Pub. 8 2020 Issue 4

6 The Community Banker www.mibonline.org Q&A WITH FHLB MEMBER DIRECTOR JOE KESLER You have been a Montana community banker for many years. Tell us about your industry background, how you got into banking, and what Montana’s community bankers may not know about you. Thank you, Jim, for this opportunity to share a little about myself, so the Montana member banks know something about who is representing them on the FHLB. I started my banking career in Illinois with the OCC in 1978, but I quickly realized I wasn’t cut out to be a regulator for the next 40 years! I needed a profit and loss scorecard to know if I was winning or losing. I didn’t want to just be looking over some banker’s shoulder all day trying to catch a mistake, although I did appreciate the training it offered. I was fortunate to get my first CEO job for a community bank in 1991 in a university town in southern Illinois. It was fulfilling in every way. We went from a bottom quartile bank to a top quartile high-performance bank very quickly. But in addition to the financial perfor- mance, I got hooked on the virtuous impact a community bank can have when everyone from the board on down knows we exist to help the community flourish. That chapter of my career ended with a bang when our success captured the eyes of acquisition-minded banks in 1999. It was dif- ficult to sell a bank that was doing so well by almost every measure, but we received some offers in the 4x book range that were difficult to turn down from a fiduciary point of view. Our investment banker’s fairness opinion stated that the bank sold for the highest mul- tiples in the history of the state of Illinois. I stayed with the acquiring bank for a few years, but I deeply missed being in a communi- ty bank and having the chance to lead as a CEO. When I saw an opportunity advertised in the Wall Street Journal for a CEO position with First Montana Bank, I was smitten with the job and the prospect of living in Montana. After being offered the job, my wife and I, along with four shell-shocked kids, moved to Montana in 2005. There were many wonderful similarities between running a bank in Illinois compared to Montana. I found the same independent spirit, dedication to serving a local com- munity and great talent on both the board and management team. However, it hadn’t dawned on me how challenging it would be to run a bank of about 250 million spread over 450 miles in seven different commu- nities. That lack of population gave me a great respect for Montana’s bankers, who overcome the inefficiencies that come with a lack of population. But, believe me, it was much more delightful traveling those miles in Montana through our mountain scenery than the shorter branch trips I took through the cornfields of Illinois! In 2018, after 40 years in banking, I felt great about the deep bench strength at First Mon- tana and felt the time was right to step out of the CEO position. However, I’ve stayed active as a consultant and outside board member at First Montana Bank. I also enjoy writing these days on various topics, but I have a particular interest in exploring how to connect our per- sonal finances to a purposeful life. You are presently the Montana Member Director for the FHLB Des Moines. When did you take on that role and how long is your term? The timing of the FHLB board seat op- portunity was perfect for me. I left my CEO position in February of 2018 and was appoint- ed to serve out the unexpired term of Mick Blodnick in March of 2018. I was then elected to a new four-year term last year that will run through the end of 2023, when I hope to earn another four years. What are the top goals for the FHLB Des Moines? What is the home loan bank working on or toward? FHLB’s top goal is to be a reliable source of liquidity for community financial institutions. Since the Great Depression, when the FHLB system was created, our cooperative has always been there when liquidity markets tightened. We shined particularly well in the 2008 financial crisis when many markets began to freeze up. Because community banks don’t have the sources of liquidity large megabanks have, I find myself passion- ate about this goal because it is a key to the business model of those community banks that desire to remain independent. Affordable housing support is the other cornerstone of what FHLBs offer. Montana banks and grants widely use the HomeStart Featured Article Interview by MIB Executive Director Jim Brown