Banking and Financial Services

Banking and Financial Services, December 2015, Features

$7.7B in Credit Union Assets

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At the national level and in Kentucky, banks say credit unions – which are member owned – have an unfair advantage in an industry where they both offer, for the most part, the same financial services.

It’s been 33 years since the Louisville & Nashville Railroad Co. vanished from the American landscape through a series of transportation industry mergers and became one element of Florida-based CSX Transportation, which has 21,000 miles of track in 23 states and two provinces of Canada.

But one institution created by an iconic railroad that dates to 1850 wasn’t hauled away to the CSX corporate headquarters in Jacksonville.

The L&N Federal Credit Union was founded in 1954 as a benefit for employees in Louisville. Not only does it retain the railroad’s signature initials, it has grown into one of the largest credit unions in the state. It has a substantial presence in nine counties that radiate out from Louisville, five counties in Eastern Kentucky, parts of six counties in Northern Kentucky and from there over the Ohio River into two Indiana counties and Hamilton County, Ohio, which includes Cincinnati.

What started with 14 members and $12,000 in assets at the end of its first year now has more than 70,000 members and assets of $960 million, which ranks as Kentucky’s third largest credit union.

“When they first started,” said Tim Root, L&N’s chief marketing officer, “they had volunteer collectors who would walk through the yard on a given day and see who wanted to make a deposit; they would put the money in an envelope and give them a handwritten receipt.”

Along the way, the L&N Federal Credit Union also became the target of criticism last October from the American Bankers Association, which represents U.S. banks that are longtime rivals of the credit union industry, which was first chartered and regulated by the federal government in 1934 during the Great Depression.

At the national level and in Kentucky, banks say credit unions – which are member owned – have an unfair advantage in an industry where they both offer, for the most part, the same financial services.

Charles Vice, Commissioner, Kentucky Department  of Financial Institutions

Charles Vice, Commissioner, Kentucky Department of Financial Institutions

“Credit unions are nonprofit entities and because of that they don’t pay federal taxes, and the banks think that that gives them a competitive advantage,” said Charles Vice, commissioner of the state’s Department of Financial Institutions, which oversees state-chartered banks and credit unions. “They’re (the banks) paying 33-34 percent in (corporate) taxes, and the credit unions don’t pay that.”

Market conditions, of course, change over the course of eight decades.

‘A pricing advantage’

“We’re fierce competitors in the marketplace, and banks always look at it as a disadvantaged competition,” said Ballard Cassady, president and CEO of the Kentucky Bankers Association and an outspoken critic of credit unions. “That (tax exemption) immediately gives you a 35 percent pricing advantage on anything you do.”

“In the very beginning, Congress granted them a tax exemption so they could meet the credit needs of people of modest means. They don’t do that anymore,” said Cassady, who argues that most credit union customers no longer meet that “modest means” criterion.

Although Cassady and the national bankers group have singled out L&N for comment about aggressive commercial lending practices, it is far from alone in Kentucky, where there are 73 credit unions. The state granted charters to 24, and 49 operate as federal entities regulated by the National Credit Union Administration.

Credit unions report about 790,000 members in Kentucky.

The 24 state-chartered credit unions had consolidated assets of about $3.1 billion at the end of last year, according to the most recent annual report from the Kentucky Department of Financial Institutions. That equals 6.3 percent of the $49.1 billion in assets reported by the 147 banks operating under state charters at the end of 2014.

Credit union assets equal 14.1 percent of what banks have when federal institutions are included.

Wendell Lyons, President, Kentucky Credit Union League

Wendell Lyons, President, Kentucky Credit Union League

As of June 30, the Federal Deposit Insurance Corp. said the 172 banks with offices in Kentucky, including those the state chartered, had assets of about $54.6 billion. For state and federal credit unions, the comparable number is about $7.7 billion, said Wendell Lyons, president of the Kentucky Credit Union League, an advocacy group for the industry in Kentucky.

At the national level, credit unions had about a 7 percent share of the financial services business in 2013, the last year for which a figure is available, Lyons said. That share of the market has inched up from 5.6 percent in 1992, he said.

John Fairbanks, a spokesman for the NCUA, cautioned against assigning too much importance to a comparison of banks and credit unions.

“It’s a little apples-to-oranges,” Fairbanks said, “because credit unions, unless they hold a community charter, don’t serve the general public.

“Anyone can walk into a bank and open an account. Credit unions have defined fields of membership, and unless you fit into one of those … you can’t join. So there’s really no way to determine direct market share vs. banks,” he said by e-mail.

However, Fairbanks pointed out, a “community charter” does allow membership for anyone living inside a designated geographic area (a county, for example) and gives consumers the same kind of access to credit unions that they have to banks.

A shift from federal to state charters

Early in their history, many credit unions were established to serve people who worked for a particular company in a “single sponsor” framework such as, for example, L&N Railroad employees in Louisville.

Membership regulations changed in 1982, when credit unions essentially were given a green light to enroll people who worked for any company that did not have a credit union. This created “multi-group” or “select employee group” credit union entities, and at that point, L&N extended its membership to employees of a long list of companies that included the Jim Beam distillery and Churchill Downs, Root said.

L&N today has a federal community charter allowing members to enroll from a broad geographic area that includes parts of Ohio and Indiana.

There are only minor differences between federal- and state-chartered credit unions, but four that were federally chartered in Kentucky switched to state charters in the past four years. A fifth, Kentucky Telco in Louisville, is expected to make that switch soon.

Karen Harbin, President/CEO, Commonwealth Credit Union

Karen Harbin, President/CEO, Commonwealth Credit Union

An important factor influencing decisions to convert charters is that state regulations allow a credit union to draw members from a much larger geographic area, according to Karen Harbin, president/CEO of Commonwealth Credit Union in Frankfort, the largest state-chartered credit union in Kentucky with 85,000 members and $1.1 billion in assets.

“They (the credit unions) feel they can grow their membership” more easily with a state charter, said Harbin, who also is a member of the state’s Financial Institutions Board, which oversees the financial industry. For example, state regulations allow credit unions to enroll residents from throughout any of Kentucky’s 15 area development districts (ADD) if the credit union has an office in the district, she pointed out.

ADDs range in size from five to 17 counties, and state regulators have allowed some credit unions to draw members from two districts, Lyons said.

Autotruck Financial Credit Union, founded in Louisville in 1961 for Ford Motor Co. employees, took advantage of that provision when it switched to a state charter four years ago so it could serve the Barren River Area Development District, which includes Bowling Green and its Corvette plant, as well as the area in and around Louisville, Lyons said.

Autotruck now may draw members from 17 counties.

Members Heritage Credit Union opened in 1960 to serve IBM employees in Lexington. Today it has 45,000 members and assets of more than $300 million, but it switched from a federal to a state charter at the end of 2014, which opened Members Heritage this year to people who “…live, work, worship, attend school or have family members” in 22 counties.

Federal regulations would not allow a credit union to enroll members from such a large swath of the state, Harbin and Lyons said.

Richard Reese, President/CEO, Kentucky Telco Federal Credit Union

Richard Reese, President/CEO, Kentucky Telco Federal Credit Union

Richard Reese, president and CEO of the Kentucky Telco Federal Credit Union, heads a credit union that is in the process of switching to a state charter so that it has a clear path to grow.

“Our credit union has branches in three key metropolitan areas in Kentucky: Louisville, Lexington and Owensboro. A state charter is the only charter option that allows us to serve all three areas on a communitywide basis,” Reese said by e-mail. “If we retained our federal charter, the National Credit Union Administration would only approve our serving one community. Clearly the state charter offers better growth opportunities.”

Kentucky Telco is no newcomer to the credit union business. It was created in 1934, the year the enabling federal legislation was passed, for employees of Southern Bell Telephone and Telegraph in Louisville. Today it is the seventh largest in the state with assets of nearly
$345 million.

David_Kennedy_ukfcu

David Kennedy, President/CEO/ University of Kentucky Federal Credit Union

David Kennedy, president and CEO of the University of Kentucky Federal Credit Union in Lexington, said his credit union has no interest in seeking a state charter although he acknowledged that such a change is “always a possibility.”

Supreme Court allowed expansion

The core membership of the UK credit union are employees of the university as well as Eastern Kentucky University, whose credit union merged with UK’s a number of years ago, Kennedy said.  It also includes employees of the Kentucky Community and Technical College System, which has 16 colleges throughout the state on some 70 campuses.

The UK concentration on educators and others who work at the colleges and universities has helped the credit union grow to about 63,000 people, Kennedy said. “That’s where our growth has been. We’ve been growing very rapidly about six to percent annually,” he said.

This “field of membership” eligibility question is another point of friction with the banking industry.

Ballard Cassady, President/CEO, Kentucky Bankers Association

Ballard Cassady, President/CEO, Kentucky Bankers Association

“They have what is called the ‘air breathers’ credit union code here in Kentucky. That means that if you breathe air, you qualify,” said Cassady, the KBA leader. Membership requirements, he said, are virtually non-existent and have little meaning in the state.

A Kentucky Supreme Court decision in 2010 sided with credit unions that wanted to expand their memberships by expanding the area from which they could draw members.  But the decision was not a groundbreaker, according to Debra Stamper, executive vice president and general counsel for the banking group.

“They just ratified what had been going on. It’s not like the doors just opened up in 2010,” Stamper said. “We (bankers) were challenging what was going on. Credits unions were getting broader and broader in their definitions” of who they could serve.

Harbin and Lyons disagree with Cassady’s contention that anyone can become a credit union member. There has to be a true “common bond” or commonality of interest for someone to become a member, they said.

“There has to be a legitimate association for membership,” Lyons said. “It can’t be a shell association that is just a conduit to credit union membership.”

Membership regulations have tightened in the last two years, he said.

Credit union commercial loans up

Commercial lending is another source of friction between banks and credit unions.

Cassady forwarded a chart from the American Bankers Association showing that L&N credit union’s commercial lending volume grew 80 percent from 2010 to 2014, when the L&N made $63 million in business loans. Credit unions such as L&N are competing more vigorously in commercial lending, he said.

One bank recently lost a $30 million lending opportunity to a credit union, Cassady said, adding that parties who borrow $30 million for business don’t meet the “modest means” criteria.

L&N’s Root said when an institution starts with only $6 million in commercial lending in 2010, it’s not difficult to quickly grow by 80 percent.

“Some banks didn’t want to fool around with these loans (L&N made) because the dollar amount was so low,” Root said, while others just didn’t fit into the banks’ portfolio strategies.

A commercial lending bill that banks oppose and credit unions support was introduced in September by U.S. Sen. Rand Paul, the Bowling Green Republican who is seeking his party’s 2016 nomination for president.

Paul co-sponsored a bill that would increase the business-lending cap for some credit unions from 12.25 percent of assets to 27.5 percent. The Credit Union National Association estimates the legislation would allow credit unions to lend an additional $13 billion to small businesses and help create 140,000 jobs nationwide, according to Paul’s Washington office.

Consumers looking for the highest rates of return on deposits or the lowest interest rates for a loan will find credit unions generally have more attractive rates, according to the NCUA.

But for most transactions, the differences between the two institutions are small, typically just fractions of a percentage point, the NCUA reports.

For savers, the most recent rate comparison by the NCUA in late June shows that the biggest gap between the two was on a $10,000, five-year certificate of deposit. On average, credit unions were paying 1.44 percent interest while banks paid 1.20 percent.

The FDIC and the NCUA both insure deposits up to $250,000.

Difference in philosophy, and rates

Consumers save a little more than 1 percentage point in interest with credit union credit cards, while 15-year mortgage rates were identical at 3.34 percent, according to the NCUA. On 30-year mortgages, banks beat credit unions by four-hundredths of a point, 4.07-4.11 percent.

NCUA data showed that the most consistent and substantial difference in lending rates was for car loans. Credit unions beat banks, on average, by 2.4 percentage points on 48-month used car loans and by nearly 2.1 percent for 48-month new car loans.

While interest rates might vary slightly for banks and credit unions, Cassady emphasized that the overriding difference is in the tax-exempt status.

“To me, the obvious questions is, ‘What are you doing with the money?’ If you’re not paying taxes, that’s a 35 percent break on everything you’re doing. What are you doing with the money?” Cassady said.

Banks in Kentucky paid $133 million in taxes last year while credit unions paid nothing.

But Lyons and Harbin stress that credit unions and banks have far different objectives.

“We don’t have to maximize the wealth of shareholders. The tip of the spear is that we want to maximize the wealth of credit union members,” Lyons said.

“It’s the whole philosophy of people helping people,” Harbin said. “We are not for-profit, and we don’t report to shareholders. Our purpose is to serve members, not to maximize profits. We have to make money to continue to operate so we do have to make a profit, but that’s not our primary purpose.”

Banking and Financial Services, Departments, Economic Commentary, Features, March 2015, Wealth Management

Banking Merger and Acquisition Activity Accelerates

Bank KYThin margins and fat compliance costs
lessening numbers of Kentucky’s community banks

Kentucky bank valuations are still well below those of a decade ago but have risen a quarter to a third from post-recession lows, which is helping facilitate ongoing consolidation in the commonwealth. With a slowly improving economy in 2014, U.S. bank merger and acquisition deal numbers increased 50 percent.

Industry consolidation is a decades-old trend, but state banking experts credit some of the recent acceleration to a combination of slim margins – a product of still historically low interest rates – and increasing compliance costs created by tougher federal and even international regulations.

Deals offer owners an instant return on their capital while ending operational headaches. In the United States, there were 340 whole bank mergers in 2014, said Debra Stamper, general counsel and executive vice president of the Kentucky Bankers Association. That’s up from 227 mergers and acquisitions nationally in 2013, according to numbers from American Banker magazine. And it marks the fourth consecutive year of growth in M&A activity.

Across the country, October 2014 yielded the most bank M&A transactions in 15 years with 36 bank deals announced, according to Scott Harrison of the Nashville Business Journal. The Kentucky Bankers Association reports eight completed state institution mergers and acquisitions between March 2014 and January 2015. Those include Your Community Bank’s acquisition of First Federal Savings Bank in Elizabethtown; Commonwealth Bank & Trust Co.’s acquisition of Florence-based First Security Trust Bank; and Citizens National Bank of Paintsville’s acquisition of Peoples Security Bank in Louisa.

Ballard Cassady

Ballard Cassady

Another five announced between September 2014 and February 2015 await final regulatory approval, according to Ballard Cassady, president/CEO of KBA. The biggest is North Carolina-based BB&T’s agreement in September to purchase Crestview Hills-based Bank of Kentucky for $363 million in cash and stock, an acquisition that garnered national headlines. Others include Kentucky Bank of Paris’s acquisition of Madison Bank in Richmond; and the merger of First Federal Savings and Loan Association of Hazard with First Federal Savings Bank of Frankfort.

In the current climate, BB&T’s purchase of Bank of Kentucky was notable, for both its size and purchase price. Bank of

Walter Byrne

Walter Byrne

Kentucky had been one of the state’s largest community banks, with $1.6 billion in deposits, 32 branches and $1.825 billion in total assets. (Only eight other Kentucky-based banks have more than $1 billion in assets.)

“Of the recent (state deals), BB&T and Bank of Kentucky was the big one,” said Walter Byrne, a banking attorney with Stites & Harbison in Lexington. “I doubt you’ll see one that size again. It’s possible, but not soon.”

Charles Vice

Charles Vice

Charles Vice, commissioner of the Kentucky Department of Financial Institutions, took note of the BB&T-Bank of Kentucky deal as an indication that community bank valuations are recovering. In the industry, he explained, purchase prices are typically described as a multiple or a percentage of the bank’s total capital, which is its “book” value. “If you look at the BB&T deal, (the price) was right at 2.1 times book (for Bank of Kentucky). So potentially we are entering this phase again of higher prices for banks,” Vice said.

Other recent commonwealth bank purchases are occurring at lower book values. “In the heyday of pre-2007/2008 recession,” he recalled, “when things were going well in the economy, bank (acquisition) prices were typically going 2 to 2.5 times book. Meaning that, if you had $10 million in capital, some other bank would be willing to pay you $20 to $25 million.”
The climate changed when the recession and financial crisis struck, however.

“Post-2007, if you were a strong bank with no problems, the typical selling price would be 1.1 to 1.2 times book, just a 10-20 percent markup,” Vice said. With increased M&A activity in the last two years, Vice feels the selling prices for banks are inching back up – though they are not to pre-recession levels.

“What we are typically seeing now are selling prices in the 1.4 to 1.5 times book range,” he said. “I think it’s going to stay Printsteady for a while or maybe increase a bit, because some of the uncertainties have gone away in the market, and competition is starting to come back in.” Don Mullineaux, emeritus professor of banking at the University of Kentucky and chairman of the board of the Federal Home Loan Bank of Cincinnati, agrees.

“For a long time, almost all the deals you were seeing were what are called ‘distress’ deals, where one bank was buying another bank that for all practical purposes was going to be closed down by the FDIC. And when you buy a bank in distress, you are not going to pay a big premium,” Mullineaux said. “Those deals are largely over. And now we are starting to see an increase in premiums.”

Donald Mullineaux

Donald Mullineaux

While Winston-Salem, N.C.-based BB&T’s relatively high purchase price for Bank of Kentucky makes it an outlier in terms of current market trends, the move gives BB&T a coveted entry into the Cincinnati metropolitan area market and its first Ohio branch. “The Bank of Kentucky is a good match for BB&T due to its similar community bank operating model and culture, its focus on customer relationships and its commitment to employee engagement and local communities,” said David White, vice president of corporate communications for BB&T. “Also, this will improve BB&T’s ranking in Kentucky from a No. 4 to a No. 2, add 32 new branches in a strategically attractive market, establish BB&T at No. 7 in the Cincinnati MSA and add $1.6 billion of largely core, low-cost deposits.”

Regulatory demand driving force behind M&A

But what does the continuing M&A trend mean for Kentucky’s remaining community banks? The answer is complicated.

In some instances, mergers can lead to stronger, streamlined, more economically sound banks able to offer a wider range of services, such as wealth management advising, to their customers, Mullineaux said. On the other hand, many in the industry are concerned by the continuing decrease in the number of community banks nationally from a peak of 14,400 in 1984 to 5,571 in fourth quarter 2014, according to Federal Reserve Bank of St. Louis figures. During the same 30-year period, community banks’ share of total U.S. banking assets fell from 41 percent to just 18 percent, while the nation’s largest banks’ asset share grew from 18 percent to 46 percent, according to Forbes.com.

In Kentucky, the number of commercial banks (not including savings and loans) has dropped from a high of 336 in 1984 to 168 at the end of 2014, the St. Louis Fed reports. By the FDIC’s count, as of late February there are 176 banks headquartered in Kentucky, including savings and loans and both state- and federal-chartered institutions. Of those, 151 are state-chartered banks, Vice said. In the past three years, 14 state bank charters have been surrendered due to mergers and acquisitions, he said, but no state-chartered bank in Kentucky has failed since 1987.

The decreasing ranks of community banks is not a new trend. But many, including the KBA’s Cassady, feel the decline of

New Albany, Ind.-based Your Community Bank completed a deal at the beginning of 2015 to merge all locations of First Federal Savings Bank of Elizabethtown into its system. The acquisition brings Your Community Bank’s total number of financial centers to 41 in Southern Indiana and Kentucky.

New Albany, Ind.-based Your Community Bank completed a deal at the beginning of 2015 to merge all locations of First Federal Savings Bank of Elizabethtown into its system. The acquisition brings Your Community Bank’s total number of financial centers to 41 in Southern Indiana and Kentucky.

community banks accelerated post-recession in large part due to increased compliance and regulatory costs created by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. While purportedly drafted to rein in America’s largest banks – especially lending to underqualified borrowers that was at the center of the financial crisis – Dodd-Frank’s regulatory restrictions and compliance demands apply to all U.S. banks, regardless of size.

“Dodd-Frank is killing community banks” is now a common battle cry. It is heard in hometown bank boardrooms; in Congress, as the U.S. Senate Banking Committee began hearings in February on possible concessions for America’s smallest banks; in the media, including Carrie Sheffield’s Feb. 5 opinion piece on Forbes.com; and even in academia, with the Harvard Kennedy School of Government’s recently published comprehensive research report, “The State and Fate of Community Banking.”

In that report, researchers note that since the second quarter of 2010, around the time of Dodd-Frank’s passage, community banks have lost market share at double the rate they had during the previous four years. “The burden of over-regulation since the passing of Dodd-Frank is the No. 1 reason (for the increase in M&A activity),” Cassady said. “The burden of overregulation and compliance is outrageously high. You’ve got a $50 million bank in Anytown America that has to abide by the same rules that a $200 billion bank has to abide by, and that’s just ridiculous.”

Lock dialCassady points to additional regulations following adoption in 2013 of the international banking Basel III rules by the FDIC, the OCC and the Federal Reserve as particularly burdensome for community banks. (Broadly speaking, Basel III requires banks to maintain higher capital ratios than under previous regulations, with stricter definitions as to what constitutes capital.)

“Basel III capital rules were designed for banks that do international capital, only. And yet here in the U.S., regulators decided to make all banks abide by Basel III capital, across the board,” Cassady said. “The original intent of Dodd-Frank was not to hurt community banks; it was meant to keep big banks from doing proprietary trading,” said Dianna Preece, a professor of finance at the University of Louisville who teaches classes on bank management. “And yet all these new requirements that are a function of Dodd-Frank – regulations about mortgage lending and additional reporting requirements, for example – have now hit small banks. There’s been a real sea change because of the regulation, when you look at how banking has changed between 2006 and 2015.”

While the largest banks originally targeted for regulation can afford to hire teams of lawyers and staffers dedicated to compliance, small community banks in Kentucky often “are lucky to have one compliance officer” to tackle the same amount of work, Cassady said. Faced with growing compliance costs that are cut into profit margins already made thin in an era of very-low-interest-rate loans, some small bank boards increasingly view merger as a means of streamlining their overhead, experts said.

“Some of these smaller banks are now looking at merger that may not have even been willing to look at it three or four years ago, before the regulation,” Preece said. “When we see these in-market mergers, of one small to mid-size bank buying another bank that it’s competing with, the primary reason is to cut costs,” Mullineux said. “It’s a means of blending technologies, reducing staffs and finding economies of scale.” Given the climate, experts predict M&A activity to be robust again in 2015.

“I would not be surprised to see another five or six Kentucky banks merge this year,” said Vice. “I do think the M&A trend will continue.” “I would estimate somewhere between seven to nine transactions in Kentucky in 2015,” Byrne said. “That puts us right on par for last year. People are saying the M&A trend could stretch for five to 10 years.” Still, in the wake of Basel III, Preece said, “Everyone is skittish now about how regulators are going to look at their assets, and the quality of their assets, and all of that plays into whether or not M&A deals are going to be approved.”

The role of community banks

In the tumult and public outcry for reform following the Wall Street banking crisis, regulators felt compelled to apply the newvault door compliance standards to all banking institutions without regard to size, Cassady said, largely because there is no commonly agreed upon standard within the industry as to what delineates a national “Wall Street bank” from a local “community bank.”
Recently, Cassady was part of a four-state team of Bankers Association leaders that drafted a proposed definition of a “community bank” based in part on limited size, cross jurisdictional activity and complexity. They submitted it to the chairman of the U.S. House of Representatives Financial Services Committee for consideration.

Team members came to the conclusion that delineating between bank types solely using asset size is misguided. Instead, “you have to look at the bank’s complexity of operations,” Cassady said. “The more complex a bank is, the more regulation it needs. What we found is that there are some $20 billion banks that only take deposits and make loans, which is a very basic, non-risk operation. Then there are those really big banks that get into (securities) ‘market making,’ international activities, derivatives and the like.” The latter type of banks, Cassady feels, do require the type of heightened regulation Dodd-Frank and Basel III outline.

By almost anyone’s definition, all banks based in Kentucky are “community” banks. The Harvard report, for example, defined “community” banks as institutions with less than $10 billion in assets. In Kentucky, more than two-thirds of the state’s 176 banks have less than $250 million in assets, according to the FDIC. Only 48 Kentucky-based banks have assets between $250 million and $1 billon. And just nine have assets greater than $1 billion – eight after Bank of Kentucky’s sale to BB&T is finalized.

A large role in local economies

While Congress may yet offer community banks wholesale relief from various aspects of Dodd Frank’s 90 provisions – a hot-button issue in Washington this year – Cassady feels the more likely outcome may be piecemeal “rifle-shot reform,” such as an exemption from Basel III requirements for community banks. Many in the industry hope regulatory relief – as well as the entry of new banks into the market when regulators become open again to approving new charters – can help community banks retain their market share so that they can continue providing a vital role within their communities.

“If you see a community that is growing, you will find an active community bank in that community,” Cassady said.
Vice agrees. Despite their smaller market share, community banks provided 48.1 percent of small business loans in the United States in 2013, he said. According to the Harvard report, they make 77 percent of all agricultural loans nationally, helping drive business in small-town and rural economies.

“Community banks are a huge boost to their local economies,” Vice said. If public opinion is a sound determiner, it seems safe to say that while M&A deals are likely to continue, community banks won’t disappear entirely.

A recent KBA telephone poll of 600 Kentucky registered voters found that 70 percent of the respondents said they prefer to bank with a locally owned bank, Cassady said. And 85 percent believe that local banks have a positive effect on the quality of life in their communities. ■

Robin Roenker is a correspondent for The Lane Report. She can be reached at editorial@lanereport.com.

Banking and Financial Services, Departments, Economic Commentary, Economic Development, Features, March 2015

It Keeps Getting Better in 2015

shutterstock_128809243Consumer spending is stimulating business investment and hiring,
which means fewer problem loans

While significant uncertainties remain, Kentucky bankers are optimistic about 2015 as the year opens. They see increasing consumer spending generating business investment and hiring, with better employment levels meaning decreases in the number of problem loans. Low energy prices are a significant bonus for the economy, and historically low interest rates are a benefit to the housing sector, even if it means slim margins within which to generate bank profits. The Kentucky banks expect GDP growth will be in the 2 percent to 2.5 percent range. The bigger metropolitan areas are experiencing improvements before the rural areas. There is an expectation that sometime in the second half of this sixth year of slow economic recovery, the Federal Reserve will begin to increase interest rates.

Bill Jones

Bill Jones

Bill Jones, Division Manager, US Bank: “Overall economic activity throughout most of the state continues to improve. Companies both large and small are looking to invest for the future, and consumer spending levels have picked up. It is particularly encouraging to see the consumer activity pick up as that is the fuel for a healthy economy. Export sales are one area that Kentucky continues to see positive trends, although a strengthening dollar may put pressure on this sector. Interest rates, for the first time since 2008, are projected to increase in the second half of the year, with the precise timing uncertain and dependent on economic developments. The banking industry across the board continues to adapt to the new regulations brought on by Dodd-Frank legislation.”

Luther Deaton

Luther Deaton

Luther Deaton, Jr., Chairman, President and CEO, Central Bank: “Kentucky will continue its slow recovery from the recession in 2015. Thanks to the diversity of its economic base, employment will slowly improve. Two major goals need to be creation of high-value jobs and funding for all levels of education. Consumer spending is recovering as confidence improves and the housing industry will rebound if interest rates continue at current levels through the end of 2015. The slow-growth economy has challenged community banks to adopt new standards and strategies. Our bank is working with consumers and businesses to pursue available opportunities that lead to better growth and prosperity for our communities.”

John Taylor

John Taylor

John T. Taylor, President/CED, PBI Bank: “We believe we’ll see more of the same in 2015. We expect moderate overall GDP growth in the 2.0 percent to 2.5 percent range. Levels of uncertainty remain high in our economy, including geo-political risks and their potential impact on energy costs, the unknown associated with increased business regulation costs and the continued roll out of the Affordable Care Act. Finally, the cost of capital for businesses may increase as the Federal Reserve has signaled a potential rate increase in mid-2015. Competitive loan pricing and terms may partially offset these headwinds as banks work to deploy excess liquidity.”

Bill Alveson

Bill Alverson

Bill Alverson, CED, Traditional Bank: “2015 marks our economy’s sixth year operating in an expansion. Our climb out of recession has been slow and steady, with a few obstacles along the way. But as economic fundamentals improve across most sectors, we see the climb poised to pick up momentum, especially as it relates to local business, where we sense a positive shift towards increased investment and hiring. A rise in Kentucky employment and income will equate to reduced financial delinquencies and an increase in demand for housing and other consumer goods, providing a boost to our economy. Most economic experts agree that our economy will sustain economic growth of 2 percent or higher in the coming year. Community banks will continue to play a vital role in providing credit and liquidity services to business owners and consumers, helping to spur economic growth in Central Kentucky and beyond.”

Tucker Ballinger

Tucker Ballinger

Tucker Ballinger, President/CEO, Forcht Bank: “The economic outlook for Kentucky continues to show signs of improvement, however several challenges remain unchanged. Most counties are still experiencing elevated unemployment rates, the state continues to lag behind the nation in terms of labor force participation, and the lack of job growth makes it difficult for many communities to attract new people to the region. However, we remain optimistic as the larger metro markets are beginning to show signs of improvement and are gaining momentum. Loan demand in both the consumer and commercial segments remains soft but has improved over the past 12 months. As a local community bank, we are committed to helping our communities grow and developing business that can stimulate and revitalize the region.”

Tom Partridge

Tom Partridge

Tom Partridge, President/CEO, Fifth Third Bank (Kentucky): “The U.S. economy will continue to expand in 2015, supported by cheap energy prices and an improving labor market. However, labor and manufacturing constraints will limit economic expansion. Fifth Third Bank’s Investment Strategy team expects GDP growth between 3-3.5 percent in the intermediate-term. The decline in oil prices represents a tremendous global stimulus, a windfall whose impact will take time to develop. Federal Reserve policy will take center stage in 2015 and rate normalization might begin without any evident signs of inflation.”

Jean Hale

Jean Hale

Jean Hale, President/CEO, Community Trust Bank:“The Kentucky economy, like the U.S. economy, is seeing indications of recovery. The economic recovery is somewhat regionalized, as was the level of economic downturn, due to the diversity of our economy. Improvements in unemployment rates and business activities have been positive for the banking industry as we have seen increases in loan demand and reductions in problem loans. However, we will continue to experience pressure on our net interest margin as long as the Fed continues to hold interest rates low. We see improvement in most communities we serve in Kentucky, West Virginia and Tennessee; however, some business sectors, particularly coal and natural gas, remain stressed. We anticipate eastern Kentucky and southern West Virginia will continue to have significant economic stress that will impact businesses and individuals.”

Ballard Cassady

Ballard Cassady

Ballard Cassady, President/CEO, Kentucky Bankers Assn.:“2015 started out and will more than likely stay under a cloud of uncertainty. With oil prices falling, the threat of European deflation, guessing when the Fed raises rates and of all things, a strengthening dollar’s negative effect on multinational companies it’s enough to make even the best economist blush with uncertainty. The U.S. economy is still growing slightly above trend, according to federal statistics, and corporate earnings continue to perform to the upside of expectations. With interest rates remaining low for most of 2015, it should be a good year for the stock market and home ownership.”

Heath Campbell

Heath Campbell

Heath W. Campbell, President, Kentucky Region, Branch Banking & Trust: “As 2014 concluded, we have solid reasons to be optimistic about the U.S. economy in 2015. The domestic economic fundamentals are strong with sustained GDP growth in 2014, solid and improving U.S. job markets resulting in unemployment of 5.8 percent, combined with increasing consumer confidence and spending. While our outlook for 2015 remains positive, our optimism for the U.S. markets and Kentucky must realistically be tapered by looming global economic challenges (China and Eurozone).”

 

Jim Rickard

Jim Rickard

Jim Rickard, President/CEO, Your Community Bank: “Your Community Bank is optimistic about economic growth in the region for 2015. Loan demand increased moderately in 2014, and we expect that to continue this year. We are seeing improvement in construction, both residential and commercial, and businesses are increasing their capital investments. The outlook for interest rates is less certain, and everyone will be watching the Fed closely. We will continue to focus on providing excellent customer service to our clients and strong returns to our shareholders. Finally, we are excited to welcome our new customers from our recent merger with First Federal Savings Bank in Elizabethtown.”

Louis Prichard

Louis Prichard

Louis Prichard, President, Kentucky Bank: “In 2014, Kentucky Bank expects marginal economic growth not only in its 10 central and eastern Kentucky counties but throughout the state. Improved employment will be a driver of any sustained growth. Kentucky unemployment is likely to be around 6.7 percent most of the year; as a result, we expect the economy to grow at a 2 percent rate. Home refinancing has virtually stopped; the shift will be towards home purchases, but we do not expect significant residential real estate market growth. Commercial loan growth is improving, but borrowers are still cautious about the uncertainty of the economy surrounding the healthcare Affordable Care Act and additional regulatory burdens on businesses.”

Lloyd Hillard

Lloyd Hillard

Lloyd C. HIllard, Jr., President/CEO, Farmers Capital Bank Corp.: “I’m much more optimistic as we enter 2015. With improvement in employment, there appears to be more confidence among consumers and small businesses. Our loan pipeline reports are improving and small-business lending is up. We’re certainly not back to the pre-crisis levels, and some customers are waiting for more signs of recovery before making any significant expansion decisions. However, the new activity is encouraging. As we see the economy continue to improve and inflation ticks up, we expect action by the Fed in June of this year. We are projecting the Fed Funds Rate to increase 50 basis points by year-end and another 50 to 75 basis points in 2016.”

John Gohman

John Gohman

John Gohman, Regional President – Lexington, PNC Bank: “Lexington’s economy generated momentum in the second half of 2014 that I foresee continuing in 2015. The pace of job growth in the region lagged the nation, but payroll employment is now above its pre-recession peak level compared to the national level. Central Kentucky has a variety of growth drivers to lean on as manufacturing becomes a smaller share of employment. This creates the possibility that incomes grow faster than expected. The drop in gasoline prices will boost consumers’ real disposable income and reduce input costs for manufacturers. Continuing to diversity our industrial base is essential to building on our success.” ■

Banking, Banking and Financial Services, Banking Outlook, Departments, Economic Commentary, Economic Development, Features, March 2015, Wealth Management

Another Up Year for the Stock Market

nest egg

Kentucky wealth management advisers see the likelihood of a seventh consecutive year of the stock market gains, although more modest in 2015 than the remarkable year-on-year returns since 2009. Advisers forecast gains for the year will be under 10 percent.

Despite weaknesses and lingering uncertainty that prevent long-term planning, the U.S. economy is the strongest in the world and its equity market continues to attract investment from foreign as well as domestic sources. The Federal Reserve is expected to begin increasing interest rates in the second half of the year, and continued strengthening of the U.S. will weaken overseas income for multinational corporations. Markets are likely to remain reactive and volatile, which increases the need to exercise care to invest in strong, well-managed companies.

Michael Weiner, Chief Investment Officer, Unified Trust Co.

Michael Weiner

Michael Weiner, Chief Investment Officer, Unified Trust Co.: “Two big-picture themes should dominate the investment landscape for 2015, namely, the price of oil and the relative value of the U.S. dollar. If a barrel of oil falls 10 to 15 percent more in price, producers and oil-producing nations will be in serious trouble and the consequences could be dire. We believe oil prices will be higher this time next year. The U.S. dollar is likely to appreciate versus its partners, and that will help keep interest rates low in the United States and provide a serious headwind for developing nations.”

 

James R. Allen

James R. Allen

James R. Allen, Chairman and CEO
J.J.B. Hilliard, W.L. Lyons LLC: “Moderate economic growth, low inflation and an accommodative Federal Reserve have pushed stock prices to record highs while keeping interest rates near historic lows. These conditions have many investors in a quandary as they look to allocate new capital. Will the Fed finally begin to push rates higher late in 2015? Will the likelihood of higher interest rates thwart some of the euphoria for U.S. equities? The answer to both questions is likely to be “yes.” We can expect slightly higher interest rates, lower bond prices and modestly (4 percent to 6 percent) higher stock prices by the end of 2015.”

Dave Harris

Dave Harris

Dave Harris, Senior Partner, MCF Advisors: “The United States will maintain its position as the world’s economic leader through 2015. Global growth concerns, deflation, geopolitical threats and a stronger dollar could take our rates to new lows in 2015, but we view this as unnatural and unsustainable. We expect the Fed to increase interest rates, though not until later in the year. We continue to emphasize quality in both equity and debt portfolios as volatility likely will remain or increase in 2015. This market volatility could provide an opportunity to increase international allocations as improving fundamentals and the European Central Bank’s loose monetary policy may boost international markets.”

Ernest Sampson

Ernest Sampson

Ernest Sampson, CEO, Private Client Services: “Don’t expect your investment portfolio to have a double-digit return in 2015. Depending upon your portfolio’s asset mix of equities and fixed income, you might do well to break even despite improving unemployment rates and generally positive economic conditions. The Federal Reserve will most likely inch up interest rates by year-end, pushing bonds in an opposite direction along with other fixed-income securities. Equities would have to offset this, which would require a seventh consecutive year of positive returns, which hasn’t occurred before. Lower oil prices will pay an economic dividend throughout the year, pleasing long-term investors.”

 

Todd P. Lowe

Todd P. Lowe

Todd P. Lowe, President, Parthenon LLC:“Taking into account slow global growth but modest and steady U.S. growth, broad domestic markets should experience lower returns than in the past two years. The strong U.S. dollar will provide headwinds for multinational companies, further dampening returns in 2015. Interest rates should rise modestly in the second half of the year. Investors should position their portfolios to take advantage of opportunistic situations in both equity and fixed-income markets. It will be a ‘stock pickers’ year.”

Martin Ruby

Martin Ruby

Marty H. Ruby, CEO, Stonewood Financial Solutions:“In 2015, one word will likely drive our economic outlook: uncertainty. The stock market will stay volatile. Foreign events will have a significant impact on domestic markets. One of the most interesting areas of uncertainty this year is taxes. As the president’s budget proposal showed, Washington is looking for creative ways to raise revenue, including targeting savings products many American rely on, like 529 plans and 401(k)s. There’s also pressure to squeeze more taxes from gross adjusted income. Between taxes, the stock market and an economy that still struggles, many people will rightfully feel economically unsettled as we push through 2015. ?

Banking and Financial Services, Departments, Economic Commentary, Features, Features, Healthcare, Legal Affairs, March 2015, Medicine, Technology

Rising Cyber Insecurity

 

Tumb chain 1st graphic

Potential dire effects vary by business, the type of computer-reliant operations it has and the nature of its data, and these effects can range from mere irritation to significant financial loss all the way up to a closing of the company doors.

Information technology security issues grow more important and urgent for business and industry week by week. Commerce-critical data today is made with intention at work stations as well as streamed by always-connected apps and devices into the cloud – streams that simultaneously make operations more efficient and more vulnerable.
Managers, accountants, healthcare providers, lawyers, retailers, bankers, public officials and more all are joining IT professionals in spending more of their time and energy on cybersecurity matters.

Anti-virus expert Eugene Kaspersky said at an IT security conference in October 2013 that the cost of data system disruption to business is “many times more than $100 billion.” Since then, data breaches have occurred at Target, Neiman Marcus, JP Morgan Chase, Home Depot, Sony Pictures, Anthem and others. However, while these large events attract news coverage, much of the overall cost of data breaches actually occurs at small- and medium-sized businesses because they are often easy targets.

John Askew

John Askew

“You have to assume that you have already been breached to some extent and determine how to continue running your business with that assumption,” according to John Askew, consulting manager and security team lead for SDGblue, a Lexington-based IT services firm.

“Hacking” into computer systems started three decades ago, largely among young men wanting to impress friends with their technical savvy. Nearly all data breaches today are by criminals looking to make money using an array of methods and powerful tools. The realities of computer security are much different than even just five years ago.

One result is that no one is too small to be a target. Thieves formerly tended to individually target the high-dollar score, like fishing with a large pole for that “big one.” Computer-powered automation today, however, enables thieves to fish with a net – which because of volume targeting creates large cumulative results.

Security experts all estimate the likelihood that a specific business’ computer systems will crash or be compromised at 100 percent – a matter not of if but of when. They also agree that most incidents are either preventable or can be cleaned up quickly with proper preparation. Money-sapping downtime can be averted or recovery expedited, reducing costs across the board. This security has a price, but prevention and planning tend to be far cheaper than curing a system shutdown for which a business is unprepared.

Most businesses today can’t run without computers, which are service platforms for credit card processing, tax filing, business websites and interacting with suppliers and customers.

Another recent computer security issue is that Kentucky and 47 other states along with Puerto Rico, the District of Columbia and the Virgin Islands have laws that punish companies found negligent in handling customer data, or that do not notify customers of a breach in a timely fashion.

Barbarians at the gate – and inside

Think of data security, experts say, in terms similar to doors to your business: The more data connection doors you have, the more security you need since doors are generally the most vulnerable points for unauthorized entry – or exit. Every email account is a potential door.

Further data vulnerability exists because businesses have to go through lot of other people’s “doors,” too. Cyber criminals watch that activity with programs designed to sniff out your and their weaknesses.

Many business people are shocked to learn that various studies find from 45 percent to 80 percent of data security issues originate inside the company. Not all are malicious; sometimes an employee password is easily hacked, like the word “password” or “1234567890” or their password is pasted on their desk for anyone passing by to see.

Data security becomes compromised because employees often aren’t trained, or no security guidelines exist and they innocently do something inappropriate. It can be a disgruntled employee or one paid to steal company data. “Drive-by downloads” into business networks can occur when an employee visits a web page with a malware delivery mechanism that is disguised as an ad. Sometimes network anti-virus programs are inadequate (such as free versions) or are not installed at all.

Phishing is most common attack mode

Internal breaches commonly come from “social engineering” attacks, which prey on human behavioral weaknesses. “Phishing,” a common social engineering method, is the most commonly used data assault process seen by those interviewed for this article. And it achieves the most success against users.

Phishing2Phishing criminals, usually using stolen email addresses, “bait” users at a target business with what appears to be an urgent email from a familiar company, such as a bank or retail chain they use. Problems begin if a recipient clicks a link or opens an attached file promising f urther details. The 2013 Target stores holiday shopping season breach that led to 110 million customer credit card records being stolen started with a phishing attack against employees of a subcontractor; Home Depot’s 100-million-customer-records breach in 2014 was a phishing attack.

Phishing messages whose official-looking logos, headquarters information or other content succeed in prompting a click for details instead initiate a download of malware onto the recipient’s device that propagates across the network. The many variations of this trick have worked worldwide millions of times.

“Phishing is the No. 1 problem for us on campus, and that is across faculty, staff and students,” said Brian Purcell, Murray State University’s information security officer and the school’s interim chief information officer. “If we see a phishing attack on campus, we proactively look to see who has responded to it by examining data traffic leading to the offending site. We then change their password and user identification and notify them that we have done so … because data breaches are very expensive to correct.”

A sophisticated variation is “spear phishing” in which attackers research individuals at a company and target them with sometimes surprisingly personal appeals. This technique increases the odds of success so much that spear phishing accounts for 91 percent of attacks. At financial institutions specifically, reported individual losses average $55,000 and some have exceeded $800,000, according to the Washington-based Internet Crime Complaint Center.

Phishing is one of the most common consumer complaints the Kentucky Attorney General’s Office gets, said Daniel Kemp, deputy communication director.

“Many of the calls lately extended from attempts to dupe consumers affected by the recent Anthem (Blue Cross Blue Shied) data breach,” Kemp said. “Getting trained in spotting these threats is one of the most effective defenses a business or consumer has. We have staff who go around the state training consumers in our Scam Jam classes. Face-to-face training is always effective, and every business should consider it for their employees.”

Who are the phishers? They come from around the world. The Chinese and North Korean governments have often been accused (e.g., the Sony Pictures Entertainment hack), as have criminals in former communist bloc countries, South America and in the United States. A town in Romania’s Transylvanian Alps, Râmnicu Vâlcea, population 120,000, is called the cyber-crime capital of the world, but it has only two government agents assigned to combat digital law-breaking. Regardless of their origin or motivation, the criminals are after your system, your data, your customers and your money.

Those illegally harvesting customer data often bundle their stolen info and sell it to others to avoid being caught using it – they let others do the phishing or scamming. It makes arrests and prosecutions difficult, and even if they are caught, restitution for victims’ losses is rare.

Assessing costs, value, safety and savings

Brian Purcell, Information Security Officer, Murray State University

Brian Purcell, Information Security Officer, Murray State University

The good news is that with appropriate measures, a business network can be kept reasonably-to-very safe. Although the due diligence of installing, maintaining and securing computer systems can be costly, security breach costs can be far, far more.
“PCs and computing resources are now a utility, not a luxury. IT security is often regarded as a discretionary cost, but it’s not – it should be fixed in the budget of every business,” Purcell said.

The term “disaster recovery” refers to being able to restore a computer system to the state it was in a short time before a failure. Only very rarely is this the result of a fire, flood, lightning strike or tornado, although those are considerations. Much more commonly it means a single computer’s hard drive fails and ruins all its data, which a business must recover to get back to work; or a server dies, corrupts a wider swath of data and shuts down daily operations.
Business IT disaster recovery plans often mean having off-site backup in case equipment is

tolen or offices are too damaged to use. With off-site data storage, operations can be restored in a temporary location and to continue to serve customers and avoid losing revenue also.

 Dave Sevigny, President, DMD Data Systems

Dave Sevigny, President, DMD Data Systems

“A company with six PCs that has no regular service vendor for support, and that hasn’t been getting regular system evaluations, is usually down two or three days,” according to Dave Sevigny, president of Frankfort-based DMD Data Systems, a regional IT services provider. “A company that has an established relationship is usually down about a half day. There is no substitute for qualified help.”

Sevigny and others advise considering the question: How would being without computers for two or three days affect your company?

“Today’s technology is more robust, more resilient and has more ‘call home’ properties that alert us, often before the customer knows they have a problem,” he said. Clients “have fewer problems if they make an effort to keep up their systems and allow us to help them. That’s what IT professionals do.”

An office technology policy can avert some of the latest threats to business. Sevigny advises caution regarding “the bring-your-own-device (BYOD) trend of letting employees bring smart phones and tablets into the office with no supervision, and even letting them do (company) work with them.

“While an employer might think he’s saving money by having employees use their own equipment to perform tasks for which the business formerly provided the equipment,” he said, “they are also opening themselves up to some real security problems. Giving someone open access to a business network when you can’t control what happens with that device after work is a very risky proposition.”

Lack of knowledge, lack of preparation
Investing in IT security and disaster recovery is less costly than restoring data from bits and pieces, or going back to printed records. Data breaches mean lost customers and tarnished business reputations, especially when customers must be contacted to inform them sensitive personal data is now “in the wild” and in the hands of criminals.

In calculating a budget for IT security and disaster recovery, managers are advised to consider their company’s average revenue or profit per hour or per customer, then assess the potential cost of lost operating hours or customers. At what point would losses become critical? At what point would the business be fatally crippled?

Many businesses lack security and data recovery plans.

Russ Hensley, CEO,  Hensley Elam Associates

Russ Hensley, CEO,
Hensley Elam Associates

“Kentucky lags the national averages for a variety of reasons,” said Russ Hensley, CEO of Hensley Elam Associates, a regional data services firm with headquarters in Lexington. “Despite the routinely quoted (estimate that there are only) 30 percent of businesses with adequate protection, we may be as low as 10 percent for companies with appropriate backup and disaster recovery plans.”

Lack of knowledge is thought to be the main reason why. “Most of them simply don’t know the risks, or they think it won’t happen to them because it hasn’t happened yet,” Hensley said. “They don’t realize their employees are usually their biggest threat. They often see the backups and IT security as something being sold to them versus being a real asset. Since they have never had an incident – despite some of them already being infected with malware and they don’t know it – they either balk at the cost or don’t see the need.”

Studies estimate the cost of repairing a data breach at $185-$195 per customer. That’s $18,500 for 100 customers or $185,000 in losses for 1,000 customers. Repairs can take months as little issues continue to present themselves. It’s fairly common for some data to be lost forever, complicating making financial books whole again. Damage to reputation and trust can mean a loss of current customers and future business.

Studies show preventive measures do reduce per-customer losses for data breaches: $14 less for companies with comprehensive security policies and procedures; $13 less when the company has an incident response or disaster recovery plan; another $7 less if a well-trained staff person serves as the chief information security officer. Those steps lower average losses to $151 per customer.

Mitigation but no 100% guarantee
Locks“There’s a saying in our industry that computer security always seems to cost too much, but still is never enough,” said Jerry Bell, a computer security consultant and founder of the DefensiveSecurity.org website and blog in Atlanta. “Computer security is something like what they say about those who fight terrorism: We have to be right all the time, but they only have to be right once.

“There is no 100 percent guarantee against hacks or data loss,” Bell said. “Everyone is a target, too. There are breaches and attacks going on at all levels – from giant financial firms all the way down to parking garages. Statistics don’t tell the whole story because many breaches are not reported to authorities. The fear of damage to a company’s reputation is pretty powerful.”

One product that can mitigate the cost of data breaches, he said, is cyber-security insurance, which many companies now offer. Data breach coverage can mitigate costs in any case, and especially when the policyholder is not to blame.
“When a breach happens and a claim is paid, the insurance companies are looking for those responsible for the breach,” said Bell. “If (the insurance company) pays a claim, then someone else is likely to wind up paying the insurance company.

“Take some of the big, well-known, national companies whose data breaches made headlines in 2014. There are lawsuits against some of them by their vendors, like credit card processing companies, and those vendors’ insurers to cover the costs of cleaning up the mess,” he said. “They lay the blame at the feet of the big company, and that mess includes new cards, reimbursements, credit monitoring and many other charges.”

All the experts in this article concur that, on average, only about 30 percent of businesses today have adequate security and a disaster recovery plans – not elaborate security, but decent protection and enough to help with recovery.

“The one thing that keeps me awake the most at night is how our data is handled,” said Purcell at Murray State. “We’ve been collecting people’s personal data since the late ’80s, and the standards for security were different then. We’re like any other business in that regard. That legacy data is very valuable, and we have the responsibility for protecting it.” Most businesses are in the same boat.

The most common lament among the IT security professionals interviewed is that customers reel when told the cost to adequately protect their systems but don’t understand the value of that investment.

For example, initiating recommended system security measures might cost a small to medium-sized business $10,000 up front and another $300 in costs per month to monitor the system security, perform maintenance and pay for regular professional services ($3,600 per year). Under this scenario, first year expenses are $13,600; subsequent years might total $5,000 when software upgrades, checkups, equipment replacements, etc., are included. This is a five-year cost of $33,600, or $6,720 per year. It’s a considerable budget line.

If this business has 300 customers, however, using the $185-per-customer cost for a breach that studies found, a data system problem could cost $55,500. That’s about $22,000 more than the cost of IT system security.

Compliance does not mean security

Michael Gilliam, Security Team Lead, SDGblue

Michael Gilliam, Security Team Lead, SDGblue

In managing costs, businesses generally opt for meeting legal or regulatory obligations as an expense baseline.
“Compliance does not equal security,” warns Michael Gilliam, consulting manager and security team lead for SDGblue. “Security is a very complex issue to tackle (and) it becomes harder to defend the individual information systems and the organization as a whole as it grows.”

A lack of dedicated resources to implement an effective security program is the biggest issue SDGblue sees, Gilliam said.
“Security (is) often viewed as a cost center that needs to be minimized,” he said.

That anemic approach is further weakened when “combined with a confusion with regulatory compliance,” The word Compliance in blue 3d letters surrounded by related terGilliam said. A managerial view that data security resources are “dedicated to avoiding fines stemming from violations makes security often nothing more than an afterthought, prioritized only when it is too late.”

State and federal government requirements to notify customers of a breach are considered burdensome and complicating factors. However, the cost of doing so is small compared to the fines and penalties for not doing it in a timely fashion, and far less than criminal or civil charges, or lawsuits by customers.

There are major additional compliance issues in the medical field, which also must comply with complicated federal HIPAA and HITECH regulations.

The Health Insurance Portability and Accountability Act of 1996 mandates the confidentiality and security of healthcare information. Health Information Technology for Economic and Clinical Health Act of 2009 anticipates a massive expansion in the exchange of electronic protected health information.

“The cost of a breach to medical clinics can be staggering,” Hensley said. “One doctor had a laptop stolen with 2,000 patient records, and none of the data was encrypted (to make it unreadable to the thieves). They were fined $150,000 by the government for non-compliance – un-encrypted laptops are the No. 1 cause of fines. It used to be that large clinics were the ones fined, but now smaller offices are seeing fines, and they are never cheap. For the largest companies, there have been fines of $12-14 million. It’s quite serious.”

Breaches trigger legal obligations
Hensley holds the advanced Certified Information Systems Security Professional credential, which in addition to technical expertise requires knowledge of IT’s legal and financial issues. The CISSP credential is valued especially in the healthcare sector and other operations with high-stakes compliance obligations. Hensley said it improves his ability to advise clients about avoiding potentially expensive situations.

“For instance, I’ve seen cases where attorneys took a patient’s medical records into their office for a case. This puts the lawyers at tremendous risk because they think the attorney-client privilege protects them, but that’s not entirely true,” he said. “By assuming responsibility for those records, they are now under HIPAA laws and subject to penalties.”

Meanwhile, state legislatures are enacting new cybersecurity laws and reporting requirements, creating legal obligations sometimes to notify customers and staff about a data breach – or to not notify them because the breach is under a criminal investigation.

In Kentucky, HB5 and HB232 cybersecurity laws passed in the General Assembly in 2014 are now in effect. They changed the way the commonwealth’s businesses are required to store customer data and protect confidentiality. Depending on who is potentially affected, businesses and other entities that experience a data breach must contact the Kentucky State Police, state auditor of public accounts, state attorney general, Kentucky Department of Education or the Council on Postsecondary Education.

HB 232 defines what businesses must know about an electronic security breach, sets deadlines for informing customers and staff and whether to notify law enforcement.

Frank Goad is digital editor of The Lane Report. He can be reached at frankg@lanereport.com.

Banking and Financial Services, Economic Development, Education, Passing Lane, Uncategorized

Mullineaux to chair Federal Home Loan Bank

Noted commonwealth banking authority Donald J. Mullineaux is the new chairman of the board at the Federal Home Loan Bank of Cincinnati.

Don-Donald-Mullineaux-chairman-cincinnati-federal-home-loan-bank-board

Don
Mullineaux,
Federal Home
Loan Bank of
Cincinnati
Chairman of
the Board

Through its Housing and Community Investment department services, FHLBank supports member institutions and community lenders’ affordable housing and economic development initiatives in the Fifth District of Kentucky, Ohio and Tennessee. Services include special funding programs and technical assistance targeted to help meet low-income residents’ needs, and strengthen local business environments and communities.

Emeritus duPont Endowed Chair in Banking and Financial Services, Mullineaux retired in 2014 from the University of Kentucky’s Gatton College of Business and Economics after 30 years on the faculty. He has been a FHLBank board member since 2010. His two-year term as board chair began Jan. 1.

“I am honored that my colleagues on the board saw fit to select me for this important position,” Mullineaux said. “This institution provides financial services to member institutions in support of housing and economic development in Kentucky, Ohio and Tennessee.”

Holding an economics Ph.D. from Boston College, Mullineaux is a former senior vice president and director of research at the Federal Reserve Bank of Philadelphia, and has been curriculum director of the American Bankers Association’s Stonier Graduate School of Banking since 2002.

Mullineaux received numerous awards and honors for his teaching and research during his three decades as UK. He is regularly sought out by members of the news media, including The Lane Report, for his expertise on banking and finance issues.

“The FHLBank of Cincinnati is indeed fortunate to have a person of Don Mullineaux’s knowledge and experience to serve as its chair of the board,” said David W. Blackwell, dean of the Gatton College.

Banking and Financial Services, Faster Lane

KHIC executive Moncrief to retire

Moncrief’s work recognized nationally

l-ray-moncrief

L. Ray Moncrief

LONDON, KY — Since 1989, Ray Moncrief helped create 14,000 jobs for almost 600 businesses in Southeastern Kentucky as executive vice president and chief operating officer for Kentucky Highlands Investment Corporation (KHIC). He retired from that position Dec. 31 but is to continue leading Meritus Ventures LP, a KHIC-managed $36.4 million venture capital fund focused on rural investing; and Southern Appalachian Fund LP, a KHIC-managed $12.5 million venture capital fund focused on investing in low-income census tracts.

Moncrief moved to Kentucky in 1978 to be chief financial officer of Outdoor Venture Corporation (OVC), a military tent manufacturer in Stearns, Ky. OVC diversified and remade itself to stay competitive and employs more than 230 people. Among his many accomplishments, Moncrief designed a bankruptcy reorganization plan for Southeastern Kentucky Rehabilitation Industries, Inc, (SEKRI) which provides employment opportunities and rehabilitative services for disabled and socially disadvantaged idividuals.  SEKRI expanded into three additional locations and currently employs 500 people.

His most recent efforts have resulted in the development of the New Markets Venture Capital model, Rural Business Investment Companies, and Appalachian Community Capital which will provide millions of dollars of capital for investment in disadvantaged communities throughout the country.

“Ray is a pioneer and a singular leader of the national community development venture capital industry, whether as chair of the board of the Community Development Venture Capital Alliance, working tirelessly for public policy to promote entrepreneurship and job creation in low-income and rural communities, or selflessly sharing his extensive knowledge and experience with new entrants to the field,” said Kerwin Tesdell, president of the Community Development Venture Capital Alliance, the association of venture capital funds that provide equity financing for businesses that create good jobs and entrepreneurial capacity in low-income communities in the United States and around the world.

Banking and Financial Services, Faster Lane

Community Bank Shares completes merger with First Financial Service Corp.

Community Bank Shares of Indiana, Inc., announces merger completion with First Financial Service Corporation of Elizabethtown, Ky.

Community Bank Shares – First Financial Services – First Federal Savings BankNew Albany, Ind., (January 2, 2015) – Community Bank Shares of Indiana, Inc. (NASDAQ: CBIN), the holding company for Your Community Bank and The Scott County State Bank, announced today that it has successfully completed its acquisition of First Financial Service Corporation (NASDAQ: FFKY). Community Bank Shares, First Financial Savings Bank, merger completed

As part of the agreement, First Federal Savings Bank of Elizabethtown, a wholly-owned subsidiary of First Financial Service Corporation, merged with and into Your Community Bank. The former locations of First Federal Savings Bank of Elizabethtown will be operated as financial centers of Your Community Bank under the name of First Federal Savings Bank until system conversions are completed in March of 2015. The acquisition and merger was first announced on April 22, 2014. CBIN and FFKY shareholders approved the acquisition on December 16, 2014, and all regulatory approvals were completed that same month.

With the acquisition, CBIN now has 41 financial centers throughout southeastern Indiana and Kentucky and estimated total assets of approximately $1.6 billion.

James D. Rickard, President and CEO of Community Bank Shares of Indiana commented, “Community Bank Shares is stronger than ever, and we’re eager to provide our outstanding menu of products and services to new customers in the region. With this merger, we are increasing our market presence in the Louisville and Bardstown areas, and creating new opportunities in Bullitt, Hardin, Hart and Meade counties. Culturally and geographically, this is a fit, and it aligns with our vision for growth.”

Banking and Financial Services, Features, Features

Slow, steady progress is rebuilding bankers’ confidence

shutterstock_149790431Kentucky bankers are a conservative lot, so if their collective outlook on the economy has grown optimistic – even if it’s not exactly enthusiastic – that counts for a lot. Consumers have paid down their debt loads the past five years and are beginning to feel good about rising home equity, which is central to their general financial well being. Employment levels have slowly improved and while still not strong the needle keeps moving away from the danger zone. Interest rates remain at historic lows and should stay that way at least through the end of 2014.

Worldwide demand for bourbon continues to grow, and distillers are expanding. The Kentucky Bourbon Trail is lifting tourism. The business community remains cautious and still sees uncertainty regarding healthcare policy, but balance sheets are healthy – owners and managers as well as bankers are poised to pursue new opportunities. Bourbon is producing a shot in the arm for Greater Louisville, but Eastern Kentucky coal country will have a hangover as long as current regulatory conditions continue. The commonwealth economy is nearing the critical mass of consumer confidence that will produce a virtuous cycle of spending, home construction, rising demand and hiring that will reinforce ongoing growth and better times.

 

“With branches in more counties than any other bank, we have a broad view of Kentucky’s economy. On the business side, we’ve seen the automobile industry rebound nicely with Ford and Toyota recently announcing expansions in Kentucky. On the other hand, energy and healthcare, two drivers of our economy, face changes and companies in those sectors may spend the year adjusting before they’re able to focus on growth. On the consumer side, we expect the home mortgage market to continue to shift from refinances to new purchases. Last year, we expanded again in Owensboro, adding 300-plus jobs to our U.S. Bank Home Mortgage office.”

William “Bill” Jones, Division Manager
U.S. Bank Community Banking

 

“Business leaders are still taking a cautious approach to borrowing due to continuing uncertainty surrounding the U.S. economy. Recent financings have resulted primarily from strategic acquisitions, and we expect this trend to continue throughout 2014. As the Kentucky economy continues to mend, we continue to grow and add new clients in our commercial banking business; our focus in helping companies growing globally helped differentiate us in the marketplace.”

Paul Costel, Kentucky President
Chase in Kentucky

 

“The U.S. economy continues recovering at a very slow pace. With diverse drivers, Kentucky’s economy did not weaken as dramatically as other areas. Central Kentucky felt the greatest stress but is showing the greatest improvement. We see improvement in most communities we serve in Kentucky, West Virginia and Tennessee; coal and natural gas are negatively impacted by oversupply (winter weather has lowered gas supply) and low prices; coal also has a regulatory burden. Eastern Kentucky will continue to have significant stress. Conditions continue to vary within the state by region, and improvement will continue at a slow pace. The diversity of the geographic areas Community Trust serves allowed us to continue our history of profitability. We are poised to seize opportunities as the economy recovery continues.”

Jean R. Hale, Chairman, President and CEO
Community Trust Bancorp

“In 2014, Forcht Bank is optimistic our local and national economies will continue to improve. We anticipate businesses to remain conservative with their cash and working capital. The housing market continues to make modest gains, and consumers are seeing equity restored to homes. Increase in equity will improve the financial situation of many homeowners and put them in a better position to sell or buy new homes. While we continue to see changes in our industry, our mission remains unchanged in providing a level of customer service that exceeds our competition.”

Tucker Ballinger, President
Forcht Bank

 

“CUB is cautiously optimistic about 2014. Confidence at the small business level is improving and owners are beginning to pursue expansions. Profits are improving and, while cautious about hiring, business owners continue to look for opportunities to make operations more efficient. Loan demand was steady the last six months of 2013 and continued into 2014. Housing is improving in single-family homes, new construction and multi-family projects. We are very active in the affordable housing/Low Income Housing Tax Credit market. Interest rates have trended up but are still very affordable compared to historic levels. We expect the broad economy and unemployment in our markets to continue their gradual positive trend and for overall consumer confidence to increase.”

David M. Bowling, CEO
Citizens Union Bank

 

“According to the Federal Reserve, U.S. commercial banking in 2013 increased lending by $137 billion; efficiently took in over $500 billion in deposits; improved online banking services; and rewarded shareholders with higher dividends and stock prices. In 2014, U.S. banks will continue to implement a very complicated Dodd-Frank law, while taking cues from the Federal Reserve as to when and if short-term interest rates may start to improve. Overall, banks should follow an improving U.S. economy as we move further from the Great Recession – and balance sheets improve for businesses and individuals. Look for real U.S. GDP growth to move from the 2 percent range to the 3 percent range during the year. Good news.”

Tom Partridge, President & CEO
Fifth Third Bank Kentucky

 

The outlook for our micro-economy looks very good for 2014. Central Kentucky will continue to benefit from strong growth in the distilled spirits industry, especially bourbon. Distilleries are in an aggressive expansion mode trying to keep up with increasing demand that will continue to stimulate not only with the distilleries but contractors and service industries. The auto industry in our region has been fairly robust with Tier 1 and Tier 2 suppliers adding employees. The Ford plants in Louisville are a big factor. The success of the Bourbon Trail and downtown Bardstown’s distinctions as a Kentucky Certified Cultural District, as The Most Beautiful Small Town in America by Rand McNallyand Travel Leisure magazine, and as “One of the best small towns to locate a business” by Site Selection Magazine contributed to tourist and retail traffic.

Frank B. Wilson, President CEO
Wilson & Muir Bank & Trust Co.

 

“In 2014, Kentucky Bank expects marginal economic growth not only in its 10 Central and Eastern Kentucky counties but throughout the state. Improved employment will be a driver of any sustained growth. Kentucky unemployment is likely to be around 6.7 percent most of the year; as a result, we expect the economy to grow at a 2 percent rate. Home refinancing has virtually stopped; the shift will be towards home purchases, but we do not expect significant residential real estate market growth. Commercial loan growth is improving, but borrowers are still cautious about the uncertainty of the economy – surrounding the healthcare Affordable Care Act and additional regulatory burdens on businesses. Despite these uncertainties, Kentucky Bank has been able reach record growth in assets.”

Louis Prichard, President
Kentucky Bank

 

“We are optimistic. Good news on real estate values in the commonwealth markets we serve will create additional lending opportunities. Rates remain very favorable for borrowers and, subject to our ability to help our clients overcome the intense regulatory burden, we continue to lend at good levels. Consensus is that rates will stay low as the economy rebounds slowly, which should present lots of buying/lending opportunities. Soundness and solvency, balanced with generating returns, are the banking industry’s new imperatives. Strong credit quality and capital levels well position Republic to take on growth opportunities for our clients and the communities we serve.”

Steve Trager, Chairman and CEO
Republic Bank

 

“PBI Bank’s general sentiment is that Kentucky’s economic and business environments will continue to show progress in 2014. Challenges remain, however, as levels of uncertainty and caution are elevated in many areas, including overall increase in business regulations and associated costs. We expect continued incremental GDP growth in 2014 of around 2 percent, and a continued low interest-rate environment, but with increasing risk that rates may rise on the long end of the treasury yield curve.”

John T. Taylor, President and CEO
PBI Bank

 

“A heavy regulatory environment, increase taxes and a new entitlement program in the form of healthcare will continue to put a chill on business expansion, true employment and capital expenditures. This will continue to affect banking industry lending efforts. The industry enjoyed higher earnings last year but primarily due to a reduction in loan loss provisions and litigation reserves along with slight improvement in loan demand. The industry will try to uncover loan demand in 2014 that fits within the government regulatory regime while continuing to improve its asset quality, a task easier said than done. An increase in consolidation of the industry is still forecast primarily due to the inability of smaller banks to mount the escalating cost of government compliance.”

Ballard Cassady, President and CEO
Kentucky Bankers Association

 

“Talk with any community banker these days and you’ll likely hear concerns over continued margin compression, dramatically increasing regulatory costs and stiff competition for quality lending opportunities. While we share these sentiments, our forecast for 2014 is one of cautious optimism. The once debt-burdened consumer is on firmer footing and spending more wisely. Unemployment persists but by most measures is incrementally improving. With housing prices stabilizing, consumer confidence is slowly being restored. Businesses are reaping the benefits of expense reductions and productivity enhancements implemented since 2008. These positive indicators lead us to believe there will be opportunities for modest revenue growth in 2014.”

Linda Rumpke, President and CEO
Town and Country Bank and Trust Co.

 

“Kentucky needs to create new high-value job opportunities, and funding for education is at the heart of that. The governor has proposed tax reform that can create revenue to fund pension reform and increase support for education, but the legislature doesn’t appear inclined to address it. If we are going to create better jobs, a well-trained workforce is essential. Recovery from the recession has been slightly better than the nation as a whole. Consumer spending is recovering and the housing industry is rebounding. Interest rates should continue at current levels at least through the end of 2014, fueling growth in home construction and sales. The slow-growth economy has challenged community banks to adopt new standards and strategies. Our bank is working closely with customers to build upon available opportunities that will lead to better growth and prosperity for our communities.”

Luther Deaton Jr., Chairman, President & CEO
Central Bancshares Inc.

 

“We envision modest economic growth in Central Kentucky during the spring and summer months as businesses and consumers shake off the doldrums from a cold and snowy winter. Short-term interest rates will remain at historically low levels throughout the period, while longer term rates trade in a fairly narrow range close to where they are now. Relatively low mortgage rates should be a bright spot for our community as consumers move up to larger homes. High profile development projects such as CentrePointe in downtown Lexington will add fuel to our local economic engine.”

Bill Alverson, President
Traditional Bank

 

“Our economy continues to progress modestly despite numerous headwinds, but there are fair odds that 2014 could surprise on the upside. Housing has stabilized and continues to recover with normalized inventory levels, mortgage interest rates remain at historic lows, and banks are eager and ready to lend to qualified borrowers. Corporate America is well capitalized and many companies find themselves post-recession to be as efficient as ever and well-positioned for growth. The headwinds look like consumer and corporate confidence combined with an ever-changing and expanding regulatory environment. With the potential of improving confidence, we maintain a positive outlook and remain optimistic.”

Heath W. Campbell,
 President, Kentucky Region
Branch Banking & Trust

 

“Louisville-Lexington’s economic performance will be in line with the nation in 2014 with the area’s jobless rate breaking through 6 percent around mid-2015. The success of the Louisville-Lexington economy over the coming years will be credited to the market area’s diverse industrial base. It hosts a wide array of large, successful employers from auto manufacturing to education to professional services. This sustains its ability to weather most economic turbulence and to suffer less through downturns. UK and UofL are stable sources of employment and attract young people to the area. Other big players such as Toyota, GE, Ford and UPS provide well-paying jobs in dynamic industries that respond strongly to the business cycle.”

Charles P. Denny, Regional President
PNC Bank

 

 

Banking and Financial Services, Features, Features

Return of the virtuous economic cycle?

financial_inves_outlook _87260365Kentucky wealth managers see a solidly improving economy for 2014, but with definite challenges for investors seeking specific sectors to place their assets. Expectations are that ongoing improvement in overall employment levels and in household wealth will strengthen overall consumer spending to produce the virtuous economic growth cycle everyone has been waiting five years to see. However, ongoing change and realignment of sectors from the micro to the macro still must be accomplished.

For example, China is in the midst of broadening its economy away from a reliance on manufacturing. And there is some sentiment that the doubling of the equities market since its 2009 nadir, including 30-plus percent growth in 2012, suggest a correction in 2014 or  some sort of cooling. An improving economy will mean rising interest rates also factor into investment plans, complicating management of assets.

 

“Following a dramatic recovery from the market lows of 2008, and a very strong 2013 market, investment advisors should experience a good business climate in 2014. While it is not anticipated that market returns will be as strong this year as last, decent U.S. business conditions – although likely with the overhang of continued relatively slow growth – should lead to modest gains in markets and advisor revenues and operating profits.”

Todd P. Lowe, CFA, President
Parthenon LLC

 

“As an actuary I manage risk, and today’s economy is teeming with it. Savers and investors face three big challenges in 2014. First, interest rates are expected to stay low, making it hard to find attractive returns without taking on a lot of risk. Second, while I expect we’ll have a modest year of market growth, it’s becoming clear the market is heading toward a correction in the near future. And third, after various tax increases over the past few years, the tax climate remains a question mark for savers and investors alike. Together, it’s a lot of risk to manage.”

Martin H. Ruby, FSA, CEO
Stonewood Financial Solutions

 

“The U.S. and global economy will continue to expand and pick up steam in 2014. We continue to see evidence of an increase in sales of cars and houses, and companies gearing up to meet growing demand are increasing capital expenditures. This corporate investment and consumer spending appears to be set to drive the next phase of stronger economic activity. We see an environment of low inflation, low but rising rates and a pickup in economic activity as a “sweet spot” for equities and would use any sort of correction as an opportunity to selectively add positions to portfolios.”

Travis Musgrave, Wealth Management Advisor
Merrill Lynch

 

“The increasingly uncertain path for emerging markets in 2014 will be the key variable in what most likely will be single-digit global equity returns and global interest rates that will be lower than they otherwise would be this coming year. Five emerging countries have to take serious restrictive measures if they hope to keep foreign capital in their countries. China, the second largest economy in the world, is attempting to pivot its nation away from a manufacturing base to one based primarily on consumption. Investing in quality companies is the best prescription for dealing with this uncertainty.”

Michael Weiner, CFA® Chief Investment Officer
Unified Trust Co.

 

“2014 will have similar challenges to 2013. Central bank liquidity and stimulus programs will shape capital markets and returns. Central banks will continue supporting asset prices, but it’s unlikely that cash flows, revenues, and multiples can expand like 2013.  It’s equally unlikely that rates will remain stationary. Thus, we expect modest equity and interest rate increases. We base this view on the continued recovery in western economies, uneven recovery in emerging markets, slow migration from deflation to inflation, and shift in global expectations to “overly” positive views of central banks’ ability to contain the financial dislocation of accommodative monetary policy.”

Dave Harris, Senior Partner [Bob Sathe, Mark Botto, Andy Sathe & Jeff Jennings] MCF Advisors

 

“We are viewing 2014 with cautious optimism. Equity markets are not likely to replicate 2013’s performance, but there is positive momentum. Corporate earnings growth is a concern. Earnings have benefitted significantly from cost containment to include lower interest expense and I believe future earnings will need to rely more heavily on top line revenue growth. In the end, I feel modest growth will push the equity markets higher in the range of 6 to 8 percent. Short-term interest rates will likely remain unchanged while intermediate and long-term rates will be slightly higher to reflect economic progress and “tapering” by the Fed.”

James R. Allen, Chairman and CEO
J.J.B. Hilliard, W.L. Lyons, LLC

 

“After several years when economic policy uncertainty, cautious consumers and additional regulations seemed to weigh down economic growth, conditions look better for 2014. The economy started picking up steam in the second half of 2013, finally growing faster than 3 percent. An improving job market and rising household wealth both support higher spending and confidence, creating a virtuous cycle. We expect the U.S. economy to accelerate slightly in 2014 from its average recovery pace, as the Federal Reserve steadily reduces its stimulus. An improving economy provides support for rising stock prices over time. We also expect long-term interest rates to rise as the Fed slowly reduces its bond purchases. Portfolios need the appropriate mix of stocks and bonds to stay balanced during the changing times ahead.”

J. Todd Hall, AAMS®, Financial Advisor
EdwardJones