THE OFFICIAL PUBLICATION OF THE MONTANA INDEPENDENT BANKERS ASSOCIATION SPRING 2025 MIB 2025 CONVENTION AND TRADE SHOW
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20 2025 MIB EXECUTIVE OFFICERS Loren Brown, President Ascent Bank, Helena lbrown@ascentbank.com Amber Brown, Vice President Peoples Bank of Deer Lodge abrown@pbdl.net Clinton Gerst, Secretary Bank of Bozeman cgerst@bankofbozeman.com Laura Clark, Treasurer Opportunity Bank lclark@oppbank.com Tim Schreiber, Immediate Past President Farmers State Bank tims@farmersebank.com Kenny Martin, ICBA State Director Independence Bank, Helena kennym@ibyourbank.com 2025 MIB BOARD OF DIRECTORS Tom Christnacht First Security Bank of Deer Lodge Bill Coffee Stockman Bank, Miles City Daniel Day Bank of Montana, Missoula Shawn Dutton First Security Bank of Roundup Mike Hawthorne First Montana Bank, Missoula Logan Hensley Valley Bank of Kalispell Brice Kluth First State Bank of Shelby Scott Mizner American Bank, Bozeman Joel Rosenberg Three Rivers Bank of Montana, Kalispell Andrew West Eagle Bank, Polson Phil Willett Pioneer Federal Savings and Loan, Dillon ASSOCIATE BOARD MEMBER Ryan Fritz Citizens Alliance Bank rfritz@citizensalliancebank.com MIB STAFF Jim Brown, Esq., Executive Director Montana Independent Bankers jbrown@mibonline.org ©2025 The Montana Independent Bankers Association (MIB) | The newsLINK Group LLC. All rights reserved. Community Banker is published four times per year by The newsLINK Group LLC for MIB and is the official publication for this association. The information contained in this publication 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 as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of MIB, 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 advertised. Community Banker is a collective work, and as such, some articles are submitted by authors who are independent of MIB. While a first-print policy is encouraged, in cases where this is not possible, 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. Montana Independent Bankers 1812 11th Ave. PO Box 4893 Helena, MT 59604 (406) 449-7444 jbrown@mibonline.org mibonline.org 16 4 PRESIDENT’S MESSAGE 4 True Independent Community Bankers By Loren Brown, President, MIB EXECUTIVE DIRECTOR’S MESSAGE 6 Protecting and Prioritizing Your Interests By James Brown, Esq., Executive Director, MIB FLOURISH 8 Your Advocacy Impact By Rebeca Romero Rainey, President and CEO, ICBA FROM THE TOP 9 Translating Advocacy Into Action By Lucas White, ICBA Chairman, President of The Fountain Trust Company 10 Concepts and Facts ChatGPT Gets it Mostly Right on Yield Curve Shapes By Jim Reber, President and CEO, ICBA Securities 12 Montana Independent Bankers 2025 Convention and Trade Show MIB FEATURED ASSOCIATE MEMBER 16 Meet Jennifer Pearson of Prospera By Bill Showalter, Senior Consultant, Young & Associates Inc. 18 Compliance Q&A 20 ICBA LIVE LEADERSHIP AT ALL LEVELS 22 How to Bridge Gaps With Fellow Employees By Lindsay LaNore, Senior Executive Vice President, Chief Learning and Experience Officer, ICBA 24 How to Push Back When Your Health Carrier Raises Premiums By Alliant 25 Smarter Vendor Negotiations for a Seamless Core Conversion By ADVANTAGE 26 The Impact and Key Elements of a Compensation Strategy By Kerry Gleason, UBB 28 2025 MIB Membership Directory 28 MIB Associate Member Banks 29 MIB Associate Member Resource Guide 30 MIB Upcoming Events 31 Bank Training Webinars Contents SPRING 2025
All of us who are part of MIB are dedicated to making the local communities that we live in and the community that is made up of independent bankers better by the belief that we can best serve our local customers. PRESIDENT’S MESSAGE TRUE INDEPENDENT COMMUNITY BANKERS BY LOREN BROWN, PRESIDENT, MIB 4 Community Banker
Hello, my community banking friends, Lately, I have been reflecting on what a fabulous Montana winter I was able to enjoy before being interrupted by an amazing trip to the ICBA LIVE Convention held in Nashville! I love the snow. This winter I was able to spend a lot of days on my snowmobile, my snowbike and my skis — which I thoroughly enjoyed. I also enjoyed the week spent in Nashville with many of my banking friends from Montana and across the country. My reflections caused me to pause and think deeply about the name of our national partner association that advocates for all of us, the Independent Community Bankers of America (ICBA). I also thought about our own association name, the Montana Independent Bankers. As a result, I decided to look up the words “community” and “independent.” The Merriam-Webster Dictionary defines “community” as a noun with three primary definitions. The definition that stands out to me is “a unified body of individuals.” The dictionary goes on to explain that this unification could be because individuals live in a geographically common area or because individuals share professional interests, among other things. The same dictionary defines “independent” as an adjective or a noun; but for our purposes, the adjective is what I want you to consider. Again, the dictionary provides three definitions of the word. The first of which is very simply put as “not dependent” with five sub-definitions, including two that I found very interesting. Those two sub-definitions are “not subject to control by others” and “showing a desire for freedom.” When I look at these definitions, they reflect perfectly on both who I am as a banker and what the ICBA and MIB represent. All of us who are part of MIB are dedicated to making the local communities that we live in and the community that is made up of independent bankers better by the belief that we can best serve our local customers. And, we believe we can benefit our localities even in the face of competition from too-large-to-fail institutions headquartered outside of Montana. To this end, both the ICBA and MIB host annual events that I have attended many times, such as ICBA LIVE or the MIB State Convention, which strengthen this belief that community banking is the heart of small-town USA. 2025 ICBA LIVE was a fabulous example of a group of unified banking professionals coming together to share in their beliefs in the freedom of helping the people where they live in the way that each bank feels best serves its customers. This year’s ICBA LIVE was held at the Gaylord Hotel and Convention Center at Opryland in Nashville, Tennessee. A few thousand bankers, along with some of their families, attended the event to meet with vendors, attend classes on a whole variety of banking topics, mix and mingle with other bankers from all over the country, and hear from the ICBA on what is happening in D.C. with regards to community banking. At the national event, the MIB hosted a joint reception with the Missouri Independent Bankers Association (MIBA) one evening so we could all spend a little more time with other bankers who are from a little closer to home. The joint reception offered a great opportunity for Montana’s community bankers, including myself, to meet some other community bankers in a smaller group setting. For the closing of the event, some attendees, including my wife, Michelle, and I, were able to attend a show at the Grand Ole Opry. I thoroughly enjoyed seeing so many other Montana bankers in a different part of this great country. If you have never attended ICBA LIVE, I would highly encourage you to do so in the future. Next year’s national convention will be held in San Diego, and I hope to see you there. The next event I want to talk about is something that I would ask every reader of this letter to attend. You have an opportunity to make yourself a better banker and, in turn, a better community member by attending the Montana Independent Bankers Convention and Trade Show. The convention will be held July 16-18, 2025, at Big Sky Resort. If you are in bank management, please consider attending yourself and sending some of your board members and staff to the convention. If you are not, please ask your bank’s management to send you. If they won’t, then shoot me an email at lbrown@ascentbank.com, and I will personally ask them for you. The annual convention is where we, as Montana bankers, really get a chance to connect with each other to see how we can help other Montana banks grow and thrive along with our own! Every bank there is a true independent community bank. We bring in great speakers to update us on regulatory, economic, product, technology and more changes. We make sure to throw in fun event opportunities, including golfing, rafting and social time to make sure you get to know other bankers and vendors on a more personal level. And if you are not a banker, we would still love to have you attend and participate in all the sessions and activities. As much as I love winter sports, I am super excited for summer. I am hoping to use the “better” weather to travel the state and spend some time in your local community in order to get to know each of you a little better. But, no golf courses for me — a lunch or dinner will do. In the meantime, I look forward to seeing all of you in Big Sky in July for some big fun under Lone Mountain. Loren Community Banker 5
Welcome to the 2025 MIB Annual Convention and Trade Show addition of the MIB magazine. I write this article on a beautiful bluebird day in March, one day after the Spring equinox here in the Northern Hemisphere. March has always been one of my favorite months. One day, it can be snowing, and the next, it can be a 50-degree sunny day. Being able to say “spring has sprung” is a welcomed opportunity after experiencing another very wintery weather season. The winter months were busy ones for the MIB. In January, the 2025 Montana Legislature convened. As always, the Association has been up “on the Hill” to represent Montana’s community banking interests. As of the date I write this, the Association has strongly supported the Division of Banking’s budget. I am pleased to write that the division’s budget has been smooth sailing. Further, the Association has been able to successfully fend off EXECUTIVE DIRECTOR’S MESSAGE PROTECTING AND PRIORITIZING YOUR INTERESTS BY JAMES BROWN, ESQ., EXECUTIVE DIRECTOR, MIB … on behalf of the MIB Board of Directors and Association staff, we look forward to serving YOUR unique Montana-based interests today, tomorrow and well into the future. 6 Community Banker
the majority of bills that, if enacted, would do harm to Montana’s community banking industry. At the same time, the Association provided its full support to House Bill 434, which was sponsored by former MIB Board Member Kenny Walsh of Twin Bridges. This bill, if signed into law, would address one of MIB’s members’ top priorities, which is to ensure an interactive teller machine is not treated as a separate branch under Montana law. Turning now to other matters, early in March, the Association hosted its annual Montana Reception during the ICBA National Convention. ICBA LIVE was held in Nashville. Montana cohosted its reception with the Missouri Independent Bankers Association. In recent years, the MIB Board has made the decision to partner with our state associations on a reception due to high cost/expense considerations. This formula has proved to be successful both in terms of proper stewardship of MIB member dues dollars and attendance. The Nashville event drew some 25 Montanans together to celebrate community banking and discuss banking issues. Now, we turn to the primary theme of this edition of the Community Banker, where you will find all the information needed to attend MIB’s annual convention. The convention will be held July 16-18, and the venue is the Big Sky Resort. We are fortunate to be able to return to Big Sky in July of this year as the association was previously informed we could only book dates outside of the summer season moving forward. We are also excited about this year’s quality lineup of speakers. MIB is pleased to have ICBA Vice Chairman Mike Burke join us at Big Sky as our keynote speaker. Other great speakers include Melanie Hall of the Montana Division of Banking, Patrick Barkey with the Bureau of Economic Research and Tom Keenan of Keenan & Partners. The annual golf tournament will be held at the Big Sky Resort Golf Course. And, of course, the ever-popular whitewater rafting trip will be available for those looking for a bit of extracurricular fun for themselves or their families. MIB’s State Convention is known as the biggest little banking convention in the West. In light of the roster quality of education speakers and fun convention events, we hope to see you, your bank employees and your family, below Lone Mountain this summer. All the information you need to register for the 2025 convention is contained within the pages of this edition of the magazine. MIB will be traveling to Washington, D.C., during the second week of May as part of ICBA’s Capital Summit to speak with Montana’s congressional delegation. You can be assured that one message MIB will be carrying to our nation’s capital is that MIB’s member banks are not the problem, but rather the solution to the continual problems being caused by the “too-big-to-fail institutions.” The events of the last several years, such as the SVB failure in 2023 and the Wells Fargo civil liability issues in 2020 relating to opening unauthorized customer accounts, reinforces the importance of MIB, and reinforces the distinction between MIB and other state banking trade associations. That distinction is that MIB has one mission, and one mission alone — to represent the interests of Montana’s state-chartered community banks, period and end of story. The membership dues paid by MIB’s member banks and associate members are the resources by which MIB carries out that simple yet vital mission. So, on behalf of the MIB Board of Directors and Association staff, we look forward to serving YOUR unique Montana-based interests today, tomorrow and well into the future. I hope you have a great spring and summer. I look forward to seeing you at the Big Sky Resort in July for great community banking fun. Sincerely, James Brown, Esq. Executive Director Community Banker 7
YOUR ADVOCACY IMPACT FLOUR I SH Sometimes in life, we’re fortunate enough to see our labor yield results, and that’s precisely what’s been happening with our advocacy efforts. The first quarter of 2025 has boasted great successes for community banking, including: • We saw congressional efforts to overturn the Consumer Financial Protection Bureau’s 1071 and overdraft rules. ICBA-supported legislation introduced by the House Committee on Small Business Chairman Roger Williams (R-Texas) would repeal the statute that underlies the CFPB’s Section 1071 rule, while Senate Banking Committee Chairman Tim Scott (R-South Carolina) and House Financial Services Committee Chairman French Hill (R-Arkansas) have introduced ICBA-backed Congressional Review Act resolutions to overturn the CFPB’s overdraft rule. • The first House Financial Services Committee hearing of the year focused solely on community banking. At the “Make Community Banking Great Again” hearing, I was able to testify and highlight policy proposals from our “Repair, Reform and Thrive” advocacy plan. • The first House Committee on Small Business hearing of the year focused on small business lending. At the “Hope on the Horizon” hearing, ICBA Chairman-Elect Alice Frazier — president and CEO of Bank of Charles Town, in Charles Town, West Virginia — encouraged policymakers to pass Chairman Roger Williams’ 1071 Repeal to Protect Small Business Lending Act, preserve and expand a pro-growth tax environment by extending Section 199A of the Tax Cuts and Jobs Act for pass-through business, and more. Moments like these affirm the importance of community banking to our nation’s economy and in the halls of Congress. We need to keep this momentum, driving forward the issues of right-sized regulation, a level regulatory playing field and flexibility to support our communities. Now more than ever, our successes serve as a call to action: Every phone call we make to our members of Congress, every trip to Capitol Hill and every letter we send falls on open ears and has an impact. We must maintain continued and persistent engagement to ensure our issues remain a priority in today’s legislative landscape. With that in mind, I hope you will join us for Capital Summit (icba.org/capital-summit), which will take place May 12-15 in Washington, D.C. When we come together on Capitol Hill, it demonstrates to members of Congress just how serious we are about advancing community banking for the betterment of their districts and our communities, and we need your voice. Hard work is what it takes to achieve results. And with more hard work on our part, the rest of the year will get better for community banking. Every phone call we make to our members of Congress, every trip to Capitol Hill, and every letter we send falls on open ears and has an impact. BY REBECA ROMERO RAINEY, PRESIDENT AND CEO, ICBA 8 Community Banker
TRANSLATING ADVOCACY INTO ACTION We need legislators to know who we are and what we represent to protect our banks, communities and customers. FROM THE TOP While advocacy has always been a core ICBA pillar, the massive number of new regulations we have faced over the past year serves as a stark reminder of the importance of community bankers taking part in advocacy efforts. This community has really stepped up. For instance, we had a record number of first-time attendees at the 2024 ICBA Capital Summit, and we were able to successfully advocate for the Congressional Review Act resolution on the 1071 rule last year — with both the House and Senate voting to overturn the CFPB’s regulation. Despite its presidential veto, this was a huge victory, in large part because it has set the stage for the current Congress. It has never been clearer to me that we, the community bankers across the nation, need to use our voices. While ICBA does a stellar job of advocating on our behalf, the simple fact remains that when we tell our stories on Capitol Hill and in our state legislatures, it is more effective. Lawmakers prefer to hear from us, their constituents. They want to understand how community banks make an impact in the districts they serve, and they need to know that when regulations tie our hands, it’s their community that suffers. In short, we need them to be aware of the community bank difference. Although we are the economic engine MY TOP 3 Experiences as ICBA chairman: 1. Traveling around the country and meeting community bankers. 2. Testifying before Congress on Section 1071. 3. Representing community banks at the World Savings Bank Institute Conference in Rome. of the country, most lawmakers don’t truly understand all we do to power their districts. We need legislators to know who we are and what we represent to protect our banks, communities and customers. Engaging them has to be a part of our day-to-day jobs. Throughout my tenure as ICBA chairman, I have made it my mission to rally community bankers to come to D.C. In fact, the proudest moment I experienced over the past year was when a few bankers told me that they came to the Capital Summit for the first time because of my speech at ICBA LIVE. It meant a lot that the message resonated. Because more than ever, we need to continue to act, advocate and ensure our legislators understand who we are. We need new, younger generations of bankers stepping up to show that what we do is in line with modern financial services’ needs. We need an amplification of our voices to demonstrate our commitment to our customers and communities. So, as I end my term as chairman, I do so with a full heart and a dedication to community banking that will continue to fuel my advocacy work and hopefully inspire yours. I look forward to seeing you on Capitol Hill. BY LUCAS WHITE, ICBA CHAIRMAN, PRESIDENT OF THE FOUNTAIN TRUST COMPANY Community Banker 9
CONCEPTS AND FACTS Note: In this column, for the first time, I relied on ChatGPT, the generative artificial intelligence (AI) platform. For the record, I submitted this inquiry: “Write a 700-word essay on how the shape of the Treasury yield curve affects community banks.” The following was generated in, I guess, three seconds, and most of it appears to be correct. I’ve taken the liberty of adding some commentary in bold, and there really aren’t many changes. In the future, I will only use AI if I fully disclose its assistance. And you’ll be able to tell because there’re no snark in AI-generated documents. THE IMPACT OF THE TREASURY YIELD CURVE ON COMMUNITY BANKS The Treasury yield curve is a critical financial indicator that depicts the relationship between interest rates and the maturity dates of U.S. government debt. Typically, the yield curve slopes upward, reflecting higher yields for long-term securities compared to short-term ones. This essay explores how the shape of the Treasury yield curve affects community banks, focusing on their lending practices, interest rate risk management, and overall financial health. UNDERSTANDING THE YIELD CURVE The yield curve can take on various shapes, primarily categorized as normal, inverted or flat. A normal yield curve indicates that longer-term bonds have higher yields, suggesting economic growth; an inverted yield curve occurs when short-term yields exceed long-term yields, often seen as a predictor of recession; and a flat yield curve signifies uncertainty in the economy, where there is little difference between short-term and long-term rates. Each of these shapes presents unique challenges and opportunities for community banks. LENDING PRACTICES Community banks primarily generate revenue through lending, and the yield curve significantly influences their lending practices. In a normal yield curve environment, community banks can borrow at lower short-term interest rates and lend at higher long-term rates, which supports their profitability. For example, if a bank can secure funding at a 1% interest rate for a one-year loan and lend it out at 4% for a 30-year mortgage, the spread — essentially the bank’s profit — is 3%. This difference allows community banks to support local economies, providing loans for homes, businesses, and other community projects. Conversely, when the yield curve flattens or inverts, the profitability of BY JIM REBER, PRESIDENT AND CEO, ICBA SECURITIES CHATGPT GETS IT MOSTLY RIGHT ON YIELD CURVE SHAPES 10 Community Banker
these lending activities diminishes. In an inverted yield curve scenario, community banks may find themselves in a position where they borrow at higher short-term rates than the rates at which they can lend long-term. This situation compresses margins, potentially leading to a reduction in loan origination and, consequently, a slowdown in economic activity within the communities they serve. INTEREST RATE RISK MANAGEMENT Community banks must also navigate interest rate risk, which is the risk of financial loss due to changes in interest rates. The shape of the yield curve plays a crucial role in how banks manage this risk. In a normal yield curve scenario, banks can match the duration of their assets (loans) with their liabilities (deposits) effectively. For instance, if a community bank has long-term fixed-rate mortgages, it can rely on stable, lower-cost funding from short-term deposits. Wrong! This is the very recipe for exposure to rising rates. This alignment helps mitigate the risk of rising interest rates. However, during periods of an inverted or flat yield curve, community banks face increased interest rate risk. Not necessarily. The duration mismatch can lead to a situation where liabilities reprice before assets, exposing banks to potential losses. To manage this risk, community banks may engage in interest rate swaps or other hedging strategies, but these can be costly and complex, particularly for smaller institutions with limited resources. ASSET QUALITY AND LOAN DEMAND The shape of the yield curve also affects asset quality and loan demand, which are critical for community banks’ stability. In a normal yield curve environment, economic growth typically leads to increased demand for loans as businesses and consumers have greater confidence in their financial prospects. Community banks can capitalize on this demand, extending credit while maintaining healthy asset quality. However, when the yield curve inverts, it often signals an impending economic slowdown. As businesses and consumers become more cautious, loan demand may decline, and existing borrowers may struggle to meet their obligations, leading to increased default rates. This deterioration in asset quality can significantly impact community banks, which often have concentrated loan portfolios tied to local economies. It’s a bit of a non-sequitur to claim inverted curves cause a decline in credit quality. It’s more like the curve is reacting to that expectation. A rise in non-performing loans can strain capital reserves and lead to regulatory scrutiny. CONCLUSION The shape of the Treasury yield curve is a pivotal factor influencing the operations and financial health of community banks. A normal upward-sloping curve supports profitable lending practices and encourages economic growth, while an inverted or flat curve presents challenges related to interest rate risk, profitability and asset quality. Community banks must remain vigilant and adaptable to changes in the yield curve, employing sound risk management strategies and maintaining strong relationships with their local communities. Understanding these dynamics is essential for community banks as they strive to navigate the complexities of the financial landscape and continue to support their local economies. Jim Reber (jreber@icbasecurities.com) is president and CEO of ICBA Securities, ICBA’s institutional, fixed-income broker-dealer for community banks. Community Banker 11 Our Mission is to Help You Succeed Partner with us for: • Loan participation purchases and sales* • Bank stock financing • Bank executive and employee financing Craig McCandless SVP/Correspondent Banking Business Development Officer Based out of Billings, Mont. Covers: Montana, Wyoming and Idaho 406.850.3790 *We do not reparticipate loans.
MONTANA INDEPENDENT BANKERS 2025 CONVENTION AND TRADE SHOW JULY 16-18, 2025 BIG SKY, MONTANA 12 Community Banker
AGENDA WEDNESDAY, JULY 16 1:00-4:00 p.m. MIB Board Meeting 4:00-4:45 p.m. Registration 5:00-6:30 p.m. Welcome Cocktail Reception Please wear Western attire. THURSDAY, JULY 17 7:30-8:00 a.m. Registration 7:30-8:15 a.m. Breakfast and MIB Membership Meeting 8:30-9:30 a.m. Directors’ Training Angela Murdo, Principal, Pinion LLC 9:00 a.m.-5:00 p.m. Exhibitor Setup 9:40-10:40 a.m. SEMINAR Patrick Barkey, UM Director of Research at the Bureau of Business and Economic Research 11:00 a.m.-5:30 p.m. Annual MIB Golf Tournament 12:00-5:00 p.m. River Raft Trip Meet at the registration table at 11:00 a.m. 4:00-5:30 p.m. Registration 6:00-7:30 p.m. Vendors on Exhibit Vendors’ Night Cocktail Reception & Awards PAC Auction 7:30-9:00 p.m. MIB Gala Guest Speaker: Mike Burke, ICBA Vice Chair FRIDAY, JULY 18 7:15-8:15 a.m. Registration Foyer 7:15-8:15 a.m. Vendor Breakfast 8:30-11:00 a.m. Exhibitor Take Down 8:45-9:45 a.m. SEMINAR Tom Keenan, President at Keenan & Partners 9:50-10:40 a.m. SEMINAR Jim Reber, President and CEO, ICBA Securities 10:45-11:45 a.m. SEMINAR Melanie Hall, Montana Banking Commissioner END OF CONVENTION GOLF Experience golf in the beauty of Big Sky, Montana, on this award-winning Arnold Palmer-designed public course. SCENIC LIFT RIDES Take a scenic chairlift ride in Big Sky, Montana. Whether you’re hiking from higher grounds or taking in the views, a chairlift ride is a fun activity for all ages. WHITEWATER RAFTING Explore the rivers of Big Sky, Montana. Whether you’re looking for exciting rapids or a peaceful float, a guided whitewater rafting trip is a must-do summer activity. Don’t miss out on this exciting event. Register Today! https://mibonline.org/convention/ Community Banker 13
SPEAKERS MIKE BURKE, VICE CHAIR, ICBA Mike is a lifelong banker who started from the ground floor. From a part-time teller to president of ChoiceOne Bank, his career has given him experience in every aspect of the company. With a background in finance from the University of Michigan — Flint, he has a wealth of experience in the banking industry. He has occupied various leadership positions, including serving as president of Lakestone Bank & Trust. He is also an active member of various boards, including the Community Bankers of Michigan, the Independent Community Bankers of America, McLaren Lapeer Region and more. His expertise in area markets, competitors, customers and business operations makes him a choice leader for ChoiceOne Bank. PATRICK BARKEY, DIRECTOR, BUREAU OF BUSINESS AND ECONOMIC RESEARCH Patrick has served as director of the Bureau of Business and Economic Research (BBER) at the University of Montana since 2008. He has been involved with economic forecasting and policy research for more than 40 years in both the private and public sectors. He has authored studies on energy development, tourism, labor markets, tax policy and international trade. He is the past president of the Association for University Business and Economic Research (AUBER), a national organization of regional business research centers founded in 1947. The BBER is the preeminent business research center in Montana, housed in the College of Business. For 46 years, it has produced the Montana Economic Outlook Seminar, a half-day program devoted to the national, state and local economic outlook that now is held in 10 cities across Montana in February. Barkey also hosts the Montana Economic Minute, a daily podcast on economic issues that has aired on radio stations throughout the state since 2008. He holds a B.A. and a Ph.D. in economics from the University of Michigan. TOM KEENAN, PRINCIPAL, KEENAN & PARTNERS Tom is principal of Keenan & Partners, a consulting brokerage and advisory firm focused on valuation, transactional brokerage and capital markets services delivered to the financial institution industry. He founded Keenan & Partners in 2010 in order to deliver personal service to a select client base with special attention paid to core beliefs of integrity and excellence. JIM REBER, PRESIDENT AND CEO, ICBA SECURITIES Jim is president and CEO of ICBA Securities. He is a frequent speaker and lecturer at bank investment seminars and workshops. Jim also writes a monthly investment column for the Independent Banker magazine. He is on the faculty at Barret School of Banking in Memphis, Tennessee, and serves on the Board of Regents and a term as chairman. Jim is a certified public accountant and a chartered financial analyst, and is a graduate of Christian Brothers University, where he served on the Board of Trustees as chairman of the Finance Committee and University Treasurer. HOTEL INFORMATION BIG SKY RESORT 50 Big Sky Resort Rd. Big Sky, MT 59716 (800) 548-4486 ANGELA MURDO, PRINCIPAL, PINION LLC Angela has over 20 years of experience providing quality attest and consulting services to her clients. Her experience includes all phases of accounting, auditing and consulting for public sector entities. Specific experience includes performance and supervision of audits, evaluation of internal controls, preparation and analysis of financial statements, planning and performing year-end financial statement audits under generally accepted accounting principles, and developing and implementing accounting systems solutions. Book online by scanning the QR code. https://www.bigskyresort.com/booklodging?pid=42836&- checkin=07/15/2025&checkout=07/19/2025#/room 14 Community Banker
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MIB FEATURED ASSOCIATE MEMBER Prospera is a nonprofit economic development organization that helps businesses find their pathway to success. Working to advance and inspire diverse economies and resilient communities in southwest Montana, their focus is helping people start and grow their businesses, which, in turn, strengthens the local economy. Prospera is celebrating 40 years of economic and community development. The amazing team at Prospera helps motivated entrepreneurs navigate the hurdles of opening and running a business. One of those remarkable people at Prospera is Jennifer Pearson, the Business Lending Manager. She helps business owners take their ideas and connect them with opportunities for access to capital. We recently had a chance to sit down with Jennifer and learned more about the extraordinary work she is involved in. The following are excerpts from our conversation. Tell us a little bit about you. I have a bachelor’s degree in sociology and psychology from Montana State University and a master’s degree in human services with a focus on public administration. I also earned a project management professional (PMP) certification. I started working with Prospera in October 2024 and am so happy to be here. I come from a background of nonprofit work and have done some consulting work. When it comes to work, my personal commitment is to have a positive impact, and Prospera aligns well with that. We serve businesses and it has been a joy to dive in and help ideas become a reality. Tell us about what you do at Prospera. My role as Business Lending Manager is to collaborate with community banks, business owners, and our internal team to review loan requests and to underwrite loans. We work with businesses who are not yet bankable. We also work in partnership with banks to provide gap financing and play a key role in getting deals over the finish line. Prospera has the flexibility to take subordinate positions on critical financing pieces. We play a big role in making businesses bankable over time. That’s a win-win for the client, for Prospera, and for the banks. We have wonderful partnerships with banks. In addition to underwriting new deals, I regularly check in with our current loan clients and provide support where I can to ensure their success today, tomorrow and well beyond. Our ongoing support of clients really helps them to navigate challenges successfully and gives them reassurance that resources are available when they need them. Ideally, we are finding ways to support businesses before things get tough. Our clients’ success is in everyone’s best interest. What makes Prospera unique? Prospera is home to the Small Business Development Center (SBDC), the Montana Women’s Business Center (MTWBC) and the Food and Ag Development Center (FADC). Our business advisors offer free one-on-one MEET JENNIFER PEARSON OF PROSPERA 16 Community Banker
advising, serving clients from the start-up phase to transitioning out of their business. Prospera serves as a connector for businesses, putting business owners in touch with resources needed for business continuity. In addition, we host a variety of specialized training courses throughout the year, allowing business owners and leaders to receive continuing education from professionals specializing in a broad range of topics such as marketing, HR, AI and finance. Our highly popular peer networking event, Member Meetup, brings businesses together and creates the opportunity for quality connection and relationship building. These networking events are a platform for creating a strong business community across the valley and are just another piece of the puzzle that continues to keep our community strong and connected. In 2024, Prospera worked with the Belgrade Chamber of Commerce to establish the monthly Belgrade Business Roundtable events. We asked the local business community what issues were important to them and tailored the monthly business roundtable discussions to local business needs, bringing in experts and allowing businesses in the community to openly discuss concerns and solutions. Prospera will be working to bring this model to other communities across Gallatin and Park counties. What do you love about your job? I still feel new in my position, but I’m learning quite a bit. I love that I can make a tangible difference in our community with the work that we do. Being able to see the positive impact of our work on not just the local economy, but on the individuals who work so hard to make their business ideas a reality is incredibly rewarding. What is one fun fact that people don’t know about you? Even though I have lived in Montana for over 30 years, I am still in awe of our magnificent surroundings. I enjoy being out in nature, going on walks and hikes and exploring many of Montana’s beautiful trails. I find that spending time in nature helps me stay grounded and inspired. Any last thoughts? Prospera enjoys being part of MIB. Community banks are the backbone of Montana businesses. As an associate member of MIB, we are proud to support their efforts. Our partnership has allowed us to help businesses and communities find their pathways to success. I welcome any community bank that is interested in learning more about what Prospera does to reach out. I’m happy to talk on the phone or better yet, meet up for coffee and some good conversation. I enjoy building new relationships. I’ve found that what starts as a good relationship can grow into a beneficial partnership. To get ahold of Jennifer, please call (406) 587-9565 or email jpearson@prosperamt.org. To learn more about Prospera’s mission please visit prosperamt.org. Community Banker 17
COMPLIANCE BY BILL SHOWALTER, SENIOR CONSULTANT, YOUNG & ASSOCIATES INC. EFTA. Q: We issued a provisional credit to a customer for an online card-not-present transaction while we investigated the error they alleged. The dispute for the transaction was filed through our EFT system provider. The merchant denied the dispute based on the methods used to verify the customer at the time of initiating the transaction. The merchant provided us with a copy of the bank customer’s driver’s license as well as a “selfie” photo which the merchant requires when initiating a transaction. We recognize the selfie as being a picture of our customer. In your opinion, is the evidence of a driver’s license and selfie photo sufficient evidence to revoke the provisional credit? A: We cannot make the final decision regarding the legitimacy or not of the “error” for the bank. It does sound like the merchant’s evidence is compelling, but only the bank can determine if it is “enough” since that can depend on the bank’s risk appetite. One step you could take (if not done already) is to contact the customer with this information and see what they say. It may very well be that this will jog their memory, and they may ask to end the dispute process. If this happens (or if the bank otherwise determines that the evidence proves the correctness of the EFT transaction), debiting the provisional credit from their account would seem appropriate while complying with Regulation E requirements for notifying the customer and honoring items and preauthorized transactions initiated based on the provisional credit for five business days after notifying the customer. TILA. Q: Currently, we disclose the fee for the automobile title on an auto loan, even if we do not do the titling ourselves. Do we have to disclose the fee, or can we stop doing that? A: Regulation Z generally requires disclosing only amounts that are paid from/with a loan transaction. One exception to that is “security interest charges” (translation: filing fees). Generally, anything paid by the customer to perfect the lender’s security interest is a finance charge unless particular steps are taken. This applies whether the lender collects the fee(s) and pays them to the relevant government agency itself, a dealer collects the fee and pays it to the relevant government agency, or the customer goes directly to the government agency and pays them to file the lender’s lien. If there are security interest charges (filing fees) involved in a transaction that are required to perfect the bank’s security interest, they are a finance charge unless the fee(s) is (are) “itemized and disclosed” by the lender on/with the disclosure statement given to the borrower. The covered security interest charges are pretty broad, including any fees or taxes specified by relevant law to be paid to a government agency or premiums for insurance obtained in lieu of filing a lien (generally only in states where such insurance costs less than the governmental security interest changes). Whether the fee for the title itself is included would depend on your state’s process for issuing titles and notating liens. If a new title must be obtained to file the bank’s lien (with a fee for the title issuance), then the title fee would need to be included in the filing fees disclosure — unless the fee would be paid in a comparable cash transaction. This last criterion generally means that a title fee paid as part of an auto purchase transaction will not be included in the disclosed filing fee, while the same fee for a non-purchase transaction Q & A 18 Community Banker
would have to be included in the “filing fee” disclosure. As you can see, how this process is handled in your state impacts what needs to be disclosed as “filing fees.” Flood Insurance. Q: Can the bank use a previous flood determination if it is not more than seven years old when we do an extension with no new money added to the loan? I read that you can rely on previous determination if the Federal Emergency Management Administration (FEMA) has made no map revisions or updates. Is there a way for the bank to check if revisions or updates have been done since the flood determination was performed if it is within the seven years? Should the bank put this step into the processes when extending the loan? A: A lender may rely on a previous flood hazard determination when increasing, extending or renewing a loan on the same property. The previous determination must be no more than seven years old and meet the three following conditions: original determination was made on FEMA’s standard flood hazard determination form (SFHDF); the basis for the determination is set forth on the SFHDF; and there have been no map revisions affecting the property since the original determination. A new determination is required when either a different lender refinances or assumes the loan or when the original lender is making a new loan. So, for the extension of an existing loan you describe, you may rely on the previous flood determination (as long as it meets the previous criteria). As for determining if there have been any flood map changes, there are a couple of ways to do this. If you paid the nominal fee for life-of-loan monitoring from your flood determination vendor, they would have notified you of any changes. Of course, you can always contact them to verify that no changes have occurred. Another way to find any map changes is you can go to fema.gov to their flood map utility, input the address and see for yourself. RESPA. Q: We recently sent out annual escrow account statements, and we have a customer who paid his shortage in a lump sum. He was only $220 short, but dropped off $250 to have put into his escrow account. Based on what I’m reading in the regulation, I believe we are allowed to accept the additional funds and credit them to the escrow account. We would not be required to run a new analysis based on the overpayment, and in the event that it creates a surplus in his account, we would just have to credit him if the surplus exceeded $50 during the next annual analysis in 2026. Am I understanding this correctly? A: You are correct. There is no prohibition against the bank accepting the (slight) overpayment and that there is no requirement to perform a new escrow account analysis in this situation. You can just let it ride, so to speak, until the next annual escrow account analysis and statement. BSA. Q: I want to clarify something regarding the procedure related to a Suspicious Activity Report (SAR) filing and later receiving a subpoena. Several months ago, we filed a SAR. We just received a phone call from the U.S. Secret Service informing us that they were notified of the SAR filing through the Financial Crimes Enforcement Network (FinCEN) and are going to need copies of the documents referenced in the narrative of the SAR. The agent stated he would be sending us a subpoena for the documents but was giving us a verbal heads-up that it would be coming. Since the subpoena is coming from a law enforcement agency, do we still have to notify FinCEN? I think not but want to make sure I am not overlooking a step. A: You are correct that the bank does not need to notify FinCEN in this case — providing supporting documentation for a SAR to a law enforcement agency under a subpoena. FinCEN issued guidance on SAR filings in its release FIN-2007-G003. Of course, there is also no prohibition against the bank reaching out to FinCEN for guidance, even when notification is not required. Compliance Policies. Q: The bank does not have a separate Fair Lending Policy. We have always felt we had this covered in our Loan Policy; Unfair, Deceptive, and Abusive Acts of Practices (UDAAP); and Equal Credit Opportunity Act (ECOA) policies. Is it necessary to have a separate policy? A: There is not a specific mandate for financial institutions to have a separate fair lending policy. However, at least some examiners or agencies seem to prefer individual policies for each law/regulation. Young & Associates provides banks and thrifts with support for their compliance programs, independent reviews, and in-bank training, as well as a full menu of management consulting, loan review, IT consulting and policy systems. Community Banker 19
ICBA LIVE In March, MIB members joined thousands of other community bankers in attending ICBA LIVE in Nashville. ICBA’s annual event celebrating community banking was held at the Gaylor Opryland Resort and Convention Center. Approximately 26 Montana community bankers and their spouses battled the spring-forward time change to participate in the fantastic training and social events hosted by ICBA. Educational sessions covered topics ranging from revolutionizing the boardroom with AI to the high cost of being regulatory compliant. The general sessions featured inspirational talks by ICBA President and CEO Rebeca Romero Rainey, professional volleyball player Kerri Jennings, and founder of the Bank of Dave, Dave Fishwick. MIB hosted its annual reception for Montana attendees on the evening of March 11 in conjunction with the Missouri Independent Bankers Association. The event was widely attended, and attendees enjoyed appetizers and warm conversation with Montana friends. A number of ICBA officers and staff joined us at the reception and mixer. Special thanks go out to United Bankers’ Bank and Bancard ATM for sponsoring the MIB reception and for making it such a success. Many of MIB’s delegates said Nashville was the most impressive venue they have experienced at an ICBA convention. Next year’s national convention will be held in San Diego, another fantastic location. We look forward to seeing you there. 20 Community Banker
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