The Sac & Fox tribally owned bank supports Indian country with mid-size loans, minors trust management, financial literacy and more
When it comes to capital access, Indian country is chronically underserved. Pinnacle Bank fills a much-need niche by investing in smaller projects, whereas the big banks want to make $100 million-plus casino loans. “Our sweet spot is probably $3 [million] to $8 million [loans],” said David Burrell, Pinnacle Bank’s chairman and CEO.
In 2009, Burrell helped orchestrate the Sac & Fox Tribe’s (Meskwaki Nation) purchase of the community bank chartered in 1927 and headquartered in Marshalltown, Iowa. The tribe acquired Pinnacle Bank for three main reasons. “First, they wanted to diversify their income away from majority reliance on gaming,” Burrell said. For the past 25 years, the tribe has operated its Meskwaki Bingo Casino Hotel and Convention Center, one of the largest full-fledged casinos in Iowa and the biggest employer in Tama County. “Secondly, they wanted to pay themselves to handle their minors trust business. Thirdly, they wanted to have a vehicle to help their tribe and tribal members with financial literacy,” Burrell added.
Pinnacle Bank is one of only 18 Native-owned depository institutions in the country, and the only one with active trust powers. Since the tribe bought Pinnacle, the bank has grown its assets by nearly four times, from $55 million in 2009 to $200 million today. In addition, the size of Pinnacle’s trust department is about $200 million.
Burrell and Jody Fank, assistant vice president of business development, anchor Pinnacle’s Native American Services department. The pair are constantly traveling Indian country, meeting tribal councils, CFOs and other executives in-person to discuss a tribe’s unique financial needs. They’re committed to developing personal relationships with their tribal clients. “We’re responsive. You don’t have to go to a 20-member loan committee. The loan committee is two or three of us,” Burrell said.
The Native American Services department prides itself in tailoring services and solutions to each tribal nation, whether its revenues come from forestry, fisheries, oil and gas, agribusiness, farm and ranch land, or other tribal investments. “Just like each tribe is a sovereign nation, our approach is to customize each deal with each tribe. We don’t necessarily have a cookie-cutter template. Each deal is its own deal,” Burrell said.
Pinnacle’s lending department can assist with United States Department of Agriculture (USDA), Bureau of Indian Affairs (BIA), or Small Business Administration (SBA) Guaranteed loan needs. “With the BIA [Bureau of Indian Affairs 90% loan] guarantee, we can do up to $20 million,” Fank said.
The bank has made loans to tribes in Washington State, Oregon, California, and Florida, it’s hoping to close one in Oklahoma soon, Burrell said. “Most of our business is in California, because there are 108 [federally recognized] tribes out there,” he added. “We have loaned money for tribes to buy land, put up hotels, convenience stores, remodeling, repairing lines of credit, equipment loans….”
Pinnacle Bank offers tribes standard depository accounts: checking and savings. Its trust department handles minors trust management, endowment accounts and general investments. “We can also administer a 401K program for a tribe or tribal casino or other business entities,” Fank said.
Pinnacle’s culturally specific financial literacy program was recognized by the Native American Finance Officers Association as its financial literacy program of the year for 2012. The tribe likes to pair financial literacy education with its minors trust management.
The bank also helps tribal members increase their credit scores with its Tribal Credit Repair Loan Program, which Pinnacle administers through the tribe, because a tribal member’s per cap is used to secure the credit. The personal loan program and/or a vehicle loan program to tribal members can help with future financial transactions like renting or purchasing a home. “We developed that program for our tribe to help them increase their credit scores to get cheaper insurance on their cars or so they can rent apartments,” Burrell said.
Many of the tribal members Burrell works with through the Tribal Credit Repair Loan Program “either don’t have any credit, or they’ve got a few bad credits, like they didn’t pay the $50 deductible on the hospital bill, or they switched cell phone companies and they blew off the last $200 or $300 cell phone bill, because they just didn’t understand it was important. Those then become a judgment, and man, they hammer your credit.” Pinnacle walks tribal members through their credit reports and identifies those outstanding judgments to pay to improve their scores, among other guidance.
Flexibility is a key advantage of working with Pinnacle, which allows tribes to set the pace of partnerships and transactions. “Some of these deals have taken a couple years to come about, and some of them want to do it in three to four months,” Burrell said.