HB HOOSIER BANKER MAGAZINE indiana.bank PLUS! Effective Advocacy JULY / AUGUST 2020 College-Level Banking Studies For next-generation bankers
The Indiana Bankers Association is honoring 10 members of the Indiana banking community with the third annual IBA Leaders in Banking Excellence awards, to be presented at a special ceremony in December in Indianapolis. This award celebrates exceptional Indiana banking leaders who have positively impacted banks and the communities they serve. Details about the awards ceremony are forthcoming in a future edition of Hoosier Banker. The 2020 Leaders in Banking Excellence represent a range of current and retired leaders in banking. All were nominated by IBA members and approved by the IBA Board of Directors. Congratulations to the 2020 class of IBA Leaders in Banking Excellence At the awards event, Indiana dignitaries from private and public sectors will be making presentations, and honorees will have the opportunity to offer comments. Additionally, participants will be invited to visit the IBA offices to view the IBA Leaders in Banking Excellence wall, with individual plaques showcasing each honoree. The wall plaques are to remain on permanent display at the IBA, and each honoree will be given a separate plaque as a keepsake. IBA Honors 2020 Class of Leaders in Banking Excellence For more information about the awards, please contact Rod Lasley at 317-387-9380, rlasley@indiana.bank. George L. Allison Owen County State Bank Spencer Craig M. Dwight Horizon Bank Michigan City Clay W. Ewing German American Bank Jasper William W. Harrod First Harrison Bank Corydon Charles E. Isch First Bank of Berne Gene E. Miles First Farmers Bank & Trust Converse Larry W. Myers First Savings Bank Clarksville Ryan M. Warner Bippus State Bank Huntington David G. Wihebrink Logansport Savings Bank John W. Tanselle SmithAmundsen LLC Indianapolis
DIRECTORS & STAFF HOOSIER BANKER MAGAZINE indiana.bank 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 .....................................................................................Terre Haute Savings Bank Gavin Fisher ............................................................... Community First Bank of Indiana, Kokomo Nashelle Frazier .............................................................................Old National Bank, Evansville 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 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. Material published in Hoosier Banker and on the IBA website is the property of the IBA. All rights reserved. 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. 4
Hoosier Banker 5 CONTENTS 10 COVER STORY College-Level Banking Studies Emily Brooks, IBA 14 ARTICLE SPOTLIGHT Effective Advocacy Dax Denton and Eric 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 24 New IBA Officer Candidates 2021 42 Coronavirus Strikes Robert S. Nichols, ABA 44 Do Today for Tomorrow Rebeca Romero Rainey, ICBA HUMAN RESOURCES 16 Pregnancy Discrimination Debra A. Mastrian, SmithAmundsen LLC INDIANA BANK & THRIFT STOCK UPDATE 18 Stock Analysis Michael A. Renninger, Renninger & Associates LLC COMPLIANCE CONNECTION 20 Garnishing Wages Brett J. Ashton, Krieg DeVault LLP FLD FOCUS 22 FLD Adapts to Socializing Josh Myers, IBA PSP SHOWCASE 26 The Bank Branch Experience Jeff Klump, K4 Architecture + Design PRODUCTS & SERVICES PROFILE 28 Health Care Coverage Rod Lasley, IBA FINANCIAL MANAGEMENT 30 Interest Rate Risk Doesn't Do Quarantines Lester Murray, The Baker Group AG BANKING 32 Increased Risk in Agricultural Lending Brady Brewer, Purdue University LENDING & CREDIT 36 Financial Recovery Planning Patrick B. Gilbert, BKD CPAs & Advisors DIRECTORS / SENIOR MANAGEMENT 38 Lessons Learned From the Great Recession Charlie Crowley, Chris Chapman and Chad Hull, Boenning & Scattergood Inc. OPERATIONS / TECHNOLOGY 40 Guarding Against Virtual Viruses Robert Mendez, BankOnIT CLOSING NOTE 54 Positive PPP Loan Stories DEPARTMENTS 15 Banking Center News 23 From the Board Room 27 Anniversary Milestone 31 #OpenToServe Video 33 Banking on Community 46 Associate Members’ Corner 48 Honorable Mentions 50 Bankers on the Move 53 Advertisers Index 10 14 22 In This Issue On the cover: Abdulrahman Rana attended a Financial Reporting class at Purdue University Northwest before graduating in May.
6 JULY / AUGUST 2020 One of the first lessons new drivers learn is to check the mirrors and adjust as needed for maximum visibility. Good drivers quickly develop the habit of routinely checking the mirrors, especially when facing challenging conditions such as rain, fog and nightfall. We are now experiencing challenging conditions on every front. As always, bankers continue to drive on forward, keeping in view the statistics, regulations and other data points needed to make informed decisions. It’s dizzying how much has happened since the last edition of Hoosier Banker. The previous Vantage Viewpoint was published in early May, when the world was deeply embroiled in the COVID-19 pandemic. Those who could work from home did so, and banks limited lobby access. Also at that time, Round Two of the Paycheck Protection Program had just begun, infusing another $300 billion into loan funds on top of the first round of $350 billion. In part because of revised guidance from the Small Business Administration, Round Two loan applications moved at a much slower pace than the first round. Within the Indiana Bankers Association, we followed pandemic guidelines and removed in-person events from the immediate calendar. Seminars and other offerings on premise were either rescheduled or converted to online gatherings. The Mega Conference, for the first time since its inception in 1992, was postponed. That was then. Take a look at where we are today. By the time you are reading this, Indiana is scheduled to be in the final phase of Gov. Holcomb’s Back on Track plan. Much thought and consideration, with input sought from multiple constituencies, went into drafting the roadmap for reopening Indiana successfully. We appreciate that the Indiana banking community was ably represented by Kristin Marcuccilli of STAR Bank, Fort Wayne, who served on the governor’s advisory team. We also have more recent Paycheck Protection Program statistics. Per SBA data available on June 27, Indiana banks assisted in completing 77,872 loans totaling $9,457,392,872 for Hoosier small businesses. Indiana bankers worked long and hard to process a huge volume of PPP loan applications, sometimes working through the night. Additionally since the last Hoosier Banker, our nation has received a favorable jobs report, despite the economic strain of the pandemic. The U.S. Bureau of Labor Statistics reported that total nonfarm payroll employment rose by 2.5 million in May, and the unemployment rate dropped to 13.3%. Though more progress is needed, we are moving in the right direction. A major change in our world since two months ago is that, worldwide, we are now experiencing heightened racial awareness. Multiple VANTAGE VIEWPOINT Don’t Miss Out! factors and events coalesced into an eruption of demonstrations around the globe advocating for justice and harmony. The situation is complex, but the message is clear. Issues of diversity and equity need to be seen and heard. Today, compared to two months ago, we collectively have greater empathy, increased understanding and a new resolve to seek and implement meaningful solutions. This is a topic we will be addressing for some time. Meantime on the IBA homefront, we are adapting to our new reality. Though we had to cancel the summertime in-person advocacy events – Regional Meetings and the Annual Washington Trip – the good news is that, for 2020, advocacy will carry on through virtual channels such as Zoom meetings. Our spotlight article on page 14 gives details about grassroots advocacy, with additional information being emailed regularly to grassroots bankers. We appreciate your advocacy support and urge you to continue to engage as the pandemic winds down. Some additional IBA news is that we are transforming this year’s Mega Conference and Annual Convention into a merged event called the “Mega Convention.” Scheduled for Nov. 16-18 in Indianapolis, this blockbuster gathering will combine the educational offerings of Mega with the official business of Convention. The future is coming, and we are ready. The cover story of this issue attests to partnerships between the IBA and institutions of higher learning to create banking studies programs in Indiana. This initiative is designed to bring future best-and-brightest talent to your bank. In the last issue, I thanked you for being helpers to the communities you serve. I’d also like to thank you for being the drivers of economic strength, leading Indiana into better days ahead. HB Amber R. Van Til President and CEO Indiana Bankers Association avantil@indiana.bank @grbanker FLD Leadership Conference Aug. 27-28 Emerging leaders build skills and strengthen networks at this premier FLD event. Banking on Women Conference Oct. 22-23 Women in banking gather to unlock potential and own the future. Mega Convention – New for 2020 Nov. 16-18 This year the IBA is combining the Mega Conference with the Annual Convention. For event updates, visit: indiana.bank/calendar
Hoosier Banker 7 While community banks have been busy the last few months processing Paycheck Protection Program loan applications to help their customers and communities, Crane Credit Union has been busy negotiating a deal to buy an Indiana bank. CCU is not listed on the Small Business Administration website as a PPP lender. Apparently its priority was growing larger and converting taxpaying assets to non-taxpaying assets, instead of helping small business through the COVID-19 crisis. Or perhaps the 1% interest rate on PPP loans was not enough profit for the tax-exempt credit union. Is that really the type of institution that should be buying banks? Throughout the PPP process, the country witnessed banks serving their customers and communities better than any other type of lender. The banking community stepped up and helped small business customers when they needed it most. Credit unions claim to be more customer-oriented than banks, but they are not subject to the Community Reinvestment Act requirements that banks are. The poor turnout of credit union assistance with PPP loan applications is further proof that they do not support communities like banks do. According to the SBA, through June 27 banks under $1 billion originated $84,644,341,288 of PPP loans, while credit unions under $1 billion originated $2,986,484,375 of PPP loans. That’s an astounding difference. The credit union industry says it’s consumer-focused, not businessfocused. Then why are credit unions desperately trying to expand their business lending authority and buying commercial banks? If credit unions are not banks, and don’t want to be banks, then they should not be buying banks. When banks are in a position to sell, the credit union tax exemption allows them to offer the highest price, and bank directors feel obligated to accept the highest price for their shareholders. Unfortunately, these sales hurt communities. In the sale of a taxpaying bank to a non-taxpaying credit union, the community loses valuable tax dollars used to support essential services and local projects. Then, to avoid lower tax revenues in the future, taxes are raised on the remaining taxpayers. Communities also lose when a bank is sold to a credit union by missing out on the additional support and service that banks provide. This is the third bank in Indiana to sell to a credit union within the last year. Six Indiana banks have been sold in the last year, meaning that half have been sold to credit unions. How many more of these transactions will there be before laws are changed? We need laws that prohibit credit union acquisitions of banks or laws that level the playing field between banks and credit unions when it comes to buying a bank. Furthermore, credit unions can buy mutual banks, and banks cannot. How is it possible that our laws allow credit unions to buy more types of financial institutions than banks can buy? Tax-exempt credit unions continue to accelerate their purchase of taxpaying banks, expand their business lending authority, weaken their membership rules, and act like banks. It is time to stop credit union creep. If a credit union wants to buy a bank, let it become a bank, be taxed like a bank, and follow the same regulations as a bank. We need to stop the credit union poaching of our brethren. The Indiana Bankers Association, Independent Community Bankers of America and American Bankers Association all have grassroots portals on their websites. I would ask every member of the IBA to use those tools and reach out to legislators and regulators to speak up for change. As the government spends trillions of dollars in stimulus in response to COVID-19, we need more taxpaying banks, not bigger tax-exempt credit unions. HB CHAIRMAN’S REPORT Garrett State Bank • @GarrettStBank • May 12 We are honored to team up with Hometown Graphics - Print & Design to sponsor the yard signs they have made for each Garrett High School senior! Thank you, Cassie, for all your hard work. We as a community bank are so thankful to be able to recognize the seniors. STAR Financial Bank • @STARFinancial • May 1 Earlier this week Kingston Healthcare gifted lunch to the employees at our Fort Wayne service center. This morning we were so excited to gift 375 Degree Donuts and fruit to the Waynedale Majestic Care Facility. A special “THANK YOU” to essential workers and our local businesses. Crossroads Bank • @CrossroadsBank • April 29 Crossroads Bank has donated $50,000 in total to Wabash, Whitley, Kosciusko and Miami counties. These foundations are responding to the urgent community needs during the #COVID19 pandemic. We appreciate their work to get these funds dispersed. #BanksHelpingHoosiers #INthistogether Centier Bank • @CentierBank • April 23 Our hospital workers are our heroes! To show our gratitude and support, we sent Methodist Hospitals Northlake in Gary meals from Pappas Restaurant. Find out how you can support our frontline workers at Methodist Northlake: https://mealtrain.com/ trains/7ywdd1 Follow IBA Twitter @indianabankers NOTABLE QUOTES Bank Community Service on Twitter Lucas White Chairman Indiana Bankers Association President The Fountain Trust Company, Covington @LucasNWhite
8 JULY / AUGUST 2020 Your Community Bank Partner When it’s time for a redesign, turn to an expert 555 Gest Street Cincinnati, OH 45203 Contact Jack Neu at: Info@k4architecture.com 513-842-K4K4 We look forward to seeing you at the next IBA event! K4 Architecture+Design has helped community banks across the Midwest reimagine their buildings in ways that help grow business, integrate technology, and build a strong connection to the communities they serve. Please visit us at www.k4architecture.com.
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 Certified Teller Program - Essential Teller Issues July 20 • Huntingburg Event Center July 21 • DoubleTree By Hilton • Lafayette East July 22 • Indiana Wesleyan University • Fort Wayne July 23 • The Sherman • Batesville Compliance Management School July 21-22 • IBA Center Auditing Real Estate Loans July 23-24 • IBA Center Training the Credit Analyst July 28-29 • IBA Center Universal Banker Certification July 28-29 • IBA Center Stepping Up to Supervisor July 30 • IBA Center BSA/AML Compliance School Aug. 4-5 • IBA Center CBC Series - Session 3: The SAR, Cyber Events, Marijuana, HEMP and its Impacts Aug. 11 • IBA Center Aug. 12 • IBA Center Aug. 13 • Indiana Wesleyan University Fort Wayne Human Resource Directors Forum Aug. 13 • IBA Center Branch Management Series – Session 3: Growing the Retail Branch Aug. 18 • IBA Center Leadership Development Program - Session 1 Aug. 18-20 • Abe Martin Lodge • Nashville Essentials of Banking: Session 3 - Lending, Bank Investments and Bank Performance Aug. 19 • IBA Center Compliance for Loan Processors Aug. 20 • IBA Center Home Mortgage Disclosure Act Aug. 24 • IBA Center Bank Director Workshop Aug. 24 • The Landmark Conference Center • Fort Wayne Aug. 25 • IBA Center Aug. 26 • Sheraton Louisville Riverside Hotel • Jeffersonville FLD Leadership Conference Aug. 27-28 • The Westin Indianapolis Real Estate Evaluations 101: Supporting the Value Sept. 1 • IBA Center Advanced Agricultural Lending Conference Sept. 2-3 • DoubleTree by Hilton • Lafayette Call Report Sept. 2-3 • IBA Center Retail Banking Forum Sept. 9 • IBA Center Digital and Social Strategies Bootcamp Sept. 10 • IBA Center BSA Officer Forum Sept. 10 • IBA Center Advanced Credit Analyst School Sept. 16-17 • IBA Center TRID Refreshed Sept. 16-17 • IBA Center Mortgage Lending School Sept. 22-24 • IBA Center Consumer Lending School Sept. 29-30 • IBA Center Cybersecurity Conference Oct. 1-2 • Renaissance Hotel • Carmel IRA School Oct. 1-2 • IBA Center CBC Lending Compliance School Oct. 6-9 • IBA Center Senior Lender Forum Oct. 7 • IBA Center • Group 1 Oct. 8 • IBA Center • Group 2 Consumer Loan Documentation Oct. 13 • IBA Center BSA Fundamentals Oct. 13-14 • IBA Center Commercial Loan Documentation Oct. 14 • IBA Center Branch Management Series – Session 4 Oct. 15 • IBA Center Security Officer Forum Oct. 20 • IBA Center Banking on Women Conference Oct. 23-24 • Sheraton Indianapolis Hotel Mega Convention Nov. 16-18 • Indiana Convention Center Indianapolis Midwest Ag Banking School Nov. 30-Dec. 3 • Purdue University West Lafayette NOTE: Due to COVID-19, there may be changes to scheduling. For latest information about all IBA events, visit: indiana.bank/calendar
10 JULY / AUGUST 2020 COVER STORY College-Level Banking Studies For the next generation of bankers In the fall of last year, Purdue University Northwest officially became the first college in Indiana to implement a curriculum in banking. The curriculum was developed in partnership with the Indiana Bankers Association and several IBA-member banks as a way to combat the growing talent shortage in the banking industry. The idea of establishing banking studies in Indiana’s higher education institutions was first advocated by 2018 IBA Chairman Clay Ewing, president of German American Bank, Jasper. As Ewing said in a Hoosier Banker interview, this initiative was inspired by his own experience: “Ironically, I did not originally choose banking as a career path. When I graduated from college, we had a family business, but it wasn’t really what I wanted to do. My degree was in accounting, and I was interested in finding something along those lines.” After working in the accounting department of a food service company for a short time, Ewing secured a job at Citizens National Bank in his hometown of Tell City. “The aim [of the initiative] is to show young adults that banking is a wonderful career – it is rewarding personally, professionally and financially,” Ewing said. “The more exposure we can provide, the more we can bring in talent to help resolve the succession challenges that many community banks face.” After hearing about Ewing’s initiative at an IBA regional meeting in the summer of 2018, Anthony Contrucci, vice president of community and business development of Centier Bank, Merrillville, was eager to discuss the idea with Matthew Wells, a contact at Purdue University Northwest. What started as a casual conversation over coffee quickly turned into a serious meeting. Soon enough, other stakeholders such as college faculty, bankers and representatives of the IBA got involved to start developing the program. To Contrucci, engaging young people in the banking industry is of the utmost importance to the future of the industry. “I am a passionate community banker and want to ensure that hometown community banking is preserved for generations to come,” he said. “My hope is that these banking-focused programs will help to redefine our industry’s brand and create much-needed awareness around the opportunities that exist.” Within about 10 months, all the necessary groundwork had been laid to introduce the university’s brand-new banking concentration for the 2019-20 school year. “All said and done, it went rather smoothly,” said Wells, who serves as the executive director of strategic partnerships, engagement and legislative liaison at Purdue University Northwest. “It was a refreshing thing for us because in academia, we’re not exactly known for how quickly we move on things. We had a really core, committed group of faculty that was eager and open to work with folks from the banking industry to make sure that the curriculum aligned with what they needed.” The program started small, offering a banking Emily Brooks Member Engagement Specialist Indiana Bankers Association ebrooks@indiana.bank Banking Minors Building on the success of the banking concentration program, Ball State University and Purdue University Northwest are introducing banking minors this fall. Read more on page 13.
Hoosier Banker 11 concentration aimed at finance majors only, but is expanding to add a banking minor this fall that will be open to other majors. Joining Purdue University Northwest, Ball State University also plans to offer a banking minor this fall. Peymon Torabi, controller at Peoples Bank, Munster, taught the Financial Reporting class last spring at Purdue University Northwest. “So far the reaction has been tremendous,” he said. “It helps to have programs like this to help people understand where community banks, and banking in general, fit in [to the community] and how much economic production is spurred by banking.” Wells has been encouraged by how student interest in the program has exceeded expectation despite almost no initial marketing for the program. “We were very conservative with our projections as to how many students would be taking these new classes that we were offering,” he said. “In fact, in the fall we anticipated we would have three students taking the Intro to Bank Management class, and we ended up having nine. The second course in the sequence, which was just offered for the first time this spring, we projected to have six students, and we had 22. It’s amazing we’re already starting to see this picking up steam with students that we hope will continue through the program.” According to Dr. Paolo Miranda, who serves as faculty program coordinator, the curriculum for Purdue University Northwest’s banking program was inspired by graduate schools of banking such as the Stonier Graduate School of Banking and the Graduate School of Banking at the University of Wisconsin. He said, “We ask, what do they do, what’s their big design? Once we have that, we think, what of these programs can we offer as general classes?” The program also uses a similar model of instruction in that classes on bankingspecific topics are taught by bankers, and all Continued on next page. Peymon Torabi, Peoples Bank, Munster, teaches Financial Reporting to PNW students. Students learn about the Federal Reserve’s emergency rate cut while working toward a banking concentration.
12 JULY / AUGUST 2020 others are taught by university faculty. With such an encouraging start to the program thus far, Purdue University Northwest has high hopes for its future. Further expansion to the curriculum is already being considered, such as a postgraduate program. “What I hope to see is it first growing internally,” said Miranda. “Not only within finance majors, but hopefully within all the majors in the College of Business. As for continuing the program, what I hope to see, since we have the concentration and the minor, is going to post-baccalaureate. I hope to see that part growing, too.” Wells is optimistic that Purdue University Northwest can grow the program further. “My hope is that we would continue to build on some of this early success, and continue to expand the programs we have that directly interface with the banking and financial sector,” said Wells. “We happen to be right next door to one of the largest financial centers of the world here, just outside of Chicago, and we’ve got a phenomenal partner in the Indiana Bankers Association. So between those two centers of gravity, in my mind the opportunity for PNW to become a leading provider of banking and financial education, certainly in the Midwest if not nationally, is legitimate. I think we have an opportunity to do that.” HB CINNAIRE.COM It takes more than good intentions to transform communities. It takes capital, development capacity and trusted partnerships. For over 25 years, we’ve been connected to and involved in the communities we serve. We’ve listened and learned, and consistently turned intentions into real transformation. And with more than $7.3 billion in community impact, 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. Students engage in banking curriculum to prepare for potential careers in banking.
Hoosier Banker 13 Purdue University Northwest launched Indiana’s first collegelevel banking curriculum in Indiana. Hear participants describe the program, designed to bring the next generation of talent into banking. To view the video, click on the video icon in HB Digital. Video Bonus Ball State University has partnered with the Indiana Bankers Association to offer a banking minor through the BSU Miller College of Business, with classes to begin this fall. The curriculum was developed with input from the Indiana banking community. Coursework topics will include risk management, bank management, financial reporting and markets. The establishment of a banking minor at BSU builds on IBA’s partnership in 2019 with Purdue University Northwest to create a banking concentration. The creation of the BSU banking minor program furthers the IBA initiative of offering college-level banking education across Indiana in support of developing and retaining top banking talent for future generations. Purdue University Northwest also is making available a banking minor this fall through the PNW College of Business. The addition of a banking minor expands on the success of PNW’s banking concentration program, initiated last year, with 22 students enrolled to date. IBA educational partnerships with Indiana institutions of higher learning align with the Next-Gen Banker pillar of the IBA strategic plan to help cultivate the next generation of banking professionals. The dream of banking-specific education in Indiana was formalized as an IBA goal by Clay W. Ewing, German American Bank, Jasper, while serving as IBA chairman in 2018. Additionally, internship opportunities will be available through current programming. For more information about IBA educational partnerships, contact Eric Augustus at eaugustus@indiana. bank, 317-387-9380. BSU Premiers Banking Minor To help promote banking as a career, the Indiana Bankers Association has created a shareable #BetterInBanking flyer. It features information about bank functional areas and matching skillsets, the benefits of a career in banking, and how being part of the banking industry can make a difference in the communities banks serve. #BetterInBanking Flyer Available To download the #BetterInBanking flyer, go to indiana.bank/betterinbanking-flyer, or click on the green arrow in HB Digital. Additionally, visit indiana.bank/next-gen for details about the IBA Next-Gen Bankers Video Series, Indiana BankLEAD internship program, BankTalentHQ and the IBA Future Leadership Division. HB Horizon Bank Establishes PNW Scholarship Fund Horizon Bank, Michigan City, in coordination with Purdue University Northwest, has established the Horizon Bank-Robert C. Dabagia Scholarship fund in honor of the bank’s late chairman emeritus. The endowment fund is to provide financial support for students enrolled in PNW’s banking concentration. The endowment initially will allow approximately $2,000 to be awarded to students annually, to grow larger as the endowment principal grows. The amount of funds and number of recipients will be based each year on student financial needs. Under supervision of the dean of the College of Business, a faculty committee will select candidates. Students who have committed to enroll in the PNW banking concentration courses are eligible to apply at pnw.edu/financial-aid/scholarships. Robert C. Dabagia worked in the banking industry for more than 50 years. He served at the Northern Trust Company in Chicago and the Bank of California before joining Horizon Bank in his hometown of Michigan City. He retired as chairman of the board in 2013 and was a member of the Indiana Bankers Association 40 Year Club. Dabagia passed away on Nov. 12, 2019. HB Robert C. Dabagia
14 JULY / AUGUST 2020 ARTICLE SPOTLIGHT Advocacy never stops. We’ve used this phrase before in Hoosier Banker to illustrate that, even in good times, we must keep sharing the message that a strong banking industry is integral to the economic well-being of our communities. The phrase applies in challenging times, as well. With the emergence of COVID-19, precautions to protect public health have been nothing short of life-changing. Social distancing, limitations on large gatherings and other safeguards are designed to keep us safe, but have drastically changed the way we interact with one another, at least temporarily. While individuals, businesses and governmental institutions are learning to adapt to this new normal, the way we advocate on policy must also adapt. There is a significant element of human interaction in advocacy, both in direct lobbying and grassroots. Face-to-face conversations, in-person meetings, large events and social gatherings are all meaningful ways to engage. Today these advocacy tools pose risks that were unforeseen just four months ago, and as a result have been halted. We cannot wait until the pandemic is behind us, though, to resume engagement, because the need for advocacy never stops. Instead we must use the resources available to us to create news ways to participate in the policy arena. Earlier this year the Indiana Bankers Association made the difficult decision to cancel the IBA Annual Washington Trip. The July dates set aside for the trip, which ironically had been moved forward from the traditional fall timeline, posed significant risks. For the same safety concerns, we also canceled the summertime regional meetings, a centerpiece of grassroots engagement. In the spirit of adaptability, however, we have reformatted IBA grassroots communications so that your voice can continue to be heard. We are trading hotel ballrooms and visits to Capitol Hill for the new reality of teleconference communication. This virtual forum is different from past grassroots tools, but no less meaningful.* Issues that impact the industry will continue to arise, and video technology presents a suitable and effective form of engagement on these issues. While electronic communications may not fully replicate the experience of meeting in person, it is only the medium that has changed, not the message. For your Government Relations Team, circumstances certainly will be different working with the Indiana General Assembly in preparation for 2021. It was fortuitous for all involved that this year’s session concluded on March 11, while we were simultaneously learning about the rapid spread of COVID-19 and its impact on public gatherings. Moving forward, the Statehouse tradition of faceto-face communications in small settings presents challenges, yet the business of running the state and implementing policy continues. To acclimate, legislative leaders have met for the first time since session in a public forum via Zoom to discuss the assignment of topics for study over the summer. The General Assembly that convenes in January may still be facing coronavirus challenges. While we do not Effective Advocacy In the era of COVID-19 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
Hoosier Banker 15 yet know where we will be with the pandemic in the new year, we do know that those involved in public policy have the means to adapt to new forms of communication. For banking advocates, we must continue to be creative, deliberate and focused on connecting with policymakers so that There’s lending, and there’s intelligent lending. The tools to succeed in every stage of your lending lifecycle. Learn more at spglobal.com/commercial-lending Copyright © 2020 S&P Global Market Intelligence Inc. All rights reserved. Market Insight & Lead Generation Pricing & Total Relationship Optimization Portfolio & Lender Performance Analysis Credit Surveillance & Portfolio Tracking Credit Analysis & Assessment BANKING CENTER NEWS Farmers & Merchants Bank, Boswell, opened a Williamsport branch in April. The branch is located at 868 SR 28 East Williamsport and is managed by Taylor Weigle. Other branch personnel are Ann Cole, Dana Craft and Kelsey Hetrick. they have the information needed to make decisions that benefit Hoosiers. Whether bankers are heard in person or electronically, our mission is no less relevant. It is more important than ever to use our voice as Congress passes legislation that directly or indirectly impacts the banking industry. The Indiana banking community must continue to adapt and adjust to new ways of being heard, because advocacy never stops. HB * For details about engaging in virtual grassroots advocacy, contact Josh Myers at jmyers@indiana.bank, 317-333-7165. The new Williamsport branch of Farmers & Merchants Bank features two drive-thru lanes.
16 JULY / AUGUST 2020 HUMAN RESOURCES Pregnancy Discrimination A reminder for employers Employers have faced unprecedented challenges in 2020. Apart from topics that dominate the news, employees must continue to be mindful of compliance with various laws, including the Pregnancy Discrimination Act. The PDA prohibits employment discrimination based on pregnancy with regard to any term, condition or aspect of employment, including hiring, termination, pay, benefits, promotions, training or job assignments. Pregnancy discrimination means treating a female (applicant or employee) unfavorably because of pregnancy, childbirth or a medical condition related to pregnancy or childbirth. Last year, nearly 3,000 pregnancy discrimination cases were filed with the Equal Employment Opportunity Commission. The EEOC is the federal administrative agency responsible for interpreting and enforcing federal anti-discrimination laws and is authorized to bring lawsuits on behalf of victims of discrimination. In 2019 the EEOC reported a record high $22.5 million in settlements of pregnancy discrimination claims. The charges of discrimination included allegations that: supervisors made negative or discriminatory comments about pregnant employees; and pregnant employees were retaliated against with poor performance reviews, were denied leadership positions or promotions, or were not accommodated when they presented work restrictions. The EEOC recently sued an employer (and its staffing company for going along with the employer’s actions) for terminating newly hired pregnant employees, because the employer assumed the employees would not meet the employer’s attendance policy. A growing list of states (Indiana is not one of them, although legislation has been proposed) have passed laws in recent years broadening the scope of protections for pregnant employees and applicants by requiring employers to engage in an interactive process to assess potential reasonable accommodations for health conditions related to pregnancy and childbirth that may not separately qualify as a disability. Reasonable accommodations may include: • Frequent or longer bathroom breaks; • Temporary light duty assignments or temporary transfer to a less strenuous or hazardous position, if available (with return to work after pregnancy); • Part-time or modified work schedules; • Periodic rest breaks; • Modifying equipment or seating; • Assistance with manual labor such as lifting, pulling or pushing. Many of the laws were enacted in the wake of Young v. United Parcel Serv., Inc., 575 U.S. 206 (2105), in which the U.S. Supreme Court provided a framework for pregnant employees challenging workplace accommodation policies and practices. In Young, a delivery driver (whose doctor imposed lifting restrictions) sued for pregnancy discrimination, after the company denied her request for a temporary light duty assignment, even though the company had regularly offered that same accommodation (or other accommodations) to workers who were injured on the job or who had disabilities. The Court held that a pregnant employee could show a prima facie case of disparate treatment by showing that she is pregnant, sought an accommodation, the employer did not accommodate her, and the employer accommodated others “similar in their ability or inability to work.” Debra A. Mastrian Partner SmithAmundsen LLC dmastrian@salawus.com SmithAmundsen LLC is a Diamond Associate Member of the Indiana Bankers Association.
Hoosier Banker 17 chicago indianapolis st. louis milwaukee A full service business law firm with a simple promise – put you first 201 North Illinois Street, Suite 1400 Capital Center, South Tower Indianapolis, Indiana 46204-4212 T: 317.464.4100 | F: 317.464.4101 | salawus.com Growing in Indiana to meet your company’s legal needs STEPHEN STITLE | MARTHA LEHMAN | LARRY TOMLIN | ANDREW PODGORNY | BRANDT HARDY MARK WENZEL | DEBRA MASTRIAN | JOHN TANSELLE Employers should engage in interactive dialogue with pregnant employees and applicants, just as the employer would with a person who is disabled or has a workplace injury. Employers must ensure that pregnant employees are not treated differently than those who have similar work restrictions due to other reasons. Employers must understand their obligations under the PDA, as well as appliWoman on the Rise Award Sponsored by Celebrating a woman age 40 or younger who is making a significant impact in her industry and community, making her “one to watch.” Candidates are interwoven and involved in their communities and should achieve success independently, but thrive on sharing their vision with others and contributing to team success. This young professional welcomes change and opportunities to tackle new projects. Nominations are now open! Read the criteria at indiana.bank/woman-rise-award or contact Laurie Rees at Lrees@indiana.bank, to nominate yourself or another woman in banking by Sept. 11. cable state and local anti-discrimination and/or accommodation laws. Employers should have policies prohibiting pregnancy discrimination and providing for pregnancy accommodations, and ensure that managers/ supervisors are properly trained. HB The information in this article is provided for general information purposes only and does not constitute legal advice or an opinion of any kind. You should consult with legal counsel for advice on your institution’s specific legal issues.
18 JULY / AUGUST 2020 Stock Analysis Review as of May 31, 2020 INDIANA BANK & THRIFT STOCK UPDATE The Size, Pricing and Profitability Reports for Indiana Banks and Thrifts as of May 31, April 30, and March 31, 2020, are available by clicking on the icon on this page in HB Digital or by visiting the designated website location. These reports present the stock price changes for the 30 Indiana banks and thrifts that are traded on the NASDAQ and Over-The-Counter markets over the prior two years, one year and year-to-date, in addition to pricing and performance metrics. Selected banks headquartered outside Indiana, four broad market indices, and five bank and thrift indices are also tracked. Just as it appeared that America was successfully “flattening the curve” of new cases of infection and deaths due to the coronavirus pandemic, allowing for the restarting of the economy, commerce was confronted with another major headwind. Racial tensions flared due to the egregious death of a black man in police custody in Minneapolis, igniting demonstrations and rioting across the country, including Indianapolis, and in countries around the world. The hope for a quick return to the vibrant economy of early 2020 seems less likely now despite massive government stimulus. Investors, however, remain hopeful as demonstrated by a significant recovery in the major broad market indices in recent weeks. For instance, the S&P 500 Index was as high as 3,386 on Feb. 19, and was as low as 2,237 on March 23, before rebounding to 3,044 by May 29. Market volatility is expected for the foreseeable future due to significant economic and political uncertainty. Financial stocks continue to be out of favor compared to the broad market. For example, while the S&P 500 Index is down only 5.77% YTD as of May 31, the S&P 500 Bank Index is down 35.50% YTD. The same relationship exists over the one- and two-year time horizons. Anticipated continued net interest margin pressure brought on by low interest rates and asset quality concerns brought on by borrowers’ business interruptions are among the biggest concerns. Indiana banks generally fared better than the S&P 500 Bank Index. The median for Indiana’s NASDAQtraded bank stock prices has decreased 25.7% YTD, and Indiana’s OTC bank stocks decreased 17.8%. By comparison, the medians for selected banks with assets greater and less than $100 billion headquartered outside Indiana decreased 46.6% and 37.5% YTD, respectively. Several announced mergers and acquisitions were completed in the last couple of months. MutualFirst was acquired by Northwest Bancshares Inc. of Warren, PA, on April 24. FCN Banc Corp. of Brookville completed its acquisition of DSA Financial of Lawrenceburg in March. West End Indiana Bancshares of Richmond was acquired by Three Rivers Federal Credit Union of Fort Wayne on June 1. Teachers Credit Union of South Bend completed its acquisition of New Bancorp Inc. of New Buffalo, MI, on June 8. New acquisition announcements include: Piper Holdings (Fountain Trust Company) of Covington, IN, acquiring SBB Bancshares (State Bank of Burnettsville); and Crane Credit Union acquiring Community State Bank of Southwestern Indiana in Poseyville. HB Michael A. Renninger Principal Renninger & Associates LLC mrenninger@ renningerllc.com Renninger & Associates LLC is a Diamond Associate Member of the Indiana Bankers Association. Securities offered through Ausdal Financial Partners Inc. Member FINRA/SIPC. 5187 Utica Ridge Road, Davenport IA 52807 563-326-2064. Renninger & Associates and Ausdal Financial Partners Inc. are separately owned and operated. Indiana Statistics Click on the hand icon in HB Digital to access statistics through May 31, April 30 and March 31, 2020, or visit: indiana.bank/bankthrift-stock-update
Hoosier Banker 19 "For an Objective Assessment of Your Challenges and Professional Execution of Your Opportunities" Michael A. Renninger (317) 695-7939 mrenninger@renningerllc.com . www.renningerllc.com The Graduate School of Banking at the University of Wisconsin is encouraging bankers to enroll now for the 2021 session at 2020 pricing. Students may freeze fees at the 2020 rate by paying in full by July 31, or by requesting an invoice be sent this fall after 2021 rates are set. The 2020 session, originally scheduled for this August, has been canceled due to COVID-19 concerns. Enrolled students have been moved to next year’s session, Aug. 1-13, 2021, and new applications are being accepted. Additionally, GSB has amended its deposit policy for the 2021 session. Students who enroll now for the 2021 session but do not attend will receive a full refund of the $350 enrollment deposit or credit on account. GSB is also offering risk-free enrollment for its 2020 fall schools. For more information, call 800-755-6440 or visit gsb.org. The Indiana Bankers Association has been a sponsor of the school since it was founded in 1945. HB GSB Offers Tuition Freeze for Next Session The Indiana Council for Economic Education works to improve the financial literacy of Hoosier students by training K-12 educators to teach students age-appropriate economic lessons through programming and activities, including Gen i Revolution, an online learning game. Banks have the opportunity to partner with the ICEE in support of area schools. For more information, contact J.W. Fansler, ICEE assistant director, at 765-494-8544, jwfansle@purdue.edu. HB ICEE Seeks Bank Partners For 2020, the Indiana Bankers Association is combining the educational offerings of the Mega Conference with the Association business of the Annual Convention. The result is the Mega Convention, a must-attend event. Click on the icon in HB Digital for more information and latest updates, or go to: indianabankers.org/calendar Indianapolis NOV. 1618 Mega Convention
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