5 Bankers Who Know Their Stuff

A banker who specializes in beer? Seafood? Dentistry? You bet. Before banks lend money, they want assurances that the borrower can pay them back. That means having a deep understanding of the industry in which the banks clients operate. On the following pages, you will meet five bankers in Washington who are among the acknowledged experts in the business sectors where they specialize.

SEAFOOD & MARITIME INDUSTRY

Banker: Tim Antilla
Title: Senior vice president, Commercial Lending
Institution: Wells Fargo Bank

Tim Antilla likes the high seas. As a Wells Fargo commercial banker, he works with people who set out every day to find fish in some of the roughest and coldest waters on Earth. His clients are at the mercy of weather, ocean currents and big swings in market prices.

The people in this industry are real entrepreneurs, Antilla says. Its the only organized economic activity thats based on hunting. You have to know that your customer is going to have good and bad years, and in any particular season things can change in a matter of days.

His lending strategy hinges on long-term relationships meant to help clients build their businesses based on products that are most valuable to them. Antillas skill comes from years of studying industry trends, from a deep understanding of markets with no standard product definitions and from knowing that the best annual harvest forecasts may be wrong.

Youve got to have some sympathy and flexibility for the clients youre working with, he says. A Whitman College economics graduate who grew up in Longview, Washington, Antilla sees fisheries as a quintessentially Pacific Northwest industry, with lots of midsize companies serving different market segments. In its diversified loan portfolio, he says, Wells Fargo has a dominant market share of Northwest seafood companies.

After a stint in the Peace Corps and more than 15 years in international banking working in places such as New York and Hong Kong, Antilla returned to Washington in the early 1990s, working first with Rainier Bank, where he developed his fisheries expertise. He has been with Wells Fargo for the past 11 years.

Fishing vessel owners and seafood processers are part of his client mix. A typical customer runs a privately owned business with sales of $20 million and up. Antilla sees three trends now shaping the industry: business consolidation to achieve more efficiency, an upswing in aquaculture businesses focused on farm-raised salmon, shrimp and tilapia, and industry globalization.

More companies have to reach out farther for additional resources or to access foreign markets, he says. When you get into export markets, exchange rates become a big factor.

Of Finnish descent, Antilla says that in his spare time hes trying his hand at chess and likes to bake bread. And after learning a few years ago that Kimi Raikkonen, a Finn, is a top Formula 1 driver, Antilla became hooked on the international sport and, at least once a year, travels with his wife to Formula 1 racing events the world over.

Its an unbelievable sport because of the technology involved and because of the demands on drivers, Antilla notes. They repeatedly go from zero to 100 mph and back to zero in six seconds, and they have to turn right and left on the track. It takes incredible skill.

Not unlike an experienced banker working in the maritime industry.

DENTISTRY

Banker: Marc Mohagen
Title: Vice president, Business Banking
Institution: HomeStreet Bank

Theres healthy competition among banks to lend to dentists because dentists as a market group run stable practices, are easy to talk to and have a low loan default rate. And lets face it: Everybody needs to see a dentist once in awhile.

Those factors, however, are secondary to what Marc Mohagen at HomeStreet Bank really likes about his work specializing in lending to dental practices. We try to set ourselves apart by putting something together that helps them meet their long-term goals, realize their dreams, Mohagen says. We want our loans to make sense in terms of how they can successfully buy a practice, invest in new equipment, relocate and even put a retirement plan together.

Lending to dentists is pretty much all Mohagen focuses on professionally.

Its rewarding to meet with potential new clients, he says, … to find out what they want to accomplish and then help them move on in life and their careers. It feels like youre doing something good for someone else.

A 1984 graduate of the University of Washington, Mohagen got into banking as a part-time teller at US Bank. He completed the banks credit training program, became a loan officer and then moved into private banking. He has been with HomeStreet since 2005.

The dental industry has been good to Mohagen in many ways. He met his future wife on a blind date arranged by a dental client. The couple now have three children whom he helps drive to soccer and basketball practice and Irish dance and violin lessons. Despite the hectic schedule, he has not given up his his weekly ice hockey games with friends.

While dentistry remains an attractive business, Mohagen says the industry faces some challenges as insurance companies reduce reimbursements for certain procedures. To compensate, dentists are cutting expenses and working harder.

The downturn in investment markets has hurt a lot of retirement portfolios, Mohagen says. Plus, dentists are typically healthy and seem to be working longer, even if they cut back their hours.

Mohagen says his ideal loan client is generating steady cash flow, has seen no big dips in revenue over the prior three years and has an adequate cushion to weather any downturn. We try to put something together that makes sense, he says.

AGRICULTURE

Banker: Mike McKay
Title: Senior vice president and agribusiness national sales manager
Institution: KeyBank

Photo by Charlie Schuck/CAM + Partners

Mike McKay grew up on a family farm near LaCrosse, in eastern Washingtons agriculturally abundant Palouse region. It seemed likely that he would stay in farming. And, in a way, he has. With an agricultural economics degree from Washington State University, he has built a career as an ag industry business banker, helping farmers and agribusinesses manage their operations and add value to their products.

McKay has been at it for 28 years, first with Rainier Bank and then with KeyBank in Wenatchee for the past 17 years. During the summer, I go help my brother [who stayed in farming], just to remind myself how hard the work is, McKay says.

As a national sales manager, McKay oversees KeyBanks ag-lending business throughout Washington, Oregon and Idaho, as well as in the Great Lakes regions of Ohio and Michigan, where farmers grow corn and soybeans and also raise hogs and other livestock.

The banks core portfolio centers on production agriculture, namely family-owned and corporate farms that bring crops and livestock to market every year. Peripheral businesses like food packing and processing are part of the mix, as are grape growing and wineries.

The ag business has been a bright spot during our nations recessionary meltdown, McKay says. In the past three or four years, commodity prices across the board have been stable, if not favorable. The industry faces challenges on the cost side, with land values increasing and labor getting more expensive. Overproduction and unfavorable weather can also be unpredictable factors, but the industrys generally healthy profile attracts outside investors interested in agricultural real estate and has made farming attractive again to young entrepreneurs.

Exports are a key part of the success, especially for fruit producers and hay growers.

McKay sees a positive long-term outlook for Northwest agriculture. With high-quality products coming out of the Columbia Basin, coupled with the water and power resources that we have here, it adds up to a strong outlook, he says.

In evaluating new loan clients, McKay looks for a strong financial history and a detailed business plan for future production.

From a business standpoint, better farmers are much more sophisticated about reporting, crop forecasting and business management, McKay explains. Theres been a good shift in the industry, especially with larger operations.

Much of McKays free time is taken up with family activities related to his three teenage children. He tries to find time during the summer for a little fly fishing. In the fall, he gets away for a pack trip into Idaho with his brother and college friends to hunt elk. Living in Wenatchee, he says, weve got some nice outdoor recreational choices.

BEVERAGES

Banker: Tod Finley
Title: Senior vice president, commercial banking
Institution: JPMorgan Chase

In the mid-1980s, fresh out of Oregon State University with a degree in finance, Tod Finley went to work for Seafirst Bank (now Bank of America) in its bank officer training candidate program. Among his first clients was a Corona beer distributor in Bellevue who introduced him to the key aspects of the competitive and fast-paced industry.

He has been fascinated ever since. Im interested in how distributors add value for their customers and how they contribute to the larger business community, says Finley, now with JPMorgan Chase. And, maybe because I have a math minor, I especially like the quantitative part of the industry. He means that beverage distributors operate in a high-volume/low-margin business where variables like the price of gasoline and the summer temperatures can make the difference between profit or loss.

Fifteen years ago, the distribution industry had a mix of operators that included ex-sports celebrities, Finley says. Now, its a professionally run, corporate business where everyone is working hard to be efficient.

He adds: These guys are using GPS tracking systems on their delivery cars and trucks. When youre moving product to small retailers, everything from your in-store [product] displays to managing fuel costs makes a difference.

Finley says bankers like the beverage-distribution business because revenues tend to be stable. According to the Beer Institute, beer sales in the United States rose 2.5 percent in 2011 over 2010. This kind of performance means less of a loan risk for lenders.

When evaluating a potential client, Finley looks at revenues and margins all the way down to net profit per case. Theres an ongoing need for capital in the business tied to upfront franchise fees, for instance, on new products and to industry consolidation, he says.

Finley appreciates the craft beer movement so prevalent in Washington and Oregon. I dont have a problem getting out of bed every morning, he says, because I am genuinely interested in these businesses. I enjoy what I do.

Finley, who has a daughter in college and a son in high school, tries to squeeze in time with friends by playing indoor soccer on Saturday mornings. My son is the good soccer player, he says. I consider my outings a success if I can get a good workout and I dont get hurt.

NONPROFIT ORGANIZATIONS

Banker: Anna Burnatowski
Title: Vice president, Seattle commercial banking
Institution: US Bank

Six years ago at US Bank, Anna Burnatowski was assigned a job as relationship manager for high-deposit account holders. It didnt take long for her to notice that many of these clients were nonprofit organizations providing social services and health care programs to low-income populations in the Puget Sound region. A few private schools were also on the list.

As I began to know the people in these organizations, many [people] started talking to me about their hopes for capital improvement projects, Burnatowski says. I became fascinated with effective ways that the bank could help. That led me to tax-exempt bond financing.

From that beginning, Burnatowski, who joined US Bank as a retail branch teller more than 14 years ago, has become an expert on financing for nonprofits. She describes many of her bond deals as involving a lot of moving parts, which she says makes her work more interesting and creative.

We realize that many not-for-profits operate from a mission standpoint to just break even, she says. Sources of [bond financing] repayment may come from an endowment, maybe reserves or even cash flow. We have been operating in this arena at a time when theres been a greater need for services while resources are less.

Burnatowski primarily uses two types of tax-exempt products to serve her clients: a variable rate demand bond arranged through either the Washington State Housing Finance Commission or the Washington State Health Care Authority, or a direct placement agreement, with US Bank buying back the bond as an investment.

To evaluate loan risk, Burnatowski checks out the client agencys cash flow, cash reserves and liquidity. She evaluates program service quality and capacity for growth, and looks at the agencys long-term track record in the community and its bank relationship.

A native of Poland, Burnatowski has two daughters and two stepdaughters. She has always been interested in commercial banking and interned after college with a bank in her home country. I see every day as a learning opportunity in this fascinating business, she says. Our whole team is involved with our clients. … All that keeps me motivated.