If President Obama’s December 14 meeting with bank CEOs wasn’t a trip to the woodshed for an actual lashing, then it was at least an executive tour of the woodshed to view the various implements of punishment hanging on the walls. And it was most definitely a trip to the woodshed for the banking industry, which was portrayed as greedy, uncaring, and awash in self-serving lobbyists.

President Obama’s post-meeting rhetoric did nothing to address the general public perception that all banks are inextricably linked with (and headquartered on, it seems!) that half mile strip of concrete called Wall Street.

This “woodshed summit” provided yet another example of why it’s incumbent upon each and every community bank to talk to its customers, potential customers, investors and communities about how and why it doesn’t belong in that chastized group trek of woodshed visitors.

Proactive communications – and we’re talking here about sharing information about the bank, its management, operating strategy and performance, not just product marketing and a little local PR fluff – can be a highly effective tool.

After more than a year of public bank-bashing, it’s clear the American public, from the President on down, either can’t or doesn’t want to differentiate between community banks, mega-banks and investment banks. Of course, community banks aren’t blameless, as witnessed by the many small bank failures and the loan quality and capital sufficiency problems being experienced across the board.

But this is a far cry from failure and problems related to exotic financial instruments and bloated executive compensation despite sub-par performance. If anything, it’s rooted in over-exuberance in real estate lending, weak underwriting and poor management.

True, there are too many banks and too many weak banks: that will lead to continuing consolidation. But consolidation doesn’t mean the end of community banking or the basic premise that community banks are a critical part of the country’s financial mix. It just means community banks will need to be stronger, smarter, and a bit larger than before.

If there was ever a crisis in perception, the banking industry today is a textbook case study. Despite this public relations catastrophe, many community banks have chosen to minimize rather than revitalize their communications.

Despite the best efforts of the many fine and hard-working community banking industry groups to clarify public perception, it’s clear they’ve failed to alter public opinion in a meaningful way. Look no further than the White House rhetoric: bankers=fat cats.  Heck, even the banking experts on Capitol Hill only offer the faintest glimmer of hope that they understand the diversity of the financial sector.

It’s pretty clear the most effective way to change and manage public perception rests with each and every bank. And unless you’re a banker who actually believes your organization is not providing valuable service at fair prices, this is not about spin. This is about using proactive communications to correct some very detrimental public misperceptions about banking and about your business.

Although only a dozen large bank executives met with President Obama, the entire industry and every bank executive today received a tour of the woodshed. The good news is any and every community bank can make a positive case on its own behalf. – Tad Gage