Community Bankers Association of Illinois

Bob Wingert, CBAI President
A Period of Progress and Preparation

(Excerpts from address given during CBAI's 33rd annual convention on September 28, 2007)

     Thank you, ladies and gentlemen, for attending CBAI's 33rd annual convention here in Memphis... Represented here today are 125 Illinois community banks and 350 bankers, spouses and guests. And for the 12th consecutive year, the exhibit hall is a sellout. Exhibitors tell us that this is one of the best conventions across the nation, and they always want to come back. That's quite a compliment to all of you. All totaled, there are more than 600 people involved with this convention, another indication of the vibrancy of Illinois community banking.

     I'd like to first provide a brief profile of your association today:

    - At 495 members, CBAI represents a record 73% of all banks and thrifts in Illinois;

    - CBAI is the third largest state bank trade association in the country, including all the ABA affiliates; that's noteworthy because, unlike ABA affiliates, CBAI has eligibility requirements that render many institutions ineligible for membership;

    - With a five million dollar operating budget, solid reserves and no debt, CBAI is in sound fiscal condition as Treasurer Loftus will attest;

    - CBAI's educational services are second to none; we know that continuing education, combined with effective lobbying, are the keys to community bank survival; and

    - the association staff has unparalleled experience serving community banks; the average length of employment of our 18 executives is 13 years; that's a combined 234 years of service, more than the age of our nation; we know this business where it's been, where it's at, and hopefully where it's headed. But we don't sit back on our laurels. We cannot and will not rest.

     Now I know that Chairman Kiley is a rather modest man, not prone to boast, but I want to make sure that everyone is aware of the many positive steps taken under his leadership to serve community banking. In addition to moving forward on the litigation against the Governor, which has already benefitted state banks and thrifts, CBAI is also providing financial support for a CBAI member involved in a tax case against the IRS that will affect all Sub-chapter S banks in the nation, 232 of which are in Illinois, the vast majority CBAI members.

     Last spring, our strategic planning committee, led by Chairman Kiley, concluded that we've got to think outside the box to serve our mission and insure our long-term vitality. Up until then, I thought "thinking outside the box" is what happens when you draw up a will. But seriously, we did think outside the box as evidenced by the fact that our insurance agency is now an owner of a new insurance company headquartered in Springfield. Opportunities to invest in new insurance companies don't often happen, especially those that offer excess deposit insurance coverage and surety bonds.

     Another milestone was attained during Chairman Kiley's term when Community BancService Corporation celebrated its 25th anniversary... To this day the service corporation delivers services with one objective in mind -- to help banks maintain profitability and operate safely and soundly. This year CBSC announced two new programs that have proven popular: BancVue's Reward Checking program to help banks grow core deposits, and Triad Financial's manufactured housing loan program to help banks safely increase loan margins.

     For the past five years CBSC's services have generated at least 1.5 million dollars per year in measurable savings for CBAI members; that's more than $3,000 per member per year on average, and that exceeds the cost of annual dues.

     In addition, just this week your association launched a new web site with the latest features and functions to serve you better, including podcast and audiocast capabilities. It's now easier for you to locate, access, download, and print information. We ask you to put it to the test, and then let us know what you think.

     Also noteworthy this year is that CBAI now has more members serving on the boards of Federal Home Loan Banks and Federal Reserve Banks than ever before. Given the many regulatory and service issues, CBAI and ICBA have worked hard to help get community bankers elected to these boards.

     I'm pleased to report that CBAI now has four members on the Chicago Federal Home Loan Bank board Roger Lehmann of Harvard; Steve Rosenbaum of Worth; and Kathleen Marinangel of McHenry and David Kuhl of Pontiac who were recently re-elected. You have excellent representation on the Chicago board at a critical time for the home loan bank system.

     In addition, on the board of the Federal Reserve Bank of St. Louis is fellow member David Pirsein of Pinckneyville, who also serves on our service corporation board.

     And next month the Federal Reserve Bank of Chicago will hold an election to choose a new director in the small bank category. CBAI supports the candidacy of Kent Siltman, our chairman-elect. Iowa bankers have held this seat for many years, but a strong turnout by Illinois banks should help Kent return representation to Illinois. So all-in-all, it's been a very productive year under Chairman Kiley's leadership.

     Now, I want to make a few observations on the state of community banking. No doubt, this has been a challenging year for many of you. An inverted yield curve, coupled with intense competition for deposits and loans, has put pressure on net interest margins.

     Fortunately, mid-year performance reports show that Illinois community banks have actually fared pretty well despite these circumstances. Overall, you're maintaining decent deposit growth, solid underwriting standards, healthy collateral, and little or no exposure to sub-prime lending.

     We know you're concerned about deposit retention and growth, attracting new business customers, and finding new revenue sources. We know you want to get rid of ridiculous regulations and frivolous criticisms that drain money from your bottom lines. Please remember that CBAI and ICBA exist to help you, and we're going to make progress on all these issues with your support.

     Let me give you a good reason to be encouraged about your future. Community banks continue to excel at small business lending while the big banks continue to struggle in this area. One of the reasons can be found in a recent Harris poll on trustworthiness. It concluded that Americans have put their trust in Main Street America. Small businesses, including community banks, were rated the most trustworthy in America at 54%, while big businesses, including big banks, came in at just 16%.

     That's a huge advantage because we're entering a major demographic transition period that poses opportunity and risk for community banks. To succeed, you will need to employ your relationship skills and implement new technologies along the way. And you're doing that. You understand these realities based on your steady adoption of online banking, online bill payment, and remote deposit capture.

     Here's what's happening demographically. The baby boomer generation is flooding into retirement, while Generation Y is now entering the workforce and producing tremendous amounts of disposable income. They're beginning to call the shots, and they are avid users of technology. You can win them over because, for community banks, technology levels the competitive playing field.

     Technology has changed just about everything. Some anthropologists even say the Internet is the most significant social development since the invention of writing more than five thousand years ago. Think about it there are nearly three billion searches performed on Google each month, and the number of text messages sent and received every day exceeds the population of planet earth.

     To sum up, ladies and gentlemen, I believe the future of community banking is in relationships. Yes, you will have technologically-advanced delivery systems to enhance the customers' experience, but the future, like the past, will depend on one-on-one relationships. And you're the best in the business. Keep up the good work, and stay involved. Thank you.

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