Hoosier Banker oosier OCTOBER 2016 INSIDE Balancing Act: 2016 IBA Annual Convention Story on page 8. 1916 - 2016 YEARS
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3 Hoosier Banker October 2016 TABLE OF CONTENTS VOLUME 100 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 fifth day 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. COVER STORY 8 BALANCING ACT: 2016 IBA ANNUAL CONVENTION Christina M. Bennett, IBA 10 IBA 2016:WRAPPING UP A SUCCESSFULYEAR Michael H. Head, First Federal Savings Bank, Evansville 12 TAKING THE IBA TO NEW HEIGHTS IN 2017 Annette M. Russell, Security Federal Savings Bank, Logansport 14 CONVENTION PHOTO COVERAGE FEATURES 5 CEO PONDERINGS S. Joe DeHaven, IBA 6 IBA CALENDAR OF EVENTS 18 HOOSIER BANKER HERITAGE FLD HAPPENINGS 22 FLD ANNUAL CONFERENCE:TAKEYOUR GAMETOTHE NEXT LEVEL Kristin Marcucccilli, STAR Bank, Fort Wayne HUMAN RESOURCES 24 RECRUITING FOR TOMORROW Independent Banker reprint DIRECTORS / SENIOR MANAGEMENT 28 ASSET/LIABILITY MANAGEMENT: MODELING THE DYNAMICS OF LIQUIDITY Jeffrey F. Caughron,The Baker Group PSP SHOWCASE 30 CRA PARTNERS: NEW LOOK, NEW NAME, SAME MEANINGFUL MISSION Lori L. Millar, CRA Partners DEPARTMENTS 20 COMPLIANCE CONNECTION Brett J.Ashton, Krieg DeVault LLP 20 FROM THE BOARD ROOM 20 VIDEO BONUS 21 ANNIVERSARY MILESTONES 27 HONORABLE MENTIONS 31 TAKING IT EASY 32 BANKING ON COMMUNITY 35 BANKERS ON THE MOVE 38 ADVERTISERS INDEX 1916 - 2016 YEARS Nearly 450 attendees gathered in French Lick for the 2016 IBA Annual Convention.
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 indianabankers.org 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 ........................................... Michael H. Head, First Federal Savings Bank, Evansville FirstVice Chair .......................... Annette M. Russell, Security Federal Savings Bank, Logansport SecondVice Chair .................................................. Clay W. Ewing, German American, Jasper Immediate Past Chair ....................................... Larry W. Myers, First Savings Bank, Clarksville Chief Executive Officer ....................... S. Joe DeHaven, Indiana Bankers Association, Indianapolis President .................................. Amber R.VanTil, JD, 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 ...................... Kristin Marcuccilli, STAR Bank, Fort Wayne Non-Indiana Headquartered Bank Director ............... Tim Massey, BMO Harris Bank, Indianapolis Northeast Region Directors Gregory Maxwell, Horizon Bank, NA, Michigan City Michael S. Zahn, First Federal Savings Bank, Huntington Michael C. Marhenke, iAB Financial Bank, Fort Wayne Northwest Region Directors Benjamin J. Bochnowski, Peoples Bank, Munster Arden L. Cramer, Logansport Savings Bank Joseph D. Carlson, Community State Bank, Royal Center Southeast Region Directors Archie M. Brown Jr., MainSource Financial Group Inc., Greensburg Dennis Wayman, State Bank of Medora George W. Ferriell, Bath State Bank Southwest Region Directors Matthew W. Howrey, North Salem State Bank Michael L. Baker, State Bank of Lizton, Brownsburg Kent L. Parisien, The First National Bank of Odon IBA Staff Chief Executive Officer .......................................................................... S. Joe DeHaven President ..................................................................................... Amber R.VanTil, JD ExecutiveVice President .............................................................. Paul W. Freeman, CAE SeniorVice President–Government Relations ................................................... Dax Denton Vice President–Meetings & Events ............................................ Christina M. Bennett, CMP Vice President–Products & Services ................................................................. Rod Lasley Vice President–Education & Training ........................................................... Laurie A. Rees Vice President–Communications .................................................................. Laura Wilson AssistantVice President–Government Relations ......................................... Erika L. Hall, Esq. 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 Kubly 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 4 Hoosier Banker October 2016 Future Leadership Division Board President - Kristin Marcuccilli, STAR Bank, Fort Wayne Vice President - Kirby Drey, Kentland Bank Emily Boardman, Crossroads Bank,Wabash Craig Buse, Springs Valley Bank & Trust Company, French Lick Jason L. Ernst, First Financial Bank, NA,Ter re Haute J. Daniel Maddox, Citizens State Bank, New Castle Andrew J. Saner, MainSource Bank, Greensburg Jeremy Siegle, Bank of Wolcott Lucas White,The Fountain Trust Company, Covington Billy Winter, Bippus State Bank, Huntington Melodie K.Yarnell, Jackson County Bank, Seymour
5 Hoosier Banker October 2016 FEATURE CEO Ponderings S. Joe DeHaven, Chief Executive Officer, Indiana Bankers Association As I described in this column last month, I am using these last few months to say thank you and goodbye as I reach my chosen retirement date of Dec. 31, 2016. Last month I focused on the outstanding staff who collectively make the Indiana Bankers Association such a strong organization. This month I am highlighting another important constituency— elected officials. A primary function performed by the IBA is to represent the banking industry before the various levels of government: federal, state and occasionally local. The IBA Government Relations Team spends most of its time at the state level and with the Indiana delegation at the federal level. Over 26 years, I cannot begin to list all of the legislators who have supported our efforts to sustain a legal environment that allows banks to provide their important services to businesses, organizations and consumers. There have been so many outstanding individuals. Legislators often get a bum rap from voters and the media, but nearly all that I have ever worked with have come to their elected positions for the right reasons. They want to make a difference in their community, state or country. They want to leave the world a better place than what they found, so that their children and grandchildren can enjoy the same lifestyle or better. Legislators come to public service from all walks of life ‒ with vastly different backgrounds, experiences and philosophies ‒ which is what makes our system of governance the best in the world. While they are at times portrayed inaccurately as greedy, I have never found a single instance of that. Most of our legislators could make much more money in the private sector, so the greedy aspect just does not compute. Another misperception is laziness, but nothing could be further from the truth. Legislators work long and often difficult hours away from their families and homes. We should all appreciate the commitment displayed by these generous men and women. Be they Republican or Democrat, many have become good friends. I have worked with many banking committee chairmen and members in both the House of Representatives and the Senate. Throughout the years, there were only a couple who did not grasp why it is important to maintain a strong banking system in support of a healthy economy. Currently we are fortunate to be working with Sen. Travis Holdman, a former banker who understands our business, and Rep. Woody Burton, a Realtor who works closely with the banking community. Legislative leadership also is important to our success. There have been several speakers of the House from both parties during my time, and it has been a pleasure to work with them. Unique to this business, there have only been two president pro tems from the Senate, Bob Garton and current leader David Long. Both have been strong leaders, and both have been friends. The current speaker is Brian Bosma, who also is my elected representative. Probably because he is my representative, I have been closer to him and am proud to call him a friend. All of these leaders have always opened their doors to me, and I appreciate and thank them for that. Washington, DC, is where I have spent much of my time in the past few years, as the issues there have been so important to bankers. Many good men and women have served Indiana during my career. Overall, however, today we are blessed with the strongest delegation in my time. Many came from state government, and some came from the private sector. Either way, all have become friends. We currently have Representatives Marlin Stutzman and Luke Messer serving on the U.S. House Financial Services Committee, and Sen. Joe Donnelly serving on the U.S. Senate Committee on Banking, Housing & Urban Affairs. It has been wonderful to have these three gentlemen working on behalf of the banking community, and I thank them for their support and tireless efforts on our behalf. Unfortunately, I have missed more people than I have recognized. For that I apologize. Thank you all for the sacrifices that you make to give us opportunities for a better life. I appreciate all that you do, and thank you for your work and your friendship. Together, I believe that we have accomplished much to advance life in Indiana! Indiana marks its 200th anniversary of statehood this year. As part of the yearlong celebration, the Indiana Bicentennial Commission has minted a commemorative medal, for which the IBA is the presenting sponsor. This sponsorship entitles IBA-member banks to serve as exclusive distribution points for official medal order forms. To facilitate bank participation, the IBA has provided kits to all member banks. Additionally downloadable promotional materials are available at: indianabankers.org/ bicentennial. For questions or more information, please contact IBA’s Christina Bennett at 317-387-9380, email: cbennett@indianabankers.org. t IBA-Member Banks Sponsor Bicentennial Medals
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, IN 46254 Phone: 317-387-9380 Twitter: @IndianaBankers Alternative Delivery Channels … Available at your convenience via Webinar, CD-ROM or On-Demand Marketing Directors Forum Oct. 18 - IBA Center IRA School Oct. 18 - Basic Issues - IBA Center Oct. 19 - Intermediate/Advanced Issues - IBA Center Social Strategies Workshop Oct. 19 - IBA Center BSA/AML Compliance Management Oct. 20 - IBA Center Lenders Comprehensive Guide to Mortgage Lending Oct. 25-26 - IBA Center IBA Leadership Development Program - Session 4:Who Dares Wins Oct. 26-28 - Wooded Glen Retreat & Conference Center, Henryville IT and Operations Officer Forum Oct. 27 - Group 1 - IBA Center Oct. 28 - Group 2 - IBA Center Community Bankers for Compliance School - Deposit and Operations Nov. 2-3 - IBA Center IBA Future Leadership Division Annual Conference:Visualizing the Leader Within Nov. 2-3 - Renaissance Indianapolis North Hotel, Carmel Certified Teller Program:Today’s Frontline ‒ Preparing for What’s on the Horizon Nov. 3 - The Landmark Centre, Fort Wayne Nov. 7 - Hillcrest Golf & Country Club, Batesville Nov. 9 - Huntingburg Event Center Nov. 10 - Courtyard Marriott, Lafayette Implementing the New HMDA Rules Nov. 7 - IBA Center Branch Management Series: Session 4, Raising the Bar for Sustainable Growth Nov. 8 - IBA Center Human Resources Directors Forum Nov. 9 - IBA Center Fundamentals of Commercial Lending Nov. 9-10 - IBA Center ABA National Agricultural Bankers Conference Nov. 13-16 - JW Marriott Indianapolis Midwest Agricultural Banking School Nov. 14-17 - Purdue University, West Lafayette Community Bankers for Compliance Series - Session 4: Mortgage Lending Under Regulation Z (OmittingTRID) Nov. 14 - The Landmark Conference Centre, Fort Wayne Nov. 15 - IBA Center Nov. 16 - IBA Center Certified Community Banking Technology Professional: Certification Training Nov. 16-17 - Lewis University, Oakbrook, Ill. FDIC Banker College Nov. 17 - Indianapolis Marriott North Successful Business Development - Making 2017 a RecordYear Dec. 6 - IBA Center Sharpening Your Vendor Management Skills Dec. 7 - IBA Center Advanced Commercial Lending School Dec. 8-9 - IBA Center Lending Compliance Update Dec. 13 - IBA Center Oct. 18 - Essential HR Recordkeeping From Hiring to Firing Oct. 18 - Opening Fiduciary Accounts:Trusts, POAs, Estates, Guardianships and More Oct. 18 - Uniform Commercial Code:WhatYou Need to Know Oct. 19 - FDIC Rolls out New IT Examination Work Program Oct. 19 - Liquidity Funding Concerns in a Risking Interest Rate Market Oct. 20 - Understanding Title Insurance Policies, Commitments and ALTA Endorsements Oct. 20 - Opening Trust Accounts: 10 Hot Spots Oct. 21 - Overdraft Outlook: Litigation Lessons, Avoiding Violations and Best Practices Oct. 21 - TRID for Construction Loans Oct. 24 - Demystifying TRID Issues and FAQs for Construction-Only and Construction-to-Permanent Lending Oct. 25 - Marketing and Advertising Compliance, Including UDAAP Expectations Oct. 26 - Opening Trust Accounts: Documentation, Signatories and FDIC Insurance Coverage Oct. 27 - Managing in the Middle Oct. 27 - Debt Collection Series: Maximizing Recoveries on Charged-Off Loans Nov. 2 – It’s Time for a TRID Check-Up Nov. 2 - W-9,W-8BEN and W8Ben-E: Line-by-Line Nov. 2 - Customer Authentication and Validation:The New Normal in Risk Mitigation Nov. 3 - Notary Essentials and Legalities for Community Banks Nov. 3 - Scripting the New Account Interview for Compliance Nov. 3 - Robbery Procedures, Counterfeit and Fraudulent Items Nov. 4 - BSA Emerging Issues Nov. 4 - Nonresident Alien Accounts:W-8s,W-8BENs, BSA, Rules and More Nov. 8 - Developing a Risk-Based Compliance Audit Process for Deposits Nov. 9 - FFIEC Reporting and Guidance for CRA Compliance Nov. 9 - What to Do When a Customer Dies Nov. 9 - Understanding and Managing the CFPB Compliant Process Nov. 10 - Writing an Effective Credit Memorandum Nov. 10 - Safe Deposit Boxes:Top 50 Most Important Procedures, 2016 Update Nov. 14 - The Major Performance Factors for Success in Banking Nov. 14 - Proper Repossession, Notice and Sale of NonReal Estate Collateral Nov. 15 - Employment Records and How to Keep Them Nov. 15 - Director Series:What the Board Needs to Know to Manage IT Nov. 15 - Ratio Analysis to Determine Financial Strength Nov. 16 - Lending 101 Nov. 16 - Appraisal and Evaluation Guidance on Collateral Valuation: Lender and Board Perspectives Nov. 17 - Recognizing and Responding to Elder Fraud: What Every Staff Member Should Know Nov. 17 - Opening High-Risk Customer Accounts: More Is Better Nov. 22 - Handling ACH Exceptions and Returns: Unauthorized, Revoked or Stop Payment Nov. 29 - Annual Robbery Training for All Staff: Meeting Your Bank Protection Act Requirements Nov. 29 - Teller Compliance Issues: CTRs, Reg CC and Checks Nov. 29 - Signature Cards and Account Agreements: Understanding Account Titling, Ownership and Access Nov. 30 - Top 10 IRA Issues: Compliance, Reporting, Death and Distributions Dec. 1 - The CFPB’s Four Ds of Fair Lending: Deceptive Marketing, Debt Traps, Dead Ends and Discrimination Dec. 6 - Rewarding and Retaining the Best Employees Dec. 6 - Ten Simple Rules for Tellers to Save You Thousands Dec. 7 - Excel Explained: Introduction to Spreadsheets Dec. 7 - Seven Habits of Highly Successful Supervisors Dec. 7 - Improving the Call Reporting Process: Documentation, Efficiency, Accuracy, Common Errors and FAQs Dec. 8 - Business Accounts:Advanced Issues Dec. 8 - Powers-of-Attorney In-Depth: Good Faith, Fraud and Fiduciary Capacity Dec. 9 - IRA Audit and Compliance Dec. 13 - Meeting Federal Requirements for Tech-Based Marketing:Website, Social Media, Robo Calls and More Dec. 13 - Core Management Skills Dec. 14 - IRS Information Reporting:WhatYou Need to Know About the Rules and Forms Dec. 14 - Loan Review: Consumer, Commercial and Real Estate 6 Hoosier Banker October 2016
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8 Hoosier Banker October 2016 CONVENTION COVERAGE For three beautiful days in September, 446 attendees gathered at the French Lick Resort for the 2016 Indiana Bankers Association Annual Convention. The theme, “Balancing Act: Walking the Fine Line Between Challenge and Opportunity,” reflected on the complexities of the industry. Per tradition, convention events kicked off with a golf tournament on Sunday, Sept. 11. Congratulations to this year’s winning team: Roger K. Cromer, Crossroads Bank, Wabash; Todd Taylor, Taylor Advisors, Louisville, Kentucky; and Roger A. Bird and Joe Urbanski, Farmers State Bank, LaGrange. Later that evening, attendees gathered in the exhibit hall for a circus-themed opening reception. Exhibitors featured an array of games and activities, while guests intermingled with staff and others dressed as circus performers and animals. Festivities continued with dinner, music and birthday cake for IBA’s Paul W. Freeman, executive vice president. On Monday, Sept. 12, events began bright and early with a rousing leadership keynote from Meridith Elliott Powell. Educational opportunities continued with a stream of high-powered sessions, including presentations from the chairs of both the American Bankers Association and the Independent Community Bankers of America. At Monday’s luncheon, IBA official business was conducted, including election of IBA officers for 2017, a new board member elected for next year, and recognition of board retirements. In addition IBA President Amber R. Van Til presented Sen. Rodric Bray with the IBA Legislator of the Year award. Sen. Bray was honored for his industry support and sponsorship of bills addressing the issue of foreclosure. Monday evening the IBA Future Leadership Division hosted its annual silent auction, raising more than $22,000 for Indiana BANKPAC through the auction and an additional $50,000 through the BANKPAC sweepstakes. Features of the evening included Rep. Woody Burton’s auctioneering skills, and a PAC donation voting contest for the opening reception’s best costume, for which Jeremy Siegle, Bank of Wolcott, was named contest winner. The final day of the convention, Tuesday, Sept. 13, began with Tom Hershberger’s presentation, “Every Circus Needs a Ringmaster.” The day continued with presentations covering topics ranging from digital strategies to loan underwriting, plus a luncheon keynote by Dr. Steffen Schmidt, a.k.a. Dr. Politics. Events concluded with the closing banquet. IBA Chair Michael H. Head, First Federal Savings Bank, EvansBalancing Act: 2016 IBA Annual Convention Walking the Fine Line Between Challenge and Opportunity
9 Hoosier Banker October 2016 About the Author Christina M. Bennett, CMP, is vice presidentmeetings & events of the Indiana Bankers Association. She can be reached at 317-387-9380, email: cbennett@indianabankers.org. ville, passed along the leadership gavel to Annette M. Russell, Security Federal Savings Bank, Logansport, who in 2017 will become the first female chair in the IBA’s 120-year history. Mike Head also was honored with a Sagamore of the Wabash award from Gov. Mike Pence, presented by Thomas C. Fite, director of the Indiana Department of Financial Institutions. This award was in addition to an IBA plaque presented to Head to thank him for his service. New members of the IBA Forty Year Club also were recognized at the banquet, each receiving an IBA lapel pin. Closing out the convention were the always-exciting prize drawings. Steven Ross, Lake City Bank, Warsaw, won the Indiana BANKPAC sweepstakes of an all-expenses-paid trip for two to Costa Rica, sponsored by The KeyState Companies. The grand prize drawing of his and hers TAG Heuer Swiss dress watches, sponsored by The SHAZAM Network, went to Keith M. “Doc” Ernst, First National Bank, Cloverdale. Thank you to all attendees and sponsors who made this event a success. Please plan to join us at French Lick Resort for next year’s IBA Annual Convention, to be held Sept. 10-12, 2017. We look forward to hosting you! t Allied Solutions Angott Search Group Anthem Associated Bank The Baker Group Bankers’ Bank BITS BKD, LLP BOK Financial Institutional Advisors Bose McKinney & Evans LLP Cinnaire Corporation Crowe Horwath LLP Donaldson Capital Management Equias Alliance Executive Benefits Network Federal Home Loan Bank of Indianapolis Floodplain Consultants Gibson Teldata Inc. IBA Insurance Agency Inc. IBA Service Corporation Independent Community Bankers of America Infotex Investors Title Insurance Company K4 Architecture + Design Keefe, Bruyette & Woods The KeyState Companies Krieg DeVault LLP Lee & Mason Financial Services Matrix Integration Monroe Shine & Co. Inc. PCBB Plante Moran Thank You, IBA Annual Convention Sponsors! An important function of each IBA Annual Convention is to conduct official business. On Sept. 12, new officers for 2017 were elected. Also at the meeting, IBA Chair Michael H. Head recognized two current directors who will be retiring from the IBA board at year-end 2016. New Officers Elected Effective Jan. 1, 2017 Chair – Annette M. Russell, Security IBA Annual Convention Elections Professional Bank Services Inc. Profit Resources Inc. Promontory Interfinancial Network LLC Renninger & Associates LLC The SHAZAM Network Silverback SmithAmundsen LLC TIB-The Independent BankersBank Title Center of Indiana LLC TransFund Travelers UMB Bank Wilmington Trust, NA Young & Associates Inc. Federal Savings Bank, Logansport; First vice chair – Clay W. Ewing, German American Bancorp, Jasper; Second vice chair – Andrew J. Briggs, Bank of Geneva. Other Board Election and Re-Elections Effective Jan. 1, 2017 Benjamin J. Bochnowski, Peoples Bank, Munster Archie M. Brown Jr., MainSource Financial Group Inc., Greensburg Jeffrey W. Gump, Farmers and Merchants Bank, LaOtto Matthew W. Howrey, North Salem State Bank Board Retirements Effective Year-End 2016 Gregory Maxwell, Farmers State Bank, Mentone; Larry W. Myers, First Savings Bank, Clarksville.
10 Hoosier Banker October 2016 CONVENTION COVERAGE Welcome to your Indiana Bankers Association Annual Convention. During the convention, you will have many opportunities to enjoy some fun activities, network with your peers and learn more about the issues of the day. One of the important functions at this convention each year is to update membership on the status of your Association. Upon the conclusion of announced mergers, the IBA will have 110 members headquartered in Indiana, 18 members headquartered outside of Indiana, and four trust companies, for a total of 132 members. That is 10 fewer than what was reported a year ago, as mergers continue to shrink the number of bank charters. In addition we have 165 associate members that continue to support the IBA financially through dues, booth spaces, sponsorships and advertising. The IBA continues to report very strong financial results, with total assets of $11.8 million and liabilities of $1.8 million, for an equity position of $10 million. Much of that has come through entrepreneurial pursuits over the past 15 years. As proof of that, in 2015 the IBA had a net profit of $3.3 million, of which $3.2 million came from the New Markets Tax Credits program. When the New Markets Tax Credits program ends in tax year 2017, the IBA will have earned about $8 million. Since the IRS has a threeyear look back on audits, it will be late in 2021 when we can be sure that there are no challenges to tax returns that are related to the New Markets Tax Credits program. Consequently your board has taken the appropriately conservative position that we should not utilize those funds prior to that time. However, even in the face of our continuing industry consolidation, dues have not been increased since the merger with the Community Bankers Association of Indiana 10 years ago. The most important service that the Association provides for members is our legislative proactivity before the Indiana General Assembly each year. We have had much success over the past several years. This year was no exception. Amber Van Til and Dax Denton were able to secure language that clarifies that state law permits appraisals to be done by the lender for residential real estate loans of $250,000 or less, making state law consistent with FIRREA. They also worked with Sen. Rod Bray and Rep. Tom Washburne to pass clarifying language on which box to check regarding deficiency judgements on foreclosed property. This issue resulted from the TRID form now required to be completed, and differing legal opinions as to how it should be interpreted. Another bill increased from 10 days to 20 days the amount of time a lender has to report to the Indiana Department of Insurance information contained on the RREAL IN form. Yet another example of our legislative success, also brought forward by Sen. Bray, was the Foreclosure Mischief bill. This bill sets various levels for misdemeanors or felonies for intentionally damaging, defacing or permanently removing an object from a property in foreclosure. That bill also adds foreclosed or vacant property to the criminal trespass code. These are important measures that will help lenders be more efficient. Also of great importance to IBA members is the educational programming provided by the Association. During the past year, we have offered about 400 webinars and 200 days of seminars, schools, series, conferences and forums. No other banking IBA 2016: Wrapping up a Successful Year Michael H. Head, chair 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 (USI) Foundation, Deaconess Health System and Habitat for Humanity of Evansville. Head currently is serving on the advisory board of the USI Romain School of Business, the West Side Professional and Business Association and as treasurer of the St. Mary’s Medical Center Foundation board. He also serves as a member of the Independent Community Bankers of America lending committee, and he has served on the board of the Indiana Bankers Association as first vice chair, second vice chair and as a southwest region director. Head earned a bachelor’s degree from the University of Southern Indiana and an MBA from the University of Evansville. Annual Convention address by: Michael h. head First Federal Savings Bank, Evansville IBA Chair 2016
11 Hoosier Banker October 2016 Washington Trip coming up in two weeks, Sept. 25-27. We currently stand at 44 bankers, nine associate members, 12 spouses and five staff members, for a total of 70 people. That is 13 fewer bankers than last year, and about 20 fewer total attendees. So come on and add your name to the list. Your only cost is the transportation to and from DC and your hotel room. Meals and transportation in DC are paid by the IBA and associate member sponsors. This year has been an unforgettable experience. I appreciate the confidence that you showed in me by electing me to be your chair this year, and I thank you. t Photos from the 2016 IBA Annual Convention are available on pages 14-16. To view all convention photos, go to Hoosier Banker Digital at indianabankers. org, and click on the photo dates below: • Day 1 – Sept. 11 • Day 2 – Sept. 12 • Day 3 – Sept. 13 IBA Annual Convention Photos association in the country provides as much educational programming. Plus the IBA Mega Conference is the largest event hosted by a state bank trade association in the country, this year having nearly 90 booth spaces and over 1,350 attendees, which was a new record. The IBA Future Leadership Division continues to increase involvement. In the past few years, it has initiated an FLD Annual Conference held in November, an FLD Day at the Statehouse during the legislative session, and continues the Leadership Development Program that has been extremely successful. If you do not have people from your bank involved with the FLD, I urge you to take another look at it. This year also marks the 100th anniversary of Hoosier Banker magazine. Every month for the past 100 years, Hoosier Banker has been published, through world wars, depressions, high interest rates and low interest rates. Laura Wilson, IBA vice president-communications, has been responsible for the content, assembly and distribution of Hoosier Banker for the past 29 years. In December there will be a commemorative issue celebrating the past 100 years. Also 2016 marks 200 years of statehood for Indiana. Your Association was named the sponsoring partner by the Indiana Bicentennial Commission for the distribution of the bicentennial medal. Each of you have displayed in your offices order forms for this precious medal. Thank you for helping our industry be involved in this momentous occasion. The Indiana Bankers Association is undeniably one of the most successful state bankers associations in the country. The support of our members of the programs offered by the IBA is certainly the foundation upon which that success rests. Along with that is the depth, experience and quality of the staff. I have had the opportunity to visit with bankers and other state association executives during the past couple of years, and the high regard that is held of the IBA is obvious. It certainly has made me proud to represent all of you as chair this year. In the past year, IBA staff was recognized by the Indiana Society of Association Executives with its prestigious statewide Star Awards. Specific categories and individuals were: • Outstanding Individual Program or Event, won by Dax Denton and Christina Bennett for the FLD Day at the Statehouse. • Outstanding Non-Dues Revenue Program, won by Rod Lasley for the success of the IBA marketing package program available to IBA associate members. • Finally, Amber Van Til was named Association Professional of the Year. Amber is the sixth IBA staff member to win this award. No other association has won this award more than once. That certainly speaks to how highly the peers in the associations throughout Indiana regard the IBA staff. The IBA also recognized some staff members with promotions this year. As you know, this year we have focused on management succession, as Joe DeHaven is retiring at the end of 2016. In preparation for that, Amber Van Til was named president in March and will become president and CEO on Jan. 1, 2017. Dax Denton will assume the role of leading the IBA government relations efforts and was promoted to senior vice president of government relations. The IBA hired Erika Hall in May to work with Dax in the government relations area. Erika was named assistant vice president upon her hiring. One of my goals for this year was to take our Indiana BANKPAC program up to another level. We have been working hard to collect contributions to the PAC. As a result of efforts over the past several years, we have grown into one of the larger association PACs in Indiana. Last year we raised $267,000 for the PAC, and I thank you for making those donations. And I know that many of you have made donations in 2016, which I also thank you for. Another of my goals is to increase attendance to the IBA Annual Michael H. Head, president and chief executive officer of First Federal Savings Bank, Evansville, and 2016 chair of the Indiana Bankers Association, was honored as a Sagamore of the Wabash by Gov. Mike Pence at the 2016 IBA Annual Convention.
12 Hoosier Banker October 2016 CONVENTION COVERAGE I am honored and excited to be elected as IBA chair for 2017, and being the first woman to hold this position adds to the honor of this moment. Thank you for the confidence you have shown in my ability to ascend to this role. Next year will be exciting for me, also, because I will be working so closely with Amber Van Til as the new IBA president and CEO. While Amber will not be the first woman to lead the staff, she will be the first to carry the titles of president and CEO. From 1924 through 1933, Forba McDaniel led the staff with the title of secretary. During the next year, there are several items that are already on the planning schedule. First, we have been proactively searching for space to relocate the association headquarters. While we will continue to have a small office downtown for the government relations efforts during session, we feel that it is important to house all staff together as much as possible, and the current location does not have enough space to accommodate that. Plus the location of the present building is in a declining area. We believe that the safety of our staff and guests is a paramount concern upon which we must act. We have had our current building on the market for about a year and have had very limited interest from potential buyers. We will redouble our efforts to sell the building upon the securing of new space. In the past few years, many state banker’s associations have started a women’s conference. These have met with great success, so we are beginning to make plans for a women’s conference in 2017 for the IBA. When the dates are announced, please take a hard look at the agenda and determine who would benefit from this program in your bank. Last year the IBA endorsed Financial Forms and Systems, better known to you as FF&S, for all of your forms and many office supplies. We would encourage you to invite Jeff Williams into your bank to look at your form usage to determine if he can save you some money. We will be working with Jeff and our other endorsed partners in 2017 to provide discounts to you. These companies share revenue with the Association and its for-profit subsidiaries that substantially supplement your member dues. Thus we are able to continue to keep your dues at the same level they were 10 years ago. So we urge you to consider these endorsed partners when shopping for services and products. In that same vein, I would urge you to thank the companies that have purchased booth spaces and provided sponsorships and advertising at this convention. Those companies support the IBA throughout the year. This support amounts to hundreds of thousands of dollars each year, and also contribute to keeping member Taking the IBA to New Heights in 2017 Annette M. Russell, first vice chair of the Indiana Bankers Association, is president and chief executive officer of Security Federal Savings Bank, Logansport, and IBA chair-elect for 2017. She joined the bank in 1991. A certified public accountant, Russell is a graduate of Indiana University-Kokomo, of the Graduate School of Bank Investments and Financial Management and of the Stonier Graduate School of Banking. She serves on the American Bankers Association Community Bankers Council, and in June 2016 she was appointed to the Indiana Board of Depositories by Gov. Mike Pence. Past involvement includes service on the board of trustees of Logansport Memorial Hospital; as campaign chair for the United Way; as chair of the Logansport/ Cass County Economic Development Corp.; on the Reading Railroad advisory board; and on the boards of directors of the Cass County Chamber of Commerce and Special Olympics of Cass County. Additionally she had prior service on the board of the Indiana Bankers Association as second vice chair and northwest region director. Russell was granted the Indiana University Kokomo Alumni Association’s Distinguished Alumni Award in 2006, was inducted into the IU Kokomo Alumni Hall of Fame in 2013, was named Chamber of Commerce Business Woman of the Year for 2007-08 and completed the IBA Leadership Development Program in 2013. She has been honored twice by NorthWestern Financial Review magazine ‒ as a Rising Star in Banking in 2010 and as an Outstanding Woman in Banking in 2014. Annual Convention address by: annette M. Russell Security Federal Savings Bank, Logansport IBA Chair-Elect 2017
13 Hoosier Banker October 2016 dues low and keeping registration for the IBA Mega Conference and Annual Convention low. Mike Head referred earlier to the quality of our staff. I certainly agree with his assessment. Even with all of the success that the IBA has enjoyed the past several years, Amber is coming in with a goal to take the organization to a higher level. The board has approved a staff professional development program. That program has already begun and will continue well into next year. Because of this commitment by the board, the board postponed the strategic planning process that had been originally scheduled for 2016. That process will now be scheduled for the fall of 2017. I want to challenge you to think of how the IBA can help your institution deal with problems or create opportunities. The IBA is only as good as the input from members, so please help us out next fall with your great ideas, so that together we can make the IBA an When Annette M. Russell, president and chief executive officer of Security Federal Savings Bank, Logansport, takes office as chair of the Indiana Bankers Association in 2017, she will be the first female in the Association’s 120-year history to serve in the IBA’s top leadership position. even better organization than it is today. We will have a long general assembly session in 2017 that will, no doubt, bring some challenges to us as an industry. Legislative decisions coming from Washington, DC, continually bring challenges to your ability to serve your customers and communities. The IBA, working in conjunction with both the American Bankers Association and Independent Community Bankers of America, will be there for you. We will continue to need your support of grassroots efforts and for you to fund the PAC. You have done such a good job of that in the past several years. I ask that you continue to stand up for our important industry with your time and money. I assure you that I will lead the board of directors to the very best of my ability and accept that challenge for 2017. I am humbled and honored The following IBA members were presented with Forty Year Club lapel pins at the Annual Convention: Robert A. Buhle, Centier Bank, Northern Indiana Kay Caley, Bippus State Bank, Huntington Robert D. Heuchan, Mutual Savings Bank, Franklin Kirby King, First Federal Savings Bank, Evansville Robert A. Michael, iAB Financial Bank, Fort Wayne Barbara Peterson, MutualBank, Muncie Brian D. Sprunger, Garrett State Bank Marvin Vincent, MutualBank, Muncie IBA FortyYear Club Inductees Note:A full listing of all IBA Forty Year Club members is scheduled to appear in the December Hoosier Banker. to represent the banking industry in Indiana. I am excited to work with the outstanding board of directors that has been elected. Together, we can do amazing things. Thank you for this opportunity. t {CECL is coming.} Are you ready to implement FASB’s final standard relating to the financial instruments — impairment project (CECL)? CECL is arguably the largest change in accounting for financial institutions in the last 30 years and has widespread implications for the industry. Join us for a webinar, the first in a series, that will enable financial institution professionals to fully comprehend and adopt the new standard. September 14, 2016 | 2 p.m. EST This webinar is eligible for one CPE credit. A higher return on experience. Register now: webinars.plantemoran.com
14 Hoosier Banker October 2016 CONVENTION PHOTO COVERAGE
15 Hoosier Banker October 2016
16 Hoosier Banker October 2016 CONVENTION PHOTO COVERAGE Continued
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18 Hoosier Banker October 2016 HOOSIER BANKER HERITAGE: 2000-2009 The first decade of the 2000s, sometimes called the “aughts,” was anything but empty. Early in the decade, terror crashed out of blue skies on a crisp September morning. That day, 9/11, became an inflection point, marking the start of a forever changed world. On the closing side of the decade, economic disaster hit with the financial crisis of 2008. Tenuous deal-making by non-depository institutions, coupled with spiraling property prices, brought on the worst recession since the Great Depression. For the banking community, reputational insult added to economic injury, as misunderstandings led to miscast blame on the industry. Other notable events marked the early 2000s. The United States engaged in military action in Afghan1916 - 2016 YEARS istan and Iraq, in response to proliferation of terrorism. Hurricane Katrina caught victims off guard, spurring questions about emergency preparedness and disaster response. And in January 2009, President Barack Obama became the first African American to hold the highest office of the land. For better or worse, the early 2000s also ushered in virtual socializing. Facebook, LinkedIn, Twitter and YouTube were incubated during this timeframe. Initially dismissed by the business world, social media channels have since become workplace expectations. In banking, several milestones occurred during in the first decade of the century: • 2001 – The USA PATRIOT Act enhanced Bank Secrecy Act reporting responsibilities and requirements for banks; • 2002 – The Sarbanes-Oxley Act set heightened standards and oversight for accounting at public companies, including banks; • 2003 – The Check 21 Act streamlined electronic check processing via virtual check deposits; • 2004 – Basel II capital standards updated prior standards regarding how banks are capitalized; further updates took place in 2008 with Basel III; • 2008 – A $700 billion bailout plan and the Troubled Asset Relief Program addressed the needs of some financial institutions, yet also provided fodder for industry criticism. In Indiana, news was brighter than for the much of the nation. Hoosier banks were by and large able to weather the financial crisis, thanks to conservative lending practices, stable housing prices and a prior winnowing of banks in the 1980s. The Indiana banking community also benefited from two Association mergers during the decade. On Jan. 1, 2000, the Indiana League of Savings Institutions merged with the Indiana Bankers Association, and on Oct. 1, 2006, the Community Bankers Association of Indiana likewise merged with the IBA. Where once there had been three organizations representing Indiana banks, by late 2006 the best of each had been forged into a single, robust entity, one of the strongest in the nation. 2000 Discussing issues of the day are (left to right): Rep. Sue Scholer; Gary Neal and John Lippincott of Huntington National Bank, Indianapolis and Paul Ohmart, David A. Noyes & Company, Indianapolis. 2002 Bankers concentrate at a legislative briefing. 2001 Ben Bochnowski (far left), then a college junior, and his father David Bochnowski (far right), are pictured with family for an article about David’s service as chairman of America’s Community Bankers.
19 Hoosier Banker October 2016 Dick Belcher, First Federal Savings Bank, Rochester, is greeted by the “Team IBA” chicken, a.k.a. IBA’s Sandi Crites, at the IBA Annual Convention opening reception. 2007 Joe Pierce (left), Farmers State Bank, LaGrange, and Mike Cox, First Merchants Bank, Muncie, seal the deal on the merger between the Community Bankers Association of Indiana and the Indiana Bankers Association. 2006 At the IBA Annual Legislative Reception, Joe Wellman (left), Peoples Bank,Washington, is joined by Gary Gordon and Maria Quintana of Bank One, Indianapolis. 2003 Mike O’Connor (front left), Peoples State Bank, Francesville, presents a donation check to Katie DeGroot, Junior Achievement area director.Also pictured are bank personnel (middle row, left to right):Vicky Anliker, Bonnie Kopka and Shelley Tankersley; and (back row, left to right): Jeremy Glassford, Ron Kruger,Ter ry Stevens and Roger Cummings. 2004 “Set Your Course for Success” was the theme of the 2005 IBA Mega Conference. 2005 George Ferriell, Bath State Bank, is coaxed onto stage to claim a painting he won at the IBA Mega Conference. 2009 Greg Smitley (left), MarkleBank, presents a scholarship award for the Graduate School of Banking at the University of Wisconsin to Tony Gambaiani, Jackson County Bank, Seymour. 2008
20 Hoosier Banker October 2016 COMPLIANCE CONNECTION About Compliance Connection In order to address compliance inquiries from members, the 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 counsel is Brett J. Ashton, partner with Krieg DeVault LLP, Indianapolis, and chair of the firm’s financial institutions practice group. Submit Compliance Connection questions to IBA’s Erika Hall at ehall@indianabankers.org or to Josh Myers at jmyers@indianabankers.org. Question: Our bank has several pre-need funeral trust accounts that are funded by insurance policies. We would like to be able to redeem the policy and simply fund the trust with other bank funds. Does Indiana law allow us to do so? Answer: No. The issue of converting pre-need funeral trust funds has been the subject of recent confusion by some banks and has attracted the attention of the attorney general’s office. A careful review of the underlying trust agreement should be the first step in determining how any trust account is administered. Ind. Code § 30-2-13 provides guidance with respect to the sale and payment of funeral and burial services, and provides that a purchaser may enter into more than one contract for pre-need services or merchandise that may be funded with cash, either in a lump sum or installment payments, or an insurance policy, or both. Thirty days after the pre-need funeral contract is signed by the purchaser, all property that is paid or delivered to the seller to fund the contract must be irrevocably deposited to an authorized trust or escrow account.1 This information is provided for general education purposes and is not intended to be legal advice. Please consult legal counsel for specific guidance as to how this information applies to your institution’s circumstances or situation. 1 Authorized trust or escrow accounts may be established pursuant to Ind. Code § 30-2-10 (funeral trusts) or Ind. Code § 23-14-49-1 (cemetery escrow or trust accounts). 2 For funeral plans and funeral trusts established prior to 1982, see Ind. Code § 32-2-9-1 et. seq. Pre-need funeral trusts are governed by the Trust and Fiduciaries section of the Indiana Code. Ind. Code § 32-2-10 dictates how a financial institution is to administer these funeral trust funds.2 A funeral trust established under Ind. Code §30-2-10 is only valid if, among other conditions, it is irrevocable. Indiana Code § 30-2-13-14 provides that a contract that has been funded with cash may not subsequently be converted to an insurance policy, and conversely a contract that has been funded with an insurance policy may not subsequently be converted into cash. A person who knowingly violates the provisions of Ind. Code § 30-210 is considered to have committed a Class A misdemeanor, subject to imprisonment for up to one year and a fine of as much as $5,000. t Richard P. Roberts has been elected to the board of directors of Greenfield Banking Company. He is a landscape architect and director of construction services for Engledow Group. Roberts is active with the Indiana Parks and Recreation Association, Greenfield Board of Parks and Recreation, and Sigma Lambda Alpha. He earned a bachelor’s degree from Ball State University. Joey Johnson has been elected to the board of directors of Greenfield Banking Company. He is a retired administrator from Greenfield-Central Community Schools, where he serves as a consultant, and he owns Soncentric LLC. Johnson earned two bachelor’s degrees from Purdue University. t FRoM the BoaRd RooM CRA Partners, powered by the Senior Housing Crime Prevention Foundation, offers a three-minute video overview of financial exploitation of the elderly. To view, go to Hoosier Banker Digital at indianabankers.org, and click on the red YouTube arrow. t Video Bonus: Elder Financial Abuse Follow Us onTwitter Follow the Indiana Bankers Association on Twitter @ IndianaBankers for news about Association and advocacy issues. Additionally, follow @BankersSpeakUp for information about pressing industry topics. t
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