Hoosier Banker — September 2011
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Craig Dwight: Thoughtful Leader

This year the Indiana Bankers Association added a twist to tradition by bringing the Annual Convention north to Michigan City. The town, located on the southern shore of Lake Michigan, features a mix of natural beauty, casino nightlife, a thriving arts community, shopping, restaurants and other amenities.

Front and center in Michigan City's downtown is the main office of Horizon Bank, NA. Chartered in 1873, the bank has posted record earnings for the past 11 years and year-to-date 2011. In addition, Horizon was named a "top 200 community bank” by U.S. Banker magazine for the fourth year in a row.

At the helm of this success story is Craig M.Dwight, 54, president and chief executive officer of Horizon Bancorp, and chairman and CEO of Horizon Bank, NA. Dwight began his career with Horizon in 1979 as a management trainee and was named to the CEO position in 1998. Additionally he has assisted the community through board service or as campaign chairperson for major fundraisers with the United Way of La Porte County, Chamber of Commerce, Boys & Girls Club, the Aviation Commission, St. Paul School Foundation, the Martin Luther King Center, Sisters of St. Francis Health Services, Saint Anthony Memorial, Michigan City Brown Field Development Corp. and Michigan City Economic Development Commission.

Recently Hoosier Banker interviewed Dwight about his banking leadership.

How would you describe your responsibilities with Horizon Bank, NA?
"My primary responsibility is to set the tone for Horizon's vision and values. We have a set of 12 core values that help guide us in our daily decision-making. These values include: ‘We affirm the customer as our highest focus; we act responsibly and employ high ethical standards; we accomplish our goals; we embrace individual, cultural, racial and ethnic diversity; and we contribute to the betterment of our communities.'

"The values were written by our employees in 2000. We try to follow one value a month in our meetings, basing that schedule on a plan developed by Benjamin Franklin. My charge is to reinforce these values by maintaining a strong personal work ethic, through regular communication with our team and leading by example.

"In addition my responsibilities include the pursuit of growth opportunities; allocating resources based on sound financial principals; providing oversight of Horizon's compliance with all rules and regulations; developing, retaining and recruiting competent leaders; guiding Horizon to achieve its financial objectives; and representing the company to current and future customers, community leaders and investors.”

How do you establish regular communication?
"We do quite a bit to communicate. Because we have 23 offices in seven counties—five in northwest Indiana and two in southwest Michigan-we need mindful communication to connect and stay focused.

"One form of communication is through quarterly, all-company conference calls. The calls last about 15 to 20 minutes and serve as an update to what's going on in the company. Employees are encouraged to ask questions—either during the call itself or through e-mail in advance.

"Another form of communication takes place each year throughout September and October. We hold outreach meetings with different cross sections of the company. We discuss what is happening in the communities we serve, in preparation for the next year's budget, and participants are expected to come prepared to ask questions and make suggestions. This input has been invaluable and a key to our continued success.

"Horizon Bank also hosts an all-company learning conference each President's Day. During this conference we present an historical and prospective review of the company, offer an opportunity for questions and answers from all attendees and usually end with a motivational or inspiring speaker.

"We have other means of staying connected, as well. We have quarterly officer meetings, and every January we host a formal dinner dance. The dance doubles as our holiday party and a recognition event for the nominees and winners of our annual leadership and community service awards.”

How did you decide to enter the field of banking?
"I was studying accounting at Indiana University's business school, but struggling on a career path choice. An accounting professor advised me to try banking,because it would give me insight into all aspects of business.

"Horizon Bank was interviewing on campus at that time. I was fortunate to receive a job offer, which I accepted, and started work the Monday after graduation.

"I started as a management trainee. It was a two-year program and gave me a chance to serve in various capacities-branch manager, human resource director, consumer loan collector, commercial credit analyst and all areas of lending.

"At the end of the two-year period, I went into commercial lending. I was there until I was promoted to chief credit officer in 1996 and later named president in 1998.

"I did leave Horizon for about six years, when I went to work at a bank in Michigan as its senior commercial loan officer. It was valuable experience, because the bank was a well-run publicly traded company with strong corporate values, internal controls and sound lending practices.

"Its leaders knew how to manage a bank through a recession. In Michigan the economy is known to experience considerable economic swings—with recessions coming on faster and staying longer than in other states. My experience at that bank gave me a better under-standing on how to manage a company and coach customers through varying economic cycles.”

What in your background best prepared you for the role of president and CEO?
"It's not any one thing that best prepares a person for a leadership role; it's a culmination of factors, such as access to strong mentors and educators, a personal desire to succeed, the will to leave your comfort zone, and the ability to commit your dreams to action. A dream without action is merely a dream.

"My personal background starts with my parents and immediate family, who were tremendous role models. My parents were from South Dakota, where I lived before coming to Michigan City in the mid-1960s. My father and mother demonstrated a solid work ethic, personal values and fiscal responsibility.

"I also gained from participation in Boy Scouts of America and my church youth group, which added to my values, introduced me to lifelong friends and gave me early leadership experiences.

"Sports also influenced me. I played football, basketball and other sports my entire life, and the common denominator was focus. I noticed that when you play on a team that becomes distracted, say by taking your frustrations out on the umpire, typically you lose the game. But when you focus on execution and on what you can do to change the game, usually you win.

Here at Horizon Bank, the management training program gave me hands-on experience. I've also had many mentors, including current and past chairmen of the board of directors. Our current chairman of the board, Robert Dabagia, takes the time to meet with me monthly and provides valuable counsel. Without his support and wisdom, Horizon would not be the company that it is today.

"Of course, a leader would not be as successful without the support of his immediate family. I have been blessed with a caring wife and children who have provided me with endless encouragement throughout my career and support for the personal time commitment.”

What do you enjoy most about your career?
"I appreciate the joy of working with a top-rate team. It's a pleasure to come to work each day and see the team give their best to one another and to our customers.

"What I am most proud of is that we guard against departmentalism or territorialism:We call it,'no silos.' We promote team effort through our cross-partnering programs and recognition programs.

"Nothing here is 'yours' or 'mine.' It's everybody's. Our employees are all owners of the company after one year of service through our employee stock ownership plan, so they understand our need to perform well and work together. It's a very successful culture organized around the team effort.”

What are the biggest challenges to banking?
"The high unemployment rate and slow economy are presenting strong challenges, as are the vast number of regulatory changes bombarding us. These changes will lower revenue and increase the cost of doing business, which will make it harder to compete against credit unions, which are leveraging their unfair competitive advantage to gain market share.

"Because of regulatory changes, banks are also expected to maintain higher capital levels. Lower revenue, higher costs and higher capital standards will lower returns to shareholders and make it difficult to compete in the capital markets to fund future growth. We are already seeing the impact through lower price multiples for the banking sector. To manage that environment is going to be a challenge, until we stabilize and understand what the regulatory expectations are for banks.

"As is typical in any political debate, the country always swings too far one way and then comes back toward the middle and reasonableness. The challenge now is, how long will it take for the country to begin to act more reasonably and prudently in order to stabilize investor confidence?

"What is happening now isn't a big surprise. You simply have to be patient, proactive and deal with it. The quicker you can adopt the mindset of rising to the challenges, the better off you'll be."

Are you engaged in government relations?
"We do call our legislators and representatives when asked to participate. Indiana Bankers Association does a good job of prompting members to broadcast key messages.

"For a while I served on the IBA board of directors and had a chance to see the Association from a different perspective. I was impressed then and today with IBAs understanding of our industry.

"I give an A+to IBAs work. The Association provides networking opportunities, educational programs, legislative representation and partnerships through our approved vendor programs. All four areas have directly benefited our bank.

"The educational component is extremely important, given the fast pace of regulatory change. The networking opportunities provide premier access to other banks, plus I have found that Indiana bankers are wonderful to work with. And the preferred vendor program has helped our company to remain competitive with the mega banks by improving fee-income opportunities.”

You have been active with several organizations in the community. What is your community service philosophy?
"One of our values is'We contribute to the betterment of our community.' Horizon is celebrating 138 years in business; we have a long history of community service, ingrained in our company's culture.

"I encourage people to find something that they enjoy or have passion to improve, and then pursue volunteer opportunities in those areas. At Horizon we do not require our employees to volunteer, but we do strongly encourage and support some level of volunteer activity. This soft approach has actually increased community participation and follows our philosophy of positive encouragement and reinforcement.”

Now that IBA has brought the Annual Convention to Michigan City, what would like to share about your part of the state?
"We have absolutely wonderful resources up here. We have the Indiana Dunes State Park and the National Lakeshore. My wife and I regularly hike the parks—especially in the fall when the trees have turned. There's also beautiful Lake Michigan, one block away from the site of this year's Convention.

"Restaurants are phenomenal, and we have a strong visual and performing arts community. We have the La Porte County Symphony Orchestra, the Northwest Indiana Symphony Orchestra and the Lubeznik Center for the Arts—one of the topnotch art programs in the state of Indiana-and Michigan City sponsors an arts event called First Fridays@5, which showcases the local talent.

"Chicago has ranked this area as the No. 1 retirement area for Chicago residents. We love Illinois and the business that is directed toward Indiana. We're now seeing a major influx of people, which has bolstered our trust department and our mortgage lending area. People come because they like the quality of life here.

The Northwest Indiana Forum has a saying I like: "We are on the right side of Chicago.”

Your bank’s website states several values, including “We commit to the preservation of independent banking.” Please elaborate.

"We talk about that concept regularly with our company and with the board of directors. First, consider what happens when a major mega bank acquires a community bank. The result is a different type of small business lending; small businesses are now dealing with a remote office based in Chicago or New York or Cincinnati, people unfamiliar with the local market and the borrower's needs.

"If a challenge or problem develops, the borrower lacks a local resource to turn to for support. By contrast, the local community bank is far more responsive to the credit needs of our communities. It's ingrained in us.

"Another noticeable drawback to an acquisition by a large mega bank is that volunteer activities decrease. Not-for-profit organizations lose the talent that community banks traditionally provide. Community banks are strong supporters of not-for-profit organizations, providing cash, in-kind contributions and leadership. We have all seen it happen and know the gaps that need to be filled by the remaining community bankers.

"When a major bank acquires a community bank, you see a sharp reduction in all the aforementioned areas. Therefore independent community banks are important to the future success and wellbeing of our local communities and to the state of Indiana.

"However, remaining independent is not a given right; it's something we as community bankers must earn every day. We earn it through strong performance and by running a safe and sound organization. We still must effectively compete for capital.”

Please tell a bit about your family/ home life/hobbies.
"I have been married to Pam Dwight for 28 wonderful years. We enjoy being active, and recently rode our bicycles across Indiana and Iowa in what are known as RAIN and RAGBRAI organized bicycle rides. Pam and I like to travel, often with our grown children, to new destinations. We're an active family, and we love to snow ski, scuba dive, hike, bicycle and golf.

"We have three independent adult children: Adam, Ryan and Sarah. Our oldest, Adam, is the visual artist in our family. He studied art at Indiana University and now lives and works in Portland, Ore., running the maintenance facilities for a retail company in three states. As a left brain thinker and analytical person, Adam has taught me how to see the world differently.

"Our other son, Ryan, is more like me in that he's very analytical and enjoys working with people. He works at a credit union here in Michigan City, so he literally competes against me. We're very professional about it, but we do give each other a hard time in a joking way. In addition, Ryan follows in our family's tradition of being adventurous and enjoys the great outdoors.

"Our daughter, Sarah, is our independent thinker and is our performing artist. She's a good-hearted, kind person, and she loves music. Sarah plays the French horn in a local orchestra and also is a gifted poet. Sarah has taught us music appreciation and we do listen to a broad range of music, from rock 'n' roll to classical, because of sharing her joy of music.

"When Pam and I started our family, we were influence by a motivational speaker who advocated creating a ‘kitchen for the mind' atmosphere for children. His suggestion was to leave musical instruments and other educational items lying around the house to pique your children's curiosity and to experiment with. We made sure we had a variety of opportunities for our children to experience different aspects of the world to see what interests our children might develop.

"We have wonderful children and really enjoy spending time with them. They have taught Pam and me the full meaning of unconditional love.”