IBA 2017 Forging into the future PLUS! S. Joe DeHaven: Dedicated service to banking JANUARY / FEBRUARY 2017 HB HOOSIER BANKER MAGAZINE indianabankers.org From left: Annette M. Russell Cindy L. Konich Kristin Marcuccilli Amber R. Van Til
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4 JANUARY / FEBRUARY 2017 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: Q Maintain the highest ethics, integrity and respect for others; Q Serve with professionalism, innovation and resourcefulness; Q Instill passion, positive attitude and enthusiasm; Q Remain mindful that the success of the IBA is judged by the success of its members. View HB Digital at indianabankers.org. Publication Disclaimer Hoosier Banker (ISSN 0018 473X) is published bimonthly 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 or on the IBA website is the property of the Indiana Bankers Association. HB DIRECTORS & STAFF IBA BOARD OF DIRECTORS -&% 3JƤGIVW Chair ............................................. Annette M. Russell, Security Federal Savings Bank, Logansport First Vice Chair ............................................Clay W. Ewing, German American Bancorp Inc., Jasper Second Vice Chair ..................................................................... Andrew J. Briggs, Bank of Geneva Immediate Past Chair ................................ Michael H. Head, First Federal Savings Bank, Evansville 4VIWMHIRX ERH 'LMIJ )\IGYXMZI 3JƤGIV ............... Amber R. Van Til, JD, Indiana Bankers Association Constituent Directors ICBA State Director........................................... David M. Geis, Jackson County Bank, Seymour ABA Membership Council ................................Michael K. Bauer, WesBanco 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 Jeffrey W. Gump .............................................................Farmers and Merchants Bank, Laotto Michael C. Marhenke ...............................................................iAB Financial Bank, Fort Wayne Michael S. Zahn ............................................................First Federal Savings Bank, Huntington Northwest Region Directors Benjamin J. Bochnowski ...................................................................... Peoples Bank, Munster Joseph D. Carlson ............................................................Community State Bank, Royal Center Arden L. Cramer ................................................................................Logansport Savings Bank Southeast Region Directors Archie M. Brown Jr. ...................................................MainSource Financial Group, Greensburg George W. Ferriell............................................................................................Bath State Bank Dennis Wayman ......................................................................................State Bank of Medora Southwest Region Directors Michael L. Baker .......................................................................................State Bank of Lizton Matthew W. Howrey ............................................................................North Salem State Bank Kent L. Parisien .......................................................................The First National Bank of Odon FUTURE LEADERSHIP DIVISION BOARD Kristin Marcuccilli, President................................................................ STAR Bank, Fort Wayne Kirby Drey, Vice President ..................................................................................Kentland Bank Emily Boardman ...............................................................................Crossroads Bank, Wabash Craig Buse .................................................. Springs Valley Bank & Trust Company, French Lick Jason L. Ernst ..................................................................First Financial Bank, NA, Terre Haute Jon-Myckle D. Price ............................................... Security Federal Savings Bank, Logansport 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 IBA STAFF 4VIWMHIRX ERH 'LMIJ )\IGYXMZI 3JƤGIV .............................................................Amber R. Van Til, JD Executive Vice President.............................................................................. Paul W. Freeman, CAE Senior Vice 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 Assistant Vice 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 +SZIVRQIRX 6IPEXMSRW 'SQQYRMGEXMSRW 3JƤGI 1EREKIV ....................................Joshua A. Myers )QEMP EHHVIWWIW *MVWX MRMXMEP SJ XLI WXEJJ QIQFIVŭW ƤVWX REQI TPYW PEWX REQI I\EQTPI jdoe@indianabankers.org. Please send news releases to: HB@indianabankers.org
Hoosier Banker 5 CONTENTS Vol. 101 No. 1 COVER STORY 8 IBA 2017: Forging into the future SPECIAL TRIBUTE 14 S. Joe DeHaven: Dedicated service to banking FEATURES 6 Vantage Viewpoints Amber R. Van Til, IBA 7 IBA Calendar of Events 28 IBA Presents: 2017 Board of Directors 32 Community Outreach Survey 42 Midwest Agricultural Banking School Freddie Barnard, Purdue University 44 A Winning Game Plan for 2017 Robert S. Nichols, ABA 46 Positioned for Progress Camden R. Fine, ICBA HUMAN RESOURCES 22 Suspicious Timing of Termination Debra A. Mastrian, SmithAmundsen LLC FLD FOCUS 24 Visualizing the Leader Within Dax Denton, IBA PSP SHOWCASE 38 Let an Expert Assist You: Customize your cybersecurity needs Rod Lasley, IBA PRODUCTS & SERVICES PROFILE 40 Value for Banks: Security for merchants Joel Benson, Approval Payment Solutions Inc. DEPARTMENTS 20 Compliance Connection Brett J. Ashton, Krieg Devault LLP 23 Associate Members’ Corner 41 Anniversary Milestones 41 Taking It Easy 43 Honorable Mentions 47 From the Board Room 48 Banking Center Updates 49 Bankers on the Move 54 Banking on Community 54 Advertisers Index 6925 Parkdale Place Indianapolis IN 46254-4673 Phone: 317-387-9380 Fax: 317-387-9374 Twitter @indianabankers Publisher: Amber R. Van Til, JD Editor: Laura Wilson Advertising: Rod Lasley Submit materials to: HB@indianabankers.org Copy deadline: First of the month preceding publication. Advertising: Rates available at indianabankers.org. Advertisers should reserve space by the 10th day of the month preceding publication, and submit artwork by the 15th of the month preceding. 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 to members and associate members of the Indiana Bankers Association. Public access to HB Digital is available at indianabankers.org. HOOSIER BANKER MAGAZINE indianabankers.org From left, Annette M. Russell, Cindy L. Konich, Kristin Marcuccilli and Amber R. Van Til help forge banking’s future.
6 JANUARY / FEBRUARY 2017 This year marks a new beginning for the Indiana Bankers Association, with 2017 kicking off the Association’s 120th year of operations. We enter this new era with exciting changes ahead. First, the Association is experiencing a leadership milestone with the election of Annette M. Russell, Security Federal Savings Bank, Logansport, as chair of the IBA board of directors. Annette serves her bank as president and chief executive officer. As of Jan. 1, she is now making history as the first woman to chair the IBA board. Additionally outstanding leadership continues this year through the IBA Future Leadership Division, with Kristin Marcuccilli, chief operating officer at STAR Bank, Fort Wayne, entering her second year as FLD president. In that capacity, Kristin also serves on the IBA board, embedding our commitment to banking’s future. And on the topic of leadership, it is humbling to have been selected to serve you as president and chief executive officer, starting this year. This position would be an honor under any circumstances, but is especially dear to me as the first female to hold this title. Thank you for the confidence you have shown in placing me in this position, which I will do my utmost to fulfill. Regarding changes this year, the most obvious is the one in front of your eyes – the redesigned and refreshed Hoosier Banker. We proudly bring our flagship publication into the future with a new look and outreach. This edition’s cover story features leadership insights from Annette and Kristin, mentioned above, and also from Cindy L. Konich, president and chief executive officer of the Federal Home Loan Bank of Indianapolis. In keeping with the times, starting this year Hoosier Banker will be published six times annually, continuing to bring you profiles, analyses and Association updates, but now as part of a larger communications plan. Be on the lookout, as the IBA explores technology, social media and video as means of connecting members and telling bankers’ stories. Another forthcoming change is that the IBA will be hosting its first-ever women’s conference in the fall. This event is inspired in part by leadership diversity within the industry, but also by a growing movement among state bankers associations nationwide. Our counterparts have hosted similar conferences with much success. Also this year, a move is in the works for the IBA offices. Our current location has served us well, but declining area conditions, plus a desire to consolidate the main office with the government relations team, have prompted us to seek a new home. As of this writing, finalization is still pending, but we will be sharing details soon about an upcoming move. Amber R. Van Til President & CEO Indiana Bankers Association avantil@indianabankers.org VANTAGE VIEWPOINTS A profound change coming to fruition this year is staff professional development. The IBA is fortunate to be staffed by a team of committed professionals, all of whom are eager to bring service to you to even higher levels. With the support of our board of directors, last year the IBA commenced an intense professional development campaign, which is set for completion this year. Additionally in 2017, we are scheduled for strategic planning this fall. The IBA engages in strategic planning approximately every three years, with a goal of seeking input from members and thoughtfully addressing how we can best serve member needs. The process is always enlightening and results in a living plan, which we review and assess frequently, to ensure that we deliver value for your membership. Certainly no organization can stride into the future without building on a solid past, and the IBA has benefited from a long history of quality leadership. One leader in particular merits special thanks, and that is S. Joe DeHaven, my predecessor. He retired on Dec. 31, 2016, after 47 years of dedicated service to banking. Many of our readers know Joe well, either in person or through this CEO column. For me, his leadership takes on extra meaning, as it was Joe who took a leap of faith in hiring me 15 years ago, as a recent law school graduate, to lead the Association’s government relations. These past 15 years of working under Joe’s guidance have given me the opportunity to observe and learn about leadership. I saw firsthand how much heart and spirit Joe put into his work for the Indiana banking community. I also witnessed his entrepreneurial spirit in action, and I appreciate that Joe’s tireless service has left this Association strong and sound. Our budget has nearly tripled during his tenure, and I am fortunate to be following in Joe’s wake. Going forward, I will be working closely with our officers, directors and staff to help forge a path into the future for the IBA and this industry. This redesigned Hoosier Banker is just the start of many innovations that we will be offering you in pursuit of fulfilling IBA’s mission: To advocate for and sustain an environment in which banks can succeed. HB Amber R. Van Til, JD, has been promoted to president and chief executive officer of the Indiana Bankers Association, effective Jan 1. She previously had been serving as president since March 31, 2016, when she was named successor to S. Joe DeHaven, prior president and CEO. DeHaven is featured in a special tribute in this edition of Hoosier Banker, beginning on page 14. Details about Van Til’s career appear on page 30. Van Til Named IBA President and CEO
Hoosier Banker 7 Analyzing Personal Financial Statements and Tax Returns Feb. 1 • IBA Center Analyzing Business/Corporate Financial Statements and Tax Returns Feb. 2 • IBA Center Outside Calling School Feb. 2 • IBA Center Community Bankers for Compliance Series - Session I: Community Reinvestment Act Feb. 6 • The Landmark Conference Center, Fort Wayne Feb. 7 • IBA Center Feb. 8 • IBA Center -&% 0IKMWPEXMZI &VMIƤRK ERH 6IGITXMSR Feb. 7 • Hyatt Regency Indianapolis Advanced Commercial Lending School Feb. 8-9 • IBA Center 2016 Call Report: Review and Update Feb. 14 • IBA Center IRA Basics Feb. 14 • IBA Center -8 ERH 3TIVEXMSRW 3JƤGIV *SVYQ Feb. 15 • IBA Center • Group 1 Feb. 16 • IBA Center • Group 2 Advanced IRA Review and Update Feb. 16 • IBA Center 'LMIJ *MRERGMEP 3JƤGIV *SVYQ Feb. 21 • IBA Center • Group 1 Feb. 24 • IBA Center • Group 2 Marketing Directors Forum Feb. 21 • IBA Center 2016 Senior Lender Forum Feb. 22 • IBA Center • Group 1 Feb. 23 • IBA Center • Group 2 IBA Future Leadership Division Day at the Statehouse March 7 • Hyatt Regency Indianapolis TRID Essentials March 7 • IBA Center Training the Credit Analyst March 7-8 • IBA Center HR Directors Forum March 14 • IBA Center Annual Security, Fraud and Risk Management Conference March 14-15 • Indianapolis Marriott North Indiana Deposit Account Administration March 14 • The Landmark Conference Center, Fort Wayne March 15 • IBA Center Consumer Loan Documentation March 16 • IBA Center Commercial Loan Documentation March 17 • IBA Center HMDA March 21 • IBA Center Flood Insurance Update and Review March 22 • IBA Center 'IVXMƤIH &EROMRK ']FIVWIGYVMX] 1EREKIV 'IVXMƤGEXMSR March 28-29 • IBA Center IBA Leadership Development Program: It’s Simple, But It Isn’t Easy April 11-14 • Wooded Glen Retreat and Conference Center, Henryville Cybersecurity Seminar April 12 • IBA Center Branch Management Series: Session 2 - Leading, Developing and Engaging the Team April 18 • IBA Center Essentials of Banking: Session 1 - Banking 101 April 19 • IBA Center BSA/AML Compliance School April 19-20 • IBA Center Consumer Lending School April 25-26 • IBA Center *IF ŵ 6IKYPEXMSR ) 7IVMIW ,ERHPMRK 4VSZMWMSREP 'VIHMX 9RHIV 6IK ) 6YPIW &IWX Practices and FAQs *IF ŵ 3RFSEVHMRK =SYV 2I[ ,MVI *IF ŵ &EWMG 'EWL *PS[ %REP]WMW *IF ŵ 8LI 2I[ ;SVPH SJ (IFX 'SPPIGXMSR ;LEX 6IGIRX '*4& %GXMSRW -RHMGEXI %FSYX XLI *YXYVI SJ 6IKYPEXMSRW ERH )RJSVGIQIRX *IF ŵ 3TIR )RHIH 'VIHMX *IF ŵ 6IEP )WXEXI 7IVMIW 9RHIVWXERHMRK 86-( 8SPIVERGI 'YVIW *IF ŵ 7YGGIWWJYP ;SVOSYX 7XVEXIKMIW JSV 4VSFPIQ 0SERW *IF ŵ 2I[ 8VYQT %HQMRMWXVEXMSR 2I[ )QTPS]QIRX 'SQTPMERGI 4VMSVMXMIW JSV *IF ŵ **-)' -RJSVQEXMSR 7IGYVMX] ,ERHFSSO 6IZMI[ *IF ŵ 9WMRK 4IVWSREP 8E\ 6IXYVRW JSV +PSFEP 'EWLƥS[ ;LEXŭW 'EWLƥS[ ERH ;LEX -WRŭX *IF ŵ &7% 'SQTPMERGI 7IVMIW *MR'IRŭW '(( 6YPIW ERH &7% 'SQTPMERGI ;L] 4VITEVMRK 2S[ JSV XLI *MJXL 4MPPEV -W 'VMXMGEP *IF ŵ ;LEX -W 'SZIVIH F] ( 3 -RWYVERGI ;LEX -W 2SX# *IF ŵ 'SQTPMERGI 6YPIW JSV 'SQQIVGMEP 0SERW 7IGYVIH F] 6IEP )WXEXI *IF ŵ *EMV 0IRHMRK 6IZMI[ ERH 9THEXI *IF ŵ *SV 7EPIW 1EREKIVW ,S[ XS ,MVI &IXXIV &EROIVW ;LS ;MPP 7IPP *IF ŵ 86-( *IF ŵ 7QEVX 7SGMEP 1IHME *IF ŵ 1MPMXEV] 0IRHMRK %GX )\EQ 4VSGIHYVI 'LERKIW 4SWX -QTPIQIRXEXMSR 'SRWMHIVEXMSRW ERH *%5W *IF ŵ 2I[ **-)' 'SRWYQIV 'SQTPMERGI 6EXMRKW 7]WXIQ )JJIGXMZI 1EVGL :MSPEXMSRW SJ 0E[ ERH 'SRWYQIV ,EVQ 4EVX *IF ŵ %GGSYRXW 6IGIMZEFPI ERH -RZIRXSV] *MRERGMRK *IF ŵ 7IVZMGIQIQFIV -WWYIW 8LI 1MPMXEV] 0IRHMRK %GX ERH 7'6% *IF ŵ 2I[ &7% 3JƤGIV 8VEMRMRK *IF ŵ 6MWO 1EREKIQIRX 7IVMIW (IZIPSTMRK ER )RXIVTVMWI ;MHI 6MWO %WWIWWQIRX *IF ŵ *PSSH 'SQTPMERGI MR 0IRHMRK 4EVX 0SER 3VMKMREXMSR *IF ŵ 'SQTPMERGI 4IVWTIGXMZIW *IF ŵ &YWMRIWW %GGSYRX 1ETTMRK 2I[ '(( 6YPIW MR E 1YPXM XMIVIH &YWMRIWW )RZMVSRQIRX *IF ŵ &I[EVI 7MKREXYVI 'EVH (ERKIV >SRIW *IF ŵ 6ERWSQ[EVI ERH ']FIV )\XSVXMSR *IF ŵ )ZIV]XLMRK =SY 2IIH XS /RS[ %FSYX 6IK '' ,SPHW *YRHW %ZEMPEFMPMX] 'SQTPMERGI ERH 1SVI *IF ŵ 'SQTPMERGI 5YIWXMSRW ERH -WWYIW MR (ITPS]MRK 1SFMPI 6IQSXI (ITSWMX 'ETXYVI *IF ŵ 3ZIVHVEJX 4VSXIGXMSR 4VSKVEQW *IF ŵ &EWMG 4IVWSREP ERH &YWMRIWW 8E\ 6IXYVR %REP]WMW *IF ŵ 'SQTPMERGI 5YIWXMSRW ERH -WWYIW MR (ITPS]MRK 1SFMPI 6IQSXI (ITSWMX 'ETXYVI 1EVGL ŵ 9RMJSVQ 'SQQIVGMEP 'SHI 6YPIW ,S[ XS 'SQTP] XS %XXEGL ERH 4IVJIGX 7IGYVIH Transactions 1EVGL ŵ ,7% 1EVGL ŵ 'SQTPMERGI 6YPIW JSV 'SRWYQIV ERH 1SVXKEKI 0IRHIVW 1EVGL ŵ &IWX )ZIV 'SQTPMERGI 'LIGOPMWXW JSV 'SQQIVGMEP 0SERW 1EVGL ŵ :MXEP 'LIGO ERH (ITSWMX -WWYIW 1EVGL ŵ 6IK ) 1EVGL ŵ 0IKEP 0MEFMPMXMIW [LIR 'LIGO *VEYH 3GGYVW 1EVGL ŵ &7% )QIVKMRK -WWYIW 1EVGL ŵ %HZERGIH 8E\ 6IXYVR %REP]WMW JSV XLI &EROIV 1EVGL ŵ 'VMXMGEP -WWYIW SR 'IVXMƤGEXIW SJ (ITSWMX 1EVGL ŵ %REP]^MRK %TTVEMWEPW JSV 1SVXKEKI (IGMWMSRW 1EVGL ŵ ;LEX XS (S ;LIR E 'YWXSQIV (MIW 1EVGL ŵ 'EPP 6ITSVX 0IRHMRK 7GLIHYPIW JSV &EROW 1EVGL ŵ %HHVIWWMRK 8LVIEXW SJ :MSPIRGI 1EVGL ŵ 'SQTPMERGI 4IVWTIGXMZIW Calendar of Events Register online at indianabankers.org/education-events The IBA Center for Professional Development | 6925 Parkdale Place | Indianapolis, IN 46254 | 317-387-9380 | Twitter: @IndianaBankers CALENDAR UPDATE ONLINE DELIVERY CHANNELS UPCOMING SCHEDULED EVENTS
8 JANUARY / FEBRUARY 2017 COVER STORY IBA 2017 Forging into the future The year 2017 marks pronounced leadership development for the Indiana Bankers Association. The IBA’s new chair is Annette M. Russell, president and chief executive officer of Security Federal Savings Bank, Logansport. Effective Jan. 1, Russell became the first woman to hold this top leadership post in the Association’s 120-year history. Additionally Amber R. Van Til has been named IBA’s first female president and chief executive officer, also effective Jan. 1. Though the Association did employ a woman as chief staff officer more than 90 years ago, the size and scope of the IBA have expanded considerably since then. Van Til is the first female to hold title as IBA president/CEO. Leadership by women runs deeper still in Indiana banking. Cindy L. Konich has been serving as president and chief executive officer of the Federal Home Loan Bank of Indianapolis since 2013. The FHLBI serves a large sector of the banking community, providing liquidity to financial institutions throughout Indiana and Michigan. Representing the future of Indiana bank leadership, Kristin Marcuccilli, chief operating officer of STAR Bank, Fort Wayne, continues in her position as president of the IBA Future Leadership Division. Her leadership of the Association’s commitment to the future is essential to helping to engage the next generation of Indiana bank leaders. Hoosier Banker recently hosted a panel discussion with these four banking professionals to explore the topic of leadership as it applies to the future of the industry. What does IBA’s leadership in 2017 signify for the Indiana banking community? Cindy Konich: “The fact that the four of us are here says a great deal about the Indiana environment. It’s open and accessible, and there also are other women in emerging positions of leadership, who are not at the table today. “Another factor in Indiana is that there are larger urban populations, such as here in Indianapolis, but there also are smaller rural populations. We have leadership representation truly across the entire state.” Annette Russell: “This leadership is a reflection of fulfilling the need for more overall diversity in executive roles in our industry.” Kristin Marcuccilli: “It highlights the strength of the Indiana Bankers “This leadership is a VIƥIGXMSR SJ JYPƤPPMRK the need for more overall diversity in executive roles in our industry.” %RRIXXI 1 6YWWIPP
Hoosier Banker 9 Association and of the health of the community banking environment in general. This gathering signifies the strength and confidence in four people, regardless of gender, who are very passionate about community banking, about people, about relationships.” Amber Van Til: “The IBA has created a team focused on serving Indiana banks at the highest level. The board of directors, the Future Leadership Division, the various committees, as well as the IBA staff spend countless hours engaged in building on the success of the past with innovation, excellent customer service, and win-win advocacy that benefits banks and the communities they serve. “A transition is a ripe time for change. We are increasing our communications and government relations efforts, further developing our staff, relocating our offices and implementing a new women’s conference, all in an effort to better serve our members.” How has the industry overcome historic barriers to leadership diversity? Annette: “We have more women with higher education and technical experience in the workforce today, more organizations that support women, and more women mentors. Along with that, we’re offering more flexibility for all employees to allow for a better balance between work and home life.” Cindy: “Women today represent close to 50 percent of total MBAs. So there are more of us preparing for a banking or financial services career path. Also we’ve seen an uptick in women as entrepreneurs and as small business owners. In Indiana, between 1997 and 2015, there was a 38 percent increase in women-owned firms. And between 2014 and 2015, 15 new women-owned firms opened in Indiana per day. The changing face of our customers impacts the way we as bankers do business, as well.” Kristin: “We’ve made great strides, too, in diversity and age. In the Future Leadership Division, we have several young bankers who hold significant roles within their institutions, carrying much responsibility. It’s exciting and encouraging to see that senior leadership is open to finding the best talent, those with ambition and drive and the right skill sets, regardless of tenure.” How is leadership different today than in the past? Cindy: “Today it’s more collaboration and consensus-building, especially in our business. When I began in the business, it was very finance-focused, but over time we’ve added different disciplines to the banking sector. There’s the technology side, which is huge, and also the enterprise risk management side, moving beyond market and credit risk to areas like operational risk, business risk, strategic risk and reputation risk. “That broader base of the type of risk, applying to different bank disciplines, requires more people at the table. With more people, you have to have more consensus-building and, as a result, more collaboration. There’s a lot more mixing together of different disciplines in order to be a successful banker today.” Annette: “We offer a team concept, rather than top-down hierarchy for decision- making. Our culture has evolved to empower our team members to provide input and make decisions to advance our organization. We get a lot of positive feedback from individuals who have 4,383 '%48-32 From left – Cindy Konich, Amber Van Til, Annette Russell and Kristin Marcuccilli provide quality leadership for the Indiana banking community. “The IBA has created a team focused on serving Indiana banks at the highest level.” Amber R. Van Til “The fact that the four of us are here says a great deal about the Indiana environment.” 'MRH] 0 /SRMGL “This gathering WMKRMƤIW XLI WXVIRKXL ERH GSRƤHIRGI MR JSYV people, regardless of gender.” /VMWXMR 1EVGYGGMPPM
10 JANUARY / FEBRUARY 2017 worked at larger banks and come to our environment as a community bank. They recognize the generosity and the passion for helping people, and that relationships can’t be measured by the number of accounts you opened this month. “This combination ‒ of a team concept and having a desirable culture ‒ is one of the biggest changes that I’ve seen in our organization in the last 10 years.” Kristin: “Generally there’s an openness for change, and less fear or resistance to change. My father often reminds me that we’ve chosen to work in an industry where, if you don’t like change, then you’ve signed up to work in one of the worst lines of business in the world. It’s encouraging to see our leadership team learn to adapt and embrace change, and to not look at obstacles as threats, but as opportunities.” Cindy: “‘Change’ is no longer a bad word. There was a time that we wanted to be more status quo, but the world’s moving way too rapidly to stay the same. We have to embrace adaptability.” Amber: “Banking is a unique business model for adaptation. It’s a traditional business, but consistently engages in changing technologies. How banks serve our customers and attract newer and younger generations has compelled them to be more open and adaptable in order to be sustainable for the future.” How can the industry overcome potential future barriers to leadership diversity? Kristin: “Engagement is critical. We need to encourage those in leadership to engage others, particularly those they’ve identified as rising stars across their organizations. One of the greatest benefits of the IBA Future Leadership Division [FLD] is the peer networking component, but frankly, it is a challenge to try to convince CEOs or other leaders why participation is important. “We see the FLD as a succession plan for the IBA, and we want to sustain the strength and prominence our state’s banking association has achieved. As such, we want to encourage giving young leaders exposure to conferences, seminars, networking events or government relations efforts ‒ especially those who typically haven’t been involved before.” Cindy: “Once you identify talent, you need to retain it. So that’s key: finding ways to engage individuals. In our organization, we talk a lot about the 10 percent that we give back to local communities through the Affordable Housing Program. It used to be that community involvement was not a driver for employment satisfaction, but today it is. “People who come to our organization love the mission. People don’t necessarily think of banking in terms of being a nexus to the community. I think that’s a very big part of attracting and retaining employees and building that leadership.” Amber: “Another factor in potential future barriers is telling our story. Leadership diversity comes from getting the right people in the right seats within your institution, and having an ear for diversity. “From a public relations perspective, we have a lot of work to do with regard to how the general public views the banking industry. For us to convince young adults to enter banking as a career, we have to increase our messaging and promote banking at a much higher level, so that it’s attractive to a more diverse group of applicants who want to grow through their entire careers with our industry.” Annette: “We can prevent barriers by giving everyone in the bank the chance to take advantage of leadership development and networking opportunities. There’s so much more opportunity today to learn from inspiring leaders. “We work hard to stay in tune with the aspirations of our rising stars. We have an internal system that provides a career path for succession to keep them engaged. In smaller communities we are definitely challenged to attract and retain experienced professionals. We are cultivating our own next generation of bankers from within. The neat part is we have employees who are now in line to take positions held by their grandparents.” Cindy: “The retention challenge is especially true for the younger generation, because they have a desire to do more and learn more. That’s why it’s important for organizations to be more engaged in that process of career development. “We started some mentoring programs a couple years ago, and it really connects the generations. Sometimes the more tenured employee learns just as much from the newer hire as the other way around. Internships are helpful, too, in bringing in young talent. College students might then take some of the courses that relate to banking when they go back and finish their junior or senior year.” Annette: “Another characteristic unique to community banks is unlimited board terms. Most bank boards don’t limit the number of terms a director can hold. Therefore there is a very low turnover rate in director seats, limiting the bank’s ability to increase diversity at the board level. “If you don’t have diversity on your board now, and you don’t have a mandatory retirement age, your board is going to lack diversity. That can drive the leadership in your organization.” Cindy L. Konich is president and chief I\IGYXMZI SJƤGIV SJ XLI Federal Home Loan Bank of Indianapolis. Annette M. Russell, chair of the Indiana Bankers Association, is president and chief executive SJƤGIV SJ 7IGYVMX] Federal Savings Bank, Logansport. COVER STORY
Hoosier Banker 11 Kristin Marcuccilli, GLMIJ STIVEXMRK SJƤGIV of STAR Bank, Fort Wayne, serves the Indiana Bankers Association as president of the Future Leadership Division. Kristin: “There has to be a willingness to recalibrate and refresh those processes or expectations that have been in place for a long time.” Amber: “It can be difficult when you have different generations within your workforce. Some folks think everything’s fine just the way it is, and they don’t want to make any changes. But doing the same thing over and over doesn’t breed success in an organization. Generational differences can make it difficult to get everybody on board when they think differently about the flow and direction of the business.” Kristin: “When you compare our industry to other industries ‒ particularly innovative and forward-thinking technology companies ‒ you realize the importance of supporting a culture that embraces failure. In taking more risk, you might have to kill a project or a product, but then other times it works out really well. There’s been a longstanding attitude of ‘This probably won’t be a good idea, so let’s not try it.’ That kills the innovative spirit that could help overcome staleness.” Annette: “That’s an excellent point coming from you, based on your age, and the way that you view it. I admire that, because I’m part of a cross-generation where you still operate very conservatively, more risk-averse. I think that’s a great characteristic for young people to have.” Amber: “Much of the success of the IBA today is attributable to Joe DeHaven,* who is an entrepreneur at heart. Joe had the courage and the entrepreneurial spirit to try and fail and try again. Because of that, in an environment where we had an economic recession and Indiana lost 50 banks in the last 10 years, the Association is stronger today than ever.” Cindy: “It’s especially important in Indiana, which has more economic challenges, to be innovative. It forces us to be even better performers. That’s when we create better products and services to serve the communities.” These next four questions are directed to individual panelists. Cindy, how does the work of the Federal Home Loan Bank of Indianapolis help set the foundation for the success of Indiana banks? Cindy: “The Federal Home Loan Bank System and the Indianapolis Bank have been around for over 80 years. Our purpose is to provide reliable access to liquidity to our member financial institutions ‒ for us, that’s in Indiana and Michigan ‒ for community development and housing finance, while offering them a market return on their investments. “Commercial banks became eligible for FHLBI membership as a result of FIRREA back in 1989, and now they are the predominant member segment in the Indianapolis district. We currently serve more than 100 commercial and savings banks in Indiana. “It’s really important for us to be able to partner with our Indiana banks. It’s crucial that we are listening to their needs and meeting them, whether through our wholesale advance program or our Mortgage Purchase Program. “I should also point out the importance of FHLBI’s Affordable Housing Program, which enables our members to make a lasting impact in their communities. Each year we set aside 10 percent of our profits to fund that program. For any members not yet engaged with AHP, I encourage them to check it out.” Annette, what changes in leadership opportunity have you observed in banking throughout the years? Annette: “When I started 25 years ago, managers wore many different hats. For example our investment adviser was also our marketing director. Many areas of the bank now require a dedicated individual with the required education or experience. Areas of specialty like compliance, information security and technology have contributed greatly to more opportunity for leadership positions within the organization. “The challenge is sustaining all of these higher-level positions, while trying to be efficient. The regulatory burden has forced us to increase our investment in people and technology to comply. The benefit to the community is we pay for the expertise in providing more high-paying positions; the detriment is that it’s at a greater cost to the bank. “I’m a huge advocate for leadership training. I didn’t have that opportunity early in my career, because it wasn’t readily available when I took my role. The IBA has been very proactive in growing future leaders, which I admire and appreciate, because it helps me as a community bank to offer the type of education that people are going to need to carry the bank into the future. “I participated in the IBA’s Leadership Development Program as a member of the first graduating class. I think we all need to get out of our comfort zones regularly to grow. We encourage all of our future leaders to take advantage of networking opportunities, even if not bank-specific, to get out and experience what other companies’ challenges and opportunities are. For me, education is a key component to the longevity of our bank.” Amber, how will a smooth leadership transition at the IBA benefit the Indiana banking community? Amber: “I am entering leadership at the IBA from an enviable position. Joe has done a terrific job of setting us up for success. We have a tenured and highly capable staff, we Amber R. Van Til is president and chief I\IGYXMZI SJƤGIV SJ the Indiana Bankers Association.
12 JANUARY / FEBRUARY 2017 are financially secure, and we are able to serve our membership well. I joke that I am just going to try to not mess it up! Seriously, though, my mandate is to build on Joe’s success. “In 2017 we will embark on a robust strategic planning retreat with the IBA board of directors. Our mission is to address how the IBA can adjust to the ever-changing industry, and how we can best serve our membership moving forward. What changes do we need to make in order to help our banks adjust to the changing world of financial services? “Also this year, our team is continuing to engage in a vigorous professional development program, so we can go from good to great. We want our members to feel that we are providing the very best service to them at all times. When our members think of the IBA, we want them to think, ‘They’ve got my back.’ We strive to be each bank’s partner in success.” Kristin, what should Indiana banks be doing now to attract and retain talent into the future? Kristin: “If talent attraction and retention isn’t a strategic priority for every institution right now, it should be. It’s not specific to banking, it’s far beyond our industry, but banking is fiercely competitive. The challenges that Annette mentioned pertaining to specialist roles do make it very competitive. “We’ve seen a dramatic shift in the level of significance and importance of human resources in our company. The leadership team’s influence and management practices within an organization have changed to include: Do we have career pathing for all of our team members? Do we have talent management programs? Are our performance management programs sound? “It has absolutely everything to do with the corporate culture that you’re providing and knowing your people, knowing what motivates them and being willing to change. That may mean recalibrating your incentive program or offering flexible hours, if those matter to the people who want to build careers within your organization. “Strong talent attraction and retention tactics likely involve numerous adjustments, but the emphasis is on people. We have to know what motivates them, what tools they need and what work environment they prefer. Whether it’s through a survey, a oneon-one conversation or a suggestion box, it’s important to ask your team what is important to them. It’s not always money or extra time off. “It also is important to maintain strong relationships with universities and colleges for talent attraction, as well. If you can initiate internship or job-shadowing programs, or have your bankers out on campuses to speak to students about how banking has changed, the results can be quite rewarding.” For the full panel: Does entrepreneurship fit into the banking world and, if so, how can it be encouraged? Annette: “It certainly fits in, because innovation is such a big topic. If you have individuals who have entrepreneurship ability, they will bring about innovation.” Amber: “You can drive that spirit by building a culture of appreciating and valuing free thought and brainstorming. There are work environments where someone brings up an idea, and somebody else shoots it down. That doesn’t foster the entrepreneurial spirit. But if you have an environment where you encourage each other and build on ideas, then people feel more open to speak. “Our bankers are the system of checks and balances for entrepreneurs. Custom- “There’s so much more opportunity today to learn from inspiring leaders,” observes Annette Russell (far left), 2017 chair of the Indiana Bankers Association. 7 .SI (I,EZIR VIXMVIH EW GLMIJ I\IGYXMZI SJƤGIV SJ XLI Indiana Bankers Association effective Dec. 31, 2016. ers come to bankers and rely on them to tell them whether their ideas are financially feasible. Bankers are experts in the entrepreneurial environment, so they certainly have good footing to be entrepreneurs within their own businesses.” Cindy: “You have to support an environment where employees feel that they can and should share ideas. You have to be very creative and look beyond traditional meetings. We’ve moved toward more working groups. Someone will come up with a concept and then get a group together to talk about it on a regular basis. It’s not as formal, and our employees have been receptive and committed.” Kristin: “I view entrepreneurship as essential to be able to foster an engaged workforce. It doesn’t have to be inventing some grand new product or system for the organization. It’s how banks can continue to identify little ways to competitively differentiate themselves from each another. Entrepreneurship could be developing a service mechanism or an efficiency that we didn’t recognize. “Some of the smallest tweaks can provide awesome marginal gain. An entrepreneurial idea that provides just a little something can end up having a big impact down the road. It’s important competitively to engage the workforce to foster that type of environment.” HB COVER STORY
Guiding Indiana Community Banks Since 1978 Kent, OH Strategic Planning Capital Planning Liquidity Planning Regulatory Assistance Stock Valuations Capital Markets Internal Audit Information Technology Recruitment & Human Resources Lending & Loan Review Regulatory Compliance Policy Development Young & Associates, Inc. Consultants to the Financial Industry 38 YEARS 1978 - 2016
14 JANUARY / FEBRUARY 2017 On Dec. 31, 2016, S. Joe DeHaven completed his final day as chief executive officer of the Indiana Bankers Association. He had been serving as CEO of the Association since July 1, 2007, and in total had been in banking for 47 years. Essentially DeHaven forged two careers – one as a banker, one as a bank trade association executive – both in service to the Indiana banking community. DeHaven began his career with Merchants National Bank of Muncie, now First Merchants Bank, working the night shift in the computer room while completing studies at Ball State University. He fulfilled various roles, rising to executive officer level, until he left in 1990 to fulfill a call to leadership with the Community Bankers Association of Indiana (CBAI). Though the CBAI was suffering fallout from a leadership void, DeHaven gamely took on the challenge of guiding the organization as CEO. Through perseverance, he and his team fashioned the CBAI into a formidable trade association. Then, in 2006, the climate was ripe for the strengthened CBAI to merge with the IBA. DeHaven joined the new IBA as president and chief S. Joe DeHaven Dedicated service to banking operating officer; nine months later, he was named president and CEO. During DeHaven’s leadership tenure at the IBA, membership has expanded to include all Indiana-headquartered banks and most out-of-state banks operating in Indiana. The Association’s budget has nearly tripled, making the IBA one of the most financially sound bank trade associations in the nation. Additionally the Association and staff have won multiple awards and honors, including more than 25 statewide awards from the Indiana Society of Association Executives, which honored DeHaven as Association Executive of the Year in 2010. Through the years, DeHaven has served the banking community in multiple leadership capacities. Organizations served include the Graduate School of Banking at the University of Wisconsin, the Herbert V. Prochnow Educational Foundation, the IBA Group Health Insurance Trust, the New Markets Tax Credit Advisory Board of the Cinnaire Corporation Fund for Housing, the Indiana Legal Foundation, Friends of Traditional Banking, the State Bankers Association Alliance, the Independent Community Bankers of America board and Minority Bank Council, the Council of Community Banker Associations, the American Bankers Association Government Relations Administrative Council, the Indiana Statewide Certified Development Corp. and Family Services of Delaware County. He is a member of the IBA Forty Year Club and a graduate of Ball State University and of the Graduate School of Banking at the University of Wisconsin. S. Joe DeHaven served the Indiana Bankers Association as president and chief I\IGYXMZI SJƤGIV 2007-2016, completing a career of 47 years in Indiana banking. SPECIAL TRIBUTE
Hoosier Banker 15 Hoosier Banker recently had the opportunity to interview Joe DeHaven about his career and industry insights. How did your banking career develop? “It began when I was a junior at Ball State University. I was a member of Delta Sigma Pi professional business fraternity, and we took a field trip to the data processing center of Merchants National Bank of Muncie. We arrived, and I noticed that the person in the computer room was the guy who sat next to me in my law class. “He saw me, unlocked the door and said, ‘Come on in, and we’ll talk.’ So instead of paying attention to the tour, I went into the computer room. He asked if I was looking for a job, because two people had turned in their notice that day. I said I had never seen a computer, let alone operated one. He said, ‘I can teach you everything you need to know in two weeks.’ “The next Monday I started working there. That was Feb. 20, 1970, and I was there for a year-and-a-half or so until I graduated. Then I was offered the opportunity to go on to the bank’s management training program. I was exposed to a number of different areas of the bank, and wound up in lending. “My real first opportunity was in the consumer lending area, which I joined when I was 24. By the time I was 28, I was assistant manager, and then later I wound up in the trust department. I ended up going to a lot of different areas, learning about various aspects of the bank. S. Joe DeHaven (center), then with the Community Bankers Association of Indiana, meets with William H. King (left), Indiana Bankers Association, and James H. Cousins, Indiana League of Savings Institutions, in 1999. By 2006, all three organizations had merged into the YRMƤIH -&%
16 JANUARY / FEBRUARY 2017 “The culmination was being selected to go to the Graduate School of Banking in Wisconsin. Being in that competitive environment, with people who were similarly situated, was a confidence-builder, because I did pretty well. Around that time, I got ‘bit’ by wanting to be in more of a leadership position. “Though I had been supervising others and managing fairly large departments, I wanted to have total responsibility of an organization. It helped that I had been exposed to a huge variety of experiences within the bank.” What attracted you to joining the Community Bankers Association of Indiana? “I was at that point in my career when I wanted to run an organization, and the Community Bankers were in need of leadership. The organization was in trouble, but I thought, ‘If I can take something that’s in trouble and fix it, great. And if I don’t, maybe someone else will hire me.’ “It worked out. I had good people around me, and we were able to not only save the CBAI, but actually to make it thrive. It became a pretty good little company.” How did you and your team turn the CBAI around? “Hard work, and going out and asking bankers what they needed. We’d ask, ‘What do you not have today that we might be able to provide, or that we might all be able to access on a collective basis?’ There were negative feelings toward the Community Bankers Association, and we had to work hard to provide the products, services and programming to help solve problems. “We were able to pick up important relationships within the first year ‒ The Baker Group, Deluxe Corporation, Young & Associates and ICBA Bancard. Those relationships still exist today.” How did it occur to you to establish those relationships? “I wasn’t very smart, but I was smart enough to know that I needed to talk to someone who had already been there and done it. So even before my first day in the office, I contacted Scott Williams, who was then executive director of the Community Bankers Association of Ohio. I had only met Scott once or twice, but I called him and said, ‘I’m the new guy in Indiana, and I need help. Can I come over and spend a weekend?’ “So I went to Ohio. I got there early on a Saturday morning, and we spent the entire day, just Scott and I, in his office. He made suggestions of what we might want to do, and among those suggestions was contacting The Baker Group and Young & Associates. I took to heart what he said and followed up. “Scott was very kind to share everything he knew, and I literally filled a yellow legal pad with notes that day. I came back to Indiana prepared with page after page of ideas. Scott’s help really got me started right.” What factors in 2006 led to the successful merger of the CBAI and the IBA? “A lot of the success had to do with the primary reason that the CBAI was formed, which was to combat cross county line banking. That belief was lost in Indiana law in 1985, with the passage of Senate Bill 1, the Banking Structure Reform Act. Then in 1994, the federal government passed the Riegle-Neal Act, which permitted nationwide banking and branching. “By 2006, CBAI’s purpose to exist had gone away, and there was a belief that, with fewer issues between big banks and small banks, perhaps there wasn’t a need to have a separate organization. Also there were folks who believed that if we had one organization, it would be stronger politically, financially and programmatically, all of which has proven to be true. “The environment was right. Everyone was coming to the realization that it was time.” In 2007, when you were named president and CEO of the IBA, what were your primary goals? “My first goal was just to complete the merger. The legal documents had been signed, but we still had bankers and staff from both sides who weren’t completely transitioned. So the first goal was to get everybody on the same page, looking forward rather than backward. “The second goal was to develop the appropriate culture for the new IBA. The old IBA had its culture, and the CBAI had a very different one. The new organization had to come up with an appropriately new culture. “We also needed to beef up Indiana BANKPAC. There had not been emphasis on the PAC, so we needed to work on that. Amber Van Til did most of that work, and did a great job. “We needed to continue with the outstanding educational programming that both organizations had, but eliminate the duplication. The goal was to create a robust educational program to benefit our members. “We also had to enlarge the offerings that we had relative to products and services, and change the focus to one of collectively partnering with our members. We needed to be able to provide management services, sales services or other services that would benefit our membership by our participation. The Title Center of Indiana is a good example of that sort of partnership. “Last, and certainly not least, neither As chief executive of the Community Bankers Association of Indiana, Joe DeHaven leads a strategic planning session. Shown are (left to right): DeHaven; George Astrike, German American, Jasper; Peggy Howard, Bank of Wolcott; and Terry King-Collier, The Farmers State Bank, Sweetser. SPECIAL TRIBUTE
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