HB HOOSIER BANKER MAGAZINE indiana.bank PLUS! Legislative Day 2020 MARCH / APRIL 2020 Proudly Presenting The 2020 IBA Board of Directors
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@indiana.bank 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, 2020, the Indiana Bankers Association is accepting nominations for the 2020 CLASS of the IBA Leaders in Banking Excellence.
HOOSIER BANKER MAGAZINE indiana.bank DIRECTORS & STAFF IBA BOARD OF DIRECTORS Officers Lucas White, Chairman ....................................................The Fountain Trust Company, Covington Michael S. Zahn, First Vice Chairman ..................................First Federal Savings Bank, Huntington Garry D. Kleer, Second Vice Chairman ...........................................................First Bank Richmond Andrew J. Briggs, Immediate Past Chairman .........Farmers & Merchants State Bank, Archbold, Ohio Amber R. Van Til, President and CEO .............................Indiana Bankers Association, Indianapolis Constituent Directors Michael K. Bauer, ABA Membership Council ...................................WesBanco Bank, Wheeling, WV Michael H. Head, ICBA State Director ...................................First Federal Savings Bank, Evansville Tim Massey, Non-Indiana Headquartered Bank Director ...........................BMO Harris Bank, Chicago Melodie K. Yarnell, Future Leadership Division President .................Jackson County Bank, Seymour Regional and At-Large Directors Benjamin J. Bochnowski, North Region .....................................................Peoples Bank, Munster Joseph D. Carlson, North Region ...........................................Community State Bank, Royal Center Arden L. Cramer, At-Large ....................................................................Logansport Savings Bank Jeffrey W. Gump, North Region ............................................Farmers and Merchants Bank, Laotto Gregory Inman, South Region ........................................Scottsburg Building and Loan Association John M. Kennedy, South Region ....................................................... Greenfield Banking Company Michael C. Rechin, At-Large ............................................................First Merchants Bank, Muncie Jamie R. Shinabarger, South Region .........................Springs Valley Bank & Trust Company, Jasper IBA FUTURE LEADERSHIP DIVISION ADVISORY BOARD Melodie K. Yarnell, President .......................................................Jackson County Bank, Seymour Emily Boardman, Vice President ...........................................................Crossroads Bank, Wabash Greg Barnes Jr. ...................................................................................... STAR Bank, Fort Wayne 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 Gavin Fisher ............................................................... Community First Bank of Indiana, Kokomo Brock C. Goggins .......................................................................German American Bank, Jasper Kyle Goodwin .............................................................................................. DeMotte State Bank Ryan Hart ...............................................................................................Lake City Bank, Warsaw Zach Hockersmith ..................................................Hoosier Heartland State Bank, Crawfordsville Amanda Morris-Feldman ...................................................First Federal Savings Bank, Rochester Jon-Myckle D. Price ...................................................Security Federal Savings Bank, Logansport Crystal Taylor-Baker.......................................................................Old National Bank, Evansville Billy Winter ..................................................................................Bippus State Bank, Huntington IBA STAFF Amber R. Van Til ........................................................................................... President and CEO Paul W. Freeman, CAE .......................................................................... Executive Vice President Rod Lasley ............................................ Executive Vice President-Operations & Member Services Dax Denton ............................................................Senior Vice President - Government Relations Eric J. Augustus ...............................................................Vice President - Government Relations Christina M. Bennett, CMP ....................................................Vice President - Meetings & Events Laurie A. Rees ...................................................................Vice President - Education & Training Laura Wilson ........................................................................... Vice President - Communications Josh Myers ........................................................Assistant Vice President - Member Engagement Emily Brooks ..............................................................................Member Engagement Specialist Lizzie Ketzenberger .............................................Executive & Government Relations Coordinator Susan Clark ......................................................................Events & Products/Services Assistant Marcy Borden..............................................................................Education Meeting Coordinator Elizabeth DeHaven ......................................................................Education Meeting Coordinator Timothy Fry .....................................................................................................Staff Accountant Tracy Kubly ................................................................................................Technology Manager Wendy Colin ......................................................................................... Administrative Assistant 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. Publisher: Amber R. Van Til Editor: Laura Wilson Advertising: Rod Lasley Design/Print: The Westcott Group Inc. Submissions: HB@indiana.bank Advertising: Media kits are available at indiana.bank. Advertising is reserved for members and associate members of the Indiana Bankers Association. Deadlines: Editorial and ad space reservations are due the first of the month preceding publication. Subscriptions: Subscriptions are provided free of charge to members and associate members of the Indiana Bankers Association. About: The flagship publication of the Indiana Bankers Association, Hoosier Banker is distributed to all banks and thrifts headquartered in Indiana, IBA- member banks headquartered out-of-state and IBA associate 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 and on the IBA website is the property of the IBA. Contact IBA Email IBA staff using first name initial and last name, plus “@indiana.bank” – example: jdoe@indiana.bank Indiana Bankers Association 8425 Woodfield Crossing Blvd., Suite 155E Indianapolis IN 46240-7321 317-387-9380 Vol. 104 No. 2
Hoosier Banker 5 CONTENTS 10 COVER STORY Proudly Presenting the 2020 IBA Board of Directors 14 ARTICLE SPOTLIGHT Legislative Day 2020 Dax Denton and Eric J. Augustus, IBA FEATURES 6 Vantage Viewpoint Amber R. Van Til, IBA 7 Chairman’s Report Lucas White, The Fountain Trust Company 9 IBA Calendar of Events 18 Credit Union Acquisitions Rebeca Romero Rainey, ICBA 20 Elder Fraud Robert S. Nichols, ABA 24 IBA Google Groups Josh Myers, IBA 26 Your Ticket to Mega 39 Five Important HSA Questions Christle Johnson, Ascensus 48 State Deposits in Indiana Financial Insitutions FINANCIAL MANAGEMENT 22 Indiana's Investment Tax Credit Programs Frank A. Hoffman and Shawn E. Peterson, Strategus LLC COMPLIANCE CONNECTION 28 Banks Buying Credit Unions Brett J. Ashton, Krieg DeVault LLP DIRECTORS / SENIOR MANAGEMENT 30 Don't Hitch Your Strategy Lester Murray, The Baker Group 44 A Banker's Guide David DuPerrieu, CSI PSP SHOWCASE 32 Three Ways Bank Managers Help Monitor Technology Risk Dan Hadaway and Adam Reynolds, Infotex HUMAN RESOURCES 34 FMLA Interference Debra A. Mastrian, SmithAmundsen LLC PRODUCTS & SERVICES PROFILE 36 Team Up on Merchant Services Rod Lasley, IBA INDIANA BANK & THRIFT STOCK UPDATE 41 Stock Analysis Michael A. Renninger, Renninger & Associates LLC AG BANKING 42 Midwest Agricultural Banking School Brady Brewer, Purdue University CLOSING NOTE 54 IBA Board Review Melodie K. Yarnell, Jackson County Bank DEPARTMENTS 21 Honorable Mentions 23 Anniversary Milestones 29 C2C Video 29 Associate Members’ Corner 31 Taking It Easy 33 IBA ‘High Five’ 35 Next-Gen Video 35 From the Board Room 45 In Memory of 46 Banking on Community 49 Bankers on the Move 53 Advertisers Index 10 14 26 In This Issue Meet the 2020 IBA Board of Directors
6 MARCH / APRIL 2020 Due to press time, the March/April Hoosier Banker is the issue that most accurately reflects beginning-of-year IBA events and activities. I’m pleased to share with you that we’re off to a good start. For example the 2020 annual Legislative Briefing and Reception went well, as highlighted in this issue’s article spotlight. Meantime your IBA Government Relations team continues working to represent your best interests at the Indiana Statehouse. We’ve also made strides in some of our new programming, including the BankLEAD internship program and the IBA Commitment to Community awards. We’ll be reporting on those initiatives in greater detail in upcoming magazine issues. Another development is that the IBA has taken steps to refresh our staffing responsibilities to ensure a strong succession plan. As you may recall from the last issue, Rod Lasley has been promoted to EVP-operations & member services. This change and other staff adjustments will help the Association transition smoothly in the next two or three years when some retirements take place. Additionally, as we anticipate the needs of tomorrow, the structure of the IBA Board of Directors has been updated to reflect future trends. This issue’s cover story features our board and explains the reconfiguring of regional director positions. The changes are being made so that we can continue to bring wise voices to our governing body, even as mergers and acquisitions affect our bank membership. On a separate note, a major development this year is that your IBA Group Insurance Trust has engaged with NFP as our new trust administrator, effective May 1. The trust also will begin offering health and vision coverage through the UnitedHealthcare network, Delta Dental will become the dental provider of choice, and Express Scripts will manage the prescription drug program. The IBA Group Insurance Trust is overseen by the IBA Board of Trustees, which consists of six member-bank CEOs and myself. The decision to make these healthcare provider changes was not made lightly, but came after a thorough, strategic vetting process. The motivation behind the decision is to provide the best of services to trust participants. Much communication has been shared in recent weeks with bank senior management about these changes. Most of the communications are from the six bank CEO trustees, who have offered their perspectives as bank leaders. In this column, I’d like to provide a brief view from my perspective with the IBA. Your Indiana Bankers Association exists solely for your benefit. It is the IBA’s responsibility to offer member banks quality advocacy, education, networking, and products and services. The area of products and services includes helping you to provide the best Amber R. Van Til President and CEO Indiana Bankers Association avantil@indiana.bank @grbanker VANTAGE VIEWPOINT Mega Conference May 12-14 Mega is the largest, most comprehensive state banking event in the nation. IBA Annual Washington Trip July 26-28 Join the chorus and make your voice heard at our nation’s capital about industry issues. FLD Leadership Conference Aug. 27-28 Emerging leaders build skills and strengthen networks at this premier FLD event. Don’t Miss Out! healthcare option available for your employees – your most important asset. The IBA Group Insurance Trust gives member institutions access to quality health insurance benefits at attractive pricing that would not otherwise be attainable for banks acting alone. Because of the magnitude of importance of healthcare access, the IBA Trust is one of the most valuable member benefits that the Association provides. Throughout the decision-making process regarding this transition, it was impressive for me to witness the dedication of your banking peers who serve on the Board of Trustees. They are well aware of the impact of decisions affecting the IBA Group Insurance Trust. Those decisions affect banks throughout Indiana, as well as directly impact their own institutions. Finally, as the daughter of two bankers, I was literally born under the care of the IBA Group Insurance Trust, as were my own two sons. “Trust” is an appropriate word for this entity that I have trusted my entire life. The stakes are high for the Board of Trustees to continue to earn your trust. As the IBA serves you throughout the year and beyond, I invite you to review the IBA mission, vision and values that appear on page 4 of every issue of Hoosier Banker. Our fourth and final value is that, in fulfilling our mission, we will: “Remain mindful that the success of the IBA is judged by the success of its members.” The IBA succeeds only when its members do. We are committed to doing all we can to help you succeed. HB
Hoosier Banker 7 Since the last Chairman’s Report, I’ve been continuing to travel around the state visiting banks and posting about my visits on my Twitter account: @LucasNWhite. One banker told me he feels like he’s playing “Where’s Waldo?” as he checks Twitter and sees my posts. At this point I have been to all parts of the state, but in no particular order. I have a map of Indiana on my office wall with all the banks marked, and I simply look at the map and pick an area of the state to go to next. I am making progress, but as of this writing I still have approximately 60 banks to visit. My goal is still to visit every bank before the IBA Annual Convention in September. I am having a great time visiting with everyone. Every single banker has been very welcoming, and every conversation has been unique. Some of my conversations have been primarily about the IBA. Others have ranged from the history of the bank and town I’m visiting, to future plans, to ownership and board composition. Some visits have been primarily social. One thing I have realized traveling around the state is that our community is not just where we live or the communities we serve. Our community includes every banker in Indiana. We have an incredible network of bankers across the state. We all have connections and relationships with other bankers, and we are all willing to help each other. Of course we compete with some of our fellow bankers, but we can still be friendly. I have been asked to carry greetings from one bank to another and relay messages like, “The quarterly lunch is past due.” A lot of the camaraderie comes from bankers taking the initiative, but some of it has been cultivated by the IBA. I have found that the bankers who have larger networks of banker-friends tend to be more involved in the Association. Many of them attend IBA roundtables, the IBA Annual Washington Trip, the Mega Conference and Convention. These events provide opportunities to strengthen existing friendships, plus open the door to new friendships and sources of knowledge. As you know, the 2020 IBA Annual Washington Trip has been moved from September to July because of the legislative calendar. This year’s trip is set for July 26-28, which means that the time is now to clear your calendar and start making travel arrangements. When visiting bankers, I have been asked if the time and money traveling to DC is really worth it. I admit that it can be hard to measure the direct benefit of any single trip to DC, so instead I encourage you to consider how much time and money your bank spends complying with regulations. Engaging with our legislators and regulators on the state and national levels is our only opportunity to affect those regulations with which we have to comply. Lucas White Chairman Indiana Bankers Association President The Fountain Trust Company, Covington @LucasNWhite CHAIRMAN’S REPORT NOTABLE QUOTES Bank Community Service on Twitter Citizens State Bank • @CSB_Indiana • Jan. 17 Our Knightstown office is off to a great start w/their food drive collection! Feel free to help us support the food pantry at the Knightstown United Methodist Church! 1st Source Bank • @1stSourceBank • Jan. 13 We love seeing our team members get out to support our community! This group took some time on Friday to serve lunch at the Benton Harbor Soup Kitchen. Thank you for showing #communityleadership! Republic Bank • @RepublicBank • Jan. 2 A team of Republic Bank associates ‘wrapped up’ the holiday season by volunteering with the Angel Tree project to help deliver gifts! We are excited to have such compassionate associates who work to make an #IMPACT in their communities. What a great way to close out the year! Merchants Bank of Indiana • @MerchantsBankIN • Dec. 27 Shoutout to our employees and customers for collecting hundreds of pounds of blankets, food, gloves, clothes and monetary donations for @horizonhousein. Programs offered at Horizon House provide help to 225 Indianapolis neighbors per day to build more stable, secure lives. Centier Bank • @CentierBank • Dec. 18 Centier is proud to support the @AmericanCancer once again, by giving $30,000, as well as participating in multiple Relay for Life and Making Strides events throughout Indiana! Each year our Associates come together to walk and raise funds for each county event. #commUNITYbanking Follow IBA Twitter @indianabankers I promise you that making the trip every year, or even twice a year, will pay dividends in the long run. An important but immeasurable part of having a voice in how laws and regulations are created is forming relationships with legislators and their staff members, so they will know to call you when a banking issue arises. Those relationships can only be formed by traveling to DC time and again and contacting our legislators and their staffs throughout the year. If you’re still not convinced to go on the Washington trip, I offer you a good old-fashioned guilt trip. Please consider how much water there is to carry, and how unfair it is to ask your neighbor to carry your water every time. So if you have never been on the DC trip, please join us this summer. And if you’re already a DC trip regular, see you in July! HB
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Hoosier Banker 9 View full calendar and register online at indiana.bank/calendar, 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 ONLINE Build knowledge via webinars or on-demand. CLASSROOM Learn with peers in a classroom setting. SCHOOLS Deepen understanding through multi-day learning. EVENTS Experience a variety of IBA gatherings. CONFERENCES Convene and connect at signature IBA events. Calendar of Events CALENDAR UPDATE Human Resource Director Forum March 17 • IBA Center Risk Management Forum March 19 • IBA Center Compliance Management School March 19-20 • IBA Center Training the Credit Analyst March 23-24 • IBA Center Cybersecurity Seminar April 2 • IBA Center Consumer Lending School April 7-6 • IBA Center Branch Management Series: Session 2 - Leading, Developing, and Engaging the Team April 14 • IBA Center 2020 Essentials of Banking: Session 1 - Banking 101 April 15 • IBA Center Universal Banker Certification Program April 16-17 • IBA Center Certified Teller Program - Essential Teller Issues April 20 • Huntingburg Event Center April 21 • DoubleTree by Hilton • Lafayette East April 22 • Indiana Wesleyan University • Fort Wayne April 23 • The Sherman • Batesville Digital and Social Strategy Bootcamp April 21 • IBA Center Breaking Into Banking April 28 • IBA Center Auditing Real Estate Loans April 28-30 • IBA Center Auditing Mortgage Loans April 28 • IBA Center CBC Series - Session 2 May 5 • IBA Center May 6 • IBA Center May 7 • Indiana Wesleyan University • Fort Wayne Retail Banking Forum May 6 • IBA Center BSA Officer Forum May 7 • IBA Center Mega Conference May 12-14 • Indiana Convention Center • Indianapolis Commercial Lending School June 1-5 • IBA Center Real Estate Evaluations 101 - Supporting the Value June 2 • IBA Center HMDA Seminar June 9 • IBA Center Real Estate Lending Compliance June 10 • IBA Center Senior Lender Forum June 10 • IBA Center • Group 1 June 11 • IBA Center • Group 2 BSA/AML Compliance School June 16-17 • IBA Center Essentials of Banking: Session 2 - Business Operations and Management June 18 • IBA Center CFO Forum June 18 • IBA Center • Group 1 June 19 • IBA Center • Group 2 Marketing Forum June 23 • IBA Center IT Forum June 24 • IBA Center • Group 1 June 25 • IBA Center • Group 2 HR Forum July 14 • IBA Center Treasury Management: A Powerful Tool to Increase Deposits and Fee Income July 22 • IBA Center Annual Washington Trip July 26-28 • The Willard InterContinental • Washington, D.C. Stepping Up to Supervisor July 30 • IBA Center CBC Series - Session 3 Aug. 11 • IBA Center Aug. 12 • IBA Center Aug. 13 • Indiana Wesleyan University • Fort Wayne Security Officer Forum Aug. 13 • IBA Center Branch Management Series – Session 3 Aug. 18 • IBA Center Essentials of Banking: Session 3 - Lending, Bank Investments and Bank Performance Aug. 19 • IBA Center Community Reinvestment Act Seminar Aug. 19 • IBA Center Compliance for Loan Processors Aug. 20 • IBA Center FLD Leadership Conference Aug. 27-28 • The Westin Indianapolis Annual Convention Sept. 13-15 • French Lick Resort
10 MARCH / APRIL 2020 COVER STORY Proudly Presenting The 2020 IBA Board of Directors The Indiana Bankers Association has been thriving in several measurable categories: advocacy successes, education/ event attendance, relations with service providers, communications outreach and notable financial strength. Additionally, the IBA has been marking achievements in all areas of its ambitious strategic plan. This positive standing is possible due to the sound guidance of the IBA Board of Directors, which acts as the governing body of the Association. To ensure continued success in bringing top talent to the board in the scenario of fewer future bank members due to mergers and acquisitions, effective Jan. 1 the board has been reconfigured. Its current membership consists of 17 members instead of the prior number of 21 board members. The 17 members of the 2020 IBA board are: three elected officers; the immediate past chairman; the Association president/CEO; two national association representatives; the president of the IBA Future Leadership Division; one non-Indiana headquartered bank director; two at-large directors; and six regional directors. Previously the IBA assigned four regions in the state, with three directors assigned to each. Currently there are two regions – north and south – with three directors each. New to the board in 2020 are two at-large directors, whose presence helps to compensate for fewer region-specific directors. This arrangement gives flexibility in filling board posts to alleviate the challenge of selecting directors from a shrinking market. The functions of the IBA board remain the same as before: to develop IBA policy and to establish longrange goals and objectives. Importantly, the board also helps determine IBA’s legislative programs and positions on banking-related issues. The IBA board acts with the same authority as the board of a bank or a corporation. An executive committee – composed of the chairman, first and second vice chairmen, immediate past chairman, Association president/CEO and two appointed directors – is authorized to act in lieu of the board between regular board meetings. Officers serve one-year terms and are elected by the membership at the IBA Annual Convention. Members of the board assumed their positions on Jan. 1. Following are the IBA officers for 2020: Lucas White Lucas White, IBA chairman, is president of The Fountain Trust Company, Covington. He joined the Lucas White leads the first board meeting of 2020 in January.
Hoosier Banker 11 bank in 1994 as a part-time teller. White serves as a director of the Independent Community Bankers of America and is the current chairman of the ICBA Bank Services Committee. He was honored as a Rising Star in Banking by the ICBA in 2012 and by BankBeat magazine in 2015. White has served the IBA as past president of the Future Leadership Division and on the IBA board in the capacity of first vice chairman, second vice chairman and FLD president. A practicing attorney, he earned a bachelor’s degree from Indiana University, a JD from the IU Maurer School of Law at Bloomington as Order of the Coif, and he has completed the Graduate School of Banking at the University of Wisconsin. Michael S. Zahn Michael S. Zahn, first vice chairman, is president and CEO of First Federal Savings Bank, Huntington. He joined the bank in 1996, and he was named president in 2005 and CEO in 2011. Zahn is a board member and past president of the Huntington University Foundation and a member of the board of directors of Huntington County Economic Development. Additionally, he is a past member of the board of trustees for Huntington University and past chair of the United Way of Huntington Capital Campaign, the Bowen Center, the Optimist Club, Parkview Huntington YMCA, Huntington County Junior Achievement, Huntington County Chamber of Commerce and Lime City Economic Development. Zahn has served the IBA as second vice chairman and northeast region director. He earned an undergraduate degree from Indiana University and an MBA from the University of Notre Dame. Garry D. Kleer Garry D. Kleer, second vice chairman, is chairman, president and CEO of First Bank Richmond. He also is chairman, president and CEO of Richmond Mutual Bancorporation. Kleer joined the bank in 1994 as vice president of commercial lending and was promoted in 2001 to president and CEO. His community involvement includes service on the boards of the Boys and Girls Club of Wayne County, Reid Health Foundation, Richmond Symphony Orchestra and Wayne County Foundation. He has been recognized with the Indiana University East Chancellor’s Medallion, Junior Achievement Business Hall of Fame, Richmond/Wayne County Distinguished Community Leader, and Boys and Girls Club Man and Youth Award. Kleer is a graduate of Indiana University, the Graduate School of Commercial Lending and the Stonier Graduate School of Banking. Andrew J. Briggs Andrew J. Briggs, immediate past chairman, is first senior vice president for business development of Farmers & Merchants State Bank, Archbold, Ohio. In this position, he is the highest-ranking banking officer in the state of Indiana for Farmers & Merchants. Additionally, Briggs serves on the boards of both Farmers & Merchants Bancorp and Farmers & Merchants State Bank. He previously held title as president and CEO of the Bank of Geneva since 1994 – the fifth generation of his family to lead the bank; Bank of Geneva merged with Farmers & Merchants State Bank effective Jan. 2, 2019. Briggs has more than 40 years of banking experience and is active on the following boards: Indiana State Museum, treasurer; Limberlost State Historic Site, corporate secretary; Northeast Indiana Regional Development Authority, director; Adams County Economic Development, treasurer; and Adams Public Library System, treasurer. Briggs was appointed in 2017 to the Indiana Board of Depositories by Gov. Eric J. Holcomb and in 2019 was honored as a Sagamore of the Wabash. He is past Mike Zahn mingles with bankers and service providers at the 2019 IBA Annual Convention. Continued on page 12. Garry Kleer chats with fellow attendees of the 2019 IBA Annual Convention. Andrew Briggs enjoys networking with banking peers at the 2019 IBA Annual Convention. Front Cover: Members of the IBA Board of Directors gather for a board meeting in January. Shown are: (seated from left) Mike Zahn, First Federal Savings Bank, Huntington; Amber Van Til, Indiana Bankers Association; Melodie Yarnell, Jackson County Bank; Lucas White, The Fountain Trust Company; and (standing from left) Garry Kleer, First Bank Richmond; Arden Cramer, Logansport Savings Bank; Mike Bauer, WesBanco Bank; Andrew Briggs, Farmers & Merchants State Bank; John Kennedy, Greenfield Banking Company; Tim Massey, BMO Harris Bank; Jamie Shinabarger, Springs Valley Bank & Trust Company; Joe Carlson, Community State Bank, Royal Center; and Jeff Gump, Farmers and Merchants Bank, Laotto. Not pictured are Mike Head, First Federal Savings Bank, Evansville; Ben Bochnowski, Peoples Bank, Munster; Greg Inman, Scottsburg Building and Loan Association; and Mike Rechin, First Merchants Bank.
12 MARCH / APRIL 2020 Robert H. McKinney School of Law, has completed the Lacy Leadership LEAD program and the Graduate School of Banking at the University of Wisconsin, and has earned a certificate of executive leadership from the UW Wisconsin School of Business. HB president of the Geneva Town Council, past treasurer of the Northeast Indiana Regional Partnership, and he has served on the IBA board as chairman, first and second vice chairman, and northeast region director. Briggs is a graduate of Ball State University, a member of the IBA 40 Year Club and a Sagamore of the Wabash. Amber R. Van Til Amber R. Van Til is president and CEO of the Indiana Bankers Association. Additionally, she is an IBA Health Insurance trustee. Van Til joined the Association in 2002 as a lobbyist and has served the IBA as vice president-government relations, senior vice president-government relations, executive vice president and president before being named president and CEO in 2017. She is a member of the American Bankers Association Community Bankers Council, a member of the ABA State Association Alliance executive committee, a trustee of the Graduate School of Banking at the University of Wisconsin and of the Herbert V. Prochnow Educational Foundation, a member of the boards of directors of Indiana Fiscal Policy Institute and Indiana Legal Foundation, and a member of the Governmental Affairs Society of Indiana, The Columbia Club and the Indiana Society of Association Executives. Van Til also has served on the Interim Study Committee on Mortgage Lending Practices and Home Loan Foreclosures, Indiana Foreclosure Prevention Network, Indiana’s Hardest Hit Fund and the Indiana Statewide Certified Development Corporation. She was honored in 2015 as Association Professional of the Year by the Indiana Society of Association Executives, and in 2008 she won in the category of Banking & Financial Services for the Best & Brightest awards, sponsored by Junior Achievement of Central Indiana Inc. Van Til is a graduate of the University of Indianapolis and of the Indiana University IBA board members review their notes at the meeting preceding the IBA Legislative Briefing and Reception. Amber Van Til serves on a panel discussion at the 2019 FLD Day at the Statehouse event. HB Digital: Click to view biographies of all IBA board members, or visit indiana.bank/about The Indiana Bankers Association thanks four members of the 2019 board whose terms expired Dec 31. Their service on the board has helped the IBA grow and prosper: Kirby D. Drey, Kentland Bank Clay W. Ewing, German American Bank, Jasper Matthew W. Howrey, North Salem State Bank Karen B. Woods, First Financial Bank, Cincinnati Thank You, Retired Board Members
Hoosier Banker 13 IBA Officers Regional Directors Constituent Directors Chairman Lucas White The Fountain Trust Company, Covington First Vice Chairman Michael S. Zahn First Federal Savings Bank, Huntington Second Vice Chairman Garry D. Kleer First Bank Richmond Immediate Past Chairman Andrew J. Briggs Farmers & Merchants State Bank, Archbold, Ohio President and CEO Amber R. Van Til Indiana Bankers Association ABA Membership Council Michael K. Bauer WesBanco Bank, Wheeling, WV ICBA State Director Michael H. Head First Federal Savings Bank, Evansville Non-Indiana Headquartered Bank Director Tim Massey BMO Harris Bank, Chicago Future Leadership Division President Melodie K. Yarnell Jackson County Bank, Seymour North Region Benjamin J. Bochnowski Peoples Bank, Munster North Region Joseph D. Carlson Community State Bank, Royal Center At-Large Arden L. Cramer Logansport Savings Bank North Region Jeffrey W. Gump Farmers and Merchants Bank, Laotto South Region Gregory Inman Scottsburg Building and Loan Association South Region John M. Kennedy Greenfield Banking Company At-Large Michael C. Rechin First Merchants Bank, Muncie South Region Jamie R. Shinabarger Springs Valley Bank & Trust Company, Jasper At-Large Directors IBA Board of Directors
14 MARCH / APRIL 2020 Legislative Day 2020 Bankers converge for grassroots event ARTICLE SPOTLIGHT
Hoosier Banker 15 More than 150 bankers attended the 2020 Legislative Briefing and Reception hosted by the Indiana Bankers Association at the Hyatt Regency Indianapolis. These bankers came together with 64 legislators for the opportunity to network with one another and discuss legislation that will impact the banking industry before the General Assembly. 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. The guest speaker was Director Tom Fite of the Indiana Department of Financial Institutions, who shared an industry update along with a report from his department. That afternoon the IBA Government Relations Team met with the GR Committee for an in-depth review of a comprehensive list of bills that could impact banking. This annual meeting provides for productive two-way conversation, with bankers encouraged to provide feedback to the GR team. The next event was the Legislative Briefing, during which the IBA GR team provided details regarding several pieces of legislation: • Senate Bill 50 - Various Trust and Probate Issues • Senate Bill 92 - Private Sector Retirement Savings Program • Senate Bill 327 - Reporting of Consumer Loans by Unlicensed Lenders • Senate Bill 395 - Uniform Consumer Credit Code • Senate Bill 407 - Consumer Credit Transactions • Senate Bill 417 - Insurance Proceeds Held by a Mortgagee • Senate Bill 444 - Public Deposits with Credit Unions • House Bill 1085 - Delinquent Sewer Fees • House Bill 1109 - Telephone Solicitation and Consumer Credit • House Bill 1353 - Financial Institutions and Consumer Credit • House Bill 1409 - Credit Reporting for Consumers and Medical Care Following the GR team discussion was a presentation of awards by IBA Chairman Lucas White to honor those banks that are strong supporters of Indiana BANKPAC. A total of 21 banks were recognized with the BANKPAC 200% Club award. Additionally, Chairman White presented awards to two banks for Most Dollars Raised and Highest Percentage of Fair Share Raised. The IBA appreciates the generosity of members in supporting the PAC. Afterward, the Indiana Week in Review panel presented a comprehensive discussion of issues being considered at the Statehouse that reach beyond the financial services industry. Topics included teacher pay, how to spend the state’s tax surplus, legal smoking age, healthcare costs and the upcoming elections, to name a few. The panel offered a closer look at the politics driving legislative efforts at the Statehouse. The evening culminated with the Legislative Reception, during which IBA members had the chance to visit with their Indiana representatives, senators and other elected officials. The annual IBA Legislative Day serves as the start to several grassroots advocacy opportunities throughout the year that give a voice to Indiana bankers. Other advocacy events include the Future Leadership Division Day at the Statehouse; regional meetings; and the IBA Annual Washington Trip, scheduled this year for July 26-28. Please plan to join us at these grassroots events. HB Dax Denton Senior Vice PresidentGovernment Relations Indiana Bankers Association ddenton@indiana.bank @ibagovrelations Eric J. Augustus Vice President-Government Relations Indiana Bankers Association eaugustus@indiana.bank
16 MARCH / APRIL 2020 ARTICLE SPOTLIGHT LEGISLATIVE DAY GALLERY
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18 MARCH / APRIL 2020 FEATURE Credit Union Acquisitions Policymakers right to question this trend Federal Deposit Insurance Corp. Chairman Jelena McWilliams recently told Congress that she is concerned that local communities are losing access to banking services due to the growing trend of large credit unions buying smaller community banks. With the growing number of acquisitions and recently the biggest credit union bank buyout yet, McWilliams’ concerns are completely justified and must be further explored by Congress. Unlevel Playing Field Responding to questions from members of the House Financial Services Committee, McWilliams noted that credit unions are fully exempt from federal taxes and the Community Reinvestment Act, which apply to locally based community banks, savings and loans, mutual savings banks, and virtually every other financial institution. Acquiring credit unions are 10 times larger on average than their target community banks, suggesting McWilliams uttered an understatement when she said the “playing field might not be exactly level.” The National Credit Union Administration’s newly proposed rule to implement a regulatory framework for these transactions indicates that policymakers have begun paying attention to this troubling acquisition trend, but it is up to Congress to truly address the problem. Exploiting Taxpayers With tax-exempt credit union bank purchases reaching 21 in 2019 following nine deals announced in 2018, credit unions certainly appear to be putting their $2 billion annual taxpayer subsidy to use. Unfortunately for the people of modest means that credit unions were established by Congress to serve, no one appears to be benefiting more from the tax exemption than credit unions themselves. It’s long overdue for Congress to hold a hearing examining what exactly credit unions are now doing with their multibillion-dollar tax subsidy. Credit unions withhold 21 to 33 cents of every dollar in tax subsidies they receive, according to a research paper developed by the Independent Community Bankers of America. In 2018, that amounted to between $500 million and $900 million in taxpayer dollars not directed toward credit union members. Abandoned Mission Meanwhile, credit unions have significantly deviated from their founding mandate to serve people of modest means. Today, less than 10% of credit unions are physically located in an economically distressed community, and only 13% are in low- and moderate-income areas, according to ICBA research. Low-income individuals are more likely to receive services from a tax-paying community bank in 28 states. In low-income or distressed communities, community banks – which contributed nearly $15 billion in tax revenue in 2018 – outnumber credit unions by a 2-1 margin. While traditional credit unions are declining, larger credit unions account for more of the tax burden. In 2017 credit unions over $1 billion comprised 6% of the industry, but 75% of its tax exemption. And growth-obsessed credit unions are increasingly taking on riskier activities, such as loans for “toys” such as boats, jet skis and recreational vehicles. Rebeca Romero Rainey President and CEO Independent Community Bankers of America @romerorainey
Hoosier Banker 19 Other projects – such as Pentagon Federal Credit Union’s partnership with Goldman Sachs on luxury mixed-use developments in the nation’s capital – don’t reflect the traditional credit union mission, either. Perhaps most egregious of all, irresponsible lending related to New York City taxi medallions dominated by half a dozen credit unions led to financial ruin for thousands of families and an estimated $765.5 million in losses to the NCUA’s Share Insurance Fund. Lax Oversight The NCUA itself has had a considerable role in the credit union industry’s evolution as it continues finding new ways to increase the powers of the industry it is charged with regulating. In fact, its latest proposal would allow the most complex credit unions to issue subordinated debt as an alternative form of capital, which would allow outside investors to exploit the credit union tax subsidy and could encourage even more community bank acquisitions by larger credit unions. The NCUA also recently proposed a second delay in implementing rules requiring credit unions to hold adequate capital to protect against losses, more than a decade after the Wall Street financial crisis. In his dissent, NCUA board member Todd Harper asked if the agency is forgetting the past repeatedly, “just like characters in ‘Groundhog Day.’” Further, the NCUA has reissued a proposed rule that would allow credit unions to include wealthy suburbs of metropolitan areas in their fields of membership while leaving out their urban cores. That came after the U.S. Court of Appeals for the District of Columbia Circuit ordered the agency to explain how its plan would prevent redlining. While the NCUA claims legal protections will prevent illegal discrimination, the agency’s 25 yearly on-site compliance and lending exams are insufficient for an industry that serves 117 million members. Wake Up The credit union tax exemption dates to 1934, when Congress chartered credit unions as not-for-profit institutions to serve people of modest means with a “common bond” of occupation or association. Today, large credit unions are virtually indistinguishable from tax-paying community and regional banks. The $1.51 trillion industry now earns billions of dollars in profits every quarter and features outsized CEO salaries while remaining tax-exempt. Congress should wake up to this growing list of concerns. It wouldn’t be the first time that lawmakers reconsidered a tax break for the financial sector. In 1951 Congress revoked the tax exemption for building and loan associations, cooperative banks and mutual savings banks. Policymakers ruled that these institutions operated much like commercial banks and should be taxed accordingly, and the rest is history. With even credit union executives expressing concerns, now is the time for Congress to open its eyes to the need for credit union reforms and take action. HB CINNAIRE.COM To bring meaningful transformation to a community you need to be part of the community. Know the people. Understand their needs. Create a shared vision. And deliver capital, development capacity and trusted partnerships. Over 25 years, we’ve delivered more than $7.3 billion in community impact. And our commitment to creating healthy communities has never wavered. The Return on Investment: Safe, Affordable Homes. Healthy Communities. Better Lives. INVESTING IN INDIANA COMMUNITIES FOR MORE THAN 25 YEARS. Transforming Communities. Transforming Lives.
20 MARCH / APRIL 2020 FEATURE Elder Fraud Seeing, saying and doing something about it Odds are your bank has a story that illustrates a disturbing trend affecting older Americans today. Perhaps one of your tellers noticed a regular customer suddenly showing up at the bank with a new “best friend.” Or staff detected unusual activity in an elderly customer’s account, such as large withdrawals or unpaid bills. These are two of several red flags that can signal elder financial abuse, and banks are increasingly noticing – and reporting – such cases. According to a FinCEN analysis released in December, suspicious activity reports related to elder financial exploitation have increased dramatically in recent years, jumping from 2,000 filings in October 2013 to nearly 7,500 filings in August 2019. A Consumer Financial Protection Bureau report issued in February 2019 offers similar statistics and adds that 80% of SARs related to elder financial exploitation involved a monetary loss to older adults and/or the institution that filed. The average loss for customers was $34,200, while the average loss to institutions filing was $16,700. As disheartening as this sounds, there’s actually some positive news amid all the data surrounding elder financial fraud. The American Bankers Association Foundation has documented that good news in its 2019 Older Americans Benchmarking Report. The biennial report shows that banks are going well beyond the “see something, say something” threat mantra and are proactively working to educate and protect their older customers. It found, for example, that the vast majority (90%) of respondent banks now require additional, specialized training for frontline staff. That’s up from 71% in 2017. It also found that more banks are reporting suspected elder abuse and fraud to Adult Protective Services, with 81% of survey respondents listing that as standard procedure, up from 62% in 2017. And more than 60% report they now have at least one employee specifically designated to lead efforts on elder financial abuse and fraud prevention. Banks aren’t just focused on spotting and reporting fraud. They’re also increasingly preventing it by teaching seniors in their communities the art of self-defense. One banker shared how her institution created fraud packets with brief brochures and “scam cards” to educate older customers on schemes and how to report them. Another said his institution developed a brochure for caregivers to help guide conversations on sensitive topics like developing a will or sending duplicate account statements for review. And half of the banks surveyed reported they offer in-branch training for older customers on new banking technologies, such as online or mobile banking. In addition to protecting one of our country’s most vulnerable populations, these efforts demonstrate banks’ commitment to their customers and communities and reflects well on the industry. That’s why I’m making sure policymakers are aware of all that banks are doing. It’s also why I’m encouraging more banks to join the fight. With 10,000 baby boomers turning 65 every day (a trend that will last until 2030), and with older Americans holding 70% of deposit balances in the U.S., the elder financial fraud threat is bound to get worse before it gets better. The more that bankers are engaged in countermeasures, from educational efforts to fraud monitoring and partnerships with APS, the better off our customers and communities will be. For those banks that have room to start or grow their efforts in this area, I offer three simple steps: 1. Read the Older Americans Benchmarking Report. It tells you what banks in your asset range are doing and spotlights innovative programs. 2. Sign up for Safe Banking for Seniors. This ABA Foundation program provides turnkey presentation materials and resources for bankers to use with seniors and caregivers. Robert S. Nichols President and CEO American Bankers Association nichols@aba.com @BankersPrez
Hoosier Banker 21 3. Enroll in FinEdLink. This is a relatively new service from the foundation that allows us to pair banks with community groups or schools that are interested in having a banker present on ageappropriate personal finance topics, including senior fraud prevention. Paul Witte, senior vice president, commercial lending manager for First Bank Richmond, has been named chairman of the board of the Wayne County Area Chamber of Commerce. He previously served as treasurer and vice chair. Witte began his financial services career in 1996; was named president and CEO of First Federal Leasing, a division of First Bank Richmond, in 2006; and assumed his current bank role in 2014. A graduate of Ball State University, Witte attended the Graduate School of Banking at the University of Wisconsin and completed the GSB Financial Managers School. Mark Hardwick, executive vice president, chief operating officer and chief financial officer of First Merchants Corporation, Muncie, has been appointed to the Ball State University board of trustees. He joined First Merchants Bank in 1997 and was promoted to vice president in 2000, CFO in 2002 and COO in 2016. A graduate of Ball State University, Hardwick played basketball for the Cardinals. Kyle Raugh, security officer at First Bank of Berne, has been awarded the certified fraud examiner credential by the Association of Certified Fraud Examiners. Brianne Marshall, financial advisory group operations specialist at Springs Valley Bank & Trust Company, French Lick, has earned certification as an accredited trust operations professional. Marshall joined the bank in 2015 as an eBanking specialist and the financial advisory group in 2017. Merchants Bank of Indiana, Carmel, was honored in December with the OneZone Business of the Year award in the category of large business. The bank was recognized for success in operating multiple lines of business, mortgage warehouse financing, retail and correspondent residential mortgage banking, agricultural lending and traditional community banking. The U.S. Small Business Administration honored local lenders in 2019 for their work with small businesses at the annual SBA Indiana Lenders Forum & Awards Luncheon last December. Awards were presented to the following members of the Indiana Bankers Association: 1st Source Bank – Community Lender Gold; Rural Lender Centier Bank – Community Lender Bronze Fifth Third Bank – Regional Lender Bronze First Merchants Bank – Community Lender Silver; Third Party Lender Huntington National Bank – Regional Lender Gold Indiana Statewide CDC – 504 CDC Lender of the Year (dollar volume of approved loans) All of these resources are free and available at aba.com/Seniors. Take advantage of these resources so that fewer crooks will take advantage of your customers. As one banker in our survey said, the older generation wants so badly to leave a legacy and remain self-sufficient, but they also are so trusting they don’t always see a scam for what it is. “That’s where our role as bankers is so critical as we … help them navigate these difficult situations to ensure their legacies and livelihoods are protected.” HB Premier Capital – 504 CDC Lender of the Year (number of approved loans) Several IBA-member banks and associate members were recognized as being among the top publicly traded banks in the United States, per the Forbes 2020 list of “America’s Best Banks” published in January. The selection is based on a series of metrics that include growth, profitability and asset quality: No. 5 – First Merchants Corporation, Muncie No. 7 – WesBanco Inc., Wheeling, West Virginia No. 32 – First Financial Bank, Cincinnati No. 43 – Chase Bank, New York No. 58 – Old National Bancorp, Evansville No. 61 – Fifth Third Bank, Cincinnati No. 63 – U.S. Bancorp, Minneapolis No. 72 – Bank of America, Chicago No. 74 – BOK Financial Institutional Advisors, Milwaukee No. 78 – Huntington National Bank, Columbus No. 86 – Flagstar Bancorp Inc., Troy, Michigan No. 87 – PNC Financial Services, Pittsburgh No. 88 – Associated Banc-Corp, Green Bay, Wisconsin No. 89 – Wells Fargo, San Francisco No. 91 – Regions Financial Corporation, Birmingham, Alabama HB HONORABLE MENTIONS
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