2024 ISSUE 2 Recession Proofing How To Benefit From a Lull in the Economy COMMUNI TY BANKI NG MONTH • COMMUNI TY BANKI NG MONTH • COMMUNI TY BANKI NG MONTH • APRIL IS Community Banking MONTH
INVESTMENT PRODUCTS Municipal Bonds Mortgage-Backed Securities Govt. & Agency Bonds Corporate Bonds Brokered CDs Money Market Instruments Structured Products Equities Mutual Funds ETFs FINANCIAL SERVICES Public Finance Investment Portfolio Accounting Portfolio Analytics Interest Rate Risk Reporting Asset/Liability Management Reporting Municipal Credit Reviews Balance Sheet Policy Development and Review Comprehensive SOLUTIONS 888-726-2880 The success of your team is the future of our firm. MEMBER FINRA & SIPC. INVESTMENTS ARE NOT FDIC INSURED, NOT BANK GUARANTEED & MAY LOSE VALUE. www.FBBSinc.com GAME ON! 2024 COMMUNITY BANKING CONFERENCE LEVEL UP YOUR KNOWLEDGE MEMBER FDIC FEATURED SPEAKERS IN MISSOURI How to Work With & Lead People Not Like You Kelly McDonald McDonald Marketing Building Trust in the Digital World: The Community Banker’s Guide to Personal Branding Eric Cook, MBA WSI Consulting Artificial Intelligence in Banking: Opportunities & Challenges Tim Dively, MBA CLA What’s Next for Banks and How Are Regulators Thinking About Potential Risks Allen North Federal Reserve Bank of St. Louis Get all the details and REGISTER today! WWW.MIBANC.COM/EVENTS AUGUST, 21-23, 2024 ST CHARLES, MO • AMERISTAR CASINO INVESTMENT PRODUCTS Municipal Bonds Mortgage-Backed Securities Govt. & Agency Bonds Corporate Bonds Brokered CDs Money Market Instruments Structured Products Equities Mutual Funds ETFs FINANCIAL SERVICES Public Finance Investment Portfolio Accounting Portfolio Analytics Interest Rate Risk Reporting Asset/Liability Management Reporting Municipal Credit Reviews Balance Sheet Policy Development and Review 888-726-2880 The success of your team is the future of our firm. MEMBER FINRA & SIPC. INVESTMENTS ARE NOT FDIC INSURED, NOT BANK GUARANTEED & MAY LOSE VALUE. www.FBBSinc.com COMMUNITY BANKING CONFERENCE YOUR KNOWLEDGE MEMBER FDIC FEATURED SPEAKERS IN MISSOURI How to Work With & Lead People Not Like You Kelly McDonald McDonald Marketing Building Trust in the Digital World: The Community Banker’s Guide to Personal Branding Eric Cook, MBA WSI Consulting Artificial Intelligence in Banking: Opportunities & Challenges Tim Dively, MBA CLA What’s Next for Banks and How Are Regulators Thinking About Potential Risks Allen North Federal Reserve Bank of St. Louis Get all the details and REGISTER today! WWW.MIBANC.COM/EVENTS AUGUST, 21-23, 2024 ST CHARLES, MO • AMERISTAR CASINO
INSIDE THIS ISSUE P.O. Box 1765 Jefferson City, MO 65102 573.636.2751 | miba.net Editor: Matthew S. Ruge Executive Director ©2024 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. Published for the Missouri Independent Bankers Association 4. PRESIDENT’S MESSAGE Community Bankers Meet Individual Needs 5. Save the Date: 47th Annual Convention & Expo 6. FLOURISH Why the Community Bank Story Matters in Advocacy 7. FROM THE TOP Driving Community Banking’s Agenda with Advocacy 8. A VIEW FROM THE CAPITOL Secure Payments Act of 2024 10. Community Banking Month 11. MIBA Leadership Division at the St. Louis Blues Hockey Game 12. LEGAL EAGLE SPOTLIGHT Loan Workouts What Lenders Need to Know 14. MIBA Lobbying Report 15. Community Bankers School 15. MIBA Upcoming Events 16. A BACKGROUND ON Mark Sloan President and CEO of Community First Banking Company 18. ICBA LIVE 2024 MIBA State Reception 20. ICBA LIVE 2024 MIBA Post Trip — Ocean Reef Club 22. MEET YOUR MISSOURI BANKER Quentin McConkey Security & Loan Officer, BTC Bank 24. Recession Proofing How To Benefit From a Lull in the Economy 26. 2024 MIBA PAC Honor Roll 27. News From You 27. MIBA Endorsed Vendors 28. MIBA Associate Members 30. Upcoming Webinar Schedule MADE IN THE USA 4 12 22 24 The Show-Me Banker Magazine | 3
Mark Laune MIBA President Peoples Savings Bank Hermann, MO PRESIDENT’S MESSAGE Community banking drives the success of all our towns and cities, no matter their size or complexity. Meeting the needs of these communities is critical to our success. The committed staff at all our banks are what drives community banking. We are partners in these communities with the citizens and businesses. The beauty of community banking is that one size does not fit all; there are different needs in each and every community that is served. The thinking and strategic vision of the employees and boards at our community banks have to be diverse and may change within each banking organization if they have several branches. We are partners in all these communities. As bankers in these community banks, we have to be transparent and look for ways to do things better and evolve as the industry changes. Competition is coming not only from other larger banks but from the fintechs Community Bankers Meet Individual Needs as well who are taking some digital levels of service higher, but we will face those challenges head-on. Banking going forward will be challenging and ever-changing, but community bankers are not afraid. We have faced challenges before and continue to provide the needed services to our customers. We can’t predict what the future holds, but one thing is true: Community bankers will have their customers and future potential customers front and center in their missions. Each and every one of you can tell success stories of your communities and customers, and that is what drives you to be the best banker you can be each and every day. With the help of the training programs offered by MIBA and ICBA, we can be ahead of any changes and challenges that we may face in the future. These organizations provide us with great opportunities for our staff to become better bankers. Community banking is not driven by a single moment in time but by the long journey of helping our customers. 4 | The Show-Me Banker Magazine
Rebeca Romero Rainey ICBA President and CEO @romerorainey FLOURISH Why the Community Bank Story Matters in Advocacy As we enter Community Banking Month, I am thrilled to honor the ways community banks step up to champion the needs of their communities. Whether it’s through personal interactions or modern-day conveniences, community banks hit that sweet spot where relationships meet today’s technology to provide unparalleled support to the customers and communities they serve. No other financial entity comes close to offering that high-tech, high-touch relationship that’s integral to who we are as community bankers. It’s not just about the deposits deployed in the form of loans, the contribution of thousands and thousands of dollars to the community or the countless hours spent supporting local families and businesses — it’s a combination of them all. These traits make it such an amazing industry to advocate for, because we are simply asking for what’s right so community banks can continue to work for the common good. And therein lies the difference that policymakers need to understand. When we share our personal stories with legislators on Capitol Hill or with rulemakers, we make it real for them. The community bank story takes what may be an academic theory, rulemaking concept or well-intentioned law-in-the-making and ensures it’s relatable on an individual level. It plainly demonstrates where emerging regulations may have merits or pitfalls and how they really will affect businesses and consumers in their communities. Community bank stories also demonstrate why legislators and regulators can’t paint with a broad brush across the financial services landscape. Our ability to differentiate ourselves and explain our relationship-based approach shows who we are as businesses and how we prioritize customer needs. This storytelling pulls concepts out of the theoretical into reality. When you can demonstrate how these topics affect the lifeblood of the community, it’s transformational. For instance, our ability to convey how community banks differ from Silicon Valley Bank and other failed large banks enabled us to effectively advocate to keep most community banks out of the FDIC special assessment. We made it real for regulators, ultimately ensuring that the rule was being written to differentiate community banks from the rest of the industry — because we inherently are different. So, it’s with a spirit of community bank pride that I invite you to share your story during Capital Summit (icba.org/capital-summit), taking place in Washington, D.C., from April 28 to May 1. Seize this opportunity to ensure legislators recognize the community bank difference. And in the meantime, take this month to celebrate all that you do. In the eyes of all who know your story, it’s well-earned. Where I’ll Be This Month I’ll be heading to Memphis for meetings with ICBA Securities and state partners, and then I’ll be attending the ICBA Capital Summit at the end of the month. I hope you will join us! 6 | The Show-Me Banker Magazine
Lucas White ICBA Chairman President of The Fountain Trust Company My Top 3 I love scenic and technical motorcycle drives, including these three favorites: 1. Dalton Highway from Fairbanks, Alaska, to the Arctic Circle. 2. Tail of the Dragon in the Great Smoky Mountains. 3. Million Dollar Highway in Colorado. FROM THE TOP I am an avid motorcyclist. In fact, I have completed two Iron Butt rides, riding at least 1,000 miles in 24 hours. Doing something like that takes passion, resilience, tenacity and strength of will, but it’s also a lot of fun. And as I assume the role of ICBA chairman, it strikes me that these same qualities apply to what we do as community bankers. Banking is the most heavily regulated industry in the country. We live by thousands of pages of rules that make it harder to do business and serve our customers, and those rules are a constant moving target, always under regulatory scrutiny. So, on top of our day jobs, we also need to teach rulemakers what we do, why we do it and how it spurs positive change. Every community banker needs to go to Capitol Hill at least once. In addition to being a banker, I served as a public defender for eight years after law school. I learned that when you explain the law, you have to make it simple and clear. It’s similar to how we translate community banking for legislators: We need to share our customer stories and convey our support for our communities because knowledge makes a difference. Just consider how ICBA successfully advocated for the FDIC to exempt most Driving Community Banking’s Agenda with Advocacy community banks from the special assessment to replenish the Deposit Insurance Fund after last year’s big bank failures. This one effort saved my bank just under $300,000. That is $300,000 of additional capital I can use to make loans in my community. I know we’re all busier than ever, but advocacy matters. We all have responsibilities at the bank, to our communities and with our families, but this needs to be a priority. I have three young sons at home, but my wife and I are making it work because we know just how important it is to speak directly with those making the rules. So, I encourage every one of you to take part in advocacy efforts. Don’t put it off until you have more time, until you’re older or whatever you’re telling yourself. Do it today. Write to your legislators. Call them and tell them what counts for your community. Attend the ICBA Capital Summit with your peers. You’ll be surprised at how much of an influence you’ll have — with a lot of fun in the process. As for me, I will be riding right alongside you, looking at the road ahead, the twists and turns it brings and, with them, the opportunities to make an impact. Lucas White is president of The Fountain Trust Company in Covington, IN.
Congressman Blaine Luetkemeyer Missouri’s 3rd Congressional District Imagine if an agent of the federal government showed up at your local grocery store and instructed the owner that the government would now determine the price of the food they sell. What would happen if a federal agency announced that it would begin dictating the price of the wood sold at Home Depot? I have no doubt the store owner and Home Depot’s board would emphatically decry this as authoritarianism that undermines our free markets and the American economy, and they would be right. I would do everything I could to put an end to it. Some people may argue that American families lack the sophistication or resources to negotiate the price of goods and, therefore, need the federal government to intervene on their behalf. After all, how is a Missouri family supposed to negotiate with Home Depot, which, as I’m writing this, has a market cap of $377.5 billion? Again, I find that level of government intervention in our economy to be anti-American, and I’m sure retailers of all sizes would agree. They would be forced to eliminate product lines and offer lower-quality products and services just to keep costs below the government cap. Massive layoffs would take place, and the prices of products that are not subject to the cap would have to rise just so those businesses could afford to stay open, which would harm lower-income families the most. It would be an economic disaster. Obviously, the government is not going to start dictating the price of retail goods anytime soon. However, I don’t have to tell you that the government has no problem setting prices in certain areas, but they’re not doing it on behalf of American families. It’s done on behalf of those retailers because, according to them, Home Depot and Walmart lack the sophistication and resources to negotiate interchange fees for debit card services. That is honestly the argument they make on Capitol Hill. As you know, the Durbin Amendment in Dodd-Frank directed the Fed to cap interchange fees on debit cards. That led to the Fed issuing Regulation II in 2011. We know what happened after that cap went into place: Access to free checking declined while the price of other banking services rose. According to studies from the Government Accountability Office and the Federal Reserve, the Durbin Amendment has disproportionately harmed low-income consumers’ access to affordable banking products. Further, the savings realized by retailers, which Home Depot’s CFO celebrated as a $35 million boost to profits in 2011, were not passed onto consumers. In fact, in many cases, retail prices went up. Not to mention, the services that interchange fees pay for, like data security, fraud detection and card replacement, were put at risk. A VIEW FROM THE CAPITOL Secure Payments Act of 2024 8 | The Show-Me Banker Magazine
“Until someone comes to me and says they want the government to control the prices of their own products, I can’t take seriously their calls for the government to do it to someone else.” Despite all these facts, the Fed recently announced it is revisiting Reg II and will likely issue a rule to tighten government controls on debit services even further. On March 5, I introduced H.R. 7531, the Secure Payments Act, which directs the Federal Reserve Board of Governors to perform a thorough economic analysis of its proposed changes to Reg II before finalizing the rule. Specifically, the analysis must measure the impact on consumers, including access to affordable debit accounts and a review of the primary beneficiary of the interchange cap. The intent of this bill is simple: Let us understand the true effects this rule will have on everyday Americans before the Fed moves forward. Not only will that be beneficial to policymakers, but it is also the most basic requirement of responsible government. Not surprisingly, I’ve received some pushback on this bill. This is certainly not the first time someone who benefits from big government has been upset with me. However, regardless of the industry, I will always push back on government price setting and interference in negotiations between private entities. Until someone comes to me and says they want the government to control the prices of their own products, I can’t take seriously their calls for the government to do it to someone else. The Show-Me Banker Magazine | 9
April 2024 Community Banking Month April is Community Banking Month—a celebration of the independent spirit and unwavering commitment of community banks to help consumers and small businesses achieve their financial goals to create communities of prosperity. VISIT MIBA.NET FOR A FULL SUITE OF COMMUNITY BANKING MATERIALS
MIBA Leadership Division at the St. Louis Blues Hockey Game Thank you to our sponsors who supported this fun event! The Show-Me Banker Magazine | 11
With billions of dollars of commercial real estate (CRE) loans coming due this year, it seems inevitable that large numbers of borrowers will struggle to refinance their CRE loans, as property values have declined and interest costs have risen, fueling predictions that banks should brace for significant losses on commercial real estate loans. So far, however, bank-reported delinquency rates have remained much lower than during the global financial crisis of 2008. For now, at least, a widespread reckoning in commercial real estate has not materialized. As the current environment for CRE loans persists, banks increasingly will face the need to restructure loans in their portfolios. Lenders and bank counsel who were around during prior real estate downturns have engaged in the loan workout process countless times before. But many of the hard lessons learned from prior recessions have faded from our collective memory, and the intervening years have brought new lenders that were not on the scene during the last recession. For those without prior workout experience, as well as those who have not handled a troubled real estate loan in years, it is helpful to review the fundamentals of dealing with problem real estate loans. Start with a Thorough Loan Review and Other Due Diligence Any strategy for handling a problem loan must start with a thorough review of the loan file and other due diligence. Before sitting down to negotiate with a borrower, the lender must understand what leverage it brings to the table. Moreover, a forbearance or loan workout agreement is an opportunity to fix or remedy any errors or oversights in the loan documents. The lender’s review should include all documents in the original closing file and all loan modifications, credit approval memorandum, correspondence files, appraisals and environmental reports, title commitments and a thorough review of any non-real estate collateral, financial statements and other financial information pertaining to the borrower, guarantors and any pledgors of collateral, and relevant information relating to other loans and extension of credit to the same borrower or its affiliates. At the outset of the review, the lender should obtain an updated title commitment or letter report prepared by a title company. This will allow the lender to determine whether there are any title issues that need to be fixed in the context of a forbearance or loan workout agreement. For example, does the legal description in the deed of trust match that in the updated title commitment? Has any property been released from the deed of trust? Is the property owner the same as the grantor in the deed of trust? Is the property subject to any mechanic’s liens that may take priority over the deed of trust or to any junior liens or encumbrances that are not permitted by the loan documents? The title work should also reveal if there are any delinquent real estate taxes. Similarly, the lender should conduct an updated Uniform Commercial Code (UCC) lien search to determine that the security interests in any personal property governed by the UCC are properly perfected, whether there are any issues with lien priority, and if there are any IRS or state tax liens against the borrower. The lender’s loan review should verify that the information contained in the loan file is consistent with the bank’s internal reports, memorandum and credit approvals, and any discrepancies should be identified and noted. For example, if a loan was approved based on a guaranty or letter of credit as credit support, but the guaranty or letter of credit was released by a loan officer who is no longer with the bank, this discrepancy should be flagged. Common errors in loan documentation include: some documents are unsigned or missing; UCC financing statements contain incomplete or inaccurate collateral descriptions, were filed in the wrong place or have lapsed; and guaranties were not properly confirmed when loan assignment of rents. Failure to conduct a thorough review of all loan documents and related files before discussing a workout strategy with a borrower may have unforeseen and unfortunate results, including missed opportunities to fix documentary errors and shore up collateral. Loan Workouts What Lenders Need to Know By Sherry Dreisewerd, Spencer Fane LLP LEGAL EAGLE SPOTLIGHT 12 | The Show-Me Banker Magazine
Identify Specific Problems and the Bank’s Goals for any Workout Scenario Of course, a bank’s primary goal in dealing with any problem loan is to realize full and timely repayment of the debt. However, when changes in the interest rate environment, collateral values and the borrower’s and guarantors’ overall financial condition make that unlikely, the bank should be realistic about best- and worstcase scenarios for resolving the loan and what it hopes to achieve in a workout. For example, is the bank interested in preserving a lending relationship with the borrower, avoiding foreclosure due to possible environmental concerns related to the property, or preserving jobs or the going-concern value of the collateral? Also, the bank must determine if the borrower wants to continue to operate the property or if they are resolved to hand over the keys. Moreover, what are the primary causes of the underlying loan default – poor management of the property, downsizing of a major tenant, construction cost overruns and time delays, or something else? All of these considerations, among numerous others, will factor into the bank’s strategy for addressing the nonperforming loan. Start with a Pre-Negotiation Agreement A pre-negotiation agreement (PNA) is a critical step before sitting down to negotiate with a borrower and should be thoughtfully drafted. A PNA may take the form of a letter agreement or a more formal document, but the main purpose is to maintain the status quo so that the bank and the borrower may freely engage in discussions and not be bound until a formal agreement is executed. The PNA also ensures that the borrower cannot use the negotiations themselves to oppose the lender’s efforts to enforce the loan documents or assert claims against the lender on the basis that the lender agreed during the course of the negotiations to a forbearance, or that the parties’ communications themselves constituted a modification agreement. Failure to obtain a PNA before starting negotiations can be prejudicial to a lender; a borrower whose back is against the wall is more likely to claim that the bank made promises on which the borrower relied to its detriment. Loan Workout and Forbearance Agreements If a borrower’s ability to repay a defaulted loan may improve over time (e.g., if the borrower is given more time to refinance), or if the loan is restructured (e.g., to require interest-only payments until cash flow improves), then a forbearance or loan workout agreement may be a good option. Technically speaking, a forbearance agreement and a workout agreement are different, although they share many of the same characteristics and goals and may be combined in a single form of agreement. A forbearance agreement temporarily defers the bank’s rights to pursue legal remedies such as foreclosure while giving the borrower a finite and short period to bring the loan current or refinance it altogether. By contrast, a workout agreement is typically intended to be a longer-term solution for dealing with a problem loan, which may involve restructuring payment terms and financial covenants, extending the maturity date of the loan, or reducing the loan commitment over time. Key Provisions to Include in Loan Workout and Forbearance Agreements Loan workout and forbearance agreements should always incorporate several key terms and conditions, including: • Identifying the existing loan documents, including promissory notes, guaranties, security agreements and pledge agreements, and any amendments or modifications; • The borrower and any guarantors should acknowledge the amount due on the debt and the existing defaults under the loan documents, including any payment defaults, breaches of financial covenants, or past-due taxes; • The borrower and guarantors should reaffirm the continuing validity of the loan documents and their obligation to repay the debt; and • Events that will constitute defaults under the loan workout agreement or terminate the bank’s obligation to forbear, including the expiration date for the forbearance, should be clearly identified. It is also prudent to include waivers, releases of claims and covenants not to sue the bank, especially based on claims of lender liability, negligence in the administration of the loan or other claims that may be advanced for the primary purpose of hindering or delaying the loan enforcement process. Beyond these basic considerations, forbearance and loan workout agreements must include provisions that are specific to the circumstances surrounding the defaulted loan. For example, in exchange for the bank’s agreement to forbear for a period of time or to modify the loan, the bank may require: • The pledge of additional collateral and/or partial paydown of the loan; • Additional guarantors; • Additional remedies that were not included in the original loan documents, such as the automatic right to the appointment of a receiver in the event of a further default under the loan documents; or • Confession or stipulation of judgment, which can save significant time and expense associated with obtaining a judgment against a borrower and/or guarantors. Ultimately, if the borrower is not able to get the loan back on track, a carefully negotiated and well-drafted forbearance or loan workout The Show-Me Banker Magazine | 13
MIBA Lobbying Report Andy Arnold Arnold & Associates agreement can strengthen the bank’s collection position, streamline the liquidation process and protect the bank against claims by a borrower. Prompt and decisive action, based on a thorough understanding of the loan, the borrower and the bank’s negotiating leverage will improve the bank’s prospects for recovery on the defaulted loan. When dealing with a problem loan, it is important to engage outside counsel with workout expertise early in the process, who can develop an appropriate legal strategy, issue spot and quickly move to enforce the bank’s rights and remedies should the workout not be successful. Sherry Dreisewerd helps lenders close complex financial transactions, working with national, regional and community banks to originate real estate, commercial, industrial and asset-based loans. She also helps lenders maximize loan recoveries through restructurings and workouts and has assisted numerous secured creditors, creditors’ committees and business acquirers in bankruptcy proceedings. Sherry can be reached at (314) 333-3934 or sdreisewerd@spencerfane.com. The Missouri House and Senate have spent the first two months of sessions at differing levels of dysfunction. The current Speaker of the House is still under investigation by the House Committee on Ethics for several alleged violations of House rules and state law. The Missouri Senate Freedom Caucus held up floor action in the Senate, demanding senate leadership advance initiative petition reform to make it harder to change the Missouri constitution by the initiative. However, even with the dysfunction, there have been small victories for Missouri’s community banks. Two pieces of legislation, SB 736 sponsored by Senator Sandy Crawford and HB 1803 sponsored by Rep. Terry Thompson, are moving. Both bills would raise the aggregate amount the state treasurer could invest in the MoBucks program. Rep. Thompson’s bill passed the House on Feb. 19, and Senator Crawford’s bill passed the Senate the week of March 4. Both bills are in a good position to be finalized, but we will need to be vigilant as every day is an adventure with this version of the Missouri General Assembly. BANCMAC COMMUNITY BANC MORTGAGE CORP. YOUR COMMUNITY BANK MORTGAGE PARTNER bancmac.com mortgages@bancmac.com 888.821.7729 | NMLS# 571147 BancMac provides correspondent and wholesale lending and is your Community Bank Mortgage Partner to help your financial institution originate fixed-rate secondary market loans including: PROGRAMS • Conventional Loans • USDA Rural Development Loans • Rural Living (Hobby Farm) Loans • VA Loans • Jumbo Loans • FHA Loans OUR PARTNERS RECEIVE: • Superior Service & Competitive Pricing • No Minimum Volumes • Significant, Non-Interest Fee Income • Non-Solicit Protections & More 14 | The Show-Me Banker Magazine
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A BACKGROUND ON Mark Sloan President and CEO of Community First Banking Company Mark Sloan’s life has been interesting, to say the least, and his journey to become a banker is nothing short of unexpected. In his own words, “I try to make life interesting; it’s only one that I get to live.” He was born in Hannibal, Missouri, and shortly after, moved to West Plains, Missouri. At the age of six, his family bought a motel in Truth or Consequences, New Mexico. The family moved there and put down roots. Sadly, his father left, and Mark ended up being raised by a single mother in the quirky and artsy town. At the age of 17, Mark decided that he needed to go his own way and moved to California. He spent most of his time in the cities of Palm Springs and Torrence. He worked hard to support himself, finish school and started attending a local college. During this time, Mark would travel home now and again to Truth or Consequence to visit his family. During these visits, he got reacquainted with a local girl, Ila, and they started dating. Eventually, they married, and Mark joined the Coast Guard. During the first half of Mark’s time in the Coast Guard, he was in an operational role stationed in the San Fransisco Bay area. While serving there, Mark had many interesting and eventful experiences. One example was on Dec. 11, 1994. While on Coast Guard Cutter Munro, Mark helped respond to a mayday from the Greek-registered 798-foot container ship, the Hyundai Seattle, that was approximately 550 nautical miles south of Adak, Alaska. The freighter reported an engine room fire that left the ship dead in the water. An HH-65 helicopter attached to the cutter hoisted all 27 crewmen to safety before their freighter sank. Because of the Coast Guard’s quick action, no injuries were reported, and the crew of the Hyundai Seattle returned safely to land. After serving in an operational capacity, Mark was transferred to Pacific Area Command and was able to complete his education and graduated from Saint Mary’s College of California with a business management degree. The events of 9/11 brought many changes for the country and Mark. The military transferred him to Topeka, Kansas. He knew it was time for a change and wanted to control his own destiny. He made the decision to leave the military and start a career in the banking industry. He took a job with Bank of America in Kansas City and was accepted into their management training program. Within a short amount of time, Mark was managing multiple bank branches in the Kansas City region as a retail bank manager. After his time in retail management, Mark was interested in becoming a Commercial Lender. Mark took a job at Marshall & Ilsley (M&I) Bank — now known as BMO Financial Group as a junior lender. He enjoyed getting to know that side of banking and spent another five years working hard and gaining insights and experience. 2008 brought upheaval. The financial crisis happened, and M&I had some difficulties navigating through that. During this time Mark said he received the most valuable lesson he has ever received in his banking career. The bank was having to work out a large number of commercial credits and Mark was now assigned some special asset work. Unfortunately, lots of customers lost their homes and businesses. “When I first started in banking, it was hard to find bad credit. We were growing year over year and there was no downside to lending. This practice led to a lot of complacency in lenders and no one was planning for a downturn. The crisis of 2008 was a huge eye-opener to all lenders and a very valuable experience,” he recalled. Mark was offered a job as a branch president in San Antonio, Texas, for the Farm Credit System. So, he moved to San Antonio and went to work at Capital Farm Credit in the ag side of banking. At the same time, Mark missed the beauty of the Ozarks and the peaceful rural living that Missouri afforded. He would come back every year to spend time with his family and couldn’t wait to get the opportunity to move back. 16 | The Show-Me Banker Magazine
A job became available at Community First Banking Company in West Plains and Mark jumped at the chance to move home. He bought his grandparents’ house, moved home and settled in. His life had come full circle — he was now living and working where he always wanted to be. Today, Mark is president and CEO of Community First Banking Company. He enjoys working at a community bank and does a little bit of everything in his position. “Managing the bank requires everything from meeting with people to keeping up on ever-changing regulatory issues to protecting bank assets by ensuring that the latest cybersecurity protocols are in place. Whatever it takes to keep things moving forward,” he said. “You have to be familiar of all aspects of the banking system.” Community First Banking Company has a great team of employees and Mark is proud of all they accomplish. The bank’s success comes down to “the customer relationships and the people,” he said. “Unfortunately, banking is kind of the same everywhere. So, the only thing that makes you different is the culture that you provide and the presentation you give to your customers. And I think we have a very friendly, down-home, family atmosphere at the bank.” “I never liked working at a bank where I had to tell somebody, I’m going to have to run this up the chain and see what happens,’ or ‘I’m going to have to get with other people.’ Luckily in a small bank like this, you get to make most of the decisions at the frontline level, which is unique compared to a lot of larger banks,” Mark said. The bank supports the community in many ways and belongs to a number of civic organizations. Personally, Mark belongs to the West Plains Downtown Revitalization Board, which is doing a lot to revitalize the downtown area. “West Plains is just like a lot of older, smaller towns with a town square that used to be a focal point. Then as big box stores came in and opened up on the other side of town, it changed things,” he said. “We’re trying to revitalize the downtown area and make it more unique for our community.” Mark has also been involved in the Ozark Farmers Agriculture Cooperative and was the president of that for almost three years. “It’s important to help small farmers get to the marketplace, so we started a farmers market to put farmers in contact with consumers.” Since its origination in 1997, the bank has been a member of MIBA, something that Mark is proud of and continues to support to this day. “I think it’s very important to be able to have a centralized location for smaller banks to lean on for industry help,” Mark said. “Whenever you’re looking at training, guidance on new laws and insight into where the industry is going, MIBA is there to help.” Mark and his wife Ila spend time together gardening and enjoying the outdoors. Mark also enjoys kayaking and riding motorcycles. They have a German Shepherd named Merlin. The Show-Me Banker Magazine | 17
ICBA LIVE 2024 MIBA State Reception 18 | The Show-Me Banker Magazine
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ICBA LIVE 2024 MIBA Post Trip — Ocean Reef Club 20 | The Show-Me Banker Magazine
DID YOU KNOW? Enjoy your association news anytime, anywhere. Scan the QR code to visit our online publication to stay up to date on the latest association news, share articles and read past issues. the-show-me-banker.thenewslinkgroup.org The Show-Me Banker Magazine | 21
MEET YOUR MISSOURI BANKER Where are your main bank and branches located? What is the market like? Our main bank is located in Bethany, but we have 23 locations across Missouri and Iowa. Our primary market is agriculture, but we are diverse and lend in ag, business, residential and commercial alike. What is something unique about your bank? While other banks are closing, we are acquiring more banks. Per the ICBA, we are ranked as the top ag bank in Missouri with over $1 billion in assets. We serve communities from 300 to 127,000 in the population. We have five branches on Highway 65 from Trenton to Buffalo. How did you get started in the banking business? I actually have a very non-traditional path to getting into the banking world. I was a Missouri State Trooper for almost six years before I came to BTC in 2019. One day, one of our board members, who is a local CPA, reached out to me and wanted to meet. I thought he was going to tell me about someone who was driving carelessly in the area. When I got to his office, he asked me if I had ever thought of a career change. At the time, I was engaged to my now wife, and I was looking for something with different hours and an easier lifestyle. He said he was currently serving on the bank board, and they were looking for someone local in the bank to be a familiar face to our customers. I told him I didn’t know the first thing about banking. He said, “They taught you how to be a highway patrolman; we’ll teach you how to be a banker.” When they offered me the job, our CEO, Doug Fish, asked if I would be willing to do the security for the bank as well as my loan officer duties, and I agreed. Nearly five years later, it was the best professional choice I have ever made. What is the most important thing you have learned from this career so far? When people are working with me, whether that’s on the security or loan side of things, the interaction we have is probably the most important thing they do during that day. It’s important to treat everyone with the same professionalism, regardless if it’s a teenager looking for their first loan to buy a car or a commercial property owner buying apartment complexes. The interaction they have with me not only represents me personally but the entire organization. And on the security side of things, when someone loses their money, they are distraught. It is my job to do my best to assist them in any way, from filling out reports to helping them prevent that from happening again. What prompted you to want to begin a career in banking? Growing up, my best friend’s dad was a loan officer here in Albany at BTC Bank. He never missed one of her events growing up and was always there for her. That really made the decision easy when it came to changing careers. Quentin McConkey Security & Loan Officer, BTC Bank 22 | The Show-Me Banker Magazine
What is the most interesting thing you have learned from this transition to the banking industry? Growing up and still living on a century farm outside of Albany, I have always been around agriculture. Since I have been with BTC, I have learned so much about the financial aspects of operating a farm. That is something that not only helps me professionally as a loan officer but personally, assuring the family farm is in good condition when I pass it down to the next generation. Tell us about the bank’s community investment efforts. We offer so many different things, from our employees being involved in outside organizations to a nonprofit internal organization, the Area Youth Benefit Corporation. Last year, with our mascot debit card donations, we gave out over $72,000 to schools in our region. Our tagline is “Community Minded,” and I believe we show that more by our actions than just our slogan. What is the bank’s biggest challenge in the area of internet banking/mobile banking? FRAUD. It is something every bank is facing today. I don’t believe there is an end in sight with it. If you look at the bank robbery statistics the FBI releases annually, bank robberies are on a steep decline. I attribute that to the increase in fraud. With older customers having to adapt to online banking, that puts them at risk. We do “Elderly Fraud” presentations and try to educate all, not just BTC Bank customers on the dangers of it. What’s your favorite thing about your bank or banking in general? BTC Bank is truly a “family first” company. If there is an issue with a family member, they do not hesitate to let you tend to that. That aligns with my priorities and many of our employees. If you didn’t have a career in banking, what other career would you choose? I would like to give an unrealistic answer here, like “hockey player, football player, etc.,” but God did not bless me with those talents so I would say sports broadcaster. I love all kinds of sports and always have. Particularly Iowa State, St. Louis Blues and Cardinals. Being able to be paid to go to the events and talk about them would be a dream. The Show-Me Banker Magazine | 23
Recession Proofing How To Benefit From a Lull in the Economy By Jim Reber, President and CEO, ICBA Securities Tell me if you’ve heard this: An inverted yield curve is highly correlated with a subsequent recession. And might I point out that the U. S. treasury curve has been upside down pushing two years now? Since we’re playing master of the obvious, let’s mention that the Fed — while not quite ready to start cutting rates — seems satisfied it’s laid the groundwork for inflation to get back in the 2% box that has proven elusive for several years. The press release following the Jan. 31, 2024, FOMC meeting stated, “The risks to achieving its employment and inflation goals are moving into better balance.” To be sure, the economy still seems to be chugging along quite nicely, thank you. As of this writing, there are “three” handles on several of the more critical economic barometers, which is a pretty good trick to pull off for an economy supposedly being dragged down by a restrictive monetary policy. Fourth quarter gross domestic product has run around 3.2%, the aforementioned inflation (the Fed’s preferred index is “Core PCE”) is sticky at 3.9% and unemployment boasts an impressively low 3.7%. This is not the stuff of an economy that’s about to run off a cliff (probably). On the Other Hand Of course, we’ve been getting a steady diet of not-so-positive news, too. The U.S. went blowing through the $1 trillion level in credit card debt in December 2023 and continues to pile onto that record. Delinquencies on consumer borrowings, particularly with the younger-aged cohorts, have been running hot as rates are at a generational high. And the mortgage finance industry is a story unto itself. We must go back to the start of the 21st century to see refinance activity this low, and even further to 1995 to see fewer purchase applications. That’s what 7% market rates will do to a borrower base whose average current mortgage is still well below 4%. That differential is the highest in history. Where this leaves us: If community bankers were so inclined, they could find options for their bond portfolios that would look pretty good if rates were to begin trending down. The good folks at Stifel have pointed out that there can be a number of months and even quarters after the final rate hike before the first cut occurs. “Higher for longer” may be in play for 2024, and we’ve seen this movie before. Remember: The last hike was last July. Plenty To Choose From Buyers can pick just how much recession-proofing they want to build into their balance sheets. Thanks to the inverted curve, something with a four- to five-year average life will look attractive compared to longer options. And since community banks’ interest rate risk positions have returned to nearbalanced postures, most depositories can buy some fixed-rate items without aggravating their asset/liability exposures. One of the simplest options is a deep discount callable agency. These were issued in 2020 or 2021 as rates were buried near zero. The bonds themselves can have minuscule coupons (1% or even less) and prices in the low 90s. Usually, their yields to maturity will beat non-callable “bullets” by 10-12 basis points (.10%-.12%), with an enormous upside if they ever get called, which is less than likely. In the mortgage-backed securities (MBS) space, attractive offerings are plentiful. One generic example: Seasoned 20-year pools with 2.0% coupons have been available around 89 cents on the dollar and will have 24 | The Show-Me Banker Magazine
around 30 basis points more yield than the discount callable mentioned above. As mentioned in this space before, there is now an unusually wide range of coupons and prices in the secondary market, so investors can pick and choose their favorite risk/reward profile. Delayed Response As the comments from the Fed members so far in 2024 have pushed back the expectations of actual rate cuts into the future, so have market rates risen modestly this year. At the time of this writing, the treasury curve has added around 40 basis points (.40%) across the maturity spectrum. What this means for buyers is that there is still additional incentive to layer in some purchases into what seems to be the waning periods before a secular shift in the economic cycle. Unless, of course, the strength of the American consumer keeps producing “three” handles in triplicate. In this case, the long-anticipated recession would be on indefinite hiatus, and significant rate cuts a conversation for future periods. And that is something you perhaps haven’t heard before. Jim Reber (jreber@icbasecurities.com) is president and CEO of ICBA Securities, ICBA’s institutional, fixed-income broker-dealer for community banks. Your business is your biggest investment. So why not give yourself the best chance to succeed? Everyone loves a good deal. But saving money on cheaper IT solutions can actually cost you more. How? Frequent downtimes. Unexpected expenses. Zero customer trust. The good news: it doesn’t have to be this way. Don’t let low-cost IT services equal lost revenue. Scan the QR code now to discover the secrets cheaper IT providers are hiding and how you can avoid falling into their trap. SEE BENEATH THE SURFACE. $ Everyone loves a good deal. But saving money on cheaper IT solutions can actually cost you more. How? Frequent downtimes. Unexpected expenses. Zero customer trust. The good news: it doesn’t have to be this way. Don’t let low-cost IT services equal lost revenue. Scan the QR code now to discover the secrets cheaper IT providers are hiding and how you can keep your company smooth sailing. The TRUTH behind IT “savings” The Show-Me Banker Magazine | 25
2024 MIBA PAC Honor Roll March 1, 2024 Contributors to the MIBA Political Action Committee are recognized for their generosity on the Association’s website and at the MIBA Annual Convention and Exhibition. Different levels of contribution have been set to recognize supporters of our Political Action Committee fund and to make the Association’s membership more aware of this important facet of our work on behalf of the political agenda of community banks across Missouri. NOTE: PERSONAL or CORPORATE CAMPAIGN CONTRIBUTIONS TO ANY PAC ARE NOT DEDUCTIBLE IN ANY AMOUNT FOR FEDERAL TAX PURPOSES. PRESIDENT’S FAIR SHARE LEVEL $10 per Million in Deposits up to 250M Cap • Bank of Advance • Bank of Iberia • Bank of Salem • Belgrade State Bank • Blue Ridge Bank and Trust Co., Independence • Community Bank of Raymore • Citizens Bank, New Haven • Exchange Bank of Missouri, Fayette • farmbank, Green City • Jonesburg State Bank • Metz Banking Company, Nevada • Midwest Independent BankersBank, Jefferson City • Midwest Regional Bank, Clayton • New Frontier Bank, St. Charles • Peoples Bank & Trust Co., Troy • Peoples Bank of Altenburg • Peoples Bank of Wyaconda, Kahoka • The Missouri Bank, Warrenton • Town & Country Bank, Salem PLATINUM LEVEL $750 and up • Sherwood Community Bank, Creighton • United State Bank, Lewistown GOLD LEVEL $400-$749 • Community Point Bank, Russellville SILVER LEVEL $200-$399 • Bank of Crocker • Chillicothe State Bank • Silex Banking Company • State Bank of Missouri, Concordia 26 | The Show-Me Banker Magazine
Bank Compensation Consulting (972) 781-2020 bcc-usa.com Bankers Security Inc. (816) 358-0883 bankerssecurity.com Community Banker Visa (800) 675-6284 www.miba.net/communitybanker-visa.html First Bankers’ Banc Securities Inc. (314) 835-4908 firstbankersbanc.com Flat Branch Mortgage Services (314) 808.3918 flatbranchhomeloans.com forbinfi (319) 274-8492 www.forbinfi.com ICBA (202) 659-8111 www.icba.org ICBA Securities (901) 762-5510 www.icba.org/icba-securities JMARK Business Solutions Inc. (417) 863-1700 www.jmark.com KASASA (512) 418-9590 www.kasasa.com Midwest Independent BankersBank (573) 636-9555 mibanc.com QwickRate (800) 285-8626 www.qwickrate.com/qrweb/ XSP/home/home.xsp SHAZAM (972) 765-2759 www.shazam.net TIG Advisors (573) 875-4800 tigadvisors.com NEWS FROM YOU 2024 Promotions at Community Bank of Raymore Chairman/CEO Bill McDaniel and President Jack Hopkins, along with the entire staff, are pleased to announce the promotions of four bank associates: Sherie Flowers has been promoted to vice president. Sherie leads the Loan Operations Department and has been with the bank since 2009. Jessica Williams has been promoted to vice president. Jessica has been with Community Bank of Raymore for 18 years and is the branch manager. Brandi Torres has been promoted to vice president. Brandi began her career with the bank in 2010 and is the branch manager for the Harrisonville location. Miranda Robinson has been promoted to vice president. Miranda has been with Community Bank of Raymore for 18 years and is the bank secrecy officer. Congratulations to all on this well-deserved recognition! Endorsed Vendors MIBA The Show-Me Banker Magazine | 27
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