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PremierBank’s Bilingual Initiatives Committee helps bank serve Hispanic community

By Kathleen Rolfs

Between 2000 and 2015, the Hispanic population in Wisconsin doubled in size with an increase of 95%, according to a demographic summary conducted by the Wisconsin Department of Health Services. This was the most rapid population increase of any of Wisconsin’s various racial groups (White, Black/African American, American Indian, and Hispanic).

During this span of time, Wisconsin’s overall population increased by roughly 400,000 residents, with Hispanics making up 46% of this increase. With Hispanics being the fastest growing minority population in Wisconsin, it is important that community banks thoughtfully consider how they are best meeting the financial needs of this influential consumer base.

Although individual desires and product requirements are as diverse for the Hispanic community as any other demographic, one way that PremierBank is successfully serving our Hispanic friends and neighbors is through our unique Bilingual Initiatives Committee. This group is comprised of several bilingual bankers along with marketing and retail banking officers. The goals of the committee include identifying opportunities that exist within our communities for strategic community partnerships, and collaborative education within our organization to ensure all our bankers are equipped to understand and anticipate the needs of the rapidly growing, ethnically diverse Hispanic community.

Bilingual Bankers Share Their Heritage

At a minimum, having bankers on staff who speak the same native language of those who live and work in our communities is one of the most obvious ways that we can reduce or eliminate language barriers with our Hispanic customers and successfully deliver the most appropriate financial solutions to them.

Guided by our Bilingual Initiatives Committee, our bilingual bankers help provide education within our organization about the Hispanic community. Peer-to-peer learning is a powerful tool that helps break through biases and promulgates understanding. As such, we have found that giving our bilingual bankers many opportunities throughout the year to share their heritage with their colleagues encourages a much deeper understanding of our local Hispanic population, while simultaneously building community within our own organization.

During last year’s Hispanic Heritage month, PremierBank treated all employees to traditional pan dulce or “sweet bread” served fresh from a local Mexican baker. These were personally delivered by members who serve on the Bilingual Initiative Committee, some of whom were dressed in traditional Mexican apparel, with an explanation of the history of these tasty treats! Inexpensive activities encourage understanding and respect among a diverse workforce, while providing education about this important segment of banking prospects and customers.

Bilingual Banking Community Outreach

Whether through financial contributions, sponsoring a resource fair that targets the Hispanic community, or creating our own event that caters to the Hispanic community, PremierBank’s Bilingual Initiative Committee is intentional in the quest to find new events to support within our footprint area.

In September 2022, a “Hispanic Heritage Celebration” is being planned at one of our banking locations complete with food trucks, traditional Central and South American dancers, and a lively mariachi band. After working with the local convention and visitor’s bureau and receiving advice from the city parks and recreation department, our Bilingual Initiatives Committee has found enthusiastic community support in our efforts to plan this upcoming community event that will celebrate Hispanic customs, cuisine, and heritage.

Building Long-Term Relationships

As marketers, we know that the Hispanic segment is an incredibly valuable consumer group. With an annual purchasing power of over $1.5 trillion, this powerhouse community is more likely to start a new business than any other demographic and it accounts for a larger percentage of home purchases than ever before, according to an article published by Forbes. However, we cannot simply make token efforts to attract their business.

To reach this audience, cater to their actual needs, and stand out from our competitors, banks need to establish an authentic connection in an honest and respectful way. Our Bilingual Initiatives Committee is making a difference at PremierBank by helping us to build authentic, meaningful relationships both inside and outside of our bank. Because of this, the business relationships we have formed with our Hispanic customers and community partners are based on understanding and respect and will endure long into the future.

Rolfs, vice president – director of marketing at PremierBank in Fort Atkinson, is a member of the 2022–2023 WBA Marketing Committee.

How Wisconsin employers can best invest in the security of their team

By Hannah Flanders

As inflation and the cost of living across the country continue to rise, more employees are feeling the increasing strain of financial burden in their day-to-day lives. While some individuals may choose to seek higher paying positions to combat this stress, many are looking to their current employer to assist them in finding new solutions to managing these burdens.

Financial stress is often defined as any emotional tension an individual may experience related to money, debt, or upcoming expenses. According to a survey by Purchasing Power in March 2022, 97% of all full-time employees reported that they experience financial stress.

While monetary stress manifests in many different ways, employers should be concerned that these stressors weaken productivity, negatively impact company culture, and decrease overall talent retention.

What Can Employers Do?

According to the 1,100 full-time employees surveyed by Purchasing Power, 57% say the benefits their employer offers have a major to moderate impact on their decision to stay at their current job. While unemployment rates return to pre-pandemic lows, employers must develop attractive benefit packages that not only meet the needs of incoming talent but set current employees up for success.

These benefits — ranging from health insurance and vacation time to retirement planning and financial wellness programs — impact overall employee satisfaction, both personally and professionally, and save businesses billions of dollars each year.

In a survey conducted by the American Psychological Association (APA), money stress experienced among Americans registered at its highest recorded level since 2015. By regularly reassessing employee benefit plans, businesses are better able to accommodate for common stressors — such as retirement and emergency savings — in relation to current events. Additionally, these opportunities allow greater chances for Wisconsin employers to integrate new, relevant, and cutting-edge tools for members of their team.

The Importance of Financial Wellness Programs

More than ever, employees consider it the employer’s responsibility to help employees with their financial well-being. In addition to providing employees the resources they need to feel secure, businesses that invest in financial wellness programs are more likely to retain current talent and save on the cost of recruiting and training.

Today, wellness is no longer determined solely by physical health. In order to wholly provide for employees, employers must account for all aspects that create tension in one’s life. By promoting resources that help employees stretch their dollar, employers are increasing productivity, engagement, and attendance among those who may otherwise be severely impacted by their financial worries.

PwC’s Employee Financial Wellness Survey, conducted in early 2022 on over 3,200 full-time employees, highlighted that among the 29% of employees currently looking for a new job, 65% cite money as their primary reason. However, both financially stressed and non-stressed individuals surveyed reported being more likely to accept a position or stay with a company that they feel cares about their financial well-being.

Wisconsin employers who are not doing so already should consider adopting financial well-being into benefit packages and adding financial education opportunities such as private coaching as resources for every employee. As housing costs, gas prices, and living necessities skyrocket around the country, individuals are seeking additional initiatives that aid in overcoming the recent additional stress.

A Growing Need for Assistance

Similar to how the nature of work and its demands have evolved over the last three years, workers too are reassessing their financial priorities.

The U.S. Census Bureau states that, according to the most recent census data collected in 2020, Wisconsin’s median household income is $63,293, over $4,000 below the national average. Although the importance of establishing and ensuring a health emergency saving fund has been emphasized even more since the onset of the pandemic, a quarter of consumers still have no savings set aside for emergencies, according to the 2022 Emergency Savings and Financial Security report by the Consumer Financial Protection Bureau (CFPB). Additionally, 39% have less than a month’s worth of income saved for emergencies.

This lack of funds directly originates from, according to the CFPB, an individual’s knowledge on how to save. Whether it be lack of information relating to saving or financial constraints, those without emergency saving funds are nearly three times as likely to “not know how to save” than those who have a fund of some proportion.

The Society for Human Resource Management (SHRM) states that while upwards of 95% of organizations offer retirement savings plans, less than 35% offer financial planning/ coaching, and even less (15%) offer emergency savings funds or payroll advances, causing many individuals facing an emergency to charge a credit card, borrow money, or cut other expenses.

However, as the prices for necessities such as groceries, shelter, and gasoline rise — more Wisconsinites than ever are struggling to set aside funds for emergencies, their future, or even other commodities. In addition to setting a 40-year record for total increasing prices (a 9.1% increase since June 2021), both food and energy prices increased by 10.4% and 41.6% percent, respectively, in the last 12 months. These skyrocketing prices represent the largest price jumps consumers have seen since the early 1980s, according to data presented in the June 2022 Consumer Price Index.

Resources Available

Financial wellness programs, such as America Saves and Wisconsin Saves, not only help employers meet the growing demand for budgeting tools, but these campaigns also build consumer confidence, assist individuals in reaching their financial goals, and save businesses added expenses caused by absenteeism or low productivity.

America Saves and Wisconsin Saves provide individuals with the tools and education needed to effectively approach savings goals such as retirement, debt repayment, or vacations. Be it a long- or short-term goal, America Saves supports low- to moderate-income households in saving money, building wealth, and preparing for the unexpected.

The Wisconsin Saves initiative, brought forth by a coalition of Wisconsin organizations including the Wisconsin Bankers Association (WBA), promotes automatic saving opportunities through split deposit. The program, launched in 2021, encourages small- and medium-sized employers to promote the ease and benefits of saving automatically for emergencies through split deposit.

By promoting the success of these programs, encouraging employees to take the America Saves pledge to access additional resources, or motivating teams to split their deposit into a savings fund — Wisconsin businesses can play an important and impactful role in helping their employees improve their financial well-being.

Join Wisconsin banking leaders in education and networking opportunities

Banking leaders from throughout Wisconsin will once again reconvene in Wisconsin Dells for a two-day event focused on education and networking. WBA’s Management Conference, beginning on September 13, is a must-attend event for CEOs, CFOs, CCOs, HR leaders, and other members of the bank’s management team.

An optional, pre-conference golf outing is scheduled for September 13 at Rock Golf Club in Wisconsin Dells. Bankers interested in additional opportunities to connect with their banking peers and event sponsors should plan to attend. Following the outing, the event will kick off on Tuesday night with a dinner program recognizing individual bankers who will be receiving WBA’s 30- and 40-year Lifetime Service Awards. Bankers interested in receiving this recognition or honoring an individual who meets the service award criteria should visit wisbank.com/ServiceAwards to complete the nomination form by August 19, 2022 to be included in the program.

On September 14, bankers will have the opportunity to attend two general sessions and two rounds of breakout sessions that include four management-related tracks including credit/lending, human resources, finance, and general bank trends.

In addition to networking among peers, Wisconsin bankers will hear from Sarah Sladek, founder and CEO of XYZ University, LLC during her keynote session on managing and leading during the new era of workplace shift that has recently emerged. While preparing for increasing innovation, shifting values, global connectivity, disruption, and opportunity, Sladek will assist bank leaders and organizers in understanding why they may be struggling to lead a high-functioning team as well as provide insight into how bankers may best be able to usher in a new generation of talent.

To learn more and register for the upcoming event in Wisconsin Dells, visit wisbank.com/management. Questions regarding the conference can be directed to WBA’s Lori Kalscheuer, director – education.

WBA’s Management Conference Returns to Wisconsin Dells in September

Join over 150 banking leaders for WBA’s annual Management Conference September 13 and 14 in Wisconsin Dells. C-suite and HR professionals will enjoy several general sessions, breakout sessions, and opportunities to network among Wisconsin banking peers and over 50 conference sponsors and exhibitors from across the U.S.

The conference, to be held at Glacier Canyon Conference Center, will officially begin on Tuesday night with a dinner program and ceremony recognizing individual bankers who will be receiving WBA’s 30- and 40-year Lifetime Service Awards. Bankers are encouraged to attend this program not only to celebrate these milestone achievements, but for additional opportunities to network with banking peers. Bankers interested in receiving this recognition or honoring an individual who meets the service award criteria should visit wisbank.com/ServiceAwards to complete the nomination form.

Management Conference Banner

Before the dinner program on Tuesday, September 13, bankers looking to make the most of their time out of the office will also enjoy an optional pre-conference golf outing at Wild Rock Golf Club in Wisconsin Dells. Join WBA, your banking peers, and several sponsors at this unofficial kickoff for an additional opportunity to connect with banking leaders from around the state.

This year’s conference will focus on taking banking to the next level. By investing in opportunities to network with other community bankers and dive into topics that will help your bank succeed as a business, leaders are able to reinvest the skills and knowledge learned at the conference into every member of their team.

WBA encourages all bank management teams to take advantage of the four management-related breakout session tracks — including credit/lending, human resources, finance, and general bank trends — for the benefit of every leader, their team, and the continued success of their institution.

To learn more and register for the upcoming event in Wisconsin Dells, visit wisbank.com/management. Questions regarding the conference can be directed to WBA’s Lori Kalscheuer, director – education.

The Society of Bank Executives offers opportunities for professional development

As the deadline to sign up for the Society of Bank Executives pre-launch session quickly approaches on July 30, c-suite bankers and executive team members are reminded to use this opportunity to invest in their own professional development for the benefit of their entire team.

The Society of Bank Executive, officially launching in January 2023, is offering Wisconsin bankers the ability to participate in the Society’s pre-launch session starting this August. Bankers receive a 25% discount for two years when they sign up before July 30, 2022.

The pre-launch session will focus on honing the skills of trust and team building of bank executives from around the country. During the four-month session, bankers will have the opportunity to hear from Doug Faber, consultant at Franklin Covey during a virtual presentation on “the speed of trust” as well as Casey Thompson, principal consultant at The Table Group during a virtual presentation on “trust and the dysfunctions of a team”. All virtual presentations will also be available on demand for 30 days after the live event.

In addition to learning from experts — Wisconsin bankers are also invited to join bank executives from around the country in Sun Valley, Idaho for a two-day networking event. Not only does this event offer bankers the ability to expand their networks outside of their typical markets, bankers will also be able to share tips from their experience and ask questions of their peers.

The pre-launch session will wrap up in November with a virtual refection moderated by Dr. Paul Godfrey, Society of Bank Executive’s academic advisor. In this final meeting, bankers will reflect on the previous meetings and how they will be able to implement their personal strategy to leverage the power of trust.

Learn more about the Society of Bank Executive by visiting www.executives.bank/home.

This year’s event centers around the theme “Rise”

The Wisconsin Banker’s Association is thrilled to announce that the annual Bank Executives Conference will be back in person February 9–11, 2022 at the Kalahari Convention Center in Wisconsin Dells. This is the premiere event for bank leaders in the state. The theme of this year’s event will be “Rise.” Wisconsin bankers have risen to the occasion over the course of the pandemic, and this conference will address what it will take to be resilient and relevant in 2022.

Networking

Being back in person opens the door for the kind of networking opportunities that bank leaders have been craving for nearly two years. The conference will kick off with a networking reception on Wednesday evening, but bankers are invited and encouraged to arrive earlier for optional afternoon “banker-only” peer group discussions starting at 2:30 p.m. Peer group discussions are geared toward the roles of CEOs, CFOs, credit and lending, operations, and organizational development. Opportunities to connect with fellow bankers, WBA Associate Members, and WBA staff will be plentiful throughout the conference, with an exhibitor Marketplace providing a dedicated space for making connections.

Executive-Level Education

The WBA Bank Executives Conference brings national experts to Wisconsin, while providing tailored programming specific to the needs of banking leaders in our state. Among the trending topics that will be covered at the conference are:

  • Changes that emerged during the pandemic that are now here to stay
  • Talent recruitment and retention
  • Technology, fintech, and digital transformation
  • Cryptocurrency
  • And more!

New Hybrid Option for 2022 A livestream will allow attendees at the bank to view the keynote sessions on February 10 and 11.

The opening keynote session is titled, “Business as Unusual: How to Future-Proof Your Business in Transformational Times.” In this engaging, provocative, and insightful keynote session, acclaimed global futurist and best-selling author Jack Uldrich will not only discuss how the Coronavirus is transforming the world of tomorrow, he will explain why it is accelerating many of the trends that were already at work prior to the epidemic. History reminds us that great crises produce great change — as well as great opportunities. To take advantage of these extraordinary opportunities, businesses must position themselves now to operate in a world where “business as unusual” is the new “usual.” This session will help leaders at every level of an organization leverage ten “unconventional” techniques to succeed in today’s — and tomorrow’s — transformational times.

Dr. Chris Kuehl, managing director of Armada Corporate Intelligence, will present a keynote session, “2022 – The Real Recovery Year?” That honor was supposed to go to 2021, but we all know what happened over the last several months — inflation, labor shortage, supply chain breakdowns, and the repeated resurgence of the virus. Now we have these lingering issues along with the reactions — higher interest rates, efforts to restore, continued engagement by the government. The bankers have been placed squarely in the middle of all this and expected to do most of the heavy lifting. Does that continue and what can we really expect as far as growth and recovery?

For more details on programming and to view the full agenda, please visit www.wisbank.com/bec.

Banking leaders are eager to rise to the challenges ahead of them, and the conference will provide actionable tools and knowledge attendees can bring back to their banks and communities.

Recognition

The 2021 Banker of the Year will be announced at the conference, recognizing a bank CEO or president (or an individual who has recently retired from these positions) who has made an outstanding effort throughout their career in service to their bank, to their community, and to the banking profession.

The Wisconsin Bankers Foundation Financial Education Innovation Award will be presented at a special luncheon on February 10. This prestigious award recognizes a bank’s unique efforts to enhance the financial capability of consumers in their community, whether it’s a new kind of educational game for students, curriculum developed for adult seminars, or some other new or innovative approach to financial education.

The 50- and 60-Year Clubs recognize bankers who have served in the banking industry for 50 and 60 years, respectively. These awards will be presented during the special luncheon at the conference to honor professionals who have dedicated their careers to the banking industry.

Entertainment

Ope! Charlie Berens, best known to Wisconsinites for his viral video series, “The Manitowoc Minute,” will perform at the Chairman’s Dinner Program on Thursday, February 10.

Comedian, Emmy award-winning journalist, and Wisconsin native Charlie Berens — who rose to fame from his video series, “The Manitowoc Minute” — will provide the entertainment for the Chairman’s Dinner Program on February 10. Attendees can expect lots of laughs from the author of the recently released book, “The Midwest Survival Guide: How We Talk, Love, Work, Drink, and Eat. . . Everything With Ranch.” Berens has been featured on Fox, CBS, Funny or Die, TBS Digital, Variety, MTV News, and more. In 2013, he won an Emmy for “The Cost of Water” while reporting for Texas news station KDAF. “The Manitowoc Minute” series has garnered millions of views and paved the way for a sold-out standup comedy tour. Geez, Louise, this is sure to be a hilarious show you won’t want to miss!

Register

To register for the conference, please visit www.wisbank.com/bec. We look forward to seeing you Wednesday, February 9–Friday, February 11 at the Kalahari Convention Center in Wisconsin Dells!

By Erika Pierce, J.D., The Millennial Boardroom

Erika Pierce will be presenting at our November 4 WBA BOLT Winter Leadership Summit in Stevens Point. Visit the registration site to learn more!

Soft skills are skills that you learn through experience, mindfulness, and reflection. They’re your good habits, personality traits, and understanding of workplace norms. These skills are important to have for any worker, especially to those in higher positions. Possessing these skills often denotes experience, confidence, and professionalism.

If you’re chasing a new job, a higher position, or career independence, you need to develop your understanding of certain soft skills. Here are just five important important soft skills that you need to grow your career:

Communication

Being able to communicate well in a professional setting is one of the most important stepping stones to a large network and successful career.

Your communication skills dictate how well you relate with others. Being a good communicator often leads to having great workplace relationships with your co-workers, a more healthy and efficient work environment, and being a better leader.

To be a good communicator, you have to hone specific communication skills. This includes public speaking, giving clear directions, and active listening. It’s also important to hone your nonverbal communication skills, like reading body language, tone of voice/writing, and other unspoken cues.

Self-Management

While you might think that the people who go furthest in their careers are the ones that put in 60-hour work weeks and almost never seem to rest, think again. For most people, this kind of work-life balance is unsustainable and can often lead to burnout. If you want to sustainably grow your career, you need to develop your sense of self-management.

I’ve learned that once you take charge of your own career, you’re in charge of your own work-life balance. You’re the one who decides how often you work, and consequently, how stressed you are.

Knowing when to take a break and step away from your work is a skill in itself. Setting aside time for yourself allows you to reap the benefits of your hard work, and helps remind you why you want to grow even further. This leads to a healthy work-life balance and a sustainably growing career.

Marketing

Even if you aren’t a marketer, having marketing skills is important to career growth.

Knowing how to sell yourself is essential to getting hired, promoted, or even working independently. This means understanding what a company, position, or client needs and highlighting why you’re the perfect fit for the job.

Career Management

Sometimes, career growth doesn’t mean a promotion, but an opportunity elsewhere. Being able to recognize this is a skill in itself, but you should also have the drive and willingness to at least consider new career options.

I tell people that they should look at the market every now and then, even if they’re not looking for a new job, because it’s always changing. If you always know what the market is like, you might find an opening with a better salary, a more convenient location, or even at the company of your dreams.

Resilience

There’s a lot of pressure involved in growing your career. Job interviews, chasing deadlines, and application processes are just some of the pressure situations you’ll be faced with in your career. But how much you grow your career depends on how much you can handle and thrive in the face of this pressure.

There’s a reason some of the biggest career success stories are stories of resilience. When you’re growing your career, you will be faced with challenges and tough times. But the truth is that you grow the most when you’re out of your comfort zone. Understanding this will help you grow your career to new heights.

 

These are just some of the soft skills that you should develop if you want to successfully grow your career. If you want to learn more, consider joining my membership community where we share all kinds of career tips and advice.

Tactical allocation of capital is an integral component of success for every financial institution, so capital planning and strategic planning should be closely tied. Just as bank management and the board must regularly review their institution's strategic plan and make adjustments, an effective capital plan should be reviewed and recalibrated at least annually. That assessment has never been more critical, as the financial services industry approaches what could be a tumultuous period. "The full rollout of the capital conservation buffer under Basel III, CECL, and a potentially completely different economic cycle will be hitting at about the same time, so banks need to be considering and planning for that now," said Nick Hahn, director of risk advisory services at RSM US LLP. "It's a bit of a perfect storm." To adequately prepare, bank management and directors should consider the following five key factors as they look back at 2017 and forward to 2018 during the capital planning process: 

1: Strategy
The bank's strategic plan is the most significant influence on the capital plan, since different strategic goals require different capital strategies. According to Jon Bruss, managing principal and CEO of Fortress Partners Capital Management, there are several situations common to our industry that drive the need for capital: growth in assets exceeding the ability of the bank to retain earnings to support the growth, asset quality problems wiping out a large block of capital, or preparation for an acquisition as a buyer are among them. "There is no one solution that works for all banks in all situations," he said. Banks dealing with rapid growth in assets driven primarily by loan growth can fund a capital shortfall with common equity or with debt issued by a bank's holding company. "Any bank that's in the market for an acquisition and doesn't have a quote symbol for its stock is going to need to make that purchase for cash," Bruss explained. There are several options bank leadership should consider for sourcing those funds. "Cash at the holding company level can be sourced with debt raised via an investment banking firm, lent by a correspondent bank or by an offering in the communities served by the bank, each approach carrying a different cost," Bruss advised. Common equity can be used to raise cash to fund that purchase, "by selling shares to members of the community or via an investment banker-assisted community offering," he continued. "That requires thoughtful planning today, because tomorrow you may be an acquirer." 

2: Unexpected Occurrences
In addition to a yearly review, sudden, unplanned-for incidences should trigger a reassessment of the bank's capital plan. "If there's an unexpected loan charge-off that impacts your capital, for example, review your plan again then," said Lee Christensen, partner, financial institutions practice at Wipfli. "That way you know if you're on track or if you need to change the way you operate in order to get back on track." A cybersecurity breach or unanticipated findings during ALM routines and/or liquidity forecasting should also trigger a review. 

3: Competition
Today's financial services industry is highly competitive, and banks need to win against more than just their peers—credit unions, farm credit lenders, and even financial technology companies are all vying for the same customers. That can lead to dangerous choices. "You can sacrifice on term, price, or structure, and for many institutions pricing has reached the bottom, so now they're making decisions to sacrifice on term or credit risk monitoring controls, which ultimately increases credit risk," Hahn explained. "Financial institutions need to be very aware of the role competition in the market has played and how that could impact credit losses going forward and, ultimately, capital." To address this risk, Hahn recommends bank leadership maintain a thorough understanding of how potential losses could impact the balance sheet. "If we see any upticks in losses, you need to understand what's driving it and know if you need to extrapolate or do broader analysis of the portfolio in general to see if it will spread," he advised. 

4: Legislation and Regulation
Looking forward to 2018 and beyond, there are several legislative and/or regulatory factors to consider when doing capital planning. First is tax reform, which Christensen says will be a big event for banks if it comes to fruition because many banks currently hold a large amount of tax-deferred assets on their books. If Congress follows through on the plan to drop the tax rate from 34 percent to 20 percent, those assets will need to be revalued. "That will be a good thing in the long run, but it may have a negative impact in year one because the offset goes into expense, which ultimately flows into capital," Christensen explained.

Another factor to consider is Basel III's phase-in. In mid-October, the Basel Committee on Banking Supervision announced a plan to break the year-long deadlock that has delayed the capital standards' implementation: setting capital floors at 72.5 percent. The measure has yet to be approved by the central bank governors and supervisors on the Basel Committee's oversight body. 

Finally, the regulatory factor looming largest over the industry: CECL. "In the year of adoption, banks will be allowed to look at their allowance as it's calculated under the old and new methods and the difference will be a one-time charge to equity," said Christensen. "We'd recommend banks preserve capital for that hit, rather than maintaining excessive allowance." However, there is still some uncertainty, as banks seem to be waiting for guidance from regulators on how to build their new models, but the regulators seem to be waiting to offer guidance until they see the models. 

5: Economic Cycle
Banks should review their capital plan more frequently during times of economic turbulence or market instability, and the next period of such agitation is on the horizon. "We're likely closer to the next recession than we are to the last one," Hahn declared. "Many institutions are making the loans that will be their next losses right now." One sector in particular where the coming downturn is apparent is in the highly cyclical agri-business arena; while not yet as severe as some previous dips, ag credits are becoming more stressed. "If and when charge-offs become necessary, the banks need to have the capital available," said Christensen. "We've gone five or six years with very minimal charge-offs. The economy has been on a relatively long upturn during that period, but it doesn't feel like it because we haven't seen the sharp incline that we had in the early 2000s."

Take Action

With these factors in mind, bank management and directors should consider the following action steps (all suggested by one or more of the experts interviewed for this article) to ensure a comprehensive, effective review of their capital plan:

  • Refer back to your original capital plan and your projections. Compare that data with what your current reports tell you.
  • Closely evaluate the 30- and 60-day reports to see if there is potential for those to extend into the 90-day past due report.
  • Adjust your approach to stress testing. Relying on probability of default—looking at what causes borrowers to default—isn't as valuable from a capital planning perspective as using loss-given testing to anticipate the bank's exposure if certain loans go bad. 
  • Understand the capital sources available to your bank in its current state and also in anticipated future states. In other words, verify that your capital plan is realistic. If your institution isn't attractive to capital markets at the time when you need capital the most, know what your alternative source of funding will be. Leveraging your third-party relationships is an important component in maintaining an accurate understanding of today's capital markets.
  • Avoid a siloed approach to reviewing capital. Other risk management exercises and models, including interest rate risk and liquidity, should all impact your capital planning process.
  • Adhere to your loan policies. Amid fierce competition and an economic expansion, it is essential for bank leadership to enforce loyalty to the bank's policies in order to prevent taking on excessive risk.

Capital planning is one of the executive team and board's most important duties, so frequent assessment and adjustment of the plan is not only a good practice from a risk management perspective, but also from a strategic perspective. 

Fortress Partners Capital Management is a WBA Associate Member. 
RSM US LLP is a WBA Gold Associate Member.
Wipfli is a WBA Silver Associate Member. 

By, Amber Seitz

The banking industry is undergoing a prolonged period of tremendous change. In fact, many experts say that constant change is the new normal. As the guiding hand and governing body, bank boards must also adapt and adjust their focus in order to lead their institutions to success in today's volatile environment, all without losing sight of their primary responsibilities. Read on for a look at how directors and boards have changed in recent years, and for perspective on what your bank's board may need to transform into in the near future. 

Who's Sitting Around the Table?

Twenty or 30 years ago, the banking industry was much more straightforward than it is today, and was reasonably stable as well. That placed fewer demands on directors, in general. "As long as the board members were representative of the bank's market and were helpful in generating new business and making lending decisions they contributed to the success of the bank," said Cass Bettinger, president, Cass Bettinger and Associates. Often chosen for their community status or ongoing business with the bank, directors on historical bank boards often mirrored the bank's product mix, which facilitated their role as brand ambassadors, according to Julia Johnson, senior manager, Wipfli LLP. "However, those historical boards may not have had a thorough understanding of banking, and how banks serve as an intermediary of cash," she explained. "They put a lot of faith, confidence and trust in senior management to prudently manage the bank and ensure regulatory compliance." 

Walk into a bank boardroom in 1985 and you'd find a collection of businessmen, lawyers, accountants and community leaders, individuals with backgrounds in either business or finance. New directors were often selected based on their commercial relationship with the bank, their connections to the local business community, or because they (or their family) owned a large share of the bank's stock. According to Philip K. Smith, president, Gerrish McCreary Smith Consultants and Attorneys, the director role used to be viewed as a passive one with little impact on the overall success of the institution. "Historically the makeup of the board of a successful bank was identical to the makeup of the boards of unsuccessful banks," he said. "The focus of those kinds of boards was loan approval, dividend payments and general oversight." 

Walk into that same boardroom today, and you'll still find a collection of businessmen, lawyers, accountants and community leaders, but they may look very different. As with historical boards, today's directors are individuals with business acumen, and may also be representatives of large shareholders. "A good business background is helpful, and those people often end up leading discussions and have significant input," said John Knight, partner, Boardman & Clark llp. However, today's economic and regulatory environment has forced a move toward selecting directors to fill in gaps in expertise on the board, rather than business community or shareholder representation. "That has promoted much more diversity in the board in terms of gender, race, age and ethnicity," explained Smith. "Those go out the window when the question is 'what does the bank need?' rather than 'who should sit on the board?'." According to Knight, the composition of bank boards is transitioning slowly, especially at community banks. "It's quite different between community banks and regional or national banks," he said. "If I see a change, it's modest and gradual. This is not abrupt." Still, Johnson says not only is increased diversity necessary to bring in expertise, but it will also have an overall positive impact on the institution. "When you look at what needs to shift in terms of the composition of the board, we need to have more diversity on the board," she said. "While backgrounds may remain consistent, the diversity of individual experiences and perspectives contribute to the strength of the board by creating a rich and robust platform for discussion. Specifically, there will be greater representation of women and individuals of different ages on the board." 

Same Board, Shifted Focus

While the individuals sitting around the table and their backgrounds are not much different, the expectations placed on them and their approach to their role has shifted dramatically. "Traditionally, the board has looked to the CEO to be the primary strategist for the organization and that their role was simply to look at the strategic plan and approve it," Bettinger explained. "The biggest single change in responsibilities for board directors is that they now must be responsible for being actively engaged in the strategic planning process and understanding what it means." According to Knight, the law regarding directors' responsibilities has not changed appreciably, but the application of it has broadened as expectations from regulators rise. "In general terms, their fiduciary duties haven't really changed," he said. "But the regulators in particular expect more of directors." Those expectations mean directors can no longer be passive sources of commercial loan contacts. "In the past, directors could serve in a more passive capacity," Johnson said. "Today, the regulatory environment doesn't allow for that." 

Just as regulatory expectations for bank directors have transformed their role, so have market and economic influences. "Banks now have to be constantly reassessing their business model and changing it," said Bettinger. "The bank needs directors who have certain skillsets that will help the bank succeed in a changing marketplace." The ideal combination of skillsets will vary by institution, depending on the bank's strategic goals. "The board needs to know who the bank is and who they want to be in the future," Smith explained. "You identify new members by understanding the kind of bank you're trying to become and then reaching out to those people." For example, if the strategic plan forecasts growth through M&A activity, the board should have at least a couple directors with experience in that arena. That's why Johnson advocates not filling the board to capacity at all times. "I like to see banks that don't keep their board at full capacity, but leave a couple seats vacant as permitted by the bank's bylaws," she said. "This gives the bank flexibility to bring in new board members who have a particular expertise and/or enables the bank to create an overlap between a new director and an experienced director who may be stepping off the board." That provides the board with crucial responsiveness if a critical unmet need is identified.

With this shift away from more ceremonial boards to knowledge-based, strategic, active boards, the recruitment and training of board members is transforming as well. "It's a requirement that the board not micromanage but be much more active than historical boards," said Smith. "That changes the dynamic, even as you're recruiting people." Smith says the board must also take an active role in its own succession planning. "Directors must help recruit new board members," he said. "The board should consider itself a body independent of management and therefore participate in recruitment." The process for identifying potential successors should be familiar to the board, because it's the same one they use within the bank. "Look at the strategic plan and then do a board composition analysis, on the basis of knowledge, skills and abilities, and identify where you have gaps," said Johnson. "It's the same thing you do at the bank level. The key is to be intentional and proactive." Active recruitment also requires directors to understand and articulate why serving on the board is valuable. "In today's world, if you want somebody who's really good to come on your board, you need to have a winning value proposition for them," Bettinger explained. "You want them to feel that going on your board will be a great thing for them to do for the community and their business." 

Training: Not Just for New Directors
Offering regular education and training opportunities is one of the best ways bank executives can equip their directors (and therefore their bank) for success. After all, most directors will not have built-in understanding of the banking industry, and that is an important component of their fiduciary duty. Board education and training is a highly diverse process that varies greatly from board to board. The key is that it should not be a one-and-done onboarding session. "All board members of all banks ought to have some type of minimum requirement for continuing education every year," Smith advised. Bettinger recommends specifying the education and development each individual director needs and incorporating it into a written plan. This not only provides specific training for each board member, it's more efficient, too. "You don't want to spend money to send your entire board off to training that only a quarter of them need," Bettinger explained. "It's much more cost-effective to be individualized in your director education by identifying what specific education that each director needs that's most important." Another approach, specific to the onboarding process, is to provide one-to-one guidance. "You might even assign a mentor for a period of time," Johnson suggested. "Partner a new director with a seasoned director who can respond to questions."

Looking Forward

So, what will you see walking into a bank boardroom in 2030? "I'm already seeing more independent directors with specific expertise and experience that are relevant to the development and execution of strategy," said Bettinger. "A prime example is the crucial role that digital technologies increasingly play in developing, promoting and reinforcing winning customer value propositions; measuring and managing relationship profitability and loyalty; efficiency enhancement; and more effectively managing all categories of risk." With signs indicating that mergers and acquisitions will continue to rise, Johnson predicts the resulting larger banks will have boards focused on those unique challenges. "On the one hand, I think bank boards will need to be more savvy and more skilled in merger and acquisition activity," she said. "On the other side, as the asset size of the banks grows and regulatory pressures increase, they'll need to be increasingly more sophisticated in terms of the banking industry and the applicability of those regulations to their financial institution in order to mitigate risk and liability, to ensure safety and soundness." Increased regulatory pressure will be met with increasing pressure from technological changes, as well. "It's my opinion that it will result in more board turnover because directors will need to constantly stay on top of new threats that didn't exist before," Smith said. "The industry is changing so rapidly it will require a more engaged, nimble board with a much younger average age that is able to monitor technology." Just as we've seen over the past two decades, as the industry becomes more complex, the board will shoulder more responsibility to be informed. "The complexity of banking is much greater now than it's ever been," said Knight. "That requires more well-informed, better educated directors, just to deal with the complexity of it.

By, Amber Seitz

Events

The 2023 WBA Bank Executives Conference will be held Wednesday, February 8 through Friday, February 10 at the Kalahari Convention Center in Wisconsin Dells. The conference will kick off with a networking reception on Wednesday evening, but bankers are invited and encouraged to arrive earlier for optional afternoon “banker only” peer group discussions starting at 2:30 p.m. The conference will adjourn at Noon on Friday.

This conference is ideal for community banking executives to come together for networking and education. Attendees will enjoy two days of networking, several national keynote speakers, and a total of 8 breakout sessions to choose from. Members of your bank’s executive team can each customize their agendas by attending and learning from different breakout sessions.

View the Speakers and Agenda pages on the conference registration website for more details!

 

Bank Member Registration Information

EARLY BIRD PRICING! Register your team by January 9, 2023 to receive the registration fee of $475/attendee, including all meals and conference sessions. After January 9, the registration fee will increase to $525/attendee.

Spouses/guests (non-bankers) can be registered to join for all meals at the rate of $275/guest. This includes Wednesday reception; Thursday breakfast, lunch, reception, dinner and dessert reception; and Friday breakfast. Spouses/guests (non-bankers) can also register to only attend the Thursday evening receptions and dinner at the rate of $125/guest.

Associate Member & Exhibitor Registration Information

WBA Associate Members can register to attend, exhibit, and/or sponsor at the conference.

Associate Member individual conference registration is $695/attendee, including all meals and conference sessions. Visit the Information for Exhibitors/Sponsors page for more details on exhibit and sponsor opportunities! Please contact WBA’s Nick Loppnow for more information on exhibiting. Interested in upgrading your presence? Register to be a conference sponsor to receive additional benefits and conference recognition! Please contact WBA’s Nick Loppnow for more details on available sponsorships.

In this webinar you will learn strategies to avoid losing your top talent, and how to establish a simple, yet successful, Talent Management Program. This in turn integrates into your Strategic Plan. The presenter will cover nine competencies your successors must possess and you will walk away with strategies and tactics you can implement in your institution immediately.

What You’ll Learn

  • Learn about the key components of a strong Talent Management Program
  • How to conduct a talent assessment in your organization
  • A step-by-step process of how to integrate your Talent Management Program into your Strategic Plan
  • Strategies on how to retain your top talent and attract the right talent
  • The importance of succession planning and how to get started at all levels
  • The nine competencies your successors must possess
  • How to strategically outsource HR

Who Should Attend
Human Resources personnel including HR Director, managers, supervisors, senior leadership of any organization, Board of Directors, as well as ownership.

Instructor Bio
Marcia “Marci” Malzahn is the president and founder of Malzahn Strategic, a community financial institution management consultancy focused on strategic planning, enterprise risk management, treasury management, talent management, and EOS’ Implementation.

Malzahn has 30 years of banking experience, ten of those years as the EVP/CFO and COO of a community bank she co-founded where she oversaw all areas of operations. In her last year as EVP/COO/CRO, Malzahn created and focused on the bank’s enterprise risk management program.

Malzahn is the recipient of several professional awards, is a published author of four books, and an international bilingual keynote speaker, speaking frequently at banking and credit union conferences and associations as well as leadership and women’s conferences. As a Certified Virtual Presenter, Malzahn also provides online and onsite training for financial institutions.

Malzahn is a certified life coach, holds a B.A. in business management from Bethel University, and is a graduate of the Graduate School of Banking in Madison, Wisconsin.

Registration Options

Live Access, 30 Days OnDemand Playback, Presenter Materials and Handouts $279

  • Available Upgrades:
    • 12 Months OnDemand Playback + $110
    • 12 Months OnDemand Playback + CD + $140
    • Additional Live Access + $75 per person

Principles of Banking is intended to give those who are new to banking a general understanding of the industry. Recognized as the most comprehensive introduction to the banking industry for over 40 years, it introduces fundamental banking concepts and principles, the basics of how banks operate as service providers and businesses, their obligation to operate in a safe and sound manner and manage risks, and the responsibilities of bank employees in a customer-focused financial services environment.

Dates & Location:
October 5–6: Farmers Savings Bank, 305 Doty St., Mineral Point, WI

Speaker:
Peggy Zickert, VP/Regional Operations Leader, National Exchange Bank & Trust

Who Should Attend?
This course is recommended for personnel new to banking at all levels or those who just need a refresher.

Registration Information:
The registration fee of $550/person includes all workshop materials, a hard copy of the 12th edition Principles of Banking textbook, and daily refreshment breaks and lunch. Register early as space is limited!

Principles of Banking is intended to give those who are new to banking a general understanding of the industry. Recognized as the most comprehensive introduction to the banking industry for over 40 years, it introduces fundamental banking concepts and principles, the basics of how banks operate as service providers and businesses, their obligation to operate in a safe and sound manner and manage risks, and the responsibilities of bank employees in a customer-focused financial services environment.

Dates & Location:
October 26–27: Holiday Inn Eau Claire South, 4751 Owen Ayres Ct., Eau Claire, WI

Speaker:
October 26–27: Michele Boeder, Project Manager, Platinum Bank

Who Should Attend?
This course is recommended for personnel new to banking at all levels or those who just need a refresher.

Registration Information:
The registration fee of $550/person includes all workshop materials, a hard copy of the 12th edition Principles of Banking textbook, and daily refreshment breaks and lunch. Register early as space is limited!

Suitable for anyone who wants to learn more about the commercial lending process — the backbone of most banks’ lending portfolios.

The required textbook for this course is Commercial Lending, 7th Edition.

IMPORTANT:  Be sure to order the required book for this course.  We recommend that you FIRST select and add your course session to the shopping cart, then select your preferred format of book from the “Recommended Training” options that appear alongside the shopping cart.

Topics in analyzing source documents, recording business transactions in a journal and posting entries in a ledger. How to prepare a trial balance, gather adjustment data and complete a worksheet are covered, as well as how to prepare financial statements and post-closing entries.

This course is the recommended prerequisite for Analyzing Financial Statements.

The required textbook for this course is College Accounting, 13th Edition.

IMPORTANT:  Be sure to order the required book for this course.  We recommend that you FIRST select and add your course session to the shopping cart, then select your preferred format of book from the “Recommended Training” options that appear alongside the shopping cart.

A practical introduction to financial statement analysis from the perspective of the commercial loan officer. Gain the skills needed to effectively assess the risks related to a customer — current and prospective — and evaluate possible sources of repayment for the loan.

Recommended Prerequisite: General Accounting.

The required textbook for this course is Analyzing Financial Statements, 8th Edition.

IMPORTANT:  Be sure to order the required book for this course.  We recommend that you FIRST select and add your course session to the shopping cart, then select your preferred format of book from the “Recommended Training” options that appear alongside the shopping cart.

The WBA Branch Manager Boot Camp will include 4 virtual half-day sessions. Sessions will be held on Zoom from 8:00–11:00 a.m. CT on September 22, October 20, November 10, and December 15, 2022.

About the Program:
Want to grow your total assets in excess of 20% year-over-year? Wish to grow your deposit base by more than 20%? Then consider an investment in training your branch managers in our Branch Manager Bootcamp!

What does your branch have that alternate branch channels and non-bank competitors don’t? The branch has you and your people. As the number of branch transactions continues to fall, community banks and credit unions must reassess the role of the branch manager. Companies must invest in the manager, giving him or her the right people, tools, client goals, and sales goals, and step back and watch the results change into a dynamic source of profitability.

This exciting, four-part series will focus on the next generation manager who will be leading the transition to client relationship management, and to managing an active advisory environment for the client to achieve financial goals. The next generation manager will be leading this vital transformation.

The program will focus on the critical skills and expectations that need to be developed to ensure that the next generation branch manager will exceed expectations and goals set for him or her. Participants will engage in discussions, small group activities, and skills practices to ensure that ideas are shared and learning is entertaining and adopted.

Who Should Attend:
New and experienced Branch Managers, Assistant Branch Managers, Teller Supervisors, Lead Frontline Professionals, and any professional aspiring to lead the team in a retail branch.

Registration Information: 
The registration fee of $800/attendee includes program registration for each of the four sessions, instruction and electronic materials. Upon completion of all four sessions, attendees will receive a certificate of completion for the Branch Manager Boot Camp.

The WBA Branch Manager Boot Camp will include 4 virtual half-day sessions. Sessions will be held on Zoom from 8:00–11:00 a.m. CT on May 24, June 28, July 26, and August 30.

About the Program:
Want to grow your total assets in excess of 20% year-over-year? Wish to grow your deposit base by more than 20%? Then consider an investment in training your branch managers in our Branch Manager Bootcamp!

What does your branch have that alternate branch channels and non-bank competitors don’t? The branch has you and your people. As the number of branch transactions continues to fall, community banks and credit unions must reassess the role of the branch manager. Companies must invest in the manager, giving him or her the right people, tools, client goals, and sales goals, and step back and watch the results change into a dynamic source of profitability.

This exciting, four-part series will focus on the next generation manager who will be leading the transition to client relationship management, and to managing an active advisory environment for the client to achieve financial goals. The next generation manager will be leading this vital transformation.

The program will focus on the critical skills and expectations that need to be developed to ensure that the next generation branch manager will exceed expectations and goals set for him or her. Participants will engage in discussions, small group activities, and skills practices to ensure that ideas are shared and learning is entertaining and adopted.

Who Should Attend:
New and experienced Branch Managers, Assistant Branch Managers, Teller Supervisors, Lead Frontline Professionals, and any professional aspiring to lead the team in a retail branch.

About the Speaker:
Jennie Sobecki
is the owner and CEO of Focused Results, a sales and marketing strategy, consulting and training firm concentrating on results-driven process consulting and training experience in community banks and other financial institutions. An expert in designing and implementing sales efforts and processes, Sobecki designs solutions to drive top line growth through better utilization and training of existing sales forces, including sales management.

Sobecki is a graduate of Indiana University and has a certificate in consulting services from Ball State University. Before joining Focused Results, Sobecki was director of sales and marketing for a $3 billion bank holding company, sales manager for a high-performing mid-level Indianapolis bank, and director of corporate training for a large Midwest insurance company.

Registration Information:
The registration fee of $800/attendee includes program registration for each of the four sessions, instruction and electronic materials. Upon completion of all four sessions, attendees will receive a certificate of completion for the Branch Manager Boot Camp.

The Banking Industry is an essential introduction to the business of banking. The course covers the evolution of banking since the 2008 financial crisis, the role of banks in the U.S. economy and the environment in which banks operate and compete. It provides a look into various banking career tracks to inspire and prepare and motivate new bankers and covers innovations in financial products.

Audience: Anyone who needs an introduction to banking, whether just starting a career or a more experienced professional from a different industry.

Price: $215