Ralph Barber Jr. is a friend of mine. Until
recently, he was also my banker. But his bank, First Security National
Bank, is the latest bank failure in 2009.
So far, 29 banks
have failed in Georgia since 2008, more than in any other state.
According to some reports, another 30 Georgia banks might fail next
year. It’s easy to lose sight of what these bank failures mean. If you
read most of the news headlines, you might think of these bankers as
greedy fat cats who deserve their fate. But this usually isn’t the
case, especially at the small community banks that comprise the bulk of
the bank failures in Georgia.
The truth is, these banks are part of our communities. Bankers like them are our friends and our business partners.
I
work with several local bankers, and Ralph was one of them. He is a
husband, father, Sunday School teacher, and chaplain of a football
team. He contributes to local charities. Ralph is a great friend and
his bank served an important function: providing capital to help drive
the biggest generator of jobs in the U.S. … small businesses.
The
statistics make it clear that small businesses create more jobs than
any other sector. According to M.I.T. researcher David L. Birch, small
businesses have generated two-thirds of all private sector jobs in the
last 25 years.
Local banks like First Security National and
the hundreds of others in Georgia have been the fabric of small
business for decades. ABC News recently reported that they make 20
percent of all small-business loans, even though they only hold about
12 percent of all bank assets, About half of all small-business loans
under $100,000 are made by community banks.
With fewer local
banks, small business owners will find it harder to get the loans we
need to grow our businesses, and harder to hire new employees when we
need them. This vicious cycle is a continual drag on the economic
health of America.
Much of the media has tried to portray rich
bank presidents and CEOs as the poster boys for everything that has
gone wrong with the American financial system the past couple of years.
After all, banks got all that TARP bailout money and used it to lavish
big bonuses on CEOs, didn’t they? Actually, most of the TARP money went
to the huge mega-banks, not small community banks.
The fact is,
it’s not an “us” vs. “them” system. We are all tied together in this
complex, interrelated economy, and bad news for one sector (like
community banks) usually spills over to others, like small businesses;
and eventually, their employees and families.
The local banker
is an important part of this system that we simply can’t do without. I
hope that far fewer community banks fail in the next year than the
experts are predicting, and that community banks start growing and
expanding again. If so, this will be good news for my business—and even
better news for Ralph and hundreds of other community bankers like him.
Brian Patton, CCIM, is a commercial real estate broker, author, and lecturer. He is CEO of the Alpharetta-based firm of Capital Realty Advisors and can be reached via his websites: www.CommercialPropertyGuy.com OR www.GeorgiaBankAssets.com