Q: What should be the focus of community banks?
A: This is an easy question. The focus of a community bank should be serving its community, making loans to people and businesses in its community and, especially during this period, helping to ensure that its customers survive.  

Q: What are the best opportunities for growth in community banks?  Biggest hurdle?
A: I am not worried about growth. My focus for my bank is safety, soundness and taking good care of my customers. The biggest hurdle is applicants qualifying for loans. We are doing a lot of cash flow lending; cash flow is really important right now. In this economy, it can be very difficult to have customers qualify.

Q: As a whole, what do you think community banks are doing right?  
A: Community banks do a great job of taking care of their local community, being involved in the community and being responsive to its needs.  

Q: Where do you see the community banking industry in ten years?
A: I fear that the increased regulation and other forces may make community banks a rarity in ten years. These added regulations are making it expensive to do business.  

Q: What is the thing you look forward to every morning when you wake up?  
A: I love my job. I love the people. I love helping out people with loans, getting good deals done and seeing our customers succeed.  

Q: How has the economic downturn affected your lending?
A: We are refocusing our loan and diversifying our portfolio. We used to almost behave as an old style savings and loan. We are now moving to smaller commercial loans, doing some automobile loans and will do construction loans for our customers that are building their own homes. We are staying away from shopping centers and gas stations. Also, we are not really doing A&D loans. I am not sure where the diversification will take us ultimately, but this is a good exercise for us.

About Kilby and the Bank of Fincastle
John F. Kilby has served as the President of the Bank of Fincastle since 1987. The Bank of Fincastle was chartered in 1875 in Fincastle, Virginia. Today, it operates five branches in Botetourt and Bedford counties in Virginia and has approximately $ 177 million under assets.