Dear Community Banker:
As we begin the New Year, our community banking industry is being tested like its never been tested before. A dismal economy, falling real estate prices and increased government regulation are putting pressure on all community banks' earnings, capital bases and market values. At times, there appears to be no end in sight.
Most of us are familiar with the classic Christmas movie "It's a Wonderful Life" starring Jimmy Stewart. As a community banker, many of us are just like George Bailey in that our roots run deep in our communities. Our institutions invest local deposits that provide housing for families, loans for their kids to attend college and capital for small businesses.....the lifeblood in many of our small towns. "Community Banking", minus the government regulation, is pretty simple and straightforward. No credit default swaps, no derivatives, just plain common sense banking.
Our larger Wall Street brethren, I'll call them the "Mr. Potter's" of the world, view the industry quite differently than us. Many of them did not hesitate in taking taxpayer or TARP money to beef up their capital reserves. These reserves were then used to write down mortgage backed securities which in turn has caused an unprecedented decline in real estate values in some of our communities. Whether you agree with it or not, when the government stepped in and put restrictions on executive compensation, they quickly found a way to pay back the TARP money, much like "Mr. Potter" would have done.
Today the industry is faced with sweeping changes in our regulatory system which will deeply affect the way we do business now and in the future. There were a few "bad actors" in this economic crisis and unfortunately, all of us will have to pay the price in some form or another. There is a way that we can lessen the impact on community banks. Become more involved in both the Community Bankers of West Virginia and our national organization, the Independent Community Bankers Association or ICBA. Both of these trade groups have the interest of community bankers foremost on their minds. Write letters to your state and national representatives and get your staff and directors to do the same. Individually, provide your financial support to both the West Virginia and ICBA Bankers Political Action Committees. In the past, I have discounted the effectiveness of both lobbying politicians and writing letters, but I know now the efforts on behalf of the industry are paying off.
In closing, I think we are all proud to call ourselves "Community Bankers". Please support the efforts of both CBWV at the state level and ICBA at the national level in preserving the "George Bailey's" of the world!
Sincerely,
Robert F. Baronner, Jr.
President, Community Bankers of West Virginia
