The Nebraska Independent Banker WHY ADVOCACY SHOULD BE A TOP PRIORITY IN 2025 The Case for Personalized Digital Marketing at Community Banks Too Many Vendors? Consolidate to One Trusted Partner! 2025 • Issue 1
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6 ©2025 Nebraska Independent Community Bankers (NICB) | The newsLINK Group LLC. All rights reserved. The Nebraska Independent Banker is published six times per year by The newsLINK Group LLC for NICB 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 NICB, 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. The Nebraska Independent Banker is a collective work, and as such, some articles are submitted by authors who are independent of NICB. 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. Nebraska Independent Community Bankers 1201 Lincoln Mall, Ste. 103 Lincoln, NE 68508 (402) 474-4662 nicbonline.com The Nebraska Independent Banker is a publication of The Nebraska Independent Community Bankers Association. Issue 1 • 2025 Take a Look INSIDE 14 21 NICB Executive Committee CHAIRMAN Rick Heckenlively Points West Community Bank Sidney CHAIRMAN ELECT Dave Ochsner Commercial Bank Nelson VICE CHAIRMAN Jim Niemeier Citizens State Bank Friend PRESIDENT/CEO Dexter Schrodt SECRETARY Kelly Lenners First State Bank Nebraska Pickrell TREASURER Arnold Lowell CerescoBank Ceresco IMMEDIATE PAST CHAIRMAN Corby Schweers Elkhorn Valley Bank Wayne FLOURISH 4 Striking Balance in 2025 By Rebeca Romero Rainey, President and CEO, ICBA FROM THE TOP 6 Why Advocacy Should Be a Top Priority in 2025 By Lucas White, Chairman, ICBA, President of The Fountain Trust Company 8 Banker Showcase We Want to Feature You in Our Next Issue of The Nebraska Independent Banker! PORTFOLIO MANAGEMENT 10 Will the Wave Return? Falling Rates Should Boost Cash Flows By Jim Reber, CPA, CFA, President and CEO, ICBA Securities 13 ICBA Live 14 The Case for Personalized Digital Marketing at Community Banks By Hannah Day, Senior Director of Digital Banking, CSI 18 Setting the Stage for Success in 2025 A Call to Community Bankers By Connie West, Gallup Certified Strengths Coach, Regional Vice President, The James Paul Group 21 Too Many Vendors? Consolidate to One Trusted Partner! By Cook Solutions Group 25 Tapping Into SBA Refinancing Lower Rates, More Opportunities By Jessica Stutz, Lending Director, B:Side Capital 27 NICB Endorsed Partners 27 Associate Members 2025
FLOURISH REBECA ROMERO RAINEY, President and CEO, ICBA STRIKING BALANCE IN 2025 4 NEBRASKA INDEPENDENT BANKER
The start of a new year brings with it opportunities, and as we enter 2025, we do so with an eye toward the potential that awaits. For years, we’ve been seeking balance across a number of areas, encouraging regulators and legislators to initiate more proportionate rulemaking, embracing innovation for our banks to become nimbler and more efficient, and engaging in education to expand our knowledge in today’s banking environment. This year, we’ll see results through focused strategy and hard work. Leading With Advocacy Without a doubt, advocacy serves as the most critical piece of our mission in 2025. With a shift in control in Congress and the White House, our focus will be on regulatory relief and proportionate rulemaking. We want to amplify the impact of community banks at the local level and champion issues ranging from rethinking the de novo framework to seeking regulatory relief on Dodd-Frank Act Sections 1071 and 1033 and beyond. Our messages this year center on both right-sizing regulation and demonstrating the community bank difference. We’re moving from a defensive position of responding to thousands of pages of new regulation to an offensive one where we can be proactive and speak to community-friendly and community bank-forward rulemaking. We have the opportunity to instigate a more balanced approach to regulation, supporting a vision that considers effects on consumers in the context of the ability to do business. This balanced approach is critical for industry viability moving forward. The moment is now to effect real change. But the reality is that there are a lot of pressing needs with policymakers as the year begins, so it’s our job to ensure that our issues are prioritized and our voices are heard. Growing With Innovation and Education Of course, while we are speaking up for the interests of our communities and our banks, we also need to continue growing as businesses and adapting to a changing industry. From new fintech innovations to a better understanding of the risk and compliance requirements of today’s environment, ICBA Innovation and ICBA Education stand ready to ensure you have the information you need to advance your business plans this year. It’s with that in mind that I encourage you to join us at ICBA LIVE, taking place March 11-14 in Nashville, Tennessee. There, you can explore what’s next on our advocacy agenda, how our innovation programs can support your bank, and what you and your team need to know to be the change you seek in 2025. This year is about recommitting to ICBA’s pillars of advocacy, innovation and education and embracing the potential that awaits. I, for one, am feeling very optimistic. Where I’ll Be This Month We will be hosting state association colleagues at our Innovation Center in Atlanta, and I’ll be making a trip to Minnesota to visit the ICBA team there. NEBRASKA INDEPENDENT BANKER 5
The start of the new year brings with it a fresh slate and a collective reset on priorities. As we develop annual objectives, we need to be mindful of what is transpiring within our banks, but also what is transforming the industry around us and how we can effect positive change. That’s why advocacy must be a priority this year. Setting National Priorities ICBA is nonpartisan and has a long history of working with both sides of the aisle, and we have a new administration and elected officials who need to fully understand the community bank difference. Our voices need to be heard on a wide range of issues, including Section 1071 of the Dodd-Frank Act, the Secure and Fair Enforcement (SAFE) Banking Act, the Access to Credit for our Rural Economy (ACRE) Act and more. In addition, with FROM THE TOP WHY ADVOCACY SHOULD BE A TOP PRIORITY IN 2025 LUCAS WHITE, Chairman, ICBA, President of The Fountain Trust Company the Tax Cuts and Jobs Act of 2017 set to expire at the end of 2025, it’s going to be a big year to discuss taxes — and, with them, credit union disparities. The odds are in our favor: Following a significant election year, Congress is fired up to get new legislation on the table. This is our opportunity to drive home the importance of the high-tech, high-touch community banking model. It’s our chance to demonstrate how community banks prioritize a legislative and regulatory environment that keeps the banking system safe and sound, creates a level playing field in financial services and allows for the flexibility necessary to serve the distinct interests of communities across the nation. 6 NEBRASKA INDEPENDENT BANKER
My Top 3 In addition to remaining a vocal advocate for community banking, here are my three New Year’s resolutions for 2025: 1. Spend more time at home, in my bank and with my community. 2. Be more present with my kids. 3. Continue running for health. The Power of the Collective But it takes the power of this entire community to amplify those messages and bring them to life. Members of Congress need to hear specific examples from their constituents about how community banks meet their districts’ needs. Members of Congress need more than platitudes and big-picture ideas; they need to understand how what we do every day makes a difference in their constituents’ lives and strengthens their communities. In short, they need to hear our stories. So, as you set your intentions for 2025, I hope that one of them is to attend ICBA’s Capital Summit (icba.org/capital-summit), slated for May 12-15 in Washington, D.C. Mark your calendars now to join your colleagues in raising your voice for community banking. This will be a pivotal year for us, where collectively, we will make a difference. Now’s the time to make sure advocating for community banks is among your top priorities. NEBRASKA INDEPENDENT BANKER 7
BANKER SHOWCASE We Want to Feature You in Our Next Issue of The Nebraska Independent Banker! » To be featured, please email Dexter at dexter@nicbonline.com. The Banker Showcase shines a light on those employees that make a difference.
| Bank Stock Loans | Loan Participations | ATM/Debit | International Services | | Cash Management | Securities Safekeeping | Merchant Services | 800-873-4722 | NE: 888-467-5544 | www.bbwest.com Where community banks bank Est. 1980 – 40+ years of service to community banks “As a service provider exclusively focused on community banks, Bankers’ Bank of the West is here to help strengthen our clients and the communities they serve.” Across the western states and Great Plains, we’re the place where community banks bank. That’s because we provide the services, technology, and expertise to help you extend your resources, deliver for your customers, and stand out in your market. 5 reasons to partner with us BBW - President and CEO - Bill Mitchell You can unlock efficiencies and cost savings. We can provide sophisticated solutions and economies of scale because we’re powered by hundreds of community banks across our region. Our priorities are aligned with yours. You can expand your capabilities. We’ll never compete for your customers. You can count on prompt, reliable service. • Independent loan review • Loan and credit administration consultation • Strategic planning facilitation • Management, staffing, & succession planning • Acquisition & expansion • BSA/AML compliance • Regulatory risk consultation President, Jim Swanson President, Anne Benigsen • Consulting • Phishing Tests • Vulnerability Management • Security Monitoring Cyber/information security, strategic planning, independent loan review, AND MORE. Consulting Services $ 8.6B assets under management $ 1.9B daily transaction value processed/settled Serving more than 60% of community banks across 7 states
PORTFOLIO MANAGEMENT JIM REBER, CPA, CFA, President and CEO, ICBA Securities Falling Rates Should Boost Cash Flows Remember “the wave?” It’s that spontaneous yet somewhat choreographed activity by sports fans in stadiums to ramp up the enthusiasm level. The most succinct description I can find is from Wikipedia: “The wave … is a type of metachronal rhythm achieved in a packed stadium or other large seated venue, when successive groups of spectators briefly stand and raise their arms. Immediately upon stretching to full height, the spectator returns to the usual seated position.” So, there you go. And don’t expect to see “metachronal” in this column ever again. Before you turn the page, I promise that the wave is relevant to community bank portfolio management. 10 NEBRASKA INDEPENDENT BANKER
Flash back to 2020 at the onset of COVID-19, when the central banks attempted to stave off the impending economic collapse. “Cut interest rates to zero and motivate the consumer to consume,” went the reasoning, “and maybe we will limp our way through until we can get back outside.” Didn’t See It Coming The result of the aggressive monetary action was, of course, a tsunami of liquidity being dumped on community banks. This was aggravated by the phenomenon known as “flight to quality,” as depositors everywhere sought sanctuaries to park their savings, and there was no better place to do so than community banks. However, a lot of the cash was organically generated. Most of the bonds owned by banks have either an implicit or explicit call feature, which means borrowers (bond issuers) can pay them back early if rates fall after issuance. Although it’s not widely remembered, at the onset of the pandemic, we were still in a pretty low-rate environment. Fed funds, for example, were never higher than 2.50% in the entire previous decade and were just 1.75% at the start of 2020. The totality of the rate cuts was only 150 basis points (1.50%), so most portfolio managers could be forgiven for thinking their investments were well insulated against falling rates and the attendant call risk. Across The Curve Those assumptions might have been valid had the Fed stopped at cutting just overnight rates. It also bought a ton of bonds in the open market, primarily treasury securities and mortgage-backed securities (MBS), pushing down yields to near-record lows across the maturity spectrum. As we know, borrowers will refinance their debt when it makes economic sense to do so. In short order, the call notices started rolling in virtually every business day for several years. For an example of the ferocity of the prepayment push, let’s look at one MBS cohort. In 2019, there was around $328 billion of 30-year FNMA 3.0% pools issued. The average borrowers’ rate (gross WAC) was 3.87%, which is a bargain in 2024. However, within a year of the 2019 issuance, mortgage rates had fallen enough for even these seemingly low-rate loans to start converting. By the time they were two years old, more than half of the entire cohort was gone. Extrapolating that over an entire community bank bond portfolio, including its callable agency, corporate and municipal bonds, we can see why the entire collection possibly turned over several times in 2020 and 2021. Here We Go And now we begin the much-anticipated easing phase of the interest rate cycle. While the speed and extent of the rate cuts will ultimately determine how much cash flow is unleashed from your community bank’s collection of investments, there are some factors that will make 2025 and beyond different from 2020 — not the least of which is that banks had more liquidity on hand five years ago, so an initial dose of calls and prepayments will be welcome to most community bank balance sheets. Also, while today’s portfolios yield a bit more than they did five years ago, their NEBRASKA INDEPENDENT BANKER 11
800.228.2581 MHM.INC Now more than ever people want self-service options. With our core integrated ITMs we can make this a reality both in the lobby and in the drive-up of your branch. SELF-SERVICE BANKING durations are much higher (4.3 years versus 2.9). This means that the flood of cash may take longer to materialize than in 2020. On the plus side, since today’s portfolios are still on balance and underwater by about 6%, there’s room for them to appreciate in value if they have any staying power. One final thought: Through September 2024, the year-to-date volume of calls being exercised on agency bonds totaled $300 billion, compared with $330 billion through the first nine months of 2020. This speaks to the “higher-for-longer” rate cycle just concluded. It also suggests that portfolio managers should have some sandbags ready in the form of call protection to guard against any incoming waves of cash flow. Jim Reber, CPA, CFA, (jreber@icbasecurities.com) is president and CEO of ICBA Securities, ICBA’s institutional, fixed-income broker-dealer for community banks. Portfolio managers should have some sandbags ready in the form of call protection to guard against any incoming waves of cash flow. EDUCATION ON TAP Thanks to ICBA Affiliates for Your 2024 Support ICBA Securities and its exclusive broker-dealer Stifel participated in education events for 28 ICBA state affiliates this year, which is the most in our history. We are grateful for the relationships and look forward to more collaboration in 2025. ICBA LIVE 2025 ICBA Securities and Stifel will again be active at ICBA LIVE in Nashville, Tennessee, from March 11 to 14. We will host several Learning Labs and be visible at the Expo. Several Stifel strategists will be on hand to meet with management teams and discuss balance sheet and income opportunities. To register, visit icba.org/live. 12 NEBRASKA INDEPENDENT BANKER
RHYTHM. AMPLIFIED. Together, community bankers amplify the power and successes of our industry at the largest annual gathering of community bankers—ICBA LIVE 2025. Plug into a wide range of educational offerings to boost your knowledge and bring it back to your bank. Synchronize with fellow community bankers and industry experts on the latest industry trends and innovations. Celebrate the unique rhythm of our industry through energizing and inspiring general sessions and unparalleled networking events. Register today at icba.org/live March 11–14, 2025 Gaylord Opryland Resort & Convention Center NASHVILLE
THE CASE FOR PERSONALIZED DIGITAL MARKETING AT COMMUNITY BANKS Today’s consumers expect a seamless, personalized digital experience, especially with their financial institution. As institutions look to grow, a one-size-fits-all approach to digital marketing is not as effective as data-driven strategies to personalize and resonate with customers on their chosen channel. Using data to develop personalized marketing initiatives on digital channels can help community banks break through the noise, reaching new customers and deepening relationships with existing ones. Understanding Your Customers: The Importance of Effective Segmentation Understanding customer data and demographics is the first step in elevating your digital experience. At the most basic segmentation level, institutions should be able to differentiate between business and consumer customers. Each of these groups will have different messaging and product offerings. On the consumer side, various segments could benefit your institution, such as high-net-worth individuals, recent graduates or those close to retirement. Viewing your customers in segments allows you to better understand and anticipate their needs, as well as tailor what they see across their digital experience. Examples of segments include: • Life Stages: Certain life stages typically involve financial activity, and clues in a consumer’s financial data can indicate which common life stage or event could come next. For instance, a recently married couple has different financial needs or goals than one approaching retirement. If a customer recently had a series of wedding-related purchases and a last name change, there may be an opportunity to offer specific services or products more relevant to that life stage. • Credit Score: Surfacing an end user’s credit score within the digital experience is one of many powerful By HANNAH DAY, Senior Director of Digital Banking, CSI 14 NEBRASKA INDEPENDENT BANKER
insights that data can bring to your customer base. Financial institutions could choose to direct educational content toward a group with a lower-than-average score. This approach allows you to determine types of products to market to this group that would increase their financial literacy and education. This segmented approach holds for business customers as well. Your institution could look at transactions for small businesses to determine the health and maturity of the company, providing you with insight into ways you can NEBRASKA INDEPENDENT BANKER 15
support them in their business journey. Whether they’re a startup, ‘mom-and-pop shop’ or mid-sized organization, they will need solutions that address their unique needs. Five Tools Community Banks Can Use for a Holistic Marketing Strategy The following are several channels to continue to explore as you nurture customers throughout their life cycle and reduce attrition: 1. Digital Banking Digital banking should be consistent across every channel. If a user logs into their account on a desktop, your bank can serve them with a personalized pop-up ad based on their segment or past transaction history. Your institution can communicate with calls to action and drive adoption through custom text, secure digital messaging and push notifications. 2. Customer Data Management (CRM) An effective CRM platform should provide a holistic customer view by linking sales, operations, branch, digital and call center interactions to support marketing opportunities. Your CRM should also allow you to schedule appointments, send notifications, release targeted emails or marketing campaigns and more. Updating your CRM with regular documentation like contact information, credit scores and marketing preferences can open the door to building personal connections and cross-sales opportunities. 3. Email Campaigns Often linked with CRM, email is another tool to help your institution communicate with customers. While some customers prefer in-person interactions, others may prefer receiving emails. Targeted marketing emails can be an effective way to reach customers with relevant offers. 4. Customer Service Tools Customer service tools like digital banking messaging and text, voice and video communication help bridge the gap between physical and digital channels. Chatbots can also be embedded in the digital banking experience to address customers’ immediate questions or needs and suggest related products or services. Authenticated chat can be managed by your institution’s employees or trained on preliminary conversations to expedite assistance. 5. In-Branch Experience Although most customers are comfortable navigating digital channels, some customers still prefer the branch for certain financial activities. So, your customer experience should seamlessly flow from the digital world to the physical one and vice versa. If someone begins a loan application online, the in-branch representative should be able to help them pick up right where they left off. Bridging the Digital Divide: Finding Ways to Reach Your Customers The placement of marketing initiatives also varies within the digital experience. Some users — such as Gen Zers or millennials — may be more likely to use and engage with ads within the digital banking experience versus an email from your institution. Having flexibility within your digital experience to personalize the messages and locations based on your segment is critical. Community banks have always played a unique role locally and are well suited to take advantage of nontraditional methods to meet new customers. For example, in areas offering attractive outdoor adventures like hiking trails, some banks set up small booths to pass out water bottles or breakfast burritos emblazoned with a QR code to their website, blending physical and digital outreach. Ultimately, banks that blend these tactics, leaning into customer segmentation while meeting them in the channel of their choosing with campaigns targeted to their needs, will strengthen the relationship and trust with their customers. 16 NEBRASKA INDEPENDENT BANKER
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 Stifel 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 Member FINRA/SIPC
SETTING THE STAGE FOR SUCCESS IN 2025 A Call to Community Bankers By CONNIE WEST, Gallup Certified Strengths Coach, Regional Vice President, The James Paul Group Community banking has always been more than just managing transactions — it is about building relationships, fostering trust and empowering the communities we serve. In 2025, as the financial landscape continues to evolve rapidly, the ability to plan strategically and align with both community needs and industry trends is critical for success. 1. Deepen Local Impact: At the heart of every community bank is the community itself. The relationships built with local businesses, families and individuals are what set community banks apart from larger financial institutions. To deepen this connection and make an even greater impact, consider: A. Adding additional support to local businesses, such as tailored lending programs, financial planning resources and mentorship opportunities. B. Offering financial literacy workshops on topics like budgeting, saving and managing credit can empower individuals and families to achieve their financial goals. C. Collaborating with local nonprofits, schools and civic organizations can amplify impact. This might be partnering on projects such as affordable housing initiatives or scholarships for local students. 2. Drive Innovation Thoughtfully: The financial services industry is undergoing a digital transformation, and community banks are no exception. However, the challenge lies in adopting innovative technologies without compromising the personalized service that defines community banking. For 2025, consider the following strategies: A. Enhancing digital solutions can improve customer convenience, but make sure to refine these services to meet real needs. 18 NEBRASKA INDEPENDENT BANKER
B. Allocating resources for ongoing training, system upgrades and partnerships with cybersecurity experts to stay ahead of emerging threats. C. Making sure live contact is an option; The human touch remains irreplaceable. 3. Empower Your Team: No goal can be achieved without a motivated, skilled and aligned team. Investing in your workforce is not only beneficial for employees but also directly impacts customer satisfaction and overall organizational success. Consider the following: A. Each team member brings unique skills and talents to the table. CliftonStrengths can identify these strengths. B. Provide professional development. Continuous learning opportunities signal to employees that their growth matters. Consider offering training programs, leadership development courses and mentorship opportunities. C. A culture of open communication and shared accountability can transform how teams work together. Building trust within the team translates to better service for customers. Measuring Success As you set these goals, establish clear metrics to measure progress. Success in 2025 will not be defined solely by financial outcomes but by the relationships built, the innovations implemented and the communities uplifted. Regularly reviewing these metrics allows for adjustments and ensures alignment with the bank’s mission and vision. Looking Ahead to 2025 Community banks are more than financial institutions; they are community builders. In 2025, let’s continue to embrace this identity and take bold steps forward. Whether through deepened local impact, thoughtful innovation or team empowerment, the work we do today will set the foundation for stronger, more vibrant communities tomorrow. For help in 2025, contact Connie West at The James Paul Group by emailing her at cwest@jamespaulgroup.com or calling her at (877) 584-6468. NEBRASKA INDEPENDENT BANKER 19 100 South Phillips Avenue, Sioux Falls (605) 335-5112 - Teresa Thill advantage-network.com MORE OPTIONS FOR YOUR CARDHOLDERS When you source your debit card production with The Advantage Network, you’ll have access to cutting-edge technology, quick turnaround times, and our high-touch customer service. Because your cardholders deserve the best, and so do you. • Instant Issuance • Contactless cards • Customize Your Card program • Surcharge-free ATMs worldwide Visit our website to learn more, or reach out to me and let’s start a conversation.
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CONSOLIDATE TO ONE TRUSTED PARTNER! By COOK SOLUTIONS GROUP Discover how too many vendors impact your financial institution or business. Boost efficiency by partnering with a single trusted vendor for streamlined risk management and simplified processes. Here are three main reasons to consolidate to one secure service partner: 1. Efficiency: One quality vendor for everything means one phone number, one email address and one secure online interface to manage all your equipment and services. 2. Security Integration: When your security can integrate with your ATM Fleet, the solutions are endless. 3. Savings: Bundling typically saves time and money, which can translate to thousands of dollars over time. How Many Vendors Do You Manage, and Does Your Bank Feel the Pain? Having too many vendors impacts profits and budgets and prevents efficiency. Plus, managing an overload of different vendors can be exhausting, labor intensive and a time suck. Having too many vendors can lead to several operational, financial and strategic challenges for an organization, including: 1. Increased Complexity: Managing multiple vendors means coordinating with various contracts, performance metrics and communication channels. This can complicate procurement, logistics and operations, leading to inefficiencies. 2. Higher Administrative Costs: Each vendor relationship requires time and resources for management, including contract negotiation, invoicing and vendor performance tracking. More vendors mean more resources are needed to handle these processes, which can drive up administrative costs. 3. Fragmented Communication: With many vendors involved, there’s a greater risk of communication breakdowns, especially if information is siloed across different vendors. This can result in delays, misunderstandings and inconsistent service quality. 4. Security and Compliance Risks: Every vendor relationship can potentially expose the organization to security and compliance risks. Each additional vendor increases the number of access points to sensitive data and operations, heightening the risk of breaches or regulatory noncompliance. 5. Loss of Bargaining Power: With spending spread across many vendors, the organization may lose the leverage that comes from consolidating purchases with fewer providers. This can lead to less favorable pricing and terms. 6. Reduced Strategic Focus: A multitude of vendors may distract from the organization’s core goals. Decision-makers might spend more time managing vendors rather than focusing on strategic growth initiatives or customer needs. 7. Quality Control Challenges: Ensuring consistent quality becomes harder with more vendors, as they may vary in standards, reliability and expertise. Inconsistent quality TOO MANY VENDORS? NEBRASKA INDEPENDENT BANKER 21
Vendor due diligence is extremely important, especially with today’s cybersecurity risk landscape. can lead to customer dissatisfaction or disruptions in service delivery. Organizations often benefit from finding an optimal balance of vendors and offerings. This approach allows for better control, streamlined processes and often more strategic partnerships. Why Should Your Bank Consider Consolidating to One Vendor? Using a single vendor can bring several key advantages to an organization, especially in terms of simplicity, cost-effectiveness and strategic alignment. Here are some of the main benefits: 1. Simplified Management: Working with one vendor streamlines communication, billing, performance tracking and contract management. This reduces administrative workload, saving time and resources. 2. Cost Savings: Concentrating purchases with one vendor often enables bulk discounts, volume-based pricing or loyalty incentives. Additionally, it reduces hidden costs related to managing multiple vendor relationships, like contract negotiations and vendor onboarding. 3. Enhanced Vendor Relationship: A single-vendor relationship allows for deeper collaboration and stronger partnership-building. The vendor may be more invested in understanding and meeting your organization’s specific needs, leading to more tailored services and support. 4. Improved Quality and Consistency: With one vendor, there’s more consistency in product or service quality, 22 NEBRASKA INDEPENDENT BANKER
as standards don’t vary across multiple providers. This reduces the likelihood of disruptions and helps maintain a consistent brand experience for customers. 5. Better Accountability: When one vendor is responsible for delivering services or products, it’s easier to hold them accountable. There’s no ambiguity about who’s responsible for an issue so that problems can be resolved more efficiently. 6. Streamlined Technology and Integration: Many vendors offer integrated solutions that work seamlessly within their ecosystem, eliminating compatibility issues and simplifying troubleshooting. This is particularly valuable in areas like software, where different systems need to communicate effectively. 7. Increased Agility: Decision-making and issue resolution are often faster when working with one vendor, as there are fewer dependencies and less complexity. This agility can be crucial in industries that require quick adaptations or responses to market changes. 8. Stronger Data Security and Compliance: Managing data security, privacy and compliance requirements is often simpler with one trusted vendor, reducing the risk of breaches associated with multiple access points or varying compliance practices. However, make sure the single vendor is a trusted partner. Balancing these factors carefully can maximize the benefits of single-vendor relationships while mitigating potential downsides. Vendor due diligence is extremely important, especially with today’s cybersecurity risk landscape. Many vendors are not vetted correctly, don’t comply with federal regulations and do not hold the proper licenses or security certifications. Have you performed vendor due diligence lately? The following are three primary areas to consider when performing vendor due diligence: 1. Trusted Partner Values That Match Your Institution’s • Deep understanding of the financial institution’s culture and expectations. • Provide training in technology trends and product research and development. • Knowledge of financial institution’s compliance requirements, risk landscape and industry standards. • Quarterly service level reporting and preventative maintenance tracking. • Effective management of subcontractors. • Provide equipment tracking and budgeting support and five-year technology road-map development. 2. Risk Compliance and Legal Certifications Are Non-Negotiable • Soc 2 Type 2 certification reports are an industry standard. • Proof of insurance and liability, including a minimum of $5 million. • Laptops and devices are audited, secured and encrypted. • Employee and subcontractor background checks and drug testing. • Business continuity plan (i.e., effective work-from-home policies and pandemic protection strategies). • Industry experts with professional certifications on staff. • Compliance with all federal, state and technical industry certification requirements. 3. Innovative Automation and Secure Remote Technologies to Future-Proof Efficiency • Multiple non-proprietary solutions representing different brands. • Open architecture with integration capability and encryption. • Solution targeting customer pain points. • Platform creep reduction strategies (reducing the number of at-risk platforms/systems). • Performance and efficiency improvements. • FTE efficiency or reduction through technology or managed services. • Technology migration and conversion experts. • Guide the implementation of AI and analytics. If you find yourself with too many vendors even after performing vendor due diligence, one way to ensure you are receiving superior service but still provide an exit strategy is negotiating an all-inclusive service agreement with a 30-day out no penalty clause. This can provide the firm SLAs your institution requires for service and the flexibility to switch providers if necessary. Essentially, this is like having no contracts but still having an SLA to lay everything out. This also requires the vendor to earn your trust daily by providing extraordinary service both physically onsite and remotely, using managed services and providing a seamless, secure online interface. NEBRASKA INDEPENDENT BANKER 23
BOK Financial® and We go above. So you can go beyond.® are trademarks of BOKF, NA. Member FDIC. Bank dealer services offered through BOK Financial Capital Markets, which operates as a separately identifiable department of BOKF, NA. BOKF, NA is the bank subsidiary of BOK Financial Corporation. Investment products are: NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE We go above. So you can go beyond. Seeking a fresh perspective on your interest rate risk and balance sheet management? As a community banker, your time is valuable. With mounting margin pressures, maximizing earnings from your investment portfolio is crucial. Our unique approach integrates portfolio management within the overall interest rate risk position, optimizing balance sheet performance. At BOK Financial Capital Markets, we help you navigate regulatory requirements with a comprehensive, cost-efficient, tailored solution to enhance your institution’s performance by engaging your management team to formulate ideas and execute strategies that drive results. Budgeting Profit projections ALCO Capital planning Decay/beta analysis Regulatory compliance Investment portfolio Investment mix Interest rate risk Loan pricing Board education Liquidity stress testing Brokered funding SCAN TO LEARN MORE OR VISIT BOKFINANCIAL.COM/INSTITUTIONS
TAPPING INTO SBA REFINANCING Lower Rates, More Opportunities By JESSICA STUTZ, Lending Director, B:Side Capital Helping borrowers secure lower interest rates on their owner-occupied commercial real estate isn’t just good business — it’s a game-changer for their financial health and your lending portfolio. The SBA 504 refinance programs empower you to provide clients with long-term, fixed-rate solutions while generating new lending opportunities. It’s a win-win for everyone involved. What is the SBA 504 Refinance Program? The SBA 504 refinance options are part of the U.S. Small Business Administration’s 504 loan program, designed to assist small businesses with fixed-rate financing for major fixed assets. The two refinance programs, 504 Refinance and 504 Refinance with Expansion, allow owners to refinance existing commercial real estate loans and realize improved cash flow as a result. Key Benefits 1. Low Interest Rates: The 504 program offers long-term fixed interest rates, typically lower than conventional loans. 2. Cash-Out Option: Borrowers can refinance eligible commercial real estate debt and get cash out for business expenses such as payroll and utilities, pay off a business line of credit or credit card, and refinance other eligible debts secured by the commercial property. 3. Extended Terms: With terms up to 25 years, monthly payments become more manageable, improving cash flow. NEBRASKA INDEPENDENT BANKER 25
4. Loan-to-Value (LTV): The program allows up to 90% LTV for refinancing, helping businesses retain equity while reducing financial burdens. 5. Refinance Existing SBA Debt: The refinance options allow for the refinance of existing 504 or 7(a) debts under certain conditions. Eligibility Criteria The operating business does need to meet general SBA requirements. A few key requirements include ensuring it is a for-profit business located in the United States and meets SBA’s small business size standard. (The tangible net worth should not exceed $20 million and the two-year average net income should not exceed $6.5 million.) Also, each SBA 504 loan financing or refinancing commercial real estate must be 51% or more occupied by the borrowing operating business. In addition, there are some requirements specific to a 504 refinance project. Additional Refinance Requirements • At least 75% of the proceeds of the debts to be refinanced must have been used for 504 eligible purposes, such as purchasing or constructing owner-occupied commercial real estate. • 100% of the debt to be refinanced must have been for the benefit of the operating business, not any other affiliated business or individual. 504 Refinance This program provides a business with the opportunity to refinance existing commercial real estate debt meeting the 75% test, as well as cash out on some of the equity existing in the property. This can include refinancing existing SBA 504 or 7(a) debt as long as a lowered payment will be achieved. The LTV can now go up to 90% without any cap on the amount of cash out for eligible business expenses (EBE). The cash out for EBE can include funds for business operating expenses such as employee salaries, utilities and marketing expenses, as well as pay off existing business credit cards or lines of credit. A recent improvement is that the EBE can also include the payoff of debts secured by the commercial property but used for business operating expenses and not meeting the 75% test. Key Points • Debt refinance with cash out, up to 90% LTV. • The operating business needs to have been operating and generating revenue for two or more years and project debt service coverage. • Commercial real estate debt being refinanced needs to be on permanent terms and in place for at least six months. • Cash out can’t fund any equipment purchase, property renovation/construction or fund any business acquisition. It’s limited to funding business-operating expenses or debts used for business-operating expenses. • Generally, on-time payments for debts proposed for refinancing 504. Refinance with Expansion This program provides a business the opportunity to refinance existing commercial real estate debt meeting the 75% test, and utilize the existing equity to help fund a planned expansion. The total loan to value can go up to 90% but may be lower if the business has less than two years of operating history or the property has limited use. The refinance amount is capped at the amount equal to the expansion dollars. For example, if a business needs $1 million to fund an addition to its existing commercial property, it can refinance up to $1 million in existing commercial real estate debt. A lowered payment on the refinanced portion must be achieved as a result of the refinance if the existing debt isn’t structured with a demand or balloon feature. Key Points • Expansion funding with the ability to refinance existing debt, up to 90% LTV. • There isn’t any minimum length of time the operating business has generated revenue, but it needs to demonstrate the ability to expand and project debt service coverage. • No cash-out option available. • Debts proposed for refinancing must have 12 months or more of on-time payments. Why Bankers Should Leverage the SBA 504 Refinance Program This program isn’t just a refinancing tool — it’s an opportunity to strengthen client relationships and grow your portfolio: • Deliver Tangible Value: Help your borrowers secure lower rates, reduce monthly payments and unlock cash flow for reinvestment, demonstrating your commitment to their success. • Enhance Client Retention: Providing solutions like SBA 504 refinancing sets you apart as a trusted advisor, fostering long-term loyalty. • Boost Portfolio Performance: Offering fixed-rate, long-term financing benefits not only your borrowers, but also your institution’s stability and growth. The SBA 504 refinance program is a powerful tool for small businesses to reduce costs and fuel growth. If you’re seeking a pathway to financial stability and expansion, consider exploring this option with a Certified Development Company (CDC). 26 NEBRASKA INDEPENDENT BANKER
NICB ENDORSED PARTNERS Bankers Compliance Consulting — Dave Dickenson Barret Graduate School of Banking — Memphis, Tennessee Community Bankers Webinar Network — Financial Ed Dell Computers ICBA Securities — Jim Reber ICBA Bancard NICB-CBAK Liquidity Program SHAZAM — presented last year at Area Meetings Spectrum Financial — Fee Income with Credit Insurance Products/ Services, Identity Theft Program, Flood Determinations — Scott Votava Travelers Insurance UNICO Group — Diana Poquette ASSOCIATE MEMBERS 2025 The Advantage Network BancMac Bankers’ Bank of the West Bankers Compliance Consulting Bankers Healthcare Group Barret Graduate School of Banking Bell Banks BKD LLP John E. Cederberg, CPA Central States Health & Life Co. CivITas Bank Solutions Computer Services Inc. (CSI) Cross Financial D.A. Davidson & Co. FIPCO — Compliance Federal Reserve Bank of K.C. (complimentary) FHLBank Topeka FNB Omaha Correspondent Banking FIPCO First National Capital Markets FPS Gold (Core) ICBA Bancard & TCM Bank ICBA ICBA Securities ITPAC Consulting LLC (IT audits) Kirk Gross Company Labenz & Assoc. LLC (CPAs) Maple Street Inc. Midwest Independent BankersBank Modern Banking Systems Money Handling Machines Inc. NFP Executive Benefits Perry, Guthery, Haase & Gessford PC LLO Purple Wave Auction QwickRate RESULTS Technology Scantron Technology Solutions SHAZAM Spectrum Financial Taylor and Martin Appraisal Services Travelers Companies Inc. UMB Bank N.A. UNICO Group United Bankers’ Bank NEBRASKA INDEPENDENT BANKER 27 Enjoy your association news anytime, anywhere. Scan the QR code to visit our online publication to stay up to date on the latest association news, share articles and read past issues. nebraska-independentbanker.thenewslinkgroup.org
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