Native American Bank has officially relocated its headquarters from the 24th floor of a Denver skyscraper (“It’s very hard to create an identity for yourself in that environment,” Ogaard says) to Denver’s Baker neighborhood at 201 N. Broadway. (Photo Courtesy NAB for Native Business)
Native American Bank, admittedly, has encountered some growing pains over the years. But its President and CEO, Thomas Ogaard, assures Native Business that the bank, an expert in lending on trust lands, has rebounded its assets to $130 million, after they plummeted to a low of $56.4 million in 2014.
As Chairman Kent Paul put it yesterday at the opening ceremony for the bank’s new location, a stand-alone, single-story building in downtown Denver: “It’s all about perseverance, about the will to succeed.”
Native American Bank (NAB) has officially relocated its headquarters from the 24th floor of a Denver skyscraper (“It’s very hard to create an identity for yourself in that environment,” Ogaard says) to Denver’s Baker neighborhood at 201 N. Broadway.
Increasing its visibility and services has come with a cost — including financial demands, need to increase personnel, and time and resource constraints on its tight-knit staff. “We’re a very flat organization, meaning very few of us have any back-up,” Ogaard has told Native Business.
The only national Native-owned certified Community Development Financial Institution (CDFI) in the country, NAB formed in 2001, when many of its initial Tribal and Alaska Native Corporation (ANC) investors purchased Blackfeet National Bank in Browning, Montana, with the aim of turning it into the only national Native-owned bank. The Denver-based NAB still operates the original bank in Montana. The new location marks its second retail branch, and its first in Colorado.
Today owned by 33 investors, including 30 Tribes, Tribal enterprises and ANCs, the bank is committed to supporting the economic growth of Native communities, though it’s not exclusive to Indian Country.
Heading into 2019, Ogaard spoke with Native Business and leveled with us about the challenges that come with organizational growth.
He also shared his vision for the expansion of Native American Bank across the country.
This quote seems to sum up his perspective: “Don’t limit your challenges. Challenge your limits.”
Who are the primary clients of Native American Bank?
Native American Bank is a really a designated, mission-oriented financial institution. Our goal is to serve Indian Country and Alaska Natives, individuals and entities. Our primary clients today are Tribes, Tribal corporations, Alaska Native Corporations and individuals that we serve in the lower 48 and Alaska. That has brought us business in 20 states where we’ve either completed or are in the process of completing projects. We work with all of those entities. Every deal is different, so we look for the best opportunity to create credit that will serve the borrowing entity plus the bank and our shareholders. It isn’t any one particular Tribe or individual or entities that we are targeting; it’s Indian Country in its entirety.
Like other Native entities, we seek to serve the general population as a whole. Our goal is to bring those revenue streams back to the bank for our shareholders — 30 of whom are Tribes or Tribal corporations. It helps them as well. We have three additional shareholders who are nonprofit entities that share our mission. Together, we have 33 shareholders today.
Who are your biggest clients, and what have been your largest loan deals in Indian Country?
From a banking perspective, we have a fiduciary responsibility to confidentiality, although some of the deals that we have done have gotten a lot of recognition. But I can tell you that we’ve been involved and partnered with other financial institutions — some of them major financial institutions — doing significant sized loans, some of them exceeding $30 million. These are significant opportunities, not only for the bank but for us to help Tribal entities in Indian Country, and it has been very rewarding. We’ve done hotels and a lot of housing; we’ve done C-stores; we’ve done a lot of different types of entities or projects all over the country. We have a number of similar projects in our pipeline and are working hard to bring them to fruition.
Since 20 Tribal Nations and Alaska Native Corporations established Native American Bank in 2001, what obstacles have you faced and overcome?
Well there has been a number of them. As you can imagine, it has been a challenge at times to grow any particular enterprise, especially as we have tried to do on a nationwide basis. The challenges have been on a number of different fronts. Initially, it was getting traction in Indian Country, and then you had the Great Recession that impacted banks across the board. Native American Bank was affected like many other banks. Part of it was not having adhered to the mission. My goal in coming here was to bring us back to that mission-orientation, and I can tell you that over 95 percent of what we do is in Indian Country and supporting the original mission.
Other challenges as we have grown and gained scale are acquiring the necessary capital to support that, which is an additional investment in the bank.
We have been successful in doing that and continue to be successful, but it seems like it’s an ongoing effort in doing that — but successful. The regulatory environment for banks was ramped up quite significantly after the recession, and for banks our size, it is a financial question as to acquiring the resources to keep up with all the regulations that we have to comply with on a daily basis. That has been one of those hurdles for us. While we have been successful in doing it, it comes with a cost. We work with our trade associations to hopefully find a common ground where we can perhaps unburden some of the banking industry — particularly banks of our size that don’t have the complexities of some of the larger banks — into a better regulatory environment that doesn’t require the amount of financial resources as it does today. That’s a pretty significant hurdle for us right now.
What are the biggest challenges to growing a bank now?
I think, looking forward, it’s still going to be the capital that we need to support the growth. But when I look at what we have in our pipeline for future projects, it is also finding other bank partners to help us fund some of these particular projects. Because of their size and scale, we can’t, say, take a $30 million project and fund it ourselves. It’s much larger than we would want to hold on our own, so we look for partners. It could be one sizable bank that could take a large piece of it, or a number of smaller banks that can help us as well. For example, we just worked with two other Native banks and a fourth larger bank, and the four of us came together to do a sizable $30 million-plus line of credit for a Tribe. Having three Native-owned banks in this case be involved was significant, and we needed those partners to come along in order for us to get deals like this done.
We have more of those in our pipeline. We are finding partners for these deals. As word spreads it’s getting a little bit easier to talk to other financial institutions — be they Native-owned or not Native-owned, and to find partners that are willing to come in and support the projects that are going on in Indian Country. That has been a challenge and it will always continue to be a challenge.
I think that, from our perspective, finding the right staff and personnel is a challenge. We are obviously geared towards hiring Native individuals and finding those individuals with the skillsets that we are looking for for some of the projected product roll-outs. To manage those types of things can be a challenge. It doesn’t seem like there have been a lot of Native individuals who go into banking, so we’re looking at ways that we can grow our own internally. It’s a challenge today and will remain a challenge into the future.
What do you hope to achieve by opening a stand-alone branch?
That’s a really great question. We’re in Denver on the 24th floor of an office tower right in the middle of downtown [he said in December 2018]. It’s very hard to create an identity for yourself in that environment.
I think a stand-alone branch is going to serve multiple things for us. It’s going to help us build an identity in Denver as a Native-owned bank in an urban setting. We’re going into a part of Denver that could use more banking services, and it is a dynamic area that seems to be changing.
Denver is a great hub for a lot of Native entities as well. We’ll be reaching out to them to see how we can support them. At the same time, we want a bank that the general population around our bank branch, as well as the overall population, will support us, be they Native or non-Native. We are definitely open to that, and we think that it can be a hub and a template for future regional locations around the country.
In addition to expanding with a physical location, you’ve also grown your online banking platform. How are Native American Bank’s digital tools making banking more convenient and meeting the modern-day needs and expectations of your customers?
We’ve invested quite a bit in technology. We have the full capability for anyone to bank with us no matter where they are. Today you can make a deposit with us at Native American Bank by taking a photo with your smart phone and uploading it on our app, and it will get deposited. You don’t have to go to your bank branch; you can sit in your living room and make a deposit. That is one facet of technology today.
For someone who wants to be part of the mission, geography doesn’t matter anymore. You can do it from anywhere, which makes banking that much more competitive.
We think that we have a compelling story to tell, and we will be investing in our ability to reach out and market ourselves as much as we are in bringing the physical branch to fruition. All those things are important to us. In 2018 we went through the core system conversion, and it was a major undertaking and a major accomplishment to get the support — the technical and technological support — to do the things that I just mentioned.
What is your 5- or 10-year vision for Native American Bank?
You know it’s interesting. I got here almost six years ago, and initially the vision and the goal was to make the bank a viable enterprise. It was under a formal agreement at the time with its regulator which really restricted just about everything the bank could do. We successfully executed on the business plan that we put together and we came out of that formal agreement in the summer of 2016, which really escalated our plans to move forward. Getting the bank to be a viable bank and to be a profitable bank was a top priority then.
Going forward 5 to 10 years, I see the bank, because of our nationwide scope, having 6 to 8 regional hubs around the country from the Southwest to California to the state of Washington to Alaska to the Midwest to the Southeast. We’ve looked at the map and where we do business; we’ve looked at a number of metrics; and there are 6 to 8 that we think will be good opportunities to put regional hubs in. Part of the goal is simply to be closer to where we do business and to our customers.
I’ve been involved in banking on reservations or Indian communities for almost 40 years. You have to understand how each Tribe operates with its own laws and their rules and regulations. That is a learning exercise in and of itself. We think that 6 to 8 locations is really important. The size of the bank has doubled since I’ve gotten here. I expect it to double again in less time than it took initially.
I think it should be the largest Native-owned bank in the country probably by 5 to 10 years out. I think the bank can be a catalyst for creating an environment for jobs and opportunities for those who want banking careers, whether they’re at another Native-owned bank or in banking in general. We can be the incubator for that.
There’s a lot of opportunity today and a lot of available jobs in banking and there’s a lot of people in the next 5-10 years who will be retiring from banking. What is was 10 years ago is not what it will be in the future. Technology is taking over, and every bank will have to keep up with it. I see technological innovation as being a key component to what we do. As long as we have the support of our shareholders, we intend to keep up with the technology and be relevant in our space — not only in Indian Country but in the banking environment overall.
What sets Native American Bank apart from its competitors?
What we are trying to become is an entity where what you do with your money can also be a force for good. You put your money in a bank, and it’s safe and secure. But from our perspective, we’re going to be about the social value of Native American Bank, because your deposit dollars are used to make loans. We take depositors’ dollars and take those and fund loans that we have as our primary asset base. If you can get all of your banking needs done, and at the same time your money is helping this particular mission — whether it be housing or new economic development or creating internship and management programs to educate people on the value of careers in banking — that’s who we want to be, and that’s what differentiates us from other banking entities particularly as we’re looking to serve Indian Country.