Table of Contents
Background Information
Section 1 Message from our President Central States Capital Markets Central States Capital Markets Section 2 Broker/Dealer Services Public Finance Services Cash Management Services Equity Portfolio Management Service Bank Consulting Services Our Team Section 3 Section 4 Team of Service Providers Professional Biographies Financials Kansas City Office| Ph. 800‐851‐6459 | Fx. 913‐766‐5860 4200 West 83rd Street, Suite 101, Prairie Village KS 66208 Wichita Office | Ph. 800‐444‐9411 | Fx. 316‐265‐9415 245 N Waco, Ste 525, Wichita, KS 67202 Welcome
Dear Valued Customer, I would like to thank you for taking the time to learn about Central States Capital Markets, LLC services and professional staff. We pride ourselves on our ability to listen and develop plans based on your specific needs. You will learn that our strategy is tailored to meet and achieve your individual financial objectives. With over 200 combined years of experience and a billion dollars of underwriting experience, our Team is one of the Midwest’s leading investment firms. Your Investment Representative has access to a number of specialists with expertise in fixed‐income securities, government and municipal underwritings and portfolio management. We value your business and continue our pledge to provide you with the best products and services to help you achieve your investment goals. J. Daniel Stepp Managing Director – CEO Central States Capital Markets, LLC Broker Dealer Services
The Institutional Division of Central States Capital Markets (CSCM) provides fixed‐income customers a value‐added sales approach to portfolio management and consultation. The Division’s mission is to search the investment marketplace for the best price on securities utilizing a portfolio driven approach, not a sales approach. CSCM’s professional fixed income money managers are dedicated to providing clients with objective, successful and timely portfolio management, honed by experiencing multiple interest rate cycles over 30+ years. Traditional Broker/Dealer Services •
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Regional Municipal Underwriting Competitive Prices Experienced Professional Staff Complete Universe of Security Products Portfolio Driven Approach Regulatory Compliance •
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Interest Rate Risk Management Services Stress Tests Securities Documentation Cash Management Services •
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Money Market Funds Laddered Portfolio Management Investment Policy Creation Full Corporate Treasury Management Tax Free Investing Retirement Services •
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401(k) Plans for Companies of All Sizes Total Management and Documentation at One Spot Experienced Staff and Rapidly Growing Public Finance Services
Central States Capital Markets (CSCM) can aid in your decision if bond financing is a viable solution for your financing requirements. Whether you are a nonprofit or for‐profit business, municipal bond financing is a low‐cost solution for the construction, expansion or purchase of buildings, land and equipment. Your CSCM Investment Representative can provide a seamless transition from your municipal bond application process to the actual closing and delivery of your bond issue through our own underwriting capabilities. Tax‐exempt and taxable financing services are specialized for state and local governmental agencies, health care providers, educational and industrial corporations, spe‐
cial authorities and non‐profit organizations. The advantages for tax‐exempt bond financings can include: fixed interest rates, lower total interest cost than conventional loans, property tax abate‐
ments and state sales tax exemptions. Underwriting Services • Analyze Financing Options Bond Issues Underwritten • General Obligation •
Determine Debt Capacity •
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Develop Financing Structure Electric, Water and Sewer Revenue •
Public Building Commission review •
Airport Authority Revenue •
Certificates of Participation •
Lease Purchases •
Assist with Bond Election •
Prepare Notice of Bond Sale •
Prepare Preliminary and Final Official Statement •
Assist in the Review of Bids •
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Coordinate All Legal and Financial Matters Industrial Development Revenue •
Healthcare Revenue Coordinate Bond Closing •
Higher Education Revenue •
Multi‐Family Housing Revenue •
Cash Management Services
Central States Capital Markets (CSCM) provides customers with a consultative ap‐
proach to their daily cash management. CSCM is a broker/dealer with powerful resources typically attributed only to the financial heavyweights, but has refined its ability to deliver services in a more personal manner reflecting Midwest values and respect for each customer’s needs. CSCM’s professionals average over 30 years experience each and are dedicated to providing a high level of service with an emphasis on customer suitability, innovation, and maximization of income to the customer. Development of Corporate Investment Policy • Identification of Investment Objectives • Investment Guidelines • Risk Exposure Evaluation • Structuring Liquidity and Maturity Needs Identification of Tax Status • Federal and State Tax Exemption Needs • AMT Tax Avoidance Requirements Cash Forecasting and Portfolio Development • Customized Portfolio Development for Each Investor • Determination of Monthly, Quarterly and Seasonal Cash Needs • Liquidity Based Portfolio Management Portfolio Management • Full Investment Management • Shared Investment Management • Fee Based Investment Advisory Services Complete Selection of Cash Management Products • Money Market Funds • U S Government Securities • Discounted CD’s • Commercial Paper • Municipal Bonds Custodial and Clearing Options • Utilize Pershing through Central States Capital Markets • Provide Full Treasury Management through Existing Custodian • Establishment of 3rd Party Custodian • Debit and Credit Access to Any Bank Account Nationwide Equity Portfolio Management Service
Central States Capital Markets provides equity portfolio management. This service is offered to individuals, pension and profit sharing plans, trusts, estates, charitable organizations, corporations, and other business entities. This service provides continuous monitoring and managing of a client’s equity portfolio. Portfolio changes are made as market conditions warrant. Investment decisions are made by Central States Capital Markets on a discretionary basis with the goal of providing the client with reasonable investment returns while managing investment risks. Portfolios will typically hold thirty five to sixty stocks and be diversified across a wide range of industries, economic sectors, and market capitalizations. ETF’s and mutual funds are also used to some extent. At times cash equivalents can constitute a significant portion of the portfolio (up to 50%) when reduced portfolio risk is desired. A value oriented approach is utilized in the management of portfolios. A combination of fundamental, quantitative, and technical analysis is used in the stock selection process. Investments are made in companies that are believed to be selling at reasonable prices relative to their sales, cash flow, earnings, or book values and that have improving fundamentals. Balance sheet quality is also a consideration. For more information about the services which includes the fees and risks, please read our Investor Brochure. Consulting Services
Central States Capital Markets’ Consulting Services Group (CSG) provides Strategic Consulting, Asset Liability Management, Investment Portfolio Analytics and other analytical Treasury Support to community and regional depository institutions. Our approach has two equally important components. First, we make many of the same advanced analytical methods used by large, complex banking groups available to institutions of all sizes. Secondly, we tailor a combination of targeted reporting, training and decision‐making support services to align with our client’s needs. Some of the services we offer include: Balance Sheet Modeling [ALM/EVE] •
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Full Balance Sheet and Instrument Level Analytics Income Simulation and Economic Valuation Customizable ALCO Reporting Options Capital, Liquidity, and Optionality Monitors Compliance and Examination Support Back‐testing and Assumption Documentation Treasury Analytics •
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Funds Management/ALCO/Investment Policy Review Non‐Maturity Deposit Analysis Non‐Interest Income Sensitivity Analysis Model Validation •
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Test Data Inputs and Review Modeling Assumptions Review Model Mechanics and Methodologies Test Accuracy of Model Results Review MIS Reporting and Model Suitability Review Governance and Control Structures Full‐Scale Parallel ALM Model Runs Team of Service Providers
Executives Dan Stepp Casey McLiney Jim McLaughlin Michael Horton Steve Freidell Partner & Managing Director – CEO Partner & Managing Director – Business Development Partner & Director – Sales Partner & Branch Manager – Wichita Partner – Sales Senior Vice President – Municipal Trading Vice President – Municipal Trading Senior Vice President – Taxable Trading Traders Jim Brownfield Rebecca Gibb Dennis Wagner Public Finance Underwriters Terry Everson Dave Malone Vice President, CPA – CFO Vice President Investment Representatives Joe Bartels Sandra Stump Craig Sutherland Ryan McLaughlin Senior Vice President Vice President Assistant Vice President Assistant Vice President Equity Portfolio Manager Wade Whitham Senior Vice President Consulting Services Tim Siengsukon Dale Pfeifer Jim Lewis Vice President ‐ ALM & Investment Consultant Vice President of Consulting Services Consulting Services Analyst Operations Group Pam Kasper Emma Ludgate Diane Winter Vice President Assistant Vice President Vice President Executives
Dan Stepp, Partner & Managing Director – CEO | Prairie Village, KS Dan Stepp, bringing over 40 years of investment expertise to the organization, leads Central States Capital Markets, LLC. He is a past president of the Kansas City Municipal Bond Club, and has been actively involved in committee work with the Kansas Bankers Association. Dan began his investment career with Commerce Bank of Kansas City as a Trader/Underwriter in 1971. He began working for A.F. Stepp Investments Inc. in 1973, where he was involved in trading, underwriting and sales. In 1987, A.F. Stepp Investments Inc. was sold to Security Bank of Kansas City, Kansas and Dan was appointed Senior Vice Presi‐
dent and Manager of the Investment Department as well as managed the Bank’s proprietary investment account. In 1996 Dan was a co‐ founder of Midwest Capital Management, which was later purchased by Gold Bank in 1998, which merged with M&I bank in 2006, and subsequently purchased by DeWaay Financial Network on December 31, 2007. In January of 2011, the core group of Midwest Capital Management was bought from DeWaay to form Central States Capital Markets. Dan earned a Bachelor’s degree in Business from the University of Kansas and is a graduate of the Public Finance Institute of the University of Michigan. Dan is the proud father of four and has five grandchildren. Casey McLiney, Partner & Managing Director‐ Business Development | Prairie Village, KS Casey McLiney began his Banking career in 1999 working for community banks in Kansas. In 2002, McLiney joined Dan Stepp at Gold Capital Management and began his career working with financial institutions and individuals throughout the country. Casey has worked with many customers throughout the region helping them with trading, portfolio management, fixed income analysis, asset / liability and strategic planning. In 2006, McLiney left Gold Capital and started working for a large Kansas Bank holding company. In 2011, McLiney joined Dan Stepp, Stephen Freidell, Jim McLaughlin and Michael Horton helping lead this group in the acquisition and formation of Central States Capital Markets. Casey is very involved in the KBA, YBOK, Community Bankers of America, Ozark Bankers, and MBA. Casey is a graduate of Kansas University. Casey is married to Carrie McLiney and they have six great children. Jim McLaughlin, Partner & Director – Sales | Prairie Village, KS Jim McLaughlin began his investment career in 1975, developing an institutional client base at Commerce Bank of Kansas City. His responsibilities included investment portfolio management and business development. He provided portfolio accounting and analytics, asset liability management, tax‐trading/swaps, technical analysis and economic forecasting. After his tenure at Commerce Bank, Jim joined Gold Capital Management in 1996. As a Senior Vice President there, he worked with financial institutions in Nebraska, Iowa, Kansas, Missouri and Oklahoma, managing their investment portfolios and interest rate risk. He has been involved with the planning of an ABA Investment Conference, as well as a panelist at KBA and FHLB Investment Conferences. Jim earned his Bachelor’s degree at Rockhurst University with a major in Marketing and a minor in Economics. Jim and his wife Joanie are very active in church and community projects. They have five children and three grandchildren. Executives
Stephen J. Freidell, Partner ‐ Sales | Prairie Village, KS Steve Freidell has assisted clients in their cash management, trading, and portfolio management of fixed income securities since 1975. Steve started his career at the First National Bank of Kansas City and later served as First Vice President with Commerce Bank where he served his clients well for 25 years. Steve joined our organization in 2006. Steve serves a diverse group of customers which include: Corporations, Municipalities, Insurance Companies, Not‐For‐
Profit Organizations and individual customers. He implements investment strategies using a partnership approach with the customer to manage their portfolio and meet their specific cash‐flow needs. He works extensively with institutional customers drafting and implementing investment policies. His portfolio management style is centered on the safety and liquidity needs of his customers. Steve received his Bachelor of Science in Business Administration from Emporia State University, Emporia, Kansas. Michael A. Horton, Partner & Branch Manager| Wichita, KS Mike Horton has assisted High Net‐Worth Individuals, Money Managers, Banks, and Trust Departments for over 30 years. He began in career in 1982 with the local Wichita municipal firm J.O. Davidson & Associates. He mentored under Ron Ott, a highly regarded Municipal Principal, and was Senior Vice President of the firm when it was acquired by Gold Bank in 2001. Gold Bank merged with M&I Bank in 2006 and Mike was named Senior Vice President –Branch Manager. DeWaay Financial Network purchased the Midwest operations of M&I Bank in 2007, and in January 2011 Mike and his Partners in Kansas City formed Central States Capital Markets and purchased the Kansas City and Wichita assets from DeWaay. Mike is involved with all facets of Central States municipal operations, including trading, underwriting and marketing. Mike is a lifelong resident of Wichita and is a current board member of the Wichita Air Capital Cosmopolitan Club and a past 2 term President of the Wichita Collegiate School Booster Club. He and his wife Terri have 2 children. Investment Representatives
Joe Bartels, Senior Vice President | Prairie Village, KS Joe Bartels began his investment career with Commerce Bank of Kansas City in 1967. He was responsible for establishing Commerce Bank’s Money Market Center in 1970. In 1973, he was appointed Vice President and assumed the responsibilities of managing the investment portfolio of Commerce Bank and its Bancshares affiliates. In 1978, Joe joined Intra‐State Financial Corporation in Dayton, Ohio, as Senior Vice President and Chief Investment Officer. Upon the sale of Intra‐State in 1984, Joe returned to Kansas City and joined Stern Brothers, where he began his career in investment sales. In 1993, he joined the Investment Division of Security Bank, Kansas City, Kansas, which became part of the Central States Capital Management staff on March 1, 1996. Joe has three children. Wade Whitham, Senior Vice President – Equity Portfolio Manager | Prairie Village, KS Wade has more than thirty years of investment experience and has been a portfolio manager for twenty five years. During this time he has experienced the ups and downs of a variety of economic and market cycles. He has managed investment portfolios while working for bank trust departments and also independent registered investment advisers. During his career he has managed several different equity funds and many individual and institutional separate accounts. Wade received his MBA from the University of Missouri‐Kansas City and his undergraduate business degree from Kansas State University. Sandra K. Stump – Vice President | Wichita, KS Sandra Stump (Sandy) has over 30 years experience in the general securities business. She started her career with R.G. Dickinson & Co., a regional brokerage firm in November 1983. In 1993, the Wichita branch became Riedl & Co. and later Riedl First Securities where she was made Vice President of Sales. In 1999, Sandy was selected as one of the up & coming young business professionals in the Wichita Business Journals’ “40 under 40”. Sandy moved to J.O. Davidson & Associates in 2001, which is now the Wichita branch of Central States Capital Markets, LLC. During her career, Sandy has specialized in the trading, marketing and pricing of municipal and corporate securities. She also has extensive experience in the marketing of equities and mutual funds. Sandy takes pride in helping individual clients, not‐for‐profit foundations, and institutions solve problems and achieve their particular financial goals. Sandy received a Bachelor of Science degree from Wichita State University double majoring in Administration of Justice and Sociology. Sandy and her husband Mark have two sons. They are very active volunteers in church, school, and community projects and are diehard Wichita State University Shocker fans. Ryan McLaughlin – Assistant Vice President | Prairie Village, KS Ryan McLaughlin began his investment career in 2011. After spending 9 years in commercial construction in project management, estimating, and business development, Ryan developed a keen eye for value. As the son of Jim McLaughlin, Ryan has been around banking and investments all of his life. Seeking a new challenge, Ryan joined Central States Capital Management and handles accounts in Missouri, Kansas, Nebraska, and Iowa. He is actively involved in the KBA, MBA, CBAK, and YBOK. Ryan has his Series 7 and Series 66 licenses. Ryan majored in Marketing with a minor in Economics and a minor in Spanish at Marquette University in Milwaukee, WI. In his free time, Ryan enjoys playing golf and coaching lacrosse. Ryan and his wife Laura were married in the spring of 2013. Fixed Income Trading
Jim Brownfield, Senior Vice President – Municipal Trading and Underwriting | Prairie Village, KS Jim Brownfield began his investment career at UMB Bank in 1987 as a junior trader on the municipal desk. There he learned the basics of municipal analysis, trading and underwriting working with a sales force of over 30 professionals. His knowledge of analyzing credits grew as he worked with UMB’s investment account, implementing strategies and executing trades. In 1994 Jim moved to Commerce Bank of Kansas City where he was appointed Vice President and assumed the responsibilities of managing the municipal trading and underwriting desk. Over the next dozen years Jim oversaw the transformation of the area, growing into one of the region’s most respected municipal desks. Jim’s conservative approach regarding municipal credits and trading philosophy served all departmental customers well – banks, corporations, insurance companies, municipalities and individuals. Jim joined the Central States Capital Markets staff in 2007 and oversees municipal trading and underwriting in the Kansas City Office. Jim graduated Summa Cum Laude from the University of Missouri‐Columbia in 1987 with a Bachelor of Science in Business Administration with an emphasis in Finance. He is a past president and current member of the Kansas City Municipal Bond Club. He resides in Blue Springs with his wife Kristy and their two children. Rebecca L. Gibb – Vice President – Municipal Trading | Wichita, KS Becky Gibb began her investment career in 1968 in the fixed income department of a regional brokerage firm in Des Moines, Iowa where she assisted in the trading and underwriting of fixed income securities. In 1981, she was named Manager of Fixed Income Trading for that firm and assumed the supervisory responsibility for five traders who provided products and services to a sales force of approximately 250 sales representatives located in branch offices across the country. She maintained that position until 1993. Following a four year sabbatical from the securities business, Becky moved to Wichita, Kansas and was employed by two regional brokerage firms as a fixed income trader prior to joining the Central States Capital staff in 2004 as a sales representative and Kansas municipal trader for the Wichita office. Becky and her husband Bob have seven children, eight grandchildren and 3 great‐grandchildren. Dennis R. Wagner, Senior Vice President – Taxable Trading | Prairie Village, KS Dennis Wagner has assisted clients in cash management, trading and portfolio management of fixed income securities since 1977. His prior experience included working as a state bank examiner and a cash manager for a utility company. He went on to manage the fixed income trading desk for Commerce Bank and served corporate customers with their investments. Dennis joined our organization in 2006. Dennis currently serves a diverse group of customers which include: Corporations, Municipalities, Insurance Companies, Not‐For‐Profit Organizations and individual customers. He assists customers in preparing their investment policies and implements investment strategies using a partnership approach to meet their specific cash‐
flow needs. His conservative philosophy and product knowledge helps to diminish the risk in the investment portfolio. Dennis received his Bachelor of Science in Business Administration from the University of North Dakota. Public Finance Underwriting
Terry O. Everson, CPA, Vice President – Underwriter and Financial Advisor | Wichita, KS Terry specializes in financial analysis and underwriting for Central States Capital Markets. He has a CPA license and 20 years experience in the public accounting profession which he gained at a national accounting firm. Mr. Everson earned his Bachelor of Business Administration degree with an emphasis in Accounting from Wichita State University. He has Series 7, Series 24, Series 27 and Series 63 securities licenses and currently holds designations as a General Principal and a Financial & Operations Principal. Mr. Everson is also the firm's Chief Financial Officer. Dave Malone, Vice President – Underwriter and Financial Advisor | Wichita, KS Dave has been in the securities industry since 1983 and is a member of the Public Finance team. He is responsible for the financial advisory and underwriting activities of the firm working with various cities, counties, rural water districts, public wholesale water supply districts, school districts, other special quasi‐municipal entities throughout the states of Kansas and Missouri. Prior to entering into the area of finance, Dave was employed for thirteen years as a consulting engineer working directly with clients in the design of their municipal and rural water district water distribution systems. His previous experience and knowledge in this area has given him tremendous advantage in financings of a similar nature. Dave has to his credit many issues warranting complex and innovative financing techniques and the firm has implemented proprietary computer programming to assist in the analysis of debt structuring. Consulting Services
Tim Siengsukon, Vice President – ALM & Investment Consultant | Prairie Village, KS Tim Siengsukon provides fixed‐income investment and interest rate risk management service to depository institution clients. He holds dual roles as the manager for the bank consulting group and a fixed income representative. A total balance sheet approach is taken to help clients better manage their increasingly complex balance sheets. Tim Siengsukon began his investment career at UMB Bank in 2002 as a financial analyst preparing asset liability management, bond portfolio and other financial reporting. In a short tenure as bond sales assistant, he aided community depository institutions in bond portfolio transactions, analyzed bond swaps and built sales tools to assist in portfolio decision‐making. In 2007, the investment banking department began implementing an advanced asset liability consulting service. Tim was appointed as Vice President and Senior Analyst to help develop and service clients in the realm of interest rate risk management. In 2009, he joined Central States Capital Markets to establish an advanced Asset‐Liability Management solution. The consulting group offers an ALM reporting service bureau and general treasury consulting. He has presented at the KBA Economic Outlook and has worked with institutions in Missouri, Kansas, Iowa, Nebraska, and Oklahoma. Tim has earned Series 7 and Series 63 securities designations. Educationally, he has a BA in Economics and a BS in Biology from Rockhurst University and a MBA from the University of Kansas. Tim and his wife Katie have four children. Dale Pfeifer, Vice President – Consulting Services | Prairie Village, KS Mr. Pfeifer is a customer focused Asset/Liability Management Specialist who has successfully analyzed and managed both sides of bank balance sheets. He began his professional career examining banks with the Office of the Comptroller of the Currency and then transferred to the private sector to specialize in bond portfolio and treasury management. He has handled funds management and interest rate risk measurement and mitigation for several regional banking organizations. Mr. Pfeifer has chaired ALCO Committees and his competencies include Portfolio Strategy Development, Net Interest Margin Expansion, Strategic and Capital Planning, Bank Policy Development, Contingency Funding, Asset and Liability Pricing, Risk Modeling and Mitigation, Exam Compliance, and Stress Testing. Dale received his MBA from the University of Kansas and his undergraduate business degree from Fort Hays State University. He is a proven capital markets expert and has earned Series 7, 63 and 65 Securities Designations. 2014 Year End Balance Sheet
Central States Capital Markets, LLC
Balance Sheet
December 31, 2014
ASSETS
Current Assets
Cash and Cash Equivalents
Cash ‐ Restricted
Investment Inventory
Prepaid Expense
Accounts Receivable
$ 269,553
$ 350,000
$ 134,355
$ 25,069
$ 27,000
Total Current Assets
Furniture and Equipment
Accum. Depreciation
$ 805,977
$ 191,810
$ (124,832)
Total Furniture and Equipment
Other Assets
Goodwill
Deposits held
$ 66,978
$ 1,559,236
$ 11,927
Total Other Assets
$ 1,571,163
Total Assets
$ 2,444,118
LIABILITIES AND CAPITAL
Current Liabilities
and Accrued Liabilties
Note Payable
$ 85,642
$ 312,444
Total Current Liabilities
Capital
Member's Capital Account
Total Capital
Total Liabilities & Capital
$ 398,086
$ 2,046,032
$ 2,046,032
$ 2,444,118
This is neither a solicitation to buy nor an offer to sell any security. All investments
have risks and may lose value. Most products are not FDIC insured and do not possess
bank guarantees. Returns will vary and past performance does not guarantee future
results. Member FINRA/SIPC and Registered with MSRP.
T H I S I S N E I T H E R A S O L I C I T A T I O N T O B UY N O R A N O F F E R T O S E L L A N Y S E C UR I T Y . A L L I N VE S T M E N T S H A V E R I S K S A N D M A Y L O S E V A L U E . M O S T P R O D U C T S A R E N O T F D I C I N S UR E D A N D D O N O T P O S S E S S B A N K G U A R A N T E E S . R E T U R N S W I L L V A R Y A N D P A S T P E R F O R M A N C E D O E S N O T G UA R A N T E E F UT UR E R E S UL T S . M E M B E R FINRA/SIPC A N D R E G I S T E R E D W I T H MSRB N O T FDIC I N SU R E D | M A Y L O S E V A L U E N O B A N K G U A R A N T E E