The Independent Community Bankers of America (ICBA) is the nation’s voice for more than 5,800 community banks of all sizes and charter types, located from the sandy beaches of California and the copper-colored mountains of the Midwest, to the lighthouses of Maine and the palm trees of Florida.
With 52,000 locations nationwide, employing 760,000 Americans and holding $4.7 trillion in assets, ICBA and its member banks are an economic and altruistic force to be reckoned with.
And a Pennsylvanian shall lead them.
Timothy K. Zimmerman, a western Pennsylvania banker and accountant who lives with his wife Linda in Franklin Park, PA, will ascend to the Chairmanship of ICBA in March of next year.
In addition to leading ICBA in many capacities over the years–including several terms of service on the Consumer Financial Protection Bureau’s Community Bank Advisory Council–Zimmerman has been a positive, prescient change agent as a member and director of PACB for more than two decades.
While serving at ICBA on the executive committee and board of directors, Zimmerman functioned as chairman of the Federal Delegate Board, the executive committee advisor to ICBA Securities, and a member of the subcommittee on Consumer Financial Services.
Despite Zimmerman’s storied history of service, the achievements he has amassed under his belt, and the accomplishments still waiting in the wings, he remains imbued with a singular modesty and a self-effacing spirit.
“This is really not about me,” he said with sincerity. “I realize and appreciate that nothing could be done without my committees and my dedicated staff.”
That humble, honest and inclusive nature is signature Zimmerman style.
Zimmerman is the CEO of Standard Bank in Monroeville, outside Pittsburgh, who has been a model community banker for more than 35 years. Capping off a banner year for him and his bank, Standard has just completed a merger with Allegheny Valley Bank, to maximize the reach, profitability and strength of both entities.
It has been a heady but steady ascent for a humble banker who found his way into banking through public accounting. Zimmerman graduated from Indiana University of Pennsylvania in the pre-Internet, Reagan-era 80s and did graduate work at the University of Pittsburgh.
As a certified public accountant, he is also a member of the AICPA and PICPA.
He first worked for KPMG Peat Marwick thirty years ago, in their large financial services branch in Pittsburgh. There he saw the internal finances of a range of companies, from mining, energy and tech companies, to financial services companies.
“I handled a lot of community banks, too.” Zimmerman recalled.
That first touch opened the door to a lifelong passion.
As part of an audit training group at KPMG, he lamented the fact that he was on the road all the time. He and Linda soon welcomed a baby girl, but his daughter was asleep in the crib when he left the house in the morning, and was slumbering in the crib when he got home at night, he recalled.
He was in Minneapolis when he was offered a job at his first community bank.
He was hooked.
From those early years. the industry has changed drastically.
For one, Zimmerman views the industry as much more competitive now than it ever was.
Moreover, “the way you compete is different,” with the explosion of technology, advertising, and social media.
And of course, “the regulatory landscape has changed dramatically,” Zimmerman added.
“The community banks I audited were completely different. There wasn’t such a prescriptive process.”
Before, “the traditional community banks managed the process, handled the capital, and knew what loans to make and not to make. They used a lot of local knowledge,” he recalled. “And they were committed to helping the communities they were in.”
“In accounting, you see companies from the inside out and you get a flavor for what they do and how they do it.”
He came to know and love the flavor of those first community banks. “People cared about what they were doing and were careful about what they were doing.”
Banks had the ability to help customers do things differently.
“People don’t fall into little boxes,” and community banks were there to help “people who didn’t fit the mold.”
Today, he sees how prescriptive the industry has become. “You can’t do this, you can’t do that, all in the name of protecting the industry and what they claim will avoid a financial meltdown.”
But he is quick to point out, “community banks didn’t cause the crisis.” That lack of culpability notwithstanding, “Our ability to help a number of consumers, especially low- and moderate-income consumers, is reduced because the rules make it so difficult to go outside the lines.”
Today, community banks’ model is upended, “almost running the bank for the regulators, not for the customers, and that’s not the way it should be.”
When the next great idea comes along for some new innovation, he must go to his compliance department and sheepishly ask, “Can we actually do this?”
“In most cases, the answer is no,” he said.
In days gone by, “We knew the families of our customers, we knew their history and we knew they would pay us, but we can’t consider that anymore. That’s the sad thing about all this regulation out there.”
Zimmerman is committed to more than mourning the dark forces that have hobbled the industry; he is committed to lifting that burden and changing that dynamic.
ICBA and PACB can loosen that regulatory chokehold through advocacy, he strongly believes.
“We can relieve the regulatory burden,” he insists.
Zimmerman directs caring bankers to the ICBA website—www.icba.org—to see their list of legislative priorities.
“But ‘Job One’ right now is the regulatory overreach that’s out there,” he said.
He urges his fellow bankers to “Look at the shrinkage. Look at how many banks went away and the rate of mergers, and we see the direct impact of regulation on community banks’ ability to survive.”
He is working to educate the U.S. Congress and moving them toward recognizing the distinct and irreplaceable mission of community banks, compared to the big banks.
“Community banks are relationship-based,” he said. “Big banks are transaction-oriented, but the regulation is essentially the same. The regulations were written for the big banks.”
It was the big banks who were caught “doing egregious things,” like making loans with no documentation; and having non-existent underwriting.
His goal is to allow community banks to “focus on the customer and the communities they serve instead of the regulations out there.”
A Stronger and More Perfect Union
The Standard Bank-Allegheny Valley Bancorp merger is part and parcel of the innovation he seeks.
The combined bank has $1 billion in assets and 18 branches in Pennsylvania and Maryland. The $56.5 million stock transaction was approved by shareholders on March 28.
Both banks, each more than a century old, were doing well on their own.
“We were under no pressure, but given the environment we are working in, we needed more size and scale than we had,” Zimmerman explained.
“Western PA is not a big growth market.”
The merger will enable the component banks to better handle regulatory costs.
“We couldn’t do it with organic growth. By combining forces, we could get to $1 billion in assets and we can better deal with regulatory aspects and provide a strong community bank to go forward in southwestern Pennsylvania,” he said.
“With this size, we can still stay focused on our mission, being a community bank, and serving our customer. Combined, we are a better bank than we were on our own.”
The bank connects many of Pennsylvania’s iconic worlds, Zimmerman noted. Allegheny Valley Bank served more of the Pittsburgh and Lawrenceville areas, in more densely populated urban areas. Standard was located more in the manicured suburbs and verdant farmland and open fields of the rural Commonwealth. They even served parts of Maryland.
United, the two “expanded their market, centered in Southwest PA, with Pittsburgh as the anchor,” Zimmerman said.
Zimmerman is now the Chief Executive Officer of the upsized Standard Bank, and former PACB Chairman Andy Hasley serves as president.
April 7 was the legal closing of the merger, so they are technically one bank already.
The final step is an “operational conversion,” Zimmerman explained. “Every customer will soon be on one platform.”
“Now we are running parallel systems, but in mid-August, we will convert the Allegheny platform to the Standard platform, and all files will be on one system.”
The goal is to make the two-step progression a “smooth, hassle-free process.”
The new 17 branches will wear the Standard name, since the Allegheny name is geographically limited.
Service with a Smile
Post-merger, what will never change is the community service.
“Both banks have really strong records of community service,” Zimmerman said. “We are embedded in the communities we serve, like all community banks.”
He noted the Glass Festival in Mt. Pleasant, where so many employees serve on the board and committees.
On a personal level, Zimmerman serves as board member and vice president of the Pittsburgh Civic Light Opera, Chairman of the Audit and Budget and Finance Committees and a member of the Cabaret and the New Works Funding Committees. He also serves as his company’s coordinator for the Make-A-Wish Foundation annual campaign.
“At the grocery store, the soccer game, we see the same people. It’s why we are a community bank. We are engaged in the community. We support the communities financially, and we donate our time. It’s a day-in and day-out thing.”
Exceeding the standard at Standard Bank is the essence of the corporate culture.
The Secret Sauce
Zimmerman would never claim to have all the answers to a community bank’s quest for success, but he has garnered valuable lessons over the past three decades.
To be successful, he says to banks: “Know who you are and never lose sight of the reason we are here, which is to serve our customers. You must operate in an honest, straightforward, trustworthy way or you won’t make it.”
“We are the alternative to the Wells Fargos, and Bank of Americas of the world. We know our communities, their leaders and what they are trying to do. We help people every day. We are their biggest resource.”
He encouraged bankers to be trusted advisers when a young couple wants to make the often-scary decision to buy a home.
“It is one of the biggest decisions of their lives and they are relying on us to guide them to their goal.”
He also gives advice that it is timely and fitting as commencement addresses echo across campuses around the nation. “Know who you are and where you are going.”
“I’m proud to be a community banker because I think community banking is an honest, dedicated job where you can actually see the benefits of what you are doing. You can actually see good things happening and the changes being made in people’s lives.”
You can witness a person buying his first house, or truck, or getting financial advice for retirement or their kids’ college fund.
“We can help small businesses transition from generation to generation.”
“I like being able to see the results of what we do. I love to see the good things we can do. We are not selling people things they don’t need. We see what they need, and then guide them to it.”
He reflected upon the recent Wells Fargo scandal, where bank employees were pressured to open accounts for their customers—or even to open accounts without their customers’ consent or knowledge.
“We could never do that. If we cheated one person in Mt. Pleasant in the morning, the whole town would know about it by the afternoon. We just don’t do that.”
“We trade on our reputation and on our relationships with people.”
“We don’t force people to take things they don’t need. That’s the quickest way to undo 100 years of good service in these communities.”
On a more personal basis, Zimmerman is touched by the respect he has earned but never demanded.
“When I work with people, my philosophy is, I intend to earn their respect. I believe in the golden rule.”
He works hard to make his employees believe in the mission too. If they believe, their power to transform and touch lives multiplies.
“I don’t want it to be just a job. I want to earn respect.”
Sometimes their commitment to the customer means telling them no, he admits. The timing may not be right now, but he tells them to come back when it is, and people have respected that candor.
His honesty knows no bounds.
What is his fondest memory of helping others?
There are so many, he replies. He reflects aloud upon the many young families he helped as they had babies and began new lives.
“That’s why I am in community banking.”
“There’s a story with every loan we make and that’s what makes it so gratifying.”
“We are making a difference in people’s lives. The decisions they are making are big decisions for them. We make a giant impact on people’s lives.”
It is their voices he will remember and represent as he becomes the nation’s voice for community banks across this vast land of opportunity.