Comment Detail

Comment

Belt Valley Bank is a small community bank located in the Central Montana town of Belt. We have been in business since 1936 and historically have been considered an Ag bank. With changes over time, our $80 million dollar bank has tried to adapt to the local economy, and although we still do a lot of Ag lending, we also now do a lot of construction of 1-4 family homes, along with more nonconforming type real estate lending such as mobile home loans. All of our loans are kept in house and we do not have a secondary market option. For years, our loans were pretty much strictly funded with our deposit base. As the need for construction loans and nonconforming real estate loans increased in our area, we relied on pledging investments to the Federal Reserve Bank to secure an advance line to fund loans in excess of our deposits. As our asset base grew, BVB got down to $0 in investments and had close to 100% loan to deposit ratio. We started looking for options and thankfully found the FHLB to work with. We were able to pledge certain loan types for a credit line which allowed us to increase our construction and nonconforming portfolio even more. At the peak of our Ag and construction season, we were nearing 115% loan to deposit ratio. BVB is extremely well capitalized, Tier 1 leverage ratio of 14.14% as of 6/30/22, and are regulated by the Federal Reserve Bank along with the State of Montana. My fear is that if membership in FHLB is opened up to non-financial institutions that are not regulated near as much as banks, liquidity issues for small banks such as ours will become more costly and will restrict our ability to provide the needed real estate funding that our communities have come to depend on. I ask that you consider the possible domino effects of the decision you make on this proposal. Thank you for your consideration.