Ohio Record Magazine - Spring 2023 - Official Magazine of Ohio Bankers League

The Official Magazine of the Ohio Bankers League

OHIO RECORD SPRING 2023 ISSUE

Back to the Business of Banking Edition

A CEO WITH A PASSION FOR SERVICE, TEAMWORK & COMMUNITY An Interview with the new OBL Chair, Brian Young

SPRING 2023 ISSUE

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The Official Magazine of the Ohio Bankers League

OHIO RECORD Back to the Business of Banking Edition IN THIS ISSUE | SPRING 2023

FEATURED ARTICLE

ARTICLES

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24 AN INTERVIEW WITH THE NEW OBL CHAIR, BRIAN YOUNG

Over the Horizon Off to the Races - The Ohio General Assembly and Congress Kick Off New Sessions

10 CEO Symposium Marks 20th Year 13 Rising Leaders Serve the Industry; Plan 2023 Next Gen Confference

14 Main Office Operations Growing Pains?

16 Economic Summit Returns In-Person 18 ALM in 2023: Revisiting Economic Value of Equity (EVE)

20 Be Aware of Emerging Ransomware Ruses Hitting the Banking Industry

Empowering banks to offer, originate, and support mortgage lending services.

22 Are Password Managers Secure?

29 Reg II 2.0: IT All Boils Down to Pinless Transactions

35 Under Pressure: Cost of Funds Strategies in a MONTE CHAPMAN AVP, BCU Mortgage Services Manager mchapman@bcumortgageservices.com (318) 366-0456

JEFF COTHERN AVP, Correspondent and Warehouse Executive jcothern@merchantsbankofindiana.com (614) 580-5691

bcumortgageservices.com

Rising Rate Environment

38 Banking Calendar 40 Around the Industry 42 The Top Ten SPRING 2023 ISSUE

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OVER THE HORIZON With increased interest rates over the past year, seasoned bankers have advised me that the conditions we see today are what banking is supposed to look like. That is why we are saying around the OBL this year that we are back to the business of banking.

Going back to the basics reminds me of great memories in graduate school at Ohio University. My two internships were meaningful, memorable and unquestionably enabled me to get to where I am today. One was in Washington, D.C. with the U.S. Senate Joint Economic Committee’s Republican staff. Being on committee staff is a plum assignment. I quickly learned, thanks to a professor who was a mentor and did a wealth of research for the JEC, this first-generation college kid was selected over numerous well pedigreed students from some of the most prestigious universities in the country. That realization taught me the power of mentorships and to never forget from whence you have come.

Every month, our small staff had a private briefing with Federal Reserve Chairman Alan Greenspan prior to his testifying before the full committee. Sadly, with the passage of thirty years, I have forgotten more than I remember.

What I do remember was being in awe with the power that position yields. Additionally, Mr. Greenspan was incredibly warm and gracious to me. I also recall how artfully he danced with his responses to committee members. The staff economist whom I supported had an especially close relationship with Treasury Secretary Nicholas Brady. Numerous times I took pride in hearing him on TV

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interviews or testifying in committee delivering stats that I had researched. Yet, the most indelible memory was the recognition of the Committee’s administrative staff that I was another humble Bobcat willing to do whatever was asked of me. It was the basics. The unglamorous grunt work had to be accomplished and I was there to get it done.

New Normal We were excited in February to host the annual OBL Economic Summit in person after being virtual the past two years. This event brought the OBL full circle to being back to normal, as this was the last event we were able to hold in person before the pandemic in 2020. We look forward to seeing strong banker attendance at all OBL events this year as we settle into a new normal. The 2023 OBL Economic Summit was also noteworthy because we partnered with The Ohio Society of CPAs. If you know anything about me, you know I am all about collaborating.

There is power in working together to maximize synergies and deliver greater member value. A number of bankers are CPAs and many more have accounting backgrounds plus the local accountant is great business referral source.

All in all, this partnership made a ton of sense.

Back to the Business of Banking Members tell us they are focusing on things like liquidity, interest rate risk and loss mitigation. These basics of banking have not particularly been in the forefront given

years of historically low interest rates and the unique circumstances the pandemic brought to our industry.

Returning to the basics can bring comfort, especially since the future holds uncertainty. There are a handful of bankers who are reporting that lending pipelines have reduced dramatically. This is certainly the case with residential mortgages, but some are even seeing similar softening with commercial lending.

Though conditions can change quickly, Ohio banks are cautionary in not “willing us into a recession.” As the late Tom Farin taught generations of bankers at the Graduate School of Banking at Wisconsin, have those CD specials available. Maybe modest rates are posted in the lobby and you have that 4 percent CD ready at a moment’s notice to keep a relationship or make a new one. Who knew a year ago that 2023 would have bankers talking about liquidity shortages after being so flush over the past three years?

Some of the nonbanks are even publishing 5 percent rates and Star OHIO is giving bankers fits again.

A tight labor market and wage pressures continue to create headwinds for many Ohio banks. Banks are especially bracing for such pressures to increase with the tremendous Intel economic development project underway in Central Ohio. We are grateful that Ohio’s community banks invest in their employees by leveraging OBL as their “go to” educator. Additionally, though improving, supply chain issues continue to raise concerns with the stability of some bank customers. Concentrations in hospitality and large commercial real estate developments are also worth keeping eyes on. The good news is that Ohio banks are well reserved so they have the cushion should economic conditions get bumpier.

Meet the New Chair Each year takes on a new spin with the turnover of chairs who generously give back to our industry with thoughtful leadership and selfless involvement. This year we are blessed to have Brian Young. I have had the pleasure of working closely with Brian over my twenty years with OBL. We have grown up together, professionally, despite taking different paths within our industry. He has strong convictions and is extremely passionate about our industry. He is also a sound leader and espouses the importance of investing in his team at the bank. I am confident he and the entire OBL Board of Directors will give us exactly what we need over the year ahead.

Back to the Basics in Government Relations By the time this hits your desk, Evan and I will have already been to Washington, D.C. twice accompanied by bankers. Our third trip will come at the end of March. If you missed out on these, stay tuned because we will be back

in our nation’s capital a lot this year. With new legislative sessions commencing in Columbus and Washington, D.C., we are getting back to the basics in government relations as well. Given the sizeable turnover at the Statehouse and on the Hill, it is imperative to have four lobbyists on staff focusing a great deal of attention in this critical part of every trade association’s mission.

Ohio has three new Members of Congress and a new U.S. Senator. Relationship building is key so that they look to OBL and its members as value-added resources on banking matters. Senator Sherrod Brown continues as Chair of the U.S. Senate Committee on Banking, Housing and Urban Affairs and is now joined by Senator J.D. Vance.

Only one other state has both of its Senators on this powerful committee (Montana). We are hopeful they can finally enact the SAFE Banking Act addressing a crucial public safety issue with cannabis-related businesses.

There also appears to be bipartisan interest in leveling the playing field and ensuring consumer protections with cryptocurrency. OBL has been widely quoted in the media advocating for both of those. We will also continue unwavering pushback on federal regulators’ harmful messaging that has been spewed at our industry the past two years. Banker relationships with state elected officials are critical as well. There are potential risks at that level with government efforts to supplant bank decision making, which could cause grave harm on a bank’s ability to serve its community.

A Look Inside the Association At the OBL we are back to the basics as well.

Comprehensive strategic planning is underway. In my tenth year of leading the OBL, it feels like the right time to assess what is most important to ensure the Association’s sustainable relevance in maintaining a strong Ohio banking industry. We will not take our eyes off the ball of OBL’s

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mission – advocate, collaborate and educate -- as we consider where we need to pivot so we can be even more effective in supporting our members.

Probing conversations with OBL board members and amongst the management team have been affirming. A great amount of respect has been built over our history.

Demand continues to be strong for what OBL does with and for the banks we serve. Plus, the Association is in a position of strength financially, in the percentage of banks who are members, size and experience of the staff, credibility in the governmental arena, number of Endorsed Business Partners as well as Affiliate Members who add great value and the depth plus breadth of banker professional development programming. I am grateful for the solid votes of confidence that what the OBL team works on so passionately each day matters. I applaud their willingness to continue striving for excellence because we can do even better to improve the member experience while also achieving more operational efficiencies.

Additionally, this year, a material investment is being made in our own professional development. OBL has relationships with so many impactful speakers that we are “putting our money where our mouth is” to leverage some for our own good. Our team of twenty-one employees has an energy in support of OBL’s mission that is palpable.

It has reenergized me in many ways. The OBL staff’s deep bench has long been an unparalleled differentiator.

Intentionally focusing on our professional development will give us insights and tools to better serve Ohio’s great banks and thrifts. I am excited by the team’s interest in upping our game to further solidify our place as an indispensable partner for Ohio’s banks when it comes to government relations advocacy, products/services solutions, and banker professional development.

Going back to the basics might not sound all that exciting, yet it can be a valuable exercise to remember the “why” and ensure the efficacy moving forward in a rapidly changing world. You have the OBL’s continued commitment to look out further over the horizon as we get back to the basics in ensuring our great industry’s sustainability.

Michael J. Adelman President & CEO, Ohio Bankers League

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ASSOCIATION STAFF

4215 Worth Avenue, Suite 300 Columbus, OH 43219 Fax (614) 340-7596

Michael Adelman President & CEO madelman@ohiobankersleague.com (614) 340-7616

Taylor Daniel Executive Assistant tdaniel@ohiobankersleague.com (614) 340-7602

Julie Kiplinger Education Manager jkiplinger@ohiobankersleague.com (614) 340-7612

Gauri Airi Executive Director, Ohio Bankers Benefits Trust gairi@ohiobankersleague.com (614) 340-7598

Cynthia Dondrea Controller cdondrea@ohiobankersleague.com (614) 340-7604

Evan Kleymeyer Senior Vice President of Government and External Relations ekleymeyer@ohiobankersleague.com (614) 340-7605

Carol Allerding Education Manager callerding@ohiobankersleague.com (614) 340-7618

The Ohio Record is published quarterly by OBL BankServices.

Brenda Arnold Products & Services Manager, OBL BankServices barnold@ohiobankersleague.com (614) 340-7620

POSTMASTER: Send address changes to Ohio Record at the address listed above.

Steve Bare Database Manager sbare@ohiobankersleague.com (614) 340-7607

Statements and opinions expressed in Ohio Record are not necessarily those of the OBL.

Don Boyd Vice President of State Government Relations and General Counsel dboyd@ohiobankersleague.com (614) 340-7608 Michelle Crume Senior Vice President, OBL Executive Director, OBL BankServices mcrume@ohiobankersleague.com (614) 340-7622

Rita Hinkle Administrator, OBBT rhinkle@ohiobankersleague.com (614) 340-7609 Paige Houlihan Products and Services Coordinator, OBLBankServices phoulihan@ohiobankersleague.com (614) 340-7613 Sarah Husk Education Specialist shusk@ohiobankersleague.com (614) 340-7610 Audra Johnson Director of Communications ajohnson@ohiobankersleague.com (614) 340-7621 Susan Poling Jones Professional Development Director spoling@ohiobankersleague.com (614) 340-7611

Kimberley Mason Higher Education Partnership Manager kmason@ohiobankersleague.com (614) 340-7601 Jennifer Osburn, CPA CFO, Chief Administrative Officer josburn@ohiobankersleague.com (614) 340-7606 Anna Scheurer Customer Service Specialist, OBBT ascheurer@ohiobankersleague.com (614) 340-7591 Shannon Strow Government Relations Coordinator sstrow@ohiobankersleague.com (614) 340-7614 Christine Zeek Employee Benefits Manager, OBBT czeek@ohiobankersleague.com (614) 340-7617

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OFF TO THE RACES

THE OHIO GENERAL ASSEMBLY AND CONGRESS KICK OFF NEW SESSIONS The beginning of a new legislative session allows for a reset from the day-to-day public policy discussions that dominated the previous term. There are new opportunities and partnerships, as freshman legislators add their voices and experience to their respective caucuses. The OBL, with guidance from our Government Relations Council, starts every new legislative session with a list of priorities to accomplish at both the state and federal level. Having these goals for the next two years allows the OBL to be consistently pushing pro-banking public policy each day in Columbus and in Washington, D.C. As Congress and the General Assembly started in earnest mid-January, there was no shortage of proposed or introduced legislation that would somehow affect the banking industry. In fact, just two months into the new session and legislation has been introduced or proposed affecting every priority laid out by the OBL at the beginning of the year.

STATE PRIORITIES 135TH GENERAL ASSEMBLY PROACTIVE

1

Advocate for increased use of technology by local governments and to allow for electronic recording title searches.

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Clarify Ohio’s lien release statute, ORC 5301.36, to ensure banks are not unnecessarily targets of litigation.

3

Enhance Ohio’s elder exploitation laws to increase communication to banks following reporting and to establish the ability for banks to put a hold on a transaction where elder exploitation is suspected and provide immunity for or for not doing so.

4

Investigate and explore ways to protect against misleading advertising to consumers from non-bank entities based on trigger leads when a bank contacts credit reporting agencies on behalf of a consumer.

5 6

Advocate for lender notification when overdue taxes are purchased by a third party.

Explore opportunities to reestablish a credit for subchapter S corporation banks to prevent potential double taxation issues.

ONGOING/DEFENSIVE

1

Protect against government intrusion into bank decision making including against forced access and responsible banking legislation.

2

Advocate against any expansions of credit union powers or authority.

3 4 5

Support efforts to improve Ohio’s legal climate for businesses.

Continue our advocacy for long term reauthorization and reforms of the National Flood Insurance Program.

Assist efforts to increase access to housing and to increase development of new housing supply.

5 6

Ensure any data privacy legislation brings other data holders up to the level of banks rather than layering on additional requirements for the industry.

7

Advocate for sensible cryptocurrency regulation that protects consumers and banks that might partner with the industry.

6 7

Safeguard against efforts to reallocate bank assessment dollars for non-banking purposes.

8

Guard against unnecessary increases in banks’ tax burden.

Defend against efforts to create new bank-like charters without subjecting businesses to the same requirements as banks or that would create consumer confusion.

FEDERAL PRIORITIES 118TH CONGRESS PROACTIVE

1

Advocate for the passage of the SAFE Banking Act, to allow Ohio banks to provide financial services to the cannabis industry and ancillary businesses.

2

Pass legislation to remove taxation on income from farm real estate loans that are made by FDIC back financial institutions.

3

Enhance regulatory requirements for industrial loan companies, by requiring them to comply with the Bank Holding Company Act.

Protect against any legislative efforts to outlaw overdrafts or other legitimate fees banks are legally allowed to charge for their services.

Don Boyd VP, State Government Relations & General Counsel, Ohio Bankers League dboyd@ohiobankersleague.com

Evan Kleymeyer Senior Vice President of Government and External Relations, Ohio Bankers League ekleymeyer@ohiobankersleague.com

ONGOING/DEFENSIVE

1

Protect against government intrusion into bank decision making including against forced access and responsible banking legislation.

2 3

Protect against any expansions of credit union powers or authority.

4

Opposes any legislative proposals that would impose a national 36% “all in” interest rate cap on most consumer loans.

Oppose efforts to create a Central Bank Digital Currency which will compete directly with banks for deposits.

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CEO SYMPOSIUM MARKS 20TH YEAR Leaders everywhere have heard Coach Vince Lombardi’s well-known quote “Leaders are made, they are not born.” But are they as familiar with the thought that great leaders are never self-made? Attendees at the 2023 OBL CEO Symposium on May 16 & 17 will hear from opening keynote speaker Kent Julian, CSP, who maintains that the best leaders are shaped by circumstances and environments – and even more – are shaped by other leaders who influence them. They are, in his words, never self-made.

Additional Sessions Include: Beyond Cash Compensation Mike Blanchard, CEO, Blanchard Consulting

This year’s event marks the 20th time that the OBL will present the CEO Symposium. The association invites CEOs and other top bank executives to attend this special program featuring CEO Roundtables Discussions and the popular Networking Reception following sessions on day one.

Fintech Transformers: The Rise of Primacy Dave DeFazio, Partner, StrategyCorps

In addition, Thomas Hoenig, former vice chair of the FDIC and a distinguished senior fellow at the Mercatus Center at George Mason University, is providing a closing keynote as he addresses “The Five Trends Defining a Community & Regional Bank’s Future.”

Sight vs. Vision: Preparing Your Balance Sheet for the Future Scott Hildenbrand, Head of Piper Sandler Financial Strategies and Piper Sandler Hedging Services, LLC

Hoenig notes, “Regional and community banks are under siege as regulatory and market trends challenge their business model. With each new regulatory rule, for example, their regulatory cost increase disproportionately compared with their larger rivals. Their cost of capital is higher than that of the largest banks and nonbank financial firms with which they compete, and is a serious disadvantage in providing new services to their customers. Surviving such challenges is a daunting task … but can be done.”

Find out how at the 2023 event.

Registration For assistance please contact Sarah Husk at shusk@ ohiobankersleague.com

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Hilton Room Block Rooms are available for $215/night at the Hilton Columbus at Easton through April 24 or while rooms remain. Contact 614-414-5000 or check the website for an online reservation link.

Strategic Planning at a Time of Uncertainty Mikelle Brady, Partner, Profit Resources, Inc. Working with Fintechs and Demystifying Core Banking API Integrations Kyle Charette, VP Client Services, COCC, Inc. And more!

­

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Baker Schools Great Educational Opportunities

Baker Bond School

Baker ALM School

Oklahoma City, OK Omni Oklahoma City Hotel

Oklahoma City, OK Omni Oklahoma City Hotel

May 10-11, 2023

August 8-9, 2023

Cost: $495

Cost: $495

E

T

What You Will Learn

What You Will Learn

ducation is the foundation of performance for investment portfolio managers, and that is why The Baker Group continues to bring their history of educational experience to a bond school designed specifically for new portfolio managers and those needing to learn the fundamentals of fixed income investing. The Baker Bond School will give attendees the knowledge to better understand the various types of securities available, how to analyze them effectively, and how to use that knowledge to build and manage a highperformance investment portfolio within the framework of the entire balance sheet.

• Fundamentals of bonds and bond market investing • Understanding the impact of the economy, monetary policy, and interest rates on the bond portfolio • Demystifying the complex world of bond analytics including pricing, duration, convexity, and total return • Characteristics of high performance portfolios and how industry allocations have changed over the years • Introduction to bond types, and the pros and cons of including each in your investment portfolio • How to develop an effective municipal credit analysis process 12.5 hours of CPE credits will be earned for your attendance.

he Baker Group pioneered Asset/Liability Management (ALM) more than forty years ago when they developed the first computer based ALM program designed specifically for community banks in 1979. Since then, we have spent four decades educating financial institutions how to effectively use ALM strategies to manage risk and maximize performance. The Baker Group has developed an Asset/Liability Management School designed specifically for members of the ALCO and those needing to learn the fundamentals of ALM. The Baker ALM School will give attendees the knowledge to better understand the “who, what, why, and how” of ALM and the ALCO process.

• Fundamentals of asset/liability management including what it is and why we do it • Understanding the impact of the economy, monetary policy, and interest rates on the earnings and capital of the institution • Regulatory expectations to ensure you are always in compliance with the latest guidance and prepared for your next exam • Practical methodologies and recommendations for how to develop assumptions that are institution specific and regularly reviewed, stress-tested, and back-tested 10 hours of CPE credits will be earned for your attendance.

Who Should Attend These schools are designed for Presidents, CEOs, CFOs, and members of the ALCO committee. Directors and anyone else involved in the asset/liability management process will also benefit from The Baker Group schools.

For more information and to register, go to GoBaker.com/bond-school-2023.

12 | OHIO BANKERS LEAGUE

For more information and to register, go to GoBaker.com/alm-school-2023.

Member: FINRA and SIPC www.GoBaker.com | 800.937.2257 Oklahoma City, OK | Austin, TX | Dallas, TX | Houston, TX Indianapolis, IN | Long Island, NY | Salt Lake City, UT | Springfield, IL

The 2023 Next Generation Advisory Board Colton Barnhart Peoples State Bank Lindsay Cloud Southern Hills Community Bank – NGAB Chair Meagan Conley First Mutual Bank FSB

RISING LEADERS SERVE THE INDUSTRY; PLAN 2023 NEXT GEN CONFERENCE Succession planning is nothing new – yet is more important than ever in today’s fast-paced world. As banks work to develop and retain young talent, executive teams want to help rising stars to see the value they play in organizations today, tomorrow and well into the future. More than 10 years ago, the OBL formed the Next Generation Advisory Board (NGAB) to ensure the Ohio banking industry will be in strong hands. These industrious leaders have been instrumental in the development and success of the annual OBL Next Gen Conference, now in its 11th year.

The 2023 NGAB is no different, as the group of 19 bankers lead the OBL team once again for the June 8 & 9 event in Columbus.

Eric Decker Portage Community Bank Dakota Durbin Mechanics Bank Chris Fisher LCNB National Bank Scott Gnau First Federal Savings & Loan Association of Lakewood Rob Haley The Hocking Valley Bank Christina Hammock First Federal Community Bank of Bucyrus Nate Jordan Westfield Bank Sabra Kershaw First Commonwealth Bank

The conference will feature a leadership keynote workshop entitled: G.R.O.W Your Leadership with Steve Lowisz, Chief Executive Officer of Qualigence International, a valued OBL affiliate member. Attendees will walk away with a game plan to “Be Effective, Be Inspiring and Be Recognized”. Other highlights include topic-specific roundtable discussions led by members of NGAB, a CEO panel, and breakout sessions on topics such as time management & delegation.

Matt Kocin Banc Consulting Partners

“The OBL thanks those banks and bankers who support this valuable program every year,” said Audra Johnson, OBL Director of Communications and staff liaison to the Next Gen Advisory Board. “We encourage banks who are not already involved to take another look at the program and, most importantly, the valuable takeaways.”

Shalana Shreffler First State Bank

NGAB Chair Lindsay Cloud, SVP/CFO, Southern Hills Community Bank, added, “The peer discussions, new connections and words from CEOs on the executive panel are all worthy highlights each year. They leave bankers inspired and motivated to serve their banks and communities well.”

Watch the website for complete agenda and registration details. Questions can be directed to Sarah Husk at shusk@ohiobankersleague.com.

Brian Lowe First Financial Bank Paul Revelson 1st National Bank

Cristy Siegrist LCNB National Bank Jennifer Vastano First National Bank of Pandora Kelsey Wells The Citizens National Bank of McConnelsville Courtney Wright The Savings Bank

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Growing Pains?

MAIN OFFICEOPERATIONS

How to avoid the pitfalls and maximize your investment.

If you are planning an expansion or structural change of your Main Office Operations, there are plenty of things to consider. But, like many projects, it’s all in the preparation. So before you do anything, it’s important to solicit input from your management team to ensure everyone has

the same goals in mind; analyze your business model to confirm the growth can be supported; and review staffing needs to determine space requirements now and down the line. But this is just the start of an effective expansion plan.

“I’ve got to hire 3 or 4 more people…

where am I going to put them?”

Growing pains are a positive sign, whether the growth is organic or comes from mergers and acquisitions.

It means business is good. As stressful as it might be, creating space to meet additional staffing and operational needs can be accomplished by following some simple, time-proven steps.

by James G. Caliendo

President & CEO, PWCampbell

Don’t ignore the elephant in the room Clutter. Main Office Operations are often clogged with paper. And while the industry is moving toward going paperless, Main Office Operations still must comply with document storage requirements. Even though digitally imaged banking documents are easily

First off, think beyond today… and even tomorrow. The biggest mistake made by those tasked with meeting searchable and accessible to clients via online and mobile banking, not all banks have the time or resources to jump on the paperless bandwagon. But one thing is certain – paper reduction is here to stay. According to a survey conducted

by Fidelity National Information Services, some banks even place up to 98% of documents into a shredder once they have been successfully digitally imaged––talk about freeing up space!

What’s more, many buildings are already cluttered with antiquated equipment and other general storage. This causes the same problems as paper clutter.

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the space needs for burgeoning Main Office Operations is looking for the quick fix. Taking over a conference room or boardroom is shortsighted.

Transforming an office into open space with cubicles to squeeze in more people or moving whole groups to ancillary buildings is tempting, but not a longstanding plan. Though expeditious, these efforts are shortterm at best and really counterproductive to the integrity of your operations. What happens in two years time? Or four? With the next wave of growth, the whole process (and disruption) starts all over again.

Dealing with Legacy Structures (and their limitations) A commonly held fallacy is that a renovation is always more cost beneficial than a new-build.

To be frank, many Main Office Operations buildings show the ravages of time. Some of these older buildings might have environmental issues, electrical wires running all over the place, cramped quarters, and paper everywhere. It’s just not a comfortable or healthy environment… and this will absolutely cut into efficiency and employee satisfaction.

Before beginning any construction, a structural and code review of your existing structure can give you the data to make the right decision. Does the current layout still meet your needs or has the integrity of the operation been

lost through add-ons and jerry-rigs to handle changing staffing requirements?

Does the configuration make jobs easier or worse? Can the layout be reconfigured to meet your growing demands? Is the building run down or does it have environmental issues?

Is it ADA-compliant and up to all building codes? Is the cost for upkeep prohibitive? Will it be more expensive to make the necessary changes rather than to build new?

BEFORE AFTER

Side goals of a renovation, of course, are improved efficiency and cost-savings.

The temptation is to simply replace the windows or HVAC in hopes of cutting operation costs, but that can also be short sighted. Other key considerations include whether your expansion plans include adding a wing or additional floors, or moving load bearing supports and walls. These are all factors to be considered before making any decisions to stay in an existing structure or move operations to someplace new. Making a data driven decision will include all the factors above as well as the historic nature or community importance of your building, the price of real estate in the area, the costs involved in bringing an existing structure up to code and the ramifications of write-offs if you choose to move operations to a new location. In all cases, exhaust the potential of your existing site and building FIRST.

Doing a Deep Dive into Employee Issues One final factor in your building plans — the employee. Today it’s not enough to simply make more space. It’s also about making more of the space.

Will your new space be ADA-compliant so that you can take advantage of talent that may be differently abled?

Is the space well planned so that operations are streamlined and efficient?

Is it appealing to the new breed of employees who are looking for an “environmental feel” to their office?

Does it have the “well-building” qualities that today’s employees are finding at other retail businesses?

“Well building” is a movement that some employers are using as a recruitment tool to attract the best and brightest talent and also to retain quality employees. It goes beyond green building, natural lighting, clean air and water, to create a comfortable setting – a space that feels homey and welcome.

It’s all about bringing home into the workplace with different generational areas like exercise rooms, lounges, cafeterias, social areas, downtime areas, meeting areas, etc. Space planners

are realizing that staff – no matter the industry – are now looking beyond salary and position and career. They’re looking at how their day is going to be better because of where they work.

The bottom line: it takes a systematic and professional approach to help you get the most out of your Main Office Operations expansion. This means analyzing the positives and negatives of your office space as it exists and then adding in the most important variable – the potential gains of your renovation or new-build plans. Partnering with an experienced provider who is knowledgeable in all of the above areas with a proven history of execution can help you get the big picture and maximize your operations investment leaving you to do what you do best….run the bank.

Get the big picture. By charting out the positives, negatives and potential for improvement across several areas, professional space planners can ensure you get the most out of your new space.

James G. Caliendo is a former bank executive and now President and CEO at PWCampbell, a 113 year old design-build and retail services firm. In the past 20 years alone, under Jim’s direction, PWCampbell has worked with over 500 financial institutions influencing millions of square feet of retail and operational space to create engaging, impactful, and scalable solutions for every sized facility project.

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ECONOMIC SUMMIT RETURNS IN-PERSON!

Ray Langen, Scott Wiley, Beth Ann Bovino, Michael Adelman and Andrew Deye pose for a group photo at the conclusion of the successful 2023 Economic Summit.

S&P ECONOMIST SPEAKS TO "HALF FULL ECONOMY" 2023 is well underway and Ohio bankers continue to pivot their strategies to meet the changes and updates head-on that surround daily life in the financial services industry.

But what is coming next in this “Half Full Economy”? More than 250 attendees heard an economic forecast firsthand from Beth Ann Bovino, award-winning economist with S&P Global, at the 2023 Economic Summit. While Bovino predicts a shallow recession, she states that the dollar remains strong. Bovino also elaborated to say that a couple more rate hikes are coming from the Federal Reserve this year, but that they will not be as drastic as in previous hikes and that inflation has already begun to curb, just at a slower pace.

One attendee said, “Bovino’s insight into economic trends and conditions was excellent. Also, you can’t discount the networking portion of the event, it is most certainly worth my time to attend.”

The OBL was pleased to partner with the Ohio Society of CPAs at this year’s event and closed the program with an open mic Q&A with OBL President & CEO Mike Adelman, OSCPA President & CEO Scott Wiley and Bovino.

THANK YOU TO SPONSORS

The day marked the 12th year for the program and the first in-person Summit since February 2020. The program was once again emcee’d by Ray Langen, regional director, StrategyCorps, who also hosted the 2022 virtual program.

PRESENTING

Andrew Deye, Vice President of Strategy for JobsOhio, was also on-hand to share insights into “Building a Championship Economy” and an update on development around the state. Deye noted the outlook for Ohio is incredibly favorable for the foreseeable future.

EVENT

16 | OHIO BANKERS LEAGUE

OBL BankServices KEYNOTE

S.R. Snodgrass, P.C. Federal Home Loan Bank of Cincinnati OCCH Wesney Construction

Andrew Deye of JobsOhio gave the audience an economic outlook for Ohio that was favorable.

The audience was able to ask questions of Beth Ann Bovino after her presentation on the “Half Full Economy.”

Beth Ann Bovino of S&P outlined her forecast for the 2023 economy both at home and abroad.

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SPRING 2023 ISSUE

| 17

ALM IN 2023: REVISITING ECONOMIC VALUE OF EQUITY (EVE) Bank balance sheets were adversely affected in multiple ways by the speed and magnitude of the rising rate environment in 2022. Most noticeable was the effect on investment portfolios which experienced significant depreciation in market value, some to the point where capital became severely stressed and access to liquidity restricted. The problems had nothing to do with asset quality, poor lending practices or anything credit-related.

It was entirely a function of the mathematics of rising interest rates. Even banks that owned nothing but US Treasuries experienced heavy unrealized losses. This fact and the lessons learned point out the critical importance of reliable tools and sound processes for managing liquidity and interest rate risk.

Asset/liability management (ALM) is the coordinated process of defining, measuring, and managing the financial risks faced by bank balance sheets including price risk, liquidity risk, and interest rate risk. Interest rate risk specifically is the risk to earnings or capital arising from movements in interest rates. Bank managers most often focus on the risk to earnings and income rather than capital. Capital at risk, however, is an important point of focus for sound macro-management, and it’s something that warrants a deeper understanding.

Managing capital at risk involves measurement of the economic value of equity or EVE. This concept gauges the impact of interest rate changes on fair market

18 | OHIO BANKERS LEAGUE

values of asset, liabilities, and equity. Using discounted cash flows and standard valuation methodology, EVE captures the change in economic value of the bank even though that change may not be reflected in the bank’s accounting books and records.

Consider the underlying market value of bonds in the investment portfolio. We all know that if interest rates rise, bond prices fall. This is the manifestation of price risk. If we’re focused only on bonds in isolation, though, we can’t know how the rate changes affect the overall economic value of the balance sheet. After all, loans and deposits also have an economic value just like bonds. If market interest rates rise sharply, then existing fixed-rate loans will be worth less from an economic standpoint.

Indeed, any financial asset or liability—anything with a cash flow—will have an underlying value that fluctuates as interest rates move up and down. Whereas the value of assets will move inversely to interest rates, the value of liabilities will move directly with rates. This is because existing fixed rate deposits become more valuable to the institution if market interest rates rise.

So how do we calculate economic value of equity?

Remember from the standard accounting relationship that “assets equals liabilities plus owners equity.” If we can calculate the fair market value of assets and liabilities, then we can simply back into the value of equity capital. Moreover, if we can project the changed value of

assets and liabilities under different rate environments, we can measure projected changes in EVE as well. This is precisely what we do when we measure interest rate risk from the economic perspective.

Monitoring changes in the economic value of equity is valuable in that it provides a comprehensive measurement of interest rate risk. It captures the effects of optionality and other important influences on value not contained in static accounting-type reports.

The economic valuation method also reflects those sensitivities across the full maturity spectrum of the bank’s assets and liabilities.

EVE relies on methodological and calculation assumptions, most notably the discount rate assumptions used to calculate the present value of assets and liabilities. It is relatively easy to calculate the market value of a bond with a fixed rate of interest and a fixed maturity. It is considerably more difficult and far less objective to calculate the economic value of a savings account with no fixed maturity and an administered rate subject to change by bank management. That’s why institution-specific assumptions must be based on the unique characteristics of each bank. A robust bankspecific “open/close” study is preferable for most banks.

A cookie cutter approach can give misleading results.

Measuring interest rate risk involves tracking dynamic and complex relationships within a bank’s balance sheet.

To do it properly, we must have good input, reasonable assumptions, and sound methodology. The calculation and monitoring of changes in the economic value of equity is an important part of the process. And in the final analysis, we cannot properly manage the financial risk of our bank without a clear understanding of the big picture.

Jeffrey F. Caughron Senior Partner The Baker Group LP

Jeffrey F. Caughron is a Senior Partner with The Baker Group LP. Caughron has worked in financial markets and the securities industry since 1985, always with an emphasis on banking, investments, and interest rate risk management. Contact: 800-937-2257, jcaughron@GoBaker.com.

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ENDORSED OBL BUSINESS PARTNER SPRING 2023 ISSUE

| 19

TM

BE AWARE OF EMERGING RANSOMWARE RUSES HITTING THE BANKING INDUSTRY

rging Ransomware ruses hitting the banking industry

ncern for banks for many years, especially related to ransomware threats and executives cited cybersecurity as a top priority according to a 2022 survey ent Association.

e nothing new, this SafeAlert addresses a few emerging trends that dscape from the environment of only a few years ago and offers some best exposure.

Cybersecurity has been a key concern for banks for

e threat actorsmany target critical supply chain vendors, hoping toto inflict serious financial threats years, especially related ransomware companies downstream of that vendor. By increasing their “blast radius” and creating and tactics.

85%their of community bank executives aximize ransom amounts and increase odds of getting paid.

For example, a 2021 cited 1,500 customers of an IT service provider.

Another highly publicized event, the cybersecurity as a top priority according to 2020 a 2022 00 users of their system management software.

survey conducted by the Risk Management Association.

s of only partially encrypting files. It is designed to increase the speed of a malware he malware will avoid detection by security software.

While losses from ransomware are nothing new, a few

cerning situation where threat actors gain additional leverage over their victims by both emerging need to be addressed that distinguish g sensitive information such trends as PPI of your customer base.

The hackers then threaten to The potential the reputational damage to yourlandscape bank has the potential be aenvironment greater threat current threat from tothe of curity pundits opine threat actors view extortion of exfiltrated data to be more attractive

only a few years ago. Also, what best practices may mitigate your exposure? n extremely alarming trend where novice threat actors, lacking the sophistication or time

ansomware variants on the Dark Web from proven operators. Think of RaaS as pay-fory code and operational to launch and campaign Supplyinfrastructure Chain Attacks aremaintain thosea ransomware where threat actors

target critical supply chain vendors, hoping to inflict serious financial and reputational damage to the many ff awareness and education are critical as people are the most vulnerable entry point for companies downstream of that vendor. By increasing raining that emphasizes the latest attack vectors is your best protection. their “blast radius” and creating major disruption, s an authentication method that requires users to provide two or more verification criminals seek maximize ransom MFA amounts ing beyond standard username and to password log in requirements. is a core and ne and should be part of your bank’s security protocol. increase their odds of getting paid. For example, a 2021 event your bank’s cybersecurity safeguards fail, it is critical that you have an incident ransomware attack affected at least 1,500 customers of should clearly outline what procedures to enact during a threat. It should include your IT service provider.

Another publicized our insurancean provider’s breach response services and clearly highly outline the responsibilitiesevent, gular testing the and updating the plan is highlyhack, recommended as threats evolve.

2020ofSolarWinds affected over 18,000 users of e/Ransomware-trends-statistics-and-facts their system management software.

formation or to view this SafeAlert® online. To subscribe to SafeAlert, request reprints or if Intermittent Encryption is the process of only partially or articles, contact marketing@abais.com or 800-274-5222.

encrypting files. It is designed to increase the speed of a malware attack, thereby increasing the odds the malware will avoid detection by security software.

ch may actually arise, and the terms, conditions, exclusions, and limitations in any policy in effect at that ade that any specific insurance coverage applies. This information provides guidance and is not intended local laws, rules or regulations. ABA Insurance Services Inc. (“ABAIS”) does not warrant that all potential an be controlled. The liability of ABAIS and its affiliates is limited to the terms, limits and conditions of the BA Insurance Services Inc. dba Cabins Insurance Services in CA (CA license #0G63200), ABA Insurance ance Agency Inc. in MI. 3401 Tuttle Road, Ste 300, Shaker Hts, OH, 44122 012023.SA20

Double Extortion is a particularly concerning situation where threat actors gain additional leverage over their

20 | OHIO BANKERS LEAGUE

Be aware of emerging Ransomwar

Cybersecurity has been a key concern for banks for m tactics. 85% of community bank executives cited cybe conducted by the Risk Management Association.

While losses from ransomware are nothing new, this S victims by both encrypting your system and exfiltrating distinguish the current threat landscape from the envi sensitive information such as PPI of your customer base. practices that may mitigate your exposure.

The hackers then threaten to releaseSupply theChain data if they are Attacks are those where threat actors target crit and reputational damage to the many companies downstream not paid.

major disruption, criminals seek to maximize ransom amounts ransomware attack affected at least 1,500 customers of an IT

hack, affected 18,000 users of their system The potential reputational damage toSolarWinds your bank hasover the Encryption is the process of only partially encryp potential to be a greater threat than Intermittent your encrypted attack, thereby increasing the odds the malware will avoid det system. Cybersecurity pundits opine Double threat actors view concerning situation where t Extortion is a particularly encrypting your system and exfiltrating sensitive information s extortion of exfiltrated data to be more attractive than release the data if they are not paid. The potential reputationa than your encrypted system. Cybersecurity pundits opine thre mere ransomware. than mere ransomware.

Ransomware as a Service (RaaS) is an extremely alarming tre

Ransomware as a Service (RaaS) istoan extremely develop their own code, purchase ransomware variants on t use malware.

It provides the necessary code and operational alarming trend where novice threat actors, lacking against your bank. the sophistication or time to develop their own code, Steps to Mitigate Ransomware purchase ransomware variants on theDark Security Web Awareness Training. Staff awareness and educat cyber-attacks. Regular, ongoing training that emphasizes from proven operators. Think of RaaS as pay-for-use  Multifactor Authentication. MFA is an authentication met malware. It provides the necessary code and operational factors to gain system access, going beyond standard use of proper cyber hygiene and should be part o infrastructure to launch and maintain a component ransomware  Incident Response Plans. In the event your bank’s cybers campaign against your bank. response plan in place. The plan should clearly outline w

internal IT resources as well as your insurance provider’s of the various team members. Regular testing and updati

Steps to Mitigate Ransomware

Source: techtarget.com/searchsecurity/feature/Ransomware-trends-statistic

Visit abais.com for more loss control information or to view this

you have questions about this newsletter or articles, contact marke  Security Awareness Training. Staff awareness and The facts of any potential claims situation which may actually arise, and the education are critical as people are the vulnerable time, aremost unique. Thus, no representation is made that any specific insuranc as a legal interpretation of any federal, state or local laws, rules or regulation entry point for cyber-attacks. Regular, ongoing training hazards or conditions have been evaluated or can be controlled. The liability insurance policies issued by ABAIS. © 2023 ABA Insurance Services Inc. db that emphasizes the latest attack vectors is your best Services of Kentucky Inc. in KY and ABA Insurance Agency Inc. in MI. 3401 protection.

 Multifactor Authentication. MFA is an authentication method that requires users to provide two or more

verification factors to gain system access, going beyond standard username and password log in requirements.

MFA is a core component of proper cyber hygiene and should be part of your bank’s security protocol.  Incident Response Plans. In the event your bank’s cybersecurity safeguards fail, it is critical that you have an incident response plan in place. The plan should clearly outline what procedures to enact during a threat.

Patricia P. Williams

It should include your internal IT resources as well as your insurance provider’s breach response services and clearly outline the responsibilities of the various team members. Regular testing and updating of the plan is highly recommended as threats evolve.

Source: https://www.techtarget.com/searchsecurity/feature/ Ransomware-trends-statistics-and-facts

ABA Insurance Services is OBL’s Endorsed Business Partner for D&O and Cyber Liability insurance, and bond coverage for financial institutions, including trust organizations and banks in formation. For over 35 years, the program has been a long-term, reliable and stable source of insurance committed to serving and supporting the banking industry by providing quality insurance and excellent customer service. ABA Insurance Services can work with your insurance agent or inhouse insurance representative. For more information about the program, please visit www.abais.com or contact Patricia P. Williams, CPCU at 216-220-1280 or ppwilliams@abais.com.

Additional loss control tools and information are available at www.abais.com/insights.

The facts of any potential claims situation which may actually arise, and the terms, conditions, exclusions, and limitations in any policy in effect at that time, are unique. Thus, no representation is made that any specific insurance coverage applies. This information provides guidance and is not intended as a legal interpretation of any federal, state or local laws, rules or regulations.

ABA Insurance Services Inc. (“ABAIS”) does not warrant that all potential hazards or conditions have been evaluated or can be controlled. The liability of ABAIS and its affiliates is limited to the terms, limits and conditions of the insurance policies issued by ABAIS. © 2023 ABA Insurance Services Inc. dba Cabins Insurance Services in CA (CA license #0G63200), ABA Insurance Services of Kentucky Inc. in KY and ABA Insurance Agency Inc. in MI. 3401 Tuttle Road, Ste 300, Shaker Hts, OH, 44122 012023.SA20

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SPRING 2023 ISSUE

| 21

ARE PASSWORD MANAGERS SECURE? The recent LastPass breach reminds us there is no way to stay 100% safe online and highlights some of the risks associated with using a central vault to store passwords and other secrets. However, password managers (PMs) remain the most secure way to protect passwords, even though they are not perfect.

For example:

PMs allow you to store strong, unique passwords for all the dozens or hundreds of websites, web applications, and services a user utilizes regularly. Additionally, PMs:

• Cloud solutions work with multiple devices and detect weak or reused passwords; however, your data is on someone else’s server.

• Enable the user to log in without typing the password every time, protecting them from keyloggers.

• On-premise solutions may appear to be the safest option, but they provide complications in maintaining in-house IT infrastructure and data backups which may increase the cost.

• Allow users to utilize stronger passwords that don’t need to be written down.

• Encourage users to use different passwords for every account.

• Provide some protection against credential harvesting phishing emails, as they will not populate credentials into spoofed sites.

While keeping all your passwords in one location is an inherent risk with PMs, the trade-off is worth the risk.

Most PMs utilize 256-bit Advanced Encryption Standards, zero trust (your master password is encrypted before leaving your device), and two-factor authentication (2FA) to protect password vaults.

Types of Password Managers There are three types of PMs: device-based, cloudbased, and on-premise. Each class is an exercise in balancing the equation of security and convenience.

22 | OHIO BANKERS LEAGUE

• Device-based solutions run locally on a device that limits sharing the password vault on multiple devices, do not detect weak or reused passwords, and do not have the security controls a commercial PM does.

Note: Using your browser's “Save Password” feature to save passwords is not considered a safe or recommended way to store passwords.

While some inherent risk stems from the mere use of any PM solution, understanding the risk of each solution should be obtained during the due diligence and vendor management process. Any risk remaining after the solution selection should be addressed in the IT risk assessment to ensure the solution’s risk score is acceptable to your organization’s risk appetite.

Things to Consider When Changing Password Managers If your organization currently utilizes LastPass as a password management solution, it is absolutely appropriate to evaluate alternate PM products and solutions, as there are many viable password management vendors in the market. However, it is recommended that your organization only switches PM providers after doing your homework.

Keep in mind your current investment with the incumbent provider. For example, even if you believe it’s in your organization’s best interest to switch PM providers, what does that transition look like? Does your current PM provider make it easy for you to transition all your sites and passwords to another platform, or will that transition be time-consuming and complicated?

For more information, contact Cole Schlumbohm at 605-496-3040 or cole.schlumbohm@sbscyber.com.

SBS helps business leaders identify and understand cybersecurity risks to make more informed and proactive business decisions. Learn more at www.sbscyber.com.

Shane Daniel SVP Information Security Consultant/Regional Director SBS CyberSecurity

Alternatively, your organization may wish to shift from a cloud-based password manager to a device-based or on-premise version. Still, it is recommended that you evaluate the pros and cons of making such a switch. For example, if you currently have users utilizing a cloudbased PM and want to shift to an on-premise PM, what functionality will your users lose in that switch?

Terry Kuxhaus Senior Information Security Consultant SBS CyberSecurity

If you are evaluating your password management solution, it is recommended that you do the proper homework (vendor due diligence and IT risk assessment) on alternative PM solutions to ensure appropriate security controls and risk mitigation measures are in place. Only once you’ve done the appropriate homework can you determine the best path forward for your organization based on an informed business decision. ** SBS CyberSecurity does not partner with nor endorse any password management vendors or solutions.

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SPRING 2023 ISSUE

| 23

CEO, Brian Young, joins his valuable management team around the board room table at The Union Bank Company's operation center.

A CEO WITH A PASSION FOR SERVICE, TEAMWORK AND COMMUNITY

AN INTERVIEW WITH THE NEW OBL CHAIR, BRIAN YOUNG Audra Johnson, OBL’s Director of Communications, sat down with newly elected Chair of the Board of Directors, Brian Young, for a discussion about life, banking and everything in between.

I could tell immediately this discussion was going to be different as I was setting up to interview Brian. We had planned to do some photographs of him individually while I was at The Union Bank Company in Columbus Grove, Ohio, yet Brian insisted he wanted only photos of his team.

“Please don’t focus solely on me, please focus on my team.

Without them, I wouldn’t be in the position I am today.”

That comment set the tone for the rest of the conversation with Brian. His comments on any successes always started with “we” or ended with “us”, and it was clear that his faith based convictions drove his desire to serve others with humility and kindness. He insisted that even that desire should not be credited to him, he was simply trying to share the grace that he had so freely received. In fact, he looks at his newly elected position within the OBL as a way to serve the Association and the entire Ohio banking industry, which have created numerous opportunities for The Union Bank Company and him personally over his 21-year career.

As I interviewed Brian one thing was clear, President & CEO is his title but being a trusted leader is his daily motivation.

24 | OHIO BANKERS LEAGUE

Take us back to the beginning, how did you get your start? Did you always want to be in banking?

It is no secret that I never saw myself being a community banker. I have told many people that it was purely accidental, but a very fortunate accident. I am a CPA by trade and was contacted by the bank’s then CEO with an opportunity to join The Union Bank Company as CFO. That was in October of 2001. I was raised on a farm only five miles from the bank’s operation center, so the decision was a homecoming for me. I have the privilege of working at the bank while also farming ground that has been in our family since 1865. Being a farm kid from a small town in Northwest Ohio, raised by two faithful parents was a great way to understand the importance of integrity, hard work, compassion and need for community.

I am thankful for everyone who has invested themselves in my life over the years. That includes the OBL. What do you foresee during your chairmanship at the Ohio Bankers League? What are your goals?

First, I want to say that I am grateful to have this opportunity to give back to the OBL, which has strengthened my banking acumen and network tremendously over the years. Hopefully I can bring positive change to numerous areas, but if I had to choose one, it would be to inspire other bankers to continue to

“Being a farm kid from a small town in Northwest Ohio, raised by two faithful parents was a great way to understand the importance of integrity, hard work, compassion and need for community.”

see value in all those that they come in contact with at the OBL and find ways to serve each other. Our industry has a wonderful tradition of the willingness of banker helping banker through tough times. I think that trait in our industry needs to continue to strengthen by finding ways to work together to meet the current challenges.

We need to push back against the notion that our industry is simply a zero-sum model.

interaction with your trusted advisor when you need it most. Sure, we have invested in digital infrastructure because we understand it helps our clients manage on the day-to-day, but we’re always going to be here with our doors open when someone needs that personal touch.

What do you see as the strongest differentiator in community banking today?

When interviewing, we try to look for people who can live out our core values. Those include respect, accountability, caring for and serving others. Success through service, giving more than we take. Yes, we’re a for-profit company, and we can never lose sight of that. However, we believe that we must first add value before we can justify keeping some of that value for our services. So, when interviewing, we do our best to find people that are humble but hungry for opportunity. We don’t always get it right and our approach may not be everyone’s “cup of tea” but at the end of the day, we can say we are consistent in keeping with our core values.

It is hard not to feel successful in this area when I look around the room in our leadership meetings and see a room full of talented, compassionate, and motivated members, I am truly privileged to serve with them.

I believe it is our ability to form long lasting relationships with customers. Community banks proved that during the pandemic with the PPP loan program. It was a very scary time for many, and customers were looking to their bank for reassurance and for guidance. Community banks stepped up to the plate and answered the call. Many of our team members were taking customer calls on their cell phones well after business hours, on the weekends and even on holidays. The relationships they had built over years of trusted service gave our clients peace of mind that we were there with them all the way. That is what community banking is all about. In a day where digital technology is touted as the ultimate experience, I still believe that nothing will ever replace face-to-face

I can tell that your team means a lot to you, how do you find talent that fits into your company culture?

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If you were to write an article, “Five Things You Need to Have a Successful Career in Banking” what would those five things be?

I believe that before anyone can even think about the needs to be successful, they must first answer some simple questions of why? Why am I doing this? and Why does it matter? Overtime I figured out that my “why” is that I wanted to have a positive impact on as many people as I can while bringing value to our shareholders, clients, team members and community. While every path will not be the right one, keep going until you find the most effective way to answer your own whys.

1. Integrity - You need to interact with the highest possible degree of integrity in everything that you do and speak. That is the foundation that will allow you to build a successful career over the long run and allow you to sleep well at night. Always remember that integrity is a proactive process, work hard at your personal integrity because it always matters.

2. Passion - Pursue the important things in your life with intensity. Often the most important things in life are hard, however, if you believe in what you are doing it is worth the effort.

3. Creativity - Never stop creating, innovating or being willing to change. The most valuable part of you is your ability to make things better through creative solutions to problems. We always look for those who are problem solvers, they simply make everything better. And remember nothing needs to be wasted, especially failure.

4. Humility - Frankly speaking it is not all about you.

When we focus on putting other’s needs ahead of our own, we inspire others.

5. Balance - Make sure you take time to be available for your family and try not to miss the small opportunities to be a mom, dad, friend, sister, or brother.

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How do you think a person with a successful career in banking might measure that success?

Seeing people where they are and truly caring for them is a very powerful concept. We may never know the total positive impact that we have had on our communities, state or nation, but I do know that change must start somewhere. Why not me? Simply the idea gets me energized. Success often cannot be measured with an incentive plan or an annual review. Each day is a new day to learn and to be led to make an eternal impact on those around me. The blessings from those situations could never be fully captured in a salary or incentive.

What keeps you up at night? Are there things you worry about when it comes to the future of community banking?

That’s an easy one. I continue to be very concerned about the negative impacts of the ever-increasing regulatory burden on a typical community bank’s ability to effectively serve their clients, especially in smaller communities. While I choose to believe that the regulators in Washington D.C. are trying to protect our most vulnerable clients, unfortunately they cater regulation toward the largest of institutions with unintended consequences for the rest. This disproportionate regulatory burden makes it very difficult for smaller banks to survive let alone have funds to invest in needed people or projects in their communities. That was one of the reasons I felt compelled to be so involved with the OBL. Their advocacy truly does work to push back as much bad legislation and regulation as possible.

The other thing that keeps me up at night is the question of, “Will clients continue to see value in real relationships?”

I truly believe that humans were built for relationship, yet it seems like society in general does all it can to find ways to accomplish things without it. I think the key will be how our smaller banks can deliver relationship more efficiently not eliminate it. Computers can be taught to act like they care,

The Union Bank Company was found in 1904 and has grown to encompass 18 branches and three loan production offices throughout Northwest and Central Ohio.

Brian Young, President & CEO, leads a team of approximately 200 team members. The bank’s assets are 1.1B and growing.

but only humans can truly care. I see so many indications in our society that we are moving away from meaningful relationships, which often leads to a lack of empathy, divisive speech, anxiety, and selfishness. It is so easy to tell someone they are not good enough via social media, but it is a little different if are going to see them at a high school basketball game on Friday night.

As a CEO, what aspect of the business takes up most of your time?

“Afterall, I believe that the people make the culture and great culture makes success possible.”

I spend a large amount of my time investing in our team members. It may be an unpopular opinion among my peers, but I find that it is the best use of my time. While I could be analyzing numbers on spreadsheets and looking into technical data, which I really enjoy and comes naturally with my background, I am blessed to have a great team who I can trust to do those things. I find that focusing on them is the same as focusing on culture.

Afterall, I believe that the people make the culture and great culture makes success possible. In that regard I have also learned to embrace the differences on my team and encourage each of them to see the true value in each other. That goes along with my belief that having a diverse group in thoughts, backgrounds and experiences creates a greater chance that we will get to the right answer together. If I made any of that sound easy or that I was even close to perfecting it, that would be incorrect. This concept is the most difficult and rewarding part of my service to our team over the past 10 years.

Fortunately, I work with “mostly” patient people.

What is one last piece of advice you would give to future leaders?

Make sure you fully understand the difference between manipulation and inspiration. Manipulation gets people to do what you want for your benefit; inspiration convinces people to do what is right for the benefit of everyone.

SPRING 2023 ISSUE

| 27

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28 | OHIO BANKERS LEAGUE

REG II 2.0: IT ALL BOILS DOWN TO PINLESS TRANSACTIONS Thanks to the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Federal Reserve has required that banks and other card issuers offer merchants at least two unaffiliated network options for merchants to route debit card payments since 2011.

Of course, the world has changed significantly since then, with card-not-present (CNP) activity to support online purchases rising steadily and becoming turbo-charged during the pandemic.

“A significant percentage of consumer buying has moved to remote, card-not-present (CNP) channels. The Federal Reserve estimates that in 2019, CNP activity controlled 23 percent of debit volume. That has only increased in recent years, spurred by the Covid pandemic.” – Payment Card Routing is All Politics, Digital Transactions.

To address the current environment, the Fed recently issued a modification to Reg II, commonly referred to as “Reg II 2.0,” which will require issuers to enable merchants to choose from at least two unaffiliated networks for CNP debit card purchases online or by phone. The rule, which takes effect on July 1, 2023, was supported by merchant groups and PIN networks and opposed by banks and credit union associations, which contend that requiring them to support PIN networks for PINless transactions would compromise transaction security and result in increasing fraud losses.

The rule change also promises to further squeeze interchange income for financial institutions. In the PRI article, What is Interchange Income and How Do You Calculate It, Mike Holt, PRI partner, discussed interchange income and how it was initially affected by Durbin.

“This modification does not require action on the part of issuers unless the issuer does not have a PIN network that supports PINless transactions,” Jarrell said. “If this is the case, the issuer needs to enable PINless transactions for their PIN network by July 2023.”

The result of this action is that exempt issuers – those with less than $10B in assets that do not have PINless currently enabled will see an immediate hit to interchange income when PINless is enabled, as some online and CNP merchants take advantage of the lower cost option.

“The size of this hit depends on many factors, including which networks are on their cards and the current CNP mix of transactions,” Jarrell said.

Jarrell said if an issuer currently supports PINless transactions, the impact of this regulation may not be significant in the short-term, as merchants are already routing CNP transactions over PINless networks.

However, not all CNP merchants will route transactions over PIN networks.

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Large merchants have negotiated favorable interchange rates with global networks. Additionally, merchants carry liability for standard CNP transactions and will likely choose a global brand for higher risk transactions due to their enhanced fraud prevention capabilities and thus lower fraud risk compared to PINless transactions.

“Longer term, exempt issuers should expect ongoing compression of interchange rates, as merchants and acquirers likely expand use of PINless transactions, forcing global networks to reduce interchange rates to compete for volume,” Jarrell said.

“Small financial institutions that have not already adopted a PINless network are the most impacted party. Like their large bank brethren, they will need to fund projects to make the necessary adjustments to their card portfolio.

Since today they are receiving the higher global network interchange rate, they will incur a drop in non-interest fee income. This comes at a particularly painful time for community banks that are struggling under other hefty regulatory requirements and tough competition from Fintechs.” – Payment Card Routing is All Politics, Digital Transactions Issuers should evaluate their portfolio performance relative to benchmarks to identify opportunities that drive incremental revenue and in turn offset interchange impacts from this changing environment. Relatively small improvements in debit card penetration, active rate and usage can more than offset impacts from the updated regulation.

Jarrell recommends that issuers focus on the following to prepare for the new regulations: • Ensure PINless transactions are supported on the FI’s debit card.

• Evaluate the PIN networks supported on the FI’s cards. There can be sizable differences in interchange, expenses and PINless volume between PIN networks.

An expert consultancy can help evaluate PIN networks for the most favorable mix.

• Understand their portfolio trends and key metrics, especially transaction mix, PIN, SIG and PINless interchange rates, transaction expenses and fraud.

Jarrell also recommends staying engaged with banking associations and local representatives and senators to ensure the negative impact of increasing government regulation, especially to community banks and credit unions, is fully understood and considered in legislative and regulatory development.

• Reg II: Federal regulation that implemented requirements on debit card routing and limits on interchange fees in 2011. Commonly referred to as “Durbin.”

30 | OHIO BANKERS LEAGUE

• Reg II 2.0: Modification to Reg II announced on Oct. 4, 2022 that requires that two unaffiliated networks are available on cards for all transactions, including CNP. This essentially requires that issuers support PINless transactions on their card.

• Non-exempt issuers: Issuers with over $10B in assets that are subject to the Reg II interchange cap.

• Exempt issuers: Issuers with less than $10B in assets that are not subject to the Reg II interchange cap but are subject to the other requirements of Reg II. functionality that clients will experience.

- Dual message transactions: Payment transactions that are composed of two individual messages between merchant and issuer/processor, which are an initial authorization message to get approval for a transaction followed by a “clearing” message that communicates transaction completion and final amount. These are typically global network transactions such as Visa and Mastercard.

- Single message transactions: Payment transactions that include both authorization and clearing in one message and typically use the PIN as a primary fraud protection. Single message network (also known as PIN networks) examples include Interlink, Maestro, STAR, PULSE and NYCE. - PINless transactions: Single message transactions that do not require a PIN. - CNP transactions: “Card Not Present” transactions.

These are transactions primarily conducted online or over the phone.

Profit Resources specializes in identifying profitability improvement areas for financial institutions through revenue growth, cost control, streamlining processes, and effective use of technology. Contact us to learn more about our personalized approach to propel growth and improve profitability.

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32 | OHIO BANKERS LEAGUE

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Building Digital Channels

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Mergers and Acquisitions

BRIAN HUFFORD Backbase

ALAN KAPLAN Kaplan Partners

RICK MARONEY Hovde Group

Risk Management

Cyber Security/Fraud

Challenges of Shrinking Bank Margins

THE MARKETPLACE

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UNDER PRESSURE: COST OF FUNDS STRATEGIES IN A RISING RATE ENVIRONMENT When rates were at record lows for long periods of time, the true value of low-cost funding may have faded into the background; however, low-cost core deposits continue to be the driver of long-term franchise value. Now, with rates continuing to rise – the one-year treasury exceeded 4.5% in January of 2023 – the importance of low-cost funding is once again at the forefront.

The chart below a financial with Under Pressure: Cost is of for Funds Strategies institution in a Rising Rate Environment strong low-and and no-cost By Achim Griesel Dr. Sean Payant funding. In record low-rate environments, itslows cost-of-funds advantage its funding peers When rates were at record for long periods of time, the true valueover of low-cost may haverelatively faded into thesmall background; low-cost core deposits continue to be the was at however, 20-30bp.

When rates started todriver of long-term franchise value. Now, with rates continuing to rise – the one-year treasury rise from 2017 – 2019, it tripled to 60bp. For a $1 billion exceeded 4.5% in January of 2023 – the importance of low-cost funding is once again at the institution, that represents a $6 million increase to the forefront. bottom line. current rising rate lead The chart below is forThe a financial institution with strong low-environment and no-cost funding.will In record lowrate its cost-of-funds its peers wasfrom relatively at 20-30bp. to environments, similar increases inadvantage profit. over The jump ansmall 18bp When rates started to rise from 2017 – 2019, it tripled to 60bp. For a $1 billion institution, that to a 38bp advantage inbottom 2022line.shows the trend that will represents a $6 million increase to the The current rising rate environment will lead to similar increases in profit. The jump from an 18bp to a 38bp advantage in 2022 shows continue to accelerate. the trend that will continue to accelerate.

In addition, deposit growth stagnated in Q2 of 2022 and then started to decline in the second half of 2022. On the macro level, FDIC insured deposits were down for the first time in a long In addition, deposit growth stagnated in Q2 of 2022 and time, and they were down significantly at 2.89% from their peak in Q1 of 2022. A deeper dive then started toshows decline the second of 2022.

On the into the deposit decline that thein majority of the declinehalf happened in non-interestbearing deposits, which declined almost 6%.deposits That decline was partially offset for by growth macro level, FDIC insured were down the in growth in time and brokered deposits, putting even more pressure on funding cost. On the firstlevel, time long time, they were down micro our in dataafor consumer and and business checking account depositsignificantly balances shows balances are down 5% and 4%, respectively, from the beginning of 2022. Even more importantly, the entire balance decline happened since mid-2022, and we anticipate this trend will continue.

1

at 2.89% from their peak in Q1 of 2022. A deeper dive into the deposit decline shows that the majority of the decline happened in non-interest-bearing deposits, which declined almost 6%. That decline was partially offset by growth in growth in time and brokered deposits, putting even more pressure on funding cost. On the micro level, our data for consumer and business checking account deposit balances shows balances are down 5% and 4%, respectively, from the beginning of 2022. Even more importantly, the entire balance decline happened since mid-2022, and we anticipate this trend will continue.

To grow low-cost deposits, it is essential that a community-based FI follow a disciplined approach: Step One – Your Institution must have a Sales and Service Culture. Good products are the foundation of a sales and service culture. You cannot ask your teams to sell, or consumers to buy, inferior products. If you want to know if your institution has good products, ask your customerfacing employees; they can tell you how consumers respond. Equally important is ensuring your team members are well-trained, understand and believe in your products and consistently execute your service expectations.

Step Two – Your Institution must be Strategic. Large institutions have the staffing and marketing budgets that allow them to frequently change offers, products marketed and/or desired prospects. For community-based FIs to compete, they must make data-driven, always-on marketing part of their core growth strategy. Your alwayson marketing strategy supported by your sales and service culture will drive tangible results even when large banks are in periods of very high offers.

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Step Three – Your Institution must be Aligned. Your FI’s training and execution at the branch and through online channels must be aligned with your strategic marketing.

Aligning marketing and execution is what reduces the acquisition costs for new core relationships. Without this alignment, your FI is left trying to compete on the offer alone, making it expensive to match those large bank offers previously mentioned.

Step Four – Measure, Inspect and Reward! Any strategic initiative needs to be measured. Your core relationship growth strategy should have periodic – quarterly at least – goals. In addition, determine benchmarks to evaluate success. Inspect what you expect in order to ensure your sales and service standards are being consistently executed. Reward success! When your team members are fully aware of where they stand compared to their goals, it is possible to evaluate results and reward successes.

Growing core relationships in order to grow low-cost deposits should be of primary importance in any rate environment; however, it is paramount in the current rising rate environment. Ultimately, out-performing your peers by 60bp will be welcomed by your board and celebrated by your management team. When you strategically align your culture, products, and people, competing for core relationships becomes easier.

2023

Achim Griesel President Haberfeld

Dr. Sean Payant Chief Strategy Officer Haberfeld

Achim Griesel is president and Dr. Sean Payant is chief strategy officer at Haberfeld, a data-driven consulting firm specializing in core relationships and profitability growth for community financial institutions. Achim can be reached at 402.323.3793 or achim@haberfeld.com. Sean can be reached at 402.323.3614 or sean@haberfeld.com.

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36 | OHIO BANKERS LEAGUE

GSB.ORG 9/21/22 10:41 AM

Join AmyK, the OBL and partner state banking associations for this virtual series: Tuesdays, April 25, May 2, May 9, May 23, May 30 & June 6 Virtual | 10 – 11:30 a.m.

Premier & Bonus Sessions are also available. Check www.ohiobankersleague.com for complete details.

PLUS! See AmyK in person at the 2023 OBL Women in Banking Conference | Friday, Oct. 13 at Quest Conference Center

SPRING 2023 ISSUE

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OBL BANKING CALENDAR

2023 OHIO DEPOSIT ACCOUNT DOCUMENTATION April 18, OBL Education Center

STEPPING UP TO SUPERVISOR May 3, OBL Education Center

What is the difference between "joint with rights of survivorship” and "tenants in common"? How do we open an account for minors? What is a revocable living trust and how do we document it? Answers to these questions and many more are available at the annual Ohio Deposit Account Documentation seminar, returning to an in-person session on April 18. Natalie Straus, CRCM, Director, FORVIS uses plain language and realworld examples as the program focuses the session on the day the account is opened.

Attendees will learn the "why" behind standard operating procedures. The program also covers CIP procedures and IRS Reporting compliance issues; while the manual and presentation suggest the procedures for standardizing the account opening process.

Who should attend? This is a comprehensive seminar developed for new accounts personnel, auditors, bookkeepers, operations officers and others who have responsibility for administering customer accounts. It is a fast-paced introduction for the new employee who needs an overview of deposit accounts and is designed to tie everything together for experienced personnel.

Questions? Contact OBL Education Manager Julie Kiplinger at 614-340-7612.

38 | OHIO BANKERS LEAGUE

Congratulations! You or someone you manage has excelled as a contributor and now it’s time to move into a supervisory role. Make this transition smoother and more successful for everyone involved by participating in this oneday interactive workshop. Patrice McGuire, a seasoned HR professional and a valued presenter at the Graduate School of Banking – Madison, returns to the OBL to present this popular session. Attendees will gain all skills and insights needed to lead with confidence and conviction – including how to: • Avoid 5 Supervisory “Traps” that turn people off; • Ask good questions and become a good listener; • Be accountable and hold other accountable; • Build a productive team; and much more.

The program is ideal for: New supervisors and managers with less than one-year experience; experienced supervisors with little or no formal supervisor training; curious people who want to know if a supervisor role is for them; and aspiring and soon-to-be-promoted supervisors.

For registration assistance contact Sarah Husk at shusk@ohiobankersleague.com.

PREMIER LEADERSHIP & MANAGEMENT PROGRAMS RETURN Space is Limited!

Succession planning is a necessity … not a luxury.

And making certain your bank is ready to elevate others is a top priority for OBL member banks.

That is why so many turn to two of the OBLs premier management and leadership programs.

Developed to help mold high potential employees into high achieving leaders, the OBL Bank Leadership Institute generates leaders who are better able to recognize and develop talent, build effective teams and achieve impactful results for their institutions. Under the facilitation of Joe Micallef, Grow Up Sales, and Debbie Peterson, Debbie Peterson Speaks, participants strengthen their own leadership abilities and their organizations’ success through excellence in leadership and enhanced organizational and performance skills.

The OBL Bank Management School is a weeklong intensive and comprehensive management program that meets 100 percent of student expectations year after year. The school features the ABA Bank Simulation and is coupled with sessions on topical banking-related sessions.

With instruction by lead faculty member Anthony McGill, the school provides bankers with: • An enhanced understanding of the industry and the inter-relationships of each banking function; • An opportunity to better serve both customers and the bank; • An opportunity to improve leadership and effectiveness; • Skils to improve bank productivity, profitability and competitiveness; and • A statewide peer network.

ABA TRAINING Let’s get back to the business of banking – and what better place to start then ensuring your team is up-to-speed on banking basics?

The OBL is a local ABA training provider, and through this partnership offers interactive, flexible and timely training opportunities across many lines and levels of business. These selfpaced courses are offered to deliver needed content when and where it works for you and your team. Check out offerings such as Banking Basics, Introduction to Banking and Lending as the Cornerstone of Banking among dozens of others. Many courses meet the requirements of the ABA Professional Certifications for exams or continuing education credits.

Browse offerings at www.ohiobankersleague. com/Professional-Development/Webinars/ABACourses. Search “self-paced” for a full library of available programs, or for assistance in locating specific courses for your organization, contact OBL Education Manager Julie Kiplinger at jkiplinger@ohiobankersleague.com ABA Training also offers ABA Certifications; Webinars; and Facilitated (live) Training Courses.

All are available to search from the web address listed above.

Space is limited for both programs.

Contact the Professional Development team at education@ohiobankersleague.com or check the website for details.

SPRING 2023 ISSUE

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AROUND THE INDUSTRY Lima, Ohio

Marietta, Ohio

First National Bank is pleased to announce Martrice Smith has joined our team as Branch Manager and Lender for the new Lima location. Smith will be responsible for establishing and expanding customer relationships for First National Bank in Lima and its surrounding areas. “We are excited Martrice to welcome Martrice to the FNB team,” Smith said Todd Mason, President/CEO of First National Bank. “Combining his banking and management experience and passion for being involved in his community, we know Martrice will be a great asset to our team as we continue to live our mission of improving lives through community banking.”

Peoples Bank is excited to welcome Rick Demmel to the Peoples Bank Commercial Banking team in the Cincinnati metro area.

Rick has over 30 years of experience in commercial financing, and his knowledge and skills are a valuable addition to our team. Rick enjoys meeting clients in their Rick environment so he can understand their Demmel passions and needs, in order to provide the best solution. Welcome Rick to the Peoples team!

Dover, Ohio First Federal Community Bank is proud to announce the addition of Michael Miller to its Commercial Lending Team serving the Holmes County market. Michael comes to First Federal from PNC Bank in Millersburg, where he most recently served as branch manager. He is a graduate of Hiland High Michael School and The Ohio State University Fisher Miller College of Business. Michael resides in Millersburg and volunteers with the Berlin Mennonite Service Project, the Phoenix Food Pantry, and coaches elementary school basketball. He will be based out of First Federal’s Berlin Financial Center.

Focus On Allen Promoted to Chief Marketing and Community Investment Officer Cincinnati, Ohio

Somerset, Ohio Please join us in congratulating Charles (Chuck) Moore on his new position as President and CEO of Commodore Bank. Chuck's leadership profile encompasses over 30 years of consumer finance, mortgage banking, commercial and retail banking; enterprise credit risk and executive management experience.

Charles He served as Deputy Superintendent of The (Chuck) Ohio Department of Financial Institutions Moore and President of the Ohio Mortgage Bankers Association from 2017-2018. He was recognized in 2013 by Business First as one of the "20 people to know in Banking and Finance". Chuck accolades also include Gubernatorial Board Trustee Member of the Ohio Police and Fire Pension Fund, Veteran of the United States Marine Corps and Army National Guard, and frequent speaker regarding the Financial Services Industry, Leadership and Public Service.

Damon V. Allen has been promoted to Senior Vice President, Chief Marketing and Community Investment Officer at FHLB Cincinnati. In this role, he will provide overall leadership and strategic direction for the Housing and Community Investment and Marketing functions.

Damon joined the Bank in 1999 as a Financial Analysis Manager in the Credit Services department and transferred to the Housing and Community Investment department in 2007 as Assistant Vice President, Housing & Community Investment.

Damon was promoted to Vice President, Housing & Community Investment in 2009 and SVP, Housing & Community Investment Officer in 2012.

Damon received his Bachelor of Arts in Accounting from Howard University and his Masters of Business Administration, Finance and International Business, from the University of Miami. Damon also graduated from the Greater Cincinnati Urban League Leadership Program, received the ABA Stonier School of Banking Diploma, the Wharton School of Business Leadership certificate and his Housing Development Finance Professional certification.

40 | OHIO BANKERS LEAGUE

Ohio Bankers Benefits Trust

COMING TOGETHER TO CONTROL BENEFIT COSTS In today’s competitive marketplace, benefits have become as important as compensation when hiring or retaining the best and brightest. But health insurance is not inexpensive.

The Ohio Bankers Benefits Trust was developed in 1952 to mitigate health benefits costs by bringing bankers together.

OHIO BANKERS BENEFITS TRUST

When we harness the collective resources of Ohio’s banks and thrifts, everyone wins.

For more information about the OBL health plan options contact: OBBTCustomerService@ohiobankersleague.com

SPRING 2023 ISSUE

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THE TOP TEN

In this quarterly feature, the OBL highlights the ten news articles that you have visited the most at www.ohiobankersleague.com.

1

5

Last night President Biden gave his third State of the Union address.

Although Biden highlighted successes and victories the administration has accomplished, he repeated a concerning misleading message on bank fees.

Senator JD Vance announced this week he is expected to be assigned to the US Senate Banking Housing and Urban Affairs Committee.

BIDEN HIGHLIGHTS CFPB BANK FEES PROPOSAL IN STATE OF THE UNION

2

WHAT WILL FEDERAL REGULATORS DO THIS YEAR? On January 4, the Biden Administration issued its Fall 2022 Regulatory Agenda, which is a semiannual listing of rulemakings that departments and agencies expect to initiate or continue during the next six months. The agenda shows us what to expect out of the regulatory agencies this year.

3

BACK TO SQUARE ONE FOR CANNABIS BANKING BILL After the SAFE Banking Act failed last Congress, the OBL has renewed hope for the legislation in the near future.

4

WHAT IS PENDING BEFORE CONGRESS FOR OUR INDUSTRY? With the chaotic start to the 118th Congress, the OBL previews what we expect to work on over the next two years.

42 | OHIO BANKERS LEAGUE

OHIO’S NEWEST SENATOR EXPECTED TO BE NAMED TO SENATE BANKING COMMITTEE

6

OBL AND 50 OTHER STATE BANKERS ASSOCIATIONS CALL ON FINCEN TO WITHDRAWAL BENEFICIAL OWNERSHIP REGISTRY ACCESS PROPOSAL In a comment letter filed yesterday, OBL and other state bankers associations called on FinCEN to withdraw its latest proposal regarding access to the beneficial ownership registry, describing it as “fatally flawed.”

7

BANKING REGULATORS ISSUE WARNING ON CRYPTOCURRENCY RISKS Events of the past year have highlighted several key risks posed by cryptoassets that banks should consider if they wish to offer crypto-related services, the Federal Reserve, FDIC and the Office of the Comptroller of the Currency said today in a joint statement.

8

DECEASED ATTORNEY IOLTAS

Effective January 1, 2023, the Ohio Supreme Court adopted Standard Probate Form 13.11. Used only for deceased attorneys who have an estate in any of Ohio’s 88 county probate courts, this form allows a designated Ohio-licensed attorney to access the deceased attorney’s IOLTA “for the purpose of distributing the contents in accordance with the Supreme Court Rules for the Government of the Bar of Ohio and the Ohio Rules of Professional Conduct.”

9

HMDA THRESHOLD CHANGE GOES INTO EFFECT Due to a recent Court decision the threshold to comply with HMDA has dropped from 100 closed-end mortgages to now 25 loans in each preceding year.

10

GOVERNOR DEWINE HIGHLIGHTS AFFORDABLE HOUSING, EDUCATION REFORM, AND WORKFORCE DEVELOPMENT IN STATE OF THE STATE ADDRESS Tuesday, Governor DeWine addressed the State in a joint session of the General Assembly where he outlined his priorities for the State Budget. Among those priorities include addressing Ohio’s Affordable Housing needs, Education Reform, and investing in updating infrastructure of large economic development sites.

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PRSRT STD US POSTAGE PAID MONTEZUMA, IA PERMIT NO. 30

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And don’t just take our word for it. Ask the Ohio Bankers League, where we have been a reliable Endorsed Business Partner for the last 19 years. In fact, we have earned the trust of more Ohio community banks than any other firm in the country.

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44 | OHIO BANKERS LEAGUE

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