CEO's Corner

About this BlogNoah W. Wilcox, President and CEO

Over the years, we've distributed statement stuffers, newsletters, including electronic ones, and other mailings - all of which are effective media for communicating with our customers.  In addition to these delivery methods, which we will continue to use, I wanted a space on our redesigned website to share industry information, my business perspective, personal experience and insight, and make it an informal forum for sharing information in our very digital age.  I hope you enjoy it.  If you are wondering about a specific topic, have a question or would like me to address a specific subject, please email us and I will do my best to work it in at some point as I go along.  Thanks for reading!


Your Community, Your Bank

January 10, 2010

Happy New Year!  As we begin 2010 I look forward to the year with optimism.  With that said, I know it will be a challenging year for many people and it will also be another challenging year for the financial industry.

You will begin seeing more of our new approach in the weeks ahead, but I wanted to share it with you here as well.  Grand Rapids State Bank has been serving the Grand Rapids community for more than 95 years.  That is why we say – “Your Community, Your Bank – Grand Rapids State Bank”.

While the mega banks of Wall Street, including those with a presence in Grand Rapids, create new fees to make up for lost income, as they pay massive executive bonuses after being bailed out with taxpayer money while they continue to pander to the market, Grand Rapids State Bank is simply continuing to serve our community responsibly. 

Grand Rapids State Bank finished 2009 strong and is well positioned for the years ahead.  We stuck to our long held conservative principles and a traditional model of banking that is not broken and the result is that we will be here to continue serving the community for generations to come. 

If you are tired of your tax dollars being abused by mega banks I encourage you to move your money.  If you’re tired of terrible service at big banks I encourage you to move your money.  If you want a banker who knows you, I encourage you to move your money.  If you care about your community I encourage you to move your money.  Move your money to a community bank, like Grand Rapids State Bank, and send the Wall Street mega banks and Washington a real message.

Trifecta

November 21, 2009

The House Financial Services Committee passed a trifecta of amendments for tax payers and the community banking industry last week while continuing to work on their broader regulatory reform legislation.  These were meaningful amendments that I believe will go a long way toward preventing the kinds of transgressions the banking industry witnessed that led to near financial collapse for our nation.

First, Rep. Paul Kanjorski (D-Pa.) offered his systemic-risk amendment that would create a formalized process for regulating, and in some instances dismantling, financial firms that are deemed systemically dangerous to our nation’s economy.  As you might imagine this amendment was strongly opposed by some, including Wall Street.  This is  amendment represents a strong step forward in managing the Too Big Too Fail banks going forward.

Next, Rep. Luis Gutierrez (D-Ill.) offered two important amendments.  The first of the two amendments, which was cosponsored by Rep. Donald Manzullo (R-Ill.), changes the FDIC assessment formula so that it is based on total assets minus capital.  The current formula calculates deposit insurance premiums on a formula of per $100 of domestic deposits.  While most of the 8,000 community banks average 95% domestic deposits and large Wall Street banks average about 50% you can see why this was a critical issue.  Prior to the change the 8,000 community banks represented about 20% of the nation’s deposit based but pay 30% of the deposit insurance premiums, this amendment will help level the playing field and ensure that forms are paying their share.  Further, the assets – not deposits – are what introduce risk into the system and as such should be the basis for the premium calculation.

The second Gutierrez amendment would prefund a systemic-risk resolution fund that all financial firms over $50 billion in assets would be required to pay into.  This is a separate fund from the deposit insurance fund and the concept is to require mega banks to pay for their own failures.  This amendment may go the furthest when it comes to protecting the tax payers in the future.

Have a happy Thanksgiving!

Your Loss is Their Gain, Again

November 1, 2009

CIT filed for bankruptcy protection over the weekend.  While the fact that CIT is lender to nearly one million small and mid sized business, the real story is that United States taxpayers are going to take it on the chin.  CIT received some $2.3 Billion (Yes with a B) in taxpayer bailout money.  While most news reports refer to it as government money, make no mistake this was YOUR money.  This sizable investment made by the federal government, on behalf of US taxpayers, will be wiped out – a loss that we will not recover.  If you pay taxes you should be outraged.

Once again, the taxpaying public has been duped.  When the public did not like the risk or believe in CIT they quit investing, then the US Treasury forced our hand by way of TARP.  This may be an over simplified take but it illustrates at a high level the degree to which the public has been used.

CIT was the first company who received tax payer assistance to fail, will it be the last?

Consumer Health Care Protection Agency

October 13, 2009

Many of you who read this know about my frustration with the current administration’s proposal for a Consumer Financial Protection Agency, the CFPA.  the concept is simple, or is it:  Create another government agency, to add to the already crowded field of bank regulatory agencies, to ensure that consumers are able to understand the financial products and services that they purchase.  I would agree that the lengthy legalise, of a mortgage document for example, is cumbersome and takes time to read.  But the courts, especially more liberal ones, have made sure that we’ve needed to have that language lest people be awarded for spilling coffee (hot right?) and burning themselves – because the person who handed it to them didn’t warn them that it was so hot that it would melt steel.

I digress.

While the administration is pressing for what they hope will be easier to understand banking disclosures they seem bent on making certain that nobody, not even congress, understands the universal health care proposals that are floating around Capitol Hill.  Today a Senate committee will vote on a version of the heath care bill that has not been read by many, if any, members who will be voting.  Who, may I ask are these people working for?  The American public or the President?  It is time for our elected members to once again represent the people who elected them, and let party politics and presidential badgering take a back seat. The founding fathers would role in their graves if they saw bills being passed with such disregard.  The banking industry was plunged to near devastation due to a few players taking risks, acting now without regard to the future and taking immediate return while being willing to forestall the inevitable unfavorable results.  Is it not what congress is perpetrating on the American people as we speak?  I propose, as a simple solution, the Consumer Health Care Protection Agency.

Think about it.

A Hearing, Testimony and now…

October 8, 2009

The truth is finally a matter of public record.  On Tuesday this week Senator Linda Scheid, DFL Brooklyn Park, held a special meeting of the Senate Commerce Committee which she chairs.  The hearing was, in part, in response to the three part series by the Minneapolis Star Tribune – Bankers Gone Wild.  In essence, the three part series suggested that Minnesota had too few state banking regulators.

Many individuals were invited to testify, including yours truly, and the result of a four hour hearing was simple.  More regulators would not have prevented the tough economic times, or prevented some banks from loans that have lead to their sale, or in a few cases their failure. Minnesota has the third highest number of bank charter of any state in the union.  As a result, we can expect to see more troubles related to the financial meltdown by the numbers.

The Star Tribune article failed, miserably, to take into account the economy, consumer responsibility and in the end ignored many facts while they included fiction in their place.  Good news does not apparently sell newspapers, and reporters seem willing to compromise their integrity to remain employed.  While the nature of media reporting is disappointing, I believe that the Senate Commerce Committee now has a much better understanding of the facts and appears to see no need for new legislation.  I applaud Senator Scheid for exploring the issue, encouraging education on the matter for her committee and for taking the time to listen and learn during the testimony that was delivered over four hours.  With that out of the way I look forward to her committee spending time on productive proactive work.

You can view the testimony here.  My testimony can be found at the 3:08:55 mark.

A Time For Reflection

September 11, 2009

Twin Towers 9/11/01
We will not forget.

Moral Hazard – Alive and Well

August 29, 2009

If you are reading this, it is important for me to share the following with you:

J.P. Morgan Chase, Bank of America, Wells Fargo and Citigroup hold more than $4 of every $10 on deposit in this country.  These four banks also issue one of every two mortgages and two of every three credit cards.

You may wonder about why this is important and why I would draw attention to this.  I am doing so because these four institutions are so large that there is little incentive for them, individually or collectively, to manage or guard against risk because they know that the US Government (aka American taxpayers) will bail them out – that is the moral hazard and it is clearly alive and well.

It infuriates me that some of the biggest financial institutions in the country we allowed, even encouraged, to get bigger during the crisis and are more bloated than they have ever been after government engineered and approved mergers.  As taxpayers we need to send a message to Washington that this lax oversight is unacceptable.  I encourage you to write your members of congress, call their offices and “use” you vote.

Thank you Zygi Wilf

August 19, 2009

I would like to think the my pleading, via the two open letters to Mr. Wilf from September of last year posted here on this site had an impact on the Vikings coming up with a Future Hall of Fame quarterback – Brett Favre. But, reality prevails. At the end of the day we will start this years Minnesota Viking’s season with a “real” quarterback. All flip flopping aside, this is a stroke of genius for the Viking’s franchise. Ticket sales are going mad, merchandising is working at a break neck pace to satisfy demand for anything with the number 4 on it (Sorry John David Booty). While the signing of Favre may not win the Viking’s a new stadium, at least not yet, it will win back many fans who have given up and gone home after years of lousy QB leadership, or the absolute lack of it and it will win games – period.

I would like to say “thank you” to Zigi and Mark Wilf and “Welcome” to Minnesota to Brett. It appears that the Vikings are here to stay, in Minnesota, at least for now and are poised for greatness. The building blocks are all in place. If egos can be set on the bench the team on the field will win!

SKOL VIKINGS!

Grand Rapids Area Sees a Rash of Counterfeit Bank Notes

August 16, 2009

The Grand Rapids area has seen a rash of counterfeit bank notes in recent weeks.  Most have been $100 bills, with a few $50 bills also discovered.

Because of the number of counterfeit bills that we have detected and reported and Grand Rapids State Bank and due to the number of questions that we have received from consumers and business owners it seemed only logical that we share a few points with the readership of the Grand Rapids Herald for those interested in how to detect fraudulent currency.

THE PAPER
Pay attention to the feel of the paper on which notes are printed. Genuine notes are printed on special paper that has a rough texture while counterfeit notes have a smooth texture.  Also genuine notes have small red and blue fibers that are embedded in the paper while counterfeit notes either do not have any fibers or have printed lines that look like fibers, close inspection will reveal the difference.
THE SERIAL NUMBER
The serial number on each genuine bank note is different. When receiving notes, you should therefore examine the serial number if receiving more than one note.  Also, serial numbers have a distinctive style, the numbers are evenly spaced and the ink color used is exactly the same as that of the Treasury seal.  Counterfeit notes often have irregular spacing of numbers and/or a different shade of ink from that of the Treasury seal.
THE PORTRAIT
Pay attention to the portrait on the note. The genuine portrait appears lifelike and stands out, while the counterfeit portrait is usually lifeless and flat.

THE BORDER
Fine lines in the border area of a genuine note are clear, crisp and unbroken.  On a counterfeit note, the lines in the outer margin and in the scroll work may appear blurred or indistinct.

MORE TIPS
Currency notes from 1990 and above have security features and threads – for examples and more information please visit www.secretservice.gov.

Lastly, remember to look for the differences, not the similarities.  If you identify a counterfeit note don’t give it back to the passer if at all possible, note the description of the passer and any vehicle that they are using and contact local law enforcement. Possessing counterfeit notes with the intent to commit fraud and knowingly using counterfeit bills is a federal crime that is subject to a fine or 15 years in prison or both.

MPR – Small Banks Push Back

August 3, 2009

I spent thirty minutes this morning talking with Kerri Miller, host of the Midmorning show on Minnesota Public Radio.  It was an interesting exchange of ideas regarding regulation reform for the financial services industry.  I encourage you to listen to the entire show, if you are simply looking for my remarks you can move the play cursor to 32:00.

End Too-Big-Too Fail

July 27, 2009

How can our economy remain competitive and thrive if its businesses, including financial institutions, don’t bear the brunt of their poor actions and decisions? It can’t. But that’s exactly what is happening now as our government props up the Wall Street institutions that created economic calamity. We need not only a return to traditional financial standards and free market discipline but to downsize the Wall Street megabanks to eliminate the threat any one institution can pose to our nation’s entire financial system.

Common sense would suggest that no financial institution should ever become so large and powerful that it becomes too big to manage, too big to regulate and too big to face judgment in the marketplace. Nevertheless, for years policymakers have sanctioned and approved too-big-to-fail financial corporations. Now they’re using hardworking Americans’ tax dollars to keep those institutions afloat.  As guardians of Main Street, community bankers nationwide have long urged an end to too-big-to-fail. For years, our pleas to put taxpayers and our nation’s financial well-being above the interests of individual entities fell on deaf ears. It was only in the wake of the financial-markets crisis that policymakers could no longer ignore what was obvious to the rest of us. Now the Obama administration and Congress are beginning to address the serious problem of too-big-to-fail institutions through the administration’s financial regulatory reform plan. While parts of the plan provide a good starting point, there is much more that can be done to ensure we don’t repeat this crisis in the future. As a community banker I support provisions in the administration’s plan that create a consolidated systemic-risk regulator, impose higher capital and liquidity requirements on too-big-to-fail institutions so they can better absorb losses when they stumble and give the FDIC special resolution authority to unwind and resolve systemic risk firms that fail. However, to protect taxpayers and our economy, we need regulations to downsize the megabanks, require firms that pose systemic risks to pay into a separate systemic-risk reserve fund that can be used to unwind mega-institutions when they fail and impose a special FDIC systemic-risk premium for the extra burden the largest banks place on the Deposit Insurance Fund. Another part of the plan threatens to undermine the way community banks successfully serve their customers and all of Main Street America. The proposed Consumer Financial Protection Agency would have far-reaching powers over bank products and services provided to customers. Unfortunately, the agency as currently proposed would hurt, not help consumers. Community bankers pride themselves in offering our customers the safest and most sound products and services in the marketplace. The proposed agency, by separating consumer policy from safety and soundness supervision conducted by bank regulators, would  create more regulatory confusion without improving consumer protections. Those increased regulatory costs would be borne by all consumers, making many financial products and services more expensive for all Americans and perhaps not affordable to some.  Community bankers work with customers to ensure that they’re well informed about the products and services they choose and that they are capable of managing them. So why should community banks and their customers be punished for the deceptive practices of others?

Instead, a more targeted approach to fixing the real problems of our financial system lies in focusing on too-big-to-fail institutions. By implementing measures to regulate giant financial firms and reduce the risks they pose to our economy, Congress can begin restoring citizens’ faith—and essential free-market discipline—in our nation’s financial system. We must ensure that any new regulatory regime addresses too-big-to-fail institutions while implementing meaningful consumer protections that will not disproportionately affect the community banks that did not contribute to the current economic crisis. We must get it right for the long term—future generations of Americans are counting on us.

Confidence

July 16, 2009

As I sit down to write this entry, I continue to watch the media reporting swell with respect to the Freddie Mac and Fannie Mae challenges and the failed IndyMac bank in California.

I am, admittedly, disappointed and frustrated with the media reporting of late. I can only characterize the media reporting as inaccurate, overly broad and to an extent misleading.

I offer you this:

Community banks are among the strongest in the nation.  Community banks are well managed, much more risk adverse than their large bank counterparts, generally locally owned and managed, highly regulated and highly capitalized.  In short community banks are safe, stable and ready to help you.

No customer of an FDIC insured community bank has every lost one penny of insured deposits.  Not ever.

I have noticed two trends of late.  The first is that consumers are shopping for rates on deposit products in this down rate market.  I understand that.  However, I offer the following:

Deposit pricing can be an indicator of how badly a particular institution may, or may not, need deposit dollars.  Days before a recent bank failure the bank in question was paying 4.17% on one year CD rates and offered a claim on their website that their rates were among the highest in the nation.  Great right?  Not so much.  In part they may have needed that funding much more than some other institutions – the result is that the rates offered are too good to be true.  My approach is to take good care of our customers and to be fair – always.

The second thing I have noticed is that several consumers, customers and non-customers alike are asking if their money is safe.  I offer the following:

Community banks are among the safest places for your money.  In our case Grand Rapids State Bank has been around in excess of 90 years.  I am the fourth generation of my family to own and manage our business.  That means that I have capital at risk each day when I come to work.  Not only do I have the best interest of our customers at the forefront of what I do I am also looking to protect the business that my family has spent the past 94 years building.  As a result we have a sound loan portfolio, we make good decisions, we are not greedy, we are fair and we enjoy the opportunity to work with and take care of our customers.  Don’t be afraid to ask your bank the questions that you need to in order to feel comfortable.

I am tired of the media reporting, but know that they will continue – after all it gets everyone’s attention. In the meantime we will be here helping our customers grow their deposits and manage the rest of their finances. The next few months may be an uphill battle for some – we will walk the road together with our customers.

Consumer Protection or Elitism?

The current administration has proposed the Consumer Financial Protection Agency (CFPA).  Don’t be alarmed if you have not heard of this new government agency that has a name that sounds warm and fuzzy, it is mostly those in the financial industry that are working through this alarming proposal.  Below I am providing a few highlights of this quiet legislation and I encourage you, if you think this is as crazy as I do, to contact your elected members of congress to tell them what you think.

  • Traditionally, consumer protections have focused on disclosure – if this proposed legislation is adopted many consumers will be told that they are not sophisticated enough or educated enough to use or buy certain financial products or services.
  • The “Agency” would  establish and define a “standard” product or service.  Any financial service provider would be required to offer this “standard” product first.  In order to offer a more complex financial product would require the financial service provider to obtain financial experience questionnaires as required by the “Agency” and would require the qualified borrower to opt-in for the service or product.
  • The products that best fit the needs of the consumers would unlikely be deemed “standard”.
  • For the first time in the history of the United States the federal government will force a major sector of the economy to deny products and services to a large proportion of the population because the current administration believes that American’s can not decide for themselves what is best for them.

This legislation will end, or drastically reduce, consumer choice for financial services and infringes upon a basic freedom that we are promised as citizens of this country – to think for ourselves.

It’s Clear – It’s Special

June 25, 2009

On June 17, 2009 Grand Rapids State Bank hosted their annual Customer Appreciation Day event and served lunch to thousands of customers.  We also celebrated Grand Rapids State Bank Day, as proclaimed by Grand Rapids Mayor, Dale Adams.

Sam Miltich and the Clearwater Hot Club joined us this year and filled the space with sounds that thrilled listeners around the world. The Grand Rapids area is very fortunate to have this caliber of talent to experience and enjoy.  I am grateful for the caring craft that Sam and his band maintain and the delivery of sound in a most easy and enjoyable style.


Clear Water Hot Club – June 2009

Thank you to you our customer for taking time to share a meal and to enjoy the sounds of one of this area’s greatest musical talent.  I enjoyed visiting with many of you and hope to see you again next year when we will do it once again.

History, Perspective and Experience

June 9, 2009

It is with profound pride and a deep appreciation that I log this entry.  In just a few days, on June 14, 2009, Grand Rapids State Bank will celebrate 95 years of service excellence and dedication to the communities that we serve.

From humble beginnings in Warba in 1914 to our industry leading organization today, Grand Rapids State Bank has a perspective on the business that few share.  With four generations of consecutive ownership and three generations actively involved on a day to day basis the continuity of experience creates a window on the business and the obligation to community that is unique to GRSB.  I am immensely proud to lead the organization during this time.

On June 17, 2009 we will celebrate this milestone achievement during Grand Rapids State Bank day, as proclaimed by the Mayor of Grand Rapids.  We invite our customers to our west main bank parking lot to share a meal with us and to share their experiences and stories and to learn about why we are the leader in northern MN for financial services.

Three generations of the Wilcox family will be on hand to share their perspective and all of the dedicated GRSB staff will take time to visit with customers, as we do each day, but in a more relaxed setting as we share a BBQ sandwich.

Beltway Blues

May 18, 2009

I just spent a week in our nations capital. It is an annual pilgrimage for me, as it is for so many other community bankers. The prime mover for me is to remind our elected officials, who succumb to the beltway, that main street America still exists. That real people, with real lives, families, jobs and problems still exist and that there are still real small businesses trying to make communities better and stronger. All of these tax payers need real representation.

newimage

Money is the lubrication of Washington D.C. And with that, sometimes, main street loses. Corporate lobbyists with bags of investor money grease the tracks for legislation that suits their needs, not the needs of the average tax payer. They curry favor with all types and sorts and in the end small businesses and individual taxpayers can be under represented when it comes to certain issues (think $700 billion for the financial bail out).

Somebody once told me that I had no right to complain if I didn’t vote. Similarly, if I don’t engage in the political and legislative process that has a tremendous impact on the financial industry, now more than ever, then I have no right to suggest it could have been done better. While I don’t have all of the answers I do intend to keep a close eye on elected officials, who don’t live on main street and have long forgotten what happens outside the beltway, to ensure that our business is able to operate effectively going forward for the benefit of our customers and the communities that we serve.

God bless America!

Mom And Apple Pie

April 25, 2009

As Minnesota grapples with a staggering budget deficit, the legislature currently has a tax bill in both the House and the Senate. The House bill seeks to raise taxes by 1.5 Billion while the Senate version raises taxes by more than 2 Billion. One of the items being discussed for inclusion in the House omnibus bill is the elimination of the real estate interest tax deduction. This one item alone is a significant driver to raising money in a time when we struggle with a significant budget deficit as a state.

At a time when the financial sector is strained nationally, when our State government and our Federal government are seeking to pass legislation focused on helping homeowners how can the State legislature simultaneously seek to dispense with a tax benefit designed, in part, to encourage home ownership. The deduction of real estate interest is tantamount to apple pie, it’s decidedly American.

The two omnibus tax bills contain much more than just this one item. However, this particular item seems to cut across party lines and be universally unacceptable by homeowners. I encourage you to contact your legislator today and tell them what you think.

The More things Change The More They Remain The Same

April 24, 2009

Happy spring to you! I begin this entry reflecting on how much has changed during the course of the past 12 months. We have witnessed, as Americans, one of the most strained economies in decades. We saw greed revealed in all of it horror, we saw poor decision making and ultimately we saw an utter lack of understanding of how complex and opaque the balance sheets of some of the largest most actively traded companies in the financial markets. The result was a massive tax payer bailout and the relentless media coverage that has endured for months on end. We are just simply living in different times. As I continued to reflect on all of this change it occurred to me that what was most striking, to me, was the how things at Grand Rapids State Bank have been business as usual.

Throughout all off the trouble and strain GRSB has been operating just we were before the crisis. As I considered our business practices, our ownership continuity and ultimately our understanding of our business it was obvious that over the past 95 years we have made steady progress through that understanding which has positioned our organization as a leader in the northern Minnesota.

Our team is terrific and we are here to help. If you have a friends or family who have not experienced the difference I encourage you to show them why GRSB is the real hometown bank that cares.

Service, Responsibility and Pride

March 25, 2009

This past week Grand Rapids State Bank was honored alongside four other community banks across America for outstanding dedication to community service. The Independent Community Bankers of America presented the awards, as they do annually, during their annual meeting on March 20th following presentations from Federal Reserve Chairman Ben Bernanke and FDIC Chairman Sheila Bair.

I am honored to have our four generation financial institution recognized as a nationwide community service leader. I believe, as do prior generations of my family, that community banks have an obligation to give back to the communities that they serve. Our dedicated staff believes this to and took it to heart last year ensuring that all employees volunteered their time during the year to a community organization. Each employee reported in o ver the course of the year during one of the monthly staff meetings we hold to tell their fellow employees how they contributed to the community and to the effort to register 100% participation.

I am proud to lead a leading financial institution and to have the privilege to lead a service oriented staff that helps make Grand Rapids State Bank your trusted financial partner.

A Video Message

February 27, 2009