October 2022

MIB held a tailgate party at the University of Montana on Sept. 10, 2022. This event was co-sponsored by Bell Bank who also provided a custom Yeti for a prize drawing. Tim Schreiber was the lucky winner of the Yeti. Congratulations, Tim! And, the Griz won the game, 24-7.

Linda Cohen, the founder of Linda Cohen Consulting, is a professional keynote speaker known as The Kindness Catalyst. A consultant since 2012, Linda has a blog on her website (https://lindacohenconsulting.com). She has written two books; 1,000 Mitzvahs in 2011 and The Economy of Kindness in 2021.

Kindness is a soft skill. Since kindness can be hard to teach, measure or master, many people dismiss it as a nonessential nicety that won’t make or break your business. They value other capitalist-oriented skills more, such as ambition, grit and skill.

n March 2022, the Consumer Financial Protection Bureau (CFPB) made a significant revision to its examination manual for Unfair, Deceptive, or Abusive Acts or Practices (UDAAP). The main intent of this action is, as the CFPB states in its press release, “to better protect families and communities from illegal discrimination, including in situations where fair lending laws may not apply.”

Community banks have unique access to equipment leasing opportunities, but many are not taking advantage of – and profiting from – them.

When the average person thinks of banking in Montana, words like checking, savings and loans come to mind. It is a commodity, transactional-based view.

Over the years, I’ve learned a few things about human nature as it relates to bond portfolio management. Some of these notions or biases in the minds of investors are more logical than others. For example, it seems community bankers take some pride in owning a collection of bonds whose price has risen since purchase. An unrealized gain is much preferred over an unrealized loss in the minds of a lot of seasoned portfolio managers, investment committees and boards. This is in spite of the fact that the gain is the residue of rates falling since purchase. The natural consequence is that the overall portfolio’s yields are on the way down, and I haven’t met many people hoping for lower bond returns.

Ransomware attacks were very much in the news in 2021. Every organization should prepare in advance for the steps it must take should a ransomware event occur. While attacks against municipalities, educational facilities, healthcare organizations, the retail industry, and pipelines pepper the news, ransomware attacks have targeted community banks and will continue to do so in the future.

I spent over 20 years as a Montana community banker, working my way through various positions from Teller to Branch Manager, Credit Analyst to Lender, and Chief Credit Officer to Chief Lending Officer. Helping small businesses succeed by getting to know my borrowers’ needs and applying sound loan structuring that made sense for their business and the bank was the most fun part of my banking career.

RESPA. Q: We have a consumer real estate loan that we escrow for the property taxes and insurance. We did their annual escrow account analysis in August 2022. Now, we are paying their taxes and see their tax bill has increased by $1,300 from the last bill. We did not have this new tax information until the bill came.

Cyber and data security have long been areas of emphasis for community banks, but in today’s escalating digital environment, that focus has grown. In fact, our 2022 CEO Outlook Survey ranked data security as a top concern, and as the digital sphere continues to evolve, all signs point to that level of concentration increasing.

When it comes to fraud, you don’t know what you don’t know, and what you don’t know can greatly influence your bottom line. But the effects of fraud are felt far beyond budgetary impact; our reputations are at risk. Customers expect their bank to keep their money safe, and though they are often the gateway for fraud, they are inclined to blame us if we can’t fix the problem.

As a native of Missoula, I have lived in Western Montana my entire life. I grew up the oldest of four siblings (two brothers and one sister), attended high school at Sentinel, then graduated from the University of Montana with a bachelor’s degree in Business Administration with an emphasis in Finance. I was lucky enough to marry my college sweetheart Beth shortly after graduation. She has been an amazing partner in our life’s journey together, the most fulfilling of which has been raising our two boys, Ben and Garrett, to be amazing young men.

Welcome to the final 2022 edition of the MIB Community Banker Magazine. Where has this year gone? The speed with which this year has passed reminds me of the following Nathaniel Hawthorne quote: “Time flies over us, but leaves its shadow behind.”

As I write this, I can’t help but think about where our economy is right now and what the next 18 to 24 months will bring our way. We have seen a crazy run-up in real estate values that is now correcting, inflation is stubbornly high, the Federal Reserve is raising rates at breakneck speed, liquidity in the system remains high, and things just feel like they are on the verge of tipping over. With all of that, I would expect the next 18 to 24 months to present some challenges for a lot of people in our state.