“Community banks in Arizona had a hard time in 2009”, “A rough road still lies ahead for small banks”, Community bankers reject Obama’s $30 billion TARP”, Do these all sound familiar? It seems lately every time you open a newspaper or magazine this is front page news.

Let’s talk about what is going on. Community banks are essential to the economy. It is no secret that many are experiencing acute credit distress. Community banks are doing more than their share under difficult circumstances to provide the credit that will be needed to create job’s in the recovery.

I want to be sure one clear lesson stands out for all of us to see. The worst excesses that led to the credit crisis were not generated by community banks. Most of the risky sub prime and nontraditional mortgages that fueled the housing bubble were not the work of community banks. They were the work of a highly complex, disjointed and depersonalized securitization process. By contrast, community banking is a relationship business, where character and creditworthiness both count, and where we take care of our customers because they are more than just a number to us.

As we emerge from the crisis, we must look ahead to the long-term viability of our banking system and the reforms that will be necessary to maintain a greater degree of financial stability. At the height of the financial crisis, we saw large, systemically important institutions exempted from the type of supervisory sanctions community banks face every day. It is time to get serious about establishing a credible, pre-funded resolution authority for giant banks and non-bank financial institutions.

The new $30 billion in TARP money announced in January is just more of the stigma-stained money that community banks want no part of. It does nothing to generate new loan demand. We certainly do not want any.

I want to end on two very positive announcements. Our bank was named the number two Community Bank in Arizona for 2009 by a national rating company. There are 43 community banks in Arizona. Various financial benchmarks were used to rate all the banks. We’re very proud. Mike Trueba EVP and Chief Credit Officer was appointed by the governor to the very prestigious State Appraisal Board. The board promotes quality real estate appraisals in Arizona. The board acts as a disciplinary body for appraisers to ensure conformity with the statutes, rules and regulations. Mike believes that anytime a loan officer can become more educated in the appraisal process it is a definite positive in reviewing new loans and monitoring our existing portfolio particularly in this economic environment. Congratulations from all of us Mike.

Banking The Way It Should Be,