2024 ISSUE 3 Cybersecurity in Banking Protecting Customer Data in the Digital Age
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 Strategies for Success 6. FLOURISH Leading Amid Change 7. FROM THE TOP Stepping Up To Lead in Today’s Environment 8. A View From the Capitol 9. ICBA Capitol Summit 10. 2024 Directors & Officers Seminar 12. MEET YOUR MISSOURI BANKER Kyle Sachs Loan Officer, Bank of Old Monroe 14. 2024 Leadership Division Day at the Capitol 16. LEGAL EAGLE SPOTLIGHT Cybersecurity in Banking Protecting Customer Data in the Digital Age 18. MIBA Lobbying Report 18. MIBA Upcoming Events 19. MIBA Convention Expo 21. 2024 Scholarship Winners 22. A BACKGROUND ON Kirk Penner of The Seymour Bank 24. Play Ball! National Pastime Gives Us Some Portfolio Management Guidance 26. 2024 MIBA PAC Honor Roll 28. 34th Annual Scholarship Auction 29. Welcome New Associate Members 29. Welcome New Bank Member 30. News From You 31. MIBA Endorsed Vendors 32. MIBA Associate Members 34. Upcoming Webinar Schedule MADE IN THE USA 9 10 22 24 The Show-Me Banker Magazine | 3
Mark Laune MIBA President Peoples Savings Bank Hermann, MO PRESIDENT’S MESSAGE Strategies for Success In today’s fast-paced banking landscape, effective marketing and strategic business development are essential for success. Here are some key insights and strategies to help our community banks thrive: • Personalized Customer Engagement: One of the hallmarks of community banks is the personalized approach we have to customer service. We foster meaningful relationships with our customers, which is an advantage over many of the big banks. When we have projects or marketing campaigns, we implement these with our community’s values and needs first in mind. We are involved in local events, charitable fundraisers and community development activities. That is at the heart of all community banks. • Strategic Partnerships: We collaborate with local businesses, organizations and community leaders to expand our reach and impact. By establishing these strategic partnerships, we can open doors to new customer segments and opportunities for growth both in the bank and in our communities. Things we can do include co-hosting events, cross-promoting products and services, and participating in community initiatives. • Educational Marketing: Position our community banks as a trusted resource by providing educational content that addresses common financial concerns and empowers customers to make informed decisions. Many community banks’ social media sites have informative blog posts, educational videos or webinars on topics such as budgeting, saving for retirement or navigating the mortgage loan process. • Digital Transformation: Times have changed, and embracing the digital age by integrating technology into your marketing and business development strategies has gained momentum. User-friendly websites and mobile apps will help enhance the customer experience and accessibility. Leveraging social media platforms to engage with our communities and share valuable insights will help promote your community bank. • Community Involvement: This is by far what distinguishes a local community bank from the large banks. We actively participate in community events, sponsorships and charitable initiatives. Demonstrating our commitment to community involvement not only strengthens our banks’ reputations but also fosters a sense of trust and loyalty among our customers and stakeholders. By incorporating these strategies into your marketing and business development efforts, your community bank can cultivate lasting relationships, drive growth and become a trusted financial partner in the communities we serve. 4 | The Show-Me Banker Magazine
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Rebeca Romero Rainey ICBA President and CEO @romerorainey FLOURISH Leading Amid Change The mere mention of change can send pulses racing and blood pressure rising. But while change can be hard, it’s unavoidable, and it’s only going to continue to accelerate in our evolving marketplace. To address it, we have rooted ourselves in strategy, which ensures that each time we consider a new product, policy or procedure, we explore the reason behind it. Why do we need this change? Why is this shift necessary? Consistently reminding ourselves of why we are transforming helps us remain successful in navigating the next steps. That constant focus on the reasoning behind the action ensures we continue on the right path. As leaders, we must be ever confident in that journey. Whether we are deploying a new digital solution, introducing process efficiencies that shift staff dynamics, realigning departments within our banks or considering a host of other possible developments, we must start with a clear focus on customer and employee impact to drive next steps and convey certainty in our decisions. In addition, we must lead with full transparency. We need our teams and customers to trust this new direction but, even more, to trust us as leaders to guide it. By sharing what we know to be true, we build faith in our leadership. We will bring our teams and customers along with us, supporting them not just in the theory of change but in navigating the logistics of that shift. Lessons in change management reiterate that to be successful, leaders must work beyond the change itself, addressing the emotions associated with it. To some community bank customers and employees, change may feel insurmountable — something to be avoided, as opposed to embraced — and we need to keep that perspective in mind as we take steps toward the future of our banks. So, in a landscape where change is the norm, rest assured that ICBA remains a steadfast partner in helping you formulate your next steps. We’re here to help, whether it’s through our advocacy efforts in supporting smart, effective change, our trainings that help your teams expand their knowledge, or our innovation efforts that identify new potential partners and solutions. Your peers can also be a tremendous resource, and we encourage you to connect with one another in our online ICBA Community. By working together, we can normalize change, ensuring that as we collectively grow, evolve and adapt as community banks, we continue to flourish. Because, when done right, the only four-letter word that change evokes is “lead,” and leaders we will continue to be. Where I’ll Be This Month I’ll be attending ICBA Services Network board meetings and speaking at the Tennessee Bankers Association Annual Meeting. 6 | The Show-Me Banker Magazine
Lucas White ICBA Chairman President of The Fountain Trust Company FROM THE TOP Stepping Up To Lead in Today’s Environment My Top 3 Leaders I’d like to meet: 1. Socrates: I was a philosophy major in college. 2. Lorenzo de’ Medici: He was a banking and Renaissance visionary. 3. Abraham Lincoln: It would be good to have his perspective on today’s landscape. Throughout his banking career, my dad had a standard saying that became a regular refrain: “If you need a quick answer, it’s no.” Even though he worked to get to a “yes” more often than a “no,” his point was that if you don’t have time to thoughtfully consider options, then the project doesn’t need to move forward. It strikes me that this serves as excellent advice today. With so much competing for our attention, banking has become increasingly fast-paced. From the heightened speed of the digital environment to the immediacy expected by our customers, there’s a sense of urgency around every decision. But to be good leaders, we have to hit pause. We can’t just react to the world around us. Instead, we must consider all angles of a scenario. For instance, I learned early on that when someone says, “We have a major problem,” there’s another side to the story. As a leader, you can’t rush to judgment; you have to investigate and address the issue from a broader vantage point — and that applies to everything, from technology decisions and staffing to loan approvals and beyond. Slowing down and considering a challenge or opportunity from multiple angles will benefit you and give you a broader outlook. That bigger picture is part of our calling. As community bankers, we’re set up to lead — not just in our communities but in the larger financial services industry. Being a leader for community banking means you care about the industry beyond just your shareholders, your bank and your job. You care about all community banks. That sense of union has driven our advocacy efforts, which have emerged as a central requirement of today’s community bank leader, because they are critical to maintaining our business model. With increasing pressure from regulators, legislators and industry, if we don’t advocate for ourselves, we will be lost. That’s where ICBA steps in to support us, ensuring we have the knowledge we need to be successful and the connected voices to make an impact for the whole community banking industry. So, as you read this month’s issue and evaluate your leadership style, consider how you can get involved in championing our industry. Community banking is more than just a job; it is a way of life. When we step up, we are advocating not for what we have today but for what it will transform into, and ways to preserve the industry for the future. And in that essential work, we can’t take no for an answer. The Show-Me Banker Magazine | 7
Throughout our district, entrepreneurship serves as an economic engine, provides jobs and generates income within the local area. In regions where larger corporations may not have a presence, small businesses often fill the void, offering employment opportunities to residents who may otherwise struggle to find work locally. This not only helps to reduce unemployment rates but also strengthens the local economy by circulating money within the community. Small businesses contribute to the unique character and identity within our Mainstreets, reflecting the cultural heritage and values of the community and offering products tailored to local needs and preferences. Businesses foster a sense of community pride and connection as their neighbors support establishments that they know and trust. Being that small businesses are the lifeline for many, the fear of the government stepping in and shutting them down is the worst thing imaginable. We saw the grave impact widespread shutdowns had on communities in 2020, so it’s hard to imagine a situation where this would happen unless it was truly necessary. But let’s rewind to Operation Choke Point in 2018. Bureaucrats from different government agencies decided to cut off certain legal businesses that were doing legal business, like antique shops and car dealers, from the banking system. It was shockingly easy for them to do this within the rules of U.S. regulations. The Federal Deposit Insurance Corporation (FDIC) officials just had to tell the banks they supervised that the government saw some of their customers as “high risk.” This alone was enough to intimidate the banks to close these customers’ accounts. Banks really don’t want any trouble with the government, so they did what they were told, even though it meant losing customers. What’s scary about all this is that it shows how much power federal regulators have and how they abuse it by going after law-abiding citizens. The FDIC has a long history of a lack of accountability; in recent weeks, they have made the news yet again but for a different reason. The revelations surrounding the FDIC’s toxic work environment released in the Cleary Report highlight systemic failures in oversight and lack of leadership that extend beyond its walls, impacting the broader banking sector. This lack of accountability poses significant challenges for banks, regardless of size, as they grapple with heightened scrutiny and uncertainty regarding regulatory practices. Without clear commitments to accountability and transparency from regulatory authorities, banks face increased regulatory risks and reputational damage. In the aftermath of the report damaging the FDIC’s workplace culture, the lack of accountability within regulatory agencies has become a pressing concern that calls for immediate intervention and a change in leadership. Congressman Blaine Luetkemeyer Missouri’s 3rd Congressional District A VIEW FROM THE CAPITOL 8 | The Show-Me Banker Magazine
APRIL 28-MAY 1, 2024 WASHINGTON, D.C. ICBA Capitol Summit The Show-Me Banker Magazine | 9
2024 Directors & Officers Seminar LAKE OF THE OZARKS, MISSOURI 10 | The Show-Me Banker Magazine
THANK YOU TO THE SEMINAR SPONSORS! The Show-Me Banker Magazine | 11
MEET YOUR MISSOURI BANKER Kyle Sachs Loan Officer, Bank of Old Monroe Where are your main bank and branches located? What is the market like? Our headquarters are located in Old Monroe, Missouri. We also have four other branches located in Troy, Moscow Mills, Wentzville and O’Fallon. Our market is very diverse and competitive. On the consumer side, we serve customers looking to purchase land or those who are building their forever home. On the commercial side, we serve individuals purchasing rental properties, commercial property, operating equipment, retail buildings, land development and mixed-use loans. What is something unique about your bank? Bank of Old Monroe is unique because of the culture we were founded on and because we continue to evolve in our customer base and services. Many customers make it a point to come into the bank weekly to get help with their banking needs, but also to check in and talk with the employees about different things going on. It is special that customers enjoy visiting and catching up with some of the employees they know. Those personal relationships are what set us apart, and I think that says a lot about being a small-town community bank. How did you get started in the banking business? I got started in the banking business upon graduation in 2020. I was born and raised in the Bank of Old Monroe community and knew it may be something I would like to do. I got to see first-hand all the things the bank does to give back to the community and knew it was something I would like to be a part of. In 2020, the banking business was thriving, especially in the mortgage department. I got an opportunity to join that team, and I haven’t looked back since. What is the most important thing you have learned from this career so far? The most important thing I have learned thus far is the importance of servanthood. Taking time to go out in the community, meet customers and show we are willing to serve them anywhere and anytime. That goes a long way. I think one other important thing I have learned in my career so far is the importance of trust. People want someone they can trust when looking for financial assistance as they make significant decisions that impact their livelihood. I think building those relationships and having trust on both ends goes a long way in having a successful career in banking. What prompted you to want to begin a career in banking? One thing that prompted me to begin a career in banking is wanting to give back to the community that I grew up in. Being a part of a community bank like the Bank of Old Monroe is a great way to do that. Before I joined the bank, I always got to see all the things that the bank was doing to give back, and I knew that was something that I would like to be a part of. What is the most interesting thing you have learned from this transition to the banking industry? The most interesting thing that I have learned since transitioning to the banking industry is all the opportunities that exist. When you look around and see cities and towns continue to grow and expand, there will always be a need for banking. As a younger banker and someone who is just starting to get familiar with the market, that is exciting! 12 | The Show-Me Banker Magazine
Tell us about the bank’s community investment efforts. The bank is continuously staying involved in the community and is always willing to invest in the different organizations in the area. For example, this past January, we had our annual trivia night. We raised $20,000 for two different organizations, the Lincoln County Roadrunners and The December 5th Fund. The Lincoln County Roadrunners is an organization that allows kids with special needs to compete in various sports and gives them the opportunity to travel around the states. The December 5th Fund helps families who are battling the struggles of cancer by planning a day of fun for them. While the family is out for the day, the volunteers go to their house and clean for them. Both organizations are different but have the same message, which is to serve others. This is a small portion of what the bank does each year to give back. What is the bank’s biggest challenge in the area of internet banking/mobile banking? The bank’s biggest challenge in internet and mobile banking is fraud. Educating our customers on good safety practices when utilizing our online banking services and mobile banking app is a priority for the bank. As we continue to grow and adapt to all the new forms of technology available, it will be critical to continue to protect our customers’ information. What’s your favorite thing about your bank or banking in general? My favorite thing about our bank is the people that I work with. They are like a second family. Sometimes, coming to work doesn’t feel like work because of all the great people who work at our bank. I would say my favorite thing about banking, in general, is helping new and current customers reach their financial goals. As the years go on, it will be fun to watch customers’ businesses grow or reach their financial goals. Whether that is buying their first home or piece of land, it will be rewarding to help them get there and be a part of that journey. If you didn’t have a career in banking, what other career would you choose? I think if I did not have a career in banking, I would have most likely chosen a career in sales. Sales is like banking, as far as going out and meeting new customers, developing relationships and getting them to buy into the brand you are trying to sell. I also enjoy golfing, and many good networking opportunities can start on the golf course. Whether your work is sponsoring a tournament or taking a few clients out to play, golf is something that I excel in and enjoy. The Show-Me Banker Magazine | 13
2024 Leadership Division Day at the Capitol JEFFERSON CITY, MISSOURI 14 | The Show-Me Banker Magazine
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 | 15
Cybersecurity is hard. The odds are against you from the beginning, requiring the defenders to get everything right 100% of the time and the attackers needing only one lucky shot. Cybersecurity in banking is even harder. Cybercrime is a business, and cybercriminals are usually motivated by money. This brings us back to notorious bank robber Willie Sutton who, when asked why he robbed banks, simply replied, “Because that’s where the money is.” The criminals will try to steal money directly and through fraud. They will try to extort money by encrypting critical parts of your network, holding it hostage, stealing sensitive data — such as employee or customer data — and threatening to publish and sell the data if you do not pay a ransom. Smaller and mid-size banks are as much of a target as any because the criminals know they usually have fewer resources for cyber defense. Even worse, cybersecurity is not a static problem that can be fixed, like a technical glitch such as Y2K; instead, it is more like warfare where an active adversary is continuously attacking and every time you implement new defenses, they counter by adapting, changing tactics and finding another way to circumvent those defenses. This means there is no such thing as being completely secure — ever. Even really good security is not permanent because what is effective today will likely not be effective in a month, six months or a year from now. I apologize that this is not a pleasant “feel good” message, but it is the reality, and the only way we can fulfill our responsibilities to our customers, employees and organizations is by having a realistic understanding of the challenges we face because there are many things that can be done to become much harder and resilient targets. In my role as breach counsel, I have advised on thousands of cyber incidents and hundreds of ransomware attacks over my career. Being in that detached role, seeing the overall process from a strategic vantage point, that perspective has shown me several things that organizations could have done differently to have avoided those situations. These observations are not a regurgitation of a standard “Top 10” list of security controls and, because those are readily available, will try to avoid those typically included. Nor are they intended to replace or minimize the importance of those controls or other technical processes and tools because they are absolutely essential. On the contrary, they are intended to augment or restate those from a different perspective than sometimes comes from the more technical-focused security professionals. 1. Cybersecurity requires an ongoing and continuous process. Cybercriminals are continuously adapting and changing their tactics. The only way to defend is to have an ongoing process that is evolving and maturing with them. 2. Risk assessments are essential. All organization’s risks are unique and depend on a multitude of different factors. Because you cannot protect against what you do not know, you must have an understanding of your unique risks, not only from a technical standpoint but also from an overall organizational risk perspective. This risk assessment is essential for prioritizing mitigation efforts. 3. Data governance is critical. Your objective includes protecting customer data. This means you must know what customer data you have, not collect or maintain more than is needed, and when you no longer need it, securely archive or dispose of it. Data equals risk. If you want to reduce that risk, reduce the data you have available to criminals. The same principles apply to employee data and other forms of sensitive data. Cybersecurity in Banking Protecting Customer Data in the Digital Age By Shawn Tuma, Partner, Spencer Fane LLP LEGAL EAGLE SPOTLIGHT 16 | The Show-Me Banker Magazine
4. Cybersecurity, and especially compliance, is a legal issue that requires a thorough understanding of the laws and regulations that are applicable to your organization. Do not forget about your contracts. Many organizations have far more “laws” governing them through their contracts than from any other source. 5. Your organizational risk assessment should include third parties you rely on for services or that have your sensitive data. As the Colonial Pipeline attack showed, a successful attack on one service provider in the energy sector shut down all organizations relying on its services. The same thing just occurred with the attack on Change Healthcare, which impacted all of the organizations relying on its services. The financial services sector is due for a similar attack. What service providers does your organization depend on, and how will you continue to operate if something were to happen to them? 6. Your organization must have a team-oriented approach to managing cyber risk, both internally and externally (with the partners you rely on or will rely on if you have an incident). Cyber risk is an overall organizational risk, not just an “IT risk,” and your team’s different perspectives are invaluable. At a minimum, your team should include members who focus on information security, information technology, legal, compliance, privacy, audit, risk, operations, human resources and communications. For smaller organizations, one person may fulfill many of those roles, and that is when having external partners with specific expertise can be very beneficial. Shawn Tuma is an attorney widely recognized in data privacy and cybersecurity law, areas in which he has practiced for over 25 years. He is co-chair of the Data Privacy & Cybersecurity practice group at Spencer Fane LLP and works with clients across the U.S. Shawn can be reached at stuma@spencerfane.com or (972) 324-0317.
MIBA Lobbying Report Andy Arnold Arnold & Associates By the time this is published, the 2024 Regular Session of the Missouri General Assembly will be over. Adjournment was on May 17 at 6:00 p.m. At this point in the session (May 5), there were two weeks left and two major issues still in the balance: the state’s $50-billion-plus budget and the FRA tax renewal. The constitution required the budget bill to be passed by 6:00 p.m. on Friday, May 10. The FRA, the health provider self-imposed tax that is used to pull down federal Medicaid dollars, was due by May 17 at 6:00 p.m. Each needed to pass or the budget was out of balance, and Medicaid as we know it in Missouri would have been non-existent. If either didn’t get done by their respective deadlines, we were looking at a special legislative session. As for banking issues, we got some good news: HB 1803, sponsored by Rep. Terry Thompson and Sen. Sandy Crawford, was passed in early April. HB 1803 is the increase in the MoBucks program cap. The current cap is $800 million. The new cap is $1.2 billion. In these last two weeks, there are several things we know for sure: 1) The Senate will be tied up working on the FRA, State Budget and Initiative Petition change legislation; 2) it is doubtful many, if any, of the 70-plus House bills passed over to the Senate will pass; and 3) the credit union expansion bill (HB 2452) sponsored by Rep. West is dead for 2024. As always, it has been a pleasure for Andrew and me to represent MIBA with the members of the Missouri legislature. We also want to thank MIBA Executive Director Matt Ruge and his staff for their guidance on issues and continued support. Their knowledge and expertise of the community banking business are invaluable in helping us determine how to position MIBA on the issues. AUGUST 3rd Quarter CBC Meeting WEB.MIBA.NET/EVENTS 22 SEPTEMBER SEPTEMBER 26-27 Essentials of Commercial Credit Analysis Part I & II Lake Ozark, MO MIBA Office - Jefferson City, MO MIBA Office - Jefferson City, MO SEPTEMBER Leadership Division at the Ballpark MIBA 47th Annual Convention & Expo 24-25 AUGUST 09 OCTOBER 09-11 15th Annual Security Conference Kansas City, MO MIBA Office - Jefferson City, MO MIBA Office - Jefferson City, MO Retail Management Workshop 9-11 18 | The Show-Me Banker Magazine
Expo Convention www.miba.net Register NOW All exhibits questions should be directed to Jessica Rogers, MIBA Exhibits Coordinator at the MIBA Office: (573) 636-2751 or jrogers@miba.net. Registration is now open to all Member & Non-member vendors. September 9-11, 2024 - There are still a few booth spaces available but they are going fast! The MIBA 47th Annual Convention & Expo will put you in front of a higher percentage of our CEOs and decision makers than many other trade shows. As an Association Member Exhibitor, remember you are also accorded one complimentary registration for the entire convention at no additional cost. If you have not received your copy, you can go online to www.miba.net, click on the Annual Convention link. The entire prospectus will be available to download and print, along with the application. Get your booth space request in ASAP as this exhibition hall always sells out!
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2024 Scholarship Winners The MIBA scholarship program continues to generate enthusiasm among MIBA member banks. It is designed to meet the financial needs of community bank employees/dependents more than to recognize scholastic achievement. We feel this award opportunity is a valuable addition to our member banks’ employees in furthering their education either in the field of banking or helping to make possible continuing education for their dependents. Region 1 Madison Lockhart Concordia Bank Tristen Dye Nodaway Valley Bank Kylie Madrid F & C Bank Isabella Wells Blue Ridge Bank & Trust Co. Region 2 Carley Pearl Bank of Monticello Evelyn Parrish United State Bank Curtis Humphreys The Callaway Bank Bridgette Doran farmbank Not Pictured Region 3 Lexie Brashers First Independent Bank Kate Bunch Adrian Bank Kayla Steward Lime Bank Luke Jenkins Bank of Billings Not Pictured Region 4 Hannah Gross Peoples Bank of Moniteau County Caitlyn Quarles Community First Banking Company Alex Masterson Bank of Washington Brook Doughty Royal Banks of Missouri The Show-Me Banker Magazine | 21
At a young age, Kirk Penner learned the value of a hard day’s work from his father, Max. Max was in the grocery business. He and his partner, Wayne Gott, invested in several supermarkets in South Central and South Eastern, Missouri, and eventually expanded into northern Arkansas and Tennessee. At the age of nine, Kirk started helping out in the local store. He worked there after school and during the summers. “I worked in every department — produce, meat, cashier — the bakery was my favorite, though; I fried lots of doughnuts,” Kirk fondly recalled. This experience taught Kirk the value of having good customer relationships. In the early 1970s, Kirk’s father and partner made the decision to start buying some smaller banks, one of which was in Seymour, Missouri. Kirk had always thought he would be in the grocery business because that is what he knew and loved. One day, Kirk told his father he wanted to stay in the grocery business. His father responded with a kind but firm, “No. I need you to learn the banking business.” Obediently, Kirk enrolled at the University of Missouri in Columbia and started learning about banking and finances. During the summers, Kirk worked at The Seymour Bank, putting his newly learned knowledge to work. It was during this time that he started bookkeeping. “I had to make sure everybody endorsed their checks by going through every single check by hand,” Kirk said. “We had a correspondent bank in Springfield we put our cash letter through. We would use Microfiche to check accounts and their balances.” Kirk got along well with people, and he soon became a teller with the additional responsibility of running the proof machine to balance all of the daily bank transactions. June of 1981 was memorable. The bank moved to a new location to accommodate its growth and, at the same time, got its first in-house computer system. “I was charged with inputting all of the customer information into the database. It took me the entire summer to complete that,” Kirk said. Kirk graduated from business school in 1983 and started working full-time — first as a loan officer, then as an accountant, and then purchasing all of the bank’s bonds. Over time, the bank continued to grow and there were considerably more rules and regulations that it had to comply with. “I was in charge of writing all of our policies. We did what you would think of as traditional banking, and there wasn’t anything written down — so I had to create all of the policies and procedures and put them in writing.” Today, Kirk is the president of The Seymour Bank. The city of Seymour has not changed much over the years. It is a small town of around 2,300 people, and just outside of town, there is a large Amish community of approximately 4,000. Kirk enjoys being able to help his small community and the neighboring Amish by investing in its people. Banking with the Amish community brings many unique experiences. There was one time an Amiah man had his horse die in the bank’s drive-through. “That was quite an event and something I never thought I would have to deal with,” said Kirk. The bank caters to the needs of its Amish customers and has installed hitches in the parking lot so they can tie their horses up when they come in and do business in the bank. “A lot of communities have lost their community bank — the existing larger banks don’t seem to be as concerned with the local area as they are with accumulating deposits and loaning the money elsewhere. A traditional community bank isn’t doing that. The money that they loan is received from local deposits and then loaned out to local people. That money is staying here, and it’s reinvested in the community,” Kirk said. Kirk remembers a local gentleman who wanted to go into the trash business in Seymour — picking trash up from local homes and hauling it to the dump. The gentleman approached Kirk and said he needed to borrow money to buy a 1974 Chevrolet pickup truck to haul the trash. “The truck looked like the devil; it was beat up and old,” Kirk said. “That probably wasn’t a good asset to loan on. But the philosophy I have is that you can loan on some asset, however, that’s not what’s paying you back. It’s the person you’re investing in. This is a people business.” Kirk gave him the loan. The gentleman started out driving up and down the streets, picking up trash, putting it in his truck and going to the dump. Eventually, he needed a bigger truck and a trash packer. The Seymour Bank loaned him the money for that and continued making loans to him as dumpsters were needed. The gentleman grew a successful business, and it all started with a A BACKGROUND ON Kirk Penner of The Seymour Bank 22 | The Show-Me Banker Magazine
community bank that chose to invest in the person, not just an asset. In the 1990s, Kirk’s mother, Carolyn, was very involved in the YMCA in a neighboring community and really wanted to have a local one. She rallied the community, and through many small donations and a number of large donors — including one from The Seymour Bank — Seymour opened its own YMCA. The facility has exercise equipment, a large indoor swimming pool, outdoor activities and much more. “I think we’re the smallest town that YMCA has done something of this magnitude in,” said Kirk. “We believe in our community, and we give back to multiple areas.” The Seymour Bank also donated $50,000 in seed money to build a local library. A local resident was offering a donation match program, and the bank jumped at the chance to invest back into the community. The library just celebrated 25 years of enriching and educating the community. The same can be said for the bank’s investment in a downtown project. When the Seymour Area Arts Council decided to renovate and reopen the historic Owen Theatre on the city square, it was The Seymour Bank that donated the first $20,000 to get the endeavor under way. Today, the Owen Theatre, built in 1941, is a landmark building in Seymour that plays host to more than 5,000 people. Giving back to the community in so many ways is possible because of the strength of The Seymour Bank, and membership in MIBA helps the bank stay strong. “We have been a member for as long as I can remember. The benefits MIBA provides are invaluable. There are a lot of really good education opportunities for our employees and staff that run the gamut. In our business, you’ve got to continue education at all times because rules and regulations are constantly changing,” Kirk continued. “In my opinion, education is the top benefit followed closely by the united voice that MIBA brings to the legislature in Missouri and at to the to the federal level.” When Kirk isn’t working, he is giving back to the community in a very special way. He is a Shriner and has played trombone in the Temple Band for the past 25 years. “We play every year in the memorial ceremony at the Springfield at the National Cemetery. We have also played for numerous Honor Flights.” Kirk explained, “Honor Flights are when veterans are escorted to Washington, D.C., free of charge, and visit the war monuments. When they come back, their friends and family gather prior to their arrival, and as they come off the plane, everybody cheers for them while the Temple Band plays their service tunes — Army, Navy, Air Force, Marines and the Coast Guard. It’s been a really good experience for me. I love doing it!” Kirk and his wife, Terry, have been married for 33 years and have two daughters. Tammy recently retired from the City of Seymour as their business development director. While she was working there, she helped create a video highlighting the community of Seymour that was entered into the Missouri Small Town Showcase. The video won, and Seymour was featured in the annual Missouri Humanities “Featured Five.” To watch the video and learn more about this unique and fascinating small town, scan the QR code. https://www.facebook.com/ mohumanities/ videos/283339334231661 The Show-Me Banker Magazine | 23
As we’re getting into the warmer months, it’s reassuring that baseball season is well underway. Your correspondent confesses a deep and abiding passion for the sport. While I’ve been only partially successful in getting my wife engaged in watching live baseball, she has gamely accompanied me to over two dozen major league stadiums. Nothing says “springtime” to me quite like the crack of a wooden bat on horsehide and the roar of a crowd. Might I add a beer and a hot dog? It occurs to me that with a little thought there may be some parallels between our national pastime and community banking. Follow along as we see what lessons we might glean from the grand old game. And don’t buy what Yogi Berra asked: “Who can think and play baseball at the same time?” Bunt This strategy is something of a lost art in this era of homerun hysteria. It’s intentionally tapping a pitch very softly in front of the plate in hopes of reaching base safely before the defense can react. The ball doesn’t travel very far, but it can be very effective. For a portfolio manager in 2024, it can mean a money-market instrument that matures in less than a year. Lately, three-month t-bills out-yield everything on the treasury curve, including the 30-year bond. Double The ultimate goal of bond portfolio managers. I’ve had many astute bankers tell me that they’re not trying to maximize yield from their securities collection. They’d much rather have great liquidity and modest price volatility, and they’ll leave the riskiness to the loan portfolio. A two-base hit automatically puts the portfolio in scoring position. Relief Pitcher When the starting pitcher is beginning to tire out (which these days is more like the fifth inning versus the eighth), a quick fix can often be found by bringing in a fresh arm from the bullpen. For a community bank’s balance sheet, which suddenly has some interest rate exposure — whether due to a shock in rates, a surge in certain types of credit products or a shift in deposit makeup — a quick fix can often be found by executing an interest rate swap. A bank can efficiently increase or decrease rate sensitivity as needed on virtually any segment of the balance sheet. Umpire The Federal Reserve. The various branches and broad powers of our central bank can, in some ways, dictate the tenor and the flow of the whole financial services industry. As a regulator, it acts as the arbiter of balls and strikes, whether a batted ball is foul or fair, and whether a baserunner is safe or out. As the setter of monetary policy, it determines the ground rules that govern play. Stolen Base This is akin to a tax swap. A runner advancing one base after the pitcher begins his delivery puts the player 90 feet closer to scoring a run, assuming he beats the throw from the catcher. A tax swap is a strategy in which an investor sells a bond, any bond, at a loss and reinvests the proceeds into a tax-free muni. The loss on sale is recorded at the net-of-tax number; the earnings on the new bond are 100% tax-free. This built-in head start helps to advance your earnings closer to home plate. Even better, while “stolen” has a pejorative tone, a tax swap is totally within the rules of the game. Play Ball! National Pastime Gives Us Some Portfolio Management Guidance By Jim Reber, President and CEO, ICBA Securities 24 | The Show-Me Banker Magazine
Squeeze Play This combines several of the tactics already mentioned in this column. The batter will attempt a bunt simultaneously with a runner attempting a steal of home. If the ball is successfully put in play by the hitter, the run scores, and the hitter is credited with a run batted in. For a community bank, its corollary is a leverage transaction. An institution with adequate capital can purchase assets simultaneously with adding the related debt that results in higher earnings, an acceptable risk profile and improved return on equity. Just like baseball’s squeeze play, a lot of care must be exercised to improve the chances of this strategy having an ideal outcome. And finally … The Long Ball This is not a recommendation! The long ball, aka the home run, is the single most gamechanging play in the sport. Home runs win games, home run hitters are revered and home run kings have fat contracts. Lost in the glory is that many of the long ball hitters strike out frequently. If a community bank wants to ramp up its returns by increasing its risk, either by buying long durations, uncertain cash flows or marginal credit quality, it can expect some swings and misses. As Ernest Lawrence Thayer wrote back in 1888: “… there is no joy in Mudville — mighty Casey has struck out.” Batter up! Jim Reber (jreber@icbasecurities.com) is president and CEO of ICBA Securities, ICBA’s institutional, fixed-income broker-dealer for community banks. The Show-Me Banker Magazine | 25
2024 MIBA PAC Honor Roll June 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 • Bank of Advance • Bank of Iberia • Bank of Old Monroe • Bank of Salem • Belgrade State Bank • Blue Ridge Bank and Trust Co., Independence • BTC Bank, Bethany • Community Bank of Pleasant Hill • Community Bank of Raymore • Community State Bank of Missouri, Bowling Green • Citizens Bank, New Haven • Exchange Bank of Missouri, Fayette • Exchange Bank of Northeast Missouri, Kahoka • Farmers & Merchants Bank, St. Clair • farmbank, Green City • FCNB Bank, Steelville • First Bank of the Lake • 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 • Peoples Saving Bank, Hermann • Preferred Bank, Rothville • Regional Missouri Bank, Marceline • 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 • 1st Advantage Bank, St. Peters • Bank of Crocker • Chillicothe State Bank • Farmers State Bank, Cameron • Silex Banking Company • State Bank of Missouri, Concordia 26 | The Show-Me Banker Magazine
MIBA FINANCIAL DIRECTORIES 2024 THANK YOU Each MIBA Member receives a complimentary copy, but you NEED these resource directories throughout your bank. Order now and get your extra copies ASAP!
COME ONE, COME ALL! HAPPY HOUR & HORS D'OEUVRES FOR BANKERS & EXHIBITORS September is right around the corner where we will gather for another exciting Convention & Exhibition for our MIBA Membership, family and friends. This year's 34th annual MIBA Scholarship Auction on Tuesday, September 10th, 2024, is at The Lodge of Four Seasons Golf Resort & Spa Shiki. We hope you are thinking about what special gift you will donate. On Tuesday, the Exhibit Hall will close at 2:30 p.m. and the Happy Hour Reception and Silent/Live auction will begin at 4:30 p.m. in the Granada Ballroom. All registered bankers and exhibitors are invited and welcome to join the "Bidding Frenzy" for all items donated! If you already have your gift to donate, call the MIBA offices at (573) 6362751 or go to MIBA.net > For Members > Annual Convention & Exhibition for your donation form. Donations to and purchases at the auction are not deductible for federal income tax purposes. 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 28 | The Show-Me Banker Magazine
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