Back in the 1960s, when we had three television networks (which actually stopped broadcasting somewhere in the wee hours), news ran once in the evening and once in the morning, and not even sci-fi writers had thought of anything like the internet, Excedrin ran a long series of commercials about kinds of headaches. They all had numbers, and they were all bangaroo headbusters.

(Sorry, our 100th Anniversary put us into a nostalgic mindset.)

How good those old days—and those old headaches—must look to many of the country’s bankers now!

As the Emergency Economic Stabilization Act was in the midst of passing the House in early October, we asked Aspirin prescribers what they were hearing from their various publics and what they were doing to communicate in this period with customers, employees, shareholders, and others. Here’s what we heard.

Remedy 1
Mike Hannley, president and CEO, Bank of Tucson, Ariz., $179.7 million-assets. Bank of Tucson is part of Capitol Bancorp Ltd., a $4.2 billion-assets bank holding company with 64 community banks in 17 states.
 
I have navigated these choppy waters in the past, and, although we cannot make the fear go away, we can mitigate it by “calming our customers’ nerves” by being professionals in banking.
 
The past years of a relaxed dress code and atmosphere does not provide a high confidence level of “Are you keeping my money safe?” Thus, we all dress professionally now; we train our complete staff on various FDIC variations to include all professional coverage; have the bank’s balance sheet available to hand out; and respond to any and all questions with facts and figures. To date, we have increased deposits by $20 million, all new money.  
 
Our motto….KNOWLEDGE IS POWER.
 
Remedy 2
Lynda Messick, president and CEO, Community Bank Delaware, Lewes, Del., $59.8 million-assets.
 
We have seen a dramatic increase in new account activity in the past two weeks. I think this is a reflection of the confidence our market has in local community banks and concern for what they now feel they don’t know about big banks’ loan and investment portfolios.
 
We have not experienced any outflow of funds because of concern for deposit insurance coverage of existing customers, but are seeing more of the new customers asking questions regarding maximizing that coverage. We spend a lot of time making sure staff is comfortable with the issues and understand how to explain FDIC coverage and work with each customer on a very individualized basis.
 
Remedy 3
Blair Hillyer, president and CEO, First National Bank, Dennison, Ohio, $167.7 million-assets.
 
This has been one of the more challenging periods in my 29-year career. I’m sure we have answered more questions regarding safety and soundness, FDIC coverage, the bailout bill, etc., than at any period in my history. Most of the questions have come from customers and employees. Only a few shareholders have actually come forward with questions.
 
There has been a genuine sense of concern about the health of the industry and the most common question by far is, “What is going to happen?”
 
Not many people in our area were in favor of the bailout bill passing, because they really didn’t understand what it meant to them personally. When we explained First National’s support for the bill and our reasons, most folks seemed satisfied. We cautioned our staff to proceed with “business as usual,” and that approach seemed to work. We refrained from any comments to the local media for fear of our comments being taken “out of context.”  We referred media calls to the Ohio Bankers League, which was very helpful with their responses. We also referred customers to financial rating websites regarding our financial condition.
 
We were hurt by news reports that banks didn’t have any money to lend and weren’t making any loans due to the crisis. The TV talk shows were killing us. We still made loans, but our volumes were hurt by the negative press. Overall, it wasn’t nearly as bad as it could have been, however.  

Remedy 4
Tom Wolf, president, Platte Valley Bank, North Bend, Neb., $51.4 million-assets.
 
This is our most recent ad as regards this mess. My next ad is going to read, “Not only do we not have any subprime loans, we do not have any mortgage loans that are even 30 days past due.” We have served our community for over 117 years and we will continue to serve our friends and customers in the years to come.

Remedy 5
Larry Callais, president and CEO, MC Bank & Trust Co., Morgan City, La., $244.8 million-assets.
 
At M C Bank executive officers met with all of our supervisors and other bank officers to bring them up to speed on the state of our bank; the state of banking in Louisiana; and FDIC insurance. We also informed them that they should be able to address FDIC questions, as should their subordinates. We also instructed them that should someone still be uncomfortable with their explanations, that they should direct the questioner to to any one of the five executive officers.
 
I am happy to say that we have not had one instance of a customer withdrawing money due to concerns about M C Bank or banking in Louisiana. One more item—all of our employees have been required to take ABA’s Front Line Compliance FDIC course.
 
We have probably had a few more inquiries from commercial customers than from consumers, actually. Concerned commercial customers are referred directly to either me or one of the other executive officers. With the exception of one client who was considering withdrawing prior to our talking with him (but did not, once we spoke) all others have been comfortable with the details we gave them concerning M C Bank, our capital situation, and our overall financial status. As a result, they have not made any moves.
 
Our quarterly messages to our shareholders that accompanied their dividend dwelt on our strength and specifics concerning our performance on an ongoing basis. Because of this we have not had any questions from stockholders.

Remedy 6
Albert Garrett, president and CEO, Robertson Banking Co., Demopolis, Ala., $232 million-assets.
 
“We have had very good luck with our local newspaper in getting the word out about our strength to our customers and community.”
 
Garrett provided copies of articles and a special release from Bauer Financial (above), which the bank planned to run as a newspaper ad. Here is an excerpt from “The Publisher’s Pen: Local bank setting the pace,” by Jason Cannon: 
 
“Yesterday, I penned an opinion piece regarding the lending practices of large national banks and the proposed $700 billion bailout. Specifically, I wondered if that bailout would have much of an impact locally. Yesterday morning, I found out. Demopolis doesn’t need it. Robertson Banking Company earned a 5-star Superior rating from BauerFinancial Inc…
 
“That kind of accomplishment comes from strong leadership in the bank. It also comes from strong support from the community. Have you ever met the president of Washington Mutual? I don’t even know his name. I’ve had the pleasure of speaking with Robertson leadership on a regular basis.…”

Remedy 7
Thomas J. Sherman, CEO, Founders Community Bank, San Luis Obispo, Calif., $92.2 million-assets.
 
We initially attempted to communicate reassurances using a series of public workshops, only to find them lightly attended. In order to get the word out more thoroughly, we prepared a letter stating our position. In that letter we addressed our well-capitalized status and our positive ratings as independently assigned by Bauer Financial and Bankrate.com. We made available our compliance officer to answer FDIC insurance questions to customers, and to non-customers as a public service. We posted this letter both on our website and paid for advertising space in our local print media.  Response has been significant and extremely positive. You can find the letter through our website, www.founderscommunitybank.com

Remedy 8
Kim Brown, vice-president, marketing, Valley Bank & Trust, Brighton, Colo., $260.3 million-assets.
 
Valley Bank & Trust values the critical role our team members play in our business. Our management team has worked to keep everyone aware of the bank’s condition. In addition, we endeavored to instill confidence in our team so employees may talk to customers honestly and with conviction.
 
The bank has addressed customer concerns in the following ways:
 
1. Personal reassurance by team members, starting with the president, Donna Petrocco. Customers know they have access to all levels of our organization, as a community bank. All inquiries have been returned promptly.
 
2. We have explained and distributed information about federal deposit insurance, primarily using FDIC-provided literature.
 
3. We added a video about FDIC insurance to our website.
 
4. Finally, we developed a “safe and sound” statement that appears on our website, at each teller station, and in local advertising. BJ

 

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The electronic version of this article available at: http://lb.ec2.nxtbook.com/nxtbooks/sb/ababj1108/index.php?startid=24H  

 

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