Illinois Banker | November - December 2019 by Illinois Bankers

The Official Publication of the Illinois Bankers Association ilbanker.com

November-December 2019

ALSO IN THIS ISSUE:

Check Fraud Growing Your Deposits Community Bank Deposits

ADDRESS SERVICE REQUESTED ILLINOIS BANKERS ASSOCIATION 3201 WEST WHITE OAKS DRIVE, SUITE 400 SPRINGFIELD, IL 62704

November-December 2019 • Vol. 104 / No. 6 • ilbanker.com

175 BANKS REPRESENTED

TABLE OF CONTENTS

150 YEARS IN BUSINESS

ONE FIRM

810 DEPARTMENTS 5 Message from the President and CEO 6 Compliance Corner 9 Washington Update

21 Preferred Vendor Spotlight 22 Ad Index

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38 New Member Banks

28 10 Protecting Your Institution from Check Fraud 12 Growing Deposits 14 Agricultural Banks Support Rural Illinois 17 Community Bank Deposits: Where Have They Gone? Event Highlights: 24 Washington Visit 26 Ag Banking Conference

www.howardandhoward.com 312.372.4000 Chicago, IL ‌ Peoria, IL ‌ Detroit, MI ‌ Ann Arbor, MI ‌ Las Vegas, NV ‌ Los Angeles, CA

34 Boards & Committees 36 FLA Update

FEATURES

For more information contact:

33 On the Move

28 Fall Golf Outing 30 Women in Banking Conference

38 New Associate Members 38 Associate Member News 40 News & Notes 41 Events Calendar 42 The Last Page Our Mission: Advocacy. Education. Industry Resource...for all Illinois bankers. Our Vision: Connecting Bankers. Advancing Banking.® Our Core Values: The Illinois Bankers Association will place our members’ interests first, be responsive to their needs, and provide them with the highest level of professionalism and service. The IBA staff is the Association’s greatest asset. We will conduct ourselves with integrity and respect. We will work together as a team, share information, build upon our strengths, embrace new ideas, and recognize and celebrate accomplishments.

OFFICERS AND EXECUTIVE COMMITTEE MEMBERS

REGION 1

REGION 4

Clark Delanois The Northern Trust Company, Chicago

Tom Gihl Illinois National Bank, Springfield

Martin J. Noll Oak Park

Anthony G. Nestler Hickory Point Bank and Trust, Decatur

REGION 2

Kevin L. Olson Chairman Grundy Bank, Morris

Rick M. Francois American Community Bank & Trust, Woodstock Betsy Johnson Forreston State Bank REGION 3 Thomas J. Chamberlain Iroquois Federal Savings & Loan, Danville

C. Brant Ahrens Chairman-Elect CIBC, Chicago

Tyler Rouse First Federal Savings Bank of ChampaignUrbana

REGION 5 T.J. Burge Community Partners Savings Bank, Salem Richard Knebel The Bradford National Bank, Greenville AT-LARGE CATEGORY Christopher P. Barton Wheaton

Dane Cleven Community Savings Bank, Chicago

Richard J. Mahoney First Midwest Bank, Chicago

Gary S. Collins Old Second National Bank, Aurora

Steven F. Rosenbaum Hoyne Savings Bank, Chicago

Megan Collins Bank of America, Chicago

Pamela A. ShararStoppel Wheaton Bank and Trust Company

Jeffery L. Fauver Catlin Bank James R. Hannon First Security Trust and Savings Bank, Elmwood Park Daniel J. Hollowed Cornerstone National Bank & Trust Company, Palatine

Linda Koch, CAE, President & CEO

James H. Huiskamp Blackhawk Bank and Trust, Milan

Erich J. Bloxdorf, Executive Vice President & COO

William P. Gleason Treasurer The Leaders Bank, Oak Brook

Mary Curl, Executive Assistant & HR Manager Pam Macha, Springfield Office Coordinator Legal and Compliance Bruce Jay Baker, Executive Vice President & General Counsel Carolyn Settanni, Senior Vice President and Associate General Counsel

Betsy Johnson Member-at-Large Forreston State Bank

Carly Berard, Senior Counsel Amy Giacomucci, Law Assistant Bank and Partner Relations Julie Clark, Vice President

Thomas J. Chamberlain Member-at-Large Iroquois Federal Savings & Loan, Danville

Daniel P. Daly Immediate Past Chairman SENB Bank, Moline

Linda Koch Secretary IBA President and CEO, Springfield

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• November-December 2019

Jeff Bowden, Senior Banking Advisor (jeff.bowden47@ comcast.net)

Communications/Marketing/ Associate Membership Debbie Jemison, CAE, Vice President Tammy Squires, Assistant Vice President Robin Lane, Director, Associate Membership Finance and Administration Mark Bennett, CPA, CFO and Vice President

Illinois Bankers Business Services, Inc. Brian Hoffman, President Phil Talley, Vice President, Insurance Services Casey Widholm, Marketing Manager Illinois Bankers Education Services, Inc. Callan Stapleton, Vice President

Marcia Stratton, CPA, Director

Kevin Klug, Assistant Vice President

Marie Ann South, Financial Assistant

Bob Anderson, Manager of Education and Training

Government Relations

Cassie Mattson, Manager, Event Management and FLA

Ben Jackson, Vice President Aimee Winebaugh, Director Kirsten Davis-Franklin, Manager, Grassroots and PAC Sarah Cowan, Membership and Government Relations Assistant

On top of the many programs and events that we have been hosting, like our Washington D.C. Visit, Fall Golf Outing, Women in Banking, Fall Compliance, BankTech and Midwest Bank Leaders Conferences, we have moved our Springfield office to a brand new location on the vibrant west side of Springfield!

FLA Chairman Matt Wyatt Busey Bank, Edwardsville

Two Offices to Serve You! Springfield Office: 800-783-2265 • Chicago Office: 800-878-2265 To connect with our staff, use this email format: firstinitiallastname@ilbanker.com Executive Administration

The IBA has had a particularly busy fall!

Simon P. Yohanan First Bank of Highland Park, Northbrook

ILLINOIS BANKERS ASSOCIATION STAFF DIRECTORY

Michelle L. Gross Vice Chairman State Bank of Bement

MESSAGE

BOARD OF DIRECTORS

Denise Perez, Education Coordinator / Chicago Office Coordinator Amy Sale, Education Assistant Illinois Bankers Group Insurance Trust

David Barbeau, Senior Banking Advisor (dbarbeau@htc.net)

Erich J. Bloxdorf, Plan Administrator

Sarah Cowan, Membership and Government Relations Assistant

Mike Mahorney, Senior Trust Advisor Hillary Meyers, Trust Manager

Editorial Offices 3201 West White Oaks Drive, Ste. 400, Springfield, IL 62704 217-789-9340 FAX 217-789-5410 www.ilbanker.com Debbie Jemison, Editor With the exception of official announcements, the Illinois Bankers Association disclaims all responsibility for opinions expressed and statements made in articles published in Illinois Banker. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal or other professional services. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Illinois Banker (ISSN 0019-185X) is published bi-monthly and is available at a cost of $45 per year for members and $90 per year for nonmembers. Regular issue single copy price is $8.50. Postmaster, send address change to Illinois Bankers Association, 3201 W. White Oaks Drive, Ste. 400, Springfield, IL 62704. News items from members of the Illinois Bankers Association are invited and are due on the first of the month preceding publication. © Copyright 2019 by Illinois Bankers Association (unless individual articles list copyright). Reproduction of any material in the Illinois Banker is strictly prohibited without written permission of the publisher.

Linda Koch

IBA President and CEO

As we all know, embarking on an office relocation is never easy, but it is an exciting time for our staff to start anew! When the IBA changed its logo a few years ago—we wanted it to reflect who we are, and it sure does! We are unapologetically bold and strong, but approachable. We are modern. We are warm, friendly and welcoming. We can be trusted and dependable. Our new office, interior design and style matches our brand! Our move has also created a total refresh. Our signage is modernized and very cool! Our space is brighter, and our interior is consistent throughout, and the technology and phone systems are more efficient. We are particularly proud of our new Center for Banking Excellence, which provides a wonderful, state-of-the-art, inviting space for training, and the adjacent dining room for guests, which is perfect for networking and collaborating. And soon, our artifact collection will be on display to highlight the IBA’s incredible 128-year history. This will be a must-see exhibit! Guests—bankers, associates and partners—will enjoy coming to our office. It is easy to get to, with plenty of adjacent hotels, restaurants and retail opportunities. We are eager to show off our new space. And, there is nothing better than spending time with the IBA staff! In the meantime, our fall programs and events are culminating with great success. Over 60 bankers joined us in Washington D.C., meeting with federal regulators and virtually all Illinois members of Congress and their staff. Golfers spent a beautiful day at the Pekin Country Club, and our many flagship conferences received high marks from attendees. Now that we are settled in, we look forward to closing out the year. We hope to see you at our upcoming Chicago Area Chapter Breakfast, our Bank Counsel Conference, at one of our numerous seminars, or during our many personal bank visits held throughout the state.

The IBA is Proud to Announce Our New Diversity and Inclusion Statement as Adopted by the Board of Directors on September 9, 2019. IBA Diversity and Inclusion Statement The Illinois Bankers Association’s (IBA) mission is to promote a healthy environment for banks in Illinois that, in turn, focus on helping their local communities. Ensuring that a broad mix of individuals with a variety of ideas, differing viewpoints, thought processes, backgrounds and experiences play a meaningful role in all

aspects of the banking industry is critical to the success of IBA and its members. Embracing differences and promoting equity is at the foundation of IBA as an employer and as a trade association. Similar to the banking industry we serve, IBA understands that in order to more fully accomplish our mission, and live our values, we must leverage the diverse backgrounds, skills, knowledge and perspectives

of our members, Board of Directors, vendors and employees. IBA is passionate about fostering a culture for members and employees where everyone feels welcome, included, empowered and valued. This includes attracting and retaining a diverse workforce, and encouraging our staff to promote diversity and inclusion in all internal teams and across external relationships and services.

November-December 2019 •

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COMPLIANCE CORNER The IBA Law Department

QUESTION

Some of our employees have been contacting our customers through Facebook Messenger to request that the customer contact the bank regarding various matters such as discussing delinquent loan payments or advising that a customer’s box of checks is ready for pickup. The messages are not being sent for the purpose of advertising a bank product or service. We ask customers to sign the Telephone Consumer Protection Act (TCPA) consent form at the time an account is opened or a loan is made, but it doesn’t appear to cover Facebook messaging. Are we allowed to contact a customer through Facebook Messenger about an account they have with our bank? If so, does the message need to include a method for the customer to opt out if it does not contain any advertising?

ANSWER We are unaware of any law or regulation that would prohibit contacts with customers through Facebook Messenger or other instant messaging apps, but we believe that this is a risky practice and do not recommend allowing it to continue without substantial safeguards in place to ensure that your bank can view, retain, monitor and control these communications. First, it is unclear whether your customers have consented to being contacted through instant messages. It is unlikely that your bank’s TCPA consent form covers more than phone calls and text messages; while the TCPA covers phone calls and text messages, it is unclear whether it also covers instant messages that can be received on a desktop computer, phone, or other devices, as is the case with Facebook Messenger. However, obtaining your customer’s consent before contacting them does not mitigate all the potential risks and compliance issues posed by your employees’ use of Facebook Messenger to communicate with bank customers. Other potential issues include compliance, reputational and IT risks. The FFIEC’s guidance on social media generally focuses on the use of social media to broadcast messages to a broad audience, rather than on one-on-one communications through instant

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messaging, but it highlights several risks that could apply here. For example, these communications could create privacy or fair lending issues if your bank employees obtain personal information when contacting customers or adding them as “friends” through Facebook Messenger, and contacting customers regarding delinquent loan payments also could risk violations of debt collection requirements, whether from the Fair Debt Collection Practices Act (if applicable) or your institution’s internal debt collection policies. In addition to potential compliance risks, a bank employee’s use of Facebook Messenger may pose unique reputational risks. Bank employees could use a personal Facebook profile to communicate with customers through Facebook Messenger, and their personal profiles or postings “may be viewed . . . as reflecting the financial institution’s official policies or may otherwise reflect poorly on the financial institution.” Also, your institution likely would be unable to directly control what employees post on Facebook through their personal profiles, as Illinois’ Right to Privacy In the Workplace Act generally prohibits employers from accessing employees’ personal online accounts (with certain exceptions). Instant messaging also poses IT and cybersecurity risks. The FFIEC

• November-December 2019

guidance covers IT issues generally applicable to social media, and the FDIC has issued guidance specific to IT issues posed by bank employees using instant messaging. (While the FDIC guidance now is over a dozen years old, we believe that instant messaging through Facebook is similar to the “Public IM” technology discussed in this guidance.) Use of Facebook Messenger on bank computers and/or phones also could expose the bank to the risks of malware being installed and customer information being exposed publicly. Additionally, cybercriminals could impersonate bank customers through Facebook to obtain personal and financial information about your customers. The FFIEC and FDIC guidance include several suggestions for controlling the risks discussed above. For example, the FFIEC recommends that financial institutions address these risks with policies and training, including “methodologies to address risks from online postings, edits, replies, and retention.” The FDIC recommends adopting a policy on instant messaging, along with several IT measures to protect the bank from viruses and other malicious uses of instant messaging. Also, the OCC has noted that banks must maintain customer instant messaging records and ensure that examiners can access such records (albeit in

Illinois’ limitations on employer access to employees’ personal online accounts. Consequently, your bank may wish to set up a business profile on Facebook and limiting use of Facebook Messenger for official bank business to the business profile, if that is possible. We do not recommend continuing to allow employees to use personal

a slightly different context than internal instant messages among bank employees). Even with proper employee training, monitoring and retention practices in place, it may be difficult to control all the risks created when employees communicate with customers through Facebook Messenger, particularly due to

social media profiles to contact bank customers. If your bank does decide to continue contacting bank customers through Facebook Messenger, we certainly recommend providing a method for customers to opt-out of such contacts.

QUESTION

Our bank made a loan to a customer that was under the legal lending limit at the time the loan was made. However, our capital has dropped and now the customer’s loan is above the legal lending limit. What procedures should be followed in this situation?

ANSWER We do not believe that your bank is required to take any corrective action, nor do we think that this loan constitutes a violation of the general lending limit in the Illinois Banking Act.

The general lending limit for an Illinois state bank under Section 32 of the Illinois Banking Act is applied at the time a loan is extended, and a loan “will not be deemed a violation . . . if there is a subsequent decrease in the

[lending] limit.” In other words, if a loan was under the legal lending limit when it was extended, a bank is not required to take any corrective action even if the lending limit later is decreased.

QUESTION

Our current policy is to require out-of-state businesses to file with the Illinois Secretary of State before establishing an account with us, if they are doing business in Illinois. Is this a requirement in Illinois?

ANSWER Yes, generally businesses that “transact business” in Illinois must apply for a foreign business

registration with the Illinois Secretary of State. Note that a business will not be considered to be “transacting

business” in Illinois if it merely maintains bank accounts in the state without otherwise transacting business in the state.

About the IBA Law Department Our IBA Law Department provides many resources to help our bank members meet their compliance challenges, including a toll-free Compliance Hotline (1-800-GO-TO-IBA) and a dedicated compliance website (www.GoToIBA.com). We also publish a free weekly e-newsletter highlighting the latest regulatory developments, select recent Q&As, and other useful information – let us know if you want to subscribe! Note: This information does not constitute legal advice. You should consult bank counsel for legal advice, even if the facts are similar to those discussed above.

November-December 2019 •

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COMPLIANCE CORNER

WASHINGTON UPDATE By Rob Nichols, President and CEO, American Bankers Association

QUESTION

Are we authorized to put a stop payment on a cashier’s check payable by our bank that has not yet been submitted for payment? We discovered that one of our customers had purchased the cashier’s check as the result of a scam.

ANSWER No, we do not believe that your bank may stop payment on the cashier’s check without risking liability for the check. The Illinois Supreme Court has held that a cashier’s check is the equivalent of cash. As a general rule, once a cashier’s check enters the stream of commerce, the issuer (your bank) is liable under the Uniform Commercial Code (UCC) if it refuses to honor the cashier’s check when presented. We are not

aware of any Illinois court cases that permit an exception to this general rule where a third party fraudulently induced a bank’s customer to purchase a cashier’s check. If your bank suspects the financial exploitation of an elderly customer, state law encourages you to report the activity to the Illinois Department of Aging, and federal law likely requires you to file a suspicious activity report (SAR).

The Financial Crimes Enforcement Network (FinCEN) requires banks to file a SAR for suspected elder financial exploitation when a transaction aggregates at least $5,000 and the bank knows, suspects or has reason to suspect the transaction involved criminal activity. We also note that both state and federal privacy laws provide safe harbors for banks when reporting suspected elder financial exploitation.

CREDIT UNIONS FREE RIDE

Credit Unions

$218 Although they portray themselves as mom and pop shops for people of modest means, today credit unions are aMILLION $1.4 trillion industry, with many indistinguishable from banks. The BIG difference – they don’t pay federal income taxes, depriving the U.S. Treasury Net income of the 16 largest federally of roughly $2 billion every year.

End the Free Ride

Large, aggressive CUs now enjoy virtually all the powers of commercial banks thanks to Illinois Credit Unions’ Free Ride permissive rulemaking from their federal regulators, all without being subject to the Federal Income Taxes Paid by Credit Unions same taxation as banks and thrifts.

insured CUs in Illinois - Estimated lost tax revenue: $46 million

Redefining ‘Banker’ What does it mean to be a banker today? Those of you reading this column have a good idea of the variety of jobs held by the 2 million women and men who work for America’s banks. But many would-be bankers don’t. That lack of awareness can be an obstacle to recruiting talent in an increasingly tight job market, particularly among younger generations whose “bank” is their smart phone and who therefore may have less personal exposure to actual bank employees. To address that, ABA’s Emerging Leaders Council recommended a series of profiles of real-life bankers in a range of roles and at various stages in their careers. They believed that no one can be a better ambassador for careers in banking than those who are currently finding success and fulfillment in banking roles. They were so right.

$5,092

Federal income taxes paid annually by an Illinois resident making an average of $60,960 per year.

There you will find video profiles of several talented individuals who are proud to be bankers and who will make you proud, too.

These individuals and the others profiled came to banking by different paths. Two transitioned into banking after serving in the military.

FEDERAL INCOME TAXES PAID IL Banks: $1.8 billion IL Credit Unions: $0

Alliance CU would have paid $19.9 million in taxes during 2017 had it paid its fair share In Illinois, only 8% of mortgages originated went to low-income borrowers, compared to 73% of mortgages originated going to middle and upper-income borrowers, according to the most recent Home Mortgage Division Ac (HMDA) data.

$1.4 Trillion Industry

CUs portray themselves as mom and pop shops for people of modest means. Today credit unions are indistinguishable from banks. The BIG difference – their federal income tax exemption deprives the U.S. Treasury of over $2 BILLION EVERY YEAR.

Tax-Paying Banks Gone Since 2018, there have been over 3 dozen reported deals of CUs buying banks, including 3 in Illinois.

Zero $ Paid

Illinois’ largest CU, Alliant, had over $62 million in net income and would have paid nearly $13 million in taxes during 2018 had it paid its fair share.

“There’s so much opportunity here. This is where I want to be. I want to be part of this change in making things better for customers in giving broader access, and developing tools that can help people save, small businesses grow and communities develop,” says Ashley Nagle Eknaian, chief digital strategist and head of Eastern Labs at Eastern Bank.

Visit aba.com/CareersInBanking and you’ll see what I mean.

Federal Income Taxes Paid Annually by an Illinois Resident Making and average of $60,960 per year.

Illinois Banks: $1.8 Billion

“It’s a satisfying feeling at the end of the day to be driving down the road and see a new building or a new business or someone out with a new farm machine and know they came to you to help with that,” says Tyler Stevenson, commercial and agribusiness lender with First National Bank of Omaha.

“Banking is wonderful because you get to see the impact that you have on the community around you.... That gratification is enough to just say, wow—I’m doing something important,” says Julio Figueroa, who within five years advanced from teller to security officer at Windsor Federal Savings.

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They work in functions ranging from digital strategist to agribusiness lender and from head of retail banking to communications director. They also work at banks of all sizes, some in big cities, others in small towns. And no matter what role they serve in, these bankers believe the opportunity, impact and rewards associated with their jobs are hard to beat.

One started as an intern and quickly found he had tremendous professional growth potential. Yet another spent time in the fashion business. Their backgrounds, roles and testimonials shatter banker stereotypes and show what it really means to be a banker in today’s modern world. And they are a wonderful complement to ABA’s America’s Banks website (aba.com/AmericasBanks) that tells the story of banking today and the industry’s economic impact. We couldn’t have asked for more compelling spokespeople for our industry. When we asked these banking leaders to describe their careers in one word, they answered with adjectives like, “life-changing,” “impactful,” “fulfilling,” “incredible” and “entrepreneurial.” Our job now is to let the world hear their stories, and we’re counting on you, the state associations and social media to help. Please consider showing the collective or individual videos to job applicants at your bank and at local job fairs. Share them with local colleges and career placement offices, and encourage your employees to do the same. These videos, combined with all that banks individually and collectively have to offer—including training, professional development and community involvement—make a compelling case for banking as a career choice. And the more we can help talented individuals find their future in banking, the more we, too, will be rewarded. E-mail Rob Nichols at nichols@ aba.com.

End the Free Ride Resources: ilbanker.com/Advocacy/Credit-Unions

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Protecting Your Institution From Check Fraud BY Jill Cacic, Abrigo

Three Emerging Check Fraud Trends

Check fraud still appears in traditional forms, including basic counterfeit checks, forging checks, paperhanging (writing a check from a closed account) and check kiting (“floating” a check from one low- or no-balance account to another to cover payments). Yet, emerging check fraud trends are important for you and your staff to be aware of in order to protect both your financial institution and your customers.

Lottery/Sweepstake Winnings: Scammers send a letter

saying you won a lottery or sweepstake with a check for a couple of thousand dollars. All you have to do is deposit the check into your account, keep a small part for yourself and wire the rest of the amount back. It’s a win-win, right? It would seem, but only until the check is marked as fraudulent and your account is overdrawn by a few thousand dollars.

hen was the last time you wrote a check? We’ll wait . . .

While you may not have written a check in a while, businesses still rely on checks as one of their top forms of payment and are a lucrative source for check fraud. Those accounts tend to have more money and/or higher limits than personal accounts. There is also usually more than one signee assigned to those accounts, making them more susceptible to fraud. Additionally, the access to new technology to create realistic counterfeit checks continues to make check fraud one of the largest forms of fraud in the world. (Now would also be a good time to look for your check book. Fraudsters don't need to make a counterfeit version if they have the real thing.) According to the ABA’s 2017 Deposit Account Fraud Survey Report, banks stopped $17 billion in • 10 •

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fraudulent transactions in 2016, 35% of which were check fraud. (Financial institutions also stopped almost $6 billion of that $7 billion from getting paid out, so give yourselves a pat on the back!) The 2017 AFP Payments Fraud and Control Survey reported 75% of financial institutions experienced check fraud in 2016, up from previous years. Over 31% of those institutions said they experienced over 15 incidents of check fraud. One would think as technology improves so would the safeguarding features around monetary transactions. Mobile depositing of checks, for example, has actually made check fraud easier. A growing fraud issue is duplicate deposits of those checks. Fraudsters cash the same check twice – once via mobile deposit, and once in the bank branch months later, making off with double the money if institutions aren’t vigilant. As mentioned before, these scammers are also using high-tech devices to their advantage, printing fraudulent checks from top-of-the-line printers making them look legit to the untrained eye.

How do you prevent this at your institution? If a customer comes in with a check like this, have your tellers/front of house start a conversation with him/ her explaining the latest scams going around. They are especially susceptible to this type of scam if their account balance is normally well below the dollar amount on the check. Who doesn’t want to get rich quick? Also, pay attention to the physical check. Where is the origination address? Does this match the business on the front of the check? Are the routing numbers correct? Are there physical signs of alteration, including stains or discoloration? BAM+ fraud scenarios run over 30 scenarios to prevent lottery scams, including sudden check deposit activity, real-time deposited check fraud detection, and ACH credit amount spikes.

Business Email Compromise: According to AFP’s

survey, 34% of all BEC scams targeted check fraud. Criminals send a fake or phishing email to a member of the finance team at a corporation either pretending to be a high-level executive or presenting a fake invoice. Often times the scammers will spend a few days “grooming” this employee to persuade him/her the claim is real. Eventually, the employee sends back secure financial information, allowing the criminal to forge a business check or process a wire transfer. How do you prevent this? IT departments are becoming increasingly vigilant against these types of scams, but that doesn’t mean they stop 100% of

them. Pay attention to business checks over a certain threshold amount or when there is a spike in the number of checks issued over a certain period.

Check Overpayment Scams:

A customer is selling his/her car online or in the local classifieds. They get a check in the mail from the buyer for $1,000 over the asking price. When he/she calls the buyer to alert them of the overpayment, they say it was an honest mistake and ask him/her to wire them back the extra $1,000. So your customer comes in with the check and starts a wire for the extra money. Then the check comes back as fraudulent, the scammer made a quick $1,000 and your customer depleted his/her account. How do you prevent this? When a customer comes in to deposit a large check and make a wire payment, have your front of house strike up a conversation and see where the check came from. If it is over the CTR filing thresholds, you will have to file paperwork on it anyway, so the conversation is necessary. If it seems like this customer is a victim of an overpayment scam, suggest he/she return the check and ask for a new one with the correct amount. These are just a few emerging fraud trends on a list that grows daily. As technology evolves so do the ways fraudsters conduct their illicit businesses and approach victims. Tellers can stop most check fraud at the teller line by spotting a counterfeit or fake check.

How do your tellers know what to look for when it comes to check fraud? When accepting a physical check, take a close look at the check. Pay attention to the check numbers. Most scammers use low numbers on personal checks (101-400) and higher numbers on business checks (1001-1500). Verify the customer’s address, look for signs of discoloration or stains from erasures or attempts at altering printed info. Visit FakeChecks. org for a fun way to test your staff’s knowledge of counterfeit checks. At the end of the day, trust your intuition. If something feels off, take a second to investigate it a little deeper. Ask another question; take a harder look at the check. You may just save a customer a very real headache … and thousands of dollars. About the author: Jill Cacic is senior public relations specialist at Abrigo. IBA Associate Member

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Growing Deposits? Consider these 4 keys areas by Brian Cox, Detalus Advisors

Your bank has decided to actively pursue growing core deposits. Smart choice. You’ve gone through the exercise of designing an effective deposit strategy plan: defining your target depositors, setting your goal amount and formulating deposit products geared toward your target depositor. And now you’re ready to execute your plan. So, what’s next? Here are four key areas to focus on:

1 Consider your customer. Knowing your target customer is key to knowing how to get their deposit business and what products to focus on. For example, according to a recent Bankrate survey, 69 percent of 18- to 29-yearolds aren’t very familiar or are not at all familiar with CDs. That’s significantly higher

than customers in the 50- to 64-year-old range. So, you shouldn’t expect high CD rates to attract young new depositors.

2 Consider your rates. Rates on deposit accounts are the single most important thing to growing deposits. Customers will even disregard a poor user experience for a better rate. Assuming your deposit product and features are what your target customer is looking for, your rates must be above your competitors’ to impel your target customer to make the switch. To avoid cannibalizing other low-rate deposit products, have a shelf of products at the ready. You can roll out a new deposit account very similar to an existing account and place an abovemarket rate on it. After you’ve met your

goal for core deposit growth, you can lower the rate in line or slightly below the market rate. This worked well for fintech company Wealthfront, which earlier this year upped its interest rate on its cash account to 2.51 percent from 2.29 percent. The company attracted more than $1 billion in deposits within three months. It has since adjusted its rate.

3 Consider ease of use. In the critical new-account opening stage of a banking relationship, speed and convenience are imperative. Your process should take no longer than five minutes and data entry must be limited by utilizing tools such as photo ID capture. Everything can now be accomplished digitally. Once you ask your customer to complete something in person or via mail, you are forcing them to not utilize your services. Additionally, strive to facilitate the new account opening process through your target depositor’s preferred channels. Seventy percent of millennials, for example, say that it’s important that their bank or credit union offer a mobile account opening process, according to a Harris Poll survey.

4 Consider your marketing. You can’t offer a compelling rate and not tell anyone. Word of mouth and rates published in the local newspaper are not enough. You must invest in an experienced marketing team with a sustainable budget and measurable goals—because your competitors are.

About the author: Brian Cox is a director and portfolio manager in the institutional group at Detalus Advisors, a financial services firm that focuses on balance sheet strategy and investment management for financial institutions. IBA Associate Member

1. Consider your customer. 2. Consider your rates. 3. Consider ease of use. 4. Consider your marketing.

Detalus Advisors, LLC is a registered investment adviser.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.  Investments involve risk and, unless otherwise stated, are not guaranteed.  Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

These four key areas can mean the difference between success and failure in growing your core deposits. • 12 •

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November-December 2019 •

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Agricultural Banks Support Rural Illinois Illinois’s 200 Farm Banks1 posted another strong year in 2018. Total farm loans at farm banks increased by 5.01 percent to $8.6 billion, up from $8.2 billion in 2017. Nearly 8 percent of all farm loans at farm banks in the United States ($108 billion) came from Illinois farm banks. Farm real estate loans grew at a faster rate than farm production loans. Outstanding farmland loans rose by 6.41 percent, or $309 million, to $5.1 billion. Farm production loans grew at a pace of 3.00 percent, or $101 million, to a total of $3.5 billion.

Agricultural Banks Support Rural Illinois ILLINOIS AG BANKS MADE

$ 8.6 BILLION FARM LOANS

Accounting for nearly one-third of all loans by Illinois farm banks ($24.9B) (as of December 2018)

Accounting for nearly

of the

$ 108 BILLION in farm loans extended by ag banks

$ 3.5 BILLION

Delinquencies were higher than the median for both farm banks in the Cornbelt, and for farm banks nationally. With a high dependency on soybean exports and record rain, Illinois farmers could face continued stress in 2019. Due to stress from tariffs and flooding, return on assets and return on equity at Illinois farm banks lagged regional and national benchmarks. Employment growth in Illinois farm banks was strong— adding 224 new jobs in 2018—Illinois farm banks employed 8,610 men and women in 2018. The 200 farm banks in Illinois operate 652 branches.

AG PRODUCTION LOANS

$ 5.1 BILLION

SOLID PERFORMANCE Continue to meet the needs of farmers and ranchers

FARM REAL ESTATE LOANS (a Year-over-Year increase of nearly 6.4%)

200

Illinois Ag Banks

652

Branches

8,610

Employees

“The farm family is the foundation of our local economy, providing bodies of leadership for government and volunteers for numerous projects and clubs.” Jason Vanlanduit, VP/Sr. Loan Officer Central Bank Illinois

Farm banks are defined by the American Bankers Association as banks whose ratio of domestic farm loans to total domestic loans are greater than or equal to the industry average, in 2018 this was 16.07 percent. Studies before 2012 did not include banks with more than $1 billion in assets, nor savings and loan associations.

aba.com

For questions about this summary, contact ABA’s Hugo Dante, hdante@aba.com, Research Associate, Economics and Policy

• 14 •

• November-December 2019

November-December 2019 •

• 15 •

WELCOME

2020 Scholarships Exclusive to IBA Member Banks

IBA Future Leaders Alliance (FLA)

One-Year Program Beginning in February 2020 Two Scholarships Awarded

Graduate School of Banking Human Resource Management School

March 29 – April 3, 2020 | University of Wisconsin − Madison One Scholarship Awarded

ABA Stonier Graduate School of Banking

June 4-11, 2020 | University of Pennsylvania, Philadelphia One Scholarship Awarded

Graduate School of Banking

August 2-14, 2020 | University of Wisconsin − Madison Two Scholarships Awarded

Apply Online Today! ilbanker.com | 217-789-9340 | education@ilbanker.com

• 16 •

• November-December 2019

Community Bank Deposits: Where have they gone?

anks—especially small banks—have traditionally made money by accepting deposits from local customers and then lending the money at a higher rate. The difference—called the net interest margin—was and is used to: 

By Julie Stackhouse, Executive Vice President, Federal Reserve Bank of St. Louis

• Cover overhead, other expenses and provisions for loan losses  • Pay taxes  • Reward investors with dividends

Most noted market competition, particularly from other depository institutions that had local headquarters or branches. Others pointed to internet competition, including competition from banks elsewhere in the country. Still others cited nonbank financial competitors, including the prevalence of apps that provide banking-like services. Deposits generated through those apps are held in banks, but they may be far away from the app user’s location. As one survey respondent put it, “Apps remove the need for bank products other than as holding tanks for short-term cash deposits.”

That model worked pretty well for decades. However, growing competitive and technological changes are altering the banking landscape. And the changing behavior of “core” depositors is affecting small-bank balance sheets.

Core Challenges So what is happening and why? Community bankers surveyed by state bank commissioners as part of the 2019 Community Banking in the 21st Century research and policy conference cited several factors for the challenge of both holding onto core deposits and keeping their costs down.1

The funding challenges facing traditional banks are not limited to growing competition. Shrinking rural markets also make it difficult to attract and retain traditional core deposits. Many rural areas are facing an out-migration of population, reducing the local deposit base. And some bankers reported November-December 2019 •

• 17 •

that younger consumers—in addition to being more comfortable with new technologies—are not saving as much or in the same way as their parents and grandparents.

New Funding Sources, New Risks The change in deposit competition means new risks for many small banks. Interest rate risk tops the concerns, as deposits generated through nontraditional means are typically more sensitive to changes in interest rates, particularly rising rates. Bankers also face more uncertainty with regard to deposit longevity. Deposits may not “stick” with a bank if the depositor finds a better deal elsewhere.

For that reason, banks must more carefully plan to meet unexpected deposit runoff. This is especially important should a bank experience financial difficulties.

What about the Future? Banks—as well as bank regulators—are adapting to the new funding environment but are concerned about the unintended consequences should these challenges grow. This includes a possible acceleration of industry consolidation. In the meantime, the consumer holds the key! Notes and References 1 "Community Banking in the 21st Century (PDF)." Federal Reserve System, the Conference of State Bank Supervisors and the Federal Deposit Insurance Corp., Oct. 1-2, 2019.

2019 Illinois Bankers Compensation Report Over 100 Illinois banks projected their salary increases, health insurance costs, director benefits and more.

CONGRATULATIONS 2019 GRADUATE FROM ILLINOIS

We congratulate you on completing the rigorous 25-month program and joining the more than 20,000 alumni who have gone on to leadership positions in their organizations, associations and the financial services industry. Best wishes for continued success!

William Alexander First National Bank in Olney Olney

Brad Ford Blackhawk Bank & Trust Milan

Mark LaPlantz First National Bank of Waterloo O’Fallon

Michelle Blackwell Peoples Bank & Trust Pana

Isabel Guzman First Eagle Bank Hanover Park

Darrell McDowell

Sarah Cansino Pioneer State Bank Earlville

Robin Hanson Devon Bank Chicago

Chris Ochs

Emily Clark First National Bank in Olney Olney

Austin Hemberger Alliance Community Bank Athens

Matt Opsal

Jordan Crain Old Second National Bank Aurora

Jeremy Howard First Mid Bank & Trust Peoria

Matt Seman

John DeFreitas Town and Country Bank Springfield

Steve Johnson First National Bank of Nokomis Nokomis

Matt Smith

Cheyanne Doyle Community Bank Orangeville

Karen Kerr Peoples Bank & Trust Pana

Jamey Tracy

Valerie DuCharme Saint Charles

Don Knezic Office of the Comptroller of the Currency Chicago

Justin Witek

Jake Fleming Security National Bank Witt

REPORT FOR ILLINOIS BANKS

Compensation by Asset Size

Compensation by FTEs

Educating Professionals, Creating Leaders

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Home State Bank, N.A. Crystal Lake

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ORDER YOUR REPORT: ilbanker.com 217-789-9340 5315 WALL STREET #280, MADISON, WI 53718 • PH. 800-755-6440 • GSB.ORG

• 18 •

• November-December 2019

November-December 2019 •

• 19 •

PREFERRED VENDOR

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• November-December 2019

Against growing pressure to provide faster payments, more convenience, and increasingly competitive rates, bank executives are stretched to find resources that can quickly react to the ever-broadening range of disruptive changes to the financial services industry. Addressing this need for specialized expertise and data, Illinois Bankers Business Services (IBBS) Board of Directors

—selected by bankers for bankers —is pleased to announce that Strategic Resource Management (SRM)was recently approved to deliver quality vendor management and process efficiency strategies to IBBS members. Founded in 1992, Strategic Resource Management, Inc. (SRM) is an independent professional services firm that draws on extensive experience, market insight, and a robust, proprietary benchmarking

database to help banks across North America. By lowering costs, enhancing revenues, and automating costly manual processes, SRM has consulted for over 700 financial institutions who have benefited from the firm’s involvement in critical, complex decisions for payments, digital banking, core processing, artificial intelligence,and operational cost control.

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November-December 2019 •

• 21 •

PREFERRED VENDOR “Our firm is composed of seasoned financial services professionals whose careers have included successful tenures at banks, major card networks, payment companies, digital banking vendors, core providers, and many other companies that serve the industry. We look forward to working with IBBS and the Illinois Bankers Association to

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benchmarks, and aligning supplier partnerships with a focus on quality and long-term stability.

Having achieved $2.2+ billion in value for clients in reduced operating expenses and optimized efficiency, SRM specializes in finding openings for growth and savings initiatives, aligning expenses with industry

To learn more about SRM and their services, please contact Brian Hoffman at bhoffman@ ilbanker.com or Uma Zielinski, SVP at SRM, at uzielinski@ srmcorp.com or 614-829-7686.

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Preferred Service of the Illinois Bankers Association • 22 •

• November-December 2019

November-December 2019 •

• 23 •

EVENT HIGHLIGHTS

Washington Visit

September 9-11, Marriott Marquis, Washington, D.C. Our recent visit to Washington D.C. was a tremendous success! The largest

group of bankers in recent history descended on the U.S. Capitol to share their concerns with legislators and regulators. Our delegation was a great mix of first-time attendees and seasoned veterans that delivered a strong and impactful message. Our top priorities were ending the credit union tax exemption, creating a transparent framework for banking legal marijuana businesses, and delaying the Current Expected Credit Loss (CECL) accounting standard until an economic impact study is completed. The delegation also met with officials from the Consumer Financial Protection Bureau (CFPB), the Financial Crimes Enforcement Network (FinCEN), the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC) to share concerns on a myriad of issues.

James Hannon, Charles Hall, Dave Feldhaus, Kathleen Cleven and Dane Cleven meeting with Congressman Quigley.

The event also featured prime networking opportunities. Attendees explored the Historic Decatur House, the first private residence in the White House neighborhood.

Illinois Bankers meeting with Congressman Lipinski.

WASHINGTON VISIT

2019

We also thank our incredible sponsors – Associated Bank, NA, BankTalentHQ, CIBC, Citibank, N.A., CLA, Community Mortgage Partners, Equias Alliance, and the Federal Home Loan Bank of Chicago! The success of this trip would not be possible without your support.

Congressman Bost meeting with bankers from Bank & Trust Company, Murphy-Wall State Bank, First National Bank of Waterloo, First National Bank of Steeleville and The Village Bank.

THANK YOU TO OUR SPONSORS!

Micah Bartlett, Amanda Garnett and Don Krager meeting with Congressman LaHood.

We'll continue the momentum by holding consistent meetings with our members of Congress. There’s no better way to understand the daily burdens of compliance and over-regulation than seeing it firsthand. If you are interested in hosting an in-bank meeting with your congressional representative please connect with Ben Jackson (bjackson@ilbanker.com) or Aimee Winebaugh (awinebaugh@ilbanker.com).

WASHINGTON VISIT

We have already started to see our advocacy efforts at work, as 16 out of 18 members of the Illinois House delegation voted in support of the Secure and Fair Enforcement (SAFE) Banking Act of 2019–which provides a pathway for banking state-approved cannabis businesses –and Senator Durbin has now joined Senator Duckworth as cosponsor of the Senate version of the SAFE Banking Act. A huge thank you to those who attended and a congratulations on a job well-done!

IBA past chairmen Gary Hemmer, Charie Zanck, Micah Bartlett and Marty Davis enjoying the rooftop reception after a long day on Capitol Hill. • 24 •

• November-December 2019

November-December 2019 •

• 25 •

EVENT HIGHLIGHTS Ag Banking Conference • August 21-22, Crowne Plaza, Springfield

Dr. Davie Kohl, Virginia Tech, visits with attendees following his presentation on managing expectations.

Dan Manternach, President, Perfect Fit Presentations, LLC, opens the conference with “Likely Price Range for Illinois Crops and Livestock.”

The event closed with Debbie Peterson who spoke to the group on successful mentoring.

AG BANKING CONFERENCE

Doug Johnson, Director with Moody’s Analytics, addresses the crowd of nearly 200 Illinois ag bankers.

The IBA’s Ben Jackson talks with IL Dept. of Agriculture Director John Sullivan about the changing landscape of Illinois agriculture. • 26 •

• November-December 2019

November-December 2019 •

• 27 •

EVENT HIGHLIGHTS Fall Golf Outing • September 16, Pekin Country Club

Everyone enjoyed the rapid-fire prize drawings during the evening reception.

Ben Castronovo and Jeff Kosobucki, both from Central Savings, f.s.b. had a great time with Phil Hayes, Equias Alliance. Tom Schlink, Farmers & Mechanics Bank, was the big Mulligan drawing winner for $50 cash.

Thank you to our valued sponsors! Let’s Talk Banking

Rhonda Houzenga, Tom Schlink, Tom Dunker and Trent Cox, Farmers & Mechanics Bank

Gary Genenbacher, BKD, LLP,Chris Vandeventer and Kevin Rogers, Philo Exchange Bank, and Dennis Romero, BOK Financial Institutional Advisors, said they kept it in the short grass—ok, guys!

FALL GOLF OUTING

CyberSecurity

800-288-4842 www.mybankersbank.com

The Spitz family brings home the winning prize again! Tim Spitz, Midland States Bank; Matt Dallas; Jon Spitz, Washington Savings Bank and Tyson Spitz • 28 •

• November-December 2019

FALL GOLF OUTING

CyberSecurity

Pekin Country Club Monday September 16

November-December 2019 •

• 29 •

EVENT HIGHLIGHTS Women in Banking Conference • September 24-25, Crowne Plaza, Springfield

Cedric Thurman with the Federal Home Loan Bank explains the importance of diversity and inclusion as a business strategy during a breakout session.

Steve Thomas’ message to the group was about thinking outside of the box.

Traci Brown helps the audience decipher whether someone is telling the truth or not by looking at their body language.

Bank Midwest’s Suzi Kalsow was a hit with her presentation on “Fierce Leadership.”

Attendees were encouraged to bring toiletry and personal items to donate to the Sojourn Shelter for victims of domestic abuse. During the evening reception, they filled “beauty bags” with the donated items and wrote words of encouragement on the bags.

Women’s Conference

The First Midwest Bank team takes time out for a group photo.

Carol Jo Fritts, First Neighbor Bank, was awarded the first ever IBA President’s Award, and members of her bank were on hand to surprise her.

Member FDIC

THANK YOU TO OUR SPONSORS!

WOMEN IN BANKING CONFERENCE

IBA President and CEO Linda Koch discusses her time with the IBA and provides an overview of our many member benefits.

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FARMERS STATE BANK OF HOFFMAN Farmers State Bank of Hoffman has announced that after 33 years of service, President and CEO Glenn Knolhoff retired from the bank effective September 1, 2019. While retiring from day to day responsibilities, Knolhoff will remain on the Board of Directors for Farmers State Bancorporation, Inc., the bank’s holding company. The bank has also announced that Steve Kelso has been named president and chief executive officer. Kelso was also named to the Board of Directors in April of this year.

BANKERS’ BANK Steve Schnering has been promoted to assistant vice president. Caja

Barrera

HICKORY POINT BANK Justin Richards has been named assistant vice president, responsible for managing the Mt. Zion and ADM Banking Centers.

FIRST BANK CHICAGO, A DIVISION OF FIRST BANK OF HIGHLAND PARK Marcus Frye has joined the bank as VP/commercial real estate, and Matthew Caja has joined the bank as commercial real estate administration officer. FIRST BANK OF HIGHLAND PARK David Barrera has been promoted to AVP/loan operations and Waylet Harper has been promoted to Loan Operations Officer.

Jacksonville

TOWN AND COUNTRY BANK Meri Jones has been joined the bank as branch manager for the company’s Jacksonville location.

Mattoon

FIRST MID BANK & TRUST Jason Crowder has joined the bank as senior vice president, general counsel and office out of Mattoon and Peoria.

Harper

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Southern IL

Mt. Zion

First Financial Bank Nick Hill has joined the bank as manager of the First Financial Bank North Vermilion Banking Center.

Schnering

Linda Lease - 317.504.2007

Danville

Jones

Tom Thompson - 224.775.5456 Northern IL

Madison, WI • Chicago, IL • Des Moines, IA • Indianapolis, IN

Asset Liability Mgmt • Bank Cards • Cash Letter • Commercial • International • Investments • Leasing • Mortgages • SBA 7(a) • Wealth Mgmt

• 32 •

• November-December 2019

November-December 2019 •

• 33 •

IBA BOARDS & COMMITTEES Current as of 10-1-19

Agricultural Advisory Committee Chairman Scott Rhoads, Carrollton Bank, Carrollton Vice Chairman William Gleason, The Leaders Bank, Oak Brook Brian Ash, First National Bank and Trust Company, Clinton

Courtney Olson, First Bank of Highland Park, Highland Park

Ron Hobson, Midwest Independent Bank, Jefferson City, MO

Joshua Shofner, First National Bank & Trust Company, Clinton

J.R. Hock, Grundy Bank, Morris

Jack Vainisi, Forest Park National Bank & Trust Company, Forest Park

Michael Bavery, Fortress Bank, Carthage

Associate Member Committee

Christopher Breyman, Grundy Bank, Morris

Kathleen Berman, Graduate School of Banking, Madison, WI

Ray Bunch, Citizens Bank, Macomb Kenneth Emme, The Havana National Bank, Havana Mark Govednik, Pioneer Bank, Earlville John Kahle, Busey Bank, Le Roy Ryan Martz, Forreston State Bank, Forreston Kevin Rogers, Philo Exchange Bank, Philo Rick Schramm, Illinois National Bank, Springfield

Craig Callahan, Floodplain Consultants, Inc., Brownsburg, IN

Scott Bland, First Neighbor Bank, N.A., Toledo Sarah Dolan, Quad City Bank and Trust Company, Forest Park Hayden Gardiner, South Porte Bank, Marion Charles Griffin, CIBC, Chicago

Ginny Wagner, Itasca Bank & Trust Company, Itasca

John Garey, Allied Solutions, LLC, Grafton, WI Ron Hobson, Midwest Independent Bank, Jefferson City, MO Sue Kling, Promontory Interfinancial Network, LLC, Arlington, VA

Bill Zumvorde, Profit Resources, Inc., Grayson, GA

Chris Barrett, Petefish, Skiles & Co., Virginia

Diane Wagner, Bank of America, Chicago

Chairman Linda Boyer, Inland Bank and Trust, Oak Brook

Richard Talbert, The Fairfield National Bank, Wayne City

Nellie Andriyanova, Bankers Healthcare Group, LLC, Syracuse, NY

Marilyn Titone Schaefer, Illinois National Bank, Springfield

Compliance Division Advisory Committee

Benjamin Syfert, First Mid Bank & Trust, Tuscola

Chairman Michelle Gross, State Bank of Bement, Bement

Michael Thies, Midland States Bank, Effingham

George Dean Callas, Invictus Group, Bronx, NY

Chris Milne, Federal Home Loan Bank of Chicago, Chicago

Annual Conference Committee

Chelsey Koester, Midland States Bank, Effingham

Audit Committee Chairman Rick Francois, American Community Bank & Trust, Woodstock T. J. Burge, Community Partners Savings Bank, Salem

Vice Chairman Mary Schroeder, Pan American Bank & Trust, Melrose Park

Barbara Yusko, First Midwest Bank, Plainfield

Kara Austin, Murphy-Wall State Bank and Trust Company, Pinckneyville

Finance and Investment Advisory Committee

Greg Bushue, Washington Savings Bank, Effingham

Chairman Gretchen Murphy, First Mid Bank & Trust, Decatur Robert Cormier, Home State Bank, N.A., Crystal Lake David Doedtman, Washington Savings Bank, Effingham William Gleason, The Leaders Bank, Oak Brook

Trent Cox, Farmers & Mechanics Bank, Galesburg Christopher Hushka, CIBC, Chicago Ryan Martz, Forreston State Bank, Forreston Bethany Shaw, Peoples National Bank, N.A., Harrisburg

Brien Leahy, First Bank of Highland Park, Highland Park Kathleen Narusis, Home State Bank, N.A., Crystal Lake Rebecca Novak, BMO Harris Bank, N.A., Chicago Kevin Olson, Grundy Bank, Morris Mark Peterson, First Midwest Bank, Vernon Hills Jeff Rabren, Regions Bank, Birmingham, AL Jaclene Robinson-Ivy, The Northern Trust Company, Chicago Joan Saenz, Fifth Third Bank, Washington, DC Pamela Sharar-Stoppel, Wheaton Bank & Trust Company, Wheaton

Illinois Bankers Insurance Trust Board of Trustees

Thomas Chamberlain, Iroquois Federal Savings & Loan Association, Danville

Chris Schaefer, Carrollton Bank, Carrollton

Chairman Dane Cleven, Community Savings Bank, Chicago

Trent Cox, Farmers & Mechanics Bank, Galesburg

Michael Wyffels, Quad City Bank and Trust Company, Davenport, IA

Michael Cripps, The First Bank and Trust Company of Murphysboro, Murphysboro

Women in Banking

Lenore Erickson, First Bank of Highland Park, Highland Park

Chairman Candee Arvin, Illinois National Bank, Springfield

Jeffery Fauver, Catlin Bank, Catlin

Cynthia Carr, Midland States Bank, Effingham

Joshua Huseman, First National Bank, DeKalb

Jean Claude, Central Bank of St. Louis, Saint Louis, MO

Rachael Maurer, United Community Bank, Springfield

Patty Fletcher, Bank & Trust Company, Raymond

Matthew Wyatt, Busey Bank, Collinsville

Neena Frisch, Busey Bank, Edwardsville

Melissa Walter, LincolnWay Community Bank, New Lenox Diana Whitson, Farmers & Mechanics Bank, Galesburg Kathy Williamson, Bank of Farmington, Farmington Danielle Wisely, Busey Bank, Edwardsville Illinois Bankers Business Services (IBBS) Chairman P. David Kuhl, Catlin Bank, Champaign Vice Chairman Daniel Hollowed, Cornerstone National Bank & Trust Company, Palatine Brant Ahrens, CIBC, Chicago Bill Barlow, Carrollton Bank, Edwardsville

Allison Bartels, The Leaders Bank, Oak Brook

Robert Parker, TheBANK of Edwardsville, Edwardsville

Kathy Thompson, CIBC, Chicago

Meschelle Brand, MurphyWall State Bank and Trust Company, Pinckneyville

Jeffrey Snyder, Forreston State Bank, Forreston

Chairman Betsy Johnson, Forreston State Bank, Forreston

Micah Bartlett, Town and Country Financial Corporation, Springfield

Ed Cannon, The First National Bank of Beardstown, Beardstown

Fintech Committee

Caeri Chiaro, Illinois National Bank, Chatham Kylee Durbin, Town and Country Bank, Springfield Kimberly Ekwemoha, CIBC, Chicago

Richard Knebel, The Bradford National Bank, Greenville

Luke Hawkins, Community State Bank, Galva Rebecca Ketter, Stillman BancCorp N.A., Stillman Valley

Chairman Larry Kallembach, Heartland Bank and Trust Company, Bloomington Micah Bartlett, Town and Country Financial Corporation, Springfield Jo Ann Boylan, First Midwest Bank, Chicago Tom Gihl, Illinois National Bank, Springfield Dean Haacker, CIBC, Chicago Gordon Honegger, Morton Community Bank, Morton

Laura Kinney, First State Bank of Bloomington, Bloomington

Robert Hutchinson, Glen Ellyn Bank & Trust, Glen Ellyn

Mary Kirbach, Carrollton Bank, Carrollton

Andrew C. Maychruk, Old Second Bank, Aurora

Kim Kuhl, First Financial Bank, NA, Olney

Donald Schlorff, The Gerber State Bank, Argenta Lee Sustar, Federal Home Loan Bank of Chicago, Chicago

Dawn Johnson, Security Savings Bank, Monmouth

Sarah Bacehowski, Mills Marketing, Storm Lake, IA

Denise LaForte, First Nations Bank, Wheaton

Will Justice, Vice President, Duncan-Williams, Inc., Memphis, Tenn.

Michael Bagniewski, Hoyne Savings Bank, Worth

Lorraine Linnerud, FNBC Bank and Trust, La Grange

Cassie Bull, Stillman BancCorp N.A., Stillman Valley

Regina Ondyak, Countryside Bank, Countryside

• November-December 2019

Immediate Past Chairman Rachael Maurer, United Community Bank, Springfield

Donald Krager, Bank & Trust Company, Chatham

Laura Retzlaff, The StateBank Group, Wonder Lake

Matthew Szigety, PNC Bank, N.A., Pittsburgh, PA

Adam Huskamp, Busey Bank, Edwardsville

• 34 •

Maria Warner, Morton Community Bank, Morton

Vice Chairman Andrew Butts, Bank of Belleville, Belleville

Corey Hoze, Associated Banc-Corp., Green Bay, WI

Government Relations Committee

Randy Alderman, The Bradford National Bank, Greenville

John Martin, Bank & Trust Company, Litchfield

Stephanie Swearingin, United Community Bank (f/k/a Liberty Bank), Godfrey

Chairman Matthew Wyatt, Busey Bank, Collinsville

William O'Neil, Carrollton Bank, Carrollton

Tricia Estela, The Northern Trust Company, Chicago

Chairman Rhonda Houzenga, Farmers & Mechanics Bank, Galesburg

Nate Sutton, Busey Bank, Champaign

FLA Board of Directors

Lauren Barney, CIBC, Chicago

Jeffery Fauver, Catlin Bank, Catlin

Communications and Marketing Committee

Nora Reyes, Republic Bank of Chicago, Oak Brook

Katharine Peterson, Heartland Bank and Trust Company, Sycamore

Michelle Toll, The State Bank Group, Wonder Lake

Todd Bailey, The Huntington Bancshares Inc., Columbus, OH Jeff Baker, LincolnWay Community Bank, New Lenox Randy Blackburn, Millennium Bank, Des Plaines Thomas Broeckling, First National Bank of Steeleville, Steeleville Megan Catherine Michiels, Citibank, N.A., Washington, D.C. Patricia Clausen, NorthSide Community Bank, Riverwoods Kathleen Cook, The Village Bank, Saint Libory Daniel Daly, SENB Bank, Moline Kyle Davis, Murphy-Wall State Bank and Trust Company, Carterville Rick Francois, American Community Bank & Trust, Woodstock Patrick Green, Wells Fargo, West Des Moines, IA Quint Harmon, Pioneer State Bank, Earlville Stacie Holden, U.S. Bank N.A., Minneapolis, MN

Daniel Watts, Forest Park National Bank & Trust Company, Forest Park

Tom Gihl, Illinois National Bank, Springfield

Simon Wlodarski, Bank of America, Chicago

Dean Heinzmann, Fortress Bank, Peoria

Human Resources Committee Chairman Amy Frazier, Hickory Point Bank & Trust, Decatur Kristan Becker-Hoffman, The Farmers State Bank & Trust Company, Jacksonville Tom Blackwell, Angott Search Group, Rochester, MI Crystal Dyer, Holcomb Bank, Rochelle Michael Gifford, Howard & Howard Attorneys PLLC, Peoria

Larry Kallembach, Heartland Bank and Trust Company, Bloomington Beth Williams, Peoples National Bank, N.A., Mount Vernon

Justin Fentress, DeWitt Savings Bank, Clinton Walter Hasselbring III, Iroquois Federal Savings & Loan Association, Watseka Kathleen Marinangel, McHenry Illinois Bankers PAC Board Chairman Thomas Chamberlain, Iroquois Federal Savings & Loan Association, Danville Treasurer Linda Koch, Illinois Bankers Association, Springfield Assistant Treasurer Peter Brummel, Grundy Bank, Morris Daniel Daly, SENB Bank, Moline Timothy Dosch, First Neighbor Bank, N.A., Mattoon Michelle Gross, State Bank of Bement, Bement

Chairman Thomas Chamberlain, Iroquois Federal Savings & Loan Association, Danville

Betsy Johnson, Forreston State Bank, Forreston

Rene' Anderson, Hickory Point Bank & Trust, Decatur

Courtney Olson, First Bank of Highland Park, Highland Park

Membership Committee

Candice Knight, MurphyWall State Bank and Trust Company, Pinckneyville

Jeff Baker, LincolnWay Community Bank, New Lenox

Sarah Mahler, Heartland Bank and Trust Company, Bloomington

Dale Blachford, Godfrey

Michelle Maiter, First Midwest Bank, Lake Forest

Betsy Johnson, Forreston State Bank, Forreston Jeff Rabenort, Bankers' Bank, Madison, WI Jeffrey Snyder, Forreston State Bank, Forreston Michael Steelman, Farmers & Merchants State Bank of Bushnell, Bushnell

Suzy Perino, Sauk Valley Bank & Trust Company, Sterling

Daniel Watts, Forest Park National Bank & Trust Company, Forest Park

Ashley Speed, Grundy Bank, Morris

Technology and Operations Committee Chairman William Evens, First Midwest Bank, Joliet

Gracia Turner, Iroquois Federal Savings & Loan Association, Clifton Susan Wetzel, Litchfield National Bank, Litchfield

Patricia Colwell, Farmers & Mechanics Bank, Galesburg

Michael DiPirro, Home State Bank, N.A., Crystal Lake

Kathy Thompson, CIBC, Chicago

Leanne Kopischke, Busey Bank, Champaign

Illinois Bankers Scholarship Committee

Lemanuel McKnight, The State Bank Group, Wonder Lake

James Peters, Town and Country Bank, Springfield

Chairman Dave Brandon, Hickory Point Bank & Trust, Decatur

Ryan Melton, Peoples National Bank of Kewanee, Kewanee

Dawn Schmidt, First Mid Bank & Trust, Edwardsville

Andrew Butts, Bank of Belleville, Belleville

Michelle Gross, State Bank of Bement, Bement

Jennifer Nagle, Peoples Bank & Trust, Pana

Janice Schramm, Hickory Point Bank & Trust, Springfield

James Roolf, First Midwest Bank, Joliet

Michael Cripps, The First Bank and Trust Company of Murphysboro, Murphysboro

Laura Mergelkamp, First National Bank of Waterloo, Waterloo

Michelle Toll, The State Bank Group, Wonder Lake

James Coons, Stillman BancCorp N.A., Stillman Valley

Andrew Butts, Bank of Belleville, Belleville

Kimberly Klein, The Gerber State Bank, Argenta

Chairman Martin Noll, Oak Park

Michael O'Rourke, Signature Bank, Rosemont

Renée Hageman, First Security Trust and Savings Bank, Elmwood Park

Jennifer Pauley, MurphyWall State Bank and Trust Company, Pinckneyville

Kenneth Elmore, The First National Bank of Litchfield, Litchfield

Timothy Hecht, First National Bank of Steeleville, Percy

John Armstrong, First Bankers Trust Company, N.A., Macomb

DaNeal Keane, Home State Bank, N.A., Crystal Lake

Larry Clark, Community Partners Savings Bank, Salem

Illinois Bankers Education Services (IBES)

Beth Glanzer, First Mid Bank & Trust, Mattoon

John Kane, Stillman BancCorp N.A., Stillman Valley

Vice Chairman Craig Hepner, Ottawa Savings Bank, Ottawa

Joseph Oleksak, Plante Moran, Southfield, MI

Robert Stroh, III, Tempo Bank, Trenton

November-December 2019 •

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Future Leaders Alliance Finding ways to attract and retain quality talent in the banking industry, along with building the next generation of banking leaders, is a major objective of the Ilinois Bankers and our industry. We’ve developed the Future Leaders Alliance (FLA) to create a framework for providing leadership training to aspiring bankers, via an innovative program that emphasizes professional and personal development, community service and networking. To date, more than 200 bankers have graduated from the FLA. The 14-month training program, which begins in January, consists of six two-day sessions totaling twelve interactive days of training. Classes are limited to no more than 25 students to ensure one-on-one personal development and meaningful interaction with other classmates. In addition to attending education sessions and performing local community service, participants also complete a personal assessment tool to help them gauge their personality types. The 2-day sessions cover many important personal and business-related topics, such as:

Finally, graduation takes place at our annual ONE Conference, which is held in East Peoria, Ill., every March!

Advancement

6Sessions 1

Leadership and Influence, Personal Assessment

Legislation, Politics and Communicating with the Regulators, Marketing and CyberSecurity

Industry Political Issues within Illinois and Washington D.C., Economic Update & Forecast, Sales & Service

Team Building, Management & Executive Coaching, Presentation Skills

ALM, Bank Simulation, Accounting, Top Tools for Leadership Success

Leadership and Graduation

FHLB-CHICAGO SCHOLARSHIPS

FLA Program & Washington Visit $1,000 each

PERKS

4.7 / 5.0

TO APPLY, CONNECT WITH US! education@ilbanker.com | 217-789-9340

200 100% 4 Graduates

In order to graduate from the program, the students must choose four electives, complete two hours of financial literacy instruction in their local community, and complete an in-bank project that will be presented to executives at their institution.

Class of 2020 • November-December 2019

The IBA answered the need expressed by its member institutions to provide leadership training for future leaders of the banking industry. What evolved was the Future Leaders Alliance, an innovative program for aspiring bankers that emphasizes education, community service and networking.

Students also learn about the legislative and regulatory climate, and they participate in meetings with elected officials and regulators. The class also meets with the Federal Reserve Bank in Chicago, the Federal Home Loan Bank of Chicago, and this year, they met with Performance Trust. One of the final highlights of the program is for the students to engage in a bank simulation session to learn and develop their banking operations skills.

STRENGTHEN YOUR WORKFORCE - APPLY NOW!

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Learn more at ilbanker.com or 217-789-9340

Average Session Rating

• Personal assessment, leadership tools and teamwork • Management and coaching

• Presentation skills • Sales, service, and marketing • Accounting, investments, portfolios, and economic updates • Asset liability and bank profitability

Reach New HEIGHTS with the FLA

10% DISCOUNT IBA Conferences Networking Events ALUMNI NETWORK Mentor Opportunities E-newsletter Lunch & Learns Reunions INDUSTRY REPRESENTATIVE Serve on a Board or Committee

November-December 2019 •

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WELCOME NEW MEMBER BANKS First National Bank of Nokomis FWBank (in organization)

When your bank’s a member, you’re a member!

ASSOCIATE MEMBER NEWS Abrigo Abrigo announced the ability for their customers to detect state-licensed cannabis-related businesses (CRB), thanks to additional anti-money laundering (AML) scenarios in BAM+ and a new watchlist within BAM+ Scan. BAM+ is the Bank Secrecy Act (BSA) and AML solution from Abrigo, formerly known as Banker’s Toolbox, used by banks and credit unions to detect, identify, and resolve suspicious activity.

SomerCor SomerCor announced the appointment of Brian Comiskey, CPA, as executive vice president and chief lending officer of the firm. In addition, the company has hired Kimberly Brisky as managing director of communications and engagement and Elisabeth (Lis) Williams as vice president of SBA 504 Lending.

NEW ASSOCIATE MEMBERS (as of 10-1-19) BeeSocial, LLC Park Ridge, IL www.beesocial.biz

Kerber, Eck & Braeckel LLP Springfield, IL www.kebcpa.com

Safe Systems Alpharetta, GA www.safesystems.com

BeeSocial is your go-to team for all things social media. We work with community banks to create custom social media content and design memorable images/videos for each post. Our team monitors all social platforms to ensure timely responses on behalf of your bank. BeeDiscovered -BeeUnique -BeeSocial

Kerber, Eck & Braeckel is a leading Midwestern-based accounting and management consulting firm. Our accountants and management consultants provide audit, accounting and tax services as well as management consulting, and employee benefit plan services. The firm supports a variety of clients with a special focus on construction, banking and financial

We provide compliance centric IT services exclusively for community banks and credit unions, ensuring that they are kept up to date on the current technologies, security risks, and regulatory changes. Less Worrying. More Banking. Safe System

Integrity Technology Solutions Bloomington, IL www.integrityts.com

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Neocova provides modern, cloudbased core and AI technology designed specifically to meet the needs of community financial institutions with a focus on flexibility and fairness.

• November-December 2019

on Social Media!

• INFO ON EDUCATION EVENTS • BREAKING NEWS • INDUSTRY MILESTONES • BEHIND THE SCENES WITH US

#illinoisbankersassociation @illinoisbankers

WolfPAC Integrated Risk Management Boston, MA www.wolfpacsolutions.com WolfPAC Integrated Risk Management is a secure, web-based Enterprise Risk Management solution that automates the identification of risks, threats, and control gaps. Developed by financial and risk management professionals, WolfPAC® provides tools to review and monitor information technology, privacy, vendor, regulatory compliance, and more.

Annual Conference

Integrity Technology Solutions is an IT security, compliance, and support company that specializes in working with community banks in Illinois. Located in Bloomington Il, we have 40 employees and have been in business since 1993. We have a dedicated cybersecurity and compliance team lead by our Information Security Advisor.

Neocova Saint Louis, MO www.neocova.com

June 16-18 Crowne Plaza Springfield

November-December 2019 •

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EVENTS CALENDAR

NEWS & NOTES

Sharon Knolhoff Inducted into the 50 Year Club

she loves. When asked what she enjoys most about her career she says, “Just waiting on the customers and hearing all of their stories. I like helping them in any way that I can, and I could not ask for a better group of people to work with.” Sharon recently went part time with the bank but still maintains her position with Farmers State Bank of Hoffman as Sr. Teller as well as the bank’s bond clerk. Bankers’ Bank to Become Funding Agent for Community Banks on TCH’s RTP Network

Glenn Knolhoff, former President and CEO of Farmers State Bank and Sharon Knolhoff

Sharon Knolhoff, Sr. Teller at Farmers State Bank of Hoffman, has been inducted into the Illinois Bankers Association’s 50 Year Club for those who have worked in the banking industry for 50 years. The bank celebrated the milestone with a dinner in Sharon’s honor with bank employees and Sharon’s family. Sharon began her career working at First National bank of Okawville on July 7, 1969. Just over 10 years later, she began working at Farmers State Bank of Hoffman in January of 1980. Three children and 40 years later she is still working in the industry

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Bankers’ Bank, a state-chartered financial institution that specializes in providing correspondent banking products to community banks, has committed to become a Funding Agent for depository institutions looking to provide real-time payments capabilities to their customers on the RTP® network developed by The Clearing House (TCH).

Bankers’ Bank will play a key role in faster payments as a Funding Agent for community banks participating in the RTP network and will participate as an early adopter of the technology. As a Funding Agent, as defined by the RTP network Participation Rules, the bank will fund and manage positions in the RTP network joint account on behalf of its respondent community bank customers. This allows the bank to lower the requirements for participation and provide additional features and benefits around settlement and management of customers’ RTP network participation. Bankers’ Bank has chosen to work with CGI, a global end-to-end IT and business consulting services partner and leader in innovative payment programs and solutions, to develop a one-of-a-kind funding solution that manages the funding for settlement in the RTP network joint account for Bankers’ Bank clients.

Four Illinois Banks Honored as "Best Places to Work For" Congratulations to

★ Evergreen Bank Group in Oak Brook, ★ Signature Bank in Rosemont, ★ Oxford Bank & Trust in Oak Brook, and ★ First Busey Corp in Champaign for being named to the list of Best Places to Work For” by the American Banker.

★

SEMINARS, CONFERENCES AND FORUMS DEC 2-5 DEC 3-4 DEC 5 DEC 6 DEC 6 DEC 6 JAN 28 JAN 30

Midwest Agricultural Banking School – West Lafayette, IN Advanced BSA Academy – Springfield BSA Forum – Springfield CFO Forum – Springfield CFO Forum – Schaumburg Bank Counsel Conference – Chicago Compliance Hot Topics – Springfield Compliance Hot Topics – Oak Brook

WEBINARS DEC 3 Notary Public: More Than Just a Title* DEC 3 Commercial and Industrial Lending in Today's Competitive Market• DEC 3 Three Key Risk Assessments in Your ERM Program: ERM, IT, and Internal Controls• DEC 3 Coaching Prospecting: How to Boost Your Team's Prospecting Results• DEC 4 Information Security Programs for Banks* DEC 4 HSA Fundamentals•

DEC 5 Overdraft Requirements & Best Practices* DEC 5 Opening Foreign Business Accounts: CIP, CDD and Risk* DEC 5 Recent Developments in Estate and Trust Administration 2019▲ DEC 10 Quarterly Compliance Briefing: Winter 2019* DEC 10 Commercial Real Estate Lending in Today's Economy• DEC 11 Excel 101: Introduction to Spreadsheets* DEC 11 HSA Advanced Concepts• DEC 12 Top Fifty (50) "Most Important" Safe Deposit Procedures* DEC 12 Deposit Year End Wrap Up* DEC 12 Negotiation Skills for the HR Professional• DEC 13 Using Principles of Critical Thinking* DEC13 Business Continuity Plan Development• DEC 16 Basic Personal and Business Tax Return Analysis* DEC 17 Regulation E: Errors & Disputes* DEC 17 BSA Year End Round Up* DEC 17 Drive Stronger Leads with Digital Marketing▲ DEC 17 Problem Loan Workout in Today's Market•

DEC 17 Loan Documentation for Commercial Real Estate Lending Transactions• DEC 18 A Banker's Responsibility Under FCRA* DEC 18 Common Check Scams Against Your Customer* DEC 18 Top 10 HSA Issues• DEC 19 Marijuana Year End Wrap Up* DEC 20 Fair Lending Laws and Regulations* * Total Training Solutions • Graduate School of Banking ▲ American Bankers Association

ABA ONLINE TRAINING COURSES DEC 9 JAN 6 JAN 13 JAN 20 JAN 27

Analyzing Financial Statements The Banking Industry Fundamentals of Mortgage Lending Marketing in Banking Introduction to Agricultural Lending Analyzing Bank Performance Bank Lines of Business Managing Funding, Liquidity, and Capital

UPCOMING EVENTS December 5

Chicago Area Chapter Holiday Breakfast Sheraton Lisle Naperville Lisle December 6 Bank Counsel Conference Renaissance Chicago Downtown Hotel Chicago

March 5-6, 2020 The ONE Embassy Suites East Peoria June 16-18, 2020 Annual Conference Crowne Plaza Springfield Springfield

View the full list at https://bit.ly/2m4yKFb

• November-December 2019

November-December 2019 •

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THE LAST PAGE

Illinois Bankers Standing Tall As you’ll see on the cover of this month’s issue,

"Illinois Bankers are Standing Tall!" You’ll notice this theme throughout our programs and correspondence over the next several months as we lead up to our Annual Conference in Springfield June 16-18 of next year. Illinois banks and bankers stand tall in their communities, with their customers, and when representing the industry at the State Capitol or in Washington, D.C. Illinois banks create jobs, they safeguard customer deposits and make loans, and they provide services to virtually every sector of the economy, including the vast majority of households and state and local government agencies.

Illinois Bankers Group Insurance Trust The Illinois Bankers Group Insurance Trust (“Trust”) is a not-for-profit entity, existing solely for the purpose of affording IBA members a source for purchasing quality and competitive group insurance products and services. The Trust provides members with dedicated field service executives to review plan updates, meet with employees/ management to answer the inevitable insurance coverage questions. Annual seminars are conducted, and mailings are sent to members to communicate any changes well in advance of renewals. There are no last-minute surprises. THIS MEANS n Lower overhead expenses n Plan flexibility n Individualized attention n Quality and timely claim administration n COBRA and HIPAA administration n Coverage for employees, directors and retirees STRATEGIC PARTNERS

COVERAGES INCLUDE n Major Medical with prescription coverage n High Deductibe Health Insurance Plans n Dental / Vision care n Life and AD&D n Short / Long term disability n Critical Illness and Accident n Access to Health Savings Accounts n Access to Flexible Spending Plans n All plans comply with the Affordable Care Act

And your employees are second to none! The Illinois banking industry directly employs 105,000 employees and indirectly generates an additional 303,500 jobs totaling 408,500 jobs, with $22.6 billion in wages and salaries. The IBA is proud to be a part of this great industry and even more proud to stand tall with you!

If you have any items or pictures to share on The Last Page, e-mail them to Debbie Jemison at djemison@ilbanker.com.

CONNECT WITH US ilbanker.com | 217-789-9340 Erich Bloxdorf Plan Administrator ebloxdorf@ilbanker.com

• 42 •

• November-December 2019

Mike Mahorney Vice President mmahorney@ilbanker.com

Phil Talley Vice President ptalley@ilbanker.com

Hillary Meyers Trust Manager hmeyers@ilbanker.com

November-December 2019 •

• 43 •

Feel like you’re all alone? Let us help you face today’s banking challenges.

Ron Hobson VP/Relationship Manager

Joe Kollmeyer SVP/Senior Loan Officer Tom Maassen VP/Loan Officer

Matt Sinnett President/CEO

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