1st Quarter, 2021
WORKING TOGETHER TO KEEP YOUR FINANCIAL INFORMATION SAFE
W
e know we talk a lot about the importance of safeguarding your financial information in the digital space. But we believe this is a message that bears repeating, especially as consumer fraud continues to hit new records. The Federal Trade Commission (FTC) received 1.4 million reports of identity theft in 2020, double the number from 2019. Americans lost over $1.9 billion in 2019 due to fraudulent activity. Unfortunately, scammers are taking special advantage of people’s fears and needs during the pandemic. As the COVID-19 vaccine rolls out, bad actors are looking to cash in. They’re using the same methods we’ve seen with stimulus payment and tax refund frauds, just with updated hooks. For example, you might get a phone call or email saying you are eligible to receive the vaccine. It may appear to come from a public health official or local clinic or hospital. But then you learn you need to provide personal information or even pay for the vaccine up front. In one scam reported to the Better Business Bureau, the phony caller asks for your Medicare number and home address. Another version targets its victims through
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T O D D S . A DA M S chief executive officer
social media. Someone impersonating a “friend” claims to know about a fast track to a vaccine if payment is made immediately. Other frauds involve signing up for fake wait lists.
Helping you stay safe is one of the cornerstones of our relationship with our customers. Adams Bank & Trust has several teams dedicated to cybersecurity and fraud protection. Each team is tasked with watching different Scammer s are t ak in g ad vant a ge banking areas and focusing on different aspects of financial of p eople’s fear s dur in g t he security. We incorporate best pandemic . We want to help industry practices into every you b e on g uard a gain s t t hi s facet of our organization. As a community bank, we work t y p e of f raud , e spec iall y a s t he hard to know and connect COV I D -19 vacc ine i s rolled out . with our customers. This familiarity also helps us to identify various frauds and TIPS FOR SPOT TING better protect you.
A VACCINE SCAM:
✔ Learn how the vaccine is being rolled
out in your area. Review your local health department’s website to find out how you need to register and how you’ll be contacted. This will make it easier to know a scam when you see one. Check the URL on links. A scammer may have invested in an official-looking domain, so beware of unsolicited contact. If it claims to be from the local government, does the URL end in .gov? When in doubt, look up the entity’s website or number and contact them directly. Don’t give out your government-issued numbers or personal information. As always, be suspicious of anyone asking for your Medicare ID number, Social Security number, insurance, or banking information.
✔ ✔
In t h is yea r ’s More For Your Money articles, I’ll be reviewing the different types of frauds, the new forms that frauds are taking, and the various ways the bank can help you protect yourself. From check fraud to IRS and Social Security schemes to phishing, forewarned is forearmed. Next quarter, we’ll take a look at mail and check fraud, and talk about the steps you can take to avoid being a victim.
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DESPITE UNCERTAINT Y 2021 OFFERS OPPORTUNITIES
A
s we move through the first part of the year, I want to take a moment to review the current business climate as well as the opportunities and challenges from our perspective.
rates will remain very low from a historical perspective. Mortgages and refinancing will continue to be opportunities for consumers and businesses.
Whether you’re a oneperson entrepreneur or a billion-dollar business, there are always opportunities in changing environments.
Fuel, food, and lumber prices are drifting higher this year due to greater demand and tight supplies. The large government stimulus is increasing the pressure on these commodities.
To be successful, decisions must be made even in the face of great uncertainty. 2021 is full of uncertainty. But opportunity can follow in its wake. Whether you’re a one-person entrepreneur or a billion-dollar business, there are always opportunities in changing environments. We found that to be true here at the bank during 2020. Loan demand was extremely soft due to the uncertainty in the markets. Yet there was opportunity in mortgage lending and participating in the new Payroll Protection Plan offered by the government. By adjusting during the year to these new opportunities, our bank’s assets grew by almost $200,000,000, and we had a record profitable year. It wasn’t easy, and our staff worked extremely hard adjusting their workload to achieve the desired results. Interest Rates Despite a moderate and gradual rise in interest rates expected in 2021, adams bank & trust
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Inflationary Factors
Business Climate Business conditions will definitely favor bigger businesses due to the increased regulation and taxes. These factors will present a barrier to entry for new businesses, and the reduced competition will be an opportunity for established businesses. On the other hand, we anticipate there will be a variety of government programs for specialized causes in the coming year, and some of those may help new businesses. Monitoring and exploring these opportunities is a full-time job at the bank. Taxes The proposed increase in income and estate taxes will make it more difficult to preserve a business for future generations. Careful planning will be a necessity in 2021, knowing that these taxes will be increasing in the future. You’ll want to stay in close communication with your tax and legal advisors if you’re doing estate planning. Labor Outlook With increased immigration, there will be more labor availability. Many of our customers are
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C H A D S . A DA M S president
struggling for additional labor, particularly in agriculture. So more labor will be a welcome relief. The immigration will pose challenges for some of our communities, and we should all work together for the common good of our country.
How can Adams Bank & Trust help you navigate the challenges and opportunities of 2021? Helping You Plan Your bank is here to serve as a resource and a listening ear as you plan for the future. Without a decisive plan, a business is doomed to failure; comparable to trying to play an intramural game without keeping score. In this scenario, everyone is dissatisfied with the results: the customers, employees, and ownership. A s a com mu nit y ba n k , ou r relationship with our customers will always hinge on personal contact, whether this occurs in person or via videoconference. The ways we connect with you continue to adjust for the times as well as your needs and preferences, but our virtual handshake is no less sincere. It remains the symbol for our passion for your financial well-being, and our desire to put you in front of the opportunities that will benefit you the most.
LET’S PUT YOUR HOME TO WORK. A home equity line of credit, or HELOC, can provide the financial foundation you need to upgrade your home, make large purchases, pay for college, and more. HELOCs offer a powerful, flexible way to make your home work for you. With the right tools, we can transform your financial goals into realities. Let’s connect to explore the possibilities today.
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FINAL TERMS AND LOAN APPROVAL ARE SUBJECT TO CREDIT APPROVAL, APPRAISAL, AND BANK UNDERWRITING GUIDELINES. CLOSING AND APPRAISAL FEES WILL APPLY.
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your foundation for f inancial success
1st Quarter, 2021
R AY M O N D J A M E S F IN A N C I A L S E R V I C E S , IN C . MEMBER FINR A/SIPC
ANOTHER LOOK AT THE SECURE AC T OF 2019
I
t’s not a stretch to say that a lot happened in 2020. There was so much news competing for everyone’s attention that it was easy for other information to get lost in the shuffle. The SECURE Act was the major piece of retirement reform legislation that passed in December, 2019. It will continue to impact every American’s retirement planning, so we’re sharing a refresher course on some of the SECURE Act’s key components and significant changes. Fi r s t , we w a nt to remind you that you can still make contributions to your Individual Retirement Account (IRA) through the tax filing deadline.
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J A C O B H OV E NDIC K rjfs branch manager
you can at the time, because we never know what the future holds. One piece of good news for savers in the SECURE Act is the removal of the age limitation for contributing to an IRA. So if you’re still working and earning income, you can continue making contributions to your IRA. Previously, you could not make cont r ibut ion s a f ter turning age 70 ½. The change gives people more time to increase their retirement savings, and it also provides a valuable tax deduction. T he contribution limits align with those c u r r e nt l y i n pl a c e for other retirement accounts.
As we know, life can throw curveballs, and we need to be able to keep swinging. Recent events such as the pandemic The SECURE Act has wide-reaching impacts on retirement savings and afThe SECURE Act also have highlighted the fects Americans of every age group. delays the beginning need to save aggressively date for required minimum distributions (RMDs). and put away as much money as possible to better weather future storms. For example, a generation Under the old rules, most people had to begin taking could retire in the 1980s with assets in CDs because RMDs from their IRA and 401(k) accounts the year the interest rate of the time was in the double digits. they would turn 70 ½. That beginning date is now That is not the case today. delayed to age 72 for everyone born after July 1, 1949. Don’t allow turbulent times to become an excuse to delay saving for retirement. Remember that the rules of the game can change. Try to make the best decisions
The increased RMD age can help you save more for retirement in several ways. For one, it can give your portfolio more time to grow. It can provide more time
Adams Bank & Trust is not a registered broker/dealer, and is independent of Raymond James Financial Services. Securities offered through Raymond James Financial Services, Inc., Member FINRA/SIPC, are not insured by bank insurance, the FDIC or other government agency, are not deposits or obligations of the bank, are not guaranteed by the bank, and are subject to risk, including the possible loss of principal. Investment Advisory Services offered through Raymond James Financial Services Advisors, Inc.
to roll money into a Roth IRA, which does not require RMDs. Additionally, decreasing your taxable income now can minimize your future tax burden. Talk to your tax advisor about how this might lower your taxable income. The SECU RE Act made significant changes to inherited retirement plans, including 401(k)s, traditional IRAs, and Roth IRAs. One of the biggest changes comes in the rules for “stretching” beneficiary IRAs. In the past, you could stretch distributions and tax payments over your lifetime if you inherited an IRA or 401(k) account. However, inherited IRA distributions must now be taken within 10 years. We should note that there are some exceptions to this rule change. For example, it does not apply to spouses who are inheriting a retirement account, and minor children have modified rules for inheriting a retirement account. “Stretch IRAs” were traditionally used in estate planning as a way to defer taxes on withdrawals over time. But the SECURE Act changes could hold some negative tax implications for retirement account beneficiaries. Consult with your tax and legal advisor if you have a large portion of your estate in retirement accounts.
O ne of t he bi g ge s t chan ge s come s in t he r ule s for “s t re tchin g ” b ene f ic iar y I R A s. In t he pa s t , you could s t re tch di s t r ibut ion s and t a x pa y ment s o ver your life t ime if you inher ited a re t irement account . Ho we ver, inher ited I R A di s t r ibut ion s mu s t no w b e t ak en w it hin 10 year s. A new rule allows you to take a qualified distribution of up to $5,000 from your retirement plan without penalty within one year of the birth or adoption of a child. Each parent is allowed to take the distribution to help with expenses for the new member of the family. These distributions are still treated as taxable income, but the usual 10% penalty for early withdrawal under age 59 ½ is not applied. The SECURE Act allows more workers to be elig ible for retirement savings plans. In the past, part-time employees who worked less than 1,000 hours
a year weren’t usually eligible to participate in their company’s 401(k) plan. The act now requires companies to expand eligibility to those who have worked at least 500 hours a year for three years in a row. The legislation also increases sma ll employer access to retirement plans. Effective January 1, 2021, the SECURE Act reduces fiduciary liability concern and cost among small employers with multiple employer plans (MEP) or pooled employer plans (PEP). Small business owners are also incentivized to start retirement accounts through a tax credit. Businesses with less than 100 employees are eligible for up to $5,000 in tax credits. For every non-highly compensated employee who is eligible to participate in the retirement account, there is a $250 credit. Companies would be eligible for the credits over a three-year period beginning in 2020. All of the changes in the SECURE Act underscore the importance of meeting with your financial, tax, and legal advisor periodically. Check ing in w ith these professionals will help you stay on top of anything that has changed in the law, and let you know how the changes could impact your financial planning and goals.
Opinions expressed are those of the author and are subject to change. This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. This information is not intended as a solicitation. The material is general in nature. Investing involves risk; investors may incur a profit or loss regardless of the strategy or strategies employed. There is no assurance that any investment strategy will ultimately meet its objectives. Past performance may not be indicative of future results. Asset allocation and diversification do not guarantee a profit nor protect against a loss.
For assistance in reviewing or creating your investment plan, please call any Adams Bank & Trust office or call toll free at 800.422.3488 for an appointment with a Raymond James Investment Representative. Jacob Hovendick, RJFS Financial Advisor and Branch Manager Jan Acker, RJFS Financial Advisor 308.28 4.4 07 1 | 315 N SPRUCE S TREE T, OG A LL A L A , NE 69153
O U R L O C AT I O N S NEBR ASK A
COLORADO
BRULE 308.287.234 4 CHAPPELL 308.874.2800 GR ANT 308.352.2114 IMPERIAL 308.882.4286 INDIANOL A 308.36 4.2215 LODGEPOLE 308.483.5211 MADRID 308.326.4223 N O R T H P L AT T E 308.532.5936 OGALLALA 308.284.4071 SUTHERL AND 308.386.4345
BERTHOUD 970.532.1800 COLOR ADO SPRINGS 719.4 48.0707 FIRE S TONE 303.833.3575 FORT COLLINS 970.667.4308 LONGMONT 303.651.9053 S TERLING 970.522.0698 KANSAS COLBY 785.460.7868
TOLL FREE 800.422.3488 ABTBANK.COM
ADAMS BANK & TRUST BAL ANCE SHEET AS OF DECEMBER 31, 2020 C A SH
Cash in our vault, plus cash on demand from other banks where funds are deposited.
GOV ER NMENT A ND AGENCY B OND S
Marketable investments in bonds and other securities of the U.S. Government and its agencies.
FEDER A L FUND S S OLD
Funds loaned to other banks for daily cash needs and payable on demand.
L OA NS A ND LE A SE S
Total of all money loaned to customers for all types of loans, such as agriculture, commercial and consumer.
$ 170,097,088 1 0 6 ,7 8 4 , 2 9 3 0 741,062,708
BUILDING S, FUR NIT UR E A ND FIX T UR E S
12 ,07 7,892
O THER A S SE T S
14,009,176
T O TA L A S SE T S
1,0 4 4 ,0 3 1,15 7
Book value (after depreciation) of buildings, computers, equipment, etc. Interest on loans earned but not collected, expenses that have been prepaid, etc.
DEP O SIT S
Money on deposit by customers of the bank in the form of checking accounts, savings accounts, and certificates of deposit.
899,925,933
O THER LIA BILITIE S
3 2 , 3 0 7, 0 6 1
C A PITA L
23,000,000
SUR PLU S
17,000,000
UNDIV IDED PROFIT S A ND R E SERV E S
7 1,798,163
Borrowings by the bank, interest on deposits that has accrued, payable at a future date, other expenses accrued but not yet paid, deferred taxes, etc. Par value of the investment of the stockholders for the purchase of stock. Additional money contributed by stockholders to provide extra financial strength. Bank earnings left in the bank to provide added strength to meet possible future losses on loans and to replace buildings and equipment as they wear out.
T O TA L C A PITA L AC C OUNT S
Total capital available for the safe operation of Adams Bank & Trust.
T O TA L LIA BILITIE S A ND C A PITA L A S SE T S
111,798,163 1,0 4 4 ,0 3 1,15 7