O C T O B E R 2 0 2 2 Elections and Advocacy for Community Banks PRESIDENT’S MESSAGE
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INSIDE THIS ISSUE 06 08 28 34 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 12. Meet Your Missouri Banker 14. Technology and Great Company Culture Go Hand-in-Hand 16. MIBA 45th Annual Convention & Expo 20. A Background On Joseph Stewart III 22. 2022 Leadership Division Conference 24. Retired MIBA Executive Passes Away: A Tribute to Jerry Sage 27. 2022-2023 Officers 28. Ninety Years of the FHLBanks: A Thought for Each Decade 31. 2022 MIBA PAC Honor Roll 32. BHG: Credit Model Worth a Billion 33. Dates and Events 34. Price Pullback Prospects Availability of Discount Bonds Causes a Rethink of Strategies October 2022 | 1
PRESIDENT’S MESSAGE Tyler Bender “Elections are a fundamental part of our democracy. To be heard, participation in our democracy is necessary.” Elections and Advocacy for Community Banks This letter is my first as the newly elected President of MIBA. It is an honor to serve you and all community banks inMissouri. Following Jack Hopkins as President is daunting, and I will continually strive tomeet the expectations he set through his example. After September’s very enlightening and informative convention, I’d like to take the opportunity to highlight two critical topics: Elections and Bank Advocacy. Elections Elections are a fundamental part of our democracy. To be heard, participation in our democracy is necessary. AsThomas Jefferson said, “We do not have government by the majority. We have government by the majority who participate.” I often speak with people who bitterly complain about the government, but when asked if they voted, they answer no. The government and its ever-changing policies are constantly targeting community banks. The only shot is to have the right players representing us. If we do not vote, then we certainly will not have representation. We must educate ourselves on the issues and candidates’ beliefs regarding community banks and small businesses. Their agendas are often surprising. The elections next month will go a long way in deciding the future of banking. We must turn up at the polls and vote. Advocacy Beyond voting, we must make our voices heard. I know many people who are frustrated with what they see as a corrupt system not worth the effort to fight. This view could not be further from the truth — our voices matter. They are listening in the Halls of Congress and the offices in Jefferson City. They are listening to those who make the most noise. As the saying goes, the squeaky wheel gets the grease. Credit unions, consumer groups, and other organizations are making a lot of noise. We need bank advocates who are willing to step up. I challenge all community banks in Missouri to find at least one person in their institution to be an advocate. Have them reach out to the MIBA offices and ask what they can do. Beyond visiting Jefferson City and Washington, letters, phone calls, and meetings are beneficial. Have your bank advocates utilize the tools provided by MIBA and ICBA. If they need any guidance, feel free to have them reach out to me as well. I draft many letters, use social media (Twitter is an excellent resource for staying informed of what is going on in Congress), and constantly touch base with staffers. There are many tools we can use. Just remember, to be heard, we must make enough noise! ■ Connect with Tyler at @tmbender They are listening in the Halls of Congress and in the offices in Jefferson City. @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 “Managing compliance is a role that community bankers take more seriously than any other segment of the financial services industry. We know the decisions we make, the way we do business, and the manner in which we conduct business, has an effect on our customers and communities.” Connect with Brad at @BradMBolton My Top 3 Compliance discussions for every team 1. Reg E/Overdraft Programs and Representments 2. Fair Lending/Section 1071/TRID 3. Data/Third-Party Management/ Cyber @bradmbolton In today’s intense regulatory landscape, compliance extends to every aspect of banking, so much so that no one person or team can be solely charged with managing a bank’s compliance requirements. In fact, compliance has grown to become a massive responsibility that must be part of every employee’s job. We’re looking at the need for a full culture of compliance. But what does it take to get to that point? It has to start at the top. When I was new to my CEO position, we were faced with the retirement of a seasoned compliance officer, and we transitioned that role by promoting a rising leader to the position. This individual is exceptionally bright, but we saw the writing on the wall: compliance is far more than a silo within the bank. So, we made a commitment to her that we would walk beside her and support her in her compliance journey. Our senior leadership team took that to heart, and it stuck with us, creating an environment where compliance plays a significant role in everything from our strategic direction to our daily operations. We didn’t realize we were creating a shift in our habits, but we have benefited from that decision. To this day, I still share important regulatory and compliance articles with relevant teammembers, emphasizing hot-button issues or keynotes along the way. I hope by exemplifying an emphasis on compliance, the rest of the organization recognizes its importance to our business. Regulations require what we do every day as community bankers: protect our customers. That is probably why managing compliance is a role that community bankers take more seriously than any other segment of the financial services industry. We know the decisions we make, the way we do business, and the manner in which we conduct business, has an effect on our customers and communities. Thankfully, everybody wins when compliance becomes a bank focal point. Employees gain a broader understanding of the “whys” behind decisions. Customers benefit from additional protections, disclosures, and support. Regulators win when a bank’s exam is simple and straightforward, and it eases their workload when compliance is a priority. Even shareholders receive an advantage because a happy customer base is a referring customer base. So, as you read this month’s compliance issue, I hope you’ll consider how to create or enhance your own culture of compliance. Because when you do, you strengthen not only your bank but the products and services you bring to your community. ■ 4 | The Show-Me Banker Magazine
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FLOURISH “Community banks stand out in today’s financial services space because our business model depends on an ecosystem where the bank only benefits when customers do.” @romerorainey Rebeca Romero Rainey ICBA President & CEO Connect with Rebeca @romerorainey. This month’s issue of Independent Banker focuses on budgeting issues with a special emphasis on the ICBANational Community Bank Service Awards. With that two-pronged concentration, I can’t help but consider the connection between our role of service and the impact regulation can have on our very ability to serve. Inherent to our business model is a passion for supporting our communities, one that allows for flexibility to meet the individual needs of our customers. On the other end of the spectrum, rigidity is intrinsic to regulation. That pressurized relationship constantly needs calibration to ensure that our customers and communities remain the priority, and regulators and legislators need to understand that regulatory constraints often limit a community bank’s ability to support its customers. For example, there’s a lot being discussed about the overdraft rules, how they will get written and what effect they will have on the communities we support. Overdraft is a service we provide to our customers — one that is clearly disclosed and articulated — and our customers choose to derive value from it. Overzealous regulation will limit a product specifically designed to protect their interests. Doing what’s right for our customers remains our chief priority and guiding principle, and there’s certainly much we can do outside of our banking services to make that happen. Just look at this year’s Community Bank Service Award recipients. American Savings Bank in Hilo, Hawaii, runs the Kahiau Giving Campaign to benefit local nonprofits. First Community Bank Where I’ll be this month I’ll be attending the Community Bankers of Georgia Annual Convention and continuing to advocate for community banks here in Washington. of the Heartland in Clinton, Ky., started its “Make a Difference Program” with the goal of supporting foster children, and has expanded it to not only enhance that vision but also to incorporate an added community service focus each month. These honorees exemplify the spirit of community banking, one that we carry with us in our everyday actions on behalf of our communities. Community banks stand out in today’s financial services space because our business model depends on an ecosystem where the bank only benefits when customers do. That’s why ICBA focuses much of our work on telling those stories to legislators and regulators, ensuring they understand how community banks show up for their communities. They need to see that we take care of those we serve. That’s why I can say with confidence that no matter the regulatory pressures that come to bear, we will continue to thrive. And because we lead with a spirit of service and a focus on doing the right thing by our customers, our communities will flourish as well. ■ 6 | The Show-Me Banker Magazine
MIBA LOBBYING REPORT Andy Arnold Arnold & Associates ... we will look for a vigorous debate over the next couple of months ending with leadership elections the week after the November general election. With the August primaries behind us, a clearer picture of the 2023 legislature is emerging. There will be eight new members of the Senate come January. Given the makeup of the districts, we predict the following will be elected in November: Nick Schroers, 2nd; Travis Fitzwater, 10th; Rusty Black, 12th; Curtis Trent, 20th; Mary Elizabeth Coleman, 22nd; Tracy McCreery, 24th; Ben Brown, 26th; and, Jill Carter, 32nd. While the Republican/Democrat makeup will remain the same, several of those elected (Schroers, Trent, Coleman, Brown, and Carter) are not happy with the status quo regarding leadership. So, we will look for a vigorous debate over the next couple of months ending with leadership elections the week after the November general election. On the U.S. Senate front, current Missouri Attorney General Eric Schmitt won the Republican nomination; and Trudy Busch Valentine won the Democrat nomination. This is shaping up to be an expensive match-up with the recent U.S. Supreme Court ruling on anti-abortion law and the reversal of the 1970s ruling of Roe vs. Wade taking center stage. There will also be a proposed amendment on legalizing the adult use of marijuana on the ballot. We’ll report more after the mid-November House and Senate Republican caucus regarding leadership. ■ www.bell.bank Member FDIC 34617 October 2022 | 7
LEGAL EAGLE SPOTLIGHT Camber M. Jones Eric L. Johnson It cannot be disputed that the agriculture and food industries are a substantial part of the American economy. In 2020, according to the USDA, agriculture, food, and related industries reflected 5% of the U.S. GDP, or approximately $1.055 trillion. In Missouri, according to a 2021 economic contribution study, agriculture, forestry, and related industries contributed $34.9 billion in value added to the Missouri economy. Given its economic importance, many protections are given to agricultural producers and buyers of agricultural products that alter or modify the traditional collateral rules in lending. The purpose of this article is to highlight some unique provisions a lender should be cognizant of when making an agricultural-related loan. The Food Security Act of 1985 The Food Security Act of 1985 (FSA) was enacted, in part, to protect purchasers of farm products (11 U.S.C. § 1631). Congress was concerned that certain states would permit a secured lender to enforce liens against the purchaser even if the purchaser did not know that the lien existed. Congress found that this double payment burdened interstate commerce and inhibited free competition. Under the FSA, for a secured lender to remain perfected in farm products, it must provide notification of its security interest to the potential purchaser of such farm products. How notice is provided depends on whether the respective state is a direct notification state or has adopted a central filing office. For example, Missouri is a direct notification state. The lender should know which state’s notifications laws apply, or risk being unperfected. As part of its security agreement, a lender should require a list of the borrower’s buyers, commission merchants, and selling agents. This list will provide a basis for whom to send its notification. As part of its routine review of the producer’s financials, the lender should review where sales are being made by the producer in addition to being generally aware of other buyers in the producer’s area. Even if not included on the list provided by the borrower, the lender will want to consider sending notifications to such buyers. Assignment of Federal Crop Insurance Proceeds Generally, an Article 9 security interest in Federal Crop Insurance Proceeds will only be effective with respect to distributed Beware Collateral Pitfalls in Agricultural Loans Spencer Fane LLP Spencer Fane LLP 8 | The Show-Me Banker Magazine
proceeds (7 U.S.C. § 1509). However, this may be too late, given the borrower’s circumstances. Accordingly, to effectively take a superior collateral position in crop insurance, in addition to identifying proceeds in an Article 9 financing statement, the lender will want to execute an “Assignment of Indemnity,” have the borrower execute the assignment, and then have it approved by the borrower’s crop insurance provider. Failure to do so will leave a lender vulnerable to other creditors and potentially the whims or diversions of the borrower. PACA/PSA If a lender’s borrower is an entity that routinely deals with producers of agricultural or livestock-related products (e.g., a grocery store or a restaurant), the lender should be cognizant of the implications of the Perishable Agricultural Commodities Act (7 U.S.C. §§ 499a et seq.) (PACA) and the Packers and Stockyards Act (7 U.S.C. §§ 181 et seq.) (PSA). PACA provides protection to producers and growers of perishable goods who transfer those perishables to brokers, dealers, and merchants, who in turn sell such goods to purchasers, by mandating the creation of a statutory trust for the benefit of such producers. PSA requires packers and poultry dealers to do the same for unpaid sellers and poultry growers. As beneficiaries of these trusts, producers are entitled to a priority lien position over secured creditors of the seller/broker, provided that certain statutory notice requirements are met by the producer. As a practical tip, the lender should monitor its borrower’s accounts payables, particularly in the context of a struggling and potentially insolvent supermarket, restaurant, or produce wholesaler. If the lender sees payables to entities that may be entitled to priority pursuant to PACA or PSA, it could signal a potential erosion of collateral position or make the lender subject to a potential clawback for payments received. Silent Liens and Priorities Under various states’ laws, creditors are given liens (and, in some cases, priority liens) in crops, livestock, and/or commodities. For example, in Illinois, a landlord will have a priority lien (of limited duration) on crops over an Article 9 lien without making any official filing. Similarly, in several states, suppliers of goods and services (chemical, fertilizers, feed, fuel, and custom planting/ harvesting costs) may have a lien on crops or livestock, provided they comply with any applicable notice and filing requirements. When making a farm loan, the lender will want to understand which state law applies and whether any specific liens apply. Conclusion Successfully navigating these potential collateral pitfalls requires a lender to know its borrower’s business and financials. It also requires that the lender understand what laws may be at issue at the state and federal levels. Failure to do so will result in potential collateral erosion and frustration if the lender is ultimately required to enforce its security interests. ■ Under the FSA, for a secured lender to remain perfected in farm products, it must provide notification of its security interest to the potential purchaser of such farm products. How notice is provided depends on whether the respective state is a direct notification state or has adopted a central filing office. October 2022 | 9
Congressman Blaine Luetkemeyer Missouri’s 3rd Congressional District “Some of the largest corporations in the world are using their influence and boardroom seats to advance progressive priorities at the expense of American jobs.” A VIEW FROM THE CAPITOL We continue to see a pattern in our country that I’m sure you, as bankers, are well aware of. Political agendas, specifically climate change, are seeping into areas that have absolutely nothing to do with them. Through the guise of Environmental Social and Corporate Governance (ESG), progressives within the government and corporate America are taking outspoken positions on political and social issues that should have no bearing on business. ESG began as a fabricated metric to illustrate a perceived “enlightenment” that has transformed into a control tactic over corporate America. The parameters for who is “environmentally responsible” and who is not are murky at best. For example, Exxon Mobile received a higher ESG rating than Tesla. Not surprisingly, that rating change occurred when Elon Musk threatened to make public the inner workings of Twitter. No neutral observer could honestly argue that the ratings have anything to do with governance. It’s simply about applying political pressure on businesses to declare themselves aligned with the left, often at the expense of serving their customers, paying their workers, and supporting their local economies. In the House Financial Services Committee, we saw a perfect example of the control some elected officials try to attain through ESG. In a hearing with seven bank CEOs, Congresswoman Rashida Talib demanded that each bank commits no further financing of fossil fuel production. Fortunately, the witnesses understood the real-world effects of that disastrous idea and did not satisfy the Congresswoman’s demand. Another even more troubling example is the proposed SEC Climate Rule. The SEC proposes that companies calculate and report the “climate-related risks” associated with their products and operations. That includes the emissions of every supplier and a prediction of the future emissions their products may create after the sale. Publicly traded banks would be charged with filing a disclosure for all their business customers. While that wouldn’t directly affect MIBA members, if ESG/INDEX ACT 10 | The Show-Me Banker Magazine
any of your customers supply anything to a publicly traded company, they will be on the hook for those disclosures. Again, it’s a glaring example of regulators completely disregarding the real consequences of their absurd demands. Unfortunately, it’s not just politicians or Twitter warriors demanding ESG commitments. Some of the largest corporations in the world are using their influence and boardroom seats to advance progressive priorities at the expense of American jobs. Even worse, they’re doing it with everyday citizens’ retirement savings. As you know, retirement plans and pension plans often invest in mutual funds or exchange-traded funds (ETFs). Those funds are comprised of hundreds of businesses whose stock is purchased and held at the fund. However, the individual investors almost never get the chance to exercise the voting rights the shares they own provide. That’s because the fund managers, like BlackRock or State Street, are voting on retirees’ behalf. They obviously don’t ask the retirees their opinions before voting, nor do they want it. They use the votes owned by individual investors to pursue their own agendas. For example, in a letter to America’s CEOs, the CEO of BlackRock, Larry Fink, called on every company to “set short, medium, and long-term targets for greenhouse gas reductions.” He makes that demand with an implied threat that if companies do not comply, he’ll use the shares he controls (that he didn’t buy; retirees and pensioners did) to undermine the companies’ leadership. And because the “Big 3” investment advisors — BlackRock, Vanguard, and State Street — are the largest owners in 96% of the S&P 500 companies, they have the power to do it and have shown they are willing. Before the August district work period, I introduced the Investor Democracy is Expected (INDEX) Act. Simply put, this bill gives individual investors — retirement savers, pension holders, and owners of these index funds — the ability to participate or not participate in shareholder votes. Fund managers would no longer be able to utilize the shares of everyday Americans to steer companies in a direction that satisfies their political desires. Those shares either get voted by the actual owner or don’t get voted at all. Recently former OMB Director Russ Vought said in an interview, “Stopping ESG will take fortitude from Congress and fortitude from states,” and he’s exactly right. To go even further, it will take fortitude from businesses that believe their mission is to provide a service to their customers, create employment opportunities for their workers, and provide for their families to resist the intimidation tactics so many are experiencing. If businesses focus their efforts on the environment or other priorities, they are certainly well within their right to do that. But it must be their choice — not a mandate forced on them by regulators and activists. ■ Recently former OMB Director Russ Vought said in an interview, “Stopping ESG will take fortitude from Congress and fortitude from states,” and he’s exactly right. October 2022 | 11
MISSOURI BANKER MEET YOUR Name: Wendy Durham Title: Assistant Branch Manager Bank Name: Farmers & Merchants Bank We are a true community bank, very involved in our schools and organizations. Where are your main bank and branches located? And what is the market like? Our main bank is located in St. Clair, MO, with branches in High Ridge, Lonedell and Eureka. The market areas for each branch vary widely in median income, with two being more rural and two mostly urban. What is something unique about your bank? Farmers &Merchants Bank has been operating under the same name since 1913. How did you get started in the banking business? Well, I have always been good with numbers. However, I was not even looking at banking as a career in the beginning. My family owned a catering company with a private park for about 15 years when we had a catastrophic fire that destroyed our catering hall and kitchen. We were in a spot where we were unable to rebuild, and I was forced to look for a job to help support our family. After multiple interviews where I was told that since I owned a business, I was “overqualified” (for pretty much any “normal” job), I walked into this small community bank that had the friendliest people working there. I asked if I could submit a resume, was directed to an office off the lobby, and was hired as a teller after an impromptu interview with the branch manager. Little did I know I would be adopted into the family that is Farmers & Merchants Bank. As I stated earlier, being good with numbers made it a perfect fit for me, and seven years later, I am still at it. What is the most important thing you’ve learned from this career so far? In this career and life in general, never judge a book by its cover because people will always surprise you. You will meet some of the most genuine and eccentric people, and sometimes the people you least expect may be the ones who surprise you the most. We get people from all walks of life in our branches, and if you underestimate someone, they will likely prove you wrong. Tell us about the Bank’s community investment efforts. This is where FMB stands out from the rest. We are a true community bank, very involved in our schools and organizations. One example is our Mascot Debit Card Program. Implemented in 2013, this program offers customers the option to choose a local school mascot debit card. Through their use of these cards, FMB has donated more than $176,000 to these schools through this program since its inception. What is the Bank’s biggest challenge in internet banking/mobile banking? Cybersecurity and fraud are two definite challenges in these areas, but the combination of our staff experience, attention to detail and strategic partnerships with our core and outside vendors all play a vital role in ensuring we hit any challenges in these areas headon. We make it a top priority to keep up with technology in this area. Our Online Banking and Mobile App offer the most up-to-date technology and conveniences out there. We also try to educate our client base as best we can on the various updated incidences of fraud to help mitigate any risk in these areas. What’s your favorite thing about your bank/banking in general? It is definitely a combination of the customers and the bank family. I say family because being a part of this bank is truly having an extended family. Several of our customers have become like family at this point as well. We celebrate with them, and we mourn with them, and that’s what community banking is all about. If you didn’t have a career in banking, what other career would you choose? I have a strength in hospitality, and I love to bake and cook in general. That being said, probably having my own café or bakery would be a great fit. I would still get to interact with people and become part of their lives, just in a different way than I do now. ■ 12 | The Show-Me Banker Magazine
2021 MIBA Financial Directories ARE AVAILABLE! • BKD • Bank Compensation Consulting • Bankers Security, Inc. • First Bankers' Banc Securities, Inc. • Flat Branch Mortgage Services • ICBA • ICBA Securities • JMARK Business Solutions, Inc. • KASASA • Midwest Independent BankersBank • Office Essentials • QwickRate • SHAZAM • TIG Advisors 2020 MIBA Financial Directorie ARE AVAILAB Each MIBA member will be mailed a complimentary copy, but you NEED resource directories throughout you Order now and get your extra copies To order extra resource directories contact Hannah Ruge at hruge@miba.net or 573-63 For online or comma-delimited editions of the directory, visit www.bankdirectoriesonline.com to the following Associate Member advertisers in this year’s directory: • Bankers Security, Inc • Barret School of Banking • BKD, CPA’s & Advisors • Modern Banking Systems • Welch Systems Thank You! $35 each + shipping while supplies la miba.net • The Show-Me To the following Associate Member adv rtisers in this year’s directory: Each MIBA member will be mailed a complimentary copy, but you NEED these resource directories throughout your bank. Order now and get your extra copies ASAP! $45 each + shipping while supplies last To order extra resource directories call the MIBA office at 573-636-2751. For online or comma-delimited editions of the directory, visit www.bankdirectoriesonline.com 2 $45.50 each + shipping while supplies last T ord r extra resourc directories call the MIBA office at 573 636-2751 For online or comma-delimited editions of the directory, visit www.bankdirectoriesonline.com, to the following Associate M b r r ’s direct ry: • ank Compensation Consulting • Bankers Security, Inc. • Creative Planning • First Bankers’ Banc Securities, Inc. • Flat Branch Mortgage Services • FORVIS • ICBA • ICBA S curities • JMARK Business Solutions, Inc. • KASASA • Midwest Independent BankersBank • QwickRate • SHAZAM • TIG Advisors October 2022 | 13
Company culturematters. It seems fair to say that’s a near-universally accepted truth among business leaders these days. No longer seen as a fringe benefit, secondary to things like salaries and bonus plans, culture has become a key differentiator for many companies over the past decade. It’s easy to see why when you recognize that, according to a Deloitte study, 94% of executives and 88% of workers believe strong company culture is key to business success. But the challenge is not in recognizing the need for a vibrant culture; it’s building and nurturing that culture — something that can be especially tricky at a bank, where employees may be spread across multiple locations as well as onto a diverse array of teams and departments, with varying levels of responsibilities and personalities. Not to mention the new complication of engaging remote workers in a cohesive culture with the rest of the company. So how can these obstacles be overcome? Technology can help. It won’t do all the work, of course — after all, culture is, first and foremost, a human concern. However, the right tools can go a long way toward bridging the gaps between people at every level. At JMARK, we take great pride in our culture. We have been operating with a hybrid workforce for many years and have worked hard to create a united team, even with workers in multiple offices, as well as working from home from all over the country. These are the tenets we follow and the tools we use to create unity and cohesion among our teams, no matter where people work. 1. Make Communication Easy — People want to communicate with coworkers with the same ease their cell phones give them in their personal lives. At JMARK, we use Workplace fromMeta to give our teams a simple, single access point to chat with both video and voice calls. This solution augments our internal phone system and tools like Outlook, Microsoft Teams, and Zoom, ensuring that employees always have an effortless way to reach one another. 2. Make Collaboration Easy —With the right tools and a little practice, virtual collaboration can work every bit as well as in-person. Once again, Workplace is our go-to solution for this, allowing us to share documents and resources and team up via video call as if we were in the same room. Whatever technology you use, the key is to let everyone’s voice be heard and skills be shared, so the output becomes greater than the sum of its parts. 3. Bring Your People Together — A strong culture isn’t just about work. It’s about creating bonds of trust and fellowship on your teams. Come together as a company on a regular, frequent basis to celebrate each other, share victories, and let everyone spend some time with folks from other teams. At TECHNOLOGY AND GREAT COMPANY CULTURE GO HAND-IN-HAND By Thomas H. Douglas JMARK, MIBA Endorsed Partner 14 | The Show-Me Banker Magazine
“Technology is such a big part of the work we all do every day — and the world we live in — that taking advantage of how it can support and enhance your culture makes perfect sense.” JMARK, we hold weekly rallies every Friday afternoon, where we celebrate wins, console each other about challenges, honor teammates whose work stood out that week, commemorate anniversaries, and more. This rally takes place in our office, with remote employees joining via Zoom. Everyone in the office can see and hear remote attendees via the video conferencing system in our NOC (network operations center). 4. Make Hybrid Meetings Better —One of the big frustrations of a hybrid workforce is the hybrid conference roommeeting, with some people in the same room and others joining via video call. Ensuring that every person can both see and hear everyone else is extremely important. In fact, when JMARK recently moved offices, creating an audiovisual solution to this dilemma for our new conference rooms was at the top of our priority list, and we put our best internal engineers on it. The result was our Engage videoconferencing solution, which we have begun marketing to other organizations. In the end, creating that solution has paid off exponentially as people leave meetings with information rather than frustration and feel connected as teammates rather than disconnected by distance. 5. Be Transparent — A great culture is founded on trust. Trust is built on transparency. Share the goals, data, and vision behind policies and initiatives. We’ve already discussed rallies and meetings as a way to connect with your people; technology offers ways to keep everyone informed between those gatherings. Instead of writing yet another memo, choose mediums that feel less formal and more interactive, such as video —where you’ll get a higher open and view rate than a written email. Better yet, embrace the notion of short, live broadcasts to your company when you’ve got news, inspiration, or insight to share. 6. Let Your People Lead the Way —While every healthy company culture begins with the C-suite, the strongest cultures are those in which employees at every level have a hand in creating and nurturing. At JMARK, we formed a group of employees from every level and team to lead the charge in making a unique, enjoyable workplace that represents all our corporate values. This aptly named Culture Crew meets once a month to discuss culture initiatives ranging from charities to support to holiday parties to inclusivity. Technology is such a big part of the work we all do every day — and the world we live in — that taking advantage of how it can support and enhance your culture makes perfect sense. The right tools can break down distances and barriers to communication and collaboration to bring your people together and create a cohesive, enthusiastic team and a culture that your people will be proud to embrace. ■ To learn more about JMARK’s collaboration solutions for banks, including Engage and Workplace from Meta, visit JMARK.com or call 844-44-JMARK. October 2022 | 15
MIBA 45th Annual Convention & Expo was held September 12-14 at The Lodge of Four Seasons in Lake Ozark, Missouri. Attendees enjoyed education sessions, networking and entertainment. A big thanks to our sponsors who made this convention possible. We hope to see you at our next event. For more information, please visit www.miba.net. ■ MIBA 45th ANNUAL CONVENTION & EXPO 16 | The Show-Me Banker Magazine
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To viewmore photos, please scan this QR code. https://www.dropbox.com/sh/np1a7vlj8tzodtp/ AAA2vIRPyxJlhGoxRYhMScvRa?dl=0 October 2022 | 19
A BACKGROUND ON JOE STEWART III – PRESIDENT & CEO BANK STAR MIBA recently sat down with Joe Stewart to get to know him better. Joe is a MIBA board member and President and CEO of Bank Star. Joe Stewart and his wife, Sheila, have been married for 24 years. They have two children, son J.C. (21) and daughter Avery (18). Joe has many hobbies, including boating, fishing, flying, skiing, watching sports, cycling, riding motorcycles, and attending live music and sporting events, to name a few. We want to thank him for his time and hope you enjoy getting to know him as much as we did. Joe Stewart is the President and CEO of Bank Star. He has worked in every capacity in a community bank over the years — from a teller to the CEO. The positions and responsibilities he enjoys the most are the ones with the most direct contact with customers and the community. He did not intend to be a banker. Joe attended his first two years at Mizzou and then took a summer job that lasted a year and a half in credit and collections. This experience gave him a sense of accomplishment as he worked with customers in good times and bad. “I am confident that if you start your career in collections that it will make you a better lender.” Joe reflected. Following that year and a half hiatus from school, he moved back to St. Louis. He attended St. Louis University for three semesters before finishing up a year later at The University of Missouri St. Louis with a BSBA in Finance Degree. In addition to his undergrad degree, he also completed the Missouri School of Banking, the Madison Graduate School of Banking, and the Masters of Banking program, which was a partnership with LSU and Sheshunoff. Joe also received the Governance Fellow designation from the NACD (National Association of Corporate Directors) and holds a real estate license from the Missouri Real Estate Commission. He is a licensed pilot and has served on the Sunset Hills Board of Alderman. Being in the banking industry for 30 years has been a great experience. He remembers when he was one the youngest in the room at conferences and conventions, he joked that is not the case anymore. Joe is a second-generation banker. His father, Joseph C. Stewart Jr., and his group of investors acquired their first bank in Illinois in 1976 and then acquired several banks in Missouri from 1981-1990. Looking back, he said that the most rewarding part of his career was when he, and his group of investors, bought out his father and many of the founding shareholders in 2017. It was a challenging process whereby we sold three of the four subsidiary banks, then had a capital raise and conducted a tender offer almost concurrently. This left us with our new shareholder group and a $60MM bank in Pacific called Bank Star. Since then, we have acquired the Bank of 20 | The Show-Me Banker Magazine
Hillsboro in 2018 and opened our newest branch in Sunset Hills in 2021, pushing our new organization over $180MM. Joe and his wife have numerous charities that are close to their heart. Their primary focus is to support organizations that benefit children, including the Foundation for Children with Cancer, Make a Wish andThe Ronald McDonald House. When asked about the challenges facing the banking industry, he stated that “Growth is always a challenge. Getting to critical mass to achieve economies of scale is necessary for all banks.” He went on to say, “Loan and customer acquisition will be the way that all banks will compete. This will require not only a strong credit culture in the current economic environment but will require finding ways to produce this business more efficiently or profitably through streamlined processes and the use of technology.” As a MIBA board member, Joe talked about the benefits that come with membership, and he said that “First and foremost the advocacy and lobbying efforts of the MIBA to protect and benefit our industry, followed by educational opportunities and of course networking with fellow bankers.” One of the greatest joys of his career was being elected by his fellow bankers in Missouri to represent them on the Board of the Federal Home Loan Bank of Des Moines. Joe was elected three times and had the privilege of serving on the FHLB board for 10 years, serving as Vice-Chair of the Risk Committee, and was involved in the Federal Home Loan Bank of Seattle’s merger into the Federal Home Loan Bank of Des Moines. Joe passed on three pieces of advice to those coming up in the industry: 1. You can’t learn the tricks of the trade until you first learn the trade. 2. Get involved in your community. Network, Network, Network. 3. Do your current assigned duty and responsibility well, and you will be given greater duties and responsibilities. In conclusion, he said, “I have had an amazing career in an industry that I love. Any success that I have achieved could not have happened without the support of my wife, my family and of course the talented team at Bank Star that I have the great pleasure of working with on a daily basis.” ■ October 2022 | 21
CONFERENCE TOP GOLF — ST. LOUIS AUGUST 4, 2022 LEADERSHIP DIVISION 2022 22 | The Show-Me Banker Magazine
THANK YOU SPONSORS October 2022 | 23
For over 40 years, Jerry battled to keep community banks open for business, and the responsibility could not have fallen on more prepared shoulders. But before he became the defender of independent banking in Missouri, Jerry gained a tenacity for a different kind of adventure: hunting for the lost treasure of Valverde in the Amazon jungle and on the slopes of the Andes Mountains of Ecuador. Legend claims the Valverde treasure was named after a Spanish soldier who married an lncan woman. Further, the story says Valverde was ostracized by his countrymen because of his wife. He often complained of poverty until one day, she promised to make him the richest of the Spaniards. That night, she led him by hidden trails through the mountains until they reached a glittering cavern filled with a vast treasure of Incan gold. Just a small portion of the wealth made Valverde immeasurably wealthy. RETIRED MIBA EXECUTIVE PASSES AWAY A TRIBUTE TO JERRY SAGE JERRY SAGE, RETIRED EXECUTIVE OF THE MISSOURI INDEPENDENT BANKERS ASSOCIATION, DIED SEPT. 3, 2022. At his death, Valverde willed the map — showing the location of the treasure — to the king of Spain. Afterward, however, representatives of the king repeatedly failed to find the treasure. Many more treasure hunters also failed, as they were unable to endure the biting cold of the high altitudes of the Andes or they could not penetrate the Amazon jungle. Jerry Sage was in those mountains in 1967. His expedition climbed to 16,000 feet above sea level. After more than 40 days in the jungle, natives serving as guides got cold feet. “According to legend, there were cannibalistic Indians guarding the treasure. So, one night our guides decided they weren’t going to stay with us anymore,” Jerry said. “They got up in the middle of the night, stole our gas stoves and took off. That was the most frightening moment I ever spent in the jungle.” In the cold and wet mountains, it was very hard to build a fire. “We thought we had rice and double smoked bacon. We found what we thought was rice was actually raw peanuts,” said Jerry. “Luckily for us, water runs downhill and back toward civilization. The Amazon River wasn’t far away. After the bacon, we ate the moss that grew at the base of the trees. It took us 12 days to get out.” Despite his close call, he made more expeditions in search of the lost treasure of Valverde before he was hired as the executive director of MlBA in 1975. There were more than 600 independent community banks in the state at the time. The man who had barely survived the Amazon jungle, but had the grit to return to try again, became responsible for the year-in-year-out fight to keep the number of community banks from dropping. Becoming a Lobbyist By the time Jerry Sage became executive director of MlBA — the oldest state independent banker’s association in the country — they had been fighting to keep large banks from branching into Missouri since 1958. The first time Jerry lobbied for the association was in 1975. He did it as a favor for a friend, Gene McFadin, an attorney who had been hired by MlBA as its lobbyist. Jerry remembers that first appearance in the state Senate as a comical one. “Gene was tied up with work from his law firm; he asked me to testify for him in a banking committee meeting. 24 | The Show-Me Banker Magazine
When preparing his retirement article, one last question put to Sage by the MIBA staff was, “If you could pick your own epitaph, what would it be?” He jokingly said, “The Legend of Noel!” I remember him saying, ‘You don’t have to do anything but say the Independent Bankers of Missouri oppose the legislation,’” Jerry recalled. “I remember, when it came my time to speak, I got up on the high dais in front of this committee, and it felt like I was on trial before a tribunal. My voice was so squeaky, and I was so embarrassed; I’ll never forget it.” But despite his wobbly start, Jerry Sage soon showed himself as an effective lobbyist. “When there was a statewide branch banking referendum in 1958, a bunch of us old independent bankers hired McFadin and beat it,” said Bill Breedlove, a retired banker who, at that time, owned a $1 million bank in Rogersville, Missouri. “After that, Jerry did a great job as McFadin’s assistant; I don’t know anyone who could’ve done a better job.” During the 1980s, a number of banks were gradually removed. As large banks began branching into the various towns and cities, the state’s community banks faced a dilemma. They had a lending limit of just under $1 million, and when a customer exceeded that limit, the bank would have to participate with a correspondent bank or lose the customer. With large banks moving into the market, community banks had much fewer options for correspondent partners, and any one of the large banks could move into town equipped with customer information from their correspondent business. Then in 1982, after five years of pushing, MIBA convinced the state legislature to pass a bill sparing community banks from participating in loans with their large bank competitors. “The bill allowed banks to own up to 5% stock in another bank. Independent bankers could now create their own correspondent bank,” Jerry said. “And we could form a bankers’ bank in Missouri.” Missouri Independent Bank If MIBA was going to organize a bankers’ bank, the venture needed broad support from bankers around the state. MIBA commissioned a feasibility study and began organizing meetings of community bank CEOs across the state. “Jerry was instrumental in getting the study done, in getting the word out and in educating bankers about a bankers’ bank,” said Cam Fine, president and CEO of the Independent Community Bankers of America. Fine was hired to organize and charter the bank in January 1983. “The first time I met Sage was in April 1984 in Jefferson City, Missouri, at a MlBA board meeting. I was introduced as the brand-new president of Missouri Independent Bank. We were just kids then,” he said. Sage and Fine traveled the state together, enlisting investors for the new bank. By mid-1984, Fine, MIBA and Sage gathered the capital to open the bank. The charter for Missouri Independent Bank was awarded by the commissioner of banking at MIBA’s annual meeting in September 1984. In the years that followed, Missouri Independent Bank, now called Midwest Independent Bank, was an important partner to community banks as it competed against larger banks. It was Jerry Sage who helped make community banks possible. Managing a Successful Association Over the years, Jerry also proved effective at killing bills in the state legislature that hurt community banks. “Just about every session and just about every year it was a battle,” Cam Fine said, “[Jerry] was either blocking something bad or helping something good through. He was very successful beating back legislation that would limit or harm community banks.” Jerry had a strong influence on legislators, said Max Cook, a former president and CEO of the Missouri Bankers Association. Whether Missouri banks were fighting to remove a cap on insufficient funds fees, battling credit union overreach or new burdensome mortgage laws, community banks had an effective advocate in Sage, Cook said. “Jerry and I have been on the same page here in the state for many years, and we have worked jointly on issues for years as well,” he said. “The lobbying business is one of building relationships. Continued on page 26 October 2022 | 25
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