Tag Archives: bbva compass

118315706

GPEC announces Board of Directors for FY 2014

The Greater Phoenix Economic Council (GPEC) today announced the appointment of its Board of Directors for the 2014 fiscal year, as approved by the Executive Committee.

Alliance Bank of Arizona CEO James Lundy will continue to lead the Board of Directors as chairman.

“As the economy continues to improve, GPEC’s team of results-driven board directors will work to ensure the region not only maintains its trajectory but also pushes toward a more diversified and sustainable economy that is less dependent on growth industries like real estate and construction,” Lundy said. “I’m honored to work with this talented group of professionals and look forward to a productive year.”

Rounding out the Board’s leadership is SCF Arizona President and CEO Don Smith and Empire Southwest Executive Vice President Chris Zaharis as vice chairs, APS Vice President and Chief Customer Officer Tammy McLeod as secretary and Bryan Cave, LLP Partner R. Neil Irwin as treasurer.

New Board Directors include: Steve Banta, CEO of Valley Metro; the Honorable Denny Barney, District 1 Supervisor for the Maricopa County Board of Supervisors; Scott Bradley, Area Vice President for Waste Management; Mark Clatt, Area President for Republic Services; the Honorable Vincent Francia, Mayor of the Town of Cave Creek; Dr. Ann Weaver Hart, President of the University of Arizona; Bill Jabjiniak, Economic Development Director for the City of Mesa; the Honorable Michael LeVault, Mayor of the Town of Youngtown; Rich Marchant, Executive Vice President, Global Operations for Crescent Crown Distributing; Ryan Nouis, Co-Founder and President of Job Brokers; and Eric Orsborn, Councilmember for the Town of Buckeye.

“GPEC’s success is largely driven by its strong Board of Directors, all of whom reflect the region and state’s most accomplished professionals,” GPEC President and CEO Barry Broome said. “Every single one of them truly cares about our market’s success and serves as a community thought leader when it comes to competitiveness.”

Mayors from GPEC’s member communities and the organization’s Nominating Committee are responsible for nominating and appointing Board Directors. The one-year terms are approved during GPEC’s Annual Board meeting.

GPEC FY 2014 Board of Directors:

James Lundy – Chairman
CEO
Alliance Bank of Arizona

Don Smith – Vice Chair
President and CEO
SCF Arizona

Chris Zaharis – Vice Chair
Executive Vice President
Empire Southwest

Tammy McLeod – Secretary
Vice President and Chief Customer Officer
Arizona Public Service Company

R. Neil Irwin – Treasurer
Partner
Bryan Cave, LLP

William Pepicello, Ph.D. – Immediate Past Chair
President
University of Phoenix

Barry Broome
President and CEO
Greater Phoenix Economic Council

Richard C. Adkerson
President and CEO
Freeport McMoRan Copper & Gold

Jason Bagley
Government Affairs Manager
Intel

Ron Butler
Managing Partner
Ernst & Young LLP

Brian Campbell
Attorney
Campbell & Mahoney, Chartered

Michael Crow, Ph.D.
President
Arizona State University

Kathleen H. Goeppinger, Ph.D.
President and CEO
Midwestern University

Derrick Hall
President and CEO
Arizona Diamondbacks

Sharon Harper
President and CEO
The Plaza Companies

Ann Weaver Hart, Ph.D.
President
University of Arizona

Don Kile
President, Master Planned Communities
The Ellman Companies

Paul Luna
President and CEO
Helios Education Foundation

Rich Marchant
Executive Vice President, Global Operations
Crescent Crown Distributing

David Rousseau
President
Salt River Project

Joseph Stewart
Chairman and CEO
JPMorgan Chase Arizona

Hyman Sukiennik
Vice President
Cox Business

Karrin Kunasek Taylor
Executive Vice President and
Chief Entitlements Officer
DMB Associates, Inc.

Gerrit van Huisstede
Regional President Desert Mountain Region
Wells Fargo

Andy Warren
President
Maracay Homes

Richard B. West, III
President
Carefree Partners

John Zidich
Publisher & President
The Arizona Republic

Chuck Allen
Managing Director, Gov’t & Community Relations
US Airways

Steve Banta
CEO
Valley Metro

Denny Barney
County Supervisor-District 1
Maricopa County Board of Supervisors

Jason Barney
Principal and Partner
Landmark Investments

The Honorable Robert Barrett
Mayor
City of Peoria

Timothy Bidwill
Vice President
Vermilion IDG

Scott Bradley
Area Vice President, Four Corners Area
Waste Management

Norman Butler
Market Executive
Bank of America Merrill Lynch

Mark Clatt
Area President
Republic Services

Jeff Crockett
Shareholder
Brownstein Hyatt Farber Schreck

Wyatt Decker, M.D.
CEO
Mayo Clinic Arizona

George Forristall
Director of Project Development
Mortenson Construction

The Honorable Vincent Francia
Mayor
Town of Cave Creek

Rufus Glasper, Ph.D.
Chancellor
Maricopa Community Colleges

Barry Halpern
Partner
Snell and Wilmer

G. Todd Hardy
Vice President of Assets
ASU Foundation

Lynne Herndon
Phoenix City President
BBVA Compass

Linda Hunt
Senior VP of Operations and President/CEO
Dignity Health Arizona

William Jabiiniak
Economic Development Director
City of Mesa

The Honorable Robert Jackson
Mayor
City of Casa Grande

The Honorable Linda Kavanagh
Mayor
Town of Fountain Hills

The Honorable Andy Kunasek
County Supervisor, District 3
Maricopa County Board of Supervisors

The Honorable Michael LeVault
Mayor
Town of Youngtown

The Honorable John Lewis
Mayor
Town of Gilbert

The Honorable Marie Lopez Rogers
Mayor
City of Avondale

The Honorable Georgia Lord
Mayor
City of Goodyear

Jeff Lowe
President
MidFirst Bank

Paul Magallanez
Economic Development Director
City of Tolleson

Kate Maracas
Vice President
Abengoa

The Honorable Mark Mitchell
Mayor
City of Tempe

Ryan Nouis
Co-Founder & President
Job Brokers

Ed Novak
Managing Partner
Polsinelli Shughart

Eric Osborn
Councilmember
Town of Buckeye

Rui Pereira
General Manager
Rancho de Los Caballeros

The Honorable Christian Price
Mayor
City of Maricopa

Craig Robb
Managing Director
Zions Energy Link

The Honorable Jeff Serdy
Councilmember
City of Apache Junction

Steven M. Shope, Ph.D.
President
Sandia Research Corporation

James T. Swanson
President and CEO
Kitchell Corporation

Richard J. Thompson
President and CEO
Power-One

Jay Tibshraeny
Mayor
City of Chandler

John Welch
Managing Partner
Squire Sanders

Dan Withers
President
D.L. Withers Construction

The Honorable Sharon Wolcott
Mayor
City of Surprise

GENERAL COUNSEL
Bryant Barber
Attorney at Law
Lewis and Roca

137053852

Are Arizona’s anti-deficiency statutes feeding the bubble?

Jack and Jill were living the American dream. They bought their dream house in 2006. Then, the economy spiraled downward. Jack lost his job. Housing values dropped, and the amount remaining on Jack and Jill’s mortgage exceeded the value of the property — commonly known as having a house that is “under water.”

Jack and Jill didn’t want to pay the mortgage any more, so they walked away, leaving the bank to clean up the mess from their financial misstep.

They were able to do that because of Arizona’s anti-deficiency statute, which says that if a person or corporation owns a residential property on 2.5 acres or less that is used as a dwelling, the owner is not responsible for any deficiency occurring after a foreclosure, according to Lynne B. Herndon, city president for BBVA Compass.

“The difference between the fair market value of the home — or the amount that the foreclosure sale brings — and the loan balance is known as a deficiency,” said Paul Hickman, president and CEO of the Arizona Bankers Association. “In Arizona, the bank suffers that loss, not the homeowner who walks away from the home.”

But it’s not only the homeowners — whom the statutes were intended to protect — who are catching the breaks.

“Unfortunately, the statute has been interpreted more broadly than originally intended such that properties used for investment are also covered,” Herndon said.

Arizona is one of only 12 states that has some form of anti-deficiency protection. Of the 12, Herndon said Arizona has the most liberal statute.

“This statute absolutely contributed to the housing bubble as investors both in this state and outside of the state knew they could buy residential real estate in Arizona and walk away if the investment became negative,” Herndon said. “Homeowners in this state have experienced larger declines in home value due to this statute allowing investors to speculate and walk away.”

The incidence of homeowners like Jack and Jill walking away from their home, avoiding hundreds of thousands of dollars of negative equity in their home, and legally sticking their lenders with a loss and became an all-too-common move during the Recession, experts said.

“In my view, the average borrower was not likely aware of the finer points of the anti-deficiency statutes when determining whether to purchase a home,” said Jennifer Hadley Dioguardi, a partner in Snell & Wilmer’s Phoenix office. “However, once the housing market crashed, the anti-deficiency statutes likely caused some homeowners who had the means to make their mortgage payments to decide to simply walk away from the residence given the fact that the lender had no recourse against them other than to foreclose upon the residence once the residence was under water. The borrower was not responsible for the deficiency. This likely contributed to some homeowners who could pay their mortgage simply walking away from the property and leaving the lender on the hook.”

Experts believe that homeowners and investors who seized the opportunity to take advantage of Arizona’s anti-deficiency statutes to protect their own financial futures, might be stifling the state’s chance at an economic recovery and exacerbating the economic collapse.

“The broadness of the deficiency statute has had an overall negative impact not just on the banking industry, but more importantly, Arizona’s long-term economy,” said Keith Maio, president and chief executive officer of National Bank of Arizona. “Arizona’s statute is the most liberally interpreted of the 12 non-recourse/deficiency states, the majority of which limit the protection to primary residences or some other means that limit its contribution to speculation. In Arizona, it allows investors to finance their speculation in housing, risk-free. If their investment does not work out, they don’t have to pay back the difference between what they sold the home for and what they owe. This statute was intended to protect homeowners, but what it has really done is hurt traditional homeowners by opening them up to large swings in housing values. I believe the impact, while negatively effecting banks earnings, is greater on the homeowners in the community at large.”

Despite the impact on the overall economy, it’s still been the banks who take the initial and biggest hit because they are often precluded from recovering the balance of the loan deficiency from the foreclosed borrower. While short sales are not protected by the Arizona’s anti-deficiency statutes, lenders have often been willing to agree to short sales and reduce or otherwise waive deficiency claims, because lenders know they could not otherwise recover loan deficiencies, should the borrower elect to foreclose.

“The deficiency statute has led to greater losses for residential lenders in Arizona because they cannot obtain a judgment against the borrower who may have the ability to repay the deficiency,” Kevin Sellers, executive vice president of First Fidelity Bank. “Lenders’ inability to pursue the borrower for the deficiency creates an environment that results in a higher incidence of strategic defaults.”

The biggest problem for lenders may be that it doesn’t appear that they will get any relief from lawmakers. Dioguardi said properties initially covered by the anti-deficiency statutes had to be two and one-half acres or less and utilized either for a single one-family or a single two-family dwelling. This language was interpreted by the Arizona Supreme Court to require that the dwelling be built and at least occasionally occupied.

“However, a recent decision by the Arizona Court of Appeals has extended the anti-deficiency protection to cover a residence that was not yet constructed and in which the borrowers had never resided,” Dioguardi said. “The Court found that even though the home was never utilized for a residence as required by the statute, because the borrowers intended to live in the single-family home upon its completion, they were subject to the protections of the anti-deficiency statute.”

The court decision, Dioguardi said, needs to be refined to protect both lenders and borrowers.

“Given that the Arizona Supreme Court declined the petition for review of the decision, the legislature should amend the statute to make it even clearer that the borrower must physically inhabit the property to claim the protection of the anti-deficiency statute,” she said. “The current risk to lenders created by the decision as it currently stands will likely drive up the cost of construction loans.”

Bank executives also believe that amending — not necessarily getting rid of — the state anti-deficiency statutes is what the banking industry needs to continue on the road to post-Recession economic recovery.

“A very reasonable solution proposed by the Arizona banking community is to simply require that a property protected from a deficiency judgment be the primary residence of you or a member of your family as already defined in Arizona’s property tax statues,” Maio said. “This will have the effect of limiting this protection for homeowners, which is what was intended. Those in our Arizona business community that oppose this type of change are motivated by their own special interests. Those whose real motivation is to profit on speculative investment or from the fees and commissions that come from buying and selling speculative homes for profit, you will oppose this type of change. But for the rest of us that want to protect Arizonans from future bubbles and encourage a long-term and sustainable economy, we should support this simple change, as it is in our best long-term interest.”

home.prices

Are Arizona’s anti-deficiency statutes feeding the bubble?

Jack and Jill were living the American dream. They bought their dream house in 2006. Then, the economy spiraled downward. Jack lost his job. Housing values dropped, and the amount remaining on Jack and Jill’s mortgage exceeded the value of the property — commonly known as having a house that is “under water.”

Jack and Jill didn’t want to pay the mortgage any more, so they walked away, leaving the bank to clean up the mess from their financial misstep.

They were able to do that because of Arizona’s anti-deficiency statute, which says that if a person or corporation owns a residential property on 2.5 acres or less that is used as a dwelling, the owner is not responsible for any deficiency occurring after a foreclosure, according to Lynne B. Herndon, city president for BBVA Compass.

“The difference between the fair market value of the home — or the amount that the foreclosure sale brings — and the loan balance is known as a deficiency,” said Paul Hickman, president and CEO of the Arizona Bankers Association. “In Arizona, the bank suffers that loss, not the homeowner who walks away from the home.”

But it’s not only the homeowners — whom the statutes were intended to protect — who are catching the breaks.

“Unfortunately, the statute has been interpreted more broadly than originally intended such that properties used for investment are also covered,” Herndon said.
Arizona is one of only 12 states that has some form of anti-deficiency protection. Of the 12, Herndon said Arizona has the most liberal statute.

“This statute absolutely contributed to the housing bubble as investors both in this state and outside of the state knew they could buy residential real estate in Arizona and walk away if the investment became negative,” Herndon said. “Homeowners in this state have experienced larger declines in home value due to this statute allowing investors to speculate and walk away.”

The incidence of homeowners like Jack and Jill walking away from their home, avoiding hundreds of thousands of dollars of negative equity in their home, and legally sticking their lenders with a loss and became an all-too-common move during the Recession, experts said.

“In my view, the average borrower was not likely aware of the finer points of the anti-deficiency statutes when determining whether to purchase a home,” said Jennifer Hadley Dioguardi, a partner in Snell & Wilmer’s Phoenix office. “However, once the housing market crashed, the anti-deficiency statutes likely caused some homeowners who had the means to make their mortgage payments to decide to simply walk away from the residence given the fact that the lender had no recourse against them other than to foreclose upon the residence once the residence was under water. The borrower was not responsible for the deficiency. This likely contributed to some homeowners who could pay their mortgage simply walking away from the property and leaving the lender on the hook.”

Experts believe that homeowners and investors who seized the opportunity to take advantage of Arizona’s anti-deficiency statutes to protect their own financial futures, might be stifling the state’s chance at an economic recovery and exacerbating the economic collapse.

“The broadness of the deficiency statute has had an overall negative impact not just on the banking industry, but more importantly, Arizona’s long-term economy,” said Keith Maio, president and chief executive officer of National Bank of Arizona. “Arizona’s statute is the most liberally interpreted of the 12 non-recourse/deficiency states, the majority of which limit the protection to primary residences or some other means that limit its contribution to speculation. In Arizona, it allows investors to finance their speculation in housing, risk-free. If their investment does not work out, they don’t have to pay back the difference between what they sold the home for and what they owe. This statute was intended to protect homeowners, but what it has really done is hurt traditional homeowners by opening them up to large swings in housing values. I believe the impact, while negatively effecting banks earnings, is greater on the homeowners in the community at large.”

Despite the impact on the overall economy, it’s still been the banks who take the initial and biggest hit because they are often precluded from recovering the balance of the loan deficiency from the foreclosed borrower. While short sales are not protected by the Arizona’s anti-deficiency statutes, lenders have often been willing to agree to short sales and reduce or otherwise waive deficiency claims, because lenders know they could not otherwise recover loan deficiencies, should the borrower elect to foreclose.

“The deficiency statute has led to greater losses for residential lenders in Arizona because they cannot obtain a judgment against the borrower who may have the ability to repay the deficiency,” Kevin Sellers, executive vice president of First Fidelity Bank. “Lenders’ inability to pursue the borrower for the deficiency creates an environment that results in a higher incidence of strategic defaults.”

The biggest problem for lenders may be that it doesn’t appear that they will get any relief from lawmakers. Dioguardi said properties initially covered by the anti-deficiency statutes had to be two and one-half acres or less and utilized either for a single one-family or a single two-family dwelling. This language was interpreted by the Arizona Supreme Court to require that the dwelling be built and at least occasionally occupied.

“However, a recent decision by the Arizona Court of Appeals has extended the anti-deficiency protection to cover a residence that was not yet constructed and in which the borrowers had never resided,” Dioguardi said. “The Court found that even though the home was never utilized for a residence as required by the statute, because the borrowers intended to live in the single-family home upon its completion, they were subject to the protections of the anti-deficiency statute.”

The court decision, Dioguardi said, needs to be refined to protect both lenders and borrowers.

“Given that the Arizona Supreme Court declined the petition for review of the decision, the legislature should amend the statute to make it even clearer that the borrower must physically inhabit the property to claim the protection of the anti-deficiency statute,” she said. “The current risk to lenders created by the decision as it currently stands will likely drive up the cost of construction loans.”

Bank executives also believe that amending — not necessarily getting rid of — the state anti-deficiency statutes is what the banking industry needs to continue on the road to post-Recession economic recovery.

“A very reasonable solution proposed by the Arizona banking community is to simply require that a property protected from a deficiency judgment be the primary residence of you or a member of your family as already defined in Arizona’s property tax statues,” Maio said. “This will have the effect of limiting this protection for homeowners, which is what was intended. Those in our Arizona business community that oppose this type of change are motivated by their own special interests. Those whose real motivation is to profit on speculative investment or from the fees and commissions that come from buying and selling speculative homes for profit, you will oppose this type of change. But for the rest of us that want to protect Arizonans from future bubbles and encourage a long-term and sustainable economy, we should support this simple change, as it is in our best long-term interest.”

Test

Q&A with Lynne Herndon

Lynne Herndon, city president for BBVA Compass, will serve as the 2012-2013 chairman of the board of directors for the Arizona Bankers Association (AzBA).  Herndon succeeds James Lundy, president and CEO of Alliance Bank of Arizona, as chairman of the association.

“I am excited to step into the chairman role and work with the other board and association members,” said Herndon.  “These last few years have required steadfast legislative attention and advocacy at all levels.  We have also had to respond to heightened regulatory attention and pressures.  Acting with a single voice has made a larger impact.  I look forward to continuing to strengthen the unified voice of the bankers within the state.”
Herndon sat down with Az Business magazine for a far-reaching Q&A.

AB: Why did you choose banking as a career?
Lynne Herndon: I chose banking because it allowed me to utilize both my interpersonal and analytical skills. I enjoy meeting with customers and I enjoy analyzing a business situation and offering a solution. Bankers help companies accomplish their goals of growth and expansion.  It’s a perfect fit.

AB: Tell us one thing about you that would surprise most people?
LH: My two favorite things are college football, namely Alabama football, and rock ’n’ roll music.  My husband and I go to at least 20 concerts a year, both in and out of state.

AB: What’s the biggest change you’ve seen in the banking industry since you started?
LH: Regulation.  Banks are held to a much higher standard in areas of underwriting, appraisals, and compliance. Our required level of due diligence is therefore deeper.

AB: What has been your biggest challenge in the banking industry?
LH: Winning business in a highly competitive market. Arizona has many, many banks. And many banks are chasing the same deals.

AB: What has been your greatest accomplishment in banking?
LH: Lending when times are good is easy. Lending when economic times are tough is hard. I’m proud of the fact that BBVA Compass was able to lend money during 2009 and 2010, two very difficult years.

AB: The Valley is home to many female banking leaders. Why have so many more women risen to the top of the industry here in Arizona compared with other parts of the country?
LH: There are more women in banking today because more women are seeking and aspiring to senior management positions in this industry. In particular, more women are pursuing positions in commercial banking.

AB: What do you hope to accomplish as chairwoman of the Arizona Bankers Association?
LH: Our marquee issue is amending Arizona’s anti-deficiency statute.

AB: The banking industry has been beaten up a bit over the last few years thanks in part to Wall Street, what does the industry need to do to begin to mend its public perception?
LH: Bankers need to proactively speak to clients about what we are doing.  We are in business to make loans and we are looking for ways to loan money to individuals and businesses.  Our workforce is also very active in our communities giving both time and treasure.  We need to tell our story.

iphone

BBVA Compass unveils bilingual iPhone app

BBVA Compass further expanded the reach of its mobile banking apps with the introduction of its bilingual iPhone app.

“This is part of our ongoing commitment to continually improve our mobile banking solutions, adding features and services to better serve our customers’ needs,” said Alex Carriles, executive vice president and director of Mobile Strategy and Retail Innovation at BBVA Compass. “We currently serve a number of markets with a growing Spanish-speaking population, so we wanted to give those customers access in the language that is most comfortable to them.”

The bank remains committed to providing native applications for the most popular mobile platforms, allowing users to enjoy a mobile banking experience that is consistent with their chosen devices. In addition to the iPhone, BBVA Compass provides mobile banking apps for iPhone and iPad mobile digital devices, BlackBerry devices and the Android mobile digital platform, and soon will be updating those to add bilingual capabilities.

“We already operate as a fully bilingual bank in the U.S., and these additions will support that commitment,” Carriles said.

The latest iPhone app offers access to such mobile banking features as bill pay, account transfers, balance review, an enhanced branch locator and improved views of paid checks with zoom capabilities. This new version also introduces a full feature Bill Pay service by allowing customers not only to issue payments, but also to add payees, manage payment source accounts, display past payments, and display or cancel pending payments.

To download the free BBVA Compass app, visit the iPhone app store and search for BBVA Compass.

For more information on additional BBVA Compass mobile banking applications, visit www.bbvacompass.com/go/mobile.

80410231

BBVA Compass’ Herndon Will Chair Arizona Bankers Association

The Arizona Bankers Association (AzBA) announced  that Lynne B. Herndon, city president for BBVA Compass, will serve as the 2012-2013 chairman of the board of directors for the association.  Herndon succeeds James Lundy, president and CEO of Alliance Bank of Arizona, as chairman of the association.

“I am excited to step into the chairman role and work with the other board and association members,” said Herndon.  “These last few years have required steadfast legislative attention and advocacy at all levels.  We have also had to respond to heightened regulatory attention and pressures.  Acting with a single voice has made a larger impact.  I look forward to continuing to strengthen the unified voice of the bankers within the state.”

Herndon has worked in banking for roughly 24 years.  She earned a Bachelor of Science in Business Administration and MBA from the University of Alabama as well as obtained the certified public accountant designation.  Herndon has served as an active member of the AzBA board since 2008.  She has served in the capacity of chair-elect for the association for the past two years.

In addition to Herndon’s election to chairman, the AzBA announced the election of its 2012-2013 board of directors during its recent 109th Annual Convention & Meeting.  The new board consists of the following officers who provide leadership to the association and the members of its staff.
· Chair:  Lynne B. Herndon, City President, BBVA Compass
· Chair-Elect:  Mike Thorell, President, Pinnacle Bank
· Vice-Chairman:  Benito Almanza, Arizona President, Bank of America
· Immediate Past Chairman:  James Lundy, CEO, Alliance Bank of Arizona

· Toby Day, Arizona President, Arizona Business Bank
· Gail Grace, President & CEO, Sunrise Bank of Arizona
· Steve Johnson, President, BMO Harris Bank
· Chuck Luhtala, President, Canyon Community Bank
· Brian Riley, CEO, Mohave State Bank
· Joe Stewart, Chairman & CEO Arizona, JP Morgan Chase N.A.
· Gerrit van Huisstede, Regional President, Well Fargo Bank N.A.
· Candace Wiest, President & CEO, West Valley National Bank

“I am pleased and honored to have these distinguished banking professionals serve and guide our association in the coming year,” said Paul Hickman, president and CEO of the AzBA.  “I look forward to a successful and productive year with Lynne and the newly-elected board.”

Business Lending - AZ Business Magazine November/December 2011

Now Is The Right Time For Business Lending, Financial Banking

Now is the Right Time for Business Lending, Financial Banking

Now might be the right time for businesses looking for financial backing to reach out to banks to help with plans for expansion and growth.

“When small businesses are given the tools to grow, that means growth for the economy,” says Craig P. Doyle, Arizona regional president of Comerica Bank. “We have the ability to provide capital to those businesses that can grow.”

The status of business lending in Arizona has been in question during a tough economy, but the reaction from Arizona banking representatives has been similar across the board: banks are lending, and the number of loans issued has increased over the past year.

Most banks in Arizona have weathered the economic crisis fairly well, and have had the ability to continue to make loans.

Dean Rennell, a regional president at Wells Fargo Bank says he has seen a steady improvement in business lending over the past year.

During that period Wells Fargo extended approximately $14.9 billion in loans to small businesses nationwide, a 13 percent increase over the year before.

In Arizona alone, Rennell says he has seen Wells Fargo’s lending increase 15 percent over the past year.

“Borrowers are showing improved financial performance,” Rennell says. “That means they’ve adjusted to what people are calling the ‘new normal,’ and they’ve diversified and become more efficient.”

Rennell is seeing a significant amount of loans from small businesses looking to buy competitors or real estate, or expand the company.

Companies that had cut back on expenses are now starting to invest in new equipment and technology that they had refrained from purchasing in the past.

“We’re seeing expansion requests and some businesses are taking advantage of the opportunities they see in the marketplace,” Rennell says.

Arizona banks have been able to lend during the recession because Arizona has a large number of companies that are well managed and credit-worthy, experts say.

“Most banks in Arizona are capitalized and have enough liquidity and capacity to make loans,” says Curt Hansen, executive vice president of the National Bank of Arizona. “There are a lot of well-run large and small banks, and Arizona is a good market long-term.”

When looking at possible loans, banks still desire the same qualifications they have in the past, such as a good track record, a strong management team and an ability to weather tough times.

The biggest difference now is that banks are paying more attention to the actual documents required for the loan.

“Bankers are looking at borrower’s ability to withstand short-term shocks and the borrower’s ability to repay the loans requesting,” Hansen says.

Lynne Herndon, city president at BBVA Compass, has seen an increasing number of loan requests coming from the small business segment.

“Almost 70 percent of business owners in Arizona belong to the smaller business segment, and that’s the segment where we’re seeing growth,” Herndon says. “Those entrepreneurs and business owners were cautious before and are beginning to venture out more.”

Most businesses large or small have some form of lending, whether it is a line of credit, equipment loan or real estate loan. Lines of credit are necessary for companies to continue to operate, and many companies are renewing the lines of credit they already have.

BBVA Compass Phoenix saw double-digit loan growth in 2010 of about 12 percent, and has seen about a 15 percent increase in 2011.

The only area where Herndon says he doesn’t see as many loans being issued is in real estate lending.

According to Herndon, the uncertainty in the Arizona housing market plays a huge role in the decline of real estate lending. People are still wondering if values have hit bottom.

“The economy is still a concern, and the political climate,” Herndon says. “Most of the companies and businesses here need a banking relationship in order to maintain and grow their company. The demand for loans is definitely increasing and I’m hopeful this trend will continue to improve.”

[stextbox id="info"]

For more information about business lending and financial backing, visit:

comerica.com
wellsfargo.com

nbarizona.com

bbvacompass.com

[/stextbox]

Arizona Business Magazine November/December 2011

 

Arizona Bankers Association, Bankers Give Back - AZ Business Magazine November/December 2011

Arizona Bankers Association Impacts State’s Economy, Communities

Arizona Bankers Association Impacts State’s Economy, Communities

Ryan Suchala, Bank of Arizona, Arizona Bankers AssociationBank of Arizona President Ryan Suchala recognizes the importance of community.

“This is where we live, work and play and in many cases the city where we are shaping our families,” Suchala says. “As a father of three I give my time to better our community because this is where my boys will become men. Last year, Bank of Arizona employees spent close to 450 hours working in our community and I personally became a board member at Arizona Women Education and Employment.”

To show the Arizona banking industry’s impact on its communities, the Arizona Bankers Association (AzBA) produced a brochure titled “Arizona Banks Give Back.” The report provides a picture of the economic and charitable support the banking industry gives back to the communities it serves, and shows the influence banks have on Arizona’s economy.

Arizona Bankers Association is an organization with more than 70 members that works to create a unified voice and engage members in issues that affect the banking industry.

Lynne Herndon, city president at BBVA Compass“It’s clear the banking industry has been under a microscope the last few years,” says Lynne Herndon, city president of BBVA Compass. “We wanted to pull our information and be treated collectively as an industry to say we are looking to work with companies to help them with their financial needs.”

Arizona Bankers Association created the “Arizona Banks Give Back” survey in November 2010 to collect a variety of data from Arizona banks. The results were released in February 2011. The 12-page brochure includes statistical data that shows how banks provide financial and social stability in Arizona.

The banks that chose to participate in the survey felt that it provided a good opportunity to change the way people currently view banks. The biggest surprise to Paul Hickman, president and CEO of Arizona Bankers Association, was how high bank lending was in Arizona in 2010.

According to the survey results, Arizona banks lent $5.9 billion in new and renewed commercial loans, and more than $11 billion in new and renewed consumer loans in 2010.

“A lot of the feedback we’ve been getting is ‘Wow, I didn’t realize the volume of lending was that great in this economy,’” Hickman says.

The number is likely higher as only 35 AzBA-member institutions responded to the survey, which only represents 63 percent of the organization’s membership, and does not include information from non-member banks.

In today’s economy, banks are more cautious about lending, but the data proves that Arizona banks are continuing to lend to commercial businesses and consumers.

“We keep hearing banks won’t lend,” Hickman says. “But banks don’t make money if they don’t lend.”

Banks want to lend so they can pump money into Arizona’s economy.

Arizona banks provide direct loans to help the state government finance public improvements by improving water, sewer and public health facilities and by helping build schools.

Banks pay income tax to help support local communities as opposed to credit unions, which don’t pay federal income tax.

Arizona banks are also putting money into the economy by being a leading employer of local residents. Banks bring high-wage jobs to the local community, and employ more than 42,000 Arizonans.

Wells Fargo Bank was the fifth largest employer of Arizonans in 2010, and the average salary for an employee working at a bank was around $66,625 in 2010.

By providing jobs, banks provide a ripple effect in the community, because employees pay state taxes and are also consumers that put money back into local businesses.

Arizona banks are also doing more than just putting money into the economy. Members of Arizona banks are striving to aid their community through service.

According to the results from the Arizona Banks Give Back survey, bank employees donated 211,615 volunteer hours to community service in 2010, and donated $15.5 million to charitable and cultural organizations.

“Actions speak louder than words,” says Craig P. Doyle, Arizona regional president of Comerica Bank. “We get out and are active in making a difference in our communities. It’s better than just handing money out.”

To show their commitment to the communities they serve, Comerica employees work with nonprofits like Fresh Start Women’s Foundation, Homeward Bound, Junior Achievement, Sojourner Women’s Shelter, United Food Bank, Central AZ Shelter Services and many others.

An effort from Suchala and the Bank of Arizona helped improve literacy across the Valley.

“Last year, we hosted our annual Caring for Kids Book Drive and collected over 14,000 books for children and adults in our community,” Suchala says. “We educate with multiple employees teaching Junior Achievement programs and with educational programs to local school children. Our employees have worked together this past year sorting school supplies at the annual Salvation Army Pack to School Drive, serving food alongside Alice Cooper for the Cooperstown Christmas for Kids event and pounded nails at two Habitat for Humanity events.”

“These are good members of the community,” Hickman says. “These are people that are donating their money and time at philanthropies around the state and they’re trying hard to impart their discipline.”

Arizona banks participate in programs such as neighborhood revitalization, financial education and assistance for the underprivileged.

In 2008, Mohave State Bank created a program called “Junior Bankers.” Three years later, Mohave State bankers are still training children at Jamaica Elementary School in Lake Havasu about balancing accounts, taking deposits and bank rules. Volunteers meet each week with students before school. The program has expanded to three other elementary schools.

In 2010, the National Bank of Arizona donated one of its foreclosed homes in Glendale to Habitat for Humanity Central Arizona. The bank partnered with the organization to help renovate the property, and 118 people worked to build walls, paint and landscape the property.

Arizona banks are committed to helping the community both financially and through service, Hickman says.
“This industry is like the cardiovascular system of our economy and it needs to be robust and healthy,” Hickman says. “We don’t grow or recover without this industry.”

For more information about the Arizona Bankers Association, visit azbankers.org.

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Arizona Gives Back: By the Numbers

  • More than $5.9 billion distributed in commercial loans (new and renewed) in 2010
  • More than $11 billion distributed in consumer loans (new and renewed) in 2010
  • More than 1,300 banking center locations in Arizona
  • More than 42,000 people work for Arizona banks
  • $66,625 is the average bank employee salary

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Arizona Business Magazine November/December 2011