Karen Gregerson Community champion HB HOOSIER BANKER MAGAZINE indianabankers.org PLUS! Legislative Day 2019 MARCH / APRIL 2019
Honor the shining stars of banking in your community by nominating the leaders, past and present, who have helped lead your institution to excellence. For more information about the annual IBA Leaders in Banking Excellence awards and nomination process, please contact Rod Lasley at the IBA, 317-387-9380, rlasley@indianabankers.org. This prestigious distinction, IBA’s highest honor, celebrates exceptional bankers throughout Indiana’s history who have left their mark in Banking Community Service Civic Involvement Please consider the current and past presidents, CEOs, directors and others who have played an integral part in the success of your institution at the local level, as well as in the Indiana banking community. Now through April 30, 2019, the Indiana Bankers Association is accepting nominations for the 2019 CLASS of the IBA Leaders in Banking Excellence.
4 MARCH / APRIL 2019 DIRECTORS & STAFF 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: n Maintain the highest ethics, integrity and respect for others; n Serve with professionalism, innovation and resourcefulness; n Instill passion, positive attitude and enthusiasm; n Remain mindful that the success of the IBA is judged by the success of its members. 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. Contact Us • Email IBA staff using first name initial, plus last name, plus “@indianabankers.org” – example: jdoe@indianabankers.org • Email Hoosier Banker materials to: HB@indianabankers.org IBA BOARD OF DIRECTORS IBA Officers Chairman......................................... Andrew J. Briggs, Farmers & Merchants State Bank, Archbold, Ohio First Vice Chairman ...............................................Lucas White, The Fountain Trust Company, Covington Second Vice Chairman...................................... Michael S. Zahn, First Federal Savings Bank, Huntington Immediate Past Chairman ...............................................Clay W. Ewing, German American Bank, Jasper President and CEO...................................... Amber R. Van Til, Indiana Bankers Association, Indianapolis 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 ...........................................................Kirby D. Drey, Kentland Bank Non-Indiana Headquartered Bank Director ........................... Tim Massey, BMO Harris Bank, Indianapolis Northeast Region Directors Jeffrey W. Gump .............................................................................Farmers and Merchants Bank, Laotto Garry D. Kleer ..........................................................................................................First Bank Richmond Michael C. Rechin .....................................................................................First Merchants Bank, Muncie 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 Gregory Inman .......................................................................Scottsburg Building and Loan Association John M. Kennedy .......................................................................................Greenfield Banking Company Karen B. Woods ....................................................................................... First Financial Bank, Cincinnati Southwest Region Directors Matthew W. Howrey ............................................................................................North Salem State Bank Jamie R. Shinabarger ........................................................Springs Valley Bank & Trust Company, Jasper Luke J. Yaeger .............................................................................................Commerce Bank, Evansville FUTURE LEADERSHIP DIVISION ADVISORY BOARD Kirby D. Drey, President .....................................................................................................Kentland Bank Melodie K. Yarnell, Vice President ..........................................................Jackson County Bank, Seymour Greg Barnes Jr. ...................................................................................................STAR Bank, Fort Wayne Emily Boardman .............................................................................................Crossroads Bank, Wabash Scott Carr ..................................................................................................First Savings Bank, Clarksville Jessica Carroll ................................................................ The New Washington State Bank, Charlestown Michael J. Clampitt ............................................................................................North Salem State Bank Jason L. Ernst ................................................................................ First Financial Bank, NA, Terre Haute Brock C. Goggins ...................................................................................German American Bank, Jasper Ryan Hart ...........................................................................................................Lake City Bank, Warsaw Zach Hockersmith .............................................................Hoosier Heartland State Bank, Crawfordsville J. Daniel Maddox ...................................................................................Citizens State Bank, New Castle Jon-Myckle D. Price ..............................................................Security Federal Savings Bank, Logansport Crystal Taylor-Baker ...................................................................................Old National Bank, Evansville Billy Winter ...............................................................................................Bippus State Bank, Huntington 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 - Government Relations...........................................................................Eric J. Augustus 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 - Member Engagement ................................................................... Josh Myers Member Engagement Specialist..........................................................................................Emily Brooks Government Relations Coordinator.................................................................................... Michelle Long Events & Products/Services Assistant...................................................................................Susan Clark Education Meeting Coordinator..........................................................................................Marcy Borden Education Meeting Coordinator.................................................................................. Elizabeth DeHaven Staff Accountant ..................................................................................................................Timothy Fry Technology Manager ............................................................................................................ Tracy Kubly
Hoosier Banker 5 CONTENTS Vol. 103 No. 2 8425 Woodfield Crossing Blvd., Suite 155E Indianapolis IN 46240-7321 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 first day of the month preceding publication, and submit artwork by the fifth 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. About Hoosier Banker: Award-winning Hoosier Banker magazine is the flagship publication of the Indiana Bankers Association. Its subscriber base includes all banks and thrifts headquartered in Indiana, IBA-member banks headquartered out-of-state, and IBA associate members. HOOSIER BANKER MAGAZINE indianabankers.org COVER STORY 10 Karen Gregerson: Community Champion ARTICLE SPOTLIGHT 16 Legislative Day 2019 Dax Denton and Eric J. Augustus, IBA FEATURES 6 Vantage Viewpoint Amber R. Van Til, IBA 7 Chairman’s Report Andrew J. Briggs, Farmers & Merchants State Bank 8 Board Review Luke J. Yaeger, Commerce Bank, Evansville 9 IBA Calendar of Events 30 State Deposits in Indiana 46 Leveraging Customer Data Samantha Vance, Main Street Inc. 47 Landmark Forfeiture Ruling Timothy E. DeLaney and Nathan T. Danielson, Bose McKinney & Evans LLP INDIANA BANK & THRIFT STOCK UPDATE 20 Stock Analysis Michael A. Renninger, Renninger & Associates LLC FLD FOCUS 22 Future Leaders Josh Myers, IBA PSP SHOWCASE 24 Community-Focused Design Jeff Klump, K4 Architecture + Design PRODUCTS & SERVICES PROFILE 26 Tired of Being ‘Just a Number’? Rod Lasley, IBA HUMAN RESOURCES 28 Flu Season Debra A. Mastrian, SmithAmundsen LLC COMPLIANCE CONNECTION 32 Permissible Fees and Charges Brett J. Ashton, Krieg DeVault LLP DIRECTORS / SENIOR MANAGEMENT 34 Regulatory Priorities Dave Sheller, The Baker Group 36 Survey on 2019 Bank Strategies Steve DuPerrieu, CSI FINANCIAL MANAGEMENT 38 CECL Compliance Data John Dalton, Fiserv DEPARTMENTS 21 From the Board Room 33 IBA Employees of the Month 33 In Memory of 39 Taking It Easy 40 Honorable Mentions 42 Associate Members’ Corner 43 Banking Center News 43 Anniversary Milestones 44 Banking on Community 48 Bankers on the Move 54 Advertisers Index
6 MARCH / APRIL 2019 legislative session, spending hours at the Statehouse, poring over bills and legislative updates, and talking with multiple constituencies to make sure your voice is heard. We very much appreciate your grassroots support of their efforts. On the educational front, the IBA continues as one of the most active state associations in the nation with regard to opportunities for members to learn and advance. Additionally, we currently are gearing up for the Mega Conference, and we look forward to seeing you there. Finally, your IBA team remains mindful of our responsibility to steward expenses wisely. Kudos to EVP Paul Freeman, who diligently tracks expenses and manages to keep budget variances with a range of 1 percent, year after year. While I’d be proud to report that news to any audience, I’m especially happy to share it with the Indiana banking community. As ever, please continue to let us know how we can best serve you, and thank you for all of your support. HB Amber R. Van Til President and CEO Indiana Bankers Association avantil@indianabankers.org @grbanker VANTAGE VIEWPOINT Mega Conference May 13-15 The largest, most comprehensive state banking event in the nation features 48 educational tracks. BSA/AML Compliance School June 19-20 Learn from regulators from both state and federal agencies, and stay abreast of compliance responsibility. FLD Leadership Conference Aug. 27-28 Emerging bank leaders come together to build the future through leadership development and networking. Don’t Miss Out! We’re still in the first quarter of the year, but thanks to a supportive board and membership, we already have much progress to share with you. Before I proceed, though, I’d like to remind you that the deadline for the 2019 Leaders in Banking Excellence awards is fast approaching on April 30. This award, IBA’s highest honor, recognizes exceptional bank leaders, both past and present. Please see page 3 for details. This award helps to “Tell the Story” of banking, one of the pillars of the IBA strategic plan. On a related note, we have successfully wrapped up the nomination process for the inaugural IBA Commitment to Community Award, based on bank community service. This new award gives the IBA the chance to showcase the exceptional level of service to communities that banks provide. Thank you to those banks that took the time to nominate their community projects. We look forward to announcing the winner at the Mega Conference in May and presenting a video of the winning project. We also will explore potential filming and promotion of non-winning entries, to further tell the story of banking. There is additional progress at the IBA, thanks to our member engagement department, created just last summer. Ably led by Josh Myers and assisted by Emily Brooks, this busy team is committed to creating closer connections between and among IBA-member bankers. If you active are on social media, you will have noticed a jump in IBA engagement, especially in sharing the good news stories of member banks. For those who take part in IBA Google Groups, you’ll soon be seeing increased opportunities for involvement, helping to deepen your connections with other IBA members. And IBA E-News now features “Banker of the Week,” spotlighting member bankers who visit the IBA for peer groups, forums, seminars and schools. Our member engagement team is also eager and ready to help you tell your story through video. Please keep the IBA in mind if your bank has a community service project that you would like to translate to video. Our team can do the filming and editing, and then promote the video through IBA social media. An example of an IBA-created video is “Reading Champions,” shown on page 15. In fact, throughout this issue of HB Digital, you’ll find links to videos that either highlight community service, promote financial literacy or showcase the value of banking as a career. Going forward, we’ll be creating many more videos of emerging bank leaders who promote banking as a career. These videos dovetail with some of the projects that Chairman Briggs addresses on the facing page, all in support of the “Next-Gen Bankers” pillar of IBA’s strategic plan. The projects above represent only a portion of IBA efforts on your behalf. Right now, your Government Relations Team is deep into the Editor’s note: To view Hoosier Banker videos, access HB Digital online. Contact Laura Wilson at lwilson@indianabankers.org, 317-333-7146, to start your free member subscription.
Hoosier Banker 7 internships as a goal for the IBA to help address the “Next-Gen Bankers” pillar of the current strategic plan. Clay also spearheaded the ambitious goal of creating a banking major in an Indiana college or university, and that goal is showing impressive progress. The build is slow but steady, since this goal relies on parties outside of the banking community. Many productive conversations have taken place with academic leaders, who understand the value of offering a major that can help graduates enter into fulfilling careers. Thank you to all of the IBA-member bank leaders who have been supportive of this long-term vision. Bringing the best and brightest of new talent into banking will pave the way for the future of our industry. With the group effort of IBA-member banks and guidance from our board of directors, we will be ready to face the future when it comes. HB NOTABLE QUOTES Bank Community Service on Twitter Citizens State Bank • @CSB_Indiana • Feb. 2 If you’re a CSB client who’ll be attending an Indiana college or university, learn more about our $5,000 scholarship. http://ow.ly/ bEUf30nle3J We’re excited to contribute to the education of our future leaders! Alliance Bank • @AllianceBank_IN • Jan. 11 @AllianceBank_IN went #casualforacause in the 4th Qtr to support Courage Rock Stable and the horse therapy they provide for veterans and military families. Monticello Office Manager Melanie McGuin presented the check for $1,480 to owner Kim and Marley (the horse). #communitybank Crossroads Bank • @CrossroadsBank • Dec. 27 In lieu of a white elephant gift exchange this year, our #ColumbiaCity Branch adopted two families & purchased gifts for them! #SeasonOfGiving First Financial Bank • @BankAtFirst • Dec. 14 Through the generosity of our associates and clients in #Indy we donated more than books to the Edna Martin Christian Center. Thank you for giving the gift of reading. #bankatfirst #givefirst Merchants Bank of Indiana • @MerchantsBankIN • Dec. 12 Members of our team served meals at the @StVincent House, which serves as a home away from home for families (especially those with financial need) who live more than 35 miles from the hospital. We love giving back! Follow IBA Twitter @indianabankers Andrew J. Briggs Chairman Indiana Bankers Association First Senior Vice President for Business Development Farmers & Merchants State Bank, Archbold, Ohio CHAIRMAN’S REPORT Like objects in a car mirror that are closer than they appear, the future is coming sooner than we expect. That’s why the Indiana Bankers Association is all about the future. I have good news to report about how the IBA is preparing for the future, but first, here’s a quick note about a recent past event – the IBA Legislative Briefing and Reception, held Feb. 4. Attendance was high, with nearly 250 IBA-member bankers, associate members and Indiana lawmakers coming together for this annual meet-and-greet. Attendees of the briefing were treated to a legislative review from our capable Government Relations Team, who detailed more than a dozen bills that pertain to banking in this year’s General Assembly. Also at the briefing, we heard from “Indiana Week in Review” panelists, who offered deep insights and entertaining banter for an informative look at Indiana politics. After the briefing, IBA members and elected officials joined together in a relaxed reception setting. I have always enjoyed this opportunity to meet face-to-face with legislators, whether for the first time or as renewed acquaintances, and I highly recommend that all bank leaders prioritize this annual event. I also recommend turning your attention to the IBA Future Leadership Division. This vibrant group is key to the Association’s focus on the future. For more information about the value of the Future Leadership Division, please see the “FLD Focus” article starting on page 22. I echo the benefits outlined in the article, and would add that the advantages of FLD membership go far beyond individual bankers to the banking community as a whole. Also on the topic of the future is the value of internships. One of the best ways for a person to learn about an industry is through handson internship opportunities. While many IBA-member banks already have strong internship programs in place, for other banks, programming has been a struggle. For this reason the IBA has created the Indiana Banking Internship Program, designed to introduce talent to the Indiana banking community. Through this program, the IBA is the liaison between member banks and the colleges and universities of Indiana. The inaugural wave of student participants begin their internships this summer, and the program is off to a strong start. About 20 promising students have applied, with nearly as many IBA banks taking part in this program. As of this writing, the IBA is working on the logistics of pairing interns with banks for mutually beneficial work experiences. Thank you to all participating banks, and thank you to my IBA chairman predecessor, Clay Ewing of German American Bank, who wisely set
8 MARCH / APRIL 2019 If there is one word that can describe community banking, it probably would be “dynamic.” As with any small business, job No. 1 for a community banker is “duties as may be assigned from time to time.” That may include taking out the trash or helping an elderly client park a vehicle. Additionally, an important part of my job as president and CEO of Commerce Bank is to ensure a mutual understanding among all levels of our team. Every rung of our constituency groups – from shareholders, to board members, to associates, to the community as a whole – needs to hear consistent messaging and understand where we are on the roadmap. My entry into banking came 17 years ago, following small business experience while studying at Austin Peay State University in Tennessee. After some work during college framing houses and other construction duties, I had the chance to co-own a landscaping business with a fraternity brother. What we learned as small business owners was that we could differentiate ourselves through simple steps. We made it a point to be cheerful, to communicate clearly, and to leave each client’s yard spotless. These small things helped make us stand out, and I’ve always remembered that lesson. Later, as I was preparing to graduate from college, some other fraternity brothers who had started a local bank – which later sold to Old National Bank – suggested that I go into commercial banking. So I entered into banking, wanting to learn about other businesses and the technical side of putting a deal together. I was looking for an opportunity to be entrepreneurial, and that opportunity came about when Tom Austerman, now chairman of the board of Commerce Bank, called me to say he was starting a bank in Evansville. That’s the happenstance of how I found a home in banking. I view this industry as a service calling, which is very important to me. My father, grandfather and uncle were all in the U.S. Army and highly service-driven. I also am aware of and appreciate the sacrifice of current servicemen and women, who lace up their boots every day for the benefit of others. Frankly, when I was first deciding on a career, I felt a certain level of inferiority relative to those serving in the military. It wasn’t until I talked with a mentor, who was in the banking business, that I began to look at the industry through a different lens. I refocused my perspective and came to see that banking plays an important part of our country’s success. It provides the tools for folks to realize their dreams of sending their kids to college, or starting a business from scratch, or living out their golden years in happy retirement. One of the things that I enjoy about banking is that it is a people business with a strong community focus. The notion that a rising tide lifts all ships may be more appropriate to banking than any other occupation. We have a responsibility to be involved in our communities. At Commerce Bank, we’re fortunate that most of our associates find ways to get involved in community endeavors that tug at their heartstrings. For me, I’ve enjoyed my involvement with a variety of organizations, including the Southwest Indiana Chamber of Commerce, Rotary Club of Evansville, Junior Achievement of Southwest Indiana, and Tudela Futbol Club in Evansville. I also am involved with the Indiana Bankers Association, including its Future Leadership Division. My interest with the IBA stems primarily from the advocacy perspective, because public policy has always been intriguing to me. The IBA has been a helpful conduit, exposing me and others to priorities that are elevating around us, be they at the local, state or federal levels. The business of banking is all about relationships, and the IBA has given me the opportunity to get to know policymakers and banking peers who share an interest in advocacy. Another area of community involvement is showing the next generation what it’s like to be in a professional career setting. There is a bit of a mystique toward what we as bankers do all day, every day, so my associates and I go out into the community to talk with young people. We challenge them to think about reaching for a higher calling, over and above earning a paycheck. Banking is a field where you can do both – earn a living and take care of your community. In addition to finding my calling through banking, I am blessed with a wonderful home life. My wife Emily and I are parents to two girls, ages 9 and 11, who demonstrate unique talents of their own. Our oldest daughter is a ballet dancer, drawn to creativity and the arts, and our youngest is an avid soccer player … who also swings a golf club pretty well! Emily, too, is very active in the community, especially through the YMCA. She has a background in retail and some banking, but after the girls came along, she reset her priorities and has turned her talents to professional photography. There’s rarely a dull moment in our household, and the same holds true for banking. Thank you for the opportunity to serve on the IBA board of directors, and I also would like to thank the board of Commerce Bank for their support. I look forward to learning and growing from this new experience with the IBA, and getting to know more of my banking peers across Indiana. HB Luke J. Yaeger Southwest Region Director Indiana Bankers Association President and CEO Commerce Bank, Evansville BOARD REVIEW The Indiana Bankers Association has created a communications toolkit to assist member banks in sharing good news stories with media outlets. Additionally, the toolkit provides a quick-link webform for submitting updates to Hoosier Banker, such as bank hires/promotions, branch openings, community service and more. • View the toolkit at: indianabankers.org/communications-toolkit • Access the webform at: indianabankers.org/submit-news IBA Communications Toolkit Available
Hoosier Banker 9 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 Business Financial Statement Analysis and Cash Flow Analysis Bootcamp March 19-20 • IBA Center Underwriting Commercial Construction Loans March 21 • IBA Center Human Resource Directors Forum March 21 • IBA Center Compliance Roundtable March 28 • IBA Center Preparing for Your IT Exam April 9 • IBA Center Vendor Management April 10 • IBA Center Are You Prepared? Security, Safety and Service Coming Together April 10 • The Sherman House • Batesville April 11 • The Landmark Conference Centre • Fort Wayne April 15 • Huntingburg Event Center April 16 • Hyatt Place Bloomington April 17 • DoubleTree by Hilton Lafayette East Consumer Lending School April 16-17 • IBA Center Power Prospecting Strategies April 11 • IBA Center TRID Essentials April 22 • IBA Center Branch Management Series: Session 2 - Leading, Developing and Engaging the Team April 23 • IBA Center Essentials of Banking: Session 1 - Banking 101 April 24 • IBA Center Universal Banker Program April 29-30 • IBA Center BSA Officer Forum May 1 • IBA Center Senior Retail Banking Forum May 2 • IBA Center Cybersecurity Seminar May 3 • IBA Center Community Bankers for Compliance - Session 2 May 7 • IBA Center May 8 • IBA Center May 9 • The Landmark Centre • Fort Wayne Mega Conference May 13-15 • Indiana Convention Center • Indianapolis Regulation Z University May 22-23 • IBA Center Commercial Lending School June 3-7 • IBA Center Workshop for Loan Assistants and Loan Processors June 6 • IBA Center Risk Management Officer Forum June 11 • IBA Center Senior Lender Forum June 12 • IBA Center • Group 1 June 13 • IBA Center • Group 2 Essentials of Banking: Session 2 - Business Operations and Management June 18 • IBA Center BSA/AML Compliance School June 19-20 • IBA Center CFO Forum June 20 • IBA Center • Group 1 June 21 • IBA Center • Group 2 Marketing Directors Forum June 25 • IBA Center IT & Operations Officer Forum June 26 • IBA Center • Group 1 June 27 • IBA Center • Group 2 Auditing TRID July 9-10 • IBA Center CRE Cash Flow July 10 • IBA Center CRE Appraisals July 11 • IBA Center Human Resources Directors Forum July 11 • IBA Center Training the Credit Analyst Aug. 1-2 • IBA Center Community Bankers for Compliance - Session 3 Aug. 6 • IBA Center Aug. 7 • IBA Center Aug. 8 • The Landmark Centre • Fort Wayne Essentials of Banking: Session 3 - Lending, Bank Investments and Bank Performance Aug. 15 • IBA Center Branch Management Series: Session 3, Growing the Retail Branch Aug. 20 • IBA Center Advanced Branch Management Aug. 21 • IBA Center Compliance for Loan Processors Aug. 21 • IBA Center FLD Leadership Conference Aug. 27-28 • Hyatt Regency Indianapolis Advanced Agricultural Credit Conference Sept. 4-5 • Lafayette Senior Retail Banking Officer Forum Sept. 11 • IBA Center BSA Officer Forum Sept. 12 • IBA Center Annual Convention Sept. 15-17 • French Lick Resort Mortgage Lending School Sept. 18-20 • IBA Center Advanced Credit Analyst School Sept. 19-20 • IBA Center CBC Compliance School - Lending School Sept. 24-26 • IBA Center BSA Bootcamp Oct. 1-2 • IBA Center Banking Essentials Session 4 Oct. 3 • IBA Center Risk Management Officer Forum Oct. 8 • IBA Center Lenders Comprehensive Guide to Mortgage Lending Oct. 8-9 • IBA Center Senior Lender Forum Oct. 9 • IBA Center • Group 1 Oct. 10 • IBA Center • Group 2 Annual Washington Trip Oct. 20-22 • Washington, DC
10 MARCH / APRIL 2019 COVER STORY Karen Gregerson Community Champion When Karen F. Gregerson joined The Farmers Bank, Frankfort, as president and CEO in 2016, she brought to the position years of related experience, including current service on the board of directors of the Federal Home Loan Bank of Indianapolis (FHLBI). Previously, she had been with STAR Bank, Fort Wayne, for 34 years, serving in roles including audit and tax manager, controller, chief financial officer and president of STAR Trust Company. Regarding service on the FHLBI board, Gregerson was the first female member director of the organization. “I feel very honored to have been elected back in 2013,” she recalls. “I have a lot of people in the banking industry to thank for helping make that happen.” Additional community outreach includes board service with the Girl Scouts of America, St. Martin de Porres Community Center, Habitat for Humanity, Matthew 25 Health and Dental Clinic (for uninsured Allen County residents), and Junior Achievement. Additionally, Gregerson has volunteered for the United Way of Allen County and is a past president of the school board of Bishop Luers High School, where she started the Academic Super Bowl program. She currently is the United Way campaign chair for Clinton County and a board member for the Indiana Statewide Certified Development Corporation. Gregerson also chaired last year’s Indiana Bankers Association Banking on Women Conference committee, and in 2016 she was honored as an Outstanding Woman in Banking by Northwestern Financial Review magazine. She earned a bachelor’s degree from Ball State University, a master’s degree from Indiana Tech, and is a graduate of the 2002 Leadership Fort Wayne class. A certified public accountant, Gregerson is a member of the Indiana CPA Society and Financial Executives International. Her first foray into business happened during high school years, when Gregerson was involved in Junior Achievement. At the time, JA was an evening program through which students formed companies. “Through that I got to experience what it’s like to be in business, which I enjoyed,” says Gregerson. Hoosier Banker interviewed Karen Gregerson about her leadership in banking. What is your role as president and CEO of The Farmers Bank? “My role is to act as the Chief Encouragement Officer to enable and motivate everybody to fulfill our vision, mission and strategic plan. For us the strategic plan process begins when our board of directors and
Hoosier Banker 11 management determine three-year and one-year goals. Then, as a team we develop strategies on how we’re going to accomplish those goals. “We involve our entire staff in developing initiatives and actions. It’s exciting to watch everybody give input, and the process leads to greater buy-in. “Of course, one of our aims is to continually improve the customer experience. Getting feedback from staff is important, because they’re the ones spending face-toface time with our customers. “Once the roadmap is complete, I just need to encourage and motivate everybody towards those goals. My job is the easy part.” What attracted you to banking and accounting as a profession? “I planned to go to school to be a social worker, but my dad encouraged me to also explore business. So I took some business classes, including accounting, and found that it came easily to me. I also liked that I could do my homework while listening to music. “What I really enjoyed, though, was not so much the math part of accounting, but the problem-solving. I knew I wanted to be a CPA, but I didn’t necessarily want to work in public accounting. “When I graduated from college, unemployment was in the double digits, even in my hometown of PHOTO CAPTION: Karen F. Gregerson serves as president and CEO of The Farmers Bank, Frankfort.
12 MARCH / APRIL 2019 a business lending perspective. I believe community banks provide a more personal touch, because we’re headquartered in or near the same town that our customers live and work in. “We are deeply invested in our communities. As communities thrive, so will our banks, so we have many of the same motivations.” Your bank is featured in an IBA ‘Reading Champions’ video. How did the partnership with the community schools of Frankfort develop? “In 2014, our local school received a failing grade in accountability from the Indiana Department of Education. Karen Miller,* my predecessor, and Paul Cox, who was our chief credit officer before he retired, went to the superintendent and asked, ‘What can we do to help?’ “It was determined that what was needed for a successful school was to grow better readers. So the team came up with a new program called Reading Champions, through which teachers identify students at risk of not passing the IREAD-3 assessment. It’s important that third-graders pass that test, because the state requires it in order for them to go on to fourth grade. “Currently, 18 of The Farmers Bank staff go to our local elementary school every Tuesday morning to read with their thirdgrade buddies – their ‘Reading Champions.’ We have another 16 employees who are substitutes, so roughly 25 to 30 percent of our staff participate in this program. “It’s really making a difference. Last year, 100 percent of the Reading Champions students passed the IREAD-3 assessment, and one student, who had been a struggling reader, got a perfect score. “Recently the school corporation has started another Reading Champions program at a different school with help from retirees and volunteers from Kiwanis and Rotary. We’re excited that our involvement has spawned growth for the program. Continued on page 14. Symbolic items on display in Karen Gregerson’s office represent the various constituencies of The Farmers Bank, Frankfort. Marion, so there was not an abundance of job openings. But I did find a tremendous opportunity when I was hired as audit manager at NIFSCO, Northern Indiana Financial Services Company. The company was a subsidiary of what is now STAR Bank, so it was providential that I later went into banking.” How do you define the role of community banks? “Community banks play a critical role in a local economy, by lending and helping businesses grow. Community banks can frequently be more responsive and agile to meeting those needs of its consumers and business customers, because we’re a part of the community, we know the community, and we understand their needs. “A community bank takes pride in being a part of the community in every aspect possible – whether it be our time, talent or treasure – as well as our investment from A $2 bill lodged in a staff photo – a souvenir from the 2018 IBA Banking on Women Conference – serves as inspiration to be unique and memorable. * Karen I. Miller served as president and CEO of The Farmers Bank from 2006 to 2015.
Annual membership includes: • Compliance Coaching • Compliance Products and Policies • Automatic Updates to All Compliance Policies • Weekly Compliance Blog • Online Compliance Forum • Compliance Review/Consulting/Audit Fee Discounts • Regulatory Compliance Training Manuals • Optional Advertising Review Services For more information and pricing, contact Karen Clower at 1.800.525.9775 or kclower@younginc.com. HMDA Privacy Reg Z BSA Reg CC Virtual Compliance Consultant (VCC) Program 40 YEARS 1978 - 2018 Guiding Community Banks Along the Road of Regulatory Compliance Young & Associates, Inc. Consultants to the Financial Industry
14 MARCH / APRIL 2019 WHERE FUTURE PLANS BECOME REAL TIME REALITIES. The goals and challenges of financial institutions like yours are unique. Associated Bank understands that. Our team of highly experienced banking specialists will offer you tailored solutions, uncover earnings potential and move you forward. Visit AssociatedBank.com/Commercial or contact us to learn more. Bradley Clark • Senior Relationship Manager 614-681-7213 • Bradley.Clark@AssociatedBank.com Loan products are offered by Associated Bank, N.A., and are subject to credit approval and involve interest and other costs. Please ask about details on fees and terms and conditions of these products. Property insurance and flood insurance, if applicable, will be required on collateral. Associated Bank, N.A. Member FDIC. (2/19) 13572 delivered to food banks, and we have departments that adopt families and charities during Christmastime. “These are all grassroots-driven projects and show how big our employees’ hearts are. One of our core values is, ‘Everyone you touch knows you care.’ Our employees live that out, each and every day.” What would you say to encourage students to consider banking as a career? “First of all, I would say that banking is a very rewarding career, and that it’s not just for people who are numbers-oriented. People with all kinds of talents are needed at a bank, whether it be creative people, numbers people or ‘people-people.’ Whatever your talent is, chances are we could use that. “I’d also say that banking serves a vital role in society, and bank employees are doing something that is meaningful. When you devote so much time to work, you want it to be impactful, and working at a bank allows you to do that. “I love hearing our customers’ stories. “Our bank volunteers also feel they get just as much out of the program as the students because they know they are making a difference.” What are some other community projects that you’re particularly proud of? “Two years ago we started a Farmers Bank Cares Day Program, and 90 percent of our employees participate. Through this program, staff volunteer to do community projects on Columbus Day, a day that the bank is closed. They could take that day off, but instead they choose to go out into the communities working side by side with fellow staff. “What I’m most proud of is that our employees orchestrate many projects on their own, without direction from management or the bank. We’ve had several projects in every one of our communities – too many to name them all – but for instance one employee orchestrated the bank’s involvement in Operation Christmas Child, which provides shoeboxes of supplies for needy children. “We also have a couple of branches that collect fresh produce in the summer to be Karen Gregerson (left) works closely with Charlotte Cunningham, executive assistant at The Farmers Bank, Frankfort.
Hoosier Banker 15 a bigger crowd, so it keeps bringing our children back. “Roy and I like to travel, and our whole family also has the travel bug. For our 35th wedding anniversary, Roy and I went to France to the Champagne and Burgundy regions. Last year he and I went with our daughter and older son to South Africa for an animal-watching safari. “The safari wasn’t even on my top 10 list of things I wanted to do, but it was awesome. We thought of it as a once-in-a-lifetime trip, but we all said we’d do it again.” HB Many of them would not be in business had it not been for the bank that made them the loan to enable them get started, or gave them the loan that helped them expand. Also in banking, you get to develop lifelong friendships through the people you work with, other people in the industry and your customers. “Young people today want to make a difference and want their work to be meaningful. They will be a making a positive impact on the world because of that.” What advice would you offer to young bankers at the start of their careers? “Definitely develop your technical skills, but also develop those soft skills. Emotional intelligence, empathy, communication and teamwork are absolutely critical for success and will determine whether you get promoted and can advance your career. “I would also say that the ability to adapt and reinvent yourself is important. The banking industry, like all industries, is changing at warp speed. We can’t get too comfortable with where we are, because tomorrow it’s going to look different. So being adaptable and learning continually will be important if you want to be successful in banking.” Please tell a bit about your homelife and pastimes. “I am blessed to be married to Roy, my high school sweetheart. We’ve been married 37 years, and my husband is a tremendous support for me. “Roy is a sales manager, selling machines that make paper plates for a thirdgeneration, family-owned business. It isn’t his family, but he’s been there going on 40 years. “We have three adult children. Ethan is a CPA for RSM, and he’s also in the Army Reserve. He and his wife Casey live in Chicago. “Our daughter Emily is a cardiac ICU nurse in Pittsburgh at the University of Pittsburgh Medical Center. And our older son is Father Royce Gregerson, a Roman Catholic priest in the Fort Wayne/South Bend diocese. Active with the Indiana Bankers Association, Karen Gregerson is a frequent visitor to IBA headquarters. VIDEO BONUS “Reading Champions” tells the story of volunteers from The Farmers Bank, Frankfort, who work with local thirdgraders to help them become champions of reading. Click on the video icon in HB Digital to view, or visit: indianabankers.org/ commitment-community “What I’m most proud of with our children is they all chose careers of helping others. I tell people who have younger children that it is such a good feeling when your children are able to get into careers that they love. “For family activities, we are all foodies. We love preparing meals together and, of course, eating them. We also love playing euchre and any other card and board games. “Our favorite place to gather is at our lake house in LaGrange County. It’s a little more central for everybody and can accommodate
ARTICLE SPOTLIGHT Legislative Day 2019 Annual grassroots event delivers again
Hoosier Banker 17 On Feb. 4, more than 160 members and associate members of the Indiana Bankers Association, plus 80 legislators, came together for IBA Legislative Day events at the Indianapolis Hyatt Regency. This annual gathering provides an opportunity for IBA members to network with lawmakers and discuss current legislative topics. Events began in the morning with a meeting of the IBA board of directors, followed by a luncheon, sponsored by The KeyState Companies, that included members of the IBA Government Relations Committee. Director Tom Fite of the Indiana Department of Financial Institutions was guest speaker at the luncheon and shared with the group an industry update, along with a report from his department. In the afternoon, the GR Committee met with the IBA Government Relations Team for an in-depth review of a comprehensive list of bills that could impact banking. The meeting provides for productive two-way conversation, with members of the committee encouraged to provide feedback to the IBA GR Team. The Legislative Briefing began at 4 p.m., with more than 160 bankers and associate members present. The IBA GR Team provided details regarding several pieces of legislation: • SB 36 - Elder Abuse Registry • HB 1055 - Judgment Liens • HB 1212 - Notice of Sheriff’s Sale of Foreclosed Property • HB 1136 - Study of Changes to Uniform Consumer Credit Code • SB 104 - Small Loan Finance Charges • HB 1447 - Financial Institutions and Consumer Credit • HB 1123 - Telephone Solicitation • SB 563 - Economic Development • HB 1495 - Land Contracts • HB 1625 - Housing Cost Information • SB 265 - Various Trust Matters • SB 516 - Regulation of Hemp • HB 1436 - Duties of County Auditors • HB 1347 - Municipally Owned Utilities Following the GR Team discussion was a presentation of awards by IBA Chairman Andrew Briggs to honor those banks that are strong supporters of Indiana BANKPAC. A total of 24 banks were recognized with the BANKPAC 200% Club award. Chairman Briggs also handed out awards for Most Dollars Raised and Highest Percentage of Fair Share Raised. While in past years the briefing consisted of hearing solely from the IBA GR Team, this year featured a twist. Following the BANKPAC awards we heard from “Indiana Week in Review” panelists, who presented the group with a comprehensive discussion of issues being considered at the Statehouse that reach beyond the scope of the financial services industry. Issues ranging from sports gambling, to the potential move of an Indiana casino, to what might come of a biased crimes bill were just a few of the topics covered. The panel provided the audience with a closer look at the politics driving legislative efforts at the Statehouse … with generous sprinklings of political banter. The last item for the day was the Legislative Reception. The reception gave IBA members and associate members the chance to visit with their Indiana representatives, senators and other elected officials to share information about banking-related topics. HB Dax Denton Senior Vice PresidentGovernment Relations Indiana Bankers Association ddenton@indianabankers.org @ibagovrelations Eric J. Augustus Vice President-Government Relations Indiana Bankers Association eaugustus@indianabankers.org
18 MARCH / APRIL 2019 L EAGRI TS ILCALTEI VSEP OD TA YL I G AH LT L E R Y
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20 MARCH / APRIL 2019 Michael A. Renninger Principal Renninger & Associates LLC mrenninger@ renningerllc.com Renninger & Associates LLC is a Diamond Associate Member of the Indiana Bankers Association. Indiana Statistics Click on the hand icon in HB Digital to access statistics through Jan. 31, 2019; Dec. 31, 2018; and Nov. 30, 2018 – or visit: indianabankers.org/bank-thrift-stock-update The Size, Pricing and Profitability Reports for Indiana Banks and Thrifts as of Jan. 31, 2019, Dec. 31, 2018, and Nov. 30, 2018, are available by clicking on the icon on this page or by visiting the designated website location. These Reports present the stock price changes for the 33 Indiana banks and thrifts that are traded on the NASDAQ and Over-The-Counter (OTC) markets over the prior two years, one year and year-to-date, in addition to pricing and performance metrics. Four broad market indices and five bank and thrift indices are also tracked. At a very high level, it is fair to say that the broad and bank indices at Jan. 31, 2019, after being decimated in late December, have largely recovered to the levels reviewed in my last report as of Nov. 30, 2018. The volatility is a reflection of manic periods of optimism and pessimism about the net economic impact of resolving, or not resolving, a number of substantial issues. At the forefront is the evidence of economic weakness abroad and the expectation that U.S. domestic weakness is bound to follow, despite the current climate of a relatively good economy, low unemployment and contained inflation. International geopolitical issues, such as the trade wars, tariffs and sanctions, threaten to disrupt trade. Domestic political dysfunction, manifested in harsh discourse and a long partial government shutdown, creates investor uncertainty. Federal Reserve interest rate policy, at one point hawkish and more recently somewhat dovish, impacts economic growth expectations. Numerically, the four broad indices as of Jan. 31, 2019, were up an average of 8.31 percent since Dec. 31, 2018, and down only 1.66 percent since Nov. 30, 2018. The five bank indices as of Jan. 31, 2019, were up an average of 10.23 percent since Dec. 31, 2018, and down 4.72 percent since Nov. 31, 2018. Taking a longer-term view, the four broad indices as of Jan. 31, 2019, are up an average of 23 percent from two years ago and down 3.62 percent from one year ago. The five bank indices as of Jan. 31, 2019, are up an average of just 0.21 percent from two years ago and down a significant 13.27 percent from one year ago. Bank indices continue to trail the broad indices, despite generally positive bank earnings reports and near-term prospects. NASDAQ-traded Indiana banks have a median decrease of 5.54 percent and 14.4 percent over two years and one year, respectively, and up 5.07 percent year-to-date. NASDAQ-traded Indiana banks are trading generally in concert with the similarly sized, out-of-state regional banks with a significant presence in Indiana. In contrast, OTC/Pink sheet-traded Indiana banks have an increase of 20.64 percent and 2.55 percent over the two-year and one-year time horizons, respectively, and down 0.15 percent year-to-date. It stands to reason that banks that did not experience dramatic declines in December would be relatively flat in January as the higher volume stocks recovered. Two Indiana banks are expanding into nearby states through acquisition. First Financial Corporation based in Terre Haute (THFF - $3.0B in assets) announced the acquisition of Hopfed Bancorp Inc. based in Hopkinsville, KY ($905M in assets) on Jan. 7, 2019. THFF will significantly expand its current market area of Western Indiana and Eastern Illinois to Kentucky and Tennessee. The $128.3M purchase price will be paid with 50 percent stock and 50 percent cash, and represents 152.5 percent of tangible book value and 31.8 times earnings. German American Bancorp Inc. based in Jasper (GABC - $3.9B in assets) announced the acquisition of Citizens First Corp. based in Bowling Green, KY ($476M in assets) on Feb. 21, 2019. The acquisition is a natural add-on to its recent purchase of First Security Inc., which has a presence in Bowling Green. The $68.2M purchase price will be paid with 77 percent stock and 23 percent cash, and represents 148 percent of tangible book value and 14.2 times earnings. HB STOCK ANALYSIS Indiana Bank & Thrift Stock Update Review as of Jan. 31, 2019
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