Nebraska bankers tackle weather, competition as convention convenes

2019 Leadership of the Nebraska Bankers Association, from left: Richard Baier, NBA president/CEO; NBA Chair Alan Emshoff, president/CEO of Generations Bank, Exeter, and NBA Chair-elect Chris Hove, president/CEO of Nebraska Bank of Commerce, Lincoln.

The devastation caused by spring flooding in Nebraska will take months to fully calculate. For farmers, the challenges include accounting for the loss of an entire inventory, and the largest losses have been livestock. There is some farmland covered so deeply in sand and gravel, however, that it may never be useful for farming again.

“We feel for those folks and we’re trying to be a conduit to find them help,” said Alan Emshoff, president and CEO of Generations Bank, Exeter, Neb., who was elected chair of the Nebraska Bankers Association on May 2. Emshoff’s bank is located about 100 miles from the worst flooding but his role with NBA puts him into the heart of efforts to provide relief. (See more below.)

Shining a light on the challenges in ag is one of two Emshoff priorities during his year as NBA chair. The other is continuing NBA’s focus on developing a workforce for the industry.

Emshoff, NBA president and CEO Richard Baier and Dave Dannehl, who completed his year as NBA chair at the May 1-3 convention, held in Omaha, have been out speaking to college students to let them know “banking is a good career” that encapsulates more than being a teller or loan officer, Emshoff said.

Those conversations invariably lead to discussions about PayPal and Venmo (arguably the top two reasons banks currently struggle with liquidity). “We talk to them about the large amount of money sitting in uninsured deposits,” Emshoff said. “I think a lot of students are kind of startled. I’m not sure they really grasp what FDIC insurance is all about.” Young people have a hard time looking beyond convenience, he added.

Liquidity is increasingly become a challenge for banks in Lincoln, said Chris Hove, president and CEO of Nebraska Bank of Commerce, Lincoln. Hove was recently elected as chair-elect for NBA. Nebraska’s capital city includes a number of long-established banks but many outstate institutions are establishing branches in Lincoln, Hove said. “They set up an operation because they are so hungry for deposits and new loans, and they’re pricing them both accordingly,” Hove said. “Our margins are getting tighter as we go.”

Banks in Nebraska have been beating back competition from credit unions also, said Baier. “We’re seeing big, national credit unions jumping into Nebraska and that’s really creating consternation with our members,” he said. Liberty First Credit Union, Lincoln, and MembersOwn Credit Union both filed substantial expansion applications with the Department of Finance and Banking, against which NBA filed formal objections. Liberty ended up withdrawing its application but there’s no word yet on the status of MembersOwn’s application. “We are being very diligent about challenging those expansion opportunities,” Baier said.

A recent legislative win for NBA was the passage of  LB622, a bill first introduced by Sen. Matt Williams, chair of Gothenburg State Bank, Gothenburg, Neb. The law authorizes the use of a single bank pooled collateral method to collateralize public funds in excess of the FDIC insured deposits. It takes effect July 2020.

“This is a great opportunity to free up capital for our member banks,” Baier said. “Many of our institutions work with lots and lots of political subdivisions and to make sure they aren’t under-collateralized, they often over-collateralize. This is a real benefit.”

Nebraska flood recovery efforts
The Nebraska Bankers Association hosted a webinar in April focused on flood recovery. “We had 145 people on that call,” said Alan Emshoff, NBA chair, who is president/CEO of Generations Bank, Exeter. The association also raised $135,000, which will be directed toward recovery efforts, sharing resources with bankers and bank customers living in flood-impacted communities, and reaching out to different community groups to help people locate financing as rebuilding commences. The NBA has already compiled a list of resources.