Colorado, Wyoming, and Montana bankers meet

Northwestern Financial Review, Aug 1-Aug 14, 2003 by Hilgert, Jackie

With more than 400 people in attendance, the combined annual meeting of the Colorado Bankers Association, the Wyoming Bankers Association and the Montana Bankers Association June 15-18 in Big Sky, Mont., was like "the good old days" of banker conventions. At least, that was MBA Chairman Lyle Knight's take on the meeting.

Knight, president of the $3.6 billion First Interstate BancSystem, Billings, Mont., said the Montana contingent renewed their commitment to developing strong community banks at the meeting. He also said he and fellow bankers will work hard to keep industrial loan companies from encroaching on banking. "There's been a proliferation of those things over in Utah," Knight said. "We've decided to be in strong opposition to ILCs."

The ongoing fight against fraud topped the agenda for Colorado bankers attending their annual meeting. The fraud issue is a problem that seems to be growing all across the country, said Andy Trainor, 2003-2004 CBA chairman. "Last year we came out with an Internet-based product called Fraud-net that offers any financial institution in the state a place to view and post suspicious activity," he said. Trainor is president of the $125 million Community Banks of Southern Colorado, Rocky Ford.

Banks, savings and loan associations, and credit unions can access the site to see what's going on in Colorado or the six other states that participate in Fraud-net. (In addition to Colorado, Fraud-net is available to financial institutions in Oklahoma, Texas, Illinois, Kentucky, North Carolina and Florida.) A similar system is operated by the Iowa Bankers Association for 10 other states. (See page 18.)

"The banks in Colorado have expressed concern over the growth of fraudulent activities," Trainor reported. "With new technology, it's so easy to get checks printed and have them look identical to real bank checks," he said. Fighting fraud has been the dominating topic at CBA's board meetings and for its legislative efforts over the past year, he said.

The new officers at CBA also are planning to approach the officers at the Independent Bankers of Colorado to discuss the likelihood of merging the two organizations, Trainor said. "It's my opinion that the banks of the state - the ones that pay the dues - would like to see a united front," he commented. "I know that the legislators would." Trainor said he isn't sure how whispers of a merger might be received by the leadership of IBC, but added the issues that have kept them apart in the past are just that, in the past.

Two years ago, members of the Montana Bankers Association voted to merge with their state's independent banker association; members of the Montana Independent Bankers voted against the merger. "We find a lot of common ground between MIB and MBA," said Knight. With ideologies being similar, not merging becomes a matter of economics for banks. "It's more expensive for many banks - like our bank - because we belong to both organizations."

Soil moisture conditions in the west have improved significantly over last year. While grazing pastures have greened, however, the economy in Colorado hasn't. "Obviously, with three states represented at the convention, there are a variety of banks representing a variety of markets," Trainor said. For the most part, Colorado bankers are feeling the pressure of squeezed margins. Many are now forced to come to terms with the fact that they may not be able to meet some of their profit goals because of low net interest margins, he said.

Not far to the north, Wyoming's economy is humming, said Mark Zaback, incoming president of the Wyoming Bankers Association. Zaback is president of the $191 million American National Bank in Cheyenne. Wyoming typically prospers economically whenever the rest of the nation is in an economic slump, Zaback said, adding, "our economy is dependent on the energy side." Oil and gas prices have been solid for two years, causing plenty of money to flow into the state's coffers. Employment is rising as well, he reported.

With the Wyoming legislature focused on the state budget, Zaback expects a relatively quiet year at the capitol for WBA. "We are planning to work with the state treasurer to try to come up with a way to pool collateral on public deposits," he said. "We've hired a summer intern to research what other states have done to come up with a proposal."

It's a non-legislative year in Montana, where, like Wyoming, the economy is outpacing the rest of the nation's. "We're seeing deposit growth and loan growth," Knight said.

Construction and tourism are leading Montana's economic charge. Without sour economics to trouble them, the leadership in Montana is looking toward technology to take banker education to the next level.

"It's hard to find efficient ways to educate," Knight said. "We're going to embark on being more effective in bringing training in via the Internet and telephone hook-ups." Knight also said his group will pursue alliances with neighboring state's associations in order to achieve education efficiencies. "Once you go on the Internet, boundaries go away."