PLUS! 2022 IBA Annual Washington Trip SEPTEMBER / OCTOBER 2022 IBA Leaders in Banking Excellence Class of 2022
Member: FINRA and SIPC www.GoBaker.com | 800.937.2257 Oklahoma City, OK | Austin, TX | Dallas, TX | Houston, TX Indianapolis, IN | Long Island, NY | Salt Lake City, UT | Springfield, IL Interest Rate Risk and Investment Strategies Seminar October 19-21, 2022 |Oklahoma City, OK The Skirvin Hotel OCT Two years after the pandemic left financial institutions drowning in excess liquidity at historically low interest rates, the industry faces a new challenge… rising interest rates. The Fed has quickly pivoted from supporting the economy to fighting inflation and institutions are now facing the first rising rate environment in years. Regulators have watched with concern as loan and investment durations extended to record highs in a search for yield and will have a renewed focus on the Investment Portfolio and Interest Rate Risk Management. Portfolio managers can no longer be reactive, but must be proactive in managing their investment portfolio and balance sheet in the face of rising rates and a flattening yield curve. This seminar will examine all of these concerns and present actionable strategies to better prepare your institution for the uncertainty ahead. Join us for an in-depth discussion of the following topics: • Economic and Market Update — Review of current economic conditions and the outlook for growth, inflation, and interest rates • The Powell Pivot — Update on rate hikes, tapering, and the outlook for Federal Reserve monetary policy • Interest Rate Risk — How to ensure you are prepared for the heightened regulatory focus coming in the years ahead • Liquidity Risk Management — Best practices for managing liquidity risk as rates rise • Investment Portfolio Strategies — Adapting your strategy and finding the best relative value for rising rates and a flattening yield curve • MBS/CMO Market — Balancing prepayment and extension risk in an uncertain mortgage rate environment • Municipal Market Update — The latest on managing municipal credit risk and finding the best relative value FEATURED SPEAKER David Rosenberg —President/Chief Economist & Strategist Rosenberg Research & Associates Inc. 11 hours of Economics and Finance CPE credits will be earned for your attendance. The Skirvin Hotel One Park Avenue Oklahoma City, OK 73102 405.272.3040 WHO SHOULD ATTEND Financial institutions’ CEOs, CFOs, investment officers, board members, and those who are directly or indirectly responsible for financial management functions will benefit from this seminar. There is no cost for this seminar. ACCOMMODATIONS A block of rooms is available at The Skirvin Hotel. Identify yourself as a Baker Seminar attendee (or group code TBG3) when calling +1 (800) HILTONS. The special room rate will be available until the room block is sold out. AGENDA Wednesday, 19th Twin Hills Golf 1:00 pm Thursday, 20th Breakfast 7:30 am Seminar 8:30 am Lunch 12:00 pm Adjourn 4:00 pm Dinner 7:00 pm Friday, 21st Breakfast 7:30 am Seminar 8:30 am Conclusion 12:00 pm For your convenience, register for the seminar online at GoBaker.com/oklahoma. Call Skoshi Heron at 888.990.0010 for more information.
Property & Casualty Collateral Protection Employee Benefits Fee Income Cyber BOLI expert adj highly skillful, or knowledgeable (in a particular subject); noun someone who is highly skilled or knowledgeable; expertise noun skill, know-how, IBA Insurance Solutions. Expertise. Defined. Let us use our expertise to review your bank’s coverage so you can get to the business of serving your communities. www.inbankersins.com Brandon Maggard Account Representative cell 606-682-2769 bmaggard@inbankersins.com Chuck Maggard President & CEO cell 606-682-1950 cmaggard@inbankersins.com Lisa Mattingly Director of Sales & Service cell 502-377-4048 lmattingly@inbankersins.com
DIRECTORS & STAFF HOOSIER BANKER MAGAZINE indiana.bank Celebrating 125 Years Publisher: Amber R. Van Til Editor: Laura Wilson Assistant Editor: Evan Hoffmeyer Advertising: Rod Lasley Design: The Westcott Group Inc. Submissions: HB@indiana.bank Advertising: Media kits are available at indiana.bank. Advertising is reserved exclusively 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, IBAmember 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. 5 OUR ASPIRATION The Indiana Bankers Association strives to grow stronger banks and stronger communities. OUR 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 Jon-Myckle D. Price, FLD President ............................Security Federal Savings Bank, Logansport Joseph Breen, Non-IN Headquartered Bank Director.......Huntington National Bank, Columbus, OH 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 J. 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...................................................................KFG&%2/ +VIIRƤIPH 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 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 Laura Shake............................................................................The National Bank of Indianapolis 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 Evan Hoffmeyer ....................................................... Assistant Vice President - Communications Emily Brooks........................................................................................... Digital Media Manager 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 IBA Leaders in Banking Excellence Class of 2022 14 ARTICLE SPOTLIGHT 2022 IBA Annual Washington Trip 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 40 Today's Lending Environment Rebeca Romero Rainey, ICBA 42 No Deal: Slam Brakes Robert S. Nichols, ABA 44 State Deposits in Indiana Financial Institutions FLD FOCUS 18 FLD LinkedIn Josh Myers, IBA DIRECTORS / SENIOR MANAGEMENT 20 Asset Pricing and ALM Strategy Andrew Okolski, The Baker Group PRODUCTS & SERVICES PROFILE 22 Zero Tolerance Rod Lasley, IBA LENDING / CREDIT 24 For Community Banks, the Sun Also Rises Joshua C. Miller, KeyState Renewables PSP SHOWCASE 26 Supporting Affordable Housing in Indiana Keith Broadnax, Cinnaire Corporation COMPLIANCE CONNECTION 28 Does Indiana Law Recognize Cryptocurrency? Brett J. Ashton, Krieg DeVault LLP AG BANKING 33 US Farm Balance Sheet Brady Brewer, Purdue University INDIANA BANK & THRIFT STOCK UPDATE 35 Stock Analysis Michael A. Renninger, Renninger & Associates LLC HUMAN RESOURCES 36 Prioritize Employee Mental Health Debra A. Mastrian, SmithAmundsen LLC OPERATIONS / TECHNOLOGY 48 Diving Into Digital Currency Matt Herron, CSI CLOSING NOTE 58 Partnership Lending DEPARTMENTS 23 Banking Center News 29 IBA ‘High Five’ Awards 30 From the Board Room 31 Taking It Easy 32 Banking on Community 45 Honorable Mentions 50 Associate Members Corner 51 Bankers on the Move 57 In Memory of 57 Advertisers Index 14 58 In This Issue 10 Lending a helpful hand. Partnership Lending. Class of 2022 Giving voice to the Indiana banking community.
6 SEPTEMBER / OCTOBER 2022 Autumn was my favorite time of the year growing up. I reveled in the backto-school excitement, football games, campfires and glorious fall colors. Fall continues to be special to me in my role at the Indiana Bankers Association. This is the time of year that we traditionally host the IBA Annual Convention. This year’s event, scheduled for Sept. 11-13 in beautiful French Lick, holds the extra promise of celebrating IBA’s 125-year anniversary. Be on the lookout for social media posts sharing Convention highlights. Recently, there have been other significant IBA events. In early August, the IBA inducted the fifth class of Leaders in Banking Excellence, the subject of this issue’s cover story. The LBE awards represent the IBA’s highest honor. It truly was a privilege to add five outstanding new honorees to the IBA Wall of Excellence. You can read more about the awards ceremony and this year’s worthy recipients in the article starting on page 10. I’d also like to personally thank U.S. Rep Trey Hollingsworth and Director Tom Fite of the Department of Financial Institutions, plus all the bankers, friends and family who joined us for this meaningful event. Another recent IBA event was the successful annual Washington visit, held in July. Dax Denton and Ross Teare of our Government ReVANTAGE VIEWPOINT Don’t Miss Out! lations Team provide a summary of the trip, starting on page 14. It was a pleasure to have several first-time attendees join us on this year’s trip, and we look forward to continuing to bring new voices to our nation’s capital. Throughout all of this seasonal excitement, we are staying busy at the IBA. In the last issue of Hoosier Banker, I laid out the IBA’s new strategic plan, designed to carry us through 2024 with a focus on five pillars of achievement: Next-Level GR, Next-Level Talent, Operational Effectiveness, New Ventures and Future Opportunities. To make sure we stay on track with the plan, our management team follows a detailed grid with 100+ action items. Each item has its own timeframe, measurements and staff “champion.” Through this tracking system, we look forward to sharing successes with you as we chart progress with the strategic plan. As mentioned earlier, this year is the 125th anniversary of the IBA, but there are other milestones this year, as well. You may recall that our Mega Conference last May represented the 30th running of that blockbuster event. This year also marks the 50th anniversary of the Midwest Agricultural Banking School, scheduled for Nov. 28-Dec. 1 at Purdue University. Finally, 2022 is the 135th anniversary of our chairman’s bank, First Bank Richmond. Congratulations, Chairman Kleer. On behalf of the IBA, it is our pleasure to serve you and our other members, all of whom make up the proud history of Indiana banking. HB Amber R. Van Til President and CEO Indiana Bankers Association avantil@indiana.bank @grbanker Security and Cyber Conference Oct. 4-6 Heighten awareness and take your bank’s security posture to the next level. Banking on Women Conference Nov. 2-3 Women in banking gather to unlock potential and own the future. 50th Midwest Agricultural Banking School Nov. 28-Dec. 1 0IEVR XLI PEXIWX EFSYX EK GVIHMX ERH ƤRERGI EX 4YVHYI University. For event updates, visit: indiana.bank/calendar The U.S. Capitol Building was one of several destinations of the IBA Annual Washington Trip held in July.
Hoosier Banker 7 IBA Quasquicentennial Celebrating 125 Years Learn more at ndiana.bank/history #IBA125Years Banking is a unique industry in many ways. It’s the industry that serves all others financially, making it essential to the healthy functioning of our economy. Banking also helps support nonprofits and other outreach service organizations, making banks pillars of the communities they serve. More specifically, banking professionals touch individual lives by helping consumers realize their dreams of homeownership, entrepreneurship, education and more. Particularly regarding homeownership, for most individuals the purchase of a house represents the single largest investment they’ll make in their lifetimes. The loans they receive through trusted financial institutions are of critical importance. Yet banks provide far more than dollars. Bankers give advice, counsel and guidance to their clients. Many business owners, whether first-time or veteran, appreciate banker input and perspective. Nonprofit organizations benefit from bank leadership on boards and committees to guide them through financial challenges and opportunities. We often use the phrase “time, talent and treasure” to sum up the contributions that bankers and other business partners make to help build the communities in which they live and work. Because the banking industry has such a strong history, we can also add “tradition” to the mix. This year, we celebrate the 125th anniversary of the Indiana Bankers Association. Coincidentally, 2022 also marks the 135th anniversary of my banking home, First Bank Richmond. These anniversaries speak to the longevity of the industry in Indiana. The IBA anniversary celebration touches each and every member bank, because all are integral to the Association’s history. Recently, the IBA has been posting historical tidbits and photos of member banks through Facebook, Instagram and Twitter. Some postings herald the unique strengths of individual member banks, and others reflect memories from past issues of Hoosier Banker magazine. For the past four months or so, these posts have been “counting down” 125 days to the IBA Annual Convention. Blending the old with the new, the IBA will continue using social media to share Convention memories during the event in stunning French Lick. Later this year, the November/December edition of Hoosier Banker will serve as a commemorative anniversary issue. Happy anniversary to all member banks, as well as associate members. You are all a part of the strength of the IBA, Indiana banking and this fine state that we call home. United through our common purpose, we will continue to work for the greater good well into the future. HB CHAIRMAN’S REPORT ,SQI &EROɄŵɄ$,SQI&EROC ŵ .YP] Yesterday we got to surprise Indiana Dream Team Ministry with a $15,500 gift! IDT is going to use this gift to renovate their Residential Living Quarter! #MakingLivesBetter #GatherGrowGive 78%6 *MRERGMEP &EROɄŵɄ$78%6*MRERGMEP ŵ .YP] Congratulations to our corporate work study partner, Providence Cristo Rey High School, on your new building! Our Indy mortgage team used some volunteer hours to move supplies, clean rooms and remove furniture. We’re looking forward to the new school year! *MVWX 7EZMRKW &EROɄŵɄ$JWFMRHMERE ŵ .YP] First Savings Charitable Foundation is pleased to support Leadership Southern Indiana’s NEXGEN program for high school students. This initiative focuses on developing leadership skills, ƤRERGMEP PMXIVEG] ERH SXLIV MQTSVXERX IGSRSQMG XSTMGW JEGMRK young adults. %PPMERGI &EROɄŵɄ$%PPMERGI&EROC-2 ŵ .YRI It’s season and we are here for it! The Alliance Bank family joined the parade last night at the Pulaski Co. Fair. Our team has been around all week serving up popsicles and providing clients and 4-H members coupons to the Pork Shack. #Support4H #BankLocally 8LI *EVQIVW &EROɄŵɄ$1]FEROJSVPMJI ŵ .YRI The Farmers Bank Team is partnering with Meals of Hope today to prepare and package 50,000 servings of food to be donated to local food banks in Clinton, Boone, and Hamilton Counties as part of our We Care Day 2022! #Mybankforlife #CommunityBankingwithaCapitalC #TFBCares *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 Lea in #
8 SEPTEMBER / OCTOBER 2022 Hoosier Banker 29
Hoosier Banker 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 Retail Banking Forum Sept. 7 • IBA Center Advanced Agricultural Lending Conference Sept. 7-8 • Doubletree by Hilton • Lafayette &7% 3JƤGIV *SVYQ Sept. 8 • IBA Center 7IGYVMX] 3JƤGIV *SVYQ Sept. 9 • IBA Center Annual Convention Sept. 11-13 • French Lick Resort Essentials of Banking: Session 4 Sept. 14 • Virtual Advanced Commercial Lending School Sept. 14-15 • IBA Center Stepping Up to Supervisor Sept. 15 • IBA Center Train the Trainer Sept. 20-21 • IBA Center Mortgage Lending School Sept. 20-22 • IBA Center BSA Fundamentals Sept. 22-23 • IBA Center FDIC Directors College Sept. 27 • IBA Center New Account Documentation and Compliance Sept. 28 • IBA Center Understanding the New Regulation B Small Business Loan Data Collection and Reporting Oct. 4 • IBA Center Security and Technology Conference Oct. 4-6 • Renaissance Indianapolis North Hotel Carmel Employment Law Compliance for Banks Oct. 5 • IBA Center 'LMIJ *MRERGMEP 3JƤGIV *SVYQ Oct. 6 • Group 1 • IBA Center Oct. 7 • Group 2 • IBA Center Senior Lender Forum Oct. 12 • Group 1 • IBA Center Oct. 13 • Group 2 • IBA Center IRA School Oct. 18-19 • IBA Center Compliance School - Regulation Z Module Oct. 18-19 • Virtual Leadership Development Program - Session 4 Oct. 18-20 • Abe Martin Lodge • Nashville 'SQTPMERGI 3JƤGIV *SVYQ Oct. 20 • IBA Center Leadership Development Program Alumni Event Oct. 20-21 • Abe Martin Lodge • Nashville Compliance School - Lending Module Oct. 20-21 • Virtual Marketing Director Forum Oct. 25 • IBA Center Fundamentals of Commercial Lending Oct. 26 • Virtual Compliance School - Deposit/Operations Module Oct. 26-27 • Virtual -RJSVQEXMSR ']FIVWIGYVMX] 3JƤGIV -8 3JƤGIV 3TIVEXMSRW 3JƤGIV *SVYQ Oct. 26 • Group 1• IBA Center Oct. 27 • Group 2• IBA Center Banking on Women Conference Nov. 2-3 • Marriott Indianapolis North Branch Management Series - Session 4 Nov. 8 • IBA Center Professional Development/Education/Training Forum Nov. 9 • IBA Center Administering Construction Loans Nov. 10 • IBA Center Community Bankers for Compliance Program - Session 4 Nov. 15 • IBA Center Nov. 16 • Indiana Wesleyan University Fort Wayne Risk Management Forum Nov. 16 • IBA Center Human Resources Directors Forum Nov. 17 • IBA Center 50th Midwest Agricultural Banking School Nov. 28-Dec. 1 • Purdue University West Lafayette Ag Clinic Dec. 1 • Purdue University • West Lafayette Economic Outlook Luncheon Dec. 2 • Renaissance Indianapolis North Hotel Carmel Home Mortgage Disclosure Act Seminar Dec. 7 • IBA Center NOTE: For the latest information about IBA event dates, locations and format, please visit: indiana.bank/calendar
10 SEPTEMBER / OCTOBER 2022 COVER STORY IBA Leaders in Banking Excellence Class of 2022 Inductees and dignitaries gather for the presentation of the Indiana Bankers Association’s 2022 Leaders in Banking Excellence Awards. Shown are (back row, from left): Thomas C. Fite, Indiana Department of Financial Institutions; Andrew J. Briggs, Farmers & Merchants State Bank, Geneva; Amber R. Van Til, IBA; Dr. Rex Wells, nephew of Harriett Brown, Springs Valley Bank & Trust Company, French Lick; David W. Heeter, Northwest Bank, Muncie; (front row, from left): Garry D. Kleer, First Bank Richmond; and John M. Kennedy KFG&%2/ +VIIRƤIPH
Hoosier Banker 11 The Indiana Bankers Association created the Leaders in Banking Excellence Awards in 2018 to showcase exceptional individuals who have positively impacted Indiana banks and the communities they serve. Nine awards were presented the inaugural year of the award, and since then 23 awards have been presented for the combined classes of 2019, 2020 and 2021. The award is considered the IBA’s highest honor. This year, five honorees were inducted into the class of 2022 Leaders in Banking Excellence. Awards were presented on Aug. 5 at a ceremony at the Renaissance Indianapolis North Hotel. Dignitaries who made presentations were U.S. Rep. Trey Hollingsworth; Director Thomas C. Fite, Indiana Department of Financial Institutions; IBA Immediate Past Chairman Michael S. Zahn; and Amber R. Van Til, IBA president and CEO. Additionally, each honoree was invited to make comments. One honoree is deceased and was represented by family members. All honorees/representatives were presented with ebony keepsake plaques. The ceremony culminated with the viewing of a traveling version of the IBA Wall of Excellence. A permanent Wall of Excellence is on display at the IBA offices in Indianapolis, with crystalline plaques showcasing all Leaders in Banking Excellence since the inception of the award. The class of 2022 includes a range of banking leadership. All inductees were nominated by IBA-member organizations and approved by the IBA Board of Directors. Congratulations to the class of 2022 Leaders in Banking Excellence: Andrew J. Briggs, Farmers & Merchants State Bank, Geneva Harriett Brown (deceased), Springs Valley Bank & Trust Company, French Lick David W. Heeter, Northwest Bank, Muncie John M. Kennedy, gbcBANK, Greenfield Garry D. Kleer, First Bank Richmond ANDREW J. BRIGGS Farmers & Merchants State Bank Geneva Class of 2022 Plaque Inscriptions Andrew J. Briggs is first senior vice president for business development of Farmers & Merchants State Bank, Archbold, Ohio, and a board member for the bank and Farmers & Merchants Bancorp. He previously was president and CEO of Bank of Geneva from 1994 until the bank’s merger with F&M in 2019. Briggs was the fifth generation of his family to lead Bank of Geneva. His community service includes the Geneva Town Council, Indiana State Museum, Limberlost State Historic Site, Northeast Indiana Regional Development Authority, Adams County Economic Development and Adams Public Library System. Briggs was appointed to the Indiana Board of Depositories in 2017, and he was named a Sagamore of the Wabash in 2019. He served the Indiana Bankers Association as 2019 chairman and is a member of the IBA 40 Year Club. Briggs is a graduate of Ball State University. (Continued on page 12) HARRIETT BROWN Springs Valley Bank & Trust Company French Lick Harriett Brown, past president of Springs Valley Bank & Trust Company, French Lick, began her 63-year banking career in 1926 at West Baden National Bank in West Baden Springs, joining the board of directors in 1949. The bank later became Springs Valley Bank & Trust Company. Brown was named president of Springs Valley in 1971, distinguishing her as one of the first female bank presidents in Indiana. In 1973, she was appointed representative of the Regional Advisory Committee on Banking Policies and Procedures, purportedly the first woman in the nation to serve in that capacity. Brown served on the Orange County Hospital Board of Trustees, the Orange County Welfare Board and the Springs Valley Community Building Corporation. In 1974, the Springs Valley Exchange Club honored her with the Book of Golden Deeds Award. Brown retired from the bank in 1983 and from the board in 1989; she passed away in 2004.
12 SEPTEMBER / OCTOBER 2022 DAVID W. HEETER Northwest Bank Muncie JOHN M. KENNEDY gbcBANK +VIIRƤIPH David W. Heeter is executive vice president, corporate ambassador/adviser for Northwest Bank, Warren, Pennsylvania. He previously was president, CEO and director of MutualBank, Muncie, and MutualFirst Financial Inc. until the merger with Northwest Bank. Heeter’s community leadership includes the Muncie Community Schools, Habitat for Humanity, Minnetrista, IU Health Ball Memorial Physicians, Community Foundation of Muncie, Muncie-Delaware County Chamber of Commerce, United Way, Muncie Family YMCA and Ball State University Foundation. A former member of the Federal Reserve Bank of Chicago Community Depository Institution Advisory Council, he was named a Sagamore of the Wabash in 2014. Heeter served the Indiana Bankers Association as 2014 chairman and is a member of the IBA 40 Year Club. He is a graduate of Ball State University and the Graduate School of Banking at the University of Wisconsin. John M. Kennedy is president, CEO and chairman of gbcBANK and its holding company, Greenfield Bancshares Inc. He joined gbcBANK in 2005 and was named president and CEO in 2012 and chairman in 2018. Prior to joining the bank, Kennedy worked at the Federal Home Loan Bank of Indianapolis and JPMorgan Chase. He is an Indiana Bankers Association south region director and previously served as a Blue & Gold Officer with the U.S. Naval Academy admissions department. Community leadership includes board and committee service, past president of the Hancock Economic Development Council, president of the John Hancock Community Development Corp., Ransburg YMCA, United Way and Scecina Memorial High School. Kennedy is a chartered financial analyst and retired Captain in the U.S. Navy, serving both active and reserves. He earned a bachelor’s degree from Purdue University and an MBA from Rutgers University. Garry D. Kleer is chairman, president and CEO of First Bank Richmond and Richmond Mutual Bancorporation. He joined the bank in 1994 and was promoted to president and CEO in 2001. Kleer’s community leadership includes service with the Boys & Girls Clubs of Wayne County, Reid Health Foundation, Richmond Symphony Orchestra and Wayne County Foundation. He has been recognized with the Junior Achievement Business Hall of Fame, Richmond/Wayne County Distinguished Community Leader, Boys & Girls Clubs Man and Youth Award, Indiana University East Chancellor’s Medallion and the IU Bicentennial Medal. Kleer is 2022 chairman of the Indiana Bankers Association and a member of the Large Community Bank Council of the Independent Community Bankers of America. He is a graduate of Indiana University, the Graduate School of Commercial Lending and the Stonier Graduate School of Banking, and he is a member of the IBA 40 Year Club. GARRY D. KLEER First Bank Richmond LEADERS IN BANKING EXCELLENCE
Hoosier Banker 13
ARTICLE SPOTLIGHT 2022 IBA Annual Washington Trip Giving voice to the Indiana banking community 14 SEPTEMBER / OCTOBER 2022
Hoosier Banker 15 This summer, the Indiana Bankers Association hosted over 70 participants in our nation’s capital for the Annual IBA Washington Trip. The fly-in is one of the most significant and impactful components of IBA’s engagement in the national political process, providing bankers with prime opportunities to talk with and educate regulators and legislators who have a significant impact on the banking industry. Highlights from the trip included meetings with Federal Reserve Gov. Michelle Bowman, Chairman Martin Gruenberg of the Federal Deposit Insurance Corp., Acting Comptroller Michael Hsu of the Office of the Comptroller of the Currency, Director Rohit Chopra of the Consumer Financial Protection Bureau, as well as gatherings with the Indiana congressional delegation, including Sen. Mike Braun and Sen. Todd Young. The event opened with a dinner and private reception at the International Spy Museum. Policy discussions with both regulators and legislators were productive. Bankers advocated for changes to the proposed Sec. 1071 rule and improvements to the Community Reinvestment Act modernization proposal, questioned the CFPB’s new approach to overdraft fees and expressed concern about proposed rules related to climate risk management. Additionally, bankers advocated for additional oversight of the Farm Credit System and/or credit unions, expressed concern surrounding the impacts of a central bank digital currency and of regulating for climate risk, and voiced support for the Enhancing Credit Opportunities in Rural America Act (ECORA). Bankers also thanked House members who voted in support of the Secure and Fair Enforcement (SAFE) Banking Act and encouraged members to support the act, should it Dax Denton 'LMIJ 4SPMG] 3JƤGIV Indiana Bankers Association ddenton@indiana.bank @ibagovrelations Ross Teare Vice President - Government Relations Indiana Bankers Association rteare@indiana.bank remain viable in other legislative proposals. Business meetings began the morning of Tuesday, July 12, with briefings from experts from the American Bankers Association and the Independent Community Bankers of America. Following were meetings with the Department of the Treasury, the director of the CFPB, FDIC Chair Gruenberg, Federal Reserve Gov. Bowman, Interim Executive Director Jim Cooper of the Conference of State Bank Supervisors and the acting director of the OCC. After a long day of meeting with regulators, attendees enjoyed dinner at the Capitol Hill Club, joined by Sen. Braun, Rep. Jim Baird, Rep. Larry Bucshon and Rep. Victoria Spartz. Wednesday, July 13, was devoted to lobbying the members of the Indiana congressional delegation on the issues important to the industry. Bankers were persistent with their messaging on the long list of policy items and provided actionable direction for the delegation to support the industry. Overall, there has been a growing list of challenges that face the industry, both in the policy and regulatory arenas, but our members were thorough in educating lawmakers about complex banking issues. Due to the growing list of concerns, the timing of the trip and level of engagement with regulators and legislators could not have been better. It is paramount that those leading the direction on policy and regulation hear from those in communities that are impacted most by these proposed changes. We would like to thank all of our members who attended the IBA Annual Washington Trip. We recognize the sacrifice of being away from your banks and your families to participate in this signature event for the Indiana banking community. The banking industry is better served by your involvement. HB
WASHINGTON TRIP GALLERY DC Trip Sponsors American Bankers Association CLA Federal Home Loan Bank of Indianapolis IBA Group Insurance Trust IBA Insurance Solutions Independent Community Bankers’ Bank Independent Community Bankers of America Krieg DeVault LLP 2*4 )\IGYXMZI &IRIƤXW 4VSƤX 6IWSYVGIW -RG Renninger & Associates LLC SmithAmundsen LLC Thank you to the following sponsors of the 2022 IBA Annual Washington Trip: Participating Banks 1st Source Bank, South Bend Bippus State Bank, Huntington Citizens State Bank, New Castle DeMotte State Bank *EVQIVW ERH 1IGLERMGW *IHIVEP &PSSQƤIPH Farmers and Merchants Bank, Laotto The Farmers Bank, Frankfort First Bank of Berne First Bank Richmond First Farmers Bank & Trust Co., Converse First Federal Savings Bank, Huntington First Federal Savings Bank, Rochester First National Bank, Cloverdale First Savings Bank, Jeffersonville The Fountain Trust Company, Covington KFG&%2/ +VIIRƤIPH German American Bank, Jasper Home Bank, Martinsville Horizon Bank, Michigan City Huntington National Bank, Columbus, OH Mutual Savings Bank, Franklin NWSB, Charlestown Old National Bank, Evansville Peoples Bank, Munster Scottsburg Building and Loan Association Security Federal Savings Bank, Logansport Springs Valley Bank & Trust Company, Jasper WesBanco Bank, Wheeling, WV The following banks helped make the 2022 IBA Annual Washington Trip a success: 16 SEPTEMBER / OCTOBER 2022
A hammer is the right tool for the job when the job is putting nails into wood. It is the wrong tool for the job when the job is painting a wall. Bankers have been handed a hammer and asked to paint a wall. The tools you’ve been provided to help QEOI SFNIGXMZI JYPP] MRJSVQIH ǰ RERGMEP HIGMWMSRW QE] JEPP [SIJYPP] WLSVX SJ XLI XEWO EX LERH 8LI QIXVMGW numbers, and calculations are accurate, but they might provide an incomplete framework for optimal decision-making. At Performance Trust, we equip institutions with the right tools for the job — whether you seek to grow organically, grow through acquisition, or make a strategic exit on favorable terms. CONTACT US TODAY TO LEARN MORE: Matt Kennedy, CFA®, Managing Director şƀLJĉŠ ƖƖíĚLJĂĂƀ mkennedy@performancetrust.com ©2022 Performance Trust Capital Partners, LLC. All rights reserved. Member FINRA/SIPC. performancetrust.com Do you have the right tools for the job?
18 SEPTEMBER / OCTOBER 2022 FLD LinkedIn Group Engaging members for connectivity Josh Myers Vice President - Member Engagement Indiana Bankers Association jmyers@indiana.bank @joshmyersIN FLD FOCUS The Future Leadership Division of the Indiana Bankers Association was created years ago to connect emerging leaders in the Indiana banking community. Historically, connections were made by attending networking events and other in-person opportunities. Today, with the ease of social networking platforms, the FLD is taking advantage of online connectivity to create opportunities for all FLD members to engage and grow their peer networks – without the need to travel or take time out of the bank. This year, the FLD is continuing to grow networking opportunities by reinvigorating the FLD LinkedIn group to connect with peers anytime, anywhere. I highly encourage all FLD members who are interested in joining to connect by clicking the FLD logo on this page in HB Digital, or visit linkedin.com/groups/8688085. The FLD LinkedIn page was created a few years ago and has been a reliable source to stay up to date with upcoming events and news. With guidance from the FLD Advisory Board, the LinkedIn page now offers more opportunities. Through this resource, FLD members can: % Participate in an online FLD directory to connect with peers and grow banking networks. % Share resources for leadership growth and professional development. % Interact and learn from peers on various banking leadership topics. FLD Advisory Board members are volunteering their time and expertise to help drive participation in the FLD LinkedIn group. Group members can expect to see helpful articles that Advisory Board members have uncovered and receive questions for discussion that are relevant to emerging leaders. The group will be bankerled so that material posted is relatable to others in the industry. As a reminder, the FLD’s LinkedIn group is for FLD members only. It is an opportunity for emerging leaders in the industry who want to connect further and expand their peer networks while sharing conversations and resources for the benefit of others. As with other services and programs that the IBA provides, the success of the FLD LinkedIn group will depend on the participation of FLD members. We hope that all who join will enjoy this online platform as we connect and grow together. If you are not already an FLD member and would like to learn more about the benefits FLD provides, visit indiana.bank/future-leadership-division. For questions, please contact me at jmyers@indiana.bank, 317-3337165. HB Laura Shake, financial analyst with The National Bank of Indianapolis, has joined the Indiana Bankers Association’s Future Leadership Division Advisory Board. She has served with the bank for two years. Shake is a graduate of the University of Indianapolis. New FLD Advisory Board Member
Already Solving Your Next Challenge. Bank dealer services offered through Institutional Investments, Bank of Oklahoma, which operates as a separately identifiable trading department of BOKF, NA. Services may be offered under our trade name, BOK Financial Institutions Group. BOKF, NA is the bank subsidiary of BOK Financial Corporation. Some services may be offered through BOK Financial Securities, Inc., member FINRA/SIPC, and an affiliate of BOKF, NA. Investment products are: NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE We go above. So you can go beyond. From regulatory requirements to working toward enhancing your financial institution’s performance, the challenges are growing even more demanding by the day. Fortunately, we understand what you’re up against. We can help you navigate the many complexities of your operation with confidence, as well as provide you with solutions that are backed by our own experience and resources. We know how to get you there, because we’ve already been there. Learn more at www.bokfinancial.com/institutions. BUDGETING PROFIT PROJECTIONS ALCO CAPITAL PLANNING DECAY/BETA ANALYSIS REGULATORY INVESTMENT PORTFOLIO INVESTMENT MIX INTEREST RATE RISK LOAN PRICING ASSET DURATION LIQUIDITY MANAGEMENT BROKERED FUNDING
20 SEPTEMBER / OCTOBER 2022 Asset Pricing and ALM Strategy DIRECTORS / SENIOR MANAGEMENT Andrew Okolski Senior Financial Strategist The Baker Group andyo@GoBaker.com The Baker Group is a Preferred Service Provider of the Indiana Bankers Association and an IBA Diamond Associate Member. After navigating the 2008 housing crisis and the 2020 pandemic, banks now face the most feared economic monster of all – inflation. The Consumer Price Index year-over-year jumped 8.6% in May, backed by broad price increases across many sectors. This is well above the Fed’s normal target of 2% and increases the chances of more severe economic headwinds. If the Fed aggressively fights inflation through higher rates and balance sheet reduction, it will add significant downward pressure on consumers and the overall economy. If it is not aggressive enough, inflation can remain elevated for a longer period of time, also adding significant downward pressure. While everyone had hoped for a breather coming into 2022, instead we find ourselves in an equally challenging situation in which asset pricing and asset/ liability management (ALM) strategy are of utmost importance. For most of the past couple of years, it was income and capital pressures that kept many up at night. The good news is that today’s higher yields offer quick relief in those categories. Unfortunately, we now have some new pressures coming in the form of falling asset market values. While every institution is unique, the function of managing interest rate risk (specifically market risk) can almost always be improved through the inclusion of economic value of equity (EVE) and income simulation results. Doing so is key when discussing overall asset pricing, along with the difference between ALM results and executed strategy. It’s important to note that the rate of change in asset/ liability management is as important as the overall amount of change. This is why asset pricing becomes so important in this type of volatile interest rate environment. The faster interest rates rise, the greater the negative impact, particularly on economic value of equity. Mainly this is because quick rate movements leave depository institutions little time to react and adjust their asset yields. We can only add higher-yielding investments and write higher-yielding loans so fast. Often this means that the first few quarters during a rising rate trend can magnify and even potentially overstate our interest rate risk (IRR) as measured through EVE. So, what can we do to combat this? Part of the answer is that we need to quicken the pace of asset repricing on our balance sheets. This is by no means an easy task, but it is necessary and should be a top priority. Increased loan demand is a welcome sight, especially after what we have experienced the past two years. The tricky part is that those new loans need to be at or above current market levels to begin softening our EVE risk. It doesn’t help our IRR position to be adding loans at 2021 levels. The market currently expects fed funds to reach 2.5% to 3% by the end of this year, and short investments (without credit risk) can easily earn 3% yield or more. All of these factors must now be taken into account when discussing and adjusting asset pricing strategies. This is one of the reasons that including ALM results in every strategic decision is critical. It greatly shortens our reaction time and reduces how far off the path we can find ourselves in volatile environments. The year 2022, and likely 2023, will require more frequent asset/ liability and strategic planning sessions. At the same time, we need to ensure that the decisions we make in those meetings are in line with the assumptions we use in our ALM documents. Otherwise, we are basing our strategic movements on outdated directions. For example, what if our ALM assumes that new
Hoosier Banker 21 loan volume will keep up with market rates (in a rising rate environment) to increase yield and limit EVE risk? Yet at our next asset/liability committee/board meeting, the temptation to continue generating additional loan volume by not raising loan rates is too strong to pass up? We could end up with a significantly higher level of IRR than our ALM results originally showed. The same can be noted on the deposit side. So, ALCO decisions and ALM assumptions must be kept in line to ensure consistent accuracy of future strategic planning. We must always look to define, measure and then manage our risks. Hopefully, many of you already have this management process in place and are well prepared to handle this environment’s new challenges. For those who do not have this process in place, there is still time to align your internal systems to improve your institution’s ability to react quickly and correctly. That window of opportunity is closing, however, and now is the time to have those conversations. HB Year-Over-Year Percentage Change 2/10/2017 - 5/31/2022
22 SEPTEMBER / OCTOBER 2022 Rod Lasley 'LMIJ 3TIVEXMRK 3JƤGIV Indiana Bankers Association rlasley@indiana.bank @rodlasley Zero Tolerance In flood determinations and insurance PRODUCTS & SERVICES PROFILE Floodplain Consultants Inc. is a Preferred Service Provider of the Indiana Bankers Association. We hear the term “zero tolerance” often today, and it applies to banking in the areas of flood determinations and flood insurance. It’s especially important if your bank or flood determination provider has not performed a determination or missed something in the results. There is no room for errors when it comes to flood determinations and insurance. For example, if a structure is close to the 100-year floodplain, does the system default to the conservative answer that flood insurance is required? What if that is not the correct answer? Many companies are using fully automated systems in which the potential for error is significant. Computers often accept approximate locations as real locations, thereby pushing the source material far beyond its real level of accuracy. Their guess becomes your liability and your customer’s headache. If you have been burned by automated inaccuracies or flood zone issues regarding your real estate transactions, Floodplain Consultants Inc. is a quality solution to consider. FCI has been priding itself on accuracy and reliability since 1991. Floodplain Consultants Inc. is not trying to be a nationwide company. It focuses solely on the Midwestern states including Indiana, Illinois, Kentucky, Ohio, Tennessee and Michigan. By being focused, it is able to maintain its site inspection policy, provide superior certifications and have greater familiarity with the communities it serves. FCI serves more than 300 lenders in the Midwest with flood zone determinations, census tract analysis, floodplain management and life-of-loan services. A longtime Preferred Service Provider of the Indiana Bankers Association, Floodplain Consultants is active with the IBA and currently serves over 60 Indiana banks. A unique quality that sets FCI apart from competitors is that if there is any kind of question regarding the location of a structure in relation to a Special Flood Hazard Area, FCI will do a site inspection with its own personnel – no subcontracting! Its team gathers all needed information to provide the most accurate determination. On the other hand, if there is no question about the structure or property, then the determination is completed within 24 hours and sent back to the lender. FCI also provides life-of-loan services as part of the determination process. This gives the lender the peace of mind to know that if a Special Flood Hazard Area changes and it affects a property that has been reviewed, the lender will be notified so that flood insurance can be obtained. For this reliable service, FCI will be slightly more expensive than the fully automated competitor. Wouldn’t you rather be sure, though, that your collateral is properly designated, instead of worrying whether your collateral will be destroyed with no coverage during the next catastrophic event? Customer service is a huge factor for FCI. If at any time a lender or borrower has questions or would like
Hoosier Banker 23 guidance on procedures or available options, the FCI team is happy to provide assistance over the phone or in person. FCI professionals have met with builders, developers and real estate agents at the request of banks to head off potential floodplain issues before projects have begun. All of these services are provided at no extra charge. Another area of service is the availability of the borrower to have FCI rate a structure to ensure the flood insurance premium being quoted by an insurance agent is accurate. Floodplain Consultants Inc. provides an excellent product and offers outstanding service to its clients. It also continues to develop relationships with core software providers to integrate the flood determination ordering process into the bank’s core software, creating an efficient method of completing this federal requirement. With this high level of quality service, zero tolerance will not be a term you will hear during your next exam. To learn more about Floodplain Consultants, please contact Craig Callahan at 800-945-0246 or ccallahan@floodplain.com; or contact me, Rod Lasley, at 317-387-9380 or rlasley@indiana.bank. HB BANKING CENTER NEWS The Farmers Bank, Frankfort, hosted an open house on July 7 for its loan production office in Carmel. The office, located at 11350 Representatives of The Farmers Bank and OneZone Chamber of Commerce participate in a ribbon-cutting GIVIQSR] JSV XLI STIRMRK SJ XLI FEROŭW RI[ PSER TVSHYGXMSR SJƤGI MR ,EQMPXSR 'SYRX] N. Meridian St., Ste. 400, Carmel, provides business and consumer lending services to the Hamilton County market. HB "We visit the site!" www.floodplain.com F C I Floodplain Consultants Inc. 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. 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 #BetterInBanking Flyer Available
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