on Banking - Community Bankers Association of Illinois

O f f i c i a l P u b l i c a t i o n o f t h e C O M M UNIT Y BAN K E R S A S S O CIATI O N o f ILLIN O I S
Banknotes
September 2014
Volume 40 • Issue 4
a Fresh Perspective
on Banking
Ag Lenders’ Conference
2014
Top Six Advantages
Concentrates on
Group Meetings
of Outsourced
Today’s Farm Customer
Wrap Up
Core Processing
page 12
page 18
page 28
CBAI Board of Directors & Staff
Community Bankers Association of Illinois
Executive Committee
CBAI Executive Staff
+Chairman – Bill Wubben, Apple River State Bank
< [email protected] >
+ First Vice Chairman – Todd Grayson, South Central Bank, N.A., Chicago
< [email protected] >
+ Second Vice Chairman – Kevin Beckemeyer, Legence Bank, Eldorado
< [email protected] >
+ Bob Wingert, President
< [email protected] >
+ Jerry Cavanaugh, General Counsel
< [email protected] >
+ Levette Shade, Paralegal
< [email protected] >
+ Lisa Lippert, C.P.A., Controller
< [email protected] >
+ Jenny Dial, Senior Vice President Operations
< [email protected] >
+ Kraig Lounsberry, Senior Vice President Governmental Relations
< [email protected] >
+Megan Peck, Vice President Governmental Relations
< [email protected] >
+ David Schroeder, Vice President Federal Governmental Relations
< [email protected] >
+Tracy Z. McQuinn, Senior Vice President Education & Special Events
< [email protected] >
+Valerie Johnston, Vice President Education & Special Events
< [email protected] >
+Melinda McClelland, Vice President Education & Special Events
< [email protected] >
+ Andrea C. Cusick, Senior Vice President Communications (Banknotes Editor)
< [email protected] >
+Terry Griffin, Vice President Chicago Area
< [email protected] >
REGIONAL VICE CHAIRMEN
+Tony Sisto, STC Capital Bank, St. Charles
< [email protected] >
+ Jeff Rolczynski, American Midwest Bank, Sycamore
< [email protected] >
+Tom Marantz, Bank of Springfield
< [email protected] >
+ David Pirsein, First National Bank in Pinckneyville
< [email protected] >
+Treasurer – Gregg Roegge, Rushville State Bank
< [email protected] >
+ President – Bob Wingert, CBAI, Springfield
< [email protected] >
Group Directors
+ David Loundy, Devon Bank, Chicago
< [email protected] >
+ David Stanton, PeopleFirst Bank, Joliet
< [email protected] >
+ Dianna Torman, Prairie Community Bank, Marengo
< [email protected] >
+Cindy Martin, Lena State Bank
< [email protected] >
+ Jeff Hammes, Peoples Bank of Kankakee County, Bourbonnais
< [email protected] >
+ Doug Parrott, State Bank of Toulon
< [email protected] >
+Mike Mahair, State Street Bank and Trust Co., Quincy
< [email protected] >
+ Jeff Bonnett, Havana National Bank
< [email protected] >
+ Eric McRae, First Mid-Illinois Bank & Trust, N.A., Mattoon (Decatur)
< [email protected] >
+ Shawn Davis, CNB Bank & Trust, N.A., Carlinville
< [email protected] >
+ Sheila Burcham, Community Trust Bank, Irvington
< [email protected] >
+ Dan Graham, Flora Bank & Trust
< [email protected] >
+ John Dosier, First Southern Bank, Carbondale
< [email protected] >
CBAI Past Chairmen
+Mike Estes, Fisher National Bank
< [email protected] >
+Mary Sulser, Buena Vista National Bank of Chester
< [email protected] >
ICBA State DELEGATEs
+
+
Gerry Johnson, Grand Ridge National Bank
< [email protected] >
Preston Smith, First National Bank, Mattoon
< [email protected] >
CDD Chairman (ex officio)
+ Julie Jordal, American Midwest Bank, Sycamore
< [email protected] >
4
www.cbai.com
+
CBAI Legislative Consultant
+ David Manning
< [email protected] >
CBSC Executive Staff
+Mike Kelley, President
< [email protected] >
+Mike Duke, Vice President, Electronic Payments
< [email protected] >
+ Andy Burkett, Vice President, Member Services
< [email protected] >
+ Lesa Black, Vice President, Member Services
< [email protected] >
Headquarters
901 Community Drive, Springfield, IL 62703-5184 • 217/529.2265
800/736.2224 (IL only) + Fax for CBAI (except for Departments below):
217/529.9484 • Fax for Departments of Communications, Education, and
Special Events: 217/585.8738 • Fax for CBSC: 217/585.8735 • www.cbai.com
Hours of Operation: 8 a.m. - 5 p.m.
Fax copies of articles will not be accepted for publication in Banknotes; a
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reprinted in their entirety without prior permission, unless indicated individual
articles list copyright. Please use the author’s name/company/title, along
with the following credit line and Banknotes issue number: “Reprinted from
Banknotes, a publication of Community Bankers Association of Illinois.”
If you are interested in a subscription to or advertising in Banknotes,
contact the CBAI Department of Communications.
With the exception of official announcements, the Community Bankers
Association of Illinois and its staff disclaim responsibility for opinions expressed
and statements made in articles published in Banknotes. This publication of the
Community Bankers Association of Illinois is intended and designed to provide
accurate and authoritative information regarding the subject matter covered.
These services are provided with the understanding that the Community Bankers
Association of Illinois is not engaged in rendering specific legal, accounting, or
other professional services. If specific legal advice or other expert assistance is
required, the services of a competent, professional person should be sought.
Banknotes
September 2014
Community Bankers Association of Illinois
09
18
28
features
CBAI’s Career Development Division – A Fresh Perspective on Banking . . . . . . . . . . . . . . . . . 09
Ag Lenders’ Conference Concentrates on Today’s Farm Customer . . . . . . . . . . . . . . . . . . . . . 12
CEOs Are Being Held Accountable For Information Security . . . . . . . . . . . . . . . . . . . . . . . 15
2014 Group Meetings Wrap Up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Asset/Liability Management and Balance Sheet Dynamics . . . . . . . . . . . . . . . . . . . . . . . . . 20
Safe Deposit Boxes – Profit Center or Loss Leader? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Top Six Advantages of Outsourced Core Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Community Bankers School . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Take Charge of Your TILA-RESPA Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Advanced Compliance Institute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
departments
Legal Link . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Coming Attractions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Welcome New Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Member News . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Foundation Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Index of Advertisers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Published for
Community Bankers
Association of Illinois
901 Community Drive
Springfield, IL 62703-5184
p. 217/529-2265
p. 800/736-2224
www.cbai.com
6
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Please note: Editorial and contents of this magazine reflect the records of the Community Bankers Association of Illinois (CBAI). CBAI has done its best to
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Community Bankers Association of Illinois
CBAI’s Career
Development Division –
A Fresh Perspective on Banking
I
n 1987, CBAI formed the CBAI
School for Community Bankers
to serve as an “undergraduate”
course of study for aspiring bank
officers and directors. In 2014, the
“School” graduated its 1,000th student.
As an outgrowth of the School, the
CBAI Young Bankers Division (YBD)
was formed in 1992 to keep younger
bankers engaged, motivated, and in
touch with each other. The name of
the group was changed to the Career
Development Division (CDD) in 2002,
but its mission remains the same.
The future of community banking
depends upon a new generation
of bankers and community-bank
supporters — progressive, energetic,
community-minded, and well-informed.
The purpose of CDD is to keep
members on the cutting edge of community banking through:
Here’s a providential aspect of CDD
that has become apparent over the
years. This new generation of bankers
brings an entirely fresh perspective to
community banking and, by extension,
to CBAI. They’re excited, they’re
engaged, they’re eager to learn and to
make community banking their careers.
•Quality Educational Programs;
•Professional Publications;
•Leadership Training; and
•Networking Opportunities.
The Association has seated the current
CDD chairperson on its board of
directors, as well as the board of the
CBAI Foundation for Community
Banking. Additionally, the chair attends
the CBAI Annual Call on Washington
at no cost to the individual. The result
has been new ideas, new energy, and
engagement in the Association’s mission.
CDD members enjoy the speaker at one of the many CDD Meetings.
Banknotes
What Is CDD?
CDD is designed for career-aspiring
community bankers in Illinois and
representatives of CBAI associate
member firms. Members should be:
• progressive, energetic bankers who want to
be better both personally and professionally;
• bankers who have set their sights on
a leadership role in their banks and
communities;
+ September 2014
DID
YOU
KNOW?
Today,
36 percent
of CBAI’s
leadership in
its boards and
committees
participated in
YBD or CDD!
9
Community Bankers Association of Illinois
Manning the CDD booth, Shelley Spratt, Havana
National Bank, and Kelly Green, Herrin Security
Bank, embrace the patriotic theme of CBAI’s 34th
Annual Convention & Exposition in Springfield.
• bankers who are committed to preserving
and enhancing community banking and its
philosophy; and
• representatives of CBAI associate member
firms who want to improve their professional
skills and network with future bank leaders.
FUN
FACT!
CDD is a
co-sponsor
of a two-year
scholarship to
the Community
Bankers School,
awarded annually.
Why Join CDD?
The People — Contacts you develop
through CDD are an invaluable
resource of ideas and information.
When facing a challenge or a new
banking issue, you have a network of
individuals to draw upon for solutions.
Discounts — CDD members receive a
10-percent discount on all CBAI one-day
seminars and CBAI’s Annual Convention.
Phil Aderton, iZALE Financial Group and
Sundai Hawbaker, Farmers State Bank of Sublette
Leadership
Training
— Take
an active role in moving up the
management ladder. CDD is governed
by a 13-member board of directors.
Information — CDD members
receive Banknotes, CBAI’s bi-monthly
magazine, which includes political
issues, laws, regulations, and CBAI
activities, as well as products and
services available through CBSC. Each
issue contains an article on CDD
activities. Also, CDD members receive
a bi-monthly electronic newsletter,
Eagle Express. In addition, CDD
information is posted at www.cbai.com.
Activities — CDD hosts a Fall Meeting
and an Annual Spring Conference.
Economic Education Program —
CDD members can become involved in
their communities and local schools by
using the lesson plans, “Making Smart
Credit Choices.” Also, CDD members
receive a resource document which
lists pamphlets, videos, and lesson
plans that can be ordered. Finally,
each CDD member receives a copy of
the “Careers in Community Banking”
pamphlet to use at local career fairs.
Recognition — CDD members select
a “Career Banker of the Year.” Criteria
for selection include CDD and CBAI
involvement and personal achievement.
CDD members receive recognition for
educating their communities on economic
issues and one CDD member receives the
“Economic Educator of the Year” award. n
Here is what past and present YBD/CDD members had to say.
Leadership Training:
“YBD, now CDD, prepared me for further leadership roles at my bank by giving me the
confidence that I could do the job, speak in front of staff and meetings, and organize the
bank functions in a similar fashion as a CDD conference. Most of us dream of leading
our banks in the future and I’ve been very lucky to have been given the opportunity and
CDD really helped me with that transformation. I now have transitioned to the leadership
of CBAI main board now and would have not been possible had I not been involved with
CDD and gotten to work and know the staff at CBAI previously.“
Doug Parrott, State Bank of Toulon
Former YBD chairman and YBD Banker of the Year
CBAI Group 6 Director
10
www.cbai.com
+
“I also enjoyed the reunion of past CDD chairman and the input of CDD members who
are now in charge of their banks as CEO or President. One of the panel members
remembered how he was able to be promoted and it was ironic because it was
similar to my story. CDD gave us the incentive and the motivation to approach our
board or directors and ask for it. We identified a need that truly needed to be filled
and I was willing to accept the responsibility. I don’t think I would have done that
without the motivation from the CDD conference I attended.”
Kelly Green, Herrin Security Bank
Former CDD Chairman and CDD Banker of the Year
Banknotes
Community Bankers Association of Illinois
CDD members in their exhibit booth at CBAI’s 38th Annual
Convention & Exposition in St. Louis: Ryan Beckemeyer, Legence
Bank, Eldorado; Kim McKee, North Central Bank, Hennepin (Ladd);
Karrie Herzog, Shelby County State Bank, Shelbyville; Haley Guisti,
North Central Bank, Hennepin; Neal Beer, Illini State Bank, Oglesby;
Joe Conroy, First Farmers State Bank, Minier.
DID
YOU
KNOW?
Mike Renner, Bank of Yates City,
and Kim McKee, North Central Bank,
Hennepin (Ladd), participate in a
CDD meeting group activity.
CDD has
donated nearly
$90,000 to
Community
BancPac
since 1992.
2013 CDD Banker of the Year, Dax Garrison (holding award), with current or past CDD members
Greg Cavitt, Tina Dodson, and Sheila and Matt Burcham, Community Trust Bank, Irvington.
For more information or to register For the year
at a special rate of $95, please contact Melinda at the CBAI office at
217/529-2265 or via email at [email protected]
CDD is on Facebook. Become a fan!
Education:
“I believe that the meetings provide a very high level of education to the attendees
and the format allows attendees to touch on several subjects. The fact that the
board is comprised of people from each banking facet allows different perspectives
to arrive at timely topics and provide an array of education options.”
Dax Garrison, Community Trust Bank, Irvington
Former CDD Chairman and CDD Banker of the Year
“Many of the topics that are mentioned apply in the real world. These are generally
hot topics of interest and apply to most of the functions within the bank. It didn’t
matter if someone was in operations, behind the front-line or in the lending
department. CBAI/CDD did their homework to provide the learning components that
were on target and up to date.”
Andrew Black, Princeville State Bank
CBSC Board Member, Former CDD Banker of the Year
Banknotes
BE A GAME-CHANGER!
CDD’s 2014 Fall Meeting
October 20-21
I-Hotel, Champaign
Networking:
“I have used the networking aspects of CDD by contacting my fellow CDD members
when I have bank-related issues. During a recent regulatory bank exam, examiners
asked that our bank comply with a specific loan issue. I contacted several of my
fellow CDD members to ask how they are complying with the regulatory request. My
friends were willing to provide me with the information used by their banks; I took the
information I had obtained and developed an answer that satisfied the examiners.“
Jennifer Beard, Farmers State Bank of Elmwood
Former CDD Banker of the Year and Economic Educator of the Year
“I have used the networking aspects of CDD to introduce myself and our firm to the
‘up and comers’ of community banking. Developing that personal connection with
future banking leaders is an important aspect for our firm in developing long-term
business relationships.”
Phil Aderton, iZale Financial Group
CDD Member
+ September 2014
11
Community Bankers Association of Illinois
Dr. Freddie Barnard engages the audience during his
discussion on lending to today’s commercial farmer.
J.T. Thoenen, Rushville State Bank, visits with Mark Rickels,
Farmer Mac, during one of the exhibiting sessions.
John Phipps gives an upbeat and passionate presentation
on the future of farming and community banking.
Ag Lenders’ Conference
Concentrates on Today’s Farm Customer
C
BAI’s annual Ag Lenders’ Conference, held
at the Crowne Plaza in Springfield on June
28, offered participants the skills and tools to
better understand the issues affecting the banks’
farm and agribusiness customers and to meet their credit
needs. Attracting 77 lenders from 44 banks, the conference
showcased expert speakers and hot topics, as well as a
mini-exposition featuring firms with the latest products and
services for community bank ag lenders.
Topics covered during this one-day conference included a
look at a variety of issues facing agricultural lenders including
the sessions, “What Could Possibly Go Right? Agriculture’s
Over-Looked Upside” with John Phipps, host of the US Farm
Report; “2014 Farm Bill Update” with Jonathan Coppess,
clinical assistant professor of law and policy at the University
of Illinois, Champaign-Urbana; “Risk In Your Ag Portfolio”
with Steve Turner, Baird Holm LLP, and “Repayment Risk
in a Variable-Price Environment” with Dr. Freddie Barnard,
professor in the Department of Agricultural Economics at
Purdue University, Lafayette, IN.
12
www.cbai.com
+
Conference Sponsors:
Community BancService Corporation, Inc., Springfield, IL
Diversified Crop Insurance Services, Jacksonville, IL
Farmer Mac, Washington, D.C.
Exhibiting Firms:
CliftonLarsenAllen, St. Louis, MO
Community BancService Corporation, Inc., Springfield, IL
Illinois Society of Farm Managers & Rural Appraisers, Menomonee Falls, WI
Diversified Crop Insurance Services, Jacksonville, IL
Farmer Mac, Washington, D.C.
Vital Financial Services, Clive, IA
CBAI thanks the members of the Ag Lenders’ Subcommittee
for their expertise and assistance in developing and promoting
this year’s Ag Lenders’ Conference.
Ag Lenders’ Subcommittee:
Chairman: Doug Smith, Farmers National Bank of Griggsville
Jennifer Beard, Farmers State Bank, Elmwood
Kerry Hoops, German-American State Bank, German Valley
Alan Hoskins, Legence Bank, Eldorado
Ronald Rinkenberger, State Bank of Toulon n
Banknotes
Community Bankers Association of Illinois
CEOs Are Being
Held Accountable For
Information Security
Robert Mendez, Executive Vice President, BankOnIT, Oklahoma City, OK
W
hen Gregg Steinhafel rose to the ranks as
CEO of Target, he likely banked on his rich
retail experience that began as a youngster in
the family furniture store to catapult him and
his company to further success. Retail was his business.
But after a data breach left forty million Target customers
with stolen credit- and debit-card numbers last December,
Steinhafel learned what is becoming a reality for CEOs:
knowing how to protect your customers through computer
security is as important as company strategy or growing profits.
The data breach and how Target handled it – the company
was slow to contact customers and has been accused of not
responding to security alerts that may have prevented the
attack – were factors in Steinhafel’s resignation in early May.
Though Target isn’t the only retailer to have been hacked
recently, Steinhafel is the first CEO to lose his job after such
an incident.
Retail executives aren’t alone in this new reality. Bank CEOs
typically have substantial banking experience and understand
the risks involved in lending, investments and even traditional
bank operations risks. But these same CEO backgrounds that
have made them successful bankers may not have prepared
them to strategically manage information technology risks.
Banknotes
Ultimately it’s the board and the CEO who are responsible
for ensuring their customers’ data – and money – is protected.
The Federal Financial Institutions Examination Council
(FFIEC) emphasized the importance of executive leadership
having knowledge of information technology risks and
mitigating those risks in a recent webinar for nearly 5,000
community bank CEOs and senior managers.
In the webinar, the FFIEC stated that bank CEOs and boards
must set the tone from the top in building a security culture.
Steinhafel’s resignation underscores this point further. While
it was once acceptable to delegate all things IT-related
to lower-level personnel, bank regulators and boards now
recognize that information technology and computer security
need oversight from the top.
The potential problems and risks facing information
technology are changing as quickly as new technology is
evolving. Because those risks are becoming more complex
and frequent, the burden can no longer fall to IT personnel.
Managing information security risks is a strategic issue that
banks must factor into the institution’s overall operations.
But when a bank CEO’s background is in lending and
investments, making the leap to becoming an IT expert can
+ September 2014
15
Community Bankers Association of Illinois
be overwhelming. Utilizing outside experts is a good way
to bridge this gap. Many financial institutions are moving
toward cloud-based services to improve efficiency, reliability
and information security while minimizing risk -- including
regulatory and strategic risks – that are present in today’s
rapidly changing technology environment.
While technical capabilities and efficiencies can be gained by
using an experienced vendor, the bank must properly manage
the vendor relationship.
The FFIEC recommended in its recent webinar that bank
CEOs create a governance plan that ensures ongoing
awareness and accountability with IT service providers. CEOs
are to specifically provide senior management with timely
reports and meaningful information including addressing the
bank’s vulnerability to cyber threats.
“We expect the board and management to ensure that
appropriate risk management practices are in place, that
clear accountability for day-to-day management of these
relationships is established, and that independent reviews of
these relationships will be conducted periodically,” Curry said.
Regulatory knowledge, technical capability, internal controls
and reporting are all elements needed for a successful vendor
relationship. Cloud computing vendors that are regulated,
that in turn do not outsource and provide the bank the
necessary reporting, can help banks operate more efficiently,
be better prepared for future cyber threats and help meet
regulatory compliance demands. n
BankOnIT is an exclusive preferred marketing partner of Community
BancService Corporation (CBSC).
Comptroller of the Currency Thomas Curry underscored
these points in a speech in April and noted that it is critical
that banks monitor compliance of third-party vendors.
16
www.cbai.com
+
Banknotes
Community Bankers Association of Illinois
Rick Hiatt, Morton
Community Bank and
chairman of the CBAI
Foundation for Community
Banking, attended nearly
all of the 2014 Group
Meetings to encourage
attendees to participate
in the Foundation’s
scholarship programs
and to contribute
to support them.
2014
Group Meetings
Wrap Up
Steve Finzel, Golden Eagle Community Bank, Woodstock; Marc Grayson,
South Central Bank, N.A., Chicago, and James Renn, Lisle Savings Bank,
participate in the Groups 1,2, and 3 Meeting in Naperville.
Naperville
Three-Star Sponsors:
THE BAKER GROUP, Oklahoma City, OK
Community BancService Corporation, Springfield, IL
iZale Financial Group, Schaumburg, IL
Two-Star Sponsors:
T
he 2014 Spring Group Meetings attracted nearly
650 bankers from more than 150 banks, as well as
192 representatives from 133 associate member
firms, guests and staff, for a total attendance
of more than 900 individuals. At even-numbered Group
Meetings, CBAI members elected Group Directors to
represent them during a two-year term. The re-elected (R)
and elected (E) CBAI Group Directors for those groups are:
Group 2: David Stanton, PeopleFirst Bank, Joliet (R)
Group 4: Kerry Hoops, German American State Bank,
German Valley (E)
BancVue, Austin, TX
Executive Benefit Options, Aurora, IL
Federal Home Loan Bank of Chicago, Chicago, IL
Independent Community Bankers of America (ICBA),
Washington, DC
ICBA Bancard, Inc. & TCM Bank, N.A., Washington, DC
Quad City Bank & Trust Company, Davenport, IA
SHAZAM® Network, St. Peters, MO
Debra Rathert, The First National
Bank of Ava, sizes up a putt at the
Group 13 Meeting in Marion.
Group 6: Doug Parrott, State Bank of Toulon (R)
Group 8: Jeff Bonnett, Havana National Bank (R)
Group 10: Jim Weast, Warren-Boynton State Bank, New Berlin (E)
Group 12: Dan Graham, Flora Bank & Trust (R)
Appreciation goes to the following CBAI associate member
firms that served as sponsors. Their generous contributions
supported the more than $1,500 in golf and door prizes at
each event, as well as the informational book distributed to
each individual in attendance. n
18
www.cbai.com
+
Banknotes
Community Bankers Association of Illinois
CBAI’s Annual Group Meetings provide the opportunity for education, networking, and an optional golf outing.
One-Star Sponsors:
BankOnIT, Oklahoma City, OK
BankTrends, Portland, OR
BKD, LLP, Decatur, IL
Brown, Hay & Stephens, LLP, Springfield, IL
CBAI 401(k) MEP brought to you by CBAI, MSTC, and Pentegra, East Peoria, IL
CBIS, Powered by Nicoud Insurance, Springfield, IL
Computer Services, Inc. (CSI), Paducah, KY
Continuity Control, New Haven, CT
Diversified Crop Insurance Services, Jacksonville, IL
FUSE/Systemax Corporation, Springfield, IL
Walt Garner & Associates, Edmond, OK
Harland Clarke, Lake Carroll, IL
Homefield Energy, Collinsville, IL
Lewis, Rice & Fingersh, L.C., St. Louis, MO
McGladrey, Chicago, IL
Plante & Moran, PLLC, Chicago, IL
Sageworks, Inc., Raleigh, NC
Southwest Financial Services, Cincinnati, OH
Welch Systems, Inc., Peoria, IL
Wipfli LLP, Sterling, IL
Group Meeting Magazine was printed compliments of
Community BancService Corporation.
Banknotes
The following firms stepped forward as golf-hole sponsors
at CBAI’s Group Meetings:
Hole Sponsors:
THE BAKER GROUP, Oklahoma City, OK
BancVue, Austin, TX
BankOnIT, Oklahoma City, OK
Bank Trends, San Francisco, CA
CBAI 401(k) MEP brought to you by CBAI, MSTC, and Pentegra
CliftonLarsonAllen, LLP, St. Louis, MO
Community BancInsurace Services, Inc., Powered by Nicoud Insurance, Springfield, IL
Community BancService Corporation, Springfield, IL
CSI Board Portal Intranet, Paducah, KY
Continuity Control, New Haven, CT
Diversified Crop Insurance Services, Jacksonville, IL
Executive Benefit Options LLC, Aurora, IL
Fuse/Systemax, Springfield, IL
Harland Clarke, Oswego, IL
Homefield Energy, Collinsville, IL
iZale Financial Group, Schaumburg, IL
ICBA Bancard & TCM Bank, Washington, D.C.
Sageworks, Inc., Raleigh, NC
SHAZAM® Network, St. Louis, MO
Southwest Financial Services, Cincinnati, OH
Welch Systems, Inc., Peoria, IL n
+ September 2014
19
Community Bankers Association of Illinois
Asset/Liability Management
and Balance Sheet Dynamics
Jeffrey F. Caughron, Associate Partner, The Baker Group LP, Oklahoma City, OK
T h e B a n ki n g E n v i r o n m e n t
It is no surprise that community banks have seen their net
interest margin fall in recent years. We know that funding
cost hit bottom some time ago, while yields on earning assets
continued to whittle lower. Older loans and bonds paid off
or matured and were replaced by newer and much lower
yielding assets. As noted by the FDIC, margin compression
is especially problematic for smaller institutions since threequarters of their net operating revenue comes from net interest
income. Clearly, community banks have a great incentive to
focus on their asset/liability management processes.
Dy n a mic A n a lysis
Bank financial performance is the result of dynamic processes.
Balance sheets are constantly changing as the volumes of
different assets and liabilities, the rates paid (or earned) on
those balances, and the cash flows moving into and out of those
accounts are fluctuating and unpredictable. What we need to
know is, given the mix of assets and liabilities and the rates
associated with them, how can we expect margins and earnings
to perform under different rate environments as the re-pricing
assets and liabilities filter through the balance sheet over time?
In order to do this analysis, we must have tools that allow
us to make assumptions about rate changes, options risk,
curve shifts, prepayments, and sensitivities or betas. The
ultimate point of the exercise is to determine how the bank
is positioned, and what changes, if any, the bank may wish to
make in order to shore up exposures to interest rate risk.
Re-pricing Risk: Re-pricing risk results from differences in
the timing of rate changes and the timing of cash flows that are
built into the pricing and maturity structure of a bank’s balance
sheet. For most banks, re-pricing risk is the most visible
source of interest rate risk, and is measured by comparing
the volume of a bank’s assets that mature or re-price within a
given time period with the volume of liabilities that do so. Rate
differentials are then applied to the re-pricing balances so that
income and expense changes can be projected.
Yield Curve Risk: The nature of banking is such that banks
borrow short and lend (or invest) long. The shape of the yield
curve is dictated by the relationship between short-term rates
and long-term rates. From the bank’s perspective, it’s the
difference between funding cost and earning asset yield. Relative
rate changes cause the yield curve to flatten, steepen, or become
negatively sloped (inverted) during the course of an interest rate
cycle. Yield curve variation can exacerbate the risk of a bank’s
position by magnifying the effect of maturity mismatches. To
further complicate things, these maturity mismatches are often
uncertain and difficult to predict due to options risk.
Options Risk: Options risk has to do with the uncertainty
of cash flows due to various types of options that are attached
to or embedded within some financial instruments. These
options may alter the level and timing of cash flows and
create an unpredictable liquidity situation for the bank.
Unscheduled paydowns of principal, for example, or call
options attached to bonds are common reasons for sudden
shifts in balance sheet cash flows.
E v e ry B a l a n c e S h e e t I s D i f f e r e n t
Each community bank has unique characteristics and ways
of doing business that reflect the economic landscape of the
market that they serve. Some are loan-driven suburban banks
that face strong competition for deposits. Others do business
in agricultural communities where loan demand and deposit
growth are driven by seasonal factors. The one thing they all
have in common is the fact that they operate in the same
interest rate environment at any given point in time. Every
bank must assess its exposure to interest rate risk and the
interplay of three subcategories of risk: re-pricing risk, yield
curve risk, and options risk.
S ummary
Sound management decisions require an understanding of
the unique dynamics of the balance sheet. We must model
the expected behavior of re-pricing balances, changes in rate
structure, and uncertain cash flows under different market
conditions and yield curve scenarios. Asset/liability managers
must make reasonable assumptions that make sense for the
particular type of business they do and the customer base they
serve. Importantly, this requires the right tools and the right
way of thinking about interest rate risk and performance. n
*The Baker Group LP is the sole authorized distributor for the products and services developed and provided by The Baker Group Software Solutions, Inc. The Baker Group
is a preferred service provider of Community BancService Corporation (CBSC). Caughron may be reached at 800/937-2257, www.GoBaker.com, or [email protected].
20
www.cbai.com
+
Banknotes
Community Bankers Association of Illinois
Banknotes
+ September 2014
21
Community Bankers Association of Illinois
Safe Deposit Boxes –
Profit Center or Loss Leader?
David P. McGuinn, President, Safe Deposit Specialists
F
or many profit-conscious financial institutions,
their safe-deposit-box operation is perceived as
a millstone or a low-yield “necessary evil” that
must be tolerated to remain competitive and serve
consumers. However, with careful analysis, planning, and the
revamping of some pricing and procedures, these same boxes
can become a thriving profit center within 24 to 36 months.
As a nationally recognized safe-deposit-box specialist, I
am often asked what techniques could be put in place to
transform this “loss leader” into a lucrative endeavor. My
answer is always simple and concise: know your market,
evaluate and train your department staff, and review your
box-rental rates, fees, programs and policies.
Analyze Market:
Identify the consumers who will most likely rent boxes and
appeal to them. Surveys reveal these facts:
• Most box renters are 50 years old or older. (age = wealth)
• The income level among box renters is 14 percent greater than the
national average, and 42 percent are college-degreed professionals.
• This market group is 16 percent more likely to avail itself of additional
financial services offered by an institution.
• Nonusers are typically younger blue-collar workers with less education
and lower income than their affluent counterparts.
The challenge, to draw this nonuser market group into the safedeposit fold, can be met in several ways. Educate these potential
box renters by making safe-deposit-box rental relevant to their
particular needs. Offer rates and fees that appeal to a lowerincome clientele. Train your staff to recognize this group and offer
box services that are realistic and affordable, but not given away.
Train Staff:
A well-versed, well-trained department staff must be very
sensitive to the special type of traffic that flows through its
Banknotes
department, those who match the typical box renter profile,
your affluent patrons. Within this market group there are rich
opportunities to cross-sell additional financial services. These
consumers will most likely express interest in investments,
CD’s, annuities, and mutual funds and are excellent candidates
for a VIP relationship for which they will be willing to pay
by maintaining high-account balances. Sophisticated box
renters expect to interact with a well-trained staff capable of
answering their questions and discussing and meeting their
financial needs and aspirations. The typical temporary worker
or a part-time staff lacks the motivation or knowledge to tap
into this cross-selling opportunity.
Profit or Loss:
Box-rental rates, fees, and policies must be carefully reviewed
annually. After surveying the local competition, your current
rental rates and fees should be compared and adjusted
periodically, the same way other products and pricing are
handled. Box-rental rates should be calculated using a “vault
area occupied” pricing method which can be easily calculated
and explained to box renters. Complete a profit and loss
analysis of the entire safe-deposit-box operation, develop
additional ways to increase box rentals, and implement at
least 15 additional fees that could be charged. Formulate
an acceptable method of announcing future rate and fee
increases and if available, revisit successful box-rental
programs and employee incentives that proved beneficial in
the past. Finally, examine all “free-box” rental agreements and
justify the reasons why rental charges were waived.
Other Resources:
After completing all of the steps above there are also several
very effective marketing forms, brochures, and booklets
available. These safe-deposit-box resources will help you
rent more boxes and maintain your current box renters. One
publication, titled, “Safe Deposit – The Ultimate Protection”
was written to help consumers understand the benefits,
+ September 2014
23
Community Bankers Association of Illinois
complexities, and security requirements of renting a safedeposit box. This booklet includes:
• What items should be protected in a safe-deposit box?
• Description of the very reasonable box rental rates.
• Helpful hints to increase safe-deposit-box security.
• What 70 items need safe-deposit-box protection?
• Why should everyone have a safe-deposit box?
• Description of all available box sizes.
Other marketing resources include a very popular
“Question and Answer Brochure” that is now used by
thousands of nationwide financial institutions. This safedeposit-box brochure addresses and answers consumer’s
“Most Frequently Asked Questions” and helps them
evaluate the importance of having a safe-deposit box to
safeguard their valuables.
All of these printed publications can be used as marketing
tools for new accounts, trust departments, officer call
programs, investment meetings, senior citizen clubs, civic
groups, school tours, and employee box-rental contests
and promotions. n
McGuinn may be reached at 713/937-9929 or [email protected] or
visit visit www.sdspec.com
Banknotes
Community Bankers Association of Illinois
Top Six Advantages of
Outsourced Core Processing
Shellie Marrs, CSI Solutions Consultant
A
FUN
FACT
According to a
Bank Systems
and Technology
report, about 80
percent of new
core-system
contracts in
2010 featured
outsourced
deployment.
s recently as five years ago, the in-house model
of core system data centers was the option of
choice for many community financial institutions.
However, accelerating technological advances in
financial services, along with increasing regulatory pressures,
are changing the way banks view their current business
models and ongoing needs. And for many, outsourced core
processing is making a lot of sense.
The differences between in-house core processing and an
outsourced model are steadily fading. Financial institutions
once held to the belief that maintaining in-house processing
was the only way to retain control over information and
operations. But while it’s true that in-house processing
can offer institutions a sense of power in regard to their
infrastructure—as well as flexibility in terms of selecting
hardware and software—outsourced data centers have evolved
for changing demands and now offer financial institutions
an equal amount of control, while also providing increased
security and reducing costs for maintenance and upgrades.
Further, as digital channels multiply, it’s become increasingly
expensive—yet critical—to maintain constant, uninterrupted
service from these various touch points. Outsourced
processing deployment, however, is ideally suited to handle
this challenge while keeping costs to a minimum.
28
www.cbai.com
+
In point of fact, according to a Bank Systems and Technology
report, about 80 percent of new core-system contracts in
2010 featured outsourced deployment. As you evaluate your
choices for managing back-office operations, consider these
advantages of outsourced data centers:
1. Ability to Focus on Profitable Activities:
The race to keep up with today’s technology, as well as rising
regulatory burdens, consumes increasing resources—both
human and financial. This comes at the expense of the
primary activities that have made your bank successful, like
making loans, providing individualized customer service,
and analyzing profitable customer relationships. Outsourced
processing allows you to refocus on those customer-centric
business activities that are most important for growth,
without sacrificing quality or service in the back office.
2. Reduced Costs/Greater Efficiencies: Back-office
functions are complicated in nature, and many banks find
difficulty in performing those functions at a consistent and
reasonable cost. Small banks are hit hardest by this problem,
since back office employees don’t generate revenue, yet
costs are often the same as they are for larger banks. Plus,
institutions using an outsourced delivery mode tend to see
fewer surprise expenditures popping up.
Banknotes
Community Bankers Association of Illinois
3. Disaster Recovery/Regulatory Compliance:
You have a bank to run, so make this your core processor’s
problem. Outsourced core deployment provides the
support you need to streamline disaster recovery, regulatory
compliance processes and business continuity planning, and
does so without additional in-house expenditures.
4. Staffing Flexibility: Outsourcing allows institutions
that have seasonal or cyclical demands to bring in extra
resources only when needed. In addition, as competition for
experienced IT professionals grows ever fierce, your reliance
on full-time IT employees decreases.
5. On-demand Scalability: An outsourced core
environment grows along with your bank, eliminating
concerns of capacity limitations, infrastructure adjustments,
and additional IT staff and system hardware. Because
of this, implementing new products and services is
easily accomplished.
6. Competitive Advantages: Armed with increased
scalability, your bank can be first to market with new
solutions. Further, the right vendor can help your bank
deploy and maximize the effectiveness of these solutions,
relieving your staff from owning the entire burden.
You hear it time and again — bankers just want to be bankers.
And as outsourced core deployment continues to meet IT
challenges head-on, more financial institutions will view it as
a significant way to accomplish that goal. n
Shellie Marrs, CSI solutions consultant, conducts technology demonstrations and other training events for financial institutions, providing
practical insight into the ways various platforms operate and interface. Shellie previously served more than 15 years as a CSI account manager, a
role in which she worked directly with financial institutions on the most effective ways to leverage technology.
Banknotes
+ September 2014
29
Community Bankers Association of Illinois
Community
•
T
Bankers School
hirty community bankers graduated in July from
the Community Bankers School (CBS) at Illinois
Wesleyan University in Bloomington. CBS, which
consists of two, one-week sessions over a twoyear period allows community bankers to immediately
contribute to the overall success of their banks, and
provides the knowledge necessary to get ahead. An intensive
program designed for today’s community bank professional,
CBS features a nationally recognized faculty, an updated
curriculum, and timely topics.
Topics covered during an intense week for Class I participants
include compliance, accounting, commercial and consumer
loan documentation, collections, bank security, auditing,
investments, and technology, while Class II focuses on
aspects of management. The School’s benefits extend beyond
the classroom with outside case studies, an invaluable student
notebook with supplemental materials, as well as networking
opportunities with peers, instructors, and senior bankers.
Students gain a background and experience for broader
responsibilities and greater effectiveness, as well as insight
into a community bank’s overall operations responsibilities.
2014 Graduates
Row #1 - (L to R)
*Lynette Goldsmith, West Central Bank, Ashland
*Justin Witek, Pioneer State Bank, Earlville
*Denay Brown, First National Bank in Staunton
*Veronica Schmitt, First State Bank, Mendota
*Wendy Hoekstra, First Community Bank and Trust, Beecher
*JoAnna Engels, North Central Bank, Hennepin
*Sarah Perardi, Bank of Farmington
•
Row #2 - (L to R)
Jon Lorson, Tri-Valley Bank, Randolph, IA
*Ian Vanderford, First National Bank in Staunton
*Audrey Sherwood, Twin Oaks Savings Bank, Marseilles
*Nicole Dilbeck, The State Bank of Blue Mound
*Chris Bohnhoff, First State Bank of Beecher City
*Phil Daum, State Bank of Toulon
Row #3 - (L to R)
*Brett Lockart, First Federal Savings & Loan Association
of Central Illinois, Shelbyville
*Carla Williams, First National Bank of Sandoval
*Jaci Billingsley, West Central Bank, Ashland
*Daman Emrick, Farmers National Bank of Griggsville
*Devon Knobloch, State Bank of Speer
*Sam Stock, First National Bank, Vandalia
*Neil Jordan, First National Bank of Raymond
*Nathan Wenger, Bank of Pontiac
Row #4 - (L to R)
*Andrea Slack-Cookson, The Fisher National Bank
*Brian Royalty, Farmers State Bank of Camp Point
*Zack Krulac, Bank of Farmington
*Brent Ford, Casey State Bank
*Chris Barth, The First National Bank of Dieterich
*Loren Follmer, Tompkins State Bank, Avon
(Galesburg Branch)
Row #5 - (L to R)
*Brandon Brackett, Prairie State Bank & Trust, Mt. Zion
*Taylor Rakers, The Farmers Bank of Liberty
*Matt Koester, National Bank, Hillsboro
*denotes member of CBAI’s Career Development Division (CDD)
Banknotes
+ September 2014
31
Community Bankers Association of Illinois
Advertisement
Take Charge of
Your TILA-RESPA
Implementation
A
lthough August 2015 might seem
distant, the risk of not fully complying
with the new TILA-RESPA integrated
disclosure rule in time is very real. Because
the rule impacts not only documents, but
bank processes as well, banks need to start
making changes now to ensure they are
sufficiently prepared by next August.
This regulation is much more than cosmetic
changes to two documents. With 1,888
pages of identifying requirements, it is
being called an industry “game-changer.”
The requirements around producing and
delivering these two disclosures will impact
your entire mortgage operation, including your
business processes, technology, policies and
procedures, vendor relationships, employee
readiness and customer service. Additionally,
failure to comply with these rules could result
in unprecedented fines and penalties, costing
you thousands of dollars each day.
With so much at stake, it is critical that
banks develop a plan, not only to manage
the document changes required by the new
integrated disclosures, but one that addresses
the operational and workflow changes and how
they will implement those changes. But, with
a regulation of this magnitude, sometimes
getting started can be the hardest part.
We can help. At Wolters Kluwer Financial
Services, we take compliance very seriously.
Whether you just need a few questions
answered or an expert to walk you through the
entire process, we can help you understand and
prepare for the broad impact of the new rule.
Our compliance experts have established
relationships with the CFPB and have
invested thousands of hours in deep analysis
of the rules, which puts Wolters Kluwer
Banknotes
Financial Services in a unique position to
contribute meaningful guidance and help
alleviate some of the burden bankers face
when preparing for these changes.
As a result of our ongoing discussions with the
CFPB, we have identified a recommended
course of action to keep our bankers ahead
of the compliance game. It’s our number-one
priority and we are committed to providing
you with the most efficient resources and
solutions to help ensure TILA-RESPA
compliance while mitigating risk.
So, what’s your next move?
It’s no secret that compliance has become a
burdensome line-item on the expense report
and that many banks are stretched too thinly
to adequately interpret, understand and
operationalize the nuances of these regulatory
changes. However to move forward, it is
important to have a clear understanding of
the new timing requirements and how they
affect your operations.
Do you have an action plan in place?
Wolters Kluwer Financial Services can help
minimize the impact of the new TILARESPA implementation on your organization.
Our compliance experts have completed the
legwork for you—and have designed a TILARESPA Resource Center and TILA-RESPA
Tool Kits that will keep your implementation
on time, on budget and within scope.
Our TILA-RESPA Resource Center will help
you stay up-to-date with changes as they occur.
Educational videos, links to relevant industry
information and other useful tools provide
our customers with more information and
clarity around the regulations. The Resource
Center also gives you access to the solutions
and compliance services available to help
lenders meet the wide array of challenges
presented by the TILA-RESPA requirements.
In addition, you can trust our industry
expertise, processes and tools to deliver a
faster, more cost-effective TILA-RESPA
integration. With our TILA-RESPA Tool Kit,
we’ve taken all of the regulatory information
and made it actionable, which eliminates
the compliance guesswork and allows you to
spend time where it matters most—focused
on your customers and your bottom line.
Our tool kit can assist you with understanding,
implementing and managing the new TILARESPA integrated disclosure requirements by:
• Providing an in-depth understanding of
the regulatory changes
• Keeping your implementation on track and
on budget using a structured project plan,
which includes templates and training
• Educating your board members,
management team and staff on the
importance of TILA-RESPA
• Updating policies and procedures
• Ensuring a favorable customer experience
Best of all, we will continue to update the tool kit
to accommodate any changes in the regulation—
and notify you that a new version is available for
download. You’ll never have to worry about using
outdated or non-compliant information during
your implementation process. n
Remember, with the magnitude of the new
TILA-RESPA regulation, it’s critical to take action
now. Visit our TILA-RESPA Resource Center at
www.wolterskluwerfs.com/tila-respa-tool-kit
to order your tool kit today.
Wolters Kluwer is a preferred service provider of
Community BancService Corporation (CBSC).
+ September 2014
33
Community Bankers Association of Illinois
Advanced Compliance Institute
CBAI conducted a two-day institute for experienced compliance officers June 24-25
at CBAI’s Springfield headquarters. This institute attracted 13 community-bank
compliance officers and was conducted by Bill Elliott, senior consultant & manager
of compliance with Young & Associates, Inc. of Kent, OH.
Front Row (L to R)
*Rachel Wicklund, Goodfield State Bank
Debbie Carbonell, Warren-Boynton State Bank, New Berlin
Becky Hill, Central State Bank, Clayton
Janelle Kirby, Brown County State Bank, Mt. Sterling
Bill Elliott, Young & Associates, Inc.
* denotes member of the Career Development Division (CDD)
SECOND Row (L to R)
Kristina Scott, First Southern Bank, Carbondale
Ron Fullerlove, Peoples National Bank of Kewanee
*Mary Smid, Henry State Bank
Debra Wendt, The First National Bank of Dieterich
Sam Dundas, Peoples Bank of Kankakee County,
Bourbonnais
Sarah Aquirre, Flanagan State Bank
Heidi Potter, Jacksonville Savings Bank
Robin McKain, Casey State Bank (Lawrenceville)
Not Pictured: Marsha Bunyon, Sheffel Boyle, Alton, IL n
Banknotes
+ September 2014
35
Community Bankers Association of Illinois
LEGAL LINK
Employee Policy Manuals Can Create Enforceable Contractual Rights
Jerry Cavanaugh, CBAI General Counsel, Springfield, IL
B
ecause Illinois is an “at will” employment state and most
well-drafted employee policy manuals now contain
multiple disclaimers emphasizing that nothing in the
manual is to be interpreted as creating contractual rights in
favor of the employee or contractual obligations that may be
enforced against the employer, there may be an assumption
that the law establishes that personnel policies cannot be
treated as a contract and cannot convey rights to employees.
As you will see below, that assumption would be incorrect and
the legal disclaimers that we have now become accustomed to
seeing in personnel policies are there to rebut the law which
otherwise would recognize contractual rights in such policies.
The leading case in Illinois on this topic is the Illinois
Supreme Court’s decision in 1987 in the case of Duldulao vs.
St. Mary of Nazareth Hospital. In that case, Nora Duldulao
(“Employee”) had completed her probationary employment
period as a nurse and therefore was considered a “permanent
employee” per the hospital’s (“Employer’s”) personnel policies.
Employee was subsequently re-assigned to a position as
an H.R. Coordinator and was monitored throughout a new
probationary period in that role. At the end of that probationary
period, Employee was notified that she was being dismissed
due to unsatisfactory performance.
36
yet a permanent employee covered by the personnel policy in
question. The Court ruled that once Employee had attained
permanent employee status as a nurse, the Employer could
not effectively revoke that status by assigning her to a new
role and turning back the clock to make her once again a
probationary employee.
More to the point, the Supreme Court concluded that language
in a personnel policy manual does create enforceable contractual
rights if the following three tenets of contract formation are
present: (1) the promise or benefit is stated clearly enough that
the employee could reasonably believe that it constituted a
binding offer; (2) the statement or benefit was communicated
to the employee in a mode or manner that would make the
employee aware of its content; and (3) the employee accepts
the offer by giving “consideration” in the form of continued labor
after learning of the right or benefit offered in the policy. You
can now understand how repetitive disclaimers are intended to
nullify essential component (1) above.
The Employer’s personnel policy unambiguously stated that
permanent employees could only be fired after “proper notice
and investigation” (except in cases of extremely serious cases
such as patient abuse); furthermore, permanent employees
were entitled to three warnings before dismissal.
The Illinois Supreme Court in the Duldulao case found that
all three of those conditions had been met, and therefore
Employee could not be fired without the progressive
discipline (including investigation and three warnings) called
for in the policy, since Employee was not being dismissed
for any extreme or egregious conduct. The Court’s opinion
did note that the Employer’s policy did not contain any legal
disclaimers of a contract and in fact the preamble stated that
the purpose of the policy manual was “to clarify your rights
and duties as employees.” n
The Supreme Court disposed of Employer’s threshold
argument that the policy manual did not apply to Employee
because she was under probationary review and was thus not
Legal Link is a free CBAI member benefit. For answers to your
general, banking-related legal questions, contact Jerry Cavanaugh in
the “Members Only” section of the CBAI website, www.cbai.com.
www.cbai.com
+
Banknotes
Community Bankers Association of Illinois
C
O
M
I
N
G
O CT OBE R
=
Webinar
38
+
IRA Webinar: Basic
IRA Webinar: HSA’s
20-21CDD Fall Meeting — I-Hotel &
Conference Center, Champaign
Education Center, Springfield
9Your Depositor Has Died: Now
21Safe Deposit Boxes: Compliance,
Legal Issues, Delinquencies
& Death — Webinar
What? — Webinar
9
IRA Webinar: Intermediate Part 2
14Everything You Need to Know
About Regulation CC: Compliance,
Placing Holds, Substitute Checks
& Clearings — Webinar
IRA Webinar: Intermediate Part 1
www.cbai.com
S
Insurance Process — Webinar
3CEO Forum Group VII — Hilton
8Run, Fight, Hide, or Comply?
Robbery Training — CBAI
Education Center, Springfield
N
16Managing the Force-Placed Flood
O
9Ag Credit Analysis — CBAI
7
I
15
T
3CEO Forum Group V — Hilton
Lisle/Naperville
Employee Screening: Pre-Hire
& Post-Hire — Webinar
C
Expectations & Responsibilities
— Webinar
8
7Compliance & Legal Issues in
A
8Defining Risk Management Officer
Lisle/Naperville
R
Education Center, Springfield
To register
for these
seminars
contact
Wolters
Kluwer
Financial
Services at
800/552-9410
1Safe Deposit Update — CBAI
A TT
15Recent Accounting Developments
21
22Branch Manager Group A –
IRA Webinar: Intermediate Part 1
CBAI Education Center, Springfield
22How to Reduce IT Risk Assessment
Time by 70% & Still Satisfy
Examiners & Your Board — Webinar
& Future Issues — Webinar
Banknotes
Community Bankers Association of Illinois
22
23Bank Secrecy Act/Anti-Money
IRA Webinar: Advanced
Laundering — CBAI Education
Center, Springfield
28Social Media Update: Facebook,
LinkedIn, Twitter & YouTube
— Webinar
29CBC Program 1st Quarterly
Meeting — Hilton Lisle/Naperville
23Conducting the 2014 ACH Audit
— Webinar
23
24Branch Manager Group B — Grizzly
Machine — CBAI Education
Center, Springfield
IRA Webinar: Intermediate Part 2
27Auditing Equal Credit Opportunity,
Insider Loans, and the Service
Member Civil Release Act –– CBAI
Education Center, Springfield
28CBC Program 1st Quarterly Meeting
— Northfield Center, Springfield
Banknotes
29Regulatory Compliance for Deposit
Operations, Including BSA
— Webinar
Jack’s Grand Bear Resort, Utica
29Developing A Successful Sales
30Mobile Payments: What You Need
to Know Now, What You Need to
Do Next — Webinar
31CEO Forum Group VI — CBAI
Education Center, Springfield
+ September 2014
39
Community Bankers Association of Illinois
Welcome New Members
NEW FINANCIAL INSTITUTION MEMBERS
Ben Franklin Bank of Illinois, Arlington Heights
Bank of O’Fallon
Steven D. Olson, President
Kip Adkins, Senior Vice President
Union Federal Savings &
Loan Association, Kewanee
Peoples Bank & Trust, Pana
Craig Gustafson, President
First Savanna Savings Bank
John Gardner, President & CEO
Steven M. McIntyre, Director/CEO
New ASSOCIATE MemberS
Allstate Appraisal L.P.
Bancare Inc.
M2 Lease Funds, LLC
320 W. 202nd Street
Chicago Heights, IL 60411
Steven S. Albert, MAI, SRA, President
866-799-9009
www.allstateappraisal.net
[email protected]
6 East College Drive
Arlington Heights, IL 60004
J. James Cozzi, President
847-394-1122 / Fax: 847-394-0268
www.bancare.net
[email protected]
175 N. Patrick Boulevard, Suite 140
Brookfield, WI 53045
Gary Sanders, Vice President
630-232-4710
Fax: 630-402-0225
www.m2lease.com
[email protected]
National Valuation and Review Services
40
www.cbai.com
+
Bank Security – Alarm, Video, Safes,
Vaults, ATM, Drive-up
Commercial Leasing
Banknotes
Banknotes
January
MARCH
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42
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+ September 2014
43
Community Bankers Association of Illinois
MEMBER NEWS
Bradford National Bank, Greenville
President Frank Joy presents
commemorative plaque to
Lola Horsfall.
After 42 years of service,
Lola Horsfall has retired
from Bradford National
Bank, Greenville. Horsfall
started working at the
bank on June 5, 1972 in
bookkeeping. At that time,
the bank had 17 employees
at one location with $18
million in total assets. Today,
the bank has four locations, 53 employees and $254 million in
total assets. Since then she has worked in many areas of the bank
including serving as head of the bookkeeping department, in loan
processing, and as computer operations manager, helping guide
the bank through many software conversions. Since 1993, she has
served as the administrative assistant to Frank Joy throughout his
tenure as president.
Congratulations! The following CBAI member banks
were named by the Independent Bankers Association
of America (ICBA) as among the Top 50 Consumer Loan
Producers in its membership: Evergreen Bank Group,
Oak Brook; State Bank of the Lakes, Antioch; The
First National Bank of Sandoval; and Princeville State
Bank. Named by ICBA among the Top 50 Commercial Loan
Producers were: Community Bank, Hoopeston and The
Fairfield National Bank.
Bradford National Bank, Greenville also announced the
retirement of Dennis Rinderer, who joined the bank in 2002
to staff its then-new branch in Highland. Rinderer, a lifelong
resident of Highland, has 42 years of banking experience in the
Highland area.
Bank of Springfield (BOS) announced that John Kelley
has joined its team as mortgage banker in the bank’s Brentwood
lending office.
In celebrating its 150th anniversary,
Farmers State Bank, Elmwood
is also celebrating its community
by honoring the elements that
have contributed to its success.
In May, the bank held its Annual
Customer
Appreciation
Day.
This summer, it sponsored an
ice cream social and Fitness
Fridays. In the fall, it continues its
sesquicentennial festivities in conjunction with
Elmwood’s Annual Fall Festival. In the photo, bank President
Jennifer Beard holds the CBAI commemorative plaque.
44
www.cbai.com
+
Farmers State Bank,
Elmwood also recognized
the retirement of Harold
Jehle in addition to its
sesquicentennial
festivities. Jehle began his
career at Farmers State
in 1969 and was promoted
to director in 1974. He
held the position of EVP
from 1985 until 2014. Jehle
plans to spend his retirement enjoying fishing at his lake and
spending time with family and grandchildren.
Ed Teefey, president of Farmers
State Bank & Trust Co., Mt.
Sterling, is shown holding the
bank’s 100-year anniversary
plaque from CBAI.
Danielle Niebrugge recently
joined First Mid-Illinois Bank
& Trust, N.A., Mattoon (First
Mid), Mattoon as SVP, director
of human resources. She brings
18 years of experience in human resources to the First Mid
organization. She earned her B.S. degree in sociology from
Southern Illinois University at Edwardsville with an emphasis
in employee relations and minor in business. She became
certified as a Senior Professional in Human Resources (SPHR)
in January 2011.
Kristi Montgomery, wealth management officer with
Raymond James Financial Services at First Mid, has earned the
designation of Accredit Asset Management Specialist (AAMS)
from the College for Financial Planning. She completed a course
of study encompassing investments, insurance, tax, retirement,
and estate planning. Montgomery holds a B.S. degree in finance
and accounting from Indiana State University, Terre Haute and
holds Series 7, Series 66, and Series 24 licenses.
Jaci Manzella has been promoted to AVP, retail loan officer of
First Mid. She began her career at First Mid in 2002, having
held multiple positions. Manzella is a graduate of The University
of Illinois, Urbana with a B.S. degree in agricultural, consumer,
and environmental studies and is certified through the Fair
Credit Reporting Act to resolve all credit bureau disputes on
behalf of the bank.
Debbie Root has been appointed to the position of branch
manager for First Mid. In her new role, she is responsible for
overseeing the day-to-day deposit operations in the Tuscola
Community Bankers Association of Illinois
MEMBER NEWS
banking center. Root has held various roles since joining First
Mid in 2003.
find the best solutions. Snyder will work with a CBAI member
bank’s current Midwest Office sales representative.
Mark Klinger has joined First Mid as retail loan officer. He
is based out of the Arcola branch.Klinger graduated from the
University of Illinois-Springfield, summa cum laude, with a
bachelor’s degree in business administration.
Growth Corp. has been named Illinois’ 504 Lender of the Year
by SBA, representing its continued support and contributions to
the small-business community. In 2013, Growth Corp assisted
405 businesses with the 504 Loan Program, totaling $710M in
real-estate financing, $284M of which was 504 capital; these
projects directly created and/or retained over 1,900 jobs.
Illini State Bank, Oglesby introduces Illini Investment
Services, a new division aimed at providing its customers and
communities with investment services. Financial Advisor
Neal Beer will lead the division. Illini Investment Services
assists its clients with individual retirement accounts, employersponsored retirement plans, investment brokerage services,
college savings plans, trust accounts, and insurance products
and services. Beer has been in financial services for 10 years. He
has several FINRA securities licenses, as well as a state life and
health insurance license.
Amy Snyder has been named by Midwest Office, a CBSC
preferred services provider, as CBAI’s dedicated program
coordinator. This new position is designed exclusively to support
community banks by keeping CBAI members up-to-date on
special programs and events, increase efficiency, and help them
CBAI
Plante Moran has appointed Joe Oleksak, CISSP, CRISC,
QSA, to partner in its Chicago office. Oleksak has more than 16
years of information security, controls and IT-audit experience
primarily related to financial-services organizations. Oleksak will
lead Plante Moran’s Information Technology (IT) Consulting team;
he will also continue to specialize in advising clients on IT security,
audit, and technology, keeping them abreast of financial-services
regulations, trends, and security best practices.
Banc Statements, Inc. (BSI) has hired Ila Shrestha as
software engineer. As such, Shrestha is responsible for the IT
management of BSI’s critical and high-performance software
applications. In this role, she handles implementation as well
as statement redesign and software customization for clients. n
Foundation for
Community Banking
Recent Donation News
State Bank of Whittington, Benton has made its first
donation toward its Silver-level pledge.
Bank, N.A., Chicago; David Loundy, Devon Bank,
Chicago; Cindy Martin, Lena State Bank; David
Pirsein, First National Bank in Pinckneyville; and Mary
Sulser, Buena Vista National Bank, Chester.
Henry State Bank has paid an installment toward its
Bronze-level pledge.
Bob and Diane Wingert, CBAI, have attained the Gold
level of sponsorship.
Devon Bank, Chicago has made its first donation toward its
Bronze-level pledge.
Bronze-level donors Andrea and Bob Cusick, CBAI,
have made an additional contribution to the Foundation.
Board and staff members of the CBAI corporate family
donating travel expenses for recent meetings are: Kevin
Beckemeyer, Legence Bank, Eldorado; Jerry
Cavanaugh, CBAI; Will Coolley, Longview Capital
Corporation, Newman; Todd Grayson, South Central
CBAI/CBSC staff members who are donating to the
Foundation through payroll deduction for the 2014-2015
fiscal year are: Jerry Cavanaugh, Jenny Dial, Mike Duke,
Valerie Johnston, Mike Kelley, Lisa Lippert, Tracy Z.
McQuinn, David Schroeder, and Bob Wingert. n
State Bank of Toulon has reached the Platinum level of giving.
+ September 2014
45
Community Bankers Association of Illinois
I N D E X
O F
A D V E R T I S E R S
Allstate Appraisal . . . . . . . . . . . . 08
The ALPS Group . . . . . . . . . . . . 40
The Baker Group . . . . . . . . . . 32
BancVue . . . . . . . . . . . . . . . . . . 47
46
Federal Home Loan
Bank of Chicago . . . . . . . . . . . . . 30
Homefield Energy . . . . . . . . . . . . 43
Howard & Howard . . . . . . . . . . . . 03
BankOnIT USA . . . . . . . . . . . . . . 37
Independent Community
Bankers of America (ICBA) . . . . . . 21
BKD
. . . . . . . . . . . . . . . . . . 05
LKCS . . . . . . . . . . . . . . . . . . . . 24
Cardinal Software . . . . . . . . . . . . 24
McGladrey . . . . . . . . . . . . . . . . . 22
Community
BancInsurance Services . . . . . . . 43
Midwestern Securities
Trading Company, LLC . . . . . . . . 27
Continuity Control . . . . . . . . . . . . 34
Plante Moran . . . . . . . . . . . . . . . 07
CSI . . . . . . . . . . . . . . . . . . . . . . 46
Quad City Bank & Trust . . . . . . . . 16
Diebold . . . . . . . . . . . . . . . . . . . 26
The Redmond Company . . . . . . . 25
llp .
www.cbai.com
+
Roetzel & Andress . . . . . . . . . . . 27
SHAZAM ®, Inc. . . . . . . . . . . . . . . 17
Southwest Financial
Services, Ltd. . . . . . . . . . . . . . . . 46
Spotlight Financial . . . . . . . . . . . . 29
Systemax/FUSE . . . . . . . . . . . . . 29
Triad Financial Services . . . . . . . . 27
VanFleet Law Offices . . . . . . . . . . 14
Walt Garner
Associates, Inc. Insurance . . . . . . 13
Welch Systems Incorporated . . . . 48
Wipfli LLP . . . . . . . . . . . . . . . . . 42
Young & Associates, Inc. . . . . . . 02
Banknotes
Banknotes
Community Bankers
Association of Illinois
901 Community Drive
Springfield, IL 62703-5184