INSIDE Don Goetz leads DeMotte State Bank with timetested values. Story on page 9. Hoosier Banker SEPTEMBER 2015
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ABA National Agricultural Bankers Conference 2015 POSITIONTO TRANSITION How to Navigate Volatile Times October 25–28, 2015 Kansas City Marriott Downtown and Kansas City Convention Center Kansas City, Missouri Join ABA and bankers across the U.S. as we shed light on real strategies for a successful—and sustainable—transition from a predictable business climate to one with new challenges. KEYNOTE SPEAKER George Brett, thirteen time All-Star and Kansas City Royals Vice President of Baseball Operations FREE PRE-CONFERENCE SEMINAR A panel of experts, led by Dr. David Kohl, will help you navigate the commodity price rollercoaster. “NEW AG BANKER” TRACK New for 2015, the New Ag Banker track gives young bankers or bankers transitioning into the ag world a targeted conference experience. aba.com/AgConferenceIndiana Register today.
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. 9 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 septemBer 2015 COVER STORY 9 DON GOETZ: OLD-FASHIONED BANKERVALUES FEATURES 6 PRESIDENT’S PONDERINGS S. Joe DeHaven, IBA 8 IBA CALENDAR OF EVENTS 24 CONTINUAL CHANGE Camden R. Fine, ICBA 26 TAILORING RULES TO HELP BANKS SUCCEED Frank Keating,ABA 28 STATE DEPOSITS IN INDIANA FINANCIAL INSTITUTIONS PSP SHOWCASE 14 INFOTEX: ESTABLISHED EXPERT IN THE NEW CYBERWORLD Rod Lasley, IBA GR SPOTLIGHT 16 IBA REGIONAL MEETINGS CONTINUE TO GROW IN 2015 Amber R.Van Til, IBA DIRECTORS / SENIOR MANAGEMENT 20 DIVERSIFICATION OF BANK MUNICIPAL BOND HOLDINGS Dana Sparkman,The Baker Group OPERATIONS / TECHNOLOGY 22 POWERFUL WAYS ONLINE WEB PORTALS TRANSCEND THE BOARDROOM Bill Evers, CSI Secure Connect SECURITY / FRAUD 30 COMBATING FRAUD:WHAT HACKERS CANTEACHYOUR FINANCIAL INSTITUTION Ed O’Neill, PULSE DEPARTMENTS 15 HONORABLE MENTIONS 16 VIDEO BONUS 18 COMPLIANCE CONNECTION Krieg DeVault LLP 19 FROM THE BOARD ROOM 21 TAKING IT EASY 27 BANKING ON COMMUNITY 27 VIDEO EXTRA 29 ASSOCIATE MEMBERS' CORNER 31 NEW BRANCHES, BUILDINGS & OPENINGS 32 BANKERS ON THE MOVE Donald E. Goetz is president and chief executive officer of DeMotte State Bank.
6 Hoosier Banker September 2015 Amber R. Van Til, executive vice president of the Indiana Bankers Association, has completed the Graduate School of Banking at the University of Wisconsin (GSB). In operation since 1945, GSB provides advanced financial management education over the course of an intensive 25-month program. Van Til joined the IBA in 2002 as lobbyist for the Community Bankers Association of Indiana. She was promoted to vice president-government relations in 2005, to senior vice presidentgovernment relations in 2012 and to her current position in June 2015. Van Til is a graduate of the University of Indianapolis and earned a JD from the Robert H. McKinney School of Law. Also among IBA staff, S. Joe DeHaven, president and chief executive officer, and Rod Lasley, vice presidentproducts & services, have earned GSB diplomas. A complete list of Indiana graduates of the 2015 GSB will be available in the October Hoosier Banker. t FEATURE President’s Ponderings S. Joe DeHaven, President & Chief Executive Officer, Indiana Bankers Association Her name was Judy Angel ‒ “Mrs. Angel” to those of us fortunate enough to be her students. By the time I was a senior in high school, I had already been under her tutelage for a couple of years. During that senior year, Mrs. Angel would frequently admonish us with, “You are not ready for the real world!” Of course she was right, and of course we did not believe her. As a matter of fact, we laughed at her lack of confidence in us, though we all respected Mrs. Angel as a person and a teacher. We simply thought she was underestimating us and our station in life at the time. Less than a year later, at Ball State University, I was assigned to write a freshmen college theme paper about a blade of grass, or something like that. Finally I understood what Mrs. Angel meant, and I actually returned to my old high school to find her and report that she was absolutely correct in her assessment of us ‒ we weren’t ready for the real world! I even urged her to keep pounding that message home to her seniors. As an aside, whatever limited writing talent that I have today can be attributed to Mrs. Angel and that frustrating freshman writing class I suffered through in college. Recently I was reminded of Mrs. Angel when pondering one of the concerns identified during our strategic planning retreat a couple of years ago. IBA officers, directors and staff spent a significant amount of time trying to determine how we could help prepare the next generation of banking leaders, who would soon be standing at the helms of Indiana institutions. It was a valid concern two years ago and may still be, in some banks. However I am encouraged to have witnessed many times in the past couple of years the progress of very bright, very capable young people who are readying to take the banking mantle and run with it. Last month I had the privilege to attend several classes at the Graduate School of Banking at the University of Wisconsin. I have attended GSB many times before, and I always come away impressed at the level of competence displayed by the up-and-coming bankers I meet. During the past few years, I have watched young bankers assuming authority throughout Indiana, and I have been amazed at how quickly they have grown into their positions. These talented young people are “ready for the real world,” and I am not nearly as concerned about the future leadership of banking today as I was a scant two years ago. As for Mrs. Angel, she steadfastly remained in touch with many of her students following graduation from high school and college, and eventually she became “Judy Angel” to us after we began our careers. She must have been proud of how we had finally gotten ready for the real world, and of how she had contributed to that preparedness. Judy Angel was only 10 to 15 years older than my classmates and me. Sadly, she died when she was in her early 40s. She did, at least, live to see some of her students start on successful career paths. I feel a little like how my high school English teacher must have felt. I am now seeing the next generation of bank leaders emerge, and they will soon be taking over as the senior managers at banks in Indiana and across the country. They are ready for the real world, thanks in large part to the good teachers and mentors who helped along the way. Their legacy will live on, just as the legacy of Judy Angel lives on in those of us who were privileged to know her and learn from her. Thank you, Mrs. Angel ‒ you certainly were appropriately named! Judy Moore (left), retired banker from First National Bank of Kokomo, congratulates daughter Amber Van Til, Indiana Bankers Association, for earning a diploma from the Graduate School of Banking at the University of Wisconsin (GSB). Moore is a member of the GSB class of 1989. VanTil Earns GSB Diploma
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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 September 2015 Alternative Delivery Channels … Available at your convenience via Webinar, CD-ROM or On-Demand IBA Annual Convention Sept. 13-15 – French Lick Resort Call Report Preparation Sept. 17-18 - IBA Center Annual Security Management Seminar Sept. 22 - IBA Center Indiana Deposit Account Administration Sept. 22 - Best Western Plus, New Albany Sept. 23 - IBA Center Risk Management Officer Forum Sept. 24 - IBA Center Advanced Credit Analysis School Sept. 24-25 - IBA Center IBA Annual Washington Trip Sept. 27-29 – Washington, D.C. Talent Assessment and Succession Workshop Sept. 29 - IBA Center Mortgage Lending School Sept. 29-Oct. 1 - IBA Center Loan Review Oct. 2 - IBA Center CBC Compliance Schools - Lending Module Oct. 5-8 – IBA Center - Deposit/Operations Module Nov. 4-5 – IBA Center Chief Financial Officer Forum Oct. 6 - Group 1 - IBA Center Oct. 9 - Group 2 - IBA Center Senior Lender Forum Oct. 7 - Group 1 - IBA Center Oct. 8 - Group 2 - IBA Center Cybersecurity Conference Oct. 7-8 – Rising Star Casino Resort 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 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 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 Sept. 14 - For Salespeople:Avoid the Big Mistake and Get Commitment Sept. 15 - Managing the Eight Categories of Risk Assessment Sept. 15 - Dos and Don’ts of Checks Sept. 16 - Best-Ever Compliance Checklists for Commercial Loans Sept. 16 - Loan Underwriting Basics: Interviewing, Credit Reports, Debt Ratios and Regulation B Sept. 17 - Living Trust Documents Sept. 17 - Imaged Documents:What to Keep,What to Destroy, What Holds up in Court? Sept. 18 - Health Savings Accounts Sept. 22 - IRA Series: Auditing IRAs Step-by-Step Sept. 22 - Get Global: Understanding Global Cash Flow Analysis Sept. 23 - E-Sign Compliance and the Account Life Cycle Sept. 23 - Integrated Disclosures: Implementation Challenges and Common Problems Sept. 23 - Basic Banking for New Employees Part 1: Banking System, Deposit Operations, Lending Sept. 24 - Using Personal Tax Returns for Global Cash Flow:What’s Cash Flow, and What Isn’t? Sept. 24 - Legal Liabilities When Check Fraud Occurs Sept. 24 - Regulator Guidance and Issues in ATM Security Sept. 24 - Marketing and Advertising Compliance - The First UDAAP Hotspot Sept. 29 - HR Danger Zones: Regulations, Requirements and Best Practices to Keep You out of Trouble Sept. 29 - Fifteen Common Mistakes on LLCs Sept. 30 - Mandatory Compliance Regulations for Deposit Operations Oct. 2 - Dos and Don’ts of Working With Caregivers, Fiduciaries and POAs Oct. 2 - Proper Repossession, Notice and Sale of Non-Real Estate Collateral Oct. 6 - Regulation E Requirements for Debit Card Error Resolution: Processing, Disclosure and Investigation Oct. 6 - Written and Effective Credit Memos Oct. 6 - Uniform Commercial Code Oct. 7 - Residential Mortgage Loan Origination and Servicing: Issues, FAQs and Lessons Learned Oct. 7 - BSA for the Frontline Oct. 7 - Bitcoin for Bankers Oct. 8 - Powers-of-Attorney and Living Trust Documents: Guidelines for Deposit Accounts and Loans Oct. 8 - Twenty Legal Ownerships, and How to Open Signature Cards and Resolutions Oct. 9 - The New Flood Rules, Including the Mandatory Escrow Rule Effective July 1, 2016 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 Nov. 2 - Branch Transformation Series - Part 1 Nov. 3 - Mortgage Loan Originator Required Training Series III 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 - 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 - Sixty Critical Steps to Handle Delinquent and Unclaimed Safe Deposit Boxes - 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 - For Salespeople: Sell in any Market Nov. 16 - Branch Transformation Series - Part 3 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
9 Hoosier Banker September 2015 COVER STORY Trust, integrity, loyalty.” These and other traditional value terms pop up readily in the speech of Donald E. Goetz, president and chief executive officer of DeMotte State Bank. An unabashed enthusiast, Goetz keeps in his office a copious display of family photos, Christmas keepsakes and other memorabilia. Now 61, Goetz joined DeMotte State Bank fresh out of college and was named to his current position in 1988, at the age of 34. Deeply immersed in community, he has been active with the DeMotte Chamber of Commerce, the Lafayette Diocesan Finance Council, St. Cecilia Parish, Kankakee Valley Intermediate School bond board, Jasper County Tax Abatement advisory board and the NW Jasper Regional Water District, among numerous other organizations. Goetz also has served with industry organizations, including the Community Bankers Association of Indiana, the Indiana Department of Financial Institutions and the American Institute of Banking. Hoosier Banker recently interviewed Don Goetz about his perspectives as a community banker. What are your responsibilities as president and CEO of DeMotte State Bank? “My basic responsibilities include investing and other day-to-day activities, but my primary duty is to provide vision for the company. Closely aligned with that is to make sure the company transcends into the future. “Right now our bank is going through a six-year plan, with current executive management transitioning out. We are stair-stepping the transition to bring in younger people as part of our management succession. “We want this to remain a community bank, so we need to make sure we remain viable for consumers, providing the products and services that they want and demand.” What are your challenges? “Our challenge is to make our message heard as a community bank. We need to help consumers understand that our product lines are just as good as, if not better than, the products that much larger banks offer ‒ and often cheaper. “Our obstacle is in getting that message out. The big banks can splash ads on Chicago television, but we don’t have the advertising budget for that. “We also have struggled, along with all community banks, with the Great Recession of 2008. Working out of that hole was difficult, with loans going bad while regulators were making compliance demands at the worst possible time. “But now we’ve turned the corner. Building will be starting up again, and then developments will start moving. “During the crisis, we saw the worst in people, but we also saw the best in people. Honestly, I found more good than bad. People wanted to work with us to save their homes, and we wanted to help. It was a team effort.” What drew you to banking as a career? “I studied marketing and accounting at Purdue University, and at that time Demotte State Bank was looking for a college graduate to come in to train as future president. A gentleman I knew from church, by the name of Clair Misch, was chairman of the board, and he began recruiting Family photos are close at hand in the office of Don Goetz. Don Goetz: Old-Fashioned Banker Values “ Continued on page 10.
10 Hoosier Banker September 2015 me during my sophomore year. “At first I wasn’t interested, because I had no intention of coming back home. I wanted to explore other places. But when I was a junior, my father died, and I felt I needed to stay close to home for my mother and four sisters. “So I accepted the bank’s offer, and the rest is history. It all happened quickly, and I have no regrets whatsoever.” DeMotte State Bank has been in operation for 98 years. What has made this bank successful? “First, we have a good relationship with our directors. I’ve been here 39 years, and I couldn’t imagine a better relationship between management and our board. Our directors have vision and have given us a lot of latitude. “When Senate Bill 1 passed in 1985, permitting expansion across county lines and interstate banking, everybody was writing off community banks. But our board had vision and embraced the idea that we would survive by growing. “So we started branching. First we bought a failed bank, then we started de novo branching. Now we have a network of 11 offices. “The other factor that has helped us is technology; it has kept us competitive. For the future, we’re exploring ways to deliver products and services that customers want. The challenge will be to do it costeffectively. But so far technology has kept us in the ballgame. “Customer loyalty is also important to the success of this bank. We’re in communities that we know. Our branches are run by local management ‒ people who know the community and have relationships. Our managers are invested in their communities. “Finally, we’ve always known who we are and what we are capable of doing. We don’t try to serve everybody and everything. We define what we can do, and then we go after it.” What do you enjoy most about banking? “What has and continues to be most rewarding in my career is being able to watch our communities grow. I was born and raised here in DeMotte, and I remember when there were no stoplights here. Now we’ve got two. “More important than watching our growth is being part of it. Our bank is at the dead center of everything when it comes to community. A recent example is that DeMotte just installed city water, to a large degree because this bank went out on a limb financially to make it happen. “We loaned the water utility, NORWEJ,* through a bond anticipation note of $825,000, hoping that the federal government would fund a water project here. Nobody else would bid the bonds, but DeMotte State Bank did. If the water project did not get funding, we would have been trying to recover $825,000. “It was a risk, but now this community has city water, after trying for about 40 years. “I also enjoy seeing people in our bank grow. I like watching their careers develop. “Finally, I appreciate that I’ve had an opportunity to watch my daughters grow up. Our board would afford me time to participate in the girls’ sports and music and everything else. Our directors knew that I would get my job done, staying until midnight or 1 a.m. or whatever it took. “I got to watch my girls grow up, and I will never forget that our board made that possible. They allowed me to be a dad.” Continued from page 9. Members of the DeMotte State Bank management team average 28 years of service with the bank. Shown are (left to right): Guy Carlson, executive vice president/Lowell manager; Donald Hall, EVP/chief financial officer; Don Goetz, president/chief executive officer; Maurice Wiseman, senior vice president/agricultural loan officer; Laura Chambers, SVP/information technology; and Daniel Ryan, EVP/loan administration. Not pictured is Kent Bierma, SVP/commercial loan officer. A packed curio cabinet in the office of Don Goetz is testament to his many interests. * Northwest Jasper Regional Water District
11 Hoosier Banker September 2015 Continued on page 12. In 2009 you were quoted in the New York Times, saying that this bank seeks earnings growth on a ‘nice, gentle, upward slope.’ Please elaborate. “Basically I was saying shareholders don’t want earnings to be bouncing up and down. If you can plan well enough to show a nice, soft upward slope, shareholders will be happy. “It falls back to wanting to stay independent. To be independent, you’ve got to have a loyal shareholder base. Stability in earnings is a way to achieve happy shareholders. You also have to balance the needs of shareholders, customers and staff.” What do you value most in staff? “What I value most is loyalty. We’ve had very little turnover here. Our four executive officers and three senior vice presidents each average 28 years of experience. We have 24 other officers, averaging 16 years of experience each. “I also value our staff’s sense of teamwork and ability to work together. We all check our egos at the door. We’ve all done everything here, including shoveling snow. “I really appreciate that our staff will stand up for each other. If somebody has a bad event or life crisis, someone else will be standing in line, ready to pick up the slack or personally extend a helping hand. “And I love the educational level of our staff. Most officers have a college degree, or a high level of life experience, or both.” Who has been influential in your life? “No. 1 is my dad. I wouldn’t be in this chair today if not for him. He pushed me to a formal education, setting the stage for me to even be considered for this job. “From the time I was a child, it was an expectation that I was going to college ‒ no ifs, ands or buts. My dad was a welder at U.S. Steel, and the way he put it was, ‘You’re not going to crawl around in grease on your Five Star Awards from the Indiana Bankers Association are on proud display in the DeMotte State Bank main office. Shown are (left to right): Dianna Groen, teller; Don Goetz, president and CEO; and Kristi Peterson, teller. belly your whole life. You’re going to college.’ “He also influenced my parenting skills. My dad was the kind of guy who would work 16 hours a day, come home and play with us before he’d take a nap, then go back to work On display in the office of Don Goetz are various honors earned through the years, including a certificate of his board appointment to the Indiana Department of Financial Institutions.
12 Hoosier Banker September 2015 Continued from page 11. Home-like décor abounds throughout the offices of DeMotte State Bank. In 2014, the Indiana State Small Business Credit Initiative (SSBCI) leveraged $5 million in federal SSBCI funds to generate $12.2 million in private loans and investment for Indiana small businesses, according to the annual SSBCI report of the U.S. Department of the Treasury. These funds have supported loans made by financial institutions, which has led to the retention or creation of 1,000 jobs in Indiana. The report summarizes the past year’s aggregated national impact, as well as state-by-state results. Overall the SSBCI program is expected to stimulate $10 in new small business lending and investing for every dollar of federal support by the program’s end. Read more online at: 1.usa. gov/1DNU6tb. t Indiana SSBCI Program Generated $12.2 Million for Small Business Lending and Investment in 2014 16 hours again. He taught me to always make time for family. “After my father, my best influences are my wife, Cheryl, and our three daughters. My family keeps me grounded and gives me a sense of purpose. Our girls were three easy kids to raise, and I thanked each one of them as they graduated from high school. “Kim, our oldest, lives in Indianapolis with her husband, Mike, and their baby girl, Joy. Our granddaughter truly is a ‘joy.’ With her, our life starts over again. “Our middle daughter, Becky, lives in Perth, Australia, with her husband, Kyle. They’re moving back home at the end of the year, and Becky will be joining the bank in our control department. “Our youngest, Allison, is now starting medical school at Marian University in Indianapolis. She went to Marian for undergrad, too, and has a degree in biology. “Also influencing me are the many good people I work with, who have pushed me, motivated me and, most importantly, helped me throughout my career. One person does not build a career alone. Your career is built by those who surround you. “It’s all been a great ride, and I wouldn’t change a bit of it. The way my life has played out, I’m a happy and blessed guy.” t 1. Understand your strengths and weaknesses. Play to your strengths, and improve on your weaknesses. 2. Set goals, both career goals and personal goals. 3. Gain visibility: Attach yourself to a star, and rise to the top. Attach and learn. 4. Work hard. Don’t watch the clock. 5. Don’t be afraid to take chances. Now is the time, because you have a long time to fix anything that’s wrong. When you get older, you won’t have as much time to fix mistakes. 6. Take advantage of educational opportunities. 7. Be a team player. 8. Self-assess regularly. Ask yourself, “Who am I?” “Am I where I want to be?” “Am I the person I want to be?” 9. Give back to your community, not only monetarily, but also in time. 10. Seek balance. Not only seek it, achieve it. Tips forYoung Bankers Don Goetz, DeMotte State Bank, offers advice to young professionals. ABOVE ALL: Always, always, always act with integrity. Your word is your bond. If you lose your integrity, you’ve lost it all. If you keep your integrity, trust will come naturally.
Mark Wade • Carmel, IN • 317.523.4342 www.BankersBankUSA.com Madison, WI • Des Moines, IA • Indianapolis, IN • Springfield, IL Member FDIC • Equal Housing Lender Always your partner, never your competitor.™ Earning your business one handshake at a time. Community banking is all about building and maintaining strong relationships, starting with a commitment to personal service. That same commitment is what sets Bankers’ Bank apart. We enjoy every opportunity to meet with you, to learn more about your goals and how we can help you best serve your customers.
14 Hoosier Banker September 2015 PSP SHOWCASE In the world of technology, 15 years is a long time. For perspective, look back to 2000, the founding year of Infotex, an Indiana Bankers Association Preferred Service Provider for many years. It was a simpler time then – 9/11 had not taken place, corporate account takeovers were unheard of, and Internet banking had not yet caught hold. Dan Hadaway, founding partner of Infotex, credits the company’s relationship with the Indiana banking community for the tech-longevity of Infotex. He recalls, “Joe DeHaven and Laurie Rees of IBA were two people who did think that cybersecurity was important. Thanks to the Association, Infotex has been assisting banks in many areas regarding information technology risk management.” Wellknown to Hoosier bankers, Hadaway oversees the audit and cyberconsulting services of Infotex and is a regular at IBA educational events, for example serving as moderator of the information technology conference* since its inception. He has long been certified in information security. The network monitoring service of Infotex, which has evolved to what is widely known as a SIEM (security information event management) system, has been continually growing in sophistication. Infotex has the ability to help banks: respond to audit and examination findings, achieve maturity in cybersecurity controls and address common examination findings. As Hadaway notes: “Banks which have given the keys of the kingdom to one or two people are being asked by examiners, ‘Who is watching the watchers?’” Infotex clients appreciate the segregation benefits of the firm’s monitoring services. Network administrators understand that event data collected forensically by a third party may be needed to prove non-complicity in cyberbreaches. Meanwhile the user monitoring process solves a tricky exam-finding source called termination processing. “Imagine seeing a report from a third party,” explains Hadaway, “showing not only every asset the terminated employee had access to, but exactly when that access was disabled.” In fact Hadaway calculates that the new cybersecurity assessment tool will put Infotex on the “network monitoring map.” Not only does the firm’s SIEM provide visibility into network event logs coming from servers, domain controllers and other traditional devices, but the company has been importing logs from critical applications such as email, teller systems, mortgage origination applications, mobile and Internet banking applications, etc. This step allows complete visibility into potential issues on a 24x7x365 basis. Because Infotex provides monitoring services, the company is part of the technology service provider examination program of the Federal Financial Institutions Examination Council, putting it regularly on the receiving end of examinations and audits. This understanding of the process assists in providing accurate audit services, risk assessments, IT management practices reviews and Internet banking controls reviews. Bank clients enjoy peace of mind, because Infotex knows what needs to be reviewed to be prepared for any ITrelated examination. Infotex offers around-the-clock monitoring of its SIEM, which at full service includes intrusion prevention and detection, event log management, change detection, Web defacement monitoring and vulnerability management against a security baseline that is established in the deployment (and re-tuning) process. Within the area of audit and assessment services, Infotex offers multiple thirdparty cybersecurity assessments. Additional considerations include social engineering, IT management practices, security procedures in accordance with regulatory 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. Infotex: Established Expert in the New Cyberworld
15 Hoosier Banker September 2015 infotex Managing Technology Risk Actionable Events CAT Domain 2, 3, 5 Compliance Completely Customizable 24 x 7 x 365 Real Time Monitoring Daily Reporting of Actionable Events Trend Reporting (Pushed To You!) Health Reporting IPS/IDS | SIEM | ELM | User Monitoring Change Detection, Critical Application Monitoring elmdemo.infotex.com Fight the Noise! Event Log Management Managed SIEM (800) 466-9939 requirements, and industry best practices. Hadaway and the Infotex team can additionally assist with various areas of consulting services and awareness training. They have provided custom training to users and boards of directors, as well as commercial customer appreciation events. Infotex can train management teams in complex processes ‒ such as vendor due diligence, technology risk management, incident response and data classification ‒ and can provide policies and procedure templates, plus assist in adapting them to fit your institution. As your institution begins to “mature” your cybersecurity posture, remember that Infotex can help … and has been doing so for 15 years. Let this established company, which knows the regulatory environment and Indiana banking, help your bank through ongoing cyberchallenges. For more information, contact Rod Lasley at the IBA at 317-387-9380, email: rlasley@indianabankers.org; or contact Infotex directly at 800-466-9939, www.Infotex.com, email: dhadaway@ Infotex.com. t *Now called the Cybersecurity Conference, IBA’s annual information technology conference is scheduled to take place Oct. 7-8 at Rising Star Casino Resort. More information is available on the outside back cover of this issue of Hoosier Banker, or visit indianabankers.org. A patent protection bill, HEA 1102, was signed into law by Gov. Mike Pence in July. Authored by Rep. Eric Allen Koch and sponsored by Sen. Brent Steele, the bill prohibits a person from asserting a claim of Gov. Mike Pence (seated, light gray jacket) has signed patent protection HEA 1102 into law. Seated next to the governor is Rep. Eric Allan Koch. Banking community members in attendance are (standing, right to left): Clay W. Ewing, German American, Jasper; and Amber R.Van Til and Dax Denton, Indiana Bankers Association. Indiana Patent Protection Bill Signed Into Law patent infringement in bad faith. Though the legislation will not affect Indiana bank operations directly, it will serve to deter frivolous allegations of patent infringement. t Centier Investment Services, Northern Indiana, executives were recognized by Cetera Investment Services at its annual conference in July in Miami, Florida. The following Centier associates were recognized: Lisa Marek – 2014 Million-Dollar Producer award and President’s Club member; Alan Swingler – President’s Club member; Al Avila – Silver Producer award; Mitch Marcus – Gold Producer award; Kevin Babcock – Gold Producer award. t Honorable Mentions
16 Hoosier Banker September 2015 The annual round of regional meetings, hosted each summer by the Indiana Bankers Association Government Relations Team, has been steadily growing in popularity. This year, the meetings continued to expand in scope and depth. During recent meetings held throughout the state, a total of 181 IBA-member bankers, along with several associate members and 45 legislators, attended at least one of the eight gatherings. The purpose of the annual regional meetings is to give IBA members an opportunity to mix and mingle with elected officials in a relaxed luncheon setting. Preceding the luncheon, the GR Team briefs IBA members on the outcome of the prior year’s legislative session and summarizes forthcoming issues. Topics covered at the 2015 regional meetings included a variety of issues addressed at this year’s legislative session, including patent protection, local government investments, vacant and abandoned housing, state and local taxation, management of funeral trust accounts and state board of account issues. The regional meeting format ‒ which begins with a legislative review for IBA members, followed by a luncheon with legislators ‒ mirrors the setup of the IBA Annual Legislative Briefing and Reception held each winter. However, the regional meetings are smaller, more intimate and localized, resulting in enhanced grassroots benefit. Legislators at these and other IBA events welcome meeting with and hearing directly from their constituents. The annual round of regional meetings also gives the banking community the chance to thank elected officials for legislative success during the prior session. IBA staff and members in attendance at this year’s meetings had ample opportunity to express gratitude to lawmakers for recent positive legislation, while at the same time addressing issues on the horizon. The IBA GR Team would like to thank the following associate members, whose generous sponsorship made the 2015 regional meetings possible: Approval Payment Solutions Inc., Continuity, Donaldson About the Author Amber R. Van Til, JD, is executive vice president of the Indiana Bankers Association. She can be reached at 317-917-8047, email: avantil@indianabankers.org. Capital Management, Federal Home Loan Bank of Indianapolis, Lee & Mason Financial Services, Plante Moran and Profit Resources Inc. Thank you also to our dedicated members, associate members and Indiana legislators, who took time from busy schedules to attend. Your continued advocacy support of the Indiana banking community is very much appreciated. t GR SPOTLIGHT IBA Regional Meetings Continue to Grow in 2015 Watch Melodie Yarnell, Jackson County Bank, Seymour, as she shares insights on the importance of grassroots advocacy at the Bloomington IBA Regional Meeting. A board member of IBA’s Future Leadership Division, Yarnell is scheduled to attend the IBA Annual Washington Trip, Sept. 27-29. To view the video, access Hoosier Banker Digital at indianabankers.org, and click on the red YouTube arrow. t Video Bonus: The Importance of Grassroots Advocacy
17 Hoosier Banker September 2015 Photo Highlights From the Bloomington Regional Meeting, July 16
18 Hoosier Banker September 2015 customer who makes his or her payment between the 11th and the 13th day beyond the scheduled due date is permitted, application of a delinquency charge for a payment from the last billing cycle in the first 10 days of a new billing cycle is not allowed. The current installment rule requires a lender to apply any payment made in this new billing cycle to current installments or payments due, and then to any delinquent payments or installments.2 Applying the following payment pattern: Because the January and February payments were made within 10 days of the February scheduled due date, they are first applied to the current payment due, even though the account has an added outstanding balance of $18.50 as a result of the late fee incurred in January. It is important to note, however, that the bank does not have to accept just one installment if the prior installment remains unpaid. Follow-up question: What if the February payment was made on Feb. 13: Would a bank be allowed to collect the delinquent late fee associated with January from the February payment first, and then apply the remainder to the February installment due? COMPLIANCE CONNECTION Question: How do I apply a late payment on a consumer loan for a preceding month made more than 30 days past its initial due date, but made before a subsequent payment becomes late? May I assess a late fee on the preceding installment first, and then apply the remainder to the current payment? Answer: If the payment is made on or within 10 days of the scheduled due date of the subsequent payment, you must apply the payment to 1 Indiana Code § 24-4.5-3-203.5(1); indexed pursuant to 750 I.A.C. 1-1-1. 2 I.C. § 24-4.5-3-203.5(3).A delinquency charge may not be collected on an installment or payment due that is paid in full within 10 days after its scheduled due date, even though an earlier maturing installment, minimum payment or a delinquency charge on: (a) an earlier installment, or (b) payment due; may not have been paid in full. For purposes of this subsection, payments are applied first to current installments or payments due, and then to delinquent installments or payments due. 3 I.C. § 24-4.5-3-203.5(3). the current amount due, prior to applying payment to any earlier and now-delinquent installment. Indiana is one of several states that applies the “current installment rule” when permitting a lender to assess a late fee on a consumer loan. Indiana law permits a bank to assess a delinquency charge of $18.50 on any installment or minimum payment due not paid in full within 10 days after its scheduled due date.1 While assessing a late fee to a Payment due Payment made Late fee 1/1/2015 $18.50 2/1/2015 2/2/2015 $0.00 3/1/2015 3/2/2015 $0.00 4/1/2015 4/2/2015 $0.00 © 2015 Krieg DeVault LLP THINKING BEYOND TRADITIONAL SOLUTIONS FOR FINANCIAL INSTITUTIONS FOR OVER 130 YEARS • Corporate Representation • Mergers and Acquisitions • Capital Offerings • Regulatory • Compliance • Supervision and Enforcement • New Product Development • Litigation • Commercial / Consumer Loan • Creditors’ Rights • Trust • Tax • Securities • Employment • Intellectual Property One Indiana Square • Suite 2800 • Indianapolis, Indiana 46204 p: 317.636.4341 f: 317.636.1507 INDIANA • ILLINOIS • GEORGIA • FLORIDA • MINNESOTA www.kriegdevault.com Continued on facing page.
19 Hoosier Banker September 2015 This information is provided for general education purposes and is not intended to be legal advice. Please consult legal counsel for specific guidance as to how this information applies to your institution’s circumstances or situation. aBout ComplianCe ConneCtion In order to address compliance inquiries from members, IBA provides Compliance Connection, an assistance program offering advice on Indiana-specific compliance questions. If the matter requires legal advice, IBA Compliance Connection will refer the bank to a law firm. Acting as IBA’s compliance consultant is Brett J. Ashton, partner with Krieg DeVault LLP, Indianapolis. Submit Compliance Connection questions to IBA’s Amber R. Van Til at avantil@indianabankers.org or Josh Myers at jmyers@indianabankers.org. Answer: Yes. The restriction on application of payments under the current installment rule only applies to a delinquency charge on an installment or payment due that is paid in full within 10 days after its scheduled due date.3 If you have any questions about the application of late payments, you should consult with your legal counsel or the Indiana Department of Financial Institutions. Matthew D. Subler has been appointed to the board of directors of First Bank of Berne. He is a sales manager at Berne Ready Mix and is a board member of the St. Henry Tile Company Inc. Subler serves as: treasurer for the board of directors and co-chairperson of the scholarship committee for the Adams County Community Foundation, den leader and committee member of Cub Scout Pack 3069, elementary coach for South Adams basketball, member of the Knights of Columbus, and classroom volunteer with Junior Achievement. He formerly served as 4-H Council president and board member of the Adams County Extension. Subler earned a bachelor’s degree from Purdue University Randy Schulz has been appointed to the board of directors of First Federal Savings Bank, Evansville, and of First Bancorp of Indiana Inc. He is retired from Harding Shymanski & Company PSC ‒ an associate member of the Indiana Bankers Association ‒ which he joined in 1979 and served as vice president of client services. Schulz is a member of the American Institute of Certified Public Accountants and Indiana CPA Society. He is a contributing author for the Evansville Business Journal and serves as board member for the Evansville ARC and Youth First. Schulz earned a bachelor’s degree from Ball State University. John Neighbours has been appointed to the board of directors for First Financial Bank, Columbus. He has practiced law for 40 years in addition to serving as an adviser for business, educational and not-for-profit executives. Neighbours has served as chairman of the United Way of Central Indiana, chairman of the Indy Chamber of Commerce, chairman of the Indianapolis Zoological Society, council member of the American Bar Association Section on Labor and Employment Law, chairman of the FroM tHe board rooM Developments Under the National Labor Relations Act Committee, Labor Relations Committee member for the U.S. Chamber of Commerce and co-chair of the legal committee for the Super Bowl XLVI in Indianapolis. Erin Hoeflinger has been appointed to the board of directors for MainSource Bank, Greensburg and of MainSource Financial Group. She has served since 2008 as president of Anthem Blue Cross and Blue Shield in Ohio, which she joined in 1995. Hoeflinger is a member of Ohio Gov. John Kasich’s Advisory Council on Health Care Payment Innovation and of the board of trustees of The Ohio State University. She earned a bachelor’s degree from Wright State University and an MBA from Xavier University. t Follow Us on Twitter Follow the Indiana Bankers Association on Twitter @ IndianaBankers for late-breaking news about Association and advocacy issues. t
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