Pubkbm1309

KENTUCKY BANKER MAGAZINE September 2013

As we celebrate our 25th Anniversary, we express our sincere appreciation for the support and loyalty of our customers.

Our goal, like that of the Community Banks we serve, continues to be delivering the leading, strongest customer service in the correspondent banking industry. We look forward to the future and the continued opportunity to care for our customers.

800.248.3229 | 502.695.3000 | www.bbky.com

BOARD

OFFICERS David P. Heintzman KBA Chairman Stock Yards Bank & Trust Company Louisville Richard Barto KBA Vice Chairman Citizens Bank of Northern Kentucky Newport Neil S. Bryan KBA Treasurer The Farmer’s Bank of Milton Milton Tony D. Whitaker KBA Past Chairman First Federal Savings & Loan Association Hazard Ballard W. Cassady, Jr. KBA President & CEO GROUP REPRESENTATIVES R. Bruce Kimbell- Group 1 First Community Bank Clinton Michael Mercer- Group 2 First Security Bank of KY Central City Frank B. Wilson- Group 3 Wilson & Muir Bank & Trust Company Bardstown Owen Lambert- Group 4 South Central Bank Glasgow James W. Beach- Group 5 People’s Bank & Trust Company Owenton Anthony Busseni- Group 6 Century Bank of Kentucky Lawrenceburg Katherine Capps- Group 7 First State Financial Middlesboro Stephen Miller- Group 8 Peoples Bank of Kentucky Flemingsburg Greg A. Wilson- Group 9 The First Commonwealth Bank Prestonsburg THRIFT REPRESENTATIVES Don Jennings First Federal Savings Bank of Frankfort Frankfort Glenn Meyers Kentucky Federal Savings & Loan Covington BANK SIZE REPRESENTATIVES Luther Deaton Central Bank Lexington Elizabeth Griffin McCoy Planters Bank Hopkinsville EDUCATION ALLIANCE REPRESENTATIVE Lanie W. Gardner First National Bank of Muhlenberg County Central City PEC REPRESENTATIVE Fred Brashear, II Hyden Citizens Bank Hyden

CONTENTS STAFF MANAGEMENT TEAM Ballard W. Cassady, Jr. President & CEO Debra K. Stamper EVP/General Counsel/Director of Compliance Paula B. Cravens Sturgeon Director of Education Solutions Selina O. Parrish Director of Vendor Solutions Matthew E. Vance Chief Financial Officer STAFF Miriam Cole Executive Assistant Paula Cross Education Solutions Coordinator Jamie Hampton Education Solutions Coordinator Natalie Kaelin Assistant General Counsel Chris Kelso Manager of AIB Education Solutions Michelle Madison IT Manager Lanie Minton Administrative Assistant Tammy J. Nichols Convention & Member Services Coordinator Katie Rajchel Staff Accountant Yvonne Savage PAC Services Coordinator Angie White Director of Communications Steve Whitlow Systems Engineer CONSULTANTS John P. Cooper Governmental Affairs KBA INSURANCE SOLUTIONS Chuck Maggard President & CEO Brandon Maggard Account Representative Audrey Whitaker Insurance Services Coordinator KBA BENEFIT SOLUTIONS Lisa Mattingly Director Sales & Service Lane Hettich Service Manager Donna McCartin Account Representative HOPE OF KENTUCKY Billie Wade Executive Director

Cover

Chair in Field Photo shot by William Biddle for the 2013 Scenes of Kentucky Photo Contest

COLUMNS Chairman’s Corner.........................5 Straight Talk.................................6 My Two Cents...............................8

DEPARTMENTS Education.....................................21 Products and Services...................23 Making News................................24 On the Move................................27

FEATURES Meredith Resolution........................9 Emerging Leader Spotlight.............13 KBPAC Golf Extravaganza..............14 One on One Update......................18 Meet the Newest KBA Employee.....22

September 2013 | 3

Jim McKenzie

Correspondent Banking

Count on us.

In today’s environment, Correspondent relationships are more important than ever and Stock Yards Bank & Trust is committed to working with the community banks in Kentucky. As one of the largest and strongest Kentucky based community banks, we understand the complex issues your bank is facing today. When your bank has needs around capital, liquidity, acquisition financing, stock buy backs, retirement plans or trust services we want to be your bank’s trusted Correspondent partner.

Chances are we know you, your bank and your community. Give James or Jim a call and put our experienced team to work for your bank.

James Brown

Correspondent Banking

The Correspondent Banking Team Jim McKenzie has over 40 years of banking experience, 36 years of those years as a correspondent banker.

James Brown has over 20 years of banking experience in Retail, Small Business, Corporate and Correspondent Banking.

(502) 625-0878 jim.mckenzie@syb.com

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

Lending Services Holding Company Shareholder Groups Bank Credit Needs And More!

Deposit Services Fed Fund Sweeps Wire Transfer Automated Clearing House And More!

International Services Foreign Exchange (CHECKS & WIRES) Letters of Credit And more!

www.syb.com

Stock Yards Trust Company Services Retirement Plans Investment Management Insurance Trust Partnering And More!

NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

CHAIRMAN’S CORNER business, but we really don’t trust them. We know better.

Jack Welch, legendary General Electric CEO, describes four types of managers but “employees” could be substituted and the message is the same.

Below I paraphrase his four types of employees: • The employee shares your bank’s values and does a good job. For them, the sky is the limit.

• The employee shares the values but needs improvement in work output. Give them more time or another chance.

David Heintzman KBA Chairman

As my year as your Chairman of the KBA has come to a close, I decided to have my last letter address character in business and, more importantly, in life. While I am not an avid sports fan by any stretch, what I do see in sports is how the actions or inactions of administration cultivate bad behavior.

Take, for example, Texas A&M football superstar Johnny Manziel and his antics in the opening game against Rice. He was suspended for what school officials called an “inadvertent” violation of NCAA rules involving signing autographs. A two quarter suspension! Get real! But then he mocked the administration, and everything it is supposed to stand for, when he mimicked signing an autograph early in the third quarter when he was allowed to play.

Have school administrators encouraged these antics and behaviors by not being strong enough from the start? Does the lack of severe penalties against Alex Rodriguez proliferate the use of performance enhancing drugs by others? Do the laughable penalties/suspensions against college athletes encourage more bad behavior? Are these administrators so worried about the short term pain to their programs that they risk teaching players that this behavior is acceptable in today’s society?

• The employee does not share your values and is not a good worker. The decision is easy to get rid of them.

• The employee doesn’t share your values but is a superstar in his line of work. This is one of the toughest decisions we make. But as Jack Welch says, and I agree, “We have to resolve these (types of employees) because they have the power by themselves to destroy the open, informed, trust-based culture we need to win today and tomorrow”.

There is a lot of truth to this statement. We overlook bad behavior of top performers, but deep down we know we should address the problem at whatever the cost may be.

At the end of the day our values and ethics will determine our success…or failure. And since we’re in Kentucky, and everything is about basketball, I’ll close with the ongoing saga of UNC superstar basketball player P.J. Hairston who has not only been given a second chance, but a third chance. As we await the outcome of whether he will or will not play, or what will the penalty be, let’s look at our own bank and see if we have someone who is destroying our values, but we, as well, are looking the other way. Do the right thing.

Let’s look a little closer to home, as in our banks. I believe most of us have had the employee who is a superstar producer, but lacks character. Often we overlook their behavior because they are producing September 2013 | 5

STRAIGHT TALK

Amazing Coincidence

The other night my wife and I had an attack of ants in our house. One of the children left a piece of pizza on the countertop. I didn’t realize it until I got out of bed around 2 a.m. for some water (at least that is what we will say it was). When I turned the lights on you couldn’t miss them, hundreds of ants swarming a small piece of pizza.

I found the bug spray and went to work. I was the virtual Jesse James of ant killers that early morning. However, after my successful defense of our kitchen counter I figured it was too late to clean it up [and besides “stone cold” killers don’t do house work].

The next morning after realizing that I better clean the mess up before Marcy woke up, I went to the kitchen and stood shocked. The hundreds of dead ants were gone!

POOF! Vanished. Nowhere to be found. My first thought was to get out of the house because these ants were really mad now that I sprayed them with poison. But, they were dead last night I’m sure of it. So I went to the internet and looked up “dead ants” which led to the search “How ants bury their dead.”

According to the research, during the wee hours of the morning more ants came in, retrieved the dead ants and took them away for burial. A “No man left behind” mentality! In addition, and amazingly enough, scientists have learned that no overseer ant gives orders in an ant

colony (contrary to what we have learned from TV and movies about the “Queen” ant). A mutual understanding of what needs to be done…sort of a genetic coding to solve problems, exists inherently in each and every ant. This colony of ants essentially runs itself with no leader directing workers to specific tasks. Additionally (and this one blew my socks off) video footage of ant colonies reveals that nearly 50% of “worker” ants are actually loafers. Lazy behavior of roughly half the colony was reported by Deborah Gordon of Stanford University during her study of “swarm intelligence.” Gordon and others want to learn more about the swarm mentality to understand how an ant colony essentially runs itself with no overseer, 50% population laziness, and an organized process for aged and affirmed. It’s amazing that with about half of workers reliable, the colony can still thrive and create new generations of workers. How did this disparity come to be- why are some ants hard-wired to be diligent workers while some seem hard-wired to lounge around and eat bon bons?

The more I read about how this behavior appears in all colonies, and how scientists are researching ants to understand how to institute “swarm intelligence” in our human society, I realized we (humans and ants) had a whole lot in common. Not the least of which is only about half (less actually) of Americans work to support the other half. Now, ants don’t have the excuse that there is no work available so, in essence they just don’t want to work but want to be taken care of, fed, protected and housed. Hmm... This is beginning to sound a lot like America these days. A reported 53% of our population doesn’t work while the other 43% support them with ever increasing taxes.

It makes me wonder what would happen in a “no oversight” bio-structure like ant colonies if more ants are on the taking than on the giving side. Now that would be interesting to know. What happens if the 50% of loafer ants turns into 60%? Do the workers go on strike? Do they violently protect their food storage against the raids of the non-workers? Do they quit protecting the non-workers from enemies? Is it human nature, like ant nature, that some of us are born workers and some born loafers- or is it learned behavior? What happens if the

Let me know what you think: bcassady@kybanks.com September 2013 | 6

tide shifts and more dead ants require rescuing than able bodied ants can rescue? What happens if an overseer attempts to “butt in?” I would support Congressional funding to find that out! Maybe if we artificially speed up this shift in the ant colonies, ahead of the speed to which this country is moving in that direction, we could avoid a disaster by knowing what the ants do to solve their dilemma.

way that shared tendencies appear across the animal and insect kingdoms?

And maybe the most important question of all: What happens when we shift that giant metaphorical magnifying glass from the anthill and refocus it on the most problematic species of all….ourselves?

I’m not interested in the potential uses of “swarm mentality” in the same way today’s scientists might be.

Developing “search and rescue” techniques in battle, re-programing jammed up phone lines, and solving traffic issues – these familiar human problems could and should profit from understanding “swarm intelligence.”

I have a different interest. The realist in me can’t help but ponder the “what if’s” of this scientific study about ant/human nature.

Nielsen, John. “How Ants Bury Their Dead.” National Public Radio. 9 December 2006. Interview.

Are we really that far removed from the creatures crawling beneath our feet? Are societies organized in such a

Industry Experience, Personalized Service The Alexander Thompson Arnold CPAs team understands the strategic, operational and regulatory issues your financial institution faces. If you need an independent auditor to make relevant recommendations for your unique situation, the ATA team wants to serve you.

Services we offer: - Financial Statement Audits - Internal Audit Co-sourcing & Outsourcing - Compliance Reviews - Loan & Deposit - Tax Preparation & Planning - Business Valuations - Employee Benefit Plan Audit & Administration - Assistance with Mergers & Acquisitions - IT Audits & Much More

Experience the ATA Difference!

Certified Public Accountants

ATA Financial Institutions Leadership Team: Steve Carmichael, CPA Kevin Howell, CPA Mark Downing, CPA Jack Matthis, CPA, CBA Judy Rainey, CPA Hope Cooper Murray, Kentucky 270.753.2424 Milan, Tennessee 731.686.8371 Dyersburg, Tennessee 731.285.7900 731.285.6884

www.atacpa.net

MY TWO CENTS PLUS SOME

What’s In Your Lobby? tourism officials; ag industry leaders; consumer groups and others. There is also a substantial online presence that works with the magazine. When we received a copy of the 2013 issue, I was immediately impressed with the quality and content of the publication. It is designed to look more like an annual report, offering in depth articles highlighting Kentucky’s agricultural successes. The ads are primarily focused on developing agriculture. There is one bank ad on page 56-very nicely done. But, again, on the inside back cover FARM CREDIT Mid-America has a full page ad. Now, this one is directed just at rural and farming businesses. But, it really stands out.

In response, the KBA has placed an ad on the inside front cover of the Kentucky Proud issue for 2014. Once the issue is published, we will make sure that you have a copy for your lobby.

You’ve heard that ad—“What’s in your wallet?” I want you to look at what’s in your lobby. I have been in lots of bank lobbies. Many lobbies are all business, just a customer convenience counter and teller stations.

Others are designed to encourage customers to linger, with sitting areas, televisions, reading materials and, sometimes, snacks!

Look around your lobby and waiting areas and see what kind of publications you have out for the customer. Specifically look for two magazines. One is called “Kentucky Living-Celebrating the Energy of Your Community.” The other is “Kentucky Proud-The Business of Agriculture in Kentucky.”

“Kentucky Living” is a monthly magazine published by electric cooperatives. It is a general interest magazine, highlighting some of the best that Kentucky has to offer, in a variety of areas including arts, tourism, Kentucky Proud products, homeowner tips and, of course, energy.

When looking at the May 2013 issue I noticed that, as always, the publication is heavy with ads. Most of the ads are “classified” types at the back of the issue. But, one stood out from the others. On page 11, is a beautiful full page ad with the primary tag line “IT’S ONE BARN FOR WORK AND ONE FOR PLAY CREDIT.” The small print (not so small) went on to explain that farm credit is only part of what FARM CREDIT Mid-America has to offer.

More notably, there were no bank ads and many of you have this publication in your lobby.

“Kentucky Proud” is a different type of publication. It is printed annually in partnership with the Kentucky Department of Agriculture. The Ag Commissioner uses this publication as a marketing tool, handing it out when presentations are made. It is also distributed at the state and county fairs; to state legislators; community leaders; September 2013 | 8

September 2013 | 9

Greater Louisville Community Gearing Up for the American Cancer Society Making Strides Against Breast Cancer, October 27

Managed I.T. Services Networking Solutions Virtualization & Storage Network Security

DOES YOUR TECHNOLOGY PARTNER HAVE I.T. COVERED? LEXINGTON | LOUISVILLE | LITTLE ROCK | CINCINNATI | CHATTANOOGA | ST. LOUIS

MAKE SURE THEY’RE SOC 2 COMPLIANT.

Most leaders in banking understand ‘Service Organizational Controls (SOC) 1’ as it relates to financial reporting. What about SOC 2 specifically designed for I.T. managed services, and many other technology and cloud-computing based businesses? When considering I.T. service providers, ask about their SOC 2 status. Some boast SOC compliance but merely outsource their responsibility to a 3rd party data center. NetGain Technologies holds itself to a higher standard.

Over 40 banks and financial institutions currently call Kentucky-based NetGain Technologies to solve their I.T. service and solution challenges. Ask to see our SOC 2 certificate. Email bankonit@netgainit.com for more information.

Raise the I.Q. of your I.T.

This year alone, over 7,800 women in Kentucky and Indiana are expected to be diagnosed with breast cancer, and it is estimated that 1,440 Kentucky and Indiana women will die of this disease. In an effort to change these statistics, individuals and teams are joining efforts to support the American Cancer Society Making Strides Against Breast Cancer walk Sunday, October 27, 2013 at Waterfront Park in Downtown Louisville to help create a world with less breast cancer and more birthdays.

Now in its 16th year, the Louisville event is one of more than 300 Making Strides Against Breast Cancer walks being held nationwide this year. Over 15,000 walkers are expected at Waterfront Park Sunday, October 27, 2013 to support the American Cancer Society Making Strides Against Breast Cancer walk. This inspiring, noncompetitive, 5K walk unites the entire community to celebrate breast cancer survivors, educate people about how to reduce their breast cancer risk or find the disease early, and raise fund s to end the disease.

Funds raised supports the Society’s mission to save lives by helping people stay well, helping people get well, by finding cures and fighting back against breast cancer.

Registration for the Making Strides Against Breast Cancer walk in Louisville begins at 11:30 a.m. Sunday, October 27. The event will start at 1 p.m. The walk begins and ends at Waterfront Park in Downtown Louisville. Flagship sponsors for this year’s Making Strides Against Breast Cancer event include Fantastic Sams and Kroger. Media sponsors include Main Line Broadcasting and WAVE 3 Television.

This event is open to the public and volunteers are also needed to provide their time and talent to ensure this year’s Making Strides event is a success. For more information about Making Strides Against Breast Cancer, call 502-560-6000, email makingstrideslouisville@cancer.org, or visit www. makingstrideslouisville.org.

The American Cancer Society saves lives and creates more birthdays by helping people stay well, by helping people get well, by finding cures and by fighting back.

For more information, contact the American Cancer Society at 1-800-227-2345 or visit us at cancer.org.

To learn more about solutions for your financial organization, go to www.netgainit.com or call toll-free 1-866-367-7243.

September 2013 | 10 NG-13107 KBAHalfPg3.indd 1

8/8/13 5:20 PM

Modifying Processes for Garnishments of Accounts Containing Federal Benefit Payments — New rules effective as of June 28, 2013 by P. Branden Gross Most financial institutions have already modified their processes to conform with the interim federal rule, 31 C.F.R. 212, effective May 1, 2011, establishing procedures to protect certain federal benefit payments (“Protected Amount”) from a garnishment order against a customer’s account (“Protected Account”). The Department of the Treasury, the Social Security Administration, the Department of Veteran Affairs, the Railroad Retirement Board and the Office of Personnel Management (“Agencies”) have recently finalized 31 C.F.R. 212, effective June 28, 2013 (“Federal Rule”). Financial institutions should ensure their existing processes comply with the amendments and clarifications to the Federal Rule.

The Federal Rule now allows a financial institution to impose a garnishment fee on any funds (other than a federal benefit payment) that are deposited into the Protected Account within five days after the account review. The financial institution may check the Protected Account at any time during that five-day period to determine whether such additional funds were deposited. The Agencies have also emphasized that the Federal Rule’s restrictions only apply to the Protected Account, and that the customer agreement and any applicable laws may authorize a financial institution to collect garnishment fees from a non-protected account.

Even though a financial institution must still conduct an account review to determine whether there is a Protected Amount, the Federal Rule amended the definition of “protected amount” to provide that the account balance be calculated as of the time of the account review, rather than at the opening of business on such date. However, the Federal Rule does not require a financial institution to conduct unnecessary account reviews if it has determined not to take any action affecting an account. For example, if a financial institution has already conducted an account review and

paid the obligation in the garnishment order in full, then the financial institution is not obligated to conduct any additional account reviews.

The Agencies have clarified that “during the account review period, the financial institution must allow an account holder unimpeded access to funds in the account.” Therefore, until the financial institution has finished the account review process, it shall not freeze or hold the funds in the account or cancel the customer’s access to debit cards.

In addition, the Federal Rule expanded the definition of “garnishment order or order” to clarify that the following collection actions fall within its purview: (1) orders directly issued by a State, State agency or municipality (rather than only orders issued by a court); (2) garnishment orders issued by a court clerk or an attorney in his capacity as a court official; and (3) restraining orders to freeze assets and seizures in criminal actions.

The Federal Rule’s notice provision also changed. It now provides that a financial institution needs to deliver notice to its customer when the Protected Account contains funds in excess of the Protected Amount. A financial institution is not obligated to give notice to a non-debtor joint account holder of the Protected Account. Also, the Federal Rule does not specify the means to deliver the notice to the customer as such notice may be governed by a customer agreement or any applicable laws.

The Federal Rule continues to protect financial institutions from liabilities and penalties for failure to tender funds under a garnishment order, so long as the financial institution complies with the Federal Rule in good faith.

M&P will be happy to discuss or answer questions on the new rules for “Modifying Processes for Garnishments of Accounts Containing Federal Benefit Payments.”

M&P is a leading banking and finance law firm representing financial institutions, businesses and individual clients throughout Kentucky and Indiana.

MorganandPottinger.com P. Branden Gross is of counsel at Morgan & Pottinger, P.S.C.

LEXINGTON

LOUISVILLE

NEW ALBANY NASHVILLE

THIS IS AN ADVERTISEMENT.

September 2013 | 11

KY Banker full page 2013.pdf

1

8/27/13

10:04 AM

Now up and running in Louisville

DBL LAW’s new Louisville office, through our merger with Reed Wicker PLLC, confirms our commitment to serving the legal needs of Louisville clients.

Since 1955, we have quietly built a reputation for excellence throughout the commonwealth. We represent a broad range of companies in banking, health care, manufacturing, and services, as well as individuals.

We make Kentucky our home and headquarters, and we want to be your law firm.

DBL Law. The Practice of Excellence.

Louisville 502-572-2500

Covington 859-341-1881

dbllaw.com

Dressman Benzinger LaVelle psc this is an advertisement

September 2013 | 12

Cincinnati 513-241-4110

Emerging Leader Spotlight: Shawn Woolum Longest Drive - Brad Ruch (Hole #9), Logan Brewer (Hole # 12) Unfortunately, no one walked away with one of the coveted hole-in-one prizes.

Congratulations to all the winners, especially since that course was quite the challenge.

Each meeting of the Emerging Leaders program provides networking opportunities and professional development as a community banker. Bankers know that golf is a great venue for building relationships and the Golf Extravaganza and Fundraiser was no exception. Emerging leader participants were given a great opportunity for even more connections with bankers from across the state – all while generating important support for the KBA PAC.

The inaugural class of the KBA Emerging Leaders Program gathered to participate in the PAC Golf Extravaganza and Fundraiser on August 12th. The 9th annual event is the largest fundraiser to support PAC activities.

While December and the end of the Emerging Leaders program for our inaugural class is rapidly approaching, the relationships made will benefit participants and our banking community for years to come. It’s an honor to be a member of this inaugural class and the KBA.

Though rain delayed the shotgun start by thirty Shawn Woolum minutes, the skies eventually cleared for a great day of golf to support the KBA PAC. The historic Club at Vice President, First State Financial Olde Stone in Bowling Green was an ideal host. Golf was followed by cocktails, a delicious dinner, awards and prizes.

Team winners included: 1st Place: The Farmers Bank of Lebanon Rob Spragens, Bradley Ruch, George Spragens, Dennis George 2nd Place: First Security Bank of Kentucky Mike Mercer, David Richey, Logan Brewer, Clarence Brewer 3rd Place: First National Bank of Muhlenberg County Jared Topmiller, Drew Watson, Eddie Wilcox, Bick Richard Additional prizes awarded to: Closest to the Pin - Rob Hoenscheid (Hole #3), Dean Rowe (Hole #8), Parker Scarbro (Hole #13), Clarence Brewer (Hole #16) September 2013 | 13

2013 PAC Golf Extravaganza

September 2013 | 14

It was nearly a wash out, but miraculously the clouds parted for the 9th annual KBA PAC Golf Extravaganza. Teams enjoyed the challenge of Bowling Green’s Olde Stone Golf Course followed by dinner and refreshments with fellow bankers. We hope to see you next year at the KBA PAC golf outing!

September 2013 | 15

Louis Pritchard James Hillebrand James Brown Rob Spragens Bradley Ruch George B. Spragens Dennis George Jeff Weaver Rob Hoendhed Winston Griffin Page Beard Ralph Pratt, III David Hertz Ryan Mahoney Joe Jenner Marc Lively Don Vick Brad Davis Jim Richardson David Long Darvin Towery Gary Cardin Dean Rowe Karen Hall Mitch Gibson Harry Hayes Craig Stahl J.Jason Hawkins Thomas McFarland Jerry Pyle Bill Rudd Butch Asher David Myers Shawn Garrison William F. Brashear, II Dave Berkemeier Tracie Frist Scott Norton Allen B. White Bill Pollom Jeff Joiner Marty Gibson Hank Allen Howard Elam Billy W. Luttrell Parker Scarbo Greg Luttrell Brent Hardin Mike Mercer David Richey Logan Brewer Clarence Brewer Ben Howard Tom Smith David Sartore Bob Lysack Blaze Lysack Matt Cooper Michelle Coleman Ricky Houchin Scottie Woodcock Steve Patton Jared Topmiller Drew Watson Eddie Wilcox Nick Richard Timothy W. Edwards John S. Turner

Steve Brangers Mike Adams Casey Watts David Bradford Robert Smith Kyle Bobrowski Dale Bishop Nelson Bobrowski Justin Dixon Mike Wilson Darrell Billings John Spencer Shawn Woolum Guy Jones Tim Saunders Chuck Partin Wynne E. Baker Wynne A. Baker Greg Schroeder Donnie Helton John Hopkins Jon Adams Dennis Sargent Lloyd Hillard John Pendergrass Rick Harp Paul Edwards Kreg Denton Josh Bailey Van Davidson Kirk Burns Treva Winlock Greg Young Steve Whitlow Lisa Mattingly John Cooper Chuck Maggard Billie Wade Brandon Maggard Matt Vance Ballard Cassady

September 2013 | 16

Thank you KBA PAC golf participants!

It all adds up ‌to results. At Clark Schaefer Hackett, we’ve provided traditional auditing and tax assistance to financial institutions for over 25 years and risk management services for 15 years. More than half of our clients have been with us over a decade.

Our solutions are focused toward the needs and budgets of community-based banks and savings institutions and delivered by one of the strongest specialized financial institutions industry teams in the area.

Certified Public Accountants & Business Consultants

www.cshco.com

Kudos Kentucky Graduates

Contact: Josie Bunch Director of Marketing 303-492-6139

FOR IMMEDIATE RELEASE August 12, 2013

GSBC CONGRATULATES 2013 KENTUCKY GRADUATES BOULDER, COLO. -- The Graduate School of Banking at Colorado (GSBC) is pleased to announce the graduation of two bankers from Kentucky as part of the class of 2013.

The graduates are pictured left to right: Travis Keller (Independence Bank-Bowling Green) and James Stetson (Kentucky Department of Financial Institutions-La Grange).

GSBC awarded 164 total graduates from across the nation with a certificate in banking in a ceremony which took place Thursday, July 25 at the Folsom Field Skyboxes on the University of Colorado Boulder campus. A total of 14 Kentucky bankers attended the 63rd Annual School Session including the graduates above.

GSBC is America’s Premier Community Banking School which prepares bank-industry professionals to take on senior management roles within their organizations. Each student has been recognized by his or her bank CEO, president and supervisor as a rising star within their organization. During the 25-month program, which meets two weeks each July for three consecutive years, students are required to complete six intersession research projects, on-campus coursework, exams and a bank management simulation.

In addition to academic coursework, students enjoyed networking with others in their region, as well as exploring Boulder throughout their two-week visit.

GSBC will host its 64th Annual School Session July 13-25, 2014 on the University of Colorado campus in Boulder, Colorado. For further information about the School, please visit www.GSBColorado.org or call 800-272-5138.

Contact: Josie Bunch Director of Marketing

FOR IMMEDIATE RELEASE August 12, 2013

Who is Going One on One? Farmers National Bank Danville

Vice President, Director of Marketing, Sharon K. Howell, CFMP (left) of Farmers National Bank of Danville recently presented a KBA One on One check for $100.00 to Dr. Kim Frazier of Holly’s House. Holly’s House is a place for women to achieve spiritual, social and economic success offering life skills training, social support, guidance and a Christian atmosphere.

Farmers National Bank, a community owned bank since 1879, has banking facilities in Danville, Burgin, Harrodsburg, Junction City, Perryville, Stanford and Lancaster.

When it comes to the banking industry, KraftCPAs has the bases covered Services

Wynne E. Baker - (615) 782-4230

www.kraftcpas.com/Banking.htm

• • • • • • • • • • • • • • • • •

External & internal audit SOX documentation & testing Compliance consulting (FFIEC, GLBA, SOX) Loan reviews & grading systems Annual & quarterly SEC filings Employee benefit plan audits Compliance reviews Tax planning & compliance Information systems assurance & consulting External penetration testing Internal penetration testing Merger/acquisition assistance Enterprise risk management Risk assessment Social engineering Forensic accounting Valuation services

Serving the banking industry since 1958

Win-Win

One on One With My Community” initiative is focused on entucky banking industry’s commitment to community across ch time that a bank or banker goes “One on One” to share with their local John community, theKing KBASouthern will donate to a King, VP Bank,$50 presents One on donation to about Matt Reed, of that bank’s choice. a Help us One share the truth our Executive YMCA Safe Place. our neighbors and support localDirector, charities in the process.

King Southern Bank

United Southern Bank United Southern Bank donated to the Ohio Valley League baseball team, the “Hoptown Hoppers.”

The money donated helps college recruited players participate in a wooden bat league in their community.

Farmers Bank & Trust Company Princeton

Caldwell County Primary School Principal, Lara Hill, received a check for $100 from the Kentucky Bankers Association for their “One on One” campaign. Farmers Bank Marketing Director, Michala Pepper, presented the check on Monday, August 26th, during morning assembly at the Primary School. Kindergarteners through second graders are seen in the background. The KBA awarded the money to CCPS due to Farmers Bank’s participation in the Math Buddy Program in an effort to bring attention to ways that community banks across the state are active in their communities.

The staff of Farmers Bank are proud to begin their fifth season of the “Buddy” program at CCPS, in which two bankers per week attend the school to have one on one tutoring in math skills with second graders. The $100 donation will go towards “Math Night” the school has for students and parents.

September 2013 | 19

Upcoming Education Events Reviewing Your Loans and Mending Fences Before the Regulators Arrive Seminar September 10 Lexington September 11 Bowling Green COMMERCIAL LENDING SCHOOL September 16-20 Louisville The Future of Mortgage Lending Two-Day Pegasus Program October 1 & 2 Bowling Green October 15 & 16 Lexington Asset Liability Management Seminar October 3 Louisville Internal Auditing Two-Day Seminar From Assessment to Audit Coverage to Audit Plans: A Comprehensive & Complete Approach October 9 & 10 Lexington October 16 & 17 Bowling Green Power Prospecting: A Business Banking Sales Seminar October 22 Bowling Green October 23 Lexington ESSENTIALS OF BANKING SCHOOL November 4-8 Lexington

Lending Compliance Update Pegasus Program December 4 Elizabethtown December 5 Paducah December 6 Bowling Green December 9 Lexington December 16 Somerset IRA Administration Pegasus Program December 3 Lexington December 5 Elizabethtown December 9 Hazard December 10 Somerset December 11 Paducah December 12 Bowling Green Training for Loan Assistants and Loan Processors Seminar December 10 Lexington December 11 Bowling Green

Watch for these programs in Spring 2014....

Credit Administration Seminar: Seven Effective Habits January 29 Bowling Green January 30 Lexington

IRA Basics Evening Program Pegasus Program November 7 Elizabethtown November 12 Paducah November 13 Madisonville November 14 Bowling Green November 18 Morehead November 19 Hazard November 20 Somerset November 21 Lexington

Key Ratio Analysis & Commercial Lending Seminar Two-day Program February 27 & 28 Bowling Green March 13 & 14 Lexington

Bankers Brew for Bank Directors November 15 Lexington November 19 Bowling Green

Cash Management Seminar April 9 Louisville

Basic Management Issues in Banking November 19 Bowling Green November 20 Lexington

Loan Documentation Workshop Two-day Program April 1 & 2 Bowling Green April 3 & 4 Lexington

Trust Based Selling May 7 Bowling Green May 8 Lexington

September 2013 | 21

Meet Donna McCartin

Everyone needs a superhero sidekick.

I am excited to be a part of the KBA Benefit Solutions team. I work with Lisa Mattingly and Lane Hettich and Let KBA Benefit Solutions saveassist youwith the KBA Health & Welfare Trust accounts. In brief time I have been on staff, I have learned that time, money, and Health CaretheReform Benefit Solutions covers a wide spectrum of needs for the headaches. members. My goal is to be on a first name basis with each of our participating banks, helping to answer not only benefit questions, but health care reform issues as well.

My background includes a Bachelor of Science degree from Purdue University in Pharmacy. I worked as a pharmacist for ten years before making the decision to remain at home with my children. I had four children in five years and felt the need to side track my career to be with them. Upon returning to work, I became licensed and sold property and casualty insurance. In my current role at the KBA, I work with some of the nicest people in the state- your bank HR officers.

Outside of work, I am sports obsessed.....Go Cards! I also have two new grandchildren which melt my heart Call 866-276-6630 daily. I love to cook....desserts being my specialty. I also love home decorating, especially at Christmas time. www.kbabenefitsolutions@kybanks.com

Donna can be reached at dmccartin@kybanks.com or 502-736-1274 Unlikely Superheroes are the best kind.

Tangled up in Health Care Reform?

We can help.

Call 866-276-6630 www.kbabenefitsolutions@kybanks.com September 2013 | 22

PRODUCTS AND SERVICES

DRIVE REVENUE TO YOUR CREDIT, DEBIT OR ATM CARD PROGRAM The KBA has endorsed Datacard® CardWizard® issuance software, the world’s best-selling solution for instant issuance of credit, debit and ATM cards. Special capabilities include EMV® compliant chip card issuance and personalization of mobile devices and key fobs.

The company offers fully integrated solutions that allow financial institutions to quickly and securely issue ATM, debit and credit cards instantly at branch or store locations. Several KBA members are currently using CardWizard software to differentiate their brands in the highly competitive financial card market. Consumers can apply for a card and, in a matter of minutes, leave the branch with a personalized permanent and ready-to-use card.

Instant Issuance brings instant advantages. By instantly issuing permanent, ready-to-use cards provides your bank with numerous benefits, including: * Increased card activation. Cardholders are much more likely to activate a card they receive instantly than one they receive in the mail. * Immediate card use. Give your customers immediate buying power when you issue credit, debit and ATM cards instantly. * Stronger cardholder loyalty. Instant issuance of personalized financial cards aligns with growing consumer demand for speed and customized solutions. * Rapid revenue generation. Increased activation, immediate card use and stronger customer loyalty can help you drive new incremental revenue for your card program – instantly.

For more information, contact Selina Parrish at the KBA (502) 736-1282 or sparrish@kybanks.com.

With Anthem Blue Cross and Blue Shield, size equals savings.

Your employees work hard. They deserve great benefits at a great price. That’s why we work with our large networks to make sure they can start saving money from day one. So when your employees visit a network doctor, their cost is lower — even before they meet their deductible.

With health care coverage from Anthem, your employees can get the care they need to stay healthy.

All at a price that fits everyone’s budget.

To learn more about what Anthem Blue Cross and Blue Shield has to offer, visit anthem.com/connects2.

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.

37563KYAENABS 5/13

September 2013 | 23

MAKING NEWS

US Bank Paints House for Local Hero we can to help make our community stronger,” said Stephanie O’Leary, branch manager and organizer of the painting event.

LOUISVILLE - Seven U.S. Bank employees partnered with nonprofit organization Active Heroes to paint a house in Louisville for a returning veteran.

“Volunteering for Active Heroes is one of many ways we give back in Louisville. We are fortunate to do business here and want to do what

O’Leary organized the event through the U.S. Bank Development Network, an employee-led program designed to promote personal and professional development as well as participation in meaningful projects that enrich our communities. U.S. Bank has 27 branches and nearly 250 employees in the Louisville area.

About Active Heroes The mission of Active Heroes is to strengthen military families, serve veterans and benefit active duty military by providing financial support

and community reintegration. Active Heroes is dedicated to connecting and helping America’s military families through financial assistance, active challenges, leadership training and community outreach.

About U.S. Bank U.S. Bancorp (NYSE: USB), with $355 billion in assets as of March 31, 2013, is the parent company of U.S. Bank, the 5th largest commercial bank in the United States. The Company operates 3,080 banking offices in 25 states and 5,056 ATMs and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. Visit U.S. Bancorp on the web at usbank.com.

First Community Bank’s Newest Location in Kevil July 18, 2013—Kevil, KY. The temperature display on the new sign indicated 92 degrees, but you could not tell that by the large crowd gathered for the Grand Opening of First Community Bank’s (FCB) newest location in Kevil. Hamburgers were on the grill, the WKYQ Rabbit in attendance, and lots of great door prizes definitely made it the place to be.

“We are so excited about coming to Kevil with our brand of community banking,” said Bruce Kimbell, President of FCB. Kimbell was joined by several of the bank’s officers and directors, along with the entire Kevil staff, as they welcomed area residents to the festivities. The opening of the Kevil banking facility, along with the recent construction start of the new La Center location, ensures FCB will be well September 2013 | 24

Pictured left to right: Lynne Deweese—Director, Greg Gunter—Sr VP, Lynn Ann Jones—Director, Kreg Denton—Sr VP, Bruce Kimbell—President, Tim Goodin—Sr VP, Cheryl Hartsell—VP, Karen Evans—Director, and Scott Mitchell—Director.

represented in the Ballard/West McCracken County marketplace.

Kimbell explained that Tim Goodin will be overseeing the Kevil market, and Ballard native Kreg Denton will be overseeing the La Center operation once construction is completed.

“We are so blessed to have two great bankers like Tim and Kreg to lead our operations here.

Their years of experience, coupled with a great staff and a full array of modern banking products and services will clearly differentiate us in the area,” said Kimbell.

Picture to left: Employees from the First Community Bank Grand Opening Celebration in Kevil.

(continued from page 26) FCB was founded in 1936 and is headquartered in Clinton with an additional banking office in Fancy Farm.

First Security Bank Earns Highest Rating From Veribanc First Security Bank, headquartered in Owensboro, Kentucky, announced today the earned designation of the Blue Ribbon Bank Commendation of Excellence received from Veribanc. Veribanc, an independent bank rating service headquartered in Rhode Island was founded in 1981 and provides independent bank rating services to investors and others.

“We are excited to receive the highest rating that Veribanc assigns to any financial institution. Our many stakeholders, including shareholders, clients and employees, will be pleased that First Security Bank has received the Green Three Stars and CAMEL 1 designation denoting the Bank as Superior,” stated M. Lynn Cooper, President and CEO of First Security Bank.

Veribanc analyzes the financial condition of each bank.

Factors used in assigning a rating include a bank’s capital, asset quality, income, reserves, problem loans, securities,

any regulatory enforcement actions and key performance indices along with other data. The ratings of all banks in the nation can be found at www.veribanc.com “We remain steadfast in our commitment to be a top community banking franchise. Our strong results show our dedication to the communities in which we serve. While many banks have experienced tremendous challenges during these economic times, First Security Bank continues to stand out amongst its peers and is honored to have received the highest rating designation from Veribanc,” stated Cooper.

For further information contact: M. Lynn Cooper, President and CEO Phone: 270-663-4678 LCooper@FirstSecurity.net

KentucKy taxable Municipal bonds KentucKy state property and buildings coMMission Quantity

$500,000

Coupon

Maturity

Yield to Maturity

4.303% 11/1/19 3.00% Rating: Aa3 (Moody’s) / A+ (S&P) / A+ (Fitch)

Price

$107.327

~+110 basis point spread to comparable Treasuries (as of 8.13.2013) ~Pays interest semi-annually / Redemption provisions may apply / Paid for by appropriations from the KY General Fund ~All interest is Federal Taxable *Above bonds are offered for purchase in $5,000 denominations subject to change in price and prior sale. Further information concerning the bonds is contained in the Official Statement available upon request. Please consult your tax expert professional for advice regarding your own situation. Certain bonds purchased below par may be subject to capital gains at maturity or if sold prior to maturity. The absence of a rating may affect the marketability of the bonds. Brokerage Services offered through Ross, Sinclaire and Associates, LLC, registered Broker-Dealer, Member FINRA and SIPC. Investment Products Not FDIC Insured, No Bank Guarantee, May lose value.

For more complete information please contact:

Bill Barker • Toll Free: 800.292.4563 • bbarker@rsanet.com One Riverfront Plaza • 401 W Main St, Suite 2110 • Louisville, KY 40202

September 2013 | 25

ON THE MOVE

American Bank & Trust Announces Employee Promotions American Bank & Trust is proud to announce the following promotions: Elizabeth Davenport of Bowling Green has been promoted to Vice President and has been with American Bank & Trust since it opened in 2000. Libby attended Western Kentucky University and is a graduate of the KBA Basic Banking School. Libby currently serves as the bank’s new accounts and customer service supervisor.

Brian Carey of Brownsville has been promoted to Vice President. Brian joined American Bank & Trust in 2002 and has over 20 years of banking experience. He is a graduate of Western Kentucky University and the KBA General Banking School and has been active in several local community and civic organizations. He currently serves as a branch manager and lender at the Louisville Road Branch.

Sonja Taylor of Alvaton has been promoted to Vice President. Sonja joined American Bank & Trust in 2002 and has 31 years of banking experience. Sonja is a graduate of the KBA General Banking School and has been active in several local and civic organizations. She currently serves as the bank’s security and fraud specialist.

Janie Taylor of Bowling Green has been promoted to Vice President. Janie joined American Bank & Trust in 2004 and has more than 41 years’ banking experience. Janie currently serves as the bank’s loan operation’s supervisor.

Sheila Meacham-McPherson of Russellville has been promoted to Assistant Vice President. Sheila joined American Bank & Trust soon after it opened in 2000 and has 24 years of banking experience. Sheila is a graduate of KBA Basic Banking School. She currently serves as teller supervisor at the Scottsville Road Branch.

Carmen Gentile of Bowling Green has been promoted to Assistant Vice President. Carmen joined American Bank & Trust in 2004. She attended Western Kentucky University and is attending the KBA General Banking School.

She currently serves as the bank’s deposit operations supervisor.

Elizabeth Davenport

Brian Carey

Sonja Taylor

Janie Taylor

Sheila MeachamMcPherson

If you would like to submit to the Kentucky Banker Magazine please contact: Lane Hettich lhettich@kybanks.com

Carmen Gentile

ON THE MOVE

Jenean Anderson

Tammy Lucas Bardstown– Wilson & Muir Bank & Trust Co. has announced that Jenean Anderson has been named as Assistant Manager of their Big Clifty Office in Grayson Co. She has vast experience in retail, commercial and mortgage lending throughout Hardin and Grayson Counties.

Additionally, WMB has hired Chris Mayo as Loan Officer. Chris comes with over 10 years of banking experience from another institution in Lebanon where he was assistant branch manager and universal banker. Having family roots in Bardstown, Chris is looking forward to working in Nelson County again.

He and his son Alex currently reside in Lebanon, but will be relocating to Bardstown soon.

And after several months in Bardstown, Loan Office Kris King will be returning to Vine Grove.

“Kris’ professional growth has been amazing in this past year in Bardstown as a loan officer”, said President Frank Wilson.

“We are very excited about his opportunity to bring his talents back to his hometown of Vine Grove and the surrounding North Hardin communities. I know Kris is very excited to return and is looking forward to working with his neighbors and friends to best serve their financial needs.”

Frankfort- Zachary Moore, Vice President at Farmers Bank &

Kris King

Chris Mayo

Len Duren

Zachary Moore

Frank Page

Capital Trust Co. was among the 155 bankers receiving graduation diplomas on June 7, 2013 from the Graduate School of Banking at Louisiana State University. Mr. Moore served as President of the Class of 2013. This three-year program provides courses covering all aspects of banking, economics and related subjects.

Pikeville- Mark A. Gooch, President and CEO of Community Trust Bank, is pleased to announce the following promotions: Greg Lee has assumed the role of Pikeville Market Senior Lender and Vice President at the Community Trust Bank Main Office located at 346 North Mayo Trail in Pikeville, Kentucky. As Market Senior Lender, Mr. Lee assumes overall responsibility for the market loan portfolios, evaluates loans, analyzes trends, and reviews and approves loan reports. He monitors the Market’s current loans to ensure conformity with terms, policies and procedures, and attends to the needs of customers Tammy Lucas has been promoted to the position of Senior Vice President and Compliance Manager of Community Trust Bank, Inc. Tammy Lucas’ duties include establishing procedures to ensure the Bank complies with federal laws and regulations; providing compliance advice and guidance to all Bank staff, addressing any compliance

Greg Lee

Chloe Doyle Humphrey questions; staying abreast of regulatory changes; informing and educating appropriate Bank personnel of compliance responsibilities; and developing training materials for regulatory issues.

Newport – Len Duren has taken the position of Executive Vice President, Chief Credit Officer for Citizens Bank. Mr. Duren has an extensive background in credit risk and asset management.

Citizens Bank of Northern Kentucky has eight locations in Campbell, Kenton and Boone counties.

Shelbyville- Brian Webb, Senior Vice President of Citizens Union Bank, is pleased to announce that Frank Page has joined the bank as a Commercial Lender. He stated, “Frank will bring extensive banking knowledge to the lending department here at CUB. We are very happy to have him as a part of our lending team.” Frank’s office is located at the bank’s main office at 1854 Midland Trail in Shelbyville.

Milan, TN- Chloe Doyle Humphrey with Alexander Thompson Arnold CPAs recently passed the Uniform Certified Public Accountant (CPA) Examination, earned her Certified Public Accountant license, and was promoted to manager.

September 2013 | 27

Share the Truth. $25,000 to Charity.

Win-Win