Pub. 6 2017 Issue 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 8 2017 ANNUAL CONFERENCE FOR LENDERS Holly Hoffman stayed after her presentation to chat with attendees. Pictured left to right are Gary Coleman, Kendall State Bank, Valley Falls, Don Cushing, FHLBank Topeka, and Holly Hoffman, Survivor Nicaragua. T he 2017 Annual Conference for Lenders kicked off at the Manhattan Hilton Garden Inn on September 27th with opening remarks from KBA Chairman Ron Johnson. Chairman Johnson spoke of the need for bankers to tell their story at a time when the community bank model is threatened through increasing regulation and industry consolidation. Economist Roger Tutterow, Kennesaw State University, discussed the current national and regional economic environment. Drilling down to factors such as GDP growth, inventories, consumer sentiment and energy prices, Tutterow believes the record long economic expansion will continue well into 2018. He also evaluated the activity by the Federal Reserve, the effects of CRE loan standards, and construction spending by sector. Ed Kofman, CenterState Bank, delivered a provocative presentation that challenged commercial loan pricing models of most community banks. He began his presentation with a graph that demonstrated the downward trend of community banks since 1992 and explained his belief that the rate of consolidation is not due to increased regulation from Dodd Frank but rather from community banks pricing their commercial loans incorrectly. The presentation centered on methods to use credit risk, loan size and total relationship in a loan pricing model to increase ROE. Chuck Stones provided a Washington Update over lunch that included a recap of several elections and deal-making in DC. Stones discussed the ramifications of the Equifax security breach and the impetus for the businesses to take securing their data more seriously. He also shared the known details of the Trump tax reform plan and how that can help to create an efficient banking system. He wrapped up with his top priority checklist for tax reform. The conference included a host of concurrent sessions including; • Growing Your Commercial Loans by Offering More Capital: Jason Tepperman, Promontory Interfinancial Network • CECL: How Ready Are You? - Chuck Marshall, K-Coe Isom • Creating Profitable Growth in Commercial Loan Origination - Ed Kofman, CenterState Bank • The Commercial Real Estate Landscape - Chuck Morris, Federal Reserve Bank of Kansas City • Successful Workout Strategies for Problem Loans - Linda Larger, Banking Education Solutions & Training Following the concurrent sessions, Linda Larger presented a talk titled, “Seven Deadly Sins of Loan Underwriting.” This technical talk included an overview of risks and costs to banks because of problem loans. Larger walked through examples of underwriting actions and procedures that contribute to problem loans. She also gave examples of red flags in the underwriting process. Larger wrapped up day one with “Lessons Learned.” Day two began with Nathan Kauffman, Federal Reserve Bank of Kansas City (in Omaha), with a talk titled, “Economic Outlook for 2017.” Kauffman centered much of his talk on the economic factors that are shaping the ag sector. He also spent some time discussing the macro economic factors and recent developments in ag with implications and risks affecting the financial conditions and trends. Kauffman predicted that crop yields will remain strong and demand will most likely remain strong. The challenge is that producers have responded to lower commodity prices with increased production for a stronger bottom line. There may be concern in time that the supply will outpace demand. There needs to be a risk management and marketing strategy for the environment. “Stress Testing and Concentration Monitoring,” was the title of the talk given by Dustin Matthews, Community Bank Advisors. Matthews first discussed the value and purpose of stress testing as a vital component of risk management and a significant driver of capital, asset quality, and liquidity. He also walked through stress testing steps to establish an effective program with a stress testing checklist. The conference wrapped up with Holly Hoffman’s story of the 39-day challenge in the Nicaraguan jungle on the reality TV show Survivor. “Never Give Up – The Survivor Way,” contained an emotional message about priorities and your ability to turn adversity into strength. The 2018 Annual Conference for Lenders will be held at the Wichita Marriott Hotel on September 25-26.