Reader Complains About Community Bank Rankings

To the Editor:I read your article on community bank profitability (August 2001 issue) with great amusement, which was quickly followed by a good deal of disdain.

I would like to encourage your organization to do a little more in-depth homework before you publish as facts data that is blatantly misleading.

I refer specifically to one of your "most profitable banks”, High Street Banking Co. If you will do just a bit more homework, you will find that the only reason High Street Banking Co. is profitable at more than a break-even basis is accounting trickery. Again, if you take time to look, you will see that they have lost a huge amount of their shareholder’s investment since they opened, and that they are only profitable because they booked tax credits stemming from these losses as income during your measurement period.

This is, in my opinion, a serious flaw in GAAP. However, I would expect your organization to account for this fuzzy math and not promote serious unprofitability as the opposite. I sincerely hope that you will issue a corrective statement relative to this issue.

Greg Gibson
Mr. Gibson is a CPA who works for another bank in North Carolina.

Editor’s reply: Mr. Gibson appears not to have read the article. It plainly stated: "Admittedly, High’s taking the top spot is a bit of a fluke. The bank is about three-and-a-half years old and an accounting change last year—which boosted its ROE and growth in per-share earnings— was largely responsible for its top-notch earnings.”

To the Editor:

I enjoyed your article on EBPP (electronic bill presentment and payment) in the July issue of USB. There is another issue that must be resolved before this service can proliferate.

The issue is customer care. With a multitude of providers to billers, there is a need for the consumer provider (bank, other) to offer a single point of contact to resolve customer inquiries or problems. Otherwise consumers will face multiple contact—to which they have an aversion—and that creates animosity toward bill presentment.

Bob Drennan
The Drennan Group

To the Editor:

I relished Bob Bennett’s reunion article on Luray, KS (July 2001). I grew up approximately an hour south of Luray in Pratt, KS, where my father still runs the Peoples Bank.

The story will strike a nerve with Midwestern bankers! It poignantly captured the essence of small town bankers and leading community citizens. The story shows the money-multiplier effect that enlightened and committed bankers can have on their communities.

Arthur L. Loomis II
Northeast Capital &
Advisory Inc.
Albany, NY

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