President's Blog

From the sleepy backwater of the boring financial section of the newspaper, banking has finally made the big time.  Except for creative advertising by the very large banks (with equally bountiful marketing budgets) the financial services sector was generally overlooked by the popular press as a place for engaging topics that could yield headline grabbing copy.  Over the past few months however, kingdoms, wars and world politics have been pushed below the fold and banking has become the lead story.

Oh, I know – we did it to ourselves.  The whirlwind of economic decline started with soft but fouling breezes early in 2008.  By late summer, conditions had gotten so bad that the presidential campaign was put on hold, at least by some, so the focus could be completely leveraged on the banking and credit crisis.  Emergency sessions of congress normally the domain of drastic war planning were conducted on behalf of the banking and insurance sectors.  The Secretary of the Treasury was seen running from his office with hair afire in order to secure a $700 billion lifeboat.  And as we know now, many who initially crawled onto that preserve are now trying to scramble off just as fast; the sharks outside seems friendlier than those inside.

Recently even our fine little institution has found its way into print, listed among those who are grappling with the ever changing local economic environment.  The name is spelled right, the numbers are accurately pulled from government reports…but the story can’t be adequately told in that brief graphic manner.

Earnings

Are expenses higher than income right now? Yes – but that’s the nature of a start up bank.  It takes about three years in this environment to grow a financial institution big enough to sustain a continued stream of its own income.  The environment has made it more difficult but we are making the steady and planned progress toward corporate profitability that our initial investors, regulators and community expect of us.  The print media makes it sound like it’s some sort of surprise that we are not yet profitable but that’s just not the case.  Don’t stop reading the financial page or you’ll miss our anticipated announcements of profitability.

Loans

Do we have some clients that are facing financial challenge? Yes – but that also is a reflection of both the cycle of this bank and the cycle of the area economy.  We’re small, so the relative number seems big as a percentage.  That gets better just by us growing into a normal sized bank.  The client challenges we’re facing are being diligently worked by our lending staff.  We’re realistic about working through problems.  That’s what working in a risk based environment is all about.  And by the way, the overwhelming number of our clientele are doing well and managing through these difficult times; some are having the best year they’ve ever had because of an elimination of marginal competitors.  This is a chance for the “cream to truly rise to the top”, as mom would have said.  Don’t stop reading the financial page or you’ll miss our anticipated announcement of improving borrower trends.

Real Estate 

Do we make real estate loans?  You bet‘cha.  We have and will continue to provide real estate financing to those who qualify.  The risk isn’t in just having real estate loans in the portfolio.  The regulators are concerned about the potential of future challenges for commercial real estate projects and are therefore sensitive to concentrations of real estate loans.  They are not inherently bad…They simple require a higher degree of management and attention. Don’t stop reading the financial page or you’ll miss our analysis of the real estate environment.

 I don’t fault the media for their need to seek out and print what they find as important to the lives of those living in their distribution area.  And I have no fear of what reporters or any interested folks will find when they take a look at Sierra Vista Bank.  We’ve got a short but interesting past and the promise of better days ahead.  I only ask that you all seek the complete story; its one we’re ready and willing to share.  Let the ink flow.