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Koger Propst, President

Access to Capital. Koger Propst, President. Status of Banks in Colorado. Main Street Businesses and Community Banks Caught in a Sub-Prime Trap Caused by Wall Street Most are Now Healthy Regulators and Public - Everything a Bank

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Koger Propst, President

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  1. Access to Capital Koger Propst, President

  2. Status of Banks in Colorado • Main Street Businesses and Community Banks Caught in a Sub-Prime Trap Caused by Wall Street • Most are Now Healthy • Regulators and Public - Everything a Bank • Dodd-Frank – Solved Some Problems, but Harms Customer Access to Credit

  3. Status of Banks in Colorado • Dodd-Frank - Mortgage and Other Rules – End of Judgment Banking? • 40% Colorado Banks Self Identified – Not in Business Five Years • Why you Should Care…

  4. Is Your Banker Your Partner? • A Partner Makes Strategic Decisions • A Partner Shares in Operational Decisions • A Partner Equally Shares Risk • A Partner Equally Shares in Upside Return • Partner’s Interests are Fully Aligned

  5. Your Banker is NOT Your Partner • A Banker Advises on Your Strategy Only • A Banker may not Engage in Operational Decisions • A Banker Cannot Share in Risks – Banker Must be Right 99.9% of Time – Loans Need Multiple Sources of Repayment • A Banker not Share in Upside – Receives Fixed Interest whether you Return 5% or 50% ROI • A Banker’s Interest do not Fully Align – Your Banker Wants you to Succeed, but First Obligation is to Shareholders and Depositors

  6. Prepare to Win • Develop Your Full Skill Set – Technical, Financial, Managerial and Strategic • Network – You Need Friends • Do Your Research • Build Your Business Plan • Develop Plan B, Plan C and…

  7. Prepare to Win • Build a Key Support Team • Build Appropriate Financial Depth • Build Personal and Business Liquidity – You will need it! • Be Realistic

  8. The Power of Leverage

  9. The Danger of Leverage

  10. Sustainable Growth – 10% Retained Earnings Who Owns Your Company

  11. Dealing with Bankers - Advice • You Have One Mission – Long-Term Profits • Long-Term Profits Make all Other Goals Possible • Be Realistic • Picking the Right Banker – It Matters! • Bank’s are Regulated Institutions • No News is Not Good News – Communicate!

  12. Dealing with Bankers - Advice • When Win…Don’t be that Guy • Build Financial Depth and Liquidity • You and Your Banker Cannot Outsmart the Market – Homebuilders… • Don’t Chase Irrational Competitors • Build a Company that is Good in Good Times and Great in Bad Times

  13. Dealing with Bankers - Advice • If Win, Don’t Assume it Makes You an Expert in Everything. • Even if Your Banker Believes It! • “Play Above the Death Line” – Jim Collins in “Great by Choice” • Know Your Competencies

  14. Access to Capital • Thank You

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