The Missouri Banker January February 2024 : simplebooklet.com

ContentsThe Missourifacebook.com/mobankersfacebook.com/monextgenbankers@mobankers@mobankersMissouri Bankers AssociationFrom our ChairmanOur Connection to Agriculture. ............................................................. 2From our President and CEOBe Vocal! Ask Ofﬁcials to Co-sponsor ACRE .................................................. 5American Bankers Association PerspectiveAgainst a Rising Tide of Regulation, Banks Must Row Together ................................ 6Department NewsGovernment Relations:Robust Agenda Tops MBA’s State Legislative Priorities..................... 8Legal: Let’s Push Pause to Find Our Bearings ................................................. . 9Compliance: Treasury Issues New Rule Regarding Treasury Checks ............................ 10Member Services: MBA Programs Aid Bankers in Their Professional Development .............. 11MBA VEBA: What to Know About Section 125 Flexible Spending Accounts ..................... 12Next Generation in Banking: Who on Your Team Would Benefit From NextGen? ................ 13 Cover StoryBeyond the Horizon ....................................... 14Banks assist ag customers in weathering challengesGuest CommentaryVisual Audits Offer an Ounce of Prevention for Customers, Banks .............................. 18New CRA Rule Expands Evaluation Areas That Could Impact Bank Business Strategy ........... 20Farm Income Can Push and Pull on Rural Economies ......................................... 22Around the StateMBA Seg4Vets Donations Reach Milestone .................................................. 24 Scenes from Executive Management Conference .............................................. 252024 MBA School of Banking ................................................................ 26Achievements .............................................................................. 28MBA Welcomes New Staff ................................................................... 29MBA Foundation Awards Five InternConnect Scholarships .................................... 29Jackson Hataway, PublisherLori Bruce, Editor573-636-8151The Missouri Banker (USPS Number000044, ISSN Number 0893-5637)is published six times a year by theMissouri Bankers Association, 207E. Capitol Ave., Jefferson City, MO65101. Second-class postage is paid atJefferson City, Mo. Copyright© 1998 bythe Missouri Bankers Association. Allrights reserved. POSTMASTER: Sendaddress changes to The Missouri Banker,P.O. Box 57, Jefferson City, MO 65102.Opinions expressed in any signed articlein The Missouri Banker are those of theauthor and should not be construed asthe viewpoint of the editors or of theMissouri Bankers Association. Neithershould information provided in TheMissouri Banker be construed as legaladvice. The Missouri Banker does notprovide legal advice, nor does it take theplace of legal counsel hired by ﬁnancialinstitutions. While this publicationmakes a reasonable effort to establishthe integrity of advertisers, it doesnot endorse advertised products orservices, unless otherwise so stated.This issue may contain legislativeadvertising. Advertising copy is generallysegregated from news and otherinformation.Address ChangesSubmit changes for The Missouri Bankerto mba@mobankers.com.CONNECT WITH MBA!For the latestnews, visitmobankers.com. THE MISSOURI BANKER 1

Page 4

Our Connection to AgricultureAdrian Breen, MBA Chairman The Bank of Missouri, PerryvilleBRRRRR!!!!! Old Man Winter certainly made his presence known in Missouri as we began the New Year. The frigid cold and feels-like temps of negative 27 certainly make you long for heat waves in the 90s.Weather affects us all in one way or another. However, there’s one particular group signiﬁcantly impacted by the weather every single day of the year — farmers. There’s not a day that goes by that a farmer isn’t thinking about the weather, and this extreme cold spell reminded me of the volatile weather conditions that farmers face year-round in protecting their livestock and crops. Just as farmers watch over their acreage and animals, bankers are doing the same for them. This issue of The Missouri Banker takes a look at banking’s role in agriculture. If you are already tuned out because you think ag banking isn’t part of your wheelhouse, just consider this.• Missouri ranks second in the nation with the number of farms — 95,000.• Nearly 460,000 people across Missouri are employed in agriculture.• Missouri boasts a $93.7 billion ag industry.These ﬁgures from the Missouri Department of Agriculture illustrate the signiﬁcant economic impact of agriculture throughout our state. Any ﬁnancial institution in Missouri is tied directly or indirectly to Missouri agriculture.Turn to the center of the magazine to learn more from ag industry experts about what bankers need to know to help their ag customers with their operations this year. Learn what these forecasts mean for farmers and the economies for our communities, state and nation. If you want to know more about ag banking, I encourage you to attend MBA’s ag seminar March 13 in Columbia. See mobankers.com for details and to register.Just as farmers hit the ground running every day to ensure efﬁciency in their operations, bankers also have that same drive in delivering exceptional service to their customers. MOBUCK$, the state’s From our ChairmanJust as farmers hit the ground running every day to ensure efﬁciency in their operations, bankers also have that same drive in delivering exceptional service to their customers. “2 mobankers.com

Page 5

Our Connection to AgricultureMBA’s podcast explores topics relevant and interesting to bankers. Our fun, engaging conversations help you stay ahead of what’s happening in banking. Our Two Cents with MBA is on MBA’s website, iTunes, Apple Podcasts, Google Podcasts and Spotify.linked deposit program that provides low-interest loans to farmers and small businesses, began accepting applications Jan. 2. Administered by the ofﬁce of the Missouri state treasurer, MOBUCK$ had been closed since May 2023 because loan demand had reached the program’s statutory cap of $800 million. Missouri bankers welcomed the re-opening of the application portal, but that sentiment soon faded. Six hours after it began accepting MOBUCK$ applications, the treasurer’s ofﬁce was forced to stop accepting applications as demand exceeded the availability of funds.These are challenging economic times for many, especially farmers. Their ability to access low-interest loans is vital to sustaining their livelihoods and ensuring Missouri remains a vibrant landscape for the ag industry. There is legislation in both the Missouri Senate and Missouri House of Representatives that would increase the MOBUCK$ cap to $1.2 billion. This is a priority bill for MBA this session, and your help is needed to get this measure passed and to the governor’s desk.Our association — and your customers — need you to discuss the legislation with your state lawmakers. You can do that in your communities, or you can bring several of your board members and staff to Jefferson City for an MBA Target Banker visit. MBA staff will brief you on the bills of importance to our industry and will accompany you to the Missouri Capitol to meet with your state senator and representative. Your conversations with your lawmakers are crucial — you are the ones who can tell them how the legislation will directly affect your customers, their constituents. Visit mobankers.com to schedule your Target Banker visit or contact David Kent or Emily Lewis for more details.I certainly hope that the bitter cold is behind us, but I’ve been a Missouri resident long enough to know this isn’t always the case. So do Missouri farmers — they’ve battled extreme weather for decades. Each season brings new challenges and opportunities for farmers, and the same can be said for bankers. Although the situations will vary between farmers and bankers, both share one important aspect — their response could determine what they yield. Live Well. Stay Well. Bank Well! “Each season brings new challenges and opportunities for farmers, and the same can be said for bankers. Although the situations will vary between farmers and bankers, both share one important aspect. THE MISSOURI BANKER 3

Page 6

Page 7

Be Vocal! Ask Ofﬁcials to Co-sponsor ACREFor several years, MBA has been a leading voice in the pursuit of the ACRE Act (Access to Credit for our Rural Economies, formerly ECORA) at both the state and federal levels. This bill would allow banks to deduct the interest income on agriculture loans and rural housing loans from state and/or federal taxes and thereby offer borrowers lower, more competitive rates. Given that we are likely to remain in a higher-for-longer rate environment, the relief that ACRE promises for borrowers could be signiﬁcant and would certainly enhance rural borrowers’ access to credit.As with any bill, the process from ﬁling to passage takes time. I am thrilled to say we are ﬁnally beginning to make major progress on the federal level. The federal ACRE bill has 53 co-sponsors, with the recent Jackson Hataway, President and CEO, Missouri Bankers Associationadditions of two Missouri delegates — Reps. Sam Graves and Ann Wagner. Graves chairs the House Committee on Transportation, and Wagner sits on the House Financial Services Committee. These are important positions for Missouri’s delegation and the broader Republican conference in Congress. I want to thank them both for showing their support for Missouri’s rural populations and for the banks working tirelessly to serve those communities.I also hope their voices will inspire other members of Missouri’s congressional delegation to join as co-sponsors to ACRE. Reps. Eric Burlison, Mark Alford and Emmanuel Cleaver have rural communities within their districts that would see immediate beneﬁts from ACRE.Perhaps the most important element in this bill is the role of Rep. Jason Smith, who chairs the all-important House Ways and Means Committee. Smith has a signiﬁcant number of rural areas in his district, and he co-sponsored the legislation in a prior Congress. However, the ACRE Act would actually need to move through Ways and Means because it is a tax bill. For that reason, Smith cannot co-sponsor the bill, but he can allow it to be part of a committee hearing, subcommittee hearing or ﬁeld hearing. This would be a crucial step in bringing the bill to the House ﬂoor and into the lives of Missourians.We will have to see progress on the Senate side as well. A Senate companion bill, led by Sens. Jerry Moran, R-Kan., and Angus King Jr., I-Maine, has been ﬁled. Sens. Josh Hawley and Eric Schmitt must show their support for the most important sector in our state — agriculture — by ensuring that relief is passed on to those producers, suppliers and even workforce members who keep our state’s economy strong.My ask of you is this — be vocal. Contact your U.S. senators and your representative and ask them if they have considered co-sponsoring the ACRE Act. Whether that is a phone call, email, text, social media post or passing conversation with a staff member at a local event, every reminder that they must support the agriculture economy of Missouri makes a difference for our customers and communities. From our President and CEO THE MISSOURI BANKER 5

Page 8

Against a Rising Tide of Regulation, Banks Must Row TogetherRob Nichols, President and CEO American Bankers AssociationWhenever a new election cycle comes along, it’s not uncommon to hear pundits make mention of “red waves” or “blue waves” denoting potential power swings in Congress. But as bankers contemplate the future of our country and the policy environment that will shape the future of our industry, there’s another wave that we need to talk about: a tsunami of complex regulation that’s hitting the banking sector as we speak. To be sure, the tide turned quickly: last year’s turbulent spring ignited a rulemaking frenzy at the banking agencies. Suddenly, new proposals sprang up to increase bank capital levels, impose a new long-term debt requirement and make the resolution planning process more complex. Simultaneously, the Consumer Financial Protection Bureau imposed long-awaited small business reporting requirements under Section 1071 of the Dodd-Frank Act — which went far above and beyond what was outlined in the statute. The Federal Reserve issued a proposal to cap interchange fees under Regulation II, and the Federal Deposit Insurance Corporation is now pursuing signiﬁcant changes to its corporate governance guidelines. Against all that, the agencies ﬁnalized a long-awaited update to the Community Reinvestment Act framework — a staggeringly complex, 1,500-page ﬁnal rule that creates signiﬁcant new requirements that have the potential to fundamentally alter banks’ business strategies. Meanwhile, in Congress, banks are facing the resurgent threat of the so-called “Credit Card Competition Act,” which would apply Durbin Amendment-like provisions to credit cards — the equivalent of lawmakers taking money from banks and putting it into the cash registers of mega retailers. Taken together, these policies place a tremendous cost and compliance burden on banks of all sizes — at a time when they are already facing a tough operating environment because of a protracted period of high interest rates and ongoing geopolitical tensions. These policies also will have devastating effects for consumers. Banking is, after all, a business. For banks to offer the full range of ﬁnancial products and services to meet the needs of communities, they need to be proﬁtable and have an operating environment that supports growth. The current regulatory landscape will do the opposite. Banks that are already considered well-capitalized by regulators’ own admission will be forced to hold even more capital in reserve — which means less capital will be available to lend to the local small business looking to expand or to the young family looking to buy their ABA Perspective6 mobankers.com

Page 9

ﬁrst home. Simultaneously, changes to the fee income streams upon which banks have long depended could spell the end of free or low-cost checking products and popular rewards programs that consumers value. What’s perhaps most concerning, however, is the fact that regulators don’t seem to understand the full impact of their actions. As we observed with the Reg II rulemaking and the so-called “Basel III endgame” proposal, regulators are failing to adequately assess the potential costs of the individual regulations on banks and consumers — let alone contemplate what the cumulative impact of all these rules would be. ABA is sounding the alarm. We need to make sure policymakers in Washington — from members of the administration to lawmakers in Congress to the regulators holding the rule-writing pens — understand that regulatory burden has a real-world cost, not just for banks, but for consumers, small businesses and the American economy. If you’re reading this, I urge you to help us tell that story. Join our Bank Ambassador program to rekindle relationships with your congressional delegation and help educate policymakers about banking. Stay informed and send a letter about an issue that will affect your bank through ABA’s grassroots platform, SecureAmerican Opportunity.com. Make a plan to come to the nation’s capital in March for the ABA Washington Summit and tap a colleague or two to come along. The sobering reality for banks right now is that rougher seas are likely ahead, but our best hope is to row together. Email Rob Nichols at rnichols@aba.com. To learn more about the Bank Ambassador program, email ABA’s Laura Lily at llily@aba.com. “We are sounding the alarm. We need to make sure policymakers in Washington understand that regulatory burden has a real-world cost for consumers, small businesses and the American economy.MBA SPRING 2024 EDUCATION EVENT HIGHLIGHTSAgriculture SeminarMarch 13Courtyard by Marriott, ColumbiaNEW CONFERENCE! Human Resources and Marketing ConferenceMarch 19–20Holiday Inn Executive Center, ColumbiaOperations, Security, Technology Conference April 10–12 Margaritaville Lake Resort, Osage BeachFDIC Directors College April 16 Holiday Inn Executive Center, ColumbiaADDED FOCUS! Lending, Credit and Finance ConferenceMay 8–9Holiday Inn Executive Center, ColumbiaMBA’s 134th Annual ConventionJune 4–6 Hilton Branson THE MISSOURI BANKER 7

Page 10

Department NewsThe Missouri General Assembly kicked off the legislative session Jan. 3, and the Missouri Bankers Association has a robust legislative agenda for the 2024 session. A few of those bills are highlighted in this article. Let’s start with a bill we oppose — credit union expansion. The Missouri Credit Union Association has ﬁled legislation in both the Missouri House of Representatives and the Missouri Senate to expand credit union ﬁeld of membership. This is the second time in as many years that the credit unions have ﬁled this bill. The legislation didn’t receive a hearing in the 2023 session thanks in large part to the numerous bankers who voiced their concerns to their lawmakers. We must remain vigilant if we want to prevent this bill from moving forward. Most importantly, we must continue to educate legislators about the differences between a bank and a credit union — most notably the tax advantages credit unions receive by way of a federal tax exemption! Please take any opportunity you have — whether it’s back at home or in Jefferson City — to ask your state lawmakers to oppose credit union ﬁeld of membership expansion. Don’t hesitate to reach out to MBA’s government relations staff if you need additional information.There are several bills MBA supports, including expanding the cap for MOBUCK$, the state’s linked deposit program. If your bank participates in MOBUCK$, then you already know GOVERNMENTAL RELATIONSRobust Agenda Tops MBA’s State Legislative PrioritiesBy David Kent, Senior Vice Presidentthat the cap has been reached twice in the last six months. It reopened Jan. 2 but was forced to shut down after just six hours because the demand exceeded the availability of funds. MBA strongly supports legislation that would increase the cap on MOBUCK$ from $800 million to $1.2 billion, ensuring the program can remain open and viable. We thank Rep. Terry Thompson, R-Lexington, and Sen. Sandy Crawford, R-Buffalo, for ﬁling the bills.Another measure supported by MBA would allow lenders to pass through the cost of a credit report for a consumer loan to the customer. This will provide uniformity across other types of loans and transparency for the customer. We thank our bill sponsors, Rep. Michael O’Donnell, R-St. Louis, and Crawford for sponsoring this legislation.Other bills we are supporting include the following.• updating the money transmitter law to the Conference of State Bank Supervisors model uniform language• banning local governments from imposing their own moratoriums on eviction proceedings• adopting the 2022 updates to the Uniform Commercial CodeWe encourage all of you to register for a Target Banker visit at mobankers.com and help us educate lawmakers on the issues that are important to our industry. For the latest on activity in the Missouri General Assembly, read the MBA Legislative Update. To receive this weekly e-newsletter, send your contact information to mba@mobankers.com. Stay in the Know8 mobankers.com8 mobankers.com

Page 11

Numerous executive orders from President Biden present a “whole of government” mobilization to promote “competition.” The orders also centralized control within the White House staff and select agency ofﬁcials to direct all federal departments and agencies to implement the president’s directives.For ﬁnancial services, the executive orders combine with continued implementation of Dodd-Frank Act mandates by the Consumer Financial Protection Bureau. The CFPB commands unlimited ﬁscal resources, and the ofﬁce holds unchecked powers. Current CFPB Director Rohit Chopra has achieved dominance over other bank supervisory and federal agencies, bringing banks under a collective economic system that is commoditizing banking services. Commoditization is primarily taking the form of control over price and product terms, such as proposals on debit interchange price caps and overdraft fee caps, the relentless branding of longstanding and regulated banking services as “junk fees” and excessive cost mandates through regulation. Competition, innovation and differentiation have been displaced from the market. Banks can no longer price risk and opportunity for many services because doing so presents the specter of charges of unfair or abusive conduct.Collectivism is achieved by regulatory ﬁat and supervisory practices that arbitrarily erode the property interests of investors and depositors, eliminating market competition by dictating product terms and pricing.In a Dec. 19, 2023, letter to Biden, American Bankers Association President Rob Nichols called out the “extraordinary conﬂuence of new and existing regulations” that negatively impact the economy and disrupt banking services for customers. These matters are driving consolidation and the loss of bank charters. Nichols listed several examples: bank capital regulations, mammoth Community Reinvestment Act changes, payments rules that undermine security and impose price caps, and a potential re-purposing of Federal Home Loan Banks to undermine bank mortgage lending. Nichols called for a pause to allow the Financial Stability Oversight Council to evaluate the substantial costs and economic impact of the various regulatory proposals. LEGALLet’s Push Pause to Find Our Bearings By Keith Thornburg, Vice President and General CounselI have been working with implementation of the Dodd-Frank directives since 2011. These are too numerous to list but span all matters from consumer protection to Basel III risk-based capital standards. The cumulative impact is to commoditize banking and inhibit innovation, interfere in customer relationships and undermine banks’ ability to meet customers’ needs and serve their communities. The market is replaced by Washington, D.C., central planning, as shown by the ﬁnal two sections from Dodd-Frank taken up by the CFPB. Section 1071 on small business lending data collection undermines the last bastion of relationship banking. The breadth and detail of small business lending data collection will be chilling to customers, and the data will be used by the CFPB to drive banks toward formulistic lending and pricing. Commoditized government-approved and ﬁt-the-box lending will displace relationship banking. Section 1033 requires banks to provide their ledgers to ﬁnancial technology companies free of charge. This is promoted as open-banking, enabling customers to access value added-ﬁnancial services from competitors and even shop your bank against others. This reduces banking to a utility status. An underlying fallacy of Section 1033 is an implicit assumption that the bank’s account ledgers belong to the public. This is not true. A customer is free to sell or share their account ledger, but the customer ledger is an old-fashioned checkbook register or personal accounting software owned by the bank. Banks have successfully provided frictionless services with internet and mobile banking services that Washington decided customers don’t need to maintain an accounting and record of their deposits and payments. Instead, they should be deemed to have an ownership interest in the bank’s accounting system. This will force banks to incur new cybersecurity risks and costs to build a data interface and vet vendors that customers have decided to sell or give their data. It is time for a pause to ﬁnd our bearings. THE MISSOURI BANKER 9

Page 12

Department NewsCOMPLIANCETreasury Issues New Rule Regarding Treasury ChecksBy Carol Barnett, Senior Vice President of Compliance ServicesThe Bureau of the Fiscal Service of the U.S. Department of the Treasury, published a ﬁnal rule in the Nov. 1, 2023, Federal Register titled “Indorsement and Payment of Checks Drawn on the United States Treasury.” The rule became effective Dec. 1, 2023. Although many federal agency payments are conducted electronically, there are still millions of paper Treasury checks issued every year.Background — Fiscal Service or an agency may put a ‘‘stop payment’’ on a check payment because the payee submitted a check claim (i.e., claimed that the check was either lost or stolen), because the certifying agency realized the payment was incorrect or because it was otherwise improper. When a canceled or ‘‘stopped’’ check is subsequently paid, this leads to what is known as a payment over cancellation. POCs are improper payments, which can amount to $100 million or more each year.Fiscal Service Enhancements — To combat this issue, system enhancements are designed to enable Fiscal Service to provide check return information to banks through channels within the time periods prescribed by Funds Availability Regulation CC, as opposed to previous longer delays.Reasonable Efforts — The rule in 31 CFR 240 states that a bank generally is not liable for a POC if the bank has taken “reasonable efforts” to ensure the check is authentic. This includes a requirement that banks wait for check return information within the time periods set out by Regulation CC to help verify that a Treasury check is valid. In those instances where a bank has taken reasonable efforts but check return information for a POC on a properly presented check is not transmitted to the bank before the funds availability timeframe speciﬁed in Reg CC, the bank would not be liable for releasing the funds associated with the Treasury check.TCVS — In addition to receiving check return information through existing channels, a bank may choose to obtain early notice regarding the validity and authenticity of Treasury checks by using the Fiscal Service’s Treasury Check Veriﬁcation System. Although banks will not be required to use TCVS, the use of TCVS may allow banks to catch canceled, duplicate or other problematic checks at the time of presentment, as opposed to after presentment but before the bank makes deposited funds available for withdrawal.Review Policies and Procedures — Banks will want to review their funds availability policies and procedures regarding Treasury checks to ensure that the bank is not assuming unnecessary risk by giving out funds on Treasury checks without following the “reasonable efforts” standard. Banks that are making funds available sooner than the time periods required by the regulation risk liability for losses that might occur. This article is for information purposes and does not contain or convey legal advice. The information should not be used or relied upon in regard to any particular situation without consultation with your bank attorney. MBA Compliance Services and its Compliance Force program offer various programs to aid banks with compliance needs. For more information, call 573-636-8151.MBA Compliance Update provides the latest news and information on banking compliance, as well as MBA educational opportunities. To receive this e-newsletter, send your contact information to mba@mobankers.com. Stay in the Know10 mobankers.com10 mobankers.com

Page 13

MEMBER SERVICESMBA Programs Aid Bankers in Their Professional Development By Cheri Messerli, Senior Vice President of EducationMBA is excited to kick off its conferences and educational programs for 2024 this spring! Several upcoming programs cover a variety of areas and topics to aid your teams in their professional development. Visit mobankers.com for more details and to register.HUMAN RESOURCES & MARKETING CONFERENCE — MARCH 19-20 — COLUMBIADesigned exclusively for bank HR and marketing professionals, this new MBA conference highlights trends, strategies and challenges in the ever-evolving world of HR and marketing. Each day will begin and end with general sessions, and the rest of the time will be devoted to tracts focusing exclusively on HR and marketing. Attendees will gain fresh perspectives and practical knowledge to enhance recruitment and retention initiatives and drive growth, creativity and customer satisfaction.General sessions focus on employee engagement, AI in banking, competitive culture and transformation. The HR tract highlights onboarding, employee beneﬁts, hot topics and legal cases. For the marketing tract, sessions dive into digital strategies, marketing and compliance, department/team structure and strategic planning.OPERATIONS, SECURITY, TECHNOLOGY CONFERENCE — APRIL 10-12 — OSAGE BEACHThis popular MBA conference brings together bankers from across the state to learn from national experts on the latest issues and trends surrounding bank security and technology and its impact on your operations. Presentations throughout the three-day program focus on third-party risk management, cyberattack prevention, generative AI, FedNow integration, digital banking, workplace violence and fraud prevention, among others. The conference features dedicated ﬁntech showcases in which trade show participants demonstrate their latest services and products that will assist your bank with its operations.FDIC DIRECTORS COLLEGE — APRIL 16 — COLUMBIAThe 2024 Directors College presented by the Federal Deposit Insurance Corporation features the latest information from FDIC subject matter experts on issues relevant to all bank directors, with an overall theme of corporate governance. The seminar is designed for bank management teams, directors, signiﬁcant shareholders, senior ofﬁcers, new directors, advisory directors and compliance ofﬁcers. Sessions will address accounting, ag loan analysis and classiﬁcation, capital markets hot topics, consumer protection, cybersecurity and insider abuse prevention.MBA encourages bankers to consider this unique opportunity to interact with your bank’s regulators and enhance your board’s experience and knowledge. Bankers seeking to enhance their leadership abilities and knowledge of the banking industry should apply for MBA’s 2024-25 Banking Leadership Missouri program. The 12-month program is designed speciﬁcally for those in a management role or who have potential for senior management. It focuses on developing a solid understanding of the banking industry and the skills necessary for leadership that participants can put into practice immediately. Many graduates now lead their banks in various capacities, including CEO, president, vice president, director and manager.The program begins in June 2024 and concludes June 2025. A maximum of 25 Missouri bankers will be selected to participate. Applications are due Friday, May 3. THE MISSOURI BANKER 11

Page 14

Department NewsViews from Washington, D.C.MBA VEBAWhat to Know About Section 125 Flexible Spending AccountsBy Lesley Weaver, Director of Business Development, Insurance ServicesEmployees with health care ﬂexible spending accounts need to consider how to spend any unused funds or risk losing them. FSAs are attractive ways to save money on medical expenses and services while reducing tax liabilities. However, many employees do not understand FSA’s “lose it or use it” theory and end up forfeiting money. The Employee Beneﬁt Research Institute estimates more than 40% of workers with FSAs left money on the table in recent years, losing on average between $339 and $408 a year.It is important that employees understand FSAs to take advantage of their accounts. For employers, it is important to communicate these beneﬁts so employees have adequate information to make ﬁnancial decisions that can lead to long-term savings. FSAs are an effortless way for employees to contribute to their own health and mental well-being while saving tax dollars. Employers can play a key role to help ensure their employees spend (and not lose) funds. Here are some tips.• Make it easy for employees to know their FSA balances. Your spending account provider may send out statements and/or provide notiﬁcation when employees must claim their unused contributions. • Inform employees about your FSA plan’s “run-out” period that provides extra time in 2024 to be reimbursed for 2023 expenses.• If your plan allows carryover of unused 2023 FSA funds for use in 2024, communicate that timeline to employees. Per the IRS, FSA plan participants can carry over up to $610 from 2023 to 2024 (20% of the $3,050 FSA maximum contribution for 2023), if their employer’s plan allows it. • If your plan has a “grace period” that allows employees extra time to use 2023 FSA funds in 2024, notify employees.• Ensure employees know FSA funds can be used for eligible expenses for their spouse and/or child(ren), even if they are not covered under the employee’s medical plan. Examples follow.• dental and eye care, including eyeglasses, reading glasses, contact lenses, eye drops and contact lens solution• over-the-counter medicines • thermometers, bandages and ﬁrst aid kits• pregnancy tests, breast pumps and baby monitors• allergy medicine• Remind employees to look at labels when purchasing health care items. Some stores tag certain items as “FSA Eligible,” and receipts also may note what is “FSA Eligible.”MBA VEBA’s Section 125 plan allows employees to withhold a portion of their salary on a pre-tax basis to cover the cost of qualifying insurance premiums, medical and dependent care expenses. Employees can be reimbursed — tax-free — during the year for qualiﬁed health care or daycare expenses from this account, increasing their spending power and tax savings. Employers enjoy a reduction in payroll tax liability as FICA taxes do not have to be paid on these deductions. Your business can save 7.65 cents for every dollar contributed. MBA VEBA offers three different beneﬁts through its Section 125 Cafeteria Plan — Premium Only Plan (POP), Flexible Spending Account (FSA) and Dependent Care Assistance Plan. Implement just one or any combination of these plans. MBA VEBA provides the following administrative services.• plan documents and amendments or changes as required by changes in law or regulations• virtual educational support for explaining Section 125 Plan beneﬁts to employees• claim veriﬁcation and processing• direct assistance for claim inquiries• direct deposit To learn more about the Section 125 Cafeteria Plan through MBA VEBA, contact Lesley Weaver or Tina Woehr at 573-636-8151, or visit mobankers.com. 12 mobankers.com12 mobankers.com

Page 15

Who on Your TeamWould Benefit FromNextGen?More than likely, you’veprobably heard the sayingthat if you give a man a ﬁsh,you feed him for a day but ifyou teach a man how to ﬁsh,you feed him for a lifetime.I was thinking about this interms of the opportunitiesavailable through MBA’sNext Generation in Banking.This group encompassesa diverse range of bankstaff — from those new tothe industry to those withmany years of experience.Although members ofNextGen may be at differentstages in their careers, theyall have a common goalto develop their skills andknowledge to enhanceservices for their customersand communities.To achieve that goalrequires education andexperience. That’s whereMBA and NextGen comeinto play. MBA provides anabundance of educationalopportunities for individualsto grow in their careers.Jeff Carr, ChairNext Generation in BankingHawthorn Bank, Jefferson City2024 EVENTSMarch 5 — NextGen Day at the Capitol, Jefferson CityOct. 3-4 — NextGen Leadership Conference, Kansas CityFrom in-person eventsto virtual sessions to on-demand webinars, there’san array for individuals tochoose. Yet, some may notfeel comfortable askingpermission from supervisorsto participate in theseofferings. That’s wheremanagement and seniorleaders come into play.As you receive informationfrom MBA about upcomingconferences, seminars,schools and leadershipopportunities, ask yourselfthese questions.• Which individual onmy team would beneﬁtfrom this program?• Which individual on myteam do I envision as amanager of a particulardepartment?• Who has the “it” factorto be a great banker andleader?• How will thisopportunity beneﬁt ourcustomers and bank?For those individuals youhave identiﬁed, pass alongthat email from MBA. Includea note that they shouldregister for the programand share why you believeit would beneﬁt them andthe bank. A note like thisfrom management showsindividuals their value toyour team and that youwant to invest in their futureat the bank.For NextGen members,when you receiveinformation from MBAabout educational programsor NextGen events thatinterest you, go talk withyour supervisors. Share whyyou want to attend andhow it beneﬁts your role atthe bank. Being proactivedemonstrates yourwillingness to learn and growin your career, and it couldlead to more opportunitieswithin the bank.As you consider theopportunities availableto you and your staff, Ihighly recommend lookingat sending your teamto MBA programs. Yourteams will enhance theirknowledge, connect withfellow bankers and be a partof an association deeplycommitted to the bankingcommunity.Next Generation in Banking THE MISSOURI BANKER 13

Page 16

Page 17

Since their establishments in communities across the state, Missouri bankers have held longstanding relationships with local farmers. These relationships often span generations, a testament to the mutual trust and respect between bankers and farmers. That trust is paramount in ensuring the continuing livelihood of Missouri farms and rural communities. As farmers delve into their planting and operations for 2024, many factors can inﬂuence what type of year they will see in terms of proﬁts or losses. Those outcomes weigh heavily on their future plans for their businesses.Davin Althoff, director of marketing and commodities for the Missouri Farm Bureau in Jefferson City, and Ben Brown, senior research associate with Food and Agricultural Policy Research Institute at the University of Missouri-Columbia, highlight economic issues currently facing Missouri farmers and how banks can assist their ag customers in weathering challenges that lie ahead.How is the 2023 drought affecting farmers?Althoff: All in all, it’s been a really tough year for farmers in Missouri. Market drivers had a huge impact on Missouri farmers and ranchers. We’ve seen a tremendous amount of liquidation in our cowherd in the state, and the U.S. cattle industry in general has been plagued by drought for the last several years. The markets are responding to liquidation in terms of better market pricing, but it’s harder for Missouri farmers to take full advantage of these prices because many have sold off or liquidated their herds.The drought goes beyond the farm and ranch gate. It’s affected our ability to get product up and down the Missouri and Mississippi rivers. That has weighed heavily on U.S. corn exports. Our global importers who typically buy corn from us were struggling to get corn when they needed it, so they turned to our competitors to purchase corn. The Mississippi River has been challenging for exporting grain and oil seeds, and it’s also been challenging for getting products such as fertilizer for farmers and ranchers up the river. How is a higher interest rate environment factoring into farming operations and planning?Brown: I’m seeing a couple of things from both lenders and producers. The ﬁrst thing is operating expenses for farm businesses, especially new and beginning farmers who don’t have enough working capital to cover full production. Operating expenses have increased anywhere between 60-80% year over year. This can be a pretty large thing when thinking about the cash ﬂow for your commodity or production. You consider that expense for operating loans and the opportunity cost for money that has the potential to start eating away at some equity. The second thing is operating loans are getting bigger and are more expensive, and we’re seeing more producers move away from a ﬁxed interest rate to a variable interest rate in the hopes that interest rates will eventually decline. Fixed interest rates have been a very popular and very useful tool for producers, especially if you’re considering purchasing a large piece of equipment. Your hope is that interest rates will come down, so more are taking variable loan rates. That has a risky component because if rates were to continue to increase, you know those interest expenses would continue to increase as well.Althoff: In terms of increased interest rates, your average consumer will put off a major expense until the rates come down. Unfortunately, it doesn’t work that way in farming or ranching. When springtime rolls around and you see the planters pull out a shed, they’ve got to buy fertilizer and seed for corn and beans. Livestock producers have to purchase their feed. They can’t forgo these — they need to feed their livestock and plant their crops. Those in agriculture keep a close eye on interest rates because it has a huge impact to the bottom line, especially when you see the cost of production where they are today. THE MISSOURI BANKER 15

Page 18

What can bankers expect to see with farming this year?Althoff: We’re coming off a couple of years of very good, very high gross receipts at the farm gate. 2022 was a record year, and 2023 was a little bit down but would have been a record high if 2022 hadn’t been a record year. On the ﬂip side, we saw record production costs. Production expenses in 2022 were $429 billion, and that increased to $443 billion in 2023. There’s also pressure in the commodity markets, speciﬁcally with corn and soybeans. Those market prices have softened over the last year, but the costs are not decreasing nearly as fast when it comes to production costs. When you consider the high costs of production and the rise in interest rates, farmers will look at tightening their belts. Just consider the costs of planting corn in a year’s time. When the average line of credit was around 3.6% in second quarter 2022, it cost $19.03 in interest to plant an acre of corn. In 2023, when interest rate was north of 8%, planting one acre of corn cost $41.76 in interest — production costs doubled in just the cost of interest alone.Brown: There’s a saying that “Red sky at night, sailor’s delight. Red sky in morning, sailor’s warning.” That can apply to the agriculture industry in Missouri and the U.S., depending on the makeup of your farm and the commodities you grow. The outlook for 2024 and into 2025 looks different. You might be sitting there saying, wow, this is a red sky at morning; I should be concerned. Or it could be a red sky at night; these are good times. I’ll break that down for what we’re seeing in the markets.The drought has really hurt cattle numbers across the U.S., and a reduction in inventory has led to record prices for cattle. Through 2023, we were seeing these record prices but weren’t seeing record proﬁtability because feed costs also were elevated. Now, the output price for cattle remains high, but we’ve seen feed costs of corn, grain and sorghum wheats all fall and cheapen those input costs for cattle. It’s actually a pretty proﬁtable picture for cattle for 2024 into 2025, and maybe even into 2026. There is a lot of price risk with cattle, so there should be consideration about cutting off some of that downside risk and protecting some proﬁtability.The negative side is on row crops. There will be some tightening of the belt in the next couple of years, depending on the commodity. Commodity prices are down anywhere between 10 and 19% year-over-year. We’ve seen a little bit of relief in input prices, but not near enough to offset the It cost $19.03 in interest to plant an acre of corn in 2022. It cost $41.76 in interest in 2023.16 mobankers.com

Page 19

MBA AG SEMINARMarch 13Courtyard by Marriott, Columbiadecreases in prices. My budgets for corn in Missouri are all showing a negative return for 2024 over total cost. That’s down signiﬁcantly from the $80 of positive revenue that we saw in 2023.How can bankers best help their farm customers?Althoff: Farmers have really good working relationships with their bankers. Their balance sheets are in good shape. However, given our current environment, I think this is a good time to help your customers understand their ﬁnancials a little bit better as it relates to their balance sheet. Look at liquidity ratios, debt to asset ratios, coverage ratios. Help them understand the various triggers that they need to be looking at on their balance sheets that can help them make management decisions.Brown: The last time we had a major economic slowdown in the ag sector was the infamous 1980s. Farmers weren’t sure where their paychecks were going to come from or how they were going to pay for different things, and that was rough time. For many of us, we have not had a period of rising and elevated interest rates like what we’re seeing right now. This is a new environment for producers to think about managing their operations, and banks play a role in providing ﬁnancial guidance for farms going through these rough patches. I can’t tell you how many times I’ve heard a farmer say they are still in operation today because when things got rough during the 1980s, they explained their situation with their banker — no money to pay for the interest or even the principle. Their banker said they would work with them to ﬁgure things out.We’re not in the same situation as the 1980s. There’s a lot of strong working capital across farms in the state and the country. We are going to see some stress in the short term, and there needs to be discussion about how to build working capital and the liquidity of farm operations. “This is a new environment for producers to think about managing their operations, and banks play a role in providing ﬁnancial guidance for farms. High Impact Weather and Changes in Predictive ScienceEric SnodgrassNutrien Ag SolutionsA Dierent Perspective on New Tech and Scientic Impacts on AgDoug Johnson, Director – Agriculture Industry Practice LeadMoody’s AnalyticsRed Sky: Farmers Delight or WarningBen BrownSenior Research Associate with MU’s Food and Agricultural Policy Research Institute The Management Mindset for the 2020sDr. David Kohl, Professor EmeritusVirginia TechFeatured SpeakersScan QR code for more details and to register. THE MISSOURI BANKER 17

Page 20

By Brent Melton, Vizaline LLCBanks and their customers can choose from several options for protecting an asset before, during and after closing. Unfortunately, there is not a single product that offers complete protection. There is an option that provides basic coverage regarding the title (title certiﬁcate) and another that provides advanced coverage (title insurance), but neither provide coverage regarding the actual property description. In most long form lenders policies, there is no survey coverage because the survey exception in Schedule B carves out that risk. To ensure that the property description is covered, bankers traditionally rely on a survey combined with a title certiﬁcate or title insurance. However, with rising costs and longer lead times, lenders have foregone surveys and set internal policies deﬁning what levels they accept the known risks. With advances in technology, bankers have another option to help protect the property description by using a property visualization as an add-on to either a title certiﬁcate or title insurance.Visual Audits Offer an Ounce of Prevention for Customers, BanksTitle insurance is more of an indemnity that provides coverage in the event the title is not as it was insured to be. Title insurance is a great protection and covers things beyond those covered by an attorney’s title certiﬁcate or survey. However, title insurance does not guarantee that the title (or legal description) is perfect or correct. A survey will protect banks and their customers with regards to ensuring a legal document shows property boundaries and sometimes easements. However, how do banks know that the survey matches what they have as a property description?A property visualization is designed to help lenders avoid a potential problem with properties. For example, a lender takes a parcel of property located on XYZ Road as collateral for a large loan. There is nothing particularly wrong with the legal description; the problem is that the lot is not wide enough for development or building. One would assume the property at XYZ Road is worth a lot of money. Those issues, while not legal description problems, are a huge factor not considered Guest Commentary18 mobankers.com

Page 21

in making the loan. Also, those issues are not covered by title insurance. The title company did not ensure the property was large enough to be used. Rather, the title company just ensured that the lender had a good lien on the property.A visual property audit turns the property description into a picture. This is important because it ensures the property description at closing contains the following items at a minimum.• polygon closes• partial releases (if any) are known• ingress/egress• the correct number of parcels are described • the amount of acreage involved The second phase of the visual audit relatively places the polygon(s) on a picture of the property, using satellite imagery in most cases. By placing the polygons(s) on the imagery, bankers and customers:• can now see how the polygon ﬁts to the surrounding area• can verify that the polygon(s) is in the approximate correct location• visually see if there are any encroachments • validate that the easements make geographical senseAlthough a visual audit is not a legal document, it offers an ounce of prevention and an opportunity for bankers and their customers to discover and avoid problems at a cost signiﬁcantly lower than traditional methods. A visual audit will do the investigative work that notiﬁes bankers if they should take the next step and obtain a survey before closing a loan. A visual audit provides a separate level of due diligence that should be done, regardless if the lender is obtaining title insurance or survey coverage.Banks should use all available tools at their disposal to minimize their risk exposure while maximizing protection for their customers. Adding a visual audit to title certiﬁcates or title insurance policies offers the highest level of protection for customers and reduces as much risk as possible for the bank. BANCMACCOMMUNITY BANC MORTGAGE CORP.YOUR COMMUNITY BANK MORTGAGE PARTNERbancmac.commortgages@bancmac.com888.821.7729|NMLS# 571147BancMac provides correspondent lending and is your Community Bank Mortgage Partner to help your ﬁnancial institution originate ﬁxed-rate secondary market loans including:PROGRAMS• Conventional Loans• USDA Rural Development Loans• Rural Living (Hobby Farm) Loans• VA Loans• Jumbo Loans• FHA LoansOUR CORRESPONDENTS RECEIVE:• Superior Service & Competitive Pricing• No Minimum Volumes• Signiﬁcant, Non-Interest Fee Income• Non-Solicit Protections & MoreThis article is for information purposes and does not contain or convey legal advice. The information should not be used or relied upon in regard to any particular situation without consultation with your bank attorney.Vizaline LLC is a software ﬁrm that converts written property descriptions into pictures using satellite images to help determine if a legal property description is correct. The visualization tool, or “Viza-Audit,” provides a rapid, inexpensive report to help lenders better understand their assets and protect portfolios and customers. Visa-Audit lets a banker know quickly if there is an issue requiring an attorney or a survey. For more infornation, contact Brent Melton, CEO, at 601-405-1802 or brent@vizaline.com. Vizaline is an MBA endorsed partner.“A visual audit provides an opportunity for bankers and their customers to discover and avoid problems at a cost signiﬁcantly lower than traditional methods. THE MISSOURI BANKER 19

Page 22

By Greg Omer, Armstrong TeasdaleNew CRA Rule Expands Evaluation Areas That Could Impact Bank Business StrategyIn October 2023, federal bank regulatory agencies adopted a ﬁnal rulei to signiﬁcantly modify and expand requirements for banks under the Community Reinvestment Act of 1977,ii with the goal of modernizing CRA requirements.In multiple ways, the rule has expanded the geographic areas in which banks will be evaluated for CRA “retail lending test” compliance purposes. Each of these expansions could potentially affect bank business decisions not only about where and how to grow a bank’s business but also if such growth should be undertaken. This impact is highlighted in the dissenting statements on the rule issued by Federal Reserve Governor Michelle Bowman, Federal Deposit Insurance Corporation Vice Chairman Travis Hill and FDIC Director Jonathan McKernan.iiiThe new rule works differently, depending on the size of a bank. A “large bank” is any bank with more than $2 billion in total assetsiv, and an “intermediate bank” is any bank with between $600 million and $2 billion in total assets. The rule’s CRA area changes affect both intermediate and large banks but differently. The rule lists three types of CRA areas.• Facility-based assessment areas are the traditional CRA assessment areas that all banks must designate. The rule makes some changes to how these areas are deﬁned, but these areas generally include counties in which the bank has its main ofﬁce, branches or deposit-taking remote service facilities and surrounding counties in which the bank has originated a substantial portion of its loans, including home mortgage, multifamily, small business, small farm and automobile loans. Under the rule, banks are evaluated on their performance in their facility-based assessment areas under the full panoply of CRA tests, including the “retail lending test.”• The rule requires large banks to include whole counties, rather than partial counties, when designating their facility-based assessment areas. In contrast, small and intermediate banks can use partial sections of counties in designating facility-based assessment areas.• The rule establishes the new concept of “retail lending assessment areas,” which are areas (i.e., metropolitan statistical areas and nonmetropolitan counties) that are outside a bank’s facility-based assessment areas and in which the bank has at least 150 closed-end mortgage loans or at least 400 small business loans. For each designated retail lending assessment area, the bank is evaluated under the CRA rule’s retail lending test for the type of loans that triggered the designation: closed-end mortgages and/or small business loans. Retail lending assessment areas are only required for “large banks.” However, large banks that conduct more than 80% of their retail lending (i.e., home mortgage, multifamily, small business, small farm and automobile loans) within their facility-based assessment areas in the two prior calendar years are exempt from this retail lending assessment area requirement.Guest Commentary20 mobankers.com

Page 23

• The rule also establishes the concept of “outside retail lending areas” that are required for all large banks and any intermediate bank that conducts a majority of its retail lending outside its facility-based assessment areas.v An outside retail lending area is the nationwide area that is not within a bank’s facility-based assessment areas or, if applicable, retail lending assessment areas. For the outside retail lending area, the bank will be evaluated on its retail lending to low- and moderate-income individuals and communities under the CRA retail lending test but potentially focusing on different “major product lines” than for retail lending assessment areas.Generally, the rule deﬁnes “small banks” as those with less than $600 million in total assets.vi Although small banks will be affected far less than large and intermediate banks by the rule’s CRA area changes, small banks will be subject to new requirements under the new rule if they voluntarily “opt in” to be subject to the retail lending test as their performance standard, in which case they would also have an “outside retail lending area” designated.Banks considering growth strategies — e.g., establishing ofﬁces in new areas or initiating new online lending programs — will need to carefully consider if that proposed growth will trigger obligations under the new CRA rule that will create signiﬁcant burdens for the bank. Similarly, a bank may wish to consider if continuing to retain an ofﬁce in a certain area or to offer certain online programs makes sense if the new CRA rule imposes signiﬁcant burdens on the bank based on that ofﬁce or online program. The following situations are examples.• A large bank may be considering establishing a new branch in a lightly populated corner of a large, populous county. Such a branch would cause the entire county to be designated as part of that bank’s facility-based assessment area, subjecting the bank to various CRA tests for the entire county area, even though the bank’s business and customers are conﬁned to a small area of the county. If the burden and risks related to this designation outweigh the beneﬁts of the branch, the bank may opt not to proceed with that branch in that location. A loan production ofﬁce with a deposit-taking remote service unit would also trigger this issue. • A large bank with successful lending programs offered online or via nondeposit-taking LPOs may realize that continued growth of those programs could cause the bank to have less than 80% of its retail lending in its facility-based assessment areas, resulting in the bank losing its exemption from the CRA rule’s retail lending assessment area testing requirements. If the burden and risks of taking on these requirements outweigh the beneﬁts of growing the lending programs, the bank may take action to limit the programs’ growth.vii • An intermediate bank with successful lending programs offered online or via nondeposit-taking LPOs may realize that continued growth of the programs could cause the bank to have a majority of its retail lending outside its facility-based assessment areas, subjecting the bank to the CRA rule’s outside retail lending area testing requirements. If the burden and risks of these requirements outweigh the beneﬁts of growing the lending programs, the bank may take action to limit the programs’ growth. Most of the new rule’s requirements will be applicable Jan. 1, 2026. The new CRA rule will essentially be implementing the concept of “grading on a curve” under the retail lending test, which appears to ensure that more banks will be tagged with lower CRA ratings. So, large and intermediate banks may be put in positions of balancing the merits of investments in new communities and expanding credit opportunities for more borrowers with the risks and burdens the bank could face under the new CRA rule — knowing that a lower CRA rating would have a major negative impact on the bank. i federalreserve.gov/consumerscommunities/community-reinvestment-act-ﬁnal-rule.htm.ii 12 USC 2901 et. seq. iii These dissents are at federalreserve.gov/consumerscommunities/community-reinvestment-act-ﬁnal-rule.htm; fdic.gov/news/speeches/2023/spoct2423c.html and fdic.gov/news/speeches/2023/spoct2423f.html. iv This $2 billion threshold deﬁnition for “large banks” will force many community banks to abide by the same set of requirements applicable to giant Wall Street institutions. As noted by Federal Reserve Governor Michelle Bowman in her dissenting statement on the rule, the $2 billion asset threshold not only fails to differentiate between banks with radically different business models, but it also is out of step with many other federal bank regulatory thresholds deﬁning “large” banks as those with $10 billion in total assets or by even higher thresholds.v An intermediate or small bank can also voluntarily “opt in” to be evaluated in an outside retail lending area under the retail lending test.vi Note that “limited purpose” banks, as deﬁned under the new rule, are treated differently than more traditional small, intermediate or large banks.vii This type of growth also could trigger expansion of a large bank’s retail lending assessment area by crossing the thresholds for closed-end mortgage or small business loans in a certain area.Greg Omer, a partner with Armstrong Teasdale, has more than 25 years of experience in banking and corporate law as general counsel and executive vice president at a regional bank holding company, partner at law ﬁrms and chief counsel for the Missouri Division of Finance. Learn more atarmstrongteasdale.com. Armstrong Teasdale is a MBA associate member. THE MISSOURI BANKER 21

Page 24

By FarmerMac There may be no other U.S. industry with as direct an impact on the economic vitality of its surrounding communities as the ag sector in rural America. Farm incomes in particular serve as an important determinant of rural prosperity.Encapsulating net farm income and net cash farm income, farm incomes represent the ﬁnancial returns to all the stakeholders involved in farm production, including operators, landlords and contractors. They are a critical component of rural economic growth, inﬂuencing investment in agriculture, stimulating local businesses and supporting public services.In 2022, net cash farm income reached a record high of $202.2 billion, marking a $52.9 billion (35.4%) increase from 2021. However, the U.S. Department of Agriculture’s August forecast for 2023 indicates a decrease of $53.6 billion (26.5%) to $148.6 billion. While the current levels of economic activity are still above historical averages in most ag-intensive regions, this volatility could have important implications for rural communities given how heavily farm incomes can weigh on local economies.FARM INCOMES HELP SHAPE THE ECONOMIC LANDSCAPE OF RURAL COMMUNITIESFarm incomes directly impact the purchasing power of producers, inﬂuencing their ability to invest in farm inputs, machinery and technology. An increase in farm income drives up working capital and capital investment. Conversely, a decrease in farm income, like the one forecasted for 2023, has historically correlated with slowed spending on farm capital investment alongside a rise in the use of debt capital to offset declines in annual income.Farm Income Can Push and Pull on Rural EconomiesGuest Commentary22 mobankers.com

Page 25

The vibrancy of rural businesses also is inﬂuenced by farm incomes. Producers’ spending on goods and services stimulates local economies, creating jobs and fostering economic diversiﬁcation. That means that changes in farm income could lead to expansions and contractions in local business spending and, ultimately, to changes in local unemployment and poverty rates in rural areas.Finally, farm incomes contribute to the local tax base, supporting public services such as education, health care and infrastructure development. During ag expansions, there can be a revival in many of these services; conversely, a decline in farm incomes can slow down the provision of these essential services and investments.CONCLUSIONAs we navigate the complexities of the 21st-century economy, the importance of farm incomes to rural prosperity cannot be overstated. This also means that any potential volatility in farm incomes in 2024 should be monitored in the coming months.Ag and rural lenders are important capital providers at both ends of the farm revenue cycle: providing the working and investment capital that helps fuel business expansions and new land purchases, as well as the debt capital to help offset income declines. Historically, however, often their biggest impact comes from the services they provide during slowing farm economies. As we face a potential pullback, ag lenders can play a vital role in helping to keep farm capital ﬂowing. This article was produced by the Federal Agricultural Mortgage Corporation (“Farmer Mac”) and originally published on farmermac.com/thefeed. Excerpts are included with permission.Farmer Mac is committed to help build a strong and vital rural America by increasing the availability and affordability of credit for the beneﬁt of American agriculture and rural communities. As the nation’s premier secondary market for agricultural credit, Farmer Mac provides ﬁnancial solutions to a broad spectrum of the agricultural community, including agricultural lenders, agribusinesses and other institutions that can beneﬁt from access to ﬂexible, low-cost ﬁnancing and risk management tools. For more information, visit farmermac.com. Farmer Mac is an MBA associate member.Calling all photographers! The Missouri Bankers Association is accepting photo submissions for its 2025 Scenes of Missouri calendar. These photos depict the beauty of the Show-Me State — from the Bootheel to the Ozarks to the northern farmland, our great cities and all points in between — anything that features Missouri scenery, historical locations, the changing seasons, city scenes, wildlife and more. You could win $100 if your photo is chosen as “Best of Show!”MBA’s calendar features photos from MBA-member bank employees, directors and their family members. For more than a decade, dozens of Missouri photographers have had their photos featured. You could be next!Sold exclusively to banks throughout Missouri, these calendars make fantastic gifts for customers to enjoy year-round and to promote your bank. Only digital photos are being accepted until Friday, May 31. Email photos to photos@mobankers.com or submit them on a CD. For complete entry details and a photo contest entry form, visit mobankers.com. If you have questions, contact Carol Barnett at MBA at 573-636-8151 or cbarnett@mobankers.com.SHOWCASE YOUR PHOTOSIN MBA’S 2025 SCENES OF MISSOURI CALENDAR! THE MISSOURI BANKER 23

Page 26

Mike & Charlotte Anderson, First Bank of the Lake, Osage BeachArvest BankBank of Advance Bank of BillingsBank of IberiaBankers Security Inc.Mark Becker, Bank of AdvanceBelgrade State Bank Chuck Brazeale, ParisBroadtekJ.R. Buckner, First Federal Bank of Kansas CityMick Campbell, Missouri Division of FinanceCarroll County Trust Company, CarrolltonCentral Bank of BransonCentral States Capital MarketsCentury Bank of the Ozarks, GainesvilleCommerce Bancshares Inc., Kansas CityMBA Seg4Vets Donations Reach Milestone$1,027,088Segs4Vets President Jerry Kerr (second from right front row) and Segs4Vets representatives present a plaque to MBA commemorating its 15-year partnership to support severely injured military veterans. Around the StateMBA’s 2023 Segs4Vets DonorsMBArecognizestheseindividualsandMBAmembersforsupportingthe2023Segs4Vetscampaign.Thesedonorsraisedmorethan$58,100forSegs4Vets!Eachandeverycontributionistrulyappreciated.Commercial Bank, St. LouisCommunity First Bank, ButlerCommunity First Banking Company, West PlainsCommunity Point Bank, RussellvilleCountry Club Bank, Kansas CityPhil Everitt, Federal Home Loan Bank of Des MoinesF & C Bank, HoldenFCNB Bank, SteelvilleFederal Home Loan Bank of Des MoinesFirst Bank of the Lake, Osage BeachFirst Bankers’ Banc Securities Inc.First Federal Bank of Kansas City First State Community Bank, FarmingtonFreedom Bank of Southern Missouri, CassvilleMark & Margaret Goodin, Community State Bank of Missouri, Bowling GreenHawthorn Bank, Jefferson CityHeritage Bank of the Ozarks, LebanonJonesburg State Bank Mark Laune, Peoples Savings Bank, HermannLegacy Bank and Trust, SpringﬁeldLegends Bank, LinnLenders Insurance Solutions GroupMA Bank, MaconMid-Missouri Bank, SpringﬁeldMidwest Independent BankersBank, Jefferson CityMissouri Heroes Cup Golf TournamentMissouri Bankers Association StaffNew Era Bank, FredericktownOakStar Bank, SpringﬁeldO’Bannon Banking Company, BuffaloOMB Bank, SpringﬁeldOzarks Federal Savings & Loan Association, FarmingtonPeoples Bank of SenecaPeoples Savings Bank, HermannPhelps County Bank, RollaPony Express Bank, BraymerProgressive Ozark Bank, SalemRegional Missouri Bank, MarcelineSecurity Bank of Pulaski County, WaynesvilleSterling Bank, Poplar BluffSullivan BankTable Rock Community Bank, Kimberling CityThe Bank of Missouri, PerryvilleUMB Bank, Kansas CityUnited Bank of UnionWest Plains Bank and Trust Company24 mobankers.com

Page 27

Political analyst Chris Stirewalt (third from right) met MBA Treasurer Patrick Kussman,Regional Missouri Bank, Marceline; MBA President and CEO Jackson Hataway; MBAChairman Adrian Breen, The Bank of Missouri, Perryville; MBA Chairman-Elect DavidGohn, West Plains Bank and Trust Company; and MBA Past Chairman J.R. Buckner, FirstFederal Bank of Kansas City.Dwayne Falk and Tammy Kelley with Table Rock Community Bank in Kimberling City visit with JimLewis with First Bankers’ Banc Securities Inc.Rob Barton with Bank Compensation Consulting speakswith Mike Bender with Midwest Regional Bank in Clayton.Harold Miles with Bank of Advance, Missouri Division of Finance Commissioner Mick Campbelland Jay Knudtson with First Missouri State Bank of Cape County in Cape Girardeau discussed thelatest activity of the state banking board.Matt Browning with Segs4Vets thanks John Everett withLegacy Bank and Trust in Springﬁeld, Brian Roberson withLenders Insurance Solutions Group and Jim Childress withSterling Bank in Cape Girardeau.Kathleen Bruegenhemke with Hawthorn Bank inJefferson City served as the conference emcee andprovided a recap of the sessions.Around the StateScenes from Executive Management Conference THE MISSOURI BANKER 25

Page 28

2024 MBA School of BankingCongratulations to the 2024 School of Banking Graduates!First Year ClassScott Bartlett, Carroll County Trust Company, CarrolltonJanine Brinker, The Callaway Bank, FultonLewis Chapman, Bank of Prairie VillageBill Cotton, Unico Bank, PotosiTaylor Cox, Community State Bank of Missouri, TroyLogan Darnell, First State Bank & Trust Company, CaruthersvilleCory Dudley, Southern Bank, SmithvilleDean Ekle, Kahoka State BankCordell Finley, West Plains Bank and Trust CompanyKyle Allen, Southwest Missouri Bank, JoplinTyler Anderson, Peoples Savings Bank, New HavenJessica Armstrong, Peoples Savings Bank, HermannRandall Barnes, Farmers State Bank, CameronMegan Biermaier, Concordia Bank, OdessaGreg Connell, Community Point Bank, EugeneJayson Cox, Mid-Missouri Bank, SpringﬁeldWes Davis, Town & Country Bank, AvaCassie Fisher, Concordia Bank, OdessaJacob Forsythe, Farmers State Bank, CameronAshly Galbreath, The Callaway Bank, FultonCurtis Gilliland, Bank of AdvanceCharles Hendrix, CNB St. Louis BankMatthew Kallmeyer, Peoples Savings Bank, HermannBryan Keene, Ozark Bank, NixaHenry Kientzy, Silex Banking CompanyAdrianne Logsden, Unico Bank, PotosiNathan Martin, First State Bank & Trust Company, CaruthersvilleKristen Dean, Central Bank of Boone County, ColumbiaCass Denton, West Plains Bank & Trust CompanyLindsay Dobsch, Bank of Franklin County, WashingtonTeri Gildehaus, United Bank of UnionMegan Ginnings, Community State Bank of Missouri, Bowling GreenAaron Head, Bank of BillingsKim Hurt, Concordia BankAngel Johnson, Peoples Community Bank, Greenville Sonja McKinney, Central Bank of Boone County, ColumbiaRobin Morrison, Central Bank of Boone County, ColumbiaLydia Palmer, Bank of Brookﬁeld-PurdinMary Quartemont, The Callaway Bank, FultonNathan Ramseyer, Hawthorn Bank, Jefferson CityJason Reuterdahl, Bank of New CambriaPhillip Roller, Sterling Bank, Rogers, ArkansasDarius Schultz, farmbank, KirksvilleDeborah Young, The Callaway Bank, FultonDiane Kempker, Midwest Independent BankersBank, Jefferson CityChristina Mallen, Farmers State Bank, CameronWilliam Mefford, TPNB Bank, ParisTommy Murphy, FCNB Bank, SteelvilleKevin Schmelder, CNB St. Louis BankAmy Skyles, Phelps County Bank, RollaMike Vermillion, United Bank of UnionJennifer Winfrey, Mid-Missouri Bank, LebanonSecond Year ClassAround the State26 mobankers.com

Page 29

Page 30

AchievementsJonathan Arnold was promoted to vice president-ﬁnance and risk ofﬁcer at Branson Bank. He oversees enterprise risk management functions and various ﬁnance-related activities that include extensive involvement with credit and asset/liability management, manages personnel within the bank’s credit underwriting department and serves as assistant secretary to the bank’s board of directors. Matthew Baker was named ﬁnancial advisor of Branson Wealth Advisors. He oversees and advises wealth management clients while expanding the product and service offerings available to clients.Central Trust Company, a division of The Central Trust Bank, named several individuals to its wealth management teams. Gary Dyer was named vice president and portfolio manager in Columbia. He works with clients to structure and manage customized investment portfolios to meet their needs and goals. Mary Korner is vice president and senior relationship manager in St. Louis, and Robert Simmons is assistant vice president and relationship manager in Jefferson City. Both provide wealth advisory, tax and estate planning strategies, and ﬁduciary services to clients. Jarod Robillard is assistant vice president and relationship manager in Springﬁeld. He builds and maintains client relationships, providing guidance and oversight while delivering exceptional service. Theresa Manhoff joined First Bank of the Lake in Osage Beach as senior vice president, deposit operations. Leading a team of deposit and treasury professionals focused on generating new business and supporting existing clients, Manhoff plays a key part in new product development and delivering exceptional experience for clients. She has more than 25 years of experience in both retail and deposit operations, specializing in large-scale deposit initiatives and process improvement.Jonathan ArnoldGary Dyer Mary KornerRobert SimmonsJarod RobillardGuaranty Bank in Springﬁeld named Ryan Fletcher as vice president, commercial banking ofﬁcer. He has more than 10 years of banking experience in commercial banking, including lending and credit administration. Melinda O’Quinn was named deposit operations manager. She has more than 32 years of banking experience that includes operations and retail management. Carrie Eakins and Leora Choate were promoted to branch banking ofﬁcers. Eakins joined the bank in May 2017 as a market banker and has been an assistant branch banking manager for the past two years. Choate joined the bank in November 2017 and has served as assistant branch banker for the past two years. Mid America Bank promoted Michelle Kolb to branch manager of its Wardsville branch. She oversees the daily operations and sales function of the branch and leads the branch in making sales calls, conducting training, processing transactions and setting up new accounts. Kolb has seven years of banking experience.UMB Bank in Kansas City promoted Stephen Parshall to president of UMB’s central Missouri region to lead UMB’s growth in central Missouri and oversee new commercial relationships comprised of loans, deposits and comprehensive treasury and payments solutions. Parshall joined UMB in 2013 and previously served as senior vice president of commercial banking and senior relationship manager for the commercial real estate group. He has more than 19 years of ﬁnancial services experience. Matthew BakerRyan Fletcher Melinda O’QuinnCarrie Eakins Leora ChoateStephen ParshallTheresa ManhoffMichelle KolbAround the StateSend achievements, news and announcements to Lori Bruce, MBA communications director, at mba@mobankers.comfor posssible inclusion in The Missouri Banker.Submit Your News! 28 mobankers.com

Page 31

MBA Foundation Awards Five InternConnect ScholarshipsThe Missouri Bankers Foundation awarded ﬁve $1,000 MBA InternConnect scholarships to college students who interned at Missouri banks in 2023. MBA’s InternConnect program encourages students majoring in a banking-related discipline to explore careers in the Missouri banking industry. 2024 InternConnect scholarship applications will be available this summer. Hayden Alcorn was an intern at First State Bank and Trust Company in Sikeston. His supervisor was Zachery Fayette, executive vice president/north market president. Alcorn is studying ﬁnance at Mississippi State University in Starkville and will graduate in May 2024. Kevin Donovan was an intern at United Bank of Union. His supervisor was Chad Banderman, Around the StateMBA Welcomes New StaffBrent Irwin joined the MBA staff as assistant vice president of compliance services. He previ-ously worked in compliance and lending roles at a community bank in northern Missouri for more than 13 years. We welcome Brent to our compliance team!Ethan Gray, a student at the University of Missouri-Columbia, joined MBA’s government relations team as an intern for the 2024 ses-sion of the Missouri General Assem-bly. He is studying business adminis-tration, with an emphasis in banking and ﬁnance, and plans to attend law school. We welcome Ethan to our government relations team!vice president BSA/deposit compliance ofﬁcer. Donovan is studying business administration at Southeast Missouri State University in Cape Girardeau and will graduate in May 2024.Sarah Kussman was an intern at Midwest Indepen-dent Bank in Jefferson City. Her supervisor was Lyndsay York, payments ofﬁcer — assistant vice president. Kussman is studying agribusiness management at the University of Missouri-Columbia and will graduate in December 2025.Gwen Squires was an intern at First State Community Bank in Jackson. Her supervisor was Cathy Reiminger, community bank manager. Squires is studying actuarial science at Southeast Missouri State University in Cape Girardeau and will graduate in May 2025.Mackenzie Wilson was an intern at Bank of Washington. Her supervisor was Chris Eckelkamp, vice president – commercial lending. Wilson is studying ﬁnance at Culver-Stockton College in Ganton and will graduate in May 2025. The 50 Year Club honors bankers who have dedicated 50 years of service to banking. MBA is accepting nominations for 2024 inductees until Friday, April 26. Visit mobankers.com for details. MBA 50 Year Club THE MISSOURI BANKER 29

The Missouri Banker January February 2024

Page 1

Page 2

Page 3