MBA 2022 AnnualReport

Minnesota Bankers Association ANNUAL REPORT 2022

2022 Annual Report Minnesota Bankers Association The MBA has just ended another fiscal year. We are pleased to share this Annual Report which provides a summary of the MBA’s activities from July 2021 through June 2022. Even as we continued dealing with the COVID pandemic, the MBA staff carried on providing excellent products and services to our member banks. If that sounds familiar to you, it is probably because you and your bankers did the exact same thing. It has been amazing to watch everything that our member banks accomplished during these complicated times. Minnesota banks are the heart and soul of their communities, and this has never been truer than during the last year. You helped thousands of small businesses stay afloat. You supported the individuals and families that were most affected by COVID-19. Throughout Minnesota, local bankers provided dynamic leadership and acted as a steadying influence. It truly is an honor to represent the men and women of the banking industry and to support the great work you all do for our state. The MBA, too, must give all our member banks a huge “THANK YOU!” Because of your involvement, the MBA came through the pandemic in great shape in terms of its programming, its governance, and its finances. As you will see in the chart below, during the last year 100% of member banks utilized at least one of the major services the MBA provides. The Board of Directors continues to give solid leadership and thoughtful strategic direction for the association. Our committees contribute excellent ideas, and the MBA staff is a talented group of professionals, consistently doing a fantastic job of turning these ideas and visions into workable solutions for our member banks. The banking industry continues to face some challenges. Know that the MBA works tirelessly to provide the products and services our bankers need to address those challenges. The MBA is the Champion for Minnesota Bankers, and no one does a better job of representing and supporting this great industry. We are a member-focused organization, and you are the reason that we exist. As always, we thank you very much for your bank’s membership in the MBA and for all your support! Your active involvement helps ensure that this association is successful. If there is ever anything we can do for you, please give us a call. We want to help you in any way that we can. Have a great Minnesota summer. Joe Witt MBA President/CEO

Advocacy & Government Relations State Advocacy After five years of the MBA advocating for a fully in Minnesota while marijuana is illegal under federal funded Financial Institutions Special Revenue Fund (FI law creates significant risks for Minnesota banks with SRF), the legislature passed the Commerce Omnibus customers that are marijuana-related businesses.  Only bill the last night of session with this language Congress can resolve the issue by changing federal law.  included. The MBA has consistently introduced a bill The House passed the SAFE Banking Act numerous the past five years that would redirect the remaining times this past year only to have the Senate not take fees from the General Fund to the SRF to ensure that the bill up for a vote.  The bill continues to pass with all entities within the FI Division are adequately funding broad bipartisan support.  Senate leadership has stated the SRF. This year was the first time the Department they would like to go further than just addressing the of Commerce also included this language in their bill, banking issues with marijuana, however, the likelihood along with language to assess non-depositories. In of that happening is extremely slim. a session where very little happened, this is a HUGE achievement. This Spring, the MBA returned to Washington, D.C. for the first time since 2019. The group met with U.S. During the interim last fall, the House Commerce Senators Tina Smith and Amy Klobuchar and the offices Finance and Policy Committee held an informational of U.S. Representatives Angie Craig (CD-2), Dean hearing on the privacy bill. The MBA testified explaining Phillips (CD-3), Betty McCollum (CD-4), Tom Emmer all the regulations that banks already follow around (CD-6), Michelle Fischbach (CD-7) and Pete Stauber privacy and asking for a full Gramm Leach Bliley Act (CD-8). Over 30 bankers attended these meetings to exemption for entities. The bill did not receive another discuss important banking issues. Some of the topics hearing during the legislative session. discussed included taxation and credit unions, the Community Bank Leverage Ratio, the SAFE Banking Act, Other bills of interest that the MBA focused on this postal banking, the Enhanced Credit Opportunities in session dealt with the unemployment insurance Rural America Act (ECORA), and crypto bank charters. trust fund, student loan advocate, green bank/ Along with the Capitol Hill visits, the group met with finance innovation authority, Safe at Home, first- CFPB Director Rohit Chopra, OCC Acting Comptroller time homebuyer down payment assistance, C-PACE Michael Hsu and FDIC staff for updates and discussion legislation with language advocated by the MBA that on numerous important topics, such as overdraft fees, would have included written notice and consent from cryptocurrency, credit unions buying banks, climate lenders, forced access/ESG language, and retail theft.  issues, bank mergers and CRA modernization. In In all, staff reviewed 9,515 bills over the biennium for addition to these meetings, the MBA worked closely their impact on the banking industry. With the help of with all the D.C. and local offices as issues arose and the lobbying firm of Cook Girard and guidance from the attended U.S. Representative Tom Emmer’s Financial MBA Government Relations Council, the MBA was able Services Roundtable throughout the year. to protect banks from multiple pieces of legislation that would have negatively impacted their businesses.  Federal Advocacy Last fall, the Biden Administration proposed a sweeping expansion of tax information reporting aimed at raising revenue to help offset the cost of additional spending programs. The proposal would have required banks to report to the IRS detailed information on customer account inflows and outflows. The MBA, along with bankers, reached out to both Minnesota Senators and all our members of Congress expressing concerns and objections with this proposal. Thankfully, the proposal was not included in the final bill. MBA continued to work on the marijuana banking issue this past year.  The fact that medical marijuana is legal

Communications The MBA is committed to engaging with our member bankers through a variety of communications channels. Members may choose their personal communication preferences by signing into their account at www.minnbankers.com. MBA News published six times a year @MinnesotaBankers @minnbankers 933 followers 901 followers Legal, Compliance MBA Website Political & Regulatory Insight Bulletins Bulletins www.minnbankers.com emailed weekly during emailed as necessary legislative session 6,753 video views 3,415 followers The Voice Education Flyers emailed every mailed bi-monthly Thursday

MINNESOTA BANKERS September is… A S S O C I AT I O N Once again Minnesota bankers stepped up their efforts to give COMMUNITY back to their communities and citizens during Community Impact Month. Banks served hundreds of organizations in IMPACT MONTH their communities by providing funding, volunteers, materials, supplies, and/or food. Well done! Each year, the MBA celebrates banks 88 Banks for their contributions, service, and 342 Branches support of their local communities through the Community Champion 243 Communities Impacted Recognition. Every bank who partici- 500+ Organizations Helped pates in Community Impact Month is recognized as a Community Champi- $3M+ Donated on. We hope these banks proudly dis- play their certificates for all to see. 90,000+ Volunteer Hours #BeABanker MBA offers two websites as part of a comprehensive toolkit to assist banks in attracting the next generation of talent. Beabanker.com showcases banking as a vibrant and healthy industry with fantastic career opportunities in many different areas. Iamabanker.com serves as a toolkit to you, providing resources, events, and sample social media posts to assist in your bank’s recruiting efforts. In addition, the MBA produced a series of five video shorts that appeared in paid social media spots throughout the year. These videos have already garnered more than 55,300 views. Bankers are encouraged to share the videos and to use #beabanker in employment ads and social media posts. Additionally, this year the MBA joined forces with BankTalentHQ.com, a talent management resource specifically for the financial industry. Adding the site to your arsenal can help connect you to great people, including candidates who currently are outside the state and/or industry.

Education The MBA’s Education department offers a wide variety Learning, ABA, and The Graduate School of Banking of classes, workshops, schools, and conferences - Madison allow us to offer high quality live and on- designed to assist bankers at every level in developing demand webinars on hundreds of topics. In fiscal their professional and technical skills. Our education year 2022, about 500 bankers took virtual courses programs are designed by bankers for bankers. The through one of our partner organizations. MBA staff works closely with committee and volunteer members to provide feedback and guidance on • WeproudlyjoinedwiththeUtahBankersAssociation relevant topics. on a brand-new program specifically for C-suite bankers that will roll out in the fall of 2022. The Fiscal year 2021-2022 was an excellent one for MBA Society of Bank Executives is an organization education. An incredible 2,759 bankers attended at that will provide bank leaders with opportunities least one educational program culminating in a total of to enhance critical leadership competencies and 4,738 distinct registrations and representing over 93% build a vibrant peer network so they can thrive in of member banks. Some of the most popular programs the rapidly changing banking landscape. included long-standing classes such as Principals of Banking as well as many of the brand-new programs offered during the year. Highlights… • The association offered more than 70 educational programs in the last fiscal year. These classes covered everything from ag lending to marketing to compliance and more. Several programs were free to members, including the quarterly webcast, MN Matters, which covers legal, legislative, and regulatory updates by our legal team. • The second annual Member Appreciation Week took place in January. The week was full of free webinars and prize giveaways. Classes included topics for every bank department as well as an assortment of fun diversions. Members embraced the free education with more than 700 bankers registered to take at least one webinar. Forty-eight bankers also walked away with $2,500 in prizes thanks to our generous sponsors. The 3rd Annual Member Appreciation Week is scheduled for January 23-27, 2023. • We fully returned to in-person schools and conferences including, for the first time since 2019, the Bank Leaders of Tomorrow and the Women in Banking conferences. • Our educational partnerships with the Small Business Administration (SBA) and the Farm Service Agency (FSA) continued to prove very popular. The SBA webinars attracted nearly 200 bankers from across the state, while the FSA trained over 300 bankers on FSA lending. • Online learning continues to be an integral part of banker education. Our partnerships with OnCourse

Legal & Compliance The MBA’s legal department is focused on helping our members navigate the industry’s complex and ever-changing legal and regulatory environment. Led by General Counsel Tess Rice, the department has had a busy and productive year answering legal inquiries, monitoring regulatory changes, and communicating essential information to member banks. As a key benefit, members can email [email protected] anytime and/or call up to six times per year at no charge. 1,900+ 36 Legal & Legal Compliance Compliance Inquiries Articles 23 12 Regional Regulatory Watch Compliance Group Bulletins Meetings Compliance Consulting The MBA offers compliance consulting services including deposit, real estate loan and privacy reviews, HMDA scrubs, advertising/website reviews, custom policy creation, compliance risk assessments, and independent testing of ACH and BSA programs. Personalized training and policy and procedure development are also offered. The MBA’s consultant, Associate Counsel Tom Boswell-Healey, is an attorney with over 20 years of industry experience. He leverages his knowledge and experience to help member banks identify and mitigate risks from changing regulatory demands at both the state and federal level.

Insurance & Consulting IMnIsDuWr aEnScTeBSAeNrKv iEcReSs in 2014. In addition to the core employee benefit products, we also offer a vision plan that covers exams, Commercial Insurance – contacts, and eyeglasses on an annual renewable Midwest Bankers Insurance basis. This plan has grown dramatically thanks to the Services (MBIS) low premiums and solid benefits. MBIS is a jointly owned subsidiary of the MBA and the CONSULTING Wisconsin Bankers Association operating in Minnesota, GROUP Wisconsin, and North Dakota. MBIS specializes in providing insurance policy education, internal control IT Consulting consultation, best practices, and insurance placement for the following insurances: MBA’s IT consulting is designed exclusively for MBA member banks and we continued to expand our • Cyber Liability services this past year. We worked with banks on comprehensive strategic technology plans, business • Directors & Officers Liability continuity plans, information security testing, audits, and assessments to ensure banks are following • Financial Institution Bond industry best practices. The MBA’s consulting group assisted member banks with the following services: • Excess Deposit Bond • External Network Vulnerability Assessment • Civil Money Penalty • Information Security Assessment and Audit • Property and Casualty • Internal Vulnerability Assessment • Workers Compensation • Social Engineering Assessment • Mortgage Hazard • Vendor Management • Mortgage Impairment • Technology Strategic Planning • Flood Solutions • TRAC™ Implementation We are pleased to report that MBIS now works with over 200 community banks ranging in size from $20 • Security Training and Board Education million to over $8 billion in assets. • Customer Education • Core Banking System Vendor Evaluation and Contract Management Group Insurance Finance For over 60 years, the MBA Employee Benefits Trust Our Finance Department manages the accounting and (EBT) has provided high quality dental, life, and investments for MBA as well as our subsidiaries and disability products to Minnesota banks. As specialists affiliates including MBA Employee Benefits Trust, MBA in the banking industry, the EBT fully understands the Insurance and Services, Midwest Bankers Insurance needs of today’s bankers. By grouping together more Services, and Bankers Building LLC. Most of our than 5,000 Minnesota employees, the EBT secures funds are invested in CDs at member banks. Bids are lower premium rates for all. This results in lower solicited periodically through announcements in MBA costs and gives your bank a valuable tool in hiring and News, our website, and via email. It is likely that each retaining talented staff. entity will report year end net income in excess of both budget and the prior year end. MBA and affiliates are Additionally, we now have 44 banks and nearly 1,700 financially strong. We have no debt, and our net worth Minnesota bank employees enrolled in the Iowa exceeds policy guidelines. Bankers Benefit Plan, our health insurance brokerage, which we began marketing on an exclusive basis

Associate Members & Sponsors The MBA is very proud to partner with the many companies Emergent Software that make up our Associate Members, Endorsed Vendors Executive Benefits Network and Partners. These companies specialize in providing Federal Home Loan Bank Des Moines valuable services to our member banks. FIPCO Fiserv Associate Members Fredrikson & Byron Gislason & Hunter LLP The MBA counts 116 companies as Associate Graduate School of Banking at Colorado Members. These firms provide a wide range of Graduate School of Banking-Madison products and services to Minnesota banks, including Haberfeld accounting, legal counsel, investment services, branch HTG Architects redesign and architecture, technology solutions, IntraFi Network insurance products, cash management solutions and Jellum Law, P.A. enterprise risk management. Kasasa Locknet Managed IT Associate Members also provide valuable educational Loffler Companies, Inc. content to MBA member banks through articles M | J | B Law published in MBA News, free webinars and as faculty Midwest Bankers Insurance Services for some MBA educational programs. MoneyGram International Ncontracts Thank You to Our 2021-2022 Network Center, Inc. Sponsors! Northland Securities, Inc. PCBB The MBA is very grateful for the sponsorship we Promontory MortgagePath receive for MBA schools and conferences, including PULSE, a Discover Company the Annual Summit, Women in Banking Conference, Purple Wave Auction Commercial Lending School, CFO Conference, Reich & Tang Leadership Development Academy, and the Operations Remedy Consulting & Technology Conference. Their support is critical to RSM US LLP ensure that we offer the best possible experiences and SBS CyberSecurity, LLC greatest value to MBA member bankers. Scantron Technology Solutions SDN Communications Abrigo SHAZAM American Bankers Association Stifel Financial Anastasi Jellum Strategic Resource Management (SRM) Ascensus Superior IRA & HSA BancAlliance The Baker Group Bell Bank Travelers BHG Financial UFS LLC BMO Harris Bank - Correspondent Banking UMB Bank ByteSpeed Union Bank & Trust CASE Financial United Bankers’ Bank CliftonLarsonAllen LLP Vantage Point Solutions Computer Integration Technologies, Inc. wild | crg CoNetrix Winthrop & Weinstine, P.A. Consolidated Communications Wipfli LLP Country Club Bank Cyber Advisors, LLC Dakota Carrier Network (DCN) Edge One Eide Bailly LLP

Vendors & Partners Endorsed Vendors ensuring safe, secure environments in nursing homes, HUD communities, and veterans homes. Through our Endorsed Vendor program, the MBA and With hundreds of banks already participating in our its for-profit affiliate – MBA Insurance & Services, Inc. program, we are protecting thousands of seniors and (MBA ISI) – selectively identify and vet products and veterans across America. services that have a significant potential to strengthen the business of banking in Minnesota. MBA member KeyState Captive Insurance Program banks also receive discounts on these products and KeyState Companies is a leader in helping banks services, putting the combined buying power of all form and manage a captive insurance company. Minnesota banks to work for you. Their captive insurance company program works in conjunction with each bank’s existing bank insurance The MBA proudly endorses the following products and coverages, giving the bank an effective way to manage services and we encourage you to learn more about some of the bank’s business risks. them by clicking on the Vendor Relationships tab at www.minnbankers.com. Ascensus Fully-Administered and Ncontracts Third-party Vendor Management Self-Administered IRAdirect Ncontracts is a leading provider of vendor and contract The MBA endorsement covers the Ascensus Fully- management services for the financial institution Administered and Self-Administered IRAdirect industry. Ncontracts combines turnkey vendor program. This fully supported, web-based program has management services with a comprehensive and built-in compliance systems that help ensure your bank fully-customizable vendor and contract management properly establishes its IRA, HSA and ESA accounts, application. Insightful summaries of vendor contracts cutting back the number of technical errors that can and alert notifications assist clients in proactively occur using paper forms. Banks can choose to continue managing vendor relationships. administering these accounts, or they can outsource the tax reporting and other administration functions to Ascensus by choosing the Fully-Administered option. Turnkey CRA Compliance Program ODP Business Solutions Bank-specific Discount Program CRA Partners is a turnkey CRA compliance program established to create safe and secure living As an Office Depot customer, you will have access to environments for the elderly with help from local Office Depot’s exclusive Business Solutions Division banks. We have helped hundreds of community banks website, strategic brand name partnerships, multi- across the country protect residents of low-income billion dollar buying power, and ease in economizing senior housing facilities through our trusted Senior your operations. Enjoy customer service from Office Crimestoppers program. Depot that is unmatched in the industry. If you are an employee of an MBA member organization, you can Partner with us and you will satisfy your bank’s register for an Employee Discount Account at the link CRA requirements, boost your community relations found in the Endorsed Vendor section of the MBA’s profile and develop new business relationships, while website.

Shred-It In FY 2016-17, the MBA entered into a co-marketing partnership with Discover Debit to promote this Shred-it specializes in providing a tailored document product as a preferred debit card solution for and media destruction service that allows businesses community banks. to comply with legislation and ensure that the client, employee and confidential business information is kept secure at all times. Through their strict chain- of-custody processes, reliable on-time service and a global network of local service centers, Shred-it provides the most secure and efficient confidential information destruction service in the industry. Partners Secure Banking Solutions TRAC™ Software In addition to our Endorsed Vendors, the MBA very The MBA continues its partnership with TRAC, an selectively enters into co-marketing partnerships with integrated cybersecurity risk management software, vendors offering unique technology products that provided by Secure Banking Solutions. This web-based benefit Minnesota banks and where co-marketing software simplifies the risk management process provides the best solution to educate MBA members and allows the user to make more informed security about the product and its benefits. decisions. Minnesota banks are using over 400 modules of the TRAC software.