It has been a while since the Independent Community Bankers of America had a chairman who can commute to Capitol Hill in 90 minutes.
The relatively short travel time will come in handy for Michael Menzies. The president and chief executive of Easton Bank and Trust in Maryland will soon be the public face of community banking at a time when lawmakers are reconsidering financial services regulation.
Menzies, 61, will officially take the reins Saturday at the ICBA's annual conference in Phoenix. He said the issues at the top of his agenda include asserting the role community banks can play in an economic recovery, rallying against undue regulation and persuading lawmakers not to tar the entire banking industry with the same brush.
"My goal is to make sure that restructuring efforts don't diminish our ability to leverage our balance sheets and earnings for economic growth," Menzies said.
Colleagues say one of his talents is boiling down complex topics with relatable examples. When arguing against the Federal Deposit Insurance Corp.'s planned special assessment on institutions, for instance, he used Easton to drive home his point.
As originally conceived, the assessment would have cost the $170 million-asset bank $600,000, and that would have meant making $6 million less of loans in "what would have been an $8 million year," Menzies said. "Multiply that by 8,000 community banks, and you can see the significant impact that would have had." (The FDIC said this week that it will reduce the special assessment from the originally proposed 20 basis points.)
His fellow bankers and advocates say Menzies' keen analytical mind will serve the ICBA well.
"He is a thinker, and he always challenges the group thinking to consider other sides," said Cynthia Blankenship, the ICBA's current chairman and the vice chairman of Greater Southwest Bancshares Inc. in Grapevine, Tex.
Kathleen Murphy, the president and CEO of the Maryland Bankers Association, recalled a 2006 meeting with the FDIC in which Menzies asked about the reporting of suspicious activity for Bank Secrecy Act compliance, particularly the need to report activity by longtime customers who bankers know are not actually breaking the law.
"We meet with our regulators often, but when they are in the room talking, bankers can get nervous about raising an issue that may come back to hurt them," Murphy said. "Mike is not afraid to bring up the tough issue."
Menzies is the first ICBA chairman from Maryland. The last one from the Washington area was A. Pierce Stone, the chairman, president and CEO of Virginia Community Bank, who led the trade group in 2002.
Since the 1980s, Menzies has testified before Congress about 10 times. He is expected to testify next week before the House Financial Services Committee about the mixed signals bankers are receiving from lawmakers and the public (who want lending to increase) and from regulators (who want institutions to restrict credit).
Camden Fine, the ICBA's president and CEO, said he met Menzies 20 years ago when they were both serving on the group's committee for congressional affairs. "My first impression was 'Wow, this guy is crazy smart.' "
Menzies began his career in 1970 as an auditor for Maryland National Bank in Baltimore. After two years, "I realized that commercial banking was my love," he said. "I loved creating financial solutions for small businesses."
He moved to the other side of the table six years later, when he and an uncle started a car dealership in Easton.
"It was there that I finally learned the challenges of being a small-business owner," Menzies said. "Everything you have is on the line."
In 1982 he joined the $40 million-asset Talbot Bank in Easton. On his first day, Menzies said, he asked the secretary for some office supplies; she pointed him to the nearby store and advised him to charge his purchase to Talbot Bank.
"I thought I had such authority and stature that morning … but I learned right away that at a community bank, you take ownership in the things you do," he said. That meant everything from sharpening your own pencils to shoveling the bank's sidewalk to sitting on the loan committee. "It is very different from sitting in your ivory tower with a secretary. You have to get grease on your fingers."
In 1989, Menzies was invited to move across the state to become the president and CEO of First Bank of Frederick, a $6 million-asset start-up. "About six months in, things really hit the fan" with the savings and loan crisis, Menzies said. "All the major regional banks were stressed to the max, pulling their lines, trying to live through a real estate collapse. Redwoods were failing all around us, and here we were trying to start."
He watched as his former employer, Maryland National, failed. But First Bank flourished. By 1998, its assets had risen to $160 million. Another Frederick institution, FCNB Corp., purchased First Bank that year, and Menzies found himself back in Easton at the bank he now leads.
Menzies said his eyesight dashed a childhood dream of becoming a Navy pilot. But he sees well enough to fly as a hobby, as he has done for 40 years, and owns a Cessna propeller plane.
Jack Goldstein, now the CEO of NBRS Financial Bank in Rising Sun, Md., was a protege of Menzies' at First Bank. He said Menzies taught him the role that bankers can play in their communities. That meant serving on hospital boards, chambers of commerce and rotary clubs — along with allowing branches to be used for car washes and bake sales. "He instills that community commitment in those around him," Goldstein said.
Menzies said he had to cut an interview with American Banker short so he could wish happy birthday to an 80-year-old customer who has been bedridden for several years. "She is a friend and customer of the past decade," he said. "In small towns, you live through the success, and tragedy is owned by everybody."