Check Date - 12/29/15 Larger Payroll1 - OS PR1 Time Clock
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Add Change Request
100236 - Automation - D Wyatt - PFM 500 EE
Estimated Liability
Run Pre-Post Journal
Employees
$ 483 Employees Paid
Net Cash
$358,817.83
Employee Tax Liability
$122.632.76
11
Employer Tax Liability
$43,376.55
7
$524,827.14
12
Total Cash Requirement
Submit Payrun
Check Summary
482
Employee Checks
Employees Not Paid
1
Manual Checks
New Hires
0
Third Party Sick Pay
With Pay Related Changes
0
Voided Checks
Liability Summary
Cash Requirements
Net Cash
Employee Tax Liability
POC Checks
Employer Tax Liability
$6,297.39
Partial Direct Deposit
$50.09
Net Direct Deposit
$351,857.35
POC Manual/Void Checks
$461.28
Third Party Sick Payments E - Payables Total
Social Security - Employee
$33,290.69
Medicare - Employee
$7,785.92
Social Security - Employer
$67,262.34
Federal Unemployment
State Withholding
$14,175.20
State Unemployment
$0.00
Local Withholding
$118.61
$358,817.83
Total
$33,290.69
Medicare - Employer
Federal Income Tax
$151.72
$0.00
POC Payables
$7,785.92 $2,128.13 $171.81
Worker’s Compensation
$122,632.76
$0.00 Total
$43,376.55
Deductions Not Taken
Paygroup Totals - All Departments
Payroll. HR. Time. Onboarding. To help community banks enhance their portfolio of services, The Bankers’ Bank of Kentucky partners with Paycor to offer intuitive HR and payroll solutions customized to fit your clients’ business needs.
Payroll & Time
Human Resources
Onboarding
Additional Services
º Payroll & tax filing
º Employee handbooks
º Employee self-service
º Workers’ compensation
º Online check stubs
º HR best practices
º Compliance documentation
º Tax credit services
º Employee mobile access
º HR advice & guidance
º Upload company documents
º Custom reports
º Time management
º Employment screening
º Electronic acknowledgement
º Attendance tracking
º Benefits management
º Time clock devices
º Applicant tracking
For more information, contact The Bankers’ Bank of Kentucky:
Lynn Ellis, lellis@bbky.com Van Davidson, vdavidson@bbky.com Ralph Ising, rising@bbky.com David Fletcher, dfletcher@bbky.com To learn more about Paycor, visit www.bbky.com/paycor
JUNE 2016 KBA STAFF
OFFICERS
Ballard W. Cassady Jr. President & CEO bcassady@kybanks.com
Chairman Mr. Louis Prichard Kentucky Bank
Debra K. Stamper EVP & General Counsel dstamper@kybanks.com
Vice Chairman Mr. Michael H. Mercer First State Bank
Matthew E. Vance Chief Financial Officer mvance@kybanks.com
Treasurer Mr. Timothy E. Barnes Hometown Bank of Corbin
Selina O. Parrish Director of Vendor Solutions sparrish@kybanks.com
Past Chairman Mr. H. Lytle Thomas Heritage Bank, Inc.
Paula B. Cravens Sturgeon Director of Education Solutions pcravens@kybanks.com
BOARD OF DIRECTORS
Josh Fischer Director of Communications jfischer@kybanks.com Billie Wade Executive Director, HOPE of Kentucky bwade@kybanks.com Miriam Cole Executive Assistant mcole@kybanks.com John P. Cooper Legislative Solutions jcooper@kybanks.com Paula Cross Education Services Coordinator pcross@kybanks.com Jamie Hampton Education Services Coordinator jhampton@kybanks.com Natalie Kaelin Assistant General Counsel nkaelin@kybanks.com Michelle Madison IT Manager mmadison@kybanks.com Lanie Minton Administrative Assistant lminton@kybanks.com Tammy Nichols Convention Coordinator Finance Officer, HOPE of Kentucky tnichols@kybanks.com Katie Rajchel Staff Accountant krajchel@kybanks.com Yvonne Savage PAC Services Coordinator ysavage@kybanks.com Angie White Sponsorship Relations awhite@kybanks.com Steve Whitlow Systems Engineer swhitlow@kybanks.com
Mr. Bill Allen Bank of the Bluegrass and Trust Co. Mr. William Alverson Traditional Bank, Inc. Mr. James W. Beach Peoples Bank & Trust Co. Mr. J. Wade Berry Farmers Bank & Trust Mr. W. Fred Brashear, II Hyden Citizens Bank Ms. Lanie W. Gardner First Southern National Bank Mr. Gordon Kidd United Cumberland Bank Mr. Glenn Meyers Kentucky Federal Savings & Loan Assoc. Mr. Michael Mineer Citizens Deposit Bank & Trust Mr. Dale Sights Field & Main Bank Mr. Thomas J. Smith, III American Bank & Trust Co., Inc.
CONTENTS CHAIRMAN’S CORNER........................................5
»STRAIGHT»TALK».........................................6 MY TWO CENTS AND THEN SOME................8 SCAM ALERTS........................................................9 KBA ENDORSES PEOPLESTRATEGY...........11 BANKER APPRECIATION GOLF...................12 RESOLUTIONS.....................................................15 EMERGING LEADERS........................................16 CORPORATE ACCOUNT TAKEOVER............24 BERT ELY’S FARM CREDIT WATCH...............22 2016 SESSION IN SUMMARY......................30 CLAUDE BENTLEY PROFILE........................30
Mr. Ryan Curtis Steger Town Square Bank Mr. John T. Taylor PBI Bank
Our Mission Statement Together We Make A Difference
Mr. Jed Weinberg Bank of Hindman
Chuck Maggard President & CEO cmaggard@kybanks.com Lisa Mattingly Director of Sales & Service lmattingly@kybanks.com Tim Abbott Account Representative tabbott@kybanks.com
Our Commonwealth
One Voice Unifying Banking in Kentucky The KBA is a nonprofit trade association that has been providing legislative, legal, compliance and educational services to its member institutions since 1891. The KBA’s directors and staff work together with its members to make the financial services industry a more effective and successful place to work. The strength of the KBA is bankers unifying as an industry to speak as one voice.
Brandon Maggard Account Representative bmaggard@kybanks.com
Kentucky Bankers Association 600 West Main Street, Suite 400 Louisville, Kentucky 40202
Donna McCartin Benefit Support Specialist dmccartin@kybanks.com
Phone: 502-582-2453 Fax: 502-584-6390 Website: www.kybanks.com
Audrey Whitaker Insurance Services Coordinator awhitaker@kybanks.com
The purpose of the Kentucky Bankers Association is to provide effective advocacy for the financial services industry both in Kentucky and on a national level; to serve as a reliable and responsive source of information and education about areas of interest to the industry; and to provide a catalyst and forum for collective industry action. The KBA does this in four ways: 1. Government relations & industry advocacy 2. Information interchange 3. Education 4. Products and services
ADVERTISE/SPONSOR Call Angie White 502-736-1284 or email awhite@kybanks.com
MAGAZINE
SUBMIT/SUBSCRIBE Call Josh Fischer 502-736-1283 or email jfischer@kybanks.com
Kentucky Banker Magazine (KBM) is the official 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 of articles published in KBM.
CHAIRMAN’S CORNER
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Focus Your Time and Money Being Efficient and Engaged
tinue to fight for relief but we have to play the cards that are dealt us by focusing on our customers and focusing on ways to become more efficient.
Louis Prichard, KBA Chairman President & CEO, Kentucky Bank
One avenue that we often overlook in becoming more effiLast month, as part of my letter, we discussed the need to cient is engaging our own representatives. Banks that have analyze details and the benefits of drawing accurate con- engaged employees often are high performers. According to clusions from those details. In that article, for example, we the Gallup Company in a 2013 report, “To win customers mentioned the cost of compliance expense and the need to and a bigger share of the marketplace, companies must first analyze our operating expenses along with what the cost of win the hearts and minds of their employees.” compliance contributed to our total expense. As we think about the cost of doing business, we not only have an obli- Here are some tips on ways to make our banks more effigation to understand these costs, but also to take the nec- cient and focused through engaged employees: essary steps that will allow us to be efficient and effective while, at the same time, service our customers. After all, it is Get SMART our customers who are the most impacted by our industry’s That is an acronym for our goals based on being Speincreasing cost of doing business. In fact, the impact is so cific, Measureable, Actionable, Realistic, and Time Fogreat that it is slowing the entire economy. cused.
“To win customers and a bigger share of the marketplace, companies must first win the hearts and minds of their employees.” Gallup Report
First, let us discuss some facts. In the last sixteen years, there have been only two years when the G.D.P. was above 3%. Certainly the “Great Recession” has had significant impact on our economy, but so have unnecessary regulations. Today, the Code of Regulations is 81,000 pages long.
Build Rapport We, as leaders, should ensure our employees understand their roles and how they fit into the bank’s big picture, while also giving constant feedback. Engaged employees are 20% more productive and are absent from work about 40% less than unengaged employees. Tolerate Experiments The highest business achievers try new things, yet they can be wrong more frequently, as well. We should understand that our highly engaged people will sometimes fail. As such, we need to understand and plan for recovering from a failure: “Never bet the ranch on a project.”
A recent study by two professors at George Mason University revealed some very serious facts. Their study examined 22 different industries and the regulations imposed upon them since 1977. Their analysis indicates that regulations Be Willing to Delegate have cost our economy over $4 trillion. The authors of Provide clear direction and then get out of the way! the study determined that, if these costs were a country, it would be equivalent to the 4th largest economy in the world More often than not we look to gain efficiency by cutting or behind the U.S., China, and Japan. managing expenses, which is certainly important. However, a great way often overlooked is the creation of an environWe, as bankers, are very aware of the increasing costs of reg- ment of a highly motivated and engaged group of employulations. We, as has been stated in prior articles, will con- ees. After all, aren’t they our greatest asset?
UNITED IN SERVICE
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JUNE 2016 | KENTUCKY BANKER 5
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Three Decades of Service
An Interview with Ballard W. Cassady Jr. Ballard Cassady has led the KBA for 30 years (1986-2016). In that time he has witnessed the financial industry’s many ups and downs, all the while keeping the KBA one of the most respected Bank Associations in the country. KBA Director of Communications Josh Fischer sits down with the KBA’s President and CEO to reflect on the past, present and future.
tions. We could raise dues – or we could try our hand at developing products, services and businesses whose proceeds would largely cover the cost of our operations. Our board wisely chose the latter, and that path led to the complete transformation of the KBA over the past three decades. Today, only 14% of our revenue is reliant on dues. The rest we produce through entrepreneurship. Our ‘customers’ are the very people we serve as members, which keeps the entrepreneurial side of what we do closely tied to the interests of our membership. It’s taken us a long time to get here, but this was the goal from the day I was hired. Whatever number of banks we serve, which we all know is a decreasing number due to mergers and acquisitions, we can continue to provide high quality services, government relations, education, legal, compliance services — all those services are funded by revenue that we make outside of member dues. That’s why it’s so important for our banks to give us a chance to present them with the endorsed vendors that we’ve evaluated and recommended as a part of our service to our members. Our due diligence process on vendors is In the thirty years you have been guiding the KBA, how second to none, and many applicants don’t get through it. has the KBA grown? Was there a moment you could identify as a turning point, Ballard: When I first came here (in 1986) we had five em- that moment you said to yourself, “Ok, we’re on the right ployees. Our primary service was education, some gov- track now.” ernment relations, but we hadn’t kept up with the rapidly evolving needs of our members. We had a split in the Ballard: At one of my first KBA Board meetings, I rememindustry between the Kentucky Bankers Association and ber the anxiety of having no idea if the board would vote in another group called the Progressive Bankers Association favor of the direction I was recommending. It takes courage (PBA), with the PBA focusing on Kentucky’s largest banks. to go into major debt. I knew all the people on the board, After a divisive battle over branching rights legislation, the but I didn’t know their risk propensity or how they would large banks pulled out of the KBA, taking about 85% of the react to my business plan. When I presented it to them, they KBA revenue with them. Although the majority of banks in were unanimous in their excitement. In that moment, I reKentucky stayed with the KBA, the impact to our revenue alized the KBA had leadership that knew how to evaluate risk – including when to take it – and I knew our chances was catastrophic. of pulling this off were good. At the same time, I was being My first assignment, then, was to unify Kentucky bankers given a level of trust that could never be abused. by addressing the root causes of splinter groups. My second assignment was to make sure that – if best efforts at industry What were some of the results of that first board meeting? unity should ever again fail with loss to membership – the What are some of the calculated risks you took? KBA would not be financially crippled, forcing decisions that weren’t in the best interest of ALL. Every action we’ve Ballard: We plunged right in to the insurance business, taken over the past three decades has been a response to starting an insurance company out in Oklahoma together that “dual mandate” I was given by the board that hired me. with four other state banking associations. Shortly thereafter, we bought an agency here in Kentucky and helped build How did you help the KBA dig itself out of that hole the that agency into one of the premier agencies in Kentucky. Danny McMahan and his staff were great partners in that association found itself in? venture. Danny was a pleasure for all of us to deal with. Ballard: Associations like ours really have only two op- That partnership freed me up to spend more time on govcontinued on next page 6 KENTUCKY BANKER | JUNE
2016
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KBA 1891-2016
»STRAIGHT»TALK»
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continued from the previous page
ernment relations, while putting us on a financial track that enabled our next stage of growth.
Along with Debra Stamper, our Executive Vice President and General Counsel, we have a formidable GR team.
Our next big move was the acquisition of our healthcare program. After being run by a company out of Tennessee, we brought that in-house to partner with our insurance agency – a huge boost to premium income for all of us. In the long term, combining those two companies significantly reduced the costs to our banks. That was a big step for us. We’ve never looked back.
Tell Kentucky Banker readers more about Debra Stamper.
Was there ever a point where you just exhaled, breathed a sigh of relief and enjoyed a feeling of satisfaction? Ballard: No. No? Ballard: No. That’s not in my nature. I love this job, in part, because it’s one in which you can’t afford to feel that way. With all that we’ve become involved in, the stakes have gotten higher with each decision. As an MBA student at Vanderbilt in the 70’s we worked through a ton of case studies, but I don’t remember being told that I might need to deal with all of them at once. That’s the story of these last three decades. I can’t imagine another job that could have demanded the creativity that this one has.
Ballard: Debra is a workaholic’s workaholic. She’s so smart that she could be forgiven a conspicuous ego, but if she has one, it never gets in her way. When John and Debra and I team up on our legislative agenda, we’ve got nearly three decades of shared legislative history and hundreds of relationships to draw on. Just like John, she’s passionate about winning our fights and doggedly tenacious in making that happen. But we also depend on her deep understanding of banking laws, which are highly specific and distinctive. Her skill at writing banking legislation has her published heavily in our current statutes. Between the bankers and the three of us, we’ve managed to effect substantial changes to state and federal banking legislation.
But neither has it ever allowed a moment’s complacency. I’ve had days where I was really proud of what we were doing, the service we were providing to our banks. But relentless change was constantly on our heels. Technologies change. Laws change. Regulations change. With so many Pictured above (from left to right): John Cooper, Ballard Cassady and Debra Stamper. constantly moving targets, moments of satisfaction were fleeting and few. I’ve heard that Debra is a key resource in Frankfort for help on drafting banking legislation. What are some of the significant actions the KBA has taken in your thirty years? Ballard: They know what we know. There’s not another attorney in Kentucky with the specialization in drafting legBallard: The smartest thing we ever did with government islation that she has developed within the KBA. She gets a relations was hire John Cooper. John, at the time we hired lot of requests for that, but she’s ours – we don’t loan her out him, was the Chief of Staff for Joe Prather, President of the very often. Senate. John had the same personality then that he has today, always excited, always ready to go, extremely intelligent. What are some of the major victories legislatively or othI knew five minutes into our interview that he was our guy. erwise for the KBA? He was talking to another association that wanted him, but by taking on two new clients it enabled him to start his own Ballard: We’ve had a lot of success over the years but there consulting company. That’s the best single thing we’ve ever are two major victories that come to mind, one legislative done from a government affairs standpoint. John has never and the other legal. The first was stopping both pieces of nalost his dogged determination. He hates to lose as bad as I tional branching legislation supported by the two national do. He takes it personally, and we need him to. Sometimes banking organizations and replacing it with “entry by acquiit has taken a couple of sessions, but I don’t think we’ve ever sition only” language which helped community banks profailed to achieve one of our industry’s state-level legislative tect their franchise value and at the same time progress the objectives – that kind of track record is truly remarkable. industry. The language for that bill was written by Brooks continued on page 26 Celebrating 125 Years
www.kybanks.com
JUNE 2016 | KENTUCKY BANKER 7
my 2 cents
And then some
125
Things Are Not Always What They Appear Every year, Ballard, John and I approach the new session As a result of these negotiations, the following changes were of the Kentucky General Assembly with great anticipation. made to the rules that must be followed by master commisWe have already taken the time to gather legislative feed- sioners: back from our membership, the Government Relations committee members and bank counsel. Our agenda is set, 1. Foreclosure appraisals must be completed by two disbeing careful to fully prioritize our legislative items and eninterested persons with at least one year of real estate suring that we are not losing sight of what can be reasonably transaction experience. expected to be accomplished given the political atmosphere of the given term. 2. Uniform terms of sale are established for all sales across the state. 10% deposit; balance within 30 days. With all of that in mind, The KBA went to Frankfort this year with a fairly aggressive agenda and we were pleased 3. Master Commissioner must file the report of sale with the results. But, as always, there are details in legiswithin 3 days of the sale. lation of which you must be aware. You can find our 2016 Session in Summary in this magazine at page 30-32 and on 4. Master Commissioners must set a sale date within a the website. reasonable period of time, not to exceed 90 days of the court’s order. That date may be extended only one time, Some items that must be highlighted regarding the bills that for cause, for an additional 30 days. passed are as follows: 5. Advertisement of sale must run at least once, no less SB74 allows clerks to electronically submit title lien termithan 7 days and no more than 21 days, before the sale. nation statements between clerk’s office. This might help The information that must be included in the advertiseyou to file remotely from a closer clerk’s office, but it does ment has been dramatically reduced to save costs. NOT allow a lienholder to submit an electronic termination. 6. Master Commissioner must execute and deliver the MC deed to the buyer within 5 days of the court confirSB122 was the result of several KBA supported bills commation and receipt of payment. ing together at the end of Session. While this bill contains several key mortgage recording statutes, you must also fa7. Master Commissioner may be removed upon audit miliarize yourself with the Supreme Court Administrative determination of serious or recurring violations. Procedures, which apply to master commissioners for releSB 122 requires that the grantee (including the forevant changes as well. Representatives of the KBA met, over closing lender) must file the master commissioner’s the past few years, with various master commissioners, the deed within 5 days of receipt. We rely on you to let us Administrative Office of the Court, Chief Justice John D. know if your Master Commissioner is not complying Minton, Jr. and other interested parties in an attempt to with these new rules. The Administrative Office of the negotiate changes to the current master commissioner sale Courts has agreed to work with us to provide consistent process. Our goal has been, and continues to be, to modify training to the MC’s and to address any complaints of and/or streamline the master commissioner process in such non-compliance. a way that foreclosed properties are sold as expeditiously as possible in order to minimize possible damage to the prop- SB214 eliminates the fee cap for notary services, except for erty and the neighborhoods, and improve conditions for all. armed services personnel and beneficiaries (see the statute continued on next page 8 KENTUCKY BANKER | JUNE 2016
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my 2 cents
And then some
continued from the previous page
language). There is no standard for determining who is in the armed services, so you should ask for identification or self identifying as part of your procedures. Also, I encourage you to implement internal procedures which are consistent with the Uniform Law on Notarial Acts if you are planning to charge for a notary seal. Currently Kentucky has almost no standards by which notary services are judged. This has resulted in some out of state parties refusing to accept Kentucky notary services. Charging a fee for a notary service which is later denied could be viewed as a UDAAP. We are looking at the possibility of some form of increased notarial standards for a future session. HB422 requires local governments to email and provide online a list of properties for which final orders or local code violations have been issued. You should request that the email be sent to the appropriate parties or make sure that bank staff are checking websites regularly to determine if orders have been issued and complied with by the owner. Otherwise you may find your lien to be subordinated to a code lien which will diminish the equity available.
One bill which passed both the House and the Senate, but vetoed by the Governor, was SB245, which implemented the REAL ID federal law. Kentucky will ultimately need to pass compliance legislation to ensure that Kentucky issued drivers licenses and state identification cards are recognized as reliable by the federal government. Without compliant legislation, Kentucky citizens will need to present a passport in order to board a plane when the federal law goes into effect January 22, 2018. But, we must be certain that the law is written in such a way as to ensure that it does not impact name usage on current UCC filings. Please let me know if you have any questions.
Debra Stamper KBA Executive VP & General Counsel dstamper@kybanks.com
Scam Alerts Service Set To Combat Con Artists On May 19 the Office of the Attorney General, along with more than 25 partner organizations, launched Scam Alerts, a text messaging service that notifies consumers when con artists are on the attack in Kentucky.
a recent press conference unveiling his new scam-prevention initiative. “Through Scam Alerts we will, for the first time, be able to directly communicate information about new and trending scams directly to Kentuckians.” Beshear’s office announced Kentuckians can sign up for text notices “Since January 4 (2016), when I took office, we have had to by texting KYOAGSCAM to GOV311 or 468-311, or they issue at least one major scam announcement almost every can enroll online for either text or email alerts at AG.KY. week,” said Kentucky’s Attorney General Andy Beshear at GOV/scams.
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KBA Announces PeopleStrategy® as an Endorsed Vendor The KBA is pleased to announce our endorsement of PeopleStrategy eHCM®, an integrated, enterprise-class Human Capital Management (HCM) solution that helps employers more effectively manage Talent Acquisition, Human Resources, Payroll, Benefits, Workforce Management and Performance Management processes.
KBA members of all sizes can put the trusted technology of PeopleStrategy® to work for you!
PeopleStrategy® delivers innovation and is always committed to doing the right thing. Learn more at this link:
http://www.nxtbook.com/nxtbooks/peoplestrategy/ehcmbrochure/
PeopleStrategy’s Software-as-a-Service (SaaS) eHCM Suite empowers your entire organization through self-service For more information: Contact Selina Parrish at (502) 736and anytime, anywhere mobile access, reducing admin- 1282 or by email at sparrish@kybanks.com. istrative costs and providing more time to focus on your core business and people. PeopleStrategy eHCM includes extensive functionality that is easy to use and configurable PeopleStrategy® Testimonial to your bank’s business requirements ensuring a smoother transition whether you are automating for the first time or “Franklin Bank & Trust spent changing systems. An intuitive user experience for employseveral weeks thoroughly evaluees and managers helps increase user adoption, leading to ating eight payroll systems. We a higher return on investment as well as greater employee satisfaction and engagement. selected PeopleStrategy, and our first payroll processed with them Stay Compliant With Ease in January 2016. We have been impressed with their exceptional PeopleStrategy eHCM also makes it easier to stay compliant solutions and extraordinary serwith ever-changing and increasingly complex regulations vice. Our bank is glad we chose by establishing a single system of record and providing easy PeopleStrategy!” access to the data you need. All of this – and more – is deDamian Wirth, SPHR, SHRM-SCP livered in the Cloud ensuring your solution is always leverSenior Vice President/Chief Human Resources Officer aging the latest technology. Franklin Bank & Trust Company, Franklin, Kentucky
THE BANKERS’ VOICE What our Bankers say about our Products & Services “The instant issuance of our bank’s plastics with CardWizard® has been a tremendous customer service tool for our bank. The customers no longer have to wait a week or longer to receive their debit card now that we can provide the card while the customer is in the bank. For lost/stolen situations, the customers are extremely pleased when they find out that a new card can be issued to them immediately. This product has helped us to achieve greater customer loyalty.” Ms. Elizabeth Griffin McCoy, President/CEO, Planters Bank, Inc., Hopkinsville, KY To learn more contact Selina Parrish at the KBA at (502) 736-1282 or sparrish@kybanks.com 10 KENTUCKY BANKER | JUNE 2016
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UNITED IN SERVICE
How do you like your I.T. —
...neat or on the rocks? LEXINGTON
|
LOUISVILLE
|
LITTLE ROCK
|
CINCINNATI
|
CHATTANOOGA
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ST. LOUIS
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BIRMINGHAM
What do Kentucky bankers think of bourbon? Some like it on the rocks. Some like it neat. Some don’t drink it at all. But all Kentucky bankers have one thing in common: They don’t like their I.T. on the rocks. When better matters, NetGain Technologies is your I.T. department.
The Kentucky Bankers Association endorses Technology OneSource managed IT services provided by NetGain Technologies.
To learn more about solutions for your organization, go to www.netgainit.com or call 844-77-SMART.
We Are Your I.T. Department
FIRST ANNUAL KBA INSURANCE SOLUTIONS BANKER APPRECIATION GOLF OUTING/KENBANC CUP
KBA Insurance Solutions Starts New Tradition with Free Golf Outings Top Two Teams Advance to Play Valhalla in the KenBanc Cup
BOWLING GREEN, Ky. — The first regional Banker Appreciation Golf Outing was held recently at Indian Hills Country Club in Bowling Green. The second Banker Appreciation Golf Outing was held at Old Silo Golf Club May 26. (Editor’s note: results to be posted in July issue.) “Our first event was an overwhelming success. The folks at Indian Hills really put on a first-class event,” said Chuck Maggard, President and CEO of KenBanc Insurance Services. “I’m very happy that we were able to do this for our bankers.”
“I would like to thank our sponsors for making these events possible. Their support got this new tradition off to a great start,” added Maggard. The winning scramble team was 13-under and consisted of Jared Topmiller with First Southern National Bank, KBA Board Member Wade Berry of Farmers Bank & Trust Company (Marion), Michael Beckwith of First Security Bank and Brian Clemmons of South Central Bank. (The teams were selected with an A/B/C/D blind draw.) The team of Kyle Hensley with United Southern Bank, Michelle Coleman with Bank of Edmonson County, Brian Scott with Citizens Bank of Cumberland County and Thomas Smith with American Bank & Trust Company took second place with an 11-under scramble score. These two teams get to move on to the KenBanc Cup to be held at Valhalla Golf Club in Louisville on August 30. “Congratulations to the winning teams,” Maggard said. “See you at Valhalla in August!”
Individual hole contest winners: Long Drive, Logan Brewer (First State Bank); Closest to the Pin, Kyle Hensley (United Southern Bank). First Place: Tournament Director Chuck Maggard, Wade Berry, Brian Clemmons, Jared Topmiller. Not pictured: Michael Beckwith
Runner-Up: Tournament Director Chuck Maggard, Michelle Coleman, Kyle Hensley, Brian Scott. Not pictured: Thomas Smith
continued on next page
What golfers are saying about the Banker Appreciation Golf Outing
“
J. Wade Berry Farmers Bank & Trust Co.
“
I want to give a big THANK YOU to the KBA, the KenBanc Insurance staff, and to all of the sponsors who helped make the first Banker Appreciation Golf Outing such a huge success. The random draw, A/B/C/D-player format gave everyone a chance to win and gave each of us who participated the opportunity to get to know some new people in a fun, relaxing setting. After only one year, the KBA Insurance Solutions Banker Appreciation Golf Outing has established itself as a can’t-miss event. Wade Berry, President & CEO of Farmers Bank & Trust Co.
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CFSB & Calvert City Elementary Hatch Ducks BENTON, Ky - Community Financial Services Bank (CFSB) partnered with Calvert City Elementary School to hatch and raise baby ducks. Earlier this year, Mrs. Becky Smith came to the Benton Banking Center to collect duck eggs from the CFSB pond to incubate for her kindergarten class. “When the opportunity to help raise a new generation of CFSB ducks arose, we were so excited! We’ve hatched chicks for several years, however, this was the first time for ducks,” said Smith. “It not only ties in with our life science content, but also gives the students the opportunity to experience the life cycle first hand.” CFSB President/CEO Betsy Flynn said: “The ducks at our pond have truly become family to us! It was a wonderful idea by Mrs. Smith to have those bright, young minds have the chance to see how those eggs turn into adorable baby ducks.” Once the seven ducks are large enough, they will rejoin the rest of the CFSB ducks in Benton. CFSB is proud to help with educational opportunities for the future of our communities.
Congratulations Senator Morgan McGarvey Known for banking and finance law. Experienced in much more. BANKING & FINANCE LAW COMMERCIAL LITIGATION EQUINE LAW GOVERNMENT LAW REAL ESTATE LAW
BOWLING GREEN
CORBIN
LEXINGTON
LOUISVILLE
Morgan McGarvey
Recipient of the 2016 Young Professional Alumni Award, University of Kentucky College of Law
NEW ALBANY
MorganandPottinger.com
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Amber Ousley
Sammy Jason Pittman
Traditional Bank is excited to welcome Amber Ousley to the bank’s credit team as a portfolio manager and officer. Ousley brings with her 10 years banking experience.
Community Financial Services Bank (CFSB) recently promoted Calloway County Banking Center Team Leader/Senior Vice President Sammy Jason Pittman to Calloway County Market President. The promotion was unanimously approved by CFSB President/CEO Betsy Flynn and the Community Financial Services Board of Directors. This move continues the organization’s quest to ensure customer service and secure the future of CFSB.
Angela Mathis
Jennifer Cloninger
Community Financial Services Bank (CFSB) recently promoted Assistant VP Angela Mathis to VP/McCracken County Banking Center Senior Mortgage Lender. The promotion was unanimously approved by CFSB President/CEO Betsy Flynn and the Community Financial Services Board of Directors. Her financial education includes the Kentucky Bankers Association Essentials of Banking School.
Community Financial Services Bank (CFSB) recently promoted Jennifer Cloninger to Bank Secrecy Act (BSA) Officer. The promotion was unanimously approved by CFSB President/CEO Betsy Flynn and the Community Financial Services Board of Directors. Cloninger’s responsibilities include the coordination, development, implementation and administration of all aspects of CFSB’s BSA Compliance Program.
Brant Welch
Justin Hendrick
Brant Welch has joined Farmers National Bank in the role of Vice President, Customer Experience Manager. Welch has over 20 years of marketing and public relations experience, with 11 of those being in the financial services industry. A Washington County native, he is a graduate of the University of Kentucky with a degree in journalism and obtained his Master’s in Business Administration from Strayer University.
Community Financial Services Bank (CFSB) recently promoted Calloway County Banking Center Loan Officer Justin Hendrick to Assistant Vice President. The promotion was unanimously approved by CFSB President/ CEO Betsy Flynn and the Community Financial Services Board of Directors. Hendrick is a graduate of Calloway County High School and Murray State University with Bachelor of Science in Finance.
Christopher Jackson
Lisa Hart
Kentucky Bank is pleased to announce the addition of a new Small Business Association lender, Christopher Jackson. An experienced lender who specializes in Government Guaranteed Loans, Chris joins Kentucky Bank as Vice President, Small Business Administrator. Chris has helped arrange funding for businesses of all sizes during the past 16 years. He earned degrees in Business from the University of Kentucky and Capital University.
Traditional Bank is excited to welcome Lisa Hart to the bank as Training and Development Coordinator. She brings 25 years banking experience to her role.
Dwayne Stevens
Randell Blackburn
Community Trust Bank, Inc. announced that Dwayne Stevens has been promoted to VP and Corporate Information Security Officer (CISO). Stevens has been with CTB for more than nine years, and is responsible for establishing and maintaining an enterprise wide security program that ensures that employees, data information assets and facilities are adequately protected.
Community Financial Services Bank (CFSB) recently promoted Vice President Randell Blackburn to McCracken County Market President. The promotion was unanimously approved by CFSB President/CEO Betsy Flynn and the Community Financial Services Board of Directors. Randell Blackburn graduated from Paducah Tilghman High School and Paducah Community College.
G. Todd Myers
Susan Ybarzabal
Community Financial Services Bank (CFSB) recently promoted Assistant Vice President G. Todd Myers to Vice President of CFSB. This promotion was unanimously approved by President/CEO/Chair Betsy Flynn and Community Financial Services Board of Directors. This move continues the organization’s quest to ensure customer service and secure the future of CFSB.
Community Financial Services Bank (CFSB) recently promoted Assistant Vice President Susan Ybarzabal to Vice President/McCracken County Park Avenue Banking Center Team Leader. Ybarzabal has 20 years of service in the banking industry. The promotion was unanimously approved by CFSB President/CEO Betsy Flynn and the Community Financial Services Board of Directors.
TO ANNOUNCE A PROMOTION: EMAIL PHOTOS & ANNOUNCEMENT TO jfischer@kybanks.com A promotion announcement in KENTUCKY BANKERS ON THE MOVE consists of: banker name, bank name, branch, new position, previous position, college and hometown. Submissions are published based on space and editorial approval. 14 KENTUCKY BANKER | JUNE
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Adam Gray
Allison Roberts
Adam Gray has joined Central Kentucky Federal Savings Bank, a division of First Federal Savings Bank of Kentucky, as Assistant Vice President and Loan Officer.
Traditional Bank is excited to announce Allison Roberts was promoted to Consumer Loan Officer. Roberts has 14 years banking experience and is a part of the lending team at the Winchester Banking Center. She has been with Traditional Bank since 2006.
Bob Kirby
Carter Offutt
The Community Foundation of South Central Kentucky is recognizing Bob Kirby, one of its founding board members and a Hilliard Lyons Financial Consultant, as its fifth “South Central Kentuckian of the Year.” He was honored at an award luncheon on Tuesday, May 24, at the Knicely Conference Center.
Traditional Bank is excited to announce Commercial Loan Officer Carter Offutt was promoted to Assistant Vice President. Offutt has 10 years banking experience and is part of the commercial lending team at the Palumbo Banking Center. He has been with Traditional Bank since 2006.
Corey Render
Brian Hatmaker
Corey Render has joined the staff at First United Bank and Trust Company as a Vice President/Banking Center Manager. Corey is a graduate of Western Kentucky University and has been in banking for 13 years. He is leading the team at the bank’s Beaver Dam location.
Community Trust Bank, Inc., is pleased to announce that Brian K. Hatmaker has been promoted to Senior Vice President and Building and Facilities Manager of Community Trust Bank. Mr. Hatmaker has been with Community Trust Bank for more than 19 years, and is responsible for the management and coordination of activities related to all company properties.
Jared Fuller
Jason Tucker
Jared Fuller has been named Assistant Vice President/ IT Manager at First United Bank and Trust Company, Madisonville, KY. Fuller holds an associate degree with in emphasis in Information Technology and Microsoft Networking, along with multiple IT certifications. He joined the organization in 2013.
Jason Tucker has been named to a Loan and Business Development Role at First Southern National Bank in Monticello / Wayne County. Tucker, a First Southern Team Member since 2007, most recently served the bank as a Teller. Tucker, a life-long resident of Monticello, and his wife Melissa, have two daughters, Isabella and Olivia.
Karen Glenn
Anita McClain
Karen S. Glenn has been named to the board of directors of First United Bank and Trust Company, Madisonville, KY. Ms. Glenn also serves as the President/CEO of the bank. She is a graduate of Murray State University with a Bachelor of Arts degree in Accounting. She has been with First United Bank and Trust Company for 8 years and has 26 years of banking experience.
Traditional Bank is excited to announce Bank Secrecy Officer Anita McClain has been promoted to Vice President. McClain has 23 years banking experience with Traditional Bank and works at the Main Banking Center in Mt. Sterling.
Meranda Cox
Sarah Jefferson
Traditional Bank is excited to announce Meranda Cox was promoted to Consumer Loan Offcer. Cox has 14 years banking experience and joined the bank’s lending team at its main location in Mt. Sterling. She has been with Traditional Bank since 2013.
Traditional Bank is excited to announce Cash Management Director Sarah Jefferson was promoted to Vice President. Jefferson has 14 years banking experience and has been with the bank since 2006.
TO ANNOUNCE A PROMOTION: EMAIL PHOTOS & ANNOUNCEMENT TO jfischer@kybanks.com A promotion announcement in KENTUCKY BANKERS ON THE MOVE consists of: banker name, bank name, branch, new position, previous position, college and hometown. Submissions are published based on space and editorial approval. Celebrating 125 Years
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Shawn Woolum
Steve Brunson
Traditional Bank is excited to announce Commercial Loan Officer Shawn Woolum was promoted to Vice President. Woolum has 14 years banking experience and oversees the Zandale Banking Center. He has been with Traditional Bank since 2014.
Governor Matt Bevin appointed Steve Brunson to the Kentucky Housing Corporation Board of Directors. Brunson is a Senior Vice President of Business Development for Forcht Bank in Northern Kentucky.
Suzanne Farmer-Clarke
Terry Spears
Suzanne Farmer-Clarke joined the Bank of Columbia Board of Directors on April 13, 2016. She is the daughter of Vice-Chairman F. Preston Farmer. She has practiced law in Kentucky and New Jersey. She is a graduate from the University of Kentucky, attended Thomas M. Cooley Law School and Temple University-James E. Beasley School of Law.
Community Trust Bank, Inc. is pleased to announce that Terry L. Spears has been promoted to Vice President and Small Business Banking Officer of Community Trust Bank. Spears has been with Community Trust Bank for eight years, and is responsible for managing Community Trust Bank’s Small Business Administration (SBA) loan programs.
Thomas McCoy
Tim Schuler
Community Trust Bank, Inc., is pleased to announce that Thomas McCoy has been promoted to Senior Vice President and Manager Application Systems of Community Trust Bank. Mr. McCoy has been with Community Trust Bank for more than 24 years, and is responsible for managing IT projects and supporting daily activities.
Traditional Bank is excited to announce Vice President Commercial Loan Officer Tim Schuler was promoted to Senior Vice President. Schuler has 33 years of banking experience. He is a senior member of the commercial lending team at the bank’s Palumbo location. He has been with Traditional Bank since 2011.
Daniel Patton Named Employee of the Quarter MURRAY, Ky. — The Murray Bank President and CEO, Bob Hargrove, presented Daniel Patton with the Employee of the Quarter award at the Bank’s recent employee meeting. Patton currently works as a Full-Time Teller at The Murray Bank. The Employee of the Quarter award is decided by the vote of fellow employees. “I have made so many strong relationships in my short time here at the bank, that it was an honor to be selected for this award,” said Patton. “The feeling I get knowing I get to come to work each day with co-workers that feel like family, all while serving the best customers in Murray and Calloway County, is amazing!” In addition to his strong work ethic and ongoing support of the Bank’s mission, he was recognized for his outstanding performance in all aspects of his job.
“Daniel is a pleasure to work with because he is the ultimate team player,” said Hargrove. “We appreciate the commitment and dedication he demonstrates to our customers, our bank and the community we serve.” Patton has worked at The Murray Bank for 2 years, starting in 2014.
Bowling Green Chamber Names Vitale as Athena Winner BOWLING GREEN, Ky. — The Bowling Green Area Chamber of Commerce has recognized Shannon Vitale, a Hilliard Lyons Financial Consultant and Assistant Branch Manager, as the 31st recipient of the ATHENA Award. Vitale was a founder of the Women’s Fund of South Central Kentucky, an initiative that has given more than $230,000 to
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organizations that make a positive impact on the lives of women and children in south central Kentucky. “We believe Shannon portrays every quality of a true ATHENA, and we are so proud she is such a significant part of the Bowling Green community,” chamber Chairman Mark Iverson said.
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Gibson and Simpson Named to Presidential Posts DANVILLE, Ky. — As part of succession planning, Farmers National Bank recently named Marty Gibson as President of the bank and David Simpson as President of WealthSouth, its trust and wealth management arm. Greg Caudill will remain as Chief Executive Officer and Gibson and Simpson will continue to report to him.
and the Graduate School of Banking at Louisiana State University.
David Simpson joined Farmers National Bank in 2011 managing the brokerage, insurance and trust units. Since that time, he initiated the building of WealthSouth. He has worked in the financial services industry for over 40 years. Simpson is a graduate of the Univer“One of the hallmarks of a successful company sity of Kentucky and the Graduate School of is the ability to recognize quality talent,” Cau- Banking at LSU. dill said. “In Marty and David, we are pleased that such talent already resided within the or- Greg Caudill joined the bank in 1981 and beganization. They both have great leadership came President and CEO in 2002 while preabilities which they demonstrate on a daily viously serving as Head of Lending. He is a basis and they will continue to play vital roles graduate of the University of Kentucky and in the bank’s tradition of helping its customers the Graduate School of Banking at LSU. and communities.” Farmers National Bank, a community owned Marty Gibson joined Farmers National Bank bank since 1879, has banking facilities in in 1999 and served as Head of Lending since Danville, Burgin, Harrodsburg, Junction City, 2009. He is a graduate of Georgetown College Lancaster, Perryville and Stanford.
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Marty Gibson
David Simpson
Greg Caudill
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Heritage Bank Named Among Best Places to Work in Kentucky for Six Consecutive Years HOPKINSVILLE, Ky. – Heritage Bank has been named to Kentucky’s Best Places to Work among mid-sized companies for six consecutive years. The Kentucky Chamber of Commerce and the Kentucky Society for Human Resources Management (KYSHRM) sponsor the list each year. Winners from across the state are selected in three categories: small companies of 15-149 employees, medium companies of 150-199 employees, and large businesses consisting or more than 500 employees. The selection progress is managed by Best Companies Group and is based on an assessment of the company’s employee policies and procedures and the results of an internal employee survey. The competition is a multi-year initiative designed to motivate companies in the Commonwealth to focus, measure and move their workplace environments toward excellence. “We are not only good bankers,” said John Peck, CEO of Heritage Bank, “we are also good neighbors. That means our outstanding management and staff, at all our Heritage Bank locations, put their best self into everything they do. They commit to representing Heritage Bank with the ultimate in professionalism, and they are the kind of people we all want to encounter in our day—people who are truly conscientious about their co-workers and their customers. That’s what makes a great team, and that’s no doubt why
Heritage Bank has once again been recognized state-wide for being a great place to work.” “Heritage Bank provides such a supportive environment for its staff,” said Angela Mayes, Vice President of Human Resources. “This is such an honor for each of us and for our bank to receive this honor again for a sixth time. It doesn’t surprise those of us who work for the bank, since we know what a terrific place this is to be every day. And, it’s also about our customers. We work with great people and we have great customers who make our work very satisfying. That means a lot.” HopFed Bancorp, Inc. is the holding company of Heritage Bank headquartered in Hopkinsville, Kentucky. The Bank has eighteen offices in western Kentucky and middle Tennessee and a loan production office in Nashville, Tennessee. The Company has two additional operating divisions including Heritage Wealth Management of Murray, Kentucky, Hopkinsville, Kentucky, Kingston Springs, Tennessee and Clarksville, Tennessee, and Heritage Bank Mortgage Services of Clarksville, Tennessee. The Bank offers a broad line of banking and financial products and services with the personalized focus of a community banking organization. For more information about Heritage Bank and HopFed Bancorp, Inc., visit www.bankwithheritage.com.
THE BANKERS’ VOICE What our Bankers say about our Products & Services “As an owner bank in Title Center of Greater Kentucky we have been able to mitigate risk in our real estate loan portfolio through the title insurance coverage benefit. We have also realized significant non-interest fee income through quarterly dividend distributions. The dividend income along with the coverage benefit has been a boost for our bank. The title agency has been a great fit for us! All KBA members should take advantage of becoming an owner in the title insurance program.” Greg A. Wilson, President/CEO First Commonwealth Bank, Prestonsburg To learn more contact Selina Parrish at the KBA 502-736-1282 or sparrish@kybanks.com 18 KENTUCKY BANKER | JUNE 2016
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THE BANKERS’ VOICE
What our Bankers say about our Products & Services
“When we became an owner in Kentucky Title Center, we initially met with some resistance, but not really as much as we had anticipated. It helped because of the very long term relationship between our bank and our bank’s counsel. He understood the bank’s need for fee income and that it would be helpful in the long term success of the bank, which in turn meant a long and profitable relationship for him as well. I guess the best advice that I could give anyone is ‘just do it.’ I know that every community is different, but I know that we just decided to do it because it was best for the bank and our shareholders. “ Garry W. Smith, Chief Lending Officer/EVP Community Financial Services Bank To learn more contact Selina Parrish 502-736-1282 or sparrish@kybanks.com Celebrating 125 Years
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Reflections of an Emerging Leader
“I believe in the KBA’s Emerging Leaders program, because I believe in Community Banking.” by Audrey Lillpop AVP Branch Administration First Security Bank
you provide me some banks and contacts that use your products?” Everyone is very accommodating to share their perspective about vendors.
What an awesome experience this past year has been as a member of the Kentucky Bankers Association’s Emerging Leaders program. I wanted to further my banking career and fortunately my company, First Security Bank, believed the investment in the Emerging Leaders program would benefit us both. In fact, my CEO wrote a nomination letter that was very humbling to read as I submitted my nomination packet. The program helped me grow professionally as a banker, and the resources and connections made are invaluable. I strongly encourage leadership teams to identify and support their emerging leaders with this opportunity. There are many tangible things the Emerging Leaders program provides the candidate and the bank. Contacts I now have eight new banking colleagues from across the state with whom I can call upon to bounce ideas and share similar experiences. We all hold a variety of positions and come from banks of various sizes. It is empowering to be able to call, email, or text another Emerging Leader and ask them about a specific process, product, or solution. After spending a year getting to know each other, we have confidence in one another to share our experiences. Resources The KBA is a great resource for everything we do each day. I talk with my contacts at the KBA (thanks Natalie, Paula, and Selina) for a variety of issues such as legal expertise, training opportunities, and vendor solutions. They work hard to provide solutions that often save a significant amount of time and effort. Vendor Relationships I was fortunate to be able to attend both the spring conference in Lexington, KY, and the annual convention in Hilton Head, S.C. Not only was I able to network with vendors providing a variety of banking solutions, I also was able to discuss potential vendor relationships with other banking leaders. The first question we always ask vendors is “Will 22 KENTUCKY BANKER | JUNE 2016
Training A variety of topical and timely training courses gave me the chance to become more engaged with the KBA and the services they provide. I was able to travel the state to learn more about cyber security threats, industry trends, and regulatory updates. The training tools and resources the KBA provides are excellent—from Webex training to hands on learning experiences—the educational resources are assets to Banks across Kentucky. As an Emerging Leader, we have received some of these courses for a discounted rate as well. Advocacy for the Industry The upcoming trip to Washington D.C. will provide the ability to speak directly with government officials about banking issues being discussed at both the State and National levels. This is important to me because at 34 years old, I still have a lot of career ahead of me. Legislation in Frankfort and Washington, D.C., affect me, my family, my work family, my customers, and my employer—both today and in the future. It is vital to remain educated and informed so we can work together as a team of bankers who best represent our industry to legislators. Value Last but not least, Value. As an employee of First Security Bank, having my company invest in me to be a better banker makes me feel valued and important. That in turn encourages me to do my best to find solutions to problems and help us grow. What a great feeling! I believe in the KBA’s Emerging Leaders program, because I believe in Community Banking. By finding and investing in our Emerging Leaders at our banks, we help build a bright future for banking. We are excited to be the future of banking.
NEXT ISSUE: Meet the KBA’s new Emerging Leaders!
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Brought to you by KBA Insurance Solutions Below is another article on the blazing hot topic of Corporate Account Takeover. It also mentions a new insurance product available to banks to help protect their customers. As always, if you have any questions, just give me a call or shoot me an email. Chuck Maggard, President & CEO KBA Insurance Solutions 502-736-2671 | cmaggard@kybanks.com
Corporate Account Takeover
How to Help Protect Your Bank & Its Customers Is your bank fully protected from corporate account takeovers? As banks look to attract and retain commercial banking customers, they should keep in mind that customers want to make sure their funds are protected from cyber thieves. What steps should a bank consider taking to ensure it is protected if a commercial customer’s computer network is compromised, resulting in a “Corporate Account Takeover”? This is especially important for banks that enter into a cash management agreement with a commercial customer that allows the customer to conduct online ACH and wire transfers. This article explores some steps a bank should consider in order to address this exposure in the evolving world of cybercrime.
from the fraudulent EFT or wire transfer. In light of recent court decisions defining commercially reasonable security procedures, a bank has more guidance on what steps it must take to prevent unauthorized corporate account takeovers. In Choice Escrow and Land Title, LLC v. BancorpSouth Bank, 754 F.3d 611 (8th Cir. 2014), the court held that a bank’s security procedures were commercially reasonable and that a real estate escrow service company (“Choice”) was responsible for the loss of funds when an unknown third party accessed their online bank account and instructed BancorpSouth Bank (“BancorpSouth”) to wire funds from Choice’s account to a bank in the Republic of Cypress. The unknown third party had accessed a Choice employee’s username and password What are commercially reasonable security procedures? through a computer virus. Choice subsequently sued BanArticle 4A of the Uniform Commercial Code (UCC) es- corpSouth for the lost funds. tablishes the rights and liabilities of banks and their com- In determining whether BancorpSouth’s security mercial customers with respect to electronic funds trans- procedures were commercially reasonable, the court confers (EFTs). Unlike the Electronic Funds Transfer Act (also sidered the following: 1) the wishes of the customer exknown as Regulation E), which protects a retail customer pressed to the bank; 2) the circumstances of the customer under certain circumstances, Article 4A does not provide known to the bank, including the size, type and frequency similar protections for commercial customers. of payment orders normally issued by the customer to the Under Article 4A, the bank assumes the risk when bank; 3) alternative security procedures offered to the cusa third party steals a commercial customer’s identity and tomer; and 4) security procedures in general use by cusissues a fraudulent payment order to the bank. However, tomers and receiving banks similarly situated. a bank may shift the liability to the commercial customer if the bank and its customer agree to implement a security “The commercial reasonableness standard is designed procedure designed to protect themselves against fraud and to encourage banks to institute reasonable safeguards the following apply: against fraud but not to make them insurers against • The security procedure is a “commercially reasonable” fraud. Thus, the standard is not whether the security method of providing security against unauthorized payprocedure is the best available. Rather, it is whether the ment orders. procedure is reasonable for the particular customer and • The bank proves that it accepted the payment order in the particular bank, which is a lower standard.” Choice good faith. • The bank was in compliance with the agreed upon secu- Regarding “security procedures in general use by customers rity procedure. and receiving banks similarly situated,” it’s advisable for a Therefore, under Article 4A, a bank can protect itself from bank to gauge their security procedures with those of its liability and the commercial customer will incur the loss peers. In addition, the Federal Financial Institutions Examcontinued on next page 24 KENTUCKY BANKER | JUNE
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ination Council advises that banks should “adjust, as appropriate, their information security programs in light of any relevant changes in technology, the sensitivity of its customer information, and internal or external threats to information.” Security procedures for a bank that process relatively low-limit wire transfers on an infrequent basis may not be applicable for a bank that processes larger-limit wire transfers more frequently. As the court in Choice states, “one size does not fit all,” and “the concept of what is commercially reasonable in each case is flexible.” The court in Chelan County Washington vs. Bank of America Corporation, (2:14-cv-00044), Washington Eastern District Court, addressed the issue of flexibility. The court held that “commercial reasonableness is a ‘flexible’ concept that requires a court to determine ‘whether the procedure is reasonable for the particular customer and the particular bank.’ The standard is not whether the security procedure is the best available,” and a particular security procedure is not unreasonable “simply because another procedure might have been better.” Id. However, a “security procedure that fails to meet prevailing standards of good banking practice applicable to the particular bank should not be held to be commercially reasonable.” Id. Educating your staff and commercial customers about corporate account takeovers. The court in Patco Construction Company v. People’s United Bank, 684 4.3d 197 (1st Cir. 2012) held that questions of fact still existed as to whether the bank’s security procedures were commercially reasonable. In Patco, the bank’s security system had flagged the transaction in question as “high risk,” but the bank did not monitor, nor did the bank provide the commercial customer notice before completing the transaction. Even though the bank’s security system may have been commercially reasonable by identifying the unusual transaction, educating the bank’s staff on security procedures is equally important for a bank to avoid liability. Educating a bank’s customers is also critical in combating unauthorized transfers. Banks need to educate their customers about security protocol. Most commercial bank customers do not feel that their bank communicates “best practices” to protect themselves from a computer network breach. Moreover, most banks do not always clearly communicate the steps a commercial customer should take to address instances of fraud. Regular email communications to a bank’s commercial customers is an effective way to educate the customer on the latest cyber perils and remind Celebrating 125 Years
them of “best practices” on the anniversary date of the cash management account agreement. Insurance protection for banks even if they have commercially reasonable security measures. Up until recently, banks did not have an insurance solution to cover breaches that occur outside of their own computer systems. The assumption that Corporate Account Takeover is covered under the Financial Institution Bond is incorrect and has resulted in many disputes between insurance companies and their bank clients. Keep in mind that not all Financial Institution Bonds are created equal. Some bonds will provide coverage if the bank is legally liable under Section 4A of the UCC, some carriers’ bonds will specifically exclude it and, in older bonds, the language is unclear. One of our carriers, AmTrust Financial Services, has a simple solution to the address this dilemma. Their Financial Institution Bond provides protection if the bank is legally liable to pay the loss, as stipulated under the Section 4A of the UCC. However, if it is determined that the commercial account customer is legally liable, their new EFT Guard will respond. EFT Guard protects a bank’s commercial banking customers for losses stemming from Corporate Account Takeover, including fraudulent ACH and wire transfers perpetrated through their own system and outside of the care, custody and control of the bank. This coverage can help the bank to educate its customers about the need to secure their own systems and the importance of following agreed upon security measures. EFT Guard should minimize disputes (and ultimately costly litigation between the bank and its customer) by providing coverage to reimburse the customer for the loss). The policy is written with the bank as the master policyholder. The insured is defined as “a commercial customer of the bank at the time of an unauthorized electronic funds transfer that is authorized to transact online wire and ACH transfers pursuant to a written agreement with the bank”. The policy is subject to a “per account limit” and deductible, subject to a policy aggregate limit of liability. Summary Whether it’s incorporating the latest technology to be commercially reasonable, educating customers on the cyber perils that exist in today’s world or purchasing insurance, a bank should frequently evaluate how they protect themselves from corporate account takeovers. A well rounded approach can help a commercial customer mitigate loss, minimize disputes as well as preserving and retaining important customer relationships.
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Ballard Cassady: Three Decades of Service
to also be efficient. We all know that it is first, middle and last about our bankers; nothing else matters. What are some of the significant changes you have seen in the industry?
Ballard: The regulatory atmosphere has to be the most dramatic change in my fifty years in the industry. When I was in banking the regulators and the bankers worked together to insure that the bank was running in a safe and sound manner. They were sort of like partners; they both wanted the same outcome and that was a safe and sound bank. When I became Commissioner that was the emphasis of Senn, general counsel for the KBA at the time, and Senator our efforts. We would spend a ton of our time talking to Wendell Ford passed it on the Senate floor in Washington bankers about issues before, during, and after an exam just with the help of my counterparts around the country. That to make sure that the end result was what everyone wanted, led to its eventual inclusion in the Interstate branching bill a strong well run institution. that passed in the early 90’s. Those days are long gone now. Now the exams are more The second was our law suit to allow banks to own insur- about compliance to badly designed rules skewed to a narance agencies. Through our ownership of an insurance row view of consumer protection. Ironically, the consumer agency we were able to get “standing” to sue the insurance is the one getting hurt most by impractical rules crafted by commissioner to win that right for banks. Because we were people who have never had to meet a payroll or to be rethe only federal court district to get that done, we created sponsible for a business that wasn’t government subsidized. a conflict on the national level that got the issue before the They don’t understand the pressures and nuances of busiSupreme Court of the United States. The ABA joined us in ness, and they certainly don’t understand what consumers the suit, and we replaced Citizens National Bank vs. KY In- want or need. surance Commissioner with the Barnett case out of Florida and won at the Supreme Court level. That case is the reason The result is banking has become commoditized, and conbanks all over the country can now own insurance agencies sumers are getting shut out of credit. The latest CFPB guideline on small lending is the perfect example. It sends 50 miland it all started right here at the KBA. lion borrowers into the shadows for loans. That’s just plain What about the rest of the staff at the KBA you have had stupid. over the years. How have they helped our members and What is the biggest change you have seen in politics since their interests? you first came to the KBA? Ballard: We had a staff of five people when I got here. Today, we’re a staff of 22 FTE’s and 2 contract personnel – that Ballard: The biggest change is the environment in which is still a lean staff in the face of all that we do. Our per- the policies that govern us are made. For years, I lamentsonnel costs are higher as well, naturally, but these people ed the way government kicked the proverbial can down the have all been a part of building the KBA into what it is to- road on big problems that needed tough solutions. Today, day. At the risk of sounding arrogant, I think we’re the envy either the can has disappeared, or maybe we’ve run out of of nearly every other banking association in the country, road. We can’t even agree on what the problems are, much not just for our revenue but for the talent on this staff. We less the solutions – even within a political party. Essential hope, though, that our bankers are experiencing not just tools of governance like consensus and compromise are a those skills but also a lot of empathy. Banking has been un- fading memory. der assault for the last eight years, and our staff sees that…. feels that. They want to help solve the problem whenever a At the same time, it has gotten harder and harder to find banker calls us under stress. If our bankers aren’t happy, we candidates for political office that are up to the job – and can’t be happy. We’ve got a really strong mix of talents and I’m talking about both parties. Most Americans perceive skills right now, but we keep our staff at levels that force us those we elect to have no higher priority than re-election. continued on next page
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If they’re spending 50% of their time trying to keep their Our bankers spoke truth to power, with courage that rejobs, that’s 50% too much. Our problems have grown to a flects our desperation. They were saying the things I say regularly, but that regularity has diluted the impact of it. size that needs 100% of their time and attention. There was a different kind of response when our bankers And I think they’ll require the kind of wisdom that had literally raised their voices with such compelling intensity. Churchill saying, “The farther back you look the farther We all remember a time when the most effectual mode of forward you can see.” More and more, history is just some- dealings with government was measured and cautious – or thing else to disagree about. But looking back – past the era maybe it wasn’t that effectual, because we ended up here. in which political correctness has ruled – you can’t help but But that time is past. With our survival as an industry on see fundamentals that cannot be ignored without paying a the line, every banker has to be finding ways of convincing high price. Whatever else you can say about history, it isn’t members of Congress that, if they want to keep their jobs, they must allow us to do ours again. For hundreds of years, kind to those who ignore it. we’ve funded opportunity for individuals, families, businesses large and small – creating prosperity by enabling the creation of jobs. We know how to do that with safety and soundness. Now, we have to demand the right to do that. Any chance of being heard will take all our voices. What is your message to Kentucky bankers?
Kentucky’s current governor is looking like the exception as he takes on Kentucky’s pension system, the worst in the U.S. He’s put his approval ratings and re-election prospects on the line to solve a big problem, a solution that will necessarily involve some pain. If he pulls it off, it will be interesting to see if we reward or punish him for it. We’d better hope he does, because the financial problems we’re facing don’t fix themselves. But, there are those in Frankfort who don’t want him to succeed because it wouldn’t bode well for their reelection if he does. We run a very real risk of waking up one day to find our bond rating has slipped off the face of the earth because nobody wants our bonds anymore, to find that we can’t pay teachers or firemen or policemen. Those are very real concerns and you don’t have to be a genius to figure it out.
Ballard: Never miss an opportunity to talk to a legislator, especially Congressional members, because they don’t hear enough about the effects of our over-regulation. Without a clear sense of what their constituents need they will be more attuned to what their party leadership needs, and that’s true of either party. That’s how we got here. We actually had one of our Congressmen say that we needed to get over him supporting Credit Unions intrusion into commercial lending with his sponsorship of their bill. As an industry, we can’t put up with that kind of indifference! Once we’ve done our part in making clear what our representatives must do to represent us, we’ve got to hold them accountable for doing theirs. Those who continue to ignore the fundamental needs of our industry and our customers need to lose their jobs if we’re ever to get a chance to do ours again. How do we end on a happier note?
Ballard: Our members have all the tools they need to be successful. The only thing that stands in their way is govWhat can Kentucky bankers do to help with these issues in ernment over-regulation. It’s been said – some say by Churchill as he worked desperately to persuade the U.S. to help Frankfort and Washington? defeat Nazi Germany, “I’m confident the United States will Ballard: Plenty – and Kentucky needs them more today than do the right thing, after they have done all the wrong ones.” it ever has before. I took a group of bankers to Washington Where banking is concerned, we’ll surely run out of wrong recently, and it was the most effective trip we have ever had decisions in Washington someday soon. That’s the best I in terms of interaction between our bankers, members of can hope for. Congress, and the regulatory agencies. We moved beyond telling them, “This is what you’re doing to my bank.” We clarified that with, “This is what you’re doing to my customers with your overbearing regulations – this is what you’re Ballard Cassady, KBA CEO doing to my community.” bcassady@kybanks.com Celebrating 125 Years
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Bert Ely’s FARM CREDIT WATCH
Washington Post article pulls back curtain on the FCS
by Bert Ely, American Bankers Association
How the FCS (read CoBank) tried to spin the Post article
On April 11, The Washington Post ran a long (1,226 words) and very critical article* on the FCS that was neatly summarized in its headline: Critics say Farm Credit System needs to be reined in. Here is the link to the article: The article clearly reflects the tone of the December 2 hearing the House Agriculture Committee held on the FCS where many committee members asked tough questions and expressed criticisms of the FCS and especially of CoBank. That such an article appeared in the Washington Post is especially important in the FCS debate because the Post is so widely read inside the Washington Beltway, and especially by members of Congress and their staffs. Defenders trotted out their usual defenses of the FCS, such as justifying CoBank loans to Verizon and Frontier Communications because they “provide landline voice service, Internet and wireless access and other services to rural areas.”
A week after the Post article appeared, the Farm Credit Council posted on its blog, called The Aggregator, a post headlined “Washington Post Highlights Farm Credit’s Mission and Strength.” Here is the link to the blog post: Click Here Selectively quoting from the Post article, the author, Karen Macdonald, completely mischaracterized the article, focusing on Bob Engel’s quote that “it is unfortunate that trade associations for the banking industry often ignore the extremely positive and long-standing working relationship that [FCS] has with commercial banks when they are lobbying Congress or communicating with their members.” It is, of course, the rare community banker who speaks positively about the FCS. Interestingly, the blog post did not indicate Macdonald’s affiliation. Quite possibly, she is the same Karen Macdonald who lives in the Denver area, where CoBank is headquartered, and who, according to her LinkedIn entry, was once a “marketing communications manager” at CoBank. Does CoBank have any allies within the FCS?
Other FCS lending abuses cited by the Post article, all of which were highlighted at the House Ag Committee hearing, included the Cracker Barrel loan and loans to finance a carwash, a vacation home on the Gulf Coast, and an exotic hobby farm. The article ended with the story of an FCS loan, first reported in the FCW, to finance a television producer’s purchase of a 6,500-square-foot home on 55 acres in the Black Hills of South Dakota. That loan soon went into foreclosure. One interesting aspect of the Post article was the narrowness of the FCS’s defenders quoted in the article – just Bob Engel, CoBank’s CEO, and Todd Van Hoose, CEO of the Farm Credit Council, the FCS trade association. Until recently, Van Hoose was in charge of government affairs for CoBank. It is almost as if CoBank is the FCS. While many other FCS institutions have abused the FCS lending authorities, it appears that CoBank’s abuses, and especially its loans to investor-owned utilities, have drawn unfavorable attention to the entire FCS. One can reasonably wonder what divisions CoBank is creating within the FCS.
CoBank angers investors by redeeming debt CoBank can’t seem to help itself in angering its various constituencies, including the investment community, which buys FCS debt. CoBank’s latest misstep stems from revisions in FCS capital requirements the Farm Credit Administration (FCA), the FCS regulator, recently announced. The new capital regulations are intended to more closely align by 2017 FCS capital requirements with the capital requirements for commercial banks. Under the new capital rules, CoBank’s subordinated debt will no longer qualify as capital for leverage capital purposes. CoBank asserted in a March 11 news release that because the FCA’s announcement of its new capital requirements made Cobank’s subordinated debt redeemable, CoBank would therefore redeem $405 million of 7.875% subordinated notes. In today’s lowrate environment, those notes had been trading at 112.5 cents on the dollar. Investors in those notes understandably continued on the next page
*https://www.washingtonpost.com/business/capitalbusiness/critics-says-farm-credit-system-needs-to-be-reined-in/2016/04/11/b3ce0dd2-fb6a-11e5-9140-e61d062438bb_story.html 28 KENTUCKY BANKER | JUNE 2016
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howled, and complained to the FCA.
Rating Outlook of the FCS are directly linked to the U.S. Sovereign rating.” This linkage, of course, is why FCS debt According to one news report, investors are concerned trades so tightly to the Treasury yield curve, which in turn that if CoBank is successful in redeeming its subordinat- gives the FCS one of its key funding advantages over banks ed notes, AgriBank FCB, another of the four FCS banks, and other private-sector lenders – a very low cost of funds. will seek to retire $498 million of subordinated notes due in Fitch also “affirmed the long-term and short-term IDRs of 2019. Those notes, which yield 9.125%, trade at a 20% pre- [the four FCS banks] as AA-/F1+. The Rating Outlook is mium over book value. Farm Credit Bank of Texas and Ag- Stable.” Fitch went on to note that “the affirmation of the Star Financial Services, the fourth-largest FCS association, [FCS banks’] IDRs reflect their prudent, conservative credit have smaller amounts of high-yielding subordinated debt culture, their unique funding advantage and their structuroutstanding they will probably try to redeem, too. A news al second-loss position on the majority of their loan portfoarticle about these forthcoming redemptions reported that lio.” [emphasis supplied] “some creditors who stand to lose money have threatened never to buy another CoBank or [FCS] bond again.” That is The FCS banks jointly own the Federal Farm Credit Banks unlikely, though, given the high creditworthiness of senior Funding Corporation, which issues and markets the FCS’s FCS debt due to its implicit federal backing – see the next Systemwide Debt Securities which Fitch rated AAA. The article. It will be interesting to see if any bondholders sue to FCS banks use those borrowings to fund both loans they block the CoBank redemption. hold on their own books as well to fund their loans to the 74 FCS associations who in turn relend those funds to farmers, Fitch affirms FCS and FCS Banks’ high credit ratings ranchers, and others, in direct competition with banks and other private-sector lenders. Consequently, FCS associaFitch Ratings, one of the three major credit rating agencies, tions can charge lower lending rates because of the FCS’s recently reaffirmed the FCS’s “long-term Issuer Default AAA rating. Because the FCS banks are jointly-and-severRating (IDR) and short-term IDR at AAA/F1+ respective- ally liable for debt the Funding Corporation sells to invesly. The Rating Outlook is Stable.” The other two major tors, the FCS can therefore be properly viewed as one giant, rating agencies – Moody’s and S&P – also maintain com- highly interconnected financial institution. As the Washparable ratings on FCS debt. Fitch noted that “as a gov- ington Post reported, “If [the FCS] were a single bank, it ernment-sponsored entity (GSE), the FCS benefits from would be the ninth largest financial institution – measured implicit government support. Therefore, the ratings and by assets – in the United States.”
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2016 Session in Summary by Debra Stamper, dstamper@kybanks.com KBA Executive Vice President and Gneral Counsel
SB 120 - Provides that the standard of conduct for bank directors is the same as general corporate directors, when We would like to take a minute to express our appreciation overseeing the operation of the bank in a safe and sound for the assistance of our Member banks, their employees, manner. KRS sections impacted: 286.3-065. Bank Counsel members, LRC staff and, of course, the Legislators for making this Session a success on Action Necessary: Education. many levels. The success of each legislative The success of each session is measured both on the bills that legislative session is SB 122 – Recording Statutes. Extends the efpass and, sometimes more importantly, of measured both on the fective period of an initial title lien from sevthose that did not. en to ten years (manufactured homes are still bills that pass and, 30 years), or until discharged. Reduces the efsometimes more This year more than 1500 bills and resolufective period of each successive continuation importantly, of those tions were introduced. 153 bills passed. Sevstatement from seven to five years. Removes that did not. en bills were vetoed and three bills had line the word “next” from the required inclusion item vetoes. of “immediate source” of title in deeds and mortgages. Requires the grantee to file a deed issued pursuItems that impact the banking industry, directly or indirect- ant to a master commissioner sale within 5 days of receipt. ly, are here summarized, with the Action Necessary, as well Clarifies that affidavits of amendment on mortgages may as a concise list of all other legislation. Each bill, unless it not be used to change the name of the parties or collateral, contains an emergency clause, will go into effect 90 days but may be used to correct typographical errors. KRS secfrom the end of session. If you need more information on tions impacted: 186A.190, 382.110, 382.290, 382.297. any of these bills, please email me. Action necessary: Amend procedures on each provision. SB 74 – Security Interests. Allows for termination statements on titled motor SB 179 – ABLE Accounts. Provides REGULAR SESSION vehicles to be submitted between clerk’s that a person’s funds held in an ABLE BY THE NUMBERS offices by fax or by other electron means account, established in accordance More than bills acceptable to both clerks and provides for with Federal law, will not be consid& resolutions introduced proper verification by the receiving clerk. ered when determining eligibility for KRS sections impacted: 186.045. bills passed public assistance. Does not expressly provide for such accounts to be set up bills vetoed Action Necessary: Amend update proin Kentucky. KRS sections impacted: bills w/ line item vetoes cedures to provide for filing such termi205.200. nation statements in closer clerk’s office, when appropriate. Action necessary: Advise customers, as appropriate.
2016
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1500 153
SB 118 – Money Transmitters. Exempts service providers, which are “providing” money transmitter services, from registration if those services are being made solely on behalf of banks. KRS sections impacted: 286.11-007. Action Necessary: Advise service providers, as it is appropriate.
SB 186 – Boat Liens. Requires a boat owner to provide the original or a copy of proof of ownership to a marina owner for periods of contracted mooring longer than 24 hours, and requires the marina to retain the same for the duration of the mooring. Establishes notification requirements for the enforcement of a possessory lien on a boat, including notice to the owner, secured parties and through publicacontinued on the next page
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tion. Clarifies sales procedures following judgment in favor maintain a system of delivering electronic notice of final orof a marina. KRS sections impacted: KRS 235.230 and new ders to lienholders of final orders, no less than monthly nor more frequently than weekly. The local government must section of Chapter 376. also post such orders on its website. A lienholder has 45 days from such notice to correct the violation or pay fees Action Necessary: Amend procedures. and fines. If the local government fails to provide the notice SB 214 – Notary Public. Removes fee limits on notary ser- or if the lienholder correct the violation/pays the fines, the vices to the general public and prohibits any fee for mem- government’s ten year lien does not take priority over the bers of the National Guard, Reserve, Army, Navy, Air Force, lienholder. This system must allow for electronic delivery of Marines, and Coast Guard or their dependents. KRS sec- all final orders to requesting. KRS sections impacted: Chapter 65. tions impacted: 64.300. Action Necessary: Amend fees and procedures, to ensure proper documentation. SB 230 – Blighted and Deteriorated Properties. Allows local government to establish a process to certify properties as blighted and deteriorated in order to exercise eminent domain on a parcel and exempts such properties from tax delinquency certificate purchase. KRS sections impacted: 99.700, 99.705, 99.715, 99.720, 99.730, 99.700 to 99.730, 416.540, 416.580, 416.610, 416.660, 134.128, 134.504, 91.285, 92.305, 416.550, 416.600, 416.630, 416.640, and 416.650. Action Necessary: Amend procedures to review notices. HB 352 – Security Interests in Motor Vehicles. Specifies that notation of a security interest on titled property is made by entry of the required information into the Automated Vehicle Information System. Extends the filing period for attaining a perfected security instrument to 30 days. KRS sections impacted: 186A.190, 186A.195. Action necessary: Amend procedures for perfection of security interests. HB 382 – Transfer of Motor Vehicles. Provides that ownership and liability is transferred from a dealer to a purchaser when all necessary legal documents are provided and proof of insurance is received from the purchaser. KRS sections impacted: 186A.220. Action Necessary: Education. HB 422 – Local Code Enforcement. Unifies the various methods by which local governments may enforce code violations into one chapter. Allows enforcement officers to provide lienholders with notice of issuance of citations and of hearings. Requires the local government to develop and Celebrating 125 Years
Action Necessary: Amend procedures. Other Enacted Bills SB4-Informed consent to medical procedure SB11-Alcohol licensing SB16-Rescuing children from vehicles SB17-Physician CLE SB18-Notices of material changes in medical insurance SB19-State Board of Medical Licensure SB20-Medicaid MCO appeals SB33-CPR training in schools SB40-Pilot project on juvenile hearings SB43-Survivor benefit for emergency service personnel SB46-Local government pension plans SB54-Donation drop off sites SB56-Driving under the influence look-back SB58-Automobile service contracts SB60-Crimes against vulnerable victims SB63-Sexual assault SB64-PVA reasonable fees SB84-Cars stopped on highway SB90-Cell towers SB97-Mortgage loan company admin SB103-Funeral designations SB113-Legislative Retirement Plan SB114-Medical authorizations SB117-Pharmacy benefit management SB128-Women Veterans Program SB129-Administrative regulation procedures SB134-Biological products SB140-Distance learning SB141-Municipal utilities boards SB154-Physician assistants SB155-Independent Living Counsel SB167-Disposition of city property SB168-Municipal audits SB169-Election procedures SB170-Transportation of steel products SB174-Prudent parent standard in child care services
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Other Enacted Bills continued
SB178-Welcome Home Vietnam Veterans Day SB182-Grain storage SB185-Advisory Council on Autism Spectrum Disorders SB188-Stratigraphic test standards SB191-State Fair Board SB193-Amino Acid based formulas SB195-Lump sum death benefit for firefighters SB203-Beneficiary benefits for death in the line of duty SB206-Reemployment of retired police SB209-Kentucky Retirement Systems SB211-ALS Awareness Day SB216-Marriage licenses SB217-Military justice SB225-Homelessness prevention efforts SB228-Bullying in schools SB238-Child support SB242-Veterinary services SB249-Fire department reporting standards SB256-Military basic training for students SB269-Hair braiding SB293-Reorganization SB296-Governor’s School of Entrepreneurs SCR9-Breastfeeding SCR135-KET HB4-Synthetic drug crimes HB10-Appropriations bill HB15-Council on Postsecondary Education HB16-Technical change to county clerk’s office HB38-Zipline standards HB40 Expungement of criminal records HB52-Coal severance and state trooper compensation HB55-Hotel room tax HB80-Limited funding of certain school district debt HB83-Tobacco products HB87-Military basic training for students HB95-Telehealth services HB100-Autism coverage HB106-Chemical munitions disposal HB111-Child abuse hotline notice HB115-Colon Cancer screening HB124-Law enforcement procurements HB129-Appropriations HB132-Jail operations HB148-Daycare HB149-Peace officer overtime HB150-Unemployment benefits HB153-Kentucky Retirement Systems HB158-KEES money HB162-Harrassing communications HB175-Peace officers HB183-Disabled-veteran owned businesses HB184-School councils HB187-Petroleum storage tanks 32 KENTUCKY BANKER | JUNE
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HB189-Interlocal agreements HB204-Law enforcement qualifications HB208-Prescribed Fire Program HB216-Kentucky Economic Development Partnership HB237-Data center tax incentives HB238-Public pension review and audit HB250-Penalties for false identification HB261-Water utilities HB271-Public Pension Oversight Board HB272-Radon mitigation HB276-State tuition for military HB281-Retirement benefits for local officials HB303-Appropriations HB304-Appropriations HB306-Appropriations HB309-Public-private partnerships HB314-Concealed carry for off-duty and retired police HB340-Authorize payment for claims against the state HB343-Fire protection districts HB354-Kentucky Emergency Response Commission HB381-Coroners HB384-Wellness incentives for emergency services HB402-Taxation on landfills HB420-Temporary delegation of parental responsibilities HB428-Dog Fighting HB431-Water conservation HB434-Coroners HB473-Public safety training HB487-Advisory Board for Veteran’s Affairs HB489-Death certificates HB497-Seed standards HB499-Appropriations HB527-Administrative pharmacy duties HB529-Kentucky Water Resources Board HB535-Economic development; cadet troopers HB562-Durable/home medical equipment HB563-Hazardous waste HB570-Kentucky state police HB585-Emergency services HB609 Department of Parks peace officers HB626-Scholarship programs HCR13-LRC study on municipal bankruptcy HCR101-Free roaming and abandoned horses HCR117-Automotive Caucus HCR139-South Central Kentucky Caucus HCR185-Worker’s Compensation Program study HCR187-Federal screening of inbound shipments HJR5-Officer Daniel Ellis Memorial Highway HJR152-Water research HJR160-Road plan HJR164-Covered bridge trail HJR197-Kentucky 225th Anniversary Commission
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L KENTUCKY BANKER PROFILE
Claude Bentley, President & CEO of Peoples Exchange Bank Kentucky Banker Magazine asks Claude Bentley, President When looking for a vendor, what steps do you take to help you & CEO of Peoples Exchange Bank, some probing questions decide? Do you use the KBA as a tool for this decision? about his experiences in banking. His answers are as follows: We take into consideration endorsed companies from the KBA. What would you say separates your bank from others? We have differentiated ourselves through our banking products and most of all, by our people. Our people are our ambassadors, who are face-to-face with customers, offering exceptional service and developing lasting banking relationships. It is their commitment to service along with supporting the communities we serve that makes Peoples Exchange Bank great. Describe the quality of the customer service someone would receive when entering your bank. Serving our customers starts with knowing who they are. The more we know about their needs, the more we can offer them the products, convenience and rates they are looking for. Our staff is interested in improving the financial condition of our customers and takes great care in selecting products and services to support their individual needs. The consistency of delivering our exceptional service for over 100 years combined with our degree of professionalism creates positive and long term customer relationships. Why did you decide on banking as a career? I have a background in accounting and saw banking as a respected and prestigious career that provided a fundamental service to communities and businesses at large. As a banker, I have been able to serve people and help them to achieve their financial goals while working in a competitive and dynamic industry. Banking has offered opportunities for my personal and professional growth and the pleasure to work with intelligent and passionate people. Banking has made for a very rewarding and stimulating career. What would you tell others about the importance of being a member of the KBA? The KBA has been a wonderful partner to help Peoples Exchange Bank succeed in Kentucky’s dynamic marketplace. As a member, we have access to a wealth of resources that directly impact our bottom line. From technology to compliance, KBA is constantly identifying new and needed resources for its members. The KBA maintains a staff of lobbyists to help shape legislative proposals that reflect the interests of our bank and how we conduct business. They also offer educational and professional development opportunities along with preferred pricing for products and services. They are a wonderful advocate which allows members to accomplish their goals and objectives. What is your favorite inspirational quote? “My philosophy of life is that if we make up our mind what we are going to make of our lives, then work hard toward that goal, we never lose. Somehow we win out.” Ronald Reagan Celebrating 125 Years
Each endorsed vendor has been put through a rigorous due diligence process by the KBA to determine financial stability, representation, references and proposed member discounts. This helps to ensure they will provide quality products and services. By looking at KBA endorsed companies, we are able to save time, money and have peace of mind. What do you feel are the most important issues bankers face? Banks today are facing rapid and irreversible changes across technology, customer behavior and regulation. The combined power of these three drivers of change is increased by the fact that they are closely interwoven. If someone walked up to you and asked you for advice on banking as a career, what would you say? I would encourage them to build networks with other bankers to have someone to discuss ideas and problems. More importantly, to continue and gain more education in banking by attending leadership and banking institutes. This will also help you with networking and developing peer relationships. Finally, you must be involved in helping your community to grow and thrive. What three things do you need to be successful at this job? The best advice I can offer someone in this role is to listen. As a leader, it is important to listen to what is on the minds of your staff, customers and peers. Take time to get a sense of what they are trying to achieve as well as the challenges they may face. Second, you must also develop a team environment in which your executives feel comfortable to speak openly and challenge each other. Remember to take care of your staff and thank them both privately and publicly for a job well done. Finally, take ownership of your position. Communicate to your staff the big picture and keep them informed on current or changing goals. Be honest about the struggles the company may face and share your thoughts on how to overcome them while motivating staff to do the same. If you can accomplish these three things, you will reap the rewards of being surrounded by happy employees who want to work hard and do the right thing for your company to succeed.
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Contact Jamie Hampton for more information jhampton@kybanks.com 502-736-1278
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Our schools, seminars and webinars continue to provide our bankers with the information they need to succeed in this ever-changing financial industry. Join us to learn, enrich and enhance your career. If you have any questions about anything please give me a call or email. We’re here to help! Paula Cravens Sturgeon, Director of Education Solutions | phone 502-736-1275 | email pcravens@kybanks.com
2016 KBA EDUCATION CALENDAR
2016 COMPLIANCE SEMINARS
GENERAL BANKING SCHOOL
June 12-17 | Louisville
Bankruptcy Part II Seminar June 21 | Louisville Regulators Forum June 23 | Bowling Green June 24 | Lexington Certified Teller Seminars July-August | Various Locations Business Law Basics & Lender Liability Seminar August 10 | Bowling Green August 11 | Lexington Women in Banking Workshop DETAILS BELOW August 18-19 | Louisville
COMMERCIAL LENDING SCHOOL
August 22-26 | Louisville
ALM Seminar The Baker Group August 24 | Louisville
Live Seminars October 21 | ACH Processing Compliance / Lexington December 16 | ACH Processing Compliance / Bowling Green
PEGASUS WORKSHOPS/SCHOOLS Deposit Compliance Fundamentals August 2 | Somerset August 3 | Bowling Green August 4 | Gilbertsville August 9 | Elizabethtown August 11 | Lexington New Accounts in Kentucky August 15 | Paducah August 16 | Bowling Green August 17 | Elizabethtown August 18 | Lexington August 22 | Morehead August 23 | Hazard August 24 | Somerset
Cyber Security Seminar October 6 | Bowling Green October 7 | Lexington
THE BANKERS’ VOICE
Loan Documentation Seminar November 1-2 | Bowling Green November 3-4 | Lexington
Loved it! Learned so much and had a great time doing it. Every bank should send as many of their staff as possible to this school. It will only help your bank! Joel Brashear, Hyden Citizens Bank | KBA Emerging Leader
What our Bankers say about the General Banking School