Gov. Eric J. Holcomb Taking Indiana to the Next Level HB HOOSIER BANKER MAGAZINE indianabankers.org PLUS! FLD Converges on the Indiana Statehouse MAY / JUNE 2019
Agenda Breakfast 7:30 am Seminar 8:30 am Lunch 12:00 pm Conclusion 3:00 pm Woodland Country Club 100 Woodland Ln Carmel, IN 46032 317.846.2588 June 5, 2019 Indianapolis, IN JUN Member: FINRA and SIPC Oklahoma City, OK | Atlanta, GA | Austin, TX | Indianapolis, IN | Long Island, NY | Salt Lake City, UT | Springfield, IL The Baker Group LP is the sole authorized distributor for the products and services developed and provided by The Baker Group Software Solutions, Inc. www.GoBaker.com | 800.937.2257 For forty years The Baker Group has been known for its proven software and products, and for helping clients make sound, strategic decisions. The Baker Group’s Interest Rate Risk and Investment Strategies Seminar was developed specifically for managers of financial institutions. Designed to meet current financial challenges, it is an in-depth examination of topics including: • Economic Overview, Market Update, and Fed Policy Outlook • Interest Rate Cycle Dynamics – Preparing the Balance Sheet for the Next Environment • Best Practices to Comply with the Latest Liquidity and IRR Regulatory Guidance • What Should Our Institution Be Buying Today? Seeking the Best Relative Value • Managing Cashflow Optionality to Protect Against Extension and Contraction Risk • Protecting Your Portfolio with a Robust Municipal Credit Process Who Should Attend Financial institutions’ CEOs, CFOs, investment officers, board members, and those who are directly or indirectly responsible for financial management functions will benefit from this seminar. There is no cost for this seminar. Register online at GoBaker.com/indiana. For more information call Skoshi Heron at 888.990.0010. 6 hours of CPE credits will be earned for your attendance.
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4 MAY / JUNE 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 Executive & 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 Administrative Assistant ......................................................................................................Wendy Colin
Hoosier Banker 5 CONTENTS Vol. 103 No. 3 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 Gov. Eric J. Holcomb: Taking Indiana to the Next Level ARTICLE SPOTLIGHT 16 IBA’s Future Leaders Converge on the Indiana Statehouse Josh Myers, IBA FEATURES 6 Vantage Viewpoint Amber R. Van Til, IBA 7 Chairman’s Report Andrew J. Briggs, Farmers & Merchants State Bank 8 Board Review Garry D. Kleer, First Bank Richmond 9 IBA Calendar of Events 30 Twitter for Banks Emily Brooks, IBA INDIANA BANK & THRIFT STOCK UPDATE 18 Stock Analysis Michael A. Renninger, Renninger & Associates LLC PSP SHOWCASE 20 New Name, Same Quality Offerings Jeff Williams, Spry PRODUCTS &SERVICES PROFILE 22 Bank-Specific Insurance Options Rod Lasley, IBA DIRECTORS / SENIOR MANAGEMENT 24 Deposit Betas Under Pressure Matt Harris, The Baker Group 38 The Basics of Fintech Julie Stackhouse, Federal Reserve Bank of St. Louis 42 Shattered Myths of Banking Achim Griesel, Haberfeld Associates 44 Team Up With a Factor Trevor Morgan, Prairie Business Credit Inc. 52 Prime Time for IRA Deposits Steve Christenson, Ascensus GR SUMMIT 26 Banking on Hemp Dax Denton, IBA COMPLIANCE CONNECTION 28 Disposition of Loan Collateral Brett J. Ashton, Krieg DeVault LLP HUMAN RESOURCES 32 Bank Succession Planning R. David Fritz Jr. and Patrick J. Marget, Executive Benefits Network 36 Working Off the Clock Debra A. Mastrian, SmithAmundsen LLC LENDING / CREDIT 34 Secrets to Mortgage Success Tracy Marks, LenderSelect Mortgage Group DEPARTMENTS 19 Taking It Easy 21 From the Board Room 33 Anniversary Milestones 40 Video Bonus 40 Banking Center News 45 IBA Employees of the Month 46 Associate Members’ Corner 48 Honorable Mentions 50 Banking on Community 54 Bankers on the Move 62 Advertisers Index
6 MAY / JUNE 2019 How many loans are being made, benefiting how many individuals and businesses? How many employees earn a livelihood through Indiana banks? How many volunteer hours do bank personnel dedicate to their communities? And don’t forget to point out that banks contribute to the national economy by paying federal taxes, while the credit union industry pays none. IBA has tools of support to help member bankers serve as grassroots advocates. Talking points are available in the advocacy channel of the IBA website, and I encourage you to take a look, particularly at the recently updated “Banks’ Economic Impact in Indiana.” You can access talking points online at: indianabankers.org/ iba-talking-points Another tool, as mentioned at the panel discussion at FLD Day at the Statehouse, is the online IBA VoterVoice. This user-friendly resource allows bank personnel of all levels to quickly and easily contact legislators about important issues. Finally, I’d like to close with a word of gratitude to all the legislators who serve Indiana, whether in DC or here in the Hoosier state. I’d particularly like to thank Gov. Eric J. Holcomb for giving his time during the busy legislative session for a Hoosier Banker interview. We are honored to feature him for this issue’s cover story. HB Amber R. Van Til President and CEO Indiana Bankers Association avantil@indianabankers.org @grbanker VANTAGE VIEWPOINT FLD Leadership Conference Aug. 27-28 Emerging bank leaders come together for this inspiring annual event of networking and leadership-building. Advanced Agricultural Credit Conference Sept. 4-5 Ag lenders prepare for the 2019-20 loan renewal season by reviewing the state of agriculture. Annual Washington Trip Oct. 20-22 Join in the chorus of bankers making voices heard at our nation’s capital. Don’t Miss Out! By the time you read this column, the 2019 Indiana legislative session will be adjourned. I am pleased to report that we have had another successful session. We all take great pride in the excellent work that the IBA Government Relations Team does on your behalf. But let’s not rest on our laurels … our advocacy work doesn’t end with the adjournment of the Indiana General Assembly. There is much work to be done to ensure an environment where banks can continue to drive and support the economic viability of the communities we serve. Issues addressed at the state level this year included broad legislative topics such as budget, workforce development, teacher pay, bias crimes, gaming and payday lending. Other topics that were more specific to the business of banking included Uniform Consumer Credit Code reform, a current customer exemption to the Indiana Do-NotCall List, legacy trusts, updates to judgment liens, and the regulation of hemp products. As always, your GR Team will inform members as to how these issue were resolved, and what topics continue to require attention in the months ahead. On the national front, spring is the season for the national trade associations to invite bankers to gather together in our nation’s capital. The American Bankers Association hosted its government relations summit in early April, and the Independent Community Bankers of America fly-in is taking place at the end of April. This fall, there will be a major opportunity specific to the Indiana banking community to make a strong showing in DC to make our voices heard. The annual IBA Washington Trip is scheduled for Oct. 20-22, as highlighted in the “Don’t Miss Out” box on this page. Truly, we don’t want you to miss out. This trip affords multiple meetings with regulatory agencies, ABA and ICBA, and of course our congressional delegation. It’s a chance to speak up for the industry in a way that cannot be ignored. Legislators tell us time and again that the showing of a large group of bankers, who have made the effort to travel to meet with lawmakers, makes a very positive impression. The IBA encourages grassroots support from all levels within the bank, not just C-suite bankers. In March, for example, the IBA Future Leadership Division hosted the Day at the Statehouse event that Chairman Briggs references on the facing page. This year’s event featured a panel of bankers – named in an FLD article on page 16 – who shared their insights about grassroots advocacy. They offered outstanding suggestions for those interested in advocating on behalf of the industry. The overall theme was that it is important to talk to legislators about what matters to them and their constituents. While banking professionals enjoy talking about asset size, legislators simply want to know how banks impact their communities. P.S. The IBA has a new subsidiary! Please see page 22 for news about IBA Insurance Solutions, which offers insurance options tailor-made for banks.
Hoosier Banker 7 major, the IBA is inching closer to getting a program implemented. The academic world moves at a different pace than business undertakings, due to multiple channels of input and review, yet solid progress is taking place as your IBA team continues to form relationships with academic partners statewide. It’s important to find ways to bring future talent to tomorrow’s bank environment, but also to nurture current talent. There are many impressive young bankers now serving in Indiana banking, and there are now about 300 banking professionals who are members of the IBA Future Leadership Division. This spring the FLD hosted its annual Day at the Statehouse, and I had the opportunity to attend. From what I observed throughout the day, I am highly impressed with the emerging leaders of IBA-member banks. FLD members are eager, inquisitive and working hard to serve their customers and communities. They represent the future, and they give me confidence that the future of banking will continue from a position of strength and stability. All of this programming mentioned in this column – FLD Day at the Statehouse, the Indiana Banking Internship Program and the Mega Conference – are only three examples of how the IBA helps build better bankers. Please consider how you can take advantage of IBA offerings to build your team and your future. HB NOTABLE QUOTES Bank Community Service on Twitter The Friendship State Bank • @BankFriendship • March 14 Scholarship Application Deadline is Friday, April 5. Will you help us spread the word? We’re awarding 9 - $1000 scholarships to local high school seniors demonstrating a commitment to community service. STAR Bank • @STARFinancial • March 15 As a community bank, STAR is dedicated to creating a positive quality of life for those who live, work and play in our backyard. It is a privilege to sponsor the @NoblesvillePark 2019 - 2021 Summer Concert Series. Centier Bank • @CentierBank • March 18 A few members of the Centier team were out helping the @ MealsonWheelsIN raise funds at their 18th annual Dine with the Chefs Gala! Each year the event raises $70,000 to help feed those in need in NWI. #nwindiana German American Bank • @_GermanAmerican • March 29 Our Washington State Road 57 office is hosting a Friends for Animals Pet Food Drive April 1-5. We are accepting pet food items & monetary donations for Daviess County Friends for Animals. Stop by our office located at 560 S. State Road 57 in Washington, IN to drop off your donation! Ossian State Bank • @OssianStateBank • April 1 Staff from Ossian State Bank presented Jon Sherburne, Ossian Volunteer Fire Department, with a $1,500 donation for the Annual Pancake and Sausage Breakfast scheduled for Saturday, April 6th. Follow IBA Twitter @indianabankers Twitter Andrew J. Briggs Chairman Indiana Bankers Association First Senior Vice President for Business Development Farmers & Merchants State Bank, Archbold, Ohio CHAIRMAN’S REPORT The theme of the 2019 IBA Mega Conference is: “Building Better Bankers.” As I write these words, Mega has not yet taken place, but it may have already happened by the time you are reading this. Either way, I sincerely hope that Mega has fit into your 2019 plans. If not, please consider coming to Mega next year. There’s no more convenient way to catch up on what bankers need to know to build skills and be better bankers. At the Mega Conference, in the span of only two days (three, for those in the golf outing) attendees have access to nearly 50 educational sessions covering a dozen different functional areas of banking. Then there are the lunchtime keynotes, the Mega Celebration and the chairman’s suite for quality networking. You can’t beat the value of attending this event. Mega represents just one of the distinguishing traits of the IBA. I’ve been active with this Association for many years, and I’ve always felt that IBA membership more than paid for itself. Its value became more apparent, though, when I started serving on the board and saw close up how much the IBA offers its members. At this point, the IBA staff is nearly halfway through the Association’s three-year strategic plan, tackling five “pillars” of ambitious goals. All of the endeavors point to the same end: building better bankers. Whether advocating for an environment conducive to banking, or setting up programs to bring in new talent, the vision of the IBA goes far beyond its three-year plan. One strategic plan pillar that would have been unheard of just a few years ago, but is extremely relevant today, is “Next-Gen Bankers.” This means bringing the best and the brightest of new talent into the industry to ensure its long-term strength and viability. Thanks to the leadership of Clay Ewing of German American Bank, who served as 2018 IBA chairman, the Association has developed a two-pronged approach to bringing tomorrow’s professionals to banking: set up a working internship program, and create a banking major at an Indiana university. Step one, the IBA internship program, is set up and ready to implement. This summer begins the rollout of the inaugural Indiana Banking Internship Program, matching high-caliber Indiana college students with IBA-member banks. For this first year, we are starting out with a small group of students, allowing IBA to carefully monitor and assess strengths and weaknesses of the programming. This pilot-program approach sets up the IBA for the ability to review and successfully build upon the initiative for increased participation next year. Step two of Clay’s initiatives, creating a banking major, is making impressive headway. While it can take years to create a new university
8 MAY / JUNE 2019 Since I was a young boy, I knew I wanted to be a banker. I grew up in New Albany, where our bank had a little lift for children to stand on to be raised up to counter height. At the end of the transaction each deposit was rewarded with candy, which is why I made several deposits a week! I studied finance at Indiana University, and 90% of my job interviews were with banks. I received a couple of offers and went to work for American Fletcher National Bank in Indianapolis. AFNB was the predecessor of Bank One, which is now Chase Bank. I was at Bank One for a little while after they bought American Fletcher. Later I worked for Barnett Bank in Gainesville, Florida. While I enjoyed the climate, Florida never really felt like home. After a couple of years, I had the opportunity to come back to Indiana, working for Bank One in Richmond. In 1994 I joined First Bank Richmond as vice president of commercial lending. In 2001 I was named president and CEO. Along the way, I also completed studies at the Graduate School of Commercial Lending and the Stonier Graduate School of Banking. In addition to my duties of managing the bank, I also spend quite a bit of time exploring opportunities to expand our footprint and/or our talent pool. I like to think we do a good job in both areas. What I like most about banking is helping people. Whether making a loan, helping to open a deposit account or resolving a problem, I enjoy seeing customers accomplish their goals. I also enjoy seeing our employees succeed. It’s satisfying to be able to give them opportunities, whether going to school or volunteering in the community. Some are hesitant at first to volunteer, but once they get involved, they love it. They get acclimated to being out in public and grow comfortable knowing they can make a difference. First Bank Richmond has a culture of encouraging employees to volunteer. We’ve always stressed the importance of giving back. Several years ago we established a community relations position to help our employees get engaged, and the officer managing that area has done an excellent job. Last year our employees volunteered over 2,900 hours for notfor-profit organizations, and 72 local organizations have First Bank employees on their boards of directors or their advisory councils. Additionally, we’ve donated over $400,000 to these organizations. To create a culture of wanting to go out into the community, it helps if employees see their bosses being involved. Whether it is me or any other member of senior management, we are all involved in the community. I’ve enjoyed serving on the boards of the Boys and Girls Club of Wayne County, Reid Health Foundation, Richmond Symphony Orchestra and Wayne County Foundation. I’ve also been active with Indiana University and Junior Achievement, as well as other organizations. Volunteerism is one of many reasons that community banking is important to the state, and the Indiana Bankers Association is integral to the success of community banking statewide. Before joining the IBA board of directors, I served the Association on a couple of committees and as a legislative contact. I’ve enjoyed getting to know other bankers. The IBA gives bankers a networking resource. If you’re looking at doing something new at your bank, others may have done it before and can give advice. Or other banks may be doing something you haven’t thought of, which in turn might work for your bank. First Bank Richmond was established in 1887. We started out as a savings and loan and converted to a state bank as the opportunity presented itself to get involved in business lending. Then we purchased a bank in west central Ohio, and we’ve continued to add experienced personnel as they became available in our markets. What has allowed us to remain in operation for 132 years is that we’ve changed with the times, while still keeping our core values intact. Our focus is on our customers. Our billboards have a theme of “I Love My Bank,” with pictures of customers on the billboard. I hear that theme quite often in the community when our bank name is mentioned, so it’s really caught on. When we came out with that campaign, we added “Doing Great Things Together” as the tagline. That slogan came about by looking at our community relationships and recognizing that we have equal partnerships with the individuals and businesses we serve. Especially on the not-for-profit level, our contributions and volunteerism make our community a better place to live and work. It all goes back to “Doing Great Things Together” to benefit everybody. My wife, Cheryl, also enjoys being active in the community. She retired as a nurse a few years ago and now spends most of her time volunteering. We have two children. Our daughter and her family live in Granger, and our son and his wife live in Jacksonville, Florida. Cheryl and I have two grandsons through our daughter, and we’re grateful that they’re only three and a half hours away. For anyone starting out in their banking careers, my advice is to be adaptable. The way we interact with customers and deliver our products is going to continue to change, and those who will be successful are going to have to embrace those changes. Banking has been a great career for me. It’s very rewarding, because it gives me the opportunity to hear customers’ stories and help them achieve their dreams. HB Garry D. Kleer Northeast Region Director Indiana Bankers Association President and CEO First Bank Richmond BOARD REVIEW
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 Regulation Z University May 21-23 • 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 Elder Financial Exploitation June 13 • IBA Center Home Mortgage Disclosure Act June 18 • IBA Center 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 Director 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 Resource Director Forum July 11 • IBA Center Stepping Up to Supervisor July 30 • 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 Bank Directors Workshop Aug. 12 • The Landmark Centre • Fort Wayne Aug. 13 • IBA Center Aug. 14 • TBD 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 Flood Insurance Update Aug. 22 • 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 Advanced Credit Analyst School Sept. 11-12 • 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 CBC Compliance School - Lending School Sept. 24-26 • IBA Center BSA Bootcamp Oct. 1-2 • IBA Center Bank Security Conference 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 Business Development Oct. 10 • IBA Center CFO Forum Oct. 17 • IBA Center • Group 1 Oct. 18 • IBA Center • Group 2 Annual Washington Trip Oct. 20-22 • Washington, DC Marketing Director Forum Oct. 22 • IBA Center IRA School Oct. 22-23 • IBA Center IT & Operations Officer Forum Oct. 23 • IBA Center • Group 1 Oct. 24 • IBA Center • Group 2 Community Bankers for Compliance - Session 4 Nov. 5 • IBA Center Nov. 6 • IBA Center Nov. 7 • The Landmark Centre • Fort Wayne Human Resource Director Forum Nov. 7 • IBA Center Fundamentals of Commercial Lending Nov. 7-8 • IBA Center Branch Management Series: Raising the Bar for Sustainable Growth Nov. 19 • IBA Center Banking on Women Conference Nov. 20-21 • Indianapolis Marriott North Hotel Midwest Agricultural Banking School Dec. 2-5 • Purdue University • West Lafayette CBC Compliance School - Deposit/Operations Compliance School Dec. 3-4 • IBA Center
10 MAY / JUNE 2019 COVER STORY Gov. Eric J. Holcomb Taking Indiana to the Next Level When Indiana Gov. Eric J. Holcomb was sworn into office in January 2017, he inherited governance of a state with a balanced budget, thriving economy and a reputation for being business-friendly. How does a leader move forward when conditions are already prime? By moving up to the “Next Level.” In the first year of his term, Gov. Holcomb introduced the Next Level Agenda, a five-pillar initiative for Indiana that aims to: 1. Cultivate a strong and diverse economy; 2. Maintain and build the state’s infrastructure; 3. Develop a 21st century skilled and ready workforce; 4. Address public health and the drug epidemic; 5. Deliver great government service. Gov. Holcomb is quick to credit others for bringing Indiana to its position of strength. In this year’s State of the State address, he recalled a time “not so many years ago” when Indiana lacked reserves and outspent its revenue. “But thanks to you and our predecessors,” he said, “we turned Indiana 180 degrees and set sail on a course to sustainable growth, fiscal strength and a more efficient government.” Holcomb logged extensive public service experience before taking office as governor. In addition to serving as Indiana’s lieutenant governor for 11 months, career highlights include being campaign manager for U.S. Rep. John Hostettler and Indiana Gov. Mitch Daniels, chairman of the Indiana Republican Party, and state chief of staff for U.S. Sen. Dan Coats. In the community, Holcomb has been active with organizations such as the National Federation of Independent Business, the Indianapolis WWII Round Table, the American Legion and the Benjamin Harrison Presidential Site. In April he was honored with the Trailblazer Award by TechPoint for championing initiatives that support the tech industry. He also is a six-year veteran of the U.S. Navy, with three years of service in Portugal, and a graduate of Hanover College. A lifelong fan of basketball, Holcomb takes pride in having shot and made a basket in each of Indiana’s 92 counties. The governor’s accomplishments are mirrored by First Lady Janet Holcomb. Besides successfully running a manufacturing business, she has earned advanced degrees in fine arts, has a background in competitive horsemanship, and is a recognized expert in shooting sports and personal protection. Mrs. Holcomb lends her talents to organizations including the Indiana Economic Development Corporation, 4-H and scouting, the Riley Children’s Foundation, the Hoosier Salon and the Indiana FBI Citizens Academy. She has bachelor’s and master’s degrees from Ball State University. Hoosier Banker recently interviewed Gov. Eric Holcomb about Next Level goals and other initiatives.
Hoosier Banker 11 What accomplishments are you most proud of at this halfway point through your term as governor? “It’s a long list, thankfully. We’ve made progress on all five of our Next Level pillars. “In the area of economic development, we’ve broken the record for new job commitments in both 2017 and 2018. In 2017, we broke the year 2012 record by establishing 30,158 new job commitments. Then in 2018, we broke the record again for back-to-back success. “Regarding infrastructure, in 2017 we rolled out a program that provides stability in terms of the maintenance and new construction needed for our roads and bridges. It’s a 20-year, $32 billion project that is paid for, not debt-financed. We’re moving ahead with major transformational projects that have been talked about for years. “We also need to prepare our workforce. We have realigned our efforts to make sure that we’re skilling up today’s worker for the work that’s available today and also 10 years from now. We’re going to have to fill about a million jobs over the next decade because of the ‘silver tsunami’ – baby boomers who are exiting the workforce. “In addition to that, we’re redefining what higher education means in today’s world. The business community, higher education and state resources are all sitting down at the same table, making sure that we’re supplying what businesses need to meet their growth demands. “Another area of progress is that we are seeing positive signs in terms of public health. We’re addressing the drug epidemic – specifically, the opioid epidemic. Emergency room visit rates are going PHOTO CAPTION: Eric J. Holcomb serves as 51st governor of Indiana.
12 MAY / JUNE 2019 can have the best idea in the world, but if you can’t capitalize it and convert it from a good idea into positive action, then you’re not going to get traction. “Equally important, IBA members are oftentimes the pillars of communities, no matter how small or large that community is. To have banker presence on local boards – sharing their expertise, and applying their intellect and experience – those things are making Indiana go. “I am profusely appreciative. Alex Haley said, ‘Find the good and praise it.’ I’m here to praise the good that the Indiana Bankers Association membership is doing on a dayin-and-day-out basis.” Last December you announced the Next Level Trails program, providing for hiking, biking and riding trails throughout the state. Why are you promoting this initiative? “This is another example of responding to the people that we serve. There was a pentup desire to improve quality of life in terms of connecting with the outdoors. Trails were organically popping up all over the state, but they were dots and lines in a hodgepodge. Looking at a map, you would wonder, Continued on page 14. A capacity crowd attended the 2019 Indiana State of the State address in January. down, and the needle exchange program is working. “Looking at this holistically, we’re also seeing other numbers recede. For infant mortality, we still have a ways to go, but the trajectory is bending down. It’s because of some measures we’ve put in place to help educate targeted ZIP codes around the state. “In terms of modernizing and being transparent in the way state government interacts with businesses and people, we’re continuing to make progress. We’re providing great government service for exceptional taxpayer value. “I’m proud of what we’re doing and the team we have in place. The team is the frontline, implementing these plans that are informed by the very people we serve.” How can the Indiana banking community be of assistance with the Next Level Agenda? “Bankers already are helping. Just last year the Indiana Bankers Association and membership throughout the state provided assistance to the Indiana Economic Development Corporation to update legislation regarding the Capital Access Program. “That was a big step forward because, for small businesses, that funding is the fuel they need. You Gov. and Mrs. Holcomb pose with “First Dog” Henry, a seven-yearold miniature schnauzer. Henry can be followed on Facebook, Twitter and Instagram @FirstDogHenry.
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14 MAY / JUNE 2019 we’ve been. It’s instructive where you’ve been 15 years ago, but where do you want to be 15 years from now? “When you start with the goal, what I have found is the majority of us all want the same. My goal is for Indiana to be the best state in the country for growth opportunity, whether for an individual, family, business or the community. “When I sit down with folks, regardless of the specific topic, most people agree on that. Most people want equal access. Most people want to be able to determine their own destiny. “So you start with where we want to go and look at the different paths to get there. There are different ideas on what is the fastest way to realize that goal or dream, and I’m very comfortable with people who have different ideas. “As a matter of fact, I don’t have any pride of authorship. If you’ve got a better idea, bring it to me. Let’s work together to put those thoughts into motion. “Will there will be some bumps along the way? Yes, because if there weren’t, we would have solved the problem years ago. We’re not left necessarily with easy problems to solve.” How has your prior political experience prepared you to serve as Indiana’s 51st governor? “What I learned is that when we fail, hopefully we fail fast. We learn from it, we don’t make the same mistake twice, and we’re courageous when we need to be. We are well informed by the public that we serve. “Indiana has a culture that aspires to constantly do better. Maybe that comes from our agrarian roots, or from cheering for our basketball teams or favorite race car driver, or from family upbringing. You could trace it back to many different sources, but the roots run deep. “I constantly talk about how we can take it to the next level, and that applies to whether we’re ranked 32 or 1. Indiana has been ranked No. 1 in a lot of key categories. When I sit down with the team, I say, ‘We’re competing against ourselves to remain No. 1.’ “By the way, for the other 49 states that are looking to us, we’ve shown them the blueprint. They’re reading that blueprint, and ‘Is there any rhyme or reason to this?’ “We talked with local leaders, and we found that the disconnected trails represented just a fraction of what they wanted to do. The end goal was to connect the dots within communities, neighborhoods and cities, but the capital wasn’t there. “So we creatively asked what we could do to help, and we were able to secure $90 million of state money, leveraged with local buy-in. We put out a state grant program that began with $25 million for phase 1 of that $90 million, and appealed to communities that were addressing local and regional projects. “Over 80 different applicants submitted from all over the state of Indiana, with a total request of about $144 million. This acknowledged that the desire is there, though maybe we underestimated it. But it’s good news that there is more desire out there, because when we connect neighborhoods and communities, the benefits go beyond promoting good health. “Businesses coming in want to look at the full community and see what the amenities are. We used to be known as a basketball and racing state. And now we have running and walking and mini marathons all over the state. There are hundreds of thousands of people who are participating in these outdoor activities. “The Next Level Trails program is going to be a game changer, because access to a trail system is attractive to people who make investments. With local buy-in and state buy-in, it’s a partnership that is setting another example of how Hoosiers come together. Ideally, I’d like every Hoosier to be within five miles of trail access.” You have built a reputation as a consensusbuilder. What do you consider the key to consensus? “I always start with the goal, and I’m transparent about that goal. I talk about where I want to go, not necessarily where Indiana Gov. Eric J. Holcomb was sworn into office on Jan. 9, 2017. Indiana Senate interns join Gov. Holcomb in a selfie.
Hoosier Banker 15 VIDEO BONUS cian’ who knows when the camera is on. “When we’re having meetings at the governor’s residence, Henry wanders in and makes himself at home. He overhears some things that maybe he shouldn’t, but the secret is safe with him, because we haven’t figured out how to translate those barks yet. “I could learn a thing or two from Henry. He has more followers than I do, he’s been mentioned on the TV show Jeopardy, and he gets invited to fundraisers and weddings. “I was asked if Henry could attend a wedding, and I said, ‘I’ll have to check to see if we’re in town.’ They said, ‘No, Eric, you misunderstand. We want Henry in our wedding photos, not you.’ “Clearly, he has his own base.” HB they’re skipping steps to be nipping at our heels, and that’s good. All of us have to raise our game. “One thing that makes me so enthusiastic about the future in our state is that aspirational approach to take it to the next level and to never settle. Our task will never end. We want to make sure that we keep providing an environment for growth.” How have your years in the U.S. Navy shaped you? “Significantly. It was the ultimate experience in realizing from day one at boot camp that everyone is equal. Everyone has a shot to determine their own destiny through hard work, through carrying out orders and by treating people with respect. “The camaraderie that comes with that is profound. It means understanding that the unit is only as strong as the weakest link. It means asking how to assist someone who is struggling in some area, myself included, and how to help that individual rise up. That camaraderie helps the team carry out its mission. “It also underscores serving a cause much greater than yourself. I’ll never have a job more fulfilling than wearing a uniform, and now in civilian life to serve the state which I come from and love.” What influences drew you to a life of public service? “It was not a straight line. It was one thing leading to another, but primarily it was my enjoyment in serving others, even predating my Navy experience. “I’ve always enjoyed being around others on a team and experiencing how we perform together – each having different roles, each being different – and seeing what we could accomplish together. That goes back to when I was a little guy playing third-grade basketball. “Throughout life, whether it was serving in student government or in the Navy or elsewhere, I had people I could look up to. There were my parents and coaches and commanders in the Navy and my predecessors in the political arena. They all understood that, together, we are much stronger.” Gov. Eric J. Holcomb delivered the 2019 State of the State address on Jan. 15, saying: “Indiana is on a roll, and the state of our state is strong.” View a one-minute excerpt by clicking on the video icon in HB Digital. First Lady Janet Holcomb is multitalented – skilled in business, the arts, equestrian sports, shooting and safety, and more. What are some of the duties as first lady that Mrs. Holcomb especially enjoys? “She really enjoys helping youngsters who are seeking out their future, so she has gravitated toward helping and volunteering in those pursuits. Mrs. Holcomb really lights up about her work with the Riley Children’s Foundation – where she serves on the board – or 4-H activities or Girl Scouts. She’s drawn to those activities and enjoys helping kids find their way. “She also does much more. Janet serves on the board of the Indiana FBI Citizens Academy, she’s vice president of a family business in Madison County that her father started 50 years ago, and she’s a competitive shooter and expert in gun safety. I don’t like to shoot with her, because it’s annoying how good she is. “Janet grew up in 4-H activities and Girl Scouts, and she understands the whole ‘team’ aspect of life. Plus she enjoys the outdoors as much as I do. I married up.” ‘First Dog’ Henry, your miniature schnauzer, has his own social media accounts with thousands of followers. What’s the secret to his success? “Henry’s not a politician, he’s a ‘pawlitiAt his Statehouse desk, Gov. Holcomb sits across from a placard that reads: “There is no limit to what a man can do or where he can go if he doesn’t mind who gets the credit.”
16 MAY / JUNE 2019 About the FLD ARTICLE SPOTLIGHT On March 12, the Indiana Bankers Association Future Leadership Division held its annual Day at the Statehouse. This event was created to encourage FLD members to become more involved with grassroots advocacy on the state level. This year the event enjoyed its largest turnout, with nearly 70 professionals from 30 IBA-member banks in attendance. The day began at The Westin Indianapolis with opening remarks before jumping into a networking opportunity that consisted of group discussion and debate on an important legislative issue. Bankers were first divided into five teams to allow them to get to know their peers. Each team was then tasked with formulating a grassroots advocacy message on a position related to legalization of cannabis. The purpose of the activity was to allow attendees to think about being part of a grassroots organization, and how to best create a platform that takes into consideration their perspective, as well as the views of issue opponents. Next the group was briefed on the IBA’s Government Relations department by Eric Augustus, IBA vice president-government relations. Attendees learned about the legislative process, how lawmakers can impact banking and recent legislative updates. Attendees then enjoyed a brief walk to the Indiana Statehouse, where they had the opportunity to meet inside the chamber of the Indiana Senate. Sen. Eric Bassler, R-Washington, and Sen. Erin Houchin, R-Salem, addressed the group, sharing their experiences in the Indiana General Assembly and on banking matters. Among other duties, Sen. Bassler is the chairman of the Senate Insurance and Financial Institutions Committee, and Sen. Houchin is the ranking member on the Senate Tax and Fiscal Policy Committee. After the meeting, the group traveled across the hall Josh Myers Assistant Vice President - Member Engagement Indiana Bankers Association jmyers@indianabankers.org @joshmyersIN IBA’s Future Leaders Converge on the Indiana Statehouse to the chamber of the Indiana House of Representatives for a meeting with Rep. Woody Burton, R-Whiteland, and Rep. Martin Carbaugh, R-Fort Wayne. Among other responsibilities, Rep. Burton is chairman of the House Financial Institutions Committee, and Rep. Carbaugh chairs the House Insurance Committee. Both representatives answered questions pertaining to banking and offered insights from the perspective of the House of Representatives. Immediately following, attendees had an opportunity to visit with their own elected officials or tour the Statehouse. Through previously arranged meetings, several bankers took advantage of the opportunity to visit with their legislators, either within their offices or in the halls of the Statehouse. More than 15 legislators were visited during this time, mostly by small groups of constituents within their districts to allow them to either meet for the first time, or to build upon already existing relationships. This was the first attempt by the IBA to coordinate these legislative meetings on this scale, and we are encouraged by the conversations and opportunities created. Thank you to all the legislators and bankers for taking the time to visit. Returning to The Westin, attendees shared in a luncheon sponsored by Krieg DeVault LLP. The lunch program was a panel discussion moderated by IBA President and CEO Amber Van Til that featured IBA members who have been active in grassroots advocacy. The panel consisted of: • Michael K. Bauer, WesBanco Bank, New Albany; • William W. Harrod, First Harrison Bank, Corydon; • Lucas White, The Fountain Trust Company, Covington, and FLD past president; • Melodie K. Yarnell, Jackson County Bank, Seymour, and current FLD vice president. As leaders in the banking industry, panelists shared Click on the hand icon in HB Digital to learn more about the Future Leadership Division.
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