PUB 21 ISSUE 3 PUBLISHED BY NEW MEXICO BANKERS ASSOCIATION, FOUNDED IN 1906 PHOTO BY: JIM RENFROW Introducing 2024‑25 NMBA President Kyle Beasley Page 4 How to Create and Maintain an Effective Internship Program By John W. Anderson Page 6 America’s Endless Election Cycles By Mark Anderson Page 15
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OVER A CENTURY: BUILDING BETTER BANKS — HELPING NEW MEXICO REALIZE DREAMS The mission of the New Mexico Bankers Association (NMBA) is to serve member bank needs by acting as New Mexico banking’s representative to government, the public and the industry; providing resources, education and information to enhance the opportunities for success in banking; promoting unity within the industry on common issues; and seeking to improve the regulatory climate to the end that banks can profitably compete in the providing of financial and related products and services. ©2024 The New Mexico Bankers Association (NMBA) | The newsLINK Group LLC. All rights reserved. The New Mexico Bankers Digest is published four times each year by The newsLINK Group LLC for NMBA 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 the NMBA, 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 New Mexico Bankers Digest is a collective work, and as such, some articles are submitted by authors who are independent of NMBA. While the New Mexico Bankers Digest encourages a first-print policy, 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. 4 Introducing 2024‑25 NMBA President Kyle Beasley EXECUTIVE VICE PRESIDENT’S MESSAGE 6 How to Create and Maintain an Effective Internship Program A Personal and Overall Examination By John W. Anderson, Executive Vice President with Mark Anderson, Legal and Legislative Assistant, NMBA WASHINGTON UPDATE 8 Defend the Dual Banking System By Rob Nichols, President and CEO, American Bankers Association 10 NMBA 112th Annual Convention Recap! 12 We Want To Thank the Sponsors For the 2024 NMBA Convention 15 America’s Endless Election Cycles A Closer Look By Mark Anderson, Legal and Legislative Assistant, NMBA 19 New Mexico Mortgage Finance Authority Announces an Updated Brand: Housing New Mexico By Kristie Garcia, Housing New Mexico 22 How Banks Can Refine Data Into Actionable Insights By Jay Kenney, SVP & Southwest Regional Manager, PCBB 24 5 Strategies for Financial Institutions to Thrive After Rate Cuts By Abrigo 26 Bank News Our Mission CONTENTS President Kyle Beasley Bank of Albuquerque 100 Sun Ave. NE, Ste. 500 Albuquerque, NM 87109 President-Elect Max Myers Century Bank 100 S. Federal Pl. Santa Fe, NM 87501 Secretary-Treasurer Elizabeth Earls Capra Bank 400 Tijeras Ave. NW Albuquerque, NM 87102 Immediate Past President Mark Horn Pinnacle Bank 107 E. Aztec Ave. Gallup, NM 87103 Executive Vice President John Anderson NM Bankers Association 316 Osuna Rd. NW, Ste. 502 Albuquerque, NM 87107 TERMS EXPIRING 2025 Scott Czarniak First National 1870 7300 Jefferson St. NW Albuquerque, NM 87109 Aaron Emmert Pioneer Bank 3000 N. Main St. Roswell, NM 88201 Howie Herbert U.S. Bank 7900 Jefferson St. NE Albuquerque, NM 87109 TERMS EXPIRING 2026 Renanah Taylor Bank of Montreal 303 Roma St. NW, Ste. 100 Albuquerque, NM 87102 J. Chesley Steel Southwest Capital Bank 1410 Central Ave. SW Albuquerque, NM 87104 TERMS EXPIRING 2027 Nicole Noto Wells Fargo Bank N.A. 200 Lomas Blvd. NW, 12th Fl. Albuquerque, NM 87102 Jay Jenkins CNB Bank PO Box 1359 Carlsbad, NM 88220 Jason Wyatt Western Commerce Bank 212 N. Canal St. Carlsbad, NM 88220 2024-2025 NMBA Board of Directors 3
INTRODUCING 2024‑25 NMBA PRESIDENT KYLE BEASLEY
How did you start in banking? I started in banking somewhat by chance and somewhat out of necessity. I got married during my senior year at Texas A&M, and my new wife (now 41 years in!) thought I needed a job so we could eat from time to time. University National Bank hired me as a drive-in teller, and during my time there, I became intrigued by the loan officers behind the desks in the lobby. After graduating, I got on at First National Bank of Amarillo, Texas, as a credit analyst and from there, I’ve spent my entire career on the commercial side of the bank. In 1991, Ron Shettlesworth convinced me to move my family to Albuquerque to work as a commercial lender for The Bank of New Mexico, and we have been here and loved it ever since. Bank of Albuquerque (BOK Financial) recruited me to join them in 1998, and the rest is history. What is the best part about being a banker? The best part is seeing our clients succeed, seeing our communities grow and knowing that we played an important role. Bankers are integral to the vitality, growth and quality of life in the communities we serve, and our communities thrive when our clients thrive. It’s our mission to support our clients with sound advice and solid banking tools and services across the spectrum. What changes do you foresee in banking? My organization is gearing up for widespread and expensive changes to payments processes on the immediate horizon in the U.S. banking system. Payment options for consumers have changed considerably in recent years with the proliferation of Zelle, Venmo, Paypal, etc. Business clients are also starting to recognize the benefits of having more flexibility and control of their payment and reporting options. The traditional banking system payment rails — wires, checks, ACH, cards — are quickly evolving toward third-party and/or customer-controlled payment methods with or without utilizing the banking system. Instant payments, open banking, embedded banking and digital wallets are technologies on the immediate horizon. U.S. banks of all sizes need to start adapting now to remain competitive. What challenges do you foresee for bankers in New Mexico? I’m bullish on New Mexico, but the political environment and some important social issues are holding New Mexico back, posing growth challenges for New Mexico banks. I’m hopeful that our elected leaders will soon address what I consider to be obvious issues: crime, education, homelessness and a less-than-friendly business climate. We’ve lost ground on all these issues and, given the resources in Santa Fe, I know we can do better. Another significant challenge for New Mexico banks is the outsized competition that we face from credit unions. My organization has banking operations in eight states, and my counterparts are astounded by the liberties that New Mexico credit unions are taking. They have strayed from their traditional missions (which justified their tax-exempt status), now venturing heavily into commercial lending and relaxing their membership requirements. Competition is fine, but the playing field should be level. If they are going to open their memberships and broaden their balance sheets to purposes outside their original mission, credit unions should pay the same taxes and be subject to the same regulatory scrutiny as banks. Perhaps state and federal leadership will one day recognize the tax revenues they are leaving on the table. Also, the idea of a state-owned bank has been introduced at the last two legislative sessions and will likely continue to come up. I hope that our state leaders continue to understand that this is a needless and potentially expensive experiment for New Mexico taxpayers. There is simply no need for a state-owned bank. I know I speak for bankers across New Mexico when I say that banks are fully supporting local communities, making every loan possible and supporting communities through charitable donations, volunteer support and education. There is no case to be made to introduce a state-owned bank to New Mexico … it’s a solution in search of a problem. Who has had the greatest influence on your career? I’ve had the benefit of many great influences and mentors throughout my life — teachers, Sunday school teachers, bosses, friends and co-workers — and I sometimes regret that I didn’t recognize it at the time and thank them. Experience-wise, the greatest impact on me came from a few years in the late 80s that I spent as a special assets officer. It was very stressful at the time, but I’ll be forever grateful for the experience. Working on work-out deals gave me a sincere appreciation for proper structure, documentation and decision-making. I also gained a tremendous amount of empathy and appreciation for good honest borrowers who did their best to work their way out of very difficult and stressful situations. Any advice for young bankers? Time flies! Stay the course! I’ve had many highs and lows during my 41 years, and I’ve come to appreciate the education and experience from both. The challenges I mentioned earlier also bring about great opportunities for young bankers to be part of the solutions. Banking has become, and will continue to be, more about selling — so get good at it. Always take good care of your clients and represent them well, but at the end of the day, remember where your paycheck comes from. Tell us about your family and your outside interests. Cherrie and I have been married 41 years and are blessed with two grown daughters, two wonderful sons-in-law and three beautiful grandchildren. I love to fly fish, golf, mountain bike and hang around the family. I’ve been fortunate to lead several local non-profit boards over the years, including United Way of Central New Mexico, the Greater Albuquerque Chamber of Commerce, the Lobo Club and Big Brothers Big Sisters. It is my distinct privilege to lead the NMBA board in the coming year! 5
EXECUTIVE VICE PRESIDENT’S MESSAGE HOW TO CREATE AND MAINTAIN AN EFFECTIVE INTERNSHIP PROGRAM A Personal and Overall Examination JOHN W. ANDERSON Executive Vice President With Mark Anderson, Legal and Legislative Assistant, NMBA speaking, giving interns reasonably challenging tasks and goals can lead to a much more fruitful program in the long run and will attract the best candidates possible. From both our research and our own experience, I will explore some general rules that can vastly improve your company’s internship program. Establish an Intern Program Coordinator It’s crucial to have someone in charge of building the program, to both guide it forward and to coordinate planning and implementation. Without someone in charge, there is a risk that the program will be rudderless and lack long-term planning. This position doesn’t need to be a separate full-time position, but can be taken on by someone within your organization. Often, individuals working within an organization can both coordinate the program and impart wisdom, knowledge and advice to the interns. Albuquerque Banker and NMBA Board Member Liz Earls, Capra Bank, has done much of the work of program coordinator for the NMBA, and her expertise and enthusiasm has been invaluable. Liz has both the knowledge and passion for the program to make her an ideal leader for it. Since 2018, we’ve had the chance to work with numerous dynamic young professionals, with several participants getting hired at financial institutions in the state. Ultimately, you want to find intelligent, capable interns who can use the program as a springboard for their professional career, and Liz has helped us mold our program into that. We would be remiss if we did also note the importance that Suzanne Mirabal of First National 1870, Trevor Lewis of Capra Bank and retired bankers Dennis Garcia, Silver Browne and Paul DiPaola have also meant to the early success of the program. Set Goals for Your Interns and Stay in Touch It’s important to set goals for your interns and track their progress throughout the period of the internship. Setting up one or two major projects can both be beneficial to your bank and Since 2018, the NMBA, with the assistance of University of New Mexico’s Anderson School of Management, has undertaken an annual internship program, allowing college graduates to get a foot in the door in the banking industry, supplying them with valuable experience and allowing prospective employers a chance to work with potential employees in a hands-on setting. The success of internship programs tends to be determined in the planning and implementation stages, allowing such programs to function smoothly once put into practice. This article will examine the elements of a successful internship program, both from the NMBA’s perspective and from a more holistic perspective. In setting up an internship program in its early stages, it is crucial to have a specific vision and concrete goals that your bank wants to achieve with the program. Setting up an internship program to have participants do grunt work may fulfill the immediate needs of a company, but oftentimes doesn’t lead to the long-term success of the program. Obviously, every bank is going to have its own specific needs, but, generally John Anderson and Dennis Garcia with the 2019 group of NMBA interns. 6
provide interns a preview for what they will be working on in the future. It also provides participants in the program with a sense of purpose, and avoids the pitfall of having an aimless internship program. If an intern is able to complete a significant project during his or her time in the program, then that person is more likely to feel compelled to work for your bank. Prospective employees respond to being given projects that test their knowledge and skill, and an internship program is a perfect way to lay the groundwork. It is also beneficial that the intern be encouraged to engage with as many members of the bank staff as possible, not just those employees that are in the department or division that the intern is assigned. This will provide the intern a better understanding of the environmental and job potential within the bank itself. To that end, the more people who know you and your skill set, the more likely you are to find employment. According to a report by the National Association of Colleges and Employers (NACE), about 70% of interns receive a job offer from the company they’re placed with. Nearly 80% of those receiving a job offer accept it, which translates into 56% of interns going on to become full-time employees. Further, interns are likely to stay long-term with a company that’s helped cultivate their skills. After one year, 71% of interns remain employed by the company, and after five years, nearly 44% are still on staff. Also, when interns work on substantive projects and feel like they are making a contribution, they are more likely to want to stay with the company. It’s also important to maintain at least a tenuous connection or casual contact with your former interns. It provides your bank with proactive networking and the opportunity to reconnect in the future, possibly for employment opportunities. A good internship program can be a training ground for young talent, so staying in touch often proves mutually beneficial. Your bank can choose whether to pick interns who are college graduates or still in school, which depends on an organization’s particular needs. Distribute Information About Your Program It’s also important to distribute information about your program ahead of time. No matter how great an internship program, it can’t thrive if no one knows about it. We begin recruiting several months before we want the internship to start, particularly if you’re looking for someone to start at the end of the school year. Many students begin making plans as early as possible. A few tips for drawing attention to your internship program: • Post the internship on job boards. • Send information to career centers at local colleges and universities. • Ask specific departments or faculty to distribute information to students or post on their bulletin boards. • Add the job posting to your website. The NMBA’s internship program has been assisted tremendously by its alliance with University of New Mexico’s Anderson School of Management. It has given us access to a plethora of terrific candidates and has given our program far more exposure. Should Interns Be Paid? According to the Fair Labor Standards Act, you can only bring on unpaid interns in certain situations. In these cases, the internship has to be primarily educational and benefit the intern more than the company. Nearly 61% of internships are paid, according to the NACE report, with an average wage of $19.05 per hour. Most unpaid internships are in the social services sector. Besides meeting legal requirements, you’re more likely to attract talented and motivated candidates by compensating your interns. And you’re far more likely to attract interns to seek full-time employment in the future if you compensate them. The NMBA program provides compensation for our interns, which is paid by the participating bank. There’s no set way to structure an internship program, you have to tailor it to meet your bank’s individual needs. But there are general rules that will allow your organization to attract highly qualified candidates. Providing interns with challenges and actual work situations will prepare them better and work in your bank’s favor. By having someone coordinate the program and creating alliances outside your organization, you can quickly get your program off the ground. For the NMBA, Liz Earls’ participation and our relationship with the Anderson School has been essential to our program’s success thus far. It has allowed us to set a vision for the program and begin to implement it. John Anderson with the 2024 group of NMBA interns. 7
ROB NICHOLS President and CEO American Bankers Association WASHINGTON UPDATE Our dual banking system has served Americans well for decades. ABA will continue to push back against efforts to undermine that system, and we’ll keep pressure on regulators to do the same. DEFEND THE DUAL BANKING SYSTEM Since the time of President Lincoln, American consumers have benefited from a dual banking system, made up of both state-chartered institutions and federally chartered national banks. This system — which can trace its roots back to the U.S. Constitution — allows consumers to have more choices. It offers them a robust marketplace of banks of different sizes and business models to meet their needs. And it enables the nation’s more than 750 national banks to operate safely, soundly and efficiently across multiple jurisdictions under the supervision of the OCC while, at the same time, allowing state banks to serve their communities with local supervision. But this system, which has served our country well for more than 150 years, is now coming under threat, as lawmakers in both red states and blue states have begun to pass laws that will interfere with national bank operations, violate federal preemption and tread squarely on the OCC’s turf. Just look at the situation currently unfolding in Illinois, with the Interchange Fee Prohibition Act that was signed into law this summer as part of the state’s budget legislation. This misguided law bans banks, credit unions, payments networks and other entities from charging or receiving interchange fees in Illinois on taxes and tips charged as part of a credit or debit card transaction. This law — which will create unprecedented chaos and confusion for consumers and businesses if allowed to take effect — violates multiple federal statutes, including the National Bank Act and the Federal Credit Union Act, and cannot be enforced against national banks, federal savings institutions or state-chartered banks, as well as federally and state-chartered credit unions. It also runs afoul of the Electronic Fund Transfer Act, which directly addresses the permissible 8
amount of interchange fees for debit card transactions and does not carve out taxes and gratuities. This law, a gift to corporate mega-retailers as part of a last-minute budget deal, is the first of its kind to pass in the nation. We can’t let it stand and run the risk of other states following, which is why ABA is fighting back. Together with the Illinois Bankers Association, America’s Credit Unions and the Illinois Credit Union League, we filed a lawsuit challenging the law, and we are seeking a preliminary injunction pausing implementation until the court can rule on the merits of our case. With top outside lawyers assisting us, we have confidence we will prevail in this case, sending a strong message to other states looking to follow Illinois’ lead. We’ve seen a different kind of challenge to the dual banking system in other states. Florida and Tennessee have put in place their own safety and soundness tests, encroaching on the OCC’s federal oversight of national banks. Like ABA, the OCC has taken notice. We’ve been encouraged by comments from Acting Comptroller Michael Hsu, noting that his agency will continue to defend the dual banking system. The acting comptroller pointed out in recent remarks that “increasingly, banks are being asked by states to pick a side in service of performative politics rather than deliberative policy.” This simply shouldn’t be the case, and we will continue to urge the OCC to exercise its authority when states cross the line. Our dual banking system has served Americans well for decades. ABA will continue to push back against efforts to undermine that system, and we’ll keep pressure on regulators to do the same. Email Rob at nichols@aba.com. YOUR FAMILY COMES FIRST. HTRUST.COM ∙ 575.758.7700 ∙ NEW MEXICO Offices in Taos, Santa Fe & Albuquerque We are a state-chartered, locally-owned, independent trust company, devoted to families & their advisors. 9
112th ANNUAL CONVENTION NMBA RECAP! Mark Horn Mark Horn and John Anderson Ronda Clayton and Mark Horn NMBA Board Meeting Bankers deep in conversation 10
Steve Otto and Paul Stephens Jason Wyatt, Steve Slate and Paul Stephen The winners: Aaron Emmert, Danny Beyhan and Rosalia Beyhan, with John Anderson Liz Martineau John Brooks and Jason Olquin Maxine Montoya and Jason Bigham Bankers enjoying opening session with John Asbury 11
WE WANT TO THANK THE SPONSORS FOR THE 2024 NMBA CONVENTION DIAMOND SPONSORS $5,000 BHG Financial CP Insurance Associates EMERALD SPONSORS $3,000 FHLBank Dallas PLATINUM SPONSORS $2,500 IntraFi GOLD SPONSORS $2,000 Capital CDC SILVER SPONSORS $1,000 Banc Consulting Housing New Mexico MFA WesPay Western Bank, Artesia Western Commerce Bank, Carlsbad 12
CONTACT US TODAY TO PLACE YOUR ANNOUNCEMENT AD. SHOW-OFF. THERE'S NOTHING WRONG WITH BEING A Call (801) 676-9722 or scan the QR code to get started. Place QR Code Here ▷ Show off your employees ▷ Show off your accomplishments ▷ Show off a job well done Employees are motivated when they are recognized and feel valued. This magazine is a great platform to celebrate your team’s accomplishments! ABA Proudly Supports New Mexico Bankers aba.com/getstarted I’m Rich, and I am your ABA representative. I’m helping bankers in New Mexico make the most of ABA membership. Let me connect you with ABA’s experts and resources! Please reach out to me any time. Rich Wolford Vice President, Membership • rwolford@aba.com • (202) 663-5185 Connect with ABA resources at aba.com/getstarted. 13
AMERICA’S ENDLESS ELECTION CYCLES A Closer Look By Mark Anderson, Legal and Legislative Assistant, NMBA A common refrain when American presidential election cycles roll around every three years or so is, “Why are our elections so long? Do they have to be?” It’s well-known that election cycles in the United States last a relative eternity, but less discussed are the reasons why they are so painfully overlong. To illustrate how numb Americans have become to the constant electioneering, there were questions when President Joe Biden dropped out earlier this summer over whether the Democratic Party could organize a competent campaign in the matter of several months. This belies how much time and organization goes into political campaigns and contingency plans, and how the length of American political campaigns can be attributed to far more complex origins than pure logistics. The campaign of Vice President Kamala Harris quickly coalesced because major political parties are well-funded machines that can act quickly if need be. But, in America, we’ve gotten used to political parties feigning helplessness when pressed to act and campaigns so mind-numbingly long that most people just want them to end. It isn’t this way because of some law of nature, but because of particular choices made in decades past. In fact, one of the most defining, unique aspects of American elections is their length. Many other nations have laws on the books strictly enforce how long campaigns can be. While most are aware of how lengthy our election cycles are, it’s less well-known that they haven’t always been this long. As a recent article in the Foreign Policy magazine details, “In 1896, Republican William McKinley famously campaigned from the front porch of his home in Ohio and won election as president. Although candidates would compete in primaries since their advent in the early 20th century, most only did a handful, if any, and they were only testing grounds for the summer party conventions where the machine would select the nominee. In 1968, President Lyndon B. Johnson didn’t even file in the New Hampshire primary.” The article further details that, “The duration of the presidential campaign cycle has vastly expanded since the early 1970s. Political reform following the tumultuous 1968 15
The endless election cycles have the effect of putting the electorate into a daze of sorts, but the American public would respond to a more dynamic, participatory democracy with shorter, more focused election cycles. Democratic National Convention in Chicago was an important factor behind the change. Democrats were shaken as anti-war protesters clashed with party leaders over the disastrous conflict in Vietnam. Violent confrontations unfolded on the streets where Mayor Richard J. Daley’s police attacked protesters with brutal force. Rather than allowing party operatives to keep picking the nominees in smoke-filled rooms, Sen. George McGovern and Rep. Donald Fraser successfully proposed reforms that made primaries, as well as caucuses, the contests in which voters would determine who sat atop the ticket. And when former Georgia Gov. Jimmy Carter figured out in 1976 how to use the Iowa caucus as a way to build the perception of being a front-runner, the official kick-off for presidential campaigns became January of election year. Republicans embraced the McGovern-Fraser reforms and moved away from party machines as well. Very quickly, candidates started to prepare even earlier as they wanted to make sure to do well in Iowa as well as the New Hampshire primary so as to receive the boost of an early victory.” However, there was another crucial factor at play: money. In 1974, in the aftermath of Watergate, Congress passed reforms that created contribution limits, spending limitations, tighter disclosure rules and a Federal Elections Commission. But these reforms were the equivalent of putting a band-aid on a bullet wound, and they failed to prevent the rapidly increasing costs of elections. Specifically, television spots placed an incredible strain on the budgets of candidates. By 2020, presidential and congressional elections cost an astronomical $14 billion. This is a greater amount than the GDPs of some small countries. Also, the election reforms of 1974 were knocked down by the Supreme Court in 1976 on the grounds they violated free speech. After this, political action committees and non-profit entities became the primary economic engines of both major parties while presidential candidates decided not to accept public funds in lieu of spending as much private money as they wanted to. This has created politicians who largely respond only to the demands of big money donors, and look at the demands of constituents as a nuisance at best and threats at worst. Over the years, candidates and consultants have joked that presidential campaigns usually start the minute after the inauguration ends. Another factor is television, and the more television has evolved into its modern incarnation, the more insufferably long the campaigns have become and the more irrelevant much of the coverage around the campaigns has become. The 1980s were the dawn of cable networks devoted strictly to news, most notably CNN in 1980, and then Fox News and MSNBC came along in 1996. The networks make their money through advertising, so they are incentivized to air stories that will garner high viewership. Horse-race political coverage became ideal content to fill airwaves because, one, it theoretically changes on a day-to-day basis, albeit in ways largely insignificant, and, two, it doesn’t offend or conflict with the sensibilities of any advertisers. Talking about the day-to-day machinations of the campaigns gives the illusion of urgent breaking news that is hugely important without substantively delving into the structural issues that plague America. This endless electioneering creates a plethora of collateral damage, as Congress seems incapable of remotely fulfilling the wishes of everyday constituents and is stuck in a cycle of constant fundraising and electoral pressure, with zero time for sober policymaking or making any structural improvements to our system of governance. Additionally, the endless election cycles lead to a deeply cynical and apathetic electorate, rightly 16
sick of hearing endless bloviating from politicians with little intent on following through on campaign promises and meaningless pontifications from an elite media class paid to put a charitable spin on political corruption and Congress’ complete inability to govern effectively. With our election cycles, we essentially have the worst of both worlds. They last forever, but due to the nature of corporate advertising propping up news networks, the endless election cycles aren’t used to discuss much of substance. Instead, a great deal of political coverage is devoted to optics and political maneuvering, such as how a politician looks on television and how a politician can pander to a certain group to gain their approval. There is very little discussion on the substance of political issues, such as the economy, the climate, housing, foreign policy, healthcare, etc. Much of the time discussing these issues is devoted to attacking the opposing party’s ideas and very little is devoted to discussing the root causes, deeper context or possible solutions to the problems. This leads to a general public that is apathetic, cynical and constantly lied to and misinformed. One has to go out of his or her way to find substantive, intelligent writing or discussion of these pressing issues, and many people understandably want to spend their free time in more leisurely pursuits. As the last few months have shown, it is more than possible for the public to make an informed electoral decision in a much shorter time period. And both political parties could put together campaigns in a much shorter time period. But the never-ending campaign cycles aren’t done for the benefit of the public. They exist because both American political parties are principally fundraising machines unconcerned with governing in a way most Americans would desire. And with that as the overriding factor, the amount of money on the line and the 24-hour news cycle necessitates endless electioneering. The public’s apathy and discontent are merely inconvenient side effects. There isn’t much evidence for any reform to our election system on the immediate horizon, which is grim in one sense. The factors that make our elections the way they are have only become more entrenched over the decades. But the American people are more than capable of focusing on substantive issues, and doing so in a shorter time period. The endless election cycles have the effect of putting the electorate into a daze of sorts, but the American public would respond to a more dynamic, participatory democracy with shorter, more focused election cycles. There is plenty of evidence of that. However, there is little evidence that any reform in this direction is occurring. Like many issues, the American public is far more ready for substantive change than the political class and its donors. 17
| 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
New Mexico Mortgage Finance Authority Announces an Updated Brand: HOUSING NEW MEXICO By Kristie Garcia, Housing New Mexico At a news conference on July 24, 2024, New Mexico Mortgage Finance Authority officials announced a new brand — Housing New Mexico — and officially unveiled a new logo. A banner with the new logo was lowered over the existing logo on the building on 4th Street in Albuquerque. (Photo courtesy of New Mexico Mortgage Finance Authority) New Mexico Mortgage Finance Authority Executive Director/CEO Isidoro Hernandez announced at a news conference that New Mexico Mortgage Finance Authority has rebranded to Housing New Mexico, and the nearly 50-year-old quasi-governmental entity officially unveiled a new logo. “When New Mexico Mortgage Finance Authority was created by the state legislature in 1975, its focus was mortgage assistance for low-income households,” said Hernandez. “We have grown into so much more, as far as the programs and services we provide, and ‘Housing New Mexico’ is more reflective of our diverse suite of services and makes a strong statement. The new logo should help New Mexicans understand our role in their community better, and we look forward to continued outreach and education about Housing New Mexico for years to come.” Officials also hope the rebrand will help prevent mistaking the New Mexico Mortgage Finance Authority with the New Mexico Finance Authority and vice-versa, which is often the case. Hernandez explained the entity is not officially or legally changing its name, but the idea is for it to be recognized as Housing New Mexico. “We are still New Mexico Mortgage Finance Authority,” he said. “As the state’s housing authority, our vision is that all New Mexicans will have quality, affordable housing opportunities, and ‘Housing New Mexico’ truly encompasses what we work toward every day.” 19
At the news conference, Housing New Mexico officials also reported on the findings of the state’s most recent housing needs assessment and outlined how $84.6 million in state funding will be allocated to address those needs. The New Mexico Housing Needs Assessment is a comprehensive annual report produced by Housing New Mexico. It comprises an array of housing indicators describing affordable housing needs in the state. Key findings from the 2024 report for New Mexico include: • The homeownership rate is 70.9%. • The median household income is $58,722. • 43.2% of households earn less than $50,000 annually. • From 2018 to 2022, the median home sale price increased 53% (from $200,000 to $306,000). • Currently, the median price of a home sold in New Mexico is $353,000 (9.2% increase from 2023). • Median monthly gross rent in 2022 was $966, an increase of 7.7% from 2021 and an increase of 16.7% in 2018. • Single-family detached homes comprise the majority of the housing stock (65.7%). • 43.9% of renters and 28.4% of homeowners are cost-burdened, meaning these households pay more than 30% of their income for housing costs, including insurance and utilities. • 43.2% of houses were built prior to 1980. • The number of homeless individuals increased by 50% from 2022 to 2023. Scan the QR code to view the full report. https://housingnm.org/resources/ housing-needs-assessment “The housing needs assessment findings provide us with a reality of what the affordable housing necessities are in our state,” said Hernandez. “Along with our partners, we have assisted over 500,000 families across the housing spectrum for close to 50 years. By signing House Bill 2 earlier this year, Gov. Michelle Lujan Grisham appropriated $50 million to support the New Mexico Housing Trust Fund. This funding allows us to continue our pursuit to do even more to help New Mexicans get into safe, affordable homes.” At its May and June meetings, the Housing New Mexico Board of Directors approved the $50 million allocation, along with the $34.6 million in state fiscal year 2025 severance tax bond funding as follows: • $20 million to build homeownership and wealth. • $26.62 million to create more housing. • $10 million to preserve existing affordable housing. • $1 million to create stable housing environments. • $27 million reserved for the above activities based on demand. “Whether it’s building homeownership and wealth, creating more housing, preserving existing affordable housing or creating stable housing environments, our efforts and programs directly align with the key findings in the housing needs assessment report,” said Hernandez. “I appreciate our board of directors, the governor and legislators for their support and funding for these much-needed programs in our state.” To learn about all of Housing New Mexico’s programs and funding opportunities, visit housingnm.org. At a news conference on July 24, 2024, New Mexico Mortgage Finance Authority Executive Director/CEO Isidoro Hernandez (left) announced a new brand — Housing New Mexico. He also reported on the findings of the state’s most recent housing needs assessment and outlined how $84.6 million in state funding will be allocated to address those needs. Waterstone Mortgage Loan Officer John Gabaldon (center) and San Felipe Pueblo Housing Authority Executive Director Isaac Perez (right) spoke about their partnerships with Housing New Mexico. (Photo courtesy of New Mexico Mortgage Finance Authority) 20
New Look, Same New Mexico Mortgage Finance Authority We’re more than just mortgages now. We provide housing solutions across the full housing continuum — from homelessness to homeownership. Learn more at: www.housingnm.org We have moved! Our new address is: 7425 Jefferson St. NE Albuquerque, NM 87109
HOW BANKS CAN REFINE DATA INTO ACTIONABLE INSIGHTS By Jay Kenney, SVP & Southwest Regional Manager, PCBB Community banks have a lot of untapped data at their fingertips. When used with the right tools and expertise, the vast amount of data at a bank’s disposal offers significant opportunities to boost performance. However, the financial services industry faces numerous issues due to the variety and large volume of complex data it handles. For example, data teams need to effectively communicate data insights with stakeholders and decision-makers, as clear and understandable data is critical for achieving strategic objectives. Unfortunately, it’s not a straightforward task, particularly when some organizations are still reliant on legacy infrastructure with data stored on multiple systems across several departments. These challenges can make it difficult to see the whole picture at once and gain real-time insights into customer trends and patterns. What’s more, explaining and sharing data findings with non-specialists can be onerous and an inefficient use of data experts’ time, diverting them from key duties. Data Challenges for Decisionmakers Every aspect of the banking industry, from customer transactions and lending decisions to fraud prevention, depends on data-driven insights to guide informed decision-making. As the digital landscape evolves with the emergence of cloud computing, artificial intelligence and machine learning, banking decision-makers are acutely conscious of the urgent need to modernize as they aim to redefine operational efficiencies and customer experience. For instance, legacy systems are labor-intensive and open to human error, so community banks are seeking new systems that will integrate with the old platforms. As they invest in new platforms, they need to be confident that insights and decisions will be driven by high-quality data and analysis will be delivered in accessible formats. Innovative, Data-Driven, Tailored Solutions To navigate these challenges, community banks are increasingly turning to data-driven platforms that not only integrate with legacy systems but also enhance their decision-making processes. As they invest in these new technologies, the focus shifts to ensuring that data analytics will drive insights and decisions, providing high-quality, actionable information. Data analytics is revolutionizing the banking industry, transforming everything from customer profiling and segmentation to fraud detection, lending decisions, cybersecurity, risk management, compliance and client support. Decision-makers want formats that are user-friendly and easy to access and interpret. A platform that can be used by stakeholders, regardless of skill set, will help to improve productivity and the communication of data, allowing data teams to concentrate on their key roles. When considering the adoption of new data-driven platforms, it’s essential to focus on several key factors to ensure successful integration and maximized value for your organization: • Prioritize User-Friendly Platforms: Invest in data analytics platforms that are intuitive and accessible to all stakeholders,
The Advisors’ Trust Company® Zia Trust, Inc. We work alongside your clients’ investment advisors Independent Corporate trustee • Estate Settlement and Distributing Trusts. • Special Needs and General Support Trust Administration. • Serve as Financial Agent Under Power of Attorney. • Charitable Trust Administration. 6301 Indian School Rd NE Suite 800 Albuquerque, NM 87110 Albuquerque • SAntA Fe • lAS CruCeS • Phoenix • Tucson regardless of technical expertise. This will enhance productivity and streamline communication across your organization. • Focus on Integration: Choose data-driven solutions that seamlessly integrate with your existing legacy systems to minimize disruption and maximize efficiency during the transition to new technologies. • Leverage Personalized Insights: Use data analytics to create personalized financial solutions for customers by analyzing their banking history and spending patterns. This approach can improve customer satisfaction and retention. • Enhance Decision-Making with High-Quality Data: Ensure that your data analytics platform delivers high-quality, actionable insights in formats that are easy to interpret. This will empower your teams to make informed decisions that drive business growth. • Empower Data Teams: By adopting platforms that are accessible to non-technical users, allow your data teams to focus on more complex analysis and strategic initiatives rather than spending time on basic data interpretation tasks. With the right data analytics at their disposal, community banks can offer customers personalized plans and financial solutions by analyzing their banking history and spending patterns. This not only improves a customer’s experience but helps banks to target and differentiate their services, resulting in better customer retention. Fit for Future Business Health One such solution is a profitability analysis tool, which is designed to harness the power of data mining, providing deep insights into financial behavior across key metrics such as ROE, net interest margin and ROA. This robust analysis allows banks to make data-driven decisions, optimize their financial strategies and, as a result, gain a clearer picture of customer profitability. With the right tools, the treasure trove of data at a bank’s disposal can enable them to make faster, more informed decisions, identifying opportunities to offer customers a personalized service that will, in turn, help increase customer loyalty, profitability and shareholder returns. To continue this discussion or for more information, please contact Jay Kenney at jkenney@pcbb.com or visit www.pcbb.com. Dedicated to serving the needs of community banks, PCBB’s comprehensive and robust set of solutions includes cash management services such as Settlement and Liquidity for the FedNow Service, international services, lending solutions and risk management advisory services. 23
RATE CUTS 5 STRATEGIES FOR FINANCIAL INSTITUTIONS TO THRIVE AFTER RATE CUTS By Abrigo Responding to Upcoming Rate Cuts As financial institutions anticipate potential rate cuts, many banks and credit unions are asking what they can do to strategically prepare for changes in the economic landscape. Dave Koch, director of Abrigo Advisory Services, shared valuable insights on this topic during a recent episode of “Ahead of the Curve: A Banker’s Podcast.” We outline five essential steps financial institutions should consider when preparing for or responding to rate cuts. 24
Key Components of Managing Interest Rate Risk These five areas of focus can help financial institutions improve their standing and prepare for the future. Addressing each of these areas and utilizing data-driven strategies can be the difference between a financial institution and its competition. Consider the following items a checklist for equipping your bank or credit union for rate cuts: 1. Manage Deposit Costs Carefully Rate cuts can quickly put pressure on asset yields, but reducing deposit costs may not happen as swiftly. Koch advises financial institutions to carefully manage deposit costs in a falling rate environment. “Everyone hopes to cut deposit costs, but I don’t think they’ll come down as fast as yields will,” says Koch. Depositors are more expectant of higher rates today than in the past, and banks may face pressure to keep offering competitive rates, particularly on CDs and savings accounts. Understanding the source of deposit growth and the duration of deposits is critical for managing liquidity effectively. 2. Ensure Stability of Funding Stable funding is essential for maintaining liquidity during rate cuts. Koch recommends using longer-term instruments such as home loan bank advances or brokered CDs to ensure funding stability. “You can’t [lend] the money you don’t have,” notes Koch, stressing the importance of aligning funding durations with balance sheet needs. With limited deposit funding available to support increased lending, banks must strike a balance between loan growth and available liquidity. 3. Prepare for Earnings Pressure Rate cuts are likely to result in earnings pressure for many financial institutions, according to Koch. “I expect earnings pressure on bank margins over the next year because falling rates will impact asset yields quickly,” he said. “It will be harder to move down the cost of funds given liquidity concerns.” This could lead to a squeeze on net interest margins, as deposit rates remain elevated and loan rates decline. To mitigate this, financial institutions need a strong pricing strategy for both loans and deposits. 4. Monitor Prepayment Risks Prepayment risk is a significant concern during periods of falling rates, as borrowers may look to refinance their higher-rate loans. Koch emphasizes the need to break down prepayment speeds by loan age and rate to better understand the risks. “If 20% of your portfolio is sitting in rates that went up 150 to 200 basis points, those loans will likely refinance quickly,” he explains. By analyzing loan portfolio composition, institutions can better anticipate prepayments and adjust their lending strategies accordingly. 5. Understand Deposit Growth Sources A thorough understanding of where deposit growth is coming from — whether it’s new money from existing customers or external sources — is essential during rate cuts. By evaluating deposit growth and its duration, institutions can make informed decisions about pricing and manage liquidity more effectively. Koch advises financial institutions to “track where your deposit growth comes from” to ensure that their funding strategies remain aligned with market conditions. Leveraging Asset/Liability Management (ALM) Models as Rates Drop Another critical element Koch highlights is the importance of a solid ALM model. A quality ALM model allows financial institutions to simulate the effects of rate cuts using realistic scenarios tailored to their specific circumstances. “You need a quality ALM model that doesn’t just focus on satisfying a regulatory requirement using static assumptions,” Koch explains. Regular discussions with the board or asset/liability management committee (ALCO) are also key to making well-informed decisions that will help financial institutions navigate rate cuts successfully. A quality ALM model can help financial institutions prepare for changes in earnings, liquidity and pricing dynamics. By carefully managing deposit costs, ensuring stable funding, monitoring prepayment risks and leveraging a strong ALM model, institutions can position themselves to navigate the challenges posed by a declining rate environment. Rate cuts may introduce pressure, but with the right strategies in place, banks and credit unions can effectively manage interest rate risk and continue to serve their communities. 25
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