Check Date - 12/29/15 Larger Payroll1 - OS PR1 Time Clock
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100236 - Automation - D Wyatt - PFM 500 EE
Estimated Liability
Run Pre-Post Journal
Employees
$ 483 Employees Paid
Net Cash
$358,817.83
Employee Tax Liability
$122.632.76
11
Employer Tax Liability
$43,376.55
7
$524,827.14
12
Total Cash Requirement
Submit Payrun
Check Summary
482
Employee Checks
Employees Not Paid
1
Manual Checks
New Hires
0
Third Party Sick Pay
With Pay Related Changes
0
Voided Checks
Liability Summary
Cash Requirements
Net Cash
Employee Tax Liability
POC Checks
Employer Tax Liability
$6,297.39
Partial Direct Deposit
$50.09
Net Direct Deposit
$351,857.35
POC Manual/Void Checks
$461.28
Third Party Sick Payments E - Payables Total
Social Security - Employee
$33,290.69
Medicare - Employee
$7,785.92
Social Security - Employer
$67,262.34
Federal Unemployment
State Withholding
$14,175.20
State Unemployment
$0.00
Local Withholding
$118.61
$358,817.83
Total
$33,290.69
Medicare - Employer
Federal Income Tax
$151.72
$0.00
POC Payables
$7,785.92 $2,128.13 $171.81
Worker’s Compensation
$122,632.76
$0.00 Total
$43,376.55
Deductions Not Taken
Paygroup Totals - All Departments
Payroll. HR. Time. Onboarding. To help community banks enhance their portfolio of services, The Bankers’ Bank of Kentucky partners with Paycor to offer intuitive HR and payroll solutions customized to fit your clients’ business needs.
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º Upload company documents
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For more information, contact The Bankers’ Bank of Kentucky:
Lynn Ellis, lellis@bbky.com Van Davidson, vdavidson@bbky.com Ralph Ising, rising@bbky.com David Fletcher, dfletcher@bbky.com To learn more about Paycor, visit www.bbky.com/paycor
JULY 2016 KBA STAFF
OFFICERS
Ballard W. Cassady Jr. President & CEO bcassady@kybanks.com
Chairman Mr. Louis Prichard Kentucky Bank
Debra K. Stamper EVP & General Counsel dstamper@kybanks.com
Vice Chairman Mr. Michael H. Mercer First State Bank
Matthew E. Vance Chief Financial Officer mvance@kybanks.com
Treasurer Mr. Timothy E. Barnes Hometown Bank of Corbin
Selina O. Parrish Director of Vendor Solutions sparrish@kybanks.com
Past Chairman Mr. H. Lytle Thomas Heritage Bank, Inc.
Paula B. Cravens Sturgeon Director of Education Solutions pcravens@kybanks.com
BOARD OF DIRECTORS
Josh Fischer Director of Communications jfischer@kybanks.com Billie Wade Executive Director, HOPE of Kentucky bwade@kybanks.com Miriam Cole Executive Assistant mcole@kybanks.com John P. Cooper Legislative Solutions jcooper@kybanks.com Paula Cross Education Services Coordinator pcross@kybanks.com Jamie Hampton Education Services Coordinator jhampton@kybanks.com Natalie Kaelin Assistant General Counsel nkaelin@kybanks.com Michelle Madison IT Manager mmadison@kybanks.com Lanie Minton Administrative Assistant lminton@kybanks.com Tammy Nichols Convention Coordinator Finance Officer, HOPE of Kentucky tnichols@kybanks.com
Mr. Bill Allen Bank of the Bluegrass and Trust Co. Mr. William Alverson Traditional Bank, Inc. Mr. James W. Beach Peoples Bank & Trust Co. Mr. J. Wade Berry Farmers Bank & Trust Mr. W. Fred Brashear, II Hyden Citizens Bank Ms. Lanie W. Gardner First Southern National Bank Mr. Gordon Kidd United Cumberland Bank Mr. Glenn Meyers Citizens Federal Savings & Loan Assoc Mr. Michael Mineer Citizens Deposit Bank & Trust Mr. Dale Sights Field & Main Bank Mr. Thomas J. Smith, III American Bank & Trust Co., Inc.
MY TWO CENTS AND THEN SOME................8 EMERGING LEADERS..........................................9 KBA ENDORSES EFFORTLESS.......................10 BANKER APPRECIATION GOLF...................12 BANKERS ON THE MOVE................................14 EMERGING LEADERS........................................16 MURRAY BANK’S 7 TIPS..................................22 RESOLUTIONS......................................................27 BERT ELY’S FARM CREDIT WATCH.............28 KY IOLTA FUND............................................32
Our Mission Statement Together We Make A Difference
Mr. Jed Weinberg Bank of Hindman
Yvonne Savage PAC Services Coordinator ysavage@kybanks.com
Chuck Maggard President & CEO cmaggard@kybanks.com
Angie White Sponsorship Relations awhite@kybanks.com
Lisa Mattingly Director of Sales & Service lmattingly@kybanks.com
Phone: 502-582-2453 Fax: 502-584-6390 Website: www.kybanks.com
»STRAIGHT»TALK».........................................6
Mr. John T. Taylor PBI Bank
WE KNOW BANKS
Kentucky Bankers Association 600 West Main Street, Suite 400 Louisville, Kentucky 40202
CHAIRMAN’S CORNER........................................5
Mr. Ryan Curtis Steger Town Square Bank
Katie Rajchel Staff Accountant krajchel@kybanks.com
Steve Whitlow Systems Engineer swhitlow@kybanks.com
CONTENTS
Brandon Maggard Account Representative bmaggard@kybanks.com
Our Commonwealth
One Voice Unifying Banking in Kentucky The KBA is a nonprofit trade association that has been providing legislative, legal, compliance and educational services to its member institutions since 1891. The KBA’s directors and staff work together with its members to make the financial services industry a more effective and successful place to work. The strength of the KBA is bankers unifying as an industry to speak as one voice.
Donna McCartin Benefit Support Specialist dmccartin@kybanks.com Audrey Whitaker Insurance Services Coordinator awhitaker@kybanks.com
The purpose of the Kentucky Bankers Association is to provide effective advocacy for the financial services industry both in Kentucky and on a national level; to serve as a reliable and responsive source of information and education about areas of interest to the industry; and to provide a catalyst and forum for collective industry action. The KBA does this in four ways: 1. Government relations & industry advocacy 2. Information interchange 3. Education 4. Products and services
ADVERTISE/SPONSOR Call Angie White 502-736-1284 or email awhite@kybanks.com
MAGAZINE
SUBMIT/SUBSCRIBE Call Josh Fischer 502-736-1283 or email jfischer@kybanks.com
Kentucky Banker Magazine (KBM) is the official monthly periodical of the Kentucky Bankers Association (KBA). No part of KBM may be reproduced without written permission from the KBA. The KBA is not responsible for opinions expressed by outside contributors of articles published in KBM.
CHARITABLE MATCH PROGRAM Making Contributions to your Kentucky Banker PAC ...it’s as Easy as 1-2-3! by Yvonne Savage, KBPAC Services Coordinator ysavage@kybanks.com / 502-736-1267
1) Select a Charity
The bank can either a) select a charity that will be the matching recipient; b) allow the employees to select the charity; or c) offer a selection of charities.
Making contributions to the KBPAC doesn’t have to be complicated. One easy way to contribute is by using the Charitable Match program. 2) Spread the Word Communicate to your staff that for each dollar that they Here’s how to start your own Charitable Match pro- contribute to the KBPAC, the bank will match that contrigram; it’s as easy as 1, 2, 3. bution with a donation to the charity selected in accordance with No. 1. Many banks already have a charitable contribution fundraiser for their staff. It may be a collection to give to char3) Kick off your Fundraiser ities such as the United Way, American Cancer Society, Do a Jean’s Day, have a luncheon, or an employee training Feed the Children, or a local charity, to name just a few. to kick off the fundraiser. If your employees are already giving, this is an opportunity for their money to go twice If you do have a charitable contribution fundraiser for as far. You can have multiple events, or one yearly event, your staff then you already have the ideal situation, so the choice is yours, so be creative. skip step 1. If you don’t have a charitable contribution fundraiser for your staff then just follow these three easy So that’s it. It’s as easy as 1-2-3! steps to take advantage of our Charitable Match program. Need more information about your KBPAC? Let us come and talk to you about how easy this Charitable Match program is, the importance of the KBPAC to banking in Kentucky and how to make your charitable dollars go even further. Email ysavage@kybanks.com Contributions to the Kentucky Bankers Political Action Committee and Kentucky Bankers Committee for State Government (each referred to as KBPAC in this disclosure) will be used in connection with state and federal elections, respectively. Contributions to KBPAC are voluntary and may not be deducted as charitable contributions. KBPAC may not accept corporate contributions. Contributions will be reported to the Kentucky Registry of Election Finance and the Federal Election Commission, as required. You may decline to contribute without fear of reprisal. You may contribute more or less than the amounts suggested and you will not benefit or be disadvantaged because of the amount contributed or the decision to not participate at all. The information being provided herein with respect to the KBPAC is for informational purposes only and is not a solicitation by, or an invitation to contribute funds to, the Political Action Committee. Any contribution received from non-eligible donors will be returned.
CHAIRMAN’S CORNER
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Don’t Be Afraid to Innovate Following the Herd is a Sure Way to Mediocrity Louis Prichard, KBA Chairman President & CEO, Kentucky Bank
Recently, the FDIC held a meeting with a group of financial services providers, known in today’s parlance as “Fintech” providers. To my knowledge, banks were not included in this gathering to discuss the ways “technology” or “digital” based services can or are being provided to consumers. It made me wonder if the FDIC thinks we are not innovative enough to be included. Then that led me to ask the question of our industry, “Are we innovative enough, and what does innovation really mean?”
do, want done online or through mobile devices. Additionally, customers will, and do want “value added” services. For example, we can help manage their finances through budgeting assistance and finance models. Recently, I read of a bank that created a new children’s online banking service that helps expectant parents model and plan for their children’s futures. It is evident that we, as an industry, already have platforms to deliver these types of services but the question is do we have the ability to deliver in an acceptable way to our customers. We need to ensure that there is value in the service, but it must be easy to use and our customers should have a positive experience, not a confusing and frustrating one. Because of these customer expectations, it will likely drive us to look outside our typical resources. My guess is that we will be hiring retailers, customer experience professionals, and people with no banking experience who have a deep understanding of customer needs and wants. Many analysts say we are in what some have dubbed “the customer-led era of banking.” My contention is that we, as an industry, have always been focused on customers’ needs, wants, and expectations and therefore we have always been ready to deliver those services as the needs change. As members of the KBA, we have a real opportunity to take advantage of the over 50 vendors with whom we are associated to help us pursue ways to be more innovative. We should try to capitalize on those opportunities.
It is evident that we, as an industry, already have platforms to deliver these types of services, but the question is, do we have the ability to deliver in an acceptable way to our customers.
As an industry, we are faced with a barrage of new entrants into our space and, more importantly, heightened customer expectations. For example, Pay Pal and internet based alternative lenders can, and have moved customers away from the more traditional banking services. Unquestionably, there is a demand for these offerings, and the demand will only continue to increase. The fact of the matter is that banking services are becoming far more accessible because of technology and, as such, now the consumer is changing how they think about “banking.” We are no longer just a bank, a physical location, but a vehicle of delivery. This does not mean that the branch is dead, but rather its purpose and functionality may change. The evolving focus is one of customer satisfaction, new services, and convenience. Although a bit daunting, this change and desire for digital banking and Today’s customers have higher expectations than ever; our new delivery channels will actually enhance our opportuni- job is to create and capture new innovative approaches to ties to strengthen relationships with our customers. attract and retain relationships. Many of us may argue that with the new and additional regulatory burdens we are In my mind, to compete we will need to create an engaging hamstrung and limited in our ability to be innovative. I do and holistic approach to our customer experience. Custom- agree that it is more challenging in today’s environment, but ers do not want just one point of access to services or prod- those who look to be innovative will not only survive but ucts. Anything that can be done in a branch they will, and will prevail as leaders in the banking industry. UNITED IN SERVICE
www.kybanks.com
JULY 2016 | KENTUCKY BANKER 5
»STRAIGHT»TALK»
125
Kentucky Bankers Strike Back Let’s get our customers involved in regulatory relief! to getting unjustly beaten is to get mad, and fight back. Fighting back in the legislative arena can take many forms. The most obvious is the lobbying that John Cooper, Debra, myself and you do in Frankfort and DC on specific bills of interest to our members. When we walk into a legislator’s office, we represent the industry. In our favor, in these efforts, is your reputation for safe and sound banking practices, community support and strength of unity. But, when Debra, John or I make visits to represent you, our voice only carries so far. At some point, the legislators need to hear from those directly impacted. Thus, fighting back also includes efforts of our membership and the board in speakOur unity as an association originates in many places - in ing up to legislators and regulators and letting them know our membership, in our communities, in our staff and espewhere we stand. cially, in our leadership. The KBA’s Board of Directors model the unity and wisdom that keeps our association one of The KBA board and other members can fight back by raisthe most respected in the country, and continues to propel ing their concerns through one-on-one visits or phone calls, us forward in these tough and ever-changing times. or through more organized efforts, like our annual WashThe use of the word “board” to reference the collected leadington trip. We just returned from our most recent annual ership of a body or corporation has roots leading back to Washington trip and I was so pleased with the participatthe 16th century; the word’s origin to refing bankers and their representation of erence a council of leaders is derived from Our unity as an their banks, their communities, the KBA its common definition as a hunk of wood and our commonwealth. These bankers used in the making of a table. Leaders dat- association originates did not shy from the difficult issues and ing back to Biblical times have always used in many places - in brought it to our Congressional delegates, the table, made of boards of wood, to have challenging them and providing real exour membership, meaningful gatherings where decisions of amples of the burdens of a community great significance were made. in our communities, bank in the aftermath of Dodd-Frank. Our industry needs to speak out regularly in our staff and We have been fortunate over the years and with the conviction that was shown to have a Board of Directors who have especially, in our by this group of Kentucky bankers. But, not been afraid to take risks when faced sometimes even more is warranted. with the opportunity to lean into a wellleadership. thought out chance at growth. We have a When Bill asked about ways to fight our board now who are knowledgeable about legislative challenges, he recognized the need for a differthe current financial landscape and are ready to meet those ent voice to communicate the struggle of the community challenges with action and innovative ideas. banker to those in Congress, and the conversation led to the realization that there is no better voice than the one that At our most recent Board meeting Bill Alverson, President is most acutely feeling the effects of over-regulation - our of Traditional Bank representing banks with assets of $1B or banking customers. Customers of our banks, as a result of more, brought up the need for Congress to pass legislation Dodd-Frank and the regulatory aftermath, pay increased that tailors compliance regulations to the size and complexfees, provide seemingly unlimited information for stricter ity of the financial institution targeted (the TAILOR ACT). loan applications and procedures, find credit more difficult Bill asked what banks can do to move the needle on this to obtain and, the most disturbing of all, they walk into a issue. I have always believed that the appropriate response continued on next page 6 KENTUCKY BANKER | JULY 2016
www.kybanks.com
UNITED IN SERVICE
»STRAIGHT»TALK»
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continued from the previous page
bank that used to feel like family, to find that the bank can no longer treat them in accordance with the reputation and relationship built over the years due to the overbearing regulations of Dodd-Frank. The customers are affected by regulatory burdens and they are constituents of our Congressional delegation. These customers have stories that they can and should share with lawmakers, and we must facilitate the communication of their stories to those who need to hear them.
access to a computer tablet or smartphone—such as providing a lobby computer terminal or tablet that is not connected to the bank server, but which can be used by customers with the assistance of bank employees. And, for those who are not comfortable with technology, a simple thing like a form questionnaire can be on hand which prompts the customer to voice their concerns and then signed. This form can be scanned or entered by a bank employee and communicated to the appropriate delegates in DC.
Bill started this conversation and we need to listen. Each and every Kentucky bank must figure out the best way, for their particular bank and customers, to get those customers negatively impacted by regulatory burden to relate their stories to DC. And, the KBA must help you do that. Some of the things that were discussed at our board meeting were educating all bank staff to recognize comments and frustration resulting from regulatory requirements. Once it is recognized, the customer should be encouraged, right then while the emotions are strong, to voice that frustration to their Senator or Congressman in DC. How do we get that done? That is the million dollar question. They should be provided with links/email addresses for sending comments. Technology should be available for those who do not have
Consider these efforts. I cannot think of anything that would be more effective in Washington! The KBA will be making a concentrated effort to come up with avenues to accomplish this approach to customer advocacy. We will create a form right away. We will help you educate your staff on the proper conversation. If you have other needs, or if you think of other possible ways to get customers engaged in this discussion, let us know. Let’s get our customers involved in regulatory relief!
Ballard Cassady, KBA CEO bcassady@kybanks.com
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my 2 cents
And then some
125
I Am Counsel, Hear Me Roar! Debra Stamper KBA Executive VP & General Counsel dstamper@kybanks.com
gaged in and how proud they were with the materials and joint efforts they have made with certain public libraries. He was in some ways different and in some ways the same as other presenters we have had from the CFPB. The message was the same, but his demeanor made it clear that he believed the message and that we would too, if we could just hear him.
Okay, I admit it. I had a momentary melt down at the Regulators Forum (Lexington location). It wasn’t planned and By the time he had finished, I was just barely in control of it wasn’t pretty. But, it was my most honest thoughts exmy ability to speak. What I really wanted to do was just pressed out loud with no filter. roar and express my most primal reaction to the frustration that has been building up inside of me. But instead, This is how it happened. I pulled out my handy soapbox. I keep it with me just for such emergencies! When the moderator asked for quesOn June 23, 2016 I attended the Regulators Forum in Bowl- tions, my hand shot up like that overzealous student who ing Green. This year the format was slightly different, as always wants to be the first to answer. Unaware of what he questions were held to the very end. I had a meeting back was about to witness, the moderator called on me. in Louisville and knew that I would have to leave early, before the Q&A. The CFPB representative was the last to My first statement was “I don’t have any questions, because speak. He started explaining the mission of the CFPB and you cannot answer what I need to know. I just have some suggested that the CFPB was misunderstood. His premise statements in response to what you have said.” Innocent was that if he could explain what their job was, we would be enough, right? But then I followed it up with “I believe that more understanding. That was all I needed to hit the road the CFPB has a borderline personality disorder.” That was for my next meeting. where I went south. On June 24, 2016 I attended the Regulators Forum in Lexington. I am sure that the CFPB representative was ultimately wishing that I had another meeting in Louisville. But, I did not. So, I got to hear his entire presentation. And, the longer it went on, the more aggravated I became. I was really proud of my ability to contain my comments until after he had concluded—it was hit or miss there for a few minutes. The CFPB representative explained, as he did in Bowling Green, the mission of the CFPB and the woes of the world. He went over the details of the regulations yet to come. He commented on how the CFPB provides all the information needed on their website for financial institutions and consumers. He particularly stressed how unfairly financial service providers treated customers. He commented that a $30 overdraft charge should not be assessed against a small amount, giving the eternal example of a $5 cup of coffee! He commented that consumers flip through banking disclosures on their cell phones the same way that they select a movie on NetFlix and warned that we needed to do a better job of presenting these disclosures in such a way that they read AND understand them! He remarked on the financial literacy efforts that the CFPB are en8 KENTUCKY BANKER | JULY 2016
I started by commenting on the fact that the CFPB rallies round collecting consumer complaints, but doesn’t tailor regulations in response to those complaints. They just do what they want. Then I moved on to the overdraft comment. I ranted on about how overdraft fees are not convenience fees. They are fees designed to both curb irresponsible behavior and to compensate the bank for the rampant fraud and losses experienced when the Starbucks guzzling entitled consumer doesn’t make good on their increasing debt. WHAT HAS HAPPENED TO CONSUMER RESPONSIBILITY!?! Next up, disclosures. I reminded the CFPB that the disclosures that consumers are flipping through on their smartphones are disclosures designed and required by the … wait for it …. CFPB! Anything that we could do to change that would possibly subject the bank to regulatory penalty or drive the customer away because it is too inconvenient. I also criticized their website—I suggested that if a banking attorney with some years of experience could not navigate their website with any sense of confidence, it is unlikely that anyone could. I suggested that the level of regulatory burden being placed on banks for such things as increased HMDA fields, reconciliation to the penny, over documentation requirements on
www.kybanks.com
continued on next page UNITED IN SERVICE
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my 2 cents
And then some
continued from the previous page
loans and customers not in default, is putting community banks out of business and driving good customers to less regulated financial providers. I stopped after a while, but then I started thinking about some other things and a few of the comments he made in response to my previous rant. So, I had to stand up again…This time I expressed my opinion that consumers have a right to be foolish with matters of finance. It is not a bank’s responsibility to parent them. I gave the example of elder abuse. The KBA has hosted many programs on the topic of elder abuse. One message that the presenters, even presenters from the Attorney General’s office, have been clear about is that aging does not void your right to make poor decisions with your money. I provide an example: An elderly customer comes into the bank with a young, affectionate friend. The elderly customer withdraws a large sum and hands it to the friend. You cannot assume that the customer is being manipulated. You can have a private discussion with the customer to make sure that they are not being unduly coerced, but you cannot put your judgment of cost/benefit in the place of the customer’s. The same holds true if a younger customer seems to be a reasonably educated, competent consumer. So, if the cus-
tomer wants to buy $5 cups of coffee three times a day and the overdraft fees have been disclosed as required by law, that should be on the customer. If the customer is borrowing $40,000 to buy a new car and they don’t care to read the terms of the loan disclosed as required by federal law, that should be on them. If a college educated customer has had a credit card for four years and never been late on a payment and they ask for a credit increase, banks should be able to assume that the customer has the capacity to make that request. Despite the CFPB representative’s comment that the definition of a reasonable consumer should be modified to account for technology and impatience of the customer, I don’t believe that banks should have to investigate whether that a customer has a good credit rating only because his or her parents were making the payments in order to keep their adult child from learning from their mistakes. I am sure that I said some other things. I am pretty sure that I did not use expletives or personally attack anyone in particular. Now, I am riled up again. Look for my notes taken from the forums on our website. I am going to meditate my blues away now.
YOUR NEW KBA EMERGING LEADERS
BACK ROW: Eli Barber, Citizens Commerce National Bank; Jesse Johnson, The Farmers National Bank of Danville; Emerson Ballard, Town & Country Bank and Trust Company; Brad Mattingly, The Farmers National Bank of Lebanon; Tyler Crum, Citizens Bank of Kentucky, Inc. FRONT ROW: Lonnie Gentry, First Security Bank; Michael Laxton, United Cumberland Bank; Stephen Cambron, Home Federal Bank Corporation; Carrie Chaney, Citizens Guaranty Bank.
KENTUCKY BANKERS ASSOCIATION
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KBA Announces EFFORTLESS as an Endorsed Vendor The Kentucky Bankers Association (KBA) is pleased to announce Effortless Defense as one of our newest KBA Vendor Solutions. Effortless Defense provides custom-engineered security solutions and continuous monitoring for cybersecurity threats. Effortless Defense passed a stringent due-diligence process to earn the Endorsed Vendor seal of approval. With the demand for cybersecurity at an all-time high, Effortless Defense has developed an advanced, stand-alone security solution. Every day we see more headlines in the news - companies losing customer data, having servers attacked or erased, or data centers infiltrated with no knowledge or response plan. It’s more important than ever that businesses trust the security of their data to the right data center, supported by the right team of engineering experts that can provide continuous monitoring and real-time solutions.
EFFORTLESS DEFENSE: * Goes vastly beyond normal firewall, spam, & virus detection capabilities * Monitors & alerts current & emerging threats, targeted attacks, & provides zero day defense * Detection & correlation of threats from web and email * Security-as-a-Service * Centralized dashboard * Support through their Tier-1 monitoring solution allowing you to be notified faster * Deploy the hardware on-site for data collection * Data collected is sent to your dedicated correlation device for real-time analysis The Effortless Defense Solution is available as software that can be deployed on bare-metal core servers or as a VM in virtualized environments. The Effortless solution works with your existing Firewalls, Secure WEB Gateway, and IPS devices by pushing and blocking IP addresses, URL’s and signatures to these devices programmatically or with manual intervention, if desired. The Effortless Defense is a solution developed to detect advanced persistent threats, Zero Day Malware and targeted attacks specifically to address many of the shortcomings of the Firewall solution. To sign up for a complimentary 30-day trial and see how Effortless Defense will monitor attacks at your bank, go to this website to submit your request: http://www.effortlessoffice.com/kbapromo/
For more information on Effortless Defense contact: Selina Parrish, 502-736-1282 or sparrish@kybanks.com “Effortless Office provided the KBA with an “extra – layer” of protection in this world of increased risk of cybersecurity. Once installed, their appliance provided us with instant feedback of any abnormal behavior on our network along with daily and weekly reports of all activity. Their engineers are friendly, knowledgeable and available with any questions that we might have.” Steve Whitlow, Systems Engineer, Kentucky Bankers Association
10 KENTUCKY BANKER | JULY 2016
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KBA Insurance Solutions Banker Appreciation Golf Outing, Part 2
Top Two Teams Advance to Play Valhalla in the KenBanc Cup MT. STERLING, Ky. — The second regional Banker Appreciation Golf Outing was held on May 26 at Old Silo Golf Course in Mount Sterling, Kentucky. The weather didn’t look promising early, but the skies cleared about 15 minutes before the golfers teed it up. “Our second event was another sterling success. The staff at Old Silo really put on a first-class event,” said Chuck Maggard, President and CEO of KenBanc Insurance Services. “I’m very happy that we were able to do this for our bankers again at Old Silo.” The winning team (score 64; -8) was comprised of Brandon Maggard with KBIS, Emerging Leader Tyler Crum of Citizens National Bank of Paintsville, Tommy Booth with Middlefork Insurance and Christopher French with the Bank of the Bluegrass (pictured below). The Runner-up team (score 65; -7) consisted of James Hay of Peoples Bank of Kentucky, Greg Wilson, Ted Nairn and Estill Carter all of First Commonwealth Bank (picture below). Chas Allen representing Commercial Bank of West Lib-
First Place 64
12 KENTUCKY BANKER | JULY 2016
erty won the Long Drive contest with a really long poke. Lou Moore of Banc Consulting Partners won the Closest to the Pin. “I would like to thank our sponsors for making these events possible. Their support got this new tradition off to a great start,” added Maggard. “Congratulations to the four winning teams that earned the chance to compete at Valhalla in August for the first annual KenBanc Cup!”
Runner-up 65
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KENTUCKY BANKERS ON THE MOVE
125
Alan Jones
Kevin Arnold
Alan Jones was hired as Senior Vice President, Credit Officer, by First Security Bank. Jones has 20 years of experience in banking and credit, including business development, credit administration, loan review and management. A graduate of the University of Southern Indiana, Jones received a BS degree in Business Administration with an emphasis in Finance.
Farmers National Bank is pleased to announce that Kevin Arnold has been named Vice President, Head of Commercial Lending. He joined Farmers National Bank in 2002 and has worked in commercial lending since 2007. He is a graduate of the KBA’s General School of Banking and the Graduate School of Banking at LSU.
Andy Miller
Kathy Parker
First Security Bank has expanded its Compliance department with the hiring of Compliance Officer Andy Miller at the corporate headquarters in Owensboro, Kentucky. Andy has over 18-year’s experience in banking, with 10 years in compliance regulation. He has held various positions in management, loan operations, sales, retail banking, and customer service.
Community Financial Services Bank recently promoted Kathy Parker to Vice President, Chief Operations Officer. This promotion was unanimously approved by President/ CEO/Chair Betsy Flynn and the Community Financial Services Board of Directors. This move continues to ensure customer service and secure the future of CFSB.
Angela Turner
Kathi Nickel
First Security Bank has hired Angela Turner in its Loan Operations department at the corporate headquarters in Owensboro, Kentucky. Turner joined the bank as Vice President/Loan Operations Manager. Angela comes to First Security Bank with over 15-year’s experience in banking, holding various positions with responsibilities including management, default operations, loss mitigation, foreclosure, collections and customer service.
Kathi Nickel joined First Security Bank as Vice President, Credit Officer and Special Asset Manager. Nickel has an extensive background in commercial banking, credit administration, and special asset management. She graduated from Purdue University with a Bachelor of Science degree in Agricultural Economics.
Chris Besecker
Gwen Simpson
First Security Bank has expanded its Information Technology department with the hiring of Information Technology Specialist Chris Besecker at the corporate headquarters in Owensboro, Kentucky. Chris comes to First Security Bank with over 15 year’s experience in management, system engineering, and network administration. He earned a BS degree in Systems Management with a concentration in Information Systems from WKU.
Gwen Simpson joins First Security Bank as Assistant Vice President/Banking Center Manager at the South Frederica Banking Center in Owensboro, Kentucky. Gwen has over 13-year’s experience in banking. She has held various positions in management, audit/compliance, sales, retail banking, and customer service, most recently with PNC Bank.
Chris Sparrow
Dale Cinnamon
Farmers National Bank is pleased to announce that Chris Sparrow has been promoted to Vice President, Controller. He joined Farmers National Bank in 2008, working in both the credit and lending areas until becoming a financial analyst in 2012. Sparrow earned his undergraduate degree and BA from EKU. He is a graduate of both the KBA’s General Banking School and the Graduate School of Banking at LSU.
Farmers National Bank is pleased to announce that Dale Cinnamon was promoted to Senior Vice President, Head of Lending. He joined Farmers in 2013 as Vice President, Mercer County Market Manager, focusing on commercial and agricultural lending. Cinnamon has over 35 years of lending experience and is a graduate of UK with a degree in Agricultural Economics.
Blake Shewmaker
Corrine Arcuri
Farmers National Bank is pleased to announce that Blake Shewmaker was named Vice President, Mercer County Market Manager. He has worked at Farmers National Bank since 2004 in the Mercer County Market. He is a graduate of Centre College, earning a degree in Economics. He is also a graduate of the KBA’s General Banking School.
First Security Bank has hired Corrine Arcuri in its Loan Operations department at the corporate headquarters in Owensboro, Kentucky. Arcuri came to First Security Bank with over 5-year’s experience in customer service and mortgage processing. Corinne is currently attending Western Kentucky University, where she is working toward a Bachelor’s of Science Degree in Interdisciplinary Studies.
TO ANNOUNCE A PROMOTION: EMAIL PHOTOS & ANNOUNCEMENT TO jfischer@kybanks.com A promotion announcement in KENTUCKY BANKERS ON THE MOVE consists of: banker name, bank name, branch, new position, previous position, college and hometown. Submissions are published based on space and editorial approval. 14 KENTUCKY BANKER | JULY
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Caroline Korte
Marra McMillan
Caroline Korte has joined the team of Paducah Financial Consultants located at Paducah Bank. The addition of Korte will help Paducah Financial Consultants grow and expand its depth of investment services while also allowing it to continue its tradition of offering personalized, unbiased guidance to clients. Korte is an LPL financial advisor specializing in wealth accumulation and retirement planning.
Marra McMillan has joined the team of The Paducah Bank and Trust Company as a Private Banking Relationship Manager. McMillan most recently held the position of Director of Operations for Baptist Health Medical Group, where she was responsible for directing the overall practice and operations of all Paducah medical offices. Overall, she has 12 years of experience in community health services and healthcare administration.
Landon Rone
Nicholas B. Rapier
Landon Rone was promoted to Credit Analyst. He began at First Security as a Loan Processing Specialist in June 2015, and joins fellow Credit Analyst Dayne Higginbotham in analyzing the customer’s financial capacity and risk.
First Farmers Bank Holding Company and Town & Country Bank and Trust Co. appointed Nicholas B. Rapier (Nicky) to serve as a member of the Board of Directors. Rapier is 1979 graduate of Bardstown HS and 1983 graduate of Morehead State where he earned a BBA in Accounting. Nicky has held leadership roles on numerous community Boards and Committees in Bardstown and Nelson County, and organizations throughout Kentucky.
Laura Strunk
Roy Weeks
Community Trust Bank, Inc., announced that Laura Strunk has been hired as the new Assistant Vice President / Branch Manager of Community Trust Bank’s Somerset North Office. Mrs. Strunk’s responsibilities include providing consumer, residential, and commercial lending options to new and existing client relationships by offering financial solutions to individuals and businesses in South Central Kentucky.
Citizens Union Bank in Shelbyville announced the bank has hired Roy Weeks as a Mortgage Originator. Roy has worked in the financial industry for over 21 years in mortgage lending, commercial loans and branch management.
Lauren Smith
Susan Guess
First Security Bank has hired Lauren Smith in its Loan Operations department at the corporate headquarters in Owensboro, Kentucky. Smith started with First Security Bank having over 4-year’s banking experience in customer service, loan processing, flood regulation, and debt collection. She most recently worked with Fast Pay Day Loans as a customer service representative. Lauren attended Owensboro Community and Technical College.
Susan Guess, Senior VP of Marketing at Paducah Bank, was elected vice chair of the Murray State University Board of Regents yesterday. Guess is a 1987 graduate of MSU where she earned a Bachelor of Science degree in public relations. She also earned a master of public administration at the University of Louisville. Guess was just the second woman to chair the Paducah Chamber of Commerce Board of Directors.
Linda Dunn
Courtney Barker
Farmers National Bank is pleased to announce that Linda Dunn has been promoted to Vice President, Loan Operations Manager. She has worked in the Loan Department for over 11 years and for Farmers National Bank since 2002. She is a graduate of Eastern Kentucky University with an associate’s degree in Paralegal Science, and the Kentucky Bankers Association General Banking School.
Courtney Barker has joined Bank of the Bluegrass & Trust Co. as Relationship Manager-Deposit Production/ Treasury Management Champion. A Kentucky native, Courtney graduated from the University of Kentucky and the KBA General Banking School. She brings 10 years of banking experience with her.
Lisa Murray
Chris French
Lisa Murray has joined the team of Paducah Financial Consultants located at Paducah Bank. The addition of Murray will help Paducah Financial Consultants grow and expand its depth of investment services while also allowing it to continue its tradition of offering personalized, unbiased guidance to clients.
Chris French with Bank of the Bluegrass & Trust Co., has been promoted to V.P., Relationship Manager and Commercial Lender. Born in Louisville, Ky., Chris moved to Lexington in 2002 to attend the University of Kentucky.
TO ANNOUNCE A PROMOTION: EMAIL PHOTOS & ANNOUNCEMENT TO jfischer@kybanks.com A promotion announcement in KENTUCKY BANKERS ON THE MOVE consists of: banker name, bank name, branch, new position, previous position, college and hometown. Submissions are published based on space and editorial approval. Celebrating 125 Years
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Kentucky Bank Announces Fightmaster Retirement, Eason to Take on New Role
PARIS, Ky – Kentucky Bank announces the retirement of Nancye Fightmaster, Market President for Bourbon County. She will be remembered as a committed and friendly leader. Nancye first joined Kentucky Bank in 1991. In 2004, she became the Market President of Bourbon County. Fightmaster was very involved with many community associations, she shared her time and served with many local organizations. Nancye stated, “As I reflect on my career here at Kentucky Bank, I am proud of what we have accomplished by continuing to serve our community and by being one of the cornerstones of the economy here in Bourbon County.
I have certainly enjoyed my career at Kentucky Bank and will miss the day-to-day interaction with my customers.” Fightmaster remarked about her the new market president, “I am equally pleased to introduce the new Market President for Bourbon County, Mr. Brandon Eason.” Eason grew up in Bourbon County. He is a graduate of WKU where he earned a BS degree, and UK where he received his Masters of Business Administration. He is also a graduate of the Stonier Graduate School of Banking. Eason began his career with Kentucky Bank in 2003, serving as a consumer loan officer, mortgage loan officer, and then as a commercial lender. He has been Market President for the Jessamine County Region of Kentucky Bank since 2007.
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First Kentucky Bank and FNB Bank Step Up for Mayfield Relief Fund MAYFIELD, Ky, - First Kentucky Bank and FNB Bank team up to support Mayfield’s Tornado Relief Fund with a joint $5,000 donation to the disaster relief efforts that will assist the families impacted by the tornado that ravaged Mayfield-Graves County on Tuesday, May 10, 2016. Both First Kentucky and FNB were founded in Mayfield, KY and have a rich history of serving Mayfield-Graves County for over 100 years. Management Teams from both banks felt strongly that it was important to step up together to serve the victims of the tornado. First Kentucky Bank President/CEO David A. Long stated, “When tragedy strikes so close to home, I hope the community finds reassurance in seeing the two banks most closely connected to this community come together to pool their resources to assist in this effort.” “First Kentucky & FNB work each day to make a difference for people and businesses in this community. We are happy to join with First Kentucky in a united effort to support those directly impacted by the recent storm,” said Marty Nichols, President/CEO of FNB Bank, Inc. The funds collected through the Mayfield Tornado Relief Fund will be managed by a committee filled with lo-
cal city and county officials. The committee will carefully assess the needs of the families impacted and focus on those without insurance and those needing assistance to meet deductibles, etc. Monetary donations for the Mayfield Tornado Relief Fund will be accepted by His House Ministries and can be mailed to the following address: Mayfield Tornado Relief Fund C/O: His House Ministries 1250 State Route 303 Mayfield, KY 42066
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Small Banks Become Collateral Damage in CFPB’s Payday Plan by Kate Berry, American Banker Community bankers are unexpectedly caught up in the Consumer Financial Protection Bureau’s proposal to rein in payday lending, with some saying the plan would jeopardize their ability to provide cash-strapped customers with small-dollar loans. Roughly 75% of community banks currently offer small-dollar loans to customers, though many do not actively advertise them. Such loans typically make up less than 3% of a community bank’s overall loan portfolio, according to the Independent Community Bankers of America. On its face, the CFPB’s plan could make offering such loans a compliance headache at the very least. But bankers said they plan to offer them regardless because their customers need them. “We will find a way to offer the loans,” says H. McCall Wilson, president and CEO of the $425 million-asset Bank of Fayette County in Piperton, Tenn. “This sounds tacky, but we’re the answer to a prayer when these consumers need someone to help them.” Thomas Richards, president and chief executive of the $63 million-asset Owingsville Banking Co. in Kentucky, agreed: “We will continue to make these loans.” Community bankers are lumped in with payday and installment lenders in trying to figure out how to provide small-dollar loans that fit within the CFPB’s complex 1,341-page proposal. The CFPB’s plan would cover shortterm payday loans, auto title loans, deposit advance products, certain (but not all) installment loans and open-end lines of credit. (Overdraft services on deposit accounts are excluded from the proposal.) Under the plan, all lenders have the option to determine if a borrower has the ability to repay a loan, with fees and finance charges, and still meet basic living expenses. For many community bankers, however, the income verification and record keeping requirements are too stringent to be workable. Lenders that offer short-term loans of up to $500 with terms of less than 45 days can choose an alternative, principal payoff option. But lenders would be barred from taking an auto title as collateral — another potential deal-killer for community bankers. “We try to get a piece of collateral, even if it’s a 1992 Corolla,” Richards said. “We’ll take anything over being unsecured.” For longer-term loans, typically a sweet spot for community banks, lenders have two alternatives if they do not verify a borrower’s ability to repay. They can meet the 18 KENTUCKY BANKER | JULY
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parameters of the National Credit Union Administration’s “payday alternative loans” program, where the interest rate is capped at 28% and the application fee is $20 or less. A third option would be to offer loans with an allin cost of 36% or less, excluding a “reasonable” origination fee. The loan’s term cannot exceed two years and the lender’s projected default rate cannot exceed 5%, or the lender would have to refund the origination fees. Joe Gormley, an assistant vice president and regulatory counsel for the ICBA, said “the totality” of the restrictions will mean most community bankers are “going to get out,” of small-dollar loans. “The bankers we’ve talk to don’t see a way to serve the market with these restrictions,” Gormley said. “It would be a real shame if community banks are forced to stop making these types of loans.” The CFPB is soliciting public comment on its proposal through Sept. 14. Joe Rodriguez, of counsel at Morrison & Foerster and a former Southeast regional counsel at the CFPB, said he thinks banks, credit unions and fintech firms will structure loans under the NCUA credit union model because of the potential to charge annual percentage rates above 100%, which would make the loans profitable. “This is where many institutions will operate if they are extending short-term credit, because there is flexibility in structuring the loans, and in certain cases, the APR can be over 100%,” Rodriguez said. “Many more borrowers would be able to qualify than under the 36% APR option the rule otherwise allows, and they’d get better terms than from a payday operation. So from the CFPB’s perspective an APR of 100% is better than 400%.” Richards at Owingsville Banking is considering the credit union option, also known as PALs. He is also weighing extending all of the bank’s short-term loans to a longer term of at least a year. Since 2013, Owingsville has made 1,563 small-dollar loans. The average loan was for $2,825 over 19 months, with an interest rate of 12%. The bank’s chargeoff rate was a paltry 0.9%. Richards argues that bankers overseen by the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency should be exempt from the CFPB’s plan. “The name of the regulation is payday lending so why in the world are they dragging banks and credit unions into it?” Richards asked. “Banks and credit unions are not taking advantage of their own customers. They should apply the plan to nonbank entities that are making these abusive loans.”
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Celebrating 125 Years
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Central Kentucky Federal Celebrates 10 Years of Hosting Private Reception for Sponsors of the Great American Brass Band Festival When festival organizers were seeking corporate sponsors for the first Great American Brass Band Festival 27 years ago, the Board of Directors of Central Kentucky Federal Savings Bank didn’t hesitate to commit to a Significant Level sponsorship. Seventeen years later, the bank’s CEO at the time, and now area president ,Bill Johnson, was approached with a request to host a special event to honor festival sponsors. Once again, the response was an emphatic “Absolutely”! A private reception for festival sponsors was held at the bank’s Main Street office on the Friday evening of the 2006 festival weekend and was pronounced a huge success.
Johnson notes “The highlight of the evening this year was when Danville Police Chief Tony Gray and a group of officers, who were on duty just beyond our doors at the Bayou and Brass Festival, joined us for a few moments to enjoy some food, cold drinks and the comfort of our air conditioning. We felt privileged to host this group of Danville’s finest and were happy to give them some much needed respite from their duties by sharing some refreshment and fellowship.”
When asked to share something anecdotal from a decade of hosting the reception, both McBee and Johnson would agree that it would have to be the year that the A decade later, the bank celebratair conditioning malfunctioned ed the 10 year anniversary of the during a thunderstorm while the reception on the evening of June reception was in full swing. “Our 3rd. Business Development Officer guests typically come and go in Kathy McBee, who manages the open-house fashion, but on that bank’s Ridgefield Branch, chairs the event and says that a lot evening those who were already with us when the storm of work goes on behind the scenes to organize the evening, began were joined by a much larger group who rushed in but she wouldn’t have it any other way. to get out of the rain,” McBee says. Suddenly, she says, the event was packed to capacity and the room quickly became McBee shares, “We feel so honored to host those who be- like a sauna. “However, our guests didn’t seem to notice as lieve in this incredible festival and we were just delighted they partied on, enjoying the food and beverage and each to celebrate 10 years of thanking them with this ‘sponsors other’s company as the storm raged outside.” only’ evening. We are very grateful to have some terrific partners that help us make the reception so enjoyable and For readers who haven’t had an opportunity to attend the we want to recognize them. Sandra Turner, owner of A Great American Brass Band Festival, we encourage you to Lasting Impression Florist provides the most amazing flo- explore www.gabbf.org to learn more about this remarkable ral centerpiece as an in-kind donation. Each year it is more family friendly weekend. From the annual balloon race on fabulous than the last and is the focal point of the room. For Friday evening to the parade on Saturday morning to, last the last several years Mallards Restaurant has been our val- but certainly not least, the many concerts and performancued partner as an in-kind sponsor and features a fantastic es by brass bands who come from across the USA and bearray of food that all of our guests really look forward to. yond-the first weekend in June in Danville, Kentucky is the We couldn’t manage the ambiance of this special evening place to be! without their creative assistance.” See festival images at the top of the next page 20 KENTUCKY BANKER | JULY
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Saxton’s Cornet Band Frankfort, KY
Bill Johnson with DPD Chief Tony Gray
Circle City Stompers Clown Band Indianapois, IN
THE BANKERS’ VOICE
What our Bankers say about our Products & Services “When we became an owner in Kentucky Title Center, we initially met with some resistance, but not really as much as we had anticipated. It helped because of the very long term relationship between our bank and our bank’s counsel. He understood the bank’s need for fee income and that it would be helpful in the long term success of the bank, which in turn meant a long and profitable relationship for him as well. I guess the best advice that I could give anyone is ‘just do it.’ I know that every community is different, but I know that we just decided to do it because it was best for the bank and our shareholders. “ Garry W. Smith, Chief Lending Officer/EVP Community Financial Services Bank To learn more contact the KBA’s Selina Parrish 502-736-1282 or sparrish@kybanks.com
Celebrating 125 Years
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The Murray Bank Offers 7 Tips to Avoid Online Fraud MURRAY, Ky. – Every year, millions of consumers fall victim to cybercrime. According to the FBI’s Internet Crime Complaint Center, in 2014 consumers lost more than $800 million from scams initiated through the web. In recognition of Internet Safety Month in June, The Murray Bank is highlighting seven tips to help consumers protect themselves from online fraud. “The Internet has become one of the most popular tools used to commit fraud and criminals are becoming more and more sophisticated with their hacking techniques,” said Jeff Cottingham, IT Director at The Murray Bank. “As a result, it’s extremely important for consumers to secure their wireless networks and filter the amount of personal information they choose to divulge online.” Here are some recommendations from The Murray Bank to keep you safe online: 1) Keep your computers and mobile devices up to date. Having the latest security software, web browser, and operating system are the best defenses against viruses, malware, and other online threats. Turn on automatic updates so you receive the newest fixes as they become available. 2) Set strong passwords. A strong password is at least eight characters in length and includes a mix of upper and lowercase letters, numbers, and special characters. 3) Watch out for phishing scams. Phishing scams use fraudulent emails and websites to trick users into disclosing private account or login information. Do not click on links or open any attachments or pop-up screens from sources you are not familiar with. Forward phishing emails to the FTC at spam@uce.gov – and to the company, bank, or organization impersonated in the email. 4) Keep personal information personal. Hackers can use social media profiles to figure out your passwords and answer those security questions in the password reset tools. Lock down your privacy settings and avoid posting things like birthdays, addresses, mother’s maiden name, etc. Be wary of requests to connect from people you do not know. 5) Secure your internet connection. Always protect your home wireless network with a password. When connecting to public Wi-Fi networks, be cautious about what information you are sending over it. 6) Shop safely. Before shopping online, make sure the website uses secure technology. When you are at the checkout screen, verify that the web address begins with https. Also, check to see if a tiny locked padlock symbol appears on the page. 7) Read the site’s privacy policies. Though long and complex, privacy policies tell you how the site protects the personal information it collects. If you don’t see or understand a site’s privacy policy, consider doing business elsewhere. Founded in Murray, Kentucky, The Murray Bank is proud to be Murray and Calloway County’s only locally owned and operated bank. The Murray Bank has three offices; 405 South 12th Street, 700 North 12th Street, both in Murray, and in Hazel at 405 Main Street. The Murray Bank is an Equal Housing Lender, Member FDIC. www.TheMurrayBank.com 22 KENTUCKY BANKER | JULY
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The KBA Goes to Washington
KBA Representatives in DC
The KBA met with Kentucky’s senior Senator Majority Leader Mitch McConnell Celebrating 125 Years
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Wade Berry / Farmers Bank & Trust Co. James E. Brown / Stock Yards Bank & Trust Co. Mack Butler / The Monticello Banking Co. Steven Caddell / Heritage Bank, Inc. of Erlanger Ballard W. Cassady, Jr. / KBA CEO & President John P. Cooper / Capital Link Consultants Andrew O. Davis / Hometown Bank of Corbin, Inc. Luther Deaton, Jr. / Central Bank & Trust Co. Nicole Durbin / Citizens Union Bank of Shelbyville Lanie Gardner / First Southern National Shawn D. Garrison / Farmers & Traders Bank Brian W. Gohmann / River City Bank, Inc. Natalie Kaelin / KBA, Asst. General Counsel John G. Kenkel, III / Victory Community Bank Melissa Lee Knight / The Farmers National Bank Jeffrey S. Koonce / Your Community Bank Jonathon Lewis / Commercial Bank of Grayson Audrey Lillpop / First Security Bank Michael H. Mercer / First State Bank, Inc. Mike Mineer / Citizens Deposit Bank & Trust Nancy Mullen / Kraft CPAs PLLC James J. O’Toole / Federal Home Loan Bank Louis Prichard / Kentucky Bank & KBA Chairman James D. Rickard / Your Community Bank David E. Sartore / Field & Main Bank Yvonne E. Savage / KBA, KBPAC Coordinator Francis W. Schneider, III / Traditional Bank, Inc. Debra K. Stamper / KBA Exec. VP & GC JULY 2016 | KENTUCKY BANKER 23
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Love it or hate it, Social Media can create some interesting challenges for an employer. Below is a good “Best Practices” piece on Social Media policy. Chuck Maggard, President & CEO KBA Insurance Solutions 502-736-2671 | cmaggard@kybanks.com
Employment Practices Q & A
Social Media Presents New Challenges for Banks Employees often write posts about their company on social To avoid violating NLRA protections for employees using media sites. Do I have the authority to monitor this and dis- social media, employers should adopt policies that are narcipline an employee if negative comments are made, even rowly tailored to: though it’s outside of working hours? • Prevent discriminatory remarks, harassment, bulAn employee’s right to comment on his or her employer may lying, threats of violence and other behavior that is be protected by the National Labor Relations Act (NLRA). unacceptable at the workplace; Provisions of this act, such as the right of employees to discuss, question or criticize their terms and conditions of em• Request that employees identify that their comployment, extend to unionized and nonunionized workers. ments are their personal opinions and do not repUnder the NLRA, if an employee is addressing group conresent their employers’ official positions on any specerns or is acting on behalf of others, those activities are cific issues; and protected and employers may not take disciplinary action against the employee. This protection extends to social me• Request that employees do not disclose trade sedia posts and situations where employees have commented crets, publish internal reports, provide tips based on on or “liked” co-workers’ online posts made during or outinside information or participate in other activities side of working hours. that may be considered inside trading. However, this protection does not apply to outrageously disgraceful or shameful conduct and reckless or maliciously untrue communications. In addition, individuals are not protected by the NLRA when they act in their own interests or address purely personal complaints.
24 KENTUCKY BANKER | JULY 2016
Employers wishing to manage their online reputation should refrain from participating in controversial practices such as requiring employees to disclose their personal social media login information. Many states have laws prohibiting such conduct by employers.
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Commercial Bank of Grayson Celebrates 125 Years with a Community Block Party by Angie White Sponsorship Relations
Being in business 125 years is a milestone in any business, but with the acceleration of technology and the changing regulations that the financial industry faces, it’s even more so in banking. On May 27th, 2016, Commercial Bank of Grayson celebrated their milestone anniversary by hosting a community block party in their parking lot. The party kicked off at 6pm with some great, up and coming local talent, Sasha Colette and Dustin Burchett, followed by the headliner of the party, Academy of Country Music’s Best New Vocal Duo/ Group of the year and MusicRow’s Breatkthrough Artist of the Year, OLD DOMINION! They kicked off their 90 minute set with their song SNAPBACK, which reached GOLD status in June of this year, and wrapped it up with their PLATINUM, former #1 song, BREAK UP WITH HIM. Mark Strother, President and CEO of Commercial Bank of Grayson, said he wanted to do something special to show his appreciation for the years the bank has been in business and say thank you to the community for the years of support and loyalty to the bank and the Strother family. “Reaching 125 years in business is an important milestone. We’ve survived multiple cycles in the local and national economy and in the regulatory environment,” said Strother. “I believe Grayson, Olive Hill, and the rest of Carter County is better because Commercial Bank has remained independent and active. Our celebration was a means to share our thanks to our neighbors for their business and to reiterate our commitment to staying here for a long time to come. I have a great team here at Commercial Bank and I’m proud of them and the great show they made possible.”
“Congratulations Commercial Bank of Grayson on celebrating your 125th year in banking! We are proud to share this milestone with you. Here’s to the next 125 years!” From your friends at the Kentucky Bankers Association. 26 KENTUCKY BANKER | JULY 2016
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Bert Ely’s FARM CREDIT WATCH
FCS Pushes Back Against Leonard Wolfe’s House Ag Testimony
by Bert Ely, American Bankers Association As FCW reported last month, Kansas banker Leonard Wolfe testified on ABA’s behalf at the May 19 oversight hearing the Senate Agriculture Committee held on the FCS and its regulator, the Farm Credit Administration (FCA). After he testified, Leonard wrote an opinion article for Agri-Pulse, titled: “It’s time to reform the Farm Credit System,” summarizing his testimony. Todd Van Hoose, president of the Farm Credit Council, the FCS’s trade association, then fired back with a response, titled: “Make no mistake: The bank lobby wants to kill farm credit.” I encourage bankers to read both articles, and especially Van Hoose’s, as his article is an excellent example of the way in which the FCS tries to defend its lending practices and the competitive advantages it has over its taxpaying bank competitors. Speaking of articles, Ralph Nader has weighed in with this criticism of the FCS, The Funny Business of Farm Credit. Even those not traditionally involved in agriculture see that the FCS is not fulfilling its mission.
tions, based on new merger rules the FCA adopted last year. If this merger takes place, it will reduce the FCS to 72 direct-lending retail associations, down from 84 at the beginning of 2011 and 96 at the beginning of 2006. More significantly, this consolidation has led to the growth of some very large, multi-state associations. Assuming the three associations had merged as of March 31, 2016, the six largest FCS associations would have held about 52% of all assets owned by FCS associations while the bottom half of the associations, by size, hold just 9.8% of all association assets; the largest of the associations in the bottom half had $945 million of assets. The twenty smallest associations – those with less than $500 million of assets – held just 3.6% of all FCS assets. Four of the larger associations serve all or portions of 19 states while Kansas is served by six associations and Oklahoma by four. Clearly, the FCS increasingly is dominated by large, multi-state associations, hardly consistent with the FCS of several decades ago, when it was dominated by local associations. The FCS merger wave almost certainly will continue, leading to ever larger associations.
Three large FCS associations plan merger; more to come
New CEO; investors sue over sub-debt redemption
Last month, three large midwestern FCS associations announced that they had “begun exploring a merger,” stating that their “organizations are in the process of evaluating this potential collaboration with the guidance and assistance of staff and industry experts.” They are AgStar Financial Services, which serves eastern and southern Minnesota and northwest Wisconsin; 1st FCS, which serves northern and western Illinois; and Badgerland Financial, which serves southern Wisconsin. As of March 31, 2016, they were, respectfully, the fifth, tenth, and twelfth largest FCS associations. If they merge, which is more likely than not, the merged association, with $18 billion of assets, would become the third-largest FCS association, trailing only FCS of America ($24.9 billion of assets at March 31, 2016) and Farm Credit Mid-America ($22.2 billion). Perhaps coincidentally, this prospective merger was announced just days before the FCA posted on its website an informational memorandum on revised merger guidance for FCS institu-
On June 2, CoBank announced that its CEO, Bob Engel, would retire on June 30, 2017, after eleven years as CEO. During Engel’s tenure, CoBank more than tripled its size, reaching $118 billion in total assets on March 31, 2016, making it the largest of the four FCS banks. Over the same period, the FCS overall more than doubled its size, to $305 billion in total assets on March 31, 2016. Engel achieved that growth in part through CoBank’s aggressive lending to investor-owned utilities and by buying participations in loans to “similar entities” – investor-owned businesses who can borrow from the FCS only because similar businesses – agricultural and utility cooperatives – can borrow from the FCS. Although CoBank dominates the FCS, some executives elsewhere in the FCS will welcome a tamer CoBank, as will some members of the House and Senate Agriculture Committees who have questioned CoBank’s aggressiveness. Tom Halverson, CoBank’s chief banking officer, will succeed Engel. According to a CoBank news release, Halvercontinued on the next page
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son joined CoBank in 2013 after spending more than 16 acknowledged, the FCS double- and triple-counts its YBS years at Goldman Sachs in a variety of executive positions. lending. For example, if a loan is made to a 33-year-old He holds a doctorate in “war studies.” who began farming eight years ago and normally has gross farm receipts of $200,000 annually, that loan gets counted As the April 2016 FCW reported, CoBank angered institu- three times – as a Y, a B, and an S loan. Further, if that tional investors when it announced in March that it would farmer has four loans, say a real estate loan, an operating redeem $405 million of 7.875% subordinated notes, assert- loan, and two equipment loans, those loans will get counted ing that new capital rules promulgated by the FCA opened twelve times in the FCS’s YBS data even though there is just the door to this redemption. On April 15, CoBank carried one borrowing relationship. Given that the FCS, in the inout that redemption, wiping out the approximately $50 terest of sound credit management, monitors its total credit million premium at which those notes were selling above exposure to each of its borrowers, it could report its YBS their par value. Not surprisingly, on June 13, 28 investors data by borrower, but it does not. in those notes, who in total owned approximately 44% of the notes, sued in federal court (Southern District of New As the March 2016 FCW reported, FCS demonstrated its York) for damages. It will be interesting to see how this liti- long-standing ability to aggregate loan data by borrower gation turns out as three other FCS institutions have issued when, for the first time, in its 2015 Annual Information high-yielding subordinated debt; they probably are tempted Statement, it reported outstanding loans to borrowers, in to redeem that debt, too. ranges of the amount borrowed at year-end 2015; previously the FCS reported loan data based on the size of individFCA issues annual report on the FCS’s YBS lending ual loans outstanding. Aggregating FCS loan data by borrower would, of course, significantly shrink the FCS’s YBS The FCS loves to brag about how much it lends to young, numbers, which should raise even more questions about beginning, and small (YBS) farmers yet as the FCW has re- how extensively the FCS serves YBS farmers. Even with its ported on numerous occasions, the facts belie that assertion. double- and triple-counting, FCS loans and commitments Young (Y) farmers are borrowers 35 or younger, beginning outstanding to beginning farmers and ranchers dropped (B) farmers are those who have been farming or ranching from 17.3% of all FCS loans and commitments at the end for ten years or less, and small (S) farmers are those whose of 2013 to 17.1% at the end of 2014 and to 16.9% at the end gross receipts from agriculture are normally less than of 2015. Similar declines were seen in FCS lending to small $250,000. On June 9, the FCA released its annual report and young farmers. on the FCS’s YBS lending. As the FCA has always readily Report FCS lending abuses to: green-acres@ely-co.com
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Jesse Johnson, KBA Emerging Leader, Completes LSU Graduate Program DANVILLE, Ky. - Jesse Johnson, Assistant VP & Loan Officer of Farmers National Bank, and current KBA Emerging Leader, was among the 205 bankers receiving graduation diplomas on June 3, 2016 from the Graduate School of Banking, at LSU. This three-year program provides courses During their three years at the Gradcovering all aspects of banking, eco- uate School of Banking, students renomics and related subjects. ceive 180 hours of classroom instruction, thirty hours of reviews, planned Sponsored by 15 southern state bank- evening study, and written final examers associations in cooperation with inations at the end of each session. the Division of Continuing Education at LSU, the banking school requires Farmers National Bank, a community attendance on campus for three years, owned bank since 1879, has banking with extensive bank study assign- facilities in Danville, Burgin, Harments between sessions. The faculty rodsburg, Junction City, Perryville, consists of bankers, business and pro- Stanford and Lancaster. fessional leaders, and educators from all parts of the U.S.
The Murray Bank’s Tony Ryan Graduates from the Barret School of Banking Paul W. Barret, Jr. Graduate School of Banking in Memphis, Tennessee recently announced the graduation of Tony Ryan, Vice-President at The Murray Bank. “Tony is a tremendous asset to our bank and customers,” said Bob Hargrove, President and CEO of The Murray Bank. “We commend him for expanding his base of knowledge, which will allow him to offer the best banking experience possible for our customers.”
Seventy-five students completed the three-year curriculum and graduated in the 2016 class. During the program, students received over 120 hours of classroom instruction and prepared in-depth reports in eight areas of 30 KENTUCKY BANKER | JULY 2016
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study. The 2016 school was held May 23-27 on the Christian Brothers University campus in Memphis, Tennessee. In addition to course work, students competed in a “Community Bank” competition, where they had to come up with a strategic operating plan to operate their Bank. The class was divided into two communities, with five Banks in one community and six in the other. The competition covered a six quarter period with Ryan’s team Bank not only winning their community, but also the head-to-head competition with the winner of the other community. UNITED IN SERVICE
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2016 KBA EDUCATION CALENDAR Certified Teller Seminars July-August | Various Locations Business Law Basics & Lender Liability Seminar August 10 | Bowling Green August 11 | Lexington Women in Banking Workshop August 18-19 | Louisville
COMMERCIAL LENDING SCHOOL
August 22-26 | Louisville
ALM Seminar The Baker Group
August 24 | Louisville
Cyber Security Seminar
October 6 | Bowling Green October 7 | Lexington
Loan Documentation Seminar
November 1-2 | Bowling Green November 3-4 | Lexington
ESSENTIALS OF BANKING SCHOOL
August 22-26 | Louisville
2016 COMPLIANCE SEMINARS Professional Bank Services Live Seminars October 21 | ACH Processing Compliance / Lexington December 16 | ACH Processing Compliance / Bowling Green
PEGASUS WORKSHOPS/SCHOOLS Deposit Compliance Fundamentals August 2 | Somerset August 3 | Bowling Green August 4 | Gilbertsville August 9 | Elizabethtown August 11 | Lexington New Accounts in Kentucky August 15 | Paducah August 16 | Bowling Green August 17 | Elizabethtown August 18 | Lexington August 22 | Morehead August 23 | Hazard August 24 | Somerset
Anthem Blue Cross and Blue Shield. We believe healthy employees make for a healthy business. Research shows that companies with wellness programs have less sick leave, lower direct health care costs and fewer worker’s compensation claims.* That’s why Anthem Blue Cross and Blue Shield offers a variety of health and wellness programs. They all work together to help your employees manage and improve their health. Learn more about what Anthem Blue Cross and Blue Shield has to offer at anthem.com/connects2.
* The Economic and Health Impacts of Obesity, Institute on the Costs and Health Effects of Obesity, National Business Group on Health, February 2009. Anthem Blue Cross and Blue Shield is the trade name of Anthem Health Plans of Kentucky, Inc. Independent licensee of the Blue Cross and Blue Shield Association. ®ANTHEM is a registered trademark of Anthem Insurance Companies, Inc. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association. 36501KYAENABS 3/13
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Kentucky IOLTA Fund: A Partnership Between Banking and Legal Communities by Amelia Martin Adams, Esq. Executive Director of the Kentucky IOLTA Fund Kentucky banks have a long history of being good partners to our communities. They help entrepreneurs reach their dreams by loaning funds needed to start small businesses. They support youth sports teams, art events, and animal shelters. They make it possible for people to buy their first homes. As members of the Kentucky Bankers Association, this is not news to you. You already know that your financial institutions do these things as part of a commitment to being good neighbors. But, did you know that Kentucky banks also help to transform people’s lives by providing them with access to justice? Through partnerships with the Kentucky IOLTA Fund, Kentucky banks do just that. What is IOLTA? The Kentucky Interest on Lawyers’ Trust Accounts (IOLTA) Fund was established by Kentucky Supreme Court Rule (SCR) 3.830 in 1986, and it became mandatory for Kentucky attorneys to participate in IOLTA in 2010. IOLTA is a unique and innovative way to increase access to justice for individuals and families living in poverty and to improve our justice system. Interest from Kentucky lawyers’ trust accounts is pooled in the IOLTA Fund and awarded annually as grants to nonprofit agencies that provide civil legal aid and legal education to low-income Kentuckians in all 120 counties. Who does IOLTA help? “Thousands of people in Kentucky have legal problems but they can’t afford a private attorney,” said Scott Crocker, Executive Director of Kentucky Legal Aid. “Without a lawyer, these individuals are unable to obtain access to the court system to address their problems. With the support of IOLTA and participating banks, Legal Aid is able to help low-income people and victims of domestic violence and financial abuse to resolve serious legal issues and to improve their lives.” Since 1988, the Kentucky IOLTA Fund has awarded more than $15 million in total grants. IOLTA grants help Kentuckians like Vicki and her dog Pluto. Vicki is a smart, funny, and strong-willed woman. She was active her entire life, having worked as a librarian and an employee of the Federal government, but things changed for Vicki when her identity was stolen. She lost everything – her home, her car, and the retirement she worked so hard to save. Since then, Vicki has been living on a fixed income and relying on gov32 KENTUCKY BANKER | JULY
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ernment support to help pay for her housing. Slowly, Vicki began to rebuild her life. She enjoyed her new home at a local independent living facility and began making new friends. She even adopted a dog, Pluto, who brought new light to her life (pictured at left). Pluto became her pride and joy. When she began noticing abuses occurring in the facility where she lived, Vicki spoke up. In retaliation, the facility attempted to evict her under the pretense that her dog, Pluto, was “too loud.” Despite the fact that Vicki had paid a pet deposit and had followed the terms of her lease, the facility threatened to evict Vicki if she did not get rid of Pluto in thirty days. Pluto is Vicki’s constant companion, and she would do anything to save her dog and the roof over both their heads. That is when Vicki approached the Legal Aid Society. Legal Aid was able to defend against the unlawful eviction, saving Pluto and the home they shared together. “I don’t know what I would have done without Legal Aid and my attorney Laura,” Vicki said. “When I felt powerless, with no recourse and no one to listen to me, and when I felt like it was just never going to get better, Legal Aid was there.” The Legal Aid Society serves Jefferson and 14 neighboring counties, Kentucky Legal Aid serves 35 western Kentucky counties, the Appalachian Research and Defense Fund serves 37 eastern Kentucky counties, and Legal Aid of the Bluegrass serves 33 northern and central Kentucky counties. Stories like Vicki’s are the reason that Kentucky’s four regional civil legal aid organizations do what they do. “There is a real human dimension to the work that our attorneys do day in and day out,” explained Neva-Marie Polley, Executive Director of the Legal Aid Society. “Our clients are not just numbers in a database, they have real stories. We intersect with them often in a moment of crisis or tragedy. It is an honor to be there to help restore hope and to transform their lives through the civil legal system.” The Kentucky IOLTA Fund and the Legal Aid Society could not have helped Vicki and Pluto without the support of Kentucky banks. “Not only does funding from IOLTA allow us to help a high volume of clients, but it also ensures that staffing levels are adequate to provide the kind of long-term, in-depth level of service that our clients not only need but deserve,” Polley commented. “Support from IOLTA demonstrates that ‘equal justice’ is not just a philosophical idea, but an essential component to the practice of law.” continued on the next page
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Like clients helped by legal aid, IOLTA grants also transform the lives of Kentucky law students who receive IOLTA public service fellowships. Through those fellowships, students at each of Kentucky’s three law schools gain firsthand experience with the practice of law. IOLTA fellows and law clerks have worked at all of Kentucky’s regional civil legal aid organizations, assisted public defenders, and worked with niche legal clinics providing low-to-no-cost services for vulnerable populations like the Children’s Law Center in northern Kentucky and Kentucky Refugee Ministries in Louisville. “Because of my experience as an IOLTA law clerk, I was ready to practice law when I graduated from law school,” commented Tiffanny Smith, a 2014 graduate of NKU Salmon P. Chase College of Law and a practicing attorney. “For me, law school wasn’t just about passing the Bar; I needed to feel confident that I could go out and successfully represent clients. My IOLTA clerkship helped give me that confidence. It also provided much needed assistance to [the Children’s Law Center] and their clients.” Experiences like Tiffanny’s would not have been possible without the assistance of the IOLTA Fund and our bank partners. “The grant quite literally pays my bills during the summer, and receiving it provides relief to a huge financial burden,” explained Amy Robertson, a third-year student at the University of Kentucky College of Law. “Several of my classmates have been forced to choose between a job that pays and a job that furthers their public interest passions. I’m extremely grateful that I am able to pursue my passion of criminal defense, while also furthering my education in trial work.” How can your bank participate in IOLTA? To become an IOLTA bank partner, simply complete, sign, and return a one-page Agreement to Participate specifying the bank’s initial interest rate on IOLTA accounts, whether the bank prefers to transfer earned interest to IOLTA monthly or quarterly, and whether it will charge fees on IOLTA accounts. When a completed Agreement is received by the IOLTA office, the bank is enrolled as a participating bank in the IOLTA program. As of the date of this article, 153 Kentucky banks participate in IOLTA. SCR 3.830 requires that all Kentucky attorneys participate in the IOLTA program unless they are subject to certain exemptions. To establish an IOLTA account, an attorney first opens a non-interest-bearing escrow account at a participating bank of his or her choice. The attorney then submits a form to IOLTA requesting that the account be enrolled in IOLTA. IOLTA then enrolls the account in the program and notifies the participating bank to convert the attorney’s account to an interest-bearing IOLTA account. Interest rates vary among banks, with our most valued partners paying 1.00% or more, but all banks pay rates at least comparable to similar non-IOLTA accounts as required Celebrating 125 Years
by SCR 3.830(4). “Banks already have a good reputation in our communities, but participating in IOLTA can only strengthen our reputation,” said Luther Deaton, Jr., Chairman, President and CEO of Central Bank, who serves as the Kentucky Bankers Association representative on the Kentucky IOLTA Board. “IOLTA is a very worthy cause because it helps so many underserved Kentuckians who cannot afford an attorney. Banks should give back to give everyone in their communities a chance to defend themselves, and it would help greatly if every bank would participate.” Participating banks can feel confident that their interest payments are awarded in the most impactful way possible through IOLTA’s annual grants. The IOLTA Fund is managed by an eleven-member Board of Trustees comprised of nine attorneys from every region of Kentucky, a Justice of the Supreme Court of Kentucky, and a Kentucky Bankers Association representative. In addition to monitoring the IOLTA Fund’s finances, the Trustees evaluate each grant application and make recommendations to the Supreme Court for its ultimate approval. Although total annual IOLTA grants have decreased in recent years due to the economic downturn and lower interest rates, the IOLTA Trustees are looking forward to returning to higher grant levels in the future through valued partnerships with Kentucky banks. Thank you to the Kentucky banking community for your many years of dedicated support to the Kentucky IOLTA Fund. We value every cent contributed and hope that each of our banking partners sees the tremendous return on their investments in the programs funded by IOLTA. We also hope that your bank has enjoyed beneficial relationships with Kentucky attorneys who hold their trust accounts with you. If there are ways you think that IOLTA could strengthen its presence among Kentucky banks, please contact us. We would be delighted to meet with you and discuss how we can grow IOLTA together for the benefit of Kentuckians across the Commonwealth. For more information about the Kentucky IOLTA Fund, visit www.kybarfoundation.org/iolta or contact Executive Director Amelia Martin Adams (pictured below) at aadams@kybar.org or (800) 874-6582.
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2016 KBA Education Solutions General Banking School
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2016 KBA Education Solutions General Banking School
You are invited to attend the
GRAND OPENING of
Saturday, the 30th of July Two Thousand and Sixteen from 1 pm to 4 pm Main Street Location 550 Main Street West Liberty, Kentucky
Celebrating 125 Years
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TOP MALE SHOOTER Ralph Bruewer
(with KBA Chairman Louis Prichard at left)
2016 KBPAC Chairman’s Cup Clay Shoot
WINNING TEAM Greg (Trigger Happy) Greene, Skip (Quick Draw) Seltman, Ralph (Bust’em Up) Bruewer.
TOP FEMALE SHOOTER (with KBA Chairman Louis Prichard at left)
Lisa Mattingly
RUNNER-UP TEAM Michael Meredith, Larry Skaggs, Patrick Coleman, Gary McClure.