Community Bankers Association of Illinois

Report of the President - Bob Wingert

Ladies and gentlemen, your presence here today is most appreciated by those of us on staff. We know you face heightened challenges during this period of economic duress. I am confident that your time here will be well-invested, that you are doing the right thing by attending this convention and participating in the educational sessions and meeting with your peers.

Due to this Great Recession, trade associations nationwide are experiencing a 40% decline in convention attendance, on average. Fortunately, CBAI has fared much better. The 126 community banks registered for this convention represent just a 10% decline from our five-year average. We also have a full exhibit hall with 108 exhibitors, so we are very gratified with the turnout this year, and we thank you for that.

Today, we celebrate CBAI's 35th anniversary. The association was incorporated in 1974, the year President Nixon resigned from office; the year the 55 mile per hour speed limit was first imposed, thanks to the OPEC oil embargo; and the year Hank Aaron broke Babe Ruth's seemingly invincible home run record. That same year, a group of forward-thinking community bankers from all parts of Illinois recognized the urgent need to establish an organization dedicated to the cause of community banking. They breathed life into this association and gave it purpose and direction.

Those core founding purposes continue to guide CBAI to this very day. We have long-employed the strategy of not only influencing and shaping change but also controlling the pace of change to give community banks time to adapt and adjust. This strategy has served us well. Today, Illinois has more bank and thrift charters than any other state in the nation, and CBAI is the third-largest state-based bank trade group in America. Another important facet of our operational strategy is to maximize community banker involvement, not only on the boards and committees of CBAI and ICBA, but also in advocacy capacities on the boards and committees of regulatory agencies and government sponsored enterprises.

For example, we believe the community banking perspective must be represented on the boards of the St. Louis and Chicago Federal Reserve Banks and the Chicago Federal Home Loan Bank. They provide essential services and wield considerable influence on economic and regulatory issues, and we need a seat at the table. A community banking board seat is currently up for election at the Federal Reserve Bank of St. Louis, and we want to make sure an Illinois community banker prevails. For the past six years, Dave Pirsein of the First National Bank in Pinckneyville has capably served in that capacity, but term limits prevent him from seeking reelection. As a result, CBAI has endorsed another highly-qualified candidate in Ernie Chappel of the First National Bank in Vandalia. For those of you who are eligible to vote in that election, we encourage you to support Ernie Chappel.

In addition, two incumbents on the Chicago Federal Home Loan Bank board are seeking reelection to their two seats. CBAI recommends your support for Roger Lehmann of the Harvard State Bank and Steve Rosenbaum of Prospect Federal Savings Bank in Worth. They, too, are effective spokesmen for community banks. All of these bankers are CBAI members, and we commend them for their willingness to serve.

Another vital element of our long-term operational strategy is to establish and maintain marketing partnerships with providers of essential services. This year marks the 25th anniversary of our partnership with The Baker Group, an institutional broker/dealer firm specializing in community banks. Baker also happens to be celebrating its 30th anniversary of operation this year.

No other partnership has been as effective at serving our mission of keeping community banks competitive than the Baker partnership. During the past quarter century, the Baker client base has grown significantly for one primary reason -- their performance has earned it. Baker adheres to the premise that, because bankers take credit risk in their loan portfolios, they should never take credit risk in their investment portfolios. Baker will not jeopardize the financial stability of their client banks and their firm’s reputation in pursuit of trades.

The wisdom of that management philosophy was proven during the current financial crisis as Baker did not sell any corporate bonds, Fannie or Freddie preferred stock, private-label CMOs, or trust preferred securities to their clients. If you are not already a Baker client, I encourage you to give it serious consideration.

It was also 25 years ago when the association leadership formed a committee to study the feasibility of organizing a bankers’ bank to provide correspondent services here in Illinois. After numerous regional meetings and surveys, the board approved the project based on a strong indication of support from the CBAI membership.

CBAI funded the organizational costs, which were subsequently reimbursed; the association drafted and shepherded enabling legislation through the General Assembly; and CBAI worked to obtain regulatory approval for the charter. When the Independent Bankers’ Bank opened for business in September of 1986, the fledgling institution had a mere three million dollars in capital.

Today, IBB has several hundred million dollars in assets with more than 400 bank clients, reflecting the popularity of a community bank-owned correspondent that will never compete with its respondent institutions.

Unfortunately, IBB’s capital position has been compromised during this financial crisis, and it needs to raise more capital to survive. During a breakout session tomorrow afternoon, IBB representatives will provide an update on its stock offering and efforts to restructure the bank and respond to any questions you may have.

Although CBAI cannot make any representations regarding the investment quality of IBB’s stock offering, we do believe that IBB’s existence is as important today as it was 25 years ago. As a result, we urge all community bankers to give your utmost consideration to investing in IBB.

Now I’d like to share with you a letter from Governor Pat Quinn. It reads:
“As Governor of the State of Illinois … I congratulate the CBAI on its 35th anniversary as a strong advocate of local ownership in banking and the dedicated provision of financial services to Illinois communities and neighborhoods.

Community banks are essential to economic growth in Illinois. They provide financing to our agricultural infrastructure and help small businesses create more new jobs than any other business sector.

CBAI has helped keep community banks vibrant by delivering quality products and services, representing their interests in Springfield and Washington, and telling the community-banking story to the public.

I am well aware that community banks did not cause this current financial crisis. As historically responsible lenders, Illinois community banks continue to maintain close and special relationships with their customers, especially in times of greatest need like today.

I commend CBAI for its outstanding work, and I extend my support for maintaining a dynamic community banking system in Illinois for decades to come. On behalf of the people of Illinois, I offer my best wishes for an enjoyable and memorable convention. Sincerely, Pat Quinn, Governor".

Ladies and gentlemen, community banks are important to this nation’s prosperity, and our elected officials have taken notice. You represent what is right about our country, and now is the time to seize on the opportunities that emerge from this crisis.

Big-bank customers are awakening to the fact that they’re paying more fees and earning less interest than at community banks. That’s why many of you are experiencing strong deposit growth. The big banks are also abandoning the small businesses they wooed away from community banks not long ago. Now is the time to show small businesses how a real relationship with your bank can contribute to their success in more ways than just offering a low teaser rate.

To conclude, CBAI’s operational platform stands rock-solid on four pillars of strength: governmental and legal representation, education, special services, and public relations. We are ready, willing, and able to help you survive this crisis and achieve prosperity for the next 35 years and beyond. Get involved; stay involved; and take advantage of what this association has to offer.

  800.736.2224 (IL) | 217.529.2265  
  DISCLAIMER: The association is not responsible for and has no control over the subject matter, content, information, or graphics when viewing links attached to this association's site.