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SDBANKER
OFFICIAL PUBLICATION OF THE SOUTH DAKOTA BANKERS ASSOCIATION | JULY 2020
SDBA Elects
2020-2021 Officers
South Dakota Bankers Association
2021 Scenes of South
Dakota Calendar
February
The South Dakota Bankers Association is pleased to offer you the Scenes of South Dakota Calendar. This 2020
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“Winter Cattle”
by Dan Ray | Rapid
City
calendar will feature photos of South Dakota submitted by South Dakota bankers, their family members and
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customers. Your bank logo and name can be printed on each calendar to display in homes and businesses all 2
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The Scenes of South Dakota calendars are exclusive to SDBA member banks. These calendars are a great
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opportunity to thank your customers for their business and promote your bank. The SDBA logo is also
included to emphasize the strength and security of South Dakota’s banking industry. Please see the
information below and order today! All orders will be shipped November 1, 2020.
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cha | Hecla
Bank
by Jan Siemu
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City State Zip
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CUSTOM IMPRINT April2020 “Double Rainbow”
Please note: Imprint Area for bank logo and/or name is 10.375” wide x 1.25” tall.
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| Bruce
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Use same imprint from the 2020 Scenes of South Dakota Calendar.
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MAIL TO: FAX TO: PHONE: 24 25 26 27 28 29 FIRST QUARTER 30
South Dakota 605.224.7835 800.726.7322 31
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ATTN: Alisa Bousa EMAIL TO: WEBSITE:
PO Box 1081 abousa@sdba.com sdba.com/calendar
Pierre, SD 57501
*Pricing Information: Orders placed by September 1, 2020 receive the low price of $1.35
per calendar. After September 1, price is $1.61. Each order will have an additional $25.00
production charge (layout for press run, in-house press proof, boxing, labeling), plus
shipping. Logo will be black unless color is requested. Send no money now. Orders will be
billed when shipped. Orders cannot be accepted after September 15, 2020.
SDBANKER
OFFICIAL PUBLICATION OF THE SOUTH DAKOTA BANKERS ASSOCIATION
JULY 2020 | sdba.com
PO Box 1081 | 109 West Missouri Avenue
Pierre, SD 57501
605.224.1653 | 800.726.7322
www.sdba.com
SDBA OFFICERS
CHAIR
Steve Bumann, BankWest, Inc., Pierre
CHAIR-ELECT
Kristina Schaefer, First Bank & Trust, Sioux Falls 8 11
VICE CHAIR
David Bangasser, Dacotah Bank, Sioux Falls
IMMEDIATE PAST CHAIR
Shawn Rost, First Interstate Bank, Rapid City
SDBA BOARD OF DIRECTORS
Jesse Block, First Fidelity Bank, Platte
Dylan Clarkson, Pioneer Bank & Trust, Belle Fourche
Craig Davis, First National Bank, Pierre
Jeff Davis, Bryant State Bank, Bryant
Mike Klumpp, Citibank, Sioux Falls
Pete Mehlhaff, Great Plains Bank, Aberdeen 14 18
David D. Nelson, First Fidelity Bank, Burke
Brad Seaman, BankNorth, Aberdeen
features
SDBA STAFF
Curt Everson, SDBA President 7 SDBA News
ceverson@sdba.com l SDBA Announces Retirement of President Curt Everson
Mike Feimer, President of Insurance and Services l SD Bankers Foundation: New Mission, New Scholarship Program
mfeimer@sdba.com
8 SDBA Board
Halley Lee, Administrative Vice President SDBA Membership Elects 2020-2021 Officers
hlee@sdba.com
Alisa Bousa, Communications Coordinator 10 SDBA Board
abousa@sdba.com Two Appointed to SDBA Board of Directors
Nadine Kepford, IS/Business Manager
nkepford@sdba.com
11 Emerging Leaders
Emerging Leader of the Month: Jason Appel
Jeanine Dyce, Administrative Assistant
jdyce@sdba.com 12 SDBA News
Dean Franzen, Commercial Lines Specialist Bankers Take Part in Virtual Business Meeting, FDIC Town Hall
dfranzen@sdba.com
14 Compliance
Michelle Guthmiller, Insurance Specialist Reopening Branch Lobbies
mguthmiller@sdba.com
Robin Feimer, Insurance Specialist 18 Regulatory
rfeimer@sdba.com COVID-19 Loan Modifications: It is More Than Just a TDR Issue
EDITORIAL: Published monthly by the South Dakota
Bankers Association, SDBANKER Magazine is dedicated to
in every issue
enhancing the state’s banking profession by providing useful
and timely information on important events and trends in the
4 Message from the Chair
banking industry. Statements of fact and opinion are made on The Search for a New SDBA President
the responsibility of the authors alone and do not represent
the opinion or endorsement of the SDBA. The magazine 5 From the Executive Office
welcomes news from SDBA members. Articles may be 2020—A Year of Firsts
reprinted with permission. Email abousa@sdba.com.
6 SDBIS Update
ADVERTISING: Advertisements within this publication do New Product Alert: Mortgageholders Coverage Program
not necessarily represent endorsement of those products and
services by the SDBA. The editor reserves the right to refuse
any advertisement or editorial copy deemed to be unsuitable.
16 Ask the Appraiser
For advertising details, see SDBA media kit at www.sdba.com. Record Keeping Rule
SUBSCRIPTIONS: Member banks, branches and associate 20 Bank Notes
members receive one complimentary subscription. Additional
subscriptions are $45 per year for members or $90 for non- 22 Classifieds
members. Call 605.224.1653 or email abousa@sdba.com.
23 Education Calendar
sdba.com | JULY 2020 | SDBANKER 3
message from the chair.....
BY STEVE BUMANN | CFO | BankWest, Inc., Pierre
The Search for a
New SDBA President
O
ver the past year, I have enjoyed reading
2019-2020 SDBA Chair Shawn Rost’s monthly “Curt has been a wonderfully-
messages in SDBANKER Magazine. He is a gifted effective association president
writer and has done a wonderful job as chair of the
SDBA, so I have big shoes to fill as the new chair. I have for nearly two decades. His
to admit that the one duty that I was most concerned departure will leave a big hole
about was the writing of the monthly chair’s message!
I was planning to have my first message reiterate
in the organization.”
and expand on the vision and themes that I thought
should be set out for the Association. However, that
message can be written in the future. If you were one president for nearly two decades. His departure will
of the 100-plus participants in the Association’s Virtual leave a big hole in the organization. I plan to extol the
Annual Business Meeting that was held on June 9, you virtues of Curt as his retirement nears. (Hey, it just
heard SDBA President Curt Everson announce his plan dawned on me I have a plan for 25% of the messages
to retire by the end of 2020. (See the story on page 7.) that need to be written. I feel better already.)
Curt has been a wonderfully-effective association Curt informed the SDBA Board of Directors in 2019
that he was planning to retire in 2020, so we actually
began working on a plan for the president position in
the fall of 2019. The global pandemic that we have all
been dealing with this year has delayed the start of the
search process. However, as things begin to loosen
up, we are now ready to focus on the search for a new
president.
At the SDBA Board of Directors meeting on June
8, the Board charged me with the responsibility of
forming a search committee to facilitate the selection
of a new president of the Association. Immediate
Past Chair Shawn Rost from First Interstate Bank,
Chair-Elect Kristina Schaefer from First Bank & Trust,
Board Member Jeff Davis from Bryant State Bank and
Competitive Rates
Board Member David Nelson from First Fidelity Bank
Downpayment Assistance were asked and have agreed to join me on the search
Closing-Cost Assistance committee. If you have thoughts or ideas, please pass
them along to one of the search committee members.
…FOR SOUTH DAKOTA HOMEBUYERS!
In the coming days and weeks, we will be
advertising the position, gathering and screening
the applications, selecting candidates for interviews,
interviewing candidates and ultimately recommending
a candidate to the full Board of Directors. Curt has been
gracious enough to offer to continue to serve to the
end of the year in order to give us the time that we
need to do a good job in this selection process.
Steve Bumann is CFO at BankWest, Inc. in Pierre.
Bumann can be reached at 605.945.3749 or Steve.
Bumann@bankwest-sd.bank.
4 SDBANKER | JULY 2020 | sdba.com
from the executive office.....
BY CURT EVERSON | President | South Dakota Bankers Association
2020—A Year of
Firsts
2
020 continues as a year of firsts in so many loan forgiveness application forms started to erode
ways. One of those firsts occurred on June 9, prospects for forgiveness, we took action.
when more than 100 SDBA member bankers and On May 27, 50 state banking trade associations
business partners “attended” the Association’s Annual signed a joint letter to Treasury and SBA urging them to
Business Meeting virtually via Zoom. consider a de minimis threshold under which borrowers
In a normal year, bankers would have gathered with outstanding loans might receive 100% PPP loan
together on that day in a Bismarck Ramkota meeting forgiveness through completion of a “PPP-EZ” form—a
room to honor long-serving bankers, thank Board simple one-page attestation—acknowledging that they
members for their service to the industry, remember spent the majority of PPP funds to preserve the jobs
bankers we lost in the past year, and to elect a new of their employees. SDBA and a host of other state
slate of SDBA officers for the coming year. And so we associations initiated and submitted joint letters with
did, just not face-to-face. business trade and industry associations in their states,
Thanks to everyone who took an hour out of their pressing for adoption of a PPP-EZ process. South
day to support the ongoing business of the SDBA. We Dakota’s letter was sent on June 2. Lastly, our own Sen.
have learned that much can be accomplished through Mike Rounds decided to send his own letter, signed
virtual meetings. But, we also are learning what is lost on June 12 by 44 senators, to the PPP administrative
when groups of 10 or more cannot gather. agencies urging the development of a one-page
During the meeting, I touched on bankers’ simplified forgiveness form for any PPP loan under
commitment to community evidenced during the $250,000.
coronavirus pandemic. While governments considered As a result of the efforts of many, SBA on June
stay-at-home mandates, we made sure that banking 18 released a three-page “EZ” PPP loan forgiveness
was recognized as an essential service. Bankers found application, requiring less documentation and fewer
ways to maintain social distance while providing calculations than previously required for borrowers who
customers access to the banking system. meet any one of these three criteria:
When Congress decided small businesses should • Applied for the PPP loan as self-employed, an
have access to fresh capital through Paycheck independent contractor or a sole proprietor with
Protection Program (PPP) loans, banks and bankers no employees.
stepped to the plate. By June 20, South Dakota banks
had originated and funded the lion’s share of $1.65 • Did not reduce salary or wages for any employee
billion in loans to 21,752 small businesses. Thousands by more than 25% and did not reduce the
of bankers overcame creaky systems and ever-evolving number of hours of their employees (excepting
guidance, often working around the clock to deliver laid-off employees who refused an offer to
badly-needed cash to business owners trying to keep return).
paychecks coming to their employees. Thanks to all for • Did not reduce salary or wages for any employee
your unwavering support of your communities during by more than 25% during the covered period
these uncertain times! and experienced reductions in business activity
Even though $128 billion of federal spending because of health directives related to COVID-
authority in support of SBA guarantees remains for PPP 19.
loans, much industry and trade association attention
has shifted to the forgiveness side of PPP. Members While unlikely that most groups advocating a
of Congress who voted nearly unanimously in support simple loan forgiveness process are completely
of the CARES Act understood that PPP-funded loans satisfied with the SBA’s latest form and instructions,
were intended to be loans-in-name-only. The purpose many borrowers and lenders are in a better place than
of loan forgiveness was to turn those loans into grants. when this debate began.
When certain Treasury/SBA rules, FAQs and complex Continued on page 9
sdba.com | JULY 2020 | SDBANKER 5
south dakota bankers insurance & services update.....
BY MIKE FEIMER | President | South Dakota Bankers Insurance & Services Inc.
New Product Alert:
Mortgageholders Coverage
Program
A
few times a year we run across a good article Being proactive helps, but there’s always the
from one of our vendors. OneBeacon Financial possibility of an oversight.
Services, an SDBA associate member, is one of Insurance could lapse without your knowledge, and
our preferred vendors that does an excellent job for an endorsement approach may no longer be the best
many of our banks. solution for protection. The benefit of OneBeacon’s
Mortgageholders Coverage Program is that there are
By Betsy Good, CPCU, Vice President, OneBeacon more than 15 different insuring agreements available,
Financial Services with ample room for flexibility for a customized solution
E
conomic risks and exposures that meets your needs. Here are just a few of the
associated with mortgage coverage highlights:
portfolios have become more • No vacancy provision
complex; so has protecting banks
from losses. As a response to this, • No hard and fast warranty
OneBeacon Financial Services has • Admitted coverage
created a new policy to account for
• Mortgageholder’s liability is written on an
different types of losses that could
occurrence basis with defense outside
impair mortgages, as well as certain exposures from
originating and servicing loans. • Multiple options for balance of perils
The new Mortgageholders Coverage Protection • Post termination coverage extends liability
(MCP) policy is divided into three sections: coverage for up to a year after mortgage
1. Mortgageholder’s Interest satisfaction
2. Foreclosed Property Take this time to review and upgrade your
protection. Visit onebeaconfs.com for more information
3. Mortgageholder’s Liability
on MCP, or contact Betsy Good at egood@onebeacon.
Each section contains multiple available insuring com or 781.332.8357.
agreements, creating a broad and flexible product
offering that allows you to select options to tailor
Betsy Good, CPCU, vice president at OneBeacon
coverage to your needs.
Financial Services underwrites, markets and develops
specialized products to insure collateral for financial
Some questions to keep in mind when reviewing your
institutions. Good has been a senior executive in the
borrower’s insurance policies:
commercial insurance industry for major carriers and
1. Is the insurance covered by an escrow brokers for more than 25 years.
account you control? Make sure you have
documentation that the insurance is in force. OneBeacon Financial Services, an SDBA associate
Mistakes have been made when lenders assume member and preferred provider, offers property and
an installment payment covered the whole year. casualty coverages for commercial banks, savings
banks and savings and loan institutions, security broker-
2. If you don’t escrow money for the insurance, do
dealers, investment advisors, insurance companies
you have evidence of insurance in hand? When
and credit unions. Specialty coverages, including
does it expire? Is it still in force?
management liability, professional liability, cyber liability
3. Be proactive—if a mortgage is delinquent, and financial institution bond are additionally available
contact the insurance agent and make sure for institutions with less than $3 billion in assets. For
coverage is in force. Give the agent your more information, visit www.onebeaconfs.com.
contact information should anything come up.
6 SDBANKER | JULY 2020 | sdba.com
sdba news.....
SDBA Announces Retirement
of President Curt Everson
T
he SDBA on June 22 fresh approach.”
announced the impending SDBA Chair Steve Bumann, CFO for BankWest in
retirement of its president, Pierre, will lead a committee of bankers in the search
Curt Everson. and selection of a new SDBA president.
Following 20 years of service in “We are going to take some time finding the
state government, Everson has led person with the right mix of public policy advocacy,
the 136-year-old Association since communications and proven leadership skills
September of 2002. The role of the required to manage an ever-changing organization
SDBA, located in Pierre, is to help educate, advocate and industry,” Bumann said.
and grow a diverse mix of financial institutions For information on the position of SDBA
throughout the state. president and applying, visit www.sdba.com/
“I am grateful for the privilege I was given to president. Individuals interested in applying for the
lead this esteemed Association and to work with position should send a letter of application with
dedicated bankers and great community leaders for a resume, references and salary requirements to:
nearly two decades,” Everson said. “By the end of Mr. Steve Bumann, Chair, SDBA Executive Search
this year, it will be time for me to retire and hand Committee, PO Box 998, Pierre, SD 57501 or email to
over the reins to someone with new ideas and a applications@sdba.com.
South Dakota Bankers Foundation:
New Mission, New Scholarship Program
T
he South Dakota technical school students with an expressed interest in
Bankers Foundation banking/financial services.
(SDBF) was established There is no match required by member banks,
in the mid-1980s with the however, banks may choose to supplement this $2,000
broad purpose of promoting award to increase the attractiveness of the scholarship.
and supporting banking and Banks must award the $2,000 as one scholarship.
financial education in South Dakota. Last year, the SDBF Applications must be submitted through the parent
Board of Directors updated the Foundation’s mission bank, however, scholarships may be awarded through
statement to “Developing South Dakota Banking any of the organization’s locations. Information on
Industry Professionals.” applying for the new $2,000 scholarships will be
In support of this redefined mission, the SDBF is available this fall. For more information, visit www.
redesigning its scholarship programming into a broader sdba.com/scholarships.
scholarship opportunity that will more directly help to In addition to the new program, the SDBF will
build and sustain South Dakota’s banking workforce. continue to award its five named scholarships—David
Beginning this November, the high school scholarship S. Birkeland, Deb Gates, Alan M. Graff, Joyce Hazeltine
program along with post-secondary scholarship and Herman Lerdal scholarships.
funds previously given directly to seven educational In support of the Foundation’s new mission, the
institutions in the state will be absorbed into a new SDBA is also providing internship development and
scholarship program. career awareness resources for banks at www.sdba.
SDBA member banks will now be given the com/banking-career-awareness.
opportunity to apply for one of 40, $2,000 scholarships. If you have questions on the scholarships,
The scholarships must be awarded to South Dakota internship development or career awareness resources,
college juniors/seniors with an expressed interest in contact SDBF Executive Director Halley Lee at hlee@
banking/financial services or second year South Dakota sdba.com or 605.224.1653.
sdba.com | JULY 2020 | SDBANKER 7
sdba board.....
SDBA Membership Elects 2020-2021 Officers
S
DBA membership elected officers for 2020- years, she has also held the titles
2021 at the SDBA’s Annual Business Meeting of general and corporate counsel.
on June 9. The meeting was held virtually due Prior to joining the bank, Schaefer
to the cancellation of the NDBA/SDBA 2020 Annual worked as an attorney in a private
Convention. The 2020-2021 SDBA officers are: practice where she specialized in
• Chair: Steve Bumann, CFO, BankWest, Inc., banking law and general corporate
Pierre law. Before attending law school,
she was employed at First Bank
• Chair-Elect: Kristina Schaefer, General Counsel & & Trust and worked in customer
Chief Risk Officer, First Bank & Trust, Sioux Falls service and risk management.
• Vice Chair: David Bangasser, Southern Region Schaefer regularly coaches Girls on the Run and
President, Dacotah Bank, Sioux Falls is on the Helpline Board of Directors. She also serves
as a mentor to two young girls as part of the LSS
• Immediate Past Chair: Shawn Rost, South
School Based Mentoring Program and is active in its
Dakota Market President, First Interstate Bank,
Everyday Heroes Recruitment Campaign and Advisory
Rapid City
Committee. She was also a member of South Dakota’s
Elder Abuse Prevention Task Force. Schaefer was
Chair Steve Bumann named the 2019 South Dakota Women in Law Attorney
Steve Bumann is the CFO for of the Year.
BankWest, Inc. in Pierre. He began Schaefer and her husband, Scott, have two
his employment with BankWest as daughters: Olivia (13) and Harper (8).
vice president of finance in 1984.
He has worked in BankWest’s
finance department for his entire Vice Chair David Bangasser
36-year banking career. Prior David Bangasser is southern
to joining BankWest, Bumann region president for Dacotah
worked for the Department of Bank in Sioux Falls. He began his
Legislative Audit and a local Pierre banking career in 1982 working
CPA firm. Bumann graduated from the University of for Western Bank in Sioux Falls.
South Dakota in 1975 with a BS in accounting and He went on to work in St. Paul at
passed the CPA exam in 1977. Heritage National Bank, Firstar
Bumann is currently a member director for South Bank of Minnesota and American
Dakota on the Federal Home Loan Bank of Des Moines National Bank. He joined Dacotah
Board. He is also on the Elder Board of his local church. Bank in 1995.
His past service includes seven years on the Pierre Bangasser is board chair and a classroom volunteer
School Board, a term on the South Dakota Retirement for Junior Achievement of Sioux Falls and a board
System Board of Trustees as the school board member for Singing Boys of Sioux Falls, as well as past
representative and he is a past president of the Pierre service with El Riad Shriners, Sioux Falls Chamber of
Area Chamber of Commerce. Commerce and Zoological Society of Sioux Falls.
Bumann and his wife, Deb, who will be married Bangasser and his wife, Karen, have been married
for 37 years in July, have four adult children and five for 38 years. They have one daughter, Megan Hartz.
grandchildren. Aaron and his wife, Erin, are in Kansas Megan and her husband, Dusty, have two children:
City; Michael and his wife, Kimmie, are in Chicago; Brian Cohen (13) and Cade (12).
is in Minneapolis; and Elizabeth and her husband, Chris,
are in Rapid City. Immediate Past Chair Shawn Rost
Shawn Rost is the South Dakota market president
Chair-Elect Kristina Schaefer for First Interstate Bank. Rost and his wife, Susan,
Kristina Schaefer serves as general counsel and live in Rapid City. Shortly after graduation from Black
chief risk officer for First Bank & Trust. Schaefer serves Hills State University, he was hired as a consumer
as the organization’s primary legal resource and also loan officer in Spearfish. From there, Rost was named
oversees the compliance, fraud, BSA/AML, audit, ERM
and third-party oversight functions. During the past 13 Continued on next page
8 SDBANKER | JULY 2020 | sdba.com
the Deadwood branch president
and then the Sturgis branch and
A Year of Firsts...continued from page 5
Northern Hills market president. By now, many of you have heard that I am planning
He was promoted to his current to retire. It has been my great privilege to lead this
position in 2016 and has worked esteemed Association for the past 18 years. I feel
for First Interstate Bank for 28 lucky to have worked with so many great bankers and
years. community leaders. But, the time has come for me to
Rost has been on the SDBA step aside and for someone with a fresh perspective
Board of Directors for the past to take the reins. I am humbled by the congratulatory
six years. He is passionate about notes I have already received from bankers and peers
SDBA advocacy efforts, finding ways for banks to across the country. This may sound kind of weird, but I
become more profitable so they can better invest in feel like I am about to finish a very interesting book and
the communities they serve, and encouraging more am starting to wonder what I should read next.
bank employees to become active in the SDBA. Rost But as the unfortunate man from the plague-
currently serves on the South Dakota Community stricken village in “Monty Python and the Holy Grail”
Foundation Board of Directors and in the past said, “I’m Not Dead Yet!” There are projects to
served on the executive boards of many nonprofit complete and files to thin. I plan to be a resource during
organizations including the Northern Hills Training this period of transition, but I will not be a roadblock. I
Center in Spearfish, the Deadwood Chamber of wish the volunteer leaders of the SDBA much success
Commerce, Neighbor Works Dakota Home Resources as you begin the search for a new SDBA president.
and Deadwood Economic Development.
Rost and his wife enjoy traveling and spending Curt Everson is president of the South Dakota Bankers
time with their three sons: Hunter (25), Tanner (23) and Association in Pierre. Everson can be reached at
Traven (11). 605.224.1653 or ceverson@sdba.com.
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since 1996.
nationwide.
Over Loan servicing
500 portfolio
financings averaging
since 1996. $1.5 billion
Corporate Headquarters: Minneapolis, MN • Ph: 612.317.2000 | 800.227.0786
www.doughertymarkets.com • Refer to website for listing of all locations.
sdba.com | JULY 2020 | SDBANKER 9
sdba board....
Two Appointed to SDBA Board of Directors
Mike Klumpp, Citibank, Sioux Falls Jesse Block, First Fidelity Bank, Platte
Mike Klumpp was appointed to the SDBA Board of Jesse Block was appointed to the SDBA Board of
Directors to represent banks in the Maximum Dues- Directors to represent the SDBA Emerging Leaders
Paying Bank Category. Klumpp fills a seat previously Work Group. This is a new seat on the SDBA Board of
held by Craig Hansen, which has a term of two years Directors created this year. The term for the Emerging
remaining. Leaders Work Group seat is for one year.
Banking Career Banking Career
As site president for Citibank Jesse Block serves as a vice
in Sioux Falls, Mike Klumpp president at First Fidelity Bank
is responsible for driving and and manager of its Platte branch.
executing site governance, He is also a member of the bank’s
people strategy, site culture and Board of Directors. Block has a
community involvement. A native degree in business administration
of northwest Iowa, Klumpp earned from Dakota Wesleyan University.
a finance degree at Iowa State He serves on the SDBA Emerging
University prior to joining Citi in Leaders Work Group, which he
1988 as a financial analyst. He has chaired. Block began his
has served in a variety of managerial roles in security banking career at Great Western Bank as an ag lending
operations and fraud prevention and, in addition to his trainee and joined First Fidelity Bank in 2012 as an ag
role as site president, is currently the director of control loan officer. In 2019, he was named VP and manager
for Citi’s Global Consumer Bank Fraud Prevention and appointed to the bank’s Board of Directors.
group.
Community Involvement
Community Involvement Block has been very involved in his community. He
Throughout his career, Klumpp has had a long currently serves on the Platte Community Memorial
history of sharing his time and talents. He has served Hospital Board of Directors and is the past president
in leadership roles for the United Way, the Brandon and board member of the Platte Area Chamber of
Valley School Board and the Brandon Valley Athletic Commerce. He has served as a board member of the
Booster Club. He has represented Citi on the Visa Risk Platte Black Panther Booster Club and as a deacon at
Executive Council and is a current member of the Board First Reformed Church of Platte.
of Directors for Citi Trust South Dakota.
Family
Family Block and his wife, Amanda, have been married for
Klumpp and his wife, Jean, have four adult children 12 years. They have three children: Berkley (11), Cade
and reside in rural Sioux Falls. (9) and Baylor (5).
Goals as an SDBA Director Goals as an SDBA Director
As an SDBA director, Klumpp wants to continue Block’s goal as an SDBA Board member is to
Citi’s tradition of active engagement and contribution continue to grow emerging leaders programing and
to the SDBA. strengthen ties with emerging industry leaders to the
SDBA and the banking industry as a whole.
10 SDBANKER | JULY 2020 | sdba.comemerging leaders.....
Emerging Leader of the Month: Jason Appel
A
s part of the SDBA’s mission to grow South is an important part of my job and a part of my job
Dakota’s future bank leaders, we are featuring a I’ve always cherished. Over the last few years, I’ve
monthly emerging leader. This month’s feature devoted more time to developing our banking team and
is on Jason Appel, Plains Commerce Bank, Sioux Falls. investing a significant amount of time to be a spark to
their personal and professional growth. My co-workers,
First-Ever Job our customers and the people in our trade area bring
My first work experience me back to work each day. I enjoy taking care of
was as a plumber, working people and thrive in a fast-paced, make-it-happen-now
for my dad. I did that during environment.
summers for nearly 10 years,
and I really enjoyed the chance What Motivates Him
to work with him. He taught My parents—mother, father and stepfather—
me to value hard work and sacrificed basically all of their time and resources to
physical labor. He also taught invest in me during my youth. While we never really
me that time matters—work had a lot, they always found a way to take care of my
and problem solving need to needs. My education was my mom’s top priority, and
be done in an efficient manner she is so proud that I went to college and got a degree.
so that everyone working What motives me is keeping that momentum going for
around you can do their jobs. my children and making sure they have opportunities
While I today enjoy a desk job, some days I do miss to do more than I did to ensure they can have a greater
being able to walk off a job site and physically see the impact on this world than I can have. I want to pay that
progress you made that day. forward for my parents and grandparents.
Emerging Leader Story If He Could Have Any Job
I have worked in banking for 17 years, in business I grew up wanting to be a farmer and still love big
banking for 15 years, and have been with Plains equipment and the thrill of harvest. I also think that
Commerce Bank for almost 10 years. I have never really working in the shipyards at our largest ports on the
asked to be a leader, but I get asked to lead quite often, east coast would be an amazing experience. There is
which is very rewarding. It is nice to know others see something about shipping and how those immense
it in me, even at times when I don’t see leadership in amounts of goods get from where they are to their end
myself. Leadership and leadership development appear destinations that interests me.
to be a lifelong journey, and I’m working hard to scale
the leadership levels and get those around me to buy
in and improve as leaders as well. I’m finally getting out In His Spare
in front of leading, seeing challenges and opportunities Time
before others see them, and trying to be prepared for I enjoy being
situations and opportunities. I was completely reactive outside. I grew up
for a long time—waiting for a situation, making a plan hunting and fishing,
and then acting. I think that learning and improving is but life has limited
what leadership is all about. that for me, so I took
up golf. While I am
What He Most Likes About His Job not very good at golf,
As a branch manager at Plains Commerce Bank, it has become my
I oversee the commercial and ag lending facets of connection to nature.
our business in the Sioux Falls market. I interact with I enjoy walking the
our consumer banking group as well, but over the course and seeing that
last few years new leaders have stepped up to run part of nature. I enjoy
those departments, which has allowed me to focus on the rare visit to a lake,
business banking. I oversee a loan portfolio and am in and I certainly enjoy
charge of growing my portfolio and helping the team time with my close Jason and Jamie Appel and
around me grow theirs as well. Maintaining our existing friends, my family and their children: Briggs (9), Jorja
banking relationships and developing new relationships our team at the bank. (5) and Beckett (2).
sdba.com | JULY 2020 | SDBANKER 11sdba news.....
Bankers Take Part in SDBA Virtual
Business Meeting, FDIC Town Hall
M
ore than 100 bankers and FDIC Virtual Town Hall
business partners took part South Dakota and North Dakota
in the SDBA’s Virtual Annual bankers and business partners
Business Meeting via Zoom on June joined for a Virtual Town Hall with
9. The meeting is traditionally held FDIC Chair Jelena McWilliams
during the SDBA/NDBA Annual following the SDBA’s Annual
Convention, which was canceled Business Meeting on June 9.
this year due to the pandemic. Originally scheduled to speak at the
The Annual Business Meeting’s Annual Convention, McWilliams and
agenda included the election of her top deputies provided a timely
SDBA officers (see the story on update and answered questions
page 8), comments from the posted by the event moderator,
outgoing and incoming SDBA ABA President Rob Nichols. Issues
chairs, an association update from ranged from COVID-19 to the
SDBA President Curt Everson and a 2019-2020 SDBA Chair Shawn Rost future of community banks, which
South Dakota Bankers Foundation McWillaims called the lifeblood of
update from Halley Lee. communities.
“The greatest accomplishment • Mary Jo Kuhlman, “I am very proud of the
I think the South Dakota Bankers Commercial State Bank, work that you are doing in your
Association had this past year Wagner communities. I know that your
was advocating for our industry • Patricia M. Lien, Dacotah communities are largely rural. In
with our congressional delegation Bank, Watertown a lot of those communities, you
and working to show them the • Daniel N. Menking, Dacotah are it. You are just not the banking
problems with the PPP program Bank, Webster presence, you are the epicenter
and helping them modify the • Nancy K. Rausch, Plains of the economy’s activity,”
rules and change the process Commerce Bank, Hoven McWilliams said. “I think you have
and procedures to make it easier • Randy Sachtjen, First Fidelity done a phenomenal job working
for us to help our customers and Bank, Burke with your communities, and you
our communities to survive this • Bonnie M. Schumacher, have a lot of exposure to different
pandemic,” said 2019-2020 SDBA First State Bank of Roscoe, industries that have been heavily
Chair Shawn Rost “That is what we Roscoe affected by the pandemic, including
are all about.” • Denise D. Trogstad, Dacotah oil and gas, cattle ranching,
Bank, Lemmon farming, etc., and you have
Years of Service Awards adjusted pretty quickly.”
The following bankers were In Remembrance Following the hour discussion,
recognized for their years of service The following bankers who the more than 300 participants
to the banking industry: passed away this past year were were treated to a bonus session
• Jane F. Aman, Dacotah Bank, remembered: when James Ballentine, ABA’s
Aberdeen • Jerry Feldhaus, The First EVP of congressional relations
• Susan M. Aman, Dacotah National Bank in Sioux Falls and political affairs, provided an
Bank, Mobridge and its previous subsidiary in inside look at what’s happening in
• Mary J. Bloom, Dacotah Flandreau Washington, D.C.
Bank, Webster • Gerry Berger Law, Deuel The SDBA thanks its bankers
• Shelley J. Deutsch, Dacotah County National Bank, Clear and business partners who took
Bank, Webster Lake part in the two virtual events. The
• Lee Jacobson, Bryant State • John W. Thomson, First SDBA Board of Directors also held a
Bank, Bryant Midwest Bank (ONE virtual board meeting the day prior
• Shirley Kleinhans, Premier AMERICAN BANK), to the Annual Business Meeting.
Bank, Alcester Centerville
12 SDBANKER | JULY 2020 | sdba.comSDBA President
Curt Everson with
the SDBA’s 2020-
2021 officers:
Chair Steve
Bumann, Chair-
Elect Kristina
Schaefer and Past
Chair Shawn Rost.
Call me at
(Not pictured is 605.321.9197
Vice Chair David
Bangasser.) Todd
ABA President
Holzwarth
Based in Sioux Falls, S.D., serving South Dakota, North
We’re Here
Rob Nichols Dakota Northwest Iowa, southwest Minnesota
moderated a live
for You
virtual town hall
with FDIC Chair
Jelena McWilliams
and South Dakota
and North Dakota Things might look a little different now.
We might not be able to shake your hand
bankers and or meet you face to face. And just like
business partners you, we’re relying more on technology
on June 9. to stay connected.
we’re here
for you.
But no matter what,
And when this is all
over, we’ll still be here, stronger than ever,
a partner you can count on – now and
SDBA President going forward.
Curt Everson
WHY YOU CAN BE
(right) presents CONFIDENT WITH BELL
a gavel to 2019- BANK AS YOUR PARTNER
2020 SDBA Chair
We are and have always been downside
Shawn Rost (left), risk managers. That’s part of what
First Interstate makes us so strong and allows us to be
Bank, Rapid City. committed to correspondent lending –
a growing part of our company.
As your community banking partners,
we want to help you through this
unprecedented time. While we’re
being more conservative in our overall
lending, we’re still purchasing high-
quality participations and offering bank
stock financing.
Additionally, we can offer:
A full line of insurance
products
The SDBA Board Business leasing opportunities
of Directors held SBA loan assistance
a virtual board (our SBA expert program group would
be happy to answer questions
meeting on June regarding SBA programs – including the
8, with some Paycheck Protection Program)
board members
attending the
26695
meeting in person
at the SDBA office
in Pierre.
Member FDIC
Bell Insurance Services, LLC is a wholly owned
subsidiary of Bell Bank. Products and services offered
through Bell Insurance are: Not FDIC Insured
| No Bank Guarantee | May Lose Value | Not A Deposit
| Not Insured by Any Federal Government Agency.
sdba.com | JULY 2020 | SDBANKER 13
26695 AD South Dakota Bankers Association 2020 Update_Todd_V1.indd
5/14/20 2:19 PM
1compliance.....
Reopening Branch Lobbies
By Kevin Kim, Associate General Counsel, Compliance Alliance
M
any states have begun
taking their first steps
toward reopening, at
least partially, since the COVID-
19 pandemic, and many of our
members have been trying to
figure out the steps for reopening
their branch lobbies. There are
many considerations when
reopening branch lobbies including
practicing social distancing and
other measures to prevent the
spread of COVID-19, while keeping
compliant with all the other rules
and regulations that traditionally
govern bank operations. crucial to not overlook the smaller first key aspect to think about is to
One of the biggest concerns steps. This means that if there are encourage social distancing within
is that banks want to provide a hand sanitizer dispensers in the the branch lobbies. To assist in
safe work environment by having branches, someone should monitor practicing social distancing, banks
customers and employees wear the dispensers, and it would be could place markers on the floor
face masks, but there are also other ideal to have steps in place for to help guide customers in how
risks involved by having everyone refilling them as well. far they should stand from others.
in the branch wear a mask. This is To streamline this process, Additionally, banks could consider
becoming a growing issue with the it could be helpful to temporarily putting signs in the branches,
increasing bank robbery attempts have only one entrance/exit including at the teller and ATM
since some branches reopened. available and to have the bank locations that customers should
Just as how many grocery security guards at these points stand apart from one another.
stores and other essential to control access to the banks’ Banks should also consider
businesses have been lobbies. This would ensure that the implementing procedures to help
implementing different practices banks are able to maintain their employees social distance from one
for trying to keep the facilities safe maximum capacity that they have another as well. Banks could space
for the public, we recommend set and that the customers will be out the tellers and bankers and
banks implement procedures able to practice social distancing also possibly use separators where
for cleaning and disinfecting the measures when they are inside. it is necessary (i.e. between teller
branches. The banks should have a Additionally, while controlling the stations and between the bankers’
policy in place to disinfect the lobby entry point, banks could also have desks and customers).
during the hours of operations, an employee accompany the guard Secondly, banks should ensure
meaning the procedures would to give prescreening questions that the security cameras in the
include a systematic process in and possibly take temperatures branches are operating properly.
place. of the visitors to mitigate risk This includes network scans and
Additionally, providing hand for everyone else inside. We making sure that all the necessary
sanitizer at the entrances would have a customer prescreening patches are up to date. Banks
help bank customers feel that questionnaire for the banks to use should also double check storage
much safer. These procedures are in our pandemic toolkit at https:// capacity as well so that the
generally not ones we had prior compliancealliance.com/uploads/ cameras can operate as intended.
to the pandemic and could take files/general/COVID-19_Customer_ Recently, there have been many
some time to get used. However, Prescreening_Questionnaire_ instances where situations escalate
if banks are distributing hand v2.docx. and sometimes even become
sanitizer in the branches, it is When inside the branches, the violent in nature when customers
14 SDBANKER | JULY 2020 | sdba.comhave been asked to wear facial With the COVID-19 pandemic
covering prior to entering. In these disrupting the way we used to
times of panic and paranoia, having conduct business, many states are
fully-functional security cameras allowing businesses to slowly open
would be crucial. And in relation back up to get back to “normal.”
to these aggressive scenarios, In this attempt to get back to how
having a procedure and training things used to be, banks should
in place to de-escalate situations take the proper precautions to help
would certainly help trying to keep both employees and customers feel
everyone as safe as possible. safe, while also complying with the
Another big question is regulations that continue to govern
whether bank employees could bank activities.
ask customers to remove their We have created a checklist
facial masks and coverings for at www.compliancealliance.
customer identification purposes. com/uploads/files/general/
This is essential for “know your Checklist_Covid19_Reopening-v3.
customer” procedures and fraud doc and a cheat sheet at www.
mitigation. Banks are allowed to compliancealliance.com/uploads/
ask customers to remove their files/general/COVID-19_Reopening_
masks to ensure that the customer Cheat_Sheet.pdf to help guide in
is the correct person and matches the preparation of this task.
the government identification. For more information, you
There has not yet been any can watch our recent webinar for
guidance from the regulators reopening branch lobbies at http://
discussing the duration of how compliancealliance.com/news-
long to ask customers to remove events/a-guide-for-reopening-
their face masks, but as long financial-institutions-in-covid-19.
as it is reasonable, there isn’t a Additionally, a FAQ is also available
prohibition in making this request on the webinar page.
to the customers. Consequently,
banks would be able to continue Kevin Kim joined
complying with its customer Compliance
identification procedures and other Alliance after
Bank Secrecy Act requirements in graduating from
verifying government identification the Benjamin N.
documents. When following this Cardozo School of
protocol, banks should remember Law in 2019. As a
to ensure the camera angles are hotline adviser, he
adjusted so that it can capture the currently spends his days guiding
faces when the customers remove Compliance Alliance members
their face masks. and writing articles for weekly and
Aside from the policies and monthly publications. Before C/A,
procedures during the hours of he worked at Galaxy Digital and
operation, banks should think Refinitiv (formerly Thomson Reuters
about their opening and closing Financial and Risk) as a law clerk.
procedures. This includes both Kim also opened a cryptocurrency
safety measures and cleaning the mining farm and founded an
branch. If the bank is using outside after-school program business
cleaners prior to and/or after in his native New York City. His
business hours, banks should also unique experience and outlook
vet these service providers and have brought an invaluable new
make sure that they are insured dimension to Compliance Alliance.
as well. Additionally, banks should For information on Compliance
decide whether they would be Alliance, an SDBA endorsed vendor
staggering employees’ hours as and associate member, visit www.
this could help in practicing social compliancealliance.com or call
distancing for the employees and 888.353.3933.
staff members of the bank.
sdba.com | JULY 2020 | SDBANKER 15ask the appraiser.....
BY SHERRY BREN | Executive Director | South Dakota Appraiser Certification Program
Record Keeping Rule
Work Files Affected by a Natural is advised to contact the applicable state appraiser
regulatory agency to see if they have any guidance on
Disaster what steps to take to document the loss.
Question: My appraisal work files were recently Storing work files and electronic copies off site and
damaged due to a natural disaster. I am salvaging what implementing a system of regular backups may serve
I can but will likely have to discard many. What does to minimize future risk.
USPAP require in this situation?
Response: USPAP requires that work files be
retained “for a period of at least five years after Appraising After a Natural Disaster
preparation or at least two years after final disposition Question: A client has asked me to complete
of any judicial proceeding in which the appraiser an appraisal of a property that was damaged in a
provided testimony related to the assignment, recent natural disaster, but I have no experience with
whichever period expires last.” If the work files are older appraisals of this type. What are my USPAP obligations
than the prescribed period, then there is no USPAP in this situation?
violation in discarding them. Response: USPAP requires appraisers to perform
However, if the natural disaster has destroyed work competently when completing assignments. However,
files that must be retained, a real property appraiser USPAP allows appraisers to acquire the necessary
competency during the assignment. The COMPETENCY
RULE states, in part:
If an appraiser determines he or she is not
competent prior to accepting an assignment, the
appraiser must:
1. Disclose the lack of knowledge and/or
experience to the client before agreeing to
perform the assignment;
2. Take all steps necessary or appropriate to
complete the assignment competently; and
3. Describe, in the report, the lack of knowledge
Brian J. Gatzke, ARA, MBA and/or experience and the steps taken to
Certified General Appraiser, SD & MN
complete the assignment competently.
311 Third St | PO Box 63 | Brookings, SD 57006-0063 In addition, being competent includes the
P: 605.692.9445 | F: 605.610.0948
info@northernplainsappraisal.com | www.northernplainsappraisal.com requirement to recognize and comply with laws
and regulations applicable to the appraiser and the
Our team of valuation professionals provide reports in Uniform assignment. In the aftermath of a natural disaster some
Standards of Professional Appraisal Practice (USPAP), Yellow clients, particularly lenders, may include additional
Book (USFLA) and IRS appraisal standards. Having grown up in
assignment conditions for developing and reporting
rural communities and family farms in the Dakotas, we know the
value of professionalism and integrity. We specialize in: an appraisal and may waive others. In order to perform
competently, appraisers involved in such assignments
l Agricultural Properties l Single and Multi Family
l Dairies, Farms & C.A.F.O.s l IRS must remain current on these topics.
l Conservation Easements l Yellow Book (USFLA)
l Wildlife Habitat l Mini-Storage Warehouses If you have an appraisal related question that you
l Rural Residential l Lake Properties
would like to have answered in the “Ask the Appraiser”
l Commercial Properties l Estates, Donations, & Trusts
column, submit it to Sherry Bren, executive director
Our team also offers: consulting services, MLS research, of the Appraiser Certification Program, 308 S. Pierre
agricultural land advising and real property valuation.
St., Pierre, SD 57501, fax 605.773.5405 or by email to
Contact us today for a personalized quote! Sherry.Bren@state.sd.us.
16 SDBANKER | JULY 2020 | sdba.comsdba.com | JULY 2020 | SDBANKER 17
regulatory.....
COVID-19 Loan Modifications:
It is More Than Just a TDR Issue
By Scott Polakoff, CAMS, Executive Vice President, FinPro
M
any banks across the
country are at risk of
CAMELS downgrades,
increased deposit insurance
assessment premiums and
regulatory enforcement actions due
to inadequate risk management
practices for their COVID-19 loan
modification program.
Loan modifications have
been part of most banks’ lending
operations for many years. Before
the coronavirus, such modifications
were often prompted by a borrower’s
“financial distress.” Banks would
attempt to work with the financially-
distressed borrower by granting
a “concession” that the bank
otherwise would not consider for
other borrowers with a similar risk
profile. An example of such a loan
modification might be an interest rate reduction • Was the borrower impacted by COVID-19?
from 5% to 3% for 12 months to help a financially-
distressed borrower. Generally speaking, this type of • Was the modification pursuant to Section 4013?
loan modification would be categorized as a troubled * If yes, was the loan current as of Dec. 31, 2019?
debt restructure (TDR) under accounting literature (ASC * If yes, was the loan modification between
310-40) and captured as such in call reports. TDRs are March 1, 2020, and Dec. 31, 2020?
considered impaired loans. • Was the modification pursuant to the
Interagency Guidance?
Many banks have COVID-19 loan modifications * If yes, was the loan current at time of
approximating 25% of their commercial portfolio. modification?
When the country became engulfed with the * If yes, was the loan modification short term
coronavirus, both Congress (Section 4013 of the (i.e. six months)?
CARES Act) and the regulators (April 2020 Interagency
Guidance) issued material to guide banks on TDR Remember that banks must maintain records on
designation for COVID-19-related loan modifications. It the number and dollar amount of loan modifications
is critical for bankers to understand that while Section approved under Section 4013 and under the
4013 and the April 2020 Interagency Guidance both Interagency Guidance and report this data to the Board
discuss the applicability of TDRs, they have materially of Directors on a regular basis.
different requirements (modification duration, date
of record for current/delinquency status, etc.) for The TDR determination is only the first step in the
determining when the TDR designation is necessary. COVID-19 loan modification process.
FinPro urges all banks to specifically designate whether Unfortunately, too many banks neglect to
the COVID-19 loan modification was approved under implement the second step in the COVID-19 loan
Section 4013 of the CARES Act or under the April 2020 modification process, which is vital to accurately
Interagency Guidance. This document should be in each identify, measure, monitor and control the bank’s risk
loan modification file and address the following items: profile.
18 SDBANKER | JULY 2020 | sdba.comBanks must properly “risk rate” COVID-19 loan
modifications and incorporate such risk ratings into
their ALLL/ACL calculations. Loans modified under
New SDBA Board Member
Section 4013 or the Interagency Guidance pertain Trident Trust Company (South Dakota) Inc
ONLY to borrowers who have been impacted by the Contact: Vanessa Humpal, Financial Controller
coronavirus. By definition, these borrowers have Address: 200 N Phillips Ave, Sioux Falls, SD 57104
financial performance less robust than before COVID- Phone: 605.679.4353
19. In some cases, these borrowers may have serious Email: vhumpal@tridenttrust.com
cash flow problems driven by the coronavirus that Web: www.tridenttrust.com
impact their ability to service their debt. It is incumbent Trident Trust is a leading independent provider
on banks to accurately “risk rate” these borrowers of corporate, trust and fund services to the
at the time of loan modification and on a regular financial services sector worldwide. Established
basis going forward. FinPro has observed that many more than 35 years ago, our clients include the
banks have internally “risk rated” their COVID-19 loan world’s largest banks and brokerage firms, leading
modifications to a “watch” category. law and accounting firms, and high net-worth
Moreover, these new risk ratings must be individuals and their families. With 38 offices in
incorporated into the ALLL/ACL calculation. One “best 23 jurisdictions, we are today among the largest
practice” observed for community banks across the organizations in our industry, offering clients
country is to establish a “homogenous pool sub-tier” access to a range of services that extends from
within the ALLL/ACL methodology to break out all traditional corporate domicile representation
such loan modifications within each homogenous pool. to the administration of complex trust and fund
Noteworthy, this approach is often used in conjunction structures. Our global footprint ensures that we
with a new “COVID-19 Q-Factor” that many banks service our client base across the world’s time
now incorporate their ALLL/ACL methodology. Some zones. With a record of the longest average tenure
banks have actually appended a one- or two-digit in our industry, our professional personnel are well
code to COVID-19 loan modifications to ensure easy equipped to support our clients with their practical
identification over time. knowledge and extensive experience.
Lastly, effective corporate governance is critical to
avoid CAMELS downgrades and enforcement actions.
Corporate governance starts with a comprehensive
documentation process. As noted earlier, banks must
maintain records of all COVID-19 loan modifications,
specifically noting whether such modifications were
executed under Section 4013 of the CARES Act or
the Interagency Guidance. Remember, modifications
cannot fall under both categories since they have
different (and competing) requirements. This
information should be reported to the Board of
Directors on a regular basis. Similarly, the management
must inform the Board of risk rating trends for COVID-
19 loan modifications and how such ratings have
impacted the bank’s ALLL/ACL.
These actions, together with updated policies and
procedures to incorporate coronavirus actions, robust
MIS and risk management practices and comprehensive
internal controls will properly prepare banks to address Contact Lee Anderbery
any regulatory concerns. VP–Correspondent Services
landerbery@bbwest.com
Scott Polakoff, CAMS, is executive
vice president with FinPro, a full- WE CHAMPION COMMUNITY BANKING
service management consulting firm
specializing in providing advisory
services to the financial institutions
industry. Polakoff joined FinPro to
co-lead its regulatory practice after
serving more than 22 years with the
FDIC (eight years as the Chicago regional director) and
four years with Office of Thrift Supervision as its chief
operating officer. He can be reached at spolakoff@
finpro.us or www.finpro.us. BBWEST.COM
sdba.com | JULY 2020 | SDBANKER 19You can also read
