NOVEMBER/DECEMBER BUILDING ON THE PAST, BANKING ON THE FUTURE. A PUBLICATION OF THE INDEPENDENT COMMUNITY BANKERS OF COLORADO ICBC 51ST ANNUAL CONVENTION RECAP It Wasn't Our First Rodeo. But It May Have Been Our Best! HAPPY NEW YEAR!
©2024 The Independent Community Bankers of Colorado (ICBC) | The newsLINK Group LLC. All rights reserved. The Independent Report is published six times per year. The information contained is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of the ICBC, its board of directors or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service. ICBC encourages a first-print policy, and every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at (855) 747-4003. 6732 W. Coal Mine Ave., #640 • Littleton, CO 80123 • (303) 832-2000 2024-2025 OFFICERS ICBC CHAIRMAN Tom Ogaard President & CEO Native American Bank ICBC PRESIDENT Mike Hurst President Del Norte Bank ICBC PRESIDENT-ELECT Joe Martinez President & CLO San Luis Valley Federal Bank ICBC ICBA STATE DIRECTOR PJ Wharton President & CEO Yampa Valley Bank ICBC STAFF EXECUTIVE DIRECTOR Mike Van Norstrand mvannorstrand@icbcolo.org ADMINISTRATION DIRECTOR/ TREASURER Maelynn Lewis mlewis@icbcolo.org LEGAL COUNSEL Christian Otteson Partner Otteson Shapiro LLP LOBBYIST Mary Marchun Founding Partner The Capstone Group 2024-2025 DISTRICT DIRECTORS DISTRICT A Dan Ebert, Vice President, Evergreen National Bank Mark Sheeley, President/CEO, RNB State Bank/Front Range State Bank Robert Holt, Senior Vice President, North Valley Bank Jeff Walker, Senior Vice President & CCO, Redstone Bank DISTRICT B Mark Brase, President, Points West Community Bank Tim Croissant, Market President, Bank of Colorado Travis Goeglein, Senior Vice President, First FarmBank Scott Applegate, President and CEO, Bank of Estes Park DISTRICT C Ben Johnson, President, First National Bank Colorado Sean Lening, President, GN Bank Miles McClure, CEO, Rocky Mountain Bank & Trust Kathryn Perry, Senior Vice President, Park State Bank & Trust DISTRICT D Wade Gebhardt, Corporate President, Mountain Valley Bank John Stelzriede, Market President — Colorado River Region, Alpine Bank Jeris Romeo, Community Bank President — Avon & Eagle, ANB Bank Chad Zummach, Executive Vice President, Gunnison Bank & Trust ICBC ADVISORY BOARD MEMBERS Eric Budreau Partner Eide Bailly Jim Hall Managing Director Bond & Specialty Insurance — Financial Institutions, Travelers Bill Mitchell President & CEO Bankers’ Bank of the West Christian Otteson Partner Otteson Shapiro LLP 2 | INDEPENDENT REPORT
26 CONTENTS 12 16 CONNECT Like us on Facebook ICBColo Connect with us ICBColo Follow us on X ICBColo Give us a call (303) 832-2000 Follow us on Instagram ICBColo PUB. 3 2024 ISSUE 6 4 Support the ICBC’s Associate Members! FLOURISH 6 Communication Is Key To Mitigating Fraud By Rebeca Romero Rainey, President and CEO, ICBA 7 ICBC Preferred Providers ASSOCIATE MEMBER SPOTLIGHT 8 Getting to Know Alexis Simons of BHG Financial Institutional Network FROM THE TOP 10 Staffing for the Digital Future By Lucas White, ICBA Chairman, President of The Fountain Trust Company 12 ICBC 51st Annual Convention Recap It Wasn’t Our First Rodeo. But It May Have Been Our Best! 16 The Modern Banking Branch, Reimagined How Technology Is Driving Transformation and Personalization By Wendi Klein, VP Marketing, Alogent, ICBC Associate Member 18 Why SBA Loans Are a Critical Tool for Bankers in 2024 By Christopher Myers, CEO, B:Side Capital, ICBC Associate Member 20 How To Navigate Dodd-Frank’s Section 1071 By Gerald Leveritt, Director of Enterprise Solutions, FileInvite, ICBC Associate Member 22 Cybersecurity and AI What Community Banks Should Know By Steve Sanders, Chief Risk Officer and Chief Information Security Officer, CSI, ICBC Associate Member 24 FDICIA Roadmap Early Planning Is Key to a Successful Adoption By Ryan Abdoo, Joe Vloedman, and Kristin Golab, Plante Moran, ICBC Silver Associate Member 26 Resilience for Leaders Navigating Challenges with Strength and Agility By Connie West, Gallup Certified Strengths Coach and Regional Vice President, The James Paul Group, ICBC Associate Member 28 How Marketing and Promotion Are Evolving for Community Banks — Part 1 By Jennie Brady, Director of Creative Solutions, Spry, ICBC Associate Member 30 Securing Your Data Advice From an Award-Winning Cybersecurity Team By Fred Hamilton, Chief Information Security Officer, BHG Financial Institutional Network, ICBC Preferred Provider and Gold Associate Member INDEPENDENT REPORT | 3
SUPPORT THE ICBC’S ASSOCIATE MEMBERS! ACCOUNTING | COMPLIANCE CroweLLP. . . . . . . . . . . . . . . . . . ........... (303) 831‑5023 EideBaillyLLP..........................(303)770‑5700 Fortner Bayens PC . . . . . . . . . . . . . . . ......... (303) 296‑6033 Forvis Mazars . . . . . . . . . . . . . . . . . .........(303) 861‑4545 MossAdamsLLP.........................(503)471‑1277 Plante Moran** . . . . . . . . . . . . . . . . ........ (303) 740‑9400 ADVERTISING | EQUIPMENT | PRINTING | SUPPLIES Kristopher James Company . . . . . . . . . . . . . . . . . (800) 274‑9212 Spry.. .. .. .. .. .. .. .. .. .. ............. (303) 323‑4341 CAREER ADVANCEMENT Graduate School of Banking at Colorado . . . . . . . . (800) 272‑5138 CONSULTING | HUMAN RESOURCES AND MANAGEMENT | MARKETING | STRATEGIC PLANNING BankStrategiesLLC . . . . . . . . . . . . . . . . . . . . . . (303)291‑3700 (A Bankers’ Bank of the West Bancorp Inc. Subsidiary) Blendification. . . . . . . . . . . . . . . . . . . . . . . . . . .(970)274‑1723 CD Construction Consulting . . . . . . . . . . . ....... (720) 701‑2122 Expert Business Development . . . . . . . . . . . ...... (610) 771‑2121 *ICBA CRA Solutions .. .. .. .. .. .. ......... (877) 232-0859 *ICI Consulting Inc. .. .. .. .. .. .. .. ......... (316) 201‑8590 TheJamesPaulGroup . . . . . . . . . . . . . . . . . . . . (877)584‑6468 MJCPartners . . . . . . . . . . . . . . . . . .......... (213) 278‑0429 The NaviTrust Group . . . . . . . . . . . . . . ........ (801) 438-1842 Piper Sandler & Co. . . . . . . . . . . . . . . . ........ (415) 978‑5057 *S&P Global .. .. .. .. .. .. .. .. ........... (434) 951‑6948 CORRESPONDENT BANKING SERVICE *Bankers’ Bank of the West .. .. .. .. .. ....... (303) 291‑3700 BellBank.. .. .. .. .. .. .. .. .. ............. (701) 371‑3355 Citizens Bank Farmington . . . . . . . . . . . . ....... (505) 599‑0100 INTRUSTBank . . . . . . . . . . . . . . . . . ......... (800) 732‑5120 PCBB.. .. .. .. .. .. .. .. .. .. ............ (888) 399‑1930 TIB — The Independent BankersBank . . . . . . . . . . . (972) 650‑6000 CYBERSECURITY | IT CONSULTING AND SERVICES | COMPUTER PRODUCTS Alogent.............................. (719)583‑8004 Botdoc.. .. .. .. .. .. .. .. .. .. ........... (719) 960-4475 CivITas Bank Solutions . . . . . . . . . . . . . . ....... (303) 291‑3700 (A Bankers’ Bank of the West Bancorp Inc. Subsidiary) Cook Solutions Group . . . . . . . . . . . . . ........ (503) 260‑8562 Federal Protection Inc. . . . . . . . . . . . . . ....... (800) 299‑5400 FileInvite. . . . . . . . . . . . . . . . . . . ............ (719) 771-3586 *SBS CyberSecurity .. .. .. .. .. .. .. ........ (785) 594‑0503 DATA PROCESSING | EFT | ATM | CARD PROCESSING | MERCHANT SERVICES *Bankers’ Bank of the West .. .. .. .. .. ....... (303) 291‑3700 *BluePoint ATM Solutions LLC .. .. .. .. ........ (540) 335‑2848 Computer Services Inc. . . . . . . . . . . . . . . . . . . . . . (970) 212‑7104 FPSGOLD.. .. .. .. .. .. .. .. .. ............ (801) 201‑2525 *IBT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (512) 606‑1100 *ICBA Bancard / TCM Bank .. .. .. .. .. ....... (800) 242‑4770 Jack Henry & Associates . . . . . . . . . . . . . ....... (417) 235‑6652 SHAZAM.. .. .. .. .. .. .. .. .. ............ (515) 288‑2828 VisaInc... .. .. .. .. .. .. .. .. ............ (415) 238‑3682 INSURANCE | BENEFIT SERVICES Bank Compensation Consulting . . . . . . . . . . . . . . (303) 482‑1844 First Insurance Services Inc. . . . . . . . . . . . . ...... (719) 456‑2303 *ICBA Reinsurance . . . . . . . . . . . . . . . . . . . . . . . (888) 790‑6615 NFP Executive Benefits Company . . . . . . . . . ..... (469) 252‑1037 *Travelers .. .. .. .. .. .. .. .. .. .......... (720) 200‑8416 Unitas Financial Services . . . . . . . . . . . . . . . . . . . (800) 461‑9224 INVESTMENTS | FUNDING AND LENDING PARTNERS B:SideCapital.......................... (303)657‑0010 TheBakerGroup. . . . . . . . . . . . . . . . . . . . . . . . (405)415‑7200 BancAlliance . . . . . . . . . . . . . . . . . . ......... (301) 232‑5423 *BHG Financial Institutional Network*** .. .. .... (954) 263‑6399 Citizens Bank Farmington . . . . . . . . . . . . .......(505) 599‑0145 Colorado Enterprise Fund . . . . . . . . . . . . ...... (303) 860‑0242 Colorado Housing and Finance Authority . . . . . . . . (303) 297‑7329 D.A.Davidson..........................(303)764‑6000 FHLBank Topeka — Denver Office . . . . . . . . . ..... (720) 212‑9873 First Bankers’ Banc Securities Inc. (FBBS) . . . . . . .... (720) 709‑7613 Gill Capital Partners . . . . . . . . . . . . . . . . . . . . . . (303) 296‑6260 Holman Capital . . . . . . . . . . . . . . . . ......... (949) 981‑0237 *ICBA Mortgage .. .. .. .. .. .. .. .......... (800) 253‑5356 *ICBA Securities . . . . . . . . . . . . . . . . . . . . . . . . (800) 422‑6442 IntraFi Network . . . . . . . . . . . . . . . . .......... (303) 706‑9265 Northland Securities Inc. . . . . . . . . . . . . . . . . . . . (303) 801‑3380 Olsen Palmer LLC . . . . . . . . . . . . . . . ......... (202) 803‑2620 Performance Trust Capital Partners . . . . . . . . ..... (312) 521-1000 Preferred Lending Partners . . . . . . . . . . . ....... (303) 861-4100 West Gate Bank Mortgage . . . . . . . . . . . . ...... (402) 434‑4116 LEGAL SERVICES Arnold&Porter.........................(303)863‑1000 Coan, Payton & Payne LLP . . . . . . . . . . . ....... (303) 861‑8888 Godfrey Law Group LLC . . . . . . . . . . . . ........ (303) 802‑6336 Hoffman Nies Dave & Meyer LLP** . . . . . . . . ..... (303) 860‑7140 León Cosgrove Jiménez LLP . . . . . . . . . . . ....... (720) 689‑7749 LewisRocaLLP**. . . . . . . . . . . . . . . . . . . . . . . . (303)623‑9000 Markus Williams Young & Hunsicker LLC. . . . . . . . (303) 830‑0800 Otteson Shapiro LLP** (ICBC Counsel) . . . . . . .... (720) 488‑0220 Spencer Fane LLP . . . . . . . . . . . . . . . ........ (303) 839‑3838 StinsonLLP . . . . . . . . . . . . . . . . . .......... (303) 376‑8400 LOAN REVIEW SERVICES EideBaillyLLP..........................(303)770‑5700 Fortner Bayens PC . . . . . . . . . . . . . . . ......... (303) 296‑6033 ICBC LOBBYING AND PUBLIC RELATIONS The Capstone Group (ICBC Lobbyists) . . . . . . . . . . (303) 860‑0555 *ICBC Preferred Providers **Silver Associate Member ***Gold Associate Member 4 | INDEPENDENT REPORT
bbwest.com 800-873-4722 |offices in Denver and Lincoln | Member FDIC Equal Housing Lender we champion community banking Proud Legacy Sponsor of ICBC and supporter of Colorado community banks for 40+ years! Bankers’ Bank of the West • Independent loan review • Loan and credit administration consultation • Strategic planning facilitation • Management, staffing, & succession planning • Acquisition & expansion • BSA/AML compliance • Regulatory risk consultation • Consulting • Phishing Tests • Vulnerability Management • Security Monitoring Cyber/information security, strategic planning, independent loan review, AND MORE. Consulting Services • Bank Stock Loans • Loan Participations • ATM/Debit • International Services • Cash Management • Securities Safekeeping • Merchant Services $ 8.6B assets under management $ 1.9B daily transaction value processed/settled Serving more than 60% of community banks across 7 states Where community banks bank Banking Services
Cybersecurity and fraud mitigation remain significant priorities for community banks as attacks get more creative and targeted. While today’s technologies assist with anomaly detection, flagging rogue transactions and spotting those that need greater scrutiny, at the end of the day, one of the main methods of mitigating this risk is to Know Your Customer (KYC). For community banks, saying this is like preaching to the choir. Our relationship-banking model ensures that we know who we are dealing with and what constitutes “normal” for those accounts. In fact, with the surge in check fraud, I’ve heard countless stories of community banks holding up transactions because they seem out of character, only to find out that they were looking at washed checks being pushed through the system. Many of these stories have one common denominator: big banks as the bank of first deposit. Fraudsters have figured this out. They can go to a big bank — where they can be anonymous and where the detailed KYC present at the community bank level doesn’t happen — to open accounts with minimal effort. Those fraudulent transactions slide through. It’s an issue that’s playing out in check fraud and other areas, and we’re talking with the heads of agencies and Congress to ensure they understand the imbalance between big banks and community banks on KYC. Because true KYC requires the personal connection and relationship that community banks maintain — one that often gets lost in a larger institution. Yet, community banks still must deal with the rise in fraud, and increasingly, communication is the best mitigation tactic. Whether it’s bankers on our check fraud task force informing our efforts, others sharing lessons learned in ICBA Community (community.icba.org) or bankers working more closely with law enforcement, communication helps us get ahead of the fraudsters. ICBA stands ready to support those efforts. We continue to encourage community bankers to share your insights on the challenge of check fraud at checkfraud@icba.org. At the end of July, we were alerted by several members about a new form of fraud: check fraud related to home equity lines of credit. Within a day, we were able to issue a warning to community bankers and offer tips for safeguarding HELOCs. Communication is vital because knowledge is power. When we are aware of new scams or attacks, we can better protect our banks and customers. So, use ICBA as a facilitator of communication. By sharing information, we not only help one another fight back against fraud, but we can also stop fraud in its tracks for the benefit of our banks, customers and the industry at large. BY SHARING INFORMATION … WE CAN STOP FRAUD IN ITS TRACKS FOR THE BENEFIT OF OUR BANKS, CUSTOMERS AND THE INDUSTRY AT LARGE. FLOURISH Communication Is Key To Mitigating Fraud By Rebeca Romero Rainey, President and CEO, ICBA 6 | INDEPENDENT REPORT
ICBC PREFERRED PROVIDERS Contact: Scott Wintenburg | swintenburg@bbwest.com | (303) 291-3700 or (800) 601-8630 Merchant services from Bankers’ Bank of the West help you grow customer relationships with mobile payments technology, competitive unbundled pricing, efficient approvals and startups, responsive support and training. Contact: Alexis Simons | simonsa@bhg-inc.com Creator of the largest community bank loan network in the country. ICBC members can access the BHG Loan Hub, a secure, state-of-art loan delivery platform and the number-one source for professional loans. Contact: Wade Zirkle | wade@bluepointatm.com | (720) 295-9142 BluePoint provides cost-efficient, outsourced branch and off-site ATM managed services to small financial institutions across the U.S. The partnership will provide community bankers with a simplified, outsourced ATM solution built specifically for community banks to help them compete. Contact: Phil Layher | phil.layher@ibtapps.com | (512) 616-1188 IBT Apps® is an empowering core partner to community banks nationwide, offering end-to-end core and digital banking solutions that meet today’s customer demands. Their adaptable i2Suite banking system enables your bank to streamline operations, control costs and mitigate risks. Transform your bank with the power of one total solution. Contact: icba.org/solutions | (866) 843-4222 The ICBC supports and recommends the following products and services supplied by our national association, the ICBA: ICBA Bankcard and TCM Bank, N.A.; ICBA Compliance & Risk Management; ICBA Mortgage; ICBA Reinsurance; and ICBA Securities. Contact: Mike Hatch | mike.hatch@ici-consulting.com | (316) 201-8590 Since 1994, ICI Consulting has helped banks and credit unions to assess, cost justify, evaluate and convert core processing, digital banking, EFT, lending, document imaging, CRM and branch solutions. Contact: Brian Miller | brian.miller@sbscyber.com | (605) 923-8722 SBS is your cybersecurity partner. Our offerings include: TRACTM — Cybersecurity risk management software; Cyber-RISKTM — Automated FFIEC cybersecurity risk assessment software; IT and Network Security Audits; Consulting Services; Full Service Vendor Management; Role-Based Certifications; Vulnerability Assessments; Penetration Testing and more! Contact: Joe Valdez | joseph.valdez@spglobal.com | (213) 549-2281 S&P Global combines exclusive analysis and in-depth data in real time for the banking, financial services and insurance industries. From bank branch data and government assistance programs to executive compensation and league tables, S&P is the final word in business intelligence on financial institutions. Contact: Madeline Dickman | mdickman@travelers.com | (720) 200-8293 Offering a wide range of customized insurance protection, Travelers SelectOne+® for financial institutions is designed to respond to the most recent trends in banking. ICBC Preferred Providers are selected by bankers just like you, so give them special consideration when considering their proposals for your bank! To learn more about ICBC’s Preferred Providers, contact the ICBC at (303) 832-2000. Please note: ICBC endorses the listed companies but not all products offered by the company. INDEPENDENT REPORT | 7
Associate Member Spotlight Getting to Know ALEXIS SIMONS of BHG Financial Institutional Network As part of our ongoing series, we spotlight one of our associate members in each issue of the magazine. In this issue, we are getting to know Alexis Simons, VP of Institutional Relationships at BHG Financial Institutional Network. Tell us a little bit about yourself and what you do at your firm. I am newer to my position as VP of Institutional Relationships, but I’ve been at the company collectively for about seven or eight years. I worked for BHG in 2016 on the front end where we originate the loans and was there for about five years. I had a brief hiatus at a big tech company and realized the grass is much greener on this side, so I made my way back. The beauty of BHG is that we have a lot of people who come back to the company after trying something else. They realize our clients and the type of work we do here are very different. We have special relationships with our clients, many of whom have been here since day one, who still come to national events and are in touch with the same representative they had at the beginning. As VP of Institutional Relationships, I work with over 25% of community banks in Colorado ensuring they have the resources through the BHG Financial Institutional Network to diversify their loan and investment portfolios while increasing NIM. Continuously educating our bank partners on BHG’s industry-leading technology offerings, fee income opportunities and services designed to support your bank are key in how we’ve been able to partner and maintain our relationship with over 1,650 community banks since 2001. What makes your company unique? We have created a business model that works for and with our community bank partners. The great thing about BHG is not only how we interact with them, but how we work alongside them. We want to be a partner; if we succeed, they’re going to succeed. What I have found is that most places treat clients like clients. They want customers to go through a transaction and they check in when the next one is going to occur. I want to know about your family and your life. I want to know what makes your bank great so you can understand what makes us great. I want to have a personal relationship with everybody. Aside from that, we also have a unique credit scoring system that goes in-depth versus your typical surface-level credit. With the changing economy and how people are buying and selling these days, it makes sense to have a much more in-depth analysis of our community bank partners. I learned at a young age that everybody knows their community banker. Ours was named Marty. I’ve known Marty since I was a little kid. I always thought he was just my dad’s friend. Turns out he was our banker, but he became a friend. One year, he even had Thanksgiving with us. We always went to Marty because Marty happened to be our guy. And that’s how we try to operate. 8 | INDEPENDENT REPORT
Community banks are the backbone of our communities, so we want to help them thrive. What do you love about your job? I have an incredible team, most of whom have been here for 15-plus years. We also have a direct line of contact with our co-founders. I can pick up the phone any day and call Al Crawford or Eric Castro and say, “Hey, I have a question,” “I have an idea” or “I heard this from our community bankers at this conference.” They encourage it and they will not only hear it, but they’ll retain it and decide if it’s right for us. They’re also involved in educating our bankers and making sure there is direct communication with them. We hold regional and national seminars where the executive team not only talk to the bankers, but talk with the bankers, mingle and get involved in every activity. We function like a family-run company, but we are the size of a corporation. Why is being a member of ICBC important to you? It’s so different being at the ICBC conference than if I were to go to any other state. It was like being at a family or college reunion. They’ve all known us forever and everybody’s running up, hugging each other and saying hello. You can also tell that there are generational employees with ICBC. I think there were at least nine people who came over and said, “Hey, I’m retiring next week. This is the person who is taking over for me, get connected with them.” The relationship dynamic of the ICBC team and membership makes it exciting to become a part of it. Anything else you’d like to add? As I mentioned before, we have an open-door policy, and I want that to extend to me. So, if there is anyone who has questions, if there’s anyone who has anything they want to talk about, you can reach out to me at any time. To learn more about the benefits that a partnership with BHG Financial Institutional Network brings, please email Alexis at simonsa@bhg-inc.com. INDEPENDENT REPORT | 9
Digital banking is here to stay, and everything from our online banking to our mobile apps needs to speak to that customer journey. To that point, my community bank recently upgraded our mobile app to offer enhanced product features and a stronger customer experience. Before rolling it out, we had to focus on internal education. While our data center managed technical questions 10 or 20 years ago, frontline staff have become the de facto source for all answers in today’s environment. When a customer has an issue logging in or executing a transaction, they start with our frontline teams. These shifts in customer needs work their way into changes in our staffing practices. Today, we pursue more tech-savvy staff. We can’t expect someone who doesn’t have a smartphone to be able to walk a customer through their app experience. More than ever, all bank employees participate in digital operations. That translates to important action steps for the bank. For instance, we encourage our employees to use our digital banking products. Having firsthand experience with our offerings will give them a deep knowledge of these products’ inner workings. We also implemented an internal marketing campaign to get our employees excited and talking about our digital products. For instance, we created a “scavenger hunt” checklist of activities to finish in the new app, with a prize for completion. So, when employees were done, they really knew how to navigate the app — before customers came in and asked for help. We also regularly send key staff to educational training with ICBA. As the banking environment transforms into a more digital space, we want our teams to be up to speed on how the industry is evolving and what that means for the products and services we offer. In turn, we’re hiring for the future. As we staff up, we seek candidates who buy into the community bank model. We’ve found that our more successful employees believe in banking locally and keeping resources in the community. We can teach technology, but we can’t teach the passion that comes with community banking. It has to be inherent. Recruiting and retaining staff is a huge focus for us all. I know we have some of the greatest staff in the world, and I’m so appreciative of what they bring to this digital-first landscape. In that spirit of gratitude, let me also say that I’m thankful to be a member of this community, and I wish you and yours the very happiest of holidays! FROM THE TOP MY TOP 3 It’s the season of gratitude, and I am so thankful that: 1. My family is healthy. 2. I have a career that I love. 3. I was given the opportunity to be ICBA chairman. Staffing for the Digital Future By Lucas White, ICBA Chairman, President of The Fountain Trust Company WE CAN TEACH TECHNOLOGY, BUT WE CAN’T TEACH THE PASSION THAT COMES WITH COMMUNITY BANKING. IT HAS TO BE INHERENT. 10 | INDEPENDENT REPORT
A letter from the CEO of a Colorado CDFI bank. We’re a Colorado bank just like you, but CDFI too… No doubt you’ve heard about the new CRA rules soon to take effect. As a CDFI, did you know First Southwest Bank (FSWB) can help you increase your impact as a community bank and achieve your CRA compliance goals? It can be as simple as creating a deposit relationship or generating loan participations with FSWB. And, we created a technology platform, known as HelloBello (hellobelloapp.com), that makes it easy for community banks like yours to connect to FSWB…for low cost, risk-mitigating funding, and resources like technical assistance, grants and education for your clients. First Southwest Bank can help you create impactful investments, restore economic vitality in Colorado’s markets, and achieve your CRA compliance goals. I encourage you to reach out to me to learn more. Please give me a call at 970-422-5054 or send an email kent.curtis@fswb.com. Sincerely, Kent Curtis Chief Executive Officer & President First Southwest Bank kent.curtis@fswb.com 970-422-5054 ALAMOSA | CENTER | CORTEZ | DURANGO | PAGOSA SPRINGS | SAGUACHE Certified CDFI. Member FDIC. EOE. EHL. SBA Preferred Lender.
No ifs, ands or bucks about it — ICBC’s 51st Annual Convention held in September 2024 at The Hythe in Vail, Colorado, was one for the record books. And that’s no bull! A big yeehaw and hats off to those who attended, sponsored and exhibited and made this year’s celebration one of the best! Our convention was rich with professional development sessions, special events, connections, vendor offerings and a strong sense of community, spirit and pride. The opening reception on Wednesday evening provided the opportunity to wet your whistle, meet up with colleagues, vendors and get the first peek at the annual ICBC High School Scholarship Auction. The annual meeting started Thursday with the announcement of ICBC’s 2024-25 officer slate. Congratulations to: • Tom Ogaard, President and CEO, Native American Bank, ICBC Chairman • Mike Hurst, President, Del Norte Bank, ICBC President • Joe Martinez, President and CLO, San Luis Valley Federal Bank, ICBC President-Elect Enormous thank yous and fond farewells were given to the following people for their service on the board: • Randy Younger, President and CEO, First National Bank Hugo, Past Chairman • Ed Rarick, Senior Oversight Officer, High Plains Bank, District B • Lora Rose, CFO, The State Bank, District C • Andrew Trainor, Regional President, District C A warm welcome was extended to newly elected district directors: • Scott Applegate, President and CEO, Bank of Estes Park, District B • Miles McClure, CEO, Rocky Mountain Bank & Trust, District C • Ben Johnson, President, First National Bank Colorado, District C • Chad Zummach, EVP, Gunnison Bank & Trust, District D ICBC 51ST ANNUAL CONVENTION RECAP It Wasn’t Our First Rodeo. But It May Have Been Our Best! 12 | INDEPENDENT REPORT
Alice Frazier, Vice Chairman of ICBA and President and CEO of Bank of Charles Town, Charles Town, West Virginia, brought the annual meeting to a close with an industry update and an ICBA brief. Two general sessions rounded out the morning events: “Keep Your Eye on the Ball” presented by Christian Otteson, Otteson Shapiro, and Adam Keefer, Piper Sandler, and “Fintech Engagement — Why It’s Important for Community Banks” presented by Charles Potts, ICBA. During lunch, we awarded the four Graduate School of Banking at Colorado scholarship recipients: • Maranda Blake, FirstBank, Lakewood • Karena Downey, Farmers Bank, Ault • Bentley King, Alpine Bank, Basalt • Sylvia Veltri, High Country Bank, Salida These $2,000 scholarships are given annually to the four top-performing Colorado-based ICBC member bank students and are applied to their tuition for their final year at GSBC. In addition, our five high school scholarship recipients were recognized: • Avery Goddard • Gwyneth Jamison • Mila Koeva • Brentley Lening • Sam Meyer Each student received a $1,750 one-year scholarship. We are excited to follow these young people on their individual journeys of academic success. INDEPENDENT REPORT | 13
Following lunch and the to-die-for batter-fried twinkie, attendees were brought up to date about “AI — Hype vs. Reality: Trends Across the Banking Industry” presented by Jeff Brown, CSI. The remainder of Thursday afternoon was devoted to a series of professional learning sessions led by industry experts. Thank you to the individuals listed below for sharing their insights and expertise: • Anne Beningsen, Bankers' Bank of the West and John Van Soest, Arctic Wolf — "CrowdStrike: Increasing Bank Resiliency — Lessons Learned” • Brian Blauser, FBI — “Current Frauds and Schemes” • Dan Bruder, Blendification — “The Integrated Banker: Leading the Change from Work-life Balance to Work-life Blend” • Eric Corrigan, MJC Partners — “Demographics is Destiny” • Michael Erhardt, Stifel — “Asset Allocation Strategies that Work” • John Podvin, Otteson Shapiro — “The Supreme Court Speaks on Banking Regulation and Other Compliance Hot Topics” • Charles Potts, ICBA — “Banking as a Service” • Justin Vause and Terrance Grady, Colorado Housing and Finance Authority — “Increase Your Commercial Lending” 14 | INDEPENDENT REPORT
Thursday evening was full of boots, bandanas, cowboy hats and fun! Rich Bratten (Bank Compensation Consulting) and Friends (Eric Hallman, Bankers’ Bank of the West, Rod Jost, Tony Forman, and Mike Van Norstrand, yes that Mike Van Norstrand, ICBC) kept the evening going with their dynamic vocals and smooth rhythms. It was a boot scooting good time. Thank you to the donors and bidders who made this year’s ICBC High School Scholarship auction a great success. A shoutout to the amazing committee members who pulled everything together. On Friday concluded with two thought-provoking and enlightening sessions — “CEO Succession and Staff Retention” presented by David Kemp, Bankers Management and “The Game Winning Three” presented by Dave Davlin. Mark your calendar for our 52nd, Sept. 17-19, 2025! We’re heading to ICBC Camp at The Hythe, Vail, Colorado! INDEPENDENT REPORT | 15
THE MODERN BANKING BRANCH, REIMAGINED How Technology Is Driving Transformation and Personalization By Wendi Klein, VP Marketing, Alogent ICBC Associate Member MODERN TECHNOLOGY ISN’T JUST REVITALIZING BANKING BRANCHES, BUT TRANSFORMING THEM INTO DYNAMIC CENTERS OF PERSONALIZED SERVICE AND EFFICIENCY. 16 | INDEPENDENT REPORT
The role of the branch has undergone a significant transformation. Gone are the days when the branch was simply a place to handle transactions and consult with tellers about new accounts or loans. Today’s branches strike a balance between high-touch customer service and high-tech efficiency, focusing on personalized service while leveraging advanced technology to enhance daily operations. THE EVOLUTION BEYOND PHYSICAL LAYOUT Branch transformation isn’t a new concept. From the introduction of ATMs and drive-thru windows to interactive teller machines (ITMs), banks and credit unions have long embraced technological advancements. However, true transformation extends beyond just physical upgrades. Modern financial institutions must integrate cutting-edge technologies that offer digital convenience while empowering staff to use the branch as a hub for high-quality, personalized service. THE RESURGENCE OF BRANCHES AMIDST DIGITAL GROWTH Recent data from S&P Global Market Intelligence reveals a nuanced picture: while branch closures have been notable in recent years, 2023 saw a surprising uptick with 1,045 new branches opening across the U.S. This trend highlights a growing recognition that, despite the rise of digital banking, physical branches remain a vital component of the banking experience. When renovated with the right technology, branches can become strategic assets that enhance customer engagement and service. MODERN TECHNOLOGY: BREATHING NEW LIFE INTO BRANCHES Rather than seeing physical branches as outdated relics, consider how contemporary technologies can reinvigorate them. The focus is not merely on aesthetic upgrades but on equipping branches with tools that elevate customer service and operational efficiency. • Fostering the “Person-Centric” Environment Interactive kiosks, self-service tablets and chatbots are now common in branches. These technologies allow account holders to handle routine transactions quickly, creating a seamless omni-channel banking experience. Meanwhile, staff are freed to provide more personalized service, addressing complex needs and building stronger relationships. • Improving Operational Efficiency Automation of repetitive tasks and paper-heavy processes reduces manual errors and accelerates task completion. By incorporating process automation, staff can shift their focus to more value-added activities, such as offering financial advice and enhancing customer interactions. • Maximize Profit Potential Advanced back-end solutions, including cloud-native technologies, data analytics and fraud mitigation tools, help reduce operational costs and fraud losses. This allows employees to concentrate on learning about and promoting products that can boost sales and transactions, and improve customer satisfaction. ENTER UNIFY TO TRANSFORM YOUR BRANCH Modern technology isn’t just revitalizing banking branches, but transforming them into dynamic centers of personalized service and efficiency. By adopting the right tools and strategies, banks and credit unions can ensure that their branches remain relevant and valuable, even in an increasingly digital world. Unify, Alogent’s single API deposit automation platform, streamlines image acquisition across all deposit channels. Configurable and scalable with integrated fraud mitigation capabilities, financial institutions need only to maintain one environment for all Day 1 and Day 2 processing. Discover how Unify’s unique approach can be an asset for your branch transformation efforts. To learn more, scan the QR code. www.alogent.com/payment-solutions/unify?utm_ campaign=ICBC&utm_source=referral&utm_ medium=newsletter&utm_term=ICBC-nov-dec&utm_ content=Unify INDEPENDENT REPORT | 17
In 2024, economic uncertainty continues to shape the lending landscape. Rising interest rates and tightened lending criteria have made it increasingly difficult for small businesses to access traditional financing. According to a recent survey, 77% of small business owners are concerned about their ability to secure credit, a sharp increase from previous years.1 Against this backdrop, SBA loans, particularly the SBA 504 and 7(a) programs, offer crucial support to both businesses and banks. ADDRESSING THE CREDIT CRUNCH SBA loans have become essential for banks looking to maintain or grow their small business portfolios. Small banks, which provide 70% of commercial loans to small businesses, rely heavily on SBA-backed programs to serve borrowers who might otherwise be deemed too risky under traditional lending standards.2 With loan guarantees from the SBA, lenders can offer financing at more favorable terms, providing a safety net for both the bank and the borrower. STABILITY IN A VOLATILE MARKET The SBA 504 loan program has continued to play a significant role in supporting long-term business investments in fixed assets like real estate and equipment. In 2024, the average 504 loan size reached $2.1 million, with a repayment term of 10 to 20 years, making it an attractive option for businesses looking to expand.3 With interest rates on the rise, these fixed-rate loans offer stability and predictability, both of which are highly valued by small business owners navigating volatile economic conditions.4 ECONOMIC GROWTH AND JOB CREATION The SBA loan programs aren’t just beneficial for businesses — they also support broader economic growth. According to recent data, small businesses represent 44% of U.S. economic activity.2 The SBA’s ability to facilitate loans to this segment fosters job creation and economic development, particularly in underserved communities. For bankers, the social and economic impact of SBA lending can strengthen relationships with local businesses and communities, positioning them as key contributors to economic recovery and growth.4 MEETING THE NEEDS OF DIVERSE BUSINESS OWNERS Diversity in small business ownership has been on the rise, and SBA loans are instrumental in closing funding gaps for minority-owned businesses. However, there are still significant disparities in loan approvals based on demographics. For instance, Asian business owners received 20.6% of SBA loans, while Hispanic and Black entrepreneurs secured smaller shares.1 Banks that prioritize SBA lending can play a critical role in addressing these inequities, expanding their reach to a more diverse customer base. CONCLUSION As traditional lending becomes more restrictive in 2024, SBA loans provide a lifeline for banks to continue serving small businesses. The guarantees provided by the SBA mitigate risk for lenders, while offering small business owners access to affordable, long-term financing. In a challenging economic environment, SBA loans will remain a critical tool for bankers who are committed to supporting small businesses and fostering economic growth. 1 SBA Loan Advisor, “Small Business Loan Statistics and Trends 2024.” 2 AltLINE, “Small Business Loan Statistics and Trends.” 3 FounderJar, “SBA Lending Statistics 2024.” 4 U.S. Small Business Administration, “Small Business Economic Bulletin, Second Quarter, May 2024.” WHY SBA LOANS ARE A CRITICAL TOOL FOR BANKERS IN 2024 By Christopher Myers, CEO, B:Side Capital ICBC Associate Member IN A CHALLENGING ECONOMIC ENVIRONMENT, SBA LOANS WILL REMAIN A CRITICAL TOOL FOR BANKERS WHO ARE COMMITTED TO SUPPORTING SMALL BUSINESSES AND FOSTERING ECONOMIC GROWTH. 18 | INDEPENDENT REPORT
Is your community bank bond portfolio performing? Meet Jim. Jim meets with community bankers across the U.S. to discuss ICBA Securities’ investment products, services, and education through our exclusively endorsed broker, Stifel. Investing through ICBA Securities is a direct investment back into the community banking industry. When Jim is on the road, he always takes time to enjoy local restaurants and share on social media. As an ICBA member, you’ve got Jim’s help investing. Learn more at icba.org/securities
HOW TO NAVIGATE DODD-FRANK’S SECTION 1071 By Gerald Leveritt, Director of Enterprise Solutions, FileInvite ICBC Associate Member The Consumer Financial Protection Bureau (CFPB) updated Section 1071 of the Dodd-Frank Act. This change requires financial institutions to collect and report detailed data on credit applications from small businesses — particularly those owned by women and minorities. The goal? To promote fairness and transparency in lending while ensuring equal access to credit. But this rule has sparked controversy. Critics point to the privacy concerns and the substantial administrative burden it places on financial institutions. Section 1071 demands that financial institutions not only collect and manage detailed demographic data but also securely store it. On top of that, they must comply with strict record-keeping rules and potential audits. These tasks require significant resources, including updated technology systems, employee training and nuanced data protection measures. As institutions work to meet these new standards, they face the difficult task of balancing transparency with the need to protect sensitive information. This guide will walk you through why Section 1071 is important, who it affects and how your organization can stay compliant. WHY IS SECTION 1071 IMPORTANT? Section 1071 is crucial because it champions fair lending practices for small businesses — key players in the U.S. economy. They employ nearly half of the American workforce and contribute 43.5% of the nation’s GDP. Ensuring small businesses have equal access to credit is, therefore, necessary for balanced economic growth and innovation. Section 1071 aims to promote transparency in lending by mandating data collection on credit applications, which helps identify discriminatory practices. However, this requirement brings challenges. Financial institutions must overhaul their data systems to meet compliance requirements, sparking concerns about privacy and security. 20 | INDEPENDENT REPORT
Most small businesses don’t have the technological capacity to collect this kind of data without incurring serious, unmitigated information security risks. Compliance demands advanced cybersecurity measures, such as: • Encrypted storage. • Secure access protocols. • Regular security audits. Yet, many small businesses lack the infrastructure and expertise to implement these safeguards, making them vulnerable to data breaches. With 61% of data breaches targeting small businesses, these capability gaps pose a real threat to data privacy. Additionally, compliance deadlines vary based on the size of the institution, meaning each must accurately assess its transaction volumes and update systems accordingly. Beyond system upgrades, significant staff training is essential to manage new data collection protocols and ensure adherence to regulations. WHO DOES SECTION 1071 AFFECT? Section 1071 aims to protect small businesses from discriminatory lending by giving regulators the data they need to monitor lending patterns. This means the rule affects two main groups: financial institutions and small businesses. Financial Institutions Banks, credit unions, and other lenders must now comply with the new data collection and reporting requirements outlined in Section 1071. They must collect and report data about small business owners when these businesses apply for credit. The requirement applies to institutions of all sizes, with specific compliance deadlines depending on their transaction volumes. Small Businesses Businesses with gross annual revenues of $5 million or less are directly impacted by Section 1071. When applying for credit, they must provide detailed information, including: • Gross annual revenue. • Owner’s demographic information, including race, ethnicity and gender. • Business size and type, such as the number of employees and whether it is a sole proprietorship, partnership or corporation. • Purpose of the credit application, such as working capital, equipment purchase or expansion. • Location of the business, including the state and zip code. WHEN DOES SECTION 1071 GO INTO EFFECT AND WHO NEEDS TO COMPLY? Section 1071 became effective 90 days after its publication, on June 28, 2023. However, the CFPB adjusted the compliance timelines, organizing them into tiers based on the volume of covered transactions to small businesses that a lender handled over the prior two calendar years. These covered transactions encompass any extensions, renewals or modifications of credit extended to small businesses. Here’s how the reporting deadline tiers break down: • July 18, 2025: Institutions with 2,500 or more covered originations. • June 1, 2027: Institutions with at least 500 covered originations. • June 1, 2027: Institutions with at least 100 covered originations. It’s important to note that nonprofit organizations and governmental entities are not considered small businesses under this rule. WHAT DATA NEEDS TO BE COLLECTED AND REPORTED? Under Section 1071, financial institutions must collect and report specific data points for small business credit applications. These include: • Demographic information of the principal owners, including race, ethnicity and sex. • Whether the business is minority-owned, women-owned or LGBTQI+-owned. • The type and purpose of the credit being applied for, such as working capital, equipment purchase or business expansion. • The amount of credit applied for and the amount approved or originated. • The action taken on the application and, if applicable, reasons for denial. • The census tract of the applicant’s principal place of business. • The applicant’s gross annual revenue. PREPARE FOR SECTION 1071 WITH FILEINVITE Section 1071 brings new challenges, but financial institutions can navigate these requirements effectively with the right tools and preparation. FileInvite offers customizable workflows and secure data management, ensuring seamless compliance and efficient data collection. With FileInvite, both financial institutions and small businesses can confidently meet regulatory standards without overburdening their staff or exceeding their budgets. SECTION 1071 BRINGS NEW CHALLENGES, BUT FINANCIAL INSTITUTIONS CAN NAVIGATE THESE REQUIREMENTS EFFECTIVELY WITH THE RIGHT TOOLS AND PREPARATION. INDEPENDENT REPORT | 21
Artificial intelligence (AI) has dominated headlines and conversations over the last year, with various industries exploring what this technology means for automation, collaboration, communication and more. However, new challenges come with those opportunities to streamline processes, particularly in cybersecurity. Banks should know the following perils and tips to minimize risk when incorporating this technology into their strategies. WHAT CYBERSECURITY RISKS DOES AI POSE? One of AI’s chief dangers is how bad actors can use it to streamline cyberattacks. According to Darktrace, there was a 135% spike in novel social engineering attacks from January to February 2023, aligning with the adoption of ChatGPT. Other reports reveal that 75% of cybersecurity professionals have seen an increase in AI-powered cyberattacks since 2023. Here are some ways cybercriminals use AI, all representing cybersecurity risk to your institution: • Increased Speed and Scalability of Attacks: Instead of writing their own phishing emails or scripts, cybercriminals prompt AI to create them in seconds. It’s also easier for them to launch personalized phishing attacks, as automation leads to increased speed and scalability. With targeted ransomware, they can use AI and ML to create accurate profiles of their targets. • Deepfake Attacks: Cybercriminals also use deepfakes — which are AI-generated photos, videos or audio — to carry out identity theft and other social engineering schemes. This includes using fake audio on phone calls to execute account takeover or requesting wire transfers. Since deepfakes come in varying levels of sophistication, vigilance is critical. • Circumventing Security Protections: Fraudsters leverage AI to navigate around institutions’ security protections. Using AI, malware can adapt and evade detection by identifying patterns in detection systems and bypassing them. AI can also rewrite vulnerabilities to make them more difficult to detect. • Talent Shortage and Skills Gap: Since cybercriminals are often on the cutting edge of technology and tactics, having employees who share that mindset helps institutions elevate defenses. However, talent is expensive, and the market for highly skilled cybersecurity professionals is highly competitive. Many institutions turn to trusted managed cybersecurity providers to help bridge this gap. CYBERSECURITY AND AI What Community Banks Should Know By Steve Sanders, Chief Risk Officer and Chief Information Security Officer, CSI ICBC Associate Member 22 | INDEPENDENT REPORT
HOW TO USE AI FOR CYBERSECURITY Despite the above risks, AI’s positive effects on cybersecurity cannot be denied. AI is accelerating the advancement of tools like automated security operations, malware protection and authentication. Many organizations are automating security operations to increase efficiencies, with 51% expanding automation or AI into their cybersecurity strategy over the last two years. Below are several advantages AI brings to security: • Enhance Vulnerability Management: Institutions can use AI to determine which vulnerabilities within their systems are most likely to be exploited, allowing them to prioritize remediation and reduce expenses for incident response. • Analyze Data Efficiently: AI/ML can strengthen threat detection by analyzing large amounts of data such as emails, website links and more to identify patterns and trends. For example, AI can evaluate email content to see if common phishing indicators, such as a sense of urgency, are present. • Automate Manual Tasks: Some routine tasks — such as security log monitoring — can be tedious or time-consuming. Automating these tasks using AI allows employees to work on more rewarding activities. AI also helps close out investigations and support tickets faster, as in the case of spam or phishing emails. • Increase Accuracy in Detecting Unusual Activity: AI can more accurately and quickly detect abnormal behavior in some instances than humans, especially with high volumes of cases to evaluate. AI can transform an institution’s approach to log reviews, spam emails or anything else that requires quick analysis of a large amount of data. • Improve Security against Evolving Threats: Traditional cybersecurity methods may be slow to adapt to new or evolving threats, but AI quickly adapts to identify new threats and elevates threat intelligence. AI can also automate incident response by containing a breach within seconds and improves network security by locating and securing weak spots. Additionally, AI is strengthening attack prediction with behavioral and predictive analytics, which will likely only grow more accurate. • Alert on Anomalous Behavior: Since AI can analyze enormous amounts of data, it can identify patterns and detect anomalies by distinguishing between normal and unusual behavior without involving a human to spend time investigating all cases. If unusual activity occurs on a network, AI sends real-time alerts. Enhanced threat detection and response are already highly accurate, but AI drives enhanced investigations and forensics of attacks. EVALUATING CYBERSECURITY AND AI Before implementing AI in your cybersecurity strategy, there are various considerations to keep in mind. One of the top considerations for your institution should be network security. Your configurations should be addressed to ensure no vulnerabilities exist. Securing your data is critical to ensure your AI engine is not training on confidential information. Are your files and confidential information protected? If you have a strategic plan or other proprietary documents saved in an area used for training your AI model, then your confidential data could be generated in search results. Banks should understand their controls around data security before moving forward with an AI engine. If your institution uses publicly available tools like ChatGPT, ensure employees understand the risks of uploading sensitive documents or information. Refer to available AI guidance from regulators before encouraging or allowing employees to leverage these tools. HOW SHOULD COMMUNITY BANKS APPROACH AI AND CYBERSECURITY? Given AI’s prevalence in the industry, it seems this technology is here for the long haul. Community banks should seize the opportunity to educate and train their employees, customers and communities about AI and cybersecurity best practices. Community banks can directly contribute to a stronger, safer community and customer base by providing education on AI’s perils and pitfalls. Training topics should include educating customers on identifying AI-generated schemes, how to report them and best practices for navigating this new AI landscape. Community banks should take this opportunity to educate their customers and communities about AI and other cybersecurity best practices. For instance, as social engineering schemes evolve, banks should ensure that customers know what questions their institution will and won’t ask them via phone, text or email. MOVING FORWARD WITH YOUR AI STRATEGY AI stands to revolutionize cyber defense for organizations in various industries, including community banks. And as cybercriminals continue leveraging AI to improve their attacks, institutions must figure out how to effectively use it to beat them in their own game. This means adapting and implementing new tools — all while ensuring proper controls remain in place to mitigate risk. As institutions develop strategies to supplement existing cybersecurity measures with AI, it’s important to consider the risks and rewards. But one thing is clear: This technology is set to continue shaping the technology landscape. INDEPENDENT REPORT | 23
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