Counselor, Advocate, Friend

It’s the job of ICBA’s member relationship officers to help community banks make the most of their time and money

By Carol Patton

A decade ago, Heartland Bank, based in Gahanna, Ohio, was searching for cost-cutting measures to help improve its earnings. Back in 2006, the economy was still struggling, but unlike other financial institutions, Heartland refused to boost its bottom line by offering subprime mortgages or to participate in the loose lending standards that were prevalent at the time.
Scott McComb, chief executive officer, president and chairman of the $790 million-asset bank, says Heartland started examining its association memberships. Which ones could it do without? Which ones weren’t helping the bank grow and prosper?

ICBA was placed on the chopping block. Shortly after notifying the association that the bank would not renew its membership after 25 years, McComb met with John McNair, who at the time was an ICBA member relationship officer (MRO). The pair struck a deal: McComb would renew Heartland’s membership only if McNair helped the bank save twice as much as it paid in annual dues.

Nearly two years later, McNair won that bet while also earning McComb’s trust and respect.

“I was on my way to becoming a nonmember,” says McComb, now one of ICBA’s most active supporters. “I did a 180 and am very glad that this whole situation happened.”

ICBA’s 15-year-old MRO program has evolved since then and now supports eight MROs who recruit and service community banks throughout the country. Headed by McNair, executive vice president of ICBA member relations, MROs connect member banks with ICBA programs, products and people to help them deal with challenges ranging from regulatory compliance to boosting balance sheets. Member banks often consider MROs as invaluable business partners whose industry knowledge and experience have helped them outperform nonmember banks by an average of 10 percent on overall return of average assets.

“Our folks have really turned into business and operational consultants,” says McNair, adding that ICBA is the nation’s largest banking trade association with nearly two-thirds of all community banks as members. Members represent 63 percent of the industry’s market share, while their annual retention rate is roughly 95 percent. “We play quarterback for the ICBA team. Five years from now, if we execute our strategy properly, the community banking industry will look at [MROs] as one of the most valuable partnerships they have.”

Back at Heartland, the community bank has managed to save about $14,000 each year over the past decade by taking advantage of three programs: ICBA securities, ICBA Bancard and the ICBA Travelers Insurance Program.

“Five years from now, if we execute our strategy properly, the community banking industry will look at [MROs] as one of the most valuable partnerships they have.”
—John McNair, icba

McNair was the one who introduced McComb to the Travelers Insurance Program. Each year, when claims are low, ICBA receives a refund check from Travelers and then splits the funds among member banks that do business with Travelers.

“I switched our insurance to Travelers, which saved us a bunch of money [partly] because of the rebate program,” says McComb. “If you pile all of these programs together, we created income enough to double what it cost us to belong to ICBA.”

Another two of several discount programs involve companies such as Vining Sparks, a broker-dealer that serves the investment needs of community banks. The second involves Fidelity Information Systems (FIS), a provider of financial technology solutions that offers discounts on credit card processing fees.

Business booster
In addition to discount programs, McNair persuaded McComb to attend ICBA’s convention by giving him a free pass. While there, McComb was introduced to the Federal Agricultural Mortgage Corporation (Farmer Mac), a government agency that provides a secondary market for agricultural real estate mortgage loans and rural housing mortgage loans. He explains that the agency helped the bank structure an agriculture portfolio, which grew to $50 million over the past three years and represents nearly 9 percent of the bank’s portfolio.

Meanwhile, McNair routinely checks in with McComb, emails updates about new or existing association programs, and often consults with him about the bank’s business plans or operations.

“Consider MROs as a staff member, a resource, because they know how all the different member benefits are hooked together,” says McComb, who has become politically active with ICBA and brings three bank employees with him to each of the association’s conventions. “It’s really just a matter of how much you want to reach out for advice and counsel on the products you’re already paying for through your membership.”

All in the family
While many community bank members tell their own stories about the influence of MROs on their bank’s success, MROs also benefit from these relationships.

Chip Lynch, vice president and MRO at ICBA in Dallas, Texas, has worked with nearly 1,000 community banks in the Southwest over the past 11 years. He shares popular ideas along with best practices among banks in noncompeting markets and, on occasion, assists as an advocate for them with a vendor.

“Consider MROs as a staff member, a resource, because they know how all the different member benefits are hooked together.”
—Scott McComb, heartland bank

He points to one member bank that recently experienced issues with a vendor. Lynch says he jumped into the conversation to not only defend the member bank but also to help negotiate a “satisfactory” outcome for everyone involved.

Over the years, he has developed close friendships with some of the bankers in his region, so much so that they have attended football games together, dined out, skied and, several times a year, rode bicycles as a group.

“You get beyond this role as a salesperson,” says Lynch. “I value their membership, our relationship, and friendship. ”

He says the worst thing ICBA members can do is not take advantage of their region’s MRO.

“Let us share information with you,” says Lynch. “We can help you maximize your membership investment, which can help your
bank flourish.”

Carol Patton is a freelance journalist in Las Vegas.