From Appalachian roots, Burton guides PPNB loans

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The vice president of credit administration at Pikes Peak National Bank, Justin Burton moved to Colorado Springs more than three years ago to enjoy the beautiful scenery and outdoor lifestyle. With both a bachelor’s degree in economics and an MBA from Appalachian State University, the 31-year-old North Carolina native spent some time this week with the Business Journal to share his experiences as a young professional in banking.

Describe your job.

I manage the loan operations and underwriting departments of the bank. This includes loan documentation, payment processing, compliance, financial analysis and collateral valuation. For the most part, this means ensuring that accurate and timely information is presented to our customers, loan employees, loan committee, board of directors and regulators. I also help my staff develop professionally and provide them with opportunities for advancement. It’s challenging and rewarding, and I get to help local businesses. I’m fortunate to have great employees and can see the end result of the bank’s work in the community.

What is your biggest challenge and how do you combat it?

Retaining employees is a big challenge. Good talent is going to leave and go to other jobs, if they’re not satisfied where they are. So as a manager, you have to constantly be training your employees, keeping them engaged, making sure they have opportunities to grow. Hopefully they stay.

How do you help small businesses?

The bank does a great job helping small businesses in the Pikes Peak region, whether they’re our customers or not. [Among other things], I get to sit down with customers and loan officers. I help them understand how I view a customer’s financial statements and what steps could be taken to improve their chances of having their loan approved.

What do you advise small businesses needing loans?

As a business owner, you should know how to read your financial reports and be able to explain the reason behind the numbers. That’s one of the big hold-ups in the loan process — the back-and-forth, having to ask questions on why the numbers look this way.

Banks perform trend analysis on their financial statements and ask a lot of questions, such as why sales went up, costs went down, dividends increased. In some instances, your financial performance will be compared to industry averages. If [the businesses are] prepared to answer the questions, we’re able to move their loan package ahead faster. Knowing your statements will help you get a loan faster.

What do you review before sending an application to the loan committee?

There isn’t a “one-size-fits-all” approach to commercial loans. However, the basic metrics I analyze on most applications include loan-to-value, cash flow, net worth, liquidity and leverage. I typically stress test for interest rate and vacancy changes on rental real estate applications. Previous management experience and well thought-out business plans are important in considering loan requests for start-up businesses. Operating lines of credit often involve analysis on accounts receivable, accounts payable and inventory.

How successful are businesses paying back their loans?

The majority of businesses I see are paying their loans as agreed, and delinquencies are very low. Having a loan structure that works well for your customer and at the same time mitigates risks for the bank is a good start to a successful relationship.

How do you successfully analyze numbers and manage people? 

It’s not always easy, but I have to pick the right mindset for the task at hand. Financial analysis is very detail-oriented and involves precise calculations. Although statistics can be flexible, there are many where you are either right or wrong. I have to focus, double check calculations and hope for periods of uninterrupted time.

To be effective at managing, I listen to what’s being presented and realize there could be many answers to one question. This type of work is less tedious, but requires me to use creativity and problem-solving skills. I also use calendars and to-do lists.

What’s the young professional vibe here?

We’re still a growing town. It’s important to make it attractive for businesses to move here, and to foster small businesses to be able to grow and provide more jobs in the future.

Did you always want to be a banker? What are your career goals?

My professional career post-college has been in finance and insurance. Prior to my current job, I was a contractor’s equipment insurance underwriter for a start-up firm and a financial analyst for a large national bank. I never set out to be a banker.

I thought I was going to teach snowboarding even after college … after a couple years, I realized it didn’t cover all my bills. My career goals are very broad. I just want to do work that has a positive impact, and I want to continue learning.