James H. Lundy’s impact on Arizona’s business community is undeniable.

  • He is the founding CEO of Alliance Bank of Arizona and helped grow it from a start-up bank in 2003 into the fourth-largest banking organization in Arizona.
  • Lundy is past chairman and current board member of the Greater Phoenix Economic Council (GPEC).
  • He is immediate past chairman of the Catholic Community Foundation.
  • Lundy is secretary of the Phoenix Civic Improvement Corporation.
  • He recently completed a three-year term on the FDIC Community Banking Advisory Council.
  • The banking icon is past chairman of the Arizona Bankers Association.
  • Most important to the future of Arizona, Lundy has helped spearhead the issue of high-quality, accessible education across the state.

Lundy will call it a career when he retires on March 31. Don H. Garner, also a member of the organization’s original management team, became the new CEO of Alliance Bank of Arizona on Jan. 1.

Az Business sat down with man who practiced law before launching a career in banking when he was in his 30s to talk about the future of Arizona banking, how it has evolved during his career, the lessons he has learned and best practices for success.

Az Business: Why did you decide that now is the right time to retire?

Jim Lundy: It has nothing to do with the business of banking. I’m 67. My wife is a physician and retired last year. We have four grown children and 10 grandchildren and they all live in Northern California. It just seemed like the right time from a personal and family standpoint and the bank is doing well.

AB: Why did you switch from law to banking?

JL: I just had an idea that I would enjoy banking more than I enjoyed practicing law. The general skill sets were complimentary and similar. The thing that attracted me to commercial banking is that you are really involved in the business, you get to understand the business, and you can spend your time helping businesses grow and succeed and thrive. That seemed like a more productive and satisfying way to spend my career than practicing law.

AB: How has the banking industry evolved since you started?

JL: There are two events that have driven change:

  • Computerization and the ability to amass and store data across a wide spectrum of media helped propel banking from being a very local business to one where various types of financial products could be tracked on a national scale.
  • The second is the economic dips and downturns that involved the financial services industry itself. Not only did you have the macro forces that were driving us through a down economic cycle, but those forces caught up the financial services industry and its own business models. It deepened, exacerbated and lengthened that economic trough. Those things really changed the way the government looks at banking in two fundamental ways — much increased regulation and much higher capital requirements. I think if we’d had higher capital requirements in place earlier, the housing crisis wouldn’t have impacted the entire country. So I think the higher capital requirements are appropriate. Unfortunately, I think most of the intense regulatory scrutiny misses the mark. It makes the policy makers feel better, but it doesn’t do a lot of good to make banks safer.

AB: What gives you the most pride?

JL: I look back over a career and I still have customers that bank with Alliance Bank that I had at my first bank 30 years ago. They’re a little older. I’m a little older. But they are symbolic of the hundreds and hundreds of business customers that I have been able to touch and help expand their businesses in a profitable way.

AB: What has been one of the biggest challenges you’ve faced?

JL: One of the things I recognized after the first financial crisis in my career was that the industry stopped recruiting for a while and didn’t have the formal training programs it once had. As I was looking for new talent, it was increasingly difficult to find people who had been trained by others in the industry. So I made a commitment in the mid-1990s to start recruiting bright young people right out of college and we’ve really accelerated that and it’s a huge part of our success. Now, we have a very deep bench of bankers who can really make a difference and build a profitable bank.

AB: What’s the best advice you could give someone who wants to begin career in banking in 2017?

JL: Pay a lot of attention to the broader world around you. Read the Wall Street Journal. Read the Economist. Read the New York Times. Read scientific and scholarly journals. In addition to your specific financial expertise, you’ll be a better banker and a better boss if you have a broader perspective on what’s driving not only the economy, but society in general. That will give you the well-roundedness needed to manage risk well and understand your customers’ needs.

AB: What do you think lies ahead for Arizona’s banking industry in the coming years?

JL: I am generally bullish about Arizona’s economy and economic prospects. There are certainly some clouds and pitfalls and some things policymakers need to address, primarily in competitiveness and education. There isn’t anything more important to economic development than an investment in education at all levels and Arizona needs to do more than that. I think we learned some lessons from the last recession and I think Arizona’s economy is diversifying and is less dependent on residential construction and real estate development. It’s still the bread and butter of a lot of banking and economic activity, but I think our economic underpinnings are broadening and that will be good for banks. I don’t think the consolidation in the banking industry — there were more than 50,000 banks when I started 33 years ago and there are only around 6,000 today — is a bad thing. I don’t think we are are going to have lots and lots of small community banks ever again, but overall, Arizona’s economy has a bright future.