Ohio Bankers League Winter 2010 Magazine

An Ohio Pioneer

The Official Magazine of the Ohio Bankers LeagueThe Official Magazine of the Ohio Bankers League

OBL ANNUAL MEETING IN PICTURES

WHAT TECHNOLOGY TRENDS WILL BETOP OF MIND FOR BANKS IN 2011

THE HIDDEN CRISIS IN BANKING

INSIDE THIS ISSUE

winter2010 issue

The Official Magazine of the Ohio Bankers LeagueThe Official Magazine of the Ohio Bankers League

PARK NATIONAL’S

BillMcConnell

Ohio Record winter 20102

winter 2010 Ohio Record 3

A Comprehensive Resource for the Ohio Banking Industry

winter2010 issue

Other News

4 Chairman’s Corner

6 Random Thoughts

18 Steps of theStatehouse

30Window onthe Capitol

34 Banking Calendar

45 Around the Industry

Features

8 OBL Annual Meeting Provides Directionto Crowd of 300In Pictures

10 Park National’s Bill McConnellA Pioneer in Banking

14 The Hidden Crisis in Banking

17 How Might Dodd-Frank Affectyour Directors & Officers Insurance?

22 Intensive Week Translatesinto Wealth of KnowledgeOBL Bank Management School 2010

26 2010 Year in Review

29 Historic Changes forElections and Electioneering

36 Gone with the WindThe forever-changed banking landscape and how to navigate it

39 Opening the Spigot:Realizing new revenue streams through export finance

42 What Technology Trends WillBe Top of Mind for Banks in 2011?

Contents

Ohio Recordwinter 2010 issue

Well, I picked an interesting year to beOBL chairman. It seems like only a monthor two ago that I was looking forward toChristmas 2009. Now, Christmas 2010 isupon us and I find myself wondering wherethe past year has gone.

If I was to characterize 2010 with justone word it would be ‘tumultuous’. TheOBL was faced with a great deal of adver-sity but still accomplished a lot in a shortspace of time, in the political arena, ineducating Ohio’s bankers, and through itscollective buying arm, OBL BankServices.

GovernmentGovernment remains the most signifi-

cant risk area for banks. With Dodd-Frank,this was underlined once again.

The multitude of new regulationscreated by this huge bill will usher in a newage for banking and drive up compliancecosts for all Ohio institutions. The OBLfought long and hard to mitigate orremove the bill’s more harmful provisions –like abolishing the thrift charter – butthere is a long road ahead during theimplementation phase.

Ahead of the rulemaking process,the OBL has been working with theU.S. Treasury to give Ohio banks andthrifts the opportunity to give real inputinto the process and open lines for futurecommunication.

We are actively engaged with theComptroller of the Currency as it takeson the regulation of federally charteredsavings & loans. Head regulators from theOTS and OCC recently visited the OBLoffices to discuss the new regulatorystructure with members.

We also have our Annual WashingtonD.C. fly-in on March 2, where we will visitthe heads of all the federal banking agen-cies, along with top staffers.

Dodd-Frank would have been worsehad it not been for the tireless work of theOBL government team and its grassrootsnetwork of bankers who took the time to

explain complex issues to their congress-men, one-by-one. But the importantdebate on regulations is yet to come. Weneed you to be a part of it.

InvestmentThe OBL has once again been at the

forefront of educating our bankers. We heldmore than 50 classroom seminars, led theway on six banking schools and co-spon-sored two others with adjoining states. The

association also held another great con-vention, this time in French Lick, Indiana,attended by over 300 and hailed by manyas ‘one of the best ever’. We had fun watch-ing the Buckeyes beat Miami with oldfriends in French Lick, even if it did makeus a little late for the evening reception.

Attending the convention, with itsnetworking opportunities, outstandingprogramming and governmental insight,brought to mind the many advantagesOBL membership brings. Your dues dollarswork in a variety of tangible and intangibleways, many of them detailed in this editionof Ohio Record. I challenge you over thenext year, to make those dollars work in waysthat may never be read in these pages.

Enroll someone at your bank in theBank Management School and see what adifference it makes. Nearly every OBLmember that has enrolled a student in theschool has found the experience sobeneficial that it has sent at least onemore. Look at the seminars the OBL holdsevery week, covering almost every conceiv-

able subject. Need one that isn’t listed?Call the OBL and ask Julie or Susan tobuild a high quality course for you.

Explore the products and services thatOBL BankServices provides – one of themcould save your institution thousands ofdollars or help provide a product or serviceyou don’t offer today. Only this past year,the OBL’s collective buying arm embarkedon an exciting new venture offering titleagency services that could further enhanceyour bank’s arsenal of products and services.

HonorThe year might have been tumultuous,

but it has also been rewarding. It was veryspecial to be part of the OBL leadershipteam in the same year that former OBLchairman Steve Wilson of LCNB NationalBank was named chair of the AmericanBanker Association. Having one of Ohio’sown sons in such a prestigious position istruly an honor.

It has been a wonderful experience forboth Polly and I, and the year really hasflown by. I would like to say thanks to MikeVan Buskirk and the OBL staff for all theirsupport and cooperation. Paul Reed has agreat team to work with during his tenureas chairman in 2011 and he has my fullsupport moving forward. With Paul at thehelm, the Ohio banking industry is incapable hands.


chairman’s cornerTom Moore, President& CEO at First FederalBank of Ohio in GalionA Tumultuous Year

Dodd-Frank would have beenworse had it not been for thetireless work of the OBLgovernment team and its

grassroots network of bankerswho took the time to explaincomplex issues to theircongressmen, one-by-one.

Have an interesting story to tell, recentpromotions, innovative program or other bankannouncements? If it’s news you think we needto know…tell us about it. We’re interested inkeeping up to date on the activities of ourmembers. Please put the OBL CommunicationsDepartment on your media mail or e-mail lists.Send your news to:

James Thurston, Editor, Ohio Record,[email protected],

4249 Easton Way, Suite 150,Columbus, OH 43219-6170.

Tell Us About It

4249 Easton Way, Suite 150Columbus, Ohio 43219-6170Tel. (614) 340-7595Fax (614) 340-7596Toll Free 800-686-6755

James Thurston, EditorSusan Poling, Features

Association Staff

Michael AdelmanVice President of State Government [email protected]

Brenda Arnold, Administrative AssistantOBL [email protected]

Mike Baker, VP & Executive Director,OBL [email protected]

Dan Conklin, BankPac/GovernmentRelations [email protected]

Michelle Crume, Vice President & Regional DirectorOBL/Infinex [email protected]

Pam Foster, Compliance [email protected]

Carol Halkias, [email protected]

Wendy Hench, AdministratorOhio Bankers Benefits [email protected]

Julie Kiplinger, Manager of Professional Seminars& In-Bank [email protected]

Sue Leppert, Administrative [email protected]

Lynn Moore, Accounting Coordinator,OBL BankServicesCompliance Coordinator, OBL Compliance [email protected]

Susan Poling, Communications [email protected]

Jeff Quayle, SVP & General [email protected]

Bill Showalter, OBL Compliance [email protected]

Gary Sutter, Employee Benefits Manager,OBL [email protected]

James Thurston, Communications [email protected]

Sue Turner, Executive [email protected]

Mike Van Buskirk, President & [email protected]

Melea Wachtman, Senior Vice Presidentof [email protected]

The Ohio Record is published quarterly byOBL BankServices. Member subscriptionsmay be purchased for $25 per year; Non-membersubscriptions may be purchased for $50 per year.POSTMASTER: Send address changes toOhio Record at the address listed above.


OSU PresidentGordon Gee to Speak at2011 CEO Symposium- May 10 & 11

Individually, a bank might spend up to $5,000 for a Compliance Coach mem-bership - but with the collective power of the OBL - this nationally-known onlinecompliance training continues to be available at no cost to member banks. Theover 100 OBL member banks that are also Compliance Coach clients haveaccess to 35 FREE interactive online compliance courses 24/7 in high risk areas- 11 of which are approved for CRCM credits, including: RESPA: HUD-1/1A;Currency Transaction Reporting; and HMDA: Reporting and Disclosure.“We were very satisfied with the Compliance Coach training programs we uti-

lized last year and we will continue to use the product in the future,” said LisaEadler, operations officer, Greenville National Bank. “We found the program avaluable tool, as we were able to customize annual training specific to employeejobs and responsibilities and document results to follow up with any additionaltraining that was needed.”The OBL introduced this program to its members as a benefit in January

2009 and is pleased to continue this no-fee program in 2011. If your bank is notalready registered, visit the OBL Web site for more details or contact JulieKiplinger at 614-340-7612.

NO COST ONLINE COMPLIANCETRAINING STILL AVAILABLE IN 2011

OBL Taps Time Magazine’s BestCollege President as Keynote

The Ohio State University President Gordon Gee is confirmed to keynote the2011 OBL CEO Symposium, May 10 & 11 at the Hilton Columbus at Easton. Gee,recently called a “transformational leader who understands where we have been,where we are and where we still need to go,” by the OSU board of trustees, will offerinspirational leadership insights.

Gee has spoken about the importance of Ohio's higher education institutions aselements in forging Ohio’s long term economic revitalization – and will also addressthese issues at the program. Watch for complete agenda details, which will include thereturn of the popular Regulatory Panel Discussion. Suggestions for session topics andspeakers are now being accepted; and a limited number of sponsorships are available.

NEW! The OBL will include a special guest rate for the program, allowing for your spouseto attend the opening and closing keynote luncheons. Please contact Susan Poling at614-340-7611 or [email protected] for more information.

In today’s economy can you or anybanker support promising long term devel-opment when there’s a less expensive shortterm alternative? Often the answer mustbe no. What I’ve just described is a dilemmabank executives routinely face in their owninstitution. It’s also a dilemma they rou-tinely face collectively as they work tobuild their bankers’ associations.

Health insurance, the subject of inten-sive public attention and national debatethroughout this year, is a good example.Skyrocketing medical costs have madeaffordable insurance for high qualityhealth care a challenge for every business,particularly small businesses.

Health insurance cost was an area thatthe banker leadership of OBL decided toconfront directly a number of years ago,founding a co-operative health insurancetrust. Community banks, joining together,essentially own their own insurancecompany. Its form is non profit. It wasdesigned to be effective, but operationallylean. The combination should add up tosavings and it does, over time.

The OBL’s purpose, generically, is to bethe platform on which the industry buildssolutions to problems best addressed bybanks working together. That could belobbying the Ohio General Assembly orworking out better rules with a bank regu-lator. It could be developing a school orwebinar on a subject key to banking orresearching and writing an industrynewsletter or magazine. More recently ithas been cooperatively bank ownedbusinesses like our securities dealer-brokerInfinex, our new title insurance operation,or the aforementioned Ohio BankersBenefits Trust.

The trust has been successful since theOBL was formed from its two predecessororganizations. It has grown to represent 40percent of Ohio’s banks. Its year to yearpremium changes have been less than halfthe Ohio medical cost inflation trend rate.We’ve even had premium holidays whenclaims experience was particularly good.

Since the trust’s only goal is to provideaffordable, high quality health care andbreak even, its operating cost ratios are sig-nificantly below the major insurance com-panies. Nevertheless, while the trust hasbeen growing steadily, it remains smallcompared to companies like MedicalMutual or Anthem. The giant healthinsurers don’t offer premium holidays,particularly if they have shareholders.However, they rarely have bad claims yearsbecause their size evens out their claimsexperience. Scale isn’t everything but alarge pool does smooth out bumps. 2010brought the Ohio Bankers Benefits Trusta bump.

Last October, after several years offavorable experience, health insuranceclaims in the trust jumped and remainedvery high throughout the first half of theyear. Part of the jump was caused by therecession and by concerns surroundingCongressional consideration of the nationalhealth insurance bill. Part was simply amuch higher than average number ofcancer claims. An average is an average,and claims fell to normal levels in the pastquarter. However, the trust board (allcommunity bank CEOs whose employeesare insured by the trust) set renewalpremiums at twice the rate of last year inorder to restore the trust’s reserves.

In a tough economy every bank needsto save money wherever it can. But if aninstitution secures a lower bid as a market-ing ploy from a larger company will theteaser rate be outweighed by larger premi-ums down the road? That has often beenthe case. Since our last price increase,some banks have left the plan, but othersare poised to join. However, the conse-quence is that growth which benefits allbank participants could be slowed. One ofthe pleasant facts about the trust is thatevery time a new bank joins, statistically itmakes the program better for every exist-ing participant. As the trust grows, the“bumps” smooth out and the operatingcost advantages pay off more consistently.

Cooperative action, the reason theOBL was created more than a century ago,requires banks to work for the commongood. Long term everyone benefits.Ultimately, community bankers bestcontrol their destiny by working togetherpicking areas where scale can make adifference then working cooperatively tomake sure these jointly owned operationsare run effectively and efficiently. Successdepends not just on jumping into thepool; it requires being a part of thecollective oversight.

In good economic times, it’s easiest tolook to the long term. But it is duringbad economic times when the benefits ofpast investments in the common goodreally pay off. Cooperative success requireslooking ahead.


Michael M.Van BuskirkPresident & CEOPenny Wise – Pound Foolish

random thoughts

Go towww.ohiobankersleague.comto catch up with the latest news asit happens in the Ohio bankingcommunity. View our calendar ofevents; get involved in online politicalgrassroots campaigns; find a productor service; browse our banking newssection; or enroll in the latest inbanker education programs.

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Richland Bank’s Dave Gooch with the Barrister Title Groupteam of Saunie Tomecko, Vicki Webb and Bud Vetter

A packed auditorium hears from formerSouthwest exec Jason Young

Park’s Bill McConnell (right) receives thePioneer in Banking Award

President of the Ohio Senate Bill Harris

Ohio Valley Bank’s Jeff Smith, Farmers Bank and SavingsCompany’s Paul Reed and keynote speaker Jason Young

Portage Community Bank’s Rick Coe, Cincinnati Federal Savingsand Loan’s Joe Bunke and Taylor Adviser’s Todd Taylor

FHLB Cincinnati’s Tom Ciresi and MiamiSavings Bank’s Bob Lameier

OBL Annual MeetingProvides Direction toCrowd of 300

Community Bancshares, Inc.’s TomWill receives the Ohio BankPacShining Star Award

The OCC’s Ann Jaedicke and OhioBankPac Chairman Trent Troyer, FirstFederal Community Bank, Dover

OBL Chairman Tom Moore, First FederalS&L Assoc. of Centerburg’s TerryBumpus and the OBL’s Mike Adelman


IN P I C TUR E S

“Last year, a 2,300 page banking bill was passed. This year, the rules for that bankingbill will be written,” said incoming OBL board president Paul Reed, president & CEO,Farmers Bank and Savings Company, Pomeroy, at the OBL Annual Meeting & ProfessionalDevelopment Event on Nov. 3. He then noted, “If you want a better industry, it is moreimportant than ever to get involved.”

If the turn-out for this year’s program is any indication – Ohio bankers are ready foraction. Informative breakout sessions – many with standing room only – industry awardsand the OBL Board election attracted more than 300 Ohio banking industry executives.Including a keynote address from Southwest executive Jason Young, president of LeadSmart,Inc., and comments from Ann Jaedicke, deputy comptroller for compliance policy at theOCC, the program brought bankers together at the end of another challenging year toprovide a road map, directions, tools and strategies to succeed in 2011.

Young, who offered insight on the importance of building relationships and holdingleaders accountable, provided tools and strategies among real-life experiences as he sharedthe cultural factors that drive the behavior of managers and those employees who servethe customers.

2011 Board of Directors ElectedElected 2011 association leaders included: Chairman – Paul M. Reed, president &

CEO, Farmers Bank and Savings Company, Pomeroy; First Vice Chairman – Chairman G.Courtney Haning, chairman/president/CEO, The Peoples National Bank, New Lexington;Second Vice Chairman –Trent B. Troyer, president & CEO, First Federal CommunityBank, Dover; and Treasurer – Paul M. Limbert, president & CEO, WesBanco Bank Inc.

Elected for two-year, directors-at-large positions, with terms expiring Dec. 31, 2012,were: Kurt Treu, EVP/market president, Cleveland, U.S. Bank National Association;Daniel W. Schutt, president & CEO, The Union Bank Company, Columbus Grove; andWilliam Koehler, president, Great Lakes Region, KeyBank, NA, Cleveland.

Awards & HonorsPark National Corporation's Bill McConnell was only the second banker in history to

receive the Pioneer in Banking Award (read more on p. 10); while President of the OhioSenate Bill Harris received the Paul E. Gillmor Lifetime Public Service Award. Upon receivinghis award, Harris told attendees, “You need to communicate (to those in office) what yourneeds are in your industry.”

Community Bancshares, Inc., was awarded the 2010 Shining Star Award recognizingcontributions to Ohio BankPac. The bank’s president & CEO Thomas D. Will acceptedthe award from OBL board chairman Thomas Moore, president & CEO, First Federal Bankof Ohio, Galion. Will said, “Bankers need to ensure our message and our concerns areheard,” as he encouraged all to support the effort in 2011.

The Mechanics Savings Bank in Mansfield received the annual GSB Banker AdvisoryBoard Scholarship, awarded to an outstanding OBL member bank for its involvement intheir community and the League. President Deborah Schenk accepted the award on herbank’s behalf and noted, “It will be a great encouragement to our entire team as we earnthe right to remain independent every day. Being the only independent bank in ourcommunity is a privilege that carries with it great responsibility. To that end, we shall usethe scholarship judiciously.”

By Susan H. Poling, OBL Communications Manager


PARK NATIONAL’S

BillMcConnell

Bill and late wife Jane

McConnell at

an OBL event.

After receiving his MBA in the late 1950s, a young Bill McConnell knew hewanted to get into banking. He also knew the kind of bank he wanted to work for.In an interview at then small community bank Park National, the bank’s CEO

asked him, “Do you aspire to be the bank president?” McConnell replied, “I’m notcertain I have the ability, but I don’t want to go to work for a bank where that isn’ta possibility.”More than 50 years after being hired as the bank’s first management associate,

he still sits on the board of the Newark-based institution, and Park has gone fromstrength to strength under his leadership and that of his successors.At the recent OBL Annual Meeting, McConnell was presented with the Ohio

Bankers League Pioneer in Banking Award. The award recognizes an Ohio bankerwhose vision, innovation and leadership have had a material impact on ourindustry and Ohio communities. He became only the second individual toreceive the award, after former Bank One CEO John G. McCoy acceptedit in 2006.

OBL President & CEO Mike Van Buskirk commented, “Bill is creditedby many around the country for developing and proving the concept ofwhat has become known as the super community bank.”

Early on, McConnell believed in centralizing the parts of bank opera-tions that were transparent to the bank’s customers. Centralizingaccounting, investment portfolio management, audit and data processingwere early candidates for consolidation. But decision making powersremained local.

Current Park Chairman & CEO Dan DeLawder pointed out,“Keeping decision making “in the field” was critical if we hoped to offera higher quality of customer service than our competition. Bill was thefirst to make it clear that ‘…all wisdom does not reside in Newark,Ohio’ and that for Park to be successful, decision making input andcollaboration would be preferred.”

McConnell was also very aware of hiring the brightest and best,and then investing in them.

“Growing Park into an Ohio banking leader, he understood thecritical importance of the most basic building block – people,”observed Van Buskirk. “Recruiting and developing people with real

ability were hallmarks of his leadership.”McConnell is one of only a handful of bankers to have served as chairman of

both the OBL and national banking trade group, the American BankersAssociation.Van Buskirk added, “He viewed bankers associations, both state and national,

as critical tools to help his bank and the people he worked with serve theircustomers and shareholders better. Bill invested heavily in tools important to hisbank and he invested himself in the Ohio Bankers League throughout his career.”He also served two terms as director of the Federal Reserve Bank of Cleveland

and is a current director of several local companies. He received a B.A. inEconomics from Denison University, an M.B.A. from Northwestern Universityand is a graduate of several professional schools including the Stonier GraduateSchool of Banking.His activities in the community include serving as a trustee of the Newark

Campus Development Fund, Licking County Foundation and A Call To College,and board member of Kendal of Granville and Granville Studio of Visual Arts. Heserved as a trustee and chairman of the board of trustees of Licking MemorialHospital, and subsequently chaired the hospital's holding company, LickingCounty Health Systems.


A Pioneer in BankingJames ThurstonEditor

With current Park Chairman

& CEO Daniel DeLawder


“Bill followed in the footsteps of John Alford and Ev Reese (pictured,with McConnell, outside Park’s HQ in Newark) which was no easytask as both John and Ev were icons in Ohio banking circles, and Mr.Reese also led the American Bankers Association in the early 1950s.Bill gained immeasurably from working with his two predeces-sors…learning along the way the value of integrity, hard work, andmaking sure the business of banking was fun for all involved. Hecombined high intellect with a keen understanding of knowing how torecruit folks to the bank, give them meaningful work to do, and stayout of their way while they got the job done.”– PARK CHAIRMAN & CEO DAN DELAWDER

“When Bill originally hired me I had been turned down 24 times.He explained, ‘We hope everyone else was wrong.’

“Bill is a real Renaissance Man. He took up golf later in life,still takes ski lessons even though he’s skied for more than 30years and runs every day. Conversations with him are alwaysmulti-dimensional. The subject can go from economics, to Britishliterature, to child raising tips, all in the space of a few minutes.”– PARK PRESIDENT DAVID TRAUTMAN

“Bill McConnell proved early that he was a nat-ural leader. The people that worked with and forhim – and competing bankers – instinctively likedhim. That attraction was a combination, I think,of intelligence and integrity.”– OBL PRESIDENT & CEO MIKE VAN BUSKIRK

“In his own kind way Bill forced me to learnand grow my career in ways I wouldn’t havedone on my own. I’ve often shared with othershow he would assign me a project…giveinstructions ending with “you know”. In mostcases I “didn’t know” but I’d figure it out,completed the project and always made surewhatever I did reflected well on him. Herecognized abilities and skills in me that Ididn’t even realize I had and led me toimprove as a banker and as an individual.”– PARK ASSISTANT VICE PRESIDENT BRENDA KUTAN

Bill with John Alford and Ev Reese,both former OBL chairmen andpresidents of Park. Reese, likeMcConnell, also chaired the ABA


With Park AVP Brenda Kutan and PresidentDavid Trautman. Trautman and DeLawderare also former OBL chairmen

Bill at the Ohio BankersAssociation Convention,1984. He chaired theorganization in 1981

Outside the NewarkChamber of Commercewith retired Park SVPJerry Nethers

As we emerge from the financial downturn now known as The Great Recession, whichpummeled the financial industry and spawned the now-despised program known as TARP,another crisis is looming. This crisis, however, is not one caused by faulty mortgage lendingpolicies, credit default swaps or Wall Street. It is of our own doing, even aided and abettedat times by bank boards and CEOs. It is a crisis of leadership, exacerbated somewhat byreticence to plan for the long term viability of our own institutions.

In the new world order of our banking industry, I believe that the two most vitalingredients for banks small and large, are capital and talent. Everything else, from regula-tory scrutiny to asset quality issues to investments gone sour, are tactical problems that canand will be mostly resolved over time, provided that the talent and capital are available toweather the storm. And, without these two, regulators are increasingly reticent to grant thetime necessary for institutional recovery.

This is not meant to diminish asset quality and other problems which can be majorheadaches to fix, and may need help from a general economic recovery. We keep returning,however, to the twin necessities of talent and capital, as troubled institutions that are shorton leadership will likely pay a premium for additional capital, if it is available to them at all.A number of well managed community banks have become magnets for capital—in manycases with little or no dilution—precisely because of their strong leadership teams.

According to Robert Kafafian, President & CEO of bank consulting and advisory firmThe Kafafian Group, “The quality of the executive management team is one of the veryfirst things we explore when working on a strategic plan for a client. If a bank lacks strongplayers in critical positions, it makes executing the plan much more challenging, especiallywhen approaching a transition in any of the bank’s senior leadership roles. While planningis important, having a team that can execute is critical.”

Having been in countless bank boardrooms and advised dozens of community banksaround the issues of leadership succession, some patterns have emerged:

•Most bank boards with a named successor have limited context with which todetermine whether that individual is truly ready and capable of running the bank,or whether this person can create “followership” throughout the organization.•Many incumbent CEOs are reticent to truly plan for their departure, because theyare not sure when they will really want to retire; or they do not want to be “pushed”by someone waiting in the wings; or they simply refuse to accept that they will notlive forever.


TheHiddenCrisis inBanking

Alan J. KaplanFounder & CEOKaplan & Associates, Inc.

•Boards often struggle with the issue of“the devil they know”. We have seenmany boards select a less ready inter-nal successor, who is a good teamplayer and wonderful cultural icon,over a more qualified (and well fitting)outsider, simply because they were notwilling to hire someone they did notknow prior to launching their search.If a board strongly desires a home grownsuccessor, which is usually preferable,the process of developing the nextleader must begin much sooner.•Banks too often begin to search for asuccessor with a short timeline for theincumbent CEO to retire. An earlierhunt for the future leader would allowfor better successor development, asmoother cultural integration, and aneasier transition in partnership withthe retiring CEO.

So, what is the solution to this conun-drum? The answer is quite simple: investthe time early-on to develop the highpotentials within your organization; set theexpectations around timelines and roles;and be honest about what you have or donot have in your own talent pool. Bankingtoday is a far more complex industry that itwas in the mid-1980s when I first enteredthe industry. The demands on CEOs ofeven the smallest institutions requirebroader skill sets, new ways of managinga diverse and diffused workforce, andpolitical and organizational savvy on a newlevel. Developing these qualities is noteasy, but failing to do so actually createsmore institutional risk, including the com-plexities involved in bringing in a newleader from the outside when internaldevelopment efforts fall short.

We have noticed a decline in atten-dance at industry conferences over thepast few years, partially due to the costclimate and partially the “optics” of aboard or bank leaders flying off to a resorton “bank business.” However, industryconferences and conventions—some ofwhich clearly offer stronger education thanothers—can provide a vital connection tothe latest trends and issues facing thosewith fiduciary responsibility for the institu-tion. The OBL and other associationsprovide excellent training programs forboth up-and-comers as well as well as

incumbent leaders. More banks shouldleverage these and other regional andnational resources on behalf of thenext generation.

Back home, few boards are focused onthe two most vital elements of groomingand retaining high potentialexecutives:1. The personalinvolvement oftheir boss (orboard) and2. Providingdevelopmentalstretch assign-ments forup-and-comers.This is where the

objections often start,with comments like “I can’tafford to take my Chief Lender outof that role to broaden her background. Ineed her there”. We believe that if she is atrue successor contender, you can’t affordNOT to round out her banking skills andknowledge in other key areas of the insti-tution. We have seen too many solidcitizens elevated into the president’s chairwith less than ideal preparation, where thebank could have invested the time (morethan money) to better round out theirexperiences. A little coaching around lead-ership competencies and managing formerpeers doesn’t hurt either, and is often avery worthwhile investment. Most under-prepared successors will be the first to admitthat they wish more had been done to preparethem for the Big Chair.

Showing your up-and-comers thatthere is a plan for their future, and that youas their current leader (or as a board mem-ber) are consciously aware of this, is alsovital. High potentials want to “feel thelove”, and this more than anything willkeep them committed to the organization.Few rising stars will leave an institutionthat they feel cares about them andis working to help them reach their poten-tial. Developmental stretch assignments,special projects, and board exposure are allways to make your best-and-brightest feelvalued—while while testing their mettle.Best of all, these activities do not cost thebank money to implement; they may actu-ally save or make money for the institution.

Adds Kafafian, “Community bankscan do more to prepare for leadershipsuccession well in advance of plannedretirements. Failing to groom the nextgeneration can be one more reason why abank might be forced to consider selling or

merging.” In the future, whenthe current financial indus-try downturn is finally inthe rear view mirror,there will likelystill be between7000 and 7500banking institutionsin this country. Yetit is unclear whetherthere will actuallybe enough qualified

leaders to run thesebanks. Formal training pro-

grams like the one I was recruitedinto right out of college have largely goneby the wayside.

Today, what remains are mostly ahandful of larger community banks with afew credit analysts being training on-the-job. While there is nothing wrong with thisapproach, it lacks the scale and depth ofpredecessor programs. Quality commercialloans may be hard to come by these days,but quality commercial lenders with strongbanking skills and upside potential areeven harder to find. Yet this is a major partof the talent pool from which future bankleaders will be drawn.

Our industry remains a vital part ofthe national economy in many ways, andcommunity banks are often the lynchpinof their local business communities.Ensuring the survival of the industry andcommunity banking is critical all across thecountry. The best way to secure yourbank’s future is by developing leaderswithin the bank who have the potentialto manage and grow a strong, healthyinstitution for the long term. Failing todo so may result in your bank’s next crisis,and one which may be even more difficultto resolve.Alan J. Kaplan is Founder & CEO of Kaplan &Associates, Inc., an OBL Member ExecutiveSearch and Talent Consulting firm specializingin the banking industry. You can reach him at610-642-5644 or [email protected].


Since the passage of the Dodd-FrankWall Street Reform and ConsumerProtection Act earlier this year, much hasbeen written about the possible effects thenew legislation will have on banks, bothlarge and small. As banking, legal and reg-ulatory experts continue to debate the Actand its potential ramifications, one thing isclear: more rules and regulations are onthe way. Anytime new laws are created,particularly those of the size and scope inDodd-Frank, it is important to review yourD&O contract for potential coverageshortcomings and exclusionary language.

Directors & Officers liability insuranceis designed to protect against claimsinvolving actual or alleged omissions,errors, misstatements and misleadingstatements. The potential to unintention-ally violate one of the numerous significantnew regulations or laws resulting fromDodd-Frank is very real. For example, thecreation of the Consumer FinancialProtection Bureau and the new lawsintended to ensure fair and equitableaccess to credit create many potentiallender liability coverage implications.

Most entity claims are due togeneral errors and omissionsduring the lending process

A study of our claims data reveals thatgeneral errors and omissions during thelending process are the largest source ofpaid entity claims, and many of theseallege violations of lending laws such asTILA or other Federal or State regulations.We can expect to see violation of law alle-gations increase if the predictions of 5,000new pages of banking regulations fromDodd-Frank hold true. The coverage

implications are enormous as some policiesspecifically exclude violations of lendinglaws. This not only precludes coverage forany judgment or settlement, it also meansdefense costs are not covered. Whileintentional violations of law are never cov-ered, look for policies that expressly agreeto pay defense costs for these matters.

Regulatory Exclusioncoverage issues

Another potential coverage issue toconsider is the Regulatory Exclusion. SomeD&O policies commonly purchased bycommunity banks do not provide coveragefor claims brought by regulatory or supervi-sory bodies, most often through a specificexclusion or the definition of Loss. This isalready a significant coverage restriction; ifwe see more regulatory actions as a resultof Dodd-Frank, the exclusion will becomeeven more punitive. If your bank is in goodfinancial condition and operating withoutan order, do not accept a regulatory exclu-sion. Contrary to what you may haveheard, strong-performing communitybanks can still find policies that do notcontain this exclusion.

There is no better time than today toreview your D&O contract. New rules andregulations created by Dodd-Frank are onthe way, and you don’t want to find your-self in a difficult position because of inade-quate insurance coverage.

For questions regarding Directors &Officers coverage, please contact youragent or visit www.abais.com.

Additional Dodd-Frank Actresources available to you

To help you understand more aboutthe Dodd-Frank Act and its potentialeffects, there is a useful Dodd-FrankTracker at regreformtracker.aba.com. Thisresource provides current information onthe implementation of the Dodd-FrankAct and contains posts made to the siteregarding Dodd-Frank. This is available toeveryone–you do not need to be a memberof the ABA to access the information.

The blog is organized for easy findingand tracking of information that you’reinterested in. The banking-related areas ofDodd-Frank are organized into categoriessuch as the Volker Rule, PrudentialSupervision, Systemic Risk, DepositInsurance, Interchange Fees, Preemption,Trust and Securities, and more. Featuresinclude news stories on Dodd-Frank Actproposals, comment letters and rules; acalendar of comment letter deadlines; andlinks to other resources. Special sectionsfocus on key issues, such as interchange,deposit insurance and the ConsumerFinancial Protection Bureau. Visitors cansign up to receive updates—via e-mail orRSS—as new content is posted.Mike Read is the Marketing and Sales Managerat ABA Insurance Services Inc., which providesD&O, bond and related coverages to financialinstitutions in all 50 states from an A+ ratedinsurance carrier. To learn more about thisOBL-endorsed program, please contact Mikeat 1-800-274-5222 or [email protected].


Mike ReadMarketing andSales ManagerABA InsuranceServices Inc.

How might Dodd-Frank affect yourDirectors & Officers insurance?

To reach over 4,000 key bankingdecision-makers contact

James Thurston at (614) 340-7621 [email protected].

Are you looking for that Spark?Creative print is morethan just ink on paperIt’s about gaining

Attention for your businessIt’s about stimulating

Interest in your productsIt’s about creating

Desire for your servicesThat’s where Ohio Record comes in

Michael J. AdelmanVice President of StateGovernment Relations

Election 2010: The Statewide OutlookThe Republicans won conceivably every race in this year’s election. They

took back the three statewide posts they lost in 2006 and hung onto thefourth. Thus, they secured the ultimate prize, the State ApportionmentBoard; thereby giving the GOP the authority to draw legislative boundaries.In a sheer numbers sense all of the Ohio House seats, and then some, thatDemocrats picked off over the prior two elections flipped Republican. Successbred more success in the Ohio Senate where they regained a seat lost in 2006and seized a long-coveted seat in the Dayton area. The Senate Republicanswill have their largest majority in over 40 years. But, the GOP’s success didn’tstop there. They also netted five Congressional seats, retained a U.S. Senateseat, took back the Ohio Supreme Court’s Chief Justice gavel and kept twohigh court seats. Though we expect many of these public officials to bereceptive to our industry’s positions, relationships matter and the credibilitywe need to succeed must be earned. Thus, our work is cut out to ensure theOBL continues its long tradition of being the go-to representative of the banksand thrifts at the Statehouse.

From theSteps of theStatehouse


TransitionGovernor-elect Kasich is strategically

assembling his cabinet as well as makingother key appointments. The team’ssingular goal is to facilitate an economicenvironment that will retain and createjobs. Kasich will make a mark on bankingthrough key appointments such asthe Department of Commerce director,superintendent of financial institutionsand its deputies. With Kasich’s congres-sional success and financial industryexperience he has been involved in manyof the issues that bankers care about most.We are confident in his ability to attractthe right people to lead this criticalindustry through the State’s persistenteconomic malaise.

To turn the corner, an improvedregulatory environment will be critical forall businesses including banks and thrifts.The OBL is armed with recommendationsfor alleviating regulatory burdens on finan-cial institutions. Selfishly the OBL believesour industry plays a vital role and Kasichlikely understands where we fit with capitalformation and economic development.

The OBL will work to build upon thesuccess of the Office of Insurance andFinancial Development within the OhioDepartment of Development. This two-person team was a response to the OBL’spersistent urging with the past couplegovernors that resources were needed topromote banking. Our industry’s strengthand diversity should be used as aneconomic development drawing card.Additionally, we employ a significantnumber of Ohioans and countless thou-sands more rely on a competitive bankingenvironment to support their professions.Further, we deserved an advocate withinthe executive branch. Yet, more workneeds to be done to focus on the realitythat banks and thrifts are critical to thefabric of every community and the State asa whole. Show me a job that is created ormaintained that doesn’t have a banker’sfingerprints on it. Plus, encouraging banksand thrifts to keep their charters, head-quarters and other significant operationsin Ohio along with their good-paying,environmentally-friendly jobs should beamong Kasich’s priorities.

Looking at the other new statewide

officeholders, they all have some relevancefor the banking industry. Accordingly, theOBL has established dialogue with all ofthem to find opportunities for bankers tofacilitate smooth transitions as well as pro-vide useful feedback loops going forward.

The state treasurer has the most directregular interaction. Many banks and thriftsin Ohio are registered to do business asstate depositories. Most local governmententities require this designation. Treasurer-elect Josh Mandel makes the leap fromstate representative where he served thepast two years as the ranking Republicanon the Financial Institutions, Real Estateand Securities Committee. He was veryvisible during the campaign meeting withmany bankers in communities across thestate. He fully understands the economicsignificance of using Ohio institutions forstate business.

As the “Top Cop” the attorney generaldefends state entities as well as consumersand businesses. Yet, unchecked activismcan bring harmful risk so it is critical tohave lines of communication in place toavoid surprises. Foreclosures have been inthe spotlight as of late for AGs across the


country and we share their goal of rootingout bad actors while ensuring responsibleparties are not hit with costly, overlappingnew requirements to do business. AttorneyGeneral-elect Mike DeWine has surroundedhimself with knowledgeable hardworkingstaff throughout his days in the statelegislature, as Lt. Governor and in theU.S. Senate so we are confident he willcontinue his trend.

The secretary of state’s office is theportal of business filings that bankers usedaily. Secretary of State-elect Jon Hustedhas paid close attention to the bankingindustry throughout his career in theGeneral Assembly, most notably during histenure as House Speaker. There may benew opportunities to streamline andupdate the business side of the office.

The state auditor intersects the

banking industry especially with regard topublic funds collateralization. Auditor-elect David Yost has deep roots with hisbankers thanks to years of public service atthe county level.

Lastly, the Ohio Supreme Court willsee a new chief justice with the election ofMaureen O’Connor. Her elevation from ajustice’s seat to the top slot may create newopportunities for Ohio’s banks and thriftsas we ensure we are given a fair shake inthe legal system.

General AssemblyAfter two years of Democrat control,

Republicans wrestled back the OhioHouse of Representatives. It will swingfrom a 53-46 Democrat majority to a59-40 GOP edge. Rep. Bill Batchelder(R-Medina) has been tabbed to lead them.

Batchelder first served in the House fromthe late 1960s until term limits took effectin the late 1990s, then returned in 2006.One-third of the 99 House members willbe freshmen; yet, seven come with priorlegislative experience that will help themhit the ground running in January.Nonetheless, the magnitude of turnovercompounds the change that will occur inthe lower chamber. Committee member-ship will significantly reshuffle and withparty change they will all get new chair-men. Thankfully, Batchelder announcedthe number of standing committees will bestreamlined from twenty-seven to seven-teen. This will enable interested parties tokeep better tabs on the process.

The Ohio Senate not only remains inGOP hands, but becomes an even stronger23-10 majority. They will be led by SenatorTom Niehaus (R-New Richmond) whoheads into his final two years before termlimits turn him away. Interestingly, termlimits, two incumbent losses, elections tohigher offices and cabinet appointmentswill result in a one-third turnover in theupper chamber as well. Yet, of the newsenators to be sworn in, at least sevenhave prior experience from the House.Their knowledge of the process and theplayers involved will enable them to makeimmediate impacts.

A Look AheadUnlike last session’s split control of

state government, Kasich’s upset of incum-bent Governor Strickland will likelygenerate considerable deference fromlegislative leaders paving the way for hispriorities. He will need that degree ofcooperation to bring the State’s budgetinto balance by July 1. Out of whack by anestimated $8 billion, Kasich has called fortough decision making on programmaticspending priorities going forward and theneed for government streamlining. TheOBL is sharing its suggestions on some oldand new initiatives intended on refocusingthe State’s priorities while maintainingand creating employment in Ohio. Thisincludes employment of bankers as wellas leveraging your willingness to lend tocredit-worthy borrowers.

Be safe in your holiday travels andrest up since 2011 could shape up to be areally exciting match.


Legislative PrioritiesThough I didn’t quite predict the degree of change resulting from the election,

my prediction of a very quiet lame duck is playing out like an indefinite hockeyintermission. Looking back over the two years that comprised this session the OBL’sbiggest success was none of the bills we fought the hardest against became law. You’llrecall our victory late last year in pushing for a corrective solution to unreasonablecounty record forms requirements. Overall, though, our zone defense helped keepthe opposing forwards in the corners and out of the passing and shooting lanes byplanting sufficient seeds of doubt that all the bills the OBL opposed would cause moreharm than good. Though we’d usually rather advocate for something, when thoseopportunities aren’t available its great to know a Patrick Roy or Martin Brodeur isbetween the pipes keeping pucks out of the net. The OBL’s involvement preventedconsiderable harm from impacting banks and thrifts at the state level. The numerousforeclosure bills dominated my time the past twenty four months. Once those werelargely iced an attempt was made to give credit unions authority to accept publicdeposits. Though it was never voted out of committee, it wasn’t due to a lack of efforton the part of the credit unions and advocates confusing the issue with anti-bankrancor. We also successfully defended three attempts to high stick depositories withunreasonable anti-free market requirements and eligibility standards on IOLTAs.Also peppered in there were nasty credit card related bills and others that sought toclamp down on products on which your customers have come to rely.

Thanks for honoring me to wear the captain’s “C” on my OBL sweater at theStatehouse. Our accomplishments the past two years, however, were “ours.”Supporters of ours in the legislature welcomed our advice and took note of ourwarnings. I say it a lot, but I can’t do it without you. You have worked hard todevelop credibility in your communities. You generously put forth the effort and timeto meet with your elected officials, participate in the OBL’s annual Day at the Capitol,hold legislative district meetings in your bank, send emails, write letters, testify incommittees, respond to my requests for first-hand experience to educate me oncomplex issues, and give to Ohio BankPac. Because of such effort amongst themyriad tasks that go into being a successful banker back in your community, yourelected officials recognize this commitment to the districts that they represent and itmakes you politically relevant. Thanks for lacing up your skates with me!

“Four score and six short quarters ago, three bankers and a reg-ulator took over American Community Bank. Our fore managersbestowed upon us a declining ROA, ROE and a decreasing spread,so we knew we had our work cut out for us. Net income was downfour quarters in a row, and net interest margin was at an all timelow.” So began the bank president’s message at an AmericanCommunity Bank shareholder meeting on Oct. 1, 2010.In reality, the bank “president” was Jessica Gribben, banking

center manager at Richland Bank – A Division of PNB, who waspresenting her final report at the 2010 OBL Bank ManagementSchool. A comprehensive and intensive one-week school, providingan institution’s rising or experienced bankers to a wealth of ideasand banking concepts.The week had full days of learning about subjects such as

Strategic Planning, Asset Liability, Risk Management, UPBRReport and Risk Management, and also included opportunities forstudents to hear from current Ohio banking industry presidents andretired regulators for candid discussion about regulatory agenciesand 21st Century Community Banking.Upon the closing of the School, Bill Campbell, lead faculty

member who runs the bank executive simulation program, noted,“This school provides a sincere and intense learning process. Eachstudent learned the most from their mistakes – and returns to theirbank with a new understanding of the difficulty in running a bankand a new appreciation for the roles of senior management on adaily basis.”OBL CEO& President Mike Van Buskirk provided high remarks

to the 24 graduates in front of their CEOs and managers at thegraduation ceremony. “This was an impressive class of studentbankers. A highly skilled group of individuals who worked hardlearning and integrating … who will now better understand thestrengths and weaknesses of those around you. There were talentedindividuals at the School, but it was the teams that translated intothe performance.”He also stated that this is the start of lifelong learning. “The

investment the bank made in you represents their belief that you area part of the future of their organization,” he concluded.


Intensive WeekTranslates into Wealthof KnowledgeOBL 2010 Bank Management School

Susan PolingOBL CommunicationsManager


The week is full of intensive learning, while also includes manynetworking and team-building opportunities. A fun approachto the final shareholder presentations wraps up the week.Enjoy the school in pictures.

“American Community Bank” teammembers Jessica Gribben, TeresaDeitering, Eric Bloomfield and JoelAlthauser were ready to meet the“American Dream” as they strived toprovide an ROE of 18 percent, a returnon assets of at least 1 percent, andprovide products and services theircustomers need and want as they grewthe size of the institution. In Joel’swords, he found the school to offer agood balance of theory and practice.

A panel of CEOs provided an opportu-nity for students to hear from thosecurrently leading community banks asJennifer Griffin, Commerce NationalBank; Tom Westfall, The ArlingtonBank; Paul Thompson, First FederalSavings and Loan Association; andColeman Clougherty, The FarmersCitizens Bank, offered their insightsand vision for the coming years.

Scott Sprouse, also known as AlexTrevek, led his bankers in a mockgame of Jeopardy to creatively sharetheir bank’s Stockholder Presentation.

George Padias (third from left) and BillCampbell (second from right) spendtime with a group during a BankExecutive Simulation Decision session.Teams made six decisions throughoutthe week.

REGISTRATION IS NOW OPENFOR THE …

2011 OBL BankManagement SchoolSept. 11 – 16, 2011

OBL Training Center,Columbus, Ohio

With overnight accommodationsat Courtyard by MarriottColumbus Easton

School Registration - $1,195Double Occupancy - $395Single Occupancy $795

The program will begin the afternoonof Sunday, Sept. 11 and will concludewith a graduation ceremony andbrunch on Friday, Sept. 16. Classeswill begin each day at 8 a.m. and willconclude by 8 p.m. Upon registration,a pre-work assignment will be given;with an additional project to be com-pleted prior to the School. To receive acopy of the brochure or for moredetails, please contact Susan Polingat 614-340-7611. Student names arealso being accepted for the currentclass roster.


The 2010 OBLBank Management School GraduatesJoel Althauser, The Home Savings and Loan Company of Kenton, OhioEric Bloomfield, American Savings Bank, FSBElizabeth Brunori, Federal Reserve Bank of ClevelandMaura Clougherty, The Farmers Citizens BankBrooke Crouse, Security National Bank – A Division of PNBJayne Davis, Farmers Bank and Savings CompanyFrank Davison, The Ohio Valley Bank CompanyTeresa Deitering, Ohio Division of Financial InstitutionsRob Delisio, The Farmers Citizens BankJustin Dinovo, Citizens Federal S&L Assoc. of BellefontaineAngela Gillis, The Fahey Banking CompanyLynn Greenstein, Nationwide BankJessica Gribben, Richland Bank – A Division of PNBRyan Hanawalt, The Mechanics Savings BankFelicia Hough, The Middlefield Banking CompanyJodie McCalla, The Ohio Valley Bank CompanyLori Michael, The First Bexley BankCindy Moore, Fairfield National Bank – A Division of PNBBrad Sander, The Genoa Banking CompanyAmy Searfoss, The First National Bank of PandoraRocco Serafini, The Bank of Magnolia CompanyScott Sprouse, The National Bank of Oak HarborCathy Swain, The Hocking Valley BankEdna Weber, Farmers Bank and Savings Company

Rick Hatcher (left), a 2008 BankManagement School graduate, andthe CEO of Citizens Federal S&LAssoc. of Bellefontaine, congratulatesJustin Dinovo, assistant secretary, whoreceived the Ora (Andy) AndersonGSB Scholarship Award for classroomexcellence and project work during theSchool. Dinovo noted that he likedeverything about the school. “Bill andGeorge were excellent teachers. Therelationship you build with your peersis great tool for the future.”

Jeff Quayle, OBL senior vice president& general counsel, led a regulatorypanel discussion to help studentsidentify the key issues in today’sregulatory environment, and under-stand the importance of the banker/regulator relationship and the role ofbank management in compliance.

First Champion Bank’s Edna Weberprepares to take on “The Economy” –boxer and fellow team memberAngela Gillis during the shareholderpresentation


JanuaryIn an op-ed

article publishedin The ColumbusDispatch, OBL President and CEO MikeVan Buskirk says Ohio banks are lendingand open for business. While “lendinglevels across the country have fallen,” VanBuskirk writes, “Ohio banks have buckedthat trend so far.”

The OBL andmember bankersmeet with U.S. Sen.Sherrod Brown andCongressman SteveDriehaus to discusskey bills pending in Congress.

The OBL announces a new trainingpartnership with national complianceoutfit Young & Associates, Inc. to bringenhanced compliance, lending andmanagement training to members. Therelationship begins with the kick off of the2010 Community Bankers for ComplianceProgram which attracts more than 110bankers and 50 banks to the trainingcenter throughout the year.

FebruaryCongressman Charlie Wilson asks the

OBL to prepare background informationand banker testimonyaddressing trends inOhio small businesslending for a jointhearing by the HouseFinancial ServicesCommittee and SmallBusiness Committee.

The OBL makes last ditch efforts tolimit potential damage caused by Rep.Dennis Murray’s (D-Sandusky) toxic titlebill at the Statehouse.

The OBL testifies against two bills inthe Ohio Senate Finance and FinancialInstitutions Committee that could be

harmful to the state’s economy and toOhio consumers. The OBL’s MikeAdelman tells legislators that a mandatorymediation bill and the broad-sweepingforeclosure bill, HB 3 would have manyunintended consequences.

Despite up to a foot of new snow andice covering much of the state, Ohio banksand thrifts and the OBL offices remainopen for business. John Malanowski, presi-dent & COO of First Federal Savings andLoan Assoc. of Lorain reports, “We havehad around six inches of snow in Lorainbut we are open for business and intend toremain open for the rest of the day to serveour customers.”

March

More than 40 execs head toWashington D.C. for the OBL D.C. Fly-in,meeting with Sen. Sherrod Brown, federalregulators and the Ohio delegation.

130 bankers attendregional directorsworkshops includingnearly 80 at the OBLTraining Center.

OBL membersHoward Boyle andRandy Herron testifyat the Statehouseagainst a bill thatwould permit Ohiocredit unions to hold public deposits.

OBL President and CEO Mike VanBuskirk and General Counsel JeffQuayle travel to Washington D.C. with 12Ohio bankers working to mitigate poten-tial harm caused by a new regulatoryreform bill.

OBL Loan Participation Service, thenew online loan participation marketplacefor Ohio banks, receives its first loan posting.

March kicks offthe OBL In-BankTraining season aslead trainer JulieKiplinger presents 9customized sessionsat four banks across Ohio.

AprilDecreased action on the most pressing

bills allow OBL staff to focus attention ona bill to update the state probate law thatproposed an expansion benefiting creditunions. The joint bill sponsors and probatejudges agree to remove a provision that theOBL rejected.

The OBL holds a town hall meetingwith U.S. House Minority Leader (andfuture Speaker) John Boehner to brief himon the real impact the regulatory reformbill will have on the U.S. economy.

MayThe OBL publishes its new

enhanced Ohio FinancialInstitutions Directory, themost comprehensive datasource for the Ohio bankingindustry and features up-to-date information on the rapidlychanging world of financialinstitutions in Ohio.

A record-breaking120 plus banking andindustry leaders attendthe 2010 CEOSymposium at theHilton Columbus atEaston.

2010YEAR IN REVIEWPARTICIPATIONLOANOBL

SERVICE

By James Thurston, Editor


Ohio Superintendent of FinancialInstitutions John Reardon resigns, citingfamily reasons.

The OBL Day at the Capitol attractsmore than 100 Ohio banking industryexecutives who hear from Presidentof the Ohio Senate Bill Harris and talkforeclosures, credit unions and IOLTAswith legislators.

JuneOBL district meetings attract more

than 130 Ohio banking leaders, whohear about the latest in health carereform updates.

Rep. Dennis Murray’s ‘toxic title’ bill isapproved by the Ohio House by an 87-11vote. Thanks to OBL amendments, datacollection and nuisance abatementrequirements are removed from the finalbill and Rep. Murray reiterates his pledgeto continue working with the OBL tofurther improve the bill.

After extensive behind the sceneslobbying from the OBL and others, thesword of Damocles hanging over the futureof the thrift charter is removed, when plansto axe it are stripped from the federalbanking bill.

JulyFormer OBL member Carolyn

Bradford is appointed new Ohio superin-tendent of financial institutions, replacingprevious chief John Reardon.

President Obama signs the Dodd-FrankAct into law, ushering in the most sweepingchanges to bank regulation in generations.The OBL immediately schedules a freeseries of tele-briefings on the bill to bringmembers up to speed on its provisions.

AugustThe OBL’s

annual RegulatorRoundtable attracts70 plus bankers.

OBL Employee Benefits Manager GarySutter reports that Liberty National Bank

of Ada becomesthe 75th mem-ber of the OhioBankers BenefitsTrust.

More than 80 banksparticipate in the annu-al Bank Compensation& Benefits Survey.Results are provided ona searchable CD-ROM and participantfeedback continues to praise this collectiveindustry initiative.

SeptemberTwenty-four students complete in-

depth course work and intensive BankSimulation program at the OBL BankManagement School.

More than300 bankingindustry execu-tives arrive inFrench Lick forthe OBL's 2010 Joint Convention. Bankershear from well-known speakers such as Dr.Ed Seifried, Steve Ford and Jim Carroll.

Little TurtleCountry Club isthe venue formore than 70golfers at the2011 OBL GolfClassic.


OctoberThe OBL’s new title agency partnership

with Mansfield-based Barrister LawyersTitle takes off as the first Ohio communitybanks reap the benefits of lender-ownedtitle agencies following a low-cost, high-margin model developed by Barrister.

A $230 million Ohio credit unionfailure in northern Ohio causes a $170million hit to the National Credit UnionShare Insurance Fund.

Top executivesfrom the OCC andthe OTS briefbankers on the futureof thrift regulators.

NovemberA sold-out

Financial ServicesExpo and keynotespeakers includingformer SouthwestAirlines exec JasonYoung are highlights of the 2010 OBL

Annual Meeting & ProfessionalDevelopment Event.

Republicans pick up over 60 U.S.House seats and more than six U.S. Senateseats in November elections, while JohnKasich wins the hotly contested governor’srace in Ohio.

An evening training series for frontlinepersonnel focuses on Bank Robbery inFindlay, Columbus and Blue Ash. TheTwilight Series began in August with ses-sions on BSA Training and will continue in2011 with a variety of customer servicerelated topics.

DecemberOBL continues to deliver timely

member news and information throughenhanced regu-lar electroniccommunicationsvehicles andexpanded Web-site utility.

Famers & Merchants Bank of Pomeroyis the latest community bank to sign upwith the OBL’s broker-dealer partnershipwith InfinexFinancial Group.

During the year, the OBL staff andbankers testify more than ten times at theStatehouse and on Capitol Hill on issuesranging from lawyers trust accounts andcredit unions to foreclosures and smallbusiness lending.

The 2011 OBL Education Programs byTopic is released via the OBL Web site toassist Ohio bankers with professionaldevelopment and training opportunities.

2010YEAR IN REVIEW

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We just lived through an historic election. Over 60 seats shifted from one party to theother, so there are now 242 Republican members of the House of Representatives; morethan anytime since 1947. In our own Ohio delegation, we are left with only five Democrats,fewer than anytime in my memory, and all shoe-horned into the northern tier of our state.We also have five freshmen with very diverse backgrounds who will be going to WashingtonD.C. for the first time. Similar results were seen across the country, as state legislatures andgovernorships also changed hands, turning out well known political legends and all within24 months of the dramatic 2008 election of the first African American President.

QuestionsThe most important questions for bankers are: What did we learn from these dramatic

results; and how will this change impact our business?First, we learned that the electorate is extraordinarily impatient. This recent election

represents the third change of control in the last 16 years. Prior to this period of more rapidchange there were only two brief interruptions to Democrat control of the House in the 64years between 1931 and 1995 (1947-48 and 1953-54). The electorate senses that our countryneeds good leadership and workable answers to vexing issues, and if the current team isn’tgiving it to them the voters will quickly start looking for someone new.

TechnologySecond, we have seen the incredible impact of new technology on elections. For example,

multiple news organizations have the luxury of focusing on a narrower band of issues thanever before, helping keep wide swaths of voters interested and engaged in the politicalprocess. (Heck, it doesn’t take a news organization anymore. One person with a digitalcamera and an internet link can change the course of political debate: Just ask ACORN.)Internet advertising can be incredibly focused, and fundraising has been democratized.Who needs a PAC when a good mailing list and a well targeted email can raise millions in$25 increments? The electorate is watching and the elected officials know it.

So, what do these changes mean for bankers? We have to work harder to make sure ourmessage is heard among so many voices, but you remain in a good position to influence theprocess positively—and many important issues will still be front and center in 2011.

You are in a good position because you are well respected in your own community, andlooked at as an opinion leader. Most, although not all elected officials understand theconnection between credit, capital formation and job growth. Countless times over the lastsession of Congress, our industry had important input when a congressman picked up thephone and called his trusted banker to ask: “How will this bill impact our district?”Fortunately, the new members of our delegation already have those strong relationshipswith both bankers and members of your trade association staff. It is up to us to build onthose good relationships and provide accurate reliable data to our elected officials as theyneed it. And here, technology can work for you as well: As most issues are coming up forvotes, you can access position papers or sample letters through the OBL Web site or ourgrassroots system.

The campaign for 2012 has already started. Earlier in December the first salvo was firedwhen during the lame duck session the House of Representatives voted to extend the“Bush tax cuts” but only on income less than $250,000. Even though there was no chancethe Senate would follow this lead, it does permit all supporters to go back home for the nextcampaign as a Representative that voted for tax cuts. The race is on!


Jeff QuayleOBL Senior VicePresident & GeneralCounsel

HISTORIC CHANGESFOR ELECTIONSAND ELECTIONEERING


Representative Steve StiversRep. Stivers, recently elected this past November, will

serve communities in Central Ohio, on the west side ofColumbus. Stivers previously served as a state senator fromJanuary 2003 until December 2008. Throughout his career inthe Ohio General Assembly, he was an advocate for programs

and initiatives that promoted economic development and encouraged job cre-ation. While at the Statehouse, he worked to help disabled Ohioans obtainmedical coverage, on the passage of a fiscally conservative state budget, onproviding the largest property tax cut in Ohio history and on freezing tuitioncosts for Ohio’s college students.Stivers is also a lieutenant colonel in the National Guard and served

overseas for nearly a year as a battalion commander in a combat zone duringOperation Iraqi Freedom in Kuwait, Iraq, Qatar and Djibouti.

Ohio Record: Was there anything different that distinguished this campaign,compared to your prior campaigns?

Rep. Stivers: In this campaign we had even more support than ever. I am grateful forthe active support of over 2,000 volunteers and the strong level of grassroots support fromevery part of the district.

Ohio Record: I know you have been to Washington D.C. to begin preparations forthe new Congress. What are your first impressions and how does it compare toyour years of service in the Ohio General Assembly?

Stivers: In the aftermath of the 2010 election, it is clear that the American peopleexpect us to work for a smaller and more efficient government and to hold us to ourprinciples and values in the process. After talking to Congressional leaders on both sidesof the aisle during my most recent trip to Washington D.C., I remain hopeful that we willmake progress in seeking some common ground on the many challenges facing our nationduring these difficult economic times. I also am hopeful that my experiences in serving at thestate level will be helpful in contributing to the debate and moving effective policies forward.

Ohio Record: What will your top priorities be after you are sworn in?Stivers: Like my service in the Ohio General Assembly, I will remain an advocate

for policies which encourage job creation, promote economic development and makegovernment smaller and more accountable.

Ohio Record: What are the main challenges facing your constituents?Stivers: As I continue my visits across Ohio's 15th Congressional District, I

understand the economic challenges facing so many of our families and small businesses,including the need to create more quality jobs and the frustration of those who want anend to big government. I am committed to working to address these concerns through mycommittee assignments and overall representation of the people of Ohio’s 15thCongressional District.

WINDOW ONTHE CAPITOL

In this regular feature,Ohio Record introducesour elected state and

federal legislators. In thisedition, the spotlight ison newly elected OhioCongressman SteveStivers (R-15) andState RepresentativeJohn Carney (D-22).


Ohio Record: It's no secret that thereare provisions in the recently adoptedDodd-Frank Bill that dramaticallyincrease the cost of delivering financialservices. Will the next session ofCongress tackle any of these prob-lems? Is it realistic to hope that thediverse parties can come togetherto make the Dodd-Frank Act moreworkable for both Ohio banks andOhio consumers?

Stivers: One of the most importantjobs for the 112th Congress is to ensurethat small businesses have access to thecredit they need so they can create jobs.Community banks will continue to serve asleaders in lending to the job creators in

Ohio, and my job in Congress is to reviewand scrutinize any regulation that maydiscourage responsible lending.

I believe it is imperative to reviewexisting laws to ensure they are necessary,effective and efficient. This belief extendsto the newly-enacted Dodd Frank Act,which contains dozens of unresolved issuesand regulations which could potentiallyhamper our economic recovery. Amongthose that will require the most intensescrutiny in the coming months will bethe rulemaking and other regulatoryactions coming from the Dodd Frank Act,including the new Consumer FinancialProtection Bureau.

Ohio Record: What are you mostlooking forward to once you roll upyour sleeves and begin to tackle theworkload of the 112th Congress?

Stivers: I am humbled by this opportu-nity to serve the constituents and workon behalf of the people of central Ohio.We face many challenges as a state andcountry. That is why I am looking forwardto taking the initiative to create policiesthat will promote job creation and smallergovernment, and that will also have a realimpact on the lives of Ohio families.

Representative John CarneyState Rep. John Carney (D-22) serves the communities

of Dublin, Clintonville, and northwest Columbus and is inhis second term in the Ohio House of Representatives.Rep. Carney is the eleventh of 12 children, and his

family helped shape his beliefs in the importance ofeducation, health care and economic opportunity. He earned both hisbachelor’s and law degree from The Ohio State University. While oncampus, Carney was twice elected student government president. Hislegacy includes an agreement with the Central Ohio Transit Authority tostart a citywide busing program for all OSU students.He now works as an attorney in the Columbus office of Porter, Wright,

Morris and Arthur LLP, where he counsels clients on health care issues.Away from the office, Rep. Carney organized the Computer OutreachProgram at the Columbus City Schools. This free, year-round basic computerliteracy course is open to all community members and has been offered atover a dozen Columbus schools.

Ohio Record: Tell us a little bit aboutyour background and how you becameinvolved in politics?

Rep. Carney: I am the eleventh oftwelve children and am married to my wifeJenny. We are blessed with two lovelyyoung daughters. I paid my own waythrough Ohio State University where I wastwice elected President of the undergradu-ate student body and then went on to lawschool at Ohio State. Since I graduatedfrom law school in 2001, I have been ahealthcare attorney at the law firm ofPorter Wright where I counsel individualphysicians and physician group practiceswith respect to their business issues.

I ran for office because I believe thatour elected leaders need to be focusedon creating jobs, providing excellent edu-cational opportunities, and improvingaccess to high quality health care. Whilesolutions to these problems will require thecombined efforts of many stakeholders,I felt that my business and healthcare expe-rience provided me with unique expertiseto craft creative and practical solutions toget Ohio started in the right direction.

Ohio Record: What accomplishmentsare you most proud of this session andwhat are your legislative priorities yetthis year?

Carney: I am proud to say that, as afirst-term legislator, each of the bills I intro-duced received strong bipartisan support.

A couple of key accomplishments includethe Healthy Choices for Healthy ChildrenAct, which improves all the nutritionalstandards and beverage standards in k-12schools while encouraging additional exer-cise, and HB 67, a bill that reduced theminimum age for donating blood, whichpassed both the Ohio House and Senatewith unanimous votes and is responsiblefor enabling the Red Cross to collect morethan 15,000 additional pints of blood thispast year.

Ohio Record: What are the prioritiesfor the next legislative session?

Carney: Clearly, the top priority forthe next session will be creating jobs andsolving the state's budget crisis. The statefaces serious fiscal challenges, and we must

face these challenges responsibly, in a waythat serves the long-term interests ofOhio's citizens. I look forward to workingacross the aisle to address these challengesso that we put Ohio on the track to longterm economic prosperity.

Ohio Record: Why should a bankercare about public policy?

Carney: A vibrant, active bankingsector in Ohio will be crucial as we bringourselves out of the recession. Bankersunderstand better than anyone the chal-lenges that Ohio’s families and businessesare facing. In the next legislative session,Bankers can play a crucial role in helpinglegislators understand those challenges,and in crafting solutions that will helpimprove Ohio’s economy. In particular, it

will be important for bankers to educatelegislators with respect to what can bedone to make capital more available tobusinesses so that investments can bemade to grow businesses in Ohio. Toooften elected officials focus on blaming aparticular industry for the current prob-lems we face, instead of focusing on howwe can collaborate and provide mutuallybeneficial solutions to the issues that con-front us. I encourage the bankers in Ohioto take a day out of their busy schedulesand visit with their State Representativeand Senator to provide concrete ideas ofhow we can work collectively to plan abetter for future for Ohio.


A Long History of Commitment to the Midwest

To see how we can help your bank, please call:

(314) 342-2038

(212) 847-6458

(314) 342-4054

UNITED COMMUNITYF I N A N C I A L C O R P.

Stifel, Nicolaus & Company, Incorporated and �omas Weisel Partners LLC are affiliated broker-dealer subsidiaries of Stifel Financial Corp. which are collectively referred to herein under the marketing name Stifel Nicolaus Weisel.All transaction announcements appear as a matter of record only.


2011 Lending Curriculum BeginsLed by nationally-known presenters Jeff Judy and JohnBarrickman, 10 core courses throughout 2011 will teachboth new and experienced lenders basic and advancedlending techniques. Beginning with programs onAnalyzing Personal Financial Statements & Tax Returns(Jan. 24) and Financial Accounting for Bankers (Jan. 25),the courses will each be offered and priced as a one-dayseminar. Future seminars include:

- Analyzing Financial Statements - April 6; and Enhanced RatioAnalysis - April 7

- Cash Flow Analysis - June 2; and Asset Quality Ratings - June 3- Qualitative Analysis - Sept. 20; and Loan Structure - Sept. 21- Problem Loans - Oct. 26; and Best Practices in PortfolioManagement - Oct. 27

Jeff Judy encourages all to attend, as he said, “These pro-grams will help bankers at both ends of the spectrum, aswe teach young people how to do things right; and pro-vide more experienced bankers an opportunity to focuson areas where there is less confidence and familiarity.”

JAN. 24 - 25OBL TRAINING CENTER

Stress Testing for Community BanksFederal bank regulators have announced mandatory stresstesting for the largest 17 banks and have suggested theycould also encourage it in smaller banks. This seminar willgive community banks a useful tool for their own planningand to offer a head start with the regulators. MeetingChallenges of the Economic & Regulatory Environment will beled by Graduate School of Banking at Colorado PresidentTim Koch.

JAN. 27OBL TRAINING CENTER

2011 Economic SummitHeld at a new location, the 2011 Economic Summit willonce again provide Ohio bankers with an opportunityto reach out to those at the heart of their communitiesand to introduce these successful small business ownersto members of the Ohio General Assembly. Bankers inter-ested in a complete picture of what next year might havein store for the Ohio economy should attend the eventwhere they will get an inside track from Mark Schweitzer,senior vice president and director of research, FederalReserve Bank of Cleveland. Check the OBL Web site forregistration details.

FEB. 15THE RENAISSANCE HOTEL

Segmenting theSmall BusinessMarketGain an understandingof why it is important tosegment the small businessmarket and how to do itusing a “Life Stages ofBusiness Approach” inconjunction with other keyfactors during this one-dayseminar led by LanceKessler. Designed to benefitlenders, marketers andthose responsible for smallbusiness and relationshipmanagement, the programwill help attendees identifyopportunities across alllines of business for deep-ening and broadeningrelationships with existingand new customers.

FEB. 10OBL TRAINING CENTER

RETURNING


Please see the OBL Web site for a complete listing of currentlyscheduled classroom seminars and workshops, schools andconferences, and special meetings and events.

Annual OBL Spring ConferencesGet the most up-to-date, topical information at OBL annualconferences. The spring conference season will kick off Feb.24 & 25 with the Human Resources Conference. Featuringa morning session on Employment Law & Updates with PattyWise of Neihaus & Associates, Ltd, the agenda also includessessions on Becoming a Strategic Partner at Your Bank;Developing a Culture of Character; Talent Managementand more. Additional conferences will be held as follows:Bank Marketing Conference, March 3 & 4; BSA/AMLConference (with Young & Associates, Inc.), March 29 &30; and the return of the OBL Technology Conference,which includes a one-day workshop with nationally-knownpresenter and expert Jack Vonder Heide, April 14 & 15.Register online or watch for forms in the mail.

FEB. 24 & 25OBL TRAINING CENTER

Certification Series Return forProfessional Head Tellers/SupervisorsFeb. 23, April 13 & May 25AND

NEW! Bank Sales ManagerCertification SeriesMarch 23, May 17, Aug. 30 & Oct. 4These popular series, led by nationally-known presentersRoger Morin and Phillip Borzilleri, provide top-notch train-ing for frontline staff and bank and branch sales man-agers. Head Teller content focuses on key principles ofquality supervision, quality service, and efficient bankoperations; while the Sales Manager series provides theskills, attitudes, and practical methods for greater salessuccess. Participants may attend individual sessions orregister for a series.

2011OBL TRAINING CENTER

IRA Essentials & IRA Advanced Issues“Do you know how the Small Business Jobs Act of 2010changed the IRS reporting penalties for banks? Do youknow the new Roth IRA conversion rules for 2011? Doyou know what you need to do about the amended IRSIRA documents? Get the answers you need as youexplore the opportunities and challenges these changeswill bring during these two one-day programs that may beattended individually or as a pair.

MARCH 9 & 10OBL TRAINING CENTER

2011 Community Bankers forCompliance ProgramThe first quarter seminars in March will begin the 2011Community Bankers for Compliance membership, thoughadditional benefits begin in January. Members receivefour inter-related compliance services for one annual feeof $1,200, including: Quarterly seminars covering thelatest regulatory compliance and industry developments;subscription to the monthly Compliance Update newsletter;access to the toll-free Compliance Hotline for questionsthat arise on a daily basis; and access to the CBCmembers only Web page, which includes timely informa-tion and compliance tools. Register online or request abrochure today.

MARCH 15 & 16OBL TRAINING CENTER

WIN

TER

The residents of Tara, the fictional homestead in the romanticized Georgia of MargaretMitchell’s Gone with the Wind wake up to a whole new world in the Civil War’s aftermath.Past customs are swept away, and they are forced to face an uncertain future. The old waysare...gone with the wind.

The 21st century banking and financial services industries are waking up to a similarreality. Trillions of dollars in lost savings, record-high home foreclosures, a massive lossof consumer and small business credit availability and an unprecedented number ofbankruptcies have contributed to the deepest decline in economic performance andconsumer confidence since the Great Depression. This has been exacerbated by pressreports of outrageous executive bonus payouts and other perceived bank excesses.

The dim economic outlook, along with tightened industry regulation and a growingarray of communication and delivery channels to market constitute the new normal -- leavingbanks a jumbled mess from which to rebuild.

New tools and new market understanding are necessary for banks to go forwardefficiently, certain that revenue and profit growth will follow.

Banks are tempted to utilize old methods to return to revenue and account growth, butthey have lost the old underlying consumer trust given the role of banking in the economiccollapse and perceived diminished customer service. Nontraditional competitors, nowmore numerous due to deregulation and loopholes in local laws, are similarly weakened butdo provide consumers with more choices. Simultaneously, some of the old competitors havebeen largely swept aside. Adding to the mix is the steady growth of new media, which giveconsumers endless sources of information on banks, including the experiences of currentand former customers.

The problem for banks and financial service providers is that few are equipped tosucceed in this new marketplace now that dimensions have changed.

Market research, paradigms and rules-of-thumb from more than a year ago are markson a roadmap to a marketplace destination that no longer exists. A new map is requiredto navigate new territory safely. However, bankers have a lot on their plates. Increasedregulation will bring increased work just to maintain business as usual. There’s no time tosearch randomly for answers.


Leopoldo C. ToralballaManaging DirectorDorsey & CompanyStrategic Consultants

The nature of the bank-customer relationship has permanentlychanged. In a new environment of increased regulation andgovernment scrutiny, bankers’ energies are pulled in manydirections at once. This article demonstrates how to direct researchactivity to drive fast and reliable growth within tight resourceconstraints, with special advice for community banks.

The forever-changedbanking landscapeand how to navigate it

Gone with the Wind

The first question for any bank must bewhat it wants to stand for in this new andchanged world. This is called definingone’s image, and large banks pay millionsof dollars to do it. At first blush, it wouldseem that a community bank would lackthe resources to play in this rarefied arena.We hold exactly the opposite. Here are twokey reasons why.1. Community banks, by their nature,have not been affected by the finan-cial crisis to the same extent as the bigbanks.

2. Their images can be tracked andmanipulated more easily - andinexpensively – than those of largebanks. Local and direct tactics willwork where big banks need networktelevision.

Wise bank marketers will prepare nowby carefully mapping the return to sustain-able market growth. The first step willalways be to determine where you are:what you stand for and mean to yourcustomers and your community. Hereagain, the community bank has an advan-tage. Its customers and environment areconcentrated, and access to them is easyand (relatively) inexpensive. A quick, butthorough and brutally honest, analysis ofyour current collateral and marketingmaterials plus some research with cus-tomers will yield answers which are quiterevealing.

After that, determine what you standfor. This is something you can do with yourteam. Here are a few ways to do this.

An assessment of your targets orcustomers and the environments in

which they operate is needed. In otherwords, meet your customers in their ownneighborhoods. Where are they nowversus five years ago? What do they value?What do their attitudes and behaviors tellyou about them?

Next step is to go back to your currentmessage. How does what you’re sayingdiffer from what you want to be? Again,this is something you can initiate with yourteam although some simple marketresearch can help fill in the blind spots weall have.

The last part is a bit more technical.You’ll need to take a look at all the waysyour message reaches people, your cus-tomers and others in the community.You’ll ask questions like:•How do people hear about you?•What do they learn and when? Fromwhat sources?•How do your neighbors become yourcustomers?

This is called Channel Mappingand, despite the fancy title, it needn’t beexpensive.

These steps are the beginnings of asound marketing plan. And though it maysound like a tool for big banks, it needn’tbe. On the contrary, market research can:•Illuminate the new attitudinal envi-ronment within which you MUSToperate;•Reveal the most attractive and avail-able target market segments;•Build a dynamic picture of the newand old channels used by each seg-ment and point out how to utilize

them without increased spending; and•Apply behavioral understandingand channel-screening methods toefficiently capture the desired marketsegments by intersecting existingcustomer behavior.

Marketing budgets notwithstanding,community banks do have the tools athand to identify targets and find theproper channels to reach them. Thistoolbox can be easily (and inexpensively)revealed by a short examination conductedwith the aid of external marketing counsel.

Armed with a new road map, commu-nity and national banks today are indeedprepared to navigate a permanentlychanged marketplace.Toralballa has had a 40 year long career as amarketing strategy leader and general manager forsome of the most respected and imitated companiesin the world, including American Express, TIME-LIFE Books, Key Bank, Fortis Insurance andPublishers Clearing House. Contact Leopoldo at(216) 812-8408.



The Tradition Continues ...The Tradition Continues ... Mark your calendar and plan to join us in Baltimore next fall. Mark your calendar and plan to join us in Baltimore next fall.

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M. Patton Perrin, CPAGlobal Finance ManagerGlobal Markets DivisionOhio Department ofDevelopment

OPENING THE SPIGOT:Realizing New RevenueStreams through Export Finance

“Tonight, we set a new goal: We will double our exports overthe next five years, an increase that will support two millionjobs in America To help meet this goal, we're launching aNational Export Initiative that will help farmers and smallbusinesses increase their exports.”

President Barack ObamaState of the Union AddressJanuary 27, 2010

Thus began one of our President’s most ambitious policy initiatives, one that broughtspotlight attention on one of the greatest opportunities of our time: the opportunity to growbusinesses by exporting American-made products to billions of consumers living outsidethe United States.

What are the relevant statistics regarding exporting?•95 percent of the world’s customers are outside the United States.•97 percent of all exporters are small- and medium-sized enterprises with less than500 employees.•58 percent of small- and medium-sized enterprises export to one country only,meaning that many markets are virtually untapped.

It is clear that exporting is a growth industry in the United States: Companies currentlyexporting to one country are gearing up to increase their exports by selling in at least oneadditional country (often referred to as picking the low-hanging fruit); and companies thatare not exporting are considering it to grow their businesses, especially with the U.S.marketplace in the midst of difficult economic times.

Many of these firms will be looking for working capital and other financial resources tomake this expansion possible. Traditionally, the Small Business Administration (SBA) hasbeen very supportive thanks to its SBA Export Express line of credit and Export WorkingCapital Program, which are available through many banks.

The economic reality is that at many banks, balance sheets have been battered by expo-sure to the 2009 and 2010 housing crisis. Therefore, many banks are curtailing new loans,especially for exports. In addition, new reserve requirements placed on banks are negativelyimpacting the availability of funds that might otherwise be used to finance exports.

One solution, according to the SBA, is to increase the universe of banks offering exportassistance through the Small Business Administration. “Many community banks had farless exposure than the large banks in the real estate crisis and are in a real position to lendto exporters,” says Mr. Patrick E. Tunison, Chief International Lending Officer of the SBAin Washington, D.C. “But they are not SBA-approved lenders. Others are SBA-approvedlenders but have yet to explore making export-related loans.”

Why wait? New business is available! Consider the following two success stories:


Rad-Con Inc., a small engineering firm located in Lakewood, Ohio, was able to make amulti-million dollar international sale with the support of the U.S. Small BusinessAdministration’s (SBA) Export Working Capital Program.

Rad-Con Inc. has 29 employees and specializes in the design of industrial furnaces forsale to the steel industry. The company has a rich tradition and is a world-renown industryleader. Rad-Con pursued international business opportunities in order to grow its businessby working closely with the trade specialists at the Cleveland U.S. Export Assistance Center.

Rad-Con was successful and won a multi-million export order that necessitatedincreased working capital. PNC Bank was able to finance its export working capital needsby utilizing the SBA’s Export Working Capital Program.

Aquatic BioControl is a privately held corporation, located in Westlake, Ohio, whichis owned and directed by Richelle Bell and John Wong. The 10-person company develops,manufactures, and markets live bacterial products for purifying water in lakes, ponds,aquariums, and commercial fish farming. From its inception in 1996 through 2007, AquaticBioControl focused primarily on retail products and sold through pet stores, gardencenters, and hardware stores in the United States.

With significant technological advances, the product line expanded in late 2007, anda new target market, intensive fish farming, was identified. In intensive fish farming,relatively small, man-made ponds are used to grow fish to the highest possible populationdensity. Fish release ammonia as they grow, and since ammonia is toxic to fish, the densityof fish that can be successfully grown and harvested is limited.

Aquatic BioControl’s StartSmart is a completely safe, natural, non-toxic bacterial prod-uct with a unique ability to remove ammonia in fish-farm ponds through natural biologicalactivity that converts ammonia into non-toxic by-products. John Wong states thatStartSmart is a game-changer for intensive aquaculture, as it eliminates the toxic ammo-nia as fast as it is produced. This allows the fish to grow to a considerably higher densitythan without the use of StartSmart. In studies performed to-date in New Zealand andChina, the increased crop value was three times the cost of StartSmart, making it extremelyprofitable for the fish farmers that use the product.

Aquatic BioControl began to work with the Ohio Department of Development’s GlobalMarkets Division in June 2010. Department personnel, including Sean Corson and myself,made Richelle Bell and John Wong aware of export assistance provided by the Departmentto Ohio companies. The Ohio Department of Development conducted two market studiesfor Aquatic BioControl, identifying potential distributors for retail products in GreatBritain and for intensive fish farming in Guangdong Province, China.

To assist with the costs required to support these export sales, the Ohio Department ofDevelopment also worked with Aquatic BioControl to secure a line of credit through theSBA Export Express program at Lorain National Bank. Without Export Express, AquaticBioControl would have been unable to properly support the essential activities such asliterature translation, overseas travel, increased manufacturing capacity, and staffingrequirements demanded by export programs.

Aquatic BioControl is moving ahead full-steam with exports to the United Kingdomand China, and it’s projected sales will double over the next 18 months and growexponentially. This would not be possible without the Export Express resource.

Growth OpportunityDo not miss out on this growth opportunity! Small business exports will continue

to increase. Banks, both large and small, will be able to realize new revenue streams byjoining the SBA and prudently meeting the export finance needs of these home-grownsmall businesses through the guaranty offered by one of SBA’s export loan programs.The SBA conducts a quarterly Lender Webinar and is also available to provide in-house lender training on itsexport loan programs. Ohio banks that would like to learn more should contact SBA’s Regional ExportFinance Manager Patrick Hayes at (216) 522-4731 or [email protected].

According to the 2010 ICBA Community Bank Technology Survey,regulatory compliance, safeguarding customer data, controlling technologycosts, and mobile banking deployment.

Every two years, the Independent Community Bankers of America (ICBA) partnerswith Plante & Moran to conduct its biennial Community Bank Technology Survey. Thegoals are simple: (1) provide a benchmarking tool for tracking community bank technologytrends and strategies over time, (2) develop a peer comparison tool to assist communitybanks in measuring current technological commitment and in reaffirming strategic direc-tion, and (3) enhance ICBA advocacy staff’s knowledge of community bank technologicalcapabilities and goals.

This year, the survey was sent to 7,583 community banks and received a total of 895community bank responses or 12 percent. Although regulatory compliance ranked numberone among technology concerns, safeguarding customer data, controlling technology costsand deploying mobile banking were close behind. Here’s a deeper look at the findings.

Regulatory compliance is the chieftechnology concern for community banks

Eighty-two percent of community banks regard regulatory compliance as a leadingtechnology concern. Regulatory compliance is a greater concern among banks with assetsless than $250 million (85 percent) than those with assets greater than $250 million (76percent). Additionally, 60 percent of respondents plan to increase compliance spendingover the next two years and another 39 percent plan to neither increase nor decreasecompliance-related spending, with little difference among the asset-size groups.

Safeguarding customer data remainsa major objective for community banks

Protecting customer information remains a key long-term objective for communitybanks. Sixty-three percent regard identity theft as a top-5 data security concern, with manycommunity banks expecting to increase security spending (50 percent) and risk manage-ment (49 percent) expenditures. The top data security concerns are consumer identitytheft at 72 percent, followed by virus attacks at 57 percent, phishing/pharming schemes at53 percent, business identity theft at 46 percent, hacker attacks at 45 percent, andbusiness-account password compromise at 40 percent. Forty-eight percent of actualrespondents reported a monetary loss due to a data security breach, with consumer ID theft(30 percent),third-party data compromise (16 percent), and business ID theft (8 percent)being the most likely breaches.

Controlling technology costs isa long-term challenge for community banks

Bankers continue to grapple with technology expense containment, with 76 percentlabeling it one of their long-term technology decisions in the next two years (a 16 percentagepoint increase from 2008!). Thirty-three percent of the respondents noted their overalltechnology is less than desired, compared to just 24 percent two years earlier. Community


What Technology TrendsWill Be Top of Mind forBanks in 2011...

Raj PatelPlante & Moran

banks are increasing their investment incompliance (60 percent), security (50 per-cent), network infrastructure (49 percent),risk management (49 percent), and mobilebanking (47 percent).

Conversely the main areas wherecommunity banks are cutting their budgetsare outside consultants (12 percent), coreprocessing (9 percent), and communica-tions expenditures (8 percent).

Community banks areramping up for mobilebanking deployment

While only 15 percent of communitybanks offer mobile banking today, 47percent plan to do so in the next 24months. Of those that currently offer theservice, 82 percent offer mobile Web,

42 percent offer SMS/test messaging,and 13 percent offer a downloadable appli-cation. The top functions offered throughmobile banking are: account transfers (87percent), bill payment (53 percent), andbranch/ATM locator (48 percent).

Consumer adoption initiativesprovide the next frontier foronline banking growth

Ninety-four percent of communitybank respondents offer online banking (up5 percentage points from 2008). However,only 6 percent of respondents have morethan half of their customers enrolled in theservice. Community banks are having suc-cess in their efforts to encourage consumeradoption, with 56 percent of respondentsnoting that more than 20 percent ofcustomers enrolled—an increase of 16percentage points from 2008.

The core processing platformis the virtual cornerstoneof a community bank

Eighty percent of community bankshave been on their core processing platformfor more than five years. However, corevendors shouldn’t rest on their laurels,with 26 percent of respondents reportingthat evaluating their core processing rela-tionship was one of their top technologydecisions over the next 24 months. Only 8percent of respondents reported changing

their platform within the past 2 years.Banks with more than $500 million inassets are less likely to leave their core pro-cessing platform, with 91 percent stayingon their core platform for more than 5years, compared to 73 percent of bankswith less than $100 million in assets. Whilethe percentage of banks that use in-houseand outsourced core processing systems isequally split (50 percent), larger communitybanks (with assets greater than $500million) are more likely (60 percent) to usein-house processing.

You may view the survey results in theirentirety at 2010techsurvey.plantemoran.com.If you have any questions regarding theresults feel free to contact me.Raj coordinates Plante & Moran’s TechnologyConsulting & Solutions Group. He has 18 years ofinformation technology and financial audit experi-ence and he closely follows emerging technologies.Raj’s experience includes IT risk assessments, net-work security projects, business continuity planning,IT audit, GLBA compliance, SOX assistance, andweb application security. He is a certified informa-tion systems auditor and a certified informationsystems manager. Raj can be reached at(248) 223-3428 or [email protected]



Helping You Navigatethe Compliance Frontier

Few disciplines in banking are more challenging than the

ever-changing landscape of regulatory compliance. The OhioBankers League can help you navigate the often complicated

compliance frontier through OBL Compliance Services.

Utilizing the experience of a highly-regarded 25-year industry

veteran, the OBL now offers a wide variety of direct compliance

consulting services covering a broad spectrum of federal

consumer protection laws and regulations.

To learn more about OBL Compliance Servicescontact the Ohio Bankers League at 800-686-6755.

OBLA SERVICE OF THE OHIO BANKERS LEAGUE

Compliance Services


ANDOVERThe Andover Bank

recently announced thehiring of Joseph Varhol asbranch manager of thebank’s new MadisonBanking Center.

CINCINNATICheviot Savings Bank announced that it

will fund the nationally acclaimed SeniorCrimestoppers Program at HillebrandNursing Home and Mercy FranciscanTerrace Nursing Home, both located onthe west side of Cincinnati. The SeniorCrimestoppers Program works much like aneighborhood watch where senior facilitieswith a strong commitment to crime pre-vention implement increased awarenessand a zero tolerance policy.

(l to r) Rachel Wirth, administrator, MercyFranciscan Terrace; SHCPF VP GeorgeClinard; Tom Linneman, president & CEO,Cheviot Savings Bank; Annie Iverson,marketing director, Cheviot Savings Bank

COLUMBUSHuntington National Bank announced

the following promotions/appointments:Jeff Dennes, a nationally recognized

leader in the online, mobile, and paymentsindustry, to senior vice president, directorof Online and Mobile Services.

KENTHome Savings Bank

recently announced thepromotion of ColinBoyle to assistant vicepresident. Boyle is a lifelong Kent resident andgraduate of the StillmanSchool of Business atSeton Hall University.

UPPER ARLINGTONThe Arlington Bank announced the

third and fourth quarter recipients of theiremployee of the quarter recognitionprogram, the “Extra Mile Award.” Thethird quarter recipient was Betsy Cooper,branch manager of the Grandview branch.Cooper was chosen as the recipientbecause she is truly committed to provid-ing outstanding customer service to thebank’s customers. The recipient of thefourth quarter award was Karma Wion.

MADISON, WIThe Graduate School of Banking at

the University of Wisconsin-Madison is tointroduce a special Bank TechnologyManagement School, held April 3-8, atthe Fluno Center for Executive Education,Madison.

MANSFIELDOBL business partner Barrister Title

Group has hired Vicki Webb as new direc-tor of joint venture development. To findout more about how your institutionscould start its own profitable joint titleagency, call Webb at (614) 206-3777.

MILLERSBURGCSB Bancorp, Inc., recently announced

the appointment of W. Robert Manning,Jr. to the senior management team ofCSB. Manning was appointed senior vicepresident, chief operations and chief infor-mation officer of CSB and its wholly-owned subsidiary, The Commercial &Savings Bank.

PITTSBURGH, PAOBL affiliate member

PWCampbell announcedthe hiring of Dan Goss,regional vice president, asthe newest addition tothe PWCampbell team.

WASHINGTOND.C.

The Federal Deposit InsuranceCorporation announced the appointmentof Mark Pearce as director of the newly-established Division of Depositor andConsumer Protection.

WOOSTERWestfield Bank celebrated the grand

re-opening of its expanded Woosteroffice with a ribbon cutting ceremony,co-hosted by the Wooster Area Chamberof Commerce.

WORTHINGTONGreat Lakes Bankers Bank announced

that Peter Kubacki has joined the board ofthe bank. Kubacki will also serve on theboards of Bankers Bancshares, Inc. andF & M Credit Services, Inc. He will fillthe term of Ed McKeon, who recently leftthe board.

Joseph Varhol

Colin Boyle

Dan Goss

Karma WionBetsy Cooper

The Barrister Title Group team of SaunieTomecko, Vicki Webb and Bud Vetter


Hope House Visitation Center, an Ohio nonprofit agency,was recently presented with a check for $4,000 from theHome Savings Charitable Foundation.

According to Carole Bopp, executivedirector, the Hope House VisitationCenter, located in Youngstown providesa child-friendly environment for super-vised visitation, custodial/non-custodialexchanges, education and mediationpurposes relevant to the development ofhealthy parent-child relationships. “Weprovide a neutral setting that increasesthe family’s level of comfort and/or secu-rity and provides non-custodial parentscontact with their children,” she said.Visitation is supervised in a nonthreaten-ing environment and our extended hoursallow for visits without interrupting workor school schedules.”

Bopp added that the homelikeenvironment of Hope House also allowsparents to spend quality time with their children, findnecessary comfort and support and build healthy relationshipswhile improving family and parenting skills. “We also offer a

monitored children’s drop-off and pickup site for exchangesbetween parties, as well as parenting classes, teen supportgroups and children of divorcing parents classes,” she said.

“We are so very grateful to theHome Savings Charitable Foundation forthis generous contribution, which willhelp us continue with our missionand programs.”

Since 1998, the Home SavingsCharitable Foundation has providednearly $10 million of support to allcommunities served by Home Savings,an OBL member, with offices throughoutnorthern Ohio and western Pennsylvania.“The consequences of domestic violencecan be devastating to everyone in afamily, so we are very pleased to supportHope House in its endeavor to buildhealthy parent-child relationships,” saidDarlene Pavlock, executive director,Home Savings Charitable Foundation.

For more information on the Hope House VisitationCenter, please visit www.hopehousevisitation.org.

Focus On…Home Savings, Youngstown

MEMBERSHIPhas its Benefits

With new free online compliance training and

access to the best in consumer compliance

consulting, OBL membership has its benefits.

To learn more contact James Thurston at (614) 340-7621.

Amy Williams, board president, HopeHouse Visitation Center; Carole Bopp,executive director, Hope HouseVisitation Center; and Michael Gahagan,AVP, Consumer Asset & Risk Analyst,Home Savings, and board president-elect, Hope House Visitation Center

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Ohio Bankers League Winter 2010 Magazine

Documents

Transcript of Ohio Bankers League Winter 2010 Magazine