KentuckyBankerMagazine-WinterDecember2018

KENTUCKY BANKER WINTER DECEMBER 2018

Y’all Goin’?

2019 Spring Conference Visiting Historic French Lick REMEMBERING BROOKS SENN Kentucky Banker Magazine Official Publication of the KBA KBA BANK SHOTS MOVING TO FACEBOOK! f @kybankers SEE PAGE 12

Bank Franchise Tax’s Impact 2018: What a Year it Has Been Timothy Schenk Joins KBA FNB Bank Has Spirit! << 2019 Annual Convention @ Greenbrier

BORN TO BE

BANKERS

Motorcycles courtesy of

Our Calling Officers are rolling every business day. Full Tilt Service combined with Powerful Products makes BBKY the leader of the pack.

Contact Todd, David, or Shawn for all your Correspondent Banking needs.

Todd Beers

David Fletcher

Shawn O’Keefe

tbeers@bbky.com 502-229-1123

dfletcher@bbky.com

sokeefe@bbky.com 502-382-0460

CENTRAL KENTUCKY REGION P.O. BOX 713 FRANKFORT, KENTUCKY 40602-0713

EAST KENTUCKY REGION 304-389-4431

WEST KENTUCKY REGION

MARK YOUR CALENDAR 2019 Spring Conference April 14-16 NEW! LOCATION NEW! FORMAT NEW! YEAR

Historic French Lick Resort, French Lick, IN

ARE YOU A VENDOR? WANT TO BE A SPRING CONFERENCE SPONSOR? Email Nina Gottes ngottes@kybanks.com

KENTUCKY BANKER MAGAZINE Published bi-monthly by the Kentucky Bankers Association

YOUR ASSOCIATION OUR COMMONWEALTH

WINTER/DECEMBER IN THIS ISSUE

The 2019 Annual Convention will be held at the beautiful Greenbrier Resort September 21-24.

2018-2019 OFFICERS Chairman Mr. David M. Bowling, CEO Citizens Union Bank of Shelbyville Vice Chairman Mr. Lloyd Hillard, Jr. Chairman of the Central & Southern KY Region, WesBanco Treasurer J. Wade Berry President & CEO Farmers Bank & Trust Co. Past Chairman Mr. Timothy E. Barnes President & CEO Hometown Bank President & CEO Mr. Ballard W. Cassady, Jr. Kentucky Bankers Association BOARD OF DIRECTORS Representing Group 1 Mr. J. Brent Bugg President & CEO, Fredonia Valley Bank Representing Group 2 Mr. J. Jason Hawkins President & CEO First United Bank & Trust Company Representing Group 3 Mr. John W. Key President Commonwealth Bank & Trust Co. Representing Group 4 Mr. Dan M. Harbison President & CEO The Farmers National Bank of Scottsville

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

Chairman’s Corner..................7 Straight Talk............................9 My Two Cents.......................10 Bank Shots Update...............12 Timothy Schenk....................13 The Peoples Bank.................14 Haberfeld.............................16 Farm Credit Watch...............17 Brooks Senn Tribute.............19 Compliance Alliance.............24 Paducah Bank.......................26 Bank Shots............................27 FNB Bank Has Spirit..............28 Dr. Woodland........................31 ON THE COVER

How long has it been since you have been to the Spring Conference? Whether you go every year, haven’t been in a while, or have never been, this is the year for you to go!

Representing Group 8 Mr. Anthony Kinder President & CEO Peoples Bank of Kentucky Representing Group 9 Mr. Andrew Jones Regional President Community Trust Bank Representing Thrifts Ms. Shanda L. Smith President & CEO Blue Grass Federal Savings & Loan Representing Thrifts Kari R. Gough President & CEO WinFirst Bank Representing Bank Size; $1B or more Mr. James A. Hillebrand, President Stock Yards Bank & Trust Company Representing Bank Size Assets at least $200M; less than $1B Mr. David W. Hobbs President, River City Bank

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 QUESTIONS ADVERTISE

jfischer@kybanks.com jfischer@kybanks.com ngottes@kybanks.com

600 West Main Street, Suite 400 Louisville, Kentucky 40202

www.kybanks.com Facebook: @kybankers

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

Paula Cross Education Services Coordinator pcross@kybanks.com

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

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

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

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

SINCE 1891

Bank Franchise Tax One Bank’s Experience

Over the past several months there has been a ton of conversation in Frankfort, and all around the State, about the Bank Franchise Tax. The KBA staff, with help from MCM, Crowe and BKD, did a fantastic job analyzing the data and comparing Kentucky’s Bank Franchise Tax structure to the rates banks pay in surrounding states and across the country. They have also done a great job of telling our story and highlighting the huge disparity between the state tax Kentucky banks pay compared to what we would pay if we were in, say, the trucking business. With the help of many community bankers all across the state they have taken that message in groups, and one-on-one to virtually every Legislator in the entire Commonwealth. Ballard and John have also testified multiple times in front of The Revenue Cabinet and various other committees in Frankfort.

While the word has been spread very effectively, I thought I would provide a personal look at how this tax disparity has impacted my bank, Citizens Union Bank (CUB), and the communities we serve. It’s no secret that like many banks around the country, CUB went through some hard times. Following the Great Recession, in 2012 and 2013, we lost money, yet we still paid over $600,000 in Bank Franchise Tax in each of those years.

(Yes, $600,000) Had we been a trucking company, we would have paid zero state tax and probably would have gotten a refund. In 2014 we started making money again, albeit at a fairly modest level. We still paid almost $600,000 in Bank Franchise Tax at an effective tax rate of over 23% and about $450,000 more than if we were a trucking company. In 2015 through 2017 we returned to a more normal income level and paid Bank Franchise Tax at effective tax rates ranging from 9.0% to over 10.0%.

In each year we paid $200,000 to $360,000 more in state taxes than if we were a trucking company. In that six-year period we paid almost $2.5 million in additional state tax simply because we were a bank.

So, how does that much additional tax impact Citizens Union Bank and the communities we serve? I can think of three: 1. DIVIDENDS First, it impacts our shareholders through lower earnings and dividends. The additional tax we paid in those six years represented about 18% of our taxable income thus lowering our stock value and reducing our capacity to pay dividends to shareholders.

WINTER 2018

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

2. EMPLOYEES Second, it impacted our employees. Despite working hard and restoring their bank to stable earnings and profitability, during that timeframe we had $2.5 million less to pay raises, bonuses and other benefits to our employees.

3. COMMUNITY Third, it directly impacted our communities. As everyone knows, community banks are often the first called when it’s time to support a community project or make a donation. We take pride in our ability to provide that community leadership and to contribute to the many worthy causes we support. Like most banks however, we have to pick our spots and be selective in the contributions we make. We would like to donate more on an annual basis and support more community organizations but with $2.5 million less to work with we had to be more selective. Also, impacting our communities is our lending capacity; $2.5 million of additional earnings and capital could support as much as $30 million in loan growth (assuming an 8% required capital level).

Loans that could potentially be made in the markets we serve.

OUTDATED Simply stated, the Bank Franchise Tax structure in Kentucky is outdated and needs to be fixed. Banks want to be good corporate citizens and pay our fair share of the state tax obligation, but, we do not want to be penalized simply for being a bank, especially when we play such a vital role serving the communities where we live and work.

“Simply stated, the Bank Franchise Tax structure in Kentucky is outdated and needs to be fixed.”

I think the Governor and the Legislators in Frankfort have heard this message and are supportive of making things right. We need to stay diligent in our efforts however, and continue to reinforce this message at every opportunity. I know the KBA staff will continue to make this a priority in 2019 and we all need to support them in every way we can and continue to tell our story in real terms and let everyone know how this impacts us all.

PAGE 7 | KENTUCKY BANKER

THIS IS AN ADVERTISEMENT

HOW THE LEASES UPDATE COULD IMPACT YOUR FINANCIAL INSTITUTION In a year of many changes, the Issuance of Accounting Standards Update (ASU) 2016-02 – Leases (Topic 842) also changed the fundamental accounting for operating leases. The intent of the new standard is to bring the impact of operating leases from the notes of the financial statements to the face of the balance sheet.

Under existing General Accepted Accounting Principles (GAAP), operating leases are generally flowed through the income statement andreported in the note disclosures. The new guidance requires the creation of a right of use asset and lease liability on the balance sheet for operating leases. By examining the changes in a little more detail, we find several items that a bank will want to be familiar with before the new guidance is implemented: • Lease term determination • Lease Obligation Liability

can elect an accounting policy to use a riskfree discount rate for all leases. The term of the risk-free rate utilized should be similar to the term of the lease.

Lease Right of Use Asset: The right of use asset is measured as follows: • The lease obligation liability, • (+) Lease payments made to the lessor at or before lease commencement, • (–) Lease incentives received from the lessor, • (+) Initial direct cost.

The right of use asset will be amortized over the term of the lease (as defined in the Lease Term section).

• Lease Right of Use Asset • Lease Expense • Re-measurement

Some details on these changes are as follows: Lease term: Under existing guidance, a lease term is from the commencement date of the lease to either the termination date, or the renewal date. An operating lease with a 5-year term, with two optional extensions for 5 years each, is considered to have a term of 5 years.

Under the new standard, the lease term has been expanded to incorporate the expected intentions of the lessee. The lease described above could have a lease term of 5, 10, or 15 years, based on the intent of the lessee at the time of the lease inception. The lease term has a significant impact on the initial measurements of the lease.

Lease Obligation Liability: The lease obligation is recorded at the net present value (NPV) of the future lease payments, measured to the expected lease term as described above.

The discount rate utilized should be the rate implicit in the lease. If there is no implicit rate, the lessee’s incremental borrowing rate can be used or, the lessee (if a non-public company)

were previously a single journal entry (debit to lease expense and credit to cash). The new standard will require entries to the following accounts: cash, operating lease expense, right of use asset, and lease obligation liability. In addition, the right of use assets will have to be evaluated on an annual basis for impairment, similar to other fixed assets.

Lease Expense: The new standard changes the way in which operating lease expenses are recorded. Each payment will result in adjustments to the lease obligation liability and the right of use asset. Operating lease expenses will be calculated based on the total undiscounted lease payments and direct cost (total lease cost). Total lease cost will be divided by the term of the lease and expensed on a straight-line basis. While the updated guidance did not change how operating lease expenses should be recognized, in many instances banks generally expensed operating lease payments as they were made. Ensuring these components are accurately reflected in the financial statements will require a tracking mechanism, such as amortization schedules and Excel spreadsheets.

Re-measurement: The lease obligation liability and right of use asset are re-measured when either the lessee changes their intent (expected lease term), or the lease is modified.

Significant impact to banks: Accounting: Accounting for operating leases will be more complex with implementation of the new standard. Generally, lease payments

Credit Analysis: In the year of implementation many loan customers with significant operating leases will experience an immediate increase in non-current assets and non-current liabilities. These changes could impact existing debt covenants on loans. As the composition of some companies’ balance sheets may change dramatically, credit analysts will need to be aware of how these changes may impact their analysis. The bank may need to develop additional or updated metrics to enhance the credit analysis of potential borrowers.

The effective date for the new guidance for public entities is for fiscal years beginning after December 15, 2018, with early adoption permitted. Effective date for non-public entities is one year later, with early adoption permitted.

For more information on how lease changes may affect you and your financial institution, please contact MCM Senior Manager John Roth at John.Roth@mcmcpa.com or 502.882.4486.

By John Roth, CPA Senior Assurance Manager 502.882.4486 John.Roth@mcmcpa.com

MCM CPAs & Advisors

www.mcmcpa.com | 888.587.1719

Expert guidance, beyond the bottom line.

SINCE 1891

2018 TOP FIVE

What a year it has been!

This is our year end issue of the Kentucky Bankers Magazine and what a year it has been! A lot has happened and I wanted to take this opportunity to summarize what I believe are the highlights:

1

Congressman Andy Barr was re-elected after a very close race with a formidable opponent. Despite her efforts, Kentucky stayed true to a candidate that has stayed true to Kentucky and we could not be happier. Congressman Barr has been and continues to be one of the strongest and most knowledgeable supporters of our industry. He understands Kentuckian’s need for vibrant and successful community banks.

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

have presented our case to various Chambers around the state and spoken to Rotary clubs. We have even had requests for interviews from an AP reporter and local papers. We take every opportunity to state our case and are pleased that it makes sense to everyone.

Of course, the biggest question we face from even our biggest supporters is “How will we pay for it?”

We frankly answer with two responses: one, if they tax the online providers of products such as Quicken loans and others, they will more than make up for the difference; and, two, they cannot afford to not address the issue as the trend of community banks closing doors or being acSenate Bill 2155 became law. This was a long time quired by M&A activity (particularly to out of state acquircoming and it doesn’t fix all of our problems, but it was still ers) will result in greater losses to the Commonwealth. more than we could have expected just a few years ago. S. Our 2018 Annual Convention was a huge success.

2155 includes more changes than I can summarize here, That was the report we heard from those who attended! but some of the most notable are: And, that was even in spite of it being shortened because • Allows QM designation for loans held in portfolio of Hurricane Florence. Charleston was obviously a good for banks >$10B in assets choice because the attendees spoke highly of it. We defi• Ends stress tests for banks >$100B in assets nitely need to go back, but hopefully without inclement • Provides some appraisal relief for smaller mortgages weather! (Good thing we gave out umbrellas.)

• Simplifies capital calculations for community banks

2

4

The real story with S. 2155 is that we expect to see most of the relief coming from the regulators. We already see significant movement resulting both from the passage of S. 2155 and from the new, more reasonable attitude in DC. This could be a gift that keeps on giving!

3

The inequity of the bank franchise tax is being recognized by our state legislators. We began speaking to our bankers, legislators, the Revenue Cabinet and the Administration in 2017 in preparation for the 2018 General Assembly. As usual, one thing led to another in Frankfort and our issue was not included in the hodge-podge of tax issues addressed. But, despite that, we have not slowed down one bit. We have polished our presentation a bit more, continued to talk to legislators, presented to the Interim banking Committee and the Interim A&R Committee. We WINTER 2018

5 Debra is back. After almost a full year without her, we

can honestly say that it is better having her back on board and ready to work diligently on behalf of you and your issues. We often say that the KBA is like a large, extended family. Situations like this make us realize that those aren’t just words!

Allow me to wish each of you a wonderful and safe holiday season. We have a lot of work ahead of us in 2019 and it will be heavy lifting on all of our parts. Between now and then get rested up for the battles ahead and have a great CHRISTmas and a Happy New Year!

PAGE 9 | KENTUCKY BANKER

UNITED IN SERVICE

Medallion Signature Guarantees What Are They and How Should They Be Used Over the past year, several member banks have asked various questions regarding Medallion Signature Guarantees.

More specifically, member banks have asked: what is a Medallion Signature Guarantee; how a Medallion Signature Guarantee should be used; how a Medallion Signature Guarantee stamp differs from a notary certificate; and what risks are associated with using a Medallion Signature Guarantee. While this article provides a general overview in answering those questions, please consult your attorney with specific questions.

What is a Medallion Signature Guarantee?

A Medallion Signature Guarantee is a “stamp” that banks and other financial institutions can secure through the Securities Transfer Agent Medallion Program (“STAMP”), one of three signature medallion guarantee programs, and its non-profit program administrator, Kemark Financial Services, Inc.

tees to such things as the MY TWO CENTS execution of mortgages, Debra Stamper EVP & General Counsel powers of attorney and dstamper@kybanks.com trust agreements. These are improper uses! If a customer requests a Medallion Signature Guarantee for anything other than the transfer of securities, do not accommodate that request.

What does a Medallion Signature guarantee?

Article 8 of the Uniform Commercial Code provides that the bank issuing the Medallion Signature Guarantee at the time of signing warrants that: 1. The signature is genuine; 2. The signer has the legal capacity to sign; and 3. Signer is appropriate person to endorse the security.

The most important thing to know is that by using your stamp, you guarantee all of the above items are backed Medallion Signature Guarantees became popular in the with your funds. If the owner of a security is wrongfully 1990s due to the increase of identify theft and fraud. As charged in reliance of your bank’s guarantee, the issuer discussed in more detail below, Medallion Signature Guar- and its transfer agent can sue you for the loss resulting antees essentially became a vehicle for securities traders from a breach of any of the bank’s warranties as signature to receive various assurances regarding transfers while guarantor. shifting nearly all of the risk to the bank issuing the Medallion Signature Guarantee.

Since these transactions involve the transfer or sale of securities, risk often ranks in millions of dollars though there For those not familiar with Medallion Signature Guaran- is typically no charge for the service. Recent cases regardtees, the stamp includes a barcode, with the security fea- ing Medallion Signature Guarantee disputes have proceedture of an invisible security compound in ink that can only ed to costly litigation and losses. You are assuming pobe read through special scanners used by transfer agents. tentially millions of dollars of risk with little to no direct The stamp requires a signature from the issuing guarantor. financial return. Proceed with caution.

When is a Medallion Signature Guarantee needed?

Medallion Signature Guarantee vs. notary certificate?

Medallion Signature Guarantees are used when an owner Simply put, the Medallion Signature Guarantee is not a of stocks or bonds, typically in certificated form, wants to notarial act. While a notary certificate acknowledges that sell or transfer securities. Medallion Signature Guarantees the person appeared before the notary and the person acare generally not needed if the owner holds the securities knowledged her/his signature, the notary is not guaranthrough a broker. It is important to note that the sale or teeing that the signer had the legal capacity to sign or that transfer of securities is the sole proper purpose for a Me- the signer was the appropriate person to endorse the indallion Signature Guarantee. Recently, companies have strument. More importantly, the notary is not putting the tried to extend the use of Medallion Signature Guaran- bank’s assets in direct risk if something proves fraudulent.

PAGE 10 | KENTUCKY BANKER

WINTER 2018

SINCE 1891

Medallion Signature Guarantees are a direct assumption of strict liability. A notary does not assume direct liability.

What are the best practices in issuing Medallion Signature Guarantees?

As seen above, Medallion Signature Guarantees carry risk.

For many banks, they are simply an unnecessary accommodation to customers. Nonetheless, for those that utilize Medallion Signature Guarantees, there are several safeguards that can reduce risks.

While there is no requirement to keep a log of issued Medallion Signature Guarantees, it is highly recommended.

The form of the log may vary from institution to institution but at minimum, the log should include: 1) the name of the customer; 2) the stock being transferred; 3) the date of issuance of the guarantee; and 4) the officer issuing the guarantee. Since the issuance of a Medallion Signature Guarantee is not a regular transaction, the log should be retained unless given a release from the transfer agent.

Safety of the stamp is vital. It should be treated like cash and locked in a vault. If the stamp were to fall in the wrong There are means for minimizing risk for each warranty.

• Warranty that the signature is genuine. Only guaran- hands, it could lead to fraud where the bank would be liatee the signature of a customer. Most banks require ble. Only authorized bank officers who have been trained that the signer is a customer for at least six months. regarding Medallion Signature Guarantees should have Even then, it is best to have the bank employee that access to the stamp. Any officer issuing a Medallion Signatypically deals with that customer verify the custom- ture Guarantee should have another trained officer review er’s identity. Always compare the signature on the the request. Regularly check the location of your stamps endorsement with the signature card on file. Require to ensure that your stamps have not been misplaced or proper identification with a driver’s license, passport stolen. or other form of trusted photo identification. Insist that the person whose signature you are guaranteeing How Can I get a Medallion Signature Guarantee Stamp? is present. Never guaranee the signature of a person Some member banks have inquired as to how to attain a Medallion Signature Guarantee stamp. If all of the previother than the actual signer.

• Warranty that the signer has legal capacity. In Ken- ous sections leave you undeterred, and you still want to tucky, make sure there is no question that the person is move forward with becoming a Guarantor, you can go to competent and eighteen years of age. If you have any http://www.kemarkfinancial.com/enrollment.html and reservations regarding the individual, do not issue the click on financial institutions. Fill out the application and order your stamping equipment. They can also provide guarantee.

• Warranty that the signer is an appropriate person to you with procedures and best practices. Additional inforendorse the security. Ask to see the certificate so that mation can be found on the FDIC website at: you can determine the manner in which the security is https://www.fdic.gov/regulations/examinations/trustregistered. Further verify the information on the cer- manual/section_11/rta_manualinternalcontrols.html tificate by requesting a copy of the person’s most recent statement reflecting the registered security. Nev- Risk versus the Reward er issue a guarantee on a blank stock or bond power. Medallion Signature Guarantees can best be summarized Make sure every field is completed. In the case where as a high-risk endeavor created by transfer agents to shift several names appear on the certificate, do not issue the risk to your financial institution. In most cases, the the guarantee unless all owners are physically present guarantee is issued with little to no direct monetary compensation. If issuing Medallion Signature Guarantees is a and sign in your presence. service you have that you are not utilizing, it may be best to follow national trends and stop the service. Medallion Issuance of guarantees to joint tenants, fiduciaries, powSignature Guarantees must only be issued with extreme ers of attorney, corporations and other forms of business caution and with multiple safeguards in place. It only takes entities carry additional risk. In any situation where there one bad guarantee to create a costly problem for your inis doubt, contact a lawyer you who is familiar with Medalstitution. lion Signature Guarantees. If you are still unsure, do not issue the guarantee. You are your own sole line of defense in reviewing paperwork and issuing the guarantee.

WINTER 2018

PAGE 11 | KENTUCKY BANKER

UNITED IN SERVICE

2019 BANK SHOTS! FACEBOOK @kybankers TAG #kbabankshots

BANK SHOTS FEATURED ON FACEBOOK We want to celebrate every bank promotion and new hire with all our members.

This is what Bank Shots is for. We only have a short space to include these in our magazine - much of the story gets missed. Where did they go to school? What branch will they be working? Where do they volunteer in their community?

For this reason, and to help build our Facebook community, we are moving your Bank Shots to the KBA Facebook page. Continue to send your promotions, new hires and employee life events to jfischer@kybanks.com and within 48 hours your Bank Shot will appear* on our page and in your feed. *The KBA reserves the right to withhold any post that the KBA Media editorial committee finds inconsistent with the mission of Bank Shots and the Association.

LIKE/FOLLOW OUR FACEBOOK PAGE To make sure you see all your bank and employee related posts, and to keep up with your Association’s community news, be sure to like our Facebook page, follow our posts and be sure to invite co-workers, associates, friends and family to like and follow our page. www.facebook.com/kybankers

NEW RESOLUTIONS POLICY

2019 BANK RESOLUTIONS Starting with the first issue of 2019, full page bank Resolutions will carry a minimal charge of $250 with the additional requirement that the submission MUST be a PDF or jpeg with a resolution of 300 dpi. Email jfischer@kybanks.com if you have any questions and/or to submit your resolution.

TO SUBMIT A RESOLUTION EMAIL jfischer@kybanks.com

PAGE 12 | KENTUCKY BANKER

BANK SHOTS!

BRIAN W. CHAVIS Andy D. Waters, President and CEO of Community Trust and Investment Company (CTIC), is pleased to announce that Brian W. Chavis has joined CTIC’s Wealth and Trust Management (WTM) team as Assistant Vice President, Relationship Officer for Retirement/Institutional Services.

As a key member of Retirement/Institutional Services, Mr. Chavis’ responsibilities include overseeing client relationships as well as the administration of institutional and retirement accounts. His office is located at 100 East Vine Street in downtown Lexington, Kentucky.

Mr. Chavis earned a Bachelor’s of Science (B.S.) degree in Accounting and a Bachelor’s of Business Administration degree in Finance (B.B.A.) from the University of Kentucky in Lexington, Kentucky. He holds his Series 7 and Series 66 designations and is licensed in life and health insurance.

Mr. Chavis is originally from Cincinnati, Ohio and currently resides in Lexington, Kentucky.

FACEBOOK @kybankers TAG #kbabankshots

WINTER 2018

SINCE 1891

BANK SHOTS!

MALLORY WINSTEAD Community Financial Services Bank (CFSB) promoted Compliance Officer Mallory (McNeely) Winstead to Loan Review Officer. Chief Risk Officer J. Michael Radcliffe said, “Mallory brings experience and knowledge of loan documentation as well as a strong credit analysis background to this vital role in our organization!” This promotion, unanimously approved by CFSB President/CEO/Chair Betsy Flynn and the Community Financial Services Board of Directors, was made to ensure client service and further secure the future of CFSB. Winstead, a class of 2002 member of Paducah Tilghman High School, graduated cum laude in Business Administration from Murray State University in August 2007. She began her career at CFSB in April 2011 serving as the financial institution’s Risk Analyst before promotion to Compliance Officer and the leader of the Loan Review/ Credit Analysis Team. Mallory has been active with Project United for the Paducah United Way. She also works with the Marshall County School District as an advisor in the 4-H’s Reality Store and Junior Achievement programs.

FACEBOOK @kybankers TAG #kbabankshots WINTER 2018

Timothy A. Schenk Joins the KBA Staff

Timothy A. Schenk has joined the staff of the Kentucky Bankers Association as Assistant General Counsel working under Debra Stamper, Executive Vice President and General Counsel. A native of Louisville, Tim has spent 12 years representing banks as a partner with Morgan & Pottinger, PSC and Wyatt Tarrant & Combs, LLP and as Senior Vice President of Litigation at Limestone Bank, Inc. Tim is a graduate of the University of Kentucky and University of Kentucky College of Law. He has a wife, Claire, and two children, Ricky and Meredith. “I am blown away with the opportunity to join the KBA family,” Schenk said. “I have admired and respected Debra and Ballard since I started practicing law. I look forward to working with, and learning from, both of them. I hope that all of our members find me to be an asset with any legal issues that may arise.”

Traditional Bank and Their Relay for Life

Team Traditional Bank swept the Montgomery County Relay for Life awards with Best Decorated Campsite, 1st place Miss-ter Relay Contestant, and most proudly, Top Non-Corporate Fundraising Team.

Led by Cherie Colvin and Trish McClain, the team raised a record $17,231.74 with six team members ranking in the top 10 individual participants including team leader Cherie Colvin, Tina Back, Dana Adamson, Josh Turley, Erin Combs and Shelia Means. Overall, the Montgomery County Relay event raised more than $75,000, exceeding its goal!

Team Traditional Bank gathers early to brainstorm for the Relay event.

From choosing a theme to creative fundraising strategies such as donor challenges, sponsorships, boxed lunches and bake sales, the hours, days and months of hard work consistently pay off with thousands of dollars raised each year.

PAGE 13 | KENTUCKY BANKER

SINCE 1891

The Peoples Bank Celebrates 115 Years of Banking In 1903, when The Peoples Bank of Taylorsville was founded, if you wanted to do your banking, you made your way to the bank by horse. Today you can pick up your smart phone, tablet or laptop and take care of many of your banking needs.

On February 2, 1903 when Dr. E.T. McMahan was employed as cashier of The Peoples Bank, he had a deposit account and a loan account to offer the bank’s customers. Today Steve Bowman, the bank’s CEO, offers online and mobile banking and a large array of deposit and loan products.

The Peoples Bank of Taylorsville was organized in 1903 by W.C. Barrickman, George A. Van Dyke, F.G. Greenwell, Edward Williams, George B. Shindler, Joseph Tucker, J.W. Hill, A.J. Offutt, Z.A. Carrithers and James B. Ashby. The Bank was later purchased by J. Chester Porter and William Porter. Former CEO’s include J.D. Brown, Eddie Pollett, Hugh Mitchell and Bill Smith.

In 1936, The Peoples Bank purchased the building they currently reside in from The Bank of Taylorsville. The Bank has done many additions and renovations over the years to have its modern day offices located at 23 West Main Street in historic downtown Taylorsville. In 1998, the Bank opened a branch bank located at 5511 Taylorsville Road, Fisherville to service the busy Elk Creek area.

Today the bank’s board of directors are; Chairman - Jack C. Porter, Larry H. Cheek, Glen Goebel, Charles Tichenor, W. Brian Porter, Maria Bouvette and Steve G. Bowman. These are people that have led the bank thru the last several years and will lead it into the future.

Although many things have changed over the last 115 years of The Peoples Bank of Taylorsville’s existence, the one thing that has not changed is the way the bank does business. It’s local people making local decisions about their customer’s needs. Our bank’s employees live here, serve on local boards, volunteer for local charities and take part in making the Spencer Co. community a better place to live.

BANK SHOTS!

NATHAN TERRY Community Financial Services Bank (CFSB) has promoted Mortgage Lender Nathan Terry to Assistant Vice President. This promotion was unanimously approved by CFSB CEO/Chair Betsy Flynn and the Community Financial Services Board of Directors. This move continues to ensure extraordinary client service and secure the future of CFSB. Nathan joined the CFSB team in March 2017.

Terry graduated from Reidland High School in 2001. After attaining a Bachelor of Science in 2005 from Bethel University in McKenzie, Tennessee, Nathan began his banking career in 2006 as a teller at a community bank in Central Missouri.

He then worked as a Mortgage Loan Processor until he transitioned to a Mortgage Originator.

Nathan and his wife, Aretta, reside in Symsonia. They have three children, Evylee, Kenslee, and Nate. They attend Symsonia Baptist Church. Nathan serves the community as a member of the United Way. He is also very active with the Paducah Board of Realtors and the Paducah Area Chamber of Commerce.

FACEBOOK @kybankers TAG #kbabankshots

PAGE 14 | KENTUCKY BANKER

WINTER 2018

Count on us…

JAMES BROWN James Brown has over 25 years of banking experience in Retail, Small Business, Corporate and Correspondent Banking.

(502) 625-9330 james.brown@syb.com

CORRESPONDENT BANKING LENDING SERVICES Holding Company Lending » Acquisition Financing (BOTH WHOLE BANK & BRANCH) » Stock Buy Back Financing » ESOP Financing » Additional Capital for Growth & etc.

Fed Funds Lines of Credit Loan Participations Commercial Credit Cards & Purchasing Cards DEPOSIT & TREASURY SERVICES DDA Accounts Fed Funds Sweeps Accounts Certificates of Deposit Wire Transfer / ACH INTERNATIONAL SERVICES Foreign Exchange (BOTH CHECKS & WIRES) Letters of Credit (IMPORT, EXPORT & STANDBY) Import & Export Advisory Services MEMBER FDIC

EQUAL HOUSING LENDER

WEALTH MANAGEMENT & TRUST Retirement Plans (401K, PENSION & MORE) Investment Management Insurance Financial & Estate Planning Trust Partnering NOT FDIC INSURED

MAY LOSE VALUE

NO BANK GUARANTEE

BancCard offers transaction authorization, processing and network services in all 50 states to businesses accepting credit and debit cards as payments for products and services.

Our strength comes from dedicated, hands-on staff with a depth of experience, industry intelligence and an extended reach.

In partnership, we are committed to driving down your risk, pushing your profitability higher and supporting your business relationships with an asset underestimated in an increasingly digital world

human contact.

www.banccard.com BancCard, 7347 Charlotte Pike, Nashville, TN 37209

Phone: (615) 352-6956 Toll-Free: (888) 741-2262 E-mail: banccard@banccard.com

UNITED IN SERVICE

Increasing Fee Income Without Raising Fees

by Sean Payant, Chief Consulting Officer, Haberfeld Over the last 10 years the banking industry has seen a steady decline in fee income associated with checking accounts – community banks under $10B have seen a 32% decline and banks over $10B have seen a 45% decline in fee income when compared to a 2008 baseline. Many institutions are raising fees.

Should you?

One option: start adding minimum balances in order to get additional income from your current customers. Following the lead of big institutions, some community banks have tried to make up fee income by instituting additional account fees with disappointing results.

This is not isolated to the banking industry; other retailers and business have tried this approach.

Case in point, several years ago, Starbucks ran a test where they required a minimum purchase in the drive-thru to encourage those wanting a $1.85 cup of coffee to come into the store. As you can imagine, the pilot-test ended abruptly – less than a month later. What Starbucks really knows is when customers come into the store they will spend more; however, creating a minimum purchase requirement was not the solution, it upset customers and hurt their image in those markets.

As community bankers, we need to look through the lens of the prospective customer. One of the primary reasons consumers switch banking providers is to eliminate monthly checking account service charges. The majority of consumers still do not want to pay for a checking account. Price matters.

In 2010 prior to the implementation of the Dodd-Frank changes related to retail debit cards and overdrafts services, an extremely profitable-midsize bank in the northwest decided to implement a $9 per month service fee on checking accounts.

Their fee income dropped dramatically and attrition went up substantially. In a public statement, the CEO ultimately stated the bank made a mistake; however, much of the damage was already done. If monthly service charges aren’t the answer, then what is?

per branch. The big banks average 3,000-5,000 per branch. If you have factories running at 30% capacity, your primary objective should be to fill the excess capacity by serving more customers.

Client data shows marginal expenses (core processor, account servicing, etc.) for the next core customer are approximately $30-$50 per year; however, each new core customer generates approximately $300-$500 in revenue each year. Excess capacity allows us to look at the each new customer as a marginal investment who can spin off multiples in revenue.

While not all customers drive the same level of fee income, it is important to create and grow primary financial institute (PFI) relationships. After analyzing millions of core banking relationships, over many years – the data shows for 73% of customers the checking account is the foundation of the relationship, creating opportunities to provide additional products and services.

Understand Risk Most financial institutions use some type of screening service during the account opening process. Banks need to understand these services only report negative information, which is rarely updated. Client data consistently shows these systems are not doing what banks think they are doing – reducing fraud. They are, in fact, reducing opportunities to grow fee income by turning away customers who value overdraft services.

What other filters are you using? Do you require a spouse to be present to open a checking account? If your organization does, you need a better process for adding joint signers after account opening. Credit scoring? Stop it. There is no viable reason to evaluate a credit score prior to opening a checking account. How many forms of ID do you require to establish a relationship? One government issued, unexpired ID should be sufficient as long as consumers can provide their Social Security number (not their Social Security card), physical address (does not need to match the address on the ID) and date of birth.

Are you in compliance or well beyond? Think through why your bank is saying no today and develop strategies to say yes more frequently.

Understand Capacity Understanding capacity is one of the biggest challenges in the banking industry. Banks have very high fixed costs and very low marginal costs. Each branch is an expensive “factory” that is running at 15%-40% capacity, 50% if you’re lucky. The typical community institution averages 1,000-1,200 core relationships PAGE 16 | KENTUCKY BANKER

Sean C. Payant, Ph.D., is Chief Consulting Officer at Haberfeld, a data-driven consulting firm specializing in core relationships and profitability growth for community-based financial institutions.

WINTER 2018

SINCE 1891

Bert Ely’s FARM CREDIT WATCH

FCS Tax Liability Almost Zero The FCS, apart from CoBank, has reached the point where it essentially is paying no income tax. For the third quarter of 2018, the FCS’s total tax liability was $18 million on pre-tax income of $1.381 billion. However, most of that tax liability was attributable to CoBank — $16.5 million on pre-tax income of $308 million, for an effective tax rate of 5.4 percent. That means the rest of the FCS had a tax liability for the third quarter of 2018 of just $1 million on $1.073 billion of pre-tax earnings, for an effective tax rate of just .09 percent! Some FCS associations reported a negative income-tax liability, which raises this question – are they getting tax refunds? The FCS does not discuss that possibility.

Also contributing to the FCS’s increased earnings this year — after-tax income for first nine months of 2018 was up 8.0 percent from the same period in 2017 — was a continuing decline in the FCS’s provision for loan losses despite declining farm income.

For the first nine months of 2018, the FCS reduced its loan-loss provision by 22 percent from the same period in 2017 despite a 19 percent increase in non-performing loans during the first nine months of 2018. The Farm Credit Administration (FCA), the FCS’s regulator, might argue that FCS institutions are adequately reserved at this time for future loan losses but a declining loanloss provision in the face of an increase in non-performing loans suggests that the loss provision should be going up, not down.

As I reported in the August FCW, it appears that some large FCS associations have not reserved adequately for future loan losses, at least relative to other, more conservative associations.

That trend appears to have continued into the third quarter of 2018. The FCA should be very concerned about that trend.

FCS Insurance Corporation renews its Treasury line of credit As I have written about in prior FCWs, in Sept. 2013 the Farm Credit System Insurance Corporation (FCSIC) obtained a $10 billion line-of-credit from the Federal Financing Bank, an arm of the U.S. Treasury. FCSIC guarantees the timely payment of principal and interest on the FCS’s outstanding Systemwide Debt Securities, which totaled $268.5 billion at Sept. 30 of this year.

This line-of-credit, which Congress has never authorized and for which the FCSIC pays not a penny, was recently renewed for another twelve months, to Sept. 30, 2019. Although this lineof-credit has never been drawn upon, it provides additional assurance to investors in FCS debt that the FCS will have sufficient liquidity to pay off maturing debt, thereby helping to maintain a tight spread between FCS debt and the Treasury yield curve.

That spread widened out in the aftermath of the 2008 financial WINTER 2018

crisis, which lessened the FCS’s competitiveness relative to bank financing for farmers.

YBS regulations to be reviewed next year According to a letter from Dallas Tonsager, FCA chairman and CEO, published in the FCA’s just-issued 2017 Annual Report, “in early 2019, [the FCA plans] to review the agency’s YBS [young, beginning, and small farmer] regulation, which was last updated 20 years ago. Through the publication of an advance notice of proposed rulemaking [ANPR], we plan to explore ways to improve services to YBS farmers and ranchers and to update [FCS] reporting requirements.” This review is long overdue, but whether it will lead to a meaningful reform of the FCS’s reporting of its YBS statistics is questionable. As I have pointed out on numerous occasions, the FCS double- and triple-counts its loans to YBS farmers. Worse, it does not aggregate YBS loans by farmer to show the total amount of credit provided by the FCS to a YBS farmer. Additionally, many loans classified as YBS loans in fact are not going to genuine farmers; instead, they are loans to folks buying rural property or purchasing farming-related equipment for a second home or a hobby farm not intended to be a genuine farming operation. It will be interesting to see if the ANPR even touches on the many obvious shortcomings in the current reporting of the FCS’s purported YBS lending activities.

CoBank — one of the world’s safest banks????

As it has in recent years, Global Finance Magazine has again listed the four FCS banks as among “the world’s 50 safest banks” in 2018; the FCS banks also are included in a companion listing of “the world’s 50 safest commercial banks.” CoBank touted its inclusion in the safest banks listing in a news release Global Finance selected these banks “through an evaluation of longterm foreign currency ratings.” The other FCS banks did not issue comparable news releases. The four FCS banks, of course, are largely funded with debt raised by the FCS’s funding arm, the Federal Farm Credit Banks Funding Corporation, which is not included in any of the lists of largest banks. The Global Finance article made no mention of the Funding Corporation nor of the fact that the FCS banks are jointly and severally liable for the debt the Funding Corporation issues. If the FCS and the FCA have no qualms about the FCS banks being called commercial banks, then perhaps the Senate Banking and House Financial Services committees should hold hearings about the activities of the FCS banks and their status as GSEs.

PAGE 17 | KENTUCKY BANKER

Lee Burrows www.BanksStreetPartners.com Matt Kennedy Direct: 404-848-8480

Main: 404-848-1571

Direct: 704-228-0557

SERVING BANKS, FINANCIAL TECHNOLOGY AND FINANCIAL SERVICES COMPANIES ACROSS THE GREATER SOUTH

CAPITAL RAISING | MERGER & ACQUISITION ADVISORY | STOCK VALUATIONS | STRATEGIC PLANNING | MUTUALTO-STOCK CONVERSIONS AND MHC REORGANIZATIONS

SINCE 1891

Brooks Senn died on September 28, having devoted most of his distinguished legal career to Kentucky’s bankers. His tenure as KBA General Counsel, from 1968 to 1996, spanned decades of tremendous challenge for our industry. The story of how they were overcome has something to teach us as we work to sustain our industry for those who will follow us.

TRIBUTE

REMEMBERING BROOKS SENN

by Marcy Cassady Few remember that Brooks Senn’s tenure as the KBA’s General Counsel began with a legal drama worthy of a feature film.

Perhaps Brooks himself did not remember at the end, illness having taken a cruel toll. But eyewitnesses, including a renowned D.C. lawyer, were still telling the story 50 years later.

Upon being appointed in 1968, Brooks took up the cause of Kentucky bankers in a long-running battle with Kentucky lawyers. Every small town had a bank in those days, but not all of them had lawyers. So banks needed to use their staff to draft simple documents like notes and mortgages. In July of ‘68, the Bar Association issued a formal opinion that any non-attorney bank employee who did so would be engaging in the unauthorized practice of law, a misdemeanor crime. Banks were facing a serious constraint on doing business.

KBA executive Ralph Fontaine asked his new General Counsel to review that opinion. Brooks returned with a memo supporting his belief that the Bar Association had misconstrued the law, which Fontaine forwarded as a Legal Bulletin to all KBA members in August. Retribution was swift. On October 10, the Bar Association filed charges against Brooks Senn for giving his clients an opinion that constituted “aid and assistance to the unauthorized practice of law for which he should be permanently disbarred.”

Brooks, a Harvard Law graduate, knew better than to represent himself. He turned to Paul Porter, head of a powerful D.C. law firm with Kentucky roots. Porter pulled in a young associate named Daniel Rezneck, a former Supreme Court clerk. In 2007, Rezneck – then in his 70’s – was interviewed as a ‘legend’ in D.C. legal circles. When asked to recall extraordinary moments in his career, he cited “a case that involved a young lawyer for the Kentucky Bankers Association.”

In the article, Rezneck recounts hearing the facts of Brooks’ case and responding, “Have you considered an action against the Bar Association under the Civil Rights Act?” There was a long silence, he said. In the heat of the civil rights movement, it hadn’t occurred to anyone in Kentucky that the Civil Rights

Act of 1964 applied to anyone being deprived of his constitutional rights under color of state law, including a white lawyer being deprived of his right to free speech in advising a client.

The beauty of a Civil Rights Act claim was that it got the case into federal court and allowed the Bar Association’s Governors to be sued personally.

Porter and Rezneck went on the offensive, filing a Complaint against the Bar Association and its Governors on October 31 in federal court, seeking a permanent injunction to prevent CONTINUED ON THE NEXT PAGE

WINTER 2018

PAGE 19 | KENTUCKY BANKER

UNITED IN SERVICE

continued: REMEMBERING BROOKS SENN them from disbarring Brooks. Judge James F. Gordon ordered that no actions were to be taken against Brooks pending a hearing on November 7.

On the eve of that hearing, the Bar Association blinked.

Brooks was handed a telegram minutes before the hearing began, informing him that the Bar Association had voted the day before to drop all charges against him. The moment was witnessed by a courtroom full of lawyers and bankers that constituted a veritable Who’s Who in Kentucky, and the person handing Brooks the telegram was renowned Kentucky criminal lawyer Frank Haddad.

Despite the last minute capitulation, the Bar Governors were treated to a scathing rebuke from the bench. Brooks walked out of the courtroom vindicated, with his banking clients out from under a crippling hardship.

An Unlikely David At first glance, Brooks Senn may have appeared an unlikely David to take on the Goliaths of his profession. He was a compact man of precise habits and effortless good manners, a man who did nothing in excess. His work evoked images of millstones that grind slowly but exceedingly fine. Ballard Cassady recalls, “When you asked Brooks for a legal opinion, you knew it would take awhile, but when he was done, you had something you could bet the ranch on.”

In fact, Kentucky bankers did wager heavily and with confidence on the legal acumen of Brooks Senn. Before being named KBA General Counsel, he had been a partner in three high-profile Louisville law firms before founding his own.

Having represented Citizens Fidelity for nearly a decade, Brooks was already in the top tier of banking attorneys in Kentucky.

To know Brooks was to trust him, so political office had come knocking early on. He was elected first as Trustee and then Mayor of Louisville’s Audubon Park, where he steered the

PAGE 20 | KENTUCKY BANKER

City through a contentious transition to sewers and coordinated disaster relief after the ‘74 tornado. In time, he was also elected Commissioner of his Indian Hills neighborhood.

The qualities that made him electable also kept him in demand as a teacher. He taught business law at Bellarmine College and headlined every financial services conference in the state for decades.

No one was surprised when Brooks was eventually honored with consideration for a federal judgeship.

But Kentucky bankers can be glad the appointment went to a more politically attuned candidate, for the KBA would have greater need of Brooks Senn than did the 6th Circuit Court of Appeals.

The First Decade: A Consigliere In the wake of the banker-lawyer turf war, Brooks was called upon to help bankers negotiate the new federal “truth in lending” legislation enacted in 1968. In an era before technology revolutionized the production of documents and forms, even a small change to the terms of a bank’s documents or notice requirements could represent a heavy expense in redrafting, reprinting and staff training. Brooks helped Kentucky’s 300+ banks through that costly and stressful transition.

Brooks also guided the KBA when a national consumer credit crunch forced bankers – at the forefront of a coalition that included homebuilders and realtors – to take aim at the interest rate caps in Kentucky’s usury laws. Higher rate ceilings in surrounding states were siphoning investment money out of Kentucky with dire consequences for its economy, a situation that is painfully familiar five decades later as Kentucky banks face internet-based competition from beyond our borders.

Brooks was alongside Ralph Fontaine during the 1970 Session, when a bill to raise the interest rate cap got stuck between GOP Governor Nunn and a Democrat House and Senate. The bill passed both chambers only to get a surprise veto threat. The rumor was that Nunn got wind of bankers

WINTER 2018

SINCE 1891

yielding to pressure to buy hundreds of $25 chicken dinner tickets for a Democrat fundraiser. Corrective action was taken posthaste. Reporters weren’t sure who ended up eating all that chicken, but none were bankers and the bill became law.

Through work on many such bills, Brooks became the authority on usury law in Kentucky. His outline of usury statutes, cases and analysis is believed to be the only one of its kind, a work of inestimable value. With characteristic generosity, he simply gave it to all attendees at a conference for banking attorneys before he retired.

By 1970, multi-bank holding companies and statewide branching were being touted as part of the solution to Kentucky’s economic malaise. The response from KBA members quickly broke along the urban–rural divide that continues to characterize Kentucky’s deepest conflicts. During the ensuing decade of failed attempts at statewide banking reform, advocates among large Louisville banks often felt the backlash in their correspondent departments.

In April of ‘72, Ralph Fontaine bequeathed those conflicts to his successor Willis Moreman. They would soon divide the KBA into factions that threatened its existence. Fortunately, Willis also inherited Brooks Senn. By then, Brooks had won the confidence and trust of bankers on all sides of the conflict, enabling the Association to maintain its importance as a legal resource in the face of growing disunity on other fronts.

The Second Decade: A Bridge Over Troubled Waters Governor John Y. Brown blew into Frankfort in 1980 on winds of change. He was armed with a study that cited Kentucky’s ban on statewide banking as a factor in its slide to the bottom of national economic rankings. By then, Kentucky was one of only 11 states with no form of statewide banking. As a result, only 5 Kentucky banks could make loans of $2M to a single borrower, as compared to 10 in Indiana, 15 in Ohio, 10 in Virginia, and 9 in Tennessee (which included the soonto-be infamous Butcher banking empire). Developers were crossing state lines to get credit needs met, often required to bring deposits with them.

Though multi-banking now had a friend in the Governor’s office, the KBA was still unable to forge a consensus on reforms. By the early ‘80’s, the divisions had spawned both a Progressive Bankers Association and an Independent Community Bankers Association (ICBA) within the KBA, creating a minefield for the KBA’s board and staff.

In the ‘82 Session, the two factions went head to head, while an avid press watched the melee and declared Kentucky banking to be at a crossroads. After the multi-banking bill

was killed by Lt. Gov. Martha Layne Collins’ tie-breaking vote in the Senate, the stakes became even higher in the 1984 Session.

By 1984, Collins had become Governor – and fully persuaded of the need for banking reform. She charged her new Banking Commissioner Ballard Cassady with supporting multi-banking. The bill passed, even after an opposed lawmaker filed charges of bribery against a bank lobbyist (who was later tried and acquitted). After his brush with disbarment, Brooks could not have expected to ever again find himself on the fringe of a criminal case with his KBA clients.

The KBA and Willis Moreman survived those Sessions, but with serious wounds. The Progressive Banker faction represented banks whose assets – and dues to the Association – dwarfed those of the faction opposed to reforms. The prospect of needing ongoing reform at both state and federal levels led to pressures for new leadership. The Board ultimately invited Banking Commissioner Ballard Cassady to lead the KBA in April of ‘86.

The Third Decade: A Man for All Seasons Ballard inherited an Association on the ropes, bitterly divided and $300,000 in debt. But its staff of five included a General Counsel with a prodigious institutional memory who had weathered the recent storms with unquestioned integrity.

Throughout his final decade in that office, Brooks Senn supplied the legal safety net as the KBA got its financial house in order and aspired to a new level of service to members.

While supporting the initial flurry of bank mergers and acquisitions, the KBA found a way to enable member banks to reduce insurance costs and started a telebanking network that was quickly sold at a profit to the ABA. By 1990, federal interstate branching legislation was in play, with the ABA pushing for no restrictions and the ICBA holding out for no changes. The House and Senate were at an impasse. But with Kentucky’s Wendell Ford as Senate Majority Whip, Kentucky bankers had a shot at shaping federal legislation.

On a Friday in mid-November of ‘91, Brooks joined Ballard in his office for a conference call with the CEO’s of banking associations in New York, Oklahoma, Nebraska and Colorado. The six of them worked out the terms of a compromise.

Brooks drafted them over the weekend into an amendment that went to Sen. Ford on Monday morning. By the time Ford presented that amendment on the Senate floor on November 14, the KBA had helped to forge a coalition of 33 states in support of the compromise, enough to get the amendment passed in the Senate. When the Riegle-Neal Interstate BankCONTINUED ON THE NEXT PAGE

WINTER 2018

PAGE 21 | KENTUCKY BANKER

SINCE 1891

continued: REMEMBERING BROOKS SENN ing and Branching Act of 1994 was enacted in the next Congress, it included the language drafted by Brooks Senn.

With federal deregulation pressuring community banks’ revenue, some new sources were badly needed. After much study, the KBA realized that the right to sell insurance was one that would benefit communities as much as community banks. The only hope of winning that right rested with the federal courts. Brooks Senn, in the final years of his career and with his son Thurman as co-counsel, waged one last mighty battle for Kentucky bankers, all the way to the U.S. Supreme Court.

At the ABA’s urging and with KBA funding, Owensboro National Bank agreed to serve as the plaintiff in a test case filed in federal court against Kentucky’s insurance commissioner. Brooks and Thurman won a summary judgment that was upheld on appeal.

When a federal appeals court in Florida reached the opposite conclusion in a case with similar facts a month later, the stage was set for persuading the Supreme Court to accept the case and resolve the conflict. With the Supreme Court’s ultimate ruling on the issue in March of 1996, the way was cleared for community banks across the nation to sell insurance. For Brooks Senn, ever the consummate lawyer, it was the perfect ending.

Twilight Months after that Supreme Court ruling, Brooks welcomed Debra Stamper as the KBA’s first in-house counsel. For a few years thereafter, he maintained an office at the KBA to help support – one last time – transition in a key KBA office. Then too, Selina Parrish kept her office stocked with his favorite chocolate.

Brooks and his wife Alice were tireless in retirement. They never missed a local concert, especially when Bach was on the program. Brooks manned the Help Ministries desk at the Cathedral every Wednesday, and they visited Portland ElePAGE 22 | KENTUCKY BANKER

mentary every week to read with children who were struggling. A news report quotes Brooks as saying, “I’ve worked with the same little boy since last year, and I like to think his reading has improved... We hope that we are giving them the impression that someone really cares.” In due course, they became doting grandparents to Allison.

Brooks and Alice had 48 years together before she died in February of 2007. Knowing that time was short, Alice insisted on having a Christmas party that December so that she could tell their many friends how each of them had blessed her life. Brooks and Thurman were at her side, lending her their strength to see it through. All present had a sense of having witnessed selflessness and grace of a rare order.

<< PICTURED AT LEFT: THURMAN SENN, BROOKS SENN, ALLISON SENN. When asked to describe his father’s most deeply held principle for this tribute, Thurman answered without hesitation, “There’s no question. As his dementia advanced, his constant question was, ‘Am I doing this correctly?’ His core principle was doing things correctly. In all things.”

Because of all that Brooks Senn and the KBA did correctly, our industry survived perilous decades. Our current challenges are no more formidable than theirs.

Whether the problem is excessive taxation or internet competition or misguided regulation, we can imagine Brooks offering the pragmatic advice to be found in a 2015 film, The Martian: “At some point everything is going to go south on you. You can either accept that or you can get to work…. You solve one problem. Then you solve the next one, and then the next.

And if you solve enough problems, you get to come home.”

Brooks Senn helped solve a lot of problems for the banking industry in Kentucky, and we trust that he is safely home.

May he rest in peace.

WINTER 2018

UNITED IN SERVICE

The Dos and Don’ts of Deposit Advertising Daniela Clark, Associate General Counsel KBA Partner, Compliance Alliance Advertising rules can be confusing. The advertising rules for banks are set out in several different regulations and overseen by several different regulatory agencies. Generally, the CFPB has been given regulating power over some advertising to consumers, including the advertising requirements under Reg DD. The FDIC governs when the FDIC logo and statement must be used.

Regulation DD defines an advertisement as a commercial message in any medium, including social media, that invites, offers, or generally announces the availability or terms of an existing or new account. A deposit account is a time, demand, savings, or NOW account, including deposit accounts opened as a condition of obtaining a credit card, foreign currency accounts, IRAs and SEPs, PODs and “Totten trusts”, and an account that is held by or for a deposit broker, if interest in the account is held by or offered to a consumer.

An advertisement may not be misleading or misrepresent the deposit agreement. It should not state that an account is “free”, “no cost”, or “fees waived” if it has any maintenance or activity fees. Maintenance or activity fees are 1) fees for not meeting a minimum balance or exceeding a number of transactions, 2) reasonably expected transaction and service fees, 3) flat monthly service fee, or 4) fees to deposit, withdraw, transfer funds, or per-check or per-transaction charges. A bank may, however, advertise that there are no deposit or withdrawal fees, if it is clear that a monthly service fee, for example, may be charged. If an account is free for a specific amount of time, it may state that it is free for a specific time.

Annual Percentage Yield must be stated at least once as “Annual Percentage Yield” and then may be referred to as APY. It also “triggers” additional terms (“trigger terms”) that must be included in the advertisement. If there is a variable rate, the advertisement should state that the rate may change after the account is opened. The advertisement should state the period of time the APY will be offered or is accurate. For example, 12% APY accurate as of 8/10/2018. Any minimum balance required to obtain the APY should be disclosed. If there are tiers, it should be included for each tier. There should be a statement that fees could reduce the earnings on the account. For time accounts, the term of the account should be disclosed and if there may be early withdrawal penalties and any required interest payouts. If the advertisement states that the APY and other terms may vary depending on the initial deposit or term, it

PAGE 24 | KENTUCKY BANKER

does not need to disclose every possible combination available.

The bank may instead disclose an example such as “For example, our 12 month certificate of deposit accounts currently pays 2.25% annual percentage yield.”

Certain advertising mediums are exempt from some of the trigger terms rules. Radio and television ads, billboards and other outdoor media, and telephone response machines are not required to disclose variable rates, time the APY is offered, minimum opening deposits, effect of fees, early withdrawal penalties for time accounts, or the minimum balance necessary to obtain a bonus and when it will be provided. For advertisements made for tiered-rate accounts through telephone response machines, the advertisement must state the APYs and the balance required for each tier. However, if it is feasible and practical to do so, it would be best practice to include all trigger term disclosures.

Indoor signs are not subject to any of the trigger term disclosures. Indoor signs are signs inside the bank. This includes advertisements displayed on computer screens, banners, posters, and chalk or peg boards but does not include brochures or computer printouts that the consumer may take with them.

It can sometimes be challenging to include all of the required disclosures in electronic advertising. Sometimes it is a digital copy of a flyer and the disclosures fit easily. Other times the advertisement may be restricted in its size, such as in a small banner advertisement. In that case, it must contain a hyperlink for additional information directly next to or within a statement regarding a term that requires additional disclosures. This is especially true for Trigger Terms.

There are also special rules related to bonuses. Regulation DD defines a bonus as a “premium, gift, award, or other consideration worth more than $10 (whether in the form of cash, credit, merchandise, or any equivalent) given or offered to a consumer during a year in exchange for opening, maintaining, renewing, or increasing an account balance. The term does not include interest, other consideration worth $10 or less given during a year, the waiver or reduction of a fee, or the absorption of expenses.” However, discount coupons, such as 50% off at a restaurant, are not considered a bonus. Discounts or fee waivers for other products offered by the bank, such as a safety deposit fee, are also not considered a bonus. Furthermore, if an item has a value of less than $10, it is also not a bonus under the De Minimis Rule. The rule states that the bank may use the IRS value standards to determine the value of items, but general items

WINTER 2018

SINCE 1891

that would be considered to be worth less than $10 are t-shirts, coffee mugs, and other small promotional merchandise. The value of items aggregate per calendar. This means that even if the item is not given at the time of the account opening, or is given throughout a calendar year and in aggregate those items have more than $10 in value, it is considered a bonus.

If a bonus is given, certain disclosures must also be given. The advertisement must also include the annual percentage yield, as well as any requirements to obtain the bonus such as time requirements, minimum balance to obtain the bonus or open the account, and when the bonus will be provided.

If overdrafts are mentioned, the advertisement must disclose each overdraft fee, the transaction categories for which a fee would apply, the time the consumer has to pay the overdraft, and when the bank will not pay an overdraft. This includes any mention of an overdraft limit or overdraft limit balance, even if it is mentioned in a periodic statement or in an automated telephone system, or ATM screen. It does not, however, include any transfer services, such as transferring funds from a savings account to the deposit account to avoid the overdraft, even if there is a fee for the transfer service.

There are also specific rules for the FDIC logo. Any advertising for a FDIC insurance deposit account should include the official FDIC advertising statement or logo. If the lines will be eligible because the logo has been made too small, the lines may be blocked out or dropped, showing just the FDIC symbol. The official statement must be used in advertisements for deposit products and services or promotions for non-specific banking products and services offered by the bank. For example, an advertisement that simply states “‘Anytown Bank, offering a full range of banking services.’” or a vehicle wrapped with the bank’s logo and slogan.

The official advertisement state or logo are not required in many scenarios. The bank is not required to use the FDIC statement or logo on statements or reports of condition that must be published according to state or federal law. It need not be used on “stationary (except when used for circular letters), envelopes, deposit slips, checks, drafts, signature cards, deposit passbooks, certificates of deposit, etc.” Signs or plates in or on the bank offices need not have the statement or logo. It does not have to be included when the bank name is listed in a directory, when an advertisement does not state the bank name or show the bank logo, or when the bank participates in a join advertisement with a non insured bank. Radio or television advertisements shorter than 30 seconds need not use the logo or statement. It also does not need to be included on promotional materials such as calendars, pens, and keychains, as it would be impractical.

WINTER 2018

The FDIC advertising statement or logo may not be used in advertisements that are for non FDIC insured products. This list includes non-deposit products, such as insurance products, annuities, mutual funds, securities, credit products and hybrid products, such as a sweep account. If an advertisement is for both FDIC insured and non FDIC insured products, it should be split in such a way that it is clear which products are FDIC insured and which are not. If the bank is advertising a non FDIC insured product, it should state in a clear and conspicuous manner that the product is not insured by the FDIC, that the product is not a deposit or other obligation of, or guaranteed by, the depository institution and that the product is subject to investment risks, including possible loss of the principal amount invested.

Daniela Clark serves as Associate General Counsel for Compliance Alliance. She holds a Bachelor’s in Business Administration with a concentration in Management from the University of Texas at Arlington, AACSB. Daniela received her JD from Texas A&M University School of Law and is a licensed attorney in the State of Texas. Daniela brings to Compliance Alliance her knowledge of consumer finance compliance.

Testimonial

After participating in a live demonstration of Compliance Alliance, it was exciting to see the numerous tools and resources provided by them, in addition to their toll-free hotline. Compliance Alliance is providing the solutions we need to support the ever increasing compliance and regulatory requirement at Planters Bank. I highly recommend Compliance Alliance for ALL banks!

LuAnn Fries, Compliance Officer/BSA Planters Bank, Hopkinsville

PAGE 25 | KENTUCKY BANKER

UNITED IN SERVICE

Paducah Bank Opens Louisville Office in Hurstbourne Park Paducah Bank recently opened a Louisville office at Hurst- “I have been a part of this wonderful city for many years, bourne Park. Christy Jarboe, Louisville Metro Government and I am very energized by my new association with PaEconomic Development Manager, presented a welcome ducah Bank,” added Quesada. “Paducah Bank has a very proclamation on behalf of the city of Louisville. This is the special culture that I have rarely found in the world of first location outside McCracken County banking and finance. In 2006, Paducah in the bank’s 70-year history. GLI ambasBank was chosen as the Best Place to sadors were on hand for the official ribWork in Kentucky among mid-sized bon cutting. companies. That comes as no surprise to me.”

Paducah Bank is a sponsor of Louisville’s Paws with Purpose and the bank’s sponJim Heider is Vice President, Senior sored service dog, Walker, was on site to Commercial Relationship Manager. welcome guests. The bank made a $5,000 Heider previously served as Regional donation to Paws with Purpose at the Market Manager for Treasury Manbank’s board meeting held earlier in the agement Services and Corporate/Inday at the Marriott East. Paducah Bank’s stitutional Banking Manager for PNC. WOW Wagon! ice cream truck was also Heider is a Permanent Certified Cash on site to provide cool refreshments to Manager and holds a BBA in Finance visitors during the grand opening. from Florida International University.

“Diana Quesada, our Louisville office Senior Commercial Relationship Manager, has been serving the lending needs of clients in the Louisville market for almost a year now and has created many strong partnerships in this dynamic community,” said Mardie Herndon, President of Paducah Bank. “Now we are very pleased to have a physical presence in Louisville where we can further support our clients in a beautiful and convenient setting. We are excited to serve one of Kentucky’s most progressive business communities.”

Felisha Dowdy is Paducah Bank’s Assistant Vice President, Senior Community Banking & Treasury Management Relationship Manager. Dowdy has more than 20 years of banking experience in the areas of retail, commercial, treasury management, and private banking. Dowdy is chair elect of the Gilda’s Night event for Gilda’s Club of Louisville and served on the Planning Committee of the American Heart Association Heart Ball.

Diana Quesada has more than 30 years of banking experience with an emphasis on commercial lending. Her experience includes non-traditional lending, problem loan administration, credit analysis, and a variety of other financial management roles. Quesada is a member of the Paws with Purpose Board, the YMCA of Greater Louisville Norton Commons Branch Board and the University of Louisville Executive Women’s Alumni Board.

PAGE 26 | KENTUCKY BANKER

WINTER 2018

SINCE 1891

MARK A. HAMPTON

TOM WATTS

Central Bank announced Mark A. Hampton has joined the bank as Controller. Mr. Hampton joins Central Bank with more than 23 years of experience as a certified public accountant.

Bank of the Bluegrass & Trust Co. has announced the election of a new Board Member: Tom Watts, President & CEO of Exceptional Living Centers.

SUSAN A. DEAN

DONNA STACY

Central Bank announced that Susan A. Dean has joined the bank as VP, Commercial Lending. Susan brings more than 34 years of experience in banking.

Community Trust Bank announced Donna Stacy has been promoted to the position of Assistant VP, Online Services and Customer Support Manager.

SANDY PAYNE COMBS

BERRY L. POPP

Community Trust and Investment Company announced that Sandy Payne Combs has rejoined the team as Senior VP, Director of Operations and Compliance with CTIC’s WTM division.

Cumberland Valley National Bank is pleased to welcome Berry L. Popp as Vice President, Commercial Lending for the Lexington market.

BRIAN W. CHAVIS

MISTY CATES

Community Trust and Investment Company announced Brian W. Chavis has joined CTIC’s WTM team as Assistant Vice President, Relationship Officer for Retirement/Institutional Services.

Misty Cates has joined the Paducah Bank Trust Department as Trust Operations Administrator.

WINTER 2018

DR. JAMES TURNBO

Dr. James Kyle Turnbo has been elected to The Paducah Bank and Trust Company Board of Directors. Currently, Dr. Turnbo serves as Chairman of the Board for Purchase Independent Physicians ACO.

DONALD BENZINGER Central Bank announced that Donald Benzinger has been promoted to Senior Vice President, Commercial Lending in Northern Kentucky.

KELLY KING Traditional Bank welcomed Kelly King as a Consumer Lender with their Palomar Banking Center. King graduated from the University of Kentucky and has 15 years of banking experience.

KBA BANK SHOTS MOVING TO FACEBOOK!

f @kybankers see page 12 PAGE 27 | KENTUCKY BANKER

SINCE 1891

FNB Bank Donates Over $17,000 to Local Schools with Spirit Card Program FNB Bank is proud to announce that they have donated over $17,000 back to Mayfield, Graves County and Trigg County Schools through their Spirit Debit Card Program. These donations to the school systems are a result of FNB’s 3rd quarter Spirit Debit Card Reward Program.

“We are proud to offer our exclusive FNB Spirit Debit Card Program to our local schools,” stated Brooke Wiles, FNB Marketing Director. “Our customers have pride in knowing that they are making a difference in the lives of our youth by simply swiping their Spirit Debit Cards at the checkout. The donated funds allow the school systems the opportunity to do more for their students and staff, which is an invaluable asset to our community.”

The FNB Spirit Debit Card Rewards Program allows FNB and their customers the opportunity to give back to their local schools when they use their FNB debit card. FNB currently offers Spirit Debit Cards for Mayfield, Graves County and Trigg County Schools.

The Spirit Card works like a traditional debit card and for each signature-based transaction (not using your PIN), FNB donates $0.10 to the corresponding school. The tracking process is hassle free for the card holder, as FNB does all the tracking and submits the check to each school on a quarterly basis. The donated funds are utilized at the school’s discretion.

In 2017, FNB donated over $57,000 to their participating schools through the Spirit Debit Card Program.

PAGE 28 | KENTUCKY BANKER

WINTER 2018

THIS IS AN ADVERTISEMENT

Lenders May Benefit from Potential Tax Savings on REO Properties mpmfirm.com

by Michele M. Whittington

Lenders with real estate owned (REO) properties can face many challenges, including marketing, sales, and management issues for income-producing properties. One issue that might fly under the radar deals with the real property taxes paid on REO properties. Given the fact that REO properties are often distressed, lenders may have an opportunity to lower property expenses by obtaining a reduction in the tax assessment for the property.

Under Kentucky law, any challenge to a tax assessment must take place during a statutorily-mandated period, generally during the first two weeks of May. KRS 133.120.

Failure to appeal the assessment during this period will generally preclude any further challenge to the assessment for that tax year. Thus, a lender that comes into possession of a property after the May appeal period will have no choice but to pay the tax on the assessed property value for that year. However, failure to appeal an assessment for one year does not preclude the property owner from appealing the assessment in subsequent years, even if there has not been an increase in the assessment. A lender/owner that is the property owner as of January 1 should review the assessment for possible tax savings.

Lenders taking possession of a property after the January 1 lien date, but before the May appeal period, will face a different hurdle. KRS 132.220 places responsibility for payment of property taxes on the owner of the property on January 1, and property valuation administrators (“PVA”) will not accept an assessment appeal unless it is made either by the January 1 property owner, or by a party that has a letter of authority from the January 1 property owner to prosecute the appeal. In this situation, lenders may be faced with the near-impossible task of obtaining written authorization from the former owner of the property. Lenders can avoid this problem by requiring the owner to sign the necessary authorization as part of a negotiated foreclosure. This will allow the lender to challenge the tax assessment, if warranted.

LEXINGTON

LOUISVILLE

Lenders should always review the PVA’s assessed value of a REO property. Under normal circumstances, the PVA will often assess a property at the value shown in the consideration statement found in the most recent deed, under the assumption that the sale price reflects the fair market value of the property. There are several situations where a lender should consider challenging the PVA’s assessment for a REO property. When a property is sold at a foreclosure sale, the PVA will generally reject the sale price, under the theory that a “distressed” sale price does not represent the fair market value of the property.

In many cases, the PVA may simply leave the value of the property at its pre-foreclosure value. While the value of the property may well exceed the recorded foreclosure price, it may be less than the pre-foreclosure assessment.

Valuation issues often arise when a lender takes a deed in lieu of foreclosure. Pursuant to KRS 382.135(1)(c), a Kentucky deed must contain a “statement of the full consideration” paid for the property. In these cases, the deeds will often reflect the full amount of the outstanding mortgage, not the actual value of the property. PVAs may simply pick up the consideration stated in the deed, not realizing that the sale was distressed.

In either of these cases, lenders should check the assessed value of the property for potential tax savings.

If an appraisal has been performed in connection with the foreclosure, that can be submitted to the PVA as evidence of value. Absent an appraisal, the type of information to be submitted will depend on the property involved (income-producing, industrial, residential). In any case, some pre-planning and careful attention to the statutory deadlines can help a lender reduce expenses on REO properties.

Morgan Pottinger McGarvey is a leading banking and finance law firm representing financial institutions, businesses and individual clients throughout Kentucky and Indiana.

NEW ALBANY

BOWLING GREEN

SINCE 1891

LSU Graduate School of Banking Dedicates Office to Dr. Woodland For over half a century, Dr. Don L. Woodland led the Graduate School of Banking at LSU as the schoolâ&#x20AC;&#x2122;s Executive Vice President and Director. After having seen the institution through decades of industry and regulatory changes, technological advancements and over 16,000 graduates, Dr. Woodland retired from his position in 2018.

In honor of Dr. Woodland, his leadership, and his years of dedicated service, the GSB board officially dedicated the school office to him and renamed it Woodland Hall at the GSB Fall board meeting in New Orleans on October 12, 2018. Additionally, the 2018 graduating class donated $750 towards a dedication plaque which reads: Woodland Hall - named in honor of Dr. Don L. Woodland, Executive Vice President & Director, Graduate School of Banking at LSU for his 52 years of dedicated leadership from 1966 - 2018.

A framed photo of the building and dedication was presented to Dr. Woodland at Antoineâ&#x20AC;&#x2122;s in New Orleans by GSB Chairman, Bob Taylor.

Congratulations 2018 Graduates from Kentucky Educating Professionals, Creating Leaders

We congratulate you on completing the rigorous 25-month program and joining the more than 23,000 alumni who have gone on to leadership positions in their organizations, associations and the financial services industry. Best wishes for continued success!

Keith Baldwin Citizens Deposit Bank Vanceburg

Brian Gohmann River City Bank Louisville

Travis Neitz United Community Bank of West Kentucky Sturgis

Thomas Ballard Town & Country Bank and Trust Co. Bardstown

Derek Hetherington The Bankers Bank of Kentucky Frankfort

David Stringer United Community Bank Fort Mitchell

Christopher Daugherty Citizens National Bank Somerset

Sponsored by:

5315 Wall Street #280, Madison, WI 53718

|

Ph. 800-755-6440

|

Please visit gsb.org

THE NUMBER 1 ISSUE FACING BANKS is locating and hiring the right talent to do the job!

WE CAN HELP. • KY Bankers Association only Endorsed Executive Recruiting Firm • Owned by two former KY Bankers • Recruiting for Bankers over 18 years • Associated with Management Recruiters International • Voted 2018 Forbes TOP 10 Best Executive Recruiting firms for MRI Network.

Brandon Cooper President and Partner 812.858.0807 BCooper@NewburghGroup.com www.NewburghGroup.com

Unsure about a merger, buying or selling?

Don’t know who to call?

Unsure if you need an Investment Banker?

Call us for a Confidential and free review of our services.

M. Lynn Cooper Chairman and Founder 812-858-0810 lcooper@milyncofinancial.com www.MilyncoFinancial.com