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South Dakota Volume VIII, Number VI
June 2011
Banker www.sdba.com
Banker Profile:
2011-2012 SDBA Chairman Bruce Byrum
Pierre, S. Dak
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Also in this issue...
SDBA, SDBIS and
Foundation Annual Reports
SDBA 2011 IRA School Preview
Agencies Work Together to Offer
Workshop on Generating Opportunities
in SD Under Small Business Jobs Act of 2010
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SDBA Board of Directors South Dakota Volume VIII, Number VI
June 2011
Dave Zimbeck, Chairman
Citibank (South Dakota), N.A., Sioux Falls
Bruce Byrum, Chairman-Elect
Banker
First Interstate Bank, Spearfish OFFICIAL MAGAZINE OF THE SOUTH DAKOTA BANKERS ASSOCIATION
Steve Hayes, Vice Chairman
Dakota Prairie Bank, Fort Pierre
Bob Rutten, Immediate Past Chairman
Citizens State Bank, Arlington
Contents
Message from the Chairman . . . . . . . . . . . . . . . . . . . . . . . . . 4
Term Ending April 30, 2012 Zimbeck Reflects on Past Year as SDBA Chairman
Paul Domke, Heartland State Bank, Redfield
Monte Troske, Farmers State Bank, Turton
From the Executive Office . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Ken Karels, Great Western Bank, Sioux Falls
South Dakota Bankers Association Annual Report
Term Ending April 30, 2013
Kim Banks, Peoples State Bank, De Smet South Dakota Bankers Insurance & Services Update . . . . . 6
Ron Kristensen, Farmers and Merchants State Bank Report on Midstates Banking Consortium and
Plankinton SD Bankers Insurance & Services Annual Report
Term Ending April 30, 2014
Bob Clair, American State Bank, Pierre SDBA Financial Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Rick Rylance, Dacotah Bank, Rapid City
George Kenzy, First Fidelity Bank, Burke South Dakota Bankers Foundation Update . . . . . . . . . . . . . 9
South Dakota Bankers Foundation Annual Report
SDBA Staff
Curt Everson, SDBA President Interagency Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ceverson@sdba.com Agencies Work Together to Offer Workshop on Generating
Mike Feimer, President of Insurance and Services Opportunities in SD Under Small Business Jobs Act of 2010
mfeimer@sdba.com
Deb Gates, Administrative Vice President
Banker Profile: 2011-2012 SDBA Chairman Bruce Byrum .12
debgates@sdba.com Ready to Take the Reins
Alisa DeMers, Publications Coordinator/Exec. Asst. Washington Update . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ademers@sdba.com
Wanted: Bank Advocates
Nadine Kepford, IS/Business Manager
nkepford@sdba.com Ask the Appraiser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Jeanine Dyce, Administrative Assistant Ethics Rule: Conduct
jdyce@sdba.com
Jan Chambers, Marketing Director of Education
Endorsed Vendor Spotlight:
jchambers@sdba.com Central States Health and Life Co. of Omaha (CSO) . . . . 18
Our History, Strength and Commitment
Michelle Guthmiller, Insurance Specialist
mguthmiller@sdba.com
SDBA 2011 IRA School Preview . . . . . . . . . . . . . . . . . . . . . . 19
Editor: Alisa DeMers Training News . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Trust Officers Gather for Conference in Fargo
Advertising: If you would like to advertise in South
Dakota Banker, contact Alisa DeMers at Bank Notes/Classifieds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ademers@sdba.com.
Educational Calendar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
South Dakota Banker is a monthly magazine
published by the South Dakota Bankers Association
that is dedicated to enhancing the banking profession
by providing useful and timely information on important
events and trends in the banking industry. Members are
invited to submit news and information.
The advertisements within this publication do not
necessarily represent endorsed vendors of the SDBA.
With the exception of official announcements, the
SDBA disclaims responsibility for the opinions
expressed and statements made. The editor reserves
the right to refuse any advertisement or editorial copy.
Advertising rates are available upon request.
Member banks, branches and associate members
receive one complimentary subscription. Additional
subscriptions are available to members at a rate of $45
South Dakota Bankers Association
per year. The non-member rate is $90 per year.
109 West Missouri Avenue, PO Box 1081
Serving Bankers Since 1884 Pierre, SD 57501
Phone: (605) 224-1653 Fax: (605) 224-7835
u Web site: www.sdba.com
Message from the Chairman
Zimbeck Reflects on Past Year as SDBA Chairman
By Dave Zimbeck
General Counsel, Citibank (South Dakota), NA, Sioux Falls
J
une signals the beginning of toot our own horns. We must continue to be advocates for
summer and a change in the SDBA’s our banks and our industry each and every day.
leadership. First, I would like to Looking back over the regulatory landscape of the
thank those bankers who afforded me past two years, we have seen the kind of havoc that
the opportunity to have a leadership Congress is capable of creating for our business when the
role in this organization the past 12 stars align. A classic case in point is how the Durbin
months. Amendment was attached to the Dodd-Frank Act and
I would also like to thank members passed the Senate without most senators understanding
of the Board of Directors for lending their time and talents its impact. Even though we have had nearly a year to
to the SDBA. It is abundantly clear that our Association digest the various provisions of the Dodd-Frank Act, it is
has a solid group of leaders who are dedicated to clear that we are only at the beginning of a very long
preserving the soundness of banking, making sure that journey in regard to the regulatory changes to come.
our industry is able to continue serving its customers and We know our relationships with consumers will
communities in the future, and ensuring the relevance change. We can expect the style and form of our customer
and effectiveness of the SDBA for the long term. Lastly, I disclosures and the way we communicate with customers
would like to thank the staff at SDBA and SDBIS for their will change. We will also be expected to compile data so a
dedication and service to all of our members. Thank you relatively small number of anonymous bureaucrats with
Curt, Deb, Mike, Alisa, Nadine, Jan, Jeanine and Michelle. little if any understanding of our industry can define the
As this is my last monthly column, I’d like to give one banking industry’s role in our economy for the betterment
last “shout out” to an individual who has done a lot for of all segments of society. While this may be a noble goal
the banking community for a number of years. As most of that looks good on paper, the ultimate form this social
you already know, Roger Novotny retired last month as engineering experiment takes may prove to be something
Director of Banking. Roger exemplified class with his completely devoid of common sense.
steady hand during some fairly tumultuous times for the One thing that has been constant throughout this
industry. But perhaps his greatest legacy was the role he process is the SDBA will be there to serve your institution.
played in the professional development of the We continue to have a close relationship with our
examination staff of the Division of Banking during his members of Congress, and each of them have clearly
tenure. He leaves the Division well positioned to do the demonstrated their understanding of the importance of a
important work of ensuring the safety and soundness of sound banking industry for the good of South Dakota. We
South Dakota banks, as he rides off into the sunset like his also enjoy almost instant access to key ABA staffers who
hero, Roy Rogers. Happy trails indeed, Roger. advocate on our behalf across a myriad of issues of
Prior to becoming chairman, I wanted to emphasize importance to banks of all types and sizes. Throughout
the importance of advocacy to our industry. This started the political uncertainty surrounding consumer financial
several years ago when we instituted a survey of regulation that is currently a way of life in Washington,
members to gather information and publish the amount of Curt and the SDBA Board will remain engaged to help
time and money that South Dakota banks contribute to shape policy whenever and wherever possible.
the greater good of their communities. Last year, we took Please step forward when you are asked to let your
a significant step forward when we launched the South voice be heard in Washington. Once the regulations are
Dakota Banks Make a Difference project. adopted and implemented, SDBA will be there with
The effort that was put forth last fall was amazing. To training resources to ensure that migration to the new
have more than 20 different banks competing in the same regulatory environment will be as painless as possible.
market and a number of other banks from across the state Thank you again for allowing me the opportunity to
work together in a cooperative effort to do so many serve your Association this past year. We have a bright
positive things for our communities was outstanding. I future ahead, and with the sound leadership and
was never so proud to be a banker and a part of this guidance of your new chairman, Bruce Byrum, and new
Association, and I thank every one of you who took part chair-elect, Steve Hayes, the SDBA is in a great position to
for the betterment of our communities and our industry. meet the needs of South Dakota banks into the future. u
My sincerest hope is that bankers continue to reflect
on all of the things they do as stewards in their
communities and offer gentle reminders of our service to Dave Zimbeck is general counsel for Citibank (South
the public and political leaders from time to time. While it Dakota), NA, in Sioux Falls. You can contact Zimbeck at
generally goes against our nature, sometimes we have to (605) 331-1630 or david.zimbeck@citi.com.
4 www.sdba.com South Dakota Banker u June 2011
From the Executive Office
South Dakota Bankers Association Annual Report
By Curt Everson
President, South Dakota Bankers Association
Government Relations: South Dakota effective lines of communication between ag producers’
T
he general elections of 2010 saw primary lenders and input suppliers who might be asked
the Republican Party strengthen or who might seek to offer short-term credit to those
its measure of control over both producers. I believe both parties left that meeting
the legislative body and the executive understanding ag producer and lender interests are not
offices housed in the State Capitol. The well served by unexpected surprises. It is likely bankers
immediate challenge placed before will meet with members of the Grain and Feed Dealers
newly-elected Gov. Dennis Daugaard Association sometime later this year. We will explain our
was how best to deal with a daunting principles and why they are important to assure the
structural budget shortfall. The national recession brought stability and availability of general operating credit for
about year-over-year declines in major revenue sources South Dakota’s ag producers But, if legislation like SB157
including the sales tax, contractors’ excise tax and bank should appear in a future legislative session, SDBA will
franchise tax. The recession also created significant continue its opposition. Stay tuned and involved.
growth in state spending for various medical services as
the numbers of people enrolled in the Medicaid Program Government Relations: National
swelled, particularly in terms of children of those newly Who knew that an 11th-hour Senate amendment to
unemployed or from low-income households in general. the massive Dodd-Frank Wall Street Reform and
Gov. Daugaard proposed a general 10 percent across- Consumer Financial Protection Act of 2010 would become
the-board budget cut as the primary means to eliminate the focus of the banking industry’s grassroots lobbying
the structural deficit and to avoid the use of one-time efforts for the past 12 months? Sen. Richard Durbin (D-Ill.)
funds to perpetuate ongoing spending. While the offered an amendment to put the Federal Reserve into the
Legislature ultimately made some changes to the relative business of setting allowable rates for interchange fees for
distribution of the budget cuts, they did implement base merchant-originated debit card transactions. In order to
budget cuts totaling about $127 million. get the required 60 votes for passage of his onerous
The dominating presence of the state budgetary amendment, Sen. Durbin shopped an exemption for
debate relegated most other legislative issues far into the financial institutions under $10 billion in assets. Truth be
background. But there was one legislative issue which told, Sen. Durbin originally proposed an exemption only
caused considerable concern among bankers and resulted for institutions under $1 billion, but needed to up the ante
in significant work for the SDBA’s lobbying team. The in order to convince enough Senators that only the largest
South Dakota Grain and Feed Dealers Association financial institutions would be affected by capping
brought a proposal in SB157 to create a super priority, interchange fees at a rate which would only cover a
non-consensual statutory lien for any seller of ag inputs portion of marginal costs associated with any particular
who decided to finance the purchase and or the transaction. To their credit, both of South Dakota’s
application of those inputs and who ultimately didn’t get senators saw through Sen. Durbin’s arguments, voting
paid for the goods or services rendered. against it.
The banker leaders of the SDBA analyzed the pros Because bankers representing the entire size range of
and cons of SB157 and developed a set of four principles institutions recognized that a two-tiered pricing structure
which led to the defeat of SB157 in the Senate Agriculture for debit interchange fees cannot work in a competitive
Committee on a 7-2 vote. Those four principles were: 1) banking and retail marketplace, the SDBA has engaged a
lien priority – lien priority should be determined in multi-faceted approach to informing elected officials,
accordance with existing UCC doctrine – first in time opinion leaders and consumers of the undesirable impacts
means first in right; 2) release of lien – once satisfied, a of putting the Federal Reserve into the role of setting caps
lien must be released in accordance of the UCC; 3) on debit interchange fees. Our efforts have included:
consensual vs. unilateral liens – liens must require the l Multiple face-to-face meetings between bankers
consent of the borrower; and 4) expansion of untaxed, and South Dakota’s congressional delegation.
unregulated lending – SDBA opposes expanded legal l Op-ed pieces in several daily newspapers.
authority for unregulated, untaxed lenders. The SDBA l Interviews with radio and newspaper reporters.
and members opposed SB157 since it included provisions l Banker panel at business/economics forum of
in direct conflict with SDBA’s adopted principles. South Dakota Chamber of Commerce & Industry.
During the 2011 interim, bankers have already met l Service on ABA Interchange Task Force.
with finance officers from the ag cooperative industry to l Comment letters to banking regulators.
talk not only about SB157, but also to help develop Continued on page 21
South Dakota Banker u June 2011 www.sdba.com 5
South Dakota Bankers Insurance & Services Update
Report on Midstates Banking Consortium and
SD Bankers Insurance & Services Annual Report
By Mike Feimer
President, South Dakota Bankers Insurance & Services Inc.
O
nce a year, 15 banking Wolf & Company P.C.: Joseph Romanello, WolfPAC
associations in the Midwest get national sales manager, www.wolfpacsolutions.com
together to share ideas and have In 2004, Wolf & Company, P.C., introduced WolfPAC
the opportunity to listen to Integrated Risk Management (WolfPAC) – a secure, online
presentations given by a select number suite of risk assessment tools and risk management plans
of vendors. that incorporate the elements of enterprise risk into a
A special thanks to Marilee Davis single, integrated solution. WolfPAC is used to help
with the Iowa Bankers Association, who automate a financial institutions’ risk management
has been in charge of putting this event on for a number program and is automatically updated to reflect changes
of years and has all the contacts to make it work. This in regulations and examination standards. With WolfPAC,
gathering is very affordable for everyone to attend; the financial institutions can assess risks and controls for IT,
participating vendors are gracious in supplying hotel privacy, vendor, compliance and other operational risk
rooms and complimentary meals. This year was no assessments and view centralized results across the
exception. enterprise. Robust reporting allows management to
I am already working with one vendor with whom analyze controls in relation to risk, provide
every bank can participate, with more to come on that documentation for examiners, benchmark results against
opportunity. A special thanks to the following companies: peer institutions and evaluate the institution’s risk profiles
against industry best practices. The result is significant
SNL Financial: Chris Gill, director, community bank efficiency gain across the institution’s enterprise risk
business development, www.snl.com/bank management program.
For more than 20 years, SNL has been recognized as
the gold standard for banking data, news and insight. Legosys Solutions: Rob Newberry, president,
SNL’s database includes detailed profiles on more than www.legosyssolutions.com
20,000 U.S. financial institutions, including all publicly- Legosys Solutions is a professional services and
traded banks and thrifts, privately-held institutions and technology firm based in Des Moines, Iowa. Legosys
credit unions. SNL is the trusted information partner for Solutions offers a wide range of business disciplines and
49 of the 50 largest commercial banks in the U.S. and more products to the financial services industry. Recent actions
than 500 community banks nationwide, as well as a by regulatory authorities have resulted in the
number of national and state banking associations. promulgation of new and complex banking regulations.
l Peer Analytics: SNL’s data and pre-built Excel Legosys Solutions is prepared to assist clients in
models help bank executives analyze their balance sheet addressing the complex and numerous regulatory
and income statement performance against peers and requirements. Through strategic alignment, process
their UBPR peer group. improvement, risk management, technology integration
l Branch Analytics: SNL offers a powerful tool, and software development, Legosys Solutions can help
including a sophisticated mapping application that you through these challenging times.
enables their clients to quickly perform in-depth market
studies integrating bank branch, deposit market share and EverFi: Ray Martinez, www.everfi.com
demographic data. EverFi is the nation’s leading financial literacy
l M&A Analysis: SNL offers powerful tools that software company. This award-winning program teaches,
enable clients to screen for transactions in their assesses and certifies students in financial literacy using
comprehensive deal database and perform detailed pro the latest media tools including 3D gaming, Twitter-like
forma analysis of potential mergers and acquisitions messaging tools, animations, video, adaptive-pathing and
(including deal pricing and pricing ratios) using their other technologies. EverFi has been featured on CBS
Merger Model. Evening News with Katie Couric, Fox News, Fortune,
CNN, Entrepreneur and other media outlets. It was
BankOnHold: Brian Hill, president & CEO, recently named one of the top 250 technology global
www.onholdworx.com technology companies along with Facebook, Twitter and
BankOnHold is the leading provider of on-hold music other leading tech firms. Benefits to associations and
and messaging services, digital video signage and member banks are:
overhead music specifically tailored to the banking l Provide valuable opportunities for your member
industry. SDBA currently endorses BankOnHold. banks and your state by increasing bank visibility,
6 www.sdba.com South Dakota Banker u June 2011
South Dakota Bankers Insurance & Services Update
demonstrate community reinvestment and link with Dell SecureWorks, Office Depot, Paystubz and Secure
potential customers in an exclusive way. Banking Solutions that help round out the offerings to
l Enhance media attention and legislative efforts. member banks.
We continue to expand our offerings through SDBIS.
This three-day event provides an excellent venue to This year, we have introduced a new marketing
exchange ideas and learn from other banking associations relationship with Office Depot for all member banks and
what is working and what is not. One of our missions is to their employees. As an Office Depot customer, you will
develop association-based products that we can provide have access to the exclusive Business Services Division
to our member banks and have control of the marketing Website and realize significant discounts on office
and distribution of that product. If you have an interest in supplies.
any of these companies, please give me a call at (605) 660- SDBIS will soon be introducing an education program
2341 or email me at mfeimer@sdba.com. for high school students; a windows-based interactive
software that takes a student through six levels of
SDBIS Annual Report financial literacy. The great thing about this product is the
Over the past year, SDBIS continues to increase our ability to customize the software to give credit to the
endorsed vendors. We are careful in choosing them as we financial institution that is sponsoring the program in
want to create great value for both the Association and their community.
our member banks. All of our endorsed vendors do an excellent job
Some of our long standing members are BlueCross providing much needed products and services. A
Blue Shield, Central States Health & Life Co. of Omaha, complete list of endorsed vendors was published in the
Deluxe Financial Services, Delta Dental of South Dakota, April issue of South Dakota Banker. The list is also available
Federal Flood Certification Corp., Ascensus, BancInsure, on the SDBA’s Website at www.sdba.com. u
BankOnHold, Dakota Security Systems, Fringe Benefits
Design, Strunk and Associates, Mutual of Omaha
Insurance Company, FinCrime, Thumbprint Signature Mike Feimer is president of South Dakota Bankers Insurance
Program and Reliance Standard. We have some new and Services (SDBIS). You can contact Feimer at (605) 660-
additions like DairyNet, NFP Renaissance Bank Advisors, 2341 or mfeimer@sdba.com.
ank You2010-2011 ank You2010-2011
Th SDBA Board of Directors Th South Dakota Bankers
Insurance & Services
Chairman Dave Zimbeck,
Citibank (South Dakota), NA, Board of Directors
Sioux Falls
Chairman-Elect Bruce Byrum, Chairman Curt Everson,
First Interstate Bank, Spearfish SDBA President, Pierre
Vice Chairman Steve Hayes, President Mike Feimer,
Dakota Prairie Bank, Fort Pierre SDBIS, Yankton
Immediate Past Chairman Robert Rutten,
Citizens State Bank, Arlington Karl Adam, Dakota State Bank, Blunt
Kim Banks, Peoples State Bank, De Smet Steve Hageman, Plains Commerce Bank, Watertown
Paul Domke, Heartland State Bank, Redfield
Bob Clair, American State Bank, Pierre George Kenzy, First Fidelity Bank, Burke
Ken Karels, Great Western Bank, Sioux Falls Kevin Lippert, First PREMIER Bank, Sioux Falls
George Kenzy, First Fidelity Bank, Burke
Ron Kristensen, Farmers and Merchants State Bank, Robert Rutten, Citizens State Bank, Arlington
Plankinton
Ray Smith, First National Bank in Philip
Rick Rylance, Dacotah Bank, Rapid City
Monte Troske, Farmers State Bank, Turton Kevin Tetzlaff, First Bank & Trust, Brookings
South Dakota Banker u June 2011 www.sdba.com 7
SDBA Financial Report
Consolidated Financial Reports
Statement of Financial Condition - December 31, 2010 (Unaudited)
ASSETS SDBA SDBIS Eliminations Consolidated
Cash and CDs $ 2,010,841 $ 242,519 $ - $ 2,253,360
Prepaid Expense 20,912 440 - 21,352
Accounts Receivable 108,948 15,536 - 124,484
Federal Income Tax Recoverable - 6,364 - 6,364
Investments 1,080,658 1,000 (270,315) 811,343
Property/Equipment 8,570 13,897 - 22,467
TOTAL ASSETS $ 3,229,929 $ 279,756 $ (270,315) $ 3,239,370
LIABILITIES
Accounts Payable 8,638 6,398 - 15,036
Deferred Revenue 136,842 2,000 - 138,842
Deferred Tax Liability - 1,043 - 1,043
TOTAL LIABILITIES $ 145,480 $ 9,441 $ - $ 154,921
EQUITY
Common Stock - 375,000 (375,000) -
Additional Paid-In Capital - 48,801 (48,801) -
Unrealized Gains 71,988 - - 71,988
Members' Equity 3,012,461 (153,486) 153,486 3,012,461
TOTAL LIABILITIES & EQUITY $ 3,229,929 $ 279,756 $ (270,315) $ 3,239,370
Statement of Revenue - Year Ended December 31, 2010 (Unaudited)
REVENUE SDBA SDBIS Eliminations Consolidated
Memberships Dues $ 376,250 $ - $ - $ 376,250
Educational Programs 229,834 - - 229,834
Convention/Conferences 218,923 - - 218,923
Commissions/Servicing Income - 264,160 - 264,160
Investment Income 71,371 5,857 - 77,228
Advertising Income 42,049 - - 42,049
Insurance Administrative Fee 68,004 - (68,004) -
Other Income 15,650 - 43,681 59,331
TOTAL REVENUE 1,022,081 270,017 (24,323) 1,267,775
EXPENSES
Administrative and Operating 781,376 321,220 (68,004) 1,034,592
Outstate Conferences 115,777 - - 115,777
Educational Programs 139,155 - - 139,155
Committees 2,227 - - 2,227
Federal Income Taxes - (7,522) - (7,522)
Instate Convention/Conferences 65,906 - - 65,906
Foundation Fund Drive Match 2,803 - - 2,803
TOTAL EXPENSES 1,107,244 313,698 (68,004) 1,352,938
TOTAL REVENUE UNDER EXP. $ (85,163) $ (43,681) $ 43,681 $ (85,163)
8 www.sdba.com South Dakota Banker u June 2011
South Dakota Bankers Foundation Update
South Dakota Bankers Foundation Annual Report
By Deb Gates
Executive Director, South Dakota Bankers Foundation
S
everal changes in South Dakota contribution from the local sponsoring bank. South
Bankers Foundation projects took Dakota banks were able to provide their communities
place over the past 12 months. with $100,000 in high school scholarships through the
The most notable was retirement of South Dakota Bankers Foundation in 2011 and 2010,
Money Smartz for Teens (formerly despite reduction of endowment payout, the effects of
known as the Economics Seminar for which are still being felt in our portfolio from the 2008
Young Adults). market downturn.
This two-day personal economics The South Dakota Bankers Foundation quasi-
program had been offered successfully through the SDBA endowment fund and banking chair endowment fund are
for 49 years, receiving national recognition on several managed by the University of South Dakota Foundation
occasions. Following a steady decline in registration (USDF) and are included as separate accounts within that
numbers, the Board directed staff to research possible portfolio. Contributed value of the quasi-endowment fund
reasons for the decline. Student focus groups, discussions is $1.275 million with a market value of $1.92 million as of
with teachers, and follow-up letters to schools led to the March 31, 2011, (up from $1.74 million at this time one
conclusion that lengthy travel time to attend the Mitchell year ago). Earnings from the quasi-endowment continues
location, and two “plus” days away from school in a busy to support many excellent consumer youth programs
student’s life no longer makes sense. including the High School Business Plan Competition;
The conclusion reached was that there was a need to Jump $tart Coalition; SD Future Farmers of America; SD
offer economic education beyond the classroom, but a Ag in the Classroom; SD Future Business Leaders of
one-day seminar offered in two locations was a better America, post-secondary scholarships in colleges,
choice. Last fall, a one-day program was offered in Rapid universities and vo-tech schools; and the high school
City and Huron. The Huron location attracted 47 students scholarship program for graduating seniors.
representing 12 schools, and that event was deemed Market value of the banking chair endowment,
successful. However, there were only seven registrants for funded with a contribution of $254,750 from the sale of
the Rapid City location, which was cancelled. the old First National Bank of South Dakota building in
A low registration fee of $50 was charged for student Vermillion, currently stands at $350,230 as of March 31,
participation (paid for by local banks), with no fee being 2011 – up from $319,724 at that same point in time the
charged for adults. Following Board discussion on the previous year. The payout from the banking chair
impact of continuing to subsidize the event, it was endowment provides funding for special banking research
determined that the approximate $9,000 amount would programs, and a portion of the salary and benefits for the
have greater impact if we were to expand various professor of the Institute for the Study of Rural Banking.
scholarship programs and prizes awarded in the highly- Dr. Leon Korte currently holds that professorship and is
successful Business Plan Competition. currently researching the effects of Dodd-Frank on our
The Board also took action to recognize former chair industry.
and Foundation Board member Joyce Hazeltine for her With the market stabilizing even more since it’s
efforts in chairing the high school scholarship campaign volatility in 2008, the USDF Investment Committee has
that raised $881,000. A $1,000 Joyce Hazeltine Scholarship returned from its monthly and bi-monthly meetings to its
was established in her honor, to be awarded annually to a normal quarterly schedule.
college junior with an expressed interest in banking, The South Dakota Bankers Foundation is a 501(c)(3)
finance or business. charitable organization, and your contributions are tax-
In addition, a $1,000 David S. Birkeland Scholarship deductible. We encourage you to consider contributing to
was established using the same criteria. This scholarship the Bankers Foundation and the future of South Dakota’s
replaces the David S. Birkeland Leadership Lecture Series youth when planning your estate. u
that was established with a $25,000 endowment by the
* See a list of the 2010-2011 SD Bankers Founation Board
SDBA in the former SDBA chair’s memory. The proceeds
of Directors on page 16.
were earmarked to be used to hire a motivational speaker
at the Money Smartz for Teens Seminar.
The High School Scholarship Program continues to Deb Gates is executive director of the South Dakota Bankers
thrive with requests from South Dakota banks far Foundation and administrative vice president of the SDBA.
exceeding available funds. The program provides $1,000 You can contact Gates at (800) 726-7322 or
to a graduating high school senior, made possible with a debgates@sdba.com.
$500 contribution from the Foundation and a $500
South Dakota Banker u June 2011 www.sdba.com 9
Interagency Training
Agencies Work Together to Offer Workshop on Generating
Opportunities in SD Under Small Business Jobs Act of 2010
By Christine Sorensen, SD Rural Development Coordinator
S
outh
Dakota
banks,
community
development
financial
institutions
(CDFI) and
others took part
in a one-day
workshop held From left, Trina Lyons, CorTrust Bank, NA, Sioux Falls, and
in Chamberlain From left, Sarah Jorgensen, South Dakota
Department of Agriculture, visits with Tanya Fiddler, Four Bands Community Fund, Isabel.
on May 12.
Attendees were Cinnamon King, director of the South
given the Dakota Export Assistance Center.
opportunity to learn more about the Small Business Jobs
Act of 2010 and SBA and USDA programs and their
benefit to the nation’s economy as well as local economies.
Hailed as a success, the workshop gave all those in
attendance an opportunity to network and share a
combined vision in increasing access to capital and
creating jobs in South Dakota.
Dan Hannaher, SBA regional administrator for Region
8, gave the initial overview of the major programs under
the Act, including the Small Business Lending Fund and
the State Small Business Credit Initiative. Jeff Stout from
the Office of Capital Access, U.S. Department of Treasury,
gave additional detail specifically on the State Small
Business Credit Initiative with fellow panelists from the From left, Jeff Priebe, First Dakota National Bank, Chamberlain;
SD Governor’s Office of Economic Development. Tim Potts, USDA- Rural Development, Rapid City; and Cal
The luncheon keynote was provided by Richard McGinnis, First Interstate Bank, Sturgis.
Todd, vice president of the Federal Reserve Bank of
Minneapolis. Dr. Todd’s presentation was titled “Small
Business and the Economy – A National and Local
Picture.”
Panelists from the South Dakota Division of Banking
and Finance, FDIC, OCC and Federal Reserve Bank of
Minneapolis gave regulatory perspectives on how they
consider government-enhanced guarantee programs for
safety and soundness. Representatives from the U.S. and
Foreign Commercial Services and South Dakota Small
Business Administration covered assistance available to
businesses in funding export markets.
The day concluded with a panel of representatives
from the South Dakota Rural Enterprise Initiative, Four
Banks Community Fund and South Dakota-SBA. The
panel gave a CDFI perspective of the Community From left, planning committee members Terry Lee, FDIC,
Advantage Program and the role of community Kansas City; Christine Sorensen, USDA-Rural Development,
development organizations in the state. South Dakota; Sandy Gerber, Federal Reserve Bank of
The event was a cooperative effort of the Federal Minneapolis; Michael Martinez, Office of the Comptroller of the
Reserve Bank of Minneapolis, FDIC, SBA, OCC, USDA- Currency, Denver; Deb Gates, SDBA; and Paul Gunderson and
Rural Development and the SDBA u Chuck Hughes, South Dakota Small Business Administration.
10 www.sdba.com South Dakota Banker u June 2011
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Ready to
Take the Reins
Meet 2011-2012
SDBA Chairman Bruce Byrum
By Alisa DeMers, Editor Savings & Loan was opening a new residential real estate lending, this
W
hen Bruce Byrum isn’t branch in New Rockford. He applied new position included managing the
overseeing the operations for the job of managing the new real estate construction, home loan
of First Interstate Bank in branch, and after graduating from department, including the bank’s
Spearfish, he can be found spending college began his work as manager/ secondary market processing center.
time with his horses in the Black trainee in 1976. The job in Rochester provided many
Hills. His favorite pastimes on his “It wasn’t the industry itself that training opportunities and exposure
free weekends are trail riding and necessarily drew me into banking. I to more commercial lending.
horse camping. really had no relatives that worked in From there, Bruce transferred to
Bruce and his wife Becky live on banking or had any opportunity to First Bank in Bismarck, N.D., for the
an acreage outside of Spearfish. They work for a family bank,” Bruce said. position of commercial loan account
have lived in Spearfish since 1989, “I was looking more for a job that executive. He had additional
when Bruce accepted the job as provided a nice lifestyle, especially oversight responsibilities of the
president of First Western Bank (now with my background, coming from a bank’s home loan originators. While
First Interstate Bank). family where dad and I both worked in Bismarck, Bruce said he further
On June 7, Bruce will take the in road construction.” developed his skills as a commercial
reins of the South Dakota Bankers lender by managing a loan portfolio
Association as the 2011-2012 A Career in Banking made up of mostly medical clinics,
chairman. He will assume this In his first banking job in New hospitals and commercial real estate
position during the SDBA’s General Rockford, Bruce’s primary loans.
Session Meeting at the 2011 Annual responsibilities included personnel
Convention in Sioux Falls. and property management, deposits A Move to South Dakota
and loan growth. Bruce said Bruce moved to South Dakota
Growing Up in Rural North Dakota managing a small savings and loan when Paul Christen, owner of the
Bruce grew up in New Rockford, branch was a great opportunity. The First Western Banks in the western
N.D., a small town in the central part job exposed Bruce at a young age to part of the state, was in the process
of the state where the economy is many of the same challenges he deals of purchasing a small independent
mainly supported by agriculture. His with today. bank in Spearfish. After interviewing
father worked on road construction After working at the bank in with Regional President John
as a heavy truck mechanic and then New Rockford for eight years, Bruce Johnson, Bruce accepted the position
as project supervisor. In addition to moved to Mitchell, S.D., to manage a of president of the newly-acquired
raising seven children, Bruce’s larger branch for Metropolitan bank and moved to Spearfish in
mother sold Tupperware to help Federal Savings & Loan. After that February 1989.
support the family. job, he accepted a position with First Bruce said his first few years in
The family lived on an acreage Bank in Rochester, Minn. Spearfish required long hours at the
on the outskirts of New Rockford, Because of his background in bank dealing with staffing issues and
where they raised a couple of milk
cows, pigs, chickens, ducks, geese, a
few beef cows and horses. Bruce said
farm chores created a good work
ethic and helped keep him out of
trouble.
In the summers, Bruce worked
for the local Agricultural
Stabilization and Conservation
Service (ASCS) office, hoed beets for
the Extension Office, hauled
thousands of small hay bales for an
uncle, and drove grain trucks during
harvest for another uncle. Once he
obtained his driver’s license, he
earned money for college by driving
a gravel truck.
After graduating from high
school, working road construction
and spending a winter in Hawaii, he
enrolled in the State School of Science
in Wahpeton, N.D. While working on
his business management degree, he
learned that Metropolitan Federal Bruce Byrum is president of First Interstate Bank in Spearfish at 1400 North Ave.
South Dakota Banker u June 2011 www.sdba.com 13
credit quality challenges, along with centralized secondary market A Change in Bank Ownership
policy and procedure changes. processing center at his branch. In January 2008, First Western
“In time, with a strong local In 2007, First Western Bank Bank was sold to First Interstate
economy and a talented, dedicated opened a second branch in Spearfish Bank. For the next 18 months, the
staff, the bank grew from the at 311 N. 27th Ave. to service the bank continued to operate under the
smallest to the largest of the four expanding business and housing name First Western Bank while First
commercial banks in Spearfish,” developments on the east side of the Interstate Bank policies and
Bruce reflected. city. The two branches in Spearfish procedures were incorporated into
“Another key factor in the bank’s and the processing center today the day-to-day operations. In
success was Paul Christen and John employ around 35 people. November 2009, the final changes
Johnson’s philosophy of banking. The bank has added services to occurred, including the merger of the
First Western Banks were operated its standard offerings, such as wealth two banks and the change to the
with a great deal of autonomy, management, trust services and cash name First Interstate Bank.
allowing bank presidents to react management. While First Interstate Bank is a
quickly to the local economy and “What makes us different is what large bank, Bruce said it has many
customer needs.” has allowed us to grow beyond our similarities to First Western Bank.
Bruce’s duties at the bank in competition, and that is the quality of Both banks were family-owned
Spearfish have been those of the our staff, their expertise and the community banks whose branches
bank president, head of the strong relationships that they have were operated with significant
Corporate Marketing Committee, built, and a banking model that autonomy, and the owners had a
serving on the Northern Hills ALCO allows us to be responsive to our strong belief in supporting their
Committee, as well as helping design customers and community,” Bruce communities through donations and
and manage the bank’s performance commented. foundation grants.
compensation program. All of the bank’s branches are First Interstate Bank is a multi-
In the early 1990s, Bruce located fairly close together state, $7.1 billion banking
established a real estate processing throughout the Black Hills area, organization headquartered in
center at the bank. Because of his however, they all have different Billings, Mont. Evolving from a
background in home loan markets, Bruce said. Spearfish’s single bank in Sheridan, Wyo., in
originations and processing, Bruce portfolio is commercial and retail, 1968, First Interstate Bank today
was asked to establish and manage a with little to no ag lending. operates 72 branches and more than
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100 ATMs in Montana, Wyoming
and South Dakota.
According to the bank’s
marketing department, First
Interstate remains a family business
guided by the values of its founder,
Homer Scott, Sr., who believed in
hard work, teamwork, fair dealing,
and walking the extra mile for the
customers and communities the bank
serves. These values continue to
guide second- and third-generation
members of the Scott family who
continue to lead the company
forward today.
“First Interstate Bank offers
higher pay scales, better benefits, and
more products and services. Thus,
we added staff versus layoffs, which
occurs in most mergers,” Bruce said.
“Overall, the merger was a positive Bruce and Becky Byrum and their children Cody and Meghan.
event for customers and staff.”
Services Department at Northern forward with the help of current
Life Outside of Banking State University. officers, directors and staff,” he said.
Bruce and his wife Becky, who is Bruce has initiated a South The SDBA has a lot on the table
also from New Rockford, N.D., have Dakota Banks Make a Difference with pursuing new opportunities for
been married since 1976. Becky is a project in Spearfish, which will the SDBIS; the many federal
retired out-patient therapist with include all local banks participating legislative issues; and offering
Catholic Social Services. She in a diaper drive this June. education, training and support to its
continues to do volunteer work and In addition to trail riding and member banks. As chairman, Bruce
enjoys showing her horse at local and horse camping, Bruce joked that he said he has a responsibility to work
regional quarter horse shows. serves as his wife’s groom during her with President Curt Everson and the
The couple has two children. quarter horse competitions. In his SDBA Board of Directors to prioritize
Their son, Cody, graduated from younger years, he did a lot of team efforts and resources for these and
Black Hills State University and roping. In his free time, Bruce also new issues this next year.
worked for Gov. Rounds and now is enjoys bird hunting, golfing reading, For the most part, Bruce thinks
deputy commissioner at the watching movies and hiking. the industry is doing a good job of
Governor’s Office of Economic addressing banking concerns. But, he
Development for Gov. Daugaard. Leading the SDBA Forward does feel the industry would be
Cody was married in 2009 to Rachel Bruce said he was inspired to get better served if it would speak with
Eddy of Spearfish. He recently involved in the SDBA by John one voice on legislative issues.
returned from Afghanistan where he Johnson, who served on the Board Bankers, he said, need to allocate
served a one-year deployment with and encouraged Bruce to attend more time to fighting the industry’s
the SD Army National Guard. SDBA meetings and events. During battles.
Their daughter, Meghan, is also a this time, Bruce realized the Like many bankers, Bruce has
recent graduate of Black Hills State importance of the Association. developed problem solving skills,
University. She has worked as a real “As I believe that banks have an and he gets great satisfaction from
estate loan processor/underwriter at obligation to support their preventing or fixing problems. In
First Interstate Bank for the past communities, I also feel that bankers today’s banking environment, there
three years. have an obligation to support and are many opportunities to prevent or
Bruce has served on a number of participate in the SDBA,” Bruce fix problems, and it is this challenge
local boards, including the Chamber explained. that keeps Bruce engaged.
of Commerce and Spearfish Bruce served two terms as a “Part of what keeps me going is
Economic Development. He is director on the SDBA Board of being part of what seems to be the
currently involved with Spearfish Directors before going through the routine day-to-day functions of the
Community Foundation, High Plains chairs. bank, but are major events in the
Western Heritage Center, Black Hills “The SDBA has had some lives of individuals or businesses
State University President’s Advisory outstanding chairmen over the years. such as buying that first home,
Council, and the Advisory Council It is on their shoulders that I stand as getting a new car, or starting or
for the Banking and Financial I do my best to move the Association expanding a business,” he said. u
South Dakota Banker u June 2011 www.sdba.com 15
Washington Update
Wanted: Bank Advocates
By Gov. Frank Keating
President/CEO, American Bankers Association
W
hen it comes to industry communicating the industry’s position on critical issues to
advocacy in Washington, D.C., elected officials and regulators with a strong, compelling
or in your state capital, one of voice. We’ve proven that through the more than 160,000
the worst things to be personally told by emails and letters bankers have sent to Congress on the
a lawmaker or a policymaker is, “I debit card interchange issue through ABA and the state
didn’t hear from any bankers on that.” bankers associations. And that’s just this spring.
We want to make sure that cannot Elected officials and regulators need to know where
happen. Ever. our industry stands. They should expect to hear from
Effective political advocacy means organization and bankers on hot-button issues.
relationships. It’s about getting to know the members of Every bank employee should know the important role
your congressional delegation and keeping them informed their bank plays in the economic life of their community.
about industry issues, key legislation and important votes. This unique perspective can become a valuable and
This is why we developed the ABA Bank Advocates trusted asset for policymakers whose decisions affect their
Program. This new grassroots program supplements our constituents – and your bank’s customers.
successful Direct Contact Bankers program, which is Our direction is to move forward – to be on offense.
made up of bank CEOs, presidents and chairmen who While not all lawmakers or policymakers will always
have built relationships with their members of Congress. agree with our industry’s positions, we will be respectful
We want to continue to increase our reach by and factual, but unrelenting in our political advocacy.
providing bank employees and directors with the tools I’m counting on all of you to join us to help make that
and resources to effectively represent our industry. We’re happen. u
encouraging employees and directors who are willing to
advocate on behalf of banking to sign up for the program. Gov. Frank Keating is president and CEO of the American
When it comes to political clout, there is strength in Bankers Association. You can contact Keating by email at
numbers. Together, we can play a key role in effectively fkeating@aba.com.
ank You2010-2011
Th SD Bankers Foundation
Board of Directors
Chairman Michael Keller, School of
Business, USD, Vermillion
2010 Lerdal Scholarship Winner
Kelli Wiedebush, Northern State
University, Aberdeen
Curt Everson, SDBA President, Pierre
Deb Gates, Foundation Executive
Director, SDBA, Pierre
Stephanie Gongopoulos, The First National Bank in
Sioux Falls
Steve Hayes, Dakota Prairie Bank, Fort Pierre
Dixie Hieb, Davenport, Evans, Hurwitz & Smith,
LLP, Sioux Falls
Boyd Hopkins, CorTrust Bank NA, Sioux Falls
Sharon Paranto, School of Business, Northern State
University, Aberdeen
Norbert Sebade, First Interstate Bank, Wall
16 www.sdba.com South Dakota Banker u June 2011
Ask the Appraiser
Ethics Rule – Conduct
By Sherry Bren
Executive Director, South Dakota Appraiser Certification Program
Using a Flawed Appraisal Report credible market data indicates otherwise, the appraiser’s
A client engages an appraiser impartiality, objectivity and independence appear to have
(Appraiser A) to appraise a property. been compromised. The ETHICS RULE clearly prohibits
Appraiser A is provided with a copy of such a practice. The Conduct section of the ETHICS RULE
an appraisal report prepared by includes the following statements:
another appraiser (Appraiser B) An appraiser must perform assignments with impartiality,
retained by the property’s owner. objectivity, and independence, and without accommodation of
Appraiser A finds significant errors in personal interests.
Appraiser B’s appraisal report. What should Appraiser A An appraiser must not perform an assignment with bias.
do? An appraiser must not advocate the cause or interest of any
State laws vary concerning appraisers’ duties in party or issue.
reporting other appraisers’ potential violations of USPAP. An appraiser must not accept an assignment that includes
Though USPAP does not specifically address appraisers’ the reporting of predetermined opinions and conclusions.
responsibilities when confronted by other appraisers’ An appraiser must not use or communicate a report that is
USPAP violations, it does address the ethical aspects of known by the appraiser to be misleading or fraudulent.
using misleading or fraudulent reports. While it is not An appraiser must not knowingly permit an employee or
unethical for Appraiser A to read Appraiser B’s appraisal other person to communicate a misleading or fraudulent report.
report, it is unethical to use it. The Conduct section of the The Management section of the ETHICS RULE also
ETHICS RULE states: states that:
An appraiser must not communicate assignment results in An appraiser must not accept an assignment, or have a
a report that is known to be misleading or fraudulent. compensation arrangement for an assignment, that is
An appraiser must not knowingly permit an employee or contingent on any of the following:
other person to communicate a misleading or fraudulent report. 1. the reporting of a predetermined results (e.g.,
Appraiser A fulfills the first part of this requirement opinion of value);
by not using Appraiser B’s appraisal in his own appraisal 2. a direction in assignment results that favors the
of the property. He fulfills the second part of the cause of the client;
requirement by pointing out to his client the misleading 3. the amount of a value opinion;
or fraudulent aspects of Appraiser B’s appraisal and 4. the attainment of a stipulated result (e.g., that the loan
advising the client against relying on that appraisal. closes or taxes are reduced); or
Appraiser A’s responsibilities beyond these actions are 5. the occurrence of a subsequent event directly related to
not a matter of USPAP. the appraiser’s opinions and specific to the assignment’s
purpose. (Bold added for emphasis)
Value of Opinions that Equal Contract Prices An appraiser must develop an opinion of market
I know appraisers who consistently conclude that value impartially and objectively. An appraiser who
the market value of any property they appraise is equal selects only data that complements a contract sale price or
to the contract sales price. In doing so, they facilitate analyzes data in a manner to purposefully support a
sales and financing of sales, which is apparently what contract sale price violates the ETHICS RULE.
keeps their clients happy. Is this a violation of USPAP?
A contract sale price can be a good indicator of a If you have an appraisal related question that you
property’s market value, and it may be logical and would like to have answered in the “Ask the Appraiser”
reasonable for the appraiser to conclude that they are the column, please submit it to Sherry Bren, executive director
same. However, this is not always the case. In some of the Appraiser Certification Program, 445 East Capitol
situations, a contract price will exceed what is typical in a Ave., Pierre, SD 57501, fax (605) 773-5369 or by email at
market. In other situations, a contract price will be less Sherry.Bren@state.sd.us.
than what is typical. A contract sale price, while a
significant piece of market data, must not become a target Notice: Public information regarding disciplinary
in an appraisal assignment. Rather, competent analysis of action taken against an appraiser is available upon written
relevant and credible market data must be the appraiser’s request to the address or email above. Include in the
basis for a market value conclusion. request for information the name of the appraiser and the
If an appraiser consistently concludes that the appraiser’s city and state of residence. (Disciplinary action
contract sale price of any property they appraise equals may include denial, suspension, censure, reprimand or
market value, particularly when a competent analysis of revocation of a certificate by the department.) u
South Dakota Banker u June 2011 www.sdba.com 17
Endorsed Vendor Spotlight
Central States Health & Life Co. of Omaha
Our History, Strength and Commitment
OUR HISTORY OUR STRENGTHS
Founded in 1932, CSO’s vision is to be the
Central States Health & leader in the debt protection
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(CSO) pioneered what innovative solutions and value
was then called to agents, creditors and their
Deferred Payment customers. We are uniquely
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Protection. Designed dual focus of extending
for borrowers, this plan traditional credit life and
of protection made the disability insurance products as
loan payments for the well as providing service and
insured when death or marketing support for debt
disability made it cancellation programs. Our
difficult. This protection solid history of successful business practice has positioned
was the first of its kind CSO with an exceptionally strong financial base.
in the Midwest. With more than 75 years in the business, CSO today
Through the years, CSO has experienced solid and supports more than 4,700 automobile dealerships and
consistent growth, becoming a leading writer of credit financial institutions and is a top provider of debt
insurance. The Fact Book of Credit Related Insurance 2009 protection products for the dealer market in the United
reports CSO as the sixth largest U.S. credit life and States. The number of in-force credit life and disability
disability writer based on 2009 direct written premiums. policyholders and debt cancellation addendum holders
With the expanded ability of financial institutions to offer exceeds 401,000. In addition, CSO processes more than
debt cancellation products to their customers, we 23,000 credit insurance certificates and debt cancellation
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another offering to our product portfolio. For year ending knowledge and skills required to extend superior service
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OUR COMMITMENT
CSO’s commitment to its business clients and insureds
is to provide exceptional service. We employ an industry-
focused team of administrators and professionals who
excel in their area of responsibility and provide
unparalleled service, including:
l A personalized “one call” approach through our
helpline that allows for customers to speak to a CSO
representative rather than an automated menu system.
Call us at 1-888-453-5125 from 7:30 a.m. to 5:00 p.m.
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l A call abandonment rate at 1.5 percent.
l 98 percent of calls are answered in less than 20 seconds.
l $1.99 million in benefits provided monthly.
l A five-day overall benefit turnaround.
l Training support built around several delivery systems
to meet our clients’ needs.
Family of Companies
P.O. Box 641668 l Omaha, Nebraska 68164-7668
1-888-453-5125 www.cso.com
18 www.sdba.com South Dakota Banker u June 2011
SDBA 2011 IRA School
September 7-9, 2011 n Clubhouse Hotel & Suites n Sioux Falls, S.D.
Overview Basic Agenda
IRAs still have unlimited potential! Let us help your staff l Overview of IRAs
to be better prepared for the future of IRAs. The South l Procedures to Establish IRAs
Dakota Bankers Association (SDBA) is offering its three- l Plan Agreement Changes in 2010 & Additional
day 2011 IRA School on September 7-9, 2011, at the Changes in 2011
Clubhouse Hotel & Suites in Sioux Falls, S.D. The school l IRA Amendment Update 2011
will cover: l Setting Up and Organizing Your Files (self audit)
l Traditional IRA (major emphasis) l Contribution Rules
l Roth IRA (major emphasis) l Tax Benefits
l Coverdell ESA l Bankruptcy Bill
l Health Savings Accounts l Saver’s Tax Credit
l SEP-IRA l Administering Distributions: Pre 59 1/2 , Post 59 1/2
l SIMPLE-IRA l FDIC IRA & Inherited IRAs
l Substantially Equal Periodic Payments
Transfers, Rollovers and Direct Rollovers
Why Attend l
l Recharacterizations (additional emphasis)
l Most comprehensive IRA course offered.
l Excess Contributions (additional emphasis)
l Learn new rule changes and reinforce existing IRA
l Taxation of Distributions from the Traditional IRA and
rules.
the Roth IRA
l Learn what it means to be in or out of compliance.
l IRA Tax Losses
l The opportunity to go more in-depth in all topics
l RMD Rules for Accountholders
versus attending any one-day program.
l RMD Rules for Beneficiaries
l The opportunity to ask more questions, share with
l Conversions
others and to go through real case problems.
l Reconversions
l IRS Reporting Duties – Changes in 2011 1099R & 5498
Who Should Attend l Procedure to Correct Previous Year’s 1099R & 5498
l New IRA Personnel: Quickest, easiest and most l SEP-IRAs
comprehensive way to get a new person trained in l SIMPLE-IRAs
IRAs plus CESAs and HSAs. l Health Savings Accounts (HSAs) (1-11/2 hours)
l Experienced Personnel: Much more thorough and l Coverdell ESA (1/2 hour)
comprehensive than a one-day seminar. This covers l Marketing Opportunities for IRAs
new materials and reinforces old materials, plus covers
transactions that occur infrequently. This is a must for New Items
IRA bank resource people. l Current Events: Proposed Legislative Changes
l Note: Even though you may have attended previous l Conversion Rule Changes: 2010 vs 2011/2012 & After
IRA schools, you will still benefit due to the many l Why or Why Not to Convert
changes in retirement programs, the complexity of l Fee Disclosures: Update
IRAs, the quantity of information, and reinforcement of l Reporting Rule Changes in 2011
existing rules and procedures. l Trust Beneficiary Rules
l Minors as Accountholders or as Beneficiaries
Daily Schedule l Exciting New Case Problems
8:15 am .............. Welcome, Introduction, Coffee/Rolls
8:30 am .............. Session Starts About the Instructor
10:00 am ............ Break Mike Nelson taught sales and marketing
10:15 am ............ Session Resumes for 13 years at Central Lakes Community
12:00 noon ........ Lunch College and from there started his own
1:00 pm .............. Session Resumes training company where he conducted
2:45 pm ............. Break insurance, real estate and securities
3:00 pm .............. Session Resumes training seminars. He presently develops
4:45 pm ............. End of Day financial training services for financial
institutions around the U.S. He holds BS and MS degrees
Notice: Please bring your vendor’s IRA forms to class from St. Cloud State University. Mike has always been the
as they will be a part of the school. SDBA’s most highly rated IRA instructor.
Training News
Trust Officers Gather for Conference in Fargo
By Dorothy Lick, NDBA Senior Vice President of Education Reilly from Natixis Global Associates on investment
M
ore than 70 trust officers from North Dakota, implications of global inflation and Sandy Styer of
South Dakota and Minnesota attended and 18 Trusted Advisor Associates on the keys to becoming a
companies exhibited at the 2011 Tri-State Trust trusted advisor. To wrap up the conference, Katherine
Conference held April 25-27 at the Ramada Plaza & Suites Wills of Northern Trust offered a look at Northern’s “A
in Fargo, N.D. State Bank & Trust SVP Bob Willer kicked Approach: Excellence in Execution.”
off the conference Monday evening with his presentation Mark your calendars for the 2012 Tri-State Trust
“The Go-Giver: A Little Story about a Powerful Business Conference, which will be held April 23-25 at the Ramada
Idea.” Each attendee received a copy of the book Plaza & Suites in Fargo, N.D.
compliments of Stewart Capital Advisors. Some comments from this year’s event included:
Tuesday morning, Dr. Quincy Krosby, chief market l “Well-run event. Great use of my time. Thanks.”
strategist for Prudential Financial, presented l “Very good speakers and nicely organized handout
“Understanding the Economy and Navigating the materials.”
Markets,” during which she stated that oil is the biggest l “Enjoyed Quincy (Krosby) the most, but all
wildcard in this economic recovery. Following Dr. Krosby, speakers were good. Very good conference.”
Steve Bigge of Keebler & Associates discussed the l “Always enjoy the economic recap and info on new
mathematics of gifting and inter vivos sales. regulations.”
After lunch, Federated Investors’ Eugene Maloney l “Very impressed with the quality of speakers and
gave an insightful talk on “What is a Fiduciary?” overall genuine ‘make you feel right at home’
Wrapping up the afternoon session were Alex Urbani attitude.”
from MainStreet Advisors on “The Prudent Investor Rule: l “Great participation by vendors.”
Placing Responsibility Before Returns” and Michael l “Best conference I have attended in the four years
Tschider of Goldleaf Partners, who provided an update on I’ve been coming.”
Department of Labor fee disclosure initiatives. l “Excellent conference. I enjoyed networking with
Wednesday morning featured presentations by David exhibitors and other attendees.” u
Dianne Harris,
First Dakota National
Bank, Sioux Falls, was
our
the winner of an exhibit Make y
own
hall grand prize. appen..
.
Home h
Make your own home happen...
Let Daakota
Let South Dakota Housing
Development Authority help
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with the First-time Homebuyer
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From left, Great Western Bank employees Mark Sivertson,
Sioux Falls; Rosanne Krier, Sioux Falls; and Scott Olson,
Watertown. www.sdhda.org
www.sdhda.org 1.800.540.4241 EQUAL HOUSING
OPPORTUNITY
OPPORTUNITY
20 www.sdba.com South Dakota Banker u June 2011
From the Executive Office...continued from page 5
l Submission of amicus briefs in support of TCF for disabled people, painted a local youth center in Sioux
National Bank’s lawsuit over the Durbin Amendment and Falls, cleaned up a run-down block of Yankton, seeded
the Federal Reserve’s proposed implementation. and landscaped around a new welcome sign in Tabor,
Passage of any measure which might be viewed by served a USD Veterans Club appreciation dinner in
any member of the U.S. Senate as mildly controversial Vermillion, spent a Saturday at Needs Anonymous in
normally requires 60 votes for passage. Also, no member Webster, and provided 100 volunteer hours in one day
of Congress relishes the prospect of having to chose painting at the Boys and Girls Club in Watertown.
among friends when they cast a vote. So, it is easy to Those are just a few of the highlights of the Banks
understand why passage of S. 575, Debit Interchange Fee Make a Difference emphasis for 2010. I want to encourage
Study Act of 2011, is anything but a certainty. bankers all across the state to join forces and make a
But hundreds of thousands of banker contacts have difference for the betterment of your communities in 2011.
been made with members of Congress via emails, letters, All it takes is for a couple of caring, ambitious bankers to
phone calls and personal visits. The Federal Reserve also start the ball rolling by reaching out to a broader group of
received more than 11,000 comment letters on its like-minded bankers within your community. Pretty soon,
proposed regulatory implementation scheme. Bankers are lots of ideas about what, how, who and when will form.
clearly engaged and are making a difference in the public Some people derive great satisfaction from collecting
policy debate in Congress. Our persistent efforts to expose items to help people in need. Others are more motivated
the shortcomings of this new law prompted Sen. Durbin to participate in projects that result in the production of
to chastise the ABA and by association any bankers who sweat on their brow. In either case, a community and its
dare to express their concerns. In a recent letter to the citizens in need benefit. Getting started can be the most
ABA, Sen. Durbin said, “I urge your association to stand difficult step. Call the SDBA if you need some help.
down your massive misleading lobbying effort which is
aimed at preventing the Federal Reserve from ever Banker Education and Training
coming forward with reasonable final regulations.” Since SDBA staff understand the problems that lower
when does any member of Congress have the right to tell interest earnings and regulatory pressures on service fee
any party with legitimate concerns about any issue that income can create for our member banks’ bottom lines.
they have no right to express those concerns? But at the same time, banks need to make ongoing
As I have been calling on bankers in the eastern part investments in your most valuable asset – your people. So,
of the state in recent weeks, I have heard several recurring we continue to strive to identify and deliver continuing
themes – high cost of regulatory compliance, concerns education content which provides great value at an
about ability to originate home mortgages in rural affordable price. Beyond the direct value we provide to
communities, mission and territorial expansion by our member bankers, I am happy to report SDBA
aggressive tax-exempt credit unions, and cherry picking education and conference offerings produced a solid net
by the Farm Credit System. While the current financial income of $145,756 in 2010, compared to $178,000 in 2009
picture for most of South Dakota’s ag producers is and $101,000 in 2008. In order to hold down banker
positive, corresponding weakness in loan demand and education related expenses, we continue to focus on
low rates of return on other bank investments is putting electronic avenues for marketing our education products
the squeeze on bank earnings. All of these factors together to our members. We are particularly focused on targeting
caused bankers to express concerns about the long-term emails to bankers most likely to have an interest in a
viability of the small, independent community banking particular subject area. We want to encourage bankers to
business model. The SDBA, our sister organizations in use the capabilities of our Web-based online banker
other states, the ABA and the ICBA work every day to contact/event management software, which provides
communicate the industry’s challenges to elected leaders bankers the ability to keep their own user-profile up-to-
and bank regulators alike. Political headwinds facing our date. Please check your email inbox to stay current,
industry are still strong, but we will do everything in our register for events and provide feedback upon completion
power to communicate your concerns and to push for of an SDBA course, conference or seminar.
statutory changes where they are necessary.
Wrap-Up
Banks Make a Difference 2010 Like most of you, I feel like I have been drinking out
If you look back at the January 2011 issue of South of a fire hose since Wall Street melted down in 2008. We
Dakota Banker, you will find a story and photos all feel the pressures created by congressional and
highlighting some of the community betterment projects regulatory second guessing of the business models used
which bankers undertook in 2010. Based on feedback from by community banks, money center banks and credit card
a host of nonprofit community groups, hundreds of banks alike. But, out of today’s challenges will come
bankers answered the call to collect basic needs items like tomorrow’s opportunities. Bankers are a resilient bunch of
diapers, baby supplies, coats, shoes, winter boots and eternal optimists who care about the success of their
more than a ton of non-perishable food. Bankers also customers and their communities. That is why I truly
raked yards of elderly people, provided moving assistance enjoy working on your behalf. u
South Dakota Banker u June 2011 www.sdba.com 21
Bank Notes/Classifieds
Dacotah Bank, Aberdeen Ag/Commercial Lender (Liberty National
Kristen Fauth has joined Dacotah Bank’s internal audit Bank, Sioux Falls, S.D.)
team as an internal audit manager. Fauth’s primary This is an extraordinary opportunity for the right
function is to conduct risk-based audits for the board of candidate to work for a leading national bank with a
directors and senior management in all bank locations and growing loan department. Responsibilities include
centralized bank functions of the company. Fauth following established procedures and policies in securing
graduated from Aberdeen Central High School and is a and analyzing commercial and agricultural loans,
1995 graduate of Northern State University with a minimizing potential loan losses through frequent review
bachelor of science degree and majors in accounting and of delinquency reports and changes of financial ratios that
finance. She brings more than 15 years of audit and could indicate potential losses, working to market new
accounting experience to Dacotah Bank. Her office is and existing products according to the bank’s strategic
located in the Midwest Building in Aberdeen. u plan, providing superior customer service and
contributing to an environment of teamwork and
excellence, through effective communication and
South Dakota Division of Banking, Pierre cooperation, and actively participating in cross-selling
Bret Afdahl has been named the bank services to new and existing customers.
director of the South Dakota Division Requirements include a bachelor’s degree and five-plus
of Banking. He has served as the years of related experience and/or training. Please submit
Division’s counsel and trust examiner resume to Carrie Nothdurft, Liberty National Bank, 3520
since 2006. Afdahl replaced Roger S. Louise Ave., Sioux Falls, SD 57106 or email
Novotny, who announced his carrien@libertynationalonline.com. Liberty National Bank
retirement in March. is an Equal Opportunity Employer. u
Bret Afdahl “An extensive search was conducted for
the director position. The best candidate ended up being Ag/Commercial Loan Officer (First Savings
from within the division, and I am excited for Bret to Bank, Britton, S.D.)
exercise his leadership capabilities and industry First Savings Bank in Britton, S.D., has an opening for an
knowledge in this new role,” said State Labor and ag/commercial loan officer. This is a great opportunity for
Regulation Secretary Pam Roberts. “Our team of bank and a motivated individual who wants to live in Northeast
trust examiners is extremely well-trained, intelligent and South Dakota. A minimum of three years lending
dedicated to their mission. Bret already plays a leadership experience and a bachelor’s degree in business, finance or
role for this team and is well-respected.” related area preferred. Strong analytical and
communication skills are required. Ag background a plus.
The Division of Banking is charged with the regulation Successful applicant must pass pre-employment screening
and supervision of state-chartered financial institutions. including credit history and criminal background check.
The director also serves as the executive officer for the Please submit resume to Brian Rabenberg, Branch
State Banking Commission. “I have worked with Bret President, First Savings Bank, PO Box 899, Britton, SD
Afdahl in my role as chairman of the Banking 57430 or email to brian.rabenberg@firstsavingsbanks.com.
Commission,” said Banking Chairman Jeff Erickson. “I am Equal Opportunity Employer. u
confident Bret is ready for this new challenge.” u
Place Your Listing
Submit Your Bank Note If you have a job opening at your bank or something to
If you are an SDBA member bank or associate member, sell, send your classified listing via email to
tell us about your new employees, promotions, ademers@sdba.com and we will post it in the South Dakota
community service projects, economic development Banker magazine and on the SDBA website. This service is
efforts, honors and landmark anniversaries. Email your free to member banks. The fee is $50 for non-members.
stories and photos to ademers@sdba.com or mail to: Alisa (150 word limit.) Questions, call Alisa DeMers, SDBA, at
DeMers, SDBA, PO Box 1081, Pierre, SD 57501. u (800) 726-7322. u
SDBA E-News
Would you like to receive a weekly electronic newsletter updating
you on industry news, training, SDBA events and other financial
services information? Create a profile at www.sdba.com.
22 www.sdba.com South Dakota Banker u June 2011
Educational Calendar
Seminars and Conferences
Upcoming Events l Games Trainers Play
SDBA/NDBA 2011 Annual Convention l Check Holds
June 5-7, 2011: Sioux Falls Convention Center and l Safe Deposit Webinar Series: Part 1 – Policies and
Sheraton Hotel, Sioux Falls Procedures
SDBA Technology Conference l The Insider Threat – Don’t Look the Other Way
Sept. 27-28, 2011: Sioux Falls l The New World of RESPA – What Lessons Have We
IRA Update Learned? Clues to Effective Compliance
Oct. 18, 2011: Black Hills Community Bank, Rapid City l Compliance Perspectives: A Monthly Update
Oct. 19, 2011: SDBA Office, Pierre
Oct. 20, 2011: Ramkota Inn, Sioux Falls l Call Report Preparation Webinar Series: Part 3 – Risk
Based Capital
HSA (half day) and Reporting, Compliance & Forms
(half day) l Dynamite Training Secrets for Everyone
Dec. 5, 2011: SDBA Office, Pierre l Legal Liabilities When Check Fraud Occurs
Dec. 6, 2011: Ramkota Inn, Sioux Falls l Global Cash Flow: What, How, Why
IRA Basics l Safe Deposit Webinar Series: Part 2 – Legal Documents
Jan. 10, 2012: SDBA Office, Pierre and Issues
Jan 11, 2012: Ramkota Inn, Sioux Falls
Schools
June Webinars Dakota School of Banking
The following are available as live webinars and/or June 12-17, 2011: Jamestown, N.D.
recorded seminars. For more information and additional
SDBA National School for Beginning Ag Lenders
webinars go to www.sdba.com, Calendar of Events, and
June 20-23, 2011: Black Hills State University,
click on the “Search for Trainings” page.
Spearfish, S.D.
l Regulation Q Repeal
Graduate School of Banking at Colorado
l Best Practices in Contract Negotiations for Third Party July 10-22, 2011: Boulder, Colo.
Banking Providers
Graduate School of Banking at Wisconsin
l Introduction to Financial Planning Products Aug. 7-19, 2011: University of Wisconsin-Madison
l An Eleemosynary State of Mind: What Charitable GSB Human Resource Management School
Techniques are Hot and What are Not Aug. 7-12, 2011: University of Wisconsin-Madison
l Brave New World: Emerging M and A Strategies for GSB Advanced Human Resource Seminar
Community Banks Aug. 9-12, 2011: University of Wisconsin-Madison
l Commercial Loan Documentation – Part 1 GSB Senior Management Seminar
l Understanding the Business of Banking – Factors That Aug. 14-19, 2011: University of Wisconsin-Madison
Drive Profitability School of Trust & Financial Services
l Underwriting Tax Returns for Residential Loans Aug. 22-26, 2011: Omaha, Neb.
l Call Report Preparation Webinar Series: Part 1 – Advanced Trust Administration School
Operational Schedules Aug. 23-25, 2011: Omaha, Neb.
l Paper Checks, Remote Deposit Capture, ACH and SDBA IRA School
Electronic Transfers: What Law Applies and Who is Sept. 7-9, 2011: Clubhouse Hotel & Suites, Sioux Falls
Liable? Advanced School of Banking
l Creating and Executing Your Branch Business Plan Oct. 3-7, 2011: Grand Island, Neb.
l Increase Your Safe Deposit Box Income GSB Financial Managers School
l Regulation O: Lending to Insiders Oct. 9-14, 2011: University of Wisconsin-Madison
l 2011 Appraisal Regulations Update
l Commercial Loan Documentation – Part 2
l Officer Calling: Prospecting, Preparing & Presentation Program and registration information is available six to
eight weeks before each conference. For complete registration
l Call Report Preparation Webinar Series: Part 2 –
information, visit www.sdba.com.
Lending Schedules
South Dakota Banker u June 2011 www.sdba.com 23
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