It’s hard to imagine where El Paso would be today if Les Parker hadn’t taken off after high school to join the American kids wandering Europe in the ’60s and landed a teller job at a German bank when he ran out of money.
He went on to start two community banks in El Paso over a 57-year career: Bank of the West, now WestStar, and United Bank of El Paso del Norte to meet the needs of fledgling and successful businesses alike.
Now 75, he’s retiring as chairman of United Bank at the end of this month and may, with his wife, Cathy, hit the road again to see America or maybe Europe and look for a certain German bank where it all began.
Parker started United Bank in the 1990s at a time when access to capital – or rather the lack of it – was a big issue for frustrated entrepreneurs and on the political front.
The big Downtown banks were coming under heavy criticism for refusing to make start-up business loans and for sending their El Paso deposits away to be put to work elsewhere.
“It has gotten a little better, but I don’t think it’s changed markedly,” Parker said. “There are only two banks in El Paso that are local. They’re the only ones that keep their profits here.”
Parker sees problems down the road for businesses big and small because of the dwindling number of banks – big and small.
At one time, there were more than 20,000 banks in the U.S. By the mid-1990s, the number of smaller banks with assets under $1 billion was about 8,000. Today, it’s about half that.
Fewer community banks in fewer communities will inevitably mean fewer loans for small business, Parker said, in mid-sized and large cities, not to mention smaller towns that may only have one bank.
Parker met with El Paso Inc. at his office in the bank’s classy Downtown headquarters, a former parking garage at Campbell and Main. He talked about community banking and what a difference it’s made in El Paso, the rumor that he was fired and the prospects of United Bank staying locally owned and run.
Q: So, you’re 75, and you’re doing very well for 75. Why did you wait so long to retire?
I’ve enjoyed the business for a long time, and finally after fighting with the federal government and all the regulations and everything, one day I just decided.
Starting last fall, we actually planned that I would retire at the end of this month. Monty Rogers, our president, was already on board, and he had acquitted himself very, very well. I was chairman and CEO, so earlier this year, I transferred the title of CEO to him, and he’s done wonderfully.
Q: What are you going to do? What’s your retirement plan?
I am finding that I have a lot of stuff I want to do around the house and hobbies that I haven’t been able to get to. Also, I’d like to do some traveling. My bride, Cathy, and I are both looking forward to that. I would very much like to see some more of this beautiful country, just getting in the car and going, or buying a trailer or something like that. I also want to go to Europe.
Q: You know, we heard a rumor you were fired, which would be a tough way to go after everything.
Yeah, there are so many rumors that run around this town. We got a kick out of it after you called. I also heard that the bank is for sale. For at least the last four or five years, we’ve had continual rumors about that. And then I’ve heard that we were selling.
People have approached us, and every time they did, I’d take it to the board. There’s not been anything that they have chosen to consider. At some point, I hope they do. I’ve got a lot of stock here, too.
Q: Could you sell your stock?
I could, but I’d be crazy to just sell it when I know that if the bank were to sell, it would be worth a lot more. So why would I want to sell it?
Q: There’s been a lot of discussion about federal regulations since the Great Recession, and the Obama-era regulations that came along. What’s the state of banking regulations under the Trump administration and do they impact your business day-to-day?
During the Obama administration, the federal government swelled hugely because that was his thing. He thought it was the proper way to run the country.
At one time, this bank was the largest (Small Business Administration) lender in the city, and at one time, I was SBA lender of the state of Texas. I’ve believed in SBA lending. But during that period, they started adding a lot of fees and costs – not just to the bank but also the borrower.
Let me say, we have good SBA people here. But we went from being the top SBA lender to almost none. Now, we’ll take the same chances, but we’ll increase the rate to cover our expenses.
Q: What’s the state of regulation now?
Under Trump, probably to everybody’s surprise, he set about to fix those things. In 2017, a lot of community banks thought happy days are here again. But 2017 wasn’t that hot. Then the tax law changed and in 2018, we saw the economy take off.
Q: Have banking regulations been reduced?
Yes, they’ve eased off on some of it. But I don’t I think they’ve done what they could. We’ve been running the country’s banking industry with executive orders. That means it will tend to go away with the next president.
Q: How did you get your start in banking?
After high school, I did what a lot of 18-year-olds do. They live foolishly. I was chasing ladies, having a good time and I found myself in Berlin, Germany, and I had no money. I answered a want ad for a teller job, got it and I signed on at about $120 a month. I felt rich. I stayed for two years.
That was in the ’60s, and I was about to be drafted. I came to El Paso to visit my folks and just to make sure I kept my draft deferment, I enrolled in Texas Western. I graduated with a bachelor’s degree in business administration and finance. I had also gone through ROTC because I knew I was going to be drafted when I got out.
Then I went into the Army as an officer, and they put me in nuclear weapons because I’d had a lot of science. I ended up spending four years in Southeast Asia. That does not mean Vietnam, and I’ll say no more.
Q: When you got out, you headed for banking?
As quickly as I could. I started at Southwest National Bank one block over from here at 301 Main. I went to work for them and because of my prior banking experience in Germany, they made me a junior operations officer.
Southwest National Bank, which was later acquired by First City out of Houston, had the reputation for creating more bank and savings and loan presidents in this town than any other institution. I got lucky with them and created some programs that First City used across Texas and the U.S.
Then they had a banking charter they were about to lose. It was one of the last of the cheap charters and you only needed $1.2 million to capitalize it.
My boss recommended me. It was March, and they said we have this charter and a piece of land on the Westside of El Paso on Sunland Park, and we have to have this bank open and functioning by January.
Q: Sounds like Mission Impossible.
Right, so I said sure, why not? They never called me again until I was ready to open the thing on Jan. 2. By gosh, we did open, and it was called First City Bank West and it was the farthest bank west in the state of Texas at that time.
Q: How many banks have you started?
Three. First City Bank West inJanuary 1979, thenBank of the West, now WestStar, and this one, United Bank. And I cleaned up a fourth one here in town, and it was after that that I got the idea for Bank of the West.
About then, we’d had problems with savings and loans Downtown. We had all sorts of things going on with banks, and I thought if you set up a bank in Texas with a capitalization of $10 to $20 million, you’d go like a house afire.
I took it to a wealthy friend, and he said if you put together a group, I’ll join you. I knew right then I had the money because he alone could write a check. I went to Tom Hussman, who had started Montwood Bank, and I went to a fellow named John Hanson, who was a highway contractor, and to Charlie Leavell and John MacGuire.
Q: What about this one, United Bank?
We opened this on May 1st of 2001. I left Bank of the West in 1999 to put this one together.
Q: How is this one different?
This bank is a business bank, and it’s the only all-business bank we have in our past.
Q: What do you mean by all business?
We’ve never had an ad for a consumer account, ever. Now we have consumer accounts, but they’re all related generally to the small to medium businesses that are our main customers.
At all our locations, it’s easy for a businessperson to get in and out. We never have crowded lobbies. We never have crowded motor banks. Everything we do we focus on trying to help small to medium business, and we help people start businesses, too.
Q: Where did the idea for this bank come from?
I got the idea in the 1990s when I saw it got tougher and tougher for small businesses to get loans. So I thought why don’t we do just a business bank? That’s what this is.
A lot of people thought it would do well in El Paso because, if you were going to start a business in El Paso, how would you do it? The typical way was to borrow money from friends and family, use credit cards or use payday lenders.
Q: That’s expensive.
All of it is. So I said well if we have a business bank and we focus on that, our deal is we want to do small businesses and medium businesses. The big banks would prefer to do the big businesses and larger businesses.
Q: As I recall, you started United Bank at a time when small businesses and entrepreneurs were having big problems getting access to capital in El Paso. State Sen. Eliot Shapleigh and Mayor Ray Caballero got involved in the early 2000s and made a big fuss about it with the help of a study by the Community Scholars program showing that El Pasoans’ money in big banks was leaving town and not being used to help small businesses locally.
Exactly. So doing something like this made a big difference.
Q: Have things changed for small businesses since then, and have bigger banks gotten into the local market?
No, everybody else sends their profits out of town, so they can’t be reinvested here to build El Paso. We and WestStar are the only ones who do that. The other thing is that most of the big banks – and I’m not trying to beat up on them – have different markets and business plans than we and WestStar do.
Their focus is on mega-corporations and big companies and things like that. And that’s how they’re geared, and they do really well with all of that.
Q: How important are community banks, United and WestStar, to business and the economy of El Paso today?
Well, they are important. Every other bank is not community banking. Look at FRED – Federal Reserve Economic Data and you can Google it. What’s nice about it is it’s real. It’s hard economic data.
Q: What will the data tell you?
They have so much incredible data, and they cover all sorts of incredible data about the U.S. economy, about people, banks, manufacturing, companies.
And it shows what’s happened to commercial banks in the U.S. with average assets under $1 billion. Those are most of your community banks in the United States.
Q: Have things changed?
Oh, massively. At one time, we had over 20,000 banks. When I started Bank of the West, we had in excess of 15,000. It’s very unusual for a country to have banking like this, to have a lot of little banks.
But the way the U.S. developed, all these little towns had to have a bank, right? And that’s why we got so many. When I started this one, we had just a hair over 8,000 banks in the United States under $1 billion in size. Today, we have half that number, about 4,000.
Q: What’s happening?
There are actually between 5,000 and 6,000 banks total in the United States. There are a lot more over $1 billion than people think. But what supports local economies are those little banks, the ones under a $1 billion.
Few of them go out of business these days, but they’re absorbed or purchased or whatever. And, as they do, more of those little banks that used to take care of the small-to-medium businesses and communities are gone.
Then, you have to rely on the big guys to do it, but the big guys are set up to do big businesses. JPMorgan Chase is a good organization. But JPMorgan Chase only does 20% of its business and commercial banking. They have hundreds of businesses under that umbrella of JPMorgan Chase.
Q: Is their focus at all on small businesses in El Paso?
I’m sorry, I don’t think so.