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Felecia Hancock

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BankLabs in the News: Arkansas tech firm has patent on helping banks share loan risks

By | Article, Insights

Article written by Steve Brawner at Talk Business and Politics September 28, 2022. Original post here.

A tech product patented by an Arkansas company is helping smaller community banks connect with each other to share the risks of larger loans.

Little Rock-based BankLabs holds the patent for Participate, which company leaders say makes the participation loan process more efficient and automated. The company last year received the only Arkansas-based patent for a loan participation automation product.

“A big part of what we’re doing is ‘democratize loan trading for all those banks that aren’t big,’ so it’s providing a level playing field for the Davids versus the Goliaths,” said Matt Johnner, the company’s Dallas-based president.

Johnner and Mike Montgomery, the company’s Little Rock-based CEO, said Participate allows smaller banks to engage in participation loans, where financial institutions share larger loans with other banks to reduce their risk. Banks have policies governing their lending activities, including a maximum loan amount, a limit on a particular client, and a limit on the percentage of loans in a particular sector such as construction. The originating bank services the loan and has the relationship with the borrower, who typically doesn’t know about the arrangement.

The two said participation loans traditionally have been based on personal relationships within city limits. Smaller banks often don’t have tools, processes or skill sets to participate in certain loans. Transactions are often managed by spreadsheet, FedEx shipments, and back-and-forth attorney interactions.

Participate automates and removes frictions and can operate 24-7. It enables processes to be done digitally so loans can close in a couple of weeks. It automates what portion of the borrower’s payment goes to both the originating bank and the participating bank and tracks the balances. It handles electronic document management, workflow, e-signatures, integration of the participation agreements, and the legal agreements between the two banks. They said the processes eliminate the surprises that occur at the end of a loan. Banks can do smaller loans that weren’t efficient for them, and they can participate in bigger ones they couldn’t previously handle.

Montgomery said many rural banks have less than a 70% loan-to-deposit ratio, which is not an efficient way for banks to operate. Banks only make money when they are lending; deposits are a liability. Banks in markets without commercial borrowers are disadvantaged.

“I think that this makes it easier for the rural and community banks to compete with the great big guys,” he said. “I think they can maintain personal relationships in their markets. But they can kind of drink a little bit from the wealth generated in banks in more populous areas that have commercial real estate. They’d like to have some of that on their balance sheets and vice versa. The guys that are in mid-city would like to have some ag loans, and they don’t know a farmer on the earth.”

Montgomery said BankLabs’s target is to have a network of one or two originating banks in every state with 2-5 downstream banks. He believes the company can reach that goal in 2-3 years.

The company’s overall mission is to help the dwindling number of community-based financial institutions compete with bigger banks using technical products. It tries to find backroom or front-end processes where a technical solution can increase efficiency and add value. Then they can operate it or find a better parent and sell it.

“It’s kind of that kind of a cycle,” Montgomery said. “We’re looking for a problem, see if we can’t solve it, see if we can’t solve it with efficiency, and make sure it monetizes itself on our side or on the back side.”

BankLabs has 21 employees, with about 10 in Arkansas and the rest spread across the country. It expects to hire more as Participate grows in the market.

It was founded by Montgomery, an early player in the Arkansas financial technical services company Systematics that is now known as FIS. The company is now based in Florida but still has a strong Arkansas presence. He also helped start Pinnacle Bank and was an early investor in Delta Trust & Bank.

He said he started BankLabs in 2010 during the banking crisis after seeing how big banks were depressing prices by dumping giant pools of foreclosed assets on the market. At the same time, banks had stacks of folders in their offices. He saw that community banks could benefit if their processes were more automated.

Montgomery in 2015 believed the construction industry was poised for a comeback, so the company created Construct, which connects borrowers, builders and banks.

Construct went to commercial sale in January 2016. Johner said the product eventually grew to 150 customers and was helping manage $70 billion in construction loans associated with roughly 100,000 projects. The company sold the product line to Abrigo this year, sending 15 of its then 35 employees to Abrigo.

Construct started with two clients, one of them Southern Bancorp, an Arkansas-based community development financial institution serving underserved areas and clients.
It has 54 locations and is the only financial institution in seven of its markets and one of two in six of them.

John Olaimey, the company’s president and CEO, said the company was an investor in Construct and is using Participate now. He compared the process for creating new bank relationships through Participate with creating Facebook friends. Banks reach out to each other and get invited to follow. Messages can be sent to a group of banks. He said it has reduced paperwork, spreadsheets and shipping items back and forth. Thousand-page tax returns are being sent through a secure portal rather than an email.

“When two banks do a loan participation today, it’s somewhat clumsy and it also depends upon who you can get access to at what time,” he said. “Participate really allows you to do that when you’re ready to do it and really is all online. It’s all secure. I don’t have to call somebody and say, ‘Hey, can you get me this document? Can you get me that document?’”

Now that BankLabs has sold Construct, it will focus on its Participate product. The company was one of 10 selected for the most recent FIS Fintech Accelerator cohort. That program, which is done in concert with The Venture Center in Little Rock, connects promising financial technical services companies with financial institutions. Montgomery said the company’s involvement led to 70 demonstrations with FIS clients and a small investment by FIS.

He said the company has a couple of other new product ideas.

“We’re a solid company,” he said. “We’re self-sustaining. We’re reasonably well-capitalized. We just went through a full product life cycle where we provide jobs for people. I think this company can have a multi-decade run easily. We provided a 10 times return on invested capital, which is sort of a gold standard, quite frankly. And we’ve got lots of new product ideas and at least one new product that’s already coming out and starting to prove that it can operate efficiently.”

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Press Release: Bankers Helping Bankers Announces Loan Participation Marketplace

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Bankers Helping Bankers Announces Loan Participation Marketplace

AUSTIN, TEXAS – Today Bankers Helping Bankers (BHB) announced a partnership with BankLabs to add a white label loan participation marketplace to the platform.

Established by FedFis and the Independent Bankers Association of Texas (IBAT) in late 2021, BHB connects bankers nationwide so that they can identify solutions that drive earnings and diversify sources of income. Its mission is to elevate and unite community banks across the United States to compete with large, entrenched financial institutions.
The BHB loan marketplace will be powered by the BankLabs Participate product, the first patented end-to-end participation loan management tool for both originators and participants.  Participate is a single platform to manage all loan participations, existing or new, bought or sold. It allows originators and participants to digitize and share loan info, documents, and automate workflow. Participate can cut weeks off the traditionally slow origination process, giving banks the additional liquidity and flexibility needed to maximize profits.

“For BHB to fulfill its promise of helping banks drive earnings, we must give community banks every tool we can to address their challenges and opportunities.  As we got to know BankLabs Participate, it was clear that it would enable and empower lenders to say ‘yes,’ even when facing traditional concentration and lending limit roadblocks,” said Dave Mayo, Chief Executive Officer of FedFis.

“We are on a mission to democratize loan trading for all banks, not just those with capital market desks. With Participate, BHB member banks will be able to digitally manage their balance sheet, avoid lending limit and concentration risk, deploy excess liquidity, improve loan yield, and increase non-interest fee income. We could not have found a better partner in BHB.”, said Matt Johnner, President of BankLabs.

The BHB loan marketplace will launch in late 2022.

About BankLabs
BankLabs is a technology company that creates innovative products to help community oriented financial institutions succeed.  Products are designed to help banks move money, credits and payments more efficiently and profitably. To best serve the financial institution industry, we seek like-minded partners to collaborate on research and development and/or distribution. BankLabs created the #1 construction loan automation tool in the country and subsequently partnered with Abrigo to take the product to the next level. BankLabs is now revolutionizing the traditionally slow participation process with Participate, the first patented end-to-end loan participation management tool. Participate helps lenders digitize and share loan information, documents, balances and automate workflow. Using Participate, lenders can digitally manage their balance sheet, avoid lending limit and concentration risk, deploy excess liquidity, improve loan yield, and increase non-interest fee income. For more information visit

About FedFis 
FedFis provides financial institutions fintech data analytics and a strategy system that tracks Financial, M&A, and Vendor data (including technology vendors) on every bank and credit union in the United States. FedFis is committed to “truth in banking”, by helping community bankers understand which products and services will best pair with their existing technology to drive the strategic outcomes for which they strive. They are first and foremost, a family business of precisionists. Fifth-generation bankers and technology experts with incredible depth and passion for the banking industry. For more information visit,

About IBAT
Formed in 1974, the Independent Bankers Association of Texas (IBAT) represents Texas community banks. The Austin-based group is the largest state community banking organization in the nation, with membership comprised of more than 2,000 banks and branches in 700 Texas communities. Providing safe and responsible financial services to all Texas, IBAT member bank assets range in size from $27 million to $39 billion with combined assets statewide of nearly $256 billion. IBAT member banks are committed to supporting and investing in their local communities. For more information visit,

For more information or questions about this release, please contact Rachel Hernandez at or 512.284.4987 

loan management

Abrigo expands lending automation with acquisition of BankLabs’ Construct and +Pay technologies

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Austin, Texas, August 15,2022 – Abrigo, the leader of compliance, credit risk, and lending solutions for financial institutions, purchased BankLabs’ Construct and +Pay loan administration and funding solutions, expanding Abrigo’s award-winning loan origination solution and creating an end-to-end construction origination, management, and administration platform. 

The acquisition allows construction lenders to seamlessly integrate pre-closing origination with post-closing administration activities to automate workflows, streamline communications, and realize greater interest income through faster funding. 

“Abrigo has always focused on delivering products created out of a deep understanding of the needs of U.S. financial institutions. In BankLabs, we found a partner that produced a robust loan administration tool, developed to cover all types of commercial and residential construction loans and borrower types,” said Wayne Roberts, CEO of Abrigo.  

Mike Montgomery, BankLabs’ Founder and CEO noted “the acquisition realizes BankLabs’ vision of partnering with financial technology leaders to help community-oriented financial institutions succeed faster than BankLabs can deliver alone. We could not have found a better partner to execute on our mission. I know Abrigo will take Construct and +Pay to new heights.” 

Using the integrated Abrigo loan origination and Construct administration suite, loan officers can unlock greater efficiency and focus on strengthening relationships instead of managing spreadsheets. Real-time reporting, alerts, and detailed audit trails provide improved visibility and mitigate risk. +Pay manages the construction payment process for builders, general contractors, financial institutions, or any company that pays subcontractors, adding speed and eliminating mountains of paperwork. 

“In partnership with The Carlyle Group and Accel-KKR, we’re doubling down on our efforts to Make Big Things Happen in the industry as we invest in our people, our products, and our service to customers. We’re thrilled to have some of the BankLabs team members join the Abrigo family, and we share their commitment to service, product excellence, and innovation. We’re equally excited about additional opportunities to collaborate with BankLabs in the future,” said Roberts.   

“We are grateful to our clients, associates, and distribution partners who helped us reach $70 billion dollars in construction loans across about 100,000 projects,” said Matt Johnner, President and Co-Founder of BankLabs. “Transitioning Construct and +Pay to Abrigo will provide even greater efficiency and interest income gains to our lenders. Abrigo’s technical and product investments will expand the commercial features, integration points, and user experiences for these products. Meanwhile, BankLabs will focus on creating new products that accelerate banks’ capability to move money, credits, and payments while growing our patented Participate product as the digital balance sheet management tool of choice.”

Construct and +Pay join a strong and growing portfolio and will continue to enhance the value Abrigo brings to both its customers and the industry. 

About Construct and +Pay 
The Construct product is an easy-to-use, web-based software solution that automates the construction loan management process for residential and commercial projects. Accessible from any mobile device or computer, it eliminates paper files and spreadsheets, improves loan officer and loan admin productivity, and improves the experience for the borrower, builder, and other stakeholders.  

+Pay automates the construction payment stream for institutions paying subcontractors on behalf of their trusted builders. It improves efficiency through approval routing of invoices and eSignature for lien waivers, differentiating the institution with builders and subcontractors and creating new income opportunities. 

About Abrigo 
Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo’s platform centralizes the institution’s data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth. Abrigo has secured strategic growth investments from funds managed by
Accel- KKR and Carlyle (NASDAQ: CG). Visit to learn more. Follow Abrigo on social media using @WeAreAbrigo. 

About BankLabs 
BankLabs provides community banks with state-of-the-art technologies that help increase efficiency, improve profitability, and enhance in-market relationships. BankLabs is committed to creating platforms that streamline loan processes for banks so you can get back to what really matters – serving your customers and your community. BankLabs’ latest product, Participate, is the first patented loan participation and balance sheet management tool for community banks that brings buyers and sellers of loan participations onto a single platform. 

man working at desk

BankLabs Announces Participate, the Social Network for Bankers

By | Uncategorized

Little Rock, Arkansas (December 9, 2021)—BankLabs is excited to announce Participate, the first patented loan participation and balance sheet management tool for community banks that brings buyers and sellers of loan participations onto a single platform. “Participate democratizes the lending process for community banks,” says Mike Montgomery, Chairman and CEO of BankLabs.

For new participations, Participate’s digital workflow makes participations faster and easier to do, enabling transactions to be done in less than 2 weeks, in some cases. Commercial sales began in December 2020 and over 70 banks are already on the platform today. “Participate is our fastest growing ‘friendly fintech’ tool to date,” says Matt Johnner, President at BankLabs.

With over $100 million of loans transacted in October alone, Participate is being used to increase liquidity, manage balance sheets and increase fee and interest income. “For banks looking to grow their loan portfolio, increase fee and interest income, and reduce risk, this is the perfect tool to do that,” says Chris Wewers, CFO at Southern Bancorp.

In addition to buying and selling new loans via Participate, banks are using the tool to manage over $1.8 billion in loan participations. For existing loans, Participate tracks loan information, pro-rata shares, documents, interest rates, funding and payment transaction details, and automatically notifies participants when there is an update, replacing what is typically a manual process with modern, mobile automation.

About BankLabs
BankLabs provides community banks with state-of-the-art technologies that help increase efficiency, improve profitability, and enhance in-market relationships. BankLabs is committed to creating platforms that streamline loan processes for banks so you can get back to what really matters – serving your customers and your community. BankLabs’ flagship product, Construct, is a construction loan automation solution serving over 140 banks to date.

To request a demo, please contact or visit

For more information, press contact:
Felecia Hancock

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Matt Johnner presents on Balance Sheet Management Strategies at WBA

By | Insights

BankLabs President Matt Johnner presented at the Western Bankers Association CCO and Lenders conference. His presentation called “Balance Sheet Management Strategies to Improve Loan Profit” discussed the many difficulties facing bankers today, including NIM compression, lower interest rates, and lack of quality loans. Banks are looking for ways to earn non-interest fee income.

One of the strategies many banks are using is loan participations. Some of the benefits of origination a loan and seeking participants is a reduction in concentration risk and diversify a portfolio. Other banks take loans above limit and find participants as a strategy to keep clients and increase fee income.

Benefits of being a loan participant are diversifying a portfolio, increasing interest income, balance sheet management, and putting access funds to work earning.

Many banks are utilizing our loan participation software to accomplish all of these needs, and to accomplish them in less time and with greater easy. Having a mobile tool to streamline and speed up your loan participation process makes this an effortless solution. Participate can be used anywhere from any mobile device. Over 70 banks area already on the platform today, reaping benefits.

loan participation automation

BankLabs participates in CBDA Peer Forum discussing loan participation automation

By | Insights

We are proud to support the CDBA peer forum this year and enjoyed joining the conversation between community development bank execs and leading community development finance experts. Events like this that lead to relationship building, innovation, and policy discussions are vital to the future of the industry.

Thanks to Chris Wewers for his comments at the CBDA peer forum today on how Southern Bancorp uses our loan participation platform. From Chris: “We are using Participate to manage the liquidity we have today. When we get the incoming US Treasury funds, we are going to be looking for opportunities to expand relationships across the CDBA network as well as expand our digital footprint using this tool.”

Community Development Bankers Association (CDBA) is the national trade association of the community development bank sector. They are the voice and champion of banks and thrifts with a mission of serving low and moderate income communities.


Arkansas Business Article about BankLabs

Arkansas Business: ‘Friendly’ Fintech BankLabs Helps With Lending

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‘Friendly’ Fintech BankLabs Helps With Lending

by Sarah Campbell-Miller on July 26th 2021


BankLabs of Little Rock will graduate from this year’s FIS Fintech Accelerator in August as it adds employees and works on a new software product designed to automate agricultural lending for banks.

BankLabs was the only Arkansas company selected from 148 applicants across 31 countries to participate in the program, which is sponsored by financial technology giant FIS of Jacksonville, Florida, and the state of Arkansas and hosted by the Venture Center of Little Rock.

“We like to call ourselves friendly fintech. The reason we use that term is we’re helping banks around the country, regardless of size, defend against the disruptive fintechs,” Matt Johnner, BankLabs president and co-founder, told Arkansas Business. “We’re the friendly fintech that helps the banks deploy additional lending solutions, including some more forward-thinking things, like allowing different companies to make loans to each other, but still benefiting the bank.”

The company was founded in 2016 and employs about 30 people. It’s hiring another 16 over the next year, he said. “We are really at a point of acceleration, or a tipping point. We’ve signed over 130 banks in the first five years. We’ve now built a great foundation,” Johnner said. “And so now it’s time to go to the next level. We’d like to double our revenue in this coming year. And then double the year after that; we just closed our first outside funding round with some great individual investors.”

He declined to disclose the company’s annual revenue, but said it raised more than the $3 million it sought from the funding round. BankLabs isn’t profitable yet. It “could be profitable in less than one year, but that would sacrifice growth,” Johnner said. He added that he was not building the company to sell it.

Johnner said BankLabs aims to be a company that has a multi-product portfolio heavily focused on commercial lending and is profitable in the long run. “We will continue to evaluate opportunities. We have had some folks try to acquire us already, and we just determined it wasn’t the right time,” he said.

For now, BankLabs has two main products, Construct and Participate. The company’s new agricultural lending product is unnamed and in the “ideation phase,” Johnner said.

Construct is software that automates construction lending for lenders to make that process — traditionally accomplished with spreadsheets and other paper documents — more profitable and efficient. The automation also reduces risk by providing real-time alerts to lenders.

Participate is software that automates lending between lenders. For example, a small bank that has a loan limit of $6 million could use it to lend $15 million to a borrower, with the additional $9 million participation coming from a partner bank, Johnner said. The software “automates the whole digital lending flow and has a marketplace component to it, to find new partners if that bank doesn’t have enough partners already,” he said.

BankLabs’s goals include signing more banks up for its products and building out the network effect of Participate. “So, if you’re a bank in Arkansas and you have, let’s say, 10 or 15 loan participations on your balance sheet, you might also have 10 unique banks that have bought one or more of those from you,” Johnner said. “And so what we do is we try to leverage that network effect, … give free access to [the] 10 downstream banks. And then we lovingly land and expand and try to upsell them.”

In addition, BankLabs touts experience in banking and technology from both Johnner and its co-founder, Chairman and CEO Mike Montgomery.

Johnner was an oilfield engineer before he joined Perot Systems Corp., which is now Dell Information Services, in 1994. After that, he worked for numerous technology companies.

Johnner said Montgomery is a third-generation banker who has invested in more than 20 community banks around the country and serves on the board of Southern Bancorp in Arkadelphia. Montgomery was also an executive at Systematics Inc., the Arkansas-based predecessor of FIS. Johnner called his partner’s past experience “fintech 1.0.”

“We’re trying to help Arkansas expand its economy and bring high-paying jobs back to Arkansas, through what we would call fintech 2.0,” he said. “This is a great time of consolidation for banks. It’s a great threat to banks that don’t innovate. So we seek out and welcome banks that are looking for digital innovation and defense against the bad guys.”



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