Kentucky Bankers Magazine Winter 2021

Do you Need Multi Factor Authentication in 2022?

Best Security Practices from Endorsed Vendor Box Lake Networks Page 20

WINTER 2021/22

Official Publication of the Kentucky Bankers Association Serving Kentucky Banks So Kentucky Banks Can Better Serve Their Communities

Kentucky Bankers Relief Fund DETAILS INSIDE kybanks.com/relieffund

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For more information contact us via email solutions@bbky.com or phone 800-248-3229.

WE KNOW BANKS

“We were content with the coverage we had and were not shopping our plan. After meeting with KBA Insurance Solutions, we had no choice but to make the move to Chuck and his team.

They proposed a thoughtful plan design & introduced benefits that we had not previously offered. When we showed the rates KBA Insurance Solutions offered to our prior agent, she said: “…you have to make this change.” Since changing our results have been better coverage, expanded offerings and greater cost savings. I would highly recommend that any bank explore the options available through KBA Insurance Solutions.”

Mr. Charlie Dicken, EVP Trust Officer, First Kentucky Trust

Property & Casualty Collateral Protection Employee Benefits Fee Income Cyber BOLI

FREE COVERAGE REVIEW

Let us use our expertise to review your bank’s coverage so you can get to the business of serving your communities.

Chuck Maggard

KenBanc Insurance President & CEO cell 606-682-1950 cmaggard@kybanks.com

Lisa Mattingly

KBA Benefit Solutions Director of Sales & Service cell 502-377-4048 lmattingly@kybanks.com

Brandon Maggard KenBanc Insurance Account Representative cell 606-682-2769 bmaggard@kybanks.com

Ballard W. Cassady Jr.

Brandon Maggard

President & CEO bcassady@kybanks.com

Account Representative KenBanc Insurance bmaggard@kybanks.com

Debra K. Stamper

Chuck Maggard

EVP & General Counsel dstamper@kybanks.com

WHO WE ARE: The KBA is a nonprofit trade association that has been providing legislative, legal, compliance and educational services to its member institutions since 1891.

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.

WHAT WE DO: 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 4 ways:

Miriam Cole

President & CEO KenBanc Insurance cmaggard@kybanks.com

Lisa Mattingly

Executive Assistant mcole@kybanks.com

Director of Sales & Service KBA Benefit Solutions lmattingly@kybanks.com

John P. Cooper

Donna McCartin

Legislative Solutions jcooper@kybanks.com

Benefit Support Specialist dmccartin@kybanks.com

Paula Cross

Tammy Nichols

Education Coordinator pcross@kybanks.com

Finance Officer HOPE of Kentucky tnichols@kybanks.com

Josh Fischer

Katie Rajchel

Director of Communications jfischer@kybanks.com

Nina K. Gottes

Accounting Manager krajchel@kybanks.com

Selina O. Parrish Director of Membership sparrish@kybanks.com

1. Government relations & industry advocacy 2. Information interchange 3. Education 4. Products and services

Sponsorship & Business Development ngottes@kybanks.com

Casey Guernsey

Timothy A. Schenk

kybanks.com

Jamie Hampton

KENTUCKY BANKERS ASSOCIATION 600 West Main Street, Suite 400 Louisville, Kentucky 40202 KENTUCKY BANKER is the official bi-monthly magazine of the Kentucky Bankers Association (KBA). No part of this magazine may be reproduced without express written permission from the KBA. The KBA is not responsible for opinions expressed by outside contributors published in KENTUCKY BANKER. The KBA reserves the right to publish submissions at the discretion of the KENTUCKY BANKER editorial team.

For more information, or to submit an article, pictures or pass on a story lead, contact Josh Fischer, Managing Editor, 502-736-1283 or jfischer@kybanks.com

Enrollment and Billing Specialist cguernsey@kybanks.com

Education Coordinator jhampton@kybanks.com

McKenzie Just Caldwell Staff Accountant mcaldwell@kybanks.com

Assistant General Counsel tschenk@kybanks.com

Jennifer Schlierf Sales Support KBA Insurance Solutions jschlierf@kybanks.com

Matthew E. Vance, CPA Chief Financial Officer mvance@kybanks.com

Natalie Kaelin, Esq.

Billie Wade

Director of Education Alliance nkaelin@kybanks.com

Executive Director HOPE of Kentucky bwade@kybanks.com

Tamuna Loladze Chief Operating Officer HOPE of Kentucky tloladze@kybanks.com

Audrey Whitaker Insurance Services Coordinator awhitaker@kybanks.com

Michelle Madison IT Manager mmadison@kybanks.com

facebook.com/kybankers Bold frame denotes management team member. Please feel free to email us, we are here to help!

2021-2022 OFFICERS & BOARD CHAIRMAN James A. Hillebrand, Chairman & CEO Stock Yards Bank & Trust Co.

PAST CHAIRMAN J. Wade Berry, President & CEO Farmers Bank & Trust Co.

VICE CHAIRMAN Ruth O’Bryan Bale, Chairman South Central Bank, Inc.

KBA PRESIDENT & CEO Ballard W. Cassady, Jr. Kentucky Bankers Association

TREASURER Mark D. Strother, President & CEO The Commercial Bank of Grayson GROUP REPRESENTATIVES Represents Group 1 Randell Blackburn Market President, McCracken County Community Financial Services Bank

Represents Group 8 Anthony Kinder President & CEO, Peoples Bank of Kentucky, Inc.

Represents Group 2 R. Steven Cox President, Hancock Bank & Trust Co.

Represents Group 9 April R. Perry Chairman & CEO, Kentucky Farmers Bank Corporation

Represents Group 3 Greg Pawley President & CEO, The Cecilian Bank Represents Group 4 Michelle Coleman CEO, Bank of Edmonson County Represents Group 5 Gregory D. Goff President & CEO, First National Bank of Kentucky Represents Group 6 Charles Beach, III Chairman, Peoples Exchange Bank Represents Group 7 D. Alex Cook President & CEO, Hearthside Bank

EDUCATION ALLIANCE REPRESENTATIVE Lanie W. Gardner Community President First Southern National

THRIFT REPRESENTATIVES Jaime Coffey President & CEO First Federal Savings & Loan of Hazard BANK SIZE REPRESENTATIVES Represents Banks with Assets of $1B or more Elmer K. Whitaker President & CEO Whitaker Bank

KENTUCKY BANKER WINTER 2021/22 7 Chairman’s Corner 9 Straight Talk 11 My Two Cents 13 2022 NIM Improvement 14 How Americans Bank 15 New Regulatory Risk 18 Education Calendar 20 Box Lake Networks 24 Pete Mahurin 25 William Qualls 26 Advertise!

27 David Collins 28 Robert Lankford 30 Thank You Donors!

32 Spring Conference

April 24-26, 2022

Represents Banks with Assets at Least $200 M; less than $1B H. Alexander Downing President & CEO Franklin Bank & Trust Company

KBA BENEFITS TRUST COMMITTEE W. Fred Brashear, II President & CEO Hyden Citizens Bank

ADVERTISE IN KENTUCKY BANKER Want to advertise in KENTUCKY BANKER magazine?

CONTACT Nina Gottes Sponsorship & Business Development ngottes@kybanks.com 513-293-2467

WANT TO BECOME A KBA SPONSOR? Visit: kbasponsorship.com

Debra’s Two Cents Join the Club...

page 11

Kentucky Bankers Relief Fund The December tornado that ravaged parts of Western Kentucky affected us all. It is gratifying and humbling for us to see how quickly folks have stepped up to assist those in our industry, and in our Commonwealth, during times of need (see the long list of contributors on pages 30 and 31).

Bankers, bank employees and bank communities are all connected in a way that few industries can understand. We received contributions to the fund in a generous outpouring of support from across the United States, in every region, including Puerto Rico.

KBA Associate Members, Endorsed Vendors, our counterparts in Bank Associations across the country, banks inside and outside of the state and individuals who just wanted to help have given their support for Western Kentucky during this difficult time.

1 3

I wanted to take a moment to express my sincere gratitude to the Kentucky Bankers Association for their support of so many people during the horrific December 2021 tornado outbreak. Your willingness to step up and help the local banks and employees affected, as well as citizens of the communities, is greatly appreciated. As bankers, we are called to help people in so many ways as it pertains to their financial goals and dreams and we do it most of the time with a big heart and a genuine goal of helping. The help you provided was not listed in any banker’s job description but was certainly done with a big heart and genuine goal of helping. The KBA truly showed a giving and servant’s heart at a time when it was needed most. I am truly honored to be a part of an organization with such humbleness towards those in need. What an awesome team!!

Michael W. Hunt, President/CEO (pictured above) Sacramento Deposit Bank

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Please continue to keep those impacted in your thoughts and prayers, and visit kybanks.com/relieffund for more information.

Pictured: 1. KBA CEO Ballard Cassady hands off supplies to Michael Hunt, President and CEO of Sacramento Deposit Bank. 2. Matt Vance, KBA CFO, unloads supplies to volunteers. 3. Volunteers helping those impacted by the December tornado. 4. Central City Convention Center gymnasium turned into a donation dropoff.

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KBA CHAIRMAN’S CORNER by James A. Hillebrand Chairman & CEO, Stock Yards Bank & Trust Co. 2021-2022 KBA Chairman

Paddling Into

2022

There’s a poster in the Stock Yards Bank headquarters of a duck moving down a stream. Above the water, it’s calm, poised and determined - but underneath, it’s paddling as fast as it can to navigate the current.

We cannot take anything for granted. Spend time asking yourself, what can we do to be more efficient? To be more accessible? To deliver more value to our clients and communities? To be better as a bank and as an industry?

I think about that poster a lot when I reflect on the past few years and look at what’s ahead for 2022.

Ducks don’t float based on how well they paddle. They float because they are the right size to be naturally stable. If your bank is holding on to old technology or weighing itself down with out-of-date operational models, you risk going underwater.

Kentucky’s community bankers have kept a lot of businesses afloat, including their own, through the pandemic. Often, we make it look easy. We all know it hasn’t been.

Every banker in this state should be proud of how we have handled the past year. As we continue to strive for improvement as an industry, we continue to put our customers first and deliver value despite adversity. And as more obstacles emerge, like wage pressure and government regulations, we must continue to see each one as an opportunity to become more efficient and improve our value to customers.

While there is caution and concern for what’s to come in 2022, I am optimistic about our direction as we travel upstream together.

In 2022, we’ll see the fruits of our labor. Like you, Stock Yards Bank has worked hard on developing and executing our strategic plan over the past few years to have the financial strength and ability to take on choppy waters. We’re seeing more businesses with healthy balance sheets. We’re seeing an increase in mortgage lending. And we’re seeing customers adopt digital tools for a better banking experience.

This is all good news, but as an industry we can’t stop paddling.

Anyone that is coasting now will lag behind soon enough. If you’re not moving your bank forward to improve your customer’s experience, improve your technology and ensure the safety and soundness of operations, the coming years will be challenging.

The adoption of digital tools has soared due to the pandemic. Banks of all sizes will benefit from this shift in how we communicate with customers. It’s exciting to be able to provide more convenience to customers to reach them in the way they prefer.

Community banks need to deliver all the technology and functionality customers expect from a bank but in a personal and accessible way. The demise of the physical bank location has been talked about for years, but we still have them as a vital service delivery channel.

New tools will help make us buoyant. Not every bank transaction requires a conversation. Not every customer has the time to sit down to plan their financial goals and talk through their banking needs. And that’s OK. By providing more options, we provide more value. As we continue to boost our services, we want our customers to reach us the way they choose across a number of delivery channels and conveniences - whether that’s by phone, online, ATM, ITM, or in-person in a branch.

I’m thrilled to see how quickly customer-facing technology and what we use on the back end is improving our ability to support our customers. Every upgrade is a chance to serve our customers better. We believe that relationships are what sets us apart as community bankers, but building those relationships means finding paths to interact in new and adaptable ways. continued on page 10 KENTUCKY BANKER MAGAZINE | 7

THIS IS AN ADVERTISEMENT

AMENDING THE UNIFORM COMMERCIAL CODE TO ACCOMMODATE EMERGING TECHNOLOGIES

John T. McGarvey

Mindy T. Sunderland

In 2019, the Uniform Law Commission (“ULC”) and the American Law Institute (“ALI”) appointed a drafting committee for amendments to the UCC to deal with digital assets, transactions in which the sale or lease of goods are bundled with the provision of services and/or the licensing of information, and certain discreet amendments required outside the field of emerging technologies. Assuming approval of the sponsoring bodies, the amendments will be presented for consideration and enactment by the states in the Fall of 2022.

Most significant among the amendments is the creation of new Article 12, which includes a definition for “controllable electronic records” (“CER”). CERs are virtual currencies, non-fungible tokens, and digital assets with payment rights imbedded. A digital asset, as part of a controllable electronic record, would be negotiable, and transferable in a manner free of competing claims.

Additionally, CERs can serve as collateral under Article 9 through perfection by control.

Article 12 defines a controllable electronic record as “an electronic record that can be subjected to control…”. Under Section 12-105, a person has control of a CER if the CER, a record attached to or logically associated with the CER, or the system in which the CER is recorded, if any, gives the person the power to avail itself of substantially all of the benefit of the CER, the exclusive power to prevent others from availing themselves of substantially all of the benefit of the CER, and the ability to transfer control of the CER to another person. Further, the system in which the CER is recorded must enable the person to readily identify itself as having those powers and that person may be identified in any way, including by name, identifying number, cryptographic key, office, or account number. The definition of a CER specifically does not include electronic chattel LEXINGTON

mpmfirm.com

paper, electronic documents, investment property, transferable records under E-Sign or the UETA, deposit accounts, or intangible money.

One of the primary drivers for the Amendments to Accommodate Emerging Technologies is the advent of intangible money including virtual currencies. Unfortunately, the cryptocurrency industry has offered standalone statutes in several states to facilitate their industry without regard to the damage some of that legislation does to existing provisions of the UCC. The current definition of “money” would only include virtual currency if the virtual currency is authorized or adopted by a government as legal tender. The problem thereby created is that existing Article 9 allows a perfection of a security interest in money only by possession of the money. Obviously, intangible money by its very definition excludes physical possession. Control, as provided in the Amendments, will allow perfection of a security interest in virtual currency. The draft amendments allow the normal perfection rules to apply if the intangible money is in a deposit account. However, if the intangible money is not in a deposit account, control must be established through a means like a CER to perfect a security interest.

The essential purpose of the UCC is to facilitate commerce. As commerce has increasingly become electronic, and distributed ledger technology has been added to the business lexicon, the law must quickly follow. Currently, with no law to provide the certainty essential to business and commerce, people are agreeing to use Bitcoin, and other forms of virtual currency, as both a medium exchange and a store of value. Yet, there is currently no law to govern disputed claims to electronic records and the rights and benefits attached thereto. These amendments aim to address these deficiencies.

Morgan Pottinger McGarvey is a leading banking and finance law firm representing financial institutions, businesses and individual clients throughout Kentucky and Indiana.

LOUISVILLE

NEW ALBANY

STRAIGHT TALK by Ballard Cassady KBA President & CEO bcassady@kybanks.com

STAY THE COURSE

Reprinted from the KBA’s presentation to the Banking and Insurance committee last month concerning the IRS proposal and the ensuing crypto bills being filed in KY. As always, we appreciate the opportunity to present information to the Banking and Insurance Committees. Today, we were asked to update you on the IRS reporting requirement for banks that has been one of the most hotly contested legislative proposals of any presidential administration in my 70-year history.

This proposal was made part of a budget reconciliation bill, as a funding vehicle for a massive welfare expansion, costing between $2T to almost $5T, depending on who’s doing the math.

The bill initially proposed that banks be required to report to the IRS all inflows and outflows of cash exceeding $600 for every bank customer account—whether for minors, businesses, non-profits etc.

After massive public backlash, House Democrats moved that reporting threshold to hit “only” bank customers whose accounts receive $10,000 in non-wages deposits annually, completely missing the point that the issue was privacy, not the dollar amounts.

The KBA’s goal is the same as this committee’s, the safety and soundness of Kentucky’s banking industry.

privacy is woven into the very fabric of every community’s business relationship. This IRS reporting –– at any dollar threshold ––would blight all of those relationships with consequences we can barely imagine……… because this proposal is without precedent. Then too, customer data provided to the IRS would be subjected to much greater security risk, as evidenced by the 1.4 billion cyberattacks and breaches the IRS currently reports. It's also ironic that the government has imposed a ton of costly bank regulations in recent decades aimed at attracting people who don’t use banks, the so-called unbanked. Often, these are people who don’t trust institutions of any kind, and this IRS proposal will send them fleeing –– and plenty of current bank customers with them.

In addition to all that, the Wharton School of Business looked at how this new IRS funding impacts the IRS’s efficiency. Currently, the IRS claims it spends just over $1 for every $300 it collects.

Based on the Congressional Budget Office (CBO) scoring of a prior version of the bill, the IRS will be spending additional funding of $80B to collect an additional $120B. So, that means its efficiency will plummet, while the misery it can inflict on millions of Americans through audits and collections soars.

For community banks in Kentucky, the cost of doing the IRS’s job for them would mean adding bank staff that our smaller banks absolutely cannot afford.

Ultimately, the version of the bill that passed the House on November 19 did not include the provision requiring banks to report on their customers to the IRS. Good, right? Wrong! The bill contains $80B to hire more IRS agents, perhaps as many as 87,000 new agents. Less than $2B of that $80B is allocated to “taxpayer services”. The rest goes to operations support and enforcement— meaning audits, investigations, asset monitoring, and legal actions.

That has many observers fearing a plan to slip the bank reporting requirement back into the bill in the Senate.

While many senators have expressed staunch opposition to it, it’s hard to predict how Senate negotiations could end up. And even if it isn’t included, unelected and unaccountable regulators have developed a nasty habit of making laws disguised as regulations. You may recall that Dodd/Frank was only supposed to apply to banks over $10B until the regulators decided if it’s good for one, it’s good for all.

So, our industry, along with thousands of our customers, continue to watch for this threat to re-emerge, and we’re joined by many other groups. The advocacy groups for every national or state financial institution, as well as business and consumer groups, have been deeply united in their intense opposition to this proposal. It attacks the very nature of the relationship between financial institutions and their customers, a relationship that has been developed and preserved by decades of statutory and case law. For a bank customer, privacy is the essence of that relationship, and trust in that

For community banks in Kentucky, the cost of doing the IRS’s job for them would mean adding bank staff that our smaller banks absolutely cannot afford.

And when such banks get regulated to that breaking point, they have no choice but to sell or merge. Those current transitions are undertaken with care for the communities involved, but change is hard, so hard that it should never be forced by misguided government regulation.

Whether or not our industry falls under the IRS yoke in the final version of the reconciliation bill, we surprisingly share the concern of some progressive media voices about who is truly being targeted by a massive expansion of tax collectors. When the leaked documents on tax evasion by the world’s rich and powerful, known as the ‘Pandora Papers,’ made headlines a few weeks ago, Forbes pointed out that relatively few Americans were in the report…, probably because the U.S. tax code provides plenty of legal tax sheltering opportunities without going offshore.

So, if the current version should pass, who will those new agents go after to collect the money needed to finance all this new welfare? It won’t be the likes of Warren Buffet, Elon Musk or Jeff Bezos—they have legal means to avoid taxes. That new tax revenue is more likely to be coming from you and me. The most honest of folks can make simple mistakes or misunderstand the massive tax code. And the vast majority of us can’t afford a team of tax professionals. That makes us the low-hanging fruit for all those new agents. continued on the next page KENTUCKY BANKER MAGAZINE | 9

STRAIGHT TALK: STAY THE COURSE Let that sink in: we’re going to spend $80B to collect $120B from the very people already struggling to supply that $80B. How much will all these new audits produce? I say, NOT ENOUGH to pay the tab for this new welfare spending. NOT ENOUGH to justify the anguish of those who will have to defend themselves in these audits without a team of CPA’s and lawyers.

And NOT ENOUGH to justify blighting the entire banking industry by subjecting all their customers to an invasion of privacy that previous generations could not have even have imagined.

So, the KBA and the over 5000 KY citizens who wrote letters to Congress on this issue are following the work of the Senate on this reconciliation bill with great concern, not just for our industry but also –– frankly –– for everyone we know and love.

But… this isn’t the only emerging industry issue that needs to be on the Committee’s radar. Right around the corner is crypto-currency issues.

You can’t listen to business news for more than three minutes without some mention of it. The sheer volume of the media chatter has stoked a sense of false urgency.

Bills have been filed in a handful of state legislatures as Americans wrestle with all this. Some may prove to be on the ‘leading edge’ while others… will find themselves on the ‘bleeding edge.’

continued from previous page

The approach of Kentucky's General Assembly to financial service innovations has always been one of judicious caution, of taking the time to learn from others’ mistakes. The exceptional soundness of Kentucky’s banks gives evidence to the wisdom of that approach.

With the regulation of crypto-currencies, we see no advantages –– only risks –– for our Commonwealth to start regulating in this area before the federal agencies have finished work that is still at least a year out.

The Federal Reserve, the OCC and the FDIC issued a joint statement just last week, that they will be working together in 2022 to issue guidance on the risks and opportunities of crypto-currency operations and guidance on how certain crypto-related activities should be conducted by banks.

The KBA’s goal is the same as this committee’s—the safety and soundness of Kentucky’s banking industry. To every Kentucky citizen, the word “BANK”, is synonymous with insurance, oversight regulation, community reinvestment and safety. In the almost four decades I’ve worked with this committee, I’ve seen its members respect and uphold the integrity of Kentucky’s financial services industry with cautious, thoughtful oversight. The committee has been successful as shown in FDIC state banking industry rankings, and by our consumer’s trust.

The banking industry of Kentucky just asks that you stay that course.

Who it will be, is yet to be seen.

CHAIRMAN: Paddling in 2022

continued from page 7

We must remember that every checking account matters. Every deposit dollar means something because it matters to our customers.

The community bank experience is still all about people. We will continue to have face-to-face interactions in branches, but we may not need as many. We owe it to our customers and our stakeholders to communicate in a way that is accessible and easy – no matter the platform or venue.

There are not a lot of community banks left. We must remember that every checking account matters. Every deposit dollar means something because it matters to our customers.

I’m excited by the vitality of the community bank. Our core relationship-based service model is alive and well. As we enter 2022, we adapt and evolve to care for our customers and ensure we stay afloat together. The legacy of community banks in Kentucky is strong as we continue to be trusted, dedicated and resilient.

Keep paddling and I’ll see you all upstream!

10 | KENTUCKY BANKER MAGAZINE

MY TWO CENTS by Debra Stamper KBA Executive Vice President & General Counsel dstamper@kybanks.com

Knowing Me Knowing You I hesitate to remark on this, for fear it isn’t true. But, could the government be recognizing the fact that companies/individuals other than banks may need to be regulated as well?

I read an article that New York was expanding CRA-type requirements to “nonbank mortgage lenders.” Illinois and Massachusetts have done the same. Of course, this is not the Federal government, but could this trend make its way to DC and perhaps even cover credit unions at some point? Maybe they will realize that some of our competitors could be guilty of the crimes of which they accuse us.

Then, this morning, I see an Advanced Notice of Public Rulemaking released by FinCEN that is seeking public comments regarding inclusion of BSA requirement on a more inclusive group of “persons involved in real estate transaction.” The Government may finally be realizing that criminals are laundering money in ways other than bank accounts.

It’s refreshing to see eyes begin to open. But they cannot just look backward at long existing industries when the real threat is electronic. Cryptocurrency purveyors and other digital transmitters of electronic financial transactions are pushing hard for two things: one, recognition/legitimacy and two, direct access to the payment system.

While we know digital changes are inevitable, we must ensure that they are held to the same standards of compliance and standards of oversight as banks are.

I don’t want to suggest that all digital or fintech companies are bad.

Many are owned by or working with banks to make your services better. But, there are so many that it is almost impossible to determine which are what.

For example, Ballard and I spend a lot of time thinking about and discussing cryptocurrency. Why? Because no matter how much we read, listen to, watch or study, we cannot find an understandable explanation as to why it should be allowed and recognized as a currency rather than a stock, commodity or a Ponzi scheme!

As a matter of fact, I would like to start an anti-cryptocurrency: I have a large Fire King filing cabinet. You and all your friends can give me a handful of money each and I will put it in the cabinet. (I decide how much each dollar you give me is worth on the first day I receive it). Each day other people can give me money as well. I will take a percentage of the money for my trouble. Each day I will send out a tweet telling each depositor how much each “one” money is worth. It may be more or less than your original deposit depending upon how much has been given to me, how much has been taken out and how much I keep for myself.

There is nothing to support its worth, so when it is gone, it is gone.

The Fire King is heavy, but it isn’t permanently affixed to anything, so a physical “hacker” could abscond with it all. There is nothing to review to determine if it is likely to go up or down in the future. If the 10 largest contributors decide to get out when the value is high, the rest of you are out-of-luck, because there is no insurance. BUT, right now the value is very high and the holidays are near. Please let me know if you are interested.

Although I hope that no one wants to take me up on this deal, cryptocurrency is still in all the headlines.

Although the DOL regulations provide that employees must be paid in cash of negotiable instrument “payable at par,” people are willing to take their paychecks in cryptocurrency. Think about that…an employee at Walmart is willing to be paid at whatever their $13/hour paycheck coverts to in bitcoin, only to find that the next day it may have decreased by 50%.

Of course, it could go up, but what if you cannot wait for that? Then, you can also download a mobile app that allows you to use your cryptocurrency to pay for goods—Starbucks accepts it. I cannot even imagine paying for an overpriced coffee and then finding out if I had bought it two hours later the cost would have been 30% lower.

Would you use your stock investments to buy and sell services and goods???

We have to watch both the state and Federal legislatures to track what is being considered in the crypto-world.

The Federal legislators are telling banks to be cautious. But Kentucky has already passed legislation that allows for significant tax incentives for blockchain and cryptocurrency mining companies (which track cryptocurrency movement) which open in Kentucky.

The excitement felt by some that Kentucky could be now be considered the friendliest state in the country or even the world for these activities might tee us up for more efforts to allow other, more competitive crypto related industries…such as crypto “banks.”

Two bills have been pre-filed that cause us concern on this front. We will watch these closely and talk to the sponsor. We may also need to call on you to make calls. Please be ready if we call!

KENTUCKY BANKER MAGAZINE | 11

THIS IS AN ADVERTISEMENT

2022 NIM Improvement Chad McKeithen, Managing Director, Bank Strategies Duncan-Williams Inc (Division of SouthState Bank Correspondent Group) 2021 Kentucky bank ROA is on a course to average the highest level it has been at in over a decade. Through September, Kentucky banks have averaged a 1.22% ROA. The only year it was anywhere close was in 2019, at 1.13%. Over the past decade, the average ROA in Kentucky was below 1.00%. So, 2021 has been a good year.

The problem is that the performance can’t be replicated. A large percentage of the revenue was from PPP fees, historical mortgage refi fees, and recapturing loan loss reserves--very little of this year’s revenue was from fundamental bank revenue sources.

In fact, if we dig deeper, we can see that net interest income (NIM) is at its lowest point in ten years. NIM is 3.49% compared to 3.74% over the past decade through the third quarter. With stimulus-related revenue declining, net interest income generation will be critical in 2022.

The two prevailing issues that will continue to pressure NIM next year are low loan growth and stubbornly high levels of cash/liquidity. Cash and cash equivalents are currently 11.64% of assets. That compares to a pre-covid level of about 6.38%. With overnight rates close to zero and expected to remain low through much of 2022, it will be a tremendous revenue drag on a sizeable segment of assets, while liquidity does not appear to be leaving any time soon.

The positive news is that short-duration bonds yields have improved immensely over the past three months. This provides a revenue bridge for banks wanting to improve 2022 NIM but not eager to take on interest rate risk. For example, the 3yr Treasury has risen to almost 1.00%. In fact, it is where the 15yr Treasury bond yield was one year ago.

Many agency-backed bonds yield 1.25% to 1.50% for 3-year durations. This short-term bonds yield improvement is giving bankers one of the quickest improvements to NIM, and because Agency and Treasury bonds are so liquid, they can be sold if there is a run on deposits or loan growth picked up. We highlighted a before and after scenario in the table above to highlight the opportunity.

On the left, we can see a bank with 12% cash to assets and a yield on earning assets of 3.76% (current average in KY). On the right, we took the same position but shifted the cash back to 6% and invested 6% in bonds between 1-5 years with a yield of 1.50%.

With COFs at 0.37% (current average in KY), we can see that it immediately improves NIM from 3.39% to 3.48%. An immediate increase of almost 10bps to NIM is relatively substantial for not taking on much interest rate risk in the current environment.

Duncan-Williams, Inc. (DWI) is a wholly owned subsidiary of South State Bank, N.A. (SSB). Broker-dealer services are offered through DWI, a registered broker-dealer (member FINRA/SIPC) and not by SSB. SSB is not registered as a broker-dealer. Securities and investment products are not insured by FDIC or any other government agency, not bank guaranteed, not bank deposits or obligations, and may lose value.

DISCLAIMER: Duncan-Williams, Inc. member FINRA/SIPC, does not accept time-sensitive, action-oriented messages such as transaction orders by email. The information contained in or attached to this email is based on sources we believe reliable but is not considered all-inclusive. Prices, quotes, rates, yields and any other information provided herein are subject to market conditions and/or prior sale, and are subject to change without notice. Opinions are our current opinions only and are subject to change without notice. Investments are not FDIC insured, not bank guaranteed and may lose value. NOTE: This email may contain PRIVILEGED and CONFIDENTIAL information and is intended only for the use of the specific individual(s) to whom it is addressed. Your receipt of this email is not intended to waive any applicable privilege. If you are not an intended recipient of this email, you are hereby notified that any unauthorized use, dissemination or copying of this email or the information contained in it or attached to it is strictly prohibited. If you have received this email in error, please delete it and immediately notify the person named above by telephone. Thank you.

KENTUCKY BANKER MAGAZINE | 13

COMPLIANCE CORNER

by Timothy A. Schenk KBA Assistant General Counsel tschenk@kybanks.com

Climate Change: The New Regulatory Risk A month ago, I led a compliance forum where I brought up the topic of climate change and what measures banks are taking to deal with climate change. One person immediately reacted, “What does climate change have to do with banks”? Surprising to some, the answer is a lot.

President Biden recently signed the Climate-Related Financial Risk Executive Order (Executive Order) that encourages banks and regulators to assess climate risks.

The executive order also tasked the Financial Stability Oversight Counsel to “assess, in a detailed and comprehensive manner, the climate-related financial risk” to the U.S. economy. That subsequent report “identified climate change as an emerging and increate threat to U.S. financial stability.”

The report also recommended member agencies: • Assess climate-related financial risks to financial stability, including rough scenario analysis, and evaluate the need for new or revised regulations or supervisory guidance to account for climate-related financial risks; • Enhance climate-related disclosures to give investors and market participants the information they need to make informed decisions, which will also help regulators and financial institutions assess and manage climate-related risks; • Enhance actionable climate-related data to allow better risk measurement by regulators and in the private sector; and • Build capacity and expertise to ensure that climate-related financial risks are identified and managed.

Regulators are moving quickly in response.

Comptroller of the Currency Michael Hsu said, “I have prioritized the need to incorporate climate change into risk management frameworks to address the safety and soundness of the federal banking system” and plans to publish “high level” supervisory expectations by year end. The Office of the Comptroller of the Currency also hired a Climate Change Risk Officer to help “prudently manage climate risk as a safety and soundness concern.”

The Federal Reserve has taken similar steps. The Federal Reserve has created a “Supervision Climate Committee” to strengthen its “capacity to identify and assess financial risks from climate change and to develop an appropriate program to ensure the resilience” of its supervised institutions. Federal Reserve Board Governor Lael Brainard said the central bank will subject financial institutions to “scenario analysis” of their climate related risks.

Other federal regulators are expected to follow.

The Basel Committee on Banking Supervision quantifies the risks for the financial services industry as: physical risk consisting of direct loss of structures from storms etc.; and transition risk, which is the risk to the process of adjustment towards a low-carbon economy.

So how can banks mitigate these risks? Banks across the country are turning to several areas to mitigate these risks.

Community Reinvestment Act The Federal Reserve of San Francisco issued a white paper titled Climate Change and the Community Reinvestment Act. The white paper stated that “Low-to-moderate income (LMI) populations are highly vulnerable” to climate change “because they have fewer resources to adapt.” Banks are considering how climate change can impact their Community Reinvestment Act loans in LMI tracts and conducting cost-benefit analysis to determine whether climate related improvements should be included for the longevity of the project and to better serve the community.

Fair Lending Fair lending is a leading priority for all of the federal banking agencies. The Executive Order affirms this priority by stating that climate change has a “disparate impact on minority communities” because they lack the savings available to pay for added expenses that makes banks generally inclined not to lend in these areas. As banks begin to modify their credit policies for climate change, they need to make sure there is no discrimination against an individual because of climate-related sensitivities, that they are not putting borrowers in loans they cannot afford in either the long or short term due to climate sensitivities, and that they uniformly underwrite mortgage loans to account for these added expenses. continued on the next page

KENTUCKY BANKER MAGAZINE | 15

CLIMATE CHANGE

continued from previous page

Flood Insurance Flood-related fines have remained at the forefront of all enforcement actions across all banking agencies. Special Flood Hazard maps are changing quickly and banks must continually update their mapping to address flood risk. Utilizing flood vendors or services that maintain current maps and plotting will be critical to avoid costly fines.

While climate change is a new area of compliance that is just developing, banks must begin to plan for climate-related regulatory changes.

Compliance officers and other risk management employees should assess every area that climate change could impact their institution from a credit and operational perspective. Those with adopted plans will not only mitigate risk of loss in various forms, but will also be better prepared for examination by addressing these risks.

Additionally, banks should consider flood insurance cost as part of its underwriting analysis to determine if a borrower can pay for flood insurance during the life of the loan.

Appraisals Most bankers are familiar with traditional real estate appraisals. However, banks must ensure that appraisers adequately address climate change vulnerabilities into property valuation analysis to ensure they are properly collateralized.

Smart decisions today.

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Visit www.crowe.com/disclosure for more information about Crowe LLP, its subsidiaries, and Crowe Global. © 2021 Crowe LLP. 16 | KENTUCKY BANKER MAGAZINE

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EDUCATION CALENDAR OF PROGRAMS | 2022 JANUARY DATE/S 26

PROGRAM Internal Audit Seminar

LOCATION Louisville

PROGRAM Flood Compliance Seminar Loan Assistants & Loan Processors Seminar Training the Credit Analyst Seminar Loan Review Seminar

LOCATION Louisville Louisville Louisville Louisville

DATE/S PROGRAM 8, 9 & 10 Banking Law Conference Series 17 Credit Conference 21-25 Regulatory Compliance School 24 Tax Return Analysis Seminar 30-31 Consumer & Commercial Loan Doc Seminar

LOCATION Virtual Louisville Louisville Louisville Louisville

FEBRUARY DATE/S 2 8 9-10 11

MARCH

APRIL DATE/S PROGRAM 24-26 Spring Conference

LOCATION French Lick

MAY DATE/S PROGRAM 9-12 Consumer Lending School 11 FDIC Directors College 12 FDIC Directors College TBD CFO Forum

Natalie Kaelin, Director of Education nkaelin@kybanks.com

LOCATION Louisville Bowling Green Lexington Louisville

kybanks.com/education

EDUCATION CALENDAR OF PROGRAMS | 2022 JUNE DATE/S 9 15 16 22 24 Jun 27-Jul 1

PROGRAM Human Resources Seminar Marketing Seminar Security Seminar Regulators Forum Regulators Forum General Banking School

LOCATION Louisville Louisville Louisville Bowling Green Lexington Lexington

PROGRAM Cash Flow Seminar

LOCATION Louisville

PROGRAM Women in Banking Conference

LOCATION Louisville

JULY DATE/S TBD

AUGUST DATE/S TBD

SEPTEMBER DATE/S PROGRAM 12-16 Commercial Lending School TBD IRA Essentials Seminar TBD IRA Advanced Seminar

LOCATION Louisville Louisville Louisville

OCTOBER DATE/S PROGRAM TBD Banking Innovation Conference with EKU TBD Internal Audit Seminar

LOCATION Richmond Louisville

DECEMBER DATE/S 5-9

PROGRAM Foundations of Banking School

Natalie Kaelin, Director of Education nkaelin@kybanks.com

LOCATION Louisville

kybanks.com/education

BEST SECURITY PRACTICES

Do you need Multi Factor Authentication?

Many cyber insurance carriers are now requiring insured banks to implement Multi Factor Authentication (MFA) to qualify for a cyber-liability policy. If you have a cyber-insurance policy, implementing MFA may need to be a priority in 2022.

MFA is an authentication method that requires users within your organization to provide two or more credentials in order to gain access to an account, application, or VPN. Usernames and complex passwords are no longer considered secure enough to protect your accounts.

Usernames and passwords can be the weakest link in a bank’s cyber security strategy. Even if you follow a password policy there is a significant risk of usernames and passwords being compromised.

Passwords become less secure as users need passwords for more accounts and use the same passwords repeatedly or use passwords that are easy to guess. While usernames and passwords will still have a place in our day-to-day lives, passwords are vulnerable to brute force attacks and can be stolen by third parties.

MFA requires one or more additional verification factor that is unique to the individual. Implementing MFA will serve to decrease the probability of a cyber-attack. Requiring users within your organization to provide two or more verification factors to gain access to a resource such as an application, online account, or a VPN can increase confidence that your bank will stay safe from cyber criminals.

Additional credentials may include: • Things you know: a personal pin or one time passcode from text or email • Things you have: a cell phone with an authenticator app or a badge • Things you are: biometric information such as fingerprints or facial recognition Research shows password compromises have accounted for over 80% of data breaches in recent years.

Rather than asking for a single password that hackers can gain access to, MFA adds an additional layer of security and helps protect against data breaches.

FOR MORE INFORMATION CONTACT | Selina Parrish Director of Membership sparrish@kybanks.com

It is recommended that organizations secure any remote access points to their systems or data with Multi Factor Authentication. When possible, internal usage of privileged accounts such as administrators should also be secured.

If you are looking for hands-on help with MFA implementation or have questions about how to implement new security practices contact Box Lake for a free consultation and find the right solution to meet your needs.

Box Lake Networks is locally owned and operated in Winchester, Kentucky and endorsed by the KBA for IT Managed Services. For more information on Box Lake Networks, contact Selina Parrish at the KBA sparrish@kybanks.com

Testimonial

“1st Trust has worked with Box Lake since 2019. They’ve established an in-depth knowledge of our network, provided new topology diagrams, and assisted in updating our servers and switches. Our assigned director and engineer attend our ITSC meetings so to insure we’re adhering to our IT Policies and Procedures, and they provide comprehensive monthly reviews of our Cybersecurity reports. In addition, they provide needed IT audit/exam documents and answers we need. Their help-desk support are phenomenal communicators! Box Lake has helped the Bank with strategic planning, and are great partners to work with on day-to-day operations. Most astoundingly, during the Pandemic Box Lake established VPN connections for 20 of our staff members with just a 2-day notice, allowing business to continue with half our staff at home without missing a beat. I would definitely recommend Box Lake to any bank looking for an MSP partner, they know IT and banking, making the difference in the service provided!”

Brandyn Winkler, IT Manager, Vice President, 1st Trust Bank, Inc., Richmond

20 | KENTUCKY BANKER MAGAZINE

High-quality borrowers on-demand.

FICO:* 736 Income:* $279,000 Average 2021 BHG borrower:

AVG Loan Size: $113,900 Years in Industry:* 20 DSCR:* 2.5

TO LEARN MORE ABOUT BHG, PLEASE CONTACT: Jordyn Sollars, VP, Institutional Relationships JordynSollars@em.bhgbanks.com • (954) 807-2958 BHGLoanHub.com/KY

*weighted average

go to kybanks.com/video to listen

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If you would like to meet with us in person or virtually, feel free to email us.

To receive our REGIONAL BANKING STATS REPORT, please email us.

Boenning & Scattergood, Inc. is a trusted advisor and partner to the region’s community banks. www.boenninginc.com • Member FINRA / SIPC

my.infotex.com

Resolution in Memoriam to honor the life and service of Mr. Pete Mahurin WHEREAS The Board of Directors of FNB Bank, Inc. (BANK) was greatly saddened by the passing of Mr. Pete Mahurin on October 27, 2021 WHEREAS The Bank wishes to recognize and honor him for his years of invaluable service to our institution as a member of the Board of Directors and as President of our holding company, Jackson Financial Corp.

WHEREAS Mr. Mahurin served as a director and advisor for 15 years to the Bank. He was dedicated to his position and shared his extensive knowledge of the industry along with his keen wit, calm demeanor, and wise counsel.

WHEREAS Mr. Mahurin was a graduate of Western Kentucky University and was a loyal supporter and benefactor of the university. The WKU honors college was dedicated as the Mahurin Honors College in 2017 due to his continued generous support of the university. He served as a Financial Advisor for Baird Private Wealth Management and had served as a financial advisor with Baird, formerly Hilliard Lyons, since 1968. He also served on the board of directors for the Tennessee Valley Authority, Houchens Industries, Gray Construction, and other bank boards of which he was associated.

WHEREAS Mr. Mahurin made lasting contributions to the Bank through his leadership that served as the foundation for continued growth, stability, and success for our bank.

BE IT RESOLVED, the Board of Directors of FNB Bank wish to express our deep appreciation and gratitude to Mr. Pete Mahurin and express our most heartfelt condolences to his family and colleagues.

BE IT FURTHER RESOLVED that this resolution shall be entered into the permanent minutes of FNB Bank, this 17th day of November 2021 and shall further be delivered to the family of Pete Mahurin and the Kentucky Bankers Association for publication in the Kentucky Banker.

Adopted this 17th day of November 2021 at the regular Board meeting of FNB Bank, Inc.

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AD DEADLINE January 18 March 16 May 25 July 20 September 7 November 2

ARRIVES February April June August October December

TO PURCHASE AN AD CONTACT Nina Gottes, Sponsorship & Business Development ngottes@kybanks.com SPECIFICATION QUESTIONS Josh Fischer, Managing Editor jfischer@kybanks.com

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Jonathan Welty Executive Vice President 614.561.9356 JWelty@occh.org

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88 East Broad Street, Suite 1800 Columbus, Ohio 43215 614.224.8446 | www.occh.org

THANK YOU THANK YOU THANK YOU For Contributing to the Kentucky Bankers Relief Fund

KBA ASSOCIATE MEMBERS CSI FHLB Cincinnati K4 Architecture (Jeffry Klump) Morgan Pottinger McGarvey KraftCPAs ProBank Austin (Vincent Van Nevel) TrustMAPP (The Holman Living Trust Marcy Holman) Black Knight (Jeff Sykes) Boenning & Scattergood, Inc. (Charles Crowley) MCM CPAs & Advisors (Henry Hawkins) Stifel Financial (Paul Ratterman) Jackson Kelly (Mark Mangano) BKD, LLP (Christopher Meriwether) TIB (Paul Taylor) Titan Armored (Jason Buckley) Shazam (Robert Buchanan) Jack Henry NewCleus KBA ENDORSED VENDORS Banc Card of America, Inc. (Trey Denny) BHG Bank Group (Jordyn Sollars) Profit Resources Inc. NContracts Investors Title Insurance (Norma Carroll) Banc Consulting Partners (Haines Consulting Group) Banc Consulting Partners (Moore Financial Group) Floodplain Consultants (Craig Callahan) Title Center of Greater Kentucky Promontory Mortgage Path (Paul Katz) CRA Partners (David Lenoir) STATE BANK ASOCIATIONS American Bankers Association Massachusetts Bankers Association North Carolina Bankers Association Missouri Bankers Foundation Ohio Bankers League (Paul & Laurie Reed) New Jersey Community Bankers North Dakota Bankers Association South Carolina Bankers Association West Virginia Bankers Association Products & Services Texas Bankers Foundation Kansas Bankers Association, KBA Insurance Iowa Bankers Insurance & Services Michigan Bankers Association Nebraska Bankers Association Virginia Bankers Association Alabama Bankers Association Colorado Bankers Bank Minnesota Bankers Association Washington Bankers Association (Glen Simecek) Florida Bankers Association (Lesley Jordan) Indiana Bankers Bank Utah Bankers Association Oregon Bankers Association (Linda Navarro) Delaware Bankers Association (Sarah Long) Mississippi Bankers Association New Mexico Bankers Association

Louisiana Bankers Assoc (Ginger Laurent) Wisconsin Bankers Association (Rose Oswald Poels) Alaska Bankers Association (Yuri Morgan) Hawaii Bankers Association BANKS People’s Bank, Marietta Stock Yards Bank & Trust Heritage Bank First National Bankers Bank First Financial Bank, Ohio Banterra Bank, Marion IL German American Bank Hearthside Bank WesBanco Towne Bank, Portsmouth, VA Peoples Bank of Commerce, Medford, OR Citizens Bank & Trust Co. of Jackson Park National Bank, Newark, OH Central Bancshares Citizens Union Bank Commonwealth Bank & Trust Co. Cumberland Security Bank First & Peoples Bank & Trust Co Farmers National Bank Danville German American Bank Sound Community Bank Citizens Bank of Kentucky Peoples Exchange Bank Rondout Savings Bank, NY Community Trust Bank Putnam County Bank F&M Bank First Federal Savings Bank of Kentucky First National Bank of Le Center, MN The Farmers Bank, Portland, TN F&M Bank (J. Steven Fisher) First National Bank - Stanton, TX First State Bank of the Southeast First Federal S&L of Hazard Bank Forward Farmers State Bank, KS First Citizens State Bank, WI Patriot Bank Providence Bank - Rocky Mount, NC Texas Heritage Bank First National Bank (Carrolton) Caldwell Bank Caldwell Holding Company Caldwell Bank & Trust Citizens Progressive Bank Progressive National Bank First Natl Bankers Bank Baton Rouge, LA First National Bank of Carrollton HomeTrust Bank NC (Elizabeth Bridgers) Central Bancshares Peoples Bank & Trust Co. Queenstown Bank of Maryland Gate City Bank South Central Bancshares of KY (William Bale)

Southern Independent Bank Martinsville First, Martinsville, VA Queensgorough National Bank & Trust Co. Providence Bank, Rocky Mount, NC Durden Banking Company First National Bank, Moody, TX Bank of New Hampshire First Bank, Strasburg, VA City National Bank of WV Flatwater Bank & Employees First Community Bank Altamaha First Bank - Sterling, KS South Georgia Banking Company The Claxton Bank The State National Bank - Groom, TX United Community Bank - Perham, MN Carrollton Federal Bank Farmers & Traders Bank of Campton (Shawn Garrison) First Horizon (David Myers) Point Bank (Elizabeth Handsaker) Select Bank (Lynn Johnson) Citizens National Bank of Quitman Commonwealth Bank & Trust Co. (John Key) Springfield State Bank (Robbie Pollin) Summit County Bank, WV Bank of Maysville The Bank of Soperton Peoples Exchange Bank (Claude E. Bentley) The First Bank & Trust Company of Murphysboro Owingsville Banking Company (Thomas Richards) Shamrock Bank, Oklahoma City, OK Bank of Wrightsville Employees - Wrightsville, GA First National Bank of Livingston, TX Hometown Bank LincolnWay Community Bank, New Lenox, IL First American B&T (Rhodes McLanahan) Monticello Banking Company (Becky Dolen) Bank of Cadiz & Trust Co. AB&T City National Bank of WV (Tim Quinlan) Classic Bank - Cameron, TX Federal Reserve Bank of St. Louis (Allen North) Commercial West Liberty (Hank Allen) Security Bank & Trust Monticello Banking Company (Regina Brinson) Minnesota National Bank Lovelady State Bank Pleasants County Bank The Geo. D. Warthen Bank, Sandersville, GA Bank of the Bluegrass & Trust Co. Northeast Georgia Bank, Lavonia, GA First National Bank of Kentucky (H. Lytle Thomas) GB Bank Group, Glennville GA F&C Bank, Holden, MO FM Bank, Breaux Bridge, LA Peoples Bank & Trust Company (Michael Officer) PNC (John (Jack) Omalley) Central Bank (Alden Egg) Belmont Savings Bank (John Yount)

THANK YOU THANK YOU THANK YOU BANKS continued McLean Bank Holding Co. Commercial Bank of Grayson (Samual Perry) Bank of O’Fallon (Barbara Carstens) Central Bank (Timothy Duncan) Coastal Bank & Trust (Renee Rhodes) First Federal S&L Association First Mutual Bank - Belpre, OH Truist (John Hardage) West Texas State Bank (Mr. & Mrs. Darryl Calley) Farmers National Bank of Danville (Brandon Drake) First National Bank of Grayson (Charles McGuire) Monticello Banking Company (Jerry Claunch) Providence Bank (David Keul) Poco Valley Bank (Sherry Evans) Providence Bank - David Keul Tri-County Bank - Mike Boushelle Lifestore Bank (Ruth Johnson) Warren Boynton State Bank, New Berlin, IL Peoples Bank, Mendenhall, MS (Patricia Loftin) Citizens Union Bank (Shae Payne) Park National Bank (Alec Taylor) Peoples Bank North Carolina (Krissy Price) Peoples Bank of Kentucky (Dina Gooding) South Central Bank (Amy Bennett) Surrey Bank & Trust (Sam Sanders) Central Bank & Trust (Paul Thornsberry) Monticello Banking Company (Cynthia Watson) Southern Bank (Walter Newton) Commonwealth B&T (Amber Mann) Central Bank Citizens National Bank Someset Windsor Federal, Windsor, CT Traditional Bank Citizens National Bank (David Michael) INDIVIDUALS Michael Boettcher Michael Ackerson Douglas Johnson W. Morris Fine (Investors Title Insurance Co) Rick Clayburgh Arthur Scutro Kevin Cashen Lee Scheben (Heritage Bank) Michael Adelman (Ohio Bankers League) J.R. & Ann David, Sr. Barbara Wright D. Alex Cook (Hearthside Bank) Christy Carpenter (Springfield State Bank) Tracey Smith (Springfield State Bank) Beverly Benedict (Springfield State Bank) John Wilson, Jr. Joseph Witt (Minnesota Bankers Association) Carla Kohmetscher W.E. Love, IV

Selina Parrish (Kentucky Bankers Association) John D. Moore (Hearthside Bank) Bill Zumvorde (Profit Resources Inc.) John David King (Hometown Bank of Corbin) James Stewart Jeffrey Deuel Patrick Reetz Regina Brinson (Monticello Banking Company) Heather Tomlinson (American Bankers Association) Tim & Deidre Barnes (Hometown Bank of Corbin) Joseph Nemetz Garry Henson, Jr. (Hearthside Bank) Eleshia Brandon Gary & Pauline Crane James Peak (United Community Bank) Heather Wyson (American Bankers Association) Jonathan Strauss (Home Trust Bank) Tammy Belcher William Vanderzant David Long (Hearthside Bank) Brenda Rayleen Evans Alexander Crawford Amada Alvidrez Caric Martin Catherine Mummert Sonya Grove (Hometown Bank of Corbin) Grace Sampson Kelly Cochran Sue Schmiedeler Michael Falco Jerry Claunch (Monticello Banking Company) Julie Harris Near Okabayashi (Hawaii Bankers Association) Kenneth Clayton (American Bankers Association Brad Witt (WVA Bankers Association) Loren Allen (WVA Bankers Association) Sara Cline (WVA Bankers Association) Matthew Brown William Docking Charles Sword Rafael DeLeon (NContracts) William Newman (Hearthside Bank Laura Cook (Hearthside Bank) J. Michael Smithers (Hearthside Bank) Joy Gaetano James Huddleston (Hearthside Bank) Robert Fobes (Shamrock Bank, Oklahoma City) Guy Sims (Shamrock Bank, Oklahoma Chris Tubbs (Shamrock Bank, Oklahoma City) Jackie Jernigan (CSI Customer) Karen Wolf Anna Clayton (Central Bank) Linda Jackson (Hometown Bank of Corbin) Sally Horn Michael Bruschini Daniel Jacobs

Deborah McLamb Deleigh Brooks Denise Howerton Donald Quintana Hilary Wilson John Anthony Mary Albrecht Robert Ladd Shelley Bentley Stephanie Hunter Martha Haymaker Sam Sanders Allison Boyd (WVA Bankers Association) Neila Ecker Christen Legleu (RSM) Steve Nielsen (WesBanco) Paul Strain Michael Williams (Hearthside Bank) Darryl Thornton (Hearthside Bank) Rebecca Medley (WesBanco R.A. Lemon (Putnam County Bank) Shane LaCombe Shannon Burke (ABA) Lisa Brandt Jocelyn Carby (Texas Bankers Association) Christopher Clemmons Gail Rasmussen John Trader (NContracts) Matt Vance (Kentucky Bankers Association) Josh Fischer (Kentucky Bankers Association) Christopher Ratte Ronda Gilliam (Hearthside Bank) Billy Joe Hensley (Hearthside Bank) Cindy Morris (Hearthside Bank) Mary Macaluso (Hearthside Bank) Stephanie Mills (Hearthside Bank) Matthew Eilers (Central Bank) Michael Fender Katie Rajchel (Kentucky Bankers Association) OTHER Graduate School of Banking, Louisiana State University COCC (Jason Tyler) Nelson Mullins Riley & Scarborough, Columbia, SC COMMUNITY CAPITAL TECHNOLOGY INC. The Wells Foundation Centrant Community Capital (David Bennett) Reliance Standard (Allen Sanders) Topeka Community Foundation NY Mets (Jay Horwitz) Shalepro Energy Services Freddy Simon & Associates FDIC (Dan Marcotte) Santora CPA Group (William Santora) *List of donors as of 12/31/2021

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