The Bottom Line Volume I 2023

INDEPENDENT AND PROUD OF IT

PREVENTING ELDER FINANCIAL ABUSE

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THE POWER OF NETWORKING

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FEDERAL DELEGATE REPORT

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WE NEED A NEW APPROACH IN WASHINGTON

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FEATURE STORY: INTRODUCING THE PARTNERSHIP EDUCATION PROGRAMS WITH ICBA

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PEOPLE YOU SHOULD KNOW: CURT SMALLBROCK

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PEOPLE YOU SHOULD KNOW: MIKE HINTON

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FTC V. EMPLOYERS: DO BANKS HAVE A DOG IN THE FIGHT? PAGE 34

JACK HOPKINS NOMINATED TO THE 2023-24 ICBA BOARD OF DIRECTORS

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PREVENTING ELDER FINANCIAL ABUSE

Megan Olson, President & CEO, ICBSD

Roughly 20 percent of older Americans fall prey to financial exploitation totaling $3 billion annually or an average of $120,000 per elderly victim, according to a study from the AARP Public Policy Institute. And given that only one out of every 44 financial abuse cases are reported, according to the National Adult Protective Services Association, true losses from elder financial abuse could be north of $35 billion annually.

In my free time I volunteer as a reserve deputy for the Codington County Sherriff’s office, and I’ve witnessed the loss and devastation financial abuse causes time and time again. This problem is expected to increase in the years ahead as the older population continues to grow. As relationship lenders and financial first responders, community banks are in a unique position to help shield elderly customers against these prevalent threats through employee training and the use of technology to spot red flags and report suspicious activity to authorities.

With World Elder Abuse Awareness Day coming up on June 15, here are some tips you can share with your senior customers and their family members to guard against financial exploitation.

MEDICARE/HEALTH INSURANCE SCAMS

It is difficult to imagine that someone could prey on those in need of medical assistance, but unfortunately, Medicare fraud is all too common. Criminals are posing as Medicare or medical supply representatives to obtain personal information or provide bogus services and use the

information to bill Medicare or assume an identity to perpetrate fraud.

The outbreak of the COVID-19 pandemic has further spurred medical scams, with criminals purporting to be calling on behalf of a FEMA program that assists with funeral expenses. While this is a legitimate program, and you can reach out to FEMA to apply for these benefits, citizens should be mindful that:

FEMA will not contact you until you call or apply for assistance.

The government won’t ask you to pay anything to get this benefit.

As a good rule of thumb never share personal or financial information with anyone who contacts you out of the blue.

ZOOM PHISHING EMAILS AND INTERNET FRAUD

Con artists are also capitalizing on the rise in video meetings, registering thousands of fake Zoomrelated internet domains to send phony emails, texts, or social media messages to trick consumers into clicking on bogus links to address “account suspension” or “meeting” notices. Those that took the bait inadvertently downloaded malware (malicious software) on their computer, exposing their personal information to potential use by fraudsters.

Internet scammers are also known for sending fake text messages alleging trouble with an internet account, credit card, bank account or shopping

order. Many contain realistic looking logos to lure you into clicking on a link and divulging personal information.

To limit your exposure, avoid clicking on links from unsolicited emails or texts. If you suspect a problem with an account contact the bank or service provider directly.

TELEMARKETING/PHONE SCAMS

Seniors schooled in etiquette may frown upon “hanging up the phone” or simply saying “no” to unsolicited calls, but it also leaves the door open to criminals posing as company representatives. Three notable examples include:

1. The pigeon drop where con artists pretend to share found money in exchange for a “good faith” payment drawn from the contacted person’s bank account.

2. The fake accident ploy where con artists create a false narrative that a loved one has been injured in an accident and needs money for medical expenses.

3. Charity scams where con artists solicit funds on behalf of a charity for which they are not affiliated with or is not legit.

Remember, if it’s too good to be true, it probably is. If you want to give, go directly to the source. And if you are worried about a friend or family member, verify the information with them directly.

Unfortunately, scams are always changing, making fraud nearly impossible to fully eradicate, but we’ll never stop looking out for your benefit and encourage you to consult the Federal Trade Commission’s “scam alert” page for information about the latest scams targeting consumers at consumer.ftc.gov/scam-alerts.

THE POWER OF NETWORKING

— Dillon Kjerstad, Chairman of ICBSD, Vice President, First National Bank in Philip

Getting together with fellow bankers is one of my favorite things about ICBSD! We all know the impact networking with one another can have on our ability to serve our customers and communities. When you are faced with a challenge, question or even opportunity it is always good to have resources in your back pocket! Fortunately, the 2023 Black Hills Retreat is just around the corner which is the perfect opportunity to network with fellow community bankers in the beauty of the Black Hills. This year The Lodge at Deadwood will be our destination. There will be plenty of opportunity to network, learn, go exploring, and spend quality time with family. I believe this event is one item that separates ICBSD from other associations. It is truly a remarkable event, and I hope each of you along with your families can experience it this

year. The dates are July 27-29th and a block of rooms have been set up at a discounted rate until June 19, 2023. To make a room reservation, call (877) 393-5634. More information can be found on ICBSD.com.

On a related note, ICBSD bank members will have the opportunity to network and meet face to face with South Dakota legislators at both the state and federal level in the coming months. Keep an eye on your inbox for more details. This grass roots effort through personal touch and real-life stories will help us advocate for our industry in the most impactful way possible. I want to personally thank each of you who will be out there hitting the pavement representing our states’ independent community banks! South Dakota independent community banking is great because of you!

FLOURISH

— Rebeca Romero Rainey, President & CEO, ICBA

“For community banks, marketing often points to finding ways to educate, support and grow community, as well as customer knowledge and awareness..”

True relationships withstand the test of time, ebbing and flowing with the cycles of life, and such is the case with the community bank–customer connection. It’s not unusual to hear about a community bank having served a family or a business for generations, and that’s a testament to the strength of the relationship.

As we consider marketing in this month’s issue, I took time to reflect on exactly what differentiates the community banker and how marketing can help in growing and retaining business. I kept coming back to the fact that for community banks, marketing often points to finding ways to educate, support and grow community, as well as customer knowledge and awareness. By extension, these promotional efforts assume a natural role in a community bank’s journey, just enhancing what are already mission-critical initiatives.

For example, consider ICBA chairman Brad Bolton’s Community Spirit Bank in Red Bay, Ala., and its work to share tips for financial resolutions in the local paper. Offering that information to the community helps individuals strengthen their financial savvy and supports a broader story of community bank leadership.

Or look to ICBA past chairman Bob Fisher’s bank, Tioga State Bank, in Spencer, N.Y., and how it teams up with local television stations to support cause-related activities, like the No Shave November Cure the Blue 5K. Not only does this event help raise funds for an important program, it also demonstrates the bank’s involvement with and commitment to its community. These examples offer only a snapshot of what

community banks all over the country do to support their communities from a mission-based approach. In many cases, the added promotion these efforts deliver is a side benefit to serving the community.

That’s precisely why these efforts are successful: They garner attention because they are the right things to do. These stories create a value proposition around why banking with a community bank is so vital, and the differentiation from megabanks and credit unions happens by leading with the community bank relationship model front and center.

So, as you think about your bank’s planned storytelling this year, know that ICBA is standing by to help. In fact, stay tuned for a very exciting announcement that we’ll be making during ICBA LIVE, which will shine a light on what differentiates community banking. And our work won’t stop there. We invite to you join us in this next step of our journey as we continue to tell the community banking story.

Because beyond promotion, what you do matters to the customers and communities you serve. You are and will remain a partner through your customers’ lives and financial journeys. From a marketing perspective, that’s an ideal place to be.

WHERE I’LL BE THIS MONTH

I’ll be connecting with community bankers from around the country at ICBA LIVE in Honolulu, Hawaii, from March 12–16. I hope to see you there!

FROM THE TOP

— Brad M. Bolton, Chairman, ICBA President & CEO of Community Spirit Bank in Red Bay, Ala.

“I am grateful to have had the opportunity to serve as chairman. I will continue to advocate for community banking, and for the rest of my career, stand side by side with you to fight our future battles.”

Serving as ICBA chairman has been one of the highest honors of my life. It’s hard to put into words how special this experience is. The work you’re doing every day puts real faces and names to the communities we’re fighting for, and it has been a privilege to be your representative at the national level.

Yet, it takes the voices of many to make a true impact. That’s why I’ve asked community bankers to sacrifice a few minutes every day to advocate for our industry. We are what stands between our customers and an overreaching federal government and regulatory system. We hold the line for Main Street America, which needs us.

In today’s environment, that vigilance is critical to staying ahead of emerging threats. Each day brings forward new concerns, and we have to stay focused on who we are and who we represent. So, keep pressing forward in defending this great industry we get the opportunity to serve.

For example, every community banker has a primary focus on how they can better serve their customers. It isn’t about making more money, but how we respond to community needs. We should also remind policymakers that community bankers are small business owners, too. And even though we have fiduciary and regulatory responsibilities to remain profitable and provide a return to our shareholders, our focus always comes back to how we can serve our customers better. In maintaining that focus on our relationship-centric mission, we will continue to thrive.

That’s why it’s vital for community banks to remain independent, and a big theme for me has been encouraging bank executives to identify their next generation of leaders. There are those within your institution who share your vision and passion. Support their development and groom them to take the reins. Without your bank, your communities are at risk. So, make a succession plan to ensure your bank remains the lifeblood of the community. With that in mind, I implore you to keep fighting for Main Street. Keep raising your voices to advocate for your customers. Keep engaging with innovative companies to grow, evolve and better serve. Keep identifying future leaders to ensure the longevity of your institution, because your communities need you in their corner.

I want to close by saying I am grateful to have had the opportunity to serve as chairman. I will continue to advocate for community banking, and for the rest of my career, stand side by side with you to fight our future battles. With that passion leading, I’m confident we’ll witness the continued growth and success of our beloved industry.

MY TOP THREE REFLECTIONS ON COMMUNITY BANKING

1. Never take our community bank mission for granted; advocate for it.

2. Keep innovating and implementing new technologies for your customers.

3. Someone at your bank wants to lead it for the next generation. Let them.

•

FEDERAL DELEGATE REPORT

At the time of writing this article, it’s the beginning of February and only 37 days until ICBA LIVE in Honolulu! Can you tell I’m excited? By the time this article reaches your desk, our suntans will be fading but we will be seeing each other again soon this spring at the Capital Summit! Advocacy is a pillar of ICBA’s commitment to community banks. Our approach advocates for common-sense reforms on behalf of community banks and the communities we serve. Here are some of the most important hot button issues and ICBA’s ongoing work:

•

Climate Risk Regulation

ICBA is opposing proposals that create new mandates regarding climate risk. Current proposals include stress testing for the impact of weather-related events on bank-held assets, concentration limits, increased disclosures, and reporting greenhouse gas emissions to the federal government.

Durbin Amendment Expansion

ICBA opposed legislation to create new credit card routing mandates. The Credit Card Competition Act of 2022 would apply to banks over $100 billion in assets, but community banks would be forced to subsidize the costly system wide changes. This system could put

consumer data at risk. ICBA defeated efforts to pass this legislation in Congress.

• Small Business Loan Data CollectionSection 1071

CFPB’s proposed rule would require banks to collect and report data on loan application from small business. This includes agriculture loans. The rule would apply to banks that originated 25 or more small business loans per year. By the time of this publication, we may have final rules. The ICBA is urging the CFPB to exempt community banks below $1.3 billion in assets, collect only statutorilymandated data, and keep small business borrower information private.

In the 118th Congress, ICBA expects focus on regulation of fintech and crypto assets, the SAFE Banking Act, climate risk, tax cut extensions, and agency oversight.

Lastly, registration is open for the Capital Summit on May 14-17. Let’s show Washington DC that community banks are essential to the prosperity of Main Street America! I hope to see everyone there.

a pillar of ICBA’s commitment to community banks. Our approach advocates for common-sense reforms on behalf of community banks and the communities we serve.”

— Valerie Anderson-Boudaka, ICBA National Director, Farmers State Bank of Canton, Canton, SD

“Advocacy is

2 0 2 3

PAC 100 CLUB

THE PAC 100 CLUB RECOGNIZES THE INDIVIDUALS WHO HAVE CONTRIBUTED $100 TO THE ICBSD PAC.

David Johnson, Reliabank Dakota

Jan Johnson, Reliabank Dakota

Hugh Bartels, Reliabank Dakota

Josh Hogue, Reliabank Dakota

Jane Swenson, Reliabank Dakota

Reid Johnson, Reliabank Dakota

David Ebbers, Reliabank Dakota

Jermey Keizer, Reliabank Dakota

Bob Smithback, Reliabank Dakota

Mark Lee, Reliabank Dakota

Pam Homan, Reliabank Dakota

CENTURY CLUB

THE CENTURY CLUB RECOGNIZES COMMUNITY BANKS WHOSE ENTIRE BOARD OF DIRECTORS HAVE DONATED $100 TO THE ICBSD PAC.

Reliabank Dakota

THANK YOU TO THE FOLLOWING INDIVIDUALS AND BANKS FOR YOUR SUPPORT!

ABOUT PAC

The ICBSD Political Action Committee helps provide South Dakota community banks with a strong, united voice in Pierre. Your participation in the PAC helps ensure we have a seat at the table when issues affecting community banking are being discussed in the state capitol.

GET INVOLVED

Thank you in advance for your support of the ICBSD PAC. To make a contribution or to learn more, email Megan at Megan@ ICBSD.com. Checks can be mailed to: ICBSD PAC PO Box 615 Watertown, SD 57201.

WE NEED A NEW APPROACH IN WASHINGTON

— John Thune, United States Senator (R-S.D)

Our country continues to face serious challenges. Inflation is straining family budgets, especially at the grocery store. The prices for electricity, gas, and home heating have increased. Record numbers of illegal immigrants have come across the southern border. Lax law enforcement has caused crime to spike in cities. And rogue nations like Russia, China, Iran, and North Korea have been emboldened to test America’s resolve. But if you listened to the president’s State of the Union address, you wouldn’t have heard much, if anything, about these crises.

Over the past two years, Democrats have pushed through more than $4 trillion in new spending. The $1.9 trillion spending spree they passed in March 2021 helped create our current inflation crisis, which is costing South Dakota families nearly $750 a month. And the hundreds of billions of dollars Democrats have passed in tax hikes will further increase prices, especially on utility bills. Democrats’ spending has also contributed significantly to our rising national debt, yet what I heard from the president was proposals for even more spending, more taxes, more government, and more dodging Republicans’ good faith efforts to rein in out-ofcontrol spending.

The president’s speech was also strikingly light on a vision for our national defense, despite China’s recent blatant violation of U.S. airspace and continued trouble abroad, including Russia’s war in Ukraine and North Korea’s recent unveiling of an alarming number of ballistic missiles. And despite record numbers of illegal border crossings over the past two years, the president, during one of the longest addresses to Congress in American history, spent just one minute talking about our nation’s border crisis. He made no mention at all – not a single word – of the rise in violent crime we’re seeing in cities across the nation.

Throughout his speech, the president seemed to want to have it both ways. He wants to bring down inflation, but increase the spending that causes it. He celebrates American innovation, but wants to

raise taxes and impose price controls. He wants to be tough on China, but lets the Chinese Communist Party get away with increasingly brazen actions. But he can’t have it both ways. We can’t spend our way out of inflation. We certainly can’t bury businesses in taxes and then expect them to lead the way in innovation.

Republicans have solutions that can actually help bring down inflation, strengthen our economy, unleash the power of American innovators, and improve our nation’s security at home and abroad. We want to rein in spending to get inflation under control, unleash American energy production to bring down energy costs, and ensure our military,

border patrol, and law enforcement have the resources and support they need to keep Americans safe. Any bipartisan work we do needs to move away from the failed policies of the last two years, and I hope the president will work with us to find consensus.

Forty years ago, another American president addressed Congress at a time when our nation was facing serious challenges. President Reagan worked to build consensus with Democrats and made real progress on solving the problems that our nation was facing. I believe this bipartisan approach can work again now. The president just has to be willing to pursue it.

“Republicans have solutions that can actually help bring down inflation, strengthen our economy, unleash the power of American innovators, and improve our nation’s security at home and abroad.”

- John Thune, United States Senator

ROUNDS TO SERVE AS TOP REPUBLICAN ON SECURITIES, INSURANCE, AND INVESTMENT SUBCOMMITTEE

“I look forward to working with my colleagues to promote commonsense public policy that encourages economic growth, capital formation and investor protection while also providing much-needed oversight to heavy-handed bureaucrats.”

In February, U.S. Senator Mike Rounds (R-S.D.) announced his leadership role on the Senate Banking, Housing, and Urban Affairs Subcommittee on Securities, Insurance, and Investment, where he will serve as Ranking Member during the 118th Congress. “The Senate Banking, Housing, and Urban Affairs Subcommittee on Securities, Insurance, and Investment has an important role in furthering policies that will positively impact South Dakota,” said Rounds. “I look forward to working with my colleagues to promote commonsense public policy that encourages economic growth, capital formation and investor protection while also providing much-needed oversight to heavy-handed bureaucrats. The United States is home to the strongest capital markets in the world, successfully recognizing and driving capital to the best ideas and enterprises, and I will be working diligently to keep them that way.”

In addition to his leadership role on the Subcommittee on Securities, Insurance, and Investment, Rounds will also serve on the Subcommittee on Economic Policy and the Subcommittee on Housing, Transportation, and Community Development.

- Mike Rounds, United States Senator

— Mike Rounds, United States Senator (R-S.D)

FIXED RATE OR FLOATING?

Hybrid ARMs give an investor both features

What’s your choice for the term of the decade so far (that is, other than COVID)? In the last three years, a number of expressions have come into fashion, some of which have been worn out, used out of context and deemed by linguists to be a blight on our vocabulary. I’m sorry to say these may be around for a while. Here are a few:

Virtual

• Social distancing

• Pivot

• PPP

• Zoom (which I’ve noticed has become a verb as well)

• Supply chain Hybrid

Let’s stick with “hybrid” for a few minutes. This has gained popularity in several circles. Hybrid cars, powered by both fuel and electricity, now account for over 5% of new vehicle sales, and all major auto manufacturers are ramping up their capacity. Hybrid education programs which have both in-person and virtual components are likely to be with us for some time. And, in the investment world, hybrid bonds can offer an attractive risk/ reward profile for community banks.

NOT A ‘20S INNOVATION

Adjustable-rate mortgages (ARMs) have been around since the 1980s, and portfolio managers have coveted these investments that “wrap” the loans into a liquid security. ARM pools backed by Fannie Mae, Freddie Mac and Ginnie Mae (GNMA) deliver all the normal benefits of mortgage-

backed securities (MBSs) and more. In addition to the monthly cash flow, ARMs also can help control interest rate risk for banks that are exposed to rising rates.

The 2020’s versions of ARMs are, at least initially, hybrids. This means there is a fixed rate period for between three and 10 years, after which the remaining principal will adjust frequently, either semi-annually or annually. The volume of ARMs that are true floaters right out of the box is so small that the agencies have a hard time pooling them. Also, there are periods in which hybrids are not particularly attractive for community banks, due mostly to (no surprise here) the price levels. I’m pleased to announce that 2023 is a year in which hybrid ARMs are available at market prices that an investor will probably like over the next few years.

BORROWER PROFILE

Still, the vast majority of new mortgage loans is fixed-rate for the full term, whether 30, 20, 15 or 10 years. Over the last decade or so, only about 6% of new loans are adjustable, and that counts hybrids. So who are these borrowers, who are statistical outliers?

They really line up into two groups. The first are those who are barely on the cusp of qualifying for conventional (or FHA/VA) financing from a debt load standpoint. Hybrid ARMs will typically be offered at a lower rate than fixed, as the lender has to

— Jim Reber, ICBA Securities, an ICBSD Preferred Partner

incent the borrower to accept some interest rate risk.

The second group consists of homeowners who expect to be in their home for a defined, relatively short period of time of ten years or less. These may be soon-to-be empty nesters, or possibly expect to move for employment reasons. If the borrowers do prepay before the first reset date arrives, they’ve saved some interest cost, and not exposed themselves to higher reset rates.

CURRENT EXAMPLES

Given the profiles and behaviors of the borrowers, the cash flows that hybrids produce are substantial. The loans have fully amortizing 30-year terms, so not a lot of principal is scheduled to amortize initially, but an investor can expect some early activity. Then, as the first reset date approaches, the prepayments speed up even more, sometimes dramatically. Some models predict paydowns of 25% or more annually during the fixed rate window, and even faster in the last few years before initial reset. For many community banks, fast prepayments are exactly what they want in 2023. This was not the case, clearly, in 2020 and 2021, when banks were drowning in liquidity, and interest rates were at record lows.

Another piece of good news is that current market prices for these newly-issued hybrids are near par, usually between 100 and 101. This means that significant paydowns won’t have

much impact on your yields. Perhaps even better: The inverted yield curve makes the hybrids with the shortest first reset date (weighted average roll, or WAR) the highest yielding, at least until the WAR. For example, a GNMA hybrid with a 36 month roll date, that starts with a full 5% coupon, is currently available a just a slight premium. This significantly out-yields some longer MBS, at least for the next three years.

There’s more to the ARMs story that we have time and space for here (e.g., rate caps), but it’s fair to say hybrids are worth a portfolio manager’s look in early 2023. You may decide they’re virtual bargains, and that your security inventory should pivot and take down a supply.

ICBA Securities and its exclusive broker Stifel will present several Learning Labs at ICBA LIVE in Honolulu this March. For more information and to register, visit icba.org/live

ICBA LIVE 2023

Jim Reber (jreber@icbasecurities.com) is president and CEO of ICBA Securities, ICBA’s institutional, fixed-income broker-dealer for community banks.

INTRODUCING THE PARTNERSHIP EDUCATION PROGRAM WITH ICBA

ICBSD & Community Banker University Have Partnered to Bring you

TO LEARN MORE AND TO REGISTER VISIT ICBSD.COM/COMMUNITY-BANKER-UNIVERSITY

ICBSD is excited to announce our new, expanded educational offerings! In collaboration with ICBA’s education department, Community Bank University (CBU), certification programs, seminars, online training, and a host of resources are now available on our website, making it easier for you to find needed education. The new Partnership Education Program will ensure that collectively, we put community banks in contact with the training tools necessary to grow bankers’ knowledge and skills.

Let’s all win by increasing knowledge, improving efficiency, and investing in our employees while working together to uplift the industry we love — COMMUNITY BANKING!

EDUCATION THAT SUPPORTS YOU AND THE ICBSD

Enter the code SD-ICBSD at checkout.

When you participate in ongoing education through Community Bank University, you are also supporting the ICBSD. For every ICBA training course, seminar and resource purchased, ICBA will donate 10 percent of eligible purchases to ICBSD. Simply use the code SD-ICBSD in the “State Association Code” field at checkout.

EDUCATIONAL OFFERINGS

CERTIFICATION INSTITUTES

ICBA certification programs are designed to raise the standards of professionalism in the industry and give consumers a consistent stamp of approval to look for when selecting a banker.

To make this happen, respected members of the ICBA certification board establish baseline criteria in several areas of specialization. Then, experienced, nationally recognized instructors create training programs that target the needs of community banks based on those criteria. Finally, competency testing is measured after completion and a certification designation is granted. Annual continuing professional education is then required to ensure participants remain current.

Community Banker University is registered with the National Association of State Boards of Accountancy

(NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: nasbaregistry.org.

Certification Offerings:

• Audit Certification (CCBIA)

Bank Security Certification (CCBSO)

• BSA/AML Certification (CBAP)

• Commercial Lending Certification (CCLO) Compliance Certification (CCBCO)

• Consumer Lending Certification (CCBCL) Credit Analyst Certification (CCBCA)

• Information Technology Certification (CCBTO)

• Risk Management Certification (CCBRS)

BANK DIRECTOR PROGRAM

The Bank Director Program provides exclusive director-related training, tailored to meet the needs of your board. The program includes bi-monthly newsletters, online training courses, new director training videos, governance and employment law hotlines, and preferred pricing on resources and events. Train your entire board for one low price. This program is a must have for all bank directors.

LEADERSHIP ACADEMY PROGRAM

The Leadership Academy is a comprehensive, innovative leadership training program. The curriculum provides community bankers with the opportunity to learn leadership skills, technical banking subject matter and demonstrates how advocacy efforts impact the banking industry. The program consists of both online coursework and in-person events providing for networking and peer engagement. The Leadership Academy teaches the necessary skills to move your employees forward within your organization.

ONLINE TRAINING PLANS

Looking to train your entire staff? Choose a plan to meet your needs that offer access to more than 425 courses.

• Online Training Plans

• Online Training Bundles

• Online Certificate Programs

• Individual Online Training

2023 SEMINARS & CERTIFICATION INSTITUTE EVENTS

FRAUD SEMINAR

APR 4 – APR 6, 2023 | VIRTUAL EVENT

Join Community Banker University and fraud expert Barry Thompson for a fast-moving seminar that will prepare you to identify and protect your bank’s reputation and assets. Benefit from the interactive format and expert instruction and leave with essential knowledge and tools that you can implement immediately.

COMMERCIAL LENDING INSTITUTE

APR 4 – APR 6, 2023 AND APR 11 – APR 13, 2023 | VIRTUAL EVENT

ICBA’s Commercial Lending Institute teaches you to efficiently identify and analyze opportunities, assess, and mitigate risks, and structure and manage commercial loans.

BANK DIRECTOR FORUM – SESSION 1

APR 13, 2023 | VIRTUAL EVENT

Offered quarterly in half-day sessions, the new Bank Directors Forums cover credit management, corporate governance, BOLI, compliance, cybersecurity and much more. No two sessions will be the same.

IT INSTITUTE

APR 18 – APR 20, 2023 AND APR 25 – APR 27, 2023 | VIRTUAL EVENT

Information technology solutions continue to evolve creating opportunities for community banks to increase efficiency, improve service capabilities, and better safeguard customers.

LOAN REVIEW SEMINAR

APR 18 – APR 19, 2023 | VIRTUAL EVENT

The loan review process is critical to the success of any community bank. This process must be structured and requires policies and procedures to ensure timely identification of problem credits, asset quality, and accuracy. The

process must also include well-defined classification guidelines to ensure consistent loan ratings.

ADVANCED LOAN REVIEW SEMINAR

APR 20- APR 21, 2023 | VIRTUAL EVENT

This advanced session builds on the materials presented in the Loan Review Seminar to take your analysis skills to the next level. Learn about the common loan level challenges, such as the intricacies of computing global cash flows for businesses and their guarantors.

AGRICULTURAL CREDIT ANALYSIS SEMINAR

APR 26, 2023 | VIRTUAL EVENT

This seminar is designed to meet the needs of agricultural lenders by identifying market issues and providing the tools to assess the borrower’s ability to navigate challenging times.

BSA/AML INSTITUTE

MAY 2 – MAY 4, 2023 | VIRTUAL EVENT

The formal requirements for financial institution compliance under the Bank Secrecy Act (BSA) are significant. With the regulatory agencies committing to tougher and more inclusive BSA/ AML examinations, it is important to make certain your BSA/AML program is appropriate for your institution’s risk exposure.

FDICIA SEMINAR

MAY 3 – MAY 4, 2023 | IN-PERSON, BLOOMINGTON, MN

The Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) was enacted in 1991 to implement regulatory changes that assist in ensuring safety and soundness of financial institutions. Bankers should understand the requirements if their institution is approaching the $500 million or $1 billion thresholds considering crucial planning and realistic timelines.

CALL REPORT SEMINAR

MAY 10, 2023 | VIRTUAL EVENT

In an ever-changing regulatory and accounting environment, it is important that call report preparers and reviewers remain up to date. Attend this seminar for a detailed discussion of each call report schedule as well as the real-life challenges of completing an accurate call report.

ADVANCED CALL REPORT SEMINAR

MAY 11, 2023 | VIRTUAL EVENT

The regulatory reporting burden faced by community banks today is stronger than ever. As the complexity of the call report and Federal Reserve reports continue to increase, even experienced bankers often have questions about the nuances of these filings.

AUDIT INSTITUTE

MAY 16 – MAY 18, 2023 AND MAY 23 – MAY 25, 2023 | VIRTUAL EVENT

Meet your bank’s evolving needs, the expectations of the audit committee, and the examiners! Our curriculum will expand your knowledge of auditing and banking whether you are a veteran auditor or new to the audit function.

FINANCIAL STATEMENT ANALYSIS SEMINAR

MAY 16, 2023 | VIRTUAL EVENT

Assessing creditworthiness of a borrower is about information. This course focuses on the critical issues arising through preparation of financial statements by the borrower, the role of accountants, the calculation of key ratios, and the use of financial statements in the credit decision process.

CASH FLOW ANALYSIS SEMINAR

MAY 17, 2023 | VIRTUAL EVENT

Only cash can repay loans. To effectively conduct a complete credit analysis, the sources, and uses of cash in the business must be understood. Ground yourself in the mechanics of constructing business cash flow statements and their use of credit analysis.

COMMUNITY BANK MERGERS & ACQUISITIONS SEMINAR

MAY 24 - 25, 2023 | IN-PERSON, BLOOMINGTON, MN

The current community bank mergers and acquisitions landscape continues to evolve. Community banks that are considering engaging in a merger or acquisition transaction, as either a buyer, seller or in a merger of equals, should fully understand the current environment and the strategic issues involved. Even if you intend to remain independent, understanding the M&A market will help better prepare your organization.

BANK DIRECTOR FORUM – SESSION 2

JUN 1, 2023 | VIRTUAL EVENT

Offered quarterly in half-day sessions, the new Bank Directors Forums cover credit management, corporate governance, BOLI, compliance, cybersecurity and much more. No two sessions will be the same.

COMPLIANCE INSTITUTE

JUN 6 - JUN 8, 2023 AND JUN 13 – JUN 15,2023 | VIRTUAL EVENT

The ICBA Compliance Institute is built to meet the needs of seasoned professionals seeking the latest regulatory education and industry best practices as well as newer compliance officers seeking to gain a clear understanding of the fundamental concepts of each regulation.

COMMERCIAL

REAL ESTATE LENDING SEMINAR

JUN 14, 2023 | VIRTUAL EVENT

Real estate lending is often the most difficult type of lending to do correctly. There are numerous challenges in financing real estate, not the least of which is understanding the various types of real estate and the embedded risk. This seminar walks through underwriting and structure of construction financing, investment real estate, owner occupied real estate, multifamily, residential development, as well as specialty use.

ANALYZING YOUR BANK’S FINANCIAL STATEMENT

JUN 15, 2023 | VIRTUAL EVENT

Understanding the financial performance of your bank is crucial in leading a high performing organization. This course assesses how the marketplace is affecting the bank and how bank management is in turn responding. One must understand this relationship to create accurate financial statements.

RISK MANAGEMENT INSTITUTE

JUN 26 – JUN 28, 2023 | IN-PERSON EVENT, ST. LOUIS, MO

In today’s community bank, the concept of risk and managing the bank’s exposure to risk is continually top-of-mind. Designed exclusively for community bankers, the ICBA Risk Management Institute offers participants an opportunity to enrich and affirm important knowledge of risk components influencing a community bank’s function and soundness.

VENDOR MANAGEMENT SEMINAR

AUG 1 – AUG 2, 2023 | VIRTUAL EVENT

This seminar will assist community banks in navigating the critical considerations needed to effectively implement a sound vendor management program.

AGRICULTURAL CREDIT ANALYSIS SEMINAR

AUG 2, 2023 | VIRTUAL EVENT

This seminar is designed to meet the needs of agricultural lenders by identifying market issues and providing the tools to assess the borrower’s ability to navigate challenging times.

TROUBLED LOANS AND CREDIT MANAGEMENT SEMINAR

AUG 3, 2023 | VIRTUAL EVENT

Build a proactive mindset in identifying concerning trends that left unaddressed could lead to a bank loss. A past due payment is not an early warning sign. It is an indication that you have already missed the opportunity to assist your client.

BSA/AML INSTITUTE

AUG 7 – AUG 9, 2023 | IN-PERSON, BLOOMINGTON, MN

The formal requirements for financial institution compliance under the Bank Secrecy Act (BSA) are significant. With the regulatory agencies committing to tougher and more inclusive BSA/ AML examinations, it is important to make certain your BSA/AML program is appropriate for your institution’s risk exposure.

CFO FORUM

AUG14 – AUG 15, 2023 | IN-PERSON EVENT, KANSAS CITY, MO

Many high-performing banks have initiated a fundamental shift in the CFO role making the CFO a critical strategic business partner across the financial institution. Such evolution has encouraged the transformation of the CFO from solely traditional tax functions to now include analysis of big data, technology systems, and efficiency strategies. The CFO Forum tackles the top issues CFOs face today, including emerging tax and accounting strategies, CECL implementation, deposit funding sources, risk

management, cybersecurity and much more. Be prepared to build your CFO network with networking opportunities and peer-to-peer collaboration throughout the event.

CREDIT ANALYST INSTITUTE

AUG 15 – AUG 17, 2023 | VIRTUAL EVENT

Master the necessary financial analysis skills needed by today’s credit analysts and the additional expertise vital to a community bank’s overall lending success.

COMMUNITY BANK HUMAN RESOURCES SEMINAR

AUG 16 – AUG 18, 2023 | IN-PERSON EVENT, KANSAS CITY, MO

Today’s modern workplace is transforming the role of the community bank human resources (HR) professional. People management and responsible administration is key for all HR professionals. Whether you are a seasoned HR professional, or you have recently taken on the role, gain the necessary information to handle the most important legal and emerging issues at your bank. Review critical HR requirements that all community bank HR professionals must know. Leave with practical advice, guidance, and key strategies to ensure effective and compliant management of employee and employer requirements.

COMMERCIAL LENDING INSTITUTE

AUG 20 – AUG 25, 2023 | IN-PERSON EVENT, ST. LOUIS, MO

ICBA’s Commercial Lending Institute teaches you to efficiently identify and analyze opportunities, assess, and mitigate risks, and structure and manage commercial loans.

ADVANCED IT SEMINAR

AUG 22 – AUG 24, 2023 | VIRTUAL EVENT

Is your community bank prepared to manage the increasing threats and exposures to your IT infrastructure? To succeed in today’s fast-paced environment, financial institutions need to constantly evolve.

BANK SECURITY INSTITUTE

AUG 28 – AUG 30, 2023 | IN-PERSON EVENT, BLOOMINGTON, MN

Ensure the physical safety of your bank, staff, and

customers. Cover everything from the basics of bank security to situations you may not have even prepared for.

BANK DIRECTOR FORUM – SESSION 3

SEPT 7, 2023 | VIRTUAL EVENT

Offered quarterly in half-day sessions, the new Bank Directors Forums cover credit management, corporate governance, BOLI, compliance, cybersecurity and much more. No two sessions will be the same.

CONSUMER LENDING INSTITUTE

SEP 10 – SEP 13, 2023 | IN-PERSON EVENT, BLOOMINGTON, MN

Make informed credit decisions by developing your ability to evaluate a consumer loan request. This program covers the application process, financial statement analysis, credit analysis, loan structure, compliance, documentation procedures, and closing.

AUDIT INSTITUTE

SEP 17 – SEP 22, 2023 | IN-PERSON EVENT, BLOOMINGTON, MN

Meet your bank’s evolving needs, the expectations of the audit committee, and the examiners! Our curriculum will expand your knowledge of auditing and banking whether you are a veteran auditor or new to the audit function.

COMMUNITY BANK MARKETING SEMINAR

SEP 20 – SEP 22, 2023 | IN-PERSON EVENT, NASHVILLE, TN

Retail wars, digital transformation, and customer demand are dramatically changing the landscape of community banking. To succeed in the competitive marketplace, community bank marketers and retail teams must be savvy, forward-thinking, and implement game-changing strategies. Participate in three engaging days packed with critical information to propel a bank to the next level.

ANNUAL CURRENT ISSUES/CERTIFICATION

CONFERENCE

SEP 25 – SEP 28, 2023 | VIRTUAL

This four-day live-streamed conference focuses on key issues and trends related to auditing, BSA/ AML, regulatory compliance, security, and fraud, and offers the very latest information, tools, best

practices, and training to assure that you are up-todate and compliant. Attend one day or all four!

CREDIT ANALYST INSTITUTE

OCT 1 – OCT 4, 2023 | IN-PERSON EVENT, BLOOMINGTON, MN

Master the necessary financial analysis skills needed by today’s credit analysts and the additional expertise vital to a community bank’s overall lending success.

COMPLIANCE INSTITUTE

OCT 1 – OCT 6, 2023 | IN-PERSON EVENT, BLOOMINGTON, MN

The ICBA Compliance Institute is built to meet the needs of seasoned professionals seeking the latest regulatory education and industry best practices as well as newer compliance officers seeking to gain a clear understanding of the fundamental concepts of each regulation.

IT GENERAL CONTROLS SEMINAR

OCT 11 – OCT 12, 2023 | VIRTUAL

Banks conduct audits on an ongoing basis to monitor their bank’s internal controls and ensure adequacy and compliance with their bank’s policies and procedures. The audit scope should include an in-depth review of IT and information security controls and operating procedures that help protect the institution from losses. Join us for this session as we cover the areas of auditing business risks, technical environment auditing, auditing the human element and overall governance.

ANNUAL DIRECTORS CONFERENCE

OCT 11 – OCT 13, 2023 | IN-PERSON EVENT, CARLSBAD, CA

The role of a community bank director is one that is always changing and has never been more critical to the success of your bank. The ICBA Annual Directors Conference is an informative and engaging event that provides you with essential information and the latest in banking industry trends. The ICBA Annual Directors Conference will give you the tools to guide your bank’s growth and profitability and sustain its vision for the future. Leave this event with innovative practices, new strategies, and actionable takeaways that you can bring back to your bank and implement immediately!

IT INSTITUTE

OCT 15 – OCT 19, 2023 | IN-PERSON EVENT, BLOOMINGTON, MN

Information technology solutions continue to evolve creating opportunities for community banks to increase efficiency, improve service capabilities, and better safeguard customers.

ANNUAL CURRENT ISSUES/CERTIFICATION CONFERENCE

OCT 23 – OCT 26, 2023 | IN-PERSON EVENT, SAN ANTONIO, TX

This four-day live-streamed conference focuses on key issues and trends related to auditing, BSA/AML, regulatory compliance, security, and fraud, and offers the very latest information, tools, best practices, and training to assure that you are up-to-date and compliant. Attend one day or all four!

BSA/AML INSTITUTE

NOV 7 – NOV 9, 2023 | VIRTUAL

The formal requirements for financial institution compliance under the Bank Secrecy Act (BSA) are significant. With the regulatory agencies committing to tougher and more inclusive BSA/AML examinations, it is important to make certain your BSA/AML program is appropriate for your institution’s risk exposure.

BANK DIRECTOR FORUM – SESSION 4

NOV 16, 2023 | VIRTUAL EVENT

Offered quarterly in half-day sessions, the new Bank Directors Forums cover credit management, corporate governance, BOLI, compliance, cybersecurity and much more. No two sessions will be the same.

RESOURCES & REFERENCE GUIDES

SEMINARS 7 CERTIFICATION INSTITUTES

COMMUNITY BANK MERGERS & ACQUISITIONS SEMINAR

APRIL 24-25, 2023 | IN-PERSON, BLOOMINGTON, MN

The current community bank mergers and acquisitions landscape continues to evolve. Community banks that are considering engaging

in a merger or acquisition transaction, as either a buyer, seller or in a merger of equals, should fully understand the current environment and the strategic issues involved. Even if you intend to remain independent, understanding the M&A market will help better prepare your organization.

ANNUAL CURRENT ISSUES CERTIFICATION CONFERENCE

SEP 25 – SEP 28, 2023 | VIRTUAL

This four-day live-streamed conference focuses on key issues and trends related to auditing, BSA/ AML, regulatory compliance, security, and fraud, and offers the very latest information, tools,best practices, and training to assure that you are up-todate and compliant. Attend one day or all four!

IT GENERAL CONTROLS SEMINAR

OCT 11 – OCT 12, 2023 | VIRTUAL

Banks conduct audits on an ongoing basis to monitor their bank’s internal controls and ensure adequacy and compliance with their bank’s policies and procedures. The audit scope should include an in-depth review of IT and information security controls and operating procedures that help protect the institution from losses. Join us for this session as we cover the areas of auditing business risks, technical environment auditing, auditing the human element and overall governance.

ANNUAL DIRECTORS CONFERENCE

OCT 11 – OCT 13, 2023 | IN-PERSON EVENT, CARLSBAD, CA

The role of a community bank director is one that is always changing and has never been more critical to the success of your bank. The ICBA Annual Directors Conference is an informative and engaging event that provides you with essential information and the latest in banking industry trends. The ICBA Annual Directors Conference will give you the tools to guide your bank’s growth and profitability and sustain its vision for the future. Leave this event with innovative practices, new strategies, and actionable takeaways that you can bring back to your bank and implement immediately!

IT INSTITUTE

OCT 15 – OCT 19, 2023 | IN-PERSON EVENT, BLOOMINGTON, MN

Information technology solutions continue to evolve creating opportunities for community banks

ANNUAL CURRENT ISSUES CERTIFICATION CONFERENCE

OCT 23 – OCT 26, 2023 | IN-PERSON EVENT, SAN ANTONIO, TX

This four-day live-streamed conference focuses on key issues and trends related to auditing, BSA/AML, regulatory compliance, security, and fraud, and offers the very latest information, tools,best practices, and training to assure that you are up-to-date and compliant. Attend one day or all four!

BSA/AML INSTITUTE

NOV 7 – NOV 9, 2023 | VIRTUAL

The formal requirements for financial institution compliance under the Bank Secrecy Act (BSA) are significant. With the regulatory agencies committing to tougher and more inclusive BSA/ AML examinations, it is important to make certain your BSA/AML program is appropriate for your institution’s risk exposure.

BANK DIRECTOR FORUM – SESSION 4

NOV 16, 2023 | VIRTUAL EVENT

Offered quarterly in half-day sessions, the new Bank Directors Forums cover credit management, corporate governance, BOLI, compliance, cybersecurity and much more. No two sessions will be the same.

PROTECTING COMMUNITY BANKS – AND THOSE THEY SERVE

CURT SMALLBROCK VICE PRESIDENT, ICBM INSURANCE

When you’ve spent over two decades as a community banker, you not only learn your customers’ needs, but the needs of your bank, too. That’s the experience Curt Smallbrock brings to his role as Vice President, ICBM Insurance.

ICBM specializes in providing niche insurance products to community banks such as Financial Institution Bond (FI Bond) Insurance, Directors & Officers (D&O) Insurance, Cyber Insurance, Property and Casualty, Business Auto, Workers Comp along with other ancillary services that protect the livelihoods of community banks and their staffs.

“We fine tune our offerings very specifically to what each bank needs,” says Smallbrock. He jokes, “Our team is made up of recovering bankers, so we’ve all been there and seen the other side.”

In his role serving community banks, Smallbrock brings the same energy and attitude he brought to serving banking customers.

“I never look at my job as though I’m selling something,” says Smallbrock. “We’re very customer service oriented and that means we’re in the business of finding answers for people.”

Smallbrock acknowledges that finding answers hasn’t always been easy, especially early in his career working for larger corporate banks. The challenge of that experience is part of what makes the community banking model so close to his heart.

“Community banks typically have the flexibility to make quicker, local decisions on behalf of their customers,” says Smallbrock. “That’s important because these are the people we live and work with,

grocery shop with, get our cars serviced by and interact with every day. They know you and trust you to make decisions and recommendations. And that comes with a lot of responsibility.”

Even as Smallbrock and ICBM work daily to provide insurance services for community banks, they never lose sight of advocating for community banking as a whole.

“Organizations like ICBSD help community banks have a voice in policy and regulations. Many large banks have the resources to jump through all the regulatory hoops, and lots of those regulations may not even apply to our smaller banks’ offerings. It’s important to work on behalf of our community banks and attempt to level that playing field.”

Smallbrock and his wife Brandy, Vice President of Member Relations for Independent Community Bankers of America, have been very active on that playing field. The husband and wife team are outspoken supporters of community banking and often appear at annual retreats, conventions and industry events to connect with others and show their support for the work the industry does.

“We have the same mentality,” says Smallbrock. “It’s what we’ve lived and breathed for so long. These banks are the bread and butter of our communities.”

Aside from their dedication to community banking, the couple also operates a seasonal lawn and fertilizer business, allowing for them to meet and get to know people from surrounding communities and continuing to provide customers service and help people have learn and understand how to have a beautiful green and lush yard.

KEEPING THE PERSONAL TOUCH IN TECH

MIKE HINTON PRESIDENT, PROAG BANKWARE TECHNOLOGIES

There are a lot of reasons people pursue the business they’re in. As a self-professed “unretired ag lender”, Mike Hinton has his reasons, too.

“People in the ag loan business care so much about their producers and their communities,” says Hinton. “They are a phenomenal group of hard workers, committed to agriculture, farmers and solutions.”

Mike spent over 35 years as an ag lender and now serves as President of Omaha-based ProAG Bankware Technologies, connecting producers and lenders with software solutions that help streamline the process of making lending decisions. Technology aside, the personal touch is never far away from Hinton’s heart.

“When you can connect an operation and a lender with the information they each need, we’re actually freeing them up to have those personal discussions, farm visits and interactions that really bond those relationships.”

Hinton has seen all sides of the business, from his current position to various national leadership roles dating back to the farm credit crisis of the ‘80s. As a lender, he’s worked with everyone from the experienced producer with a box full of paper receipts to the generational farmer with four cab monitors, auto-steer and two cell phones.

“Because we service small to medium-sized ag lenders, we value it all,” says Hinton. “We can customize our offerings for all generations. Our competitors may automatically say ‘this is what you get’. We listen and make our solutions fit. Our software is of no value to anyone if they’re not going to use it.”

Hinton’s sentiment resembles a common theme in the community banking industry: seek solutions, but don’t be rigid in how you modify or deliver them.

He sees special value in ProAG’s membership with ICBSD as an opportunity to connect with others, discuss challenges, and stay ahead of what customers are asking for as generations of producers transition.

“ICBSD is a great avenue for getting together with other lenders, facilitating communication and becoming close knit as a group,” says Hinton. He values that same communication with his customers, too.

“Customer service is at our core. Yes, we offer software as a service, but when you have a question, you’re not going to be connected to a help desk,” says Hinton. “You’re going to talk to former lenders like myself, who’ve actually experienced your problem. And we’ve been rightfully tasked to respond to our lenders, emails or calls, within 24 hours at the latest - or else.”

Because Hinton has seen the tough times of the farm crisis up close, he is especially passionate about sharing that experience. He loves passing on that knowledge to younger lenders and producers who haven’t been through those same challenges. He said “ Experience is something you have the day after you need it (a quote from General Maddox) and that is what happened to many of us in the 80’s. The worst thing we as experienced lenders can do is not provide the new lenders with the knowledge and tools to deal with another major farm downturn.”

In today’s economic environment “base hits,” or incremental improvements, compared to “home runs” will be more sustainable moving forward.

Have difficult conversations early

It is ok to say no

It is best to deliver bad news early in the conversation rather than dragging it out

• Do not tell the farmer what to do. Give them choices on what they should do or what the bank is willing to do. The farmer needs to feel in control and making decisions

• Make sure both spouses or all partners are present at these conversations

If your producer does not know their cost of production they are not good managers and are farming to produce a crop rather than farming to produce a profit.

• Must have good financial records and pay attention to the financials rather than letting their accountant or lender do it.

Are they more worried about minimizing taxes rather than managing them.

Family living expense is the one expense the farmer has the most control over but pays the least attention to.

• Are loan funds being used to support lifestyle?

• What percentage of family living expenses are coming in farm expenses?

Be on the lookout for excessive credit card debt (alternative financing) and multiple refinancing requests.

MIKE’S TOP 12 LESSONS AN EXPERIENCED LENDER SHOULD PASS ON TO A NEW LENDER

Look closely at a trend analysis because trends often establish a pattern

• Do not rely on schedule F for trends. Farmers will hide problems by manipulating schedule F to minimize taxes.

Pay attention to working capital

• Did they save during the good times to have working capital during the lean times

• Is the working capital protected? For example, a marketing program for inventory or crop insurance on crops growing in the field

Look for early warning signs not showing up in the financials. Lack of communication Disinterest

• Giving up

• Talking to other lenders

• Not being truthful

Niche farming and value added is becoming more prominent and provides many opportunities for young and beginning farmers.

• Things you would not even consider in the past you need to look at now.

• Need to have a well thought out business plan before embarking on niche/value added opportunities.

Farmers are looking for something of value their lenders provide to them. Interest rate is important but not the only thing

• Know your borrower’s operation and business

• Show them you are interested in their success

• Farm visits are key

Transition planning is becoming more and more important as the next generation moves into farming.

• Ask your borrower about their transition plans

• Can the operation support more families

There will be opportunities for good farm managers who are willing to control expenses, make operational changes, and are constantly educating themselves.

4/4/23

Morning

The Sleepers: Risks of Safe Deposit Boxes, Mobile Banking, Prepaid Cards & RDC

Dawn Kincaid, Brode Consulting Services, Inc.

2023 WEBINAR SCHEDULE

5/16/23

Morning

Credit Card Compliance: Issuance, Changes, Statements, Errors & More

Mary-Lou Heighes, Compliance Plus, Inc.

4/5/23

Morning Real Estate Construction Loans Start to Finish:

Consumer & Commercial; Unique Issues & Landmines

Elizabeth Fast, Spencer Fane LLP

Morning Opening Accounts Online: CIP, CDD, Documentation & Beneficial Ownership, Susan Costonis, Compliance Training and Consulting for Financial Institutions

4/6/23

4/11/23 Morning Check Returns: Past the Point of Redemption

Marcy Cauthon, EPCOR

4/12/23 Morning Cryptocurrency Regulatory Expectations & Guidance

Molly Stull, Brode Consulting Services, Inc.

4/13/23 Introduction to Call Report Preparation

Michael Gordon, Mauldin & Jenkins, LLC

Morning Cannabis Banking: Hemp, MRBs, & CBD Business Update

4/18/23

Dawn Kincaid, Brode Consulting Services, Inc.

4/19/23 Morning A to Z on Endorsements

Deborah L. Crawford, Gettechnical Inc.

Morning Debt Resolution Series: Lessons Learned from the FDCPA Collection Rule Changes

4/20/23

Elizabeth Fast, Spencer Fane LLP

4/24/23 Monday Effective Management of Credit Report Disputes

David A. Reed, Reed & Jolly, PLLC

4/25/23 RDFI Returns: 2 Business Days vs. 60 Calendar Days – Understanding the Difference, Kimberly Ellis, UMACHA

4/27/23

Morning Credit Analysis Series:

Collateral Analysis: Evaluation, Weaknesses & Monitoring Value

Robert L. Viering, RiverPointUSA LLC

Morning New Accounts Series:

5/2/23

Minor Accounts Options & Transactions

Mary-Lou Heighes, Compliance Plus, Inc.

5/3/23 Morning BSA Officer Part 3: BSA/AML Deep Dive for the New BSA Officer

Dawn Kincaid, Brode Consulting Services, Inc.

Morning Safe Deposit Issues: Drilling, Unpaid Rent, Death & Unclaimed

5/4/23

Property, Elizabeth Fast, Spencer Fane LLP

Morning Liability with ACH Death Notification Entries (DNEs) & Reclamations

5/9/23

Michele L. Barlow, Macha/PAR

Morning High-Risk Accountholders & Services

5/10/23

Deborah L. Crawford, Gettechnical Inc.

Morning Consumer Real Estate Loans: Step-by-Step

5/11/23

Dawn Kincaid, Brode Consulting Services, Inc.

5/18/23

60 Min Fraud Series: Managing Faster Payments Risk & Fraud

Kevin Olsen, Pidgin/Payments Professor

5/18/23

Business Writing Boot Camp, Including Critique of Your Own Writing Sample

Nancy Flynn, The ePolicy Institute

5/24/23 60 Min Designing Right-Size Risk Assessments

Harrison Powers, CLA

5/30/23 The Digital Dozen: 12 Digital Strategies You Should Be Using Today

Eric C. Cook, WSI & The LinkedBanker

Morning ACH Basics for Operations Staff

5/31/23

Michele L. Barlow, Macha/PAR

6/6/23 Morning Compliance Management Systems

Mary-Lou Heighes, Compliance Plus, Inc.

6/7/23 Branch Managers & Head Tellers: Managing the Critical Aspects

Molly Stull, Brode Consulting Services, Inc.

6/8/23 Creating a Seamless Accountholder Experience: Culture, Service, Retention

Tim Tivis, Pinnacle Training Group

6/13/23 Top 10 Hot Spots on Compliance Exams

Molly Stull, Brode Consulting Services, Inc.

Morning Advertising Compliance: Web, Text, Print, TV & Radio

6/15/23

Elizabeth Fast, Spencer Fane LLP

6/20/23 Morning Debt Resolution Series: Intermediate Collector: Refining Collections Skills

David A. Reed, Reed & Jolly, PLLC

6/21/23 FFIEC Cybersecurity Assessments: Recent Findings & Recommendations

John Moeller, CLA

MORNING Nonperforming Employees: Managing & Documenting

6/22/23

Diane Pape Reed, HR Doc

6/27/23 Morning Consumer Real Estate Appraisal Reviews

Dawn Kincaid, Brode Consulting Services, Inc.

Morning Reg CC Update, Review, RDC & Reg D

6/28/23

Deborah L. Crawford, Gettechnical Inc.

6/29/23 Morning Handling Consumer Complaints & Disputes Fairly & Accurately

David A. Reed, Reed & Jolly, PLLC

OPPORTUNITIES IN PARTNERSHIP:

Ways Community Banks Can Benefit from Today’s FinTechs

Dan Richard, VP, Predictive Analytics, BHG Financial

There’s no question that the pandemic caused devastating loss throughout the country. But as the world begins to open back up, companies are evaluating what their “new normal” looks like and identifying ways to drive more revenue into their business.

The pandemic forced us to find new ways to interact with customers. As a result, expectations for engagement have significantly increased. Apps like GrubHub and Instacart have become wildly successful because of their convenience factor. Now, consumers expect that from the companies they do business with, alongside providing a digital experience, ease of communication, and more.

These expectations transcend all industries— including financial services. Many of today’s banks have recognized this shift and are looking for new ways to attract, engage, and retain their customers, all while providing a great experience.

THE INCREASING ROLE OF TECHNOLOGY

The proof of the shift to digital is in the data. As a result of COVID-19, 50% of consumers now interact with their bank through mobile apps or websites weekly – up from 32% two years ago. Additionally, a recent survey by FIS shows that 37% of consumers began a new banking relationship with a major national or global bank that had a well-established online portal in the past 12 months, and 18% of these consumers opened an account with an onlineonly direct bank.

For community banks who are known for offering a high-quality customer experience and putting their customers first, this could be an area of concern. However, data from PwC shows that community banks are keeping their finger on the pulse by finding complementary partnerships that will evolve their operations and the service they provide customers. Over the next 3-5 years, 82% of financial institutions expect to increase their partnerships with FinTechs, with an average return on investment of 20%.

While others might be waiting years to build or launch partnerships, now is the perfect time for you to benefit from what other companies can offer your institution.

BENEFITS OF PARTNERING WITH FINTECHS

Here are some of the advantages of embracing outside partnerships:

• Creating additional channels for engagement – Consider a partner who can help expand your communication channels and build a digital presence: from updating your website to launching a mobile app or online portal to implementing more frequent email or text message communications.

• Diversifying your portfolio – Go beyond your local borrower base and ensure your excess cash strengthens your bottom line, with a partner that can originate a variety of highquality loans.

• Protecting your business and customer base – Investing in a partner with a strong focus on risk, compliance, and identity fraud

prevention can give you peace of mind that your Know Your Customer (KYC) procedures are compliant, along with other regulatory guidelines.

• Generating supplemental income – Tap into new sources of revenue for your bank, including referral opportunities and loan sources that drive fee income.

HOW TO CHOOSE THE RIGHT FINTECH PARTNER

Not all partners are created equal. To make sure that you’re protecting your customer experience and driving your bottom line, look for these key characteristics when vetting potential FinTech partners.

• A track record of success, including being able to navigate economic downturns

• A strong focus on data and quality, with the ability to determine which loans will perform best in your portfolio

A streamlined process, making it easy to implement new solutions and not slow down your business

• A commitment to providing best-in-class service, with quality solutions that will enhance your customer’s experience

With consumer expectations and the benefits of partnership rising in equal proportion, now is the perfect time to review your operations, identify areas of improvement for your bank, and see FinTechs as a partner you can collaborate with to strengthen your business.

FTC V. EMPLOYERS

Do Banks Have a Dog in the Fight?

On January 5, the Federal Trade Commission (“FTC”) published a notice of proposed rulemaking (the “Proposed Rule”) that would effectively prohibit noncompete clauses in contracts between employers and workers. The FTC’s authority to issue regulations prohibiting noncompete clauses in employment contracts is purported to come from Section 5 of the Federal Trade Commission Act (the “FTC Act”). Section 5 of the FTC Act provides that unfair methods of competition are unlawful, and the FTC is empowered to prevent persons from using unfair methods of competition in or affecting commerce.

Currently, the enforceability of noncompete clauses in employment contracts is governed by state law. Three states – California, North Dakota, and Oklahoma – have prohibited noncompete clauses for nearly all workers. South Dakota,

however, falls in with the majority of the other 47 states, which impose limitations on noncompete clauses, but do not invalidate them entirely except in employment contracts with workers in certain occupations such as health care. As drafted, the Proposed Rule would supersede any conflicting state laws and impose a federal ban on noncompete clauses in employment contracts.

BUT IS THE PROPOSED RULE APPLICABLE TO BANKS?

The Proposed Rule defines an “employer” as any natural person, partnership, corporation, association or other legal entity that hires or contracts with a worker to work. On its face, this definition would appear to encompass banks. However, Section 5 of the FTC Act empowers the FTC to prevent unfair methods of competition for all persons EXCEPT banks and certain other financial institutions. The

Tiffany Miller, Davenport Evans, an ICBSD Preferred Partner

term “bank” is defined under the FTC Act as (1) national banks; (2) member banks of the Federal Reserve System; and (3) banks insured by the Federal Deposit Insurance Corporation. Thus, the Proposed Rule may not be applicable to banks since the FTC lacks authority under the FTC Act to prevent banks from engaging in activity the FTC deems to be an unfair method of competition. In fact, the Proposed Rule expressly states that “some entities that would otherwise be employers may not be subject to the Rule to the extent they are exempted from coverage under the FTC Act. … Where an employer is exempt from coverage under the FTC Act, the employer would not be subject to the Rule.”

However, it is important to note that Section 8 of the Federal Deposit Insurance Act permits federal banking agencies to enforce violations of “a law, rule, or regulation” against insured depository institutions. It is this authority under Section 8 that allows federal banking agencies such as the FDIC to enforce the FTC Act’s Section 5 prohibition on “unfair and deceptive acts or practices” against regulated financial institutions. Consequently, while the FTC Act and Proposed Rule may not be directly applicable to banks, bankers should still review any clarifying information provided after the Proposed Rule’s March 10, 2023 comment deadline to assess whether the Proposed Rule may be enforced against banks by a federal banking agency.

In addition, banks should be aware that the Proposed Rule may apply to their affiliated entities. For example, does the bank have an affiliated holding company, mortgage brokerage, or insurance agency that employs workers but does not qualify as a “bank” under the FTC Act definition above? If so, noncompete clauses in contracts between workers and those affiliated entities would likely be prohibited under the Proposed Rule.

WHAT IS THE IMPACT IF THE PROPOSED RULE DOES APPLY?

The Proposed Rule generally prohibits an employer from: (1) entering into a noncompete clause with workers; (2) maintaining noncompete clauses with workers; and (3) representing to workers that they are subject to a noncompete clause when the employer has no good faith basis to believe the clause is enforceable. Employers that rescind noncompete clauses must provide notice to all

impacted workers that the noncompete clause is no longer in effect. This includes sending notice to current and former workers, if the former workers’ contact information is readily available to the employer. Any notice to rescind a noncompete clause should be consistent with the model notice language provided in the Proposed Rule and narrowly tailored to avoid terminating any other provisions of the contract.

Employers subject to the Proposed Rule should also review any employment policies or procedures that may contain noncompete clauses. While the Proposed Rule defines a noncompete clause as a “contractual term,” it also prohibits falsely representing to workers that they are subject to an enforceable noncompete clause. Thus, employer policies and procedures with noncompete provisions may also be problematic under the Proposed Rule.

The Proposed Rule contains some exceptions for those employers subject to its prohibitions. For example, the Proposed Rule expressly exempts noncompete clauses entered into in connection with certain sales of businesses. It also does not apply to other types of restrictive employment covenants, such as non-disclosure agreements and client or customer non-solicitation agreements. As these types of covenants do not typically prevent a worker from seeking or accepting other employment, they do not meet the definition of a noncompete clause under the Proposed Rule.

Finally, while it’s important for banks to be aware of the FTC’s effort to prohibit noncompete clauses, the Proposed Rule appears to not be directly applicable to banks, and there will likely be protracted litigation if the Proposed Rule eventually makes it into final form. One FTC Commissioner who dissented to the Proposed Rule pointed out that the Rule is vulnerable to challenge in court as (1) exceeding the FTC’s authority; (2) lacking Congressional authorization; and (3) impermissibly delegating legislative authority to the FTC in violation of the non-delegation doctrine. Thus, a reasonable bank response to the Proposed Rule might be to provide comments, review any additional guidance provided, and then sit back, grab your popcorn, and watch the litigation begin.

GET TO KNOW TOMORROW’S LEADERS IN SOUTH DAKOTA INDEPENDENT COMMUNITY BANKING

On January 25th, the inaugural class of LevelUp came together for a day of learning at Maverick’s in uptown Watertown! Kicking off the day was Neil Jensen of Midwest Training who led a discussion on professional growth and personality types. Next up was Tanna Soukup from Strategie who presented on social media for professionals and Kyle Lalim of Maverick’s who helped us close the day with an Iron Chef competition!

MICHAEL BEHL Farmers and Merchants State Bank Scotland, SD

WILL ROZELL Bank North Warner, SD

KYLER JOHNSON Elkhorn Valley Bank and Trust Yankton, SD

JASON JUNG Bank North Groton, SD

LEAH BRINK BankStar Financial Brookings, SD

JADEN HOLZER CorTrust Bank Sioux Falls, SD

JAYMIE LITZEL First National Bank Philip, SD

JOSH HUTH Merchants State Bank Irene, SD

WENDY ZIMMERMAN CorTrust Bank Mitchell, SD

JOHNNY OLSON BankStar Financial Brookings, SD

NOT PICTURED:

ERIK BARNES

Dakota Business Finance

KAILEY KUHNERT

Farmers State Bank

Canton, SD

TERESA THILL

The First National Bank of Sioux Falls

Sioux Falls, SD

KELLEY OBERBROEKLING

Reliabank

Watertown, SD

AMALIA ZICK

Rivers Edge Bank

Marion, SD

PAULA HULSCHER

Reliabank

Watertown, SD

ANN BUCKMILLER

Reliabank

Desmet, SD

CARISSA ANDERSON

Rivers Edge Bank

Howard, SD

KERRI MEYER

Rivers Edge Bank

Parker, SD

UNITED BANKERS’ BANK WELCOMES TRACI KASKE AS SENIOR HUMAN RESOURCES CONSULTANT

BLOOMINGTON, MN – Dwight Larsen, President and CEO of United Bankers’ Bank (UBB), is pleased to announce the appointment of Traci Kaske as Senior Human Resources Consultant to the USource Human Resources Consulting Services Team. Traci joins UBB with over 30 years of experience in the community banking industry, 20 of which specifically in human resources. She holds a Bachelor of Science degree from Minnesota State University – Mankato. She is certified as a Senior Professional in Human Resources (SPHR) and from the Society for Human Resource Management as a Senior Certified Professional (SHRM-SCP). Traci has also been a peer advisor with the Minnesota Bankers Association Training and Compensation Committee and sat on the board of directors for the Human Resources Professionals of Minnesota which has since merged with Twin Cities Society for Human Resource Management (TCHRM).

“The wealth of community banking experience and human resources knowledge Traci has will truly be an asset to our customers as well as the company as a whole,” commented Bob Greening, Vice President/ USource, “Prior to joining UBB, she held multiple human resource leadership positions in community banking. We are confident this experience will enable Traci to provide consultation to our community bank customers with a high-level of service and empathy.”

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, California, Arizona, South Carolina, Florida, Georgia and Illinois. For more information please visit www.ubb.com.

UNITED BANKERS’ BANK WELCOMES ICI CONSULTING AS ENDORSED PARTNER FOR CORE PROCESSING CONTRACT NEGOTIATION

BLOOMINGTON, MN – United Bankers Bank (UBB), the nation’s first bankers’ bank, is pleased to announce the selection of ICI Consulting as an Endorsed Partner for Core Processing Contract Negotiation. Headquartered in St. Petersburg, FL, ICI is a financial institution consulting firm that provides core and ancillary systems evaluation services.

“UBB is excited to bring the experience and expertise of the ICI team to our client community banks throughout the US. This relationship will allow UBB’s customers to obtain valuable cost savings and expanded service solutions through ICI’s veteran core negotiation consultants. I am confident our customers will benefit from the value of this strong alliance,” said Dwight Larsen, President and CEO of UBB.

ICI has negotiated contracts and evaluated solutions with every major US core processing vendor. ICI delivers the analysis required to assist financial institutions in making streamlined, solid vendor selections, while obtaining the software required at fair market prices with favorable contract terms.

“Since 1994, ICI has worked with financial institutions throughout the US and worldwide. With UBB’s decision to name ICI its Endorsed Partner for Core Processing Contract Negotiations, we are honored to serve their community bank customers,” stated Greg Schratwieser, ICI Founder and Managing Director.

“Our mission is to provide valuable services to assist banks to determine the best solutions to support their business and save significant time and money in the process. The partnership with UBB will enable ICI to fulfill that mission, providing measurable results to their clients,” said Schratwieser.

About United Bankers’ Bank

Headquartered in Bloomington, MN UBB was established in 1975 and pioneered the bankers’ bank model. For more than 47 years they have placed the needs and success of their community bank customers first and above all else. UBB provides a wide variety of correspondent banking services to over 1,000 financial institutions throughout the US. For more information, please visit www.ubb.com or follow us on LinkedIn or Facebook.

JACK HOPKINS NOMINATED TO THE 2023-24 ICBA BOARD OF DIRECTORS

The Independent Community Bankers of America (ICBA) announced the nominees to serve on its 2023-24 board of directors. ICBA’s current board will vote on the nominations during ICBA LIVE 2023 – the largest gathering of community banks in the country, on March 12-16, in Honolulu, Hawaii.

Jack Hopkins, CorTrust Bank President and CEO, has been nominated to the 2023-24 ICBA board of directors as the Vice Chairman. Hopkins will be the second South Dakota banker elected to a chair position for ICBA’s board of directors in nearly 65 years.

“The nomination of these exceptional volunteer bankers to help lead ICBA will continue our founding mission of more than 90 years: creating and promoting an environment where community banks flourish,” ICBA President and CEO Rebeca Romero Rainey said. “We are excited to work with these talented leaders, who honor ICBA’s legacy by meeting the needs of local customers and communities every day.”

Hopkins went on to say, “I am honored to serve with the other nominated board of directors and represent our great community banks throughout the country.”

SLIPS TRIPS AND FALLS

According to the National Safety Council, slips, trips and falls are the third leading cause of injury in the workplace. Some of these incidents occur at banks with employees or customers. While these mishaps might be commonplace, there is a proactive approach banks can take to help reduce the risk of their employees and customers being injured in a slip, trip and fall. A smart place to start: Analysis of both the physical conditions of the premises and usage and traffic flow patterns, which can often identify potential hazards that should be addressed.

Some of the accident causes are well known: wet spots on floors, uneven walking surfaces, dirty doormats. Other factors, such as poor lighting, might not be as noticeable but can be equally dangerous.

“Banks should be aware of the potential for people falling and getting injured, and should take steps to ensure the premises are as safe as possible,” said Laura Lundin, Vice President of Financial Institutions P&C at Travelers. “There are many ways to do this –maintain clean floor surfaces, ensure the space is well lit, schedule regular maintenance during low traffic times and conduct periodic walkthroughs to confirm everything looks safe. A little attention can go a long way.”

Working with an insurance carrier is also recommended. Insurance providers can work with banks to:

• Help identify and assess exposures; Develop loss control strategies and improvements to minimize the frequency and severity of slip, trip and fall incidents;

• Provide training to help with slip, trip and fall prevention efforts.

If an accident does take place, be sure that it is documented and reported. This information can help prevent future incidents, and may be essential if a claim is filed against the bank. A standard, printed incident report is helpful in ensuring that all details are recorded. Documenting the details of the incident, collecting the names and a brief statement from the injured party and any witnesses, even taking photographs of the incident site can help. Slips, trips and falls rarely “just happen.”

Implementing effective slip, trip and fall improvement requires the right tools, people and communications. The right insurance carrier can help your slip, trip and fall prevention team define and document the policies, procedures, roles and responsibilities needed to effectively reduce these incidents. They also can help your team develop the tools and communication materials needed to implement this process.

Travelers is committed to managing and mitigating risks and exposures, and does so backed by financial stability and a dedicated team – from underwriters to claim professionals – whose mission is to insure and protect a company’s assets. For more information, visit www.travelers.com.

Travelers Insurance, an ICBSD Preferred Partner

WATERTOWN, SD 57201