Tag Archive for 'Mike Menzies'

I Loved Mike Menzies

Mike Menzies was an original, founding member of Jim’s Brain Trust, going back more than 16 years to 1998. This is Jim’s tribute to his good friend.

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There’s a disturbance in the Force.  Mike Menzies is dead.

There’s an empty locker at Team Menzies. Their champion, devoted husband of Midge, proud father of Mike Jr. and Cal, has left the stadium for the last time.

There’s a boat on his beloved Eastern Shore, motor still, lines secure. Captain Mike won’t be takin’ ‘er out anymore.

There’s a quiet office at Easton Bank and Trust. Those honored to have been led by Mike for so long will now be sustained by memories of how he conducted himself with grace and professionalism.

There’s a hole on Main Street in Easton, Maryland. Without Banker Mike, to whom will small business owners now turn?

There’s an enormous void in the marketplace of ideas just now. When Mike spoke, people listened. At a time when we can ill afford it, one of the most compelling, knowledgeable and fiercest voices for free markets has been silenced.

There’s a new fault in the banking landscape today. As the industry trends toward giant banks, independent community banks have lost a giant.

Emotions are raw, the sadness overwhelming. Women are lucky—they weep. Men well up, but tears are scarce because we begin with anger. Then tightened jaws become unspoken feelings stipulated with a nod to each other. And finally Mike stories shared out loud with laughter. Mike would be angry if we didn’t laugh.

And stories and laughter there must be in the world Mike Menzies has left behind. How else can we honor the way he blessed our lives in his much too short life? What better way to celebrate Mike’s abundant life?

As singer-songwriter Warren Zevon was losing his own battle with cancer, he was asked what he had learned about life. Zevon said, “Enjoy every sandwich.” Mike Menzies enjoyed every sandwich. And if you ever had the fortune to be in his company, he made sure you did too.

There’s a disturbance in the Force today: Mike is dead and our lives will never be the same.

Mike Menzies made a difference. He was an enormously important and benevolent force who made the world a better place.

And I loved him for that.

The Small Bank–Small Business Cascade

America is exceptional for many reasons, not the least of which is the way our pioneer DNA morphed into entrepreneurship. But all DNA has to be nourished, and the food of entrepreneurship is capital.

As America’s pioneers claimed Manifest Destiny they simultaneously created businesses and markets, which were funded at first by sweat, blood and personal capital of the pioneer/entrepreneurs themselves. As businesses and markets grew, additional capital was needed, which was provided by another American invention: locally owned banks. Today we call them independent community banks (ICB).

There are a number of reasons America became the world economic leader. But no factor was more important than the financial, legal, regulatory and trust environment that fostered relationships between ICBs and small businesses. These two Main Street sectors formed a symbiosis that simply does not exist anywhere else on planet Earth. Indeed, without this symbiotic relationship, the twin pillars of the American Dream – home and business ownership – would not have been possible, nor would the financial foundation of American exceptionalism.

Alas, this unique relationship may be in peril. But not because of anything the two primary partners have done.

The financial crisis of 2008 shined a bright light on the behavior of large financial institutions, which had become too complex to regulate, too big to manage and, according to the government, too big to fail. But as the federal government and regulators attacked this crisis, ICBs are becoming collateral damage as the new regulatory regime does not differentiate enough between big banks and small ones.

It’s troubling enough to learn that existing ICBs are finding it difficult to manage under the new regulatory pressures, but that’s not the worst of it. Prior to 2008, when an ICB closed or was acquired by a larger bank, the marketplace would produce a new ICB to fill the newly vacated relationship-banking niche. But the following stats foretell an alarming trend.

According to the Independent Community Bankers of America (ICBA), there are 1,119 fewer ICBs today than in 2007. Only 96 new ICBs were chartered from 2008 to 2010, and since 2011, there have been no new ICB charters. Not one in 18 months! And if industry experts are correct, the net number of ICBs will continue to drop, ultimately to a dangerous level.

There are many causes of this alarming trend, but presently the biggest offender are the one-size-fits-all “solutions” being imposed by overreacting politicians, overreaching regulations and overzealous regulators.

In nature, when one member of a symbiotic relationship is diminished, the other is usually harmed too. Fewer independent community banks will result in a weakened small business sector. I call this trend The Small Bank–Small Business Cascade, and it must be stopped.

Small businesses are not only the backbone of the U.S. economy, they’re also the seedlings of future big businesses and the personification of the American Dream.

America, beware The Small Bank–Small Business Cascade.

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I’ve talked with Mike Menzies, President of Easton Bank & Trust in Easton, Maryland about the dwindling number of independent community banks in the U.S. and the impact on small businesses. Click on one of the links below to download or listen.

The symbiosis of small banks and small businesses

Why fewer community banks is not good for small business

Check out more great SBA content HERE!

Speak “banker” as a second language

Once a storm caused two ships to sink in the same area and all on board were lost at sea, save one from each ship, who survived only because they swam to a nearby island.

Fortunately, the two men hauled themselves up on the beach within sight of each other. But the survivors’ celebration soon faded as they realized that each spoke a language unknown to the other.

Immediately they had the same thought, “I don’t speak his language, but if we’re going to survive, we have to find a way to communicate.”

In many ways, this tale actually plays out every day. But instead of on the high seas, our story takes place in the marketplace. And instead of shipwreck survivors, our real life players are small business owners and bankers.

Like the castaways in the first story, the latter two often realize that:

  1. They need each other to be successful
  2. They don’t speak each other’s language very well, if at all.

With so much common interest and so little mutual understanding, can these two create a successful survival story? Absolutely, but only if they have Blasingame’s Official Translator for Banks & Small Business. Here are a few key examples of how the Blasingame Translator works.

For small businesses to understand banker they must:

  1. Identify their banker as a success partner and their business’ best friend.
  2. Stay close to their banker when things are going well and even closer when things aren’t.
  3. Believe that an uninformed banker is a scared banker and a scared banker won’t help you.
  4. Pay attention to what motivates and impresses a banker, like attention to detail.
  5. Understand pertinent bank rules and regulations, so as not to ask for something that can’t be done.
  6. Reward banker loyalty with your loyalty.

For bankers to speak small business, they must:

  1. Understand that it’s redundant to say “undercapitalized small business.”
  2. Recognize that starting a small business is easy - operating a successful one is not.
  3. Explain banking rules and regulations more often.
  4. Realize that it’s the banker’s job to recommend services and products.
  5. In the credit scoring process, always find a way to give small business owners credit for character and past performance.
  6. Reward small business loyalty with banker loyalty.

For small business, and bankers to avoid being castaways, speak each other’s language and become partners.

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On my radio program, The Small Business Advocate Show, I recently talked with Mike Menzies, President of Easton Bank & Trust in Easton, Maryland, about the key elements of a successful relationship between a small business and its bank. Take a few minutes to click here to listen or download our conversation.

Check out more great SBA content HERE!

Watch Jim’s videos HERE!

Take this week’s poll HERE!

Small Business Bank Relations are Improving

One of the markers of big businesses, especially publicly traded ones, is they have many capital sources.

For small businesses there are basically only three:

  1. Equity capital from the founder(s) and investor(s).
  2. Retained earnings - profits left in the business.
  3. Borrowed funds, typically from a financial institution.

The lion’s share of all small business capital comes from # 3, bank loans. Consequently, since small businesses generate over half of GDP, it’s easy to see that the health of the banking industry, and its receptiveness to small business, is vitally important to the U.S. economy.

Periodically, we poll our audiences about their banking relationships, which we did again recently. We asked, “Which example best describes your recent experience with a business loan from a bank?” and here’s what we learned.

Almost four of ten of respondents to our unscientific poll said, “We have gotten a business loan from a bank in the past year.” About one fourth of our sample said, “We can get a loan from our bank if we need one, but we don’t want one.” Here’s the good news for the economy in these responses:

  1. The greatest number of our respondents wanted, qualified for, and got a bank loan;
  2. At this point in the recovery, most bank loans by small businesses are more likely to fund opportunities rather than to save the business;
  3. Added together, approximately two-thirds of our small business respondents are confident they have the ability to borrow capital when, and if, they need it.

Sadly, about one-third of our audience is still struggling with their capital requirements. Ten percent said, “We need a loan, but can’t find a bank that will loan to a small business,” and 27% reported, “We need a loan but haven’t tried because we don’t think we can get one.” In a healthy economic expansion, these two groups should total no more than 10% to 15%.

There are a number of economic and political issues making up the loose gravel that the U.S. economy is currently standing on as it struggles to find growth footing. But an improving banking picture for small businesses is definitely a good sign of economic healing and expansion potential.

Every small business needs a good banking relationship, so keep trying until you get one. But remember, the perfect form of capital is retained earnings, because it is profits, produced from sales you make to customers, that you were disciplined enough to leave in the business.

Retained earnings will make your banker very happy.

I talked with Mike Menzies, President and CEO of Easton Bank & Trust in Easton, Maryland, recently about the key elements of a successful banking relationship.

Click here to listen or download our conversation.

Check out more great SBA content HERE!

Small business banking in 2010

What will small business banking look like in 2010? independent community banker, Mike Menzies, joined me on The Small Business Advocate Show to talk about some of the key issues facing small businesses as they attempt to build better banking relationships in 2010.  Mike agrees with my 2010 prediction that the national banks will continue to be MIA in terms of small business lending. Mike also reported on some of the new financial regulations that are being proposed by Congress and how they will likely have a negative impact on his banks ability to serve small businesses.

Mike Menzies is President and CEO of Easton Bank and Trust in Easton, Maryland and an original member of my Brain Trust. Take a few minutes to listen to this interview and tell me about your recent banking experiences. Listen Live! Download, Too!

The Blasingame Small Business Banking Rules-of-Thumb

For many years, I’ve made the following recommendations to small businesses with regard to their banking relationships, called: The Blasingame Small Business Banking Rules-of-Thumb:

1st Blasingame Small Business Banking Rule-of-Thumb
A small business should have at least two banking relationships. If you’re turned down for a loan at one bank, you have another place to go where the person already knows about you and your business. One primary reason for this rule is because if only one banker knows you and your story, when he or she gets fired, promoted or otherwise leaves the bank, Murphy’s Law will dictate that it will happen when you most need a favorable banker.

2nd Blasingame Small Business Banking Rule-of-Thumb
At least one of the banking relationships should be with an independent community bank – that means locally owned and managed – and preferably your lead bank. I’m not picking on big banks, it’s just that most small businesses need to be given a little extra consideration for their character and past performance, which is typically not as forthcoming in a large bank.

Loan decisions made by large banks have two elements that may not give a small business this extra consideration: 1) The actual decision is made by a loan committee in another city, by people who probably don’t know the business owners; 2) They rely heavily on what is called “credit scoring,” which is a computer program – each bank has its own proprietary model – that receives quantifiable information and produces a “score,” let’s say, 17. If this week the bank has decided that only scores of 18 or more are accepted, this loan request will likely be rejected. I’ve never heard of a credit scoring system that includes a variable for the applicant’s character.

Over the years, my Rules-of-Thumb have proven to be valuable to many small businesses. But since 2008, with all of the problems associated with big banks, those who have followed my advice were much less likely to find themselves without access to credit, since every independent community banker I’ve talked with in the past 15 months has emphatically said they had never stopped lending to their small business customers.

Recently, I talked with two presidents of independent community banks about working with small businesses and the health of the banking industry. First, Mike Menzies, who is not only the president of the Easton Bank and Trust in Easton Maryland, but he’s also the new Chairman of the Independent Community Bankers Association (ICBA). Mike’s also a long-time member of my Brain Trust. Secondly, there is Charles Antonucci, President of Park Avenue Bank in mid-town Manhattan.

Take a few minutes to listen to what these two veteran small business lenders have to say. And, of course, be sure to leave your thoughts.
For Mike Menzies:
For Charles Antonucci:




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