KentuckyBankerMagazine-OctoberFall2018

GOVERNMENT RELATIONS

KENTUCKY BANKER OCTOBER FALL 2018

COMPLIANCE & LEGAL

EDUCATION ALLIANCE

INSURANCE SOLUTIONS

PRODUCTS & SERVICES

HOPE OF KENTUCKY

WANT TO HELP? page 34 KBPAC POLITICAL ACTION COMMITTEE

Kentucky Banker Magazine Official Publication of the KBA www.kybanks.com

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RIGHT TIME NOT NOW Hurricane Florence Cuts Charleston, SC Convention Short

Third Timeâ&#x20AC;&#x2122;s a Charm A Moment of Silence Bob Owsley 60 Years KenBanc Cup Champions << Betty Lou Wright Day page 16

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KENTUCKY BANKER OCTOBER/FALL 2018 IN THIS ISSUE

Lanie and Barry Gardner stand under the Riviera Ballroom’s theatre sign in Charleston, South Carolina, at the 2018 Annual Convention.

2018-2019 OFFICERS Chairman Mr. David M. Bowling, CEO Citizens Union Bank of Shelbyville Vice Chairman Mr. Lloyd Hillard, Jr. President & CEO United Bank & Capital Trust Co. Treasurer J. Wade Berry President & CEO Farmers Bank & Trust

Representing Group 5 Mr. Gregory D. Goff, President & CEO First National Bank of Kentucky Representing Group 6 Mr. Darin L. Young President & CEO, Century Bank of Kentucky Representing Group 7 Mr. Steve Tolliver, Market President The Monticello Banking Company Representing Group 8 Mr. Anthony Kinder President & CEO Peoples Bank of Kentucky

Past Chairman Mr. Timothy E. Barnes President & CEO Hometown Bank

Representing Group 9 Mr. Jed Weinberg Chairman, Bank of Hindman

President & CEO Mr. Ballard W. Cassady, Jr. Kentucky Bankers Association

Representing Thrifts Ms. Shanda L. Smith, President & CEO Blue Grass Federal Savings & Loan

BOARD OF DIRECTORS

Representing Thrifts Kari R. Gough President & CEO, Winchester Federal Bank

Representing Group 1 Mr. J. Brent Bugg President & CEO, Fredonia Valley Bank Representing Group 2 Ms. Lanie W. Gardner Community President First Southern National Bank Representing Group 3 Mr. John T. Taylor President & CEO, PBI Bank Representing Group 4 Mr. Dan M. Harbison President & CEO The Farmers National Bank of Scottsville

Chairman’s Corner.................7 Straight Talk...........................9 Tim Barnes...........................10 Nina Gottes Joins KBA..........13 Betty Lou Wright Day...........16 Bob Owsley 60 Years...........17 The Peoples Bank................19 Velocity Solutions................20 Sherman Tebault.................22 Metro Bank Bikes.................27 KenBanc Cup........................28 Bert Ely.................................29 2018 Convention.................30 Hurricane Relief...................34

Representing Bank Size; $1B or more Mr. James A. Hillebrand, President Stock Yards Bank & Trust Company Assets at least $200M; less than $1B Mr. Dale Sights President, Field & Main Bank KBA Benefits Trust Mr. W. Fred Brashear, II President & CEO, Hyden Citizens Bank Kentucky Bankers Association 600 West Main Street, Suite 400 Louisville, Kentucky 40202

ON THE COVER

Although Hurricane Florence cut short the 2018 Annual Convention, the KBA left its mark on Charleston, SC.

Kentucky Banker Magazine (KBM) is the official bi-monthly periodical of the Kentucky Bankers Association (KBA). No part of KBM may be reproduced without written permission from the KBA. The KBA is not responsible for opinions expressed by outside contributors published in KBM. The KBA reserves the right to publish submissions at the discretion of the KBM editorial team. Subscriptions: $30/year for KBA members; $60/year for KBA non-members; single copies $5 each.

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KENTUCKY BANKERS ASSOCIATION STAFF 22 EMPLOYEES WITH 300+ YEARS OF COMBINED EXPERIENCE SERVING THE COMMONWEALTH

Ballard W. Cassady Jr. President & CEO bcassady@kybanks.com

Jamie Hampton Education Services Coordinator jhampton@kybanks.com

Debra K. Stamper EVP & General Counsel dstamper@kybanks.com

Paula Cross Education Services Coordinator pcross@kybanks.com

Matthew E. Vance Chief Financial Officer mvance@kybanks.com

Tammy Nichols Events Coordinator Finance Officer, HOPE of KY tnichols@kybanks.com

Selina O. Parrish Director of Membership sparrish@kybanks.com Natalie Kaelin, Esq. Director of Education nkaelin@kybanks.com Josh Fischer Director of Communications jfischer@kybanks.com Billie Wade Executive Director, HOPE of KY bwade@kybanks.com Miriam Cole Executive Assistant mcole@kybanks.com John P. Cooper Legislative Solutions jcooper@kybanks.com Michelle Madison IT Manager mmadison@kybanks.com Steve Whitlow Systems Engineer swhitlow@kybanks.com Nina K. Gottes Sponsorship & Business Development ngottes@kybanks.com

Katie Rajchel Staff Accountant krajchel@kybanks.com Casey Guernsey Enrollment and Billing Specialist cguernsey@kybanks.com Chuck Maggard President & CEO, KenBanc cmaggard@kybanks.com Lisa Mattingly Director of Sales & Service KBA Benefits Solutions lmattingly@kybanks.com Brandon Maggard Account Representative KenBanc Insurance Services bmaggard@kybanks.com Donna McCartin Benefit Support Specialist dmccartin@kybanks.com Audrey Whitaker Insurance Services Coordinator awhitaker@kybanks.com Allie Graves Benefit Support Specialist agraves@kybanks.com

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SINCE 1891

Third Time’s A Charm “I am humbled and honored.”

Like many of you this was my third time being evacuated from a KBA Convention. The first was in 1999 when Hurricane Floyd sent us all home early. I remember leaving at 4:00 AM with my wife Mary Ann driving since I had come down with strep throat. We made it safely to Atlanta but it was a tense experience.

CHAIRMAN’S CORNER Mr. David M. Bowling, CEO Citizens Union Bank of Shelbyville 2018-2019 KBA Chairman

I spent the first 25 years of my career as a CPA, primarily with Eskew and Gresham and then Crowe Horwath (now just Crowe). Most of that time I spent working with community banks, in and around Kentucky.

I also had the great pleasure of having some brilliant community bankers as clients. Folks like Fred Brashear, Luther Two years later we all experienced the tragedy of Septem- Deaton, Louie Prichard, Greg Caudill and many others just ber 11th and were forced to drive our rental cars home to name a few. I also got to spend a lot of time in little once again. Like most of you I will always remember where towns like Inez and Hyden and Paintsville and Sandy Hook.

I was on that fateful day and all of the fears and emotions I learned a lot from those guys and many others about how banks work, and make money and serve their comthat permeated the entire country. munities. These guys were, and still are, great mentors and This time, Hurricane Florence. Thankfully, Florence was role models for all of us. largely uneventful for Kentucky bankers, other than cutting the convention a day short. I think most everyone My real banking career began right at the start of 2007; made it home without significant difficulty other than suffice it to say, my timing for getting into banking was absome scheduling inconveniences. The Governor of South solutely perfect. Let’s just say it did not quite go exactly Carolina made the right call, however, and our prayers con- how I planned it. The economy crashed and pretty soon tinue to go out to all of the folks in the region who were the regulators showed up. That’s when the fun really started. But, like most of you, we rolled up our sleeves and impacted by the storm. worked our way through the challenges of the Great ReSince there was no formal passing of the torch at the cession and fortunately I believe we have come out the Convention, let me take this opportunity to say how truly other side a stronger bank. And, while I think we are better humbled and honored I am to accept the role as Chairman we certainly don’t have it all figured out. I do know one of the Kentucky Bankers Association for the coming year. thing, however - we sure have learned a lot in the last ten years. In some ways that’s what makes this job fun. There’s Unlike many of you, I did not start out in banking. a new challenge every day, and every day brings another opportunity to learn something new.

I have great respect for what community banks do and the difference they make in the communities they serve.

Community bankers coach little league, chair the chamber of commerce and help fund projects that no one else is willing to do. As you know, our phones are the first ones to ring when a charity needs help, or the school needs some volunteers.

MAKING IT OFFICIAL: Outgoing KBA Chairman Tim Barnes pins new KBA Chairman David Bowling with the Chairman’s Pin

Without community banks and community bankers a lot of important things simply would not happen in Kentucky.

CONTINUED ON THE NEXT PAGE

FALL 2018

PAGE 7 | KENTUCKY BANKER

UNITED IN SERVICE

continued: Third Time’s A Charm

CHAIRMAN’S CORNER Mr. David M. Bowling, CEO Citizens Union Bank of Shelbyville 2018-2019 KBA Chairman

As for my new role as Chairman, I can tell you that follow- they are. For example, Senate Bill 2155 was a great step ing Tim Barnes and Mike Mercer is going to be hard. They in the right direction for regulatory reform, but I am not did a great job and will be a tough act to follow. sure it would have happened had it not been for the relationships that Ballard and John Cooper have in DC with One thing I am sure of is there is no way I am going to be as Senators McConnell and Paul and Congressmen Barr and funny as those two guys. If I’m lucky, maybe I can get Tim Hensarling. Ballard and John probably won’t get the credit to write me a few jokes for the group meetings next year. they deserve, but they had a huge hand in making that bill I do think it should be a fun year though. There is a lot go- happen. ing on at the state level, especially with the Franchise Tax issue. I’m pretty sure things will continue to be interesting As I said, I am humbled and honored to accept this posiin Washington as well. tion. I commit to every KBA member that I will give my role as Chairman 100 percent. I will work to support the KBA I’m looking forward to working with Ballard and the KBA team in all that they do, and to represent your interests to staff. Sitting on the Board the last couple of years, it’s pret- the best of my ability. ty obvious they do a great job of making the Chairman’s job look easy. I have come to appreciate just how effective

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FALL 2018

SINCE 1891

A Moment of Silence...

STRAIGHT TALK Ballard W. Cassady, Jr. President & CEO bcassady@kybanks.com

Please take a moment of silence in memory of M. Brooks Senn, a longtime friend of our industry and past General Counsel of the KBA, who passed on September 28, 2018.

FALL 2018

PAGE 9 | KENTUCKY BANKER

SINCE 1891

Right Time, Right People Hurricane Florence interrupted the 127th annual KBA Convention and sent us running “Against the Wind” (Yes I have tickets to the Bob Seger concert at the Yum! Center) but Florence did not take the wind from our sails. I want to thank the KBA staff and membership for allowing me to serve as your Chairman. It was a great ride! Below you will find the speech that I had prepared for the closing banquet: As we close the 127th Annual KBA Convention, I would like to add to the theme of Right Time, Right Now. I would like to add:

Right Time Right Now Right People Ronald Reagan once said “Surround yourself with great people, delegate authority; and get out of the way!”

As I look around this ballroom, I see a lot of great people. A lot of great bankers that during this past year I got to meet some for the first time and some that I have known for years. Kentucky Bankers that according to the American Bankers Association volunteered 85,881 hours back to their communities last year. It’s what we do as an industry.

I see the world’s best banking association in the Kentucky Bankers Association. I see Ballard Cassady who called me early on Easter morning to discuss bank taxes. I think of Debra Stamper who is fighting and beating cancer while still emailing me at all hours of the night about by-laws and KBPAC goals. I see Selina Parrish who travels the state two or three times a year to make banking easier in Kentucky. I see Josh Fischer who helped me to write articles for the Kentucky Banker and who put Champ on the cover of the latest issue. I see Natalie Kaelin who directed me from Paducah to Prestonsburg during the group meetings.

I see John Cooper who tried to teach me politics over the last 12 months and that Strawberry Boone’s Farm goes good with Chicken. I see Chuck Maggard singing Take Me Home Country Roads as he travels West Virginia. I see Billie Wade and his team at HOPE making great loans and sharing them with community banks. I see Tammy Nichols praying that I stay on script tonight.

I hear Miriam’s voice and see her emails informing me of what, when, and where. Finally, I see Matt Vance who tells me what a better year we had than when Mike Mercer was Chairman.

There are some other special people that I have been lucky to surround myself with that I would like to recognize. I think they are all here tonight.

PAGE 10 | KENTUCKY BANKER

PAST CHAIRMAN’S CORNER Mr. Tim Barnes, President/CEO Hometown Bank 2017-2018 KBA Chairman

Denny and Jeanie Dorton. Denny hired me and gave me a start in this wonderful industry. He passed me along to Jim and Jane McKenzie at Liberty National Bank – there are banks and there was Liberty. Well there are mentors and there is McKenzie. Jim and Yvonne Richard – Jim brought me and my family to Corbin and I am forever grateful. About this time of year in 1999, a country lawyer called me to his barn, offered me a warm beer and the opportunity of a lifetime. He said, “let’s start a bank”.

Easy enough. I was 33 years old. A week later, I had no job, no income and no car. Thank you, Bob Hammons. Somehow, we made this crazy idea into reality. Hometown Bank will be 19 years old in April. Bob and his wife Debbie are here as well.

Starting the bank was hard but to quote Winston Churchill, “My most brilliant achievement was my ability to persuade my wife to marry me.” After I started working at Liberty, I was in Paintsville one weekend to check on my Mother and ran into a beautiful aspiring country music singer at a ballgame. She was working for the Dorton’s, so I call Denny to ask him if I should ask her out. He said not really and kind of changed the subject. He also told that young lady not to go out with me and she ask why. His reply, because he will marry you and take you out of Paintsville.

Denny is a very smart man. Dee and I have been married 23 years. And she is the much much much better half.

I would also like to recognize a few folks that could not be here tonight; Tanner, a student at WKU majoring in Finance and Abe, a student at Corbin High School. These two boys have grown up at KBA conventions. And yes, Tanner is looking for a banking internship!

My parents always provided for my brother and I and it was my father that instilled me with the drive to be the best at whatever you do. He passed away in 1991 just as I moved to Louisville.

My mother Phyllis, she is home watching Abe and the dogs so that I have a house still standing when we get back to Corbin.

Mom is my biggest supporter.

And finally, but definitely not least, thank you to the Hometown Bank family who allow me to delegate and are GLAD when I get out of the way. Several of our directors and employees have been with us since the day the bank opened, April 3, 2000.

Right Time Right Now Right People

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UNITED IN SERVICE

Deaton Named Treasurer

#kbabankshots

BANK SHOTS!

ABA Makes Official in NYC

Luther Deaton,Jr. chairman, president & CEO of Central Bank, has been named the treasurer of the American Bankers Association (ABA). The ABA named new officers at the association’s annual convention held in New York, October 21-23. This is the second time Luther has served on the board of the ABA. “I am honored by the opportunity to serve in this capacity and to represent community banks at the national level,” stated Deaton (pictured below at left). “I am eager to work with the other officers to address important issues affecting banks across the country.”

Bryant Named to Board The American Bankers Association (ABA) recently elected Pedro Bryant, President and CEO of Metro Bank (Louisville), to their 2018-2019 Board. Mr. Bryant was installed at the ABA’s annual convention in New York, October 21-23.

ETHEL SPARKS Community Trust Bank announced Ethel Sparks has been promoted to the position of Branch Manager. Ms. Sparks has worked for Community Trust Bank for over 24 years.

She previously worked at Community Trust as a Proof Operator, a Teller, Head Teller, and Executive Secretary. Her duties as Branch Manager include providing consumer, residential, and commercial lending options to new and existing client relationships, overseeing the daily operations of the branch office, and calling on existing and prospective clients to develop new business and to retain and expand existing business. Ms. Sparks graduated from Middlesboro High School in Middlesboro, Kentucky.

She participates in charitable events such as March of Dimes and Relay for Life.

KBA BANK SHOTS! highlight your achievements; this is where we publish your successes & acknowledge your milestones. email jfischer@kybanks.com @kybankers #kbabankshots

PAGE 12 | KENTUCKY BANKER

FALL 2018

SINCE 1891

#kbabankshots

BANK SHOTS!

Nina Gottes Joins KBA “I could not be more excited!”

STEPHANIE PERRY Community Trust Bank announced Stephanie Perry as the Woodford Plaza Branch Manager. She has worked in the banking industry for more than 14 years. Her continuing education includes: Kentucky Bankers Association (KBA) Principles of Banking, KBA Branch Management Certification and American Bankers Association (ABA) Introduction to Trust Products and Services Certificate.

Nina K. Gottes has joined the staff of the Kentucky Bankers Association, overseeing Sponsorship & Business Development. A native of Northern Kentucky, she spent 27 years with Southwest Financial Services (acquired by Solidifi in 2015) where she worked with national and regional financial institutions.

She’s worked with Kentucky banks and attended KBA events (Spring Conferences, Annual Conventions and KBA Educational Alliance forums and seminars); she brings both a vendor’s perspective and a salesperson’s mentality to her new job with the KBA. “I could not be more excited to begin this new chapter of my career with the Kentucky Bankers Association,” Gottes said. “I look forward to meeting and getting to know our KBA vendors, sponsors and bankers.”

If you have any questions for Nina, or want introduce yourself, email: ngottes@kybanks.com

SHAWN REYNOLDS The Murray Bank announced Shawn Reynolds as VP/Loan Officer. He comes to the bank with a wealth of experience in banking, most recently working at Independence Bank where he served as a Loan Officer and Branch Manager. “Our success lies in the strength of the community we serve and Shawn embodies this core belief,” said Bob Hargrove, President and CEO of The Murray Bank.

“Shawn’s addition to our team helps strengthen and enhance our ability to provide the highest service to Murray and Calloway County, and is evidence that we want to not only be the bank of choice, but the employer of choice.”

FALL 2018

Nina K. Gottes

SINCE 1891

Sponsorship & Business Development p 502-736-1284 c 513-293-2467 e ngottes@kybanks.com 600 W Main Street, Suite 400 Louisville, Kentucky 40202 www.kybanks.com f @kybankers

PAGE 13 | KENTUCKY BANKER

SINCE 1891

BEVERLY HALL

Farmers National Bank promoted Beverly Hall to Director of Data Operations.

Hall joined FNB in 2016 and has worked as a Teller and a Data Operations & IT Support Specialist.

The Graduate School of Banking at Colorado Announces the Graduation of 12 KY Bankers in their 2018 Class

MICHELLE OSBOURNE Farmers National Bank promoted Michelle Osbourne to Branch Manager.

Osbourne will manage the Lebanon Campbellsville Highway Office.

Pictured, front row: Andrew Dorton, Kentucky Department of Financial Institutions, Frankfort; Ellen Sharp, Central Bank & Trust Co., Lexington; Clarke Goucher, Kentucky Department of Financial Institutions, Frankfort; Patty Gibson, Commercial Bank, West Liberty; Charlie Riggs, Kentucky Department of Financial Institutions, Frankfort. Pictured, back row: Andrew Davis, Hometown Bank of Corbin, Inc., Corbin; John Campbell, Kentucky Department of Financial Institutions, Frankfort; Adam Gray, First Federal Savings Bank, Danville; Josh Devore, South Central Bank of Barren County, Inc., Glasgow; Jason Redfern, First Southern National Bank, Princeton; Jamie Coffey, First Federal Savings & Loan Association, Hazard; Lee Ann Hockensmith, First Federal Savings Bank, Frankfort.

Graduate School of Banking at LSU Graduates 16,000th Banker: Peoples Exchange Bankâ&#x20AC;&#x2122;s Daniel Barry The Graduate School of Banking at LSU on June 1, 2018, graduated 185 bankers. Among these bankers was Daniel Barry, Senior Vice President at Peoples Exchange Bank in Winchester, Kentucky. Mr. Barry is the 16,000th banker to graduate from this prestigious program. This three-year program provides courses covering all aspects of banking, economics and related subjects.

Students traveled from twenty-two states and Mexico to participate in this session.

Sponsored by fifteen Southern state bankers associations in cooperation with the Division of Continuing Education at LSU, the banking school requires attendance on campus for three years, with extensive bank study assignments between sessions. The faculty consists of bankers, business and professional leaders, and educators from all parts of the U.S.

PAGE 14 | KENTUCKY BANKER

PAUL THORNSBERRY Central Bank announced the promotion of Paul Thornsberry to director of commercial lending. He began his career at Central Bank in 2004. He is a graduate of Knott County High School.

REBECCA HENSLEY Community Trust Bank announced that Assistant VP Rebecca Hensley will be the Middlesboro Main Branch Manager. Ms. Hensley has worked for Community Trust Bank for over 10 years.

FALL 2018

UNITED IN SERVICE

Betty Lou Wright Day The First Southern National Bank family lost a valuable member with the passing of Betty Lou Wright. An employee with the bank for 53 years, she was a beloved friend to everyone she met and a mother figure to her colleagues. The kindness, humor, empathy and hospitality of Betty Lou Wright made the lives of countless individuals a little brighter and a little better.

During her time at the bank she served the community of Russellville with profound respect and humility. She inspired those she led as head bank teller and left her mark that will never be forgotten. She worked at the bank until her death.

Mark Stratton, Mayor of the City of Russellville, proclaimed September 28, 2018, as “Betty Lou Wright Day.” Pictures below (clockwise): 1) Picture of Betty Lou Wright 2) Members of Betty Lou’s family and First Southern National Bank 3) Letter commemorating “Betty Lou Wright Day” in Russellville

DANA ADAMSON

Traditional Bank announced that Dana Adamson has been promoted to Senior Vice President of Marketing. Adamson graduated from Georgetown College

BECKY ARNOLD Traditional Bank announced Becky Arnold has been promoted to Assistant Vice President, Consumer Loan Officer.

She joined Traditional Bank in 2005.

ALLISON ROBERTS Traditional Bank announced Allison Roberts has been promoted to Assistant Vice President. Roberts joined Traditional Bank in 2006 as a Customer Service Representative.

CHAS SARGENT Traditional Bank announced Chas Sargent has been promoted to Assistant Vice President, Commercial Loan Officer. He joined Traditional Bank in 2013 as a Portfolio Manager.

PAGE 16 | KENTUCKY BANKER

FALL 2018

SINCE 1891

Bob Owsley Celebrates 60 Years at Cecilian Bank BUDDY SCHNEIDER

Traditional Bank announced that F.W. “Buddy” Schneider III has been promoted to Senior VP, Commercial Loan Officer. Schneider graduated with a finance degree from Marshall University.

ROBIN McALLISTER Community Trust Bank announced Robin McAllister has been promoted to Executive Secretary in the Community Trust Bank Middlesboro Market.

CHRISTOPHER FOLLETT Community Trust Bank announced Jon Christopher Follett has been promoted to Commercial Loan Officer in the Community Trust Bank Mt. Sterling Market.

KRISTYN DISPONETTE Traditional Bank announced Kristyn Disponette has joined Traditional Bank as Director of Advertising. Disponette graduated from the UK and has worked in marketing for nearly 20 years.

FALL 2018

PAGE 17 | KENTUCKY BANKER

SINCE 1891

New Main Office!

For The Peoples Bank of Marion

MASON GUY

Traditional Bank is pleased to recognize Commercial Loan Officer and VP Mason Guy as Market Leader for Winchester, Clark County. The market leadership role was previously held by long-time Traditional Bank team member Hagan Codell who retired in May of this year. “It’s a great time to be a part of our local business community, with Winchester developing its downtown commercial district and new opportunities arising throughout Clark County,” Guy said. He is a graduate of EKU and the UK, as well as the KBA’s General Banking School and Commercial Lending School. He joined Traditional Bank in 2002 and has 16 years lending experience. Guy is an active community member. He recently joined the Rotary Club, serves on the Member Services Committee for the Winchester, Clark County Chamber of Commerce.

This summer The Peoples Bank of Marion opened their new main office location in Glasgow. Pictured below, Mr. Terry Bunnell, President/CEO, is holding the scissors in the ribbon cutting ceremony with his wife, Debbie, is standing next to him.

LINDZEY TROGDON Lindzey Trogdon has been promoted to the role of Mortgage Loan Officer in the Owensboro Region of First Security Bank. Trogdon will now be working with First Security customers and their home purchase, construction or refinancing needs. “Lindzey is an extremely dependable, enthusiastic employee.

Her outgoing personality and willingness to work until she has found the best solution are some of her best qualities,” stated Krista Niehaus, Senior Vice President – Sales and Service Manager.

“She has so much knowledge about the mortgage industry; I knew she was the perfect person for this position.” Trogdon started at First Security Bank in July of 2015 in the role of Mortgage Loan Processor. In June of 2017, she was promoted to the Mortgage Loan Processing Supervisor. Trogdon is ready to get started in her new position at First Security Bank. “After six years of being behind the scenes, I am very excited to start interacting with customers faceto-face.”

FALL 2018

PAGE 19 | KENTUCKY BANKER

SINCE 1891

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Sherman Tebault Honored JASON AGEE

Jason Agee has recently been named Asset Manager in the bank’s Risk Management Department. Agee has worked for Paducah Bank for ten years, serving in various capacities.

LAURA MARTIN

Sherman Tebault (pictured at left), VP/Security Officer at Cecilian Bank, was presented a plaque from Jeff Ehringer (at right) with the United States Secret Service for Sherman’s many years of work in security. The plaque was presented during the Financial Institution Security Officers Association meeting held in Louisville earlier this month.

Bank of the Bluegrass promoted Laura Martin (AVP, Financial Center Manager) adding Deposit Production & Treasury Management to her responsibilities.

MARK YOUR CALENDAR / APRIL 14-16, 2019

KBA SPRING CONFERENCE French Lick Resort www.frenchlick.com

BRADLEY SUTHERLAND Central Bank announced that Bradley Sutherland has joined Central Bank as a mortgage lending officer. He joins Central Bank with more than 6 years of experience in financial services.

JOEY JAGLOWICZ Farmers National Bank promoted Joey Jaglowicz to Risk Manager. Jaglowicz also serves as Asst. Information Security Officer and BSA Officer.

PAGE 22 | KENTUCKY BANKER

FALL 2018

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First National Bank Opens New Branch

JENNIFER FRANKLIN

FNB Bank announced Jennifer Franklin was named Senior Deposit Officer. She will be responsible for the overall coordination of the Deposit Operations department. Franklin previously served as Data Resource Manager for FNB.

In August, First National Bank of Kentucky held a ribbon cutting at their newest location in Crestwood, Kentucky.

FELISHA DOWDY Felisha Dowdy joined Paducah Bank’s new Louisville office as Assistant VP, Senior Community Banking and Treasury Management Relationship Manager.

SELINA SHEPHERD Community Trust and Investment Co. announced Selina Shepherd has joined the Wealth and Trust Management team as Assistant VP, Relationship Officer for Private Wealth Services.

JIM HEIDER Jim Heider joined Paducah Bank’s Louisville office as Vice President, Senior Commercial Relationship Manager.

FALL 2018

PAGE 23 | KENTUCKY BANKER

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Metro Bank Gives Bikes For Perfect Attendence PICTURED: Metro Bank CEO Pedro Bryant (at right) and Banking Officer Zachary Johnson (at left) deliver four bicycles to Maupin Elementary School Principal Maria Holmes (center) on October 11, 2018. Maupin Elementary is encouraging students to be at school every day. Metro Bank CEO Pedro Bryant has been a Maupin Elementary volunteer for seven years.

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TH A SPO NK Y NS OU OR S!

2018 KenBanc Cup Winners Crowned at Valhalla

Four golfers teamed up to win the 2018 KenBanc Cup held at Valhalla Golf Club on August 21, 2018. Pictured above (left to right): Sam Perry (First National Bank of Grayson), Lisa Mattingly (KBA Benefit Solutions), Steve Cambron (Home Federal Bank Middlesboro) and Scott Smith (Bank of Maysville). The KenBanc Cup-winning team won the second of two Banker Appreciation Golf Outings (BAGO) held at Arlington CC to earn the chance to compete at Valhalla. The winning team at the first of two BAGOs (pictured below), held at Indian Hills Country Club in Bowling Green, consisted of Howard Elam (Commercial Bank), Jared Topmiller (First Southern National Bank), Gina Standifer (First Kentucky Bank) and Tom McFarland of First United Bank (not pictured).

BAGO FIRST PLACE / ARLINGTON CC

PAGE 28 | KENTUCKY BANKER

BAGO FIRST PLACE / INDIAN HILLS CC

FALL 2018

SINCE 1891

The Height of FCA Hypocrisy

by Bert Ely Farm Credit Watch October 2018

I recently discovered on the website of the Farm Credit Administration (FCA), the FCS’s regulator, an FCA policy statement that represents the height of hypocrisy — the FCA wants FCS institutions to “keep abreast of enforcement actions taken by other regulators” against individuals who have been disciplined by another financial regulator yet the FCA refuses to publish enforcement orders it has issued against current or former FCS employees. The FCA conveniently provides links to the relevant webpages of five other financial regulators — the Fed, FDIC, NCUA, OCC, and the SEC — but not to its own enforcement actions.

The FCA goes on to say that “it is important for [FCS] institutions to be aware of the individuals and institutions against which [enforcement] actions have been taken . . . by other regulators” because federal law prohibits anyone who has been subject to such an order “from participating in the conduct of the affairs of an FCS institution without prior approval by FCA and the agency that issued the order.” Amazingly, the FCA is not willing to provide this same reciprocal courtesy to the other financial regulators or to the institutions they regulate.

The unwillingness of the FCA to publish enforcement orders against individual miscreants complements another FCA policy I previously have criticized — its flat-out refusal to publish enforcement orders issued against FCS institutions. All the banking regulators, of course, readily publish the enforcement orders they have issued as well as the size of penalties they have levied. However, according to FCA Policy Statement #34, the FCA will not disclose an enforcement action if the FCA’s general counsel “determines that a disclosure adversely affects a civil or criminal investigation.”

The banking regulators do not seem to have a comparable concern. The FCA policy further states that should such a disclosure be made, it would have to exclude “information that would identify the institution and/or persons involved.” Not identifying the institution or individuals subject to an enforcement order smacks of protecting the guilty.

The annual and quarterly information statements published by the Federal Farm Credit Banks Funding Corporation, the FCS’s funding arm, hint at the existence of enforcement orders against FCS institutions by stating the number of outstanding

enforcement orders as of the end of the most recent quarter and the approximate size of the offending institutions. As best I can determine, there have been no outstanding enforcement orders since the first quarter of 2016, yet Lone Star Ag Credit, which I have written about in previous FCWs disclosed on Aug. 9, 2017, that its financial statements for 2016 and the first quarter of 2017 “should no longer be relied upon” due to “appraisal and accounting irregularities.”

Lone Star has since come current on its financial reporting, but it appears that its apparently severe accounting problems did not generate any kind of enforcement order or regulatory action against Lone Star or the Lone Star employees responsible for its accounting problems. That regulatory inaction should raise serious concerns at the FCA and on the ag committees — see the next article.

Is the FCA waking up fast enough to risks facing the FCS? On Oct. 2 the FCA issued an informational memorandum summarizing its National Oversight Plan for Fiscal Year 2019. This plan signals that the FCA is aware of key risks facing the FCS as farmers and ranchers deal with a tough economic environment due to declining commodity prices, rising interest rates, and declining real estate prices. The memorandum highlighted the importance of internal controls, noting an “increased incidence [within the FCS] of internal control weaknesses that led to credit losses, increased operating expenses, and increased reputational risk.” That, of course, is what occurred at Lone Star Ag Credit and earlier at FCS Southwest in Arizona, leading to its shotgun merger with Farm Credit West.

One can reasonably wonder, though, what accounting and internal control failures are lurking today inside other FCS institutions. While it is commendable that the FCA is concerned about those risks and the importance of strong internal controls, the key question today is how well do FCS institutions understand those risks as they continue to aggressively compete against commercial banks by offering generous collateral valuations, low interest rates, and promises of patronage dividends?

Another indication of the FCA’s concern about growing risks within the FCS was the recent appointment of Howard Rubin as the chief risk officer of the FCS Insurance Corporation (FCSIC) — he “will act as director of the FCSIC’s Risk Management Division while continuing to provide guidance to [its] board and management on complex legal issues affecting risk to the Insurance Fund.” The three members of the FCA’s board of directors CONTINUED ON PAGE 35

FALL 2018

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UNITED IN SERVICE

Right Time Not Now 127th Annual Convention Cut Short with Hurricane Florence its Heels

KBA Emerging Leaders, some attending the KBA Annual Convention for the first time, and KBA staff in Charleston working the event, reflect on leaving South Carolina when the Governor issued a mandatory evacuation on September 10, the first day of the 2018 General Session.

I had never previously attended the KBA Convention so I was very excited to attend in Charleston. I had a wonderful time at the meet and greet reception on Saturday and at the golf scramble on Sunday. The reception with the exhibitors was also very helpful because I was able to speak with several vendors about how our bank could benefit from working with them. I found all of the speakers during the first General Session to be very informative and engaging. Although the convention was cut short due to Hurricane Florence I had a great experience at my first KBA Convention and I look forward to attending many more.

R. Taylor Rousey, Loan Officer, The Casey County Bank 2018-2019 KBA Emerging Leader The KBA Staff sprang into action upon learning that the Governor of South Carolina had ordered a mandatory evacuation as of noon on Tuesday, the second day of General Session. Our first goal was to let our attendees know that we were cancelling the remainder of the convention. Then the process of packing up began. Upon entering the lobby of The Belmond late that afternoon to load our van, we found organized chaos as guests were checking out to get on the road. Bellmen were scurrying to bring vehicles around and help guests with their luggage. As we walked to dinner that evening, the streets were oddly empty and quiet, as was the restaurant. Just the day before, the streets and market were bustling with tourists and there was a wait for a table at the restaurants. Miriam, Josh and I left The Belmond Tuesday morning and drove back to Louisville with no traffic problems. It was strange to see many of the exit ramps closed and little to no traffic on I-26E as they were preparing to reverse the Interstate. I was disappointed/heavy hearted that we had to evacuate before completing our program. It feels strange for it to be over like leaving a puzzle incomplete.

Tammy Nichols Convention Coordinator PAGE 30 | KENTUCKY BANKER

As an Emerging Leader, experiencing the KBA Annual Convention for the first time was exciting. It was enjoyable getting to meet and socialize with bankers from across the state of Kentucky. Even though we had to evacuate due to hurricane Florence, the speakers that we were privileged to hear were educational and entertaining. Charleston, SC is a beautiful city and made for a wonderful atmosphere surrounding the convention.

Mackenzie Carter, Loan Operations, Farmers National Bank 2018-2019 KBA Emerging Leader The magnitude of the efforts that go into a Hurricane evacuation was amazing to see when leaving Charleston on Tuesday morning â&#x20AC;&#x201C; the exits were being closed on I-26 in order to shut down for all lanes going away from Charleston by 12:00 Noon; and, noticing that there was no traffic going East on I-26, then getting to Columbia, SC where the start of the interstate closure was happening. There were also numerous electric/utility trucks traveling out of Kentucky on their way to provide assistance once the Hurricane arrived. The trip home went smooth but it was sad knowing that Hurricane Florence would soon be impacting thousands of lives in the Carolinas and coastal areas.

Prayers to those impacted by Hurricane Florence.

Selina Parrish KBA Director of Products & Services The 2018 KBA Convention was an experience Iâ&#x20AC;&#x2122;ll never forget.

The speakers and moderators were engaging and entertaining on current conditions that affect all community bankers. I appreciate the KBA for investing in the future of Kentucky banks with the Emerging Leaders Program and thankful for the networking opportunities presented to us while attending this event.

Amber Smith, Loan Officer Morgantown Bank & Trust 2018-2019 KBA Emerging Leader

CONTINUED ON PAGE 34

FALL 2018

SINCE 1891

Right Time

Selina, Tammy and Miriam ready for attendees at registration.

Lining up a putt at Patriots Point golf course.

Attendees mingle in the Riviera Ballroom.

The Crowe contest team set up on a par three.

Lanie Gardner, Lisa Mattingly and Tammy Nichols.

The KBA Emerging Leaders golf team.

FALL 2018

Right Now

PAGE 31 | KENTUCKY BANKER

Right Time

UNITED IN SERVICE

2017-2018 Chairman Tim Barnes addresses General Session 1.

Shannon Reburn, Duncan-Williams (center), looks on.

Matt Kennedy (Banks Street Partners) Banking Today

Chad McKeithen (Duncan-Williams) Navigating Profits.

Panel discusses Matt Kennedyâ&#x20AC;&#x2122;s Banking Today presentation.

John Cooper answers a question from the convention stage.

PAGE 32 | KENTUCKY BANKER

Right Now

FALL 2018

SINCE 1891

Right Time

2018-2019 class of KBA Emerging Leaders.

Lou Masur, Neil Scott (ATM Solutions) and Karen Hall (Anthem).

2018 KBA Annual Convention aftermath.

Vendors and KBA Emerging Leaders on their way to find ghosts.

Next Year

2019 Annual Convention / September 21-24, 2019 / The Greenbrier, West Virginia

FALL 2018

PAGE 33 | KENTUCKY BANKER

UNITED IN SERVICE

CONTINUED FROM PAGE 30

2018 Annual Convention Cut Short My husband Dave and I went out to eat late in the evening on Monday, September 10, prior to evacuating Tuesday morning.

Having lived in Charleston for two years on vibrant King Street, seeing King Street practically empty with sand bags lining the shops and restaurants’ doors was eerie. As I left that morning, I had hope the city I love and the city that welcomed our convention would be spared as much as possible.

Natalie L. Kaelin, Esq. Director of KBA Education Alliance The sun was still shining, the sky was still blue. Florence was coming, what were we to do? The windows were being boarded. Bags were filled with sand. The Convention may have ended early, but at least we left Charleston a little more tanned.

Eleshia Brandon, Vice President Compliance & BSA 2018-2019 KBA Emerging Leader We left Monday evening, when there was all the madness around the front desk and the valet. We spent the night in Asheville, and got back to Louisville on Tuesday afternoon. I spoke with a few bankers and vendors, and the consensus was that they were very happy that the KBA was decisive and ended the convention. At that point it was all about safety. We were with Brandon and his new baby, so it will be a memory we will have to share with her when she grows up.

Chuck Maggard President & CEO, KenBanc Insurance Services

The 2018 KBA Convention was a great success! The experience was full of good food, history, ghost tours, carriage rides, a little education thrown in, and a hurricane… yes, even with an unscheduled hurricane evacuation the convention was still a great success. I valued the information that the speakers provided on Monday and was able to apply some of their perspective into my workflow. I’m truly grateful for the opportunity, and I look forward to future KBA opportunities.

Hayley L. Thomas Assistant Vice President, West Point Bank 2018-2019 KBA Emerging Leader Once we got everything and everyone squared away, it felt surreal being there. For those of us who stayed Monday night, we had time on our hands. Sponsors and Emerging Leaders still wanted to go on the ghost tour we had scheduled, so we did that. Charleston is a city full of history, and full of ghosts apparently. (I recommend the Tour Charleston ghost tour that originates at Buxton Books.) Tammy, Miriam and I drove 10 hours straight to the KBA offices to unload. We put A LOT of time and effort into getting ready for this convention, and our team did a great job mobilizing once the decision was made to end the convention early. I’m sure we’ll be telling stories about this convention for years to come.

Josh Fischer KBA Director of Marketing and Communications

Kentucky Bankers Disaster Relief Fund Although our 2018 Convention in Charleston, South Carolina was cut short by Hurricane Florence, those in the region are still dealing with the aftermath. As it has done in the past with disaster relief efforts in New Orleans, Texas and Puerto Rico, the KBA will be collecting donations to send to disaster relief efforts in North and South Carolina. If you are interested in contributing to the KBA’s Hurricane Florence disaster relief fund, please make checks (corporate or individual) payable to KBA Disaster Relief Fund, and mail them to: Kentucky Bankers Disaster Relief Fund 600 W. Main Street, Suite 400 Louisville, Kentucky 40202 PAGE 34 | KENTUCKY BANKER

All donations will be used to help recovery efforts. We will work with NC’s and SC’s banking associations to make sure your money does the greatest good.

FALL 2018

SINCE 1891

CONTINUED FROM PAGE 29

Ely: The Height of FCA Hypocrisy also serve as the directors of the FCSIC, which guarantees the timely payment of principal and interest on debt issued by the Funding Corporation. The insolvency of an FCS institution, most likely through loan losses, could trigger a claim on the fund balance the FCSIC has built up through premiums paid by FCS institutions. Given the stresses agriculture and the FCS are facing today, Mr. Rubin faces a challenging task.

What happens if a patronage dividend is not paid as promised?

Bankers have complained to me with increased frequency about promises of a patronage dividend that FCS institutions make to prospective borrowers. Patronage dividends, of course, are nothing more than an interest rebate, but presumably they are payable only if the FCS institution has sufficient funds and earnings to justify the rebate.

In the July 2018 FCW I criticized a video produced by ArborOne Farm Credit that a banker sent to me because of the implied promise in the video that the patronage dividend is guaranteed

to be paid every year. What the video did not make clear is that there could be years in which no dividend would be paid. How often the promise of a dividend is not honored is unknown, but there are least two instances in recent years when an FCS association paid no patronage dividend or at best a reduced dividend. Lone Star Ag Credit paid no patronage dividend in 2017 following the eruption of the accounting problems mentioned above.

The patronage situation at FCS Southwest is murkier because of sketchy reporting of its finances after its financial problems erupted in 2014 but it appears that its patronage dividend dropped substantially after 2014. The FCA should be doing much more to effectively police the patronage-dividend commitments many FCS associations dangle in front of prospective borrowers.

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