Ohio Bankers League 2011 Magazine by Jeff Vanik

winter

2011 issue

The Official Magazine of the Ohio Bankers League

2.0

A New Model for Educating Children and Young Adults in Personal Finance

INSIDE THIS ISSUE

THE UTICA SHALE DRILLING BOOM AND OHIO’S COMMUNITY BANKS BANK TO THE FUTURE – THE OBL ANNUAL MEETING IN PICTURES

BOOSTING YOUR BOTTOM LINE SPECIAL PULL-OUT SECTION

Consultants to the Financial Industry

Y o u n g & As s o c i a t e s , I n c .

Information Technology Services IT Risk Assessments and Audits Network Vulnerability and Penetration Testing Social Engineering Tests Information Security Program Development Business Continuity Plan Development

Ohio Record fall 2011

winter

2011 issue

Contents A Comprehensive Resource for the Ohio Banking Industry

Other News

Features

4 Chairman’s Corner

6 Random Thoughts

34 Steps of the Statehouse

42 The Banker’s Calendar 45 Around the Industry

8 Bank to the Future - the OBL Annual Meeting

In Pictures

10 The Essence of Leadership 12 Financial Literacy 2.0

A New Model for Educating Children and Young Adults in Personal Finance

15 OBL Health Trust Hires Fortune 100 Claims

Administrator to Increase Benefits, Reduce Costs for Banks

16 The Utica Shale Drilling Boom and Ohio’s Community Banks

19 Boosting Your Bottom Line

Increase Quality and Reduce Costs to Power Your Bank into 2012

31 Community Banks and Compliance with FINRA Rule 6490

36 Ohio Banking: Strength in Our Diversity 38 Creating Value Through Enterprise Risk Management

40 Update from the Next Generation

Ohio Record

winter 2011 issue winter 2011 Ohio Record

chairman’s corner The Strength of a United Industry This will be my final column, as my term as chair of this great organization comes to a close. There have been many highlights – too many to count – but the most rewarding thing about moving through the chairs has been intangible. Back in the 1990s, before I became an active member of the OBL I was just a community banker. In 1994, when I became involved in the association I looked at it simply as a way to catch up with old friends, maybe save some money through the service corporation, but that was about it. Oh, how much more it turned out to be. From being just a plain old member, to second vice chair, first vice chair and now chairman, I have gone from being Paul Reed, Community Banker to being an advocate for the whole Ohio banking industry. In the process, I learned that our industry can only survive if we as bankers pull together through our trade association. Take Dodd-Frank for example. The OBL, through its federal government relations experts Mike Van Buskirk and Jeff Quayle, looked at the bill as a whole. Not just a few sections but the whole thing. I mean that literally.

Cover-to-cover These guys are the only people I know of in the whole country who have read the bill cover-to-cover. All 2,319 pages of it! It soon became obvious that there was some good stuff in there. But not enough good stuff. If you take the bill as a whole, about one third is good and one third is bad. The remaining third? It’s terrible. Others, including some trade associations, said the good third, the one that includes lower FDIC premiums, meant the bill represented a victory for the industry. They even said it meant the whole industry was behind it. I called baloney. The cost and expense of complying with and adapting to the changes Dodd-

Ohio Record winter 2011

Frank will vent on our industry, will far outweigh any benefits. Heck, most of us are going to have to employ new compliance officers because of it. If you’re a community bank that only employs seven people in the first place, what is that going to do to your bottom line? Will it mean your bank remains viable at all? Prior to Dodd-Frank, the majority of banks in Ohio and our counterparts around the nation were planning their future. Now, they are questioning their survival. Yes, we got lower FDIC premiums. But we also got a deposit insurance fund without a cap. How much longer are our currently high premiums going to extend into the future without the protection of this cap? No one knows. Our “bargain” also gained us a multitude of new rules and regulation and a new rule writer for all, including community banks – the Consumer Financial Protection Bureau. Remember, this agency does not have the usual oversight or budget controls that are usually in place in federal agencies. Worthwhile? It’s not even close.

Damage Rest assured, the OBL fought very strongly for the good third of the bill. But it was smart enough to see that on balance, this piece of legislation had the potential to severely damage, maybe even kill, our industry. That was the message I delivered to the U.S. Senate when I testified against the bill back in April. The fact that I was even asked to testify at all is testament to the strength of your association. I was joined by speakers from the ABA and the ICBA, but no other state associations were invited. I mentioned Mike Van Buskirk and Jeff Quayle earlier in this column. If you add Mike Adelman into the mix, who keeps things nailed down at the Statehouse, we have more than 100 years of collective government relations experience working for us every day. That speaks volumes

Paul Reed, President and CEO of Farmers Bank and Savings Company, Pomeroy

to the people who matter in D.C. and in Columbus. The people who set the rules we work by every day. That collective knowledge meant that the OBL – and by extension me – was better prepared to talk about Dodd-Frank than anyone else in the country. Our elected officials know that, and that’s why we were asked.

Investment Those of you who weren’t in a food coma during my after-lunch remarks at this year’s Annual Meeting would have heard me say something that I believe critical. We need to view the dues we pay to the OBL as an investment, not as an expense. Your dues dollars work in a variety of tangible and intangible ways, many of which are detailed in this magazine. I challenge you over the next year, to make those dollars work in ways that may never be read on the pages of this publication. Enroll someone at your bank in The Bank Leadership Institute – returning in 2012 – and see what a difference it makes. Nearly every OBL member that has enrolled a student in BLI, has found the experience so beneficial that it has sent several more. Look at the seminars and conferences, more than one a week. Need something that isn’t listed? Call the OBL and ask Susan (Poling) or Julie (Kiplinger) to build a high quality course for you. Explore the products and services that OBL BankServices provides – you can read about them in a special pull-out section elsewhere in this edition – one of them could save your institution thousands of dollars or add significant non-interest revenue to your bottom line. Check out the OBL’s health insurance co-op, the Ohio Bankers Benefits Trust, or its multi-bank owned dealer broker, Infinex. I talk from experience; we take advantage of both at my bank. CONTINUED ON NEXT PAGE

CONTINUED FROM PREVIOUS PAGE

Look to the OBL as a partner to help you solve emerging problems. Anything you could do better working cooperatively with other OBL members is fair game.

Appreciation 4249 Easton Way, Suite 150 Columbus, Ohio 43219-6170 Fax (614) 340-7596 James Thurston, Editor Susan Poling, Features Association Staff

I have great appreciation for every chairman who has served this great organization before me and for every OBL board member who has donated his or her valuable time to make us stronger. I also have a new appreciation for the professional staff at the OBL who give their blood, sweat and tears to make our lives as bankers easier every day. As I pass the gavel on to Court Haning (Peoples National Bank of New Lexington president, chairman and CEO), I am not only passing it to a friend but to a great community banker. The association will be in capable hands in 2012. Thanks for a great 2011 and best wishes for the new year.

Michael Adelman Vice President of State Government Relations madelman@ohiobankersleague.com | (614) 340-7616

OBL Member to Chair Prestigious Fed Council

Brenda Arnold, Administrative Assistant OBL BankServices barnold@ohiobankersleague.com | (614) 340-7620 Mike Baker, VP & Executive Director, OBL BankServices mbaker@ohiobankersleague.com | (614) 340-7600 Dan Conklin, Registrar dconklin@ohiobankersleague.com | (614) 340-7607 Michelle Crume, Vice President & Regional Director OBL/Infinex Partnership mcrume@ohiobankersleague.com | (614) 340-7622 Carol Halkias, Accounting Manager chalkias@ohiobankersleague.com | (614) 340-7604 Alan Haskell, Compliance Consultant ahaskell@ohiobankersleague.com | (440) 552-8918 Erin Husslein, Administrator Ohio Bankers Benefits Trust ehusslein@ohiobankersleague.com | (614) 340-7617 Julie Kiplinger, Manager of Professional Seminars & In-Bank Training jkiplinger@ohiobankersleague.com | (614) 340-7612 Sue Leppert, Administrative Assistant sleppert@ohiobankersleague.com | (614) 340-7602 Lynn Moore, Accounting Coordinator, Compliance Coordinator, OBL Compliance Services lmoore@ohiobankersleague.com | (614) 340-7618 Susan Poling, Education Manager spoling@ohiobankersleague.com | (614) 340-7611 Jeff Quayle, SVP & General Counsel jquayle@ohiobankersleague.com | (614) 340-7603 Joe Rosato, Government Relations Coordinator jrosato@ohiobankersleague.com | (614) 340-7605 Bill Showalter, OBL Compliance Services wshowalter@ohiobankersleague.com | (614) 340-7623 Gary Sutter, Employee Benefits Manager, OBL BankServices gsutter@ohiobankersleague.com | (614) 340-7615 James Thurston, Communications Manager jthurston@ohiobankersleague.com | (614) 340-7620 Mike Van Buskirk, President & CEO mvanbuskirk@ohiobankersleague.com (614) 340-7601 Melea Wachtman, Senior Vice President of Administration mwachtman@ohiobankersleague.com (614) 340-7606 The Ohio Record is published quarterly by OBL BankServices. Member subscriptions may be purchased for $25 per year; Non-member subscriptions may be purchased for $50 per year. POSTMASTER: Send address changes to Ohio Record at the address listed above.

BY JAMES THURSTON, EDITOR

Howard Boyle, president and chief executive officer of Home Savings Bank in Kent was recently named 2012 president of the Federal Reserve’s Community Depository Institutions Advisory Council. The CDIAC advises the Fed Board on the economy, lending conditions, and other issues. The OBL mobilized the Cleveland Fed as well as the Ohio congressional delegate to push for Boyle’s appointment. Boyle told Ohio Record, “This is a tremendous opportunity to talk about what’s going on this year in my backyard in the Cleveland Fed district. Sitting across the table from Ben Bernanke and discussing how regulations are applied will be very interesting indeed.” Members are selected from representatives of banks, thrifts, and credit unions serving on local advisory councils at the twelve Federal Reserve Banks. One member of each of the Reserve Bank councils serves on the CDIAC, which meets twice a year with the Fed Board in Washington. Home Savings Bank has been serving Portage County’s banking needs since 1898 and is a full service bank offering a broad range of checking and savings accounts, certificates of deposit, mortgage, consumer and commercial loans, IRA’s, credit cards, as well as convenient ATMs and debit cards. Branches are located in Kent, Ravenna, and Brimfield with a drive-thru facility on North Water Street in Kent.

Find Us on the Web Go to www.ohiobankersleague.com to catch up with the latest news as it happens in the Ohio banking community. View our calendar of events; get involved in online political grassroots campaigns; find a product or service; browse our banking news section; or enroll in the latest in banker education programs. It’s all there. winter 2011 Ohio Record

random thoughts Media Misses Point When it Comes to Lending I admit it. I am a junkie. I have been addicted to news for my reading life. Our new age of electronic communication has made it even worse. Thanks to my trusty Kindle, I can read multiple newspapers wherever I am. This has come at some personal cost to my health. In days past, my ulcer was primarily twisted by the local newspaper boy who often awoke after I’d already left for work. Today, I get my papers on time but my ulcer is worse. I now have access to a greatly expanded array of incompetent journalists. As part of my news addiction, I used to make an annual financial contribution to National Public Radio. I don’t any more. There were multiple causes to this withdrawal of charity including increasingly self indulgent editors, but the end came when I heard an interview with a woman in San Francisco who was abandoning a small co-op. California’s housing bubble had burst. Her home was now worth less than she paid for it so, even though she was able to make the monthly payments, she was walking away from her mortgage. That she thought this was a moral action bothered me. What bothered me much more, was the NPR reporter clearly thought and said so too. Since I am a glutton for self inflicted pain, I was listening to NPR again recently. Zachary Goldfarb, a reporter from the Washington Post (one of the newspapers I read daily), was interviewed. I don’t want to go off on a tangent here but whatever happened to journalism where you interviewed newsmakers not other reporters? The focus of the interview was an article I had read that morning Mr. Goldfarb had written. Among its other themes, his article implied President Obama was intellectually dishonest because he “and his

Ohio Record winter 2011

reelection campaign has sought to harness public frustration with Wall Street after he had “…invested hundreds of billions of tax payer dollars in banks - low cost money that the firms used for high yielding investments in which they made big profits.” My subject here isn’t the President but rather Goldfarb’s demonization of “banks”. While the article occasionally said he meant Wall Street, that distinction disappeared in his NPR appearance, aided by the interviewer, in which repeatedly used the term banks as a synonym for bad guys. Goldfarb wrote that Obama should have “compelled banks to increase lending to consumers”. I’m not sure how you make a credit worthy person take a loan they don’t want. How many credit-worthy consumers have you turned down for loans recently (or ever)? Or was he suggesting you should be giving money to people not likely to pay it back. Goldfarb cited “some economists” as believing that “banks” should be compelled to reduce the principal on their outstanding mortgages. When asked in his interview what else President Obama should have done - that was one of his suggestions. Not all of his references were anonymous. He quoted University of Michigan Professor Ran Duchin. Resisting the temptation to make a derogatory comment on the “School Up North”, let me simply repeat the quote. “If the goal (of government assistance to banks) was to support lending,” Duchin told Goldfarb, “it would have been sensible to require (emphasis added)” the banks to lend. Call me old-fashioned, but I actually thought a newspaper like The Washington Post would expect its reporters to have some basic grasp of economics. The problem with lending in Ohio isn’t supply. It is demand. The traumatized borrower (con-

Michael M. Van Buskirk President & CEO

sumer or business) so far is showing very little desire to take on additional debt in an uncertain economy. Equally disappointing, Mr. Goldfarb apparently skipped class the day they talked about moral hazard in his Econ 101 course. When there is a chance to keep a homeowner in his or her house, traditional banks will make that happen. But to suggest to homeowners that non-payment of their legal obligations can benefit them poses substantial risk to society. Setting aside the question of what legal basis there would be for Mr. Goldfarb’s suggestion, how many other consumers are like that woman in San Francisco? How many would stop making payments on their mortgages? Homeownership in this country is high because historically a home mortgage had been a relatively safe loan. Thus mortgages have been among the least expensive of loans. As we make home lending ever more risky we will inevitably make it more expensive. That will mean fewer Americans will be able to afford a home. That in turn means every American who owns a home today will see it drop even further in value as there are fewer buyers. Traditional banks didn’t cause the recession. They supported and continue to support a modernization of financial regulation which is comprehensive, fair, and efficient. Dodd Frank met none of those tests. It didn’t nail the bad guys and it will hamper the good guys as you try to help the communities you serve recover. Traditional banks are an essential tool to economic recovery. I know from daily conversation that you are ready and willing to lend. That is a reason for the American consumer and small business person to be more optimistic about the future with you as an ally. That should have been the story in The Washington Post and on NPR.

$2 BILLION in affordable housing

25,000 affordable units

YWCA of Hamilton Hamilton, Butler County

Meridian Greene Wintersville, Jefferson County

The Lakewood Phase II Toledo, Lucas County

450 developments and partnerships

Invest with us to meet your CRA needs

Cogswell Hall Cleveland, Cuyahoga County

Arthur Place Delaware, Ohio

Forest Square Senior Apartments Cincinnati, Hamilton County

For more information contact Hal Keller, President or Jonathan Welty, Vice President 614.224.8446

Edgewood Village Akron, Summit County

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

OCCH is an Endorsed Business Partner Jefferson Apartments Columbus, Franklin County

Trail West Apartments Newark, Licking County

winter 2011 Ohio Record

Lyons Place Dayton, Montgomery County

Meyer & Kerschner’s Gina Reuter talks with the Federal Reserve Bank of Alabama’s Bobby Pinson and the Federal Reserve Bank of Cleveland’s Frank Agnew

Blair Hillyer receives the BankPac Shining Star award from OBL Chairman Paul Reed

A packed breakout session hears from Dr Lyle Sussman

Record Crowd Goes “Bank to the Future” at OBL Annual Meeting

By James Thurston, Editor

More than 310 Ohio banking industry execs came to Columbus in November to hear how the latest technology developments and leadership trends will change the banking industry in Ohio at the OBL Annual Meeting. Keynote speaker Dr. Lyle Sussman of the University of Louisville told attendees, “Technology is not the answer, it is the question. The real point is how you use the technology available today by leveraging your people.” Bankers also heard from social media guru Eric Cook, a consultant with WSI, on how social media developments will change the way they do business. Cook told bankers social media was all about engaging the customers, not making a sale. “If you want to be successful in an online world,” he said, “You are going to have to give your staff full access to social media platforms. Everyone will own the message, not just your marketing staff.” The Peoples National Bank of New Lexington’s Court Haning was elected 2012 OBL chairman. In his acceptance remarks, he observed, “While this is the most challenging environment the OBL and Ohio banks have experienced in the last several years, I look forward to the challenges and will give my best efforts to overcoming them. It is crucial that we all work together in the coming months and remain proud to be bankers.” The First National Bank of Dennsion’s Blair Hillyer received the Ohio BankPac Shining Star award for his important contributions to the OBL’s government relations efforts. He urged all attendees to give at least $500 to the OBL’s political action committee, commenting, “The OBL will work long and hard in Columbus and D.C. on our behalf, but they can’t do it alone. They need our help; come to the D.C. Fly-in; give to the PAC. It will make a difference.” Multiple breakout sessions and the ever popular OBL BankServices Financial Services Expo rounded off the day’s events.

Ohio Record winter 2011

Thanks to Our Sponsors Keynote Sponsors: Banc Consulting Partners Crowe Horwath LLP

Gold Sponsors: Federal Home Loan Bank of Cincinnati Gardiner Allen DeRoberts Keefe, Bruyette & Woods, Inc.

Classic Sponsor: Young & Associates, Inc.

Another record breaking crowd helped make “Bank to the Future” a success

Bancvue’s Jessie Hogue demonstrates the innovative Kasasa platform to First National Bank of Pandora’s Todd Mason

Ohio Valley Bank’s Jeff Smith; Keynote speaker Dr Lyle Sussman; and Mechanics Savings Bank’s Deborah Schenk

Rockhold Brown & Company’s Bill Hubbard with LCNB’s Matt Layer and Steve Foster

Floodplains Consultants’ Mike Hines discusses the federal flood insurance program with American Savings Bank’s Jim Younkin

First Federal of Centerburg’s Terry Bumpus talks business with Fairfield Federal’s Judy Root

Former OBL Chairman Blair Hillyer wintercatches 2011 Ohioup Record 9 with former Ohio BankPac Chairman Tom Will

The Essence of

Recently, Mike Krzyzewski became the winningest coach in college basketball history and was asked to describe what he felt was the most important foundational element of his success. The Duke legend responded that it was trustworthiness. He has devoted a substantial portion of his coaching life to earning the trust of his players. To paraphrase him, to be an effective teacher or leader, one must be “allowed in.” And to be allowed in one must be deemed worthy of another’s trust. Once this threshold is crossed, results often become remarkable. Coach K did not mention tactical strategy or technique secrets. He talked about his relationship to his players. Leadership takes as many forms as there are individuals who lead, but there are common threads among those who seem to help generate consistently excellent results from their followers. Most of those threads involve relationship to others. Leadership is most powerful when it is of the spirit. Igniting and fueling the passion within followers to be their very best is achieved in an atmosphere of trust, respect, dignity, and shared purpose. Followership looks much different when it is in response to these motivators versus an atmosphere of depersonalization, fear, and blame. Benjamin Zander, conductor of the Boston Philharmonic Orchestra, likes to

Ohio Record winter 2011

say that the conductor, the most powerful musician in the orchestra, does not make a single sound. He relies entirely on his ability to make others powerful. This obvious yet profound observation provides a template for great leadership. “How do I make others powerful?” is the question to which all great leaders find answers. Fortunately, the answers to that question are fundamental. Unfortunately, they are not simple to execute. In a sense, they involve the very challenges we face within ourselves. How we show up in life is how we show up as leaders. The real work then is to examine ourselves and become fully aware of what is obvious to those around us but often is hidden from our own view: What is the impact of our actions on others? Coaches, orchestra conductors, bank executives… all leaders (in fact, all people) influence others every day. Some influence in ways that limit or suppress followers’ ability to contribute. Others, the good ones, stimulate and allow the strengths of others to be cultivated and applied to a common purpose. The not-so-simple, or at least not-soobviously-answered, challenge is, “How?” How do we help people bring their strengths to bear? How do we inspire rather than force compliance? How do we capture the spirit rather than just the body or mind? How do we create an atmosphere of possibility rather than limitation? And

George Paidas President, Embros and Faculty Leader, OBL Bank Leadership Institute

most importantly, how does my interaction with others impact them? Do I lift or do I burden others? Organizations or groups nearly always reflect the qualities of their leadership. If an organization is vibrant, creative, dynamic, responsive, successful and respected, it’s a pretty good bet that its leaders are too. And if the group or organization is something less, it likely still reflects something of its leadership. People – employees, peers, customers, constituents – nearly always respond as they are treated. Energy is said to attract like energy. A psychological term, reciprocity, has been shown to be one of the most reliable predictors of human behavior. A negative experience generally elicits negative responses; positive experience brings forth positive responses. Understanding this and what kind of energy we put forth is a good place starting point in assuring our actions align with our intentions, but there are actions which well-meaning leaders sometimes undertake (or fail to undertake) that send

unintentional negative signals to others. Our hierarchical language and terminology (“subordinates, superiors”), our reluctance to entrust others with meaningful work (delegation). Our often-divided attention or our inattention and the message that sends about someone’s importance. Our propensity to focus only on problems, looking for whom we need to blame, intolerance of any mistakes, failing to understand the validity of some expressions of resistance. Communicating only on a need-to-know basis…these and similar all-too-common practices are hardly the stuff of which trustworthiness and vibrant cultures are born. Great leadership is scarce, in part because it is counter-intuitive to relinquish aspects of control in high stakes matters, such as responsibility to shareholders for the profitability and health of a bank. It

can be frightening to let go. Yet success will inevitably be limited if a controlling culture of fear or over-regulation pervades. To understand this, bankers need only reflect on their own feelings about the impact of over-regulation and banks’ consequent inability to function optimally. Great leaders develop not just great followers; they develop great leaders. To become great leaders, followers must, obviously, be given the opportunity to lead. This requires those at the top to hold courage and belief in their people’s ability to step up. It is not without risk, but great leaders understand the potential of their people, know the limitations of command and control, have helped develop the strengths of their followers, and likely recall that they were once the beneficiaries of someone who believed in them.

BANK LEADERSHIP INSTITUTE RETURNS TO THE OBL Session 1: Thursday & Friday, Sept. 27 & 28, 2012 Session 2: Thursday & Friday, Nov. 29 & 30, 2012 Session 3: OBL Washington DC Fly-In - February/March Exact Dates TBD, 2013 Session 4: Thursday & Friday, April 25 & 26, 2013 Created by the Ohio Bankers League nearly 20 years ago to help mold high potential officers into high achievers, the OBL Bank Leadership Institute returns and is currently accepting students for the 2012-2013 program year. Under the direction of George Paidas, the program will generate leaders who will be better able to recognize and develop talent, build effective teams and get results for their institutions. Students will strengthen their own leadership abilities and their organizations’ success through enhanced leadership, organizational and performance skills. Who Should Attend This course is designed for middle and upper level management team members. Course Objectives While the program will be tailored to fit and meet the needs of the 2012-2013 class, the program seeks to stimulate a commitment to leadership values. The program strives to develop individual leadership skills and serves as an important catalyst for banker networking and association involvement. Specific goals include: • Develop leaders within their institution, their community and for the association. • Enhance personal and professional awareness and how that applies to their leadership role. • Create dynamic, innovative, and ethical leadership in banking. • Promote learning environments within healthy banking cultures to ensure excellence in customer service. Online registration is now available. Reserve a seat today as space will be limited for this program.

winter 2011 Ohio Record

LITERACY 2.0 A New Model for Educating Children and Young Adults in Personal Finance

James Thurston Editor

he need for technology-based financial education that truly engages the digital generation is one of the most important educational and social issues of our day. Year after year, hundreds of thousands of young adults across the country are graduating from high schools and colleges without the skills, training, or tools necessary to manage and navigate the myriad of financial decisions in front of them. Credit card bills, debt, saving, and investing are not top of mind for most high school students, yet the financial decisions they make today will have long-term effects on their lives. Poor financial awareness jeopardizes teens’ ability to succeed in today’s complex and competitive environment. In this economy, students nationwide are experiencing greater financial stress and a real need for preventive financial education. Financial illiteracy isn’t new, but the consequences are more severe than ever with bankruptcies, student loan defaults and credit card debt at an all-time high. High school seniors scored just 48 percent on a recent national financial literacy test conducted by the Jump$tart Coalition assessing students’ knowledge on credit, saving, banking, insurance and retirement. The survey also found that, • 32 percent of high school seniors use credit cards, but more than half of these students did not know that paying off a credit card more slowly will result in higher finance charges. • 83 percent of high school seniors did not know that stocks are likely to yield higher returns than savings bonds, savings accounts and checking accounts over the next 18 years.

Ohio Record winter 2011

• 60 percent of high school seniors did not know that they could lose their health insurance if their parents become unemployed. • 64 percent of high school seniors did not know that a house financed with a fixed-rate mortgage is a good hedge against a sudden increase in inflation.

FINANCIAL LITERACY LEADERS The EverFi platform has been received with enthusiasm from schools, students and families throughout the state and is a great way to connect banks with their local communities. Several OBL members, including The Hicksville Bank, the First National Bank of McConnelsville and PNC Bank have already signed up to enhance financial education by sponsoring schools in communities across Ohio.

• 52 percent of the high school students did not know that they could check their credit report for free once a year. To address these issues, the OBL has partnered with the nation’s leading financial education company, EverFi. The firm provides valuable content in areas such as financial literacy, student loan management, digital literacy and other key life skills for the 21st Century learner. Its award-winning, proprietary software-as-aservice platform is designed to provide a highly interactive experience for students and features the latest in technology and instructional design including rich media, 3D simulations, social networking and adaptive pathing. The EverFi curriculum teaches, assesses and ultimately certifies students in over 600 core financial topics. OBL members can sponsor local schools and private-label the program in local Ohio communities at a special discounted rate. EverFi and the OBL will work directly with banks to launch and private label the program. Through this funding model, the platforms are free to schools and budget neutral to states. They are underwritten by bank partners who buy licenses for the use of EverFi’s software and are able to customize the portal. This unique publicprivate partnership gives banks the opportunity to meet their social responsibility, marketing, regulatory or customer acquisition objectives in a way that serves the needs of students, families, schools and communities. Financial illiteracy in on the verge of reaching epidemic proportions, yet ironically, the American public tends to segment this and other social problems away from the issues that entrepreneurs typically go after. Whether it’s poverty, financial illiteracy, obesity or disease eradication, there is often a belief that non-profits or non-governmental organizations will be the ones to step in. The OBL and EverFi have a different

Making financial literacy fun – EverFi engages the digital generation

point of view. We believe there is a unique place for innovation and entrepreneurship in these social dilemmas. The private sector is ready and willing to help. More and more financial services companies are looking to incorporate financial education into their products to teach consumers about mortgages, credit cards, and other accounts. And since most public schools do not have the fiscal resources to fund financial literacy education, this system will also drive innovation in public schools. The company will be operating in over 3,000 K-12 schools and colleges in all 50 states this year. The program has been received with enthusiasm throughout the country from schools, legislators, families and students. EverFi partners have felt the same enthusiasm in leading their community in an important initiative to help produce a more informed, financiallyequipped generation of students and community members. By leveraging technology in innovative ways in the classroom, EverFi platforms are educating children and teens on critical concepts that they will carry throughout their lives.

In addition to fostering and maintaining these valuable relationships, the program serves to increase bank visibility, demonstrate community reinvestment and link with the customers of tomorrow in an exclusive way. Schools will be sponsored quickly, so don’t delay to be sure to take advantage of this great opportunity. Interested in sponsoring the EverFi Financial Literacy platform for the schools in your community? Contact OBL BankServices Executive Director Mike Baker at mbaker@ohiobankersleague.com or (614) 340-7601. EverFi is the leading education technology platform to teach, assess, and certify students in critical skills that states are mandating and employers are demanding, including Financial Literacy, Student Loan Management, Digital Literacy and Responsibility, Substance Abuse Prevention, and additional platform areas to be announced in 2011. The company is powering a national movement in 50 states and over 3,000 schools and colleges. EverFi teams with major corporations and foundations to provide the programs at no cost to schools. Learn more at www.everfi.com.

winter 2011 Ohio Record

Accuracy.

When it matters most. Floodplain Consultants Inc. has been providing community banks with the most accurate flood zone determinations available for over 20 years. Endorsed by the Ohio Bankers League, Floodplain Consultants Inc. is the proven leader in accuracy, compliance, and customer satisfaction.

To learn more about reducing compliance problems and increasing borrower satisfaction, contact Mike Hines. - mhines@floodplain.com

Endorsed by

Ohio Record winter 2011

New Claims Administrator to Increase Benefits, Reduce Costs for Banks By James Thurston, Editor

The OBL’s health insurance co-operative, the Ohio Bankers Benefits Trust, has hired Fortune 100 company Aetna to be its new claims administrator, beginning Jan. 1. “As the largest banking health insurance provider in Ohio, we constantly strive to offer the best insurance plans, management tools and customer service available on the market today,” said OBBT Managing Director Jeff Quayle. “This new partnership with Aetna will help Ohio bankers minimize claim costs while receiving the best customer service from the best insurance professionals.” This exciting new partnership will give Ohio bankers access to a whole raft of programs and services to help control rising costs, along with effective administrative benefits and useful tools to help employees stay healthy. Aetna’s range of programs includes extensive medical and disease manage-

Online tools

• Finding a doctor or specialist •Estimating costs of doctor visits, medicines, tests, and more • Printing temporary ID cards •Checking claims and payment information •Getting health information on hundreds of topics

ment programs in addition to a more robust wellness program. OBBT-covered employees will also receive 24/7 access to their health information through a new state-of-the-art online benefits management platform. This new user-friendly Web platform, Aetna Navigator will make it easy for bankers to manage their health and benefits with just a few keystrokes or clicks of the mouse “We are very excited about this change,” added new OBBT Administrator Erin Husslein. “By pooling the resources of more than 70 Ohio bank members, we can provide a quality product and excellent service at a competitive price.” The change will usher in a new era in convenience and product range for Ohio bankers. New programs available under the Aetna umbrella include: • A stable, nationwide network of doctors, hospitals and other care providers

Virtual Assistant For Real-Time Answers To Benefit Questions

Ann can help members log in and register for an account; locate benefits, claims and cost-of-care information; and much more. This virtual assistant is an industry first.

• Disease Management - 35 specific programs to improve health and reduce costs • Beginning Right Maternity Management • Simple Steps to a Healthier Life with Personal Health Record • Compassionate Care • National Medical Excellence - transplants, rare and complex conditions, pediatric congenital heart surgery, and care outside the U.S. • Disease management programs to improve health and reduce costs • Money-saving products – members can use pretax dollars to pay for their health insurance premiums, transportation to work, and child care • COBRA administration Call OBBT Employee Benefits Manager Gary Sutter at (614) 340-7615 to find out more about OBBT services or to request a competitive quote for your health benefit needs

User Friendly Interface

Wellness Products & Discounts

Members can find a healthcare provider, search their history or order medications – all with the click of a mouse.

TheAetnaWeightManagementSM discount program provides members with access to discounts on the CalorieKing® Program and products, eDiets® diet plans and products, Jenny Craig® weight loss programs and Nutrisystem® weight loss meal plans. Aetna also offers hearing discounts, vision discounts, fitness discounts and even a discounted membership to Zagat. winter 2011 Ohio Record

The Utica Shale Drilling Boom and Ohio’s Community Banks Ohio is experiencing a resurgent boom in drilling for natural gas and oil through the use of hydraulic fracturing—the process of fracturing a rock layer with highlypressurized fluid to create channels for fossil fuel extraction. As part of that boom, the Ohio Department of Natural Resources has issued nearly 80 horizontal drilling permits to extract oil and gas from portions of the Utica Shale located in Ohio.1 Utica Shale lies under a large portion of Ohio, particularly in the southeast part of the state. It is thought to contain extraordinary amounts of natural gas,2 the pursuit of which may add $14 billion in income and 200,000 jobs to Ohio by 2015, according to the Ohio Oil and Gas Association.3 Undoubtedly, this phenomenon could have a significant impact on Ohio’s community banks. In order to “frack,” a drilling company must first obtain rights from Ohio landowners. Oil and gas leases have always posed a challenge in real estate lending, and the discovery of significant reserves in the Utica Shale will likely increase that challenge. Lenders can address these challenges through comprehensive due diligence and careful loan administration.

Oil and Gas Leases Under Ohio Law Oil and gas rights are generally like any other property right in Ohio—they may be purchased, sold, or leased.4 Like mortgages, they must be recorded with the county recorder’s office to establish lien priority.5 Failure to record renders that right invalid against third parties.6 But if, for example, an oil-and-gas lease holder installs a horizontal drill on site, that openness may eliminate the need to file the lease. This may also charge third parties, such as lenders, with knowledge of the lease’s existence, thus impacting future lien priority. Although oil and gas rights generally act as any other Ohio property right, their existence is complicated when surface and mineral rights are severed into surface and

Ohio Record winter 2011

subterranean (mineral) portions.7 This may ultimately create separate chains of title for what is often considered a single piece of real property. More concerning is the fact that mineral rights may have been severed decades in the past. In these instances, lenders are often unaware that the collateral is not whole. That separation of property interests has the potential to significantly devalue collateral.

The Importance of Due Diligence Oil and gas leases are, therefore, best addressed before a financial institution makes a loan secured by real property. Pandora’s Box can’t be closed after the mineral lease is filed or after the rock is fractured. Visual inspection, strategic documentation, and proper loan administration can help banks ensure substantial losses are not encountered. Landowners traditionally sever surface and mineral rights through deeds or provide access through a lease. The nature of conveyance ultimately depends on the transfer, as determined on a case-by-case basis. The status of mineral rights—and the property itself—must therefore be determined through title review. Lenders should subject proposed collateral that could support drilling to a

Karl C. Kerschner Attorney Meyer & Kerschner, Ltd

Michael Stultz Attorney Meyer & Kerschner, Ltd

comprehensive title search. That search may include multiple chains of title. If distinct surface and mineral rights exist, the collateral may be subject to future environmental damage, reasonable access for mining companies, and unforeseen devaluation. Although these situations are common, particularly with farm ground, lenders are not without recourse. The Ohio Dormant Mineral Act, Marketable Title Act, and other regulations permit a landowner to rejoin severed land interests or purge nonfunctioning lease interests. The use of those tools should be considered as a lending prerequisite. Visual property inspection and analysis of land that can support drilling is equally important. Inspection may be performed by the bank’s staff or, better yet, certified by a qualified third party. Thorough

property inspection helps identify existing wells, whether active or inactive, possible environmental damage, and helps guard against future lien-priority challenges from potential mineral-right holders. In addition, thorough loan documentation, including comprehensive owner’s affidavits and loan agreements containing appropriate affirmative and negative covenants are advisable. When title documentation reveals active mineral leases, banks face a different, but solvable problem. The holder of the mineral interest should subordinate its interest to the bank’s right to payment as a lending prerequisite. Finally, the use of title insurance is always recommended in real-estate lending.

Loan Administration Bank loan documentation generally provides protection concerning mineral rights, but borrowers aren’t always mindful. And contractual prohibitions against certain activities do not necessarily ensure a compliant borrower. Routinely reviewing

collateralized land is a key preventative measure recommended for all property capable of supporting drilling. If discovered, banks may address improper borrower conduct through injunctive relief, loan default, receivership, or the assignment of rents, among other remedies. In addition to visual review, community banks can protect their interests through borrower education. Many borrowers are unaware that they may not permit drilling on their property without the lender’s consent. During the lending process, banks lessen the likelihood of post-closing drilling through discussions concerning consent to drill, environmental impact (such as brine water storage), and drilling as a condition of loan default. Moreover, borrowers are unaware that

many lenders refuse to finance properties subject to drilling or mineral leases—a factor preventing future lending options with the bank or a third party. Education may, ultimately, prevent an undesirable result for a borrower.

Challenges Ohio’s banks will face continuing challenges over the next decades as the natural gas boom continues, particularly in the Utica Shale area. Strong due diligence prior to lending and vigilance after a loan is issued are critical to prevent drillingbased loss. Banks are in a unique position to prevent that loss and thrive as the real estate market begins to recover.

1 ‘Fracking’ permits booming, Columbus Dispatch, October 13, 2011. 2 Utica-shale wells going gangbusters, Columbus Dispatch, September 29, 2011. 3 Estimates provided by Ohio Oil and Gas Assoc. See, ‘Fracking’ permits booming, Columbus Dispatch, October 13, 2011; See also, We will frack you, The Economist, November 19, 2011. 4 Moore v. Indian Camp Coal Co. (1907), 75 Ohio St. 493. 5 Ohio Revised Code § 5301.09 6 Ohio Revised Code § 5301.09 7 Moore v. Indian Camp Coal Co. (1907), 75 Ohio St. 493.

winter 2011 Ohio Record

Efficiency Takes Teamwork Increasing efficiency takes more than technology – it takes teamwork to re-engineer workflows and processes. That’s why COCC offers the best support in the industry to help banks do more with the same staff. That’s client-owned core processing from COCC – using teamwork to increase bank efficiency.

The Better Data Processor

www.cocc.com

888.678.0444

We have saved our clients over $1.8 billion in workers’ compensation premiums since 1991. The Third Party Administrator that puts you first. CompManagement, Inc. delivers workers’ compensation claims management services for nearly 30,000 local businesses including over 160 associations, chambers of commerce, governmental agencies and public sector organizations. • founded in Ohio in 1984, serving Ohio employers for over 25 years • privately held company with headquarters in Dublin and local service offices in Canton, Cleveland, Cincinnati, Hilliard, and Toledo • comprehensive client education program available online and onsite at locations throughout Ohio • services include Group Rating, Retrospective Rating, Self Insured, Safety & Loss Control and Unemployment Compensation

Scan code to explore reducing workers’ comp premium

Endorsed OBL Business Partner

To learn more, contact us at 800-825-6755 ext. 8168 today or visit www.compmgt.com

Ohio Record winter 2011

SPE

CIA

L PU

LL -O

SEC

TIO

OBL BankServices Boosting your Bottom Line By James Thurston, Editor

Increase Quality and Reduce Costs to Power Your Bank into 2012

This special pull-out section details a selection of OBL endorsed business partners – the banking industry vendors that provide the best products and make the biggest difference to the bottom lines of financial institutions across Ohio. POWERFUL BUYING SYNERGY

Harnessing the purchasing power of hundreds of Ohio banks, OBL BankServices business partners and owner-operated programs deliver unbeatable value propositions. MARKET-BEATING DUE DILIGENCE

OBL BankServices business partners share our drive to provide quality and exceptional service. If they didn’t they wouldn’t be a business partner. It’s that simple. Every firm in this special pull-out section has successfully completed a thorough and robust due diligence process at the hands of our professional staff and our twelve board members – all community bankers. ESSENTIAL CUSTOMER SERVICE, UNPARALLELED PROFESSIONAL SUPPORT

As well as the dedicated professionals employed by OBL BankServices business partners listed in this special section, the OBL has a dedicated team of pros on staff to help answer your questions and make your buying experience the best in the business. Industry veterans like Mike Van Buskirk, Mike Baker, Michelle Crume and Brenda Arnold are just a phone call away. There’s no robo-answering service and there’s no twenty minute wait. Call (614) 340-7595 to find out more.

winter 2011 Ohio Record

OBL BankServices

ATM AND DEBIT CARD PROGRAMS Elan Financial Services OBL BankServices Endorsed Business Partner - Since 1996 Elan Financial Services is an experienced and leading provider of payments solutions including ATM and debit card processing programs and MoneyPass®, the nation’s fastest growing surcharge-free ATM and PIN POS network. In addition to these core products, Elan offers innovative and profitable programs such as ATM Managed Services, which provides financial institutions the option of full or select outsourcing of their ATM program, a turn-key debit card marketing program with tools and promotions to help grow and maintain cardholders, and FraudWatch®, a robust fraud monitoring service which intelligently protects cardholders against fraudulent activity.

WhenCONTACT it comes to BOLI,

experience counts.

Robert (Jack) Casey Vice President Elan Financial Services FEATURES 225 West Station Square Drive • ATM managed services Pittsburgh, PA 15219 • MoneyPass Surcharge Free ATM and PIN POS Network Tel. (412) 552-2234 • FraudWatch® fraud monitoring services (412) 552-2290 • Debit Card Marketing Getting the best Fax. possible return on your bank-owned life insurance • Fully integrated payments solutions Toll free: (800) 343-7064 isn’t easy. It takes wisdom, design and diligence. That’s why it takes • ATM terminal driving and transaction processing robert.casey@elanfs.com experienced experts. Like Banc Consulting Partners. www.elanfs.com BENEFITS • ATM managed services provides flexible and unique outsourcing of your ATM program With nearly 20 years’ experience, Banc Consulting Partners is the to maintain compliance regulations, functionality, and availability of your ATM program leader in BOLI design, analysis, compliance and plan service. We’re through full or partial outsourcing by the Ohio Bankers League and have earned the trust of • MoneyPass is the lowest cost and fastest growing surcharge free ATM network inendorsed the United States, with more than 22,000 locations nationwide offering complete turn-key more community banks than any other firm in the country. marketing support, online locator, and best-in-industry support • The Elan Debit Card Marketing program is a single source solution to grow debit So card when you want the best for your BOLI portfolio and a programs while reducing operation expenses

BANK OWNED LIFE INSURANCE

meaningful, long-term relationship with the advisor who provides it, talk to an expert. Talk to Lou Moore at Banc Consulting Partners. Because when it comes to BOLI, experience counts.

Banc Consulting Partners OBL BankServices Endorsed Business Partner - Since 2010 Banc Consulting Partners is the industry leader in designing BOLI portfolio strategies and executive and director benefit plans for community banks. With over 500 community bank clients, Banc Consulting Partners exclusively focuses on community banks with a wealth of experience and knowledge in the banking industry. Banc Consulting Partners brings over 20 2035 Crocker Road, Suite 103, Westlake, OH 44145 years of comprehensive understanding of the challenges financing benefit costs and how to CONTACT offset these with a properly structured BOLI portfolio. FEATURES

• Innovative BOLI solutions • Full service administration and compliance support • Regulatory compliance and annual risk assessment • State of the art financial modules

BENEFITS

• Unparalleled BOLI expertise • Increased shareholder value • Incremental Income opportunity • Proven performance

Ohio Record winter 2011 | SPECIAL BUSINESS PARTNERS SUPPLEMENT

| www.bancconsultingpartners.com

Lou Moore Managing Principal Banc Consulting Partners 2035 Crocker RD #103 Westlake State OH 44145 Tel. (440) 356-8860 Fax. (440) 730-3130 lmoore@yourbankpartner.com www.bancconsultingpartners.com

MAN

440

216

440 lmo

Boosting your Bottom Line

CHECKING PRODUCTS AND SERVICES Deluxe Corporation OBL BankServices Endorsed Business Partner - Since 1996 Deluxe Corporation helps keep financial institutions thriving in ever-shifting markets. It provides measurable, sustainable solutions designed to target customers, acquire and onboard accountholders, enhance customer experiences, manage compliance, boost profitability, and build brand loyalty. Year after year, banks trust Deluxe to help them achieve their business objectives, grow their deposit business, and relieve their pain points. This continued level of performance has helped Deluxe earn the reputation of being one of the most trusted and valued partners in the financial services industry. Find out how Deluxe can partner with you to enhance your business. Visit www.deluxe.com/connect. FEATURES

• Check printing services • Innovative customer loyalty programs that inspire employees, assess the client experience, enhance your call center, define and train on positive experiences, measure your success • A range of marketing solutions: direct mail, outbound calling services (rated in the top three percent of call centers in the country), client on-boarding services, and small business solutions

BENEFITS

• Gain insight into relevant industry information/trends • Grow client loyalty that will increase retention, increase share of wallet, and community awareness • Enhance employee engagement • Deepen client relationships: growing products per household, increasing debit card interchange income, take retail and consumer relationships to that next level of growth • Provide more robust security solutions for you and your clients

CONTACT

Jeff Berkes Account Executive Deluxe Corporation 9230 Addington Place Powell, OH 43065 Tel. (614) 593-5942 Fax. (614) 920-3969 jeffrey.berkes@deluxe.com www.deluxe.com

COLLECTIONS JP Recovery Services Inc. OBL Endorsed Business Partner - Since 2003 JP Recovery Services, Inc. is an Ohio based full service bad debt collection agency, and is nationally licensed. Since 1998, the JPRS staff of credit professionals is experienced in converting aged receivables and bad debts into cash flow for both consumer and commercial accounts. JPRS will provide your bank with customized collection strategies to meet the specific needs of your business plan for bad debt revenue recovery. In addition to bad debt recovery, the firm’s Pre-Collection Division can provide revenue support with receivable monitoring programs for accounts in the early stages of delinquency. JPRS is a member in good standing with the American Collectors Association and the Better Business Bureau (A+ Rating). As part of its partnership approach to its business relationship with OBL, JPRS provides discounted pricing for collection services to member banks. FEATURES

• Effective collection strategies for consumer and commercial bad debt recovery • Customized pre-collection programs for accounts in early stages of delinquency • Nationwide network of collection attorneys • FACS collection system with electronic data interface and detailed reporting • Strong client service approach in client relationships

CONTACT

John P. Beirne President JP Recovery Solutions 20220 Center Ridge Road, Suite 200, Rocky River State OH 44111 Tel. (440) 331-2200 Fax. (440) 331-2228 jbeirne@jprecovery.com www.jprecovery.com

BENEFITS

• Excellent customer service • Strong revenue recovery • Effective low cost pricing

winter 2011 Ohio Record

OBL BankServices

COMMUNITY REINVESTMENT ACT Ohio Capital Corporation for Housing OBL BankServices endorsed business partner – Since 2009 Since inception in 1989, Ohio Capital Corporation for Housing, a nonprofit organization, has worked at the forefront of affordable housing development to create affordable housing and CRA eligible investment opportunities for Ohio banks. To date, OCCH has raised and placed over $2.2 billion of capital from over 30 Ohio based investors including Park National Bank, Fifth Third Bank, First Federal of Lakewood, KeyBank, JPMorgan Capital, US Bank, PNC Bank, Citizens Bank and Nationwide Insurance. OCCH is the largest locally controlled syndicator of Low Income Housing Tax Credits in the nation and oversees an investment portfolio of over 25,000 units of affordable housing in 485 projects located across Ohio. OCCH offers members of the OBL the ability to invest in secure, well-structured affordable housing investments across Ohio. An investment in an OCCH sponsored equity fund meets the Investment Test under the CRA Regulations while providing the investor with a market rate of return through the purchase of Low Income Housing Tax Credits. FEATURES

• Ten years of federal tax credits which reduce corporate income tax liabilities on a dollar for dollar basis • Risk sharing and diversification • Accurately forecasted tax benefits • Direct and side by side investment opportunities available • Unlimited public relations and marketing opportunities • Experienced and well capitalized fund manager • No OCCH investment has been foreclosed upon

CONTACT

Hal Keller President hkeller@occh.org Jon Welty Vice President jwelty@occh.org Ohio Capital Corporation for Housing 88 East Broad Street, Suite 1800 Columbus OH 43215 Tel. (614) 224-8446 Fax. (614) 629-3058 www.occh.org

BENEFITS

• 100 percent of investment qualifies for CRA • Timely quarterly and annual reporting • Construction and permanent lending opportunities • Potential depository relationships

COMPLIANCE TRAINING Compliance Coach OBL BankServices Endorsed Service - Since 2009 The Ohio Bankers League has partnered with leading online training provider Compliance Coach to provide member institutions with Web-based compliance training at no extra cost. This exciting partnership gives member banks and thrifts access to thirty five Compliance Coach programs, covering the areas where Ohio institutions face the greatest risk in 2012. Compliance Coach is comprised of an in-house team of some of the nation’s top compliance experts, who design state-of-the-art training programs. Its experts are former regulators who have authored regulations or examined financial institutions, or compliance attorneys or compliance officers who have spent years practicing compliance at leading financial institutions. Your institution must have an effective compliance training program in order to pass your next exam. This continuing partnership gives all OBL member institutions the opportunity to do so at no extra cost. FEATURES

• Online compliance training • 35 courses covering the areas where financial institutions have most risk • Risk-based reporting, tracking and analytics

BENEFITS

• Available at no-cost to OBL members • Easy to use online html training modules • Fulfils compliance training requirements • Course content refreshed on regular basis • Recognized by major regulators: FDIC, FRB and OCC use Compliance Coach to train their examiners

Ohio Record winter 2011 | SPECIAL BUSINESS PARTNERS SUPPLEMENT

CONTACT

Julie Kiplinger Manager, Seminars & In-Bank Training Ohio Bankers League 4249 Easton Way Columbus OH 43219 Tel. (614) 340-7612 Fax. (614) 340-7596 jkiplinger@ohiobankersleague.com www.ohiobankersleague.com/compliancecoach

Boosting your Bottom Line

COMPLIANCE CONSULTING Young & Associates, Inc. OBL BankServices Endorsed Business Partner - Since 2010 Since 1978, Young & Associates, Inc. has provided consulting, outsourcing, and educational services to community financial institutions nationwide and overseas. The firm offers a wide array of products and services that improve bank profitability, increase shareholder value, and improve bank/regulatory relations. Presenters of The Community Bankers for Compliance Program (CBC), endorsed by the OBL, Young & Associates, Inc. has been a trusted source for regulatory compliance education and training for Ohio community banks for over 30 years. Young & Associates, Inc. looks forward to working with your bank to ensure that it can make informed and strategically sound decisions now and in the future. FEATURES

• Liquidity planning • Strategic planning • Regulatory assistance • Expansion & de novo bank charters • Internal audit • Recruitment & human resources • Lending & loan review • Regulatory compliance • Policy development

CONTACT

James Kleinfelter President and Senior Consultant Young & Associates, Inc. 121 East Main Street P.O. Box 711 Kent, OHIO 44240 Tel. (330) 678-0524 Fax. (330) 678-6219 jkleinfelter@younginc.com www.younginc.com

BENEFITS

• Bankers working for bankers: The Y&A team includes former CEOs, COOs, CFOs, senior officers, and regulators • Experts in the field • Up-to-date: Y&A consultants maintain constant contact with the regulators to stay abreast with the latest issues in the industry and regulatory expectations • Cost-effective: Y&A products and services are priced at a reasonable level and are designed with banks’ specific needs in mind

CREDIT INSURANCE PRODUCTS IAC Group OBL BankServices Endorsed Partner - Since 2000 IAC Group offers a full range of consumer and lender protection products and services to meet the diverse needs of your institution. Since 1956, IAC has been a leader in helping institutions develop fee income strategies and improve profitability. IAC helps financial institutions evaluate and implement consumer protection options such as debt cancellation, simple issue term, mortgage and consumer life and disability and other consumer protection products. IAC provides complete administrative and claims support. This includes on-site education, our FourPoint software, proactive coaching and sharing your goals through to a successful and profitable product launch and beyond. IAC can provide risk management products protect financial institutions from loan losses that can impact your bottom line. Collateral tracking, risk assessment, and other lender placed protections elements mitigate the risk inherent in a challenging lending landscape. IAC helps ensure you have the right protection in place to protect your profitability. FEATURES

• A comprehensive suite of insurance products for the banking client including; credit insurance, debt cancellation products, term life products and mortgage life & disability • A team of sales and claims professionals who share your goals of fee income and top notch customer service • Ongoing employee training in multiple venues; on-site, virtual, phone, email etc.

CONTACT

Greg Janssen Senior Vice President, Regional Sales Director IAC Group 2400 West 75th Street Prairie Village, Kansas 66208 Tel. (317) 403-0777 Fax. (317) 915-9962 gjanssen@iac-group.com www.iac-group.com

• Comprehensive metrics and evaluations to help identify and magnify opportunities BENEFITS

• Increase fee income and improve profitability while controlling the common causes of loan delinquency and charge-off • Increase cross-sell and effectiveness of your front line employees as the build sales confidence • Build powerful customer relationships and increase retention by protecting their credit, their assets and their families through a comprehensive suite of consumer protection services

winter 2011 Ohio Record

OBL BankServices

EMPLOYEE BENEFITS Ohio Bankers Benefits Trust OBL BankServices Operated Business Partner - Since 1952 The Ohio Bankers League began its tradition of providing quality employee benefit services to members in 1952 with the creation of the Ohio Bankers Benefits Trust. Through a wholly owned subsidiary, the OBL administers a variety of medical, life, dental and vision plans for member institutions, their employees and their dependents. Employers have the option to offer one or more benefit plans giving employees personal choice. Included are a variety of wellness and care management programs that promote health and well-being. In addition to the health plan is a comprehensive Section 125 plan for nonreimbursable medical expenses. FEATURES

• A variety of medical, life, dental and vision plans • A comprehensive plan for non-reimbursable medical expenses • Comprehensive wellness and disease management programs • Web-based employee – self-service and benefits administration for Human Resources

OHIO BANKERS BENEFITS TRUST CONTACT

Gary L. Sutter Employee Benefits Manager Ohio Bankers Benefits Trust 4249 Easton Way, Suite 150 Columbus, OH 43219-6170 Tel. (614) 340-7615 Fax. (614) 340-7599 gsutter@ohiobankersleague.com www.ohiobankersleague.com

BENEFITS

• Benefit plan options • Excellent customer service • Competitive rates • Retiree coverage • On site health risk assessment • Disease management

EXPENSE REDUCTION AND REVENUE ENHANCEMENT Optimum Systems Products OBL BankServices Endorsed Business Partner - Since 1989 Optimum’s brand promise is to deliver programs and solutions to allow financial specific clients to become more cost efficient and productive in serving their current customers and to assist them in adding new clients. Leveraging customer relationships – particularly in a down economy – is the greatest opportunity that community banks have to grow. Optimum Systems Products has the tools and skills available to put together a Customer Growth Program and New Business Development initiative that focuses on a bank’s best opportunities for growth. Optimum is recognized as an industry leader in client profitability through providing outstanding marketing services, business products, printing, technology, and print outsourcing services for all routine bank correspondence, all delivered with exceptional customer experiences. Optimum offers solutions and has been fulfilling the needs of more than 1,000 community banks for over 25 years. FEATURES

• Free assessment to identify gaps in your marketing, procurement, and bank document printing operations • Customized internet bank supplies/document catalog • Inventory control • Advertising promotional products • Warehousing and distribution • Commercial printing • Marketing services • Sales assessments and training

BENEFITS

• Aligned sales and marketing plan • New customer development programs • Maximized efficiency and expense control • Increased profits through the elimination of waste and department expense reporting • Document analysis and image enhancement

Ohio Record winter 2011 | SPECIAL BUSINESS PARTNERS SUPPLEMENT

CONTACT

Western Ohio Linda Thompson Tel. (614) 318-1369 lthompson@optimumcompanies.com Central & Northeastern Ohio Judy McMillen Tel. (614) 318-1371 jmcmillen@optimumcompanies.com Eastern Ohio Matt Gleckler Tel. (614) 318-1386 mgleckler@optimumcompanies.com Optimum System Products, Inc. 5061 Freeway Drive East Columbus, OH 43229-5403 Tel. (800) 869-0632 Fax. (614) 885-4454 www.optimumsystem.com

Boosting your Bottom Line

FINANCIAL LITERACY EverFi, Inc OBL Endorsed Business Partner - Since 2011 EverFi is the nation’s leading education technology company focused on financial literacy. EverFi’s programs operate in all 50 states and are sponsored in nearly 4,000 K-16 schools. The award-winning technology teaches, assesses and certifies students using the latest new media tools to create a unique, interactive experience. The system tracks the progress and score of each user to provide teachers and sponsors with visibility into students’ performance and knowledge gain. Over 4 million students have completed EverFi’s platforms and 9 studies have been published documenting the efficacy of several of these platforms. By underwriting the program, banks can private-label the platform, demonstrate community reinvestment, build relationships with local schools and students, and tell an interesting story in the community. FEATURES

• 3D simulations, gaming, messaging tools, animations, avatars, and adaptive-pathing • Hundreds of topics covered including: budgeting, credit cards, credit scores, student loans, 401ks, investing • Official Certificate in Financial Literacy upon successful completion • Bank names the program and brands the platform • In-depth tracking and reporting capabilities

CONTACT

Ray Martinez Executive Vice President EverFi, Inc 2715 M St. NW Washington D.C 20007 Tel. (202) 550-5945 Fax. (202) 450-3967 ray@everfi.com www.everfi.com

BENEFITS

• Build relationships with young people and families in the community • Demonstrate Community Reinvestment • White-label platforms at scale, name and brand the program • Face-to-face opportunities with the students • Certification ceremonies to recognize students • Opportunity to leverage marketing and media efforts

FLOOD COMPLIANCE Floodplain Consultants Inc. OBL BankServices Endorsed Business Partner - Since 2006 Floodplain Consultants Inc. is the Midwest’s premier flood zone determination company. Floodplain Consultants Inc. provide flood zone certification, Letter of Map Amendment (LOMA), flood insurance, flood compliance training, floodplain management, and life-of-loan services for more than 300 financial institutions throughout the Midwest. FCI is the only flood zone determination company offering site inspections for questionable properties. This policy allows FCI to be the only local oriented flood provider in Ohio, and offer the most accurate determinations available. All “Zone A” determinations are accompanied by a map of the property which shows the structure’s relationship to the Special Flood Hazard Area. FEATURES

• Site inspections to ensure accuracy (weekly visits for plats/surveys) • “Zone A Packet” for all positive flood determinations. Proof for you and your borrowers • Flood insurance quotes/policies to ensure correct rating and speed up closing process • Free flood compliance training for your institution

CONTACT

Mike Hines Business Development Manager Floodplain Consultants Inc. 800 E. 56th St. Brownsburg, IN 46112 Tel. (800) 945-0246 Fax. (317) 858-4421 mhines@floodplain.com www.floodplain.com

BENEFITS

• Discount for OBL members • Unparalleled accuracy • Customer satisfaction • Reduce costly compliance problems • Reduce staff workload • Customer service is top priority • Free Trial for OBL members

winter 2011 Ohio Record

OBL BankServices FUNDING Promontory Interfinancial Network, LLC OBL BankServices Endorsed Business Partner - Since 2006 Using Promontory Interfinancial Network’s CDARS®, ICS, and IND® services, financial institutions can build multi-million-dollar relationships, manage liquidity by selling excess deposits for fee income, and tap cost-effective fixed- or floating-rate funding (available without collateralization or stock purchase requirements). Promontory has established the nationwide Promontory Network, comprised of approximately 3,000 financial institutions, through which members place billions of dollars in deposits every week. As a service to the banking industry, Promontory also offers Prepaid Assessment MarketplaceSM, a free service that helps depository institutions buy and sell prepaid FDIC assessments. Promontory Interfinancial Network’s flagship service, CDARS®, enables Promontory Network members to offer each of their customers access to multi-million-dollar FDIC insurance, and to keep the full amount of these deposits on balance sheet or to sell the funding for fee income. In addition to using CDARS to attract deposits (on average over a million dollars at a time and with reinvestment rates at approximately 80 percent), Promontory Network members can use the service to help manage interest rate risk or to purchase wholesale funds at favorable rates.

CONTACT

Erich Buckenmaier Promontory Interfinancial Network, LLC 1515 North Courthouse Road Arlington, VA 22201 Toll free (866) 776-6426 x3354 Fax. (703) 528-5700 ebuckenmaier@promnetwork.com www.promnetwork.com

FEATURES

• Provide access to multi-million-dollar FDIC insurance (limits apply) through CDARS® ReciprocalSM • Earn non-interest income by selling “excess” deposits to other Promontory Network members through CDARS® One-Way SellSM • Tap into a cost-effective, alternative funding source for terms of 4 weeks to 5 years through CDARS® One-Way BuySM. Enjoy the ease – no credit lines are needed and no collateralization or stock purchase is required • Diversify your wholesale funding options through CDARS® Floating-Rate FundingSM. Choose the period, from 1 to 7 years, and enjoy stable funding over long terms without collateralization or stock purchase requirements

BENEFITS

• Attract and retain valuable large-dollar relationships by offering customers access to multimillion-dollar FDIC insurance on their CD investments • Keep the full amount of deposits on balance sheet or sell the excess for fee income. • Manage interest rate risk • Reduce collateralization costs • Tap cost-effective, fixed- or floating-rate funding • Earn CD-level interest by investing their own funds through the service

INSURANCE AND RISK MANAGEMENT Gardiner Allen DeRoberts OBL BankServices Endorsed Business Partner - Since 2008 Gardiner Allen DeRoberts is a Columbus-based independent insurance agency specializing in providing property and casualty insurance and risk management services. Serving the Ohio banking industry since 1974, GAD has provided insurance brokering and risk management advice to hundreds of Ohio banking institutions. Independence is the hallmark of GAD’s successful approach to serving its clients. The firm maintains meaningful relationships with the leading financial institution-focused underwriters including the ABA Sponsored Insurance Program, Chubb, Travelers, Zurich, and Proctor Financial as well as other leading specialty underwriters. GAD’s customers benefit from the knowledge and competitiveness the firm brings to addressing each client’s individual needs. FEATURES

• Directors and officers liability and related professional lines • Financial institution bond and related crime coverage • Property and casualty package • Lender placed/repossessed property

BENEFITS

• Competitive quotes • Access to all the leading underwriters • Variety of services • Independence • Experience

Ohio Record winter 2011 | SPECIAL BUSINESS PARTNERS SUPPLEMENT

CONTACT

Katie Gordon Gazley Financial Institutions Specialist Gardiner Allen DeRoberts 777 Goodale Blvd., Suite 200 Columbus, OH 43212 Tel. (440) 382-4759 Fax. (614) 857-6425 kgazley@gadinsurance.com www.gadinsurance.com

Boosting your Bottom Line

INVESTMENT AND INSURANCE PROGRAMS OBL/Infinex Partnership OBL BankServices Operated Business Partner - Since 2005 The OBL/Infinex Partnership stands alone among its competitors because of its unique focus. As a result of this partnership, we can offer access to programs and services which can take your investment program to the next level. There are no “one size fits all” solutions for successful investment programs. Infinex provides the ongoing guidance and support needed to help your bank capture additional relationships, generate revenue, and make your investment program a success. FEATURES

• Bank ownership structure • Full service brokerage • Dedicated Ohio support team • Most competitive payouts in the industry

BENEFITS

• Formed by banks, owned by banks; 55 client banks and four state banking associations including the OBL are Infinex shareholders • Through Infinex, your institution can offer your clients access to investments, insurance, investment advisory services, financial planning, and trust services • Your bank is assigned an Ohio regional director that will assist you with marketing, bank staff training, recruiting, strategic business planning, and program reviews

CONTACT

J. Michelle Crume Vice President & Regional Director Infinex Investments Inc. 4249 Easton Way, Suite 150 Columbus, OH 43219-6170 Tel. (614) 340-7622 Fax. (614) 340-7596 mcrume@ohiobankersleague.com www.ohiobankersleague.com

Investment and insurance products and services are offered through Infinex Investments, Inc., Member FINRA/SIPC. Infinex and the bank are not affiliated. Products and services made available through Infinex are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.

MARKETING & TECHNOLOGY Bancvue OBL BankServices Endorsed Business Partner – Since 2010 BancVue® is the leading provider of innovative products, marketing, consulting, training, compliance guidance and multi-channel online strategies to community financial institutions. A research-driven company, BancVue offers groundbreaking lifestyle finance management, online account opening, search engine optimization, content and lead management, search marketing and financial literacy. Offerings like Kasasa®, a national brand of superior products, deliver controlled new account growth, increased non-interest income, higher profitability and greater retention. BancVue has also joined Wolters Kluwer to provide the first-of-its-kind compliance warranty for the process and disclosures of an online account opening system (INMO®). BancVue currently serves nearly 1,300 community banks and credit unions nationwide. FEATURES

• Market-ready DDAs/products • Dedicated consulting relating to BancVue products and respective markets • World-class marketing/advertising/PR services • Ongoing BancVue product training for SRs

BENEFITS

• The scale to compete and win with no increase in your marketing spend • Increased new account acquisition • Reduced attrition • Greater share of household • The ability to attract a younger demographic (ages 18 to 35) for future growth

CONTACT

Stuart McLellan Prospective BancVue Clients VP, Regional Sales Director stuart.mclellan@bancvue.com Jessie Hogue Current BancVue Clients VP, SR. Regional Sales Director jessie.hogue@bancvue.com 4516 Seton Center Parkway 300 Austin, Texas 78759 Tel. (877) 342-2557 Fax. (512) 349-4141 www.bancvue.com

winter 2011 Ohio Record

OBL BankServices

PROFESSIONAL LIABILITY AND FINANCIAL INSTITUTION BOND ABA Insurance Services OBL BankServices Endorsed Business Partner - Since 2008 One out of every three Ohio banks purchases coverage through this unique OBL endorsed vendor. ABA Insurance Services offers D&O, bond and related coverages from an A.M. Best A+ rated carrier to financial institutions across the country. As a market leader for 25 years with a focus on community banks, this unique banker owned and directed program is recognized by insurance and banking professionals as a secure, stable and affordable source of coverage, able to withstand today’s changing and uncertain marketplace. FEATURES

CONTACT

BENEFITS

Jason Faulkner Senior Account Executive ABA Insurance Services 5910 Landerbrook Drive, Ste. 100 Mayfield Heights, OH 44124 Tel. (800) 274-5222 Fax. (800) 456-6590 jfaulkner@abais.com www.abais.com

• Directors & officers liability • Financial institution bond • Employment practices liability • Internet Banking Liability enhanced to cover social networking • STAMP surety bond. • Profit-sharing program which has declared a total of $75.5 million in distributions since inception in 1991 • Exclusive focus on community banks • Free loss control resources, including e-newsletters, special reports and claims bulletin • Educational resources such as Dodd-Frank tracker, frontline compliance training, and eLearning courses available from the American Bankers Association • Experienced underwriting and claims staff, many with banking or regulatory backgrounds

QUALIFIED RETIREMENT PLANS Pentegra Retirement Services OBL BankServices Endorsed Business Partner - Since 2006 Pentegra Retirement Services delivers a full complement of retirement programs and services to community banks. Founded by the Federal Home Loan Bank System in 1943 to offer a retirement program for their employees, today we manage more than 3,600 retirement plans and over $8 billion in assets for financial institutions nationwide. Pentegra is focused on bringing capabilities to community banks that are usually available only to large corporate and public retirement plans. The firm offers a full range of retirement programs for community banks, including 401(k) plans; ESOPs; defined benefit pension plans; profit sharing plans; and executive benefit and director plans, and a full-service private label 401(k) program banks can offer their commercial customers. Pentegra’s unique, independent approach has earned the endorsement of the OBL, who is also a Pentegra customer with both defined benefit and 401(k) plans. FEATURES

• True full service retirement plans, including combined defined benefit and defined contribution plan capabilities • Plan features designed especially for banks, including the ability to offer bank holding company stock and/or bank certificate of deposits as investment options, and private label retirement programs for a bank’s commercial clients • Investment flexibility with a choice of institutionally managed indexed funds or actively managed mutual funds

BENEFITS

• 65+ years of experience in working with Ohio community banks • Independent approach • User Board of Directors delivers an unparalleled level of oversight • Unique fiduciary role

Ohio Record winter 2011 | SPECIAL BUSINESS PARTNERS SUPPLEMENT

CONTACT

Mark Hogan Regional Marketing Director Pentegra Retirement Services 3 Enterprise Drive, Suite 105 Shelton, CT 06484 Tel. (800) 872-3473, ext. 579 Direct 513-321-5807 Fax. (888) 866-4930 mhogan@pentegra.com

Boosting your Bottom Line

TITLE AGENCY SERVICES Barrister Lawyers Title OBL BankServices Endorsed Business Partner - Since 2009 The OBL’s partnership with Mansfield-based title experts Barrister Lawyers Title brings a new title agency opportunity for member banks and thrifts. Through this program, members can partner with like-minded institutions to form a lender-owned title agency following a low-cost, high-margin model developed by Barrister. Or if it fits an individual bank’s profile better, it can form a stand-alone agency with Barrister. Under the model, banks will generally invest approximately $5,000 in start-up capital and new agencies can be expected to reach profitability almost immediately. In similar models, starts up costs have been anything up to $500,000. The program enables banks to share overhead and decrease the cost associated with policy processing, transaction closing and accounting. Management of the agencies is provided by Barrister, covering everything from legal expertise on the front end to IT support, accounting services and office space on the back end. FEATURES

CONTACT

Bud Vetter Chief Executive Officer Barrister Title Group 70 Park Avenue West Mansfield, OH 44902 Tel. (419) 522-2262 Fax (419) 522-2040 bvetter@ barristertitlegroup.com www.barristertitlegroup.com

• Owner operated title agency (either stand alone or in partnership with OBL members) • Policy processing • Transaction closing • IT support • Accounting services

BENEFITS

• Minimal investment • Almost immediate profitability in most cases • Shared overhead and other costs • Increased non-interest income

WORKERS’ & UNEMPLOYMENT COMPENSATION Compmanagement, Inc. OBL BankServices Endorsed Business Partner - Since 1996 Known as the Third Party Administrator that puts you first, CompManagement has delivered workers’ compensation claims management and cost containment strategies that work hard for local businesses for more than 25 years, and today has the privilege of representing over 25,000 hard working Ohio employers and organizations. Its services include group rating, retrospective rating, self-insured, safety & loss control and unemployment compensation. Through the Ohio Bankers League program administered by CompManagement, financial institutions can be evaluated for qualification in an alternative rating program such as group rating or group retrospective rating for discounts on your annual workers’ compensation premium. CompManagement will provide employers with a no-obligation estimate that outlines the potential savings the OBL group rating plan offers. For a no cost or obligation review, scan the QR code to complete the Temporary Authorization to Review Information form (AC-3) to see how much your financial institution can save. FEATURES

• Group Rating premium discount • Professional Claims Management • Cost control services including a team of representatives available to assist with problems including attending scheduled hearings and improving safety practices

BENEFITS

• Substantial savings on workers’ compensation premiums • Guidance/consultation by knowledgeable staff to assist in workers’ compensation practices • Comprehensive client education program available online or onsite • Local service offices across Ohio to respond quickly to service needs as well as create operational efficiency

CONTACT

Tony Sharrock Account Representative Compmanagement, Inc. PO Box 884 Dublin, OH 43017 Tel. (614) 760-2450 Fax. (614) 790-8210 Toll-free: (800) 825-6755 Anthony.Sharrock@sedgwickcms.com www.sedgwickcms.com

SCAN CODE TO EXPLORE REDUCING WORKERS’ COMP PREMIUM

winter 2011 Ohio Record

OBL BankServices

We’re here to help you manage your consumer & commercial debt recovery. For more than 80 years, Weltman, Weinberg & Reis Co., LPA has built its reputation by helping our clients manage their debt and real estate default recovery by offering an integrated approach to creditors’ rights representation. Dedicated to helping your business grow and prosper, we leverage our experience in Bankruptcy, Commercial and Consumer Collections, Litigation & Defense, and Real Estate Default.

Bankruptcy . cOMMErcIaL cOLLEctIOns . cOnsuMEr cOLLEctIOns . LItIgatIOn & DEfEnsE . rEaL EstatE DEfauLt

Al Reis, Partner areis@weltman.com (614) 801-2771

OBL Ad 2011.indd 1

5/6/11 1:19 PM

Coming together to tame benefit costs. In today’s competitive marketplace, benefits have become as important as compensation when hiring or retaining the best and brightest. But health insurance doesn’t come cheap. The Ohio Bankers Benefits Trust was developed in 1952 to mitigate health benefits costs by bringing bankers together. When we harness the collective resources of Ohio’s banks and thrifts, everyone wins. For more information about the OBL health plan options contact: Benefits Manager Gary Sutter or the Newest Member of the at 614-340-7615 or gsutter@ OBBT Team, Plan Administrator ohiobankersleague.com Erin Husslein at 614-340-7617 or ehusslein@ohiobankersleague.com

OHIO BANKERS BENEFITS TRUST 30

Ohio Record winter 2011 | SPECIAL BUSINESS PARTNERS SUPPLEMENT

Working for Banks and Bankers

Community Banks and Compliance with FINRA Rule 6490 Several privately-held community banks have gotten a nasty surprise this year when they have received a letter from the Financial Industry Regulatory Authority (“FINRA”) imposing fees of $5,000 or more for late filings pursuant to FINRA Rule 6490. Community banks need to be aware that having a broker-dealer create a market in their securities can now result in a privately-held bank or holding company unknowingly becoming subject to FINRA reporting requirements that mimic that of a SEC-registered company.

FINRA Rule 6490 FINRA Rule 6490, which went into effect in September, 2010, codifies the requirements in Securities Exchange Act (“SEA”) Rule 10b-17 for issuers of any class of publicly-traded, non-exchange listed securities quoted on the Overthe-Counter (OTC) markets to provide timely notice to FINRA of the following “Company-Related Actions”: - a dividend or other distribution in cash or securities; - a stock split or reverse split; or - a rights or other subscription offering. Generally, issuers must provide notice at least ten days prior to the record date for these actions. In addition, issuers must also notify FINRA of certain other corporate actions no later than ten days prior to the effective date, including but not limited to: (i) the issuance or change of a trading symbol or name; (ii) merger, acquisition or any other company change in control transaction; (iii) dissolution; or (iv) bankruptcy. The company submitting a CompanyRelated Action notice is required to pay a non-refundable fee related to the submis-

sion, review and processing of documentation by FINRA based on the following table: RULE 10b-17 ACTION

Timely Rule 10b-17 action notification

Susan B. Zaunbrecher, Esq. Dinsmore & Shohl LLP

FEE

$ 200

Late Rule 10b-17 action notification (notice submitted at least five (5) calendar days prior to corporate action date)

$1,000

Late Rule 10b-17 action notification (notice submitted at least one (1) calendar day prior to corporate action date)

$2,000

Late Rule 10b-17 action notification (notice submitted on or after corporate action date)

$5,000

In addition, the Rule permits FINRA to request other documents that it may deem necessary to verify issuer information. The Rule also provides FINRA, at its discretion, with the authority to conduct detailed reviews of submissions, on a case-by-case basis. Further, the Rule vests FINRA with the authority to deny the processing of any corporate action announcement if FINRA determines that such request is deficient and not processing it is necessary to protect investors and the public interest and to maintain fair and orderly markets. Failure to comply with the Rules reporting requirements are significant. Non-compliance or failure of an issuer to provide a Company-Related Action notice

Christian Gonzalez, Esq. Dinsmore & Shohl LLP

as required under the Rule can result in the imposition of monetary fines and result in violation of federal anti-fraud rules as it relates to any Rule 10b-17 action.

Implications and Applicability of FINRA RULE 6490 to Community Banks FINRA’s ability to fine non-SEC registered issuers is relatively new, and is a significant departure from FINRA’s historically ministerial role with respect to such issuers. The Rule has given rise to ever increasing concern in the community banking industry because it indirectly imposes reporting requirements on nonSEC registered issuers. Many small community based financial institutions are not even aware that they may be subject to the Rule by virtue of having a small volume of stock trading. The revelation of this fact by some community banks has only recently come to light given the recent fines FINRA has sought under the Rule, which requires notification of Company-Related Actions by issuers with securities that are “publicly-traded”. Unfortunately, FINRA views any securities that are quoted on the OTC markets, including the OTC winter 2011 Ohio Record

Bulletin Board (“OTCBB”), as “publiclytraded” under SEA Rule 10b-17. Many community banks, with no SEC reporting requirements and a small volume of shares traded, are not aware of these rules and have never considered FINRA compliance. Most do not realize that the Rule has been extended to their institution until after having failed to provide a CompanyRelated Action notice and the imposition of fines and penalties by FINRA. As a consequence, many community banks now are scrambling to ascertain whether they are subject to the reporting requirements under the Rule. It is clear the Rule is applicable to the extent that a bank or holding company has publicly traded stock, has stock traded on the OTCBB or trades in American Depositary Receipts (“ADRs”). The issue that has arisen is that community banks’ stocks are being traded on the OTCBB without any notice to these institutions. There is no one specific triggering mechanism which a community bank may review to determine whether its stock will become OTC quoted; rather, it depends on certain facts and circumstances.

However, there are certain instances which FINRA has stated will result in a security becoming OTCBB quoted and subject to the Rule. A FINRA member broker-dealer, who makes a market in a security, may register that security by simply completing a FINRA form to have that security quoted on the OTCBB. The information that the broker-dealer must provide to the OTCBB includes minimal financials and basic management identification. This is unlike the New York Stock Exchange and NASDAQ where the issuer of securities (a holding company or bank) controls the application process. An issuer cannot apply directly to be quoted on the OTCBB.

Community Bank Compliance In order to guard against unwittingly violating FINRA Rule 6940, it is important for community banks to be vigilant and monitor whether they have been placed on the OTCBB by a broker-dealer prior to taking one of the Rule’s listed CompanyRelated Actions. The most effective and cost efficient way to do that is to check the OTCBB on-line security database at

http://www.otcbb.com/static/symbol.stm ten or more days prior to the record date for one of these actions. There is very little that a community bank can do to limit its risk associated with possible required compliance with FINRA Rule 6940, outside of placing specific restrictions in its organizational documents limiting the transfer of its securities. The Rule places an undue burden on community banks to continually monitor the exchange and trade of their securities and holding them liable for actions outside their immediate control. FINRA has stated that it has advised some community banks to seek an exemption from applicability of the Rule from the SEC, but it is unclear what the criteria for exemption is. Any such request would be reviewed on a caseby-case basis and there is no guarantee that an exemption would be granted. Susan Zunbrecher and Christian Gonzales are attorneys at banking industry law firm Dinsmore & Shohl. They can be reached at (513) 977-8171 or (614) 628-6921.

HERE’S A THOUGHT. AND ANOTHER. AND ANOTHER. However you run your financial institution, we can find ways to help you run it even better. We’re double majors. Certified public accountants and business advisors. Experienced in a whole host of ways to improve upon an already well-running operation. Audits and taxes. Risk management services. IT audits. IT risk and network security assessments. Employee benefits consulting. And more. Call for a complimentary consultation. Kris Hoefler. Brian Franey. Stephanie Fenton. 614.222.9083 plantemoran.com

Ohio Record winter 2011

Moving Forward... Together We’re Vantiv. We’ve been driving innovative payment processing options in the banking industry for four decades. We do it through our people. Accomplished professionals, thought leaders, experienced strategists who can turn fresh ideas into successful payment solutions. We do it through technology. Innovative products to simplify the management of payments. We have an extensive suite of debit, credit, prepaid and ATM services. Most importantly, we do it through our partnerships. Looking out for you is what a good partner does. Let’s talk about flexible solutions that can help you enable success for your bank and your customers.

Fifth Third Processing Solutions is now Vantiv. Learn more at www.vantiv.com.

winter 2011 Ohio Record Vantive_OhioRecord.indd 1

8/9/11 10:43 AM

From the

Steps of the Statehouse

Michael J. Adelman Vice President of State Government Relations

The Halfway Point The winter edition is the annual opportunity to assess how far we’ve come and what lies ahead. We are at the halfway point of the 129th legislative session. This means all legislation is carried forward into the New Year for a chance to become law. You should feel real good about where we are right now as an industry; in part because the OBL hit the ground running establishing relationships with many of the new decision makers around the Statehouse. Also, though, the climate at the Statehouse has been much more favorable toward the banking industry thereby enabling us to go on the offensive. We are almost done with our main legislative initiative, insured cash sweep, which has been in the works for two years. We’ve also made meaningful inroads to improve the regulatory environment for banking in our state and these should materialize in 2012.

Where are We? The Statehouse focus this year has been all about jobs. The OBL’s legislative priority this year has been insured cash sweep. At this time, the bill awaits Gov. Kasich’s signature as its journey is almost complete. Sub. HB 209 was voted unanimously out of House and Senate committees as well as on both chambers’ floors. That’s quite impressive. The icing on the cake, however, is that our bill drew and eye-popping number of co-sponsors. More than sixty-percent of the 132 representatives and senators agreed to put their names on Sub. HB 209. That says a lot to the credibility the OBL has in the General Assembly. This is quite a feat bankers should all enjoy given the politically charged environment at the Statehouse this year. Leadership and support from Rep. Richard Adams (R-Troy) and Sen. Jim Hughes (R-Columbus) was crucial. This success reflects the General Assembly’s confidence in our arguments that the law changes for which we were advocating would be a win

Ohio Record winter 2011

for their local governments; enabling them to manage their expenses and increase their rates of return while helping banks and thrifts more effectively raise deposits. State Treasurer Josh Mandel’s Office also provided valuable feedback to make this bill more meaningful for their investments. I’m proud to report Sub. HB 209 meshes well with the General Assembly’s focus on jobs since local governments utilizing redeposit programs can more wisely manage their finite resources.

Banker Input Wanted The new JobsOhio initiative was Gov. Kasich’s campaign promise to privatize Ohio’s economic development efforts. Banking will be an area of focus. It needs to be. Ohio’s diverse and healthy banking industry should be flaunted as a calling card to businesses looking to invest in our state. As the OBL constantly articulates, a business doesn’t start up or a job isn’t created without the fingerprints of a banker on it. In every community it is the banker who knows which businesses are coming to town or departing and expanding or scaling back. Only recently have executive branch officials taken us up on an offer to view bankers as barometers in Ohio’s communities. Also earlier this year, Gov Kasich convened a meeting with industry CEOs to gain banker insights on how the State of Ohio can help. Responding to the proverbial “what would you do if you were in charge for a day” question is not one in which our industry is conditioned to respond. Operating in a highly regulated environment doesn’t justify devoting much time to thinking how life could be better. However, let bygones be bygones. We welcome the ask. Yet, to succeed we need OBL member input. If we can’t come up with something for Gov. Kasich’s administration to improve, shame on us. To help answer the question “how the State of Ohio can help” the Ohio Department of Development empanelled an experienced and diverse group of bankers called the Financial Institutions Advisory Council. This group is giving structure and discipline to embark on this

exercise. FIAC has had an organizational meeting that included a robust brainstorming session. Subcommittees have been formed around themes that resonated in that discussion: 1. Foreclosures 2. Marketing & Communications Linkages 3. Regulatory Reform 4. Strengthening the State Charter Brand 5. Workforce Development These subcommittees are now painstakingly collecting ideas to explore and turn into recommendations. Please shoot me an email or give me a call to share your ideas. We are excited about advancing meaningful items that Gov. Kasich can implement administratively or ask the General Assembly to enact. Taxation is an issue unto itself that is undergoing separate analysis in an attempt to create a more equitable means of taxing banks and thrifts.

What Lies Ahead? 2012 is a big election year to say the least. All ninety-nine Ohio House seats and sixteen of the state Senate’s thirtythree seats are up for contention. An interesting election dynamic is that the districts have all been redrawn. Another dynamic that I attribute to term limits is the unprecedented turnover that has occurred in the General Assembly this year. Thus, spending time growing name identification back home will be a priority before the primary and November general election. Increased time in the district campaigning would directly correlate into decreased time at the Statehouse. Session days could be a premium. The focus of those days will continue to be on legislation meant to improve the climate for business in Ohio. Jobs. Jobs. Jobs. For a change, limited session days may not be welcome news for us since we are spending more time pursuing positive solutions versus dodging misguided volleys. In addition to FIAC recommendations requiring legislative action, the OBL and Division of Financial Institutions have

invested significant time over the past year reviewing Ohio’s banking laws and drafting needed updates. This will result in a sizeable bill next year. Though it will seem like arcane technical gobbledygook to nonbankers, its goal will be to make Ohio a banking leader in the post-Dodd/ Frank world. Outside of banking, there is talk around the Statehouse that a capital budget bill is in the works. Capital budget bills appropriate funds for construction projects at state prisons, universities, schools and other state agencies. In better economic times, capital bills burgeon with so-called community projects -- local development projects, sports venues and arts projects. This time such niceties are expected to be non-existent. Though Ohio could borrow as much as $2.75 billion for the new construction budget, guidance out of the Kasich Administration is that the bill will be much leaner focusing on necessary maintenance. Approximately $1.5 billion in funding has been a recent benchmark, yet in 2010 a capital bill was skipped altogether. Some argue that given Ohio’s nine-percent unemployment, the capital bill represents a timely opportunity for economic stimulus and should be larger.

Take an Opportunity to Smile! We’ve covered a considerable amount of ground this year and have a higher bar for 2012. Thanks for the support you have extended on our insured cash sweep initiative. We will soon celebrate this new product to offer your public sector customers. Looking to the next year, I’m serious about our call to arms with FIAC. We covet your input to make worthwhile suggestions for improving the environment for banking in Ohio. We are thankful for the request and are confident OBL bankers are up for the task. Happy holidays and all the best in the New Year!

winter 2011 Ohio Record

Strength OHIO BANKING:

in Our Diversity

As each day passes by, Congress is getting closer to the 2012 elections. That means that politics takes over, and less and less real productive work can be accomplished. Nevertheless, as we bring 2011 to a close, it looks like Congress is making progress on important OBL endorsed banking legislation. First, in November the U.S. House approved HR 1965 (to increase the exemption from SEC registration for banks and bank holding companies from 500 to 2,000) by an overwhelming majority. Ohio Congressman Steve Stivers (R-Columbus) played a big role in getting bipartisan support for this measure. The Senate quickly followed by scheduling a full Banking Committee hearing on Dec. 1 on its version of the SEC registration exemption bill, S 556. To support this hearing, the OBL did significant background research for Subcommittee Chairman Sherrod Brown on the number of Ohio banks that would benefit from this amendment. The plan as of this writing is to bring S 556 to the Senate floor under a unanimous consent procedure. That leadership is even willing to consider this expedited procedure, usually reserved for noncontroversial bills speaks volumes about how effective community bankers have been in patiently explaining to their elected officials how this would help banks raise capital more efficiently, increase lending capacity and benefit the communities these banks serve. This news was quickly followed by the introduction of HR 3461, designed to help solve some of the most vexing examination challenges banks have had in the past exam cycle. At our urging, Ohio Congressman Jim Renacci has taken a leadership role promoting this proposal. As a result of the strong bipartisan support this bill has received, we are optimistic that progress can be made on this bill yet this session.

Ohio Record winter 2011

The OBL has provided a detailed analysis in the past, but the primary goal of this bill is two fold. First, it gives banks the ability to appeal exam findings to an administrative law judge that is independent of the banking agencies. This ALJ will be supported by a new independent ombudsman housed within FFIEC, and banks that exercise this right of appeal will be given protection from retaliation. Second, there are several provisions designed to improve the consistency and quality of bank exams, including parameters moving commercial loans to nonaccrual status. Finally, HR 1697, The Communities First Act, received its first hearing in the U.S. House Financial Services Committee last month. This bill contains a variety of proposals that will be helpful to community banks, including some pieces that have already moved separately (see the information on HR 1965/S 556, above). The bill, which also includes provisions on regulatory relief, taxation and agricultural lending was endorsed by the OBL GRC Committee last month. One of the core values of the Ohio Bankers League and its predecessor organizations has been the value of working together. When the industry builds a consensus and speaks with one voice, banking almost always gets meaningful input. One area where all FDIC insured depositories have a common interest and should be working together is the implementation of new policies and procedures at the Consumer Financial Protection Bureau. The OBL has been working with the new senior staff at the CFPB, including former Ohio AG Richard Cordray. The Bureau has reached out to lenders in an attempt to simplify mortgage disclosure forms, making the requirements of RESPA and TILA consistent. The CFPB has also focused early efforts on non-bank lenders. One question that still needs to be

Jeff Quayle OBL Senior Vice President, General Counsel & Managing Director, Ohio Bankers Benefits Trust

answered however is whether the CFPB will impose compliance via a rules-based culture or via high profile enforcement strategy. Banks have been accustomed to the rules-based approach utilized by our primary regulators, with the regulations clearly published in advance and subject to the opportunity for industry comment. The SEC, FEC and others however utilize an enforcement approach. The parameters of permissible conduct are not set out in clearly disclosed regulations. Instead, regulated companies have to extrapolate expected behavior from the high profile litigation against alleged wrongdoers. This is the preferred approach of the SEC. The flashpoint for the CFPB will be in how it chooses to define the new standard on unfair, deceptive and abusive practices. The fact that the enforcement arm is staffing up much faster than the examination arm is of concern to the OBL. In addition, the provision of the law requiring the CFPB to do a cost benefit analysis and consult with the banking regulators apply only to the rulemaking process and not to investigation, enforcement and civil litigation. This is just one of the reasons it is important that the new Bureau report to a commission, similar in structure to the FDIC, and be subject to normal congressional oversight.

winter 2011 Ohio Record

ERM

Creating Value Through Enterprise Risk Management With so much attention focused on the economy, yield curve and the DoddFrank Act, the subject of Enterprise Risk Management (ERM) has not received much attention. ERM has been a Federal Reserve requirement for the nation’s largest financial institutions for some time. Now, ERM is finding its way into the community banking arena. So what is ERM and how might it enhance the management of your institution? As a brief history, the origin of ERM began in 2004 and was widely used in the insurance industry as a methodology to understand and manage risk. The financial crisis in 2008 paved the way for broader use of ERM in the banking industry. The Federal Reserve Bank of Cleveland developed a comprehensive ERM framework to provide guidance for banks implementing an ERM process. This framework, while still in the early stages of development, sets out the broad approach needed to build a robust ERM process. The framework addresses a wide range of issues from the integration of strategy and risk appetite to organization, oversight, measurement, response and validation of the process. The current challenge is that the interpretation of this guidance can vary widely among regulators, bankers and industry professionals. If you have begun the ERM journey, you have no doubt run into the conflicting opinions defining ERM. To clarify: ERM is a very specific and comprehensive management process that links risk AND reward in a dynamic way. It connects

Ohio Record winter 2011

your strategy to your risk appetite. It is an assessment of your current risk situation and your decision to accept, reduce or eliminate the level of risk your company (“the Enterprise”) undertakes in pursuit of your business performance objectives. For example, consider the level of financial performance or “reward” you are expecting to achieve. That can entail any number of performance metrics, such as net income, earnings per share or return on equity. From an ERM perspective, isolating yield on earning assets may be most useful since it highlights the revenue requirement. This leads to the question, “How much risk are you prepared to take in the pursuit of that level of revenue generation?” More simply, what is the level of interest income required to cover operating, funding and credit costs? Factor in the expected profit and achieve some level of relief from noninterest income and you have solved for the level of required interest income. That number is very important. If it is significantly higher than your historical performance, you will need to determine the quantity and type of risk you are willing to assume in your pursuit of the desired level of return. Alternatively, you could look at your current products or lines of business to determine whether you are being compensated adequately for the risks you are taking. For example, nonbank subsidiaries may generate lower levels of earnings with much greater risk exposure. In determining your risk appetite, you must relate the level of risk to the strategic goals and

Jack R. Salvetti President S.R. Snodgrass, A.C.

Nancy D. Schell SVP and Director of Consulting Services S.R. Snodgrass, A.C.

objectives, operating environment, incentive compensation structure and other related areas that have a bearing on risktaking throughout the organization. Once you have determined your risk appetite, the next step is to perform an assessment of the current level of risk (“the risk profile”). One approach is to conduct this assessment across the seven broad risk categories: credit, market, liquidity, operations, legal and compliance, reputation and strategic. The risk assessment process is essentially a self-assessment that considers both quantitative and qualitative factors in determining the current levels of inherent risk and the effectiveness of risk mitigation activities throughout the Enterprise. The assessment is typically performed by multilevel staff directly operating in the areas that manage the risks, under the direction of a risk officer or outside consultant. The quantitative factors will consider the potential impact of loss as related to earnings, capital, dividend payments or some

combination of these items. The probability of loss is also captured in the assessment through qualitative factors that are not represented by financial measures in the final analysis of each area. Once the overall level of risk is determined, the next step is to identify the internal and external metrics that will assist you in identifying how your risk position is changing over time. These metrics are called Key Risk Indicators (‘KRIs”). The compilation of the KRIs is far more than “yet another dashboard.” Rather, it is a key component to taking specific actions to impact the current risk position. The KRIs should measure the degree of potential loss, external economic and monetary conditions and resulting effects on the risk profile. These indicators will evolve over time as the ERM process matures. Despite the apparent complexities, there is practical value in using ERM as a management decision- making model for organizations of all sizes. In its simplest form, a practical ERM process compares the intended amount of risk you wish to assume--the Risk Appetite--with the assessment of your current risk position-the Risk Profile. If these are not in sync, specific action steps are needed to better align the Risk appetite and Risk Profile. In doing so, you will arrive at the most important aspect of the entire ERM process-taking action sooner rather than later. Jack R. Salvetti, President Jack is the President of S.R. Snodgrass, an expert accounting and consulting firm specializing in services to financial institutions. His unique combination of consulting experience and CPA background helps institutions understand and define their business to facilitate the development of plans that deliver measurable results. Nancy D. Schell, SVP and Director of Consulting Services Nancy is a Senior Vice President with S.R. Snodgrass, A.C. Nancy is the Director of the firm’s Financial Services Consulting Group specializing in the areas of Strategic Planning, Enterprise Risk Management, Organizational Design, Profit Enhancement and Process Improvement. S.R. Snodgrass, A.C., Certified Public Accountants and Consultants Phone: 800.580.7738 Website: www.srsnodgrass.com

winter 2011 Ohio Record

Update from the Next Generation Sean A. Whalen CTP, Vice President US Bank Chairman OBL Next Generation Advisory Board

Ohio Record winter 2011

Bank to the Future! That was the theme of the 2011 OBL Annual Meeting held on Nov. 2. We heard from tech guru Eric Cook and strategy expert Dr. Lyle Sussman on the importance of social medial tools like Twitter, Facebook, and YouTube to our business. We also learned how these tools as well as the introduction of smartphones will redefine how we interact with our customer. Social media is just one example of the many changes our industry is undergoing. You may ask yourself, how am I going to keep up on all the changes? Well the Ohio Banker’s League has an answer for you! Formerly announced at the annual meeting, the Next Generation Advisory Board (NGAB) has been assembled to tackle these very issues. Since July, our group has been busy building our foundation. We were given a blank slate from OBL leadership to create something fresh and new and that is exactly what we have done. We recently adopted our mission and vision statements that will help guide us as we move forward. NGAB has defined its mission as: “The Next Generation Advisory Board is a group of young banking professionals assembled together to facilitate involvement in the Ohio Bankers League to research, debate, and provide constructive feedback to the OBL board of directors on issues surrounding our local and regional industry.” Through the successful execution of our mission, we hope to empower the OBL with information that will allow for a dynamic and proactive response to changes in our industry for the benefit of the membership. In the future, our vision is: “The Next Generation Advisory Board will be a collection of future banking leaders, upholding the highest values of honesty and integrity. We will approach industry trends and current events in a proactive manner to contribute insight to the OBL for the benefit of our trade.” Now that we have built a solid foundation for NGAB, we are ready to start tackling issues we believe to be important to the OBL membership. To make the best use of our time and talents, we have divided into five committees; Government Relations, Communications & Technology, Workforce Development, R&D and Education. Here are a few examples of what the committees are currently working on: Workforce Development – Researching how to develop programs and models that could be used by member banks to include: independent business coaching, on-boarding programs, crosstraining programs, internships, management trainee programs, and mentoring programs. Communications and Technology – Working with OBL staff to define the scope of new information technology services to enhance member interactions through the OBL website. Education – Researching the usefulness of a forms library for all member banks to share documents. This would become a resource for member bank’s look for general documents for banking practices. Government Relations – Constructing a database of young leadership in both banking and government to build networks for the next generation. Encouraging the involvement of these young leaders in the Ohio Bankers League. These are just a few of the many ideas that we are working on. NGAB is always looking for the next big idea, concept or technology to research and review for the benefit of the OBL membership. If you have an idea, please send us an email at NGAB@ohiobankersleague.com. 2012 holds many new prospects for our industry and we will be on the cutting edge to help you navigate these new and uncharted waters. We will see you in the future!

= U O Y + B OBL+GS

S S E C SUC

Bankers have long attended the intensive Graduate School of Banking in Madison to further their financial services education and develop a network of bankers across the state, region and nation. 2011 was no exception. Ohio saw 8 students graduate from the three-year program, while another 10 entered their freshman year and 14 held their own during their junior year. In addition, a number of Ohio bankers completed course work in the Human Resource Management School, the Technology Management School and the Senior Managers Seminar. The OBL says “congratulations” to those Ohio bankers who are finding success through professional development and education. 2011 GSB GRADUATES

William K. Argabright, National Bank & Trust James Michael Brainard, The Citizens Banking Company Stormie Lee Gross, Consumers National Bank John T. Herring, First Citizens National Bank Marybeth Shunck, First Federal Bank of the Midwest Patrick H. Tackett, The Ohio Valley Bank Company Robert O. Ward, The Citizens National Bank of Southwestern Ohio Renee K. Wood, Consumers National Bank SENIOR MANAGEMENT SEMINAR

Diana Engelhardt, Andover Bank TECHNOLOGY MANAGEMENT SCHOOL – OFFERED SPRING AND FALL 2011

Jared Butler, The Farmers Citizens Bank Darren Eikleberry, Farmers State Bank Steven Fleetwood, First Federal Savings & Loan Association of Newark Chris McClenathan, Mechanics Bank Dale Moore, The Middlefield Banking Company Jeffrey Nestor, The Ohio Valley Bank Christopher Scott, Heartland Bank Mary Sisson, Farmers Bank & Savings Company Christi Skidmore, Citizens Federal Savings & Loan Association HUMAN RESOURCE MANAGEMENT SCHOOL

Seth Abraham, The Citizens Savings Bank Karen Davis, Standing Stone National Bank Crystal Gibbs, Farmers State Bank Ganelle McFarland, The Community Bank Michelle Ward, NCB, FSB

GSB $cholarship$ - Apply Now! For many years, the OBL and the Herbert V. Prochnow Educational Foundation has awarded scholarships to the Graduate School of Banking in Madison, as well as the GSB HR Management School. Whether given as an association scholarship or earned via work done at the OBL Bank Management School, recipients look forward to continuing their professional education. Currently, Ohio bankers can apply to receive a $925 scholarship to attend the 2012 GSB Human Resource Management School; or a scholarship for one-third of the tuition for each of the three years of GSB, beginning in August 2012. Contact Susan Poling at 614-340-7611 to receive an application. Deadline to apply is January 31, 2012.

2012 Savings Continue For those bankers who attend both the OBL Human Resource Conference and the GSB HR Management School – a $350 refund will be sent to your institution upon completion of both courses. The same holds true for those bankers who attend both the OBL Technology Conference and the GSB Bank Technology Management School. You can put $350 back into the bank!

Save Dates for 2012 Now in Spring! GSB Human Resource Management School – April 15 - 20 GSB Bank Technology Management School – April 22 - 27 Graduate School of Banking – Aug. 12 - 24 Senior Management School – Aug. 19 - 22 winter 2011 Ohio Record

EDUCATION CALENDAR WINTER 2011 Training and professional development comes in many forms. Whether a week-long compliance school, multi-day conference, one-day seminar or an e-learning opportunity, the Ohio Bankers League offers a line-up of options for 2012. Keep this schedule close and check the OBL Web site on a regular basis for updates. And if you have a training need that is not met, contact OBL Education Managers Julie Kiplinger, seminars, webinars and in-bank training, or Susan Poling, professional schools, conferences and events at (614) 340-7595.

Conferences OBL Bank Marketing Conference MARCH 1 & 2, OBL TRAINING CENTER

Discover how to integrate technology with marketing initiatives to reach young professionals, learn marketing strategies to “win the war”, and find out how to effectively participate in a trade show, motivate employees during a sales campaign and much more.

OBL HR Conference MARCH 8 & 9, OBL TRAINING CENTER

2011 conference favorite Patricia Wise will present Employment Law Update & Review, while Brian Townley and Honey Shelton focus on performance planning, culture and un-tapping potential in your institution. Best Practices session also returns!

BSA/AML Conference MARCH 27 & 28, OBL TRAINING CENTER

Bill Elliott, Senior Compliance Consultant, Young & Associates, Inc., will return to lead this conference for a second year. This annual program concentrates on effective and meaningful elements of the BSA program as each topic is considered in-depth, with a hands-on, interactive and practical approach.

Technology Conference APRIL 12 & 13, OBL TRAINING CENTER

OBL Annual Meeting keynote presenter Eric Cook joins the agenda as he taps into Utilizing Analytics to Measure, Manage and Understand Your Bank’s Online Efforts. Other sessions include a look at Regulatory Hot Spots, crimeware applications and How to Train the Customer Under Authentication Guidance.

OBL CEO Symposium MAY 17 & 18, THE HILTON COLUMBUS AT EASTON

Whether your senior officers and management attend this annual program for a session on Master Strategies with Bob McGoffin, the annual Regulator Roundtable or a knock-out presentation on Comprehensive Digital Strategies, this is one CEO Symposium you won’t want to miss! Plus, each attendee will receive a copy of The Trust Edge from keynote presenter Dave Horsager, a producer, professor, and award-winning business strategist.

Ohio Record winter 2011

Seminars The OBL seminar calendar is in constant motion as sessions are scheduled to meet the ever-changing needs of you and your staff. But check out the currently scheduled one and two day programs that will set your institution up for success.

Appraisals: Are Your Processes Up-to-Date with the Regulatory Guidelines? WITH WAYNE LINDER, YOUNG & ASSOCIATES, INC. – FEB. 21

Federal Call Report Workshop WITH ANN LEAVELLE THOMAS – FEB. 22 & 23

IRA Essentials & IRA Advanced Issues (WITH PMC) – MARCH 15 & 16

HMDA Review & Update WITH BILL ELLIOTT, YOUNG & ASSOCIATES, INC. – MARCH 26

Assessing the Individual PFS/Tax Return WITH JEFF JUDY – APRIL 4

Getting to the Numbers: Financial Statement Analysis WITH JEFF JUDY – APRIL 5

Regional Directors Workshops WITH JIM CLARKE – APRIL 17, FINDLAY; APRIL 18, COLUMBUS; AND APRIL 19, SHARONVILLE

ALLL: Adequacy of Supporting Documentation WITH WAYNE LINDER, YOUNG & ASSOCIATES, INC. – APRIL 24

Loan Review: Today’s Expectations WITH WAYNE LINDER, YOUNG & ASSOCIATES, INC. – MAY 10

CRA Review & Update WITH BILL ELLIOTT, YOUNG & ASSOCIATES, INC. – MAY 23

Ohio Deposit Documentation WITH PROFESSIONAL BANK SERVICES – JUNE 19, AKRON; JUNE 20, COLUMBUS; AND JUNE 21, CINCINNATI

Community Bankers for Compliance Program MARCH 13 OR 14; JUNE 6 OR 7; AUG. 28 OR 29; AND DEC. 5 OR 6, OBL TRAINING CENTER

Manage the twists and turns of today’s ever-changing compliance regulations via this nationally-acclaimed program. Led by Young & Associates, Inc., the quarterly classroom seminars are just part of the membership benefits. Also includes a monthly Compliance Update newsletter and access to a members only Web page and compliance hotline.

Schools Advanced Compliance School MAY 21 & 22

2012 OBL Bank Management School SEPT. 16 – 21, OBL TRAINING CENTER

Community Bankers for Compliance School WITH BILL ELLIOTT, YOUNG & ASSOCIATES, INC. – OCT. 1 – 5 , OBL TRAINING CENTER

School of Commercial Lending Essentials WITH JEFF JUDY – NOV. 14 – 16, OBL TRAINING CENTER

Events OBL 2012 Economic Summit FEB. 15, THE RENAISSANCE HOTEL, DOWNTOWN COLUMBUS

OBL Washington DC Fly-In FEB. 28 – MARCH 1

Getting the Cash Back: Cash Flow Analysis

OBL Day at the Capitol

WITH JEFF JUDY – MAY 31

2012 OBL Annual Meeting & Professional Development Event

Managing to Repayment: Loan Structure WITH JEFF JUDY – JUNE 1

Auditing Real Estate Loans: One & One Half Day Seminar WITH BILL ELLIOTT, YOUNG & ASSOCIATES, INC. – JUNE 18 & 19

MARCH 27

NOV. 8, THE FAWCETT CENTER, COLUMBUS

E-Learning Hundreds of Webinars and online seminars are offered annually via the OBL and our ongoing partnerships with the Graduate School of Banking – Madison and bankersed, to cover essential and hot topics in many arenas, including lending, compliance, human resources, marketing, security, frontline and more. Plus, two new series (with the opportunity to take classes individually) will be offered.

ACH Training ACH Webinars, presented by EPCOR, will be offered from 10 – 11 a.m. ACH Audit Prep – Jan. 25 RDFI ACH Audit – Feb. 8 ODFI ACH Audit – March 29 2012 ACH Rules – April 26 2012 ACH Rules – May 8 Corporate Account Takeover – May 24 Corporate Account Takeover – June 13 ACH Written Statements/ Stop Pay – July 18 ACH Audit Prep – Aug. 8 RDFI ACH Audit – Aug. 22 ODFI ACH Audit – Sept. 5

2012 Security Webinars Barry Thompson, CRCM, will lead 90-minute Webinars from 10:30 a.m. – 12 p.m. Robbery Awareness – Jan. 10 Attacking the Branch – Feb. 7 Check Fraud – March 22 Embezzlers Heaven – April 3 The 15 Worst Security Mistakes – May 15 Auditing the Security Function – June 14 Conducting An Annual Security Review – Aug. 23 How To Talk To Customers – Sept. 6 Counterfeiting and Fraudulent ID for the Frontline – Oct. 16 Identity Theft: Have You Been Socially Engineered? – Nov. 19 Ethics Training – Dec. 11

winter 2011 Ohio Record

To see how we can help your bank, please call: A Subsidiary of Paragon Capital Group, LLC

•Charles R. Crowley Managing Director (440) 869-2103 ccrowley@paracapgroup.com •Michael C. Voinovich Managing Director (440) 869-2104 mvoinovich@paracapgroup.com •Christopher M. Chapman Vice President (440) 869-2105 cchapman@paracapgroup.com •Steven M. Weigand Analyst (440) 869-2106 sweigand@paracapgroup.com

Paragon Center 6150 Parkland Boulevard, Suite 250 Cleveland, OH 44124

Ohio Record winter 2011

CINCINNATI Rachel Kerr has joined

Mt. Washington Savings and Loan as vice president, director of lending. Kerr brings 20 years of residential mortgage lending expertise to the historic Rachel Kerr Cincinnati community bank. Prior to joining Mt. Washington Savings and Loan, she was vice president/director of lending at Community Savings Bank in Bethel.

CLEVELAND The Federal Reserve Bank of Cleveland announced Greg Stefani as first vice president and chief operating officer. Stefani succeeds Dale Roskom, who will leave the Greg Stefani bank to pursue personal interests. KeyCorp announced that Charles Cooley and William Gisel Jr. have been elected to the bank’s board of directors. Cooley served as senior vice president and chief financial officer of The Lubrizol Corporation until he retired following Berkshire Hathaway’s purchase of the company earlier this year. Lubrizol is a specialty chemical company that produces and supplies technologies to customers in the global transportation, industrial and consumer markets and is based in Wickliffe, Ohio. Cooley previously served in various corporate finance positions at Atlantic Richfield Company in Los Angeles, and spent several years in the national banking division of Manufacturers Hanover Trust Company in New York.

COLUMBUS Thomas Blackburn, an attorney with the law firm of Buckley King, an OBL affiliate member, has been invited to join the prestigious Council on Litigation Management. Blackburn Thomas Blackburn

focuses his practice on product liability, insurance and professional liability litigation. Huntington Bank has hired Richard Pohle as senior vice president, commercial region manager and Karen Davies as senior vice president, commercial team leader for the bank’s Cleveland region. Both Pohle and Davies report directly to Huntington’s regional corporate banking leader, Cleveland region President Dan Walsh. Davies comes to Huntington from PNC and Pohle from KeyBank. Both are longtime Clevelandbased banking executives who bring a combined 46 years of experience in commercial and industrial banking to Huntington.

DOVER First Federal Community Bank announced Michele Larkin has been promoted to Senior vice president at its recent annual meeting. Larkin has thirty years banking experience and Michele Larkin has been with First Federal since 1998. She serves as the bank’s manager of mortgage banking and loan administration.

WORTHINGTON Great Lakes Bankers Bank announced that Eugene Lovell joined its board of Great directors. Lovell will also serve on the boards of Bankers Bancshares, Inc. and F & Eugene Lovell M Credit Services, Inc. Lovell is President and CEO of The First State Bank of East Detroit located in St. Clair Shores, MI.

YOUNGSTOWN Norwalk Area United Fund, an Ohio nonprofit, was recently presented with a check for $2,500 from the Home Savings Charitable Foundation for program support. Pictured left to right: Linda Bersche, executive director, Norwalk Area United Fund; Ivy Conklin, branch manager, Home Savings Norwalk office; and Edward McClendon, incoming president, Norwalk Area United Fund.

NEWARK Brenda Kutan recently announced her retirement after 44 years at The Park National Bank. Kutan began her career at Park’s Hebron office, where she ran a proof machine before going on to assume additional duties as teller and loan clerk at that office. She transferred to Park’s main office in 1973 to the loan department, working her way up to the position of head loan teller. It was there that she was noticed by former OBL chairman and Park President Bill McConnell, who recognized that her skill set would be better served as his assistant. Kutan played a key supporting role to chairmen Bill McConnell and Dan DeLauder in every merger and strategic shift of Park National Corporation over the past 35 years. She retired as assistant vice president of the bank.

Tell Us About It Have an interesting story to tell, recent promotions, innovative program or other bank announcements? If it’s news you think we need to know… tell us about it. We’re interested in keeping up to date on the activities of our members. Please put the OBL Communications Department on your media mail or e-mail lists. Send your news to: James Thurston Editor, Ohio Record, jthurston@ohiobankersleague.com, 4249 Easton Way, Suite 150, Columbus, OH 43219-6170. winter 2011 Ohio Record

Focus On…50 Years in Banking for Ohio Great Everson Former OBL Chairman James W. Everson recently celebrated his 50th anniversary in banking. Everson, chairman, president and chief executive officer of United Bancorp, Inc., Martins Ferry, began his banking career in 1959 at The Citizens Savings Bank of Martins Ferry as a student intern. Upon graduation from The Ohio State University in 1961 with a Bachelor of Science Degree in Business Administration majoring in Commercial Banking and the completion of his active service with The Ohio Air National Guard, on Nov. 1, 1961 he returned to the bank which had assets of less then $10 million and one location at the corner of Fourth and Walnut Street in Martins Ferry. As a management trainee, he began as a bank teller and advanced through each department of the bank, being appointed its fourth president and CEO in January of 1973. Today he continues to serve as the bank’s chairman. Scott A. Everson, Jim’s son, was appointed president and CEO of The Citizens Savings Bank on Nov. 1, 2004. Under Everson’s management -- and that of his son Scott -- The Citizens Savings Bank and its holding company United Bancorp, grew from a $17 million bank in 1973 to a $432 million bank with operations in several counties. Through its single bank charter now with its twenty banking offices and an operations center, The Citizens Savings Bank through its Community Bank Division serves Athens, Fairfield and Hocking counties and through its Citizens Bank Division serves Belmont, Carroll, Harrison, Jefferson and Tuscarawas counties. United Bancorp, Inc. is a part of the Russell Microcap Index and trades on The NASDAQ Capital Market tier of the NASDAQ Stock Market. OBL President & CEO Mike Van Buskirk commented, “Jim Everson was one of Ohio’s very first community banking leaders to move to online banking. He’s long been a visionary understanding the implications of emerging technology and putting it to work for his customers.” In his community, Everson is a life member of The First Presbyterian Church, Martins Ferry where he is an elder having served several terms on its session and the board of deacons. He was recognized in 1981 as “Citizens of the Year” by the Martins Ferry Chamber of Commerce, received a 30 year service award as director of the Belmont County Auto Club,is a 45 year member of the Salvation Army Board, and a past president of the former Martins Ferry Kiwanis Club. He has served as an instructor with the American Institute of Banking, a member of The State of Ohio Banking Commission and served on The Small Bank Council of The Cleveland Federal Reserve Bank. Jim and Marlene, his wife of 48 years, reside in Naples, Florida and St. Clairsville, Ohio and are the parents of four children with ten grandchildren.

OBL Economic Summit Wednesday, Feb. 15, 2012 The Renaissance Hotel – Downtown Columbus Senior managers, lenders and best business clients! Get the inside track on 2012 Ohio economy from Jim Glassman, managing director of JPMorgan Chase & Co.

Ohio Record winter 2011

The board of directors of The Citizens Savings Bank recently recognized Jim Everson for his 50 years of service to the Bank. To mark the occasion, Everson was presented with a plaque commemorating his 50th anniversary which will be displayed in the bank lobby.

Stability.

ABA Insurance Services is a secure source of insurance for community banks in todayâ&#x20AC;&#x2122;s changing and uncertain market. Our banker-owned and directed program was created 25 years ago to provide stable and affordable D&O, bond and related insurance exclusively for community banks. We offer coverage from an A.M. Best A+ rated carrier and are recognized for our underwriting and claims handling expertise, a unique profit-sharing feature, and our long-term commitment to community banks. To learn more about ABA Insurance Services, call or have your agent call 800-274-5222 or visit abais.com.

Proud to be an endorsed vendor of

ABA Insurance Services We know community banks.

Ohio Record winter 2011

When it comes to BOLI,

experience counts.

Getting the best possible return on your bank-owned life insurance isn’t easy. It takes wisdom, design and diligence. That’s why it takes experienced experts. Like Banc Consulting Partners. With nearly 20 years’ experience, Banc Consulting Partners is the leader in BOLI design, analysis, compliance and plan service. We’re endorsed by the Ohio Bankers League and have earned the trust of more community banks than any other firm in the country. So when you want the best for your BOLI portfolio and a meaningful, long-term relationship with the advisor who provides it, talk to an expert. Talk to Lou Moore at Banc Consulting Partners. Because when it comes to BOLI, experience counts.

2035 Crocker Road, Suite 103, Westlake, OH 44145 | www.bancconsultingpartners.com

Lou Moore

MANAGING PRINCIPAL

440.356.8860 PHONE 216.789.8889 MOBILE 440.730.3131 FAX lmoore@yourbankpartner.com