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Chuck (Maggard) and his team helped us out a lot when we needed them. I know he will give you the same service and attention he gave me. 2017-2018 KBA Chairman Tim Barnes, President & CEO Hometown Bank
WE KNOW BANKS kenbanc.com Chuck Maggard cmaggard@kybanks.com cell 606-682-1950
Lisa Mattingly lmattingly@kybanks.com cell 502-377-4048
Brandon Maggard bmaggard@kybanks.com cell 606-682-2769
KENTUCKY BANKER MAGAZINE Published bi-monthly by the Kentucky Bankers Association
YOUR ASSOCIATION OUR COMMONWEALTH
SEPT/OCT 2017 IN THIS ISSUE
On behalf of the KBA, and President/CEO Ballard Cassady (pictured far right), we would like to thank the following departing Officers (pictured left to right): Mr. Bill Allen, Mr. Ryan Steger, Mr. Louis Prichard and Mr. Mike Mineer.
2017-2018 OFFICERS Chairman Mr. Timothy E. Barnes President & CEO Hometown Bank of Corbin
Vice Chairman Mr. David M. Bowling, CEO Citizens Union Bank of Shelbyville Treasurer Mr. Lloyd Hillard, Jr. President & CEO United Bank & Capital Trust Co. Past Chairman Mr. Michael H. Mercer President & CEO First State Bank
President & CEO Mr. Ballard W. Cassady, Jr. Kentucky Bankers Association
BOARD OF DIRECTORS Group Representatives
Representing Group 1 Mr. J. Brent Bugg President & CEO, Fredonia Valley Bank Representing Group 2 Ms. Lanie W. Gardner Community President First Southern National Bank Representing Group 3 Mr. John T. Taylor President & CEO, PBI Bank
Representing Group 4 Mr. Dan M. Harbison President & CEO The Farmers National Bank of Scottsville
Representing Group 6 Mr. Darin L. Young President & CEO, Century Bank of Kentucky Representing Group 7 Mr. Steve Tolliver, Market President The Monticello Banking Company
Chairman’s Corner.............. 5 Staff Directory..................... 6 Straight Talk........................ 7 My Two Cents..................... 9 It’s Been An Honor.............. 10 Banking on Technology....... 13 75 Years in Banking............ 14 Landrum Wins Big.............. 18 Father & Son....................... 26 Email Indicators.................. 33 KenBanc Cup Valhalla......... 35 Central Bank Prized Ham.... 37 Timing is Everything........... 40 KY Thrift Foundation.......... 47
Representing Group 8 Mr. Anthony Kinder President & CEO Peoples Bank of Kentucky
ON THE COVER
The theme of our convention is Strong Roots, Bright Tomorrow; read about the roots and the brightness of the KBA in this issue of Kentucky Banker Magazine.
Representing Group 9 Mr. Jed Weinberg Chairman, Bank of Hindman
Representing Thrifts Ms. Shanda L. Smith, President & CEO Blue Grass Federal Savings & Loan
Representing Thrifts Kari R. Gough President & CEO, Winchester Federal Bank
Representing Bank Size
Assets of $1B or more Mr. James A. Hillebrand, President Stock Yards Bank & Trust Company
Assets at least $200M; less than $1B Mr. Dale Sights President, Field & Main Bank
KBA Benefits Trust Mr. W. Fred Brashear, II President & CEO, Hyden Citizens Bank
Kentucky Bankers Association 600 West Main Street, Suite 400 Louisville, Kentucky 40202
Kentucky Banker Magazine (KBM) is the official bi-monthly periodical of the Kentucky Bankers Association (KBA). No part of KBM may be reproduced without written permission from the KBA. The KBA is not responsible for opinions expressed by outside contributors published in KBM. The KBA reserves the right to publish submissions at the discretion of the KBM editorial team. Subscriptions: $30/year for KBA members; $60/year for KBA non-members; single copies $5 each. SUBMIT
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2017-2018 CHAIRMAN’S CORNER Tim Barnes | Chariman Kentucky Bankers Association
KBA INSURANCE SOLUTIONS ISSUE
Hello KBA! Ready For What’s Next? In August 1996, a young man stepped to the podium at the Milwaukee Open and spoke the words “Hello World.” That young man named “The Old” Tiger Woods (he was much different than “The New” Tiger Woods). Tiger went on to win a few golf tournaments and help carry the Nike brand for a few years.
During that press conference, he thanked his parents and mentors before introducing the world to Nike Golf. Please allow me to follow his marketing plan, although the last time I played golf I shot one under at Adventure Cove Mini Golf in Hilton Head.
I shot in the 70s when I was 8. I shot in the 60s when I was 12. I played in the Nissan Open when I was 16. Hello world. I won the U.S. Amateur when I was 18. I played in the Masters when I was 19. I am the only man to win 3 consecutive U.S. Amateur titles. Hello world. There are still courses in the U.S. I am not allowed to play. Because of the color of my skin. Hello world. I’ve heard I’m not ready for you. Are you ready for me? Hello KBA! I would like to thank my wife Dee, sons Tanner and Abe, my four-legged boys Champ and Buddy, my parents Phyllis and Judson Barnes and some special people in my banking career: Denny Dorton, Rick Guillaume, Doug Madison, Jim McKenzie, Jim Rickard, Bob Hammons, all Liberty National Bank Alumni, the Centre Banking Mafia and the Board of Directors and Employees of Hometown Bank. Thank you!
HELLO CHUCK!
In Tiger’s Nike ad he stated: “I’ve heard I’m not ready for you.” Well let me tell you what I was not ready for: in December 2015 a UPS overnight box was broken into and several packages were stolen. Most of these packages originated at Hometown Bank and contained serious confidential information such as IRS subpoenas, secondary market loan closing documents and other banking-related documents containing customer information. After being notified by the IRS and UPS that this information had been stolen and possibly being used to create new ID’s and credit cards, Hometown Bank’s Incident Response Team met and began the task of notifying customers, regulators and anyone else that was affected. One call I made that eventful day was to Chuck Maggard at KBA Insurance Services. Hometown Bank had purchased the Beazley’s Breach Response Policy. This policy protects against data breaches and includes both insurance and service. The service is a hole in one. Long story short, Beazley’s Response Team took control of the situation and put Hometown Bank in contact with an attorney that specializes in data breaches. Hometown Bank’s problem turned out not to be as large of an issue as initially thought, but the Beazley Breach Response Policy made sleeping at night a little easier for the Board of Directors and Management Team. Every Banker in Kentucky (and West Virginia) needs Beazley Response Services and all of the other products that KBA sells or endorses. Chuck and his team helped us out a lot. I know he would give you the same service and attention he gave me. Many of you have met Chuck and know this to be true. So again:
THANK YOU MIKE MERCER!
Hello KBA!
I also need to say a few kind words about Mike Mercer. Ummmmmm…
Hello Chuck!
Mike, thank you for making my year as KBA Chairman look much more promising. Seriously, I would like to Mike Mercer and his wife Gloria for their service to the organization. The Kentucky Bankers Association has accomplished many goals during your chairmanship and all bankers across our beautiful Commonwealth tip our hats to both of you. SEP/OCT 2017
Now allow me to get back to the Tiger Woods analogy and my own golf story. On the 16th hole at Adventure Cove, I hit a 27-foot putt… …off the nose of the clown. Ballard, are you ready for me?
KENTUCKY BANKER | PAGE 5
KENTUCKY BANKERS ASSOCIATION STAFF 23 EMPLOYEES WITH 300+ YEARS OF COMBINED EXPERIENCE SERVING THE COMMONWEALTH
Ballard W. Cassady Jr. President & CEO bcassady@kybanks.com
Jamie Hampton Education Services Coordinator jhampton@kybanks.com
Debra K. Stamper EVP & General Counsel dstamper@kybanks.com
Michelle Madison IT Manager mmadison@kybanks.com
Matthew E. Vance Chief Financial Officer mvance@kybanks.com
Tammy Nichols Convention Coordinator Finance Officer, HOPE of KY tnichols@kybanks.com
Selina O. Parrish Director of Membership sparrish@kybanks.com Natalie Kaelin, Esq. Director of Education nkaelin@kybanks.com Josh Fischer Director of Communications jfischer@kybanks.com Billie Wade Executive Director, HOPE of KY bwade@kybanks.com Miriam Cole Executive Assistant mcole@kybanks.com John P. Cooper Legislative Solutions jcooper@kybanks.com Paula Cross Education Services Coordinator pcross@kybanks.com Casey Guernsey Enrollment and Billing Specialist cguernsey@kybanks.com
Katie Rajchel Staff Accountant krajchel@kybanks.com Angie White Sponsorship Relations awhite@kybanks.com Steve Whitlow Systems Engineer swhitlow@kybanks.com Chuck Maggard President & CEO, KenBanc cmaggard@kybanks.com Lisa Mattingly Director of Sales & Service KBA Benefits Solutions lmattingly@kybanks.com Brandon Maggard Account Representative KenBanc Insurance Services bmaggard@kybanks.com Donna McCartin Benefit Support Specialist dmccartin@kybanks.com Audrey Whitaker Insurance Services Coordinator awhitaker@kybanks.com
STRAIGHT TALK
KBA INSURANCE SOLUTIONS ISSUE
Ballard W. Cassady, Jr. | President & CEO bcassady@kybanks.com
How Important Are State Banking Associations? I would much rather be talking about politics and what I learned on a recent trip abroad that made a significant impression on me, but this article is going to be on what some KBA history teaches us about the value of what we all do and accomplish together.
It’s sometimes hard to do, but Kentucky bankers don’t back down when providing good customer service, and meeting customer needs, is under attack.
I hear people ask all the time about the importance of having a banking trade association. I tried to address it last year in my comments at the convention. To simplify a twenty minute speech, if we did away with the KBA, the first meeting bankers would be having would be to discuss how we can band together to give our message a stronger voice. The following is a perfect example of that strength in unity, the power of the KBA, and how that strength creates value that lasts for years.
Anyway, when those banks asked the Kentucky Department of Insurance about becoming an insurance agent, it refused to even provide an application. Rather, it conveyed a “kangaroo court” to conduct a “hearing” on whether banks had a right to be issued a license.
At this point, the KBA and its three banks sued. We sued in two courts: 1) We sued in federal court in Frankfort to get a ruling on a national bank’s right to be an insurance agent. There are a lot of banks today involved in the insurance 2) We sued in state court in Frankfort to stop the insurbusiness. Like so many things that we have in this country, ance commissioner’s hearing because it was clear she we sometimes take it for granted. Well, allow me to tell had already made up her mind and because the decision you the REAL story of how banks got the right to sell any needed to be made by a federal court. type of insurance. Insurance is primarily regulated through state laws. In the 1980’s, the states’ regulators were mostly under the sway of insurance agents that didn’t want to compete with banks. Kentucky was one of the states. But there was a federal statute that let national banks in small towns act as insurance agents. Even that wasn’t enough as many insurance agents and state insurance regulators claimed states had a right to override and ignore that rule. Various lawsuits were filed in other states, but the banks kept losing.
To the shock of the nationwide banking community, we won both lawsuits, but we still needed to keep fighting since the insurance commissioner, along with the insurance agent industry, appealed to the federal Court of Appeals for the Sixth Circuit. But we won there, too.
Now, this is where it gets interesting. Only in Kentucky had the banks been winning. In a federal case out of Florida, the banks had lost. Because of Kentucky, there were now completely different rulings from two federal courts. Can you say U.S. Supreme Court? It was now clear that it needThe Kentucky Bankers Association thought their members ed to decide which lower court was correct. Within the should be able to provide this service to their customers, week, I received a call from the American Bankers Assoso we tried to get a bank licensed to sell insurance in Ken- ciation thanking us for helping them get the dispute in a tucky. Three KBA banks stepped forward -- Owensboro position for a U.S. Supreme Court ruling and asking us to National Bank, First National Bank of Louisa, and Citizens support the Supreme Court reversing the Florida decision. National Bank of Paintsville. I want to thank these banks The ABA even offered to help with our legal expenses. and their officers and directors, and also the KBA’s Board, continued on the next page for standing up for their principles. SEP/OCT 2017
KENTUCKY BANKER | PAGE 7
KBA INSURANCE SOLUTIONS ISSUE continued FROM THE PREVIOUS page
Honestly, I wanted to keep pushing our case. We’d won because of the hard work of our bankers and the firstclass legal team we’d put together of Brooks and Thurman Senn. That team was two Kentucky banking lawyers, and I wanted to again show the country what Kentucky people can do when they put their mind to it. But, after several conversations, I was “educated” on the fact that it was easier to get the Supreme Court to overturn a bad decision than to agree with a good decision. Go figure, right? So, we went along with the ABA and filed a brief with the Supreme Court in the Florida case. Long story short, we won at the Supreme Court level. The judges even sent an order to the Kentucky federal court instructing it to reject any challenge to our Kentucky decision. With this victory, it wasn’t very long until the Kentucky General Assembly rewrote Kentucky’s laws to make it crystal clear that Kentucky state banks, not just national banks, have the right to act as insurance agents to sell all types of insurance. Thanks to the Board of Directors of the KBA and their willingness to fund and fight for this just cause and thanks to our three member banks for being willing to let us use their name and application requests, every bank in America can now be involved in the selling of insurance. Had it not been for the KBA, banks around the country could still be excluded from participating in Insurance sales.
I DON’T UNDERSTAND ALL THESE DEBIT PROCESSING HIDDEN FEES!
WELL SHAZAM DOESN’T HAVE HIDDEN FEES.
Here’s part two of the story. We’d learned a lot about insurance during the lawsuit, and this helped us start and grow KBA Benefit and KBA Insurance Solutions. Our board told us to find and provide the best products at the best pricing possible for our banks, not just so they could buy products from us but so that they could use these companies to sell products to their customers. The feeling of the board was that if we can provide the best product at the best price, then we keep the insurance industry honest. Our banks can compare the product offered by their local agent with those offered through KBA Benefit and KBA Insurance Solutions. We don’t always win in those comparisons, but it’s rare because the pricing or the product, and its quality, isn’t equivalent or better.
The Bottom Line... By working together, we showed the country that Kentucky banks would not be bullied or ignored on important industry issues. We applied the time-honored lesson that together we’re stronger and more successful. I hope we never forget this history and these lessons.
...REALLY?
ZERO.
WHAT ABOUT RATE HIKES?
IN FACT,THEIR PARTNERS ENJOYED OVER $16 MILLION IN PRICING REDUCTIONS OVER THE LAST 3 YEARS! NOW THAT’S...
NOPE, EVERYTHING IS COMPLETELY TRANSPARENT WITH SHAZAM.
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Now that’s epic.
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MY TWO CENTS Debra Stamper | General Counsel & EVP
dstamper@kybanks.com t @KBADebra
KBA INSURANCE SOLUTIONS ISSUE
Top 3 Benefits of Bank Insurance; and, Equifax should have been better prepared
The topic of this month’s magazine is insurance. Of course, tation in each of these three areas. Banks can no longer there are all sorts of ways to insure against risk and there (if they still do) place the responsibility of market success, are all sorts of ways that insurance can benefit your bank. compliance or safety and soundness on one employee or department.
1. NON-INTEREST INCOME
My first thought is non-interest income. Banks have the ability, if organized properly and with the correct licenses, to offer all sorts of insurance to their customer base, from health insurance to title insurance, and everything in between. But, your bank and its employees can also market your bank as insurance against uncertainty. Your employees should (and probably already are) be available as resources for your current and potential customers when they are unsure about major financial decisions.
It must be a holistic effort. That means training, education, availability of resources (including mentors), compassion and understanding of customer and bank goals and potential obstacles towards those goals.
3. RISK INSURANCE
My third thought is bank risk insurance. KenBanc Insurance Services, the engine behind KBA Insurance Solutions, I am not saying that you should all become financial plan- offers a full range of insurance products, but rather than ners but, you should have available resources to help provide you a commercial for those services and prodcustomers understand the differences between types of ucts, let me tell you about a service that Chuck Maggard mortgages (student loans v. grants and scholarships); may- of KenBanc offers, regardless of whether you buy products through KenBanc. be even the value of coupon cutting! I am forever amazed at how unprepared our emerging adults are for the real That service is detailed analysis of your bank’s insurance world. Resources are freely available on the internet and needs. You can call Chuck (502-736-2671) who will review can be easily used to tailor your own marketing pieces. your current policies against your banks needs and make recommendations where appropriate. If you want Chuck to quote any policies, for purpose of comparison, he will. But, more importantly, you know that you are getting adMy second thought is compliance insurance, which really vice from an insurance professional who specializes in means: well trained and thoughtful employees with suf- bank coverages. That is available nowhere else, and is one ficient resources available for success. This is the most of the many benefits for being a KBA member. basic insurance - preparing your bank for market success, safety and soundness and operational compliance. With- THE EQUIFAX DEBACLE out all three of these components, your bank is assuming risk that will move it towards elimination. That means your My last thought is Equifax and their epic data breach, and staff needs to understand the importance of these three the company’s chaotic response. The insurance tie-in is that I hope they have insurance to cover some of their lossprongs of success and the core principals of each. es. (We offer insurance on certain breaches.) I also think Each member of your staff must understand their role in about all of the opportunities Equifax missed in non-tradiand responsibility for accomplishing successful implemen- tional insurance.
2. COMPLIANCE INSURANCE
continued on page 11
SEP/OCT 2017
KENTUCKY BANKER | PAGE 9
2016-2017 CHAIRMAN’S CORNER | REFLECTION
KBA, It’s Been an Honor
I know you all are shocked that my tenure as chairman is coming to an end. Despite the temptation to vote me in for another term, I must relinquish the crown to my court jester, Tim Barnes. It’s been an honor to serve as your chairman the past year. I have enjoyed getting to know many of you across our great Commonwealth during the annual Group meetings. I’ve also been able to strengthen relationships made during the past years of my banking career. Your friendships are what I value most. I have truly enjoyed working with Ballard and all the staff in our KBA office. I hope you realize they are the very best at what they do. One of the opportunities I have enjoyed, during my term as chairman have been my trips to Washington, D.C. Allow me to take a few moments to convey my country boy observations about our nation’s capital: 1. There is such a disconnect between those who inhabit Washington and those of us in Main Street, USA. It reminds me of how Mr. & Mrs. Howell interacted with the other castaways on Gilligan’s Island. 2. You can blow up a Fitbit trying to follow John Cooper back and forth and up and down the hallways of the Capital. 3. Don’t get in a hurry as you wait for Ballard’s six million dollar body to get through the metal detectors. 4. Nobody is very excited to see you, no matter what they say. 5. Senator McConnell has a larger staff than all the city and county employees in my home of Muhlenberg County. 6. Leave every metal object you possibly can in your hotel room because you go through a metal detector to be able to use a restroom. They are everywhere. 7. Always act like you belong, because in reality, nobody belongs there. 8. Andy Barr is truly our friend as is my Congressman Jamie Comer. 9. Do not ask Senator Paul about credit unions (just pretend they don’t exist). 10. Above all, absorb the enormity and history of the entire city and be very proud to be an American.
As a true community bank, the bank lobby is key to our existence. The lobby allows us to provide the one thing that Wall Street nor Online Banks can… EXCEPTIONAL CUSTOMER SERVICE! I was raised in banking to believe that the number one advantage I had was to get that customer in front of me, eye to eye. That way, I could truly access their situation and provide them the product and the service they needed and deserved. It also allowed them to see that I cared about them and I valued a relationship not just an account. As we race to keep up in the digital age of banking, are we cutting our own throat? The more you provide the customers with ways to bank with their phone or PC, the more you are running them away from your lobby. I know this is a double edged sword. We must stay current with products but we MUST maint ain personal contact with our customer. My challenge to us all, STAY RELEVANT (in a digital world). Don’t spend all your time and money trying to look like the big boys and lose your identity in the process. We all know that our communities would struggle to exist if they lose their community bank but do our customers know that and do they care? Loyalty is a fleeting customer characteristic. I have faith in us all. Let’s continue to strengthen one another through our association with the KBA and the strong networking that exists throughout the commonwealth. I have learned so much from many of you. We are such a unique association, despite being competitors, we willingly share knowledge and unite for causes that will strengthen our industry. Because of this, I am proud to be a member of the KBA and to have had the honor to serve you this year. My best wishes are with you all and I look forward to working with you for several years to come. I used to say I wanted to work as long as Garland Certain but now I just want to live as long as Garland. Now close your eyes and picture me riding off in the sunset on my white horse!
In closing, and I’m sure some of you are getting emotional, I want to express my greatest concern for community banking in the future. I just read a list of things the author stated would not be around in ten years. I agreed with most but the disturbing one was bank lobbies. PAGE 10 | KENTUCKY BANKER
SEP/OCT 2017
MY TWO CENTS continued from page 9
The
Debacle
First and foremost, Equifax was not prepared. Knowing that they have one of the most complete databases of personal and private financial information on virtually every resident of the United States, including (in some cases) infants and the deceased, Equifax should have been better prepared. Equifax should have had safeguards and security measures in place at the highest level available.
Clearly, they did not, and I hope the other non-bank holders of such data are paying attention.
LISA FISHER KBA Endorsed Vendor Profit Resources Inc. is excited to announce that Lisa Fisher has joined the firm as director of card services. Lisa comes to PRI with more than 30 years of experience working with community financial institutions. Most recently, Lisa collaborated with financial institutions on behalf of Mastercard, negotiating contracts and pricing. Fisher has extensive industry knowledge of electronic payments including card branding, ATM processing, debit and credit card services, PIN POS, and risk management. Mike Holt, Partner at PRI and debit card profitability expert, said: “Lisa’s expertise will allow us to continue to deliver debit card profitability enhancement services to financial institutions. She has a depth of understanding in this space that is hard to match, and as a former banker, she has our clients’ best interest at heart.” “Providing the community banking space with assistance in growing their core customer base while improving profits has been my focus for many years and Profit Resources is a leader in the field,” Fisher explains. “I look forward to assisting our clients in creating a payment strategy to address current market issues.” Email: lfisher@profitresources.com
SEP/OCT 2017
But, honestly, why should they? The law doesn’t require it and liability is not quantified. Next, they compounded the risks by not disclosing the breach for 10 weeks. This breeds negative public perception. They also did not disclose the fact that certain high level executives dumped their stock after the breach, but before it was disclosed. Equifax muddied the field even more by limiting fraud alert coverage to one year; the trend for recent data breaches is 3 years. Signing up for the fraud service required additional sharing of private information, had to be scheduled in the future (to keep their servers from crashing) and included a mandatory arbitration clause in the event a user suffered damages as a result of the fraud service.
Clearly, Equifax was in a position of significant risk for which they did not properly insure against. Will Equifax eventually have to pay the price for this lack of risk mitigation? I don’t know. But I do know that banks will suffer losses that Equifax will not likely be held responsible for under any legal theory. Banks will likely suffer reputational damage because they provide data to the Equifax (not the customer). Banks will also be stuck with fraudulent and uncollectable debt entered by identity thieves. Banks will be burdened with the costs of replacing credit and debit cards and changing loan numbers, etc., even if for no other reason than customers are rightly concerned that they may be vulnerable. This Equifax debacle just proves in BOLD CAPITAL LETTERS that the time is now for shared breach liability among those which are responsible for the breach. We will prepare for that fight. In the meantime, get your insurances in order! KENTUCKY BANKER | PAGE 11
KENTUCKY BANKERS ASSOCIATION
BANK SHOTS! BANK SHOTS! highlight you, the members of the KBA, and the banks you work for. Formerly Bankers on the Move and Bank Happenings, BANK SHOTS! is where we publish your successes and acknowledge your milestones. Email your BANK SHOTS! jfischer@kybanks.com
FNB Bank Supports Empty Bowls Project
FNB Bank presented a check for $500 to support the fifth annual Graves County Empty Bowls Project, scheduled for Saturday, April 28, 2018 at Trace Creek Baptist Church. The Empty Bowls Project is an international grassroots movement with a mission to fight hunger locally and globally. All proceeds from the event will benefit the Mayfield-Graves County Food Pantry, which served approximately 5,200 local families in 2016.
Murray Bank Supports Murray HS Speech Team
The Murray Bank is proud to support the Murray High Speech Team as they are gearing up for the 2017-18 school year. On Wednesday, August 23, the Murray Bank made a contribution to help pay for transportation costs and entry fees for the upcoming season. This year’s fundraising goal for the Murray High Speech Team is $20,500. The donation was presented to Murray High Speech Team member Marina Smart. Marina is a sophomore and competed in International Extemporaneous Speaking at the National Speech and Debate Association National Tournament in Birmingham, Alabama this past June. On the right is Murray High Speech Team Coach Michael Robinson. PAGE 12 | KENTUCKY BANKER
MICHAEL BLOUNT Community Trust Bank announced that Michael Blount has been named the Williamsburg Market President. Mr. Blount’s responsibilities include overseeing and providing consumer, residential, and commercial lending options to new and existing clients, as well as offering a variety of financial solutions to individuals and businesses. Mr. Blount has more than 37 years of banking experience and has worked at Community Trust Bank for over 12 years. He is also the Mt. Vernon Market President. He is a graduate of Corbin High School in Corbin, Kentucky. He earned a Bachelor of Science degree at the University of the Cumberlands in Williamsburg, Kentucky. Mr. Blount is a member of the Chamber of Commerce Board for Rockcastle and served as Past President. He is a member of the Economic Development Board and is a former board member of the Fellowship of Christian Athletes. He is a member of the First Baptist Church of Somerset.
FACEBOOK #kbabankshots
BANK SHOTS! #kbabankshots
KENTUCKY BANKERS ASSOCIATION
Banking on Technology by David Still, Regional Director, Promontory Interfinancial Network
As a fintech firm, we are always interested in what technologies banks are investing in. Recently, we surveyed financial institutions about where they allocate budgetary resources for technology. Below we share some of the key findings.
JACOB TAMME Jacob Tamme, an entrepreneur, football star at the University of Kentucky with NFL experience, has been named to the Farmers National Bank Board of Directors. A Danville native and resident, Tamme owns and operates a farm in Boyle County. Jacob and his wife, Allison, are founders of the Swings for Soldiers Classic, a charitable golf event that supports veterans. “We are very pleased to add Jacob to an already strong board,” said Greg Caudill, CEO of Farmers National Bank. “He will bring youth, an entrepreneurial spirit and a strong desire to become involved in his hometown to the bank’s governing body. We look forward to his contributions to our organization for many years to come.” Tamme was a four-year football letterman at Boyle County High School prior to his playing career at UK, which included All-SEC athletic and academic honors. He has played in the NFL for nine seasons as a member of the Colts, and Falcons.
COUNT DRACULA
Transylvania Blood Bank (TBB) would like to congratulate Mr. Count Dracula on his recent promotion. Despite his inability to work bankers’ hours, Mr. Dracula is TBB’s top employee and customer. Happy Halloween KBA!
Current Priorities. When asked what area of technology they are allocating the most budgetary resources to, banks ranked information security (36%) and online/mobile banking (36%) as the two top priorities by a wide margin. Data management/data mining and regulatory technology lagged behind. At the bottom of the list were fraud detection (5%), marketing/customer outreach (4%), and automatic underwriting/online lending (3%).
Investing Ahead. Given the growing threat of hackers and concern about online security and privacy, it’s not surprising that banks are shifting their technology investments to some degree. When asked whether they expected their investment in technology to change over the next two years, banks listed fraud detection (78%) and information security (77%) as their top priorities for significant or moderate increases in funding. The listing of fraud detection as a major target for investment going forward signals an important shift for some banks from their current spending patterns. Interestingly, a majority of respondents (56%) indicated they plan on maintaining current spending levels for automated underwriting/online lending. Artificial Intelligence. In the banking sector, the movement toward using AI has been rather slow compared to other industries. Yet, according to our data, the pace of adoption may be quickening. Fifty-four percent of respondents stated that they expect to see AI systems become a familiar part of American banking in less than five years. About 10 percent think it will happen in two years or less. Breaking the numbers down by asset size, larger banks believe AI will be integrated into the banking sector sooner than smaller-sized institutions. However, approximately 50% of community banks believe the integration of AI at their institutions will happen in five years or less. We hope you find this information helpful. For more details, view the full Bank Executive Business Outlook Survey report at www.promnetwork.com/business-outlook-survey.
About Promontory Interfinancial Network Chosen by more than 3,000 financial institutions nationwide, Promontory Interfinancial Network is the leading provider of FDIC-insured deposit placement services. Banks can use the company’s solutions—Insured Cash Sweep, or ICS; CDARS; Promnet Repo; IND; Yankee Sweep; Bank Assetpoint; and Residential Mortgage Network—to build multi-million-dollar relationships, reduce collateral requirements, purchase funding, manage liquidity, and buy or sell loans. Visit promnetwork.com to find out how Promontory Network can help your bank to manage its balance sheet more profitably. KENTUCKY BANKER | PAGE 13
KENTUCKY BANKERS ASSOCIATION
75 Years in the Banking Business! Mr. Keith Radford Celebrates a Distinguished Career
75 years in banking. 75 years. That’s not a typo.
Mr. Keith Radford may be the longest serving bank employee in Kentucky. (Heck, he may be the longest serving bank employee in the country.) Mr. Wickliffe Alexander, Mr. Radford’s first employer, taught him the first day of his banking career: “There are two things you have to do to work and be successful in a bank, Be Honest and Keep Your Mouth Shut.” At the age of 21, Mr. Radford joined Mr. Alexander, and two other employees at the Bank of Cumberland, in Burkesville, Kentucky. Mr. Radford spent 18 years with the Bank of Cumberland, exemplifying the true definition of what a banking relationship officer should do, doing everything from Teller to Bookkeeper to Loan Officer to Custodian. “Mr. Radford and my father’s longtime professional partnership is a perfect example of what working TOGETHER can do. I have had the pleasure of working with Keith for 25 years. He has been a great mentor who’s advice I value and trust, ” stated Mr. Steve U. Morgan, President & CEO of First & Farmers National Bank, Inc. In 1961 Mr. Radford accepted the Cashier position at Citizens Bank of Albany (CBA). He was also asked to serve as a Bank Director and Vice Chairman for CBA. There he began a great partnership with Bank President, Mr. N. L. Morgan. Mr. Radford soon moved to the Executive Vice President position with CBA, and with Mr. Morgan, led the bank through 42 successful and profitable years. He was asked to serve on CBA’s holding company board, Albany Bancorp, Inc., from its inception in January of 1993 and continues to serve on the board. As part of the Albany Bancorp, Inc. board, Mr. Radford helped to oversee the purchase of First National Bank of Columbia (1997), Union Planters of Burkesville (2001), Union Planters of Somerset (2004), and Burkesville PBI (2008). The end result was a 2008 bank merger into the present day First & Farmers National Bank, Inc. “It is a credit to Mr. Radford, and the rest of the Albany Bancorp, Inc. board of directors, that through their expertise and guidance we have grown First & Farmers National Bank, Inc. PAGE 14 | KENTUCKY BANKER
into a community bank with assets in excess of $500 million,” exuded Mr. Morgan. Mr. Radford has expressed and embodied many values in his banking career. By serving customers for 75 years, he has learned a thing or two. Lessons he has learned over the years include: “Every customer is different, strive to meet the needs of all customers.” On taking care of customers, Mr. Radford believes the most unappreciated member of our bank, the Tellers, can make the most important contribution to the bank. He has often said: “Our Tellers see 10 times as many people as Loan Officers!” Mr. Radford also believes, “If you ever find yourself in the position of President or CEO of your bank, you should surround yourself with excellent people and then give those employees leeway to do their job.” When asked what he enjoys most about banking in the 21st century he said: “Communication is better! Information is shared instantaneously.” Mr. Radford recognizes that banking is always evolving, and is not surprised that new technology and electronic channels are at the forefront of our industry. Mr. Radford and his wife of 65 years, Mary, have one daughter and two grandsons. After graduating from Cumberland County High School, he traveled to Columbia, Kentucky, to attend Lindsey Wilson College, graduating in 1942. He received the 1996 Distinguished Alumnus Award from Lindsey Wilson College where he served two years on the Board of Trustees. He was a Trustee when Lindsey Wilson became a four-year college and continues to support the school through the Keith and Mary Radford Endowed Scholarship for students from Clinton and Cumberland counties. He has also been very involved in his community. He served on Kentucky Farm Bureau county committees, as director and treasurer of the Clinton County Soil Conservation District, as President of the Lions Club and as an Associate Lay Leader of the United Methodist Church. Mr. Radford is a notable member of the KBA 50-year club, and this October he will be celebrating his 96th birthday! Join all of us here at the KBA in congratulating Mr. Keith Radford and his distinguished life and career in Kentucky banking. SEP/OCT 2017
When it comes to BOLI,
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(BCP) is a national leader in the design, implementation, and administration of Bank-Owned Life Insurance (BOLI). We are endorsed by the Kentucky Bankers Association and have earned the trust of more Kentucky community banks than any firm in the country. So when you want the best for your BOLI portfolio and a firm that is dedicated to Kentucky community banks, talk to Lou Moore & Lon Haines at Banc Consulting Partners.
Lon P. Haines
MANAGING PRINCIPAL 267.773.7617 PHONE 856.577.7305 MOBILE lphaines@yourbankpartner.com
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BCP_KY_ad052115.indd 1
5/21/15 11:12 AM
KBA INSURANCE SOLUTIONS ISSUE
KBA INSURANCE SOLUTIONS STAFF PROFILE
CHUCK MAGGARD
Title: President/CEO, KenBanc Insurance Services Education: BBA Finance, Eastern Kentucky University Family: Wife Beth, Son Brandon (Daughter-in-Law Alison), Son Chris (Daughter-in-Law Callie), Daughter Kelsey, Granddaughter newly-arrived Caroline Elizabeth. Favorite Movie: Fast Times at Ridgemont High Favorite Food: Mom’s Salisbury Steak Favorite Vacation Destination: I don’t really have a favorite destination, but I have been spending some time in Colorado since my daughter Kelsey moved there. Favorite Golf Course: I have been blessed to play some very good courses, but probably the course I enjoy the most is the golf course I grew up on, Snow Hill Country Club. Lowest Golf Score: I can’t really recall for 18, but I do remember shooting 32 on 9 holes back in college! Hobbies: Golf, Cats, Bengals and hanging out with my family. How long have you been at the KBA? About 9 years. Tell readers what you do at the KBA: I manage the KBA’s insurance subsidiary, Kenbanc; this entails a bit of everything - sales, carrier evaluation, planning, and managing our staff. In the end, I help our banks get the best insurance coverage for their dollar. What does a typical work week look like for you? There’s no such thing as typical week, every week is different. I spend a lot of time out of the office visiting banks in Kentucky and West Virginia. What are some of your fondest memories at the KBA? It’s been a tremendous blessing working with such a fine group that all care greatly about our industry. The leadership of the KBA sets a tone of excellence, and it shows throughout the organization. What is something KBA members may not know about KBA Insurance Solutions? We don’t offer the same insurance coverages as other agencies. Because of our relevance in the industry, and the size of our blocks of business, for many lines we can get coverage terms and pricing that other agencies can’t. “Chuck is absolutely the best boss in the world! I admire him as a Boss, Husband and Father. I really admire how he prioritizes his life He is the real deal!” Lisa Mattingly Director of Sales and Service KBA Benefit Solutions PAGE 16 | KENTUCKY BANKER
SEP/OCT 2017
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KBA INSURANCE SOLUTIONS ISSUE
Addie Landrum Wins Big With KBA Benefit Solutions Wellness Program
In 2016, KenBanc Insurance Services, KBA Benefit Solutions and the KBA partnered with Anthem, for the first ever Wellness Employee Challenge. Each KBA member who was an Anthem subscriber were sent a packet that contained four different Challenge Cards, along with instructions on how you could win up to $5,000 by completing a task on each of the cards. Once you completed a card, all you had to do was mail it back to the KBA and you were entered to win. Addie Landrum, of First National Bank of Jackson, was one of the many people who participated in this wellness challenge. “Each time I’d go to the doctor, or complete one of the challenges, I’d fill out a card. I never thought that I would ever win,” Landrum said. Earlier this year in a Facebook Live drawing at the KBA offices, one of Landrum’s completed challenge cards was the first card to be pulled out of thousands turned in. Landrum won the grand prize of $5,000! When she found out she won, she asked: “Are you sure it was me?” “I was so thankful and excited because the night before I found out I won, my family and I had just talked about saving our money so we could take a vacation to Niagara Falls. That money came at just the right time,” said Landrum. With the money she was able to pay for her entire family to go on the trip. “I just thanked God for making a way for all of us to get to go. We were able to make such wonderful memories and I feel very blessed.”
Landrum was the only employee at the bank to fill out her cards and send them in, proof it only takes one to win! She now encourages all of her fellow employees to complete each challenge card, “Not only does it give us all a chance at winning some cash, but it encourages us all to live a healthier lifestyle,” she said. In total $25,000 was awarded to winners, including five $1,000 winners: Midge Loy, Bank of Jamestown; Dorothy Bickett, Springfield State Bank; Rhonda Meredith, Bank of Edmonson County; Katie Rajchel, Kentucky Bankers Association; Erienne McGoun, Magnolia Bank.
2017 WELLNESS PROGRAM: There’s Still Time!
And remember, there’s still time for you to get your challenge cards in for 2017. Make sure you get them completed and turned in so you can have a chance at winning big with your health!
BANK SHOTS! #kbabankshots
ANDREW PAGE
Citizens Union Bank announced the hiring of Andrew Page as a Mortgage lender. Andrew will be working out of the Bank’s branch located in Shelbyville.
KENTUCKY BANKERS ASSOCIATION
Kentucky Bankers Receive Diplomas from Graduate School of Banking at Colorado The Graduate School of Banking at Colorado (GSBC) announced the graduation of four Kentucky banking professionals as a part of the class of 2017. These graduates, pictured below, from left to right, include: Allen Sewell, Citizens Bank of Cumberland County, Burkesville; Tawna Wright, Independence Bank, Livermore; Lauren Patton, Independence Bank, Owensboro; Sean Sanders, Edmonton State Bank, Bowling Green.
ERIN BUKOWSKI Citizens Union Bank announced the promotion of Erin Bukowski to Senior VP Internal Audit Manager/Information Security Officer.
BEVERLY LADD Community Financial Services Bank promoted Residential Lender Beverly Ladd to Assistant VP. Ladd began her career at CFSB in October of 2010 in the Loan Operations Department
ERIN SOARD Traditional Bank promoted Erin Soard to Commercial Loan Officer. Soard graduated with a finance degree from NKU. She joined the bank in 2010 as a Portfolio Manager. BANK SHOTS! FACEBOOK @kybankers
KENTUCKY BANKER | PAGE 19
KBA INSURANCE SOLUTIONS ISSUE
KBA INSURANCE SOLUTIONS STAFF PROFILE
LISA MATTINGLY
Title: Director of Sales and Service, KBA Benefit Solutions Family: Three brothers, three sisters; husband Mike (pictured at right), daughter and son-in-law Jennifer, (recently married to an Orthopedic Surgeon, Dr. Thomas Schlierf), son JJ and one granddaughter, Addy; and a new grandchild on the way! Favorite movie: Tootsie, Joyful Noises, The Shack, The Green Mile Favorite food: Chocolate ice cream Favorite vacation destination: Italy Favorite golf course: Valhalla Hobbies: Reading, cooking, golfing, movies and exercise. How long have you been at the KBA? February of 2012, but I have been on the KBA account as agent since 2009. Tell readers what you do at the KBA: My role is to oversee the sales and service of the employee benefits we offer our bank members. From negotiating with the carriers, to presenting the benefits selected to the employees, enrolling the employee’s and ongoing service throughout the time a bank offers the benefits to their employees. What does a typical work week look like for you? 60% of the time I will be in the office working on new business proposals, renewal presentations, and other issues. 40% I will be out and about visiting current banks and calling on banks we hope to do business, or MORE business with in the future! What are some of your fondest memories at the KBA? Some of the best are when we are out on the road for our renewal meetings. It is the one time of year we get to see almost 100% of the wonderful people we work with at our banks. What is something KBA members may not know about KBA Benefit Solutions? Everyone cares so much about our banks and the people we work with. Donna (McCartin) especially gets personally invested in making sure everyone is taken care of! “Lisa is fantastic. It’s nice knowing that when she tells me something regarding employee benefits, I can take it to the bank. She’s easily the most knowledgeable employee benefits agent that I’ve ever known. Fun fact: When she and Brandon work together, she makes Brandon drive, and she sits in back seat behind him, so she can be on her computer and work during the commute time.” Chuck Maggard, President & CEO KenBanc
“It truly is a privilege to work with someone like Lisa. Her work ethic is unlike anything I have ever been around; she combines that with unmatched expertise in the industry in which she works. I know that I wouldn’t be where I am today without her help and guidance. Brandon Maggard, Account Representative PAGE 20 | KENTUCKY BANKER
SEP/OCT 2017
KBA INSURANCE SOLUTIONS ISSUE
KBA INSURANCE SOLUTIONS STAFF PROFILE
BRANDON MAGGARD
Title: Account Representative Education: WKU BS Marketing Family: Alison, wife (pictured bottom right), Caroline Elizabeth, daughter (at right). Favorite movie: Caddyshack Favorite food: Pizza Favorite vacation destination: Seattle Favorite golf course: Firestone CC South Lowest score: 69 Crooked Creek GC, London, KY Hobbies: Golf, Reading, Sports How long have you been at the KBA? 5.5 years Tell readers what you do at the KBA: We bring product knowledge & expertise for every line of insurance that touches a community bank. What does a typical work week look like for you? Most of the week I am out on the road visiting and servicing banks throughout the state of Kentucky. What are some of your fondest memories since working at the KBA? All of the golf outings, conventions, and conferences with our bankers is what I enjoy the most. What is something KBA members may not know about KBA Insurance Solutions? We are a one-stop shop for all types of insurance products that touch a community bank. Banks are all that we do and that’s what we know.
“I’m so lucky I get to work with a young man who is has a great work ethic, and is a true team player. Brandon is always upbeat and positive. He’s always willing to help anybody, anytime!” Lisa Mattingly Director of Sales and Service KBA Benefit Solutions
SEP/OCT 2017
KENTUCKY BANKER | PAGE 21
KBA INSURANCE SOLUTIONS ISSUE
KBA INSURANCE SOLUTIONS STAFF PROFILE
AUDREY WHITAKER
Title: Insurance Coordinator Family: Husband Jeff; daughter Kathryn Favorite movie: I do not have one favorite. I like a good mystery and just about anything with Jimmy Stewart is good. Favorite food: Ice cream is great! Chocolate chip and butter pecan are my favorites, but there really is no bad ice cream. Favorite vacation destination: The beach is my favorite place, especially along the Gulf. But anywhere by the water is good…pool, lake, etc. Hobbies: My husband and I like to kayak; it is so relaxing on the water. We also enjoy U of L football and basketball…Go Cards! How long have you been at the KBA? I started at the KBA, as a temp, 27 years ago. Since then I have worked in the Education department and now with KBA Insurance Solutions and KenBanc Insurance Services. Tell readers what you do at the KBA: I work with the banks’ on their insurance renewals (P&C, FI Bond, D&O, etc.). I am the contact for policy changes, claims, billing etc. I also assist bankers when getting their Insurance License. “Audrey is a perfect fit for our agency; she is hard working, detailed and loyal. I’d really be lost without her.” Chuck Maggard, President & CEO KenBanc Insurance Services
KBA INSURANCE SOLUTIONS ISSUE
KBA INSURANCE SOLUTIONS STAFF PROFILE
DONNA McCARTIN
Title: Benefit Support Specialist Family: I am very blessed to have four children. Matthew is 35; he and his wife, Trish, have three boys: Braydon, Brody and Brewer. Michael is 33. Ryan is 31 and my daughter, Lauren, is 29 and has a son named Kobe. Favorite movie: I am a big Melissa McCarthy fan, so Bridesmaids and The Heat keep me in stitches. Favorite food: I love steak and Mexican cuisine, and turkey and dressing! Favorite vacation destination: St. Thomas Virgin Islands. I feel recharged when I get back from a vacation there. Hobbies: Gardening and Sudoku How long have you been at the KBA? 4 years Tell readers what you do at the KBA: My role at KBA includes working with Bank HR Administrators, as well bank employees. I also work as the assistant to the Director of Sales, Lisa Mattingly. I try to help with any questions the employees or the HR Administrators may have; whether it pertains to new hire enrollment, medical claims and prescriptions; benefit explanations; renewals for all lines of insurance coverage; manage input to brokerage firm computer program Zywave. I really love my job. “Donna’s the best! Caring, knowledgeable, professional. We are very lucky to have found her. I average about an email per month from our clients praising the job she did to help them.” Chuck Maggard, President & CEO KenBanc Insurance Services
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RESOLUTION Hancock Bank and Trust Company William ‘Bill’ James Waldie WHEREAS, The Board of Directors of Hancock Bank and Trust wish to honor the service and memory of our friend William ‘Bill’ James Waldie who was born into Eternal Life on July 6 2017, and WHEREAS, William ‘Bill’ James Waldie ably served on the Board of Directors from June 17,1976 to December 31,2011 and; WHEREAS, his vast knowledge, loyalty, calm demeanor, and exemplary leadership skills contributed significantly to the growth of Hawesville, Lewisport, and Hancock County; WHEREAS, his personal integrity, generous spirit, and public service, leave a rich legacy, and; BE IT RESOLVED, by the Directorate of Hancock Bank and Trust along with its officers and employees wish to provide our condolences to his beloved family and many friends. BE IT FURTHER RESOLVED that copies of this resolution, appearing permanently in the official minute book of the Bank; be provided to the family of William ‘Bill’ James Waldie , the Kentucky Bankers Association, and the News Media
Adopted this 6th day of September 2017
Bentley Badgett II Chairman
Danny Coffey Chief Executive Officer
BANK SHOTS! #kbabankshots
LINDSEY McCLAIN
American Bank & Trust Company hired Lindsey McClain as Assistant VP Business Development/Marketing Specialist. She has over 14 years of business development, marketing and communications experience.
KENTUCKY BANKERS ASSOCIATION
Maximize Debit Card Brand Benefits
Is your bottom line suffering from PHOBIA? Processor Handled Our Brand Incentive Agreement
You are suffering from PHOBIA if you have a card brand loyalty agreement negotiated by your processor for you. If so, it is time to handle your own brand incentive agreement. Did you know the card brands will write agreements directly with banks? Consider the following reasons to actively pursue a brand incentive agreement with your card brand:
LOUIS SEEGER Citizens Union Bank hired Louis Seeger as a Mortgage Lender. Seeger will be working out of the Bank’s branch in Jeffersontown.
NATHAN ROWTON Community Financial Services Bank hired Nathan Rowton to the McCracken County team. Rowton’s 28 years of business knowledge includes running the Rowton Indoor Tennis Center.
NATHAN TERRY Community Financial Services Bank hired Nathan Terry to the McCracken County team. He has 11 years of banking experience. He began his banking career in 2006 in Missouri as a teller. BANK SHOTS! FACEBOOK @kybankers
1. Your debit card portfolio typically provides your institution with its 2nd largest source of non-interest income behind NSF/OD revenue. Maximizing this income is often an overlooked opportunity to increase DDA profitability. 2. EFT Processors have the ability to negotiate a term incentive agreement with card brands and are happy to do this for you. Negotiating your own agreement (not a 3rd party agreement) will result in more direct benefits for your institution. 3. A card brand agreement independent of your processor (and term) will allow flexibility of movement when selecting new partners. 4. A direct agreement with the card brand may include their assistance with card marketing, customer acquisition, program profitability tools and income to spend with any 3rd party, not just your processor. 5. A direct agreement will include access to the card brand, a world-wide provider of payments in every market, every delivery channel. Receiving payment industry information directly from the brand will help drive your Payment Strategy planning for digital, tokenization and biometrics. Remember, the best interest of each party involved in a decision is included in the result. By eliminating one party (the processor) you will likely realize a better bottom line benefit. Have questions? Want to know how to optimize your benefits from your brand incentive agreement? PRI can help! Please contact Bill Zumvorde at (513) 834-8832, (800) 5762374, or wzumvorde@profitresources.com. A complete description of PRI’s Bottom Line Solutions is available at: http://profitresources.com/solutions.pdf. They know how to properly utilize and maximize returns from your established income generating tools, as well as implement new tactics that will revitalize your revenue strategy and positively affect the bottom line. Their methods generate proven results and they have always guaranteed improvement of at least three times that of their fee. For additional information, contact Selina Parrish at the KBA (502) 736-1282 or sparrish@kybanks.com KENTUCKY BANKER | PAGE 25
KBA INSURANCE SOLUTIONS ISSUE
What’s it Like to Work with your Son/Dad? Chuck and Brandon Maggard Speak to their Experience
As you read in their KBA Insurance Solutions profiles, and more than likely you have met them, Chuck and Brandon Maggard don’t just have an employer/employee relationship, they are father and son. They share a love of golf, family, their jobs and their customer’s concerns. Here is a look at something they also share: they truly enjoy working with each other.
that made him stand out on the basketball court in high school. Those of you that watched him play would agree. How did you come to work for your dad?
Brandon: I was working at a State Farm agency selling insurance in Owensboro at the time. It was my first job out of school and I had been there for about 3.5 years. My wife is from the Louisville area and we were getting married How did your son Brandon come to work for you? in the summer of 2012, so I Chuck: Brandon was working in the State Farm system and knew that I needed to get a was about ready to get his own office. He felt he needed job in Louisville. I had been some additional business-to-business experience first, and interviewing for jobs in LouI needed some help at the time. I offered him a job and he isville for a couple weeks and took me up on my offer. We haven’t looked back. He is a had an offer sent to me for me to sign and begin work true asset to me and to our bankers. the next month. Right before I was going to accept this job What’s it like to work with your son? offer, dad called and said Chuck: It’s been fantastic. He’s made it easy since he’s such “why don’t you come work a hard worker. We work well together because we’re both for me.” I thought “this is a win-win situation, I can stay extremely competitive, and team-oriented. in insurance, which is what I know, and I get to work for What do you most admire about Brandon? my Dad.” It doesn’t get much Chuck: His short game on the golf course – just kidding. better than that in my book. Really, it’s his congeniality, passion, work ethic, his always being a team player. Interesting enough these are all traits What’s it like to work with your dad? Brandon: I know everyone would say that it’s been great, but I can honestly say that it was the best decision that I’ve made in my short career. We have always been close and I feel that we have become closer since I came to work for him back in 2012. We are both very similar in that we are very competitive and want to work hard to be successful in all things that we do. What do you most admire about your dad? Brandon: I admire his integrity in every situation, his work ethic, and most importantly, how important his family is to him. He instilled in me and my siblings how important priorities are and has been the best possible example for his children. PAGE 26 | KENTUCKY BANKER
SEP/OCT 2017
KBA INSURANCE SOLUTIONS ISSUE
YOUR KBA BENEFIT & INSURANCE SOLUTIONS TEAM (L to R): Audrey Whitaker, Brandon Maggard, Chuck Maggard, Lisa Mattingly and Donna McCartin
Learn more about this and other innovative ideas from Anthem Blue Cross and Blue Shield. Call your broker or Anthem Sales representative.
Now there’s a better way to help keep employees healthy. And help keep health care costs down. Anthem Blue Cross and Blue Shield is reinventing how health care works. Some of the most important work doctors do happens between appointments. But the standard fee-for-service model doesn’t pay for it. We created Enhanced Personal Health Care to do more than pay for doctor visits. It pays for positive results. Plus, our technology gives doctors the tools and information they need to better manage health, avoid redundant care, and help your employees stay healthier, happier and more productive.
Anthem Blue Cross and Blue Shield is the trade name of Anthem Health Plans of Kentucky, Inc. Independent licensee of the Blue Cross and Blue Shield Association. ANTHEM is a registered trademark of Anthem Insurance Companies, Inc. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association. 45844KYEENABS 04/17
MORTGAGE LENDING SCHOOL NOVEMBER 6-10, 2017 PART I The Stages of Mortgage Lending This comprehensive course consists of three modules: 1) Origination, 2) Processing and 3) Underwriting. Part I emphasizes the roles of originator, processor, and underwriter as a loan application follows each stage; this course provides a foundational knowledge of these early steps. Additionally, this course provides a common framework for mortgage lending, bringing the participants together in a mutual understanding of the functions in loan production, connecting each stage of the cycle.
PART II Advanced Mortgage Lending During the one and a half days of Part II of the KBA Mortgage Lending School you will learn about the risk inherent in mortgage lending operations and how that risk can be measured and managed. In addition, you will look at profit potential in the production, servicing, and selling of mortgage loans. You will also learn how those profits can be enhanced by efficiencies or diminished by inconsistent operating policies. Emerging technologies will be discussed to see the role automation plays in increasing productivity.
CONTACT Paula Cross pcross@kybanks.com 502-736-1276
Indiana Wesleyan University Louisville Education & Conference Center 1500 Alliant Avenue, Louisville, Kentucky
Tom Hughes has been labeled a “visionary� in the mortgage industry. His 39 years in banking, with a specialization in the secondary market, gives him an unusually broad base of experience. Mr. Hughes is co-founder and a managing partner of Bankers Mortgage Consulting, LLC, as well as a founding partner of Mortgage Insource Services. He holds Bachelor of Arts and Master of Science degrees from Western Kentucky University and is a graduate of the School of Mortgage Banking. Middleton Thompson began her mortgage career in 1979 as an Assistant Branch Manager of a Mortgage Company in Columbus, OH. In 1980 she moved to Lexington, KY to take a position with Kentucky Mortgage where she became the head underwriter until 1988. In 1994 she established Outsource Mortgage Consultants (OMC), which began as a one-person quality control, training and consulting company.
Deanea Wells began her mortgage career in 1992 as a mortgage loan processor for a community bank in Glasgow, KY. Within 5 years she was promoted to the underwriter for the secondary market operation. In 2002, she accepted a position as VP of Mortgage Lending for a community bank overseeing secondary market origination, processing, and underwriting functions. In 2013, she began underwriting conventional and government loans for an area community bank. Chip Clements joined Forcht Bank in August 2015 as Executive Vice President of Mortgage Lending & Servicing. Prior to that role he held similar positons at Republic Bank & Trust and New Equity Mortgage. His specialty is in leading divisional start-ups or turnarounds of troubled institutions. His areas of expertise include: mortgage & consumer lending, credit cards, indirect auto, correspondent mortgage lending, loan servicing, technology implementation and sales. Sherri Wagerman is a Senior Account Manager for Mortgage Guaranty Insurance Corporation (MGIC) and the Chairman of the Education Committee for the Mortgage Bankers Association of Kentucky. Sherri has been a part of the mortgage business since 1978. She worked as a processor, closer, loan officer and Sales Manager prior to working for MGIC.
Shelly Werner has been in the mortgage credit industry since 1991 when she started with an Equifax affiliate. She was with them for 17 years. She then went to work as a HUD certified credit counselor for The Housing Partnership for almost 2 years. She has been with CBCInnovis since 2010 and covers Kentucky and Indiana for them selling merged credit reports, floods, and Data verify 4506t and fraud service tools.
KBA EDUCATION ALLIANCE
KBA Essentials of Banking School December 4-8, 2017 This school is specifically designed for... The New Bank Employee This new bank employee may have a college background, however, they are new to the industry; they will benefit from a program that introduces them to banking from a management perspective. The Experienced Bank Employee This experienced bank employee is someone who has been with the bank for several years and has not had the time or opportunity to take advantage of banking education programs.
The Bank Employee on a Career Track This career track bank employee is someone who plans to attend the KBA General Banking School but needs the prerequisite training courses in Accounting, Money and Banking, or Principles of Banking. Successful completion of the Essentials of Banking School satisfies these prerequisite requirements. Mark Your Calendar 2018 KBA General Banking School June 3rd through June 8th
FOR MORE INFO CONTACT Paula Cross at the KBA (502)736-1276 or pcross@kybanks.com Or visit www.kybanks.com and click on the Education Alliance icon
When it comes to the banking industry, KraftCPAs has the bases covered. Serving the banking industry for more than 50 years. Contacts: Beverly Horner Member Financial Institutions Team 615-346-2431 Gina Pruitt Member Risk Assurance & Advisory Services 615-782-4207
Michael Davis Member Financial Institutions Team 615-346-2487
external & internal audit compliance reviews SOX documentation & testing tax planning & compliance loan reviews & grading systems employee benefit plan audits merger/acquisition assistance valuation services
- FFIEC audits - risk assurance & advisory services -
IT risk assessment & audits enterprise risk management (ERP) social engineering forensic accounting network vulnerability & penetration testing
www.kraftcpas.com
RESOLUTION Hancock Bank and Trust Company J. Stephen Emmick WHEREAS, The Board of Directors of Hancock Bank and Trust wish to honor the service and memory of our friend J. Stephen Emmick who was born into Eternal Life on July 6 2017, and WHEREAS, J. Stephen Emmick ably served on the Board of Directors from January 21, 1982 to December 31, 2012 and; WHEREAS, his vast knowledge, loyalty, calm demeanor, and exemplary leadership skills contributed significantly to the growth of Hawesville, Lewisport, and Hancock County; WHEREAS, his personal integrity, generous spirit, and public service, leave a rich legacy, and; BE IT RESOLVED, by the Directorate of Hancock Bank and Trust along with its officers and employees wish to provide our condolences to his beloved family and many friends. BE IT FURTHER RESOLVED that copies of this resolution, appearing permanently in the official minute book of the Bank; be provided to the family of J. Steven Emmick, the Kentucky Bankers Association, and the News Media
Adopted this 17th day of July 2017
Bentley Badgett II Chairman
Danny Coffey Chief Executive Officer
How to Respond to an Order of Garnishment When the Only Funds in the Account Are Exempt from Garnishment by Molly E. Rose The recent Kentucky Court of Appeals decision of Deal v. First and Farmers National Bank, Inc., 2017WL 1193175 (Ky. App. 2017) details how banks are to handle garnishment orders when there are conflicting federal and state laws. Molly E. Rose
Cindy Deal (“Ms. Deal”) obtained a judgment in the amount of $64,000 against her ex-husband, James Deal (“Mr. Deal”). As part of her post-judgment collection efforts, Ms. Deal’s attorney deposed Mr. Deal, and discovered that Mr. Deal held a deposit account at First and Farmers National Bank (the “Bank”). Accordingly, Ms. Deal sent a garnishment order and AOC 150.1 form to the Bank. However, the Bank responded that it did not have any of Mr. Deal’s money or property. The conflicting information was a result of the nature of the funds; they were federally protected from garnishment because they were either from veteran’s or social security benefits. Ms. Deal then filed a separate action against the Bank for returning a garnishment order with fake and misleading statements, based on Kentucky’s garnishment statutes. The Bank responded by claiming that federal statutes preempted Kentucky’s laws, and that no disclosure was required. The Court first addressed if federal law, requiring protection of certain funds, preempted state law, requiring any funds be turned over. Kentucky’s garnishment statutes require that banks identify any money belonging to the judgment debtor and turn it over to the garnishing party. Conversely, federal law prohibits financial institutions from releasing federally protected funds, even if served with a garnishment order. In the case at hand, the Court held that federal law preempts Kentucky’s statutes, if the account holds federally protected funds. The Court further held that the Bank’s review is to be deemed “conclusive” and that “the Bank’s review is to be performed without judicial oversight.”
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The court next considered whether the Bank was required to identify that Mr. Deal maintained an account. Kentucky’s garnishment statutes require a financial institution to identify if they are in possession or control of property belonging to the judgment debtor. Federal law, on the other hand, does not. As the Court noted, “The federal regulations neither explicitly nor implicitly suggest that it is a violation of federal law for the financial institution to respond to a garnishment order with information as to the amount of funds its hold, even if the funds are exempt, so long as the financial institution does not impair the account holder’s access to the funds.” Recognizing that Kentucky’s statutory requirement of disclosure does not conflict with the corresponding federal laws, the Court ruled that the Bank should have disclosed Mr. Deal’s account to the judgment creditor. The Court did agree with the Bank’s contention that the AOC-150.1 form was deficient in that it does not contain an appropriate space to disclose the financial institution is holding protected funds, but held that the form is provided as a convenience to the garnishee. It should not be used by financial institutions if it causes the financial institution to submit incorrect or incomplete information in violation of the garnishment statutes. In sum, the Court has made clear that financial institutions must unilaterally determine if funds are federally exempted from execution. Further, they must alert judgment creditors to the presence of an account, regardless of whether the AOC provides the proper form to respond or the funds are federally protected. M&P is a leading banking and finance law firm representing financial institutions, businesses and individual clients throughout Kentucky and Indiana.
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RESOLUTION OF THE BOARD OF DIRECTORS OF HERITAGE BANK AND HERITAGE BANCORP INC., BURLINGTON, KENTUCKY Dr. Herbert R. Booth Director WHEREAS, the Board of Directors wishes to acknowledge the 27 years of service given by Dr. Herbert R. Booth to Heritage Bank and Heritage Bancorp Inc. and; WHEREAS, Dr. Booth served as a founding Director of Heritage Bank from 1990 until his retirement on June 21, 2017 and; WHEREAS, Dr. Booth served the Bank and Holding Company and the Boone, Campbell, Grant, Kenton and Pendleton communities with sound business judgment, loyalty, wisdom, integrity and dedication and; WHEREAS, the Board of Directors wishes to express our respect and gratitude to our friend and colleague, Herbert R. Booth for his contributions to Heritage Bank and Heritage Bancorp Inc. and hereby name Dr. Herbert R. Booth as Director Emeritus and; NOW THEREFORE BE IT RESOLVED that the Board of Directors of Heritage Bank and Heritage Bancorp Inc., acting on behalf of all officers and employees of Heritage Bank and Heritage Bancorp Inc., hereby acknowledges and recognizes Herbert R. Booth for 27 years of leadership and; BE IT FURTHER RESOLVED that a copy of the RESOLUTION becomes a part of the permanent records of Heritage Bank and Heritage Bancorp Inc. and be presented to the Kentucky Bankers Association for publication as a reminder to all of Heritage Bank and Heritage Bancorp Inc.’s appreciation for his service.
This Resolution was unanimously adopted by the Board of Directors of Heritage Bank and Heritage Bancorp Inc. on June 21, 2017.
Chris Caddell Chairman of the Board
David Wallace Legal Counsel
Gary C. Griesser Director
Dan Catalano Director
Arnold Caddell Vice Chairman of the Board
Larry Burcham Director
Robert Lightner Director
Gary Wilmhoff Director
H. Lytle Thomas President / CEO
Verne Epperson Director
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KBA INSURANCE SOLUTIONS ISSUE
Using External Email Indicators to Help Protect Your Bank [E!] by Craig M. Collins, President, Financial Service
Phishing emails are nothing new to the banking industry. Consumers falling victim to phony emails purporting to be from their bank is a common occurrence. Now, thieves are getting more creative by targeting bank employees rather than customers. Everyone receives many emails every day, and unfortunately, we are not able to take the time to thoroughly examine every one that we receive, especially if we believe that it is from an internal source. Because of this, employees are often mistakenly providing sensitive information to criminals without even realizing it.
Should they receive an email that looks like it’s from an internal source but has the external indicator, it will alert them of the probability that it is unsafe.
Costs and ease of installation of the external indicator will vary depending on the type of indicator, but could prove One of the latest phishing scams involves what looks like to be a worthwhile investment. In fact, some email sysan internal email, but is really from someone outside of tems already have the capability to implement an external the bank impersonating an employee. For example, an email indicator through the creation of a “transport rule,” employee may receive: which can be added at little to no cost. Adding an external indicator has proven to be effective in efforts to defend 1. An email from the HR department asking for payroll against malicious emails by alerting employees of an email information. coming from an external source. Even the most diligent 2. A ‘rush’ request from a bank officer to approve a and thoughtful employees can make mistakes, and the exwire transfer. ternal indicator can offer an additional layer of protection 3. A notice from the IT help desk indicating an immefor your bank. diate password change is required. These emails look legitimate. They have the bank’s email format, extension or other identifiable characteristics. However, upon closer inspection, there are subtle signs the email is a fake.
External Email Indicator [E!] In addition to training bank employees to look out for phishing clues such as an unofficial “from” address, a request for immediate action or a generic greeting, banks can also employ another tool to help employees recognize fraudulent emails. An “external email indicator [E!]” can be activated to an existing email system. When external emails are delivered, there will be some type of indication, such as an “[E!]” in the subject line, that alerts the employee that the email is coming from an external source. SEP/OCT 2017
About OneBeacon Financial Services OneBeacon Financial Services offers property and casualty coverages for commercial banks, savings banks and savings and loan institutions, security broker- dealers, investment advisors, insurance companies and credit unions. Specialty coverages, including professional liability, trust errors & omissions, cyber liability and financial institution bond are additionally available for institutions with less than $3 billion in assets.
Contact Us To learn more about how OneBeacon Financial Services can help you manage your unique risks, please contact Craig M. Collins, President, at ccollins@onebeacon.com or 952.852.2434. VISIT onebeaconfs.com KENTUCKY BANKER | PAGE 33
KenBanc Cup Crowns a New Champion
Congratulations to the winners of the 2017 KenBanc Cup held at Valhalla Golf Club. Pictured below Chuck Maggard, KenBanc Insurance Services President and CEO (second from the left), awards the KenBanc Cup (left to right) to Steve Cox, Lisa Mattingly, Greg Dawson and Lou Moore. The team of Jared Topmiller, Bill Luttrell, Tom McFarland and Dustin Frazier finished in second place. I had an awesome experience and greatly appreciate the first class event you put on! Dustin Frazier, VP, First Community Bank
KENTUCKY BANKERS ASSOCIATION
BANK SHOTS! #kbabankshots
SHIRLEY RILEY
Community Trust Bank announced Shirley Riley was hired as Assistant VP/Branch Manager of the Lexington Beaumont Centre office. Her job includes providing consumer, residential, and commercial lending options.
SHERRIE KRUSE Wilson & Muir Bank & Trust announced Sherrie Kruse has been hired as Vice President and Loan Officer. She has worked in banking for over 40 years.
Central Bank Pays $600,000 For State Fair Prized Ham to Donate to University of KY Luther Deaton Jr., chairman and president of Central Bank, paid $600,000 for the 2017 Kentucky State Fair’s Grand Champion Country Ham. Deaton said the money from the purchase will go to programs at the University of Kentucky, among other charities.
Children’s home, and also Kentucky Community and Technical College.” It’s the first time Central Bank has won the ham. Asked by the CJ what he intends to do with the ham, Deaton said he plans to give it to Joan Kincaid, the owner of Central Bank. “I’m gonna let my owner have it for Christmas. Joan Deaton (pictured below) told the Cou- Kincaid will get that ham. I go to her rier-Journal: “UK is very close to us and home every Christmas Day before I our bank and it’s the flagship of the go up into the mountains to visit my state and we do a lot for them, they do mom’s and dad’s grave and she fixes me a lot for us. We’re gonna give it to UK a big ham breakfast with all of the trimathletics, UK Gatton School of Business, mings and we’re gonna eat that ham for we’re gonna give it to UK Hospital, we’re breakfast.” going to give it to God’s Pantry, Sunrise
JAMES JOHNS Wilson & Muir Bank & Trust announced James Johns has joined the St. Matthews Office as Branch Manager and Lending Officer. He is a native of Louisville and a 23-year banking veteran.
DANA HOWARD Community Financial Services Bank hired Dana Howard to their Marketing team. She has 11 years of experience in marketing and social media for business and education. BANK SHOTS! FACEBOOK @kybankers
KENTUCKY BANKER | PAGE 37
KBA INSURANCE SOLUTIONS ISSUE
“Timing is Everything”
Sometimes it is the only explanation for a reversal of otherwise tranquil times. by Craig Vermost, Senior Vice President Lee & Mason Financial Services
for titled collateral such as vehicles) did not need revisiting as there were little to no existing issues in that space.
The phrase “timing is everything” has been used in lyrics to describe the start of a new relationship and to rejoice an unexpected windfall. But, sometimes it is the only explanation for a reversal of otherwise tranquil times.
Fast forward to July 27th and the news headlines featured the story that Wells Fargo & Company planned to remediate 570,000 auto loan customers who may have been harmed because of Lender-Placed Collateral Protection Insurance (CPI) placed between 2012 and 2017.
The financial crisis that began in 2008 resulted in copious foreclosures, lawsuits and general distress. It was also the genesis of the Consumer Financial Protection Bureau (CFPB), significant revisions to both the Real Estate Settlement Procedures Act (RESPA) and Truth in Lending Act (TILA), numerous national class actions accusing mortgage servicers of taking kickbacks from residential insurers and ultimately, wholesale changes to the lender-placed insurance process.
The refunds are expected to exceed $64 million combined with another $16 million of account adjustments. Most alarming, is the admission that almost 20,000 customers suffered repossession of their vehicles as a result of the CPI cost.
Because of the Wells Fargo news, Lender Placed CPI is now back in the spotlight. At the NAIC Summer National Meeting August 6 – 9, the Property and Casualty Committee Previously, the National Association of Insurance Commis- agreed that the working group should draft a new Lendsioners (NAIC) created a working group to address lend- er-Placed Mortgage Insurance Model Act and review, and er-placed mortgage insurance rates and terms. The goal possibly amend, the Lender-Placed CPI Model Act. Timing was to ensure that insurance rates were sufficient, yet not is everything….. exorbitant and the relationship between the lender and insurer were free of financial irregularity. On July 6th, the Based upon initial reports, the NAIC Model Act may inNAIC voted to create a Lender-Placed Mortgage Insurance clude the following changes; Model Act and to review the current property model for any needed reforms. - Eliminating compensation to mortgage servicers and affiliates in the guise of commissions, reimbursements and below-cost services - Exclude tracking fee expenses from the insurance policy rates - Make insurance rates subject to annual revision based upon carrier loss ratios
At the same time, the NAIC decided that a Lender-Placed Collateral Protection Insurance (CPI) Model Act (coverage PAGE 40 | KENTUCKY BANKER
- Increase data reporting requirements to include the amount of lender-placed activity or penetration within a loan portfolio SEP/OCT 2017
KBA INSURANCE SOLUTIONS ISSUE
Needless to say, the pending NAIC Lender-Placed Mortgage Insurance Model Act and Lender-Placed CPI Model Act could significantly alter the current and relatively settled landscape. If that were not enough, on August 8th Wells Fargo Bank again made headlines by announcing the discovery of issues involving Guaranteed Asset Protection (GAP) refunds in some states. GAP protects a lender against the difference between the loan balance and voluntary insurance carrier physical damage settlements in the case of a total loss or unrecovered theft.
• Americans will return 3.36 million leased cars and trucks this year, another jump after a 33 percent surge in 2016. The numerous used car value tribulations have led to GAP rate increases, coverage limitations and the exit of carriers from the market. The continued decline in used car values looks certain for the near future which can only lead to additional difficulties in the GAP market. A recent Wall Street Journal article announcing the examination of GAP by the CFPB and Office of the Comptroller of the Currency (OCC) is sure to complicate an already tumultuous situation. Regulatory reviews are sure to follow at other lenders and internal controls around GAP refunds will be a topic of Compliance Committees for some time.
If a borrower pays off their car loan early, the lender is required under state law in Alabama, Colorado, Indiana, Iowa, Maryland, Massachusetts, Oklahoma, Oregon, and South Carolina to refund the unused amount of the GAP premium to the customer. Timing is everything…. Beyond the obvious regulatory compliance issues associated with GAP, the market is struggling with the precipitous decline in used car values. Per the 08/11/17 Labor Department Consumer-price index data, used car values dropped in July to the lowest level since 2009 when the Car Allowance Rebate System (CARS) known as “Cash for Clunkers” officially started. The cause of this drop is a result of many factors; • Auto sales were down almost 6% year over year in June 2017 for the three major US manufacturers. • New vehicle incentive average was $3,550, soaring almost 10% year over year. • June 2107 average new vehicle loan term extended to a record 69.3 months, nearly 7% longer than five years prior. • Average amount financed in June increased to $30,945 representing over 17% increase from five years prior. • Off lease vehicle returns doubled since 2012 and is set to rise another 25% over the next 2 years.
SEP/OCT 2017
About the Writer Craig Vermost is Senior Vice President with Lee & Mason Financial Services, Inc., a MGA specializing in collateral protection insurance and related products for financial institutions. He graduated from the University of Iowa with a Bachelor in Business Administration and earned the Chartered Property and Casualty Underwriter designation. He has authored multiple articles on collateral protection insurance and lives and works in Louisville, KY.
KENTUCKY BANKER | PAGE 41
KENTUCKY BANKERS ASSOCIATION
Do We Finally Have a Better TRID? by Victoria E. Stephen, Compliance Alliance
On July 7th the CFPB finally issued its much-anticipated final rule amending various parts of the TILA-RESPA Integrated Disclosure Rule. Clocking in at 560 pages, the final rule clarifies a variety of issues that have been thorns in the sides of lenders across the country for two years now, but it also leaves much to be desired.
The final rule is effective October 1, 2017 but compliance isn’t mandatory until October 1, 2018. During this year-long optional compliance period, the bank can comply with the changes all at once or phase in the changes one at a time, even within the course of a single transaction. Despite this flexibility, the bank cannot phase in certain parts of the final rule in a way that would violate existing rules, though. For example, the bank can’t provide a Good Faith Estimate followed by a Closing Disclosure for a transaction secured by a cooperative unit because the current rule requires that disclosures on the Loan Estimate also be included on the Closing Disclosure. Tolerances for the total of payments The first of the substantive changes is the addition of a tolerance provision to the Total of Payments that parallels the finance charge tolerance. Generally, the Total of Payments disclosure will be considered accurate if it is understated by no more than $100 or overstated at all, although this varies some based on the type and status of the loan. Privacy and sharing of information The CFPB noted that “it is usual, accepted, and appropriate” for the Closing Disclosure to be provided not only to consumers and sellers, but also their real estate brokers and other agents. The new rule clarifies that the bank may provide separate disclosures to a borrower and seller if state law prohibits sharing this information, as well as in any other situation where the bank chooses to provide separate disclosures. Cooperatives This change is probably the most straightforward. Cooperative units will now be subject to TRID regardless of whether they are considered real property under state law. If you recall, TRID applies if a loan meets three basic tests: 1. consumer purpose; 2. closed end; and 3. secured by real estate (other than reverse mortgages). The problem is that TRID itself doesn’t define real property; rather, state law does. With this change, the CFPB sought to create a uniform rule to avoid “uncertainty and potential inconsistency” in providing disclosures for cooperatives. PAGE 42 | KENTUCKY BANKER
Housing assistance lending Regulation Z provides an exemption from the TRID requirements for low-cost, non-interest bearing, subordinate-lien housing assistance loans that satisfy six criteria, and Regulation X provides a similar exemption. One of the criteria limits the costs that may be paid by the borrower without loss of eligibility for the partial exemption, and the final rule broadens these costs. Transfer taxes, recording fees, application fees, and housing counseling fees may now be paid by the borrower, and recording fees and transfer taxes are also excluded from the 1-percent cap on total costs payable by the borrower. Further, it hadn’t been clear whether the lender was allowed to provide TRID disclosures even if the six criteria of the exemption had been met. The new rule generally says the answer is yes. Assuming the loan meets the six criteria, the lender may provide either the general TIL disclosures or a compliant LE and CD, and does not need to provide the special information booklet, GFE, or HUD-1. Settlement service provider list Besides these new provisions, the final rule also clarifies several other existing areas of concern. One is whether to apply the 10% tolerance level when the bank actually allowed the borrower to shop for a service, but failed to include the service on the settlement service provider list (SSPL). The final rule allows the bank to do so as long as it actually allows the borrower to shop; if it doesn’t, then the 0% tolerance applies. How does the bank prove that it allowed the borrower to shop though? Somewhat unhelpfully, the CFPB simply says that it depends “on all the relevant facts and circumstances” in each case. As we know, if the bank wants to apply “shopping tolerance levels” to settlement charges, it has to provide an SSPL listing the services it requires and for which the borrower can shop. For example, if the bank requires lender’s title insurance and allows the borrower to shop for it, the creditor has to disclose the lender’s title insurance on the Loan Estimate, and include it on the SSPL with at least one available provider. But what about fees that the lender doesn’t require, but the title company does? The final rule makes clear that the bank is not required to provide a detailed breakdown of all related fees that are not directly required by the bank, like a notary fee, title search fee, or other administrative services needed to provide the service required by the lender. What about everything else? As important as what the final rule does clarify, however, is what it doesn’t. Yes, we’re talking about the infamous “black hole” SEP/OCT 2017
KENTUCKY BANKERS ASSOCIATION continued FROM THE PREVIOUS page
problem. Instead of tackling the really tough issues like this one, the CFPB punted and issued a new proposal to request additional comments on it instead. If you’ve been lucky enough to not yet encounter this, a timing issue arises when the bank has to reset tolerances on the Closing Disclosure, but closing has also been delayed. The new proposal would allow the bank to reset tolerances on the Closing Disclosure regardless of when closing is scheduled. The CFPB seeks comments on whether allowing this might have other undesired effects, and the deadline for submitting these is 60 days after publication in the Federal Register. While we still have to wait on a verdict for the black hole problem, there is a laundry list of other changes and clarifications that are worth reviewing in the final rule, including Calculating Cash to Close calculations, construction loan disclosures, escrow closing notices, partial payment disclosures, and several technical corrections.
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ABOUT THE WRITER Victoria E. Stephen, Associate General Counsel Compliance Alliance, KBA Partner Victoria E. Stephen serves as Associate General Counsel for Compliance Alliance. While receiving her Bachelor of Business Administration in Banking Finance from the McCombs School of Business, Victoria worked in both deposit and lending services. She continued her interest in financial services at the University of Texas School of Law by focusing on secured transactions, taxation, contracts, and corporate governance. Victoria has since worked in corporate tax law, mergers and acquisitions, and performed legal research on a range of regulatory issues.
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JIMMY WORKMAN
Community Trust Bank announced Jimmy Workman has been promoted to Vice President, Corporate Information Security Officer (CISO). Workman has worked for Community Trust Bank for four years.
TINA M. JOHNSTON United Bank & Capital Trust Co. announced the promotion of Tina M. Johnston to Senior VP, Controller. She has been with United Bank for 40 years.
STEPHANIE CARON-GILLIS United Bank & Capital Trust Co. announced the promotion of Stephanie Caron-Gillis, CPA to VP, Director of Accounting. Caron-Gillis graduated Magna Cum Laude from WKU.
KENTUCKY BANKERS ASSOCIATION
Inez Deposit Bank names Mullins President & CBO
Inez Deposit Bank recently named 53-year old Kevin R. Mullins President & Chief Banking Officer as the company is laying the groundwork for technological and organizational initiatives. “Kevin has an extraordinary amount of knowledge and experience related to the infrastructure, finance, lending, and operational side of a bank,” said Chairman and CEO Robert M. Duncan. “He joins us with the experience to assist with moving our bank forward.” Mullins’ breadth of knowledge of the banking industry lies primarily in his roles as Chief Financial Officer at two financial institutions over a span of 20 years in Kentucky. Mullins also served as Chief Operating Officer at one institution in Tennessee and most recently served as President & CEO for a bank in Kentucky. Mullins was often called on to assist in the development and expansion of operations systems and a financial framework. As CFO, Mullins was also responsible for developing an incentive program, internet service, and a financial management system that tested results before implementation of new policies and processes. He designed and managed an investment portfolio, which grew to $150 Million in assets under his guidance. “The past has given me a tremendous opportunity to become an integral part of growth, technology, and operations,” Mullins said. “It has been a particularly challenging environment for banks since 2008 and I look forward to help position our bank for strategic initiatives that will improve our service to existing and prospective customers.” After graduating from Campbellsville University in Campbellsville, KY. with a double major in business administration and accounting, Mullins joined First & Farmers Bancshares of Somerset, KY.
MARY CLINTON THOMAS Mary Clinton Thomas was promoted to Vice President, SEC Accountant for Farmers Capital Bank Corp. Thomas became a licensed CPA in 2013 and the SEC Accountant in 2015. BANK SHOTS! FACEBOOK @kybankers
Kevin and his wife Marilyn, have two daughters, Julia Grayson Mullins (Age 22) and Taylor Danielle Tate (Age 24). Kevin is looking forward to becoming active in the communities that Inez Deposit Bank serves and has many years of experience working with community-based organizations. KENTUCKY BANKER | PAGE 45
KENTUCKY BANKERS ASSOCIATION
CUB Remodels Lanes
Citizens Union Bank recently completed a total remodel of their Owenton, KY branch’s drive-thru lanes. The photo includes bank officers and employees at the ribbon cutting held at the end of August.
We’re Pleased To Announce Farris Marcum’s Promotion To Vice President. For more than eight years, Farris Marcum has distinguished himself as a loan officer, blending crafted loan solutions for our customers and delivering responsive, impeccable loan service. He has been promoted to Vice President. Farris is also active in our community. He serves as the Lincoln County Coroner and was recently named to the Kentucky Coroner’s Association Board of Director.
www.pbkbank.com Hustonville Stanford Junction City Danville Mt. Vernon (606) 346-4911 (606) 365-7098 (859) 854-3100 (859) 238-2265 (606) 256-2265 (606) 365-3505
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BETTY DARNELL
Community Financial Services Bank promoted Betty Darnell Assistant Vice President to Vice President. This promotion was unanimously approved by the CFSB Directors.
CATHERINE LANIER The Murray Bank announced the hiring of Catherine Lanier as their new Human Resources Coordinator.
DAVID DARNELL Community Financial Services Bank welcomes David Darnell to the McCracken County Banking Center. Darnell has 33 years of banking experience.
KENTUCKY BANKERS ASSOCIATION
Kentucky Thrift Foundation Names 2017-2018 Officers At the 23rd Annual Meeting of the Kentucky Thrift Foundation (KTF) held on June 15, 2017 at the Marriott Resort Griffin Gate in Lexington, officers were named for the 2017-2018 fiscal year. At the close of the KBA convention in September, Mrs. Kari R. Gough (top right), President/CEO at Winchester Federal Bank, Winchester, will serve as President of the KTF, and Mrs. Shanda L. Smith (bottom right), President/CEO at Blue Grass Federal Savings & Loan, Paris, was elected to serve as Vice President of the KTF. Both will also serve on the KBA Board of Directors representing thrift institutions. Mr. Ryan Steger, Area President at Town Square Bank in Mt. Sterling will complete his three-year term on the KBA board at the close of the September KBA convention.
Following the KTF annual meeting, a joint dinner was held with the Central Kentucky League of Savings Institutions where Past Presidents of the Kentucky League of Savings Institutions gather for the joint dinner and meeting of the Central Kentucky League of Savings Institutions. Those attending the dinner were: Mr. Bill Woodward, Past President of the Kentucky League in 1969, Mr. Arthur Raderer, Past President of the Kentucky League in 1973, Mr. Dennis Kirtley, Past President of the Kentucky League in 1987; and Mr. Tony Whitaker, Past President of the Kentucky League in 1988. Honorary Members of the Central Kentucky League of Savings Institutions were also present at the joint dinner. Pictured at left (L to R): Mr. Arthur Raderer, 1973 Past President; Mr. Bill Woodward, 1969 Past President; Mr. Tony Whitaker, 1988 Past President
MELANIE W. McNEILL Melanie W. McNeill, Vice President and Trust Officer at Paducah Bank, became president of the Rotary Club of Paducah. She will serve as the fifth female president in the Club’s 102 year history. BANK SHOTS! FACEBOOK @kybankers
The Kentucky League of Savings Institutions was founded in 1896 and merged with the Kentucky Bankers Association in 1995. There are currently nine thrifts participating in the Kentucky Thrift Foundation. KENTUCKY BANKER | PAGE 47
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2017 CONVENTION SUMMARY & REVIEW