This month we had the opportunity to speak with Gary Gallo, Vice President and Senior Credit Officer at Aquesta Bank. Gary leads his credit team and has grown their loan portfolio from $120 million to $256 million in loans just over the past four years. Their bank is continually in the top five banks in the Southeast and we wanted to hear straight from the source how they stay current, involved within their community, and at the forefront of our financial industry. So without any further ado, let’s hear how Gary has managed to lead this growth for his team:
How did you personally get started in the financial industry?
I’m the Senior Credit Officer at Aquesta Bank and I’ve been here about six years. Before I joined, I worked in the private wealth arena with big banks like Bank of America and Wells Fargo for over ten years. I really wanted to step back into the world of community banking. Aquesta Bank is headquartered in Cornelius, North Carolina which is only six miles from my home, so not only would I be able to get back into community banking but be involved in the community again. Plus, now I don’t have to deal with a long commute!
In 2009, Aquesta Bank was coming out of the excitement of ‘08 that everyone had gone through. It gave me an opportunity to help make a few final improvements to a couple of issues in the loan portfolio, but it wasn’t nearly as bad as other banks. We weren’t affected too much by the crash and we were able to clean up the portfolio. Over the last four years, that portfolio has grown from $120 million to $256 million in loans.
With this growth comes challenges, and one of those is what led us to choose MountainSeed. We had previously ordered all appraisals and reviews in-house, but as our loan portfolio grew and loan values grew, it made sense to outsource this function. It became too much internally for myself to handle on top of the credit approvals, annual reviews, etc. so we reached out to MountainSeed. They helped take over that part of the process and it’s helped us tremendously.
Tell me a little bit about Aquesta Bank.
Currently, Aquesta Bank is a little over $350 million dollars in asset size. The loan portfolio represents approximately $256 million dollars of that number. Aside from commercial banking, we also own an insurance agency, Aquesta Insurance. We originally started out in Cornelius and have been in business for nearly 11 years. We now have branches in Davidson, Huntersville, and two in Mooresville. All of these locations are relatively close within about a ten-mile radius. Two years ago we also decided to open a loan production office in Wilmington, North Carolina and we now have two lenders at that branch.
We decided to compete within the city and opened an office in Charlotte. We’ve found great success there and we now have three lenders out of that location. In the last month, we also hired a lender out of Greenville, South Carolina, our first attempt at lending outside of the state.
With all this growth, we’ve been able to keep our asset quality high and maintain profitability. When you look at competing banks of a comparable size, we are continually one of the top five in the Southeast.
What are the greatest challenges you face day to day as Senior Credit Officer?
Meeting loan growth goals and maintaining asset quality at the same time is always a challenge. We are under a lot of pressure to continue to grow but we don’t want to sacrifice credit quality just to have growth. As the economy improves regionally, banks that have better economies of scale can be more price competitive. That can be hard to do all while maintaining profitability with a bank our size, especially since we always try to sell on personal service and the ability to talk with senior management if need be. When you boil it down it’s all the same product, so we try to focus on hiring only the best people to work on our team. When we partner with a customer, we want there to be a value added. Most of our management team has over 30 years of experience and we see this as a strong attribute.
How does Aquesta Bank give back to the community?
We get involved with a lot of community events. One of our favorites is the Big Day at the Lake, where we are a large sponsor. Additionally, many of our employees who own boats donate their time and boat. As a result, more at risk youth get to experience a fun day on the lake.
We also participate in the Tawba Walk Arts and Music Festival which has become a big event in Cornelius. Our team sets up a tent to give away food and water to let the community know we support them.
In May we organized and sponsored the Butterfly Run in honor of one of our employee’s battle against cancer and to raise money for cancer research. A portion of the proceeds also goes to Big Day at the Lake. The 5K began and ended at Aquesta Bank’s headquarters. Many of our employees were involved, including the one who has a band and provided live entertainment for the runners.
What do you find are the hardest challenges for commercial and residential appraisal management?
The cyclical market is tough and it’s most important to get knowledgeable appraisers out there who will give accurate values. It’s always tough because stockholders want the bank to grow and be profitable, so you’re under a great deal of pressure to do just that. To grow organically, you have to book loans and have the value of that collateral support the credit, so appraisers are under a lot of pressure to find values that support the loan request. Sometimes it works, sometimes it doesn’t.
I’ve seen the collapse in the Northeast in the 90s and there is a lot of speculation of the role appraisals played in the overvaluation of real estate. The real estate market fell soft, values dropped, and that happens sometimes. It’s hard to predict.
In the South, we saw it again in the residential market in 2008. Charlotte and Atlanta seem to be heating up lately with some of the strongest growth rates in the country. We have to keep a close eye on this getting out of control and over inflating home values though.
What’s Aquesta Bank working towards in 2017?
We’ve added two new team member to the credit underwriting team and a credit manager. Back when I started, we had three people on the credit team and now we are a department of seven. We are excited to maintain our credit quality and help our sales team grow the bank.
What do you like to do in your free time?
First and foremost, I love being out on Lake Norman. My wife and two kids, one’s graduating high school and the other is in college, love spending our weekends out on the lake. We have many friends and fellow Aquesta Bank members who boat, so we like to meet up, relax, have fun, and eat some good food together.
When I’m not on the water, I’m a big racing fan of all forms both open wheel and stock cars. When I got out of college, I had a SECA racing license but since I couldn’t keep that up I just became an avid fan.
Onto the Lightning Round:
What’s your favorite vacation spot?
I love visiting Seabrook Island in South Carolina, just South of Charleston. Seabrook is a little smaller with golf courses and an equestrian center, but my favorite part is the deserted beaches.
Do you have any pets?
One dog who’s a rescue and is twelve years old. Her name is Lady and she’s a black lab, border collie, and chow mix.
Do you have any wise advice on how to keep a healthy work/life balance?
That’s a tough one — my best advice is to work as hard as you can during the week, and keep the weekends for family and fun.
How do you stay up to date on the latest news and trends in the financial industry?
What is the biggest risk you have taken in your life or career?
Personally, I’d have to say jumping off a 60-foot cliff into a lake where I dislocated my shoulder. In the professional realm, my biggest risk was leaving my roots in Connecticut to pursue my career in North Carolina.