OVER A CENTURY: BUILDING BETTER BANKS — Helping Coloradans Realize Dreams September/October “THE ECONOMY ISN’T PARTISAN, AND NEITHER IS THE BANKING INDUSTRY.” — Jenifer Waller, President & CEO, Colorado Bankers Association
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©2024 The Colorado Bankers Association is proud to present Colorado Banker as a benefit of membership in the association. No member dues were used in the publishing of this news magazine. All publishing costs were borne by advertising sales. Purchase of any products or services from paid advertisements within this magazine are the sole responsibility of the consumer. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of Colorado Banker or its publisher, The newsLINK Group LLC. Any legal advice should be regarded as general information. It is strongly recommended that one contact an attorney for counsel regarding specific circumstances. Likewise, the appearance of advertisers does not constitute an endorsement of the products or services featured by The newsLINK Group LLC. Jenifer Waller President & CEO Alison Morgan Director of State Government Relations Brandon Knudtson CFO & Director of Membership Lindsay Muniz Director of Education Patricia Wells Director of Communications Megan Carruth Executive Assistant Margie Mellenbruch Bookkeeper* Melanie Layton Lobbyist* Garin Vorthmann Lobbyist* Andrew Wood Lobbyist* Caroline Woodhouse Lobbyist* *Outsourced 140 E. 19th Ave., Ste. 400 Denver, Colorado 80203 Office: (303) 825-1575 Websites: coloradobankers.org smallbizlending.org financialinfo.org colorado-banker.thenewslinkgroup.org BUILDING BETTER BANKS — Helping Coloradans Realize Dreams 10 20 4 MESSAGE FROM THE CEO Banking Isn’t Partisan By Jenifer Waller, President & CEO, Colorado Bankers Association 5 Credit Card Competition Act By DJ Summers, Director of Policy Research, Common Sense Institute 6 CECL Q Factors Be Ready To Answer 3 Questions By Mary Ellen Biery, Senior Strategist & Content Manager, Abrigo 8 How the SBA 504 Loan Can Help Your Bank Compete on Interest Rates By Jessica Stutz, Lending Director, B:Side Capital 10 How a DEI Focus Can Support Affirmative Action Compliance By Julia Paris, Esq., Director, Specialized Consulting Services, Employers Council 12 CBA Centerpoint Going Beyond the Desk to Hear the Stories of Colorado Bankers 14 Dominating Share of Voice in the Digital World A Guide for Financial Institutions By Adam Lee, President, Techint Labs 18 Managing Liquidity in an Uncertain Rate Environment By H.D. Barkett, Senior Managing Director, Treasury Desk, IntraFi 20 Succession Planning How to Effectively Pass the Baton of Leadership By Karen Brown, CEO, Exponential Results 2024-2025 Issue 2 3 Colorado Banker
Banking Isn’t Partisan MESSAGE FROM THE CEO IIn this chaotic election year, I am often asked what we will do if this or that person gets elected. The answer is we do what we always do. We build relationships, educate public officials on key banking issues and advocate for the industry. The positions we take are for the betterment of Colorado customers, businesses and banks. The economy isn’t partisan, and neither is the banking industry. We will be working with new public officials at both the federal and state level. Many races, including the presidential race, remain unknown. The races are too close to call and many things can happen between now and election day. To quote Kirstin Sutten, EVP of Congressional Relations and Legislative Affairs for the American Bankers Association, “Regardless of who wins, our mission remains the same — we advocate for the banking industry.” This election season, I cannot stress enough the importance of reaching out to candidates to determine who aligns with your professional and personal values. Establishing a relationship now before a candidate is elected can be very beneficial. Candidates are eager to meet voters and hopefully constituents. You can attend a meet and greet, fundraiser or just find time to grab a cup of coffee with a candidate. Go to the candidate’s website and request a meeting or attend an event. If you need any help, Alison and I are happy to assist. We at CBA try to meet all candidates during election season. After the election, we meet all who were successful. Relationships matter, and becoming a trusted resource to public officials is vital to the success of the industry. Very few public officials know banking or, more importantly, how banks serve the community. You can bridge that gap by becoming a resource they can turn to when they have a question or need advice. We have numerous bipartisan issues both at the state and federal level that we will be facing in 2025: • Credit Union Unfair Competition • Changes to Interchange • Artificial Intelligence Regulation • Capital Requirements • The Credit Card Competition Act These issues and legislation regarding them are not being brought forward by any one party and our success in defeating or amending the bills will need to be bipartisan. Regardless of election outcomes, CBA will continue to build relationships with public officials. We will educate, inform and advocate for the industry and the customers you serve. Jenifer Waller, President & CEO, Colorado Bankers Association Congratulations JENIFER WALLER President & CEO, Colorado Bankers Association Colorado Banker 4
D Credit Card Competition Act By DJ Summers, Director of Policy Research, Common Sense Institute Denver is home to the sixth busiest airport in the world. People from across the world fly into Colorado to enjoy our beautiful state. And Coloradans across the state are busy making travel plans to either visit far-away loved ones or go on well-deserved vacations. But all that traveling could soon get much more expensive. A handful of U.S. senators recently introduced a bill that would gut credit card rewards programs — eliminating many of the perks that Americans use to book flights, save on their grocery bills or just put some extra money in their pockets. Lawmakers claim the proposed legislation — called the Credit Card Competition Act of 2023 — would make it cheaper for store owners to process credit card transactions, leading to lower prices for consumers. But their plan won’t work. Retailers pocket that extra dough. More than a decade ago, Congress passed similar legislation for debit cards. The result? Higher consumer prices, fewer rewards programs and bigger profits for big-box retailers. That’s the opposite of what working families need right now. Right here in Denver, folks are feeling the impact of inflation. Prices rose 5.4% last year in our metro area. The reality is, most Americans like their credit cards and don’t see a need to overhaul the current system. Most of us choose credit cards specifically for the rewards we can earn so it’s ridiculous that Washington politicians are trying to deny us the credit card rewards we spend all year working towards. Colorado’s representatives in Washington should be fighting especially hard against this foolish plan. In 2022, nearly 720,000 people used credit card points to book air travel to Colorado. Those trips supported over 9,500 jobs in our state and contributed nearly $1.2 billion to the economy. Cutting rewards programs could seriously damage our state’s economic outlook. According to the Common Sense Institute’s Free Enterprise report, Colorado’s economic competitiveness with other states is still high but shows some early warning signs of slipping. The last thing the state needs is a nationwide bite out of valuable tourist dollars. All told, 84% of Americans with a credit card enjoy travel perks and other rewards gained with every swipe. And those benefits reach people across the income spectrum: from lower-income and working-class folks to the very wealthy. One in four households in the United States has an airlinespecific credit card. For these families, airline rewards can be the difference between making a trip to visit out-of-state family, taking a vacation or just staying at home. Fifteen million domestic flights were booked using credit card points in 2022. Ask any savvy traveler and they’ll recommend using a travel card to save on airfare, freeing up cash for accommodations, food and experiences. For many folks planning a trip to Colorado, whether to hit the slopes or visit loved ones, credit card rewards will help cover the cost of airfare. Even for families that don’t travel, cash-back and other rewards systems can easily save families hundreds of dollars each year. That is, of course, if lawmakers don’t get in the way. Regulators must see the threat this new bill poses to consumers. The Consumer Financial Protection Bureau and U.S. Department of Transportation are already paying attention — they recently hosted a joint roundtable on the challenges facing consumers’ airline credit rewards programs. Let’s hope our Colorado’s elected representatives reject the misguided plan to slash credit card rewards. DJ Summers is the director of Policy and Research at the Common Sense Institute, a nonpartisan research organization dedicated to protecting and promoting Colorado’s economy. 5 Colorado Banker
CECL Q Factors BE READY TO ANSWER 3 QUESTIONS By Mary Ellen Biery, Senior Strategist & Content Manager, Abrigo What Happened to Q Factors Under CECL? Qualitative factors, or Q factors, play an important role in calculating the allowance for credit losses. But banks and credit unions have needed to adjust how they tackle developing these adjustments under CECL, the current expected credit loss standard. Q factors — more specifically, “What’ll happen to my Q factors under CECL?” was a popular topic among bankers before the final 2023 deadline for implementing the new accounting standard. Controls around Q factors remain important, since they are an area of attention from auditors and examiners. Before CECL, many financial institutions often relied on qualitative factors for a larger percentage of their reserve when calculating the allowance for credit loss (ACL). That practice evolved as several years of good credit quality put downward pressure on the quantitative portion of the estimate under the incurred loss method. Financial institutions adjusted the qualitative portion of the allowance in an effort to ensure sufficient reserves. As financial institutions transitioned to CECL, a central question among them was how the use of Q factors under the new standard would compare with existing practices. Another common question from institutions was what percentage of quantitative vs. qualitative components would be expected by auditors and examiners. Outside CECL experts weigh in on the topics. Understand the Quantitative Analysis While there’s no universal answer to either question because banks and their loan portfolios and loss experiences can differ so much from each other, CECL experts agree that the first step to applying Q factors under CECL is a solid understanding of the quantitative side of your financial institution’s CECL calculation. After all, said Garver Moore, Abrigo’s vice president of strategy, “The purpose of the qualitative factors is to address what’s not in the losses expected from the quantitative baseline analysis.” Graham Dyer, chief accountant and accounting principles partner at Grant Thornton LLP, has said those involved in the allowance should consider three questions as it relates to Q factors: 1. What is not captured by the model that requires you to make this adjustment? 2. Is the adjustment directionally consistent? 3. Is the adjustment quantitatively appropriate? Justify the Need for Qualitative Adjustments “Tell me what is not in that model — why you need an adjustment in the first place,” Dyer said. “Some methodologies necessitate the use of more Q factors than others,” said Regan Camp, vice president at Abrigo. “It really depends on the type of methodology you’re leveraging.” The COVID-19 pandemic illustrates this. Quantitative models incorporating loss-rate forecasts based on unemployment estimates were complicated by the impact of government stimulus payments and other factors. Documenting the reasoning behind adjustments tied to qualitative factors is important. “We continue to see clients making adjustments for things that we say, ‘Can you show me why that’s not captured by your model?’ And it’s not something they’ve considered,” Dyer said. Building that logic into the process of estimating the allowance is important. Colorado Banker 6
Support for the Direction and Amount Whether the adjustment is up or down also needs to make sense, as does the amount of the adjustment. “This last issue can sometimes be difficult for financial institutions to address,” Dyer said. “Sometimes it’s helpful to have quantitative methods to try to put boundaries around those things as much as possible,” he said. “You at least have to tell me not just why I adjusted but why I made it this much.” Experts also suggest scratching the numerical Q factor adjustments an institution used under the incurred loss model. “Some financial institutions might say, ‘Here are my Q factor adjustments. Do I keep that and start from there?’” said Gordon Dobner, partner in BKD’s National Financial Services Group at ThinkBIG. But Dobner cautioned against a mindset of, “In incurred, I had 75 basis points. So that’s my starting point.” Dyer agreed. CECL is a “wholly different approach” than the incurred loss methodology. He said, “I can’t see why you wouldn’t start from a pretty blank sheet of paper.” A Framework for Q Factor Adjustments A qualitative scorecard for the allowance provides a framework that enables the financial institution’s management team to determine reasonable and supportable Q factor adjustments to the quantitative baseline estimate. The scorecard is a reliable and consistent mechanism that can be backtested against subsequent performance, too. Here’s how scorecard development works: 1. Review the quantitative model(s)/methodology that will be used to calculate the baseline loss estimate. 2. Identify quantitative metrics that assist in framing various risk scenarios, from minor to major. 3. Leverage peer analysis against historical loss experience to determine a high- and low-mark estimation framework. 4. Identify appropriate scorecard frameworks for specific circumstances and institution preferences. 5. Create a qualitative scorecard for each allowance pool based on the broadly or uniquely identified selections (or a combination of both). Currently, many institutions use the same Q factor for the entire portfolio, but under CECL, qualitative adjustments may differ on a pool-by-pool basis. “Depending on the nature of the asset, not all of the factors may be relevant and other factors also may be relevant and should be considered,” according to a 2019 Frequently Asked Questions (FAQs) on CECL by regulators. A qualitative adjustment scorecard can simplify the quarterly process of developing and documenting Q factors, especially if the scorecard can be interconnected with the financial institution’s CECL model. “To assess a Q factor, you have to know what’s in the quantitative model and the limitations of it,” said Moore. “A qualitative scorecard, therefore, should ensure that the qualitative aspects are not ignorant of the quantitative aspects. They should ‘talk’ to each other.” This is also an advantage of the scorecard when it comes to financial reporting from period to period. As credit losses associated with Q factors are recognized and the quantitative portion of the allowance is updated, the concomitant qualitative factor adjustments drop off the scorecard. Conclusion Adjustments to allowance estimates for qualitative factors didn’t go away under CECL. And while it’s impossible to provide a blanket assessment of how every institution’s Q factor adjustments will compare to those under the incurred-loss method, it’s a certainty that auditors and regulators will remain focused on understanding the reasoning behind adjustments, as well as how the adjustments were determined. Using a qualitative scorecard can make this process easier and more consistent for financial institutions. Mary Ellen Biery is senior strategist & content manager at Abrigo, where she works with advisors and other experts to develop whitepapers, original research and other resources that help financial institutions drive growth and manage risk. 7 Colorado Banker
T SBA 504 Project Example SBA 504 FINANCING STRUCTURE % $ Bank’s Conventional Loan 50% $1,250,000 Net SBA 504 Loan Proceeds 40% $1,000,000 Borrower’s Equity 10% $250,000 Total Project Costs 100% $2,500,000 DEBT SERVICE: BANK LOAN Bank’s Conventional Loan $1,250,000 Amortization (in months — estimated) 300 Interest Rate (estimated) 7.300% Monthly Payment (estimated) $9,075.39 DEBT SERVICE: SBA 504 LOAN SBA 504 Gross Debenture Amount $1,027,000 Term/Amortization (in months) 300 Effective Interest Rate (July 2024) 6.206% Monthly Payment (estimated) $6,746.90 TOTAL DEBT SERVICE: BANK + SBA LOAN Bank’s Conventional Loan $9,075.39 SBA 504 Loan (2nd Deed of Trust) $6,746.90 Combined Monthly Payment $15,822.29 Combined Interest Rate (estimated) 6.807% How the SBA 504 Loan Can Help Your Bank Compete on Interest Rates By Jessica Stutz, Lending Director, B:Side Capital There are many advantages to the SBA 504 loan program that can provide you with a competitive advantage and provide the best financing for your small business client. The SBA 504 loan program combines financing from a bank or other financial institution with financing from the SBA to allow for up to 90% financing on commercial real estate. The real estate must be 51% or more occupied by a small business operating company that is the borrower or guarantor on the loan. Key benefits include lower effective interest rates, long-term financing and fully fixed interest rates, with July 2024 rates as low as 6.206%. This program can help offer small business clients a lower effective interest rate compared to conventional or SBA 7(a) rates, particularly useful in a competitive financing environment. Lower Effective Interest Rates • Many borrowers are rate sensitive as rates have increased from 2020 and 2021 levels. • In addition, for many owner-occupied commercial real estate financing requests, there can be several financial institutions competing for the same deal. • Using the 504 loan program may help you offer the small business client a lower effective interest rate than your institution’s conventional or SBA 7(a) rates would allow for. For example, let’s say your institution can offer an interest rate of 7.30% for owner occupied commercial real estate. Considering a property purchase price of $2,500,000, your loan to the borrower would be $1,250,000 at 7.30%. The SBA 504 loan would be $1,000,000, assuming 10% equity of $250,000. After SBA fees, the gross SBA 504 loan will be $1,027,000. If you use the SBA 504 loan program, you can offer the client an overall effective interest rate of 6.807%. Colorado Banker 8
Reliable expertise. We have extensive experience and technical expertise in the financial institutions industry. Our professionals are prepared to help you address any challenge and leverage every opportunity. Ryan Abdoo, partner ryan.abdoo@plantemoran.com Scott Petree, partner scott.petree@plantemoran.com plantemoran.com Fixed Interest Rate • The 504 portion of financing has a fixed interest rate for the entire, fully amortizing term. • The interest rate never changes on the 504 portion. • This fixed rate provides payment certainty for the small business owner. Longer Repayment Terms • The 504 loan program can offer a loan term up to 25 years. A 20-year or 10-year SBA 504 loan are other options. • The bank portion of the financing typically has an amortization matching the 504 term/amortization, but can have a term as short as 10 years. • Longer repayment terms mean lower monthly payments, which can improve cash flow and reduce the overall cost of borrowing. By spreading the loan payments over a more extended period, the effective interest rate becomes lower, easing the financial burden on small business owners. Want to compare if the SBA 504 or 7(a) loan is the best fit for your borrower? Check out our recent B:Side University Session at www.bsidecapital.org/training-resources. Jessica Stutz is the lending director at B:Side Capital, a Denver-based, mission-driven organization dedicated to the success of small businesses, leveraging decades of experience, expertise and a commitment to excellence. Her daily joy is working with an amazing team of SBA experts who provide access to SBA capital. B:Side Capital provides SBA 504 and direct loans to small businesses in Colorado, Utah, New Mexico and Arizona, as well lender support to SBA 7(a) lenders nationwide. 9 Colorado Banker
A How a DEI Focus Can Support Affirmative Action Compliance By Julia Paris, Esq., Director, Specialized Consulting Services, Employers Council Among the regulations and compliance requirements imposed on the banking industry, there is one that may fall below the radar: Affirmative Action (AA). As stated by the Office of Federal Contract Compliance Programs (OFCCP), “Financial institutions with federal share and deposit insurance are considered to be government contractors” and required to comply with Affirmative Action. A quick review of AA may be helpful. Created by Executive Order 11246 in 1973, AA is intended to “ensure equal employment opportunities for applicants and employees” and combat employment discrimination based on protected class (age, disability, gender, race, religion, sex, etc.); amended in 1974 by VEVRAA to include veterans and active military personnel, AA is housed within the U.S. Department of Labor with compliance administered by the OFCCP. AA compliance requires a written affirmative action plan (AAP) to address the flow of applicants and employees through an organization’s processes from recruiting to hiring, selection for advancement, pay practices and termination. Extensive tracking and annual reporting must be completed, driven by statistical analyses of internal staffing and comparisons with external community demographics. Employers must review their data to identify statistical gaps and discrepancies, then devise and implement strategies to address them. Non‑compliance may lead to invasive audits and monitoring. The ultimate objective of AA is to eliminate barriers to equal opportunity in workplaces with statistically meaningful reflection of community demographics in workplace participation. So, what does DEI (diversity, equity, inclusion) strategy have to do with AA? To be clear, DEI is not currently mandated by law and is not the same as AA compliance. Unlike AA, DEI does not define specific classes of people and is intended to provide universal benefits. Recently, DEI has been critiqued as politically motivated or socially correct; when done properly it can instead be a powerful, human-focused business strategy. At Employers Council, we believe employers can incorporate DEI in their business strategy to obtain improved results by attracting, engaging and retaining people with the skills, abilities and potential needed to implement business strategies and achieve desired results. Banks may wish to consider a broader approach to the challenges of AA compliance with strategies that also improve overall business outcomes. Voluntary efforts to enhance workplace diversity, equity and inclusion offer opportunities to simultaneously leverage the impact of efforts designed to address AA requirements. Importantly, unlike AA, improved business results are the measure of success of any DEI efforts. An underlying concept of DEI is that every human being is unique, has potential to contribute, and can flourish when offered opportunities that match their strengths along with consistent employer support. DEI challenges employers to look beyond “business as usual” tactics to identify talent that may be overlooked due to presumptions, biases, stereotypes, process inertia and lack of imagination. Employers with a DEI focus can tap into a wider pool of talent and expand the capabilities of their workforce. Historically, for example, neurodiverse people have not fared well in standard employment hiring practices; they often lack social skills that are deemed of value by traditional applicant Colorado Banker 10
WE MAKE IT EASY LET OUR TEAM HELP YOU SECURE THE DEAL AND LOWER YOUR RISK • UP TO 90% OVERALL FINANCING • UP TO 25 YEAR TERM • FIXED-RATE PREFERREDLENDINGPARTNERS.COM | 303.861.4100 Leveraged financing and refinancing of owner occupied real estate and long-term equipment. Most for-profit small businesses eligible. SBA defines businesses with net profit after tax <$5.0 Million and tangible net worth <$15.0 Million as small. screening criteria. As such, they have frequently been passed over for hiring and promotion and suffered high unemployment. With an eye on emerging business needs, and labor shortages, some employers have chosen to focus on the skills needed to successfully complete job tasks and have revised age‑old recruiting and hiring practices to allow for neurodiverse applicants. A research study by the High Lantern Group shows that results for many employers have been outstanding. Attributes that were previously considered liabilities (e.g. hyper-focus on one task as opposed to multi-tasking, lack of awareness for interpersonal social cues, etc.), often enable neurodiverse people to more effectively complete repetitive job tasks versus previous traditional hires, and employers enjoy improved outcomes. An employer who focuses on the skills and attributes that truly matter to achieve business results, and changes attitudes and processes that hinder employee success, is acting with a DEI focus. This can also drive results for an AA strategy; when a broader pool of people is invited to contribute and supported to be successful in the workplace, advancement opportunities open to a more diverse pool. Employees who feel supported and respected by an inclusive workplace are more likely to enhance their participation and contribute voluntary effort in the workplace. Employers prize voluntary effort to meet business results and often complain when this is absent — many employees may do just the bare minimum to complete their job tasks. These efforts impact employer reputation, as well; and in the world of social media and corporate transparency, this has meaningful impact. Employers who cultivate a reputation as an inclusive, respectful workplace for all people, regardless of background, are more likely to attract more diverse applicants for vacant jobs. This DEI outcome supports AA compliance; although AA compliance does not require employers to address community reputation, an employer with the reputation of intolerance for employees with diverse needs is less likely to attract diverse applicants and retain a diverse candidate pool of employees to promote that supports AA objectives. Put simply, employers with a DEI focus on their internal activities and workplace culture, drafted to achieve business objectives, can effectively reinforce efforts to achieve AA objectives. In our work at Employers Council, our teams of professionals assist banking and financial institutions navigate the complexities and opportunities of both DEI business strategy development and AA compliance. Employers Council has been a trusted and cost-effective partner for organizations since 1939. We specialize in DEI initiatives, affirmative action compliance and comprehensive HR consulting and employment law services. Our dedicated team of attorneys and HR consultants proudly supports over 4,000 employers. For more information on how we can assist your organization, visit www.employerscouncil.org or call (800) 884-1328. BUILD YOUR BRAND, CONTACT US TODAY! (855) 747-4003 sales@thenewslinkgroup.com 11 Colorado Banker
How did you get started in the banking industry? I started my career in the non-profit industry out of college. After having the opportunity to interview for my position at ANB Bank, I recognized the commitment to the community, the passion to develop employees and a culture that blew me away. I was honored to be offered the position and accepted, and I genuinely believe it was the best decision I have made for my family and my future. What do you like to do to give back to the community? I sit on the Colorado Fallen Hero Foundation and North Metro Community Services board of directors. Additionally, I have found so much enjoyment and passion in working with the Colorado Bankers Association and seeing the impact that the CBA has on communities all across Colorado. As a Colorado native, these roles allow me to contribute to causes close to my heart while supporting the well-being and growth of the community that has shaped me. What is the most rewarding aspect of your job? The most rewarding aspect of my job is the opportunity to positively impact the employees and the organization. I strive to foster a positive work environment, help employees grow and develop their careers, and ensure that all voices are heard and valued. By aligning HR strategies with business goals, I feel like I contribute to the overall success and future of the company and its people. When you were a child, what did you want to be when you grew up? When I was younger, I aspired to become a politician and even dreamed of becoming the president of the United States. However, things changed quickly after graduating from college, getting married and being blessed with my two sons. Nonetheless, I still hold on to the hope that one day, I might have the opportunity to run for public office. What is your favorite movie or book, and why? “Harry Potter” is my favorite movie series of all time. The movies offer an escape into a world filled with adventure, friendship and timeless life lessons. The themes of courage, loyalty and the battle between good and evil resonate in the real world. I only hope my young kids will have the same crazy passion for Hogwarts and wizards that I do. Spencer Davis Human Resources Officer/First Assistant VP ANB Bank CBA Centerpoint How did you get started in the banking industry? I found myself in banking in a roundabout way but also in a way that speaks to community banking. Prior to joining Alpine Bank, I worked at a golf course in the mountains, and one of our customers was a loan officer with Alpine Bank who helped us transition bank accounts to Alpine. Along the way, he mentioned that if I ever considered a career change to look him up. At about the time my wife and I had our first baby, I was looking for a change. He and I connected, and he subsequently connected me with Alpine Bank’s ops supervisor for the region, and the rest is history. Certainly a non-traditional route for me. What do you like to do to give back to the community? I think the most valuable thing I can offer to the community I serve is my time. I currently serve on five boards in the Colorado Springs community, and I love each of them: Downtown Partnership, the Cultural Office of the Pikes Peak Region, Pikes Peak Hospice and Palliative Care, Police Foundation of Colorado Springs and the Pikes Peak United Way. They each expose me to different areas of the community and stretch me in my service and perspective. What is the most important thing you’ve learned from a career in banking? As one who has a degree in psychology (rather than in finance), I ascribe to what Bank President Glen Jammaron continually reminds us: “Banking is just people dealing with people.” The moment I put my focus on something other than people — whether my staff, our customers or the community — I am missing the mark. The world of banking is hard enough; focusing on people and meeting them where they are will do more to change lives than any banking product can. What is your favorite movie or book? “A Tale of Two Cities.” Just a phenomenal period piece, set during one of the most turbulent times in recent history, examining the human condition to the core. But I could just as easily have mentioned “Les Misérables” or “Anna Karenina” or “Crime and Punishment” — all favorites. Matthew Hanson Market President Alpine Bank Do you know a deserving Colorado bank employee we should feature? Contact Patricia Wells at patricia@ColoradoBankers.org. Colorado Banker 12
How did you get started in the banking industry? In search of a flexible position that would accommodate my schedule while my daughter attended kindergarten, I learned through my neighbor about an opening for a part-time teller at her bank. Initially, I viewed it as a respectable stopgap job, yet to my surprise, I became quite passionate about it! The banking sector was a field I had never previously considered, but once onboard, it became apparent that this was the career path for me. What makes your bank unique? The distinct culture of Bank of Colorado sets us apart. We blend the community-oriented values of a small-town bank with the capabilities to deliver services comparable to the largest financial institutions. Our personal touch includes answering our own phones and welcoming customers by name, placing the importance of relationships above profit margins. What is the most rewarding aspect of your job? The most fulfilling part of my work is having a positive impact on my colleagues. In my role as assistant cashier/project officer, I contribute to the efficient functioning of our bank and support our 700 team members. Working with a group of skilled and remarkable individuals is a privilege, and I take pride in the confidence placed in me to create and apply process enhancements, help us enter new markets and collectively provide top-notch services to our clientele. What is your favorite movie or book, and why? I’m an avid fiction reader, especially the works of Stephen King. “The Girl Who Loved Tom Gordon” isn’t one of his most famous stories, but the way he portrays the protagonist immerses you immediately into her world. It’s a compelling exploration of the human mind and the complex path it navigates when faced with adversity. It’s a short novel, making for a quick read, and I wholeheartedly recommend it to anyone who enjoys fiction. What do you listen to on your morning commute? Listening to music while driving is my happy place. My musical preferences vary daily, but as a big fan of Blink 182, chances are you’ll catch me belting out the lyrics to “The Rock Show” when I’m on the road. It’s an excellent way to kick off the day! Susie Stokes VP — Assistant Cashier/Project Officer Bank of Colorado GOING BEYOND THE DESK TO HEAR THE STORIES OF COLORADO BANKERS How did you get started in the banking industry? Growing up in Nebraska as the daughter of a community banker, I was naturally drawn to the field. During college, I held a communications and marketing internship at the Nebraska Bankers Association (NBA) from 2014-2016. When I graduated from Nebraska Wesleyan University, I joined the NBA full-time in their Education Department from 2017-2019. In May 2019, I transitioned to a role at the Graduate School of Banking at Colorado (GSBC), moving to the Denver area to embrace this exciting new opportunity. I recently celebrated my five-year anniversary at GSBC, a place that has absolutely transformed me personally and professionally. I’ve learned that there are numerous unconventional paths into the banking industry that allow one to make significant contributions both locally and nationally, even without being a banker — and I am fortunate to have found those opportunities! What is the most rewarding aspect of your job? The most rewarding part of my job is getting to know GSBC’s students, learning about their backgrounds, personalities and even their families. Our students spend considerable time with us in Colorado, and building these relationships is essential for the success of the educational programs we offer. Another key aspect of my role is facilitating connections among our students. Witnessing the friendships and professional networks that form among them brings me immense joy. What is the most important thing you’ve learned from a career in banking? The most important lesson I’ve learned is the significance of being future-oriented, seeking out opportunities for connection and fostering innovative cultures within the banking industry. The banking industry has demonstrated its resilience, underscoring the strength of the community aspect within it. Throughout my career, I’ve had exposure to some of the brightest minds in banking, and my confidence in the innovative potential of banks has never been stronger. What do you listen to on your morning commute? Shameless plug: I tune in to GSBC’s Bolder Banking Podcast! I genuinely enjoy listening to the latest episodes during my commute. Many episodes feature our alumni and students, and I love hearing their insights and passions. I highly recommend giving it a listen! Blair Suddarth Marketing Manager Graduate School of Banking at Colorado 13 Colorado Banker
I Dominating Share of Voice in the Digital World trust and credibility in the marketplace. Consumer behavior in the banking industry is heavily influenced by the amount of trust a consumer has with their bank. According to the Federal Reserve’s report on the Economic Well-Being of U.S. Households, 13.2% of unbanked households forego having a bank account due to a lack of trust in banks. Awareness of this lack of trust provides an excellent opportunity for financial institutions to build trust and credibility among potential customers through an increased share of voice. Competitive Benchmarking Understanding your position within the market allows you to tailor your strategies effectively, ensuring you stay ahead of the competition. This is crucial for financial institutions where competition is fierce, and differentiation is key. Informed Strategic Decision Making Data-driven insights from your SOV can inform marketing strategies and budget allocation, ensuring resources are used efficiently to maximize reach and influence. This strategic advantage is essential for making informed decisions that align with your institution’s goals. In today’s crowded digital marketplace, simply being online is no longer enough. For financial institutions, visibility is paramount to standing out in a competitive field. The key to this visibility lies in mastering share of voice (SOV), a crucial metric that can separate thriving banks and financial services from those slipping into obscurity. Creating seamless user experiences and providing exceptional customer service by incorporating digital tools can help you solve your customers’ problems. According to a survey by the American Bankers Association, 79% of consumers agree that digital innovations and bank improvements are making it easier for all Americans to access financial services. Explore how increased visibility and enhanced customer service through a strong digital presence can help your financial institution thrive in today’s digital era. What is Share of Voice? Share of voice (SOV) gauges how often and prominently your financial institution appears in search results compared to your competitors. It covers organic and paid search visibility, providing a holistic view of your brand’s online prominence. A higher SOV means more frequent appearances in search results, translating to greater brand awareness, increased traffic and more conversions. Why Aim for a High Share of Voice? Building Trust and Credibility For financial institutions, increased visibility leads to greater awareness and recognition among potential clients, fostering A GUIDE FOR FINANCIAL INSTITUTIONS By Adam Lee, President, Techint Labs Colorado Banker 14
Conducting Comprehensive Keyword Research Keyword research is the backbone of increasing your search marketing SOV. You can optimize your content to rank higher in search results and capture more traffic by identifying and targeting high-volume, relevant keywords. For financial institutions, this means targeting keywords that resonate with your audience’s needs and concerns. Use the following tools for keyword research: • Google Keyword Planner. This tool is ideal for discovering new keyword opportunities and understanding search volume trends. • Ahrefs. This provides in-depth competitor analysis and keyword difficulty scores. • SEMrush. This offers comprehensive keyword research and competitive insights. Types of Keywords • High-competition keywords. Broad, high-reward keywords that attract significant search traffic but require substantial resources to rank for. These could include “best mortgage rates” or “top investment banks.” • Long-tail keywords. More specific, less competitive keywords that drive highly targeted traffic and result in higher conversion rates. Examples include “small business loans for startups” or “how to open a Roth IRA.” Optimizing On-Page and Off-Page SEO A robust search engine optimization (SEO) strategy encompasses both on-page and off-page techniques to elevate your website’s visibility and authority. On-Page SEO Incorporate targeted keywords into titles, headers, meta descriptions and content to ensure search engines understand the focus of your pages. Technical SEO aspects, such as site architecture, URL structure and schema markup, also play a crucial role. Creating high-quality, engaging content and providing an excellent user experience is essential for on‑page success. • Content relevance. Ensure your content addresses your audience’s specific financial needs and questions. For instance, articles on managing personal finances, investment strategies or understanding credit scores can attract a targeted audience. • Technical SEO. Ensure your website is technically sound with fast load times, mobile optimization and secure connections (HTTPS). Off-Page SEO Obtaining quality backlinks from authoritative sites, building your brand’s presence through online mentions, and engaging on social media all boost your visibility and drive traffic. Content marketing strategies, such as guest blogging and press releases, further enhance your efforts by distributing valuable content to a broader audience. • Backlink strategy. Partner with reputable financial news sites and industry blogs to gain authoritative backlinks. • Social media engagement. Actively engage with your audience on platforms like LinkedIn and Twitter, sharing insights and updates reinforcing your institution’s expertise. Implementing a Robust Search Engine Marketing Strategy Paid search engine marketing (SEM) is critical for increasing SOV, particularly in competitive markets. Platforms like Google Ads enable you to bid on keywords and display advertisements to users actively searching for your financial products or services. Compelling Advertising Copy and Keyword Usage • Keyword selection. Identify and bid on highly relevant keywords that your target audience is searching for, such as “home loan calculator” or “wealth management services.” • Compelling advertising copy. Craft engaging advertisements highlighting your unique value propositions, such as low interest rates, personalized financial planning or innovative banking solutions. • Optimizing bids. Ensure your advertisements appear in prominent positions without overspending by continuously monitoring and adjusting your bids based on performance data. Competitive Conquesting Bidding on competitor search terms can be an effective strategy to capture market share. Start by identifying your competitors and the keywords they rank for. Tools like Google Ads Keyword Planner, SEMrush and Ahrefs can help gather data on competitors’ keywords, ad copy and bidding strategies. Analyze competitors’ strengths and weaknesses to identify opportunities for differentiation, then develop targeted ad copy highlighting your unique offerings. Example Strategy: If a competitor is known for their high‑yield savings accounts, emphasize your institution’s superior customer service or innovative mobile banking features in your advertising campaigns. 15 Colorado Banker
Continually Measure and Adapt Your Strategies The digital marketplace is ever-changing, and maintaining a dominant share of voice requires ongoing measurement and adaptation. Key metrics to monitor include organic traffic, paid traffic, keyword rankings and engagement metrics. Taking the following actions will amplify where your share of voice stands, enhancing your online presence. Key Actions: • Regular monitoring. Consistently track your performance metrics to identify trends and areas needing improvement. • Engagement metrics. Pay attention to how users interact with your content; high engagement rates indicate strong content relevance and quality. • Social media activity. Stay active on social media to boost your share of voice and engage with your audience. Use platforms like LinkedIn for professional networking and Twitter for timely updates and customer engagement. • Key performance indicator (KPI) reviews. Regularly review key performance indicators to identify areas for improvement and adjust strategies accordingly. Keeping up with search engine guidelines and industry best practices ensures your strategies remain effective while experimenting with new tactics, allowing you to continually refine your approaches based on performance data and market trends. By staying vigilant and adaptable, your financial institution can maintain and grow its share of voice, ensuring your brand remains competitive and visible in the dynamic digital landscape. For more detailed strategies and insights on dominating your share of voice, download a free comprehensive whitepaper from the media center on techintlabs.com. Adam Lee’s career centers on creating, building, operating and leading highly successful media organizations. He helped launch Techint Labs to create a conversion-focused media agency that helps brands utilize emerging advertising technology to earn attributable results. Before Techint Labs, he led digital strategy for national clients at Digital First Media, the United States’ second-largest newspaper publisher. Learn how budgeting for top-tier support and guidance can save your program money. That’s Bankers Alliance. info@bankersalliance.org or (833) 683-0701. Holding Company of Compliance Alliance and Review Alliance Your time is valuable. You deserve an audit firm that provides your team with timely reviews and final reports within 45 days. C M Y CM MY CY CMY K Colorado Banker 16
T Managing Liquidity in an Uncertain Rate Environment By H.D. Barkett, Senior Managing Director, Treasury Desk, IntraFi There’s little certainty in the current economic environment. As the Federal Reserve works to strike a delicate balance to tame inflation without stagnating growth, central bankers have repeatedly remarked on the murky future for rates. At the same time, fintechs and other nonbank entities are offering high yields to digitally savvy consumers who can find attractive rates directly through their smartphones. Per a Q1 2024 survey from IntraFi, 67% of bankers reported worsening deposit competition over the past 12 months, with nearly half expecting that trend to continue for the next year. With elevated customer demand for safe cash investments, increased competition for deposits and potential rate cuts on the horizon, banks are strategizing carefully to maintain competitiveness while minimizing risk exposure when it comes to savings rates. Committing to high-interest deposit accounts now could result in significant financial strain if market rates decline — adversely impacting a bank’s profitability and liquidity management. One solution to this problem: a deposit placement service that offers an option to sell deposits to participating network members. Selling deposits via a service can help banks to manage liquidity effectively, satisfy customer demand for higher rates and safeguard their financial stability. What Is a Deposit Placement Service? A deposit placement service enables participating financial institutions to place their customers’ funds in deposit accounts at other participating depository institutions in increments under $250,000 to provide access to an amount of aggregate FDIC insurance greater than the per depository institution limit. The depositor maintains access to its funds through the same bank it already uses. A bank using a deposit placement service may be able to choose to exchange, buy or sell deposits to manage its liquidity — without affecting the customer relationship. How Selling Through a Deposit Placement Service Works Some deposit placement services offer the option for financial institutions, including banks and brokerage firms, to sell funds to other network member banks in exchange for fee income. For banks, the ability to move deposits off balance sheet while retaining the customer relationship can dramatically improve liquidity management. Benefits include: • Balance Sheet Management: For example, a bank can sell higher-interest deposits and instead seek shorter‑term wholesale funding. This allows a bank to remain agile, adjusting its strategy as interest rates fluctuate and reducing the burden high-interest deposits put on the balance sheet. • Create Attractive Deposit Options: A bank can still accommodate customers seeking higher rates. And the bank can offer access to millions in aggregate FDIC insurance across network banks. • Generate Fee Income: This additional revenue stream can enhance the bank’s financial performance without increasing the cost of funds. Practical Applications Consider a bank that has attracted a significant number of depositors with 5%+ rates for longer-term CDs. By utilizing the option to sell deposits to other network members, the bank can continue to offer these attractive rates to customers. The bank sets the interest rate, and customers benefit from access to FDIC insurance beyond the standard limit and consistent service from the bank they trust. Meanwhile, the bank sells these deposits off its balance sheet, mitigating the risk of being locked into high rates if the market rates decline. Colorado Banker 18
What Bankers Say Here is how some community bankers describe their experience using deposit placement services, which offer the ability for network members to sell deposits for fee income: • A Minnesota community banker: “As other institutions started to become more aggressive in raising deposit rates, deposit services made it easy to accommodate rate-sensitive customers on a case-by-case basis without cannibalizing our other deposits.” • A Texas community banker with an influx of liquidity: “Taking that money off our balance sheet has been a godsend. Our capital ratio went back up, and all the little things that the Fed examiners look at improved.” A Strategic Approach to Funding By using a deposit placement service to sell deposits, a bank can adopt a barbell approach to funding — fine-tuning the distribution of risk across its liabilities. For example, an institution can keep on balance sheet the amount of short‑term network deposits, which reprice efficiently and can be adjusted as rates change — while selling off higher rate, longer‑term deposits. Build and Maintain Strong Customer Relationships In an uncertain rate environment, effective liquidity management is essential. Having the ability to sell deposits through a deposit placement service enables banks to offer competitive long-term rates to customers and help manage their cost of funds or risk exposure. An essential feature of any robust deposit placement service is the ability to sell deposits to network members. This empowers banks to accept large-deposit customer relationships they might have otherwise declined due to concentration risk or balance sheet concerns. By saying “yes” to these valuable, franchise-building customers, banks can strengthen customer relationships and increase customer loyalty. Embracing innovative deposit placement solutions not only addresses immediate liquidity concerns, but also positions banks for long-term success. With rate changes potentially on the horizon, the ability to adjust funding strategies swiftly and efficiently becomes a significant competitive advantage, helping banks to meet customer demands and offering another tool banks can use to maintain financial stability in any rate environment. IntraFi® is a trusted partner chosen by more than 3,000 financial institutions nationwide. IntraFi’s network — the largest of its kind — brings scale, giving each participant access to tens of billions of dollars in funding, the highest per-depositor and per-bank capacity, and the peace of mind of being able to make large-dollar placements. Learn more at www.intrafi.com. H.D. Barkett is senior managing director, treasury desk at IntraFi. Mr. Barkett has been involved in banking and financial services for the last 25 years, working with financial institutions on issues involving asset/liability management, liquidity management, risk assessment and management and portfolio hedging. Formerly, he served five years as vice president of sales and marketing and director of New Initiatives with the Federal Home Loan Bank of Des Moines. 19 Colorado Banker
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