Pub. 1 2012 Issue 6

Aug/Sept 2012 7 l e a d i n g a d v o c a t e f o r t h e b a n k i n g i n d u s t r y i n k a n s a s the Discovery Channel’s Eco-Challenge in 1997. Along with her team members, three U.S. Navy SEALS, she spent ten days trekking across Australia with the goal of finishing in the top ten of 48 participating teams. Julie recounted the trials the team faced during the competition, including adverse weather, food shortages, lack of sleep and injuries. Julie emphasized that the lesson she learned from the experience was that if a team shares a set of core values and a single vision, then the team can accomplish great things. Juli reminded bankers that challenges should not be avoided, but instead, embraced, thereby creating new opportunities. William Conerly, Ph.D. gave a talk titled “The Future of Banking; Managing in the ‘New Normal.’” He looked at the future of banking using three different measurements – increased cyclicality, taxes and labor force issues, and bank earnings. 1 . Using a variety of different yardsticks, Dr. Conerly described the reasons for the increasing rate of economic cycles, with bigger booms and bigger drops. He suggests that banks will have to take a longer view of the cycle to avoid the boom-bust. 2 . With huge entitlement deficits and the overall budget deficit, taxes will likely increase significantly at some point. 3 . Bank earnings will not be at the levels we became accustomed to be- fore the recession hit. The cost of compliance, decreased loan demand and more regulatory scrutiny of loans made, will all put pressure on earnings. The push for higher capital ratios will not allow for higher return on equity numbers. Conerly predicts that we will continue to see the number of banks drop as costs go up and as directors suffer director fatigue. Conerly identified three disconnects for the industry: front-line staff morale, which according to polls is at an all time low; young loan officers that really don’t know credit; and young customers that want new services. The agenda going forward for bankers is: • Anticipate more balance sheet change • Anticipate more credit quality change • Improve employee retention and recruiting • Communicate realistic ROE expectations • Play to strengths: low cost or high service • Know your people and your customers ABA Chairman-Elect Matt Williams, COB/President of Gothenburg State Bank in Gothenburg, Nebraska reassured Kansas bankers the American Bankers Association (ABA) would continue to lead the charge to minimize the negative impact of Dodd-Frank and the mountain of new rules and regulations being promulgated from the burdensome new law. Williams also shared that seeking parity with the tax-advantaged Farm Credit system is also a top priority of the ABA and the Alliance of State BankingAssociations. Williams praised the many Kansas bankers serving in leadership roles within theABAand implored bankers to stick together stating, “We must continue moving forward as a unified industry. Our position is significantly weakened if we allow ourselves to be divided.” The conference concluded with economist, Dr. Ed Seifried’s pre- sentation, “The Economy in 2012: A Mid-term Progress Report.” His conclusion is that while our economy will be going back to a period of KBA Treasurer Bob Leftwich and Chairman- elect Leonard Wolfe sport colorful bow ties in recognition of newly appointed KBA Chairman Frank Carson. Esther George, President, Federal Reserve Bank of Kansas City, discussed attending a recent meeting of the Federal Open Markets Committee. An optimistic economic outlook driven by growth in the domestic energy sector was provided by Dr. Seifried. Juli Lynch, ultra-marathon runner, gave a passion- ate talk about overcoming obstacles and being willing to push yourself. continued on page 8