Russ: This is the BusinessMakers Show heard on the radio and seen online at TheBusinessMakers.com. It's guest time on the show and I'm very pleased to have with me Mark Montgomery, Houston City President for BBVA Compass. Mark, welcome to The BusinessMakers Show.
Mark: Thanks for having me.
Russ: You bet. Well Houston City President, BBVA Compass. Tell us about that.
Mark: Well that means I'm the face of the bank here in Houston. I don't run the whole bank. We have folks in retail and wealth; Karen Dixon in our Wealth Group and Larry Franco, who runs Retail here. So together, we're running the various units of the bank but I'm the face of the bank here. What's unique about that is we do that in every city where we operate. We have a City President, even if it's only a couple of commercial bankers or a couple of retail bankers.
Russ: Okay but Houston's pretty important to BBVA Compass, right?
Mark: We're number one in terms of market share amongst the cities in our footprint.
Mark: So very important.
Russ: Okay, really cool, now man oh man, have you been active around this city. For those viewers and listeners outside of Houston, my God, there's a stadium now, a soccer stadium and a building. Talk about that a bit.
Mark: I love that because we're kinda book-ending the city, right? We've got the stadium near downtown facing east, if you will.
Mark: And we've got the new building, 18 of 22 stories are started and so we've got the city surrounded but what I really like is the fact that our 1,400 employees or so are active in the community, involved in charities, et cetera. So we're becoming well-known for that as well.
Russ: Okay. Now it's kind of a tough time to be in the financial services business. Banking, in particular, and particular when you sorta are anchored with a parent company in Europe, in Spain specifically. I have to feel, Mark, that it's a pretty stressful time. Is that accurate?
Mark: Well banking over the past few years has been very, very stressful anyway.
Mark: But it is more stressful today primarily because of the questions which we don't mind answering. It seems like there's something new every day but when you think about it from our perspective, sitting here in Houston, yes, we're part of BBVA Group but we're also a stand-alone FDIC business or bank.
Mark: So we have our own capital. We don't upstream any capital, et cetera. So what goes bump in the night in Spain does not affect us here.
Russ: Okay, it seems like it's been going a little bit more than bump in the night.
Mark: Yeah, yeah.
Russ: In Spain, particular. My God, so even if you're saying that, you know, you're kinda sheltered from that, I assume that internal communications might include updates from what's going on in Spain and how the parent company's handling it.
Mark: Absolutely. So when you look at our footprint, right, we're in Spain, no doubt. We have, you know, 40-plus percent of our assets are in Spain.
Mark: So you have earnings that have declined there, et cetera, but we are a global footprint. We're in 33 different countries, et cetera, so that helps us. No doubt, things are rough in Spain but it helps to be so diversified.
Russ: I prepared a little bit and discovered that probably compared to more of the banks that are headquartered in Spain, BBVA is globally diverse.
Mark: Absolutely. There are a couple banks that are headquartered in Spain that are very diverse, which is so helpful. I mean if you think about what happened here in the US last year, you know, 4 percent of the group's earnings in 2010 came from the US., 5 percent in '11 and we're at 8 percent for this year, so we're actually helping out in terms of the total earnings here in the US.
Russ: Okay. I understand if I were in your seat right now, too, I'd be saying, "No problem," but it seems like there could be a drain over there, a drain of capital, that would call for, you know, pulling assets out of the US, maybe right outta Houston.
Russ: That might actually impact you.
Mark: They can't pull the assets out.
Mark: I mean we have a core capital position that we're supposed to maintain and we're not up-streaming capital. As a matter of fact, I read an article from our CEO this morning - they can't pull it out.
Russ: Okay, you've convinced me and stuff. So that means it's business as usual here right now?
Mark: Business as usual here in the US.
Mark: And let me give you a couple of points on that.
Mark: Last year, the commercial banks, so large middle-market clients -
Mark: - and middle-market clients, so companies $5 million to $2 billion in revenues. That space for her in Houston grew 38 percent point to point last May to this May.
Russ: Wow, so sorta describe to us what's ahead for the rest of this year and next year for BBVA here in Houston.
Mark: Well frankly, we're trying to build the brand. So we're gonna finish out the building.
Mark: And become even more known, you know, on the 30th of June, they take the measure of deposits here and rank the banks.
Mark: We were fourth last year. We moved from fifth to fourth in 2011.
Mark: I don't know where we're gonna be this year. I hope we move up. Our deposits are clearly up. So we wanna get that word out that we've moved up. We will also be involved with the NBA All-Star Game -
Mark: -here in the first part of the year, which'll be fun and we'll be moving into the building in March. And we've recently sponsored the Malba Exhibit at the Museum of Fine Arts; first time some of these works have been out of Argentina, but it's works from all over South America. That exhibit, again, at the Museum of Fine Arts, runs through August.
Russ: Really cool. You guys are getting out there.
Mark: But probably the most exciting thing for the footprint is the new system that we're putting in place, the new core platform.
Mark: Spending $400 million on a state-of-the-art platform so that we can have all the information at our fingertips in real time.
Russ: Okay, sounds cool. I always, though, when I visit with bankers and stuff, I mean it's an interesting business. I don't understand how you guys differentiate from each other. How do you do that?
Mark: Well what we're trying to do is be known as a bank for entrepreneurs here in Houston. So this is our Houston-wide mandate, okay, we really believe that if we can help a client add value, meaning creating our cash flow for their business, those businesses are valued, based on that multiple. So if we can add a dollar or 2 or 10 or 100 or whatever the number is, we've added value and they get a multiple of that when they go sell their business someday, if they choose to do that. So if we can bring them ideas that will help, then they'll be clients for 20 years and not 2.
Russ: Okay, well you're talking about our sweet spot right here on The BusinessMakers Show.
Mark: I love it.
Russ: So we love to hear banks focused on entrepreneurs and Mark, I really appreciate you coming in and I sincerely appreciate you explaining the relationship between BBVA right here in Houston and Spain and sounds like you guys are solid. Maybe they ought to move the parent company headquarters to right here.
Mark: Move it from Birmingham here?
Russ: Well, from Madrid here.
Mark: Madrid? You know? It'd be - that'd be great.
Russ: All right, well thanks a lot for coming in, Mark.
Mark: You bet, thanks for having me.
Russ: You bet. That's Mark Montgomery, the Houston City President for BBVA Compass and this is the BusinessMakers Show heard on the radio and seen online at TheBusinessMakers.com.