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Bill Loving: An Optimistic Realist

By: Bill Poquette

As he tells it, a lot of people will say William A. “Bill” Loving Jr. is an optimistic person. “But I’m a realist as well,” says the West Virginia banker who will be the 2013–2014 chairman of the Independent Community Bankers of America. “While I’m optimistic, there will be challenges,” he adds, viewing the road ahead for his fellow ICBA members.

Similarly, he looks forward to his year as ICBA chairman, meeting with members across the country, engaging with regulators and Congress, finding “some small way to make a difference” in an industry that has been good to him and his family.

The harder part, suggests Loving, who is president and CEO of Pendleton Community Bank in Franklin, W.Va., may be “staying on top of both the bank and the ICBA.” However, that is not really a challenge, he figures. “I’ve got a great management team, a team that has been able to work very well with me through technology,” he says. “And I’ve got a very supportive board.”

The ICBA management team and staff are “incredible,” he adds. “They keep me informed and make sure I know what I need to know. At the end of the day, they do the heavy lifting.” In any event, he plans to give both the bank and the association 100 percent.

Loving’s path to the ICBA chairmanship is typical, the first step having been participation in the Community Bankers of West Virginia — for the same reason, he says, that he is involved at the top of the ICBA: to make a difference. He worked through the chairs at the state level, which led to serving at the national level on several committees.

“I was asked to testify on several occasions,” he recalls. “Then one day, I was asked if I would be interested in putting my name in for a seat on the ICBA executive committee. That certainly was a surprise and an honor to be asked.” A couple of years later, he was nominated and elected as vice chairman. Now, as he puts it, he is “certainly looking forward to the honor and the privilege of being the chairman this upcoming year.”

In mid-February, a policy development meeting was planned to determine the association’s priority issues to be discussed and ratified at the annual ICBA convention in Las Vegas this month. “I imagine we’ll pursue many of the priorities we had in 2012,” he says. Among these are the Communities First Act and Basel III — which was not even on the radar a year ago — along with other issues that impact the community bank franchise.

When asked about another key issue, the recently announced definition of a “qualified mortgage,” Loving responds positively. “I think community banks can live with it,” he says. “Two important points came out of it: the ‘safe harbor’ and the provision for balloon mortgages. Those were significant issues for the community banking industry.”

Will the new Congress be more banker-friendly? Loving is not sure it can be categorized that way. “With each administration and Congress, there are different issues and priorities and focus,” he explains. “I am encouraged that we are starting to see some traction in Congress toward community banks.” For example, when he testified recently on the impact of the Basel III proposal on community banks, “The questions that were directed to the regulators were encouraging and reflective that many in Washington, D.C., understand the issue.”

Another big factor in Loving’s optimism is his view of the world surrounding his bank. Franklin, with a population of less than 800, lies in an Eastern West Virginia valley between the Allegheny and the Shenandoah Mountains, a long way from any major metropolitan area or interstate highway. It is the county seat of Pendleton County, which is home to about 8,000 people.

Besides serving as the county seat, Franklin, founded in 1794, is known for its beauty and outdoor activities, according to Loving. “We have a lot of hunting and fishing and there is some rock climbing in the area,” he says. “The county is separated by one of the many mountains in West Virginia; on the West side we have Pinnacle Rock, where some of the climbing takes place, as well as Spruce Knob, the highest point in the state at 4,863 feet.

“Yet, we serve a much larger marketplace,” says Loving, “with a total of four locations in West Virginia and one in Harrisonburg, Va.” With a population nearing 50,000, Harrisonburg lies about 50 minutes away, according to Loving. Alluding to the state’s mountainous terrain, “I tell people in West Virginia we ought to describe distance in time rather than miles,” he laughs.

 “We’re not seeing significant growth,” he says, “but based on the census we are seeing some growth in some of our markets. Other markets are flat or in a slight decline, but we have seen good growth in the past year and so I’m very optimistic about the future.” He points out that West Virginia has fared reasonably well through the recession, a principal reason being the state “never sees the highs and never sees the lows.”

The bank’s markets are somewhat diversified yet much alike, Loving explains. “We have one market that is slanted more toward logging and tourism, and then our three other markets in West Virginia are more agriculture-related. Harrisonburg is pretty diversified yet has an agriculture component to it, mainly poultry.”

In its West Virginia markets, Pendleton Community Bank’s principal competition is other community banks. But Harrisonburg is heavily banked. “It ranges from community banks to credit unions to too big to fail,” Loving notes.

He says he has been asked by bankers around the state and as he has traveled around the country if he has expansion plans. “I always answer by saying we are always looking for opportunities that would avail profitable growth. Our capital position is such that we can grow and we have tried to establish an infrastructure from a technology perspective as well as a people perspective that would allow us to grow.”

Pendleton Community Bank, with assets of $265 million, is fully vested in technology, offering full online and mobile services, to which customer response has been good. “We’re seeing it continue to grow with the development of high-speed Internet in our markets,” Loving says. That has been a challenge in many areas, he explains, but with the spread of high-speed Internet, the bank’s adoption rate has increased as well.

Loving cites a recent serious power outage as verification of customer acceptance: “We didn’t hear any complaints that we had to lock the doors or our ATMs were down; it was only complaints that our online banking was down. I think it has been adopted and accepted rather well,” he laughs.

Technology is one of the opportunities Loving sees for community banks. He thinks they will need to continue to grow in electronic banking and other electronic products to compete in the marketplace. He sees that opening up a new realm of customer acquisition among people who may not live in the area but may have ties to it.

The people perspective — management and staff — is sometimes a challenge for a bank in a rural location, but not for Pendleton Community Bank. Recruiting directors has not been a problem; three new ones have come aboard in the past four years. “We have good representation throughout the marketplace,” Loving says.

As for attracting qualified staff, the bank’s location serves it well. “There are those who want to come back after college or want to stay when they leave high school,” Loving explains. “We have found the best of the best of that group and we are growing our leaders from within. The community knows them and they want to be here, so we have been able to find qualified individuals that have helped build our organization.”

Loving’s characteristic optimism — and realism — come through loud and clear when he weighs the future of community banks. “We have to always look at our industry, the challenges we face, the regulatory burden, the net interest margin and work through those issues,” he says. “But I am optimistic and excited about community banking’s future.”

A key reason he cites for this optimism is community banks are being seen as unique. “Our customers know who we are and I think they understand the part we play in our communities,” says Loving. “There are many communities that if it wasn’t for the community bank, there probably wouldn’t be a banking alternative.”

Bill Poquette is editor-in-chief of BankNews.

Copyright (c) March 2013 by BankNews Media