KEEPING OUR NETWORK MEGA STRONG DON’T MISS THIS MEGA EVENT! MEGA Conference 2022 • May 9-11, 2022 Indiana Convention Center • Indianapolis
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 BankingCommunity 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, 2022, the Indiana Bankers Association is accepting nominations for the 2022 CLASS of the IBA Leaders in Banking Excellence.
DIRECTORS & STAFF HOOSIER BANKER MAGAZINE indiana.bank Celebrating 125 Years Publisher: Amber R. Van Til Editor: Laura Wilson Advertising: Rod Lasley Design: 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 reservations are due the 20th of the month, two months before publication. Subscriptions: Subscriptions are provided free of charge to members and associate members of the Indiana Bankers Association. About: 8LI ƥEKWLMT TYFPMGEXMSR SJ XLI -RHMERE &EROIVW 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., which 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 )QEMP -&% WXEJJ YWMRK ƤVWX REQI MRMXMEP ERH PEWX REQI TPYW “@indiana.bank” – example: jdoe@indiana.bank Indiana Bankers Association ;SSHƤIPH 'VSWWMRK &PZH 7YMXI ) Indianapolis IN 46240-7321 317-387-9380 Vol. 106 No. 2 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: -R JYPƤPPMRK SYV QMWWMSR [I [MPP Maintain the highest ethics, integrity and respect for others; Serve with professionalism, innovation and resourcefulness; Instill passion, positive attitude and enthusiasm; Remain mindful that the success of the IBA is judged by the success of its members. IBA BOARD OF DIRECTORS 3JƤGIVW Garry D. Kleer, Chairman.............................................................................. First Bank Richmond Jamie R. Shinabarger, First Vice Chairman .............. Springs Valley Bank & Trust Company, Jasper Benjamin J. Bochnowski, Second Vice Chairman ..................................... Peoples Bank, Munster Michael S. Zahn, Immediate Past Chairman....................... First Federal Savings Bank, Huntington 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 John Corbin, Non-Indiana Headquartered Bank Director . Huntington National Bank, Columbus, OH Jon-Myckle D. Price, FLD President ............................Security Federal Savings Bank, Logansport Regional and At-Large Directors David M. Findlay, At-Large ...................................................................... Lake City Bank, Warsaw Kent A. Liechty, At-Large ............................................................................... First Bank of Berne Jeffrey W. Gump, North Region ............................................Farmers and Merchants Bank, Laotto Daniel Maddox, North Region ...................................................... Citizens State Bank, New Castle Jacqueline M. Ruge-Perkins, North Region ...........................................First State Bank of Porter Lisa Arnold, South Region...................................................................... Home Bank, Martinsville Gregory Inman, South Region....................................... Scottsburg Building and Loan Association John M. Kennedy, South Region .......................................................+VIIRƤIPH &EROMRK 'SQTER] IBA FUTURE LEADERSHIP DIVISION ADVISORY BOARD Jon-Myckle D. Price, President ................................... Security Federal Savings Bank, Logansport Brock C. Goggins, Vice President .................................................German American Bank, Jasper Greg Barnes Jr. .......................................................................................STAR Bank, Fort Wayne Emily Boardman ..................................................................................Crossroads Bank, Wabash Jenilee Bransteter .........................................................................................First Bank of Berne Joshua Burrows ....................................................................................Home Bank, Martinsville Michael J. Clampitt ................................................................................North Salem State Bank Ryan Cook ....................................................................................Mutual Savings Bank, Franklin Gavin Fisher ................................................................Community First Bank of Indiana, Kokomo Kyle Goodwin ...............................................................................................DeMotte State Bank 'LVMWXSTLIV +VMJƤXL .........................................................................First Harrison Bank, Corydon Ryan Hart ...............................................................................................Lake City Bank, Warsaw Zach Hockersmith ..................................................Hoosier Heartland State Bank, Crawfordsville Andrea McGordon .......................................................................... Old National Bank, Evansville Amanda Morris-Feldman ................................................... First Federal Savings Bank, Rochester IBA STAFF Amber R. Van Til ........................................................................................... President and CEO Rod Lasley .............................................................................................. 'LMIJ 3TIVEXMRK 3JƤGIV Dax Denton .................................................................................................. 'LMIJ 4SPMG] 3JƤGIV Christina M. Bennett, CMP ....................................................Vice President - Meetings & Events Josh Myers .......................................................................Vice President - Member Engagement Laurie A. Rees ...................................................................Vice President - Education & Training Ross Teare .......................................................................Vice President - Government Relations Laura Wilson ........................................................................... Vice President - Communications Emily Brooks ..............................................................................Member Engagement Specialist Maria L. Dowers ...................................................Executive & Government Relations Coordinator Susan Clark ......................................................................Events & Products/Services Assistant Elizabeth DeHaven .......................................................................................Education Manager Beth Abney .................................................................................Education Meeting Coordinator Timothy Fry .....................................................................................................Staff Accountant Tracy Kubly ................................................................................................Technology Manager
Hoosier Banker 5 CONTENTS 10 COVER STORY 2022 Mega Conference 12 ARTICLE SPOTLIGHT Legislative Day 2022 Dax Denton and Ross Teare, IBA FEATURES 6 Vantage Viewpoint Amber R. Van Til, IBA 7 Chairman’s Report Garry D. Kleer, First Bank Richmond 9 IBA Calendar of Events 32 State Deposits in Indiana Financial Institutions 38 ‘Scale’ Tool of the Fed Reserve Carl D. White, Federal Reserve Bank of St. Louis FLD FOCUS 16 FLD Updates Josh Myers, IBA DIRECTORS / SENIOR MANAGEMENT 18 The Fed's Balancing Act Jeffrey F. Caughron, The Baker Group 40 Secrets of High-Performing Banks Sean Payant, Haberfeld AG BANKING 20 Midwest Agricultural Banking School 2021 Brady Brewer, Purdue University INDIANA BANK & THRIFT STOCK UPDATE 22 Stock Analysis Michael A. Renninger, Renninger & Associates LLC HUMAN RESOURCES 24 Inside Threats to Company Information Debra A. Mastrian, SmithAmundsen LLC 34 7YGGIWWSV &IRIƤGMEV] 3TXMSRW Lisa Haberman, Ascensus PSP SHOWCASE 28 ‘I’m Sorry, but...’ Jeff Williams, Spry COMPLIANCE CONNECTION 30 Residential Real Estate – Related Transactions Brett J. Ashton, Krieg DeVault LLP OPERATIONS & TECHNOLOGY 36 Consumers' Top Cybersecurity Concerns Sean Martin, CSI CLOSING NOTE 50 IBA Board Review Jacqueline M. Ruge-Perkins, First State Bank of Porter DEPARTMENTS 17 Honorable Mentions 19 Banking Center News 21 From the Board Room 23 Taking it Easy 39 Associate Members Corner 39 In Memory of 43 Banking on Community 45 Bankers on the Move 49 Advertisers Index 12 50 In This Issue 10 “Working at a community bank means that no two days are the same. This makes it interesting and challenging.” Together again for grassroots advocacy
6 MARCH / APRIL 2022 As we approach the second quarter of the year 2022 – the 125th anniversary of the Indiana Bankers Association – we all breathe a sigh of relief that events and programs are taking place in person. We also know that if we need to adjust to hybrid or online, we are already experienced in being flexible. Clearly, though, we prefer to see you in person. As I write this column, the IBA has recently concluded the 2022 Legislative Briefing and Reception, held in downtown Indianapolis after a hiatus last year. Dax Denton and Ross Teare of our Government Relations Team offer a recap of events on pages 12-14. Thank you to the many bankers, IBA associate members and elected officials who took time to make the event a success. Thanks also to Tom Fite, director of the Indiana Department of Financial Institutions, who shared a regulatory update with bankers at a luncheon hosted by The KeyState Companies. Legislative issues are always front and center at the IBA, but we have other areas to focus on, as well. So that we can address all concerns, the IBA periodically creates strategic plans. Currently, we are in process of creating a plan for 2022-24. Much thought goes into the planning, with the benefit of input from our banking leaders. The first step in our strategic planning VANTAGE VIEWPOINT Don’t Miss Out! process is to hold a retreat with current and past board members to gain their insights, since our members clearly are the experts. We held a retreat last fall, and I was elated by the high level of enthusiasm – from bankers and staff alike – regarding the future of this Association and its place in the Indiana banking community. While at this point details have yet to be finalized for the strategic plan, the ultimate goal – the motive behind what we do at the IBA – is to make your job easier. We want you, our members, to sleep better at night knowing that you are part of a community that works to smooth out obstacles, whether regulatory, operational or otherwise. Your Association was created to be the glue that unites members. Speaking of togetherness, I’d like to point out the description on page 19 of “Grow Together,” IBA’s new video and social media campaign. Josh Myers and Emily Brooks of our member engagement team have produced a collection of video interviews with member bankers and associate members, in which interviewees share their perspectives on what it means to be part of the larger banking community. The testimonials are heartfelt and genuine, and you can view them at: indiana.bank/grow-together-videos. As we continue into the rest of 2022, working in unison for the betterment of banking, please remember that your IBA exists for one purpose: to serve you, our valued members. It’s truly an honor. HB Amber R. Van Til President and CEO Indiana Bankers Association avantil@indiana.bank @grbanker Mega Conference May 9-11 Mega is the largest, most comprehensive state banking event in the nation. BSA/AML Compliance School June 22-23 Learn the latest Bank Secrecy Act / Anti-Money Laundering requirements. Annual Washington Trip July 11-13 Join the chorus and make your voice heard on industry issues at our nation’s capital. For event updates, visit: indiana.bank/calendar Thomas C. Fite, director of the Indiana Department of Financial Institutions, addressed bankers at a luncheon held downtown on IBA’s Legislative Day.
Hoosier Banker 7 IBA Quasquicentennial Celebrating 125 Years Learn more at ndiana.bank/history #IBA125Years An Indiana Bankers Association tradition revives this spring. That tradition is the hosting of the IBA Mega Conference in person in the month of May. It’s been a full three years – in 2019 – since our most recent offering of Mega in May. Since then, there have been some deviations to the schedule. When the COVID-19 pandemic hit in early 2020, it was impossible to host an event of 1,000+ in the springtime. That year the IBA wisely combined the Mega Conference with the Annual Convention for a virtual event. Then last year, while thankfully we were able to meet in person, for good measure the IBA waited until October to host Mega – to give time for COVID numbers to wane, as well as give all of us time to adapt to coexisting with the virus. So it is with great pleasure this year that we return to tradition and host IBA’s signature event in the spring. The dates for the 2022 IBA Mega Conference are May 9-11, and the venue is again the Indiana Convention Center in downtown Indianapolis. There’s another reason this year’s Mega is exciting – 2022 marks the 30th anniversary of this blockbuster event. For many Indiana bankers, Mega has been around longer than their careers … and for some it began before they were born! The first Mega Conference took place in 1992 as the brainchild of Paul Freeman, retired IBA executive vice president. The concept was simple: To provide quality educational opportunities in all bank functional areas through the convenience of a single, centralized event. While the concept sounds simple, large-scale events are complicated undertakings, reflecting countless hours of behind-the-scenes preparation to make the onsite experience run seamlessly. Fortunately, the IBA has continued to uphold the high standards of this event throughout the decades. IBA’s Chris Bennett, with assistance from Susan Clark and the rest of the IBA staff, work hard to make Mega live up to its reputation. Member bankers also are a major part of the event’s perennial success, giving vital input into topics and speakers. Additionally, IBA associate members support the Mega Conference through generous sponsorships, ensuring that the costs remain low for attendees. Mega is truly a bargain. For those who have attended past Mega Conferences, you’ll surely want to come again this spring. We’ll be celebrating the 30th anniversary of Mega along with this year’s 125th anniversary of the IBA. If you’ve never experienced Mega before, 2022 is your opportunity to join with the Indiana banking community for this must-attend event. And when you come, it’s my sincere hope that you will stop by the Chairman’s Suite for conversation and camaraderie. Mega in May is a welcomed return to tradition. See you this spring at Mega! HB CHAIRMAN’S REPORT 1IVGLERXW &ERO SJ -RHMERE ŵɄ$1IVGLERXW&ERO-2 ŵ .ER Yesterday, 53 heroes participated in the Merchants blood drive with @indianablood, which means more than 159 lives will be impacted by their generosity. A sincere thank you to those who HSREXIH ũ WSQI JSV XLI ƤVWX XMQI IZIV 'IRXMIV &ERO ŵɄ$'IRXMIV&ERO ŵ .ER /IITMRK SYV GSQQYRMXMIW WEJI 3YV 1MWLE[EOE FVERGL associates met with #Michiana Crime Stoppers today to present a $1,000 community donation. This organization works with local law enforcement to receive information on crimes. Find out more at michianacrimestoppers.com. ,SSWMIV ,IEVXPERH 7XEXI &EROɄŵɄ$Q],,7& ŵ .ER Do you have new or used prom dresses taking up space in your closet? Give your dresses another chance to shine, and donate XLIQ JSV E KVIEX GEYWI (VIWWIW [MPP FI HSREXIH XS PSGEP XIIRW in a private event with the YSB so they can join their peers for a night to remember. 'MXM^IRW 7XEXI &ERO ŵɄ$'7&C-RHMERE ŵ (IG Our Deposit Ops group had a great time bell ringing in New 'EWXPI 8LI 8IEQ'7& +VSYT MRGPYHIH 1ERH] 0EYVIR 0SVMI Jennifer, Julie, Tyler (Frosty), Angi, and cutest bell ringers ever Kate and Kennedy. 7TVMRKW :EPPI] &ERO 8VYWX 'SQTER] ŵɄ$7TVMRKW:EPPI]&8 Dec. 2 Springs Valley Bank & Trust recently made a donation to Cops JSV /MHW MR 4VMRGIXSR 8LERO ]SY XS EPP [LS QEOI XLMW EQE^MRK TVSKVEQ TSWWMFPI *SPPS[ -&% 8[MXXIV $MRHMEREFEROIVW NOTABLE QUOTES Bank Community Service on Twitter Garry D. Kleer Chairman Indiana Bankers Association Chairman, President and CEO First Bank Richmond
8 MARCH / APRIL 2022 Nellie Szczech, EVP, Institutional Relationships Nellie@bhgbanks.com • (315) 509-2637 BHGLoanHub.com/IN WA FICO: 736 WA Income: $279,000 Avg Loan Size: $113,900 WA Years in Industry: 20 WA DSCR: 2.5 2021 BHG borrower: High-quality borrowers on demand. To learn more about BHG, please contact: *weighted average
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. Celebrating 125 Years Calendar of Events CALENDAR UPDATE IRA Basics March 1 • IBA Center IRA Intermediate March 2 • IBA Center Risk Management Forum March 3 • IBA Center Call Report Update March 8 • IBA Center Professional Development/Education/Training Forum March 8 • IBA Center Leadership Development Program - Session 1 March 8-10 • Abe Martin Lodge • Nashville Essentials of Banking: Session 1 - Banking 101 March 9 • IBA Center Branch Manager Forum March 10 • IBA Center Commercial Lending School March 14-18 • IBA Center New Account Documentation and Compliance March 15 • IBA Center Human Resource Directors Forum March 22 • IBA Center Prioritize – Responding to New IT Guidance March 29 • IBA Center Branch Management Series: Session 2 - Leading, Developing and Engaging the Team April 12 • IBA Center Consumer Loan Documentation April 12 • IBA Center Commercial Loan Documentation April 13 • IBA Center 9RMZIVWEP &EROIV 'IVXMƤGEXMSR 4VSKVEQ April 13-14 • IBA Center Compliance Management School April 19-20 • IBA Center Sales Leadership Excellence School April 19-21 • IBA Center TRID Update and Review April 21 • IBA Center Leadership Development Program - Session 2 May 3-5 • Abe Martin Lodge • Nashville Retail Banking Forum May 4 • IBA Center &7% 3JƤGIV *SVYQ May 5 • IBA Center Mega Conference May 9-11 • Indiana Convention Center Indianapolis Community Bankers for Compliance Program - Session 2 May 17 • IBA Center May 18 • Indiana Wesleyan University &ERO 7IGYVMX] 3JƤGIV *SVYQ May 19 • IBA Center Essentials of Banking II - Business Operations and Management May 19 • Virtual Measuring and Analyzing Financial Conditions and Performance June 2 • IBA Center Consumer Lending School June 8-9 • IBA Center 'LMIJ *MRERGMEP 3JƤGIV *SVYQ June 9 • Group 1 • IBA Center June 10 • Group 2 • IBA Center 'SQTPMERGI 3JƤGIV *SVYQ June 14 • IBA Center Senior Lender Forum June 15 • Group 1 • IBA Center June 16 • Group 2 • IBA Center BSA/AML Compliance School June 22-23 • IBA Center Marketing Forum June 28 • IBA Center IT Forum June 29 • Group 1 • IBA Center June 30 • Group 2 • IBA Center Annual Washington Trip July 11-13 • The Willard Hotel Washington, D.C. Professional Development/Education/Training Forum July 12 • IBA Center Branch Manager Forum July 14 • IBA Center Human Resource Directors Forum July 19 • IBA Center FLD Leadership Conference Aug. 18-19 • Hyatt Place Indianapolis / Downtown Annual Convention Sept. 11-13 • French Lick Resort NOTE: For the latest information about IBA event dates, locations and format, please visit: indiana.bank/calendar
10 MARCH / APRIL 2022 COVER STORY May 9-11, 2022 • Indiana Convention Center • Indianapolis MEGAConference 2022 KEYNOTE: KENNETH W. GRONBACH THE POWER OF PREDICTABILITY: CHARTING YOUR FUTURE THROUGH DEMOGRAPHIC CHANGE Tuesday, May 10, 2022 Come explore the common-sense, easy to understand, counterintuitive and fascinating realm of demography. Let Ken bring you into his world of counting people and accurately forecasting future markets. What products or services will fly or die? What nations are demographically doomed? What countries and continents are demographically positioned to excel? How will workforces change? Where are the best sources of talent? What information is useful in writing a post-pandemic strategic plan? Kenneth W. Gronbach is predicting that the United States and the Americas, because of their superior demographics over any other continent, will excel culturally and economically in the post-corona era. Ken is president of KGC Direct LLC and is an internationally respected demographer who has been able to forecast societal, commercial, economic, cultural and political phenomena with uncanny accuracy. Ken’s unusual blend of marketing savvy and common-sense demography, based on over 20 years of proprietary demographic study, sets him apart. KEYNOTE: JAMES OLSON TRAITORS I HAVE KNOWN Wednesday, May 11, 2022 James Olson, former CIA Chief of Counterintelligence, will discuss how our country’s security has been undermined by treachery from within. He will do so in the context of four Americans he knew and worked with who passed secrets to Russia in return for money, ego or sex. This topic will be relevant to anyone concerned about the insider threat and the need to protect sensitive information. “I knew all of them and was involved in catching them. Their betrayal was personal to me and very painful. The damage they did to our country was devastating.” James Olson James M. Olson is on the faculty of the Bush School of Government and Public Service at Texas A&M University, where he teaches courses on intelligence and national security. He served his entire career in the CIA’s Directorate of Operations. His career highlights include serving as the chief of CIA counterintelligence at CIA headquarters and in overseas assignments in Moscow, Vienna and Mexico City. Sponsored by: Sponsored by: MARCH / APRIL 2022
Hoosier Banker 11 KEEPING OUR NETWORK MEGA STRONG Our Mega theme for 2022 is “Keeping Our Network Mega Strong,” because a strong start is essential to building a successful future. This year’s conference offers a unique program to help inspire your bank with the latest ideas and products to help you give your customers what they need to stay competitive in today’s changing environment.
ARTICLE SPOTLIGHT 12 MARCH / APRIL 2022 Legislative Day 2022 Together again for grassroots advocacy
Hoosier Banker 13 Thank you to all who attended the Indiana Bankers Association Legislative Briefing and Reception on Jan. 26 at the Hyatt Regency Indianapolis. After an unplanned break from this annual event in 2021 due to COVID-19, it was a delight to meet again in person this year. Approximately 100 IBA-member bankers and associate members joined with some 40 elected officials to make the event a success. As in past years, the morning began with a meeting of the IBA Board of Directors. Afterward board members joined with members of the IBA Government Relations Committee for a luncheon sponsored by The KeyState Companies. Our guest speaker was Tom Fite, director of the Indiana Department of Financial Institutions, who provided an industry update and DFI report. Mid-afternoon was devoted to an in-depth review of bills at the Statehouse that could have an impact on banking. This annual meeting provides an opportunity for valuable feedback from GR Committee members on their views of pending legislation. Late afternoon, a larger audience of bankers and associate members came together for the Legislative Briefing. At this event, attendees heard details about bills that could impact Indiana banking, including: % HB 1224 - Government Investments and Contracts % SB 371 - Replacement of the London Interbank Offered Rate % SB 408 - Community Investments by Financial Institutions % SB 358 - Personal Information and Social Media Policies % SB 262 - Housing Tax Credits % HB 1092 - Business Association Matters % SB 351 - Virtual Currency % SB 352 - Supervised Consumer Loans % HB 1001 - Administrative Authority % HB 1002 - Various Tax Matters The discussion of bills was followed by a presentation of awards by IBA Chairman Garry Kleer, honoring those banks that are strong supporters of Indiana BANKPAC. A total of 24 banks were recognized with the BANKPAC 200% Club award, which is given to banks that contribute at least twice their fair share. In total, 91 banks participated in raising funds for the PAC through corporate donations or personal donations from employees, with 72 of those banks meeting their fair share goals. Additionally, Chairman Kleer presented awards to two banks for Most Dollars Raised and Highest Percentage of Fair Share Raised. The IBA greatly appreciates the support of banks for this important endeavor. After the awards, the audience was treated to a presentation by the Indiana Week in Review panel, which has proved popular in years past. The ensuing panel discussion offered a close look at the politics driving legislative efforts at the Statehouse from a variety of viewpoints. The evening culminated with the Legislative Reception, giving IBA members the chance to meet faceto-face with Indiana lawmakers for conversation and networking in a relaxed atmosphere. The annual IBA Legislative Day signals the start to several grassroots advocacy events throughout the year. The Future Leadership Division Day at the Statehouse took place on Feb. 15, to be reported on in the next edition of Hoosier Banker. Upcoming events include the IBA Annual Washington Trip, scheduled for July 11-13, as well as regional meetings and other opportunities. Please join with your colleagues to give a strong voice to the Indiana banking community through grassroots advocacy. HB Dax Denton 'LMIJ 4SPMG] 3JƤGIV Indiana Bankers Association ddenton@indiana.bank @ibagovrelations Ross Teare Vice President - Government Relations Indiana Bankers Association rteare@indiana.bank
14 MARCH / APRIL 2022 LEGISLATIVE DAY GALLERY
YOUR þèčòþF7 %čòz¥Fòò á èþ¥Fè 6LQFH )+/%DQN ,QGLDQDSROLV KDV EHHQ D UHOLDEOH VRXUFH RI OLTXLGLW\ DQG VXSSRUWHG WKH KRXVLQJ ILQDQFH DVVHW OLDELOLW\ PDQDJHPHQW DQG FRPPXQLW\ OHQGLQJ QHHGV RI ,QGLDQD ILQDQFLDO LQVLWXWLRQV $V \RXU WUXVWHG EXVLQHVV SDUWQHU ZH SURYLGH RXU PHPEHUV ZLWK H[SHUWLVH FRXQVHO DQG VHUYLFHV WKDW HQKDQFH WKHLU ERWWRP OLQH :H ORRN IRUZDUG WR FRQWLQXLQJ RXU SDUWQHUVKLS ZLWK ,QGLDQD EDQNV DQG OHQGLQJ RXU NQRZOHGJH WR KHOS \RX PD[LPL]H WKH EHQHILWV RI \RXU PHPEHUVKLS Start a conversation today by calling your Account Manager at 800.442.2568 $GYDQFHV Ŷ Customized advance structures to profitably finance growth and manage interest rate risk Ŷ Reliable same-day funding $GYDQWDJH 033 Ŷ Purchasing fixed-rate mortgages from 5-30 years Ŷ Simple pricing structure with only one loan-level price adjustment Ŷ Benefit of income potential to members that sell high-quality loans through the Lender Risk Account (LRA) $IIRUGDEOH +RXVLQJ Ŷ Programs to promote affordable housing, neighborhood improvement, andaccessibility modification Ŷ Low-cost and long-term funding for local economic development
16 MARCH / APRIL 2022 Josh Myers Vice President - Member Engagement Indiana Bankers Association jmyers@indiana.bank @joshmyersIN FLD FOCUS FLDUpdates As 2022 continues, the Future Leadership Division Advisory Board has a few updates and announcements to share. First, the FLD Advisory Board is under new leadership, as a new president and vice president have assumed their positions for the year. Jon-Myckle Price of Security Federal Savings Bank, Logansport, is now serving as president of the FLD. He additionally serves on the Indiana Bankers Association Board of Directors as the FLD representative. Price assumes the role of FLD Advisory Board president after the wonderful leadership of Emily Boardman of Crossroads Bank, Wabash, who helped to guide the FLD during 2021. Brock Goggins of German American Bank, Jasper, is serving as vice president of the FLD Advisory Board this year. Both Price and Goggins have been active with the FLD for several years and will be excellent leaders. The Future Leadership Division also welcomes four new members to the Advisory Board in 2022. FLD Advisory Board members advise the IBA on matters related to FLD events, offerings and strategies for reaching next-generation bankers and bank leaders, acting as ambassadors for the banking industry. Joshua Burrows is assistant vice president, digital banking manager and business continuity planning coordinator of Home Bank, Martinsville. With three years in the banking industry, he has experience in retail banking, disaster recovery and digital innovation. Burrows volunteers with Down Syndrome Indiana and the Better Communities Coalition. He earned a bachelor’s degree from Indiana University and a master’s degree from the University of Southern Indiana. Jenilee Bransteter serves as business banking manager with First Bank of Berne. She joined the bank in 2007. Bransteter is active with the Berne Rotary Club and serves on the board of trustees of Rockford United Methodist Church. She earned a bachelor’s degree from Ohio State University and attended the Graduate School of Banking at the University of Wisconsin. Ryan Cook is senior vice president, chief financial officer, of Mutual Savings Bank, Franklin. He joined the bank in 2017 after previously serving as controller for a community bank. Cook is a graduate of Indiana University and of the Graduate School of Banking at the University of Wisconsin. Andrea S. McGordon serves as community outreach and financial empowerment officer with Old National Bank, Evansville. She has been in banking for more than 30 years, with experience in banking center management, residential mortgage, retirement plan services, not-for-profit and private banking. McGordon serves as a trustee for Christian Theological Seminary and Faith Tabernacle Church, is a member of the Andrew J. Brown Academy and Indianapolis Ballet board of directors, and serves on the advisory council for Leadership Indianapolis. She also serves on the Central Indiana Community Foundation joint investment board. McGordon is a graduate of Leadership Indianapolis and the Women’s Fund OPTIONS program, and she earned bachelor’s and master’s degrees from Indiana Wesleyan University. HB
Hoosier Banker 17 Scholarship Winner Named Ryan Anderson, chief financial officer of The Fountain Trust Company, Covington, has been awarded the 2021 Indiana Bankers Association FLD 2 LDP scholarship. The scholarship provides $1,500 toward registration fees for the IBA Leadership Development Program. The FLD 2 LDP scholarship was created in 2019 to provide an additional benefit to IBA Future Leadership Division members. The goal is to help develop and inspire new leaders in the banking industry through participation in the IBA Leadership Development Program. Dan L. Moore has been elected chair of the Council of Federal Home Loan Banks, Washington, D.C., effective Jan. 1. He currently chairs Home Bank, Martinsville, and the Federal Home Loan Bank of Indianapolis. Moore joined Home Bank in 1978, serving in roles including executive vice president, chief operating officer, chief executive officer and president. He holds an appointed position on the Mutual Institution Advisory Board of the Office of the Comptroller of the Currency and sits on the boards of Hoosier Voices for I-69 and Stability First. A member of the Indiana Bankers Association 40 Year Club, Moore was named to the 2018 class of the IBA Leaders in Banking Excellence. He is a graduate of Indiana State University and earned a master’s degree from Indiana Wesleyan University. Greenfield Banking Company was named 2021 Indiana Small Business Lender of the Year by the Indiana Statewide Certified HONORABLE MENTIONS Development Corporation at its annual meeting on Dec. 7. Christy Smith and Laura Nance are the GBC lenders who provided SBA 504 loans to the bank’s borrowers. Community First Bank of Indiana, Kokomo, was runner up for the award. The Lender of the Year Award is given to the Indiana bank that makes the highest dollar volume of SBA 504 loans with Indiana Statewide CDC as a percentage of the bank’s total deposits. Several other awards were announced: % First Merchants Bank, Muncie had the most SBA 504 loans approved by Indiana Statewide CDC for the fifth consecutive year. % Lake City Bank, Warsaw, won two awards. It was recognized as the bank with the most dollars approved for SBA 504 loans. Additionally, Brian Burrell of Lake City Bank won an award as the individual banker in the state with most loans approved and highest total dollar amount of loans approved in 2021 by Indiana Statewide CDC. HB There’s lending, and there’s intelligent lending. Copyright © 2022 S&P Global Market Intelligence Inc. All rights reserved. The tools to succeed in every stage of your lending lifecycle. Learn more at spglobal.com/commercial-lending Market Insight and Lead Generation Powerful Sales Call Preparation Credit Surveillance and Portfolio Tracking Portfolio and Lender Performance Analysis Credit Analysis and Assessment Terre Haute Savings Bank has changed its name to The Hometown Savings Bank, Terre Haute, to emphasize its commitment to the individual communities it serves, including locations in Brazil and Riley. President Bart Colwell said the new name focuses on the bank’s mission of being “the local community bank of choice as we bring the personal banking experience to every hometown in which we do business.” The bank has been in operation since 1869. HB BANK NAME CHANGE
18 MARCH / APRIL 2022 The Fed’s Balancing Act DIRECTORS / SENIOR MANAGEMENT Jeffrey F. Caughron Chairman of the Board The Baker Group jcaughron@GoBaker.com The Baker Group is a Preferred Service Provider of the Indiana Bankers Association and an IBA Diamond Associate Member. On the first trading day of 2022 the U.S. 10-year Treasury note yield jumped above 1.6%, then traded up another 10 basis points in the two subsequent sessions. That was a 35-bps increase in two weeks and aligned with a similar move higher for market measures of inflation expectations. The bond market hadn’t seen a worse start to a year since 2009. It seems the market is entering the new year with the same concerns and uncertainty that plagued it for most of 2021, but with greater urgency. We’ve seen this movie before, though, and it’s clear that policymakers and investors alike need to carefully assess the strength and staying power of an inflation environment that’s unusual, but not-so-transitory. Typically, an inflationary impulse arises late in an economic cycle and is driven by an overheating economy in which everything is maxed out, hitting on all cylinders, and strong demand is pulling up the general price level. That is not what’s happening now. Instead, we’re dealing with “supply shock” inflation where COVID-19-induced shutdowns produce bottlenecks and sclerotic trade flows. Dock workers, truck drivers, processing personnel and other key points in the supply chain are working with reduced staffing and capacity, causing ripple effects throughout the system. So, are rate hikes and tighter monetary policy the right medicine for supply shock inflation, as is normally the case with “demand pull” inflation? Or might a higher cost of borrowing exacerbate the supply chain disruptions? Former Treasury Secretary Lawrence Summers recently warned of a trying period for the U.S. economy in coming years with a risk of recession followed by stagnation. He voiced fears that “we are already reaching a point where it will be challenging to reduce inflation without giving rise to recession.” Fed decision-makers are all too aware that if they move too aggressively, and if inflation really is a matter of temporary supply chain problems, they run the risk of creating recession to little purpose. The Fed needs to go slowly if the inflation trend is truly benign. If it has deeper, more fundamental roots, however, too gradual a policy would allow inflationary psychology to become embedded in the economy, risking a wage-price spiral and pushing households and firms to get ahead of assumed cost increases by resorting to stockpiling. That’s the Summers worst-case scenario: a return to 1979. There can be no question that the Fed is right to accelerate the “tapering” and stop pumping liquidity into an over-liquified banking system. In their zest to prop up the economy way back when COVID-19 was new, Fed decision-makers characteristically overdid the job, creating way too much cheap money, distorting financial markets, and fueling asset price bubbles in speculative assets that pose serious risks going forward. The quantitative ease needs to stop. That’s the easy part of the Fed’s task. The hard part is subsequently determining when and how fast to raise rates. The flattening yield curve is a reflection of the dangerous waters the Fed must navigate. Short-term yields have risen commensurate with the expectation of multiple rate hikes. All members of the Federal Open Market Committee now see at least one, and some see as many as four hikes in 2022. Longer-term yields, though, have behaved differently. Despite the new year’s jump, the 10-year yield remains below its March 2021 high of 1.75%. That may change, of course, but the fact that yields in the long end have moved so slowly up to this point has allowed the yield curve to flatten and belies genuine concern about growth going forward. The Fed is indeed walking a tightrope. Let’s hope it’s able to keep its balance. HB
Hoosier Banker 19 CINNAIRE.COM It takes more than good intentions to transform communities. It takes capital, development capacity and trusted partnerships. In 25 years, we’ve delivered more than $7.3 billion in community impact. Overcoming challenges. Solving problems. Backed by a commitment to creating healthy communities that 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. BANKING CENTER NEWS Merchants Bank of Indiana, Carmel, opened its newest location in Lynn, Indiana on Jan. 18. The new office is located at 201 S. Main St. and replaces the previous Lynn location, which closed Jan. 14. The new banking center features a full-service teller line, a drive-thru, and online and mobile solutions to serve consumer banking needs. HB The Lynn branch of Merchants Bank of Indiana opened in January. A “Grow Together” video campaign of the Indiana Bankers Association highlights the career-building benefits of the IBA, as told by nearly two dozen members of the Indiana banking community. In video testimonials, member bankers and associate members share personal perspectives on maximizing Association offerings. The videos cover IBA opportunities including education, advocacy, networking, committee service, the Future Leadership Division and other engagement opportunities. Produced and created by Josh Myers and Emily Brooks of the IBA member engagement team, the videos are available on IBA social media, hashtag #IBAGrowTogether. Also view the videos by clicking on the Grow Together logo in HB Digital, or by visiting: indiana.bank/grow-together-videos. HB IBA ‘Grow Together’ Videos
20 MARCH / APRIL 2022 AG BANKING Brady Brewer, Ph.D. Assistant Professor, Agricultural Economics Purdue University brewer94@purdue.edu The 2021 Midwest Agricultural Banking School was held Nov. 29 through Dec. 2. The school returned to being in person after it was held virtually in 2020 due to the ongoing pandemic. The school was held on the campus of Purdue University. Enrollment for the 49th session of the Midwest Agricultural Banking School was 27 students from Indiana, Illinois and Kentucky. The school is cosponsored by the Indiana, Illinois, Kentucky and Michigan bankers associations; the Ohio Bankers League; and the Department of Agricultural Economics at Purdue University. The school consisted of the three back-to-back days of instruction, with the fourth day being the 2021 Ag Clinic. The curriculum provides needed instruction, while minimizing time spent away from the bank. An optional introductory session was provided on the afternoon prior to the start of the school for those students with limited backgrounds in production agriculture. The curriculum for the school is designed to help further the education of bankers and others involved in the field of agricultural finance. Class work features the practical aspects of agricultural credit and finance. Topics include environmental audits, the Farm Service Agency loan program, agricultural financial statements and financial analysis, customer relation- Students of the 2021 Midwest Agricultural Banking School gather at Purdue University. Midwest Agricultural Banking School 2021 ship development, land acquisition and rental arrangements, crop insurance, marketing alternatives used by producers, and farm policy. Faculty members include academics, bankers and other agricultural professionals. Each instructor is carefully selected, with the selection based on knowledge and presentation skills. Purdue Agricultural Economist Brady Brewer served as director of the school, and Laurie Rees, vice president-education & training for the Indiana Bankers Association, served as registrar. Dates for the 2022 school are tentatively set for Nov. 28 through Nov. 30, with the Ag Clinic set for Dec. 1 on the campus of Purdue University. Information for the 2022 school will be distributed by the IBA in the fall. Contact Brady Brewer at 765-494-4324, bebrewer@ purdue.edu, or Laurie Rees at 317-387-9380, lrees@ indiana.bank, for more information. HB
Hoosier Banker 21 committee chair of the Louisville Regional Airport Authority board. Previously, Lanier was senior vice president and site general manager of the Federal Reserve Bank of St. Louis, Louisville branch. She has more than 25 years of experience in fields spanning banking, labor and employment law, collective bargaining, human resources and state government. HB Grow Your Ag Lending Options Competitive Rates | Portfolio Purchases Distressed Asset Options Real Estate Secured | Regional Expertise Jackie Mosier VP Relationship Manager jackie.mosier@conterraag.com (419) 584-8835 conterraag.com | (855) 381-3451 Financing American Agriculture FROM THE BOARD ROOM W. Quinn Buckner has joined the board of directors of State Bank, Brownsburg. He is vice president of communications for Pacers Sports & Entertainment, a longtime professional basketball television analyst and a partner of Mack Financial Group. Buckner brings more than 45 years of experience in leadership and team building as a former NBA athlete and coach. A community advocate, he leads the Pacers youth basketball program and is chairman of the Indiana University board of trustees. Buckner additionally has served on the boards of organizations including the Indiana University Foundation, Center for Leadership Development, Indiana Youth Institute, Pacers Foundation, YMCA, Community Health Network Foundation, Special Olympics of Indiana, Indianapolis Zoological Society and the First Tee of Indianapolis. A member of the National Collegiate Basketball Hall of Fame, he was part of IU’s undefeated 1976 men’s basketball team, captained the U.S. men’s Olympic basketball team that won the 1976 gold medal, won an NBA championship during a 10-year professional career and was head coach of the Dallas Mavericks. Buckner is a graduate of Indiana University. Brian Shockney has joined the board of directors of Home Bank, Martinsville. He is president for the south central region of IU Health, which he joined in 2010 as chief operating officer for IU Health Arnett. He moved to the south central region in 2016 as COO and was promoted to his current role in 2018. Previously, Shockney was president and CEO of Memorial Hospital in Logansport. He serves on several local and regional boards including the Community Foundation of Monroe County, Economic Development Corp., Greater Bloomington Chamber of Commerce, Kiwanis Club of South Central Indiana and the IU Health SCR Foundation Philanthropy Council. He also is a member of the workforce council of the Indiana Hospital Association and a fellow in the American College of Healthcare Executives. Shockney is licensed as a health facilities administrator. Vanessa Williams has been appointed as an independent director to the board of Horizon Bank, Michigan City. She is senior vice president and general counsel of Kelly Services, Inc., a leading global workforce solutions company headquartered in Troy, Michigan. Williams will serve on the bank board’s compensation and asset liability and operation committees. Prior to joining Kelly Services in 2020, she was senior vice president, division general counsel with IHS Markit Ltd. Earlier in her career Williams was an attorney with the Michigan Basic Property Insurance Association and the law firm of Plunkett Cooney. She earned a bachelor’s degree from the University of Alabama, a JD from the College of William and Mary, and an MBA from Wayne State University. Nancy Gruesser has been named chairman of the board of First Federal Savings Bank, Rochester. She is the daughter of retired bank founder Richard Belcher. Dr. Dan Belcher and Cynthia Maves, also children of Dick Belcher, have been appointed to the board after prior service as advisory directors. Additionally, Joe McCarter, president and CEO of RTC Communications Corp. in Rochester, has been appointed to the board. Nikki Lanier, JD, has been appointed to the board of Premier Bank, Defiance, Ohio. She is CEO of Harper Slade, a racial equality advisory firm which she founded effective Jan. 1. Lanier also serves as an adjunct MBA professor at the University of Louisville College of Business, where she is a member of the board of advisers. She additionally serves as chair of the board of One West, Louisville, and as secretary and audit
22 MARCH / APRIL 2022 StockAnalysis Review as of Jan. 31, 2022 INDIANA BANK & THRIFT STOCK UPDATE 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 Jan. 31, 2022, and Dec. 31 and Nov. 30 of 2021 or visit: indiana. bank/bank-thrift-stock-update The Size, Pricing and Profitability Reports for Indiana Banks and Thrifts as of Jan. 31, 2022, Dec. 31 and Nov. 30, 2021, 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 29 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 four bank and thrift indices are also tracked. The broad indices declined an average of 5.9% YTD, and the bank indices improved an average of 1.4% YTD as of Jan. 31, 2022. In comparison, Indiana’s NASDAQ-traded banks are up a median of 1.0% YTD, and Indiana’s OTC/Pink Sheet-listed banks are even YTD. Indiana’s NASDAQ-listed banks are trading at a median multiple of 152.5% of tangible book value, and OTC/Pink Sheet-listed banks are trading at a median multiple of 108.6% of tangible book value as of Jan. 31, 2022. It has now been two years since the onset of the COVID-19 pandemic. After the initial market crash of over 30% in the first quarter of 2020, the market largely recovered by the end of the following calendar quarter. The market then took a positive trajectory into November 2021. Since then, the broad indices have experienced significant volatility due to a number of factors, perhaps the most significant being rapid inflation. Contributing factors include COVID-related government stimulus, supply chain disruptions, labor shortages driving up wages, and spiking fuel prices caused in part by supply concerns brought on by potential international military conflicts. To combat inflation, the Federal Reserve will begin to tighten the money supply and has announced intentions to increase interest rates several times in 2022. Banks generally stand to benefit from rising interest rates, and there appear to be more lending opportunities as the economy continues to fully reopen. Asset quality remains relatively high, and many banks are reporting record 2021 earnings, due in part to relatively small-to-negative loan loss provisions. Other trends include declining noninterest income (as banks reduce NSF and overdraft fees) and increasing noninterest expense. Banks are actively working to emphasize digital service offerings and reassessing brick-andmortar branches (which is likely to lead to more branch closures and consolidations). As for mergers and acquisitions, two Indiana banks have completed their previously announced acquisitions of Chicago-based banks. Finward Bancorp (Munster) completed its acquisition of Royal Financial Inc. on Jan. 31, 2022. The combined company has $2.2 billion in assets. Old National Bancorp completed its mergerof-equals transaction with First Midwest Bancorp on Feb. 17, 2022. The combined company has assets of $46 billion and is the sixth largest commercial bank headquartered in the Midwest. HB
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