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2016 Vol. 100 No. 2

Hoosier Banker FEBRUARY 2016 INSIDE IBA hosts successful Legislative Briefing and Reception. Story on page 9. 1916 - 2016 YEARS

2 Hoosier Banker February 2016 Member: FINRA and SIPC Oklahoma City, OK | Atlanta, GA | Austin, TX | Indianapolis, IN Salt Lake City, UT | Springfield, IL | 800.937.2257 | www.GoBaker.com *The Baker Group LP is the sole authorized distributor for the products and services developed and provided by The Baker Group Software Solutions, Inc. To find out how The Baker Group can assist your institution in defining and meeting its financial objectives, call your Baker representative or Ryan Hayhurst at 800.937.2257. Since 1979, The Baker Group has helped community financial institutions steer through unpredictable economic environments using robust tools and resources for interest rate risk and investment portfolio management. As we encounter 2016’s anticipated financial crossroads, our task is to help financial institutions develop effective processes and strategies that will ensure optimal performance in an uncertain financial environment. Education Tailored Board Education Webinars for ALCO Interest Rate Risk Seminars Investment Strategies Develop Quarterly Strategies Determine Optimal Relative Value Manage Risk vs. Reward Tradeoff Asset/Liability Management Evaluate Earnings and Capital at Risk Simulate Stressed Rate Scenarios Analyze Risk Management Strategies Our proven approach of total resource integration utilizing software and products developed by Baker’s Software Solutions* — combined with our solid investment experience and advice — makes us the investment firm of choice for financial institutions. When standing at the financial crossroads, The Baker Group can help you make the right choices for your institution.

TABLE OF CONTENTS VOLUME 100 NO. 2 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 9 IBA HOSTS SUCCESSFUL LEGISLATIVE BRIEFING AND RECEPTION Amber R.Van Til, IBA FEATURES 5 PRESIDENT’S PONDERINGS S. Joe DeHaven, IBA 6 IBA BOARD OF DIRECTORS 2016: COMPLETE ROSTER 7 IBA BOARD REVIEW Kent L. Parisien,The First National Bank of Odon 8 IBA CALENDAR OF EVENTS 12 HOOSIER BANKER HERITAGE 14 CINNAIRE: NEW NAME, SAME BEST-IN-CLASS SERVICE Mark S. McDaniel and Frederick Hash, Cinnaire Corporation 18 INFLUENCE AND ACTION Camden R. Fine, ICBA 20 TIME FOR POLITICAL MUSCLE-BUILDING Robert S. Nichols,ABA OPERATIONS / TECHNOLOGY 24 EMVTECHNOLOGY:WHATYOU NEEDTO KNOW Tracey Santor,Travelers DEPARTMENTS 16 TAKING IT EASY 17 COMPLIANCE CONNECTION Lori Jean, Krieg DeVault LLP 17 NEW BRANCHES, BUILDINGS & OPENINGS 21 FROM THE BOARD ROOM 21 ASSOCIATE MEMBERS’ CORNER 22 BANKING ON COMMUNITY 23 HONORABLE MENTIONS 25 VIDEO BONUS 27 BANKERS ON THE MOVE 30 ANNIVERSARY MILESTONES 30 ADVERTISERS INDEX On Jan. 19, the IBA hosted its annual Legislative Briefing and Reception. 1916 - 2016 YEARS 3 Hoosier Banker February 2016

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 Chairman ..................... Annette M. Russell, Security Federal Savings Bank, Logansport SecondVice Chairman ............................................ Clay W. Ewing, German American, Jasper Immediate Past Chairman .................................. Larry W. Myers, First Savings Bank, Clarksville 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 ...................... Kristin Marcuccilli, STAR Bank, Fort Wayne Non-Indiana Headquartered Bank Director ............... Tim Massey, BMO Harris Bank, Indianapolis Northeast Region Directors Gregory Maxwell, Farmers State Bank, Mentone 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 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 Ernst, First Financial Bank, NA,Terre Haute J. Daniel Maddox, Citizens State Bank, New Castle Andrew J. Saner, MainSource Bank, Greensburg Stephanie Schrage, Centier Bank, Northern Indiana 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 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

5 Hoosier Banker February 2016 FEATURE President’s Ponderings S. Joe DeHaven, President & Chief Executive Officer, Indiana Bankers Association Carlson Completes IBA Board Roster Joseph D. Carlson, president and chief executive officer of Community State Bank, Royal Center, has joined the Indiana Bankers Association board of directors as a northwest region director. Carlson additionally is vice president of Community Bancorp. He joined Community State Bank in 1979 as agricultural loan officer and has advanced through various positions, including vice president-data processing and network administrator. Carlson operates two livestock enterprises with his family, Carlson Cattle and Crooked Creek Boer Goats, and is owner of The Royal Centre Record newspaper. He earned a bachelor’s degree from Purdue University and has completed the SW Graduate School of Banking at Southern Methodist University. The IBA welcomes Joe Carlson, whose recent appointment to the board brings it to full capacity. An updated board roster appears on the following page. t In the November 2008 Hoosier Banker, this President’s Ponderings column outlined in detail the significant part played by Congress over a 25-year period that set the foundation for the financial crisis that was at that time unfolding. In the column, I warned IBA members that Congress believed it had bailed out the banking industry, and that Congress would extract its pound of flesh with what I called “The Financial Institutions Punishment Act of 2009” (FIPA). I went on to warn that any organizations that participated in the mortgage process would be lumped together as “banks.” Little did I know back then how accurate the description would prove to be regarding what was about to happen. Yet as I re-read that article today, those views appear to be naive as to the depth and breadth of what really happened. The FIPA did not come about until 2010, and its name was the Dodd-Frank Wall Street Reform and Consumer Protection Act ‒ or the Dodd-Frank Act, in current vernacular. This massive piece of legislation contained every wish list item ever dreamed up by consumer groups, the retail industry and anti-banking groups. Bank regulators piled on to show Congress that each was tougher than the other bank regulators. It was a nightmare for those of us who support free markets and capitalism, particularly those who are proponents of an efficient and effective banking system. One of those regulators who added to the fray was Sheila C. Bair, then-chairman of the Federal Deposit Insurance Corp. She practically single-handedly convinced Sen. Susan Collins, R-Maine, to sponsor an amendment to equalize large bank and small bank holding company Tier I capital. This amendment caused serious problems for community banks and eliminated one of the few methods that community banks had to raise capital: trust-preferred securities. The amendment was slightly toned down during conference committee, but unfortunately the trust-preferred language remained. This ill-conceived amendment was one of the most egregious elements of the Dodd-Frank Act, among its many other egregious provisions. Bair now serves as president of Washington College in Maryland. Even in her new role, she often chimes in on current banking issues as they are winding their way through Congress, or as regulations are being drafted. Recently Bair wrote an article for the American Banker, the daily newspaper of the banking industry, that was published on Jan. 7. In the article, titled “Stop Treating Small Banks as if They Caused the Crisis,” it seems that Bair has finally figured out what so many of us previously told her, namely that the Dodd-Frank Act would be unfairly punitive to innocent community banks. In describing regulators’ reaction to the crisis, Bair wrote that regulators “failed to sufficiently differentiate regional and community banks ‒ bread-and-butter lenders that for the most part remained healthy and profitable before, during and after the crisis ‒ from the main actors in the subprime debacle: the originators of toxic mortgages and the big firms that structured all those exotic securities and derivatives products on top of them.” Sounds a lot like the villains were mortgage originators and investment bankers, not commercial bankers. Nevertheless, commercial bankers have paid a significant price, reputationally and financially. While this is the closest admission of fault that I have seen from anyone involved in the process, she does go on to state that this occurred “notwithstanding the protests of some Federal Deposit Insurance Corp. board members.” I do not recall protests from former Chairman Bair. Regardless, Bair continues to have a voice in Washington, D.C., and it is refreshing to read her words advising people that community banks, indeed all banks, were harmed by decisions made as a result of the Dodd-Frank Act. In her article, she further outlines support of the bill introduced and passed by the Senate Committee on Banking, Housing, and Urban Affairs by committee Chairman Richard Shelby, R-Alabama. The Shelby bill is supported by the banking industry. Perhaps others who composed much of the Dodd-Frank Act will come forth in agreement with Ms. Bair, so that the pendulum of banking regulations can swing back to a sweet spot where banks can serve customers fairly and appropriately, yet the safety and soundness of the system remains secure.

6 Hoosier Banker February 2016 Southeast Region Archie M. Brown Jr. MainSource Financial Group Inc., Greensburg IBA BOARD OF DIRECTORS 2016 IBA Officers President & Chief Executive Officer S. Joe DeHaven Indiana Bankers Association, Indianapolis Chairman Michael H. Head First Federal Savings Bank, Evansville First Vice Chairman Annette M. Russell Security Federal Savings Bank, Logansport Regional Directors 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 Gregory Maxwell Farmers State Bank, Mentone Northwest Region Arden L. Cramer Logansport Savings Bank Southwest Region Michael L. Baker State Bank of Lizton, Brownsburg Southwest Region Kent L. Parisien The First National Bank of Odon Southeast Region Dennis Wayman State Bank of Medora ICBA Sate Director David M. Geis Jackson County Bank, Seymour Northeast Region Michael C. Marhenke iAB Financial Bank, Fort Wayne Northwest Region Benjamin J. Bochnowski Peoples Bank, Munster Southeast Region George W. Ferriell Bath State Bank Northeast Region Michael S. Zahn First Federal Savings Bank, Huntington Southwest Region Matthew W. Howrey North Salem State Bank Constituent Directors Second Vice Chairman Clay W. Ewing German American, Jasper Immediate Past Chairman Larry W. Myers First Savings Bank, Clarksville Northwest Region Joseph D. Carlson Community State Bank, Royal Center

7 Hoosier Banker February 2016 ASSOCIATION UPDATE Nothing motivates me like being told I can’t do something. When I played football in high school, I was told that I would never make college football. That made me work harder, and later I was able to join the football team of Austin Peay State University as a walk-on player. Hearing “you can’t” just feeds my competitive spirit. One place I’ve heard plenty of encouragement, though, is here at The First National Bank of Odon. What is unique about my career is that I started out at the bank as a part-time janitor during high school. After high school and during some college breaks, I also continued to work here as a bookkeeper and teller. When I was studying accounting at Austin Peay, I didn’t know exactly what my plans were, but I knew I wanted to be in business. It was a very good opportunity, then, when I graduated in 1994 and the bank asked me to come back to take on a vice president role. I was working in commercial lending, agricultural lending and collections – basically a jack of many trades. It was a busy job, dealing with lines of credit on the commercial side, real estate loans and some smaller agricultural loans. There also were the collection accounts, plus some car and truck loans, and personal loans. All of this experience, on top the part-time work I had done as a student, gave me exposure to the full gamut of what our bank does. Then in 2006, when our president was getting ready to retire, I put in my name for consideration. At that point I had finished my first year of the Graduate School of Banking at the University of Wisconsin, but I knew I needed more education and training. I told the board, “If you give me this opportunity, and help me to learn, I promise I’ll do the best job I can do.” They took a chance on me, and here I am. Today I can’t imagine being anywhere else. There’s no better place to live, work and raise a family than Daviess County. This area of the state has rich agriculture and healthy industry, but all with small-town values. Community involvement is important for both the bank and me. My past community outreach includes the Association of Military Banks of America Board, the West Gate @ Crane Technology Park Authority Board, the Overton Moore Scholarship Board and the Walnut Hill Cemetery. Currently I am active with the Title Center of Indiana. Recently I stepped down from volunteer coaching in football and track at North Daviess High School. It was a big time commitment, and I appreciate that the bank afforded me the time. I’ve met a lot of good people through coaching, and I enjoyed seeing young people succeed on and off the field. My latest commitment is to the Indiana Bankers Association board of directors. I feel it’s important to be involved with the Association, because the IBA does so much for Indiana banks, both at the state level and nationally. Without the IBA, banks in our state – especially small institutions – would not have a voice. The First National Bank of Odon has been in operation for 125 years, and our strength is in our relationship-building. We were the first banking institution to go onto the Crane Naval Base, because we were asked to be available to cash checks for soldiers. We later developed relationships with Naval Academy graduates, and we now have customers throughout all 50 states, even one in Madagascar. Our employees are here for the long haul. Most are local, several have been with us for decades, and they all take a genuine interest in our customers. When people come to this bank, they don’t deal with automated processes, but instead with real people. Our bank has been practicing good customer service for years and years. At home my family keeps active. My wife Mikki studied technical writing when we were students at Austin Peay, and she now works for a contractor that services Crane Naval Base. We have been blessed with a son, Hayden, and a daughter, Hadley. Hayden is 14 and will be a high school freshman next year. He is active with basketball, track and football. Hadley, age 10, also enjoys basketball and track. She recently did dance and is now into softball. In the last couple of years, I’ve taken on CrossFit as an ambition. CrossFit is a strength and conditioning program accomplished through varied exercises. I first got involved to get into shape, but then my competitiveness took over, and now I participate in national competitions. CrossFit has created a healthier lifestyle for my whole family, and lets my kids see an example of setting your mind to something and working toward it. Hard work and responsibilities are values that my mother instilled in me, and I try to pass those along to my children. Unfortunately my mother passed away a few years ago. I was adopted when I was three days old, and she passed away three days after my 39th birthday, so I had her in my life exactly 39 years. Those same values that my mother passed along are shared by my bank, this community and the Indiana Bankers Association. I am humbled and honored to be serving on the IBA board, and I thank you for this opportunity. Board Review Kent L. Parisien, Southwest Region Director The First National Bank of Odon

8 Hoosier Banker February 2016 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 Alternative Delivery Channels … Available at your convenience via Webinar, CD-ROM or On-Demand CRE Appraisals: Reviewing and Interpreting Feb. 11 - IBA Center CRE Cash Flow:Analyzing IncomeProducing or Rental Real Estate Feb. 12 - IBA Center Chief Financial Officer Forum Feb. 16 - Group 1 - IBA Center Feb. 19 - Group 2 - IBA Center Auditing Integrated Disclosures Feb. 17 - IBA Center Senior Lender Forum Feb. 17 - Group 1 - IBA Center Feb. 18 - Group 2 - IBA Center Call Report: Review and Update Feb. 18 - IBA Center IRA Basics Feb. 23 - IBA Center Marketing Directors Forum Feb. 23 - IBA Center Advanced IRA Review and Update Feb. 24 - IBA Center IT and Operations Officer Forum Feb. 25 - Group 1 - IBA Center Feb. 26 - Group 2 - IBA Center Training the Credit Analyst March 2-3 - IBA Center Compliance Fundamentals: Deposits March 3 - IBA Center Residential Construction Lending March 8 - IBA Center Certified BankingVendor Manager March 8-9 - IBA Center How to Prepare and File Uniform Commercial Code Financial Statements March 9 - IBA Center Calculating and Maintaining the Allowance for Loan and Lease Losses, Including a Review of the Proposed CECL March 10 - IBA Center Writing Compliant Real Estate Evaluations Internally March 15 - IBA Center Indiana Deposit Account Administration March 15 - IBA Center March 16 - Fort Wayne Hotel Navigating and Understanding the Indiana Code for Compliance Professionals March 17 - IBA Center Leadership Development Program - Session 1: It’s Simple, But It Isn’t Easy March 22-25 - Wooded Glen Retreat & Conference Center, Henryville Cyber Compliance:The Most Common Cybersecurity Deficiencies, and What to Do About Them March 24 - IBA Center TRID Essentials March 29 - IBA Center Security, Fraud and Risk Management Conference March 29-30 - Indianapolis Marriott North Social Media Bootcamp April 12-13 – IBA Center Branch Management Series: Session 2- Growing the Retail Bank April 19 – IBA Center Community Reinvestment Act April 19 – IBA Center Flood Insurance Update and Review April 20 – IBA Center Essentials of Banking: Session 1 - Banking 101 April 20 - IBA Center Consumer Lending School April 26-27 - IBA Center IBA Mega Conference May 3-5 - Indiana Convention Center Community Bankers for Compliance Series - Session 2 May 9 - The Landmark Conference & Reception Centre, Fort Wayne May 10 – IBA Center May 11 – IBA Center Leadership Development Program - Session 2: Do SomethingThat Scares You May 11-13 – Wooded Glen Retreat & Conference Center, Henryville Train the Trainer: Plans, Programs and Processes That Work May 17 - Indiana Convention Center Senior Retail Banking Forum May 18 – IBA Center Risk Management Officer Forum May 19 – IBA Center Compliance for Loan Processors May 19 – IBA Center Commercial Lending School June 5-10 – IBA Center Chief Financial Officer Forum June 14 - Group 1 – IBA Center June 17 - Group 2 – IBA Center Senior Lender Forum June 15 - Group 1 – IBA Center June 16 - Group 2 – IBA Center Real Estate Lending Compliance June 15-16 - IBA Center Essentials of Banking: Session 2 - Business Operations and Management June 23 - IBA Center IT & Operations Officer Forum June 23 - Group 1 – IBA Center June 24 - Group 2 – IBA Center Marketing Directors Forum June 28 – IBA Center BSA/AML Compliance School June 28-29 – IBA Center Auditing Regulation Z July 12 – IBA Center Analyzing Tax Returns in SelfEmployed and Small Business Situations July 13 – IBA Center BuildingYour Incident Response Program July 14 - IBA Center Analyzing C&I Business Cash Flow July 14 – IBA Center Community Bankers for Compliance Series: Session 3 Aug. 8 - The Landmark Conference & Reception Centre, Fort Wayne Aug. 9 - IBA Center Aug. 10 - IBA Center Branch Management Series: Session 3 - Leading, Developing and Engaging the Team Aug. 23 - IBA Center IBA Leadership Development Program: Session 3 - Limitations Are Self-Imposed Aug. 24-26 - Wooded Glen Retreat & Conference Center, Henryville Feb. 11 - New Compliance Officer Boot Camp Feb. 17 - HVCRE Appraisal Review: Issues and Case Studies Feb. 17 - Legal Liabilities When Check Fraud Occurs Feb. 18 - OnboardingYour New Hire Feb. 18 - TRID Compliance Hot Spots! Feb. 18 - Audit Compliance Series: Overseeing Bank Performance - The Role of Audit Feb. 22 - Names and TINs: 15 Reasons They May Not Match Feb. 22 - Bank Call Report Preparation for Beginners - FivePart Webinar Feb. 23 - The Banker of the Future - Becoming a Universal Banker Feb. 23 - Determining Cash Flow From Personal Tax Returns Part 1: Schedules A, B, C and D Feb. 24 - Beware! Signature Card Danger Zones Feb. 25 - Understanding Personal Account Ownership and FDIC Rules Feb. 25 - Opening Accounts for Nonresident Aliens:W-8BEN, W-8BENE, CIP and CDD Feb. 29 - For Sales Managers: How to Hire Better Bankers Who Can Sell March 1 - Telephone Consumer Protection Act:WhatYou Need to Know About the New Requirements March 3 - Bank Secrecy Act March 3 - Required Compliance for Commercial Loans Secured by Real Estate March 7 - Call Report for Beginners - Five-Part Webinar March 8 - Analyzing Tax Returns for Mortgage Decisions March 8 - Health Savings Accounts March 8 - Director Series:What Directors Should Know About CECL,ALLL and New Credit Impairment Standards March 9 - Post EMV Card Liability Shift: Managing and Mitigating Card-Not-Present Fraud March 10 - SBA Lending Update: Regulations,Trends and Overview of SBA One March 10 - Notary March 10 - Building and ImprovingYour Compliance Culture March 14 - Call Report for Beginners - Five-Part Webinar March 14 - Audit Compliance Series:Auditing the TRID Compliance - Safe Harbor Expires Feb. 1, 2016 March 15 - Emerging Leader Series: Developing Executive Presence Skills - Presentations, Poise and Professionalism March 16 - Determining Cash Flow From Personal Tax Returns Part 2: Schedules E and F March 16 - Best-Ever Compliance Checklists for Commercial Loans March 17 - Flood Insurance Compliance Update and FAQs

9 Hoosier Banker February 2016 COVER STORY Tuesday evening, Jan. 19, some 200 bankers, legislators and IBA associate members attended the 2016 Indiana Bankers Association Legislative Briefing and Reception, held in downtown Indianapolis. This annual event gives IBA members the opportunity to get to know legislators, discuss important banking issues and thank legislators for their public service. This year’s event began with a morning meeting of the IBA board of directors, followed by a luncheon with the IBA Government Relations Committee, hosted by The KeyState Companies. The luncheon featured a guest presentation by Thomas C. Fite, director of the Indiana Department of Financial Institutions. Following the luncheon, members of the board and the GR Committee met with the IBA Government Relations Team for a review of more than 25 House and Senate bills that potentially could affect the Indiana banking industry. Since the GR Committee serves as a sounding board of banker viewpoint, the meeting was interactive, with the GR Team reviewing pertinent legislation, and member bankers responding with their viewpoints. At 4 p.m., the official Legislative Briefing began with a summary of the most prominent bills of interest to Indiana bankers: • HB 1181 – Department of Financial Institutions • SB 372 – Deficiency Judgments and Foreclosed Property • HB 1136 – Insurance Matters • HB 1349 – Hoosier Employee Retirement Options Portal • SB 12 – Financial Crimes Against the Elderly • SB 221 – Securities and Financial Protection • SB 171 – Insurance Payments to Providers • SB 204 – Tax Sales and Foreclosed Property • SB 183 – Foreclosure Mischief • SB 242 – Loans to Credit Union Officers • SB 308 – Property Tax Matters • SB 309 – State and Local Taxation • HB 1321 – Sales Tax on Services 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. IBA Hosts Successful Legislative Briefing and Reception As has been recent IBA tradition, the briefing also provided a recognition opportunity for member banks of the “200% Club”— banks which contributed at least 200 percent of their fair share goals to Indiana BANKPAC during 2015. Thirty-nine banks were so recognized, and the IBA very much appreciates their support of the PAC. Following the briefing, the evening continued with the Legislative Reception, giving IBA members the chance to mix and mingle with elected officials. Cooperative weather and travel-friendly road conditions aided in the strong turnout. This annual Legislative Briefing and Reception is the first of many grassroots opportunities throughout the year to give IBA bankers a voice in the legislative process. In February the Future Leadership Division is hosting its second annual Day at the Statehouse. This award-winning event gives members and prospective members of the FLD the opportunity to learn about the legislative process and grassroots advocacy in a handson setting. As an aid to members in learning about issues at stake, the IBA publishes an electronic newsletter, IBA Insighter, with regular updates throughout session on bankingrelated legislation. To subscribe at no charge to the newsletter, or for more information about the Day at the Statehouse, contact Josh Myers, 317-917-8047, email: jmyers@ indianabankers.org. t Photo gallery on pages 10-11.

10 Hoosier Banker February 2016 LEGISLATIVE BRIEFING AND RECEPTION PHOTO GALLERY

11 Hoosier Banker February 2016

12 Hoosier Banker February 2016 HOOSIER BANKER HERITAGE: 1920-1929 The 1920s started with a roar and ended with a crash. Booming postwar economics and advances in mass production ‒ along with modernization in music, fashion and other cultural flashpoints ‒ helped embed the “roaring ’20s” moniker. The decade would end, however, 1916 - 2016 YEARS with the stock market crash in October 1929, giving way to the Great Depression that would define the following decade. This month’s Hoosier Banker Heritage focuses on magazine highlights from 1920 through 1929. t A burglar alarm advertisement in 1920 portrayed an “outside gong housing” model available through the O.B. McClintock Company of Minnesota.The ad copy included a plea:“Let us protect you right.” 1920 Volney T. Malott, chairman of Indiana National Bank, Indianapolis, was one of eight bankers depicted in a 1921 article,“Indiana Veterans in Banking.” When he died later that year at age 82, he had completed 67 years in banking. Hoosier Banker launched a column for women bankers in 1921. One of the earliest column articles to appear was “The Power of Enthusiasm,” by author Jean Rich, which concluded with: “Blow your bubbles and dream your dreams.” 1921 “Modern Saving Method” was the caption for this 1922 photo of schoolchildren learning about savings.An accompanying article observed,“The subject of thrift has fostered and developed in the school systems of our country, until today it is taking a place with the three r’s.” 1922 The American Banking Machine Corporation advertised a 1923 “automatic receiving teller,” which “advertises your bank in every home every day and will bring you more new accounts at less money than any other system.” 1923

13 Hoosier Banker February 2016 Detective H.C.Webster (center) is shown in a 1924 photograph leading prisoners from his office to the Marion County jail.The man at left and his accomplice, far right, had confessed to robbing Tuxedo State Bank, Indianapolis. 1924 The first agricultural banking school for bankers in the United States took place in January 1925 at Purdue University, with 46 bankers in attendance. One year later, attendance more than doubled to 93. 1925 The IBA hosted its first annual “state shoot” at Fort Benjamin Harrison in June 1926, with trophies awarded to the winning banks of the Henry County Bankers Association. State shoots were organized to promote and encourage marksmanship among armed bankers, known as “banker vigilantes.” 1926 The July 1928 Hoosier Banker announced the appointment of a new IBA employee: Herman B Wells, hired as part-time field representative.Wells would later become instrumental in the formation of the Indiana Department of Financial Institutions, which he served as a bank supervisor before filling his legendary role as chancellor of Indiana University. 1928 State shoots to test the skills of banker vigilantes were in full swing by the time of this photo collage, depicting scenes from the 1929 shoot. 1929 The architectural firm of McGuire & Shook showcased the interior of First National Bank of Seymour in a 1927 advertisement. 1927

14 Hoosier Banker February 2016 Continued on page 16. FEATURE Great Lakes Capital Fund is pleased to announce its new name. The organization went through an extensive branding process in order to reposition for future growth. Due to expansion into Delaware and surrounding states, in addition to expanded services, “Great Lakes” no longer made sense geographically, and “Capital Fund” was too limiting a description. The detailed name-change process took over a year, and the new name ‒ Cinnaire Corporation ‒ was announced last fall. The first question bankers might ask is, “What does Cinnaire mean?” The answer is that the name was created to reflect company offerings by combining two Celtic words: “cinn” meaning to lead, and “aire” denoting in a caring way. In answer to the next logical question ‒ “What does Cinnaire do?” ‒ the company provides solutions and support to partners through a dedicated, full-service approach. Its progressive approach and loyal, experienced staff create opportunities and provide access to funding and resources that can advance community and economic development efforts. Building upon an exceptional track record, Cinnaire’s responsible financial investment strategies, lending options and value-added services enable investors to help further business and community endeavors. Essentially Cinnaire is a full-service financial partner that supports community and economic development initiatives through creative loans, investments and best-in-class services. It matches impressive community investment opportunities with community-focused investors. Simply put, Cinnaire has a new name, but it offers the same expertise and exceptional services as ever. Equally exciting, Cinnaire proudly announces the 2016 Indiana Community Fund (ICF). It was established to allow banks to invest in a multi-investor fund to support the creation of affordable housing in Indiana communities. The ICF is a partnership between Cinnaire and the Indiana Bankers Association and was designed to broaden the opportunity for community banks to participate as investors in the low-income housing tax credit (LIHTC) program. With a small minimum investment of $500,000 in the ICF, a bank can receive tax credits (and losses) to offset its federal tax liability and generate a solid return on investment. All projects that are included in the Cinnaire: New Name, Same Best-in-Class Service Frederick Hash is senior vice president and director of business development for Cinnaire Corporation. He has been involved in affordable housing and community development finance for more than 25 years, including experience with the Indiana Capital Fund for Housing, Midwest Advisory Services Inc., the Federal Home Loan Bank of Indianapolis and the Indiana Department of Mental Health. Hash earned bachelor’s and master’s degrees from Indiana University. He can be reached at 317-522-5481, email: fhash@cinnaire.com. About the Authors Mark S. McDaniel is chief executive officer and president of Cinnaire Corporation, Lansing, Michigan. He has more than 35 years of community development and affordable housing experience. He has been active with multiple community organizations. A graduate of Michigan State University, McDaniel has been named Entrepreneur of the Year by the Greater Lansing Business Monthly and has been bestowed with the Governors Corporate Service Award and the Terry Duvernay Award. He can be reached at 517-230-5494, email: mmcdaniel@cinnaire.com. Cinnaire Corporation is a Diamond Associate Member of the Indiana Bankers Association and an IBA Preferred Service Provider.

Your Full-Service Community Development Financial Partner We support communities and economic development initiatives through: • Creative Loans & Financial Resources • Investments • Best-In-Class Services Cinnaire will support and enhance community stabilization and economic development by providing our partners with creative financial resources, expertise and best-in-class services. cinnaire.com | 844-4CINNAIRE

16 Hoosier Banker February 2016 Continued from page 14. ICF 1 Crossroads Bank, Wabash Farmers State Bank, Mentone German American, Jasper Horizon Bank, NA, Michigan City iAB Financial Bank, Fort Wayne The National Bank of Indianapolis Old National Bank, Evansville Our Community Bank, Spencer River Valley Financial Bank, Madison Your Community Bank, New Albany ICF 2 FCN Bank, Brookville First Federal Savings Bank, Rochester The First National Bank, Monterey Home Bank, Martinsville iAB Financial Bank, Fort Wayne The National Bank of Indianapolis Old National Bank, Evansville Spencer County Bank, Santa Claus Terre Haute Savings Bank ICF 3 1st Source Bank, South Bend Centier Bank, Northern Indiana First Federal Savings Bank, Huntington German American, Jasper Lake City Bank, Warsaw The National Bank of Indianapolis Springs Valley Bank & Trust Company, French Lick STAR Bank, Fort Wayne Indiana Community Fund Investors Fred Brown, chairman of the board of directors of Farmers State Bank, LaGrange, and of F S Bancorp, has retired from the board. He joined the board in 1978 and was elected chairman in 2011. Brown is a retired pharmacist with Miller’s Super Valu. Bill Skinner has retired from the board of directors of Hoosier Heartland State Bank, Crawfordsville, after 33 years of service. Geri Long has retired from Hoosier Heartland State Bank, Crawfordsville, after 14 years of service. Linda Hudson has retired from The National Bank of Indianapolis after 15 years of service. She was previously with Indiana National Bank and Merchants National Bank during her 41-year banking career. Hudson is a member of the Indiana Bankers Association Forty Year Club. t Taking iT Easy ICFs are located in Indiana, and banks can receive CRA consideration for their investments. ICFs boast a successful track record: • There have been three previous ICFs that have generated 28 investments, totaling $25,452,500; • Four IBA members have made repeat investments in ICFs; • All three previous ICFs are meeting or exceeding their projected returns; • The initial three ICFs have invested in 13 developments throughout Indiana, totaling 847 units of affordable housing. “Cinnaire staff have been very helpful in helping our senior staff to understand the LIHTC Fund investment, and they have provided ongoing support as the investment is implemented,” says Darrell Blocker, senior vice president/chief financial officer at Springs Valley Bank & Trust Company in Jasper. The fourth ICF offering will be available in the second quarter of this year, with an anticipated fund closing in the fall. Cinnaire’s staff is available to meet with IBA members in your community to discuss this opportunity. For more information, please contact Fred Hash, senior vice president for business development, at 317-522-5481, email: fhash@ cinnaire.com. t I����������� F��� W���� W���������, D.C. W��� I� C���� T� S������ F�������� I�����������... B��� M���� B�������SM ���.�������.���

17 Hoosier Banker February 2016 COMPLIANCE CONNECTION 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. Authoring this month’s Compliance Connection is Lori Jean, partner with Krieg DeVault LLP, Indianapolis, and a member of the firm’s financial institutions practice group. Submit Compliance Connection questions to IBA’s Amber R. Van Til at avantil@indianabankers.org or Josh Myers at jmyers@indianabankers.org. Question 1: We have customers who winter in Florida and Arizona. We also have customers who live across the state line in Illinois and Michigan. Can we honor a power of attorney (POA) that was signed in another state, or does the POA paperwork have to be signed in Indiana? Answer: Yes, you can honor an outof-state POA if it meets the requirements to be a valid POA in the state where it was created or under Indiana law. Indiana Code §30-5-3-2(4) provides: “A power of attorney is valid if the power of attorney was valid at the time the power of attorney was executed under any of the following: (1) This article. (2) IC 30-2-11 (repealed). (3) Common law. (4) The law of another state or foreign country. (5) The requirements for a military power of attorney under 10 U.S.C. 1044b.” Each state’s POA statute specifies the requirements for a valid POA.1 Some states, like Illinois, not only specify the requirements, but also provide that a POA is valid, if it is in the statutorily prescribed form or is substantially similar to that form.2 Thus if the POA meets the other state’s requirements (including through use of a prescribed form) or meets Indiana’s requirements, it is valid in Indiana. Your next step is to review the POA to verify that it grants the necessary powers to the agent (also called the attorney in fact) to permit the agent to conduct banking transaction, sign for a loan, grant a mortgage, or do whatever else the agent is seeking to do.3 The meaning and effect of the POA are determined by the law of the jurisdiction indicated in the POA. If no jurisdiction is specified, then you look to the law of the jurisdiction in which the POA was executed.4 If you rely on a POA — either instate or out-of-state — in good faith, you are immune from liability.5 If you are presented with a copy of a POA or have concerns about it (e.g., “Is it still valid because of how long ago it was executed?” “Is the principal still alive?”), you can request an affidavit from the agent addressing such issues.6 Your reliance on this affidavit will protect you from liability for having relied on the POA.7 Question 2: Does the out-of-state POA have to be filed in Indiana? Answer: The same recording rules 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 See, e.g., A.R.S. § 14-5501 (2014); Fla. Stat. § 709.2106 (2013); 755 Ill. Comp. Stat. 45/3-3 (2015); Ind. Code § 30-5-4-1 (2008); and Mich. Comp. Laws § 700.5501 (2012). 2 See 755 Ill. Comp. Stat. 45/3-3 (2015). 3 See Ind. Code § 30-5-5-1 (2002). 4 See Ind. Code § 30-5-3-6 (2009). 5 See Ind. Code § 30-5-8-7(a) (2005). 6 See Ind. Code § 30-5-8-7(b) (2005). 7 See Ind. Code § 30-5-8-7(c) (2005). 8 See Ind. Code § 30-5-3-3(a) (1991). 9 See Ind. Code § 30-5-3-3(b) (1991). apply to out-of-state POAs as apply to Indiana POAs. In general, an agent may act under a POA without recording it with the county recorder.8 The exception is that, if the document itself must be recorded (e.g., deeds, mortgages, liens), then the POA must also be recorded before the agent can sign the document on behalf of the principal.9 t 1st Source Bank, South Bend, celebrated the grand opening of a new banking center with a ribboncutting ceremony on Dec. 17. The new branch, located at 2005 LaPorte Avenue in Valparaiso, features a side-by-side banking concept. In celebration of the event, the bank donated $500 to The Caring Place to assist with providing service and shelter to victims of violence and their children. t nEw BranchEs, Buildings & OpEnings 1st Source Bank, South Bend, celebrates a new banking center in Valparaiso. Pictured (left to right) are: Chris Murphy, chairman and CEO; Jim Seitz, president; Jayne Cooper, regional sales manager; Jerry Del Real, banking center manager;Valparaiso Chamber president Rex Richards; Matt Vessely, 1st Source regional president; and Gloria Vaughan McKown, 1st Source banking center manager.

18 Hoosier Banker February 2016 As I’ve said time and again, having a place at the policymaking table in Washington isn’t simply important for community banks ‒ it’s essential. As I’ve also repeatedly assured, the Independent Community Bankers of America will always pursue and protect the interests of community banks, and only the interests of community banks, with unsparing energy and action ‒ and we do. ICBA’s recent, hard-fought legislative successes that protected community banks from steep Federal Reserve stock dividend cuts and enacted valuable community bank regulatory relief validate both longstanding statements. Some background details tell the story. First, when the idea to cut the Federal Reserve dividend was initially proposed last July, the ICBA immediately spoke out against it. We recognized right away how such a rash and shortsighted policy maneuver would upend a century-long underpinning of the U.S. banking system. The drastic 75 percent cut first introduced ‒ devised as an easy revenue raid for an intensely negotiated federal transportation funding package ‒ made the issue extremely serious for our banking system in general and for 1,800 community banks that are Federal Reserve members in particular. So ICBA mobilized to educate lawmakers, both publicly and behind the scenes. In many one-on-one meetings, we pressed our reasons for scuttling any Fed dividend cut. Soon we were backed impressively by nearly 2,700 letters from vocal community bankers, many of whom also spoke directly with their congressional representatives. A letter from 43 respected state bankers associations opposing the dividend cut was also an important boost to the cause. Along the way, the ICBA also continued to engage lawmakers on our association’s regulatory relief measures for community banks, the Plan for Prosperity. The groundwork for ICBA’s noncontroversial regulatory relief measures had been well prepared during the previous two years. Hearings had been held. Several bills cleared the House or the Senate. Key congressional leaders, including pivotally in this fight House Financial Services Chairman Jeb Hensarling, R-Texas, were on board. Through persistence, community banks were in prime position. When the dust settled after a burst of final calls, emails and meetings, unfortunately a decisive number of lawmakers wouldn’t abandon some form of a Fed dividend cut. But those same lawmakers, hearing our case and cause, supported final legislation that exempted the vast majority of community banks and mitigated the dividend cut on those banks not exempted. The really good news is that the final legislation included several key Plan for Prosperity regulatory relief measures. It also jettisoned an ICBA-opposed provision that would have extended higher mortgage-guarantee fees that lenders pay Fannie Mae and Freddie Mac. The outcome wasn’t exactly what ICBA advocated. Nevertheless, what’s more important is that nearly all community banks were protected, and many will avoid some regulatory costs and headaches ‒ significantly so, for some. All of this happened because of the dogged hard work of the ICBA, community bankers and our state association affiliates. None of it would have occurred without our already having had a seat at the policy table. The same must be said for numerous other policy victories— from winning broader Qualified Mortgage definitions for rural lenders to halting extreme IRS reporting requirements on depositors. With your continued support and involvement, there is almost no limit to what we can achieve this year. t Influence and Action FEATURE About the Author Camden R. Fine is president and chief executive officer of the Independent Community Bankers of America. He came to ICBA from Midwest Independent Bank, Jefferson City, Missouri, where he chartered and organized the bankers’ bank and served as president and CEO for nearly 20 years. A long-time member of ICBA prior to becoming the association’s president and CEO, Fine served on several association standing committees and on the ICBA board of directors. The author can be reached at: cam.fine@icba.org.

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20 Hoosier Banker February 2016 FEATURE You know that when Congress turns our industry into a piggy bank to pay another industry’s costs and then ignores bankers’ pleas for relief from stifling, ill-fitting regulations, something is wrong ‒ not just with our political system, but also with our industry’s political firepower. I’m referring, of course, to the twin insults Congress lodged in its waning days of its 2015 session. First, to cover the costs of the five-year highway spending bill, lawmakers chose not to raise the gas tax or find some other related source of funds. Instead it opted to dramatically decrease the dividend the Fed pays member banks with more than $10 billion in assets, while simultaneously raiding the Fed’s capital surplus account. Perhaps to soften the blow, Congress also included a handful of regulatory relief items that bankers, the American Bankers Association and state bankers associations have been advocating, in some cases for years. But the presence of modest reg relief in the bill does not make up for the dangerous precedent it set by using banks to pay for highways and bridges. After all, the relief provisions, such as eliminating annual privacy notices for banks that don’t change their policies, had strong bipartisan support. Congress could have ‒ and should have ‒ passed on its own, not as a quid pro quo. But Congress is so plagued by dysfunction that it can pass little but spending bills. Which leads me to insult No. 2. After months ‒ years, even ‒ of bankers explaining how outdated and poorly tailored rules were choking credit and making things harder for bank customers, leaders in Congress had a chance to do something about it. They could have attached meaningful regulatory relief provisions ‒ ones that had already been vetted by both the Senate and House banking committees ‒ to its omnibus spending bill. But they chose not to. While the reasons are many, including the need to woo votes from staunch defenders of Dodd-Frank, one should be enough to startle all of us into a new way of thinking about political engagement: Congress saw no downside in kicking banks around. That has to change. Banking is a hugely consequential industry. We fuel the economy by About the Author Robert S. Nichols is president and chief executive officer of the American Bankers Association. He joined the ABA in August 2015, following 10 years of service as president and CEO of the Financial Services Forum, a non-partisan financial and economic policy organization. Prior to joining the Forum, Nichols was assistant secretary of the Treasury for Public Affairs, a position requiring confirmation by the U.S. Senate, and he also oversaw the Office of Public Liaison. Nichols is a recipient of the Alexander Hamilton Award, the highest honor of the U.S. Department of the Treasury. Previously Nichols’ career highlights included service as communications director for the Electronic Industries Alliance; as a senior aide on Capitol Hill, where he was communications director to U.S. Sen. Slade Gorton and Press Secretary to the late Congresswoman Jennifer Dunn; and in the West Wing as an aide in the Office of the Chief of Staff in the George H.W. Bush administration. Nichols serves as a member of the board of trustees of the National Presbyterian School and as vice chair of the board of directors of Food Allergy Research & Education (FARE). He is a graduate of The George Washington University. The author can be reached at: nichols@aba.com. Time for Political MuscleBuilding

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