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ICBSD 2019


Independent and proud of it!

Bottom Line

What’s In Store? Campbell County Bank Saves Local Grocery Store ICBSD Takes Over Capitol Hill 2019 Annual Retreat: What You Can Expect

Rebeca’s Remarks: How Community Bankers Help Support Financial Literacy in the U.S.

Beyond the Paycheck Jaime Taets of Keystone Group International


Arrowhead Country Club 3675 Sheridan Lake Road Rapid City, SD 57702


JULY 25, 2019 8:00 AM Check-In 8:30 AM Start

Arrowhead Country Club

See you at the course! Register at

Questions? Contact Megan Olson at


INSIDE This Issue

2 President’s Message ICBSD Takes Over Capitol Hill by Megan Olson, President & CEO of ICBSD

3 Rebeca’s Remarks

How Community Bankers Help Support Financial Literacy in the U.S. by Rebeca Romero Rainey, President & CEO of ICBA


From the Chairman Thank You for a Great Year by Preston Steele, Chairman of ICBSD

5 ICBSD 2019

From the Chairman From the Top by Preston Kennedy, Chairman of ICBA Legislative

7 Federal Delegate’s Report by Emily Hofer, ICBA National Director

Marketing & Public Relations

18 Kevin Burr

ICBM Insurance

by Hannah Merritt, Marketing & Public Relations Member Services

17 Member Benefit: ICBSD/ICBND

Cooperative Liquidity Program In the news

20 2019 Annual Retreat What Can You Expect? Meet Our Presenters

26 In the News 28 United Bankers’ Bank Welcomes J Arlt,

Correspondent Banking Officer

30 United Bankers’ Bank

Announces Management


Newburgh, Senior

First-Hand Experience by Representative Dusty Johnson

11 Congress Must Act to

Strengthen Consumer Data Privacy by Senator John Thune

Community spirit

ICBSD’s New Co-Lobbyist

by Hannah Merritt,

Transitions Conrad

China Trade Negotiations: A Primer by Senator Mike Rounds

P.O. Box 615, Watertown, SD 57201 605.878.3040

14 Matt Krogman


9 2019 PAC Contributors 10 Rounds’ Report

People you Should Know

12 What’s in Store?

Campbell County Bank Saves Local Grocery Store b y Hannah Merritt, Marketing & Public Relations

Lending Executive, Retires

31 John Peterson named

Interim Bank President and CEO at United Bankers’ Bank

32 Beyond the Paycheck-

Winning the War on Top Talent by Jaime Taets, CEO of Keystone Group International

34 Short & Sweet:

Cash Management Instruments Have Relative Value Today by Jim Reber, President and CEO of ICBA Securities ICBSD 2019 1

President’s Message From the president

Megan Olson, President & CEO of ICBSD

As I write this article, we are finally in the much anticipated and joyous transition into summer! Outside my window the robins are busy collecting branches to build their nests,

“In an effort to continue to grow and strengthen our PAC program, I would like to personally invite you, your family, and those within your financial institutions to attend our 2019 annual retreat and golf scramble!”

and my neighbor is tending to her garden where beautiful shades of green, pink and red are beginning to pop through as new life takes shape. Similarly, the ICBSD is popping with growth as we welcome two new associate members and their diverse resources they bring to the table – Keystone Group International and Journey Group. We also had the opportunity to grow as professionals this past winter at two major conventions. The association was well represented by our states’ independent community bankers at ICBA’s LIVE convention in Nashville, TN. There, we were elbow to elbow with the industry’s leading experts in innovative technology, marketing, fintech, lending, payment solutions and more. It was a prosperous trip as our group attended educational sessions and networked with fellow community bankers from across the nation who are also fighting for main street. We also attended the ICBA’s Capital Summit in Washington, D.C.. There, the ICBSD was represented by 20 plus of our states’ community bankers. We had productive conversations with Senator Rounds, Senator Thune and Representative Johnson, all regarding the existing challenges our independent community bankers are battling. Rest assured, our legislatures are well aware of the challenges we face and are committed to pressing for change. Your contributions to the ICBSD PAC allows us a seat at the table with our legislators, in South Dakota and in Washington, and allows our voices to be heard. In an effort to continue to grow and strengthen our PAC program, I would like to personally invite you, your family, and those within your financial institutions to attend our 2019 annual retreat and golf scramble! The retreat is taking place July 25th – 27th at Sylvan Lake Lodge in Custer State Park, and has something to offer for everyone! For a sneak peek of what we have planned, jump ahead to page 20! The retreat and scramble are a fundraiser for our PAC program, and also serve as a great learning and networking opportunity for our bank members. Don’t worry, it won’t be all work and no play! We have fun activities planned for the entire family including old time photos, an adventure park and more! If you haven’t registered yet, or for more information, visit our website I look forward to continued growth within the ICBSD in the months ahead! If you have any questions regarding the retreat or the PAC program, feel free to reach out. 2 The bottom line

Rebeca’s Remarks How Community Bankers Help Support Financial Literacy in the U.S. From the president

Rebeca Romero Rainey, President & CEO of ICBA

Nearly two-thirds of all Americans could not pass a five-question financial literacy test on everyday economic topics, according to the 2016 National Financial Capability Study from the FINRA Investor Education Foundation.

“With 52,000 community bank locations across the U.S., these combined financial literacy efforts serve as proof of the nation’s community banks efforts to expand American’s financial expertise and hopefully, increase our nation’s financial prowess – one community at a time.”

This decline in financial acumen signifies an alarming trend (the study’s fail rate was 42 percent in 2009) that community banks are striving to reverse by working within their communities to improve financial literacy. Take $1.5 billion-asset BayCoast Bank, for instance, who won top honors during ICBA’s 2018 National Community Bank Services Awards for its innovative youth education program, “Get on the Bus.” Using a refurbished school bus as a financial education center on wheels, the bank literally drove home the power of financial literacy education. As part of this initiative the bank donated in excess of $800,000, partnered with 14 area schools, and brought 800 seventh-graders on college tours to the University of Massachusetts. Chelsea Groton Bank, a $1.1 billion-asset bank in Groton, Conn., also has focused on students and teachers in its financial literacy outreach, drawing more than 250 high school students and teachers from nine area schools for its March 2019 Money Madness seminar. Breakout sessions included eating healthfully on a budget, identity theft, education financing, and the importance of saving. The bank also offers ongoing education through “Chelsea University,” an online repository of financial literacy courses. But it’s not just students who benefit from financial literacy. When a bank study revealed that career military families lagged their civilian counterparts in basic money knowledge, $750 million-asset First Command Bank in Fort Worth, Texas, took action. Its First Command Educational Foundation, a separate 501(c)(3) charity, offers in-person and online financial readiness tools for service members across the globe, as well as increased scholarship opportunities for service members and their families. ICBA is also helping support local efforts through high-profile partnerships with leading companies working to address the financial literacy gap. Jump$tart Coalition, one of ICBA’s financial literacy partners, brings together financial leaders from across the industry to offer a comprehensive collection of online financial education resources for pre-kindergarten through college-aged students. ICBA Bancard partner, Visa’s Practical Money Skills also offers solutions to help drive financial literacy, embracing gamification to deliver important financial concepts through dynamic, interactive solutions. Additional national programs include FDIC’s Money Smart and the U.S. government’s combined effort at More information about these programs is available on ICBA’s website.


With 52,000 community bank locations across the U.S., these combined financial literacy efforts serve as proof of the nation’s community banks efforts to expand American’s financial expertise and hopefully, increase our nation’s financial prowess – one community at a time.

ICBSD 2019 3

Thank You for a Great Year

From the Chairman

Preston Steele, Chairman of ICBSD, American Bank & Trust, Huron


“As I pass the torch to incoming chairman Monte Troske, I encourage you to continue your support of the ICBSD and ask that you continue to dedicate your time, talents and resources to grassroots advocacy.” What a privilege I’ve had for the last year! This has been an exciting time to be chairman of the ICBSD as independent community banking continues to overcome obstacles and see success!

competitive advantage due to nonexistent

This past winter, bankers from across the

regulations and their common bond

state had the opportunity to meet face

being essentially erased. The demand

to face with South Dakota legislators in

for fintech solutions is increasing, yet

Washington D.C.. Personal engagement

While the basics of community banking have remained the same throughout the years, the environment in which we operate has changed. As I pass the torch to incoming chairman Monte Troske, I encourage you to continue your support of the ICBSD and ask that you continue to dedicate your time, talents and resources to grassroots advocacy. In order to continue to be successful, we cannot let up on our efforts for change.

be innovative – outdated technology, lack

The challenges we face seem to be endless. Credit unions are at a

4 The bottom line

various challenges hinder our ability to of resources and employee training, and unclear innovation strategies are just a few to name. Despite these challenges, I firmly believe community banking is alive and thriving largely because of our ability to band together and push for change within our industry. Many community banks are the oldest businesses within

and story-telling are the keys to effective grassroots advocacy and have helped us achieve positive gains. Thank you to all of those who proudly represented our states’ community banks! In the next year, I look forward to continuing my involvement with the ICBSD as a board member. If you have

their communities at 100+ years old

questions, comments, ideas or concerns, I

and are still successfully operating today.

invite you to reach out to me or incoming

This is a true testament to our resilience,

chairman Monte Troske. Thank you for a

adaptability and overall vitality.

great year!


From the Top From the Chairman  Preston Kennedy, Chairman of ICBA

“One friend who fights like hell is better than 10 who just talk.” I said before this year’s ICBA Capital Summit that one friend

to-face with their members of Congress are no shrinking violets.

who fights like hell is better than 10 who just talk. While

They come to fight the good fight!

community bankers have had considerable success in recent years advancing pro-community bank policies, such as

Now, don’t get me wrong; the trip is plenty of fun. This year,

the S.2155 regulatory relief law, we have plenty left on our

we’re hearing from speakers including FDIC chairman Jelena

advocacy to-do list.

McWilliams and Senate Banking Committee chairman Mike Crapo (R-Idaho), who led the way on S.2155. And to be honest,

It includes overhauling Bank Secrecy Act requirements,

the conversation with my brothers and sisters in arms is pretty

improving the exam process, rolling back the taxpayer-

good, too. But grassroots advocacy like this is the nuts and bolts

sponsored advantages of credit unions and the Farm Credit

of how we accomplish our policy goals. It’s why we’ve achieved

System, promoting equally strong data-security safeguards

the “qualified mortgage” relief, Home Mortgage Disclosure

for other entities, preserving open access to the secondary mortgage market, and more. Just look at ICBA’s Community Focus 2020 platform. It’s a legislative and regulatory agenda designed to promote greater economic opportunity in local

Act improvements, the 18-month exam cycle, the Volcker Rule exemption and so on. All of that took community bankers banding together, rolling

communities through a more efficient system of regulation, unbiased laws governing the financial sector, a safer and more secure business environment, and more effective agriculture

up our sleeves and doing the hard work of constant, diligent advocacy. It took a fight.


So thank you, fellow community bankers, for your efforts. As

Community bankers maintain an ambitious policy agenda. It’s

we carry on the push for additional policy gains, I’ll have your

a tall order that no single act of Congress or the president can

back – and I know you’ll have mine.

deliver. To get it done, we need fighters, not merely talkers. Fortunately, the community bankers who show up at the Capital

My Top Three

Summit are fighters. I know this year’s event – which will be

Here are my top fighters (not talkers) on the big screen:

taking place right as this column reaches your desk – will prove

1. The Man with No Name (Clint Eastwood), A Fistful of Dollars

no different. The crowd of community bankers who make the

2. Will Kane (Gary Cooper), High Noon

trip to Washington and hoof it around Capitol Hill to meet face-

3. Mongo (Alex Karras), Blazing Saddles

Mark your calendars


2019 ICBSD annual Retreat


ICBSD 2019 5

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“This year we had 23 South Dakotans storming the Hill in April. It’s by far the largest contingent since I’ve been involved in ICBSD and ICBA. This level of participation is encouraging to me. Community Banks Build Strong Communities. Let’s keep telling our story!”

Federal Delegate’s Report by Emily Hofer, ICBA National Director, Merchants State Bank, Freeman, SD

The end of April marked the conclusion of my favorite and arguably the most important ICBA event of the year – the ICBA Capital Summit. Thomas Jefferson is credited with the idea that, “We in America do not have government by the majority. We have government by the majority who participate.” Truer words have never been spoken. Participation – from grassroots letter writing and phone calls to the weighty face-to-face meetings with our elected officials on Capitol Hill – is how we tell our Community Banking Story, fight to keep our franchise value, and keep our communities strong. The message that we need to send is that we are not “Rs” or “Ds,” we are “Cs” – Community Bankers who are fighting for our communities. This year’s summit can be summed up in one phrase – this is not your father’s (or grandfather’s for many of us) industry anymore. Who would have thought that a group of bankers from across the country would spend time dissecting the gray areas of cannabis-related banking (CRB)? However, CRB was the main topic

of discussion in my Safety & Soundness Committee meeting. These businesses are not limited to dispensaries and growers. They may include accountants, landlords, or business and garden supply stores – many customers that we have banked safely and soundly for years. The message that we took to the Hill was this: ICBA supports the creation of a safe harbor from federal sanctions for banks that choose to serve CRBs in states and jurisdictions where those businesses are legal. None of us wants to be threatened with the loss of deposit insurance for not downgrading a loan or wrapping-up and exiting a long-standing customer relationship. We need to end the regulatory trap that exists today. Another issue we took to the Hill was that of Housing Finance and Flood Insurance Reform. Legislation to create an explicit government guaranty on GSE mortgagebacked securities is needed to keep the market liquid. Additionally, as we have seen an exodus of the largest banks from our rural communities, we discussed the permanent elimination of preferential pricing/terms for lenders based on volume. We need to keep money churning in our communities. We also asked for a long-term reauthorization of the flood insurance program.

in costs being pushed onto consumers. We emphasized a quality over quantity approach to reporting that would make meaningful information available to both financial institutions and law enforcement. When it comes to data security, privacy, and fraud prevention, community banks have always been committed guardians of our customers’ data. One large-scale breach would present a huge reputational hit to a community bank. We asked for legislation aimed to strengthen the weakest links in the data security domain. GLBA-like standards with the associated cost of compliance applied to non-bank entities that process or store consumer information would create the safest environment for consumers. Finally, we emphatically opposed the expanded powers of credit unions and the FCS. These entities have ranged well outside of their federally-mandated purpose. The result of that expansion has slowly eroded the tax base for communities across the country. This year we had 23 South Dakotans storming the Hill in April. It’s by far

Other topics that we covered with our Congressmen were BSA modernization, data security, privacy, and fraud prevention, and credit union and FCS expansion efforts.

the largest contingent since I’ve been

Each year the compliance burden for BSA reporting increases for banks, resulting

I can be reached at

involved in ICBSD and ICBA. This level of participation is encouraging to me. Community Banks Build Strong Communities. Let’s keep telling our story! or 605-660-4790. ICBSD 2019 7


First Hand Experience

Dusty Johnson

“I enjoy immersing myself in the intricacies of ag policy, but my time as a freshman member of the House Education and Labor Committee has allowed me to explore plenty of new avenues.”

United States Representative (R-S.D.)

As a self-described policy guy, I’ve spent a lot of time researching topics like agriculture and telecommunications. It’s no secret that when elected I was laser focused on gaining a spot on the Agriculture Committee for South Dakotans. Now as a member of two very different committees, I’ve appreciated how many topics Members of Congress have the opportunity to study and debate. I enjoy immersing myself in the intricacies of ag policy, but my time as a freshman member of the House Education and Labor Committee has allowed me to explore plenty of new avenues. The policy aspect of my job is fantastic, but after having participated in nearly a dozen full committee hearings and markups on Ed & Labor, it’s the compelling personal narratives from witnesses that leave me feeling motivated and inspired. Most committees are focused on bringing in experts and eggheads, but there is a uniquely important lesson to learn from those who have faced these challenges directly. Typically, at the beginning of a new Congress, it takes time to get everything up and running on committees. Ed & Labor however, has hit the ground at a steady sprint. I’ve had the opportunity to hear from dozens of individuals on a range of topics from raising the minimum wage to the cost of higher education. One of the first hearings in Ed & Labor was related to preexisting conditions. Health care is essential – we all know that – and I truly believe that protecting individuals with preexisting conditions is of utmost importance. Chad Riedy is a prime example of the necessity of protecting individuals with chronic conditions. Chad is a husband, father, and a tough and determined son of a gun. He was diagnosed with cystic fibrosis (CF) at three years old. Despite years of research and development, there is no cure for CF and it’s not uncommon to receive a lung transplant if you want to survive. Chad was told he wouldn’t make it past his twelfth birthday, today he is a 37-year-old father of two. During the hearing, pride was beaming off his boys faces as their father spoke. During a hearing on the affordability of college, I was struck by the testimony of Ms. Parker, a single parent and college student. Ms. Parker is the definition of hard work and ambition. Despite the obstacles she has faced, she never gives up and has held multiple jobs at a time to make ends meet. She expressed the importance of being one’s own advocate and staying persistent in a system that is complicated to navigate. Ms. Parker exemplifies the famous Calvin Coolidge quote, “Nothing in this world can take the place of persistence.” First-hand experience is just as valuable as objective, nuanced data-driven opinions, and these individuals who bravely take a seat at the witness table are proof of that. These witnesses got to where they are today, testifying before Congress because of a can-do, determined spirit to succeed. I’m honored that they shared their story of persistence and grit with Congress.

8 The bottom line



The ICBSD Political Action Committee helps provide South Dakota community banks with a strong voice in state politics through contributions to candidates for state elected offices. These contributions help ensure we have a seat at the table when issues affecting your bank are being discussed in Pierre.

Thank you for supporting the ICBSD Political Action Committee! PAC 100 Contributors: Terry Torgerson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CorTrust Bank Monte Troske . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Farmers State Bank of Turton Ron E. Troske . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Farmers State Bank of Turton Mark R. Troske . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Farmers State Bank of Turton Rory Troske . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Farmers State Bank of Turton Terry J. Vogel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Farmers State Bank of Turton Wayne Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Farmers State Bank of Turton Bob Smithback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reliabank Mark Lee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reliabank Claire Konold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reliabank Hugh Bartels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reliabank David Johnson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reliabank Jan Johnson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reliabank David Ebbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reliabank Mark Tetzlaff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reliabank

Together, let ’s make it happen.

Gene Uher Call me at 605.201.1864

Based in Sioux Falls, S.D., serving South Dakota, Nebraska, Minnesota and Iowa

Why choose Bell as your bank’s lending partner? As your partner, we share your values. You’ll find the community banking service, integrity and trust you’re used to. Commercial & ag participation loans Bank stock & ownership loans Bank building financing Business & personal loans for bankers

We do not reparticipate any loans.

Contribute Our thanks in advance for your support of the PAC 100.

Your checks can be mailed to: ICBSD PAC, PO Box 615, Watertown, SD 57201

Perry Rassler

Denise Bunbury

Jeff Restad

Mary Voss

Tom Ishaug

763.242.7518 608.234.1438 320.759.8401 515.577.0070 701.866.4676 Based in Minneapolis, Minn., serving Minnesota and Western Wisconsin

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Based in Des Based in Fargo, Moines, Iowa, N.D., serving North Dakota serving Iowa and Nebraska and Minnesota Member FDIC


Your PAC 100 contribution supports legislative candidates throughout our bankers’ districts. Contact Megan Olson to learn more.

ICBSD 2019 9

21102 AD Independent Community Bankers of SD 2019 Update_Gene_V2.indd 2/20/19 1:48 PM1


Rounds’ Report China Trade Negotiations: A Primer

Mike Rounds

United States Senator (R-S.D.)

“Trade deals are vital to the long-term stability and viability of our ag and manufacturing industries in South Dakota. We need stability in our commodity prices and we need strong trade deals.”

South Dakota’s manufacturers and ag producers have been at the tip of the spear in our trade negotiations with China. At a time when farmers and ranchers are facing the worst agricultural crisis since the 1980s, it’s more important than ever the administration finalizes a trade deal with them that is good for American producers.

good faith. When we have access to more markets in which we

For the past two years, President Trump and members of his administration have been working on a trade deal with China that will level the playing field and stop their trade ‘cheating’ once and for all. China has been an unfair trading partner for decades. When President Trump took office, the average tariff we imposed on China was approximately 4 percent. Conversely, China’s tariffs on U.S. goods were about 10 percent. While this alone is concerning, they are also stealing U.S. intellectual property, committing cyber espionage and engaging in unfair trade practices in order to gain advantages for Chinese companies. According to the U.S. Trade Representative, “Chinese theft of American IP currently costs between $225 billion and $600 billion annually.” This must be stopped.

the end of the day, their message to me and to the president

While we appeared to be close to a deal just a few weeks ago, China backtracked at the last minute and tried to renegotiate previously-agreed upon terms. In response, the U.S. raised tariffs on some Chinese imports and China retaliated with additional tariffs on U.S. goods that will take effect June 1. Nobody wins in this situation – raising tariffs on China will ultimately hurt the economies of both countries. More importantly, our farmers, ranchers and manufacturers are already paying a price. Ideally, we would have signed the Trans-Pacific Partnership (TPP) and finalized new agreements with our trading partners in Europe, North America and elsewhere to create a united front and put pressure on China to come to the negotiating table in 10 The Bottom bottom Line line

can sell U.S. products, the stronger hand we have in dealing with China. When I speak with South Dakota producers and manufacturers, the majority of them tell me they want a trade deal in place with China, but they understand it needs to be a fair deal. At is that they’re hurting and they can’t take much more of this uncertainty, but they support the president’s goal and want him to get the job done, as soon as possible. I continue to share their message with the White House every chance I get. South Dakota producers and manufacturers are also paying attention to the U.S.-Mexico-Canada (USMCA) trade agreement that would replace the North American Free Trade Agreement, or NAFTA. Canada and Mexico are vital trading partners that currently buy more than one-third of U.S. merchandise exports. The president has negotiated and signed the USMCA, and now it’s up to Congress to act. Trade deals are vital to the long-term stability and viability of our ag and manufacturing industries in South Dakota. We need stability in our commodity prices and we need strong trade deals. With net farm income down 50 percent for the fifth year in a row, farmers and ranchers need a good trade deal in place now so they can have access to markets in which to sell their products. Like the many farmers, ranchers and manufacturers I talk to whose livelihoods depend on securing a trade deal, I continue to support the president’s efforts to get the best deal possible. It’s time for China to stop moving the goalposts and negotiate with us in good faith so we can finally get a trade deal in place.


Congress Must Act to Strengthen Consumer Data Privacy john Thune

United States Senator (R-S.D.)

“Let me say at the outset, Americans deserve to have confidence that their information is being used appropriately and with their knowledge or consent, but it’s undeniable that we’re living in an era where people are sharing more information than ever before.” There’s little doubt that technological advancements have, in many ways, made life easier and more efficient for the American people. We have better and safer modes of transportation, faster ways to communicate and purchase items for ourselves and our families, and more effective tools to monitor and deliver health care. While there are plenty of advantages to these advancements, Americans are finding out that it’s not always risk-free. Access to the latest cutting-edge technology sometimes means trading or sharing personal data, and there are growing concerns over how that data is being used, stored, and even sold. Let me say at the outset, Americans deserve to have confidence that their information is being used appropriately and with their knowledge or consent, but it’s undeniable that we’re living in an era where people are sharing more information than ever before. I believe it’s now up to Congress to find the right balance of protecting consumer privacy in today’s ever-changing world, which must be a top priority, without passing onerous requirements that hinder innovation. Think about it for a moment. You wake up in the morning and reach for your phone. You respond to a few text messages and open Facebook to catch up on your newsfeed and post a picture from your kid’s baseball game. Your feet hit the floor, and you tell your Amazon Echo or Google Home device to turn

on the lights, adjust the thermostat, and play music. You leave the house, tweet about your upcoming weekend trip, and stop for a quick cup of coffee. You tap and pay with your Apple Watch before connecting to the coffee shop’s free WiFi to email your doctor’s office about an upcoming appointment. While there’s nothing abnormal about what I just described, simply going through your daily routine can expose multiple layers of your personal data and privacy to legitimate companies, unknown third parties, or even hackers – all without you thinking twice about it. That is why there are serious and urgent concerns about data privacy, and consumers are right to demand action. As I’ve said before, the question is no longer whether we need a federal law to protect consumers’ privacy. The question now is what shape that law should take, which is why I favor passing bipartisan legislation that sets a single national data privacy standard so companies and consumers don’t have to navigate 50 different sets of rules, a scenario that would be costly and overly burdensome. I’m no stranger to the topic of data privacy. In 2017 and 2018, as thenchairman of the Senate Commerce Committee, I convened hearings after the massive Equifax data breach and after the political intelligence firm Cambridge Analytica accessed the personal data of millions of unsuspecting Facebook users. The committee

discussed the European Union’s General Data Protection Regulation, which has already taken effect, and California’s new privacy-related law that is set to take effect less than one year from now. And, in respective hearings with industry leaders and consumer advocacy groups, we directly evaluated what privacy legislation might actually look like. Having been a leader in this effort for some time now, I have a good sense of where the momentum is heading, which is why I welcomed an invitation from the current chairman of the Commerce Committee to join a bipartisan working group that is tasked with putting pen to paper on privacy legislation. I’m optimistic that we’re moving in the right direction, and, if it continues, I’m confident Congress could be in a position to consider a bill as soon as this year. This isn’t the first time Congress has tackled new and emerging privacy concerns. Congress passed the Children’s Online Privacy Protection Act, the Health Insurance Portability Act, and the Gramm-Leach-Bliley Act, which modernized how financial institutions use consumer data. As technology and infosharing continue to evolve, so too must our privacy laws. That’s why I’m hopeful we can enact legislation to further strengthen today’s privacy protections so consumers can have greater peace of mind over something as inherently personal as control over their own data. ICBSD 2019 11

What’s in Store:

Campbell County Bank Saves Local Grocery Store by Hannah Merritt Marketing & Public Relations For rural communities, the loss of a business has devastating effects. This is exactly what Herreid, SD faced last fall when the town grocery store closed its doors. Just when the community thought the doors had been locked for the final time, an unsuspecting purchaser stepped in. According to Dean Schwartz, President and CEO of Campbell County Bank and Herreid resident, the store had been closed for two months when he began hearing grumblings from community members about the inconvenience. “People were complaining! Nobody was happy, especially the elderly people who had to drive 25 miles one way for their groceries. In the summer that’s not so bad, but in winter that’s a concern,” explained Dean. According to Schwartz, the Campbell County Bank had a Small Business Administration guaranteed loan on the property. Through conversations with the SBA, he learned they had plans to advertise and sell the property. The bank couldn’t bear the thought of the devastating impact the loss would have on the community and knew they had to take action. “Losing a grocery store in a small town is a lot like losing a school. The bank knew if we didn’t buy it, Herreid would never have a grocery store again. The building would go to auction with the possibility of being 12 The bottom line

turned into a storage unit. We couldn’t let that happen,” he explained. The idea was met with apprehension from members of the Campbell County Bank board of directors. Naturally, the board had concerns with the cost of renovations and whether or not the store would be profitable. Ultimately, the deciding factor wasn’t about the profit and loss statement. Instead, it came down to what was in store for the community if it didn’t reopen. They knew it had to be done, but the sixty-yearold building needed a lot of work before reopening. “I told them don’t worry! I’ll make it happen,” chuckled Dean. With the board’s blessing to proceed Dean, along with other bank employees, rolled up their sleeves and began gutting the building. All hailing from farming backgrounds, Dean and his crew were no strangers to hard work. After a months’ time, eight large dumpsters of debris, and too many man hours to count, the crew was ready to start putting things back together. “The gutting was kind of fun! We were getting dirty and busting stuff down! We did this all during normal business hours and weekends. One person would work at the bank while the rest would head to the store. We took turns doing this,” recalled Dean. With the community in mind, all materials for the massive project were locally sourced. Even individuals from within the community volunteered their time to help

“That is hometown banking! It’s amazing what can happen when a community comes together...”

complete the remodel. By the end of the renovation, nearly everything inside the building had been replaced – electrical, insulation, windows, ceiling, lighting, flooring, equipment, HVAC and more! The renovation was completed in early November, and the store opened for business in mid-November of 2018. Since opening day, Dean says the store has done well. “The community has been very supportive. Business has been good,” he said. One of the biggest challenges about the endeavor, Dean says, has been finding a qualified owner willing to take over the business. The first store owner to take on the task was a gentleman from Hermosa, SD who had experience with grocery store ownership and also had ties to the Herreid community. Unfortunately, due to health complications, the owner had to go back home for an undisclosed period of time. Prior to leaving, the owner suggested temporarily closing down the store. “I remember thinking that’s not going to happen! Fortunately, a few people within the community came forward and offered to help until we figure out a long-term solution,” Dean said. Campbell County Bank’s commitment to community doesn’t stop there. As within most rural communities, job opportunities and updated housing aren’t easy to come

by. The Campbell County Economic Development Board, along with Campbell County Bank, are doing their part to fill these voids. After years of hard work and negotiations, the CCEDB brought in some major vendors including a worldrenowned hog genetics company and a ninety-nine-megawatt wind farm. These projects paved the way for other development projects, including a second wind farm which is currently under environmental studies. Combined, these two additions to the community have created over 65 local jobs. “We’re very proactive in development,” said Dean. To fill the housing void, Dean and a group of Herreid area natives formed a non-profit corporation with the mission of bringing modern housing options to the community. After a series of community meetings and fundraising campaigns, the group raised $180,000 in a short period of time. With the money, they were able to build a spec home. “We sold the spec home to a young family in the community before it was even completed.” he said. The group has built two governor homes on basements, purchased an apartment building, and even taken on a few “fixer uppers” all in an effort to reinvest in the community. In total, the group has brought 12 new housing options to the community. For Dean and his team at Campbell County Bank, providing services and support to their local communities isn’t just a mission statement written on paper, it’s a way of life. “We’re fighting tooth and nail for our community,” Dean stated. “That is hometown banking! It’s amazing what can happen when a community comes together,” Dean said proudly. ICBSD 2019 13


you should

KNOW by Hannah Merritt Marketing & Public Relations

The apple doesn’t fall far from the tree. This phrase is the perfect way to describe ICBSD co-lobbyists, and father-son duo, Matt and Dean Krogman. With over 35 years of experience, Dean isn’t a novice to the South Dakota state legislature. He has served as chief lobbyist for the South Dakota State Medical Association, the ICBSD and also a state representative for Brookings County, to name a few. The relationships and impact Dean has had during his allencompassing career in Pierre inspired his son, Matt, to follow the same path. “When I was in grade school, my dad served in the legislature. When we had a break in school he’d take me with him to Pierre for the week, and I really enjoyed it. Watching him interact with lobbyists and other legislators really got me interested in both politics and the relationship aspects of lobbying at an early age,” said Matt.

Matt Krogman, a Brookings native, may be new to the ICBSD, but when it comes to advocating for change he is a seasoned veteran. Throughout the last ten years, Krogman has represented many sectors on Capitol Hill including education, business and economic development.

Matt Krogman ICBSD’s New Co-Lobbyist

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Matt Krogman, a Brookings native, may be new to the ICBSD, but when it comes to advocating for change he is a seasoned veteran. Throughout the last ten years, Krogman has represented many sectors on Capitol Hill including education, business and economic development. As lobbyist, he is responsible for being the expert on all industries he is representing, understanding the issues within each and working with legislators to creatively solve problems. “Every day is something different! I enjoy the daily, face to face conversations I have with legislators. My effectiveness is dependent on the relationships I form, and my ability to help legislators understand issues from my clients’ perspective. It can be very challenging at times, but that’s not something I get to do at my every day job and I really enjoy it!” said Krogman. While Matt’s experiences throughout the last decade have proven to be great learning opportunities, he admits the best advice has come from his father. “Honesty is key! All you have is your credibility. If you lose that with legislators they’ll never trust what you’re telling them again. If they ask a question and you don’t know the answer, do your research and get back to them in a timely manner,” explained Matt. With 30% of the legislators turning over every two years, one of Matt’s priorities for each session is to establish and grow relationships with new leaders. With this turnover, there’s also an opportunity to help legislators become more familiar

“Every day is something different! I enjoy the daily, face to face conversations I have with legislators. My effectiveness is dependent on the relationships I form, and my ability to help legislators understand issues from my clients’ perspective. It can be very challenging at times, but that’s not something I get to do at my every day job and I really enjoy it!”

with the independent community banking industry, what’s working and the challenges it faces. In doing so, legislators are equipped with all of the information and facts necessary to make decisions on specific pieces of legislation. Specifically, Matt and Dean kept a close watch on HB 1184, which if passed would have authorized the operation of business development banks, ICBSD opposed this bill and it failed in committee. The second piece of legislation the team focused on pertained to the ownership of skimming devices. Under previous law, individuals could not be prosecuted for simply owning a skimming device. They had to be caught using the device to be prosecuted. We supported an effort to change the law to make it illegal to posses or own one of these devices if you have knowledge that it was being used to commit fraud. We were successful in that effort. When Matt isn’t in Pierre, he can be found attending SDSU athletic events, spending time with his wife and kids or, if the weather allows, playing a round of golf. We are excited to welcome Matt as he joins his dad as part of the ICBSD team!

By scooping up an SBA 504 loan through First District Development Company Benefit your bank by: ● Enjoying first lien position, while lending only 50% of value ● Enabling participation in larger transactions ● Packaging and processing provided by FDDC

Benefit your customer by: ● Decreasing their equity injection requirement to just 10-20% of the total project ● Offering them a sweet below market, fixed rate ● Providing long term financing on 30-40% of the project

For More Details: 605-882-5115 ~

ICBSD 2019 15

Products. Education. Guidance.



40 30

speaking engagements in 2018 years of community banking service

Balance sheet management can be complicated. Finding a team that can help your community bank learn and grow every step of the way doesn’t need to be.

Learn more from the professionals community banks trust. Visit us at or contact us at 800-422-6442. 16 The bottom line

Institutional investors only. Members FINRA/SIPC.


benefits liquiditynetwork

Exclusive Member Benefit:

ICBSD/ICBND Cooperative Liquidity Program The ICBSD/ICBND Cooperative Liquidity Program (“Liquidity Program�) is a cooperative bank-to-bank network established to provide an additional funds management tool for ICBSD/ICBND member banks. ICBSD and ICBND provide a communication link between Liquidity Program members who have available liquidity with those members who have short-term funding needs. ICBSD/ICBND is responsible for maintaining and communicating the Liquidity Program member contact information. Participating banks are not legally bound to provide funding or even respond to requests as part of their participation in the Liquidity Program. There is no fee assessed by ICBSD or ICBND in conjunction with hosting the Liquidity Program and all funding terms, pricing, documentation and other conditions are negotiated directly between participating members. The Liquidity Program is tested at least twice per year to assure its effectiveness as a source of funding and to validate the availability of funds for participating members. The program was tested June 7, 2019. The results are as follows: Timeframe: 5 hours

00:15 00:30 01:00 02:00 04:00

15 banks pledge total of $4,475,000 21 banks pledge total of $6,014,000 26 banks pledge total of $7,104,000 27 banks pledge total of $7,349000 30 banks pledge total of $8,048,000

The Liquidity Program is open to all ICBSD and ICBND member banks. To become a member, visit

ICBSD 2019 17


you should

KNOW by Hannah Merritt Marketing & Public Relations

Kevin Burr Senior Vice President, ICBM Insurance

“My philosophy is to always try new things, and be outside of my comfort zone. When I’m there things don’t always go my way, and I’m able to gain experience. I like to gain experience,” Few people in the independent community banking industry can say they have a more diverse background than Kevin Burr of ICBM Insurance.

Kevin is not your typical insurance agent, though. Kevin began

“My philosophy is to always try new things, and be outside of my comfort zone. When I’m there things don’t always go my way, and I’m able to gain experience. I like to gain experience,” says Kevin.

volunteer fire fighter, EMT, equestrian steward and radio DJ

This philosophy, and his protective nature, have been Kevin’s north star, guiding him through his forty-five year career in the independent community banking industry. Today, he is the Senior Vice President of ICBM Insurance (formerly Community Bankers Financial Services). ICBM Insurance writes insurance exclusively for community banks. “I’ve always enjoyed working with people. I love helping my customers not only financially but also when it comes to protecting their assets,” said Kevin. 18 The bottom line

his career as a banker with First Bank System in East Grand Forks, Minnesota. Because of his experiences as a banker, (yes, you read that right), he is able to look at things differently compared to other agents. During his time as a banker with First Bank System, Kevin frequently helped his customers on their farms running tractors in the field, hauling loads and even planting sugar beets, despite having little experience in farming. It was his way of stepping outside his comfort zone in order to experience new situations. “Understanding the financials of my customers was never enough. I wanted to walk in their shoes, and learn from them. This gave me a true understanding of the time, effort and risk my farm customers put on the line day in and day out,” said Kevin.

During his years as an independent community banker, Kevin saw some of the best economic times and also the worst. The 1980 farm crisis was “rock bottom”, and ultimately one of the most dangerous situations of his career. With the cost of commodities down and interest rates soaring, along with many foreclosures, relationships that Kevin formed with his customers had been shattered. “During the crisis, I went out to a farmers place to inspect collateral. I was greeted at the door with a double barrel shot gun. That was the last farm visit I ever went on,” recalled Burr. Kevin went on to say, “As a banker, I understood the economics behind the crisis and the job I had to do. However, I put myself in the farmers’ shoes and was heartbroken to see the impact. Everything they worked for, their livelihood, was gone.” Although there were many highs and lows, Kevin says he wouldn’t trade his past experiences. Through it all, he gained experience which ultimately taught him the importance of building strong relationship with customers – relationships that are built on trust, credibility and honesty. Kevin shifted his career path and applied his understanding of banking and relationships to a niche market – community banking insurance. Kevin reunited with his longtime partner, Kevin Christians who founded Community Bankers Financial Services, an insurance

agency that exclusively writes for community banks. In 2011, the Independent Community Bankers of Minnesota bought 70% of the company. In 2015, they purchased the remaining shares which moved the agency to Minnesota where they are currently located. ICBM Insurance is licensed to write insurance in Minnesota, South Dakota, North Dakota, Illinois, Iowa and Wisconsin. Kevin often jokes, “when you call the office just ask for Kevin and you can’t go wrong!” “I’ve walked the walk! I bring my knowledge and experiences as a community banker to the table. Because of that, I’m able to structure my customers coverage to offer them the best possible insuring agreements and pricing. This is where I excel, and what sets me apart from other insurance agents,” explains Kevin. “It is always my goal to put the banker in a position to make an informed decision about their insurance program.” “Because we are owned by a premier independent banking association, everything we do is for the benefit of community banks. As an ex-banker, I am able to look at scenarios and coverage from my customers’ point of view,” said Kevin. For more information on ICBM Insurance visit: By doing business with ICBM Insurance you directly help to benefit the bottom line of ICBSD through our strategic partnership.

ICBSD 2019 19


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Annual Retreat

What can you Expect? Now in it’s 36th year, our annual retreat is a cornerstone for independent, community banking. On July 25th – 27th, independent community bankers from across the state, as well as industry vendors, will come together at Sylvan Lake Lodge in Custer State Park for three days of networking, education and fun activities for the entire family! Here’s what you can expect from this years retreat: The fun kicks off Thursday, July 25th at the ICBSD PAC Golf Scramble! This year’s scramble is taking place at a new location – Arrowhead Country Club in Rapid City!

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REGISTER TODAY! T hursda y, J ul y 2 5 th 8:00AM Golf Registration/Check-in 8:30AM Golf transportation on your own Tournament & PAC Fundraiser Arrowhead Country Club 3675 Sheridan Lake Rd Rapid City, SD 57702 1:30PM Lunch for golfers at Arrowhead Country Club 6:00PM Welcome Party at State Game Lodge Event Barn (transportation on your own) 13389 US Hwy 16A Custer, SD 57730 Have your old time photo taken in Woody’s Old Time Traveling Photo Booth! 7:00PM Dinner at State Game Lodge Event Barn, Golf Prizes, Yard Games

11:15AM – 11:45AM ICBSD Annual Meeting 12:00PM – 1:00PM

Lunch at the Auditorium

2:00PM Crazy Horse Memorial (transportation on your own) 6:00PM Dinner at Laughing Water Restaurant, Crazy Horse National Memorial

S aturda y, J ul y 2 7 th 7:00AM – 9:00AM

Breakfast at the Lodge

8:30AM – 9:30AM Beginner Level Lakeside Yoga All ages and fitness levels are welcome! Mats will be provided; however, you’re welcome to bring your own!

9:30PM Glow Bingo begins in the Auditorium, Sylvan Lake Lodge. Don’t forget to dress up! There will be prizes for the overall “best glow dressed” for men, women and kids!

9:00AM – 9:45AM “A Day Without Cyber Security” with Nick Podhradsky of SBS CyberSecurity

F R I da y, J ul y 2 6 th

10:30AM – 10:45AM Break

7:00AM – 9:00AM

10:45AM – 11:15AM Faster Payments with Kassi Arana Quimby of the Federal Reserve Bank of Chicago

Breakfast at the Lodge

8:30AM – 9:30AM Beginner Level Lakeside Yoga All ages and fitness levels are welcome! Mats will be provided; however, you’re welcome to bring your own! 9:00AM – 9:45AM “The New Age of Strategic Planning” with Jaime Taets of Keystone Group International 9:45AM – 10:30AM “A Vision for Keeping it Local: Succession and Ownership” with Don Noland, Rivers Edge Bank and Jim Johnson Chairman of R&J Financial Corporation 10:30AM – 10:45AM Break 10:45AM – 11:15AM “The Changing Landscape of Liquidity”, Michael Erhardt, ICBA Securities

9:45AM – 10:30AM “The Age of Social Media” with Darrell DeWinter of VGM Forbin

11:15AM – 11:45AM ICBA National Report with Timothy Zimmerman, Immediate Past Chairman 12:00PM

Lunch at the Auditorium

12:15PM – 1:15PM Motivational Speaker: C. Willi Myles 2:45PM – 5:45PM Fun begins at Rushmore Tramway Adventure Park at 2:45! 7:00PM Social time at the Auditorium, PAC auction opens, craft beer tasting, root beer tasting, live music 8:00PM

PAC Auction closes, Dinner

9:30PM Campfire songs with Keith and extreme s’mores ICBSD 2019 21




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Meet our presenters We’re fortunate to have the following speakers share their time and expertise with us at this years retreat! Here is what you can expect from each banker education session:

The Age of Social Darrell DeWinter, VGM Forbin Darrell DeWinter is an Account Executive for VGM Forbin where he helps community financial institutions achieve their goals through web technology. Darrell has served the financial industry for over 15 years and holds a degree in marketing from Upper Iowa University. He and his wife, Liz have three boys ages 11, 9 and 4 who keep them busy with several activities including travel baseball, basketball and anything related to police officers as their 4 year old is a big fan of those in uniform. Darrell also serves on the local school board and is a self-proclaimed, “weather geek”, as he has been chasing severe storms since he was 15 years old. The social media world has exploded in the last 5 years with networks like Facebook, YouTube, Instagram, Twitter, LinkedIn and the list goes on. Is your bank getting in on the action? In this presentation, you will learn why it is important for your bank to get involved, where you should be represented and the keys to being successful online. Learn what is working for financial institutions and what is not. Finally, what everyone wants to know, what is the ROI and how can we measure it?

The New Age of Strategic Planning Jaime Taets, Keystone Group International Jaime Taets spent 13 years in a large corporate environment in a variety of leadership roles before leaving to start her own business. She is currently the CEO of Keystone Group International, a firm focused on organizational strategy, growth and high performance. She has lived and traveled globally and strongly believes as business leaders, across all industries and markets, we need to focus on creating strategic clarity in our organizations to build the foundation for healthy, scalable and sustainable growth. Gone are the days where strategic planning was a 2-day event each year that created a binder full of good information but lacked a way to truly engage the entire organization around the goals. In this session we will discuss the new age of strategic planning and how organizations need to think differently about their strategic approach to drive truly impactful and sustainable growth in their organizations. With the evolving workforce dynamics and the impact of culture and engagement on our business results, business leaders need to find a strategic approach to defining their vision and also engaging their employees to drive that vision. Harnessing the high performance of your team is truly a competitive advantage in the marketplace. Join us to learn about an approach that has proven results in creating a strategic plan that is clear, actionable and understood by the organization. The New Age of Strategic Planning is here and can be a powerful catalyst for growth and increased profitability in your organization. 22 The Bottom bottom Line line

A Day Without Cyber Security Nick Podhradsky, SBS CyberSecurity Nick Podhradsky, Senior Vice President at SBS CyberSecurity, is on a mission to help organizations understand basic cybersecurity principles and incorporate a stronger culture of security. Since 2016 Nick has hosted the monthly “Hacker Hour” webinar series, which aims to help attendees understand basic cybersecurity principles. Nick has been selected as a guest lecturer at the Dakota State University GenCyber camp and frequently speaks at local Chamber of Commerce groups and other user groups. Nick has 10 years of experience in the banking industry and holds a master’s degree in Educational Technology from Dakota State University. He is a Certified Banking Security Manager and Certified Banking Incident Handler. “A Day Without Cybersecurity” What would happen if you or your business went one day without cybersecurity? The headlines in the news tell us that cybersecurity is a huge problem in the world, but are we really in as bad a shape as they say? This session will discuss the current status of cybersecurity, emerging technologies that will challenge all businesses, and simple things that you can do to build or maintain a strong culture of cybersecurity.

A Vision for Keeping it Local: Succession and Ownership Don Noland, Rivers Edge Bank and Jim Johnson, R&J Financial Corporation Don Nolan, President, First State Associates & President/CEO Rivers Edge Bank, Marion, SD. Nolan has 35 years of rural community bank experience including 29 years as bank President. Nolan, along with others, was instrumental in establishing a bank holding company structure built on cooperation of community bankers, bank staff and community investors. Jim Johnson, Chairman of R & J Financial Corp., Chairman of People Savings Bank, Elma, IA, and Chairman of Security State Bank, Sutherland, IA. Security State Bank is consistently recognized by ICBA has one of the highest performing community banks in the nation. Johnson was instrumental in partnering to establish First State Associates. “A Vision for Keeping it Local: Succession and Ownership” Nolan & Johnson will speak to the partnership and vision that has led to the unique ownership structure of their respective bank holding companies. These structures combine the investment of bank staff and community investors to achieve a cooperative approach to local community bank ownership. These holding company leaders will also share their vision for long-term local ownership, as well as, succession planning for their rural banks.

For more information on the retreat agenda, speaker topics and to register visit ICBSD 2019 23



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Meet our presenters





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The Changing Landscape of Liquidity Michael Erhardt, ICBA Securities Michael Erhardt is a Senior Vice President in the Investment Strategies Group for ICBA Securities. He works closely with financial institutions on balance sheet and investment portfolio strategies, liquidity management, evaluation of asset/liability exposure, and liability and loan pricing. Michael has over 18 years of experience with financial institutions, including serving as Executive Vice President and Chief Financial Officer for Paragon National Bank from 2004 until 2011. Prior to joining Paragon, Michael was employed by Enterprise National Bank from 1994 until 2004. He holds a Bachelor and Master of Accountancy degree from the University of Mississippi. He is a certified public accountant and a graduate of Louisiana State University’s Graduate School of Banking. Liquidity is a key concern among financial institutions and regulators. Loan growth is outpacing deposit growth while non-core funding is becoming a larger percentage of total assets. Competition for deposits is fierce as the largest banks search for high-quality, LCR-compliant retail deposits and the increase in shortterm rates has spurred growth at the online banks offering more attractive yields. During this session, we will discuss “best practices” for liquidity risk management, regulatory expectations, and contingency funding strategies to help community banks supplement core deposit growth.

Faster Payments Kassi Arana Quimby, Vice President, Federal Reserve Bank of Chicago Kassi Arana Quimby is a Vice President at the Federal Reserve Bank of Chicago, and works on the Federal Reserve System’s Strategies for Improving the U.S. Payment System initiatives. Kassi has been involved in several key Federal Reserve industry initiatives over the past several years, including helping to lead the Faster Payments Task Force and several follow-on efforts including the Interim Collaboration Work Group; the Rules, Standards, Laws, and Regulations Work Group; and the establishment of the U.S. Faster Payments Council. Prior to joining the Federal Reserve Bank of Chicago, Kassi worked for the Federal Reserve Board of Governors in Washington, D.C. and had oversight responsibility for functions supporting data intake and use across policy and supervisory areas of the Federal Reserve. Kassi has a BBA in finance and management from the University of Miami, an MBA from George Washington University, and a Project Management Professional (PMP) certification from the Project Management Institute. Over the years, the Federal Reserve has worked alongside the industry to pursue real-time, safe, highly secure, efficient, broadly inclusive and ubiquitous payment services in the U.S. During this session, attendees will learn about the efforts of industry work groups focused on real-time payments, the Fed’s initiatives to assess any needed improvements to its services in pursuit of real-time payments, and the collaborative work to identify and mitigate payment security risks. Hear from the Federal Reserve on how you should prepare for the future of the U.S. payment system. bottom Line line 24 The Bottom

Save the

Date sept

17 2019

Event: Risk, Response, Reputation Place: Crave Sioux City, IA

13 2019


upcoming events

Event: Eye on Agriculture Place: Sioux Falls Convention Center Sioux Falls, SD

Learn more about these upcoming events at

IN the

NEWS Join us in congratulating our fellow community bankers on their recent accomplishments! featuring.... • Bell Bank • Campbell County Bank • Heartland State Bank • Reliabank • First Dakota National Bank send your happenings to:

26 The bottom line

Holzwarth Hired at Bell Bank Todd Holzwarth has been hired as SVP/ correspondent banking business development officer at Bell Bank. In his new position, Holzwarth will source loan participation and bank stock loans in North Dakota and South Dakota. Originally from Freeman, S.D., Holzwarth earned a master’s degree from the University of South Dakota and has been in the banking/finance field for 23 years. Holzwarth spent the last 11 years at United Bankers’ Bank. Holzwarth lives in Parker, S.D. He and his wife, Jaci have three children. Bell Bank, headquartered in Fargo, N.D., is one of the nation’s largest privately held banks, with assets totaling more than $6 billion. Through its correspondent banking department, Bell does business with more than 1,000 banks in 16 states, providing commercial and agriculture participation loans, bank stock and ownership loans, bank building financing, and business and personal loans for bankers.

Reliabank Campbell County Bank Celebrates 75 Years!

“The Campbell County Bank celebrated 75 years recently. Thank you to Ellen Weisbeck and Bonnie Schick for the beautiful, delicious cake. Pictured with the cake are board members Troy Beck, Myron Rieker, Bruce Brander, President Dean Schwartz and Bob Huber. A big thank you also to the Auxiliary for the delicious catered meal and decor!”

Heartland State Bank Heartland State Bank & Heartland Financial Services Inc. were happy to support the Community Memorial Hospital and Clinic Foundation Golf Tournament Fundraiser!

Congrats to the Reliabank employees who have received recent promotions! Erik Barnes has been named manager of the Tea branch to replace Jenni White, who is moving out-of-state with her family. Barnes had been serving as a commercial loan officer in Watertown. Adam Lund has been named to a newly created operations leadership position. Lund has served the bank is a variety of ways, most recently as Humboldt branch manager. Lund will continue to work at the Humboldt location, enhancing bank wide operations. Jamie Westendorf will replace Lund as Humboldt branch manager. Westendorf has been with Reliabank since last summer and in the Sioux Falls branch since it opened in September.

Martin Peterson, Ag Banker at Plains Commerce Bank in Watertown, hit the fields. He delivered 50 lunches to local farmers and ranchers as a way to say ‘thank you’.

Bret Afdahl Elected Conference of State Bank Supervisors Chairman: The Conference of State Bank Supervisors (CSBS) announced the election of Bret Afdahl, director of banking in the South Dakota Division of Banking, as the new chairman of the CSBS Board of Directors. The election took place during the organization’s annual membership meeting in San Antonio, Tex., where new officers were also elected for 2019-2020.

ICBSD 2019 27

American Bank & Trust AB&T staff Gretchen Kinney, Jill Luque, Tasha Lee and Bryan Van Scharrel were recently recognized by Junior Achievement of South Dakota. Each of them has volunteered as a JA teacher in Huron for 5+ years and have made a great impact on student’s lives. Gretchen has volunteered for 18 years, Tasha for 8, Jill for 6 and Bryan for 5!

First Dakota National Bank First Dakota National Bank celebrated Pam Larson, Vice President and Real Estate Loan Officer at their Mitchell branch, on her 20th anniversary with First Dakota National Bank! Pam has been at the Mitchell Branch since it opened in 1999. Congratulations to First Dakota National Bank, Mitchell branch President, Trevor Dierks, on his 20th year at First Dakota National Bank! Trevor started at FDNB as a Commercial Loan Officer when the Mitchell branch consisted of an office made of two mobile home units at the current site on Norway Ave.

J Arlt

United Bankers’ Bank Welcomes J Arlt, Correspondent Banking Officer BLOOMINGTON, MN – John Peterson, interim President and CEO of United Bankers’ Bank (UBB) is pleased to announce the addition of J Arlt as Vice President, Correspondent Banking Officer. Arlt has over 18 years of banking experience and prior to joining UBB, he served as Chief Operations Officer at a South Dakota community bank. Arlt will serve as a correspondent banking resource for community banks in his home state of South Dakota and in neighboring North Dakota. A proactive change manager, Arlt will be responsible for managing customer relationships in addition to expanding relationships with community banks throughout North and South Dakota. “J’s operations background puts him in a unique position to serve our customers,” Peterson shared. “His thorough understanding of, and experience with the inner workings of a community bank along with a commitment to a high level of customer service makes him a perfect fit for the position and UBB.” Arlt holds a Bachelor of Science Degree in Business from Northern State University in Aberdeen, South Dakota.

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The 2019 Annual Retreat Thursday, July 25th – Saturday, July 27th Sylvan Lake Lodge in beautiful Custer State Park! Contact the lodge to reserve your cabin by calling 1-888-875-0001, and reference the 2019 ICB Annual Retreat and Sylvan Lake Lodge.


Be prepared to charge the first and last night’s deposit when making your reservation. If you do have to cancel, this deposit is refundable less a $25 cancellation fee if you do so at least 15 days in advance.

ICBSD 2019 29

Conrad Newburgh

United Bankers’ Bank Announces Management Transitions

Conrad Newburgh, Senior Lending Executive, Retires

DAWN TOLLEFSRUD BLOOMINGTON, MN – John Peterson, Interim President and CEO of United Bankers’ Bank (UBB), announces the retirement of Conrad Newburgh, Executive Vice President, Chief Credit Officer, along with the promotion of his successor, Dawn Tollefsrud. Newburgh’s official retirement date is set for Friday, May 10, 2019. As both Senior Credit Officer and, more recently, Chief Credit Officer, Conrad provided guidance and overall direction to UBB’s lending team, and was responsible for managing the aggregate risk in the bank’s loan portfolio. “Conrad’s knowledge and commitment to community banking contributed greatly to the growth and success of the UBB lending team,” states Peterson. “He has provided UBB with outstanding leadership and we are grateful for his service and dedication to our community bank customers.” Newburgh came to UBB in 2008 with 30 years of experience working in commercial lending for First Bank and 16 years at Excel Bank in Credit Administration and Lending. Since joining UBB, Conrad worked to expand services and improve credit quality. “An integral part of our culture was always, to do everything possible (within reason) to help our banks do their deals,” Newburgh explains. “I am confident that Dawn will lead in a way that will continue to provide our customers with the same, high level of customer service and expertise built into our culture that continues today.” For more information regarding United Bankers’ Bank correspondent lending services, contact Dawn Tollefsrud at 952-885-9424 or visit

30 The Bottom bottom Line line

Dawn Tollefsrud has been with UBB since 1998 and has worked side by side with Newburgh to ensure a seamless transition. “I’m confident in Dawn’s abilities and in the exceptional management team she’s built. Under Dawn’s leadership, the lending team will continue to get our customers’ loans done in a timely manner,” said Newburgh. “In selecting the next Chief Credit Officer, Dawn was the natural choice,” adds John Peterson.” Her 21 years of experience at UBB has given her a vast knowledge of the correspondent lending culture as well as the ability to learn from some of the best senior managers in the industry. I know she is up to the challenge and that we can expect great things from the lending team under her leadership.”

John Peterson

“John is a wellrespected community banking professional with over 34 years of banking experience,” said Grove. “The board and I value his business acumen, integrity and firsthand knowledge of community and correspondent banking and are looking forward to working with him as our Interim President and CEO.”

John Peterson named Interim Bank President and CEO at United Bankers’ Bank Bryan Grove, Chairman of the United Bankers’ Bancorporation, Inc. (UBBI) Board of Directors, formally announced that John Peterson will serve as UBB’s Interim President and CEO following the retirement of William “Bill” Rosacker on April 30, 2019. “John is a well-respected community banking professional with over 34 years of banking experience,” said Grove. “The board and I value his business acumen, integrity and first-hand knowledge of community and correspondent banking and are looking forward to working with him as our Interim President and CEO.” John has served the financial services industry for many years. Before joining UBB in 2002, he worked in retail banking for 17 years in bank operations, lending and branch management. In Peterson’s current role as Executive Vice President and Chief Marketing Officer, he oversees UBB’s marketing, correspondent banking sales and bank consulting services. He is a graduate of Minnesota State University Mankato, attaining degrees in Law Enforcement and Business Administration, with emphases in Finance and Economics. “The Board has engaged an executive search firm, Kaplan Partners, in the search for UBB’s next President and CEO.” Grove continues, “we are confident that the next person to fill the position of President at UBB will build off the bank’s exceptional service culture, as well as its strong financial and risk management in charting the bank’s strategy for success in the years to come.”

About United Bankers’ Bank Headquartered in Bloomington, MN, United Bankers’ Bank is the nation’s first bankers’ bank, and a full service provider of correspondent banking services to community banks in: Minnesota, North Dakota, South Dakota, Montana, Nebraska, Indiana, Iowa, Wyoming, Idaho, Ohio, Oregon, Washington, Michigan and Illinois.

For more information please visit ICBSD 2019 31

Beyond the Paycheck… Winning the War on Top Talent


CEO of Keystone Group International

In an environment where Gallup reports that 69% of the workforce is disengaged, it is becoming increasingly important for organizations to have a strong People Strategy in place. A clear and sustainable strategy is crucial to ensure that leaders can compete in the war on talent by recruiting and retaining the best and brightest people. As you create your People Strategy, there are a few foundational areas that you should consider assessing. These four areas are all essential to ensuring a successful result from your efforts: 1. Leadership Assessment

How capable are your leaders? Many organizations have people in leadership positions, but they don’t necessarily have strength in their leadership abilities and skill sets. Carefully assessing your team’s leadership capabilities can identify areas where growth can occur for the leaders and ultimately for the organization’s level of performance. 2. Culture Assessment

How healthy is your culture? Leaders want to believe that they have a strong culture built on strong values, but they must consider whether that culture extends throughout the organization or if it is contained to the top levels of leadership. Culture takes consistency and focus to build and maintain, so setting a baseline and checking in regularly is key to sustaining a healthy culture for your organization. 32 The bottom line

3. Communication Channels

“At Keystone, we are driven to change the conversation about Culture and Workforce Retention because workforce dynamics are changing at a rapid pace.”

Do you have the right communication channels in place for information to flow down through your organization and back up to leadership? The biggest dis-engaging factor for employees is frequently the lack of consistent and transparent communication. Assess whether you have the right channels in place, and once you do, make sure you ask the right questions at the right levels of the organization. The most innovative ideas and impactful issues are usually found at the “front line” levels of the organization. 4. High Performance Capability

Is your organization set up for high performance? Businesses need to have the best operating model in place to drive high performance in the organization. Here are a few indicators of high-performance capability: • Accountability is clear for every member of your team • You are measuring leading indicators and measurables in your business to help drive decisions • You have consistency in how, when and where you make key decisions and who is involved in those decisions • You have a strong set of core values that you use across all aspects of your business Notice that none of these four foundational areas talk about team-building events, community events, compensation, or benefits. It’s not that those areas aren’t important for retention and recruitment; they just aren’t the determining factors that someone considers when joining or staying with an organization. Top employees look at those events and benefits as icing on the cake if the four foundational elements are in place. Leaders must create a solid foundation in order to maintain a healthy culture; creating events, leadership development opportunities, strong benefits packages, etc. establishes the foundational elements necessary to greater impact organizations. At Keystone, we are driven to change the conversation about Culture and Workforce Retention because workforce dynamics are changing at a rapid pace. The companies that are proactive and consistent in their People and Culture strategy will have a competitive advantage in the years to come by going Beyond the Paycheck…and winning the War on Top Talent.

Reach out to us at or if we can help. ICBSD 2019 33

Short & sweet Cash-management instruments have relative value today

“What if?” How many times and how many ways has someone started a conversation like this with a community banker? Borrower: What if you hold the title on my ’83 Camaro as additional collateral? Examiner: What if Fannie Mae and Freddie Mac walk from their debt obligations?


Depositor: What if you pay me an extra five basis points on my $5,000 CD? Auditor: What if your Held-to-Maturity bonds go further underwater?

President and CEO of ICBA Securities

Lender: What if we put a 6% cap on this floater? Investor: What if you bought my 25 shares at three times book? What if you could purchase a full faith and credit instrument that pays monthly principal and interest, adjusts based on prime with no caps, has little or no prepayment risk, and out-yields the 10-year Treasury?

Highly valued All of the above qualities currently exist in a Small Business Administration (SBA) 7(a) loan pool. These have long been the choice of investors looking for additional yield on the very shortest end of the maturity spectrum. Most 7(a) pools adjust with the calendar quarter, although there are some monthly adjusters available. It is true that there are no rate caps, either periodic or lifetime. All these factors make SBA securities the most rate-sensitive of any in the market. There has been a lucrative two-way market for SBA pools for at least 30 years. Community bank lenders like the ability to make loans to qualifying borrowers that 34 The bottom line

don’t quite fit the standard parameters. They also like the ability to sell the guaranteed portions of the loans (usually 75%) and retain the servicing and the relationship. And they especially like selling them at big premiums. By the end of 2018, the balance on outstanding 7(a) pools was over $32 billion, which was a high water mark for the agency. Nine out of 10 loans originated are sold in the secondary market to a consortium of SBA poolers.

Response to demand To a community bank investor, the rub with the pools has historically been the high purchase prices. All of the characteristics, except for the premiums attached, are prized by risk-averse portfolio managers. While there are ways to manage those prepayment exposures, there’s no getting around the fact that an instrument that costs 110 cents on the dollar or more, and can prepay at the borrower’s behest, contains risk.

employment and inflation aren’t pointing to recessions any time soon. And just as the current level of fed funds is far below the normal stop-out point in a rate hike cycle, maybe we’re in for a protracted period of stable rates. If so, then the current yields on these 7(a) pools are quite handsome. It’s not too difficult to achieve a return of around prime minus 275 basis points (2.75%), which as of this writing equates into a true yield of about 2.75%. Where’s the value in that? For starters, the 10-year Treasury note has averaged about 2.65% this year. For closers, these par-level bonds have virtually no prepayment risk and very little price risk, are pledgable, and produce monthly cash flow. What if you committed a portion of your securities portfolio to investing in low premium SBA 7(a) pools?

In response, there are now SBA securities being issued and available at prices very near par. As part of the pooling process, certain amounts of the loan rates can be stripped off for alternative uses, leaving just enough coupon pass-through on a given bond to result in a market price between, say, 99.50 and 100.50.

Yield and price stability You may have heard that the yield curve is relatively flat. In the good news/bad news environment in which community banks invest, this is a concrete example. The positive is that short-term bonds yield about the same as longer-term bonds, so today you don’t have to extend your maturities for reasonable returns. The negative is that a flat curve is usually followed by a secular drop in rates, more so on the short end. True floaters, like SBA 7(a)’s, will be the first to see their yields fall. More to the point, it’s totally uncertain that any rate-cutting will happen in the near future. Macro indicators like GDP,

ICBA Securities’ exclusively endorsed broker, Vining Sparks, is one of the largest SBA 7(a) poolers in the country. Vining Sparks is interested in purchasing guaranteed portions of SBA loans directly from your community bank. To inquire about selling SBA guarantees, and to view its inventory of fixed- and floating-rate SBA pools, contact your Vining Sparks sales rep or

ICBSD 2019 35

Meet our Members f Journey Group is a construction company with five divisions capable of performing a wide range of construction builds, including community banks. But we are so much more than that. We know that we are fortunate to live, work, and raise our families in these communities. That’s why we’ve made community support a central tenet of our company. From serving on nonprofit boards to coaching youth activities or being a Big Brother for a disadvantaged child, our respect for communities underlies everything we do.

Journey Group

Learn more about Journey Group here at:

f Keystone Group International covers a broad range of areas where Growth can be impacted for your business. We facilitate and drive impact in: • Vision Planning and Execution • Sales and Marketing Strategies • Workforce Strategies

Keystone Group International

• Operational Efficiencies We bring experience from many industries, markets and company sizes with a focus on partnering with our clients to meet them where they are in order to drive a successful Strategy for Growth.

Learn more about Keystone Group International here:



36 The Bottom Line

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