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good morning and good afternoon everyone William is Andrea are many and the executive director transform finance and the convener of the transform panels investor network and delighted to have you join us today for this conversation on activating cash deposits to support Native communities we're joined today by Native American Bank that will tell us a little bit background about the issue of financing in Indian country and for data communities tell us about the the bank and about their impact deposit model we are joined by Tom a guard Shannon word and Joel Smith that will go on in in this moment as always please feel free to chime in with comments or questions through the chat box or you can raise your hand if you want to speak directly on the on the webinar it'll be a very interesting discussion so I look forward very much to your questions and your points now if the webinar perhaps can be seen as part of a series around the need and the opportunities to provide capital to Native communities we were involved a few years ago in an effort by conference clamp or B to do a landscaping of different opportunities and different initiatives by impact investors and since then of course with the work of Edgar Vision wave around the column I think Lampre P we're glad to have seen an increasing interest here we also did a webinar well background made an energy project and what community engagement and community ownership can look like in the context of a large-scale utility scale renewable energy projects in in Native communities so I encourage you to look back at that yes this is an issue of of interest now we transfer payments were especially interested in in today's presentation when the alumina fund brought it to our attention because it combines both the interest in capitalizing Native communities as well see they've been historically and presently undercapitalized but also because we have been interested in this total portfolio approach or in the opportunity to really try to activate for impact all sorts of assets across all asset classes and that includes cash that in theory should be one of the easy entry points moving moving the deposits moving the cash management and you all probably saw a micro to this piece in impact alpha last week on the on the growing attention and somewhat growing options around around cash so let's let's keep that in mind and I would love for anyone who has been active on that side as a as an asset owner to share their experiences what they have seen in terms of the opportunities for for cash management for impact if there have been any obstacles or in lessons learned that could be that could be shared with us today and with that I will turn it over to Tom Shannon and Joel from Native American Bank with many thanks for joining us my name is tunnel guard and we are we good to go here yeah we're I mean Thank You Andrea yeah my name is - thank you Tom and we're delighted to be here and thank you for the opportunity to tell about Indian country we're going to discuss community development in underserved areas a little bit about what Native American Bank is doing and then why deposit dollars can be so impactful it'd really be a game-changer again with Shannon Ward and Joel Smith along with me hopefully we're going to provide you with some takeaways that are meaningful during this webinar today and I'm not going to delay the start anymore we're going to have Shannon kick us off Shannon so good morning or afternoon depending on when you're where you're connecting from I want to start my portion of our presentation and maybe thank you to transform finance and to each of you for giving us your attention today this Tom stated we're delighted to have this opportunity to provide some insight into Indian country and to share the manner in which any person entity or organization can assist in furthering our vision as we begin today's discussion it's to put some context around the words and terms were Indian country what is it in what is Indian country and when we use that term who or what are we talking about if you take a look at the map on this slide you'll see represented by the green areas all of the Indian reservations in the United States this is reservation is a legal designation an area at land managed by a federally recognized Indian tribe been held in trust by the US government and so we'll talk a little we'll talk in a little more detail later about what this trust relationship means but the point I really want to make is that today despite being the original inhabitants of this country Indian trust land totals just about three percent of the total u.s. land Vegas um you can also see Indian reservations are located throughout the country with a large majority west of the Mississippi River what is it depicted on this map though is proximity to urban areas so if you were to overlay a map with population information you would see that a great much these reservations are in less populated areas which begun which becomes more important as we continue our discussion today this map demonstrates the areas in which we see higher proportion of populations of Native Americans and Alaska Natives and where those communities are located what isn't represented here though is non reservation based populations as a result of the 1956 Indian relocation act which was an effort on behalf of the US government to further its Indian termination policy individual Indians were incentivized to move to urban cities like Denver laughs Angeles minute and Minneapolis to become a part of more mainstream communities and culture today they're very large populations again proportionately as Native Americans and Alaska Natives in these urban areas so when we talk about Indian country what we're really talking about is both reservation lands and those those natives that are living off reservation as well I'll take the next slide under yeah so let's talk a little bit about Indian country demographics I'm in 2017 6.8 million people were identified as native Native people and I'm gonna refer to Native Americans and Alaska Natives inclusively as native as for the purposes of this discussion so I keep saying that same definition over and over again but um Natives are a fast growing population with the projected population of over a 10 million by 2060 so in 2017 6.8 were identified as native today they're in 573 federally recognized tribes in the United States this is an important distinction as there are tribes that are state recognized and their bans or groups of natives who are not federally or state recognized that share a history and culture that are also located within the United presently there are 326 reservation they recognized tribes have a row me it's worth noting that many of the reservation near the reservations that tribes now occupy are not their original homelands rather when natives were being displaced they were relocated to less valuable land as their new home today there are nearly 30,000 Native owned firms in the country this includes includes both individually owned and tribally owned firms and then last and one particular particular source of pride for Native Americans is that needed to serve in the Armed Forces at a larger rate per capita than any other ethnic group so on my men slide these do talk about some of the less attractive factors in Indian country we find that many people including socially conscious people have comparatively little background knowledge of the profile of the country's Native American population the issues they have faced historically and continue to face today and so what we want to do is present some of those less favorable and quite frankly gloomy characteristics of Indian country today it's important to have some context in background with recognition that it would years of education to really do justice to the unique history and varied profiles in Indian country as a whole racial ethnic group in the United States these factors are coming from the Bureau of Labor Statistics current populations are made from 2016 to 2018 it is residing in native areas of on reservations had a jobless rate of 11.4% this rate is considerably higher than that of natives who don't live in yet on reservation so those that are living in in non reservation communities that is at six point six percent so 9 percent at the same time natives were less likely to be working or looking for work so fifty nine nine percent fifty nine point six percent of them participated in the labor labor for compared to sixty two point nine percent for the overall population and some of that is due to the lack of jobs that are located upon reservations they simply aren't looking because there aren't jobs further single resonated had the highest percentage in poverty out of any racial group at a staggering rate of twenty six point two percent conditions on many reservations resembles third world conditions as noted by the fact that four out of five of the poorest counties in the nation are on reservations forty percent of on reservation homes are substandard and nearly one-third are overcrowded in a 2013 report that was sponsored by the National American Indian housing council it was found that 40% of on reservation housing in the United States is considered substandard compared with six percent of all US housing in outside Indian country in addition to that nearly one third of reservation homes are overcrowded adding to factors that less than half at these homes are connected to public sewer systems and sixteen percent lack indoor plumbing so these are the bleak facts about Indian country today the next slide so what has happened what why is this the case why do these factors exist in Indian country and there's nobody no simple answer to that question there's generational traumas that had that resulted in a host of social factors that contribute to the dismal state and we're really here to talk today about you know what role has have banks played in the issue historically so a fundamental cause of the impoverished condition of a majority of tribal reservations is tied to a lack of access to traditional banking services that that are you know widely afforded to offers our nation communities historically banks have not located branches in reservation communities and when they have these are primarily deposit taking branches I think do not make loans historic leads to the populations of the communities that they serve or or or are located in so why has the dreaded term redlining than the practice of traditional banks there's a number of factors they don't understand trust land I mentioned previously that the tribal land is held in trust with the secretary of the interior of the United States as the trustee what this means is that every time a tribe wishes to utilize its land as collateral it has to be approved any action that is taken by a tribe or a lease holder of tribal land has to be approved by the by the trustee who happens to be the assistant secretary of Indian Affairs so this is a very cumbersome process and basically it's complicated that means that things just really aren't going to take the time to understand that unique relationship and simply don't don't want to because of the complexity things have historically not understood on jurisdiction tribes are not subject to state law a relationship with the federal government they bypass the witness means for try this is that the laws that normally dictate any contracts or more specifically loan documentation there's always a question about whether or not that law pertains to these agreements and if it's under state law that isn't the case there has to be some additional steps that are taken to describe the jurisdiction of documents when you're entering into an agreement with the tribe banks have not historically understood sovereignty though as I mentioned each tribe has a nation-to-nation relationship with the federal government and again and this mean is that the question of how do you exercise your rights under any agreement how is that exercised if a tribe has sovereignty last they don't understand how to they don't understand how to understand the tribal government financial capacity so tribal audit oftentimes contain reporting for both businesses or businesslike entities as well as government governmental entities so this is a mix that is unique and unusual to say the least and it's one that can be very confusing if you're not familiar with reviewing and understanding tribal financial reporting so in the end what this means is that even well-meaning banks struggle to provide me to capital really because of a host of challenges that are unique to Indian country successful successfully making reservations takes a deep understanding at tribal trust land tribal jurisdiction sovereignty and how to analyze the financial capacity of governments you beings have karetai as this and but this is an expertise that Native American thing has formed and why we exist today with that I'm going to turn the presentation back over to Tom Thank You Shannon I'm gonna take a little bit of time to just talk about Native American banks background and why Native American Bank how did we how do we come to be what was our origin and it started in the 90s the original charter for this banking through an act of Congress in 1998 Senator Daniel Inouye from Hawaii along with Eloise Cobell was a tribal leader from the Blackfeet nation in Montana we're very instrumental in getting the legislation passed that that got the Charter and was awarded by 2001 the the original charter came to fruition through a couple of different things Capitol was raised from a number of native entities tribes and tribal corporations and Alaska Native corporations and with those dollars the the bank purchased the Blackfeet National Bank in browny Montana which really became our first location and we'll hear a little bit more about that later and from there we opened an office in Denver to be a central location for primarily Western United States as you saw in math it was the western US that where most of the tribes and reservations are based it was really to create a nationwide bank that was national in scope to serve Native people their communities their government and their economic entities and and which is really the reason why Native American banking came about and as Shannon said there were so many impediments so many issues facing Native Americans and the absence of access to financial capital and services was really the issue at the forefront and consequently it is our mission to help provide that realization of self-sufficiency and financial freedom for Indian country that's a mission we started with and it is still our mission today if we go to the next slide just to give you some context who supports Native American Bank this is a as chair holder ownership throughout the country we currently have 35 shareholders from all areas of the country seven of which are up in Alaska in the lower right quadrant of this particular slide you can see that we have for what we term socially responsible shareholders so 31 of the thirty-five shareholders are either native tribes or tribal corporations or Alaska Native corporations and these are really the entities that have provided the capital that have allowed us to grow the bank and support the growing lorne loan portfolio that we have to complete projects and consequently grow jobs sustain jobs and be able to provide economic diversity for Native American tribes and then the next slide really and for most entities you have a mission in a mission statement and we're no different we look at this constantly to make sure that we are living the vision and the mission and while we can Bank anybody and we do Bank natives and non-natives alike it is our mission to serve Indian country that really stands out for us and then the vision I would just say the vision was to meet the financial needs that Shannon talked about and then the mission actually is to provide that access to those financial services and as we continue to go forward yearning you're out those are the fundamentals by which we really take to heart and what we try to live every day I'm going to turn it over to Jill with a little more context now Joel thank yo
Tom so you've heard a lot now about new American banks history and some of the work we do I want to take a moment to synthesize that into verbage that is more commonly utilized by the impact community to present more on our impact Theory defer to the concept of by local striving to retain money within a community our tribal ownership and our our commitment to actually lend within any country is our way of retaining more within Indian country now powerful the way that we express that ideal that resonates within any country is that we work to create economic sovereignty we work to create racial equity we work to create financial inclusion and a lot of impact investors focus on certain industries whether it's the green industry or regenerative industries we work across many different industries because we believe any investment in underserved Native communities is impactful on the next slide we'll see a map showing the places that we've done commercial loans over the last several years if you were to overlay this depiction with the map of the US reservations you'd get a sense for the degree to which we specialize in helping reservation communities this shows a lot of what we call mission intensity as opposed to traditional banks that might dabble in Community Development lending our lending is almost exclusively serving our primary mission over 95% of our lending in the past five years has been in Indian country meaning to travel governments to travel Housing Authorities Alaska Native corporations or Native owned businesses by a geography nearly 90 percent of our lending supports areas designated to have elevated unemployment elevated poverty poverty levels or high concentrations of under certain populations with a large percentage of people living well below average median income levels those include Opportunity Zones new market tax credits severely distressed communities as well as hub zones which are Stanford historically underutilized business zones which really gets to the heart of what we're here to help on the next slide you'll see a quick heat map depiction of some of the places where lending is most concentrated it's overlaid with census tract level poverty great data you can see here the Pine Ridge and rosebud reservations in South Dakota which are home to two of the most impoverished counties in America you'll see the Blackfeet reservation Chippewa Curry and Fort Belknap reservations they're in northern Montana and in addition to our local lending here in Colorado you can see concentration of the work that we do with rural Alaska Native villages which are a subset of Indian country that has a particularly particularly hard time accessing capital for its own set of reasons these are often extremely small communities that are completely off of the road system just a few hundred people and they deal with extreme weather conditions that make any commercial construction project multitudes of the cost that you see in other communities and make it very hard to get financing as an example we provided financing for a few new general stores in these alaska native village communities where they could not find capital elsewhere next I wanted to quantify a little bit about our impact activity we loaned 128 million over the last five years in support of 250 million dollars worth of projects which for Bank ours eyes were extremely proud of especially with the amount of leverage that we can provide for spending on projects in addition to the loan capital that we provide we funded 1.1 million square feet of new building construction a lot of the projects on in reservation communities are construction projects because there's generally not an overabundance of idle facilities out there to acquire or refinanced we have to build it and that's where we've created another specialty to serve the reservation communities the companies the tribes the projects that NAB is funded provided and retained over 1,700 jobs in that five years span most recently next I wanted to give you one particular project profile that we think is highly impactful number very proud of the Red Lake band of Chippewa reservation in northern Minnesota has a population of 12,000 people they have the tribal Economic Development Corporation called yoga cunning Inc and Olga conning enterprises which they do businesses red laking they've operated what they call a Trading Post since 1986 small grocery store small laundry and gas facilities the store was dilapidating and did not have much in the way of inventory so residents were forced to drive 76 miles round-trip to Bemidji to get fresh produce and other products so they came to us with the need for a replacement and expansion that took the form of a twenty seven thousand square foot building a feature of expanded grocery store bakery deli as well as a c-store fuel center in a subway that provided not only retaining the 30 jobs already but providing 27 new jobs for that community in addition to 45 construction jobs and one thing we wanted to highlight particularly is in this project the construction company that built facility was one that was owned by the tribe that employed tribal members and we view that as a great impact multiplier for our projects if we can have a tribally owned company come in to do that work where and most projects see that that profit from that construction activity leave the reservation to outside firms well the next slide just have some quick references to all the different parties involved in that particular transaction which was a new market tax credit related transaction which hints to the complexity of the financing the American Bank acted as lead lender we involved the government guarantee through the USDA a CDFI partner participant the Clearing House CDFI as well as a new market tax credit in alicante the in the texture and investor PNC Bank I will add that the project also highlights the reality in Indian country that financings can take a lot longer than conventional loans almost in all cases in many cases a lot longer this project took almost three years to close since our first site visit reservation deals often get delayed by the Bureau of Indian Affairs and its role as the land trustee environmental reports and investigations that have to happen as well as leadership change over with within the tribe and other deals specific things that we are used to exercising patience with the projects that leads you that a lot of conventional banks are not used to and with that I'm going to turn it back over to Shannon to talk to us more about the bank thank you and so we're now going to talk about another project that we've had the opportunity to provide financing to and this is for the Blackfeet housing authority and you'll remember I described previously the dire need for housing on reservation and importantly the need for livable housing units and so we're gonna discuss that in a little more detail but before I do that I do want to just give a little context or a description of what the Blackfeet reservation is like it's an extreme northern Montana and there is it's rather large land base under the Blackfeet reservation it's very vast and it's very rural it does but right next to the eastern entrance typically is your national park that said it is still quite remote and very rural as you might expect the reservation members there can experience some very very harsh winters there are 11,000 residents that live on the black beaver nation and there is a severe shortage of safe housing on that reservation so the project that we worked on was a loan that was made to the Housing Authority and this Housing Authority is quite progressive in the way that it manages the authority itself the blackfeet Housing Authority runs to own meaning it builds the units and then rents them to community members and they continue to rent and to tell the family or community members have qualified to have the home transferred into their names so they basically walk members through the process of becoming credit worthy and this can take a very very long time the Housing Authority provides financial education and pedak counseling so it assists its members to become eligible for mortgages they also provide affordable homeownership so the loan that we actually made in concert with the or 2000 Authority was with the we leveraged a guarantee that is made true through its title six program and we were able to provide financing for 40 homes that are reserved for tribal members and each of those tribal members earns an income that is at or below eighty percent of the average median income for the area this particular project also has a secondary but very important benefit in that the blackfeet housing is already actually it employs the the labor so they they themselves build the homes and so while they are providing homes to community members they are also providing jobs to the communities that community members themselves so this is a project that we are incredibly honored to have been a part of it is to kind of describe the impact that we have in the area there was an in 2013 the Great Falls tribute ran and expose covering the housing shortage in the area was called crisis in our backyard and in that article viii-b executive director of the housing authority at the time was quoted as saying it's not unusual to find a grandma who has 15 people living in her home oftentimes they're all living hand-to-mouth out of a soup pot while the same times trying to pay for their electricity to keep their house heated their house their house heated and so I think that this just really signifies the impact that the types of loans that we make have in the communities that we serve on the next slide you'll see a highlight of some of the projects that we're currently working on so under Representative pipelines our first project that is highlighted here is among that we're working on that will be made to an opioid treatment facility this will be tribally owned and it will serve both native and non-native clients in Northern California and I think this is really indicative of the types of loans that Native American Native American bank makes so this will have an impact both on the tribe and its particular members but also the non natives that are in that area that need access to this type of treatment but also it also will provide a revenue stream that is diverse to the tribe to pop up some of its governmental services next you'll see a loan that we're working on for a tribal elder care facility and this is in Montana and this is a unique project in that assisting elder care facility that the tribe is currently running is condemned they have to come up with a solution for the tenants of the elder care facility if they don't all of those elders or family members will have to go outside of the community and that's not something that they want to see happen so we're actually facilitating the financing for this project both the construction and the permanent financing with the use of both a USDA loan guarantee on the permanent piece as well as the loan guarantee offered through the Bureau of Indian Affairs on the construction portion of this so as you might imagine these can be highly comp okay two transactions and that's really where we set ourselves apart from other banks is that we've gained the expertise to manage these types of projects while they can take a very long time to come through to fruition we have the patience and the willingness to take the necessary steps to see these projects through to fruition primarily because of the impact that they have on the communities that we serve you love them note that we've highlighted a native and non-profit headquarters building in South Dakota so this is an interesting project and this this native nonprofit offers a lot of services to the communities it serves and both in consulting there's some financial education aspects as well as a loan fund that they operate and all of these all of these entities are going to be housed out of a headquarters building that's located in South Dakota lastly you'll note that we've we are working on a loan that will be made to a small business here in Denver we're all very excited about this this is the quite well-known restaurant here in the Denver area and we're excited to be a part of assistance to that particular business looking forward and the next slide has to do is talks about our our nab locations so we've talked about the Blackfeet reservation we have a full-service branch there so it is it looks like any community bank that you might walk into and the way that this branch is a little bit different is that our clients and the Blackfeet reservation have a unique relationship with banks and the not all but a large portion of our customers and the Blackfeet community tends to prefer cash over other forms of money and they're still very cash based so on pay days you'll see a large portion of you'll see a line out the door really in people cashing their checks and if a unique factor that we've come to become very able to needs additionally a lot of our customers in that in that community they also are used to coming in every year for a school loan back to school loan and so they'll come in and take out small consumer loans for five hundred dollars to buy clothes for their kids going back to school it's also not uncommon for customers to come in to the base to apply for their holiday loan and these are customers that come back to us routinely while we have a credit card option they're just more comfortable with this and this is the niche that we're willing to fill for this community also we have a location here in Denver and this is where our locate our headquarters are at so all of our commercial lending administrative functions are handled out of this office this is also where Joel Tom and I are seeing and you'll note that we now have a full-service branch this was added in the fourth quarter of last year this isn't really and we're very very excited about our branch here in Denver it is a new addition for us and we think it's an important step to increasing deposits to those native and non-native points on our last screen you'll also see Native American based services so we're not unlike any other bank in that the deposit products that we offer and are really offered to anybody and we have full service branch banking both in browning and here in Denver but importantly we've expanded our online banking products and services and the ability to really think from anywhere with Native American Bank we've built out a mobile app which allows deposits from anywhere in the country and we have account options for consumer commercial and tribes with a full suite of deposit products offered or to any of those with that I am going to turn the presentation back over to Tommy Thank You Shannon well done so what's this really all about and as we look at social impact deposits we like to ask the question where does your money sleep at night and we get a lot of strange looks we've made a number of presentations one-on-one or in small groups with that particular question and it seems like a number of responses we've gotten him has been we've never really thought about it our deposits are at the bank and we're just fine and it is a given it is something that they don't really think about yeah we're asking the people that we meet with hopefully to establish a relationship that is something you should think about because deposits can have as big an impact at least for entities like ours as anything else we're not asking for grants or debt instruments or anything like that we're simply saying where do you have your deposits today how wouldn't you like them to do something very important tomorrow market rates FDIC insured you have access to your funding but what is what's going on with the deposits that you have seems to been have been overlooked based on the responses that we've gotten and in in some cases the entities we talk to they are familiar with who they bank with simply because they might not want to bank with somebody else and yet in that context we've had a number of relationships built just simply based on that particular that particular questions and so on a broader perspective there are mission o
iented and financial institutions if we want to go to the next slide please their mission oriented financial institutions that are all over the country I think we've used the term CDFI before which is for a community development financial institution Native American Bank is a certified CDFI there are a number those as you can see from the slide there are a number of banks and credit unions four of those banks on that list are native amount there's a post so minority deposit institutions or MDIs and there are one hundred and forty eight of those nationally and of those 148 nineteen have been designated MD ice that are native owned and you know there's a number of other banks that may be operating in low and moderate income areas I think for us the idea that our mission is to actually focus on that and go to those areas and and provide access to capital is I think a really important differential and you know to be a CEO fi you have to deploy a minimum of 60% of your products and services in low and moderate income areas so if you if you have LM ice near or where you are located for some banks like ours that's where we go that's what we do were small banks the average size is two women 36 million those are small community banks there they have boots on the ground these are not big institutions and they need all the help they can get and so we're constantly out there looking for relationships to build on that particular idea that deposits can have a social impact and in fact they do if you go to the the next slide simply a pie chart that depicts for you not only can there be banks and credit unions as City advised there are a number of non-bank CD of eyes all over the country and in fact more than 50% of the designated CD of eyes in the country are non-bank or non credit union and consequently as you look at that particular mix the the non-bank CD of eyes tend to be smaller I would say on average somewhere in the 5 to 15 million dollars they tend to do micro-financing small dollar lending financial literacy they may do mortgages or those types of things and they help along the the individuals that maybe aren't bein ready yet but become bank ready at some point down the road and this is important important development for us because we don't see them as competitors but they're complementary to what we do if you if you look at the next slide and you get an idea from all the CDFI banks in the country and you look at the low and moderate income areas around the country are depicted here with the little red circle and you can see there there's an absolute preponderance of those banks in the Mississippi Delta and Joel's mentioned the Community Development Bankers Association I happened to be on that board I know a number of these people and these banks in the south you can see that they go up along the east coast and there's a several in California but there's a vast portion of the country that is still not served by a community development financial institution and consequently we're having conversations all the time with bankers across the country about what it means to be a CD of mine how they can get involved and and support the work that's being done in these Salem eyes and there's there is such a need and yet at the same time it seems like it's difficult to to get banks to do sometimes the difficult thing so with that I'm going to turn it back to Joel who will take us through the final slides that we have today Joel thank you [Music] in many communities missionary and financial institutions are an anchor institution and are on the front line in providing affordable housing commercial and community development in economically distressed communities they leverage each dollar of equity up to eight to ten times with deposits to generate loanable funds and then use is institutional leverage to provide loans in mining communities this creates and retains jobs promote small business and entrepreneurship and restores more of an inclusive economy this work is more of a driving force for missionary and financial institutions rather than just a small segment of the work that a bank does that's intended to just comply with Community Reinvestment Act or CRA requirements apologies for that seemingly technical glitch I don't know how far back may have lost you I was talking about mission Authority and financial institutions specifically the the staff that works there and it serves on the board is people that are particularly drawn to serving their communities in related to minority owned banks in particular we see a much bigger percentage of representation from minorities that are underrepresented within banking for example at need American bank fifty percent of our staff are made up of tribal members which is something we're particularly proud of and we practice native preference with our hiring mission orientations offer traditional banking products as well as services that are not offered by traditional banks such as financial literacy programs savings incentives tailored loan and banking products like credit builder loans or multilingual staff to mention a few Native American Bank for example partners with a local nonprofit that provides financial literacy to high school students and opens up accounts through our mini Bank program which we subsidize with higher interest rates and match savings to help incentivize building responsible savings efforts on the next slide I wanted to talk briefly about the various types of mission oriented financial institutions that can appeal the depositors seeking a wide variety of social impact types this chart looks at the three main approaches to impact you may have seen be a place-based targeting impact for certain distressed geographies people based which targets impact for underserved segments of the population and in supporting particularly racial equity as well as thematic serving things to target certain outcome like green initiatives or healthcare equity and we think that Native American Bank is one of the few banks that is working to serve effectively all three areas in some capacity I wanted to also share on the next slide some resources or places that you can go to find out more about us and other mission oriented financial institutions to familiarize yourself with the market the US Treasury lists all of the CDFI banks within the country the FDIC keeps records on all the banks that are designated as minority under for minority depository institutions the CPA is Tom mention or Community Development Bankers Association is a trade organization for CDFI banks also national community investment fund or SM CIF does a lot of good work around research about the work that mission oriented financial institutions do across the country lastly we thought to mention one nascent organization that right now is compiling information on the impact metrics of every bank Amina in space to allow depositors to filter and find banks with whom they have mission alignment around certain themes or geographies is called mighty deposits so we wanted to highlight on the next slide what what's changed why hasn't social deposits been given as much attention in the past there's just a few reasons we we highlight to some extent it has and you may be familiar with the term Bank local right there's some that counts as a social deposit movement to hold your deposits with the local bank not some large bank that's just gonna you know take your profits to the California or New York you know this is a an evolution of that around greater impact but not a lot of banks out there you'll eat out their mission even the CPF i banks are not raising their hand saying we're here to bank for a racial equity or we're here to bank for financial inclusion and so it's it's somewhat getting the message out also there's a lot of banks out there that do a lot of good work a lot of good community development work but it's something of a minority of the the work that they do you know most of their lending is still in these conventional easy areas and that leads you know depositors to say well that's great but what do you do with the majority of the funds that you hold right so not a lot of banks have as high of what we call mission intensity as for instance we discussed with with Native American Bank and lastly a lot of people look for ownership and leadership alignment and that is few banks even CDF eyes are not owned or run by the ownership populations that they see just like you see when the an American bank with our tribal ownership and our leadership representative of our community with Native Americans and reservation representation so I'd like to talk about now you know really what our need looks like in order to fund our community development lending in addition to capital from our travel owners we need to raise deposit account balances we would like any socially conscious person foundation or company to consider placing even in a small portion of their idle cash into market rates FDIC insured deposit investments here at Native American Bank to help us in our funding of our community development lending and keep borrowing costs low to our projects any kind of deposit helps in whether it's ten thousand or ten million you know we can offer any type of products that you may be interested in checking savings FDIC insured on large amounts well beyond the conventional limit through programs that we offer I highlighted a few of the social depositors that have already come to work with us who are very proud of these relationships and very grateful for those that have shown support so far my united way here in Colorado the RSF Foundation which was a great relationship that we saw that really is helping us chart our impact activity impact charitable is a donor-advised fund which we see a lot of interest from that's in Colorado but across the country people that are holding on to funds that need to be deployed for charitable purposes while they while they wait around to get ultimately to their grant source having donor advised funds held here and lastly the ultimate funds which under had mentioned and believe the Candide fund set up which is a checking and writer one of our programs so I wanted to cover before we end a little bit more about how to provide support to Indian country so the on social deposits you know we went over the need and if you're inspired to support entities addressing the American issues in addition to bank deposits they're here some of the places that we suggest you also look there are 56 native non bank CDFI loan funds most of which serve a single reservation two in particular we like to highlight or Native American Community Development Corporation which is based on the Blackgate reservation in First Nations Oeste which is based here in Colorado First Nations is a financial intermediary that serves as serves a majority of the native citizen country and they raised social funding to downstream to smaller CDF eyes that they advised and underlined lastly we know that anyone interested in strategic getting into the American community can find good resources from Native Americans in philanthropy nonprofit based out of California really has good resources around finding places to give for those that are interested as a first step and of course the whole Amina fund that was recently set up specific to help serve any country is a great example of other groups of impact investors that are that are coming together for this this industry so with that that's the end of our presentation and now we'd like to make sure we have time for questions well thank you Joe Thank You Shannon and Tom for their enlightening presentation and I especially appreciate how thoroughly you went through the breadth and the history of the issue all the way to the more positive aspects of what can be done today in that regard perhaps we can pick up on a couple of questions that came through the through the chat one of them was on to more on the broad relationship side what relationships is have with federal reserve's work group on building assets in Indian country well we have a relationship with particularly the people at the thermos or branch of Minneapolis through their Center for Indian country development they do a lot of research projects on access to capital Indian country we've come to present in working groups with that group in particular so we follow their work and contribute to their work and value their commitment to highlighting this market for sure great and on the more technical side a question from Kathryn on what kind of loan loss ratio have you had on the commercial loan what kind of loan loss reserve you have to mitigate the risk great question so I really like that question because it helps me to spell one of the myths or assumptions that people may have about how risky it is to lend within Indian country one of our sources of pride is that when we've deployed loans to tribes tribal governments travel travel they own businesses we have yet to take a loss on those loans and that includes tribal housing authorities Alaska Native corporations right in a lot of ways this surprises people they can be more safe to land into that environment because when you're letting to the government there's a lot more resources at the play and commitment to their community and their project and you may have from someone who owns you know a car wash or something that if it gets into trouble you know the tribe is often going to be there to step up and say you know what I need my tribal members to to have access to this grocery store so I'm gonna subsidize it even if it's not pulling its own weight and so that's been a really good experience that we've seen lending to tribes we've had losses from some non tribal entities like any other bank that have kind of written with general levels that you've seen within the banking industry but really we're talking about losses that are you know in the low single digits in a given year below or something that we view is very manageable and certainly on the reserve side this the size of the reserves we hold is actually a little bit strengthened by the fact that we work with a lot of loan enhancements the US government has programs like the SBA but more particulars Indian country that are provided through VI a loan guarantees or HUD Indian housing guarantees that help us offset a lot of the exposure and keep our Lomas levels at very healthy levels for the exposure that our bank sees which I think are something on the order of over 10 percent of our exposure related to our portfolios is set by an allowance which is very high for a commercial bank and should be noted that if people are used to looking at loan loss reserves and ratios for non-bank CDFI as it is really a completely different calculation for FDIC insured banks capital ratios as well as in that kind of thing great thank you and I see a couple of questions that came in that until I hope one of you or one of your colleagues will implant one is on how can philanthropists and foundations best support your work and another is great presentation how do we invest and I find the context of that it would be interesting since you mentioned your Amina found earlier and we have Lynn on the on the line to hear a little bit from their perspective in the on how they went about their process for supporting faith and maybe you can fill that angel as well with how philanthropic foundations and investors can support you some good sure sure so you know we are not a we are not a non-profit we don't seek grants generally which is you know one of the biggest tools that foundations in philanthropy has in their toolbox to support organizations we think there are a lot of places that that can go we are very happy to just talk about the best way to support our bank is through becoming a deposit customer really and it actually works well for a lot of giving entities that might have a budget to say maybe you know 10 percent of my giving this year is going to support Indian country well maybe that portion when it's waiting to get deployed while you're figuring out where it goes where is it sitting if it's already you know earmarked for that impact it can sit here in an American bank to provide a return in the mean time so that's
simply deposits the best way we've had some entities provide below market rate debts at our hold company that help us turn that into capital which is a more involved in depth relationship that we could with the right investor but those are fewer and far between or harder to pull off than just a simple deposit and you know alumina we we love working with the folks over there and we think we have a lot of mission alignment which is something that we really value in our customers is finding places that they value our mission we look at the work that they do and we feel great that they're in relationship with us and I hope the dressage the several questions that were in that one let me know if I didn't or if you have any followers yeah thank you that was helpful and I think I'm part of the of the question that came in about how foundations can support yeah besides the grant piece did go to the deposit piece I see Lynn is on would welcome hearing a little bit from you Lynn on how all Amina came to work with with Andrea my comeback great thanks Andrea and hello Joel yeah it was one thing I will say is it was a really easy relationship to develop Illumina fund is committed to lending at least ten million dollars to Native American and we're really proud that we just did our first loan to ELISA but part of alumina which is our representation and innovative products and services and providing access to capital for those communities that have been historically excluded from the access because of systemic racism meant that we really had to think about who we were partnering with for the fund in terms of banking partners and accounting partners and servicing partners so Joel and I met about nine months ago at the First Nations at least a capital access convening and really had a discussion about the needs of alumina and then also the needs of Native American Bank which have been so eloquently outlined today in this presentation we really wanted a relationship that was based on reciprocity I'd also want to lift up that Native American Bank serves an invisible population in the US and the impact and seeing people understanding culture and investing in people is invaluable there is a great need as everybody has seen here to invest in basic infrastructure like Broadband's and roads and things that we take for granted in in the US there are many institutions that have a cash management strategy and our mission driven and need somewhere to keep their money and I can speak to how easy that relationship was how easy the online banking system is and really enjoyed getting to know Joel and Tom and Teresa throughout that process so if you for philanthropy and foundations and other impact investors who do have idle cash sitting this really is a social impact deposit invest in native people and it's a way of us being able to say that we see you and we know that you're still here and we want to support the work that you're doing and that's really the goals of the Ola Mina fund overall is to have people be seen for who they are and what they bring and we are really focused on building a relationship with Native American bank not just from a deposit side but what co-investments could look like throughout for the projects that they're doing that they outlined in Native America today so I'm more than happy to talk to anybody offline about either Ola Mena or why we chose Indian country but I would say for those who have a mission specifically to serve this population this is a really really easy way to move money that will be used towards impact great thank you very much Lynne and I do encourage anyone that is looking at this yet so let's chat so the folks at ole Amina and Joe before turning it back over to you for some further remarks I just wanted to bring in a couple of slightly more technical questions from from Brian here one is on the decision to organize Native American Bank as a bank rather than as say a credit union I may be your Tom and some historical news on that and the other that is it's related to the earlier piece about grants versus deposit is on whether there is any way to serve the equity investment needs of small Native owned businesses that can't or don't want to take on additional debt or I imagine also alternative sort of revenue based financing model and alike but so that we tackle both maybe yeah promo put it over to you for the decision to go as a bank rather than try you in whimpers I think that's a good fundamental question the differences between organizing as a bank versus a credit union I think would lie primarily in the idea that raising capital is much much easier Bank then is for a credit union they there are not many mechanisms for credit unions - particularly when you're starting out you're so small to generate capital and so I think the founder the bank felt that it was a wrap to go and particularly as a national banks lassie speak together and as it relates to the legislation that originated the Charter for the bank I think there was a lot of groundwork that had to be done but in the end I think it's allowed us to grow we've had multiple private placements done to grow our capital base and and each time we've been successful in acquiring additional capital as Joel said we raise a million of capital means we can grow ten million in deposits to fund the loan so the capital base we have is is call it a ten to one if you're familiar with banks leverage ratio that would be a well capitalized bank opportunities for so if that answers the question on your origin of the bank I'll move on to the other question about equity if there's a anybody interested in equity investments as I said we do private placements from time to time didn't know this might come up but we are putting together another private placement memorandum this quarter it likely will be out by mid-may and we will be seeking additional capital and issuing new shares to any investors that come forward and you know we don't take that lightly only because it dilutes existing shareholders that elect not to continue to invest and we're very sensitive to their ownership levels and their ownership interest and yet you know Shannon when she talked about her pipeline I think in that slide there were four loans that she highlighted and yet our pipeline today exceeds a hundred million dollars of new loans so we need additional capital and if you think of that ten to one ratio that means we need ten million dollars of additional capital to support a hundred million dollars of new credit coming on and so consequently the idea of deposits to fund those loans is an important element and consequently the need for capital is something that is ongoing something we've done we do that in-house we do not take on a third party to help us with that and a lot of times being country the face-to-face relationships are so important and the trust factor is so important that you need to build that relationship I think before you're ever going to get somebody to to really step up to the table and for us we've been successful at doing that and are very grateful and humbled for the effort country and in grow the bank which means we're doing the mission that we were originally set out to do great thank you Tom and very interesting to see how you will set up that the private placement in a way that both the capital flexibility that you need and it takes into account the prior shareholders rights and positions I think Brian's question was actually going to be to me equity needs of Native owned businesses especially small native owned businesses and my understanding probably similar to his from the slide is that you provide debt and the question I imagine goes to whether anybody else is addressing the equity needs or is that enough for four Coast businesses we talked about here every needs of individuals be the corporation for tribes themselves and I'm going to ask Shannon to step in and talk about it because they're many and varied now our loan products allow us to provide more of a capital resource than you might get at a traditional bank so Shannon let me know let me try to reframe it just to make sure that we capture what Brian was asking even though all these are are also interesting questions we're saying is there a way to serve the equity investment needs of small Native owned businesses that don't want to hold or take on additional debt so who's providing the equity is that happening it's a trend so that's an interesting concept so you know we see what do you did so in scenarios where we'd like tribal enterprises that are looking for financing we've actually seen some of the nations that in which those projects are located providing equity contributions and that's usually through some other form of a trust fund or something along that that in turn directs funds from its own investments to promoting economic development on on trust lands so as if for instance we're working with a tribe that has a healthy trust fund that again they direct the funds towards specific projects and it is equity so they are giving equity to these projects but really the idea is that they want to see these businesses started on the reservation and in both of these cases and the individual business owners are actually constructing something and one case the hotel and another chase at the convenience store so that that's the manner in which we see sometimes that these these projects happening and other cases we have individual business owners that are opening up a restaurant for instance and the equity investment is much smaller we've seen that coming through you know what they own individually what they've acquired accumulated over time but I think again the question is how how can that happen so that equity is contributed versus taking on additional debt and there are organizations that I think will facilitate that all the time in my head I mean nothing is coming to mind that specifically addresses that need but I'd like to take that as a takeaway perhaps to provide some suggestions or alternatives that might be utilized to answer that question thank you and and I see we're coming up on time so if there are no other major questions we can try to handle anything else that comes in also through a follow on you know Joel Shannon or Tom if you want to say any closing remarks if you don't mind I will also put up your thank you and in your contact information at the end great well and you can see our closing slide is this fine off a thank you in a number in three different native languages but we really we do really appreciate the opportunity to discuss Indian country as a whole and to talk about what need is there as well as help me have an impact in the communities that we serve and we be happy to answer any additional questions that there may be concerning how to join us in our effort to serve to serve the underserved thank you very much wonderful thank you all very much for all the fantastic work they do for sharing with us a little bit and as as you said at the beginning which was very well taken you know ever many well-meaning folks um people that have been really looking at the community development and equitable communities in the US have not paid enough attention to place so I appreciate it also how many addicts that idea that as part of you being seen and am being supported as is as if needed so thank you all thanks to all that joined us today if you would like to follow up with us or with the presenters we will share with you the deck if they don't mind as well as the recording of the webinar and here we have Joel's email address Jay Smith at NAB na komm and if you are interested in the work of the investor network generally please feel free to contact my colleague Kurt lie on Kurt at transform finance org and thanks again all of you once again for joining us and thank you to the many American bank for a fantastic very enlightening presentation today so until the next time thank you
