Matt Williams never planned to become a banker.

He was a senior in law school in 1973 when his father, who ran Gothenburg State Bank in Nebraska, died. Williams put his career on hold to take over the family owned bank.

Nearly 40 years later, he remains the chairman and president of the $125 million-asset bank. In mid-October, he will become the chairman of the American Bankers Association, joining a long list of Midwestern bankers to lead major banking groups. (Jeff Gerhart, a fellow Nebraskan and the chairman and CEO of Bank of Newman Grove, is chairman of the Independent Community Bankers of America.)

In a wide-ranging interview last month, Williams discussed his priorities for the ABA, the tough act of balancing the needs of large and small banks, and why Midwesterners make good leaders.

The following is an edited version of his remarks.

How did you get into the advocacy side of banking?
Ten or 12 years ago I became very involved with the Nebraska Bankers Association. Through that involvement I saw what the ABA was doing on a national level. The reason I chose the ABA route is because the [group] represents banks of all sizes. I think unity is extremely important. We have the ability to sit at our board table and hear the views of banks of all sizes, all charters, all business models, and all geographies.

The ABA is excellent at representing the general, overall view of all banks. Advocacy is one of the most important things that an association can do for banks. We are an industry that is greatly affected by rules, regulation and legislation. It is just a natural thing for me to be involved with that.

What are your biggest priorities as the ABA chairman?
Our industry has always been one that has faced change as far as challenges with regulation. That's been the situation for years, but it has certainly been accelerated right now. Specifically, we have the Basel III proposals that are out for comment right now. For those banks, including our bank, that have spent time looking at the effect of the proposed rules of Basel III, it has major effects on most of us.

The implementation of Dodd-Frank as we move forward continues to have consequences to banks of all sizes. We continue to recognize that banker unity can be very helpful in addressing these issues in Washington.

How do you balance rules that divide banks based on size, geography or capital strength?
That's the beauty of the situation that I've been in, where I have been working over the years with the grassroots involvement of the ABA. With the government relations committee that I've served on for years, I've had the opportunity to sit at the table with banks of all sizes. So we have a unique ability to understand how different proposals affect banks and then form an advocacy strategy that complements everyone as best as we can.

Other than regulation, what are the biggest challenges for banks?
We oftentimes get caught up in talking about how much things have changed. I'm always reminded that the more things change the more they stay the same. What I mean is that the most critical aspect of all of these changes is people and leadership. That part does not change.

One of the challenges for our industry in a time of stress is continuing to recruit and retain new talent into our industry. One of the things that happens when you go through periods of economic strife … is just a feeling of helplessness or a lack of excitement about the industry. I'm terribly excited about the future that banking has. We've come through many challenges before … and we have survived because we have had a purpose and a committed leadership. The challenge is to continue to energize people and help them realize that banking can be a solution in our country.

We're not the problem, and yet, clearly, bankers are still trying to reclaim that reputation. We're working hard on that. …

I'm the banker that is 1,362 miles from Wall Street, but it isn't that distance that makes me a community banker. It is the community that I live in. The number that I always throw out is 3,080. That's the number of volunteer hours that my bank's 28 employees committed last year to efforts in our community and the surrounding area. You name it and we've been there. That's what bankers are doing all around our country. So telling that story helps us repair the image that has been damaged.

What do you bring to the table as a Midwestern banker?
There's a conservative nature that some of us have. I'm a banking product of the ag crisis of the 1980s. We were having significant inflation and we were scooping money out the front door about as fast as you could. Then the agricultural economy turned around. We had record high interest rates … coupled with farmland values falling. I can remember day after day wondering if we were going to survive as a bank.

I believe the biggest job bankers have is managing risk. My story is similar to many other bankers coming out of the Midwest. So there is a sense of understanding some of the economic challenges that we have had. Our current [ABA] chairman, Kel Kelly, is from Oklahoma, so he saw that in his state. Following me is Jeff Plagge from Iowa. He grew up on a farm much like I did and he understands that.

How can a small bank make money in this market?
Some people have chosen to adapt or change their business model. The problem with doing that is that it often takes a particular bank out of their comfort zone or their spectrum of knowledge. It has them doing things that are outside their expertise and abilities.

In our bank, we've worked extremely hard to be smarter about how we handle our investment portfolio, how we managed interest rate risk and how we couple that with our pricing and our asset-liability management. We've had to just plain sharpen our pencil more than we ever had before.

We have recognized that having really good people on board helps solve a lot of problems. So we have made it a habit to be the employer of choice in our area. We have a great benefit package, we pay well and create and exciting and attractive work environment. I still go back to believing wholeheartedly that if you have the right people you will be able to take the challenges that we're faced with and turn them into opportunities. I am optimistic about the future, even recognizing that we clearly have challenges that we will have to deal with.

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