Speaker 1:
As a bank that focuses on business, we work with business leaders all day, every day. We have a front row seat to what's working and what has potential. The First Business Bank podcast is dedicated to sharing insights to help you work better, smarter, and faster to achieve your goals. Let's get into the show.


Mark Meloy:
Hello, I'm Mark Meloy, CEO of First Business Bank. Welcome to the First Business Bank podcast. Today, we're talking about First Business Banks, bank consulting business line, what is it, why are we doing it, and how can you learn more about it? As opposed to acquiring or buying a business, First Business Bank has a rich history of hiring talented people to build successful lines of business. Think of accounts receivable funding, equipment finance, floor plan financing, and even our private wealth business to name a few. You get the picture and that's a familiar part of this story as well. My guest today are two members of our talented bank consulting team who will talk about how this got started and their vision of where we are headed, including some of the successes that we've already seen occur. They're each going to introduce themselves before we get our conversation started. Bill, let's start with you.


Bill Uelmen:
Okay. Thanks Mark. My name is Bill Uelman. I'm president of the First Business Bank, Bank Consulting Group. And for really, for the most of my 30 plus years experience, I've been doing consulting with other banks. Uh, my career started really with MNI Bank, uh, working with clients that established a Nevada investment subsidiary, uh, for purposes of managing their, their investment portfolio. So for roughly 25 years, I worked with these banks and their, their bond portfolios and strategies that would fit their bond portfolio into their balance sheet. Over time, this led to providing really full bank consulting or balance sheet consulting, I should say, um, by providing an asset liability model and really strategies for better, uh, bank balance sheet management.


Bill Uelmen:
Uh, I joined First Business Bank five years ago, uh, initially to serve as the treasurer of the bank, to manage the investment portfolio, uh, asset liability funding, uh, interest rates swaps, um, which was really great firsthand experience for me, uh, beyond, you know, my consulting experience. So I learned really more, a lot of the ins and outs of, of these balance sheet strategies. Um, we established our bank consulting business line three years ago, uh, to really, to offer our experiences to in-services to, to other banks. I teamed up with Jim Ropella, who's the former CFO of First Business Bank, uh, to provide these consulting services.


Bill Uelmen:
To date in the, in the three years, we've added a little over 2 billion in fixed income securities and consulted with six banks, um, really seven banks, including First Business Bank and our, our trust company as well that we manage their fixed income portfolio. So we provide asset liability consulting, uh, asset liability validations, Nevada Subsidiary Services, uh, and investment portfolio consulting for banks that don't have a sub. And we've also participated a little over $20 million in loans with our clients. So it's been a nice added benefit for our clients considering really all the excess liquidity in the market. Jim.


Jim Ropella:
Thanks Bill. My name is Jim Ropella. As Bill said, uh, I was a CFO at First Business Bank. Uh, that was the tail end of my 40 year career, uh, in, uh, the banking industry, primarily in accounting and finance. Early on in my career, I was afforded the opportunity to work at a relatively large regional bank that was transitioning from the old tools of asset liability management and interest rate risk management to the, at the time new technology of simulation and modeling so that we could really look at different scenarios and how interest rate risk manifested itself in those different interest rate scenarios.


Jim Ropella:
Lots of things have changed over the time. Um, most of them are efficiencies, many of them are because the technology has improved so much. We're now able to do a lot of more detailed analysis, giving really better output to help identify and control interest rate risk. But I'll tell you one thing hasn't changed over those 40 years, and that is the output is only as good as the quality of the input and the assumptions. And that is one thing that will never change. And back when I joined the First Business Bank in the year 2000, I was very fortunate that asset liability management was part of the DNA of First Business Bank. That's in large part due to one of the co-founders Jerry Smith. Jerry Smith had a very long and respected career in the banking industry. And for a period of that time, he ran a consulting business that was primarily all consulting for community banks. So I was very excited that First Business Bank dedicated resources to asset liability management and actually used it for decision-making purposes.


Jim Ropella:
I didn't come from a larger bank and the differences between a larger bank and a smaller bank are innumerable. For example, I had a team of people that did asset viability management. I had a team of people that did investment portfolio management. There was a team that did daily liquidity and long-term liquidity planning. And then there was another team that did capital planning and was responsible for capital management. Of course, as this new CFO at First Business Bank, a relatively small one location entity at the time, we had a finance team of a few people. Each of those people accepted some of the responsibilities, but none of us were investment professionals. It was with good fortune that First Business Bank had outsourced its investment portfolio management to MNA Portfolio Services, which is when I met Bill Uelmen.


Jim Ropella:
When I first met Bill, I was afforded the opportunity to continue to learn about investments and Bill took the time to teach me. So even though we were paying for services and we only paid for what we used, that was a fraction of if we would have had to hire somebody, I received so much more from my relationship with Bill. It's safe to say I was a satisfied client to the Bill's until I met my retirement, uh, about six years ago. Mark.


Mark Meloy:
Thanks Jim. All right. I'm going to start the conversation with, uh, the question for you, Bill. Why is the First Business Bank offering the suite of services to other financial institutions?


Bill Uelmen:
Sure. Thanks mark. Yeah. So as I mentioned, I started as the treasurer of First Business Bank about five years ago, and I had left the consulting business. And after a few years away, a few of my former clients came back to me and said they wanted to, to team up again and have us manage their investment portfolio. So we started to put together the, the bank consulting business. And then as Jim mentioned, you know, I previously consulted with First Business bank going back to the early '90s when they set up a Nevada subsidiary. And First Business Bank was really just, I think, out just out of their de novo period. So it was really a new experience. Uh, I really enjoyed working with Jerry Smith and the team at that time, because I could see how they were... Had a unique business plan and entrepreneurial spirit, you know, by going out and hiring personnel to start a business, really rather than trying to buy a new business line.


Bill Uelmen:
So I really liked this concept. So I thought it was a good match for us setting up a bank consulting business, really from scratch, that would be unique in the industry. So Jim and I teamed up together to provide the services. And I think our combined experiences, uh, in the market's, mind more in the capital markets investments and, uh, at that activity in Jim's as CFO and balance sheet management, I think really allows us to offer a really unique suite of services to our clients and best of it. But I guess we both really enjoy working with our clients. Um, you know, that's part of our, our mission of, of First Business Bank, is having fun and we really enjoy learning the, the different balance sheets and the strategies that they implement, um, as we know that really no two banks are alike.


Mark Meloy:
Bill, you mentioned before you joined First Business Bank five years ago, as a director of treasury, did your responsibilities included [inaudible 00:09:25] management, investment portfolio management, and liquidity management, seems to be a full slate, full time job in many, many ways. Uh, why did you personally believe that starting the bank consulting business was going to be possible for you to manage and continue your, your other responsibilities?


Bill Uelmen:
Sure. That's a great question. Um, you know, working as treasurer of the bank, uh, has been a great experience for me. Um, as I mentioned, I've been a consultant really for the majority of my career. So really, uh, getting in and learning the ins and outs, um, essentially had to teach an old dog new tricks. So I... It was really fun to be able to, to, to learn the ins and outs of the funding and other strategies, um, and actually implementing them on a daily basis. So it was very rewarding and challenging for me. But in return that was really able to bring my years of experience to First Business Bank as well and train the team, uh, to be able to do a lot of the things that I do.


Bill Uelmen:
So that was a fulfilling part of, uh, really for me is being able to transfer that knowledge to the finance area and allow them to really to grow and take on more responsibilities. And really this is how I approach our bank consulting services. I, I try to educate the board and the staff and everyone involved so that they understand and they talk to regulators and have a, a deeper knowledge of their balance sheet and investment portfolio that they can use and possibly take it back in-house at some point.


Jim Ropella:
Just to add to that, uh, Bill and I were just talking yesterday, Mark, um, when it comes to teaching the clients that we have, it's important for them to remember just because they outsource a service that doesn't mean they outsource the responsibility. They have to be conversant and understand what we do for them and with them as they talk to their boards, their regulators. It's very important that Bill and I, uh, take that to heart.


Speaker 1:
Yeah. Great point. Jim, you were the CFO at First Business Bank for a long time and, uh, you retired in 2016. So why now are you working as a member of the bank consulting team?


Jim Ropella:
Well, that's a great question, Mark. Um, I think, I think we've all, uh, heard the quote, I think it goes something like choose a job you love and you'll never work a day your life. Well, I did love my job as CFO at First Business Bank, but after nearly 16 years, which included about 496,000 miles on my Camry and platinum status on one of the airlines, because of all the commuting that I did, I thought it was time to devote more time to my family and I retired. And it wasn't possible at least at that time to be the CFO from home 2000 miles away in California, it just wasn't heard of. So it was, it was the right time and the right circumstances.


Jim Ropella:
However, when First Business Bank hired Bill, I jumped at the chance to partner with Bill and work in the consulting. Bill already mentioned that we share the passion of SFI ability management, bank balance sheet management. We share a passion of teaching people. I love to, uh, see people grow in a position. Some of my greatest successes with people over my, uh, four decades as a professional are to see other people grow and get, um, better positions because of things that I may have had a hand in. And that's been very important to me. So this job became my new way of enjoying banking.


Speaker 1:
Okay, great. Great answer. Jim you mentioned Bill's name a few different times already, but why was part- partnering with him so integral to your decision to return?


Jim Ropella:
Well, I think over, uh, my career, there's been many, many people that have contributed to my success. Uh, I, I think it's important, um, that you surround yourself with good people. Um, many of them because of, I left my first position at a bank due to a merger and you kind of forget to recognize and thank the people that helped, uh, make you who you are. And I just... I don't want to do that ever again. I don't want to forget. Bill is the latest example of, uh, and I'll say this, the latest example of an influencer, but also one of the longest tenured relationships I have, a business relationships I've had. I have many people come and go, uh, it's not many, uh, where you work with somebody for, uh, you know, 20 years. And, uh, over that time we've become friends.


Jim Ropella:
Bill's a wonderful person, is very good at teaching me very patient, uh, with some of my Colombo type, uh, answers. And if you don't know who Lieutenant Columbo is, look him up. (laughs) Um, but, uh, Bill and I just share so many of the same philosophies and it's probably no secret that we share those philosophies because we have worked together so long. So with Bill's influence in getting this consulting services started up, it just seemed natural, uh, for me to actually work with him instead of being a client of his. Um, and, uh, I'm really looking forward to continuing this. Um, Bill continues to teach me things each and every day.


Mark Meloy:
Bill, with your experience, I imagine you envisioned a few alternative paths when you were contemplating your future several years ago. Why affiliate with a bank and more importantly, why First Business Bank?


Bill Uelmen:
Sure. I started with a bank, uh, am M&I Bank back in the early '90s. I really got to know First Business Bank over time, as I'd mentioned earlier, very good entrepreneurial approach to, to their business lines. And that really attracted me to the bank overall. And I really wanted to put something together from the ground up. So I wanted to start fresh, um, use my experiences, use Jim's experiences and put something together that we could offer to our clients. And I thought First Business Bank was the right platform to be able to do that. And I also really enjoyed working for the bank as the treasurer. So it allowed me to, again, learn a lot of things firsthand that I was consulting on, that I'd had a lot of practical knowledge on in the past.


Bill Uelmen:
You know, and we compete, you know, we compete with other firms. There's a number of broker dealers that, that offer bank consulting services, which they have very talented staff and, uh, sophisticated analytics systems and, and have invested a lot of money into these systems. So these brokers are very important to us. So we do trades with them and work with them, but I wanted to put something together from a consulting standpoint that was really independent. I wanted to be able to give unbiased opinions on investment securities and not use our services to sell other things such as securities or other things to our banks. So we wanted to put something together that was a little unique essentially to some of the other bank consulting groups and not offending any of my broker dealer friends, because again, they are very important to our business line.


Bill Uelmen:
Just like I did with First Business Bank, um, as the treasurer, I'd like to serve and view myself as the outsourced treasurer of these banks. So many of our clients may have lost personnel or maybe are smaller and don't have the resources to hire a portfolio manager, or asset liability consultant, or in-house, so I'd like to take that opportunity to educate and, and serve our clients, um, with our experiences and knowledge. And, you know, we're not a broker dealer, you know, so anything that we price is very transparent to our clients and, um, what you see is what you get.


Mark Meloy:
Mm-hmm (affirmative).


Jim Ropella:
That was very important to me as well when partnering with Bill, is the transparency of how we charge for the services that we do provide. Being a long time client of Bill's, there was a time period in his career that the provider of services, it wasn't very transparent and it always was something that I clamored for. And that's what Bill and I decided that was going to be very important, was people will know what they're paying for and it's important that we are independent when it comes to services. And I can't emphasize enough that, um, Bill's independence working with multiple brokers provides the best price opportunity for our clients.


Mark Meloy:
Good. What other benefits do you see by utilizing outsourced solutions like First Business Bank in this case? Jim, I'll start with you on that.


Jim Ropella:
Uh, well, let me, uh, be very specific to outsourcing in general. I'm a huge fan of outsourcing. I believe that outsourcing, especially for investment management and asset liability management allows the bank to bring on the most talented, experienced provider without paying for the entire person's employment, uh, salary benefits, because at most banks it is not a full-time position and it doesn't have to be. So why pay for more and then have to worry, uh, constantly about, um, if the person is going to be retiring, or as Bill's talked about, uh, leaving for any reason? We, we like to give the example that somebody wins the lottery and, um, chances are, they're not going to want to come in to work the next week, what is the succession plan?


Jim Ropella:
And that is really the second benefit besides being very efficient in use of resources, financial resources, it's a great succession plan. The CFO or the CEO of a community bank right now might be the person that does the investment portfolio management or the, the bank of knowledge for their asset liability management. If that person leaves, and there's no succession plan, the board or if the CEO is still staying there, has to search for someone that's going to fit that role. And chances are those people don't exist anymore. Many of the larger banks that used to teach all of this two people, um, have taken different approaches. There's no trainee programs at banks anymore, so everybody's really developing their own talent and it's expensive. So I believe it is very important tool for community banks to use as a succession plan.


Mark Meloy:
Yeah, I think that's a great point. Jim and I, as I see the different ways that the knowledge that you two and the rest of the team brings to this service for banks, um, and, and that whole idea of succession planning there, you know, there might be somebody in the company, right, who is, but who's somebody who's not ready, young, hasn't had the experiences, and so that succession plan, this opportunity to kind of fill the gaps, so to speak by using First Business Bank Consulting Services, uh, because I can say from real life experience, I have learned a lot from both of you in our own asset liability management process, and think about how that can be replicated, um, for, um, emerging potential leaders in other community banks, through, uh, working with you in the asset liability management and related services that, that, that come with, with bank consulting.


Bill Uelmen:
Yeah. And if I can add too, really our largest clients and really almost all of our clients that are using our services, uh, really has been a succession planning strategy. Um, they either had lost a key personnel recently and decided to outsource, or they have, um, you know, again, as an aging population in banking and we wanted to have the ability to be able to replace and succeed essentially the, the people that leave the bank. And what we offer is something that's a lower cost solution many times than going out and hiring a new personnel to manage investment portfolio or asset liability.


Jim Ropella:
And very specifically our very largest client is with us because of that philosophy. Um, Bill just mentioned, and our very newest client in AL management is also in the process of really putting into a succession plan surrounding asset liability management and the investment portfolio management.


Mark Meloy:
Great information you guys. Well, thanks for taking time to share your thoughts and experiences with our audience today. And to you, our audience, thanks for listening to the conversation. We hope he found the topic interesting and watch for the premiere episode in a podcast series, supporting our First Business Bank's, bank consulting line of business coming soon. Let us know if there are other topics or information you'd like to learn more about and join us next time on the First Business Bank podcast.


Speaker 1:
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