Official Publication of the COMMUNITY BANKERS ASSOCIATION of ILLINOIS
January 2018 BanknotesVolume 44 • Issue 1
CBAI Welcomes First New President SINCE 1975
CBAI Welcomes First Women in Community Employee Benefit New President Since 1975 Banking Conference Partners Now Available page 11 page 20 page 24
Community Bankers Association of Illinois
Executive Committee CBAI Past Chairmen CBAI Legislative + chairman - Gregg Roegge, + Bill Wubben, Apple River State Bank Consultant Rushville State Bank
Board of D irectors & S taff
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Community Bankers Association of Illinois January 2018
11 25 29 features
CBAI Welcomes First New President Since 1975 11 Are Your IRR Assumptions Going Up in Smoke? 12 CBAI Leadership for 2018 13 Career Development Division Fall Meeting 19 Women in Community Banking Conference 20 Employee Benefit Partners Now Available to CBAI Member Banks 24 Consumer Lending Institute 25 Buy-in by Degrees: Five Ways to Bolster Your Bank’s Cybersecurity Awareness 26 LIBOR’s Last Call 29 departments
Foundation Report 33 Legal Link 34 Member News 35 In Memoriam 36 Coming Attractions 37 Staff News 38 Welcome New Members 38
Published for Editor To submit editorial or Published by Community Bankers Andrea Cooney Cusick request information — E&M Consulting, Inc. Association of Illinois email [email protected] 1107 Hazeltine Boulevard, Director of Publishing 901 Community Drive p. 217/529-2265 Suite #350 Krystie Dovenmuehler Chaska, MN 55318 Springfield, IL 62703-5184 For information Design Manager p. 800/572-0011 p. 217/529-2265 regarding advertising Jeremy Davis f. 952/448-9928 p. 800/736-2224 please contact Marc www.emconsultinginc.com www.cbai.com Layout & Design at 800/572-0011 or Molly Collman [email protected]
Please note: Editorial and contents of this magazine reflect the records of the Community Bankers Association of Illinois (CBAI). CBAI has done its best to provide useful and accurate information, but please take into account that some information does change. E&M Consulting, Inc., publishers, and CBAI take no responsibility for the accuracy of the information printed, inadvertent omissions or printing errors. We take no responsibility regarding representations or warranties concerning the content of advertisements of products/services for a particular use, including all information, graphics, copyrighted materials, and assertions included in the advertisements. The reader is advised to independently check all information before basing decisions on such information. 6 www.cbai.com + Banknotes
Community Bankers Association of Illinois
CBAI Welcomes First New President Since 1975
hen founded in 1974, the Independent years of governmental relations experience to the Association’s Community Banks in Illinois (ICBI) was a team. His experience prior to joining CBAI was in both the volunteer-run organization. One year later, public and private sectors. its board of directors hired the first paid employee, Bob Wingert, who was named its During a tenure that spanned the worst financial crisis since the executiveW director. Fast-forward to the present-day organization, Great Depression, Lounsberry has led a CBAI lobby team that now named Community Bankers Association of Illinois (CBAI), has effectively promoted legislation at both the state and federal and the association is poised for the first successor to Wingert, levels that benefits community banking. Kraig Lounsberry, who assumed the role of association president In his speech to the CBAI convention delegation on September January 1st. 15th, Wingert asserted, “Kraig is a great choice for many A committee of bankers was tasked with evaluating potential reasons, including high ethical standards, commitment to the candidates for the position of CBAI president and making a truth, dedication to the Association mission and the cause of recommendation to the board of directors. Members of that community banking, and his keen intellect and common-sense committee were Mary Sulser, Buena Vista National Bank, approach to management. He will ably lead the Association to Chester; Mark Field, The Farmers Bank of Liberty; Shawn many more productive and successful years of operation.” Davis, CNB Bank & Trust, N.A., Carlinville; Gregg Roegge, Lounsberry earned a master’s of arts degree in political studies Rushville State Bank; and Rick Jameson (Chairman), North from Sangamon State University, Springfield (now University of Central Bank, Hennepin. Illinois, Springfield), and a bachelor of arts degree in economics Jameson commented, “Committee members were very and political science from Knox College in Galesburg. He impressed by Kraig’s enthusiasm, willingness to learn and his resides in rural Pawnee with his wife, Debbie, and children, obvious rapport with the staff. He is well-respected in the Ashley and Jackson. lobbying arena and has been establishing connections in the “I am honored and humbled that the CBAI’s leadership and trade association executive network for many years. These membership have placed their faith in me to succeed Bob Wingert attributes contributed to the Committee’s determination as only the second president in the history of the association,” that Kraig will provide a quality leadership solution for the Lounsberry stated. “Over the past 10 years I’ve gained a keen Association that will serve us well for many years to come.” understanding of the many issues affecting community banking Lounsberry joined CBAI on July 1, 2008, as senior vice and I’ve developed a tremendous appreciation for and dedication president of governmental relations, bringing more than 25 to the mission of this association. I look forward to promoting our worthy mission for many years to come.” n
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Are Your IRR Assumptions Going Up in Smoke?
Lester Murray, Associate Partner, Financial Strategies Group, The Baker Group, Oklahoma City, OK
fter the mortar sets on that new fireplace flue, agencies of all stripes have reminded everyone, time and again, the only way to know if it’s really going to work that assumptions development needs to be institution specific is to build a fire and see where the smoke goes. and empirically justifiable. Some may have noticed that most of Some might not immediately discern how that their attention has been directed toward the behavior of non- relates to interest rate risk, but the comparison maturing deposits (NMD). Or rather, the behavior of the owners Ahelps illustrate some similar circumstances. All the assumptions of all those non-maturing deposits. Particularly those assumptions about how those rate-sensitive elements on the balance sheet governing their pricing behavior. One can understand the concern will react to higher interest rates never get tested until the fire since it’s not uncommon for NMD balances to represent more gets going; until rates actually rise. than half of total assets. Because of their prominent position on community bank balance sheets, even small variations in A False Sense of Security? behavior can translate into sizeable “misses” when comparing Since the first rate hike in almost 10 years was implemented projected results to actual outcomes. Regulators understand this by the Federal Open Market Committee at the end of 2015, and have quite reasonably encouraged the sensitivity testing, or a handful of increases to the Fed Funds Target Rate have stressing, of NMD related assumptions. followed and it’s possible, even probable, there will be more. So, now that the Zero Interest Rate Policy of the Fed is a couple of Receiving less attention are some of the pricing assumptions years behind us, it may be a good time to look and make sure governing the behavior of interest-earning assets, like investments the smoke is actually moving up the chimney. Or, in the context and loans. The preponderance of community banks’ modelling of interest rate risk, has the actual behavior of the balance sheet exercises assumes asset pricing betas of at least 80% and often played out as your assumptions predicted? 100%. Additionally, the timing lag between the change in market rates and the manifestation of that change on banks’ lending Many risk managers probably feel like they already have an rates is often very short or non-existent. It might be instructive, answer to that question. Maybe they do; maybe they don’t. now that several increases in the prime rate have occurred, to These are the risk managers that point to the “spot-on” results compare the current schedule of lending rates at your bank of their last several years of backtesting. After all, the purpose to the rates that were in place before the Fed began its rate of backtesting is to compare projected results to actual results, normalization process. As critical as NMD pricing assumptions and if one’s assumptions are materially “off,” those backtesting are to the accurate projection of interest expense, the validity and results won’t be so “spot-on” will they? But, what if there’s reasonableness of asset pricing assumptions are just as crucial nothing to actually backtest? Since the Fed Funds rate became to the accurate projection of interest income. If your current zero-bound in December of 2008, never have rates been so low lending rates are little changed from their pre-normalization for so long. Add to that the historic lack of volatility, and we levels, it might be time for the ALCO to re-evaluate some of end up backtesting Ground Hog’s Day: the same thing over and those assumptions before you start smelling smoke. n over. While certainly not without value, it’s probably safe to say that the interest rate environment since 2009 has not really put The Baker Group is a preferred service provider of Community those assumptions to the test. BancService Corporation (CBSC). Murray may be contacted
Check Those Smoke Detectors at 800/937-2257 or [email protected]. This is a concern that isn’t new. Since the FFIEC Interagency Advisory on Interest Rate Risk was published in 2010, regulatory
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CBAI Leadership for 2018
WOULD YOU LIKE TO BE MORE INVOLVED IN CBAI AS A BANKER VOLUNTEER? Contact Andrea Cusick at 800/736-2224 or [email protected] and let us know in what way you would like to participate!
BOARDS OF DIRECTORS OF CBAI AFFILIATED ORGANIZATIONS On page four of Banknotes the names of those bankers who serve on the CBAI board of directors appear. Here is a listing of the members of the affiliated boards of directors and CBAI standing committees for 2017-18. Their time, consideration, and thoughtful participation are most appreciated.
CCL denotes Certified Community Lender — a designation created to professionalize the position of a community-bank lender
Community Bancservice Corporation Gregg Roegge, Rushville State Bank Board of Directors Alan Stremlau, Illini State Bank, Oglesby (Tonica) Tony Sisto, Chairman, STC Capital Bank, St. Charles Jim Weast, Warren-Boynton State Bank, New Berlin Matt Beavers, First National Bank of Pana Kraig Lounsberry, Burnel Beckman, Dieterich Bank, N.A. (Effingham) Community Bankers Association of Illinois, Springfield Andrew Black, Princeville State Bank Jeff Bonnett, Havana National Bank Cbai Foundation For Community Banking Sheila Burcham, Community Trust Bank, Irvington Board of Directors Mark Clark, Federated Bank, Onarga Kim McKee, Chairperson, North Central Bank, Hennepin (Ladd) Patty Clarke, First National Bank of Raymond Jeff Bonnett, Havana National Bank Will Coolley, Longview Capital Corporation, Newman Tracy Downs, German-American State Bank, German Valley Mike Copeland, Fairfield National Bank Ryan Heiser, The Fisher National Bank Jo David Cummins, Doug Parrott, State Bank of Toulon Community First Bank of the Heartland, Mt. Vernon Erik Schelling, PeopleFirst, Joliet Shawn Davis, CNB Bank & Trust, N.A., Carlinville Jason Semple, Dieterich Bank, N.A. (Effingham) Jim Dingman, BankORION Ron Shambaugh, Best Hometown Bank, Collinsville John Dosier, First Southern Bank, Marion (Carbondale) Kraig Lounsberry (ex officio), Doug Dove, Shelby County State Bank, Shelbyville Community Bankers Association of Illinois, Springfield Mike Estes, The Fisher National Bank Chris Gavin, Midwest Bank, Monmouth Cbai Career Development Division Chris Gordon, Community State Bank, Galva (Franklin) Board of Directors Dan Graham, Flora Bank & Trust Ryan Heiser, CDD Chairman, Kerry Hoops, CCL, German-American State Bank, German Valley The Fisher National Bank (Mahomet) Mike Kelley, Community BancService Corporation, Springfield Shellie Astin, First State Bank of Campbell Hill Gina Lotter, First National Bank in Staunton Jennifer Babashka, Durand State Bank David Loundy, Devon Bank, Chicago Didi Drake, Bank of Chestnut Mike Mahair, State Street Bank and Trust Co., Quincy JoAnna Engels, Peru Federal Savings Bank Tom Marantz, Bank of Springfield Haley Guisti, North Central Bank, Hennepin (Ladd) Chad Martin, Goodfield State Bank Bruce Luthy, Buena Vista National Bank, Chester Eric McRae, Jami McElroy, First National Bank of Raymond First Mid-Illinois Bank & Trust, N.A, Mattoon (Decatur) Erik Schelling, PeopleFirst Bank, Joliet David Pirsein, First National Bank in Pinckneyville Eric Seitzinger, The Peoples State Bank of Newton Mike Radliff, First National Bank, Vandalia J.T. Thoenen, Rushville State Bank
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Committees And Subcommittees Legislation & Regulation Committee Of CBAI Affiliated Organizations Tony Sisto, Chairman, STC Capital Bank, St. Charles Jim Ashworth, CNB Bank & Trust, N.A., Carlinville Audit Committee Kevin Beckemeyer, Legence Bank, Eldorado Tony Sisto, Chairman, STC Capital Bank, St. Charles Joy French Becker, Farmers State Bank & Trust Co., Jacksonville Tom Marantz, Bank of Springfield Sheila Burcham, Community Trust Bank, Irvington David Pirsein, First National Bank in Pinckneyville Frank Cerrone, Pan American Bank, Chicago Gregg Roegge, Rushville State Bank Betty Chow, Pacific Global Bank, Chicago John Dorsey, First National Bank in Staunton (Maryville) Communications Committee Keith Douglass, Tompkins State, Avon (Galesburg) Doug Parrott, Chairman, State Bank of Toulon Doug Dove, Shelby County State Bank, Shelbyville Cathy Cox, First National Bank & Trust Co., Rochelle Tracy Downs, German-American State Bank, German Valley Quint Harmon, Pioneer State Bank, Earlville Mike Estes, The Fisher National Bank Nichelle Morey, State Bank of Toulon (Kewanee) Mark Field, The Farmers Bank of Liberty Mark Rewerts, State Bank of Toulon Larry Franklin, CNB Bank & Trust, N.A., Carlinville (Alton) Valerie Stocks, Apple River State Bank (Warren) Dan Graham, Flora Bank & Trust Todd Grayson, South Central Bank, N.A., Chicago Education Committee Colleen Henkel, The First National Bank in Amboy David Stanton, Chairman, PeopleFirst Bank, Joliet Dennis Hesker, First National Bank of Okawville Dale Boyer, Arcola First Bank Mary Jo Homan, Chester National Bank Darren Bozinoski, First Neighbor Bank, N.A., Toledo (Mattoon) Rick Jameson, North Central Bank, Hennepin Mindy Combs, First Southern Bank, Marion Gerry Johnson, Grand Ridge National Bank Beth Cotner, Scott State Bank, Bethany Jason Knoedler, Bank of Springfield Shari Ferry, First National Bank in Staunton Steve Koehn, First Community Bank & Trust, Beecher Larry Franklin, CNB Bank & Trust, N.A., Carlinville Jeff Longlett, North Adams State Bank, Ursa Dee Froneyberger, Tom Marantz, Bank of Springfield Community First Bank of the Heartland, Mt. Vernon Tim Minor, Glenview State Bank Joe Grant, National Bank of St. Anne Chris Phelps, Scott State Bank, Bethany (Niantic) Kelly Green, Southern Illinois Bank, West Frankfort David Pirsein, First National Bank in Pinckneyville Gwyn Helton, Shelby County State Bank, Shelbyville Dave Rennegarbe, First National Bank of Okawville Rick Klinedinst, MidAmerica National Bank, Canton Bret Robinson, Farmers State Bank of Western Illinois, Viola Josh Kuntz, Goodfield State Bank Gregg Roegge, Rushville State Bank Angela Lampley, The Bank of Herrin Preston Smith, The First National Bank, Mattoon Lloyd Murphy, TNB Bank, Tuscola Bill Smith, HomeStar Bank and Financial Services, Manteno Mike Renner, Bank of Yates City Hank Stephens, Dieterich Bank, N.A. (Effingham) Doug Smith, Farmers National Bank of Griggsville Jeff Sterling, Amy Thiede, CCL, Prairie Community Bank, Marengo German-American State Bank, German Valley (Pecatonica) Dale Tieman, Peru Federal Savings Bank Mary Sulser, Buena Vista National Bank, Chester Julie Welborn, The Fisher National Bank Susan Volkert, Bank of Montgomery Bill Wubben, Apple River State Bank Finance Committee Jeff Bonnett, Chairman, Havana National Bank Membership Committee Kevin Beckemeyer, Legence Bank, Eldorado Dan Graham, Chairman, Flora Bank & Trust Mike Kelley, Community BancService Corporation, Springfield Andrew Black, Princeville State Bank Tom Marantz, Bank of Springfield Kerry Hoops, German-American State Bank, German Valley David Pirsein, First National Bank in Pinckneyville Bryan Marsh, The First National Bank in Carlyle Gregg Roegge, Rushville State Bank Patrick McShane, American Metro Bank, Chicago Tony Sisto, STC Capital Bank, St. Charles Mike Radliff, First National Bank, Vandalia Kraig Lounsberry, Brian Schroeder, First Farmers Bank, Minier Community Bankers Association of Illinois, Springfield Jim Weast, Warren-Boynton State Bank, New Berlin
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Pension Committee Agriculture Subcommittee Gregg Roegge, Chairman, Rushville State Bank Gregg Roegge, Chairman, Rushville State Bank Jeff Bonnett, Havana National Bank Richard Anderson, Anderson State Bank, Oneida Rick Hiatt, Hiatt Enterprises, Pontiac Kevin Beckemeyer, Legence Bank, Eldorado Mike Kelley, Community BancService Corporation, Springfield Joe Conroy, CCL, First Farmers State Bank, Minier Ron Minnaert, State Bank of Graymont Mike Estes, The Fisher National Bank Kraig Lounsberry, Robert Heckler, Shelby County State Bank, Shelbyville Community Bankers Association of Illinois, Springfield Amy Logsdon, National Bank of Petersburg Tom Marantz, Bank of Springfield Special Events Committee John Marshall, Bank of Pontiac Shawn Davis, Chairman, CNB Bank & Trust, N.A., Carlinville Tony McLain, Gifford State Bank Ryan Beckemeyer, Legence Bank, Eldorado Rob Murray, Citizens State Bank of Milford Sheila Burcham, Community Trust Bank, Irvington Gerry Reed, First National Bank of Brownstown Travis Clem, South Porte Bank, Marion David Rennegarbe, First National Bank of Okawville Kevin Day, State Bank of Waterloo Doug Smith, Farmers National Bank of Griggsville Steve Feith, Waterman State Bank Eric Stalter, The Fisher National Bank Carol Jo Fritts, First Neighbor Bank, N.A., Toledo Rob Sullivan, Oak Bank, Chicago Rick Hiatt, Hiatt Enterprises, Pontiac John Williams, Jacksonville Savings Bank Mary Jo Homan, Chester National Bank Wayne Wrage, Bank of Yates City Kim McKee, North Central Bank, Hennepin (Ladd) Bill Wubben, Apple River State Bank Lloyd Murphy, TNB Bank, Tuscola Cameron Ohlendorf, Ag Lenders’ Conference Subcommittee First Community Bank and Trust, Beecher Doug Smith, Chairman, Farmers National Bank of Griggsville Lori Pieper, Community State Bank, Galva Jennifer Beard, Farmers State Bank, Elmwood Doug Smith, Farmers National Bank of Griggsville Douglas Blunier, State Bank of Toulon Alan Stremlau, Illini State Bank, Tonica Quint Harmon, Pioneer State Bank, Earlville Julie Welborn, The Fisher National Bank Kerry Hoops, CCL, German-American State Bank, German Valley Alan Hoskins, Legence Bank, Eldorado Strategic Planning Committee Tom Schnelt, CNB Bank & Trust, N.A., Carlinville (Carollton) Gregg Roegge, Chairman, Rushville State Bank Kevin Beckemeyer, Legence Bank, Eldorado Chicago-Area Education Subcommittee Jeff Bonnett, Havana National Bank Amy Thiede, CCL, Shawn Davis, CNB Bank & Trust, N.A., Carlinville Chairperson, Prairie Community Bank, Marengo Mike Estes, The Fisher National Bank Pamela Aho, Glenview State Bank Dan Graham, Flora Bank & Trust Maribeth Chamber, Burling Bank, Chicago Todd Grayson, South Central Bank, N.A., Chicago David Loundy, Devon Bank, Chicago Ryan Heiser, The Fisher National Bank (Mahomet) Maliea Penuela, State Bank, Wonder Lake Dennis Hesker, First National Bank of Okawville Jana Rettig, Providence Bank & Trust, South Holland Rick Jameson, North Central Bank, Hennepin Janice Weston, Washington Savings Bank for Savings, Chicago Gerry Johnson, Grand Ridge National Bank Mike Kelley, Community BancService Corporation, Springfield Community Bankers School Subcommittee Tom Marantz, Bank of Springfield Darren Bozinoski, Chairman, Doug Parrott, State Bank of Toulon First Neighbor Bank, N.A., Toledo (Mattoon) David Pirsein, First National Bank in Pinckneyville Michael Gill, Flora Bank & Trust Sam Scott, Scott State Bank, Bethany Neil Gurnsey, National Bank of Petersburg Tony Sisto, STC Capital Bank, St. Charles Candy Hanlin, MidAmerica National Bank, Canton Preston Smith, The First National Bank, Mattoon Brian Hout, TrustBank, Olney David Stanton, PeopleFirst Bank, Joliet Matt Jones, Prairie State Bank & Trust, Springfield Mary Sulser, Buena Vista National Bank, Chester Melissa Laue, The First National Bank, Mattoon Kraig Lounsberry, Adam Luechtefeld, First National Bank of Okawville Community Bankers Association of Illinois, Springfield Luke Sinclair, West Central Bank, Ashland Bill Wubben, Apple River State Bank Brock Thompson, Petefish, Skiles & Co., Virginia
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Education Auditing Subcommittee Angela Lampley, Chairperson, The Bank of Herrin Audrey Brueggeman, Farmers & Merchants National Bank, Nashville Lisa Frerking, Citizens Community Bank, Mascoutah (Freeburg) Chris Light, First Neighbor Bank, N.A., Toledo
Education Marketing Subcommittee Mindy Combs, Chairperson, First Southern Bank, Marion Tracy Bedeker, First Federal Savings, Ottawa Danielle Honn, Petefish, Skiles & Co. Bank, Virginia Dena McDonald, First Farmers State Bank, Minier (Bloomington) Kim McKee, North Central State Bank, Hennepin (Ladd) Ann Scholtes, Bank of Pontiac Shelley Singleton, CNB Bank & Trust, N.A., Carlinville Angela Truluck, First National Bank of Steeleville
Education Operations And Technology Subcommittee Julie Welborn, Chairperson, The Fisher National Bank Tanya Cowan, Buena Vista National Bank, Chester Rebekah Emery, Farmers National Bank, Prophetstown Mark Field, The Farmers Bank of Liberty Dan Fischer, Better Banks, Bartonville John Hampson, American Enterprise Bank, Buffalo Grove Ryan Heiser, The Fisher National Bank Matt High, Citizens State Bank of Milford Gerry Johnson, Grand Ridge National Bank Phyllis Burress Meek, Preferred Bank, Casey Nancy Mueller, Scott State Bank, Bethany Joe Peterson, Morton Community Bank Jake Pietkiewicz, First National Bank in Paxton Craig Potthast, First National Bank in Staunton Don Roch, Havana National Bank Matt Turley, CNB Bank & Trust, N.A., Carlinville
Women In Community Banking Subcommittee Beth Cotner, Chairperson, Scott State Bank, Bethany Jennifer Beard, Farmers State Bank, Elmwood Ramona Knoblett, First Robinson Savings Bank, N.A. (Vincennes, IN) Teresa Lovekamp, Midland Community Bank, Kincaid (Taylorville) Lori Pieper, Community State Bank, Galva Valerie Stocks, Apple River State Bank (Warren) Amy Thiede, CCL, Prairie Community Bank, Marengo n
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18 www.cbai.com + Banknotes Community Bankers Association of Illinois
General speaker Hershberger addressing the participants. Didi Drake, CDD Career Banker of the Year.
CDD Fall Meeting Attendees Escape the Mundane The entire group of CDD members shown after the Escape Room challenge!
early 50 members gathered for the 2017 Fall also reported. The results of the membership campaign were Meeting of CBAI’s Career Development also announced during the luncheon. Division (CDD) on October 11th at the Marriott Hotel & Conference Center, Bloomington. The Ryan Heiser, CDD chairman and group 9 director with evening prior to the meeting, CDD members The Fisher National Bank, conducted the election of even- Nparticipated in a fun, team-building exercise—an Escape Room. numbered group directors. Members were then updated on Teams worked together in groups to try to escape a themed the status of CDD regarding membership and finances. Heiser room in less than an hour. Two teams made it out with just a reported that dues from the nearly 200 members remain the few minutes to spare! largest source of income; however, the Fall and Spring Meeting make a significant fiscal contribution. He also emphasized that This year’s Fall Meeting began with the popular networking CDD board members have controlled expenses and made a session, providing attendees with the opportunity to participate significant contribution to the strength of CBAI. in roundtable discussions by area of banking. Tom Hershberger with Cross Financial Services presented the first general During this meeting, the Economic Education Award was session entitled, “Recipe for an Effective Sales Environment.” also bestowed. Amy Thiede, Prairie Community Bank, This session was followed by Kathleen Craig of HT Mobile Marengo, was recognized as the CDD 2017 Economic App and her presentation, “Building Your Financial Literacy Educator. The CDD Career Banker of the Year was also Program - Youth Strategy - PART 1.” announced with Didi Drake, Bank of Chestnut, receiving this prestigious award. The Annual Business Meeting Luncheon featured an address from CBAI Chairman, Gregg Roegge. CDD’s current The afternoon agenda started with a continuation of Kathleen’s membership, financial issues, and convention activities were Craig’s session and Tom Hershberger closed out the conference with his session, “Eight Habits of Successful Bank Managers.” n
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Participants benefit from the community banking “hot topic” roundtables which provided the opportunity to share issues and ideas with women from across the state.
Attendees “Woman Up!” at CBAI’s 11th Annual Women in Community Banking Conference
n November 14, CBAI held its 11th annual “Aimee was an amazing speaker. This is my first time here, but Women in Community Banking I will be coming back,” Martin declared. Conference at the Northfield Inn and Conference Center in Springfield. Participants Next on the agenda were community-banking roundtable from all areas of banking throughout Illinois discussions, where attendees had the chance to share ideas, Obenefitted from expert speakers, pertinent and informative issues, and concerns regarding “hot topics” that keep them topics, peer networking, and a mini-expo. This one-day up at night. One of several networking opportunities, the roundtables are always a valuable benefit to attendees. conference, sponsored by the Federal Home Loan Bank of Chicago, was developed by a committee of female community- Closing out the morning’s education was a session with bank professionals who shaped the agenda to address top Martha Lehman of SmithAmundsen LLC, who shared concerns facing women professionals, as well as pertinent effective communication skills that create successful leaders. banking issues for community banks. The luncheon speaker, Gregg Roegge, CBAI chairman and The conference was kicked off with a thought-provoking president and CEO of Rushville State Bank, provided an update on the Association and shared his pride in the session by Aimee Cohen, founder of Woman Up! and Cohen community-banking profession. Career Consulting, entitled “Woman Up: Overcome the Seven Deadly Sins That Sabotage Your Success,” sharing Keeping with the conference’s theme of elevating professional practical strategies on defeating self-sabotage and taking image, the next speaker, Karen Cunningham, founder control of your career. of Image Forward, shared tips on creating a professional wardrobe in tune with your individual skin tone, body shape, “I absolutely loved Aimee Cohen’s presentations!” said Paula and style personality. , Milling, Bank of Springfield. “She provided very insightful Krista Ammons of Data Center, Inc. content and had a great delivery,” she continued. “I really followed up with insightful information on how to portray the proper professional image on social media, thereby creating a enjoyed the conference!” Shelly Martin, CNB Bank & personal social brand inside and outside of the bank. Trust, N.A., Carlinville, stated, sharing Milling’s sentiment.
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Audience members enjoy an interactive session at the conference.
Cohen closed the conference with a session entitled, “Elevate LeVora, agreed, noting that the pre-conference social was Your Executive Presence and Create a Leadership one of her favorite aspects of the conference. “This was an Pipeline at Your Bank,” which provided attendees insights excellent time to meet new banking contacts and share ideas on how creating a powerful and polished image is a valuable and network with ladies within community banking.” tool for career success. “All of the topics discussed were This year, attendees were invited to “dress down” for the relevant to my work environment,” said Kelly Wood, CNB conference for a minimum $5 donation to the Susan G. Bank & Trust, N.A., Carlinville. Komen for the Cure breast cancer foundation. The event also A mini-exposition featuring the latest in products and services included a basket raffle with items donated by CBAI’s Women designed for community banks rounded out the day. “I always in Community Banking Sub-Committee. Funds raised from take away great tips with me!” said Valerie Stocks Apple the “dress down” opportunity and basket raffle resulted in a River State Bank. “The social event on Monday night was $400 donated to Susan G. Komen for the Cure. fun and interactive and the image, wardrobe and perception pieces really resonated with the audience.” Women in Community Banking Sub-Committee *Chairperson Beth Cotner, Scott State Bank, Bethany An evening social activity was also offered the night before *Jennifer Beard, Farmers State Bank of Elmwood the conference. Held at the Northfield Center, participants Ramona Knoblett, First Robinson Savings Bank, N.A. enjoyed a meal of heavy appetizers and a five-round Music *Teresa Lovekamp, Trivia Night that also included lip-sync and dance contests. Midland Community Bank, Kincaid (Taylorville) Emceed by BPG Entertainment, the highly engaging Lori Pieper, Community State Bank, Galva and interactive event not only provided participants with Valerie Stocks, Apple River State Bank (Warren) opportunities to network with their peers from across the *Amy Thiede, Prairie Community Bank, Marengo state, but proved to be a fun girl’s night that left attendees raving. “The social event was amazing,” said Heather Jones, *denotes member of CBAI Career Development Division CNB Bank & Trust, N.A., Carlinville. Her coworker, Angie
Banknotes + January 2018 21 Community Bankers Association of Illinois
EXHIBITING FIRMS Attendees gain professional-image style tips from Karen Cunningham of Image Forward BancMac – Community Banc Mortgage Corporation during the exhibit hall time. 3200 West Iles Avenue Springfield, IL 62711 Secondary Market Corresponding Lending Program Stephanie Washko, Mary Sexton, Erika Guymon 888/821-7729
CBAI Department of Communications 901 Community Drive Springfield, IL 62703 Andrea Cusick 800/736-2224
Community BancService Corporation 901 Community Drive Springfield, IL 62703 Access to Top Quality Products and Services Mike Duke 217/529-2265
Data Center, Inc. (DCI) 20 West Second Avenue Hutchinson, KS 67501 Core Processing Software Krista Ammons 620/931-0722
Harland Clarke 15955 LaCantera Parkway San Antonio, TX 78256 CBSC Preferred Provider of Check Printing, Aimee Cohen’s insightful and informative sessions Direct Marketing & MCIF show attendees how to take Bruce Turyna charge of their careers. 210/697-8888
Image Forward 3800 Woodhaven Drive The Monday night Music Trivia Social had Springfield, IL 62712 attendees on their feet and having a blast. Professional Image Coaching Karen Cunningham 217/816-6399
SmithAmundsen LLC 150 North Michigan Avenue Chicago, IL 60601 Law Firm Amber Bishop 312/455-3804 n
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Community Bankers Association of Illinois
Employee Benefit Partners Now Available to CBAI Member Banks
Mike Mahorney, Senior Benefits Consultant, Community BancInsurance Services, powered by Arthur J. Gallagher
hrough Community BancInsurance Services, their choices, making connections between core and voluntary powered by Arthur J. Gallagher, CBAI members now benefits and ensuring your employees are well-equipped to have access to an exclusive program in conjunction make benefit decisions that fit individual and family needs. with MetLife. As employers continue to re-evaluate their employee benefit plans, they constantly search We realize that a one-size-fits all approach just does not work. Tfor ways to control benefits costs, while attracting and retaining A single employee with no children has different needs than a employees with a valuable-benefits offering. single parent or a family. Likewise, a young healthy employee may have different needs than an older worker. CBAI members now have access to discounted pricing for Dental, Vision, Voluntary Life and Home and Auto insurance. Other As benefit choices become more complex, our system helps non-medical lines are available, too, such as Basic Life, Short and your employees understand their benefit choices, evaluate Long-Term Disability. In addition to these benefits, members also their options and complete their enrollment. The better have access to a benefits-administration system at no cost which your employees understand their benefits, the more they can save your HR team valuable hours while simplifying and will appreciate them and the investment you have made in n enhancing your employees’ enrollment experience. providing quality benefits.
Regardless of employee size, technology is playing a greater To learn more about how these offerings can enhance your role in the employee benefits realm. Connecting the dots on employee benefits package, please contact the author at the benefits you offer employees is key to maximizing the 217/547-2048 or [email protected]. CBIS, powered value of your benefits budget. Our customizable benefits- by Arthur J. Gallagher, is a preferred service provider of administration system does just that, educating employees on Community BancService Corporation (CBSC).
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Consumer Lending Institute
The highly successful three-day Consumer Lending Institute, which met October 24-26, 2017 in the SHAZAM Education Center at CBAI Headquarters in Springfield, attracted 27 bankers. David Kemp, president and founder of Bankers Management Inc. of Atlanta, GA led the instruction. Tim Tedrick, partner from WIPFLI’s Sterling office taught the unit dealing with regulatory compliance.
Row 1 (l-r) Row 3 (l-r) Stacy Gregory, Bank of Bluffs Devin Woods, German-American State Bank, German Valley* Tammy Hill, Pioneer State Bank, Earlville Gary Nation, The First National Bank of Barry Nicolle Perino, Bank of Pontiac Jon Harre, The Iuka State Bank Ashley Lewis, Arcola First Bank Courtney Dietz, Ipava State Bank Beth Jones, The First National Bank of Beardstown Krista Snyder, State Street Bank and Trust Co., Quincy Jennifer Weder, The First National Bank of Beardstown Cheryl Morman, Citizens Bank of Edinburg Karlee Aeschleman, Washington State Bank Sam VenHuizen, Citizens State Bank, Lena Connor Pollmann, Farmers State Bank of Hoffman Row 2 (l-r) Torrey Wolf, The Peoples State Bank of Newton Wyatt Logan, Bank of Stronghurst Joe Breckenridge, Bank of Yates City Ashley Ralph, State Bank of Graymont* Ross Martin, First Robinson Savings Bank, N.A. Melissa Shafer, Scott State Bank, Bethany Nancy Obert, The First National Bank of Barry Not Pictured Stacie Fortune, Buena Vista National Bank, Chester* Nancy Holden, Gifford State Bank n Dillon Rushing, The First Bank & Trust Company of Murphysboro Jack Wallace, First Federal Savings Bank of Champaign-Urbana Brandon Gurley, Casey State Bank David Kemp, Bankers Management, Inc., Atlanta, GA * Members of CBAI’s Career Development Division (CDD)
Banknotes + January 2018 25 Community Bankers Association of Illinois
Buy-in by Degrees: Five Ways to Bolster Your Bank’s Cybersecurity Awareness
Emily Larkin, Chief Information Security Officer, Sageworks, Raleigh, NC
or many financial institutions, security part of your culture? How do tactic but a reality check and an edu- information-security aware- you get buy-in across departments and cation for those focused on growth and ness programs are a regulatory leadership? Getting started often equals financials. Many assume information requirement. Yet requirement the hardest part for financial institutions. security lives with the IT team and that Fdoesn’t by any means equal enjoyment: Below are five proven ways to kick up strong firewalls will protect the company. They represent a major pain point for buy-in and acceptance: A focused 15-minute presentation on most and are frequently seen as an annual risks and vulnerabilities at the employee obligation. Their value is often difficult 1. Start at the top. Board and executive level will quickly inform executive and to quantify; thus they get little funding or buy-in as part of a successful informa- board perceptions. This presentation attention. But once implemented, these tion-security awareness program are a could outline: programs mount an invaluable defense given. But this can pose challenges in • regulatory requirements for an informa- against internal and external cyberattacks. some financial institutions. Find what tion security program drives your leadership team—which in • the average cost of a breach Options abound to pay for security aware- most cases is revenue. Then, get the • the reputational risk, and ness materials or consultants to deliver board’s attention by outlining the poten- • examples of the current vulnerabilities them—but that only covers part of the tial financial impact of a cybersecurity within your institution. challenge. How do you make information incident and breach. This is not a scare 2. Make information security part of every employee’s orientation. A formal introduction to an information-security team member, and hands-on training, will go far. This gives new employees a face and person to link with the infor- mation security program. Make sure information security awareness perme- ates company culture. Encourage new employees to report any suspicious activity and review the protocol for reporting potential incidents. Assure them that no question or incident is too minor to report. Lastly, take employees by the information security office—and introduce them to the team. Demystify information security and make it part of the welcome package. Employees will appreciate meeting new people and better understanding information secu- rity’s importance at your institution.
26 www.cbai.com + Banknotes Community Bankers Association of Illinois
3. Put information security on the agenda at staff and team meetings. Speaking to and sharing news with a captive audience creates positive energy around cybersecu- rity awareness and encourages participa- tion. Topics can include: • recent vulnerabilities • projects in process • new controls in place, and most importantly, • thanking users for their input and vigilance. clear in advance as well. That said, show quizzes; this also ensures accountability the percentage of users who “bit on the and easy tracking. Partial participation We’ve found that our users respond to phish” and how they could’ve spotted it. is not an option. So how do you make it statistics and data. Just recently, we pre- This benefits everyone. We do this at staff happen? Set expectations up front with sented the number of threats and phishing meetings and set goals for the next quar- the initial delivery of annual training, then attempts our systems blocked in a month. ter’s phishing test. We’ve seen a dramatic reach out to non-compliers with a friendly Employees like to know they are part of drop in the number of employees will- nudge or reminder when they miss the a company committed to protecting the ing to open suspicious emails. Phishing deadline. This typically motivates most overall business. tests also allow you to exercise incident employees. Approach the inevitable strag- response plans and better understand glers in person and ask when they will 4. Exercise your information-security pro- your employees’ comfort level in report- complete the tasks. As a last resort, sus- gram. Involving users represents a very ing suspicious activity. You can then take pend the employee’s email and/or chat effective way to raise cyber awareness. test data, tailor training for teams that fall account until they finish annual training. Phishing tests are a great example. A below the company average and improve This may sound harsh, but it works. Rest number of available tools will allow you your means for reporting outages. assured that employees will participate in to send a phishing email and track who a timely manner going forward. opens it, who clicks on the links or who 5. Require annual acknowledgement of opens the attachment and provides cre- your information security awareness pro- You can attain improved employee aware- dentials. Pick an influential figure in your gram. While a regulatory requirement for ness—and the good news is it can happen organization and send an email from some many companies, this also serves as a best quickly. The right strategies, along with variations of their email. Some may argue practice. The acknowledgement should consistent and timely delivery, get users on this sets up employees for failure—but include all employees—including execu- board to build your greatest defense. They this is exactly how attackers infiltrate tives and board members. For efficiency’s will appreciate your efforts, understand the institutions. Employees then benefit from sake, make it part of your annual informa- importance of protecting the institution seeing how easy it is to gain confidence tion-security policy and program-approval and its assets, and recognize it as part of with a short email from the “right” sender. process. This way you promote buy-in at everyone’s job. Remember: Information Most organizations post their leadership the top and receive required approvals— security begins with making sure your teams on their public website. This is all two vital components of a successful pro- workforce has all the right information. n a potential attacker needs to launch an gram. Countless ways exist to deliver and effective phishing campaign. track awareness training; online delivery Emily Larkin is the chief information security officer at Sageworks, where she helps manage that interacts with the user lets you reach all areas of the company in addition to setting Once you collect data from the exercise, remote employees in an especially effective, the strategic direction of the company’s security share it with the employees. Again, users efficient way. You can accomplish this via initiatives. She is responsible for managing love data and stats. Stress that you will company intranet or learning-management corporate information security, business continuity, disaster recovery and technology- not shame people by name; make this system that provides short post-training related audit and compliance activities.
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Community Bankers Association of Illinois
LIBOR: Last Call
David Kaminski, Partner, Saul Ewing Arnstein & Lehr, Chicago, IL
The Demise of Libor The Background of Libor The London interbank offered rate, more commonly known The origins of Libor can be traced to 1969, when a Greek as Libor, has been a fixture of global finance for nearly a half banker structured an industry-changing loan transaction with century and the benchmark interest rate in U.S. and global a group of lending institutions to provide the Shah of Iran with finance for at least 30 years. Libor is often referred to in the an $80,000,000 loan. The loan bore interest at a variable rate finance industry as “the world’s most important number.” Its adjusted periodically based on an average of each lender’s own use spans a vast array of financial and banking activities and cost of funds. This transaction was groundbreaking at the time products, ranging from syndicated international financings, for two reasons: (i) it was considered the first “syndicated” credit swaps and derivatives to floating rate municipal bonds, loan in which a group of lenders jointly shared the lending consumer debt and student loans, not to mention countless obligations and risks, and (ii) because multiple lenders were middle market revolving loans and mortgages. Indeed, it has involved, and the interest rate was to be periodically readjusted been estimated that Libor is used to determine the interest rate based on each bank’s cost of funds, the banks in the syndicate for about $350 trillion of financial products globally. had to establish and agree upon a uniform procedure in order to fairly and consistently determine the applicable rate from Yet, despite its heritage, pedigree and ubiquity, Libor will soon be time to time. In this deal, the parties agreed that a baseline replaced by an alternate index rate. Officials in London charged interest rate would be determined by periodically surveying with regulating Libor have announced that they will phase out each lender, who in turn would submit its cost of funds to the Libor by 2021 and replace it with another reference rate. deal arranger. Despite the obvious flaws and potential conflicts with such a system, this financing structure fueled exponential So, the question is: why is this happening, and what does it growth in corporate lending commonly known today as mean to you? syndicated lending.
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Responding to market demands for a uniform and reliable estimate of their interbank lending costs, the real-world sample method to determine average cost of funds for lending of transactions upon which such estimates were based was institutions, in 1986 the British Banker’s Association prohibitively too small for a reasonable statistical sampling. (“BBA”) developed Libor. Under the BBA’s system, each morning a group of 20 banks would self-report to the BBA A number of the world’s most prestigious banks and all- their respective estimated cost to borrow unsecured funds star bankers became entwined in the Libor rigging scandal, from each other in 5 different currencies across seven time which ultimately resulted in, among other things, significant periods (e.g., 30 days, 60 days, 90 days). This estimated financial penalties for large banking institutions and career average provided to the BBA from the 20 large banks was derailment for individual banking professionals. Ultimately, then published daily by the BBA as the effective Libor rate the banking industry regulators, and the BBA itself, recognized corresponding to the given Libor periods. In large part due that an interest rate benchmark based upon unregulated self- to the financial industry’s need for a universally recognized reported estimates from the very institutions having the most benchmark rate, this self-reporting estimate (basically an to gain from inaccurate reporting (whether overinflated or educated guess) which initially was adopted primarily for underinflated estimates, depending on the particular business sophisticated syndicated loans and then interest rate swaps, objective), coupled with the fact that the actual interbank loan later expanded to a plethora of financial products, eventually market is prohibitively small to obtain a reasonable statistical becoming the worldwide standard benchmark for setting sampling, is an inherently flawed system. interest rates in all areas of the international financial markets. As a result of the Libor scandal, regulators and the financial The Reckoning industry itself are today grappling with developing, and agreeing As is often the case in hindsight, it is difficult to justify today upon, an interest rate benchmark to replace Libor following how the financial markets permitted Libor to flourish for its demise. The Financial Conduct Authority (“FCA”), a U.K. decades despite its inherent flaws and ease of manipulation. financial regulatory body, has now taken over administration The ultimate demise of Libor will be one of the many and control of Libor. The FCA has determined that, due to the byproducts of the 2008 financial crisis. Very early in the lack of real-world interbank unsecured lending transactions financial crisis, claims began to surface that the large banks which are the fundamental underpinnings of the Libor formula, who were among the institutions reporting their estimated cost coupled with the obvious potential for conflicts of interests by of funds to the BBA were, in fact, intentionally manipulating reporting banks, the Libor benchmark is simply not sustainable. their estimates. Ironically, the initial controversy at that time Based on guidance from the FCA, as well as various other was not that such banks were overinflating their rate estimates sources, Libor will not be an available index after 2021. (which in turn would have arbitrarily increased the benchmark What Now? rate and led to artificially higher profits) but rather that the The international financial markets have yet to agree upon a offending banks were decreasing their estimates so as to definitive replacement for Libor. In the U.S. derivatives market, avoid public disclosure that each bank’s cost of funds were the Alternative Reference Rates Committee (“ARRC”), which increasing relative to its peers, which would be a clear signal to is a group of financial market participants, including large the market and regulators that the institution was experiencing international banks, assembled by the U.S. government, voted financial difficulties at a time when the entire industry was earlier this year to adopt an interest rate benchmark tied to under pressure and enduring extreme challenges . U.S. Treasuries-backed repurchase agreement market (repo). In addition, investigations initiated during the financial crisis One advantage of the “repo rate” as an interest-rate benchmark determined that the actual number of unsecured, interbank- is that real-world transactions are robust: it is currently lending transactions (upon which the 20 reporting institutions estimated that over $600 billion in overnight repo trades are were basing their estimates) were surprisingly uncommon. In made daily, making it a notably large and liquid market. It is fact, it was found that in one case relating to a specific reporting anticipated that this new benchmark rate will be published currency for a certain lending period in 2006, there were only by the Federal Reserve Bank of New York next year and will 15 such banking transactions worldwide. As such, setting aside include in its computation various (yet to be finalized) controls the claims of manipulation, it became clear that regardless of and protections to maintain its integrity. One such protection, the good faith effort of a reporting bank to provide an accurate for example, is to remove transactions made by the Federal Reserve from the data used to compute the index, since such
30 www.cbai.com + Banknotes Community Bankers Association of Illinois
transactions could have the effect of skewing the rate as well as a new rate index similar to Libor if Libor is no longer available; provide the U.S. Treasury a mechanism (whether intentional or however, a lender’s unilateral determination of what is similar unintentional) to manipulate the market, which is a concern for to Libor may give rise to objections and lawsuits when a international financial market participants. borrower feels its new interest rate is higher than it would have been under Libor. What’s Next? Despite the positive momentum of the ARRC in its decision When providing new variable rate loans going forward, lenders to use the repo rate in the derivatives market, to date there is may want to avoid reference to Libor and instead peg the no consensus in the international financial community for a interest rate to other indices. Borrowers may wish to avoid permanent Libor replacement (including in markets beyond any future uncertainty and opt for fixed rates or interest the derivatives market), so market participants ranging from rate ceilings. In any event, borrowers and lenders should lending institutions, corporate borrowers and even consumers, understand and negotiate satisfactory index and alternate index should expect to hear more in the years to come and prepare provisions now that Libor is being phased out. to act accordingly. Clearly, finding an agreed-upon replacement for Libor is critical to the operations and feasibility of a broad Once a replacement benchmark takes hold, existing legal array of financial products and relationships. documentation, such as credit agreements, bond indentures and swaps (plus many more), will need to be modified, Until then, both lenders and borrowers with existing loans tied and new legal documents will need to be negotiated to to Libor should examine their loan documents to determine appropriately reflect the new benchmark. In that regard, the how their variable interest rate will be determined when Libor assistance of competent legal counsel, with up-to-date market goes away, and whether the loan documents can be amended experience, will be critical in guiding market participants to provide for a new method of determining the interest rate. through the process of transitioning from Libor to the new The existing loan documents may allow the lender(s) to select interest rate benchmark. n
Banknotes + January 2018 31
Community Bankers Association of Illinois
Foundation for CBAI Community Banking
Levels of Recognition Presidential-Level Investor $100,000+ Silver-Level Investor $5,000 - $9,999 Diamond-Level Investor $50,000 - $99,999 Bronze-Level Investor $2,500 - $4,999 Platinum-Level Investor $25,000 - $49,999 Copper-Level Investor $1,000 - $2,499 Gold-Level Investor $10,000 - $24,999
Donation News
North Central Bank, Hennepin made a contribution toward Mike Gill, Flora Bank & Trust; Chris Gordon, Franklin its Gold-level pledge. Bank; Mike Mahair, State Street Bank & Trust, Quincy; Doug Parrott, State Bank of Toulon; Mike Radliff, The Devon Bank, Chicago made a donation toward its Bronze- First National Bank, Vandalia; Tony Sisto, STC Capital level pledge. Bank, St. Charles; Alan Stremlau, Illini State Bank, Tonica; Jim Weast, Warren-Boynton State Bank, New Bankers donating CBAI-related travel expenses to the Foundation Berlin; and Bill Wubben, Apple River State Bank. were: Burnell Beckman, Dieterich Bank, N.A.; Jeff Bonnett, Havana National Bank; Will Coolley, Longview The CBAI and CBSC boards of directors held a “dress-down Capital Corporation, Newman; Kevin Day, State Bank day” for their November board meetings, culminating in a $105 of Waterloo; John Dosier, First Southern Bank, Marion; donation to the Foundation. n
What are you waiting for? Take the Plunge and Join CBAI’s Career Development Division today!
For more information, call Melinda at 217/529-2265
Banknotes + January 2018 33 Community Bankers Association of Illinois
LEGAL LINK
Losing a Foreclosure Case
Jerry Cavanaugh, CBAI General Counsel, Springfield, IL
s a fan of college and professional sports teams, Section 13-217 states that, once a plaintiff has voluntarily I find it aggravating when my favorite teams lose dismissed a lawsuit, it can only bring “a new action,” and “winnable” games because of unforced errors refiling must be within one year after the prior voluntary that convert seemingly certain victory into a dismissal. The Illinois Supreme Court has interpreted Afrustrating defeat. Maybe it is unearned runs in a baseball “a” new action as meaning a single exercise of a right to game or “points off of turnovers” in football or basketball, refile. Purchasing Bank argued that its refiling as a two- but it is a bitter pill to swallow when my team converts a count complaint was only the first refiling of the breach of likely win into a stinging defeat. promissory note case and was not a second refiling of the original foreclosure judgment and sale case. Am I going to get to a point? That opening paragraph corresponds with my reaction to a November opinion from The Appellate Court, however, did not buy that argument, the First District Illinois Appellate Court in the case of explaining that Illinois law attaches a “transactional” meaning First Midwest Bank v. Cobo. The facts in the case seemed to the concept of “refiling,” effectively establishing that to establish a clear case for a judgment of foreclosure in any complaint based on the same set of facts surrounding favor of Mortgagee Bank: in November of 2006 Mortgagors the transaction that was the subject of the original lawsuit signed a $227,500 promissory note secured by a mortgage; (in this case, the simple foreclosure judgment litigation) beginning in July of 2011, Mortgagors ceased making constitutes a refiling. monthly mortgage payments; in December of that year, Thus, when Mortgagee Bank voluntarily dismissed Mortgagee Bank initiated a foreclosure suit seeking the original complaint for a foreclosure judgment and foreclosure judgment and sale. foreclosure sale and two weeks later refiled to reframe the Subsequently, however, Mortgagee Bank voluntarily litigation in a breach of contract mode, the opportunity for withdrew its foreclosure complaint and, two weeks later, a second bite at the apple was legally exhausted and when filed a new complaint based on breach of the promissory Purchasing Bank voluntarily dismissed and brought the two- note. The Appellate Court opinion did not explain why count complaint, that complaint was rightfully dismissed Mortgagee Bank withdrew the foreclosure case and refiled as the second refiling of the original foreclosure case. As as a breach of promissory note case, but perhaps at the with any case law summary that I author in either Banknotes time Mortgagee Bank concluded that, rather than merely or in CBAI’s bi-weekly e-newsletter, boiling down a 13- recovering the mortgage balance due through a foreclosure page Appellate Court opinion into the limited space of this sale, there was some enhanced financial recovery available column should not be construed as being applicable in any under a breach of contract theory. definitive way to a legal situation in which your bank may be involved, and you should always consult with your bank’s While the case was pending, Mortgagee Bank sold the loan own attorney for legal direction. to Purchasing Bank. Purchasing Bank voluntarily dismissed the pending litigation against Mortgagors and refiled with a Legal Link is a free CBAI member benefit. For answer to two-count complaint; Count One essentially reasserted the your general, banking-related legal and regulatory questions, breach of promissory-note claim already pending, and Count contact Jerry Cavanaugh in the “Members Only” section of Two alleged unjust enrichment in favor of Mortgagors. At that the CBAI website, www.cbai.com. n point, Mortgagors filed a motion to dismiss the case pursuant to Section 13-217 of Illinois’ Code of Civil Procedure.
34 www.cbai.com + Banknotes Community Bankers Association of Illinois
MEMBER NEWS
Frederick “Fritz” Kuhlmeier The West Central Bank and West as business development officer. will retire from Citizens State Central Bancshares, Ashland Washburn has 37 years of experience Bank, Lena as bank president and boards of directors announced two in the building trades, most recently CEO in April 2018 after 28 years senior executive position promotions. serving as executive director of the Tri- of service. Kuhlmeier continues Zachary Flinn was promoted to City Building Trades Council, which to serve as president and CEO of president of West Central Bank. He represents 23 individual construction First Lena Corporation, the bank’s joined the bank in 2007; his most trade unions comprising of 9,000 holding company, and will remain recent positions were as cashier and working men and women in the Eastern a member of Citizens State Bank’s as vice president and CFO. Flinn Iowa and Western Illinois districts. board of directors. The bank’s board is a graduate of Illinois College, has appointed Amy Baker, currently Jacksonville. His advanced graduate First Mid-Illinois Bank & Trust, the CFO at Citizens State Bank, to education includes the CBAI N.A., Mattoon has named Megan succeed Kuhlmeier as president and Community Bankers School in McElwee to vice president, credit CEO. Baker joined Citizens State Bank Bloomington, and the Graduate School administration manager. McElwee as its controller and the treasurer for of Banking and the Financial Managers’ began her banking career with First First Lena Corporation. Before coming School, both at the University of Mid in 2011 and has held roles as a credit analyst, commercial and to Citizens State Bank, Amy worked Wisconsin. J.R. Blair was promoted in public accounting with Chicago’s to CEO of West Central Bancshares ag lender and AVP, credit analyst. Altschuler, Melvoin and Glasser LLP Inc, the parent company of West McElwee earned an MBA from Eastern and as finance manager for APCOA/ Central Bank and its subsidiaries West Illinois University, Charleston and Standard Parking, Inc. Baker is a Central Financial Services and West holds a B.S. degree in agricultural graduate of The Community Bankers Central Insurance. Mr. Blair began and consumer economics with a School, the University of Wisconsin - at the West Central Bank in 1976, concentration in agricultural finance Madison’s Graduate School of Banking, worked in senior executive positions from the University of Illinois, and Highland Community College’s in another banking firm, and rejoined Urbana-Champaign. The bank also Leadership Institute. WCB in 1995 as its president and announced that Robert Ambrose, CEO. Blair’s new position will include III has joined the bank as retail loan overall management, coordination, and officer. He is based out of the Peoria strategic planning for the WCB banks, banking center and assists customers its insurances agency subsidiaries, and in obtaining home loans, home equity its financial-services subsidiary. lines of credit and personal loans. Ambrose earned a bachelor’s degree Bradford National Bank, Greenville in business finance from Bradley has hired John Keeven for its University, Peoria. Jim Miller Highland facility. Keeven primarily has been named as vice president- As the oldest bank in Stephenson serves commercial and ag lending agriculture/commercial lending for County, Lena State Bank has a customers, but also services residential the First Mid banking centers in tradition of service to its community real estate customers. Keeven is a 2004 Mansfield and Monticello. He is dating back to 1867. Shown with a graduate of McKendree University with responsible for building commercial plaque from CBAI honoring the bank a B.S. degree in economics and finance. and ag loan/deposit relationships in for its 150th anniversary are bank He has 13 years of banking experience. those markets. He earned a Bachelor’s officers Cindy Martin, SVP, and degree in agricultural industries from joins Curtis D. Derrer, president. Rory Washburn Quad City the University of Illinois, Urbana- Bank & Trust, Davenport, IA
Banknotes + January 2018 35 Community Bankers Association of Illinois
MEMBER NEWS
Champaign. Brenda Bobbitt has been Framework Formation Team (“Team”). services partners with the Elite promoted to the position of branch The Team is a short-term working Financial Team Award at an event manager in First Mid’s Mt. Carmel group, established by the Federal attended by about 100 industry banking center. Bobbitt began her Reserve’s Faster Payments Task Force professionals. Recipients were chosen banking career in 1981 as a CSR and, to develop recommendations for based on their demonstrated excellence most recently, assistant branch manager faster-payments governance in the in the areas of client service and at First Mid. United States. Christensen brings retention, commitment, attitude, and 23 years of experience as a payments asset gathering. The 2017 Elite The Peoples State Bank of professional, FDIC examiner and Team Award winners are: Brian has signed a purchase and Newton IT expert to the formation team. At Card, Corey Kelly and the team assumption agreement to acquire three SHAZAM, he leads the company’s at PSB Investment Services, a southern Illinois branch locations enterprise-wide governance and division of Princeville State Bank; with approximately $84 million in utilization of information and is Josh Miller, CFP®, Aaron Hayes deposits from First Bank, which is responsible for providing insights and the team at TGSB Financial headquartered in Missouri. The branch that aide in the development and Services, a division of Table Grove offices are in Greenville, Salem and execution of the company’s strategic State Bank; Robbie Minor and the Vandalia. The transaction is expected goals. SHAZAM is a preferred-service team at Sauk Valley Investment to close during the first half of 2018. provider of Community BancService Services, a division of Sauk Valley . and The Federal Reserve announced Kevin Corporation (CBSC) Bank and Trust, Sterling; Jeff Schumacher, Natausha Tingle and Christensen, SHAZAM’s SVP Midwestern Securities Trading the team at Goodfield State Bank of market intelligence and data Company, LLC (MSTC) recently analytics, was elected to a seat on Investment Services, a division of honored four of its top investment n the U.S. Faster Payments Governance Goodfield State Bank.
In Memoriam
Albert O. Eck, Jr. passed away on November 4, 2017; he was born in 1936. He was a life-long resident of Springfield, the first-born son of Albert and C. Olive Pfeffer Eck. Eck was a 1958 alumnus of the University of Notre Dame, South Bend, IN, with a bachelor’s degree in commercial science. For almost 42 years, he was married to Nancy Schaddel Eck. For 60 years, he practiced certified public accounting in Springfield: for 36 years, he practiced with the firm his father founded in 1931, Kerber, Eck & Braeckel; in 1994, he founded Eck, Schafer, & Punke, LLP. Both firms are associate members of CBAI and, under the supervision of Eck, served as the Association’s auditors and, for many years, conducted its Officer Compensation Survey. His parents and sister, Susan Morris (Jim), preceded Eck in death. He is survived by his siblings, brother, John (Linda) and sister, Sara (Jim, deceased). He is also survived by eight children: Anne Schuh (Bill), Fred (Kay), Michael (Tricia), Phil (Shirley), Mary Kate Ressel (Ken), Robin Kerner, Albert O. III (Kim) and Gretchen Eck; 27 grandchildren; and two great-grandchildren: Cooper and Gabriel Eck.
John Gambara, president of Washington Federal Bank for Savings, Chicago, passed away unexpectedly December 3 at the age of 56. He is survived by his wife, Therese (Kimperda), and daughters Amy and Julie.
36 www.cbai.com + Banknotes Community Bankers Association of Illinois
COMING ATTRACTIONS February
1 Compliance for Lenders –– Hilton 8 Emerging IT Technologies 2018: What 21 Opening Consumer Accounts: Lisle/Naperville Are They & Do They Matter? Regulations, CDD & Documentation
1 Understanding Personal Tax Returns 13 Directors’ Role & Responsibilities 22 Security Officer Reports to the Part 1: Schedules A, B, C & D When a Data Breach Occurs Board: What Is Required?
6 Simplifying the Compliance Function: 14 Countdown to New Reg E Prepaid 27 Debt Service Coverage Calculations in Tools & Checklists to Keep you on Card Rules Effective April 1, 2018 Underwriting Track 15 Preparing for the New Mortgage 28 Understanding Personal Tax Returns 7 Fair Lending Challenges for Servicing Rules: Final Implementation Part 2: Schedules E & F HMDA Data Rule Changes: Expanded Date, April 19, 2018 Data Fields & Lending Practices 21-23 Commercial Lending Institute –– 8-9 IRA Institute –– CBAI Shazam CBAI Shazam Education Center, Education Center, Springfield Springfield
March
1 CECL Rule Overview: Preparation, 13 Flood Insurance Compliance Review 21 Introduction to Call Report Preparation Planning & Data Collection & Update 2018 22 Compliance & Legal Risks in 6 Revisiting CDD Policies & Procedures 14 Developing & Managing Employee Mobile Banking: Rules & Security to Include Beneficial Ownership Rule Performance Through Effective Requirements Changes Effective May 11, 2018 Recruiting, Onboarding & Coaching 27 Winning Retail Marketing & Sales 7 BSA/AML Conference –– CBAI 15 IRA Overview: Traditional & Roth & Strategies for Community Banks Shazam Education Center, Springfield IRA & SEP Plans –– CBAI Shazam Education Center, Springfield 7 ACH Rules Update 2018 20-22 Residential Real Estate Lending Institute –– CBAI Shazam Education 27 Opening Deposit Accounts for 8 Asset/Liability Management: Center, Springfield Nonprofit Organizations Investments, Liquidity and Interest- Rate Risk –– CBAI Shazam Education 20 Completing the CTR Line-by-Line 28 Creating Effective Credit Memos & Center, Springfield Effective May 28, 2018: Technical Loan Narratives Changes, New Data Fields & 8 Managing Chapter 7 & 13 Consumer Alternative Model Reporting 29 Negotiate to Win™: Essential Bankruptcies: Special Rules, Negotiation Skills for Community Cramdowns & Risks Bankers = Webinar
Banknotes + January 2018 37 Community Bankers Association of Illinois
Staff News
Wingert and Duke
Wheaton Jerry Peck and Kelley
Mike Duke was recently recognized for 20 years of The Community Bankers Association of Illinois service to the Association. Duke is vice president (CBAI) has hired Jerry Peck as senior vice president member services of Community BancService of Governmental Relations. He replaces Kraig Corporation (CBSC). He received a gold service pin Lounsberry who began his tenure as CBAI president from CBAI President Bob Wingert (pictured: Duke, January 1. Peck was formerly director of Government Wingert). Judy Wheaton was recognized for 15 years. Affairs for the Illinois Manufacturers’ Association. Wheaton is executive assistant of CBSC. She received He holds a B.A. degree in communications from a pin from CBSC President Mike Kelley. Eastern Illinois University.
Welcome New Members Associate Members
Bundlefi Mike Hines & Associates 1400 Old Country Road, 209 South Cooper Street, Suite #103 P.O. Box 125 Westbury, NY 11590 Stronghurst, IL 61480 Adrienne Greene, Mike Hines, Owner Chief Sales Officer 309/255-2812 516/802-7193 Ext. 111 [email protected] www.bundlefi.com Influencing Individual: Jeff [email protected] Bonnett, Havana National Bank* Financial Marketing Bank Equipment Provider and Servicing
*(A $50 donation to the CBAI Hamer Bank Consulting Foundation for Community 645 Buena Vista Drive Banking was made in Jeff’s name. Glen Ellyn, IL 60137 Additionally, he will be eligible Scott Hamer for a $500 cash prize in a drawing 630/709-4554 to be held during the 2018 CBAI www.hamerbanconsulting.com Annual Convention in St Louis.) scott.hamer@ hamerbankconsulting.com General Consulting
38 www.cbai.com + Banknotes
Banknotes Community Bankers Association of Illinois 901 Community Drive Springfield, IL 62703-5184