Sometimes prevention really is the best cure. Through sound decisions made in the midst of a very sick economy, Richard Lehmann, founder and CEO of Biltmore Bank of Arizona, warded off troubles other banks encountered. But he knows all too well the woes of being the forgotten patient, or at least one left to fend on its own.
Think about being that patient, not well, coming down with one heck of a bug threatening to take you under, only the doctor you’re seeing has devoted all her resources to a handful of her largest patients: CitiGroup, Bank of America, and old warhorse General Motors, among many others. Biltmore Bank is one of millions of American businesses taken ill during the recession and mending now without the help of taxpayer funds.
“When we started the business in 2003, the economy was in good shape. Our investor base was local, and we grew rapidly. But in 2006, we started seeing signs of the housing bubble and subsequent wreckage,” Lehmann relates.
It was at that time, Lehmann says, that Biltmore Bank exited the mortgage business. It was this proactive move that positioned Biltmore Bank to survive what is undoubtedly the toughest economy Arizona has ever seen. The Copper State entered the recession three months before the rest of the nation and as far exiting it, some would say the jury is still out. “I never imagined it would get as bad as it did,” says Lehmann, referring to the Valley’s housing market. “It really cratered.”
When Lehman speaks about this unprecedented time in the state’s economic history, a shade of disbelief is still evident in his voice. “I have been in the business for 44 years and I have never seen anything like it,” he says. Unemployment hit a 27-year high, the state lost one-tenth of its jobs and, at one point during the recession, foreclosures accounted for nearly one-half of Arizona home sales.
Biltmore Bank was not a recipient of the Troubled Assets Relief Program (TARP) money or any government recovery funds. “We were apparently not too big to fail,” Lehmann chuckles, “unlike GM, Goldman Sachs, Wells Fargo.” Indeed, its safety net was one woven not with taxpayer-funded loans but with tough decisions and precise actions.
In addition to exiting the mortgage sector of the business and cutting salaries and bonuses, Lehmann says the company refocused its efforts on the basics. The overarching emphasis became conserving capital and serving customers. Lehmann and his son, Biltmore Bank’s managing director Greg Lehmann, made serving the Arizona business community their point of direction. They honed in on how to understand the needs of the state’s businesses, setting their bank apart from national banks. “Through that focus, we stayed proud, and we stayed whole — a team,” says Lehmann. From decades gaining knowledge in the international banking market, the elder Lehmann has a tremendous understanding of the distinction.
Serving Arizona businesses through two locations and with 50 employees, Biltmore Bank offers customized loan solutions, treasury management, SBA lending, business checking and online services. And its assets have grown to more than $260 million.
Widening the gap between “big guys” and Biltmore Bank’s style of doing business has paid off. And the payoff is all the more evident now that Arizona’s economy seems to be headed for brighter days.
“We’ve been able to start growing loan portfolios in the last six months,” says Lehmann, “and that’s a good sign. Arizona’s economy is on the mend, but it sure hasn’t come back like it has in the past. Still, I’m bullish on Arizona. As a state, we’ve got our issues to deal with, but it feels to me like we’re headed in the right direction.”
Banking on Success
- In 1969 when Richard Lehmann finished graduate school, he was offered jobs with both Citibank and Ford Motor Company — both of whom took some form of government assistance in the wake of the Great Recession. Biltmore Bank made it through the recession on moxie.
- Lehmann had studied abroad and the first years of career were spent working in Europe, focused on international banking. In 1977, he moved back to the U.S.
- In 1985, Lehmann took his family abroad again as he worked for Citibank, overseeing clients in Africa, the Middle East and Europe. The family settled in Arizona in 1988 when Lehmann took the position of CEO of Valley National Bank.
- In June 2013, Biltmore Bank of Arizona marked the 10th anniversary of its founding. It now has two locations: its Camelback Office in central Phoenix and its Scottsdale Airpark Office in Scottsdale.
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