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STANDING AS ONE
By Chris Williston, IBAT President and CEO
The Alliance of Independent Bankers
Volume XXXII No. 6 November/December 2006 |
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 Editor’s Note: The author’s speech to the delegates attending the 32nd annual convention in San Antonio is excerpted below. A complete video of the presentation can be seen HERE.
It has been some time since I addressed this convention. If ever there was a year for me to address the convention, this would be the year. Since the last time we were together, the year was consumed with merger discussions with the Texas Bankers Association. It has been a trying year for every stakeholder of this great association…leader, volunteer, member and staff. But the year was far from lost. To the contrary, in many ways discussions of this magnitude have caused all of us to reflect on the proud heritage and many accomplishments of this association and stirred a healthy debate about our relevance as we plan for the future.
Your association has never been stronger. We have evolved as the most respected and valued state community banking association in the country. We can all take pride in that.
There are many of you in this room who cannot even remember 1974, the year IBAT came into existence. So let me paint a picture for you.
In Texas, you could have one bank, one location. There were no ATM’s, no Saturday or Sunday banking, no Reg CC, no BSA, no CRA, no CRE, no FDICIA, no FIRREA, no DIDMC, no privacy rules and no predatory lending. Deposit insurance was $40,000 per account and savings and loans could pay .25 point more for deposits. Subchapter S was but a dream. Credit unions were credit unions. There was no internet, no ID theft and no IT security audits. We knew our customers before the government told us we had to.
There was no Garn/St. Germain, Gramm Leach Bliley or Sarbanes/Oxley. There was no Bank of America, or Wal-Mart Super Stores. A community banker was Governor of Texas.
It was on Friday, March 22, 1974 at the Fairmont Hotel that the organizational meeting of IBAT was held. That very day, an editorial appeared in the Dallas Times Herald. The headline read, Independents Unite…New Force to Aid Texas Bankers. The article quoted then IBAA (now ICBA) President Fred T. Brooks, President of the Merchants State Bank of Dallas as follows: “Several factors have combined to bring Texas independent banks to the point where the new organization was found necessary and desirable. The major impetus has, of course, come from the rapid growth of multi-bank holding companies in Texas, a development which independent banks see as threatening to place the overwhelming share of banking in a few hands, thus cutting off alternative sources of credits to small businesses and individuals in local communities.” Brooks continued by saying, “The development of this new association does not signify dissatisfaction with the existing Texas Bankers Association. There are many issues on which we can agree but on a number of important banking issues the TBA, because of the mixed nature of its membership, cannot be expected to take sides and we see a need to unite and speak out on these crucial questions which affect the future of every citizen of our state. Legislators must learn that when independent bankers testify, they are backed up by 150 or 300 or 400 or more independent banks. The largest banks have economic muscle that translates to political power. Independent bankers have numerical strength. We must use it to match the political power of the giants.”
The first IBAT Board drafted a single mission…to preserve and protect Texas community banking. 252 charter members rushed to join the newly created association. Soon they would hire staff and counsel and draft and introduce legislation to limit the growth of the bank holding company. They were successful in passing a deposit cap bill, a cap that still is in existence today. They found strength in numbers. Soon there would be other battles to fight like detached facilities and intrastate branching. Their influence and effectiveness would continue to grow.
Fred Brooks and the other organizers would be proud of IBAT’s political muscle today. Consider if you will the legislative and other accomplishments of IBAT since that time. If there was no IBAT, there would be:
• No deposit cap in Texas;
• Texas may still be saddled with usury caps;
• Interstate branching might have been here sooner;
• There would have been no bankers blanket bond protection for Texas community banks in the 1980’s; or stability in the Bond and D&O markets in Texas today;
• There would be no subchapter S;
• No expansion of deposit insurance coverage;
• No TIB, or Texas bankers’ bank;
• No administrative fees you could charge on regulated loans or add on rates in the Consumer Credit Code;
• No Communities First Bill;
• No IBAT Services or member savings on hundreds of products and services;
• No financial literacy initiatives in public schools or historical restoration projects of rural Texas towns.
But IBAT has never been and as long as I am your chief paid executive never will be an organization that is satisfied to rest on the wonderful accomplishments of our past. To the contrary, we have to add value each and every day if we are to maintain our relevance in this changing financial services marketplace. And so we will.
We will enhance our Visibility by preaching the relevance and importance of the independent community bank as the economic backbone for our State and National economy;
We will maintain and enhance our reputation as the leading Advocate for you in Austin and strengthen our affiliation with the ICBA to make a difference for you in Washington;
We will Leverage our collective strength to bring you the same buying power and develop products and services for your changing customer base;
We will increase your Understanding of this changing business by increasing your access to information and research that we will collectively create together;
And we will enhance your and your staff’s access to Education by bringing programs directly to you and your bank, at your convenience, not ours.
Some would say that the run of the community bank in Texas is over. We say the opportunity for community banking in Texas is brighter today than it has ever been.
The mission today is no different than it was when it was created 32 years ago…Collectively creating value for community banking, collectively leveraging our strength to make your franchise all the more valuable.
The debate over the past year was never about diminishing the legislative or collective power of the community banking community. It was a debate about how best to enhance our power and effectiveness. The fundamental question was and always will be…do we do it as we have always done since 1974 as IBAT, or do we look at a new model…
This was no easy debate. Not since we debated the merits of intrastate branching in Texas was there such a division in our community banking family. A lot of hard feelings were created among people with different viewpoints. This debate was not a simple one like putting two community banks together. In this case, there was no shareholder equity to consider. There was only emotional equity. History has taught us that we are powerful as one. History has taught us there is strength in numbers. The debate was about how best to enhance our strength.
Look around this room. We are all community bankers, or people who derive their livelihood from community bankers. Seven out of ten of you are members of both IBAT and TBA. We are all friends. You and I have fought many a battle together. We gather each year at this time to renew our friendships and common aspirations. And although we all share the same belief in community banking, each one of us has a different idea about how we must present the community banking voice in the future. And everyone is right. No one is wrong because we all share the same objective.
In the natural evolution of any organization it is natural to contemplate your future. You must look at the landscape, assess your strengths and weaknesses and your opportunities and threats and develop goals and tactics to reach those goals. It is called strategic planning. The consideration of a merger is but one strategic option every organization should explore. It has to be.
Just like in your bank. If the first question you pose to your strategic planning committee is anything other than do we buy, sell, or remain independent, you are doing a disservice to your shareholders. If this association did not ask a similar question as we contemplate our future we would be doing a disservice to you, our stakeholders. Your elected board and volunteer leaders would be shunning their most important fiduciary duty.
At the end of the day the conclusion was made that Texas’ community banking voice can still best be presented if IBAT remains IBAT.
Now all that remains is that we restore peace in our family. Because we must. A house divided is no house at all. Right now we can see some very important battles that demand we stand as one, community banker to community banker, and join with the ICBA to protect our franchise. There is Wal-Mart and Home Depot and the ILC’s. There is deposit insurance assessments and Basel. There is tax relief and regulatory relief. We have to unite against new powers for credit unions and the Farm Credit System. I daresay that many of these issues do not appear on the radar screen of the Bank of America’s or the Wells Fargo’s of the world.
And these are just the issues of today…issues we can see today. Neither you nor I can even begin to contemplate some of the issues of tomorrow that will threaten Main Street America and your ability to thrive and prosper in this changing financial services marketplace.
Let’s make today an affirmation of the very principles contemplated at that organizational meeting back in March of 1974. Nothing has really changed…the more things have changed, the more they have stayed the same.
The very words Fred Brooks uttered as he concluded his remarks before that first organizational meeting of IBAT was a telling observation. “Big financial interests have launched some of their most dubious activities because they felt no one would challenge them. They can be beaten.”
Ladies and gentlemen, some 32 years and seven months later the same is as true today as it was then…together, we simply cannot be beat, if we stand as one.
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