By Walt Williams
In 2024, Jim Reuter departed the Colorado-based FirstBank after a nearly four-decade career at the institution, including seven years as its CEO. It would be a short retirement.
Reuter was tapped as CEO of the Montana-based First Interstate Bank later that year. The regional institution had grown considerably in the years before Reuter’s arrival through bank acquisitions, but it wanted to pursue a different strategy of organic growth rather than relying on mergers. Under Reuter’s leadership, the bank has sold some of its branches, doubled down on its digital offerings and sought to increase brand density.
As for Reuter himself, the CEO says a few months away from banking helped him “reboot” before transitioning back into leadership — both as a banker and with ABA, where he is serving as chair of the association’s American Bankers Council peer group for midsize and regional banks.”I did a little traveling, but I also tried some new work-related opportunities, consulting and board work,” he says. “About six months in, I realized I still have plenty of music in me, and that building and leading teams and being on the ground with clients and teammates — and also industry involvement, like ABA — is what I’m wired to do.”
The following interview has been edited for length and clarity.
Q: You have said that succession planning is a priority for you. How did that belief influence your decision to step aside there and later step into the CEO role at First Interstate?
A: We call it “succession planning,” but my opinion is that if you’re building a good team, succession planning is happening because you should be hiring people who are as good or better than you are, and you’re mentoring them. If that’s your approach, one day you wake up and you realize, “The team’s ready to go. I’ve made a good mark here, but it’s time to hand it off.” That was the case at FirstBank, and [CEO] Kevin Classen has done a fantastic job. I think building a good team requires having that type of talent, and they should be able to take the reins.
Q: Coming back into the CEO seat, what specific elements of your leadership style did you adjust or amplify based on lessons learned during your time away?
A: My time away allowed me to reflect and realize that while the numbers part of banking is the outcome, the key ingredient really is the team. As a result, I’m more intentional about making sure teammates are in roles that play to their genius or their natural skills. I’m also more action-oriented, because when things move fast, it just motivates the entire organization. I’ve never made difficult decisions and then, after I made them, wished that I had taken more time. I believe I’m even more action-oriented in this second opportunity.
Q: After joining First Interstate, what did you find most challenging or most surprising about assessing talent in a new organization?
A: This has offered a great growth opportunity for me, because my prior team was made up of individuals who started their careers as management trainees and spent their careers at one organization. So the culture was just ingrained, and I had worked with them for years. When I joined First Interstate, I was an unknown to the team, and so quickly realized that I had to get out and make connections, listen and learn. First Interstate has grown through several acquisitions, so it has a management and leadership team that has diverse experience, and that’s proven to be a strength as they’ve seen more than one way to approach a challenge or opportunity.
Q: As the head of a regional bank, how do you foster a work culture where leaders in the organization feel empowered in their roles rather than overshadowed?
A: One of the keys to all organizations is to operate as flat as you can. We’ve recently made some decisions to flatten our organization chart. Too many times in larger organizations, those who have the decision-making authority don’t have the information, and those who have the information don’t have the authority to make decisions. Empowerment starts with clarity around roles and who makes decisions, with the goal to be client-focused organization. If you’re going to do that, getting decisions as close to the client as possible is really important.
Q: There’s a lot of uncertainty about the direction of the economy. How has that uncertainty shifted your approach to growth planning and credit risk at the bank?
A: First and foremost, banking is a risk-management business. I joke that most bankers have predicted five of the last two recessions, myself included. We’re always saying, “There’s uncertainty, and things are unprecedented.” But to me, the key is to have clear risk management standards and not to let growth goals or market pressures tempt you to deviate from those standards. Growth matters, but it must be profitable and aligned with our risk appetite, so it is staying true to the path that you’ve seen work in all economic cycles, and then you react accordingly to what’s going on around you.
Q: First Interstate is seeking to pursue organic growth, and not mergers and acquisitions. What shape has that strategy taken under your leadership?
A: To successfully grow a bank organically, you need to be unrelenting about the client experience and deepening relationships. You must constantly look for opportunities to go above and beyond for clients, because referrals should be a big source of business if you’re running a bank that is able to grow organically. One example: One of our teammates closed a loan for a Jeep. I don’t know if you know about the rubber ducky culture in the Jeep world, but if you ever see a Jeep with rubber duckies all over the dash, there’s a culture where Jeep owners take a ducky and put it on another Jeep if they see one that is also participating. Well, our closer for that loan bought a rubber ducky and brought it to the closing for that Jeep transaction. I guarantee that customer is going to tell a bunch of other people about that. To me, it’s that unrelenting focus on hospitality and differentiated service — you need to take a close look at the entire relationship and figure out how to deepen it.
Q: First Interstate has shed some bank branches while boosting online account openings. You have said that branches are still important, but the digital game must be stronger. How do you define the right balance between physical presence and digital convenience?
A: Branches still matter for many reasons, because even if you’re successful in opening accounts online, the majority of new clients and new accounts are opened in a branch. They’re also important billboards and brand builders. Even if someone doesn’t use the branch, they’re sitting in an intersection in their car and they see it. I saw a study finding that the average person only considers 1.4 financial institutions when they’re deciding to pick a new one, so being top of mind matters.
With that said, digital is key in today’s world, and being able to meld the two is the best of all worlds. In fact, I think as an industry, we need to get better at what I call the omnichannel, where you can move between branch and online. A mortgage is a good example. You may start the application online, but if it’s a purchase or money transaction, the closing happening in-person is a good experience.
Q: You’ve put heavy emphasis on improving brand density across First Interstate’s markets, with the bank having branches in 10 states. What does brand density mean in practice, and how are you measuring success?
A: The reason density is important — to go back to what I said in the previous question — is that the average person only considers 1.4 financial institutions, and so the denser your brand is, the more top of mind you’ll be. But also, it just comes down to math. As you try to market and spend money to raise awareness, you get more leverage if you have a continuous branch network.
Q: Banks of all sizes are facing increased competition from fintech firms, stablecoin providers and other nonbanks. What do you believe banks underestimate about these players?
A: I believe we underestimate just how quickly customers may change what they want. None of us probably can imagine having a phone without a camera, yet I don’t think many of us were walking around when we had early-generation cell phones saying, “I wish they’d add a camera to this.” It’s important as an industry that we pay attention to what technologies our customers are using, and I think a mistake we can make as banks is not looking right under our noses at the data to see what people are doing with their feet in terms of activity.
With that said, the end of banking has been predicted at least three times in my career. The first one I remember was when Bill Gates was quoted as saying banks are dinosaurs, and everybody would be banking with either Intuit or Microsoft Money. But we’re still here, and I bet on us being here in the future, but we have to pay attention.
Q: Given the competition, how do you persuade bank boards to think differently about technology spending?
A: A common mistake, that I don’t think is isolated to bank boards, is whenever bank leadership is approaching an investment in technology, they’ll say, “This technology solution is going to produce X, so does that create enough return on investment?” I always like to draw the analogy: We have teller lines, we have call centers, and what’s your return on investment in those? It’s the overall relationship and what you need in terms of being able to attract the type of business you want. I would argue, as you look at technology investments, be focused on the overall goals of the bank, not just that investment.
Q: At the federal level, the regulatory environment has been shifting rapidly. As CEO, how are you navigating these changes? And what regulatory developments do you believe will have the greatest impact on your strategic priorities over the next few years?
A: One thing I always remind myself of, as well as the team, is that most regulations have come about for a good reason. It’s how they get applied or codified that can be the issue, as the pendulum swings from one administration to another. I like the current movement to more tailoring. Two banks that are the exact same size could have very different business models, and their regulatory oversight should look different as a result. But I also think the lessons of the past matter as new entrants come into our business with lighter-touch rules. I believe ABA has done an excellent job of addressing some of those things, whether it be the Fed “skinny accounts” or now the Genius Act. So the lessons the banking industry learned must not be lost as new competitors come in.
