Leap Year Effect

Today is February 29, a date that rolls around only once every four years. Of the four-year rotation, my favorite is leap year. Not only do we gain a day, but we also experience the Summer Olympics and the presidential and gubernatorial elections. For a sports and political junkie, it doesn’t get any better than leap year!

Most people give little thought to February 29, other than an extra day to have to work. I doubt, though, that many bankers feel that way, despite the venomous tenor from the national media vilifying bankers. I have always found that bankers share a deep pride in and obligation to serving the needs of their communities.

This fall, the Indiana Bankers Association will survey our membership to gauge Indiana banking community support efforts. Two years ago, when this survey was last conducted, the results were astonishing. Nearly 20,000 different community groups were assisted by Hoosier bankers in 2010—either financially, through human volunteerism or both. That same year, more than 17,200 bankers from throughout the state volunteered time to community groups. Interestingly, there are 17,300 bankers in Indiana, reflecting a participation rate of close to 100 percent. Granted, one banker volunteering with three organizations would be counted three times, so I am not claiming that all volunteered, but it is worth noting that the statistical results show a remarkable volunteerism rate. The average amount of volunteer time by each bank employee was three hours per month, or a total of 36 hours per year.

Additionally the Indiana banking community donated nearly $25 million in 2010 to a variety of community causes. And this altruism does not even count bank financial literacy efforts. More than 3,000 Indiana bankers made 5,400 financial literacy presentations in 2010, reaching more than 110,000 students and adults.

Bankers are proud of these facts and feel a sincere obligation to their various community groups and causes. The year 2012 puts a bonus day on the calendar … and a bonus day of service from the Indiana banking community. Maybe we can call it the Leap Year Effect!

Keeping Up With Technology

Last week Tracy Wainscott, IBA’s information technology and facilities manager, and I met with three hand-picked individuals who work with IBA in some capacity related to technology. The purpose of the meeting was to solicit idea-sharing on a regular basis from this IT group, so that IBA can be informed and prepared to serve the best interests of our members.

We are not necessarily looking for sea-changing ideas. Instead we are seeking focused ideas to put into play to make our everyday use of technology more productive. For instance we have discovered business card reader software, available through a simple app, that takes a picture of a business card to capture and download contact information into an iPhone directory, bypassing the need for cumbersome keystroking.

Our goal in working with an IT advisory panel will be to identify pieces of software or apps to simplify and streamline some part of IBA operations. We recognize that we will never be large enough to employ a full-time team to monitor technology trends for us exclusively; forming this panel is a way for us to benefit from the eyes and ears of trusted technology professionals who understand some aspects of what we do and how we do it.

For the IBA, as for all smaller-sized organizations, technology is the great equalizer. Properly used, technology can make a company appear much larger than it really is. While appearance is of little interest to us, we do want to uphold our efficiency and professionalism.

A possible side benefit to these efforts will be finding niche software apps that our members could use. If and when we do discover software that could be helpful to the Indiana banking community, we will communicate those findings immediately. We know how important it is that members, too, are able to maintain or improve their efficiency and professionalism, for the sake of the customers and communities they serve.

The Closing of SCB Bank

Last Friday, the Federal Deposit Insurance Corp. (FDIC) was named receiver by the Office of the Comptroller of the Currency, following the failure of SCB Bank in Shelbyville. The bank reopened on Saturday morning under the name of the bank that purchased its deposits and most loans, First Merchants Bank, NA, Muncie. As with the other two Indiana-based bank failures within the past three years, no depositor lost a cent.

No insured depositor has ever lost a cent in any U.S. bank failure, since the FDIC was established in 1933. The FDIC was created in response to the Great Depression, specifically to protect depositors of banks and thrifts in the event of a bank or thrift failure, and it has succeeded in its mission. Perhaps no period in history since the Great Depression has been as economically devastating as that of the past four and a half years, but the FDIC continues to perform its duties without wavering.

More remarkable still, this protection has occurred without one cent of funding from taxpayers. FDIC operations, and any losses that occur when a bank or thrift fails, are funded 100 percent by the insured banks and thrifts that pay premiums into the FDIC. Even during the challenging savings and loan crisis of the late 1980s and early 1990s, not one cent from taxpayers was ever used. Instead, the FDIC (and its thrift predecessor, the FSLIC) borrowed funds on the capital markets using the implied full faith and backing of the United States; those funds have been paid back in full by the bank and thrift industry.

The failure of any company is sad and humbling, but the failure of a bank or thrift is especially disheartening, because so many people and businesses in the community are affected. The business procedure itself of transitioning the deposits of a failed institution has been worked into a smooth science by the banking industry and the FDIC. Yet the emotional toll remains huge for owners, employees, customers and the community at large.

Many in the United States want to blame banks for the economic turmoil of the past few years. The truth is that very few banks were the root cause. In fact community banks, such as SCB Bank in Shelbyville, are themselves victims, much as many American families have been victims of this recession. Despite last Friday’s bank failure, however, there are many positive indications that we are nearing the end of the current economic slump, and that better days lie ahead.

Super Success

Wow! Indianapolis has completed its joyful task of hosting Super Bowl XLVI, and by all accounts it was a super success. This success did not come by accident. It took years of planning by talented community leaders, ably guided by Allison Melangton, president and CEO of the Indianapolis Super Bowl Host Committee. Planners and their supporting team of 8,000 volunteers attended to every last detail to ensure the safety and comfort of our guests.

Coast-to-coast media converged in the Hoosier capitol, broadcasting the latest from the midst of Super Bowl Village. For the citizens of Indiana, Super Bowl XLVI was a 10-day celebration, though most of our New York and Boston visitors arrived within the last four days. Nearly everyone I have talked to within a couple of hours’ drive of Indianapolis came to see Super Bowl Village and/or the NFL Experience.

Some good luck worked in our favor. First, Mother Nature graced us with unseasonably warm temperatures, averaging above 50 degrees—nothing like the freezing temperatures and snow/ice storms that usually befall central Indiana this time of year. Second, the two teams represented on the playing field brought in fans from wealthy cities—New York and Boston—who came ready to spend money in the Heartland. Third, when planners called for 8,000 volunteers, a total of 13,000 stepped forward—though in my mind that abundant support does not reflect luck but, rather, the giving nature of Hoosiers.

I felt a surge of pride, watching this community-transforming event unfold. It was a feeling similar to what I feel every time I attend one of the national banking conventions. Coming soon is the American Bankers Association’s National Conference for Community Bankers in Palm Desert, Calif., Feb. 19-22, and the Independent Community Bankers of America’s Annual Convention and Techworld in Nashville, Tenn., March 11-15. I would strongly urge bankers to attend one of these national events to benefit from quality education, trade shows and banker-to-banker networking … resulting in a transformative experience for your bank and your community.

Congratulations to the Indianapolis Super Bowl Host Committee. Congratulations to this great city and state for consistently showcasing our Hoosier hospitality. Congratulations to the Super Bowl XLVI champion, the New York Giants. And congratulations to those bankers who will attend one of the forthcoming national conventions, in the interest of moving their banks and communities forward!

Misstate of the Union

Last week the president of the United States addressed “we the people” through the State of the Union address. These annual speeches are telling, often as much for what they do not cover, as for what they do. This year Hoosiers took special interest in viewing, since our own Indiana Gov. Mitch Daniels delivered the Republican response. While the president made some good points, he could not resist bashing bankers. His perpetual, unfair characterization of bankers frustrates me. It is past time for him to acknowledge and extol the good deeds that bankers do.

Gov. Daniels’ response was excellent. He began by listing points in the speech he agreed with, and that he felt Republicans would help the president to accomplish. Then Daniels focused on the economy, which the president had covered only lightly. In the spirit of conciliation, Daniels encouraged both Democrats and Republicans to seek out areas of mutual agreement.

As for criticism, Gov. Daniels had plenty to mete out regarding the president’s performance during the past three years. Many of us in the business community likely would concur with the governor. The Obama administration continues to default to the idea of a larger federal government as the answer to our economic malaise and high unemployment rate.

Stacking regulation atop regulation will only serve to deprive entrepreneurs of incentive. Instead we need to encourage and motivate entrepreneurs, who can create the jobs we so desperately need to begin the long climb up the mountain of prosperity. Certainly President Obama did not create the economic problems we now share, but he was elected on the premise of change. The goal of that change was to get the economy going again. He has clearly failed.

Even Obama must recognize his failure, as evidenced by the lack of meaningful economic coverage in last week’s State of the Union address.