When Tom Ogaard joined Native American Bank as president and CEO in 2013, it was an institution in transition. The bank had been formed more than a decade earlier after several Native American tribes purchased the $18 million-asset Blackfeet National Bank in Montana, but for several years it had been subject to a formal agreement with the Office of the Comptroller of the Currency to address unsafe and unsound banking practices, and it was seeking to improve its outreach to the communities it was created to serve.

Ogaard spent most of his career in banking at that point, landing his first job in the sector at age 22. He would bring that lifetime of experience to NAB.

Physical distance is one of NAB’s larger challenges in serving rural populations. But that personal contact is important because there is distrust of banking institutions in Native communities. NAB has invested in financial education to bridge that divide.

“I knew, having worked in Indian country in my past, what it was going to take to establish a foothold and move things forward,” Ogaard said. “For Native American Bank to be successful, it’s about building relationships. And in Indian country, it’s face-to-face.”

NAB is now a $400-million-asset community financial development institution with offices in Colorado, Montana and Washington state. It exited the formal agreement with the OCC in 2016 and has seen rapid expansion in recent years. Ogaard’s goal of meeting customers face-to-face remains in place, even if it proves a challenge among populations where distances between neighbors can be measured in miles. For instance, one of its branches services the Blackfeet Reservation in Montana, home to roughly 10,000 tribal members living in a geographic area larger than the state of Delaware.

In addition, Ogaard recently took on a new responsibility as chairman of ABA’s Government Relations Council, which provides ongoing policy guidance to the association’s leadership. In that role, he seeks to represent all banks and hopes to advance the banking industry agenda — although he acknowledges that advancing policy during an election year can be daunting.

“I’m going to keep an open mind about what it is that we can get done,” he says.

Rising through the ranks

Ogaard was raised in Crookston, Minnesota, by parents who wanted to instill financial responsibility in their children at an early age. He and his siblings attended a private Catholic high school, but they were expected to pay for their own tuition by working jobs during the summer.

“At the time, you’re thinking, ‘Wow, all this money I’m making over summer is going to school,’” he says. “But it prepared us when we were off to college: We had to find our own way to pay.”

Ogaard didn’t come from a banking family. His father was a surveyor and city administrator, while his mother was a homemaker. After earning a finance degree in 1978, Ogaard was hired as an assistant controller for a thrift bank in Detroit Lakes, a resort community east of Fargo. He was promoted to mortgage servicing manager on his first day of the job.

“Right out of the get-go, they gave me an office. And I was like, ‘Okay, I have a staff,’” he says. “I was a 22-year-old kid, trying to manage our mortgage area.”

While we offer a lot of the same traditional products, we don’t necessarily use traditional means to assess whether or not, for instance, a particular credit is creditworthy,” Ogaard says. “On the commercial side, we do everything that you would do at a typical bank, but we also look at other things to mitigate risk

Ogaard would continue his rapid rise through bank management, opening a new branch for a different bank at age 24, then being named regional manager of more than a half dozen Minnesota banks at age 28. He joined Citizens First Bank in Illinois in 2009 as EVP and was promoted to president and CEO a year later. Through his work at Citizens First and other banks, he had gained a reputation as someone who had helped institutions weather the financial storm of the Great Recession, which put him on the radar of the owners of the then-troubled NAB.

Osgaard was brought in as part of a new management team to address the safety and soundness problems raised by OCC. He oversaw the execution of a new strategic plan that resulted in the agency terminating its enhanced oversight of the institution and raised millions of dollars in new capital. The CEO also expanded the bank’s staff, from 16 employees when he first joined to more than 60 today, and last year oversaw the launch of a new branch in the Tulalip Reservation in Washington.

“I never thought I would come to a bank this small at the time,” he says. “It was just under $60 million and I had just left Citizens, which had 21 branches, all of which were as big or bigger than this one bank. And I spent 25 years of my career at midsize regional banks, so I had a lot of larger bank experience, but I knew I could get my arms around this bank.”

Helping customers

NAB was founded in 2001 when 21 tribal investors created its parent company, Native American Bancorporation. A certified community development financial institution, the bank’s mission is to promote economic development in areas underrepresented by traditional financial institutions.

NAB provides banking services to communities that face disproportionately high poverty rates. Among the 34 U.S. counties with high concentrations of American Indians and Alaska Natives, the average poverty rate is 31.5% for the total population and 40.5% for the Native American population, according to the U.S. Department of Agriculture. As a result, NAB approaches banking differently than most other community banks.

“While we offer a lot of the same traditional products, we don’t necessarily use traditional means to assess whether or not, for instance, a particular credit is creditworthy,” Ogaard says. “On the commercial side, we do everything that you would do at a typical bank, but we also look at other things to mitigate risk. It could be that we look for government guarantees … and we have become experts at how you not only structure particular credits, what it looks like in the capital stack, but also how to relate to the borrower we’re talking to.”

Approximately 95% of NAB loans are made to Native- and tribal-owned companies, and nearly 90% of its commercial lending supports projects in underserved areas. Among its more recent projects, NAB provided capital for an opioid treatment facility on Turtle Mountain Indian Reservation in North Dakota and a grocery store in northern Minnesota — in both instances, providing services that tribal members previously had to drive at least 70 or more miles to get.

Physical distance is one of NAB’s larger challenges in serving rural populations, and Ogaard jokes that for him and his staff, “It literally can be Planes, Trains and Automobiles.” But that personal contact is important because there is distrust of banking institutions in Native communities, he says. NAB has invested in financial education to bridge that divide, showing potential customers how to open checking accounts and take out loans. It is also exploring technologies such as interactive teller machines to give customers in areas without a physical branch a means to contact bank employees.

“It’s a different niche and business model that we have to try and serve a population that’s woefully underbanked and has a difficult time finding access,” he says.

Advancing policy

CDFIs as a sector have come under increased scrutiny during the Trump administration, which last year proposed rolling back the Treasury Department’s CDFI Fund and preventing the program from exercising its discretion to make awards. Lawmakers have instead proposed maintaining funding for the program. Ogaard notes that for institutions to receive certification, they must conduct at least 60% of their business in low- to moderate-income areas.

“The CDFI Fund is really important,” he says. “And quite honestly, funding it at $325 million or $350 million is nominal in the entire federal budget, but it helps the banks like ours, where we get a technical assistance grant or a financial assistance grant to put together programs where we may hire a consultant, or we may put somebody on staff that is going to help us with those operating costs that we might not otherwise be able to do.”

Funding for the CDFI Fund is one of many issues facing the banking industry this year, with Congress likely to take up legislation on cryptocurrencies, community banking and more. As chairman of ABA’s Government Relations Council, Ogaard notes that if you ask bankers about their most important policy priority, you are likely to get a wide range of answers. The committee’s goal is to hone those into a realistic set of policy goals. The CEO says he remains hopeful about what can be accomplished.

“Some of what we’ve heard from CFPB, from the Treasury Department, from the regulators themselves, has been very promising about reducing the regulatory burden, particularly for small banks,” Ogaard says. “So has some of what is being advocated in terms of moving the metrics up so that when banks hit a $500 million-or a billion-dollar level, you’re not stressed with additional reporting and other regulatory and compliance activities. I think that’s a pragmatic approach.”

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