We had a great time at BankWorld 2009 last week in Cromwell, Conn., but one session wasn’t fun for community bankers, who get dressed down over the state of their Internet presence.

Sobering words greeted those community bankers taking in the “Growing Profitable Core Deposits And Fee Income – What’s Working” seminar, when its presenter, Strunk & Associates’ Senior Vice President Mike Potter Jr., warned that banking on being local, local, local won’t cut it in the long run.

Potter said when it comes to online banks’ approach and investment in the Internet, “[Mega banks are] taking us to the cleaners.”

And we agree.

For example, Potter said more than 50 percent of brick and mortar operations are closing more checking accounts than they are opening, while the more than 20 online banks have seen profits jump 24 percent in the six years leading up to 2007.

“Eighty percent of all checking accounts are owned by 20 banks, and a quarter of those have branches,” he said. “We’re killing each other over [the remaining] 20 percent.”

Potter said hanging onto the belief that being a community bank – and not a mega bank – will suffice is a fallacy because “some customers just don’t care.”

“The biggest profit center at community banks is customer ignorance,” not bank loyalty, Potter said. “[Customers] are not coming to branches anymore. Seventy-one percent are looking for their next bank on the Internet.

“The only reason community banks have a future is due to a lot of lazy money,” he added.

Potter invited those in attendance to simply Google their ZIP code with the words ‘checking account’, and see if their banks come up in the results. He was willing to bet they would not show up on the first page. We took the test using one of our employee’s ZIP codes, and there were no local banks for the first 10 pages. The first three postings were Schwab, Bank of America and Sovereign Bank.

Potter said even if community banks paid the high fees Google charges to be at the top of the list, it may not help the small banker who can’t afford to provide the high interest rates many online banks are offering.

“Eighty percent of mega banks’ customers know the service will stink,” Potter said, but they are more attracted by high interest rates offered by online-only products from ING and HSBC.

“We don’t like to look in the mirror” when it comes to community banks’ customers, but “they’re the walking dead,” Potter said.

We don’t know if you agree with that description, but we were impressed with the analogy Potter used to describe the state of community banking and the Internet generation growing year by year: He equated the sea change in customers’ approach toward banking like the one with online travel.

Travel agencies, he said, thought they could provide the service customers would not be able to get online. “It was the travel agencies’ service versus William Shatner’s [Priceline.com].

“Community bankers are not good at innovation,” he added.

Potter warned the profit loss from not taking the Internet customer more seriously would mean more banks will close in the next couple years than even the FDIC has forecast – not because they’ve failed because of bad loans, but because “they’re not making money.”

Newspapers are learning a harsh lesson in failing to channel profits out of the Internet while sitting on their local, local, local laurels. If community banks take the same route, the road to ruin may dead-end at the online highway already overflowing with traffic.