The Banking Community

Bill Rosacker, president and CEO of United Bankers’ Bank in Bloomington, was elected secretary of the Independent Community Bankers of America in March. TCB’s conversation with him about the health of community banks and their challenges took place on the day the U.S. House of Representatives initially rejected the $700 billion bailout plan for U.S. financial markets. Community banks put themselves in a separate category from the large financial institutions that are making news.

According to the Independent Community Bankers of America (ICBA), a community bank is a locally owned bank that focuses on helping individuals and businesses within a small geographic area. Rosacker explains their role in the banking economy.

How are community banks doing in this economy?

Community banks are generally doing well, with a few exceptions. They were never involved in the subprime world. They had some real estate development loans, yes, but for the most part community banks lend to small businesses and some commercial real estate that’s owner-occupied. They are involved in all facets of lending, but they are not concentrated in one sector.

How do community banks differ from other banking institutions?

Community banks are very diverse. They can range from a brand new bank of a couple million dollars to well over a billion dollars in assets. They are locally owned, usually, or if they are publicly owned, they are not widely held. It’s more defined by philosophy. They are involved in the community: what they take out of the community, they put back into the community. Wells Fargo or Bank of America—they take dollars from one state and put them in another state. Community banks have a local decision-making process—it’s not defined in an operating procedure book from the home office 2,000 miles away.

Community banks focus their attention on families, businesses, and farmers. Community banks are small businesses themselves, and they want small businesses to grow and prosper. They function believing that you depend on the community as the community depends on you.

What type of bank belongs to the Independent Community Bankers of America?

We have 5,000 members in the Independent Community Bankers of America, including more than 600 midsized, publicly traded community banks. Three of every five Federal Deposit Insurance Corporation (FDIC) banks with a billion or less are part of ICBA, but then we have more than 100 members with assets greater than a billion. Member banks employ well over 300,000 people in all 50 states.