits to acquiring passports for family vacations, it has been an honor and a privilege to serve Missouri’s Third District. “Additionally, we funded life-saving cancer research, overhauled the efficiency of American housing, fought to rein in rogue, overzealous bureaucrats and ensured our incredible state received the recognition it deserves.” Congressman Luetkemeyer introduced the Housing Opportunity Through Modernization Act, which was signed into law in 2016, successfully cracked down on the abuse of housing subsidies, reduced regulatory burdens related to the Department of Housing and Urban Development, and set a foundation to better provide affordable housing for low-income individuals. Through his advocacy, Rep. Luetkemeyer secured critical funding for the nuclear reactor at the University of Missouri, NextGen MURR. MURR has placed Central Missouri at the forefront of cutting-edge cancer research, producing the most life‑saving radiopharmaceuticals in the entire world over the past 15 years. Congressman Luetkemeyer’s congressional accomplishments also include multiple resolutions cementing points of Missouri pride into American history, including honoring the life and legacy of diplomat Carl Lutz and establishing the Winston Churchill Memorial and Library on the campus of Westminster College in Fulton, Missouri, as “America’s National Churchill Museum.” 14 | The Show-Me Banker Magazine
REGISTRATION ENDS FEBRUARY 19! Position your bank as a forward-thinking leader in the industry by hearing from award-winning cybersecurity experts, AI thought leaders, and local executives from Missouri’s top businesses. USE CODE MIBA20 FOR 20% OFF AT JBITS.JMARK.COM/REGISTER! MARCH 6, 2025 CONTACT US TODAY TO PLACE YOUR ANNOUNCEMENT AD. SHOW-OFF. THERE'S NOTHING WRONG WITH BEING A Call (801) 676-9722 or scan the QR code to get started. Place QR Code Here ▷ Show off your employees. ▷ Show off your accomplishments. ▷ Show off a job well done. Employees are motivated when they are recognized and feel valued. This magazine is a great platform to celebrate your team’s accomplishments! The Show-Me Banker Magazine | 15
Facing Wire Transfer Fraud Losses? Steps to Ensure Your Bank Has Coverage By Shelli J. Clarkston, Of Counsel Attorney, Spencer Fane LLP Wire fraud has become one of the most significant threats facing community banks in the last few years. Wire transfers used to be seen as an efficient and secure way to transfer funds from one account to another. However, because the transfers generally take place almost instantly, fraudsters are focusing their attention on ways to access customer account information to initiate wire transfers, and as a result, wire transfer fraud and resulting losses have increased significantly. There are many methods through which fraudsters attempt to gain this information, including phishing attacks, impersonation and social engineering, malware and trojan horses, and fake charities and investment schemes. Still, one of the most common is through business email compromise. Business email compromise occurs when the fraudster gains access to a business’s email system and then, impersonating an employee of the company, submits a wire transfer request to the bank through the compromised email. While banks should ensure they are following their policies and procedures to verify the wire transfer request, including established security procedures such as a call back to the customer, it is expected that mistakes may still happen. However, what is not expected is that the bank’s insurance company, from whom the bank obtained an insurance policy to cover these types of losses, is denying coverage. The reasons for denial are even more surprising. An increasingly common reason for denial is that the bank does not have a “written agreement” with the customer. While the bank likely does actually have a wire transfer agreement with the customer, especially for a business customer, if the agreement does not meet the requirements of what the 16 | The Show-Me Banker Magazine
Wire fraud has become one of the most significant threats facing community banks in the last few years. insurance company states is a “written agreement,” the claim will be denied because it does not have a “written agreement.” In order to meet the definition of a written agreement under many insurance policies, the agreement must (a) be written, (b) authorize the bank to rely on email, voice, online or fax instructions from the customer to transfer funds, (c) include the names of the people who are authorized to initiate transfers or validate transfer instructions, including their phone numbers and email addresses, (d) a definitive and clear commercially reasonable procedure that will be used by the bank to verify all transfer requests, and (e) state that the bank will not act upon a request if (i) the bank is unable to obtain proper and satisfactory verification of the transfer instructions, (ii) there is inconsistency between the instructions and information previously supplied to the bank by the customer, (iii) instructions are not submitted in accordance with the bank’s established security procedures, and (iv) instructions are suspected by the bank to not be genuine. It is crucial that your bank review its wire transfer agreement to ensure it meets the above requirements and the requirements of your insurance carrier. For example, when describing the security procedures to be used by the bank to verify the wire transfer request, a statement that “the bank may verify the request by performing a call back ...” will likely result in denial of coverage because of the use of the word “may.” Insurance companies are stating that the use of the word “may” is not definitive — the bank may or may not perform a callback. Even if the bank performs the callback in accordance with the procedures, the agreement will not meet the definition of a written agreement in the insurance policy and coverage will likely be denied. Insurance companies are also denying coverage if the wire instructions come from someone other than an individual listed in the wire transfer agreement, even if the initial request came from a named and authorized individual. For example, in a situation where the CEO is the individual authorized to make a wire transfer request but the CFO has the account information for the payee because it is the one in receipt of an invoice, even if the CEO sends an email to the bank requesting the transfer and then requests the CFO to provide the wire details, the bank’s acceptance of the wire details from the CFO will likely result in denial of coverage because the CFO is not a named and authorized individual in the wire transfer agreement. More simply, the bank cannot accept wire instructions or wire details from any individual other than an individual named in the wire transfer agreement, even if that individual did not make the actual wire transfer request. These reasons for denial are surprising to many banks who believe they have a thorough agreement and appropriate procedures in place. However, given the significant increase in wire transfer fraud and resulting insurance claims, insurance companies are strictly enforcing the terms of insurance policies. To avoid any surprise claim denial, your bank should review its insurance policies with its legal counsel to confirm the requirements for coverage, as well as its wire transfer agreement and procedures to ensure they meet the policy requirements. Failure to do so could result in your bank suffering a loss for which there is no insurance coverage. Shelli J. Clarkston is an of counsel attorney in the Kansas City, Missouri, office of Spencer Fane LLP, where she provides financial institutions of all sizes with proactive legal counsel on regulatory and compliance matters, allowing them to conduct business and complete transactions with more precision, speed and cost-efficiency. She can be reached at (816) 292-8893 and sclarkston@spencerfane.com. The Show-Me Banker Magazine | 17
Camille Casner Warner Bookkeeping Specialist, Bank 21 MEET YOUR MISSOURI BANKER 18 | The Show-Me Banker Magazine
Where is your main bank and branches located? What is the market like? Our main bank is located in Carrollton. We have three other branches located in Marshall, Sedalia and Blue Springs. I work at the main branch in Carrollton. We specialize in ag, commercial and secondary markets. What is something unique about your bank? Our bank is 121 years old and has been family-run for all 121 years. How did you get started in the banking business? I have always been interested in the banking business. At a young age, I showed a bottle calf that won grand champion. I received a sum of money as the prize. My parents brought me into Bank 21 to open my first savings account that grew interest. I always wanted to learn more about the different accounts and ways you can build money through the bank. When I went to college, I focused on business classes such as accounting and marketing. From there, I was able to find a job with installment loans, but I knew that I wanted to transition to the banking business. When Bank 21 had an opening, I applied and got hired as a bookkeeping specialist. What is the most important thing you have learned from this career so far? The most important thing that I have learned from my bank career so far is how real fraud is and how important it is to monitor your accounts. Before I started working at the bank, I didn’t really believe it was that easy for fraud to occur. Working at Bank 21 has really opened my eyes to this. What prompted you to want to begin a career in banking? What made me really want to transition to banking is the diversity of the career. I am currently a bookkeeping specialist learning IT, but there are so many career options through banking, such as loans, management, accounts and so much more. I also really like how our bank is so involved with our community and customers. What is the most interesting thing you have learned from this transition to the banking industry? I think the most interesting thing I have learned from this transition to the banking industry is how much the bank really looks after your accounts and money. Tell us about the bank’s community investment efforts. Each of our branches participates in all of our community events. For example, the Carrollton branch participates in many fundraisers for community charities. In our community, we have a foundation called Help Services that sells used products at a remarkably low price The Show-Me Banker Magazine | 19
for all personnel in our community. Each year, Help Services has a fundraiser that Bank 21 donates and participates in. We also donate and participate in the fundraiser for a club in our community called Women’s Club. What is the bank’s biggest challenge in the area of internet banking/mobile banking? I would say that the bank’s biggest challenge with internet banking/mobile banking would be fraud and stolen credentials. When setting up online banking and bringing in mobile deposits, it is so important to watch for suspicious endorsements and mismatching information. What’s your favorite thing about your bank/ banking in general? My favorite thing about my bank is how we are always involved with our community, whether it’s through donations, volunteering or having our customer appreciation days. The thing I like about banking in general is how we’re always evolving. Banking is always coming up with new ways to help make things more accessible and secure. If you didn’t have a career in banking, what other career would you choose? When I first went to college, I wanted to major in communications/journalism. I quickly learned that there was not much opportunity with that major around where I lived. That is why I changed my major to business. Journalism would be a career I would pick if I wasn’t in banking. LAUNCH YOUR SALES Boost Your Business by Advertising Here! (801) 676-9722 sales@thenewslinkgroup.com CONTACT US TODAY! 20 | The Show-Me Banker Magazine
For more information contact Rebecca Young at ryoung@miba.net or Visit our website at www.miba.net Missouri Independent Bankers Association (MIBA) is pleased to sponsor the annual Community Bankers for Compliance Program (CBC). The CBC Program is the most successful and longest running compliance training program in the country. The CBC Program will provide your bank with up-to-date information on the ever-changing bank regulations, as well as guidance for structuring and maintaining your in-bank compliance program. In addition, it provides a forum where those responsible for regulatory compliance can discuss issues and exchange ideas with other community bankers. This is the best money we’ve ever spent on compliance. My compliance officer gets so much good out of this and utilizes the call-in feature for questions frequently. Our bank would hate not to have this available. -Dave Alderton, Peoples Bank of Wyaconda
22 | The Show-Me Banker Magazine
Thank You to Our Sponsors! The Show-Me Banker Magazine | 23
Yield Enhancer or Gimmick? Callable Securities Present Risk and Reward By Jim Reber, President and CEO, ICBA Securities MIBA Endorsed Vendor Most representatives of the broker‑dealer industry have been suggesting to their customers, especially community banks, that their collection of bonds could be situated to perform pretty well in 2025. You can be forgiven for rolling your eyes if you’ve heard this. And I get it: Persistently stubborn inflation forced the Federal Reserve to hike rates and now to keep them elevated for the foreseeable future. This, of course, has kept the market values of your portfolio depressed for going on three years now. 24 | The Show-Me Banker Magazine
While it’s true that portfolio yields are now at a multiyear high, they haven’t kept pace with your cost of funds. Some banks have a negative spread between their investments and their deposits, and that does not help net interest margins. However, there could be an unrecognized upside to your bond portfolio if you own certain securities — namely, callable bonds at a discount. The Talk of the Town The good news is that most banks now own at least some bonds at prices below par. That was not the case prior to the Fed boarding the good ship “Rate Hike” in early 2022. At that point, portfolios had a dreadful makeup: low yields (well under 2% tax equivalent), long durations (well over four years) and high book prices (nearly 103.00). Thanks to the prolonged period of high rates, yields are now approaching 3%, and book prices are near par (100.00). It’s also worth noting that most bonds owned by banks have embedded call options. This gives the issuers — or borrowers — the right to pay the debt back early if they so choose. Somewhere around 80% of all the bonds in all the community bank portfolios have some kind of call features. While that sounds enormous or even egregious, consider that virtually all loans are also redeemable at the borrowers’ pleasure. That’s why the management of call risk is a major focus for asset/liability committees. The Rundown This may be painfully obvious, but we’re going to review how a bond that’s redeemable early, when purchased at a price below par, has some latent upside. Although rates pretty much ran in place in 2024, there are plenty of seasoned bonds issued in 2020-21 still available at deep discounts. Two of the most common varieties are agencies and mortgage-backed securities (MBS). Agencies are callable in full, so they’re easier to analyze. If an investor buys a bond at, say, 97 cents on the dollar, the worst case is for it to not get called. If it ever does, the discount price adds to the yield to the call date, and the investor reaps an income windfall. One other item to note: the worst case is still better than the yield to maturity on a non-callable “bullet” bond. MBS are similar but not identical. The principal on a mortgage bond is returned to the investor in a series of monthly payments. Investors receive a pro-rata share of all the principal repaid and prepaid, from all the loans in an MBS pool. If a security is purchased at the 97.00 price just mentioned, and some homeowners decide to cash in their chips early, the bank receives its share at 100.00, and that too is a yield enhancement. Unlike an agency, over time, some mortgages will prepay early regardless of current market rates, as certain life events occur in any rate environment. Worth It? Investors are guaranteed of uncertainties regarding cash flows in a callable-heavy portfolio. It requires the manager to constantly review the upcoming call dates, as well as variables such as current versus seasoned coupons. It’s worth asking: Are callable bonds worth the trouble? I believe the investors have spoken, and their answer is “yes.” There are times when non-callable portfolios outperform those with lots of optionality, namely in falling rate scenarios. That’s why high performing portfolios in 2025 have large doses of the ultimate non‑callable bonds, those being treasury notes. But in rising rate environments, callables are the winner. Here’s some free advice for those shopping for callable agencies: The yield give-up for buying a bond that’s callable one time only (“European”) versus periodically (“Bermudan” or “American”) is quite modest — in many cases, less than 10 basis points (0.10%) to maturity. Add to that the current opportunity for a head start by insisting on deeply discounted bonds that were launched in the 2020-21 era, and you’ve got built-in upside. That sounds to your correspondent like a yield enhancer — and most assuredly, not a gimmick. January Economic Webcast ICBA Securities and its exclusive broker Stifel kick off their 2025 webcast calendar with the quarterly Economic Insight Live on Jan. 30, at 1 p.m. Eastern. Stifel Chief Economist Lindsey Piegza, Ph.D., will present. Up to one hour of CPE is offered. For more information and to register, contact your Stifel rep. Jim Reber (jreber@icbasecurities.com) is president and CEO of ICBA Securities, ICBA’s institutional, fixed-income broker-dealer for community banks. The Show-Me Banker Magazine | 25
Strong Earnings and Asset Quality Put U.S. Banks on Solid Ground By Carl White, Senior Vice President of Supervision, Credit and Learning Division, Federal Reserve Bank of St. Louis U.S. banks are in good condition with solid earnings, sound asset quality and regulatory capital levels above required minimums. This assessment comes from the Federal Reserve Board of Governors in its semiannual Supervision and Regulation Report published in November. The report covers banking system conditions in the first half of 2024, as well as regulatory and supervisory developments for the institutions under the Fed’s supervisory umbrella. Supervision by the Numbers Although the Fed has supervisory authority over several large banks and all the nation’s bank holding companies, most banks under its supervisory umbrella are community banks — banks with assets of less than $10 billion. Of the 705 state member banks (SMBs) the Fed supervised at midyear 2024, 92% (650 banks) met that community bank threshold and were part of the Fed’s Community Banking Organization (CBO) portfolio. The next largest group — consisting of 42 SMBs — makes up the Regional Banking Organization (RBO) portfolio; banks in this group have total assets of $10 billion to $100 billion. At the St. Louis Fed, all our supervised banks fall into the CBO or RBO portfolio. Currently, we have direct supervisory responsibility for 129 SMBs in the two portfolios, representing nearly one-fifth of the Fed System’s supervised banks. Eight banks are in our RBO group and the remaining 122 are in the CBO group. In terms of assets under supervision, the RBO banks have a combined $256.1 billion, or about 70% of the total. The combined assets of the CBO banks total $108.2 billion. An Eye on Credit While banking fundamentals are currently strong, supervisors are keeping an eye on credit quality. The level of nonperforming loans remains low, and the ratio of nonperforming loans to total loans is below the 1% benchmark. However, delinquency rates for certain categories of consumer and commercial real estate (CRE) loans have risen. In the consumer loan segment, supervisors are watching credit card and auto loan delinquencies, both of which have ticked up in recent quarters; the auto loan delinquency rate was just below its five-year high in the second quarter. The nonperforming ratio for CRE loans is at its highest level since 2014, primarily driven by loans for office buildings in major cities. At large banks, the nonperforming loan rate for office loans hit 11% in the second quarter. And while the rate didn’t increase as much at small banks, they tend to hold a larger percentage of their loan portfolios in CRE loans, elevating the stakes for CRE market 26 | The Show-Me Banker Magazine
BANCMAC COMMUNITY BANC MORTGAGE CORP. YOUR COMMUNITY BANK MORTGAGE PARTNER bancmac.com mortgages@bancmac.com 888.821.7729 | NMLS# 571147 BancMac provides correspondent and wholesale lending and is your Community Bank Mortgage Partner to help your financial institution originate fixed-rate secondary market loans including: PROGRAMS • Conventional Loans • USDA Rural Development Loans • Rural Living (Hobby Farm) Loans • VA Loans • Jumbo Loans • FHA Loans OUR PARTNERS RECEIVE: • Superior Service & Competitive Pricing • No Minimum Volumes • Significant, Non-Interest Fee Income • Non-Solicit Protections & More weakness. Office vacancy rates climbed during the COVID-19 pandemic and, in many cases, have remained elevated as many people continue to work from home. Supervisors are closely monitoring underwriting standards, loan quality and credit loss reserve levels across the entirety of banks’ loan portfolios. Other Supervision Priorities Assessing banks’ preparedness for managing liquidity risk remains high on the Fed’s priority list. Banks are expected to have prudent liquidity risk-management practices and to regularly test their ability to access multiple sources of contingent funding, such as Federal Home Loan Bank advances and the Federal Reserve’s discount window. Cybersecurity is another supervisory priority. Examiners are specifically looking for adequate risk management, governance and controls to protect banks’ data and operations against cyber threats. That assessment extends to certain services performed on behalf of banks by their external service providers. This post is part of a series titled “Supervising Our Nation’s Financial Institutions.” To access the full series, scan the QR code. https://www.stlouisfed.org/on-the-economy#srote_ otefreetexttags=supervising%20financial%20institutions U.S. banks are in good condition with solid earnings, sound asset quality and regulatory capital levels above required minimums. The Show-Me Banker Magazine | 27
September 8-10, 2025 ~ The Lodge of Four Seasons
News From You Mid America Bank Hires Amber Cope Mid America Bank is pleased to announce Amber Cope has been hired as branch manager of its Osage Beach Branch. In this role, Cope will be responsible for overseeing the daily operations and sales function of the branch. She will lead the branch in making sales calls, conducting training, processing transactions and setting up new accounts. Cope brings nine years of banking experience to the position. “I love serving and building meaningful relationships with the surrounding communities. I also truly enjoy working alongside a team of such dedicated individuals,” says Cope. “To me, and the Mid America team, you are so much more than just another client. I strive to provide exceptional customer service and create a meaningful relationship with each interaction.” Cope and her family reside in Camdenton where they enjoy lake life. In her spare time, she enjoys teaching children about work readiness, entrepreneurship and financial literacy. Mid America Bank would like to welcome Amber to the team! Mid America Bank Hires Brandon Kalista Mid America Bank has announced that Brandon Kalista has joined the team as AVP and loan officer. Kalista will reside at the Columbia branch, where he’ll be responsible for evaluating, authorizing, recommending approval of and closing loan applications for consumer, residential, commercial and agricultural loans. In this role, Kalista is looking forward to engaging with local investors and entrepreneurs as they invest in our community. He aims to help his clients navigate the process of securing a loan. Before joining Mid America Bank, Kalista was previously employed at a local community bank and has over 14 years of banking experience. Kalista and his family reside in Columbia, where he is involved in his local church. In addition, he has a passion for his community and enjoys being a part of its growth and development. The Show-Me Banker Magazine | 29
MIBA PAC Honor Roll PRESIDENT’S FAIR SHARE LEVEL $10 per Million in Deposits up to $250 Million Adrian Bank Bank Northwest, Hamilton Bank of Advance Bank of Iberia Bank of Old Monroe Bank of Salem Belgrade State Bank Blue Ridge Bank and Trust Co., Independence BTC Bank, Bethany Community Bank of Pleasant Hill Community Bank of Raymore Community State Bank of Missouri, Bowling Green Citizens Bank, New Haven Exchange Bank of Missouri, Fayette Exchange Bank of Northeast Missouri, Kahoka Farmers & Merchants Bank, St. Clair farmbank, Green City FCNB Bank, Steelville First Bank of the Lake First Independent Bank, Aurora First State Community Bank, Farmington Jonesburg State Bank Metz Banking Company, Nevada Midwest Independent BankersBank, Jefferson City Midwest Regional Bank, Clayton New Frontier Bank, St. Charles Northeast Missouri State Bank, Kirksville Peoples Bank & Trust Co., Troy Peoples Bank of Altenburg Peoples Bank of Wyaconda, Kahoka Peoples Saving Bank, Hermann Preferred Bank, Rothville Regional Missouri Bank, Marceline Security Bank of the Ozarks, Eminence The Missouri Bank, Warrenton Town & Country Bank, Salem Verimore Bank, Brookfield PLATINUM LEVEL $750 and up Mid America Bank, Wardsville Sherwood Community Bank, Creighton United State Bank, Lewistown SILVER LEVEL $200-$399 1st Advantage Bank, St. Peters Bank of Crocker Bank of Monticello Chillicothe State Bank Farmers State Bank, Cameron Silex Banking Company State Bank of Missouri, Concordia GOLD LEVEL $400-$749 Community Point Bank, Russellville Legends Bank, Linn Contributors to the MIBA Political Action Committee are recognized for their generosity on the Association’s website and at the MIBA Annual Convention and Exhibition. Different levels of contribution have been set to recognize supporters of our Political Action Committee fund and to make the Association’s membership more aware of this important facet of our work on behalf of the political agenda of community banks across Missouri. NOTE: PERSONAL or CORPORATE CAMPAIGN CONTRIBUTIONS TO ANY PAC ARE NOT DEDUCTIBLE IN ANY AMOUNT FOR FEDERAL TAX PURPOSES. 30 | The Show-Me Banker Magazine
Bank Compensation Consulting (972) 781-2020 bcc-usa.com Bankers Security Inc. (816) 358-0883 bankerssecurity.com Community Banker Visa (800) 675-6284 www.miba.net/community-banker-visa.html First Bankers’ Banc Securities Inc. (314) 835-4908 fbbsinc.com Flat Branch Mortgage Services (314) 808-3918 flatbranchhomeloans.com forbinfi (319) 274-8492 www.forbinfi.com ICBA (202) 659-8111 www.icba.org ICBA Securities (901) 762-5510 www.icba.org/icba-securities JMARK Business Solutions Inc. (417) 863-1700 www.jmark.com Midwest Independent BankersBank (573) 636-9555 mibanc.com QwickRate (800) 285-8626 www.qwickrate.com/qrweb/XSP/ home/home.xsp SHAZAM (972) 765-2759 www.shazam.net TIG Advisors (573) 875-4800 tigadvisors.com MIBA Endorsed Vendors Welcome New Associate Member FIPCO In the banking industry, technology has evolved, customer expectations have grown, and competition seems to pop up on a new corner every month. Now more than ever, financial institutions take comfort in the steady, meticulous, proven products and services that have earned FIPCO (Financial Institution Products Corporation®) its reputation as a trusted leader in form sets, credit and deposit software suites, staff training and compliance management. Their job is to stay up-to-the-minute on the issues that impact their clients’ operations across the country. That diligence means you can be confident that their products are compliant, their technology is current, and their consulting services are timely and impactful. And their industry-leading products are only part of the equation. Like your business, theirs has a team of dedicated, client-focused professionals to truly stand apart. They don’t just sell you a product and send you on your way. They stay with you throughout the duration of their partnership. Whenever you need them — as fast as you need them — they’re standing by to provide a level of service and support that is simply unmatched in the financial services industry. To learn more, contact Jesse Voit at (715) 451-9989 or visit www.fipco.com. The Show-Me Banker Magazine | 31
www.thenewslinkgroup.orgRkJQdWJsaXNoZXIy MTg3NDExNQ==