Illinois Banker Magazine | January - February 2021

The Official Publication of the Illinois Bankers Association ilbanker.com

S E G N A CH

S T O PIV

!

S H P M U I TR

and

2020

w Year in Revie

PLUS

Virtual event highlights from a one-of-a-kind year ADDRESS SERVICE REQUESTED ILLINOIS BANKERS ASSOCIATION 3201 WEST WHITE OAKS DRIVE, SUITE 400 SPRINGFIELD, IL 62704

S E G N E L L A CH

January-February 2021

Growth strategies for any economic environment

Strong Foundations

PROVIDE SECURE FUTURES LENDING SERVICES

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OPERATIONAL SERVICES

Midwest Image Exchange – MIE.net™ Electronic Check Clearing Products Information Reporting – CONTROL Electronic Funds – Wire Transfers/ACH Risk/Fraud/Anomaly Detection Tools Cash Management and Settlement Federal Funds and EBA Certificates of Deposit International Services/Foreign Exchange Safekeeping

AUDIT SERVICES1 Directors’ Exams Loan Review Compliance Audits IT Audits

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INVESTMENT PRODUCTS2 Municipal Bonds Mortgage-Backed Securities Govt. & Agency Bonds Corporate Bonds Brokered CDs Money Market Instruments Structured Products Equities Mutual Funds ETFs

FINANCIAL SERVICES2

Public Finance Investment Portfolio Accounting Portfolio Analytics Interest Rate Risk Reporting Asset/Liability Management Reporting Municipal Credit Reviews Balance Sheet Policy Development & Review

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January-February 2021 • Vol. 106 / No. 1 • ilbanker.com

TABLE OF CONTENTS

2020 Year in Review

18

10 DEPARTMENTS 5 Message from the President and CEO 6 Compliance Corner 8 Scholarships 18 Events Highlights

28 New Associate Members

18

21

26

28 Associate Member News 30 Preferred Vendor Spotlight

FEATURES

33 Events Calendar

10 2020 Year in Review

34 News & Notes

20 THE ONE: The Beat Goes On! 21 No Small Feat: An Architect's Approach to Supporting Bank Facility Down-sizing 24 Tactics for Navigating Tectonic Shifts in Liquidity 26 Growth Strategies for Any Economic Environment

33 Ad Index 36 On the Move 38 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 C. Brant Ahrens Chairman CIBC, Chicago

Michelle L. Gross Chairman-Elect State Bank of Bement

William P. Gleason Vice Chairman The Leaders Bank, Oak Brook

BOARD OF DIRECTORS REGION 1

REGION 4

Clark Delanois The Northern Trust Company, Chicago

Tom Gihl INB, Springfield

Joan Heggen U.S. Bank, Chicago

Anthony G. Nestler Hickory Point Bank and Trust, Decatur

REGION 2

REGION 5

Gary S. Collins Old Second National Bank, Aurora

T.J. Burge Community Partners Savings Bank, Salem

Rick M. Francois American Community Bank & Trust, Woodstock

Richard J. Knebel The Bradford National Bank of Greenville

REGION 3

AT LARGE

Thomas J. Chamberlain Iroquois Federal Savings & Loan, Danville

Dane Cleven Community Savings Bank, Chicago

Tyler Rouse First Federal Savings Bank of ChampaignUrbana

Megan Collins Bank of America, Chicago

Jeff Fauver Catlin Bank James R. Hannon First Security Trust and Savings Bank, Elmwood Park Quint Harmon Pioneer State Bank, Earlville James H. Huiskamp Blackhawk Bank and Trust, Milan Richard J. Mahoney First Midwest Bank, Chicago

Pamela A. ShararStoppel Wheaton Bank & Trust Co. Matthew Smith First Mid Bank & Trust, Mattoon Simon P. Yohanan First Bank of Highland Park Andrew Butts Bank of Belleville (non-voting member)

Rick R. Parks First National Bank of Waterloo Steven F. Rosenbaum Hoyne Savings Bank, Chicago

ILLINOIS BANKERS ASSOCIATION STAFF DIRECTORY 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

Betsy Johnson Treasurer Solutions Bank

Executive Administration Randy Hultgren, President and CEO Erich J. Bloxdorf, Executive Vice President & COO Mary Curl, Executive Assistant & HR Manager

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

Pam Macha, Springfield Office Coordinator Legal and Compliance Carolyn Settanni, Executive Vice President and General Counsel Carly Berard, Senior Counsel Michael Schasane, Staff Attorney Amy Giacomucci, Law Assistant

Anthony G. Nestler Member-at-Large Hickory Point Bank and Trust Co., Decatur

Bank and Partner Relations Julie Winterbauer, Vice President Linda Koch, CAE, Member/Business Relations Manager David Barbeau, Senior Banking Advisor (dbarbeau@htc.net) Sarah Cowan, Membership and Government Relations Assistant

Kevin L. Olson Immediate Past Chairman Grundy Bank, Morris

Randy Hultgren Secretary President and CEO Springfield

•4•

• January-February 2021

Communications/Marketing/ Associate Membership

Illinois Bankers Business Services, Inc.

Debbie Jemison, CAE, Vice President

Brian Hoffman, President

Tammy Squires, Assistant Vice President Robin Lane, Director, Associate Membership Finance and Administration Mark Bennett, CPA, CFO and Executive Vice President

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

Marcia Stratton, CPA, Director

Bob Anderson, Manager, Education Relations & IT Support

Marie Ann South, Financial Assistant

Cassie Mattson, Manager, Event Management and FLA

Government Relations

Denise Perez, Manager, Education & Training

Ben Jackson, Executive Vice President

Amy Sale, Education Assistant

Aimee Winebaugh, Assistant Vice President;

Illinois Bankers Group Insurance Trust

Sarah Cowan, Membership and Government Relations Assistant

Erich J. Bloxdorf, Plan Administrator Mike Mahorney, Senior Trust Advisor Hillary Meyers, Trust Manager

Editorial Office 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 2021 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.

MESSAGE Goodbye 2020, Hello 2021!

Randy Hultgren

IBA President and CEO

I stayed up until midnight on New Year’s Eve, not to ring in the new year, but to make sure the old one was really gone. I am longing to be with all our Members face to face, with no masks. As challenging and frustrating as 2020 has been, all of us at the Illinois Bankers Association have many reasons to celebrate and be grateful. Of most importance, we recognize our fantastic Members and remember how fortunate we are to work with you and for you every day of the year. As with each year, even a difficult one like 2020, it is important to reflect and learn from the past, and then look forward and plan for the many new opportunities that will come in 2021.

It is almost hard to remember back to March when we had our last, big in-person event at The ONE Conference in East Peoria. It was a fantastic event that set new records, and then everything changed. Under Linda Koch’s leadership, the IBA Team took a courageous step and Rewired our Annual Conference to a completely virtual event. Honestly, we did not know if any of you would show up. You showed up in a big way! We had our largest Annual Conference ever with over 550 bankers.

All our major events since that time have been virtual and we have continued to have record attendance at almost all of them. Our plan for next year is to start the year virtual and then hope to have a hybrid with bankers coming to Branson in June for our Annual Conference, while still offering most of the sessions virtually for those who would rather not travel and to open all of the amazing speakers to a broader audience. I have been incredibly impressed with the nimbleness and creativity of the staff of our Illinois Bankers Education Services. You can be confident that every IBA program in 2021 will be crafted to be helpful to you and your team and will have our commitment to excellence.

A silver lining of the dark clouds of 2020 was the inspiring stories of sacrifice and service

by Illinois bankers to care for their communities and their customers. Many of you worked non-stop, nights and weekends, wrestling with E-Tran to get PPP applications submitted for your small businesses who were just trying to survive. You and your people gave your time and energy to bring food and necessities to

older customers who had nowhere else to turn.

Banks across the state volunteered and donated to assist struggling non-profits stay afloat. The IBA Communications and Marketing team has loved telling your stories to media, legislators, and leaders across Illinois.

The future of banking depends on bright, energetic young people who want to be leaders in banking in the future. Our Future Leaders Alliance is going strong and I know our industry will be in good hands in the decades to come.

It was a phenomenal year for the educational scholarships that the IBA launched last year and we now have over $85,000 to continue aiding students interested in banking. In a difficult year for younger students, the bankers in Illinois and the IBA have teamed up to sponsor the Stock Market Game, that is a free on-line curriculum for those in the 4th to 12th grade.

Illinois Bankers Business Services has continued to form and grow relationships that bring great benefits to our Members. Our Government Relations and Advocacy team has found creative, effect tools to communicate your priorities to elected officials in Illinois and DC. Our great Legal team has crafted advice and direction for hundreds of banks struggling with regulatory or compliance questions. The IBA Membership team has utilized Zoom technology to try to be as face-to-face with you as possible and have led our efforts to write personal notes to all our Members. Our Finance/Administrative team has been and will be there to help you every day. And all of this will just grow stronger in 2021! Finally, it was a happy/sad year as we celebrated the magnificent leadership of Linda Koch as she retired as CEO at the end of June. We are so grateful that Linda has agreed to continue to help the IBA with using her great talents and passion to meet and serve our Members.

Thank you for joining with all of us at the IBA to make sure everyone in Illinois can have access to the vital benefits that only banks can bring. We have made it through 2020 and are stronger and smarter.

Here is to a happy, healthy, prosperous, and, hopefully, mask-free 2021!

January-February 2021 •

•5•

COMPLIANCE CORNER The IBA Law Department

QUESTION

A customer notified us on a Saturday that on the preceding Wednesday, she became aware that she lost her wallet with her debit card inside. Two transactions at a retail store using the debit card PIN occurred before the customer discovered she lost the wallet. One transaction exceeded $300, and another transaction the following day exceeded $200. When we questioned the customer, she said that the PIN was written on a piece of paper kept in her wallet.

Are we obligated to credit the customer for these transactions? The Visa rules state that a cardholder’s negligence can increase their liability for an unauthorized transaction, but the commentary to Regulation E states that negligence cannot be used as a basis for imposing greater liability than permissible under the regulation.

ANSWER Yes, we believe your bank may be required to provisionally credit and refund your customer for some of the unauthorized transactions.

Regulation E Regulation E’s Official Interpretations state that a consumer’s liability for unauthorized electronic fund transfers (including debit card transactions) “is determined solely by the consumer’s promptness in reporting the loss or theft of an access device.”

A consumer’s negligence (such as “writing the PIN on . . . a piece of paper kept with the card”) is not a basis for imposing greater liability for unauthorized transactions than is permitted by Regulation E. Regulation E provides different tiers of liability to be imposed on a consumer for unauthorized transactions based on how promptly they notify your bank after learning of the loss of their card or access device. Generally, a consumer’s liability hinges on

whether they notified the financial institution within two business days after learning of the loss or theft of the access device, as well as when each particular unauthorized transaction occurred.

Based on the Regulation E liability rules, we believe that your customer would be subject to the higher tier of liability because she did not notify your bank until more than two business days had passed since she discovered the card was lost (assuming Thursday and Friday are business days — i.e., days on which your bank is open to the public and carries on substantially all business functions).

However, since both unauthorized transactions occurred before your customer discovered the card was lost, we believe her liability for the unauthorized transactions would be capped at $50. Although there are certain factors that can increase a customer’s liability for unauthorized transactions that are not timely reported, they are only applicable in

cases where the unauthorized transactions occurred after the customer discovered the loss of the card.

Visa Rules Unlike Regulation E, which imposes some liability on consumers for unauthorized transactions, the Visa Rules limit a cardholder’s liability to zero once a cardholder notifies you of an unauthorized transaction.

However, a card issuer may increase the amount of the cardholder’s liability “if the Issuer reasonably determines, based on substantial evidence, that the Cardholder was fraudulent or negligent in the handling of the account or the Card.”

However, while you may be able to impose liability on your customer in an amount greater than zero, that amount cannot exceed the maximum liability allowed under Regulation E.

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!

•6•

• January-February 2021

QUESTION

A customer just notified us that ACH fraud has occurred on their account for the last six months.

Does Regulation E require that we credit the customer for unauthorized transactions made during the sixty-day period preceding the notification, or for the sixty-day period occurring after the first unauthorized transaction that occurred when the fraud first began?

ANSWER Your bank likely will be required to credit the customer for unauthorized transactions that occurred during the first sixty days after you transmitted a periodic statement showing an unauthorized transaction. Under Regulation E, when a customer fails

to report an unauthorized transaction within sixty days after transmittal of the statement showing the unauthorized transaction, the customer faces unlimited liability for unauthorized transfers that occur after that sixtyday period (up to the date on which

the customer notifies the bank about the unauthorized transactions).

However, the bank still must reimburse the customer for the unauthorized transactions that occurred during the initial sixty-day period.

QUESTION

Over two years ago, we received a non-wage garnishment summons and sent a response stating the amount of funds we were holding for the customer named in the summons. To date, we have not been asked to turn over the funds. Is there a maximum amount of time we must hold these funds before returning them to the customer’s account? We have contacted the court and the creditor’s counsel regarding the status of the garnishment proceeding but have not received a response.

ANSWER We believe you must continue to hold the funds until further order of the court — with the caveat that you may eventually have to remit them to the State Treasurer if they become abandoned.

The lien created by a garnishment summons does not expire after a set length of time, unlike the lien created by a citation to discover assets (which expires six months after the citation respondent’s first appearance, unless extended). The Illinois Code of Civil Procedure provides that a garnishment summons creates a lien on a judgment debtor’s property, and the lien remains “pending the garnishment proceedings.” Moreover, your bank, as garnishee, would be held liable for the amount of the

garnished property if it “refuses or neglects to deliver property . . . when ordered by the court.”

Consequently, we believe you must continue to hold your customer’s funds until you are ordered to turn them over or you receive notice that the garnishment proceeding has been dismissed. Note that a garnishment proceeding cannot continue indefinitely — a garnishment proceeding cannot continue beyond the expiration of the underlying judgment, and most judgments expire after seven years unless revived.

Additionally, if there is no other activity in your customer’s account and the funds are presumed abandoned under the Illinois Revised

Unclaimed Property Act (Illinois RUUPA), you may be required to report and remit them to the State Treasurer. The Illinois RUUPA also provides that a holder that delivers property to the State Treasurer in good faith and “substantially complies” with the Illinois RUUPA’s notice provisions “is relieved of all liability which thereafter may arise or be made in respect to the property to the extent of the value of the property so paid or delivered.”

Consequently, if you follow the notice requirements of the Illinois RUUPA, we believe you would be shielded from liability with respect to garnished property that is remitted to the State Treasurer.

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.

January-February 2021 •

•7•

SCHOLARSHIPS

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IBA Future Leaders Alliance (FLA)

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January-February 2021 •

•9•

CHALLENGES

CHANGES

S T PIV2O 020

Year in Review

!

S H P M U I TR

and

WHAT A YEAR!

When faced with the challenges of COVID-19, the IBA became even more of a go-to source for information, connections and critical education necessary to help your organizations adapt to an everchanging pandemic environment. Because we always have our members top of mind, our staff made crucial, quick decisions with you and your employees at the forefront. We were able to pivot on a dime, providing you -- at your home or office -- with much-needed resources, education and pandemic-related information.

alone, Illinois financial institutions like yours have aided their communities to the tune of $22.8 billion in PPP loans, supporting more than 2 million jobs. The IBA is proud to be your trusted partner, and we are honored that we have been and will continue to be with you every step of the way as you work so hard to serve your communities.

We hope you’ll take a look at this Year in Review for a glimpse into how hard the IBA works for its members every day in our efforts to connect bankers, advance banking and elevate Illinois’ banking industry. #illinoisbankersstandingtall

A case in point was quickly making the decision to continue to hold our flagship Annual Conference, exactly when our banks needed the timely information the most. It was the right decision for our members, and a record crowd was able to experience this remarkable event for themselves.

We also welcomed former US Congressman Randy Hultgren as our new President and CEO, taking the reins from Linda Koch, who had served as President and CEO for more than 20 years. Big shoes to fill, but Randy and the IBA team have hit the ground running!

Illinois banks are crucial to the survival and success of families and small businesses. In the last few months

Banker of the Year, Thomas A. Broeckling, First National Bank of Steeleville.

New IBA Chairman Brant Ahrens, CIBC, presents his inauguration speech during the virtual Annual Conference in June.

When your bank is a member, you're a member!

Connect with fellow bankers, industry vendors and other experts in the financial services industry by attending events and participating on IBA committees and boards. Build important business relationships, contribute and collaborate with other committee volunteers, and exchange information and ideas, while strengthening your ties in Illinois’ banking community.

Linda Koch, former IBA President and CEO, recognizes outgoing IBA Chairman Kevin Olson, Grundy Bank, and his wife Mary.

IBA Annual Conference Committee Chairman Michelle Gross, State Bank of Bement, and new IBA President and CEO Randy Hultgren, honor Linda Koch for her many years of service to the IBA and the industry during a virtual connections happy hour.

Welcome to Our New Member Banks As of 12-15-20 American Eagle Bank Blackhawk Bank

GN Bank Municipal Trust & Savings Bank

Synchrony Bank (Financial Services Industry Member)

Welcome to Our New Associate Members As of 12-15-20 acxell Ameren Illinois Approval Payment Solutions Inc. Backbase USA inc.

BankOnITUSA Bend Financial Cardinal Board Services Elliott Data Systems, Inc. Federal Protection Inc. Freddie Mac

Frye-Williamson Press, Inc. Godfrey & Kahn, S.C. Green Check Verified Greensfelder, Hemker & Gale, P.C. J&P Site Experts Liquid Capital MerchantPro Express Noonan & Lieberman, Ltd. Oak Ridge Financial Services Group, Inc.

Paymerang Peters & Associates Redmon Consulting, LLC SB Value Partners, L.P. Scantron Technology Solutions Sullivan Auctioneers, LLC The Kafafian Group, Inc. Thomson Reuters Upgrade, Inc.

Congrats to This Year’s Award Winners!

Banker of the Year Thomas A. Broeckling, First National Bank of Steeleville Lifetime Achievement and Distinguished Bank Counsel Award Bruce Jay Baker, Illinois Bankers Association Honorary Lifetime Membership Daniel P. Daly, SENB Bank

50 Year Club Awards Jeffery J. Bowden, Illinois Bankers Association John G. Eilering, Glenview State Bank Charles R. Eyman, Hickory Point Bank & Trust Dale Huston, Hickory Point Bank & Trust Frank R. Joy, The Bradford National Bank Leon J. Mizeur, Hickory Point Bank & Trust Patricia M. Titsworth, Litchfield National Bank Centennial Award Anchor State Bank – 125 Years Midwest Bank – 150 Years Petefish Skiles & Company – 150 Years Raritan State Bank – 100 Years

Community Service Awards First Bank of Highland Park First Neighbor Bank, N.A. Philo Exchange Bank Volunteer of the Year Don Krager, Bank & Trust Company, Litchfield Illinois Bankers PAC Bank of the Year Murphy-Wall State Bank and Trust Company

Future Leaders Alliance Scholarships Maria Godina, Security Savings Bank Jen Mathis, Peoples Bank & Trust

You Help Shape our Industry by Volunteering on IBA Boards and Committees

208 119 Board and Committee Members

Banks and Companies Represented

19

IBA Board and Committees

January-February 2021 •

• 11 •

2020 TOP ACHIEVEMENTS DEFENDED THE BANKING INDUSTRY

The only trade association to represent the banking industry and oppose the income tax amendment when proposed.

The amendment, which would have opened the gate to a graduated tax increase that would have hurt small businesses and community banks, failed by a wide margin.

CREATED ALTERNATIVE LEARNING

SHARED YOUR STORY

We moved quickly to become the first bankers’ association in the country to provide a virtual “rewired” Annual Conference, allowing our membership to take advantage of critical connections and training.

SEE YOU IN 2021 Annual Conference - June 13-16 Branson Convention Center, Branson, MO

INFORMED BANKERS

The legal team answered hundreds of COVID-19 questions along with the resulting onslaught of new laws and regulations.

Exclusive emails dedicated to these issues were delivered to bankers with access to more on the GoToIBA.com compliance website.

EXPANDED YOUR TALENT SEARCH

BankTalentHQ expanded into 33 states and territories with more than 15,000 job seekers on the site. This comprehensive online career center developed by the IBA brings quality talent to the banking industry.

resource for you. Read about the latest industry and legislative news and compliance hot topics in our regular e-newsletters. Bookmark our website at ilbanker.com, featuring all the IBA has to offer, and follow our social media sites for latebreaking updates.

WELCOMED NEW MEMBERS

Five banks were welcomed into our community despite prolific industry consolidation and pandemic challenges.

We are thrilled to add these new voices to those of our current membership.

INTRODUCED NEW VENDORS TO A PRESTIGIOUS LINE UP

Five Preferred Vendors were introduced to our membership, including Abrigo, which helps banks with PPP loan forgiveness and administration, and Liquid Capital, which provides alternative financing solutions in partnership with a bank.

ILLINOIS BANKS

Information at Your Fingertips When you need industry information, we are the

Getting the word out about the good news that Illinois banks are doing in their communities has been a priority. It is our goal to share every story with our legislators, the media and others. We amplify the message of how Illinois banks have stepped up to provide strength and stability for families, businesses and their local communities.

A S O U R C E OF S T R E N G T H

Sharing your stories

As the entire nation contends with a public health crisis, civil unrest and recession, Illinois banks have stepped up to provide strength and stability for families, businesses and their local communities.

When COVID-19 hit, Illinois bankers stepped up quickly, like they always do, to help their friends, neighbors, small businesses and communities.

The IBA has been collecting those positive stories and sharing them, along with recent information on PPP loans and other Illinois statistics, on social media and with legislators.

PA N D E M I C R E S P O N S E

225,409

OFFERED LOAN PAYMENT DEFERRALS, RATE & TERM CONCESSIONS, FEE WAIVERS, AND SERVICE TO THEIR COMMUNITIES

PPP LOANS MADE

AS “ESSENTIAL BUSINESSES,” REMAINED OPEN USING TECHNOLOGY, EXTENDED-HOUR DRIVE-THRUS, AND APPOINTMENT BANKING

2.2 MILLION

JOBS SUPPORTED THROUGH THE PPP

$22.8 BILLION IN PPP LOANS P R E - PA N D E M I C F O U N DAT I O N S O F S T R E N G T H THOROUGH BUSINESS CONTINUITY PLANNING

STRONG CAPITAL, LIQUIDITY & CREDIT QUALITY

TECHNOLOGY INVESTMENTS & ENHANCEMENTS

$2.2

$13.9

14.2

$500.2

SMALL FARM

SMALL BUSINESS

CUSTOMERS

DEPOSITS

LOANS

LOANS

BILLION IN

BILLION IN

MILLION

BILLION IN

The Illinois Bankers Association is a full-service trade association dedicated to advancing a positive business climate for the entire banking industry and the communities we serve. Founded in 1891, the IBA brings together state and national banks and savings banks of all sizes in Illinois. ilbanker.com | 217-789-9340

Join more than 5,000 of your peers and follow us on social media!

• 12 •

Twitter @ilbanker 1,339 followers

• January-February 2021

LinkedIn illinois-bankers-association 2,334 followers

Facebook facebook.com⁄illinoisbankers 1,136 followers

Instagram Illinoisbankers 262 followers

2020 Year in Review

Cultivate an Engaged, Informed and Updated Staff You want the best training for your staff to

ensure your bank is performing, following all regulations, providing the latest products and services in your community and more.

In 2020 the IBA quickly made adjustments to the delivery method but did not miss any opportunity to deliver pertinent training for you bank. IBA training

80% of Illinois banks choose the IBA for staff training

Future Leaders Alliance

provides the latest education programs including timely new topics, like Sexual Harassment Prevention Training, Breaking Into Banking (online short videos), Directors' Symposium, Commercial Lending Series, Compliance and Train the Trainer Forums. Over 6,000 participants took part in our education events, with nearly 1,000 attending complimentary pandemic-related training.

9 Virtual Conferences and 1 in-person Conference, most setting record attendance numbers.

Ensure the Future of Your Bank The Future Leaders Alliance program was created with the goal of building the next generation of bank leaders. Some traits of a leader can be defined as someone who is open to new ideas, willing to adapt to change, and someone who will step up and be a source of light in darker times. The FLA Class of 2021 has proven themselves as leaders three times over this year. They met in person for only one of the 4 sessions, while the remaining days were held virtually. While nothing about 2020 has been ideal, these 27 students have proven to be exceptional leaders and we are so incredibly proud of them!

In 2021 expect the technology to continue

with most programs in Hybrid format (Virtual and In-Person) or Virtual Only.

The FLA Class of 2020 graduated the first week of March at The ONE Conference. All 16 of these Future Leaders are rising forces in the banking industry, and we can’t wait to see how high they climb in their professional journeys!

The IBA relies heavily on recommendations and ideas from our boards and committees, and that couldn’t be more accurate when it comes to the FLA Board. With the sudden shift to virtual and the uncertainty of 2021, the Board went above and beyond to provide invaluable support and advice to execute not only the current program, but promotion of next year’s FLA class. Each member of the FLA Board epitomizes leadership, and we can’t thank them enough!

Stock Market Game

Illinois Bankers Education Services is excited to be the new licensee of The Stock Market GameTM in the state of Illinois. You can expect the same friendly service from the same people you’ve come to know over the years as we move forward with this important program that connects students to the global economy with virtual investing and real-world learning.

The Illinois Bankers Scholarship Fund

awards four $1,000 scholarships to high school graduates that are seeking a degree in the financial services industry. The fund was set up to promote the development and continuation of a vibrant talent pool of future leaders in the field of banking. In 2020 the Scholarship Committee introduced the Linda J. Koch scholarship fund to honor her commitment to the industry over the past 30+ years. That fund raised over $70,000 in only a few short weeks.

Consider making a contribution!

January-February 2021 •

• 13 •

Illinois Bankers Business Services

Increase Your Bottom Line

19 Preferred Vendors to serve your bank’s needs – selected for bankers by bankers.

28 State Association Partners in 33 States and Territories

13,000+

registered job seekers since inception

700+

registered employers since inception

• 14 •

• January-February 2021

Find cost savings with this line up of IBA Preferred Vendors.

• ABA Insurance Services

• BankTalentHQ

• Investors Title

• Abrigo

• Cardinal Board Services

• Keystate Captive Management

• APPI Energy

• Deluxe

• Liquid Capital

• Approval Payment Solutions

• Deluxe Banker’s Dashboard

• Office Depot

• Ascensus

• Epic Retirement Plan Services

• BankMarketing Center.com

• Floodplain Consultants

• SBS CyberSecurity, LLC • Strategic Resource Management • UFS, LLC

2020 Year in Review The IBA is Your Go-To Source for Compliance Law Department Conferences BANK COUNSEL CONFERENCE

173 attendees VIRTUAL COMPLIANCE CONFERENCE

66 attendees

FALL LAW REVIEW

16 attendees

Compliance issues pose major challenges for bankers, and our IBA law department is here to help our members. In 2020 alone, we published answers to nearly 300 compliance questions on our IBA Compliance Connection website at GoToIBA.com, where they will join over 4,000 compliance total Q&As, among many other resources!

Compliance Resources Well over 1,000 bankers use GoToIBA.com from 242 member institutions, where they find over 200 topic pages and over 4,000 compliance Q&As, together with articles, resources, and much more.

Other Accomplishments Throughout the COVID-19 pandemic, the law department has provided valuable information to our members on the rapidly changing landscape of COVID19-related legislation, regulations, and guidance at the state and federal levels.

Along with preparing daily news updates, weekly newsletters, and an overview of the Paycheck Protection Program (PPP), the law department has answered dozens of COVID-19-related compliance questions and provided access to COVID-19-related resources on GoToIBA.com.

The IBA law department submitted a comment letter to the OCC on its proposed rule modernizing and revamping its Community Reinvestment Act rules, and we are currently working on another comment letter to the Federal Reserve Board regarding its advance notice of proposed rulemaking on the same topic.

As a follow up to our 2019 letter to the Secretary of State’s office regarding its attempt to collect retroactive franchise taxes from bank holding companies, we continued to advocate on behalf of banks who faced hurdles in proving that their stock certificates are being held out of state. The Secretary of State’s office has responded by confirming that it would accept tax returns, accountant’s affidavits, and other evidence as proof of stock certificates being held out of state.

We negotiated, drafted, and reviewed numerous contracts for the IBA and its subsidiaries throughout the year, including agreements for new preferred vendors, educational partners, and more — as well as negotiated protections for our eventrelated contracts should the pandemic continue to force changes to our in-person events.

Still Going Strong...the Illinois Bankers Group Insurance Trust For over 50 years, the Trust has been providing financial intuitions across the State of Illinois with quality, affordable health, dental, vision, life, disability, and critical illness insurance. All members of the Illinois Bankers Association have access to this important employee benefit program.

With the Trust, you can access:

 important employee benefits that

can increase talent acquisition and retention.  coverage for employees, spouses, dependents, and retirees.

 eight different health plans from

the most trusted carrier in the State of Illinois.  ancillary products that add to your suite of employee benefits.  end-to-end COBRA and HIPPA administration.  industry experts in the Affordable Care Act, compete disclosures, and insurance industry trends.

Over the past year, our participation and member organizations are up over 10%...contact us to see how you can access this important member benefit!

January-February 2021 •

• 15 •

Advocacy in Action: Celebrating Bankers Helping Their Communities What can be said about 2020 that hasn’t already been covered ad nauseum? It has been an unprecedented, challenging year for all. But let’s look at the positive side of it from an advocacy perspective.

What truly stands out is how bankers rallied to help their communities throughout the year. Illinois banks worked to keep their neighbors in business and in their homes as job losses mounted and industries were shut down to control the spread of COVID-19.

In particular, the largely unheralded efforts of Illinois bankers on the Paycheck Protection Program (PPP) is something to celebrate. Bankers spent countless, frustrating hours working with business owners, assembling loan files and submitting paperwork through unforgiving and frequently crashing Small Business Administration (SBA) portals. The IBA was there, backchanneling with the SBA and the American Bankers Association to fix problems associated with the rapid rollout of PPP. Some press coverage of PPP focuses on anecdotal problems, but we stand by our industry’s record. We’re making sure policymakers know about your extraordinary efforts, too. Illinois banks provided 225,409 PPP loans, totaling $22.8 billion in capital, directly to businesses that support vibrant communities.

These actions stayed or saved 2.2 million Illinois jobs. Beyond PPP, Illinois banks large and small collectively contributed tens of billions to nonprofits, community loan funds, government programs, and charities to help Illinois communities through the crisis. And they quickly developed in-house programs to help struggling customers.

Another bright point is how we adapted to the new environment of lobbying and collective grassroots advocacy.

As the first COVID-related executive orders rolled out in March and April, we ensured that financial institutions were treated as essential businesses.

We also successfully lobbied to enact a remote notarization executive order (and later, state legislation) so banks could continue serving their customers. We stopped state legislation that would have created new mortgage servicing rules and allowed mortgage borrowers to skip making payments for months at a time.

We learned to adapt to remote hearings

• 16 •

and legislative sessions and to lobby policymakers by phone, text, and email without the benefit of in-person interaction. Our bankers learned to effectively communicate with our members of Congress and regulators over Zoom.

Some remote tools will no doubt outlast the pandemic. We nonetheless look forward to bringing bankers together again in Springfield and Washington, D.C. to directly affect banking policy.

Racial equity issues gained a prominent place in our political dialogue this year.

The banking industry is an inextricable part of this conversation. The IBA and our members fully engaged in the conversation about overcoming racial disparities in lending, improving access to banking services, and addressing the persistent wealth gap among Black households.

Our industry stepped up to explore solutions. Banks are increasingly examining how they can boost workforce diversity, and they are proactively supporting vital community organizations, increasing down payment assistance, asking regulators for support to ensure more equitable lending, and engaging policymakers to develop collective solutions.

November’s state and national election changes the political and regulatory landscape as well. In Illinois, Democrats maintained supermajorities in the General Assembly, but the criminal probe centered on allies of Speaker Madigan means we could see new House leadership for the first time in decades.

Illinoisans voted down a change to our constitution that would have ushered in a graduated income tax. We are satisfied that this IBA-opposed ballot question failed. We predict, though, that state lawmakers will still seek revenue – likely smaller, targeted tax and fee increases – to address structural deficits that have only gotten worse due to the pandemic.

In Washington, the Democratic majority in the House shrunk, while Senate control is unclear until after Georgia’s Senate run-offs. We have a new president-elect and vice president-elect who will take a decidedly different approach toward industry regulation. President-elect Biden will have an immediate opportunity to replace some banking agencies’ leadership, starting with the OCC and the CFPB. The Biden administration will need to nominate candidates, though,

• January-February 2021

who are moderate enough to pass a closely divided Senate. The Biden administration has a broad financial platform, including rolling back the OCC’s CRA rule, strengthening disparate impact regulations, and broadening access to financial services.

The past year was difficult for all Illinoisans and like everyone, we eagerly await a return to normalcy. Yet 2020 led to advocacy innovations; by providing pathways to effectively represent our industry in tough times we reaffirmed our resiliency and adaptability on challenging terrain. Whatever the methods, we will continue to remind policymakers of our industry’s community service during the pandemic, and we will work with our grassroots bankers to strongly defend and promote banking through another year of advocacy evolutions.

Illinois Bankers PAC

Another positive attribute of this year was Illinois Bankers PAC’s 100%!! success rate in supporting winning candidates in the 2020 General Election! We provided a tremendous return on investment to PAC contributors. At the same time, our PAC still raises far below what other industries bring in annually, thus affecting the number of races that we can be involved in. Imagine our political force if we were able to increase our member contribution rate from 28% to even just 50%!?

Illinois Bankers PAC is both the first step and the last step in ensuring a vibrant banking industry in Illinois.

The Illinois Bankers PAC helps elect officials who want to partner with the banking industry for a better Illinois, and it amplifies our grassroots and lobbying efforts.

Just as bankers across Illinois have committed to helping our great state during the tumultuous year, we need your commitment to helping the industry to refuel Illinois Bankers PAC for the challenges ahead. The best defense is a strong offense, and we will need every tool in our arsenal to elevate the industry in the year ahead.

2020 Year in Review

$238,648 raised through IBA member support $192,750 contributed to federal, state, and local lawmakers who support our industry

29% of member banks contributed 150 Individual contributors 8 Rock Star Banks 31 Fair Share Banks

100% 2020 General Election contribution success rate ZERO% was spent on travel, meals, or staff expense

100% of funds contributed to advocating for the industry

Rock Star Banks

Community Savings Bank Cornerstone National Bank & Trust Company Farmers & Mechanics Bank Grundy Bank Murphy-Wall State Bank and Trust Company Philo Exchange Bank Solutions Bank State Bank of Bement

Fair Share Banks

American Community Bank & Trust Bank & Trust Company Busey Bank Carrollton Bank CIBC Community Partners Savings Bank Farmers & Merchants State Bank of Bushnell First Mid Bank & Trust First Midwest Bank First National Bank of Waterloo First Secure Bank and Trust Co. First Security Trust and Savings Bank First State Bank Forest Park National Bank & Trust Company Holcomb Bank Iroquois Farmers State Bank Iroquois Federal Savings & Loan Association

LincolnWay Community Bank Midland States Bank NorthSide Community Bank Peoples National Bank, N.A. Prospect Bank Republic Bank of Chicago Security Savings Bank SENB Bank Sterling Bank The Leaders Bank The Northern Trust Company Town and Country Bank Washington Savings Bank West Town Bank & Trust

Additional Bank Contributors

Amalgamated Bank of Chicago Bank of America Bank of Belleville Bankers' Bank Beardstown Savings, sb Central Bank Illinois Central Bank of St. Louis Citizens Community Bank Community Bank of Elmhurst First Bank of Highland Park First National Bank First National Bank of Steeleville FNBC Bank & Trust Heartland Bank and Trust Company Hoyne Savings Bank INB, National Association

Inland Bank and Trust Itasca Bank & Trust Company Lisle Savings Bank Midwest Independent BankersBank Peoples Bank & Trust PNC Bank, N.A. Quad City Bank and Trust Company Regions Bank Sauk Valley Bank & Trust Company SouthernTrust Bank State Bank of Cherry Stillman BancCorp N.A. The First Bank and Trust Company of Murphysboro The State Bank Group THE VILLAGE BANK TIB-The Independent BankersBank U.S. Bank N.A. United Bankers' Bank United Community Bank Wheaton Bank & Trust Company

Platinum Contributors

Micah Bartlett Erich Bloxdorf Michael Cripps Daniel Hollowed Thomas Hough Randy Hultgren Ben Jackson Howard Jaffe Betsy Johnson Linda Koch Brien Leahy Kevin Olson James Roolf Carolyn Settannni

Gold Contributors Diana Allen Bob Anderson Michael Cassens David Feldhaus Rick Francois Steve Gerstenberger Cindy Greene Chip Hasselbring Gary Hemmer J. Michael Holloway Debbie Jemison Quentin Johnson Denis Lutz Thomas MacCarthy Courtney Olson Rick Parks John Pritchard Douglas Sanders Daniel Stein Aimee Winebaugh

Silver Contributors

Samuel Banks Bill Becker Mark Bennett

Jeffrey Boundy Monica Bowe Stanley Bradshaw Christopher Breyman David Brozovich Peter Brummel Andrew Butts Karen Cabrera Thomas Chamberlain Jean Claude Patricia Colwell Kathy Cook Trent Cox Van Dukeman Thomas Dunker Lenus Eggemeyer Patrick Fitzgerald Grant Franklin Dirk Gasterland William Gleason Cynthia Glover Brian Goebbert Timothy Hecht Kenneth Hendren Kelley Himmelberg Matthew Hladio Robert Hoffmann Thomas Hornstein Rhonda Houzenga Joshua Huseman Amanda James Karen Jensen Jeff Johnson Frederic Kenney Stephen King Gregory Kistler Chris Knight Kate Kristan Gregory Lykins Pam Macha Tom McIntire Elizabeth Miller George Obernagel Denise Olds William Parks Shelley Perkins Annette Pickrel Robert Plummer Jeff Rabenort Amy Randolph Richard Riggins Frank Roth Thomas Schlink Michael Shane Christine Shultz Tom Sloan John Smith Ashley Speed Bradlee Stamper Michael Tenpas Thomas Thompson David Tyrolt Steven Wannemacher Scott Wehrli Scott Weistart Diana Whitson Michael Wickkiser

Bronze Contributors

Eric Adcock Jaclyn Aldridge Jolene Bohnsack Catherine Bryant

January-February 2021 •

Peggy Campbell Jacqueline Cashmore DiAnn Chamberlain James Coons Mary Curl Susan Davis Kelly Dransfeldt Kerry Duellman Rich Eckert Patrick Flanigan Kathleen Franque Rachael Gallivan Phillip Hayes Lori Hedden Larry Helling J.R. Hock Josh Ishmael Maureen Kelley Charlie Kelly Rebecca Ketter Robin Lane Ryan Martz Randy Matravers John McEvoy Erick Mueller Matt Phillips Jamie Polend Ruth Redmon Jeff Rigsby Brenda Rupert Shellane Sauer Pamela Sharar-Stoppel Gerry Smith Marcia Stratton Joe Sullivan Tom Szews Amanda Tatro Adam Turner Whitney Valdivia Denise Ward Randy Weatherly Joanne Wenzel

Fair Share Associate Members Angott Search Group Artisan Advisors, LLC Bancare, Inc. BITS, LLC EPIC Retirement Plan Services Finastra Floodplain Consultants, Inc. Integrity Technology Solutions Mills Marketing NFP Executive Benefits Noonan & Lieberman, Ltd. Profit Resources, Inc. Shield Compliance Virtual Innovation, Inc.

PAC Sponsors

BOK Financial Institutional Group LKCS MUFG Union Bank, N.A. Northland Securities Strategic Resource Management Town and Country Bank

• 17 •

EVENTS

VIRTUAL EVENT HIGHLIGHTS from a one-of-a-kind year!

This has been a one-of-a-kind year, but the IBA has been going strong and continuing our goal of Connecting Bankers. Advancing Banking®. We’ve enjoyed bringing you critical information through a number of conferences and other events, and we hope you’ve enjoyed connecting with vendors and other bankers to share information, ideas, and programs, so you and your staff have the tools you need to succeed. Here are just a few highlights from some of our latest conferences.

WOMEN IN BANKING CONFERENCE . OCTOBER 15

s anker, open , The Girl B ew . om ce ol an th nd Natalie Bar record atte which had Conference,

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Cedric Th urman, S enio Loan Ban k of Chica r Vice President/C go, and C hief Divers diversity o and inclu ity Officer, sion in th nnie Lindsey, EVP Federal e current for The N orthern Tr Home environm ent. ust, discu ss

• 18 •

• January-February 2021

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MIDWEST BANK LEADERS CONFERENCE . NOVEMBER 5

THANK YOU TO OUR SPONSORS WOMEN IN BANKING CONFERENCE Bankers' Bank BankTalentHQ

esident congratulates Pr Randy Hultgren icago O Ch CE of d nk an nt Ba IBA Preside l Home Loan ldman of Federa ur years of Fe yo r tt fo Ma tt, O Ma CE u, d an k yo retirement. Than on his upcoming ing industry! nk ba is no Illi e dedication to th

BOK Financial Institutional Group Federal Home Loan Bank of Chicago Graduate School of Banking at the University of Wisconsin-Madison LKCS Midwest Independent BankersBank

MIDWEST BANK LEADERS CONFERENCE Approval Payment Solutions Inc. Bankers' Bank BankTalentHQ BOK Financial Institutional Group EPIC Retirement Plan Services Federal Home Loan Bank of Chicago Finastra

United Bankers' Bank

LKCS

Wipfli

Midwest Independent BankersBank Northland Securities Performance Trust Capital Partners, LLC

Brian Batt le, Direct or, Partners, LLC, serv Performance Trust ed as em Bank Lea cee for th Capital ders Con e Midwest ference.

Plante Moran RSM US LLP IBA staff man the “Comman d Center” durin the Conference g .

Strategic Resource Management UFS, LLC

BANK COUNSEL CONFERENCE . DECEMBER 4

EVP and mcee, IBA s as our e nducts a stage e n e sc e ind th ni, co A look beh sel Carolyn Settan . oun ce C n l re ra e fe n n e o G or to the C ri p l a rs a rehe

Thank yo u to our d istinguish Senior Co ed R unsel, Fe d eral Rese egulators’ Panel: A ct in g ral.

D Cent d rve Ban ir Rachel man e Com ct ce eren o r, Division Bank Counsel Conf Office of of Bankin k of Chicago | Cha Grundmeier, the Comp g sse Rehw , ID F P tr R o Director, Consume ller of the Currency | Jerry Savoy, Distr inkel, r Financia ict Cou | Counsel, Jo h n Schroed l Pro Federal D er, Region nsel, eposit Insu tection Bureau | al M rance Co onica Tyn rporation an, Regio nal

The Beat Goes On! $495

per Bank

• 20 •

MARCH 3-5 | A VIRTUAL EXPERIENCE

• September-October 2020

ilbanker.com or 217-789-9340

No Small Feat:

An Architect’s Approach to Supporting Bank Facility Down-Sizing

By CVG Architects

A

report by McKinsey & Company states that bank branch sizes have been on the decline since the mid-2000s. As experts in facility design for the financial services sector, Charles Vincent George (CVG) Architects’ direct experience over the last two decades confirms this evolution of the banking industry and forces the question: How can design architects best respond to the trend of the shrinking branch-bank footprint” while still meeting owner goals and accommodating programmatic needs?

As a point of reference, in the mid-1990s, CVG Architects’ work with Elgin State Bank involved planning and designing a 30,000-square-foot branch on a four-acre site with seven drive-up teller lanes.

By the early 2000s, the average branch bank size, as evidenced through our work with First National Bank of Naperville and others, was still rather large at around 20,000 square feet. Today, forwardthinking financial services organizations with active development programs are setting the trend by developing new micro-branches or sub-dividing

larger banking facilities to be between 1,200 and 4,000 square feet with few or no drive-thru lanes (dependent upon site capacity).

Although branch footprints have shrunk, the services provided within these facilities are largely the same – with a stronger emphasis on the customer experience, branding, and smart technology.

Advances in technology are also allowing banks to deliver the same services with fewer on-site personnel, supporting overall reductions in branch size, while also helping to keep real estate investment down.

Building on Tradition

The process begins with a thoughtful programming and planning effort that is facilitated by an open dialogue between client and architect. While best practices, prototypes, design standards, and brand adherence are always part of the conversation, our approach seeks to translate these traditional guidelines into customized design solutions that directly respond to the requirements of the specific financial institution and the unique expectations of their customers. Understanding the principles of traditional, large, bank design is imperative to being able to effectively consolidate large banks into micro-branches that offer both compliant and creative solutions.

January-February 2021 •

• 21 •

When designing micro-branches, a flexible design approach is needed to accommodate programmatic needs. Traditional bank design separates employees from customers by using barrier-style teller lines and screen-walls to isolate additional tellers operating drive-thru facilities. This separation has typically required design of two separate work areas for two sets of tellers – front-of-house and backof-house. Utilizing Elgin State Bank and First National Bank of Naperville as reference points, this traditional design approach required 2,000 SF and 1,600 SF, respectively. Today, advances in technology and security have facilitated the Universal Banker approach, allowing bankers to perform multiple roles (personal banking / drive-thru / walk-up teller services) in roughly 450 SF of meticulously designed space.

Putting it all together

How do we do it? We focus on leveraging technology – specifying self-serve kiosks, automated cash handling/cash recycling equipment, two-way video monitors, etc. – to maximize both operational and physical efficiencies and result in a flexible design solution within a reduced building footprint.

Kiosks. By replacing traditional teller lines with kiosk-based solutions, such as self-service digital banking and semi-private tablet stations that allow customers to get help from a remote personal banker, if needed, we can eliminate space-consuming physical barriers, help to minimize customer wait times, and reduce

• 22 •

employee workload – all without sacrificing security.

Equipment. McKinsey & Company states that “operating costs of bank branches drop off significantly when cash is not handled by people,” and that “once cash is handled by machines, banks can achieve a step-change reduction in security costs, compliance costs, and staffing requirements.” Appropriate equipment specification can greatly enhance operational efficiency.

Two-Way Video. The use of two-way video further contributes to the development of more efficient bank operations and helps to achieve a smaller building footprint. In addition to allowing Universal Bankers to visually communicate with drivethru traffic, the specification of two-way video monitors supports flexibility in bank design by allowing drive-thru lanes to be physically detached from main facilities when traffic patterns, property shape, or parcel size are not conducive to a singlebuilding design approach.

Above all, a bank branch is a real estate asset. As noted in a report published by PWC entitled “Retail Banking 2020 – Evolution or Revolution,” “banking was once all about real-estate – banks were located in prime locations and built to project strength, stability and safety.” Real estate – and maximizing its utilization – continues to drive activity in the built environment. As a result of the boom of large bank projects in the 90s and early 2000s, there

• January-February 2021

is currently a surplus of real estate within larger banks that can be subdivided for internal or external use. Our recent collaboration with regional banks has us utilizing existing branch bank facilities to create workspace for internal departments (i.e. mortgage services, hoteling stations for commercial bankers, and training centers) outside the confines of their corporate mega-structures. This approach brings the added benefit of providing expanded touch-points between varied internal financial services departments and their local markets. Similarly, smaller community banks with large facilities are looking to subdivide their space by integrating cafés or coffee shops into bank branches, thereby adding real estate value and creating an amenity that helps drive traffic into their branch.

Understanding Location Nuances Finally, an architect’s design approach should proactively consider the key differences between urban and suburbanrural bank facilities. Generally speaking, suburban and/or rural bank branches, while shrinking, are still trending larger than their urban counterparts. Banks in these locations tend to serve a role within the community and usually have a presence on Main Street. With a lower cost of land and the need to accommodate customers typically traveling by car, suburban and rural bank branches continue to provide parking on-site, as well as drivethru banking functions, though both amenities are being implemented at a considerably reduced

volume from 10-15 years ago.

Down-sizing efforts for existing suburban and rural banks can be seen in the trend of converting large board rooms into community rooms or, in allowing local attorneys, accountants, and even post offices to occupy a portion of their Main Street location.

Conversely, urban branch banks, reflecting the high cost of real estate, have shrunken to as small as 1,000 square feet. These facilities emphasize ATM access, self-serve functions, and walk-in

traffic only. There is typically limited or no parking available.

Conclusion

Regardless of exact project size or location, the proven strategies described above are consistently utilized by CVG Architects to respond to the micro-branch trend and are always applied on a project-by-project basis. These strategies can also be mixed and matched as ‘a la carte’ solutions to achieve desired space efficiency. Whether “small” by urban or suburban standards,

micro-branches across the board present large opportunities to be enduring and memorable through flexible and creative design.

About CVG Architects: Contact our Financial Services and Micro-Branch Architecture and Design experts directly for more information or to schedule a meeting: Jeff Lietz, VP Commercial Architecture, at jlietz@cvgarchitects.com or Jenna Samples, Project Manager, at jsamples@cvgarchitects.com.

IBA Associate Member

Strategy.

Simplified.

Strategic planning for today’s financial institution.

Get started at wipfli.com/fi-sp

January-February 2021 •

• 23 •

Tactics for Navigating Tectonic Shifts in Liquidity

By Scott Hildenbrand, Piper Sandler

This year has presented bank management teams with a multitude of issues to juggle, many of which seemingly pull in opposing directions, and most of which were not firmly on the radar to start the year. Such is life in 2020.

Some banks’ primary concerns stem from the fact that the industry has seen a shift in liquidity. Balance sheets are awash with deposits relative to recent periods while securities holdings have come down relative to assets. The build in balance sheet liquidity has come in the form of cash, with an unusually high 7.6% of assets held in cash and equivalents as of June 30.

This drastic change in the liquidity picture is best encapsulated by the significant uptick in the Cash and Unencumbered Securities-to-Assets Ratio. The ratio has surpassed the average over the past fourteen years of 20.6%, steadily climbing toward the high of 24.7% last seen in 1Q13.

Source: S&P Financial, Banks and thrifts with assets between $250 million and $25 billion

• 24 •

• January-February 2021

While every institution is unique, many banks have responded to the shift in liquidity by asking two questions: how does this affect the asset side, and what are the options on the liability side?

On the asset side, management teams wonder what to do with excess cash in a world where most bond yields are disappointingly low. Even though liquidity profiles appear strong and are trending stronger, economic uncertainty creates unpredictability in depositor behavior.

As such, some institutions feel more comfortable with investments that maintain maximum flexibility in the future – sale-ability and pledge-ability – with lower yield as a tradeoff. Other institutions have looked to extend their investment portfolios further out on the curve to increase yield, while mitigating tail risk by match funding with 5 + year structures at historically low rates. For instance, banks have worked with some firms to utilize their inexpensive, longer-dated funding mechanisms at attractive rates.

Many corners of the banking industry are concerned that low rates, slower loan origination, and excess liquidity trends are here to stay for the foreseeable future, and have begun the search for loan surrogates.

Allowing these banks to extend the duration of their liability portfolio, at a scalable level, opens the door to more asset purchase strategies. We have seen two specific asset strategies gain momentum: exploring community and regional bank subordinated debt as an investment option, and analyzing how to invest in municipals without ruining their interest rate plan.

As an alternative to extending the liability portfolio, some institutions have swapped fixed rate municipals to floating, thus obtaining an attractive yield with reduced duration risk, and protecting Tangible Common Equity. Exploring risk/reward profiles

of earning assets is nothing new to balance sheet managers, but the environment has certainly evolved since the start of 2020.

Managing excess liquidity while planning for interest rate risk management has also become slightly more complicated on the liability side. How does a bank choose from the various funding options and hedging strategies available? The decision-making process must take into account balance sheet composition (i.e. the availability of liabilities to hedge), impact to earnings and capital (in addition to liquidity) from the strategy, and practical applications, such as hedge accounting.

For accounting simplicity and hedging flexibility, it’s generally recommended to first evaluate liability hedges when attempting a shift in interest rate risk profile. In fact, many institutions took advantage of both spot-starting and forward-starting cash flow hedges over the past year. Forward-starting swaps on forecasted borrowings allow the bank to purchase longer duration assets today and know they will maintain the attractive spread in the future. For example, offerings like IntraFi Network’s (formerly Promontory Interfinancial Network) IntraFi Network Deposits give banks the ability to launch these funding contracts 6 months to 1 year in the future, while locking in their rate now to hedge against any increase in funding costs prior to launch date. This allows the bank maximum flexibility in planning its liquidity now and well into the future.

But what about banks flush with liquidity with no future funding needs anticipated?

Part of the answer arose from a surprising place: dealing with yet another source of stress—the LIBOR transition. The FASB released ASC 848 Reference Rate Reform in March 2020 to address potential concerns about the impact of the upcoming LIBOR transition on hedge accounting. Although LIBOR fallback is expected at year-end 2021, guidance is applicable immediately to help users today explore potential alternative contracts and rates. The guidance allows for the swap to be amended, switching to a nonLIBOR benchmark. When combined with broadlywritten hedge designation memos, banks can be proactive in dealing with LIBOR cessation and even potentially identify a new hedged exposure, if the hedge documentation allows for it. The bank can then modify the hedge to match the new (non-LIBOR) exposure, adjusting the fixed-rate or adding a floating rate spread to keep the transaction NPV-neutral.

Finally, the bank can amend their hedging memo to reflect the new exposure, and the hedge relationship continues without de-designation.

There is a positive balance sheet strategy development that comes from this combination. By allowing banks to consider a change to a non-LIBOR hedged item, the strategy essentially provides added flexibility to banks that have implemented strategies using wholesale funding paired with swaps, a strategy that many banks smartly continue to explore. The strategy allows those banks to consider replacing the existing funding with other sources for cheaper and more customizable wholesale borrowings or even deposit products, without any impact to hedge accounting. These products allow a bank to replicate the details of the previous funding instruments, but at a considerably discounted cost. As a result of having written flexible hedge inception packages, banks can change the hedged exposure from wholesale funding to deposits without a re-designation event, allowing the bank to pay down wholesale borrowings. For those banks that now have many more deposits than when they first implemented the strategy, reducing their current need for wholesale funding, this is a welcome change in funding source that maintains the interest rate protection they continue to need.

This rule can be applied in a variety of different ways.

Banks can make changes to the interest rate index, the spread to that index, the reset period, pay frequency, business day conventions, payment and reset dates, the strike price of an existing option, the repricing calculation, and may even add an interest rate cap or floor that is out-of-the-money on a spot basis. On the other hand, there are some aspects of the hedge that are unrelated to the reference rate reform: an institution cannot effect a change to the notional amount, maturity date, change from an interest rate to a stated fixed rate, or add a variable unrelated to LIBOR. Ultimately, none of these options singlehandedly solve the problem of too much liquidity with too few safe places to deploy them, while earning an attractive yield and protecting against the eventuality of rising rates. Similar to life in 2020, the key is to deploy a variety of creative tactics to weather the storm and emerge a stronger institution.

About the Author: Scott Hildenbrand is Managing Director | Head of Balance Sheet Analysis and Strategy, Head of Piper Sandler Hedging Services. IBA Associate Member

January-February 2021 •

• 25 •

Growth Strategies

for Any Economic Environment

By Dr. Sean Payant, Haberfeld

I

Banks consistently executing a growth strategy have approximately 2,200 retail and business checking customers per branch.

More Customers Cushion Profitability

An analysis of the data illustrates the impact core customers have on Return on Assets (ROA) and Return on Equity (ROE). What we learned from the “great recession” was banks that stayed focused on growth remained stronger. While everyone was challenged, growth-oriented banks fared much better. ROA declined less than the industry average (26% for growth focused vs. 56% for the industry), and ROE followed the same trend. Just as important, those banks that stayed the course through the crisis also came back stronger on the recovery side.

n times of uncertainty, organizations have a tendency to put the brakes on, losing sight of long-term strategic initiatives and established growth goals.

However, history has taught us the decisions your bank makes today will have lasting implications for tomorrow.

Business as usual will return and our strategic initiatives and growth goals will still be there. The key is to stay focused on growing core customers, regardless of the economic environment. Here’s why.

Having more customers is one of the best ways to guarantee strong performance in all economies.

Banks executing a growth strategy consistently have up to 2x the number of customers per branch when compared to industry averages.

To get a picture of how customers impact bank performance, we need to turn to data compiled during the great recession of 2008. For context, the average bank has approximately 1,100 retail and business checking customers per branch.

• 26 •

• January-February 2021

While nothing can completely insulate your bank from worsening financial performance during an economic downturn, the data illustrates that having more customers certainly helps.

How Do Customers “Cushion” Profitability?

Non-Interest Income: Banks executing a growth strategy simply have more non-interest income. As the customer-base increases, non-interest income also increases – not because of regular service charges, but instead through more customers utilizing income producing services, such as interchange income (average of $60 p/a/p/y) and valuing overdraft services (average of $90 p/a/p/y).

The following charts illustrate the impact that focusing on growth and having significantly more customers has on non-interest income.

More low-cost funding: 70% of the time, the first product purchased at a bank by a consumer household is a checking account. It’s 55% of the time for businesses. Checking deposits are the lowest cost funding available, with business checking deposits having a cost of funds less than .01%; this translates into improved NIM. Relational intensity: Checking customers buy additional products and services. Growing retail and business checking customers affords your bank first right of refusal on other products and services 73% of the time, averaging 5.64 retail and 5.86 business product and service relationships.

Loans from local markets: Having more customers also allows your bank to lend more money to more people in your local communities. These loans tend to have less risk.

Keys to Accelerating Customer Growth Get product right: People hate fees. Compressed margins and decreased profitability can lead to the discussion of increasing monthly service fees or adding minimum balance requirements. The Top Criteria chart shows recent research on the criteria consumers use when selecting a banking provider. Interestingly, comparing consumers of all ages with consumers under 40 years of age produces very little difference as it relates to what people desire.

Compression in bank earnings will have little impact on what consumers want from their banking partner.

Your retail and business products must be compelling if you want to have the greatest opportunity to grow core customers.

Invest in training your team: Too often our industry treats training as an event rather than a way of life.

Employees who do not understand your products and services will never be able to recognize opportunities with customers, let alone speak in terms of benefits. It is crucial your institution commit to on-going training initiatives regarding all of your products and services.

Marketing to Grow: Increase your spending on strategic marketing • Proactive – According to Novantas, 65% of consumers only consider two options when they go to move their checking account, meaning 65% of your current customers already know where they would bank if they didn’t bank with you. You must be top-of-mind before consumers and business know they want to switch. Your marketing must create the opportunity for them to pick you.

• Targeted – You need to use data and analytics to help you understand where to market before you market. Your marketing resources must be allocated to target consumers and businesses who haven’t chosen your bank yet, but could and should.

• ROI Focused – You must define what and how you will measure success before you market, not after. Make sure your marketing investment is working to create tangible, measurable results.

The past informs the present – banks that stay focused on growth reap the greatest rewards. While it may not be intuitive, now is the perfect time to make sure you have all of the right strategies in place to capitalize on the growth opportunities that present themselves in any economic environment.

About the author: Dr. Sean Payant serves as the Chief Consulting Officer at Haberfeld, a data-driven consulting firm specializing in core relationships and profitability growth for community-based financial institutions. Sean can be reached at 402-323-3614 or spayant@haberfeld.com. IBA Associate Member

January-February 2021 •

• 27 •

WELCOME

NEW ASSOCIATE MEMBERS (as of 12-25-20)

Upgrade, Inc. San Francisco, CA www.upgrade.com/landing/ institutions Upgrade is a marketplace lender having facilitated origination of ~$3 billion in personal loans since inception. We partner with community banks to give them access to prime consumer assets for income goals, customer base growth as well as co-branded digital solutions. Upgrade can offer community banks digital unsecured consumer loans, secured consumer loans, cards, auto loans as well as HELOCs.

ASSOCIATE MEMBER NEWS Association House of Chicago Association House of Chicago, a 121-year long-standing social services nonprofit based in Humboldt Park, has announced Juan Carlos Linares as the agency’s incoming President and Chief Executive Officer effective January 1. Linares joined the organization after Harriet Sadauskas, the agency’s President for over 27 years, announced her retirement effective December 31, 2020. Sadauskas ends her tenure after more than 47 years of celebrated service at Association House.

Linares is the former executive director of LUCHA (Latin United Community Housing Association) and director and assistant general counsel for IES ABROAD (Institute for the International Education of Students). He holds a Bachelor of Arts Degree in Sociology and Spanish from the University of Illinois at Urbana-Champaign, a Juris Doctor of Law from DePaul University, a Master of Law Degree from The John Marshall Law School, and an MBA from the University of Chicago Booth School of Business. He is currently a lecturer in law at the University of Chicago Law School.

Cinnaire Cinnaire announced the appointment of Vicki Mincey as Senior Vice President, Business Funding Midwest Region. For nearly a decade Mincey has been on Cinnaire’s capital management team, most recently as Senior Vice President, Capital Management. Throughout her career at Cinnaire, Mincey has been responsible for overseeing lending and equity portfolios totaling more than $4.86 billion and has been an integral part of our LIHTC capital raising and deployment team.

• 28 •

• January-February 2021

Finastra Finastra announced the availability of its next-generation data offering, Fusion Data Cloud. The suite of solutions is designed to help financial institutions improve customer engagement, grow revenue, digitize processes for efficiency, and manage risk.

Shield Compliance Shield Compliance, a comprehensive compliance management platform for banking legal cannabisrelated businesses, announced the addition of Richard H. Drennen as Business Development Officer. As the former Director of Administration and Chief Operating Officer of one of the country’s largest vertically integrated CBD manufacturers, Drennen was responsible for leading banking strategy for the company throughout Kentucky, along with overseeing business operations.

West Monroe Two Six Capital is now a part of West Monroe. Founded in 2013, Two Six Capital leverages a proprietary technology (now called IntellioTM Predict)—powered by artificial intelligence and machine learning—to advise high-tech & software, financial services, consumer, industrial and distribution, and retail companies with one primary objective: understand and project the drivers of revenue.

Combining our powerful data hub accelerator, Intellio™ Data Ops, with Intellio™ Predict offers customers an end-to-end modern data platform. Data can be ingested, cleansed, fed into AI models, and distributed in one composed technology solution.

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Congratulations to the 2020 Award Winners BANKER OF THE YEAR Thomas A. Broeckling First National Bank of Steeleville COMMUNITY SERVICE First Bank of Highland Park First Neighbor Bank, N.A. Philo Exchange Bank

January-February 2021 •

• 29 •

PREFERRED VENDOR

Trying to market in a pandemic?

See what the experts say.

By Neal Reynolds, BankMarketingCenter.com What budget is the first to get slashed in an economic downturn? As we all know, it’s marketing. As a former ad agency guy, I have lived through many a downturn. We always knew that when times started to get tough, we were the first to lose our jobs. And, when times began to improve, we were always the last to return to work. There’s an old agency metaphor for spending money in a downturn. We said it was “like shooting at ducks that aren’t there.” Well, right now, a lot of banks are looking to save their No. 2 Steel for another day.

informative and, well, a bit encouraging; despite the fact that the challenge he addresses is that of “pinched budgets plus tougher competition.”

But, perhaps they’re not ready to give up entirely on bagging a few. I found Bill Streeter’s recent post on The Financial Brand1 both

I couldn’t agree more.

Why do I find it encouraging when we’re talking about an industry being in somewhat of an “unenviable position?” Because I think I can help. Bill goes on to say: “New marketing technology can bring efficiency, which helps with budgets, but you can’t just snap your fingers to get there. It requires investment in software and talent.”

While a “new marketing technology” deficit is one of them, there

are a handful of issues banks face when it comes to marketing in today’s economic turmoil. The Financial Brand interviewed Chandramouli Venkatesan, Market Development Executive in Capgemini’s Financial Services and Capital Markets, who pointed out some of those additional issues. “Multiple touchpoints to execute a campaign, lack of standardization of campaign components and manual handling of data should be solved by a marketing resource management solution,” he said. “The problem is that many of these software tools are out of date.”

He goes on to state that talent is a tougher challenge. “To have an agile marketing team

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an institution needs a blend of expertise in digital marketing technology, data, marketing, and creative,” says Venkatesan.

He acknowledges that external help will likely be needed.

And this is where I think we can help.

For those of you who aren’t familiar with bankmarketingcenter.com, we currently work with 20 state bankers associations and over 300 banks, helping them address the challenges faced by their marketing teams. Our partner banks have access to several thousand professionally designed layouts – created by agency trained, financial services industry professionals – that range from social media messaging, banner ads and in-branch signage, to print and radio advertising.

With unlimited access to millions of Getty Images, as well as the ability to customize copy and colors, banks are able to personalize these marketing materials quickly and easily, saving valuable time and money. When Jim went on to say that “it is becoming increasingly challenging to deploy modern marketing with legacy talent, skills and mindset… and that most financial institutions will be better advised to partner with specialty organizations to provide the needed skills,” I said to myself, he is exactly right. And that is what we’ve been trying to do with bankmarketingcenter.com.

If ever there were a time when you should be making use of every marketing communication tool at your disposal, and being as efficient about the process as possible, this is it. As a financial institution, a trusted institution, you must keep your customers abreast of important economic developments, as well as the products and services that you can offer to help them navigate those developments. And you need to use every available tactic to do so: Social posting, advertising, newsletters, email, webinars, and direct mail.

While there may be fewer ducks to shoot at, that doesn’t mean you stop duck hunting entirely. It means that you just have to get better at it.

About the author: Neal Reynolds is President of BankMarketingCenter.com. Visit bankmarketingcenter. com, or contact Neal at (678) 528-6688 or nreynolds@ bankmarketingcenter.com.

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GROW YOUR BOTTOM LINE: FIND COST SAVINGS WITH THIS LINE UP OF IBA PREFERRED VENDORS UNIQUE AND MARKET-LEADING INSURANCE SOLUTION FOR FINANCIAL INSTITUTIONS, RECOGNIZED FOR THEIR UNDERWRITING AND CLAIMS EXPERTISE RICHARD FLENNER | RFLENNER@ABAIS.COM REDUCE YOUR ENERGY COSTS THROUGH APPI’S DATA-DRIVEN PROCUREMENT AND CONSULTING SERVICES JAMIE POLEND | JPOLEND@APPIENERGY.COM ARM YOUR MANAGEMENT TEAM AND STAFF WITH THE DAILY FINANCIAL INFORMATION THEY NEED TO MAKE CRITICAL DECISIONS THAT IMPROVE PERFORMANCE AND PROFITS BOB REID | BOB.REID@DELUXE.COM YOUR JOB IS POSTED ON A COMBINATION OF 7,500 EMPLOYMENT OFFICES, COMMUNITY BASED ORGANIZATIONS, AND OTHER SPECIFIC DIVERSITY HIRING SITES, AS WELL AS 100S OF OTHERS BRIAN HOFFMAN | BHOFFMAN@BANKTALENTHQ.COM ACCELERATE GROWTH, BOOST ROI, AND IMPROVE OPERATIONS WITH TOOLS AND TECHNOLOGY DESIGNED FOR FINANCIAL INSTITUTIONS OF ALL SIZES BOB REID | BOB.REID@DELUXE.COM REDUCE THE RISK AND CERTIFY YOUR LOAN PORTFOLIO AGAINST FLOOD ZONE RISKS CRAIG CALLAHAN | CCALLAHAN@FLOODPLAIN.COM IDENTIFY AND ADDRESS YOUR BANK’S UNFUNDED RISKS IN A TAX ADVANTAGED WAY TRAVIS HOLDMAN | THOLDMAN@KEY-STATE.COM

SAVE 20% - 30% BASED ON YOUR CURRENT OFFICE PRODUCT SPEND ISAAC MARES | ISAAC.MARES@OFFICEDEPOT.COM CAN ADD MILLIONS TO YOUR BOTTOM LINE BY NEGOTIATING AND REVIEWING YOUR KEY CONTRACTS UMA ZIELINSKI | UZIELINSKI@SRMCORP.COM ENABLES MERCHANTS TO ACCEPT CREDIT AND DEBIT CARDS, EBT, GIFT CARDS, FUEL CARDS AND CHECKS SAFELY AND EFFICIENTLY DANIELLE LAUSCH | DLAUSCH@APSOLUTIONS.NET

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CONTACT THE IBA FOR MORE INFORMATION TODAY! BRIAN HOFFMAN, PRESIDENT - ILLINOIS BANKERS BUSINESS SERVICES, INC. E: BHOFFMAN@ILBANKER.COM P: 217.789.9340

EVENTS CALENDAR All programs delivered virtually unless otherwise noted.

Visit www.ilbanker.com/Education-Events/Calendar-of-Events for the most current listing of events SEMINARS, CONFERENCES AND FORUMS

22

Basic Real Estate Loan Documentation

2

Introduction to Global Cash Flow

Bank Accounting for Beginners, Part 2

3

IRA Contributions

JANUARY

25 26

Creating the Right ERM Program for YOUR Community Bank

8

27

The Right of Setoff

27

Bank Accounting for Beginners, Part 3

28

Prospect & Build Relationships Virtually

29

Bank Accounting for Beginners, Part 4

14

19

20

Service Excellence Hot Topics in Compliance Universal Banking Strategies

FEBRUARY 23

Branch Leadership Series, Session 1

24-25

Universal Banker Certification Program

MARCH 3-5

The ONE Conference

16-17

Consumer Lending Bootcamp

18

Touring ACH Rules Updates

19

Basic Personal & Business Tax Return Analysis

24-25

FEBRUARY 24

HR Basics for Supervisors*

25

Heath Savings Accounts: Dealing with the Headaches*

* OnCourse Learning

GRADUATE SCHOOL OF BANKING ONLINE TRAINING COURSES

JANUARY 27

Introduction to Commercial Lending

ONCOURSE LEARNING WEBINARS

27

Opening and Maintaining IRAs

JANUARY

29

19

BSA Officer Annual Training

19

Ratio Analysis to Determine Financial Strength

FEBRUARY

21

Bank Accounting for Beginners, Part 1

Cybercrime Trends and Hot Topics in Banking

2

Issues in Underwriting Commercial Construction Loans

2

Business Law Basics and Lender Liability

2

Developing and Analyzing a Statement of Cash Flows

Administering and Monitoring Commercial Construction Loans

9

Accounting Basics / Refresher for Bankers

9

Developing and Analyzing the Uniform Credit Analysis (UCA) Model

9

Global Cash Flow Mechanics, Including Living Expenses

ABA ONLINE TRAINING COURSES

Call Report Preparation

IRA Update: Information and Clarification

Introduction to Consumer Lending

20

9

26

Treasury Management: A Powerful Tool to Increase Deposits and Fee Income

JANUARY 19

Introduction to Ag Lending

25

Analyzing Bank Performance

Bank Lines of Business

Managing Funding, Liquidity, and Capital

FEBRUARY 1

Money and Banking

8

Commercial Lending

16

Marketing Planning

22

Introduction to Trust Products and Services

IRA Online Institute

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Howard & Howard

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MIB – Midwest Independent BankersBank

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Wipfli

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Back Cover

23

January-February 2021 •

• 33 •

NEWS & NOTES First Mid Bank & Trust and U.S. Bank Named Best Banks in Illinois by Newsweek

First Mid Bank & Trust and U.S. Bank have been named to Newsweek magazine’s ranking of America’s Best Banks 2021. America’s Best Banks 2021 is Newsweek’s first-ever Best Banks rankings, recognizing financial institutions that best serve their customers’ needs.

Newsweek partnered with LendingTree, the online loan marketplace and comparison site for financial services, for the magazine’s inaugural Best Banks rankings. From more than 2,500 FDIC-insured institutions, they assessed U.S. banks and the savings and checking accounts offered based on 55 separate factors to come up with a best-in-class option in 19 categories —including the best big and small bank in every state.

American Bankers Mutual Insurance, Ltd. Distributes $2.5 Million to ABA Member Banks

The American Bankers Association announced that American Bankers Mutual Insurance, Ltd., the reinsurer for the ABA-endorsed insurance program, has declared a $2.5 million distribution to be shared by qualified ABA member banks insured through ABA Insurance Services, a member of Great American Insurance Group.

This is the 31st consecutive year that the industry’s leading professional liability and bond insurance provider has declared distributions to eligible ABA member banks, bringing the total to $91.3 million since the program’s inception. Banks that purchase their directors and officers, bond, cyber and related insurance from this program and are current ABA members are eligible to receive a distribution.

“Today’s announcement is a testament to the hard-working team at ABA Insurance Services that continues to focus on providing

• 34 •

high-quality service to our bank clients during the pandemic,” said Gary Hemmer, chairman of American Bankers Mutual Insurance Ltd. and chairman of the board of First National Bank of Waterloo, Ill.

Longtime IBA Instructor Tim Tedrick to Retire

Tim Tedrick likes to tell the story about how he started in banking.

It was 1972 and he attended Winnebago High School. The population was less than 1,000, high school enrollment was about 400. The First National Bank in Winnebago, $11 million in assets, was across the street from the high school and had four full-time employees. The bank wanted to hire part-time help and asked the high school for applicants. The criteria for employment - a boy in the top ten students of the senior class. As Tim was the only boy in the top ten students of the senior class, he got the job. That meant that instead of attending classes in the afternoon, right after lunch he would go to the bank to work.

As Tim was getting ready to go back to college, Ken Swanson, the Chief Executive Officer of the bank offered him a full-time position including an offer to pay for some ongoing education at Rock Valley Junior College. Unemployment was very high in 1974, and college graduates were not guaranteed a job. Tim took the sure thing of the job rather than the college path.

• January-February 2021

After Ken Swanson retired, Valdene Snodgrass became Chief Executive Officer. She was among the first female CEOs of a bank in Illinois.

It was she who taught Tim much of what he learned of the ways of banking and he is still grateful to her for all she provided him.

Valdene was a keen supporter of the Illinois Bankers Association and attended the annual conventions.

Many years Tim went along as well in the 1970s and 1980s. Valdene valued education and Tim attended the Illinois Bankers Consumer Lending school, the Commercial Lending School in Bloomington/ Normal, and in 1983 he spent two weeks in Carbondale at Southern Illinois University for the Illinois Bankers Association Bankers School.

Tim worked at the bank until August 1984 when he secured a position with the accounting firm Lindgren, Callihan, Van Osdol & Company Limited (LCV). Tim encouraged LCV to become more involved with IBA and worked on sending attendees to conference and education sessions.

Tim’s involvement with IBA continued. In the 1990s he was a regular presenter at the IBA Consumer Real Estate Lending School teaching the regulatory compliance section.

In October 2010 LCV merged with/was acquired by Wipfli LLP, a CPA and consulting firm from Wisconsin, and he remained a partner/principal with Wipfli.

Tim presented many more times for the IBA and in 2011 he was invited to co-present Hot Topics in Compliance with Elizabeth Snyder who had been hired by IBA as Senior Vice-President Compliance and Risk Management. Tim and Elizabeth did their tag-team twolocation presentation again in 2013.

Elizabeth left IBA for an accounting firm but continued co-presenting with Tim through 2017. Kathy Enbom, a principal at Wipfli became

Tim’s tag team partner for the twolocation Compliance Hot Topics in 2018, 2019, and 2020. In 2021 IBA switched to a single presentation as a webinar because of the Coronavirus. Also, since 2011 Tim has individually presented seminars on TRID, ARMS, HMDA, presented at annual compliance conferences, and at THE ONE Conference in 2014 and 2016.

Tim retires from Wipfli LLP May 31, 2021, after more than 48 years in and around banking in Illinois.

Part of his legacy is the hundreds of bankers who have heard him speak, attended one of his seminars or webinars, or were his clients.

Congratulations on your retirement, Tim! Thank you for all you’ve done for the IBA and the banking industry.

experience

it begins with you

If you’re ready to make professional connections and long-lasting friendships, look no further than the ABA Stonier Graduate School of Banking, taking place June 3-10, 2021. You’ll learn from the top minds in leadership development while surrounded by the industry’s finest—a diverse body of rising stars who will inspire you to be your best. Apply by May 1, 2021 to join the ranks of Ivy League-educated banking leaders.

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Join this illustrious group by connecting with us at ilbanker.com or 217-789-9340.

January-February 2021 •

• 35 •

ON THE MOVE Davenport, IA

Quad City Bank & Trust Quad City Bank & Trust (QCBT) is proud to welcome Julie Hegland to the role of Vice President, Retail Banking Manager.

Hegland

Edwardsville

TOWN AND COUNTRY BANK Town and Country Bank has announced Rob Pickerell has joined its Edwardsville location as Vice President, Commercial Banking Officer.

Freeport

SOLUTIONS BANK The bank has announced the following promotions: Betsy Johnson to President and CEO; Jeffrey Snyder to Chairman & Director of Asset Management; Jolene Bohnsack to Executive Vice President, Sales & Marketing; Edward Vock to Executive Vice President, Lending; Jeffrey Williams to Executive Vice President, Lending; Scott Greenlee to Senior Vice President, Lending; Carrie Haug to Senior Vice President, Mortgage Lending & Credit Administration; Jaime Pizzolato to Senior Vice President, Operations; Ryan Martz to Senior Vice President, Lending; Monica Sandell to Senior Vice President, Compliance & Regulatory; and Bethany Gruhn to Vice President, Human Resources.

Effingham

MIDLAND STATES BANCORP INC. John Schultz has retired as chairman of Midland States Bancorp Inc.'s board, and he has also stepped down as a director of the Effingham, Ill.-based company. Jeffrey Smith, who currently serves as chairman of the company's unit, Midland States Bank, will become chairman of Midland States Bancorp upon Schultz's retirement. Smith has been on the boards of the company and the bank since 2005 and was elected chairman of the bank in 2017. R. Dean Bingham, currently a director of the bank, was appointed to the company's board. He will serve as a class III director, with a term expiring at the company's 2022 annual meeting of shareholders.

• 36 •

Johnson

Wiliams

Greenlee

Haug

Pizzolato

Martz

Sandell

Snyder Gruhn

Bohnsack

• January-February 2021

Vock

Greenville

BRADFORD NATIONAL BANK Michelle Brown was promoted to Senior Vice President and Chief Financial Officer. Brown joined the bank in 2011 and manages the day-to-day financial operations and serves as the secretary to the Board of Directors; Highland lending officer Joanie Willis was promoted to Vice President. Willis joined Bradford National Bank in 2011 and has nearly 30 years of experience in the retail banking environment; Lauren Hagan was promoted to Assistant. Vice President. Hagan will graduate from the Illinois Bankers Association Future Leaders Alliance (FLA) in March; and Assistant. Vice President Kelsey Kendall received an additional title as the bank’s BSA Officer.

She is a graduate of the Illinois Bankers Association FLA program.

Mattoon

FIRST MID BANK & TRUST First Mid Bank & Trust welcomes Kyle Grafford to the deposit services team as Branch Manager II. Grafford will be managing the Peoria Knoxville and Peoria Adams banking centers. Also, Trever Kuipers, has been hired as a financial advisor, and Craig Anderson has joined the deposit services team in Peoria as Branch Manager.

La Salle

HOMETOWN NATIONAL BANK Hometown National Bank promoted Spencer Luecke to commercial loan officer.

TOWN AND COUNTRY BANK Town and Country Bank announced that Lexi Hannah has been promoted to Vice President, Director of Talent.

Hannah

Woodstock Grafford

Kuipers

Anderson Brown

Springfield

Paris

PROSPECT BANK Prospect Bank recently paid tribute to three retiring employees–Carol Hanlon, Dale Warmbir and Vicki Wienrank– who compiled 123 years of service combined between the former First National Bank of Gilman and Prospect Bank.

AMERICAN COMMUNITY BANK & TRUST American Community Bank & Trust is pleased to announce the appointment of Sean Cwynar to the Board of Directors. Cwynar currently serves as President of Action Health, a Bensenvillebased national distributor of packaging products. In addition, Matt Horist has been promoted to Senior Vice President of Commercial Banking, and Kim Gorham has been promoted to the position of Assistant Vice President & Administrative Services Officer following six years of service at American Community Bank & Trust.

Horist

January-February 2021 •

Gorham

• 37 •

THE LAST PAGE

And the Winner Is …

Joanne Brewe Honored with the IBA’s President’s Award

I

n 2019, the IBA created the President’s Award, to honor champions for women in banking.

Past honorees include Carol Jo Fritts from First Neighbor Bank, who was the first woman to serve on the Illinois Bankers Board of Directors, and former IBA President and CEO Linda Koch.

During our 2020 Women’s in Banking Conference (WIB), the President’s Award was presented via Zoom to Joanne Brewe, the first chairman of the IBA’s Women in Banking Committee in 2002. Joanne began her banking career as a switchboard operator at Union Bank in Streator. After staying home for a while to have a son, she reentered the working world in 1976 with The First National Bank of Ottawa, where she worked in bookkeeping, as a teller, vault teller, branch manager, head teller and finally the last 14 1/2 years as Senior

Compliance Officer. At that time, she was also responsible for BSA, Privacy, Security, Reg O, Elder Abuse and training. Joanne retired from the bank in 2014.

Joanne, who was honored for her leadership and her longtime service as a member of the Women in Banking Committee, was able to share some words of wisdom with WIB Conference attendees, including her thoughts about her time on the Women in Banking Committee, the early days of the conference, and how her involvement has impacted her career.

Over the years, the Women in Banking Conference has grown in scope and attendance, and we couldn’t think of a more fitting recipient for the President’s Award.

Congratulations, Joanne!

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

• 38 •

• January-February 2021

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