Official Publication of the Community Bankers Association of Kansas ISSUE 2 2022 10 14 RISING TIDE — BONDS TO OWN FOR A RATE HIKE ENVIRONMENT COMING RATE HIKE SHOULD NUDGE BANKERS TO FOCUS ON DEPOSIT MANAGEMENT STRATEGY
TIRED OF BORROWING MONEY BEING MORE COMPLICATED AND DIFFICULT THAN IT NEEDS TO BE? Bank Stock and Bank Holding Company Stock Loans done the simple way Bank mergers, acquisition loans and refinances up to $50 million Approval typically within 2 to 3 days and sometimes immediately In many cases the loan can be started, closed and funded in less than 2 weeks No Correspondent Bank Account relationship required If the Federal Reserve approves it we can likely get the deal done for you Standard Commercial Loan Documentation used in most cases We won’t restrict you to unnecessary covenants Limited or no reporting requirements Limited or no origination costs Low interest rates Principal payments often determined with the borrower’s input on a year by year basis In many circumstances we accept bank capital growth instead of loan principal reduction We will come to you! Most loans initiated and closed at the borrowers home or office. Deal directly with a lender/owner who is a CPA who understands the bankin industry. Although we cannot give direct advice, we have 35 years of industr experience and can make your job far less stressful and time consuming. We will understand your transaction. You do not need to educate the lender. Our belief is to make the loan and then stay out of the banker’s way and let you do your job. You will only see us when you choose to. Call RyanGerber or Rick Gerber at 1.866.282.3501 or email ryang@chippewavalleybank.comor rickg@chippewavalleybank.com TIRED OF BORROWING MONEY BEING MORE COMPLICATED AND DIFFICULT THAN IT NEEDS TO BE? Bank Stock and Bank Holding Company Stock Loans done the simple way Bank mergers, acquisition loans and refinances up to $50 million Approval typically within 2 to 3 days and sometimes immediately In many cases the loan can be started, closed and funded in less than 2 weeks No Correspondent Bank Account relationship required If the Federal Reserve approves it we can likely get the deal done for you Standard Commercial Loan Documentation used in most cases We won’t restrict you to unnecessary covenants Limited or no reporting requirements Limited or no origination costs Low interest rates Principal payments often determined with the borrower’s input on a year by year basis In many circumstances we accept bank capital growth instead of loan principal reduction We will come to you! Most loans initiated and closed at the borrowers home or office. Deal directly with a lender/owner who is a CPA who understands the banking industry. Although we cannot give direct advice, we have 35 years of industry experience and can make your job far less stressful and time consuming. We will understand your transaction. You do not need to educate the lender. Our belief is to make the loan and then stay out of the banker’s way and let you do your job. You will only see us when you choose to. Call RyanGerber or Rick Gerber at 1.866.282.3501 or email ryang@chippewavalleybank.comor rickg@chippewavalleybank.com Bank mergers, a quisition loans nd re�inances up to $50 million ✓ Approval typically within 2 to 3 days and sometimes immediately ✓ In many cases the loan can be started, closed and funded in less than 2 weeks ✓ No Correspondent Bank Account relationship required ✓ If the Federal Reserve approves it we can likely get the deal done for you ✓ Standard Commercial Loan Documentation used in most cases ✓ We won’t restrict you to unnecessary covenants ✓ Limited or no reporting requirements ✓ Limited or no origination costs ✓ Low interest rates ✓ Principal payments often determined with the borrower’s input on a year by year basis ✓ In many circumstances we accept bank capital growth instead of loan principal reduction ✓ We will come to you! Most loans initiated and closed at the borrower’s home or of�ice. Deal directly with lender/owner who is a CPA and un erstands the banking industry. We hav 35 years of industry experience and can make your job far less stressful and time consuming. We understand transactions. ur belief is to ake the loan and stay out of the banker’s way and let you do o r job. Call Ryan Gerber or Rick Gerber at 1.866.282.3501 or email ryang@chippewavalleybank.comor rickg@chippewavalleybank.com IS BORROWING MONEY MORE COMPLICATED AND DIFFICULT THAN IT NEEDS TO B ? Bank Stock and Bank Holding Company Stock Loans Done the Simple Way TIRED F BORR WING M NEY BEING ORE COMPLICATED AND DIFFICULT THAN I NEEDS TO B ? Bank Stock and Bank Holding Company Stock Loans done the simple way Bank mergers, cquisition lo ns and refina ces up to $50 million Approval typically within 2 to 3 days and s metime immediately In many cases the lo can be started, losed and funded in less tha 2 weeks No Correspondent Bank Account rel tionship required If the Federal Reserve app oves it w can likely get the deal done for you Standard Commercial Loan Documentatio used in most cases We won’t restrict you to unnecessary covenant Limited or no repor ing requi ments Limited or no origination costs Low interest rates Principal payments ft n determined with the borrower’s input on a y ar by year b sis In many circumstances we accept bank capital growth inste d of loan principal reduction We will come to you! Most loans initiated and closed at the borr wers home o ffice. Deal directly with a lender/owner who is a CPA w o understands the banking industry. Although e cann t give direct advic , we have 35 years of industry experience and can m ke your job far less stressful and time consuming. We will und r tand your t ansaction. You do not need to educate the lender. Our belief is to make the loan and en stay out of the banker’s way and let you do your job. You will only see us when you choose to. Call RyanGerber or Rick Gerber at 1.866 282.3501 or ema l ryang@chippew valleybank.comor rickg@chippewavalleybank.com
CONTENTS Issue 2 | cbak.com © 2022 Community Bankers Association of Kansas | The newsLINK Group, LLC. All rights reserved. In Touch is published six times each year by The newsLINK Group, LLC for the Community Bankers Association of Kansas and is the of f icial publication for this association. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of the Community Bankers Association of Kansas, its board of directors, or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. The Community Bankers Association of Kansas is a collective work, and as such, some articles are submitted by authors who are independent of the Community Bankers Association of Kansas. While In Touch encourages a first-print policy, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at 855.747.4003. Michele C. Lundy Chairman Tampa State Bank Irv Mitchell Chairman-Elect Wilson State Bank Joe Rottinghaus Secretary/Treasurer Conway Bank Jon W. Pope Immediate Past Chairman Peoples State Bank DIRECTORS Josh Bailey Security State Bank Kent Culbertson First National Bank & Trust Tim Mattack FNB Washington Margaret Nightengale Grant County Bank Tom Pruitt Peoples Bank & Trust Co. Jack Rowden Citizens State Bank Melisa Sorenson Legacy Bank Jim Wayman ESB Financial STATE ICBA DIRECTORS Tanner Johnson Swedish-American Bank Shawn Mitchell President and CEO shawn@cbak.com Nikki Dohrman Senior Vice President/ Executive Director nikki@cbak.com Yvonna Hansen Vice President of Member Services yvonna@cbak.com Stuart Little Little Government Relations, LLC CBA STAFF 2022 CBA OFFICERS AND DIRECTORS IN EVERY ISSUE: 18 ANNIVERSARIES 20 PRODUCTS AND SERVICES REFERENCE LIST 23 UPCOMING WEBINARS 6 FLOURISH By Rebeca Romero, ICBA 8 TALENT AMENDMENT EXPANDED — THE MLA RULE By William J. Showalter, CRCM, CRP Senior Consultant; Young & Associates, Inc.; Kent, Ohio 10 RISING TIDE — BONDS TO OWN FOR A RATE HIKE ENVIRONMENT By Jim Reber, ICBA Securities 14 COMING RATE HIKE SHOULD NUDGE BANKERS TO FOCUS ON DEPOSIT MANAGEMENT STRATEGY By Susan Sharbel, Senior Advisor, Advisory Services, and Dave Koch, Director, Advisory Services 19 ANNOUNCEMENTS 6 PAGE
FMSI www.fmsiconsulting.com 913.955.3355 FMSI is a small business founded and located in Kansas, specializing in assisting community banks to succeed, a mission consistent with core CBA values. We have partnered with community banks for nearly 25-years providing core advisory services including asset/ liability, investment, and liquidity management. FMSI advisors actively assess market conditions and bank balance sheets of different size, mix, and capital levels. Market conditions are constantly changing presenting opportunities and challenges for CBA member banks. Interest rates are increasing for the first time in nearly a decade and now is a perfect time to partner with a trusted, industry leader. Establishing an FMSI relationship provides confidence your bank is optimizing the balance sheet, deploying necessary strategies, maximizing profitability, and managing balance sheet risks. FMSI is a Kansas CBA Endorsed Provider 5 ISSUE 2 | 2022
“In a world that’s so full of noise, the story we’re telling is compelling and resonates with our customers, because it’s one of work centered around human connection, care and community. ” Harvard University education professor Dr. Howard Gardner said, “Stories constitute the single most powerful weapon in a leader’s arsenal.” As community bankers, we recognize the truth in that statement, because our stories differentiate us, shape public perceptions and allow us to thrive in our roles as community caretakers. Right now, an unprecedented number of parties want to either be defined as banks or provide banking services. This competition has mounted over the past couple of years, making our unique stories more important than ever before. FLOURISH BY REBECCA ROMERO, ICBA cbak.com 6 In Touch
Where I’ll Be This Month I’ll be wrapping up ICBA LIVE in San Antonio, Texas, and then joining our friends at Independent Bankers Association of Texas (IBAT) for the annual Tour de Texas. Connect with Rebeca on Twitter @romerorainey one of work centered around human connection, care and community. We have an incredible opportunity to show that what we do matters to the day-to-day workings of the communities we serve. So, let’s arm ourselves with the stories of our leadership to help stake a claim on the future of banking. Our customers deserve it. INFORM • IMPACT • INSPIRE YOU'RE AN ADVOCATE FOR YOUR COMMUNITY, BE AN ADVOCATE FOR YOUR INDUSTRY. REGISTRATION IS FREE FOR ALL OF OUR NATION'S COMMUNITY BANKERS REGISTER TODAY ICBA.ORG/CAPITALSUMMIT MAY 1–4 WASHINGTON, DC Our community-based missions and customer-first relationships distinguish us in today’s crowded marketplace. That’s why we must keep working at telling the story of who we are. We need to ensure that customers know and understand what makes us different, because what we stand for matters. Once, when my youngest daughter was about seven years old, a megabank was running a large-scale ad campaign focusing on how it served its “community.” When my daughter heard the commercial, a look of horror washed over her face. She turned to me and asked, “How can they say that? They’re not a community bank!” My first thought was that she had been listening to too many of my speeches, but at a second pass, I realized it was her experiences with her community bank — fiestas, county fairs, school fairs, holiday gatherings and more — that created that emotional connection for her. Those collective encounters shaped her perception of what it means to be a community bank. This just proves that it’s not only the stories we tell, but the actions behind them, that make the impact. As relationship bankers, we go far beyond our financial offerings to create a connection with our customers. And we need to find a way to amplify that message. As you read this, I hope you will consider how you can better tell your stories to demonstrate that we are different — not just in words but, more importantly, in deeds. In a world that’s so full of noise, the story we’re telling is compelling and resonates with our customers, because it’s 7 ISSUE 2 | 2022
About five years ago, a new rule that impacted financial institution lending to members of the military went into effect. But this one could have been overlooked by financial institutions because it did not come from the traditional bank and thrift regulators. The Department of Defense issued the new rule to implement 2015 changes to the Military Lending Act (MLA), originally known in 2006 as the Talent Amendment. Some bankers thought they did not make loans impacted by MLA rules because they were not extending payday, vehicle title, or refund anticipation loans — the targets of the original Talent Amendment. But, the revised MLA covers many more consumer loans to service members. MLA vs. SCRA One area of confusion is in thinking that the MLA is somehow part of the Servicemembers Civil Relief Act (SCRA). While both laws affect lending to members of the military, there are basic differences in when and to what types of credit their protections apply and what those protections are. The SCRA applies to loans extended to servicemembers in their civilian life, and its protections kick in when they enlist or are called up to active duty. SCRA provisions apply to all types of credit, including business loans to service members. On the other hand, the MLA applies only to consumer credit (with certain exceptions) entered into by active-duty service members. MLA-covered loans The limited coverage of the Talent Amendment, noted above, meant that it did not concern most bankers because they did not generally make those types of credits. But this is not so with the new MLA. It applies to “consumer credit” to a covered borrower (for personal, family, or household purposes) subject to a finance charge or payable by written agreement in more than four installments — which is like the familiar Regulation Z we have dealt with for over 45 years. There are exceptions. The MLA rule does not apply to: • Mortgage loans, that is, loans secured by a dwelling. These include home purchase loans, home equity loans, and home equity lines of credit. • Loans expressly to purchase a motor vehicle and secured by the vehicle • Loans expressly to purchase personal property and secured by that property TALENT AMENDMENT EXPANDED — THE MLA RULE BY WILLIAM J. SHOWALTER, CRCM, CRP SENIOR CONSULTANT; YOUNG & ASSOCIATES, INC. Associate Member cbak.com 8 In Touch
Identifying a covered borrower Lenders are permitted to ask applicants if they are members of the military, but this way will not provide the lender with the protection of a safe harbor in the MLA rule. To avail itself of the safe harbor, a lender must use one of two specified ways to conclusively determine coverage. The safe harbor methods are: • Querying the MLA lookup webpage from the Defense Manpower Data Center (DMDC) at mla.dmdc.osd.mil. After the lender enters the consumer’s information in the search form, the system will return a certificate identifying whether the borrower is an MLA-covered service member or a family member. • Using information in a credit report from a nationwide consumer reporting agency or a reseller to determine MLA status. The nationwide bureaus are granted access to the MLA database to make these determinations and provide some sort of MLA indicator in a borrower’s credit report. Covered borrower status must be determined before a loan is closed, not after closing, to see if MLA protections should have applied. MLA requirements The three general protections afforded covered borrowers by the MLA rule are: 1. Military annual percentage rate (MAPR) of no more than 36 percent. The MAPR differs from the Regulation Z APR because it is an “all in” — taking into account not only the finance charge but also many fees Regulation Z excludes from the finance charge (including some application and participation fees, credit insurance fees and premiums, and fees for credit-related ancillary products). 2. Disclosure of a statement of the MAPR (not necessarily its numerical value) describing the charges imposed that go into the calculation of the MAPR. A model statement is provided in the rule. This disclosure must be given both orally and in writing, but the oral disclosure may be given either in-person or through a toll-free telephone number. 3. Restrictions against lenders requiring waivers of the MLA protections, mandated use of arbitration, requiring allotments of military pay for loan repayment, and imposing prepayment penalties. Penalties & resources Failure to follow the MLA rule can result in: • Noncomplying notes or credit agreements being void from inception • Monetary penalties, including punitive damages • Reputation damage (e.g., for “overcharging” military members) The 2015 MLA rule is available at https://www.govinfo.gov/ content/pkg/FR-2015-07-22/pdf/2015-17480.pdf. In 2016, the DoD issued an Interpretive Rule that answers a number of questions that have been posited to the department about its 2015 rule, and this interpretive document can be found at https://www.govinfo.gov/content/pkg/FR-2016-08-26/pdf/201620486.pdf. The DoD updated its Interpretive Rule in December 2017 by revising three answers and adding one new question and answer, which can be accessed at https://www.govinfo.gov/ content/pkg/FR-2017-12-14/pdf/2017-26974.pdf. Another resource useful to lenders is an MLA Flowchart issued by the Consumer Financial Protection Bureau (CFPB), available at https://files.consumerfinance.gov/f/documents/cfpb_ servicemembers_mla-applicability-flow-chart.pdf. William J. Showalter, CRCM, CRP, is a Senior Consultant with Young & Associates, Inc. (younginc.com), with over 35 years experience in compliance consulting, advising and assisting financial institutions on consumer compliance and compliance management issues. He also develops and conducts compliance training programs for individual banks and their trade associations and has authored or co-authored numerous compliance publications and articles. Bill can be reached at wshowalter@younginc.com. One area of confusion is in thinking that the MLA is somehow part of the Servicemembers Civil Relief Act (SCRA). While both laws affect lending to members of the military, there are basic differences in when and to what types of credit their protections apply and what those protections are. 9 ISSUE 2 | 2022
RISING TIDE — BONDS TO OWN FOR A RATE HIKE ENVIRONMENT BY JIM REBER, ICBA SECURITIES cbak.com 10 In Touch
Endorsed Partner 11 ISSUE 2 | 2022
Community bankers are nothing if not predictable, and I mean that as a compliment. They are bright, enterprising, have a nose for the risk/reward dynamic and a sense of duty and loyalty to their customers and staff. They’re also deathly afraid of rising interest rates. The last is understandable, speaking as one who has: A) worked for a bank when overnight rates were double-digit; B) personally borrowed money for a home at 12%: and C) worked in financial services during the near-death of the thrift industry. We know how low rates can go. What we don’t know is how high they can go, nor for how long. But what’s a bit curious about this widespread fear is that by a number of measures, community banks in 2022 stand to profit from higher interest rates. This comes from banking regulators, interest rate risk modelers, and even bankers themselves. I suppose the notion of a bond portfolio losing four, five or six percent of its value drives some of this thought process. So, as we haven’t had to endure a rate hike scenario since 2018, we’ll use the rest of this column to remind ourselves which bonds stand a good chance of performing well if higher rates do indeed prevail in the near future. Old school Certainly, the bonds that fit the most traditional definition of a floater have very short reset periods, are indexed to money market equivalents, and have large or no caps, both periodic and lifetime. The model for such security is a Small Business Administration (SBA) 7(a) pool. These securities float based on the prime rate, which is 100% correlated to fed funds. Most SBAs reset monthly or quarterly and have no caps — so wherever prime goes, so goes your yield. The rub on SBAs, at least from a risk standpoint, is that many of them come with large premium prices of 108, 109 or even higher. This exposes the investor to unwelcome prepayments. Still, the many benefits (have we mentioned 0% risk weighting?) make them attractive to short investors. It’s not uncommon for them to yield around prime minus 2.75%, which will beat fed funds by about 25 basis points (0.25%). They are true money market alternatives. Mortgage floaters These days there are few true mortgage-backed securities (MBS) floaters. The ones that do exist usually have an extended period of time with a fixed rate before they convert to adjustable. This “extended period” can be three, five, seven years, or more, so they’re really not floaters yet. However, one day they will adjust and help their market value stay relatively stable. Something new about these is that the Secured Overnight Financing Rate (SOFR) index is becoming more visible. SOFR is the U.S. alternative to London Interbank Offered Rate (LIBOR), and it has generally tracked fed funds so far. And, since these will have prices closer to par, the investor doesn’t have to take a gigantic bite of prepaying risk. Starting yields are wholly dependent on the fixed-rate period and other variables, but they deserve a look. Even if you don’t own a floater, an easy-to-execute trade that will help limit your price volatility is “up-in-coupon” securities. It doesn’t matter if they’re MBS, agencies, or munis: The bigger the stated interest rate, the greater the cash flow and the lower the duration. cbak.com 12 In Touch
Clip coupons Even if you don’t own a floater, an easy-to-execute trade that will help limit your price volatility is “up-in-coupon” securities. It doesn’t matter if they’re MBS, agencies, or munis: The bigger the stated interest rate, the greater the cash flow and the lower the duration. The best example of this strategy is a tax-free municipal bond that has a big stated interest rate, or “coupon.” It’s common to see a newly hatched security with a 4% rate that comes to market at an original issue price of 120 or more. This is a quality to be embraced. For one thing, the fact that the yield is tax-free makes the security less volatile than a taxable bond. If (and when it appears) interest rates rise, the large interest payments will further help keep the value of the bond from falling off the table. Do-it-yourself There’s another way to inject floating rate securities into your bond portfolio, and that’s to build them yourself. It’s a simple task to buy and own a collection of long-duration municipal bonds — that’s how they typically come to market. A recent innovation is the ability to execute an interest rate swap to instantly, or at some designated point in the future, turn the munis into floaters. Interest rate product providers are equipped to price out transactions whereby a community bank can convert a bond, a collection of bonds, or a subsector of your balance sheet into short-duration assets that will see their yields improve every time Jim Reber (jreber@icbasecurities.com) is president and CEO of ICBA Securities, ICBA’s institutional, fixed-income broker-dealer for community banks. March webinar to discuss rising rate strategies ICBA Securities and its exclusive broker Vining Sparks continues its webinar series, Community Banking Matters, on March 8 at 10 a.m. Central. The timely topic is “Balance Sheet Strategies in an Expected Tightening Cycle.” CPE credit of one hour is offered for each webinar. For more information, visit viningsparks.com. the Fed has a “policy adjustment.” Maybe the best news is that these transactions can now be executed in sizes that fit your community bank’s needs. How many rate hikes might we see this year? That’s the subject of myriad conversations around the board room, water cooler, and ALCOs. I’m pleased to report that investments built for rising rates can take on a variety of appearances and are fully accessible to your community bank. 13 ISSUE 2 | 2022
COMING RATE HIKE SHOULD NUDGE BANKERS TO FOCUS ON DEPOSIT MANAGEMENT STRATEGY BY SUSAN SHARBEL, SENIOR ADVISOR, ADVISORY SERVICES, AND DAVE KOCH, DIRECTOR, ADVISORY SERVICES Tighter Fed policy puts ALM in focus The Federal Reserve’s signal that it will start raising interest rates in March 2022 generated a collective high-five throughout the banking industry. Bankers have been poised and waiting for interest rates to rise as they are counting on reaping the rewards of an asset-sensitive balance sheet. However, without proper planning, the joy may be short-lived. The Fed news should give bankers even more reason to consider their asset/ liability management (ALM) and deposit management strategies, policies, and programs. Generally, bankers expect the yield on earning assets to increase sooner than the costs of their deposits. However, if a financial institution is to capture any of the projected economic growth moving forward, core funding is key. Now is actually a good time to look at growing deposits. Market volatility could generate another surge One risk in growing deposits is that the current depositor mix includes a level of “surge deposits” that, while core in nature, are not well defined in terms of price sensitivity. To retain the surge and grow new funding, institutions may need to increase rates paid to depositors sooner and more than projected. Otherwise, they risk losing funds and customer primacy to competitors, the stock market or other investments as depositors seek even higher yields. However, in recent weeks we have witnessed uncertainty on Wall Street about tighter Fed policy, inflation, supply chain disruptions, labor shortages, and the pandemic’s longevity. The Dow Jones Industrial Average (DJIA) has been down more than 6% over the last month, and some analysts are projecting lower returns from equities over the next decade. Plans for aggressive rate increases and a suspension of asset purchases have many firms projecting slower growth and reduced yields for equities. If the market trends downward for long, banks and credit unions worried about money walking out the door might be surprised to find that does not happen. Financial institutions may see yet another flight to safety from investors looking for certainty after enjoying a good run in the market. As a result, financial institution deposit levels may increase yet again — a surge on surge! What’s your deposit management strategy? Pricing the existing deposits profitably while considering the potential new surge requires institutions to have a strong plan cbak.com 14 In Touch
Susan Sharbel brings over 35 years of expertise in the banking industry, with a focus on asset/ liability management and regulatory compliance. Prior to joining Abrigo, she was an ALM consultant leading ALM model implementations and managing the quarterly ALM process, support, and analysis for nearly 40 banking clients. As a Senior Advisor in Abrigo’s Advisory Services Group, Susan consults with financial institutions on their overall asset/liability management needs. Dave Koch is Director of Advisory Services with Abrigo and a lead faculty member of the Graduate School of Banking – Madison. Dave works with financial institutions on their capital planning, strategy development, loan & deposit pricing, and overall Asset/Liability management to meet the earnings and growth needs while managing regulatory concerns for his clients. Call me at 480.259.8280 Tracy Peterson Based in Ariz. covering Arizona, Colorado, Kansas and Missouri Together, let ’s make it happen. Leverage our large lending capacity, up to $20 million on correspondent loans. Our lending limits are high enough to accommodate what you need, when you need it. We do not reparticipate any loans. Member FDIC 31518 Commercial & ag participation loans Bank stock & ownership loans Bank building financing Business & personal loans for bankers Why choose Bell as your bank’s lending partner? thought out in advance for product and pricing approaches to manage marginal costs. They also need to act quickly on deploying these funds into appropriate assets to manage the margin. How will a financial institution know which customers will do what and how to take advantage of the opportunities presented? Understanding the makeup and behavior of depositors over time through various cycles is key. This understanding across cycles needs to include: • Attributes related to demographics, generational factors, and relationships • Market rate correlations to pricing • Rate sensitivity Armed with this knowledge, an institution can strategically develop appropriate pricing and mix strategies to take advantage of opportunities to grow the deposit base. Additionally, considering how long accounts are likely to stay on the balance sheet can help leaders identify how to best leverage their deposits to provide low-cost funding to finance strategic growth. Today, the asset/liability management process is front and center to ensure margins act — as so many hope and believe they will — as rates increase. If the market trends downward for long, banks and credit unions worried about money walking out the door might be surprised to find that does not happen. Financial institutions may see yet another flight to safety from investors looking for certainty after enjoying a good run in the market. As a result, financial institution deposit levels may increase yet again — a surge on surge! 15 ISSUE 2 | 2022
BRUCE GOETSCH National Sales Manager bgoetsch@myservion.com 651-497-4734 myservion.com We provide financial institutions and borrowers the support they need to reach their financial goals. Re-envisionyour mortgage strategy. Correspondent Retail Wholesale Delegated Conventional FHA, VA, USDA Jumbo/Non-Conforming Quality control Contract processing Contract closing Servicing Appraisal review Servion Mortgage is a DBA of Servion, Inc. NMLS #1037 Equal Housing Lender partnership channels mortgage products additional services CBA’S 44TH ANNUAL CONVENTION AND TRADE SHOW Save the Date Hyatt Regency in Wichita Kansas JULY 13 - 15, 2022 To make your hotel reservations call (800)233-1234and remember to mention you are with the CBA room block. The room block consists of single/double hotel guest rooms starting at $151/night. The CBA room block ends June 28, 2022. cbak.com 16 In Touch
Ease into innovative payment products at icba.org/bancard Ease into modern payments with the comfort of ICBA Bancard. High quality, innovative payment products, including mobile card apps. Backup support for your community bank in negotiating with payments providers. Letting your customers sit back and use payment solutions from anywhere. A strong foundation in thought leadership in payments and ongoing personalized support.
ANNIVERSARIES 1874 148 Years 1883 139 Years 1907 115 Years 1905 117 Years 1892 130 Years 1898 124 Years 1998 24 Years 1921 101 Years 1882 140 Years 1894 128 Years 1913 109 Years 1913 109 Years 1909 113 Years 1906 116 Years 1903 119 Years 1901 121 Years 1980 42 Years First National Bank Sedan FNB Washington Washington Farmers State Bank Oakley Solomon State Bank Solomon State Bank of Downs Downs Farmers State Bank Westmoreland The Farmers & Merchants Bank of Colby Colby First National Bank Frankfort Farmers & Drovers Bank Council Grove TriCentury Bank De Soto Kaw Valley State Bank & Trust Co. Wamego Swedish-American State Bank Courtland Southwind Bank Natoma First National Bank Syracuse Farmers State Bank Wathena ESB Financial Emporia The Bank of Protection Protection March April cbak.com 18 In Touch
The Trust Company of Kansas (TCK) is pleased to announce the following promotions: Angela Malley has been promoted to Senior Vice President & Chief Investment Officer, effective January 1. Teresa Akers has been promoted to Vice President & Trust Officer in their Lawrence market. Matthew Broderick has been promoted to Trust Officer. Nicole Easton has been promoted to Vice President & Trust Officer. Christopher English, CEO, has taken on the additional role of Chairman of the Board. Stephen English has been promoted to Chairman Emeritus. Brandi Foley has transitioned into the role of Trust Administrator. Jennifer Moore has been promoted to Vice President & Trust Officer. Lee Anne Thompson has been promoted to Vice President & Employee Benefit Officer. TCK also welcomes Jennifer Boldt as the Trust Operations Specialist; Chris Davis as Vice President & Trust Officer in the Lawrence market; Andrew Ebert as Vice President — Technology; Terri Hecox as Vice President & Trust Officer; Mindy Mesier as Trust Administrator; Jess Sojka as Trust Administrator; and Hayden Staerkel as Vice President & Trust Officer. Brad Yaeger Brad Yaeger is announcing his retirement as President/CEO effective March 2022, after 42 years in banking and serving three years as President at Legacy Bank (formerly State Bank of Colwich). Brad joined the family-owned Bank in 1988 and transitioned into the role of President when Frank Suellentrop retired in December 2018. Brad is turning over leadership of the 136 year-old Bank to Executive Vice President Steven F. Suellentrop. A fifth-generation banker, Suellentrop will become President of Legacy Bank effective March, 14, 2022. ANNOUNCEMENTS Brad Yaeger Angela Malley Teresa Akers Matthew Broderick Nicole Easton Christopher English Chris Davis Lee Anne Thompson Mindy Mesier Terri Hecox Jess Sojka Hayden Staerkel Jennifer Boldt Jennifer Moore Brandi Foley Andrew Ebert Stephen English Steven F. Suellentrop 19 ISSUE 2 | 2022
ABSTRACTING Security 1st Title Wichita, KS . . . . . . . . . 316-267-8371 ACCOUNTING/TAX RETURNS Allen, Gibbs & Houlik, L.C. Wichita, KS . . . . . . . . . 316-267-7231 The Fullinwider Firm, LLC Liberty, MO . . . . . . . . . 816-781-6939 Varney & Associates, CPAs, LLC Manhattan, KS . . . . . . . . 785-537-2202 ACH *SHAZAM Johnston, IA . . . . . . . . . 515-288-2828 ADVERTISING SPECIALTIES *Works24 Brian, Edmond, OK . . . . . 800-460-4653 ALARMS & SECURITY PRODUCTS Federal Protection Springfield, MO . . . . . . . 800-299-5400 Oppliger Banking Systems, Inc. Lenexa, KS . . . . . . . . . 800-487-7875 ASSET LIABILITY MANAGEMENT *Financial Management Services, Inc. (FMSI) Chuck, Overland Park, KS..913-955-3355 QwickRate Marietta, GA . . . . . . . . 800-285-8626 ATM EQUIPMENT (NEW/USED) Federal Protection Springfield, MO. . . . . . . . 800-299-5400 Oppliger Banking Systems, Inc. Lenexa, KS . . . . . . . . . 800-487-7875 AUCTION Purple Wave Manhattan, KS . . . . . . . . 785-537-7653 BACK ROOM SERVICE Modern Banking Systems Ralston, NE . . . . . . . . . 800-592-7500 BALANCE SHEET CONSULTING *Financial Management Services, Inc. (FMSI) Chuck, Overland Park, KS . . . 913-955-3355 BANK OPERATIONS The Baker Group Oklahoma City, OK . . . . . .800-937-2257 QwickRate Marietta, GA . . . . . . . . 800-285-8626 BANK/PEER PERFORMANCE QwickRate Marietta, GA . . . . . . . . 800-285-8626 BANKRUPTCY Hinkle Law Firm Wichita, KS . . . . . . . . . 316-267-2000 Spencer Fane LLP Overland Park, KS . . . . . . 800-526-6529 BANK STOCK LOANS & LOAN OVERLINES Commerce Bank Kansas City, MO . . . . . . . 800-821-2182 *S&P Global Stacy, Charlottesville, VA . . . . 34-951-4419 BOND ACCOUNTING First Bankers Banc Securities Overland Park, KS . . . . . . 913-469-5400 *ICBA Securities Corporation Jim, Memphis, TN . . . . . . . . . . . . 800-422-6442 COMPLIANCE ASSISTANCE/REVIEWS *Advanced Business Solutions (ABS) Sandy, Olathe, KS . . . . . . .913-731-6007 Allen, Gibbs & Houlik, L.C. Wichita, KS . . . . . . . . . 316-267-7231 *BHG Bank Group Tom, Syracuse, NY . . . . . . 315-372-4510 *MPA Systems David, Fort Worth, TX . . . . .888-233-1584 Purple Wave Manhattan, KS . . . . . . . . 785-313-2094 Varney & Associates, CPAs, LLC Manhattan, KS . . . . . . . . 785-537-2202 Young & Associates, Inc. Kent, OH . . . . . . . . . 800-525-9775 CONSULTING Abrigo Raleigh, NC . . . . . . . . . 919-851-7474 *Bank Compensation Consulting (BCC) Rich, Plano, TX . . . . . . . .303-482-1844 Young & Associates, Inc. Kent, OH . . . . . . . . . 800-525-9775 CORRESPONDENT SERVICES Commerce Bank Kansas City, MO . . . . . . . 800-821-2182 First National Bank of Hutchinson Hutchinson, KS . . . . . . . 800-293-0683 CORE SERVICES Data Center Inc. (DCI) Hutchinson, KS . . . . . . . 620-694-6800 Modern Banking Systems Ralston, NE . . . . . . . . . 800-592-7500 *SHAZAM Bill M. Johnston, IA . . . . . . . . . . . .515-306-8012 CREDIT AND PORTFOLIO RISK MANAGEMENT Abrigo Raleigh, NC . . . . . . . . . 919-851-7474 Young & Associates, Inc. Kent, OH . . . . . . . . . 800-525-9775 Credit Card Program *ICBA Bancard & TCM Bank Heather, Washington, DC . . . 800-242-4770 CREDIT SUPPORT *Advanced Business Solutions (ABS) Sandy, Olathe, KS . . . . . . .913-731-6007 DATA PROCESSING Data Center Inc. (DCI) Hutchinson, KS . . . . . . . 620-694-6800 Modern Banking Systems Ralston, NE . . . . . . . . . 800-592-7500 DEBIT/ATM CARD SERVICES *ICBA Bancard/TCM Bank Heather, Washington, DC . . . .800-242-4770 *SHAZAM Matt M. Johnston, IA . . . . . 515-480-5767 DEBT COLLECTION Hinkle Law Firm Wichita, KS . . . . . . . . . 316-267-2000 DIGITAL LENDING *BHG Bank Group Tom, Syracuse, NY . . . . . . 315-372-4510 Products and Services Reference List Each asterisk (*) represents an agreement for a specific endorsed product with that company. Not all products that these companies offer are endorsed by CBA. To see a detailed list and explanation of endorsements, visit CBA online at cbak.com. Keep in mind that the services provided by each company on this list may only be a sampling of the many services they offer. By their CBA Associate Membership, these companies have shown their commitment to serving community banks. Please look to these companies first, whenever possible, to meet your banking needs. The following CBA Associate Members are ready to serve you when you need them. Please keep this list handy, and the next time you’re looking for a specific service, you’ll know where to look first! Remember, this is just a sampling of what each company provides. cbak.com 20 In Touch
DIRECTORS AND OFFICERS INS. *Travelers Danielle, St. Louis, MO . . . . 800-255-5072 *UNICO Group, Inc. Diana, Lenexa, KS . . . . . . 800-755-0048 DIRECTORS EXAMS Allen, Gibbs & Houlik, L.C. Wichita, KS . . . . . . . . . 316-267-7231 The Fullinwider Firm, LLC Liberty, MO . . . . . . . . . 816-781-6939 Varney & Associates, CPAs, LLC Manhattan, KS . . . . . . . . 785-537-2202 DISASTER RECOVERY FACILITY PROGRAM *MPA Systems David, Fort Worth, TX . . . . .888-233-1584 ELECTRONIC SERVICES *Fitech Payments Mitch, Fort Worth, TX . . . . . 682-201-5551 EMERGENCY FACILITIES/MODULAR BANK BUILDINGS FOR LEASE *MPA Systems David, Fort Worth, TX . . . . .888-233-1584 EMPLOYEE AND EXEC. BENEFITS *Bank Compensation Consulting (BCC) Rich, Plano, TX . . . . . . . .303-482-1844 Woner, Reeder & Girard, P.A. Topeka, KS . . . . . . . . . 785-235-5330 ESCROWS Security 1st Title Wichita, KS . . . . . . . . . 316-267-8371 FINANCIAL INST. BOND *Travelers Danielle, St. Louis, MO . . . . 800-255-5072 *UNICO Group, Inc. Diana, Lenexa, KS . . . . . . 800-755-0048 HUMAN RESOURCES *UNICO Group, Inc. Kansas City, KS . . . . . . . 800-755-0048 INFORMATION TECHNOLOGY CalTech Olathe, KS . . . . . . . . . 325-947-5550 Computer Services, Inc. (CSI) Paducah, KY . . . . . . . . 800-545-4274 Kansas Bankers Technologies Salina, KS . . . . . . . . . .888-752-8435 RESULTS Technology Overland Park, KS . . . . . . 877-435-8877 Varney & Associates, CPAs, LLC Manhattan, KS . . . . . . . . 785-537-2202 INSURANCE — BANK *Bank Compensation Consulting (BCC) Rich, Plano, TX . . . . . . . .303-482-1844 *Travelers Danielle, St. Louis, MO . . . . 800-255-5072 *UNICO Group, Inc. Diana, Lenexa, KS . . . . . . 800-755-0048 INSURANCE PRODUCTS Producers XL Salina, KS . . . . . . . . . 800-541-6705 INTEREST RATE RISK SERVICE *Financial Management Services Inc. (FMSI) Chuck, Overland Park, KS . . . 913-955-3355 *ICBA Securities Corporation Jim, Memphis, TN . . . . . . . . . . . . 800-422-6442 INTERNAL AUDIT *Advanced Business Solutions (ABS) Sandy, Olathe, KS . . . . . . .913-731-6007 The Fullinwider Firm, LLC Liberty, MO . . . . . . . . . 816-781-6939 INTERNET BANKING Data Center Inc. (DCI) Hutchinson, KS . . . . . . . 620-694-6800 *ICBA Bancard/TCM Bank Heather, Arlington, VA . . . . .800-242-4770 INTERNET WORLD WIDE WEB Oppliger Banking Systems, Inc. Lenexa, KS . . . . . . . . . 800-487-7875 INVESTMENTS Central States Capital Markets Kansas City, MO . . . . . . . 800-851-6459 Commerce Bank Kansas City, MO . . . . . . . 800-821-2182 *Financial Management Services Inc. (FMSI) Chuck, Overland Park, KS.913-955-3355 First Bankers Banc Securities Overland Park, KS . . . . . . 913-469-5400 *ICBA Securities Corporation Jim, Memphis, TN . . . . . . . . . . . . 800-422-6442 21 ISSUE 2 | 2022
IT SECURITY CalTech Olathe, KS . . . . . . . . . .325-947-5550 Computer Services, Inc. (CSI) Paducah, KY . . . . . . . . 800-545-4274 Kansas Bankers Technologies Salina, KS . . . . . . . . . .888-752-8435 RESULTS Technology Overland Park, KS . . . . . . 877-435-8877 LEGAL SERVICES Hinkle Law Firm Wichita, KS . . . . . . . . . 316-267-2000 Spencer Fane LLP Overland Park, KS . . . . . . 800-526-6529 Woner, Reeder & Girard, P.A. Topeka, KS . . . . . . . . . 785-235-5333 LENDING *BHG Bank Group Tom, Syracuse, NY . . . . . . 315-372-4510 Bankers Healthcare Group Syracuse, NY . . . . . . . . 866-588-7910 LOAN COLLECTIONS AND WORKOUTS Spencer Fane LLP Overland Park, KS . . . . . . 800-526-6529 Woner, Reeder & Girard, P.A. Topeka, KS . . . . . . . . . 785-235-5330 LONG RANGE PLANNING The Capital Corporation, LLC Overland Park, KS . . . . . . 913-498-8188 Varney & Associates, CPAs, LLC Manhattan, KS . . . . . . . . 785-537-2202 MARKETING Harland Clarke Newton, KS . . . . . . . . 800-322-0818 Products and Services Reference List *SHAZAM Johnston, IA . . . . . . . . . 515-288-2828 *Works24 Brian, Edmond, OK . . . . . 800-460-4653 MERCHANT PROCESSING *SHAZAM Johnston, IA . . . . . . . . . 515-288-2828 MERCHANT SERVICES *Fitech Payments Mitch, Fort Worth, TX. . . . . . 682-201-5551 MERGERS/ACQUISITIONS The Capital Corporation, LLC Overland Park, KS . . . . . . 913-498-8188 Spencer Fane LLP Overland Park, KS . . . . . . 800-526-6529 NETWORK SECURITY Kansas Bankers Technologies Salina, KS . . . . . . . . . .888-752-8435 PAYMENTS *Fitech Payments Mitch, Fort Worth, TX . . . . . 682-201-5551 *ICBA Bancard Heather, Washington, DC . . . .800-242-4770 PORTFOLIO MANAGEMENT Central States Capital Markets Kansas City, MO . . . . . . . 800-851-6459 *Financial Management Services Inc. (FMSI) Chuck, Overland Park, KS . . . 913-955-3355 PROMOTIONAL PRODUCTS Harland Clarke Newton, KS . . . . . . . . 800-322-0818 RETIREMENT PLANNING Central States Capital Markets Kansas City, MO . . . . . . . 800-851-6459 First Bankers Banc Securities Overland Park, KS . . . . . . 913-469-5400 SECONDARY MORTGAGE MARKET LENDING FHLBank Topeka Topeka, KS . . . . . . . . . 800-933-2988 SECURITY MONITORING Federal Protection Springfield, MO . . . . . . . 800-299-5400 SUPPLEMENTAL HEALTH INSURANCE *UNICO Group, Inc. Diana, Lenexa, KS . . . . . . 800-755-0048 TECHNOLOGY SERVICES CalTech Olathe, KS . . . . . . . . . 325-947-5530 Computer Services, Inc. (CSI) Paducah, KY . . . . . . . . 800-545-4274 Kansas Bankers Technologies Salina, KS . . . . . . . . . .888-752-8435 RESULTS Technology Overland Park, KS . . . . . . 877-435-8877 QwickRate Marietta, GA . . . . . . . . 800-285-8626 *S&P Global Stacy, Charlottesville, VA . . . .434-951-4419 TELECOMMUNICATIONS CONSULTING Verge Network Solutions, Inc. Oklahoma City, OK . . . . . .405-782-8420 TELECOMMUNICATIONS SERVICES Verge Network Solutions, Inc. Oklahoma City, OK . . . . . .405-782-8420 TELECOMMUNICATIONS SYSTEMS Verge Network Solutions, Inc. Oklahoma City, OK . . . . . .405-782-8420 TITLE INSURANCE Security 1st Title Wichita, KS . . . . . . . . . 316-267-8371 WEBSITE DEVELOPMENT *S&P Global Stacy, Charlottesville, VA . . . .434-951-4419 WHOLESALE LENDING FHLBank Topeka Topeka, KS . . . . . . . . . 800-933-2988 cbak.com 22 In Touch
x U P C O M I N G W E B I N A R S Visit fin-ed.info/cbak for over 200 live & on-demand webinars fin-ed.info/cbak 4 - A P R 5 - A P R 6 - A P R 7 - A P R 1 2 - A P R 1 2 - A P R 1 3 - A P R 1 4 - A P R 1 9 - A P R 2 0 - A P R 2 0 - A P R 2 2 - A P R 2 6 - A P R 2 7 - A P R 2 8 - A P R 4 - M A Y 5 - M A Y 1 0 - M A Y 1 1 - M A Y 1 7 - M A Y 1 7 - M A Y 1 8 - M A Y 1 9 - M A Y 1 9 - M A Y 2 4 - M A Y 2 5 - M A Y N e w B e n e f i c i a l O w n e r s h i p R u l e s : U p d a t e & I m p l i c a t i o n s P a y m e n t S y s t e m s B o o t c a m p M i n o r A c c o u n t s : O w n e r s h i p , C I P , A c c e s s , C h a n g e s & T r a n s a c t i o n s C o n v e r t i n g A c c r u a l S t a t e m e n t s i n t o C a s h F l o w A C H O r i g i n a t i o n : I n t e r n a l , L o a n s , T r a n s f e r s & M o r e S u r v i v i n g a B S A E x a m : R e c e n t H o t S p o t s T h e L a t e s t i n S o c i a l E n g i n e e r i n g A t t a c k s – H o w t o P r o t e c t A g a i n s t C o m p l e x T h r e a t s C a l l R e p o r t i n g B a s i c s I R A & H S A : 2 0 2 2 ' s H o t t e s t I s s u e s & A n s w e r s B o a r d - L e v e l P o l i c i e s : W h a t I s R e q u i r e d & W h y W r i t i n g E f f e c t i v e C r e d i t M e m o s & L o a n N a r r a t i v e s N e w F D I C R u l e C h a n g e s f o r T r u s t s & M o r t g a g e S e r v i c i n g A c c o u n t s C o m p l i a n c e T r a i n i n g f o r t h e F r o n t l i n e A g L e n d i n g C o m p l i a n c e D E I : K e e p i n g I t C o m p l i a n t B S A C o m p l i a n c e f o r C o m m e r c i a l A c c o u n t s : B e n e f i c i a l O w n e r s h i p & B e y o n d M a i n t a i n i n g C o n s u m e r A c c o u n t s : A d d i n g N a m e s , C h a n g i n g N a m e s , R e m o v i n g O w n e r s , C h a n g i n g P r o d u c t T y p e s & M o r e R e d u c i n g M o r t g a g e D e l i n q u e n c y : P r o a c t i v e P r o t e c t i o n o f t h e B o t t o m L i n e D e c o d i n g A C H R e t u r n R e a s o n C o d e s C o n s u m e r U n d e r w r i t i n g 1 0 1 : F r o m A p p l i c a t i o n t o A p p r o v a l C o n s t r u c t i o n L o a n N u t s & B o l t s : D o c u m e n t a t i o n , S a m p l e S c e n a r i o s & A v o i d i n g E r r o r s H a n d l i n g T r u s t s & O t h e r F i d u c i a r y A c c o u n t s B u i l d i n g a S u c c e s s f u l C r o s s - S e l l i n g P l a t f o r m T h e N e w A C H R u l e s o n P r e n o t i f i c a t i o n & M i c r o - E n t r i e s C o m m u n i t y R e i n v e s t m e n t A c t : P r e p a r i n g f o r R e g u l a t o r y C h a n g e s E n h a n c e d D u e D i l i g e n c e & R i s k A s s e s s m e n t o f A C H C u s t o m e r s 23 ISSUE 2 | 2022
Diana Poquette Account Executive 402.499.1011 dpoquette@unicogroup.com Financial Institution Bonds Property & Casualty Cyber Risk Directors & Officers INSURANCE FOR BANKS Financial Institution Bonds Social Engineering Extended Coverage Enhancements No Annual Forms Cyber Risk Updated Benefits and Enhancements Dependent Business Interruption Cyber Extortion Directors & Officers Broad Form With Regulatory Coverage 3 Year Policy Savings Employment Practices Liability Bankers Professional Liability Property & Casualty General Liability Commercial Property Umbrella Liability Workers’ Compensation COVERING ALL OF NEBRASKA , KANSAS AND MISSOURI This magazine is designed and published by The newsLINK Group, LLC | 1.855.747.4003 Community Bankers Association of Kansas 5897 SW 29th St. Topeka, KS 66614 Change Service Requested PRSRT STD US POSTAGE PAID SALT LAKE CITY, UT PERMIT NO 508
www.thenewslinkgroup.orgRkJQdWJsaXNoZXIy MTIyNDg2OA==