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2017 Vol. 101 No. 4

HB HOOSIER BANKER MAGAZINE indianabankers.org Tom Fite Indiana DFI Director PLUS! 2017 IBA Mega Conference JULY / AUGUST 2017

8250 Woodfield Crossing Blvd. ^ Indianapolis, IN ^ fhlbi.com Transform Business YOUR 2017 SHAREHOLDER SYMPOSIUM Kelly McDonald Visit fhlbi.com/symposium to register today Attend FHLBI’s Shareholder Symposium FHLBI’s 2017 Shareholder Symposium will feature three thought-provoking keynote speakers that will help you discover ways to transform your business. Marci Rossell, former CNBC Economist, returns by popular demand to provide fresh insights on the economy in her own unique and energetic style. Scott Klososky, a CEO of three successful technology startups, will discuss digitalization and digital transformation in banking and insurance. Kelly McDonald, a nationally recognized expert in marketing, will provide thought-provoking ideas to help you reach diverse customer segments. Marci Rossell Scott Klososky

4 JULY / AUGUST 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 President and CEO ......................................................Amber R. Van Til, Indiana Bankers Association Constituent Directors ICBA State Director ........................................Michael H. Head, First Federal Savings Bank, Evansville 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 Michael J. Clampitt .......................................................................................North Salem State Bank Jason L. Ernst ............................................................................First Financial Bank, NA, Terre Haute Ryan Hart ......................................................................................................Lake City Bank, Warsaw J. Daniel Maddox ...............................................................................Citizens State Bank, New Castle Jon-Myckle D. Price .........................................................Security Federal Savings Bank, Logansport 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 President and CEO ................................................................................................... Amber R. Van Til 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. Executive & Government Relations Coordinator ........................................................ Joshua A. Myers Events & Products/Services Assistant..............................................................................Susan Clark Education Meeting Coordinator .....................................................................................Marcy Borden Education Meeting Coordinator .................................................................................... Elizabeth Kilty Accountant ......................................................................................................................Timothy Fry Technology Manager ....................................................................................................... Tracy Kubly Administrative Assistant ...............................................................................................Michelle Long )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. 4 ;SSHƤIPH 'VSWWMRK &PZH 7YMXI ) Indianapolis IN 46240-7321 phone/fax 317-387-9380 @indianabankers Publisher: Amber R. Van Til 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 As director of the Indiana Department of Financial Institutions, Thomas C. Fite is a frequent visitor to the Indiana Statehouse. FEATURES 6 Vantage Viewpoints Amber R. Van Til, IBA 7 IBA Calendar of Events 8 Board Review Andrew J. Briggs, Bank of Geneva 2I[ 3JƤGIV 'ERHMHEXIW 44 A New Domain Camden R. Fine, ICBA 45 A Do-Something Washington Robert S. Nichols, ABA COVER STORY 10 Tom Fite: Indiana DFI Director ARTICLE SPOTLIGHT 16 Ideas That Deliver: 2017 IBA Mega Conference Christina M. Bennett, IBA FLD FOCUS 20 No. 2: Google It! Kristin Marcuccilli, STAR Bank, Fort Wayne COMPLIANCE CONNECTION 22 Acquisition of Voting Shares Brett J. Ashton, Krieg DeVault LLP HUMAN RESOURCES 24 Severance Agreements Debra A. Mastrian, SmithAmundsen LLC PSP SHOWCASE 9THEXMRK 3JƤGIW# &YMPHMRK 2I[ &VERGLIW# Rod Lasley, IBA 28 Mobile Customer Engagement Rod Lasley, IBA DIRECTORS / SENIOR MANAGMENT 30 The Growing Burden of Underfunded Public Pensions Dana Sparkman, The Baker Group OPERATIONS / TECHNOLOGY 35 Payments: The Bumpy Road Ahead Paul Waltz, The SHAZAM Network MARKETING / SALES 36 Targeted Marketing Achim Griesel, Haberfeld Associates 38 An Era of Disruption Bret Anderson, NetGain Technologies DEPARTMENTS 23 IBA Employees of the Month 25 Banking Center Update 34 Honorable Mentions 41 From the Board Room 42 Associate Members’ Corner 46 Banking on Community 48 In Memory Of 48 Taking It Easy 49 Bankers on the Move 53 Anniversary Milestone 54 Advertisers Index

6 JULY / AUGUST 2017 Its full name is the Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs Act, but it’s better known as the Financial CHOICE Act. This Act is designed to bring much-needed relief to the U.S. financial services landscape by reducing regulatory overreach and by increasing accountability. The Financial CHOICE Act passed the U.S. House of Representatives on June 8 by a vote of 233 to 186. The industry hailed this first step to law as a victory, while many consumer groups expressed fear of returning to the conditions that ushered in the financial crisis of 2008. For a piece of legislation that is widely talked about, ironically the Financial CHOICE Act is not well understood. A lengthy document – some 600 pages long – the entirety of the Act has been read by few, misinterpreted by many. Misinterpretation has spawned several false beliefs, namely that the Act will deregulate the financial services industry to the point of undermining safety and stability. In starkest terms, it is portrayed by opponents as “pro-business” and “anti-consumer” … as if the needs of both are mutually exclusive. First, when will we stop dividing the world into two camps, consumers vs. businesses? When can we finally appreciate that the two are interdependent, with consumers benefiting from a strong economy, and businesses reliant on the consumers they serve? Second, let’s look again at the full name of the Act: “Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs.” More than a catchphrase, this name inventories who would benefit from its passage. Not just investors, not just entrepreneurs, but consumers would benefit. How? The Financial CHOICE Act streamlines financial services by reducing overregulation in a multitude of areas, such as mortgage lending, call reports and data collection, to name a few. Bear in mind that since the 2010 enactment of the DoddFrank Act – the single largest piece of banking legislation in U.S. history – the industry has spent billions of dollars scrambling to comply. Dodd-Frank was sold to the public as an antidote to the financial crisis, but instead it has strained banks’ ability to stay in business and raised costs for everyone engaged in the banking process, including consumers. Yet because of the false sense of security DFA provides, the prospect of rolling it back is hyped into a rallying cry against the Financial CHOICE Act. Which is a shame, because the Act would bring additional benefits to consumers. One is that it Amber R. Van Til President and CEO Indiana Bankers Association avantil@indianabankers.org @grbanker VANTAGE VIEWPOINTS would bring transparency to the regulatory process. As an example, post DFA, the Federal Reserve was granted substantial new powers, but was not required to meet proportional accountability requirements as a check against those powers. The Financial CHOICE Act would retain the Fed’s independence, but also would require audits of all operations, keeping the Fed accountable to the public it serves. Another consumer benefit of the Act is that it would bolster free-market choices, hence the CHOICE acronym. “Free market” is a key phrase, because it’s the crux of misperception about industry views on regulation. Some groups that oppose the Financial CHOICE Act wrongfully depict banking as being anti-regulation. In actuality, the banking industry welcomes appropriate regulation, because right-sized regulation helps keep the industry safe and secure. Additionally, banking advocates understand that the absence of regulation would permit monopolies to form, which would negate the benefits of free market economics. Appropriate regulation is essential. What the banking industry opposes is overkill. Too much regulation crimps processes and raises costs, resulting in added expense to consumers. Excessive regulation can even force smaller operations out of business, leaving consumers with fewer financial choices. It remains to be seen what the fate of the Financial CHOICE Act will be. The omnibus bill is not going to be heard in the Senate, but we may be reaching out to you, our grassroots bankers, to advocate in favor, as smaller bills portions of the Act are considered. Because this topic has taken on a divisive rhetoric, you can help by talking to friends, family, customers, people in the community and others who know you and respect you. Explain that the Act isn’t “us vs. them.” Instead it’s for all of us, working together toward a shared goal of “Creating Hope and Opportunity.” HB

Hoosier Banker 7 View full calendar and register online at indianabankers.org/education-events, or click on the icons above in HB Digital. IBA Center for Professional Development | 8425 Woodfield Crossing Blvd., Suite 155E | Indianapolis, IN 46240 | 317-387-9380 & EVENTS CONFERENCES CLASSROOM INSTRUCTION ONLINE LEARNING Convene and connect at signature IBA events. Build knowledge via webinars or on-demand. Learn with peers in a classroom setting. Calendar of Events CALENDAR UPDATE Community Bankers for Compliance Series - Session 2 Aug. 7 • The Landmark Centre, Fort Wayne Aug. 8 • IBA Center Aug. 9 • IBA Center Same-Day ACH Symposium Aug. 10 • IBA Center IBA Leadership Development Program Aug. 14-18 • Wooded Glen Retreat, Henryville Let’s Take a Deep Dive Into Social and Digital Media Aug. 15 • IBA Center IBA Regional Director Workshops Aug. 15 • The Landmark Center, Fort Wayne Aug. 16 • IBA Center Aug. 17 • Wooded Glen Retreat and Conference Center, Henryville Branch Management Series: Session 3 - Growing the Retail Branch Aug. 22 • IBA Center Advanced Branch Management Aug. 23 • IBA Center Numbers Talk, and Lenders Need to Listen Aug. 23 • IBA Center Understanding Business Borrowers Aug. 24 • IBA Center Essentials of Banking: Session 3 - Safeguarding the Bank and Customer Service Aug. 24 • IBA Center Compliance for Mortgage Loan Processors Aug. 30 • IBA Center Talent Assessment and Succession Planning Aug. 31 • IBA Center Advanced Agricultural Credit Conference: Successfully Navigating the Repayment Obstacles Ahead Sept. 6-7 • Four Points by Sheraton, West Lafayette Call Report Update Sept. 7-8 • IBA Center IBA Annual Convention Sept. 10-12 • French Lick Resort Employment Law Compliance for Bankers Sept. 14 • IBA Center Advanced Credit Analysis Sept. 14-15 • IBA Center Deposit Account Administration Sept. 19-20 • IBA Center Mortgage Lending School Sept. 19-21 • IBA Center 6MWO 1EREKIQIRX 3JƤGIV *SVYQ Sept. 21 • IBA Center Navigating and Understanding the UCC for Compliance Professionals Sept. 22 • IBA Center IBA Annual Washington Trip Sept. 24-26 • Washington, DC HMDA Essentials Sept. 26 • IBA Center Senior Retail Banking Forum Oct. 4 • IBA Center Effective Prospecting Strategies … Your Roadmap to Acquiring New Business Oct. 5 • IBA Center 'LMIJ *MRERGMEP 3JƤGIV *SVYQ Oct. 10 • IBA Center • Group 1 Oct. 13 • IBA Center • Group 2 Senior Lender Forum Oct. 11 • IBA Center • Group 1 Oct. 12 • IBA Center • Group 2 Cybersecurity Conference Oct. 11-12 • Renaissance Indianapolis North Hotel, Carmel Community Bankers for Compliance School Oct. 16-20 • IBA Center Marketing Directors Forum Oct. 24 • IBA Center IRA School Oct. 24-25 • IBA Center -8 3TIVEXMSRW 3JƤGIV *SVYQ Oct. 25 • IBA Center • Group 1 Oct. 26 • IBA Center • Group 2 Community Bankers for Compliance Series - Session 4 Nov. 6 • The Landmark Center, Fort Wayne Nov. 7 • IBA Center Nov. 8 • IBA Center Inaugural Banking on Women Conference Nov. 8-9 • Indianapolis Marriott North Hotel Internal Audit and Risk Management School Nov. 9-10 • IBA Center Fundamentals of Commercial Lending Nov. 14-15 • IBA Center HR Forum Nov. 15 • IBA Center Midwest Agricultural Banking School Nov. 27-30 • Purdue University, West Lafayette Branch Management Series: Raising the Bar for Sustainable Growth Nov. 28 • IBA Center Universal Banker: Growing the Retail Branch Nov. 29 • IBA Center Ag Clinic Nov. 30 • Purdue University, West Lafayette Future Leadership Division Annual Conference Nov. 30-Dec. 1 • Omni Severin Hotel, Indianapolis Successful Business Development: Making 2018 Your Breakout Year Dec. 5 • IBA Center Lenders Guide to Mortgage Lending Dec. 5-6 • IBA Center

8 JULY / AUGUST 2017 BOARD REVIEW As bankers, we’re the glue of our communities, striving to do what’s right for our communities, which are the reason we exist. I am fortunate to serve as president and CEO of Bank of Geneva – a small community bank operating in a small market. Like other small-town banks, we are ever cognizant of our image as the face of our community. Personally, I feel that responsibility at a very deep level, because I am a fifth-generation banker, serving the descendants of the customers served by my great-great-grandfather. History runs deep in my life. My wife Rhonda and I live in the house my great-grandfather built, where both my grandfather and father were raised. Today it’s a banking museum of sorts, with antique adding machines, typewriters, rubber stamps, bank light fixtures, and assorted odds and ends. I even have our original FDIC certificate and incorporation papers. My family and I never threw anything away. History is part of my community outreach, too. I serve on the boards of the Indiana State Museum and Limberlost State Historic Site, in addition to service with the Northeast Indiana Regional Development Authority, Adams County Economic Development and Adams Public Library System. Though I grew up in a banking tradition, while studying biology at Ball State University, I considered teaching as a career. This was while the Vietnam War was winding down, though, with a lot of people enrolled in college to stay out of the draft, and the teaching market was tight. I was continually working at the bank in the summer and during vacations, and finally a light bulb came on. I enjoyed the work and saw that banking was my future. It definitely was familiar to me. Growing up, my dad worked at the bank, and my mother was a schoolteacher, so I spent a lot of time with my grandmother, who would babysit. Anytime help was needed at the bank, she’d be called in, and I’d go along to help. Even when I was about four years old, I’d help with errands, or count and roll pennies. On weekends, my brothers and I would stay at my grandparents, then on Saturday morning my grandfather would make pancakes, and afterward we’d all go to the bank to work. It was a family business, working each Saturday alongside my grandfather, my dad, my brothers and sometimes my grandmother. I was lucky growing up. My parents would take us on a big trip every year. We didn’t go to amusement parks; we went to museums. We’d go to Washington, DC, or Williamsburg, Virginia. In 1964 we went to the World’s Fair in New York City. My mother would dress my brothers and me alike, with matching pants, knee-high socks and shellacked hair. I’m also lucky, because we have longtime family friends in France. My father had been stationed in the south of France during World War II, and he became close with a family there. He didn’t drink or smoke, so he gave his PX allotments to the family to sell on the market, which was a tremendous financial help to them. That friendship continued when he returned to the States, and over the decades various generations of both families have traveled back and forth to visit each other. Rhonda and I recently hosted the 19-year-old grandson of one of my father’s friends as an exchange student. Pierre was the fifth family member to come stay an extended time with us in Geneva. My interest in world affairs and travel ties in with my interest in government affairs. I’m a strong believer that we have responsibilities to engage in the political process. I enjoy meeting our legislators to dialogue with them. In the end, they’re just people, and they like to hear from their constituents. Banking is a wonderful business, especially in Geneva. We have almost no delinquency at our bank, yet we’re at a 130 percent loans-to-deposit ratio, one of the highest in the state. We know our customers, and we manage our risk. I often say that business is people. Both the staff and the customers of Bank of Geneva are really good people, and I’m blessed to work with them. HB Andrew J. Briggs Second Vice Chair Indiana Bankers Association President and CEO Bank of Geneva F C I Floodplain Consultants Inc. "We visit the site!" www.floodplain.com TM PREFERRED SERVICE PROVIDER OF THE IBA. 6HUYLQJ ,QGLDQD OHQGHUV VLQFH HOW IS YOUR FLOOD ZONE DETERMINATION PROVIDER HANDLING BORDERLINE CASES? Flood Zone Determinations LOMA/LOMR Assistance Flood Insurance Guidance Interfacing with: Encompass 360, Calyx Point, Byte Pro & Fis-Serv We take pride in our industry leading accuracy and customer service. Find our what a true “community bank” minded company we are. Craig Callahan 800-945-0246 ccallahan@floodplain.com

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10 JULY / AUGUST 2017 COVER STORY Tom FITE Indiana DFI director We’ve been around for a long time,” says Thomas C. Fite of the Indiana Department of Financial Institutions (DFI), which he serves as director. “We regulate a plethora of organizations,” Fite continues. “Basically whenever credit is being extended, that falls under our purview.” The DFI was formed in 1933 by the Indiana Financial Institutions Act in order to bring regulatory supervision over commercial banks, trust companies, private banks, savings banks, building and loan associations, credit unions and finance companies incorporated under Indiana state law. While similar organizations were formed nationwide as a response to the Great Depression, the Indiana DFI has a unique history, as its formation was influenced by the efforts of Herman B Wells,1 the legendary late chancellor of Indiana University. In the early 1930s, Wells completed a study showing a need for a state regulatory agency with greater discretionary authority; results of the study led to legislative action that created the DFI. Since its formation, the scope of the Indiana DFI has widened to include supervision of other types of financial-transaction organizations. These include pawnbrokers, industrial loan and investment companies, money transmitters, check cashers, budget service companies, rental-purchase agreement companies, and licensees under the Uniform Consumer Credit Code and Indiana Small Loan Act. Tom Fite joined the DFI as a bank examiner in 1998. For the next 15 years, he held responsibilities in field examination and regional supervision, then in 2013 was named deputy director of the depository division. In January 2016, Fite was appointed director of the DFI by then-Indiana Gov. Mike Pence. Fite is a graduate of Ball State University and earned an MBA from Indiana Wesleyan University. Hoosier Banker recently interviewed Director Fite about the role of the Indiana DFI in regulating the safety and soundness of Indiana financial institutions. What is the regulatory benefit of the DFI’s cordial relationship with the banks of Indiana? “Although we maintain a strong presence of professional skepticism, we are also in many ways on the same team as bankers. Regulators and bankers share the same goals of promoting financial strength, and avoiding financial crises and corrections. Bankers understand that we have a job to do, and that we’re both trying to get to the same place at the same time. “I attend the Indiana Bankers Association Mega Conference, the Annual Convention and other events to meet with bankers in a nonexamination setting. I try to speak one-on-one with as many bankers as possible during these events. The subsequent benefit is that bankers feel more comfortable contacting me when issues arise within their institutions, and we can have a non-abrasive, matter-of-fact discussion, even when my regulator responses are not favorable. The mutual goal is to resolve problems quickly and thoroughly. “Another benefit to visiting with bankers is that it makes them comfortable to proactively reach out to us. So if a bank is looking to introduce a new program or product, they know they can come to the DFI and say, ‘We’re thinking about this new product. Can you tell us if there are regulatory problems with it?’ “We’ll point out that there might be a financial risk concern or a “

Hoosier Banker 11 PHOTO CAPTION: Tom Fite speaks passionately about the mission of the Indiana Department of Financial Institutions. compliance aspect to consider. We’ll ask, ‘Have you thought about doing it some other way?’ It’s a strategic discussion. “It also helps us at DFI, because we learn a lot in these discussions. We’re generalists. We have a lot of knowledge covering a lot of different areas in banking. However, I would estimate that we would possess somewhere around 50 percent of all available knowledge in any particular banking category, while banks have experts who have the advantage of specializing more narrowly, and therefore can drill down deeper into certain topics. Therefore I have to be open-minded and recognize that I have an opportunity to learn during these discussions, and something I learn might impact my supervisory response.” What is something you would like Indiana bankers to know about the DFI that they may not already know? “First, I think it would be interesting if bankers understood the day in the life of an examiner. They see the examiner as somebody who comes in Monday morning, asks a thousand questions, asks for lots of documents, then leaves on Friday or the second Friday thereafter. A couple of weeks later, the examiner presents a report to the board, and that’s pretty much the end of it. “But it would be interesting for bankers to understand what the examiner lifestyle is really like. For example, at the end of each work day, when bankers go home to their families, examiners go back to the Holiday Inn Express. They don’t go home to their backyards and have cookouts with their kids. “An examiner’s life means missing out on Little League games, anniversaries, kids losing first teeth – any of those life events that

12 JULY / AUGUST 2017 COVER STORY 8SQ *MXI OIITW JEQMP] TLSXSW ERH HVE[MRKW SR HMWTPE] MR LMW SJƤGI MR HS[RXS[R -RHMERETSPMW happen Monday through Friday. Our bank examination staff generally travel between 60 and 100 nights a year, so that’s 60 to 100 nights a year deducted from home life. “Our examiners believe in the mission of regulation in Indiana banking, but it often means missing that first step of the first child, or missing that ultrasound to hear the heartbeat. There’s a huge sacrifice being made. “The second thing I’d like for bankers to know about the DFI is the scope of what we do. Bankers would find it interesting to see how much of what we do doesn’t relate to their world. Bank examination is just a little piece of what we do here. “On top of the expansiveness of bank regulation, add in all the layers of all the other businesses we regulate. They all have their own sets of laws, and their own associations and contacts. “Finally, I think bankers would be surprised to know how much we’re involved outside of Indiana. For example we participate in regional meetings, primarily in Chicago, St. Louis and Atlanta. “We also go to several meetings in Washington, DC, where we interact with the Conference of State Bank Supervisors, and with senior management from the FDIC, the Fed, the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau and the National Credit Union Administration. “My duties include serving as state liaison with the FFIEC2 Task Force on Supervision. Meetings deal with various topics, including risk management, exam procedures, the supervisory process, regulatory updates, etc. And I’m part of a Bank Secrecy Act Advisory Group that meets with FinCen at the Treasury building semiannually. “Last year I got on an airplane somewhere around 20 times, mostly to Washington, DC, so my old travel burdens as a bank examiner have been exchanged for this more distant travel now. But I’m grateful that the state lets me do it, because each trip is an opportunity to share perspective about Indiana and to learn what’s happening in Washington DC, as well as in other states.” How does the DFI mission, which states the manners in which DFI regulates and supervises financial services providers, influence your work? “Nobody walks around here reciting our DFI mission, but we know what our mission is, and we know what our jobs are. We all grew up inside the culture and have become that culture. “As a regulatory agency, we are a service industry, and there are two primary customers of our services. The first is consumers. It is our job to ensure depositors that doing business with a regulated, state-chartered financial institution is safe and sound. “Also on the consumer side, we recognize that most people don’t read all 14 pages of disclosures, but we do. We make sure there is nothing unusual in the disclosures, and that consumers will not be taken advantage of. “We have legal experts ensuring that rates are being disclosed, that fee structures are according to law, and that products and services are appropriate. Consumer protection is our primary service. “From that emerges a secondary customer, because if the organizations we regulate do their jobs well, the state and its citizens benefit. In that sense, the very entities we regulate become customers. “For benefit of bankers, this means we educate our staff well, so that the findings of our examinations are valid. For licensees and registrants, this means we process applications quickly and accurately, doing all of the necessary background work to make sure each applicant meets the statutory requirements. “Treating our chartered entities, licensees and registrants as customers is the front end of ensuring good customer service to the consumer. “When Gov. Holcomb came into office, he announced five pillars of his agenda. Three of the pillars – addressing roads and bridges,

Hoosier Banker 13 8LI IRXVERGI[E] SJ XLI -RHMERE (*- JIEXYVIW ƥEKW SJ XLI 9RMXIH 7XEXIW ERH -RHMERE The mission of the Indiana Department of Financial Institutions is to regulate ERH WYTIVZMWI ƤRERGMEP WIVZMGIW providers in a manner that: • Assures the residents of Indiana EHIUYEXI ERH TVSTIV ƤRERGMEP services; • Protects the interest of depositors, borrowers, shareholders and consumers; • Promotes safety and soundness in -RHMERE ƤRERGMEP MRWXMXYXMSRW ERH • Advocates and enforces compliance with applicable state and federal laws. Indiana DFI Mission creating an educated workforce and fighting the drug epidemic – don’t apply to the DFI in a direct sense. However, we do have influence in the areas of the other two pillars: creating business opportunity and providing valuable government service. “Through the IBA and the banks of Indiana, the DFI can be of assistance in making sure our regulations are right-sized and sensible, allowing the banks longterm sustainable opportunities to lend and facilitate economic growth. The result is that small businesses emerge, which means job creation, which means increased spending, which then generates even more economic growth. It’s the banking circle of life. “For the other pillar, providing valuable government service, everything I have talked about here today feeds into good government service. Our obligation to provide quality service fits right in line with that goal, and I think we already exceed expectations when it comes to providing good government services at a reasonable cost.” What are the different responsibility areas of the DFI? “Legal counsel is one area. We’ve just hired a second counsel, Lyndsay Miller, who has a strong depository background, plus she was a banking lawyer in Bloomington and has taught banking law. She’s a good addition for us. “We have three primary divisions. The first is underneath the deputy of administration, Gina Williams, who’s been here for more than 30 years. Gina is responsible for everything support-driven with our agency, including hiring, policy, benefits, procurement, and billing coordination. Gina is essentially our CFO, as she is responsible for all financial reporting, budgeting and accounting. Gina and her staff really keep the DFI’s blood flowing. “Ryan Black is our deputy on the consumer credit side. The consumer lending part of banks and credit unions falls under him, as do all the check cashiers, money transmitters, paydays, pawnshops, rent-toowns, debt management companies, rental entities, etc. Mortgage also falls underneath Ryan, which is a huge responsibility. The number of entities and the range of business types in which Ryan is responsible is expansive. “Safety and soundness is the third piece. Chris Dietz is our deputy of the depository division, which was my prior role before becoming director. This area looks at business practices of banks, credit unions, trust companies and corporate fiduciaries to make sure they’re not taking on undue risks, and that they’re complying with safety and soundness statutory regulations. “Though these divisions have their own functions, we’re intentionally blurring the distinctions somewhat, so that we are a cohesive agency, with one mission and one direction. We’ve taken a lesson from how banks run their businesses, with a strategic plan and mission, goals and values, and committees that tackle those goals. This is very much still in process, but it has worked out really well so far.” How does the DFI strive to improve efficiencies and promote early recognition of risks? “Ironically we were forced into it by the most recent financial crisis. Just as for-profit entities like banks had to do, we nonprofits also had to tighten our belts significantly. So for 10 years or so, we have endured budget reversions and numerous cuts. “For us, since we don’t have factories or buildings or equipment, cutting dollars means cutting people or travel. We’ve endured 24 retirements since 2008, and for everyone who retired that we didn’t replace,

14 JULY / AUGUST 2017 the rest had to find a way to still get the core business done. We certainly became efficient during this time, because efficiency was the only way to survive. “It has been an interesting dynamic, because the DFI already had been doing things efficiently prior to the recession. Part of that came from having staff that was tenured, and also we had very driven leadership. “So while efficiency was a good thing before the crisis, it meant that, after the 1 The history of Herman B Wells dovetails with the Indiana Bankers Association, which he joined in 1928 as a TEVX XMQI ƤIPH VITVIWIRXEXMZI ,I PEXIV WIVZIH XLI -RHMERE Department of Financial Institutions as a bank supervisor before joining Indiana University in 1930 as an instructor. % FIPSZIH ƤKYVI SR GEQTYW ;IPPW WIVZIH XLI YRMZIVWMX] as chancellor from 1962 until his death in 2000. 2 Federal Financial Institutions Examination Council Along with Thomas C. Fite, three members of the Indiana banking community and one IBA associate member serve on the board of directors of the Indiana Department of Financial Institutions: Mark A. Schroeder, board vice chair – German American Bancorp Inc., Jasper Donald E. Goetz –DeMotte State Bank Paul R. Sweeney – retired from Old National Bank in Vincennes Jean L. Wojtowicz – Cambridge Capital Management Corp., Indianapolis IBA Members on DFI Board crisis, we didn’t have a lot to give in making cuts. We had some interesting challenges. We cut through the fat and were shaving bone. “As painful as those times were, these sacrifices leave us with opportunities at present. Now that we are extremely efficient and we are finally increasing staff, we have more room for training and to implement new programs in the future. Maybe we wouldn’t have had these opportunities, if not for all those tough cuts back in the day. “We’re now working on improving surveillance, and we have a new IT examination division, with an experienced head of IT and two people under him with IT degrees to do IT exams. This is a big structural change for us. “We’ve also brought in a trust examiner with more than 30 years of experience, and we’re contemplating altering our strategies in other areas as well, in both depository and non-depository examinations.” Please share a bit about home life/pastimes. “My wife LeeAnn and I were high school sweethearts. We met at Ben Davis High School in Indianapolis, then went to separate colleges. LeeAnn went to Purdue, and I went to Ball State, so we only saw each other on weekends. “After college, LeeAnn worked as a nurse at St. Vincent’s Hospital, where she still works part-time, and I was hired here at DFI. For the first 15 years, I traveled as an examiner, leaving on Monday and seeing LeeAnn again on Friday. It was like we were still in college. “When we started our family 10 years ago, it was a challenge to be on the road. That’s why I feel passionate about the sacrifices that examiners make, because I remember those phone calls of ‘Daddy, when are you coming home?’ “LeeAnn and I now have three children. Cooper is 10, Hunter is seven, and our little girl Alaina is two. “The boys are very active in sports, so pretty much every night there’s a practice or a game going on. I also coach Little League Baseball and help coach elementary school age wrestling. “It’s a busy family life. Cooper, as the oldest is the leader, especially in sports. Hunter is the social one. Wherever we go, he knows the names of everyone ages 6 through 10, and stops to talk to all of them. And Alaina, the baby, rules the roost. She added a fun new dynamic when she came along. “Most of the time when I’m not working, I’m with my family. There’s not a lot of ‘me’ time, but after having traveled for 15 years, I’m happy to be home.” HB Tom and LeeAnn Fite maintain an active family life. Shown are (clockwise from upper left): Tom, Alaina, LeeAnn, Cooper and Hunter. VIDEO BONUS Thomas C. Fite DFI Director The Indiana Department of Financial Institutions is in hiring mode. In this video, Director Tom Fite explains what the DFI seeks in new applicants, and describes the close-knit workplace culture. Both entry-level and experienced professionals are invited to consider career options at the DFI. Click the red arrow above to view the video in HB Digital online. For more information about employment opportunities at the Indiana Department of Financial Institutions, contact the DFI at 317-232-3955 or 800-382-4880, or visit the DFI webWMXI EX MR KSZ HƤ

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

16 JULY / AUGUST 2017 ARTICLE SPOTLIGHT Ideas That Deliver 2017 IBA Mega Conference

Hoosier Banker 17 Christina M. Bennett, CMP Vice President- Meetings & Events Indiana Bankers Association cbennett@indianabankers.org @cbennettin Delivering Key Takeaways was the focus of the 2017 Indiana Bankers Association Mega Conference, now in its 26th year of sharing winning ideas and strategies with the Indiana banking community. This year’s Mega Conference drew a crowd of 1,254 attendees, eager to network and learn in support of the industry. Educational events took place May 3-4 at the Indiana Convention Center, preceded by a golf outing on Tuesday, May 2, at the idyllic Country Club of Indianapolis. The weather was brisk and breezy, but skies were blue and cheerful for golfers in attendance. Congratulations to the winning golf team: Tim Beloat, The Baker Group, Indianapolis; Pat Botts, MutualBank, Muncie; and Dave Coffey, Mutual Savings Bank, Franklin. Also, thank you to the members of the IBA Future Leadership Division who assisted by selling mulligans as a fundraiser for Indiana BANKPAC. The educational component of the Mega Conference kicked off early on Wednesday, May 3, with a variety of concurrent sessions covering the track areas of Compliance, Directors, Operations & Technology, Retail Banking, Sales & Customer Service, and Trust. Wednesday’s luncheon featured recognition of IBA members and associate members, as the IBA presented awards to Five Star Member banks and to Diamond Associate Members. Keynote presenter Kevin Brown rounded out the luncheon with a stirring message on “The Hero Effect.” Late Wednesday afternoon, Mega attendees mixed and mingled for the always-popular Mega Celebration. Following the celebration, camaraderie continued with a Future Leadership Division reception. A special addition to Mega this year was a dinner gathering of friends and family of S. Joe DeHaven, retired IBA chief executive officer, to honor him for his 47 years of service to banking. Among other tributes, DeHaven was presented with a Sagamore of the Wabash award. On Thursday, May 4, Mega education resumed with concurrent sessions covering Business Lending, Financial Management, Human Resources, Marketing, Risk Management and Strategic Thinking. Thursday luncheon highlights included a Maxi Awards presentation, showcasing the best of Indiana bank marketing, and a humorous-yet-insightful keynote by Sam Glenn, a.k.a. “The Attitude Guy.” All told, the 2017 IBA Mega Conference offered nearly 50 educational opportunities within a two-day span, while providing quality networking for more than 1,200 attendees. Mega has proven an enduring success, thanks to the support of the planners, sponsors, trade show exhibitors, speakers, attendees and others who make this event possible. Please plan to join us for next year’s Mega Conference, May 1-3, 2018, at the Indiana Convention Center. HB

18 JULY / AUGUST 2017 ARTICLE SPOTLIGHT Agresta, Storms & O’Leary, PC Allied Solutions American Bankers Association Anthem Blue Cross and Blue Shield ATM Solutions The Baker Group BancMac/Community Banc Mortgage Corporation Bank Compensation Consulting Bank Financial Services Group Bankers’ Bank Bingham Greenebaum Doll LLP BITS BKD, LLP BMO Harris Bank BOK Financial Institutional Advisors Bose McKinney & Evans LLP Cinnaire Corporation CliftonLarsonAllen Continuity Crowe Horwath LLP CSI Equias Alliance Executive Benefits Network Farmer Mac Federal Home Loan Bank of Indianapolis Federated Floodplain Consultants Franklin American Mortgage Company Graduate School of Banking IBA Group Insurance Trust IBA Insurance Agency Inc. IBA Service Corporation Infinite Solutions LLC Investors Title Insurance Company K4 Architecture + Design Keefe, Bruyette & Woods The KeyState Companies Kilpatrick Townsend & Stockton LLP Larky Lee & Mason Financial Services Matrix Integration MUFG Union Bank, NA NewGround PCBB ProBank Austin Profit Resources Inc. Renninger & Associates LLC The SHAZAM Network Simplifile SmithAmundsen LLC TIB-The Independent BankersBank Title Center of Indiana LLC Travelers TRUPOINT Partners Virtual Innovation Inc. Voluforms Wilmington Trust NA Works24 Young & Associates Inc. Annual Report First Bank of Berne First Farmers Bank & Trust Company, Converse Branding Campaign Citizens Bank, Mooresville MutualBank, Muncie Deposit Campaign Alliance Bank, Francesville Centier Bank, Merrillville Digital Content First Merchants Bank, Muncie Springs Valley Bank & Trust Company, French Lick Alliance Bank, Francesville Bank of Geneva Bank of Wolcott Bath State Bank Bippus State Bank, Huntington CentreBank, Veedersburg Citizens Bank, Mooresville Commerce Bank, Evansville Community First Bank of Indiana, Kokomo Community State Bank, Royal Center Crossroads Bank, Wabash The Farmers Bank, Frankfort The Farmers State Bank, Brookston Farmers State Bank, LaGrange First Bank Richmond, NA First Farmers Bank & Trust Company, Converse First Federal Savings Bank, Evansville First Federal Savings Bank, Huntington First Federal Savings Bank, Rochester The First National Bank of Odon First Savings Bank, Clarksville First State Bank of Middlebury The Fountain Trust Company, Covington German American, Jasper Greenfield Banking Company Home Bank, Martinsville Hoosier Heartland State Bank, Crawfordsville Jackson County Bank, Seymour Kentland Bank Logansport Savings Bank Mutual Savings Bank, Franklin MutualBank, Muncie The New Washington State Bank, Charlestown North Salem State Bank Ossian State Bank Our Community Bank, Spencer Salin Bank, Indianapolis Security Federal Savings Bank, Logansport Springs Valley Bank & Trust Company, French Lick State Bank of Lizton Wayne Bank and Trust Company, Cambridge City The Baker Group Bankers’ Bank Equias Alliance Federal Home Loan Bank of Indianapolis Infotex The KeyState Companies Loan Campaign Bath State Bank MainSource Bank, Greensburg Public Relations Alliance Bank, Francesville German American, Jasper Series First Federal Savings Bank, Huntington First Merchants Bank, Muncie Single Piece First Savings Bank, Clarksville West End Bank, Richmond BEST OF SHOW West End Bank, Richmond Congratulations to the 2017 Maxi Awards winners, recognized for bank marketing excellence in Indiana in the following areas: The Five Star Member banks listed below have been recognized for their commitment to IBA areas of engagement. The following IBA Diamond Associate Members have demonstrated commitment to the Association in multiple areas of involvement. Diamond Associate Members Five Star Members Maxi Award Winners Mega Sponsors Krieg DeVault LLP Plante Moran Renninger & Associates LLC The SHAZAM Network SmithAmundsen LLC Wilmington Trust NA

Hoosier Banker 19 VIDEO BONUS Mega Video and Online Photos Click the red arrow above for a video of Michael S. Zahn, president and CEO of First Federal Savings Bank, Huntington, as he shares Mega insights. Also access a full gallery of Mega photos by clicking on the dates below in HB Digital online: • Day 1 - May 2, 2017 • Day 2 - May 3, 2017 • Day 3 - May 4, 2017

20 JULY / AUGUST 2017 FLD FOCUS In Indiana, we are incredibly passionate about the future of community banking. In fact, when you Google the phrase, “cultivating young leaders in banking,” the Future Leadership Division of the Indiana Bankers Association is the No. 2 search result. No. 2! To me, that says something about the commitment we’ve made to intentionally develop emerging leaders in banking across the Hoosier state. Through targeted networking, education and leadership development efforts, not only is Indiana home to one of the strongest state bank trade associations, we are quickly becoming a leader in developing young bankers, as well. Today there are 180 members of the FLD representing 61 different banks and associations in Indiana. This reflects a 130 percent increase in the number of members in just over two years. Still, there is ample opportunity to expand engagement, as only 40 percent of the state’s banks have members involved with the FLD. The recent IBA Mega Conference showcased the second annual FLD networking reception. Graciously sponsored by Krieg DeVault LLP, to say that this event was a success would be an understatement. In just one year, attendance for this reception went from approximately 35 attendees to around 100. Bankers and associate members from multiple generations gathered to share stories, laughter, current events, obstacles and wisdom. It was a great opportunity to share more about the FLD mission and to answer questions of prospective members. My favorite question addressed a longtime misnomer about the FLD: “Is the FLD only for emerging bankers who are currently in or who are successors for senior level management positions?” The answer? Absolutely not. The FLD is for emerging leaders in any position throughout their organization. In fact, today’s membership roster consists of representatives from finance, legal, accounting, compliance, credit, IT, operations, human resources and sales. While it’s not uncommon for FLD members to consistently keep in touch with one another through phone calls, emails and social media, on an annual basis, we connect through the following events: • FLD Day at the Statehouse (March) • Mega Conference (May) • IBA Annual Convention (September) • FLD Annual Conference (November) Ultimately, our goal is to connect and develop emerging leaders at all levels to help ensure that Indiana’s community banks are future-ready. A tall order? Yes. But an essential one if we’re going to maintain our top Google rating and support sustainable, relevant and thriving institutions. HB No. 2: Google it! VIDEO BONUS Kristin Marcuccilli FLD President IBA Future Leadership Division 'LMIJ 3TIVEXMRK 3JƤGIV STAR Bank, Fort Wayne Article author Watch Kristin Marcuccilli, GLMIJ STIVEXMRK SJƤGIV SJ STAR Bank, Fort Wayne, share the excitement of the IBA Future Leadership Division. Marcuccilli serves the FLD as president and the IBA as a member of the board of directors. Click the red arrow to view in HB Digital online. HB Digital: Click to view photos from the 2017 annual FLD networking reception at Mega.

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