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3 COMMUNITYBANKER UPDATE

the

C O N N E C T I N G I O WA’ S

C O M M U N I T Y B A N K E R S

From the EVP & CEO, Don Hole

Small AffairsCivil war historians are almost unanimous in their conclusion that the fate of the war turned on one historic battle…the battle for Lit-tle Round Top at Gettysburg.

On July 2, 1863, Union Colonel Joshua Lawrence Chamberlain, a mere school teacher from Maine, was ordered to take his 20th

Maine, along with the 83rd Pennsylvania, the 44th New York and the 16th Michigan to the crest of Little Round Top to protect it against a confederate advance. Chamber-lain’s troops were outnumbered nearly three to one by the 15th Alabama under the Command of William Oates.

The fighting that ensued was fast and furious. Some 40,000 rounds were exchanged in the course of 90 minutes; saplings halfway up the hill were gnawed in half by bullets. The Union troops had withstood three advances by Confederate troops. Recogniz-ing that a third of his troops had fallen and concluding that Little Round Top would be impossible to hold by mere defensive measures, Chamberlain placed himself in the front of the line and gave the order to “Fix Bayonets.” His haggard and depleted troops charged down the hill.

Surprised at the offensive charge, the 15th Alabama was soundly defeated, the left flank was secured, and the Confederacy was deprived of marching onto Richmond and beyond.

When reflecting on the battle for Little Round Top, Oates was quoted as follows. “We ran like a bunch of scolded dogs. We had the numbers and yet we were severely defeated with this single act of valor. Great events (the Civil War) sometimes turn on comparatively small affairs.”

A single act of valor. A defining moment.

Today, the community banking industry finds itself immersed in a war of its own. It is a fight for relevance and survival in a dynamic financial services marketplace. Through no fault of their own, community bankers wince at the high burden cost of oppressive regulation brought about by institutions less responsive to the needs of their market-place; seeking gain at the expense of risk and customer vulnerability. Outnumbered by hordes of Wall Street lobbyists and an opportunistic Congress, community bankers find themselves seeking bold leadership to conquer the long odds they perceive as stacked against them.

But it is a battle that can be won. A growing recognition exists in the halls of Congress that community banks and small communities across this vast land must be saved. Sentiment persists that if the industry is to be saved then the shackles of regulation brought about to curb the destructive practices of Wall Street must be revisited and refined to allow community banks to return to days of serving the needs of small busi-ness and consumers with appropriate regulation and less government interference.

But the battle can only be won if there is commitment of every community bank stake-holder, director, officer, employee to immerse themselves in the conflict. For far too long, far too many have allowed others to wage the battle alone. A vast majority have relied on peers to carry the load of contributing to bank political action committees, carry the community bank message to elected officials and regulators or participated in other initiatives designed to provide ICBA and CBI the tools necessary for maximum effectiveness.

It is a new year. It is a fresh start. It is our time. We stand ready to mount a major offensive legislative initiative in the 113th Congress to save this industry from further peril and restore a modicum of balance to bank regulation. Ask yourself, your directors and every employee in your bank what they are prepared to do to assist in this effort. It might be as simple as developing a personal relationship with your member of Con-gress, or writing a check to ICBA or CBI’s political action committee or even travelling to Washington to lobby on behalf of this effort.

It’s time to dismiss the convenience to just let someone else do it. Resolve in the new year that you can make a difference regardless how small you perceive your contribu-tion to be.

Take a lesson from history. Great events sometimes turn on comparatively small af-fairs.

Don

In This IssueFrom the EVP & CEO, Don Hole.3

Welcome New CBI Members........3

Fine Points.....................................4

Network With Community Bankers at CBI Spring Summits.5

Advocacy & Leadership Training for the Next Generation of Community Banking Leaders......6

Supporting the Next Generation of Community Bankers.....................7

Money Smart Week.......................7

Shop Til Rates Drop......................8

Can Our Local Banks Improve?...9

Community Banks: Making A Difference on Main Street...........10

Find Your Goat.......................11-12

From the Top...............................13

Main Street Economic Survey.....................................14-15

Welcome New CBI Members

The Community Bankers of Iowa would like to welcome the following banks to our organization and thank

them for their support:

Bank IowaCedar Rapids

Bellevue State BankBellevue

First Whitney Bank & Trust

Atlantic

Worthy ReadingFree-form dialogue and debate are central to policymaking in Washington, D.C. However, separating facts from the snow-storm of shrewdly crafted misinformation swirling in the nation’s capital can be disorienting. Even conscientiously nonpartisan veteran Washington operatives can lose their way during the policymaking process.

Fortunately, ICBA has always had clear and persuasive facts on our side—most importantly, that community banks are essential players to any fair-dealing, diversified financial system. Nev-ertheless, it’s always helpful when another authoritative player independently backs up—with facts and figures no less—many of our association’s key points and messages.

That’s what happened when the FDIC released a yearlong, data-driven study late last year of community banking. Exam-ining a quarter century of industry data, the agency’s 2012 Community Banking Study is worthy reading for anyone looking to understand our industry’s most widely debated and pivotal trends. Moreover, bearing the credibility of an independent federal regulator, the study echoes what ICBA has long commu-nicated to policymakers about the uniquely important economic role of community banks as well as the current challenges they face.

The FDIC’s study, while identifying community banks by their relationship-based model and local ownership and decision-making, for example, points out how community banks make up about 95 percent of U.S. banking institutions and are the only physical banking presence in nearly one in five U.S. counties. It also notes how community banks hold 14 percent of banking industry assets but provide 46 percent of the banking industry’s small loans to farms and businesses. These are facts that ICBA continually promotes—sometimes along with the politically pointed fact that community banks operate in every congres-sional district—to Washington and the world beyond. On the issue of community banks’ disproportionate regulatory burdens, the study’s findings reinforce ICBA’s ongoing efforts to continue expanding tiered regulations for community banks. While saying no single regulation has significantly affected individual institutions, the study points out how cumulative regulatory requirements have caused many community banks to increase compliance staff over the past decade. And while identifying several problematic regulations for our industry, from Home Mortgage Disclosure Act disclosures to Bank Secrecy Act requirements, the FDIC pledges to more comprehensively as-sess the total effect of regulation on community banks.

Confirming other salient facts that ICBA routinely emphasizes with policymakers, the study also explains how community banks incur lower credit losses than non-community banks and how community banks remain well-capitalized with generally well-diversified loan portfolios. Touching on other issues ICBA repeatedly discusses with policymakers, the study explains

how extremely and persistently low interest rates are placing a significant drag on community bank earnings, about 80 percent of which come from net interest income.

Also not shying away from potentially controversial findings, the study holds that the potential cost-efficiency advantages of economies of scale for larger institutions are overblown. It argues that banking consolidation appears to be stabiliz-ing, saying that differences between faster-growing metro and slower-growing non-metro areas that have limited some com-munity banks will likely fade.

All of this adds up to a valuable, if not reassuring report that community bankers should read, digest and become familiar with. This resource can help us all marshal more of the facts on our industry’s side. And like storing up ammunition for battle, we can’t have too many facts ready for Washington’s policy debates.

4 CBI Banker Update . March 2013

Fine PointsWritten By: Camden Fine, President and CEO of ICBA

Influence Your FutureJoin more than one thousand community bank colleagues from across the nation at ICBA’s 2013 Washington Policy Summit, April 24-25, 2013. You will engage with your Members in Congress, influence important issues of public policy, and hear firsthand from the nation’s top banking and financial leaders.

Registration fees for the Washington Policy Summit are $150 for attendees. However, in order to encourage Iowa’s community bankers to attend and represent our state in D.C.; the Community Bankers of Iowa’s Board of Directors has voted to reimburse any CBI member attending the Summit their registration fee!

Scheduled events include presentations from Representative Jeb Hensarling (R-TX), Chairman of the House Financial Services Committee and Senator Sherrod Brown (D-OH), Chairman of the Financial Institutions and Consumer Protection Subcommittee. Agency meetings have also been scheduled during the Washing-ton Policy Summit. Representatives from the Consumer Financial Protection Bureau, Federal Deposit Insurance, Federal Reserve Board, Office of Comptroller of the Currency, and Federal Housing have all been invited to discuss regulations with attendees.

For more information and to register, go to: www.icba.org/WPS13.

The Community Bankers of Iowa invites you to attend the Community Bank Summits and network with other like-minded bankers. The Community Bank Spring Summits are heading east this year and will be held April 3rd at Isle Casino Hotel in Waterloo and on April 4th at Riverside Casino and Golf Resort in Riverside.

Former military officer and corporate executive, Jim Bearden is the keynote speaker for both Spring Summits. Organizational culture is an intangible, but very real—and powerful—phenom-enon. Bearden will shed new light on the relationship between leadership and culture and provide specific tools for

Unleashing the Heroes in Your Midst during his presentation at the Summits. Bearden’s rich and diverse life experiences provide the basis for his down-to-earth take on the relationship between organiza-tional leadership and organizational success.

• A decorated Vietnam veteran, where he served as a Marine rifle platoon and rifle company com-mander• Corporate vice president• Founder of his own successful business• Internationally acclaimed keynote speaker• Author of a definitive book on individual & or-ganizational success, The Relentless Search for Better Ways• Creator of a powerful, multi-media Leadership Development Process, Leadership at the Points of Contact

Jim Reber, President and CEO of ICBA Securities, will also discuss investment management for 2013 and how federal policies will impact your business-es strategies. Reber is a Certified Public Account-ant and a Chartered Financial Analyst. He is on the Board of Regents of the Paul W. Barret School of Banking and is on the Executive Committee. Reber holds a BS degree in Accounting from Christian Brothers University in Memphis, Tennessee, where he serves on the Board of Trustees.

With each meeting beginning at 3:00 p.m. and concluding at 5:45 p.m. with a dinner reception and door prize giveaway, CBI is fitting in as much education and networking as possible in one after-noon.

Registration fees are $35 per person. Registra-tion and additional information for the Community Banker Spring Summits are available on the CBI website at www.cbiaonline.org. The registration deadline for the Spring Sum-mits is March 26, 2013. If you have any questions, please call the CBI office at 515.453.1495 or email Jackie Haley at jhaley@cbiaonline.org.

Network With Community Bankers at CBI Spring SummitsCBI is Hosting a Late-Afternoon, Educational Event to Bring Community

Bankers Together

Iowa Community Banker Looking for

Networking Opportunities

April 3, 2013 - Isle Casino Hotel, Waterloo

April 4, 2013 - Riverside Casino & Golf Resort, Riverside

CBI Community Bank SummitsNetwork and connect with like-minded bankers during a convenient, late-afternoon educational event.

Thank You to the Following Summit SponsorsSpeaker Sponsor Platinum Sponsors Gold Sponsors

Silver Sponsors

March 2013 . www.cbiaonline.org 5

Advocacy & Leadership Training for the Next Generation of Community Banking Leaders

2013 Leadership Development Summit

April 11-12, 2013Renaissance Savery Hotel

The Community Bankers of Iowa’s Leaders of Tomorrow (LOT) program is holding their Annual Leadership Development Sum-mit on April 12, 2013 at the Renaissance Savery Hotel in Des Moines. Register today and plan on attending or sending the up-and-coming leaders in your bank to this educational, net-working event.

Keynote speaker, Aaron Davis will motivate attendees to succeed in their business dur-ing his presentation. Davis will discuss the successful leadership techniques that led to the 1994 National Championship football title for the University of Nebraska, and how up-and-coming leaders can implement these skills throughout their career. Davis is a noted authority on peak performance and championship team-work. Davis has had the privilege of sharing his insights on the possibility of human potential with over a million people throughout the United States

and abroad. He is the author of the inspiring book “10 Minute Truths” and the co-author of two others.

The next generation of community banking leadership will also find out how current leaders have succeeded during the Presi-dents’ Panel. Panelists include Kurt Henstorf, President of First Heritage Bank in Shenandoah; Rod Rowland, President and CEO of Landmands Bank in Audubon; and Dale Torpey, former President of Federation Bank in Washington.

Attendees will also learn about the importance of political action and how to be an effective advocate for community banks during presen-tations from Aaron Stetter, Vice President of Congressional Relations and Advocacy for the Independent Community Bankers of America (ICBA) and CBI’s lobbyist Cal Hultman. Stetter advocates the association’s policy positions be-fore members of Congress, financial regulatory agencies and the executive branch. Stetter has been with ICBA since 2005, having served as ICBA’s director of congressional relations and grassroots outreach, manager of congressional relations and director of state relations. Hult-man is a registered lobbyist and represents the Community Bankers of Iowa in the legislature. After 18 years in the Iowa Senate, Cal Hultman founded the Hultman Company to provide superior lobbying and political consulting services.

Iowa Superintendent of Banking, Jim Schipper will also provide attendees a review of banking in Iowa. As Superintendent of Banking, Schip-per works to protect the interests of those doing business with banks, financial service providers and licensed professionals by ensuring safety, soundness and adherence to the laws and regulations of Iowa.

A networking dinner for paid Leadership Devel-opment Summit attendees will be held on Thurs-day, April 11 at Exile Brewery (1514 Walnut Street, Des Moines). Attend the dinner for the

opportunity to network with up-and-coming community banking leaders.

The early bird registration deadline has been extended to March 15, so register today! Early bird rates are $195 for LOT members and $245 for non-members. After March 15, 2013 rates increase to $245 for LOT members and $330 for non-members.

Hotel Accommodations are available at a discounted rate of $112 (plus taxes) per night at the Renaissance Savery Hotel. In order to receive the discounted rate, please call 800.514.4706 and indicate that you are part of the Community Bankers of Iowa’s Leaders of Tomorrow (LOT) group by March 28, 2013.

Additional information and registration is on the CBI website at: www.cbiaonline.org.

If you have any questions, please call the CBI office at 515.453.1495 or email Laura Sinnwell at lsinnwell@cbiaonline.org.

Connect

Educate

Develop

Aaron Davis, Keynote Speaker

Aaron Stetter, ICBA VP of

Congressional Relations & Advocacy

Team Main Street

6 CBI Banker Update . March 2013

Jim Schipper, Iowa

Superintendent of Banking

Money Smart Week® is a public awareness campaign designed to help consumers better manage their personal finances. The Community Bankers of Iowa is encouraging financial literacy in elementary school students by sponsoring the Money Smart Week Poster Contest.

CBI members, please encourage students in your community, grades 2nd – 6th, to enter the contest and vie for a chance to win the $200 grand prize!

Rules for the contest are as follows: 1. Create a poster describing this theme: “There’s a lot to

learn about money. What should you know now?”2. Students in grades 2nd-6th are eligible; one poster per stu-

denta. Poster should be horizontal, 11” x 17”b. Put name, address, age, phone on back, NOT

front of poster entry3. Submit to banks affiliated with Community Bankers of

Iowa, no later than April 20, 2013.

CBI members, once you receive posters from students, please display them proudly in your banks’ lobby throughout Money Smart Week. Posters should then be returned to the CBI of-fice and postmarked no later than May 1, 2013.

Details at: www.cbiaonline.org and moneysmartweek.org.

If you have any questions or need additional information, please contact Jackie Haley in the CBI office at: jhaley@cbiaonline.org.

The Leaders of Tomorrow (LOT) is a program created by the Community Bankers of Iowa (CBI) to enhance the growth, leadership, and networking skills of future banking leaders. LOT establishes a network of leaders who serve and strengthen their communi-ties and advocate for the community banking industry.

LOT also encourages the leadership development of the next generation of community bankers by annually presenting two $500 scholarships to deserving high school seniors.

If you have a child, grandchild, or an employee graduating high school this spring; please encourage them to submit the LOT scholarship application. Applications are available on the CBI website at www.cbiaonline.org or by calling th office at 515.453.1495. Applications must be postmarked by April 1, 2013. Requirements for the scholarship include:

• Applicants must work at or have a parent, grandparent, or guardian who works at a bank that is a member of the Community Bankers of Iowa.

• Complete and return the scholarship application by April 1, 2013

• Write a brief, one-page essay detailing what role commu-nity banks play in your hometown.

• Submit a copy of your high school transcript and indicate class rank.

• Provide ACT and/or SAT score(s).• Submit letters of recommendation from three nonrelatives.

If you have any questions, please contact Laura Sinnwell at 515.453.1495 or via email at lsinnwell@cbiaonline.org.

     

 

 

 

 

 

 

 

 

 

 

Kids…Enter  this  Poster  Contest  today!    

1ÉCreate a poster describing this theme:

ÒThereÕs a lot to learn about money. What should you know now?Ó

2ÉFollow these rules:

¥ Students in grades 2nd-6th are eligible; one poster per student

¥ Poster should be horizontal, 11Ó x 17Ó

¥ Put name, address, age, phone on back, NOT front of poster entry

¥ Submit to banks affiliated with Community Bankers of Iowa.

Details at  www.cbiaonline.org  or  www.EveryoneCanSave.org      

3…Need  more  information?    

                             www.MoneySmartWeek.org  or  jhaley@cbiaonline.org      

4…  Contest  sponsored  by  Community  Bankers  of  Iowa.  

 

Supporting the Next Generation of Community Bankers

LOT Scholarships Available for Graduating High School Seniors

vs.

Team Main Street

S av e t h e D at e s f o r t h e fa c e - o f f o f t h e

s u m m e r !

Wall Street

4 2 n d C o m m u n i t y B a n k e r s o f I o wa M a n a g e m e n t C o n f e r e n c e & A n n u a l C o n v e n t i o n

J u ly 1 7 - 1 9 , 2 0 1 3O k o b o j i , I o wa

8 CBI Banker Update . March 2013

Shop Till Rates DropWritten By: Jim Reber, President & CEO of ICBA Securities

Fed to Continue its Buying SpreeBanking professionals have dealt with a non-stop series of prec-edents for an extended period of time, which now has stretched into fully five years. Most of these events have not been par-ticularly welcome by community banks. As we get into 2013, we have been fully warned that there will be another externality that will, at least in the short term, keep bank earnings constrained.

The Federal Reserve’s Federal Open Market Committee has been buying large amounts of bonds since late 2008. It launched this “quantitative easing” (QE) strategy pretty much concurrently with the demise of Fannie Mae and Freddie Mac, along with other watershed banking events like the bankruptcy of Lehman Brothers and the failure of Washington Mutual. The Fed’s own balance sheet grew by more than $1 trillion in the 90 days after Sept. 10, 2008.

That spending has continued apace. There have been several different phases of the QE strategy (Fed paparazzi consider it to be on QE3), but the result has been the same: Lower inter-est rates, and lower yields on bonds. Including the ones in your bank’s investment portfolio.

Early goalsOriginally the plunge head-long into the bond market back in 2008 was to calm it down. Profitable, well-capitalized organiza-tions were having great difficulty financing even their money market obligations, and the U.S. economy was teetering on a complete freeze-up. Borrowing costs absolutely spiked. The massive intervention by the Fed brought some reason back to the fixed-income market.

As an example, a two-year agency bullet security, which is an extremely liquid (and therefore low-yielding) instrument, aver-aged a yield spread of around 33 basis points over the bench-mark Treasury note for the entire year of 2007. For several weeks in late 2008, it widened out to over 150 basis points. The QE strategy got spreads down to normal by spring 2009. Mis-sion accomplished.

Current strategyThe financial markets, if not churning out record profits, are at least calm. This is due in no small part to the Fed’s continued vigilance, its public statements, and its participation in the bond market. One indication of the calm is that our two-year agency bond now has a whopping spread of three basis points (0.03%) over Treasuries.

More visible to portfolio managers is that the Fed announced in Sept. 2012 that it will be buying $40 billion of mortgage-backed securities (MBS) each month until it decides that it’s not. This is in addition to the $45 billion of “longer-term” Treasuries it will be buying each month.

In round terms, that adds up to an additional $1 trillion in policy accommodation in 2013 alone. The Fed’s balance sheet cracked the $3 trillion barrier for the first time in January, and it will likely be over $4 trillion by the end of the year. This is widely

expected because the Fed, most politely, has said that it wants the unemployment rate under 6.5 percent and inflation projec-tions over 2.5 percent before it changes course. Those two objectives could take many quarters to achieve.

What this means to youGood news: The value of your current portfolio has probably been insulated against substantial declines for a while. Bad news: The available yields on your new purchases are going to be unimpressive. In particular, mortgage securities will require your attention.

The ongoing accumulation of MBS is quite stunning in sheer scope. For example, new issuance of mortgage securities in 2012 averaged about $150 billion per month. The Fed’s appe-tite will gobble up fully one quarter of these. And be aware also that the total amount of mortgage debt outstanding has declined more than ten percent since 2008, as homeowners are still struggling with negative equity and deleveraging.

Community banks have record-high exposures to prepayment risk, thanks to the premium prices that have accumulated on all things MBS. With the Fed’s ambitious, and unambiguous, plans for continued buying staring at the market, it behooves investors in these products to have a firm handle on possible outcomes. And stay tuned for updates on the Fed’s shopping bonanza.

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Member FDIC

Working withcommunity banks

throughout the upper Midwest

Contact Gene Uher in Sioux Falls at 605.201.1864 or guher@bellbanks.com

Call us for a quick response, competitive rates and flexible underwriting.

•Participationloans(commercial,agricultural, construction, operating lines and term loans)

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March 2013 . www.cbiaonline.org 9

A few months ago, I called my big, national bank and asked to do what I thought would be a simple thing: a wire transfer. No problem in this electronic age, right? Except it wasn’t such a simple thing. That’s because my vendor was a software de-velopment company that had the audacity to be located in the Ukraine. How dare they! I could understand if such a transac-tion were difficult in, say, 1973. But this is 2013. And this is a big bank, with branches throughout the Philadelphia area (their name is on one of our sports stadiums).

I was told on the phone that I had to do this in person at my lo-cal branch. So I went there. The customer service agent in the branch was befuddled. The bank manager had to get involved. (For the record, I was in this same branch not three months before, and these people were not working there then.) The home office was called. Actual forms withcarbon copy paper (I kid you not) were completed, and then completed again after all the mistakes were fixed. The director of the FBI was notified and a congressional committee was briefed. Everyone was in a tizzy. Yes, I just used the word “tizzy” in a sentence. And no, I never did hear from the manager at my local branch who promised to email me “the minute the transaction went through.” Did it go through? Yes. But I only found out after I called to confirm.

Oh, where was Vernon Hill? Where? Where?I bet he was chuckling somewhere in his New Jersey home. Hill, the former CEO of Commerce Bank hates bad customer service. Particularly in the banking industry. Hill started Commerce with one location and grew it to more than 200 before, according to him, he sold out for $8 billion. He’s now chairman of the board of a new chain of banks in the United Kingdom called Metro Bank, where he’s trying to bring the “Commerce magic” back to bank-ing. He writes about this in his new book, Fans Not Customers: How to Create Growth Companies in a No Growth World, and he spoke with me just this past week.

“It’s all about convenience and service,” he told me. “Great busi-nesses create success by building fans. These are the people who will stay with you and recommend you to their friends. That’s how Commerce grew itself 25 percent every year for 30 years.”

Unfortunately for Philadelphians, Hill is busy creating these fans in England. He’s entering a market that, until 2010, hadn’t seen a new bank since 1830. And he’s doing the same thing he did here: 24/7 service, free coin counting, reduced fees, pens that aren’t chained to desks, people who answer the phones and who care. But what about here? Is this also possible? Can a local business in Philadelphia find a bank like this? And how can that banker really create small-business fans?

Many bigger banks do a good job for their customers. But I’m a small business. And according to Hill, I’m banking at the wrong bank. No matter what I see in the ads, it’s understandably chal-lenging for a large bank to treat my little business as well as they’re going to treat their big customers. “For a small business like yours, you’re better off with a community bank,” he told me. And there are plenty of good ones around the area to choose from.

Why? Because my $500,000 loan would be significant to a smaller, community bank. I would get more attention. I would be a bigger deal. Would a community bank have handled my wire transfer any worse than my current banker? The same paper-work would be done but, Hill says, it would be done with a better level of service and convenience.

Meanwhile, bankers need to change how they perceive service, particularly when it comes to small businesses like mine. Hill talks about “service and convenience,” and he’s right. To really service a small business well you have to provide proactive serv-ice and convenience. Small-business owners don’t have finan-cial staffs. Our accountants are paid by the hour to primarily just do our tax returns. We do not have the education that people in finance departments at big corporations have. We do not have the time to maximize our cash management returns like others do in larger organizations.

Occasionally I get a call from someone in my bank to “check in.” That’s nice. But it’s clearly a sales call to offer some other product his bosses told him to push in last week’s national meet-ing. And it’s never the same person calling each time. And, no offense, but it’s almost always someone at a lower level, with less experience. Ever experience this?

Here’s what I want: the same guy checking my accounts once a quarter, and communication via email (that’s just my preference; if you like to get calls then that’s fine too). Advice on how to shave a few extra points on my enormous cash balances. A look at my history to see where I can save on fees. A request for my financial statements (or maybe just my general ledger) from my accountant and a quick look-through. Please, share some of that MBA experience from grad school, OK? Give me some advice that you might have learned from your hundred other clients that could help me reduce expenses or sell to someone new. How does my business compare? How can I improve? Even a visit maybe once or twice a year—but not too much. You don’t have to do too much to make me happy. But show me some attention. And for God’s sake, help me. Help me increase my chances of staying in business, and you can increase your chances of keep-ing your fee-paying customer around.

Hill is right. Most banks can do a much better job. And commu-nity banks are probably a better bet for small businesses. But it’s not just about service. It’s about proactive service. It’s about making a simple wire transfer simple. Even if it’s to the Ukraine.

Can Our Local Banks Improve?Written By: Gene Marks, President of Marks Group

Former Commerce Bank CEO Vernon Hill Says Yes

Gene Marks is a columnist, author, small business owner, and General Session speaker at the 42nd Management Conference & Annual Conven-tion, held July 17-19, 2013 in Okoboji, Iowa.

Gene’s weekly columns for The New York Times, Forbes, The Huffington Post, Inc Magazine, FOX Business, and Philadelphia Magazine are read by thousands of small and medium sized business owners around the country.

10 CBI Banker Update . February 2013

Community Banks: Making a Difference on Main StreetHow are You Celebrating Community Bank Month?

April marks Community Bank Month, a nationwide celebration recognizing the many contributions com-munity banks make to their customers and communi-ties. The Community Bankers of Iowa is encouraging our members to embrace Community Bank Month, and spread the word about what makes your bank an integral part of your local community.

Together, we can focus the public’s attention on the many ways locally owned and managed banks are making positive change happen across Iowa. In 2013, we want all Iowans to know that our community banks are “Making a Difference on Main Street!”

“Community banks do more than just provide quality financial services to their customers,” says Com-munity Bankers of Iowa CEO and Executive Vice President Don Hole. “They are an integral part of the towns and cities across Iowa. Community banks work hard to improve the quality of life in their com-munities. That’s how community banks are ‘Making a Difference on Main Street.’”

CBI wants to know how your bank is celebrating Community Bank month and spreadking the mes-sage, “Community Banks: Making a Difference on Main Street.” Fill out the Best-of-the-Best 2013 Contest form and compete for the traveling trophey, a pizza party for staff sponsored by the Community Bankers of Iowa, recognition as the Best of 2013!

Submit your activities and complete the CBI Best-of-the-Best 2013 contest entry form by May 20, 2013. The entry form is available on the CBI website at www.cbiaonline.org. The winning bank will be an-nounced at the annual convention in Okoboji in July, featured in the August edition of The Community Banker Update, and Current-C.

Ideas for activities to submit in the Best-of-the-Best contest and to help make Community Bank Month a success in your town include:

• Invite local schools or scout troops to tour your bank.• Make sure to promote the Money Smart

Week Poster Contest during the tours! [See page 7 for more information on the Money Smart Week Poster Contest.]

• Host a charity event like a race or an auction.• Create a lobby display highlighting your small

business customers.• Speak to civic groups or senior centers to reach

new audiences and convey the importance of community banking.

• Host an open house complete with tours, re-freshments, contests and giveaways.

CBI has also created posters (left) to help support your bank’s promotion of Community Bank Month and spread the message, “Community Banks: Mak-ing a Difference on Main Street. Posters may be ordered from the CBI office at a cost of $1/poster by calling 515.453.1495, emailing Laura Sinnwell at lsinnwell@cbiaonline.org, or completing the form on CBI’s website at www.cbiaonline.org. Each poster may also be customized with your bank’s logo. Please contact Laura Sinnwell for more information on customization.

In addition, CBI is also making available sample press releases, radio advertising spots, and fact sheets so that you can notify your local media about how your bank and community banks make a differ-ence on Main Street. Please go to the CBI website (www.cbiaonline.org) for more information.

There are numerous ways to promote Community Banking Month and make your bank shine through-out April. No matter how you celebrate Community Banking Month make sure to take a lot of pictures and let CBI know how you are spreading the word about community banking!

If you need anything to ensure a successful Com-munity Bank Month, the CBI staff is happy to assist. Please contact the office at 515.453.1495 with any questions you may have.

Thank you for working to raise the standard and build awareness of Iowa’s trusted and reliable community banks. Because of you, we are making a difference for Iowans on Main Street.

COMMUNITY BANKS:

MAKING A DIFFERENCE ON MAIN STREET

Community Banks support loCal Businesses, agriCulture, our Customers, and our town. we make a differenCe on main street.

COMMUNITY BANKING MONTHAPRIL 2013

and for the nation’s TOP producers of corn and soybeans

COMMUNITY BANKS:

MAKING A DIFFERENCE ON MAIN STREET

Community Banks support loCal Businesses, agriCulture, our Customers, and our town. we make a differenCe on main street.

COMMUNITY BANKING MONTHAPRIL 2013

and for LOCAL businesses

COMMUNITY BANKS:

MAKING A DIFFERENCE ON MAIN STREET

Community Banks support loCal Businesses, agriCulture, our Customers, and our town. we make a differenCe on main street.

COMMUNITY BANKING MONTHAPRIL 2013

and in OUR community

COMMUNITY BANKS:

MAKING A DIFFERENCE ON MAIN STREET

Community Banks support loCal Businesses, agriCulture, our Customers, and our town. we make a differenCe on main street.

COMMUNITY BANKING MONTHAPRIL 2013

and for FAMILIES

In Iowa, Governor Branstad will proclaim April Community Bank Month during a proclamation signing held Thursday, March 28 at 2:20 p.m. CBI is encouraging all members to attend the proc-lamation signing at the Capitol so that the Gov-ernor, Senators, and Representatives know how important community banks and bankers are to Iowa’s economic development.

Legislators want to hear from you, their constitu-ents, on how policy and regulations are impact-ing your business and consumers. In order to get your message directly to legislators, CBI staff are coordinating details to establish a Lobby Day at the Capitol before the proclamation signing.

Additional information will be released as it becomes available. For now, please mark your calendars for Thursday, March 28 and plan on coming to Des Moines to advocate for Iowa’s community banks and bankers.

If you have any questions, please call the CBI of-fice at 515.453.1495.

February 2013 . www.cbiaonline.org 11

Written By: Steve Gilliland, CSP, CPAE

Turning Negatives into PositivesThis seven-part series is dedicated to everyone who has ever put up with a nosy neighbor, fickle friend, sneaky sibling, envi-ous family member, scheming coworker, manipulative boss, conniving acquaintance, impolite employee, disrespectful ado-lescent, hypocritical Christian, dishonest subordinate and people who think the world revolves around them.

IntroductionWhen someone says something or other “really gets my goat,” they mean they are extremely irritated. A variety of things could contribute to that irritation, ranging from someone else’s actions to a series of events. Despite the turn of phrase, however, actual goats are not usually involved. Like many colorful idioms in the English language, the origins of “get my goat” are murky. The first incidences of the phrase crop up around the early 1900s, a great era for colorful slang in America, reflecting the rapid ex-pansion of settlement in the U.S. and the commingling of people from varied social, class and ethnic backgrounds. Some have suggested that “get my goat” may be related to “goad,” as in “to prod” or “stick with a pointed end.”

Regardless of its origin, “get my goat” resonates with all of us. Our daily lives intersect with a diverse group of people from dif-ferent backgrounds, opinions and personalities. The fast-paced and stress-filled schedules we maintain open the gate and expose our goats to people and circumstances. As you read this series-entitled Hide Your Goat-I’ll present ideas on how to herd your goat, lock your gate, identify people who hunt your goat, retrain your goat and provide nutritional (mental) advice on what to feed your goat.

Here’s an example of someone getting my goat recently. It’s a phone conversation I had with a potential client’s receptionist:

Steve: May I please talk with Angela?

Receptionist: She’s in a meeting.

Steve: Yes, I know. She asked me to call her as soon as I could and give you my name. She said to tell whoever an-

swered the phone to interrupt her in the meeting.

Receptionist: Who are you?

Steve: I am an author and a speaker.

Receptionist: Why do you need to talk with her?

Steve: I’m not sure. She initiated the call and requested that I reach her as soon as possible. She said she would be in a meeting but requessted that she be interrupted to talk with me.

Receptionist: How about I just put you through to her voice-mail?

Steve: Do you have an email address that I can forward you her email to me requesting that I call her and also stating that it was OK to interrupt her in a meeting?

Receptionist: How will I know it was her original email and that you aren’t just making it up to get to talk with her?

Steve: Can I just leave a message with you and you can let her know I called?

Receptionist: I would prefer you leave her a message on her voicemail.

Steve: Ok fine, please put me through to her voicemail.

The next noise I hear is the dial tone after being disconnected! By the time I got off the phone my goat was long gone!

Some people have been put on this earth to push our buttons, thereby seizing control over us, but they can’t get your goat if you don’t tell them where it’s tied up. And just where do you hide your goat? It all depends on what gets your particular goat – or, shall I say, pushes your buttons the wrong way.

Continued on page 12

Every day, you decided how you will respond to people and circumstances. You either have enough self-esteem to accept what life throws at you, or you feel the need to retaliate.

The mastery of life is the mastery of self. We all have our hot buttons that, when pushed, can cause us to emotionally deto-nate. However, people can only ruin your day (get your goat) if you give them permission. Allow yourself to acknowledge that emotions are attached to setbacks. I’m not suggesting you punch a hole in the wall or scream at the dog. A healthier alternative would be talking to someone who will act as your sounding board.

When you allow destructive emotions to consume your energy and make you negative, your goat is fully exposed and vulner-able. When you look backward, trying to right wrongs done to you, you become resentful, angry, hateful and bitter. You cede power to the uncaring perpetrator instead of moving your mind and energies forward.

Hit the Delete button on the resentment, jealousies and self-centeredness that consume you the moment someone tries to get your goat – and just let go. This will free your mind to be receptive to any potentially more powerful messages and life-changing lessons that could emerge from the experience – and protect your goat from the elements.

Part Two of Gilliland’s seven part series will discuss “Hearding Your Goats,” or understanding how and why people and circum-stances get your goat and strategies to hide it. Look for Part Two in the April eddition of The Community Banker Update.

Steve Gilliland is the keynote speaker at the Community Bankers of Iowa’s 42nd Management Conference & Annual Convention, held July 17-19, 2013 in Okoboji, Iowa. Gilliland is one of the most in-demand and top rated speakers in North America.

Recognized by his peers as a master story-teller and brilliant comedian, Gilliland’s ap-peal transcends barriers of age, culture and occupation. His interactive and entertaining style helps audiences connect and relate as he shows them how to open doors to success in their careers, their relationships and their lives. As one newspaper stated, “Steve is what happens when the humor of Ron White collides with the inspiration of Zig Ziglar.”

Gilliland is also an accomplished author. His book Enjoy The Ride™ has been on the publisher’s best seller list for five con-secutive years. He was named Author of the Year in 2010. He influences the lives of millions through his keynote speeches, books, CDs and DVDs. Speaking the language of active busi-ness leaders, his books and CDs identify practical lessons that grow people and their businesses.

Make sure to SAVE THE DATES of July 17-19, 2013 so you can hear Gilliland’s presentation in person at the Com-munity Bankers of Iowa’s 42nd Management Conference & Annual Convention!

I trust that I’ve captured some of your imagination with my From the Top columns during these past 12 months and that I’ve given you some ideas to consider and possibly use in your own com-munity banks. Through this column I’ve given you a glimpse of a typical day at the Bank in Newman Grove, as well as some reminders about the significance of being a “community activist,” the importance of your bank’s ICBA membership and the grass-roots advocacy efforts that make both our state associations and ICBA work so well for community banking.

Last year’s ICBA National Convention and Techworld in Nash-ville, Tennessee, where I became ICBA chairman seems like yesterday and now here we are heading to Las Vegas for this year’s gathering. I’ve got a favorite cap that reads “another trip around the sun.” In other words, here we are again …

For those of you attending this year’s convention, I promise that you will have an outstanding experience. For those of you stay-ing home, follow us on ICBA’s Facebook page (www.facebook.com/icbaorg) or on Twitter (www.twitter.com/icba, through the hashtag #icbalv13). Today there is little reason not to stay in touch with us.

This past year we’ve come through an election season where getting things done in Congress was always difficult. But ICBA, with your grassroots help, made the difference.

It has been a pleasure to serve as your ICBA chairman, and you are in very good hands with the newly elected and re-elected members of ICBA’s Executive Committee. All are exceptional leaders for these times—you have my word on that.

Thanks are also in store for the many wonderful people who work on behalf of community banking at ICBA. These dedicated people have my sincere appreciation for the fine work they do day after day on behalf of our industry.

Thank you also to the many community bankers whom Becky and I have had the pleasure to meet as we’ve traveled across the country this past year. To those we didn’t meet but are on the front lines each day taking care of business in their commu-nities—you folks are the best.

Finally, thank you to the many service providers and support people who help make sure that community banking continues to have a strong place in America, a place that continues to be the foundation of our nation.

As I turn over this column to my good friend and an outstanding community banker, incoming ICBA chairman Bill Loving of West Virginia, it has been a pleasure to have had this opportunity to offer you a view from my vantage point this past year.

Full circle, indeed.

From the Top Written By: Jeff Gerhart, Chairman of ICBA

Full Circle

One Source. One Call.

800-347-4642www.mibanc.comMember FDIC Member Federal Reserve System

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14 CBI Banker Update . March 2013

February Survey Results at a Glance:• Rural Mainstreet Index climbs for the fifth time in the past

six months.• Farmland price growth slows for the third straight month.• On average, bankers reported that corn prices below $3.86

would threaten repayment of farm loans.• On average bankers estimated a breakeven corn price of

$4.84 per bushel on rented farmland.• Only 15 percent of bankers expect significant livestock

selloffs of one-third or more if drought continues.

The Rural Mainstreet economy expanded for the fifth time in the past six months according to the monthly survey of bank CEOs in a 10-state area.

Overall: The Rural Mainstreet Index (RMI), which ranges be-tween 0 and 100 with 50.0 representing growth neutral, climbed to a healthy 58.2 from 55.6 in January. “The February RMI is down only slightly from the reading for February of last year. I anticipate that economic growth for the region will continue on a slow but positive pace,” said Creighton University economist Ernie Goss.

Farming: After peaking at 83.9 in November of last year, the farmland-price index has now declined for three straight months. While the index declined, it was still strong at 67.0, down from January’s 71.5. This is the 37th consecutive month that the farmland-price index has been above growth neutral. The farm equipment-sales index rose to 65.8 from 63.8 in January. “Based on our surveys over the past several months, 2013 is stack-ing up to be a good year for farm income according to bankers. This is showing up in healthy growth in farmland prices and the sales of farm equipment,” said Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton.

Jeffrey Gerhart, CEO of the Bank of Newman Grove, Newman Grove, Neb., and chairman of the Independent Community Bankers of America said, “We are watching to see how the area pastures will do this spring. Some pastures may not be able be grazed this year. Hay crops could also be significantly impacted should the drought continue.”

This month bankers were asked several questions related to farm commodity prices. First, bankers were asked what corn price would put farm loan repayments in jeopardy. On average, bankers reported that corn prices below $3.86 would threaten repayment of farm loans. Second, bankers were asked the breakeven corn price for farmers that rent their land. On average bankers estimated a breakeven corn price of $4.84 per bushel.

The University Of Illinois Department Of Agricultural Econom-ics projected 2013 corn prices of $5.73 per bushel (http://tinyurl.com/adw6gdy). “Given this projection along with current strong balance sheets and cash flow of farmers, agriculture repay-ments and profitability for farmers should be very similar to 2012. Even so, significant changes in Federal Reserve policy or international trade disruptions could pose a threat to the Rural Mainstreet economy in 2013,” said Goss.

According to Dale Bradley, CEO of The Citizens State Bank, in Miltonvale Kan., “Farmers should be very cautious in 2013 and 2014 and be conservative from an economic standpoint.”

Banking: For the fourth time in the past five months, the loan-volume index remained below growth neutral. The index rose to a weak 46.7 from January’s frail 39.0 and well ahead of last February’s 31.0. The checking-deposit index slipped to 67.2 from 78.1 in January while the index for certificates of deposit and other savings instruments rose to 47.6 from 42.2 in January. “Banking data continue to reflect healthy farm income and an expanding Rural Mainstreet economy,” said Goss.

Hiring: February’s hiring index advanced to 54.9 from 52.4 in January. “New hiring in the region continues to expand at a mod-est pace. While job growth remains slow, it is well up from one year ago when job growth was at virtual standstill,” said Goss.

Confidence: The confidence index, which reflects expectations for the economy six months out, softened to 51.7 from 55.5 in January. “The failure to pass a new farm bill and the impending spending sequestration combined to lower confidence in future Rural Mainstreet economic growth,” said Goss.

Home and retail sales: The February home-sales index soared to 65.0 from January’s 55.6. The February retail-sales index advanced to a feeble 46.6 from January’s 44.5. “Much like the national numbers, Rural Mainstreet retailers are experi-encing cuts in overall sales since the beginning of the year,” said Goss.

Each month, community bank presidents and CEOs in nonur-ban, agriculturally and energy-dependent portions of a 10-state area are surveyed regarding current economic conditions in their communities and their projected economic outlooks six months down the road. Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are included.

Main Street Economic Survey

C r e i g h t o nU N I V E R S I T Y E r n i e G o s s

Rural Main Street Index Remains Healthy: Low Corn Prices Would Threaten Loan Repayments

March 2013 . www.cbiaonline.org 15

Colorado: For a fifth straight month, Colorado’s Rural Main-street Index (RMI) remained above 50.0. The February RMI dipped to 61.1 from 64.1 in January. The farmland and ranch-land price index slipped to 70.2 from January’s 70.6. Colorado’s hiring index for February expanded to 54.6 from January’s 50.0.

Illinois: For a fifth consecutive month, the RMI for Illinois moved above growth neutral. The February index improved slightly to 61.4 from January’s 61.3. Farmland prices tumbled to a healthy 71.2 from January’s 76.7. The state’s new-hiring index increased to 55.3 from 54.1. Iowa: The February RMI for Iowa advanced to 59.8 from Janu-ary’s 59.0. The farmland-price index declined to 70.4 from 75.4 in January. Iowa’s new-hiring index for February improved to 54.7 from January’s 53.2.

Kansas: The Kansas RMI for February sank to 47.2 from 53.7 in January. The farmland-price index fell to 60.0 from January’s 75.4. The state’s new-hiring index declined to 47.8 from 48.5 in January. Minnesota: The February RMI for Minnesota rose to 73.4 from 71.2 in January. Minnesota’s farmland-price index declined to 83.3 from January’s 85.1. Minnesota’s new-hiring index ad-vanced to 63.3 from January’s 59.7.

Missouri: The February RMI for Missouri soared to 64.5 from January’s 51.5. The farmland-price index for February de-creased slightly to 67.5 from January’s 67.8. Missouri’s new-hiring advanced to 52.8 from 48.2 in January. Nebraska: After moving below growth neutral for January, Ne-braska’s Rural Mainstreet index broke above growth neutral for February. The February RMI expanded to 52.7 from January’s 48.8. The farmland-price index slipped to 60.7 from January’s 66.2. Nebraska’s new-hiring index increased to a weak 48.3 from January’s 47.1.

North Dakota: The North Dakota RMI for February decreased to a regional high of 78.9 from 83.3 in January. The farmland-price index advanced to 86.4 from 85.2 in January. North Da-kota’s new-hiring index decreased to 75.1 from 78.3 in January. South Dakota: The February RMI for South Dakota improved to 54.1 from January’s 53.5. The farmland price index decreased to 65.0 from 71.0 in January. South Dakota’s new-hiring index for February advanced to 51.1 from 50.3 in January. Wyoming: The February RMI for Wyoming declined to 54.1 from 54.8 in January. The February farmland and ranchland price index decreased to 64.6 from 70.5 in January. Wyoming’s new-hiring index climbed above growth neutral with a February reading of 51.9 which was up from January’s 51.0.

Tables 1 and 2 summarize survey findings.

This survey represents an early snapshot of the economy of

rural, agriculturally and energy-dependent portions of the na-

tion. The Rural Mainstreet Index (RMI) is a unique index cover-ing 10 regional states, focusing

on approximately 200 rural communities with an average

population of 1,300. It gives the most current real-time analysis of the rural economy. Goss and Bill McQuillan, CEO of CNB Community Bank of Greeley,

Neb., created the monthly eco-nomic survey in 2005.

Table 1: Rural Mainstreet Economy Last Two Months and One Year Ago: (index > 50 indicates expansion)

Feb. 2012 Jan. 2013 Feb. 2013Area economic index 59.6 55.6 58.2Loan volume 31.2 39.0 46.7Checking deposits 64.5 78.1 67.2Certificates of deposit and savings instruments 50.0 42.2 47.6Farmland prices 75.0 71.5 67.0Farm equipment sales 63.4 63.8 65.8Home sales 51.5 55.6 65.0Hiring 53.7 52.4 54.9Retail business 50.0 44.5 46.6Confidence index (area economy six months out) 60.3 55.5 51.7

Table 2: The Rural Mainstreet Economy, February 2013Percentage of bankers reporting

$4.50 $4.00 $3.50 $2.50 - $3.49At what corn price will farm loan repayments in your area be in jeopardy? 29.4% 35.3% 21.6% 13.7%

$6.00 - $7.00 $5.00 - $5.99 $4.00 - $4.99 $3.00 - $3.99What is the current breakeven corn price for farmers in your area that rent their land? 1.9% 41.5% 49.1% 7.5%

One third or more 1/5 to 1/3 1/10 to 1/5 Less than 1/10Assuming that the drought continues, what share of their animals will livestock producers sell off? 15% 18.3% 26.7% 28.3%

Solutions that ICBA Securities can provide to your bank:

• BankAdvisory-Capital raises, mergers/acquisitions, strategic planning, valuations, ESOPs, stock options & more (offered through ICBA Securities’ affiliate, Vining Sparks Community Bank Advisory Group)

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