INSIDE New Horizons: IBA Annual Convention 2015 Story on page 10. Hoosier Banker OCTOBER 2015
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Mission To advocate for and sustain an environment in which banks can succeed. Vision To provide exemplary service to members as the premier state bank trade association in the country. Values In fulfilling our mission, we will: • Maintain the highest ethics, integrity and respect for others; • Serve with professionalism, innovation and resourcefulness; • Instill passion, positive attitude and enthusiasm; • Remain mindful that the success of the IBA is judged by the success of its members. View Hoosier Banker Digital at www.ourdigitalmags.com/ publication/?m=19522&l=1. Publication Disclaimer Hoosier Banker articles are published by the IBA Service Corp., a subsidiary of IBA Holding Company Inc., that is a wholly owned subsidiary of the Indiana Bankers Association. All material published in Hoosier Banker and/or on the IBA website is the property of the Indiana Bankers Association. Indiana Bankers Association Officers, Directors & Staff IBA Officers Chairman ...................................................... Larry W. Myers, First Savings Bank, Clarksville FirstVice Chairman ............................... Michael H. Head, First Federal Savings Bank, Evansville SecondVice Chairman ................. Annette M. Russell, Security Federal Savings Bank, Logansport Immediate Past Chairman ............................................ David W. Heeter, MutualBank, Muncie President and Chief Executive Officer ..... S. Joe DeHaven, Indiana Bankers Association, Indianapolis Constituent Directors ICBA State Director ........................................ David M. Geis, Jackson County Bank, Seymour ABA Membership Council ....................... Michael K. Bauer,Your Community Bank, New Albany Future Leadership Division President .......... Lucas White,The Fountain Trust Company, Covington Non-Indiana Headquartered Bank Director ............... Tim Massey, BMO Harris Bank, Indianapolis Northeast Region Directors Michael C. Marhenke, iAB Financial Bank, Fort Wayne Gregory Maxwell, Farmers State Bank, Mentone Michael S. Zahn, First Federal Savings Bank, Huntington Northwest Region Directors Patrick Duffey, State Bank of Burnettsville Karen I. Miller,The Farmers Bank, Frankfort Arden L. Cramer, Logansport Savings Bank Southeast Region Directors George W. Ferriell, Bath State Bank Archie M. Brown Jr., MainSource Financial Group, Greensburg Dennis Wayman, State Bank of Medora Southwest Region Directors Kurt D. Rosenberger, Our Community Bank, Spencer Matthew W. Howrey, North Salem State Bank Clay W. Ewing, German American, Jasper IBA Staff President & Chief Executive Officer ........................................................... S. Joe DeHaven ExecutiveVice President .............................................................. Paul W. Freeman, CAE ExecutiveVice President .................................................................. Amber R.VanTil, JD Vice President–Meetings & Events ............................................ Christina M. Bennett, CMP Vice President–Government Relations ........................................................... Dax Denton Vice President–Products & Services ................................................................. Rod Lasley Vice President–Education & Training ........................................................... Laurie A. Rees Vice President–Communications .................................................................. Laura Wilson Events & Products/Services Assistant .............................................................. Susan Clark Education Meeting Coordinator ................................................................. Marcy Borden Education Meeting Coordinator ................................................................ Elizabeth Kilty Staff Accountant ....................................................................................... Timothy Fry IT and Facilities Manager ...................................................................... Tracy Wainscott Administrative Assistant ........................................................................... Michelle Long Government Relations & Communications Office Manager ............................ Joshua A. Myers Email addresses: First initial of the staff member’s first name plus last name; example: jdoe@indianabankers.org Please send news releases to: IBAcommunications@indianabankers.org
TABLE OF CONTENTS VOLUME 99 NO. 10 6925 Parkdale Place Indianapolis IN 46254-4673 Phone: 317-387-9380 Fax: 317-387-9374 Twitter @indianabankers www.indianabankers.org Publisher: S. Joe DeHaven Editor: Laura Wilson Advertising: Rod Lasley Email news releases to: IBAcommunications @indianabankers.org Hoosier Banker (ISSN 0018-473X) is published monthly by the IBA Service Corp., a subsidiary of IBA Holding Company Inc., that is a wholly owned subsidiary of the Indiana Bankers Association. The magazine invites news from IBA members. Copy deadline: first of the month preceding publication. Advertising: Rates available upon request or online at www.indianabankers.org. Advertisers should provide electronic PDFs by the 15th of the month preceding publication. Hoosier Banker advertising is available to members and associate members of the Indiana Bankers Association only. Subscriptions: Hoosier Banker subscriptions are provided free of charge exclusively to members and associate members of the Indiana Bankers Association. Public access to Hoosier Banker Digital is available at www.indianabankers.org. 5 Hoosier Banker octoBer 2015 CONVENTION COVERAGE 10 NEW HORIZONS: IBA ANNUAL CONVENTION 2015 Christina M. Bennett, IBA 12 IBA 2015:AYEAR OF ACHIEVEMENTS Larry W. Myers, First Savings Bank, Clarksville 14 LOOKING FORWARDTO ANOTHERYEAR OF SUCCESS IN 2016 Michael H. Head, First Federal Savings Bank, Evansville 16 CONVENTION PHOTO COVERAGE FEATURES 6 PRESIDENT’S PONDERINGS S. Joe DeHaven, IBA 8 IBA CALENDAR OF EVENTS 22 FLD BUILDS A NEW BRAND OF LEADER Dax Denton, IBA 26 THE DANGERS OF A CAPTIVE REGULATOR Frank Keating,ABA 28 THE UNAVOIDABLE TRUTH Camden R. Fine, ICBA PSP SHOWCASE 20 KNOWTHATYOUR COLLATERAL IS PROTECTED Rod Lasley, IBA OPERATIONS / TECHNOLOGY 30 SEVEN STEPS TO STEERING CLEAR OF THE UDAAP TRAP Amber Goodrich, CSI DEPARTMENTS 24 COMPLIANCE CONNECTION Brett J.Ashton, Krieg DeVault LLP 25 ASSOCIATE MEMBERS’ CORNER 25 VIDEO BONUS 27 FROM THE BOARD ROOM 29 HONORABLE MENTIONS 32 ANNIVERSARY MILESTONES 33 BANKING ON COMMUNITY 34 BANKERS ON THE MOVE 38 ADVERTISERS INDEX More than 500 attendees participated in the 2015 IBA Annual Convention. NEW HORIZONS
6 Hoosier Banker October 2015 FEATURE President’s Ponderings S. Joe DeHaven, President & Chief Executive Officer, Indiana Bankers Association Last May my daughter qualified for and was confirmed as a minister of the United Methodist Church. Over the next three years, she will be working toward ordination as a deacon, focusing on her faithbased counseling practice, without affiliation to a particular church. Recently, however, she was asked to deliver the sermon at the church that she and her family have been attending for the past 15 years or so. It really struck me when she was introduced as the Reverend Jill Buckler, as I had never heard my daughter introduced that way. Her message focused on the importance of the church family, and how these family members become interwoven in support of each other. As an analogy, she compared this interconnectedness to the coastal redwoods of Muir Woods, just outside of San Francisco. Those magnificent trees can grow up to 350 feet tall, but their roots only extend about 10 feet deep. The reason this shallow root system can support such massive trees is that the roots of the individual trees intertwine to support each other. Indeed, a coastal redwood cannot live in isolation, as it relies on the intertwining of its roots with the roots of others in order to survive … much as members of a church family support each other and rely on each other. I was proud of my daughter’s sermon and her beautiful delivery of it. As I sat listening to her wisdom, I could not help thinking that the banking system is similar to, yet very different from, those coastal redwoods. The similarity is in the interconnectedness of the root system of banking. We are reliant on each other and support each other in many common issues. The payment system is a collective system. The lending function, through loan participations, is a collective system. Data processing is done collectively by a dozen or so companies, which provide the needed systems. The ATM system requires cooperation among all banks. The bank trade associations, such as the Indiana Bankers Association, came into being through the collective efforts of banks. Much banker training is delivered through these associations, as well as government relations outreach. In other words, banks and bankers band together to work for common causes that strengthen all, much like the coastal redwoods and strong church families. However, we are different from the coastal redwoods and church families, because our roots run profoundly deep within individual communities. While we are interconnected to our communities, banks tend to be the cornerstone institutions, without which economic development would not occur. In many communities, the bank and bankers are the leaders of efforts to promote civic, cultural and arts lifestyles. The depth of bank roots in community after community cannot be questioned. I have witnessed this dichotomy in the banking business for over four decades. It is somewhat baffling that we can band together to fight off common threats one day, yet go out and compete head-to-head with each other the next day. I know that some level of this occurs in every industry, but I have not witnessed it to the same level in other businesses as I have in banking. This is what I find so interesting about the work that I do. It is an honor to serve the banking professionals who are willing to join hands and share everything with each other to improve their respective communities, while at the same time competing for the same customers. It is an honor to represent these men and women of high integrity, who consistently place the interests of community and staff above all else. I am proud of my daughter and thankful that she has found her calling in life. Even though her calling and mine appear to be much different, there are many similarities. I hope she will remember the lesson she taught so well about the coastal redwoods and will continue to apply it to her church family. And may she be as blessed in her calling as I have been in mine! Lure in your prospects through strategic advertising in Hoosier Banker magazine, the flagship publication of the Indiana Bankers Association. Hoosier Banker is distributed to more than 6,500 subscribers monthly, with a pass-along readership exceeding 15,000. Its subscriber base includes all banks and thrifts headquartered in Indiana, along with non-Indiana banks that have a presence in Indiana. They won’t bite without the bait ... For details, contact Rod Lasley at 317-387-9380, rlasley@indianabankers.org.
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CALENDAR UPDATE Calendar of events Register online at indianabankers.org/education-events The IBA Center for Professional Development is located at 6925 Parkdale Place, Indianapolis. Phone: 317-387-9380 Twitter: @IndianaBankers 8 Hoosier Banker October 2015 Alternative Delivery Channels … Available at your convenience via Webinar, CD-ROM or On-Demand Leadership Development Program: Session 4 – Who Dares,Wins Oct. 14-16 – Wooded Glen Retreat & Conference Center, Henryville ACH Rules and Payment Systems Update Oct. 15 – IBA Center Marketing Director Forum Oct. 20 - IBA Center IRA School: Basic Issues and Intermediate/Advanced Issues Oct. 20-21 - IBA Center Consumer Loan Documentation Oct. 21 – IBA Center Commercial Loan Documentation Oct. 22 – IBA Center IT Officer and Operations Officer Forum Oct. 22 - Group 1 - IBA Center Oct. 23 - Group 2 - IBA Center Flood Insurance Review and Update Oct. 26 – IBA Center Internal Audit and Risk Management School Oct. 27-28 - IBA Center Bank Audit Committee Responsibilities Oct. 29 - IBA Center Certified Teller Program:Today’s Teller -The Banker Nov. 2 - Courtyard by Marriott, Lafayette Nov. 4 - Hotel Fort Wayne Nov. 5 - Hillcrest Country Club, Batesville Nov. 9 - Huntingburg Event Center Nov. 10 - Best Western Plus, New Albany Branch Management Series: Session 4, Raising the Bar for Sustainable Growth Nov. 3 - IBA Center CBC Compliance School - Deposit/ Operations Module Nov. 4-5 - IBA Center Future Leadership Division Conference -The Next ‘Now’ – Building a New Brand of Leader Nov. 4-5 - Renaissance Indianapolis North Hotel, Carmel Fundamentals of Commercial Lending Nov. 9-10 - IBA Center Human Resource Directors Forum Nov. 10 - IBA Center Advanced Cash Flow Nov. 12 - IBA Center Asset-Based Lending Nov. 13 – IBA Center Community Bankers for Compliance Series - Session 4: Lending Regulations - DOD Ruling, the SAFE Act, Reg. O, Dodd - Frank Changes to Reg. Z,ARM Lending Nov. 16 - Courtyard by Marriott, Fort Wayne Nov. 17 - IBA Center Nov. 18 - IBA Center Home Mortgage Disclosure Act Seminar Nov. 30 - IBA Center Midwest Agricultural Banking School Nov. 30-Dec. 3 - Purdue University, West Lafayette Lenders Comprehensive Guide to Mortgage Lending Dec. 1 - IBA Center Trust Officer Forum Dec. 2 - IBA Center Agricultural Clinic Dec. 3 - Purdue University, West Lafayette Advanced Commercial Lending School Dec. 10-11 – IBA Center CCBTP Certification Program Dec. 15-16 – IBA Center Branch Management Series: Session I, Managing a Successful Branch Jan. 19, 2016 - IBA Center Retail Banking Forum Jan. 20 - IBA Center BSA Graduate School Jan. 20-21 - IBA Center Risk Management Officer Forum Jan 21 - IBA Center Community Bankers for Compliance Series - Session I Feb. 8-10 - IBA Center Chief Financial Officer Forum Feb. 16 - Group 1 - IBA Center Feb. 19 - Group 2 - IBA Center Auditing Integrated Disclosures Feb. 17 - IBA Center Senior Lender Forum Feb. 17 - Group 1 - IBA Center Feb. 18 - Group 2 - IBA Center Call Report: Review and Update Feb. 18 - IBA Center IRA Basics Feb. 23 - IBA Center Marketing Directors Forum Feb. 23 - IBA Center Advanced IRA Review and Update Feb. 24 - IBA Center Oct. 14 - BSA Compliance Series: Identifying, Reporting and Monitoring Suspicious Activity Oct. 14 - E Sign and UETA:AreYou in Compliance? Oct. 15 - New Security Officer Training: Responsibilities, Best Practices and Skill-Building Tools Oct. 19 - For Sales Managers: Seven Habits of Highly Effective Sales Teams Oct. 20 - Ten Simple Teller Rules to Prevent Major Loss Oct. 20 - New Account Series: Opening Accounts for Minors: Ownership, Access and Transactions Oct. 21 - Accounting Developments Update: Recent Issues, and What’s on the Horizon? Oct. 21 - Commercial Loan Applications - What Can Go Wrong? Oct. 27 - Emerging Leaders Series: Key Leadership Strategies for Growth, Profitability and Retention Oct. 27 - Twenty-Five Lessons Learned for Nationwide Safe Deposit Box Litigations - 2015 Update Oct. 28 - Network Security 101:A Comprehensive Overview Oct. 29 - Maintaining Compliant FDIC Records, Including Related Email and Social Media Retention Rules Oct. 30 - Clarifying the Confusion:TRID Issues and FAQs Nov. 2 - Branch Transformation Series - Part 1 Nov. 3 - Directors Series: Interest-Rate Risk Policies, Considerations and Consequences:What Directors Should Know Nov. 3 - Opening Accounts for High-Risk Customers Nov. 4 - Robbery Procedures, Counterfeit and Fraudulent Items Nov. 4 - Form 1099 Reporting:Third-Party Vendors, Foreclosures, Debt Forgiveness and More Nov. 4 - Lending 101 Nov. 5 - Analyzing the Purchase of Existing Businesses Nov. 5 - Remote Deposit Capture Update and Issues for Commercial, Consumer and Mobile Banking Nov. 5 - Analyzing Tax Returns for Mortgage Decisions Nov. 9 - CFPB Final Amendments for Small Creditors and Rural or Underserved Areas, Effective Jan. 1, 2016 Nov. 9 - Branch Transformation Series - Part 2 Nov. 10 - Regulatory Requirements for the Board and Senior Management Nov. 10 - Ratio Analysis to Determine Financial Strength Nov. 10 - IRA Audit and Compliance Nov. 12 - Navigating the Top 50 Most Important Safe Deposit Operating Procedures - 2015 Update Nov. 12 - IRA Reporting, Common Issues and Error Resolution Nov. 12 - Core Management Skills Nov. 13 - Preparing for the Impact of Same-Day ACH Nov. 16 - How to Sell in any Banking Market Nov. 16 - Branch Transformation Series - Part 3 Nov. 17 - Mortgage Loan Originator Required Training Series Nov. 17 - Basic Banking for New Employees Part 2: Regulatory Issues, Exams, Audits Nov. 18 - Officer Calling: Prospecting, Preparing and Presentation Nov. 18 - Robbery Prevention,Apprehension and Recovery Nov. 18 - Critical Issues of Certificates of Deposit (CDs) Nov. 19 - Emerging Leaders Series: Managing Credit Risk Nov. 19 - What to Do When a Customer Dies Nov. 23 - Regulatory and Legal Risks of Overdraft Protection: Recent Issues and Best Practices Nov. 24 - Nuts and Bolts of Effective Metro 2 Credit Reporting via e-OSCAR Nov. 30 - CECL, the ALLL and FASB’s Proposed Standard for Recognizing Credit Impairment:What’s Changing, and Why Preparing Now Is Critical Dec. 2 - Reg. E - How Expensive Is a Compliance Mistake? Dec. 2 - Advanced ACH Specialist Series: Reg. E Error Resolution Rules vs. NACHA Operating Rules: Obligations, Consumer Disputes and Case Studies Dec. 2 - Excel Explained: Introduction to Spreadsheets Dec. 3 - Notary Public Dec. 3 - Call Reporting for New Preparers and Reviewers Dec. 4 - Examining the Proposed Federal Changes to Overtime Pay Exemptions and the Potential Impact to Community Banks Dec. 8 - New Business Account Interview Dec. 8 - BSA Special Risks: Policy, Law Enforcement and Regulator Issues Dec. 9 - UCC 3 and 4 Issues for Tellers Dec. 9 - Managing Accounts and Records for Nonresident Aliens: Opening, Identifying, Monitoring and Tax Reporting Dec. 10 - Safe Deposit Issues: Drilling, Unpaid Rent, Death and Unclaimed Property Dec. 10 - Accounting Principles for Lenders Dec. 10 - BSA Red Flags for Money Laundering Dec. 15 - Opening Fiduciary Accounts Dec. 15 - Opening Donation, Benevolent and Other Accounts for Nonprofit Organizations and Corporations Dec. 16 - The Loan Review Process: Important Steps Dec. 16 - Exercising the Bank’s Right to Setoff on Deposit Accounts and Loans Dec. 17 - Appraisals and Evaluations: Guidelines, Regulatory Concerns and FAQs Dec. 18 - BSAYear-End Wrap Up Dec. 18 - Revised TRID Mortgage Exam Procedures: Reviewing Changes Effective Sept. 15, 2015
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10 Hoosier Banker October 2015 This year 506 attendees gathered at the French Lick Resort for education and networking at the 2015 IBA Annual Convention. This year’s theme, “New Horizons,” reflected on boundless future opportunities for the banking community. Convention events kicked off Sunday with a perfect day for golf. Players enjoyed the tournament, as well as the many contests and giveaways throughout the day. The winning foursome, with a score of 56, was Clip Wamsley, Mark Wamsley, George Wamsley and Keven Crawford of The First National Bank, Monterey. The Wamsleys generously donated their winnings of $400 to the Indiana BANKPAC. Later that evening, the “Escape to the Islands” welcome party took place outdoors on the patio. Guests enjoyed a Caribbean buffet, and mixed and mingled to the relaxing sounds of steel drum music. Monday, Sept. 14, commenced with business sessions in the morning and presentations continuing through late afternoon. We were honored with the presence of U.S. Sen. Joe Donnelly, who offered a congressional update and fielded questions from the audience. Other topics covered on Monday included cybersecurity issues and communicating with millennials. The Future Leadership Division (FLD) silent auction took place Monday evening. Rep. Woody Burton, District 58, reprised his traditional role as auctioneer for the live portion of the auction. Total funds raised from the silent auction and BANKPAC sweepstakes came to nearly $76,000 to benefit the Indiana BANKPAC. Tuesday, Sept. 15, resumed with networking and learning opportunities, including an interactive session with a panel of regulators, representing the Federal Deposit Insurance Corp., Indiana Department of Financial Institutions, Office of the Comptroller of the Currency, and the Federal Reserve Bank of Chicago. The final event of the Convention, the Chairman’s Banquet, took place Tuesday evening. After dinner, IBA Chairman Larry W. Myers, First Savings Bank, Clarksville, inducted new Forty Year Club members, presenting each with a lapel pin. He also recognized all Forty Year Club members in attendance, as well as past presidents and chairmen of the Association. Myers passed along the chairman’s gavel to incoming chairman Michael H. Head, First Federal Savings Bank, Evansville. Afterward Tim Berry, director of the Indiana Department of Financial Institutions, presented Myers with a Sagamore of the Wabash award from Gov. Mike Pence. Amber R. Van Til, IBA executive vice president, then made a special presentation to Indiana Rep. Edward Clere, District 72, honoring him as IBA Legislator of the Year. Closing out the Convention were prize drawings. Richard E. Belcher, First Federal Savings Bank, Rochester, won the Indiana BANKPAC sweepstakes ‒ an all-expenses-paid trip for two to Rome ‒ sponsored by The KeyState Companies. The grand prize drawing, sponsored by IBA Service Corporation, went to William W. Harrod, First Harrison Bank, Corydon, whose wife Kim looked stunning wearing the diamond necklace prize. Thank you to Convention participants and sponsors* for making this year’s event a success. Next year the IBA Annual Convention is scheduled for Sept. 11-13, 2016, and will again be held in French Lick. We hope to see you there! t *See page 15 for sponsor listing. New Horizons: IBA Annual Convention 2015 About the Author Christina M. Bennett, CMP, is vice president-meetings & events of the Indiana Bankers Association. She can be reached at 317-387-9380, email: cbennett@ indianabankers.org. CONVENTION COVERAGE
11 Hoosier Banker October 2015 The Indiana Bankers Association appreciates the support and leadership of the Indiana banking community. An important function of each IBA Annual Convention is to conduct official business. At the Monday business-meeting luncheon, new officers for 2016 were elected. Also at the meeting, regional directors for 2016, who already had been elected through voting by members in each region, were recognized. In addition, Chairman Larry W. Myers recognized four current directors who will be retiring from the IBA board at year-end 2015 and presented each with a plaque commemorating their service. New Officers Elected Effective Jan. 1, 2016 Chairman – Michael H. Head, president, chief executive officer and a director of First Federal Savings Bank, Evansville; First vice chairman – Annette M. Russell, president and chief executive officer of Security Federal Savings Bank, Logansport; Second vice chairman – Clay W. Ewing, president of German American Bancorp, Jasper. Other Board Elections Effective Jan. 1, 2016 Michael C. Marhenke, president and CEO, iAB Financial Bank, Fort Wayne ‒ representing the northeast region, first term; Lori S. Heath, president and CEO, The Farmers State Bank, Brookston ‒ representing the northwest region, first term; George W. Ferriell, president and CEO, Bath State Bank ‒ representing the southeast region, second term; Kent L. Parisien, president and CEO, The First National Bank of Odon ‒ representing the southwest region, first term; Kristin Marcuccilli, senior vice president and chief operating officer, STAR Bank, Fort Wayne ‒ representing the IBA Future Leadership Division. Board Retirements Effective Year-End 2015 Lucas White, vice president and director, The Fountain Trust Company, Covington ‒ representing the IBA Future Leadership Division for two years; Patrick Duffey, chairman, president and CEO of State Bank of Burnettsville ‒ representing the northwest region for six years; Kurt D. Rosenberger, president and CEO, Our Community Bank, Spencer ‒ representing the southwest region for six years and on the executive committee for two years; David W. Heeter, CEO and director of MutualBank, Muncie – service since 2010 as a northeast region director, second vice chairman, first vice chairman, chairman and immediate past chairman. Annual Convention Elections FortyYear Club Inductees The following IBA members were presented with Forty Year Club* lapel pins at the Annual Convention: Steve Bechman, Horizon Bank, NA, Michigan City Sherry Holiday, Farmers State Bank, LaGrange Cynthia A. Lindauer, Spencer County Bank, Santa Claus Gregory Maxwell, Farmers State Bank, Mentone Roger S. Miller, MutualBank, Muncie G. Joseph Morgan, The New Washington State Bank, Charlestown Marjorie D. Noll, Farmers State Bank, LaGrange Gregory W. Springer, Farmers & Merchants Bank, Boswell Judy Swift, Greenfield Banking Company * A full listing of all Forty Year Club members is scheduled to appear in the November Hoosier Banker.
12 Hoosier Banker October 2015 CONVENTION COVERAGE Welcome to the 2015 Annual Convention of your Indiana Bankers Association. It has been my privilege to serve as your 2015 board chairman, and I would like to update you on your association. Membership includes all of the 117 banks and thrifts headquartered in Indiana, 21 banks and thrifts headquartered outside of Indiana, and four trust companies, for a total of 142 financial members. We are also proud to have 185 associate members who support the IBA financially with the purchase of booth spaces, sponsorships and advertising throughout the year. IBA remains financially strong, with about $6.3 million in cash and investments and a net worth of around $6.7 million. IBA has no debt and is one of the most financially secure state bankers associations in the country. In 2014 IBA had a net income of $2,011,226, of which $1,723,431 was from entrepreneurial efforts in New Markets Tax Credits, resulting in a net operating profit of $287,795. You may recall that the IBA is the only trade association in the country to have ever been granted an allocation of New Markets Tax Credits. This entrepreneurial pursuit of over a decade ago is now culminating over the next couple of years and will result in about $8 million to the IBA. The U.S. Department of the Treasury has a two-year clawback of the tax credits following the closing of each transaction, and the IRS has a three-year window to audit and challenge a tax return. Consequently your board of directors wants to be cautious in our use of these funds. By the year 2020, all of these dates will be behind us, and plans can then be made and implemented regarding the best use of these funds to support the industry in Indiana. Our annual audit from CliftonLarsonAllen resulted in a clean audit. In addition we asked CliftonLarsonAllen to perform an audit of our operations processes, to make sure we did not unwittingly breach any of our system’s integrity resulting from our data base management system conversion in 2014. That audit, too, came back clean. There were also audits of our 401(k) by the IRS, of property taxes by the Marion County auditor, and of the Group Health Insurance Trust by the Department of Labor. I am pleased to report that all came back clean and require no action on our part, and no monetary penalties. At the Statehouse this year, we were able to fight off attempts to require lenders to maintain abandoned real estate during the foreclosure process, even though it is not owned by the lender during this process. We were also able to support legislation that clarified that funeral trusts could be invested in third-party investments and passed legislation that clarifies that only the state legislature has the power to enact the rules for foreclosures, not local government. A crowning IBA 2015: A Year of Achievements About the Chairman Larry W. Myers, 2015 chairman of the Indiana Bankers Association, is president and chief executive officer of First Savings Bank, Clarksville. He additionally serves on the bank’s board of directors and as president of the First Savings Charitable Foundation. Myers joined First Savings Bank in 2005 as chief operating officer and was named to his current position in 2006. He previously served since 1982 with National City Bank, most recently as area president of Southern Indiana. Myers is a member of the St. Louis Federal Reserve Community Depository Institutions Advisory Council and has served the American Bankers Association on the Community Bank Council and Mutual Council. He currently is chairman of the Lincoln Heritage Council of Boy Scouts of America and is active with the One Southern Indiana-Chamber of Commerce. A certified trust financial adviser, Myers earned bachelor’s and MBA degrees from the University of Kentucky, has completed the Graduate School of Banking of the South and the Cannon Trust School, and holds Series 7 and Series 66 licenses. He previously served the IBA as first vice chairman, second vice chairman and southeast region director. He will continue service to the IBA board of directors in 2016 in the capacity of immediate past chairman. Annual Convention address by: Larry W. Myers First Savings Bank, Clarksville IBA Chairman 2015
13 Hoosier Banker October 2015 numerous events. Thank you for this opportunity. t achievement was to protect the reserves that have accumulated at the Indiana Department of Financial Institutions and to shine a light on concerns regarding its budget. In the education area, the IBA holds about 400 webinars each year, plus 200 seminars, schools, series, conferences and forums annually. That is more programming than any other state bankers association in the country, and does not even count the IBA Mega Conference, which is the largest event hosted by any state bankers association nationwide. As a matter of fact, this year we sold over 90 booth spaces and had a record attendance of 1,276 people at Mega. We continue to increase our emphasis on future leadership programming and have seen significant growth in this area. This year we initiated a Future Leadership Division “Day at the Statehouse” that drew about 50 young bankers from across the state. They talked with their legislators about the issues of the day and learned a great deal about the legislative process from presenters. No doubt, this program will become a regular offering of IBA. IBA is blessed to have one of the most talented staffs in the association world. Several are 25+ year employees and are recognized throughout the country as industry leaders. This year staff received the following recognitions: Chris Bennett and Susan Clark won the Indiana Society of Association Executives award for outstanding convention. This is the 12th consecutive year that IBA staff have been recognized for awards by ISAE. Joe DeHaven completed his year as chairman of the board of trustees of the Graduate School of Banking and the Prochnow Educational Foundation. He was the first GSB alum to chair the board. Also this year, Amber Van Til was promoted to executive vice president of the IBA. As you may recall, last year when I was elected to be chairman, I indicated that I had two goals for my term. First was that we would need two buses in Washington, D.C., to transfer all of the Indiana bankers who would be in attendance at our annual lobbying trip. That translated into 55 bankers and 80 total people in attendance. As of now, we are at 57 bankers and 88 total people. The second goal was to visit every Indiana-headquartered bank president at his or her office.* I am pleased to report that, as of two weeks ago, I completed that goal. It was a lot of work, and I want to thank Rod Lasley, who assisted me in visiting the banks north of Indianapolis. I’ll share some stories about the visits tomorrow evening at the Chairman’s Banquet. This year has been incredible. It has been an honor to represent you throughout the country at *Note: Larry Myers will be sharing insights about his visits to bank presidents in the November issue of Hoosier Banker. Larry W. Myers, 2015 IBA chairman, presides at the Annual Convention. {Cultivate.} When tended with care, the tiniest seeds will produce robust plants. The same is true for ideas that help your bank succeed. The broad experience of Plante Moran’s financial institutions practice will enrich your team with the expertise needed to harvest a bright future. Advisors tending to the seeds of growth are a higher return on experience. Robert Bondy 616.643.4013 banks.plantemoran.com Michael Stearns 269.567.4614
14 Hoosier Banker October 2015 a building to purchase, we may lease space for a period of time. Whatever happens, rest assured that we will keep our training programs near the beltway, whether leasing or buying. Hoosier Banker magazine will celebrate 100 years of continuous monthly publication in January of 2016. Some state bankers associations have gone to an electronic version only, and many have abandoned a monthly publication for a bimonthly or quarterly publication. While we may consider those options at some point in the future, I think it is amazing that Hoosier Banker has reached such a milestone. Laura Wilson has been responsible for its publication for over 28 years, meaning that she has managed over 340 of those issues during her time with the IBA. On Dec. 11, 2016, something very important will occur when Indiana celebrates its 200th year of statehood. A Bicentennial Commission was formed several years ago to begin planning how to celebrate this milestone. The celebration will begin on Dec. 11, 2015, and will continue for a year. Many activities have been planned. I am sure that many of you are involved throughout the state, as all of InI am sincerely honored and humbled to be elected as your 2016 board chair, and I thank you for the confidence you have shown in electing me. I assure you that I will give my very best effort in guiding the association through the next year. During the next year, there are a few items that we know we will be working on. First, the building that houses the headquarters of the IBA has been outgrown. Consequently the board has determined that we will try to sell that building and, at the same time, search for a building to purchase. However if our current building sells, and we have not identified About the Chairman-Elect Michael H. Head, first vice chairman of the Indiana Bankers Association, is president, chief executive officer and a director of First Federal Savings Bank, Evansville, which he joined in 1980. He has served as a board member of the University of Southern Indiana Foundation, on the advisory board of the University of Southern Indiana School of Business, and has been active with Deaconess Health Systems, Habitat for Humanity of Evansville and the St. Mary’s Medical Center Foundation. Head also serves as a member of the Independent Community Bankers of America tax committee. He earned a bachelor’s degree from the University of Southern Indiana and an MBA from the University of Evansville. Head has served on the IBA board as second vice chairman and as a southwest region director; he has been elected to serve as incoming IBA chairman, effective Jan. 1, 2016. Looking Forward to Another Year of Success in 2016 CONVENTION COVERAGE Annual Convention address by: MichaeL h. head First Federal Savings Bank, Evansville IBA Chairman-Elect 2016 Retaining top executive talent is key to success and peace of mind. That’s why we focus on simplifying the complicated to facilitate winning solutions for both you and your most valuable employees. After all, our best talent is helping you keep yours. Read our Benefit Plan Study @ www.ebn-design.com IsYour Most Valuable Banker Eyeing Free Agency? BOLI & Deferred Compensation Experts 800.780.4EBN ebn-design.com ©2015 EBN
15 Hoosier Banker October 2015 Break Sponsors Crowe Horwath LLP Donaldson Capital Management One America, AUL Retirement Services Profit Resources Inc. Breakfast Sponsor IBA Insurance Agency Inc. Chairman’s Banquet Sponsor IBA Group Insurance Trust, Insured by Anthem Euchre Tournament Sponsor Renninger & Associates LLC Golf Beverage Cart Sponsors BITS Network Professional Bank Services Inc. Golf Hole Sponsors Agresta, Storms & O’Leary PC Allied Solutions BKD, LLP BMO Harris Bank Crowe Horwath LLP Floodplain Consultants Gibson Teldata Inc. Lee & Mason Financial Services McGladrey LLP The SHAZAM Network TransFund ThankYou, 2015 Convention Sponsors! Golf Tournament Sponsor Krieg DeVault LLP Grand Prize Giveaway Sponsor IBA Service Corporation Hospitality Suite Sponsors Agresta, Storms & O’Leary PC Executive Benefits Network K4 Architecture + Design Kilpatrick Townsend & Stockton LLP Profit Resources Inc. Promontory Interfinancial Network LLC The SHAZAM Network Tilson Title Center of Indiana LLC Travelers UMB Bank Virtual Innovation Inc. Indiana BANKPAC Silent Auction Dinner Sponsor The KeyState Companies Indiana BANKPAC Sweepstakes Sponsor The KeyState Companies Luncheon Sponsors Federal Home Loan Bank of Indianapolis ICBA Services Network Printed Materials Sponsors Bose McKinney & Evans LLP Great Lakes Capital Fund Infotex The SHAZAM Network TIB – The Independent BankersBank Reception Sponsors ADVISA Associated Bank The Baker Group BancMac/Community Banc Mortgage Corporation Bankers’ Bank BOSC Inc. Equias Alliance Executive Benefits Network Federal Home Loan Bank of Indianapolis Investors Title Insurance Company Monroe Shine & Co. Inc. Plante Moran Professional Bank Services Inc. SunTrust Robinson Humphrey Wilmington Trust NA Young & Associates Inc. Welcome Gift Sponsor Great Lakes Capital Fund Welcome Party Sponsor Keefe, Bruyette & Woods Michael H. Head, incoming IBA chairman, accepts the leadership gavel from Larry W. Myers, outgoing chairman, at the Annual Convention. diana’s 92 counties have plans. One of the statewide efforts will be the distribution of a bicentennial commemorative medallion. The Commission approached the IBA about being the title sponsor for the medallion, and our board approved that investment. A committee has been appointed to work with the commission on the logistical details for distribution. Soon you will be receiving information about this effort, which will be an ideal way to tie your bank and the banking industry to this momentous occasion. While the above items are known, there will, of course, be some surprises. Usually much of that unknown comes from the legislative process, in both Indianapolis and Washington, D.C. We will deal with whatever arises. One thing I know is that I can count on is your support. IBA members have stepped up in the past few years to be among the nation’s leaders in support of both grassroots efforts and contributions to Indiana BANKPAC. The continued efforts in those two areas, along with a strong IBA lobbying team, provides the very best opportunity for our continued success at the Statehouse and turning the corner toward success in Washington. I pledge to you, also, that I will do my best to continue to keep our dues level low. IBA has not had a dues increase since the merger with the Community Bankers Association of Indiana nine years ago. Your IBA is only about 20 percent duesdependent for its budget, less than half what most other state bankers associations run. I look forward to representing you and this important service we all provide, and I look forward to working with the experienced and talented board that you have elected. I am excited and proud to accept the challenge of leading the IBA in 2016. Thank you for that opportunity. t
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20 Hoosier Banker October 2015 PSP SHOWCASE Most bankers can recall receiving calls from customers who have totaled their cars or lost their homes to fire. After verifying your customer is safe, your next step is to verify that his or her insurance on your loan collateral (car or house) is current. There are a few moments of apprehension as you look through the file to find the policy and see that it is in effect. Rather than having to experience this feeling of uncertainty or dismay, if the policy is expired, let a wellestablished professional alleviate your concerns. Lee & Mason Financial Services Inc., an IBA Preferred Service Provider, has been helping banks in these various areas of collateral protection for over 50 years. A family-owned business, Lee & Mason is recognized as one of the pioneers in vendor single interest line of insurance. The company operates as a fullservice program administrator handling underwriting, quoting and binding, policy issuance, premium collection, and complete claims processing and reporting. Lee & Mason represents several insurance companies, with all of the carrier partners being “A” rated by A.M. Best. The lines of business that banks find most critical are blanket lender’s single interest (LSI); blanket mortgage hazard coverage; and lender-placed mortgage hazard coverage, with or without insurance tracking. In the non-real estate collateral area, blanket LSI protects the lender from uninsured damage to the vehicle or loan collateral, occurring before repossession or for a limited time after repossession. It also covers the lender against loss of collateral when the borrower and vehicle cannot be located, or when the vehicle has been seized by a public authority. Additionally it protects the lender from an error or omission in the process of securing its interest in the loan collateral. The major benefits of this offering is the complete coverage of the loan portfolio, no insurance tracking, no administrative burden, and the premium may be passed on to the borrower. For the loan portfolio that is collateralized by real estate, Lee & Mason offers two options for banks. Blanket mortgage hazard coverage provides property coverage on your entire mortgage portfolio, including residential, commercial and mobile homes, and can include second mortgages and equity loans. This coverage also can be used for real estate owned (REO) portfolios. The blanket coverage eliminates the need for insurance follow-up after closing and the need to track and report individual properties and policies. The second option for real estate collateralized loans is lender-placed mortgage hazard coverage. This coverage provides the bank with property coverage on specific loans the borrower fails to insure. It, too, covers residential, commercial and mobile homes; additionally, it is available for second mortgages, equity loans and REO portfolios. As with the other policy options, the cost of this coverage can be passed on to the borrower. As your bank is continually asked to track more information and provide more reports to regulatory agencies, let Lee & Mason take care of the tracking and reporting of insurance on your loan portfolio. This is one area where you can utilize an expert and eliminate worry about insurance coverage for that next emergency phone call from your customer. For more information about Lee & Mason Financial Services Inc., contact Rod Lasley at 317-387-9380 or rlasley@indianabankers.org; or contact Matt Washer or Jim Reilly of Lee & Mason at 502-894-0899, email mwasher@leeandmason.com or jreilly@leeandmason.com. t About the Author Rod Lasley is vice president-products & services of the Indiana Bankers Association, and also serves as president of the for-profit companies owned by the IBA. He can be reached at 317-387-9380, email: rlasley@indianabankers.org. Know That Your Collateral Is Protected
Congratulations 2015 Graduates from Indiana We congratulate you on completing the rigorous 25-month program and joining the more than 20,000 alumni who have gone on to leadership positions in their organizations, associations and the financial services industry. Best wishes for continued success! 5315 Wall Street #280, Madison, WI 53718 | Ph. 800-755-6440 | Please visit gsb.org Sponsored by: Educating Professionals, Creating Leaders Matthew Blair Terre Haute Terre Haute Savings Bank Scott Bucher Warsaw Lake City Bank W. Byrd Thorntown Home National Bank Chad Garber Indianapolis BKD, LLP Timothy Hogan Indianapolis Salin Bank Michael Kern Jasper German American Bancorp Curtis Metz Auburn Farmers & Merchants State Bank Lesley Neal Muncie MutualBank Stephen Perry Merrillville Centier Bank Peter Schmidt Berne First Bank of Berne William Spray Brownstown The Peoples Bank Brian Ternet Fort Wayne First Financial Bank Amber Van Til Indianapolis Indiana Bankers Association Nathaniel Woods Greenfield Ameriana Bank Kathleen Young Noblesville First Merchants Bank, NA
22 Hoosier Banker October 2015 GR SPOTLIGHT As we are all becoming increasingly aware, the future of your industry lies not only within your current leadership structure, but in the ability of the industry to develop young leaders to help move successes forward. The Indiana Bankers Association created the Future Leadership Division (FLD) several decades ago to help address this continuing challenge. The IBA believed then, as it does now, that our industry’s emerging leaders not only should have a vested interest in promoting the future of the banking industry, but an outlet where that motivation could be achieved. The purpose of the FLD is to cultivate emerging professionals within the Indiana banking industry by providing networking, volunteer and educational opportunities. The FLD, under the direction of the FLD board, is achieving this goal through several programs and activities offered throughout the course of the year. FLD events such as the FLD “Day at the Statehouse” and the upcoming FLD Annual Leadership Conference, scheduled for Nov. 5-6, are outstanding opportunities for those interested in a career in banking to further develop the relationships, awareness and the knowledge important to any leadership role, large or small, within financial institutions. FLD is an organization governed by a board and is membership-based. The membership component was instituted several years ago as a way to help identify, connect and involve our industry’s next generation of bankers. Of the many attributes to FLD membership, it has become an ideal way to stay engaged with other banking professionals from across the state. Networking and relationshipbuilding are priorities for the organization and will continue to be as it moves forward. In conjunction, FLD membership is an effective way to be engaged with the advocacy efforts of the IBA. As banking professionals and leaders, an FLD member can expect to be called upon to speak up and support our industry through grassroots contacts and direct lobbying efforts when necessary. These two opportunities are only two illustrations of the value of FLD membership. The FLD is actively seeking new members. Membership in the organization is free and available to employees of all IBA-member banks. Membership is open to all positions and roles within an institution. If you or someone you know would be interested in the opportunities available through the FLD, please contact Dax Denton, ddenton@indianabankers.org, or visit the IBA website at FLD Builds a New Brand of Leader About the Author Dax Denton is vice president-government relations of the Indiana Bankers Association. He can be reached at 317-917-8047, email: ddenton@indianabankers.org. Note: Registration is open for the FLD Annual Leadership Conference,“The Next Now: Building a New Brand of Leader,” scheduled for Nov. 4-5 at the Renaissance Indianapolis North Hotel in Carmel.View details and register online at indianabankers.org. Board president - Lucas White, The Fountain Trust Company, Covington Board vice president, Kristin Marcuccilli - STAR Bank, Fort Wayne Jay A. Baker, German American, Jasper Benjamin J. Bochnowski, Peoples Bank, Munster Craig Buse, Springs Valley Bank & Trust Company, French Lick Kirby Drey, Kentland Bank J. Todd Frossard, Your Community Bank, New Albany Anthony M. Gambaiani, Jackson County Bank, Columbus J. Daniel Maddox, Citizens State Bank, New Castle Andrew J. Saner, MainSource Bank, Greensburg Stephanie Schrage, Centier Bank, Merrillville Jeremy Siegle, Bank of Wolcott Melodie K. Yarnell, Jackson County Bank, Seymour Thank You to the Future Leadership Division Board of Directors indianabankers.org for additional details and membership registration information. It is critically important that our industry continue to focus on building the next generation of leaders. The IBA’s FLD is committed to doing just that. Will you join us? t
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