Observers of the banking scene usually forget to evaluate one of the greatest strengths of the independent bank and its management: They have fun.

Superregionals talk about their "corporate cultures" and in doing so, some stress that they offer a solid environment for employees. But when the chips are down, it is the community bankers who far more often exude enthusiasm for their work.

At the recent senders of banking conference on asset/liability management, for example, I met a banker in his 40s who had spent almost two decades with a major holding company and now had just been picked by the directors of an independent bank in Minnesota to come on board as chief executive officer.

"It's as if I had died and gone to heaven" is the way he described his new job and responsibilities to me.

This banker had served as president of one of the holding company's major banks before leaving. Yet he reported that when orders came from headquarters, there was no recourse.

"We were told to give up a certain type of loan, no exceptions.

"We were told to eliminate 30% of our staff, whether our bank was overstaffed up to then or not.

"We knew who was the boss, despite the title 'president.'"

And I couldn't help but think of the holding companies that have eliminated most of their individual banks by merging them into a branch network - changing the titles of the presidents to regional manager, or even marketing manager, and what that did to morale.

"My new bank is mine. I represent it in the community. I am the person who decided to interview every single employee to see how we could make the bank more efficient and effective. And we can respond to a request in a couple of weeks at least," my Minnesota friend continued.

Under the old adage "When a fish starts smelling, it starts from the head," you can feel that his vibrant happiness must extend to the entire staff and through them to the community the bank serves.

As I met this banker I couldn't help but think that it is this kind of enthusiasm and the ingenuity of those who love what they do that has kept community banking alive through the nation's history.

How is it that we still have about 10,000 banks, while England, Canada, and other nations operate with merely a handful?

I would say it was the flexibility of independent bankers who loved what they were doing and fought to keep operating despite pressure to eliminate them.

*The Second Bank of the United States tried to keep banks from creating more money than it felt the nation should have by finding the banks that had issued too many bank notes and exchanging their notes for gold.

So community banks got President Andrew Jackson to veto the charter renewal for this hated Philadelphia organization.

After that, community banks thrived - both in major communities and "out where the wildcats live" - where it would be difficult or impossible for those holding the notes they had issued to come find them and redeem the notes for gold (incidentally this newspaper started as Thompson's Bank Note Reporter - with the goal of reporting what the notes of the various banks were really worth).

*During the Civil War, Congress tried to limit the inflationary creation of too many bank notes by requiring that banks back them with government securities. The result was that banks switched to using deposits to fund loans. Deposits didn't need to be backed up by government securities.

*In the Great Depression, there was considerable interest in curbing the number of smaller banks because so many of them went under and cost depositors so much loss.

The clamor for deposit insurance from the public was something many regulators and lawmakers abhorred, as they felt it would lessen the urgency for banks to practice sound policies.

The pressure of the smaller banks and their customers for insurance won out. And, paradoxically, this was a major reason the Glass-Steagall Act was passed, separating banks from investment affiliates. For it was felt that if they were not separated, then the government, through the Federal Deposit Insurance Corp., would be supporting and subsidizing the operations of Wall Street securities operations.

So community banks have survived and thrived, albeit in quite a different form than originally intended.

And it seemed it is the fight to maintain a way of life as much as for the profits that so motivates the community banker and ensures that he or she will adapt to whatever new hurdles are placed in the way in the future.

Community service, rapid turnaround on loan requests, intimate knowledge of customers, and quick, competent resolution of all complaints remain the strengths of the community bank.

But in an industry where so many who serve community institutions look at their jobs and feel that "they have died and gone to heaven," it is hard to see how any outside forces - either legislative or competitive - can make these independent institutions fade from the scene. Mr. Nadler is a contributing editor of the American Banker and professor of finance at Rutgers University Graduate School of Management.

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