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INSIDE THIS ISSUE 06 07 26 32 Published for the Missouri Independent Bankers Association P.O. Box 1765 Jefferson City, MO 65102 573.636.2751 | miba.net Editor: Matthew S. Ruge Executive Director ©2022 The Missouri Independent Bankers Association | The newsLINK Group, LLC. All rights reserved. The Show-Me Banker Magazine is published six times a year by The newsLINK Group, LLC for The Missouri Independent Bankers Association and is the official 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 Missouri Independent Bankers Association, 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 Show-Me Banker Magazine is a collective work, and as such, some articles are submitted by authors who are independent of The Missouri Independent Bankers Association. While The Missouri Independent Bankers Association 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. MADE IN THE USA 02. President’s Message 04. From the Top 06. Flourish 07. MIBA Lobbying 08. Legal Eagle Spotlight 10. A View From the Capitol 11. MarCom Award Winner 12. Meet Your Missouri Banker 14. A Background on Tammy Kilgore Sr. Vice President, Farmbank 16. The FDIC Directors College 18. MIBA 2022 Women in Banking Conference 20. Are You Ready to Serve Missouri’s Fast-Growing Cannabis Market? 22. News From You 24. Fourth Quarter Rally 26. Five Ways to Fight Inflation with IT 29. 2022 MIBA PAC Honor Roll 30. Bankers Cite Economy, Cybersecurity as Top Risks 32. Five Ways Your Financial Institution Can Stop Employees from Colluding in Fraud 33. Dates and Events 34. A Close-Up Look at BHG’s Eye-Opening Loan Geneology 36. Thank You To Our Endorsed Vendors December 2022 | 1
The end of the year is fast approaching; looking back, it has been a busy year for Community Banks inMissouri. Competition, the Federal Reserve and inflation, and regulatory and legislative issues heavily impacted our banks this year. It has been an interesting year, withmany changes and new issues. Missouri’s Community Banks have navigated these issues nimbly while serving those onMain Street better than anyone else. Missouri banks’ economic and competitive environment has changed significantly over the year. We started the year flush with deposits, trying to figure out what to do with them. Over the year, many of you toldme this situation changed quickly. In several of our markets, there is stiff competition for deposits, creating a lot of pricing pressure. In addition, the rapidly increasing Federal Reserve Fed Funds target rates have pressured us to increase loan pricing. Due to inflation impacting all individuals and businesses across the state, the Fed has been aggressive.These rate increases have put us in a territory we haven’t seen in several decades. The regulatory and legislative front has been as busy as ever. The CFPB has been aggressive in its efforts to combat what it calls “junk fees.” We spent most of the year discussing and pushing back against this type of language. In addition, banks have been working on their CECL models and trying to sort through all the comments and guidance issued by the regulatory offices. Like every year, MIBA has had an incredible slate of conferences, educational seminars, and events. Fromwhat I hear, the earlyyear seminars were successful and very informative.The Directors and Officers Conference this year at Margaritaville inMay was amassive success, with bankers coming together fromacross the state.This year’s convention atThe Lodge of the Four Seasons provided the setting for some wonderful camaraderie and a tremendous source of timely insights.TheMIBA staff works hard to put all these events together each year. If you get a chance next year, sign yourself or someone at your bank up for as many of these events as possible. I want you to know there’s a lot to be gained by attending. Financially MIBA is on solid footing, and the High Street Building has been an excellent resource for providing a space to hold educational events and help keep costs down. However, MIBA is always looking to grow membership and affiliates. If you know of any community banks or reputable vendors near you that would make good members, let us know. It is time to think about next year as this year winds down. I encourage everyone to sign up for all thatMIBAhas to offer. One favorite event is the ICBACapital Summit, held in early May. MIBAhas traditionally represented itself well by sending plenty ofMissourians to be heard inWashington. If you or anyone in your bank is interested, please feel free to reach out formore information. Thank you for being a member in 2022, and here is to a solid and profitable 2023! ■ Connect with Tyler on Twitter at @tmbender PRESIDENT’S MESSAGE Tyler Bender “MIBA is always looking to grow membership and affiliates. If you know of any community banks or reputable vendors near you that would make good members, let us know.” Our Year in Review @tmbender MIBA President Midwest Regional Bank Festus, MO 2 | The Show-Me Banker Magazine
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FROM THE TOP Brad Bolton Chairman of the ICBA “FedNow can be another positive differentiator for our nation’s community banks, but we must be ready for this real-time service and its 24/7/365 requirements.” @bradmbolton We’ve been working toward a faster payments future for a decade now, and we’re finally seeing the fruits of our labor: the launch of FedNow. Our efforts to encourage the Fed to offer an instant payments solution have led to this result; it was our voices that expedited FedNow’s time to market, with the Fed updating the original timeline due to our focused advocacy efforts. By mid-2023, we will be able to begin offering this solution to our customers. With FedNow entering the market, community banks can add in a missing payments link – instant payments – and help level the playing field with the nation’s largest financial institutions. FedNow will be a great equalizer for the industry, bringing real-time payment clearing and settlement to community banks across the country. So, with FedNow’s launch on the horizon, what can community banks do to prepare? I, for one, have been speaking with our core provider, expressing our interest in FedNow and getting into the details of when it will be available to us and at what price. While many providers are still ironing out their plans, we must actively seek information; it’s important to reach out and emphasize that FedNow is a priority. Think of it like an advocacy visit on Capitol Hill: go in with your ask, and make it clear what you want from them and by when. Every executive reading this column should take five minutes to email their core provider to inquire about FedNow availability, timing and pricing. While you’re waiting to firm up those details, take steps to ensure your teams are up to speed on what FedNow will mean for your customers. From signing up for the FedNow webinar series offered by ICBA Bancard to subscribing to FedNow notification emails, resources exist that will help you deepen your knowledge of the solution and its potential. In addition, having conversations with your Fed rep to understand how you should prepare will provide a first-hand perspective on the more nuanced elements of FedNow implementation. Regardless of the steps you take, the time to act has arrived. FedNow can be another positive differentiator for our nation’s community banks, but we must be ready for this real-time service and its 24/7/365 requirements. We need to be able to upgrade our infrastructure and processes in a positive, strategic way to make the most of the opportunity. For community banks, it’s time to unlock FedNow’s potential and take advantage of all this solution will offer. ■ My Top 4 Recommendations to prepare for FedNow 1. Establish an instant payments committee 2. Demand firm commitments and pricing from your core provider 3. Formulatemarketing campaigns to inform customers 4. Provide feedback to ICBA to share with the Fed ■ Brad M. Bolton is president and CEO of Community Spirit Bank in Red Bay, Ala. Connect with Brad @BradMBolton. 4 | The Show-Me Banker Magazine
» Call Rick Gerber or Ryan Gerber at 1-866-282-3501 or email rickg@chippewavalleybank.com ryang@chippewavalleybank.com 1. Calling us is the first step. 2. You email us the appropriate documents of information. 3. CVB preparing the loan documents generally within 5 to10 days. 4. Meeting the customer. We will come to you to sign loan documents. 5. CVB wires the funds. 6. Wow that was easy. IS YOUR BANK SUFFERING UNREALIZED SECURITY PORTFOLIO LOSSES? ARE YOU IN NEED OF A CAPITAL INJECTION? Bank Stock and Bank Holding Company Stock Loans up to $50 Million Done the Simple Way
Digital transformation. Those words have been bandied about with increasing fervor, fueled by a heightened sense of urgency. Yet, while the digital movement has increased pace, it’s more of an evolution than a revolution. When I think about this concept of “going digital” in our industry, I’m struck by the fact that it’s a continual evolution over time. The habits of our customers change, and we’re constantly walking beside them, transforming our services to meet their needs. It’s never been about being bleeding edge or doing what everyone else is doing, but about better addressing the interests of our distinct communities. And in today’s shifting landscape, it’s more important than ever tomake sure we’re evaluating our offerings with blinders off. How honestly are we assessing our products and services? How are we ensuring our channels and tools aremeeting customer needs? If we’re still updating our technology plans once every three years as we’ve always done, is that enough? While these questions are challenging, there is information surrounding us that can help shed light on the right responses. For example, consider your transaction volume: How are payments clearing today versus three-to-five years ago, and why? Or listen at account opening: What questions are being raised relative to your products? And consider your customer service center, teller insights and other channels: What inquiries are coming through? What are customers asking for at the frontline? These findings will give you greater insights into where technology is meeting needs and where youmay need to shift tomeet new digital expectations. And when and how you do this depends on your audience. Customers are transforming at different paces, so analyzing the steps you can take to have the greatest impact will enable you to be strategic in product planning and create efficiencies for your bank in the process. So, as you read this issue, I encourage you to think of the articles as resources in your digital evolution. In addition, ICBA Bancard has produced a digital transformation white paper and workbook to guide community banks more specifically in their evaluation process of digital payments and strategies. These tools are available to ICBAmembers and can be downloaded on our website. Nomatter what approach you take, now’s the time tomake sure you’re considering what’s next for your customers’ digital journey. Shifting your tech plans and processes to keep pace with the changing environment will guarantee that you can support customers in newways, maintaining the same level of service they seek and expect. ■ FLOURISH “The habits of our customers change, and we’re constantly walking beside them, transforming our services to meet their needs.” @romerorainey Rebeca Romero Rainey President & CEO, ICBA Connect with Rebeca @romerorainey. 6 | The Show-Me Banker Magazine
As this was written, the November 2022mid-term election was underway. With a U.S. Senate seat, State Auditor, all Congressional seats, 17 of the State Senate’s 34 seats and all 163 State House of Representatives seats up, there weremanymoving parts this election. Further complicating this election cycle, 2022 was a re-apportionment year, meaning that all of the Congressional seats, State Senate seats and State House of Representatives seats had been re-drawn. And finally, term limits for six of the 17 State Senate seats and 42 of the 163 State House of Representatives seats mean we’ll have a bunch of new faces to lobby in 2023. On the legislative front, MIBA Executive Director Matt Rugemet with the representatives of other financial services companies to discuss recent and upcoming legislation designed to limit foreign ownership of Missouri farmland.Themajor issue is determining the nationality of those purchasing the property and who determines the nationality.There are also several groups, other than those in the financial services business, interested in this issue, so we expect a robust discussion on this in 2023. With our January article, wewill outline leadership changes in theMissouri StateHouse and State Senate and will have a better handle on other financial issues. ■ MIBA LOBBYING REPORT Andy Arnold Arnold & Associates www.bell.bank Member FDIC 34617 December 2022 | 7
LEGAL EAGLE SPOTLIGHT Shawn Tuma Spencer Fane LLP Andrea Perry Spencer Fane LLP Around the country, banks and other financial institutions are doubling down on cybersecurity efforts in order to protect against a recent spike in destructive attacks, ransomware, and “island hopping” – a type of hack that involves attackers exploiting the weaknesses of small businesses tomove laterally to target larger organizations. Financial institutions cannot ignore this threat andmust address it head-on; all banks, regardless of size, should have an operational cyber riskmanagement program in place led by trusted cyber legal counsel. According to a 2022 VMware report, “Modern Bank Heists 5.0,” 63% of financial institutions experienced an increase in destructive attacks.This is up 17% from2021. In the same survey, 74% of respondents stated they experienced one or more ransomware attacks, and 63% of those victims paid the ransom. Lastly, 60% of financial institutions experienced a 58% increase in island hopping from last year.The report’s findings are based on a February 2022 survey of 130 chief information security officers and security leaders at financial institutions, 41% of which were headquartered in North America. Combine this with the new requirements of the Cyber Incident Reporting Act, signed by President Biden in March 2022, that went into effect in May, and the value of effective cybersecurity programs becomes apparent, particularly when faced with a threat or active attack. The Act requires owners and operators of critical infrastructure to report cyber incidents to the U.S. Department of Homeland Security (DHS) and Cybersecurity and Infrastructure Security Agency (CISA) within 72 hours and ransomware payments within 24 hours. So, how do banks combat the ever-evolving threat of data breaches and cybersecurity attacks? Here are eight tips to help financial services leaders remain vigilant: 1. Nobody thinks that this is going to happen to them. It is better to prepare for an event that never happens than to be unprepared when an incident occurs. Cyber issues affect everyone. Create a disaster recovery plan to help avoid data loss and minimize business downtime in the event of a security breach. Eight Steps to Handling a Cybersecurity Crisis at Your Bank 8 | The Show-Me Banker Magazine
2. Prepare your incident response team. Practice is key. If the chief decision-makers have never met before a data breach occurs, the response may not be executed with the highest degree of confidence. 3. Save money by learning how to “speak” insurance. Understanding the intricacies of insurance can mean money in your pocket in the event of a disaster. Learning what the insurance companies require and getting the proper coverage will save time and money. 4. Remain calm. Measure your response. Shutting down operations is often drastic and unnecessary. Determine what really happened before making any decisions or talking to third parties. You want to ensure that your entity is the true source of the data leakage before you respond. 5. Be careful when using the term“data breach.” “Data breach” has a very significant legal meaning that requires immediate action and implicates various reporting requirements. Consider using the term “incident” or “event” until the breach is confirmed. 6. Logistics are key. As General Omar Bradley famously said, “Amateurs talk strategy. Professionals study logistics.” Many cybersecurity issues businesses deal with today can be avoided with early planning, and logistics are the most important part of preparation. 7. Attorney-client privilege does not always apply. Information communicated with outside professionals may fall under attorney-client privilege if attorneys hire them as consultants to the case. However, information disclosed to law enforcement or perhaps even an insurance carrier is likely not privileged. 8. Encrypt your data. A bank’s data is one of its most important assets. It is critical to encrypt your data using a strong encryption algorithm such as Advanced Encryption Standard (AES) and protect the decryption keys. In the event of a security breach, your data will be inaccessible without the associated decryption keys. From the relatively expected ransomware and phishing attacks to complex distributed denial of services (DDoS) and supply chain attacks, banks and other financial institutions are facing more cybersecurity challenges than ever. By creating a risk plan ahead of time, building a solid response team, and anticipating various types of attacks, financial institutions can mitigate risk and prevent the worst of cyberattacks. ■ “Many cybersecurity issues businesses deal with today can be avoided with early planning, and logistics are the most important part of preparation.” “Cyber issues affect everyone. Create a disaster recovery plan to help avoid data loss and minimize business downtime in the event of a security breach.” December 2022 | 9
Congressman Blaine Luetkemeyer Missouri’s 3rd Congressional District “I started this column by praising well‑capitalized banks because capital is essential to a strong financial services sector and economic stability.” A VIEW FROM THE CAPITOL I have said many times in this magazine and other publications that when the world shut down in 2020, governments, businesses, and everyday people turned to the banks for stability. The government asked you to facilitate the PPP program, and businesses asked for flexibility as they navigated the unknown. Well-run and well-capitalized banks were able to answer the call. It is a testament to the stability of the industry and a clear sign that American banks are holding enough capital to weather any storm. After successfully passing the real-life stress test that was COVID shutdowns, it is concerning (but not necessarily surprising) that banking regulators are focused on increasing capital standards and bank reserves simply for the sake of doing it. First, the FDIC announced an increase in FDIC insurance assessment rates this summer. At first glance, it may have appeared to be a necessary step – the FDIC is statutorily required tomaintain a reserve ratio of 1.35%. Due to the $5 trillion surge in bank deposits, which was largely government money simply handed to people, the reserve ratio dropped to 1.23%. However, the FDIC has until Sept. 30, 2028, to stabilize the reserve ratio. Further, with the government handouts ending and inflation eating away at people’s paychecks, deposit levels are normalizing. In just the second quarter of 2022, bank deposits decreased by $370 billion, causing the FDIC reserve ratio to jump by 1.26%. Instead of hastily raising assessments, the FDIC should use the time legally available to determine whether a raise is even necessary. I believe time will prove it is not. Not to be outdone by Acting Chairman Martin Gruenberg and the FDIC, Acting Comptroller of the Currency Michael Hsu and the Fed Vice Chair of Supervision Michael Barr are publicly advocating for higher capital standards for larger regional banks. Again, with apparently no regard for the banks’ performance during COVID, Hsu and Barr want to require additional Total Loss Absorbing Capital (TLAC) for regional banks, even though this requirement is reserved for the nation’s largest financial institutions. Lastly, earlier this month, the banking regulators issued a joint statement that they will re-examine final Basel III implementation. While Basel III doesn’t directly impact community banks, its effects could be harmful to every American. Some estimates say the final stages of Basel III implementation could mean up to a 20% increase in bank capital. I started this column by praising wellcapitalized banks because capital is essential to a strong financial services sector and economic stability. But when we start increasing capital reserves simply for the sake of giving regulators something to talk about, we have a problem. Interest rates are rising, the easymoney is going away, and small businesses are feeling the pain of inflation and worker shortages. With buying power severely crippled, businesses and families need banking services. Every additional dollar you have to unnecessarily spend on government regulations, assessments, and capital requirements is a dollar that cannot support the local economy.These bad policies threaten to unnecessarily harm the people who need your services most. My first order of business next year is to put an end to it. ■ 10 | The Show-Me Banker Magazine
Congratulat ons MIBA! 2022 Ma Com Aw rds Winner! Since its inception in 2004, MarCom Awards has evolved into one of the largest, most-respected creative competitions in the world. This year, there were over 6,000 entries from throughout the United States, Canada, and over 43 other countries in the competition. MarCom Awards is an international creative competition that recognizes outstanding achievements by marketing and communication professionals and recognizes the creativity, hard work, and generosity of industry professionals. Being a Gold Winner is a tremendous achievement symbolized by the intricately detailed MarCom statuette. The MarCom graces the trophy cases of some of the top business and communication firms in the world. MarCom’s Gold Award Award is presented to those entries judged to be among the most outstanding entries in the competition. Gold Winners are recognized for their excellence in terms of quality, creativity, and resourcefulness. To view this year’s winners, please scan the QR code. http://enter.marcomawards.com/ winners/#/gold/2022 We are very pleased to announce that the Missouri Independent Bankers Association was awarded the MarCom Gold for print media. December 2022 | 11
What is your background in the financial industry? I have been in the financial industry for 14 years. Before that, I worked in the retail business as a regional manager of over 30 stores. I wanted to learn a new business, so I interviewed a branch President at one of our local banks to learn what the financial business was and what careers there were. I joined that local bank a short time later. I started working in loan operations with renewals, modifications and participations with loans. Then I transitioned into the loan assistant and processing roles, then to managing all of the loan operations and servicing. I have been withThe Bank of Missouri for a year now. What’s the story behind your company, and what is your position? The Bank of Missouri started 131 years ago, in 1891, in Perryville, MO, located close to Caper Girardeau, Mo.The previous name was The Bank of Perryville which was changed to The Bank of Missouri in 1977. We have grown to 29 branches and an Operations Center in that time. We have three regions in Central to Southeast Missouri. As our website states, “A group of Perryville neighbors saw the need for a local bank that would put local needs first.”The Bank of Missouri has continued this for 131 years. My position currently is Loan Servicing Supervisor. I have a talented teamof 13members that service all loans and a Commercial Loan ProcessorManager with a teamof eight commercial loan processors. Their talent andwork ethic are strong, and I amvery fortunate and thankful daily for them. What would you be doing if you weren’t working in a bankingrelated industry and why? I have a business and management background. Maybe I would open my own bakery and coffee shop or work in home improvement. I really enjoy working with The Bank of Missouri. I will keep baking and home improvement projects as hobbies. Probably safer anyway. What advice do you have for young professionals starting in the financial industry? Be curious and hungry. Know the business side of your financial industry and be the expert on your team. Learn your core banking systembetter than others and become the leader in your area. Even if you aren’t the supervisor or manager, be a leader. Be curious, interview the department leaders and even executive leaders. Learn what their journey was and what they do daily. Ask the questions of how, what and why, then apply them to your journey. If you want to grow, you have to put in the effort. Learn as much as possible, ask for more learning and development, and search it out for yourself. It all comes down to work ethic and creating your development and growth. Do not sit back and wait. Be curious and hungry. How is the bank responding to the increasing demands of both personal and business customers for more technology-based services, such as mobile banking? Banks need to remember who the customer is, what they need currently, and what they may need as a service in the future. The industry needs to keep evolving with technology but keep the customer in focus while evolving. We are always asking first, “What does the customer need?”Then we search for technology that fits our customers and us as we think outside the box to grow. What are the company’s strengths from your perspective? The Bank ofMissouri’s biggest strength is the people. First, our customers, who they are and what they need. We are the ones they come to when they dreamof a newbusiness, towhen the hard times come, and they need us. MISSOURI BANKER MEET YOUR Name: Sue Schlagel Title: Loan Servicing Supervisor Bank Name: The Bank of Missouri “Learn your core banking system better than others and become the leader in your area. Even if you aren’t the supervisor or manager, be a leader.” 12 | The Show-Me Banker Magazine
Second is our employees. We wouldn’t be where we are today if not for our employees. Being a company that has been around for 131 years, we have longevity with our employees. They are the core of our bank. We have pulled together talented individuals who work hard and think outside the box, but the most important aspect is the collaboration of teamwork that happens every day. How are you and/or your company involved in the community? Each of the three regions is very involved in its communities because our families and friends are the community. We are volunteering in our schools and our local chambers. We attend community events. We roll up our sleeves, put on work gloves, help clean up, and serve food after natural disasters. We walk with our community and do not just send money; we send people. Where is the future of this industry headed, in your opinion? The future is always growing in technology, but one item that never changes is that our customers still want to come in and talk to someone when it comes to community banks. The future is more behind the scenes with technology for efficiencies of running the business to make it seamless for the customer and stay ahead of the industry. What is something about your job that most people wouldn’t know about? (This can be additional duties or little things you like doing in addition to your role.) Loan Servicing is the department that knows our core banking system the most where loans are concerned. We are part of every team that brings on a new system or product that involves loans. We are part of building and mapping new technology. If you knew me, you would know . . . what? I enjoy riding mountain trails on my bike from time to time. It’s a challenge and great to be outside in nature, away from the busyness. What are some of your hobbies outside the office? Home improvement projects and baking. What is your favorite movie, and why? I’mopen tomostmovies – hate the scary ones! What is your favorite food, and why? Mexican. Love the spicy stuff. What is your favorite vacation/ trip, and why? Vacation without a schedule. I love to explore different cities and, at the same time, love to sit on a beach or hike the trails. Don’t want to be tied to a timeline. ■ December 2022 | 13
A native Missourian, Tammy Kilgore was born to Jerry and Wilma Elsea in Kirksville and grew up with her brother, Kevin, on a farm outside Green Castle. She graduated from Northeast Missouri State University (now Truman State University) with a two-year accounting and data processing degree and then from the University of Nebraska at Omaha with a Bachelor of Science in Business Administration with a concentration in accounting. Her accounting degree assisted her in becoming a Certified Public Accountant, licensed in Missouri and Nebraska. Additionally, she is a Certified BSA/AML Professional. She was also Secretary and Board President of the Green City School Board for 17 years. Presently, Tammy has 25 years of experience working in banking, plus another four years performing banking audits while she worked in public accounting. No one in Tammy’s family is in the banking industry; she is a first-generation banker. While attending college, a friend introduced her to banking. Her experiences of seeing customers’ appreciation, whether they received good service, or a loan for a new home, business, or toy, confirmed her career path. Tammy recognized that there is a lot to banking; it involves all areas and is constantly changing. She knew banking would provide challenges, and as she gained more knowledge, she continued to be intrigued by the banking world. So she took the opportunity while working during college to learn as much as possible. Tammy started as a teller and then progressed to head teller, new accounts, investment entries and loan processor. She soon realized that to advance further in her career, she would needmore education and a four-year degree. Shemade themove to Omaha, Nebraska, when she was accepted to the University of Nebraska.This small-town country girl anxiously headed to the big city. She landed a position with a bank that was part of a Seven Bank Holding Company in four states. While there, she continued working in new accounts and quickly learned all about cross-selling the bank’s products, including the trust and financial services available. She earned the recognition of Top Sales for two years. Later, when upper management realized she would graduate with a BSBA specialization in accounting, she was given the opportunity to work in the bank’s accounting department. This was where Tammy experienced her first Core software conversion. During this process, she put forth the extra effort to learn all she could about the software. She created procedure manuals for all new account products. She also recognized that it is best to have all applications balance during conversion and not go to a force balance account. She learned the specific interfaces of transaction codes for all applications and told herself that if she MIBA sat down recently with Tammy Kilgore to discuss banking, our association, and life in general. She is presently Senior Vice President of farmbank and is a licensed CPA in Missouri and Nebraska. For 30 years, she has been married to her husband, Steve (who, for 45 years, has owned and operated a Black Angus cow/calf business), and has two children, Grant (29) and Raeann (26). Tammy enjoys spending time with her family, both indoors and outdoors and has a great love for horses. She and her family enjoy riding their Single Foot/Racking Horses, whether on their farm, on the local trails or throughout Missouri and surrounding states. They’ve even been seen in local parades. She likes taking trips, boating and swimming, and is fond of relaxing with a good book or watching a movie. We’re thankful she spent some time with us and hope you enjoy learning about her as much as we did. A BACKGROUND ON TAMMY KILGORE – SR. VICE PRESIDENT, FARMBANK 14 | The Show-Me Banker Magazine
were ever in charge of a conversion team, that team would balance before moving on. In the end, she learned Jack Henry software inside and out. Eventually, the position led to another within the Bank Holding Company in the audit and tax department, where she and her team performed Directors’ Exams, Trust Exams, EDP (Electronic Data Processing) Exams, and Insurance and Mortgage Company Exams. She also assisted with implementing a mortgage company at the Independence, MO, location. At this point, Tammy left the banking industry to work in public accounting to broaden her accounting experience. She was still involved with banking due to her vast experience. At first, she was just part of the team that performed bank directors’ exams and tax returns, but later, she became the lead. She believes her experience in public accounting has been very valuable in and for her career. Tammy also has some agricultural experience due to her farm background, as well as medical, construction, food businesses and one of her favorites, the music industry, specifically a recording studio. Each of these industries provided a solid foundation for her return to Missouri, where she opened her own public accounting business. However, after a few years, she went back to the banking industry. Tammy joined farmbank (rebranded from Farmers Bank of Green City) in 2009. As Sr. Vice-President of the bank, her main responsibilities include managing the operations of the bank’s three branches, accounting, human resources, BSA program and data processing. Having been given the opportunity to grow professionally and personally, she has been fortunate enough to be involved in all areas of the bank. Her team has grown farmbank from a $19,000,000 bank to a $75,000,000 bank. Tammy said it gives her a sense of accomplishment to see staff grow professionally and personally; they are allowed the opportunities to succeed, which makes the bank successful. Tammy likes to invest in local communities – personally and through the bank. Some of those organizations include Winigan Youth Group, a part of the Winigan Christian Church. She, her husband, and her family like to be there for the community, individuals and families during times of need, whether it is merely providing help or financial assistance. She invests time and resources into the school system because, as she says, “These kids are our future.” She also supports St. Jude’s Children’s Research Hospitals. The most rewarding part of her career is being part of farmbank’s growth and development of the staff. She says, “It is wonderful to be able to assist customers with their financial needs and the joy it brings them.” Finding their gratitude touching, she also reflected, “It is heartwarming to be part of a community that stands strong for its members in a time of need or participating in community events.” Regarding the benefits of MIBAmembership, Tammy says that MIBA provides education for bank staff, directors, and networking opportunities. MIBA strongly supports independent community banks’ prosperity by providing political support inMissouri legislation. And the scholarship program provides deserving individuals an opportunity to further their education. MIBA benefited Tammy personally with education, networking and the opportunity to advocate for the banking industry. When discussing the importance of mentors during her career, Tammy shared that her first mentor was her father, Jerry, now deceased. “He always challenged me to be knowledgeable,” she said. “He always amazed me with his questions.” She said he showed confidence in her but taught her that hard work, knowledge and dedication would earn the way to success. Another mentor she mentioned is Brad Doran, the Chairman and CEO of farmbank. He created a team-oriented environment that allowed her to utilize her skills and knowledge. “I have gained a deeper insight into the management of a bank by working closely with Brad,” she told us. “He’s mentoring by giving me the opportunity to work by his side. He holds the belief, as I do, that one must be passionate about our profession and show compassion to others.” She states that Brad has pushed her to be her best and obtain results in an efficient and successful manner. Tammy provided three recommendations for someone she may mentor: • Learn about the banking industry and your job responsibilities. Don’t depend on others to tell you how to performyour job. Put forth the extra effort when needed. • Embrace change. Banking is an everchangingworld, whether it is regulations, economics, technology or learning new software or software changes. • Always be team-oriented, level-headed and fair to others. Do your research and never assume. Regarding important challenges currently facing the community banking industry, Tammy told us one of them is growing a bank in deposits and loans during a time of rising interest rates while trying to meet the customer’s expectations with interest rates and maintaining the net interest margin. Additionally, forecasting the future and budget for underlying economic events can be challenging while trying to increase the bottom line during rising costs of operations. And remaining updated with the technology is a constant concern to ensure security for the bank – and its customers – is provided. Although complex, bankers can successfully deal with today’s challenges. They must acquire loans and deposits from an established bank or the addition of a new branch in a thriving community. Management must budget and forecast for the future, taking into consideration the past year and trend; constantly monitor the market, sources and uses of funds, loans, and interest rates; monitor other income and expenses throughout the year, then make the necessary adjustments. Most importantly, bankers should provide education for management and staff to stay informed and conduct work efficiently. In closing, Tammy shared that farmbank’s motto – “Growing Together” – is how she lives her life, both personally and professionally. ■ December 2022 | 15
The FDIC Directors College was held on Oct. 18, 2022 at The Courtyard by Marriott in Columbia, MO. Attendees had the opportunity to network with their fellow bankers and learn from an outstanding line of speakers. We hope to see you at our next event. For more information, please visit www.miba.net. ■ THE FDIC DIRECTORS COLLEGE 16 | The Show-Me Banker Magazine
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MIBA 2022 WOMEN IN BANKING CONFERENCE The 2022 Women In Banking Conference was held on November 16-17 at the Doubletree by Hilton in Chesterfield. Attendees had a chance to network with fellow bankers and learn from a panel of amazing speakers A big thanks to our sponsors. We hope to see you at our next event. For more information, please visit www.miba.net. ■ 18 | The Show-Me Banker Magazine
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A few weeks ago, Missouri voters approved a ballot measure legalizing adult-use cannabis, joining 20 other states with similar legislation. The law went into effect on December 8, with the first retail licenses set to be approved by early February. While Missouri has had a medical marijuana program in place since 2020, the introduction of an adult-use program represents a significant expansion of the market. According to MJBizDaily estimates, Missouri’s first-year adult-use sales could reach up to $550 million, with fourth-year sales projected to generate $800 to $900 million. As we’ve seen in other states, a new legal market for adult-use cannabis brings a surge of new businesses and capital. To ensure the processes, procedures, technology, and trained staff to serve this industry are in place, bankers need to start with a plan. Fortunately, a playbook exists to help bankers understand both the opportunities and the risks related to serving cannabis-related businesses (CRBs) and navigate this new market successfully. Here are a few points from that playbook to keep in mind. Understand the Realities of Cannabis Banking While banking this line of business offers compelling financial benefits such as new low-cost deposit growth, non-interest income, and the potential for earning assets, banks need to make sure they are grounded in the realities of the cannabis industry and the strategic business reasons for getting involved. A clear understanding of what is required to serve CRBs and minimize risk to the financial institution will help bankers determine if this industry is a good fit for their institution. Update Policies and Procedures Banks will need to update their existing policies and procedures to reflect the compliance and regulatory requirements of this industry or develop new ones if necessary. Cannabis banking will touch almost every aspect of the business, from audits and insurance to cash transporting and processing and even branch security. As new businesses enter the industry, you’ll need to have rigorous risk assessment standards and procedures in place to ensure you’re banking legal funds and have a clear line of sight into the business and its beneficial owners. ARE YOU READY TO SERVE MISSOURI’S FAST-GROWING CANNABIS MARKET? By Tony Repanich, Shield Compliance 20 | The Show-Me Banker Magazine
Both bankers and customers should expect high levels of transparency in their operations and interactions. This can pay additional dividends down the line, as strong, open relationships yield positive referrals. Be Prepared for Increased Competition As an emerging industry, banks should anticipate ongoingmarket changes and be prepared to adapt to remain competitive. Specifically, there is significant interest in howchanges to federal cannabis policy will impact banking. Whilewe do not believe the passage of federal reform, such as the SAFEBanking Act, would change the compliance and due diligence required for this industry, it would be an important step toward removing the regulatory uncertainty in themarket and would open the door formore financial institutions to serve the industry. With the U.S. cannabis industry projected to reach $41.4 billion by 2025 and strong growth projected for Missouri (and neighboring Illinois), you can be certain that more financial institutions will enter this market in the coming years. Increased competition typically comes with more competitive terms for the customer, so you’ll want to be ahead of the curve and be ready to sharpen your pencil when that time comes. As President andChief ExecutiveOfficer of ShieldCompliance, Tony leads day-to-day operations and is the company’s principal product architect. Having served as a senior executive at aWashington State-based community bank for over 25 years, Tony has in-depth knowledge of the banking industry and the regulatory and compliance requirements for high-risk industries. Today he brings that knowledge to financial institutions serving and considering serving the legal cannabis industry. ■ Meeting compliance requirements includes developing the systems, applications, and onboarding processes that allow you to vet potential customers and access critical customer and transaction data, all while delivering a positive customer service experience. BSA/AML Compliance As a banker, you’ll be responsible for ensuring your cannabis clients are operating within state guidelines. Having systems and processes to help you reconcile data frommultiple sources can help you do that efficiently and accurately. Investing in specialized BSA/AML compliance technology will help your bank operate more efficiently, allowing compliance staff to focus their time, energy, and brainpower on judgmental decision-making, analysis, and customer service. Staff Training While technology will help make your staff more efficient, you’ll also need to hire or train specialized cannabis bankers who have a deep understanding of the industry. This knowledge will help them better monitor customers’ business activity while allowing them to deepen their customer relationships. “While technology will help make your staff more efficient, you’ll also need to hire or train specialized cannabis bankers who have a deep understanding of the industry. “ Scan the QR code to download your copy of the Shield Compliance Cannabis Banking Playbook. A Cannabis Banking Playbook The emerging legal cannabis industry brings significant growth potential, challenging operational demands and complex regulations. But cannabis banking does not have to mean high-risk banking. Informed by the experiences of pioneer bankers, the Shield Compliance Cannabis Banking Playbook defines a path forward for banks to serve cannabisrelated businesses compliantly while gaining financial rewards from this market. December 2022 | 21
NEWS F R O M Y O U Mid America Bank Promotes Koetting and Sweezer Mid America Bank has promoted Jacqueline Koetting to AVP, Regional Retail Manager, and Carl Sweezer to Market President – Jefferson City. Jackie Koetting has been in banking for over 20 years, serving in various roles, most recently as Branch Manager of Mid America Bank’s Wardsville branch. In her new role, Koetting will be responsible for the effective performance of branches, including operations, customer service and training. Koetting was born and raised in midMissouri, and in her free time, she enjoys camping with her family. Carl Sweezer has been in banking for over 18 years and graduated from the Barret School of Banking, Commercial Lending Academy. As Market President – Jefferson City, Sweezer will be responsible for developing new business and maintaining the Bank’s existing loan and depository portfolio in the Jefferson City market. As a banker, Sweezer enjoys watching clients’ businesses thrive and being able to play a part in their success. In his free time, Sweezer enjoys hunting, fishing and spending time with his family. ■ Mid America Bank would like to congratulate Jackie and Carl on their promotions. Mid America Bank Hires Larimore as AVP Treasury Management Support Specialist Mid America Bank is pleased to announce that Erin Larimore has joined the Bank as AVP Treasury Management Support Specialist. In this role, Larimore will be responsible for sales, administration and development of the Bank’s treasury management products and services and digital banking solutions. Larimore brings 14 years of banking experience to Mid America Bank, having held various positions, from customer service representative to branch manager, over the years. She worked as an Electronic Banking & Treasury Management Specialist with another local bank for six years. Larimore holds a Bachelor of Science Degree in Psychology with a minor in Criminal Justice from Lincoln University. She and her family reside in central Missouri, where they are members of Capital West Christian Church. Outside work, she enjoys traveling, baking and spending time with her family. ■ Community Bank of Raymore Announces the Promotion of Jeremy Mansur to Assistant Vice President Chairman/CEO William McDaniel, President Jack Hopkins, and Senior Vice President/Trust Officer Leslie Arnold are pleased to announce Jeremy Mansur as Assistant Vice President. Jeremy has been an associate of Community Bank of Raymore since 2011, developing hands-on banking knowledge in all departments. As an Assistant Vice President/Trust Officer of our 740MM (+) Trust Department (servicing over 172 account relationships), Mr. Mansur primarily applies his experience as our client’s liaison to ensure their satisfaction and our reliability. In an interview in September 2022, Jeremy stated, “Communication is the key to good customer service, and that’s exactly what we do here at Community Bank of Raymore with all our clients.” Jeremy is a high school graduate of Raymore-Peculiar High School and a lifetime resident of Raymore. After graduating from Northeastern State University, Jeremy continued his education by recently graduating from the Cannon Trust School, where he acquired his CTFA (Certified Trust & Fiduciary Advisor) certificate. Mr. Mansur continues his education to stay informed and up to date on current banking issues and technology by attending the Barrett School of Banking and the MBA (Missouri Bankers Association) Banking Leadership Missouri Program. Since joining our staff, Jeremy has served our community, volunteering his time and talents in several local nonprofit organizations and City related committees such as the Sunrise Optimists, the Raymore Chamber of Commerce, and the Planning & Zoning Committee for the City of Raymore. Representing CBR on a state level, Jeremy serves as Chairman of the Missouri Bankers Association Trust Committee and Co-Chairman of the MO-KAN Trust Conference. Congratulations, Jeremy! ■ 22 | The Show-Me Banker Magazine
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