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.
Payroll & Time
Human Resources
Onboarding
Additional Services
º Payroll & tax filing
º Employee handbooks
º Employee self-service
º Workers’ compensation
º Online check stubs
º HR best practices
º Compliance documentation
º Tax credit services
º Employee mobile access
º HR advice & guidance
º Upload company documents
º Custom reports
º Time management
º Employment screening
º Electronic acknowledgement
º Attendance tracking
º Benefits management
º Time clock devices
º Applicant tracking
For more information, contact The Bankers’ Bank of Kentucky:
Lynn Ellis, lellis@bbky.com David Fletcher, dfletcher@bbky.com Todd Beers, tbeers@bbky.com Shawn O’Keefe, sokeefe@bbky.com To learn more about Paycor, visit www.bbky.com/paycor
NOV 2016 KBA STAFF
OFFICERS
Ballard W. Cassady Jr. President & CEO bcassady@kybanks.com
Chairman Mr. Michael H. Mercer First State Bank
Debra K. Stamper EVP & General Counsel dstamper@kybanks.com
Vice Chairman Mr. Timothy E. Barnes Hometown Bank of Corbin
Matthew E. Vance Chief Financial Officer mvance@kybanks.com
Treasurer David M. Bowling Citizens Union Bank of Shelbyville
Selina O. Parrish Director of Vendor Solutions sparrish@kybanks.com
Past Chairman Mr. Louis Prichard Kentucky Bank
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 Tammy Nichols Convention Coordinator Finance Officer, HOPE of Kentucky tnichols@kybanks.com Katie Rajchel Staff Accountant krajchel@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.
CONTENTS CHAIRMAN’S CORNER........................................5
»STRAIGHT»TALK».........................................7 MY TWO CENTS AND THEN SOME................8 STICK A FORCHT IN HUNGER.......................10 KY BANKERS ON THE MOVE..........................14 FACEBOOK CONTEST..............................15 KBA ENDORSES TIB..........................................15 CSI RANKED.........................................................19 KBPAC 2015 GOAL ACHIEVERS....................22 COMMUNITY BANKS DOMINATE..................24 BERT ELY’S FARM CREDIT WATCH.............26 KBA GBS SCHOLARSHIP WINNERS...........27
Mr. Ryan Curtis Steger Town Square Bank Mr. John T. Taylor PBI Bank
Our Mission Statement Together We Make A Difference
Mr. Jed Weinberg Bank of Hindman
Angie White Sponsorship Relations awhite@kybanks.com
WE KNOW BANKS
Steve Whitlow Systems Engineer swhitlow@kybanks.com
Chuck Maggard President & CEO cmaggard@kybanks.com Lisa Mattingly Director of Sales & Service lmattingly@kybanks.com Brandon Maggard Account Representative bmaggard@kybanks.com
600 West Main Street, Suite 400 Louisville, Kentucky 40202
Donna McCartin Benefit Support Specialist dmccartin@kybanks.com
Phone: 502-582-2453 Fax: 502-584-6390 Website: www.kybanks.com
Audrey Whitaker Insurance Services Coordinator awhitaker@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.
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.
The KBA congratulates...
Bank of Columbia & Elkton Bank & Trust ...on their recent 150-year Anniverseries!
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CHAIRMAN’S CORNER
125
“I want to show banks the expertise that the KBA has to offer.”
What do you like most about community banking? What I like about community banking is that customers don’t fit in the box that big banks try to put them Where did you attend college and what was your major? in. With community banks, you get I graduated from University of Kentucky with a degree in to know your customers and you Finance. Although my great grandfather, grandfather, and help them find their way into their dad were all bankers, I always wanted to be a broker. own box. We do this by helping them adopt children, buying their first home, getting their What was your first job out of college? small business started, or whatever they may need. Helping Teaching driving school at Boone Drivers School. That was people is very fulfilling. I love doing what I do. certainly an interesting job! Most people would think the people coming to learn to drive would be 16-years old, but Who was the biggest influence on your banking life? that wasn’t the case. I had more of the elderly who had never That’s easy. It was Peggy Williams at First State Bank. She is driven before, but for whatever reason needed to have their a huge community person and taught me that we, as comlicense. I also had a lot of people from other countries. It munity bankers, had an obligation to our community. You was a job where I have so many stories I could write a book. take care of the needs of people any way you can because
KBA Interview Mike Mercer, KBA Chairman 2016-2017 President/CEO First State Bank, Central City
How did you go from teaching driving to banking? While I was teaching I also helped the local basketball coach at Central City. He went to church with the President of the Bank in Calhoun. The President was starting to think about retirement and wanted to find someone who was just out of college to bring into the bank to train and learn the ropes. The coach mentioned my name and I went to work for him.
without getting involved, you wouldn’t have a community.
What ways do you encourage your staff? It’s probably easier in a community bank. It’s a good, stable job in our county. We have good benefits, good pay. Every person’s job has to provide them with self- worth or it’s miserable and no one wants to come to a job they don’t like. If you are a people person, you can see the value in being a banker by helping people. Our biggest challenge is convincWhat was your first job at the bank? ing the young people that although the money they want Anything anyone didn’t want to do. (Laughs) Really, I re- may not be there in the beginning of their careers in bankmember taking the checks that came in each morning and ing, it will come, along with so many growth opportunities. filing them in to a giant Rolodex in people’s accounts, and I also want to show our staff, many of them young adults, then once a month I’d have to take those checks and roll that you can have fun in banking. Look at me, I love to have them in the statements and mail them out. So if you ever fun, and my employees here love to have fun. I think it’s wondered who did that, it was the lowest man on the totem important for everyone to love what they do and for us to pole. That was me and that is where I started out. encourage them to be themselves and find their own way. What was your first impression of the banking industry? I immediately saw that it was a people person industry. We would have people who would be on their way home from hunting and have their deer with them in the truck and they would come through the drive thru. We’d take pictures and hang it in the lobby. Our bank was also a place where people would come and have coffee and just hang out and talk a couple of times a week. UNITED IN SERVICE
What are you hoping to accomplish as KBA Chairman? I am not as politically oriented as some of the other past Chairmen. I would love to try to get more banks involved with our association. I want our members to pay attention to the benefits we offer. I want to show banks the expertise that the KBA has to offer. We can grow our association by supporting the vendors who support the KBA.
www.kybanks.com
Interview conducted by Angie White, awhite@kybanks.com JULY 2016 | KENTUCKY BANKER 5
Court of Appeals Adopts 1:1 Ratio for Punitive Damages in Actions Involving Sophisticated Parties Suffering Only Economic Loss by Melinda T. Sunderland and Charles J. Otten Grant Thornton, LLP v. Yung, No. 2014-CA-001957-MR 2016, Ky. App. LEXIS 164 (Ct. App. Sep. 16, 2016), which is pending before the Charles J. Otten Melinda T. Kentucky Supreme Sunderland Court on a motion for discretionary review, involved an action by the 1994 William J. Yung Family Trust (“Trust”) against accounting firm Grant Thornton alleging material misrepresentation and fraud by omission in advising the Trust to use a taxshelter product later rejected by the IRS. After a six-week bench trial, the court issued a 211-page Findings of Fact, Conclusions of Law, and Judgment in favor of the Plaintiffs. The court awarded $19,315,227.00 in compensatory damages, and $80,000,000.00 in punitive damages. Grant Thornton appealed. While there were many issues considered by the Court of Appeals, the one of greatest importance to Kentucky banks involved Grant Thornton’s challenge to the punitive damages award. It argued that the award was constitutionally excessive. The Court of Appeals applied the standard for reviewing a punitive damages award set out in State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003), which consists of 3 prongs: (1) the reprehensibility of defendant’s conduct, (2) the ratio of punitive to compensatory damages, and (3) sanctions for comparable conduct. In weighing reprehensibility, the most important prong, the Court of Appeals noted that the Trust had suffered only economic damages, was considered a sophisticated party, and was not financially vulnerable. Significantly, though, it rejected Grant Thornton’s argument that prior 6th Circuit case law prohibited a punitive damages award to a “sophisticated business suffering only economic loss”. “A punitive damage award is not prohibited simply because some factors weigh in the defendant’s favor”.
In analyzing the punitive to compensatory ratio, the Court of Appeals acknowledged the Campbell case and the line of 6th Circuit cases holding that an award of substantial compensatory damages should affect the punitive damages award, noting the US Supreme Court had stated that even a 1:1 ratio “can reach the outermost limit of the due process guarantee”. In comparing the punitive damages award to the potential for civil penalties, the Court of Appeals noted that the “existence of such penalties has a bearing on the seriousness with which a State views the wrongful action.” However, it recognized that though Grant Thornton had been assessed civil fines, the amount was far below what it could have been. As a result, it found that this factor weighed “against the imposition of additional punitive damages based on such conduct”. In reaching its holding, the Court of Appeals adopted the reasoning of the line of 6th Circuit cases finding that “the ratio of punitive to compensatory damages may not exceed 1:1” when the harm caused is “entirely economic”, the plaintiffs are “sophisticated business entities who were not financially vulnerable” and the award of compensatory damages was “substantial”. The Court of Appeals found that the “4:1 ratio…was manifestly unreasonable in light of the objective criteria as found by the trial court. The goals of punishment and deterrence would be served sufficiently by the imposition of punitive damages equaling no more than the amount of compensatory damages”. Should the Court of Appeals ruling stand, it will be an extremely significant case for Kentucky banks facing lender liability claims by sophisticated borrowers. M&P is a leading banking and finance law firm representing financial institutions, businesses and individual clients throughout Kentucky and Indiana.
MorganandPottinger.com LEXINGTON
LOUISVILLE
NEW ALBANY CORBIN BOWLING GREEN
»STRAIGHT»TALK»
125
Thankful to be an American What Greece can teach us about modern politics.
I’m writing this prior to the Election Day so I don’t know Republican Self-Destruction? who won, and to tell you the truth, whoever it is going to be will be facing a nation as divided as never before seen in Watching the Republican Party try its best to self-destruct our lifetimes. has been sort of amusing as well. Who are these clowns who are for “him” one minute and against “him” the next, I ask myself all the time why that is? The only answer I can and then back again? They must have missed the class on come up with is that our country is losing its warriors (less self-respect growing up. than 1% of our population has served in the military) and we are replacing them with what seems to be young social- Some of these guys and gals have shown just how easy it ists - these are young voters who have never had to fight for is to change their opinions on any issue. “I’ll do and say their freedom, nor their livelihood. whatever I have to in order to stay in office,” seems to be the mantra of the day, on both sides of the aisle. Why is this bad? Because we forget how fragile freedom is, and what it costs, when we don’t have to fight or work for it. The Good News = It’s Almost Over This doesn’t bode well for America. It’s been the craziest political season I have ever gone When in Greece... through. Those who know me know I am a conservative, which, according to my liberal friends (and I have a lot), My wife and I were in Greece a year ago (a Socialist country) means I’m a racist, a homophobe, sexist, Islamophobic and and we had several conversations with the Socialist popu- a red neck. I truly don’t think I have ever given them any lation. We never found a single person, from taxi drivers reason to think that way, but since my politics are conserto restaurateurs to olive growers, who wouldn’t trade what vative, well, then I’m guilty, according to some, of these bethey had in Greece to come to the United States, if they were liefs. (Ok, I am guilty of the red neck part.) assured a job. But I ask myself, what would be the difference between As a matter of fact, the only people we talked to there someone who votes for a person because of their sex, and who were happy were the unemployed. They still got their someone who votes against a person because of their sex? monthly Euros and other allowances. This leads me to be- What do you call someone who wants illegal immigration lieve that we need to take all those young socialists who “felt as opposed to someone who is for legal immigration? I the burn” and send them to Greece where they can actually could go on forever but the good news is, it’s almost over! see what a Socialist country looks like. Thankful to be an American How about WikiLeaks? With all this going on I can honestly say, in this season of One day they are traitors and the scourge of America and Thanksgiving, that I am thankful for a Government and the next they are the bastions of truth and Democracy. Yes country where these kinds of antics can go on and you don’t they are stolen emails and yes they are being leaked from get shot for it. That is the free country we live in, and I am Russia but they are also telling the truth! very thankful for that. God Bless America and all those who inhabit it! It is amazing to me to have “the curtain” pulled back and exposing the political machines and their mechanics. I knew Ballard Cassady, KBA CEO politics was a dirty business but, WOW! bcassady@kybanks.com
UNITED IN SERVICE
www.kybanks.com
JULY 2016 | KENTUCKY BANKER 7
MY TWO CENTS, AND THEN SOME
125
Sometimes it’s Hard to be Thankful...
I am thankful for being able to work at a place I love and with people who make it easy to give my best efforts. But, when our industry is constantly faced with negativity and increased burden it is easy to forget to be thankful.
There were substantive rulings included in the opinion that provides some clarity to our industry. The court found that CFPB’s argument –that RESPA’s three year statute of limitations doesn’t apply to the CFPB’s enforcement actions—was unfounded and incorrect. The court also struck the CFPB’s attempt to impose a new interpretation of section 8 of RESPA retroactively on actions that were taken in good-faith reliance on prior agency (HUD) pronouncements.
That is when we have to dig deep and look for bits and pieces that we can hold as examples of common sense and reason in a world where common sense is not common place. With that in mind, let’s look at the recent decision in the PHH v. Consumer Financial Protection Bureau case. The court also noted that HUD had developed a two decade long series of interpretations of various scenarios that The headline ruling in the case was the court found that the satisfy the 8(c) safe harbor and that the CFPB’s change in removal of the director of the CFPB for “just cause” was not interpretation was a due process violation. constitutional. On its face that would seem to be good news for our industry. However, the court, rather than striking This is not a cornucopia (get the Thanksgiving reference?) the unconstitutional statute or language as would seem logi- of glad tidings, but it is one small example of common sense cal, instead rewrote the statute, by ruling that the CFPB will: and reason on issues that impact us directly. Let’s look for (a) operate as an executive agency, (b) the President has the those victories where we can and be thankful that we still power to supervise and direct the director of the CFPB, and work in an industry that is honorable and supportive our (c) the President may remove the director, anytime at will. communities. So, what does that mean? It means that the CFPB and its current director will continue to operate and perform its duties –perhaps with absolutely no difference. That doesn’t sound right, but does that mean the ruling meant nothing? Maybe not.
8 KENTUCKY BANKER | JULY 2016
www.kybanks.com
Debra Stamper KBA Executive VP & General Counsel dstamper@kybanks.com
UNITED IN SERVICE
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KENTUCKY BANKER MAGAZINE
125
Community Trust Bank Offers Tips to Thwart Ransomware Attacks PIKEVILLE, KY - Individuals and businesses have become Tips for Businesses: targets to a growing online fraud scheme known as ransomware. Ransomware is a form of malware used by cyber • Educate your employees. Employees can serve as criminals to freeze your computer or mobile device, steal a first line of defense to combat online threats and your data and demand a “ransom” — typically anywhere can actively help stop malware from infiltrating the from a couple of hundreds to thousands of dollars — be organization’s system. A strong security program paid. paired with employee education about the warning signs, safe practices, and responses aid tremendousRansomware poses great risks to individual computers or ly in preventing these threats. laptops, enterprise networks and or servers used by government agencies, financial institutions and other businesses. • Manage the use of privileged accounts. Restrict users’ ability to install and run software applications In recognition of October as National Cybersecurity Awareon network devices, in an effort to limit your netness Month, Community Trust Bank is highlighting nine works exposure to malware. tips for consumers and businesses to exercise to thwart ransomware attacks. • Employ a data backup and recovery plan for all critTips for Consumers: ical information. Backups are essential for lessening the impact of potential malware threats. Store the • Don’t click. Visiting unsafe, suspicious or fake webdata in a separate device or offline in order to access sites can lead to the intrusion of malware. Be cauit in the event of a ransomware attack. tious when opening e-mails or attachments you don’t recognize even if the message comes from • Make sure all business devices are up to date. Ensomeone in your contact list. sure antivirus and anti-malware solutions are set to • Always back up your files. By maintaining offline copies of your personal information, ransomware scams will have a limited impact on you. If targeted, you will be less inclined to take heed to threats posed by cyber criminals. • 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. • Enable popup blockers. To prevent popups, turn on popup blockers to avert unwanted ads, popups or browser malware from constantly appearing on your computer screen.
automatically update and conduct regular scans so that your operating systems operate efficiently.
• Contact your local FBI field office immediately to report a ransomware event and request assistance. Visit https://www.fbi.gov/contact-us/field to locate the office nearest you. Community Trust Bank is a wholly owned subsidiary of Community Trust Bancorp, Inc. Community Trust Bancorp, Inc., with assets of $3.9 billion, is headquartered in Pikeville, Kentucky and has 70 banking locations across eastern, northeastern, central, and south central Kentucky, six banking locations in southern West Virginia, four banking locations in Tennessee, four trust offices across Kentucky, and one trust office in Tennessee. Community Trust Bank is a member of the FDIC (Federal Deposit Insurance Corporation) and is an Equal Housing Lender.
KENTUCKY BANKER MAGAZINE
125
Stick a “FORCHT” in Hunger
Beginning Monday, November 7th, Forcht Bank will begin a food drive at all 29 locations throughout Central, Northern, and Southern Kentucky. The food drive will go through December 20th and then will be collected and delivered to local food pantries that serve Kentucky families in need beginning December 21. “Making sure no one goes hungry, especially during the Christmas season, is something we care deeply about. In addition to collecting food
items at the bank, we will donate $12,000 to buy additional food items in the counties we serve,” said Forcht Bank President Tucker Ballinger. Everyone is encouraged to drop off their non-perishable food item at any Forcht Bank location during this time. Let’s all help families in need throughout the Bluegrass by sticking a “FORCHT” in hunger.
FNB Bank presented a check for $500 to support the fourth annual Graves County Empty Bowls Project, scheduled for Saturday, April 29, 2017 at Trace Creek Baptist Church. The Empty Bowls Project is an international grassroots movement with a mission to fight hunger locally and globally. All proceeds from the event will benefit the Mayfield-Graves County Food Pantry, which served approximately 4,600 local families in 2015.
“We are honored to be a part of the Empty Bowls Project for our fourth year,” stated Brooke Wiles, FNB Marketing Director. The Empty Bowls fundraising event allows ticket holders to select a hand painted bowl and sample food provided by local restaurants. After eating, participants can take their uniquely decorated bowl home as a constant reminder of the empty bowls in the world.
FNB Bank “Empty Bowls” Project
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KENTUCKY BANKER MAGAZINE
125
Dr. Sparks Retires From Farmers Deposit Bank Board Director Post Dr. Robert B. Sparks retired from his position as Director Dr. Robert Sparks grew up in Pike County around Pondon the Farmers Deposit Bank board on September 22, 2016, creek, and attended Belfrey High School. After graduation, he received a basketball scholarship to Eastern Kentucky due to health issues. He served on the board for 39 years. University. He was at EKU until he was drafted into the KoDr. Robert B. Sparks is a well - known dentist and a com- rean War. After the war, he went back and attended the munity activist for the Carlisle area. school in Pikeville where he continued playing basketball. “Dr. Sparks has been very active within this community.” He then went on to continue his education through the Pat Letcher stated. His involvement in the community can University of Louisville’s School of Dentistry. At that time, be seen in many ways, from helping others in need, wheth- this was the only university in the state that offered a dental er it’s doing what he can to help them find employment to program. helping some get into college and simply bettering their future to orchestrating major projects, such as the development of the Blue Licks State Park Lodge and the renovation of the Neal Building.
He started his dental practice here in Carlisle with his lifelong partner Dr. Leon Riggs. Riggs and Sparks grew up together, attended the same schools, and then later became business partners helping the community for over 42 years with their dental needs.
Sparks has served on various civic boards from the Nicholas County Health Department, Farmers Deposit Bank, the University of Pikeville just to name a few.
“Over the course of my years knowing Dr. Sparks, he has helped me grow and mature. I am able to do the job I have today thanks to him. Learning to Dr. Sparks resides in Carlisle deal with public, what you had with his wife of 56 years, Carol to have to work in the commuSparks, where they attend the nity, the admiration that he gave First Christian Church. They me and the confidence from his have two children, Pam VanArsdall and David Sparks as well as two grandchildren. Dr. admiration, gave me the courage to do the job. He was Sparks enjoys woodworking, farming, and considers him- like a father figure, the values that I have gained from him is priceless. I am proud to call him my friend”, said Mike self an active sports fan. Pryor, Nicholas County Judge Executive. “What he offers When asked what words would best describe her father, people is priceless. He is an amazing example for this comPam remembered a something that the family did for his munity of what we should all strive to be.” birthday one year - they wrote down several words describing what he meant to them in different colors and gave Dr. Sparks leaves an impressionable mark upon this comthem to him. Some of the words used were trustworthy, role munity from his valued opinion and efforts to his dedicamodel, wise, great storyteller, generous leader, inspiration- tion”. al, and many more.
UNITED IN SERVICE
www.kybanks.com
JULY 2016 | KENTUCKY BANKER 13
KENTUCKY BANKERS ON THE MOVE
125
Kyle Walters
Bianca Weaver
Citizens Bank is pleased to announce that Kyle Walters has joined their team in the Trust Investment Center. Kyle has several years experience in financial planning and investments and holds his Kentucky Health and Life Insurance FINRA Series 7,63, and 26 licenses. Walters is a graduate of Western Kentucky University with a bachelor’s degree in Finance.
Traditional Bank is excited to announce the promotion of Bianca Weaver to Banking Center Manager for its Paris Banking Center. Bianca started at Traditional Bank in 2012 and most recently served as an Assistant Banking Center Manager in the Mt. Sterling Market.
Amy Futrell
Dennis Smith
Heritage Bank would like to announce the promotion of Amy Futrell to Market President for Calloway County. Amy has worked in various aspects of banking for more than 25 years. Futrell has been with Heritage Bank since 2001.
Traditional Bank is excited to welcome Dennis Smith as a new Consumer Loan Officer at the Mt. Sterling location.
Erin Fulkerson Hall
Kimberly Elliott
Community Trust and Investment Company would like to announce that Erin Fulkerson Hall has joined CTIC’s Wealth and Trust Management team as Vice President, Relationship Officer for Private Wealth Services. Erin earned her bachelor’s degree, Summa Cum Laude, from Western Kentucky University and Juris Dcotor from the University of Kentucky College of Law.
Kimberly Elliott recently joined Farmers National Bank in the role of Assistant Vice President, Real Estate Lender. Kimberly has worked in the financial services industry for 26 years.
David Barrer
Cheryl Raspberry
Pentegra Retirement Services is pleased to announce the promotion of David Barrer to National Director of TPA Markets. David has more than 30 years of experience in the industry and will lead the business development efforts in the TPA market.
The Murray Bank presented Cheryl Raspberry with the Employee of the Quarter award at the bank’s recent employee meeting. Cheryl currently works in Deposit Operations at the bank. Raspberry has been with The Murray Bank for 2 years and has been in banking for over 40 years.
SBA Grants Kentucky Bank Preferred Lender Status PARIS, KY – Kentucky Bank has been designated as an “SBA Preferred Lender (PLP),” according to an announcement made by the Small Business Association. The Preferred Lenders Program (PLP) is part of SBA's effort to streamline the procedures necessary to provide financial assistance to the small business community. Under this program, SBA delegates the final credit decision and most servicing and liquidation authority and responsibility to carefully selected PLP lenders. Kentucky Bank is now included.
“Kentucky Bank is pleased and honored to be named an SBA Preferred Lender,” said Chris Jackson, VP, Small Business Administrator. “Earning this designation reflects our dedication to helping our vibrant small business community grow and create jobs through our participation in SBA’s lending programs.”
Kentucky Bank, a leading community bank in Kentucky is celebrating its 165 anniversary. Kentucky Bank is honored to have earned BAUER FINANCIAL Inc.’s highest 5-Star The SBA awards Preferred Lender status to lenders who Superior rating. A 5-Star rating indicates that Kentucky have demonstrated their commitment to small business Bank is one of the strongest banks in the nation. Kentucky and have the ability to effectively serve this market. PLP Bank has also been recognized as one of “The Best Places status allows Kentucky Bank to offer small business cus- to Work in Kentucky” for the past 5 years. Kentucky Banks tomers the full range of SBA loan products as well as a faster stock symbol is KTYB. and streamlined loan approval process. 14 KENTUCKY BANKER | JULY
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KBA is pleased to have TIB’s Agent Card Program as a KBA Vendor Solution! TIB is a leader in helping community banks compete and 5. Stay Involved. TIB keeps you involved in the approval win in the ultra-competitive Card Services market. process. If a customer does not meet the approval standards, TIB will always contact you and try to work out a Consider the following: positive outcome for you and your valuable customer. 1. Preferred By Community Bankers. One in every five community banks in America relies upon TIB for one or 6. Your Partner. Never a competitor. Unlike so many othmore aspect of their Card Services offering. It is one rea- er providers, correspondent banking is TIB’s only busison that TIB is the largest and most trusted bankers’ bank ness. That means TIB will never cross-sell or compete for your customer. in the country. 2. Your Name & Brand. TIB’s Agent Card Program pro- For more information about TIB’s industry-leading Card vides community banks with a range of competitive Services Programs, please contact Selina Parrish at the Credit Card products you can offer your customers and KBA at (502) 736-1282 or sparrish@kybanks.com that can be branded with your bank’s name and logo. After looking at several card programs, First & Farmers 3. No Risk. TIB’s Agent Card Program eliminates your risk. chose the TIB Agent Card Program. We are pleased that our They service the credit and you collect your portion of customers will have the opportunity to apply for a First & Farmers branded card. TIB’s administrative support for the the proceeds. program is also a great service. 4. Rewards Program. TIB’s attractive Rewards Program Terry Pugh, VP/Chief Lending Officer is one of the most generous and flexible in the marketFirst & Farmers National Bank, Inc., Somerset, KY place.
FACEBOOK CONTEST ENTER & WIN! THREE HOLIDAY DRAWINGS
DRAWING 1) Like us on our Facebook page from December 1 to 16, 2016, to be entered in to a drawing for a $50 Amazon gift card. DON’T FORGET TO ASK FRIENDS TO LIKE OUR PAGE! DRAWING 2) If you have already Liked us on our Facebook page in the 2016 calendar year you will be entered in to a drawing for another $50 Amazon gift card. DRAWING 3) Ugly Christmas Sweater Contest After you have Liked us, you can post some pictures on our page. Post a picture of you in your absolute WORST Christmas Sweater. The most gaudy and remorseless sweater you can muster. A $25 Amazon gift card will be awarded to both a male and female winner, judged by the KBA staff. Winners will be posted on our Facebook page December 21st 2016; gift cards will be mailed first class on December 21st. Good luck!
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Central Kentucky Federal Hosts Appreciation Week & Open House
In our industry, mergers and acquisitions are commonplace and often result in a renewed strength and stability, particularly as banks considered small by Wall Street standards, join forces. Such is the case for Central Kentucky Federal Savings Bank as evidenced by the many improvements now in place at the bank’s Garrard County office. Expanded parking and extensive landscaping have now been complimented by an interior remodeling that includes new flooring, wall coverings, window treatments and artwork. The most significant change that can be observed at the office located at 208 Lexington Street in Lancaster, is a prominent LED illuminated sign that displays the bank’s new logo, considered to be an integral component of the bank’s rebranding efforts. In 2013 the Board of Directors of Central Kentucky Federal approved a merger with Kentucky First Federal Bancorp which aligned them with two other long serving, community based Kentucky thrifts; First Federal of Frankfort and First Federal of Hazard. The offices of Central Kentucky Federal in Lancaster and Danville now operate as a division of First Federal Savings Bank of Kentucky. However, the roots of one of Garrard County’s oldest businesses run much deeper. Prior to its merger with Central Kentucky Federal in 2000, the bank operated as First Lancaster Federal and enjoyed a long and prominent history in the community. Originally chartered as a Building and Loan Association by an Act of the Kentucky Legislature that incorporated the Association on April 21, 1873, making it one of Kentucky’s oldest savings association charters and later operating as a Savings Bank with an expansion of services and office relocation. In celebration of its long history in the community and of the many recent improvements made to its facilities, the bank held a Customer Appreciation Week that was culminated by an Open 18 KENTUCKY BANKER | JULY 2016
House on Friday, June 10th. The Open House, chaired by manager Virginia Stump and loan officer Ronald Howard, was well attended by customers and members of the community who enjoyed a buffet lunch provided by local caterer, Betty Noe. There were a variety of promotional gifts given to all attendees and some wonderful door prizes that were locally donated and created. Door prizes included wooden crafts by Natures Design (J.K. Simpson), a historically significant book titled “Never to be Forgotten World II Veterans of Garrard County” by Margaret Creech Burkett and a gift bag of sweets from long standing Lancaster business Mom Blakeman’s Creamed Pull Candy. In describing the bank’s appreciation of its customers and community both Stump and Howard would agree that preserving the philosophy of the thrift charter granted so many years ago has allowed the bank to prevail and serve its customers well. “Since 1873, the goal has been to provide a safe place for customers to grow their savings for a secure future and to achieve the American dream of home ownership. We continue to offer competitive rates for savings and time deposits as well as for fixed and variable rate mortgages”, Stump said. “In the banking system, smaller community banks play an indispensable role,” Howard added. “We are in the heart of the communities that we serve and our highest ranking officers live in the same neighborhoods as our customers. We are able to forge deep and long-standing relationships and bring a keen knowledge of the local economy and culture.” The staff at the newly decorated office are confident that all of the recent improvements and new signage are a strong testament to the bank’s renewed commitment to Garrard County. Article submitted by Central Kentucky Federal Savings Bank, a division of First Federal Savings Bank of Kentucky.
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CSI Ranked One of the World’s Largest FinTech Providers by American Banker Computer Services, Inc. (CSI) (OTCQX: CSVI), a provider of end-to-end financial technology solutions, was named to the 2016 FinTech Forward 100 list of the world’s leading technology providers. Appearing on the list for the third consecutive year, CSI ranked 57th on this year’s Top 100 listing, which is a collaboration between American Banker and BAI. “We are delighted to be included in the FinTech Forward 100 rankings for the third consecutive year, which further illustrates CSI’s continued concentration on delivering robust financial technology solutions for today’s institutions,” said Steve Powless, chief executive officer of CSI. CSI continues to build momentum through such valuable technology solutions as core bank processing, managed services, regulatory compliance and other key product segments. Most recently, CSI was listed as the second largest global provider of cloud services as part of Penton Media’s sixth-annual Talkin’ Cloud 100 report. Additionally, the company was named in the
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2015 GOAL ACHIEVERS Group 1 Citizens Deposit Bank of Arlington, Inc.
Mr. Ernest L. Williams
Farmers Bank & Trust Company
Mr. Wade Berry
First Community Bank of the Heartland, Inc.
Mr. R. Bruce Kimbell
Group 2 Commonwealth Community Bank, Inc.
Mr. Billy W. Luttrell
First State Bank
Mr. Michael H. Mercer
First United Bank and Trust Company
Ms. Karen Glenn
Planters Bank, Inc.
Ms. Elizabeth Griffin McCoy
United Community Bank of West Kentucky, Inc.
Mr. Garland Certain
United Southern Bank
Mr. Billy Bingham
Group 3 The Cecilian Bank
Mr. Greg Pawley
Commonwealth Bank & Trust Company
Ms. Margaret Ann Wells
Eclipse Bank
Mr. Stephen C. Stratton
First Citizens Bank
Mr. Scott T. Conway
Magnolia Bank, Incorporated
Mr. Ronald L. Sanders
Republic Bank & Trust Company
Mr. Steven E. Trager
Stock Yards Bank & Trust Company
Mr. David P. Heintzman
Your Community Bank
Mr. James D. Rickard
Group 4 American Bank & Trust Company, Inc.
Mr. Thomas J. Smith, III
Bank of Edmonson County
Ms. Michelle Coleman
Group 5 Citizens Union Bank of Shelbyville
Mr. David M. Bowling
Farmers Bank & Capital Trust Company
Mr. Rickey D. Harp
The Farmers Bank of Milton
Mr. Neil S. Bryan
First Farmers Bank & Trust Company
Mr. Darryl Traylor
First Federal Savings Bank of Frankfort
Mr. Don D. Jennings
Peoples Bank & Trust Company
Mr. James W. Beach
2015 GOAL ACHIEVERS Group 6 Central Bank & Trust Company
Mr. Luther Deaton
Citizens Guaranty Bank
Ms. Kathy Samples
The Farmers National Bank of Danville
Mr. Greg W. Caudill
The Farmers National Bank of Lebanon
Mr. George B. Spragens
First Federal Savings & Loan Assoc. of Morehead
Ms. Cindy Reffrett
Kentucky Bank
Mr. Louis Prichard
Owingsville Banking Company
Mr. Thomas N. Richards
Peoples Exchange Bank
Mr. Claude E. Bentley
Traditional Bank, Inc.
Mr. William Alverson
Winchester Federal Bank
Ms. Kari R. Gough
Group 7 The First National Bank of Russell Springs
Ms. Charlene S. Harris
First State Financial, Inc.
Ms. Katherine Reese Capps
Home Federal Bank Corporation
Mr. D. Alex Cook
Hometown Bank of Corbin, Inc.
Mr. Timothy E. Barnes
Hyden Citizens Bank
Mr. William F. Brashear, II
The Monticello Banking Company
Mr. Kenny L. Ramsey, II
United Cumberland Bank
Mr. Gordon Kidd
Group 8 Citizens Bank of Northern Kentucky, Inc.
Mr. Michael Hill
Heritage Bank, Inc. of Erlanger
Mr. H. Lytle Thomas
Group 9 Citizens National Bank of Paintsville
Mr. V. Burton Bellamy
The Commercial Bank of Grayson
Mr. Mark D. Strother
Commercial Bank of West Liberty
Mr. Brock Anthony Litteral
Community Trust Bank, Inc.
Mr. Mark A. Gooch
The First Commonwealth Bank
Mr. Greg A. Wilson
First Federal Savings & Loan Assoc. of Hazard
Mrs. Lou Ella R. Farler
Kentucky Farmers Bank Corporation
Ms. April R. Perry
Town Square Bank
Mr. Bruce Van Horn
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Kentucky Community Banks Dominate the Deposit Growth for the State by M. Lynn Cooper, President Milynco Financial
or one county, Pulaski County is in the Southern or South Central part of the state.
The FDIC recently released its latest figures on bank deposits and market share as of June 30, 2016. Banks are required to provide regulators with branch deposit numbers for their offices as of June 30 each year. Those numbers indicate that there are 190 banks and 1,689 bank offices in the state with total deposits of $76,529,871,000. The number of banks declined by six and the number of offices has declined by 12 from the prior year however deposits have increased a total of $1.8 billion or 2.41%. As an aside, of the 190 banks in the state, 46 or 24% have federal charters while 144 or 76% are state chartered. The Top 5 KY Based Banks with the most in $ Growth in 2016 are indicated in the chart below. The Cecilian Bank and First Southern were aided in growth by in state acquisitions.
Kentucky based banks (those that are headquartered within the Commonwealth) make up 87% in number while those from outside the state total 13%. Offices of those Kentucky based banks total 62% while those non-KY based banks make up 38% of the offices in the state. However, the market share of KY based banks vs. the others illustrates a slight advantage with the KY based banks controlling 56.69% of the market. Interestingly, the most telling statistic was that the locally headquartered community banks outgrew the out of state super regional banks by a ratio of 5.4 to 1 or a little over 4 to 1 on a percentage basis.
The top 5 KY based banks in terms of % Growth were somewhat different. The Cecilian Bank, First Southern and Kentucky Bank all were aided positively in growth by an in state acquisition.
In terms of geographical markets, the Louisville, Jefferson County market had more growth than the other top four counties combined with $863 million in deposit growth. The Bowling Green, Warren County market was The top five banks in Kentucky control nearly $29 billion second with $156 million in deposit growth with Faywith 494 offices or 38% of the market. The top five banks are ette, Marshall and Campbell following closely behind. all headquartered out of state. The top 20 KY based banks control $21.3 billion with 420 offices or 28% of the market. The Top 5 Counties in terms of bank deposits are shown below. Jefferson County consistently leads the list with nearly one quarter of state’s bank deposits. Interestingly enough, of the top 10 markets in the state, 30% are in the Central part of the state, 30% in the North, 30% in the West while 10% 24 KENTUCKY BANKER | JULY
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The bottom 5 Counties in terms of growth in deposits are led by Daviess County, Owensboro area, with a decline in deposits totaling $543 million, however most of that decline was primarily attributed to one out of state bank located in the market.
The other markets indicating the strongest growth were the Louisville-Southern Indiana market followed by the Lexington area, the Evansville-Henderson market and the Huntington-Eastern KY market.
In summary, Kentucky based Community Banks are solThe smallest county in terms of bank deposits is Robertson id deposit producers compared to their Super Regional with $17.8 million in deposits and one banking office in the counterparts. Even though the state has shown a decline in the number of banks and bank offices, deposit growth was county. healthy at 2.4% growth even though interest rates are at or The top SMSAs were led by the Northern KY -Cincinnati near all time lows. market which totals nearly $107 billion and had an extraordinary growth of $16.4 billion, in excess of 18% over the Nationally, the numbers of banks and the numbers of bankprior year. The unusual growth in the Cincinnati market ing offices continues to decline as well. The number of was primarily attributed to US Bank who had an increase banking institutions has been declining since 1985 and the in deposits in that market of around $13 Billion of the $16.4 number of banking offices has been declining since 2013. Billion overall growth. Assuming that data was an aberra- Merger activity and new banking technology will most liketion and you discount that growth entirely, you would still ly continue to contribute to this decline. have growth of around $3.4 billion or 3.8% growth.
Celebrating 125 Years
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JULY 2016 | KENTUCKY BANKER 25
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Bert Ely’s FARM CREDIT WATCH
FCS Lenders Dominate a Ranking of the Largest Ag Lenders FCS institutions dominate the ranking of the nation’s largest ag lenders. This growing domination reflects the dramatic growth in the FCS’s share of total farm debt as reported in last month’s FCW. Of the 20 largest ag lenders, 16 are FCS institutions and only four are commercial banks – Wells Fargo, Rabobank, Bank of the West, and Bank of America. Of the 100 largest ag lenders, 58 are FCS institutions and 42 are commercial banks. At the bottom of the list, only seven FCS direct-lending associations have a lesser amount of ag loans on their books than the 100th largest commercial bank ag lender. Given the pace at which FCS associations are merging, smaller FCS associations will continue to disappear into larger associations. The forthcoming merger of AgStar, 1st Farm Credit, and Badgerland (reported in last month’s FCW) is just the latest example of consolidation within the FCS. Based on June 30, 2016, data, the merged association, to be called Compeer Financial, will be the third-largest FCS association and the third-largest ag lender in the United States.
real estate, and consequently holds a smaller share of that type of lending compared to commercial bank ag lenders. Specifically, FCS profits on non-real-estate-secured lending are exempt only from state income taxes and the FCS has much less of an interest-rate advantage for the shorter-term funding used to finance non-real-estate-secured loans.
FCA Inspector General ignores key flaw in FCS YBS numbers Last month, Elizabeth Dean, the Inspector General (IG) for the Farm Credit Administration (FCA), issued a report on the FCA’s oversight of the FCS’s programs for lending to young, beginning, and small (YBS) farmers. Here is the link to that 18-page report: https://www.fca.gov/Download/ InspectorGeneral/Auditrpts/OversightofYBSPrograms.pdf
IGs at federal agencies are supposed to provide independent oversight and review of the agency’s activities. Despite all its verbiage and the auditing Dean and her staff did, the report fails to address, or even identify, the fundamental flaw in The right column in the linked table – farm loan how the FCS tallies its YBS loan data – the double- and concentration – highlights a very unhealthy trend in U.S. triple-counting of YBS loans which severely overstates the ag lending – a larger and larger portion of ag loans are held amount of the FCS’s YBS lending. That overstatement, in on the books of FCS institutions that by virtue of their turn, leads to an understatement of the extent to which the congressional charter are highly concentrated in ag lending. FCS lends to larger farmers, ranchers, and agribusinesses, If American agriculture was to again experience financial borrowers hardly in need of taxpayer-subsidized FCS loans. distress comparable to what it experienced in the 1980s, that distress could easily be reflected in the finances of the The FCA candidly admits to this double- and triple-counting FCS. The preventative for avoiding a repeat of the 1980s yet elsewhere it has demonstrated the ability to eliminate is not to broaden the lending powers of FCS institutions it. A young (Y) farmer is defined by the FCS as being 35 but instead to level the competitive playing field between or younger, a beginning (B) farmer as someone with 10 or commercial banks and the FCS, which will not only lead fewer years of farming or ranching experience, and small to a shift of ag lending to commercial banks, but it will give (S) as a farmer, rancher, or producer of aquatic products rural banks an opportunity to grow their loan portfolios. who normally generates less than $250,000 in gross annual sales. As he FCS routinely notes when reporting YBS data, The totals at the bottom of the table are quite informative, “farmers/ranchers may be included in multiple categories too, as they contrast the total amount of ag lending by the since they are included in each category in which the FCS institutions with the ag lending by the 100 largest definition is met.” That means a loan to a 32-year-old farmer commercial bank ag lenders. The FCS institutions dominate with seven years of experience who generates $220,000 a farm real estate lending, with more than three times as much year in farm sales is counted three times in the YBS data. of such lending as the commercial banks. This dominance Worse, each loan to that farmer is counted separately, so reflects two key competitive advantages that FCS lenders if the farmer in this example has three FCS loans, he or enjoy – their profits on loans secured by real estate are she will be counted nine times in the YBS data. IG Dean exempt from federal and state income taxation and the apparently sees no problem with this multiple counting. FCS, by virtue of its GSE status, is able to fund long-term, fixed-rate loans with long-term, fixed-rate debt. The FCS Interestingly, in its 2015 Annual Information Statement, has much less of a competitive advantage in its production the FCS implicitly acknowledged that it does aggregate and intermediate-term lending, which is not secured by continued on the next page
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individual loans by borrower when, for the first time, it published data showing the number of borrowers by dollar size range. Previously, the FCS had reported individual loans by size range. The FCS’s acknowledged ability to aggregate loans by borrower means that the FCS could report its YBS lending by borrowers who are a Y, B, and S; some combination of two of those characteristics; or just one of those characteristics. Such groupings would provide a much more accurate picture of the scope of the FCS’s YBS lending. Further, the FCS should exclude from its YBS lending data all loans to YBS farmers that are guaranteed by third parties, such as a wealthy farmer who guarantees the loans of a 27-year-old son or daughter who has his or her own farm. In the interest of ensuring that the FCS publishes accurate, meaningful information about the FCS’s YBS lending, surely IG Dean could make that recommendation.
Cooperative Finance Association and CoBank A banker recently sent me the 2015 annual report of the Kansas City-based Cooperative Finance Association (CFA). CFA, which is largely financed by CoBank, lends to agricultural cooperatives and to farmers “sponsored” by a cooperative that belongs to CFA. At August 31, 2015, CFA had outstanding loans of $28.7 million to cooperatives and almost $289 million to farmers. Those loans were largely funded with $265.2 million borrowed from CoBank. CFA is profitable and well-capitalized (equity equaled 16.5% of assets) so it poses no apparent credit risk to CoBank. However, CFA loans to farmers essentially represent loans that otherwise would be made by a commercial bank or by the FCS association serving the territory where the farmer is located, possibly even an FCS association that is funded by CoBank. CFA also has arrangements with several FCS associations to buy and sell loan participations. One can reasonably ask whether CFA in fact is a “shadow” FCS association since it is funded by CoBank and lends to cooperatives who otherwise would borrow directly from CoBank as well as lending to farmers who otherwise would be borrowing from an FCS association or a commercial bank. Do other “shadow” FCS associations exist? Let me know. Report FCS lending abuses to: green-acres@ely-co.com Bankers are continuing to send FCW reports of FCS lending abuses, such as FCS loans for rural estates, weekend getaways, and hunting preserves.
Celebrating 125 Years
www.kybanks.com
General Banking School Graduates Earn Scholarships The following 2016 KBA General Banking School graduates received Graduate School Scholarships:
Graduate School of Banking at LSU Mr. Shawn Tyra Citizens Bank & Trust Company of Jackson Mr. Brett Aaron The First National Bank of Russell Springs
Graduate School of Banking at Colorado Ms. Patty Gibson Commercial Bank of West Liberty
Prochnow Educational Foundation State Scholarship Madison, Wisconsin Ms. Shatana Johnson Citizens First Bank, Inc. Mr. John T. Miner, Jr. Central Bank & Trust Company
JULY 2016 | KENTUCKY BANKER 27
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