Ken Fergeson is committed -to his profession, to his community. His long-time involvement in banking - in addition to serving as chairman and CEO of NBanC in Altus, Okh. - has included chairmanship of the Oklahoma Bankers Association and culminated last September in his installation as chairman oftlie American Bankers Association.
Support for his community has included sewing as chairman of the Oklahoma State Chamber of Commerce. Arts and culture are a big part of Fergeson's community service, and include involvenmt in numerous groups in that field. In 2001 he received the Business in the Arts Leaadership Award from the Business Committee for the Arts Inc. and Forbes magazine.
His firm belief that the arts play an important role in a community's quality of life and economic vitality took him to the Kansas City area recently for a symposium of the Arts Council of Johnson County (Kan.). Following this engagement he answered questions for BANKNEWS Editor Bill Poquette on the way to the airport. The interview has been edited for length and clarify.
What made you want to be chairman of the ABA?
I don't know that I ever set out to be chairman of the ABA. The first bank I worked for was the former Liberty National in Oklahoma City, which was a great community bank. They really believed in giving back. They did volunteer work for everybody but they also believed in giving back to the profession. They encouraged even young trainees to join the Oklahoma Bankers Association and get involved. My first ABA function back then was a correspondent and commercial lending conference. Later, I ended up really liking the Community Bankers Conference. For a banker of less than $1 billion you're with peers and you always get great ideas. One of my favorite stories is about the son of a banker who died. The son retired from IBM and offered to move back to oversee the family business. he went to the Community Bankers Conference in Phoenix and one day he said, "Ken, all these guys are giving me their secrets." I guess in his industry you never talked business with a competitor or a potential competitor. Bankers are so generous. I think every banker needs to give back in some way, whether it's at the state level or even a county banking group. And most of them do.
You're a community banker. Do you have a problem speaking for the whole industry?
No. Last year I went to an International Monetary Conference in Berlin and it's the hundred largest banks in the world. I was giving an address and I said, "You know, you guys are maybe the biggest bankers but I'm the tallest banker in the room (something beyond six feet). I've always believed - even back in my Liberty days - that it takes all of us. It takes a Liberty or UMB Bank (in Kansas City) to help finance the sewer system or the highways. And it takes me to finance the guy that wants to start a carpentry shop in his garage.
Are you concerned about the new rash of mergers?
I don't think so. I'm concerned from an association standpoint because it eliminates a dues payer every time there is a merger. And that's at both the national and state levels. It's really a challenge sometimes to the state associations, even more so than the national groups. It hurts everywhere. But in terms of service to the consumer, in terms of having a direct effect on me, I don't think so. I think it'll create a few more opportunities.
As chairman of the ABA does the too big to fail issue bother you?
No, not really. That's been a hot topic for two or three years now. If you listen to regulators - Alan Greenspan says there is no such thing as too big to fail - but you know that it's not necessarily true. It doesn't mean the shareholders won't lose their interest. But the payments system is so diverse now with credit unions and banks and all the people that are in the business. It makes it a little tougher to be too big to fail.
What are the legislative priorities for the ABA this year?
Besides credit unions? Number one we would still like to do something with FDIC reform. I think there's a possibility that something might actually happen. Of course I've been saying that for two or three years now. The House version that passed the last couple of times is wonderful. I think we could certainly live with that. The Senate has said it's not opposed to going forward. There are some things in there that are going to be hard for us but I think it's possible. The ABA got a lot of credibility in the last go-round when we helped pass Fair Credit. We were kind of the honest broker in all of that. The Senate staffers can believe what we tell them and the House people and the Administration.
Is there anything new on the credit union front?
We have lawsuits going on in Missouri and in Utah, where they have just taken their rules and thrown them away. There is a regulatory relief bill right now that will give credit unions some additional commercial lending powers. We're going to fight that really hard. I can't for the life of me understand the credit unions in their religious belief that they deserve to pay no taxes when the whole rest of the world has to. Every other co-op pays taxes; mutual banks pay taxes. Credit unions have a lot of advantages. One advantage is they can actually debit their customers' accounts for their PAC money. Man, if I could do that, I think I could raise a lot of money. It's a good time, though, with states having the economic problems, to talk about parity. Right after the Community Bankers Conference (in February) I go to debate the credit unions at their convention in Washington. I want to tell my side of the story. I want to explain to them that those big mega-credit unions are screwing it up for the regular guys. I don't know how that will go over. Some of them are just monsters and they do everything. I think if they see me, they will say that bankers are real people.
Anything new on the real estate issue?
I believe that will eventually work itself out. Banks in 21 or 22 states have real estate powers, and, of course, every credit union in America has real estate powers, every S&L has real estate powers and for some not to have it is crazy. I'm hoping that at least we'll be able to work out a compromise and I would hope that it will be this year. It would be nice to get it off the table and quit talking about it. A lot of things you just need to get behind you. You kind of know what the answer is going to be but it's hard getting there. It takes so much time and energy. And money.
What kind of a town is Altus?
It's a little regional town. Of course the Air Force base there brings us about half our population and a lot of economic activity. But it's really a sparsely populated part of the world, mostly dependent on agriculture. It's one of the smallest counties in Oklahoma, so there's not a lot of wealth. There's no oil and gas down there. But it's a great town. I really enjoy living there. The Air Force base keeps the average age young and it keeps a lot of activities going - there's always something going on.
How did you come up with the NBanC name?
We were National Bank of Commerce when I bought the bank and we wanted to go with a state charter. We ran the numbers and for our little bank it would have made us $180,000 a year by changing charters - savings on fees and a larger lending limit. We make a lot of loans so we have to sell a lot of loans. We did a big study and I did a great presentation but then I was worried because the man I bought the bank from is still on the board. He's 72 years old or so and I was really worried about it because his father named the bank. I finished and he said, "What are you waiting on?" In fact, he came up with the name. he said, "We've always been known by NBC, how about N-B-N-C?"
Do you have Internet banking?
Yes. It has gone over fairly well. Customers can do everything online - pay bills, the whole bit. We're in three Air Force towns and we've always done a lot of international banking - international meaning they live elsewhere and bank with us - but they did it on 800 numbers or they did it on the military telephone system. But of course with the Internet it's just cheap and easy wherever you are. It works really well.
Are you doing much with insurance and brokerage?
We had a brokerage activity that we just stopped. And we're starting one with Smith Barney now, which is almost like dealing with the competition - but they're not really in Oklahoma. They have Smith Barney brokers in the bank and they hire and fire.
Are community banks doing all they might be capable of doing with insurance and brokerage?
I don't think we are. We have a little tiny insurance agency that we don't do much with. I don't know exactly where we're going with this. Maybe bankers' banks, those kinds of "poolers," will be able to help us more. I found that with our brokerage service we had before, we just didn't know how to supervise it. We didn't know how to motivate him make those cold calls and ask for the business. We're not geared that way. But some small banks do a wonderful job with insurance. They make as much money off their agency as they do the bank.
Is Check 21 going to help you?
It'll help me in that we have had our own courier system, driving 150 miles to Oklahoma City, and it costs us a lot of money. So I think it's going to help me a lot. I think it will help a lot of rural banks in particular. It should help a lot of the big banks, too.
What are community banks' biggest challenges right now?
One of the things we really have a struggle with is professional staffing. I used to steal from the big regional banks like everybody else, but there's not much left to steal from any more. They have downsized so much. None of them have training programs like they did when I got into banking. There's not a pool of professional bankers that are kind of well-rounded. Now people get into banking and they learn one aspect and they grow up in that, but they don't get that broad perspective that we got back in those old training programs. That worries me some. We're consciously tryine; to hire some young people with no banking experience but the odds of keeping somebody all the way through in a little bank with no upward mobility is hard. I think it's true especially in rural, nonurban areas. In urban areas, though, it's still a problem, I think, finding good bankers.
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